CRITICAL EQUIPMENT NEEDS FOR IRAN,S NEW IR-2

UNCLAS STATE 104182


SENSITIVE

E.O. 12958: N/A
TAGS: KNNP TRGY PREL PARM ETTC MNUC AORC IAEA UNSC JP

SUBJECT: CRITICAL EQUIPMENT NEEDS FOR IRAN,S NEW IR-2
CENTRIFUGE DESIGN: SPECIFIC COMPANY INFORMATION AND
CLARIFICATION ON EPOXY RESIN

REF: A. STATE 021770

B. STATE 039585

C. STATE 052030

D. TOKYO 001556


1. (U) This is an action request. Please see paragraph 4.


2. (SBU) BACKGROUND:

-- On May 15, Washington provided all Nuclear Suppliers Group
(NSG) Participating Governments (PGs) with detailed
information regarding critical commodities Iran requires to
support the deployment of the next generation of gas
centrifuges for its uranium enrichment program (ref C). This
list identified technologies Iran cannot indigenously
manufacture and therefore needs to procure from foreign
suppliers.

-- In response to this information (ref C),the GOJ asked
several questions about the United States, controls on epoxy
resin (ref D) and Washington now has clarifying information
to provide to the GOJ.


3. (SBU) We would also like to provide specific information
to the GOJ regarding major Japanese manufacturers of the
items Iran needs for the IR-2 centrifuge design. The U.S. is
making a similar approach to major supplier countries in
Europe, as well as key transshipment countries. The U.S
intends to approach governments with any new developments in
U.S. efforts to prevent Iranian procurement of critical
commodities.


4. (SBU) ACTION REQUEST: Post is requested to approach
appropriate GOJ officials to deliver the nonpapers in paras 5
and 6. In doing so, post should pursue the following
objectives:

-- Share information on ongoing USG efforts to prevent
Iranian procurement of key gas centrifuge-related commodities
and provide additional information to the GOJ to make them
aware of companies that are major producers of such items in
their country.

-- Encourage the GOJ, if they have not already done so, to
discuss and highlight to businesses and law enforcement
authorities the importance of being vigilant against the
deceptive procurement practices of Iran, particularly as it
relates to items useful in a gas centrifuge program.

-- Provide the GOJ with clarifications regarding epoxy resin
used in centrifuge programs and encourage the GOJ to
carefully review any exports of epoxy resins to Iran.

-- Urge host government to share any relevant information
from their industry outreach activities with the USG, the
NSG, and the IAEA.


5. (U) BEGIN U.S. NON-PAPER.

-- Industry outreach is critical to ensuring that Iran cannot
procure items to advance its WMD programs, including its
uranium enrichment activities.

-- Although the U.S. has enacted comprehensive economic
sanctions against the Iranian government, risks remain and
the U.S. is undertaking various initiatives to raise
awareness among U.S. industry to avoid illicit diversion of
their products. Greater awareness will prevent the unwitting
transfer of items to Iran that may contribute to Iran,s
weapons of mass destruction (WMD) programs, their means of
delivery, or advanced conventional weapons.

-- For example, the U.S. alerts U.S. companies that Iran uses
deceptive tactics to make procurement for its nuclear,
ballistic missile, and advanced conventional weapons programs
appear to be unrelated commercial activities. Iranian
entities also form front companies in other countries for the
sole purpose of sending dual-use items to Iran for use in
these programs. These front companies enable the regime to
obtain materials that the country of origin would typically
prohibit for export to Iran.

-- Therefore, we are asking U.S. companies to be particularly
vigilant about their overseas customers, especially customers
operating in known transshipment countries and countries with
weak or nonexistent export controls.

-- The U.S. government is currently reaching out to U.S.
manufacturers of critical commodities that Iran will need to
procure for its new gas centrifuge design. We are alerting
them to be cautious of unknown customers who could be
procuring items on behalf of Iran,s illicit programs.

-- The U.S. government is also considering additional ways to
alert industry and will keep your government informed of new
developments in our industry outreach initiatives.

-- If you have not already done so, we encourage you to
conduct outreach to your industry to raise awareness
regarding the requirements of export controls for Iran. We
also request that you alert companies to Iran,s deceptive
procurement practices.

