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. �A; ¶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