Cablegate: Blue Lantern Level 3: Pre-License End-Use Check On

VZCZCXYZ0015
RR RUEHWEB

DE RUEHMO #3118 2970553
ZNR UUUUU ZZH
R 230553Z OCT 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 0480
INFO RUEHSM/AMEMBASSY STOCKHOLM 1372
RUCPDOC/USDOC WASHINGTON DC
RUEKJCS/SECDEF WASHDC
RHMFIUU/FBI WASHINGTON DC
RUEAIIA/CIA WASHDC
RHMFIUU/HQ BICE INTEL WASHINGTON DC

UNCLAS MOSCOW 003118

SIPDIS
DEPARTMENT FOR PM/DDTC - BLUE LANTERN COORDINATOR

E.O. 12958: N/A
TAGS: ETTC KOMC RS
SUBJECT: BLUE LANTERN LEVEL 3: PRE-LICENSE END-USE CHECK ON
APPLICATION 050122921

REF: STATE 102660

1. (SBU) Summary: Kumertau Aircraft Production Enterprise
representatives told us their company is ultimately controlled by
RosOboronExport (ROE). TechPromService representatives told us,
however, that the company is a private enterprise not affiliated
with ROE. We were unable to conduct site visits to assess the
security of the companies' facilities, but both companies told us
the security at their facilities must be tight in order to handle
state secrets. Kumertau Aircraft Production Enterprise produces and
sells civilian and military helicopters; it is not a broker.
TechPromService, however, is a broker. This particular United
States Munitions List (USML) item will be installed on helicopters
that TechPromService will lease to OboronProm Leasing, a company
that is ultimately controlled by ROE. Neither Kumertau Aircraft
Production Enterprise nor TechPromService provided us with copies of
the contract regarding this transaction, but General Director of
TechPromService did send us a letter that said his company would
install SX-16 infrared searchlights on the helicopters. Both
Kumertau Aircraft Production Enterprise and TechPromService
understand restrictions on USML items, including their re-export.
End Summary.

2. (U) In an October 17 meeting Kumertau Aircraft Production
Enterprise Deputy Director General Sergey Sayganov told us his
company has been in business since 1962. The General Director of
the company is Mikhail Malarenko. According to Sayganov, 100
percent of the company's shares are owned by the GOR. Kumertau
Aircraft Production Enterprise is controlled by Kamov Holding
Company, which is controlled by Helicopters of Russia, which is part
of OboronProm, which is part of ROE, which is controlled by
RosTekhnologii.

3. (U) TechPromService Legal Counselor Sergey Khomenko told us
October 16 that his company is a private enterprise founded on
August 31, 2000. The General Director is Oleg Yunusov and the
Commercial Director is Rafail Rafikov. Khomenko told us his company
was not affiliated with ROE.

4. (SBU) We were unable to conduct site visits to assess the
security of the facilities for either company. Sayganov and
Khomenko told us, however, that their companies collocate their
civil and military production facilities, and so are secure enough
to house state secrets.

5. (U) Kumertau Aircraft Production Enterprise produces and sells
civilian and military helicopters and spare parts. It does not act
as a broker. TechPromService, however, is a broker. It refurbishes
old helicopters, such as those produced by Kumertau Aircraft
Production Enterprise, and then resells or leases them to other
entities.

6. (U) Kumertau Aircraft Production Enterprise typically sells its
helicopters to customers in Russia and the CIS, including the
Russian military. TechPromService often works with Kumertau
Aircraft Production Enterprise, Kamov Holding Company, RosVertol, in
Russia, and Motor Sich, in Zaporozhiye, Ukraine.

7. (U) While we did not receive a copy of the contract related to
this transaction, we did receive a letter from the TechPromService
General Director that said this USML item will be installed on
KA-32A11BC search and rescue helicopters. According to Sayganov,
TechPromService will lease the helicopters to OboronProm Leasing, a
company which is controlled by OboronProm, which is controlled by
ROE. The helicopters will be used only in the Russian Federation.

8. (U) Kumertau Aircraft Production Enterprise and TechPromService
understand the restrictions on USML items, especially the
prohibition against unauthorized re-transfers and re-exports.

BEYRLE

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