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Cablegate: Blue Lantern Pre-License End Use Check On Licenses

VZCZCXYZ0004
OO RUEHWEB

DE RUEHBK #2985/01 3281026
ZNR UUUUU ZZH
O 241026Z NOV 09
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9068
INFO RUETIAA/DIRNSA FORT GEORGE G MEADE MD IMMEDIATE
RUEAIIA/CIA WASHINGTON DC IMMEDIATE
RHMCSUU/FBI WASHINGTON DC IMMEDIATE
RUEKJCS/SECDEF WASHINGTON DC IMMEDIATE
RUCPDOC/USDOC WASHINGTON DC IMMEDIATE

UNCLAS BANGKOK 002985

SIPDIS

FOR PM/DTCC - BLUE LANTERN COORDINATOR

E.O. 12958: N/A
TAGS: ETTC KOMC TH
SUBJECT: BLUE LANTERN PRE-LICENSE END USE CHECK ON LICENSES
050190040, 050190045, 050190058, 050190070, AND 050190074

REF: STATE 98729

1. (U) According to the Thai Ministry of Commerce, Raja
Firearms Partnership, Ltd. was listed.

Registration No. 0103508008460
Registered Date: October 12, 1965
Status: Limited Partnership
Capital Registration: 5,000,000 baht
Partners: Vijay Sachdev, with an investment of 2,200,000 baht
and Kurada San Singh, with an investment of 2,800,000 baht
The managing partner is Vijay Sachdev.
Company Location: 45, Burapha Rd., Wang Burapha Phirom
Sub-District, Phra Nakhon, Bangkok
The company has submitted annual financial reports for
1999-2008.
Purpose of Company: To manufacture and sell of weapon
detection equipment and hand grenades.

2. (U) Raja Firearms was listed in the Phone Directory with
the phone numbers as stated reftel. However, the house number
registered in the directory was 41, not 45 as stated reftel.

3. (U) We visited Raja Firearms twice; first on October 9, at
the shop in Wang Burapha Phirom, and second on October 19, at
its administrative office on Sukhumvit road. The shop was
located as addressed (Note: house no. 45), in an area known
for firearm shops. The shop was two-connecting shophouses
with the upper floors used as living quarters. The shop was
busy with many customers. Five employees were present but
they referred us to meet with Vijay Sachdev, who primarily
works at the administrative office on Sukhumvit Road.
Sachdev met with us at his office on the ninth floor of a
condominium building called Grand Mercure. This building was
part of the family business, and was located at No. 50,
Sukhumvit Road, Soi 19, North Khlong Toei Sub District,
Wattana District, Bangkok.

4. (U) Cable inquiries:

- When was your company established and who are its
principals?

Response: Raja Firearms was established in December, 1965
with two principals as stated in the business registration.
The shop at Wang Burapha Phirom area is the sales office and
the Sukhumvit office is for administration. Raja Firearms
has 8 other branches/networks, namely: Chan Firearms; Nakhon
Luang Firearms; GP Inter Arms; Thai Union Firearms; Kampanat
Firearms; Nanthaphon Firearms; Kurada San Singh Firearms; and
Pistol Master Co., Ltd. (Each branch has a firearm permit,
one permit allows an import and sale of not more than fifty
rifles, thirty pistols, and a portion of ammunition per
year).

- What is your role in these transactions?

Response: Raja Firearms has signed two contracts with the
Bureau of Investigation and Legal Affairs for the
order/import of firearms: Sig Sauer - numbering 43 pieces for
the first contract (No. 19 Part 1) and 1,178 pieces for the
second contract (No. 19 Part 2), on behalf of the Bureau, for
domestic sale and use by Thai government officials under the
Welfare Project of the Department of Provincial
Administration. These lots of firearms must be delivered to
the Bureau for distribution to buyers by July 22, 2012. Some
ten to twenty other firearm companies have also obtained this
type of contract with the Bureau with varies of quotas.
These contracts are special firearm quotas, specifically
approved by the Interior Minister.

- Is your company receiving any fees or commission for your
services in this transaction?

Response: Yes, like other business, Raja receives the gains
from selling these firearms. Firearms under this Welfare
Project are cheaper than those purchased in the regular
market (roughly 30 - 40 percent cheaper). The sales price
was determined by the Bureau prior to the signing of
contracts, not by the firearms shops.

- Are you familiar with the regulations governing the import
of US-origin defense articles, including restrictions on
re-transfer or re-export?

