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Cablegate: Response for Blue Lantern Level 3: Post-Shipment

VZCZCXYZ0020
PP RUEHWEB

DE RUEHKO #0328/01 0500744
ZNR UUUUU ZZH
P 190744Z FEB 10
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 9490
INFO RUEAIIA/CIA WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RHMFIUU/FBI WASHINGTON DC PRIORITY
RHEHAAA/NSC WASHDC PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RUEATRS/TREASURY DEPT WASHDC PRIORITY
RHMFIUU/HQ BICE WASHINGTON DC PRIORITY

UNCLAS TOKYO 000328

SENSITIVE
SIPDIS

PM/DTCC BLUE LANTERN COORDINATOR

E.O. 12958: N/A
TAGS: ETTC KOMC JA
SUBJECT: RESPONSE FOR BLUE LANTERN LEVEL 3: POST-SHIPMENT
END-USE CHECK ON LICENSES 050102957

REF: STATE 1514

1. (SBU) Post submits the following information in response
to reftel inquiry. On January 20, Econoff conducted a site
visit and met with Mr. Tsuneo TAKEDA, President of Sky
Trading Co., Ltd. Takeda produced documentation (Japan
Ministry of Defense (MOD) receipts) to verify the following
eight shipments:
(I) Shipment dated July 2, 2008, contained three valves and
pressure equalizers. Delivered to Japan Air Self Defense
Force (JASDF) 2nd Depot on July 9, 2008
(II) Shipment dated July 6, 2008, contained 40 valves.
Delivered to JASDF 2nd Depot on July 17, 2008/
(III) Shipment dated August 31, 2008, contained 23 valves and
one relay. Delivered to JASDF 2nd Depot on September 11, 2008
(IV) Shipment dated October 8, 2008, contained five valves
and 25 switch and P/B assy. Delivered to JASDF 2nd Depot on
October 16, 2008.
(V) Shipment dated January 24, 2009, contained 136 gauges, 64
valves, and 72 check valves. Delivered to JASDF 2nd Depot on
February 5, 2009.
(VI) Shipment dated April 22, 2009, contained 10 valves.
Delivered to JASDF 1st Depot on June 2, 2009.
(VII) Shipment dated May 9, 2009, contained 131 gauges, 50
valves, and 77 check valves. Delivered to JASDF 2nd Depot on
May 21, 2009.
(VIII) Shipment dated October 3, 2009, contained 131 gauges.
Delivered to JASDF 2nd Depot via Sumitomo Precision Products
Co., Ltd. (http://www.spp.co.jp/English/index2-e.html). The
goods were delivered to Sumitomo Precision on October 26,
2009. Sumitomo Precision will use these gauges for High
Assy. repairs under a separate contract with MOD. MOD
officials verified that the final products are to be
delivered to JASDF 2nd Depot.

2. (SBU) All information concerning shipments was confirmed
via e-mail on February 17 by MOD official, Mr. Teramoto of
the Equipment Policy Division. The receipts did not
indicated the dollar value of the goods, but Econoff verified
that the amount in the invoices from Trans-Pac Sales Corp.
matched the values indicated in the shipping records supplied
by Department. Econoff further verified all contracts
between Sky Trading and MOD for these shipments.

3. (SBU) Sky Trading used Kawasaki Kisen, also known as
K-line (http://www.kline.co.jp/index e.html), as its
exclusive shipping company for these goods. Takeda explained
that when they receive the goods from the United States, they
tend to keep the bulk of the goods at the K-line facility at
the airport. If it is a small amount, however, they store it
in their office. The length of time such goods are stored at
the office depends of the scheduling of inspection. Before
they can deliver the goods to the end-user, officials from
the end-user come to their office to inspect the goods. This
can take up to two weeks. Once goods clear inspection, they
are shipped by truck to the relevant end-user.

4. (SBU) The company is housed in a small one-room office in
a small office building in a mixed use district. Sky Trading
employs a security system that detects any changes in room
temperature caused by the entry of a person. Any change in
temperature causes a security guard to be notified. Takeda
said there have been no incidents of theft.

5. (SBU) Takeda said his company has never stockpiled any
military items in their office or elsewhere. He further
stated the company never imports goods for the purpose of
stockpiling. They only place orders with suppliers when they
have a request from an end-user, he explained. Takeda did
say, however, that the several years could pass between the
date of contract with the MOD and the actual delivery of the
desired goods. He said the Non-Transfer and Use Certificate
(DSP-83) covers several contracts. Takeda is aware that the
license is only valid for four years and understands the need
to apply for a new license should the current one expire
before receiving all the goods included in the value of this
license.

6. (SBU) COMMENT. At this point, Embassy Tokyo recommends
no further follow-up action. The transactions undertaken by
Sky Trading appear, as far as we can tell, legitimate. They
have been confirmed by the MOD. Sky Trading's behavior and

explanations indicate an understanding of the regulations
governing the handling of USML items. END COMMENT.
ROOS

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