BLUE LANTERN LEVEL 3: PRE-LICENSE END-USE CHECK

UNCLAS STATE 018013 SIPDIS SIPDIS COLOMBO FOR BLUE LANTERN POC COLOMBO FOR ROBERT GABOR ECON COLOMBO FOR MICHAEL DETAR POL E.O. 12958: N/A TAGS: ETTC KOMC CE SUBJECT: BLUE LANTERN LEVEL 3: PRE-LICENSE END-USE CHECK ON APPLICATIONS 050087594, 050087851, AND 050087858 REF: BLUE LANTERN GUIDEBOOK 2006 ¶1. This is an Action Request. See paragraphs 2-4. ¶2. The Department's Office of Defense Trade Controls Compliance (PM/DTCC) requests post's assistance in conducting a pre-license check on applications 050087594, 050087851, and 050087858 for the export of night vision goggles (NVGs) to Sri Lanka. Post is requested to complete this Blue Lantern check within 30 days. Lack of response to a Blue Lantern check will affect pending and future applications involving parties to this license. ¶3. Reason for request: end-users' irregular licensing history, need to verify end-use, and possible unauthorized brokering activity. Pursuant to Section 699G(a) of the FY 2008 Foreign Operations Appropriations Act, it is Department policy to deny licenses for the export of defense articles and services to Sri Lanka unless it meets the exception in the statute for maritime and air surveillance and communications. Post should make appropriate inquiries to confirm the legitimacy of the proposed transactions and to verify that they meet the carve-out described above. PM/DTCC has approved four previous licenses during 2007 for the export of a total of 124 night vision goggles to Sri Lanka for maritime and air surveillance. The supporting documentation for these new, pending applications includes relatively old and perhaps duplicate purchase orders and end-use statements. It is unclear how many night vision goggles Sri Lanka legitimately needs in order to conduct maritime and air surveillance. In addition to these issues, foreign intermediate consignee LCW Holdings (PVT) Ltd. appears to be acting as a broker in these proposed transactions. However, the company is not registered with the Department's Directorate of Defense Trade Controls (PM/DDTC) as a broker of United States Munitions List (USML) parts, as required by U.S. law. LCW Holdings has appeared on only four previous license applications (all involving the Sri Lankan MOD),and its bona fides have never been verified by a Blue Lantern check. ¶4. Post should make appropriate inquiries to confirm the legitimacy of the proposed transaction and to verify that these proposed transactions meet the carve-out described above. In addition, post should make appropriate inquiries to verify the bona fides of LCW Holdings, to determine whether the company is acting as a broker in this proposed transaction, and to determine whether the company is aware that U.S. law requires brokers of USML items to register with PM/DDTC. The following questions are provided as suggested guidance: For the Sri Lanka Navy/Air Force: --Did you order from LCW Holdings the exact type and quantity of items listed on these applications? --For what end-use will the night vision goggles (NVGs) be used? --How many NVGs does the Sri Lanka Navy/Air Force need in order to conduct maritime/air surveillance? --Has the Sri Lanka Navy placed five different orders for M963 NVGs during the last half year (four orders for 50 NVGs and one order for 20 NVGs)? If so, why were separate orders placed instead of one larger order? Is this common practice? --Is LCW Holdings an official supplier/contractor for the Sri Lankan MOD? Does the Sri Lankan MOD have any other contracts with the company? For LCW Holdings: --Please describe your role in this proposed transaction. --Does the company have proper supporting documentation, including a contract from the Sri Lanka Navy/Air Force, for this proposed transaction? --Does the company understand the restrictions on United States Munitions List (USML) items, especially the prohibition against unauthorized re-transfers and re-exports? Does the company understand that USML items may be used only for the specific purpose stated on the export license? --If serving as a broker in this proposed transaction, are you aware that U.S. law requires brokers of USML items to register with the State Department and to obtain prior authorization for many brokered transactions? --Will the company be handling or storing the items listed on the application? If so, does it have secure facilities and proper accounting and security procedures for handling these sensitive USML items? --When was the company established and who are its principals? --What types of organizations are among its typical customers and where are the customers located? ¶5. For background, the following details of the license in question are provided: ¶A. DTC Case: 050087594 QUANTITY/COMMODITY: 5 M949 Gen III Aviators Night Vision Goggles with standard accessories and test data sheets - FOM less than 1250 License Value: USD 55,000.00 SELLER: Nightline, Inc. 10705 SW 104 St Miami, FL 33176 Company contact: Cris Bartolomeo, tel. 423-727-5900 FOREIGN INTERMEDIATE CONSIGNEE: