DEMARCHE REQUEST: POSSIBLE UNAUTHORIZED

C O N F I D E N T I A L STATE 092567 SIPDIS STOCKHOLM FOR RICHARD LAROCHE ECON E.O. 12958: DECL: 08/26/2016 TAGS: ETTC KOMC SW SUBJECT: DEMARCHE REQUEST: POSSIBLE UNAUTHORIZED RETRANSFER OF BELL 212 HELICOPTERS REF: A. WATKINS-MCDOWELL-LAROCHE EMAILS JULY 2008 B. STOCKHOLM 423 C. 2006 STOCKHOLM 243 D. 2005 STOCKHOLM 1867 E. 2005 STATE 184935 Classified By: PM/DTCC Director David Trimble, Reasons 1.4(B)(D) ¶1. (U) This is an Action Request for Embassy Stockholm. Please see paragraph 5. -------------- SUMMARY -------------- ¶2. (U) Post recently obtained information that European Helicopter Service (EHS) Sweden may be planning to retransfer four Bell 212 helicopters to a third country without prior approval from the Department. EHS Sweden is in possession of four Bell 212 helicopters originally purchased from the Government of Israel in 2005. The retransfer was approved by Department via direct commercial sales (DCS),which limited EHS Sweden's geographic operation of the helicopters and end use for fire protection services. Department requests post notify appropriate Government of Sweden (GOS) agencies about the reported plans to transfer these helicopters and remind the GOS of the requirement for EHS Sweden to receive authorization from USG before any potential retransfer. -------------- BACKGROUND -------------- ¶3. (U) In 2005, the Government of Israel (GOI) requested to retransfer 16 Bell 212 helicopters; they were originally purchased by the GOI in the 1970s via direct commercial sale (DCS). In October 2005, the Department approved the retransfer of the helicopters to EHS Sweden via European Petrol Station GmbH (EPS) Germany with an approved end use limited to fire protection operations in Sweden, Norway, Denmark, and Germany in October 2005. Any leasing of these helicopters beyond these established parameters, or retransfer to different end-users, must be authorized by the Department, via a written request from EHS Sweden or EPS Germany. ¶4. (C) After approving the retransfer of 16 Bell 212 helicopters, Department received information from Embassy Stockholm in February 2006 (Ref C) raising questions regarding the final end use of the helicopters. As a result, Department halted the additional retransfer of helicopters from Israel to EHS Sweden via EPS Germany. According to the GOI, three helicopters were physically transferred to EPS Germany before the transactions stopped. New information from post in July 2008 from a confidential and apparently reliable source (Ref B) raises the level of concern that the retransfer of helicopters to an unauthorized third party may be imminent. ¶5. (C/REL to Sweden) Action request for Embassy Stockholm: - Request the GOS to investigate the current status and end use of the EHS Sweden Bell 212 helicopters; does EHS Sweden plan to sell the helicopters to a third party? - Remind EHS that the 2005 licensing approval limits helicopter use to Sweden, Norway, Finland, Denmark and Germany. (Note: EHS Sweden must receive authorization from the Department before retransferring such defense articles to a third party, per International Traffic in Arms Regulations (ITAR),Section 123.9 (a): "The written approval of the Directorate of Defense Trade Controls must be obtained before reselling, transferring, transshipping, or disposing of a defense article to any end user, end use or destination other than as stated on the export license." End Note.) - Prior information indicated that only three helicopters were transferred to EHS Sweden; however, recent data (Ref B) indicates four may have been retransferred. Can the GOS verify the exact number of Bell 212 helicopters, including serial numbers, that EHS Sweden received from Israel via EPS Germany? - The GOS should notify the appropriate domestic agencies (e.g. SAPO, Swedish Export Control Council, etc.) of the presence and status of these helicopters so they can be appropriately monitored and safeguarded against unauthorized retransfer. - Please remind GOS to notify USG should a retransfer appear imminent. END ACTION REQUEST ¶6. (U) Please slug reply for PM/DTCC Tim Watkins and EUR/NB ¶H. Martin McDowell. RICE