US fines PPG's Chinese subsidiary for illegal Pakistan nuclear exports

Posted By: Manoj Kumar Ramesh
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Washington, Dec 22 (ANI): The United States has fined the Chinese subsidiary of PPG Industries Inc. nearly four million dollars for illegally exporting high-performance coatings to a nuclear reactor in Pakistan.

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)," the Dawn quoted the US Justice Department, as saying.

The 3.75-million-dollar payment, which includes a 2-million-dollar criminal fine and a 1-million-dollar civil fine, represents one of the largest fines ever related to export violations in the history of the US Commerce Department's security program.

"This case demonstrates our resolve to vigorously enforce U.S. export law," The Wall Street Journal quoted US Attorney Ronald Machen Jr., as saying in a statement.

"It should also serve as a warning to corporations that would violate U.S. 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 added.

PPG said that it would record a charge equal to the amount of the payments, or 3.75 million dollars in the fourth quarter of 2010.

The company, which must comply with the deal for two years, said that it "acted promptly once it learned of the wrongdoing and noted that under a non-prosecution agreement with the Justice Department, the US government will not bring charges related to the matter against PPG or its affiliates.

According to the Justice Department, PPG Industries had sought in 2006 an export license to ship coatings to Pakistan's Chasma 2 power plant in Punjab Province.

The US Commerce Department denied the license in June 2006, and afterwards PPG Paints Trading, a Chinese subsidiary, agreed to sell coatings to a third-party distributor in China that would in turn deliver the coatings to be used at the nuclear reactor, the government said.

The transactions took place between June 2006 and March 2007, and in its purchase orders for the shipments, PPG Paints "falsely stated the coatings were to be used at a nuclear power plant in China, the export of goods to which would not require a license from the Department of Commerce," the government added. (ANI)

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