WIKILEAKS: US concerns regarding Malaysian companies suspected of illegal transshipment activities

Following up on PM PDAS Countryman's January 14 meeting with the Malaysian Ambassador to Washington about the missing F-5 engines case (ref E), DCM reiterated to Zainol the seriousness with which we view this issue and that we look forward to a full report/accounting by the GOM. This was necessary to ensure the US has the "fullest confidence" in Malaysia's ability to handle and account for sensitive defense equipment.

THE CORRIDORS OF POWER

Raja Petra Kamarudin

S E C R E T SECTION 01 OF 03 KUALA LUMPUR 000049

SIPDIS

FOR EAP/MTS, ISN, PM AND INR

E.O. 12958: DECL: 01/20/2030

TAGS: PREL, KNNP, PARM, IAEA, MNUC, PGOV, IR, MY

SUBJECT: MALAYSIA: MFA VIEWS ON NON-PRO, IAEA, AND EXPORT CONTROL LAW

REF: A. 09 STATE 126209 -- U.S. APPROACH TO NPT CONFERENCE

B. 09 STATE 128736 -- NEXT STEPS WITH MALAYSIAN ON

PROLIFERATION

C. 09 KL 917 -- EINHORN MEETINGS IN KUALA LUMPUR

D. 09 KL 977 -- GOM STATEMENT ON IAEA VOTE

E. STATE 5003 -- PM A/S MEETING WITH MALAYSIAN

AMBASSADOR

Classified By: Political Counselor Brian D. McFeeters for reasons 1.4 b and d.

Summary

1. (S) The DCM met with MFA Deputy Secretary General Zainol Abidin Omar on January 15 to convey Ref A talking points and to discuss a range of other counter-proliferation and export control-related issues (refs A and B). Referencing special information that was provided to the GOM in early-November by S/SANAC Einhorn, Zainol said that the GOM was still looking into Malaysian companies suspected of illegal transshipment activities involving Iran, but otherwise no concrete actions had been taken.

DCM urged the GOM to "redouble" its efforts in this area. Zainol advised that his government was still deliberating internally the disposition of dual-use components and equipment that were seized by Malaysian authorities on December 25 from a Middle East-bound vessel.

Regarding a new Export Control law, Zainol said that it was now under near-final review at the Attorney General's office, but he offered no timeline on when the bill might be presented to parliament. On the fate of their Ambassador (Arshad) to the IAEA, Zainol indicated that naming of a successor was a sensitive issue and that it may take several weeks (or longer) for a final decision.

Zainol did state that, in the interim, Arshad was still Chairman of the IAEA Board of Governors. DCM encouraged the GOM to move quickly on a replacement to clear up the "confusion" at the IAEA on Arshad's status.

Zainol welcomed the Jan 28 visit by ISN acting Assistant Secretary Van Diepen and delegation. He confirmed that the GOM would participate in EXBS-sponsored training in March and expressed interest in sending officials for additional export control-related training at the University of Georgia in April. DCM briefly raised the missing F-5 engines case. End Summary.

2. (C) DCM Rapson and Poloff Nathan met with Ambassador Zainol Abidin Omar, the Deputy Secretary General in charge of multilateral affairs at MFA on January 15.

(Note: Zainol is the no. 5 ranking officer in the MFA after the Foreign Minister, two Deputy Ministers and the Secretary General. End Note).

Also in attendance from the MFA were Under Secretary for non-proliferation Bala Chandra Tharman, Principal Assistant Secretary for non-proliferation Shazryll Zahiran, and Principal Assistant Secretary for United States affairs Muhammad Radzi bin Jamaluddin. The discussion was cordial and went for an hour-plus.

3. (S) The DCM recalled Special Advisor for Non-Proliferation Einhorn's November 4 meeting with MFA Secretary General Rastam (ref C), during which Einhorn provided the MFA a special list of companies of concern that were engaging in transshipment activities with Iran, and asked for a status update on any GOM decisions or actions with respect to the listed companies.

Zainol replied "We have requested security agencies to initiate their investigations," but added that, thus far, "the investigation has not been able to unearth any activities that are in contravention to UN resolutions." The DCM emphasized that the U.S. has "strong concerns" about the companies listed and their activities, and urged the GOM to "redouble" its efforts in this area. Zainol acknowledged this request and said the GOM would "welcome any additional information on those companies." He noted that the Foreign Ministry has the inter-agency lead on non-proliferation issues, and that bilateral requests for cooperation and assistance on these types of issues should be "funneled through the MFA."

