BULGARIAN DEFENSE EQUIPMENT SALES TO IRAQ AND

S E C R E T SOFIA 000283

SIPDIS


NOFORN

STATE FOR PM

E.O. 12958: DECL: 02/09/15
TAGS: PARM PREL PGOV ETTC IZ AF BU
SUBJECT: BULGARIAN DEFENSE EQUIPMENT SALES TO IRAQ AND
AFGHANISTAN

REF: 04 STATE 267024

(U) CLASSIFIED BY AMBASSADOR JAMES PARDEW, FOR REASONS
1.4 (B) AND (D).


1. (S/NF) SUMMARY: We continue to support procurement of
military equipment for the security forces in Iraq and
Afghanistan as a major USG priority, but aspects of this
process at the local level have raised concerns about
potential weapons diversion. Embassy has encountered at
least one case where an identical End User Certificate
(EUC) for weapons procurement for Iraqi Police Forces was
presented both to the export control authorities in
Belgrade and Sofia. Post's concern is that the EUC for
weapons purchased for legitimate end users could be used to
buy a duplicate set of weapons that could be diverted to
the grey market. Post is also concerned about the number
of contractors and subcontractors, some with shady
connections. END SUMMARY


2. (S/NF) Post received a copy of an EUC from the Bulgarian
Interministerial Commission for Export Controls dated 22
Sept 2004 from the Project and Contracting Office in
Baghdad. The GOB Commission asked Post to confirm the
validity of the EUC (see reftel). However, we discovered
later that an identical EUC had been presented to the
Serbian export authorities. The U.S. contractor involved,
Nico Trap Inc. D/B/A Golden Wings, and its local Bulgarian
subcontractor, Trem Engineering, were eventually declined
an export permit from the GOB in December, but the Golden
Wings' Serbian subcontractor was approved in Belgrade in
December. In spite of the Serbian approval for the export
of these weapons, Golden Wings president Tahsin Ammouri was
requesting the GOB reverse their decision as late as 4
January.


3. (S/NF) In addition, the Bulgarian Intelligence Services
have shared their concern with Post about the complexity of
some weapon deals going to Iraq and Afghanistan, which
often involve an American contractor, a Bulgarian broker, a
Bulgarian defense manufacturer and often other
international brokers and manufacturers. Bulgarian
intelligence officials assert these complex deals reduce
their ability to track the weapons effectively as they make
their way out of Bulgaria and onward to Iraq or
Afghanistan. GOB officials continue to inquire why such
deals cannot be done on a government-to-government basis.
Such a basis would allow the GOB to gain some political
benefits from these deals, which provide jobs to a hard-hit
sector of the Bulgarian economy, and show the Bulgarian
public the benefits of the country's military commitment in
Iraq and Afghanistan.


4. (S/NF) Post is also concerned that U.S. contractors have
chosen to work with local subcontractors who have
historically been involved in grey arms deals. For example,
Delta-G, a Bulgarian broker for General Dynamics, was a
major smuggler of arms to the Milosevic regime during the
Yugoslav wars and reportedly is still involved illegal
activities. Post has warned General Dynamics repeatedly
about this relationship.


5. (S/NF) COMMENT: Many of the arms procurement
transactions for Iraq are multinational, with parts and
weapons coming from various countries. These deals are
brokered through U.S. contractors and their local sub-
contractors, making oversight more difficult for individual
missions to grasp the entire picture. We have pursued
requests from the GOB to confirm EUCs coming from U.S.
Forces in Iraq with all due diligence, but we wish to raise
concerns about the oversight of these often complex
multinational transactions.


6. (U) Baghdad minimize considered.