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.