VZCZCXYZ0007
PP RUEHWEB
DE RUEHC #1150 2721349
ZNY SSSSS ZZH
P R 291328Z SEP 09
FM SECSTATE WASHDC
TO AMEMBASSY PARIS PRIORITY 0000
INFO MISSILE TECHNOLOGY CONTROL REGIME COLLECTIVE
S E C R E T STATE 101150
SIPDIS
PARIS FOR POL: NOAH HARDIE
BRASILIA FOR POL: JOHN ERATH
E.O. 12958: DECL: 09/29/2034
TAGS: MTCRE ETTC KSCA MNUC PARM TSPA FR BR
SUBJECT: MISSILE TECHNOLOGY CONTROL REGIME (MTCR):
MARITIME SHIPPING TRENDS OF CONTROLLED MATERIALS 2008-2009
Classified By: ISN/MTR Director Pam Durham.
Reasons: 1.4 (B), (D), (H).
1. (U) This is an action request. Please see paragraph 2.
2. (C) ACTION REQUEST: Department requests Embassy Paris
provide the interagency cleared paper "Maritime Shipping
Trends Of Controlled Materials 2008-2009" in paragraph 3
below
to the French Missile Technology Control Regime (MTCR) Point
of Contact (POC) for distribution to all Partners. Info
addressees also may provide to host government officials as
appropriate. In delivering paper, posts should indicate that
the U.S. is sharing this paper as part of our preparation for
the Information Exchange that will be held in conjunction
with
the MTCR Plenary in Rio, November 9-13, 2009. NOTE:
Additional IE papers will be provided via septels. END NOTE.
3. BEGIN TEXT OF PAPER:
(SECRET REL MTCR)
Maritime Shipping Trends Of Controlled Materials 2008-2009
SUMMARY
Over the past year, proliferators have continued to use
the maritime transportation industry to move export-controlled
components and non-controlled dual-use materials to their
ballistic missile programs.
Maritime shipping can represent a significant cost
savings to shippers, especially in the transport of large or
heavy materials. This savings can easily offset the negatives
and vulnerabilities of maritime conveyance, which is slow and
represents a loss of control over the shipment for an extended
period of time, not to mention exposure to seizure by local
authorities during transshipment or intermediate port calls,
and potential damage due to weather or rough seas.
Numerous proliferators exploit the flexibility, speed,
and perceived anonymity of the intermodal, or containerized,
shipping system. However, direct point-to-point shipments
continue to fill a key niche in the delivery of sensitive
goods.
To enhance the security of their goods as they are
transported, proliferators often resort to denial and
deception methods to hide the true end-users or identity of
cargoes. The primary method used is a false or misleading
description of goods on key shipping documents such as bills
of lading (BOLs), cargo manifests, and letters of credit. In
addition, ships engaged in point-to-point shipments of
proliferation concern have been known to change their
operations in order to disguise not just the cargo, but the
ship,s destination as well as the ship itself.
INTERNATIONAL INTERMODAL SHIPPING
The containerization of cargoes has been a growing trend
in the shipping industry for decades. Under this method,
cargoes are loaded into standardized metal shipping containers
of twenty or forty feet in length. This standardization
increases the speed at which cargoes may be loaded and
unloaded in port. Additionally, the use of containers
provides a greater degree of superficial anonymity to cargoes:
to the on-the-scene observer in a port, a containerized
shipment of electronics looks identical to a containerized
shipment of scrap paper. This perceived anonymity, magnified
by the sheer volume of containers, has been exploited by all
kinds of nefarious actors, from narcotics smugglers to human
traffickers to proliferators.
Containerized shipping also offers the proliferator
potential cost-effectiveness over point-to-point shipments.
On the other hand, containerized shipping leaves a
proliferation-related cargo vulnerable in many ways. The
global intermodal shipping industry relies heavily on a hub-
and-spoke system to move cargo from smaller ports using
smaller feeder vessels to larger ports, where cargoes are
consolidated onto larger ships. This system, which provides
efficiencies and economies to the shipping industry itself,
can sometimes result in a longer voyage than a direct point-
to-point delivery would take. As a cargo awaits transshipment
in a hub port, it presents opportunities for inspection or
detention of suspect cargoes as allowed by national or
international authorities.
IRAN
Iran continues to use its Islamic Republic of Iran
Shipping Lines (IRISL) for the delivery of ballistic missile-
related materials. Owned in part by the Iranian government,
IRISL has long been Iran,s preferred maritime carrier for
sensitive shipments. IRISL offers both containerized
services, which provide convenience, speed, and cost benefits,
as well as a fleet capable of point-to-point deliveries. As
an Iranian-owned line, IRISL provides an additional layer of
national control over shipments in transit.
However, IRISL is not the only provider of shipping
services to Iran. Approximately 25 lines offer 27
containerized liner services that call directly at Bandar
Abbas, Iran,s primary commercial port. Iran has used foreign
shipping lines, including those owned by MTCR Partner states,
to deliver materials for its ballistic missile program. We
believe that IRISL remains a preferred carrier for most
sensitive shipments, but the use of third country carriers to
deliver controlled items to Iran does occur.
Iran prefers to use IRISL for point-to-point deliveries
of missile-related breakbulk cargoes. However, post-sanctions
measures taken by IRISL to use non-Iranian chartered vessels
may indicate a new method to mask imports of proliferation-
related items. This was demonstrated in early 2009 in the
case of the M/V MONCHEGORSK, a Cypriot-flagged cargo ship
carrying conventional military cargo from Iran to Syria in
violation of United Nations Security Council Resolution
(UNSCR) 1747.
