SWISS FIRM PREVIOUSLY CONDUCTING BUSINESS WITH

S E C R E T STATE 115194

SIPDIS

E.O. 12958: DECL: 11/06/2034
TAGS: MTCRE PARM PREL MNUC ETTC KSCA SZ SY
SUBJECT: SWISS FIRM PREVIOUSLY CONDUCTING BUSINESS WITH
IRANIAN FRONT COMPANIES NOW ENGAGED WITH SYRIAN ENTITY OF
PROLIFERATION CONCERN (S)

REF: A. 08 STATE 101519

B. 08 BERN 000514

C. 08 STATE 122304

D. 08 BERN 000594

E. 08 STATE 132055

F. BERN 000059

G. BERN 000118

Classified By: ISN/MTR DIRECTOR PAM DURHAM FOR REASON 1.4 (C).


1. (U) This is an action request. Embassy Bern, please see
paragraph 4.


2. (S) Background: On several occasions in 2008 and 2009, we
discussed with Swiss officials efforts directed by the Iranian
procurement entity FEDCO to procure crystal oscillators from
the Swiss firm Quartzcom (Refs). These efforts included the
use of FEDCO front companies in Malaysia and the UAE, and also
involved discussions between Quartzcom and FEDCO aimed at
evading Swiss export laws. In response to our concerns, Swiss
officials investigated the information we provided and met
with Quartzcom's management, who pledged to abandon all of the
firm's Iran-related activities.


3. (S) Objectives: We now want to advise the GOS of new
information indicating that as of September 2009, Quartzcom
had received an order for quartz oscillators from the Syrian
firm Business Lab. We have concerns that any items Quartzcom
ships to Business Lab may be diverted to Syria's Scientific
Studies and Research Center (SSRC),the agency responsible for
overseeing Syria's WMD and missile programs. We want to share
this information with Swiss officials and urge them to
investigate and take measures to ensure that Quartzcom is not
acting as a supplier to Syrian entities of proliferation
concern.


4. (S) Action Request: Request Embassy Bern approach
appropriate host government officials 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 SWITZERLAND)

-- We would like to alert you to information of proliferation
concern and request your assistance in investigating this
activity.

-- On several occasions in 2008 and 2009, we discussed with
you Iranian efforts to procure crystal oscillators from the
Swiss firm Quartzcom.

-- These efforts were directed by the Iranian procurement firm
Farazeh Equipment Distributor Company (FEDCO) and involved the
use of the Malaysia-based front company Evertop Services and
the UAE-based front company Alkaen Equipment and Industrial
Supplies LLC.

-- We also advised you that it appeared that Quartzcom and
FEDCO were exploring ways of getting around Swiss export laws.

-- In March 2009, we were pleased to learn that you had met
with Quartzcom's management, who said that Quartzcom would
abandon all of its Iran-related activities.

-- We now have additional information we would like to share
with you related to Quartzcom's trading activities.

-- Specifically, we understand that as of late September 2009,
the Syrian firm Business Lab had ordered quartz oscillators
from Quartzcom.

-- While these items are not controlled by the Missile
Technology Control Regime (MTCR),Quartzcom's trade with
Business Lab is of concern to us.

-- We are concerned that these items may be diverted to
Syria's Scientific Studies and Research Center (SSRC).

-- As you will recall from MTCR Information Exchange meetings,
SSRC is the agency responsible for overseeing Syria's WMD and
missile programs.

-- We urge you to investigate this latest information and to
take all appropriate measures to ensure that Quartzcom is not
acting as a supplier to entities affiliated with Syria's WMD
or ballistic missile programs

-- We look forward to continuing our excellent cooperation on
nonproliferation matters and to hearing of any updates on the
progress of your investigation of this case.

End talking points/non-paper


6. (U) 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.


7. (U) A word version of this document will be posted at
www.state.sgov.gov/demarche.
CLINTON