JAPAN BLUE LANTERN LEVEL 3: PRE-LICENSE CHECK ON

UNCLAS TOKYO 001624 SENSITIVE SIPDIS PM/DTCC - BLUE LANTERN COORDINATOR E.O. 12958: N/A TAGS: ETTC KOMC JA SUBJECT: JAPAN BLUE LANTERN LEVEL 3: PRE-LICENSE CHECK ON APPLICATION 050099140 REF: STATE 46643 SENSITIVE BUT UNCLASSIFIED. CONTAINS PROPRIETARY INFORMATION. ¶1. (SBU) This Blue Lantern involves a company which has been suspended by the Ministry of Defense from bidding on contracts due to over charging. The company is selling to MOD via a third company which was not listed on the original license. ¶2. (SBU) Yamada Corporation executives told EconOff during a May 16 meeting that they have been indefinitely suspended from bidding on contracts for the Ministry of Defense (MOD) because they over charged a previous contract with MOD. On May 22, MOD officials confirmed the Yamada Corporation suspension and told EconOff that Yamada could be reinstated at a future time if they refund the overcharge from the previous contract. ¶3. (SBU) Yamada Corporation executives told EconOff that they were not selling directly to MOD on this contract, but were selling to NEC; NEC is selling the products to MOD, Yamada executives said. As such, Yamada Corporation has no contract with MOD, they explained. ¶4. (SBU) According to NEC Aerospace and Military Articles Department of Planning Division Manager Takeshi Mori, the company ordered an overhaul kit for the Nautis-M data system. However, because of the suspension of the contract with Yamada Corporation, the Japanese Maritime Self Defense Force cancelled the order. Nevertheless, the contract with the U.S. company was not cancelled. The batteries are still listed on the transaction, although they are no longer need, NEC officials explained. Ministry of Defense Equipment Policy Division Deputy Director Shinji Sato told EconOff June 12 that NEC misrepresented this information. Sato said that in fact, there never was a contract for the lithium batteries. Subsequently, Post contacted NEC again and executives there told us that actually a MSDF official told them verbally the batteries would be needed. ¶5. (SBU) As NEC is not listed on the the original cable, there is no contact information. To ensure accuracy in contacts, the company Post contacted is located at 1-10 Nishhin-cho, Fuchu City, Tokyo Japan 183-8501 and the phone number is 042-333-1072. The website is: http://www.nec.com ¶6. (SBU) On June 2, Equipment Policy Division Deputy Director Sato confirmed that MOD had ordered all the items in this order except the lithium batteries. SCHIEFFER