VZCZCXRO1416
PP RUEHAG RUEHDF RUEHLZ
DE RUEHRL #0822 1891624
ZNR UUUUU ZZH
P 081624Z JUL 09
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC PRIORITY 4559
INFO RUCNFRG/FRG COLLECTIVE

UNCLAS BERLIN 000822 
 
SENSITIVE 
 
SIPDIS 
STATE FOR PM/DTCC - BLUE LANTERN COORDINATOR (BALLARD) 
STATE FOR EUR/CE PETER SCHROEDER 
 
E.O. 12958: N/A 
TAGS: ETTC KOMC GM
SUBJECT: BLUE LANTERN REPONSE: POST-SHIPMENT END-USE CHECK 
ON LICENSE 050174850 
 
REF: STATE 62847 
 
¶1. (SBU) Regarding Blue Lantern end-use check 050174850, we 
assess Grauwolf is in compliance with USML controls and a 
reliable recipient of USML items.  Grauwolf provided 
satisfactory answers to all ref inquiries in a timely manner. 
 We independently verified with the Ludwigsau Office of Trade 
and Industry that Grauwolf is a legitimate German enterprise. 
 Wolfgang Grau, CEO of Grauwolf, is very motivated to 
expedite their license request with Graf and Sons Inc and 
indicated his willingness to respond to any further questions 
that may come up.  Grau said he is familiar with USG 
regulations governing the import of US-origin defense 
articles. 
 
 
ABOUT GRAUWOLF 
-------------- 
 
¶2.  (SBU) Grauwolf was started in June 2004 by Wolfgang Grau 
to supply German hunters, reloaders and gun enthusiasts with 
small arms related sporting and hunting equipment.  Grauwolf 
is a re-seller of small arms articles from German wholesalers 
and U.S. imports from Graf and Sons Inc.  Grauwolf's customer 
base is 98 per cent concentrated in the German domestic 
market and two per cent composed of sales to customers in 
other EU countries. 
 
¶3.  (SBU) Grau estimates that in his company's first three 
years of business, it turned over 150,000 euros in sales.  He 
emphasized that while sales in the first couple of years were 
sluggish, they have since picked up considerably, 
particularly with regard to demand for U.S. origin items. 
Grau attributes the increased interest in his company's 
products to the opening of his company to internet business 
at the end of 2008 (www.grauwolf.net).  Grau anticipates 
sales on the order of 500,000 to 750,000 euros for the next 
three years. 
 
 
PAST LICENSES AND CURRENT SITUATION 
----------------------------------- 
 
¶4.  (SBU) Grau said his company previously obtained four 
minor licenses to import "mainly gunstocks" with various 
partners in the U.S. and one major license with Graf and Sons 
Inc (DOS 964981), issued three years ago and valued at 
$750,000 to import bullets, bullet casings, and rifle/pistol 
parts.  The Graf and Sons Inc license expired on June 6, 2009 
and Grau is highly motivated to renew it, this time for 
$1,250,000 in response to increased customer demand. 
 
Details on license DOS 964981 (expired 06/06/09): 
Rifle and Pistol Brass   -- $125,000 
Rifle and Pistol Bullets -- $80,000 
Minor Gun Parts          -- $250,000 
 
 
INDEPENDENT VERIFICATION OF GRAUWOLF 
------------------------------------ 
 
¶5.  (SBU) On June 2, Econoff contacted the Office for Trade 
and Industry in Ludwigsau, Germany to verify the bona fines 
of Grauwolf.  The representative from the Office for Trade 
and Industry confirmed Grauwolf's registration with them 
since 2004 and indicated personal familiarity with Grauwolf. 
Koenig