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Viewing cable 09YEREVAN20, S/NF) CONSTRUCTIVE TALKS ON EXPORT CONTROL ISSUE
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Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
09YEREVAN20 | 2009-01-14 15:56 | 2010-12-06 21:30 | SECRET//NOFORN | Embassy Yerevan |
VZCZCXYZ0000
OO RUEHWEB
DE RUEHYE #0020/01 0141556
ZNY SSSSS ZZH
O 141556Z JAN 09
FM AMEMBASSY YEREVAN
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8515
INFO RUEHSF/AMEMBASSY SOFIA IMMEDIATE 0050
RHEHNSC/NSC WASHDC IMMEDIATE
RUEAIIA/CIA WASHDC IMMEDIATE
RUEKJCS/SECDEF WASHDC IMMEDIATE
S E C R E T YEREVAN 000020
NOFORN
SIPDIS
PASS TO EUR/PRA, ISN/CATR, INR/SPM
EO 12958 DECL: 01/13/2019
TAGS ETTC, PARM, PINR, AM
SUBJECT: (S/NF) CONSTRUCTIVE TALKS ON EXPORT CONTROL ISSUE
REF: A. 08 YEREVAN 1040 B. 08 YEREVAN 1051
Classified By: Amb. Marie L. Yovanovitch, reasons 1.4 (b,d)
SUMMARY AND COMMENT
--------------------
¶1. (S/NF) The separate meetings on January 14 with NSS Chairman Hakobian and President Sargsian regarding the Iran export control issue were both positive and constructive. Sargsian acknowledged the weapons purchase from Bulgaria, and neither he nor the NSS Chairman challenged our information that these weapons were then transferred to Iran/Iraq. Both men indicated that there would be an investigation into how the weapons went from Armenia to Iran/Iraq. Hakobian seemed to indicate that the blame most probably lay with the Bulgarians and perhaps unauthorized Armenians acting on their own. Probably in an attempt to minimize U.S. demands, they also noted that there have been significant reforms and personnel changes since the incident. The President reiterated that cooperation with the U.S., including on security and export control, was an Armenian priority, and that the GOAM, with the NSS as the lead, would discuss the proposed Memorandum of Understanding with the expert team on January 15.
¶2. (S/NF) Somewhat surprisingly, the President has reversed the mantra he has repeated for the last four months that the weapons transfer “did not happen and could not have happened.” It,s not clear what has prompted this abrupt climb down, but it is probably some combination of solid evidence, a compelling presentation, an understanding of the consequences non- cooperation could bring, a desire to get off on the right foot with the new administration -- and a Soviet-style calculation that they can sign the MOU, but probably won,t really have to implement it. While there will no doubt be hard questions during the meeting on the MOU and actual implementation will pose even greater challenges, we are -- unexpectedly -- in the best place we could be going into discussions on the MOU. END SUMMARY AND COMMENT.
MEETING WITH NSS CHAIRMAN HAKOBIAN: BETTER THAN EXPECTED
--------------------------------------------- -----------
¶3. (S/NF) Ambassador Mahley and his delegation met with NSS Chairman Hakobian on January 14 to discuss Armenia,s role in an arms transfer to Iran, from which point they were later transferred onward to insurgents in Iraq. NSS Chairman Hakobian indicated that Armenia was ready to cooperate on this case and to have a dialogue with the U.S. Hakobian emphasized throughout the meeting that Armenia has undergone significant changes over the last several years and there are new people in the government since 2003, when this transfer occurred. Hakobian also highlighted that two Deputy Defense Ministers had been fired since the transfer happened. Mahley thanked Hakobian for his remarks and said he was here to discuss a tough issue, which reflected the good relationship between the U.S. and Armenia and that this type of discussion that friends have. Hakobian reiterated that Armenia values that relationship.
¶4. (S) Mahley, drawing from the points in paragraph 18, laid out the U.S. evidence for our assertion that Armenia facilitated Iran,s acquisition of RPG-22s and PKM machine guns, which have been recovered in arms caches of Iranian- sponsored insurgent groups in Iraq. This exchange, which was promised by Sectary Rice, included reviewing the documentary evidence. During the course of our investigation the markings on the weapons indicated that they originated in Bulgaria, and we were able to subsequently determine the lot numbers on the RPG-22s corresponded with the production of 1000 items, all of which were shipped to Armenia along with the PKM machine guns. In addition, we shared with Hakobian that in early January 2003, the Bulgarian firm XXXXXXXXXXXX and the Armenian Ministry of Defense concluded a deal to purchase the RPG-22s and the PKM machine guns; the Armenian XXXXXXXXXXXX served as an intermediary in the transaction. INR analyst Stewart Eales then reviewed the documentary evidence that we had to support this conclusion. First, as part of this deal an end-user certificate from Armenia was signed by then- Defense Minister Sargsian. Hakobian acknowledged that the signature was that of Sargsian. In response to the presentation of the invoice for the transfer, Hakobian asked who from Armenia signed the document. Mahley said that we did not have that information. Eales then explained that the
financial document showed that the money for the deal came from an Iranian front company through an Armenian bank to Bulgaria.
