BLUE LANTERN: DISCUSSIONS WITH CENTCOM AND

UNCLAS STATE 010260 SENSITIVE SIPDIS CAIRO FOR MELISSA CLINE CAIRO FOR JACK MELVIN E.O. 12958: N/A TAGS: EG ETTC KOMC OTRA PARM PREL SUBJECT: BLUE LANTERN: DISCUSSIONS WITH CENTCOM AND EMBASSY CAIRO OFFICIALS OCTOBER 21-22 REF: 08 STATE 61434 ¶1. (SBU) SUMMARY: Compliance Specialists from the Department's Office of Defense Trade Controls Compliance (PM/DTCC) met October 21-22 in Cairo with USG officials to discuss the Blue Lantern end-use monitoring program and related defense trade and compliance issues. Topics included third-party transfers, Arms Export Control Act (AECA) Section 3 violations involving unauthorized re-transfers and re-exports, and the export of defense articles and technology from the U.S. to Egypt. Briefings to the Defense Security Cooperation Agency's (DSCA) CENTCOM End-Use Monitoring Regional Forum and country team members strengthened DOS-DOD collaboration by clarifying distinctions between State (Blue Lantern) and Defense (Golden Sentry) end-use monitoring requirements and procedures, and identifying areas for future cooperation. Meetings with Embassy country team members were part of PM/DTCC's ongoing efforts to improve the effectiveness of Blue Lantern through outreach visits with posts, industry and host governments. END SUMMARY ¶2. (U) Administered by PM/DTCC, Blue Lantern is a global program designed to verify the end-use, end-users, and disposition of commercially exported defense articles, technology, and services. PM/DTCC also works with the Department's Office of Regional Security and Arms Transfers (PM/RSAT) to investigate unauthorized re-transfers and misuses of defense articles and relevant technical data. Under Section 3 of the Arms Export Control Act (AECA),the Department, as the President's delegate, must report to Congress any unauthorized re-transfer or re-export of items originally transferred or sold under military assistance programs or DCS transactions that reach certain Congressional notification thresholds. CENTCOM EUM BRIEFINGS ¶3. (U) On October 21, PM/DTCC Compliance Specialists Judd Stitziel and Kyle Ballard briefed participants of the Defense Security Cooperation Agency's (DSCA) CENTCOM End-Use Monitoring (EUM) Regional Forum on Blue Lantern, third-party transfers, AECA Section 3 violations involving unauthorized re-transfers and re-exports, and new registration and EUM requirements under Section 1228 of the National Defense Authorization Act of 2008 (NDAA). Participants included Security Assistance Officers (SAO) from nearly all CENTCOM military groups, officers responsible for international programs at CENTCOM headquarters, and program managers of DSCA's Golden Sentry EUM program in Washington. Successful joint outreach experiences such as the SOUTHCOM EUM Regional Forum in Guatemala in April 2008 (reftel) involving PM/DTCC and DSCA have helped audiences to better understand the similarities and differences between the regulations governing the export of defense articles and technology exported via direct commercial sales (DCS) and Foreign Military Sales (FMS). The session began with back-to-back briefings on Golden Sentry and Blue Lantern as well as AECA Section 3 and third-party transfers of items that had originally been exported via DCS and FMS. PM/DTCC also briefed the new registration and EUM requirements for lethal defense articles exported to Iraq mandated in NDAA Section ¶1228. ¶4. (U) Questions and discussion during the CENTCOM forum and sidebar meetings focused on the differing requirements and capabilities of EUM through Blue Lantern and Golden Sentry, especially concerning night vision devices (NVDs). Many forum participants expressed concern that entering DCS-origin NVD serial numbers in DSCA's Security Cooperation Information Portal (SCIP) database would effectively leave SAOs solely responsible for all NVD EUM. This concern was amplified by recurring assertions that SAOs in many CENTCOM countries already lack the experienced manpower required for effective EUM. PM/DTCC allayed these concerns by emphasizing Blue Lantern's independent EUM mandate, reiterating that any data entered into SCIP would not shift any DOS EUM responsibilities to DOD, and noting that many SAOs around the world have voluntarily entered