(S) GERMAN-ORIGIN HELICOPTERS EXPORTED TO AFGHANISTAN: PREPARING FOR INQUIRIES

S E C R E T BERLIN 001705

SIPDIS
EUR FOR EUR/CE AND EUR/RPM
T/PM/DDTC FOR MALONEY
DOD FOR DEFENSE SECURITY COOPERATION AGENCY
DSCA FOR MAJ. ORENCHICK
CENTCOM FOR COL. KULVAS
EUCOM / TRANSCOM FOR LNO SIERS AND K. JOHNSON CASARES

E.O. 12958: DECL: 12/24/2033
TAGS: KOMC, PGOV, PREL, ECCT, AF, GM
SUBJECT: (S) GERMAN-ORIGIN HELICOPTERS EXPORTED TO
AFGHANISTAN: PREPARING FOR INQUIRIES

REF: A. BERLIN 1482
B. BERLIN 1467

Classified By: CDA John Koenig for Reasons 1.4 (b) and (d)

1. (S) This is an action request. Please see paragraph
14.

2. (S) Summary: The German Federal Security Council's (BSR)
anticipated November 5 decision to allow the export
of Puma helicopters to Afghanistan (Ref A) did not take
place. Since then, Presidential Airways has moved the
helicopters to Afghanistan without the required GOG
permission. The GOG has again deferred action on this case
and will not act before late January 2009. The situation now
likely constitutes a violation of Germany's export
laws. To date, CDA and EMIN have engaged with senior MFA
officials and, while this matter has not yet become public,
we expect that it could soon and request Department
assistance in developing a coordinated interagency response.
End Summary.

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BACKGROUND
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3. (S) As detailed in Refs A and B, Presidential Airways
(PA) purchased three Puma helicopters in Germany from
Eurocopter Deutschland (ED). PA anticipated using these in
support of a contract to provide logistics and transport
services in Afghanistan and sought an export license from the
German export control authorities. This export case
attracted attention at the highest levels of the German
Government, reportedly including Chancellor Merkel. PA moved
the
helicopters from Germany, initially to Turkey, then Georgia,
then Azerbaijan, without securing an export license.
PA and the GOG had agreed informally in November to have the
helicopters remain in Baku, Azerbaijan pending
a GOG decision on the export permit application. Presidential
Airways is owned by the Prince Group, Inc.,
which also owns the Blackwater security company.


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Chronology of Recent Developments
--------------

4. (C) On November 4, ODC Germany forwarded a letter from PA
to the German Chancellor's office stating PA would hold
the Pumas in Baku until after the November 5 BSR meeting. The
BSR failed to render a decision at its November 5
meeting.

5. (C) On November 11, PA sent a letter to Eurocopter
Deutschland (ED) management outlining their position. PA
had retained German legal counsel to represent them and
contended that they violated no U.S. law by moving the
Pumas. PA also asserted that, as the BSR failed to render a
decision, the case was no longer before the German
authorities and PA saw no reason to wait for a German export
license.

6. (C) On November 26, ODC Germany sent an update to CENTCOM,
TRANSCOM, and CJTF-101. ODC Germany believed the
GOG required more detailed information on the helicopters
before issuing a decision. ODC once again stressed to PA
the need to hold the helicopters outside of Afghanistan
pending a GOG decision.

7. (S) On December 1, a representative of the German
Chancellor's office told PA's German counsel that a
particular ministry (ODC Germany believes this to be the MFA)
was pushing this issue to the full German cabinet for
a decision and was not satisfied with having it decided by
the BSR. The concerned ministry wanted to confirm some key


facts from its own sources rather then rely solely on PA's
assurances.

8. (C) PA's attorney in the US subsequently advised ODC
Germany that PA had grown tired of waiting for GOG action
and believed that PA had no obligations or responsibilities
to the GOG. Further, it saw no legal reason not to deploy the
Pumas to Afghanistan. The PA attorney expressed his desire
for the USG to "stand up" to the GOG and stated that the
GOG was holding PA "hostage".

9. (S) On December 3, CDA spoke with MFA State Secretary
Silberberg to request his assistance in securing
BSR agreement for PA's export license given US operational
needs in Afghanistan. Silberberg undertook to
look into the matter. On December 5, the Chancellor's office
notified ODC Germany that the concerned
ministry had received satisfactory answers to their inquiries
and that they would "reluctantly" agree
with the other ministries and release the export license and
the helicopters during a vote
December 10.

10. (S) On December 5, ODC Germany received an e-mail from
TRANSCOM stating that the 3 Pumas had "self-deployed" to
Afghanistan. ODC passed this information to EUCOM and senior
Embassy Berlin officials.

11. (S) On December 11, the Chancellor's office notified ODC
Germany that the head of the concerned ministry had
changed his mind and would not release his block on the
export license. Further, he stated that he did not want
the issue taken up again until the end of January.

12. (S) Throughout this case, CDA and EMIN have engaged
proactively with their State Secretary and Director General
counterparts at the MFA. However, Embassy Berlin is
concerned that PA's analysis and recent actions violate
German law and undermine US export control efforts.

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Balancing US Interests
--------------

13. (S) Post understands and appreciates the operational
requirement in Afghanistan for the three Pumas. However,
export of German defense articles to a conflict zone is
ordinarily prohibited; exceptions must pass through a
special review and coordination process, culminating in the
BSR, whose deliberations are generally regarded
as highly sensitive and secret. If the facts were reversed,
we imagine that the USG would find
the present situation untenable and seek legal recourse. To
illustrate the point, please
consider the USG reaction to the following hypothetical, but
analogous, series of events:

--A company from Germany purchases an export-controlled item
in the US and receives an export license from the USG
subject to the conditions that the items will NOT be
re-exported without permission to a prohibited country such
as Iran.

--Next, consider either of the following two scenarios:

A) The German company decides it wants to export the item to
Iran after all. Without applying to BAFA (the German
export controls agency) for German permission or to the USG
under the terms of the export license, the German company
"self-deploys" the items to Iran.

--OR

B) The German company DOES go to BAFA for an export license.
BAFA, despite its understanding that the items are
sensitive and restricted, nonetheless permits the re-export


to Iran to go forward, using the dubious
argument that "the items aren't really German," so there is
nothing they can do about it.

--In either case, we expect that US authorities would react
strongly.

14. (S) Comment: PA's decision to move the helicopters,
regardless of legality, undermines Mission Germany's
efforts to cooperate on priority export control matters. The
US is more often the exporter than the
importer of sensitive defense articles; we have a broad
interest in upholding the integrity of licensing systems. T
he German authorities have been clear regarding the need for
PA to obtain a license prior to transferring
the Pumas to Afghanistan. We expect negative reactions from
both senior German interlocutors and
(if this case becomes public),German media. Post believes
that a coordinated, consistent, inter-agency
approach and response is urgently needed and request
Department's assistance to develop such a position
with DOD and relevant Commands. End Comment.
Koenig