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Cablegate: Taiwan: Results of Blue Lantern Pre-License End-Use Check

VZCZCXYZ0000
PP RUEHWEB

DE RUEHIN #0118 0240913
ZNR UUUUU ZZH
P 240913Z JAN 08
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC PRIORITY 7979
INFO RUEAIIA/CIA WASHDC
RUCPDOC/USDOC WASHDC
RUEKJCS/SECDEF WASHINGTON DC
RHMCSUU/FBI WASHINGTON DC
RUEPINS/HQ BICE INTEL WASHINGTON DC

UNCLAS AIT TAIPEI 000118

SIPDIS

STATE FOR EAP/TC, PM/DTCC AND ISN/MTR
STATE PASS TO AIT/W

PM/DTCC FOR BLUE LANTERN COORDINATOR RACHAEL-THERESE JOUBERT-LIN

SIPDIS
FROM AIT KAOHSIUNG BRANCH OFFICE

E.O. 12958: N/A
TAGS: ETTC KOMC TW
SUBJECT: TAIWAN: RESULTS OF BLUE LANTERN PRE-LICENSE END-USE CHECK
05-050080535

REF: A. STATE 001652 B. Taipei 01137

1. (SBU) Per reftel A request, AIT Kaohsiung visited Yeou Zheng Co.
and a residential space used as a warehouse in downtown Kaohsiung,
and interviewed the company's owner, Ms. Chen Mei-liu and other
staff. AIT/K also conducted two telephone interviews with
Lieutenant Commander Liang Dao-hung, who is responsible procurement
of commodities for the Ma Kung Naval Base's Taiwan Logistics
Supporting Command (TLSC).

2. (SBU) Yeou Zheng owner, Chen Mei-liu, told AIT/K that her family
owns three separate companies that supply goods to the Ma Kung Naval
Base. The three companies are: Yeou Kang which focuses on computer
wiring installation for the Ma Kung Navy; Yeou Zheng Industry, which
supplies the navy's general hardware Industry; and Yeou Zheng Co.,
which supplies the navy with consumer goods. According to Chen, her
family has been doing business with the Ma Kung Naval Base for more
than 30 years, starting with her father-in-law. Chen and her staff
(Hung Yang-chun and Jill Hung) all claim familiarity with U.S.
restrictions on the procurement of US Munitions List commodities.

3. (SBU) Chen admitted to us that Yeou Zheng has not yet received
an order for the antenna indicated on reftel A, nor has the navy put
out a tender for bids on the item; however, she said that she and
her staff are very familiar with the naval base's supply needs and
she expects the base to request those antennas within a few months,
if not weeks. To recap, the order for 11 (eleven) pieces of
AS-1729/VRC Antennas are not for any current contract; rather, Yeou
Zheng anticipates the base will need the antennas for future repairs
that are due in 2008. Chen went on to say that when it places
orders, the Navy expects to take delivery of the goods within 60
days. However, Yeou Zheng's U.S. suppliers need 180 to 300 days
before they can deliver goods to Yeou Zheng in Taiwan. In order to
meet the Taiwan navy's 60 day delivery requirement, Yeou Zheng
orders goods in advance of even receiving a request for bids.

4. (SBU) Chen said Yeou Zheng supplied a total of 23 (twenty-three)
AS-1729/VRC Antennas (in three separate orders/contracts) to the Ma
Kung Naval Base in 2007. Yeou Zheng faxed copies of the three
contracts to AIT/K which showed the contracts were granted in 2007
on June 14, August 21, and October 23 respectively. Lieutenant
Commander Liang confirmed that the Ma Kung Naval Base procured the
23 AS-1729 VCR antennas (with NSN number 5985-00-985-9024) from Yeou
Zheng to use during the second half of 2007. The Navy supplied the
antennas to two naval vessels and gave the remainder to three other
Navy offices. Liang confirmed that the Navy typically allows
winning bidders up to 50 days to deliver ordered goods. Liang told
AIT/K that Yeou Zheng is a key supplier for the Ma Kung Naval Base.
Liang stressed that he believes Yeou Zheng to be a reliable company.
Liang said the Navy has not yet determined its 2008 procurement
plan, so he cannot confirm which items they will require in coming
weeks and months. He also could not confirm that Yeou Zheng would,
in the end, submit the winning bid.

5. (SBU) Yeou Zheng's office is reasonably secure, with
closed-circuit television cameras monitoring the outer perimeters,
the first-floor entrance from the interior, and the first-floor
staircase leading to the upper floors; rolling metal gates secure
the street-level front entrance and the doors that open to the
balcony areas. A roof-top door stainless steel door is secured with
a padlock. The office is on the bottom floor of the building. The
remaining four floors are used as residential space, save for a
fourth floor room that serves as the company's warehouse. Again,
the building appears to be sufficiently secure.


Thiele


Young

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