This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 07 PARIS 004219 
 
SIPDIS 
 
STATE FOR ISN/CB, INR, EUR, EAP, EUR/WE 
DEPARTMENT PLEASE PASS TO AUSTRALIA GROUP COLLECTIVE 
 
E.O. 12958: DECL: 06/16/2016 
TAGS: PARM PREL ETTC AS FR CBW
SUBJECT: AUSTRALIA GROUP 2006 PLENARY MEETING, PARIS, JUNE 
12 - 15, 2006 
 
REF: A. 2005 SYDNEY 534 
     ¶B. 2005 SYDNEY 535 
 
Classified By: ESTH/NP COUNSELOR ROBERT W. DRY FOR REASONS 1.4 (B) (D) 
(E) AND (H). 
 
------- 
SUMMARY 
------- 
 
¶1.  (SBU)  The Australia Group (AG) plenary continued 
strengthening the Regime,s nonproliferation and export 
control tools.  Highlights included: 
 
-- Agreement to the U.S. proposal to add three biological 
agents to the control list; 
 
-- Agreement to add chemical processing equipment made from 
niobium and niobium alloys to the chemical equipment control 
list; 
 
-- Agreement to move to a secure web-based information system; 
 
-- Broad support for Croatian membership, but deferral of a 
decision until 2007; 
 
-- Acknowledgement of Russia,s interest in AG membership, 
but expression of serious concerns about Russian treaty 
compliance and export controls; 
 
-- Agreement to continue with enhancements to the AG website 
as initially agreed in 2005; 
 
-- Fulsome information (intelligence) and enforcement experts 
exchanges that reinforced the need for continued AG action on 
emerging technologies.  End summary. 
 
¶2.  (U)  The Australia Group Plenary was held in Paris, June 
12-15.  The meeting consisted of an opening Plenary Session, 
an Implementation Meeting, Information Exchange, Enforcement 
Officer,s meeting, and a closing Plenary Session. 
 
------------------------- 
(U)  CHAIR,S INTRODUCTION 
------------------------- 
 
¶3.  (SBU)  Australia Group Chair John Sullivan identified the 
AG,s commitment to UN Security Council 1540, the desire for 
strong information, export, and enforcement components of the 
Plenary, and a focus on biological security and intangible 
technology as the key areas for this year,s meeting. 
 
--------------------- 
(U)  PLENARY SESSIONS 
--------------------- 
 
¶4.  (C)  Opening Statements.  Ukraine made an opening 
statement expressing its strong commitment to AG 
nonproliferation commitments.  The United States made an 
opening statement outlining U.S. priorities for the Plenary. 
In addition, del thanked Australia for all their efforts 
related to the AG, as well as the former U.S. head of 
delegation Vann Van Diepen for contributions made over a 
number of years. 
 
¶5.  (SBU)  Australia Group and International Conventions. 
The Netherlands presented a paper on the activities of the 
Organization for the Prohibition of Chemical Weapons (OPCW). 
Specifically, it noted the slow progress on of chemical 
weapons (CW) destruction, the one year extension of the 
Action Plan for National Implementation, improvement in the 
area of universality, limited progress in industrial issues, 
a new facilitation to design a payment mechanism for 
countries in arrears, discussion on a temporary office of the 
OPCW in Africa, the first annual Remembrance Day for all 
victims of chemical weapons attacks, preparations for the 
tenth anniversary of the OPCW in 2007, and the beginning of 
preparations for the second Review Conference in 2008.  The 
UK made a presentation on actions taken over the past year 
under the Biological Weapons Convention,s Program of Work, 
including the third meeting of experts, the third annual 
meeting, and the preparatory committee meeting. 
 
¶6.  (C)  Membership. 
 
