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Viewing cable 09STATE97233, MISSILE TECHNOLOGY CONTROL REGIME (MTCR): CHINA'S
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Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
09STATE97233 | 2009-09-18 17:47 | 2011-07-11 00:00 | SECRET | Secretary of State |
VZCZCXYZ0001
PP RUEHWEB
DE RUEHC #7233 2611806
ZNY SSSSS ZZH
P R 181747Z SEP 09
FM SECSTATE WASHDC
TO AMEMBASSY PARIS PRIORITY 0000
INFO MISSILE TECHNOLOGY CONTROL REGIME COLLECTIVE
S E C R E T STATE 097233
SIPDIS
PARIS FOR EST: NOAH HARDIE
BRASILIA FOR POL: JOHN ERATH
E.O. 12958: DECL: 09/18/2034
TAGS: MTCRE ETTC KSCA MNUC PARM TSPA FR BR
SUBJECT: MISSILE TECHNOLOGY CONTROL REGIME (MTCR): CHINA'S
BALLISTIC MISSILE-RELATED EXPORT CONTROL RECORD
Classified By: ISN/MTR Acting Director Ralph Palmiero.
Reasons: 1.4 (B), (D), (H).
¶1. (U) This is an action request. Please see paragraph 2.
¶2. (C) ACTION REQUEST: Department requests Embassy Paris
provide the
interagency cleared paper "China's Ballistic Missile-Related
Export
Control Record" in paragraph 3 below to the French Missile
Technology
Control Regime (MTCR) Point of Contact (POC) for distribution
to all Partners.
Info addressees also may provide to host government officials
as appropriate.
In delivering paper, posts should indicate that the U.S. is
sharing this paper
as part of our preparation for the Information Exchange that
will be held in
conjunction with the MTCR Plenary in Rio, November 9-13,
¶2009.
NOTE: Additional IE papers will be provided via septels.
END NOTE.
¶3. BEGIN TEXT OF PAPER:
(SECRET REL MTCR)
China's Ballistic Missile-Related Export Control Record
Introduction
Since the 2008 Missile Technology Control Regime (MTCR)
Plenary,
Chinese firms have continued to provide MTCR-controlled and
non-Annex items
to ballistic missile programs in countries of concern,
demonstrating continued
weaknesses in Beijing's export control enforcement efforts.
These weaknesses
probably stem from a number of factors, including China's
reliance on foreign-provided
information (rather than through its own preventive
enforcement efforts) to prompt
proliferation-related investigations, its failure to know
their customers, its
reluctance to enforce its catch-all controls, and its
insufficient efforts to
penalize firms involved in ballistic missile-related sales.
This, in turn,
reflects a lack of political will by Chinese authorities,
some of whom probably
continue to view ballistic missile-related transfers as less
of a priority than
nuclear-, chemical-, or biological-weapon-related transfers.
Chinese Firms Continue to Evade Restrictions
Chinese firms over the past year have offered or sold
MTCR-controlled and
non-Annex items to ballistic missile-related entities in
foreign countries,
including Iran, Pakistan, and Syria. In some cases, sales
have continued
despite extensive information provided by the U.S. to Chinese
authorities
outlining our concerns about these firms' activities.
Chinese authorities and firms fail to conduct sufficient
evaluations of
missile-applicable transactions, or to take steps to know
their customers.
Other firms that are aware of the vulnerabilities in China's
export control
system take steps to conceal sensitive transactions and avoid
detection,
including by adopting new names and falsifying shipping
documentation.
Additionally, some firms may take advantage of government
connections to
skirt Chinese regulations.
Recent activities of concern include the following:
The Chinese firm LIMMT continues to sell MTCR-controlled and
non-Annex
items to Iran's missile programs.
Chinese firms continue to sell items with ballistic missile
applications
to a Syrian ballistic missile entity.
China-based Shanghai Technical By-Products International
Corporation
continues to work with Iranian ballistic missile entities to
provide
items with ballistic missile applications.
Chinese firms continue to sell equipment to Pakistan's
ballistic missile entities.
Chinese firms also have continued to market short-range
ballistic missiles,
including the B611M, P12, and SY400, at domestic and
international arms shows.
Although these systems have range and payload capabilities
that fall below MTCR
Category I thresholds, we remain concerned that the sale of
these systems could
destabilize sensitive regions, facilitate WMD development,
and potentially advance
a new customer's domestic research and development (R&D) and
production capabilities.
The B611M is marketed as a 260-km-range system that carries a
480-kg warhead,
uses a dual launcher, and is capable of achieving an accuracy
of 50 meters.