Response: Yes, Raja Firearms imports and sells many U.S. and

European-origin firearms, such as Sig Sauer, Remington,
Walther, Fiocchi, and Mannlicher-Steyr. The company complies
with both foreign and Thai laws regarding firearms. The
company signs DSP-83s: End-User Certificate to present to the
US authority to acknowledge and certify the said regulations.
Import, sales, and buyer information records will be kept by
both the Bureau and Raja, both in hard copy and in a computer
system. Per the Welfare Project's regulations, a gun
purchased under this project cannot be transferred to other
person within 5 years after delivered to the origin buyer.

- What is the ultimate end-use for the firearms you will
provide to Bureau of Investigation and Legal Affairs?

Response: This is the Department of Provincial Administration
Welfare Project, organized by the Department Bureau of
Investigation and Legal Affairs, to supply firearms to
government officials of all state agencies/ministries
nationwide who are qualified and willing to purchase firearms
on their own. Potential buyers must register and pay for
their firearms in advance at the Bureau or at Raja Firearms.
What Raja has written in its purchase orders to the US
manufacturers with copy to the Bureau is: "We, Raja Firearms
Ltd., Part., certify that the products in this order will be
used to serve duty of Welfare Project of Investigation and
Legal Affairs Bureau Department of Provincial Administration
use within Thailand only."

- Does your company have any input or involvement in the
process by which the Bureau determines who will receive a
firearms?

Response: No, it is solely the Bureau's determination and
regulations. As stated above, the potential buyers must be
state officials and register in advance with the Bureau.
Ordinary citizens are not allowed in the project. Most of
buyers (approximately 80 percent are police, military, and
territorial defense personnel. Others are civilian law
enforcement personnel, such as drug suppression officials,
Ministry of Interior officials, Ministry of Justice
officials, park and forestry officials, and lastly state
education personnel in the Deep South who are affected by the
southern insurgency. They buy their own personal weapons
since state-issued firearms are inadequate and some are
relatively old and unreliable, or some officials are not
subjected to the government-issued firearms (such as
teachers). These firearms will be used in their government
capacity and personal protection.

- How did the Bureau describe the ultimate end-use of these
firearms to your company? Please provide any documentation
you received from Bureau of Investigation and Legal Affairs
that describes the ultimate end-user of these firearms.

Response: The documents from the Bureau to Raja Firearms
stated: We further confirm that the above goods will be
supplied to and used in the service of the Investigation and
Legal Affairs Bureau Department of Provincial Administration
and will not be transferred nor re-exported to any other
country out of Thailand without the prior written
authorization of the Government of USA.

- How did you describe the ultimate end-use of these firearms
to the U.S. vendor? Please provide any documentation you sent
to the U.S. vendor that describes the ultimate end-use of
these firearms.

Response: The documents from Raja Firearms to the U.S. vendor
certifying the ultimate end-user of these firearms stated:
"We, Raja Firearms Ltd., Part., certify that the products in
this order will be used to serve duty of Welfare Project of
Investigation and Legal Affairs Bureau Department of
Provincial Administration use within Thailand only."

- Please explain why these firearms were ordered via five
separate purchase orders instead of one.

Response: There are three main reasons.

1. The Bureau's limited storage space. If thousands of
firearms were to arrive at the same time, the Bureau would
not have enough space to store them. They must be gradually
ordered and imported, temporarily stored at the Bureau
pending documentation and distribution, and then gradually
distributed to the buyers. Raja would not store these
weapons since it does not have enough space. The imported

weapons would be transported directly from Thailand's port of
entry to the Bureau's storage facility.

2. Costs to the company: This is about financial and risk
management. To order a larger number of firearms at one
time, the company has to advance money for purchase,
transport, and tax. In the case of loss, it would cause
significant damage. With a smaller number of purchases, the
company is better able to manage money and items.

3. Manufacturer capacity: With a larger purchase order at
one time, the manufacturer may not be able to produce and
deliver as contracted. The purchase order would be based on
the manufacturer's capability. In addition, according to
Thai law, the firearms ordered/imported each time must arrive
Thailand altogether in one lot. If ordered in a larger lot
and the manufacturer was unable to complete it, the whole lot
of that order would be put on hold, which will consequently
damage the company's business flow.

5. (U) Inquiry to Bureau of Investigation and Legal Affairs:

The Bureau is a governmental agency under Department of
Provincial Administration, Ministry of Interior. We visited
on October 30 and met officials in charge of firearm shop
registration, firearm registration, and the Welfare Project's
contracts.

- Can the Bureau confirm the order of the firearms listed on
these license applications?

Response: They all confirmed the orders of all firearms
listed in the Cable. It is Department of Provincial
Administration Welfare Project, organized by their Bureau.

- For what will these firearms be used?

Response: They will be principally used for protection of the
buyers. Additionally, for many, they are also for their
function as government officials and law enforcement
officers.

- Who will be the ultimate end-users?

