BLUE LANTERN LEVEL 3: EXPORT OF U.S. DEFENSE

UNCLAS TORONTO 000202 SENSITIVE SIPDIS PM/DTTC FOR MAZZARELLI E.O. 12958: N/A TAGS: PGOV MARR ETTC KOMC CA SUBJECT: BLUE LANTERN LEVEL 3: EXPORT OF U.S. DEFENSE ARTICLES TO REDLINE COMMUNICATIONS CITING CANADIAN EXEMPTION, REF: SECSTATE 56857 1.(SBU) IAW reftel, Post conducted a site visit to Redline Communications' facility on August 25, 2009. We spoke to Vice President for Marketing and Business Development Kevin F.R. Suitor about the subject Blue Lantern check. 2.(SBU) Suitor expressed surprise and skepticism that Redline had received any item requiring special handling and safeguarding as a sensitive USML item. Suitor also explained that the project manager, and the person responsible for ordering for the project that would have been associated with the delivery of the USML article, in September 2007, had both left Redline as a result of corporate downsizing. ¶3. (SBU) Suitor was unable to identify the parts in the Blue Lantern request; therefore, the questions relating to exact USML articles, exact end use, positive control and current location, and whether the USML articles would be transferred or re-exported are not addressed in this cable. He promised to look for information on the USML article in question. We will relay that information septel when it is provided. ¶4. (SBU) The remaining questions, and the associated answers, follow: ¶Q. Does Redline Communications have secure facilities and proper accounting and security procedures for handling sensitive USML items? Where and what are they? ¶A. Suitor claimed that Redline has no requirement for classified information or employees with clearances, and does not believe Redline has EVER (emphasis Suitor's) received any USML items that would require safeguarding. ¶Q. When was the company established and who are its principals? ¶A. Redline Communications Incorporated is a publicly-held Canadian company, trading on the Toronto Stock Exchange. There is also a Redline entity incorporated in Delaware that mostly oversees its U.S.-based sales force. ¶Q. What is the nature of the company's business? Has Redline Communications previously sought defense articles listed on the USML? ¶A. Redline designs, engineers, and manufactures broadband wireless equipment in the sub-six gigaherz bands. Suitor claimed that all of his company's products are made only to commercial specifications. Besides its facility in Markham - where Redline houses its headquarters, engineering, sales and marketing, and finance units - they also have development facilities in Bucharest and Craivoa, Rumania. According to Suitor, Redline contracts with independent manufacturers in the U.S., Mexico and Taiwan to produce Redline's equipment. ¶Q. What types of organizations are among Redline Communications' typical customers, where are they located? ¶A. Redline sells in 149 countries, but 80 percent of its business is done in "North America" and the "Middle East". According to Suitor, half of its North American sales are to government entities, including the USMC. In the middle east, a significant majority of Redline's sales are commercial, to telecommunications companies in Pakistan, Saudi Arabia, Bahrain, Tunisia and others. Redline also has contracts with the government of Egypt. ¶Q. Do Redline Communications officials understand the restrictions on USML items, especially the prohibition against unauthorized re-transfer and re-export? ¶A. Suitor explained that while he understood the concept and requirements, his company does not use USML-controlled items and therefore does not have concerns about re-transfer or re-export of such items. JOHNSON