(S) PROVIDING THE GOS INFORMATION ON SWISS FIRM

S E C R E T STATE 026066 SIPDIS E.O. 12958: DECL: 03/12/2033 TAGS: PARM MTCRE PREL MNUC ETTC IR SZ SUBJECT: (S) PROVIDING THE GOS INFORMATION ON SWISS FIRM BBE'S PROLIFERANT ACTIVITY REF: A. 06 BERN 2040 AND PREVIOUS ¶B. 06 STATE 184735 ¶C. 07 STATE 66183 AND PREVIOUS ¶D. 07 STATE 80777 Classified By: ISN/MTR DIRECTOR PAM DURHAM FOR REASONS 1.4 (B),(D),AND (H). ¶1. (U) This is an action request. Embassy Bern please see paragraph 5. ¶2. (S) BACKGROUND: Per Refs C and D, since October 2005 the United States and Switzerland have been engaged in a dialogue regarding the activities of the Swiss-based entity BB Engineering - a firm that has been procuring items on behalf of Iranian ballistic missile and defense programs. We last discussed this case with Switzerland in June 2007, when visiting Swiss Secretariat of Economic Affairs (SECO) chief Dr. Othmar Wyss met with ISN/MTR to discuss this case and other nonproliferation-related issues (Ref C). During this meeting, we shared information indicating that BBE had offered to supply Iran's Sabalan Co. with a variety of integrated circuits - most of U.S.-origin. (Note: Sabalan is a front company for Iran's primary liquid-fueled ballistic missile program. End note.) Wyss informed us that BBE and its proprietor, Miroslav Hertl, were being prosecuted in a criminal court, but provided no details, saying the case was in the hands of the federal prosecutor. Since this June 2007 meeting, we have not had the occasion to raise any further proliferant activity by BBE with the GOS, nor have we received any detailed information related to the Swiss prosecution of BBE. ¶3. (S) However, we now have new information indicating that BBE continues its work to supply goods to Iranian missile entities. Specifically, we understand that in mid-January 2008, BBE shipped a consignment of unspecified items to Iran's Technical Engineering Nikan (TEN) Group. While the contents of the shipment are unknown to us, our primary concern is that BBE appears to have resumed its efforts to act as a supplier to Iranian entities of concern. The TEN Group is affiliated with the Sanam Industrial Group (SIG) and the Samen al-A'emmeh Industries Group (SAIG - also known as the Cruise Missile Industry Group - CMIG). Both SIG and CMIG are sanctioned under United Nations Security Council Resolution 1747 for their involvement in Iran's missile program. ¶4. (S) Objectives: We want to share this �A;information with Swiss authorities, and request that they provide us with the latest information on the status of the legal case against BBE, as well as any updates they may have on a separate ongoing prosecution of Opteco Trading GmbH, another Swiss firm with a history of involvement in proliferation to Iran (Refs A and B). ¶5. (U) ACTION REQUEST: Request Embassy Bern provide the talking points in paragraph 6 below to appropriate Swiss officials, and report response. Talking points may also be left as a non-paper. END BACKGROUND ¶6. (S/REL SWITZERLAND) BEGIN TALKING POINTS -- We would like to raise with you a matter of proliferation concern and request your government's assistance in investigating this activity. -- On many occasions since October 2005, we have discussed cooperation between the Swiss-based firm BB Engineering and entities affiliated with Iran's defense, missile, and UAV programs. -- We greatly appreciate your efforts to address the proliferant activities of BBE and for providing us with updates regarding your investigation into this firm and its proprietor, Miroslav Hertl. -- When we last spoke with you about BBE's activities, we learned that BBE and its proprietor, Miroslav Hertl, were being prosecuted in a criminal court. -- We appreciate the efforts you have made in this case, and it is in this spirit that we would like to provide you with additional information on this firm's assistance to Iran's missile program. -- The U.S. has information indicating that in mid-January 2008, BBE shipped a consignment of unspecified goods to Iran's Technical Engineering Nikan (TEN) Group. The goods were shipped from Dubai to Tehran on Emirates Airlines flight EK- ¶977. -- While the contents of the shipment are not known to us, we are concerned that BBE continues its proliferant activities with Iranian entities of concern. -- TEN Group is affiliated with the Sanam Industrial Group (SIG) and the Samen al-A'emmeh Industries Group (SAIG - also known as the Cruise Missile Industry Group - CMIG). Both SIG and CMIG are named in UNSCR 1747 as being involved in Iran's missile programs. -- As you are aware, paragraph 12 of UNSCR 1737 states that States shall freeze all "funds, other financial assets and economic resources which are on their territories at the date of adoption of this resolution or at any time thereafter that are owned or controlled y the persons or entities designated in the Annex..." Therefore, transfers of any goods to UNSCR designated entities should be frozen. -- We hope this information is useful to you, and would appreciate hearing the status of the legal proceedings against BBE. -- We would also be grateful for any information you can provide related to Switzerland's prosecution of Opteco Trading GmbH, another firm we have discussed with you due to its involvement in proliferation-related activities. END TALKING POINTS. ¶7. (U) Please contact ISN/MTR's John Paul Herrmann with any questions or follow-up issues related to this case (202-647-1430 - herrmannjp@state.sgov.gov) and slug reporting on this issue for ISN/MTR. ¶8. (U) A word version of this document will be posted at www.state.sgov.gov/demarche. RICE NNNN End Cable Text