-- Targeted outreach to companies known to produce these
critical commodities can sensitize manufacturers and
exporters to Iran,s deceptive procurement tactics and make
them aware of export control regulations which ) consistent
with United Nations Security Council Resolutions (UNSCR)
1803, 1747, and 1737 - prohibit exporting sensitive
commodities that could advance proliferation-sensitive
nuclear activities in Iran, such as uranium enrichment, spent
fuel reprocessing, heavy water production and/or reactor
operation.

-- The following Japanese companies are major producers of
critical commodities that Iran will need to procure for its
new gas centrifuge design.

Carbon Fiber:
-- Toray Group, Nihonbashi Mitsui Tower, 1-1,
Nihonbashi-Muromachi, 2-Chome, Chuo-Ku, Tokyo, 103-8666, Tel:
81-3-3245-5111, website: www.toray.com

-- Toho Tenax, Co., Kasumigaseki Common Gate West Tower,
3-2-1 kasumigaseki, Chiyoda-Ku, Tokyo 100-8585, Tel:
81-3-3506-6506, Website: www.tohotenax.com

-- Mitsubishi Rayon, Co. Ltd., 6-41, Konan 1-Chome,
Minato-Ku, Tokyo, 108-8506, Tel: 81-3-5495-3100, Website:
www.mrc.co.jp

Filament Winding Machines:
-- Kamitsu Seisakusho, Ltd, Techno Park 16-1, Sanda, Hyogo,
669-1339, Tel: 81-79-560-7735, Website: www.kamitsu.co.jp

-- We ask that your government share any relevant
information, such as inquiries your companies receive from
Iranian entities, with the United States, the NSG, and the
IAEA. Information sharing will aid ongoing efforts to track
Iranian procurement attempts and provide additional insight
into Iranian procurement practices.

-- We are seeking ways to present information to broad groups
of likely suppliers, re-exporters or transshipers on the
critical commodities Iran is seeking from foreign suppliers
for its nuclear and missile programs. We welcome your
government,s suggestions on how to best accomplish this and
are open to further discussions at the expert level.

End U.S. NON-PAPER.


6. (U) BEGIN U.S. NON-PAPER ON SPECIFIC QUESTIONS.

Response to Japan,s Questions on Epoxy Resin

Question 1- Concrete features or characteristics of epoxy
resins which may be required to bind carbon fibers used in
centrifuges.

-- Epoxy resins used in the production of carbon fiber rotor
tubes should be resistant to uranium hexafluoride, hydrogen
fluoride, or other fluorinated compounds. If a metal liner
is used in the carbon fiber rotor, however, then the
compatibility with fluorinated compounds is no longer a
concern, and strength is more important. Common epoxy resins
such as bisphenol A diglycidyl ether (Araldite F, Epon 825 or
DER 332) or bisphenol F diglycidyl ether (Epon 828 or DER
354) cured with an aromatic amine such as metaphenylenediamine
(MPDA) (a hardener or catalyst) could be used in this
instance.

Question 2- Specific commercial names of epoxy resins, if any.

-- A number of companies distribute epoxy resin and curing
agent systems. The major manufacturers include: Huntsman
(Araldite is the trade name) which was formerly used by Ciba
Geigy, Hexion Specialty Chemicals (Epon is the trade name)
which was formerly used by Shell, and Dow Epoxy (DER is the
trade name). These producers have distributors worldwide.

Question 3- How does the Government of the United States
control epoxy resins (shipped) to Iran?

-- Since epoxy resin is not controlled by any of the
multilateral export control regimes, it is classified in the
U.S. as EAR99 (which is a U.S. catch-all control) and can be
shipped to most countries of the world without a license. For
Iran, however, the U.S. has enacted extensive economic
sanctions which broadly prohibit exportation, directly or
indirectly, from the United States or by a U.S. person,
wherever located, of any good, technology or service to Iran
or the Government of Iran.

-- The United States is also undertaking a comprehensive
outreach program to sensitize U.S. exporters regarding the
deceptive trade practices of Iran, specifically with regard
to the use of front companies in third countries. This
aggressive outreach will help prevent the diversion of U.S.
origin items (such as epoxy resin)- which are useful for
Iran,s WMD programs, but not controlled for most
destinations- from being diverted to WMD programs.

END U.S. NON-PAPER ON SPECIFIC QUESTIONS.

--------------
REPORTING DEADLINE AND POC
--------------

(U) Post is requested to report any substantive responses
within seven (7) days of receipt of this cable. Lisa Meyers
(ISN/CPI, 202-736-7939, MeyersLA@state.sgov.gov) is the
Department's POC for this activity.
RICE


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