Update on the Christmas Day Seizure

4. (S) DCM thanked and briefly queried about the status of the shipment of dual-usage parts and equipment seized by the GOM from a middle east-bound vessel over the Christmas day holiday.

Zainol replied that all the information they can share has been separately channeled to the relevant U.S. agencies. Zainol did note that they (the GOM) are still conducting their internal investigation on whether or not the equipment and parts seized were of dual-use concern as the USG is alleging.

(Comment: Zainol declined to offer any info on current disposition of the seized shipment, although his comments clearly implied that the consignment was still under GOM control. Moreover, he provided no indication that the GOM would be reaching out to the UN Security Council for guidance on evaluation and analysis and handling of the seized shipment as had been indicated to us through liaison channels. End comment.)

Export Control Law in Final Stages, but...

5. (C) Zainol confirmed that the GOM "is in the final stages" of drafting the export control law bill, and said that the draft is currently with the Attorney General's office.

Zainol did not want to speculate when the AG's office would finish its review and when the bill would be presented to parliament, given, he said, that there are a range of other "urgent" issues on the PM, AG's, and Parliament's plate such as review and revision of the controversial Internal Security Act (ISA).

Zainol opined that the process could "take some time" as the AG's office needs to consider how an export control law would tie into and affect existing laws. Zainol concluded by noting that once the proposed bill was finalized, it "would be introduced to parliament at the appropriate time."

DCM thanked Zainol for this update and recalled the high priority both the PM and Foreign Minister placed late last year on early passage of the export control law. He noted that the USG stands ready to assist the GOM, including through the provision of training and technical assistance (see para 8, below).

Van Diepen Delegation Visit

6. (SBU) The DCM previewed the January 28th visit of ISN acting Assistant Secretary Van Diepen and delegation, thanking Zainol for agreeing to meet with the A/S and for assembling an interagency team on the Malaysian side for that meeting at MFA. The DCM confirmed that we are also seeking separate appointments for the delegation at MITI, the Attorney General's offices and the PM's office. Zainol said he look forward to the discussions with A/S Van Diepen and welcomed further engagement with the U.S. on non-proliferation and export control issues.

IAEA and the Status of Ambassador Arshad

7. (C) The DCM asked Zainol for clarification on the status of Malaysia's Ambassador to the IAEA (and co-current Chairman of the IAEA Board of Governors) Arshad (Ref D), noting that there have been some confusing signals of late emanating from various sources about his recall and the naming of a successor.

Zainol was coy on providing a direct answer, and would only say that "at the moment, we are unable to say anything," other than that he (Arshad) "is still chair of the IAEA Board of Governors" until a new Ambassador is identified.

Zainol explained that there is a delay because "the nomination of a new ambassador is very sensitive," adding that "the process takes a few weeks." The DCM recalled the Foreign Minister's public comments on this subject last month and recent senior level communications we have received from the GOM.

Training and Enhancing Engagement

8. (SBU) Zainol welcomed increased interaction and engagement between the USG and GOM on the non-proliferation front. He confirmed that the GOM planned to participate in an EXBS-sponsored non-proliferation workshop in March 2010, and was interested in sending two candidates to the University of Georgia within the next few months for more specialized and extensive export control-related training.

Zainol commented that the MFA has been preparing for the Nuclear Security Summit in Washington this April, which PM Najib will attend. DCM Rapson noted USG interest in having Malaysia's Attorney General visit Washington for discussions on a range of bilateral issues, including the export control law.

Missing F-5 Engines

9. (C) Following up on PM PDAS Countryman's January 14 meeting with the Malaysian Ambassador to Washington about the missing F-5 engines case (ref E), DCM reiterated to Zainol the seriousness with which we view this issue and that we look forward to a full report/accounting by the GOM. This was necessary to ensure the US has the "fullest confidence" in Malaysia's ability to handle and account for sensitive defense equipment.

Zainol replied that "we are seriously concerned" and that the GOM "fully understands that this is an obligation we have to undertake," but also added that "my department is only concerned with nuclear non-proliferation" and that "we (MFA) are not the lead on the issue."

When asked about those arrested for their alleged involvement with the F-5 engines, Zainol replied that the issue "is now before the court, so it's difficult to offer any further comment."

KEITH