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Ex-PPG Exec Accused Of Nuclear Paint Smuggling

Friday, July 8, 2011

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Six months after PPG Industries’ Chinese subsidiary pleaded guilty to exporting high-performance coatings to a Pakistani nuclear plant, a former company executive is facing charges in the case.

Xun Wang was ordered held after her brief appearance Thursday (July 6) in U.S. District Court in Washington on charges of secretly exporting hundreds of gallons of paint and coatings to the Chashma 2 plant in Pakistan.

Wang was managing director of architectural coatings at PPG Paints Trading, a wholly owned Chinese subsidiary of PPG, the world’s second-largest coating company.

The plant is the same one involved in the December case, in which PPG Paints Trading Shanghai agreed to pay a $3.75 million penalty.

 Chashma 2 nuclear power plant
China is helping Pakistan build and expand its Chashma 2 nuclear power plant.

Parent company PPG Industries paid a $750,000 civil penalty in that case— “to satisfy certain compliance and reporting obligations,” the company said—and entered into a non-prosecution agreement (NPA) with the Justice Department.

PPG Responds

PPG Industries spokesman Jeremy Neuhart said in a statement Friday:

“PPG has chosen not to disclose information regarding the specific names, status or number of employees involved in this matter. This matter as it pertains to PPG has been resolved, and so we’re not going to comment on any particulars going forward.

“PPG has a long and sustained commitment to compliance with the law and to operating in accordance with the highest ethical standards throughout the organization. PPG’s commitment to compliance includes compliance with U.S. export control laws, and PPG is continuing its efforts to enhance its export compliance program.”

Subsidiary Pleads Guilty

In December, PPG Paints Trading pleaded guilty to conspiring to violate the International Emergency Economic Powers Act, the Export Administration Regulations, and other charges.

The guilty plea “stemmed from actions by PPG Paints Trading that caused the illegal export, re-export and/or transshipment of high-performance coatings from the U.S. to the Chashma 2 Nuclear Power Plant in Pakistan (Chashma 2), via the People’s Republic of China without the required export license,” according to a U.S. Department of Justice summary of the case.

Chashma 2 is a Pakistan Atomic Energy Commission power plant in Punjab province. In November 1998, following Pakistan’s first detonation of a nuclear device, the U.S. Commerce Department placed PAEC and its plants and reactors on a list of prohibited end users under the Export Administration Regulations, DOJ notes.
License Denied

At some later date, PPG Industries requested a license to export the coatings—a request denied by the Commerce Department in June 2006.

PPG Industries officials notified Wang of the decision and said that she and other company officials “must abide by the ruling,” The Associated Press reported last week.

“Nonetheless, the indictment alleges, Wang and other PPG Paints Trading representatives arranged to export the coatings to the Pakistani reactor through a third-party company in China,” according to AP. “The purchase orders falsely identified a Chinese nuclear power station as the end user for the shipments, prosecutors say.”

Government officials declined Friday to comment on the case.

China Supporting Plant

China is helping Pakistan build and expand the Chashma 2 plant, which began commercial operation in May. The facility is designed for power production, but there is concern that spent fuel from the plant could be reprocessed to produce plutonium and uranium that can be used in nuclear weapons, AP reported.

 Chashma 2 generator
The plant is based on the same 1970s-era technology as that used in Japan’s now-crippled nuclear reactors, raising international concerns about safety.

There is also concern about the plant’s safety. Although new, the facility uses the same 1970s technology as that of Japan’s Fukushima Daiichi plant, which was crippled in March by an earthquake and tsunami.

Chashma 2 is Pakistan’s third nuclear power plant. Pakistan, which remains outside of the Nuclear non-Proliferation Treaty, plans at least two more reactors on the site by 2030.

2nd Technology Smuggling Case

Wang’s case is the second in four months that involves federal allegations of smuggling restricted technology to Pakistan’s nuclear program, AP noted.

In March, a Pakistani man living in Maryland was charged with illegally buying sensitive technology for his country’s nuclear program. The indictment charged Nadeem Akhtar, 45, of Silver Spring with buying radiation detection devices, resins for coolant water purification, and calibration devices for the Chashma nuclear power project.


Tagged categories: Business operations; Laws and litigation; Nuclear Power Plants; PPG; Protective coatings; Violations

Comment from Chuck Pease, (7/18/2011, 6:11 PM)

This is just out and out BS. If you or I were caught smuggling something into to China do you think we would get off with a non prosecutuion aggreement with the Justice Dept. Ya right

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