ON-SITE VISIT TO INTERGULF/EMPOL LTD, SHARJAH, UAE

UNCLAS ABU DHABI 000607

SIPDIS

SECSTATE FOR NEA/ENA
AMCONSUL DUBAI FOR PCO JOHN LANCIA
USDOC FOR 3131 ITA/OIO/ANESA
USDOC FOR 532 BIS/OEE FOR WAFO/JBANKINS
USDOC FOR 532 BIS/OEE FOR INTELL DIV

E.O. 12958:N/A
TAGS: ETTC TC
SUBJECT: ON-SITE VISIT TO INTERGULF/EMPOL LTD, SHARJAH, UAE


1. On January 28, 2003, Commercial Officer Mary O'Brien met
with Srinivasan Kartikeya and Adeeb Yawar of Intergulf,
Ltd., Sharjah, UAE, regarding the shipment of a single
spindle gun drill. Intergulf had previously reported to
Comoff O'Brien that this shipment had been stopped in the
U.S. at the request of U.S. authorities, i.e., the Office of
Export Enforcement (OEE).


2. Intergulf's premises are located on the premises of Port
Khalid in Sharjah. A Gate Pass authorized by Intergulf (and
5 AED, or 1.35 USD) was required for Comoff to enter the
port. Intergulf is a subsidiary of IFFCO, a UAE company
established in 1975 and heavily involved in food processing
and packaging, personal care and cleaning products,
industrial products and logistical services. Intergulf
occupies two large buildings on the port. Intergulf itself
has three divisions, two for the production of PET plastic
containers and PVC for industrial use and a third for
logistics and shipping.


3. At the port and in a very clean and modern facility,
Intergulf/Empol manufactures plastic forms for liquid
containers. These forms resemble large test tubes and are
later blown out to form plastic water bottles, soft drink
bottles and bottles for vegetable oils. During this
process, molten plastic is molded around hollow metal tubes
that are filled with chilled water to speed the cooling and
forming process. One line has tubes that are about the size
and shape of a hair curling iron. The molding machines are
initially supplied with molds, but in the course of the
manufacturing process, they may break or become damaged. If
this occurs, Mr. Yawar said Intergulf/Empol has a machining
shop where they can make new molds or repair damaged ones.
Comoff viewed the machine shop where molds are made from
solid steel rods, using CNC machine tools (2- and 3-axis).
The molds must be hollowed out to accommodate the water for
cooling. Mr. Yawar explained that this is why the gun drill
is required, specifically to hollow out rods that are
approximately 1 to 1 1/2" in diameter. During the visit to
the machine shop Comoff saw other molds that had been
hollowed out and Mr. Kartikeya said the machines they
currently use are not suitable for the smaller molds.


4. Comoff O'Brien explained to Mssrs. Yawar and Kartikeya
that an export license was required and since none of the
U.S. parties were willing to apply for the license,
Intergulf's only other recourse would be to retain a party
in the U.S. to apply for the license on behalf of Intergulf.
They explained that the seller had agreed to refund the
money to Intergulf and they might have to agree to that if
they could find no one who would apply for the license for
them. Comoff O'Brien also explained that in the event of
future such purchases, Intergulf might want to clarify with
their supplier who would have the responsibility for getting
any needed export license before payment is made. Mssrs.
Yawar and Kartikeya agreed to the conduct of a post-shipment
verification if the export of this or any similar machine is
authorized by an export license.


5. Comment: While Intergulf/Empol is a legitimate company
with a legitimate, if perhaps occasional, need for metal
drilling and boring machinery, Comoff has no way of knowing
whether the machine in question would be appropriate for
such an end use. In addition, Intergulf's logistics and
shipping activities at its portside location could make it
easy for such an item to be shipped from the UAE to another
destination.


6. On February 3, Comoff O'Brien received a telephone call
from Carolyn Stern of Direct Container Line (DCL). DCL was
the non-vessel owner common carrier originally contracted to
ship the machine. Ms. Stern said she had received an email
from her agent in the UAE stating the US Embassy had
approved this export using `DCL's export license'. Comoff
emphasized that no such approval had been given and
reiterated that only the Office of Export Enforcement could
release the shipment. Ms. Stern stated the machine is not
in her custody and is still at the premises of the exporter
in Cincinnati.


7. Please advise if BIS/OEE requires any additional
information regarding Intergulf.

WILLIAMS