EXTRANCHECK: POST SHIPMENT VERIFICATION:

UNCLAS HONG KONG 000151

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:
GIATEK CORPORATION LIMITED

REF: A) USDOC 06881

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),accompanied by Commercial
Assistant Sandy Lai, conducted a post shipment
verification (PSV) at Giatek Coporation Limited
(Giatek),Unit A, 9th Floor, Roxy Industrial Center,
58-66 Tai Lin Pai Road, Kwai Chung, Hong Kong. The
items in question are monolithic analogic integrated
circuits exported to Giatek on or about September 1,
2006 and valued at USD 8,600. While the export
documentation for these items does not include an
Export Control Classification Number (ECCN),related
documentation provide by OEA (invoice) suggests that
these items are likely classified as EAR99. Items
properly classified as EAR99 may be exported/reexported
to virtually all destinations and end-users worldwide,
license free. The exporter was Texas Instruments, Inc.
of Dallas Texas.


3. The ECO and Commercial Assistant visited Giatek at
the address referenced above on January 8, 2007 and met
with Terence Lee, Division Manager and Ms. Margo Tsang,
HR and Administration Manager as well as export
compliance manager. Mr. Lee provided background on
Giatek and its parent company, Yosun Group. Yosun is a
Taiwan listed company with close to 1,000 worldwide
employees (600 in Hong Kong and mainland China).
Giatek provides consulting and related equipment sales
to mainland electronics manufacturing facilities. The
equipment sales are the logical outgrowth of the
consulting business, which involves consulting on the
best inputs for certain types of electronics
manufacturing. In particular, Giatek provides advice
on appropriate inputs and then procures them on behalf
of its clients. More information on Yosun and Giatek
may be found at www.yosungroup.com.


4. With respect to the shipment that was the subject
of the PSV, Mr. Lee provided the applicable
documentation reflecting that the items had been
received by Giatek and subsequently resold to
purchasers in Hong Kong.


5. Mr. Lee and Ms. Tsang also stated that Giatek
complies with both U.S. and Hong Kong export licensing
rules. Ms. Tsang provided an English language copy of
Giatek's "Export Control Management System". That
document is most unusual in this ECO's experience in
that it incorporates many of the "best practices"
associated with corporate internal compliance programs
including lines of authority over export compliance
matters, screening procedures for order taking that
include checks against problematic end-uses and end-
users as well as screening against BIS's denied parties
lists. The document also calls for ongoing training
for employees in export compliance matters. While the
document is not perfect, it reflects a remarkable
understanding of U.S. and Hong Kong export control
rules by a Hong Kong company.


6. At the time visited, Giatek appeared to be a
suitable recipient of the commodities shipped since
Giatek cooperated with the PSV and provided all
requested information concerning the final disposition
of the applicable items. At the same time, the ECO was
not able to inspect the subject items as they had
already been delivered to Giatek's customers.
Consistent with guidance on reporting of PSVs where the
items cannot be physically inspected, the ECO
recommends that this PSV be classified as Limited.