(S) EFFORT TO SUPPLY IRANIAN UAV PROGRAM: A PREVALENCE OF GUILE

Identifier: 
07TAIPEI734

S E C R E T TAIPEI 000734

SIPDIS

SIPDIS

C O R R E C T E D C O P Y (TAGS NAME CHANGE FROM ECCT TO ETTC)

E.O. 12958: DECL: 03/30/2027
TAGS: ETTC, TW, IR, GM, CN
SUBJECT: (S) EFFORT TO SUPPLY IRANIAN UAV PROGRAM: A
PREVALENCE OF GUILE

REF: A. SECSTATE 40825
B. 06 TAIPEI 2731
C. TAIPEI 550

Classified By: Acting Chief of AIT/T/ECON Tim Neely, 1.5 b, c, d

1. (S) AIT delivered reftel demarche and non-paper to Bureau
of Foreign Trade Export Control Task Force Head Wally Su
(Wu-hwa) on March 30. Su emphasized his desire to help and
said he would certainly investigate the case further. He
then gave an analysis of what he thought was likely going on:
First, he again noted that there is no company by the name of
Prime Kit registered in Taiwan. Second, he noted that U.S.
agencies have found there is a company by the name of Prime
Kit registered in China. Third, he noted that the end-user
certificate (EUC) described is clearly fraudulent in several
respects, not just in the name of the end-user, and therefore
should not be the basis for thinking a Taiwan company was
involved. Fourth, the Taiwan Aerospace Industrial
Development Corporation is state-owned corporation closely
affiliated with Taiwan's Ministry of National Defense and it
would not be collaborating with China (Taiwan's enemy) to
send military-use items to Iran. Fifth, Su said his office
is the only Taiwan agency empowered to issue EUCs, and it had
never issued one involving a company called Prime Kit.

U.S. Agencies Fall for Misinformation
-------------------------------------

2. (S) Based on the above points, Su said it seemed as
though U.S. agencies may have been duped by a scheme to make
it appear that the items in question were being sent to
Taiwan, when actually they were destined for China, and then,
perhaps, onward to Iran. Su noted that he has a doctorate
degree in international trade and many years experience
working with shipping documents. He said that shipping
documents can be altered at various points in route to change
the information on the letter of credit, or to change name of
the end-user or destination. He suggested that the end-user
and destination on the shipping documents will be changed at
some point before the items reach Taiwan; and the items,
which U.S. agencies believe may be falsely labeled, may only
transit a Taiwan port on its way to another Asian port; or
may not even pass through Taiwan.

Suggestions for Further Investigation
-------------------------------------

3. (S) Su suggested that he could be more helpful if he
could see a copy of the EUC held by the U.S. or German
exporter. If U.S. agencies could not provide him with a copy
of the EUC, then, Su suggested they themselves should look at
the other data fields on the document for anomalies, such as
the place from where the EUC was transmitted and the seal of
the issuing authority. He also suggested U.S. agencies
should contact PRC export control officials and the Prime Kit
Enterprise Company located in Beijing.

Comment:
-------

5. (S) AIT in its blue lantern investigations has uncovered
cases where U.S. exports of military use items purportedly
ordered by Taiwan companies are shipped directly Pakistan
(ref b). AIT has also reported that fraudulent
(unauthorized) Taiwan EUCs are regularly used by companies in
China to export CWC-restricted chemicals to Taiwan (ref c.)
AIT/Econ believes something similar may be happening in this
case.

WANG