ATTEMPTS OF IRANIAN FIRM TO ACQUIRE MACHINE TOOLS FROM SOUTH KOREA'S HYUNDAI-KIA (S)

S E C R E T STATE 124128

SIPDIS

E.O. 12958: DECL: 12/03/2034
TAGS: PARM, MTCRE, PREL, IR, TU, KS
SUBJECT: ATTEMPTS OF IRANIAN FIRM TO ACQUIRE MACHINE TOOLS
FROM SOUTH KOREA'S HYUNDAI-KIA (S)

REF: A. STATE 28283
B. SEOUL 504
C. SEOUL 677
D. STATE 50260
E. STATE 66211

Classified By: ISN/MTR DIRECTOR PAM DURHAM FOR REASONS 1.4 (B),
(C),AND (D).

1. (U) This is an action request. Embassy Seoul, please see
paragraph 3.

2. (S) Background: The United States has information that
the Iranian firm Machine Sazi Tabriz was attempting to
acquire computer numerically controlled (CNC) machine tools
from the South Korean manufacturer Hyundai-Kia in October
2009. Machine Sazi Tabriz is the largest machine tool
manufacturer in Iran and likely supplies imported machine
tools to Iran's nuclear and ballistic missile programs.
Earlier this year, we alerted South Korean authorities to a
similar case involving an effort by an Iranian missile-
related entity to procure machine tools from Hyundai-Kia
through the Turkey-based company Ak Makina (Reftels). We
understand and appreciate the ROK ultimately denying the
license for this previous transaction. We now want to ask
South Korean authorities to investigate this effort by
Machine Sazi Tabriz to acquire goods from Hyundai-Kia and
urge the ROK to closely scrutinize all machine tool exports
to Iran to ensure that such equipment is not used to support
programs of proliferation concern.

3. (U) Action Request: Request Embassy Seoul approach
appropriate host government officials to deliver talking
points in paragraph 4 and report response. Talking points
may also be left as a non-paper.

4. (S) Begin talking points/non-paper:

(SECRET//REL SOUTH KOREA)

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

-- The United States has information that in October 2009,
Iran's Machine Sazi Tabriz was seeking to acquire machine
tools from South Korea's Hyundai-Kia.

-- We understand that the machines sought by Machine Sazi
Tabriz include two model HS630 horizontal machining centers
and one model HS800 machining center.

-- We are bringing this matter to your attention because we
are concerned that Machine Sazi Tabriz could potentially be
seeking these machines on behalf of weapons-related end-users
in Iran.

-- While just below the control thresholds of the Nuclear
Suppliers Group and Wassenaar Agreement, the HS630 and HS800
machining centers are versatile machine tools capable of
performing precision machining operations required for the
production of missiles and other weapons components.

-- Machine Sazi Tabriz is the largest machine tool
manufacturer in Iran and likely supplies imported machine
tools to Iran's nuclear and ballistic missile programs.

-- You will recall that earlier this year, we shared with you
our concerns that Iran's missile program was seeking a
variety of machine tools produced by Hyundai-Kia through the
Turkish company Ak Makina.

-- We hope you will investigate this activity and use your
catch-all control authorities to closely scrutinize all
machine tool exports to Iran to prevent such equipment from
being used to support Iran's weapons development efforts.

-- We look forward to continued cooperation on export control
and nonproliferation issues and would appreciate hearing of
the actions you take in response to this information at the
earliest possible time.

End talking points/non-paper

5. (U) Washington POC is ISN/MTR James Mayes (Phone: 202-
647-3185). Please slug any reporting on this issue for
ISN/MTR.

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