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Cablegate: Extrancheck: Post Shipment Verification:

VZCZCXYZ0001
RR RUEHWEB

DE RUEHHK #4550/01 3280309
ZNR UUUUU ZZH
R 240309Z NOV 06
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 9569
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS HONG KONG 004550

SIPDIS

USDOC FOR 532/OEA/LHINES/DFARROW
USDOC FOR 3132/FCS/OIO REGIONAL DIRECTOR WILLIAM ZARIT
BICE FOR OFFICE OF STRATEGIC INVESTIGATIONS

SIPDIS

E.O. 12958: N/A
TAGS: BMGT BEXP HK ETTC
SUBJECT: EXTRANCHECK: POST SHIPMENT VERIFICATION:
HANGLI INTERNATIONAL HOLDINGS

REF: A) USDOC 04721

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 Bureau of
Industry and Security (BIS), Export Control Officer
(ECO) Philip Ankel conducted a post shipment
verification (PSV) at Hangli International Holdings
(Hangli) on November 9, 2006. This PSV concerned a
solid state recorder system DSRS 400B exported by
Ampex Data Systems of Redwood City, California
(Ampex), classified as 7A994 and valued at $295,214.
This 7A994 item is most likely controlled only for
anti-terrorism (AT) reasons.

3. An extract from the Hong Kong Companies Registry
provides that Hangli has been registered as a company
in Hong Kong since May 1996. The registered address
matches the address where the check was conducted.
Hangli's Hong Kong corporate registration lists one
director by Chinese passport number and without Hong
Kong identification card number (PRC national Ai Ping
Song). One director is listed by reference to a Hong
Kong I.D. card number(Ping Sung).

4. On November 9, 2006, the ECO visited Hangli at
Room 901, Keen Hung Commercial Building, 80 Queen's
Road East, Hong Kong and met with Ping Sung, Director.
Ms. Sung noted that Hangli had recently moved from the
location listed as Hangli's address in Reftel A
because rents had increased substantially at that
location. The ECO walked by the former offices and a
new tenant is now at that location. The current
Hangli office is quite modest (one large room). A
meeting with Ms. Sung had been requested in early
October but delayed for some time as Ms. Sung had been
on travel visiting Ampex in the United States as well
as in Zhuhai, China for the Zhuhai air show.

5. Ms. Sung was open and cooperative during the PSV.
Ms. Sung stated that Hangli is a trading company with
offices in Zhuhai, mainland China and Hong Kong. Ms.
Sung showed the ECO a certificate stating that Hangli
is the exclusive distributor for Ampex products in
Hong Kong and China. Ms. Sung stated that Hangli is
likewise a distributor for U.S. companies Herley
(Herley.com) and Orbit. Promotional material provided
by Ms. Sung states that Hangli can provide a complete
set of software and hardware devices utilized in
manufacturing, scientific research and testing by
civilian or military manufacturers as well as research
institutes in aviation, aerospace, ship building,
vehicles and oil prospecting. The cover of the
promotional materials includes a military helicopter
and fighter aircraft (as well as a civilian airliner).
When asked by the ECO whether Hangli's customers
include the military, Ms. Sung stressed that the item
that is subject of the check is used only for testing
purposes.

6. In reference to the transaction that was the
subject of the check, Ms. Sung provided copies of two
airway bills. The first airway bill referenced the
shipment from Ampex to Hangli. The second, dated July
21, 2006, referenced the onward shipment of the item
to Shenyang Aircrafts Industry Group, No. 1 Lingbei
Street, P.O.328-27, Shenyang China. A web search
reveals that Shenyang Aircraft Corporation produces,
among a wide range of items, Chinese fighter aircraft,
but also produces parts for Boeing planes pursuant to
agreements between Shenyang Aircraft Corporation and
Boeing.

7. The items in question were classified by the
exporter as 7A994 and could therefore, absent EPCI
concerns or misclassification, be exported or
reexported to China. BIS may wish to reach out to the
exporter to determine why it chose to list Hangli as
the ultimate consignee and Hong Kong as the country of
ultimate destination when the underlying Ampex
Purchase Contract lists the end-user as Shenyang
Aircraft Corporation located in mainland China.

8. It is apparent to the ECO that Hangli is a trading
company that does not engage in production or


manufacturing of any kind. Ms. Sung was open and
cooperative and her answers were consistent with the
information in documents provided by BIS. Therefore,
in accordance with guidance on reporting of PSVs where
the items cannot be physically inspected, the ECO
recommends that this PSV be classified as Limited.
Cunningham

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