¶A.  Croatian Membership.  The Plenary welcomed Croatia,s 
membership application, noted Croatia,s commitment to 
international nonproliferation efforts, and pledged to assist 
Croatia to strengthen some aspects of its export control 
system.  While not yet in a position to approve Croatia,s 
membership application, the Group looked forward to Croatia 
becoming a member in the near future.  (Comment:  U.S. del 
coordinated closely with the EU and other key dels on this 
issue. EU Presidency rep pointed out that the EU statement 
called only for membership in the near future, not this year. 
 Del received no/no criticism for the U.S. position that 
Croatia is not quite ready.  End comment.) 
¶B.  Russian Membership.  AG members noted that while Russia 
was an important supplier country of AG controlled items, 
there are significant gaps in its export control system and 
ongoing questions regarding its compliance with the CWC and 
BWC.  Several countries indicated their intention to continue 
bilateral work with Russia.  Specifically, Canada indicated 
that the time was not yet right for Russian membership in the 
AG and stated that it is willing to work with Russia on 
enforcement controls as well as in the context of the Global 
Partnership.  Japan stated that it was premature to discuss 
Russian membership as they have not yet submitted an 
application to the Group; however Japan does not believe 
Russia has fully implemented its CWC and BWC commitments and 
are concerned with Russian CBW export controls and 
enforcement capability.  Germany welcomed Russia,s desire to 
comply with its CBW nonproliferation commitments and believes 
that the effectiveness of the regime would be improved by 
Russian membership only if Russia was committed to being an 
effective player.  (Comment:  In the information exchange 
(see septel) the UK was very critical of Russian compliance 
and export control performance.  In informal discussions, a 
number of delegates who also attend MTCR, NSG and Wassenaar 
meetings were highly critical of Russian behavior in those 
meetings.  In summary, U.S. position opposing Russian 
membership was in the mainstream.  End comment.) 
 
¶C.  Interest by other states.  The Chair advised the group of 
Chile,s intention to submit a formal application to join the 
AG in the near future. 
 
¶7.  (SBU)  Strengthened Outreach.  The Plenary endorsed the 
Chair,s report on outreach activities and noted requests 
from Cambodia, Hong Kong, Serbia and Montenegro, and Taiwan 
for export control assistance.  The Plenary noted the 
Chair,s report on outreach activities to Singapore and the 
UAE, as well as plans to conduct outreach to Thailand, Israel 
and South Africa in 2006.  In addition, in light of 
Croatia,s desire for AG membership, the Group agreed to 
conduct outreach to Croatia.  Canada indicated its 
willingness to undertake outreach to countries of the former 
Soviet Union.  AG members reported on their own outreach 
activities: 
 
¶A.  The EU provided an update on its CW, BW, and UNSCR 1540 
joint action. 
 
¶B.  Japan briefed on its activities over the last year and 
focus on assistance in East Asia as well as its CWC/BWC 
universality outreach efforts. 
 
¶C.  Korea indicated that it plans to hold a transshipment 
seminar in Thailand in July. 
 
¶D.  The U.S. flagged its outreach efforts and distributed a 
paper highlighting its outreach assistance. 
 
¶E.  Canada briefed on its work with the G-8 Global 
Partnership program and efforts relevant to the AG. 
 
¶F.  Argentina briefed and circulated a paper on its recent 
UNSCR 1540-related seminar. 
 
¶8.  (C)  Regional Nonproliferation 
 
¶A.  Asia-Pacific Regional Action Plan.  Australia briefed on 
its outreach activities since the last Plenary, in Vietnam, 
Malaysia, Cambodia, and the Philippines under the 
Asia-Pacific Regional Action Plan.  Australia has continued 
to undertake scoping visits and tailor the assistance and 
training offered to best meet the needs of the target country. 
 
¶B.  Balkans Regional Action Plan.  Hungary and Bulgaria 
reported on three seminars organized since the last Plenary 
in Budapest and Sofia under the Bulgarian-Hungarian Regional 
Action Plan for Western Balkan Countries.  The seminars 
focused on the legislative and administrative aspects of 
dual-use export controls, specialized training for border 
customs officers, and industry outreach issues. 
 
¶9.  (C)  Strengthening and Maintaining the Australia Group. 
 
¶A.  Amendment to the AG Guidelines.  The Plenary welcomed the 
proposal to amend the AG Guidelines to incorporate 
consideration of the role of distributors, brokers, or other 
intermediaries when evaluating export license applications. 
Germany, Switzerland, the Netherlands, and the ROK indicated 
a need to discuss this issue further during the 
intersessional period and suggested that the issue be 
revisited during the upcoming ROK brokering seminar in July. 
 
¶B.  Interaction with UNSCR 1540 Committee.  The Plenary 
agreed to enhance the Group,s contacts with the UNSCR 1540 
Committee and noted that future contact could usefully 
include a technical briefing by the Group to the Committee. 
 
