German export control agency BAFA for months approved Iran deals despite warnings

STOP THE BOMB press release, December 21, 2011

The German Export Control Agency (BAFA) approved exports for the development of the South Pars gas field, a project of the sanctioned Iranian Revolutionary Guards. The agency ignored warnings about Iranian front companies. STOP THE BOMB publishes the correspondence with the export control agency and is calling for the dismissal of its president Dr. Arnold Wallraff.

The Wall Street Journal reported on December 17, 2011, that the German Hansa Group AG since June 2010 brokered exports for the Iranian energy sector worth 150 Million Euros. Iranian partner was the Iranian company PetroKish, established in April 2010, which assumed the contracts and personal of Sepanir, an Iranian Revolutionary Guards (IRGC) company sanctioned by the UN in June 2010. Thus, the deals and technology deliveries for the Iranian projects could continue seamlessly. [1] The deals with PetroKish have been approved by the Federal Office of Economics and Export Control (BAFA), but according to documents leaked to STOP THE BOMB by an informant, the BAFA had for over half a year clear signs for a German-Iranian deception maneuver in order to circumvent sanctions.

Already on May 26, 2011, the BAFA received an export application by the Minimax GmbH & Co. KG, which included documents with the logos of the sanctioned IRGC companies Sepanir and Khatam al-Anbia. On July 14, 2011, STOP THE BOMB spokesperson Jonathan Weckerle informed the BAFA about evidences that PetroKish was an IRGC front company. On August 8, 2011, STOP THE BOMB sent documents to the BAFA with clear evidence for the likely roles of Hansa Group AG as intermediary, of PetroKish as Iranian front company and of Sepanir and Khatam al-Anbia as Iranian business partners. The BAFA was, among other things, asked to check the documents and to hitherto stop all deals that involved the Hansa Group AG. The BAFA answered that the documents were “currently checked”, but, as the Wall Street Journal reports, continued to approve the exports. [2]

Until today, we know of no steps by the BAFA to legally binding stop the deliveries to PetroKish and to cancel the export permissions. The BAFA until now declines to comment on the case. The Wall Street Journal only mentioned a “request” by BAFA to the Hansa Group AG, asking for a stop of the deliveries to PetroKish, referring to informal deliberations about future Iran sanctions at the EU minister meeting on December 1, 2011.

STOP THE BOMB spokesperson Jonathan Weckerle comments: “Companies that greedily seek and use every opportunity to circumvent sanctions, officials that close both eyes despite clearest evidence for deception maneuvers and until today have failed to draw clear consequences – this is how Germany acts in face of the nuclear armament of the Islamist and anti-Semitic dictatorship in Iran. The German Sonderweg [special path] to block Western Iran sanctions is thus not only taken on the diplomatic scene, but also on the administrative level. Human rights in Iran, Israel’s security and the international anti-proliferation efforts are all subordinated to German export interests.” [3]

Hansa's trade with Iran known to STOP THE BOMB consists of deliveries for the development of the South Pars gasfield, the central project of the Iranian energy industry. The energy sector is of singular economic and political importance for the Iranian regime, and it is in great parts controlled and run by the sanctioned Revolutionary Guards. The energy sector is thus the focus of the international sanctions efforts. [4] As long as deliveries are not completely banned, they should have to undergo the sharpest controls by specialists. Jonathan Weckerle comments the policy of the BAFA as follows:

“The Federal Office of Export Control has for months approved export applications for well-known projects of the Iranian Revolutionary Guards and thereby subverted international sanctions. When documents and explicit evidences for dangerous and illegal deals with Iran are ignored, one can no longer speak of incompetence. It is the German government’s responsibility to finally stop the circumvention of international sanctions against Iran by imposing a complete embargo on exports for the energy sector and by establishing an effective control system. STOP THE  BOMB calls for the dismissal of the responsible BAFA president Dr. Arnold Wallraff as well as investigations against the Hansa Group AG and its German business partners.”

[1] David Crawford, Sanctions Hit—and Miss—in German Trade With Iran, Wall Street Journal, Dec. 17, 2011.

[2] The correspondence with the BAFA is documented below. The documents leaked to STOP THE BOMB can be reviewed by journalists upon request.

