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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