Ex-PPG Paints manager gets year in jail for illicit exports
Xun Wang, a former managing director of PPG Paints Trading (Shanghai) Co., Ltd., a Chinese subsidiary of U.S.-based PPG Industries, was sentenced Thursday to a year in prison for conspiring to violate the International Emergency Economic Powers Act, the U.S. Justice Department said.
Wang, 52, was sentenced by Judge Emmet G. Sullivan of the U.S. District Court for the District of Columbia. In addition to the prison time, Wang was ordered to pay a $100,000 fine and to perform 500 hours of community service.
Wang pled guilty to the conspiracy in November 2011, and agreed, as part of her plea, to cooperate with the government’s investigation. Her cooperation led to the Dec. 3, 2012, guilty plea by the China Nuclear Industry Huaxing Construction Co., Ltd. That plea is believed to have marked the first time that a Chinese government-backed corporate entity has entered a plea of guilty in a U.S. criminal export matter. As part of its plea agreement, Huaxing agreed to the maximum criminal fine of $2 million, $1 million of which will be stayed pending its successful completion of five years of corporate probation.
“Xun Wang was the most senior PPG Paints Trading corporate executive involved in this unlawful export scheme,” said Ronald C. Machen Jr., U.S. Attorney for the District of Columbia, in a statement. “This prosecution has already held corporations accountable for their violations of U.S. export laws, but today's prison sentence shows our determination to hold corporate executives personally responsible when they compromise our nation's security in the pursuit of corporate profits.”
In November 2011, Wang also settled an administrative proceeding brought by the Commerce Department regarding the same subject matter as her criminal case. As part of her settlement agreement, Wang agreed to pay a civil penalty of $200,000, with another $50,000 payment suspended, and to be placed on the department’s Denied Persons’ list for five years with an additional five years suspended.
As a Denied Person, Wang will be prohibited from directly or indirectly participating in any transaction involving a commodity, software or technology exported, or to be exported, from the United States that is subject to Commerce Department regulations.
“This case clearly demonstrates our resolve to hold individuals responsible for violations of our export control laws,” said Eric L. Hirschhorn, Commerce undersecretary for industry and security. “Individuals can no longer hide behind a corporate veil. BIS Special Agents will continue to leverage our unique authorities to pursue violators anywhere in the world.”
In both the criminal and administrative cases, Wang is accused of conspiring to export, re-export, and transship high-performance epoxy coatings to the Chashma II Nuclear Power Plant (Chashma II) in Pakistan, a nuclear reactor owned and/or operated by the Pakistan Atomic Energy Commission, an entity on the Commerce Department’s Entity List. Concealed, unlicensed shipments of the coating materials were made to Chashma II from June 2006 to March 2007.
The Pakistan Atomic Energy Commission is the science and technology organization in Pakistan responsible for Pakistan’s nuclear program, including the development and operation of nuclear power plants in Pakistan. In November 1998, following Pakistan’s first successful detonation of a nuclear device, the Commerce Department’s Bureau of Industry and Security added the Pakistan Atomic Energy Commission, as well as its subordinate nuclear reactors and power plants, to the list of prohibited end users under the Export Administration Regulations.
Wang’s conviction is related to the Dec. 21, 2010, guilty plea of PPG Paints Trading to a four-count information in the U.S. District Court for the District of Columbia. Together, PPG Paints Trading and its parent company, PPG Industries, paid $3.75 million in criminal and administrative fines and more than $32,000 in restitution. The combined amount of criminal and civil fines represented one of the largest monetary penalties for export violations in BIS history.