U.S. Senators say China supplying bogus weapons parts

WASHINGTON (Reuters) - Two key U.S. senators blasted China for failing to control a flood of counterfeit parts installed on U.S. weapons systems, and said they planned to take action to address the widespread problem.

Senate Armed Services Committee Chairman Carl Levin said committee investigators identified about 1,800 cases involving one million counterfeit parts since 2009, and those numbers were "just the tip of the iceberg."

"If China will not act promptly then we should treat all electronic parts from China as suspected counterfeits," he told a news conference on Monday. One option, he said, would be to require inspection of all shipments of Chinese electric parts, with the cost to be borne by the shippers.

Parts for defense systems are bought from many sources, which often are infiltrated with counterfeit items, the senators said. China has been identified nearly five times more frequently than any other country as a source of counterfeit parts, according to a Commerce Department report.

"There's a flood of counterfeit parts entering the defense supply chain. It is endangering our troops and it is costing us a fortune," Levin told reporters at a news conference, noting that counterfeits cost the U.S. electronics industry an estimated $7.5 billion a year.

Levin said the committee planned to introduce measures to make defense contractors and the Pentagon purge the counterfeit parts from the supply chain, and blasted China for not taking the issue more seriously.

Rather than cooperating, Chinese authorities had impeded the committee's investigation, with one embassy official telling them it could be damaging to U.S.-China relations, Levin said.

"Well, the Chinese have it exactly backwards. What is damaging to U.S.-China relations isn't our investigation. It's China's refusal to act against brazen counterfeiting which endangers our troops and our missions," he said.

Senator John McCain, the top Republican on the committee, said the issue was serious and needed to be addressed urgently because counterfeit parts posed real dangers to the U.S. troops and contributed to the high costs of weapons systems.

"We can't tolerate the risk of a ballistic missile interceptor failing to hit its target, a helicopter pilot unable to fire his missiles, or any other mission failure because of a counterfeit part," he said.

McCain said the issue was part of a larger challenge in U.S.-China relations and demonstrated that China was "falling short in certain important areas of its obligations as a responsible stakeholder in the international system.".

Last week, a U.S. intelligence report concluded that China was the most active and persistent country using cyber espionage to steal U.S. trade and technology secrets.

McCain and Levin said various measures were being considered to address the issue, including amendments that would clearly spell out that contractors should be held responsible for the cost of replacing any counterfeit parts.

"If you put the onus on all of our contractors, which we should do, to make sure that the parts that are being supplied are legitimate parts, they will get that message back to their suppliers as well," he said.

(Reporting by Andrea Shalal-Esa; editing by Bob Burgdorfer)