BLUE LANTERN LEVEL 3: PRE-LICENSE END-USE CHECK

UNCLAS STATE 149579 SIPDIS NOFORN SENSITIVE SIPDIS ISLAMABAD FOR SHENOA SIMPSON ECON E.O. 12958: N/A TAGS: ETTC KOMC PK SUBJECT: BLUE LANTERN LEVEL 3: PRE-LICENSE END-USE CHECK ON APPLICATION 050068647 REF: BLUE LANTERN GUIDEBOOK 2006 ¶1. (U) This is an Action Request. See paragraphs 2-4. ¶2. (U) The Department's Office of Defense Trade Controls Compliance (PM/DTCC) requests post's assistance in conducting a pre-license check on application 050068647 for the export of night vision equipment to Pakistan. Post is requested to complete this Blue Lantern check within 30 days. Lack of response to a Blue Lantern check will affect pending and future applications involving parties to this license. ¶3. (SBU) Reason for request: questionable aspects of the proposed transaction, including a vague end-use statement and involvement of a foreign intermediate consignee whose bona fides have not been verified by a Blue Lantern check. This proposed transaction involves a large quantity of night vision devices (NVDs) that lack a crucial component, the image intensifier tube (IIT). It is unclear from the application's end-use statement whether these NVDs will be integrated with non-U.S.-origin IITs or other components. PM/DTCC also notes that at least one recent application (050032904) for the export of NVDs to the Pakistan MOD was returned without action due to Pakistan's non-compliance with a DOD MOU signed in June 2004 that stipulated quarterly inventories by serial number. It is possible that this proposed transaction is an attempt to obtain previously denied NVDs through another channel or to avoid USG NVD inventory requirements. It also is possible that foreign intermediate consignee Consolidated Logistics Corporation is essentially manufacturing NVDs for the Pakistan MOD using parts from the U.S. and one or more additional countries. Post should make appropriate inquiries to verify the bona fides of Consolidated Logistics Corporation and confirm the legitimacy of the proposed transaction. The following questions are provided as suggested guidance: For the Pakistan MOD: --Are you familiar with Consolidated Logistics Corporation? --Did you order from Consolidated Logistics Corporation the exact type and quantity of items listed on this application? --Did you in fact order these U.S.-origin NVDs without U.S.-origin IITs? --Will non-U.S.-origin IITs be integrated into these U.S.-origin NVDs? If so, who will perform the integration? ; --Is Consolidated Logistics Corporation an official supplier/contractor for the Pakistan MOD? Does the Pakistan MOD have any other contracts with the company? For Consolidated Logistics Corporation: --Does the company have proper supporting documentation, including purchase orders from the Pakistan MOD, for this proposed transaction? --What role will the company play in this proposed transaction? --Will non-U.S.-origin image intensifier tubes be integrated into these U.S.-origin NVDs? If so, who will perform the integration? --When was the company established and who are its principals? --What is the nature of its business -- what types of items does it handle, does it serve as a broker? --What types of organizations are among its typical customers and where are the customers located? --Does the company understand the restrictions on United States Munitions List (USML) items, especially the prohibition against unauthorized re-transfers and re-exports? ¶4. (U) Department requests that post conduct a site visit to the company in order to provide Department with an assessment of its business operations and on-site security. If a site visit is not possible, please inform PM/DTCC case officer. Finally, post is asked to assess whether the company appears to be a reliable recipient of USML items. End action. ¶5. (SBU) For background, the following details of the license in question are provided: DTC Case: 050068647 QUANTITY/COMMODITY: 80 AN/PVS-7D single tube night vision goggle with accessory kit and without image intensifier tube 220 Multifunctional universal mini-monocular with accessory kit and without image intensifier tube License Value: USD 390,000.00 SELLER: Insight Technology Inc. 9 Akira Way Londonderry, NH 03053 Company POC: Brenda Payne, tel.: 603-551-6014 FOREIGN INTERMEDIATE CONSIGNEE: Consolidated Logistics Corporation P.O. Box 200017, 3rd Floor, Business Arcade Shahran-e-Faisal, P.E.C.H.S., Block 6 Karachi-75400 Pakistan Tel.: (92 21) 438 0960 - 61 Fax: (92 21) 438 9200 Email: info@consolidatedlogistics.com Web: www. consolidatedlogistics.com (COMMENT: Application states, "Consolidated Logistics will not be taking possession of the commodity." END COMMENT.) FOREIGN CONSIGNEE: Institute of Optronics Ministry of Defence Production Chaklala Rawalpindi Pakistan FOREIGN END-USER: Pakistan Ministry of Defence Production Ministry of Defence Karachi 75400 Pakistan PURPOSE: Items will be used by the Pakistan Army to provide night vision for domestic and deployed international operations, including UN operations. U.S.G. concluded a visit to Pakistan to validate their inventory of night vision equipment on September 21, 2007. ¶6. (U) Submitted in support of the license application were the following documents (PM/DTCC can fax documentation to post upon request): --U.S. Department of State Nontransfer and Use Certificate (Form DSP-83),signed by (illegible),Store Officer, Institute of Optronics, Ministry of Defence Production - Rawalpindi, dated 03-05-2007; signed by (illegible),Director General, Institute of Optronics, Ministry of Defence Production - Rawalpindi, dated 3/8/07; and signed by (illegible),Director General, Munition Production (DGMP), Ministry of Defence Production - Rawalpindi, dated 4-19-07 --End Use Statement, signed by Shahid Shafiq, Director, Consolidated Logistics Corporation and by (illegible), Director General, Institute of Optronics, Ministry of Defence Production - Rawalpindi, dated 5/8/07 --Purchase Order number 786323324 from Consolidated Logistics Corporation to Insight Technology Inc., dated 8 May 2007 --Product brochures, including technical specifications and photographs ¶7. (U) Please slug reply for PM/DTCC - BLUE LANTERN COORDINATOR and include the words "Blue Lantern" and the case number in the subject line. POC is Judd Stitziel, PM/DTCC, Phone: 202-663-3455; email: StitzielJD@state.gov; SIPRNET: StitzielJD@state.sgov.gov. The Blue Lantern Guidebook (ref) is available as a PDF file in the Bunche Library's Electronic Library collection on the DOS Intranet: http://virtuallibrary.state.gov/ BlueLanternGuidebook2006%2520 final .pdf ¶8. (U) Department is grateful for post's assistance in this matter. RICE