INFORMING BEIJING OF CHINESE FIRM LIMMT'S CONTINUED PROLIFERATION TO IRANIAN BALLISTIC MISSILE PROGRAM (S)

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S E C R E T STATE 025689

SIPDIS

E.O. 12958: DECL: 03/18/2034

TAGS: PARM, MTCRE, PREL, ETTC, CH, IR

SUBJECT: INFORMING BEIJING OF CHINESE FIRM LIMMT'S

CONTINUED PROLIFERATION TO IRANIAN BALLISTIC MISSILE

PROGRAM (S)

REF: A. 2008 BEIJING 189 AND PREVIOUS

B. 2008 STATE 14066

C. 2008 BEIJING 481

D. 2008 BEIJING 609

E. 2008 BEIJING 716

F. 2008 BEIJING 886

G. U.S.-PROVIDED NON-PAPER 06-05-08

H. 2008 BEIJING 2322

I. 2008 STATE 64254

J. 2008 BEIJING 2391

K. 2008 BEIJING 2550

L. 2008 STATE 111597

M. 2008 BEIJING 4064

N. 2008 STATE 118099

O. 2008 BEIJING 4227

P. STATE 4887

Q. BEIJING 154

R. BEIJING 207

Classified By: ISN/MTR DIRECTOR PAM DURHAM FOR REASONS

1.4 (B),(D),AND (H).

1. (U) This is an action request. Embassy Beijing,

please see paragraph 6.

2. (S) Background: Since February 2006, we have

repeatedly shared with China our concerns regarding the

proliferation-related trading activities of the Chinese

firm Dalian Sunny Industries, also known as LIMMT

(Refs). LIMMT's activity has included supplying Iran's

solid-propellant ballistic missile developer Shahid

Bakeri Industrial Group (SBIG) with graphite cylinders

and tungsten powder likely controlled by the Missile

Technology Control Regime (MTCR) and China's missile-

related items export control list. LIMMT has also

supplied SBIG with tungsten copper alloy ingots that

could be used to produce missile jet vanes.

3. (S) In November 2008 we advised the PRC that Karl

Lee, the commercial manager of LIMMT, was planning a

late October 2008 delivery of accelerometers and

gyroscopes to the Beijing office of Iran's Ministry of

Defense and Armed Forces Logistics (MODAFL) (Ref N).

We also told Chinese officials that additional monthly

shipments would be prepared for delivery to MODAFL, and

that as of September 2008, arrangements were being made

to ship consignments of tungsten copper, graphite, and

possibly aluminum to SBIG. We further advised Beijing

that LIMMT and SBIG were discussing the possible

purchase of a computer numerical controlled (CNC) cold

flow forming machine, which would likely be controlled

by the MTCR.

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4. (S) We now have additional information to share

with Chinese officials regarding this matter.

Specifically, we understand that as of late December

2008, LIMMT continued to supply SBIG with tungsten

copper, graphite, and aluminum, and that Karl Lee

offered SBIG a model 3GFF-700 cold flow forming

machine. Such a machine is capable of manufacturing

re-entry vehicle shells and solid rocket motor cases,

and is controlled by the MTCR, the Nuclear Suppliers

Group, and the Wassenaar Arrangement. We also

understand that as of late December 2008, LIMMT had

provided a quantity of gyroscopes and accelerometers to

Iran's MODAFL representative in Beijing for onward

shipment to SBIG. The MODAFL representative likely

also had plans to send another shipment of gyroscopes

and accelerometers to SBIG in early January 2009 by

having a visiting Iranian delegation carry them in

travel bags on their return to Iran.

5. (S) Objectives: We want to share this information

with Chinese officials to make clear to them that

LIMMT's procurement activities on behalf of SBIG

continue, and to emphasize that under the provisions of

United Nations Security Council Resolutions, China

should be taking steps to prevent LIMMT's ongoing

proliferation to SBIG. We also want to point out that

it was due to such activity that the United States

imposed sanctions on LIMMT on February 2, 2009 (Ref P).

