EXTRANCHECK: POST SHIPMENT VERIFICATION:

UNCLAS HONG KONG 003589 SIPDIS USDOC FOR 532/OEA/LHINES/DFARROW USDOC FOR 3132/FCS/OIO REGIONAL DIRECTOR WILLIAM ZARIT BICE FOR OFFICE OF STRATEGIC INVESTIGATIONS SIPDIS E.O. 12958: N/A TAGS: BMGT BEXP HK ETTC SUBJECT: EXTRANCHECK: POST SHIPMENT VERIFICATION: ALCATEL BUSINESS SYSTEMS C/O ZI CORPORATION LTD REF: A) USDOC 04512 ¶1. Unauthorized disclosure of the information provided below is prohibited by Section 12C of the Export Administration Act. ¶2. As per reftel A request and at the direction of the Office of Enforcement Analysis (OEA) of the Bureau of Industry and Security (BIS),Export Control Officer (ECO) Philip Ankel and BIS Special Agent (SA) John McKenna conducted a post shipment verification (PSV) at ZI Corporation Ltd. (Zi Corp.) on August 17, 2006. This PSV concerned intellectual property software exported by Wind River Systems, Inc. of Alameda California (Wind River) classified under ECCN 2D002 and valued at $6,143. ECCN 2D002 is controlled for national security and nuclear nonproliferation reasons. ¶3. Zi Corp.'s web site (www.zicorp.com) includes the following background on the company: Begin Text: Zi Corporation has a singular focus: to make mobile devices smarter and easier to use. Zi makes intelligent interfaces - software products that simplify data entry and interaction on communications devices. The result is richer, more personalized interaction for quicker, easier communication in 54 different language databases for use around the world. End Text. ¶4. On August 17, 2006 Export Control Officer (ECO) Philip Ankel and Special Agent (SA) John McKenna visited ZI Corp. at Unit 2003, 20/F, Lippo Center Tower 1, Hong Kong and met with Kenny Leung, Senior Software Engineer. Mr. Leung stated that Zi Corp. has seven employees at this location and they develop and provide communications software. Leung further stated that Alcatel Business Systems (Alcatel) had purchased the software from Wind River for use by Zi Corp. in its software development on behalf of Alcatel. Mr. Leung stated that Zi Corp. had no intention of reexporting or transferring this software. ¶5. According to the Shippers Export Declaration (SED) filed by Wind River, this software falls under ECCN 2D002. This software had recently been exported (June 13, 2006) to ZI Corp. and was still in its original packaging. The ECO and SA reviewed the package containing the software and verified that it contained the same model software identified on Wind River's shipping documents. ¶6. Mr. Leung also provided a copy of the packing slip for this order to the ECO and SA for review. Based on the software and documentation provided by Mr. Leung and the support documentation provided by OEA, the ECO was able to confirm that the software located at Zi Corp. appeared to be the same software that had been exported by Wind River. ¶7. Note: The ECCN cited by Wind River on the SED (2D002) would appear to require a license for export to Hong Kong even though the item was shipped NLR (No License Required). The ECO recommends that an Outreach visit be conducted at Wind River to determine if Wind River is exporting its commodities in compliance with U.S. export regulations. The ECO also requests guidance on whether this item is controlled pursuant to NSG/Wassenaar control lists. If yes, the ECO may reach out to the Hong Kong authorities on this matter as import of multilaterally controlled items absent a Hong Kong import license would appear to represent a violation of Hong Kong law. ¶8. At the time visited, the consignee (Zi Corp.) appeared to be a suitable recipient of the commodities shipped since the consignee cooperated with the PSV and provided all requested documentation. Further, the SA and ECO were able to physically inspect the software to confirm that the applicable serial numbers on the software matched those on the shipping documents. The ECO recommends that this PSV be classified as Favorable. Cunningham