MALAYSIA-BASED, IRANIAN-RUN PROCUREMENT FIRM

S E C R E T STATE 107113

SIPDIS

E.O. 12958: DECL: 10/07/2033
TAGS: PARM PREL ETTC MTCRE KSCA GM IR ML SN
SUBJECT: MALAYSIA-BASED, IRANIAN-RUN PROCUREMENT FIRM
WORKS TO ACQUIRE GERMAN-ORIGIN TRANSDUCERS (S)

Classified By: ACTING ISN/MTR DIRECTOR RALPH PALMIERO FOR REASONS 1.4
(B) AND (D).


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


2. (S) Background: The U.S. has information
indicating that a Malaysia-based entity with ties to
Iran's ballistic missile program was working to procure
goods manufactured by the German firm Hottinger Baldwin
Messtechnik (HBM) on behalf of Iranian end-users.
Specifically, we understand that in early September
2008, Malaysia's Evertop Services, in coordination with
Singapore's QT Instruments and Malaysia's Bio-Focus
Saintifik, was making arrangements to receive a
shipment of HBM transducers at its offices in Kuala
Lumpur. We also understand that - in response to
concerns HBM expressed related to this transaction -
Evertop, QT Instruments and Bio-Focus Saintifik
undertook efforts to ensure that HBM remained unaware
that the ultimate end-user was Iranian. In addition to
this activity, Evertop and Bio-Focus had been working
since at least June 2008 to procure pressure gauges and
other equipment from HBM, and in early August,
Evertop's Iranian parent company was negotiating with
QT Instruments for the purchase of HBM-supplied load
cells. Although Evertop is based in Malaysia, it is an
Iranian-run entity that has facilitated many
transactions on behalf of Iranian end-users of concern,
including the Shahid Hemmat Industrial Group (SHIG -
Iran's primary liquid-propellant ballistic missile
developer),and entities affiliated with Iran's
unmanned aerial vehicle program.


3. (S) Objectives: We want to bring this information
to the attention of FRG authorities in order to alert
them to HBM's business relationship with Evertop and to
urge German officials to carefully consider sales to
Evertop or any affiliated entities during their export
licensing deliberations.


4. (S) Action Request: Department requests Embassy
Berlin approach appropriate host government officials
to deliver talking points in paragraph 5. Talking
points can be left as a non-paper.


5. (S) Begin talking points/non-paper:

(SECRET//REL GERMANY)

-- We would like to raise with you a matter of
proliferation concern and request your government's
assistance in investigating this activity.

-- We have information indicating that as of September
2008, Malaysia's Evertop Services, an entity that has
been associated with the Shahid Hemmat Industrial Group
(SHIG),was engaged in efforts to procure goods from
the German firm Hottinger Baldwin Messtechnik GmbH
(HBM).

-- As you are aware, SHIG is Iran's primary developer
of ballistic missiles and an entity designated by UN
Security Council Resolution 1737.

-- Evertop Services is an Iranian-run procurement firm
that has facilitated many transactions on behalf of
Iranian end-users of concern, including SHIG and
entities affiliated with Iran's unmanned aerial vehicle
program.

-- We understand that in early September 2008, Evertop
Services was making arrangements to receive a shipment
of HBM-manufactured transducers at its offices in Kuala
Lumpur.

-- While transducers have potential uses in ballistic
missile and UAV programs, they are not controlled by
any of the multilateral export control regimes and are
widely used in many commercial applications.

-- Evertop Services is coordinating this activity with
a Singapore-based firm, QT Instruments, and Malaysia's
Bio-Focus Saintifik Sdn. Bhd.

-- We understand that, due to concerns HBM has
expressed about this transaction, QT Instruments has
worked with Evertop Services to produce end-user
documentation that would be acceptable to HBM.

-- As part of this effort to satisfy HBM's concerns,
Evertop Services has arranged direct shipment of these
transducers to Bio-Focus Saintifik and taken efforts to
ensure HBM is unaware that Evertop will retransfer them
to Iran once the transducers are received from Bio-
Focus Saintifik.

-- In addition to this effort to procure transducers,
we understand that Evertop Services had been working
with Bio-Focus Saintifik and QT Instruments since at
least June 2008 to procure pressure gauges and other
equipment from HBM.

-- Moreover, in separate activity, as of early August,
Iran's Farazeh Equipment Distributor Company (FEDCO)
was negotiating the purchase of HBM-supplied C-16 load
cells with QT Instruments.

-- FEDCO is the parent company of Evertop and several
other foreign firms it uses to procure electronic
components and technology for Iranian entities.

-- While not specifically controlled under the Missile
Technology Control Regime (MTCR) Annex, we believe Iran
may intend to use these load cells in its development
of missile ground support equipment.

-- We are bringing this information to your attention
to alert you to Evertop's history of procurement for
Iranian end-users and urge you to carefully consider
sales to Evertop or any affiliated entities during your
export licensing deliberations.

-- We look forward to hearing of any actions your
government takes in response to this information.


6. (U) Please contact ISN/MTR's John Paul Herrmann
with any questions or follow-up related to this case
(202-647-1430 - herrmannjp2@state.gov or
herrmannjp@state.sgov.gov) and slug reporting on this
issue for ISN/MTR, EUR/CE, EUR/PRA and EAP/MTS.


7. (U) A Word version file of this document will be
posted at www.state.sgov.gov/demarche.
RICE