1. (S) German MFA Export Control Division Desk Officer met
Global Affairs officer February 23 and passed the following
German-language nonpaper in response to ref B demarche
concerning the Taiwan firm Hartford's use of a false end-user
certificate to divert German-produced CNC controllers to the
Egyptian Air Force. According to Kauke, German export
control authorities investigated the case and, despite
finding no evidence that Heidenhain wittingly violated German
export control laws, notified it that it must apply for a
license in the future to export items to Hartford. Kauke
said Heidenhain agreed to do this.



2. (S) Begin unofficial embassy translation of
German-language nonpaper:

With reference to the nonpaper for German export control
authorities that you provided to us on November 6, 2006,
regarding the alleged falsification of end-user certificates
on the part of the Taiwan firm Hartford (She Hong), allow us
to bring the following information to the attention of the
U.S. authorities:

-- We thank you for the information concerning the export
from the firm Hartford to Egypt of a total of five milling
machines, for which the CNC controllers supposedly were
provided by the German firm Heidenhain. The export should
have been completed to the Arab Organization of
Industrialization/Aircraft Factory (Egypt) and was
coordinated by the Egyptian firm Goodway Technologies. The
actual end user could be the Egyptian Air Force, which would
contradict the Hartford-provided end-user certificates,
according to which the goods will not be used for military
purposes.

-- Preliminary investigations by the appropriate authorities
have indicated no discernible violations of German export
control regulations by the firm Heidenhain.

-- The firm Hartford She Hong Industrial Company, Ltd., a
producer of CNC vertical machines, is named as a beneficiary
of a blanket export approval for the export of different
types of CNC controllers from the firm Heidenhain to civilian
end users. This is the connection to the information in your
nonpaper.

-- Because of the suspicion of a violation against the
re-export condition included in the end-user certificate, the
firm Hartford in the meantime has been barred from using the
blanket export approval by the Federal Economic and Export
Licensing Agency (BAFA). The firm Heidenhain must apply for
specific export approval in every case to export to this end
user in the future.

We are pleased with our continuing outstanding cooperation in
the area of export controls.

End text of German-language nonpaper.
KOENIG