VZCZCXYZ0001
RR RUEHWEB
DE RUEHUL #1033/01 1420339
ZNR UUUUU ZZH
R 210339Z MAY 08
FM AMEMBASSY SEOUL
TO RUEHC/SECSTATE WASHDC 0071
INFO RUCPDOC/USDOC WASHDC 6897
RUEKJCS/SECDEF WASHINGTON DC
RUEPINS/HQ BICE INTEL WASHINGTON DC
UNCLAS SEOUL 001033
SIPDIS
STATE FOR PM/DTCC-BLUE LANTERN COORDINATOR
E.O. 12958: N/A
TAGS: AU ETTC KOMC KS
SUBJECT: RESPONSE TO BLUE LANTERN LEVEL 1: POST-
SHIPMENT END-USE CHECK LICENSE 050047010
REF: A) STATE 47861
1. Per reftel, post contacted the Defense Acquisition Program
Administration (DAPA) and EO System Co. Ltd. by email and phone.
Due to resource constraints, a site visit was not conducted.
2. DAPA's International Cooperation Division Export-Import Control
Officer Ms. Lee Yoem-kyong confirmed that EO System has been a
DAPA registered defense material supplier since 1984. EO System is
an
official supplier of Night Monocular Scopes and Day & Night Sight
and
Night Driver Viewers that are primarily installed in armored
vehicles for
the Korean Marine Corps under the Ministry of National Defense
(MND).
The EO supplies these items directly to ROK MND. Moreover, EO
System is an official and primary supplier of binocular, monocular
and
periscopes for defense purposes for the ROK Marine Corps.
3. DAPA confirmed that in 2006 it signed a contract with Samsung
Techwin to supply 42 armored vehicles (1 intended for the commander
and 41 intended for the Korean Marine Corps). The contracting
period is
from March 2008 to August 2010. DAPA also reported that under the
contract between EO and Samsung Techwin, the EO's delivery of the
remaining 30 Gunner Viewer (IR module integrated) sets is scheduled
to
be completed by December 17, 2009.
4. During initial conversations last week with Mr. Hwang In-seop,
EO's
Sales Manager, Post was informed that EO had imported the infrared
radars from Selectron. However, in a subsequent conversation on May
20,
2008 with Mr. Bae Kyu-yong, EO's Purchasing Manager, it was
explained
that the company had canceled the initial order for infrared devices
from
Selectron because the U.S. Company had been unable to meet EO's
delivery dates.
5. In August 2007, EO placed an order for 15 infrared devices from
SCD,
an Israeli firm, and took delivery in September 2007. EO plans to
import
the remaining infrared devices required to fulfill its contract from
SCD
although the additional order has not yet been placed. EO
understood
that SCD's infrared devices were Israeli developed. Mr. Bae
admitted that
the confusion on this case was due to miscommunications within EO.
6. Ms. Lee at DAPA was unable to confirm EO's account of the change
in
suppliers because DAPA does not check every single part that is used
in
the assembly of contracted goods. DAPA reported that its main
concern is
that the completed armored vehicle sold by Samsung Techwin operates
as
ordered.
7. DAPA reported that with respect to the 41 E3500 - infrared
modules,
EO System's role is to integrate the imported infrared devices into
the
Gunner Viewers and supply them to Samsung Techwin, a direct supplier
of armored vehicles equipped with the Gunner Viewers. If EO had not
canceled the order with Selectron, the transactions of the infrared
devices
would have been as follows:
Selectron (US seller) => EO System (Foreign Consignee and local
supplier of Gunners' Viewer) => Samsung Techwin (Supplier of
armored
vehicles equipped with the Gunners' Viewers assembled by US
manufactured IR modules) => ROK Marine Corps/MND (End-user)
8. DAPA officials reported that on December 24, 2007 EO System had
delivered 11 sets of the Gunner Viewers to Samsung Techwin,
presumably
with the devices supplied by SCD. Samsung Techwin subsequently
delivered three completed armored vehicles to the ROK Marine
Corps/MND (one on March 28 2008, and two on April 30 2008) that
contain Gunner Viewers integrated by EO System.
9. In Post's conversations with EO System, it was unclear if EO or
Selectron had informed MND and Samsung Techwin about reporting a
loss or theft within 15 days.
VERSHBOW