BLUE LANTERN RESPONSE ON PRE-LICENSE END-USE CHECK

UNCLAS KUALA LUMPUR 000986 SIPDIS PM/DTCC - BLUE LANTERN COORDINATOR E.O. 12958: N/A TAGS: ETTC KOMC MY SUBJECT: BLUE LANTERN RESPONSE ON PRE-LICENSE END-USE CHECK ON LICENSE 050196536 REF: SECSTATE 110736 ¶1. Pursuant to reftel inquiry, Econoff on 9 December 2009 conducted a site visit to Seri Aero Jaya (SAJ) Sdn Bhd and met with Director Zubir Ismail to learn more about SAJ and attempt to determine the legitimacy of the proposed purchase of aircraft parts for the Royal Malaysian Air Force (RMAF). SAJ's office is located within an older office building in a middle-class neighborhood. Zubir said that SAJ was founded by his father -- Mohamed Ismail -- in 1980, and moved to its current location at the address provided in reftel. Zubir said he has been working at the company for the past seven years. During a discussion of SAJ's business, clients, and portfolio, Zubir remarked that SAJ was focusing heavily on emergency/rescue and survival equipment to maximize its potential sales to the Malaysian military services. Zubir claimed that the sale of aircraft parts to the RMAF had become its second-tier focus, and that a relatively new expansion into the Malaysian oil and gas sector (namely with Petronas) was a much lower third-tier priority. Zubir commented that SAJ wanted to expand into the lucrative oil and gas sector, but this was a new effort for the company and it had to focus on selling aircraft parts to the RMAF to stay profitable. Zubir said SAJ had expanded its sales of emergency/rescue equipment to the RMAF, Royal Malaysian Navy, and the Malaysian Department of Civil Aviation. ¶2. Regarding the reftel inquiry, Zubir showed Econoff a contract from the RMAF dated December 2003 (valid through December 2011) that listed the types of aircraft for which SAJ could procure spares. Zubir said that SAJ had no foreign customer sales and fully understood the USML restrictions on the export or re-sale of U.S. origin military and aviation equipment. Zubir disclosed that SAJ is an importer of spare parts for the British-manufactured Hawk aircraft within the RMAF's inventory. However, SAJ does not re-export Hawk equipment. SAJ is also the RMAF's importer of equipment from another British company, Airborne Systems (formerly GQ Parachutes). Zubir said the primary RMAF office with which SAJ communicates is: RMAF Air Logistic HQ c/d KL Air Base Old Airport Road 50460 Kuala Lumpur Malaysia phone: (6-03) 2117-1133 ¶3. Econoff inquired into the reftel information that SAJ was attempting to import parts from a U.S. company, Feecorp, for aircraft and helicopters that are not in the RMAF's order-of-battle. Zubir said that this was a simple mistake, as he had been using a form letter from Feecorp that listed these other types of airframes (such as F-16 Falcons, AH-64 Apaches, etc.),and showed Econoff a series of letters between Feecorp and SAJ that indicated a series of corrections for SAJ's proposal to purchase aircraft parts from Feecorp for aircraft that the RMAF operated. The series of letters appeared normal and appeared to back-up Zubir's explanation. Zubir gave Econoff photocopies of this letter exchange, as well as a company profile of SAJ that provided many details on the company, including biographic data on Zubir, his father, and other employees. ¶4. Zubir inquired if Post could ask the status of a blanket license that SAJ applied for in May 2009, using a U.S. firm (CAMAR Aircraft Parts in Los Angeles, California). Econoff said he would include this information in Post's cable response as an fyi. Zubir appreciated this assistance, and said that he welcomed any follow-on contact from Econoff as needed. ¶4. Also pursuant to reftel, Econoff attempted to communicate with the RMAF, particularly Post's occasionally reliable contact Major Shafik (FNU) to inquire about SAJ. Unfortunately, phone calls to Major Shafik's office went unanswered, and no other RMAF contacts were available at this time. ¶5. Post assessment is that SAJ is a legitimate Malaysian company that procures aircraft parts for the RMAF. Without further information, it is impossible to determine if SAJ procures parts and sends them to destinations outside Malaysia. However, armed with the information we have available, we assess that SAJ's proposed business contract appears legitimate and the company was very cooperative. KEITH