SERBIA: MISSILE DESTRUCTION STALLS SHORT OF GOAL

1. (U) This is a time sensitive action request. Please see para 8.




2. (U) In.2005, the United States and Serbia and Montenegro signed
an agreement for the destruction of 5,000 MANPADSs by the end of


2007. As of October 31, 2007 Serbia had destroyed nearly 4,000 of
those weapons and intended to have destroyed 4,280 by early December


2007. Ministry of Defense officials informed Post that the
government of Serbia can not destroy the 720 weapons that would
satisfy the terms of the agreement, because those missiles are in
Montenegro, under the control of the government of Montenegro. The
MOD also expressed interest in selling MANPADS on the open market
where the government believes it could realize a better price than
it would destroying the missiles. Post outlined to the MOD and the
MFA the Department's concerns about Serbia's possible failure to
fulfill the terms of the agreement. We request instructions and
talking points to use in our follow up discussions at more senior
levels. End Summary.

The 2005 MANPADs Agreement


--------------------------





3. (SBU) In.2005, the United States and Serbia and Montenegro
signed an agreement in which SaM agreed to destroy 5,000 MANPADSs by
the end of 2007. In return, the United States would pay $2 million
for the destruction of the missiles, $400/missile. The Government
of Serbia contracted with a local company, Krusik Valjevo, to
destroy the missiles. Beyond the scope of the agreement, the GOS is
forgiving the Krusik Valjevo company's debt to the government.

Partial Progress


--------------------------




4. (SBU) Prior to August 2007, Krusik Valjevo had received and
destroyed from the MOD 2,640 missiles. In September 2007, Krusik
Valjevo received an additional 1,640 missiles for destruction. On
October 31, Krusik Valjevo General Manager Jovan Davidovic told
emboffs that all those missiles in the company's possession would be
destroyed by the first week of December. Thus, by the first week of
December Krusik Valjevo will have destroyed 4,280 missiles, 720
missiles short of the agreed total.

Falling Short of Agreed Goals


--------------------------





5. (SBU) The MOD advised DAO officers on September 27 and October
17 that the ministry was unable to send the remaining 720 missiles
for destruction. Assistant Minister for Defense Pilipovic said that
the 720 additional missiles were located in Montenegro, where they
had been since the dissolution of the State Union in June 2006.
Pilipovic said that the MOD had asked Montenegro in August 2006 to
return those missiles for destruction, but that the GOM had not
complied. Pilipovic also informed USDAO officers that the MOD was
interested in selling MANPADs on the open arms market, where it
could fetch a higher price.

Embassy's Rebuttal


--------------------------





6. (SBU) In follow up meetings, emboffs argued to GOS officials
that, as the successor state of the State Union, Serbia had the
responsibility to uphold all agreements it signed as the State
Union. USDAO officers advised Pilopovic of these obligations on
October 17. DATT also informed Pilipovic that, since the 2005
agreement never specified precisely which missiles needed to be
destroyed, Serbia could destroy any 720 missiles remaining in its
stockpiles, estimated at 5,000. On October 30, poloff informed the
MFA's North American Division Chief Srdjan Miljkovic of the
possibility that Serbia might fail to meet its commitment, as
outlined in the 2005 agreement. Miljkovic said he would look into
the issue and coordinate within the MFA.

Comment


--------------------------





7. (SBU) The 2005 signing of the MANPADS agreement was an important
step in post's engagement with the Ministry of Defense. Today,
military cooperation is one of the bright spots in the bilateral
relationship. With Washington's guidance, post will work to
encourage Serbia to successfully fulfill the terms of the agreement.
Post wants to resolve this before Bilateral Defense Consultations
are held in Washington on December 17/18.



8. (SBU) Post requests Washington's guidance on the language to use
regarding Serbia's commitments to uphold its bilateral agreements as
the successor state to the State Union of Serbia and Montenegro.

End Comment.

MUNTER