VZCZCXYZ0006
RR RUEHWEB

DE RUEHJA #1074/01 1750931
ZNR UUUUU ZZH
R 240931Z JUN 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 2676
INFO RUEHAD/AMEMBASSY ABU DHABI 0361
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEKJCS/SECDEF WASHDC

UNCLAS JAKARTA 001074 
 
SIPDIS 
 
DEPT FOR PM/DTCC/BLUE LANTERN COORDINATOR (JOUBERT-LIN) 
 
E.O. 12958: N/A 
TAGS: KOMC ETTC AE ID
SUBJECT:  RESULTS OF BLUE LANTERN LEVEL 3: POST SHIPMENT END-USE 
CHECK ON LICENSE 050020258 
 
REFS: A) Joubert-Lin-Valdez emails 
B) Abu Dhabi 517 
C) State 17021 
 
¶1. Please see Action Request in para 5. 
 
¶2. Summary:  The U.S. Munitions List (USML) item detailed in Ref C 
is located at PT Dirgantara Indonesia's (DI) warehouse.  The item 
was ordered by DI, the foreign consignee, and was received by DI in 
¶2006.  The item has not been delivered to the United Arab Emirates 
(UAE) Air Force, the end-user, because the end-user has not arranged 
payment for the parts order.  DI is attempting to resolve the 
payment issue and is prepared to deliver the item once the payment 
issue is resolved.  DI, also known as Indonesian Aerospace, is a 
well-established Indonesian state-owned enterprise.  End Summary. 
 
¶3. On June 18, Embassy officer visited the DI facility and met with 
DI Aircraft Service Manager Slamet Setyono to verify the order of 
the AN/ARC-182 Panel Mount Receiver-Transmitter detailed in Ref C. 
Slamet confirmed that DI ordered the USML item from the U.S. firm 
Liberty Logistics and received it in December 2006.  Slamet noted 
that DI is storing the purchased component in its secure warehouse 
and has not yet sent it to the end-user due to an unresolved payment 
issue.  Embassy officer visually inspected the USML item and 
confirmed the identifying numbers (photos to be sent via email). 
The transaction is related to post-sales maintenance service of DI's 
CN-235 aircraft sold to the UAE Air Force.  DI provides on-going 
services to the UAE Air Force but the USML item in question is held 
up along with nearly $1M of other items that are part of a single 
unpaid order from the end-user. 
 
¶4. According to Slamet and documents that he shared (copies to be 
sent via email), DI is waiting for a letter of credit or 
confirmation of payment from the end user before it ships the USML 
item and the rest of the order to the UAE Air Force.  During the 
placement of the order in question, the UAE Air Force changed its 
maintenance procurement procedures and outsourced all maintenance 
and related procurement to a company called GANCO/Abu Dhabi Advanced 
Technology.  UAE Air Force continues to make other purchases from 
and payments to DI via the new UAE Air Force procurement process. 
However, the $1 million parts order, including the USML item in 
question, is in limbo between the old and the new procurement 
processes.  Although this order is three years old, Slamet said they 
still expect to receive payment and deliver the part to the 
end-user.  Representatives from DI have flown to the UAE twice to 
try to resolve the payment issue. 
 
¶5. Action request:  Slamet noted that DI is aware of the 
restrictions on USML articles, including those pertaining to 
re-export.   DI expects the payment issue to be resolved and the 
part to be delivered to the end-user.   However, DI asked for a 
State Department opinion on what they can and should do with the 
USML item if payment is never received from the end-user.   Post 
requests Department clarification on what options the foreign 
consignee has for final disposition of the USML item if the end-user 
does not pay for the part and what process the foreign consignee 
should follow in this regard. 
 
¶6. DI, also known as Indonesian Aerospace (IAE), was established in 
¶1976.  It is an Indonesian state-owned enterprise.  Before 2000, the 
company was called Industri Pesawat Terbang Nusantara (IPTN) and was 
led by former Indonesian President Habibie.  On August 24, 2000, 
then President Abdurrahman Wahid officially changed the name of IPTN 
to PT Dirgantara Indonesia or Indonesian Aerospace.  The Government 
of Indonesia owns 100 percent of the outstanding shares in the 
company. 
 
¶7. According to DI representatives, DI's aircraft products include 
the CN-235 Civil, CN-235 Military and CN-235 Maritime.  They also 
hold an aircraft production license as part of a subcontract program 
for the NC-212, Boeing 757, and Airbus A330, A340 and A380 and a 
helicopter production license for the Super Puma NAS-332.  The 
company also provides engineering services such as design 
development testing, manufacturing subcontracts, and aircraft and 
engine maintenance repair and overhaul (MRO).  DI also has four 
subsidiary companies including a company named IPTN-North America, 
Inc., located at 1035 Andover Park West, Suite B, Seattle, WA 98188 
- 7681, U.S.A.  Detailed information about the company can be found 
at its website: www.indonesian-aerospace.com. 
 
¶8. The contact information for DI is: 
 
Jl. Pajajaran 154 
Bandung 40174 
West Java, Indonesia 
Tel: +62 22 603 3900, 603 1717 
Fax: +62 22 603 3912, 603 2052 
 
HUME