EXTRANCHECK: POST SHIPMENT VERIFICATION: MAXLINK INDUSTRIES

UNCLAS HONG KONG 002329 USDOC FOR 532/OEA/ MCANNER 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: POST SHIPMENT VERIFICATION: MAXLINK INDUSTRIES LTD. REF: A) BIS e-mail request 01210009 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 Maxlink Industries Ltd., Unit 710, Grand City Plaza, 1 Sai Lau Kok Road, Tsuen Wan, Hong Kong (Maxlink). The items in question for this PSV are two high performance, low power dual 8-bit, 1.5 GSPS A/D converters exported to Maxlink on or about February 26, 2009. These items are likely classified under Export Control Classification Number (ECCN) 3A001a5a1 and are controlled for national security (NS) reasons. This ECCN is eligible for shipment to Hong Kong license free but would, in virtually all circumstances, require a license for shipment to mainland China. The exporter is Arrow Electronics of Reno, Nevada. ¶3. According to the Hong Kong Companies Registry, Maxlink has been in existence since 1998. Its paid up share capital is the Hong Kong equivalent of USD 10. The Hong Kong Companies Registry lists Canadian national, Long, Yangxin (PP#BA527589) as director. Long, Yangxin is also a director in a range of other Hong Kong registered companies including ITSmart Limited, Maxlink Industries Limited, Maxlink Global Limited, Seatech International Asia Limited, Seatech International Holdings Limited, UniHz Holdings Limited and UniHz International Limited. Long, Yangxin is the sole director in each of these companies except for Seatech International Asia Limited. In this company, U.S. nationals Blatt, Michael (PP#202083327) and Schneider, Bruce Howard (PP#017007730) are also directors. Messrs. Schneider and Blatt are not listed as directors in any other Hong Kong registered companies. ¶4. Web research reveals that Maxlink is the Hong Kong logistics center for Seatech International (www.seatech-international.com). Seatech has offices in Milpitas, California as well as Shenzhen, China and Northolt, UK. According to its website, Seatech International has its headquarters in the United States and is a leading independent distributor of semiconductors, electronic components, computer products and networking equipment. UniHz Technologies Co., Ltd. has its own web site, namely www.unihz.com, where it states that this company is a leading intelligent transportation system supplier in China. It is noteworthy that Maxlink is located in the same building (but different floor) as several additional companies of diversion concern including Free Components, ARI International and in the building next door to Huge Source, a third company of diversion concern. ¶5. On December 3, 2009, ECO and FCS Commercial Assistant Carrie Chan visited the company and met with Mr. Pak, salesperson. The company is located in a warehouse and offices building and has space for several desks, a reception area and two small offices. According to Mr. Pak, Maxlink serves as warehouse and well as trading company for Seatech. ¶6. Mr. Pak stated that Seatech's China headquarters are located in Shenzhen and that some of the underlying documentation for this order (the customer purchase order, for example) is located in Shenzhen. Seatech/Maxlink customers are located in mainland China, Thailand, Malaysia, Singapore and Korea. Approximately fifty percent of the company's business is for local delivery while fifty percent is for international sale. Mr. Pak stated that shipments to China are sent to manufacturers but he is not familiar with what is being made with Maxlink components. When asked, Mr. Pak stated that Maxlink obtains HKTID import and export licenses for its products. When pressed, it became apparent that Mr. Pak was referring to another type of license. Mr. Pak stated that he has only been with the company for two months. ¶7. As to the items in question, Mr. Pak provided documentation (an invoice) confirming that the items had been sold to the Harbin Institute of Technology (HIT) in mainland China. According to online research, HIT is a larger university in Harbin that is known for its space and defense related research. ¶8. ECO explained the importance of complying with export controls and, by separate e-mail, provided Mr. Pak with information on BIS and HKTID controls. ¶9. ECO does not believe Maxlink is a suitable recipient of controlled U.S. origin technology. ECO further recommends that BIS Office of Export Enforcement follow up with Seatech in the United States as the underlying documentation appears to indicate that it may be been aware that the items were destined for HIT when the transaction was completed.