US embassy cable - 05PRAGUE162

S E C R E T PRAGUE 000162 
 
SIPDIS 
 
STATE FOR NP/CBM, EUR/NCE, EUR/PRA 
 
E.O. 12958: DECL: 02/04/2015 
TAGS: PARM, PREL, ETTC, EZ, IR, MTCRE 
SUBJECT: (S) MTAG-05-96: CZECH REPUBLIC BASED STROJIMPORT'S 
ASSISTANCE TO IRAN'S MISSILE PROGRAM: GOCR RESPONSE 
 
REF: A. SECSTATE 10746 
 
     B. PRAGUE 109 
 
Classified By: Deputy Political Counselor Mark Canning for reasons 1.4 
B, D, and H 
 
1. (S) Two weeks after receiving a demarche (Reftels) about 
the possible sales of computer numerically controlled lathes 
from the Czech firm Strojimport to firms in Iran, the MFA has 
delivered its response.  Jan Kara, Director of the UN 
Department, and Otakar Gorgol, who handles MTCR issues, said 
they appreciated the information in the demarche and took the 
possibility of American sanctions very seriously. 
 
2.  (S) Kara said the Czech intel service, BIS, could not 
confirm the information in the demarche.  Therefore Vlastimil 
Krepela, the Director of the Office of Special Materials in 
the Licensing Department at the Ministry of Industry and 
Trade, met directly with officials at Strojimport.  The 
officials confirmed that one Tos Varnsdorf machine, model 
WHN13CNC, was sent to Teheran in the fall of 2003, as 
reported Reftel B.  That machine was the subject of a 
contract between Strojimport and Mizan Machine Manufacturing, 
as stated Reftel A.  The Iranian firm has paid 90% of the 
contract, but has not yet taken possession of the machine. 
The machine, which was damaged in shipment to Iran, is, 
according to Kara and Gorgol, not operational and remains in 
a customs warehouse in Teheran.  The MFA officials were not 
able to say how this dispute might be resolved. 
 
3.  (S) As to the discussions to sell additional machines to 
Mizan or other Iranian firms, Strojimport has agreed to end 
such negotiations.  Strojimport committed itself, in a letter 
to Krepela, to ending all current discussions on further 
sales to Iran. 
 
4.  (S) In addition,  Principal Deputy Foreign Minister Jan 
Winkler has instructed Krepela to assemble all Czech firms 
that might export sensitive technology to Iran and make them 
understand that sales to Iran are politically sensitive, and 
encourage them to consult with authorities before pursuing 
such sales.  Krepela plans to do this in the near future. 
 
5. (S) The MFA officials pointed out that Strojimport has 
never exported any listed items to Iran.  They say that since 
the firm had no requirement to contact the MFA before 
exporting the Tos Varnsdrof machine, which is a dual-use 
item, in the fall of 2003, MFA official only became aware of 
the transaction when they were demarched, approximately 9 
months later.  The MFA officials asked, more than once, that 
U.S. intelligence be shared on a more timely basis to allow 
them to prevent transactions that they also find 
objectionable. 
CABANISS