U.S. firm, subsidiaries admit role in sending military software for Z-10

[samantk]

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(CNN) -- A Canadian subsidiary of a U.S.-based multinational firm pleaded guilty in federal court Thursday to illegally sending software to China, which it used in the development of its first advanced attack helicopter, according to the U.S. attorney in Connecticut.

Pratt & Whitney Canada -- a subsidiary of Hartford, Connecticut-based United Technologies Corporation -- pleaded guilty to violating the Arms Export Control Act. In a case going back more than a decade, the firm admitted it sold software that was used in the development and testing of the new Z-10 helicopter for China's army.

UTC, Pratt & Whitney Canada and another UTC subsidiary -- Hamilton Sundstrand Corporation -- agreed to pay more than $75 million as part of a settlement with the U.S. government because of the arms export violations and for making false statements, according to a statement from U.S. Attorney David B. Fein and other federal officials.

The firms are expected to pay $20.7 million to the Justice Department and another $55 million to the State Department "to resolve outstanding export issues, including those related to the Z-10," court documents said.

"This prosecution is one of the largest resolutions of export violations with a major defense contractor in the Justice Department's history," Fein said.

Federal officials blasted the firm, saying the case "is a clear example of how the illegal export of sensitive technology reduces the advantages our military currently possesses."

"American military prowess depends on lawful, controlled exports of sensitive technology by U.S. industries and their subsidiaries," added John Morton, director of U.S. Immigration and Customs Enforcement (ICE).

According to court documents, an internal e-mail from a senior manager in September 2001 suggested that officials at Pratt & Whitney Canada knew the sales could violate U.S. sanctions.

"We must be very careful that the helicopter programs we are doing with the Chinese are not presented or viewed as military programs," the manager's e-mail read, according to the documents. "As a result of these sanctions, we need to be very careful with the Z10C program. If the first flight will be with a gun ship then we could have problems with the US government."

The contractor was allegedly trying to outflank its European rivals and develop a foothold in the lucrative Chinese civil helicopter market, thought to be worth up to $2 billion in the coming years, the documents added.

An internal briefing from September 2002 noted that "China's civil helicopter market potential is large (estimated at close to 20,000 aircraft by some)."

Chinese officials allegedly "made it clear that if (Pratt & Whitney Canada) wanted to have its engines considered for the yet-to-be-developed civil version, it would have to provide its engines ... with the understanding that the initial application ... would be military," the documents added.

But the firm allegedly "turned a blind eye to the attack helicopter application and went along with the 'sudden appearance' of a parallel civil program."

United Technologies says it accepted responsibility "for these past violations and we deeply regret they occurred," noting that it has "invested more than $30 million since 2006 to strengthen its compliance infrastructure."

"Export controls are an integral part of safeguarding U.S. national security and foreign policy interests," said CEO Louis Chenevert. "As a supplier of controlled products and technologies to the Department of Defense and other domestic and international customers, we are committed to conducting business in full compliance with all export laws and regulations."

The United States has imposed sanctions on the sale of military technology to China since 1989, after pro-democracy protests in Beijing's Tiananmen Square were crushed in a bloody Chinese crackdown. Congress strengthened sanctions less than a year later, specifically naming helicopters and helicopter parts in the ban.

The Z-10 helicopter is in production and started being used by China's armed forces in 2009, according to the Justice Department.

It is capable of being equipped with 30 mm cannons, anti-tank and air-to-air missiles, and is primarily intended as an anti-armor attack craft, according to federal officials.

Christopher K. Johnson, a senior adviser at the Center for International and Strategic Studies, said the case "highlights our issues with defense cooperation and competition with China."

"This is just another signal that those issues and tensions are unlikely to go anywhere," he said.


U.S. firm, subsidiaries admit role in sending military software to China - CNN.com

[sweetgrape]

To "prove" that china can't product indigenous weapon, the same news has been posted more than three times, the poster all are different indians!!
Good job, Indian, "thank" you for your "attention" about negative news about China, Your attention are our motivation to move forward!!
United Technologies sent military copter tech to China
China's Z-10 helicopters: US firm admits it screwed up

[KRAIT]

Pay Back Time

Lets see how it feels when you are on the other side.

J/K

[hasnain0099]

Janes has also reported it

Pay Back Time

Lets see how it feels when you are on the other side.

J/K

Instead of payback, rather it hints that Chinese tech development is no longer Russia centric (as argued by most of the internet materials). By hook or by crook, they got what they wanted.....I hope now people would understand why China's growth in tech has been phenomenal. Money makes things talk........

[twocents]

To "prove" that china can't product indigenous weapon, the same news has been posted more than three times, the poster all are different indians!!
Good job, Indian, "thank" you for your "attention" about negative news about China, Your attention are our motivation to move forward!!
United Technologies sent military copter tech to China
China's Z-10 helicopters: US firm admits it screwed up

Relax. Let our Indian friends post as many times as they choose. I really don't see any need to get defensive about it. If anything it is a correct strategy to learn from leaders in every field. No nation develops on its own in a vacuum. We all need to learn from others' successes and hopefully avoid their mistakes.

