EXTRANCHECK: PRE LICENSE CHECK: BIT BY BIT LIMITED

UNCLAS HONG KONG 000241

USDOC FOR 532/OEA/MNICKSON/ADYSON/TWILLIS/EHOLLAND
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: BIT BY BIT LIMITED

REF: A) D410390 B) USDOC 00132



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 a pre-license check (PLC) at
Bit by Bit Limited, Unit A1-05, 6/F Hang Fung Industrial Building,
Phase 1, 2G Hok Yuen Street, Hong Kong (Bit by Bit). The item in
question is an ISO layer 7 load balancing router for internet
servers. This item is classified under export control
classification number (ECCN) 5A002 and is controlled for national
security (NS) reasons. The license applicant is Coyote Point
Systems, Inc. of Millerton, NY.


3. According to the Hong Kong Companies Registry, Bit by Bit (was
registered in November 2007. Its directors are Hong Kong residents
Chiu, Wai Chung, Choy, Kam Cheong, and Li, Man Tat. Its paid up
share capital is the Hong Kong equivalent of USD 12.


4. According to the company web site (www.bitbybit.com.hk) Bit by
Bit is an IT distribution company. It represents a range of U.S.
and other international IT hardware manufacturers such as the
license applicant, Coyote Systems.


5. On February 2, 2009, ECO and Commercial Assistant Carrie Chan
visited Bit by Bit and met with Mark Li, General Manager. The
meeting occurred at the offices of On-Time Technology, 907B, Shui
Hing Center, 13 Sheung Yuet Road, Kowloon. When asked why the
meeting was held at this address, Mr. Li stated that On-Time
Technology is related to Bit by Bit and acts as a solutions provider
using Bit by Bit procured products. Mr. Li stated that the
companies are kept separate so that other solutions providers will
not avoid Bit by Bit because of the affiliation. Mr. Li provided
background on Bit by Bit and stated that it focuses on the provision
of hardware for various internet and other IT applications.


6. As to the specific transaction in question, Mr. Li stated that
the customer is Myweather LLC and he provided a copy of a quotation
provided to the company. When asked for a Purchase Order to review,
Mr. Li stated that Bit by Bit had never received a final purchase
order from this company but had received payment and, for his
purposes, this was enough to proceed. Mr. Li further clarified
that, in fact, it appeared the final customer/end user will be My
Weather & Traffic Technology (Beijing) Ltd. A review of the
Myweather.net web site confirms that this order is likely destined
to this end user for support of Myweather.net's expansion of its
service into China.


7. ECO separately provided Mr. Li with links to the Commerce
Control List and other know your customer guidance. Mr. Li stated
that he would review such information closely.


8. Based on the information noted above, ECO believes that Bit by
Bit is a suitable recipient of U.S. origin controlled technology, as
reseller. ECO can make no determination about the end-user aside
from the comments stated herein.