(S) MULTIPLE SHIPMENTS OF SODIUM PERCHLORATE FROM

S E C R E T STATE 068969 NOFORN E.O. 12958: DECL: 05/18/2032 TAGS: PARM PREL MNUC IR CH SUBJECT: (S) MULTIPLE SHIPMENTS OF SODIUM PERCHLORATE FROM CHINA TO IRAN Classified By: Classified By: EAP Acting DAS John Norris, Reasons 1.4 (b),(c),and (d) ¶1. ACTION REQUEST: Post is requested to approach appropriate Chinese officials regarding shipments of sodium perchlorate by Chinese entities to Iranian entities with links to Iran's ballistic missile program. Sodium perchlorate can be used to produce ammonium perchlorate, an oxidizer for solid-fuelled ballistic missiles and rocket motors, and is controlled by the Missile Technology Control Regime (MTCR). Post may draw from background and objectives below, as appropriate. -------------- OBJECTIVES -------------- ¶2. (S) Calling upon the information on paragraphs 4-13, below, Post should: -- Express our appreciation for Chinese officials, ongoing attention to issues of proliferation concern. -- Call Chinese officials, attention to provisions of UN Security Council Resolutions 1737 and 1747 that call on UN Member States to take necessary measures to prevent transfer of items that states determine could contribute to Iran's ballistic missile program. -- Encourage Chinese officials to investigate past and pending shipments of sodium perchlorate to entities in Iran designated in the Annexes to UNSCRs 1737 and 1747. -- Request the Chinese report the findings of their investigations to us in a timely fashion. -- Express U.S. hopes for continued close cooperation on proliferation matters in the future. -------------- BACKGROUND--FOR POST ONLY -------------- ¶3. (S//NOFORN) (FOR POST ONLY) In late April 2007, the Chinese firm Dalian Chlorate shipped 400 metric tons of sodium perchlorate aboard the M/V GANT STAR. During a port call in Singapore, Singaporean officials searched the vessel. Singaporean authorities, investigation of the shipment found that the consignee for the cargo was Parchin Chemical Industries Group (PCI),an entity designated under Annex I to UN Security Council Resolution 1747 for its involvement in Iran's ballistic missile program. Singaporean officials subsequently seized the cargo -------------- BACKGROUND -------------- ¶4. (S//REL China) Recently, Chinese firms have engaged in several shipments of sodium perchlorate to entities associated with Iran's ballistic missile program, most notably to the Iranian entity Parchin Chemical Industries Group (PCI). PCI is designated under Annex I to UNSCR 1747 for its involvement in Iran's ballistic missile program. ¶5. (S//REL China) Sodium perchlorate is not controlled by the Missile Technology Control Regime (MTCR),nor by the export restrictions of UNSCR 1737 or 1747. However, it can be used to produce ammonium perchlorate, an oxidizer for solid-fuelled ballistic missiles and rocket motors. Ammonium perchlorate is controlled by the MTCR. ¶6. (S//REL China) PCI used a series of denial and deception tactics to ensure that a recent shipment of 400 metric tons of sodium perchlorate arrived safely in Iran. One example included using the name &Para Chemical Industries,8 rather than Parchin Chemical Industries Group, on the purchase invoice for the cargo. Another example was to have the consignee for the shipment be listed as &to order8 and have the address be a neutral address, such as PCI's Iranian freight forwarder or transport company. The shipper recommended a new bill of lading was to be sent to Islamic Republic of Iran Shipping Lines, (IRISL) China office indicating this new use of a neutral address. ¶7. (S//REL China) PCI also requested the shipper be paid via a letter of credit opened through Bank Sepah Chamran branch. Bank Sepah is a financial institution sanctioned in the Annex to UNSCR 1747 due to its involvement in missile proliferation-related activities. -------------- FUTURE SODIUM PERCHLORATE SHIPMENTS -------------- ¶8. (S//REL China) Our information indicates that Fuzhou Yihua Chemical Stock Company agreed to supply 900 metric tons of sodium perchlorate to PCI in April 2007 for delivery to Bandar Abbas, Iran. ¶9. (S//REL China) Fuzhou Yihua Chemical previously supplied PCI with a 211 metric ton shipment of sodium perchlorate in October 2006. ¶10. (S//REL China) According to its corporate web site, Fuzhou Yihua Group is located at 22C, Ping An Building, 88 Wu Yi Zhong Road, Post Code 35005, Fuzhou, Fujian, China. ¶11. (S//REL China) In addition, China North Wanxing International Corporation (CNWIC) offered PCI two shipments of sodium perchlorate, one for 100 metric tons for delivery in June 2007 and one for 500 metric tons at an unknown future time. ¶12. (S//REL China) The address for China North Wanxing is Bingqi Mansion, 10 Chedaogou, Haidian, Beijing, China 100089. ¶13. (S//REL China) PCI is likely to continue using denial and deception tactics in their attempts to have the 400 metric ton sodium perchlorate shipment released, as well as in future shipments of this commodity. -------------- REPORTING REQUIREMENT AND POC -------------- ¶14. (U) Please report delivery of demarche and any immediate response by 23 May. ¶15. (U) Washington points of contact for follow-up information are Mark Felipe, (202) 647-5376, felipem2@state.sgov.gov, and Edna Sidler, (202) 647-5347, sidlerej@state.sgov.gov. Please slug all responses for ISN, T, EAP, and SCA. Washington appreciates Post's assistance. RICE NNNN End Cable Text