The Cyprus Foreign Ministry said Iran objected to last month's decision to send Iranian Saeid Mohabat to the US to face charges of breaching United Nations sanctions against Iran, and that Iran responded by recalling its ambassador on Wednesday "for consultations" in Tehran.
Cyprus acted after one of its courts ruled there was enough evidence to indicate that Mohabat may have "committed serious offenses" and that authorities were therefore obligated to satisfy a US extradition request under international law, the ministry said in a statement.
Government spokesman Christos Stylianides told state broadcaster CyBC that Cyprus hopes the issue will not strain its relations with Iran.
A Justice Ministry official said Mohabat, 45, is accused of trying to ship "military spare parts" to Iran in violation of UN sanctions imposed regarding Tehran's nuclear program.
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The official spoke on condition of anonymity because she is not authorized to speak to the media.
The US, Israel and many Western nations fear Iran's nuclear program is aimed at producing atomic weapons. Iran denies this, insisting that the program is designed for peaceful purposes.
The containers were left piled in a field inside a naval base for 2� years until July 11, 2011, when they exploded, killing 13 people and nearly destroying the country's largest power station.
A public inquiry concluded that Cyprus' government had allowed the matter to linger as it tried to decide what to do with the shipment without upsetting Syria or Iran. The inquiry said then-President Dimitris Christofias was primarily responsible for "inadequacy, negligence and carelessness" that led to the blast.