NORTH KOREA
North Korea receives containerized shipments of missile-
related materials and also probably uses the international
containerized intermodal transportation system for the export
and delivery of dual-use missile-related components to its
customers. As practically no international shipping lines
call in North Korean ports, these cargoes must be
transshipped, most likely through ports in northern China.
North Korea maintains its own fleet of cargo ships, which are
capable of running regional feeder services to conduct final
delivery of goods to North Korea. This fleet is also capable
of conducting point-to-point deliveries of ballistic missile-
related materials to North Korean customers in the Middle
East, as well as to North Korea itself.
SYRIA
Without a substantial shipping fleet of its own, Syria
largely relies on the intermodal shipping system for
deliveries of MTCR-controlled and uncontrolled materials for
its missile program. Lattakia is Syria,s primary commercial
port, and receives the majority of its containerized cargoes,
both for import and export. Since few lines call directly in
Syrian ports, most of these shipments must be transshipped in
the Mediterranean to a feeder vessel before final delivery.
The most frequently used ports for transshipment of commercial
cargoes to Syria are Limassol, Cyprus; Damietta, Egypt; and
Marsaxlokk, Malta. Proliferation-related cargoes using the
intermodal system probably transit these ports along with the
flow of commercial cargoes.
DECEPTION TECHNIQUES
Moving goods through the international intermodal system
exposes them to potential scrutiny. Numerous parties, from
customs officers to port officials to bankers, review the
paperwork associated with exporting, paying for, loading,
transshipping, and delivering cargoes. As a result,
proliferators using the intermodal shipping system frequently
employ deceptive practices to evade detection. In addition to
using false end-users and listing front companies as
recipients, shippers of proliferation-related cargoes also
frequently alter the description of the cargo in order to
disguise the controlled nature of the goods. This practice is
not unusual in the shipping industry, where unscrupulous
customers will often falsify the contents of the containers on
the bill of lading and the shipping documentation, usually in
order to evade tariffs, but also to disguise illicit goods.
Other practices common in the shipping industry, such as
generalized cargo descriptions, also may obscure the nature of
the items actually being shipped. A five-axis CNC machine,
for example, might be described as merely "machinery" on the
bill of lading and the ship,s cargo manifest. These methods
have been steadily embraced by proliferators, and the use of
this practice remained constant in the 2008 to 2009 period.
Additionally, it remains acceptable in many regions to
describe cargoes merely as "freight of all kinds" or "general
cargo."
Other shipping documents may also be vulnerable to
deception efforts. For example, bills of lading may use
incorrect ship names or have duplicates issued so as to avoid
detection when reviewed by the bank. IRISL, for example, has
changed the names of many of its cargo ships in a probable
attempt to avoid association with the sanctioned entity
"IRISL."
Observed deception techniques in a point-to-point
shipment involve not only false declarations on shipping
paperwork, but also changes in the way ships carrying these
cargoes are operated. In the industry, it is not unusual
for a breakbulk ship to change its declared destination mid-
voyage for a commercial reason. When a ship disguises a
sensitive voyage to deliver proliferation-related materials,
it can deliberately lie about its destination and next port of
call to port authorities, and still fit within the norms of
the industry.
Ships attempting to avoid detection may also turn off
standard navigation and safety equipment, such as the
Automated Identification Systems (AIS). AIS is an automated
anti-collision broadcast system similar to an airplane
transponder. The use of AIS is mandated on ships over 300
gross tons engaged in international trade. Turning off this
system is counter to the requirements of the United Nations
Convention on the Safety of Life At Sea Convention (SOLAS),
and outside of the typical norms of the shipping industry.
While SOLAS does allow for ship masters to turn off their AIS
systems in the event the master feels that emitting a signal
would expose the ship to potential safety threats, turning off
the system outside of the most pirate-infested areas of the
world,s shipping lanes is not typical practice.
These changes in operations are rarely seen in the
shipment of goods via container services. The containerized
sector of the shipping industry relies heavily on published
schedules and rigidly timed port rotations. If a ship on a
container service were to deviate from its declared or
scheduled port, this would be considered highly unusual by
industry standards. Additionally, the shipping line would
incur significant expenses by diverting or changing its port
calls at the last minute, as its customers would likely seek
compensation for any delays in the delivery of their cargoes.
In any case, container ships can carry hundreds or even
thousands of containers onboard. Because of the volume of
containers on a ship, the master and crew are rarely aware of
the presence of proliferation-relevant materials on their
ships - especially if the goods are falsely described on the
BOL and manifest.
CONCLUSION
Maritime transportation remains a key method of moving
controlled and non-controlled materials for proliferant
missile programs. Programs of concern continue to rely
heavily on the international intermodal system. Since the
intermodal system can involve many nations - through the
involvement of ships under differing national flags or
ownerships as well as transshipment ports - use of this system
can create opportunities for MTCR countries to act against the
proliferation of ballistic missile-related materials. We urge
Partner countries to exercise vigilance against the
exploitation of their ports, flags, and ships for the use of
shipment of proliferation-related items.
END TEXT OF PAPER.
4. (U) Please slug any reporting on this or other MTCR
issues for ISN/MTR. A word version of this document will be
posted at www.state.sgov.gov/demarche.
CLINTON