EXTRANCHECK: POST SHIPMENT VERIFICATION: HONESTY ELECTRONIC

UNCLAS HONG KONG 000004 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: HONESTY ELECTRONIC TECH LTD. REF: A) BIS e-mail request 01210093 dated October 28, 2009 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) attempted to conduct a post shipment verification (PSV) at Honesty Electronic Tech Ltd., Room 601A, 6/F, Four Seas Building, 208-212 Nathan Road, Hong Kong (Honesty). The items in question for this PSV are various electronic components exported to Honesty on or about November 21, ¶2007. These items are likely classified under Export Control Classification Number (ECCN) 3A991 and are controlled for anti-terrorism (AT) reasons. This ECCN is eligible for shipment to virtually all destinations, end users and end uses worldwide except certain sanctioned countries and restricted persons and end uses. The exporter is Abacus Industries of Naples, Florida. ¶3. According to the Hong Kong Companies Registry, Honesty has been in existence since 2005. It has the Hong Kong equivalent of USD 1250 in share capital. Chen, Ji Hai (China Passport number K00710348) is listed as the company's sole director. The company's corporate address is located at the offices of a company secretarial service. ¶4. Commercial Assistant Carrie Chan attempted for some time to arrange a meeting with a representative of Honesty. Initially, the company secretarial service answered the phone for Honesty and a representative of Honesty (a Mr. Chan) returned the call. Subsequently, Mr. Chan's boss and the head of the company, Mr. Chen (presumably the company director listed above) stated that he was willing to meet with ECO but did not have a Hong Kong entry permit (he is located in mainland China). Mr. Chen offered to obtain such a permit and revert with an appropriate meeting time. Mr. Chen has not been in communication for some time and ECO is therefore closing out this PSV. ¶5. Based on the information on hand, it is difficult to make a conclusive determination of whether Honesty is a suitable recipient of U.S. origin technology. That is because the items in question may go to virtually all destinations and end users and uses and ECO has no specific information on hand that these items went to unauthorized destinations, uses or users. That said, the fact that Honesty is apparently unwilling (or unable) to meet with ECO is a concern as is the fact that Honesty claims on its web site that it is able to source military grade components (presumably for sale within Mainland China). As a result, ECO believes Honesty to be an unsuitable recipient of U.S. origin technology. In addition, ECO recommends a close review of all products being sent to Honesty that may be more highly controlled.