EXTRANCHECK: POST SHIPMENT VERIFICATION: EMS-

UNCLAS HONG KONG 004628 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: EMS- ITC C/O BAX HUB REF: A) USDOC 05848 B) HK 01748 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 post shipment verification (PSV) at EMS-ITC C/O BAX Global Logistics Center, 38 Wang Lee Street, Yuen Long Industrial Estate, Hong Kong (BAX Global). The items in question are parts for mobile phone assemblies valued at USD 41,200, classified under Export Control Classification Number (ECCN) 5A991 and controlled for anti-terrorism (AT) reasons. If properly classified, these items may be exported and reexported license-free to virtually all destinations worldwide (except to restricted end- users and end-uses and to designated terrorist sponsoring countries). The exporter is Skyworks Solutions Inc., of Calexico, California (Skyworks). ¶3. The ECO visited BAX Global at the address referenced above on November 28, 2006 and met with Ms. Freda Ho, Customer Service Officer and assistant to Mr. Jovi Liu, Operations Supervisor (Mr. Liu is the contact person on the applicable invoices and export documentation). Ms. Ho provided background on BAX Global and its business, which involves the provision of third party supply chain management services to a range of companies including Motorola, Flextronics, Cisco, Nike, Liz Clayborne (more information at www.baxworld.com). In particular, BAX Global provides such supply chain management services on behalf of two Motorola subcontractor production facilities in mainland China. According to Ms. Ho, ITC-EMS (the consignee on the exporters Shippers Export Declaration) stands for International Trading Center -- Electronics Manufacturing Services, which is a division of Motorola located in Singapore. In other words, the items were shipped to the Hong Kong logistics hub of a Motorola division. As described below, these items were destined for use by a Motorola contractor in mainland China. ¶4. Ms. Ho stated that the shipment in question was destined for Motorola subcontractor, Flextronics Manufacturing HK Ltd., for use at a Flextronics production facility in Doumen, mainland China (more information concerning Flextronics available at Flextronics.com). This information is consistent with background provided by Skyworks and forwarded to the ECO by OEA. Flextronics Manufacturing HK Ltd. was the subject of a prior PSV referenced in reftel B. ¶5. Ms. Ho provided documentation indicating that the shipment had been received by BAX Global on September 3, 2006 and shipped to Flextronics, C/O DHL Logistics (HK) Limited on September 5, 2006. While the documentation provided by Ms. Ho does not confirm onward shipment to mainland China, it does reflect that the items were shipped to Flextronics Manufacturing HK Ltd, c/o DHL Logistics (HK) Limited, in Hong Kong. ¶6. Ms. Ho volunteered that, from time to time, BAX Global's supply chain management work involves the forwarding of items on behalf of manufacturers for which Hong Kong import and export licenses must be obtained. She requested more information about BIS controls to better understand U.S. rules governing trade in controlled commodities. ¶7. At the time visited, BAX Global appeared to be a suitable recipient of the mobile phone assemblies (as supply chain logistics provider) since BAX Global cooperated with the PSV and provided all requested information concerning the final disposition of the items. At the same time, the ECO was not able to inspect the subject items as they had already been delivered to Flextronics. Consistent with guidance on reporting of PSVs where the items cannot be physically inspected, the ECO recommends that this PSV be classified as Limited. Cunningham