RESPONSE TO BLUE LANTERN PRE-LICENSE END-USE

S E C R E T TEL AVIV 002655

SIPDIS

PM/DTCC - BLUE LANTERN COORDINATOR

E.O. 12958: DECL: 12/07/2017
TAGS: ETTC KOMC TO IS
SUBJECT: RESPONSE TO BLUE LANTERN PRE-LICENSE END-USE
CHECK, LICENSES 050190991 AND 050192065

REF: A. STATE 102684

B. FBI IIR 4212078210

Classified By: Deputy Political Counselor Jan Levin, reasons 1.4 (b),(d
)


1. (S) Summary: Representatives from M. Paz Logistics and
Global Law Enforcement and Security confirmed that they are
for the first time working together to provide night vision
devices and rifles to the Togolese Armed Forces. However,
the company representatives' accounts of the potential
transaction do not entirely match. According to M. Paz
Logistics President Ofir Paz, Global Law Enforcement and
Security approached Paz Logistics regarding the transaction.
Paz said Global has significant experience working in Togo,
and will not take into physical possession the night vision
devices or rifles. Global Law Enforcement and Security CEO
David Tsur was reluctant to provide many details regarding
this transaction or any other business ventures. According
to Tsur, this is the first time his company has worked on a
contract with the Togolese; he was uncertain whether Global
would take into physical possession the night vision devices
and rifles. Embassy Tel Aviv country team agencies possess
no local derogatory information on either company, although
the Legal Attache's office notes several FBI reports on M.
Paz Logistics president Ofir Paz. End summary.


2. (SBU) Per ref A, Poloff and FCS senior commercial
specialist met on October 15 with M. Paz Logistics President
Ofir Paz and Vice President for Operations Anat Paz-Zarmi at
the company's offices in Kfar Sava, Israel. Paz Logistics
was established in 1983; its core business involves
representation and consultancy to foreign (mainly U.S.)
Original Equipment Manufacturers (OEMs) of defense and
homeland security systems. The company's main customer base
is the IDF, Israel National Police (INP),and GOI. Its
product line includes land-based warfare systems, weapons
systems and ammunition, electro-optical and electronic
equipment, armored vehicles, and satellite communication and
navigation systems.


3. (SBU) Paz, who employs 11 persons at that office, appeared
at ease with the process and questioning -- he "does things
by the book." Paz explained that he was one of the first
Israeli brokers registered with the State Department, having
obtained his license three or four years ago. He claims that
the license gives his company prestige, which helps pull in
more business.


4. (SBU) Paz said that his company works with suppliers to
find products on behalf of other companies. He added that
finding the goods, plus handling all of the logistical
details -- taxes, customs, licensing -- is the service his
company provides. According to Paz, in the last two to three
years, M. Paz Logistics has started brokering international
defense deals in addition to deals with U.S. companies. Paz
said this is a relatively new function for his business, but
it now accounts for over 40 percent of company revenue. He
noted that the rest of his business involves representing
companies to the Israel Defense Force.


5. (SBU) Paz said his company is not looking to expand to the
international market where he would deal directly with
customers, but he made passing reference to the seemingly
frequent overseas visits where he works "in support of his
suppliers." He mentioned a number of countries, including
Georgia, Kazakhstan, Azerbaijan, Ukraine, Poland, the Czech
Republic, and Cyprus. When asked if M. Paz maintained any
other offices, Paz explained that he has a company in the
British Virgin Islands. He said that the company tried to
obtain a broker's license but was rejected. Paz added that
the company does not engage in any weapons sales, nor does it
do business with the United States.


6. (SBU) According to Paz, Global Law Enforcement and
Security approached M. Paz Logistics with a request for a
"long list of products" -- primarily not defense-related --
to be delivered to the Togolese. Paz said that Global works
with Togo "all the time." He averred that Global came to Paz
because of M. Paz's reputation as a supplier. Global had
previously requested price quotes from Paz, but this was the
first transaction between the two -- though Paz added that he
was hopeful that a second contract would be signed soon.


7. (SBU) Paz said that Global will not take into possession
any of the goods slated for delivery to Togo, and that M. Paz
Logistics would send the goods directly to Togo while working
through the MOD's Directorate for Defense Exports. He added
that the contract total was approximately USD 240,000, which
represents the cost of the items, plus commission, mark-up,
and shipping costs which are passed along without mark-up to
the customer. Paz possessed documentation in support of the
license application.


7. (SBU) On December 3, poloff spoke by phone to Global Law
Enforcement and Security CEO David Tsur, who was overseas on
a business trip. Poloff attempted to arrange a site visit to
Global Law Enforcement and Security on multiple occasions,
but was told by company representatives that a visit was not
possible due to the fact that Tsur was abroad. Tsur said
that Global Law Enforcement and Security was established in
2008, and is a subsidiary of Global CST and the Mikal Group,
with offices located in Petah Tikvah.


8. (SBU) According to Tsur, Global does not sell products --
"we sell know-how." He described Global as a consulting firm
for primarily countries' law enforcement agencies. Tsur said
his company also consults on large events, such as the
Olympics and soccer games. Tsur declined to name specific
countries, noting that he works in Eastern Europe, South
America, and Africa -- he did mention Nigeria as one of his
clients.


9. (SBU) When asked about his relationship with M. Paz
Logistics, Tsur declined to give information regarding the
terms of the agreement between the two companies. He
confirmed that this was the first time the two had done
business together, but he had known about M. Paz Logistics
when he worked for the Israel National Police (INP). Tsur
described this latest venture with M. Paz as "okay," and that
the M. Paz's contract bid was acceptable -- he acknowledged
that this transaction served as a test to determine if M. Paz
was a reliable partner. He confirmed that M. Paz was
responsible for "buying and shipping everything."


10. (SBU) When asked about his relationship with the Togolese
Armed Forces, Tsur said he "does not get involved." He noted
that he has a subcontractor who works directly with the
Togolese, but he declined to mention the name of the company.
According to Tsur, this was the first time his company had
worked on a contract involving the Togolese. Since the
conversation was by phone, Tsur could not provide
documentation in support of the license application.


11. (SBU) Tsur acknowledged that Global is paying M. Paz a
commission for its services in the transaction. He said he
did not know if Global would ever take physical possession of
the night vision devices and rifles. Tsur claimed some
familiarity with regulations governing the import and
brokering of U.S.-origin defense articles, but acknowledged
that he relies upon the Israeli MOD to inform him of any
obligations.


12. (S) Embassy Tel Aviv country team members possessed no
local derogatory information on these companies. However,
Embassy Tel Aviv Legal Attache's office noted that the FBI
had recently sent a note (072/09) to the INP with
supplemental information on Ofir Paz in an effort to assist
the INP in its determination whether an investigation on Paz
be initiated in Israel. Further, an FBI IIR (ref B) notes
that Paz brokered a deal in which defective M-4s were sold to
Georgia.
CUNNINGHAM