Response: They are all kinds of government and state
officials from agencies nationwide, as well as those holding
political and local administrative positions. Approximately
80 - 90 percent of the end-users are police and military
officers. The remaining are civilian anti- crime and
narcotic officers, Ministry of Interior officers, elected
village/sub-district heads and their security-duty personnel,
elected provincial and sub-district organization
administrators, Members of Parliament and Senators,
territorial defense personnel, and teachers in the
violent-plagued Southern region; etc.

- Will these firearms be used in the official duty of the
Bureau or any other agency of the Government of Thailand?

Response: As all buyers are the government officials, with
majority of them in the security and law enforcement careers,
these firearms will be used in their official duties. For
those not in that field, the firearms will be privately used
for their personal safety and protection. These firearms are
privately purchased by the buyers. These firearms are
regarded as the private property, not government-funded
procurement and not regarded as state property.

- Please describe the process by which the Bureau determines
who will receive one of these firearms.

Response: The buyers or the participants in this Welfare
Project must be the government officials with additional
qualifications provided by the 1947 Firearms Act, Section 13.
They have to register their order with the Bureau or Raja
Firearms in advance and pay for their firearms by
installments or in full at one time. After the qualification
examinations and the arrival of the firearms, they will have
to present at the Bureau with all related documents to pick
up their weapons. Originally, this Welfare Project was
solely for Interior officials of Ministry of Interior. It
was later expanded to police and military personnel, then to
government officials as approved by the Director-General of
the Provincial Administration Department.

- How many firearms have you distributed via the welfare

program this year? Please provide detailed records on who
received firearms via this program.

Response: The Welfare Project started in February, 2009 with
the first shipment and firearms distribution to the buyers in
May, 2009. On average, approximately one hundred firearms
are distributed to the buyers each week. They estimated
that, by the end of October, 2009, over 6,000 firearms of all
brands/types had been distributed.

- How many firearms have been distributed via the welfare
program in the past year?

Response: None, the Bureau had organized the project in
February 2009. Weapons purchased previously may have been
through the Department of Provincial Administration Welfare
Project which was organized by Bureau of the Territorial
Defense Volunteers Administration, which is another agency
under Department of Provincial Administration, Ministry of
Interior.

- Please explain the large quantity of firearms the Bureau
has received from the U.S. manufacturers since May 1, 2009
(approximately 10,506 firearms). Are all of these firearms
for the welfare program?

Response: During February to October, 2009, the Bureau has
ordered 38 lots, totaling 77,441 pieces of all brands.
Approximately 10-15 percent are U.S.-origin. All firearms
are for the Welfare Program.

- Have there been any other major procurement efforts for
firearms during the past six months?

Response: Yes, as stated above.

- Please provide any documentation that you provided Raja
Firearms in these transactions.

Response: Documents presented for my examination and filing,
see below.

- How did you describe the ultimate end-use of these firearms
to Raja Firearms?

Response: As to the Bureau's official letters, titled 'End
User Certificate', sent to the Raja Firearms (Ref. MOI
0307.5/243, 244, 245, 246, and 247, dated August 13, 2009):
"We further confirm that the above goods will be supplied to
and used in the service of the Investigation and Legal
Affairs Bureau Department of Provincial Administration and
will not be transferred nor re-exported to any other country
out of Thailand without the prior written authorization of
the Government of USA."

- What role does Raja Firearms in these transactions?

Response: Raja has obtained firearms contracts from the
Bureau. It then made the orders of these firearms on behalf
of the Bureau.

- Will the company receive any fees or commissions from the
Bureau for its services in these transactions?

Response: Raja Firearms will receive its gains from selling
these firearms. It may also receive, they assumed, some
incentive or reward from the foreign manufacturers for
arranging a large sale in Thailand. The firearms in this
Welfare Project are roughly 50 percent cheaper than the
normal market prices. The sale prices are based on the
negotiation between the Bureau and the Raja Firearms prior to
signing the contracts. The Bureau does not pay any fees or
commissions to the Raja.

- Please explain why these firearms were ordered via five
separate purchase orders instead of one.

Response: 1. By the 1947 Firearms Act, Section 60, a Permit
for Order/Import of Firearms can be used only once, and the
firearms ordered under that Permit must arrive in Thailand in
one lot at one time. With one larger order, if the firearms
do not arrive together in one time for whatever reasons, that
Permit will be put on hold or void, and it will cause damages
to the persons/companies involved. It is better to order in
smaller numbers.

2. An order/import will normally be made when the company has
received a practical number of purchase applications and
amount of money paid for the firearms at a certain period of
time. It is impractical to wait until all purchase
applications have been received, and the order/import shall
then be made.