POINTING THE FINGER AT BULGARIA
-------------------------------
¶5. (S/NF) Hakobian made clear that the information was “clear” and “without doubt.” He assured Mahley that he would launch an investigation and that the GOAM needed as much information as possible so that it could find the individuals responsible for the transfer. In response to the financial documents, Hakobian responded “so Bulgaria sold these items to Armenia knowing they were going to Iran?” Mahley and Eales explained that the Bulgarians were not aware of the involvement of an Iranian in the transaction.
¶6. (S/NF) Hakobian was also very concerned with how the goods were transferred to Armenia. In reviewing the invoice, he noted that the goods were to be flown to Yerevan airport and therefore there must be some documentation about this flight. Hakobian asked if the U.S. knew whether all of the goods were provided to Iran. He stated outright that he thought it was possible that the weapons were delivered to Armenia, but some of them were subsequently diverted in a scheme to make money. Hakobian said he needed to understand what was reported to the Ministry of Defense. He was particularly interested in raising an issue about whether the entire shipment went to Iran, or whether officials skimmed off part of the cargo. He noted that Armenia has done a lot of work since 1991 to prevent Iran from turning Armenia into a conduit for Russian arms transfers to Iran.
¶7. (S/NF) Mahley responded that it was the U.S. assessment that the documents clearly show a deal between the Armenian entity XXXXXXXXXXXX and Iran. There is no indication that the Bulgarian entities were aware of Iranian involvement; it is our assessment that this deal was done to hide the Iranian involvement from Bulgarian and any other non-Armenian sources. With regard to the issue of whether any of the goods were kept in Armenia, it was the U.S. assessment that the payment process showed the Iranian entity paid for the entire amount being acquired and that it knew the quantities it was paying to acquire. We have no shipping documentation from Armenia to Iran.
U.S. LAWS AND GOALS
-------------------
¶8. (S/NF) Leaving aside Armenia,s intention to investigate, Mahley reviewed with Hakobian what the goals of the U.S. were for this situation. First, the transfer is impossible to reverse. Therefore, it is critical for the U.S. to have full confidence that GOAM cannot let this happen again. Second, this incident triggered two U.S. laws that could result in sanctions. Mahley emphasized that Armenian cooperation in this matter would be an important factor in our decision whether to waive sanctions.
¶9. (S/NF) After the presentation of the additional information on this case, Hakobian appeared to understand the consequences of this activity and there is potential for significant damage to Armenia. He said Armenia has a lot of problems and there is no desire to create more problems. Hakobian committed to use all available resources of the GOAM to fully investigate this transfer and share an official report with the USG.
MEETING WITH PRESIDENT SARGSIAN
-------------------------------
¶10. (S/NF) Later in the afternoon, President Sargsian received Ambassador Mahley. Sargsian opened the meeting by noting that building relations with the United States is of vital interest to Armenia and that security is an important component in the overall bilateral relationship. He said that he, personally, was proud of his contributions in this respect and recalled that he had signed the Cooperative Threat Reduction Agreement with DOD. Sargsian indicated that he had been briefed by the NSS on Mahley’s earlier meeting and invited Ambassador Mahley to begin.
¶11. (S/NF) Mahley noted the earlier constructive meeting with the NSS and said that he would like to brief the President directly on the export control case and how it came about. Following Mahley’s abbreviated presentation, the President stated there was such a contract with the Bulgarians and that he had signed the end user certificate in his capacity as Minister of Defense. He listened intently as Ambassador Mahley passed the three documents (invoice, end user document, and financial transaction statement) and nodded as he reviewed the documents.
¶12. (S/NF) Ambassador Mahley clarified that the information we were sharing was obtained by the USG using its own sources and methods. Earlier Chairman Hakobian had asked whether he could approach the Bulgarians; if he did so, it was possible that the Bulgarians would be unaware of the case, Mahley indicated.
¶13. (S/NF) Ambassador Mahley stated that the reason the team of experts is in Armenia is that the Administration wants to move forward to find a constructive resolution to the issue, and he was sure that the next Administration would be interested in doing so as well. Ambassador Mahley reviewed why the transaction was of such concern to the U.S. and stated that U.S. law requires us to sanction the entities of a country that facilitated such a transfer. While sanctions are mandatory, the President has the ability to waive sanctions on national security grounds. If Armenia makes the necessary changes to strengthen its export control system, there might no longer be a need to impose sanctions.
