US embassy cable - 05TAIPEI3600

C O N F I D E N T I A L TAIPEI 003600 
 
SIPDIS 
 
DEPT FOR EAP/TC, EAP/EP, NP/ECC, NP/CBM 
DEPT PASS AIT/W 
 
E.O. 12958: DECL: 08/11/2015 
TAGS: ETTC, PARM, PINR, PREL, PTER, TW, IR, Foreign Policy, Counterterrorism/Nonproliferation, Military Issues, Trade 
SUBJECT: TAIWAN WILL FURTHER INVESTIGATE SUSPECT EXPORTS 
 
REF: STATE 157206 
 
Classified By: AIT Director Douglas Paal, Reason 1.4 b/d 
 
1.  (C) Summary:  AIT delivered reftel non-paper/talking 
points to the Bureau of Foreign Trade (BOFT) on August 26. 
AIT also delivered and explained the AIT-developed license 
template.  BOFT said it will further investigate the cases 
mentioned in the talking points. BOFT praised the template's 
"sophisticated design," and described efforts to conduct 
post-shipment checks through Taiwan offices in Iran.  End 
summary. 
 
2.  (C) AIT/ECON delivered reftel non-paper/talking points on 
Taiwan machine tool exports to Syria to BOFT Export Controls 
Task Force Head Wally Su on August 26.  AIT/ECON stressed the 
importance of requiring companies to know the end user of 
their products and asked for a clear explanation of what 
restrictions had been placed on the She Hong Company.  Su was 
unable to readily explain the restrictions placed on She 
Hong, or how Eumatech, an unregistered company, could 
continue to export machine tools to Syria, but said BOFT 
would investigate the cases further.  Su said he had asked 
Ecoma's General Manager Mr. Guo to travel from Taichung to 
Taipei to explain the company's contact with Iran after its 
commitment earlier this year not to have further dealing with 
that country.  Ecoma General Manager Guo said an Iranian 
company had approached Ecoma in May for a price quotation on 
machine tools, but no deal had been reached. 
 
3.  (C) Su told AIT he did not have any questions on the 
export/transit/re-export license template that AIT had 
designed and provided to BOFT.  He said it seemed 
"self-explanatory" and that his technical people had praised 
the template's "sophisticated design." 
 
4.  (C) Su also spoke of his efforts to conduct post-shipment 
verification in Iran through the Taiwan External Trade Office 
(TAITRA) in Tehran.  He said that he had asked TAITRA to 
investigate the Iranian companies which purchased the machine 
tools from Ecoma.  However, Su learned from TAITRA that many 
companies in Iran operate with a low public profile and 
routinely use invoice manipulation to keep import duties to a 
minimum.  As a result, TAITRA's investigation aroused 
suspicions, revealed little, and left the investigator 
fearing for his physical safety after making inquiries.  Su 
said TAITRA reported that Iran was making a major push to 
develop its automobile industry and estimated the potential 
market for car manufacturing equipment at USD 3 billion. 
TAITRA further reported that Germany had sold USD 1 billion 
worth of car manufacturing equipment to Iran in the past 
year. 
PAAL