VZCZCXYZ0004
OO RUEHWEB

DE RUEHC #4723 2481531
ZNY SSSSS ZZH
O P 041526Z SEP 08
FM SECSTATE WASHDC
TO RUEHTH/AMEMBASSY ATHENS IMMEDIATE 0000
RUEHTV/AMEMBASSY TEL AVIV IMMEDIATE 0000
INFO RUEHFR/AMEMBASSY PARIS PRIORITY 0000

S E C R E T STATE 094723 
 
SIPDIS 
 
E.O. 12958: DECL: 09/04/2033 
TAGS: GR IS ECON EFIN EWWT ETRD PARM PREL KNNP EUN
SUBJECT: IMPLEMENTATION OF THE IRISL CARGO INSPECTION 
PROVISION OF UNSCR 1803 
 
REF: A. REF A: STATE 69339 
     ¶B. REF B: PARIS 1291 
 
Classified By: ISN Patricia A. McNerney for reasons 1.4 (b) and (d). 
 
¶1.  (U)  This is an action request.  Please see paragraph 3. 
 
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SUMMARY AND BACKGROUND 
---------------------- 
 
¶2.  (C) The Department sent a demarche (REF A) to initiate 
discussions with key countries on the importance of 
implementing robustly the inspection provision of UNSCR 1803 
and warn them of the risks of doing business with IRISL.  We 
would like to provide this information to Greece, per the 
recommendation from Martin Briens, Office Director for 
Disarmament and Nuclear Nonproliferation at the French MFA, 
who commented in discussions with Embassy Paris officials 
(REF B) on the importance of reaching out to Greece to 
sensitize it to the potential risks involved in conducting 
business with IRISL.  We also would like the information 
transmitted to the Government of Israel to keep them aware of 
our strategy to target IRISL. 
 
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OBJECTIVES/ACTION REQUEST 
------------------------- 
 
¶3.  (S) Washington requests Posts deliver the non-paper in 
paragraph 4 to appropriate host government officials in the 
foreign affairs and finance ministries, and other appropriate 
government agencies, including those responsible for shipping 
and customs activities.  This information is being provided 
to the Government of Israel for information purposes only, no 
action is required.  Embassy Athens should pursue the 
following objectives: 
 
-- Emphasize UNSCR 1803's call for member states, in 
accordance with national and international law, to inspect 
the cargoes to and from Iran, of aircraft and vessels, at 
their airports and seaports, owned or operated by Iran Air 
Cargo and Islamic Republic of Iran Shipping Line (IRISL), 
provided there are reasonable grounds to believe that the 
aircraft or vessel is transporting goods prohibited under 
resolution 1803 or resolution 1737 (2006) or resolution 1747 
(2007). 
 
-- Recall that UNSCRs 1737and 1803 also establish a 
requirement for states to prevent the transfer, directly or 
indirectly from their territories or by their nationals, to 
or for the benefit of Iran, of specified nuclear and 
missile-related items (including Nuclear Suppliers Group 
(NSG) and Missile Technology Control Regime (MTCR)-controlled 
items). 
 
-- Encourage Greece to carefully monitor financial activity 
with regard to IRISL, noting that UNSCR 1737 also requires 
states to prevent the provision to Iran of financial 
assistance and transfer of financial resources or services 
related to the supply, sale, transfer, manufacture, or use of 
prohibited items. Paragraphs 9 and 11 of UNSCR 1803 calls for 
vigilance in entering into new commitments for 
public-provided financial support for any trade with Iran, 
including the granting of export credits, guarantees, or 
insurance, to their nationals or entities involved in such 
trade. 
 
-- Inform Greece that cargo on four IRISL vessels was 
interdicted in 2007 because the cargo (consisting of dual-use 
items) was destined for entities that had been sanctioned by 
the UN Security Council for their role in Iran's nuclear or 
missile programs, or to entities acting on their behalf. 
 
