WASHINGTON – China’s government has failed to curb manufacturing of counterfeit military electronic parts by Chinese companies that are the “dominant source” of fakes in the US defence supply chain, a senate investigation found.
The US air force suspended in January a Shenzhen, China-based firm from supplying parts to US contractors after it sold about 84,000 suspect components, many of them installed on US aircraft, according to an example cited in the US senate armed services committee report released yesterday.
The panel’s report outlines the results of a 14-month investigation disclosing dozens of examples of suspected counterfeit electronic parts.
Saying US companies and the military services didn’t crack down on abuses, the committee said the defence industry “routinely failed to report cases of suspect counterfeit parts, putting the integrity of the supply chain at risk”.
The report did not cite any examples of counterfeit parts causing damage, such as lives lost or aircraft that crashed.
The committee said it found “overwhelming and undeniable evidence to support” the conclusion that China hasn’t taken steps to stop operations “that are carried out openly in that country”.
“Rather than acknowledging the problem and moving aggressively to shut down counterfeiters, the Chinese government has tried to avoid scrutiny, including denying visas to committee staff to travel to mainland China as part of the investigation,” according to the report.
Asked to comment on the report, Chinese foreign ministry spokesman Hong Lei said the US should conduct a “thorough investigation” into the sellers of the parts and the types of deals involved.
“Whether the relevant accusations are reasonable is still questionable,” Mr Hong told reporters in Beijing yesterday.
Phone numbers listed on websites or online advertisements for Hong Dark Electronics Trade and two other Chinese companies mentioned in the report were either disconnected or being used by other firms.
The senate committee’s investigative staff amassed a database with 1,800 cases of counterfeiting involving about a million parts. It scrutinised 100 cases and found that 70 per cent of the suspect parts were traced to Chinese companies.
The UK and Canada followed China, based on the resale by companies in those countries of parts from China, according to the report.
The “vast majority of the 1,800 cases appear to have gone unreported to the defence department or criminal authorities”, the report found.
Suspect parts went into equipment ranging from thermal night-vision sights for army weapons to computers installed on Lockheed Martin Corp missile interceptors and transport aircraft as well as those made by L-3 Communications Holdings Inc and Boeing Co, according to the panel’s report.
Questionable parts also made it into special forces helicopters, Raytheon Co’s GPS-guided Excalibur artillery shell and General Dynamics Corp’s Army Stryker Mobile Gun, according to the report.
The committee disclosed at a November hearing that it found counterfeit parts on at least seven aircraft, including the C-130J transport aircraft from Bethesda, Maryland-based Lockheed Martin and the P-8A Poseidon maritime patrol from Chicago-based Boeing.
Two new air force C-27J Spartans from New York-based L-3 deployed to Afghanistan had displays with suspect parts, according to the panel. – (Bloomberg)