VZCZCXYZ0010
RR RUEHWEB

DE RUEHHK #0859/01 1340305
ZNR UUUUU ZZH
R 130305Z MAY 08
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 4844
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS HONG KONG 000859 
 
USDOC FOR 532/OEA/LHINES/SSILVER 
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: NIKKO TECH. 
INDUSTRIAL LTD, HONG KONG 
 
REF: A) USDOC 02559 B) USDOC 02557 C) USDOC 02562 D) USDOC 02561 E) 
USDOC 02560 F) USDOC 02558 G) USDOC 02556 
 
¶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 series of post-shipment verifications (PSVs) at Nikko Tech. 
Industrial Ltd., Hong Kong, Flat 7, 13/F Wah Yiu Ind. Ctr., 30-32 Au 
Pui Wan St., Shatin, Hong Kong (Nikko Tech).  The items in question 
are various high value shipments of industrial lubricating oil 
exported to Nikko Tech on various dates from 2005 to 2008.  The 
exporter classified the items as EAR99.  EAR99 items may be exported 
or reexported to most destinations and to most end-users/end-uses 
worldwide license free.  The exporter was Inland Vacuum Industries 
of Churchville, New York. 
 
¶3. A review of Hong Kong Companies Registry reveals that Nikko Tech 
was registered in 2004 and has paid-up capital totaling the Hong 
Kong equivalent of USD 1.  Its directors are Hong Kong Residents Ip, 
Shui Shuen and Wong, Fung Lin Sally. The Hong Kong Companies 
Registry lists neither individual as a director in any other Hong 
Kong company. 
 
¶4.  According to its website (www.nikkotech.com.hk), the company was 
founded in 2001 and its primary area of business is in sales of 
Printed Circuit Board (PCB) manufacturing equipment and related 
parts and components.  Most of Nikko Tech's customers are located in 
southern China. Nikko Tech also has an affiliate located in 
Shenzhen, mainland China.  Nikko Tech is the authorized distributor 
of March Plasma Systems, Inc. and Sumitomo Heavy Industries, Ltd. 
 
¶5.  On May 8, 2008, ECO, accompanied by Commercial Assistant Carrie 
Chan visited the company at the address note above and met with Ms. 
Sally F.L. Wong, Marketing Manager.  The offices are modest (one 
large room split into several sub-offices) and Ms. Wong was the only 
person present at the company.  Her business card lists a Zhuhai 
address and contact details as well.  According to Ms. Wong, the 
Zhuhai office includes the company's sales and maintenance staff. 
 
¶6.  According to Ms. Wong, Nikko Tech is a trading company that 
deals primarily in PCB manufacturing machinery and related parts and 
equipment.  Its customers are located in mainland China and include 
Multek Hk. Ltd., Viasystems Kalex Printed Circuit board Limited, 
Oriental Printed Circuits Limited and Elec and Eltek Multilayer PCB 
Ltd.  According to Ms. Wong, the lubricating oil that is the subject 
of the PSVs is used in pumps that are part of PCB manufacturing 
machinery.  Those machines are quite expensive (USD 125,000 each) 
and require lubricating oil of a very specific grade and character. 
Nikko Tech sells the underlying machinery and is therefore the 
authorized supplier of the lubricating oil for that machinery. 
Nikko Tech does not sell any of the lubricating oil outside of Hong 
Kong and mainland China. It does not sell the oil to other trading 
companies in Hong Kong or mainland China. Other PCB factories may 
find other, cheaper, alternatives in mainland China but Nikko Tech 
supplies this oil in support of machines it has already sold. 
 
¶7.  When asked about specific shipments, Ms. Wong provided the ECO 
with access to the applicable documentation regarding those 
shipments as detailed below.  The company's records were well 
maintained and ECO was able to see the logbook of shipments for the 
company.  ECO notes that all shipments in that logbook were destined 
to the customers noted in paragraph six above.  Ms. Wong confirmed 
that all shipments for Nikko Tech come first to Nikko Tech's offices 
and are subsequently transferred to customers. 
 
