[Federal Register Volume 63, Number 211 (Monday, November 2, 1998)]
[Notices]
[Pages 58706-58707]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29268]


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DEPARTMENT OF COMMERCE

Bureau of Export Administration


Action Affecting Export Privileges; Export Materials, Inc Tic, 
Ltd

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

Decision and Order on Renewal of Temporary Denial Order

    On April 29, 1998, I 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, inter alia, Export Materials, Inc. 
and Thane-Coat International, Ltd. (hereinafter collectively referred 
to as the ``Respondents''), as persons temporarily denied all U.S. 
export privileges. 63 FR 25199-25200 (May 7, 1998).\1\ The Order will 
expire on October 26, 1998.
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    \1\ The May 5, 1997 Order also named Thane-Coat, Inc.; Jerry 
Vernon Ford, president, Thane-Coat, Inc.; and Preston John 
Engebretson, vice-president, Thane-Coat, Inc., as persons 
temporarily denied all U.S. export privileges. I am issuing a 
separate Decision and Order today renewing the TDO against Thane-
Coat, Ford, and Engebretson in a ``non-standard'' format.
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    On October 6, 1998, pursuant to Section 766.24 of the Export 
Administration Regulations (15 C.F.R. Parts 730-774 (1998)) 
(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)) 1997 Order naming, inter alia, Thane-Coat, 
Inc.; Jerry Vernon Ford, president, Thane-Coat, Inc.; and Preston John 
Engebretson, vice-president, Thane-Coat, Inc. (hereinafter referred to 
collectively as the ``Respondents''), as persons temporarily denied all 
U.S. export privileges. 63 FR 25817-25819 (May 11, 1998).\1\ The Order 
will expire on October 26, 1998.
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    \1\ The May 5, 1997 Order also named Thane-Coat International, 
Ltd. and Export Materials, Inc. as persons temporarily denied all 
U.S. export privileges. I am issuing a separate Decision and Order 
today renewing the TDO against Thane-Coat International, Ltd. (under 
its legal name of TIC Ltd.) and Export Materials in a ``standard'' 
format.
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    On October 6, 1998, pursuant to Section 766.24 of the Export 
Administration Regulations (currently codified at 15 C.F.R. Parts 730-
774 (1998)) (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''),\2\ the 
Office of Export Enforcement, Bureau of Export Administration, United 
States Department of Commerce (hereinafter ``BXA''), requested that I 
renew the Order against Thane-Coat, Inc., Jerry Vernon Ford, and 
Preston John Engebretson for 180 days in a non-standard format, 
consistent with the terms agreed to by and between the parties in April 
1998.
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    \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)), August 14, 1996 
(3 C.F.R., 1996 Comp. 298 (1997)), August 13, 1997 (3 C.F.R., 1997 
Comp. 306 (1998)), and August 13, 1998 (63 Fed. Reg. 44121, August 
17, 1998), continued the Regulations in effect 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, 
TIC 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.\3\ 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 actions in connection with the 
solicitation of business on another phase of the Great Man-Made River 
Project.
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    \3\ 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.\4\ In that regard, in April, 1998 BXA and the Respondents 
reached an agreement, whereby BXA 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. BXA has sought renewal of 
the TDO in a ``non-standard'' format; respondents have advised me that 
they do not object to renewal of the TDO in the ``non-standard'' 
format.
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    \4\ On October 6, 1998, BXA requested that I renew the April 29, 
1998 TDO against TIC Ltd. and Export Materials.
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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 in 
April 1998. 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

[[Page 58707]]

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 substantiallikelihood 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-Coast, 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, modifications 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 no 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.
    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.
    Sixth, that, in accordance with the provisions of Section 766.24(e) 
of the Regulations, Thane-Coat, Ford, or Engebretson may, at any time, 
appeal this Order by filing a full written statement in support of the 
appeal with the office of the Administrative Law Judge, U.S. Coast 
Guard ALJ Docketing Center, 40 South Gay Street, Baltimore, Maryland 
21202-4022.
    Seventh, that this Order is effective immediately and shall remain 
in effect for 180 days.
    Eighth, that, in accordance with the provisions of Section 
766.24(d) of the Regulations, BXA may seek renewal of this Order by 
filing a written request no later than 20 days before the expiration 
date. Any respondent may oppose a request to renew this Order by filing 
a written submission with the Assistant Secretary for Export 
Enforcement, which must be received not later than seven days before 
the expiration date of this Order.
    A copy of this Order shall be served on each Respondent and shall 
be published in the Federal Register.

    Entered this 23rd day of October, 1998.
F. Amanda DeBusk,
Assistant Secretary for Export Enforcement.
[FR Doc. 98-29268 Filed 10-30-98; 8:45 am]
BILLING CODE 3510-DT-M