UKRAINE: APPEAL FOR USG FORBEARANCE ON INDIA SPACE

C O N F I D E N T I A L SECTION 01 OF 03 KYIV 002245

SIPDIS

SIPDIS

DEPT ALSO FOR SCA/INS, EUR/UMB, EUR/PRA, AND ISN/MTR

E.O. 12958: DECL: 09/07/2017
TAGS: PARM ETTC MTCRE TSPA PREL IN UP
SUBJECT: UKRAINE: APPEAL FOR USG FORBEARANCE ON INDIA SPACE
PROGRAM COOPERATION

Classified By: Political Counselor Kent Logsdon for reasons 1.4(b,d)


1. (C) This is a request for guidance. Request that the
Department provide the U.S. position regarding Ukraine
company Yuzhnoye's contract to prepare blueprints for a
semi-cryogenic, liquid-oxygen/kerosene-fueled rocket engine
for the Indian Space Research Organization, as detailed
below, and especially whether the U.S. would have any
objections to fulfillment of the contract.


2. (U) We met September 5 with National Space Agency of
Ukraine (NSAU) Deputy Director General Eduard Kuznetsov at
Ukrainian request. He was joined by NSAU Division Director
Ihor Chuprin; NSAU International Cooperation Department
Deputy Director Volodymyr Fedotov; Yuzhnoye Construction
Bureau Department Director for Marketing, Export Control, and
Licensing Hennadiy Varyanychko; and MFA Arms Control and
Military Technical Cooperation Counselor Oleh Belokolos.
Kuznetsov began his presentation by stressing Ukraine's
scrupulous observance of Missile Technology Control Regime
(MTCR) requirements. Ukraine's strict adherence to MTCR had
led the Ukrainian government to cancel Pavlohrad Chemical
Plant's export license to provide mixers to Cyano Chemisive
Systems of India. As a result, Cyano Chemisive Systems sued
Pavlohrad Chemical Plant, and Pavlohrad Chemical was blocked
from conducting business in India for a 7-year period, losing
numerous potential business opportunities. Furthermore,
Pavlohrad Chemical's competitors in the tender, U.S.
companies Mayers and Thiokol, had stepped in to secure
Pavlohrad Chemical's contract.


3. (SBU) With this painful experience and in the spirit of
openness, Kuznetsov continued, NSAU was sharing the details
of a contract between Yuzhnoye and the Indian Space Research
Organization (INSRO) for Yuzhnoye to supply plans and
technical specifications for the construction of a
semi-cryogenic, liquid-fuel rocket engine. Realizing the
MTCR sensitivities of the contract, Kuznetsov stressed the
number of safeguards that the Ukrainian government had built
into the contract, as detailed in the non-paper in para 5.


4. (C) In a conversation after the meeting, Varyanychko
specified that the contract was for delivery of blueprints
for the rocket engine that ISRO would use to build its own
engine; Ukrainian companies simply did not have the
capability actually to construct the engine themselves. He
stressed that the information would allow ISRO to build only
one model of engine and reiterated the point that Yuzhnoye
would not provide any engineering or technical details on how
the plans had been developed. Belokolos noted that, if
Ukraine lost the contract, Russian companies would step in
and warned that the U.S.-Ukraine relationship would be very
negatively affected if the public and government officials
were to learn that the U.S. had prevented the deal from going
through. Varyanychko said the State Export Control Service
had earlier authorized a license to negotiate the deal, but
was now holding up the export license to fulfill the
contract. He appealed for a speedy and positive U.S.
response.


5. (SBU) Begin text of Ukrainian non-paper.

On the cooperation between Ukraine and the Republic of India

In the framework of Ukraine-US bilateral cooperation in the
sphere of nonproliferation of WMD and its delivery systems,
and referring to the request of the U.S. Side at the regular
meeting of the Ukraine - US Nonproliferation and Export
Control Working Group (June 26-27, 2007, KYIV, Ukraine),we
would like to provide you with the following information
about the cooperation between Ukraine and the Republic of
India in the space and rocket sphere.

