Export Controls: Sensitive Machine Tool Exports to China

摘要

On Septmber 14, 1994, the Department of Commerce approved an export of machinetools to China. These tools had been used at a plant in Columbus, Ohio, that produced aircraft and missiles for the U.S. military. The contractor, McDonnell Douglas Corporation, was closing the plant and arranged for the sale of the tools to the China National Aero-Technology Import and Export Corporation (CATIC) for use at the CATIC Machining Center, a Chinese government-owned facility. The machine tools were to be used to produce parts for commercial aircraft that would be built in China under a contract with McDonnel Douglas. However, some of the more sophisticated machine tools were shipped to the Nanchang Aircraft Company, a facility that produces fighter aircraft and cruise missiles for the People's Liberation Army as well as civilian products. Concerned with whether the risk of a diversion was recognized and appropriately dealt with during the export licensing process, you asked that we review the circumstances surrounding the export of these items. Specifically, we addressed the following issues: What are the military and civil applications of the equipment and are these military applications important to China's military modernization plans; What was the process for approving the licenses and how did the process address the risks associated with this export; Were export control license conditions violated and, if so, what was the U.S. government's response.