US embassy cable - 05SOFIA1808

S E C R E T SOFIA 001808 
 
SIPDIS 
 
E.O. 12958: DECL: 10/20/2015 
TAGS: PARM, PREL, MASS, MARR, BG 
SUBJECT: BULGARIA CONFIRMS MANPADS COMPONENTS SHIPPED, 
CLAIMS MISUNDERSTANDING 
 
REF: STATE 154646 
 
Classified By: DCM Jeffrey D. Levine for reasons b, c, and d 
 
1. (S) SUMMARY: The GOB confirmed that 50 MANPADS components 
were shipped to Egypt after the conclusion of a 
U.S.-Bulgarian bilateral agreement intended to take Bulgaria 
out of the commercial MANPADS business.  The GOB maintains it 
never committed to preventing this sale and claims a 
misunderstanding has occurred.  Further guidance requested. 
(See para 7).  END SUMMARY. 
 
2. (S) DCM and Poloff delivered reftel demarche to multiple 
deputy minister and working-level contacts in the GOB in late 
August and early September.  Ms. Ivelina Bahchevanova, 
Director for Defense and Economic Cooperation and 
Internationally Controlled Trade in the Ministry of Economy 
and Energy, confirmed October 18 that the Bulgarian company 
Samel-90 and the Egyptian MOD had signed a contract for 300 
Strela-2M gripstocks (part number 9P58) substantially prior 
to the exchange of diplomatic notes between the USG and the 
GOB concerning MANPADS on January 21, 2005.  To date, 50 
units have been shipped.  The contract did not include any 
complete systems, missiles, explosive material, or electronic 
parts.  The Bulgarian Commission for Control of Foreign Trade 
Transactions with Arms and Dual-Use Goods and Technologies 
has temporarily suspended the export license for this 
contract, and, in Bahchevanova's personal opinion, the 
remaining 250 units can be a subject for consultation between 
the USG and the GOB.  However, she added that the customer 
does not appear interested in purchasing the remaining 250 
units. 
 
3. (S) The decision to grant an export license for this 
contract was initially suspended during negotiations with the 
USG on the MANPADS agreement.  Bahchevanova said that the MFA 
had addressed this contract with the "State Department or the 
American Embassy," but she was unable to confirm where or 
with whom, and that the MFA had received no response.  The 
Commission discussed this contract several times and decided 
to grant an export license for the following reasons: 1) the 
nature of the goods - non-explosive, non-electronic, and 2) 
no intermediary company or broker was involved. 
 
4. (S) Bahchevanova recalled the April 11 meeting in which 
she and Christo Atanasov, also from her office, met with 
Poloff's predecessor.  According to our records, Ministry 
officials Bahchevanova and Atanasov informed Poloff's 
predecessor that the GOB would not approve this transfer. 
However, she claimed that, "Neither I nor Christo promised 
anything.  It was not in our mandate at the working level to 
do so."  She said that she had reviewed her meeting notes, 
which she passed to her deputy minister and minister, and she 
asserted that no assurances were given and claimed there was 
"some kind of misunderstanding." 
 
5. (S) Bahchevanova gave Poloff copies of the following 
documents: 1) an end-user certificate from the Egyptian MOD; 
2) a delivery verification certificate for 50 units from Arab 
International Optronics, which she described as an Egyptian 
Government-owned company, stating the end user was the 
Egyptian MOD; and 3) a three-page document in Arabic 
pertaining to the sale bearing the stamp of the Bulgarian 
Embassy in Cairo. 
 
6. (S) Bahchevanova expressed her personal opinion that the 
USG and the GOB should formalize the consultation process and 
create some sort of written record of the final GOB decision 
in cases such as this to avoid future misunderstandings. 
(Note: The GOB has had a draft consultation procedure from us 
since the diplomatic notes were exchanged in January, but has 
yet to formally accept it.  In conjunction with our multiple 
demarches, we again presented copies of the proposed 
consultation procedure).  Bahchevanova added that it was 
possible there might never be another instance in which the 
GOB would want to export MANPADS or MANPADS components. 
Poloff asked Bahchevanova to continue the export license 
suspension until she heard back from us.  She agreed. 
 
7. (S) COMMENT: The GOB's decision to proceed with this 
contract despite USG objections is disappointing.  However, 
we do not expect the GOB to make a habit of evading the 
spirit of the agreement in the future.  It appears that this 
transaction was allowed to proceed, in part, because it 
originated prior to the exchange of diplomatic notes.  We 
will use this opportunity to push the GOB to formally accept 
a structured consultation process.  We suggest Washington 
provide instructions requesting the approved export license 
be cancelled in the spirit of our agreements.  Additional 
talking points supporting this position are requested. 
LEVINE