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RR RUEHAO RUEHCD RUEHGA RUEHGD RUEHGR RUEHHA RUEHHO RUEHMC RUEHMT
RUEHNG RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHC #1600/01 0072154
ZNR UUUUU ZZH
R 072140Z JAN 09
FM SECSTATE WASHDC
TO RUEHSG/AMEMBASSY SANTIAGO 0064
INFO WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RUEAIIA/CIA WASHINGTON DC 2419
RUCPDOC/USDOC WASHINGTON DC 4813
RUEKJCS/SECDEF WASHINGTON DC
RHMCSUU/FBI WASHINGTON DC 2576
RUEPINS/HQ BICE INTEL WASHINGTON DC

UNCLAS SECTION 01 OF 02 STATE 001600 
 
SENSITIVE 
SIPDIS 
SANTIAGO FOR JENNIFER SPANDE 
POL 
 
E.O. 12958: N/A 
TAGS: ETTC KOMC CI
SUBJECT: BLUE LANTERN: DISCUSSIONS WITH EMBASSY, CHILEAN, 
AND INDUSTRY OFFICIALS SEPTEMBER 25-26 
 
¶1. (U) SUMMARY:  Compliance Specialist Judd Stitziel from the 
Department's Office of Defense Trade Controls Compliance 
(PM/DTCC) met 25-26 September 2008 in Santiago with embassy, 
Chilean, and industry officials to discuss implementation of 
the Blue Lantern end-use monitoring program and U.S. export 
control licensing and policy issues in Chile.  In the context 
of an expanding bilateral defense trade relationship, the 
visit included very productive meetings with senior Chilean 
military officers and defense industry representatives as 
well as a site visit to state-owned aeronautics firm Empresa 
Nacional de Aeronautica (Enaer).  The visit appears to have 
met the objectives of improving understanding of the Blue 
Lantern end-use monitoring program and USG defense trade laws 
and regulations.  END SUMMARY. 
 
¶2. (U) Administered by the Department's Office of Defense 
Trade Controls Compliance (PM/DTCC), Blue Lantern is a global 
program designed to verify the end-use, end-users, and 
disposition of commercially exported defense articles, 
technology, and services.  This visit to Chile was part of 
PM/DTCC's ongoing efforts to improve the effectiveness of 
Blue Lantern through outreach visits with posts, host 
governments, and industry. 
 
PREPARATORY MEETING AT CHILEAN EMBASSY IN WASHINGTON 
 
¶3. (U) In order to help lay the groundwork for a successful 
visit, Compliance Specialist Judd Stitziel from PM/DTCC and 
Senior Licensing Officer Yolanda Gantlin from the 
Department's Office of Defense Trade Controls Licensing 
(PM/DTCL) met with Ministry of Foreign Affairs (MFA) and 
Ministry of Defense (MOD) officials at the Chilean Embassy in 
Washington on September 16.  Among the dozen Chilean 
participants were Isauro Torres, Minister counselor; GEN 
Andres Avendano, Defense Attache and Chief of the Military 
Mission to the U.S.; COL Nelson Vega, Chief of Logistics 
Department, Chilean Air Force Mission; and LCDR Rodrigo 
Corvetto, Head of the Purchasing Department, Chilean Naval 
Mission.  At the end of the very positive and productive 
meeting, the Chileans expressed appreciation for the 
briefings on PM/DDTC's end-use monitoring and licensing 
policies and procedures and offered to facilitate meetings 
for the export control team with their colleagues in Chile. 
 
EMBASSY BLUE LANTERN BRIEFING 
 
¶4. (U) At Embassy Santiago, DCM Carol Urban chaired an 
interagency meeting to discuss the Blue Lantern program in 
Chile.  Attendees included Juan Alsace, Economic and 
Political Counselor; Jennifer Spande, Senior Political 
Officer; COL Kevin Karol, Defense Attache; George Spoth, 
Logistics Plans and Programs, U.S. Military Group; Isabel 
Valenzuela, Foreign Commercial Service; and Jennifer Bucalo, 
Regional Affairs Office. 
 
¶5. (SBU) Stitziel briefed the mission and actions of Blue 
Lantern, both globally and in Chile.  Since 2002, PM/DDTC has 
received over 2,000 applications for commercial defense 
exports to Chile worth more than one billion dollars.  During 
that time, 37 Blue Lantern checks were conducted, including 
22 pre-license checks and 15 post-shipment verifications, on 
applications and licenses that listed end-users in Chile.  Of 
these 37 cases, only one was closed "unfavorable," meaning 
that the facts determined by the check were not consistent 
with the information listed on the application or license. 
Chile's "unfavorable" rate of three percent is significantly 
lower than the global average during the last several years, 
which has ranged between 16 and 23 percent.  Embassy 
Santiago's average response times of 43 days for pre-license 
checks and 77 days for post-shipment checks are within the 
normal range globally. 
 
