(S) INTERIM GERMAN RESPONSE ON IRAN'S EFFORTS TO PROCURE GERMAN-ORIGIN MACHINES VIA TAIWAN

SECRET S E C R E T BERLIN 001072 SIPDIS STATE FOR ISN/MTC AND EUR/AGS SIPDIS E.O. 12958: DECL: 05/24/2017 TAGS: PARM, PREL, ETTC, MTCRE, KSCA, GM, TW, IR SUBJECT: (S) INTERIM GERMAN RESPONSE ON IRAN'S EFFORTS TO PROCURE GERMAN-ORIGIN MACHINES VIA TAIWAN REF: A. BERLIN 361 B. STATE 19792 Classified By: Global Affairs Counselor Donald R. Shemanski, for reason s 1.4 (b) and (d). 1. (S) German MFA Export Control Desk Officer Andreas Kauke provided on May 18 to Global Affairs officer an interim response concerning the German Government's investigation into ref B information that Iran's Saipa Heavy Dies Manufacturing Company (SAIPA) planned to procure machine tool control equipment from Germany's Heidenhain Corporation via a Taiwan firm. Kauke said the German Federal Economic and Export Licensing Agency (BAFA) contacted Heidenhain about SAIPA's order. The series 320 control system named in ref B demarche does not meet the specifications to be listed on the Missile Technology Control Regime (MTCR) Annex, so is not subject to export licensing, according to Kauke. On the other hand, the series 530 control system might qualify to be listed on the MTCR Annex, depending on its specifications and where it will be installed in the manufacturing process. Kauke said BAFA notified Heidenhain about the requirement to apply for an export license application should the series 530 control system ordered meet the MTCR Annex specifications. 2. (S) Kauke said that according to the results of a German investigation into SAIPA, the company is part of the larger SAIPA Group, which manufactures automobiles. The German Government found no derogatory information to indicate that SAIPA Group is working in areas of proliferation concern or has links to Iranian military organizations. Nevertheless, BAFA records indicate that SAIPA was involved in a prior license denial, but the license application was for a different commodity to be used for a different end use, Kauke said. He did not elaborate on this prior case. 3. (S) Kauke said the German Government plans no further action on this case, nor does the USG need to contact the German Government again concerning this case. 4. (S) Post expects a German non-paper to be delivered on this case and will report it septel. TIMKEN JR