GUIDANCE NEEDED ON 699(G) RESTRICTIONS APPLIED TO

C O N F I D E N T I A L COLOMBO 001062 SIPDIS DEPARTMENT FOR SCA/INS, SCA/RA, PM/DTTC (S GEIS),DRL, AND L E.O. 12958: DECL: 11/25/2018 TAGS: PREL ECON SMIG KTIP ELAB CE SUBJECT: GUIDANCE NEEDED ON 699(G) RESTRICTIONS APPLIED TO SRI LANKAN EMPLOYEES Classified By: Classified by Ambassador Robert O. Blake, Jr. Reasons: 1 .4 (b,d) ¶1. (C) In a meeting with Ambassador on November 25, Foreign Minister Bogollagama informed post that two U.S. defense contractors, a Kuwaiti company affiliated with the U.S.-based Oshkosh Corp and DynCorp International, had instituted hiring restrictions on Sri Lankan expatriate workers in Kuwait and throughout the Middle East. In addition, some of the up to 700 Sri Lankan nationals currently employed by both companies have been suspended or demoted to comply with the new regulations. Bogollagama passed us copies of a DynCorp trade compliance newsletter that cited "Directorate of Defense Trade Controls (Our ITAR friends)" (22 CFR 126.1) as stating, "It is the policy of the United States to deny licenses and other approvals for exports and imports of defense articles and defense services, destined for or originating in certain countries." (Note: This ITAR was issued in March 2008 following the inclusion of section 699G in the 2008 Foreign Operations Appropriations legislation. End note.) The newsletter continued, "To put this statement into context, exports and defense services include the transfer of technical knowledge, providing training to and employment of nationals of the above countries... (The) Trade Compliance group is working with the Dept of State to clarify how we should proceed but for the time being, NO NEW hires of Sri Lankan nationals is currently authorized. (DynCorp) recruiting and recruiting brokers can no longer recruit or submit for hire Sri Lankan nationals." ¶2. (C) The Minister said DynCorp and other companies in the Gulf appear to be interpreting restrictions to include a prohibition on hiring Sri Lankan nationals. The Foreign Minister pointed out in the meeting and in an Aide-Memoire (copy e-mailed to SCA/INS) the paragraph outlining defense sales restrictions for Sri Lanka (126.1 (n)) makes no specific mention of employment of Sri Lankan nationals. It states, "It is the policy of the United States to deny licenses and other approvals to export or otherwise transfer defense articles and services to Sri Lanka except, on a case-by-case basis, for technical data or equipment made available for the limited purposes of maritime and air surveillance and communication." (Note: Section 699G(a) states that "no military...technology shall be sold or transferred to Sri Lanka.") The Minister said such employees represent an important source of remittances for Sri Lanka and urged that the U.S. clarify out policy to allow Sri Lankans to work for U.S. defense contractors. ¶3. (SBU) Action Request: Post seeks guidance on whether the definition of "Sri Lanka" in 699(g) includes Sri Lankans citizens working overseas, and would thereby prohibit Sri Lankan nationals from employment with defense contractors. If it does not, we urge that a clarification of the restrictions be communicated to DynCorp and Oshkosh as well as other companies in the sector who operate in the Middle East. Blake