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Cablegate: Response for Blue Lantern Level 3: Pre-License End-Use

VZCZCXYZ0001
RR RUEHWEB

DE RUEHKO #2239 2672314
ZNR UUUUU ZZH
R 242314Z SEP 09
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 6420
INFO RUEAIIA/CIA WASHINGTON DC
RHMFIUU/FBI WASHINGTON DC
RUCPDOC/USDOC WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RHMFIUU/HQ BICE INTEL WASHINGTON DC

UNCLAS TOKYO 002239

SENSITIVE
SIPDIS

PM/DTCC - BLUE LANTERN COORDINATOR

E.O. 12958: N/A
TAGS: ETTC KOMC JA
SUBJECT: RESPONSE FOR BLUE LANTERN LEVEL 3: PRE-LICENSE END-USE
CHECK ON LICENSE 050185582

REF: STATE 090555

1. (SBU) Post submits the following information in response to
reftel inquiry. Emboffs visited the premises of the foreign
consignee, Mitsuhiro Corporation, and spoke with the firm's
president, Kenzaburo Nagao, Managing Director Atsushi Kato, and
Iyori Imamura and Takaaki Kato (identified below as T. Kato), two
employees with direct knowledge of reftel transaction September 16.
In addition, emboff corroborated information on the transaction with
the foreign end-user, the Japanese Ministry of Defense (MOD)
September 14.

2. (SBU) Nagao said Mitsuhiro Corporation, which incorporated as a
trading company in 1992 and has five employees, mainly procures
parts for small and medium construction machinery companies within
Japan. In May 2009 the firm began a new line of business importing
goods for the MOD. Mitsuhiro Corporation's relationship with the
U.S. seller, Trans-Aero International, began shortly thereafter.
Nagao said Mitsuhiro Corporation took up the military procurement
business vacated by another firm, Goyo Shoji, which went bankrupt in
April 2009.

3. (SBU) During a September 24 follow-up phone call, Imamura
explained Goyo Shoji had several distributor contracts with U.S.
manufacturers and exporters, including Trans-Aero International.
After Goyo Shoji's bankruptcy, the MOD was looking for qualified
companies that could carry on the defunct firm's outstanding
contracts. Mitsuhiro had many contracts with the GOJ for
construction projects, including with the MOD. Accordingly,
Trans-Aero International and Mitsuhiro Corporation concluded a
distributor contract around April 3, 2009.
4. (SBU) Mitsuhiro Corporation's main clients for this line of
business are the Japan Ground Self Defense Force and Japan Air Self
Defense Force (JASDF), to which the firm supplies parts for Patriot
missile-related equipment. Mitsuhiro Corporation also has business
with Mitsubishi Electric Corporation.
5. (SBU) Imamura presented an original procurement contract signed
by Nagao and an official from the Japan Air Self Defense Force
Fourth Depot in Iruma, Saitama Prefecture on August 13, 2009. The
deadline for delivery is February 26, 2010.
6. (SBU) According to Imamura, a freight forwarder, K Line
International, will clear the commodity with customs, then, if the
shipment is not too big, will deliver it to Mitsuhiro Corporation's
office. If the item as shipped is too large, the forwarder will
store it in its storage facility in Baraki, Chiba Prefecture.
Imamura said the company often uses a delivery company to deliver
goods to the end-user, but employees accompany the goods in order to
observe the inspection by Japan Self Defense Force officials. The
goods will arrive and be delivered to the end-user in one shipment,
and will not be stored or stock piled in Mitsuhiro Corporation's
Office.
7. (SBU) Mitsuhiro Corporation's office is located in a single room
within a commercial building in Minato-ward, Tokyo. The firm
contracts with a private security company for burglary detection,
and the building is also securely locked in the front during
non-business hours. After the front door is locked, the elevator
will not stop at their floor. Imamura said the firm had no thefts.

8. (SBU) Imamura and T. Kato stated Mitsuhiro Corporation
understands the restriction on U.S. Munitions List (USML) items and
the prohibition against unauthorized re-transfer and re-export.
Imamura and T. Kato were both previously employed by Goyo Shoji,
which had several contracts with distributors of USML items.
9. (SBU) Separately, Kenichiro Teramoto, an official in the Ministry
of Defense (MOD), Equipment Policy Division, confirmed the JASDF
Fourth Depot is the end-user. Teramoto confirmed via e-mail the
JASDF is procuring 353 units of Arming Unit, Electromechanical Part
No. 7631354-10 from Trans-Aero International, Inc. through Mitsuhiro
Corporation to repair electronic components installed in bomb racks
for F-15 fighter jets.
ROOS

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