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September 7, 2007

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Reference ID Created Released Classification Origin
07KYIV2245 2007-09-07 13:31 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

DE RUEHKV #2245/01 2501331
P 071331Z SEP 07

C O N F I D E N T I A L SECTION 01 OF 03 KYIV 002245 
E.O. 12958: DECL: 09/07/2017 
Classified By: Political Counselor Kent Logsdon for reasons 1.4(b,d) 
1. (C) This is a request for guidance.  Request that the 
Department provide the U.S. position regarding Ukraine 
company Yuzhnoye's contract to prepare blueprints for a 
semi-cryogenic, liquid-oxygen/kerosene-fueled rocket engine 
for the Indian Space Research Organization, as detailed 
below, and especially whether the U.S. would have any 
objections to fulfillment of the contract. 
2. (U) We met September 5 with National Space Agency of 
Ukraine (NSAU) Deputy Director General Eduard Kuznetsov at 
Ukrainian request.  He was joined by NSAU Division Director 
Ihor Chuprin; NSAU International Cooperation Department 
Deputy Director Volodymyr Fedotov; Yuzhnoye Construction 
Bureau Department Director for Marketing, Export Control, and 
Licensing Hennadiy Varyanychko; and MFA Arms Control and 
Military Technical Cooperation Counselor Oleh Belokolos. 
Kuznetsov began his presentation by stressing Ukraine's 
scrupulous observance of Missile Technology Control Regime 
(MTCR) requirements.  Ukraine's strict adherence to MTCR had 
led the Ukrainian government to cancel Pavlohrad Chemical 
Plant's export license to provide mixers to Cyano Chemisive 
Systems of India.  As a result, Cyano Chemisive Systems sued 
Pavlohrad Chemical Plant, and Pavlohrad Chemical was blocked 
from conducting business in India for a 7-year period, losing 
numerous potential business opportunities.  Furthermore, 
Pavlohrad Chemical's competitors in the tender, U.S. 
companies Mayers and Thiokol, had stepped in to secure 
Pavlohrad Chemical's contract. 
3. (SBU) With this painful experience and in the spirit of 
openness, Kuznetsov continued, NSAU was sharing the details 
of a contract between Yuzhnoye and the Indian Space Research 
Organization (INSRO) for Yuzhnoye to supply plans and 
technical specifications for the construction of a 
semi-cryogenic, liquid-fuel rocket engine.  Realizing the 
MTCR sensitivities of the contract, Kuznetsov stressed the 
number of safeguards that the Ukrainian government had built 
into the contract, as detailed in the non-paper in para 5. 
4. (C) In a conversation after the meeting, Varyanychko 
specified that the contract was for delivery of blueprints 
for the rocket engine that ISRO would use to build its own 
engine; Ukrainian companies simply did not have the 
capability actually to construct the engine themselves.  He 
stressed that the information would allow ISRO to build only 
one model of engine and reiterated the point that Yuzhnoye 
would not provide any engineering or technical details on how 
the plans had been developed.  Belokolos noted that, if 
Ukraine lost the contract, Russian companies would step in 
and warned that the U.S.-Ukraine relationship would be very 
negatively affected if the public and government officials 
were to learn that the U.S. had prevented the deal from going 
through.  Varyanychko said the State Export Control Service 
had earlier authorized a license to negotiate the deal, but 
was now holding up the export license to fulfill the 
contract.  He appealed for a speedy and positive U.S. 
5. (SBU) Begin text of Ukrainian non-paper. 
On the cooperation between Ukraine and the Republic of India 
In the framework of Ukraine-US bilateral cooperation in the 
sphere of nonproliferation of WMD and its delivery systems, 
and referring to the request of the U.S. Side at the regular 
meeting of the Ukraine - US Nonproliferation and Export 
Control Working Group (June 26-27, 2007, Kyiv, Ukraine), we 
would like to provide you with the following information 
about the cooperation between Ukraine and the Republic of 
India in the space and rocket sphere. 
-- Cooperation between Ukraine and India in the space and 
rocket sphere is based on the Framework Agreement between the 
Cabinet of Ministers of Ukraine and the Government of the 
Republic of India of June 2, 2005 aimed at "expanding 
peaceful use of outer space, preserving outer space open for 
