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OO RUEHGH RUEHHM RUEHNH
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O 092232Z AUG 06
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S E C R E T SECTION 01 OF 02 TAIPEI 002701 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/TC AND ISN/MTR 
 
E.O. 12958: DECL: 08/09/2026 
TAGS: MTCRE PARM TW ECCT
SUBJECT: MTAG: AUGUST 2006 UPDATE ON TAIWAN EXPORT CONTROL 
 
REF: A. STATE 130069 
 
     ¶B. STATE 128600 
     ¶C. STATE 119654 
 
Classified By: AIT ADDIR Charles E. Bennett, REASONS 1.4 B/C 
 
¶1.  (S) Summary: On August 9, AIT delivered to the Taiwan 
Bureau of Foreign Trade (BOFT)ref A talking points on recent 
machine tool transfers to North Korea by Ching Hwee 
International Trading and ref B results of three export 
license reviews.  BOFT noted that the U.S. response on export 
license case WA0606261115448007 is overdue.  BOFT said its 
recommendation on measures to demonstrate Taiwan's 
displeasure over recent North Korean missile tests has been 
forwarded to Taiwan's Ministry of Foreign Affairs for 
announcement.  Separately, AIT has forwarded the results of 
BOFT's investigation of recent Euma-Spinner Corporation 
transfer of machine tools to Syria (ref C) via email.  Action 
Request para 5.  End summary. 
 
Ching Hwee Machine Tools to North Korea 
--------------------------------------- 
 
¶2.  (S) AIT delivered ref a talking points/non-paper on 
machine tool transfers to North Korea by Ching Hwee to the 
BOFT Export Controls Task Force Head Wally Su.  AIT 
emphasized that Ching Hwee has been selling machine tools to 
North Korea for years now and needs to be stopped.  Su said 
he suspected that Ching Hwee was shipping machine tools to 
North Korea via intermediate territories to evade the need 
for an export license.  He said that he is currently working 
with the Ministry of Justice Investigation Bureau on ways of 
collecting evidence such as phone conversations or bank 
records that could prove Ching Hwee is aware that its 
products are going to North Korea and thus provide the legal 
basis for prosecution.  He agreed with AIT's recommendation 
that a harsh penalty could be an effective deterrent for 
other companies tempted to engage in such behavior. 
 
--------------------------------------------- -- 
 
¶3.  (S) BOFT noted an apparent mix-up of case numbers in ref 
¶B.  Su explained that case WA060712165238018 is the shipment 
going for temporary display at the industrial fair in Iran, 
while case WA060705160110006 was inadvertently sent twice. 
AIT and BOFT agreed that to prevent such confusion in the 
future, BOFT will add the letters 'XO' (meaning for 
exhibition only) to the SCL column in the template.  Su 
reiterated that in general Taiwan is pleased at how well the 
review system is working, but he also noted that the U.S. 
response on export license case WA0606261115448007 is 
overdue. 
 
Measures Against North Korea 
---------------------------- 
 
¶4.  (S) BOFT Su told AIT that in response to repeated AIT 
high-level demarches that Taiwan restrict its trade with 
North Korea, an interagency group last week approved his 
recommendation to immediately expand the list of items 
requiring an export license to be shipped to North Korea to 
include the 344 additional items recommended by U.S. agencies 
in December 2005.  Su said a letter announcing this has been 
sent to the Ministry of Foreign Affairs for delivery, and 
that it would also be noted at the TIFA follow-up talks 
scheduled for next week. 
 
Investigation Results 
--------------------- 
 
¶5.  (S) AIT has forwarded the results of BOFT's investigation 
of the Euma-Spinner companies to EAP/TC and ISN/MTR via email 
(ref C).  The documents forwarded include a list of Euma 
machine tool exports to the Spinner Company in Germany.  The 
 
TAIPEI 00002701  002 OF 002 
 
 
Spinner Company maintains a sales office in the Middle East, 
which, Taiwan officials suspect, has transshipped machine 
tools to Syria.  In its investigation report, BOFT requests 
U.S. assistance in passing this information to the German 
Government.  Action request: please advise what, if any, 
response we should give to this request for U.S. assistance 
in relaying export control information to the German 
Government. 
YOUNG