In coordinated searches, three of the navigation systems as well as company papers and other documents were confiscated from 10 buildings in the states of North Rhine-Westphalia, Baden-Wuerttemberg and Bavaria.
A customs agency official, speaking on condition of anonymity because he was not authorized to comment on the matter, said the searches were carried out Tuesday and that the people arrested were being held on suspicion of violating German export laws.
Customs investigators said an Iranian businessman and his son worked in conjunction with an engineer from Baden-Wuerttemberg to procure the navigation instruments that were believed to be needed for Iranian drone airplanes.
The Iranian businessman also is accused of attempting to procure 30 Czech combat aircraft to supply to the Iranian air force.
The official said he could not confirm whether three of the four people arrested were the two Iranians and the engineer.
The office released no names, and said a fifth person was being sought but could not be apprehended because he was out of the country.
No court date has been set.