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Cablegate: Blue Lantern Level 3: Pre-License Check On Application

VZCZCXRO2133
RR RUEHGA RUEHHA RUEHQU RUEHVC
DE RUEHMT #0302 2061428
ZNR UUUUU ZZH
R 251428Z JUL 07
FM AMCONSUL MONTREAL
TO RUEHC/SECSTATE WASHDC 0649
INFO RUCNCAN/ALCAN COLLECTIVE
RHEFHLC/DEPT OF HOMELAND SECURITY WASHDC

UNCLAS MONTREAL 000302

SIPDIS

SIPDIS

STATE FOR PM/DTCC - Blue Lantern POC - Michael Romero

SENSITIVE

E.O. N/A 12958: N/A
TAGS: ETTC KOMC NL CA TU GM NO
SUBJECT: Blue Lantern Level 3: Pre-License Check on Application
05-050048064

REF: A. SECSTATE 87824
B. THE HAGUE 1356

1. (SBU) Conoff contacted Rheinmetall Canada headquarters in
St-Jean-sur-Richelieu, Quebec. All officials contacted were helpful
and forthcoming, and though they had not been contacted by the
Mission in the past, understood the purpose of our questions.

2. Natalie Nantel, Transport Coordinator, confirmed that the order
had been placed, and that the product was destined for the Royal
Dutch Army. However, she said that the license number in Ref A,
05-050048064, may have been changed because of an error in the
initial license application. The project described in reftel
requires "FGBAD Consoles" rather than "ASRAD Consoles" necessitating
a change in the order to U.S. supplier Vicor Corporation.

2. Conoff also spoke to Pierre Lord, Security Coordinator and
Raymond Houle, Senior Procurement Manager and ITAR Coordinator.
Lord said that the company has applied for and been granted several
DTCC Licenses over the last twenty years, and is fully aware of the
restrictions on the export of U.S. defense articles. He said that
the facility in St-Jean is "NATO-Secret" certified for secure
handling of defense technology.

3. Houle said that Rheinmetall Canada's role in the transaction is
to assemble and integrate the U.S. components into the consoles.
These consoles would then be transferred to EADS in Germany, who
would install the consoles into the armored personnel vehicles. The
vehicles would then be transferred to the Dutch. Under ideal
circumstances, Houle said, the U.S. technology would not have to be
handled by the other three intermediate consignees: Krauss-Maffei
Wegman, Kongsberg, and Aselsan. Rheinmetall added them to their
license application in case it was necessary for any of them to make
a modification or perform testing after the U.S. technology was
installed into the vehicle. Krauss-Maffei Wegman is the
manufacturer of the basic vehicle. Normally, the vehicle would be
shipped from Krauss-Maffei Wegman to Kongsberg defense, where a
radar system would be installed, and then shipped to EADS. EADS
would then install Rheinmetall's console, with U.S. technology,
completing the vehicle for the Dutch Royal Army. Aselsan, a company
that EADS uses for testing of its products, was also included, so
that testing could be performed at their facility, if necessary,
without changes to the license.

4. Rheinmetall Canada, formerly Oerlikon Contraves Canada, supplies
defense hardware and software mainly to the Canadian Forces, but
also to other military customers, such as France, Belgium and the
Netherlands, as well as the U.S. and Canadian Coast Guard.
Rheinmetall Canada has also contracted with the Port of Dakar,
Senegal to upgrade the security of the country's main commercial
port. The company has been in business since 1986.

4. Post was not able to arrange a site visit in time for this
report. A site visit will be arranged at the earliest opportunity.

MARSHALL

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