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