Egypt grants port rights to China shipper cited for smuggling nuke tech

Monday, May 22, 2000

CAIRO [MENL] -- Egypt has signed an agreement to grant a reputed Chinese arms smuggler access to Port Said facilities.

Officials have acknowledged that the government of President Hosni Mubarak has signed a a deal that would allow China Ocean Shipping Co. facilities in Port Said. Egyptian authorities did not name the company in announcing the agreement. The company, however, was named by China's Xinhua news agency.

In 1998, the Chinese company was denied access to certain U.S. facilities because it has been cited in reports as having smuggled weapons, nuclear weapons and missile parts from Beijing and North Korea to Middle East countries. Canada has also launched a probe of the company, which has requested facilities.

The company has also smuggled weapons systems and technology from the former East Bloc to Chinese clients.

Congressional sources said the company has also been alleged to have shipped stolen U.S. weapons technology and components to Beijing.

Egypt is not the first country to use the shipping company. China Ocean Shipping has used Israeli facilities in the Haifa port. Xinhua said the first ship to have arrived in Port Said was the Empress Phoenix, caught smuggling $1 million worth of Chinese assault rifles into the United States in 1996.

U.S. intelligence sources told Congress that a ship belonging to the Chinese company transported weapons materials from China to the main nuclear weapons laboratory in Pakistan. They said the company also has links to drug smugglers.

The sources said China is alleged to have smuggled the T-59 -- a modified version of the Soviet T-54 tank -- to Sudan. Beijing has also sent missile and nonconventional weapons to Egypt, Iran, Pakistan and Syria. U.S. intelligence sources also suspect that China has transferred U.S. weapons systems to Beijing for reverse engineering.

"Egyptian authorities may not wish to rethink their deal with COSCO," said Middle East analyst Eric Watkins, "but they will certainly want to inspect, very carefully, any containers deposited on their wharves by such ships of dubious reputation as the Empress Phoenix."