-- Highlight that IRISL is increasingly employing deceptive 
measures to disguise the end-user, the destination of its 
cargo, or IRISL's involvement, which suggests such transfers 
could be of a sensitive nature and possibly 
proliferation-related. 
 
-- Inform Greece that IRISL has continued to carry cargoes 
for entities including the Shahid Bakeri Industrial Group 
(SBIG), Defense Industries Organization (DIO), and the Sanam 
Industrial Group (SIG), all of which have been designated by 
the UN Security Council under resolutions 1737 or 1747 and by 
the United States under domestic authority (Executive Order 
13382). 
 
-- Remind Greek authorities of the risk that companies doing 
business with IRISL could, even inadvertently or unwittingly, 
facilitate the proliferation of items for use in a WMD, 
military, or missile program. 
 
-- Note in particular the increased possibility that IRISL 
vessels could be searched (due to the call in UNSCR 1803), 
resulting in increased costs to businesses shipping through 
IRISL.  These inspections could lead to delays in shipments 
of legitimate cargoes.  Stress the reputational difficulties 
that may fall upon those entities found to be associated, 
even inadvertently, with IRISL's proliferation activities. 
 
-- Note that companies that continue conducting business with 
IRISL could facilitate - unwittingly - transfers to or from 
Iran of WMD- or military-related items prohibited under 
UNSCRs 1737, 1747 and 1803. 
 
-- Emphasize that we are providing this information in the 
spirit of our cooperation as Proliferation Security 
Initiative (PSI) partners, and we hope for host government's 
energetic response in the same spirit. 
 
¶4.  (SECRET/ REL Greece and Israel) 
 
-- In light of our commitment to share information with your 
government on proliferation-related activities, we would like 
to raise concerns about Iran's Islamic Republic of Iran 
Shipping Lines (IRISL). 
 
-- As you know, IRISL was named in United Nations Security 
Council Resolution 1803.  Operative paragraph 11 of this 
resolution calls upon all UN Member States, in accordance 
with national and international law, to inspect the cargoes 
going to or from Iran, of aircraft and vessels, at their 
airports and seaports, owned or operated by Iran Air Cargo 
and Iran's Islamic Republic of Iran Shipping Lines (IRISL), 
provided there are reasonable grounds to believe that the 
aircraft or vessel is transporting prohibited items under 
UNSCR 1803 or UNSCRs 1737 or 1747. 
 
EXERCISE VIGILANCE REGARDING IRISL ACTIVITIES 
 
-- We urge you to take into account and emphasize to 
companies in your jurisdiction the significant risks of 
conducting business with IRISL. 
 
-- Specifically, we urge you to exercise vigilance with 
regard to all IRISL-related transport of goods through your 
jurisdiction, and any financial support for those transfers, 
in light of paragraphs 9 and 11 of UNSCR 1803 mentioned 
above.  This vigilance will also facilitate your 
implementation of the provisions of UNSCRs 1737 and 1803 that 
require states to take steps to prevent the transfer through 
or from their territories of certain items to or for the 
benefit of Iran. 
 
-- We urge you to issue an advisory to companies involved in 
the shipping industry in your jurisdiction to encourage them 
to practice enhanced due diligence when dealing with IRISL, 
since companies conducting business with IRISL could 
facilitate - unwittingly - transfers prohibited by UNSCRs 
1737, 1747, and 1803. 
 
-- We would note that potential delays caused by inspections 
conducted in response to the call in UNSCR 1803 or cargo 
seizure aboard IRISL vessels could add costs to businesses 
that choose to continue to ship legitimate cargoes through 
IRISL. 
 
-- We also request that you not share this information with 
any third parties. 
 
INTERDICTIONS OF IRISL CARGO INVOLVING DESIGNATED ENTITIES 
 
-- Cargoes on four IRISL vessels were interdicted in 2007 
because they were transporting dual-use items to entities 
that have been sanctioned by the UN Security Council for 
their role in Iran's nuclear missile programs, or to entities 
acting on their behalf.  All of the following activities 
occurred after the UNSC imposed sanctions on the entities 
involved, through the adoption of UNSCRs 1737 (December 2006) 
and 1747 (March 2007): 
 
- An IRISL vessel in late 2007 was carrying potassium 
perchlorate destined for Iran's Defense Industries 
Organization (DIO).  Potassium perchlorate can be used as a 
propellant for artillery rockets and can potentially be used 
to produce the solid rocket propellant oxidizer ammonium 
perchlorate. 
 
