(S) RESPONSE TO TURKEY ON SHIPMENT OF

S E C R E T STATE 079656 E.O. 12958: DNG: CO 07/15/2033 TAGS: PARM PK PREL TU SUBJECT: (S) RESPONSE TO TURKEY ON SHIPMENT OF PROLIFERATION CONCERN. REF: A. A) STATE 003747 ¶B. B) STATE 1198 ¶C. C) ANKARA 92 ¶D. D) STATE 3747 Classified By: EUR/PRA Director Anita Friedt For 1.4 B,D -------------- Action Request -------------- ¶1. (S/NF) In January 2008, the U.S. approached Turkish officials concerning a shipment of a Turkish-origin machine tool that was destined for Pakistan (Refs A and B). At that time, we informed the GOT that this shipment consisted of a computer numerically controlled (CNC) five-axis machining center produced by a German company and brokered by a Turkish subsidiary. Additionally, our information indicated that the machine was controlled under the Wassenaar Arrangement and listed in the Nuclear Suppliers Group (NSG) Dual-Use Annex. Following an investigation, Turkey reported that the cargo shipped to Pakistan consisted of a CNC 3-axis machine and therefore was not controlled by the NSG. Turkey also indicated that it believed the machine was manufactured in Taiwan (Ref C). Post should approach Turkish officials involved in the investigation of this shipment, draw on appropriate background and non-paper in Para 7, clarify inconsistencies between the Turkish and U.S. information, and stress the importance that Turkey conduct an end-use check on this machine. ¶2. (S/NF) During this cargo's voyage from Turkey to Pakistan it was transshipped in Singapore, and loaded onto a Japanese-owned vessel. Washington approached the GOJ (Ref D) and requested that it take steps to reroute the cargo so that it could be inspected prior to arriving in Karachi, Pakistan. The GOJ took action, but did not have enough time to redirect the vessel before the shipment was offloaded in Pakistan. The GOJ has approached Washington with a variety of follow-up questions regarding the final disposition of this machine tool. Washington would like to inform Japan that we believe that the machine did arrive in Pakistan, but that Turkey cooperated in this effort and investigated the shipment. Embassy Ankara should seek Turkey,s concurrence with sharing the results of Turkey,s investigation with Japan, an NSG member. -------------- Objectives -------------- ¶2. (S) Embassy Ankara should pursue the following objectives: --Thank host government officials for their ongoing cooperation on issues of proliferation concern and for their investigation into this shipment. --Clarify discrepancies between U.S. information and what Turkish officials learned in their investigation. -- Inform interlocutors that Turkey is correct in its assessment that the machine in question is a 3-axis CNC machine. -- Emphasize that while the U.S. agrees with the results of Turkey's investigation, we continue to assess that this machine has a 5-axis capability. --Reinforce the U.S. position that this machine, even as a 3-axis machine, is controlled by the NSG Dual-Use Annex section 1.B.2, and that we continue to be concerned that it could be diverted to the Pakistani nuclear or missile program. --Request that, as an NSG member, Turkey conduct an end-use check on this machine to determine whether it might have been diverted to the Pakistani nuclear or missile program. Post-shipment checks are a valuable tool to verify that an item authorized for export arrived at the stated end-user and is being put to the authorized end-use. The U.S. regularly conducts such inspections. -- Request to share certain details on this case with the GOJ. -------------- Background -------------- ¶3. (S/Rel Turkey) In January 2008, Turkish authorities investigated U.S. information indicating that an NSG-controlled machine tool that was shipped by the Turkish firm Spinner Takim Tezgahlari Sanayi Ve Ticaret, Ltd. (Spinner Takim) to a company in Rawalpindi, Pakistan named New Auto Engineering (Refs A, B and C). In the course of this investigation Turkish authorities discovered information that appeared to contradict U.S. information. Specifically, Turkish officials stated that the machine was not NSG-controlled because of its 3-axis configuration and that the machine was manufactured in Taiwan (as opposed to Germany where Spinner Takim,s parent company and manufacturer is located). ¶4. (S/Rel Turkey) Background Continued: (5-axis v. 3-axis) Washington has examined Turkish information and determined that this machine is technically classified as a 3-axis machine tool; however, the U.S. assessment of this machine is that even as a 3-axis machine, this item is still controlled per section 1.B.2.b in the NSG Dual-Use Annex. Additionally, because this machine was equipped with a Siemens 840D controller, it is capable of performing 5-axis machining operations. ¶5. (S/Rel Turkey) Background Continued: (Location of Manufacture) Turkey's investigation also indicated that the machine was produced in Taiwan rather than Germany. The U.S. concurs with this finding and we believe it is likely that this machine was produced in Taiwan, as the German-based manufacturer Spinner has a production facility there. -------------- Talking Points -------------- ¶6. (S/Rel Turkey) Begin Points -- In January 2008, we provided you with information concerning a vertical machining center that was shipped from the Turkish firm Spinner Takim to Pakistan. We raised this transfer with you in January 2008. --We appreciate the effort that Turkish authorities put into this investigation and your willingness to share the information that you uncovered. --The U.S. has closely reviewed all available information in this case and would like to discuss with you the results of our analysis. --We understand that your investigation into this shipment indicated that the machine shipped to Pakistan was a 3-axis machine and therefore not controlled by the Wassenaar Arrangement or the Nuclear Suppliers Group (NSG). -- We agree with you that the machine in question is a 3-axis vertical machining center (Spinner Model MC1020). However, we assess that because this machine was exported with a Siemens 840D controller, it has the full 5-axis machining capability. -- Even absent this controller, this machine would still be controlled by the NSG. Machine tools with this model,s positioning accuracy and that have greater than 2 axes are controlled by 1.B.2 of the NSG dual-use annex. -- Turkish officials also pointed out that the machine in question was produced in Taiwan rather than in Germany. --The U.S. previously indicated that this machine was manufactured by the German company Spinner. Spinner Takim, the Turkish firm identified as the exporting firm in this transaction, is the partner of the German firm Spinner. The German firm Spinner has a manufacturing facility located in Taichung, Taiwan, named Euma-Spinner (Euma). Euma is the original equipment manufacturer for Germany,s Spinner, and gets its machining parts from Germany. In this case we believe that the machine was assembled in Taiwan by Euma, using parts from Germany,s Spinner, and was then shipped to Spinner Takim in Turkey and then ultimately to Pakistan. --In light of this analysis we ask that Turkish authorities reopen its investigation of this shipment. In particular we ask that you examine the exports by Spinner Takim to Pakistan. --As an NSG member, Turkey has committed to prevent the diversion of dual-use equipment from reaching programs that are not under full scope IAEA safeguards. Because the risk of diversion in Pakistan is quite high we ask that Turkish authorities perform an end-use check on this machine. --As discussed in the U.S. paper "Combating Proliferation with End-Use Checks" presented at the 2007 MTCR Plenary, post-shipment checks are a valuable tool to verify that an item authorized for export the stated end-user received the item and that it is being put to the authorized end-use. -- End-use checks provide additional information to verify the bona fides of specific end-users and end-uses of controlled exports, and help combat proliferation by preventing subsequent transfers to entities that have been the subject of unfavorable post-shipment checks. End points. -------------- Reporting deadline and POC -------------- ¶7. (U) Post should report results by July 29, 2008. Please slug replies for ISN. Department point of contact is ISN/CPI Matt Zartman, 202-647-7588. Department thanks Post for its assistance. RICE NNNN End Cable Text