A wealthy Californian woman of Chinese origin has pleaded guilty to conspiring to illegally exporting high-performance paint coats for a nuclear reactor under construction in Pakistan with China's assistance.
Xun Wang, a former managing director of PPG Paints Trading (Shanghai) Co. Ltd., a wholly-owned Chinese subsidiary of US-based PPG Industries Inc, entered the guilty plea before judge Emmet G Sullivan of the US District Court of Columbia.
51-year-old Wang faces a maximum sentence of five years in prison and a fine of up to $250,000.
No sentencing date was set. As part of her plea agreement with the government, Wang has agreed to cooperate with law enforcement authorities, the Justice Department said.
Wang is accused of conspiring to export, re-export, and transship high-performance epoxy coatings to the Chashma 2 Nuclear Power Plant in Pakistan, a nuclear reactor owned and operated by the Pakistan Atomic Energy Commission (PAEC), an entity on the Department of Commerce's Entity List.
In November 1998, following Pakistan's first successful detonation of a nuclear device, the Department's Bureau of Industry and Security added PAEC, as well as its subordinate nuclear reactors and power plants, to the list of prohibited end users under the Export Administration Regulations.
"At the end of last year, the Chinese subsidiary of a US company pleaded guilty to illegally exporting high-performance coatings for use in a Pakistani nuclear reactor," said US Attorney Ronald C Machen.
"Today we are pleased to see the former managing director of that subsidiary accept responsibility for her role in the crime. We also welcome the defendant's decision to cooperate with the government in our ongoing investigation of this blatant violation of US export laws," Machen said.
Concurrently, Wang has also settled an administrative proceeding brought by the Department of Commerce regarding the same subject matter as her criminal case.
As part of her settlement agreement, Wang has agreed to pay a civil penalty of $200,000 with another $50,000 payment suspended, and to be placed on the Department of Commerce's Denied Persons List for a period of five years with an additional five years suspended.
As a Denied Person, Wang will be prohibited from directly or indirectly participating in any transaction involving a commodity, software or technology exported, or to be exported, from the US that is subject to Department of Commerce regulations.
Earlier PPG Paints had entered guilty plea. Together, PPG Paints Trading and its parent company, PPG Industries, paid $3.75 million in criminal and administrative fines and more than $32,000 in restitution.
The combined amount of criminal and civil fines represented one of the largest monetary penalties for export violations in the history of the US Department of Commerce's Bureau of Industry and Security, the Justice Department said.
According to Wang's plea documents, in January 2006, PPG Industries sought an export license for the shipments of coatings to Chashma II.
In June 2006, the Department of Commerce denied that license application, the Justice Department said.
Following that denial, Wang and her co-conspirators agreed upon a scheme to export and transship PPG Industries' high-performance epoxy coatings from the United States to Chashma II, via a third-party distributor in China, without first having obtained the required export license from the Department of Commerce.
The plea documents further allege that from around June 2006 through around March 2007, Wang and her co-conspirators intentionally concealed from PPG Industries that the paint would continue to be delivered to Chashma II.Further, members of the conspiracy stated, or caused to be stated, that the coatings were to be used at a nuclear power plant in China, the export of goods to which did not require a license from the Department of Commerce.
Through these means, Wang and her co-conspirators allegedly exported three shipments of coatings from the United States to Chashma 2 without the required Commerce Department license, the Justice Department said.
