TAIWAN EXPORT CONTROL ISSUES

1. (C) Summary: AIT relayed ref A and ref B talking points,
and ref C inquiry regarding possible export control talks on
December 15-16, to Taiwan's Board of Foreign Trade (BOFT) and
National Security Council (NSC) officials. Both BOFT and NSC
indicated tentative acceptance of December 15-16 dates.
Request Washington confirmation of proposed export control
talk dates/topics/desired participants (para 7). BOFT
identified items imported and exported by the Royal Richard
Company (ref D) and provided a report on the types of machine
tools exported by the Cheng Hwee Company (ref E). End
Summary.



2. (C) On November 10 and 17 AIT delivered ref A and B
demarches to NSC and BOFT officials. Taiwan has not yet
responded to these demarches, but promised it will do so
after it completes investigation of the information provided.


Export Control Policy Talks on December 15-16, 2004


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3. (C) AIT also informally raised the idea of export control
talks in Taipei on December 15-16 with NSC and BOFT. Both
agencies responded positively but asked for agenda details
and desired participants. BOFT Import/Export Administration
Director Peter Ho suggested consulting individually with
principals in Taiwan's key export control agencies on
December 15, followed by an interagency meeting on December


16. NSC Senior Advisor Lin Chen-Wei also told AIT that
December 15-16 was acceptable but noted a formal AIT proposal
for talks would be needed to hold the dates open.

BOFT Report on Royal Richard


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4. (C) On November 18, BOFT detailed Royal Richard's imports
and exports in 2004 (refs D and E): Royal Richard imported 4
kilograms of photographic papers and 8 kilograms of
photographic films from South Korea in May 2004. The total
value was USD180. Royal Richard exported 40 units of bug
zapper lights in August 2004 to Ghana worth USD411. Taiwan
regulations require ships to formally declare hazardous
chemicals such as sodium cyanide that transit Taiwan ports
even if the cargo does not pass through Customs inspection or
officially enter Taiwan Customs' territory. Customs
statistics show no transshipments through Taiwan in 2004 of
any Royal Richard cargoes, and no transshipments of sodium
cyanide to North Korea or China.

Cheng Hwee Trading Company


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5. (C) Also on November 18, BOFT relayed to AIT the Taiwan
Industrial Technology Research Institute (ITRI) investigation
report on the 158 different items that the Cheng Hwee Trading
Company had exported to North Korea over the past four years
(ref E). The report found that none of the items were
strategic high technology commodities (SHTC). BOFT added
that even under Taiwan's new "catch-all" provisions, none of
these items needed export licenses since there was no proof
they would be used to produce military equipment.



6. (C) Comment: Taiwan continues to insist that it is not
stopping machine tool shipments to North Korea. Taiwan's
trade with North Korea involves only a few companies and a
negligible percentage of its overall trade, yet authorities
resist taking stronger measures to clamp down on machine tool
exports. AIT believes that policy-level export control
meetings are needed to drive home the message that potential
damage to Taiwan's reputation far outweighs the benefits of
trade with North Korea. End comment.



7. (C) Action Request: Request front channel confirmation of
the proposal for export control talks on December 15-16,
information on topics to be discussed, and desired agency or
individual interlocutors. End action request.

PAAL