EXTRANCHECK: PRE-LICENSE CHECK: HAECO Limited

UNCLAS HONG KONG 004608

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: HAECO Limited

REF: A) USDOC 06263 B) EXP.LIC. D366543 C) HK 03591 D)
HK 07053


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),conducted a pre-license
check at Hong Kong Aircraft Engineering Company Limited
(HAECO),80 South Perimeter Road, Hong Kong
International Airport, Lantau Island, Hong Kong (more
information at www.haeco.com). The purpose of the
visit was to determine the suitability of HAECO to be
the recipient of a Honeywell inertial reference unit
that is the subject of export license application
D366543. The item (ECCN 7A103) is valued at USD
$78,000 and is controlled for missile technology
reasons (MT). The license applicant is General
Electric, acting through the Memphis Group of Memphis,
TN, a major supplier of used and surplus avionics
equipment (www.memphisgrp.com).


3. HAECO is a longstanding Hong Kong company providing
comprehensive aeronautical engineering services to
airlines/operators since 1950 and was the subject of a
favorable check referenced in reftel C. Related
company, Hong Kong Aero Engine Services Limited
(HAESL),was the subject of a separate favorable check
referenced in reftel D. Other related companies
provide additional aircraft overhaul and support
services in Hong Kong and mainland China.


4. On November 29, 2006, the ECO visited HAECO at the
address above and met with Simon Leung, Project
Manager. He stated that HAECO needed the item to
service Boeing aircraft operated by start-up airline
"Oasis Airlines" pursuant to HAECO's asset management
agreement with that company. The item will be held as
a spare for two Boeing 747-400 aircraft presently being
used by Oasis (Hong Kong registration numbers B-LFA, B-
LFB and MSN numbers 24063 and 24065). Oasis is
acquiring two additional aircraft (Hong Kong
registration numbers: B-LFC and B-LFD) for which HAECO
may need an additional inertial reference unit in the
future.


5. Leung stated that the item would be dedicated to
Oasis planes and would be well secured. Mr. Leung was
quite familiar with the controlled nature of the item
and the need to comply with U.S. and Hong Kong laws
applicable to the item.


6. At the time visited, HAECO appeared to be a
suitable recipient of the subject controlled item since
it cooperated fully with the PLC and provided
substantial information on HAECO's proposed use of the
item in Hong Kong. In addition, HAECO operates a line
a business that is consistent with the potential use of
the ordered item. The ECO recommends that this PLC be
classified as Favorable.

Cunningham