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Identifier
Created
Classification
Origin
06VIENNA3173
2006-10-27 12:25:00
SECRET//NOFORN
Embassy Vienna
Cable title:  

UPDATE ON DANIEL FROSCH EXPORT CASE

Tags:  PARM PREL MNUC ETTC MTCRE AU 
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VZCZCXYZ0007
OO RUEHWEB

DE RUEHVI #3173/01 3001225
ZNY SSSSS ZZH
O 271225Z OCT 06
FM AMEMBASSY VIENNA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5360
INFO RUEHAD/AMEMBASSY ABU DHABI IMMEDIATE 0397
						S E C R E T VIENNA 003173 

SIPDIS

NOFORN
SIPDIS

DEPARTMENT FOR ISN/MTR, EUR/AGS, AND EUR/PRA

E.O. 12958: DECL: 10/27/2016
TAGS: PARM PREL MNUC ETTC MTCRE AU
SUBJECT: UPDATE ON DANIEL FROSCH EXPORT CASE

REF: STATE 175861

Classified By: Charge d'Affaires a.i. Scott F. Kilner for reasons 1.5
(b) and (d).

Summary
-------



1. (S/NF) Helmut Krehlik, Head of the Ministry of Economy's
(MoE) Export and Import Control Division, recently provided
post with an update on the Daniel Frosch Export (DFE) case.
Frosch's father, Erich Frosch, remains under custody, and
Austrian authorities hope to charge him with facilitating the
production of WMD materials. According to Krehlik (strictly
protect), Austria's intelligence service (BVT) is working
with British intelligence to "bring Daniel Frosch back to
Austria from Abu Dhabi." The BVT has information that Daniel
Frosch's brother (FNU) is planning to smuggle precision
potentiometers in luggage from Austria to the Iranian firm
Babaie Industries via Abu Dhabi. The BVT is monitoring the
brother and plans to apprehend him, if he attempts to leave
Austria with the potentiometers. The source of the
potentiometers is a U.S. firm, Vishay Spectrol. In Krehlik's
view, given the extremely sensitive stage of the law
enforcement operations against Daniel Frosch and his brother,
the USG's offer of additional assistance outlined in reftel,
might complicate on-going operations. Post requests that
Washington agencies, including the Department of Commerce's
Office of Export Enforcement, coordinate very closely on the
DFE case. Any law enforcement requests/activities should be
coordinated with DHS/ICE Vienna. End Summary.


Erich Frosch Still in Custody


--------------------------





2. (S/NF) EconUnit Chief and Econ/Pol Officer met with
Helmut Krehlik, Head of the Ministry of Economy's (MoE)
Export and Import Control Division, on October 19 to discuss
the latest developments in the Daniel Frosch Export (DFE)
case. Following receipt of reftel, Acting EconPol Counselor
presented reftel talking points to Krehlik on October 25.
Regarding the criminal proceedings against Erich Frosch,
Daniel Frosch's father, Krehlik said that the investigating
judge had told him that Erich Frosch's lawyer has appealed
twice to have Erich Frosch released on bail. The court
turned down the first request, and a provincial court is now
reviewing the second request. According to Krehlik, Austrian
authorities hope to charge Erich Frosch under Article 177 of
the Criminal Code for facilitating the production of WMD
materials.


GoA Operation to Bring Daniel Frosch Back to Austria (S/NF)


--------------------------



--------------------------





3. (S/NF) Krehlik said that Austrian authorities suspect
that Daniel Frosch is in Abu Dhabi. Krehlik (strictly
protect) explained that the Austrian domestic intelligence
service (BVT) is collaborating with British intelligence to
"bring Frosch back to Austria." Krehlik promised to relay
reftel offer to assist in the DFE case to the BVT, but added
that, at the present delicate stage, an additional actor
might complicate operations. Krehlik opined that the
Department of Commerce's Office of Export Enforcement may
have inadvertently alerted Mojgan Rohani of Bazar Trading
Company -- a known Iranian with contacts to Iranian WMD
procurers -- to heightened Western interest at the same time
Austrian law enforcement operations were underway against DFE
in Abu Dhabi. Krehlik promised to keep the embassy apprised
of developments through the various channels of communication
between the GoA and the embassy.


DFE Plans to Re-export U.S. Potentiometers to Iran (S/NF)


--------------------------



--------------------------





4. (S/NF) Krehlik then presented a new wrinkle in the case:
the BVT had obtained information that Daniel Frosch's brother
(FNU) is planning to export precision potentiometers in his
personal luggage to the Iranian firm Babaie Industries via
the UAE. The source of the potentiometers was a U.S. firm,
Vishay Spectrol, with the following coordinates: One
Greenwich Place, Shelton, CT 06484; 402-563-6866; fax
402-563-6296; business-americas@vishay.com. Krehlik passed
us the purchase order. (Note: We immediately shared this
purchase order with DHS/ICE and other relevant agencies at
post. DHS/ICE has investigated this transaction and
determined that sample potentiometers were shipped through a
Dutch intermediary in November 2005. To date, the purchase
order has not been completed. End Note) Krehlik added that
the BVT is working on an operation to apprehend the brother
if he attempts to bring the potentiometers from Austria to
Abu Dhabi. According to Krehlik, the export is clearly for
military purposes to a known WMD proliferator.


Comment


--------------------------





5. (S/NF) Given the extremely sensitive nature of the
on-going operations against Daniel Frosch and his brother,
the GoA appears to not want an additional actor in the mix.
The GoA -- MoE and BVT -- have been collaborating with
different agencies at post on this case. Austrian
authorities have informally provided DHS/ICE with an enormous
amount of electronic data from DFE, which DHS/ICE is
analyzing for the Austrians. Additionally, DHS/ICE has had a
formal criminal investigation open since November 2005
targetting Frosch for the illegal transshipment of
commodities to Iran. In this context, post requests that
Washington agencies, including the Department of Commerce's
Office of Export Enforcement coordinate very closely on the
DFE case.



6. (U) This message has been cleared by all relevant
agencies at post.
Kilner