Identifier
Created
Classification
Origin
07HONGKONG38
2007-01-05 07:14:00
UNCLASSIFIED
Consulate Hong Kong
Cable title:  

EXTRANCHECK: POST SHIPMENT VERIFICATION:

Tags:  BMGT BEXP HK ETRD ETTC 
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VZCZCXYZ0008
RR RUEHWEB

DE RUEHHK #0038/01 0050714
ZNR UUUUU ZZH
R 050714Z JAN 07
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 0013
RHMFIUU/HQ BICE WASHINGTON DC
UNCLAS HONG KONG 000038 

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
UNCLAS HONG KONG 000038

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

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) and Commercial Assistant
Sandy Lai conducted a pre-license check (PLC) at
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. If properly classified, this
item would most likely not require a license for export
to Hong Kong but would require a license to mainland
China. The exporter is Arch Technology Holding LLC of
St. Charles, Missouri.


3. The ECO and Commercial Assistant visited Erqiang at
the address referenced above on December 18, 2006 and
met with Ms. Hoi Ping Chu, representative of Erqiang
responsible for this shipment. Erqiang's office is
located in a small flat in a residential building. Ms.
Chu was open and forthcoming during the interview. She
provided background on Erqiang and its business, which
involves the provision of logistics and freight
forwarding services on behalf of mainland Chinese
company, Photon Technology Co., Ltd. (Photon Shenzhen),
the foreign purchaser noted in Reftel A. Ms. Chu
stated that Photon Shenzhen is the parent company of
Erqiang although Erqiang is not Photon Shenzhen's sole
logistics provider. During the meeting, the ECO
noticed several boxes marked "Photon" in the Erqiang
office. Ms. Chu stated that shipments for Photon
Shenzhen are sent to her (modest) office and she
arranges for their further shipment to Shenzhen.


4. According to the Hong Kong companies registry,
Erqiang has been in existence since October 2000. Its
directors are Yi Shun Eunice Yeung and Er Qiang Zhao.

According to the Hong Kong companies registry, Erqiang
is collocated with another company, Photon Technology
Company Limited, established in 2003. Ms. Chu is a
director of that company as is Ms. Sau Yuen Yeung who
was present during the meeting with Ms. Chu. By
subsequent phone call, Ms. Chu clarified that Photon
Technology Company Limited is a sales office for Photon
Shenzhen and operates separately from Erqiang. Ms. Chu
claimed not to know anything about another apparently
related company, Neophotonics Corporation Limited,
established in August 2004 but located in downtown Hong
Kong.


5. A review of the Photon web site
(www.photontec.com.cn) suggests the following likely
relationship between the various companies.
Neophotonics, Inc. of San Jose California
(www.neophotonics.com) is the parent of Photon
Shenzhen. Neophotonics and Photon Technology Co., Ltd.
merged in 2005. Photon Shenzhen is the likely parent
of Erqiang and Photon Technology Company Limited (the
Hong Kong entity). Neophotonics Corporation Limited is
likely the Hong Kong affiliate of Neophotonics, Inc. of
San Jose.


6. With respect to the item that is the subject of the
PLC, Ms. Chu provided an "End User Application
Statement" signed by Zie Zhang, Supplier Management
Engineer for Photon Shenzhen (also identified in this
document as Neophotonics (China) Corp.). In that
statement, Mr. Zhang confirms that all products of Arch
Technology Holding LLC (the license applicant) will be
used only in the manufacturing of modules and
components for telecommunications applications. Ms.
Chu stated that she was unaware of Photon Shenzhen's
customers.


7. Almost at the outset of the meeting, Ms. Chu asked
the ECO whether this transaction would require a Hong
Kong import and export license. The ECO stated that he
was not expert in Hong Kong export control regulations


and Ms. Chu would likely obtain a definitive answer on
the subject from the Trade and Industry Department of
the Hong Kong Government (TID). The ECO did, however,
note that this particular item was likely on TID's list
of items subject to control and that therefore a TID
license might well be required. Ms. Chu seemed
disappointed at the prospect of requesting a TID
license, stating that she had had problems applying for
a TID license some years ago in relation to the import
of some products manufactured by Phillips. She stated
that she had not applied for any TID licenses since
then.


8. At the time visited, ERQIANG appeared to be a
suitable recipient of the controlled items (as
logistics provider to Photon Shenzhen) since it
cooperated with the PLC and has a line of business
consistent with its role in the transaction. The ECO
recommends that this PSV be classified as Favorable.

Sakaue