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
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