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

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DE RUEHC #9551 3231648
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R 191643Z NOV 09
FM SECSTATE WASHDC
TO RUEHML/AMEMBASSY MANILA 0000
INFO RUETIAA/DIRNSA FT GEORGE G MEADE MD
RUEAIIA/CIA WASHINGTON DC
RHMCSUU/FBI WASHINGTON DC 0000
RUEKJCS/SECDEF WASHINGTON DC
RUCPDOC/USDOC WASHINGTON DC 0000

UNCLAS STATE 119551

SIPDIS
MANILA FOR GIGI COFFIN

E.O. 12958: N/A
TAGS: ETTC KOMC RP
SUBJECT: BLUE LANTERN LEVEL 3: PRE-LICENSE END-USE CHECK
ON LICENSES 050200227 AND 050200228

1. This is an Action Request. See paragraph 4.

2. The Department's Office of Defense Trade Controls
Compliance (PM/DTCC) requests Post's assistance in conducting
a pre-license check on licenses 050200227 and 050200228 for
the export of rifles, magazines, and grenade launchers to the
Philippines National Police (PNP). Post is requested to
complete this Blue Lantern check within 30 days. Lack of
response to a Blue Lantern check will affect pending and
future licenses involving parties to this license.

3. Reason for Request: These licenses are for significant
military equipment. Department seeks confirmation of the
bona fides of these transactions and the parties involved.

4. Action Request: Post is requested to establish the bona
fides of these transactions by making inquiries to the
Philippines National Police (PNP). If necessary based on PNP
responses, Post is requested to follow up with Ferfrans. The
following points are included for guidance:

(To PNP)

--Can you confirm these orders for rifles, magazines, and
grenade launchers? Please verify the exact quantities that
you ordered.

--How will these items be used by the PNP? Will they be
transferred to any other entities within the Philippines
Government?

--Will Ferfrans Specialties ever have physical possession of
these items? Who else may be handling these defense articles
prior to delivery to PNP?

--These two licenses have end-user's certificates issued by
Philippines Government agencies. One is from the Directorate
of Logistics and the other is from the Logistics Support
Service. Can you please explain the difference between these
two agencies and their functions? Do both agencies have
authority to issue end-user certificates on behalf of the PNP?

--Do you have any information on Ferfrans Specialties that
would call in to question their reliability as a recipient of
U.S. defense articles?

(To Ferfrans, if necessary)

--Please verify the exact quantities of these items ordered
by the PNP.

--Will Ferfrans Specialties ever have physical possession of
these items? Who else may be handling these defense articles
prior to delivery to PNP? Please describe your procedures of
securing these items.

--There is a discrepancy between the quantities ordered by
the PNP and the quantities Ferfrans is seeking. Please
explain this discrepancy. For what will the excess items be
used? To whom will Ferfrans sell the excess items?

In its reply, Post may also comment on any other information
pertinent to these transactions such as security of
facilities, end-use, and concerns about the entities involved.

5. Details of license applications:

A.

DTC Case: 050200227

QUANTITY/COMMODITY:

550 Ferfrans SOAR-5.56 Rifles

200 Ferfrans HV LAR 5.56 Rifles

1,650 30 Round Magazines

700 90 Round Drum Magazines

License Value: USD $560,000

SELLER:

Ferfrans
2649 E. Valley Blvd, Suite D
West Covina, CA 91792

FOREIGN CONSIGNEE:

Ferfrans Specialties
200 Montebello Court, Banilad
Cebu City
Philippines
Tel: 6332-233-2842
Email: francis@ferfrans.net

FOREIGN END-USER:

Philippines National Police Directorate for Logistics
Camp Crame
Quezon City
Philippines

PURPOSE:

For use by anti-terrorist teams and commando units of the
PNP. Shipped directly to Camp Crame.

B.

DTC Case: 050200228

QUANTITY/COMMODITY:

110 Ferfrans DEFCOM XL200 40mm Rail-Mounted Grenade Launchers

1 Non-Firing Ferfrans DEFCOM XL200 40mm Rail-Mounted Grenade
Launchers

100 40mm Cartridges

License Value: USD $88,150

SELLER:

Ferfrans
2649 E. Valley Blvd, Suite D
West Covina, CA 91792

FOREIGN CONSIGNEE:

Ferfrans Specialties
200 Montebello Court, Banilad
Cebu City
Philippines
Tel: 6332-233-2842
Email: francis@ferfrans.net

FOREIGN END-USER:

Philippines National Police Directorate for Logistics
Camp Crame
Quezon City
Philippines

PURPOSE:

For use by anti-terrorist teams and commando units of the
PNP. Shipped directly to Camp Crame.

6. Submitted in support of the license application were the
following documents (PM/DTCC will fax documentation to Posts
upon request):

A.

DSP-83 signed by Ferdinand Sy (Ferfrans U.S.) dated
11/09/2009; Jesus Ame Verzosa (PNP) dated 11/05/2009; Luizo
Ticman (PNP, Logistics) dated 11/09/2009; and Alan Francis
(Ferfrans Specialties) dated 11/07/2009

Import Authorization No. PI-F228-09 issued by National
Headquarters, Philippines National Police signed by Jesus Ame
Verzosa dated 11/05/2009

Purchase Order No. NOV09-05 from Ferfrans Specialties signed
by Alan Francis dated 11/05/2009

End-User's Certificate issued by PNP Directorate of Logistics
signed by Luizo Ticman dated 09/22/2009

B.

DSP-83 signed by Ferdinand Sy (Ferfrans U.S.) dated
11/09/2009; Jesus Ame Verzosa (PNP) dated 11/05/2009; Luizo
Ticman (PNP, Logistics) dated 11/09/2009; and Alan Francis
(Ferfrans Specialties) dated 11/07/2009

Import Authorization No. PI-F241-09 issued by National
Headquarters, Philippines National Police signed by Jesus Ame
Verzosa dated 11/05/2009

Purchase Order No. NOV09-09 from Ferfrans Specialties signed
by Alan Francis dated 11/09/2009

End-User's Certificate issued by PNP Logistics Support
Service signed by George Piano dated 09/30/2009

7. Please slug reply for PM/DTCC - BLUE LANTERN COORDINATOR
and include the words "Blue Lantern" and the case number in
the subject line. POC is Kyle M. Ballard, Phone:
202-663-1929; Email: BallardKM@state.gov; SIPRNET:
BallardKM@state.sgov.gov. The Blue Lantern Guidebook (ref)
is available as a PDF file on Intellipedia:
http://www.intelink.gov/wiki/
Blue Lantern End-Use Monitoring Program

8. Department is grateful for Post's assistance in this
matter.
CLINTON

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