GERMANY APPRECIATES INFORMATION ON U.S. FIRMS

C O N F I D E N T I A L BERLIN 000041 SIPDIS SIPDIS, P, T, E, ISN, NEA/IR, EUR, EEB E.O. 12958: DECL: 01/09/2018 TAGS: EFIN ETTC KNNP PARM PREL IR GM SUBJECT: GERMANY APPRECIATES INFORMATION ON U.S. FIRMS DOING BUSINESS WITH IRAN, ANALYZING 2007 IMPORT STATISTICS REF: 07 STATE 169473 Classified By: EMIN Robert A. Pollard for reasons 1.4 (b) and (d). ¶1. (C) German officials tell us that the information Washington provided in Reftel on U.S. enforcement of Iran sanctions will support their ongoing efforts to discourage German business ties with Iran. Nevertheless, German business associations cite the National Intelligence Estimate in continuing to argue against further cuts in trade. Separately, we learned that petroleum products and commodities comprised the bulk of the 40 percent projected increase in German imports from Iran in 2007. ¶2. (C) As part of Embassy's ongoing advocacy efforts with the German Government on the importance of curtailing business ties with Iran, EMIN and EconOffs delivered Reftel points to key German officials in the Chancellery, MFA, Economics Ministry, and Finance Ministry. Our interlocutors include MFA Director General for Economic Affairs Ruediger von Fritsch, Federal Chancellery Director General for Economic Affairs Jens Weidmann, Economics Ministry Director General for International Economic Affairs Karl-Ernst Brauner, and Finance Ministry Deputy Director General for International Economic and Financial Policy Rolf Wentzel. ¶3. (C) On January 10, von Fritsch expressed appreciation for the promptness of the U.S. response to German allegations that the U.S. firm Data Card Group was engaging in (presumably illicit) business with Iran. EMIN and EconOffs continue to encourage German Government officials to share any information they have regarding other U.S. firms operating in Iran so that OFAC and other U.S. authorities can investigate as appropriate. ¶4. (C) We raised with von Fritsch the January 9 article in the German newspaper Handelsblatt that claimed imports from Iran amounted to about 580 million euros ($853 million) in 2007, up almost 50 percent from the year before. Von Fritsch said he understood the USG's sensitivity about the import figures and noted he had already instructed his staff to analyze the statistics. Von Fritsch speculated that the increase was probably due to the sharp rise in prices of petroleum and related products in 2007. A contact from the German Federation of Industry (BDI) separately said the same thing. Von Fritsch promised to let us know when he found out more. ¶5. (U) While detailed German import statistics, broken down by product category, only reflect the first 10 months of the year, post's preliminary analysis indicates that the bulk of the increase is primarily due to a rise in imports of oil and natural gas and commodities. On an annualized basis, the statistics indicate a 40 percent increase in imports from Iran (164 million euro increase),up from 410 million euros in 2006 to 574 million euros in 2007. The total value of petroleum imports alone increased by 151 percent (97 million euros),from 64 million euros to 161 million. The other top product categories were partially processed raw materials (30 million euro increase),steel and other sheet metal (14.5 million euro increase),and pharmaceutical-related products (11.7 million euro increase). TIMKEN JR