IRAN MAKES COMMERCIAL OVERTURES TO PARAGUAY

C O N F I D E N T I A L ASUNCION 000103

SIPDIS

WHA/FO CMCMULLEN, WHA/BSC MDRUCKER, BFRIEDMAN, MDASCHBACH

E.O. 12958: DECL: 02/18/2029
TAGS: PREL ECON PA IR
SUBJECT: IRAN MAKES COMMERCIAL OVERTURES TO PARAGUAY

REF: FEBRUARY 6 BKELLY-MDASCHBACH EMAIL ON IRAN POINTS

Classified By: DCM Michael J. Fitzpatrick; reasons 1.4 (b) and (d).


1. (SBU) Iran's Ambassador to Paraguay, Morteza Tafreshi,
resident in Montevideo, met separately January 22 with
Paraguay's Foreign Minister Hamed Franco and with Minister of
Industry and Commerce Heisecke in Asuncion. During his
meeting with Hamed, Tafreshi invited President Fernando Lugo
to visit Iran on the margins of the March 29-April 2 South
America-Arab Summit in Doha, Qatar, where Paraguay will serve
as Vice Chair.


2. (SBU) An Iranian delegation followed up by visiting
Asuncion February 2-4 to pursue commercial relations. The
12-person delegation included Ahmad Hashemi, director general
of international affairs for the Agriculture Ministry;
Mohammad Kamali, a vice president of Crop Research (private
company); Niyazali Sepahvand, professor at the Seed
Preparation Institute; Siavash Zargar, Foreign Investment
(private company); Mehdi Kari, general manager of Yihad Tose
(private company); Sadrollah Dolat, manager of Cattle Issues
(private company); and Hossein Reza, manager of Atinegar Mehr
(engineering firm). According to press reports, Iran offered
to provide fertilizers and technical assistance in the
agricultural sector, and is exploring the possibility of
investing in a powdered milk plant in Paraguay (at a cost of
USD 8-10 million) and purchasing real estate and buildings.
Iran seeks to import soy and beef (up to one-third of
Paraguay's monthly exports) from Paraguay. The delegation
met with Paraguay's Minister of Agriculture and
production-related labor unions and visited milk production
and beef packing facilities. Press reports quoted Tafrishi
as saying that Iran's assistance came "from a friendly
nation" with "no strings attached" and no interest in
military affairs. Paraguayan Agriculture Minister Vera
Bejarano said publicly February 4 that "we hope the
cooperation that surfaces as a result of this visit can
strengthen our productive sector, because ... Iran is very
advanced in agricultural research and extension." Vera said
his meeting with the Iranians was not political. Unidentified
GOP executive branch officials said tense relations between
the United States and Iran would not affect Paraguay's
commerce.


3. (C) Ambassador met with Foreign Minister Hamed February
12, and among other issues, raised U.S. concerns about
Paraguay strengthening ties with Iran. Hamed said he
understood U.S. concerns, and assured her that Paraguay's
relations with Iran were strictly commercial, noting that
Brazil, Argentina and Uruguay export beef and soy to Iran.
Vice Minister for Economic Affairs Oscar Campuzano added that
if Iran's investment in a powdered milk plant comes to
fruition, Iran would also invest in Paraguay's
infrastructure, particularly in the transportation sector.
While Hamed confirmed that nothing had been formalized with
Iran, he asserted that Paraguay needs investment. (NOTE:
Ministry of Industry and Commerce officials separately told
Econoff February 5 that Iran invited Minister Heisecke to
visit Iran and that Heisecke sought Embassy views, which we
provided drawing from reftel email. END NOTE).

Please visit us at http://www.state.sgov.gov/p/wha/asuncion

AYALDE