MTAG: TAIWAN GAMEPLAN REVIEW

S E C R E T SECTION 01 OF 02 TAIPEI 003477

SIPDIS

SIPDIS

STATE FOR EAP/TC AND ISN/MTR

E.O. 12958: DECL: 10/12/2026
TAGS: ETTC UNSCR TW NKWG
SUBJECT: MTAG: TAIWAN GAMEPLAN REVIEW

REF: BREMNER-NEELY EMAIL 10/06/2006

Classified By: AIT Deputy Director Robert Chang, REASONS 1.4 B/C


1. (S) Taiwan has made significant export control gameplan
progress in recent weeks. This cable summarizes recent
gameplan developments and responds to Ref A questions.

Definitions of Taiwan's SCL and SHTC
--------------


2. (S) Taiwan defines Sensitive High-Tech Commodities (SHTC)
as including 1) items on the controlled lists provided by
export control regimes such as the Wassenaar Arrangement,
Australia Group, Nuclear Suppliers' Group and the Missile
Technology Control Regime; 2) items not included on the
controlled lists, but whose end use is linked to the
development of nuclear, biological and chemical weapons and
delivery systems; and 3) re-export of items imported with
written assurances issued by Taiwan authorities. Taiwan
requires all SHTC items to have a license to be exported to
any destination. At the August 2005 negotiations, Taiwan
agreed to also require export licenses for additional
"sensitive commodities" bound for North Korea and Iran, and
that U.S. agencies would be allowed to review all
applications for export licenses for items bound for North
Korea or Iran. Taiwan considers items on this Sensitive
Commodities List (SCL) to be an additional category of SHTC
items only for direct or indirect exports to North Korea and
Iran.

Progress Made this Year
--------------


3. (S) In January 2006, Taiwan implemented the requirement
that all SHTC items exported to North Korea and Iran must
have export licenses reviewed by U.S. agencies. On June 1,
Taiwan added 87 SCL items to its SHTC needing export licenses
for export to Iran or North Korea. On September 15, in
support of UNSCR 1695, Taiwan further expanded its SCL to
include all the 433 items recommended by U.S. agencies, and
clarified that all SHTC/SCL items bound for North Korea or
Iran must be listed on the ship's manifest and obtain
official permission to transit Taiwan ports. At the same
time, Taiwan added new restrictions on travel and financial
dealings with Iran and North Korea. On September 28, Taiwan
agreed to AIT procedures for sharing information on North
Korean and Iranian visa applicants.

Export License Review System Working
--------------


4. (S) Since January 2006, Taiwan has sent to U.S. agencies
via AIT about 60 export licenses applications related to
exports of SHTC/SCL items to Iran and North Korea. Taiwan
denied licenses in four cases, companies withdrew the
application on learning of the proliferation risks in six
cases, and two cases were withdrawn because of the lengthy
application process.

Transit/Transshipment Reviews Face Technical Issues
-------------- --------------


5. (S) On September 15, Taiwan authorities issued a public
notice informing shippers of the new transit/transshipment
license requirement; however, full implementation of this
gameplan requirement has been delayed pending resolution of
technical details related to the time needed to review the
license applications and the methods used by shipping agents.

Investigations Stemming from Gameplan
--------------


6. (S) Since January 2006, the Taiwan Bureau of Foreign
Trade (BOFT) has provided the Ministry of Justice (MOJ) with
information on about 20 cases of suspected export control
violations for investigation. These cases involve at least
five different companies, including multiple cases involving

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Ching Hwee and She Hong. Three of the 20 cases have been
found to involve clear violations of export control
regulations and have been turned over to local prosecutors
for prosecution. Several of these 20 cases were detected as
a result of tighter Customs inspections of goods bound for
North Korea and Iran. Customs noticed that the items lacked
export licenses, stopped the shipments, and notified BOFT.
BOFT has described this as a significant step forward in
interagency cooperation, but has also noted that MOJ needs
instruction on how to carry out its export control
investigations.

Next Steps
--------------


7. (S) The planned November 13-17 consultations are
important to demonstrate our continued concern about full
implementation of the gameplan. There have been no
AIT-Taiwan interagency talks on export control since August

2005. At these upcoming consultations, Taiwan plans to
present a report on progress and problems on the
transshipment/transit issue. Taiwan is waiting for a
response to its proposals on hosting EXBS regional training
sessions. AIT is hoping for clarification of issues related
to assigning an EXBS advisor here on a permanent services
contract. AIT and Taiwan are hoping for clarification on how
U.S. agencies can assist Taiwan in identifying high-risk
shippers/exporters/importers whose cargoes transit Taiwan,
and in training Taiwan MOJ investigators.


8. (S) From Taiwan's point of view, one major issue still
handicapping Taiwan efforts to punish violators is the lack
of cooperation from foreign and international agencies. For
instance, Taiwan authorities have collected substantial
evidence in a case where a Taiwan company illegally
re-exported a Japan-made bio-drying cabinet to North Korea.
However, this type of cabinet is not made in Taiwan, and
Japan law enforcement agencies have so far refused to provide
technical specifications on the cabinet that are needed in
developing the prosecutor's case.


9. (S) Although not gameplan related, Taiwan authorities
have repeatedly raised the issue of the rapid growth in the
number of lost/stolen Taiwan passports. There are
indications that ROC passports are becoming the travel
document of choice among globe-trotting criminals. Yet,
Taiwan is excluded from the ongoing APEC project to share
information on lost/stolen passports. This information could
be provided to Taiwan on CD in return for the information
Taiwan provides on North Korea/Iran visas. On October 5,
more than 500 Taiwan passports were stolen from a local
travel agency.
YOUNG