BLUE LANTERN LEVEL 3: PRE-LICENSE END-USE CHECK

UNCLAS SECTION 01 OF 03 BANGKOK 000602

SIPDIS

SIPDIS

PM/DTCC FOR JSTITZIEL

E.O. 12958: N/A
TAGS: ETTC KOMC TH BLUE LANTERN
SUBJECT: BLUE LANTERN LEVEL 3: PRE-LICENSE END-USE CHECK
ON APPLICATION 05-985147

REF: SECSTATE 2096


1. Per reftel request, POL FSN made inquiries into the bona
fides of Siphya Arms Limited Partnership and Bureau of
Territorial Defense Volunteers Administration. Results
follow.

SIPIHYA ARMS LIMITED PARTNERSHIP


2. According to the official website for the Thai Department
of Business Development, Ministry of Commerce, which
supervises business establishments and registration, the
Siphya Arms Ltd, Part. is registered under Registration No.

0103501003543. Registered Date: 30 July 1958.

Capital Registration: 3,700,000 Baht

Business Partners:

1. Mrs. Somdet Detdamrong -- investment of 1,550,000 Baht

2. Mr. Ditsathat Detdamrong -- investment of 1,600,000 Baht

3. Mr. Surachai Tangthawon -- investment of 50,000 Baht

4. Mr. Piyarat Detdamrong -- investment of 500,000 Baht

Manager of the business is Mr. Ditsathat Detdamrong.
Address: 27 Burapha Road, Wang Burapha Phirom Sub-District,
Phra Nakhon District, Bangkok.
The business has submitted annual financial reports for 1999,
2000, 2001, 2003, and 2004.
Purpose of Company: To import and sell guns and ammunition.

According to the Telephone Directory Center, Siphya Arms
Ltd., Part. is listed in 4 different locations as the
following addresses and telephone numbers:
27 Burapha Road, Wang Burapha Phirom Sub-District, Phra
Nakhon District, Bangkok, Tel.02-224-0824,02-224-4616
29 Burapha Road, Wang Burapha Phirom Sub-District, Phra
Nakhon District, Bangkok, Tel. 02-222-6777
68 - 70 Burapha Road, Wang Burapha Phirom Sub-District, Phra
Nakhon District, Bangkok, Tel. 02-622-3588-9
73 Burapha Road, Wang Burapha Phirom Sub-District, Phra
Nakhon District, Bangkok, Tel. 02-222-6767

POL FSN made an unannounced visit to Siphya Arms Ltd., Part.
on January 18, 2006. The shop at No. 27, which also connects
to the shop No. 29, is located in a 4-story concrete
building. The first floor serves as the show room. It is
located in a part of Bangkok where many similar businesses
can be found.

FSN met Ms. Chanitsara Sawatdi, the shopkeeper, who answered
all queries and presented the related documents willingly.
The Manager, Mr. Ditsathat, was not in.

On January 19, FSN met Mr. Ditsathat at another office. He
eagerly answered all inquiries.

Ditsathat's answers to reftel questions are:


Q. How long has Siphya Arms Limited Partnership been in
business and who are its principals?

A. Siphya Arms has been in business since 1958. He confirmed
the accuracy and legitimacy of the company,s business
registration that FSN obtained from Ministry of Commerce as
stated above. All business partners are family-related and
Thai nationals. Siphaya Arms also runs seven other gun shops.



Q. Who are its typical customers and where are they located?

A. Siphya Arms, typical customers are either members of the
general public or government officials--both civilians and
Armed Force officers, living nationwide, with proper permits
issued by the Ministry of Interior.

(Background. Members of the general public living in Bangkok
must submit an application to the General Registration
Division of the Department of Provincial Administration,
Ministry of Interior, for a gun purchase permit. The MOI then
examines the applicant's qualifications to determine whether
to permit him to buy a gun. Once approved, the customer must
bring the to a gun shop to buy a firearm. Customers living
upcountry must submit the application through the District
Chief (the MOI,s representative),who will examine the case,
consider the request, and issue the permit. For government
officials, in addition to beside the above process, they must
additionally obtain the approval of their superiors. Siphya
Arms officials were well versed in Thai law about weapons
sales and assured FSN that they only sell weapons to those
meeting the MOI,s qualifications and who possess an MOI
permit. End Background.)

Siphya Arms also sells guns to the UN security guard force in
Bangkok as permitted by the government.

Q. Does the company have an established, legitimate customer
base?


A. Yes. The company has legitimate customers -- both
civilians and members of the Armed Forces. The customer data
base, as well as sales records and contracts, are maintained
both at the company and at the MOI,s General Registration
Division.

At the company, they are in paper form, not computerized. Ms.
Chanitsara showed FSN the logbooks/records. Mr. Ditsathat is
currently working to put the customer base and records into
the computer system, starting from the list of Armed Forces
personnel buying guns from his company. He provided a
printout of that list.

Ditsathat said that paper documents are normally be kept for
5 years.


Q. Does the company have adequate on-site security?

A. Generally, yes. The company is located in a 4-story
building. After hours, all guns are stored in a safe -- a
small concrete, windowless, room with a large iron gate and
numeric combination lock. There is no security guard, CCTV,
or iron bars on the show-window.

