SECRET
Background
2. The attached telegram sets out the details. The key points
are that:
a Hong Kong based company has been caught supplying three magnetrons to Iran. These were claimed to be imported from China, and for civil aircraft use, but are probably part of the target detection system of the US built Phoenix missile system;
documents seized during the raid indicate 1300 previous consignments, ie potentially a major supply route to Iran;
it is not know whether the magnetrons are US originals or Chinese-made copies; and if they came from China, how they got there in the first place;
the Governor has decided that the investigations should continue and not be subject to any timing constraints. The
Americans have been told this.
3.
If Hong Kong has shut down an arms supply channel to Iran,
that would be good news. But the Governor is concerned that if evidence reveals that Hong Kong has been part of a channel for several years, their reputation for effective export controls will be damaged. Hong Kong were granted "Inter-COCOM Status"
(ie treated as if a full COCOM member) earlier this year by the
US, and Hong Kong is anxious not to lose that status. The
Governor is also keen ensure that HKG cannot in any way be accused of complicity in a cover-up. But he has also decided that no decisions will be taken on prosecution until a) there is
confirmation that the magnetrons are missile parts, and b) it is
military.equip.ADMIN.JRB
SECRET
THIS IS A COPY THE ORIGINAL HAS BEEN
CLOSED UNDER
FOI EXEMPTION NO. 27(2)
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