RESPONDING TO GOI QUESTIONS ON IRANIAN EFFORTS TO

S E C R E T STATE 099410 SIPDIS E.O. 12958: DECL: 09/23/2034 TAGS: MTCRE PARM PREL MNUC ETTC KSCA JA IR IT SUBJECT: RESPONDING TO GOI QUESTIONS ON IRANIAN EFFORTS TO PROCURE JAPANESE-ORIGIN SERVO-ACTUATORS FROM ITALIAN FIRM (S) REF: A. STATE 032269 ¶B. TOKYO 000800 ¶C. STATE 034798 ¶D. ROME 000472 ¶E. STATE 075985 ¶F. ROME 000989 Classified By: ISN/MTR DIRECTOR PAM DURHAM FOR REASON 1.4 (C). ¶1. (U) This is an action request. Embassy Rome, please see paragraph 6. ¶2. (S) Background: On April 2, 2009, we shared with the government of Japan information indicating that in mid- February 2009, Iran's Farazeh Equipment Distributor Company (FEDCO) sought servo-actuators manufactured by the Japanese firm Tonegawa-Seiko via the Italian firm Alpi Aviation (Ref A). Japanese officials responded that Tonegawa-Seiko had in fact exported a quantity of 200 PS050 servo actuators to Alpi Aviation on February 25, 2009, and recommended that we discuss this issue with Rome (Ref B). (Note: FEDCO has previously acted as a supplier for Iran's unmanned aerial vehicle (UAV) and liquid-propellant ballistic missile programs. Although the servo-actuators sought by FEDCO are not controlled, they are suitable for use in UAV flight control systems. For several years, we have discussed with Japanese officials efforts by Iran's UAV program to procure Tonegawa-Seiko servo- actuators from a variety of sources in numerous countries. End note.) ¶3. (S) On April 9, we raised this activity with Italian officials, who agreed to apply close scrutiny to any export license application involving Alpi Aviation or FEDCO (Ref C). GOI representatives also asked if the servo-actuators were designated as prohibited items under any of the relevant international agreements and/or whether their export could be stopped under a "catch all" provision. Post informed Italian officials that stopping the transfer pursuant to "catch alls" would be appropriate given the likely end-user (Ref D). ¶4. (S) In July, we followed up on this case and requested an update on the status of Italy's investigation (Ref E). Italian officials advised that they had put Alpi Aviation under surveillance for a period of three months and had uncovered no evidence of suspicious exports - including of the servo-actuators - to Iran, and asked if the US wanted them to continue monitoring Alpi Aviation. Italian officials also asked for more specific information on the servo actuators, including the following: their pertinent harmonized trade system numbers; whether they are designated as arms or dual use products; and whether they are specifically prohibited by international export control arrangements (Ref F). ¶5. (S) Per Ref F, Post requested that Department provide more specific information on the servo-actuators, as well as instructions on whether to formally ask the Italian MFA for continued surveillance of Alpi Aviation. ¶6. (S) Action Request: Request Embassy Rome approach appropriate host government officials and, drawing on the information in paragraphs 1-4, provide the following responses to Italy's questions. -- We want to inform Italian officials that we have not been able to verify the harmonized trade numbers of the servo- actuators, but these items are not controlled by any of the multilateral export control regimes, and are not listed as arms or dual use products. -- However, in light of their clear UAV applications, past efforts by Iran's UAV program to procure these items, and FEDCO's affiliation with Iranian programs of proliferation concern, we believe that Italy's use of catch-all controls to prevent the export of these servo-actuators to Iran is warranted. -- In addition, while we would appreciate the continued monitoring by Italian officials of Alpi Aviation, we also want to urge Italian officials to approach representatives of the firm and sensitize them to the proliferation concerns the U.S. has raised - without identifying the U.S. as the source of the information. -- Additionally, we would encourage GOI officials to inquire with Alpi Aviation as to the disposition of the 200 PS050 servo-actuators that the Japanese government confirmed have been exported to Alpi Aviation by Tonegawa-Seiko (i.e., are the servos still in possession of Alpi Aviation, and if not, to whom have they been sold?) ¶7. (U) Washington POC is ISN/MTR John Paul Herrmann (Phone: 202-647-1430). Please slug any reporting on this issue for ISN/MTR, EAP/J, EUR/WE, and EUR/PRA. CLINTON