P R 101817Z MAR 06
FM SECSTATE WASHDC
TO AMEMBASSY BEIJING PRIORITY
INFO MISSILE TECHNOLOGY CONTROL REGIME COLLECTIVE
AMEMBASSY ISLAMABAD
AMEMBASSY SEOUL

S E C R E T STATE 039514 
 
 
E.O. 12958: DECL: 03/10/2016 
TAGS: PARM PREL ETTC MTCRE KSCA CH KN KS PK
 
SUBJECT: MTAG: MISSILE-RELATED STEEL TO DPRK AND 
RING-ROLLING MACHINES TO PAKISTAN (S) 
 
REF: BEIJING 13327 
 
Classified By: ISN ACTING DAS DONALD A. MAHLEY FOR REASONS 1.4 
(B) AND (D). 
 
¶1.  (U) This is an action request, Embassy Beijing 
please see Para 6. 
 
¶2.  (S) BACKGROUND:  We want to bring information about 
additional potentially missile-related transfers to 
North Korea and Pakistan to China's attention.  First, 
in August 2005, we shared with the PRC information 
indicating that the Chinese entity Dandong Xinshidai 
Trading Company Ltd. shipped several tons of stainless 
steel in May and June 2005 to North Korea's primary 
weapons trader, the Korea Mining Development 
Corporation (KOMID)(Ref).  We now understand that, in 
July 2005, Dandong Xinshidai Trading Company may have 
shipped another order of 1CR18NI9TI steel to North 
Korea's Korea Kuelaksae Trading Company, which was 
likely acting on behalf of a procurement agent for 
KOMID. 
 
¶3.  (S) Second, we also want to advise Chinese 
authorities of new information indicating that, in July 
2005, other North Korean firms were engaged in similar 
efforts to procure missile-related specialty steels - 
1CR18NI9TI in particular - from Chinese companies. 
 
¶4.  (S) Although not controlled by the Missile 
Technology Control Regime (MTCR) or China's missile- 
related export controls, 1CR18NI9TI steel can be used 
in the production of Scud rocket motor combustion 
chambers and other missile components.  Considering the 
likely end-users of this material, we want to urge 
China to use its catch-all control authorities to 
ensure that the North Korean missile program does not 
obtain support from Chinese entities. 
 
¶5.  (S) Third, in a separate matter, we want to inform 
the Chinese government of our understanding that, in 
late October 2005, the Chinese firm Jinan JFMMRI Metal 
Forming Machinery Engineering Company, Ltd. (JFMMRI) 
was working to supply Pakistan's Heavy Mechanical 
Complex (HMC) with a ring-rolling machine.  Our 
information also indicates that this ring-rolling 
machine may be intended for use in Pakistan's missile 
program.  Although not controlled under the MTCR, ring- 
rolling machines can be used to produce stiffener rings 
for ballistic missile airframes.  They can also be used 
in conjunction with flow forming machines to 
manufacture solid rocket motor cases.  We want Chinese 
authorities to investigate this activity and to closely 
scrutinize all exports by JFMMRI to HMC to ensure that 
Chinese firms do not supply equipment that supports 
MTCR Category I missile programs in Pakistan. 
 
¶6.  (S) Action Request:  Department requests Embassy 
Beijing approach appropriate host government officials 
to deliver talking points in para 7 and report 
response.  Talking points also may be provided as a 
non-paper.  (Note:  Post should be aware that we only 
have the STC rendering for Dandong Xinshidai Trading 
Company.  End Note.) 
 
¶7.    (S) Begin talking points/non-paper: 
 
(SECRET//REL CHINA) 
 
-- In the spirit of our nonproliferation cooperation, 
we would like to raise with you several matters of 
proliferation concern and request your assistance in 
investigating this activity. 
 
-- First, in August 2005, the U.S. shared with you 
information that the Chinese firm Dandong Xinshidai 
Trading Company shipped several tons of stainless steel 
to North Korea in May and June 2005. 
 
-- Dandong Xinshidai Trading Company is located at No. 
272-2, Jiangcheng Dajie Yuanbao Qu, Dandong, Liaoning 
Province, China.  The standard telegraphic code (STC) 
for this company is the following:  0030 2639 2450 2514 
0108 6319 2496 2589 7098 0361 0674. 
 
-- This steel, known as 1CR18NI9TI steel, was being 
procured by a firm associated with North Korea's 
primary weapons trader, Korea Mining Development 
Corporation (KOMID), and could be used to produce Scud 
rocket motor combustion chambers and other Scud 
components. 
 
-- We now have information that Dandong Xinshidai 
Trading Company may have shipped another order of 
1CR18NI9TI steel to North Korea's Korea Kuelaksae 
Trading Company in July 2005. 
 