¶C.  AG Information System.  The Plenary agreed to move to a 
secure web-based information system and agreed to a proposed 
cut-over day of 30 September for the distribution of all 
unclassified and AG-In-Confidence documents. 
 
SIPDIS 
¶D.  AG website.  The Plenary agreed in principle to proceed 
with enhancements to the AG website, taking into account any 
content-related concerns by delegations.  The Chair indicated 
that it would welcome any assistance with portions of the 
website and welcomed the translation of the website into 
Arabic, Russian, and Chinese. 
¶E.  AG Trust Fund.  The Plenary endorsed the Chair,s request 
to use funds contributed to the AG by other members for 
continued website enhancement, updating website software, and 
production of an updated AG brochure. 
 
¶F.  Inter-regime cooperation.  The Plenary noted that while 
outcomes of these meetings had been limited, interaction 
between the regimes was a valuable mechanism to share 
information on meeting dates, outreach activities, and themes 
of common relevance. 
 
----------------------- 
IMPLEMENTATION MEETING 
----------------------- 
 
¶10.  (C)  Chemical Issues 
 
¶A.   Factors for Consideration.  The Plenary did not reach 
consensus on the proposal on &Factors for Consideration for 
the Addition of Chemicals to the Australia Group Control 
List8 (AG/May06/CL/GB/26 & AG/May06/CL/CH/5).  The U.S. 
supported the paper, noting that arms controls and 
nonproliferation controls must evolve as the threat evolves 
and the U.S. welcomes the UK/Swiss proposal as a 
non-prescriptive approach.   Germany also supported the 
paper, but both France and Australia expressed concerns.   On 
the margins, Australia met with the U.S. delegation to 
request support for merging the existing factors for 
consideration (AG/Dec92/ExC/GB/16) and those proposed by the 
UK and Switzerland.  Additionally, France proposed a revised 
draft for U.S. consideration.  In a meeting on the margins, 
deloff noted particular concerns with the revised French 
proposal and recommended France work with the UK and 
Switzerland to develop a new draft to be considered by the 
group intersessionally. 
 
¶B.  (SBU) Niobium.  The Plenary agreed to add &niobium 
(columbium) and niobium alloys8 to the list of materials of 
construction for chemical production equipment that contain 
&tantalum, titanium or zirconium, or their alloys8 
(AG/May06/CL/GB/27).   Specifically, the Plenary agreed to 
amend to the AG,s common control list for chemical 
manufacturing facilities and equipment to add &niobium 
(columbium) or niobium alloys8 as materials of construction 
to controls on reaction vessels or reactors as a.8, to 
agitators as b.8, to storage tanks, containers or receivers 
as c.8, to heat exchangers or condensers as d.11, to valves 
as g.8, to multi-walled piping as h.9, and to pumps as i.11. 
 
¶C.  (C)  Microreactors.  The U.S. distributed an information 
paper on microreactors (AG/Jun06/Inf/USA/3).  On the margins 
of the implementation meeting, deloff spoke with members of 
the German Delegation and asked them to convey the U.S. Paper 
on microreactors to their respective technical experts and 
forward any comments to the U.S. 
 
¶11.  (C)  Biological Issues 
 
¶A.  Biological list additions.  The Plenary agreed to the 
revised U.S. proposal to add (1) Coccidiodides immitis, (2) 
Coccidioides posadasii, and to revise the verotoxin entry to 
read (3) verotoxin and shiga-like ribosome inactivating 
proteins to the AG,s Common Control List 
(AG/Jun06/CL/USA/11).  This agreement resulted from intensive 
intersessional deliberation by the Biological Agents Working 
Group on the USG proposal to add 23 U.S. domestically 
controlled, &Select Agents8 (AG/Mar05/CL/USA/8).  The 
working group was chaired by USA and had representatives from 
Argentina, Australia, Canada, the E.C., France, Germany, 
Japan, Netherlands, Norway, South Korea, Spain, Sweden, 
Switzerland, and the UK. 
 
