BLUE LANTERN LEVEL 2: PRE-LICENSE END-USE CHECK ON LICENSE

UNCLAS MONTEVIDEO 000730

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ETTC KOMC ES UY
SUBJECT: BLUE LANTERN LEVEL 2: PRE-LICENSE END-USE CHECK ON LICENSE
050200117

REF: STATE 119092; SAN SALVADOR 1108


1. (SBU) Emboffs conducted ref A Blue Lantern re-license check at
the main office of Glock America S.A. (Plaza Independencia 831,
Montevideo) on November 30. Emboffs were received by Glock America
Vice President Luiz Horta. Responses to reftel questions follow:




2. (SBU) Glock America was established in 2000 as a subsidiary of
Glock Austria, supplying pistols and accessories to Latin American
markets from Mexico through South America. The company has a
formal working relationship with Glock Inc. and Glock Austria.
Glock America does not have retail operations in Uruguay, but works
with a distributor in the local market.




3. (SBU) Glock America's principal officers are: President -
Brigitte Glock (daughter of Glock founder Gaston Glock),Vice
President - Luis Horta, and Director - Stephan Doerler. Luis Horta
is a former Major in the Brazilian special forces who claims strong
ties to military and security officials throughout the Latin
America and elsewhere.




4. (SBU) According to Horta, Glock America's annual sales are about
30,000 units (approximately $12 million),although due to close
ties with Glock Austria not all transactions are recorded on Glock
America's books. Primary customers include: Ministries of
Defense, Ministries of Interior and authorized representatives in
each country. Horta says Glock America does not work with brokers.
Glock America is licensed by the Uruguayan Ministry of Defense to
import weapons to Uruguay, but generally weapons are shipped
directly from the manufacturing location (Austria) to the
purchasing country. Horta stated that Glock America facilitates
the necessary import/export and end-use licensing paperwork issues
and get all appropriate authorizations to sell to different markets
in the region. Ultimately the end-user has to prove that they have
the required import permit or end-user certificate before the sale
is concluded. Horta stated that payment is either made to Glock
America directly or to Glock Austria which compensates them after
receiving full payment.




5. (SBU) Regarding purchase order No. 01/2009, Horta said that
COSASE placed their purchase order with his company, Glock America
S.A., which is Glock's authorized sales agent for El Salvador.
Horta said that COSASE first purchased from Glock America in 2007
and that this would be their third sale to them, each time
purchasing a similar number of handguns. Shipments to El Salvador
usually come directly from Austria. However, Horta indicated that
Glock Inc. in the U.S. had recently begun manufacture weapons at
its plant in Smyrna, Georgia and Glock America was assessing the
possibility of sourcing some South America purchases from the U.S.
instead of Austria. Glock America had not finalized sourcing for
the weapons for COSASE, but filed export/import and transit
paperwork for both options - weapons produced in Smyrna or weapons
produced in Austria and shipped through Miami. The pistols would
not be shipped through Uruguay. Horta is aware that U.S. sources
weapons still require licensing from Austria and is using this
purchase to work though the paperwork requirements that will be
needed in future transactions. COSASE will pay by wire transfer or
in cash to Glock Austria or Glock Inc. Horta said that the
transaction was for 210 pistols and that the total sales amount was
approximately $80,000, but the purchase order listed a price of $0
pending final invoice that would be determined when final sourcing
was established. NOTE: Subsequent to our meeting, Horta called
Emboffs to say his attorneys had informed him the export license
from the U.S. for the COSASE purchase had been denied. Horta
intends to complete the transaction with weapons manufactured and
shipped from Austria and will work with U.S. authorities to ensure
future applications are handled in accordance with requirements.
END NOTE.




6. (SBU) Horta said he is aware of both the regulations governing
the import of U.S.-origin defense articles, and the restrictions on
re-transfer and re-export.




7. (SBU) Embassy Commercial Assistant contacted Coronel Ruben
Rodriguez, National Weapons Registry Division Chief to make


inquiries on Glock America S.A. Rodriguez confirmed that Glock
America S.A. is legally permitted to import and sell firearms in
Uruguay as well as to broker the sales of firearms to other
countries. Rodriguez indicated that his office does not have any
information that would question Glock America S.A. as a recipient
of U.S. defense articles.




8. (SBU) COMMENT: Glock America is well-known, established and
respected Uruguayan company. The transaction with COSASE appears
legitimate and part of their regular business. Post assesses that
paperwork irregularities may be a result of this being Glock
America's first attempt to purchase Glock pistols manufactured in
the U.S. Horta seems to understand the steps and licensing
required for future transactions.
MATTHEWMAN