The US imposed Iran Nonproliferation Act sanctions last month on nine entities, seven of them Chinese. The Federal Register notice wasn’t actually published until earlier this month and the media didn’t get really pay attention until last week (NYT, WP, BBC). Among them are familiar names like China Aero-Technology Import and Export Corporation (CATIC), China Great Wall Industry Corporation, and China North Industry Corporation (NORINCO).
The Times quotes unnamed officials who describe the exports as “high-performance metals and components that…could aid the country's efforts to extend the range of its missile fleet.”
We’ve occasionally wondered why getting slapped with INA sanctions doesn’t appear to earn you an automatic place on the BIS Entity List. After all, BIS describes those on the list as “foreign end users involved in proliferation activities…determined to present an unacceptable risk of diversion to developing weapons of mass destruction or the missiles used to deliver those weapons [italics added].”
Now that description would seem to fit these Chinese entities pretty well, but yet they don’t appear on the Entity List.
In addition to an outright ban on arms exports, INA sanctions disallow licenses to export dual use items to sanctioned entities, but there’s no mention of other authorizations such as license exceptions or “no license required”. Contrast this to the regulations underpinning the Entity List which go further and permit BIS to in effect prohibit all exports through an all-encompassing license requirement.
In other words, INA sanctions only bar the export of
relatively sensitive dual use items that would normally require a license whereas a spot on the Entity List could
potentially put a halt to all
So what’s going on here? Does the differential treatment of various proliferating Chinese entities perhaps have something to do with their relative economic importance? Some of the recently sanctioned companies are major businesses. Or is it just a garden variety bureaucratic inconsistency? Something else?
One last note. For what it’s worth the Chinese call the sanctions “extremely irresponsible and unproven” (which isn’t exactly the same as saying they’re untrue).