(S) ALERTING GERMANY TO IRANIAN PROCUREMENT OF

S E C R E T STATE 113757 SIPDIS E.O. 12958: DECL: 11/04/2034 TAGS: PARM MTCRE PREL IR TU GM SUBJECT: (S) ALERTING GERMANY TO IRANIAN PROCUREMENT OF GERMAN-ORIGIN MACHINE TOOLS VIA TURKISH INTERMEDIARY Classified By: ISN/MTR ACTING DIRECTOR RALPH PALMIERO; REASONS 1.4 (B),(C) AND (D). ¶1. (U) This is an action request. Embassy Berlin, please see paragraph 4. ¶2. (S) Background/Purpose/Objective: We want to alert German officials to an apparent effort by the Turkish firm Ak Makina to circumvent German export control laws. Ak Makina has previously worked to procure machine tools on behalf of entities affiliated with Iran's liquid propellant ballistic missile developer and we are concerned that any export of machine tools to Ak Makina poses potential missile proliferation risks. ¶3. (S) Specifically, the United States has information that in September 2009, Ak Makina was working to procure several computer numerically controlled machine (CNC) tools manufactured by Hyundai-Kia Machine Europe GmbH located in Offenbach, Germany. Our information indicates that Ak Makina falsely stated to Hyundai-Kia Machine Europe GmbH that the customer for this equipment was located in Turkey, when the actual end-users were in Iran. We understand that Ak Makina is seeking these machine tools from the German branch of Hyundai-Kia because it has been unable to purchase Hyundai-Kia machines from South Korea due to a denial of an export license by South Korean authorities. We want to ask German authorities to investigate this activity and urge them to use all available measures to prevent Ak Makina from evading German export controls to supply machine tools to Iran. ¶4. (S) Action Request: Request Embassy Berlin approach appropriate host government authorities 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 GERMANY) -- We would like to raise with you an issue of proliferation concern and request your government's assistance in investigating this activity. --The United States has information that in September 2009, the Turkish company Ak Makina was working to procure several computer numerically controlled (CNC) machine tools manufactured by Hyundai-Kia Machine Europe GmbH located in Offenbach, Germany. -- Ak Makina has previously worked to procure machine tools on behalf of entities affiliated with Iran's liquid propellant ballistic missile developer Shahid Hemmat Industrial Group (SHIG),and we are concerned that any export of machine tools to Ak Makina poses potential missile proliferation risks. -- We understand that the machines sought by Ak Makina from Hyundai-Kia Machine Europe GmbH included an SKT 400LC CNC heavy duty lathe and several KIT-400 series CNC turning machines. -- Our information indicates that Ak Makina falsely stated to Hyundai-Kia Machine Europe GmbH that the customer for this equipment was located in Turkey, when the actual end-users were the Iranian entities Kara Gostar Engineering Company and Machine Sazi Tabriz. -- Ak Makina is seeking these machine tools from the German branch of Hyundai-Kia because it has been unable to purchase Hyundai-Kia machines from South Korea due to a denial of an export license by South Korean authorities. -- We hope you will use this information to investigate this activity and use all available measures, including your catch-all control authorities, to prevent Ak Makina from evading German export controls to supply machine tools to Iran. -- We have also brought this information to the attention of Turkish authorities. -- We look forward to continued cooperation on export control and nonproliferation issues and to hearing of any actions you take in response to this information at the earliest possible time. End talking points/non-paper ¶6. (U) Washington POC is ISN/MTR James Mayes (Phone: 202-647-3185). Please slug any reporting on this issue for ISN/MTR. ¶7. (U) A word version file of this document will be posted at www.state.sgov.gov/demarche. CLINTON