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Back on March 30, 2005, DID covered the work of the US Immigration and Customs Enforcement (ICE) Arms and Strategic Technology Investigations (ASTI) division. ICE-ASTI is responsible for investigating illegal exports of military products and sensitive technologies. ICE are not alone, however, nor are they the only lever available to the USA.

On December 27, 2005, the US State Department declared that it was imposing sanctions on 9 companies (6 in China, 2 in India, and 1 in Austria) on the basis of credible information that the companies had transferred equipment or technology in violation of the Iran Nonproliferation Act (Public Law 106-178). A citation means that companies have sold materials to Iran that are included in international export control lists, or can be used in the production of missiles and weapons of mass destruction (WMD). The sanctioned firms are:

• China National Aero-Technology Import and Export Corporation (CATIC)
• Zibo Chemet Equipment Company
• Hongdu Aviation Industry Group
• Ounion International Economic and Technical Cooperative
• Limmt Metallurgy and Minerals Company.

It’s also worth noting one Chinese inclusion in particular:

• China North Industries Corporation (NORINCO) was formed out of the former Chinese ordinance ministry. It now has 800,000 employees working in over 200 subsidiaries, including some subsidiaries in the U.S. While it now also produces civilian products that supply goods to K-Mart, Wal-Mart, et. al., its arms-related products include armored vehicles, howitzers, mortars, rocket launchers, anti-aircraft weapons, anti-tank missile systems, small arms, ammunition, explosives, and NBC/WMD protection systems. The US State Department described NORINCO as a “serial offender” who has been cited repeatedly re: transfers of this type to Iran.

See the unclassified 2003 report “Weapons Proliferation and the Military-Industrial Complex of the PRC” by the Canadian Security Intelligence Service (CSIS) intelligence agency for more background in the area of Chinese proliferation activities, and some of the politico-economic drivers involved. Knight-Ridder’s Washington Bureau also had a solid wide-view article on Sept. 29, 2005 titled “U.S. slapping more sanctions on Chinese defense companies.”

Meanwhile, unclassified US Central Intelligence Agency reports to Congress have warned that Iran was vigorously pursuing indigenous nuclear and chemical-biological weapons programs, and focusing procurement efforts on commercial entities in Russia, China, North Korea and Europe. That report said that assistance by Chinese entities had helped Iran move toward its goal of self-sufficiency in the production of ballistic missiles, and also said there was evidence that Chinese firms had provided Iran with dual-use items applicable to chemical weapons as well as civilian uses. The report credited China with some positive anti-proliferation steps, but said the behavior of Chinese companies remained of great concern.

While China’s regime officially denies any connection with the sales, or even the existence of such transfers, NORINCO’s oft-cited status and close relationship with the Chinese government has triggered speculation that China is using Iran as a proliferation “cut-out” in much the same way that China helped Pakistan’s quest for atomic weapons and missiles as a cut-out move against its rival India.

Speaking of India, two companies in India were rapped for chemical-related sales to Iran:

• Sandhya Organic Chemicals Pvt. Ltd.
• Sabero Organics Gujarat Ltd.

Steyr AUG A3

Austrian arms manufacturer Steyr-Mannlicher GmbH, who manufactures the Steyr AUG assault weapon, was also sanctioned. In contrast to the Chinese list, however, State Dept. representatives have praised the country of Austria for its cooperation.

More than 40 firms and individuals have been cited under the Iran Nonproliferation Act since the first sanctions were imposed in 2001. The sanctions will prevent them from receiving export licenses required to buy certain U.S. technologies, and prohibit the companies from doing business with the U.S. government. Full import bans are also possible under the law.

In some cases, the lack of ties to the US market makes the effectiveness of such sanctions subject to debate, but US Department of State officials claim that targeting firms for sanctions creates visibility and pressure for change from their national governments.

Time will tell.