Identifier
Created
Classification
Origin
06STATE106928
2006-06-28 16:19:00
SECRET//NOFORN
Secretary of State
Cable title:  

RESPONSE TO CHINA ON E.O. 13382 DESIGNATIONS; NEW

Tags:  PARM PREL ETTC EFIN PGOV CH 
pdf how-to read a cable
O R 281619Z JUN 06
FM SECSTATE WASHDC
TO AMEMBASSY BEIJING IMMEDIATE
INFO AMCONSUL HONG KONG
AIT TAIPEI 0000
AMCONSUL SHANGHAI
AMCONSUL CHENGDU
AMCONSUL SHENYANG
AMCONSUL GUANGZHOU
S E C R E T STATE 106928 

SIPDIS


NOFORN

E.O. 12958: DECL: 06/26/16
TAGS: PARM PREL ETTC EFIN PGOV CH

SUBJECT: RESPONSE TO CHINA ON E.O. 13382 DESIGNATIONS; NEW
INFORMATION ON CPMIEC

REFS: A. BEIJING 12181

B. STATE 95206

CLASSIFIED BY EAP/CM DIRECTOR ROBERT GOLDBERG FOR REASONS
1.4 (B) AND (D).

S E C R E T STATE 106928

SIPDIS


NOFORN

E.O. 12958: DECL: 06/26/16
TAGS: PARM PREL ETTC EFIN PGOV CH

SUBJECT: RESPONSE TO CHINA ON E.O. 13382 DESIGNATIONS; NEW
INFORMATION ON CPMIEC

REFS: A. BEIJING 12181

B. STATE 95206

CLASSIFIED BY EAP/CM DIRECTOR ROBERT GOLDBERG FOR REASONS
1.4 (B) AND (D).


1. (U) This is an action request. Embassy Beijing,
please see paragraph 2.


2. (S/NF) Action Request: Request Post deliver to
appropriate host government officials the points in
paragraph 3 responding to China's reactions (ref A) to
Executive Order 13382 designations (ref B) and informing
China of new proliferation activities of one of the
designated entities - China National Precision Machinery
Import-Export Corporation (CPMIEC). Points may be left as
a non-paper. Post should draw from points in paragraph 4
as needed. Also request that Post share paragraph 5 non-
paper containing procedures for removing entities from the
List of Specially Designated Nationals and Blocked Persons
(SDN List). Post should make clear to host government
that administrative action to remove persons from the SDN
List is initiated by the blocked person directly with the
Department of the Treasury's Office of Foreign Assets
Control (OFAC).


3. (S/Rel China)

Begin Talking Points/Non-paper for China.

-- When informed of the USG decision to designate four
Chinese entities under Executive Order (E.O.) 13382, China
responded that it would take immediate action in response
to any new proliferation activities by these firms. We
appreciate China's commitment to act expeditiously on
these cases.

-- In this context, we would like to make you aware of
recent troubling information we have acquired regarding
the activities of one of the Chinese entities designated
pursuant to E.O. 13382 - China National Precision
Machinery Import-Export Corporation (CPMIEC).

-- Specifically, we understand that, in late May 2006,
CPMIEC was working to finalize arrangements to ship a
variety of missile-related goods to Iran's Mehr
Engineering and Industrial Group.

-- Mehr Engineering is associated with the Shahid Bakeri

Industrial Group (SBIG),which is responsible for
developing Iran's solid-fuelled ballistic missiles and was
designated under E.O. 13382 in June 2005.

-- Our information indicates that Mehr Engineering was
trying to facilitate the shipment of 54 SNJ-1
accelerometers. We understand that arrangements were made
so that these items would be shipped to Iran no later than
July 12, 2006.

-- The SNJ-1 accelerometers sought by SBIG are controlled
by the Missile Technology Control Regime (MTCR) and can be
used in the guidance of Iran's Shahab and Fateh-110
missiles, and possibly its Ashura medium-range ballistic
missile (MRBM) system.

