BLUE LANTERN OUTREACH TO POLAND: DISCUSSIONS

S E C R E T STATE 121038 SIPDIS WARSAW FOR RUPERT FINKE AND DUNCAN WALKER E.O. 12958: DECL: 11/14/2018 TAGS: ETTC KOMC PL SUBJECT: BLUE LANTERN OUTREACH TO POLAND: DISCUSSIONS WITH EMBASSY, GOP OFFICIALS, AND INDUSTRY REF: WARSAW 1278 Classified By: Classified By: David Trimble, PM/DTCC ¶1. (U) Summary: Representatives from the Bureau of Political-Military Affairs Directorate of Defense Trade Controls in the (PM/DDTC) met September 10 and 11 with country team, Polish Ministry of Defense (PMOD),and local defense industry to discuss the Blue Lantern end-use monitoring program and related defense trade issues. DDTC reps briefed country team on the Department,s program for end-use monitoring of defense articles and services, guidelines for implementing the program at post, and the importance of preventing retransfer violations by host country to avoid subsequent reports to Congress. DDTC team encouraged Embassy political section and the Office of Defense Cooperation (ODC) to coordinate Blue Lantern checks with Golden Sentry end-use monitoring on Foreign Military Sales (FMS) items. A meeting with MOD official clarified Poland,s major military procurement plans, export control systems, and addressed plans for PMOD to receive maintenance and overhaul from local contractors on its FMS-acquired fleet of F-16 aircraft. Team also conducted a Blue Lantern site visit to WB Electronics, a private company, to discuss their business relationship with the Polish MOD and inquire about a pending export license involving a large quantity of Harris military radios. Washington believes outreach visit achieved goals of improving PMOD,s understanding of U.S. export control laws and regulations, strengthening country team,s knowledge of Blue Lantern program, and enhancing DDTC,s understanding of Polish defense industry and military procurement system. -------------- --- PURPOSE OF TRIP AND MEMBERS OF BLUE LANTERN TEAM -------------- --- ¶2. (U) Administered by the Office of Defense Trade Controls Compliance (PM/DTCC) and pursuant to the Arms Export Control Act (AECA),Blue Lantern is a global program designed to verify the end-use, end-users, and final destinations of commercially exported defense articles, technology and services under control of the International Traffic in Arms Regulations (ITAR). This visit was part of PM/DDTC,s ongoing efforts to improve the effectiveness of Blue Lantern through outreach visits with Embassies and host governments. The DDTC Blue Lantern team consisted of Tim Watkins, Compliance Specialist, Research and Analysis Division (RAD),PM/DTCC; and Tim Mazzarelli, Compliance Specialist, PM/DTCC/RAD. -------------- -------------- WARSAW COUNTRY TEAM MEETINGS -------------- -------------- ¶3. (U) The Blue Lantern team briefed Deputy Chief of Mission, Pam Quanrud on Blue Lantern mission and received an overview of important issues impacting diplomatic relations with Poland. The team explained that it aimed to increase the Polish MOD,s understanding and cooperation with Department,s end-use monitoring efforts. Establishing an open channel of communication between the respective governments on these matters builds confidence in the defense trade relationship, and may increase the Department,s ability to authorize the export of sensitive defense technology and hardware. The DCM raised the importance of stressing the cooperative nature of the endeavor, noting that it is in the best interest of both sides to have a good defense trade relationship. Poland should understand that the USG seeks a defense trade partnership, guided by the principle of reciprocity, meaning we would be willing to provide the MOD with similar assistance in verifying its exports to recipients in the United States if requested DCM expressed interest in receiving information about Polish entities on the Department,s defense trade watchlist, noting that such data would be helpful since post occasionally receives requests for assistance from Polish firms. Access to the watchlist would help post vet such requests and focus on Polish industry. ¶4. (U) DCM also encouraged team to obtain further details on Poland,s proposed export control structure. Post is interested in the PM,s team ability to analyze this regime and then propose improvements in the regulations in order to plug any gaps which may allow for proliferation of sensitive technology. The DCM recognized that the Blue Lantern team,s mission in improving end-use monitoring and the Government of Poland,s (GOP) understanding of export control requirements will impact the larger bi-lateral relationship in a positive manner. ¶5. (S//NF) After meeting with the DCM, DDTC reps met with Duncan Walker, designated Blue Lantern control Officer; John Bienkowski, LEGAT; Jason Evans, Second Secretary; and Glenn Spindel, ICE Deputy Attache. DDTC team requested assistance in identifying local entities of concern, as well as any efforts by China and Russia to obtain U.S.