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Viewing cable 05PARIS2722, FRANCE: BLUE LANTERN LEVEL 1: LICENSE NOS. 883933,
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| Reference ID | Created | Released | Classification | Origin |
|---|---|---|---|---|
| 05PARIS2722 | 2005-04-21 16:06 | 2011-08-24 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Paris |
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 03 PARIS 002722
SIPDIS
SENSITIVE
STATE FOR PM/DTCC - BLUE LANTERN COORDINATOR
E.O. 12958: N/A
TAGS: ETTC KOMC FR
SUBJECT: FRANCE: BLUE LANTERN LEVEL 1: LICENSE NOS. 883933,
901272, AND 915708 END-USE CHECK ON MINIATURE INTEGRATED GPS/INS
SYSTEMS DELIVERY TO FRENCH FIRM "M.C.E."
REF: (A) 05 STATE 45595
(B) 05 PARIS 242
(C) 04 STATE 155368
(D) various Belon/Dade emails July-November 2004
¶1. (SBU) As requested in ref A, post provides the following
overall review as documentation concerning MCE's behavior in the
Systron Donner C-MIGITS export of integrated robotic systems.
Much of this information has already been sent to PM/DTCC in e-
mail format. PM/DTCC should note that following coordination at
post between Blue Lantern Coordinator and ICE agent in November
2004, an ICE/Paris case file was opened (file number PA-03-TV-05-
PA-0001 Blue Lantern License Check Case) and ICE/Paris has since
been in contact with French Customs, which is actively
investigating the case. (See also para 19 below.) With respect
to the Blue Lantern license check, this report should serve as a
final reporting cable on the history of this Blue Lantern case,
as was suggested ref A.
¶2. (SBU) Post has been in contact with French firm "MCE" on
numerous occasions, as was mentioned in ref B. Company
executives were courteous, but generally uncooperative in
providing details requested and refused to arrange any site
visit to view the miniature integrated GPS/INS systems in
question. Following is a chronological description of our
contacts with MCE company executives:
¶3. (SBU) Following receipt of ref C on July 16, 2004, and as
reported ref D, acting Blue Lantern action officer contacted the
company to be told that the units in question were still the
property of MCE, but were currently in the immediate possession
of clients for testing and so were not available for viewing at
MCE facilities. EmbOff spoke by phone with MCE manager Albert
Charie in an effort to arrange a quick visit to the MCE company
site, which is about four hours south of Paris, near Bordeaux.
Charie said that three sets of three units each were used in
each of the systems that were with clients for testing (i.e.
nine units out for testing in three systems). The tenth unit
was broken and was to be returned to BEI Systron, the U.S.
supplier, for repair "within the next few days." He further
said that of the three systems that were with clients, two of
the clients were in France and one was in Spain with a French
company. When EmbOff asked for the names of these client
companies testing the systems, Charie politely declined saying
that he had been "burned" in the past, notably by U.S.
companies, by sharing his client list and having his clients
stolen from him. When asked why he had allowed one of the units
to be taken to Spain, Charie said that he sends them for trials
only to clients within the European Union. Being the beginning
of summer vacation season in France, Charie advised that he
would be away for the following two weeks, but follow-up
questions could be addressed to another company representative.
¶4. (SBU) On July 22, 2004, PM/DTCC requested by e-mail that post
try to get the names of those three clients, "either from him
(Charie) directly or wait until he comes back from vacation."
PM/DTCC explained that the potential diversion issue concerned a
non-European country and they were relieved to learn that the
units were (reportedly) still in Europe. However, PM/DTCC
further informed post that Charie's claim that he could not
reveal his client list for fear of losing to a competitor was
not applicable here, as he would be sharing the information with
the USG, which cannot take privileged business information from
one firm and pass it to another.