DCS NVD serial numbers into SCIP on their own initiative in order to facilitate and simplify EUM for both Golden Sentry and Blue Lantern. Forum participants agreed that both DOS and DOD would benefit from increased communication and collaboration in the EUM of DCS NVDs. ¶5. (U) Stitziel and Ballard conducted sidebar meetings with Capt. Steven Moore from MNSTC-I,s SAO unit in Baghdad to discuss the logistics and other considerations of implementing the new registration and EUM requirements for "lethal defense articles" exported to Iraq under NDAA Section ¶1228. The current policy affects exports of lethal defense articles that generally fall under Categories I, II, and IV of the U.S. Munitions List (Section 121.1 of the International Traffic in Arms Regulation). PM/DTCC had planned to visit Baghdad in October before traveling to Cairo in order to coordinate the implementation of NDAA Section 1228,s EUM requirements, but the trip was postponed. PM/DTCC and DSCA are now planning a joint visit in late February 2009. MEETINGS ON AECA SECTION 3 VIOLATIONS IN EGYPT ¶6. (SBU) Stitziel and Ballard met with several USG officials as part of the Department's ongoing investigation of a number of potential unauthorized re-transfers covered by AECA Section 3. Post expressed its commitment to providing timely information on potential Section 3 violations, and stressed the importance of providing comprehensive and accurate reports to Congress. The PM/DTCC representatives addressed Post's concerns by emphasizing that reporting even potential AECA Section 3 violations is a statutory requirement. Stitziel and Ballard also made clear that such reports to Congress highlight the facts of a given case as they relate to the law and ultimately get cleared by multiple Department officials, up to and including the Undersecretary for Arms Control and International Security. PM/DTCC also emphasized its commitment to utilize all resources available in investigating potential Section 3 violations and welcomed Post's assurance of continued full cooperation and support. COUNTRY TEAM BRIEFINGS ¶7. (U) Stitziel and Ballard briefed the Blue Lantern program, AECA Section 3, and general trends in DCS exports of U.S.-origin defense articles to Egypt to several country team members, including Col. James Piner, head of the Office of Military Cooperation (OMC); Political-Military Officer Melissa Cline; Economic and Political Officer Eugenia Sidereas; Mark Russel, Commercial Attache; Capt. Jack Melvin of the OMC; Col. Kenneth Thompson, Air and Defense Attache; and a Regional Affairs Office representative. ¶8. (SBU) Since January 2002, PM/DDTC has received over 1,200 applications for commercial defense exports to Egypt worth more than $2.4 billion. During that time, PM/DTCC attempted to conduct 24 Blue Lantern checks, evenly divided between pre-license checks and post-shipment verifications, on applications and licenses that listed end-users in Egypt. Of these, 19 were completed (79 percent) and 3 were closed 'unfavorable' (Note: this rate of 12.5 percent unfavorable is lower than the worldwide average). The majority of 'unfavorable' Blue Lanterns were due to the behavior of private companies and intermediaries and not the Government of Egypt. Embassy Cairo's response times since 2002 are 75 days for pre-license checks and 150 days for post-shipment verifications. ¶9. (U) Piner expressed concern about difficulties in concluding Blue Lantern checks in Egypt prior to his arrival and assured that he supported the goals of the program. Both Piner and Cline noted the general difficulty in soliciting timely replies from Egyptian officials, but stated that PM/DTCC can expect more timely responses to future Blue Lantern requests. ¶10. (U) Discussion with Mr. Russell focused on potential benefits of involving Department of Commerce (DOC) representatives in select Blue Lantern checks and PolMil officers in DOC's Extrancheck end-use monitoring program. Due to Russell's upcoming posting to Iraq, PM/DTCC representatives also briefed him on NDAA Section 1228 registration and EUM requirements. ¶12. (U) PM/DTCC would like to express its gratitude to Embassy Cairo and especially control officers Melissa Cline and Capt. Jack Melvin in helping to arrange and execute this visit. CLINTON