BLUE LANTERN CHECK ON POSSIBLE UNAUTHORIZED

UNCLAS STATE 046926 SIPDIS TEL AVIV FOR JASON GRUBB E.O. 12958: N/A TAGS: ETTC KOMC IS SUBJECT: BLUE LANTERN CHECK ON POSSIBLE UNAUTHORIZED RETRANSFER OF M-113 ENGINES BY THE GOVERNMENT OF ISRAEL REF: 2006 BLUE LANTERN GUIDEBOOK ¶1. This is an Action Request. See paragraphs 2-5. ¶2. The Department's Office of Defense Trade Controls Compliance (PM/DTCC) requests Embassy's assistance in conducting a Blue Lantern check to verify the possible unauthorized retransfer of M-113 engines by the Government of Israel. Post is requested to complete this Blue Lantern check within 30 days. ¶3. Background: In June 2008, the Department's Directorate of Defense Trade Controls (DDTC) received a request from U.S. company Pan Pacific Enterprises (PPE) for authorization to export 30 U.S.-origin M-113 diesel engines (worth USD 236,000) to the Yemeni Army. PPE indicated that it would obtain the U.S.-origin engines from a private Israeli company, L.A. Nordan (Nordan). Included in the supporting documentation was a letter from PPE claiming that Nordan received the engines from the Israeli Ministry of Defense (IMOD). The engines had been removed from M-113 Armored Personnel Carriers originally sold by the USG to the GOI under the Foreign Military Sales (FMS) program. ¶4. PM/DTCC has verified through the Defense Security Cooperation Agency (DSCA) that the USG indeed has transferred via FMS the same type of M-113 engines to the GOI in the past but has not approved any retransfers of M-113 engines or vehicles from the GOI to any private Israeli firms. ¶5. ACTION TEL AVIV: Post is requested to make inquiries with L.A. Nordan and appropriate host government officials to determine if the GOI retransferred to L.A. Nordan any M-113 engines or other parts that were originally acquired via FMS from the United States. If such a retransfer did occur, post is requested to obtain all relevant details, including: date of transfer; financial considerations/compensation; number, type, and serial number of items; names and titles of individuals involved; and requests, if any, for permission to transfer the articles to L.A. Nordan. POC at L.A. Nordan is Didi Aspis, Tel. 972-99547416, Box 0412 Herzila Pituach Israel, Israel 46701. Post is encouraged to share with L.A. Nordan and host government officials the letter mentioned in para 6 below. (Note: PM/DDTC has recently discussed this matter with GOI representatives, including IMOD/MALMAB's Nir Ben Moshe, former Defense Cooperation Director at the Israeli Embassy in Washington.) END ACTION ¶6. Submitted in support of this request is the following document (PM/DTCC will fax document to post): --Letter from Pan Pacific Enterprises to PM/DDTC, signed by President David C. Pan, dated 11 June 2008, indicating that the M-113 engines were originally supplied to the Israeli Government under various FMS programs. ¶7. Please slug reply for PM/DTCC - BLUE LANTERN COORDINATOR and include the words "Blue Lantern" and the case number in the subject line. POC is Tim Mazzarelli, PM/DTCC, Phone: 202-663-3867. ¶8. Department is grateful for Embassy's assistance in this matter. CLINTON