VZCZCXYZ0007
OO RUEHWEB

DE RUEHNY #0792/01 2141127
ZNY CCCCC ZZH
O 021127Z AUG 07
FM AMEMBASSY OSLO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6036
INFO RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC IMMEDIATE
RUEKJCS/SECDEF WASHINGTON DC IMMEDIATE
RHMFISS/JOINT STAFF WASHINGTON DC IMMEDIATE

C O N F I D E N T I A L OSLO 000792
SIPDIS
SIPDIS
PM/RSAT (DBAME, DQUINN), PM/DTC (SCLARK, DBOUNDS),
DSCA/STR/POL (THUGHES), SAF/IARG, EUR/NB (VMIDDLETON)

E.O. 12958: DECL: 08/01/2017
TAGS: MARR PREL NO
SUBJECT: NORWAY AND F-5 FIGHTER TRANSFER

REF: A. 7/23/07 EMAIL FROM DQUINN TO RSIMM
¶B. 7/23/07 EMAIL FROM RSIMM TO DQUINN
¶C. 7/24/07 EMAIL FROM RSIMM TO DQUINN
¶D. 7/31/07 EMAIL FROM DQUINN TO SPLATO
¶E. OSLO 729

Classified By: Ambassador Benson K. Whitney, Reasons 1.4 (b) and (d)

¶1. (C) Summary. Post continues to press the Norwegian
government to approve the transfer of F-5s and related
equipment from the GON to Lockheed Martin (LM) and Northern
General Leasing (NGL). Post is greatly concerned that
failure to effect the F-5 transfers will negatively impact
U.S.-Norwegian relations, particularly as the Norwegian
Ministry of Defense fully supports the transfer. The
Norwegian Foreign Ministry, although willing to facilitate
this process, must receive assurances that the transfer
fulfills a USG requirement and is not a transfer to a
strictly private entity. Letters transmitted to Post from
State have not satisfied the GON´s concerns (Reftels A and D)
as they have failed to formally state this. We fear that
should the F-5 transfers not occur due to a failure of the
USG to provide an appropriately worded letter, the GON may
come to view the U.S. as an unreliable partner. Coming on
top of other challenges outlined in Ref E, this problem could
negatively impact future military sales (such as the possible
$2.2 billion purchase of the Joint Strike Fighter). End
Summary.

Background
----------

¶2. (C) NGL, a U.S. company, is developing a program
providing Introduction to Fighter Fundamentals (IFF) flight
training for Foreign Military Sales (FMS) cases under U.S.
Air Force (USAF) management. Related to this program, NGL
has been working with the Government of Norway (GON) to
purchase 15 U.S.-origin F-5 aircraft. This program had been
under lengthy consideration and development, and received
USAF and DOD senior leadership endorsement.

¶3. (C) There is an urgency to expeditiously complete the
transfer, given a projected January 2008 FMS start date.
Given this advanced start date, NGL must transport all the
aircraft and associated supplies to the U.S., which must also
be set up and operational by the end of 2007. Current plans
had called for the F-5 aircraft to be deconstructed for
shipment by August 3.

Post´s MFA Dealings: Moving the Request Forward
--------------------------------------------- --

¶4. (C) Post has worked closely with the MFA´s Export
Control Section in ordeQto forward the transfer. On July
23, Post received a USG notification letter outlining that
the F-5 transfers, and supporting equipment were approved
(Ref A). Reviewing the letter, Post noted concerns to
Washington that the GON may have reservations with its text,
pointing out MFA concerns that the GON would approve the
actual transfer only upon USG assurances that the aircraft
would fulfill a USG requirement and could not be transferred
to a strictly private entity (Ref B).

¶5. (C) On July 24, P/E Officer and ODC Chief met with MFA
Export Control Section Senior Adviser Ole Morten Parelius,
presenting the letter and additional statements from Lockheed
Martin (LM) and Northern General Leasing, LLC (NGL). These
statements noted, among other things, that the F-5s would be
used only to provide a service to the USAF in training
foreign military pilots via the FMS Program, and that NGL and
LM agreed to dispose of, or demilitarize the aircraft, only
at USG direction.

¶6. (C) Although Parelius emphasized that he and his staff
certainly wished to cooperate with the transfer, he stressed
that he was bound by Norway´s export control laws which
required specific USG assurance that the NGL and LM were
acting on behalf of the USG´s DOD in the F-5 transfer.
Specific end-use assurance from the USG, noting that
transferred aircraft would fulfill a USG requirement, was
needed. Parelius strongly suggested that any USG
certification include language from "Guidelines of 28
February 1992 for the MFA When Dealing with Applications
Concerning the Export of Weapons and Military Material as
well as Technology and Services for Military Purposes" (the
"Guidelines").

¶7. (C) Parelius pointed out to Guidelines Section
3(v)(3)(a), which states in part that "An export license will
normally be granted for the export of goods in category
confirmed A if the customer is, or is acting on behalf of,
the defense authorities of a country belonging to group 1.
This must be substantiated by documentation." The
Guidelines, in their entirety, were sent in Reftel C.
Parelius stressed that the transfer had also received
extensive media coverage last year, and that it was a topic
which drew the scrutiny of many GON officials, particularly
at the MFA. Restating that he wished to expedite the matter,
he noted that once the needed information was delivered, the
transfer would be made a priority, and GON approval could be
almost immediate, estimating one or two days.

¶8. (C) In response to such MFA concerns, Post received a
draft USG letter (Ref D), which was submitted to Parelius on
July 31. Parelius responded that the GON could not issue a
license based on the draft, and needed a letter which clearly
stated that "the customer NGL is acting on behalf of the
defense authorities in the U.S. on this matter."

¶9. (C) On August 1, P/E officer spoke with Parelius, who
confided that he was "desperately seeking a solution," but
bottom line is that his hands are tied. Parelius reiterated
that he needs the explicit assurance that NGL and LM were
acting on behalf of the USG´s DOD. He suggested that if the
F-5s were transferred to the USAF, rather than to NGL and LM,
many Norwegian concerns under its export laws would not be
raised.

Comment and Action Request
--------------------------

¶10. (C) The F-5 transfer is supported by the Norwegian MOD,
as the military is eager to move the aircraft and equipment
transfer forward. MFA colleagues handling this export
matter, while consistently expediting our numerous requests
for assistance, are becoming visibly frustrated that the USG
has not yet complied with Norway´s export control laws. Post
is also concerned that after the problems encountered from
the F-5 transfer, the GON may in the future question the US
export control regime, given that the similarity between US
and Norwegian laws. Furthermore, coming on top of other
recent challenges with military sales to Norway documented in
Ref E, we fear a failure to effectuate the transfer will
likely negatively impact US-Norwegian relations. Post
urgently requests that Washington agencies considering the
F-5 transfer seek an immediate resolution that considers
these implications.
WHITNEY