(S) SIEMENS COMPUTERS WILL NOT GO TO IRAN

S E C R E T BERLIN 001615

SIPDIS
EUR/CE FOR PETER SCHROEDER
STATE FOR EUR/PRA, ISN/CPI AND T

E.O. 12958: DECL: 12/24/2034
TAGS: PARM PREL MUNC IR CH UK AE GM
SUBJECT: (S) SIEMENS COMPUTERS WILL NOT GO TO IRAN

REF: A. STATE 31434

B. BERLIN 406

C. BERLIN 487

D. BERLIN 1434

Classified By: Acting EMIN Don L. Brown for reasons 1.4 (b) and (d)


1. (S) Summary: The Siemens computers described in reftels
remain in the UAE. German MFA officials assure us that all
parties are working towards a resolution that will prevent
the computers from reaching Iran, although they would not
commit to a particular solution or timeline. Disputes about
ownership of the computers and what the UAE claims to be a
lack of clarity in the applicable UNSCR is slowing the
progress of this case. Despite this, German officials
anticipate a favorable conclusion to this case. End Summary.


2. (S) According to German MFA officials, the UAE retains
possession of Siemens computers interdicted while being
shipped from China to Iran. In a series of conversations
between December 15-22, German MTCR desk officer Nancy Reck
and director of export controls Markus Klinger assured
Econoff that the computers are still in the UAE and "are not
going anywhere." "It has (finally) dawned on Siemens," they
said, "that this is a serious situation. Siemens is aware of
the reputational risk associated with this case and does not
want it to become a prominent news item." Siemens is working
on a "pragmatic solution that will be acceptable to all
parties except the Iranians." The GOG, Klinger said, is
constantly reminding the UAE of its responsibility under
UNSCR 1737 to prevent these goods from reaching Iran.


3. (S) The Germans described a sticking point between Siemens
and the UAE about the legal ownership of the computers. When
pressed, Reck said that Siemens claims that it is not the
owner of the computers. Rather, Siemens is asserting that
title passed to the Chinese customer when the computers left
the loading dock, per the terms of the shipping documents.
(Note: If Siemens shipped the computers "FOB Shipping
Point", this argument may have legal merit. Under this
shipping term, title to the goods transfers when the goods
leave the seller's shipping dock. End Note.) Siemens, Reck
explained, fears that if it takes possession of goods it no
longer legally owns, it may be liable to the true owner for
money damages. The UAE's position, Reck said, is simpler:
the boxes say "Siemens", they're yours, take
them. Siemens, Klinger said, is working with its customer to
solve the ownership question. Neither Klinger nor Reck
would commit to whether the computers would be returned to
Germany or destroyed in the UAE, or when this might occur.


4. (S) Klinger noted that UNSCR 1737 does not provide
guidance to the UAE about what to do with the seized
computers. This, he noted, contrasts with UNSCR 1874 which
allows UN member states to "seize and dispose of" interdicted
prohibited cargoes from the DPRK. The UAE, he said,
considered submitting this matter to local courts for
adjudication of ownership and disposition issues, a course he
believes would benefit no interested party and is not likely
to occur.


5. (S) Reck noted that the British Embassy in Berlin is still
very interested in this case. She said she has received
calls from Alex McKenzie (First Secretary - Political) and
Andrew Noble (Front Office) on this case asking for a meeting
before Christmas to discuss this matter.
DELAWIE