Cablegate: Blue Lantern Response: Application 050183563

VZCZCXYZ0001
OO RUEHWEB

DE RUEHHI #0880 2430801
ZNR UUUUU ZZH
O R 310800Z AUG 09
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0000
INFO RHMFIUU/FBI WASHINGTON DC
RHMFIUU/HQ BICE INTEL WASHINGTON DC
RUCPDOC/USDOC WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEHGP/AMEMBASSY SINGAPORE
RUEHHI/AMEMBASSY HANOI
RUEKJCS/SECDEF WASHINGTON DC

UNCLAS HANOI 000880

SIPDIS
PM/DTCC - BLUE LANTERN COORDINATOR AND TIM MAZZARELLI
EAP/MLS FOR MARC FORINO

E.O. 12958: N/A
TAGS: ETTC KOMC VM MASS
SUBJECT: Blue Lantern Response: Application 050183563

REF: 09 STATE 83775

1. (SBU) Summary: Per reftel, the Embassy made inquiries to assess
the end use of items stated on the license request and conducted a
site visit to Electronics Informatics Chemical Company (ELINCO) to
assess its business operations, on-site security, and general
reliability as a recipient of United States Munitions List (USML)
items. Post is confident that the Vietnamese Navy is the end user
for the items and ELINCO is a legitimate import agent for the
Government of Vietnam. End summary.

2. (SBU) In a meeting in Hanoi on August 28, 2009, poloff
discussed the license application for 30 units of the FlashSight
Thermal Imaging Camera with ELINCO's Vice Director, Mr. Nguyen Viet
Hung. Mr. Hung explained that ELINCO is a Ministry of Defense
(MOD) company; that is, the company is owned by the MOD and staffed
with employees who effectively work for the Government of Vietnam.
ELINCO was established in 1991 and primarily acts as a commercial
import agent for telecommunications and integration products for
both Vietnamese military and domestic civilian customers.

3. (SBU) In initial conversations, the Vietnam Marine Police
indicated that they were not the end user of the equipment and
referred post to the Vietnamese Navy. The Navy confirmed that they
are the actual end users of the equipment in the license. When
asked about this discrepancy, Mr. Hung explained that when the
original license application was submitted (roughly August 2008),
the Vietnam Marine Police was a subordinate organization to the
Vietnamese Navy and was the original end user of the product.
Since then, the Vietnam Marine Police has been brought out from
under the Navy and established as a separate entity. However,
budgetary rules forbid the original funding for the purchase to be
transferred from the Navy to the Vietnam Marine Police. However,
as the Navy planned to request similar equipment for its use and
for the same stated purpose, the Navy continued with the purchase
rather than be forced to return the funding to the Ministry of
Defense. He went on to explain that the Vietnamese Navy and ELINCO
have now signed a new Nontransfer and Use Certificate (DSP-83),
dated August 19, 2009, to correct this issue. NOTE: Post will
provide a copy of the new DSP-83 to PM/DTCC via email. End note.

4. (SBU) ELINCO's role is to receive the items upon arrival,
ensure that all proper paperwork is completed to pass through
customs, and transfer the items to the end user. Mr. Hung produced
contract documents, allowed poloff to review the documents, and
offered to provide copies as needed. While Mr Hung noted that in
his three years with the company this was his first case requiring
an export license of this nature, he demonstrated a clear knowledge
of the rules and a willingness to provide information. He appeared
to have a strong understanding of restrictions on USML, confirming
that the items would be secured as required. Mr. Hung also
explained that retransfer and end use restrictions and requirements
are listed clearly in the contract and have been explained to the
Vietnamese Navy. He went on to note that there is no question of
Vietnam re-transferring or re-exporting the equipment as it is
sorely needed to improve Vietnam's maritime surveillance
capabilities.

5. (SBU) COMMENT: Post believes the Vietnamese Navy is the genuine
end user of the items and that the explanation of the discrepancy
in the original license application is valid. ELINCO is a
legitimate import agent for the MOD and post has a high degree of
confidence that both ELINCO and the Vietnamese Navy are aware of
and intend to fulfill their contractual obligations, including the
restrictions on re-export and retransfer of USML. End Comment.
MICHALAK

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