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