US embassy cable - 05ANKARA4081

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 004081 
 
SIPDIS 
 
STATE FOR EUR/SE, PM/DTTC AND PM/RSAT 
 
E.O. 12958: DECL: 07/12/2015 
TAGS: MARR, MASS, PREL, PGOV, EFIN, ETTC, BEXP, TU, IS 
SUBJECT: CHARGE WARNS TURKISH DEFENSE INDUSTRIAL POLICY MAY 
PREVENT US DEFENSE INDUSTRY PARTICIPATION 
 
REF: A. ANKARA 3617 
 
     B. ANKARA 1557 
 
Classified By: Charge d'Affaires Nancy McEldowney, reasons 1.4 (b) and 
(d). 
 
1. (C)  SUMMARY: In her initial call on Turkey's Under 
Secretary for Defense Industries (Savunma Sanayi Mustesarligi 
 
SIPDIS 
-SSM) Murad Bayar, Charge d'Affaires underscored that SSM's 
plans to require pre-approval of licenses before a contract 
is awarded could result in the inability of US companies to 
participate in current ATAK Helicopter tender and future 
tenders.  She welcomed the Sikorsky Seahawk purchase but 
noted the difficulty of getting another EXIM Facility 
extension and urged the Turkish government to communicate its 
interest in the facility to Washington.  Bayar confirmed the 
Seahawk buy is predicated on an EXIM facility extension but 
placed the burden for Turkey's efforts to secure it on 
Treasury Minister Babacan.  Regarding the licensing issue, 
Bayar confirmed that, on the ATAK tender, and in future 
tenders, Turkey would look for an indication of U.S. intent 
to support the project concept and the related technology 
transfer request.  Bayar was unconvinced that this 
requirement would preclude US private sector participation 
and challenged the USG to send an official to Turkey who 
could work with SSM representatives to identify a way in 
which SSM could achieve its goal within US legal and 
procedural constraints.  (See action request in para. 6.) END 
SUMMARY. 
 
2. (C) Charge welcomed the recent F-16 upgrade agreement and 
Turkey's decision to buy 12 Sikorsky Seahawk helicopters (ref 
a).  She warned that it would be very difficult to get a 
second EXIM facility extension and inquired about Turkey's 
strategy to persuade EXIM and the US Congress.  While 
acknowledging the deal is predicated on the facility 
extension, Bayar divorced himself of any responsibility for 
making that happen.  He suggested the USG had an interest in 
securing the extension and shared some responsibility for 
making it happen, but said State Minister Ali Babacan would 
lead Turkey's efforts and asked the Charge to explain to 
Babacan the best approach to EXIM and other parts of the USG 
in Washington. 
 
SSM LOOKING FOR USG PRE-APPROVAL OF LICENSES 
-------------------------------------------- 
 
3. (C) Turning to the current tender for up to 91 ATAK 
Helicopters (ref b), Charge voiced concern that SSM's new 
requirement for USG approval of licenses before a tender is 
awarded would effectively cut US companies out of the 
competition.  SSM well knows the constraints on US defense 
companies and the USG would like to see a level playing field 
for all interested companies.  Bayar demurred, saying he 
didn't know the details of the USG licensing process, but 
added that that this was not his issue, but rather an issue 
for the USG and US companies.  Bayar characterized the new 
requirement as intended to save both SSM and the winning 
company from wasting time and money on a project that, in the 
end, would not receive government approval.  Beginning with 
the ATAK tender, SSM will look for some indication from the 
USG that it approves the project concept and supports the 
transfer of related technology.  Bayar said he wants advance 
"clarity" on the USG position.  He emphasized that he wanted 
to see US participation in Turkish tenders but added that "if 
this is a show stopper for US companies, then so be it." 
 
ISRAEL MODEL FOR ATAK PROGRAM 
----------------------------- 
 
4. (C) Bayar explained that his desired end state in the ATAK 
program and future projects is to have the freedom to play 
with the product configuration.  As new Turkish or other 
acquired technology comes on line, SSM wants to be able to 
install it rather than to go back to the foreign platform 
manufacturer and ask them to incorporate it (Note: This would 
allow SSM to avoid further USG reviews and approvals).  In 
the case of the ATAK Helicopter, this translates to the 
integration of a Turkish-developed mission computer and the 
enhancement/modification of the aircraft weapons, avionics 
and other systems.  Bayar stated that SSM will not buy a helo 
platform without this capability and said his model for this 
concept was Israel, which he believed had purchased F-16 
engines and airframes from the United States and installed 
Israeli-made equipment (avionics, weapons, communications, 
radars, etc.). 
 
BAYAR CHALLENGES USG TO IDENTIFY A WORK-AROUND 
--------------------------------------------- - 
 
5. (C) Claiming that, during the six months since the initial 
ATAK tender was issued, he had not had an opportunity to talk 
to a USG official who understood the technicalities of the US 
legal and regulatory system, Bayar challenged the US to send 
someone who could explain the framework for the US/Israeli 
F-16 modifications and the USG authorization process.  (Note: 
Post is unaware of any such arrangement with Israel and would 
welcome Department confirmation/denial of the sale and 
specific details.  End Note.)  He expressed certainty that, 
if SSM representatives could sit down with someone who knew 
the USG system, together we could work out an acceptable way 
forward.  Charge agreed that our goal is to find a way to 
re-invigorate what has traditionally been our strongest area 
of bilateral cooperation. 
 
6. (C) Action Requests: 
 
-- Post requests Department work with DOD to identify an 
appropriate official for travel to Turkey to discuss with SSM 
the specifics of the USG licensing process and to evaluate 
the potential for USG Advisory Opinion or other preliminary 
indication of approval for projects like the ATAK Helicopter 
that would incorporate Turkish components into a US platform. 
 
-- Additionally, Post would appreciate Department 
confirmation or denial of the Israeli F-16 modification 
program described in para. 4 as well the program specifics. 
MCELDOWNEY