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GERMAN-RUSSIAN FIRM INVESTIGATED FOR EXPORTS FOR IRAN NUCLEAR PLANT
Der Spiegel website, Hamburg
2 Apr 06
Text of report by Sven Roebel and Andreas Wassermann, entitled
"Detour via Moscow", published by German news magazine Der Spiegel
website on 2 April
Investigators are on the trail of a German-Russian network that
reportedly sought business with companies for the Iranian nuclear
programme. The federal government is alarmed.
The German-Armenian business pair from the Hessian millionaire's
neighbourhood of Bad Homburg is familiar with breeding and
gambling. For years they have been successfully breeding racehorses,
thoroughbreds, which occasionally demand something of their jockeys,
sometimes start as outsiders and then end up placing and thus winning
the gamblers a tidy sum.
But in business life the two horse owners may have galloped too
fast. Their firm, a telecommunication services company, has ended up
in the crosshairs of public prosecutors and customs investigators. The
company is suspected of having supplied special cables for the Iranian
nuclear programme.
The week before last, customs investigators searched the business
premises of the business pair in a Bad Homburg villa and gathered
business correspondence and data media. The official visit to Taunus
was part of a nationwide raid in which 250 police and customs officials
searched 41 companies, small and medium firms, engineering offices
and subsidiaries of the power plant manufacturer Siemens and two
divisions of the energy technology company ABB.
The companies drew attention during investigations by the Potsdam
public prosecutor's office into the manager of the since-liquidated
Berlin firm Vero Handels GmbH, suspected of having sought special
parts for construction of the Iranian Bushehr nuclear reactor
throughout Germany.
This does not involve key technology for the nuclear reactor, such
as fissionable material. Investigators believe Vero found makers of
important accessory equipment: motors, electromagnetic brakes and
switch gear. They are used in making filling equipment for beverages,
or also by nuclear power plants.
But because the seemingly harmless parts were to go via Russia to
Teheran and in fact some arrived there, German authorities were
alarmed. Public prosecutors and customs investigators are not the
only ones handling the Vero case. Last week the federal government
also looked into it; after all, any report of possible exports towards
Iran weakens the position of Foreign Minister Frank-Walter Steinmeier
(SPD [Social Democratic Party of Germany]) in the tug-of-war over
the nuclear programme of Iranian President Mahmud Ahmadinezhad.
An expert's report of the Foreign Ministry says Vero's activities
are "suited to calling into question the credibility of the
federal government's nonproliferation policy and, as a consequence,
substantially jeopardize the foreign relations of the Federal Republic
of Germany." As early as 1991 the federal government had banned all
deliveries for the Iranian nuclear programme, including for goods
"of more peripheral significance to the operation of a nuclear
power plant".
Customs got on the trail of the procurement network operators early in
2004 when searching through export delivery notes of ISV, an industrial
equipper from the Magdeburg region. In the Export Control programme
("Kontrolle in der Ausfuhr," or Kobra for short), selective samplings
are used to determine whether they include so-called dual-use goods:
facilities or machine parts that can be used for both civil and
military purposes and export of which is therefore banned to certain
regions of the world.
The ISV delivery met these criteria, except that a firm in Moscow
was shown as the consignee and such goods can be exported there. Even
so, the customs agents had doubts that were strengthened by further
investigations. The invoice address was not the contractual partner
Vero Handels GmbH Russland, but an almost identical Vero Handels FZE,
headquartered in Jabal Ali, Dubai. The free trade zone in the Jabal
Ali port has long been considered an important trans-shipment site
for clandestine deals with Iran.
The Berlin-Brandenburg customs investigation found that the
Saxony-Anhalt firm used this pattern for making 10 individual
deliveries within a year. For example, on 1 February 2002 ISV reported
through a forwarding agent at the Berlin-Marzahn customs office the
export of two electric motors, two crane heating and cooling units,
six terminal boxes, five disc brakes and three drums of Neoflex cable,
which are components of a crane for exchanging fuel elements. According
to the delivery papers, the destination was Kaliningrad, the consignee
the parastatal Russian nuclear power plant builder Atomstroyexport.
