BLUE LANTERN: UPDATE ON POSSIBLE TRANSFER OF

S E C R E T KUWAIT 001022 SIPDIS NOFORN SIPDIS STATE FOR PM/DTCC BLUE LANTERN COORDINATOR, NEA/ARP E.O. 12958: DECL: 06/26/2017 TAGS: ETTC KOMC KU SUBJECT: BLUE LANTERN: UPDATE ON POSSIBLE TRANSFER OF U.S.-ORIGIN TECHNOLOGY FROM KUWAIT TO CHINA REF: A. KUWAIT 577 ¶B. STATE 1607 Classified By: A/DCM Tim Lenderking for reasons 1.4 (b) and (d). ¶1. (S/NF) Following up on April 18 assurances from the Ministry of Defense (MOD) to investigate the case of a possible release of sensitive U.S.-origin Advanced Tactical Communications System (ATCS) technology to Chinese company Norinco (reftels),Econoff met again with Assistant Director of Foreign Military Sales Colonel Haider Abdullatif on June ¶25. Col. Haider explained that the MOD had concluded its investigation and determined that no ATCS documentation or technology was transferred to Norinco by the MOD or by KDL (Kuwait Dynamics Limited),the contractor responsible for connecting the ATCS to the Norinco PLZ-45 artillery system. He said KDL only participated in the installation of electrical connections and peripherals and was not responsible for actual integration of the ATCS with the PLZ-45. Col. Haider assured Econoff that the MOD takes licensing and defense technology transfer issues seriously and would never deliver any sensitive documentation or information to unauthorized parties. ¶2. (S/NF) On June 26, Post received a diplomatic note from the Ministry of Foreign Affairs dated June 18, which stated: (quote) We would like to affirm that the Ministry of Defense did not provide or deliver any information or documents to any other parties related to this subject. (unquote) Enclosed was a letter dated May 27 from ITT Corporation's Kuwait Country Manager to the MOD which states: - ITT is fully aware of the business relationships between Norinco and KDL for the Chinese Gun Program. This includes the prime contractor role that KDL has for the two battalions of 105mm howitzers that are to be deployed for KMOD - ITT had asked KDL to fill out the appropriate TAA (technical assistance agreement) paperwork over two years ago and KDL did not comply, until just recently. Based on the fact that this recent application occurred after the official notification of possible TAA violations, ITT will not be working with KDL in reference to its radio systems. - After ITT received a complaint from one of the USA agencies concerning the situation of possible TAA violations, ITT informed KMOD both verbally and in writing. - ITT wants to stress the importance of KMOD implementing the appropriate radio handling procedures as were discussed at the above-stated meeting so that this TAA situation will never happen again. - ITT stands ready to assist KMOD in any manner to make this TAA work out successfully in the near term. ********************************************* * For more reporting from Embassy Kuwait, visit: http://www.state.sgov.gov/p/nea/kuwait/?cable s Visit Kuwait's Classified Website: http://www.state.sgov.gov/p/nea/kuwait/ ********************************************* * LeBaron