LCW Holdings (Pvt) Ltd. 108B Maya Avenue Colombo 06 Sri Lanka Tel.: 0094 11 2597062 Fax: 0094 112597061 E-mail: lcwek@sltnet.lk (COMMENT: According to the license application, the company is placing the order with Nightline. They will not receive the goods. Items will ship directly to end user. END COMMENT.) FOREIGN CONSIGNEE: Commander of Sri Lanka Air Force Air Force Headquarters Chitthapalam A Gardiner Mawatha Colombo 02 Sri Lanka FOREIGN END-USER: Same as Foreign Consignee PURPOSE: To support and enhance air surveillance of the Sri Lankan Air Force ¶B. DTC Case: 050087851 QUANTITY/COMMODITY: 50 M963 Gen III Single Tube Night Vision Goggle AN/PVS-7B with standard accessories and test data sheets - FOM not to exceed 1250 License Value: USD 136,750.00 SELLER: Nightline, Inc. 10705 SW 104 St Miami, FL 33176 Company contact: Cris Bartolomeo, tel. 423-727-5900 FOREIGN INTERMEDIATE CONSIGNEE: LCW Holdings (Pvt) Ltd. 108B Maya Avenue Colombo 06 Sri Lanka Tel.: 0094 11 2597062 Fax: 0094 112597061 E-mail: lcwek@sltnet.lk (COMMENT: According to the license application, the company is placing the order with Nightline. Goods will be shipped directly to end user. END COMMENT.) FOREIGN CONSIGNEE: Sri Lanka Commander of the Navy Naval Headquarters Upper Chatham Street Colombo 01 Sri Lanka FOREIGN END-USER: Same as Foreign Consignee PURPOSE: To support and enhance the maritime surveillance capabilities of Sri Lanka ¶C. DTC Case: 050087858 QUANTITY/COMMODITY: 50 M963 Gen III Single Tube Night Vision Goggle AN/PVS-7B with standard accessories and test data sheets - FOM not to exceed 1250 License Value: USD 136,750.00 SELLER: Nightline, Inc. 10705 SW 104 St Miami, FL 33176 Company contact: Cris Bartolomeo, tel. 423-727-5900 FOREIGN INTERMEDIATE CONSIGNEE: LCW Holdings (Pvt) Ltd. 108B Maya Avenue Colombo 06 Sri Lanka Tel.: 0094 11 2597062 Fax: 0094 112597061 E-mail: lcwek@sltnet.lk (COMMENT: According to the license application, the company is placing the order with Nightline. Goods will be shipped directly to end user. END COMMENT.) FOREIGN CONSIGNEE: Sri Lanka Commander of the Navy Naval Headquarters Upper Chatham Street Colombo 01 Sri Lanka FOREIGN END-USER: Same as Foreign Consignee PURPOSE: To support and enhance the maritime surveillance capabilities of Sri Lanka ¶6. Submitted in support of the license application were the following documents (PM/DTCC can fax documentation to post upon request): ¶A. --Nontransfer and Use Certificate (Form DSP-83),signed by L.C.W. Ekanayake, Managing Director, LCW Holdings, dated 20 Nov 2007; signed by Air Cdr. Tatfw Gunanardana, dated 26/11/2007; and signed by Major General W.P.P. Fernando USP, psc, Military Liaison Officer, Ministry of Defense, dated 26/12/2007 --End User Certification Form from Sri Lanka Air Force Headquarters concerning contract/purchase order number KA-5021 dated 05 October 2007, signed by TLW Dissanayake, Director Logistics, undated --Purchase order no. KA-5021 (revised) from LCW Holdings to Nightline, signed by Lt. Col. L.C.W. Ekanayake, Managing Director, undated --Product brochure, including photographs and technical specifications ¶B. --Nontransfer and Use Certificate (Form DSP-83),signed by L.C.W. Ekanayake, Managing Director, LCW Holdings, dated 27/12/2007; signed by (illegible),dated 04/01/2008; and signed by Major General W.P.P. Fernando USP, psc, Military Liaison Officer, Ministry of Defense, dated 10/01/2008 --End User Certification Form from Sri Lanka Navy Headquarters concerning contract/purchase order number DPC/1352/07/FP dated 30 November 2007, signed by D. Perera, Commander (S) SLN, dated 28 December 2007 --Purchase order no. DPC/1352/07/FP from LCW Holdings to Nightline, signed by Lt. Col. L.C.W. Ekanayake, Managing Director, undated --Product brochure, including photographs and technical specifications ¶C. --Nontransfer and Use Certificate (Form DSP-83),signed by L.C.W. Ekanayake, Managing Director, LCW Holdings, dated 12 April 2007; signed by (illegible),dated 04/01/2008; and signed by Major General W.P.P. Fernando USP, psc, Military Liaison Officer, Ministry of Defense, dated 10/01/2008 --End User Certification Form from Sri Lanka Navy Headquarters concerning contract/purchase order number DPC/1373/07/FP dated 30 November 2007, signed by D. Perera, Commander (S) SLN, dated 28 December 2007 --Purchase order no. DPC/1373/07/FP from LCW Holdings to Nightline, signed by Lt. Col. L.C.W. Ekanayake, Managing Director, undated --Product brochure, including photographs and technical specifications ¶7. Please slug reply for PM/DTCC - BLUE LANTERN COORDINATOR and include the words "Blue Lantern" and the case number in the subject line. POC is Judd Stitziel, PM/DTCC, Phone: 202-663-3455; email: StitzielJD@state.gov; SIPRNET: StitzielJD@state.sgov.gov. The Blue Lantern Guidebook (ref) is available as a PDF file in the Bunche Library's Electronic Library collection on the DOS Intranet: http://virtuallibrary.state.gov/ BlueLanternGuidebook2006%2520 final .pdf ¶8. Department is grateful for post's assistance in this matter. RICE