BLUE LATERN LEVEL 3: PRE-LICENSE END-USE CHECK ON

UNCLAS BANGKOK 003045

SIPDIS

DEPARTMENT FOR PM/DTCC (JSTITZIEL)

E.O. 12958: N/A
TAGS: ETTC KOMC TH BLUE LANTERN
SUBJECT: BLUE LATERN LEVEL 3: PRE-LICENSE END-USE CHECK ON
APPLICATION 05-955010

REF: STATE 68288


1. Pol FSN made inquiries to establish the bona fides of
Olympic Arm & Ammunition Co. as requested in reftel.
According to the Department of Business Development of the
Thai Commerce Ministry, Olympic Arm and Ammunition (Thailand)
Co., Ltd. has a three person executive committee made up of
Mr. Charan Chawala, Mr. Witsanu Chamala and Mr. Anuchit
Kanphakdi, all Thai nationals. The company changed its name
from "the Golden Arm Co., Ltd" on August 17, 1999. It is
capitalized at 32 million baht (aprox. 820,000 USD).


2. An inquiry with Col Chanachit Charoen-nuang of the
Defense Permanent Secretary Office, Ministry of Defense,
confirmed that the company is recognized under Thai law and
has valid permits to operate factories to manufacture
ammunition in Thailand. The company also is permitted to
manufacture Austrian Glock and Italian Beretta automatic
pistols under license. Thai clients of the company include
the Royal Thai Army, National Police, and state-owned firing
ranges nation-wide. The Ministry of Defense has two military
officials (one officer and one NCO) posted at the factory
around the clock to monitor production.


3. According to Colonel Phunsi Ratsami, Director of the
Industry Control Division of the Royal Thai Defense Industry
Department -- the Thai government agency tasked with
overseeing defense contractors -- Olympic is certified under
Thai law to manufacture 9 mm, .38 cal., and .45 cal
ammunition.


4. Pol FSN visited Olympic's manufacturing facility in
Nakhon Sawan, approximately 240 kilometers north of Bangkok,
on May 3. He noted it was in a controlled access location
and had unarmed civilian guards checking all vehicles and
persons trying to enter the compound. While there, he met
with Mr. Charan Chawla, Managing Director of the Company, who
explained his company's former relationship with the Greek
firm, Olympic Arms and Ammunition, Co., Ltd (same name as the
Thai firm).


5. According to Mr. Charan, in 1999, he approached Mr.Vasili
Papadupolos, the Greek National Owner of Greece's Olympic
Arms and Ammunition Co., Ltd, through Charon's company
"Golden Arm Co., Ltd," and invited Papadupolos to buy shares
in his Thai company in exchange for Papadupolos's technology
and ammunition manufacturing know-how. Papadupolos agreed,
and promised to buy 615,000 out of 1,250,000 shares in
Charan's company. Charan agreed to change the name of the
Thai company to Olympic Arm and Ammunition (Thailand) Co.,
Ltd. Charan said this agreement was oral only. After Charan
changed his company's name, Papadupolos changed his mind and
decided not to pay for his shares in the new venture. Charan
had already changed his company's name and decided to remain
in business as Olympic. Charan claims that Papadupolos still
technically holds one token share in his company. He
suggested that it would be too cumbersome under Thai law to
remove Papadupolos's small stake in Olympic Thailand. Since
Papadupolos's withdrawal from the venture, Charon claimed to
have never been in contact with the Greek again. Charan
recently learned of Papadupolos's arrest in Italy. Plans to
change the name of the company are underway and are expected
to be completed by June this year.


6. Pol FSN learned that Olympic Thailand has no foreign
subsidiaries and that all of its 50 plus employees are Thai
nationals. Employees must undergo fingerprint checks each
day to verify their identity. The production line operates
from 0800-1700 on weekdays. In addition to the contracts
mentioned in para 2 above, the Thai Department of Special
Investigation of the Ministry of Justice and the Narcotics
Control Board of the Prime Minister's office have recently
approached Olympic about possible contracts. The company is
not allowed to sell its products in the private sector except
at one facility in Pattaya Thailand. Bullets produced by the
company are marketed to firing ranges under the "Hunter"
brand name and to state agencies under the "Olympic" label.
Charan told our FSN that he has been a weapons dealer for 30
years and is also Managing Director of the Royal Defence Co.,
Ltd. He stated that he has had previous business relations
with Lockheed Martin and US ATK Corporations. The compound
where Olympic is located also has a factory making Glock
pistols under license, owned by Kamonrat Commercial Co., Ltd,
of which Charan is President.


7. Sales records are maintained electronically and in hard
copy. Pol FSN took digital photos of the facility. Those
photos can be sent to the Department upon request. Please
send requests to Embassy PolMil Officer Mark Lambert.
BOYCE