RESPONSE TO ITALY ON EXPORTS TO IRAN

C O N F I D E N T I A L STATE 038773

SIPDIS

E.O. 12958: DECL: 04/20/2019
TAGS: KNNP PREL IR MNUC ETTC IT
SUBJECT: RESPONSE TO ITALY ON EXPORTS TO IRAN

REF: A. 09ROME83

B. 09STATE8305

C. 09ROME178

D. 09ROME347

Classified By: EUR/PRA Acting Director Kathleen Morenski,
REASONS 1.4 (B) AND (D).


1. (U) This is an action request. Please see paragraph

2.

--------------
OBJECTIVES/ACTION REQUEST
--------------


2. (C) Washington requests Post deliver the non-paper in
paragraph 3 to appropriate host government officials in the
foreign affairs ministry in response to the action request in
REF A. Post should pursue the following objective:

-- Thank Italy and inform them that the United States is
investigating both Worthington (Ref D) and Emerson Process
Management (Ref C) for possible violations of U.S. export
control laws.

-- Inform GOI that we have analyzed the additional
documentation provided by Italy (Ref D) and urge Italy to
deny this export if it meets nuclear or chemical
weapons-capable parameters.

-- Remind the GOI of our continued concerns about Pars Oil
and Gas Company,s potential to divert these items to the
nuclear program.

--------------
NONPAPER
--------------


3. (C) BEGIN NONPAPER FOR ITALY

-- We appreciate the information you provided us on Emerson
Process Management,s and Worthington,s ) both U.S.
companies ) potential circumvention of U.S. laws regarding
sanctions on Iran via subsidiaries in Italy.

-- We passed this information to the U.S. law enforcement
community, which is investigating the activities of these
companies for possible violations of U.S. law. Once our
investigation is complete, we will share the results with you.

-- We have also reviewed the additional information you
provided regarding the license application to export valves
to Pars Oil and Gas Company in Tehran.

-- Based on the information provided, our technical experts
did not have enough information to affirmatively conclude
that these valves are chemical weapons or nuclear-capable.

-- We encourage Italy to carefully review the technical
specifications again to assess whether these items meet the
chemical or nuclear-capable parameters.
-- We reiterate that we were able to find three past Nuclear
Supplier Group (NSG) complimentary denials (catch alls)
reported to Pars Oil and Gas Company and which were
determined to be linked to Mesbah Energy Company, the
AEOI-owned company purchasing goods for Iran's heavy water
production plant.

-- All three NSG denials involved dual-use, uncontrolled
chemical process equipment (pipeline strainers, strainers and
gaskets for pumps, gate valves, globe valves, and check
valves) with uses in both legitimate petrochemical industry
activities and in Iran's heavy water production facility.

-- The linkages to Mesbah Energy demonstrate that the
Iranians have used Pars Oil and Gas Company for heavy water
production related procurement, at least in these instances.

-- We believe that a presumption of denial would be
appropriate based on past NSG complimentary denials and
established linkage between Pars Oil and Gas Company and
Mesbah Energy, the heavy water production project.

-- Mesbah Energy was designated in United Nations Security
Council Resolution 1737 as a result of its involvement in the
Iranian nuclear program. Mesbah was subsequently sanctioned
by the European Union.

-- We underscore our continuing concern that Iran will make
use of all of its national industries, but particularly its
petrochemical industry, to obtain items and materials in
support of its proscribed nuclear activities as well as
chemical weapons activities.

-- You may recall that we briefed the NSG on this concern and
distributed U.S.-developed watch lists of items that have
both legitimate petrochemical industry applications, but also
which Iran may seek for its nuclear program.

--We continue to urge the utmost vigilance in monitoring all
such trade with Iran and believe this risk of diversion to a
nuclear end use is reason enough to reduce trade with the
petrochemical industry.

END NON-PAPER

--------------
REPORTING DEADLINE
--------------


4. (U) Post should report results within seven business days
of receipt of this cable. Please slug replies for ISN, T,
EUR, and NEA. Please use the caption SIPDIS in all replies.

--------------
POINT OF CONTACT
--------------


5. (U) Washington point of contact for follow-up information
is ISN/CPI Lisa Meyers, 202-736-7939, meyersla@state.gov.


6. (U) Department thanks Post for its assistance.
CLINTON