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Boeing Charged With Export Violations (Jan. 3)

All right. Let me give you the basics on this. We have
sent a charging letter, a letter of charges, to Hughes Electronic
Corporation and Boeing Satellite Systems, which was formerly Hughes
Space and Communications. Boeing purchased that entity from Hughes
Electronics January 13th, 2000. There are 123 charges that are
detailed in this letter. The letter is available from the Press Office
or at the reading room located at 515 22nd Street, Northwest. It's 32
pages long. You can read it.

Charges involve various violations of the Arms Export Control Act and
the International Traffic in Arms regulations in connection with
misconduct of these corporations in the aftermath of the January 1995
failed launch of the Long March 2E rocket carrying the APSTAR II
spacecraft, the February 1996 failed launch of the Long March 3B
rocket carrying the Intelsat 708 spacecraft, and the transfer of
detailed data relating to the Astra 1G satellite and the Astra 1H

Hughes Electronics Corporation and Boeing Satellite Systems took
numerous actions in violation of established export controls and
prohibitions and restrictions and of the bilateral agreement between
the United States and China.

The U.S.-China Launch Technology Safeguards Agreement formed the
essential basis for the launch of all U.S. manufactured satellites
from China. The charging letter provides a detailed analysis of the
kinds of assistance that were not authorized by the Department of
State despite well known defense trade sanctions related to China and
repeated warnings not to engage in launch failure investigations.

The number and the substance of the charges reflect the seriousness of
the violations. Any assistance to improve the launch vehicle is
clearly prohibited by the U.S.-China bilateral agreement on technology

The companies now have 30 days to respond to the charging letter. In
their response, or within seven days of the service of that response,
they can request an oral hearing, and then the administrative process
will proceed.

If the insurance company demands detailed information, under
State Department regulations, they are not supposed to provide

Again, they are bound by the agreements, by the
conditions of the licensing, and those are what we expect them to
adhere to.

One last thing. Boeing company said they bought the branch
from Hughes after all this had happened and they said they basically
have nothing to do with the violations. What is your response to that?

I said Boeing bought the company from Hughes after all
this had happened, but they're still the responsible party to respond
to these claims about the unit and what it did. (ends)

Comments by State Department Spokesman