GERMAN QUERY ON PRC UNIVERSITY SEEKING FILAMENT

S E C R E T BERLIN 003566 SIPDIS SIPDIS STATE FOR ISN, EUR/AGS AND EAP/CM E.O. 12958: DECL: 12/21/2016 TAGS: ETTC MNUC MTCRE TNGD PARM PREL PINR GM CH SUBJECT: GERMAN QUERY ON PRC UNIVERSITY SEEKING FILAMENT WINDING MACHINE Classified By: Global Affairs Chief Donald R. Shemanski, for reasons 1. 4 (b) and (d) ¶1. (U) This message contains a request for guidance -- please see paragraph four. ¶2. (S) Global Affairs officer met German MFA Export Control Division Desk Officer Andreas Kauke December 21. Kauke passed a nonpaper concerning an export license application currently undergoing review by the German federal inter-agency export control group. The application is for the export of a filament winding machine to the Inner Mongolia University of Technology (IMUT),located in Hohhot, China. Kauke said that although the German Government has no derogatory information on IMUT or the intermediate consignees involved, it is aware of USG concerns over exports of these machines to China and would like USG input on whether to grant or deny the license. The German Government would have grounds to deny the license, because filament winding machines are controlled by both the Nuclear Supplier Group (NSG) and the Missile Technology Control Regime (MTCR). Because the German Government is under some pressure to decide on the application, it requests a USG response by January 9, 2007. ¶3. (S) Begin unofficial embassy translation of German-language nonpaper: We would like to bring the following information to the attention of U.S. authorities: -- The German export control authorities are currently examining an application for granting the export of a CNC filament winding machine, which is to be exported to the Inner Mongolia University of Technology (IMUT),in Hohhot, China. The machine is capable of producing components of varying geometries, such as tubes and containers, but it is also suitable for the production of rocket components and rotors for gas centrifuges. The machine is listed on NSG and MTCR annexes as a so-called key element in both regimes. -- The filament winding machine is to be used for the research and development of high-pressure pipelines for natural gas and of corresponding hydraulic accumulators. -- The purchaser of the good supposedly is the Dalian LiHua Economic and Trade Company, Ltd. It is supposedly a subsidiary of L.F. Enterprises Development Company in Hong Kong. Since this firm, L.F., is located in Hong Kong, it is not allowed any contracts with Chinese enterprises for the import of barred goods and accordingly must use its 100 percent-owned subsidiary, the Dalian LiHua Economic and Trade Company, Ltd., China. In addition, the firm L.F. owns two other subsidiary firms in China: L.F. International Trading (Shenzhen) Company, Ltd., and Hainan Liyuan Trading Company, Ltd. -- The German authorities have no negative information about any of these enterprises. -- In view of the risk of diversion of the machine (a key element) we would be grateful to the U.S. authorities for an examination and sharing of information if they have any derogatory proliferation-relevant information about the firms. We are pleased with our continuing outstanding cooperation End text of German-language nonpaper. ¶4. (U) Post requests guidance on responding to the German request by January 9, 2007. KOENIG