China subsidiary fined Rs 18 cr for Pak N-exports

The United States has imposed the highest ever penalty of nearly US $ 4 million (Rs 18 crore) on a Chinese subsidiary of an American company for illegally exporting high-tech coatings to Pakistan's under-construction Chashma 2 nuclear reactor.

The firm, PPG Paints Trading in Shanghai, a wholly-owned subsidiary of an American firm PPG Industries, was fined after pleading guilty to having illegally exported high performance coatings. It would have to pay US $ 3.75 million as penalty, the United States justice department said.

The fines represent one of the largest monetary penalties for export violations imposed in the history of US department of commerce's bureau of industry and security, the department said.

In addition to criminal penalties, the subsidiary firm and its parent company will also have to cough out another USD 1.7 million (Rs 7.6 crore) in civil fines to US audit.

The American company made only a trifle USD 32,319 (Rs 14.5 lakh) from the transaction which took place between June 2006 and March 2007.

Justice department sources said the Shanghai-based subsidiary company had filed that the coatings were for a nuclear power plant for China, which were then diverted to Chashma 2 in Pakistan's Punjab province.

The US has heavily restricted exports to entities affiliated with Pakistan's nuclear programme since the country exploded its nuclear bomb in 1998. "This case should serve as a warning to corporations that would violate US export laws," US Attorney Ronald Machen said. He said the hefty fine demonstrates their resolve to rigorously enforce US export law.

Chashma 2 is a Pakistan Atomic Energy Commission power plant under construction near Kundian, Punjab province with the Chinese assistance.

The Pakistan Atomic Energy Commission is the science and technology organisation in Pakistan responsible for its nuclear programme, including the development and operation of nuclear power plants in Pakistan.