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DE RUEHC #1150 2721349
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TO AMEMBASSY PARIS PRIORITY 0000
INFO MISSILE TECHNOLOGY CONTROL REGIME COLLECTIVE

S E C R E T STATE 101150 
 
SIPDIS 
PARIS FOR POL: NOAH HARDIE 
BRASILIA FOR POL: JOHN ERATH 
 
E.O. 12958: DECL: 09/29/2034 
TAGS: MTCRE ETTC KSCA MNUC PARM TSPA FR BR
SUBJECT: MISSILE TECHNOLOGY CONTROL REGIME (MTCR): 
MARITIME SHIPPING TRENDS OF CONTROLLED MATERIALS 2008-2009 
 
Classified By: ISN/MTR Director Pam Durham. 
Reasons:  1.4 (B), (D), (H). 
 
¶1. (U)  This is an action request.  Please see paragraph 2. 
 
¶2. (C)  ACTION REQUEST:  Department requests Embassy Paris 
provide the interagency cleared paper "Maritime Shipping 
Trends Of Controlled Materials 2008-2009" in paragraph 3 
below 
to the French Missile Technology Control Regime (MTCR) Point 
of Contact (POC) for distribution to all Partners.  Info 
addressees also may provide to host government officials as 
appropriate.  In delivering paper, posts should indicate that 
the U.S. is sharing this paper as part of our preparation for 
the Information Exchange that will be held in conjunction 
with 
the MTCR Plenary in Rio, November 9-13, 2009.  NOTE: 
Additional IE papers will be provided via septels.  END NOTE. 
 
¶3. BEGIN TEXT OF PAPER: 
 
(SECRET REL MTCR) 
 
Maritime Shipping Trends Of Controlled Materials 2008-2009 
 
SUMMARY 
 
      Over the past year, proliferators have continued to use 
the maritime transportation industry to move export-controlled 
components and non-controlled dual-use materials to their 
ballistic missile programs. 
 
      Maritime shipping can represent a significant cost 
savings to shippers, especially in the transport of large or 
heavy materials.  This savings can easily offset the negatives 
and vulnerabilities of maritime conveyance, which is slow and 
represents a loss of control over the shipment for an extended 
period of time, not to mention exposure to seizure by local 
authorities during transshipment or intermediate port calls, 
and potential damage due to weather or rough seas. 
 
      Numerous proliferators exploit the flexibility, speed, 
and perceived anonymity of the intermodal, or containerized, 
shipping system.  However, direct point-to-point shipments 
continue to fill a key niche in the delivery of sensitive 
goods. 
 
      To enhance the security of their goods as they are 
transported, proliferators often resort to denial and 
deception methods to hide the true end-users or identity of 
cargoes.  The primary method used is a false or misleading 
description of goods on key shipping documents such as bills 
of lading (BOLs), cargo manifests, and letters of credit.  In 
addition, ships engaged in point-to-point shipments of 
proliferation concern have been known to change their 
operations in order to disguise not just the cargo, but the 
ship,s destination as well as the ship itself. 
 
INTERNATIONAL INTERMODAL SHIPPING 
 
      The containerization of cargoes has been a growing trend 
in the shipping industry for decades.  Under this method, 
cargoes are loaded into standardized metal shipping containers 
of twenty or forty feet in length.  This standardization 
increases the speed at which cargoes may be loaded and 
unloaded in port.  Additionally, the use of containers 
provides a greater degree of superficial anonymity to cargoes: 
to the on-the-scene observer in a port, a containerized 
shipment of electronics looks identical to a containerized 
shipment of scrap paper.  This perceived anonymity, magnified 
by the sheer volume of containers, has been exploited by all 
kinds of nefarious actors, from narcotics smugglers to human 
traffickers to proliferators. 
 
