Cablegate: Extrancheck: Post Shipment Verification: Corezing

VZCZCXYZ0000
RR RUEHWEB

DE RUEHHK #2247/01 3440210
ZNR UUUUU ZZH
R 100210Z DEC 09
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 9126
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS HONG KONG 002247

USDOC FOR 532/OEA/LHINES
USDOC FOR 3132 FOR FCS/OIO REGIONAL DIRECTOR PATRICK SANTILLO
BICE FOR OFFICE OF STRATEGIC INVESTIGATIONS

SIPDIS

E.O. 12958: N/A
TAGS: BMGT BEXP HK ETRD ETTC
SUBJECT: EXTRANCHECK: POST SHIPMENT VERIFICATION: COREZING
INTERNATIONAL HK CO., LTD.

REF: A) EUC request 01210082 B) EUC request 01210083 C) EUC request
01210088

1. Unauthorized disclosure of the information provided below is
prohibited by Section 12C of the Export Administration Act.

2. As per reftels A-C requests 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
three post shipment verifications (PSVs) of shipments destined to
Corezing International Co., Ltd., G/F, No. 89 Fuyan Street, Kwun
Tong, Hong Kong. The items in question for these PSVs are various
semiconductors exported to Corezing on or about June 7, 2008, June
27, 2008 and March 28, 2008. For the shipment referenced in reftel
C, the items are classified under Export Control Classification
Number (ECCN) 3A001b2d, meaning that they are controlled for
national security reasons and would require a license for
export/reexport to mainland China but may be shipped license free if
for use in Hong Kong. The exporter for that shipment was Antennas
and Components of Andover Massachusetts. The remaining two
shipments are classified by the exporter as EAR99 and, if properly
classified, can be shipped to virtually all destinations and end
users worldwide except sanctioned countries and restricted entities
and individuals. The exporter for these shipments was QPhotonics
LLC, of Ann Arbor, Michigan.

3. According to the Hong Kong Companies Registry, Corezing has been
in existence since July 2007. Its paid up share capital is the Hong
Kong equivalent of USD 65,000. The Hong Kong Companies Registry
lists Luo, Jie (with Mainland passport number 441481198206082304)
and Zhou, Zhenyong (with Mainland passport number
441900198910161558) as directors. Corezing in Hong Kong is related
to a range of Hong Kong and Singapore based companies. Those
companies are the subject of ongoing investigations and a recently
published temporary denial order (TDO). That TDO restricts the
ability of those companies to acquire products that are subject to
the Export Administration Regulations (EAR).

4. Background research on the address of Corezing (referenced
above) revealed that it is the location of a RMB currency exchange
booth later determined to be Chou Kee Money Exchange Co., an
individual proprietorship established in October 2007. The owner of
the company is Mr. Lai, Cho Hing, with Hong Kong ID card #H3359761
and a residential/business address of Flat/Rm B, 6/F, Lee Fung Bldg,
315-319 Queen's Rd. Central, Sheung Wan, Hong Kong. Chou Kee's
phone number is (852) 2338-2916 and fax is (852) 2338 2917.

5. Prior to the meeting, Foreign Commercial Service (FCS)
Commercial Assistant Carrie Chan received confirmation from Chow Kee
contact person Ms. Lin that Chou Kee had received the three
shipments referenced above. Ms. Lin claimed to have no records
associated with the shipments and stated that the shipments had been
received as a favor for a friend. Ms. Lin later clarified that the
person was not a close friend and that Chou Kee no longer accepted
shipments on behalf of this person. That person was identified as a
Ms. Luo with telephone number (86) 135 105 03709 who represents
Corezing Shenzhen.

6. During an October 16, 2009, meeting, Ms. Lin stated (again) that
she had received the three shipments in question and had done this
service on behalf of a friend. That friend was identified as Ms.
Luo, Jie. Ms. Lin believes that Ms. Luo may live in Shenzhen.

7. According to Mr. Chou (who stated that he is the boss of Chou
Kee), Ms. Luo only came when there were packages coming. Ms. Luo
knew when the packages arrived and those packages never stayed at
the premises of Chou Kee overnight. Mr. Chou stated that he
believes the items were destined for mainland China since that is
where Ms. Luo is from. Mr. Chou stated that Chou Kee no longer
accepts packages on behalf of Ms. Luo. He claimed that they are too
busy to assist Ms. Luo. Mr. Chou stated that Ms. Luo did not pay
them. Mr. Chou further stated that Ms. Luo took all documentation
regarding the shipments with her when she picked up the packages.
Mr. Chou claims that Chou Kee has no documentation regarding the
shipments.

8. Mr. Chou stated that shipments arrived once every two to three
months until they stopped over one year ago. Sometimes those
shipments came for Corezing and sometimes they were addressed to
Chou Kee. Mr. Chou stated that he did not know what was in the
packages although at one point he stated that he had heard it was
electronics. When ECO stated that one package contained items
valued at USD 100,000, Mr. Chou appeared genuinely surprised.

9. When asked about their relationship with Ms. Luo, Mr. Chou and
Ms. Lin stated that Ms. Luo is a neighbor of their family in
Shenzhen. Mr. Chou and Ms. Lin both claimed not to know where Ms.
Luo lives. ECO believes Mr. Chou and Ms. Lin's statements

minimizing their relationship with Ms. Luo are not credible.

10. By e-mail, Ms. Luo stated that she was unavailable to meet with
the ECO as she travels extensively in mainland China and was
therefore unable to come to Hong Kong. Given Ms. Luo's past travels
to Hong Kong and her apparent residence in Shenzhen, ECO does not
find Ms. Luo's statements that she is unable to meet to be credible.

11. Ms. Luo provided some information by e-mail concerning the
shipments. As to the shipment referenced in reftel C (ITN:
20080326057744), Ms. Luo stated that she was unable to find any
information about this shipment (this is the more highly controlled
shipment). As to the shipments referenced in reftels A and B (ITN
20080606051060 and 20080626029522), Ms. Luo stated that these items
were destined for Sichuan Chengdu LingShen Co for use in laser
medical equipment. Ms. Luo also provided by e-mail a purported
purchase order for these two transactions. That purchase contract
does not include an address or telephone number for the customer
(ECO was unable to find any web reference to this company). The
purchase order also does not include any payment terms nor does it
include any signatures. For these and other reasons, ECO does not
believe this purchase order to be a legitimate document.

12. ECO believes Corezing to be a unsuitable recipient of U.S.
origin technology. ECO recommends a close review of all shipments
to Corezing and Chow Kee (and Chow Kee's address).

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