US embassy cable - 05MADRID3302

S E C R E T MADRID 003302 
 
SIPDIS 
 
ISN/CBM FOR VANN VAN DIEPEN 
 
E.O. 12958: DECL: 09/16/2020 
TAGS: PARM, PREL, ETTC, SP, IR, CBW, Non-Proliferation Issues 
SUBJECT: SHIELD S59A-03: TELSTAR TO END IRAN SALES 
 
REF: STATE 110923 
 
Classified By: PolCouns Kathleen Fitzpatrick for reasons 1.4 (b) and (d 
). 
 
 1. (S) Summary:  Representatives of Spanish firm Telstar met 
with ISN/CBM Director Vann Van Diepen on September 16 to 
explore Telstar's options for exporting its products to Iran. 
Van Diepen explained that, under the agreement that Telstar 
made to get previous Iran Nonproliferation Act (INPA) 
sanctions lifted, any Telstar sales to Iran would lead to the 
Department reimposing sanctions.  Telstar indicated that it 
now understood the breadth of U.S. requirements and would not 
engage in sales to Iran, including canceling its planned sale 
of steam sterilizers (reftel). End Summary. 
 
2. (S) On September 16, ISN/CBM Director Vann Van Diepen and 
PolMilOff met with Telstar CEO Ton Capella and legal adviser 
Xavier Bou in Madrid to discuss potential Telstar sales to 
Iran.  Capella explained that Telstar was confused by U.S. 
policy and wanted to clarify whether it could sell any 
products to Iran.  Capella said that Telstar had been careful 
to meet Spanish and EU rules, and didn't understand why the 
US would prohibit Telstar from exporting "non-dual-use" 
products to Iran as long as it followed these rules. 
 
3. (S) Van Diepen agreed that Telstar appeared to have met EU 
and Spanish rules, but explained the U.S. view of Iran that 
led to the INPA, and the much broader scope of 
INPA-reportable activity as compared to EU and Spanish export 
controls.  Because the U.S. understands that all Telstar 
products would be of potential utility to a biological 
weapons program (and therefore "dual-use" regardless of 
whether they were specifically controlled), any Telstar sales 
to Iran would lead to a reimposition of sanctions. 
 
4. (S) Capella said that Telstar does significant business in 
the U.S. and couldn't afford to have sanctions reimposed.  He 
indicated that Telstar would cancel the planned sale of two 
custom-built steam sterilizers to Iran, even though Telstar 
would have to break its contract.  He asked for assistance 
from the USG in demonstrating that he had to break the 
contract due to "force majeure" and also in seeking 
alternative customers for the sterilizers.  Van Diepen said 
that the USG would do what it could to assist and designated 
the Embassy as the proper channel for any requests. 
 
5. (S) Capella noted that Telstar's European competitors sell 
similar products to Iran, but have not received sanctions. 
Van Diepen explained that, if the USG were to catch others 
making such sales, it would treat all companies and countries 
equally as a matter of U.S. policy. 
AGUIRRE