¶5. (SBU) In mid-August 2004, post Blue Lantern action officer
spoke by phone to Mr. Charie again. He again resisted giving
the names and addresses of his clients, where the equipment was
still being held for testing. Emboff tried to assure him that
the USG would not share sensitive business information --
including client names -- obtained from one company with any
other company, but he still refused. Charie was worried that
the USG would tell his supplier, BEI Systron, the names of his
clients and they might attempt to cut him out of the business to
deal directly with his clients.
¶6. (SBU) At this point, Charie admitted that he was attempting
to resell the equipment, but he assured Emboff that he would not
resell to anyone on the USG list of "prohibited countries",
which he said he had gotten from the internet. He said that he
was talking with only one potential buyer outside of Europe.
Responding that it was unclear which list he meant, Emboff
emphasized that such verbal assurances were not good enough.
Emboff reminded Charie that he had signed an export license,
which clearly stated (1) non-transfer was a condition of the
sale and (2) approved end-use was not resale but rather research
and development by MCE. Charie then said that it was always his
intent to resell the equipment and that he had never hid that
fact. Emboff offered to make inquiries to Washington to ask
what was the proper procedure for requesting permission to
resell these controlled items.
¶7. (SBU) In the meantime, in lieu of visiting MCE's clients to
view the equipment, Emboff suggested -- and Charie grudgingly
agreed -- that MCE collect all of the equipment back at the MCE
facility so that Emboff could make a site visit to view the
items there. Like many French firms, MCE was closed for the
entire month of August, but Charie implied that a site visit
could be arranged within a month or so. Emboff promised to get
back to MCE in early September 2004 with information on the
procedure to request resale permission and/or change of intended
end-use and to schedule a site visit.
¶8. (U) In late August, PM/DTCC requested by e-mail that Emboff
arrange to view all ten BEI Systron Donner items back at the MCE
plant in September. PM/DTCC explained that it was not uncommon
for foreign parties to "change-up", and do something different
with the U.S.-licensed goods, once they have arrived in country,
and were incorporated into another defense item or -- as in the
MCE case -- into a quasi-defense robotic item. This is not a
violation of USG rules and regulations, unless they retransfer
the item without informing the USG of the change of ownership.
If MCE were to propose a third party sale, it must wait for a
written decision by return correspondence from the USG.
¶9. (SBU) On September 14, EmbOff again spoke with Mr. Charie to
explain procedures for retransfer requests as detailed by
PM/DTCC. Emboff made the call believing that her side of the
bargain was to find and relay this information, while his was to
facilitate a site visit to view all ten miniature integrated
GPS/INS systems back at the MCE facility, as agreed earlier.
However, at this point, Charie said that he did not think it
would be possible for an Embassy representative to view the
equipment at the MCE site, as the equipment was still with
clients. He still refused to give out the names or addresses of
those clients with whom he was actively negotiating the
potential resale of the equipment. Charie claimed that all ten
systems were in France, but with various clients for testing and
evaluation.
¶10. (SBU) Charie then explained in general terms the status of
the ten systems: One was destroyed by a client in transit, when
a truck that was carrying it allegedly ran off a cliff in
central France. He considered trying to have it repaired, but
the client said that it was too badly damaged. Emboff warned
that U.S. officials would view the disappearance of one of the
units as suspicious, noting that, without proof, it was
difficult to be sure the unit was not in the hands of a country
of concern. In response, Charie said that he would try to
retrieve the damaged system. The other nine systems were
integrated (three each) into three MCE systems, two of which
will likely be resold to clients outside of France (he would not
say to which countries) and he is negotiating with the French
Army for purchase of the third. (Note: At one point, Charie
used the past tense, as if two of the units had already been
"sold", but then he back-tracked and said "will likely be sold"
after Emboff told him that reselling was illegal without USG
permission. End note.)
