In a groundbreaking move, Arkansas officials have taken a bold step towards safeguarding their state’s interests. A Chinese government-owned agricultural company, China National Chemical Co. (ChemChina), has been compelled to divest itself of 160 acres of farmland in Craighead County. Furthermore, they are facing a substantial $280,000 fine for failing to make timely disclosures to the state. The farmland in question is owned by Northrup King Seed Co., a subsidiary of Syngenta Seeds LLC, which is ultimately owned by ChemChina, a state-owned enterprise.

First State Against China

This historic move by Arkansas makes it the first state in the United States to take such action, thanks to a series of laws passed by the Legislature in 2023. Governor Sarah Huckabee Sanders, along with Attorney General Tim Griffin and Agriculture Secretary Wes Ward, jointly announced these actions during a press conference at the state Capitol.

The Grounds for Divestiture

Governor Sanders underlined the importance of this move, stressing that Syngenta primarily uses the Northeast Arkansas acreage for seed research. Meanwhile, ChemChina is listed as a Chinese military company by the U.S. Department of Defense, posing a clear threat to the state. Sanders argues that seeds represent a form of technology, and Chinese state-owned corporations can use this technology to benefit their homeland, potentially compromising American research and national security.

Act 636 of 2023

Act 636 of 2023, mentioned by Sanders, is at the heart of this compelling decision. It bans parties from nine countries from owning agricultural land in Arkansas. Attorney General Griffin went a step further, stating that he would send a letter to the Chinese company, giving them a two-year deadline to divest themselves of the Northeast Arkansas farmland under this new state law. If the company refuses to comply, legal action will be taken to force divestiture.

Also Read: US Judge Upholds Florida Law Restricting Property Ownership For Chinese Citizens

Maximum Civil Penalty Imposed

Griffin also revealed that he imposed the maximum civil penalty on Syngenta for failing to disclose its foreign ownership to the state. This penalty amounts to 25% of the property’s fair-market value, which stands at $1.12 million, making the fine a substantial $280,000. The company has 30 days to pay this fine, a penalty incurred due to their failure to meet the deadline set for disclosing their ownership chain by June 2022.

Future Prospects

Regarding potential actions against other foreign-owned companies, Griffin and Sanders did not disclose any specific plans. However, they emphasized that there are varying degrees of ties between Chinese companies and the Chinese government, and in this case, the companies involved were Chinese government-owned. The Arkansas Department of Agriculture played a pivotal role in assisting Griffin’s office in determining the ultimate ownership of agricultural land in the state.