Project Alpha Case Study in Illicit Procurement: Carbon Fibre to Iran 2013
Background
On the 5th December 2012, the United States Attorney for the Southern District of New York charged four
individuals for the illicit export of goods from the United States to Iran and China. The individuals in question
were: Hamid Reza Hashemi, who lives in Iran but has dual US and Iranian citizenship; Peter Gromacki, a
citizen of the US; Amir Abbas Tamimi, a citizen and resident of Iran; and Murat Taskiran, a citizen of Turkey.
Case studies on the indictments of Tamimi and Gromacki may be found separately on the Project Alpha
website. This case study analyses the co-conspiracy of Hashemi and Taskiran.
The goods that were exported to Iran in this case included carbon fibre, which has a broad range of civil and
military uses, but which may also be used in nuclear gas centrifuges, specifically in the tubes and bellows of
rotor assemblies. Carbon fibre may also be used in military aircraft, such as fighter jets, and lightweight
casings for large, solid-propellant rocket motors. All of the individuals mentioned above were indicted on
counts relating to conspiracy to violate, or actual violation of, the US International Emergency Economic
Powers Act (IEEPA), under which trade with Iran is restricted. This case study serves to highlight some of the
reasons why goods that can be indigenously produced in countries such as Iran are sought from the West,
and the potential dangers to which Western firms are exposed when engaging with networks such as the one
involved here.
Key Points

Carbon fibre is a dual use commodity with a variety of civil and military applications. Its intended
end use in this case cannot be known with any certainty, although a possible use in an Iranian
gas centrifuge, or other military application should not be ruled out;

Regardless of its intended end use, carbon fibre exports are strictly controlled by various
international export control regimes, in addition to which there is a trade embargo in place
between the US and Iran, which forbids the export of goods of any kind from the United States to
the latter. Furthermore, UN sanctions prohibit the export of most carbon fibre to Iran;

Although Iran appears to be capable of producing its own carbon fibre for a variety of purposes,
the quality is thought to be relatively poor. As such, it has tended to seek carbon fibre from
established Western firms, from which it can buy higher quality produce;

