NORINCO VP EAGERLY ACCEPTS MEETING PROPOSAL

S E C R E T BEIJING 006640 DEPARTMENT FOR ISN AND EAP E.O. 12958: DECL: 10/12/2023 TAGS: PREL CH ETTC PARM SUBJECT: NORINCO VP EAGERLY ACCEPTS MEETING PROPOSAL REF: A. STATE 142523 ¶B. PICCUTA-HE 26 SEPTEMBER LETTER Classified By: Political Minister Counselor Aubrey Carlson. Reasons 1.4 (B) and (D). ¶1. (S) Summary. China North Industries Corporation (NORINCO) Vice President He Xiaodong eagerly accepted reftel invitation to meet in Washington the week of 29 October - 2 November. VP He understands the meeting is only for NORINCO executives and not for outside consultants. VP He stated that as proof of NORINCO's commitment to effective export controls, NORINCO has had no conventional arms business with Iran since March 2007 and has recently refused arms contracts with both Syria and Pakistan. Claiming the Government of Iraq owes NORINCO 4.75 billion USD and still has several outstanding oil contracts with NORINCO, VP He noted several times his interest in doing more business in Iraq. VP He claims NORINCO's new business plan and Internal Compliance Program (ICP) embrace "both the letter and the spirit of law." End Summary. NORINCO VP EAGERLY ACCEPTS INVITATION -------------- ¶2. (S) Poloff presented reftel invitation to He Xiaodong, Vice President of NORINCO, to meet with USG officials in Washington, DC, during the week of October 29 - November 2. Poloff outlined that, among other issues, USG would like to talk about NORINCO's business model and strategic plan, ICP process, the nature of existing business with Iran and other countries of concern, and efforts taken in response to UNSCRs. Poloff stressed that the meeting is only for Senior NORINCO executives and not for outside consultants. ¶3. (S) VP He immediately and eagerly accepted the meeting invitation. Noting his travel plans were initially set to leave the United States on October 28, he agreed to move his departure to the following week to make time for the meeting. He produced an undated letter addressed to Poloff requesting such a meeting. (Note: Poloff sent a scan copy of that letter on the unclassified email system to reftel paragraph 9 POCs.) NORINCO REFUSES CONTRACTS IN IRAN, SYRIA, PAKISTAN -------------- -------------- ¶4. (S) VP He noted that NORINCO has had no conventional exports to Iran and has had no contact with Iranian defense customers since March 2007. Poloff asked for clarification of what "conventional exports" means. VP He clarified that NORINCO continues to execute a contract for subway construction in Iran and has no plans to abandon that project. He also said NORINCO refused a Syrian request for an order for a "large number" of rockets in May 2007, as well as a Pakistani request for an order of pistols. He said NORINCO refused the order by the Pakistani entity because NORINCO was "not sure of the end-user." CLAIMS IRAQ OWES NORINCO 4.75 BILLION USD -------------- ¶5. (S) VP He claims that the Government of Iraq owes NORINCO 4.75 billion USD from business completed prior to the Iraq war. He says NORINCO is beginning to pursue a "Paris Club rules" agreement to relieve eight percent of this debt, yet still seeks some sort of arrangement for payment of the remainder. He also said NORINCO has several pre-war oil field contracts with Iraq and is "open" to U.S. cooperation in pursuing these contracts. Poloff asked if NORINCO had any part of the 100 million USD contract recently reported in the press for equipment and arms for the Iraqi police. He said NORINCO did not have any part of that contract and does not know which Chinese company or companies do. PROMISES NORINCO FINALLY UNDERSTANDS EXPORT CONTROLS -------------- -------------- ¶6. (S) VP He offered an unprompted review of NORINCO's new policies regarding export controls. He said NORINCO "understands now" what export controls and ICP mean, and claims that NORINCO's policies embrace "not just the letter of the law, but also the spirit." He said NORINCO's export practices are in keeping with all international laws and regimes and Chinese law, and would like to also follow all U.S. laws, specifically saying he would like to get a copy of General Electric's data base of sensitive entities to link to NORINCO's ICP. ¶7. (S) VP He noted that he is looking forward to meeting with Embassy officials in November to follow up on his Washington, DC, discussions (ref B). He will be carrying his PRC cell phone while traveling in the United States, ¶13901103382. Piccuta NNNN End Cable Text