-origin technology from operations in Poland. DDTC reps stressed that China clearly views new NATO-members as targets of opportunity for collecting data on U.S. defense technology, which makes it important for DDTC to receive relevant information from post on parties of concern. Department is reliant on resources on the ground in Poland to obtain pertinent information on local entities of concern to populate its watchlist. Names of individuals and companies who are under suspicion for diverting military items, or of holding substantial ties to countries of concern, can be placed on the DDTC watchlist. The watchlist is used to vet export license requests and will prevent the transfer of sensitive U.S. technology to entities of concern. Evans informed team that the Russian Embassy is fully staffed in Warsaw with personnel interested in collecting information on U.S. military capabilities. Likewise, as the quantity and technical sophistication of U.S. technology exports to Poland grows, China is expected to continue enhancing resources at its Embassy in order to gain access to as much information on U.S. military goods as possible. -------------- -------------- COUNTRY TEAM TRAINING FOR IMPLEMENTING BLUE LANTERN AT POST -------------- -------------- ¶6. (U) The outreach visit to Warsaw was planned to coincide with the arrival of a new team at post responsible for end use monitoring. Since most members of the country team slated to conduct end use monitoring are beginning their tours, an important goal of outreach was to provide guidance on implementing the Blue Lantern program by training the relevant country team members to complete Blue Lantern checks in a timely and comprehensive manner. The PM/DDTC reps briefed Foreign Commercial Counselor John McCaslin, Duncan Walker, Glenn Spindel, and Legal Attache John Bienkowski in attendance )and provided a training session on Blue Lantern best practices. The DTCC team stressed that end use monitoring must be communicated to the host country as a cooperative endeavor, designed to increase confidence of defense trade partners, and not as an investigation or law enforcement activity. ¶7. (U) The team explained how pressure on DTC Licensing to complete review and analysis of license applications within a firm 60 day period impacts the Blue Lantern deadlines that DDTC requests post to achieve. The recent National Security Presidential Declaration (NSPD-56) stipulates that U.S. applicants receive a determination on status of a license application within a maximum of 60 days. However, post is required to complete checks on Blue Lantern cases within 30 days of receiving an action request cable from Washington, for exports involving pre-license checks (meaning the license application is pending approval and awaiting response on Blue Lantern). Since post-shipment checks involve "already" approved license applications, the time pressure is not as acute, and Embassy is required to reply within 45 days. Finally, the team recommended that post embrace a team approach to completing Blue Lantern checks, first establishing a primary point of contact who is responsible for receiving and distributing cable to PM/DDTC in Washington, and who then reaches out to other offices within the Embassy, such as the Foreign Commercial Service, ODC, Regional Affairs, LEGATT, and the Defense Attache, coordinating post,s efforts to provide insight on subjects of end use monitoring checks, e.g. local government entities and private industry. In addition to helping post locate and contact a company or government agency in question to arrange a meeting, insight from the country team can also be used to guide post,s site visit to entity and in crafting questions it will pose to questionable parties. -------------- -------------- DISCUSSIONS WITH OFFICE OF DEFENSE COOPERATION -------------- -------------- ¶8. (U) The Blue Lantern team met with Chief of the Office of Defense Cooperation, Timothy Burke, Lt. Marek Strosin, ODC, and Richard Olesinski to discuss end monitoring and avoiding retransfer violations involving defense articles received by host countries via Foreign Military Sales (FMS). ODC reps expressed eagerness to work closely with Blue Lantern team to implement a comprehensive end-use monitoring program at post. PM/DDTC reps encouraged ODC to view Blue Lantern and Golden Sentry as a unified effort to comprehensively address the full spectrum of U.S. origin defense articles and technology sold via FMS and Direct Commercial Sales (DCS). In many cases, initial military systems are sold via FMS and then follow-on parts and components will be sold via DCS. This opens the door for synergies between the two programs. For example, if the Political Officer is attempting to verify an order with the Polish MOD, ODC will likely be familiar with background information on larger program. Recent large military systems sold to Poland via FMS include F-16 aircraft, Night Vision Devices (NVD),AMRAAMs, and Sidewinder missiles. ODC is preparing to host DOD/DSCA in upcoming months and conduct enhanced end-use monitoring of several systems. ¶9. (C) DDTC team also briefed ODC on Department,s responsibility pursuant to Section 3 of the Arms Export Control Act (AECA) to notify Congress of any unauthorized retransfer or re-export of U.S.