VZCZCXYZ0008
RR RUEHWEB

DE RUEHHK #2232/01 2390906
ZNR UUUUU ZZH
R 270906Z AUG 07
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 2729
RUEAIAO/HQ ICE IAO WASHINGTON DC

UNCLAS HONG KONG 002232 
 
SIPDIS 
 
USDOC FOR 532/OEA/LHINES/DFARROW 
USDOC FOR 3132 FOR FCS/OIO REGIONAL DIRECTOR WILLIAM ZARIT 
BICE FOR OFFICE OF STRATEGIC INVESTIGATIONS 
 
BEIJING FOR FCS JEANETTE CHU 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: BMGT BEXP HK ETRD ETTC
SUBJECT: EXTRANCHECK: POST SHIPMENT VERIFICATION: TECT ELECTRONICS 
 
REF: A) USDOC 05826 
 
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 Tect Electronics, Flat 811, 
8/F, Hing Wah Center, 82084 Tokwawan Road, Kowloon, Hong Kong 
(Tect). The items in question are three high power broadband solid 
state power amplifiers exported to Tect on or about April 7, 2007 
and valued at USD 12,000.  On the applicable shippers export 
declaration (SED), these items are classified as 3A001 and are most 
likely controlled for national security (NS) reasons.  The ECO notes 
that in certain circumstances, items that fall into the applicable 
ECCN (3A001) may be exported or reexported to mainland China without 
a license, particularly where they are destined for civil use. 
However, in other circumstances, 3A001 items require a license to 
mainland China regardless of end-use.  This difference is dependant 
on the ECCN subcategory into which the applicable items fall. The 
exporter was Aethercomm Inc. of San Marcos, California (Aethercomm). 
 
 
¶3.  Tect is not included in the Hong Kong Companies Registry as it 
is not an incorporated entity.  According to the Hong Kong Inland 
Revenue Department Business Registration Office, Tect is a sole 
proprietorship and has been in existence since 1999. The owner is 
Hong Kong resident Lo, Kwong Yau with Hong Kong resident identity 
card number D2486947.  The company has additional offices in 
Shanghai, Shenzhen and Beijing.  Its web site (www.tect.com.hk) 
provides additional information including a long list of brands. 
Its web site also includes various pictures of fighter jets, tanks, 
satellites and warships, presumably illustrating applications for 
some of its products. 
 
¶4.  The ECO visited Tect at the address referenced above on June 27, 
2007 and met with Ms. Connie Kong, Assistant to the CEO.  The office 
is modest in size, typical for a small trading company in Hong Kong. 
 Ms. Kong stated that Tect is a distributor of various electronic 
components with customers in Hong Kong, mainland China, Singapore, 
Malaysia and Taiwan.  The company is based in Hong Kong with sales 
offices in Shenzhen and Shanghai. Ms. Kong further stated that Tect 
represents approximately 40 brands.  The company's products are used 
in the telecommunications and semiconductor areas.  Tect's suppliers 
are located in the United States, the United Kingdom, France, Israel 
and Korea.  The location of customers is linked to the authorized 
sales areas provided by Tect's suppliers.  For example, in some 
instances, Tect may sell products in Hong Kong and Singapore but not 
mainland China. 
 
¶5.  Ms. Kong stated that Tect is not always aware of the end use of 
the items it sells to Hong Kong companies.  However, she stressed 
that Tect always discloses customer names and addresses to its 
suppliers.  Where a license is required, Tect provides its suppliers 
with information about its customers so that those suppliers may 
apply for licenses, as appropriate.  Ms. Kong stated that its 
suppliers rarely decline to supply certain Tect customers although 
she noted that an Israeli supplier had recently declined to provide 
a product to one of its customers.  Kong further stated that some 
U.S. suppliers had declined to supply certain customers.  Ms. Kong 
stated that when this occurs, it tends to happen at the early stage 
of discussions based on the customer name and the specifications of 
the products.  This occurs for custom build and what she termed 
"special purpose" orders.  The ECO stressed to Ms. Kong that Tect 
has an independent obligation to comply with U.S. export control 
rules and provided her with BIS guidance on reexport controls. 
 
¶6.  As to the specific transaction in question, Ms. Kong confirmed 
that Tect had received the items and provided them to Fomax 
International Limited in Hong Kong.  It was the first order Tect had 
received from Fomax.  According to the Hong Kong Companies Registry, 
Fomax has been in existence since 2001.  It has the equivalent of 
USD 1200 in share capital and directors are listed as Hong Kong 
residents Cheung, Mei (resident identity card number P104011(5) and 
Hung, Yuen Chit (resident identity card number A821382(0). 
According to Ms. Kong, Fomax is a trading company in Hong Kong. 
Related documentation provided by OEA provides that the end-user for 
these items will be Chengdu Century Goldenbird Electronic Technology 
Limited and the end-use will be "satellite communication". 
 
¶7. At the time visited, Tect appeared to be a suitable recipient of 
the commodities shipped (as reseller) since Tect cooperated with the 
PSV and provided all requested information concerning the final 
disposition of the applicable items.  Tect is likewise familiar with 
and stressed its intent to comply with U.S. export control rules. 
At the same time, the ECO was not able to inspect the subject items 
 
as they had already been delivered to Tect's customer.  Consistent 
with guidance on reporting of PSVs where the items cannot be 
physically inspected, the ECO recommends that this PSV be classified 
as Limited. The ECO further recommends that OEA determine whether 
the applicable items are eligible for license-free shipment to 
mainland China as this may have an impact on the final 
classification of this PSV.