¶8.  Shipment referenced in Reftel A:  Ms. Wong was unable to locate 
this shipment by reference to the date of shipment and items listed 
in Reftel A.  However, a closer review of the Commercial Invoice 
(No. 021049) provided to ECO by OEA reveals that this shipment was 
actually sent to Nikko Tech on or about April 11, 2007 not March 17, 
2008 as listed in Reftel A.  Mr. Wong provided documentation 
confirming two deliveries (one on April 25, 2007 and one on May 25, 
2007) of Halovac 190 to Viasystems Kalex PCB Limited (Viasystems) in 
Hong Kong.  The amounts delivered to Viasystems correspond to the 
amounts delivered to Nikko Tech. 
 
¶9.  Shipment referenced in Reftel B:  According to documentation 
provided by OEA, the U.S. exporter shipped eleven kilograms of 
Fomblin Y25/6 to Nikko Tech in October 2005.  Ms. Wong provided 
documentation confirming delivery of ten kilograms of Fomblin Y25/6 
to Multek Electronics on November 15, 2005.  She further stated that 
the larger order placed with the U.S. exporter had been placed on 
behalf of more than one buyer.  Ms. Wong stated that, given that the 
transaction occurred some time ago, she was unable to locate the 
delivery document for the remaining one kilogram of Fomblin Y25/6. 
 
 
 
ECO also reviewed the underlying purchase order from Multek and 
related Hong Kong import clearance document for this shipment. 
 
¶10.  Shipment referenced in Reftel C:  Ms. Wong provided 
documentation confirming delivery of one five gallon container of 
Halovac 190 to Viasystems in Hong Kong on September 29, 2006.  The 
amounts delivered to Viasystems correspond to the amounts delivered 
to Nikko Tech by the U.S. exporter.  ECO also reviewed the 
underlying purchase order from Viasystems for this shipment and 
related Hong Kong import clearance document for this shipment. 
 
¶11.  Shipment referenced in Reftel D:  According to documentation 
provided by OEA, the U.S. exporter exported five gallons of Fomblin 
Y25/6 and 10 kilograms of Halovac 190 to Nikko Tech on or about 
August 8, 2007.  Ms. Wong provided documentation confirming delivery 
of five gallons of Fombcinoil and ten one kilogram units of Halovac 
190 oil to Viasystems on August 29, 2007. The ECO also reviewed the 
underlying purchase order from Viasystems for this shipment and 
related Hong Kong import clearance document.  ECO notes that Ms. 
Wong stated that the five gallons of Fombcinoil in her delivery note 
corresponds to the item entitled Fomblin Y25/6 in the export 
documentation from the United States. 
 
¶12.  Shipment referenced in Reftel E:  Ms. Wong provided 
documentation confirming delivery of ten gallons of Halovac 190 and 
five gallons of Fomblin Y25/6 to Viasystems. The amounts delivered 
to Viasystems correspond to the amounts delivered to Nikko Tech by 
the U.S. exporter.  ECO also reviewed the underlying purchase order 
from Viasystems for this shipment and related Hong Kong import 
clearance document. 
 
¶13.  Shipment referenced in Reftel F:  Ms. Wong provided 
documentation confirming delivery of 10 gallons of Fomblin Y25/6 oil 
to Viasystems on March 20, 2008.  The amounts delivered to 
Viasystems correspond to the amounts delivered to Nikko Tech by the 
U.S. exporter.  ECO also reviewed the underlying purchase order from 
Viasystems for this shipment and related Hong Kong import clearance 
document. 
 
¶14.  Shipment referenced in Reftel G:  Ms. Wong provided 
documentation confirming delivery of five gallons of Halovac 190 to 
Viasystems on February 22, 2008.  The amounts delivered to 
Viasystems correspond to the amounts delivered to Nikko Tech by the 
U.S. exporter.  ECO also reviewed the underlying purchase order from 
Viasystems for this shipment and related Hong Kong import clearance 
document. 
 
¶15.  ECO found Ms. Wong answers to ECO's question to be credible and 
she provided virtually all applicable documents for review that were 
requested by the ECO.  Based on a review of the underlying documents 
and interview with Ms. Wong, ECO finds no evidence that the items 
that were the subject to these PSVs have been diverted to centrifuge 
or other programs of concern in Iran or elsewhere. 
 
Cunningham