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