[Federal Register Volume 63, Number 90 (Monday, May 11, 1998)]
[Notices]
[Pages 25817-25819]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12421]


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DEPARTMENT OF COMMERCE

Bureau of Export Administration


Action Affecting Export Privileges; Thane-Coat, Inc, Jerry Vernon 
Ford and Preston John Engebretson

    In the Matters of: Thane-Coat, Inc., 12725 Royal Drive, 
Stafford, Texas 77477, Jerry Vernon Ford, President, Thane-Coat, 
Inc., 12725 Royal Drive, Stafford, Texas 77477, and with an address 
at, 7707 Augustine Drive, Houston, Texas 77036, and Preston John 
Engebretson, Vice-President, Thane-Coat, Inc., 12725 Royal Drive, 
Stafford, Texas 77477, and with an address at 8903 Bonhomme Road, 
Houston, Texas 77074, Respondents.

Decision and Order on Renewal of Temporary Denial Order

    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. (Thane-Coat, Inc., Ford, and Engebretson 
hereinafter referred to collectively as the ``Respondents'' and Export 
Materials, Inc. and Thane-Coat, International, Ltd., the ``affiliated 
companies''), 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 17, 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. Secs. 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, Inc., Jerry Vernon Ford, and Preston John Engebretson for 
180 days, pursuant to terms agreed to by and between the parties.
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    \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 effective under the 
International Emergency Economic Powers Act (currently codified at 
50 U.S.C.A. Secs. 1701-1706 (1991 & Supp. 1998)).
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    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 companies 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 companies undertook several significant and affirmative

[[Page 25818]]

actions in connection with the solicitation of business on another 
phase of the Great Man-Made River Project.
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    \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.
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    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\ In that regard, BXA and the Respondents reached an 
agreement, whereby BXA has sought a renewal of the TDO in a ``non-
standard'' format, denying all of the Respondents' U.S. export 
privileges to the United Kingdom, The Bahamas, Libya, Cuba, Iraq, North 
Korea, Iran, and any other country or countries that may be made 
subject in the future to a general trade embargo by proper legal 
authority. In return, the Respondents agreed that, among other 
conditions, at least 14 days in advance of any export that any of the 
Respondents intends to make of any item from the United States to any 
destination world-wide, the Respondents will provide to BXA's Dallas 
Field Office (i) notice of the intended export, (ii) copies of all 
documents reasonably related to the subject transaction, including, but 
not limited to, the commercial invoice and bill of lading, and (iii) 
the opportunity, during the 14-day notice period, to inspect physically 
the item at issue to ensure that the intended shipment is in compliance 
with the Export Administration Act, the Export Administration 
Regulations, or any order issued thereunder.
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    \3\ On April 9, 1998, BXA requested that the Assistant Secretary 
for Export Enforcement renew the October 31, 1997 TDO against Thane-
Coat, International, Ltd. and Export Materials, Inc.
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    Based on BXA's showing, I find that it is appropriate to renew the 
order temporarily denying the export privileges of Thane-Coat, Inc., 
Jerry Vernon Ford, and Preston John Engebretson in a ``non-standard'' 
format, incorporating the terms agreed to by and between the parties. 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 subject to the 
Regulations and exported or to be exported to the United Kingdom, the 
Bahamas, Libya, Cuba, Iraq, North Korea, Iran, and any other country or 
countries that may be made subject in the future to a general trade 
embargo by proper legal authority, or in any other activity subject to 
the Regulations with respect to these specific countries. Moreover, I 
find such renewal is in the public interest in order to reduce the 
substantial likelihood that Thane-Coat, Inc., Ford, and Engebretson 
will engage in activities which are in violation of the Regulations.
    Accordingly, It is therefore ordered:
    First, that Thane-Coat, Inc., and all of its successors or assigns, 
officers, representatives, agents, and employees when acting on its 
behalf, Jerry Vernon Ford, and all of his successors, or assigns, 
representatives, agents and employees when acting on his behalf; and 
Preston John Engebretson, and all of his successors, or assigns, 
representatives, agents, and employees when acting on his behalf (all 
of the foregoing parties hereinafter collectively referred to 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'') subject 
to the Export Administration regulations (hereinafter the 
``Regulations'') and exported or to be exported from the United States 
to the United Kingdom, the Bahamas, Libya, Cuba, Iraq, North Korea, or 
Iran, or to any other country or countries that may be made subject in 
the future to a general trade embargo pursuant to proper legal 
authority (hereinafter the ``Covered Countries''), or in any other 
activity subject to the Regulations with respect to the Covered 
Countries, 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 that is subject to the Regulations 
and that is exported or to be exported from the United States to any of 
the Covered Countries, 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 to any of the Covered 
Countries 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 of the denied persons 
any item subject to the Regulations to any of the Covered Countries;
    B. Take any action that facilitates the acquisition, or attempted 
acquisition by any of the denied persons of the ownership, possession, 
or control of any item subject to the Regulations that has been or will 
be exported from the United States to any of the Covered Countries, 
including financing or other support activities related to a 
transaction whereby any of the denied persons 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 of the denied persons of any item 
subject to the Regulations that has been exported from the United 
States to any of the Covered Countries;
    D. Obtain from any of the denied persons 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 
to any of the Covered Countries; 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 to 
any of the Covered Countries, and which is owned, possessed or 
controlled by any of the denied persons, or service any item, of 
whatever origin, that is owned, possessed or controlled by any of the 
denied persons if such service involves the use of any item subject to 
the Regulations that has been or will be exported from the United 
States to any of the Covered Countries. For purposes of this paragraph, 
servicing means installation, maintenance, repair, modification or 
testing.
    Third, that, at least 14 days in advance of any export that any of 
the denied persons intends to make of any item from the United States 
to any destination world-wide, the denied person will provide to BXA's 
Dallas Field Office (i) notice of the intended export, (ii) copies of 
all documents reasonably related to the subject transaction, including, 
but not limited to, the commercial invoice and bill of lading, and 
(iii) the opportunity, during the 14-day notice period, to inspect 
physically the item at issue to ensure that the intended shipment is in 
compliance with the Export Administration Act, the Export 
Administration Regulations, or any order issued thereunder.
    Fourth, 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 of the denied persons 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.

[[Page 25819]]

    Fifth, 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 is effective immediately and shall remain in effect for 
180 days.
    A copy of this Order shall be served on each Respondent and 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:

Thane-Coat, Inc. 12725 Royal Drive Stafford, Texas 77477,
Jerry Vernon Ford President Thane-Coat, Inc. 12725 Royal Drive 
Stafford, Texas 77477,
    and
Preston John Engebretson Vice-President Thane-Coat, Inc. 12725 Royal 
Drive Stafford, Texas 77477.
Lucinda G. Maruca,
Secretary, Office of the Assistant Secretary for Export Enforcement.
[FR Doc. 98-12421 Filed 5-8-98; 8:45 am]
BILLING CODE 3510-DT-M