BLUE LANTERN END-USE CHECK LICENSE 05-972668

UNCLAS SAN JOSE 001569 SIPDIS SIPDIS DEPARTMENT FOR PM/DTCC - BLUE LANTERN COORDINATOR E.O. 12958: N/A TAGS: ETTC KOMC CS SUBJECT: BLUE LANTERN END-USE CHECK LICENSE 05-972668 REF: A. STATE 46427 ¶B. COPLEY/STITZIEL FAX 5/17/2006 ¶1. PolOffs visited Marco Aguilar, President of Koruma Lenex Seguridad, S.A. on July 10. Confirming the information sent ref B, Aguilar readily admitted that all 20 Marlin rifles purchased under the license in question had been sold directly to Armeria Rex. Aguilar added that he had requested another shipment of .22 caliber Marlin rifles on behalf of Armeria Rex. Aguilar claimed he was unaware of any reason he could not sell imported U.S. weapons to a fellow Costa Rican arms dealer. Aguilar said that the owners of Armeria Rex were becoming desperate and had requested his help in obtaining very specific models and quantities of rifles. Aguilar produced copies of the request he filed with the General Directorate for Arms and Explosives (GDAE) to import these weapons which declared they were for resale at the wholesale and/or retail level. Aguilar also produced the export request filed by Valor Corporation with the State Department which declares the purpose of the transaction is for "resale to consumers in Costa Rica." ¶2. Koruma Lenex does not appear to be selling ammunition to Armeria Rex. Questioned about the unusually large quantity of ammunition recently imported, Aguilar stated that it was a single transaction for the Ministry of Public Security. With some effort (records at Koruma Lenex are stored haphazardly in boxes in a closet) Aguilar was able to produce a file related to the transaction which included a receipt from then GDAE Director Erik Karolicki. The transaction consisted of 800,000 rounds of 9 mm ammunition and 600,000 rounds of .38 caliber ammunition. ¶3. Koruma Lenex is not a traditional arms dealer in that it does not sell weapons to the general public even though it has all the necessary permits to do so. Weapons sales are a side business conducted by lots purchased in advance by the Costa Rican government (GOCR),security companies, and Armeria Rex. Koruma Lenex's primary business remains the sale of uniforms, protective wear, and other safety equipment. The business has grown significantly since our last visit in October of 2004. A recent purchase of gas masks from the U.S. for the national bank was lucrative according to Aguilar. Also growing rapidly is the demand from security firms for cheap shotguns which Aguilar is importing from Turkey. The business has outgrown its current facility and will soon have to move to a larger one. Security arrangements which seemed adequate when handguns were occasionally stored on the premises have not been upgraded and are not sufficient for the number of shotguns (at least 300) that Aguilar intends to sell before moving to a new facility. Per question reftel, Aguilar never took possession of the 20 Marlin rifles, they were delivered directly from the customs clearance warehouse to Armeria Rex. ¶3. Aguilar denies attempting to circumvent U.S. export controls and suggested that the GDAE should change the format of its import license paperwork which currently allows only two categories: importation for the GOCR or for commercial resale. The commercial resale category is overly broad and most dealers automatically use it, even when they are vying for government contracts, because this category has fewer documentary requirements. Aguilar also stated that the U.S. exporter, Valor Corporation, has frequently advised Costa Rican dealers to reduce the quantities of arms requested and to use the "for resale to consumers in Costa Rica" declaration as the least restrictive and most probable way to obtain an export permit from the State Department. ¶4. In Post's assessment, Koruma Lenex is a reliable recipient of US weapons if and when it is purchasing those weapons on behalf of the GOCR. Since Koruma Lenex only sells weapons by lots, Aguilar has offered to document to our satisfaction the end user of every lot of weapons he imports from the U.S. Post believes we can rapidly and independently verify any GOCR weapons contracts Koruma Lenex may claim. FRISBIE