VZCZCXYZ0001
PP RUEHWEB

DE RUEHMO #2936/01 3490643
ZNR UUUUU ZZH
P 150643Z DEC 06
FM AMEMBASSY MOSCOW
TO RUCPDOC/USDOC WASHDC PRIORITY
INFO RUEHC/SECSTATE WASHDC 5862
RHFJUSC/HQS US CUSTOMS SERVICE WASHINGTON DC

UNCLAS MOSCOW 012936 
 
SIPDIS 
 
USDOC FOR 532/OEA/DMUSLU/MHAMES 
USDOC FOR 3150/USFCS/OIO/CEENIS/MCOSTA 
USDOC FOR 532/OEE/MO'BRIEN 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: BEXP ETRD ETTC RS
SUBJECT: EXTRANCHECK: POST-SHIPMENT VERIFICATION: S- 
TERRA CSP, ZELENOGRAD, RUSSIA, LICENSE NO: D357313 
 
REFTEL: USDOC 06043 
 
¶1. Unauthorized disclosure of the information provided 
below is prohibited by Section 12C of the Export 
Administration Act. 
 
¶2. Reftel requested a post-shipment verification to 
determine the legitimacy and reliability of the end- 
user, S-Terra, Zelenograd, Moscow, Russia. The company 
was listed on BIS license number: D357313 as the 
ultimate consignee of encryption, technology for the 
development of VPN software for Cisco's 2800/3800 
series routers, ECCN: 5E002. These commodities are 
controlled for national security reasons. The exporter 
is Cisco Systems, Inc., 170 West Tasman Drive, San 
Jose, CA 95134-1706. 
 
¶3. On November 24, 2006, Export Control Attache Donald 
Pearce and FSN Natalya Shipitsina conducted the 
requested post-shipment verification with S-Terra, 
Zelenograd, MGIET Bldg.10, Moscow, Russia. The export 
control team met with Sergey Ryabko, General Director 
and Vasiliy Shirokov, Deputy General Director. 
 
¶4. S-Terra is a network security integrator founded in 
¶2003.  The company traces it's roots to a 1992 
independent commercial start-up called Elvis Plus, 
which was financed by western investment into Russian 
by Sun Microsystems. In 1998 Elvis Plus launched 
TrustWorks Systems b.v., a multinational with partners 
in Europe and the United States.  In 2002 Trustworks 
reorganized, creating S-Terra to handle network 
security integration in the Russian market.  The 
company employs 30 at its Zelenograd headquarters. 
 
¶5. S-Terra provides localization of Virtual Private 
Network (VPN) systems for end users in Russia.  GOR 
regulations require VPN systems to use GOST, a 
standardized symmetric key block cipher. S-Terra has 
developed an interface that provides a gateway for 
incoming DES or Triple-DES encrypted traffic to be 
converted to GOST, allowing for global VPN connections 
for end users in Russia. 
 
¶6. The company only does business in Russia, to "avoid 
problems" encountered with the export of crypto- 
enabled products from Russia.  Elvis Plus was once 
under investigation by the GOR Federal Agency for 
Government Communications and Information (Russian 
acronym FAPSI) and Federal Security Service (Russian 
acronym FSB) regarding their TrustWorks product line. 
Elvis Plus developed a Single Key for Internet 
Protocol (SKIP) security solution for the Solaris and 
Windows operating systems.  TrustWorks was building 
the communications packages for the VPN systems in 
Russia with no encryption and exporting them to 
Netherlands, where they would be fitted with DES 
encryption and then paired with U.S. origin hardware. 
Though no laws were violated, the investigation and 
subsequent audits led the company to cancel the 
project.  It was clear to Mr. Ryabko that to be 
profitable, the VPN systems had to be "localized;" 
meaning hardware built outside of Russia had to be 
refitted to meet Russian specifications within Russia. 
NOTE: It was this incident that lead to the 
reorganization described in paragraph 4 END NOTE. 
 
¶7.  The technology described in reftel is being 
incorporated into the S-Terra NME-RVPN; an Internet 
Protocol secure VPN module built for the Cisco ISR 
28xx and 38xx series routers.  The team was shown two 
modules currently under testing with the system in 
place.  There are an additional two modules in a 
testing cycle, and ten additional being developed and 
tested for Cisco Systems in a beta-test cycle.  The 
target is to complete 50 modules over the next quarter 
for distribution via the OCS Company, a Cisco Systems 
authorized distributor.  Ten employees of the company 
work in the Technology Engineering section where the 
technology is being used, four engineers, one 
consolidation engineer, three testers and two support 
personnel.  No other employees or organizations are 
authorized to utilize the technology.   Mr. Ryabko is 
very familiar with U.S. export control laws.  When 
asked about the license conditions, Mr. Ryabko stated 
that he signed an end-user statement, and then recited 
from memory the main conditions of the license. 
 
¶8. Recommendations: Post recommends S-Terra, 
Zelenograd, Moscow, Russia as reliable recipients of 
sensitive U.S. origin commodities. 
(FCS MOSCOW/SBOZEK/DPEARCE) 
BURNS