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