EXTRANCHECK: PRE-LICENSE CHECK: PUBLIC SECURITY FORCES

UNCLAS HONG KONG 002481 SIPDIS USDOC FOR 532/OEA/LHINES/JSONDERMAN 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: PRE-LICENSE CHECK: PUBLIC SECURITY FORCES AFFAIRS BUREAU REF: A) USDOC 08156 B) EXP.LIC. 382586 C) HK 04112 ¶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 pre-license check (PLC) at the Macau Public Security Forces Affairs Bureau, Calcada Dos Quarteis, Macau (Macau Public Security). The PLC concerned 170 items of Juniper Networks hardware and software used in firewall, VPN, gateway, anti-spam and anti-hacking applications. The total value of the proposed licensed transactions is USD 3.8 million. The transactions are the subject of license application D382586. The items are classified under ECCN 5A002 and are controlled for national security reasons (NS). ¶3. On September 18, 2007 the ECO visited Macau Public Security at the address above and met with several representatives of Macau Public Security including Acting Director Sam Peng Chan, and Ms. Elaine Ngan, Senior Technician of the Information Accessories Division. Mr. Sky Ho of Netcraft Information Technology (Macau) Co., Ltd., the reseller in Macau, also attended the meeting. (www.netcraft.com.mo) (Netcraft). ¶4. Ms. Ngan stated that Macau Public Security had ordered only two Juniper items, namely, one Juniper SSG140 Firewall and one SSG520 Firewall. She stated that one item would be used at Macau Public Security headquarters to enhance Macau Public Security's internal security infrastructure. A second unit would be installed at Macau Public Security's disaster recovery site (currently located at the former headquarters of the Macau Fire Services). Ms. Ngan provided a copy of the purchase order for the items that had been placed with Netcraft. She and Mr. Chan confirmed that Macau Public Security has not ordered additional Juniper items. Ms. Ngan stated that Macau Public Security currently has older versions of these products but needs better ones. ¶5. Mr. Ho stated that Netcraft is providing only these two items (referenced above) to Macau Public Security and has no other open orders with Macau Public Security. Netcraft is obtaining the items from Cyberworld in Hong Kong. Mr. Ho stated that Netcraft is purchasing the items from Cyberworld in this instance rather than Juniper directly for what he characterized as business reasons. Netcraft operates in Macau as well as mainland China but not in Hong Kong. ¶6. At the time visited, Macau Public Security appeared to be a suitable recipient of the subject controlled items since it cooperated with the PSV and its activities are consistent with the use of the two items ordered. However, in light of the significant disparity between the number of items for which a license is requested in license application D382586 and the number apparently ordered by Macau Public Security, the ECO recommends that this PLC be considered Not Conclusive and that a further PLC be considered at Cyberworld. Cunningham