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

S E C R E T SECTION 01 OF 02 STATE 035685 SIPDIS SENSITIVE SIPDIS AIT TAIPEI FOR MATTHEW O'CONNOR AND MI-YONG KIM E.O. 12958: DECL: 11/26/2017 TAGS: ETTC KOMC TW SUBJECT: BLUE LANTERN LEVEL 3: PRE-LICENSE END-USE CHECK ON APPLICATION 05-050095481 REF: A. A.2006 BLUE LANTERN GUIDEBOOK ¶B. B. FBI IIR 4 212 0899 08 DATED 26 NOV 07 Classified By: MULTIPLE SOURCES ¶1. (U) This is an Action Request. See paragraphs 2-4. ¶2. (U) The Department's Office of Defense Trade Controls Compliance (PM/DTCC) requests AIT Taipei's assistance in conducting a pre-license check on application 05-050095481 for the export of defense hardware to Taiwan. AIT Taipei is requested to complete this Blue Lantern inquiry within 30 days. Lack of response to a Blue Lantern inquiry will affect pending and future licenses involving parties to this license. ¶3. (S) Reason for request: A classified report (ref B) has raised concerns that United States Munitions List (USML) items could be diverted to China by the foreign intermediate consignee. The report stated that Terence Hou, founder and owner of Tri-Force International Inc., commutes between China, Taiwan, and the United States. Hou, whose company is a supplier of spare parts and repair in the international aviation industry, will reportedly assume the position of Executive Vice President of U.S. subsidiary Navitone Technologies, Inc. located in Shanghai, China. As such, he will be responsible for China and expansion into Taiwan. ¶4. (U) Action Request: Department requests that AIT Taipei establish the bona fides of Tri-Force International, Inc. as a responsible recipient of United States Munitions List (USML) items. Conduct a site visit to assess the company's reliability as a recipient of USML articles, and assess its operations and on-site security. Emphasize that the unauthorized re-export or retransfer of USML items is strictly prohibited. Department further requests that AIT Taipei contact End-User Navy Combat System Facility, Kaosiung, and determine whether or not that entity placed an order for the items listed below for the purpose stated on the application. The following questions provide suggested guidance: (To Tri-Force International, Inc.) - Please confirm an order to be shipped under license 05-050095481. - How long has your company been in the business of importing and selling defense articles? What other products are sold by your company? Does your company do business (or �A;has it done business) under any other names? - Does your company conduct business involving USML articles in other locations in Taiwan or in any other countries? If so, where? If your company has offices overseas, where are they located? - Are you familiar with the restrictions against the unauthorized re-export or retransfer of U.S.-origin defense articles? (To Navy Combat System Facility) - Please confirm that you ordered the items listed on license application 05-050086782. What is the end-use of these USML items? - How long have you done business with Tri-Force International? And, with Terence Hou? - What is the specific role of this firm in this transaction? End Action Request. ¶5. (U) Details of license application: STATE 00035685 002 OF 002 DTC Case: 05-050095481 QUANTITY/COMMODITY: 2 SFD354H Magnetrons & Unclassified Technical Data related to Customer Source Inspection License Value: USD $31,280. SELLER: Communications and Power Industries Beverly Microwave Products Division 150 Sohier Road Beverly, MA 01915 FOREIGN INTERMEDIATE CONSIGNEE: Tri-Force International, Inc. 3F-1, No. 151, Hsin-Yi Road, Sec.4 Taipei 106 Taiwan Tel: (02)2702-2023 Fax: (02)2703-0442 Email: trifors@ms15.hinet.net FOREIGN CONSIGNEES: Navy Combat System Facility P.O.Box 90197 No. 20, Je-So Road, Tsoying Kaohsiung Taiwan END-USER: Navy Combat System Facility P.O. Box 90197 No. 20, Je-So-Road, Tsoying Kaohsiung Taiwan PURPOSE: To be used as spare parts in STIR Radar Equipped on Knox Class Frigates (Acquired From United States): Serial Numbers FF937 and FF939. ¶6. (U) Submitted in support of the license application were the following documents (PM/DTCC will fax documentation to AIT Taipei upon request): -- End-Use/End-User Statement from Navy Combat System Facility dated 17 March 2008 -- Tri-Force International, Inc. Purchase Order No. TF-PK97017P dated 7 March 2008 ¶7. (U) 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 Rachael-Therese S. Joubert-Lin, Phone: 202-663-2950; Email: JoubertLinRS@state.gov; SIPRNET: JoubertLinRS@state.sgov.gov. The Blue Lantern Guidebook (ref) is available as a PDF file in the Bunche Library's E-Book Collection on the DOS Intranet: http://buncheelectroniclibrary.state.gov/eboo ks/ BlueLanternGuidebook2006%20 final .pdf ¶8. (U) Department is grateful for AIT Taipei's assistance in this matter. RICE