EXTRANCHECK: PRE LICENSE CHECK PEIPORT SCIENTIFIC LIMITED

UNCLAS HONG KONG 001540

USDOC FOR 532/OEA/LHINES/ADYSON
USDOC FOR 3132 FOR FCS/OIO REGIONAL DIRECTOR PATRICK SANTILLO
BICE FOR OFFICE OF STRATEGIC INVESTIGATIONS

SIPDIS

E.O. 12958: N/A
TAGS: BMGT BEXP HK ETRD ETTC
SUBJECT: EXTRANCHECK: PRE LICENSE CHECK PEIPORT SCIENTIFIC LIMITED

REF: A) USDOC 04056 B) D396546

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 pre-license check (PLC) at Peiport Scientific Limited, Room 1302,
Westlands Centre, 20 Westlands Road, Quarry Bay, Hong Kong (Peiport
Scientific). The item in question is a FLIR Gasfinder-LW thermal
imaging camera that is the subject of export license application
D396546. The item is classified under export control classification
number (ECCN) 6A003 and is controlled for national security (NS) and
nuclear non-proliferation (NP) reasons. The license applicant is
FLIR Systems, Inc. of Wilsonville, Oregon.


3. According to the Hong Kong Companies Registry, Peiport
Scientific has been in existence since 1998. Its paid up share
capital is the Hong Kong equivalent of USD 350,000. Hong Kong
residents Wong, Kwan Lik and Yeung, Lun Ching are listed as
directors. These two individuals are also directors in two
additional companies, namely DNL Optoelec Systems Limited and
Peiport Industries Limited.


4. According to Peiport Scientific's web site (www.peiport.com),the
company specializes in importing high tech and scientific
instruments into China, Hong Kong and Macau. It has technical
support and sales offices in a range of cities in China including
Beijing, Shanghai, Guangzhou, Chengdu, Wuhan, Xian and Lanzhou.


5. On August 14, 2008, ECO Philip Ankel visited the company and met
with Ms. Debby Lo, Administration Manager and Mr. Roger Tam, Export
Sales Manager, Gimbals Systems Department, Peiport Industries Ltd.
Ms. Lo provided an overview of Peiport Scientific. She stated that
the company was established in 1990. In earlier years, the company
was a reseller of Agema infrared (the predecessor of FLIR) and now
represents FLIR in the China region (FLIR is the resulting company
of a merger between Agema and other similar companies in 1997). Ms.
Lo stated that the company had sold more than 2000 infrared cameras
into mainland China and has been a FLIR distributor for over 10
years. Its primary customers for FLIR products are power utility
companies and Peiport Scientific is the sole agent for FLIR cameras
for power utility applications. Peiport Scientific's other
customers include universities and factories.


6. Ms. Lo and Mr. Tam provided additional information about the
related companies referenced above. Peiport Industries Ltd. (as
distinct from Peiport Scientific) designs and produces its own
products, often using FLIR products. For example, the company
produces vehicle based IR and UV systems (what Ms. Lo called
integrated systems). Also, Peiport Industries distributes certain
small aircraft engines including those manufactured by Rotax, an
Australian company (www.rotax-aircraft-engines.com). DNL Optoelec
Systems Ltd. is a service provider and provides inspection services
using thermal imaging cameras and related products.


7. As to the specific camera in question, Ms. Lo stated that the
company actually has three outstanding license applications for the
same item. Two are for electric power applications (Lanzhou High
Voltage Substation Company and Chongquing Electric Power Test and
Research Institute). The various sales offices will use the third
camera (that is the subject of this check) as a demonstration unit.
According to Ms. Lo, the camera will be kept under the company's
tight control. The camera will not be loaned to prospective
customers and will remain in the physical custody of the company.
When not being used for demonstration purposes the camera will be
kept under lock and key and will be subject to a log-in/out system.
The camera will be transferred among the various offices according
to a schedule fixed by the company to accommodate demonstration
requests. According to Ms. Lo, FLIR required that the company
purchase a demonstration unit in keeping with its exclusive
distribution arrangement.


8. At the time visited, Peiport Scientific appeared to be a
suitable recipient of the subject commodity as it cooperated with
the PLC and appears to have an appropriate commercial need for the
item. Peiport Scientific likewise confirmed that it will maintain
physical custody of the item at all times.