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