BLUE LANTERN LEVEL 3: POST-LICENSE/PRE-SHIPMENT

S E C R E T PRAGUE 000621

NOFORN
SENSITIVE
SIPDIS

FOR PM/DTCC - BLUE LANTERN COORDINATOR

E.O. 12958: DECL: 10/16/2019
TAGS: ETTC EZ KOMC
SUBJECT: BLUE LANTERN LEVEL 3: POST-LICENSE/PRE-SHIPMENT
END-USE CHECK ON LICENSE 050183608

REF: STATE 089282

Classified By: POLITICAL-ECONOMIC COUNSELOR CHARLES O. BLAHA FOR REASON
S 1.4(A),(B),AND (D)


1. (SBU) In response to reftel, Emboffs visited the offices
of KINGFISHER, s.r.o. to establish the bona fides of the
company. Mr. Martin Hoza, KINGFISHER's director, indicated
that his company has operated exclusively within the arms
trade for a decade, specializing in consignment for the last
seven years. Hoza indicated that he is KINGFISHER's sole
executive officer overseeing a Prague-based staff of 11
employees, a number Hoza said he would like to see grow
significantly, though he did not elaborate on his future
business plans. KINGFISHER does not have a business presence
outside the Czech Republic, relying instead on bonded
contractors and agents to handle such things as customs
clearances, expediting, etc.


2. (SBU) Hoza claimed an experience-based readiness to
handle international shipments of "any kind" of armaments,
including major systems such as tanks. Though making it
clear that he has a number of long-standing international
partners, Hoza was repeatedly reluctant to provide specifics
about his regular clientele. At the same time, he went to
great lengths to assure us that he scrupulously avoids doing
business involving "troublesome" countries (citing Congo as
an example) or "risky" customers.


3. (SBU) While discussing the particulars of a previous
shipment (in late 2007) involving the same seller and
end-user as the consignment in question, Hoza relied upon a
staff member, Jirina Fukova, to provide details and present
documentation. However, Hoza himself appeared to be keenly
aware of the regulations regarding the import of U.S.-origin
defense articles and re-export restrictions, and also well
versed in the myriad of national regulations and procedures
governing the transit of armaments across continents. In the
case of the earlier consignment -- and almost certainly in
any future one to the same destination -- KINGFISHER never
had physical possession of the shipment, which was handled
from the port of entry in Germany through delivery in
Bulgaria by a contracted freight forwarder.


4. (S/NF) Regarding any issues of concern about his being a
"shady character," Hoza, unprompted, volunteered that he had
recently been questioned by the Czech Security Intelligence
Service (BIS). Hoza stated that he had emphasized to BIS
that he and his company could not be held accountable for
what an end-user does with a shipment after receiving it, and
that KINGFISHER's and his own personal responsibility rests
solely in ensuring that their segment of the transaction is
handled in accordance with all applicable laws and
regulations. Post is continuing to follow up, as
appropriate, including with the Czech Government, on this
aspect of the case and will provide an additional assessment,
if needed.
Thompson-Jones