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Cablegate: Extrancheck: Pre-License Check: Walasey Limited

VZCZCXYZ0316
RR RUEHWEB

DE RUEHHK #0411/01 0660140
ZNR UUUUU ZZH
R 060140Z MAR 08
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 4311
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS HONG KONG 000411

SIPDIS

USDOC FOR 532/OEA/LHINES/ADYSON
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: PRE-LICENSE CHECK: WALASEY LIMITED

REF: A) USDOC 00800 B) D390096

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 pre-license check at Walasey Limited, Room 2403A, 14/F, Nanyang
Plaza, 57 Hung To Road, Kwun Tong, Kowloon, Hong Kong (Walasey
Limited). The purpose of the visit was to determine the suitability
of Walasey Limited be a recipient of sixty analog to digital
converters that are the subject of export license application
D390096. The items (ECCN 3A001) are valued at USD $5,640 and are
controlled for national security (NS) reasons. The license applicant
is Kenet, Incorporated of Woburn, Massachusetts.

3. A Hong Kong Companies Registry check of Walasey Limited reveals
that the company was registered in June 1993. Hong Kong resident
Wu, Yuk Hung and mainland Chinese national Sheng, Shih Yun are
listed as directors. The company's paid-up share capital is the
Hong Kong equivalent of approximately USD 80,000. Further review of
the Hong Kong Companies Registry reveals that a number of Hong Kong
companies are related to Walasey Limited.

4. Companies related to Walasey through director Sheng, Shih Yun:
Mr. Sheng is also a director in the following companies: M2C
Electronic Technology Limited, Electrend Industrial Limited and
Walasey (China) Limited.

5. Companies sharing an address with Walasey Limited: Bright
Concept Trading Limited is collocated with Walasey. It has been in
existence since 2000 and its directors are Hong Kong resident Wong,
King Bor and mainland China national Zhang, Zhi Tong.

6. Mr. Wong, King Bor, director of Bright Concept Trading Limited
is also a director in M2C (Hong Kong) Limited, M2C Electronic
Technology Limited (mentioned above), Walasey Technology Limited,
Well Time Technology Limited and Mega Bright International
Enterprise Limited.

7. Mr. Zhu, Yan Hua (mainland Chinese passport number G00063728) is
a director of Walasey (China) Limited as well as M2C Electronic
Technology Limited, and Well Time Technology Limited (with Mr. Wong,
King Bor).

8. In sum, Walasey Limited is related in one way or another to at
least the following additional companies in Hong Kong: Walasey
(China) Limited, M2C Electronic Technology Limited, Well Time
Technology Limited, Mega Bright International Enterprise Limited,
M2C (Hong Kong) Limited and Electrend Industrial Limited.

9. On February 14, 2008, the ECO and Commercial Assistant, Carrie
Chan visited Walasey Limited and met with Mr. Ricky Law, Deputy
General Manager of Walasey Technology Limited. He stated that
Walasey Limited was established in 1994. It is the distributor and
representative for certain brands of electronic components. It is
primarily an electronic components reseller and has six offices in
mainland China. The Hong Kong office acts as the contact window
between those offices and outside suppliers. This is because many
of the company's employees in mainland China cannot speak English
well and it is also easier to get items through mainland China
customs via Hong Kong. In effect, Walasey Limited acts as a
consolidator and customs broker for items being sent to customers in
mainland China. Mr. Law stated that for some components, Walasey
Limited is the exclusive distributor, while for others it is one of
many (e.g., Kenet Inc.). Walasey Limited's business focus is on
communications components (base stations for SCDMA) and consumer
applications (i.e., web cams and radio controlled clocks).

10. As to the other related companies, Mr. Law provided the
following background at the meeting and by subsequent e-mail:

Walasey Technology Limited: Registered but not active.

Bright Concept Trading Limited: Owned by Mr. Zhang Zhi Tong (99.5
percent) and Mr. Wong, King Bor (0.5 percent). According to Mr.
Law, this company is involved in the electronics trading business.

M2C (Hong Kong) Limited: Registered but not active.

M2C Electronic Technology Limited: This company is a developer,
producer and marketer of business information displays
(www.m2c-electronics.com). During the February 14th visit, Mr. Law
showed the ECO and Commercial Assistant Chan the premises of this
company, located next door to the offices of Walasey Limited.
According to Mr. Law, this company produces and manages the content
display for nationwide information screens in various businesses.
The R and D for this company is conducted in Fuzhou, mainland

China.

Mega Bright International Enterprise Limited: Electronics trading
company.

Well Time Technology Limited: Electronics trading company.

Electrend Industrial Limited: Electronics trading company.

11. As to the specific items in question, Mr. Law stated that there
were two potential customers for these items. The first is Jiangsu
Luyang Electronic Instrument Group Co., Ltd. (www.lvyang.com). By
subsequent e-mail, Mr. Law provided the ECO with an internal order
form from Walasey's Shanghai office and filled out by the company
(located in Jiangsu province). According to Mr. Law, this
customer's project (involving the production of oscilloscopes) is
still in the planning stages and they are only requesting a sample
of the product.

12. According to Mr. Law, the second customer for the applicable
items is Nanjing Nanrui electronic Tech Co., located in Nanjing,
mainland China. According to Mr. Law, this second customer will use
the items in the production of high resolution medical devices.

13. The ECO found Mr. Law to be open and cooperative. His
explanations appeared credible and generally consistent with
information independently obtained by the ECO. At the same time,
ECO is concerned by the large number of collocated and interrelated
companies uncovered during this check and the lack of an apparent
clear delineation between these companies and their business
purposes. Also, aside from the web site for Walasey and M2C, none
of the other companies appears to have any web presence (typical for
many electronics trading firms).

Cunningham

© Scoop Media

 
 
 
 
 
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