[Federal Register Volume 62, Number 157 (Thursday, August 14, 1997)]
[Notices]
[Pages 43503-43504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21453]


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DEPARTMENT OF COMMERCE

Bureau of Export Administration


Decision and Order

    In the Matter of: Ian Ace, with addresses at 4 Mimosa Way, 
Pinelands, South Africa, A. Rosenthal (PTY) Ltd., P.O. Box 3721, 13 
Loop Street, Cape Town, South Africa, and A. Rosenthal (PTY) Ltd., 
P.O. Box 44198, 65 7th Street, Denmyr Building, 2104 Linden, South 
Africa, Respondent.

Decision and Order

    On November 27, 1995, the Office of Export Enforcement, Bureau of 
Export Administration, United States Department of Commerce 
(hereinafter ``BXA''), issued a charging letter initiating an 
administrative proceeding against Ian Ace. The charging letter alleged 
that Ian Ace committed seven violations of the Export Administration 
Regulations (currently codified at 15 C.F.R. parts 730-774 (1997)) 
(hereinafter the ``Regulations''),\1\ issued pursuant to the Export 
Administration Act of 1979, as amended (50 U.S.C. app. sections 2401-
2420) (hereinafter the ``Act'').\2\
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    \1\ The violations at issue occurred between mid-1990 and early 
1992. The Regulations governing those violations are found in the 
1990, 1991, and 1992 versions of the Code of Federal Regulations (15 
C.F.R. parts 768-799 (1990, 1991, and 1992)) and are referred to 
hereinafter as the former Regulations. Since that time, the 
Regulations have been reorganized and restructured; the restructured 
Regulations, currently codified at 15 C.F.R. Parts 730-774 (1997), 
establish the procedures that apply to the matters set forth in this 
Decision and Order.
    \2\ The Act expired on August 20, 1994. Executive Order 12924 (3 
C.F.R. 1994 Comp. 917 (1995)), extended by Presidential Notices of 
August 15, 1995 (3 C.F.R. 1995 Comp. 501 (1996)) and August 14, 1996 
(3 C.F.R., 1996 Comp. 298 (1997)), continued the Regulations in 
effect under the International Emergency Economic Powers Act 
(currently codified at 50 U.S.C. 1701-1706).
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    Specifically, the charging letter alleged that, between mid-1990 
and early 1992, Ace, manager of A. Rosenthal (PTY) Ltd., Cape Town, 
South Africa, conspired with James L. Stephens, president and co-owner 
of Weisser's Sporting Goods, National City, California, and Karl 
Cording, co-owner and managing director of A. Rosenthal (PTY) Ltd., 
Windhoek, Namibia, to export and, on two separate occasions, actually 
exported U.S.-origin shotguns, with barrel lengths of 18 inches and 
over, to Namibia and South Africa, without applying for and obtaining 
from the U.S. Department of Commerce the validated export licenses Ace 
knew or had reason to know were required under the Act and Regulations. 
In addition, BXA alleged that, in furtherance of the conspiracy, and in 
connection with each of those exports, Ace made false or misleading 
representations of material fact to a U.S. Government Agency in 
connection with the preparation, submission, or use of export control 
documents. BXA alleged that, in so doing, Ace committed one violation 
of Section 787.3(b), two violations of Section 787.4(a), two violations 
of Section 787.5(a), and two violations of Section 787.6 of the former 
Regulations, for a total of seven violations of the former Regulations.
    BXA issued a charging letter to Ace at his residential address in 
Pinelands, South Africa, and at his business address in Linden, South 
Africa. BXA has presented evidence that Ace was served with notice of 
issuance of the charging letter at his Linden, South Africa, business 
address on December 9, 1995.\3\ Ace failed to answer the charging 
letter. Thus, on June 26, 1997, pursuant to Section 766.7 of the 
Regulations, BXA moved that the Administrative Law Judge find that 
facts to be as alleged in the charging letter and render a Recommended 
Decision and Order.
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    \3\ The copy of the charging letter addressed to Ace at his 
residential address was returned to BXA during April 1996. (It had 
been marked by South African postal authorities as ``Unclaimed''.) 
On April 24, 1996, BXA sent a copy of the November 27, 1995 charging 
letter to Ace at a second business address in Cape Town, South 
Africa. Ace received this copy of the charging letter on June 13, 
1996.
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    Following BXA's motion, on July 8, 1997, Chief Administrative Law 
Judge Joseph A. Angel issued a Recommended Decision and Default Order 
in which he found the facts to be as alleged in the charging letter. He 
concluded that those facts constituted violations of the Act and 
Regulations. The Administrative Law Judge also concurred with BXA's 
recommendation that the appropriate penalty to be imposed for these 
violations is a denial, for a period of 20 years, of all of Act's 
export privileges. As provided by Section 766.22(a) of the Regulations, 
the Administrative Law Judge referred the Recommended Decision and 
Order to me for final action.
    Based on my review of the entire record, I affirm the findings of 
fact and conclusions of law in the Recommended Decision and Order of 
the Administrative Law Judge. I believe that the Administrative Law 
Judge's recommended denial of export privileges for 20 years is 
appropriate. This case is aggravated by the fact that Ace violated 
export controls that were designed to express U.S. abhorrence with 
apartheid as then practiced in South Africa. These violations were 
serious and undetermined important U.S. foreign policy interests. A 
lengthy period of denial will help keep U.S.-origin items out of his 
hands and make future violations less likely. Finally, this penalty is, 
as the Administrative Law Judge explained, consistent with the 
penalties received by the other participants in these violations.
    Accordingly, it is therefore ordered, First, that for a period of 
20 years from the date of this Order, Ian Ace, with the following 
addresses, 4 Mimosa Way, Pinelands, South Africa; A. Rosenthal (PTY) 
Ltd., P.O. Box 3721, 13 Loop Street, Cape Town, South Africa; and A. 
Rosenthal (PTY) Ltd., P.O. Box 44198, 65 7th Street, Denmyr Building, 
2104 Linden, South Africa, may not, directly or indirectly, participate 
in any way in any transaction involving any commodity, software or 
technology (hereinafter collectively referred to as ``item'') exported 
or to be exported from the United States that is subject to the 
Regulations, or in any other activity subject to the Regulations, 
including, but not limited to:
    A. Applying for, obtaining, or using any license, License 
Exception, or export control document;
    B. Carrying on negotiations concerning, or ordering, buying, 
receiving, using, selling, delivering, storing, disposing of, 
forwarding, transporting, financing, or otherwise servicing in any way, 
any transaction involving any item exported or to be exported from the 
United States that is subject to the Regulations, or in any other 
activity subject to the Regulations; or
    C. Benefiting in any way from any transaction involving any item 
exported or to be exported from the United States that is subject to 
the Regulations, or in any other activity subject to the Regulations.

