VZCZCXYZ0000
RR RUEHWEB

DE RUEHMD #1028 2931538
ZNR UUUUU ZZH
R 201538Z OCT 09
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 1358
INFO RUEHJA/AMEMBASSY JAKARTA 0051

UNCLAS MADRID 001028 
 
SIPDIS 
 
PM/DTCC - BLUE LANTERN COORDINATOR MEREDITH SUNDLOF 
STACIE ZERDECKI EUR/WE 
 
E.O. 12958: N/A 
TAGS: ETTC KOMC SP ID
SUBJECT: REPLY TO BLUE LANTERN POST-SHIPMENT CHECK 050106146 
 
REF: A. STATE 92584 
     ¶B. 9/9/09 SUNDLOF-MURRAY FAX 
     ¶C. 2008 MADRID 408 
 
¶1.  SUMMARY:  Post has previously confirmed the bona fides of 
Spanish aerospace and defense leader European Aeronautic 
Defense and Space (EADS) CASA as a responsible recipient of 
United States Munitions List items (ref C).  Post contacted 
the Spanish Air Force as well as EADS CASA regarding the 
post-shipment check requested (ref A).  David de Teran, Head 
of Export Compliance for EADS CASA, informed Madrid ODC and 
Pol-Mil officer October 7 that the cables and cable 
assemblies for C-295 aircraft included in license 050106146 
were not/not intended for the Spanish Air Force, had 
therefore not been received by Spain, and further, remain in 
Indonesian Aerospace facilities in Bandung.  EADS CASA 
questioned whether the cables fall under International 
Traffic in Arms Regulations (ITAR - see para 3) but undertook 
to inform its Indonesian partners and U.S. suppliers of 
related limitations and provisos.  EADS CASA will submit a 
General Correspondence to the Department in order to modify 
the actual end-user once known and seek permission to 
re-export the cables to the authorized end user.  END SUMMARY. 
 
//Background on the "Unusual Routing"// 
 
¶2.  EADS CASA worked together with Indonesia on the 
development and production of the CN-235 aircraft.  De Teran 
elaborated that EADS CASA had subcontracted a work package 
for the C295 to Indonesian Aerospace (the foreign 
intermediate consignee listed in reftel A).  The work package 
was only for C295 aircraft but did not include a specific 
end-user of said aircraft.  According to de Teran, Indonesian 
Aerospace purchased the cables described (ref A) from P&R 
Trading, Inc. in 2008 for the fulfillment of the work 
package.  In doing so, Indonesian Aerospace officials did not 
inform EADS CASA that the items ordered were subject to ITAR, 
necessitating the submission of a DSP5.  The company 
nonetheless contacted Fulgencio Fernandez Perez, EADS CASA's 
technical representative in Indonesia, asking that he sign 
the End-Use Certification (ref B) in March 2008 and 
specifying that an end user had to be included.  De Teran 
held that Fernandez did not know the end-use statement was 
for a DSP5 or any other U.S. export license and was 
furthermore unaware of the terms, conditions, provisos, and 
limitations of the DSP5.  Under pressure from Hadi Djumhana 
of Indonesian Aerospace to list an end-user, Fernandez 
allegedly included the Spanish Air Force (a current customer 
of the C295) as a "potential" end-user. 
 
//ITAR Regulations// 
 
¶3.  EADS CASA's lead buyer for this type of cable maintains 
that none of its suppliers have ever informed the company 
that the items on the license fall under ITAR.  De Teran 
clarified that EADS CASA does not normally purchase from P&R 
Trading, Inc. but has experience with a Texas-based supplier 
called Polygon.  De Teran planned to contact P&R Trading to 
ask why the supplier felt the need to submit a DSP5 at all if 
the items included were not subject to ITAR. 
 
//Next Steps// 
 
¶4.  EADS CASA confirms that the cables and cable assemblies 
are still in Indonesian Aerospace's facility.  De Teran said 
EADS had informed Indonesian Aerospace that they were not to 
move the cables to other locations, including EADS CASA's 
facility, without the prior written approval and notice of 
EADS CASA.  In response to the confusion occasioned by this 
order and the above signature process, EADS CASA has 
instituted a policy stating that all end-use statements, 
end-user certificates, DSP83s, and any other documents in 
support of U.S. export licenses will require the signature of 
the Head of Procurement or Head of Program as well as de 
Teran's signature as head of Export Compliance.  In the case 
of signature of a TAA, de Teran said EADS would enforce the 
same internal control procedures.  De Teran said EADS CASA 
would plan to submit a General Correspondence to the State 
Department (presumably via DS-6004) in order to modify the 
end-user listed on the DSP5, once a concrete end-user is 
known.  Once EADS receives the Department's eventual 
approval, EADS will retrieve the cables from Indonesian 
Aerospace and re-export same to the end-user authorized by 
the State Department. 
CHACON