But the cargo from Germany did not remain in the Russian exclave. It
ultimately landed, the Office for the Protection of the Constitution
reportedly learnt at any rate, at an entirely different construction
site of Atomstroyexport, some 4,500 kilometres further southeast
in Iran's Bushehr, where the Russian power plant builder intends to
complete the 1,000-megawatt reactor on which construction began in
the 1970's with German know-how.
There was thus created, as the customs investigation office determined
in a letter as early as July 2004, based on the "evidence presented
by the Federal Office for the Protection of the Constitution, the
suspicion that contrary to the information in the export declarations
the actual country of destination of the goods was not Russia but Iran,
and that these goods were to be used in a nuclear facility there".
In November 2004 the owner of the firm ISV, Axel K., was arrested
when the company's premises were searched, as was his brother Georg
upon returning from a business trip to Ukraine. The "Atom brothers",
as they were dubbed by the tabloid press, confessed, and in November
2005 the Frankfurt (Oder) district court gave them suspended sentences
of more than one year for violating the Foreign Trade Act.
The confessions helped to mitigate the punishment and were hardly
necessary for the public prosecutor's office to investigate the
charges. The company correspondence already provided enough evidence;
the ISV managers always stored letters dealing with Iran business under
the same file heading: "Iran KKW [nuclear power plant] Bushehr." The
investigators then also found a mailed digital photo as an attachment
to a complaint. It showed in detail the articles allegedly bound for
Russia against the backdrop of the half reactor dome of the Bushehr
nuclear construction site.
But they devoted even more attention to a document showing that the
customer of the illegal deals, Vero Handels GmbH Russland, had to
pay a commission of 50,000 dollars for the deal to a certain Dmitriy S.
The contract annex, at first sight marginal, gave the investigators
a clue into how the acquisition of components for the Iranian power
plant construction could have taken place in Germany. The trail led
to a side street of the West Berlin shopping street Tauentzien, to
an austere apartment building. Until last year the German firms Vero
Handels GmbH and Solo Handels GmbH resided there in an apartment on
the second floor.
The two companies had not only their addresses in common for a
time. Both firms were founded in 1991 by a chemist born in Tashkent,
Dmitriy S. One dealt in the early 1990's in cars, textiles and
electrical equipment, the other in construction materials. S. was
the manager of Vero; at Solo, for a long time he was an agent for
Siberian businesspeople.
But at least in the years 2001 to 2003, S. was obviously involved
in nuclear power plant construction matters, and not just as the
recipient of commissions for ISV deliveries. Upon searching the Solo
and Vero company premises, investigators found a whole series of
clues to other German firms. Vero Handels GmbH in Berlin apparently
systematically looked for potential suppliers for the nuclear power
plant project in Iran.
But middleman S., who now lives in Moscow and remains silent about
the charges, apparently did not always reveal to everyone the
intended country of the deliveries. One manager recalls that Vero
wanted to order special electrical technology from a firm from North
Rhine-Westphalia. The supposed destination was Russia. The deal did
not go through, the firm explains. Most of the 41 firms searched,
including ABB and Siemens subsidiaries, turned down the dubious offers.
But Vero was successful at least four times, the Potsdam public
prosecutors learned. More business relationships are currently
being studied. But in several cases those concerned have been able
to substantiate that they were unaware that the order was intended
for Iran.
It was obviously different with the company in Bad Homburg. There the
investigators seized company documents that led to the suspicion that
the company not only delivered items to Iran or had them delivered
there, but was also able to know for which project acquisitions were
made here. The manager was unable to speak about the charges of having
violated export bans.
The nuclear power plant in Bushehr is not an unknown project for
the company, which as a customer mentions almost all major German
armaments manufacturers. On the reference list on the Internet, the
nuclear reactor in the Iranian port city is plainly listed under the
section Nuclear Plant Construction.
