EXTRANCHECK: POST SHIPMENT VERIFICATION: S & T

UNCLAS HONG KONG 004794

SIPDIS

USDOC FOR 532/OEA/LHINES/DFARROW
USDOC FOR 3132 FOR FCS/OIO REGIONAL DIRECTOR WILLIAM
ZARIT
BICE FOR OFFICE OF STRATEGIC INVESTIGATIONS

BEIJING FOR FCS JEANETTE CHU

SIPDIS

E.O. 12958: N/A
TAGS: BMGT BEXP HK ETRD ETTC
SUBJECT: EXTRANCHECK: POST SHIPMENT VERIFICATION: S & T
Industrial (Hong Kong)

REF: A) USDOC 02862

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) and Commercial Assistant
Sandy Lai conducted a post shipment verification (PSV)
at S&T Industrial (Hong Kong) Company Limited (S&T),
Tonic Industrial Center, 19 Lam Hing Street, 5th Floor,
Hong Kong. The items in question are 160,000
integrated circuits valued at USD 33,600, classified
under Export Control Classification Number (ECCN) 7A994
and most likely controlled for anti-terrorism (AT)
reasons. If properly classified, these items would most
likely not require a license for export to Hong Kong
and mainland China. The exporter is TLSI Inc. of
Huntington, New York (www.tlsi.com).


3. The ECO and commercial assistant visited S&T at the
address referenced above on December 12, 2006 and met
with Ms. Oi Ling Leung. Ms. Leung provided background
on S&G and its business, which involves the provision
of a logistics services on behalf of its parent
company, Skardin Industrial Corporation, of Taipei,
Taiwan (Skardin Taiwan) and Skardin Taiwan's China
operations (more information on Skardin at
www.Skardin.com.tw). The offices of S&T are relatively
modest in size (three small offices with a larger room
dedicated to boxes of various shipments). Transactional
documents provided by OEA indicate that the UK
affiliate of Skardin Taiwan was the purchaser of the
applicable items while shipment was made to S&T.


4. According to the Hong Kong Companies Registry, S&T
has been in existence since 2001 and the corporate
registered address is the same as the address at which
the check occurred. Unlike many other companies the
ECO has encountered, S&T has relatively significant
paid in capital of HKD 4,000,000 (approximately USD
520,000).


5. Ms. Leung stated that with respect to the shipment
in question, S&T accepted the shipment of the 160,000
integrated circuits and, in turn, forwarded those
circuits among the various Skardin Taiwan production
facilities in mainland China. Ms. Leung provided the
ECO with the relevant shipping documents in respect of
those shipments into the mainland. Ms. Leung stated
that the items are used in the production of
residential satellite receivers for sale primarily in
European Union countries (such satellite receivers are
referenced in the Skardin website).


6. At the time visited, S&T appeared to be a suitable
recipient of the controlled items (as logistics
provider) since it cooperated with the check and
operates a business that is consistent with its role in
the manufacturing process. Consistent with BIS guidance
on the classification of checks where the ECO is unable
to visually inspect the items, the ECO recommends that
this PSV be classified as Limited.

Cunningham