SHIPMENTS OF STEEL MATERIALS FROM CHINESE COMPANY

S E C R E T STATE 040151

SIPDIS


E.O. 12958: DECL: 04/16/2033
TAGS: PARM MTCRE PREL KN KNNP CN

SUBJECT: SHIPMENTS OF STEEL MATERIALS FROM CHINESE COMPANY
TO NORTH KOREAN ENTITY OF PROLIFERATION CONCERN (S)

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


1. (U) This is an action request. Embassy Beijing, please
see paragraph 4.


2. (S) Background: The USG has information
indicating that in February 2008, the China Dandong
Zhong Lian Petrochemical Limited Company was making
arrangements to send two shipments of steel materials
- suitable for use in a ballistic missile program -
to a North Korean Trading and Defense R&D Company
responsible for supporting North Korea's defense
research and development programs. These items -
sent via rail from Dandong, China to Pot'ong-gang
District in Pyongyang - have already arrived in North
Korea and specifically included: GCr15 ball bearing
steel, 1Cr18Ni9Ti titanium stabilized stainless
steel, and CK45 and Cr30 steel. All of these materials
have potential uses in ballistic missiles.


3. (S) Objective: Given the identity of the end-user,
the USG believes these shipments could potentially be
intended for use in North Korea's ballistic missile
program. We therefore want to urge Chinese officials
to investigate this activity and take measures to
prevent Chinese firms from acting as sources of supply
to entities of proliferation concern in North Korea,
especially in light of China's UNSCR 1718 obligations.


4. (S) Action Request: Request Embassy Beijing
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:

End 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.

-- We have information indicating that as of February
2008, the China Dandong Zhong Lian Petrochemical
Limited Company was making arrangements to send two
shipments of steel materials to a North Korean
Trading and Defense R&D Company.

-- The North Korean company is responsible for
procuring commodities and technologies to support
North Korea,s defense research and development
programs.

-- The shipments - which we understand have already
arrived in North Korea - were to be sent via rail
from Dandong, China to Pot,ong-gang District in
Pyongyang.

-- Among the items sent were materials that can be
used in a ballistic missile program. These include:

-- GCr15 ball bearing steel: This steel can be used
to produce dynamically tuned gyroscope parts, ball
bearings, races, and bearing spacers.

-- 1Cr18Ni9Ti titanium stabilized stainless steel:
This material has been used in a variety of
structural parts in Scud B and C missiles.

-- CK45 steel: This is a carbon and alloy steel that
has been used for explosive bolts in Iranian
missiles.

-- Cr30 steel: This steel has uses in dynamically
tuned gyroscope motors.

-- While these materials also have commercial uses,
given the past defense research and development-
related activities of the end-user, we believe that
these shipments may be intended for North Korean
weapons programs, potentially including its ballistic
missile program.

-- We encourage you to investigate this matter with
an eye to preventing Chinese firms from acting as
sources of supply to entities of proliferation
concern in North Korea, especially in light of
China's UNSCR 1718 obligations.

-- We look forward to continued cooperation on
missile nonproliferation matters and look forward to
hearing the results of your inquiries at the earliest
possible time.


6. (U) Washington POC is ISN/MTR April Jones (Phone:
202-647-3176). Please slug any reporting on this issue
for ISN/MTR, and EAP.


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


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