EU COMMISSION OFFICIAL DETAILS CHINA,S SATELLITE

S E C R E T BRUSSELS 000560 NAIC WRIGHT PATTERSON AFB OH SENSITIVE NOFORN SIPDIS STATE FOR OES/SAT, ISN/MDSP E.O. 12958: DECL: 04/14/2034 TAGS: CH EAIR ECON ETRD EUN PGOV PREL TSPA EINV SUBJECT: EU COMMISSION OFFICIAL DETAILS CHINA,S SATELLITE TECHNOLOGY ACQUISITION PROCESS IN EUROPE Classified By: USEU EEST Unit Chief Louis Bono for reasons 1.4 (b) & (d ) ¶1. (S//NF) An EU Commission official provided insight to China,s efforts within the EU to acquire sensitive technologies, specifically those developed for the Galileo Satellite Navigation program. He explained that the mehods employed by China's Ministry of Science nd Technology (MOST) have only recently become clear, but China has used them for several years. The key, he detailed, is that MOST looks first to signing a high-level cooperation agreement with the EU. The exact details of the agreement are not important (and MOST is unlikely to fulfill its commitments in any case),only that it shows that China and the EU have a cooperative arrangement. From there, MOST officials will travel to various EU Member States and visit the specific companies or institutes involved in the development of key technologies. Using the signed agreement as "authority" for technology transfers, the MOST officials will start "shopping" through the various technologies at the company and attempt to purchase anything they can. According to the Commission official, when the Chinese schedule travel to visit and meet with the EU, they will spend one day in Brussels and then travel to Berlin, Paris, Rome, and other major capitals for engagement with Member States and key company officials. ¶2. (S//NF) The official explained that only recently, after the Commission became the owner of Galileo and was able to further stress the importance of protecting the technology, have companies notified the Commission of Chinese approaches and asked how to respond. Prior to the transfer to the Commission, the European Space Agency (ESA) had the technological lead and was much more willing to cooperate openly with the Chinese. China at that time had more access to the Galileo project, which the Commission official expressed was a large mistake. Now, as China develops Compass, its own system, the Commission views China as a competitor, and one which it does not want to help succeed. ¶3. (S//NF) Peripherally to this discussion, but related to efforts to keep technology out of the hands of the Chinese, the official explained that he prefers that the U.S. keep restrictions preventing the re-export of satellite components. He explained that the existing restrictions under the International Traffic in Arms Regulations (ITAR) laws help him keep sensitive components from being sold to China. The EU does not have such security restrictions, and certain European-manufactured components have been transferred to China against the wishes of the Commission. In other cases however, in which the components originated in the U.S., the ITAR restrictions have helped the Commission keep control over components it did not want sold or transferred. He explained that the EU does look to the U.S. for its expertise in satellite technology, and while the ITAR restrictions do make commercial transactions more difficult, he would like to have a similar protection for European technology in the EU. ¶4. (S//NF) Comment. The official displayed clear displeasure at the Chinese tactics and the willingness of companies to work with the MOST officials. He did not detail how successful the Chinese have been in this approach, and it appeared as though he had little information on past attempts and successes. He did say that more recently, it seems as though Thales has cut off communication with the Chinese, implying that the Commission,s efforts may be successful to an extent. End Comment. .