This case involved a UK firm which acted as an intermediary to tranship materials from the
United States to Dubai. The UK company that was involved stated that they could ‘ship to Dubai
no problem’. Although it is unclear from the indictment whether the goods were in fact
successfully exported and, therefore, whether a transhipment licence was required, the UK firm
was still responsible for observing end-user controls, and the ongoing trade embargo and
sanctions. Further details about the UK firm in question cannot be found in open sources
Narrative of Events
Hamid Reza Hashemi was a citizen of the United States living and working in Iran at the time of the events in
question. Hashemi operated a company in Tehran which was a procurement firm specialising in the acquisition
of carbon fibre from various brokers. In late 2007, Hashemi began to engage with Murat Taskiran, the
Managing Director of a company in Turkey. Taskiran began at this time to assist Hashemi with his attempts to
acquire carbon fibre from the United States and other locations. To this end, Taskiran contacted a broker, who
operated a company in Orange County in the U.S., about the possibility of procuring some carbon fibre. This
broker then contacted Individual 1 who operated businesses in Europe that brokered deals to procure carbon
fibre for various companies from locations which included the U.S. In March and April 2008, Individual 1,
Project Alpha Case Study in Illicit Procurement: Carbon Fibre to Iran 2013
Taskiran and Hashemi orchestrated the first successful export and transhipment of IM7 carbon fibre to Iran
from the U.S. via Europe and the UAE. The movement of the goods are illustrated in Figure 1, below.
Fig.1
Iran
Europe
• March/April 2008
• Individual 1 is
approached by Taskiran
and Hashemi to procure
carbon fibre from a U.S.
supplier
United States
• Individual 1 arranged for the
U.S. supplier to have the
carbon fibre sent to Europe
• Individual 1 used a
European freight forwarder
to send the carbon fibre
from Europe to Dubai (UAE)
• Individual 1 then
arranged for the carbon
fibre to be transported
from the UAE to Iran
United Arab
Emirates
Individual 1 and Hashemi continued to discuss the further procurement of additional materials for the company
in Iran up until autumn 2012. Since the procurement of materials, such as carbon fibre, is difficult owing to the
substantial trade restrictions that are in place with Iran and on dual-use commodities, Individual 1 attempted to
circumvent potential difficulties by having his company in Dubai used as the destination. He notes that: ‘Europe
is very tough on [the Iranian Company] destination and nearly impossible’. It is clear, then, that Individual 1 was
aware of the limitations on trade with Iran, but proceeded regardless. Later in the same year, in June 2008,
Individual 1 contacted Taskiran again about the procurement of more carbon fibre, which he intended to ship
directly from the U.S. to Turkey. On this occasion, Taskiran had attempted to reduce the price of the carbon
fibre by proposing shipping via Pakistan, but Individual 1 had noted that the price could not be lowered since the
materials were ‘US made’. Shortly afterwards, in July, Individual 1 corresponded with Hashemi again about
providing the latter with prepreg carbon fibre from the U.S. and 1500kg 12k IM7 from Antwerp. Individual 1
notified Hashemi that he could provide him with the carbon fibre for 75 Euros per Kg and could procure a
maximum of 2500kg. Hashemi stated that his company was carrying out tests on the samples sent to him by
Individual 1 and subsequently ordered 1500kg of goods to be sent to Tehran. In 2009, Hashemi corresponded
with Individual 1 about the possible procurement of a T5000 tension meter, with a value of 9670 euros, which
was to be sent to Tehran via Europe and the UAE using the postal service, DHL. A tension meter is used to
measure the tension in wires, cables, and belts etc. and has a wide variety of applications. Later in 2009,
Individual 1 arranged with the United States supplier to export approximately 3095 kg of carbon fibre from the
United States to a company located in the UK. The UK firm stated that it could ‘ship to Dubai with no problem’
and Hashemi instructed Individual 1 to offer the UK firm ‘IM7 12 k’. IM7 carbon fibre is a continuous, high
performance, intermediate modulus, PAN based fibre available in 12,000 (12K) filament count tows. The final
events took place in June 2012, when Hashemi expressed interest in a carbon fibre winding machine from the
US. Individual 1 sent specifications to Hashemi, who said that he would travel to the United States to see the
machine. Hashemi was arrested at John F. Kennedy International Airport as he entered the U.S. on the 1st
December 2012, shortly after which the details of the prosecution were made publically available. Both Hashemi
Project Alpha Case Study in Illicit Procurement: Carbon Fibre to Iran 2013
and Taskiran were charged on counts of violating the following: the International Emergency Economic Powers
Act for their exports and attempted exports to a country that presents a threat to U.S. national security; the
Iranian Transactions Regulations (31 C.F.R.) part 560.201, which prohibits the importation of goods or services
from Iran to the U.S. (this would cover the transfer of money for purchased goods); and failure to acquire the
appropriate licence from OFAC. Hashemi faces a sentence of 60 years imprisonment and Taskiran, 40 years in
prison.
HAMID REZA HASHEMI
MURAT TASKIRAN
Dual U.S. and Iranian citizen who resides in Iran
Turkish citizen
One count of conspiracy to violate IEEPA, and two
substantive IEEPA violations (prosecuted under
IEEPA; ITR; failure to obtain OFAC licence)
Maximum penalty of 60 years in prison
One count of conspiracy to violate IEEPA and one
substantive IEEPA violation (prosecuted under
IEEPA; ITR; failure to obtain OFAC licence)
Maximum penalty of 40 years in prison
Arrested upon entry to the United States via JFK
airport in December 2012. Being held without bail
Taskiran, who faces one IEEPA charge, one
conspiracy charge and a possible 40-year
sentence, is not in U.S. custody
Analysis
The IM7 carbon fibre, which was exported was supposedly intended for use in ‘cng tank production’, although,
as a dual use commodity, it also has potential applications in nuclear gas centrifuges. Indeed, in 2011, it
emerged that Iran had begun to install two new centrifuge types: the IR-2m and the IR-4 centrifuges, both of
which comprise carbon fibre parts. Despite the fact that, in August 2011, Iran announced that it had begun
domestic production of carbon fibre, it has been suggested that the indigenously produced product is of poor
quality when compared to that which can be procured from established Western firms.
It is unclear in this case whether either the U.S. or UK firms involved were actually cognisant of the fact that the
end user was in fact located in Iran, but the UK company was aware that the goods were being shipped to
Dubai, which is a notorious transhipment hub for goods of proliferation concern. The UK firm should, in this
instance, have exercised due diligence and ensured that it asked the appropriate questions as to the bona fides
of the end user and the legitimacy of the end use.
Conclusions
This case demonstrates that the penalties for violation of sanctions and licence requirements can be significant
with both of the accused facing prison sentences of at least 40 years. This case is also a cautionary tale in the
importance of verifying end users, especially when shipping to certain transhipment hubs, such those in the
UAE, which are generally considered to be places of concern for the onward diversion of goods that may be
used in WMD programmes under regimes of concern to the international community. It is incumbent upon all
firms to ensure that they have in place appropriate internal verification measures implemented, for example,
through an Internal Compliance Programme (ICP), which can be used to verify true end users, relevant
domestic controls, and international sanctions or trade embargoes.
Sources used throughout
http://www.justice.gov/usao/nys/pressreleases/December12/HashemietalPR.php
http://isis-online.org/isis-reports/detail/irans-advanced-centrifuges/
http://www.wired.com/images_blogs/dangerroom/2012/09/zhang_complaint.pdf
http://www.justice.gov/usao/nys/pressreleases/December12/HashemietalPR/Gromacki,%20Peter%20Indictment
%2012-Cr-302.pdf
Project Alpha Case Study in Illicit Procurement: Carbon Fibre to Iran 2013
http://www.justice.gov/usao/nys/pressreleases/December12/HashemietalPR/Tamimi,%20Amir%20Abbas%20In
dictment.pdf
http://www.justice.gov/usao/nys/pressreleases/December12/HashemietalPR/Hashemi%20Hamid%20Reza%20
&%20Murat%20Taskiran%20Indictment.pdf
http://www.fbi.gov/newyork/press-releases/2012/four-individuals-charged-in-the-southern-district-of-new-yorkwith-exporting-various-goods-from-the-united-states-to-iran-and-china
http://www.bloomberg.com/news/2012-12-05/four-charged-with-exporting-carbon-fiber-to-iran-china.html
http://www.nytimes.com/2012/12/06/nyregion/3-charged-with-plotting-to-export-carbon-fiber-to-iran.html?_r=0
http://www.spacedaily.com/reports/Five_charged_in_US_over_Iran_China_exports_999.html
http://www.fbi.gov/newyork/press-releases/2012/manhattan-u.s.-attorney-announces-arrest-of-queens-residentfor-the-export-of-military-use-items-to-taiwan-and-attempting-to-export-them-to-china
http://www.armscontrol.org/act/2012_0102/Showcase_of_Missile_Proliferation_Irans_Missile_and_Space_Program