- An IRISL vessel in mid-2007 was attempting to ship 
electronic parts and machine tools, for possible use in 
Iran's missile program, to a front company for the Sanam 
Industrial Group (SIG) and an entity that has procured for 
the Shahid Bakeri Industrial Group (SBIG).  SIG and SBIG have 
been designated in UNSCRs 1747 and 1737, respectively, for 
their involvement in Iran's missile program. 
 
- Another IRISL vessel in mid-2007 was carrying cargo of 
electronic parts and lathes that could contribute to Iran's 
nuclear or ballistic missile program to a front company for 
the SIG and an entity that has procured for SBIG. 
 
- An IRISL vessel in mid-2007 was carrying aluminum sheets 
and plates intended for Iran that could be used in Iran's 
missile program.  Documentation associated with this shipment 
indicated a connection to Iran's DIO and a DIO subsidiary. 
DIO was designated in UNSCR 1737 as an entity involved in 
Iran's nuclear program. 
 
IRISL EMPLOYING DECEPTIVE MEASURES 
 
-- IRISL is increasingly employing deceptive measures to 
disguise the end user, and/or destination of its cargo, and 
IRISL's involvement in the transaction. 
 
-     During the period 2003 to 2006, we are aware of IRISL 
ships diverting or attempting to divert from their originally 
scheduled port calls, probably in order to avoid possible 
inspection or seizure of missile-related cargo.  Although 
ships occasionally skip port calls for commercial reasons, we 
have evidence these diversions were in response to perceived 
threats of interdiction. 
 
-     In mid-2003 an IRISL vessel departed from North Korea 
carrying missile-related and other military items destined 
for Iran.  Instead of going to its original destined port in 
Iran, it changed course and deviated to the nearest available 
Iranian port.  We believe the change in course was due to 
fear of being interdicted during its voyage. 
 
-     In early 2006, another IRISL vessel attempted to skip 
one of its destined ports of call.  We believe this ship was 
carrying material for possible use in Iran's missile program. 
 
-     In mid-2006, another IRISL ship diverted course and 
avoided making a scheduled port call, after becoming aware 
that it might be inspected and its cargo seized in port.  We 
believe this ship was also carrying material for possible use 
in Iran's missile industry. 
 
-- Skipping port calls where cargo needs to be unloaded 
probably costs IRISL tens of thousands of dollars, concerns 
its customers, and from a business perspective makes no sense 
for IRISL, which is a profit-making venture.  It is also 
likely that the ship captains are not aware of the nature of 
the cargo that they are carrying, but know only that it is of 
a special interest to the government of Iran. 
 
-- We also know that IRISL directed its international offices 
to obtain and use deceptive documents - including false bills 
of lading that remove references to IRISL and the Iranian 
recipient - to negotiate letters of credit with banks 
refusing to deal with Iranian entities. 
 
-- We are also aware that Iranian entities designated under 
United Nations Security Council resolutions are using 
deceptive tactics to obtain materials such as chemicals that 
could be used in missile fuel.  Again, these deceptive 
tactics include concealing the true identity of the intended 
Iranian recipient.  This is done by changing the name of the 
recipient to one that is not designated by the United Nations 
Security Council and changing the dates on paperwork in an 
attempt to provide cover for the shipment to avoid seizure 
while in transit through other states' ports. 
 
-- We are also aware that IRISL is likely adapting to 
increased scrutiny of its sensitive cargoes.  In late 2007, 
IRISL officially changed the policy of one of its shipping 
lines to avoid refueling while en route to Iran, thus 
preventing the possibility of inspection and seizure of 
sensitive cargo.  This is the same line that had two of its 
ships inspected in 2007.  Both of these ships were carrying 
materials, including chemicals prohibited by UNSCR 1737, for 
Iran's ballistic missile entities that are designated by the 
UN Security Council. 
 
