Cablegate: Blue Lantern Level 3: Export of U.S. Defense

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DE RUEHON #0202 2392022
ZNR UUUUU ZZH
R 272022Z AUG 09
FM AMCONSUL TORONTO
TO RUEHC/SECSTATE WASHDC 2918
INFO RUEHOT/AMEMBASSY OTTAWA 2264
RUCNFB/FBI WASHINGTON DC
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEWMFB/SECDEF WASHINGTON DC
RHMFIUU/HQ BICE INTEL WASHINGTON DC

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

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