EXTRANCHECK: POST SHIPMENT VERIFICATION: CHESTER VIEW LTD.

UNCLAS HONG KONG 000513

USDOC FOR 532/OEA/MNICKSON/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: POST SHIPMENT VERIFICATION: CHESTER VIEW LTD.

REF: A) USDOC 07198


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 Chester View Ltd., 1/Fl Mau
Lam Commercial Bldg, 16-18 Mau Lam Street, Hong Kong (Chester View).
The items in question for this PSV are four pulse generators
exported to Chester View on or about September 27, 2008. On the
applicable shippers export declaration (SED),the items are
classified under export control classification number (ECCN) 3A002.
This ECCN is one of a group of ECCNs that do not require a license
for export/reexport to Hong Kong but may require a license to
mainland China. The exporter was Quantum Composers Inc., of
Bozeman, Montana.


3. According to the Hong Kong Companies Registry, Chester View has
been in existence since 2005. Its paid up share capital is the Hong
Kong equivalent of USD 1250. The Hong Kong Companies Registry lists
Indian national, Mr. Anand Vardhan as director.


4. A review of the Chester View's web site (www.chesterviewltd.com)
reveals that Chester View specializes in the manufacturing and
distribution of a range of electrical and electronic test equipment.
It claims to be able to provide turn-key test solutions for defense
and aerospace applications and states that Chester View customers
are R&D and manufacturing companies in the defense, space,
aeronautical, automobile, telecom and electronic sectors. The web
site does not include any phone or e-mail contact information.


5. Further web research reveals that the company is located at the
address of Buttar HK Limited, a corporate secretarial service that
appears to cater to Indian companies. According to the Hong Kong
Companies Registry, Mr. Vardhan is also a director in three other
companies, namely Max Star Electronics Technology Limited (no
apparent web presence),RSL-Electronics Limited (www.rsl.co.il) and
Vincent Asia Pacific Limited (www.vincentasiapacific.com). RSL
Electronics is an Israeli developer and manufacturer of control
diagnostics and prognostics systems for aerospace, marine and land
applications. The Israeli company claims widespread use in military
applications worldwide. Vincent claims to have maintenance and
repair facilities for BARCO in the Asia Pacific region (more on
BARCO below).


6. It took over two months to finally arrange a meeting with Mr.
Vardhan regarding this shipment. He claimed to be on extensive
travel in the region and India. It became clear that Mr. Vardhan
does not reside in Hong Kong and it does not appear that the company
has any other employees or physical location save for the modest
offices of Buttar HK Limited.


7. On March 9, 2009, ECO visited the company at the address noted
above and met with Mr. Vardhan, Director. He stated that Chester
View is a trading company set up in 2005. He stated that he
operates in Hong Kong because it is easier than operating out of
India. His primary market is India. He also stated that Vincent
and Max Link (referenced above) are dormant trading companies. He
has just begun a collaboration with RSL (he described this company
as providing equipment to conduct diagnostics for wind energy
turbines). He does not sell to mainland China.


8. Mr. Vardnan stated that the customer for the items in question
was BARCO (Belgian American Radio Company). This company
manufactures wall screens and monitors and the items are to be used
in the testing of display systems (www.barco.com). Mr. Vardnan
states that the items were for use in India and he provided
documentation confirming that the items had been transferred in Hong
Kong to BARCO's designated freight forwarder. Mr. Vardnan provided
additional documentation confirming sale of additional units of the
same product to Bharat Electronics in India (likely for military
use).


9. Mr. Vardnan was open and cooperative during the interview and
stressed his willingness to comply with U.S. export controls. ECO
provided by subsequent e-mail various additional information about
U.S. export controls. ECO found Mr. Vardnan to be credible in his
explanations.


10. In light of various aspects of this PSV (no apparent Chester
View Hong Kong physical location, delay in scheduling check,
unorthodox shipping pattern),ECO hesitates to declare that Chester
View is a suitable recipient of U.S. origin technology. At the same
time, ECO notes that Mr. Vardnan's statements were credible and ECO
can find no evidence that any violations of the Export
Administration Regulations occurred in connection with the
transactions that were the subject of the PSV. ECO requests that

OEA conduct a review of the technical specifications of the items to
determine whether a license was required for their shipment to Hong
Kong and subsequent reexport to India.