6. (U) Action Request: Request Embassy Beijing approach

appropriate host government officials to deliver

talking points in paragraph 7 and report response.

Talking points may also be left as a non-paper.

7. (S) Begin talking points/non-paper:

(SECRET//REL CHINA)

-- On many occasions since February 2006, we have

discussed with you our serious concerns regarding the

proliferation-related trading activities of the Chinese

firm Dalian Sunny Industries (also known as LIMMT

(Dalian) Metallurgy and Minerals Co. Ltd or LIMMT

(Dalian FTZ) Economic and Trade Organization).

-- In November 2008 we advised you that Karl Lee, the

commercial manager of LIMMT, was planning a late

October 2008 delivery of accelerometers and gyroscopes

to the Beijing office of Iran's Ministry of Defense and

Armed Forces Logistics (MODAFL).

-- We also informed you that additional monthly

shipments would be prepared for delivery to MODAFL, and

that as of September 2008, arrangements were being made

to ship consignments of tungsten copper, graphite, and

possibly aluminum to Iran's Shahid Bakeri Industrial

Group (SBIG),Iran's primary developer of solid-fueled

ballistic missiles.

-- We further advised you that LIMMT and SBIG were

discussing the possible purchase of a computer

numerical controlled (CNC) cold flow forming machine,

which would likely be controlled by the Missile

Technology Control Regime (MTCR).

-- We now have additional information to share with you

regarding this matter.

-- Specifically, we understand that as of late December

2008, SBIG continued to receive consignments of

tungsten copper, graphite and aluminum from Karl Lee.

-- In addition, Karl Lee provided SBIG a quotation for

a model 3GFF-700 cold flow forming machine.

-- This machine is capable of producing ballistic

missile components such as re-entry vehicle shells and

solid rocket motor cases, and is controlled by the

MTCR, as well as by the Nuclear Suppliers Group (NSG)

and Wassenaar Arrangement.

-- We also understand that as of late December 2008,

LIMMT had supplied a quantity of gyroscopes and

accelerometers to SBIG via Iran's Ministry of Defense

and Armed Forces Logistics office in Beijing.

-- The MODAFL office likely had plans to send another

shipment of gyroscopes and accelerometers to SBIG in

early January 2009 by having a visiting Iranian

delegation carry them in travel bags on their return to

Iran.

-- We note in this context the requirement (per OP 6 of

UNSCR 1737) that States shall take the necessary

measures to prevent Iran from receiving technical

assistance with its nuclear weapon delivery system

capabilities and the more specific requirement to

prevent the transfer of sensitive, missile-related

technology to Iran per OP 3 of UNSCR 1737.

-- We wanted to share this information with you to

emphasize that LIMMT's procurement activities on behalf

of SBIG continue. It was due to such proliferation

that the United States imposed sanctions on LIMMT on

February 2, 2009.

-- UNSCRs 1737, 1747, and 1803 require states to take

the necessary measures to prevent the supply of certain

MTCR- and NSG-controlled items to Iran.

-- In addition, OP 4 of UNSCR 1737 requires States to

prevent the transfer to Iran of any item that State

determines would contribute to the development of a

nuclear weapon delivery system.

-- We strongly urge you to investigate these activities

immediately and to take steps to curtail LIMMT's

operations, especially with UNSCR-designated entities

such as SBIG.

-- We look forward to future cooperation on

nonproliferation issues and to hearing of the actions

your government takes in response to this information.

End talking points/non-paper.

8. (U) Department POC is ISN/MTR John Paul Herrmann

(Phone: 202-647-1430). Please slug any reporting on

this issue for ISN and EAP.

9. (U) A word version of this document will be posted

at www.state.sgov.gov/demarche.

CLINTON

INFORMING BEIJING OF CHINESE FIRM LIMMT'S CONTINUED PROLIFERATION TO IRANIAN BALLISTIC MISSILE PROGRAM (S)

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