EXTRANCHECK: POST SHIPMENT VERIFICATION:

UNCLAS HONG KONG 004795

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:
ADVANCED ENERGY-SHENZHEN C/O BALTRANS LOGISTRIC

REF: A) USDOC 05352

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 Advanced Energy-Shenzhen
(Advanced Energy) C/O Baltrans Logistic (Baltrans),59
Tai Yip Street, Kowloon, Hong Kong. The items in
question are power hybrid circuits valued at USD
84,000, classified under Export Control Classification
Number (ECCN) 9A004 and controlled for national
security (NS) reasons. If properly classified, these
items would most likely require a license for export to
Hong Kong and mainland China. The exporter is
International Rectifier of Leominster, Massachusetts
(International Rectifier). Records provided by OEA
indicate that no license was obtained for this
shipment. More information about Advanced Energy is
available at www.advanced-energy.com and more
information about International Rectifier is available
at www.irf.com.


3. The ECO visited Baltrans at the address referenced
above on December 7, 2006 and met with Mr. Theodore
Shum, Assistant Manager, Airfreight Operations, Import
and Mr. Gordon Lam, Operations Manager, Airfreight,
Import. Mr. Lam provided background on Baltrans and
its business, which involves the provision of a range
of logistics and freight forwarding services. Baltrans
is an internationally known freight forwarding and
logistics company (www.baltrans.com).


4. Mr. Lam stated that with respect to the shipment in
question, Baltrans acted merely as the warehouse for
Advanced Energy. In particular, Federal Express was
responsible for the export of the item from the United
States as well as all import formalities into Hong
Kong. Federal Express delivered the items to Baltrans
who, in turn, informed Advanced Energy of the arrival
of the items. Advanced Energy, in turn, sent a truck
to pick up the items for onward shipment to mainland
China. According to Mr. Lam, Advanced Energy was
responsible for all export related formalities from
Hong Kong. In fact, Mr. Lam stated that Baltrans does
not perform export licensing services on behalf of its
customers (Note: some freight forwarders in the United
States complete such formalities on behalf of
customers).


5. Mr. Lam claimed that Advanced Energy is no longer a
customer of Baltrans and switched logistics providers
approximately three months prior to the PSV. He
further stated that he is unaware of Advanced Energy's
current logistics provider. He indicated that because
the shipment had occurred some time ago, he was unable
to access the applicable shipping documents. He
averred that the documents had already been sent to
storage and so would be too difficult to provide to the
ECO.


6. When asked by the ECO why the shipment had taken
the route that it had (through Hong Kong to Shenzhen),
Mr. Lam indicated that he had put the same question to
Advanced Energy since Baltrans has an office in
Shenzhen. According to Mr. Lam, Advanced Energy
declined to answer Mr. Lam's question.


7. As stated above, if properly classified, these
items would require a license for export to either Hong
Kong or mainland China. The ECO recommends that BIS
reach out to the exporter to determine why it did not
obtain a license for this shipment and, further, why it
listed Hong Kong as the country of ultimate destination
when it is clear from the applicable documentation
provided by OEA that the shipment was destined for
mainland China.


8. At the time visited, Advanced Energy did not appear
to be a suitable recipient of controlled items since
Advanced Energy does not have a manufacturing or other
facility in Hong Kong at which such items might be put
to use. The ECO recommends that this PSV of Advanced


Energy be classified as Unfavorable.

Cunningham