US imposes sanctions on China’s military procurement branch

21 September 2018

The US government has imposed sanctions on China’s defence procurement agency over its acquisition of Sukhoi Su-35 fighter aircraft (pictured) and S-400 surface-to-air missiles. Source: Sukhoi

The United States has imposed sanctions on China’s defence procurement agency, the Equipment Development Department (EDD), following its acquisition of military equipment from Russia.

The US State Department said on 20 September that the EDD’s recent acquisition of Russian materiel breaches Section 231 of the Countering America’s Adversaries Through Sanctions Act, which was signed into law on 2 August 2017.

The State Department said the sanctions applied to the EDD – an agency under the State Council’s Central Military Commission (CMC) – and its director, Li Shangfu, “for engaging in significant [military] transactions” with Russia. The procurements referred to by the State Department comprise China’s acquisition of 10 Sukhoi Su-35 fighter aircraft and an initial batch of S-400 surface-to-air missiles.

“Both transactions resulted from pre-August 2, 2017, deals negotiated between EDD and Rosoboronexport, Russia’s main arms export entity,” it added.

In response to the decision, a spokesperson for the Chinese Ministry of Foreign Affairs said at a press conference on 21 September that the Chinese government “strongly urged” the US to withdraw the sanctions.

According to the State Department, the sanctions imposed on the EDD included: a denial of export licences; a prohibition on foreign exchange transactions under US jurisdiction; a prohibition on transactions with the US financial system; and a blocking of all property and interests in property within US jurisdiction.

The department also blacklisted 33 people and entities associated with Russian defence and intelligence sectors, adding them to a ‘List of Specified Persons’ (LSP) under Section 231 of CAATSA. The department added that the number of persons now identified on the LSP totalled 72.

The department said that Section 231 of CAATSA and the newly announced sanctions were “not intended to undermine the military capabilities or combat readiness of any country but rather to impose costs on Russia”.

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