BLUE LANTERN: BROKER INQUIRY K-2342

UNCLAS CANBERRA 000968 SENSITIVE SIPDIS STATE FOR PM/DTCC JOUBERT-LINEEB AND EAP/ANZ E.O. 12958: N/A TAGS: ETTC KOMC AS SUBJECT: BLUE LANTERN: BROKER INQUIRY K-2342 REF: SECSTATE 93561 ¶1. (SBU) The Political/Economic Section of U.S. Consulate Sydney spoke with WARWICK LORENZ, managing director of AUSTRALIAN PUMP INDUSTRIES PTY LTD by phone on October 21, 2009. The following information is intended to answer questions in reftel: -- Confirm that this entity is in the business of brokering defense articles and defense services at the location(s) indicated under its legal name(s); A: Lorenz confirmed the legal name of his company and its address: 7 Gladstone Road, Castle Hill, NSW, Australia. Lorenz also confirmed he is the sole director of the company which was established in 1993 and employs 38 people. The company manufactures and distributes pumps. Lorenz told our office his company is registered as a broker for goods for services controlled by U.S. export control laws - either in Australia or exported through Australia. However, he questions whether his company needs to be registered. He says Australian Pump is not in the business of brokering, but rather acts as a distributor for American companies. He said his company deals with Davidson Pumps and Power Systems, the latter of which suggested he register his company. Lorenz asked our office for clarification on the definition of broker. He was directed to www.pmddtc.state.gov for more information. -- Determine whether this entity is authorized to conduct such activities in its home country, whether the entity has any criminal or other derogatory background, and whether Post has any information on its brokering or arms export activities that may involve proscribed entities such as countries under U.S. or international sanctions, or designated state sponsors of terrorism; A: There is no legal requirement for an entity to be licensed or reviewed by the Australian Defence Export Control Office for brokering services. However, DECO did agree to run this entity through its database. DECO confirms that Australian Pump Industries PTY LTD has applied for and been granted export licenses by the Australian government in the past. -- Will the brokering firm be handling or storing USML items on behalf of its clients? If so, does it have secure facilities and proper accounting and security procedures for handling sensitive USML items? A: Lorenz advised that the items are normally passed straight through to the Department of Defense and are held for a couple of days at the most. He says his company has secure facilities to hold such items. API also has a repairs facility to conduct work for the Australian Navy which is also located in the secure area. Lorenz says that the company's special accounting and security procedures are specified by the Australian Navy. -- What is the nature of its business and what other types of items does it handle? A: API is a pump manufacturer and distributor; it has a specialized division that focuses on defense support. -- What types of organizations are among its typical clients and in what countries are they located? A: Australian military clients for defense purposes. The company also sells to commercial agricultural, mining and construction clients. Commercial sales do not use items imported from the U.S. -- Does the company understand the restrictions on USML items, especially the prohibition against unauthorized re-transfers and re-exports? A: Lorenz claims to have a full understanding of U.S. export control regulations and that API complies with all requirements. ¶2. (SBU) Please advise if follow-up questions are necessary to Q2. (SBU) Please advise if follow-up questions are necessary to verify the bona fides of this individual or entity. ¶3. (SBU) Due to constraints on post resources, post was unable to schedule a site visit to this entity within the proscribed time period.