SPAIN: PM/DTTC COUNTRY BRIEFING ON THE BLUE

UNCLAS MADRID 000625

SIPDIS

SENSITIVE

FOR EUR/WE AND PM/DTTC

E.O. 12958: N/A
TAGS: PREL KOMC ETTC SP
SUBJECT: SPAIN: PM/DTTC COUNTRY BRIEFING ON THE BLUE
LANTERN PROGRAM


1. (SBU) Summary: A team from the Directorate of Defense
Trade Controls (PM/DTTC) provided a background briefing
February 10 on the Blue Lantern Program to an official from
the Spanish Ministry of Defense's (MOD) Technology Transfers
and Transactions Unit and mission's Commercial Service Office
(USCS) and the Office of Defense Cooperation (ODC). The
Spanish representative said the MOD was willing to continue
close cooperation on the Blue Lantern Program. Overall, the
briefing underscored the USG's interest in working with the
Spanish MOD to help disrupt international gray arms trade
networks through closer cooperation on the Blue Lantern
program. End Summary.


2. (SBU) PM/DTTC office experts Peter Maxwell and C. Edward
Peartree briefed Spanish Army Captain Juan Martinez Martinez
of the MOD'S Technology Transfer and Transactions Unit, along
with poloffs and officers from the ODC and the USCS on the
Blue Lantern program. The briefing covered DTTC's structure
and legal authority; the goals, methods, and outcomes of the
Blue Lantern Program; and the nature of the gray arms market.
The team noted that only 9% of the 93 unfavorable Blue
Lantern cases reported in FY 2004 involved European end
users, and 33% of them involved European intermediary
companies.


3. (SBU) In response to DTTC's presentation, Martinez said
that the MOD was interested in continuing its close
cooperation with the U.S. on the Blue Lantern program. The
MOD used several end-user licensing mechanisms to stop gray
arms transfers through Spain. He noted that all valid
end-user licenses are approved by the director general of the
MOD's Office of Armament and Material and substitute a
Spanish certificate for Section 8 Certification of Foreign
Government on the DSP-83 Nontransfer and Use Certificate
form. Spanish end-user licenses are valid for six months and
require end-users report the delivery the defense items
listed on their licenses within one month of their arrival in
country. Martinez said the Spanish Congress recently
approved legislation requiring the Spanish Customs Service to
report to the MOD all commercial transfers of military items
to Spain. Martinez also said the Technology Transfer and
Transactions Unit also employs a quality assurance inspector
to verify end-users' bona fides.


4. (SBU) Comment: The DTTC presentation broadened the
Spanish Ministry of Defense's and mission's understanding of
the goals, methods, and results of the Blue Lantern program.
Most importantly for the Spanish, it made clear that Blue
Lantern program is not an enforcement exercise but rather a
collaborative process based on mutual trust between the U.S.
and Spain. We expect continued strong cooperation from the
MOD in our efforts to disrupt the diversion of U.S. defense
materials to gray arms networks through fraudulent arms
dealers in Spain.
MANZANARES