¶11. (SBU) Emboff explained to Charie at this point that he must
get written approval from the USG before any units can legally
be resold and gave him the website address and ITAR Section
123.9(c) reference. Charie seemed to be in a rush to resell the
units and gave Emboff the sense that he would perhaps not wait
for a license review process that he felt would take well over a
month. Emboff suspected that he may have already sold two of
the robotic units with three BEI Systron systems each and
immediately reported her suspicions to PM/DTCC. Charie
mentioned that he wrote to the USG in 2003 asking the general
question if these units could be resold and still had not heard
back. Emboff asked for a copy of that letter, in order to
expedite/track a response. Charie promised to fax it, but he
has never produced the letter. Since Charie was becoming
increasingly uncooperative, Emboff suggested to PM/DTCC the
possibility of raising the case with GOF officials and gaining
their trust and cooperation by sharing as many details as
possible about the case.
¶12. (SBU) A short time later, EmbOff received a phone message
from Charie's Paris-based business associate, Mr. Rouvet, who
spoke English and offered to be the primary interlocutor for MCE
with respect to procedural steps to obtain USG agreement for
resale of the equipment. Emboff emailed Rouvet detailed
information about applicable USG laws and procedures, including
citations from ITAR Section 123.9(c) which delineated how to
request USG permission to retransfer licensed items. In the
meantime, PM/DTCC asked EmbOff to wait before contacting the GOF
until the bureau could produce talking points.
¶13. (SBU) On October 7, 2004, after confirming that no
retransfer request had been received at PM/DTCC, Emboff called
MCE's intermediary in Paris. Mr. Rouvet explained that Mr.
Charie was on vacation in Portugal, but before Charie had left
he had told Rouvet that he would be sending the retransfer
paperwork. When Emboff told him that Washington still had not
received anything, Rouvet put in a call to Charie's secretary,
who confirmed that nothing had been sent out. At that point,
Rouvet promised to urge Charie to send in the required
paperwork. Emboff also raised the issue of the long-overdue
site visit. Rouvet said that he had spoken to Charie about our
request to view the items. He repeated Charie's concern about
revealing his client list and said it would be impossible or
nearly impossible for an Embassy official to view the items,
since they would have to be "repatriated" to MCE. Rouvet's
choice of words left considerable room for the possibility that
the items were no longer in France. However, he refused to say
where they were, due to Charie's oft-repeated concerns.
¶14. (SBU) Emboff contacted PM/DTCC in early November 2004 to ask
if any formal request had been received from MCE. PM/DTCC found
that MCE still had not submitted any paperwork as of November 4.
PM/DTCC suggested by e-mail that post approach the GOF to ask
whether there had been any export record from MCE for any
integrated robotic systems that they allegedly manufacture.
PM/DTCC also noted, however, that such integrated robotic
systems may not require licenses for export from France.
¶15. (SBU) In mid-November 2004, per PM/DTCC request, post Blue
Lantern action officer gave details of the case to post ICE
representative, who contacted French customs to attempt to track
any such shipments from France.
¶16. (U) In December 2004, Emboff received a letter from MCE
company manager Albert Charie, which was transmitted to PM/DTCC
by fax and translated in ref B.
¶17. (U) On January 26, 2005, Mr. Charie called post Blue Lantern
action officer to ask if his letter had been received. She
confirmed that it had and told him that his letter was referred
to PM/DTCC officials in Washington, whom he could contact
directly.
¶18. (SBU) Since January 2005 and absent further PM/DTCC
requests, post has had no further contact with Mr. Charie, Mr.
Rouvet, or any other MCE official.
¶19. (SBU) On April 14, 2005, ICE/Paris agent spoke with a French
customs agent to inquire about the case. French customs
confirmed that they have an active "global" investigation of MCE
on-going. After their initial investigation into possible
export of integrated and/or robotic systems by MCE revealed
evidence of fraud, French customs expanded the scope of their
investigation into the company's business. Their investigation
is broad (they used the term "global" which implied that they
are looking at all MCE activities) and on-going. ICE/Paris has
informed ICE headquarters in Washington of the case. However,
ICE/Paris requests that Washington agencies note that a case
file (number PA-03-TV-05-PA-0001) has already been opened and a
formal referral to DHS/ICS, as suggested in ref A, would be
redundant.
Leach