The United States on Tuesday fined the Chinese subsidiary of a US firm nearly four million dollars for exporting coatings to a Pakistan nuclear site. PPG Paints Trading in Shanghai, a wholly-owned subsidiary of PPG Industries, agreed to pay 3.75 million dollars over the exports - from which it had earned just 32,319 dollars - the US Justice Department said.
The fines "represent one of the largest monetary penalties for export violations in the history of the US Department of Commerce's Bureau of Industry and Security" established in 1987, it said. The company was accused of "illegal export, re-export and/or transshipment of high-performance coatings from the United States to the Chashma 2 Nuclear Power Plant in Pakistan via a third-party distributor (in China)," it said.
In addition to the maximum criminal penalty of two million dollars, the two companies agreed to pay an additional 1.75 million dollars in civil penalties and submit to a US audit. US Attorney for the District of Columbia Ronald Machen said in a statement that the case should "serve as a warning to corporations that would violate US export laws."
"It is not only unlawful, it is also bad business. In this case, the millions in fines to be paid by the corporate defendant are 100 times more than the gross proceeds generated by the unlawful export scheme," he said. The transactions took place between June 2006 and March 2007 after PPG Paints Trading unsuccessfully sought an export license to ship the coatings to Chashma 2, the Justice Department said.
The company said at the time that the coatings were for a nuclear power plant in China, which would not require a license. The United States has heavily restricted exports to entities affiliated with Pakistan's nuclear program since Islamabad joined the club of nuclear-armed states in 1998. Pakistan scrambled to secure the technology after India's first nuclear test in 1974, and is now believed to have up to 100 nuclear weapons.
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