For the contracted 523 pistols mentioned in reftel, they will
be transported into Thailand by a commercial airplane, and
then stored at the Customs House at Bangkok International
Airport for tax clearance and inspection by the Customs
Department, Bureau of Territorial Defense Volunteers
Administration, Siphya Arms, and the shipping agency.

After that, Bureau of Territorial Defense Volunteers
Administration and Siphya Arms will together take them out
and transport them on a private agency,s truck to the
warehouse inside the Bureau,s compound.

The guns will then be re-examined, closely inspected, tested,
and signed off upon delivery by the Bureau, Siphya Arms, and
the General Registration Division. Then, the GRD will
register and mark the guns into its system, and the guns will
be stored in the Bureau,s warehouse. These guns will not be
stored at the company at all.


Q. Does the company keep proper, detailed records of its
sales and customers?


A. Yes, as described above.


Q. Does the company understand the restrictions of USML
articles, particularly regarding re-exporting?


A. Both Ms. Chanitsara--the shop custodian and Mr.
Ditsathat--the Manager and Owner firmly stated that they well
understand the USML articles.

Mr. Ditsathat presented copies of various documents mentioned
in reftel, namely the Siphya Arms,s BUSA001/05; Form DSP-83,
dated October 28, 2005; Gun Import Permit, No. 749/48, dated
October 20, 2005, to expire October 19, 2006, numbering 523
pieces, and he Gun Purchase Contracts between Siphya Arms and
Bureau of Territorial Defense Volunteers Administration; all
details match those stated in the cable.

BUREAU OF TERRITORIAL DEFENSE VOLUNTEERS ADMINISTRATION

POL FSN confirmed that the Bureau is a state agency under the
Department of Provincial Administration, Ministry of
Interior, of the Government of Thailand. It is located on
Phaholyothin Road, Phaya Thai District, Bangkok, next to the
Border Patrol Police General Headquarters.

During an unannounced visit to the Bureau on January 18, POL
FSN met Mr. Chatpong Chatphoem--Director of Bureau of
Territorial Defense Volunteers Administration, who ordered an
immediate small meeting with the officials in charge of the
contract. The meeting included Mr. Charan Khayan--Director of
Personnel and Logistics Division, and Mr. Somchai--Chief of
Welfare Section of the Bureau. They cooperated fully with our
inquiries.

Below is the list of questions raised by the cable and the
answers:


Q. Did the Bureau order all 523 semi-automatic pistols
listed on the license application?

A. Yes. They confirmed the purchase and the Bureau,s
purchase contracts with Siphya Arms. There are two signed
contracts. The first is No. 1/48, dated February 22, 2005,
ordering 326 Beretta pistols and the second is No. 2/48, also
dated February 22, 2005, ordering another 197 Beretta pistols
(together, 523 pieces).

Persons allowed to buy these guns are the government
officials and state employees. They have been approved to buy
guns by their superiors, have met the MOI,s requirement and
qualifications, and been granted the MOI,s gun purchase
permits.

The first contract is solely for the employees of the State
Railway of Thailand working in the troublesome, violent-hit,
southernmost region of Thailand whereas the second contract
is mostly for the MOI,s officials and other officials, such
as state teachers, police, soldiers, village heads,
sub-district heads, District Officers, medical service
employees, and the Bureau,s territorial defense volunteers,
working in the same area. They have already paid the down
payment of 10% at the time of order their pistols, and they
have to pay the rest on the day they receive their guns.


Q. Does the Bureau have a legitimate need for all of the
pistols?

A. Yes. This lot of guns is approved because of the
worsening situation in the southernmost region of Thailand.
They will be imported and distributed to state employees and
government officials who are working in the trouble-hit deep
south as the personal guns to protect their lives, public
safety, and state properties from the insurgency/separatist
movement.


Q. Does the Bureau have adequate plans and resources to
track and secure the weapons?

A. Yes. The pistols will be recorded and issued to the
contracted buyers, who are government officials/state
employees and hold Thai nationality. These guns will and
always belong to the purchasers only. MOI will stamp in their
gun registration and possession permits that the guns cannot
be resold, or transferred, or exchanged, except as the
inheritable item. The District Office at the locality will
be tasked to monitor and track the weapons. These guns will
only be carried while the officials are on duty or in the
violent-prone area.

Director Charan and Chief Somchai showed POL FSN the
Bureau,s gun storage room, where this lot of pistols will be
stored. It is a large room with two connecting small rooms
inside (about 6 meters long by 3 meters wide by 3 meters high
each),locating on the first floor of a 3-story concrete
building. FSN observed two guards in front of the storage
room. It requires keys used by two other officials to open
the storage room,s door. Each door opening is recorded in a
logbook. The door is wooden with two sets of padlocks covered
by sealing wax. There is no CCTV inside the room. There are
no fire or smoke alarms inside the room, but there are fire
extinguishers nearby.

Inside the storage facility, FSN observed hundreds of pistols
and revolvers well kept in cases.

Director Charan and Chief Somchai stated that there are
always four guards and one supervisor posted at the Bureau,s
compound at all time. They are unarmed by day but armed at
night.


Q. Does the Bureau understand the restrictions of USML
articles, particularly regarding re-exporting?

A. Yes.

They presented the related documents described in reftel.
The documents conform with those Mr. Ditsathat provided.
They confirm the import procedure, route of gun
transportation, and purchase procedure as stated above by Mr.
Ditsathat.


BOYCE