VZCZCXYZ0016
OO RUEHWEB

DE RUEHTV #2235/01 2861402
ZNR UUUUU ZZH
O 131402Z OCT 09
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3772
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RUCPDOC/USDOC WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHDC PRIORITY
RUCNFB/FBI WASHDC PRIORITY
RUETIAA/DIRNSA FORT GEORGE G MEADE MD PRIORITY
RUEAIIA/CIA WASHDC PRIORITY

UNCLAS TEL AVIV 002235 
 
SIPDIS 
SENSITIVE 
 
STATE FOR PM/DTTC 
 
E.O. 12958: N/A 
TAGS: ETTC KOMC IS
SUBJECT: BLUE LANTERN BROKER INQUIRY -- CASE NO. K-1623 
 
REF: STATE 94746 
 
¶1. (SBU) Summary:  American Aviation LTD is a 
representative/intermediary well-known in Israeli defense 
industry circles.  According to American Aviation General 
Manager Avi Ezra, the company primarily represents U.S. and 
Western European companies.  Ezra said that American Aviation 
does possess an Israeli brokering license, and has renewed 
its U.S. brokering license several times.  He noted little 
contact with the Israeli MOD Defense Export Control 
Directorate, as American Aviation does not export or 
re-export any controlled defense-related items.  Ezra said, 
however, that many of American Aviation's Israeli partners do 
re-export; he claimed a basic knowledge of U.S. defense 
export control regulations and stated he relies on these 
larger Israeli defense companies to strictly adhere to U.S. 
regulations.  Speaking candidly, Ezra described the U.S. 
defense export control system as time-consuming and cited 
several scenarios in which Israeli companies might choose to 
pursue business ventures with companies that do not require 
end-use statements, or opt to develop a capability 
indigenously.  End summary. 
 
¶2. (SBU) Per reftel, Polmiloff and FCS senior commercial 
specialist met with American Aviation LTD General Manager Avi 
Ezra at the company's offices on 17 Hatidhar Street, 
Ra'anana, on October 7.  American Aviation LTD CEO Amnon Ezra 
(Avi's older brother) briefly joined the meeting near its 
conclusion.  According to Avi Ezra, American Aviation was 
formed in 1973, and currently maintains 12 employees, 
including a full-time employee dedicated to export control 
licenses.  American Aviation is well-known in the Israeli 
defense industry; Post does not possess any information 
regarding criminal or other derogatory background. 
 
¶3. (SBU) Avi Ezra noted that American Aviation 
(www.america-aviation.co.il) acts as an 
intermediary/representative for Western European and U.S. 
companies, and maintains one small business contract with a 
South Korean firm.  According to Ezra, almost all of American 
Aviation's business is unrelated to Foreign Military Sales 
(FMS).  A third of American Aviation's business is devoted to 
defense industry -- according to Ezra, "90 percent of such 
sales" are made to Israeli companies such as Elta, Elbit, and 
New Biotechnology (NBT) LTD.  Based on the end-user 
statements, Ezra said these large Israeli companies re-export 
a majority of these sales.  He noted that an additional third 
of his business focuses on civil aviation, including Israel 
Aerospace Industries' Gulfstream project.  The final third 
entails the high-tech industry, specifically the medical 
sector.  Ezra said American Aviation often partners with 
General Electric (GE) and Phillips in these cases. 
 
¶4. (SBU) Avi Ezra noted more activity with European than U.S. 
companies with regard to controlled items.  He explained that 
in principle, there are few differences between U.S. and EU 
export control regulations.  In fact, obtaining end-use 
statements from some EU countries can be more laborious than 
the U.S. -- as an example, he noted that France requires the 
authentication of each signature on an end-use statement at 
its embassies and consulates.  However, in practice, he said 
there was a gap between the United States and the EU in terms 
of implementing and enforcing export control regulations. 
When doing business with the U.S., Ezra said, Israeli 
companies follow the export control regulations closely as 
they "expect to be audited."  European countries are more lax 
when it comes to enforcement; "there are gaps and holes in 
the net," Ezra said, which make European firms more 
attractive to Israeli companies to do business with, even if 
the end-use statement takes longer.  He noted, however, that 
these gaps are slowly closing. 
 
¶5. (SBU) Avi Ezra noted that American Aviation possesses a 
brokering license registered in his brother Amnon's name with 
the MOD Defense Export Control Directorate.  As an 
intermediary, American Aviation does not export or re-export 
any controlled items, and therefore has little contact with 
the Defense Export Control Directorate, nor has it attended 
any of the Directorate's defense export control seminars. 
Avi Ezra acknowledged that a vendor had asked American 
Aviation to obtain a U.S. brokering license, which the vendor 
initially paid for, but American Aviation has subsequently 
renewed "two or three times."  He questioned the value-added 
of the U.S. brokering license, noting that American Aviation 
does not appear to derive any benefits from the hefty license 
fee. 
 
¶6. (SBU) Avi Ezra claimed to have a "basic" understanding of 
U.S. defense export control regulations and restrictions on 
United States Munitions List (USML) controlled items.  He 
admitted, however, that he often relies on the larger Israeli 
defense companies when re-export is concerned -- these 
companies are "very disciplined" when it comes to defense 
export control regulations, although he always asks to see an 
end-user statement.  American Aviation does not possess 
facilities to secure controlled items; "we do not keep 
stock," Ezra said.  On occasion, he acknowledged that he will 
take into possession a "prototype" when "expediency is 
warranted" -- but such products typically involve the medical 
or high tech sector, and never defense industry. 
 
¶7. (SBU) Avi Ezra also noted that some companies -- 
especially those from Singapore -- contractually request 
suppliers that do not require end-use statements.  Ezra 
explained that obtaining a DSP-83 takes a great deal of time, 
especially if some of the companies involved are located in 
third world countries.  Moreover, U.S. firms will not begin 
to work on a contract until the DSP-83 is complete, again 
costing the buyer more time.  Ezra said that in order to 
expeditiously compete for such business, Israeli companies 
honor the contract request to find vendors that do not 
require end-use statements, or they develop the capability 
indigenously. 
 
¶8. (SBU) Avi Ezra argued that Israel has the technical 
capability to produce locally; it is just a question of 
whether it makes sense economically to do so.  In addition, 
he noted that embargoes sometimes do not have the effect 
intended, as the embargoed country develops a capability 
indigenously as a result.  If a request is answered locally, 
Ezra said the Israeli company would only need to "deal with 
Eli Pincu," the Director of the MOD Export Control 
Directorate.  Ezra described Pincu as "a difficult man," but 
suggested that producing locally and facing Israel's defense 
export control regulations was a less onerous option than 
navigating U.S. defense export control regulations. 
CUNNINGHAM