1. To make the barbecue sauce, combine the tomato paste, water, honey, chili, vinegar, garlic, salt and pepper together in a small saucepan. Bring the mixture to a boil and simmer until the chili is tender, about 20 minutes. Transfer the mixture to a blender and puree. (This can be made in advance and stored in the refrigerator for 1 week.)
2. Brush half of the sauce on the flank steak, cover and refrigerate for at least 30 minutes or overnight.
3. Preheat the grill to medium-high.
4. Grill the flank steak for 4 to 8 minutes on each side, depending on the desired doneness. Let the steak rest on a carving plate for 1 or 2 minutes before slicing.
5. Slice the steak on the bias and serve it with the remaining barbecue sauce.
Serving Size: about 1/4 pound steak