From: Emil Lazarian | Ararat NewsPress
Der Spiegel website, Hamburg
2 Apr 06
Text of report by Sven Roebel and Andreas Wassermann, entitled
"Detour via Moscow", published by German news magazine Der Spiegel
website on 2 April
Investigators are on the trail of a German-Russian network that
reportedly sought business with companies for the Iranian nuclear
programme. The federal government is alarmed.
The German-Armenian business pair from the Hessian millionaire's
neighbourhood of Bad Homburg is familiar with breeding and
gambling. For years they have been successfully breeding racehorses,
thoroughbreds, which occasionally demand something of their jockeys,
sometimes start as outsiders and then end up placing and thus winning
the gamblers a tidy sum.
But in business life the two horse owners may have galloped too
fast. Their firm, a telecommunication services company, has ended up
in the crosshairs of public prosecutors and customs investigators. The
company is suspected of having supplied special cables for the Iranian
nuclear programme.
The week before last, customs investigators searched the business
premises of the business pair in a Bad Homburg villa and gathered
business correspondence and data media. The official visit to Taunus
was part of a nationwide raid in which 250 police and customs officials
searched 41 companies, small and medium firms, engineering offices
and subsidiaries of the power plant manufacturer Siemens and two
divisions of the energy technology company ABB.
The companies drew attention during investigations by the Potsdam
public prosecutor's office into the manager of the since-liquidated
Berlin firm Vero Handels GmbH, suspected of having sought special
parts for construction of the Iranian Bushehr nuclear reactor
throughout Germany.
This does not involve key technology for the nuclear reactor, such
as fissionable material. Investigators believe Vero found makers of
important accessory equipment: motors, electromagnetic brakes and
switch gear. They are used in making filling equipment for beverages,
or also by nuclear power plants.
But because the seemingly harmless parts were to go via Russia to
Teheran and in fact some arrived there, German authorities were
alarmed. Public prosecutors and customs investigators are not the
only ones handling the Vero case. Last week the federal government
also looked into it; after all, any report of possible exports towards
Iran weakens the position of Foreign Minister Frank-Walter Steinmeier
(SPD [Social Democratic Party of Germany]) in the tug-of-war over
the nuclear programme of Iranian President Mahmud Ahmadinezhad.
An expert's report of the Foreign Ministry says Vero's activities
are "suited to calling into question the credibility of the
federal government's nonproliferation policy and, as a consequence,
substantially jeopardize the foreign relations of the Federal Republic
of Germany." As early as 1991 the federal government had banned all
deliveries for the Iranian nuclear programme, including for goods
"of more peripheral significance to the operation of a nuclear
power plant".
Customs got on the trail of the procurement network operators early in
2004 when searching through export delivery notes of ISV, an industrial
equipper from the Magdeburg region. In the Export Control programme
("Kontrolle in der Ausfuhr," or Kobra for short), selective samplings
are used to determine whether they include so-called dual-use goods:
facilities or machine parts that can be used for both civil and
military purposes and export of which is therefore banned to certain
regions of the world.
The ISV delivery met these criteria, except that a firm in Moscow
was shown as the consignee and such goods can be exported there. Even
so, the customs agents had doubts that were strengthened by further
investigations. The invoice address was not the contractual partner
Vero Handels GmbH Russland, but an almost identical Vero Handels FZE,
headquartered in Jabal Ali, Dubai. The free trade zone in the Jabal
Ali port has long been considered an important trans-shipment site
for clandestine deals with Iran.
The Berlin-Brandenburg customs investigation found that the
Saxony-Anhalt firm used this pattern for making 10 individual
deliveries within a year. For example, on 1 February 2002 ISV reported
through a forwarding agent at the Berlin-Marzahn customs office the
export of two electric motors, two crane heating and cooling units,
six terminal boxes, five disc brakes and three drums of Neoflex cable,
which are components of a crane for exchanging fuel elements. According
to the delivery papers, the destination was Kaliningrad, the consignee
the parastatal Russian nuclear power plant builder Atomstroyexport.
