EXTRANCHECK: PRE LICENSE CHECK: HS

UNCLAS HONG KONG 001746 SIPDIS USDOC FOR 532/OEA/MHAMES/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: PRE LICENSE CHECK: HS INSPECTION PTE LTD. REF: A) USDOC 05665 B) D377090 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 pre-license check (PLC) at HS Inspection Pte Ltd, BLK 3021, UBI Avenue 2, No 02- 161, Singapore (HS Inspection). The item in question is a thermacam PM 390 thermal imaging system valued at USD 15,000. The item is classified under Export Control Classification Number (ECCN) 6A003 and controlled for national security (NS) and nuclear nonproliferation (NP) reasons. The license applicant is FLIR Systems, Inc. of Wilsonville Oregon. FLIR is requesting authorization to accept the camera from HS Inspection, repair it and return it to HS Inspection. Since the camera was apparently transferred to HS Inspection in violation of the export license that authorized its export to HS Inspection's seller, FLIR is requesting permission to complete certain repairs on behalf of HS Inspection. ¶3. According to the Singapore companies registry, HS Inspection has been in existence since 1994. Its paid-up share capital is the Singapore equivalent of USD 65,000. Singapore nationals, Peter Lim Wee Lee, Peng Wai Ng and Chng Young Huee Mdm are listed as directors. The company registry lists Ng and Mdm each as 50 percent shareholders. ¶4. On June 21, 2007, the ECO, accompanied by Singapore Customs representative Kevin Boo, met with Peng Wai Ng (Terence),Senior NDT Specialist. Mr. Ng provided a short overview of HS Inspection, which is a Singapore-based non-destructive testing company. The company conducts a range of nondestructive testing using infrared and ultrasound equipment and partial discharge testing methods. Mr. Ng stated that he is one of the founders of the company, which has been in existence since 1994 (consistent with information in the companies registry). The meeting was held in a small workshop, which is also the company's headquarters. Mr. Ng provided a longer description of the company's history and present activities and showed the ECO the equipment HS Inspection uses in its testing work. Mr. Ng stated he was surprised that the ECO was coming to conduct a check on this particular item as he felt it is a quite old and outdated item and he recently received a much more up to date system (also pursuant to license) from the United States. ¶5. As to the specific item in question, Mr. Ng. stated that he will use the item for petrochemical furnace inspection. He stated that while the item is old, its testing range is quite suitable for petrochemical furnace inspection. He is also in need of an additional camera since his business is growing and he presently has only one camera. ¶6. Mr. Ng stated that he purchased the item from a company in Indonesia (PT Hotspot Inspectindo Utama),which previously performed some testing services in Indonesia and was also an affiliate of a FLIR distributor (PT Tirta Saki). Mr. Ng stated that since PT Hotspot Inspectindo Utama was doing poorly, it had elected to sell HS Inspection the unit at a good price (USD 12,000). Ng claims to have obtained the camera in a cash transaction and has no documentation in relation to the sale. The ECO explained that the transfer to Mr. Ng was likely completed in violation of the export administration regulations (EAR) and that the camera remained subject to the restrictions of the EAR. The ECO also provided Mr. Ng with additional information about reexport controls. Mr. Ng stated he understood that EAR requirements would apply and that he would review the reexport materials. ¶7. At the time visited, HS Inspection appeared to be a suitable recipient of the item in question since HS Inspection operates a line of business that is consistent with the item's potential use and understands its responsibilities under the EAR. The ECO recommends that this PLC be classified as Favorable. Cunningham