VZCZCXYZ0000
RR RUEHWEB

DE RUEHHK #0314/01 0550702
ZNR UUUUU ZZH
R 240702Z FEB 10
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 9699
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS HONG KONG 000314 
 
USDOC FOR 532/OEA/ 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: ON GRACE 
TECHNOLOGIES 
 
REF: A) BIS e-mail request 01210068 dated September 9, 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) attempted 
to conduct a post shipment verification (PSV) at On Grace 
Technologies, Limited, Rm 201, Hi-Tech Centre, 9 Choi Yuen Road, 
Hong Kong (On Grace).  The items in question for this PSV are 
various electronic components exported to Secom Telecom (Hong Kong) 
Ltd., Unit 1701-2, Apec Plaza, 49 Hoi Yuen Road, Hong Kong (Secom) 
but destined for On Grace.  The exporter has classified these items 
under Export Control Classification Number (ECCN) 3A001a2c.  This 
ECCN is controlled for national security (NS) reasons and is 
eligible for shipment to Hong Kong license free but would, in 
virtually all circumstances, require a license for shipment to 
mainland China. The exporter is Actel of Mountain View, California. 
 
¶3.  Initial efforts to contact On Grace were unsuccessful.  As a 
result, ECO elected to pursue a meeting with Secom.  According to 
the Hong Kong Companies Registry, Secom has been in existence since 
¶1997.  It has the Hong Kong equivalent of USD 1250 in share capital. 
 Mainland nationals Xiao, Qing and Zeng, Qiang (with G24813200 and 
G20968633 passport numbers) are listed as the company's directors. 
 
¶4.  Background research on the internet reveals that Secom markets 
itself as a distributor of electronic components and test and 
measurement instruments (www.secomtel.com).  The company web site 
lists an office in Hong Kong as well as multiple offices in various 
cities throughout mainland China. 
 
¶5.  On December 22, 2009, ECO and Commercial Assistant Carrie Chan 
visited the company and met with Mr. Ricky Ng, Administration 
Supervisor.  Mr. Ng stated that Secom is a distributor of components 
and testing instruments.  It is funded from mainland China.  End 
users for its products are typically OEMs and ODMs but Secom also 
sells to other resellers.  Mr. Ng stated that Secom avoids military 
grade products to avoid export control problems.  He further noted 
that Secom requires end user statements from trading company 
customers to protect itself against its products being shipped to 
embargoed destinations. Mr. Ng stated that Secom applies for Hong 
Kong strategic trade licenses when required. 
 
¶6.  As to the specific transaction in question, Mr. Ng stated that 
the buyer was On Grace.  On Grace was a regulator customer but Mr. 
Ng stated that he does not know what they do and that they are no 
longer a Secom customer.  Mr. Ng noted that the transaction in 
question was an unusual one since it was a very high value and 
controlled item.  Secom's Shenzhen office was responsible for the 
sale but as far as Mr. Ng knows, On Grace is a Hong Kong company. 
Mr. Ng stated that the salesperson responsible for the On Grace 
account had left the company.  He also stated that Secom was unable 
to find the documents for this order since the company had recently 
moved and some documents had been lost during that move (he noted 
also that the transaction was quite old - 2006). Later, Mr. Ng was 
also to provide (by e-mail) On Grace's end user statement stating 
that the items it procured from Secom would not be used for military 
or WMD purposes.  ECO provided Mr. Ng with information about export 
controls including a BIS brochure on reexport controls as well as 
links to relevant provisions of the BIS web site. 
 
¶7.  FCS Commercial Assistant Carrie Chan attempted, on several 
occasions, to arrange a meeting with On Grace.  On Grace 
representatives stated that the responsible person for this order is 
no longer with the company.  In addition, the company no longer has 
any documentation on the order.  ECO is continuing to attempt to 
schedule a meeting and will report any significant information 
obtained from On Grace by separate correspondence. 
 
¶8.  According to the Hong Kong Companies Registry, On Grace has been 
in existence since 2001.  It has the equivalent of USD 1 in share 
capital.  Hong Kong residents Kwan, Pak Chun and Pon, Chi Ying are 
listed as directors with corresponding HK ID #s G122825 and 
D556430).  Director Kwan, Pak Chun is also a director in the 
following companies:  Aceco Electronics (www.aceco.cn), Gobiz 
Electronics Limited (www.gobiz.com.hk), New Glory Industries 
Limited, Novacom Technology Limited, and Smartway Electronics (HK) 
Limited. 
 
¶9.  ECO recommends a close review of all shipments to Secom, On 
Grace and the other related companies referenced herein.  While ECO 
cannot make a definitive determination on this point, ECO suspects 
that Secom did not obtain the required Hong Kong import license for 
this shipment.  In addition, it is problematic that neither Secom 
nor On Grace were able to find documentation for this particular 
order nor were they able to provide any detail on the end user or 
 
 
end use to which these items were put.  In light of the apparent 
controlled nature of these items, ECO recommends that this EUC be 
considered unfavorable.