VZCZCXYZ0001
RR RUEHWEB

DE RUEHHK #0971/01 0940801
ZNR UUUUU ZZH
R 040801Z APR 07
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 1212
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS HONG KONG 000971 
 
SIPDIS 
 
USDOC FOR 532/OEA/LHINES/DFARROW 
USDOC FOR 3132 FOR FCS/OIO REGIONAL DIRECTOR WILLIAM 
ZARIT 
BICE FOR OFFICE OF STRATEGIC INVESTIGATIONS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: BMGT BEXP HK ETRD ETTC
SUBJECT: EXTRANCHECK: PRE-LICENSE CHECK: TRONIC 
TECHNOLOGY NETWORK (HK) CO. LTD. 
 
REF: A) USDOC 00754 
 
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), accompanied by Commercial 
Assistant, Sandy Lai, conducted a pre-license check 
(PLC) at Tronic Technology Network (HK) Co. Ltd., 
Unit 2-3 Hope Sea Industrial Centre No. 22-24, Lam 
Hing Street, Kowloon Bay, Hong Kong (Tronic). The 
items in question are two pulse generators, valued at 
USD 35,900.  The export control classification number 
(ECCN) for these items is 3A230.  Items classified as 
3A230 are controlled for nuclear nonproliferation 
reasons and require a license for export to Hong 
Kong.  The license applicant is El-Pax, Inc. of 
Burlingame, California (El-Pax).  The Hong Kong 
purchaser of the items is Goodwell Microelectronics 
Limited (Goodwell) while Tronic is listed on the 
license application as the ultimate consignee. 
 
¶3.  According to the Hong Kong Companies Registry, 
Tronic has been in existence since April of 2000 and 
has only nominal paid-in capital.  Directors of 
Tronic are listed as mainland Chinese national Zugang 
Lai as well as Hong Kong identity card holder Ha Lo. 
Collocated at the same address are three additional 
companies, China Oriental Express Company Limited 
(established in 1994)(China Oriental), Dragon Well 
Transportation Limited (established in 1998)(Dragon 
Well), Oriental Resource International Development 
Company Limited (established in 1997) (Oriental 
Resource).  Ms. Lo is a director of these three 
additional companies as is Hong Kong identity card 
holder Sheung Wing Hai.  Oriental Resource has one 
additional director, Hong Kong identity card holder, 
Chi Kong Lau.  All companies have only nominal paid- 
in share capital. 
 
¶4.  Ms. Lo is listed in the Companies Registry as the 
director in several additional companies in Hong Kong 
including Action Technology (HK) Company Limited, 
China Dragon Well Development (HK) Limited 
(dissolved), Gori Electronic (HK) Company Limited, 
Joint Express Transportation Limited and Konge 
Industrial Development Company Limited (dissolved). 
Chi Kong Lau is listed in the Companies Registry as 
director in Amethyst Kingdom Company Limited, Huge 
Loyal Investment Limited and June Just Company 
Limited. 
 
¶5.  According to the Companies Registry, Goodwell 
(Tronic's supplier and buyer from El-Pax) has nominal 
paid-in capital.  Its directors are Hui Yi Li and 
Jian Heng Li, both mainland Chinese nationals. 
Goodwell is collocated with Fiaco Microelectronics 
(HK) Limited.  A google search reveals that Fiaco is 
apparently the parent company of El-Pax (the U.S. 
exporter and export license applicant).  A review of 
the Tronic to Goodwell fax reveals that it is 
addressed to Ms. Sindy Lau who is also listed as the 
contact person for Fiaco (at the fax number listed 
for Fiaco at www.fiaco.com). 
 
¶6.  The ECO, accompanied by Commercial Assistant 
Sandy Lai, visited Tronic at the address referenced 
above on March 5, 2007 and met with Ms. Ha (Phoebe) 
Lo.  Signage outside of the building lists the 
tenants of the particular unit as China Oriental and 
Dragon Well but makes no reference to Tronic.  Ms. Lo 
provided background on Tronic and its business and 
the proposed end-use of the items. She stated that 
Tronic has two shareholders and four staff persons 
and is involved primarily in mobile phone accessories 
trading as well as trading in the area of cables and 
modems.  Its clients are located in Hong Kong and 
mainland China.  Ms. Lo noted that shareholders in 
Tronic are also shareholders in other companies 
including Oriental Resource, Dragon Well and China 
Oriental (referenced above). 
 
¶7.  When asked about the proposed use of the items, 
Ms. Lo stated that they would be provided to Tronic's 
 
 
client for IP TV cable testing.  Ms. Lo did not have 
a copy of the contract with Tronic's client on hand. 
However, she did provide a copy of a fax dated 
December 15, 2006 to Goodwell that references an 
order for the items and Tronic's End-Use Certificate 
(dated November 25, 2006) and BIS-711 (Statement by 
Ultimate Consignee and Purchaser).  In the BIS-711, 
attached to the fax, Tronic marked the applicable box 
relating to end-use stipulating that Tronic would be 
the user of the items.  Tronic further stated on the 
form that the items would be used by Tronic in 
quality inspection of cable and that the nature of 
Tronic's business is "Research Etd."  When later 
asked by phone why Tronic had elected not to mark the 
box stating that the items would be resold, Ms. Ho 
stated that at the time she completed the form, 
Tronic did not have a firm order in place.  [ECO 
Comment:  This explanation is not entirely credible 
since it is clear that it was never intended that 
Tronic use the item.  As such, it would have been 
more appropriate to state the items were for resale, 
regardless of whether there was a firm order in 
place.] 
 
¶8.  By e-mail dated March 13, 2007, Ms. Ho stated 
that the Hong Kong customer for the items is Ipma 
Technology International Limited (HK) Co. (Ipma).  On 
March 15, 2007, Ms. Ho provided a contract between 
Tronic and Ipma for the items dated December 12, 
¶2006.  It is worth noting that the sale price for 
this transaction is USD 50,473 while the sale price 
in the Goodwell to Tronic transaction is USD 43,890 
and the value listed on the license application is 
USD 35,910.  According to the Companies Registry, 
Ipma has been in existence since 2005 and has the 
equivalent of USD 500,000 paid-in share capital.  Its 
director is Hong Kong identity card holder Man Bue 
Loong.  More information on Ipma's broadband and 
telecommunications business can be found at 
www.ipmaco.com. 
 
¶9.  On March 26, 2007, Ms. Vicky Lee, Marketing 
Communication Officer of Ipma stated by phone that 
Ipma had not placed the order claimed by Tronic. 
Subsequently, on March 27, 2007, Ms. Josephine Or, 
Manager for Product Marketing of Ipma called to say 
that she was the more appropriate person to ascertain 
whether an order existed.  On April 4, 2007, she 
stated that no such order existed. 
 
¶10.  The ECO recommends that this PLC of Tronic be 
considered Unfavorable. 
Sakaue