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