RESPONSE TO BLUE LANTERN LEVEL 3: PRE-

UNCLAS SEOUL 001209

SIPDIS

STATE FOR PM/DTCC-BLUE LANTERN COORDINATOR

E.O. 12958: N/A
TAGS: AU ETTC KOMC KS
SUBJECT: RESPONSE TO BLUE LANTERN LEVEL 3: PRE-
SHIPMENT END-USE CHECK LICENSE 050102491

REF: A) STATE 052315


1. Per reftel, post contacted the Republic of
Korea Army (ROKA),Defense Acquisition Program
Administration (DAPA),Sewoon Technology Co. and
an additional contractor - UBY, by e-mail and
phone. Due to resource constraints, a site visit
was not conducted.


2. Ms. LEE Yeom-kyong, DAPA's Export and Import
Control Officer, confirmed to Post that the
contract at question is between UBY and DAPA, not
Sewoon Technology and DAPA. UBY is a DAPA-
registered contractor for maintenance of self-
propelled artillery incorporated into K-9 tanks,
which constitutes its primary business. Located
at 842-20, Yoolamri Paltan-myeon, Hwasung City,
Kyonggi Province, UBY consists of Purchasing,
Sales, R & D, Management, Technology, and
Production Departments.


3. According to DAPA and ROK Army/MND, UBY is a
welfare institution that employs veterans through
government contracts. It is supported by the
ROKG under the Enforcement Decree on Guidelines
of Making Contracts with the ROKG. Under this
Decree, UBY is entitled to military contracts
without going through DAPA's open bidding process.


4. Since Sewoon Technology is not the direct
contractor to DAPA, DAPA could only confirm that
UBY is its parts supplier for the K-9 self-
propelled artillery. Since 2004, UBY has supplied
circuit cards for the K-1 and K-9 tanks to
DAPA/MND.


5. Mr. CHANG Soo-hyeon, UBY's factory manager,
confirmed its contract with ROKA and Sewoon
Technology. Specifically, Mr. CHANG
confirmed the quantity of the ordered items
matched that which Sewoon Technology ordered from
TNR Enterprises. The purchase order between UBY-
DAPA/ROK Army and UBY-Sewoon Technology will be
sent separately by email.


5. Mr. LEE Ki-sung, President of Sewoon
Technology, confirmed to post that it is a sub-
contractor to DAPA-registered suppliers
(including UBY) and provides primarily electronic
power circuits to be incorporated into the K-1
and K-9 tanks. The company was established in
2001 by Mr. LEE Ki-sung, President; Mr. SONG
Moon-seok, Senior Executive VP for Sales and
Purchase; and Mr. CHOI Kwang-joon, Executive
Director for Production Management. Prior to
establishing Sewoon, these individuals worked in
the electronics industry with companies such as
Hyundai Rotem, a major Korean defense materials
manufacturer.


6. Sewoon incorporates the power modules from
TNR Enterprise into electronic circuits that can
be used as a power controller of self-propelled
artillery in the K-9. Sewoon's major customers
are UBY and Korea Aerospace Industries, the
latter located in Sachwon in South Kyongsang
Province (the southern part of (South) Korea),
exclusively supplying the ROK Army. Sewoon
Technology maintains a secure facility where
these parts power modules are stored. A photo of
the secure facility will follow separately by
email. Sewoon fully understands the importance
of USML sale restrictions as a result of this
investigation.


7. ROK Army, UBY, and Sewoon request that the
USG issue the export license in a timely manner
since the subject items are urgently needed.

VERSHBOW