IRANIAN-CONTROLLED, MALAYSIAN-BASED PROCUREMENT

S E C R E T STATE 106740 SIPDIS E.O. 12958: DECL: 10/14/2034 TAGS: MTCRE PARM PREL MNUC ETTC KSCA GM IR MY SUBJECT: IRANIAN-CONTROLLED, MALAYSIAN-BASED PROCUREMENT ENTITY SEEKING ELECTRICAL COMPONENTS FROM GERMAN FIRM (S) Classified By: ISN/MTR DIRECTOR PAM DURHAM FOR REASONS 1.4 (C). ¶1. (U) This is an action request. Embassy Berlin, please see paragraph 3. ¶2. (S) Background/Objective: The United States has information indicating that in mid-August 2009, Malaysia's Electronics Component Limited (ECL) ordered $270,000 worth of AC/DC converter modules from the German firm Schafer Elektronik GmbH. This equipment is not controlled by the Missile Technology Control Regime (MTCR),but it could be used in test equipment that interfaces with ballistic missiles. Moreover, ECL is an Iranian-run firm that has procured sensitive items on behalf of Iran's ballistic missile and unmanned aerial vehicle programs. We want to alert German officials to our concerns about ECL and encourage them to take measures to prevent Schafer Elektronik GmbH from acting as a supplier to Iranian programs of proliferation concern. ¶3. (S) Action Request: Request Embassy Berlin approach appropriate host government officials to deliver talking points/non-paper in paragraph 4 below and report response. Talking points also may be provided as a non-paper. ¶4. (S) Begin talking points/non-paper (SECRET//REL GERMANY) --We would like to alert you to information of proliferation concern and request your assistance in investigating this activity. --We have information indicating that in mid-August 2009, the Malaysia-based procurement firm Electronics Component Limited (ECL) ordered a quantity of electrical components from Germany's Schafer Elektronik GmbH. --Specifically, ECL ordered 35 AC/DC converter modules for a cost of over $270,000. --While these AC/DC converter modules are not controlled by the Missile Technology Control Regime (MTCR),they can be used in missile programs in test equipment that interfaces with ballistic missiles. --We understand that ECL requested that Schafer ship these items to Kuala Lumpur by air. The goods are to be sent in three separate shipments. --Although ECL is located in Malaysia, it is actually an Iranian-run firm that is known to procure for Iranian entities of proliferation concern, including: the Shahid Hemmat Industrial Group (SHIG - Iran's primary developer of liquid fueled ballistic missiles); the Aerospace Industries Organization (AIO - SHIG's parent firm and the entity with authority over all Iranian missile programs); as well as Iranian unmanned aerial vehicle entities. --Iran's missile program has sought these items from suppliers in other countries previously. --We are therefore concerned that this order may be intended for an Iranian missile entity. --We urge you to investigate this information and to take all appropriate measures to ensure that Schafer Elektronik GmbH is not acting - even inadvertently - as a supplier to Iranian entities of proliferation concern or the foreign-based front companies that act as procurement agents for them. --We look forward to continuing our excellent cooperation on nonproliferation matters and to hearing the results of your investigation of this case. End talking points/non-paper ¶5. (U) Washington POC is ISN/MTR John Paul Herrmann (Phone: 202-647-1430). Please slug any reporting on this issue for ISN/MTR and EUR/CE. ¶6. (U) A word version of this document will be posted at www.state.sgov.gov/demarche. CLINTON