US embassy cable - 03ABUDHABI1768

UNCLAS ABU DHABI 001768 
 
SIPDIS 
 
USDOC FOR BIS/ S. HAN 
SECSTATE FOR PM/DTCC - BLUE LANTERN COORDINATOR 
DUBAI FOR T. LERSTEN 
 
E.O. 12958:    N/A 
TAGS: KOMC, ETTC, TC 
 
SUBJECT: BLUE LANTERN LEVEL 3: PRE-LICENSE END USE CHECK 
APPLICATION TA-1017-03 
 
REF: STATE 062909 
 
1.   REFTEL REQUESTED POST CONDUCT A PRE-LICENSE CHECK ON 
MIDDLE EAST OPTRONICS, LISTED AS THE FOREIGN CONSIGNEE ON 
DTC CASE #TA-1017-03, WHICH PROPOSES THE TRANSFER BY FLIR 
SYSTEMS OF TECHNICAL DATA FOR THE REPAIR AND MAINTENANCE OF 
FLIR THERMAL IMAGING EQUIPMENT TO MIDDLE EAST OPTRONICS. 
 
2.   ON APRIL 5, 2003, AT THE REQUEST OF THE 
POLITICAL/ECONOMIC OFFICER IN DUBAI, COMMERCIAL OFFICER MARY 
O'BRIEN MET WITH HADIF AL-MANSOURI OF EMIRATES AVIATION, 
HAMDAN STREET, ABU DHABI. ON APRIL 6, 2003, COMMOFF O'BRIEN 
ALSO MET WITH MOUHIDDINE (MIKE) GHALAYINI, UAE 
REPRESENTATIVE OF FLIR SYSTEMS AND MANAGING DIRECTOR OF 
MIDDLE EAST OPTRONICS, DUBAI AIRPORT FREE ZONE, DUBAI. 
 
3.   IN CONVERSATIONS WITH THE TWO PRINCIPALS, THE FOLLOWING 
INFORMATION WAS PROVIDED: CURRENTLY ALL FLIR THERMAL IMAGING 
PRODUCTS IN THE GULF REGION, THOSE LOCALLY OWNED AND THOSE 
OWNED BY US MILITARY STATIONED HERE, MUST BE SENT TO THE 
U.S. FOR REPAIR.  THIS PROCESS CAN TAKE UP TO 3 MONTHS DUE 
TO TRANSPORTATION AND CUSTOMS PROCEDURES.  IF FLIR HAD AN 
APPROVED REPAIR STATION HERE IN THE UAE, THE TIME FOR REPAIR 
COULD BE CUT TO 48 HOURS FOR UNITS IN THE UAE AND A WEEK FOR 
UNITS IN APPROVED GULF COUNTRIES, AS WELL AS EGYPT, JORDAN 
AND MOROCCO.  FLIR APPROACHED EMIRATES AVIATION AS A PARTNER 
DUE TO THEIR EXCELLENT REPUTATION WITH THE UAE MILITARY. 
 
4.   EMIRATES AVIATION HAS BEEN IN BUSINESS SINCE 1991 AS A 
SUPPLIER OF SPARE PARTS AND OTHER SERVICES FOR THE UAE 
MILITARY.  THE COMPANY AND MR. AL MANSOORI ARE WELL KNOWN TO 
THE COMMERCIAL OFFICE HERE IN ABU DHABI AND ENJOY AN 
EXCELLENT REPUTATION.  MR. AL-MANSOORI PROVIDED A COPY OF A 
SIGNED CONTRACT #DP/A1-2-3-4/98/62/4/32 WITH THE UAE 
MILITARY TO PROVIDE OVERHAUL, REPAIR AND MODIFICATION 
SERVICES FOR HELICOPTERS, MISSILES, AMMUNITION, GROUND POWER 
UNITS, GENERATORS, AND BATTLEFIELD-CONSUMABLE EQUIPMENT. 
THEY ALSO ARE APPROVED BY THE UAE CIVIL AVIATION AUTHORITY 
AS A STOCKIST AND SUPPLIER FOR AIRCRAFT PARTS AND EQUIPMENT, 
AND ARE A MEMBER OF THE AIRLINE SUPPLIERS ASSOCIATION. 
LASTLY THEY ARE REGISTERED WITH NATO AS A SUPPLIER OF 
MILITARY SPARE PARTS AND EQUIPMENT.  THE COMPANY HAS TEN 
EMPLOYEES AND IN 2002 EMIRATES CLOSED 70 ORDERS WITH 23 U.S. 
COMPANIES FOR A TOTAL OF $1,000,000. 
 
5.   FLIR SYSTEMS AND EMIRATES AVIATION ARE EACH 50% 
SHAREHOLDERS IN MIDDLE EAST OPTRONICS (MEO), WHICH HAS BEEN 
ESTABLISHED IN THE DUBAI AIRPORT FREE ZONE (DAFZA), LICENSE 
#196 (DOCUMENTS BEYOND THIS INFORMATION ARE NOT PUBLIC 
RECORD HERE AS THEY ARE IN THE US).  THE OFFICES, MEASURING 
OVER 300 SQUARE METERS, ARE LOCATED IN AN OFFICE/WAREHOUSE 
FACILITY.  ONLY THE OFFICES ARE IN CURRENT USE UNTIL THE 
EXPORT LICENSE IS APPROVED TO ESTABLISH THE REPAIR FACILITY. 
 
6.   DAFZA IS IMMEDIATELY ADJACENT TO THE AIRPORT AND WILL 
THEREFORE SHORTEN TRANSIT TIME FOR PRODUCTS TO BE REPAIRED. 
IN ADDITION, MEO'S LOCATION IN DAFZA ALLOWS IMPORTS AND 
EXPORTS WITHOUT PAYMENT OF UAE TARIFFS.  MEO WILL BEGIN AS A 
REPAIR SHOP FOR FLIR BUT MEO IS ALSO LOOKING TO ESTABLISH 
REPAIR AGREEMENTS WITH OTHER MANUFACTURERS AS WELL.  MR. 
GHALAYINI HAS BEEN SELLING FLIR MILITARY SYSTEMS, ALL OF 
WHICH REQUIRE EXPORT LICENSES, IN THE GULF REGION FOR OVER 
SIX YEARS AND HE IS WELL ACQUAINTED WITH THE EXPORT LICENSE 
PROCESS AND COMPLIANCE WITH CONDITIONS ON SUCH LICENSES.  HE 
UNDERSTANDS THAT THERE MAY BE RESTRICTIONS REGARDING 
TRANSFER OF THIS TECHNOLOGY, EVEN THOUGH IT IS MAINTENANCE 
AND REPAIR TECHNOLOGY, NOT DESIGN OR PRODUCTION TECHNOLOGY. 
COMMOFF O'BRIEN CAN VERIFY MEO'S INTENT TO ABIDE BY ANY 
LICENSE CONDITIONS IMPOSED FOR THE REEXPORT OF SPARE PARTS. 
 
7.   PLEASE DIRECT FOLLOWUP INQUIRIES IF ANY TO MARY 
O'BRIEN, EMAIL MARY.O'BRIEN@MAIL.DOC.GOV. 
 
WAHBA