VZCZCXYZ0002
PP RUEHWEB

DE RUEHBM #1461/01 2621143
ZNR UUUUU ZZH
P 191143Z SEP 06
FM AMEMBASSY BUCHAREST
TO RUEHC/SECSTATE WASHDC PRIORITY 5190
INFO RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0038
RUEHFR/AMEMBASSY PARIS PRIORITY 0244

UNCLAS BUCHAREST 001461 
 
SIPDIS 
 
SIPDIS 
 
PM/DTCC -- BLUE LANTERN COORDINATOR 
 
E.O. 12958: N/A 
TAGS: ETTC KOMC RO AE
SUBJECT: BLUE LANTERN LEVEL 3: POST-SHIPMENT END USE CHECK 
ON LICENSE 05924967 
 
REF: STATE 135617 
 
¶1. This message responds to reftel tasker, to conduct 
post-shipment, on-site verification on export of Personal 
Locator Systems to United Arab Emirates involving a Foreign 
Consignee, IAR S.A., Brasov in Romania.  On September 14, 
POLMILOFF visited IAR, S.A. and met with President and CEO 
Adviser Catalin Constantinescu, Export and Marketing Manager 
Anca Mihaela Ichim, Purchasing Manager Corneliu Pauleanu, 
among others involved with the contract with the United Arab 
Emirates Armed Forces.  IAR reviewed the history, partners 
and principal import and export clients.  IAR also provided 
POLMILOFF with the "Statement of Work Agreement" for the 
upgrading of 25 UAE PUMA SA 330s with Cubic Defense systems 
of San Diego, California.  IAR allowed POLMILOFF to examine 
the contract, inventory, customs and export licensing 
documents related to the commodities in question.  Following 
the paper review, POLMILOFF was given a tour of the plant 
facilities where IAR was building, refurbishing, and 
upgrading airframes and avionics for several military, Search 
and Rescue, and Medevac rotary-wing Puma aircraft.  The PUMAs 
were individually identified by client, including NATO, 
EUROFOR. Government of South Africa, United Arab Emirates, 
and the Romanian Ministries of Defense.  POLMILOFF also 
toured the blade assembly and repair area, and the fiberglass 
and aluminum press and construction areas. 
 
When was IAR Brasov established and who are its principals? 
 
¶2. Industria Aeronautica Romana (IAR) S.A. Brasov was founded 
in 1925, mainly as a manufacturer of fixed-wing aircraft, 
including the critically acclaimed IAR-80 combat plane which 
saw action from 1942 until Allied bombing hit the first IAR 
assembly plant in 1944.  After WWII, the communist government 
decided to use the former factory site to manufacture 
tractors, but continued to dabble in aeronautics, when in the 
1950s, one of the engineers started designing gliders and 
single engine planes, in hope of reconstituting the Aerospace 
industry in Brasov.  By 1965, was making fixed wing crafts, 
including experimental gliders, having moved the assembly out 
of the city of Brasov proper (where the tractor factory still 
exists), to its present location in Ghimbav, just a few 
kilometers out of the city but in the county of the same name 
("Judetul Brasov"). Since 1968, IAR has increasingly 
concentrated on the rotary-wing aircraft market and is 
currently partnered with EADS subsidiary Eurocopter.  In 
December 2000, IAR and Eurocopter signed an MOU that formed 
Eurocopter Romania S.A.  IAR S.A. claims it holds exclusive 
Eurocopter contracts for the upgrade, maintenance and supply 
of Puma and Alouette helicopters.  IAR also is the exclusive 
designer and provider of the upgraded PUMA "SOCAT" combat 
helicopters to the Romanian MOD. IAR and Eurocopter Romania 
are collocated.  The President and General Director of IAR is 
Gen. Ion Gerogescu (ret.).  Andrei Lorincz is listed as the 
Development and Production Executive and Ion Dumitrescu is 
the Commercial Financial Executive.  They claim 925 
employees, and about twenty-five percent of the stock is held 
privately. 
 
Who are IAR Brasov's typical customers and where are they 
located? 
 
¶3.  Domestic customers are the Romanian MOD/Air Force, 
Interior (including the Romanian Intelligence Service), and 
Romanian Utility Aviation.  Primary foreign customers are 
Eurocopter (France), Denel-Atlas Aviation (South Africa), 
United Arab Emirates Ministry of Defense, Pakistani Ministry 
of Defense.  A sample of their importers include Eurocopter, 
Sagem Avionics, CMC Canada, Rockwell Collins, HR SmithGroup. 
 
Does IAR Brasov have adequate on-site security? 
 
¶4.  IAR said it uses picture identification cards with 
electronic key access for its employees.  From the main 
office entrance, though the front door was locked, there was 
no sign of a security guard.  Throughout the compound, 
POLMILOFF did not observe any uniformed security nor any 
electronic or video security measures.  The main gate to the 
assembly area had a guard booth but POLMILOFF could not see 
any guards in the vicinity.  That said, the location of IAR 
S.A. Brasov is off a remote road, roughly a kilometer from 
the Brasov to Ghimbav road.  The firm is not easy to locate, 
and in fact, attempting to find the location, the embassy 
driver tried two Ghimbav locals without success.  The third 
time, a taxi driver pointed us in the right direction. 
 
Does IAR Brasov understand the restriction on UML articles? 
 
¶5.  POLMILOFF reviewed in the meeting both the End-Use 
 
monitoring policy, legal authority and re-exporting 
limitations.  IAR explained the Romanian government's own 
export controls and procedures. 
 
What is the nature of IAR Brasov's dealing with UAE? 
 
¶6.  IAR delivered 10 rotary wing aircraft to UAE in 1994 as 
part of a contract signed in 1992.  IAR is contracted to 
begin upgrades to those original 10, and are contracted to 
provide 25 second-hand PUMA helicopters, including 
maintenance and spare parts.  The first aircraft of this new 
contract was delivered in 2005 and is to be concluded in 2007. 
 
What is the nature of Brasov's dealings with Rockwell Collins 
France (RCF)? 
 
¶7.  RCF is one of the primary suppliers to IAR S.A. Brasov. 
 
Conclusion 
 
¶8.  IAR S.A. Brasov is a serious company, though on-site 
security needs improvement.  IAR S.A. Brasov officials 
appeared unsettled by the visit, but went out of their way to 
be responsive to POLMILOFF's inquiries.  They seemed 
surprised when POLMILOFF requested a tour of their assembly 
plant. One of the executives said they were not prepared for 
that, but left the room to obtain and subsequently receive 
permission.  POLMILOFF noticed only a a few Pumas equipped 
with machine gun turrets and rocket pods. Of the 12 Pumas in 
various stages of upgrade in the main assembly area, some 
were getting new motors, others new cockpits and interiors. 
The paper documentation, particularly those required by the 
GOR were all in order, with good cross-referencing of serial 
numbers on the export documents, customs sheets, inventories 
and order forms for each shipment. Most of the activity 
appeared to be in the manufacturing area, where air frames 
were being cut and welded, and rotors made. 
Taubman