1. (U) This is an action request -- please see paragraph 4.



2. (C/REL FRA, GBR, GER, JPN) German Export Control Division
Desk Officer Ina Schuett passed the following
English-language discussion paper concerning Missile
Technology Control Regime (MTCR) denial notifications to
Global Affairs officer and counterparts from the French,
British, and Japanese Embassies February 9. Schuett said
Germany plans to distribute the Discussion Paper on Denial
Notifications and Related Procedures as a Best Practices
Guide to other MTCR partners before the April Reinforced
Point of Contact (RPOC) meeting in Paris. In advance of
that, however, Schuett said the German Government would like
comments on the paper by March 2 from the United States,
France, Japan, and the UK. Germany would revise the paper
based on their comments before distributing it to the other
MTCR partners.



3. (C/REL FRA, GBR, GER, JPN) Begin text of German Discussion
Paper and Annex:

Missile Technology Control Regime

Discussion Paper
Denial Notification and Related Procedures


In 2006, MTCR Partners exchanged their views on how to
improve the denial notification system and related procedures
via a survey conducted by Germany. A summary of the
responses to the survey was presented at the Copenhagen
Plenary 2006 (POC 232/2006). Partners agreed to further
explore the matter at the RPOC 2007 on the basis of a
discussion paper with proposals for improvement of denial
notification.



1. This paper proposes to agree on basic and additional
elements for denial notification and use of denial
information (see ANNEX I). These elements derive from
experiences in exchanging such information by Partners and
from preferences expressed by Partners in the "Survey on
Denial Notification and Related Procedures".



2. The MTCR Aide Memoire provides that Partners will review
the basis for their denials three years after the
distribution of a denial notification and advise the other
subscribing Governments of its conclusions. To facilitate
the management of the periodical denial review for Partners
and the POC alike, Germany proposes to further improve the
current MTCR denial database.

A further version of the ePOC notification database could
allow Partners to renew/revoke notifications online. Revoked
denials would be moved for information purposes to a separate
database for revoked denials for a limited period of five
years. The date of the latest renewal/the date of revocation
would appear in the databases together with the notification
concerned.

This way, Partners could search the data base for those of
their denials that are due for review. The POC would no
longer need to update the denial databases on a manual basis.


ANNEX I

MTCR

Best Practices for Sharing and Using Denial Information


MTCR Partners, having affirmed that they apply strict
national export controls in accordance with the MTCR
Guidelines, agree on the importance of the timely exchange of
information on denial of export authorisations.

The following practices derive from experiences in exchanging
such information by Partners and from preferences expressed
by Partners in the "Survey on Denial Notification and Related
Procedures". The Best Practices are intended to strengthen
the denial notification process by summarizing the sense of
the Partners as to appropriate ways to share and use denial
information. They are consistent with the MTCR Guidelines
and all relevant MTCR consensus decisions. This document
confers no greater obligations upon Partners than they have
assumed under the MTCR Guidelines.

The practices recommended for notifications of denial of
authorizations of transfers and for information notifications
are identical, except as they relate to the "no-undercut" and
consultation policies related to denials of transfers of
listed items, as set out in the MTCR Aide Memoire.


BASIC ELEMENTS

In sharing and using denial information Partners take into
account the following list of basic elements:

Decision on Transfers


1. Partners should advise the Point of Contact of a denial in
response to a formal inquiry or a request for export license
within four weeks, or as soon thereafter as practicable.



2. While denials are subject to appeal in many Partner
states, Partners should, for the sake of early detection of
procurement efforts, and where national legislation permits,
provide a denial notification irrespective of whether an
appeal is pending or anticipated. Information to the effect
that an appeal is pending or anticipated may be included in
the notification, and the absence of a subsequent
communication or revocation will be construed as indicating
that the denial was upheld.

Content of Denial Notification


3. In order to maximize the utility of notifications to
recipients, and in an effort to accumulate information that
could suggest patterns of procurement behaviour, Partners are
encouraged to provide as much detail relating to reasons for
denial as feasible. Such information is particularly useful
in catch-all denials to understand and act properly on them.

Consultation Procedure


4. Consultations between Participating Governments on an
export application, when a notification of denial of export
for an essentially identical transfer is in effect, should
take place in a timely manner. Unless otherwise agreed
between the Partners concerned, the Government which provided
the notification should respond with substantive information
within a period of four weeks of consultations having been
initiated. In the event that information is not forthcoming
within this period, the consultation process may be regarded
by the Government considering the export as complete.



5. Verification whether a notification of denial of export
for an essentially identical transfer is in effect should
take place on a case by case basis in the context of national
discretion. As a rule, the term "essentially identical
transfer" should be considered in comparison to the transfer
denied, as one that comprises cases that concern an item with
the same specifications and performance which is destined for
the same consignee.

Complementary Information


6. It is affirmed that catch all-denials can significantly
contribute to an understanding of procurement behaviour and
programs of concern. Partners are encouraged to share such
information to the greatest extent possible.

Use of Information for Industry Awareness


7. Partners are encouraged to make appropriate use of the
information in the MTCR denial databases to improve the
understanding by exporters of emerging proliferation trends.
Such information on potentially sensitive items and
destinations will be configured in accordance with the need
to preserve the confidential nature of notifications.


ADDITIONAL ELEMENTS
In sharing and using denial information, Partners may
additionally take into account the following elements:

Voluntary Consultation


1. Partners may consult one another before granting a license
for a transfer of an Annex item that is similar to one denied
in pursuit of the objectives of the Guidelines, and destined
for the same consignee.



2. Partners may consult one another before authorizing an
export of a non-listed item that is identical or similar to
those indicated in an information notification, and destined
for the same consignee.
Evaluation of Denials in the Licensing Process


3. In the evaluation of transfer applications for an Annex
item, Partners may take into account, as appropriate, denials
that do not concern an essentially identical transfer. This
may be useful in cases where the item of the transfer
application can technically be used for sensitive
MTCR-related activities that were the reason for denial in
question.

End Text of German Discussion Paper and Annex.



4. (C/REL FRA, GBR, GER, JPN) Post requests USG comments on
the Discussion Paper by March 2, as requested by the German
Government.
TIMKEN JR