[samantk]

Relax. Let our Indian friends post as many times as they choose. I really don't see any need to get defensive about it. If anything it is a correct strategy to learn from leaders in every field. No nation develops on its own in a vacuum. We all need to learn from others' successes and hopefully avoid their mistakes.

If you see the titles they all are different and hence could not be seen as duplicates of the same topic, I say this because I posted one myself.

[scherz]

Relax. Let our Indian friends post as many times as they choose. I really don't see any need to get defensive about it. If anything it is a correct strategy to learn from leaders in every field. No nation develops on its own in a vacuum. We all need to learn from others' successes and hopefully avoid their mistakes.

Indians are hyper smart! They know everything for life since they have born,like... germs

[Fanling Monk]

What we can't develop momentarily we can always buy them with hard cold cash and that's a legal trade off. If the US thinks Pratt & Whitney Canada breaks the law that's her problem, not ours.

[twocents]

If you see the titles they all are different and hence could not be seen as duplicates of the same topic, I say this because I posted one myself.

It is in the news and I certainly do not have any problem with you posting it. As a matter of fact a lot of Chinese sites carry the story too. Chinese members there merely comment with amusement and nobody takes offense. I would like to see Chinese members on PDF take it in stride as well.

[qwerrty]

china is doomed now. the yanks has found out..oh wait.... turbomeca & xian group is making WZ-16 engine with 1800 SHP much more poweful that pratt & whitney and it's not secret

[Irfan Baloch]

correct me if I am wrong but it appears that this project is pretty much dead.
due to the western embargo

there are only few prototypes.. I dont see any news of serial production at the level of say J-10

[Luffy 500]

Good job china. China is doing the same thing that US and the russians did post WW2 and are still doing. Copying US tech also requires strong manufacturing base and an indigenous innovative capability which some wanna be supa pawa aspiring neighbor of china don't have and hence this jealousy of china's achievements. The design of the heli was completely indigenous. China smartly copied tech of the american engine and software and this imply's to US incompetence and failure to safeguard their tech. This stupid thread don't do much other than showing some country's
inability to compete with a global power like china.

[aazidane]

everything is fair in war. I dont see the problem china doing it. Industrial espionage is also fairly common everywhere in the world and this is for war.

[TaimiKhan]

correct me if I am wrong but it appears that this project is pretty much dead.
due to the western embargo

there are only few prototypes.. I dont see any news of serial production at the level of say J-10

As per Chinese internet sources, limited induction has started. The project has gone ahead even due to embargo, rather the embargo made the Chinese work harder and they have the thing in limited induction with PLA units for final evaluation & trials. Its not a dead project.

In recent months more and more pics of the heli have come out and a few days back 5-6 of them were flying all together, plus we saw the integrated helmet system also, HMD&S kind of thing.

Here check the below link, they had 12 of them back in April 2011, today is July 2012, who knows how many more added.

You don't make 12 prototypes in a project which is dead

I did heard that atleast 2 regiments of Z-10 are in service, how many in a regiment, no idea.

http://www.newcenturychina.org/forum...rs-in-service/

[doidoi2]

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You guys are hilarious if you think that China industry derives a significant part of its development from external sources. Here's the reality: Say you were handed full blueprints of the technology in question, say aircraft engines, you are still missing the majority of processes needed for success. Things like machining tools, QA procedures, deposition procedures used to make ultra tight tolerances possible etc. You cannot develop an entire system from "Spying" and "Reverse Engineering". At best you get ideas on how to proceed.

In today's world, you can't "Steal" technology in the traditional sense anymore, unless it's for a simple and easy to master technology. Technologies, especially in the military realm, have become complex behemoths involving thousands of processes. In order to incorporate technology, you really have to have the necessary technological and engineering support structures and basic science necessary to re-develop the entire technology from the ground up. In most cases, if you can reverse-engineer the technology, it means your technical base is already strong enough to develop the technology independently anyway within a couple years anyway.

That's why China's able to advance technologically despite embargoes against it. You think other nations don't want to "reverse engineer" and "copy" the latest US technology? The unfortunate fact is that they can't. It just simply isn't that easy. You'd have to steal entire systems and all the supporting equipment behind it, and that's unfortunately not possible.

One more thing, note that the accusation is all about SOFTWARE. Commercially, Software is obsolete within a couple years of writing it. If anyone thinks the code cannot be developed in China, you're dreaming. China excels at programming for the military. This is nothing more than the US state department trying to China Bash again. The US is trying to find any excuse to explain away the rise of technological China. It's trying to deceive itself on the upcoming challenge to its own technological supremacy.