CHINA PROTESTS SANCTIONS AGAINST DALIAN SUNNY

S E C R E T BEIJING 000207 SIPDIS DEPT FOR EAP/CM AND ISN/MTR JOHN PAUL HERRMANN E.O. 12958: DECL: 01/23/2034 TAGS: PARM MTCR PREL MNUC ETTC CH IR SUBJECT: CHINA PROTESTS SANCTIONS AGAINST DALIAN SUNNY INDUSTRIES/LIMMT AND BELLAMAX REF: A. BEIJING 154 ¶B. SECSTATE 4887 Classified By: Political Officer Mark R. Evans. Reasons 1.4 (b/d) ¶1. (S) MFA Arms Control and Disarmament Department Missile Division Deputy Director Sun Lei called in PolOff on January 28 to complain about the "unacceptable" and "unilateral" sanctions announced against Chinese companies Limmt and Bellamax (refs A and B). Sun said China opposes the imposition of sanctions based on U.S. domestic law and that such actions are "not conducive" to maintaining "healthy" and "mutually beneficial" cooperation on nonproliferation issues "between our two sides." The United States, continued Sun, should allow China to "investigate" and "deal with" any Chinese company "in accordance with Chinese law." ¶2. (S) PolOff noted that the sanctions levied against Limmt and Bellamax only applied to those companies' dealings with U.S. companies and within the United States, and those sanctions had only been levied after repeated communication with China about those companies' proliferation activities. In response to a suggestion by PolOff that renewal of regular communication between the United States and China on nonproliferation issues might help avoid these types of sanctions in the future, Sun responded that "the U.S. knows very well why there is a current lack of dialogue" and that China expects the new administration to "correct these errors" and "have a better and more transparent approach to nonproliferation cooperation." PICCUTA