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Cablegate: Spain: Disagreement On Dsp-83 Signing Authority

VZCZCXRO0438
PP RUEHLA
DE RUEHMD #0296 0471653
ZNR UUUUU ZZH
P 161653Z FEB 07
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC PRIORITY 1892
INFO RHMFISS/CDR USEUCOM VAIHINGEN GE PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RUEHLA/AMCONSUL BARCELONA 2455

UNCLAS MADRID 000296

SIPDIS

SIPDIS

STATE FOR PM/DDTC - ANN GANZER
OSD FOR AT&L/INT'L COOPERATION - SETH WILSON

E.O. 12958: N/A
TAGS: MASS ETTC PREL SP
SUBJECT: SPAIN: DISAGREEMENT ON DSP-83 SIGNING AUTHORITY


1. SUMMARY: MOD is concerned because Spain's $1.2 billion
program to sell frigates to the Norwegian navy is being
delayed by an inability to reconcile US and Spanish technical
legal requirements regarding signature of end-user
nontransfer documents. Post requests DDTC guidance on how to
move forward. See action request paragraph six. END SUMMARY.

2. Lockheed Martin and the Spanish shipbuilder Navantia have
a $1.2 billion program to build frigates for the Norwegian
navy. This program, based on Spain's advanced new F-100
class frigate and including US combat systems technology, has
been brought to a temporary halt by DDTC's inability to
process a DSP-83 (Nontransfer and Use Certificate) because an
authorized representative of the Government of Spain (G0S)
has not signed in block 8.

3. In this case, the signed DSP-83 is a pre-requisite for an
amendment (TA 1437-98H) to the existing Technical Assistance
Agreement between Lockheed Martin and Navantia. This
amendment is required as a result of a corporate name change.
This issue has surfaced because in the case of TA 1437-98H,
the end user of the technical data to be transferred is a
non-government entity and the signature of Spanish Government
representative in block 8 is required by the ITAR. MOD says
that the person (MOD's National Industrial Security
Authority) who signed the DSP-83 for the original TAA was not
authorized to sign such a form.

4. In lieu of signing block 8 of the DSP-83, MOD issued its
own End Use Certificate, signed by MOD's Director General of
Armament and Material (DGAM), in accordance with pertinent
Spanish legislation - Royal Decree 1782/2004. MOD asserts
that the DGAM is the only GOS representative authorized to
sign an End Use Certificate on behalf of the GOS and that he
is legally restricted to using only the designated GOS End
Use Certificate that is included as an Annex to the Royal
Decree. MOD says that the DGAM would exceed his legal
authority by signing any form (e.g., a DSP-83) other than the
one included in the Royal Decree (NOTE: Post has e-mailed a
translation of the Royal Decree to DDTC.).

5. MOD contends that the language of its End Use Certificate
satisfies the protections required by the ITAR. Until now,
MOD has submitted its own End Use Certificate in lieu of
signing block 8 of the DSP-83 because in past cases, the end
user of the material/data to be transferred was a government
entity. Therefore, the signature of the end-user in block 7
was sufficient and the fact that the Spanish Government
attached its own End Use Certificate Spanish was irrelevant
to the USG. The GOS, however, understood that its End Use
Certificate was being accepted in lieu of signing block 8.
MOD is aware of the option offered by the ITAR to use an
exchange of dip notes in place of signing a DSP-83. MOD,
however, notes that the GOS's end user certificate is legally
binding, thus offering greater legal assurance than a dip
note.

6. ACTION REQUEST: The broader issues raised by this case
could be addressed by the Export Controls Working Group of
Declaration of Principles when the group meets in May 2007.
However, a near-term solution is needed to avoid Lockheed
Martin and Navantia incurring serious contract penalties as a
result of the work stoppage and to avoid disrupting the Royal
Norwegian Navy's associated training programs. Post is aware
that DDTC has developed various work-arounds with other
European allies that have similar restrictions against
signing a DSP-83. Post requests DDTC guidance as to how to
resolve this impasse with Spain.
LLORENS

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