US suspends export privileges of three companies for alleged illegal exports to China

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The Commerce Department building is seen ahead of an expected report on the number of new home sales in Washington, U.S., January 26, 2022. REUTERS/Joshua Roberts

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WASHINGTON, June 8 (Reuters) – The U.S. Commerce Department on Wednesday suspended the export privileges of three U.S. companies for 180 days for what it said were illegal exports of satellites, rockets and defense technology to China.

Quicksilver Manufacturing Inc, Rapid Cut LLC and US Prototype Inc received technical drawings and blueprints from US customers and sent them to manufacturers in China to 3D print satellites, rockets and defense-related prototypes without permission, the department said.

The three companies, which share the same address in Wilmington, North Carolina, could not immediately be reached for comment. The Chinese Embassy in Washington did not immediately comment.

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“Outsourcing 3D printing of space and defense prototypes to China harms the national security of the United States,” Assistant Secretary of Commerce for Export Control Matthew Axelrod said in a statement.

“By sending their customers’ technical drawings and blueprints to China, these companies may have saved a few dollars, but they did so at the collective expense of protecting US military technology.”

The department said the information illegally sent to China included prototypes of sensitive space and defense technologies and the 180-day export suspension could be renewed.

The Commerce Department did not identify the companies that had contracted with the North Carolina companies.

But, according to the department’s June 7 order denying export privileges, a U.S. aerospace technology and global defense company notified the department in February 2020 of the unauthorized export of a third-party controlled satellite technology provider. .

The department’s investigation found that Quicksilver received an order in July 2017 for satellite parts for the aerospace company’s prototype space satellite. To manufacture components, Quicksilver received a dozen technical drawings and 3D graphics/computer drawing files.

An employee of the company signed a nondisclosure agreement, which required the work to be performed in accordance with US export control regulations, the order said. These regulations required licenses that would likely have been denied.

But Quicksilver fulfilled the order in August without asking for a license and included an invoice showing that the products had been shipped from China, according to the order.

The Commerce Department said it uncovered a similar breach last July by Rapid Cut, whose ownership and personnel are also tied to Quicksilver, involving controlled technology for national security.

Quicksilver was also implicated in a breach involving a third U.S. company, a leading science and engineering company with contracts with the Department of Defense, the department said.

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Reporting by David Shepardson in Washington, Karen Freifeld in New York and Costas Pitas in Los Angeles; Editing by Tim Ahmann, David Gregorio and Richard Pullin

Our standards: The Thomson Reuters Trust Principles.

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