VZCZCXYZ0000
RR RUEHWEB

DE RUEHHK #2038/01 3090208
ZNR UUUUU ZZH
R 050208Z NOV 09
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 8886
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS HONG KONG 002038 
 
USDOC FOR 532/OEA/LHINES/MCANNER 
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: (FELTON SUCCESS 
LIMITED) BKN GROUP 
 
REF: A) BIS e-mail request dated August 14, 2009 
 
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 Felton Success Limited, Unit 
6, 21/F, Enterprise Square Two, No. 3 Sheung Yuet Rd., Kowloon Bay, 
Kowloon, Hong Kong (Felton). The items in question for this PSV are 
256 CPUs exported to Felton on or about October 31, 2007.  According 
to the exporter, these items are classified under Export Control 
Classification Number (ECCN) 3A991, meaning that they are controlled 
for anti-terrorism reasons and would require a license to Iran.  The 
exporter is MA Labs of San Jose California. 
 
¶3.  According to the Hong Kong Companies Registry, Felton has been 
in existence since August 2008.  Its paid up share capital is the 
Hong Kong equivalent of USD 125,000.  The Hong Kong Companies 
Registry lists BVI company, Rise Sonic Group Limited, as the sole 
shareholder and director.  The registered address of Rise Sonic 
appears to be the address of a range of BVI companies. 
 
¶4.  According to the company's web site (www.Felton.com.hk), Felton 
is a trading company founded in 1993 that specializes in computer 
related component business and focused on CPU and memory 
distribution business.  The company claims to be able to supply a 
wide range of products including those from AMD, Micron, Toshiba, 
IBM, Western Digital and Quantum. 
 
¶5.  It took some time to arrange a visit to Felton.  Eventually, 
Nelson Chow, Account Manager, agreed to meet with the ECO to discuss 
the transaction in question.  On September 4, 2009, ECO and 
Commercial Assistant Carrie Chan visited the company and met with 
Chow.  He explained that Felton is a trading company specializing in 
various computer parts.  He stated that the company has been in 
existence for 14 years (likely under a previous name since the 
current company appears only to have been registered in 2008) and 
has worldwide customers.  When asked how Felton obtains its 
customers, Chow stated that they come from referrals and that the 
company has many long-standing customers.  Chow stated that he knew 
nothing about the director of the company.  He further stated that 
the company has Middle East based customers as well as customers in 
Iran. 
 
¶6.  As to the specific transaction in question, Mr. Chow stated that 
the customer was Sayed Mousavi Trading in Dubai.  He claimed not to 
know about BKN Group (another company linked to this transaction). 
Mr. Chow stated several times that he believed that this customer 
was located in Dubai.  When confronted with e-mail correspondence on 
which he had been copied showing that the customer was in Iran, Mr. 
Chow eventually conceded that the customer was located in Iran.  Mr. 
Chow subsequently stated that Mr. Mousavi of Sayed Mousavi Trading 
had come to Felton headquarters and had done prior business with 
Felton.  Mr. Chow claimed not to be able to find a copy of Mr. 
Mousavi's card.  Mr. Chow further stated that for this particular 
order, Mr. Mousavi had appointed a courier to pick up the items. 
That courier, according to Mr. Chow, had picked up the items as well 
as all corresponding documentation of the order.  As a result, Mr. 
Chow claimed that he had no documentation for this order.  Mr. Chow 
stated that Mr. Mousavi is an infrequent customer (ECO doubts this 
assertion).  In some cases, Felton purchases on behalf of Mousavi 
while in other instances, Mousavi purchases the items and uses 
Felton as a ship to address (as occurred in this instance).  Despite 
repeated requests from ECO, Mr. Chow declined to provide any 
additional information about the company's dealings with Sayed 
Mousavi Trading and/or its affiliated companies. 
 
¶7.  On October 21, 2009, ECO returned again to Felton to meet with 
Mr. Chow.  At this meeting, Mr. Chow stated that BHK Group and Sayed 
Mousavi Trading are all related although Mr. Chow stated that he did 
not know how they were related.  Mr. Chow allowed ECO to look at Mr. 
Mousavi's business card (although he refused to provide a copy). 
Mr. Mahdi Mousavi is listed as a representative of Hitech Computer 
Peripherals, Block 16, No 12 Gilam Street with phone number 
982188942760 and fax 889422483 and a contact e-mail of 
info@hitech-smc.com.  Mr. Chow stated that Felton has a four to five 
year history with Sayed Mousavi Trading.  Mr. Chow stated that Sayed 
Mousavi Trading never issues purchase orders but that orders are 
typically done by phone or e-mail with wire transfers for payment. 
Sayed Mousavi Trading uses APM as its freight forwarder in Hong Kong 
(this is likely APM Global Logistics (Hong Kong) Company Limited, 
16/F, One Kowloon, 1 Wang Yuen Street, Hong Kong). 
 
¶8.  Mr. Chow denied that Sayed Mousavi Trading and/or Mr. Mousavi 
own Felton but he declined to provide ECO with the name of the 
director of Felton (although he stated that he was not of Middle 
 
 
Eastern origin). 
 
¶9.  ECO believes Felton to be a most unsuitable recipient of U.S. 
origin technology.  Mr. Chow was both evasive and untruthful on a 
number of occasions.  In ECO's opinion, Mr. Chow (and Felton more 
generally) is aware of restriction on trade with Iran even if Mr. 
Chow initially denied knowledge of any restrictions.  ECO recommends 
a close review of all shipments to Felton (and its address) as well 
as a review of shipments to APM and its address.