DOJ: China-Controlled Huaxing Pleads Guilty to Illegal Export Charges

Date : 12/03/2012 @ 2:31PM
Source : Dow Jones News
Stock : Ppg Industries, Inc. (PPG)
Quote : 116.89  -0.87 (-0.74%) @ 12:05AM
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DOJ: China-Controlled Huaxing Pleads Guilty to Illegal Export Charges

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   By Saabira Chaudhuri 

A China-based construction company controlled by the People's Republic of China agreed to pay $3 million and pled guilty in an investigation of illegal exports of coatings from the U.S. to a nuclear power plant in Pakistan, according to the U.S. Department of Justice.

According to the justice department, China Nuclear Industry Huaxing Construction Co.'s plea represents the first time that a corporate entity controlled by the People's Republic of China has pled guilty in a U.S. criminal export matter.

The department said the company's guilty plea is the result of a long-term investigation of illegal exports of high-performance epoxy coatings from the U.S. to the Chashma II Nuclear Power Plant in Pakistan, which Huaxing was building as part of a nuclear cooperation pact between the People's Republic of China and Pakistan, and which is owned by the Pakistan Atomic Energy Commission

Huaxing's guilty plea is related to the December 2010 guilty plea of PPG Paints Trading (Shanghai) Co.--a Chinese subsidiary of Pittsburgh-based PPG Industries (PPG)--which was charged with the conspiracy to export high-performance coatings for use in the Pakistani nuclear reactor. The parent and its subsidiary paid $3.75 million in criminal and administrative fines and more than $32,000 in restitution.

Nanjing-headquartered Huaxing, which bought the coatings for application in the Pakistani reactor, was charged with conspiring to violate the International Emergency Economic Powers Act and the Export Administration Regulations.

The company has agreed to the maximum criminal fine of $2 million. The terms of Huaxing's probation will require it to implement an export compliance and training program that recognizes its obligation to comply with U.S. export laws. Huaxing has also agreed to pay another $1 million immediately and be subject to multiple third-party audits over the next five years to ensure compliance with U.S. export laws.

-Write to Saabira Chaudhuri at

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