But the cargo from Germany did not remain in the Russian exclave. It
ultimately landed, the Office for the Protection of the Constitution
reportedly learnt at any rate, at an entirely different construction
site of Atomstroyexport, some 4,500 kilometres further southeast
in Iran's Bushehr, where the Russian power plant builder intends to
complete the 1,000-megawatt reactor on which construction began in
the 1970's with German know-how.
There was thus created, as the customs investigation office determined
in a letter as early as July 2004, based on the "evidence presented
by the Federal Office for the Protection of the Constitution, the
suspicion that contrary to the information in the export declarations
the actual country of destination of the goods was not Russia but Iran,
and that these goods were to be used in a nuclear facility there".
In November 2004 the owner of the firm ISV, Axel K., was arrested
when the company's premises were searched, as was his brother Georg
upon returning from a business trip to Ukraine. The "Atom brothers",
as they were dubbed by the tabloid press, confessed, and in November
2005 the Frankfurt (Oder) district court gave them suspended sentences
of more than one year for violating the Foreign Trade Act.
The confessions helped to mitigate the punishment and were hardly
necessary for the public prosecutor's office to investigate the
charges. The company correspondence already provided enough evidence;
the ISV managers always stored letters dealing with Iran business under
the same file heading: "Iran KKW [nuclear power plant] Bushehr." The
investigators then also found a mailed digital photo as an attachment
to a complaint. It showed in detail the articles allegedly bound for
Russia against the backdrop of the half reactor dome of the Bushehr
nuclear construction site.
But they devoted even more attention to a document showing that the
customer of the illegal deals, Vero Handels GmbH Russland, had to
pay a commission of 50,000 dollars for the deal to a certain Dmitriy S.
The contract annex, at first sight marginal, gave the investigators
a clue into how the acquisition of components for the Iranian power
plant construction could have taken place in Germany. The trail led
to a side street of the West Berlin shopping street Tauentzien, to
an austere apartment building. Until last year the German firms Vero
Handels GmbH and Solo Handels GmbH resided there in an apartment on
the second floor.
The two companies had not only their addresses in common for a
time. Both firms were founded in 1991 by a chemist born in Tashkent,
Dmitriy S. One dealt in the early 1990's in cars, textiles and
electrical equipment, the other in construction materials. S. was
the manager of Vero; at Solo, for a long time he was an agent for
Siberian businesspeople.
But at least in the years 2001 to 2003, S. was obviously involved
in nuclear power plant construction matters, and not just as the
recipient of commissions for ISV deliveries. Upon searching the Solo
and Vero company premises, investigators found a whole series of
clues to other German firms. Vero Handels GmbH in Berlin apparently
systematically looked for potential suppliers for the nuclear power
plant project in Iran.
But middleman S., who now lives in Moscow and remains silent about
the charges, apparently did not always reveal to everyone the
intended country of the deliveries. One manager recalls that Vero
wanted to order special electrical technology from a firm from North
Rhine-Westphalia. The supposed destination was Russia. The deal did
not go through, the firm explains. Most of the 41 firms searched,
including ABB and Siemens subsidiaries, turned down the dubious offers.
But Vero was successful at least four times, the Potsdam public
prosecutors learned. More business relationships are currently
being studied. But in several cases those concerned have been able
to substantiate that they were unaware that the order was intended
for Iran.
It was obviously different with the company in Bad Homburg. There the
investigators seized company documents that led to the suspicion that
the company not only delivered items to Iran or had them delivered
there, but was also able to know for which project acquisitions were
made here. The manager was unable to speak about the charges of having
violated export bans.
The nuclear power plant in Bushehr is not an unknown project for
the company, which as a customer mentions almost all major German
armaments manufacturers. On the reference list on the Internet, the
nuclear reactor in the Iranian port city is plainly listed under the
section Nuclear Plant Construction.
From: Emil Lazarian | Ararat NewsPress