PERU RESPONSE TO BLUE LANTERN LEVEL

C O N F I D E N T I A L LIMA 001426 SIPDIS E.O. 12958: DECL: 09/23/2019 TAGS: ETTC KOMC PE SUBJECT: PERU RESPONSE TO BLUE LANTERN LEVEL 3:POST-LICENSE/PRE-SHIPMENT END-USE CHECK ON LICENSE 050132068 REF: STATE 85081 Classified By: Deputy Chief of Mission James D. Nealon for reasons 1.4 (b) and (d). ¶1. (U) The following responds to the Department's Office of Defense Trade Controls Compliance (PM/DTCC) request for information on a post-license/pre-shipment check on license 050132068 for the export of pistols to Peru. ECON Officer visited the two Peru-based establishments involved in the transaction, Armeria Eagles and Logwin Air and Ocean Peru S.A., and spoke with their General Managers. ECON Officer also met with Peruvian Government officials at the Ministry of Interior. ARMERIA EAGLES -------------- ¶2. (U) ECON Officer visited the Armeria Eagles facility on September 11, 2009. Armeria Eagles is located in an office building shared by multiple businesses. To enter the building, a visitor must register at the front desk and carry a visitor's badge. Upon entering Armeria Eagles, one passes through a secured door and a secured gate. The facility includes a small showroom and the General Manager's office. There are no storage facilities on the premises. The Armeria Eagles General Manager greeted us and introduced us to his staff of four. He provided us with a copy of the company bylaws, the Peruvian Tax Agency Business Registration, license to sell arms, and the local municipality authorization to operate a business. Currently, Armeria Eagles imports weapons from Austria, Turkey, and the Czech Republic. ¶3. (U) Following are the responses: --When was your company established and who are its principals? Three partners established Armeria Eagles in ¶2000. The partners named on the bylaws document included Edgar Edilberto Quispe Ortiz, Nelson Espinoza Justiniano, and Khader Ode Jamis. Today, only Quispe Ortiz remains involved in the business. --What products and services does your company provide? Who are your regular customers and where do they reside? Armeria Eagles sells pistols, revolvers, rifles, bullets, mace, and accessories. The company provided us with a list of weapons sold over the course of the last six months. The list includes the following brands: Glock, CZ, Akkar, Baikal, Jaguar, Bersa, Tisas, and Kora Brno. The regular customers include security guards, police officers, hunters, and private citizens. Their customers reside in Lima. Armeria Eagles has a second location located outside of Lima in Huancayo. This location sells the same products to residents of Huancayo. --What are your annual sales of U.S.-origin firearms or other U.S.-origin defense articles? The company does not sell U.S. origin firearms at this time. The company reported minimal sells of other U.S.-origin defense articles, such as mace. --Are you familiar with the regulations governing the import of U.S.-origin defense articles, including restrictions on re-transfer or re-export? Yes, the four employees are familiar with the restrictions. LOGWIN AIR & OCEAN PERU S.A. -------------- ¶4. (U) ECON Officer visited Logwin on September 14. The company is located in a high rise building. Upon entry, visitors must register with the front desk. LOGWIN is a German company. Formerly, the company was known as Birkhardt. Birkhardt split into two entities, with Logwin taking one part of the business and Birk Trans remaining with the other half. Logwin has been located at the address, Victor Andres Belaunde 157, San Isidro for two weeks. This address differs from the one on the cable, which is the former address. ¶5. (U) Following are the responses: --When was your company established and who are its principals? The company was establish sixteen years ago. The principals include the Country Manager Nick Bonifaz Masias, the Financial Manager Manzur Aliosh, and the Regional Manager Max Bernaldo. --What products and services does your company provide? Who are your regular customers and where do they reside? Logwin provides international logistics and transportation services. Clients for the Peru office hail primarily from China, Japan, Korea, Germafo-QQUB*Qh> The Lima office handles shipments exclusively of spare auto parts and electronics. The company has not handled and does not have plans to handle shipments of dangerous cargo. --What is your role in this transaction? Will you ever have possession of the defense articles listed below? The Country Manager and the staff person handling transactions have no knowledge of Armeria Eagles, Valor Corporation, or a transaction regarding the shipment of firearms. --Are you familiar with the regulations governing the import of U.S.-origin defense articles, including restrictions on re-transfer or re-export? The Country Manager has had a career in international shipping and logistics and confirmed his knowledge of the restrictions. PERUVIAN GOVERNMENT AUTHORITIES -------------- ¶6. (U) ECON officer met with the Director General of the Ministry of Interior's Office of Control of Security Services, Arms Control and Munitions, and Explosives for Civilian Use (DICSCAMEC) on September 14. This Peruvian Government Authority oversees the importation and control of firearms. Under Peruvian law, the Ministry of Interior stores imported weapons until purchased. Upon the shipment's entry into Peru, a representative from DICSCAMEC and a representative from the importing company will inspect the cargo at the port. The shipment will then be transferred to the Ministry's storage facility. Once a purchaser receives a license to own and operate a handgun then the purchaser will visit the storage facility, and present the license and receipt, in exchange for the firearm. The purchaser must pay for the weapon upfront at the gun store and then proceed to obtain the proper licenses for the handgun being purchased. Peruvian law requires an individual to complete a background check, a psychological exam, and an operations and safety test in order to qualify for a gun license. A license allows a person to carry the weapon on his person, in a car, in his home, and concealed. The weapon may be carried throughout the country without further registration. DICSCAMEC requires monthly and quarterly reports to be completed by the gun suppliers. ¶7. (C) Following are the responses: --Is Armeria Eagles properly authorized to import and sell defense articles in Peru? Yes, the company has complied with all requirements. In Peru, a company receives authorization for two year periods. Armeria Eagles's authorization will expire in May 2010. --Do you have any information on Armeria Eagles that would question their reliability as a recipient of U.S. defense articles? Yes. The Director General asked to speak with us in confidence and relayed his serious concerns regarding Armeria Eagles. While the company has the proper licensing and authorization to sell firearms in Peru, the Director General raised serious concerns regarding the questionable clientele of the company. The Director General does not have substantive evidence of wrong-doing. Nonetheless, intelligence authorities have indicated a concern. DICSCAMEC has the company under close observation. The company raised red flags due to a higher than normal occurrence of administrative errors in the monthly and quarterly reports submitted to DICSCAMEC. The company has undergone Administrative hearings for errors in reporting, but at this time there is no evidence to support a criminal procedure. --Is Logwin Air & Ocean Peru S.A. properly authorized to import defense articles in Peru? DICSCAMEC has no knowledge of this company as an intermediary for importers of defense articles. --Do you have any information on Logwin Air & Ocean Peru S.A. that would question their reliability as a recipient of U.S. defense articles? No information. ¶8. (C) COMMENT: Armeria Eagles has the proper authorizations and licenses to sell firearms and munitions in Lima. The concerns raised by the Director General at DICSCAMEC should be considered sincere. However, given the lack of substantive evidence, we cannot recommend suspension of the license. We do recommend close monitoring. With respect to Logwin, more information will be needed to determine whether this company is in fact involved in the transaction. At this time, Post has no concerns regarding their operation in Peru. MCKINLEY