EXTRANCHECK: PRE-LICENSE CHECK: NICKUNJ EXIMP ENTERPRISES

UNCLAS NEW DELHI 002159

SIPDIS

USDOC FOR 532/OEA/M. NICKSON/WILLIAM HIGGINS
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: PRE-LICENSE CHECK: NICKUNJ EXIMP ENTERPRISES
PVT. LIMITED, MUMBAI, LICENSE NO. D397561

REF: USDOC 03927


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


2. On July 30, 2008, Export Control Officer (ECO) Paul Cushman and
FSN Shailendra Srivastava conducted a Pre-License Check (PLC) at
Nickunj Eximp Enterprises (NEE) in Mumbai.


3. BIS requested a PLC at NEE, located on Maharshi Karve Road,
Marine Lines, Mumbai. NEE is listed as the intermediate consignee
of a Liquid SiC Precursor controlled under ECCN 1C007. The ultimate
consignee is Vikram Sarabhai Space Center (VSSC),a Government of
India enterprise. The license applicant is Starfire Systems, Inc.
of Malta, New York.


4. ECO and FSN Srivastava met with Mr. Nickunj Shah, Chairman &
Managing Director, and Mr. Kader Munawar, Executive Vice President
(Operations),NEE.


5. NEE representatives were familiar with BIS regulations. In
October 2003 and March 2005, BIS officials conducted Post-Shipment
Verifications at their facility.


6. This meeting was held in Shah's office at NEE. Shah provided
copies of the VSSC Tender Invitation, NEE Quotation, VSSC Purchase
Order, NEE Purchase Order and VSSC End-Use Statement.


7. Shah stated that NEE is a trading company. In the case of this
transaction, VSSC posted a bid solicitation on the internet. NEE
was the low bidder and was awarded the VSSC procurement contract for
the Liquid SiC Precursor. NEE then placed the order with Starfire
Systems, Inc. Shah stated that VSSC plans to use this material for
research and development purposes in the study of ceramic matrix
composites which are useful in developing small communications
satellites.


8. Established in 1987 and headquartered in Mumbai, Nickunj Eximp
Enterprises serves as the Indian distributor for several foreign
manufacturing and trading companies. NEE employs approximately 300
personnel. Nickunj Shah, a high school graduate, is the company's
founder, chairman and managing director. Shah volunteered that all
of NEE's customers (8,000 - 10,000) are within India. When
challenged, Shah reiterated that NEE has no customers outside of
India. ECO asked Shah if he understood the concept of and the
importance of "Know Your Customer" as it relates to
non-proliferation efforts. Shah responded affirmatively and when
asked to expound, Shah stated that he and his staff know all of
their customers personally because they physically visit each
customer's facility and meet the key players. When ECO began to
discuss BIS regulations, Shah interrupted him and asserted, "We've
been dealing with the U.S. for umpteen [sic] years. We know all the
rules and regulations." Shah mentioned that NEE is the authorized
distributor for Carbone of America, a manufacturer of carbon and
graphite products. Shah then expressed frustration with U.S. export
controls and the difficulty he is having sourcing graphite from
America. He mentioned that in 2005, BIS denied an export license to
Bharat Forging Ltd. for a shipment of graphite (NEE was intermediate
consignee). Shah explained that in the past, he sourced graphite
from the United States almost exclusively. However, since the
tightening of U.S. export controls, he now sources most of his
graphite from Germany, Russia, China, and Japan. Website:
www.nickunjgroup.com.


9. Recommendation: Nickunj Eximp Enterprises appears to be a
suitable recipient of this controlled material. NEE cooperated
fully with the BIS team, has a customer (the end-user) with an
apparent legitimate need for the material. Furthermore, Nickunj
Shah asserted that he and his staff understand their
responsibilities with respect to the Export Administration
Regulations.
WHITE