ESTABLISHING A U.S.-EGYPT END-USE MONITORING

S E C R E T STATE 062775 NOFORN SIPDIS E.O. 12958: DECL: 06/17/2019 TAGS: EG MARR PARM SUBJECT: ESTABLISHING A U.S.-EGYPT END-USE MONITORING WORKING GROUP REF: A. A) STATE 23015 ¶B. B) CAIRO 876 ¶C. C) CAIRO 804 ¶D. D) CAIRO 803 ¶E. E) CAIRO 458 Classified By: PM AA/S Greg T. Delawie E.O. 12958 Reasons 1.4 (b),(d) ¶1. (U) This is an action request. Please see para 2. SUMMARY AND ACTION REQUEST -------------- ¶2. (U) The Department requests that Post engage appropriate Egyptian MOD officials to gain Egyptian agreement to host an End-Use Monitoring Working Group (EUMWG) in late July 2009. Additionally, the Department requests that Post convey and seek Egyptian MOD feedback on the proposed agenda for the EUMWG (see paragraph 6), which may be left as a non-paper. Post may also draw off the objectives listed in para 5 in making the approach to the GOE. End Summary and Action Request. BACKGROUND -------------- ¶3. (S) Since 2006, the Department has reported to Congress, pursuant to Section 3 of the Arms Export Control Act (AECA),as amended, six actual or possible violations of the GOE's end-use, retransfer, and security obligations involving U.S.-provided defense articles and defense services. In early 2007, then-Secretary Rice and then-Under Secretary Joseph engaged GOE officials on this apparent trend. Shortly thereafter, State/PM led an interagency delegation to reiterate USG concern over the GOE's end-use, retransfer and security violations and to propose options to facilitate corrective action (such as the creation of a position at OMC Cairo to help train/mentor GOE personnel on implementation of end-use obligations). MOD Tantawi rejected this proposal, but reaffirmed the GOE's commitment to comply with its obligations on that and a number of subsequent occasions. However, Egypt has since been reported for an additional potential violation (involving reverse engineering of Self-Propelled 155mm Howitzer gun tubes) with possibly two more forthcoming (use of a naval Synchrolift for commercial shipping and potential provision to a Chinese military delegation of access to F-16 aircraft and technical facilities),calling into question the GOE's commitment to these obligations, and/or ability to follow through on them. ¶4. (S/NF) Egypt currently has a pair of high-value U.S. defense acquisitions in process, M1A1 tank co-production and 24 F-16 Block 52 aircraft. It is our intent to move ahead with the M1A1 tank co-production once the GOE agrees to these EUMWG talks. Pending a successful meeting of the EUMWG, we would be prepared to move forward with the F-16 acquisition as quickly as possible. Successful GOE engagement via the EUMWG will be essential for gaining confidence that Egypt will properly protect U.S.-origin defense articles, technology, and information. ¶5. (S) Given ongoing USG concerns, we want to underscore to key Egyptian officials the necessity of resolving these matters and seek its commitment to meet its EUM obligations. This should be a frank conversation that clearly conveys the damage Egyptian EUM violations have done to our bilateral security relationship, particularly our ability to advocate for sales of advanced military equipment. The U.S. side intends to place this issue within the broader strategic context of strong bilateral ties, while emphasizing that a lack of demonstrable action by the GOE on EUM issues will have consequences for our relationship. The U.S. delegation would be led by State/PM at the DAS-level with a similar counterpart expected to lead for the Egyptian MOD. The proposed agenda would include: GOE explanation of how it controls U.S. technology; general export control issues; and (in coordination with Post) an offer of EUM training. We would hope to convene the EUMWG the last week of July. The PM bureau is standing by to provide additional background information in support of the talks once a GOE interlocutor has been named. ¶6. (S/REL EGYPT) The objectives of the EUMWG are to: -- Cultivate, at all levels of the GOE, a deeper appreciation for the importance of end-use monitoring (EUM),retransfer, and security obligations and relevant U.S. regulations and policies covering U.S.-origin defense articles, technology, and information. -- Provide practical guidance to the GOE on how to identify and avoid potential violations or situations that could compromise its retransfer and security obligations to the U.S. (e.g., access of foreign persons to U.S.-provided equipment or services, transfer of technical data associated with U.S.-provided equipment or services - even inadvertently - to foreign persons, etc.) -- Foster greater bilateral cooperation and transparency on EUM to facilitate corrective GOE action to minimize possible future violations. -- Underscore the need to address EUM issues in order to avoid serious consequences for our military sales program. -- Establish benchmarks for GOE corrective actions on EUM issues. -- Gain agreement on an annual EUMWG meeting and the establishment of a single GOE point of contact on EUM issues who would be empowered to engage with the USG. -- Reinforce EUM training being conducted by OMC Cairo. ¶7. (S/REL EGYPT) Text of Proposed Agenda: U.S.-Egypt End Use Monitoring Working Group (EUMWG) The U.S. government hereby requests the establishment of an End-Use Monitoring Working Group to discuss the Government of Egypt's end-use, retransfer, and security obligations concerning U.S.-provided defense articles and defense services. The U.S. views this working group as a critical step in strengthening the bilateral defense relationship and resolving serious U.S. concerns regarding Egypt's end-use monitoring program. The U.S. proposes that Egypt host the inaugural EUMWG in late July, with subsequent meetings to be held on an annual basis as appropriate. The U.S. delegation would be led by the Deputy Assistant Secretary of State for POLITICAL Military Affairs and include appropriate U.S. Government civilian and military representatives. The U.S. proposes that the initial EUMWG encompass the following topics: (A). A review of Egypt's obligations to provide security for U.S.-provided defense articles, services, or technical data pursuant to bilateral agreements on FMS and under the Arms Export Control Act (AECA),as amended. (B). A U.S.-led review of our concerns regarding possible Egyptian violations, and the implications for our security relationship. (C). Discussion led by Egypt of the steps it takes to secure U.S.-provided defense articles, services, and technical data, and recent possible violations of Egypt's obligations in this regard. (D). Identification of methods to enhance Egyptian procedures to minimize the risk of future end-use, retransfer, and security violations. The U.S. looks forward to discussing these issues with your government and welcomes comments on the proposed agenda topics. POINT OF CONTACT -------------- ¶8. (U) Department points of contact for this issue are PM/RSAT Deputy Director Mike Miller at (202) 736-4035, millermf@state.sgov.gov and NEA/ELA Desk Officer Julia Santucci at (202) 647-4261, santuccijm@state.sgov.gov. CLINTON