NORWAY AND F-5 FIGHTER TRANSFER

C O N F I D E N T I A L OSLO 000792 SIPDIS SIPDIS PM/RSAT (DBAME, DQUINN),PM/DTC (SCLARK, DBOUNDS), DSCA/STR/POL (THUGHES),SAF/IARG, EUR/NB (VMIDDLETON) E.O. 12958: DECL: 08/01/2017 TAGS: MARR PREL NO SUBJECT: NORWAY AND F-5 FIGHTER TRANSFER REF: A. 7/23/07 EMAIL FROM DQUINN TO RSIMM ¶B. 7/23/07 EMAIL FROM RSIMM TO DQUINN ¶C. 7/24/07 EMAIL FROM RSIMM TO DQUINN ¶D. 7/31/07 EMAIL FROM DQUINN TO SPLATO ¶E. OSLO 729 Classified By: Ambassador Benson K. Whitney, Reasons 1.4 (b) and (d) ¶1. (C) Summary. Post continues to press the Norwegian government to approve the transfer of F-5s and related equipment from the GON to Lockheed Martin (LM) and Northern General Leasing (NGL). Post is greatly concerned that failure to effect the F-5 transfers will negatively impact U.S.-Norwegian relations, particularly as the Norwegian Ministry of Defense fully supports the transfer. The Norwegian Foreign Ministry, although willing to facilitate this process, must receive assurances that the transfer fulfills a USG requirement and is not a transfer to a strictly private entity. Letters transmitted to Post from State have not satisfied the GON´s concerns (Reftels A and D) as they have failed to formally state this. We fear that should the F-5 transfers not occur due to a failure of the USG to provide an appropriately worded letter, the GON may come to view the U.S. as an unreliable partner. Coming on top of other challenges outlined in Ref E, this problem could negatively impact future military sales (such as the possible $2.2 billion purchase of the Joint Strike Fighter). End Summary. Background -------------- ¶2. (C) NGL, a U.S. company, is developing a program providing Introduction to Fighter Fundamentals (IFF) flight training for Foreign Military Sales (FMS) cases under U.S. Air Force (USAF) management. Related to this program, NGL has been working with the Government of Norway (GON) to purchase 15 U.S.-origin F-5 aircraft. This program had been under lengthy consideration and development, and received USAF and DOD senior leadership endorsement. ¶3. (C) There is an urgency to expeditiously complete the transfer, given a projected January 2008 FMS start date. Given this advanced start date, NGL must transport all the aircraft and associated supplies to the U.S., which must also be set up and operational by the end of 2007. Current plans had called for the F-5 aircraft to be deconstructed for shipment by August 3. Post´s MFA Dealings: Moving the Request Forward -------------- -- ¶4. (C) Post has worked closely with the MFA´s Export Control Section in ordeQto forward the transfer. On July 23, Post received a USG notification letter outlining that the F-5 transfers, and supporting equipment were approved (Ref A). Reviewing the letter, Post noted concerns to Washington that the GON may have reservations with its text, pointing out MFA concerns that the GON would approve the actual transfer only upon USG assurances that the aircraft would fulfill a USG requirement and could not be transferred to a strictly private entity (Ref B). ¶5. (C) On July 24, P/E Officer and ODC Chief met with MFA Export Control Section Senior Adviser Ole Morten Parelius, presenting the letter and additional statements from Lockheed Martin (LM) and Northern General Leasing, LLC (NGL). These statements noted, among other things, that the F-5s would be used only to provide a service to the USAF in training foreign military pilots via the FMS Program, and that NGL and LM agreed to dispose of, or demilitarize the aircraft, only at USG direction. ¶6. (C) Although Parelius emphasized that he and his staff certainly wished to cooperate with the transfer, he stressed that he was bound by Norway´s export control laws which required specific USG assurance that the NGL and LM were acting on behalf of the USG´s DOD in the F-5 transfer. Specific end-use assurance from the USG, noting that transferred aircraft would fulfill a USG requirement, was needed. Parelius strongly suggested that any USG certification include language from "Guidelines of 28 February 1992 for the MFA When Dealing with Applications Concerning the Export of Weapons and Military Material as well as Technology and Services for Military Purposes" (the "Guidelines"). ¶7. (C) Parelius pointed out to Guidelines Section 3(v)(3)(a),which states in part that "An export license will normally be granted for the export of goods in category confirmed A if the customer is, or is acting on behalf of, the defense authorities of a country belonging to group 1. This must be substantiated by documentation." The Guidelines, in their entirety, were sent in Reftel C. Parelius stressed that the transfer had also received extensive media coverage last year, and that it was a topic which drew the scrutiny of many GON officials, particularly at the MFA. Restating that he wished to expedite the matter, he noted that once the needed information was delivered, the transfer would be made a priority, and GON approval could be almost immediate, estimating one or two days. ¶8. (C) In response to such MFA concerns, Post received a draft USG letter (Ref D),which was submitted to Parelius on July 31. Parelius responded that the GON could not issue a license based on the draft, and needed a letter which clearly stated that "the customer NGL is acting on behalf of the defense authorities in the U.S. on this matter." ¶9. (C) On August 1, P/E officer spoke with Parelius, who confided that he was "desperately seeking a solution," but bottom line is that his hands are tied. Parelius reiterated that he needs the explicit assurance that NGL and LM were acting on behalf of the USG´s DOD. He suggested that if the F-5s were transferred to the USAF, rather than to NGL and LM, many Norwegian concerns under its export laws would not be raised. Comment and Action Request -------------- ¶10. (C) The F-5 transfer is supported by the Norwegian MOD, as the military is eager to move the aircraft and equipment transfer forward. MFA colleagues handling this export matter, while consistently expediting our numerous requests for assistance, are becoming visibly frustrated that the USG has not yet complied with Norway´s export control laws. Post is also concerned that after the problems encountered from the F-5 transfer, the GON may in the future question the US export control regime, given that the similarity between US and Norwegian laws. Furthermore, coming on top of other recent challenges with military sales to Norway documented in Ref E, we fear a failure to effectuate the transfer will likely negatively impact US-Norwegian relations. Post urgently requests that Washington agencies considering the F-5 transfer seek an immediate resolution that considers these implications. WHITNEY