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Cablegate: Blue Lantern Site Visit to Lom Praha S.P.

VZCZCXYZ0013
RR RUEHWEB

DE RUEHC #0692 3182114
ZNR UUUUU ZZH
R 132101Z NOV 08
FM SECSTATE WASHDC
TO RUEHPG/AMEMBASSY PRAGUE 9148
INFO RHMCSUU/FBI WASHINGTON DC 1988
RUEAIIA/CIA WASHINGTON DC 0345
RUCPDOC/USDOC WASHINGTON DC 4665
RUEKJCS/SECDEF WASHINGTON DC
RUEPINS/HQ BICE INTEL WASHINGTON DC

UNCLAS STATE 120692

SIPDIS
PRAGUE FOR DAN GELMAN AND PATRICK ELLSWORTH

E.O. 12958: N/A
TAGS: ETTC KOMC EZ
SUBJECT: BLUE LANTERN SITE VISIT TO LOM PRAHA S.P.
POST-SHIPMENT CHECK ON LICENSE 050091548

REF: STATE 91448

1. SUMMARY: In response to reftel Poloff and PM/DDTC team
conducted a site visit at Lom Praha S. P. (LP) in order to
verify its relationship with the Czech Republic Ministry of
Defense and establish the bona fides of this export involving
communication and navigation equipment for the Mi-171
helicopter. On September 9, 2008 Embassy team met with the
following LP representatives: Director of Aircraft Division,
Miroslav Komarek, Security Director, Dusan Franko, and
Modernization Project Manager, Martin Jilek. Despite
concerns over the periodic presence of Russian technicians at
the Mi-171 worksite, as required under EU regulations, team
views LP as a reliable recipient of U.S.-origin defense
articles and technology.

2. LP presented Embassy team with an end-user statement
provided by the Czech Republic MoD signed by Acting Director
Mgr. Jiri Stanek on 19 February 2008; confirming that the
navigation component parts would be used for testing on the
Czech Air Force Mi-171Sh helicopter. The document stated
further that the goods will remain Czech property and not be
resold or retransferred. Post sought to determine LP,s
familiarity with the International Traffic in Arms
Regulations (ITAR) and its restrictions on the unauthorized
retransfer and re-export of United States Munitions List
(USML) items; stressing in particular the restrictions
regarding the unauthorized third-party transfer of associated
technical data. LP exhibited familiarity with ITAR
regulations and provided assurances against the unauthorized
transfer of the component parts and associated technical
data. Embassy team,s overall impression was that LP,s
staff appeared organized, disciplined and generally
knowledgeable regarding ITAR regulations/restrictions.

3. Blue Lantern team sought assurances regarding the
status of Russian technicians who plan to visit LP at certain
pre-approved times, in order to review status of work on the
Mi-171 helicopters. Since the Mi-171,s were originally
manufactured by Russia, European Union regulations require
the manufacturer, in this case a team from a Russian Design
Bureau to provide mechanical inspection and ensure the
general airworthiness of the helicopters. The potential
presence of Russian technicians raised concerns that
technical data related to U.S.-origin navigation and
communication systems could be retransferred to Russia. LP
explained that the role of the Russian technicians would be
limited to the installation of larger systems into the
aircraft, as required under EU regulations. LP provided
assurances that Russian entities would not have access to
U.S.-origin technology, nor would any technical data on such
systems be shared.

4. LP,s physical location consists of an office building
and a series of warehouses large enough to house aircraft.
Security Director Franko indicated that all USML items
received by LP are stored under lock and key in the warehouse
facilities. Embassy team confirmed their general security
level while performing an inspection of a warehouse and the
Mi-171Sh helicopter in which the navigation test equipment
would be installed. Inside the warehouse the helicopters
were cordoned off by a several-foot high opaque fence
disallowing access to those who would not be working on the
project. Mr. Franko indicated that there would also be a
sign-in roster outside of the warehouse/project entrance
which would be checked frequently ensuring access to
authorized personnel only.

5. Embassy team,s site visit confirms the bona fides of
the transaction, LP,s relationship to the Czech Republic MoD
and establishes LP as a generally reliable recipient of USML
articles.
RICE

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