MTAG: TAIWAN ENTITIES SUPPORTING PAKISTANI MISSILE PROGRAM; FOLLOW-UP ON TRANSFERS TO SYRIA (C)

S E C R E T STATE 026545


E.O. 12958: DECL: 02/20/2020
TAGS: ETTC PARM PREL MTCRE MNUC TW PK SY

SUBJECT: MTAG: TAIWAN ENTITIES SUPPORTING PAKISTANI MISSILE PROGRAM; FOLLOW-UP ON TRANSFERS TO SYRIA (C)
REF: A. 04 STATE 271561

B. 04 TAIPEI 2157

C. 04 TAIPEI 1576

D. 04 STATE 109219
Classified By: NP/CBM Office Director Vann Van Diepen for reasons 1.4 (b),(d),(h)


1. (U) This is an action request. AIT Taipei please see para 4.


2. (S) Background: We want to raise with Taiwan concerns about Pakistan-based machine tools procurement agent K.M. Enterprise acquiring computer numerically- controlled (CNC) machines from the Taiwan manufacturer She Hong Industrial Co. Ltd., which is also known as Hartford. First, the U.S. has information that, in November 2004, K.M. Enterprise was seeking to purchase one CNC vertical machining center from Hartford. K.M. Enterprise was procuring this machine on behalf of Pakistan's M/S Integrated Engineering Systems (IES). IES has previously supplied goods to Pakistan's National Development Complex (NDC),which is the organization responsible for developing Pakistan's Shaheen series of ballistic missiles. Second, in December 2004, K.M. Enterprise purchased a model Pro-1000SP vertical CNC machining center from Hartford for Pakistan's Pak Precision Engineering Pvt. Ltd. Third, in November 2004, K.M. Enterprise also approached Hartford concerning the purchase of two CNC vertical machining centers for the Pakistani government-controlled machine tool manufacturer Pakistan Machine Tool Factory Pvt.


3. (S) In light of K.M. Enterprise's likely role as a procurement cover for missile development organizations in Pakistan, we believe that any sale of machine tools to K.M. Enterprise could potentially be intended for missile- related end-users in Pakistan. We want to urge Taiwan officials to use this information to investigate these sales and other activities by Hartford, and employ all available measures, including catch-all controls, to ensure that Taiwan entities do not become a source of supply to missile programs in Pakistan or elsewhere.
We also want to ask Taiwan officials for updates on two previously raised cases (Refs A, D) regarding transfers to Syria to which we have received no final reply.
End background.


4. (U) Action request: Department requests AIT Taipei approach appropriate Taiwan authorities to deliver talking points in para 5 and report response. Points may also be left as a non-paper.


5. (S/Rel Taiwan) BEGIN TALKING POINTS/NON-PAPER:

--We would like to alert you to three instances of Pakistan-based machine tools procurement agent K.M. Enterprise seeking computer numerically-controlled (CNC) machining centers for Pakistan's missile program from the Taiwan manufacturer She Hong Industrial Co. Ltd., which is also known as Hartford, and request your assistance in investigating these activities.

--First, the U.S. has information that, in late November 2004, K.M. Enterprise was seeking to purchase one CNC vertical machining center from Hartford. We believe that K.M. Enterprise was procuring this machine on behalf of Pakistan's M/S Integrated Engineering Systems (IES).
(subtic) --IES has previously supplied goods to Pakistan's National Development Complex (NDC),which is the organization responsible for developing Pakistan's Shaheen series of ballistic missiles.
(subtic) --NDC is an entity of significant proliferation concern which has been previously subject to sanctions under U.S. law.

--Second, in December 2004, K.M. Enterprise purchased a model Pro-1000SP vertical CNC machining center from Hartford for Pakistan's Pak Precision Engineering Pvt.
Ltd. This machine was scheduled to be shipped to Pakistan in early February 2005.

--Third, in November 2004, K.M. Enterprise also approached Hartford concerning the purchase of two CNC vertical machining centers for the Pakistani government-controlled machine tool manufacturer Pakistan Machine Tool Factory Pvt.

--In light of K.M. Enterprise's likely role as a procurement cover for missile development organizations in Pakistan, we believe that any sale of machine tools to K.M. Enterprise could potentially be intended for missile-related end-users in Pakistan.

--We urge you to use this information to investigate these sales and other activities by Hartford, and employ all available measures, including catch-all controls, to ensure that Taiwan entities do not become a source of supply to missile programs in Pakistan or elsewhere.

--On many past occasions, we have raised with you our concerns regarding exports of machine tools and other dual-use equipment by firms in Taiwan. In several of these cases we have not yet heard back from you on the final results of your investigations.

--Most recently, in December 2004 we shared with you details of Syria's procurement of CNC machine tools from Taiwan. In September 2004, the Syrian entity TDC Kaddour and Madani Co. ordered one four-axis vertical machining center from Hartford. Also in September 2004, Syrian Sinan CNC Machine Tools ordered two vertical machining centers from Taiwan's Eumatech Corp.

--In May 2004, we shared with you information about Syrian firms seeking a CNC milling machine, CNC vertical machining center, and electrical discharge machining (EDM) systems from Taiwan's Long Chang Machinery Company, Ltd., and Ching Hung Machinery and Electric Industrial Company, Ltd.

--You confirmed that Long Chang Machinery Company and Ching Hung Machinery and Electric Industrial Company had each exported two shipments of machine tools to Syria in 2003, and added that the BOFT's investigation was still ongoing.

--We look forward to continuing cooperation on missile nonproliferation issues and would appreciate hearing the results of your inquiries in all the cases raised today.
END TALKING POINTS/NON-PAPER


6. (U) Please begin your response with MTAG in the subject line and slug any reporting on this or other missile nonproliferation issues for NP/CBM and EAP.
RICE