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Cablegate: Extrancheck: Post Shipment Verification: Scitop Instrument

VZCZCXYZ0001
RR RUEHWEB

DE RUEHHK #3068/01 3540740
ZNR UUUUU ZZH
R 200740Z DEC 07
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 3707
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS HONG KONG 003068

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: POST SHIPMENT VERIFICATION: SCITOP INSTRUMENT
CO.

REF: A) USDOC 07857 B) D369652 C) D370796 D)D378078

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 post shipment verification (PSV) at Scitop Instrumentation Co,
Unit 2, 28/F, Kwong Kin Trade Centre, No. 5 Kin Fat St., New
Territories, Hong Kong. The items in question are masks, glove boxes
and valves exported to Scitop Instrumentation Co. on or about April
21, 2007, March 24, 2007 and July 28, 2007. These items are
classified under Export Control Classification Number (ECCN) 2B350
and are controlled for chemical and biological weapons reasons (CB).
The exporter was Cole Parmer Instrument Company of Vernon Hills,
Illinois.

3. Background research reveals that Scitop Instrumentation Co.
exists in Hong Kong as Scitop Systems Limited (Scitop Systems).
That company was registered in February 2003. Hong Kong residents,
Lee, Chi Keung, Leung, Tak Yui and Wong, Yuk Cheung are listed as
directors. The company has the Hong Kong equivalent of USD 1,000 in
paid up share capital.

4. Scitop Systems director, Lee, Chi Keung is also a director in
Right Products Trading Limited (Right Products). That company was
established in 2002 and has the Hong Kong equivalent of less than
one USD in paid up share capital. Besides Mr. Lee, Hong Kong
resident, Lock, Man Pan is also listed as a director of Right
Products.

5. Scitop Systems director, Wong, Yuk Cheung, is also a director of
Trade International Limited (also registered in February 2003) along
with mainland Chinese citizen Yang, Yan Bin. Trade International
Limited has the same registered address as Scitop Systems. The
paid-up share capital of Trade International Limited is the Hong
Kong equivalent of USD 300.

6. A review of Scitop Systems's web site (www.scitop.com) reveals
that Scitop Systems is a distributor of a range of Cole Parmer and
other instruments including items in the forensics/law enforcement
arena as well as biological and biomedical products. The site lists
several offices in mainland China although some links to those
locations are not operational. The link listing Scitop Systems's
office in Shenzhen links to a site for Right Products Trading
Limited (with e-mail contact listed as www.rightproducts.com.hk).

7. On September 12, 2007, the ECO visited Scitop Systems at the
Kwon Kin Trade Center address listed above and met with Mr. Andy
Wong (Wong, Yuk Cheung), one of the directors of the company. His
business card lists subsidiary companies as On Tech Winfull Company
Ltd. (Beijing), Scitop Instrument Company Ltd. (Guangzhou) and Right
Products Company Ltd. (Shenzhen) as well as a sales office in
Shanghai. Mr. Wong stated Scitop Systems is a group of companies
that trades filters, thermometers and testing equipment acquired
from the U.S., U.K., and France. Mr. Wong stated that for some
companies, Scitop Systems is the authorized distributor (Cole Parmer
being one of those) while for other companies it is an authorized
dealer. The company also operates using agents that bring it
business while in other situations the customer comes directly to
it. The company has been in existence for six years and its
facilities include an office and a warehouse. Mr. Wong stated that
the offices in Shenzhen and Guangzhou are affiliated with the Hong
Kong operation but he is unclear as to their ownership structure.
Scitop Systems has approximately USD 2 million in annual turnover.


8. As to the specific transactions in question, Mr. Wong stated
that Cole Parmer has stated to him that it may decline future
licensed orders below a certain dollar threshold in light of the
compliance costs associated with such orders. He expects to receive
that dollar figure soon. For transactions where a license is
required, Mr. Wong stated that he provides Cole Parmer with the
standard end-user/end-use information requested by Cole Parmer.

9. D369652: As to this transaction involving an order by the Hong
Kong Health Laboratory, Mr. Wong provided documentation confirming
the order and receipt of the Captair Pyramid Glove Bag by the Hong
Kong Government.

10. D378078: As to this transaction, Mr. Wong stated that the
needle valves had been delivered to Right Products for resale to the
Hong Kong University of Science and Technology. He provided a
delivery document confirming delivery to Right Products. He stated
that Scitop Systems has a longstanding and good relationship with
Right Products. He did not mention the shared directorship between
Right Products and Scitop Systems. When asked during a subsequent


phone conversation whether the items had been sent to Right Products
in Shenzhen, Mr. Wong stated that they had. He stated that Right
Products had informed him that the items were destined for the
University of Science and Technology. When the ECO inquired why a
product destined for a Hong Kong University would be shipped to
Shenzhen, Mr. Wong stated that often researchers come from the
mainland to work in Hong Kong universities. During a subsequent
telephone conversation, Mr. Wong stated that the final destination
of the products was not entirely clear to him.

11. D369652: As to this transaction involving protective masks,
Mr. Wong stated at the September meeting that this transaction
involved a P.O. from 2006. He stated that this P.O. was with the
auditors who were completing the company's tax returns and he would
again have access to them in late October. On December 9, 2007, Mr.
Wong e-mailed a copy of the invoice in question as well as e-mail
correspondence between Scitop Instruments and an e-mail address of
World Ways Co. (HK) Ltd. (Guangzhou@worldways.com.cn). In that
e-mail, the World Ways representative (presumably from that
company's Guangzhou office) stated that the end-user for the items
is Agricultural Tests & Supervises Institution of Dong Guan. That
entity's business is inspection and the end-use is listed as
protecting. Mr. Wong provided an additional invoice from Scitop
Systems addressed to Guangzhou Gilson, which includes the applicable
licensed items. Despite a number of requests, Mr. Wong did not
provide delivery documentation confirming actual delivery of the
items.

12. World Ways has a Hong Kong affiliated company named World Ways
Company (HongKong) Limited. It was registered in 1969 and has the
Hong Kong equivalent of USD 200,000 in paid-up capital. Hong Kong
residents Chou, Kin Wah, Chou Sun Wha Simon and Wong, Kwong Yung are
listed as directors. The web site of World Ways states that it is a
distributor of Gilson products.

13. ECO recommends that OEA conduct a review of all shipments to
Scitop Systems, Right Products and World Ways Company (HongKong)
Limited as well as all shipments to the addresses of those
companies.

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