EXTRANCHECK: PRE-LICENSE CHECK: SUPREME

UNCLAS HONG KONG 003749 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: PRE-LICENSE CHECK: SUPREME COMPANY REF: A) STATE 080771 B) EXP.LIC. D357385 C) 03/29/2005 Hong Kong 01626 ¶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 pre-license check at Supreme Company (Supreme),Room 1814, Park-In Commercial Center, 56 Dundas Street, Mong Kok, Hong Kong. This PLC concerned 100 bayonets valued at USD 7,600 and classified under ECCN 0A918. ECCN 0A918 items are controlled for crime control (CC) reasons. The license applicant is Ontario Knife Company, 26 Empire Street, Franklinville, N.Y. ¶3. On August 23, 2006 SA McKenna and the ECO visited Supreme at the address listed above and met with Tania Chau, Director. ¶4. Chau stated that he ordered 30 bayonets, not 100 as listed Reftel A, for sale to collectors. Chau stated that the bayonets would be placed in his showroom at the above address (room 1802) and sold to collectors who visited his showroom. He expected to sell 1-2 of these items per month. By follow-up e-mail to the ECO, Mr. Chau stated that Supreme had, in fact, ordered 100 bayonets from Supreme Co. This would appear to provide Supreme Co. with a four to eight year supply of bayonets. ¶5. Chau stated the he understood that the USG placed licensing restrictions on these items, and as such, they could not be reexported to China. He provided no specifics on how Supreme would ensure that no such reexports occurred. ¶6. Chau stated that he does not sell items via the internet, however, an internet search revealed an extensive listing of items available for purchase over the internet from Supreme's web site (Supremeco.com.hk). Some of those items would appear to fall within EAR control parameters. The ECO recommends that a review of the web site be conducted. ¶7. Chau stated that he orders items from U.S. manufacturers Ontario knife, Colt Steel, United Cutlery, CRKT, and Black Jack. The majority of his customers for all of these commodities are collectors. Mr. Chau indicated that he considers collectors to be individuals who like to purchase various weapons and related items for display or recreational purposes. ¶8. Chau indicated that he has been in business since 1987 and he attends the annual SHOT Show in Las Vegas in an effort to identify items of interest and to review the latest line of items for sale within the industry. ¶9. Note: Supreme was the subject of a previous unfavorable PLC described in Reftel C. ¶10. Consistent with the facts noted above, the ECO recommends that this check be considered Unfavorable. Cunningham