Identifier
Created
Classification
Origin
08SAOPAULO468
2008-09-04 17:00:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Sao Paulo
Cable title:  

BLUE LANTERN POST-SHIPMENT CHECK ON LICENSE 050073566

Tags:  ETTC KOMC CO BR 
pdf how-to read a cable
VZCZCXRO5594
RR RUEHRG
DE RUEHSO #0468/01 2481700
ZNR UUUUU ZZH
R 041700Z SEP 08
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC 8494
INFO RUEHBR/AMEMBASSY BRASILIA 9631
RUEHRG/AMCONSUL RECIFE 4180
RUEHRI/AMCONSUL RIO DE JANEIRO 8833
RUEHBO/AMEMBASSY BOGOTA 1690
RUCPDOC/USDOC WASHDC 3159
RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC
UNCLAS SECTION 01 OF 02 SAO PAULO 000468 

FOR PM/DTCC-BLUE LANTERN COORDINATOR

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ETTC KOMC CO BR
SUBJECT: BLUE LANTERN POST-SHIPMENT CHECK ON LICENSE 050073566

REF: STATE 58722

UNCLAS SECTION 01 OF 02 SAO PAULO 000468

FOR PM/DTCC-BLUE LANTERN COORDINATOR

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ETTC KOMC CO BR
SUBJECT: BLUE LANTERN POST-SHIPMENT CHECK ON LICENSE 050073566

REF: STATE 58722


1. (SBU) SUMMARY: In response to reftel, Econoff conducted three
separate site visits and was able to confirm receipt of the parts by
Foreign Consignee Embraer. Site visits revealed that Embraer's
license application contained erroneous information about consignee
Darrigo & Valente Transportes, Ltda., including incorrect company
name and address. The site visits conducted on the basis of the
request were insufficient to assess the operations and on-site
security of Transportes Darrigo Ltda, the company that actually
receives and transports USML items for Embraer. Following the site
visits, Embraer provided proof that parts were received. Post
recommends that PM/DTCC meet with Embraer's Senior Legal Counsel,
Werner Buff Neto, during the upcoming visit to Brazil on September
24, and conduct follow-up site visits to the locations where
Transportes Darrigo Ltda actually operates from. END SUMMARY.


2. (SBU) On August 28, 2008 Econoff conducted a site visit to
Darrigo E Valente Transportes, Ltda. (located at Rua Dublin, 98,
Vila Letonia, Sao Jose dos Campos; alias Darrigo & Valente
Transportes) and spoke with the company Director, Rafael Darrigo
Valente. Econoff conducted a subsequent site visit to DEX Logistica
(located at Rua Oslo, 187, Vila Letonia, Sao Jose dos Campos, which
is the address listed on the license application),but the Manager,
Carlos Sergio Martins, was not available. Econoff subsequently
visited foreign consignee Embraer where she spoke with the company's
Senior Legal Counsel, Werner Buff Neto, about the discrepancies in
the license request.

--------------
SITE VISIT: DARRIGO E VALENTE TRANSPORTES
--------------


3. (SBU) Darrigo E Valente Transportes, Ltda. (Rua Dublin, 98, Vila
Letonia) claimed to have received no packages from the United States
nor delivered any packages to Embraer in 2008. According to
Director Rafael Darrigo Valente, the company has been at the address
Rua Dublin, 98 since June 2004. Valente produced and provided
copies of contracts to back this claim. Valente rents the property
from Portuguese citizen Manuel Fernando Duarte Pereira for
R$750/month (equivalent to $470 USD).


4. (SBU) The facility has no identifying external sign, website or
otherwise easily accessible contact information, and the Director's

business card does not include an address. Regarding security, the
facility does not have an electronic security system or
well-organized files. The company has one old computer, three
administrative staff, and a few additional employees. Econoff did
not observe any boxes or other material germane to a transportation
company, save two small vans. Valente does not speak English.


5. (SBU) Valente claims to have worked as an outsourced contractor
of Fedex since 1990 for the city of Sao Jose dos Campos and
surrounding municipalities. This relationship changed in 2002 when
Fedex consolidated contracts from twenty-two companies to three.
The company that won the contract for the South-Southeast of Brazil
(where Sao Jose dos Campos is located) was Transportadora Americana.
At that time, Darrigo E Valente Transportes was contracted via
Transportadora Americana to continue providing services for Fedex.
Valente claimed that during this time his company was co-located at
Transportadora Americana's facilities. (Note: Later, Valente said
his company was located at Rua Oslo, 187 until 2004. End Note) In
November 2007, this relationship was terminated at Transportadora
Americana's request. Valente explained that it was a cost-saving
measure.


