CHINESE FIRM SUPPLYING MISSILE-RELATED MATERIALS

S E C R E T STATE 035673 SIPDIS E.O. 12958: DECL: 04/07/2033 TAGS: PARM MTCRE PREL ETTC CH KN SUBJECT: CHINESE FIRM SUPPLYING MISSILE-RELATED MATERIALS AND TECHNOLOGY TO NORTH KOREAN WEAPONS TRADING FIRM (S) Classified By: ISN/MTR DIRECTOR PAM DURHAM REASONS 1.4 (B),(C) AND (D). ¶1. This is an action request. Please see paragraph 4. ¶2. (S) Background: The USG has information indicating that the China-based firm Shenyang Huali Economic Trading Company recently supplied to Syria consignments of steel, as well as vibration test equipment controlled by the Missile Technology Control Regime (MTCR) and China's export controls. In addition, a North Korean firm has been purchasing these items from Shenyang Huali Economic Trading Company to support ongoing projects with Syria's Scientific Studies and Research Center (SSRC) - the agency responsible for overseeing Syria's WMD and missile program. As of mid-February 2008, Shenyang Huali Economic Trading Company had worked to transfer steel to affiliates of SSRC. Additionally, in January 2008, Shenyang Huali shipped a variety of metals, including type W1.1191 CK45 steel. This is a dual-use item which has also been associated with Iran's solid and liquid propellant ballistic missile systems to Syria. ¶3. (S) Objective: Given that the items -- one of which is controlled by the MTCR and China's export controls, as well as prohibited for transfer to or from the DPRK under UNSCR 1718 -- were recently supplied to a Syrian entity of proliferation concern, the USG urges Chinese officials to immediately investigate this activity and take measures to prevent this firm from providing further assistance to weapons programs in North Korea and/or Syria. Such action would be consistent with United Nations Security Council Resolution 1718, which requires UN Member States to prevent the supply to or procurement from the DPRK of certain missile-related items and technology (including those that are MTCR-controlled). ¶4. (S) Action Request: Request Post approach appropriate Chinese officials to deliver talking points/non-paper in paragraph 5 below and report response. Talking points also may be provided as a non-paper. ¶5. (S) Begin talking points/non-paper: (SECRET REL CHINA) -- We would like to raise with you a matter of proliferation concern and request your assistance in investigating this activity. -- The U.S. has information that in 2007 and 2008, the China-based firm Shenyang Huali Economic Trading Company, working through North Korean intermediaries, acted as a key source of raw materials and technology to support a ballistic missile development project in Syria. -- Specifically, we understand that over the past year, Shenyang Huali Economic Trading Company has worked to supply to Syrian State companies vibration test equipment controlled by the Missile Technology Control Regime (MTCR),by China's export controls and paragraph 8(a)(ii) of UNSCR 1718, and has shipped multiple consignments of steel to Syria. -- A North Korean firm has been purchasing these items from Shenyang Huali Economic Trading Company to support ongoing projects with Syria's Scientific Studies and Research Center (SSRC),the agency responsible for overseeing Syria's WMD and missile program. -- Paragraph 8(a)(ii) of UNSCR 1718 prohibits the direct or indirect supply, sale or transfer of items contained in S/2006/815 to the DPRK, which includes MTCR-controlled items. -- In addition, as of mid-February 2008, we understand that Shenyang Huali Economic Trading Company had worked to transfer steel to affiliates of SSRC. -- Similarly, in January 2008, Shenyang Huali shipped a variety of metals to Syria, including type W1.1191 CK45 steel. This is a dual-use item that has also been associated with Iran's solid and liquid propellant ballistic missile systems. -- In light of these recent activities of Shenyang Huali Economic Trading Company, we ask that you immediately investigate this activity and take measures to prevent this firm from providing further assistance to weapons programs in North Korea and/or Syria. We believe such action would be consistent China's with UNSCR 1718 obligations. -- We look forward to future cooperation on nonproliferation issues and to hearing the results of your inquiries into this matter at the earliest possible time. End talking points/non-paper ¶6. (U) Washington POC is ISN/MTR April Jones (Phone: 202- 647-3176). Please slug any reporting on this issue for ISN/MTR. ¶7. (U) A word version file of this document will be posted at www.state.sgov.gov/demarche. RICE NNNN End Cable Text