EXTRANCHECK: POST SHIPMENT VERIFICATION:

UNCLAS HONG KONG 000808

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: POST SHIPMENT VERIFICATION:
ADVANCE TECH INTERNATIONAL

REF: A) USDOC 00993

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 post shipment
verification (PSV) at Advance Tech International Ltd.
(Advance Tech),16/F, 200 Gloucester Rd., Wanchai,
Hong Kong. The items in question are 21 monolithic
integrated circuits valued at USD 4,410. The export
control classification number (ECCN) for these items
is listed on the applicable DHL Air Waybill for the
shipment as 3A001.b2b. Items properly classified as
3A001.b2b generally do not require a license for
export to Hong Kong but may require a license for
export/reexport to mainland China. The exporter is
TLC Precision Wafer Technology of Minneapolis,
Minnesota (TLC).


3. According to the Hong Kong Companies Registry,
Advance Tech has been in existence since 1992.
According to the Companies Registry, Fullmark
(Corporate Services) Nominees Limited is the sole
director of the company. The CompanyQs authorized
and paid-up capital is the equivalent of
approximately USD 1,200. Rixomax (HK) Limited is
collocated at the same address and shares the same
director. According to that companyQs web site
(www.ricomax.com),Ricomax is a global product
trading company specialized in the trade of various
consumer goods. A Hong Kong Trade Development
Council profile on both companies lists Mr. Miron
Yakuel as director in both companies.


4. The ECO, accompanied by Commercial Assistant
Sandy Lai, visited Advance Tech at the address
referenced above on February 16, 2007 and met with
Michael Cheung and Jose Lam. Messrs Cheung and Lam
provided background on Advance Tech and its business
and the proposed end-use of the items. They stated
that their manager had hoped to meet but was out
sick. They stated that Advance Tech is involved in
data communications R&D projects including work on
wireless modems. Advance Tech has 8-10 employees in
Hong Kong, primarily working on accounting and
procurement related matters. They stated that there
is no relationship between the activities of Ricomax
and Advance Tech except that they share office spaceand an internet domain (their business cards use te
Qricomax.comQ domain). By follow-up e-mail, M.Cheung clarified that Anat Yakuel is the Qmajo
shareholderQ of both Ricomax and Advance Tech.

5. When asked about the proposed use of the item,
Mr. Cheung provide the ECO a document entiled QLast
MileQ. That document (without any corporate
identification or logo of any kind) states that the
Qgoal of this start-up is to provide a fixed wireless
V&VoIP (voice and video over IP) connectivity from
rural towns to dense populated metropolitan areas.
Mr. Cheung stated that Advance Tech is in the R&D
phase of this project and uses one engineer stationed
in Mainland China as well as freelance engineers in
mainland China to complete the R&D on an Qas-needed
basis. It has no production or other operation in
mainland China although one Advance Tech engineer is
based in the mainland. Advance TechQs practice is to
hand carry components to the mainland to provide to
the engineers for their R&D work. If the R&D project
is successful, the company intends to sell the
project to investors. Mr. Cheung stated that Advance
Tech is only working on this project for now.
Previously, the company worked on another R&D project
that failed and was discontinued. As to this
project, they are still ordering components for the
project in order to finalize it.


6. Mr. Cheung showed the ECO what appeared to be the
circuits (there were 50 in total) in a small box. In
addition, Mr. Cheung subsequently provided the ECO
(by e-mail attachment),two DHL Air Waybills (No. 759
8065 812 and 7598065801 dated August 11, 2006 and


September 8, 2006 respectively). By that same e-
mail, he also provided a copy of an invoice from TLC
indicating that a total of 50 of the items had been
sold to Advance Tech. It appears this PSV was
requested only on the September 8, 2006 shipment.


7. The QLast MileQ document provided by Advance Tech
lists the most important components for the project.
Those components include the items that are subject
of this check. They also include 50 Agilent HMMC-3040
mixers, 100 Triqunit TGA-1073A pre-amplifiers, 100
Triqunit TGA-1141 amplifiers, 50 Alpha ATN 3580-20
attenuators, 100 Hittete HMC329 mixers, 100 UMS CHA-
2098b amplifiers and 50 UMS CHA-2095a amplifiers.
All of these items, except the UMS items, are listed
as being supplied from the United States. Mr. Cheung
stated that Advance Tech had already received
virtually all of the items in question. The ECO
recommends that commodity classifications of these
items be obtained to ascertain whether licenses were
required to export these items to Advance Tech. A
TriQunit data sheet on the TGA 1141 states that one
of the primary applications of this item is use in
military radar systems.


8. The ECO provided Messrs Cheung and Lam with
information about U.S. export controls and further
recommended that the company research further whether
Hong Kong export control laws may be implicated by
the import and export of these items (the ECO
believes they likely are). The ECO stressed that it
is important that the company understand U.S. export
control requirements and provided contact information
both in Hong Kong and at BIS headquarters where such
information could be obtained. It did not appear
that the company was aware of U.S. export control
requirements prior to the ECOQs visit.


9. While Advance Tech cooperated with the PSV and
provided the requested information concerning the
final disposition of the items, based on the totality
of the facts referenced above, the ECO recommends
that this PSV be classified as Unfavorable.
Cunningham