Viewing cable 09STATE53356, INDIAN GRAPHITE SUPPLIER AGAIN DOING BUSINESS

VZCZCXYZ0022
PP RUEHWEB

DE RUEHC #3356 1461437
ZNY SSSSS ZZH
P R 261423Z MAY 09
FM SECSTATE WASHDC
TO AMEMBASSY NEW DELHI PRIORITY 0000
INFO MISSILE TECHNOLOGY CONTROL REGIME COLLECTIVE

Tuesday, 26 May 2009, 14:23
S E C R E T STATE 053356 
SIPDIS 
EO 12958 DECL: 05/26/2034 
TAGS MTCRE, PARM, PREL, ETTC, KSCA, IN, IR 
SUBJECT: INDIAN GRAPHITE SUPPLIER AGAIN DOING BUSINESS 
WITH INTERMEDIARY FOR IRANIAN MISSILE PROGRAM (S)
REF: A. 07 STATE 141892 B. 07 NEW DELHI 4592 C. 07 STATE 158831 D. 07 NEW DELHI 5058 E. 07 NEW DELHI 5107 F. 07 STATE 167377 G. 07 NEW DELHI 5333 H. LOWE E-MAIL - JAN 2008 I. 08 STATE 23763 J. 08 NEW DELHI 760 K. 08 STATE 49730
Classified By: ISN/MTR DIRECTOR PAM DURHAM FOR REASON 1.4 (B), (D).
¶1. (U) This is an action request. Please see paragraph 5.
¶2. (S) Background: In October 2007, we shared with the government of India information related to the supply by the Indian firm XXXXXXXXXXXX of high-density MTCR-controlled graphite to Iran’s Ward Company (Refs A & B). We later advised the GOI that the intended end-user of the graphite was the Sahand Aluminum Parts Industrial Company (SAPICO), a cover company for the Shahid Hemmat Industrial Group (SHIG), Iran’s primary developer of liquid-fueled ballistic missiles (Ref I). In response to a follow-on U.S. demarche in November 2007 concerning additional consignments of graphite being readied by XXXXXXXXXXXX for shipment to Ward, Indian officials advised us that they had prevented the onward shipment of one such consignment, and that they were investigating the matter (Refs C - E). We approached New Delhi again in December 2007 with information indicating that four to five tons of graphite awaiting shipment to Ward had been removed from XXXXXXXXXXXX’s warehouse (Ref F). The GOI informed us that they had not cleared the graphite shipment for export, that nothing had gone to the final destination, and that they had taken unspecified action on the case (Refs G & H). In April 2008, the Times of India (TOI) reported that in October 2007, Indian Customs in Mumbai prevented XXXXXXXXXXXX from shipping 1,150 kg of graphite to Ward, and that a second consignment of XXXXXXXXXXXX graphite bound for Dubai was subsequently stopped (Ref K). We requested additional information from India on the status of this graphite, but have not yet received an response (Ref K).
¶3. (S) Objectives: We want to reiterate our appreciation to Indian officials for the effective action they took in this case, and to remind them that we remain interested in any additional information they can share with us related to the final disposition of the graphite, as well as the results of their investigations or any legal proceedings that resulted from this activity.
¶4. (S) Objectives (continued): We also want to advise the GOI of information indicating that as of mid-April 2009, Ward and XXXXXXXXXXXX were again engaged in business- related discussions. We are concerned that this recent contact could involve additional efforts to supply graphite to Iranian entities, and want to urge Indian authorities to investigate and take all appropriate measures to prevent XXXXXXXXXXXX from acting as a supplier of sensitive materials to Iran.
¶5. (U) Action Request: Department requests Embassy New Delhi approach appropriate host government officials to deliver the talking points in Paragraph 6 and report response. Talking points may be left as a non-paper.
¶6. (S) Begin talking points/non-paper:
(SECRET REL INDIA)
-- We would like to raise with you a matter of proliferation concern and request your government’s assistance in investigating this activity.
-- In October 2007, we shared information with you indicating that in July 2007, the Indian company XXXXXXXXXXXX offered to provide 255 blocks of MTCR-controlled, high density graphite to Iran’s Ward Commercial Company.
-- We later advised you that the intended end-user of the graphite was the Sahand Aluminum Parts Industrial Company (SAPICO), a cover name for the Shahid Hemmat Industrial Group (SHIG). SHIG is Iran’s primary developer of liquid propelled ballistic missiles and is an entity designated under United Nations Security Council Resolution 1737.
-- In late November 2007, we expressed our concerns that XXXXXXXXXXXX was working to ship additional consignments of graphite to Ward, and that we were aware that Indian officials were holding a shipment of potentially nuclear-grade graphite in the Mumbai Air Cargo Complex near the international terminal.
-- We were subsequently pleased to hear that your government prevented the onward shipment to Iran of the graphite being held at the Mumbai Air Cargo Complex, and that you were investigating this matter.
-- In December 2007, we informed you that four to five tons of graphite being readied for shipment to Ward had been removed from XXXXXXXXXXXX’s warehouse.
-- You responded that your government had not cleared the graphite shipment for export because your investigation was not yet complete, and that the graphite had likely been moved to a location where it could be stored for a longer period of time.
-- You later advised us that nothing had gone to the final destination, and that your government had taken unspecified action on the case.
-- In April 2008, the Times of India (TOI) reported that in October 2007, Indian Customs in Mumbai prevented XXXXXXXXXXXX from shipping 1,150 kg of graphite to Ward, and that a second consignment of XXXXXXXXXXXX graphite bound for Dubai was subsequently stopped.
-- We commend Indian authorities for stopping these shipments, and remain interested in any additional information you could share with us related to the final disposition of this graphite. We also would appreciate knowing the results of your investigations or any legal proceedings that resulted from this activity.
-- In addition, we want to advise you of information indicating that as of mid-April 2009, representatives of Ward and XXXXXXXXXXXX were again engaged in business-related discussions.
-- We are concerned that this recent contact between Ward and XXXXXXXXXXXX could be related to additional efforts to supply graphite to Iranian entities of proliferation concern.
-- Given Ward’s history of acting as an intermediary for Iran’s ballistic missile program, we urge you to investigate this information and take whatever measures are necessary to prevent the supply Xby XXXXXXXXXXXX of sensitive materials to Iran.
-- We appreciate India’s cooperation on nonproliferation issues and look forward to hearing of any actions your government takes in response to this information.
End talking points/non-paper.
¶7. (XXXXXXXXXXXX
¶8. (U) A word version of this document will be posted at www.state.sgov.gov/demarche. CLINTON