EXTRANCHECK: POST-SHIPMENT VERIFICATION: HINDUSTAN

UNCLAS NEW DELHI 005346

SIPDIS

SIPDIS

USDOC FOR 532/OEA/M. NICKSON-D/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: HINDUSTAN
AERONAUTICS LTD., FOUNDRY & FORGE DIVISION, BANGALORE, LICENSE
NUMBER D328220

REF: USDOC 09450


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


2. On November 26, 2007, Export Control Officer (ECO) Paul Cushman
and BIS FSN Prem Narayan conducted a Post-shipment Verification
(PSV) at Hindustan Aeronautics Ltd. (HAL),Foundry & Forge Division
(F&FD),Bangalore.


3. BIS requested a PSV at HAL F&FD, an entity under the Ministry of
Defence (MOD),GOI. HAL F&FD was listed as the ultimate consignee
for a titanium alloy (Ti-6Al-4V) controlled under ECCN 1C202. The
license applicant was ALLVAC, Inc. (ALLVAC),Monroe, North
Carolina.


4. ECO and FSN Narayan met with V. Swaminathan (Swaminathan),Chief
Manager, Integrated Materials Manager (IMM) and Mr. Fernandez,
Senior Manager, HAL. Randhir Jaiswal (Jaiswal),Deputy Secretary
(AMS),Ministry of External Affairs (MEA),facilitated the meeting.
Jaiswal was also present at the meeting.


5. In June 2006, BIS New Delhi conducted a favorable PLC for a
different BIS export license (D355880) at the HAL Foundry & Forge
Division. HAL officials stated that they regularly source titanium
alloy from ALLVAC. HAL officials provided documentation for
multiple transactions, which exhausted the subject license. They
also stated that the manufacturer is never able to supply the exact
quantity ordered. It is produced in batches that can vary up to ten
percent, more or less than the quantity requested. This potential
variation is a condition agreed to by both sides before the order is
filled.


6. Details of consignment documents provided by HAL are provided
below:

(a) HAL Purchase Order 2/20/1298/1 for 13,700 kgs, against ALLVAC
Invoice number for 14,516.9 kgs and HAL Receiving Report confirming
receipt of 14,516.9 kgs. Note: The HAL Receiving Report reflects
the HAL Purchase Order number, Supplier's Invoice number and
quantity received along with other details.

(b) HAL Purchase Order 2/20/1730/1 for 1362.7 kgs, HAL Purchase
Order 2/20/1730/2 for 1603.2 kgs against ALLVAC Invoice 07558497 for
1,465.1 kgs and ALLVAC Invoice 07558498 for 1,605.7 kgs (total:
3070.8 kgs) and HAL Receiving Report confirming receipt of 3,355.6
kgs. So, HAL F&FD claims to have received 284.8 kgs more Ti-6Al-4V
than ALLVAC claims to have shipped.

(c) HAL Purchase Order 2/20/2576 for 13,000 kgs, against ALLVAC
Invoice 07572964 for 5,981.1 kgs and Invoice 07577065 for 7,490.7
kgs (total: 13,471.8),two HAL Receiving Reports confirming receipt
of 5,993.6 kgs and 8,287 kgs (total: 14,280.6). So, F&FD claims to
have received 808.8 kgs more Ti-6Al-4V than ALLVAC claims to have
shipped.


7. HAL officials provided a copy of the completed form BXA-711 for
this transaction. Swaminathan confirmed the stated end-use. It was
used to manufacture components for aircraft engines and helicopter
transmission systems. Swaminathan stated that all of the titanium
alloy purchased under the subject license has been consumed. To
illustrate his point, he provided a computer-generated disposition
log for the Ti-6Al-4V obtained under this license. ALLVAC provided
to HAL F&F a copy of the export license with the license conditions
listed on it.


8. HAL's Foundry & Forge Division: Established in 1953, HAL Foundry
& Forge Division manufactures castings, forgings, rolled rings,
brake-pads and rubber products for the aeronautics, space, defense,
locomotive, heavy equipment and other industries. The division has
the infrastructure and expertise to manufacture radiographic quality
castings to international standards. The majority of their work
involves alloy fabrication, semi-continuous cast billets, aluminum
alloy castings and magnesium alloy castings. The Foundry and Forge
Division employs approximately 695 personnel.


9. Recommendation: Based on the interview with HAL officials and a
careful review of the supporting documents they provided, it appears
that HAL's Foundry and Forge Division received and consumed the
listed commodity in accordance with the conditions of the license.
However, because a physical inspection of the listed commodity could
not be accomplished, this Post-shipment Verificationremains
inconclusive.
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