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Cablegate: Favorable Reply to Blue Lantern 050191953

VZCZCXYZ0012
RR RUEHWEB

DE RUEHMD #1050/01 3011208
ZNR UUUUU ZZH
R 281208Z OCT 09
FM AMEMBASSY MADRID
TO SECSTATE WASHDC 1382

UNCLAS MADRID 001050

SIPDIS

PM/DTCC - BLUE LANTERN COORDINATOR (TIM MAZZARELLI)
STACIE ZERDECKI, EUR/WE

E.O. 12958: N/A
TAGS: ETTC KOMC SP
SUBJECT: FAVORABLE REPLY TO BLUE LANTERN 050191953

REF: A. STATE 102227
B. INFORMA FINANCIAL REPORT ON SUPEIM (PROVIDED
UPON REQUEST)

1. SUMMARY: Post has made inquiries and conducted site
visit requested reftel and recommends speedy action to
approve export license application number 050191953 for the
export of night vision devices to Spain for the use of the
Spanish Army. Long-time habitual Ministry of Defense
supplier Suministros Peninsulares Importados (SPI or SUPEIM),
while relatively new to importing USML items, is on track to
achieve various Spanish and international certifications and
appears to be a good candidate for MOD acquisitions that may
otherwise be derailed due to the U.S. Policy of Denial toward
Elint, S.A. Further, SUPEIM has requested Post's assistance
in connecting with U.S. suppliers of specialty items such as
lifejackets for helicopter pilots, and plans to work with the
U.S. Commercial Service to that end. SUPEIM's involvement in
subject transaction also provides an alternative avenue for
distribution to Needham, Massachusetts-based N-Vision Optics
LLC, recently prevented from exporting a number of night
vision goggles to Spain due to malfeasance on the part of
Elint. END SUMMARY.

2. Spanish Ministry of Defense contacts confirmed October 14
the existence of various partial orders to the company
Suministros Peninsulares Importados (SPI or SUPEIM) totaling
30 image intensifier tubes (IITs) worth a combined total of
US $78,000. Captain Eladio Ferreiro, Head of the Export
Control Unit within the Directorate General of Armament and
Materiel (DGAM) at the Spanish Ministry of Defense, further
confirmed the end use and end user as stated. The new tubes,
destined for the Spanish Army, will be substituted for other
identical yet damaged components installed in current
AN/PVS14 monocular devices.

3. SUPEIM General Manager Antonio Rubio Rubio likewise
confirmed during an October 20 site visit that his company
had received a number of smaller orders from PCMASACOM (a
GSA-type supplier internal to the Spanish defense apparatus
and armed services) totaling 30 tubes, to replace damaged
tubes in existing night vision devices. He combined the
orders into a single purchase order dated September 2. Rubio
told pol-mil officer he would retain positive control over
the IITs at all times prior to their transfer to the Spanish
Army. He indicated he strives for same-day turn-around on
any sensitive or high-value orders, and added that the
PCMASACOM delivery address was located less than 5 minutes'
drive from his facility. (Note: Embassy staff can confirm
his facility's proximity to PCMASACOM.) It is even possible,
he suggested, that these tubes could be delivered directly to
the Army, with only documentary participation by his company.

//SUMINISTROS PENINSULARES IMPORTADOS S.L.//

4. SUPEIM is a small, privately held defense supplier that
has been doing business almost exclusively with the Spanish
Ministry of Defense and law enforcement agencies since the
company's establishment in 1992. Antonio Rubio Rubio is its
only director. Spanish business information service INFORMA
lists Rubio along with his wife, Maria Estrella Castro Munoz
as the only two shareholders. The company's financials (ref
B) are generally good, although Rubio confided he hopes to
get additional orders from the MOD. From an employment high
of 16-17 personnel, SUPEIM "in crisis" now employs only eight
or nine at its Alcorcon location in an industrial park about
20 minutes west of downtown Madrid.

5. Asked what types of items SUPEIM handles, Rubio said the
company was "at the service" of its customers -- all domestic
defense and law enforcement entities, including both Guardia
Civil and the Spanish National Police. He also supplies
Eurocopter, which manufactures the Super Puma and repairs
Chinooks. To the extent SUPEIM specializes, he deals in
military replacement parts and items difficult to find on the
domestic market, including everything from greases and oils
to antennas and electronic components. On a tour of the
company warehouse, Rubio pointed out boxes of items as varied
as transparent tape, reflector lights for vehicles, office
telephones, Bosch power tools, and standard Spanish blue
coverall uniforms imprinted with the PCMASACOM logo. This is
the first time that SUPEIM has ordered night vision devices
and the first time Rubio has worked with N-Vision, which had
the needed tubes in stock. The only other instance in which
Rubio said he had experience with the U.S. export licensing
system was in ordering controlled replacement parts for
combat helmets two to three years ago. (COMMENT: SUPEIM
seems to be a "defense supplier" in the most literal sense of
the term, a go-to source used more often so far for
administrative, office, and even cleaning products used by
defense headquarters. This transaction could well be a test
case of an otherwise reliable and trusted supplier with more
sensitive battlefield components. END COMMENT.)

6. Asked about his company's security and accounting
practices, Rubio stated SUPEIM has a Security Agreement with
the MOD and strictly complies with all related protocols.
The company is ISO 9001 certified and seeking additional
certifications. In keeping with these and other best
practices, SUPEIM prepares orders quickly, verifying serial
numbers as needed and getting items out to their end-users as
quickly as possible. In an ideal scenario, freight
forwarders or shipping agencies deliver material in the
morning, when SUPEIM's cashier is on duty to pay for
transport costs. Trained staff then take an hour or less to
ready the product for onward "just-in-time" delivery. Rubio
makes it a practice not to keep merchandise overnight unless
it is delivered too late to forward within a single business
day. Most orders are processed and sent out within one day,
same-day or next-day delivery. At most, SUPEIM could retain
products 10-15 days in its warehouse if waiting to complete a
single order fulfilled by diverse suppliers. Asked if he
understood the restrictions on unauthorized stockpiling of
USML items, Rubio reiterated his intention to get the tubes
and any other sensitive or costly equipment to their
authorized end-users in the shortest term feasible.

7. Company offices are located upstairs from a medium-sized
warehouse that doubles as a garage for two mid-sized delivery
trucks. Technicians make some small repairs in the warehouse
to generation and other heavy equipment, and the warehouse
contains products in circulation, all clearly marked as to
their status in the receiving and delivery cycle. Both the
warehouse and office are monitored by security circuit
cameras and motion detectors, linked 24 hours to police as
well as private contract security in the industrial park.
Rubio admitted the equipment was so sensitive that he had
received 1 a.m. phone calls when sheets of paper slipped from
the walls.


CHACON

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