Cablegate: Extrancheck: Post Shipment Verification: Pioneer
DE RUEHHK #2195/01 3400746
ZNR UUUUU ZZH
R 050746Z DEC 08
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 6387
RHMFIUU/HQ BICE WASHINGTON DC
UNCLAS HONG KONG 002195
USDOC FOR 532/OEA/LHINES/ADYSON
USDOC FOR 3132 FOR FCS/OIO REGIONAL DIRECTOR PATRICK SANTILLO
BICE FOR OFFICE OF STRATEGIC INVESTIGATIONS
E.O. 12958: N/A
TAGS: BMGT BEXP HK ETRD ETTC
SUBJECT: EXTRANCHECK: POST SHIPMENT VERIFICATION: PIONEER
ELECTRONICS CO. LTD. AND SPEED ELECTRONICS COMPANY
REF: A) USDOC 6053 B) USDOC 05618
1.Unauthorized disclosure o the information provided below is
prohibited bySection 12C of the Export Administration Act.
2 As per reftels A and B rquests and at the directin of the
Office of Enforcement Analysis (OEA) ofthe USDOC Bureau of Industry
and Security (BIS),Export Control Officer Philip Ankel (ECO)
conduced post shipment-verifications (PSVs) at Speed Electronics
Company, Room 1301-1303, 13/F Blissful Bldg, No 243-247, Des Voeus
Road, Hong Kong (Speed) and Pioneer Electronics Co. Ltd. (Pioneer),
at the same address. ECO has combined these two PSVs into one cable
as the companies are related and collocated.
3. The items in question for the Speed check are 120 electronic
integrated circuits exported to Speed on or about October 12, 2007
and valued at USD 2,160. 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. Separate
documentation provided by OEA shows these items to be classified
under ECCN 3A991 resulting in control for anti-terrorism (AT)
reasons. The exporter was America II Electronics of St. Petersberg,
4. The items in question for the Pioneer check are 1000 GB SDRAM
valued at USD 5,500 and exported to Pioneer on or about April 2,
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 Advanced MP
Technology of San Clemente, California.
5. According to the Hong Kong Companies Registry, Pioneer has been
in existence since 2002. Its paid up share capital is the Hong Kong
equivalent of USD 1250. The Hong Kong Companies Registry lists two
mainland Chinese nationals as directors, namely Li, Xin (Passport
number G22828797) and Xu, Cheng (Passport number G06784219). The
companies registry lists neither director as a director in any other
company in Hong Kong.
6. A review of the Pioneer's web site(www.pioneeric.com) reveals
that Pioneer markets itself as a worldwide distributor of ICs and
electronic components. It claims offices in Hong Kong, Korea and
China. The web site is registered to Shenzhen Kai Xin Da
Electronics Co. at 11A Li Ming Ge Zhong, Hai Li Yuan, Nan Shan,
Shenzhen (phone number 86 755 13600160758)and the contact person is
listed as Li, Xin (presumably one of Pioneer's directors listed
7. Several other companies also appear to be collocated with
Pioneer (aside from Speed, addressed below), including S&G
Accounting and Secretary, Ltd. (S&G). S&G appears to be a company
registration office while other, apparently unrelated, companies use
the Pioneer address as a corporate mail-drop.
8. Speed Electronics does not appear to exist as a corporate entity
in Hong Kong (at least on official corporate records). A company by
that name was dissolved in 2004. The company does not appear to have
a web presence.
9. On October 17, 2008, ECO, accompanied by Commercial Assistant,
Carrie Chan, visited Pioneer and Speed and met with Mr. Ken Chan,
Logistic Specialist for Pioneer. The office of the company is quite
small and ECO noted roughly four staff in six cubicles in this one
room office. Mr. Chan stated that Pioneer is the main company while
Speed is, as he put it, just its purchasing arm. He further
clarified that Speed does not actually exist but that it is used to
keep Pioneer's reputation clear when dealing with new suppliers or
customers. He stated that another company name is used in a similar
fashion, namely Action Electronics. This entity is not registered
but operates at the same address. ECO did not find this explanation
to be credible.
10. Mr. Chan further stated that Ms. Grace Ho owns S&G. She is
also the manager of the Pioneer office in Hong Kong. Mr. Chan
confirmed that S&G provides corporate registration and other related
services. Mr. Chan also stated that Shenzhen Ka Xin Da (the
pioneeric.com domain holder) is the transliteration of Pioneer's
Chinese name. When asked about a Mr. Emerson Zhou, who is listed as
a consignee on another, unrelated, shipment, Mr. Chan stated that
Mr. Zhou is an employee of Pioneer in Shenzhen.
11. Mr. Chan stated that Pioneer has been in operation for
approximately seven years and has four to five employees in Hong
Kong. Its main operations are in mainland China and typical
customers are factories. Mr. Chan stated that he did not know the
end applications of the products that Pioneer sells. He stated that
the salespeople in Shenzhen would have such information.
12. Mr. Chan stated that he was not aware of HK H&Q Electronics
Technology (www.hqelectronicstech.com) or Saga Electronics, Ltd.
Both are located in Hong Kong and their web sites contain several
identical passages in their corporate descriptions as the Pioneer
corporate description. ECO believes these are unrelated companies.
13. As to the specific items that were the subject of the Pioneer
PSV, Mr. Chan stated that they had been transferred to Jennex
Technology in Hong Kong (contact number in Shenzhen of 0755 8357
3221). He stated (and an internet search confirms) that Jennex is
the Hong Kong affiliate of a customs clearance and electronics
trading company based on mainland China (with a Hong Kong presence).
Mr. Chan stated that the items were destined for mainland China but
he was unable to provide any additional information on that point.
14. As to the items that were the subject of the Speed PSV, Mr.
Chan provided documentation showing that these items had been sold
and shipped to Plexus (Xiamen) Co. Limited for use in production of
telecom equipment. Plexus is a worldwide contract manufacturer.
15. Based on the information noted above, ECO believes that both
Speed and Pioneer are unsuitable recipients of U.S. origin
controlled technology. ECO requests that OEA confirm the 3A001
classification of the shipment to Pioneer so that ECO may reach out
to Hong Kong TID concerning a potential violation of Hong Kong's
export control rules in connection with this shipment. ECO suspects
neither Pioneer nor Speed is applying for the required Hong Kong
licenses to ship controlled items through Hong Kong. Finally, ECO
recommends that OEA conduct a thorough review of all shipments to
Speed, Pioneer and Action Electronics.