-- Cooperation between Ukraine and India in the space and
rocket sphere is based on the Framework Agreement between the
Cabinet of Ministers of Ukraine and the Government of the
Republic of India of June 2, 2005 aimed at "expanding
peaceful use of outer space, preserving outer space open for
broad international peaceful cooperation." The
above-mentioned Framework Agreement emphasizes strict
adherence of the Parties to the provisions of the Treaty on
Principles Governing the Activities of States in the
Exploration and Use of Outer Space Including the Moon and
Other Celestial Bodies of January 10, 1967, of other
multilateral treaties and agreements on exploration and use
of outer space joined by the both Parties.

-- The cooperation between Ukraine and the Republic of India

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in the sphere of peaceful use of outer space will be
conducted in full compliance with the requirements of the
international export control regimes, in particular, the
requirements of the Missile Technology Control Regime, with
Ukraine's international obligations, as well as under the
condition that the Indian Side will provide Ukraine
appropriate government assurances of non-proliferation of
missile technologies and their use for peaceful purposes only.

-- In the framework of the Agreement, Ukraine and India are
planning to develop their cooperation in the sphere of space
exploration and peaceful use of outer space strictly adhering
to their international obligations, in particular, in the
sphere of production of space transport systems and
conducting special scientific researches for assembling,
producing, launching, operating and using the launch
vehicles, satellites and other space systems, as it is stated
in the corresponding paragraphs of the Article 3 of the
Framework Agreement.

-- In order to ensure the transparency of Ukraine-India
cooperation in space sphere, the text of the Agreement is put
up on the official web-page of the National Space Agency of
Ukraine (NSAU).

-- The first concrete step in Ukraine-India cooperation in
space sphere was the November 2006 contract for the
development of semi-cryogenic liquid-propellant rocket engine
using the "liquid oxygen-kerosene" components for the Indian
Side (Indian Space Research Organization).

-- The goods technical documentation for the production of
the concrete semi-cryogenic liquid-propellant rocket engine
for the space rocket-carrier which are to be transferred to
the Indian Side falls under the Category I items of the MTCR
Control Lists.

-- Under above-mentioned contract it is envisaged to supply
to the Indian Space Research Organization the rocket engine
technical documentation. In order to meet the requirements
of the Missile Technology Control Regime, the Government of
India provided appropriate assurances (International Import
Certificate and the End-User Certificate) stipulating that
the items under this contract will be used for peaceful
purpose only.

-- In addition, the contract specifies the following
obligations of the Indian Side:


1. The Indian Space Research Organization is the importer
and the end-user of the transferred goods.


2. The received goods will be used for the peaceful
exploration of outer space only; the data will not be copied,
modified, upgraded, re-exported or transferred to the third
side without the permission of the State Enterprise "Yuzhnoe
Construction Bureau" and the specially authorized body of the
executive power of Ukraine on state export control issues;


3. The use of the goods for military purposes or for the
creation of the weapons of mass destruction is ruled out;


4. The Ukrainian authorized bodies will have a right to
conduct inspections verifying the correct use of goods for
declared purposes.


5. The contract will come into force only after the
appropriate Ukrainian state authorities will have provided
the Republic of India with all necessary permissions.

-- It is necessary to add, that the contract does not foresee
the delivering to the Indian Side the calculation methods
used during the engine development and the appropriate
software.

-- At the same time, the world-wide experience in the
construction of intercontinental ballistic missiles shows
that the use of engines with low-boiling fuel components in
modern strategic missile weapons is not practical.
Currently, the Ukrainian Side has all reasons to consider the
semi-cryogenic liquid-fuel rocket engine created under the
concluded contract as the one to be used for peaceful space
purpose only.

End text.


6. (U) Visit Embassy KYIV's classified website:
www.state.sgov.gov/p/eur/kiev.

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Taylor