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