-- In addition, during the same time frame, Mehr
Engineering requested CPMIEC provide a rate turn table.

-- Rate turn tables can be used to calibrate and align
missile guidance, navigation and control sytems. Some
types of rate tables are controlled under the MTCR Annex.

-- Mehr Engineering also planned a June 2006 visit of a
CPMIEC delegation to Iran. This delegation may include
CPMIEC manager Cai Xiaomei, who has been actively involved
in CPMIEC's projects in Iran.

-- You will recall that in August 2005, we shared with you
information indicating that Cai Xiaomei was intending to
hand-carry MTCR-controlled, DT-2B gyroscopes to Iran in an
effort to evade Chinese export control regulations.

-- In view of the significant proliferation concerns
raised by this activity, we request that you investigate
this information and take steps to stop CPMIEC's continued
assistance to Iran.

-- We would also be interested in knowing what enforcement
actions China is taking to target such high-risk exports
and technology transfers.

-- While the United States is committed to sharing as much
information as possible with China, China needs to take
rigorous steps on its own to proactively look for and
prevent potential violations.

-- By intensifying its efforts to further augment its
export enforcement, the Chinese Government can play a
productive role in changing the behavior of proliferating
entities.

-- Tangible evidence of sustained, modified behavior by
designated entities can serve as a baseline for the USG's
consideration of removing Chinese entities from the
Department of the Treasury Office of Foreign Assets
Control's (OFAC's) List of Specially Designated Nationals
and Blocked Persons (SDN List).

-- Removal from the SDN List requires an administrative
process that the designated entity itself must initiate
directly with OFAC. I will leave you a non-paper
detailing this process.

-- In addition to the actions taken by the entities
themselves, the USG will factor in any information you
share regarding concrete enforcement actions taken to
permanently stop the activities of these serial
proliferators.

-- We remain committed to working with you on ways to
compel proliferating entities to alter their conduct and
cooperate with both our governments in order to prevent
the necessity of future designations.

End Talking Points/Non-paper for China.


4. (S/Rel China)

If raised: U.S. said it would make no designations until
the end of 2006; China has already shared details of new
export enforcement actions

-- As Acting Assistant Secretary Frank Record reminded the
Chinese delegation on June 7 during bilateral meetings in
Washington, we originally informed China that we wished to
see by the end of November 2005 decisive, effective
Chinese Government action to stop serial proliferation by
the ten Chinese entities that have been the subject of
E.O. 13382 consultations.

-- Acting Assistant Secretary Record indicated that we
were now long past that time, but that we would take into
account any information China provided on the ten entities
and be back in touch with China within the next week.

-- While we welcome the updates China provided on June 7
about enforcement actions, and encourage such further
actions as evidence of China's progress in the area of
export controls, China did not sufficiently address our
concerns about the ten entities.

End "if raised" points.


5. (U) Begin non-paper containing procedures for removal
from SDN List.

-- In response to your request for information regarding
removal of an entity or individual from OFAC's List of
Specially Designated Nationals & Blocked Persons, the
relevant procedures are found in the U.S. Code of Federal
Regulations, Title 31, Chapter V, Part 501.807:

-- These procedures indicate that the blocked person may
submit, in writing, arguments or evidence it believes
establishes that there is an insufficient basis for the
designation.

-- The person may also recommend remedial steps it may
take that it believes would negate the basis on which the
designation was made.

-- All such submissions must be made in writing to the
Director of Treasury's Office of Foreign Assets Control
(OFAC). OFAC reviews such submissions and will provide a
written decision to the blocked person. During the course
of its review, OFAC may request additional information
from the blocked person.

-- This process is conducted directly between the blocked
person and OFAC. There are no requirements for meetings,
although the blocked person may request one; however, OFAC
may, at its discretion, decline to conduct such a meeting
prior to concluding its review.

-- The United States hopes this information is helpful and
is willing to provide further clarification as requested.


End non-paper.
RICE


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