3. With a larger order at a time, the foreign manufacturers
may be unable to produce and deliver the products as
contracted. Among the above-mentioned 38 lots of purchases,
1,000 - 3,000 pieces of firearms are ordered/imported at a
time.

- Have any of previously imported firearms been re-exported
out of Thailand?

Response: Not that they are aware of.

- Will any of the firearms in the five licenses listed be
re-exported out of Thailand?

Response: No, Thai law also prohibits as such.

- By what means these firearms will be distributed?

Response: The Bureau will distribute these firearms to the
buyers. They have to be present personally, or authorize a
representative, together with all related documents, to pick
up their firearms at the Bureau.

- What entity is responsible for maintaining inventories and
security of these items?

Response: This Bureau, as the state agency overseeing
firearms registration in Thailand, is responsible for
maintaining the inventories and movement of these firearms,
assisted by district offices nationwide. For security, it is
the direct responsibility of the buyers since these firearms
are private property. In case of the loss of firearms, the
buyers have to report to the Bureau for record and to the
police for investigation. In case of unauthorized re-export
or re-transfer, it is police responsibility to investigate
when a case comes up.

- Please estimate an appropriate quantity of firearms to be
imported by the Bureau.

Response: They estimate approximately 100,000 pieces of
firearms, with about 10-15 percent of U.S. origin. There are
several million government officials in total.

- Is Raja Firearms properly authorized to import and sell
defense articles in Thailand?

Response: Affirmative, this Bureau is supervising its
registration, licensing, and operations.

- Do you have any information on Raja Firearms that would
question their reliability as a recipient of US defense
articles?

Response: None, as to the Bureau's records. They were also
personally not aware of any derogatory information toward
Raja Firearms.

6. (U) Documentation Review:

Based on reftel list of documents and request for review,
both Raja Firearms and the Bureau provided documents. All
documents presented by both sides are in consistent to those
listed in the Cable.

A. DTC Case - 050190040: Sig Sauer, Model P239, 9 mm, 248
pieces. Permit No. PK 110 1/2552, Raja Firearms Purchase
Order No. 090930, and Department of Provincial Administration
End User Certificate to the Raja and the U.S. manufacturer
(Ref. MOI 0307.5/245, dated 08/13/2009).

B. DTC Case - 050190045: Sig Sauer, Model SP2022 PRO, 9 mm,
259 pieces. Permit No. PK 1103/2552, Raja Firearms Purchase
Order No. 090920, and Department of Provincial Administration
End User Certificate to the Raja and the U.S. manufacturer
(Ref. MOI 0307.5/247, dated 08/13/2009).

C. DTC Case - 050190058: Sig Sauer, totally 87 pieces. There
are actually three separate permits for this case.

- Model Mosquito, .22 Caliber, 42 pieces, under Permit PK
1097/2552
- Model P220, .45 Caliber, 8 pieces, and Model P250, .45
Caliber, 3 pieces, under Permit PK 1098/2552
- Model P232, .380 Caliber, 27 pieces, and Model P238, .380
Caliber, 7 pieces, under Permit PK 1099/2552

The above Permits, Raja Firearms Purchase Order No. 090950,
and Department of Provincial Administration End User
Certificate to the Raja and the U.S. manufacturer/authority
(Ref. MOI 0307.5/243, dated 08/13/2009).


D. DTC Case -050190070: Sig Sauer, Model P226, 9mm, 34
pieces, and Model P229, 9mm, 351 pieces, totaling 385 pieces.
Permit No. PK 1102/2552, Raja Firearms Purchase Order No.
090910, and Dept of Provincial Administration End User
Certificate to the Raja and the US manufacturer/authority
(Ref. MOI 0307.5/246, dated 08/13/2009).

E. DTC Case -050190074: Sig Sauer, Model P250, 9mm, 62
pieces, and Model P229, 9 mm, 180 pieces, totaling 242
pieces. Permit No. PK 1100/2552, Raja Firearms Purchase
Order No. 090940, and Department of Provincial Administration
End User Certificate to the Raja and the U.S.
manufacturer/authority (Ref. MOI 0307.5/244, dated
08/13/2009). Total of 1,221 pieces.

Raja Firearms and the Bureau additionally supplied copies of
two contracts signed between them regarding the purchases of
firearms listed reftel. The first one is Contract No. 19 Part
1, dated July 22, 2009, for the order/import of 690 firearms,
which, in its Appendix, 43 of them will be the 'Sig Sauer'.
The second one is Contract No. 19 Part 2, dated July 22,
2009, for the order/import of 2,500 firearms, which, in its
Appendix, 1,178 of them will be the 'Sig Sauer'. Grand Total
of the firearms contracted above: 1,221 pieces.
JOHN

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