Cablegate: Extrancheck: Pre-License Check: Supreme

VZCZCXYZ0005
RR RUEHWEB

DE RUEHHK #3749 2620809
ZNR UUUUU ZZH
R 190809Z SEP 06
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 8670
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS HONG KONG 003749

SIPDIS

USDOC FOR 532/OEA/LHINES/DFARROW
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: SUPREME
COMPANY

REF: A) STATE 080771 B) EXP.LIC. D357385 C) 03/29/2005
Hong Kong 01626

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 Export Analysis (OEA) of the USDOC Bureau of
Industry and Security (BIS), Export Control Officer
Philip Ankel (ECO) and Special Agent (SA) John McKenna
conducted a pre-license check at Supreme Company
(Supreme), Room 1814, Park-In Commercial Center, 56
Dundas Street, Mong Kok, Hong Kong. This PLC concerned
100 bayonets valued at USD 7,600 and classified under
ECCN 0A918. ECCN 0A918 items are controlled for crime
control (CC) reasons. The license applicant is Ontario
Knife Company, 26 Empire Street, Franklinville, N.Y.

3. On August 23, 2006 SA McKenna and the ECO visited
Supreme at the address listed above and met with Tania
Chau, Director.

4. Chau stated that he ordered 30 bayonets, not 100 as
listed Reftel A, for sale to collectors. Chau stated
that the bayonets would be placed in his showroom at
the above address (room 1802) and sold to collectors
who visited his showroom. He expected to sell 1-2 of
these items per month. By follow-up e-mail to the ECO,
Mr. Chau stated that Supreme had, in fact, ordered 100
bayonets from Supreme Co. This would appear to provide
Supreme Co. with a four to eight year supply of
bayonets.

5. Chau stated the he understood that the USG placed
licensing restrictions on these items, and as such,
they could not be reexported to China. He provided no
specifics on how Supreme would ensure that no such
reexports occurred.

6. Chau stated that he does not sell items via the
internet, however, an internet search revealed an
extensive listing of items available for purchase over
the internet from Supreme's web site
(Supremeco.com.hk). Some of those items would appear
to fall within EAR control parameters. The ECO
recommends that a review of the web site be conducted.

7. Chau stated that he orders items from U.S.
manufacturers Ontario knife, Colt Steel, United
Cutlery, CRKT, and Black Jack. The majority of his
customers for all of these commodities are collectors.
Mr. Chau indicated that he considers collectors to be
individuals who like to purchase various weapons and
related items for display or recreational purposes.

8. Chau indicated that he has been in business since
1987 and he attends the annual SHOT Show in Las Vegas
in an effort to identify items of interest and to
review the latest line of items for sale within the
industry.

9. Note: Supreme was the subject of a previous
unfavorable PLC described in Reftel C.

10. Consistent with the facts noted above, the ECO
recommends that this check be considered Unfavorable.

Cunningham

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