Modern Industries Technique Company (MITEC) – an Iranian company which has used multiple aliases —is alleged to have attempted to procure via Tanideh 1,767 valves for the heavy water research reactor under construction at Arak between 2007 and 2011.[1] 1,163 valves are alleged to have reached MITEC during the period. Some of these were specified to Institute of Electrical and Electronics Engineers (IEEE) standard 382 (for nuclear power generating stations), and actuators with “an IP rating of 67”.[2] IEEE 382 standard is particularly notable given that products meeting this specification are able to operate in a radiation environment.[3]This number of valves is believed to be sufficient to equip the entire Arak facility in orders worth $7.7 million.[4]

Various national authorities, including the US and Germany, had concerns about Iran’s procurement activities relating to valves since at least 2009.[5] The US State Department first expressed concern to German colleagues around April 2009 with regards to the targeting of German company, MIT-Weimar, by MITEC.[6] Again, in September 2009, the US authorities expressed concern to German authorities regarding attempts by MITEC to procure stainless steel valves, this time from two German companies, including a firm called MIT-Weimar.[7]

By December 2009, investigations undertaken by the German authorities indicated to the US, incorrectly, that concerns with regards to the targeting of MIT-Weimar were groundless. A cable noted that the German authorities ‘found no evidence of a pending export of steel valves to Sherkat-E Sakhtemani-Ye Rahtess’.[8]Sherkat-E Sakhtemani-Ye Rahtess was said to be working on behalf of Rahkar Sanaye Novin Company (MITEC), and on behalf of the Atomic Energy Organisation of Iran.[9]

Role of Tanideh and Associates

MITEC contacted Hossein Tanideh, an Iranian national and purportedly the owner of a number of companies in Germany and elsewhere, to request the procurement of three types of valve.[10]Tanideh’s role was purportedly one of facilitator: he identified and approached the manufacturers, and provided details of false front companies after these manufacturers were approached by the German authorities. He also appears to have used two other individuals – Gholamali Kazemi and Kianzad Kazemi – working for him in Germany to facilitate the scheme.

Rudolf Mayer

Tanideh first made contact with Rudolf Mayer – owner of MIT-Weimar – in 2007.[11] There is some ambiguity regarding the exact role played by Mayer and MIT-Weimar. Some press reports detail Rudolf M as a ‘valve manufacturer’, citing German intelligence reports which also describe him as a manufacturer.[12] An individual who attended the trial also verified that Rudolf Mayer’s company was said to be the manufacturer of the valves.[13]

Bekasar Industrietechnik GmbH

A second dimension to the case involved the procurement of valves from a Halle-based business. Attempts were made to procure 655 valves, with 55 being transferred to Iran. This Halle-based company is Bekasar Industrietechnik GmbH, described as a ‘wholesaler’ of industrial products.[14] It is unknown where the valves in this case were procured from – Bekasar is not a manufacturer.

Gholamali and Kianzad Kazemi

Gholamali and Kianzad Kazemiworked on behalf of Tanideh in Germany to facilitate the scheme. Kianzad Kazemi, the son of Gholamali Kazemi, was undertaking an apprenticeship at Bekasar.[15] He was in the second year of the apprenticeship and had been given responsibility for deals involving Iran, amongst other activities. Kianzad was allegedly present at the initial meeting between Mayer and Tanideh. The Kazemis also have other business interests, purportedly in the import-export area. However, there is no evidence that any of the above companies were used by the Kazemis in their illicit activities.

Alleged Shipments

The table below provides a summary of the alleged shipments of valves, derived from open sources, that were coordinated by Tanideh (an incomplete account is currently available in open sources):

Valve shipments purportedly made to MITEC and   Arak[16]
Date	Supplier	Product	Alleged End User	Actual End User	Comments
October 2010	MIT-Weimar	Valves (unstated quantity[17])	Fictional end user later provided in Azerbaijan	Iran	Shipments made via Turkey; believed to have   reached Iran.
Prior to or during Spring 2011	Bekasar Industrietechnik GmbH,	655 standard industrial valves (€1 mil value,   unlisted)	Turkish firm?	Iran	Shipments made via Turkey; 51 valves alleged to   have reached Iran.
Prior   to or during Spring 2011	Valves forged in India by Bell-o-seal,   transferred to Turkey (order organised by German-based entities)	856 valves specifically designed for nuclear end   use.	Turkish firm?	Iran	Allegedly sent on 4 occasions; believed to have   reached Iran.

