(S) SHIPMENT OF AMMONIUM NITRATE FROM IRAN

S E C R E T STATE 111835


E.O. 12958: DECL: 10/21/2033
TAGS: PARM PREL IR MU

SUBJECT: (S) SHIPMENT OF AMMONIUM NITRATE FROM IRAN

Classified By: ISN PDAS Patricia A. McNerney,
E.O. 12958 Reasons 1.4 (b),(c),and (d)

SUMMARY
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1. (S//REL Oman) We have received information that Oman's
Detonator Blasting and Contracting Company LLC purchased 400
metric tons of ammonium nitrate from the Iranian firm SAD
Import and Export, a cover name used by Iran's Defense
Industries Organization (DIO). Iran's Bank Saderat
facilitated the transaction. DIO is designated under United
Nations Security Council Resolution 1737 as an entity
involved with Iran's ballistic missile program, making it
subject to an asset freeze. Firms should not be doing
business with DIO or any other UNSCR-designated Iranian
entity, even if the transaction involves dual-use items
intended for civilian end-users in Oman.


2. DIO was also designated under U.S. Executive Order (E.O.)
13382 on March 30, 2007, for engaging in activities that
materially contributed to the development of Iran's nuclear
and missile programs. Bank Saderat was designated on October
25, 2007, under E.O. 13224, for being used by the Government
of Iran to channel funds to terrorist organizations,
including Hizballah, Hamas, PFLP-GC, and Palestinian Islamic
Jihad. Any entity in Oman's jurisdiction found to be
providing or attempting to provide support to DIO or other
entities designated under E.O. 13382 or E.O. 13224, or any
entity that is owned or controlled by, or acting for or on
behalf of DIO or Bank Saderat, may be subject to designation
under these Executive Orders.


ACTION REQUEST
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3. (S//REL Oman) Post is instructed to approach appropriate
host-nation officials and request that they investigate this
transfer. Post may draw from summary, objectives, or talking
points/non-paper below, as appropriate.

OBJECTIVES
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4. (S//REL Oman) In addition to asking that Omani officials
investigate this transfer, Post should encourage Omani
officials to engage Oman's business community and explain the
restrictions -- due to implementation of UN sanctions -- of
doing business with DIO or other Iranian entities designated
by the UN Security Council for their involvement in Iran's
nuclear or ballistic missile development efforts.

TALKING POINTS/NON-PAPER
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5. (S//REL Oman) Begin points/non-paper:

-- We would like to bring to your attention a recent
transaction involving an Omani entity and an Iranian firm
designated under UN Security Council Resolution (UNSCR) 1737.
Our information indicates that this transaction involved
violations of the measures imposed in that resolution.

-- Specifically, Oman's Detonator Blasting and Contracting
Company LLC (DBCC) purchased 400 metric tons of ammonium
nitrate porous prills from Iran's SAD Import and Export
Company. SAD Import and Export is a name used by Iran's
Defense Industries Organization (DIO). DIO is designated in
the annex to UNSCR 1737 for its involvement in Iran's
ballistic missile program.

-- Our information indicates that DBCC transferred 774,473
United Arab Emirate dirhams (AED) to SAD Import and Export.
The money was first transferred to the Dubai, UAE branch of
Iran's Bank Saderat, then transferred again to the Central
Branch of Bank Saderat.

-- Ammonium nitrate has both civilian and military explosives
uses, but is not controlled by any multilateral
nonproliferation export control regime. However, as noted
above, DIO is an entity designated as subject to targeted
sanctions under UNSCR 1737. Paragraph 12 of UNSCR 1737
requires member states not only to freeze the economic assets
of entities designated in the annex to the resolution, but
also to ensure that no funds or other economic resources are
provided to such entities by any individuals or entities
within their territories. DBCC,s transfer of funds to SAD
Import and Export/DIO ) regardless of the nature of the
underlying transaction ) constitutes a clear violation of
paragraph 12 of UNSCR 1737.

-- Such transactions also provide Iranian military entities
with a source of funding that could support additional
Iranian military and WMD-related developments or
procurements. Doing business with DIO also sends the wrong
signal to Iran of "business as usual" at a time of increasing
international concern over its nuclear program.

-- We would also note that DIO was also designated under U.S.
Executive Order (E.O.) 13382 on March 30, 2007, for engaging
in activities that materially contributed to the development
of Iran's nuclear and missile programs. As a result of
designation under this E.O., all of DIO's assets that are
subject to U.S. jurisdiction are blocked and may not be
transferred, withdrawn, or otherwise dealt in.

-- Firms in your jurisdiction risk designation under E.O.
13382 if they act or purport to act for or on behalf of,
directly or indirectly, DIO or any other E.O. 13382
designated entity, and/or if they provide, or attempt to
provide, financial, material, technological, or other support
for, or goods or services in support of any designated entity.


-- We therefore request that you investigate this transfer,
share with us the results of your investigation, and
recommend that you take steps to ensure full compliance with
UNSCR 1737 and prevent further transactions of this nature by
Omani firms.

REPORTING DEADLINE
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6. (U) Please report any substantive response by 3 November.

POINT OF CONTACT
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7. (U) For follow-up information, please contact Mark Felipe,
ISN/CPI, 202-647-5376, felipem2@state.sgov.gov.


8. (U) Department thanks Post for its assistance. Please
slug all responses for NEA, ISN, and T.
RICE


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