IRANIAN BALLISTIC MISSILE PROGRAM'S CONTINUED INTEREST IN PROCURING VACUUM FURNACE FROM SOUTH AFRICA (S)

S E C R E T STATE 109819

SIPDIS

E.O. 12958: DECL: 10/14/2033
TAGS: PARM, MTCRE, PREL, SF, IR
SUBJECT: IRANIAN BALLISTIC MISSILE PROGRAM'S CONTINUED
INTEREST IN PROCURING VACUUM FURNACE FROM SOUTH AFRICA (S)

REF: A. STATE 53303
B. PRETORIA 1122

Classified By: ISN/MTR DIRECTOR PAM DURHAM FOR REASONS 1.4
(B),(C),AND (D).

1. (U) This is an action request. Embassy Pretoria,
please see paragraph 5.

2. (S) Background: In May 2008, the USG shared with
the SAG information indicating that as of mid-
February 2008, a representative of the Iran-based
firm M.S. Company provided Iran's Sabalan Company
with technical specifications for a VGT-1200-1200
high temperature vacuum furnace manufactured by the
South African firm Prestige Thermal Equipment Pty.
Ltd. (Ref A). Sabalan is affiliated with the Shahid
Hemmat Industrial Group (SHIG),Iran's primary
developer of liquid-fueled ballistic missiles. South
African Deputy Director for Nuclear Disarmament and
Non-Proliferation Michiel Combrink agreed to act
"immediately" on the information we provided and to
provide informal feedback on this matter if at all
possible (Ref B). (Note: We have not yet received
any such update. End note.) While vacuum furnaces
are not controlled by the Missile Technology Control
Regime (MTCR) and are used in many commercial
applications, the VGT-1200-1200 would be very well-
suited to annealing and brazing processes in a
missile production facility. Paragraph 4 of UN
Security Council Resolution 1737 requires UN Member
States to take measures to prevent the transfer to
Iran of any item that the State determines would
contribute to the development of nuclear weapon
delivery systems. This transfer would be
inconsistent with this provision of UNSCR 1737.

3. (S) We now have information indicating that as of
July 2008, Iran's ballistic missile program continued
to seek a vacuum furnace from Prestige Thermal
Equipment Pty. Ltd. Specifically, the Iranian
intermediary Mehrfam Sepahan Company (likely the same
firm as the "M.S. Company" previously discussed with
the SAG in May) received a quotation for a horizontal
vacuum heat treating and brazing furnace (model HG
8812-2G) manufactured by Prestige. As in the case we
raised in May, the Mehrfam Sepahan Company sought
this equipment on behalf of SHIG. Like the VGT-1200-
1200, this vacuum furnace is not controlled by the
MTCR. However, it is well-suited to producing
combustion chambers for liquid rocket engines.

4. (S) Objective: We want to raise this matter with
South African authorities and urge them to
investigate this information with a view towards
ensuring that South African firms are not involved in
the supply of sensitive technologies to SHIG or other
Iranian ballistic missile entities, even
inadvertently.

5. (S) Action Request: Request Embassy Pretoria
approach appropriate host government officials to
deliver talking points in paragraph 6 below and
report response. Talking points also may be provided
as a non-paper.

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

(SECRET//REL SOUTH AFRICA)

-- In the spirit of our nonproliferation cooperation,
we would like to alert you to a matter of potential
proliferation concern and request your assistance in
investigating this activity.

-- In May 2008, we shared with your government
information indicating that as of mid-February 2008,
Dr. Shokrola Masihpour of Iran's M.S. Company
provided to the Sabalan Company technical
specifications for a VGT-1200-1200 high temperature
vacuum furnace.

-- As we noted then, the Sabalan Company is
affiliated with the Shahid Hemmat Industrial Group
(SHIG),Iran's primary developer of liquid-fueled
ballistic missiles and an entity designated as
subject to targeted sanctions under UN Security
Council Resolution 1737.

-- The M.S. Company advised Sabalan to establish a
letter of credit for the South African company
Prestige Thermal Equipment Pty Ltd. at the First
National Bank, Wadeville branch, South Africa.

-- We now have additional information indicating that
as of July 2008, Iran's ballistic missile program
continued to seek a vacuum furnace from Prestige
Thermal Equipment.

-- Specifically, we understand that the Iranian
intermediary Mehrfam Sepahan Company (likely the same
firm as the "M.S. Company" we discussed with you in
May) received a quotation for a horizontal vacuum
heat treating and brazing furnace (model HG 8812-2G)
manufactured by Prestige Thermal Equipment.

-- As in the case we raised with you in May, the
Mehrfam Sepahan Company sought this equipment on
behalf of SHIG.

-- While this vacuum furnace is not controlled by the
Missile Technology Control Regime (MTCR),it is well-
suited to producing combustion chambers for liquid
rocket engines.

-- As such, in our view, transfer of this vacuum
furnace to Iran would be inconsistent with UNSCR
1737, which requires UN Member States to take
measures to prevent the transfer to Iran of any items
that the State determines would contribute to the
development of nuclear weapon delivery systems.

-- We do not know if Prestige Thermal Equipment is
aware that the end-user in this potential sale is
affiliated with Iran's ballistic missile program.

-- We ask that you investigate this information and
take all appropriate measures to ensure that Prestige
Thermal Equipment is not acting - even unwittingly -
as a source of supply to SHIG (an entity designated
by UN Security Council Resolution 1737 for its
involvement in Iran's ballistic missile program) or
any other entity associated with Iran's ballistic
missile program.

-- We look forward to continued cooperation with your
government on nonproliferation and export control
matters, and would appreciate hearing the results of
any actions you take in response to this information.

End talking points/non-paper

7. (U) Washington POC is ISN/MTR John Paul Herrmann
(Phone: 202-647-1430). Please slug any reporting on
this issue for ISN/MTR.

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