BLUE LANTERN RESPONSE: END-USE CHECKS ON

UNCLAS KUALA LUMPUR 000475 SIPDIS PM/DTTC - BLUE LANTERN COORDINATOR E.O. 12958: N/A TAGS: ETTC KOMC MY SUBJECT: BLUE LANTERN RESPONSE: END-USE CHECKS ON APPLICATION 050169578 AND LICENSES 050014102, 05-991017, AND 05-998006 REF: STATE 52703 ¶1. Pursuant to reftel request, Econoff in early June 2009 visited the office of TZ Glory to establish the bona fides of the company and determine if reftel application and licenses appeared legitimate. Two TZ Glory employees received Econoff at their office, which is located within the Plaza Ampang City office building in the Ampang Point area of Kuala Lumpur. TZ Glory's office is on the second floor of the approximately five-story building. TZ Glory's office only encompassed three small office spaces (including separate rooms for the Managing Director and the Director of Business Development),and the third room was for the remainder of the staff (Econoff observed two other probable employees, including a secretary; the company said it has five employees.) The company had a large formal sign outside in the hallway which appeared to have been there as long as the office had been in Ampang Point, which was approximately three years, according to Managing Director Major (Ret) Wan Izani Wan Ismail and Major (Ret) Khairul Anuar Endud. ¶2. TZ Glory was founded by Wan in 2004 after he retired early from the Royal Malaysian Air Force (RMAF). TZ Glory has been in its current location (Plaza Ampang City in Ampang suburb of KL) since 2004; the discrepancy with their older address in Selangor Daru Ehsan (Shah Alam) is that the latter address was the original location, but Wan and Khairul moved it to the Ampang area to be closer to the RMAF offices. Wan said that the company first sold aircraft-related parts to other Malaysian firms that had official contracts with RMAF; Wan and Khairul commented that this is a way to do business, but naturally more money is made by having a contract. However, TZ Glory's luck changed for the better when it was finally awarded a contract in 2007. The company uses Millennium Freight Sdn Bhd (also a Malaysian company) to ship imported parts and equipment to the RMAF. If the purchased parts or equipment -- such as electronics -- are small enough, Wan and Khairul said that they will sometimes themselves pick up them up at the airport and take them to the appropriate Malaysian Ministry of Defense (MOD) or RMAF office. However, Millennium handles any freight large or bulky, and the firm is very familiar to TZ Glory. Wan and Khairul commented that, unfortunately, RMAF orders had slowed starting in 2007 and business had only been "fair" in 2008 and 2009. Wan explained that the name of TZ Glory originated from the nickname for his wife (TZ) and that the founding date of the company (25 June 2004) is his wife's birthday. ¶3. Wan and Khairul provided original copies of purchase orders for Econoff to examine of the application (ODS Control Unit) as well as a photocopy of the purchase order for Econoff to keep. Econoff examined several other purchase orders, of various deals, including the reftel licenses (servo valves and heat exchangers). Econoff also received a purchase order that the company was awaiting approval from the USG - a damper for Blackhawk helicopters, which are in the RMAF inventory. Wan and Khairul said that they were familiar with the United States Munitions List (USML) items and the prohibition against unauthorized re-transfers and re-exports. ¶4. For the record, both Wan and Khairul said they had both previously traveled to the U.S.; Khairul for business in the late 1990's as part of his RMAF active duty when he was the chief maintenance officer for the RMAF squadron that flies F-18 Hornet fighter aircraft was training in the Philadelphia area. Khairul had many pictures in his office of the squadron, pilots, F-18s in Malaysia, and of the squadron undergoing instruction in Philadelphia. His familiarity of that city, plus Crystal City in the Washington, DC area was obviously real. Khairul said that he spent three years in the U.S. as part of the extensive workup program for their F-18 squadron. Wan received a degree in mechanical engineering degree from Louisiana State University (LSU) in Baton Rouge where, by chance, is where Econoff attended. Without informing Wan about Econoff's familiarity with the university/city, Econoff was able to subtly test Wan on his knowledge of the area. His story checked out and it was obvious that he had spent significant time there (1981-1984). ¶5. Both officials had business cards and welcomed follow-on contact. Both officials spoke very good English, particularly Director of Business Development Khairul. Both were helpful, knowledgeable, and familiar with U.S. laws and regulations. We assess that TZ Glory -- although in a small office -- is a legitimate Malaysian company. We found no concerns regarding end-use checks of the aforementioned application and licenses. ¶6. Separately, the RMAF point-of-contact from reftel, Lt. Col. Zainal Abdul Manaf, confirmed to Econ FSN that the RMAF had ordered the parts from reftel and was familiar with the company, TZ Glory. He was personally unable to confirm that the parts had arrived at RMAF, but he was familiar with the terms of the licenses and application. Separately, Econoff confirmed during the early June meeting with Wan and Khairul that each was familiar with Lt. Col. Zainal; Econoff asked for the name of the RMAF poc, and they named Zainal without prompting from Econoff. RAPSON