PAKISTANI PROCUREMENT FIRM SEEKS GERMAN-ORIGIN

S E C R E T STATE 131705

SIPDIS

E.O. 12958: DECL: 12/15/2033
TAGS: ETTC GM KSCA MTCRE PARM PK PREL
SUBJECT: PAKISTANI PROCUREMENT FIRM SEEKS GERMAN-ORIGIN
CALIBRATION EQUIPMENT ON BEHALF OF MISSILE-AFFILIATED
ENTITIES (S)

Classified By: ISN/MTR DIRECTOR PAM DURHAM FOR REASONS 1.4
(B),(D).


1. (U) This is an action request. Please see
paragraph 4.


2. (S) Background: The U.S. has information
indicating that as of September 2008, the
Pakistani intermediary K.M. Enterprises was
seeking calibration equipment from the German firm
Feinmess-Suhl on behalf of two entities closely
associated with Pakistan's ballistic missile
program. Specifically, in March 2008, K.M.
Enterprises ordered a measuring tape calibrator
from Feinmess-Suhl for Telemechanic Engineering
Limited, a firm associated with the National
Development Complex (NDC),the Pakistani entity
responsible for development of the Shaheen series
of ballistic missiles. Upon learning in mid-
September that German export officials had
concerns about Telemechanic Engineering Limited as
an end-user, K.M. Enterprises suggested using
another (unnamed) Pakistani end-user as a way to
facilitate the transaction.


3. (S) Separately, in September 2008, K.M.
Enterprises also sought a dial gauge calibrator
from Feinmess-Suhl on behalf of Pakistan's
Progressive Engineering Company, a firm closely
associated with the Project Management
Organization (PMO). PMO is the developer of
Pakistan's Ghaznavi short-range ballistic missile.
In response to German export officials'
requirement that the end-user declare how the dial
gauge calibrator would be used, K.M. Enterprises
provided Feinmess-Suhl with an end-user
certificate from New Auto Engineering, which is
likely another PMO-affiliated entity.


4. (S) Objectives: We want to make German
officials aware of K.M. Enterprises' apparent
attempts to conceal the actual end-use and/or end-
users of the Feinmess-Suhl equipment. We also
want to acknowledge actions German export-control
officials have already taken in this case, and
urge them to investigate the information we are
providing and to continue use all appropriate
measures to ensure that German firms are not
acting as sources of supply for ballistic missile
end-users in Pakistan.


5. (S) Action Request: Department requests
Embassy Berlin approach appropriate host
government officials to deliver talking points in
paragraph 5. Talking points can be left as a non-
paper.


6. (S) Begin talking points/non-paper:

(SECRET//REL GERMANY)

-- We would like to raise with you a matter of
proliferation concern and request your
government's assistance in investigating this
activity.

-- This issue involves the efforts of a Pakistani
procurement entity to facilitate transfers of
German-origin items by disguising the identity of
the intended end-use and/or end-users.

-- Specifically, we have information indicating
that the Pakistani intermediary K.M Enterprises
has been working to procure calibration equipment
manufactured by the German firm Feinmess-Suhl on
behalf of two entities closely associated with
Pakistan's ballistic missile program.

-- First, we understand that in March 2008, K.M.
Enterprises ordered a measuring tape calibrator
from Feinmess-Suhl for the Pakistani firm
Telemechanic Engineering Limited.

-- Telemechanic Engineering Limited is closely
associated with the National Development Complex
(NDC),the Pakistani entity responsible for the
development of the MTCR Category I Shaheen
series of ballistic missiles.

-- As of mid-September, the measuring tape
calibrator had not yet been shipped. Feinmess-
Suhl explained to K.M. Enterprises that this was
due to German export officials' concerns about
Telemechanic Engineering Limited as an end-user.

-- K.M. Enterprises suggested using another
Pakistani end-user as a way of facilitating the
equipment's shipment to Pakistan.

-- Second, in separate but related activity, K.M.
Enterprises sought from Feinmess-Suhl an
MFP100.03BV dial gauge calibrator on behalf of
Pakistan's Progressive Engineering Company.

-- The Progressive Engineering Company is closely
associated with the Project Management
Organization (PMO),which is responsible for the
development and production of the Ghaznavi short-
range ballistic missile, which is also an MTCR
Category I system.

-- As of early September 2008, German export
officials appear to have required the end-user to
declare how it would use the dial gauge
calibrator.

-- In response, K.M. Enterprises provided
Feinmess-Suhl with an end-user certificate from
New Auto Engineering, which we believe to be
another entity associated with PMO.

-- None of the Feinmess-Suhl equipment sought by
K.M. Enterprises is controlled by the Missile
Technology Control Regime (MTCR),but it could be
useful to Pakistan's ballistic missile program in
determining the accuracy of other measuring
devices.

-- We are bringing this information to your
attention because it appears that K.M. Enterprises
is attempting to conceal the actual end-use and/or
end-users of the Feinmess-Suhl equipment.

-- We appreciate the vigilance of your export
control officials in this case thus far. We
encourage you to investigate the information we
are providing, and to continue to take all
appropriate measures to ensure that German firms
are not acting - even unwittingly - as sources of
supply for ballistic missile end-users in
Pakistan.

-- We look forward to hearing of any actions your
government takes in response to this information.


7. (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, EUR/CE, EUR/PRA and
EAP/MTS.


8. (U) A Word version file of this document will be
posted at www.state.sgov.gov/demarche.
RICE