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Cablegate: Extrancheck: Pre-License Check: (A) Hovione Pharmascience

VZCZCXYZ0005
RR RUEHWEB

DE RUEHHK #3010 3470107
ZNR UUUUU ZZH
R 130107Z DEC 07
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 3627
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS HONG KONG 003010

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: (A) HOVIONE PHARMASCIENCE
LTD (B) AUTODIESEL TRADING

REF: A) USDOC 09956 B) D386654

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
pre-license checks at Hovione Pharmascience Ltd., Estrada Coronel
Nicolau de Mesquita, Taipa, Macau (Hovione) and Autodiesel Trading
Corporation, Room 101, L/F, Suit Way Industrial Centre, 29-33 Wing
Hong St., Kowloon, Hong Kong (Autodiesel). The purpose of the visits
was to determine the suitability of Hovione to be an end-user and of
Autodiesel to be an intermediate consignee of an air operated
diaphragm positive displacement pump. The pump is the subject of
export license application D386654 and is classified under Export
Control Classification Number (ECCN) 2B350. It is valued at USD
$6,950 and is controlled for chemical and biological weapons reasons
(CB). The license applicant is Wilden Pump and Engineering Co., of
Grand Terrace, California.

3. Background research reveals that Hovione is a Portuguese-owned
chemical company that produces active pharmaceutical ingredients
(APIs) used in the production of pharmaceuticals worldwide. The
parent company has plants and operations in the United States,
Portugal and Macau (more information at www.hovione.com).

4. Background research reveals that Autodiesel Trading Corporation
is a Hong Kong registered company in existence since 1956.
Autodiesel Trading Corporation is, since 1996, a branch office of
Autodiesel Engineering International Ltd., also located at the
address noted above. Its owner is Mr. Chang, Chung Chien, a Hong
Kong resident.

5. On November 28, 2007, ECO visited Hovione at the address noted
above and met with Daniel Mok, Head of Industrial Engineering and
Mr. David Martins, Head of Purchasing and Export Department. They
provided background on the company consistent with information on
the company's web site. They noted that their customers are large
pharmaceutical companies that use Hovione APIs to produce
pharmaceuticals as well as small biotech companies. They ship their
products to the United States, Europe and Japan. Hovione is
purchasing the pump in question to replace an existing Wilden pump
also purchased from Autodiesel. They require a new pump as their
existing pump is not able to handle current pressure levels in their
facility and consequently leaks during some production cycles.
Autodiesel recommended this pump to Hovione. Mr. Mok and Martins
took the ECO to the production site and showed him the existing pump
where the new pump will be installed. All appears as Messrs. Mok
and Martins describe.

6. On December 7, 2007, ECO met with Mr. Chang, the owner and
General Manager of Autodiesel. Mr. Chang provided background on the
company and on the transaction in question. Autodiesel is a small
trading company that has been in existence for many years. It is a
distributor of diesel engines and pumps. It is a longstanding
distributor for Wilden Pumps and Briggs and Stratton engines. Mr.
Chang is familiar with Hovione as it is a longstanding customer. He
noted that the pumps will be sent through Hong Kong to Macau. He
also provided ECO with copies of all correspondence relating to the
purchase including end-use certification and purchase order. Mr.
Chang was not familiar with Hong Kong trade controls covering the
items though he seemed familiar with U.S. export controls (having
gone through this process before). ECO separately provided a link
to U.S. reexport controls guidance and to the Hong Kong Trade and
Industry Department's strategic controls division.

Cunningham

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