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Cablegate: Taiwan: Results of Blue Lantern Broker Check No. K-1198

VZCZCXYZ0000
RR RUEHWEB

DE RUEHIN #1360 3200811
ZNR UUUUU ZZH
R 160811Z NOV 09
FM AIT TAIPEI
TO SECSTATE WASHDC 2718

UNCLAS AIT TAIPEI 001360

SIPDIS

STATE FOR EAP/TC, PM/DTCC AND ISN/MTR

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


E.O. 12958: N/A
TAGS: ETTC KOMC TW
SUBJECT: TAIWAN: RESULTS OF BLUE LANTERN BROKER CHECK NO. K-1198

REF: STATE 99476

1. (SBU) Summary: Per reftel request, AIT/T Econ officer and FN
visited U&U Engineering International Inc., and interviewed Mr.
Cheng Tung, who serves as company Chairman and President. End
summary.

2. (SBU) U&U Engineering International Inc. was established in 1992
and now employs approximately 130 employees in six locations in
Taiwan. The company's headquarters is located in Taipei at the
address provided in reftel. Its five branch offices around the
island include one factory in Lung-Tan, the Lung-Yuan Service Center
inside the Chung Shan Institute of Science and Technology (CSIST),
one maintenance office in Hualien, one maintenance office in
Kaohsiung, and one maintenance office in Taipei handling
green-energy projects.

3 (SBU) According to the Bureau of Foreign Trade (BOFT), Ministry of
Economic Affairs (MOEA), U&U Engineering International, Inc. is
registered as a trading company. The company's registration
information, including the company's address and contact numbers, is
identical to the reference stated in paragraph three of reftel. The
company's website is www.uuei.com.tw

4. (SBU) Part of U&U's business focuses on providing spare-parts and
maintenance support to Taiwan's military agencies. After contracts
are signed between the U.S. company and Taiwan, U&U is subcontracted
by the U.S. entity to do the maintenance for Taiwan military units
and receives the necessary parts and technology from the U.S. to
fulfill the contract. U&U is a representative agent for both
U.S.-based ITT and BAE systems. Therefore, when ITT or BAE sign a
contract with a Taiwan entity, in accordance with the offset rules,
U&U provides technical support to Taiwan clients. U&U also sells
military parts to Taiwan firms.

5. (SBU) Aside from being a military-parts and service broker, U&U
also manufactures commercial products, including infrared cameras
and traffic monitor systems/sensors. U&U does not need to import
components from the U.S. to produce these commercial products.
Because it has been difficult for U&U to access the market in Taiwan
for its indigenously-produced commercial products, the company has
sought to introduce its products in China, for which it has gained a
small number of contracts that will start next year.

6. (SBU) Because of the high value of the company's parts and
equipment, U&U employs monitoring systems at all storage areas
within its facilities. Technicians in each division can only access
their division's storage areas, and each division maintains
independent operations and financial management functions.

7. (SBU) Mr. Cheng stated he understood the USML restrictions, as he
realizes that all U&U's business sensitive and advanced. As such,
he requires his staff to maintain records of all business
transactions and all commercial activities.

8. (SBU) AIT has no derogatory information in its files concerning
U&U Engineering International, Inc. AIT learned through our Taiwan
law enforcement sources, however, that Mr. Cheng was accused of
committing the offence of "Intimidation" and charged with
"Corruption" in 2005 but was not indicted; in addition, Mr. Cheng
was charged with "Interference in the Use of Computers" in 2009 but
also was not indicted.

9. (SBU) Comment: Accusations of fraud, forgery, and other
business-related crimes are very common in Taiwan, and because this
broker was not indicted of any crimes, we believe this information
does not call into question the bona fides of the broker. End
Comment.

Stanton

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