CONTINUED TRANSPORT OF ITEMS FOR DESIGNATED ENTITIES 
 
-- IRISL continues to carry cargoes for entities designated 
by the UN Security Council.  As stated previously, four 
shipments were interdicted in 2007 from IRISL vessels that 
were carrying dual-use goods destined for entities designated 
by the UN Security Council, including Sanam Industrial Group, 
Shahid Bakeri Industrial Group, and the Defense Industries 
Organization. 
 
-- Other SBIG-related shipments include: 
 
- In early 2008, an IRISL vessel was en route from Dalian, 
China, to Bandar Khomeini, Iran, carrying a cargo of 
materials that are useful in the production of solid-fuel for 
ballistic missiles.  The intended recipients were cover 
companies for Iran's SBIG.  SBIG is responsible for Iran's 
solid-fueled ballistic missile program, and was designated in 
UNSCR 1737. 
 
- In mid-2007, an IRISL vessel was en route from Dalian, 
China, to Bandar Abbas, Iran, carrying a cargo to a cover 
company for Iran's Shahid Bakeri Industrial Group (SBIG). 
The cargo is useful in the production of solid-fuel for 
ballistic missiles. 
 
-- Other DIO-related shipments include: 
 
- In late 2007, an IRISL vessel was carrying a variety of 
military-related goods from China to Iran that were consigned 
to a known front company for Iran's DIO. 
 
- In late 2007, an IRISL vessel loaded military-related 
material supplied by Iran's DIO through a company using a 
cover name at Bandar Abbas, Iran, for delivery to Syria's 
defense industries. 
 
- In mid-2007, an IRISL vessel also loaded military-related 
cargo supplied by the DIO for Syria's defense industries. 
 
-- We would note that, in addition to the designation under 
UNSCRs 1737 and 1747, Sanam Industrial Group (SIG), SBIG, and 
the DIO, have been designated (as subject to financial 
sanctions) by the United States under domestic authority 
(Executive Order (E.O.) 13382). 
 
- SIG was designated under E.O. 13382 on July 18, 2006, for 
its ties to missile proliferation.  SIG is a subordinate of 
Iran's Aerospace Industries Organization, previously 
designated by the United States under domestic authority 
(E.O. 13382), that has purchased millions of dollars worth of 
equipment on behalf of AIO from entities associated with 
missile proliferation. 
 
- SBIG was designated under E.O. 13382 on June 29, 2005. 
SBIG is an affiliate of Iran's AIO and is also involved in 
Iran's missile programs.  Among the weapons SBIG produces are 
the Fateh-110 missile, with a range of 250 kilometers, and 
the Fajr rocket systems, a series of North Korean-designed 
rockets produced under license by SBIG with ranges of between 
40 and 75 kilometers.  Both systems are capable of being 
armed with at least chemical warheads. 
 
- The DIO was designated under E.O. 13382 on March 30, 2007, 
for engaging in activities that materially contributed to the 
development of Iran's nuclear and missile programs.  DIO has 
been identified by the IAEA as involved in centrifuge 
component production for Iran's nuclear program. 
 
END SECRET NONPAPER. 
 
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REPORTING DEADLINE 
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¶5.  (U) Posts should report in a timely manner.  Please slug 
replies for ISN, T, TREASURY, IO and NEA.  Please include 
SIPDIS in all replies. 
 
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POINT OF CONTACT 
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¶6.  (U) Washington point of contact for follow-up information 
is Jennifer Chalmers, ISN/CPI, (202) 
647-9715, CHALMERSJA@STATE.SGOV.GOV, or Anthony Ruggiero, 
ISN/CPI, (202) 647-5181, RUGGIEROAJ@STATE.SGOV.GOV. 
 
¶7.  (U) Department thanks Posts for their assistance. 
RICE