Chinese Company Admits U.S. Charges Over Nuclear Exports

A Chinese company agreed to pay $2 million in fines after admitting it helped to export nuclear reactor paint from the U.S. to Pakistan without a license.

China Nuclear Industry Huaxing Construction Co., which is operated by the Chinese government, pleaded guilty in federal court in Washington today to conspiring to defraud the U.S. and violating U.S. export laws.

The Nanjing City, China-based company, known as Huaxing, admitted that, without Commerce Department approval, it bought a paint system from PPG Industries Inc. in 2006 used to coat the inside of a nuclear reactor being built near Chashma, Punjab.

U.S. District Judge Emmet Sullivan fined the company $1 million and said it must pay another $1 million if it violates terms of its five-year probation. Assistant U.S. Attorney G. Michael Harvey told Sullivan the company was also fined $1 million by the Commerce Department.

“The lesson here is clear: We will pursue violations of U.S. export controls wherever they occur in the world,” U.S. Attorney Ronald Machen said in an e-mailed statement. “We will prosecute both individuals and corporate wrongdoers, and a corporation’s status as foreign-owned, or even state-owned, will not bar enforcement of those laws in U.S. courts,”

Pittsburgh-based PPG Industries and its Shanghai-based unit agreed in December 2010 to pay $3.75 million in fines for selling hundreds of gallons of an epoxy coating to Huaxing for use in Pakistan after the company’s application for the license was rejected in June 2006.

The company “will fully comply with U.S. laws going forward to avoid a repeat of this situation,” Huaxing’s lawyer, Sotiris Planzos, told Sullivan.

The case is U.S. v. China Nuclear Industry Huaxing Construction Co., 12-cr-00251, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington at

To contact the editor responsible for this story: Michael Hytha at

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