Nuctech Company

Nuctech Company, Ltd (同方威视技术股份有限公司, formerly 威视股份) is a Chinese state-owned security inspection products company created in 1997 as an offshoot of Tsinghua University.[1][2] The company was headed by Hu Haifeng, son of former General Secretary of the Chinese Communist Party Hu Jintao, until 2008.[3] Subsequent chairmen include Rong Yonglin and Zhou Liye; the current chairman is Chen Zhiqiang.[4] Nuctech Company's parent company, Tsinghua Tongfang, is controlled by the China National Nuclear Corporation,[1][5] a state-owned company that manages China's civilian and military nuclear fuel development program.[6][7][8] The company's state ownership, military links, and ties to the Chinese Communist Party have raised concerns from other countries about granting it control over strategic security infrastructure.[1][9][10][11][12]

Nuctech Company
Native name
同方威视技术股份有限公司
FormerlyNuclear Technology Company
TypeState-owned enterprise
IndustrySecurity, Inspection
Founded1997 (1997)
FounderKang Kejun, Chen Zhiqiang
Headquarters
Beijing
,
China
Key people
Dr. Zhiqiang Chen (President, Chairman and CEO)
ProductsCargo scanning, metal detector, X-Ray, puffer machine
OwnerChina National Nuclear Corporation
Number of employees
5000 (global)
Websitewww.nuctech.com

History

Nuctech Company was founded in 1997 in Beijing as Nuclear Technology Company Ltd. It subsequently changed its name to Nuctech Company in March 2002.

In 2014, the Transportation Security Administration banned Nuctech equipment from U.S. airports due to security concerns.[9][13]

Products and services
Nuctech X-Ray scanner truck

Nuctech Company manufactures security inspection products. It provides advanced technologies in the security inspection industry to its customers from 160 countries and regions in the world, including Iran, Syria, and Venezuela.[14][15] The services are provided for civil aviation, customs, railway, highway among others.[16][17] Products offered are for cargo and vehicle inspection, baggage and parcel inspection, and personnel screening.[18]

Controversies

Nuctech Company has been mentioned in a number of media reports concerning controversies.[2]

Procurement investigation in the Philippines

In 2006, the Philippine government bought 30 units of mobile X-ray equipment through a loan agreement with the Chinese government for a total value of P7.953 billion. In 2016, it was reported that the Commission on Audit of the Philippines (COA) found that the contract had been "exorbitantly overpriced".[19] A quotation from another supplier showed that an X-ray machine with superior performance only cost P124.6 million each, for a total of P3.738 billion for thirty units, P4.215 billion less than Nuctech's alleged inferior product. COA auditors clarified that the price inquiry was made despite the difficulty in providing an accurate unit price and full specifications of Nuctech's machines. The COA also found that the maintenance cost of the X-ray machines from Nuctech was also more expensive by P3.264 million compared to other suppliers. The COA asked the Bureau of Customs to review the original contract and evaluate the deal.[19]

Anti-dumping dispute

In July 2009, it was reported that Nuctech was accused of "illegal dumping" by Smiths Group and that an anti-dumping investigation by the European Union (EU) was ongoing.[20][21] In June 2010, the EU imposed a five-year tariff on Nuctech products for alleged dumping on the European market.[22] The anti-dumping measures expired in the absence of an extension request.[23]

Bribery scandal in Namibia

On July 21, 2009, Nuctech representative Yang Fan (杨帆) and two Namibians, Teckla Lameck and Jerobeam Mokaxwa, were arrested after the Anti-Corruption Commission of Namibia (ACC) discovered that a US$12.8 million down payment on 13 scanners had been diverted to a firm called Teko Trading owned by the two Namibians.[24][25][26][3][27] Namibia prosecutors accuse them of joining in a bribery scheme that secured a $55.3 million contract in May 2008 to install Nuctech scanners at customs inspection points across Namibia.[24][28][3][29] Other sources report the contract to be worth $69 million.[30]

Netizens in China were blocked from accessing stories about the son of Hu Jintao in the wake of the scandal. Chinese web portals, Sina and NetEase, could not be opened for several hours after they posted reports about the company linked to Hu Haifeng.[30][31] The report related to Hu Haifeng had been deleted from both web sites when their technology sections came back online.[32] An industry insider who declined to give his name said that both Sina and NetEase were likely to face official sanctions.[32] Neither company confirmed that the sites had been blocked by the authorities or that their blockage was linked to any content. A customer service executive at Sina said the site had experienced technical problems.[32]

General Martin Shalli, a veteran fighter for Namibian independence trained in the former Soviet Union, was subsequently suspended by Namibian president Hifikepunye Pohamba for allegedly having received millions of Namibian dollars from Nuctech.[33][34][35][30]

Bribery scandal in Taiwan

In March 2020, the Taipei Times reported Taiwan's former head of the Aviation Police Bureau's aviation security section was found guilty on corruption charges in relation to a procurement project involving Nuctech.[36][37]

Canadian embassies contract rejected

In July 2020, Canada's foreign affairs minister stated that he would review contracts awarded by the Canada Border Services Agency in light of Nuctech's connections to the Chinese Communist Party.[38][10] After hiring Deloitte to undertake a security review, the Canadian government decided to reject a $6.8 million deal with Nuctech.[39][40]

Quality and procurement concerns in Malaysia

According to a July 2020 report by Malaysiakini, the National Audit Department and the Royal Malaysian Customs Department have both cited quality and procurement concerns with Nuctech products.[41]

U.S. sanctions

In December 2020, the United States Department of Commerce added Nuctech to the Bureau of Industry and Security's Entity List.[42]

References
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  2. Wines, Michael (2009-07-21). "Graft Inquiry in Namibia Finds Clues in China". The New York Times. ISSN 0362-4331. Archived from the original on 2019-10-06. Retrieved 2020-07-17.
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