EXTRANCHECK: POST SHIPMENT VERIFICATION:

UNCLAS HONG KONG 001664 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: ERQIANG TECHNOLOGY (H.K.) REF: A) USDOC 06595 B) USDOC 03921 C) HK 00038 D) D368037 E) HK 00082 1.Unauthorized disclosure of the information provided below is prohibited by Section 12C of the Export Administration Act. ¶2. As per reftel B 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 of a shipment bound for Erqiang Technology (H.K.) (Erqiang),Flat 1105, Block B, Ching Lai Court 264 Lai King Hill Road, Kowloon, Hong Kong. The item in question is five ring polyphenyl ether, classified under Export Control Classification Number (ECCN) 1C006 and controlled for national security (NS) reasons. The item was shipped pursuant to Commerce Department license D368037. The exporter was Arch Technology Holding LLC of St. Charles, Missouri. ¶3. Erqiang and this particular shipment was the subject of a pre-license check referenced in reftel C. In reftel C, the ECO provided a detailed corporate description of the proposed end-user and that company's relationship with Erqiang. In particular, the ECO noted that the end-user, Photon Technology Co. Ltd., was the parent company of Erqiang and had recently merged with Neophotonics, Inc. of California. The ECO's recommendation for that pre-license check was Favorable. ¶4. Commercial Assistant Florence Tam attempted, on several occasions, to set up an appointment with Erqiang. It emerged from several phone calls with Ms. Hoi Ping Chu, previous representative of Erqiang, that Erqiang is apparently no longer operational (although the Hong Kong companies registry lists that company as "active"). Mr. Chu stated to Commercial Assistant Tam that, as a result of the merger between Photon Technology Co. Ltd. and Neophotonics, Inc., Erqiang no longer acts as logistics provider for Photon Technology Co. Ltd. ¶5. Ms. Chu declined ECO's requests to meet and discuss the transaction that is the subject of this PSV. Ms. Chu stated that she is running her new business from her home and did not wish to meet the ECO there. Nonetheless, she agreed to assist in obtaining information about the shipment of the items in question. By fax, Ms. Chu provided documentation tracing the shipment from the U.S. exporter to Erqiang (while it was still operational) to Photon Technology's appointed Hong Kong courier, Eternal Asia (HK) Ltd. Eternal Asia was the subject of an unfavorable PSV referenced in reftel E. Ms. Chu provided a further delivery confirmation from Photon Technology indicating that the item had been received by that company on January 29, 2007. ¶6. Given that it is purportedly no longer in operation, Erqiang does not appear to be a suitable recipient of controlled U.S. origin items. Nonetheless, the information and documentation provided by the former staff person from Erqiang suggests that the item in question reached its intended destination. In light of the fact that the ECO could not inspect the item (as it was apparently already in mainland China) the ECO recommends that this PSV be classified as Limited.