MTAG 03-03: GOG CONSIDERING REEXPORT OF MILLING

S E C R E T ATHENS 000459 SIPDIS STATE FOR NP/CBM/HARDIMAN, EUR/PRA, EUR/SE, EUR/SCE E.O. 12958: DECL: 02/15/2115 TAGS: PREL PARM MCAP ETTC MK GR SUBJECT: MTAG 03-03: GOG CONSIDERING REEXPORT OF MILLING MACHINE TO MACEDONIA REF: A. 04 STATE 106221 ¶B. 04 ATHENS 552 ¶C. 04 ATHENS 2150 Classified By: ECONCOUNS JSTEPANCHUK; REASONS 1.4 (B) (D) ¶1. (S) On February 9, Econcouns was summoned by the head of MoD's Wassenar Expert Group, Col. Ioannis Anastasakis, to discuss possible return of a Mikrosam CNC milling machine (reftels) to Macedonia. (Per reftels, the Greek company, Baksevanidis, acquired two milling machines from the Macedonian-based firm, Mikrosam, in 2004: one was purchased and is being held in Athens; the other - which Mikrosam sent free of charge - was intended for exhibit at a Thessaloniki trade fair). Anastasakis assured Econcouns that both machines are under surveillance by Greek Customs authorities, who have to date prohibited the physical transfer or reexport of the machines. ¶2. (S) Greek firm Baksevanidis is now applying to the GoG for a special license to reexport to Macedonia the machine that was intended for exhibit in Thessaloniki. Anastasakis pointed out that if Baksevanidis seeks legal recourse, it is possible that the Greek courts could order the return of the machine to Macedonia on the grounds that it is not contolled by the MTCR or included in EU Regulation 1334/2000. ¶3. (S) Anastasakis said that the MoD (as part of the GoG interagency export control process) had not decided on whether or not to recommend the return of the machine to Macedonia. He said that nothing would be done without consulting with the USG and that even if a reexport license were granted, Greek Customs would take charge of the machine and transfer it directly to the appropriate Macedonian authorities. ¶4. (S) Econcouns reiterated USG concern (per ref a) that while the machine in question is not on the MTCR list, it is well suited to manufacture small parts or components with missile-related end uses. Econcouns also recalled the well documented efforts of Mikrosam to divert such machines to third countries. (Anastasakis was well aware of Mikrosam's reputation.) The chief concern of the USG was to prevent the diversion of the milling machine to third countries, a likelihood that would be enhanced if it had ever returned to Mikrosam. ¶5. (S) We will continue our periodic consulting with Greek export control authorities on the disposition of the milling machines and appreciate any additional information the Department would have us convey to the GoG. RIES