VZCZCXYZ0002
RR RUEHWEB

DE RUEHHK #2289/01 2472337
ZNR UUUUU ZZH
R 042337Z SEP 07
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 2803
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS HONG KONG 002289 
 
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: 
HOPESEA IMPORT & EXPORT LIMITED 
 
REF: A) USDOC 05666 
 
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 at Hopesea 
Import & Export Limited, No 1 Hung To Road, Unit 
12-16, Hong Kong (Hopesea).  The items in question 
are sinewave generator telerings exported to 
Hopesea on or about May 10, 2007 and valued at USD 
3,385.  On the applicable shippers export 
declaration (SED), these items are classified as 
3A001 and, if properly classified, would likely be 
controlled for national security (NS) reasons. 
The exporter was Triangle Electronics Group, Inc. 
of Ronkonkoma, NY. 
 
¶3.  According to the Hong Kong Companies Registry, 
Hopesea has been in existence since 2006.  It has 
nominal authorized share capital (the equivalent 
of less than USD 1) and no paid-up share capital. 
The Commercial Registry lists Hong Kong Resident 
Card holders Fung, So Kwan and Yeung, Chun Kwai as 
directors.  The company referenced in Reftel A, 
namely Hopesea Electronics, is the former name of 
what appears to be an unrelated company. 
 
¶4.  On July 24, 2007, ECO met with Ms. Anna Yeung 
of Hopesea.  She stated that Hopesea is an 
electronic components trading company.  It is an 
affiliate of Shenzhen Huafuyang Import & Export 
Co. Ltd.  That company's phone number was listed 
as the contact number for Hopesea in Reftel A and 
Ms. Yeung's business card lists that company's 
name and contact details on the flip side of the 
Hong Kong contact details (which reference 
Shenzhen Huafuyang Import and Export Co. Ltd., a 
Hong Kong phone number but not Hopesea).  Ms. 
Yeung stated that the electronic components traded 
by Hopesea are general use components used in the 
production of televisions, computers, DVD players 
and MP3 players. The company's standard business 
is to source components in the United States, 
Europe and Hong Kong for sale to mainland China. 
Approximately 10-15 employees were located at the 
company's offices, which also included space for 
accepting and packing shipments to and from the 
company. 
 
¶5.  When asked by the ECO, Ms. Yeung stated that 
some of the company's products are controlled for 
export to mainland China by the Hong Kong 
government.  She stated that Hong Kong export 
licenses are difficult to obtain and often take 
several weeks to process.  She stated that in her 
business where quick supply is critical, waiting 
for licenses is a problem.  Mr. Yeung stated that 
in many cases, Hopesea sells the item to a 
mainland customer but requires that customer to 
pick up the items in Hong Kong and pay cash.  When 
asked whether the buyer takes on the obligation to 
obtain the applicable Hong Kong license, Ms. Yeung 
stated that she is not aware whether the company's 
buyers obtain licenses but assumes they are being 
exported without a Hong Kong license. 
 
¶6.  Ms. Yeung stated that most of her stock does 
not typically come directly from the United States 
but is rather sourced in Hong Kong.  Her primary 
supplier is Imgram Micro in Hong Kong.  She stated 
that Imgram Micro typically obtains the requisite 
import licenses from the Hong Kong government for 
items controlled by the Hong Kong government for 
import into Hong Kong (Note:  Hong Kong requires a 
license for both import and export of strategic 
commodities). 
 
¶7.  As to the specific transaction in question, 
Ms. Yeung stated that the customer picked up these 
items from Hopesea in Hong Kong.  She provided a 
 
 
copy of a Triangle Electronics Group Inc. invoice 
(a copy of which the ECO had received 
independently from OEA) on which the customer made 
a notation that the items had been received.  Ms. 
Yeung stated that she was not familiar with the 
customer although she believes it is a trading 
company in mainland China.  It is not a frequent 
customer, according to Ms. Yeung.  A google search 
of the customer listed on the invoice (Shenzhen 
Zhaocai Science and Technology Company) reveals 
that this company is an electronics components 
distributor in mainland China.  According to the 
company's web site, Shenzhen Zhaocai specializes 
in end of cycle and hard to find components as 
well as those components that cannot be found on 
the mainland and Hong Kong markets.  The company 
lists a wide range of U.S. brands including Atmel, 
Agilent, Aeroflex, Raytheon and many others. 
 
¶8.  The ECO provided Ms. Yeung with information on 
U.S. export controls applicable to U.S. origin 
items and encouraged Hopesea to become familiar 
with and comply with those rules.  Ms. Yeung 
agreed to review the materials (she was not 
previously aware of U.S. export controls) and 
comply with U.S. export control rules. 
 
¶9.  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 ECO 
recommends that, where practicable, OEA obtain 
from the exporter the applicable ECCN subcategory 
in situations where such subcategory would have an 
impact on the licensing requirements for the 
applicable items that are the subject of the 
check.  In this circumstance, given the business 
practices of Hopesea related to Hong Kong export 
licensing requirements and other factors noted 
above, the ECO recommends that this check be 
classified as Unfavorable.