POTENTIAL IMPACT OF A REDUCTION OF EGYPT'S FMF

UNCLAS CAIRO 003128 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PREL MASS MOPS EG SUBJECT: POTENTIAL IMPACT OF A REDUCTION OF EGYPT'S FMF Sensitive but unclassified. Please protect accordingly. ¶1. (U) This is an action request. Please see paragraph two. ¶2. (U) During a recent meeting with Office of Military Cooperation-Egypt Chief MG Byron Bagby, Congressman Kolbe requested an outline of the potential impact of a reduction or reprogramming of Egypt's Foreign Military Financing. Post requests Department assistance with transmitting the points below (responding to the Congressman's question) to Mr. Kolbe's office. ¶3. (SBU) The potential impact of a reduction of FMF may include: -- Reduced intelligence sharing. -- Reduced political cooperation, including on regional issues such as Israel-Palestine and Sudan and in multilateral fora such as the UN and IAEA. -- Imposition of security surcharge of 55K Euro/$71K per vessel for each Suez Canal transit. The GOE currently waives the security surcharge for U.S. Navy vessels. The GOE waived $10.9 million in such fees in 2005. -- Loss of GOE expediting for U.S. Navy vessels in the Suez Canal. The potential increased time vessels may spend waiting to transit the canal could increase vessels' security vulnerability and operating costs. -- Reduced access to senior military and political officials. -- Strict adherence to required notice periods for overflight and Suez Canal transit permissions with a potential impact on OIF/OEF. The GOE does not currently enforce the notice periods for vessels or aircraft (30 days notice for nuclear vessel Canal transits; seven days notice for regular vessels; 21 days notice for special aircraft). -- Reduced cooperation in efforts to develop the Egyptian military's consequence management capabilities. Military exercise BRIGHT STAR for 2007 is currently scheduled to include consequence management exercises. -- Termination of Foreign Military Sales cases (depending on the size of the reduction) with an impact on the U.S. defense industry. Cases that could be impacted include: ¶1. Three Fast Missile Craft for $526M -- VT Halter, Lockheed Martin, Northrup Grumman ¶2. 500 High Mobility Multi-Wheeled Vehicle (HMMWV) for $105M -- AM General Manufacturer ¶3. Six Patrol Boats for $46M -- SwiftShips ¶4. 164 M109A5 155mm self-propelled Howitzers for $167M -- BAE Corp. refurbishment program ¶5. 25 Avenger Air Defense Missile Systems for $110M -- Boeing, Northrup Grumman, Raytheon RICCIARDONE