EXTRANCHECK: POST SHIPMENT VERIFICATION: HONG

UNCLAS HONG KONG 003591

SIPDIS

USDOC FOR 532/OEA/LHINES/DFARROW
USDOC FOR 3132 FOR FCS/OIO REGIONAL DIRECTOR WILLIAM
ZARIT
BICE FOR OFFICE OF STRATEGIC INVESTIGATIONS

SIPDIS

E.O. 12958: N/A
TAGS: BMGT BEXP HK ETRD ETTC
SUBJECT: EXTRANCHECK: POST SHIPMENT VERIFICATION: HONG
KONG AERO ENGINE SERVICES LIMITED

REF: A) USDOC 04150

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 USDOC
Bureau of Industry and Security (BIS),Export Control
Officer Philip Ankel (ECO) and Export Enforcement
Special Agent (SA) John McKenna conducted a post
shipment verification (PSV) at Hong Kong Aero Engine
Services Limited (HAESL),70 Chun Choi Street, Tseung
Kwan O Industrial Estate, Hong Kong. The items in
question are pressure transducers (model APTE-4RB-1625)
exported to HAESL on May 3, 2006 and valued at USD
28,500. The ECCN listed on the SED is 2B230 and these
items are controlled for nuclear nonproliferation and
anti-terrorism reasons. The exporter is Transaero Inc.,
80 Crossways Park Drive, Woodbury, N.Y. (Transaero).


3. The ECO and SA McKenna visited HAESL on August 17,
2006 and met with Maggie Leung, Procurement Assistant
for HAESL. Ms. Leung provided background on HAESL and
its business, which includes aircraft engine overhaul
services (more background can be found at
www.haesl.com). HAESL is a joint venture between Rolls
Royce, Hong Kong Aircraft Engineering Company and SIA
Engineering Company.


4. Ms. Yeung provided extensive documentation showing
that HAESL had received six pressure transducers (part
# APTE-4RB-1625) and that these six transducers had all
already been placed on recently overhauled aircraft
engines, which are no longer at HAESL. As a result, SA
McKenna and the ECO were not able to view the
transducers at the facility. Note: The SED provided
to the ECO in anticipation of the check references only
three transducers. The remaining transducers where
shipped on a different date than those referenced in
the SED.


5. Ms. Leung stated that the only commodity that HAESL
purchases from transaero are the pressure transducers
that are the subject of this check. Ms. Leung further
stated that Rolls Royce is also a manufacturer of these
pressure transducers and that normally HAESL purchases
the transducers from them.


6. Note: The ECCN cited by Transaero on the SED (2B230)
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 Transaero to determine if Transaero 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 could represent a violation of Hong
Kong law.


7. At the time visited, HAESL appeared to be a suitable
recipient of the commodities shipped since HAESL
cooperated with the PSV and provided all requested
documentation concerning the use and final disposition
of the items. At the same time, the ECO and SA McKenna
were not able to inspect the subject items as they had
already been incorporated into aircraft engines and
shipped from the facility. Consistent with guidance on
reporting of PSVs where the items cannot be physically
inspected, the ECO and SA McKenna recommend that this
PSV be classified as Limited.

CUNNINGHAM