IRANIAN COMPANY'S EFFORTS TO PROCURE A

S E C R E T STATE 081940

SIPDIS

E.O. 12958: DECL: 07/30/2033
TAGS: MTCRE PARM PREL ETTC MNUC TSPA SP IR
SUBJECT: IRANIAN COMPANY'S EFFORTS TO PROCURE A
SPANISH-MADE MILLING MACHINE (S)

REF: A. 05 STATE 191240

B. 07 MADRID 130

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


1. (U) This is an action request. Embassy Madrid
please see paragraph 4.


2. (S) Background: In October 2005, we provided the
Government of Spain (GOS) with information indicating
that the Spanish firm Maquinaria CME, S.A. was involved
in a number of deals in 2004 and 2005 to sell computer
numerically controlled (CNC) milling machines to
several different Iranian companies (Ref A). At least
two of these CNC milling machines were likely
controlled by the Wassenaar Arrangement and the Nuclear
Suppliers Group. As Iran's weapons of mass destruction
and missile programs are heavily dependent on foreign-
supplied machine tools, we were concerned that the
transfer of controlled machines could contribute to
Iran's weapons and missile development efforts. In
response, the GOS informed us in January 2007 that it
had finished an investigation of Maquinaria, and that
the GOS had denied all additional export permits to
sell additional equipment to Iran in 2006 and had
formally advised Maquinaria to sever all business links
with Iran (Ref B).


3. (S) Objectives: We now have new information to
share with the GOS concerning a recent Iranian effort
to procure a Maquinaria CME FS series 5-axis milling
machine equipped with a rotary table. Because this
type of milling machine is controlled by the Wassenaar
Arrangement and the Nuclear Suppliers Group, we want to
urge the GOS to immediately investigate this
information with a view to preventing Iran from
acquiring this equipment from Spain. The provision of
NSG-controlled items to Iran was prohibited in UNSCRs
1737 and 1803, regardless of end-user, except for
exclustive use in light water reactors or, for dual-
use items, if necessary for IAEA technical cooperation.


4. (U) Action Request: Request Embassy Madrid
approach appropriate Spanish 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 SPAIN)

-- 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.

-- You will recall that in October 2005, the U.S.
alerted you to information indicating that the Spanish
firm Maquinaria CME, S.A. was involved in a number of
deals in 2004 and 2005 to sell computer numerically
controlled (CNC) milling machines to several different
Iranian companies.

-- We brought this information to your attention
because Iran's weapons of mass destruction and missile
programs are heavily dependent on foreign-supplied
machine tools such as those manufactured by Maquinaria
CME.

-- In response, your government informed us in January
2007 that your export control authorities had denied
all subsequent requests by Maquinaria CME to sell
machine tools to Iran and had formally advised
Maquinaria CME to sever all business links with Iran.

-- We greatly appreciate your actions in this case to
date, and now would like to provide you with
information concerning a recent Iranian effort to
procure machines produced by Maquinaria CME.

-- Specifically, we understand that in June 2008, an
Iranian trading company known as MYP was interested in
purchasing a Maquinaria CME FS series 5-axis milling
machine equipped with a rotary table.

--This type of milling machine being sought by MYP is a
highly accurate machine tool and is controlled by both
the Wassenaar Arrangement and Nuclear Suppliers Group.

-- The provision of NSG-controlled items to Iran was
prohibited in UNSCRs 1737 and 1803, regardles of end-
user, except for exclusive use in light water reactors
or, for dual-use items, if necessary for IAEA technical
cooperation.

-- We are providing you this information to support
your export control efforts and urge you to immediately
investigate this information in order to prevent Iran
from acquiring this type of equipment from Spain.

--We look forward to future cooperation on export
control issues and would appreciate your sharing with
us the results of your investigation into this activity
at the earliest possible time.

End talking points/nonpaper.


6. (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 any
reporting on this issue for ISN/MTR, EUR/WE and
EUR/PRA.


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