2 Chinese Charged for Illegally Exporting Microchips to China
On April 4, 2011, the Justice Department announced that two Chinese nationals, Hong Wei Xian and Li Li, have been indicted for attempting to smuggle radiation-hardened microchips from the U.S. to export to China, in violation of the Arms Export Control Act.
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(Since 1990, the U.S. has maintained an arms embargo against China. A programmable read-only memory microchip (PROM) serves to store the initial start-up program for a computer system and is built to withstand the conditions present in outer space and is a prohibited defense item on the U.S. Munitions List.)
Defendants' Company Imported Microchips for Govt-Controlled Corp. in China
According to the indictment, Xian is the president of Beijing Starcreates Space Science and Technology Development Company Limited, and Li is the company’s vice president. Among other things, Beijing Starcreates engages in the business of importing and selling programmable read-only memory microchips to China Aerospace Science and Technology Corporation, which is controlled by the Chinese government and plays a substantial role in the research, design, development and production of strategic and tactical missile systems and launch vehicles for China.
Conspired to Break Orders into Many Shipments, Mark Delivery for Outside China
Neither Xian nor Li allegedly applied for nor received a license from the U.S. to export defense articles of any description; however, from April 2009 to September 2010, the two are charged with contacting a company in Virginia and seeking to export thousands of radiation-hardened PROMs from that company.
The indictment states that Xian and Li knew a license was required, but did not seek to obtain one because it was difficult, time-consuming, and would require them to identify the end user and describe the end use. They are accused of conspiring to break up orders into multiple shipments and designate countries outside of China for delivery to avoid drawing attention to the orders.
If Convicted, Defendants Could Face Max Penalty of 25 Yrs in Prison
If convicted, the defendants face a maximum penalty of five years in prison for a conspiracy charge and 20 years in prison on an export violation charge.