They said Mohsen A, aged 52, had been remanded in custodyon Friday on suspicion of breaching German laws that restrict exports of militarily useful items. Iran is under a UN embargo.
Police raided premises in four German states in connection with the July 2007 sale of the 1.4-million-euro (2.1-million-dollar) sale of the furnace. Investigators believe the furnace could have been used to make missile launcher components.
A German aged 64 and a dual Iranian-German national aged 49 were also under suspicion, the prosecutors in the southern city of Karlsruhe said. The suspects were accused of exporting a second furnace in July 2008 using a front company in Asia.