IRAN/CRYSTAL OSCILLATORS: SWISS OFFICIALS ENGAGED

S E C R E T BERN 000594 SIPDIS DEPT FOR ISN/MTR (J.P.HERRMANN),EUR/PRA, AND EUR/CE (Y.SAINT-ANDRE) E.O. 12958: DECL: 11/20/2033 TAGS: PARM MTCRE MNUC ETTC IR SZ SUBJECT: IRAN/CRYSTAL OSCILLATORS: SWISS OFFICIALS ENGAGED ON CASE OF QUARTZCOM AG, REQUEST MORE INFORMATION (S) REF: A. STATE 122304 ¶B. BERN 514 Classified By: POL/E Counselor Richard A. Rorvig; reasons 1.4(b),(c), and (d). ¶1. (U) Contains action request; please see para 5. ¶2. (S) Poloff delivered the reftel A non-paper on November 18 to Juergen Boehler, Head of the Export Controls Licensing Division of the Swiss State Secretariat for Economic Affairs (SECO). Boehler informed poloff that SECO had placed Swiss firm Quartzcom AG on an internal (non-public) customs "Watch List". He reiterated that SECO has imposed a catchall licensing requirement for any Quartzcom AG exports to Malaysia or Iran (reftel B). Boehler reported that the GOS also has concluded from its own investigation that Malaysia-based Evertop Services conducts procurement for the Iranian military. He said that SECO had not yet received from Quartzcom AG the list of all intended end-users for the crystal oscillators that were ordered by Evertop Services. However, Boehler said that SECO had determined that a "partial" shipment of crystal oscillators had been shipped from Quartzcom AG to Iranian firm Delta Electronics via Evertop Services in Malaysia, "possibly before the Swiss government received the USG's information" regarding Evertop Services. He added that Delta Electronics is a procurement entity of the Iranian Aerospace Industries Organization (AIO). ¶3. (S) Boehler remarked that "Quartzcom AG has much legitimate business and cannot simply be shut down." He confided that he does "not have the feeling that Quartzcom AG is a bad company," but underlined that SECO wants to be sure. He concluded by saying that it is conceivable that the Iranians have suggested the use of other intermediaries to Quartzcom AG, and emphasized the GOS would follow up further on the matter. ¶4. (S) On November 20, Boehler informed poloff that the GOS had looked into the case further, and based on the information available, there were several possible scenarios regarding alternate intermediaries or shipping addresses. While thanking the USG for the information in reftel A, he said that it would be very helpful to have additional details, if the USG could supply them, regarding the possible alternate intermediaries or shipping addresses. He added that it also would be useful if the USG could provide additional information indicating whether the Swiss firm Quartzcom AG is complicit in efforts to circumvent Swiss export controls, or is being "instrumentalized" by the Iranian entities involved. He said that, if the USG could share additional details with the GOS, it would assist GOS enforcement efforts, and also would facilitate GOS information sharing with the USG in this case. Boehler mentioned that if the USG would prefer to provide such information via U.S.-Swiss intelligence channels, that also would be acceptable as appropriate Swiss intelligence officials already were aware of the case. ¶5. (U) Action Request: Post requests Department's assistance in conveying SECO's request for additional details (per para 4),if available, to appropriate USG authorities. Post also would appreciate guidance for responding to SECO's request for additional details in this case. CONEWAY