¶B.  Clarification of entry for Mycoplasma mycoides. 
Consensus was not reached on the UK proposal to clarify the 
existing entry on the Common Control List for Mycoplasma 
mycoides (AG/May06/CL/GB/25).  France expressed concern with 
the proposal, consistent with its position during the 
Biological Agents Working Group.  Inexplicably, France 
indicated that it could support the addition of two members 
of the Mycoplasma mycoides phylogenetic cluster, namely 
Mycoplasma mycoides subspecies mycoides SC (small colony) and 
Mycoplasma capricolum subspecies capripneumoniae, type strain 
F38.  (Comment:  France did not support these agents during 
consideration of AG/Mar05/CL/USA/8.)  The UK agreed to work 
intersessionally with France. 
 
¶C.  Fertilized egg technology.  The UK briefed on fertilized 
egg technology to raise awareness by the Group on the 
potential for misuse of large numbers of fertilized eggs as 
growth media for viruses with BW applications.  Large numbers 
of these eggs are exported to Iran, the DPRK, and Syria 
annually. 
 
¶D.  Addition of oligonucleotides to the &Genetic Elements8 
language.  The Plenary did not reach agreement on the last 
minute Canadian proposal to include oligonucleotides for 
sequences associated with pathogenicity of biological agents 
and toxins on the Common Control List (AG/Jun06/CL/C/1).  New 
Zealand supported the proposal.  The US, UK, and Sweden 
expressed concerns that the proposal appears to undo the 2005 
consensus on the UK,s definition of sequences associated 
with pathogenicity.  Canada requested countries provide them 
with comments. 
 
¶12.  (C)  Measures to combat CBW terrorism.  Australia 
presented information on its national controls on biological 
agents and technology (including intangible technology 
transfers).  Australia has developed a two tiered list 
relating to the hazards associated with those agents.  In 
addition, Australia registers facilities handling listed 
biological agents and have an accreditation system. 
(Comment: The Australian system appears similar to the USG,s 
&Select Agent8 programs.)  They also conduct outreach and 
have criminal sanctions for non-compliance.  Finally, they 
are developing a regulation road map called &BioTracker,8 
which is available through Biotechnology Australia. 
Australia is interested in sharing information on how other 
AG partners implement ITT. 
 
¶13.  (C)  Further Enhancement of Implementation Measures 
 
¶A.  Brokering survey and discussion paper.  Australia 
presented two of the three papers on brokering; providing 
results of the survey of AG participating government,s 
brokering controls (AG/May06/ExC/AUS/16) and the common 
themes and elements of best practices (AG/May06/ExC/AUS/17). 
 Consideration of the proposal to amend the AG Guidelines to 
include brokering was considered during the Plenary (see 
paragraph 9A). 
 
¶B.  Common approach to controls on exports to distributors. 
The Plenary reached agreement on the German proposal for a 
common approach to controls of exports to distributors 
(AG/May06/ExC/D/28).  In a meeting with Germany on the 
margins, it was agreed that the common approach proposed by 
Germany was a reminder to all of delegations of &best 
practices8 in dealing with issues involving distributors and 
did not codify or make any changes to the agreed AG 
guidelines.  The U.S. Delegation further noted that, in its 
view, this proposed common approach did not represent or 
require any changes to existing U.S. regulations.  All 
participants agreed with this observation and noted that the 
words &in a manner consistent with their national law and 
practices, in line with the Australia Group Guidelines8 in 
the beginning of the proposed common approach and the caveat 
&at least in cases of potential misuse or diversion8 in 
clauses (b), (d), and (e) provided the necessary flexibility. 
 
¶C.  Implementation of catch-all controls.  New Zealand 
reported that their efforts to implement AG catch-all 
controls was undergoing their parliamentary process.  They 
noted that the delay in implementing these controls, due to 
their election process, provided them time to study the 
legislation and regulations of others.  They also noted that 
they rarely export AG commodities.  (Iceland rep, who 
attended only briefly, indicated vaguely in an informal 
conversation that &the issue is still under 
consideration.8) 
 
¶D.  No Under-cut policy.  The Plenary did not reach agreement 
on the last-minute Czech proposal to modify the text of the 
Australia Group no undercut policy which allegedly would make 
it consistent with other multilateral export control regimes 
(AG/Jun06/ExC/CZ/5).  This proposal was supported by the EU 
(since no one in the EU Caucus objected).  The U.S. indicated 
a need to study this proposal further.  The AG Chair noted 
broad support for the proposed change and the Plenary agreed 
that the proposal be subject to a 90 day silence procedure. 
-------------------------------------- 
INFORMATION EXCHANGE AND JOINT SESSION 
-------------------------------------- 
¶14.  (C)  Information Exchange.  Forty-eight presentations 
were made by twelve AG member countries on chemical and 
biological programs; existing and emerging technologies of 
CBW concern, trends and developments in CBW proliferation, 
CBW terrorism, transshipment, supplier issues, and intangible 
transfers of technologies.  U.S. made twenty presentations. 
Details of the exchange are reported septel. 
 
