Classified By: AIT Director Douglas H. Paal, Reason 1.5 b/d
1. (C) On June 20, AIT/T Economic Section Chief met with Bureau of Foreign Trade (BOFT) Chief Secretary Peter Ho to discuss the disposal of 39,500 kg of phosphorus pentasulfide (P2S5) seized by Taiwan authorities in August
2003. AIT/T had delivered information on how to destroy the chemical to BOFT on June 13. Ho requested another meeting to inform AIT/T that the Italian manufacturer of the chemical, Italmatch Chemicals, had agreed to accept the return of the P2S5. Ho reported that Taiwan officials had reached this understanding with the firm the previous week, after the firm had a chance to review photos of the chemical drums to confirm that they had been stored properly. According to Huang, the Italian firm has agreed to accept the P2S5 free of charge if Taiwan pays for shipping costs (c&f). Italmatch will pay to insure shipment. BOFT finds the terms acceptable and plans to proceed with returning the chemicals. The Director General of BOFT has approved the plan and is waiting for the Minister of Economic Affairs to give final approval.
2. (C) Economic Section Chief told Ho that the United States found this solution to be perfectly acceptable. Economic Section Chief also noted that the United States would want to be able to verify the return to the manufacturing company and asked that BOFT keep AIT/T fully informed of the plans to ship the chemicals. He asked specifically that BOFT notify AIT/T of the shipping company to be used, the name of the actual ship, its route and schedule. Ho replied that Taiwan would be willing to share all information regarding the shipment with the United States. He expects to have more detailed plans after BOFT has more information from Italmatch later in the week.
3. (C) Economic Section Chief noted to Ho that this marked a change from what BOFT had told AIT/T earlier about the possibility of returning the P2S5 to the manufacturer. Taiwan had previously indicated that the firm was unwilling to accept return of the chemical. Ho agreed but did not offer an explanation. BOFT Export Control Working Group Chief Wally Su later told AIT/T that Taiwan's representative office in Rome had failed to accurately communicate Taiwan's request to Italmatch. After BOFT contacted the firm directly and thoroughly explained the situation, Italmatch was quite willing to accept return of the chemical. PAAL