IRANIAN PROCUREMENT NETWORK CONTINUES EFFORTS TO

S E C R E T STATE 004159

SIPDIS

E.O. 12958: DECL: 01/15/2034
TAGS: MTCRE PARM ETTC MNUC TSPA IR MY GM
SUBJECT: IRANIAN PROCUREMENT NETWORK CONTINUES EFFORTS TO
ACQUIRE GERMAN GOODS VIA MALAYSIAN ENTITIES (S)

REF: A. 2008 STATE 107113

B. 2008 BERLIN 1384

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


1. (U) This is an action request. Embassy Berlin
please see paragraph 5.


2. (S) Background and Objectives: In early October
2008, we shared with German officials information
indicating that Malaysia's Evertop Services and its
Iran-based parent company, Farazeh Equipment
Distributor Company (FEDCO),were engaged in efforts to
procure transducers, pressure gauges and C-16 load
cells manufactured by the German firm Hottinger Baldwin
Messtechnik GmbH (HBM) (Refs). We noted that Evertop
and FEDCO had facilitated many transactions on behalf
of Iranian end-users of concern, including Iran's
primary developer of liquid-propelled ballistic
missiles and entities affiliated with Iran's unmanned
aerial vehicle program. We also advised the FRG that
Singapore's QT Instruments and Evertop's Malaysian-
based sister company Bio-Focus Saintifik Sdn. Bhd. were
helping to coordinate these procurement efforts, and
that, as a result of concerns HBM had expressed related
to this activity, Evertop, QT Instruments and Bio-Focus
had undertaken efforts to ensure that HBM remained
unaware that the ultimate end-user was Iranian.


3. (S) We now understand that as of late November
2008, another Malaysia-based firm affiliated with FEDCO
- Elite Advanced Solutions Sdn. Bhd. - was planning to
receive five HBM C-16 load cells from QT Instruments,
probably for ultimate use by Iran's ballistic missile
program. Due to HBM's previously expressed concerns
regarding the earlier transaction involving Evertop,
FEDCO has taken measures to avoid inferring any
relationship between Elite and Evertop, although the
firms are in fact both subordinate to FEDCO.


4. (S) Objectives: We want to share this new
information with German officials in order to make them
aware of the ties between Elite, Evertop and FEDCO, and
urge them to exercise scrutiny when reviewing
applications to export goods to any of these or other
affiliated firms.


5. (U) Action Request: Request Embassy Berlin approach
appropriate German government officials to deliver
talking points/non-paper in paragraph 6 below and
report response. Talking points also may be provided
as a non-paper.


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

(SECRET//REL GERMANY)

-- We would like to raise with you a matter of
proliferation concern and request your government's
assistance in investigating this activity.

-- In early October 2008, we shared with you
information indicating that as of September 2008,
Malaysia's Evertop Services and Iran's Farazeh
Equipment Distributor Company (FEDCO) were engaged in
efforts to procure goods - including transducers,
pressure gauges and C-16 load cells - manufactured by
the German firm Hottinger Baldwin Messtechnik GmbH
(HBM).

-- Evertop has facilitated many transactions on behalf
of Iranian end-users of concern, including liquid-
propellant ballistic missile developer Shahid Hemmat
Industrial Group (SHIG) and entities affiliated with
Iran's unmanned aerial vehicle program.

-- FEDCO is Evertop's Iran-based parent company.

-- This activity was being coordinated with a
Singapore-based firm, QT Instruments, and its
Malaysian-based sister company Bio-Focus Saintifik Sdn.
Bhd.

-- We noted that, in response to concerns HBM expressed
related to this activity, Evertop, QT Instruments, and
Bio-Focus Saintifik undertook efforts to ensure that
HBM remained unaware that the ultimate end-user was
Iranian.

-- We now have additional information to share with you
related to this case.

-- Specifically, we understand that as of late
November, Elite Advanced Solutions Sdn. Bhd. - another
Malaysia-based firm affiliated with FEDCO - was
planning to receive five HBM C-16 load cells from QT
Instruments/Bio Focus Saintifik.

-- We believe that these load cells are destined for
Iran's ballistic missile program.

-- FEDCO has taken measures to avoid inferring any
relationship between Elite and Evertop, although the
firms are in fact both subordinate to FEDCO.

-- We believe this is due to the concerns that HBM
previously expressed over the earlier transaction
involving Evertop.

-- We are bringing this information to your attention
to alert you to the fact that there are a number of
firms - including Elite and Evertop - operating under
FEDCO's supervision, and to urge you to carefully
scrutinize applications to export goods to Evertop,
Elite or any other affiliated entities.

-- We look forward to hearing of any actions your
government takes in response to this information.

End talking points/nonpaper.


7. (U) Please contact ISN/MTR's John Paul
Herrmann with any questions or follow-up issues
related to this case (202-647-1430 -
herrmannjp@state.sgov.gov) and slug any
reporting on this issue for ISN/MTR, EUR/PRA and
EUR/CE.


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