Identifier
Created
Classification
Origin
09AITTAIPEI630
2009-05-27 08:58:00
UNCLASSIFIED
American Institute Taiwan, Taipei
Cable title:
TAIWAN: RESULTS OF BLUE LANTERN PRE-LICENSE 050169368
how-toVZCZCXYZ0008 RR RUEHWEB DE RUEHIN #0630 1470858 ZNR UUUUU ZZH R 270858Z MAY 09 FM AIT TAIPEI TO SECSTATE WASHDC 1652
UNCLAS AIT TAIPEI 000630
SIPDIS
STATE FOR EAP/TC, PM/DTCC AND ISN/MTR
PM/DTCC FOR BLUE LANTERN COORDINATOR TIM MAZZARELLI
E.O. 12958: N/A
TAGS: ETTC KOMC TW
SUBJECT: TAIWAN: RESULTS OF BLUE LANTERN PRE-LICENSE 050169368
REF: STATE 48504
UNCLAS AIT TAIPEI 000630
SIPDIS
STATE FOR EAP/TC, PM/DTCC AND ISN/MTR
PM/DTCC FOR BLUE LANTERN COORDINATOR TIM MAZZARELLI
E.O. 12958: N/A
TAGS: ETTC KOMC TW
SUBJECT: TAIWAN: RESULTS OF BLUE LANTERN PRE-LICENSE 050169368
REF: STATE 48504
1. Summary: Based on information obtained from the Ministry of
National Defense and site visit to the consignee, EZO Corporation
(EZO),it appears that EZO is a reliable recipient of USML items.
End summary.
Ministry of National Defense
--------------
2. Lieutenant Colonel Wang from the 202 Arsenal Military of National
Defense confirmed the order of subject items: one advanced weapon
boresight system and one compact field tester. Wang also stated
that the importer of the commodities is EZO.
EZO Corporation
--------------
3. On May 20, AIT met with Daniel Chang, Manager, and Sophia Chang,
Vice President, of EZO. EZO is a trading company/importer owned by
the brother-sister team.
4. EZO is a family-owned company with about eight (8) employees.
It had up to 25 employees last year but the economic downturn forced
the company to trim its payroll. The company started in 1985 under
the name of Grancosmos. In 2002, it merged with Union Systems, Inc.
and operated under the name of Union Systems. (Union Systems was
established in 1998 by the Changs.) In 2003, Union Systems changed
its name to EZO. AIT reviewed corporate registration documents and
confirmed the above facts.
5. EZO's main business is to import infrared cameras and related
testing equipment for military, hospital, electronics, steel and
petrochemical clients.
6. The Changs stated that EZO has had several end-use visits
related to imports of dual-use items from the United States. This
is the first AIT visit related to imports of munitions items. The
Changs stated that they imported munitions items from the U.S. when
they operated their business under the names Grandcosmos and Union
Systems. AIT received a State Department license issued in 1997 for
export of one set of MilCAM-MV with 100 mm lens from Inframetrics
for use by 402 Arsenal, Ministry of National Defense.
7. With respect to imports of subject items, AIT reviewed the
contract between 202 Arsenal, Military of National Defense, and
Innova Technology and Management (Innova) for the procurement of the
subject items. The Changs explained that, due to Taiwan procurement
and tax rules, Innova bids on government contracts but EZO does the
buying and importing of the items. Innova also opens letters of
credit with the foreign seller, when required to do so by the
seller. AIT reviewed email correspondence between EZO and CI
Systems, Inc. (the U.S. seller) explaining the letter of credit
process. In the emails, Innova is referred to as a "sister company"
of EZO. In fact, the two companies are not legally related; rather,
the Changs have a minority stake in Innova, and the majority owners
in Innova have a minority interest in EZO. The Changs explained
that neither party interferes in each others' operations; that they
are "silent partners" for financial support purposes.
8. The Changs explained that EZO does not warehouse any imported
item. The company delivers the items directly to its clients. For
military items, a military representative, Daniel Chang, and an
"auditor" unpack the shipment together, verify the content, take
pictures of the items, and then assemble the items, if necessary.