[3] Two recent studies by Matthias Küntzel show how Germany blocks sanctions against the Central Bank of Iran:
http://www.matthiaskuentzel.de/contents/what-about-the-european-union
http://www.matthiaskuentzel.de/contents/sanktionen-gegen-teheran-warum-zaudert-die-europaeische-union (German)

[4] Find an overview of the role of the Revolutionary Guards in the Iranian energy sector here: http://www.defenddemocracy.org/media-hit/irans-energy-partners/
The deals are related to delivieries for the development of the phases 13, 15-16 and 22-24 of the South Pars gas field. In 2010, the sanctioned Revolutionary Guards business empire Khatam al-Anbia transferred the development of the phases 15 and 16 to the Iran Shipbuilding & Offshore Industries Complex Co (ISOICO) (http://www.payvand.com/news/11/mar/1019.html), a subcontractor of the Industrial Development and Renovation Organization of Iran (IDRO) (http://www.iranwatch.org/suspect/records/Industrial-Development-and-Renovation.html), which is on the EU sanctions list. The phases 22-24 are being developed by Khatam al-Anbia. (http://www.google.com/hostednews/afp/article/ALeqM5hO8-2zc6BnKaP-2LaqMckSMDa1dg)

STOP THE BOMB's correspondence with the BAFA

STOP THE BOMB to BAFA, August 8, 2011

Dear Sir or Madam,

thank you for your reply of July 25, 2011, regarding my inquiry about Iran deals of July 14, 2011. Since you cannot answer questions regarding Iranian companies (“no abstract questions of law”), I am sending you some documents for confidential examination. You find a selection of documents in the attachment, which have been leaked to the campaign “STOP THE BOMB – No Deals With The Iranian Regime”, for which I am the spokesperson. As far as I can see, the source is reliable.

You can find the following pdf files in the attachment:

• Documents about a purchase order for valves of Samson AG for the Iranian South Pars project. The documents show the involvement of the sanctioned Iranian company Sepanir in the deal. Furthermore, the documents (partly written in Farsi) show that the Hansa Group AG superseded the Mannesmann International GmbH as intermediary.
• Business cards and contact information from G.R. Goorkani show that he is or was working in the same field of activity, namely the procurement of foreign technology, for Sepanir, PetroKish and the Hansa Group.
• Business cards by A.M. Ettehad show that he is or has been working for Sepanir and PetroKish.
• A correspondence with the Minimax GmbH regarding an Iran deal suggests that the Hansa Group as the intermediary is obscuring the ultimate buyer PetroKish or Sepanir. Furthermore, you can see that BAFA staff member Mr. Guretzka accidentally has learned about the involvement of the sanctioned Iranian company Sepanir.

Regarding these documents, I am asking you to answer the following questions: Which consequences had the mentioning of a name of a sanctioned Iranian company in an export application to the BAFA? What did the BAFA do to check the involvement of Sepanir in this deal? Did Minimax get an export permit despite the reference to Sepanir?

If the documents are authentic, they in my opinion prove the following:

• A close connection between Sepanir, PetroKish and the South Pars project.
• Business relations between the Hansa Group AG and Sepanir.
• The fact that the BAFA in person of Mr. Guretzka has evidence for these connections.

With respect to the attached documents and the above considerations, I ask the BAFA:

• to check the documents.
• to stop all Iran deals in which the Hansa Group AG and/or PetroKish are involved, and check them intensively until all documents are scrutinized.
• to stop all export applications for the Iranian South Pars project because of the significant involvement of sanctioned Iranian entities.
• If the documents are authentic, to take legal measures against the Hansa Group AG and its German business partners for consciously doing business in which sanctioned Iranian companies are involved, namely Sepanir, and for deceiving the authorities about this.

[…]

Yours sincerely,
Jonathan Weckerle

BAFA to STOP THE BOMB, August 11, 2011

Dear Mr. Weckerle,

I am referring to your request from August 8 regarding prohibitions resp. authorization requirements for exports to Iran.

Firstly, thank you for sending us the documents, which are currently being checked. Please understand that we cannot inform you about further internal steps of our office.

Regarding your inquiry about export permits by concrete companies, § 30 of the Administrative Procedures Act gives every applicant the right that company and trade secrets will not be made public by the agency without authorization. Even the question whether or not an application exists has to be kept secret. […]

If the BAFA during an application process receives information about sanctioned Iranian entities, the decision about the export in question will be made with respect to the applicable embargo rules. Violations against delivery- and supply bans in Germany are criminal acts, and the investigation authorities pursue any evidence for such violations.

I hope I could help you with this reply.

Yours sincerely,
On behalf of [Bafa]
Christoph Witte

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