US embassy cable - 05MADRID3519

S E C R E T MADRID 003519 
 
SIPDIS 
 
DEPARTMENT FOR ISN/MTR (VAN DIEPEN AND DURHAM) AND EUR/WE 
 
E.O. 12958: DECL: 10/04/2015 
TAGS: PARM, PREL, PGOV, ETTC, SP, MTCR 
SUBJECT: SPAIN:  MFA REQUEST FOR U.S. HELP TO STOP SALE OF 
EXPLOSIVES PLANT TO LIBYA 
 
REF: FORDER-DURHAM EMAILS 
 
Classified By: ESTHOFF KEN FORDER PER 1.4 (B/D) 
 
1.  (U)  This is an Action Request for ISN/MTR -- see 
paragraph 8. 
 
2.  (S)  MFA Disarmament Affairs Ambassador Tomas 
Rodriguez-Pantoja summoned ESTHOFF September 30 to MFA. 
Rodriguez-Pantoja said that during the U.S.-Spain bilat on 
the first day of the September 12-16 Madrid MTCR plenary, and 
in a subsequent side bar meeting during a plenary Information 
Exchange session, Spain had raised with the ISN/MTR Office 
Director Van Diepen the request by the Spanish firm 
"Espinesa" to sell a Nitrate-based explosives manufacturing 
plant to Libya (allegedly for mining-related conventional 
explosives production). 
 
3.  (S)  Rodriguez-Pantoja explained that the Spanish firm 
first wanted to sell the explosives plant in 2000.  Spain 
checked with the U.S., which in May and September of 2001 
advised Spain to block the sale, arguing that the plant could 
easily be converted into a missile fuel production facility 
for Libya's SCUD missiles.   Spain eventually turned off the 
sale, prohibiting it for a period of three years. 
Rodriguez-Pantoja said the company had sued the GOS after it 
blocked the sale in 2001, and that this suit remained pending 
in the Spanish courts.  All the while, the entire plant has 
been sitting in a Valencia warehouse waiting to be sold. 
 
4.  (S)  Rodriguez-Pantoja noted that the GOS three year sale 
moratorium had now expired and that in the meantime, Libya 
had started to return to the "normal" community of nations 
(leaving "rogue" status behind).  "Espinesa" recently asked 
the GOS for permission to make the same sale to Libya, 
arguing that the three year ban had expired and Libya was now 
a friendly and cooperative country.  Rodriguez-Pantoja said 
the Libyan Government had leaned very heavily on the Spanish 
Embassy in Tripoli, requesting repeatedly that Spain let the 
sale go through. 
 
5.  (S)  MFA, according to Rodriguez-Pantoja, does not/not 
think the sale should go through.  Neither does the CNA (the 
Spanish CIA equivalent).  Both argue that while the current 
Libyan Government may have changed its spots, a coup could 
happen any day and a less friendly/responsible Libyan regime 
could emerge.  Rodriguez-Pantoja stressed that Libya retains 
400 medium range SCUDs with the ability to strike Israel and 
that this explosives plant could easily be converted from 
producing mining explosives into producing SCUD missile fuel. 
  Thus, MFA and CNA want to extend the sales band to 2008 
(three more years).  However, the Libyan lobbying of the 
Spanish Embassy, as well as pressure from the company, has 
led the GOS to reopen the issue. 
 
6.  (S)  The reason for summoning ESTHOFF to MFA, 
Rodriguez-Pantoja explained, was to request U.S. support for 
MFA/CNA efforts to continue to block the sale. 
Rodriguez-Pantoja said that if the U.S. were to officially 
informed Madrid that it opposed the sale, this would 
strengthen MFA's case to extend the sales ban through 2008. 
In brief, MFA and CNA want the USG as bureaucratic allies in 
their battle to gain GOS approval to prohibit the sale for 
three more years. 
 
7.  (S)  Rodriguez-Pantoja said that ISN/MTR Office Director 
Van Diepen had indicated to him at the plenary that the U.S. 
would likely oppose the sale, but would have to confirm this 
after Van Diepen's return to Washington.  Rodriguez-Pantoja 
said he was now, via this meeting, requesting an official 
communication of USG views on the sale.  Either in writing or 
delivered orally through ESTHOFF would be acceptable. 
Rodriguez-Pantoja said the communication could also go 
through CIA-CNA channels if the U.S. preferred.  He said he 
would like to have this communication by Friday October 14, 
if possible.  He suggested that internal GOS decision 
meetings regarding the sale would take place shortly after 
that date.  ESTHOFF told Rodriguez-Pantoja that he was 
optimistic that the Embassy would be able to pass USG views 
on the sale prior to October 14. 
 
8.  (U)  ACTION REQUEST - please pass USG views on this 
possible sale to Embassy Madrid ESTHOFF Ken Forder prior to 
MFA's October 14 deadline. 
AGUIRRE