      Containerized shipping also offers the proliferator 
potential cost-effectiveness over point-to-point shipments. 
On the other hand, containerized shipping leaves a 
proliferation-related cargo vulnerable in many ways.  The 
global intermodal shipping industry relies heavily on a hub- 
and-spoke system to move cargo from smaller ports using 
smaller feeder vessels to larger ports, where cargoes are 
consolidated onto larger ships.  This system, which provides 
efficiencies and economies to the shipping industry itself, 
can sometimes result in a longer voyage than a direct point- 
to-point delivery would take.  As a cargo awaits transshipment 
in a hub port, it presents opportunities for inspection or 
detention of suspect cargoes as allowed by national or 
international authorities. 
 
IRAN 
 
      Iran continues to use its Islamic Republic of Iran 
Shipping Lines (IRISL) for the delivery of ballistic missile- 
related materials.  Owned in part by the Iranian government, 
IRISL has long been Iran,s preferred maritime carrier for 
sensitive shipments.  IRISL offers both containerized 
services, which provide convenience, speed, and cost benefits, 
as well as a fleet capable of point-to-point deliveries.  As 
an Iranian-owned line, IRISL provides an additional layer of 
national control over shipments in transit. 
 
      However, IRISL is not the only provider of shipping 
services to Iran.  Approximately 25 lines offer 27 
containerized liner services that call directly at Bandar 
Abbas, Iran,s primary commercial port.  Iran has used foreign 
shipping lines, including those owned by MTCR Partner states, 
to deliver materials for its ballistic missile program.  We 
believe that IRISL remains a preferred carrier for most 
sensitive shipments, but the use of third country carriers to 
deliver controlled items to Iran does occur. 
 
      Iran prefers to use IRISL for point-to-point deliveries 
of missile-related breakbulk cargoes.  However, post-sanctions 
measures taken by IRISL to use non-Iranian chartered vessels 
may indicate a new method to mask imports of proliferation- 
related items.  This was demonstrated in early 2009 in the 
case of the M/V MONCHEGORSK, a Cypriot-flagged cargo ship 
carrying conventional military cargo from Iran to Syria in 
violation of United Nations Security Council Resolution 
(UNSCR) 1747. 
 
NORTH KOREA 
 
      North Korea receives containerized shipments of missile- 
related materials and also probably uses the international 
containerized intermodal transportation system for the export 
and delivery of dual-use missile-related components to its 
customers.  As practically no international shipping lines 
call in North Korean ports, these cargoes must be 
transshipped, most likely through ports in northern China. 
North Korea maintains its own fleet of cargo ships, which are 
capable of running regional feeder services to conduct final 
delivery of goods to North Korea.  This fleet is also capable 
of conducting point-to-point deliveries of ballistic missile- 
related materials to North Korean customers in the Middle 
East, as well as to North Korea itself. 
 
SYRIA 
 
      Without a substantial shipping fleet of its own, Syria 
largely relies on the intermodal shipping system for 
deliveries of MTCR-controlled and uncontrolled materials for 
its missile program.  Lattakia is Syria,s primary commercial 
port, and receives the majority of its containerized cargoes, 
both for import and export.  Since few lines call directly in 
Syrian ports, most of these shipments must be transshipped in 
the Mediterranean to a feeder vessel before final delivery. 
The most frequently used ports for transshipment of commercial 
cargoes to Syria are Limassol, Cyprus; Damietta, Egypt; and 
Marsaxlokk, Malta.  Proliferation-related cargoes using the 
intermodal system probably transit these ports along with the 
flow of commercial cargoes. 
 
DECEPTION TECHNIQUES 
 
      Moving goods through the international intermodal system 
exposes them to potential scrutiny.  Numerous parties, from 
customs officers to port officials to bankers, review the 
paperwork associated with exporting, paying for, loading, 
transshipping, and delivering cargoes.  As a result, 
proliferators using the intermodal shipping system frequently 
employ deceptive practices to evade detection.  In addition to 
using false end-users and listing front companies as 
recipients, shippers of proliferation-related cargoes also 
frequently alter the description of the cargo in order to 
disguise the controlled nature of the goods.  This practice is 
not unusual in the shipping industry, where unscrupulous 
customers will often falsify the contents of the containers on 
the bill of lading and the shipping documentation, usually in 
order to evade tariffs, but also to disguise illicit goods. 
 