German Shipments

Successful negotiation between Rudolf Mayer and Tanideh led to a first shipment of valves being made in October 2010 via Turkey to Iran.[18] Shipments were also made by the Bekasar to Iran via Turkey. From Bekasar, Only 51 valves of the 655 planned actually made it through to Iran. The Indian shipments are also believed to have been organised in Germany, most likely by the Kazemis. It is not known whether this was also through Kianzad Kazemi’s work at Bekasar.

In court it was revealed that US authorities had raised concerns about Tanideh with German authorities on several occasions, but BAFA had nonetheless issued a licence for the export of the valves to Tanideh on 8 September 2011.[19]Evidence of Iranian procurement activities in Germany is not unusual. German industry has frequently been targeted by Iranian illicit procurement in the past, with procurement agents being attracted by the quality of the goods, and facilitated by a significant Iranian expatriate community.

Indian Aspects

Unable to source all the valves required within Germany, Tanideh purportedly sourced valves from an Indian firm, believed to be ‘Bell-o-seal’. The Indian firm was told that the end use for these valves was a firm in Turkey. Indian enterprise had developed a capability to manufacture bellows-sealed valves after the country’s isolation from the global nuclear market following its nuclear tests, but despite this the order was nonetheless processed.

There are conflicting reports as to whether the Indian government issued a license for the export. In fact some media reports allege that a license was not required.[20] If a licence was issued, it suggests that insufficient due diligence was conducted by Indian licensing officials. If no licence was required then it suggests that the company should have undertaken more due diligence into the declared end use.

Transhipment Locations: Turkey and Azerbaijan

The UN Panel of Experts established pursuant to resolution 1929 (2010) has noted that ‘this procurement involved the use of front companies in other third countries and false end user documentation’.[21] Press reports highlight the use of front companies based in Turkey, and particularly one company, IDI which was owned by Tanideh. Turkey has been emerging as a significant transhipment destination in the transfer of sensitive goods to Iran.[22] In part this is because the country shares a 500km land border with Iran which has insufficient border controls. Turkey is also home to an extensive Iranian business community, and has been a key node in Iran’s attempts to circumvent sanctions.

During the trial, the involvement of an Azerbaijani dimension also came to light, although no details were provided of the entity, or specific role.

Methods and Techniques

Kinzaid K and his father Gholamali K are alleged in some cases to have been ‘responsible for coordinating the project in Germany’.[23]This would seem a possibility given Tanideh’s arrest in Turkey.

Tanideh allegedly introduced himself to German industrialists as a ‘refinery manager’.[24] Valves frequently have applications in the petro-chemical industries, and assuming this fabricated position may have been to inspire confidence in his bonafides. Some media sources do cite an email address purportedly used by one of the defendants (although not which one) as ghost18273@hotmail.com.[25]

Pentane Chemistry

The final report of the UN Panel of Experts established pursuant to resolution 1929 (2010) notes the involvement of the entity ‘Pentane Chemistry’.[26]  US State Department reports allege that Tanideh was ‘Vice President’ of Iran’s Pentane Chemistry Industries Board of Directors as well as Managing Director of the Sherkate Sakhtemani Rahtes Sahami Company (also known as the Rahtes Company)’.[27]

It is not the first time that Pentane has been involved in illicit procurement activities, being linked to a shipment of phosphor bronze wire mesh intercepted at Seoul International Airport during transhipment between Tianjin, China and Turkey. The Panel investigated the interdiction and included findings in its 2011 report that this constituted a breach of sanctions.[28]

The US State Department also provides more detail regarding the role of Pentane Chemistry Industries in the Arak heavy water reactor project. A 2012 factsheet details that ‘since late 2009 PCI has been in charge of the distillation column project at this reactor’.[29] It goes on to say that Pentane Chemistry is also involved in manufacture, noting that ‘PCI began manufacturing phosphor bronze mesh screens for the distillation columns in March 2012’.[30]

Case Outcomes

Tanideh was designated by the US under EO13382 in mid-2012. He was arrested in January 2013 and remains in prison in Turkey awaiting trial with German extradition requests so far going unfulfilled. On 8 November 2013, four German nationals were also convicted of involvement in the conspiracy in a German court.[31]

• Rudolph Mayer (German national) – Weimar-based businessman and owner of MIT-Weimar received three years in prison.
• Gholamali Kazemi (German-Iranian national) – Received four years in prison.
• Kianzad Kazemi (German-Iranian national) – employee of Bekasar, son of Gholamali K. received 2 years, 9 months in prison.
• Hamid Khouran (German-Iranian national) – Received a suspended sentence of 1 and a half years.

