CZECHS LICENSE A ONE-YEAR VERA SYSTEM LOAN TO

S E C R E T PRAGUE 001363

SIPDIS

NOFORN

EUR/NCE FOR FICHTE, PM/RSAT FOR BOCKLAGE

E.O. 12958: DECL: 09/01/2015
TAGS: ETTC EZ KSTC PARM PREL PK
SUBJECT: CZECHS LICENSE A ONE-YEAR VERA SYSTEM LOAN TO
PAKISTAN

REF: A. 04 PRAGUE 1235

B. 04 STATE 212634

C. 04 PRAGUE 1870

D. PRAGUE 106

E. PRAGUE 313

F. PRAGUE 892

G. PRAGUE 1104

H. PRAGUE 1146

I. PRAGUE 1252

J. 04 PRAGUE 523

Classified By: Political-Military Officer Brian Greaney
for reasons 1.4 (b) and (d)

1) (S) Czech News agency CTK late September 20 reported the
Ministry of Industry and Trade has licensed a lease of the
VERA passive surveillance system to Pakistan. This
information is slightly different from that previously
provided by GOCR sources, which maintained the proposed
transfer was a one-year loan, rather than a lease. According
to previous discussions with the MFA, the unit would have to
be returned to the Czech Republic, even if Pakistan decides
to purchase a system. A sale to Pakistan would require a new
license application. A history of the circumstances
surrounding this deal can be found in Refs A-I.

2) (S) While following up on the news story with the Ministry
of Industry and Trade, Post learned that the license was
quietly issued Sep 12th. The Ministry's head of licensing Sep
21st told us he was unhappy that the matter had become
public. Under the Czech export-control system, the issuance
of a license ends the Czech Governmental involvement in a
deal, unless there are some conditions added to the license
that require further government oversight. Examples of these
would be inspections or proof that nonproliferation measures
have been added to a system. The MFA had insisted that such
conditions be part of any issuance of a license to Pakistan.
Embassy Prague is seeking details of the final conditions
that were imposed.

3) (S) In 2004, when the GOCR approved a license for the
export of the VERA to China it took high level U.S.
intervention to convince then PM Spidla to intervene and
prevent the sale (REF J). That event was politically damaging
to Spidla, despite the GOCR's public statement that the
intervention was actually based on the EU's China arms
embargo. PM Paroubek, facing elections next year, is not
likely to be keen to block a Pakistan deal.
DODMAN