This was what Deputy Secretary Negroponte conveyed in his letter to Sargsian.
GOAM READY TO DISCUSS MOU
-------------------------
¶14. (S/NF) Mahley indicated that he was ready to discuss with the GOAM a proposed Memorandum of Understanding (MOU) with GOAM experts, which the U.S. believes would allow a constructive way forward for the two countries. Many of the items Armenia has already accomplished, he stated. There are additional items that the MOU covers, including process and transparency, that still need to be implemented in the export control regime and that the MOU would cover. The USG sees the signing of an MOU “even without the particular export control case that triggered this discussion” to be a constructive step in the bilateral relationship, Mahley concluded.
¶15. (S/NF) Mahley shared that he had briefed Congress and that there was considerable interest in the case since the weapons had led to the death and injury of U.S. servicemembers in Iraq. Mahley added that the USG understands the sensitivity of this case and so worked hard to ensure that all the facts provided the GOAM were correct and in order; this took some time which delayed the briefing for the President.
¶16. (S/NF) President Sargsian responded that he had understood two things from previous conversations on this subject: 1) information-sharing would precede any prescriptive measures that the U.S. would suggest, but perhaps he had misunderstood this; and 2) the weapons in question were missiles or rockets -- not RPGs. He stated that the information about the contract with Bulgaria is correct and the GOAM needs to explore further how the weapons got to Iran or Iraq. “We know that we got the weapons. We will figure out how they were transferred and we will let you know,” the President assured Mahley.
¶17. (S/NF) President Sargsian said the GOAM wants to cooperate with the U.S. on export control and will examine the MOU. He said he had certain questions, and the NSS would take the lead in working with Ambassador Mahley and the experts group the following day. The President concluded that the GOAM did not have and had no interest in cooperating with Iran on weapons sales.
I.C.-CLEARED TALKING POINTS DELIVERED TO GOAM
-------------------------------------------
¶18. (S/REL ARMENIA) -- Between April 2006 and June 2008, Coalition forces in Iraq
recovered multiple RPG-22 antitank weapons and PKM machine guns.
-- These weapons bore Bulgarian factory markings and were tracked through a sales arrangement that took the weapons through Armenia to Iran.
-- We have information that in early January 2003 the Bulgarian firm XXXXXXXXXXXX and the Armenian Ministry of Defense (MOD) completed a weapons sale that included these weapons recovered by Coalition forces in Iraq. The Armenian company XXXXXXXXXXXX served as intermediary for the deal. XXXXXXXXXXXX-- According to the end-user certificate and sales invoice, the deal included 1000 RPG-22s produced by the Bulgarian firm XXXXXXXXXXXX and 260 PKM machine guns produced by the Bulgarian firm XXXXXXXXXXXX. We have obtained documentation that includes production lot numbers for the RPG-22Ms and the serial numbers for the PKM machine guns sold to Armenia. The XXXXXXXXXXXX invoice was signed by XXXXXXXXXXXX. The end-user certificate was signed by former Armenian Minister of Defense (now President) Serzh Sargsian, which offered the Government of Armenia,s assurance that the weapons would remain within the possession of the Armenian Government.
-- Financial records for the RPG-22 and PKM sale identify the
ordering customer as XXXXXXXXXXXX, someone known by the U.S. to be associated with Iranian arms acquisitions.
-- An RPG-22 attack on a US armored vehicle in Iraq on January 31, 2008 killed one US soldier and wounded three. Factory markings on the recovered RPG-22 rocket debris indicate it was originally part of the shipment to Armenia by the Bulgarian firm XXXXXXXXXXXX.
-- US military personnel discovered an arms cache in Baghdad on February 15, 2008 that belonged to Hizballah Brigades -- an Iranian-backed Iraqi militant group. Among the weapons recovered, most of which were Iranian in origin, were six Bulgarian RPG-22 anti-tank weapons. The production lot and serial numbers on all six indicated they were produced by the
Bulgarian firm XXXXXXXXXXXX and part of the sale to Armenia in January
¶2003. -- Two RPG-22 launch tubes were recovered following an attack
that wounded three US military personnel in Baghdad in mid- March 2008. The lot and serial numbers on the recovered tubes matched those originally sold to Armenia in January. Handwritten on both launchers was the Arabic message “Rejoice
- Islamic Resistance of Iraq - Hizballah Brigades” -- the name of the same Iranian-backed Iraqi militant group.
(SECRET//REL Armenia) YOVANOVITCH