EXTRANCHECK: PRE LICENSE CHECK: GEO MARINE INSTRUMENT

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



2. 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 two pre-license checks (PLCs)
at Geo Marine Instrument Company, Rm 1019, New Commerce Ctr., 19 On
Sum St., Shatin, Hong Kong (Geo Marine). The items that are the
subject of the first check (and BIS license application D 409631)
are two TR-1075D transducer assays, while the second set of items
(that are the subject of BIS license application D409956) are 1500
passive acceleration compensated hydrophones rated to 2000M. These
items are classified under export control classification number
(ECCN) 6A001 and are controlled for national security reasons (NS).
The license applicants are Teledyne Benthos of North Falmouth,
Massachusetts and Massa Products Corporation of Hingham
Massachusetts.



3. According to the Hong Kong Companies Registry, Geo Marine
Technology Limited was incorporated in May 2002. Its paid in share
capital is the Hong Kong dollar equivalent of USD 1250. Its
directors are listed as Hong Kong residents So, Hay Wah (HK
Identification number C515318) and Tse, Fung Ping (HK Identification
number G262458(2). Its website is www.geo-marine-tech.com.cn.



4. On February 2, 2009, ECO visited Geo Marine and met with Mr.
Janson So, General Manager. The offices of Geo Marine in Hong Kong
are quite small (no more than 200 square feet). It appears that two
to four staff work at this location which appears to act as both
offices and a small warehouse for items shipped to Geo Marine. Mr.
So stated that the company's business is focused on the provision of
products and total solutions related to underwater surveying and
marine engineering. A key portion of that business serves the oil
and gas exploration business. Mr. So stated that Geo Marine also
acts as a distributor to surveyors in Hong Kong and China and also
sells geophysical equipment (such as hydrophones for conducting
surveys of the sea floor). The company has additional offices in
mainland China.



5. As to the hydrophones that are the subject of BIS license
application D409956, Mr. So stated that the buyer is BGP
International China, a subsidiary of the China National Petroleum
Company (CNPC) He stated that the hydrophones are destined to
replace existing Bentos hydrophones on cables used in ocean bottom
analysis and exploration.



6. As to the transducers that were the subject of BIS license
D409631, Mr. So stated that they are destined for the First
Institute of Oceanography State Oceanic Administration in Qingdao,
mainland China. He provided a copy of the purchase contract for the
item (and other related items). The contract lists Qingdao Bondex
Trade Service Co. Ltd. as the buyer's agent for this transaction.
Mr. So stated that the institute is involved in geophysics related
activities and specializes in study of the sea floor. In
particular, he stated that one of the transducers would be used in
shallow water sea bed engineering studies while a second would be
used for oceanographic study. He stated that the Institute had been
buying this particular item through other resellers for many years.
Mr. So further explained that the Institute provides similar
services as survey consultants to major western engineering
projects. In China, Mr. So stated, those services are provided by
state organizations.



7. Mr. So was well versed in export controls and stated that his
company obtains licenses from the Hong Kong government for import
(and subsequent reexport) of strategic commodities. He stated
(correctly) that the Hong Kong government will not grant him a
license to import items when no corresponding U.S. export license
has been obtained. Mr. So also stated that, from time to time, he
receives e-mail inquiries from potential customers outside of his
geographic region. He stated that he forwards those to his
suppliers and does not serve customers outside of Hong Kong and
China. Mr. So stated that in his line of business, there are
relatively few buyers and that he is familiar with most of them. It
was clear to ECO that Mr. So is not keen to jeopardize his business
by selling to unknown buyers that approach him through the
internet.



8. It appears that another company uses this same address, namely
United Star Navigation. When asked about this company, Mr. So was
quite open and stated that this company is a mainland based reseller
of lighthouse and navigation related products. It has registered a
company in Hong Kong to take advantage of transfer pricing to
minimize taxes (the likely web site is usnt.com.cn). According to
the Hong Kong Companies registry, this company has been in existence


since 1997 and has less than the Hong Kong equivalent of USD 10 in
share capital. Its directors are listed as mainland nationals Chen,
Ya Bin (passport or ID number 120103630407211), Ding, Yue (passport
or ID number 110108197308076313), Jiang, Yaqun (passport number or
ID 110228630705211), Lin, Yu Nai (passport or ID number
370202391206353 and Peng, Hai (passport or ID number
110102660604041), and Hong Kong resident Man, Ka Fai Johnny (Hong
Kong ID D238430(3). While ECO has no additional information about
this company, ECO notes that this tax optimization mechanism is not
uncommon in Hong Kong.



9. Based on the information noted above, ECO believes that Geo
Marine is a suitable recipient of U.S. origin controlled technology,
as reseller and system integrator. ECO has not independently
reviewed the bona fides of the company or individuals referenced in
paragraph 8. To the degree BIS has derogatory information about
United Star Navigation or its directors, BIS may wish to reevaluate
this favorable review of Geo Marine.