BLUE LANTERN BROKER INQUIRY: CASE NO. K-2441

UNCLAS MUSCAT 000983 SIPDIS NEA/ARP PLEASE PASS TO PM/DDTC. POC IN PM/DDTC IS RACHAEL S. JOUBERT-LIN. E.O. 12958: N/A TAGS: ETTC KOMC MU SUBJECT: BLUE LANTERN BROKER INQUIRY: CASE NO. K-2441 REF: STATE 99569 ¶1. (SBU) This cable is in response to the Action Request in State ¶99569. ¶2. (SBU) POLE Chief, EconOff and DDTC Officer visited Anil Khimji of Khimji Ramdas, LLC (KR),regarding KR's brokering activities. Pursuant to the Action Request, Post determined that KR engages in some brokering activities of items listed on the United States Munitions List (USML). Such activities are rare and the end-user is always the government of Oman, usually the Ministry of Defense or Royal Oman Police (ROP). KR's brokering activities are highly regulated. For example, KR purchased handguns to be used by the ROP. Once the handguns reached Oman they immediately went into ROP custody without any further involvement by KR. KR does not physically handle or store items on the USML. ¶3. (SBU) KR is authorized by the relevant Omani authorities to conduct the activities in which it engages. KR is well-reputed and does not have any pending criminal charges. Post has no information and does not believe it likely that KR is engaging in arms export or brokering activities that may involve proscribed entities. ¶4. (SBU) KR was established in 1870 and has approximately 3,200 employees. The Board of Directors for KR is composed of the following individuals: Kanaksi Gakaldas Khimji, Chairman; Anil Mathradas Khimji, Director; Ajay Mathradas Khimji, Director; Pankaj Kanaksi Khimji, Director; Nailesh Kanaksi Khimji, Director; and Hritik Ajay Khimji, Director. Anil, Ajay, Pankaj and Nailesh manage the day-to-day activities of KR. ¶5. (SBU) KR has several divisions of operations. KR engages in trade, distribution, retail, services and manufacturing. KR serves as the local partner to over 100 international companies. Typical partners of KR include Siemens, Nikon, Roca, Majelite, Rolex, Oshkosh, Procter and Gamble, Chanel, 3M, HUMWVEE, and Pierce. KR's partners are mainly from Western countries, although there is a sizeable number of Omani companies partnering with KR. KR also has its own brand name which is attached to everything from watches to rice to retail outlets. Clients of KR range from government ministries to large retail centers to large oil companies. KR does very limited business with private individuals. KR's clients are based in Oman. ¶6. (SBU) Restrictions on USML items, especially the prohibition against unauthorized re-transfers and re-exports, are understood by KR. Further, it is doubtful that KR would have any item on the USML on hand for re-transfer/re-export, as such items are immediately consigned to the governmental body for which they were ordered upon arrival in-country. ¶7. (SBU) When asked about registration as a "broker," Anil Khimji and the CEO of Logistics, M.C. Jose, appeared confused that they would be considered arms brokers. They informed us that they received a fax from DDTC regarding broker registration and simply provided the information requested by the fax. KR is a broker as defined by the AECA and ITAR, as it does engage in the business of brokering activities with respect to the import or transfer of any defense article. The end-user of such items bought by KR, Post was told by Messers Khimji and Jose, is always a government body. Schmierer