¶6. (U) The number of checks in Chile has increased in recent 
years, and the program is anticipated to continue to grow as 
bilateral defense trade and the volume of direct commercial 
sales (DCS) increase.  Participants discussed strategies for 
addressing specific past challenges of the program in Chile, 
including finding the right GOC point-of-contact and GOC 
officials' sometimes lengthy delays in responding to Blue 
 
STATE 00001600  002 OF 002 
 
 
Lantern requests.  Given the EPOL Section's limited 
resources, Stitziel encouraged post to draw on the full range 
of country team resources, including ICE, MILGP, DAO, and 
Foreign Commercial Service (FCS), when conducting checks. 
EPOL and FCS already have effectively collaborated on a 
number of defense trade control issues. 
 
ENAER SITE VISIT 
 
¶7. (U) Stitziel and Spande visited the state-owned 
aeronautics firm Empresa Nacional de Aeronautica (Enaer) on 
September 25 in order to brief company officials on the Blue 
Lantern program and related export control issues and to 
learn about the firm's operations and export control 
procedures.  Enaer representatives included Max Eric 
Arancibia Lizama, Chief of the Logistics Department, and 
Marco Sciolla, Marketing Manager. 
 
¶8. (U) Enaer has appeared on more than 260 PM/DDTC license 
applications, operates a Lockheed Martin certified 
maintenance facility, and performs modifications, upgrades, 
repairs, and maintenance on a number of U.S.-origin aircraft 
platforms, including the C-130, F-4, F-5, and F-16 airplanes 
and the UH-1H helicopter.  In addition to offering an 
overview of corporate operations, Enaer officials posed 
numerous thoughtful questions, demonstrated a working 
knowledge of U.S. export control regulations and 
restrictions, and expressed eagerness to fully comply with 
all U.S. export control regulations and to cooperate with 
end-use monitoring checks, stressing the importance to the 
company of the U.S. market. 
 
CHILEAN GOVERNMENT AND INDUSTRY BRIEFINGS 
 
¶9. (U) Approximately two dozen Chilean defense industry 
representatives participated in a presentation and discussion 
led by Stitziel of the Blue Lantern program and related 
export control issues, including third-party transfer 
requests and State export licensing fundamentals, in the 
morning of September 26.  Attendees included both brokers and 
representatives of U.S. and Chilean companies, including 
Galvarino Systems, BS Logistics, Raylex, Sociedad Harbst y 
Cruz, Thomas Bertie & Co., Promil, I Systems, Carlos Nazar 
Representaciones, PCS Aerospace & Marketing, Nimrod 
International, CYM Chile, FAME, Proaero, Air Sea Land, 
Aeroservicio, Kellstrom, Northwest Helicopters, Rotorcraft, 
Werner Aero Services, Air Technology, Cessna, Garmin, S-TEC, 
MD Helicopters, Sikorsky, HSI, Beechcraft, BMS, Roadcast, 
Harris Corporation, L-3, Nivisis, DRS, Insight, Relli 
Technology, Nightline, Airborne Systems, ATK, and several 
others.  The briefings prompted lively discussion and 
detailed questions.  In response to expressions of 
frustration over misunderstandings or delays caused by 
inaccurate or incomplete information provided by U.S. 
exporters, Stitziel encouraged industry representatives to 
consult PM/DDTC's website and, when appropriate, PM/DDTC's 
response team, and to attend educational conferences and 
seminars such as those offered by the Society for 
International Affairs (SIA).  There was general consensus 
that the meeting facilitated a very informative and 
productive exchange of information for all involved. 
 
¶10. (U) In the afternoon on September 26, Stitziel led a 
presentation and discussion with more than a dozen Chilean 
government and military officials as well as senior officers 
from the U.S. Military Group.  Chilean participants included 
Pablo Castro from the MFA's Special Policies Department as 
well as senior procurement, logistics, acquisitions, and 
contract officers from the Army, Navy, and Air Force.  U.S. 
military participants included CAPT Richard Goodwyn, Defense 
Attache; CAPT J. Renee Finch, Chief of the Naval Section in 
Valparaiso; and COL Glenn Huber, Jr., of the Defense Attache 
Office.  Stitziel's briefs on the Blue Lantern program, 
third-party transfer requests, and State munitions export 
licensing fundamentals sparked lengthy discussions and 
in-depth questions not only about those issues, but also 
about the similarities and differences between direct 
commercial sales (DCS) and foreign military sales (FMS), a 
source of much confusion and misunderstanding in the past. 
The participation of MILGP officials was particularly helpful 
in addressing the latter issue. 
 
¶11. (U) PM/DTCC would like to express its gratitude to 
WHA/BSC, Embassy Santiago, and especially control officer 
Jennifer Spande for her exemplary work in helping to arrange 
and execute this visit. 
RICE