      Other practices common in the shipping industry, such as 
generalized cargo descriptions, also may obscure the nature of 
the items actually being shipped.  A five-axis CNC machine, 
for example, might be described as merely "machinery" on the 
bill of lading and the ship,s cargo manifest.  These methods 
have been steadily embraced by proliferators, and the use of 
this practice remained constant in the 2008 to 2009 period. 
Additionally, it remains acceptable in many regions to 
describe cargoes merely as "freight of all kinds" or "general 
cargo." 
 
      Other shipping documents may also be vulnerable to 
deception efforts.  For example, bills of lading may use 
incorrect ship names or have duplicates issued so as to avoid 
detection when reviewed by the bank.  IRISL, for example, has 
changed the names of many of its cargo ships in a probable 
attempt to avoid association with the sanctioned entity 
"IRISL." 
 
      Observed deception techniques in a point-to-point 
shipment involve not only false declarations on shipping 
paperwork, but also changes in the way ships carrying these 
cargoes are operated.    In the industry, it is not unusual 
for a breakbulk ship to change its declared destination mid- 
voyage for a commercial reason.  When a ship disguises a 
sensitive voyage to deliver proliferation-related materials, 
it can deliberately lie about its destination and next port of 
call to port authorities, and still fit within the norms of 
the industry. 
 
      Ships attempting to avoid detection may also turn off 
standard navigation and safety equipment, such as the 
Automated Identification Systems (AIS).  AIS is an automated 
anti-collision broadcast system similar to an airplane 
transponder.  The use of AIS is mandated on ships over 300 
gross tons engaged in international trade.  Turning off this 
system is counter to the requirements of the United Nations 
Convention on the Safety of Life At Sea Convention (SOLAS), 
and outside of the typical norms of the shipping industry. 
While SOLAS does allow for ship masters to turn off their AIS 
systems in the event the master feels that emitting a signal 
would expose the ship to potential safety threats, turning off 
the system outside of the most pirate-infested areas of the 
world,s shipping lanes is not typical practice. 
 
      These changes in operations are rarely seen in the 
shipment of goods via container services.  The containerized 
sector of the shipping industry relies heavily on published 
schedules and rigidly timed port rotations.  If a ship on a 
container service were to deviate from its declared or 
scheduled port, this would be considered highly unusual by 
industry standards.  Additionally, the shipping line would 
incur significant expenses by diverting or changing its port 
calls at the last minute, as its customers would likely seek 
compensation for any delays in the delivery of their cargoes. 
In any case, container ships can carry hundreds or even 
thousands of containers onboard.  Because of the volume of 
containers on a ship, the master and crew are rarely aware of 
the presence of proliferation-relevant materials on their 
ships - especially if the goods are falsely described on the 
BOL and manifest. 
 
CONCLUSION 
 
      Maritime transportation remains a key method of moving 
controlled and non-controlled materials for proliferant 
missile programs.  Programs of concern continue to rely 
heavily on the international intermodal system.  Since the 
intermodal system can involve many nations - through the 
involvement of ships under differing national flags or 
ownerships as well as transshipment ports - use of this system 
can create opportunities for MTCR countries to act against the 
proliferation of ballistic missile-related materials.  We urge 
Partner countries to exercise vigilance against the 
exploitation of their ports, flags, and ships for the use of 
shipment of proliferation-related items. 
 
END TEXT OF PAPER. 
 
¶4.  (U)  Please slug any reporting on this or other MTCR 
issues for ISN/MTR.   A word version of this document will be 
posted at www.state.sgov.gov/demarche. 
CLINTON