VZCZCXRO3587
RR RUEHRG
DE RUEHSO #0019 0091738
ZNR UUUUU ZZH
R 091738Z JAN 09
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC 8866
INFO RUEHBR/AMEMBASSY BRASILIA 0014
RUEAIIA/CIA WASHDC
RUEHKL/AMEMBASSY KUALA LUMPUR 0319
RUEHRG/AMCONSUL RECIFE 4281
RUEHRI/AMCONSUL RIO DE JANEIRO 8980
RHMCSUU/FBI WASHINGTON DC
RUCPDOC/USDOC WASHDC 3247
RUEKJCS/SECDEF WASHINGTON DC
RUEPINS/HQ BICE INTEL WASHINGTON DC 0305

UNCLAS SAO PAULO 000019 
 
FOR PM/DTCC - BLUE LANTERN COORDINATOR 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETTC KOMC MY BR
SUBJECT: BLUE LANTERN CASE 050136184 
 
REF: STATE 133964 
 
SENSITIVE BUT UNCLASSIFIED--PLEASE PROTECT ACCORDINGLY 
 
¶1.  (SBU) SUMMARY:  In response to reftel, Econoff visited AVIBRAS 
munitions manufacturing site and met with company president Sami 
Hassuani on January 8.  The company appears to have adequate 
security measures to protect sensitive USML items.  Hassuani 
provided copious documentation to support the transaction.  END 
SUMMARY. 
 
¶2.  (SBU) AVIBRAS's supporting documentation included an 
approximately 1,000 page long sales contract from the Government of 
Malaysia.  It included detailed descriptions of the product, 
including blueprints.  A Principle Deputy Assistant Secretary level 
representative of the Government of Malaysia (GoM) had signed the 
contract and it contained the original seal of the GoM.  Hassuani 
also showed original documentation from a similar contract with the 
GoM in 2000.  Plaques, given as gifts to his company for its 
services from various countries' militaries, decorated an entire 
wall in his office.  Hassuani even showed Econoff his Association of 
the U.S. Army card, showing his membership since 1984. 
 
¶3.  (SBU) ABIBRAS has four sites, divided into munitions, armor and 
plating, civilian, and administrative.  The compounds themselves are 
located some distance from the main road and protected by security 
guards.  The munitions facility is located about one mile off 
kilometer 14 of the Tamoios highway, near the city of Sao Jose dos 
Campos, Brazil.  Upon arrival to the compound, the security guard 
requested Econoff turn off his cell phone, even though there 
appeared to be no reception available in the isolated compound. 
AVIBRAS also retains a member of the Brazilian Air Force to serve as 
their security liaison.  The liaison officer conducts background 
investigations and grants security clearances to all AVIBRAS 
employees and contractors, in addition to periodic reviews of 
compound security. 
 
¶4.  (SBU) AVIBRAS principally manufactures the Artillery Saturation 
Rocket System (ASTROS II).  AVIBRAS also manufactures air-to-air 
missile delivery systems for Embraer jet fighters, civilian 
explosives, fuses, and the missiles themselves.  They also have 
developed an unmanned drone.  AVIBRAS does not serve as a broker, 
which Hassuani says is against Brazilian law.  They import the parts 
for their systems and then manufacture the delivery systems 
themselves.  After the product is complete, workers place it in a 
container and a Government of Brazil (GoB) customs agent travels to 
the factory to seal the container.  The container is not opened 
again until the end-user receives delivery of the unit. 
 
¶5.  (SBU) AVIBRAS sells exclusively to governments.  According to 
Hussuani, they have sold equipment to the following countries' 
militaries:  Brazil, Saudi Arabia, Qatar, Oman, Kuwait, Malaysia, 
Brunei, Morocco, Angola, Columbia, Chile, and Ecuador.  The GoB must 
approve all transactions and it does deny sales to certain 
countries.  Hassuani showed Econoff a list of the denied countries, 
which included Iran, Israel, and Ecuador. 
 
¶6.  (SBU) Joao Verde Leite founded AVIBRAS in 1961 and he was the 
principal owner until he died in a helicopter crash last year.  His 
surviving family retains ownership of the company, administered by 
his son, Joao Brasil Leite.  Hassuani runs the day-to-day operations 
of the AVIBRAS.  The company at one time employed 6,000 people, 
although today that number has fallen to 1,200. 
 
¶7. (SBU) Hussuani assured Econoff that the company understood the 
restrictions on USML items, as well as the prohibition against 
unauthorized stockpiling.  The company took Post's visit seriously, 
brining out four ASTROS II units for display and Hassuani himself 
accompanied Econoff on every portion of the tour. 
 
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