US embassy cable - 05PRAGUE1363

S E C R E T PRAGUE 001363 
 
SIPDIS 
 
NOFORN 
 
EUR/NCE FOR FICHTE, PM/RSAT FOR BOCKLAGE 
 
E.O. 12958: DECL: 09/01/2015 
TAGS: ETTC, EZ, KSTC, PARM, PREL, PK 
SUBJECT: CZECHS LICENSE A ONE-YEAR VERA SYSTEM LOAN TO 
PAKISTAN 
 
REF: A. 04 PRAGUE 1235 
     B. 04 STATE 212634 
     C. 04 PRAGUE 1870 
     D. PRAGUE 106 
     E. PRAGUE 313 
     F. PRAGUE 892 
     G. PRAGUE 1104 
     H. PRAGUE 1146 
     I. PRAGUE 1252 
     J. 04 PRAGUE 523 
 
Classified By: Political-Military Officer Brian Greaney 
 for reasons 1.4 (b) and (d) 
 
1) (S) Czech News agency CTK late September 20 reported the 
Ministry of Industry and Trade has licensed a lease of the 
VERA passive surveillance system to Pakistan. This 
information is slightly different from that previously 
provided by GOCR sources, which maintained the proposed 
transfer was a one-year loan, rather than a lease. According 
to previous discussions with the MFA, the unit would have to 
be returned to the Czech Republic, even if Pakistan decides 
to purchase a system. A sale to Pakistan would require a new 
license application. A history of the circumstances 
surrounding this deal can be found in Refs A-I. 
 
2) (S) While following up on the news story with the Ministry 
of Industry and Trade, Post learned that the license was 
quietly issued Sep 12th. The Ministry's head of licensing Sep 
21st told us he was unhappy that the matter had become 
public. Under the Czech export-control system, the issuance 
of a license ends the Czech Governmental involvement in a 
deal, unless there are some conditions added to the license 
that require further government oversight.  Examples of these 
would be inspections or proof that nonproliferation measures 
have been added to a system. The MFA had insisted that such 
conditions be part of any issuance of a license to Pakistan. 
Embassy Prague is seeking details of the final conditions 
that were imposed. 
 
3) (S) In 2004, when the GOCR approved a license for the 
export of the VERA to China it took high level U.S. 
intervention to convince then PM Spidla to intervene and 
prevent the sale (REF J). That event was politically damaging 
to Spidla, despite the GOCR's public statement that the 
intervention was actually based on the EU's China arms 
embargo. PM Paroubek, facing elections next year, is not 
likely to be keen to block a Pakistan deal. 
DODMAN