Identifier
Created
Classification
Origin
08TOKYO2317
2008-08-22 07:40:00
CONFIDENTIAL
Embassy Tokyo
Cable title:
BLUE LANTERN LEVEL 3: POST-SHIPMENT END-USE CHECK
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C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 002317
SIPDIS
DEPARTMENT FOR DTCC - BLUE LANTERN COORDINATOR
E.O. 12958: DECL: 08/22/2018
TAGS: ETTC KOMC JA
SUBJECT: BLUE LANTERN LEVEL 3: POST-SHIPMENT END-USE CHECK
ON LICENSE 050050345
REF: SECSTATE 83174
Classified By: EMIN Robert F. Cekuta for reasons 1.4 b, d.
C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 002317
SIPDIS
DEPARTMENT FOR DTCC - BLUE LANTERN COORDINATOR
E.O. 12958: DECL: 08/22/2018
TAGS: ETTC KOMC JA
SUBJECT: BLUE LANTERN LEVEL 3: POST-SHIPMENT END-USE CHECK
ON LICENSE 050050345
REF: SECSTATE 83174
Classified By: EMIN Robert F. Cekuta for reasons 1.4 b, d.
1. (C) Japanese Ministry of Defense (MOD) officials informed
EconOff August 19 the U.S. exporter has terminated the
contract corresponding to this license. The Air Self Defense
Forces did not receive any of the contracted items, and so
have not conducted maintenance activities.
2. (C) The contract for this procurement was for Japanese
Fiscal Year 2006 and consisted of 126 night vision goggles
with a delivery deadline of February 26, 2008. Defense
Ministry officials said the contract was "closed" December
27, 2006. The delivery date was extended to March 31, 2008.
The agreement to terminate the contract was signed March 28,
2008.
3. (SBU) Defense Ministry officials report Fresco
International notified Science Technology Trading (STT),
MOD's contract partner, that it was not feasible to deliver
within the deadline. The reason given was that the
manufacturer of the goods, Aurora, had received a large order
from the USG and, as a result, had shifted its manufacturing
operations to meet the needs of the USG order. (NOTE: MOD
officials asked if USG could comment on the veracity of this
statement. End Note). As a result, Aurora reportedly could
not ship the goods ordered to Japan. In addition, the
optical amplifier tube for the NVD is no longer available.
4. (C) Post understands the National Police Agency is
currently investigating STT and, so we will need to
coordinate with local authorities before arranging a site
visit.
5. (U) Following is an MOD press release, dated November 15,
2007 and issued in English concerning STT.
Quote
MOD's action to an incident relating to the procurement of
night vision equipment for the Air Self Defense Forces.
1. In order to furnish Air Self Defense Forces bases with
136 units of Northrop Grumman's night vision equipment for
security purposes, MOD made a contract with Science
Technology Trading Co., Ltd (STT) in March 2006 (public/open
tender, contract amount: 41 million yen (approx. $370,000),
unit price approximately 300,000 yen (approx. $2,700).
2. In February this year, STT delivered 136 units of night
vision equipment based on the above contract. However, per
indication (advice) from outside, MOD made an inquiry to
Northrop Grumman and received response that the night
vision equipment supplied to MOD was not manufactured by
Northrop Grumman.
3. Based on the above fact, MOD will take procedures to
cancel the contract with STT, in accordance with MOD's
contract terms.
4. It is regrettable that such an incident occurred. MOD
will immediately inquire into the facts of the incident, find
out the cause, determine the final action and discuss
specific prevention measures.
End Text
6. (C) MOD officials informed EmbOff that while the
aforementioned contract was canceled, other STT contracts
remain in force. EmbOffs have examined documentation for the
transaction corresponding to the Fresco International/STT NVG
contract and determined that MOD received generic NVGs rather
TOKYO 00002317 002 OF 002
than the Northrop Grumman items specified in the MOD sales
contract. On November 5, 2007, the President of STT informed
MOD the NVGs were not manufactured by Northrop Grumman and
that STT would return all the money received plus a 10
percent penalty.
7. (C) Post does not know if the license number for the
fraud case under police investigation is the same as the
current Blue Lantern. We will continue to encourage MOD to
share information concerning STT activities.
SCHIEFFER
SIPDIS
DEPARTMENT FOR DTCC - BLUE LANTERN COORDINATOR
E.O. 12958: DECL: 08/22/2018
TAGS: ETTC KOMC JA
SUBJECT: BLUE LANTERN LEVEL 3: POST-SHIPMENT END-USE CHECK
ON LICENSE 050050345
REF: SECSTATE 83174
Classified By: EMIN Robert F. Cekuta for reasons 1.4 b, d.
1. (C) Japanese Ministry of Defense (MOD) officials informed
EconOff August 19 the U.S. exporter has terminated the
contract corresponding to this license. The Air Self Defense
Forces did not receive any of the contracted items, and so
have not conducted maintenance activities.
2. (C) The contract for this procurement was for Japanese
Fiscal Year 2006 and consisted of 126 night vision goggles
with a delivery deadline of February 26, 2008. Defense
Ministry officials said the contract was "closed" December
27, 2006. The delivery date was extended to March 31, 2008.
The agreement to terminate the contract was signed March 28,
2008.
3. (SBU) Defense Ministry officials report Fresco
International notified Science Technology Trading (STT),
MOD's contract partner, that it was not feasible to deliver
within the deadline. The reason given was that the
manufacturer of the goods, Aurora, had received a large order
from the USG and, as a result, had shifted its manufacturing
operations to meet the needs of the USG order. (NOTE: MOD
officials asked if USG could comment on the veracity of this
statement. End Note). As a result, Aurora reportedly could
not ship the goods ordered to Japan. In addition, the
optical amplifier tube for the NVD is no longer available.
4. (C) Post understands the National Police Agency is
currently investigating STT and, so we will need to
coordinate with local authorities before arranging a site
visit.
5. (U) Following is an MOD press release, dated November 15,
2007 and issued in English concerning STT.
Quote
MOD's action to an incident relating to the procurement of
night vision equipment for the Air Self Defense Forces.
1. In order to furnish Air Self Defense Forces bases with
136 units of Northrop Grumman's night vision equipment for
security purposes, MOD made a contract with Science
Technology Trading Co., Ltd (STT) in March 2006 (public/open
tender, contract amount: 41 million yen (approx. $370,000),
unit price approximately 300,000 yen (approx. $2,700).
2. In February this year, STT delivered 136 units of night
vision equipment based on the above contract. However, per
indication (advice) from outside, MOD made an inquiry to
Northrop Grumman and received response that the night
vision equipment supplied to MOD was not manufactured by
Northrop Grumman.
3. Based on the above fact, MOD will take procedures to
cancel the contract with STT, in accordance with MOD's
contract terms.
4. It is regrettable that such an incident occurred. MOD
will immediately inquire into the facts of the incident, find
out the cause, determine the final action and discuss
specific prevention measures.
End Text
6. (C) MOD officials informed EmbOff that while the
aforementioned contract was canceled, other STT contracts
remain in force. EmbOffs have examined documentation for the
transaction corresponding to the Fresco International/STT NVG
contract and determined that MOD received generic NVGs rather
TOKYO 00002317 002 OF 002
than the Northrop Grumman items specified in the MOD sales
contract. On November 5, 2007, the President of STT informed
MOD the NVGs were not manufactured by Northrop Grumman and
that STT would return all the money received plus a 10
percent penalty.
7. (C) Post does not know if the license number for the
fraud case under police investigation is the same as the
current Blue Lantern. We will continue to encourage MOD to
share information concerning STT activities.
SCHIEFFER