US embassy cable - 02STATE53501

S E C R E T STATE 053501 
 
E.O. 12958: DECL: X1, X5 
TAGS: PARM, PREL, CH, IR 
SUBJECT: CW PROLIFERATION DEMARCHE: IRANIAN ORDER FOR 
LARGE QUANTITY OF CHEMICAL EQUIPMENT FROM CHINA (S) 
 
CLASSIFIED BY: EAP DAS DONALD W. KEYSER. REASON: 1.5(B,C,D)X1, X5 
 
1. (S) BACKGROUND: DURING MISSILE NONPROLIFERATION TALKS ON 
MARCH 6 IN WASHINGTON, CHINA'S MFA ARMS CONTROL AND 
DISARMAMENT DIRECTOR GENERAL LIU JIEYI TOLD NP A/S WOLF THAT 
CHINA WAS TAKING SEVERAL, SIGNIFICANT NEW STEPS TO TIGHTEN 
CHINA'S NUCLEAR, CHEMICAL, AND BIOLOGICAL EXPORT REGULATIONS, 
INCLUDING HAVING INTERIM CONTROLS COVERING ALL ITEMS ON THE 
AUSTRALIA GROUP (AG) CONTROL LIST IN PLACE BY THE END OF 
MARCH. 
 
2. (S) THIS IS WELCOME ACTION THAT WE WANT TO ENCOURAGE. WE 
ALSO WANT TO UNDERSCORE THE NEED FOR EFFECTIVE ENFORCEMENT OF 
THESE CONTROLS, AND RAISE OUR CONCERNS ABOUT IRANIAN ENTITIES 
SEEKING DUAL-USE CHEMICAL EQUIPMENT FROM CHINA. IN 
PARTICULAR, INFORMATION EXISTS THAT THE IRANIANS HAVE 
APPROACHED TWO CHINESE FIRMS -- ZIBO CHEMET EQUIPMENT PLANT, 
ALSO KNOWN AS ZIBO CHEMICAL EQUIPMENT PLANT (ZCEP), AND 
LIAOYANG PHARMACEUTICAL MACHINERY IMPORT AND EXPORT (LPMIE) 
-- FOR LARGE QUANTITIES OF DUAL-USE CHEMICAL EQUIPMENT. WE 
WANT CHINA TO INVESTIGATE THIS CASE AND TAKE STEPS TO PREVENT 
THE TRANSFER. 
 
2. (C) ACTION REQUEST: DEPARTMENT REQUESTS POST CONVEY THE 
POINTS IN PARA 3 TO THE APPROPRIATE HOST GOVERNMENT 
OFFICIALS. 
 
3. (S - REL CHINA) BEGIN TALKING POINTS. 
-- WE LOOK FORWARD TO YOUR GOVERNMENT'S PUBLICATION AND 
ENFORCEMENT OF AN INTERIM MEASURE CONTROLLING ALL ITEMS 
LISTED IN THE AUSTRALIA GROUP LISTS. THESE MEASURES WILL 
HELP PREVENT THE SPREAD OF WEAPONS OF MASS DESTRUCTION THAT 
POSE A THREAT TO THE CITIZENS OF OUR TWO COUNTRIES. 
 
-- WE ARE ESPECIALLY CONCERNED ABOUT THE DEVELOPMENT OF 
CHEMICAL WEAPONS AND OTHER WEAPONS OF MASS DESTRUCTION BY 
STATE SPONSORS OF TERRORISM SUCH AS IRAN. 
 
-- IRAN HAS ACKNOWLEDGED ITS PAST DEVELOPMENT OF CHEMICAL 
WEAPONS. IRAN ALSO HAS CONTINUED ITS EFFORTS TO SEEK 
DUAL-USE PRODUCTION TECHNOLOGY, EXPERTISE, AND PRECURSOR 
CHEMICALS FROM CHINESE ENTITIES. THIS ASSISTANCE COULD BE 
USED TO CREATE A MORE ADVANCED AND SELF-SUFFICIENT CHEMICAL 
WARFARE INFRASTRUCTURE. 
 
-- IN PARTICULAR, WE HAVE INFORMATION THAT IRAN IS SEEKING TO 
PROCURE LARGE QUANTITIES OF AUSTRALIA GROUP-CONTROLLED, 
DUAL-USE CHEMICAL EQUIPMENT FROM CHINESE COMPANIES. 
SPECIFICALLY, IRANIAN FIRMS HAVE APPROACHED THE CHINESE FIRM 
ZIBO CHEMET EQUIPMENT PLANT -- ALSO KNOWN AS ZIBO CHEMICAL 
EQUIPMENT PLANT (ZCEP) -- AND LIAOYANG PHARMACEUTICAL 
MACHINERY IMPORT AND EXPORT (LPMIE). WE BELIEVE THAT IRAN 
HAS ACTED THROUGH LPMIE'S SALES REPRESENTATIVE IN IRAN, ARYA 
FOREIGN TRADE CORPORATION. 
 
-- THE FACT THAT IRAN IS SEEKING SUCH A LARGE QUANTITY OF 
GLASS-LINED CHEMICAL PROCESSING EQUIPMENT RAISES SERIOUS 
CONCERNS THAT THE EQUIPMENT IS NOT FOR LEGITIMATE PURPOSES, 
BUT IN FACT WILL BE DIVERTED TO IRAN'S OFFENSIVE CHEMICAL 
WEAPONS PROGRAM. 
 
-- WE URGE CHINA TO INVESTIGATE THIS MATTER AND TAKE ALL 
NECESSARY STEPS TO STOP THIS TRANSACTION FROM OCCURRING AND 
PREVENT CHINESE ENTITIES FROM CONTRIBUTING EVEN INADVERTENTLY 
TO IRAN'S CHEMICAL WEAPONS PROGRAM. AS A STATE PARTY TO THE 
CHEMICAL WEAPONS CONVENTION, CHINA HAS AN INTERNATIONAL LEGAL 
OBLIGATION NOT TO ASSIST ANYONE, IN ANY WAY, IN CHEMICAL 
WEAPONS ACTIVITIES. 
 
-- WE LOOK FORWARD TO HEARING THE RESULTS OF YOUR 
INVESTIGATION. 
END POINTS. 
 
4. (C) PLEASE SLUG REPLIES FOR NP/CBM, EAP/CM, AND INR/SPM. 
POWELL