[Federal Register Volume 63, Number 88 (Thursday, May 7, 1998)]
[Notices]
[Pages 25199-25200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12188]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Export Administration


Action Affecting Export Privileges; Export Materials, Inc. and 
Thane-Coat International, Ltd.; Decision and Order on Renewal of 
Temporary Denial Order

    In the matters of: Export Materials, Inc., 3727 Greenbrier 
Drive, No. 108, Stafford, Texas 77477, and Thane-Coat International, 
Ltd., Suite C, Regent Centre, Explorers Way, P.O. Box F-40775, 
Freeport, The Bahamas, Respondents.

    On October 31, 1997, Acting Assistant Secretary for Export 
Enforcement Frank W. Deliberti issued a Decision and Order on Renewal 
of Temporary Denial Order (hereinafter ``Order'' or ``TDO''), renewing 
for 180 days a May 5, 1997 Order naming Thane-Coat, Inc.; Jerry Vernon 
Ford, president, Thane-Coat, Inc.; Preston John Engebretson, vice-
president, Thane-Coat, Inc.; Export Materials, Inc.; and Thane-Coat 
International, Ltd. (Export Materials, Inc. And Thane-Coat, 
International, Ltd. hereinafter collectively referred to as the 
``Respondents'' and Thane-Coat, Inc., Ford, and Engebretson, the 
``affiliated parties''), as persons temporarily denied all U.S. export 
privileges. 62 FR 60063-60065 (November 6, 1997). The Order will expire 
on April 29, 1998.
    On April 9, 1998, pursuant to Section 766.24 of the Export 
Administration Regulations (15 C.F.R. Parts 730-774 (1997)) 
(hereinafter the ``Regulations''), issued pursuant to the Export 
Administration Act of 1979, as amended (50 U.S.C.A. app. sections 2401-
2420 (1991 & Supp. 1998)) (hereinafter the ``Act''),\1\ the Office of 
Export Enforcement, Bureau of Export Administration, United States 
Department of Commerce (hereinafter ``BXA''), requested that the 
Assistant Secretary for Export Enforcement renew the Order against 
Thane-Coat International, Inc. and Export Materials, Inc. for an 
additional 180 days.
---------------------------------------------------------------------------

    \1\ 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)), August 14, 1996 
(3 C.F.R., 1996 Comp. 298 (1997)), and August 13, 1997 (62 FR 43629, 
August 15, 1997), continued the Regulations in effect under the 
International Emergency Economic Powers Act (currently codified at 
50 U.S.C.A. 1701-1706 (1991 & Supp. 1998)).
---------------------------------------------------------------------------

    In its request, BXA stated that, as a result of an ongoing 
investigation, it had reason to believe that, during the period from 
approximately June 1994 through approximately July 1996, Thane-Coat, 
Inc., through Ford and Engebretson, and using its affiliated companies, 
Thane-Coat International, Ltd. and Export Materials, Inc., made 
approximately 100 shipments of U.S.-origin pipe coating materials, 
machines, and parts to the Dong Ah Consortium in Benghazi, Libya. These 
items were for use in coating the internal surface of prestressed 
concrete cylinder pipe for the Government of Libya's Great Man-Made 
River Project.\2\ Moreover, BXA's investigation gave it reason to 
believe that the Respondents and the affiliated parties employed a 
scheme to export U.S.-origin products from the United States, through 
the United Kingdom, to Libya, a country subject to a comprehensive 
economic sanctions program, without the authorizations required under 
U.S. law, including the Regulations. The approximate value of the 100 
shipments at issue was $35 million. In addition, the Respondents and 
the affiliated parties undertook several significant and affirmative 
actions in connection with the solicitation of business on another 
phase of the Great Man-Made River Project.
---------------------------------------------------------------------------

    \2\ BXA understands that the ultimate goal of this project is to 
bring fresh water from wells drilled in southeast and southwest 
Libya through prestressed concrete cylinder pipe to the coastal 
cities of Libya. This multibillion dollar, multiphase engineering 
endeavor is being performed by the Dong Ah Construction Company of 
Seoul, South Korea.
---------------------------------------------------------------------------

    BXA has stated that it believes that the matters under 
investigation and the information obtained to date in that 
investigation support renewal of the TDO issued against the 
Respondents.\3\ BXA believes that a temporary denial order is necessary 
to give notice to companies in the United States and abroad that they 
should cease dealing with Thane-Coat International, Inc. and Export 
Materials, Inc. in export-related transactions involving U.S.-origin 
goods.
---------------------------------------------------------------------------

    \3\ On April 17, 1998, BXA requested that the Assistant 
Secretary for Export Enforcement renew the October 31, 1997 TDO 
against Thane-Coat, Inc., Jerry Vernon Ford, and Preston John 
Engebretson.
---------------------------------------------------------------------------

    Based on BXA's showing, I find that it is appropriate to renew the 
order temporarily denying all U.S. export privileges of Thane-Coat 
International, Ltd. and Export Materials, Inc. I find that such renewal 
is necessary in the public interest to prevent an imminent violation of 
the Regulations and to give notice to companies in the United States 
and abroad to cease dealing with these persons in any commodity, 
software, or technology exported or to be exported from the United 
States and subject to the Export Administration Regulations, or in any 
other activity subject to the Regulations. Moreover, I find such 
renewal is in the public interest in order to reduce the substantial 
likelihood that Thane-Coat International, Inc. and Export Materials, 
Inc. will engage in activities which are in violation of the 
Regulations.
    Accordingly, it is therefore ordered:
    First, that Thane-Coat International, Ltd., and all of its 
successors or assigns, officers, representatives, agents, and

[[Page 25200]]

employees when acting on its behalf, and Export Materials, Inc., and 
all of its successors or assigns, officers, representatives, agents, 
and employees when acting on its behalf (hereinafter referred to 
collectively as the ``denied persons''), 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.
    Second, that no person may, directly or indirectly, do any of the 
following:
    A. Export or reexport to or on behalf of any denied person any item 
subject to the Regulations;
    B. Take any action that facilitates the acquisition, or attempted 
acquisition, by any 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 any 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 any denied person of any item 
subject to the Regulations that has been exported from the United 
States;
    D. Obtain from any 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 which is owned, possessed or controlled by any denied person, or 
service any item, of whatever origin, that is owned, possessed or 
controlled by any 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 Section 766.23 of the Regulations, any person, firm, corporation, or 
business organization related to any 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.
    This order, which constitutes final agency action in this matter, 
is effective immediately and shall remain in effect for 180 days.
    A copy of this Order shall be served on each Respondent and this 
Order shall be published in the Federal Register.

    Entered this 29th day of April, 1998.
F. Amanda, DeBusk,
Assistant Secretary for Export Enforcement.

Certificate of Service

    I hereby certify that, on April 30, 1998, I caused the foregoing 
Decision and Order on Renewal of Temporary Denial Order to be mailed 
first-class, postage prepaid to: Export Materials, Inc., 3727 
Greenbriar Drive, No. 108, Stafford, Texas 77477.
    I hereby certify that on April 30, 1998, I caused the foregoing 
Decision and Order on renewal of Temporary Denial Order to be mailed 
registered mail, return receipt requested to: Thane-Coat International, 
Ltd., Suite C, Regent Centre, Explores Way, P.O. Box F-40775, Freeport, 
The Bahamas.
Lucinda G. Maruca,
Secretary, Office of the Assistant Secretary for Export Enforcement.
[FR Doc. 98-12188 Filed 5-6-98; 8:45 am]
BILLING CODE 3510-DT-M