BLUE LANTERN LEVEL 3: PRE-LICENSE END-USE CHECK

S E C R E T STATE 079547

NOFORN
SENSITIVE
SIPDIS
TBILISI FOR NICOLE O'BRIEN
PORT LOUIS FOR QUENTIN BARBER

E.O. 12958: DECL: 07/29/2034
TAGS: ETTC KOMC GG SE UP BU
SUBJECT: BLUE LANTERN LEVEL 3: PRE-LICENSE END-USE CHECK
ON LICENSE 050180371

REF: A. IIR 7 100 0572 09 OF 1 JULY 2009

B. TD-314/085344-08 OF 24 NOVEMBER 2008

Classified By: Daniel J. Buzby, for reasons 1.4(a),(b),and (d)


1. This is an Action Request. See paragraphs 2 - 5.


2. (U) The Department's Office of Defense Trade Controls
Compliance (PM/DTCC) requests Posts' assistance in conducting
a pre-license check on license 050180371 for the export of
rifles and grenade launchers to Georgia. Posts are requested
to complete this Blue Lantern check within 30 days. Lack of
response to a Blue Lantern check will affect pending and
future licenses involving parties to this license.


3. (S//NF) Reason for Request: According to REFTEL A,
Seychelles-based company Bel Trading and Consulting has been
working with Bulgaria-based company Bulgarian Industrial
Engineering and Management (BIEM) to procure M4 rifles and
M203 grenade launchers on behalf of the Ministry of Defence
of Georgia (NOTE: Bel Trading and Consulting is also
reported to be doing business in Ukraine). REFTEL A
indicates that BIEM is receiving a commission for its
services in this transaction despite the fact that the
company is not/not listed on the export license request and
is not/not registered as a broker with PM/DTCC as required by
the International Traffic in Arms Regulation (ITAR). In
addition, REFTELs A and B highlight both companies'
connection to organized crime and grey arms trafficking, and
mentions that the Government of Seychelles has considered
revoking Bel Trading and Consulting's license to operate in
the past. This request is to obtain more information about
this transaction and the parties involved.


4. (SBU) Action Request Tbilisi: Post is requested to
establish the bona fides of this transaction by making
inquiries to appropriate authorities in the Ministry of
Defense of Georgia. The following points are included for
guidance:

(To the Ministry of Defense of Georgia)

--Can the MOD confirm the order of the rifles and grenade
launchers listed on this license application?

--MOD's Letter of Intent and End-Use Certificate date back to
2007 and 2008, respectively. Are these documents still
considered valid by MOD? Do these documents still reflect
MOD's intention to continue with this transaction?

--What role is Seychelles-based Bel Trading and Consulting
playing in this transaction? How were you first introduced
to Bel Trading and Consulting? What are the terms of the
agreement between MOD and Bel Trading and Consulting in this
transaction? Is Bel Trading and Consulting receiving any
commissions for its services in this transaction?

--To your knowledge, are there any other companies involved
in this transaction aside from Bel Trading and Consulting and
the U.S. vendor? Are any other parties receiving fees or
commissions for services rendered in this transaction?

In its reply, Post may also comment on any other information
pertinent to these transactions such as security of
facilities, end-use, and concerns about the entities involved.


5. (SBU) Action Request Port Louis: Post is requested to
obtain further information on Bel Trading and Consulting and
establish the bona fides of this transaction by making
inquiries to representatives of the company and appropriate
authorities in the Government of Seychelles.

(To Bel Trading and Consulting)

--Thank you for meeting with Embassy personnel. This is a
Blue Lantern end-use monitoring check and is not/not an
investigation or law enforcement action. The U.S. Department
of State's Blue Lantern end-use monitoring program is the
Department's means by which it establishes the bona fides of
entities involved in the export and brokering of U.S. defense
articles and services. Any information you provide will
assist the United States Government in monitoring U.S.
defense articles and services and establishing trust in our
trade relationships.

