Identifier
Created
Classification
Origin
05PRAGUE183
2005-02-08 16:04:00
CONFIDENTIAL
Embassy Prague
Cable title:  

CZECH GOVERNMENT UNDER PRESSURE TO IMPROVE TRADE

Tags:  ETTC PREL EZ IR 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L PRAGUE 000183 

SIPDIS

E.O. 12958: DECL: 02/08/2015
TAGS: ETTC PREL EZ IR
SUBJECT: CZECH GOVERNMENT UNDER PRESSURE TO IMPROVE TRADE
TIES WITH IRAN

Classified By: Political Officer Mark Canning for reasons 1.4 b+d.

C O N F I D E N T I A L PRAGUE 000183

SIPDIS

E.O. 12958: DECL: 02/08/2015
TAGS: ETTC PREL EZ IR
SUBJECT: CZECH GOVERNMENT UNDER PRESSURE TO IMPROVE TRADE
TIES WITH IRAN

Classified By: Political Officer Mark Canning for reasons 1.4 b+d.


1. (SBU) Summary: The Czech government has been looking at
ways to improve its anemic trade ties to Iran. The Iranians
have limited Czech imports in retaliation for broadcasts of
the Prague-based Radio Farda as well as legislation passed in
2000, at U.S. request, to bar supplies to the Bushehr nuclear
power plant in Iran. The possibility of rescinding the 2000
law as a conciliatory gesture, on the grounds that it is
redundant given EU restrictions the Czechs are now subject
to, was discussed during a recent Czech parliamentary visit
to Tehran. The Foreign Ministry insists that such a step is
not on the agenda. Instead, the MFA hopes to use the EU to
pressure the Iranians into giving Czech business equal access
to Iranian markets. End summary.


2. (SBU) BACKGROUND. Trade relations between the Czech
Republic and Iran have been strained since 1998 when
Prague-based Radio Free Europe/Radio Liberty launched its
Farsi Service, Radio Farda. Teheran reacted by imposing an
unofficial, and rather selective, trade embargo on Czech
goods. Separately, in February, 2000, the Czech parliament,
at the request of the US and the UK, used emergency
legislative powers to push through a piece of legislation
that prevented the Czech firm ZVVZ Milevsko from supplying
air conditioning equipment to the Bushehr nuclear power
plant. The equipment was later supplied by the German firm,
Siemens. END BACKGROUND.


3. (C) Czech businesses have recently been putting pressure
on the Czech government, particularly the Ministry of Trade
and Industry and the MFA, to improve trade ties with Iran.
Matters came to a head recently when a Czech firm, pursuing
the sale of 100 trams to Iran, was, according to the MFA's
Iran desk officer for, told that it could forget about the
sale unless the Czech government did "something positive."
In response, the MFA undertook a review of existing
regulations, specifically questioning whether the 2000 Czech
law concerning exports for Bushehr duplicates EU rules and
IAEA regulations which ban the export of materials that might
be used to produce weapons of mass destruction. On February
2nd, Helena Bambasova, a DAS-level official at the MFA was
quoted in the press as saying the MFA would recommend
cancellation of the Bushehr ban as a gesture to the Iranians.
The MFA's desk officer for Iran confirmed that this was the
MFA position, and called it a harmless gesture, pointing out
that the legislation also prevents, or at best complicates,
plans by Czech nuclear regulators to join IAEA monitoring
activities at Bushehr.


4. (C) This activity took place in the context of planing for
a Czech parliamentary delegation visit to Iran, led by
Foreign Affairs Committee Chairman Vladimir Lastuvka. On
their return, Lastuvka told the press that the Iranian side
remains concerned about the Radio Farda broadcasts, and
recommended rescinding the 2000 law as a positive gesture; he
promised a parliamentary bill to do so if the government
would not submit its own legislation. However, the same
February 8 article quoted Foreign Minister Svoboda as saying
"We cannot cancel the law, or even as a gesture, change our
policy towards Iran." The Director of the MFA's Middle East
section told poloff on February 8 that "there is no plan at
this time to cancel the law." He explained that instead, the
Czechs will ask the EU to use whatever leverage it has in
Teheran to improve commercial possibilities for Czech
businesses.


5. (C) Comment. It is generally acknowledged that Teheran's
relations with Prague are less friendly than its relations
with any other EU member, due in large part to the presence
of Radio Farda. To their credit, none of the Deputies on the
Iran visit proposed any steps to restrict Radio Farda
broadcasts from Prague (we are seeking calls with Deputies on
this trip to discuss further). We have an active and
effective dialogue with the Czech government on
non-proliferation issues, and are pleased with FM Svoboda's
strong statement against changes in GOCR policy. We will
continue to discuss this with senior MFA officials and
encourage Washington to provide any additional points (e.g.,
whether existing EU and IAEA safeguards make redundant the
2000 Czech law).
CABANISS