BLUE LANTERN 05-050019429, 05-1011934, 05-050035641

UNCLAS ABU DHABI 001937

SIPDIS

SIPDIS

DEPARTMENT FOR PM/DTCC - BLUE LANTERN COORDINATOR AND
EEB/CBA

E.O. 12958: N/A
TAGS: ETTC ETRD ECON KOMC AE
SUBJECT: BLUE LANTERN 05-050019429, 05-1011934, 05-050035641

REF: A. STATE 150178

B. ABU DHABI 1690


1. On November 20, Econchief met with Dr. Mohammed Al-Nazer,
Managing Director of Bin Mahmoud Representing Companies at
his office in Golden Tower in Abu Dhabi. The company is part
of the Bin Mahmoud group founded by Ibrahim Al-Mahmoud, a UAE
national and retired Ministry of Interior (Abu Dhabi Police)
Brigadier General. Al-Nazer has been with the company since
its founding in 1988. He followed Al-Mahmoud from the
Ministry of Interior as a founding member of the company.
The UAE military and the UAE Ministry of Interior are Bin
Mahmoud's major customers.


2. Al-Nazer confirmed that all three shipments, noted ref a,
were forwarded to the UAE and gave Econchief copies of
delivery notes signed and stamped by the UAE armed forces.
He stated that the company had committed to providing the UAE
with the part in the first license (05-050019429) by February
7, 2007 but was not able to make delivery until April 24, due
to delays in shipments from the U.S. supplier. Bin Mahmoud
paid a 10 percent penalty for late delivery. License number
2 was delivered on March 7, 2007, and license number 3 was
delivered on time on August 7, 2007.


3. Al-Nazer explained that the company rarely stored items
although it did have a warehouse facility. It received goods
from the shipper, inspected them, and delivered them to the
UAE military within a couple of days. He showed Econchief
the room where the company inspected the smaller goods.
Al-Nazer also stated that the company fully understood U.S.
restrictions on the unauthorized re-export of USML items.


4. He then segued into a discussion about the problems his
company was having with some U.S. companies that supplied
defective goods and refused to accept them back. He
explained that he had a case of 370 electron tubes for a
radar from the U.S. firm Richardson (NFI). Richardson's
agent in Dubai had instructed him to order directly from the
U.S. firm. When the tubes proved defective, Richardson
allegedly refused to replace them. Bin Mahmoud sued the
UAE-based agent, but lost the case because the contract was
directly with the U.S. company. He showed Econchief the
tubes and asked, rhetorically, "what will I do with them?" as
he cannot resell them outside the UAE.


4. Al-Nazer also brought Econchief's attention to problems
the company was having with another U.S. company "SOI
Aviation." Bin Mahmoud had ordered items from SOI Aviation
worth over USD 100,000. According to Al-Nazer, the part
number marked on the box were different than the part numbers
actually provided. There was a document discrepancy and the
UAE military rejected the items. Al-Nazer showed Econchief
copies of his correspondence with SOI trying to resolve the
matter and vowed never to do business with the company again.
He asked whether there was anything the USG could do "to
defend the reputation" of U.S. companies from this sort of
behavior. (Note: This is the second time that a UAE-based
company has raised SOI with Econchief (ref b). End Note.)


5. Post recommends that this be viewed as a favorable end use
check
SISON