¶15.  (C) Joint Information Exchange/Enforcement Meeting.  For 
only the second time a joint session of Information Exchange 
and Enforcement Experts was held.  The focus on proliferation 
networks was highlighted by the presentation of Japan 
regarding China-Pakistan transshipments.  U.S. made 
presentations on deemed exports, including the most recent 
updates to the Federal Register, and chemical weapon open 
source web message boards. 
 
------------------- 
ENFORCEMENT MEETING 
------------------- 
 
¶16.  (C)  The enforcement exchange provided a valuable 
opportunity to share experiences, discuss methods for 
identifying and reducing non-compliance and strengthening 
export controls.  The 2006 Enforcement Experts session 
highlighted legislative arrangements necessary to cover 
&catch all8 elements, the capacity to deal with the transit 
and transshipment of controlled items, and intangible 
technology transfers; the necessary legislative structure to 
provide effective prosecution and thereby deterrence of 
attempts to circumvent controls; robust and timely 
information exchange between members; and well developed and 
coordinated domestic information and intelligence regimes, 
particularly border controls, as required by UNSC Resolution 
¶1540.  Domestic and international coordination of these 
elements ensures that non-compliance can be dealt with in a 
timely and effective manner.  Intangible technology transfers 
were discussed in detail in opening statements and in case 
studies. 
 
¶17.  (U)  Enforcement Manual.  The Canadian delegation 
offered to translate the Enforcement Manual into Russian to 
further assist the Russian attempts to meet Australia Group 
membership requirements.  The United Kingdom will continue to 
voluntarily maintain the Enforcement Manual until another 
member country assumes the position.  In the meantime, there 
were no changes or modifications to the manual. 
 
¶18.  (SBU)  U.S. Presentations.  U.S. del presented on Maine 
Biological, a U.S. firm illegally exporting material to Syria 
and on a Taiwanese case, as well as providing an overview of 
Exodus Command Center and the outreach program, Project 
Shield America. 
 
¶19.  (SBU)  Other Presentations. 
 
-- Netherlands presented on the Van Anraat case involving 
precursor chemicals shipped to Iraq in the 1980,s for use in 
production of mustard gas against Iran and Iraqi Kurds. 
 
-- Japan summarized a UAV case and a freeze dryer case from 
2002 involving transshipment through Taiwan with eventual 
end-use in DPRK. 
 
-- The United Kingdom presented on the risk assessment 
process used in a sample case to determine whether or not a 
license recommendation should be approved. 
 
-- New Zealand presented on classifying goods correctly in 
the HS Tariff system.  This presentation presented further 
discussion from several member countries regarding similar 
problems with classifying chemicals. 
 
-- The Republic of Korea also presented on the classification 
of items within HS Tariff and the use of self-determination 
and export licensing by Korean exporters. 
 
-- The European Commission presented on the multiple hurdles 
associated with the European Customs Inventory of Chemical 
Substances and the problems relating to working under various 
countries, regulations while stressing the need for a single 
classification system. 
 
------------------ 
(U)  PRESS RELEASE 
------------------ 
 
¶20.  (U)  The AG approved the following press release: 
 
&Media Release 
2006 Australia Group Plenary 
Entering its third decade of work to stop the spread of 
chemical and biological weapons, the Australia Group held its 
annual plenary in Paris from 12-15 June.  The plenary 
recognized the important role of the Group in forging 
responses to new and emerging proliferation threats, 
including from terrorists.  Participants also considered and 
agreed upon a number of important measures for deepening the 
implementation and enforcement of national export control 
systems. 
 
