VZCZCXYZ0000
RR RUEHWEB

DE RUEHHK #0227 0350849
ZNR UUUUU ZZH
R 040849Z FEB 08
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 4072
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS HONG KONG 000227 
 
SIPDIS 
 
USDOC FOR 532/OEA/LHINES/MCANNER 
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: POST-SHIPMENT VERIFICATION: HIKARI 
INTERNATIONAL LOGISTICS 
 
REF: A) USDOC 00116 
 
¶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 Hikari International Logistics, 3/F, 
Block D, 4-6 Tsing Tim St., Tsing Yi, Hong Kong (Hikari).  The items 
in question are three shipments containing fiber optic receiver 
modules, lenses, prisms and mirrors, long wave length single mode 
fiber optic transmitter modules and diodes exported to Hikari on or 
about October 31, 2007.  According to OEA, the items are classified 
under Export Control Classification Number (ECCN) 5A991. This ECCN 
is controlled for anti-terrorism (AT) reasons meaning that these 
items require a license to a handful of terrorist sponsoring 
countries and to certain restricted end-users/end-uses. The exporter 
was PD-LD Inc. of Pennington, New Jersey. 
 
¶3. According to the Hong Kong Companies Registry, Hikari has been in 
existence since 2001.  It has the Hong Kong equivalent of USD 1,200 
in share capital.  Hong Kong residents Chen, Ching Chi and Fu, Yuk 
Kwan as well as Hikari International Logistics Limited are listed as 
directors.  According to the Hikari web site 
(www.Hikari-International.com), Hikari is a US-Japanese-Hong Kong 
joint venture.  It specializes in third party logistics services. 
 
¶4.  On January 22, 2008, the ECO, accompanied by Commercial 
Assistant Carrie Chan, visited Hikari and met with Mr. Kai Yiu Chui, 
Project Manager and Ms. Helen Fu, Managing Director.  Ms. Fu stated 
that Hikari in Hong Kong provides primarily hub services to the 
manufacturing facilities in mainland China of U.S., Japanese and 
European multinationals.  Its main business focus is in the 
electronics inputs arena.  In a typical scenario, its international 
clients will arrange for inputs to be stockpiled at Hikari.  Those 
inputs are then relayed to the manufacturing site in mainland China 
(typically Shenzhen) when they are needed based on a "call order" 
from the production facility. 
 
¶5.  With respect to the shipments in question, Mr. Chui provided 
documentation confirming delivery of the items to the Hikari 
Warehouse on November 3, 2007. He provided further documentation 
confirming that the items had been turned over to the end-user, 
Solectron (Shenzhen) Technology Co.  Mr. Chiu stated that, as is 
typically the case, the items were handed over to the Solectron 
appointed shipping company for delivery into Shenzhen.  All 
information provided by Mr. Chiu and Ms. Fu was consistent with 
transaction documentation provided by OEA.  Mr. Chiu and Ms. Fu were 
not familiar with the end-use of the items although they stated that 
Solectron (since acquired by Flextronics) produces 
telecommunications devices in Shenzhen. 
 
¶6.  Ms. Fu stated that this type of logistics arrangement is quite 
common in Hong Kong particularly for electronics manufacturers in 
southern China.  Note:  As in this case, the logistics provider is 
not necessarily familiar with the end-use of the applicable items. 
Ms. Fu stated that logistics companies often have as clients the 
Hong Kong offices of mainland Chinese companies.  Mr. Chiu stated 
that, from time to time, Solectron (now Flextronics) provides Hikari 
export controls training.  Also, when the shipping documents 
indicate that a U.S. license is required, Hikari obtains the 
applicable Hong Kong import/reexport license(s). 
 
Cunningham