RESPONSE TO BLUE LANTERN PRE-LICENSE, END USE

UNCLAS HANOI 001204

SENSITIVE
SIPDIS

PM/DTCC - BLUE LANTERN COORDINATOR

E.O. 12958: N/A
TAGS: ETTC KOMC VN
SUBJECT: RESPONSE TO BLUE LANTERN PRE-LICENSE, END USE
CHECK ON APPLICATION 050112606

REF: SECSTATE 76533


1. (SBU) SUMMARY: Per reftel, the Embassy made inquiries with
the Vietnam Marine Police to assess the end use of items
stated on the license request and conducted a site visit to
Van Xuan General Import Company to assess its business
operations, on-site security, and general reliability as a
recipient of United States Munitions List (USML) items. Post
is confident that the Vietnam Marine Police is the end user
for the items and the Van Xuan Import Company is a legitimate
import agent. End summary.

Van Xuan General Import Company
--------------


2. (SBU) In a meeting in Hanoi on October 2, 2008, poloff
discussed the license application for the Integrated Engine
Display System (IEDS) with the Manager of the Planning
Department, Mr. Pham Hoang Thu. Mr. Thu explained that Van
Xuan Import Company (VAXUCO) is a Ministry of Defense (MOD)
company; that is, the company is owned by the MOD and staffed
with quasi-government employees. VAXUCO's responsibility is
to act as the commercial import agent for the MOD. As a
MOD-owned company, Van Xuan is essentially part of the
government bureaucracy. The company is not in business for a
profit, but to facilitate transaction of defense articles to
the various branches of the Vietnamese military, security
forces, and police.


3. (SBU) Mr. Thu produced the contract documents, allowed
poloff to review the documents, and offered to provide copies
as needed. VAXUCO's role is to receive the items upon
arrival, ensure that all proper paperwork is completed to
pass through customs, and transfer the items to the Vietnam
Marine Police.


4. (SBU) The company representative appeared to have a strong
understanding of restrictions on USML, confirming that the
items would be secured as required. Mr. Thu also explained
that retransfer and end use restrictions and requirements are
listed clearly in the contract and have been explained to the
Vietnam Marine Police. Overall, Mr. Thu demonstrated a clear
knowledge of the rules and a willingness to provide
information. Further, he offered to discuss any other case
involving U.S. equipment, should we have such questions in
the future.

Vietnam Marine Police
--------------


5. (SBU) Poloff and pol FSN met with Rear Admiral Pham Duc
Linh, Director of the Vietnam Marine Police Headquarters in
Hai Phong on October 21. ADM Linh confirmed that the Vietnam
Marine Police (VMP) wish to acquire the items in the license
application request and offered any information that would
hasten the process. He explained that the VMP falls under
the administration of the MOD, hence the use of the MOD's
import agent, VAXUCO. By way of background, ADM Linh
explained that the VMP is a relatively new organization,
established in 1998, and the Government of Vietnam is now
making a significant investment in equipment for VMP. AMD
Linh went on to reassure poloff that the equipment will be
installed on surveillance aircraft that do not have any
weapons or combat equipment on board. Regarding retransfer
requirements, ADM Linh explained that the VMP has no
intention of transferring any U.S. equipment it acquires as
it is greatly needed by his organization; however, he clearly
understood the issue, and not
ed that all U.S. equipment and materials provided would be
properly safeguarded and adhere to all contractual
requirements.


6. (SBU) COMMENT: Post believes VMP is the genuine end user
of the items, and that VAXUCO is a legitimate import agent
for the MOD and has a high degree of confidence that both
VAXUCO and the VMP are aware of and intend to fulfill their
contractual obligations, including the restrictions on
re-export and retransfer of USML. End Comment.


7. (U) Post point of contact for this matter is Jane
Bocklage, phone: (84-4) 3850-5081, bocklageje@state.gov.
MICHALAK