VZCZCXYZ0003
PP RUEHWEB

DE RUEHC #7929 3201457
ZNY CCCCC ZZH
P R 161451Z NOV 09
FM SECSTATE WASHDC
TO RUEHRL/AMEMBASSY BERLIN PRIORITY 0000
INFO MISSILE TECHNOLOGY CONTROL REGIME COLLECTIVE
RUEHNE/AMEMBASSY NEW DELHI 0000

C O N F I D E N T I A L STATE 117929 
 
SIPDIS 
 
E.O. 12958: DECL: 11/16/2034 
TAGS: MTCRE PARM PREL MNUC ETTC KSCA GE IN
SUBJECT: RESPONSE TO GERMANY'S REQUEST FOR GUIDANCE ON 
EXPORT WITH MTCR "NO UNDERCUT" POLICY IMPLICATIONS (C) 
 
REF: BERLIN 001362 
 
Classified By: ISN/MTR DIRECTOR PAM DURHAM FOR REASON: 1.4 (C). 
 
¶1.  (U) THIS IS AN ACTION REQUEST.  PLEASE SEE PARA 4. 
 
¶2.  (C) On October 28, Germany's MFA Export Control Division 
provided Embassy Berlin with a non-paper requesting U.S. 
guidance by November 17 on a pending German export of 
extruded aluminum plates to India that may be similar to an 
export previously denied by the U.S., and therefore subject 
to the Missile Technology Control Regime's (MTCR) "no 
undercut" policy.  Specifically, Germany is requesting more 
detailed information on the denials to ascertain whether the 
goods in the pending German application are the same.  In 
addition, Germany requests additional information on the 
reason for the U.S. denials and the proliferation activities 
of the end-user, Vikram Sarabhai Space Center, Department of 
Space of the Government of India. 
 
¶3.  (C) We want to advise German officials that the MTCR "no 
undercut" policy does not apply in this instance, as the 
goods that were the subject of the U.S. denial were not MTCR 
controlled and were denied pursuant to U.S. "catch-alls." 
Germany is therefore under no obligation to deny the pending 
German export case.  However, we greatly appreciate Germany's 
serious and thorough approach on export control issues, and 
want to advise Berlin that we believe they would be justified 
in denying this sale.  The type of aluminum in the U.S. and 
German cases is very similar, the end-user (VSSC) is the 
same, and the stated end-use is nearly identical.  We also 
want to emphasize that, as has been discussed repeatedly in 
the MTCR, technologies used in space launch vehicles (SLVs) 
and ballistic missiles are interchangeable, and countries 
that possess both SLV and ballistic missile programs find it 
impossible to erect an impenetrable barrier between the two. 
We also note that consistent with longstanding U.S. policy, 
the U.S. does not support India's missile or space launch 
vehicle programs.  We therefore want to encourage Germany to 
pursue a policy similar to our own; i.e., not providing 
support to any of India's MTCR Category I programs - either 
ballistic missile or SLV. 
 
¶4.  (C) Action Request: Request Embassy Berlin approach 
appropriate host government officials to deliver talking 
points/non-paper in paragraph 5 below and report response. 
Talking points also may be provided as a non-paper. 
 
¶5.  (C) Begin talking points/non-paper: 
 
(CONFIDENTIAL//REL GERMANY) 
 
-- We want to respond to a matter of export control concern 
your government recently brought to our attention. 
 
--Specifically, your MFA's export control division recently 
requested U.S. guidance on a pending German export of extruded 
aluminum plates to India. 
 
--You noted that a similar export may have been previously 
denied by the U.S. per 2005 information notifications MI-US 
05-005 and MI-US-05-006, and pursuant to the MTCR's "no 
undercut" policy, wanted to consult with us before approving 
this export. 
 
--You requested detailed information on the U.S. denials to 
ascertain whether the goods in the pending German application 
are the same, and also sought the reasons behind the U.S. 
denials; in particular, whether the United States has 
information pertaining to proliferation activities of the 
end-user, the Vikram Sarabhai Space Center (VSSC). 
 
--We value our close nonproliferation cooperation, and want 
to 
provide the following information. 
 
--Because the aluminum that was the subject of the U.S. 
"catch-all" denials was not controlled by the MTCR, the MTCR's 
"no undercut" policy does not apply, and - unlike in a case 
involving MTCR-controlled items - Germany is not obligated 
to deny the export of the aluminum plates. 
 
--However, we believe Germany would be justified in denying 
 this sale for the following reasons: 
 
--The aluminum sheets subject to the U.S. denial consisted of 
type AA2014-T4, AA2014-T6, and AA2014 (O), which are very 
similar in composition to the aluminum German export 
officials 
are now reviewing for export to India. 
 
-- Moreover, in both the U.S. and German cases, the aluminum 
is intended to be used in an MTCR Category I space launch 
vehicle. 
 
--As you know, SLV and ballistic missile technology are 
essentially interchangeable.  As has been discussed 
extensively by the MTCR Partners, countries that possess both 
SLV and missile programs find it impossible to erect an 
impenetrable barrier between the two, and gains made in one 
program generally are not denied to the other. 
 
-- Indeed, India's SLV program - including VSSC - is heavily 
integrated with its ballistic missile program. 
 
-- VSSC is a key organization in India's SLV program, and was 
identified in the 2000 MTCR Information Exchange as being 
associated with the Indian missile program. 
 
-- This means that providing equipment and technology to VSSC 
likely will have ramifications beyond the Indian space program 
and contribute - directly or indirectly - to India's efforts 
to develop increasingly longer-range military missiles. 
 
-- Although there is no ban on U.S. exports to VSSC, and U.S. 
licensing authorities do approve sales to the firm for certain 
non-SLV/ballistic missile-related end-uses, VSSC is on the 
U.S. Department of Commerce's Entity List, which is a list of 
individuals, businesses, research organizations, and 
government and private organizations that are subject to 
specific license requirements for the export, re-export, 
and/or transfer of specified items. 
 
-- Especially in the context of today's heightened 
proliferation concerns, even indirect support to India's 
Category I programs could have a destabilizing effect on 
security in South Asia. 
 
-- As you are aware, the U.S. does not support India's missile 
or space launch programs, and works actively to impede India's 
access to missile-related technology and equipment. 
 
-- Given our shared concerns about a missile race in South 
Asia, we hope Germany will pursue a policy similar to our own 
of not providing support to any of India's MTCR Category I 
programs - either ballistic missile or SLV. 
 
-- We appreciate your consultation with us on this issue, and 
look forward to future cooperation on export control and 
nonproliferation matters. 
 
¶6.  (U) Washington POC is ISN/MTR John Paul Herrmann (Phone: 
202-647-1430).  Please slug any reporting on this issue for 
ISN/MTR, SCA/RA, EUR/CE, and EUR/PRA. 
CLINTON