VZCZCXRO3536
OO RUEHBC RUEHDE RUEHDIR RUEHKUK RUEHSL RUEHTRO
DE RUEHTC #0444 2031501
ZNY SSSSS ZZH
O 221501Z JUL 09
FM AMEMBASSY THE HAGUE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3079
INFO RUCNIRA/IRAN COLLECTIVE PRIORITY
RUCNNSG/NUCLEAR SUPPLIERS GROUP  PRIORITY
RUEHRL/AMEMBASSY BERLIN PRIORITY 1806
RUEHSW/AMEMBASSY BERN PRIORITY 4144
RUEHLO/AMEMBASSY LONDON PRIORITY 1887
RUEHFR/AMEMBASSY PARIS PRIORITY 1492
RUEHRO/AMEMBASSY ROME PRIORITY 2479
RHEHNSC/NSC WASHDC PRIORITY
RUEKJCS/DIA WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY

S E C R E T THE HAGUE 000444

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 has
denied an export license for power plant turbine blades
destined for Iran. Dutch officials have formally asked other
European countries with companies that produce similar parts
to block their export to Iran. The Dutch have asked us
informally 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 of
Economic Affairs (MEA) and Foreign Affairs (MFA) asked to
meet with EconOff June 30. MEA,s Kees Jan Steenhoek
described his office,s decision to block Sulzer Eldim BV,s
(Dutch subsidiary of Swiss parent company Sulzer Metco)
application to export gas-fired electricity turbine
replacement rotor blades to Iran. PolMilOff,s subsequent
July 9 meeting with MFA,s export control policy official
Josephine Frantzen provided further detail.

¶3. (S/NF) Until 2009, Dutch customs authorities routinely
stopped Sulzer Eldim,s Iran-bound shipments, then released
them when satisfied the rotor blades were destined for
civilian-use electricity production. However, after
discovering in January 2009 the UK had blocked a GBP 45
million shipment of similar parts, MEA used a &catch-all8
provision requiring Sulzer Eldim to obtain an export license
for the blades, on the grounds the electricity could be
diverted to military or nuclear programs. Sulzer Eldim
subsequently applied for an export license on a EUR 40
million order. The Dutch recently denied the application and
posted 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 that
supplies the civilian power sector there, but also has ties
to the military. The Dutch review of the case led them to
believe the electricity produced by the turbines &might not
be used for civilian purposes.8 One of Sulzer Eldim,s
directors is an Iranian national. MEA estimates blocking the
firm,s exports to Iran could cause it to lose half its
revenue. Sulzer Eldim has already laid off some of its
400-person staff, a controversial decision in the
economically struggling southern province of Limburg where
the company is located.

¶5. (S/NF) The Dutch government has demarched other European
capitals -- including Paris, Berlin, and Rome -- where rotor
blade manufacturers are located. According to Frantzen, the
Italian government had a &positive reaction,8 but the
others have not responded. The Dutch do not intend to
demarche Washington at this time. However, GE is capable of
supplying the blades, and the Dutch hope the USG will not
allow GE to export these products to Iran. The Dutch want
other countries to be equally vigilant in denying export
licenses for these parts so as to maintain cohesion within
the NSG and not disadvantage Dutch business interests. The
Dutch are particularly concerned German company Siemens will
continue to export the blades to Iran.
GALLAGHER