EXTRANCHECK: POST SHIPMENT VERIFICATION:

UNCLAS HONG KONG 001653 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: KEYENCE (HK) ELECTRONICS HONG KONG REF: A) USDOC 02961 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 at Keyence (HK) Electronics Hong Kong, Suite 713, Prudential Tower, 21 Canton Road, Tsimshatsui, Kowloon, Hong Kong (Keyence). The item in question is a Genesis XM2 Imaging System exported to Keyence on or about February 22, 2007 and valued at USD 45,084. On the applicable shippers export declaration (SED), the item is classified as 3A999. Items properly classified as 3A999 may be exported/reexported to virtually all destinations and end-users worldwide, license free, except for certain designated state sponsors of terrorism (including North Korea). The exporter was Edax, Inc. of Mahwah, New Jersey. ¶3. According to the Hong Kong Companies Registry, Keyence has been in existence since 2001. Its paid-up share capital is the Hong Kong equivalent of USD 600,000. Japanese nationals, Michio Sasaki and Nobuaki Sugahara are listed as directors. Keyence is the Hong Kong affiliate office of Keyence Corporation, a Japanese listed company based in Osaka. The company produces and distributes microscopes, sensors and other instruments used in industrial automation applications (more information at www.keyence.com). ¶4. On June 14, 2007, the ECO met with Mr. Sugahara, Director, and Ms. Christine Kee, assistant at the address referenced above. ECO and FCS commercial assistants had been attempting to schedule a meeting with Mr. Sugahara for some time. Mr. Sugahara apologized for the delay, explaining that he is often in mainland China on business. Mr. Sugahara provided background information on Keyence (consistent with content on the company's web site). He stated that Keyence customers in China are typically producers of integrated circuits, electronics components and automotive products. ¶5. As to the specific item in question, Mr. Sugahara provided copies of a delivery note indicating that the item had been delivered to Ushio Hong Kong Limited. Mr. Sugahara stated that this company is also a Japanese listed company involved in production of light sources (www.ushio.com and www.ushio.com.jp). Mr. Sugahara stated that the item would be used in the Hong Kong production facility of Ushio. ¶6. At the time visited, Keyence appeared to be a suitable recipient of the commodities shipped (as reseller) since Keyence 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 Keyence's customer. Consistent with guidance on reporting of PSVs where the items cannot be physically inspected, the ECO recommends that this PSV be classified as Limited.