EXTRANCHECK: POST SHIPMENT VERIFICATION:

UNCLAS HONG KONG 003713

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:
SANTEK COMPANY LTD.

REF: A) USDOC 01595

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 Export Analysis (OEA) of the USDOC Bureau of
Industry and Security (BIS),Export Control Officer
Philip Ankel (ECO) and Special Agent (SA) John McKenna
conducted a Post Shipment Verification (PSV) at Santek
Company Ltd. (Santek Hong Kong),Flat E, 9F, Block 2,
Tsui Lai Garden, Sheung Shui, Hong Kong. This PSV

SIPDIS
concerned two KD-300 probes valued at USD 2,235
classified under ECCN 2B006. ECCN 2B006 items are
controlled for national security (NS) and anti-
terrorism (AT) reasons and may be controlled for
nuclear nonproliferation (NP) reasons. The exporter is
MTI Instruments of Albany, N.Y.


3. On August 22, the ECO and SA McKenna visited Santek
Hong Kong at the address above. The ECO and SA met
with Emily Yen, Santek's representative in Hong Kong
for the past four years. Ms. Yen was open and
cooperative and stated that Santek Hong Kong operates
as an importer for goods into Hong Kong that are then
transshipped to the parent company (Santek) in China
(Santek China). Ms. Yen deals primarily with Santek's
office in Shenzhen.


4. Ms. Yen further stated that Santek China handles all
necessary paperwork for ordering items from the United
States, to include providing the documentation required
to obtain appropriate U.S. export authorizations.


5. Ms. Yen informed the ECO and SA McKenna that all
items shipped from the United States that are ordered
by Santek China for delivery to Santek Hong Kong are
forwarded on to Santek China. Ms. Yen also informed
the ECO and SA McKenna that part of the reason
transactions are handled in this manner is that it is
easier for the items to be sent to Hong Kong before
being forwarded on to China. This is, in part, because
it is sometimes difficult to obtain export licenses for
them.


6. Ms. Yen indicated that Santek only sells to
Universities and that she was not familiar with the
commodities that were the subject of this PSV. Ms. Yen
was also not aware of the end-use of the applicable
items.


7. Ms. Yen provided copies of the purchase order and
invoice related to the sale of two KD-300 probes to
Hanin Industrial University in China that are the
subject of this PSV. She provided an additional MTI
invoice (number 0960543 dated August 16, 2006)
reflecting shipment of an additional two KD-300 probes
on August 16, 2006. The invoice further states that the
ECCN of these items is 2B006 and the customer is
Tsinghua University. Ms. Yen stated that she did not

SIPDIS
engage in a dialogue with anyone from MTI concerning
the above sale, or any other sale made to Santek by MTI
since all paperwork, to include sales and forwarding
arrangements, are handled by Santek China.


8. Ms. Yen stated that the only other US firm from
which Santek China makes purchases is a firm based in
New Jersey doing business as Banner (a "Banner" logo is
located on the Santek China web page: santek.com.cn).
She also stated that the arrangement to receive
commodities ordered by Santek from Banner was the same
as with MTI meaning that Santek China handled the
ordering and shipping and the items would then be sent
to Santek Hong Kong for forwarding to China.


9. Given the information currently available to the
ECO and given that the primary role that Santek Hong
Kong serves is to move US origin goods to China from
Hong Kong, this ECO recommends that this PSV be
categorized as unfavorable.
Cunningham