EXTRANCHECK: POST SHIPMENT VERIFICATION:

UNCLAS HONG KONG 001731

SIPDIS

USDOC FOR 532/OEA/MNICKSON-DORSEY/LLAUCIUS
USDOC FOR 3132 FOR FCS/OIO REGIONAL DIRECTOR
WILLIAM ZARIT
BICE FOR OFFICE OF STRATEGIC INVESTIGATIONS
SINGAPORE FOR FCS

SIPDIS

E.O. 12958: N/A
TAGS: BMGT BEXP ETRD ETTC HK
SUBJECT: EXTRANCHECK: POST SHIPMENT VERIFICATION:
SIMAL INTERNATIONAL PTE LTD.

REF: A) USDOC 04424

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),
Regional Export Control Officer Philip Ankel (ECO)
conducted a post shipment-verification at Simal
International Pte. Ltd., 16 Ayer Rajah Cresent No.
04-05 H, Tempco Technomin, Singapore (Simal). The
items in question were 48 integrated circuits
exported to Simal on or about March 2, 2007 and
valued at USD 7,632. On the applicable shippers
export declaration (SED),the items were
classified as 3A001 and are most likely controlled
for national security (NS) reasons. The exporter
was Etronica LLC of Huntington, New York.


3. According to the Singapore companies registry,
Simal has been in existence since 1989. Its paid-
up share capital is the Singapore equivalent of
USD 200,000. Singapore nationals, Mr. Surendran
S/O Supramaniam and Mr. Krishnamurthy Vaidyanathan
are listed as directors.


4. On June 22, 2007, the ECO met with Mr.
Surendran S/O Supramaniam, Director (Suren on his
business card) and Mr. Krishnamurthy Vaidyanathan,
Managing Director (Vaidy on his business card).
Mr. Supramaniam and Mr. Vaidyanathan stated that
the company had been in existence since 1992 and
is owned and run by the two of them. They stated
that they are primarily a "sourcing" company,
meaning that they receive inquiries for certain
items and attempt to source those items for their
customers. They stated that they typically work
with government entities in Singapore as the
payment risk is limited. Their business focuses
on CPUs and other computer products as well as
spot sales of various mechanical parts (valves,
hoses, etc.). Simal's customers are primarily
based on Singapore but Simal also sells to
Malaysia, Indonesia and India. Simal has seven
staff in Singapore as well as sales agents (who
operate on a commission basis) in India and
Indonesia.


5. As to the specific items in question,
documents provided by Simal indicate that the
customer was Bharat Electronics Limited. Mr.
Supramaniam stated that Bharat Electronics is in
the communications field and provides various
equipment to the Indian military. A visit to the
company's web site (www.bel-india.com) reveals
that Bharat Electronics was established in 1954 to
meet the electronics needs of the Indian defense
services.


6. When the discussion turned to Indian
government entities on BIS's Entity List, Mr.
Supramaniam and Mr. Vaidyanathan stressed that
they are well aware of this list and generally do
not do business with these entities. At the same
time, they keep the lines of communication open
given that some low level items may be sold to
some of these entities (without a license). Mr.
Supramaniam and Mr. Vaidyanathan went on to stress
that when they deal with customers in India, they
inform the supplier of the known end-user and
comply with whatever requirements the supplier
might have (whether end-user certificate or other
informational requirements). The ECO stressed
that Simal has an independent obligation to comply
with U.S. export control laws and cannot rely
solely on the U.S. suppliers to determine whether
a license is required or some other restriction
exists with respect to its customers. The ECO
further stressed that while some Entity List
companies may receive EAR99 items, end-use and
end-user controls remain on those and other
potential customers. Mr. Vaidyanathan stated that
he cannot know everything about all potential


customers to which the ECO responded that the BIS
website contains valuable know your customer and
similar guidance. Mr. Vaidyanathan and Mr.
Supramaniam both stressed that they are keen to
comply with U.S export control laws and they want
to avoid any issues that may jeopardize the
continued good standing of their business. They
further stressed that they have no business with
the state sponsors of terrorism countries (Iran,
Syria, Sudan, Cuba and North Korea).


7. At the time visited, Simal appeared to be a
suitable recipient of the commodities shipped (as
reseller) since Simal 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 Simal'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.

Cunningham