EXTRANCHECK: PRE-LICENSE CHECK: Vegetable

UNCLAS HONG KONG 000418

SIPDIS

USDOC FOR 532/OEA/LHINES/DFARROW
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: Vegetable
Marketing Organization
REF: A) USDOC 00750 B) EXP.LIC. D369973


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),accompanied by Commercial
Assistant, Sandy Lai, conducted a pre-license check
(PLC) at the Vegetable Marketing Organization
(VMO)757 Lai Chi Kok Road, Cheung Shawan, Kowloon,
Hong Kong. The purpose of the PLC was to determine
the suitability of VMO to be the recipient of virtual
private network software. The item (ECCN 5A002) is
valued at approximately USD $143,000 and is
controlled for national security (NS) reasons. The
license applicant is F5 Networks, Inc. of Seattle,
Washington.


3. The VMO is a self-financing, non-profit entity
originally set up to assist in the post-war
rehabilitation of local farming and to provide
facilities for marketing of vegetables. Presently,
the VMO operates a wholesale vegetable market at the
address referenced above. While the VMO is
independent from the Hong Kong government, its
director is the Director of the Hong Kong Department
of Agriculture, Fisheries and Conservation.


4. On February 9, 2006, the ECO and Commercial
Assistant visited VMO at the address above and met
with Mr. Ka Kit Au, Market Manager (Development). Mr.
Au described the wholesale market business of VMO,
where the software will be used. In particular, the
VMO's wholesale market acts as broker in nearly 50%
of all wholesale vegetable trades in Hong Kong and
clears 50,000-60,000 transactions per day. The
facility itself is located in one square block. The
information Mr. u provided is consistent with the
information onthe VMO web site: www.vmo.org. Other
backgroundinformation may be found at this web site
as wel.


5. Mr. Au stated that VMO would like to purchse the
VPU software so that it can join three neworks that
presently exist both within the facilty itself and
at one location nearby. Mr. Au stated that a tender
process for this item and related items is presently
under way and VMO has not yet chosen a final vendor.


6. VMO was very forthcoming during the PLC visit.
Mr. Lee provided information on the underlying
transaction and VMO's intent to use the item for its
operations in Hong Kong. The ECO recommends that
this PLC be considered Favorable.
Cunningham