In response to the need to ensure that export controls keep 
pace with new and emerging threats, participants shared 
information on the development and spread of new technologies 
posing a potential proliferation threat.  The plenary 
recognized the role of niobium as an increasingly key element 
in chemical manufacturing equipment suitable for the 
production of chemical weapons, and agreed to introduce 
controls on such equipment.  Several biological agents 
capable of being used to produce biological weapons were also 
added to the control lists. 
 
Participants undertook to take a common approach in 
controlling exports to distributors and agreed to hold a 
seminar to discuss best-practice measures to control 
brokering activities.  Tighter controls on the activities of 
such intermediaries will help to combat increasingly 
sophisticated procurement methods used by proliferations, 
including terrorists.  Participants also agreed to explore 
the possibility of &labeling8 controlled equipment to help 
address the challenge of managing trade in second hand 
equipment. 
 
The Australia Group welcomed the renewed mandate of the 
Committee established by UN Security Council Resolution 1540 
and affirmed the Group,s commitment to support the Committee 
in promoting robust global implementation of export control 
systems. 
 
Increased acceptance in recent years of Australia Group 
measures as the international benchmark for export control 
standards relating to dual-use chemical and biological 
materials and technologies has in large part been due to the 
outreach activities of the Group.  Acknowledging the 
effectiveness of targeted, regional approached to outreach, 
participants agreed on outreach strategies for the coming 
year and exchanged information on planned activities. 
 
The Australia Group website has proved an increasingly 
valuable outreach tool, and participants welcomed its 
availability in all official UN languages, with translations 
into Arabic, Chinese, and Russian now online.  The meeting 
agreed to expand information on controlled items contained on 
the website in order to increase its usefulness as a 
reference tools for enforcement officers.  Further 
developments to the Australia Group Information System were 
also agreed to facilitate increased sharing of secure 
electronic information among the Group. 
 
Discussions dealing with information sharing and enforcement 
provided clearer insights into proliferation behavior by 
state and non-state actors, as well as practical measures for 
responding to these activities.  Controlling the transfer of 
know-how and technical information relevant to the production 
of chemical and biological weapons without impeding 
legitimate scientific research was acknowledged as an 
important challenge.  The plenary agreed to continue to 
exchange ideas and experiences relating to the implementation 
of controls in this area. 
 
Participants reiterated their commitment to continue to 
ensure that nonproliferation export controls did not hinder 
legitimate trade and technical cooperation in the chemical 
and biological sectors. 
 
Further information on the Australia Group,s activities is 
available at www.australiagroup.net.8 
 
-------------------------- 
PREPARATIONS FOR NEXT YEAR 
-------------------------- 
 
¶21.  (SBU)  Suggestions from smaller nations.  Since the AG 
annual meeting is a key source of information for export 
control officials from smaller countries US del sought 
suggestions for next year from a number of them (including 
Latvia, Malta, Luxembourg, Ireland, Argentina, Slovenia, 
Lithuania, Romania, Czech Republic, and Estonia).  Several 
expressed particular interest in obtaining additional 
specific information on proliferators and other unreliable 
entities and additional case studies in order to improve 
their enforcement capabilities.  The information would be 
welcome in either, or both, of the intelligence exchange or 
in the enforcement experts meetings.  Interest was also 
expressed in information on new materials and technologies, 
on the possibility of guest speakers on specific hot-topic AG 
issues, practical information on transshipment controls, 
information on watch list items for catch-all controls. 
 
¶22.  (SBU)  Issues for a future agenda.  Possible future 
topics for U.S. papers: (1) implementing brokering controls; 
(2) pandemic human influenza; (3) implementing ITT controls; 
(4) review catch-all denial trends; )5) disposable 
bioreactors; (6) labeling dual-use equipment; and (7) the 
used equipment market. 
 
¶23.  U.S. Delegation: 
Robert Mikulak ) Head of Delegation 
Doug Brown ) Department of Commerce 
David Flynn -  Department of Energy 
Andrea Garbe ) Department of State 
Kristen Gass ) Department of State 
Scot Gonzales ) Department of Commerce 
Mary Hamman ) Department of Homeland Security 
Kelly Hartley ) Department of State 
Scott Hubinger ) Department of Commerce 
Emily Pucci ) Department of State 
Christian Westermann ) Department of State 
Please visit Paris' Classified Website at: 
http://www.state.sgov.gov/p/eur/paris/index.c fm 
 
STAPLETON