9. While the risk of diversion by EZO is minimal, AIT notes that
the record-keeping by the Changs and their ability to recall facts
related to company history and past experience in dual-use and
munitions licensing was lacking. AIT advised that they do a better
job in keeping thorough records and institute a system that would
make it easier to find records. AIT informed the Changs that all
parties to a transaction, including the government contractor and
importer, if they are different, need to be noted on a license
application. They said they would do a better job in relaying all
information to U.S. exporters.
10. The Changs stated that, because they have had experience in
importing both dual-use and munitions items, they are very familiar
with the restrictions on reselling, transferring, or re-exporting
U.S. controlled items.
YOUNG
SIPDIS
STATE FOR EAP/TC, PM/DTCC AND ISN/MTR
PM/DTCC FOR BLUE LANTERN COORDINATOR TIM MAZZARELLI
E.O. 12958: N/A
TAGS: ETTC KOMC TW
SUBJECT: TAIWAN: RESULTS OF BLUE LANTERN PRE-LICENSE 050169368
REF: STATE 48504
1. Summary: Based on information obtained from the Ministry of
National Defense and site visit to the consignee, EZO Corporation
(EZO),it appears that EZO is a reliable recipient of USML items.
End summary.
Ministry of National Defense
--------------
2. Lieutenant Colonel Wang from the 202 Arsenal Military of National
Defense confirmed the order of subject items: one advanced weapon
boresight system and one compact field tester. Wang also stated
that the importer of the commodities is EZO.
EZO Corporation
--------------
3. On May 20, AIT met with Daniel Chang, Manager, and Sophia Chang,
Vice President, of EZO. EZO is a trading company/importer owned by
the brother-sister team.
4. EZO is a family-owned company with about eight (8) employees.
It had up to 25 employees last year but the economic downturn forced
the company to trim its payroll. The company started in 1985 under
the name of Grancosmos. In 2002, it merged with Union Systems, Inc.
and operated under the name of Union Systems. (Union Systems was
established in 1998 by the Changs.) In 2003, Union Systems changed
its name to EZO. AIT reviewed corporate registration documents and
confirmed the above facts.
5. EZO's main business is to import infrared cameras and related
testing equipment for military, hospital, electronics, steel and
petrochemical clients.
6. The Changs stated that EZO has had several end-use visits
related to imports of dual-use items from the United States. This
is the first AIT visit related to imports of munitions items. The
Changs stated that they imported munitions items from the U.S. when
they operated their business under the names Grandcosmos and Union
Systems. AIT received a State Department license issued in 1997 for
export of one set of MilCAM-MV with 100 mm lens from Inframetrics
for use by 402 Arsenal, Ministry of National Defense.
7. With respect to imports of subject items, AIT reviewed the
contract between 202 Arsenal, Military of National Defense, and
Innova Technology and Management (Innova) for the procurement of the
subject items. The Changs explained that, due to Taiwan procurement
and tax rules, Innova bids on government contracts but EZO does the
buying and importing of the items. Innova also opens letters of
credit with the foreign seller, when required to do so by the
seller. AIT reviewed email correspondence between EZO and CI
Systems, Inc. (the U.S. seller) explaining the letter of credit
process. In the emails, Innova is referred to as a "sister company"
of EZO. In fact, the two companies are not legally related; rather,
the Changs have a minority stake in Innova, and the majority owners
in Innova have a minority interest in EZO. The Changs explained
that neither party interferes in each others' operations; that they
are "silent partners" for financial support purposes.
8. The Changs explained that EZO does not warehouse any imported
item. The company delivers the items directly to its clients. For
military items, a military representative, Daniel Chang, and an
"auditor" unpack the shipment together, verify the content, take
pictures of the items, and then assemble the items, if necessary.
9. While the risk of diversion by EZO is minimal, AIT notes that
the record-keeping by the Changs and their ability to recall facts
related to company history and past experience in dual-use and
munitions licensing was lacking. AIT advised that they do a better
job in keeping thorough records and institute a system that would
make it easier to find records. AIT informed the Changs that all
parties to a transaction, including the government contractor and
importer, if they are different, need to be noted on a license
application. They said they would do a better job in relaying all
information to U.S. exporters.
10. The Changs stated that, because they have had experience in
importing both dual-use and munitions items, they are very familiar
with the restrictions on reselling, transferring, or re-exporting
U.S. controlled items.
YOUNG