Czechs Stopped Potential Nuclear Tech Purchase By Iran: Sources

UNITED NATIONS/PRAGUE -- The Czech Republic blocked an attempted purchase by Iran this year of a large shipment of sensitive technology useable for nuclear enrichment after false documentation raised suspicions, U.N. experts and Western sources said.

The incident could add to Western concerns about whether Tehran can be trusted to adhere to a nuclear deal being negotiated with world powers under which it would curb sensitive nuclear work in exchange for sanctions relief.

The negotiators are trying to reach a deal by the end of June after hammering out a preliminary agreement on April 2, with Iran committing to reduce the number of centrifuges it operates and agreeing to other long-term nuclear limitations.

Some details of the attempted purchase were described in the latest annual report of an expert panel for the United Nations Security Council's Iran sanctions committee, which has been seen by Reuters.

The panel said that in January Iran attempted to buy compressors - which have nuclear and non-nuclear applications - made by the U.S.-owned company Howden CKD Compressors.

A Czech state official and a Western diplomat familiar with the case confirmed to Reuters that Iran had attempted to buy the shipment from Howden CKD in the Czech Republic, and that Czech authorities had acted to block the deal.

It was not clear if any intermediaries were involved in the attempt to acquire the machinery.

There was no suggestion that Howden CKD itself was involved in any wrongdoing. Officials at Prague-based Howden declined to comment on the attempted purchase.

The U.N. panel, which monitors compliance with the U.N. sanctions regime, said there had been a "false end user" stated for the order.

"The procurer and transport company involved in the deal had provided false documentation in order to hide the origins, movement and destination of the consignment with the intention of bypassing export controls and sanctions," it added.

The report offered no further details about the attempted transaction. Iran's U.N. mission did not respond to a query about the report.

CONTRACT WORTH $61 million

The Czech state official said the party seeking the compressors had claimed the machinery was needed for a compressor station, such as the kind used to transport naturalgas from one relay station to another.

The official declined to say exactly how the transaction was stopped, provide specifications of the compressors or confirm the intended purchaser. However, he made clear it was the Czech authorities who halted the deal

The official, who spoke on condition of anonymity, said the total value of the contract would have been about 1.5 billion Czech koruna ($61 million).

This was a huge amount for the company concerned, the previously named CKD Kompresory, a leading supplier of multi-stage centrifugal compressors to the oil and gas, petrochemical and other industries.

The firm was acquired by Colfax Corp. of the United States in 2013 for $69.4 million. A spokesman for Colfax declined to comment.

The United States and its Western allies say Iran continues to try to skirt international sanctions on its atomic and missile programs even while negotiating the nuclear deal.

The U.N. panel of experts also noted in its report that Britain informed it of an active Iranian nuclear procurement network linked to blacklisted firms.

While compressors have non-nuclear applications in the oil and gas industry, they also have nuclear uses, including in centrifuge cascades. Centrifuges purify uranium gas fed into them for use as fuel in nuclear reactors or weapons, if purified to levels of around 90 percent of the fissile isotope uranium-235.

"Such compressors can be used to extract enriched uranium directly from the cascades," Olli Heinonen, former deputy director-general of the International Atomic Energy Agency and a nuclear expert currently at Harvard University, told Reuters.

"In particular, they are useful when working with higher enrichment such as 20 percent enriched uranium," he said, adding that precise specifications of the compressors in question would be necessary to make a definitive assessment.

Iran has frozen production of 20 percent enriched uranium, a move that Western officials cite as one of the most important curbs on Iranian nuclear activities under an interim agreement in 2013.

Tehran rejects allegations by Western powers and their allies that it is seeking the capability to produce atomic weapons and says its nuclear program is for peaceful purposes.

The IAEA and the United States have said repeatedly that Tehran has adhered to the terms of the 2013 interim deal.