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.

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PURPOSE OF TRIP AND MEMBERS OF BLUE LANTERN TEAM
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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.

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WARSAW COUNTRY TEAM MEETINGS
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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.

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COUNTRY TEAM TRAINING FOR IMPLEMENTING BLUE LANTERN AT POST
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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.

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DISCUSSIONS WITH OFFICE OF DEFENSE COOPERATION
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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.

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TEAM BRIEFS POLISH MOD REPRESENTATIVE
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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.

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BLUE LANTERN SITE VISIT TO WB ELECTRONICS
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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