--When was your company established and who are its
principals? Does your company or any of its principals do
business under any other names? Has your company or any of
its principals done business under any other names in the
past? Does your company have offices in any other countries?


--What products and services does your company provide? Who
are your regular business partners and where do they reside?
Who are your regular customers and where do they reside?

--Has your company been party to U.S. export licenses in the
past?

--What is your relationship with KNM Worldwide Services in
the United States? How were you first introduced to KNM
Worldwide Services? What are the terms of the agreement
between your company and KNM Worldwide Services in this
transaction?

--What is your relationship with the Ministry of Defence in
Georgia? What are the terms of the agreement between your
company and the Ministry of Defence in Georgia in this
transaction? Who is your point of contact in the Ministry of
Defence in Georgia?

--What role is your company playing in this transaction? Is
your company receiving any fees or commissions for its
services in this transaction? If so, please provide details
and documentation.

--Is your company paying any fees or commissions to any third
parties for their services in this transaction? If so,
please provide details and documentation.

--Will you ever have physical possession of the defense
articles on this license? If so, please describe your
inventory and security procedures.

--Are you familiar with the regulations governing the import
and brokering of U.S.-origin defense articles, including
restrictions on re-transfer or re-export?

(To Import/Export Authorities of Seychelles)

--Is Bel Trading and Consulting properly registered and/or
authorized by the Government of Seychelles to broker, import,
and/or sell defense articles in Seychelles and/or around the
world?

--Do you have any information on Bel Trading and Consulting
or its principals that would question their reliability as a
recipient or broker of U.S. defense articles?

In its reply, Post may also comment on any other information
pertinent to these transactions such as security of
facilities, end-use, and concerns about the entities involved.


6. (U) Details of license applications:

DTC Case: 050180371

QUANTITY/COMMODITY:

7,000 M4A1-type Rifles, 5.56mm

2,000 M203 40mm Under Barrel Launchers

License Value: USD $6,600,000

SELLER:

KNM Worldwide Services
3917 SE 40th Street
Ocala, FL 34480
Tel: 352-653-9551

FOREIGN CONSIGNEE:

BEL Trading and Consulting
1st Floor, Allied Plaza, Francis Rachel
Victoria, Mahe
Seychelles
Tel: 380445862302
Mobile: 380674079984

FOREIGN END-USER:

Ministry of Defense of Georgia
No 20 General G. Kvinitadze Street 0112
Tbilisi, Georgia

PURPOSE:

For use by the Georgian military services.


7. (U) Submitted in support of the license application were
the following documents (PM/DTCC will fax documentation to
Posts upon request):

DSP-83 U.S. Nontransfer and Use Certificate signed by Chris
Brown (KNM Worldwide) dated 29 June 2008, Mamuka Mujiri
(GMOD) dated 11 Apr 2008, Zaza Gogava (GMOD) dated 11 Apr
2008, and Almendieiev Arkadii (Bel Trading and Consulting)
dated 11 Apr 2008;

End-Use Certificate No. 4/41 issued by the Georgian Standing
Commission on Military-Technical Issues, Ministry of Defence
signed by Deputy Minister of Defence Mamuka Mujiri dated 06
Feb 2008;

Letter of Intent Document No. 4/419 signed by Deputy Minister
of Defence Mamuka Mujiri dated 30 Nov 2007;

Import Permit document number and date illegible (NOTE:
Signature looks similar to that of Mamuka Mujiri on the
End-Use Certificate).


8. (U) 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 Kyle M. Ballard, Phone:
202-663-1929; Email: BallardKM@state.gov; SIPRNET:
BallardKM@state.sgov.gov. The Blue Lantern Guidebook (ref)
is available as a PDF file on Intellipedia:
http://www.intelink.gov/wiki/
Blue Lantern End-Use Monitoring Program;


9. (U) Department is grateful for Post's assistance in this
matter.
CLINTON