broad international peaceful cooperation."  The 
above-mentioned Framework Agreement emphasizes strict 
adherence of the Parties to the provisions of the Treaty on 
Principles Governing the Activities of States in the 
Exploration and Use of Outer Space Including the Moon and 
Other Celestial Bodies of January 10, 1967, of other 
multilateral treaties and agreements on exploration and use 
of outer space joined by the both Parties. 
-- The cooperation between Ukraine and the Republic of India 
KYIV 00002245  002 OF 003 
in the sphere of peaceful use of outer space will be 
conducted in full compliance with the requirements of the 
international export control regimes, in particular, the 
requirements of the Missile Technology Control Regime, with 
Ukraine's international obligations, as
 well as under the 
condition that the Indian Side will provide Ukraine 
appropriate government assurances of non-proliferation of 
missile technologies and their use for peaceful purposes only. 
-- In the framework of the Agreement, Ukraine and India are 
planning to develop their cooperation in the sphere of space 
exploration and peaceful use of outer space strictly adhering 
to their international obligations, in particular, in the 
sphere of production of space transport systems and 
conducting special scientific researches for assembling, 
producing, launching, operating and using the launch 
vehicles, satellites and other space systems, as it is stated 
in the corresponding paragraphs of the Article 3 of the 
Framework Agreement. 
-- In order to ensure the transparency of Ukraine-India 
cooperation in space sphere, the text of the Agreement is put 
up on the official web-page of the National Space Agency of 
Ukraine (NSAU). 
-- The first concrete step in Ukraine-India cooperation in 
space sphere was the November 2006 contract for the 
development of semi-cryogenic liquid-propellant rocket engine 
using the "liquid oxygen-kerosene" components for the Indian 
Side (Indian Space Research Organization). 
-- The goods technical documentation for the production of 
the concrete semi-cryogenic liquid-propellant rocket engine 
for the space rocket-carrier which are to be transferred to 
the Indian Side falls under the Category I items of the MTCR 
Control Lists. 
-- Under above-mentioned contract it is envisaged to supply 
to the Indian Space Research Organization the rocket engine 
technical documentation.  In order to meet the requirements 
of the Missile Technology Control Regime, the Government of 
India provided appropriate assurances (International Import 
Certificate and the End-User Certificate) stipulating that 
the items under this contract will be used for peaceful 
purpose only. 
-- In addition, the contract specifies the following 
obligations of the Indian Side: 
1.  The Indian Space Research Organization is the importer 
and the end-user of the transferred goods. 
2.  The received goods will be used for the peaceful 
exploration of outer space only; the data will not be copied, 
modified, upgraded, re-exported or transferred to the third 
side without the permission of the State Enterprise "Yuzhnoe 
Construction Bureau" and the specially authorized body of the 
executive power of Ukraine on state export control issues; 
3.  The use of the goods for military purposes or for the 
creation of the weapons of mass destruction is ruled out; 
4.  The Ukrainian authorized bodies will have a right to 
conduct inspections verifying the correct use of goods for 
declared purposes. 
5.  The contract will come into force only after the 
appropriate Ukrainian state authorities will have provided 
the Republic of India with all necessary permissions. 
-- It is necessary to add, that the contract does not foresee 
the delivering to the Indian Side the calculation methods 
used during the engine development and the appropriate 
-- At the same time, the world-wide experience in the 
construction of intercontinental ballistic missiles shows 
that the use of engines with low-boiling fuel components in 
modern strategic missile weapons is not practical. 
Currently, the Ukrainian Side has all reasons to consider the 
semi-cryogenic liquid-fuel rocket engine created under the 
concluded contract as the one to be used for peaceful space 
purpose only. 
End text. 
6. (U) Visit Embassy Kyiv's classified website: 
KYIV 00002245  003 OF 003 




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