R 021258Z JAN 88
FM AMEMBASSY BAGHDAD
TO SECSTATE WASHDC 9118

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 subsidiaryof the German firm xxxxxxxxxxxx test chamber to Iran's Defense IndustriesOrganization (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 xxxxxxxxxxxx was working to arrange training on the test chamber for DIO representatives - likely on the premises of xxxxxxxxxxxx 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 xxxxxxxxxxxx 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 xxxxxxxxxxxx China (the Chinese subsidiary of xxxxxxxxxxxx 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 xxxxxxxxxxxx was working with DIO to arrange training on the xxxxxxxxxxxx. This training
will likely be provided at the premises of xxxxxxxxxxxx China.

-- xxxxxxxxxxxx may also have played a role in the sale of the test chamber to DIO.

-- xxxxxxxxxxxx is a known proliferator associated with several Chinese entities, including the xxxxxxxxxxxx Company and xxxxxxxxxxxx Company.

-- His activities have been the subject of discussion during the Australia Group Information Exchange.

-- In addition, xxxxxxxxxxxx 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 xxxxxxxxxxxx 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