Identifier
Created
Classification
Origin
07BERLIN1395
2007-07-13 15:35:00
SECRET
Embassy Berlin
Cable title:
GERMAN GOVERNMENT NOTIFIED ABOUT A PROBLEMATIC
how-toVZCZCXYZ0000 PP RUEHWEB DE RUEHRL #1395 1941535 ZNY SSSSS ZZH P 131535Z JUL 07 FM AMEMBASSY BERLIN TO SECSTATE WASHDC PRIORITY 8797
S E C R E T BERLIN 001395
SIPDIS
STATE FOR INR/EC AND EUR/AGS
SIPDIS
E.O. 12958: DECL: 07/13/2032
TAGS: ETTC PREL IR GM
SUBJECT: GERMAN GOVERNMENT NOTIFIED ABOUT A PROBLEMATIC
SALE TO IRAN
REF: STATE 91418
Classified By: Acting Minister-Counselor for Economic Affairs Douglas B
. Neumann, for reasons 1.4 (d).
1, (S) Global Affairs officer delivered ref demarche to
Holger Michael, office director of the German MFA's Division
for Basic Issues and Instruments for Foreign Trade and
Payments Promotion, Associations, Chambers, and Trade Fairs,
and Dirk Rotenberg, office director of the MFA's Division for
Export Credit Guarantees (Hermes),July 5. Michael and
Rotenberg said they were unaware that a German firm, possibly
Siemens, was pursuing a major deal to supply compressors for
the natural gas sector to Iran. Rotenberg noted, however,
that if a German firm wishes to invest in Iran or sell goods
there, it would have to notify the German Government in some
fashion. German firms must apply for an export credit
guarantee with the German Government when planning to invest
in Iran. If a German firm wishes to export controlled goods,
then it must apply for an export license with the German
Federal Economic and Export Licensing Agency (BAFA). Either
way, the German Government would be notified of planned trade
with Iranian entities and would deny any application to
export controlled goods. Rotenberg added that Germany abides
by the EU Regulations to implement UNSCRs 1737 and 1747 and
therefore ships no listed goods to the individuals or
entities named on the UNSCR Annexes. Furthermore, these EU
Regulations bar the export of goods listed by the Nuclear
Suppliers Group (NSG) and Missile Technology Control Regime
(MTCR) to Iran. In addition, the EU created its own list of
additional items to be barred from Iran by EU member states,
and BAFA is creating its own list of controlled goods.
Michael cited Germany's adherence to the EU Regulations and
BAFA list of goods barred from Iran as evidence that German
firms are not conducting "business as usual" with Iran.
Nevertheless, neither official, when pressed, offered to have
the German Government investigate this deal or prohibit it in
any way.
2. (S) Michael said the German Government believes that the
most effective approach for curbing trade with Iran is for
German industry to stop investing there of its own volition.
Without giving data, Michael said German trade with Iran
declined in the first half of 2007, indicating that German
firms recognize the risk of doing business in Iran.
Furthermore, Michael said, Germany introduced a measure in
the OECD for export credit agencies to downgrade Iran's
credit risk from risk category five to six, which is one step
away from the lowest grade of credit risk. Rotenberg noted
that the German export credit agencies cut the export credit
guarantees in half in 2007, compared to 2006. German
industry recognizes the increased risk of investing in Iran,
the two officials said, and is aware of legislation
pertaining to trade with Iran.
3. (S) Michael discussed using economic pressure on Iran to
prompt it to comply with UNSCRs 1737 and 1747, advocating
that this be incremental. He also noted how closely Germany
is working with its EU3 partners France and the United
Kingdom on the next round of UN sanctions. For sanctions to
be effective, Michael said, they must be universally applied.
4. (U) Post will report any additional German response septel.
TIMKEN JR
SIPDIS
STATE FOR INR/EC AND EUR/AGS
SIPDIS
E.O. 12958: DECL: 07/13/2032
TAGS: ETTC PREL IR GM
SUBJECT: GERMAN GOVERNMENT NOTIFIED ABOUT A PROBLEMATIC
SALE TO IRAN
REF: STATE 91418
Classified By: Acting Minister-Counselor for Economic Affairs Douglas B
. Neumann, for reasons 1.4 (d).
1, (S) Global Affairs officer delivered ref demarche to
Holger Michael, office director of the German MFA's Division
for Basic Issues and Instruments for Foreign Trade and
Payments Promotion, Associations, Chambers, and Trade Fairs,
and Dirk Rotenberg, office director of the MFA's Division for
Export Credit Guarantees (Hermes),July 5. Michael and
Rotenberg said they were unaware that a German firm, possibly
Siemens, was pursuing a major deal to supply compressors for
the natural gas sector to Iran. Rotenberg noted, however,
that if a German firm wishes to invest in Iran or sell goods
there, it would have to notify the German Government in some
fashion. German firms must apply for an export credit
guarantee with the German Government when planning to invest
in Iran. If a German firm wishes to export controlled goods,
then it must apply for an export license with the German
Federal Economic and Export Licensing Agency (BAFA). Either
way, the German Government would be notified of planned trade
with Iranian entities and would deny any application to
export controlled goods. Rotenberg added that Germany abides
by the EU Regulations to implement UNSCRs 1737 and 1747 and
therefore ships no listed goods to the individuals or
entities named on the UNSCR Annexes. Furthermore, these EU
Regulations bar the export of goods listed by the Nuclear
Suppliers Group (NSG) and Missile Technology Control Regime
(MTCR) to Iran. In addition, the EU created its own list of
additional items to be barred from Iran by EU member states,
and BAFA is creating its own list of controlled goods.
Michael cited Germany's adherence to the EU Regulations and
BAFA list of goods barred from Iran as evidence that German
firms are not conducting "business as usual" with Iran.
Nevertheless, neither official, when pressed, offered to have
the German Government investigate this deal or prohibit it in
any way.
2. (S) Michael said the German Government believes that the
most effective approach for curbing trade with Iran is for
German industry to stop investing there of its own volition.
Without giving data, Michael said German trade with Iran
declined in the first half of 2007, indicating that German
firms recognize the risk of doing business in Iran.
Furthermore, Michael said, Germany introduced a measure in
the OECD for export credit agencies to downgrade Iran's
credit risk from risk category five to six, which is one step
away from the lowest grade of credit risk. Rotenberg noted
that the German export credit agencies cut the export credit
guarantees in half in 2007, compared to 2006. German
industry recognizes the increased risk of investing in Iran,
the two officials said, and is aware of legislation
pertaining to trade with Iran.
3. (S) Michael discussed using economic pressure on Iran to
prompt it to comply with UNSCRs 1737 and 1747, advocating
that this be incremental. He also noted how closely Germany
is working with its EU3 partners France and the United
Kingdom on the next round of UN sanctions. For sanctions to
be effective, Michael said, they must be universally applied.
4. (U) Post will report any additional German response septel.
TIMKEN JR