The P12 is marketed as a 150-km-range system that carries a
450 kg warhead,
uses a dual launcher, and is capable of achieving an accuracy
of 30-50 meters.
The SY400 is marketed as a 150-200-km-range system that
carries a 200-300 kg
warhead, uses a launcher that carries eight missiles, and is
capable of achieving
an accuracy of 50 meters.
Continued Enforcement Shortfalls
As we noted in 2008, a number of factors have hindered
Beijing's export
control enforcement efforts. These include: a reliance on
foreign tips
(rather than its own enforcement efforts) to spur action in
stopping exports
of concern, a reluctance to invoke catch-all controls to
prevent a proliferant
transfer, lax expectations regarding a firm's responsibility
to know its
end-user, and insufficient efforts to penalize firms involved
in ballistic
missile-related sales. As demonstrated by the examples in
the next section,
we have seen little evidence over the past year that these
issues have been addressed.
We frequently share with the Chinese government information
related to
cases of missile proliferation concern in order to get
Beijing to investigate
and/or stop the activity. Occasionally, Chinese authorities
will request
additional information about the entities or goods involved
in a specific
transaction, and the U.S. consistently responds to these
requests.
More often, however, they simply note the demarche and
indicate that it will be
referred to the proper authorities. Moreover, Chinese
officials provide only
limited feedback on these cases and the status of their
investigations, claiming
on one occasion earlier this year that "China's business is
its own business."
And even in those cases where China does provide updates,
Chinese enforcement
action appears spotty at best. For example, in one case we
have been discussing
with Beijing over the course of several years, Chinese
officials assured us that
the government had closed down a company involved in
ballistic-missile related
sales and barred it from exporting. Despite these
assurances, however, we
continue to see that same company engage in proliferant
behavior.
In another case involving a Chinese entity that has been
routinely engaged
in transactions of missile-related items, we encouraged China
to enforce
its catch-all controls. Chinese officials responded that
catch-all controls
"are not meant to catch everything," and did not provide any
additional
information on how or if it utilizes catch-all controls.
The weaknesses in China's enforcement regime indicate a
continued lack of
political will by Chinese authorities. Some Chinese
officials probably continue
to view ballistic missile-related transfers as less of a
priority than nuclear-,
chemical-, or biological-weapon-related transfers. Other
officials clearly remain
reluctant to use China's catch-all controls to prevent the
transfer of non-Annex
items, even in cases where the item has a clear ballistic
missile application and
evidence shows that the end-user is a ballistic
missile-associated entity.
US Government Sanctions Applied
This lack of political will is demonstrated in the recent
case of two proliferating
Chinese entities. Effective February 2, 2009, the United
States levied sanctions
against two Chinese entities for their supply of
MTCR-controlled items to Iran's
ballistic missile program. Pursuant to these sanctions, all
new individual U.S.
export licenses for MTCR Annex items to the sanctioned
entities and all new U.S.
government contracts relating to MTCR Annex items with the
sanctioned entities
will be denied for a two year period. An additional sanction
in this case bans
all imports into the U.S. of products produced by the
sanctioned entity for two years.
These penalties were levied following repeated discussions
with Chinese
authorities about these companies' proliferation activities
and the need
for Beijing to take steps to end their missile supply
efforts, which China
did not take. The two entities sanctioned/designated were:
Dalian Sunny Industries/LIMMT: LIMMT supplied or attempted
to supply
Iran's military and missile organizations with items
including graphite,
tungsten, gyroscopes, and accelerometers;
Bellamax: Bellamax supplied or attempted to supply Iran's
military
or missile organizations with items including steel alloys,
gyroscopes,
and ball bearings.
Outlook
Until China addresses the persistent shortfalls in its export
control
enforcement, ballistic missile programs in countries of
concern probably
will continue to seek and receive MTCR-controlled and
non-Annex items from Chinese firms.
China probably will be more inclined to be responsive in
cases where a
foreign government provides detailed tipoff information and
where China
assesses that the transfer in question involves an item
explicitly listed
on its export control list.
Self-initiated efforts by Beijing to stop shipments (without
the aid of
foreign information provided via demarche), more rigorous
implementation
of its catch-all provisions, and the consistent imposition
and public
announcement of penalties against entities found guilty of
export control
violations will all be signs that Beijing is taking steps to
further improve
its export control enforcement.
END TEXT OF PAPER.
¶4. (U) Please slug any reporting on this or other MTCR
issues for ISN/MTR.
A word version of this document will be posted at
www.state.sgov.gov/demarche.
CLINTON