(S) ALERTING SPAIN TO TURKISH INTERMEDIARY'S EFFORTS TO SUPPLY SPANISH-ORIGIN MACHINE TOOLS TO IRAN

S E C R E T STATE 029395



SIPDIS



E.O. 12958: DECL: 03/26/2034

TAGS: PARM, MTCRE, PREL, TW, IR, SP

SUBJECT: (S) ALERTING SPAIN TO TURKISH INTERMEDIARY'S

EFFORTS TO SUPPLY SPANISH-ORIGIN MACHINE TOOLS TO IRAN



REF: A. MADRID 000088

B. 08 MADRID 000979

C. 08 STATE 081940 AND PREVIOUS



Classified By: ISN/MTR DIRECTOR PAM DURHAM

REASONS 1.4 (B),(C) AND (D).



1. (U) This is an action request. Embassy Madrid, please

see paragraph 4.



2. (S) Background/Purpose/Objective: On several occasions

since October 2005, the United States has discussed with

Spain our concerns regarding sales by the Spanish company

Maquinaria CME, S.A. of machine tools that posed potential

proliferation concerns (Reftels). Most recently, in

September 2008, we advised Spanish officials of an Iranian

attempt to purchase a five-axis milling machine controlled by

the Nuclear Suppliers Group and Wassenaar Arrangement from

Maquinaria CME (Ref C). In January 2009, Spain informed us

that its investigation into this activity determined that

Maquinaria CME had not exported any machine tools to Iran

since early 2006 and that a license for a similar milling

machine had been denied by Spanish authorities in January

2007 (Ref A).



3. (S) We now want to provide the GOS with information

indicating that in late 2008 and early 2009, a Turkish

intermediary was working to supply Iran's Ardalan Machineries

Company with a five-axis milling machine produced by

Maquinaria CME. Ardalan Machineries is a front company

associated with Iran's liquid propellant ballistic missile

developer Shahid Hemmat Industrial Group (SHIG). The milling

machine sought by Ardalan Machineries is controlled by the

Wassenaar Arrangement and the Nuclear Suppliers Group and

could be used by SHIG to support its production of liquid

rocket engine components. We want to alert Spanish

authorities to this activity in support of their ongoing

export control efforts and ask that they use all available

measures to prevent missile-related entities in Iran from

procuring Spanish-origin machine tools.



4. (S) Action Request: Request Embassy Madrid 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.


<br />5. (S) Begin talking points/non-paper:



(SECRET REL SPAIN)



-- You will recall that on several occasions since October

2005, we have raised with you our concerns regarding sales by

the Spanish company Maquinaria CME, S.A. of machine tools

that posed potential proliferation concerns.



-- Most recently, in July 2008, we alerted you to efforts by

Iran to purchase a five-axis milling machine controlled by

the Nuclear Suppliers Group and Wassenaar Arrangement from

Maquinaria CME.



-- In January 2009, you informed us that your investigation

had determined that Maquinaria CME had not exported any

machine tools to Iran since early 2006 and that a license for

a similar milling machine had been denied in January 2007.



-- We appreciate your efforts to investigate this case and

now would like to provide you with information regarding

recent efforts by Iran's ballistic missile program to procure

machine tools from Maquinaria CME.



-- Specifically, we understand that in late 2008 and early

2009, the Turkish-based intermediary Ak Makina was working to

supply Iran's Ardalan Machineries Company with a model FS-1

milling machine produced by Maquinaria CME.



-- Ardalan Machineries is associated with Iran's liquid

propellant ballistic missile developer Shahid Hemmat

Industrial Group (SHIG) and is acting as a false end-user in

its dealings with Ak Makina to circumvent your export

controls.



-- We believe the machine sought by Ardalan Machineries is

capable of performing five-axis machining operations and

would be controlled by the Wassenaar Arrangement and the

Nuclear Suppliers Group. As you know, such a machine would be

prohibited under United Nations Security Council Resolution

(UNSCR) 1803 for export to Iran.



-- Such a machine could be used by SHIG to machine turbopump

rotors, aerofoils, fuel control devices, and guidance

components for Iran's ballistic missiles.



-- We hope this information is useful in supporting your

export control efforts to prevent missile entities in Iran

from procuring Spanish-origin machine tools.



-- We look forward to continued cooperation on

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



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