(S) DEMARCHE ON POTENTIAL COOPERATION BETWEEN

S E C R E T STATE 161304 E.O. 12958: DECL: 11/28/2032 TAGS: ETTC PARM PREL MTCRE MNUC UP CH SUBJECT: (S) DEMARCHE ON POTENTIAL COOPERATION BETWEEN UKRAINE'S ARSENAL DESIGN BUREAU AND CHINESE BALLISTIC MISSILE ENTITIES; UPDATE RE. GOU'S MYERS/THIOKOL CONCERNS REF: STATE 135358 Classified By: ISN/MTR DIRECTOR PAM DURHAM FOR REASONS 1.4 (B),(C),AND (D). ¶1. (U) This is an action request. Embassy Kyiv please see para 6. ¶2. (S) Background/Objective: The United States has information indicating that as of late August 2007, Ukraine's Arsenal Design Bureau was planning to host a delegation from the Beijing Institute of Aerospace Control Devices (BIACD) for early September discussions involving a celestial guidance sensor. BIACD is responsible for the development of inertial guidance systems and gyroscopes for ballistic missiles, and we are concerned that any celestial guidance sensor technology provided by Arsenal to BIACD could be used by China in space launch vehicles (SLVs),submarine- launched ballistic missiles, or China's SC-19 direct ascent anti-satellite (ASAT) missile. We want to ask Ukrainian officials if this planned visit to Arsenal by BIACD representatives took place, and if so, request any available information on the topics discussed during this visit. (Note: A celestial guidance sensor, also known as a star tracker or gyro-astro compass, senses and measures the relative position of stars to determine its precise orientation within the star field, and hence the attitude of the space craft, launch vehicle, or missile to which it is attached. These items are controlled by the Missile Technology Control Regime (MTCR) under item 9.A.2. End note.) ¶3. (S) In separate activity, we understand that in late August 2007, Arsenal was in the final stages of a deal to sell a high-accuracy gyrotheodolite to either the Yuanfeng Precision Machinery Research Institute or the Hongyang Machinery Factory, both of which are affiliated with the China Sanjiang Space Group (CSSG). CSSG is a producer of short-range ballistic missiles that are probably Missile Technology Control Regime (MTCR) Category I systems. Gyrotheodolites, which can be used to align guidance systems for mobile ballistic missiles, can be controlled under the MTCR if designed for use with Category I space launch vehicles or ballistic missiles. We want to ask GOU officials to investigate this activity, and take measures to ensure that Ukrainian firms are not supporting entities affiliated with China's MTCR-class ballistic missiles or SLV programs. ¶4. (S) In another matter, we want to respond to Ukrainian inquiries related to possible contracts between the U.S. firms Myers and Thiokol and India's Cyano Chemisive Systems. The two U.S. firms were allegedly competitors of Ukraine's PCP in the competition to secure the contract to supply Cyano with batch mixers, and Ukrainian authorities were concerned that the U.S. firms had stepped in after the GOU terminated PCP's dealings with Cyano (Ref). ¶5. (S//REL UKRAINE) The U.S. recently concluded its investigation of this matter. This investigation found no information indicating that the U.S. firms Myers or Thiokol ever applied for a license to supply India's Cyano Chemisive Systems with batch mixers or related technology. Neither did the U.S. investigation uncover any evidence that the U.S. firms exported such equipment or technology to Cyano without a license, or that they engaged in any negotiations to enter into contracts with Cyano that could be related to the provision of such equipment or technologies. Barring the surfacing of additional information on this matter, we consider this issue closed. ¶6. (U) Action request: Department requests Embassy Kyiv approach appropriate host government officials (including MFA and National Space Agency officials) to deliver talking points in para 7 and report response. Points may also be left as a non-paper. In making the points concerning the Myers/Thiokol investigation, Post should indicate that we now consider this matter closed. However, we will of course review any additional information the GOU might provide relating to this case. ¶7. (SECRET//REL UKRAINE) BEGIN TALKING POINTS/NON- PAPER: -- In the spirit of our nonproliferation partnership, we would like to raise with you two matters of proliferation concern and request your government's assistance in investigating these activities. -- First, we have information indicating that as of late August 2007, a number of individuals from the Beijing Institute of Aerospace Control Devices (BIACD) were planning to travel to Kyiv and Kharkiv for early September discussions with representatives of Ukraine's Arsenal Design Bureau on a celestial guidance sensor. -- BIACD is responsible for the development of inertial guidance systems and gyroscopes for ballistic missiles. -- Celestial guidance sensors, also known as star trackers or gyro-astro compasses, could be used by China in space launch vehicles, submarine-launched ballistic missiles, or in China's SC-19 direct ascent anti-satellite (ASAT) missile. They are controlled by the Missile Technology Control Regime (MTCR) under item 9.A.2. -- We would appreciate any information you have regarding cooperation between BIACD and Arsenal, including whether the visit by BIACD occurred. If so, we would be interested in what was discussed. -- Second, in separate activity, Arsenal in late August 2007 was finalizing the sale of a UGT-A high-accuracy gyrotheodolite to China's Yuanfeng Precision Machinery Research Institute or the Hongyang Machinery Factory, both of which are affiliated with the China Sanjiang Space Group (CSSG). -- CSSG produces short-range ballistic missile systems that are probably Missile Technology Control Regime (MTCR) Category I systems. -- The Wuhan Sanjiang Import-Export Corporation - which is also subordinate to CSSG - was to serve as the intermediary for this sale. -- Gyrotheodolites can be used in the alignment of ballistic missile guidance systems - especially in mobile systems. If designed for use with Category I space launch vehicles or ballistic missiles, they are controlled by the MTCR under 12.A.1. -- We urge you to investigate this activity and to take measures to ensure that Ukrainian firms are not supporting entities affiliated with China's MTCR-class ballistic missile and SLV programs, or with China's ASAT program. -- Third, we want to respond to Ukrainian inquiries related to possible contracts between the U.S. firms Myers and Thiokol and India's Cyano Chemisive Systems. -- The U.S. recently concluded its investigation of this issue. The investigation found no information indicating that the U.S. firms Myers or Thiokol ever applied for a license to supply India's Cyano Chemisive Systems with batch mixers or related technology. -- Further, the U.S. investigation uncovered no evidence that the U.S. firms exported such equipment or technology to Cyano without a license, or that they entered into contracts with Cyano that could be related to the provision of such equipment or technologies. -- While we consider our investigation complete, we would welcome any additional information on this issue that Ukraine is able to provide. -- We look forward to continued cooperation on missile nonproliferation issues. ¶8. (U) Please contact ISN/MTR's John Paul Herrmann with any questions or follow-up related to this case (202-647-1430 - herrmannjp2@state.gov or herrmannjp@state.sgov.gov) and slug reporting on this issue for ISN/MTR and EUR/PRA. ¶9. (U) A word version of this document will be posted at www.state.sgov.gov/demarche. 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