GERMAN TEST CHAMBER SOLD BY CHINESE SUBSIDIARY TO IRAN'S DIO (S)

S E C R E T STATE 068250



SIPDIS



E.O. 12958: DECL: 07/01/2034

TAGS: MTCRE, PARM, PREL, ETTC, MNUC, TSPA, IR, GM, CH

SUBJECT: GERMAN TEST CHAMBER SOLD BY CHINESE SUBSIDIARY TO

IRAN'S DIO (S)



Classified By: ISN/MTR DIRECTOR PAM DURHAM FOR REASONS

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



1. (U) This is an action request. Embassy Berlin

please see paragraph 3.



2. (S) Background and Objectives: The United States

has information indicating that the Chinese subsidiary

of the German firm Voetsch Industrietechnik sold a VC3

7018 test chamber to Iran's Defense Industries

Organization (DIO),an entity sanctioned under United

Nations Security Council Resolution 1737. We also

understand that as of mid-May 2009, Chinese national

and known proliferator QC Chen was working to arrange

training on the test chamber for DIO representatives -

likely on the premises of Voetsch China. Although this

particular test chamber is not controlled by the

Missile Technology Control Regime (MTCR),it is

suitable for subjecting missile components and systems

to the harsh environmental conditions experienced by

missiles during launch, flight, and reentry. We want

to ask German officials to investigate this information

and ensure that Voetsch is taking all measures

necessary to prevent unauthorized retransfers of its

goods by foreign-based subsidiaries - especially to

entities of proliferation concern.



3. (U) Action Request: Request Embassy Berlin approach

appropriate German government officials to deliver

talking points/non-paper in paragraph 4 below and

report response. Talking points also may be provided

as a non-paper.



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



(SECRET//REL GERMANY)



-- We would like to raise with you a matter of

proliferation concern and request your government's

assistance in investigating this activity.



-- The United States has information indicating that

Voetsch China (the Chinese subsidiary of Voetsch

Industrietechnik) sold a VC3 7018 test chamber to

Iran's Defense Industries Organization (DIO).



-- This test chamber is not controlled by the Missile

Technology Control Regime (MTCR) or the Australia Group

(AG),but is suitable for subjecting ballistic missile

components and their weapons payloads to the harsh

environmental conditions experienced during the launch,

flight and reentry of ballistic missiles.



-- DIO, which is part of Iran's Ministry of Defense and

Armed Forces Logistics (MODAFL),is an entity

sanctioned under United Nations Security Council

Resolution 1737.



-- We also understand that as of mid-May 2009, Chinese

national QC Chen was working with DIO to arrange

training on the VC3 7018 test chamber. This training

will likely be provided at the premises of Voetsch

China.



-- Chen may also have played a role in the sale of the

test chamber to DIO.



-- Chen is a known proliferator associated with several

Chinese entities, including the Wha Cheong Tai Company

and China North Wanxing International Company.



-- His activities have been the subject of discussion

during the Australia Group Information Exchange.



-- In addition, Chen has been sanctioned by the U.S. on

seven separate occasions for his chemical weapons

proliferation-related activities, and is currently

subject to sanctions which are in place pursuant to the

Chemical and Biological Weapons Control and Warfare

Elimination Act.



-- We urge you to investigate this activity and ensure

that Voetsch is taking all necessary measures to

prevent unauthorized retransfers of its goods by

foreign-based subsidiaries - especially to entities of

proliferation concern.



-- We appreciate Germany's cooperation on

nonproliferation matters and look forward to hearing of

any actions your government takes in response to this

information.



End talking points/nonpaper.



5. (U) Please contact ISN/MTR's John Paul

Herrmann with any questions or follow-up issues

related to this case (202-647-1430 -

herrmannjp@state.sgov.gov) and slug any

reporting on this issue for ISN/MTR, EUR/PRA and

EUR/CE.



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

at www.state.sgov.gov/demarche.

CLINTON