[[Page 43504]]

    Second, that no person may, directly or indirectly, do any of the 
following:
    A. Export or reexport to or on behalf of the denied person any item 
subject to the Regulations;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by a denied person of the ownership, possession, or control 
of any item subject to the Regulations that has been or will be 
exported from the United States, including financing or other support 
activities related to a transaction whereby a denied person acquires or 
attempts to acquire such ownership, possession or control;
    C. Take any action to acquire from or to facilitate the acquisition 
or attempted acquisition from the denied person of any item subject to 
the Regulations that has been exported from the United States;
    D. Obtain from the denied person in the United States any item 
subject to the Regulations with knowledge or reason to know that the 
item will be, or is intended to be, exported from the United States; or
    E. Engage in any transaction to service any item subject to the 
Regulations that has been or will be exported from the United States 
and that is owned, possessed or controlled by a denied person, or 
service any item, of whatever origin, that is owned, possessed or 
controlled by a denied person if such service involves the use of any 
item subject to the Regulations that has been or will be exported from 
the United States. For purposes of this paragraph, servicing means 
installation, maintenance, repair, modification or testing.
    Third, that after notice and opportunity for comment as provided in 
Sec. 766.23 of the Regulations, any person, firm, corporation, or 
business organization related to the denied person by affiliation, 
ownership, control, or position of responsibility in the conduct of 
trade or related services may also be made subject to the provisions of 
this Order.
    Fourth, that this Order does not prohibit any export, reexport, or 
other transaction subject to the Regulations where the only items 
involved that are subject to the Regulations are the foreign-produced 
direct product of U.S.-origin technology.
    Fifth, that a copy of this Order shall be served on Ace and BXA, 
and shall be published in the Federal Register.
    This Order, which constitutes final agency action in this matter, 
is effective immediately.

    Dated: August 8, 1997.
William A. Reinsch,
Under Secretary for Export Administration.
[FR Doc. 97-21453 Filed 8-13-97; 8:45 am]
BILLING CODE 3510-DT-M