BLUE LANTERN LEVEL 3: POST-SHIPMENT END-USE CHECK ON

UNCLAS SECTION 01 OF 02 HAMBURG 000047 SIPDIS DEPARTMENT FOR PM/DTCC - BLUE LANTERN COORDINATOR; SIPDIS E.O. 12958: N/A TAGS: KOMC ETTC US GM SUBJECT: BLUE LANTERN LEVEL 3: POST-SHIPMENT END-USE CHECK ON LICENSES 05-1010712, 05-050024284, & 05-050028367 REF: A. A) STATE 53581 ¶B. B) 03 BERLIN 479 ¶C. C) 02 STATE 78812 HAMBURG 00000047 001.2 OF 002 Sensitive but Unclassified. Please protect accordingly. ¶1. (SBU) Summary: ConGen Hamburg Pol/Econ Officer and DHS ICE Officer visited Heinz Henke - Hunting and Shooting Sport Inc. in Werlte, Germany, on May 23 to perform a post-shipment end-use check on licenses 05-1010712, 05-050024284, & 05-050028367 for the export of rifles, rifle parts, pistol parts, triggers, and ammunition to Germany. Officers spoke with Heinz Henke, founder and owner of the company, and general manager Kerstin Blankmann. Both Henke and Blankmann directly answered all of Pol/Econ Off and ICE Off's questions regarding their trade with the U.S., products, customers, licensing, bookkeeping, and security procedures. Officers inspected the facilities and received copies of shipping receipts and sales for the products included in the above listed licenses. End Summary. ¶2. (SBU) Prior to visiting Heinz Henke Inc., post inquired with local law enforcement officials regarding the company's records and reputation. The officials had recorded no derogatory information to date on the company. ¶3. (SBU) On May 23 ConGen Hamburg Pol/Econ Off and DHS ICE Off paid an unannounced visit to Heinz Henke Inc. Officers were welcomed by the company founder/owner Heinz Henke and his general manager Kerstin Blankmann. Heinz Henke Inc. is a shooting/hunting supplies company. The majority of Henke's customers are smaller hunting supply dealers/sports shops. A small amount of their sales come from direct internet orders from individuals. Henke publishes an annual catalogue, which he supplies to his customers. The company's web page is: www.Henke-online.de. Henke explained that he founded the company in 1978 and started trading with the U.S. in 1981, in particular with the U.S. company Leupold. Henke said he was aware of U.S. export regulations and very familiar with U.S. practice in the field. He maintains a regular trade relationship with numerous U.S. hunting supply companies. Both Henke and Blankmann stressed that they undergo all German licensing requirements on a regular basis. They also require that all of their customers provide the appropriate licenses for the products they purchase as well as an EG IDENT number (European tax number). Blankmann showed ConGen Officers originals of the types of licenses their customers must provide. Henke confirmed that the majority of their customers are German, with a few customers in France, Italy, the Netherlands and Portugal. He verified that all of the company's customers were located within the EU. In a follow-up call on May 30, Pol/Econ Specialist reiterated that according to U.S. regulations there are licensing requirements for both exports as well as re-exports. Furthermore, Pol/Econ Specialist pointed out that U.S. regulations on re-exports apply to exports to all countries, whether they are EU member states or not. Blankmann confirmed in writing on June 14 that Henke Inc. is aware of these licensing requirements. She also re-confirmed that Heinz Henke Inc. was not exporting parts or complete weapons to non-EU member states. Blankmann wrote that Heinz Henke Inc. did not intend to re-export any of the articles contained in the three licenses and had not applied for re-export licenses for those products. ¶4. (SBU) Henke Inc. is currently located at Bahnhofstrasse 57 in D-49757 Werlte, a former Telekom building. Henke explained that the company was originally housed in his residence, but due to business expansion and security concerns the business moved to its current location in 1997. Henke bought the building in ¶2006. The entire complex is surrounded by a 7-foot fence topped with barbed-wire and has a burglar alarm system throughout the building. The business currently has 18 employees, although about half are part-time. It maintains a fulltime accountant and a computerized system of stock and sales. Henke explained that all employees who handle weapons undergo a security background check. Stock is stored on the ground floor of the building, with offices on the second floor. Weapons and ammunition are kept in a special gated room with steel reinforcements, which Blankmann pointed out to ConGen Officers. ¶5. (SBU) Henke and Blankmann were able to quickly identify the products received under the three licenses and produced original invoices, customs documentation, shipping bills, and packaging slips for the orders. Henke displayed an in-depth knowledge of his stock and whether it had been sold or was still in the warehouse. ¶6. (SBU) License 05-1010712: Henke confirmed receipt of the HAMBURG 00000047 002.2 OF 002 pistol and rifle frames contender, barrels and cases. He stated that this was the first time he had ordered these items, as this particular design was new on the market and that he had a personal interest in this type of weapon. Henke told Officers that these particular items were at his home for testing and he offered to retrieve them for Officers to view personally. He verified that none of the items under this license had been sold. ¶7. (SBU) License 05-050028367: Henke also confirmed receipt of these rifles from Savage Arms. He stated that Savage Arms had sent the items to Henke for display at the International Weapons Exposition (IWA) this past March in Nuremburg. According to Henke, Savage Arms would like Henke to become its German distributor. Henke verified that none of these items had been sold and were all in storage in their warehouse. ¶8. (SBU) License 05-050024284: Henke confirmed receipt of the replacement triggers from Shilen Rifles and stated that his company regularly receives shipments from Shilen. Henke stated that under German law customers are not required to show special licensing in order to purchase triggers. He stated that some of the triggers from this shipment were still in the warehouse and procured one of them for ConGen Officers. Blankmann provided ConGen Officers with documentation for the sale of some of the triggers to customers. She also explained and documented that 17 of the triggers were being used for custom-designed rifles that Henke Inc. produces and sells through its catalogue. ¶9. (U) Henke and Blankmann were very cooperative with ConGen Officers and appeared pleased to have Officers visit their facilities. Henke stated that the May 23 visit was the first time he had been contacted by USG representatives. Henke not only trades regularly with U.S. companies, he said, but also travels to the U.S. at least once annually to attend trade shows and meet with trading partners. He said that he had just returned from Florida, where he had visited this year's Shot Show in Orlando. ¶10. (U) This message has been coordinated with Embassy Berlin. BUTCHER