[Federal Register Volume 65, Number 249 (Wednesday, December 27, 2000)]
[Notices]
[Pages 81822-81823]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-32908]


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

DEPARTMENT OF COMMERCE

Bureau of Export Administration

[97-BXA-01]


In the Matter of: Modern Engineering Services, LTD., P.O. Box 
1727, Islamabad, Pakistan, also known as Engineering and Technical 
Services, P.O. Box 2639, Islamabad, Pakistan, Respondent; Decision and 
Order

    On April 1, 1997, the Office of Export Enforcement, Bureau of 
Export Administration, United States Department of Commerce 
(hereinafter ``BXA''), issued a charging letter initiating this 
administrative proceeding against Modern Engineering Services, Ltd., 
also known as, Engineering and Technical Services (MES). The charging 
letter alleged that MES committed two violations of the Export 
Administration Regulations (currently codified at 15 CFR parts 730-774 
(2000)) (the Regulations) \1\, issued under the Export Administration 
Act of 1979, as amended (50 U.S.C.A. app. 2401-2420 (1991 & Supp. 2000) 
and Pub. L. No. 106-508) (the Act).\2\ Specifically, the charging 
letter alleges that on or about April 1, 1992, and November 27, 1992, 
U.S. exporters, based upon information provided to them by MES, 
represented on export license applications, export control documents as 
defined in section 770.2 of the former Regulations, that MES was 
located at House No. 22621 I-10/2, Islamabad, Pakistan, and No. 1 
Street #17, f-8-3 Rawalpindi, Islamabad, Pakistan, respectively, when 
in fact MES was not located at either of those addresses. BXA alleges 
that by making false and misleading misrepresentations, statements, or 
certifications of material fact, directly or indirectly, to BXA, in 
connection with the preparation, submission, issuance, use or 
maintenance of an export control document, MES committed two violations 
of section 787.5(a)(1) of the former Regulations.
---------------------------------------------------------------------------

    \1\ The alleged violations occurred in 1992. The Regulations 
governing the violations at issue are found in the 1992 version of 
the Code of Federal Regulations (15 CFR Parts 768-799 (1992)). Those 
Regulations define the violations that BXA alleges occurred and are 
referred to hereinafter as the former Regulations. Since that time 
the Regulations have been reorganized and restructured; the 
restructured Regulations establish the procedures that apply to the 
matters set forth herein.
    \2\ The Act expired on August 20, 1994. Executive Order 12924 (3 
CFR, 1994 Comp. 917 (1995)), which has been extended by successive 
Presidential Notices, the most recent being that of August 3, 2000 
(65 Fed. Reg. 48347, August 8, 2000)), continued the Regulations in 
effect under the International Emergency Economic Powers Act (50 
U.S.C.A. 1701-1706 (1991 & Supp. 2000)). The Act was reauthorized on 
November 13, 2000. See Pub. L. No. 106-508, November 13, 2000.
---------------------------------------------------------------------------

    Section 766.3(b)(1) of the Regulations provides that notice of 
issuance of a charging letter shall be served on a respondent ``[b]y 
mailing a copy by registered or certified mail addressed to the 
respondent at respondent's last known address.'' BXA has established 
that notice of issuance of the charging letter was served on MES in 
accordance with section 766.3(b)(1) of the Regulations. BXA presented 
evidence that on April 1, 1997, BXA sent the charging letter by 
registered mail to MES at MES's last known address.
    As to the date of service, BXA alleges that June 30, 1997 should be 
the date of delivery as that is the date MES constructively refused 
service of process. BXA's position is based upon section 766.3(c) of 
the Regulations, which provides that ``[t]he date of service of notice 
of the issuance of a charging letter instituting an administrative 
enforcement proceeding . . . is the date of its delivery, or of its 
attempted delivery if delivery is refused.'' I find that June 30, 1997 
shall be the date of attempted delivery. As stated above, BXA sent the 
charging letter to MES's last known addresses by registered mail. BXA 
also presented evidence that it made diligent and good faith efforts to 
locate MES, including visiting MES's last known address in Pakistan and 
trying to send the charging letter by facsimile to MES's last known fax 
number, as BXA did not receive a return receipt for the charging 
letter. Further, BXA has stated that the United States Postal Service 
informed BXA that it takes a maximum of 90 days for a letter sent by 
registered mail from the United States to reach Pakistan. Hence, as the 
charging letter was sent on April 1, 1997, it is appropriate to find 
that the charging letter reached Pakistan no later than June 30, 1997.
    Section 766.6(a) of the Regulation provides, in pertinent part, 
that ``[t]he respondent must answer the charging letter within 30 days 
after being served

[[Page 81823]]

with notice of issuance of the charging letter * * *'' Hence, as 
service was effected on June 30, 1997, MES's answer to the charging 
letter was due no later than August 1, 1997. MES did not file an answer 
to the charging letter. MES is therefore in default. Thus, pursuant to 
section 766.7 of the Regulations, BXA moved the Administrative Law 
Judge (hereinafter the ``ALJ'') to find the facts to be as alleged in 
the charging letter and render a Recommended Decision and Order.
    Following BXA's motion, the ALJ issued a Recommended Decision and 
Order in which he found the facts to be as alleged in the charging 
letter, and concluded that those facts constitute two violations of 
section 787.5(a)(1) of the former Regulations by MES, as BXA alleged. 
The ALJ also agreed with BXA's recommendation that the appropriate 
penalty to be imposed for the violations is a denial of MES's export 
privileges for ten years.
    As provided by section 766.22 of the Regulations, the Recommended 
Decision and Order has been referred 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 ALJ.
    Accordingly, It Is Therefore Ordered, First, that, for a period of 
ten years from the date of this Order, Modern Engineering Services, 
House No. 2262 I-10/2, Islamabad, Pakistan, also known as Engineering 
and Technical Services, No. 1 Street #17, f-8-3 Rawalpindi, Islamabad, 
Pakistan, and all of its successors or assigns, officers, 
representatives, agents, and employees, 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. Benefitting 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 the denied person any item 
subject to the Regulations;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by the 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 the 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 the denied person, or 
service any item, of whatever origin, that is owned, possessed or 
controlled by the 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 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 this Order shall be served on MES and on BXA, and shall 
be published in the Federal Register.
    This Order, which constitutes the final agency action in this 
matter, is effective immediately.

    Dated: December 14, 2000.
William A. Reinsch,
Under Secretary for Export Administration.
[FR Doc. 00-32908 Filed 12-26-00; 8:45 am]
BILLING CODE 3510-DT-M