The defendant, identified by the court as 63-year-old Hans-Joseph H., is suspected of supplying Iran with 16 tonnes of high-grade graphite via Turkey between 2005 and 2007.

"He denies the charges," a spokesman for the Koblenz higher regional court said.

Investigators say the accused, who has been charged with 12 violations of foreign export laws, reported the material as being low-grade graphite to dupe customs inspectors.

Exporting high-grade graphite to Iran is banned under German law because it can be used as a casing for weapons-grade uranium in warheads.

The defendant is also believed to have attempted with a Turkish business partner to ship another 10 tonnes of high-grade graphite to a recipient on a blacklist under the Iranian trade embargo.

Turkish authorities, however, intercepted two deliveries to the company in question -- in May and November 2007.

The accused has been in investigative custody since June 2008.

Germany has traditionally been one of Iran's biggest trading partners. Exports to Iran grew by 10.5 percent in the first 11 months of 2008 to reach 3.6 billion euros (4.8 billion dollars), according to official statistics.

The German government in January announced it would drastically cut its export guarantees for companies trading with Iran in a bid to ratchet up the pressure on Tehran over its nuclear programme.

The move came amid increased criticism, notably from the United States and Israel, over Germany's growing trade with Iran.

Germany is one of six countries working together in a bid to persuade Iran to abandon its nuclear ambitions.

Western powers believe Iran is seeking a nuclear weapon but Tehran insists the programme is for civilian use only.