-provided defense articles, services or technical data. DDTC team stressed that end use requirements also apply to a host government providing unauthorized access to a U.S.-provided military system to a third country representative. Although this requirement seems abstract, ignorance has led to violations in the past. As the quantity and technical sophistication of the military hardware Poland receives from the U.S. increases, requests from third country nationals to access military bases and factories may also rise, and with it the potential for an unauthorized retransfer or security lapses. For example, if a government hosts a third country delegation and invites the delegation to visit an industrial site or military base where U.S. equipment is stored, it may be opening the door to a possible violation if foreign nationals obtain access to U.S.-origin technical data, manuals, or manufacturing know-how. ODC was urged to communicate to appropriate Polish MOD officials the need to stay vigilant in safeguarding U.S. origin technology. While stressing the importance of preventing violations from occurring in the first place, the team closed by providing information on how to report a possible incident to the Department in the case it should arise. -------------- TEAM BRIEFS POLISH MOD REPRESENTATIVE -------------- ¶10. (U) Blue Lantern team met with MOD Poland representative LtCol Stanislam Cyrylo, along with ODC reps, to discuss end use monitoring, review Poland,s export control laws, procurement structure and purchasing priorities. After receiving a Blue Lantern and Section 3 brief, Cyrylo provided DDTC team with an overview of Poland,s export control laws, which he characterized as the most restrictive in the European Union. Exports are controlled mostly through the Ministry of National Defense but a new structure is currently proposed, which will require legislative approval. Cyrylo explained that MOD is legally obligated to buy equipment from Polish companies, which are capable of supplying most of the military,s needs through domestic sources. This legal requirement limits the volume of direct commercial sales requests from the United States. Although he characterized FMS acquisitions as "time consuming," such purchases are likely to grow as the MOD continues to modernize its inventory with U.S. origin equipment. ¶11. (U) Participants discussed the Polish MOD,s upcoming need to receive maintenance and overhaul services for its FMS purchased F-16 fleet. MOD is likely to contract a Polish firm for this work and ODC questioned whether this maintenance requires prior authorization from USG, explaining that it does not want to risk violating end use assurances. DDTC team explained that a typical Letter of Offer and Acceptance (LOA) between the MOD and USG contains specific end use requirements that often include a list of approved maintenance providers/contractors. If a particular party was not listed in the original LOA as a possible contractor to the MOD, then the MOD must submit a Third Party Transfer request to the Department before party in question can begin work on aircraft or receive any technical data on systems in question. -------------- BLUE LANTERN SITE VISIT TO WB ELECTRONICS -------------- ¶12. (U) Staff from Embassy Warsaw, including DHS/ICE official Glenn Spindel, Economic Officer Duncan Walker, and ODC representative Lt. Marek Strosin, accompanied Blue Lantern team on site visit to WB Electronics (WBE). Team met with WBE representative Justyna Dytrych who verified order, provided background information on export request and business operations, and facilitated team,s inspection of warehouse where the presence of 108 military radios was visually confirmed. Based on verification of order and documentation establishing Polish MOD as final end user, team was confident that WB Electronics is a reliable recipient of USML items. (See reftel for more details). ¶13. (U) DDTC would like to express its gratitude to Embassy Warsaw and especially control Officer Duncan Walker for his assistance in arranging and executing this highly productive visit. RICE