EXTRANCHECK: POST SHIPMENT VERIFICATION: WINSUNY TECH HK

UNCLAS HONG KONG 001087 USDOC FOR 532/OEA/LHINES/ADYSON 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: WINSUNY TECH HK LTD REF: A) USDOC 03398 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) conducted a post shipment-verification (PSV) at Winsuny HK Ltd., Rm. 145A Chung Kiu Commercial Building, 47-51 Shantung Street, Hong Kong (Winsuny). The items in question are semiconductors exported to Winsuny on or about April 5, 2008 and valued at USD 3,296. On the applicable shippers export declaration (SED),these items are classified under export control classification number (ECCN) 3A001 and, if properly classified, would be controlled for national security (NS) reasons. The exporter was Rochester Electronics of Newburyport, Massachusetts. ¶3. According to the Hong Kong Companies Registry, Winsuny has been in existence since 2001. Its paid up share capital is the Hong Kong equivalent of USD 500,000. Mainland China national Chen Long (mainland ID 320626197603301439/DOB March 30,1976) is listed as the sole director and shareholder. Chen Long acquired the shares of the company in November 2006 from Huang Hong Wei. Neither individual appears to be a director in any other company in Hong Kong. ¶4. A search of Winsuny's web page (www.winsuny.com) reveals that the company is a electronics distributor. The site further states that the company has additional offices in Shenzhen, Shanghai, Beijing, Chengdu and Xian. It claims a staff of over 30 engineers providing service to customers in Chinese telecom, industry, military and aerospace markets. It claims military and space customers including CASC and CETC, among others. It claims also to represent a number of semiconductor and other electronics companies including Intersil, Xilinx, TI and others. The company's Hong Kong address listed on its web site is the location of a wide range of companies, many unrelated to electronics. ¶5. Commercial Assistant Carrie Chan attempted for some time to arrange a time to conduct the PSV. The Hong Kong number provided for the company rolled to a mainland China number. Eventually, Ms. Chan was able to establish with a Hong Kong contact, namely Jenney who agreed to meet at the company's headquarters in Hong Kong. She stated that the general manager of the company was on business travel and would not be able to meet. ¶6. On June 5, 2008, ECO and Commercial Assistant Carrie Lam visited Winsuny and met with Jenney (no last name or business card given), purchasing manager (buyer) for the company. The meeting occurred at the offices of a company secretarial service in a 25 square foot room apparently used by Winsuny (Winsuny apparently rents a second, similar size room in the same office complex). Jenney provided background on Winsuny stating that it is a small electronics trading company. She further stated that most of its business is in the commercial and consumer fields. She noted that sometimes mil-spec semiconductors (such as the items in question) are used in medical equipment and oil field equipment. The company has sales agents in Hong Kong and mainland China. She stated that when Winsuny orders from Rochester, it does so from the Shanghai office of the company rather than from Hong Kong Rochester distributors because the Shanghai Rochester office provides better pricing terms. ¶7. As to the specific items in question, Jenney stated that she had no purchase order to provide to the ECO because Winsuny had purchased the items on behalf of a customer without a purchase order. She stated that Winsuny had expected to receive an order but that had not materialized. When ECO expressed skepticism about this approach, Jenney stated that this was a long-standing customer and that it is often necessary to act quickly to secure orders. Jenney stated that no order ever actually materialized and, as a result, she was able to show the ECO the items (marked as MG80C196KB-12/R and Made in Malaysia). ECO doesn't know how it came to pass that Winsuny still had the items in hand but does not believe that Winsuny did not have a purchase order for these items. ¶8. When asked about the purported end-user listed on the end-use certificate provided to Rochester (by Winsuny),Jenney stated she had been told by the salesperson to enter the name (Cam-IC). ECO was able to find a web site for a Cam-IC (www.cam-ic.com). The web site includes a claim that the company manufactures full industry and aerospace, rugged, commercial-off-the-shelf industrial control boards. That site is a hodgepodge of language apparently lifted from other web sites including the web site for CM Computer (Cmcomputer.com),a military contractor and EG&G (www.urscorp.com), another provider of various military and homeland security services to the U.S. government. When asked whether she knew anything about Cam-IC, Jenney stated that she did not. When asked why her name was included as a contact for Cam-ic of that company's web site, Jenney stated that the companies might be related but that she was unsure as to why her name would be included as a contact for this company. ¶9. Winsuny is an entirely unsuitable recipient of U.S. origin technology. ECO did not find the answers of Jenney to be credible. In fact, ECO expects that all shipments to Winsuny are immediately diverted to mainland China. ECO recommends a thorough review of all shipments to Winsuny and its address. ECO also recommends that BIS reach out to Rochester to determine what information it had on hand when it shipped the items. Further, ECO requests that OEA confirm the 3A001 classification of the shipment so that ECO may reach out to Hong Kong TID concerning a potential violation of Hong Kong's export control rules in connection with this shipment. Finally, ECO recommends that Winsuny be added to the BIS Unverified List.