(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.
RICE


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