VZCZCXYZ0000
RR RUEHWEB

DE RUEHHK #0319 0540008
ZNR UUUUU ZZH
R 230008Z FEB 09
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 6931
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS HONG KONG 000319 
 
USDOC FOR 532/OEA/LHINES/ADYSON 
USDOC FOR 3132 FOR FCS/OIO REGIONAL DIRECTOR PATRICK SANTILLO 
BICE FOR OFFICE OF STRATEGIC INVESTIGATIONS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: BMGT BEXP HK ETRD ETTC
SUBJECT: EXTRANCHECK: POST SHIPMENT VERIFICATION: KAI'S TECHNOLOGY 
DEVELOPMENT LIMITED 
 
REF: A) USDOC 00129 
 
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 Kai's Technology Development 
Limited, Unit 2506, 25/F, Skyline Tower, 39 Wang Kwong Road, Hong 
Kong (Kai's). The items in question for this PSV are various 
electronic ICs exported to Kai's on or about August 27, 2008.  On 
the applicable shippers export declaration (SED), these items are 
classified under export control classification number (ECCN) 3A001 
and, if properly classified, would be controlled for national 
security (NS) reasons.  The exporter was America II Electronics of 
St. Petersberg, Florida. 
 
¶3.  According to the Hong Kong Companies Registry, Kai's has been in 
existence since 2004.  Its paid up share capital is the Hong Kong 
equivalent of USD 250.  The Hong Kong Companies Registry lists two 
Hong Kong residents as directors, namely Cheung, Fei Pang and Ho, 
Hon Kai. 
 
¶4.  A review of the company's web site (www.kais-tech.com) reveals 
that Kai's specializes in the distribution of electronic components. 
 It is an affiliate of Winstep Technology Limited.  Winstep is a 
manufacturer of DVDR, CDR, DVD players and other similar electronic 
devices.  The company has factories in mainland China and Hong 
Kong. 
 
¶5.  On February 13, 2009, ECO accompanied by Commercial Assistant, 
Carrie Chan, visited Kai's and met with Joanne Wong, Purchasing 
Manager.  She stated that Kai's is a sourcing company for companies 
in the United States and Europe.  In particular, Kai's sources 
electronics in China for shipment to companies in those 
destinations.  Ms. Wong stated that direct customers are typically 
other trading companies and Kai's is not generally aware of the 
final end-user of its products.  When asked, Ms. Wong appeared 
unaware of Hong Kong licensing requirements for certain ICs (such as 
this one). 
 
¶6.  As to the specific shipment in question, Ms. Wong stated that it 
was a return from America II Electronics.  In particular, America 
II's customer had returned them as they were not in good working 
order.  Ms. Wong provided the relevant documentation of the return. 
 
¶7.  Ms. Wong was open and cooperative during the meeting and 
answered ECO's questions without hesitation.  ECO found Ms. Wong's 
answers to be credible.  ECO provided Ms. Wong with information 
about U.S. export controls. 
 
¶8.  Based on the information noted above, ECO recommends a review of 
past shipments to Kai's as it is not apparent that Kai's has taken 
into account U.S. or Hong Kong export controls in its past 
activities.  Likewise, while ECO does not have specific evidence of 
any actual violations of the Export Administration Regulations by 
Kai's, based on information obtained during this PSV, ECO recommends 
that future shipments of controlled commodities to Kai's should be 
closely reviewed.