-- As with the May and June 2005 shipments, we believe 
that Kuelaksae Trading Company was purchasing this 
steel on behalf of the Korea Heungjin Trading Company, 
which acts as a procurement agent for KOMID. 
 
-- We hope this information will be useful to you in 
your ongoing investigation of Dandong Xinshidai Trading 
Company.  We would be interested to hear the results of 
this investigation, when completed. 
 
-- Second, we would like to provide you with 
information indicating that, in July 2005, other North 
Korean firms were engaged in similar efforts to procure 
missile-related specialty steels from Chinese 
companies. 
 
      -- North Korea's Lyongaksan 5 Trading Corporation 
      obtained a price quotation from the China Dalian 
      Yong Xing Trading Corporation for 1CR18NI9TI 
      stainless steel tubes and sheets.  Lyongaksan 5 
      may also use the name Korea Ryonbong General 
      Corporation, and is the trading arm of North 
      Korea's External Economic General Bureau of the 
      Second Economic Committee (China Dalian Yong Xing 
      Trading Corporation is located at: No 201-04, 174 
      Huale Street, Zhongsan District, China) 
 
      -- North Korea's Tosong Technology Trading 
      Company, which has also been associated with 
      KOMID, ordered 1CR18NI9TI stainless steels from 
      the China Shenyang Sigma Trading Company, Ltd 
      (China Shenyang Sigma Trading Company Ltd. is 
      located at: Room 112, No 63 Ningshanzhong Road, 
      Huanggu District, Shenyang, China) 
 
      -- the Korea Ryonhap Trading Association, an 
      entity subordinate to the Second Economic 
      Committee of the Korean Workers' Party Central 
      Committee, received a quotation for 1CR18NI9TI 
      stainless steel from China Shanghai Zhejiang 
      International Trading Company, Ltd. (Harcourt 
      Overseas Limited) (International Trading Company 
      address of China Shanghai Zhejiang Ltd. is: Room 
      1-501 Dongyuan Mansion, 2 Dashu Road, Hangzhou) 
 
      -- North Korea's Korea Tangun Trading Corporation 
      likely concluded a contract for 1CR18NI9TI sheets 
      and tubes with China's Liaoning Economic Xiang 
      Long and Trade Co. Ltd. 
 
-- KOMID, the Tosong Technology Trading Company and 
Korea Ryonbong General Corporation are all entities the 
U.S. has designated under the new Executive Order on 
proliferation financing for their direct involvement in 
North Korean missile proliferation. 
 
-- This steel may not be listed on the Missile 
Technology Control Regime (MTCR) Annex or on China's 
missile-related export control list, but we urge you to 
investigate this information and use your catch-all 
authorities to ensure that Chinese entities are not 
involved in supplying missile-related specialty steels 
to North Korea. 
 
-- Third and finally, the U.S. has information that, in 
late October 2005, the Chinese firm Jinan JFMMRI Metal 
Forming Machinery Engineering Company, Ltd. (JFMMRI) 
was working to supply Pakistan's Heavy Mechanical 
Complex (HMC) with a ring-rolling machine. 
 
-- HMC's purchase of this machine was being coordinated 
by another Chinese firm, Jinan Tri-Tiger Technology 
Development Company Ltd. 
 
-- This machine was to be shipped to Pakistan before 
October 2006. 
 
-- We believe this ring-rolling machine may be used in 
Pakistan's missile program. 
 
-- Although not MTCR-controlled, ring-rolling machines 
can be used to make stiffener rings for ballistic 
missile airframes. 
 
-- This ring-rolling machine may be used in conjunction 
with a flow-forming machine in the production of solid 
rocket motor cases.  We believe that in 2003 the 
Beijing Machinery Import-Export Corporation (BMIEC) 
acquired a flow forming machine. 
 
-- Flow forming machines, which are used to manufacture 
missile end-domes and nozzles, are controlled under the 
MTCR and China's missile-related export control list. 
 
-- Given Pakistan's previous willingness to evade 
China's export controls to procure such equipment, we 
hope you will investigate this information and closely 
scrutinize all exports by JFMMRI to HMC to ensure that 
Chinese firms do not provide equipment that supports 
Pakistan's MTCR Category I missile programs. 
 
-- We look forward to continued cooperation on missile 
nonproliferation matters and would appreciate hearing 
the results of your inquiries. 
 
END TALKING POINTS. 
 
¶8.  (U)  Please start response with "MTAG" and slug 
reporting on this or other missile nonproliferation 
issues for ISN/MTR and EAP/CM. 
RICE 
 
 
NNNN 
 



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