6. (SBU) Valente told Econoff that since November 2007, the company
works as an "Advance Fedex Shipping Center". Valente explained that
this means that clients who do not have a corporate account with
Fedex can send and receive packages utilizing Darrigo E Valente
Transportes' account. Econoff observed a folder containing Fedex
shipping slips from 2008 and there appeared to be no more than a
couple dozen such slips. The FedEx website lists Darrigo & Valente
Transportes Ltda. as an authorized shipper.


7. (SBU) Throughout the 60 minute conversation with Econoff,
Valente appeared nervous, defensive, eager to control conversation,
but cooperative. After speaking with Econoff for over an hour and
insisting that his company has done no work for Embraer in the past
year, Valente told Econoff that he has a 'branch office' at
Guarulhos International Airport in Sao Paulo. The branch office is
named "Transportes Darrigo Ltda." and they work exclusively with
Embraer. (Comment: Econoff was surprised that it took over an hour
for this information to surface. Econoff was clear from the

SAO PAULO 00000468 002 OF 002


beginning that the shipment was for Embraer. Valente had already
told Econoff on several occasions that his company does not work for
Embraer. Embraer later told Econoff that the company works for them
out of Viracopos airport in Campinas. End comment)


8. (SBU) Subsequent on-line research revealed that both Transportes
Darrigo Ltda. and Darrigo & Valente Transportes are listed at the
city's chamber of commerce as located at the following address: Rua
Talim, 55. Jd. Aeroporto. At no time did Valente indicate to
Econoff that he had another facility in the neighborhood nor does
this address appear in any of the rental contracts Valente produced.
In a post-visit phone call, Valente told Econoff that Darrigo &
Valente Transportes no longer is located at the Rua Talim address.

--------------
SITE VISIT: DEX LOGISTICA
--------------


9. (SBU) Valente accompanied Econoff to DEX Logistica, a shipping
company located at Rua Oslo, 187, Vila Letonia, Sao Jose dos Campos,
which is the address listed on the license application. Valente
produced a rental contract for this facility, indicating that in
2004 he rented the facility to Porto Uniao Representacoes E Comercio
Ltda., a food distribution company. In 2007, the facility was
rented to DEX Transportes E Logistica, Ltda., a logistics and
shipping company. Monthly rental is R$ 2500 ($1,560 USD). The
facility appeared bona fide, with forklifts, electronic security,
website, and other material germane to a shipping company. Valente
claims that relationship between Darrigo & Valente Transportes and
DEX is strictly a rental relationship. (Note: Econoff did not have
an opportunity to speak with the manager therefore this information
was not confirmed. End Note.)

--------------
EMBRAER LEGAL DEPARTMENT
--------------


10. (SBU) Following the site visit, Econoff met with Embraer's
Senior Legal Counsel and person responsible for export controls,
Werner Buff Neto. Econoff indicated her concern about the lack of
clarity with regards to both the company and address listed on the
license application. Buff showed Econoff a copy of the purchase
order and license application, together with Embraer's contract with
Transportes Darrigo Ltda. Following the visit, Buff furnished
documents confirming receipt of parts. Buff told Econoff that
Embraer has an extensive relationship with Transportes Darrigo Ltda.
and that the company has been a reliable partner as an Embraer
freight forwarder, transporting goods between Embraer sites. Buff
provided Econoff a copy of the service contract, signed in April

2005. The company's listed address in the contract is Rua Talim, 55
and the contract was signed by Luiz Guilherme Darrigo, who is listed
as the Director and President of the company. Transportes Darrigo
Ltda's 1992 by-laws lists the following people as owners: Luiz
Guilherme Darrigo and Maria Auxiliadora do Prado Darrigo. Nowhere
in the dozens of pages of legal documents about the company is there
mention of Darrigo E Valente Transportes, Ltda., Rafael Darrigo
Valente, the Rua Dublin address, or the Rua Oslo address.


11. (SBU) Following the visit, Buff offered to look at the issue in
more detail and indicated concern that their license application
contained erroneous information. Following Buff's investigation
into the matter, he explained to Econoff that according to Embraer's
files, Darrigo E Valente Transportes is part of Transportes Darrigo
Ltda and does occasional work for Transportes Darrigo Ltda as a
subcontractor.


12. (SBU) COMMENT: In light of Brazil's onerous and complicated
tax system, it is not unusual to find companies entangled in complex
legal arrangements designed to avoid a heavy tax burden. The
obscure relationship between Darrigo E Valente Transportes and
Transportes Darrigo Ltda may be more of an indication of the
difficulty of doing business in Brazil than that the company is
engaged in wrongdoing. The visit by PM/DTCC on September 24 for
Blue Lantern training and outreach will give post an additional
opportunity to look into this case while also explaining to the
business community the exigencies of US export controls related to
USML items. END COMMENT.

White