One of the four will spend time in prison.[32] The actions and testimony of the four in court can shed some light on what drove them to take part in these transactions.[33] Mayer and Khouran seemed to be motivated by the financial gain. The Kazemis appeared to be more motivated by their allegiance to the Iranian regime. Khouran did not share such an allegiance.

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[1] UN Panel of Experts established pursuant to resolution 1929 (2010), Final Report 2013, p.7.

[2]Ibid.

[3]See the IEEE 382 standard at http://ieeexplore.ieee.org/stamp/stamp.jsp?tp=&arnumber=531658, accessed 6 January 2014.

[4]Cathrin Gilbert, Holger Stark & Andreas Ulrich, ‘Nuclear Technology for Iran: German Investigators Uncover Illegal Exports’, Der Spiegel, 1 October 2012, http://www.spiegel.de/international/world/nuclear-technology-for-iran-german-investigators-uncover-illegal-exports-a-858893.html, accessed 6 January 2014.

[5] A recent TV documentary in Germany has explored the case. ‘Startling Revelations From an Iranian Smuggling Case in Hamburg’, The Algemeiner Blog, 17 September 2013, http://www.algemeiner.com/2013/09/17/startling-revelations-from-an-iranian-smuggling-case-in-hamburg/, accessed 6 January 2014.

[6] US Secretary of State, ‘NIAG 9028: entity with ties to Iran’s Nuclear Program Attempting to Procure Stainless Steel Valves’, US State Department Cable, No.09STATE34336, 8 April 2009, http://wikileaks.org/cable/2009/04/09STATE34336.html, accessed 10 January 2014.

[7] Secretary of State ‘NIAG 9130: IRAN SEEKS GERMAN-ORIGIN VALVES’, US State Department Cable No. 09STATE96891, 17 September 2009, http://www.wikileaks.org/plusd/cables/09STATE96891_a.html, accessed 6 January 2014.

[8] US Embassy Berlin, ‘NIAG 9028: Germany Says No Deals in Place to Send German Origin Steel Valves to Iran’, US State Department Cable, No.09BERLIN1535, 3 December 2009, http://wikileaks.org/cable/2009/12/09BERLIN1535.html, accessed 10 January 2014.

[9] US Secretary of State, ‘NIAG 9028: entity with ties to Iran’s Nuclear Program Attempting to Procure Stainless Steel Valves’, US State Department Cable, No.09STATE34336, 8 April 2009, http://wikileaks.org/cable/2009/04/09STATE34336.html, accessed 10 January 2014.

[10] Cathrin Gilbert, Holger Stark & Andreas Ulrich, ‘Nuclear Technology for Iran: German Investigators Uncover Illegal Exports’, Der Spiegel, 1 October 2012, http://www.spiegel.de/international/world/nuclear-technology-for-iran-german-investigators-uncover-illegal-exports-a-858893.html, accessed 6 January 2014.

[11] Ibid.

[12] ‘Startling Revelations from an Iranian Smuggling Case in Hamburg’, The Algemeiner Blog, 17 September 2013, http://www.algemeiner.com/2013/09/17/startling-revelations-from-an-iranian-smuggling-case-in-hamburg/, accessed 6 January 2014.

[13] Interview, unnamed individual that attended the November 2013 trial in Hamburg, conducted 10 January 2014.

[14] Interview, unnamed individual that attended the November 2013 trial in Hamburg, conducted 10 January 2014; ‘Bekasar Waren Import Export’, listing on HelloTrade website, http://www.hellotrade.com/bekasar-waren-import-export/, accessed 3 February 2014.

[15] Interview, unnamed individual that attended the November 2013 trial in Hamburg, conducted 10 January 2014.

[16] Derived from Cathrin Gilbert, Holger Stark & Andreas Ulrich, ‘Nuclear Technology for Iran: German Investigators Uncover Illegal Exports’ and ‘Covert Iranian nuclear dealings via Turkey revealed’, Today’s Zamen, 12 March 2013, http://www.todayszaman.com/news-309539-covert-iranian-nuclear-dealings-via-turkey-revealed.html, accessed 6 January 2014.

