TAIWAN FIRM'S MACHINE TOOL EXPORTS TO PAKISTAN (S)

S E C R E T STATE 178573





E.O. 12958: DECL: 10/25/2016

TAGS: PARM, MTCRE, PREL, ETTC, TW, PK



SUBJECT: TAIWAN FIRM'S MACHINE TOOL EXPORTS TO PAKISTAN (S)



REF: A. 05 STATE 138267

B. 05 AIT TAIPEI 003573



Classified By: ISN/MTR DIRECTOR PAMELA K. DURHAM

REASONS 1.5 (B),(C) AND (D).



1. This is an Action Request. AIT Taipei, please see

paragraph 4.



2. (S) BACKGROUND: Since August 2005, the U.S. has worked

closely with Taiwan officials to implement the "Gameplan,"

which is designed to address longstanding problems with

Taiwan's export control system (Refs A and B). As part of

this effort, we have routinely alerted Taiwan authorities to

sales of machine tools by firms in Taiwan that pose potential

proliferation risks. We now want to provide Taiwan officials

with information regarding an export of controlled machine

tools from Taiwan to an entity that has had prior business

dealings with Pakistan's missile program. As in past cases

involving machine tool exports to Pakistan, we want to ask

Taiwan authorities to investigate this information with a

view to preventing unauthorized transfers of sensitive

technology from Taiwan and ensuring that companies in Taiwan

are fully complying with its export control regulations. END

BACKGROUND.



3. (S) Action Request: Request AIT Taipei approach

appropriate Taiwan officials to deliver talking points in

paragraph 4 and report response. Talking points also may be

provided as a non-paper.



4. (S) Begin talking points/non-paper:



(SECRET REL TAIWAN)



-- The United States appreciates your continuing efforts to

strengthen Taiwan's export control system by implementing the

U.S.-Taiwan "Gameplan."



-- As part of our close cooperation on the "Gameplan," we

would like to provide you with information regarding a

machine tool export by a firm in Taiwan to Pakistan and

request you investigate this activity.



-- Specifically, we understand that the Taiwan-based firm

Tong Tai Machine and Tool Ltd. finalized a contract to sell

four computer numerically controlled (CNC) milling machines

to Pakistan's M/S Speedy Tools. These machines were

scheduled to be shipped via air to Pakistan on September 30,

2006.



-- The contract between Tong Tai Machine and Tools and M/S

Speedy consisted of three model TMV-850 and one model

TMV-1600 milling machines.



-- If equipped with a rotary table, both of these milling

machines would be capable of performing 5-axis machining

operations, which would be suitable for producing a variety

of missile components. In addition, these types of modified

machines would be controlled by the Nuclear Suppliers Group

(NSG) and Wassenaar Arrangement.



-- We also are concerned that M/S Speedy may have had some

prior dealings with Pakistan's missile program.



-- M/S Speedy Tools is located at 212 Second Floor, Seema

Electronics Centre, Sadr, Karachi. This firm is closely

affiliated with another company, Pakistan's Vide M/S United

Tools.



-- As in past cases involving exports of Taiwan-origin

machine tools to Pakistan, we request that you investigate

this transaction to determine the intended end-use for these

machines, as well as verify the nature of the end-user.



-- We hope this information is useful in supporting your

export control efforts and will allow you to take measures to

ensure that Taiwan-origin machine tools are not being used in

unauthorized applications in Pakistan.



-- We look forward to continuing cooperation on export

control and nonproliferation issues and to hearing the

results of your inquiries into this matter.



End talking points/non-paper.



5. (U) Please slug any reporting on this issue for ISN and

EAP/TC.

RICE





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