ITALIAN MACHINE TOOLS SOLD TO IRANIAN CLIENTS VIA

S E C R E T STATE 055497 SIPDIS E.O. 12958: DECL: 05/23/2033 TAGS: PARM MTCRE PREL IT IR SUBJECT: ITALIAN MACHINE TOOLS SOLD TO IRANIAN CLIENTS VIA TURKISH BASED DISTRIBUTOR (S) Classified By: ISN/MTR DIRECTOR PAM DURHAM REASONS 1.4 (B),(C) AND (D). ¶1. This is an action request. Embassy Rome, please see paragraph 4. ¶2. (S) Background: The U.S. has information that the Italian machine tool manufacturer, CMS Industries, sold computer numerical controlled (CNC) processing machines to clients in Iran. Specifically, CMS Industries sold to Iranian clientele 5-axis CNC processing machines - controlled by the Nuclear Suppliers Group (NSG) and Wassenaar Arrangement (WA) - designed to work with advanced materials such as aluminum and composite materials. CMS Industries used a Turkish-based intermediary, Art Makina, in order to avoid selling controlled items directly to Iran. ¶3. (S) Objective: Given that the CNC processing machines sold to Iran are both NSG- and WA-controlled and potentially could be used to support Iranian weapons programs, we want to urge Italian authorities to investigate this activity and use all appropriate measures to prevent firms in Italy from acting as a source of supply to Iran. ¶4. (S) Action Request: Request Embassy Rome approach appropriate host government officials to deliver talking points/non-paper in paragraph 5 below and report response. Talking points also may be provided as a non-paper. ¶5. (S) Begin talking points/non-paper: (SECRET REL ITALY) -- In the spirit of nonproliferation cooperation, we would like to raise with you a matter of proliferation concern and request your assistance in investigating this activity. -- The U.S. has information that the Italian machine tool manufacturer CMS Industries sold 5-axis computer numerical controlled processing machines to clients in Iran via a Turkish-based machine tool distributor Art Makina. -- We understand that the CNC processing machines sold by CMS Industries are designed to work with advanced materials such as aluminum and composite materials and are controlled by the Nuclear Suppliers Group and Wassenaar Arrangement. -- We believe CMS Industries is intentionally avoiding selling controlled items directly to Iran. -- We are providing you this information to support your export control efforts and hope you will investigate this activity to ensure CMS Industries is not exporting machine tools to Iran that could be used to support Iranian weapons programs. -- We look forward to future cooperation on nonproliferation issues and to hearing the results of your inquiries into this matter at the earliest possible time. ¶6. (U) Washington POC is ISN/MTR April Jones (Phone: 202-647-3176). Please slug any reporting on this issue for ISN/MTR, EUR/PRA, and EUR/WE. End talking points/non-paper ¶7. (U) A word version file of this document will be posted at www.state.sgov.gov/demarche. RICE