[17] If 1,767 figure from 2013 UN Panel report is correct, likely number is 256 valves. The German court case refers to just 92 valves, however there is uncertainty as to whetehr this refers to just the Weimar-based component (as opposed to including the Halle shipments), or whether it was easier to prove the defendents guilty on the basis of evidence referring to the shipment of 92 valves. ‘Haftstrafen für Embargo-Verstoß: Gericht verurteilt vier Geschäftsleute’, Die Welt, 9 November 2013, available from http://www.welt.de/print/die_welt/hamburg/article121709163/Haftstrafen-fuer-Embargo-Verstoss.html, accessed 6 January 2014.

[18] ‘Germany Accuses four of Breaching Iran Nuclear Embargo’, BBC News, 15 August 2012, http://www.bbc.co.uk/news/world-europe-19267157, accessed 6 January 2014.

[19] ‘Deutsche Ventile im iranischen Atomprogramm’, Die Welt, 27 August 2013, http://www.welt.de/politik/deutschland/article119406069/Deutsche-Ventile-im-iranischen-Atomprogramm.html, accessed 6 January 2014.

[20] ‘India denies charge of involvement in illicit nuclear trade’, The Hindu, 30 October 2013, http://www.thehindu.com/news/national/india-denies-charge-of-involvement-in-illicit-nuclear-trade/article5286629.ece, accessed 10 January 2014.

[21]UN Panel of Experts established pursuant to UNSCR 1929, Final Report 2011, p.15.

[22] ‘Turkey’, Project Alpha diversion hub profile, http://www.acsss.info/turkey, accessed 13 January 2014.

[23] Cathrin Gilbert, Holger Stark & Andreas Ulrich, ‘Nuclear Technology for Iran: German Investigators Uncover Illegal Exports’, Der Spiegel, 1 October 2012, http://www.spiegel.de/international/world/nuclear-technology-for-iran-german-investigators-uncover-illegal-exports-a-858893.html, accessed 6 January 2014.

[24] ‘Startling Revelations From an Iranian Smuggling Case in Hamburg’, The Algemeiner Blog, 17 September 2013, http://www.algemeiner.com/2013/09/17/startling-revelations-from-an-iranian-smuggling-case-in-hamburg/, accessed 6 January 2014.

[25] ‘Verstoß gegen Handelsembargo: Deutsche Exporteure wegen Iran-Deals vor Gericht’, Der Spiegel, 25 July 2013, http://www.spiegel.de/politik/ausland/prozess-in-hamburg-geschaeftsleute-sollen-iran-embargo-verletzt-haben-a-913080.html, accessed 6 January 2014.

[26] ‘Covert Iranian nuclear dealings via Turkey revealed’, Today’s Zamen, 12 March 2013, http://www.todayszaman.com/news-309539-covert-iranian-nuclear-dealings-via-turkey-revealed.html, accessed 6 January 2013.

[27] US State Department, ‘Fact Sheet on Increasing Sanctions Against Government of Iran’, US Virtual Embassy in Iran Website, 12 July 2013, http://iran.usembassy.gov/treasfs.html, accessed 6 January 2014.

[28]UN Panel of Experts established pursuant to UNSCR 1929, Final Report 2011, p.15.

[29] US State Department, ‘Fact Sheet on Increasing Sanctions Against Government of Iran’, US Virtual Embassy in Iran Website, 12 July 2013, http://iran.usembassy.gov/treasfs.html, accessed 6 January 2014.

[30] Ibid.

[31] Cathrin Gilbert, Holger Stark & Andreas Ulrich, ‘Nuclear Technology for Iran: German Investigators Uncover Illegal Exports’, Der Spiegel, 1 October 2012,  http://www.spiegel.de/international/world/nuclear-technology-for-iran-german-investigators-uncover-illegal-exports-a-858893.html; ‘Haftstrafen für Embargo-Verstoß: Gericht verurteilt vier Geschäftsleute’, Die Welt, 9 November 2013, available from http://www.welt.de/print/die_welt/hamburg/article121709163/Haftstrafen-fuer-Embargo-Verstoss.html, accessed 6 January 2014.

[32] ‘The Arak Trial in Hamburg: Sanctions against Iran and German Control Authorities’, Stop the Bomb website, 16 November 2013, http://de.stopthebomb.net/en/germany-iran/bafa.html, accessed 6 January 2014.

[33] Interview, unnamed individual that attended the November 2013 trial in Hamburg, conducted 10 January 2014.