VZCZCXYZ0012
OO RUEHWEB

DE RUEHTV #2014/01 2541247
ZNR UUUUU ZZH
O 111247Z SEP 09
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3412
INFO RUCPDOC/USDOC WASHINGTON DC PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUETIAA/DIRNSA FORT GEORGE G MEADE MD PRIORITY

UNCLAS TEL AVIV 002014 
 
SENSITIVE 
SIPDIS 
 
PM/DTCC - BLUE LANTERN COORDINATOR 
 
E.O. 12958: N/A 
TAGS: ETTC KOMC IS
SUBJECT: RESPONSE TO BLUE LANTERN POST-SHIPMENT CHECK, 
LICENSES 050128442 AND 050136115 
 
REF: STATE 76036 
 
¶1. (SBU) Summary:  MOD officials and representatives from 
Reshef Technologies confirm that the components from reftel 
shipments have been and will be used to produce proximity 
fuzes.  Reshef Technologies has produced and delivered 8,333 
proximity fuzes assembled from shipment components to the 
MOD, and is currently working on an additional order of 
proximity fuzes comprised of components from reftel shipments 
for the Israel Defense Force (IDF) to be delivered by the end 
of the year.  Shipment components are stored in a bunker at 
the Reshef production plant in Sderot; the MOD restricts 
access to the bunker and maintains a computerized inventory 
of the components.  Reshef Technologies acknowledged that 
typically one to three percent of components from shipments 
such as these are not used; such overstock is ordered to 
compensate for faulty components or parts damaged during the 
fuze production.  These overstock components remain stored in 
the bunker at the Reshef plant for future use by the MOD. 
Both the MOD and Reshef Technologies are aware of the proviso 
barring the use of these components to produce cluster 
munitions fuzes, and maintain that the components will only 
be used to produce proximity fuzes.  End summary. 
 
¶2. (SBU) Polmiloff and FCS senior commercial specialist met 
with Kobi Fogler from the MOD Directorate of the Security 
Defense Establishment (MALMAB) on September 1.  Fogler 
confirmed that components from the two shipments were 
purchased in order to produce M582 proximity fuzes. 
According to Fogler, Reshef Technologies, LTD., used these 
components to produce 8,333 proximity fuzes, which have 
subsequently been delivered to the IDF Ammunition and 
Missiles Center.  Fogler stated that an additional 32 
proximity fuzes were used during a "firing test" performed by 
Reshef Technologies and the IDF.  Fogler said an additional 
series of proximity fuzes comprised from components from 
these two shipments were currently being assembled by Reshef 
Technologies; the IDF expects the delivery of these fuzes by 
the end of 2009.  Fogler acknowledged the proviso disallowing 
these exported items from being used to produce cluster 
munitions.  He stated that all components from these 
shipments will be used to produce proximity fuzes -- and not 
for timed fuzes used in cluster munitions. 
 
¶3. (SBU) Polmiloff and FCS senior commercial specialist met 
with Reshef Technologies Managing Director Shlomo Manoach and 
fuze plant manager Eitan Shemesh at Reshef Technologies' 
headquarters in Or-Yehuda (15 minutes outside of Tel Aviv) on 
September 10.  MALMAB's Kobi Fogler also attended the visit, 
as well as the MOD's Ran Bar-Ner, who introduced himself as 
the MOD's facility security liaison for Reshef, but whose 
business card identified him as working for MALMAB.  Manoach 
and Shemesh explained that Reshef Technologies was 
established in 1984, and is publically-owned by Aryt 
Industries, LTD.  According to Manoach, Reshef Technologies 
comprise approximately 95 percent of Aryt Industries' 
business.  Manoach said Reshef Technologies bought out 
Soltam's 10 percent-owned shares in December 2007.  According 
to a technical brief, Mr. Zvi Levi is the major share holder 
with 52 percent of Reshef's shares. 
 
¶4. (SBU) Manoach and Shemesh said Reshef Technologies have 
been an approved supplier for the MOD since 1988, and is the 
main supplier to IDF ground forces for fuzes used in mortar, 
artillery, tanks, and rockets.  Shemesh said approximately 80 
percent of Reshef's company business lies with the IDF; the 
remaining 20 percent of sales includes customers in Romania, 
Canada, Bulgaria, and Belgium -- the end user in these cases 
is always the host country's Army or MOD.  According to 
Manoach, Reshef Technologies is well-versed in Israeli and 
U.S. export control regulations, while Reshef representatives 
have participated in all Israeli Defense Export Control 
Division (API) conferences, and participated in the most 
recent conference of the Society for International Affairs 
(SIA) held in December 2007. 
 
¶5. (SBU) Shemesh said the Reshef fuze production plant 
located in Sderot includes a storage bunker for the 
components.  The MOD maintains a computerized inventory 
system for the components; Fogler noted that all plant 
employees possess MOD "confidential" security clearances, 
while access to the storage bunker is restricted to essential 
personnel only.  Shemesh said the components are stored in 
original manufacturer boxes in the bunker; when the 
components are finally removed to produce the fuzes, they are 
often mixed on the production line with components from 
 
another subcontractor. 
 
¶6. (SBU) Manoach and Shemesh stressed that the components are 
only used for the products Reshef Industries was ordered to 
produce -- in the case of these shipments, M582 proximity 
fuzes (or their commercial name, the M180 Omicron fuze). 
They confirmed that Reshef Technologies is working on another 
order of M582 proximity fuzes that will be assembled from 
components from these two shipments, which they plan to 
deliver to the IDF by the end of the year. 
 
¶7. (SBU) Manoach and Shemesh also noted that any remaining 
component stock is stored in the bunker, and is available 
only to the customer -- in this case, the MOD -- according to 
the customer's instructions.  They explained that typically, 
one to three percent of components from shipments such as 
these are not used -- this intended overstock is typically 
ordered in the event some of the components are faulty or 
harmed during fuze production.  Manoach explained that this 
overstock remains in the plant storage bunker for the MOD's 
future use.  Fogler added that the MOD annually conducts an 
inventory check at the storage bunker. 
 
¶8. (SBU) Manoach and Shemesh confirmed that the components 
from these shipments have been and will only be used to 
produce M582 proximity fuzes.  Polmiloff inquired whether 
these components could be used to produce fuzes for cluster 
munitions.  Shemesh said cluster munitions use timed fuzes, 
which are entirely different from proximity fuzes. As such, 
most of the components from these two shipments could not be 
used to produce timed fuzes, he said.  Shemesh did 
acknowledge that the cover lower components from shipment B 
(DTC Case 050136115; reftel) could potentially be used in the 
manufacture of timed fuzes for cluster munitions.  Both 
Manoach and Shemesh reiterated, however, that Reshef 
Technologies would only use the components to produce 
proximity fuzes, as ordered by the MOD. 
 
¶9. (SBU) Manoach was able to produce documents submitted in 
support of these license applications, including DSP-83 
Nontransfer and Use Certificates, purchase orders, end-use 
statements, and certificates of delivery.  Polmiloff and FSC 
senior commercial specialist inquired why the Interglobal 
Forwarding Service was listed as the seller in these cases, 
when Amtec Corporation and R.A. Zweig Inc. appeared to be the 
component manufacturers.  Both Manoach and Fogler replied 
that the shipments were arranged by the GOI MOD mission in 
New York using foreign military financing (FMF); any further 
questions on the matter might be raised with the mission. 
 
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