EXTRANCHECK: POST-SHIPMENT VERIFICATION: SHOGHI

UNCLAS NEW DELHI 003656

SIPDIS

SIPDIS

USDOC FOR 532/OEA/M. NICKSON-D/KGAINES/JAY HATFIELD
USDOC FOR 3131/USFCS/OIO/ANESA/KREISSL
USDOC FOR 4530/MAC/ANESA/OSA
ICE HQ FOR STRATEGIC INVESTIGATIONS
STATE FOR EB/ESP

E.O. 12958: N/A
TAGS: ETTC ETRD BEXP IN
SUBJECT: EXTRANCHECK: POST-SHIPMENT VERIFICATION: SHOGHI
COMMUNICATION LTD., NEW DELHI

REF: USDOC 05829


1. Unauthorized disclosure of the information provided below is
prohibited by Section 12(c) of the Export Administration Act.


2. Export Control Officer (ECO) Paul Cushman and BIS FSN Prem
Narayan conducted a Post-shipment Verification (PSV) at Shoghi
Communication Ltd. (SCL),New Delhi, on July 26, 2007.


3. BIS requested a PSV at SCL, a private sector company. SCL is
located at: 707, Ansal Bhavan, 16 Kasturba Gandhi Marg, New Delhi
110001, Tel: 91-11-2335-1302, Fax: 91-11-2335-1303, email:
shoghi@nde.vsnl.net.in. Website: www.shoghi.co.in. SCL was listed
as the Ultimate Consignee for 10 DC-DC converter modules. The
exporter was Interpoint Corp. (Interpoint),Redmond, WA. Export
License Number: No License Required (NLR),EAR99.


4. ECO and FSN Narayan met with Anant Bindal (Bindal),Director of
Marketing, SCL.


5. Bindal stated that they regularly deal with U.S. State Department
export licenses and that he was aware of certain BIS regulations.
Bindal stated this was the first visit to SCL by any USG officials.
He stated that SCL purchased converters for Instruments Research &
Development Establishment (IRDE),a Defence Research & Development
Organization (DRDO) laboratory within the Ministry of Defence. He
was very cooperative and forthcoming, providing copies of the SCL
Purchase Order to Interpoint, Interpoint Invoice to SCL, Interpoint
Packing List, IRDE Supply Order to SCL, IRDE Customs Duty Exemption
Certificate authorizing SCL to import the converters duty-free, and
IRDE End-User Certificate.


6. Bindal displayed all 10 converters on the conference table for
ECO and Narayan to inspect. Bindal stated SCL imported the
converters for IRDE. IRDE required these converters for carrying
out research work in the field of electro-optical instrumentation.
IRDE, one of 51 laboratories operating under DRDO, is involved in
the design and development of optical instruments and related
research activities for defense application. IRDE cancelled the
order due to SCL's inability to deliver the converters by the
scheduled delivery date.


7. ECO asked if SCL planned to find another buyer or return the
converters to Interpoint. Bindal explained that these were
custom-made converters per IRDE specifications. So, it is highly
unlikely they could find an interested customer. Furthermore,
because they were custom-made, Interpoint refused to take them back.
ECO and Narayan verified the serial numbers of all ten converters.



8. Bindal explained that SCL supplies encryption products and
technology to GOI agencies, primarily military and paramilitary
forces. These products are often customized with the integration of
imported components. Bindal stated that since they supply products
to defense agencies, SCL is monitored and regularly audited by the
Indian Department of Defence Research and Development (DDRD). DDRD
and the Director General of Foreign Trade (DGFT) clear all of SCL's
export orders. Bindal asserted that SCL exercises proper due
diligence and complies with all required procedures in order to
ensure compliance with Indian export control laws. He stated that
SCL is not allowed to export to countries such as North Korea, Cuba,
Sudan, and Iran.


9. Established in 1996, SCL is an engineering and systems
integration company. SCL delivers solutions in the fields of
strategic electronics, encryption technologies (including
code-breaking technology),analysis and surveillance. SCL's product
range includes communication security, communication jamming,
communication intelligence, signals intelligence, systems
engineering, research & development, and software development. Of
their total production, 70 percent is supplied to GOI agencies. The
remaining 30 percent is exported to foreign governments with DDRD
and DGFT oversight. Foreign customers include Malaysia,
Philippines, Indonesia, South Africa, and a few European and Latin
American countries. SCL regularly imports products from the United
States and a few European countries. SCL employs 280 personnel, all
of whom benefit from a profit-sharing plan. SCL is privately owned
and its original founders remain in control of the company. In FY
2006, SCL's sales turnover exceeded 50 million USD.


10. Recommendation: Post recommends Shoghi Communications Ltd. as a
reliable recipient of the U.S. origin commodities for this
transaction.
WHITE