DEMARCHE DELIVERED ON IRANIAN EFFORTS TO BUY SPANISH-MADE MILLING MACHINE

S E C R E T MADRID 000979



SIPDIS



DEPARTMENT FOR ISN/MTR: JOHN PAUL HERRMANN AND FOR ISN/MTR,

EUR/WE, EUR/PRA,



E.O. 12958: DECL: 09/11/2033

TAGS: MTCRE, PARM, PREL, ETTC, MNUC, TSPA, SP, IR

SUBJECT: DEMARCHE DELIVERED ON IRANIAN EFFORTS TO BUY

SPANISH-MADE MILLING MACHINE



REF: A. SECSTATE 81940

B. 07 MADRID 130

C. 05 MADRID 3754

D. 05 STATE 191240



Classified By: DCM Arnold A. Chacon for reasons 1.4 (b),(c) and (d)



1. (S) PolOff met MFA and Ministry of Industry, Tourism, and

Commerce (MITC) officials to deliver points and give a copy

of REFTEL A's non-paper alerting the GOS of an Iranian

company's attempts to procure a computer numerically

controlled milling machine from the Spanish firm Maquinaria

CME, S.A.



2. (S) At the MITC on September 10, PolOff met Manuel Sanchez

Melero, Assistant Deputy DG for the Control of Foreign

Commerce in Defense and Dual-Use Material, and Conrado Igea

Calleja, Chief of Export Controls on Dual-Use Material, who

was introduced as the GOS expert on Spanish dual-use exports

to Iran. Upon reading the non-paper, Igea acknowledged that a

five-axis milling machine would indeed fall under the

parameters of the Wassenaar Agreement. Both gentlemen

concurred that Maquinaria would need an export license for

such a transaction with an Iranian company and that these

licenses are approved on a transaction-by-transaction basis

in situations such as this that included sensitive technology

and concerns about the past history and affiliation of the

purchasing company. Without the export license, Maquinaria

would not be able to legally sell its product abroad.



3. (S) PolOff mentioned that the same non-paper had been

shared with MFA officials a week earlier, which pleased the

MITC officials. (On September 3, Poloff met Gonzalo de

Salazar, the new Deputy DG for Non-Proliferation &

Disarmament, and Carlos Torres Vidal, Counselor for Nuclear

Non-Proliferation and Disarmament. As Salazar is new, he was

not familiar with the history of previous US-Spanish

cooperation on this case. Vidal also did not appear familiar

with it. However, they commented that, in accordance with

Spanish laws, any effort by Maquinaria to sell the milling

machine to the Iranian company would be denied.)



4. (C) Sanchez Melero, aware that PolOff had only recently

arrived in-country, explained the next steps that the GOS

would take at its scheduled inter-ministerial council on

sensitive items. The MFA, MITC, the Ministry of the Economy

and Finance, Spanish Customs, the Spanish National Police,

the Guardia Civil, and the National Intelligence Center (CNI)

all attend this council. A working group meets every month

and then items are forwarded to a higher level approximately

7-10 days later.



5. (S) Upon exiting the meeting, Sanchez Melero introduced

PolOff to Ramon Muro, the Deputy DG for the Control of

Foreign Commerce in Defense and Dual-Use Material. Sanchez

Malero and Igea assured PolOff they would inform Muro of the

items discussed in our meeting. COMMENT: Of the three

officials at the MITC, Muro is the most senior and appears to

be the institutional memory on the topic, as he had received

the 2005 demarche (REFTEL C) on Maquinaria's previous

questionable business interests with Iranian companies, as

reported in REFTEL D.

Aguirre