MTAG 5-96: RESPONSE TO ADDITIONAL INFORMATION ON

S E C R E T VIENNA 000643 SIPDIS SIPDIS SECSTATE FOR ISN/MTR, EUR/AGS AND EUR/PRA E.O. 12958: DECL: 03/02/2016 TAGS: PARM PREL MNUC ETTC MTCRE IR AU SUBJECT: MTAG 5-96: RESPONSE TO ADDITIONAL INFORMATION ON DANIEL FROSCH EXPORTS' MISSILE-RELATED COOPERATION WITH IRAN REF: STATE 28289 Classified By: Economic-Political Counselor Gregory E. Phillips for reasons 1.4 (b),(d) and (h). ¶1. (S) Econ Unit Chief and PolOff delivered reftel talking points on March 2 to Helmut Krehlik, head of the Export and Import Control Division in the Ministry of Economics and Labor (MOE). Krehlik assured us that the MOE had already denied permission to Daniel Frosch Exports (DFE) to ship a friction tester to Mehr Engineering via the United Arab Emirates. He said that if DFE had gone ahead and shipped the equipment it would have clearly been a circumvention of the Foreign Trade Act, and subject to criminal prosecution. He promised to look into the matter and get back to us if the GoA uncovers additional information on this case. Krehlik added that the GoA has an active investigation against Frosch for failing to notify the MOE of intention to export goods to Mehr. ¶2. (S) Krehlik added that officials from Austria's domestic intelligence service, the Federal Office for the Protection of the Constitution and Counterterrorism (BVT),had recently met Frosch. Frosch told the BVT that he was shutting down his business in Austria and would start a new business in Dubai. While Frosch did not specify the nature of the business, Krehlik said that his intention to continue his present activities in a new location was quite clear. Krehlik noted that the Foreign Trade Act applies to Austrian citizens regardless of physical location. However, Krehlik admitted that it would not be easy, outside of Austria, to prosecute Frosch for violating the act, because of the difficulty both in physically apprehending him and obtaining evidence. ¶3. (S) Krehlik opined that, given Dubai's large Iranian community and the relative ease of using the Internet for transactions, Frosch could easily continue his business relations from Dubai. In an aside, Krehlik said that he had conducted searches for Frosch's name on the Internet and found multiple Web-based queries for products of export concern. McCaw