(S) TURKISH FIRM AK MAKINA'S CONTINUED ASSISTANCE TO MISSILE-RELATED ENTITIES IN IRAN

S E C R E T STATE 066578

SIPDIS

E.O. 12958: DECL: 06/26/2034
TAGS: PARM, MTCRE, PREL, TW, IR, TU
SUBJECT: (S) TURKISH FIRM AK MAKINA'S CONTINUED ASSISTANCE
TO MISSILE-RELATED ENTITIES IN IRAN

REF: A. STATE 003403
B. ANKARA 000070
C. ANKARA 000095
D. ANKARA 000293
E. STATE 027957
F. ANKARA 000452

Classified By: ISN/MTR ACTING DIRECTOR RALPH PALMIERO
REASONS 1.4 (B),(C) AND (D).

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

2. (S) Background/Purpose/Objective: In January and March
2009, we raised with Turkish officials our concerns regarding
the sale of computer numerically controlled (CNC) machine
tools by the Turkey-based firm Ak Makina to entities
affiliated with Iran's liquid propellant missile developer,
Shahid Hemmat Industrial Group (SHIG). We stressed to
Turkish officials that Ak Makina's relationships with these
Iranian companies posed proliferation risks and urged them to
take measures to stop Ak Makina from acting as a source of
supply to Iran's missile program. In response, Turkish
officials agreed to investigate information provided by the
United States on Ak Makina and indicated that they had been
closely monitoring the activities of this firm (Ref C and F).


3. (S) We now would like to provide Turkish officials
additional details on the business dealings between Ak Makina
and a missile-related intermediary named Ardalan Machineries
Company, which we initially discussed with the GOT in March
2009 (Ref E). Specifically, the United States has
information that the vice president of Ak Makina visited
Iran's Ardalan Machineries in mid-January 2009. Following
this visit, Ak Makina made arrangements to finalize the sale
to Ardalan Machineries of various Spanish-, Taiwan-, and
South Korean-origin machine tools, including several that may
be controlled by the Nuclear Suppliers Group and Wassenaar
Arrangement.

4. (S) We want to share this information with Turkish
authorities and reiterate that we believe that the machine
tools being supplied to Ardalan Machineries by Ak Makina are
intended to support Iran's liquid propellant missile program.
We therefore want to request the GOT take measures to
prevent these machine tools from being exported to Iran and
note that such action would be consistent with United Nations
Security Council Resolution 1737.

5. (S) Action Request: Request Embassy Ankara approach
appropriate host government authorities 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 TURKEY)

-- In January and March 2009, we raised with you our concerns
regarding the sale of computer numerically controlled (CNC)
machine tools by the Turkey-based firm Ak Makina to entities
affiliated with Iran's liquid propellant missile developer,
Shahid Hemmat Industrial Group (SHIG).

-- We noted that Ak Makina's relationships with these Iranian
companies posed clear ballistic missile proliferation risks
and urged you to take measures to stop Ak Makina from acting
as a source of supply for machine tools to Iran's missile
program.

-- During our most recent discussions of this case in March
2009, you agreed to investigate information provided by the
United States on Ak Makina and informed us that your
government had been closely monitoring the activities of this
firm.

-- We would appreciate an update on the status of your
efforts in this case. We also would like to share with you
additional details on continued dealings between Ak Makina
and Iran's Ardalan Machineries Company.

-- Specifically, we understand that the vice president of Ak
Makina, an individual named Oguz Akyuz, visited Iran's
Ardalan Machineries Company in mid-January 2009.

-- As we have noted in our prior discussions regarding Ak
Makina, Ardalan Machineries Company is a procurement cover
for SHIG and likely is acting as a false end-user in its
dealings with Ak Makina to circumvent your export controls.

-- Our information indicates that following Oguz Akyuz's
mid-January 2009 meetings in Iran, Ak Makina made
arrangements to finalize the sale of the following machine
tools to Ardalan Machineries:

- model SKT-160, SKT250LM, and SKT400LMC CNC slant bed
lathes, model VX700/40 and VX750MH CNC vertical machining
centers equipped with rotary tables, and four KB100
horizontal boring and milling machines produced by the South
Korean firm Hyundai-Kia;

- a model SR3-AXP CNC vertical machining center produced by
Taiwan's Akira-Seiki;

- a model DV1270 CNC vertical machining center produced by
Taiwan's Vision Wide Technology; and

- a model FS-1 milling machine with rotary table manufactured
by the Spanish firm Maquinaria CME.

-- We understand that Ak Makina, using the name of its
Turkey-based affiliate Akhavan Company, may have submitted
licensing requests for these machines to be exported to Iran.


-- You will recall that in March 2009, we informed you that
Ardalan Machineries was working to obtain several of these
same machine tool models through Ak Makina.

-- We also advised you at that time that at least one of
these machines, the FS-1 milling machine produced by
Maquinaria CME is likely controlled by the Wassenaar
Arrangement and Nuclear Suppliers Group.

-- We understand that two other machines that Ardalan
Machineries is seeking -- the VX750MH and the VX700/40 CNC
vertical machining centers equipped with rotary tables -- are
also potentially controlled by the Wassenaar Arrangement.

-- Although the remaining machines are not controlled, each
is highly capable and could be used by SHIG to support its
production of liquid rocket engine components.

-- Given the capabilities of these machines and Ardalan
Machineries' affiliation with SHIG, we urge you to take
measures to prevent these items from being exported to Iran.

-- We believe such actions would be consistent with United
Nations Security Council Resolution (UNSCR) 1737,
particularly since SHIG has been designated by the Security
Council for its role in Iran's missile program.

-- 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

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

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