Journalicious Dots from Switzerland

NOFORN
SIPDIS

E.O. 12958: DECL: 07/22/2019
TAGS: ETTC PARM PREL ENRG NL IR
SUBJECT: NETHERLANDS: DUTCH CONCERNS ABOUT ROTOR BLADE EXPORTS TO IRAN

Classified By: ACTING POLECON COUNSELOR SHAWN GRAY FOR REASONS 1.4 (B) and (D)

¶1. (S/NF) SUMMARY: The Dutch export control authority hasdenied an export license for power plant turbine bladesdestined for Iran. Dutch officials have formally asked otherEuropean countries with companies that produce similar partsto block their export to Iran. The Dutch have asked usinformally to ensure U.S. firms, such as General Electric(GE), refrain from supplying these turbine blades to Iran.END SUMMARY.

2.(S/NF) Dutch export control officials at the Ministries ofEconomic Affairs (MEA) and Foreign Affairs (MFA) asked tomeet with EconOff June 30. MEA,s Kees Jan Steenhoekdescribed his office,s decision to block Sulzer Eldim BV,s(Dutch subsidiary of Swiss parent company Sulzer Metco)application to export gas-fired electricity turbinereplacement rotor blades to Iran. PolMilOff,s subsequentJuly 9 meeting with MFA,s export control policy officialJosephine Frantzen provided further detail.

¶3. (S/NF) Until 2009, Dutch customs authorities routinelystopped Sulzer Eldim,s Iran-bound shipments, then releasedthem when satisfied the rotor blades were destined forcivilian-use electricity production. However, afterdiscovering in January 2009 the UK had blocked a GBP 45million shipment of similar parts, MEA used a &catch-all8provision requiring Sulzer Eldim to obtain an export licensefor the blades, on the grounds the electricity could bediverted to military or nuclear programs. Sulzer Eldimsubsequently applied for an export license on a EUR 40million order. The Dutch recently denied the application andposted this information on the Nuclear Suppliers Group (NSG)Secure Information System as NI-NL-09001.

¶4. (S/NF) The consignee in Iran is a conglomerate thatsupplies the civilian power sector there, but also has tiesto the military. The Dutch review of the case led them tobelieve the electricity produced by the turbines &might notbe used for civilian purposes.8 One of Sulzer Eldim,sdirectors is an Iranian national. MEA estimates blocking thefirm,s exports to Iran could cause it to lose half itsrevenue. Sulzer Eldim has already laid off some of its400-person staff, a controversial decision in theeconomically struggling southern province of Limburg wherethe company is located.

¶5. (S/NF) The Dutch government has demarched other Europeancapitals — including Paris, Berlin, and Rome — where rotorblade manufacturers are located. According to Frantzen, theItalian government had a &positive reaction,8 but theothers have not responded. The Dutch do not intend todemarche Washington at this time. However, GE is capable ofsupplying the blades, and the Dutch hope the USG will notallow GE to export these products to Iran. The Dutch wantother countries to be equally vigilant in denying exportlicenses for these parts so as to maintain cohesion withinthe NSG and not disadvantage Dutch business interests. TheDutch are particularly concerned German company Siemens willcontinue to export the blades to Iran.

GALLAGHER

XTAGS: XTAGETTC, XTAGPARM, XTAGPREL, XTAGENRG, XTAGNL, XTAGIR 09THEHAGUE444