[Federal Register Volume 66, Number 186 (Tuesday, September 25, 2001)]
[Notices]
[Pages 48998-49000]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23948]


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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 58 East Guada Coma 
New Braunfels, Texas 78130, 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 March 20, 2001, then Acting Assistant Secretary for Export 
Enforcement Lisa A. Prager issued a Decision and Order on Renewal of 
Temporary Denial Order (hereinafter ``Order'' or ``TDO''), renewing for 
180

[[Page 48999]]

days, in a ``non-standard'' format, a May 5, 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. 66 FR 17147-
17149 (March 29, 2001). Unless renewed, the Order will expire on 
September 16, 2001.
    On August 24, 2001, pursuant to Sec. 766.24 of the Export 
Administration Regulations (currently codified at 15 CFR parts 730-774 
(2001)) (hereinafter the ``Regulations''), issued pursuant to the 
Export Administration Act of 1979, as amended (50 U.S.C. app. secs. 
2401-2420 (1994 & Supp. IV 1998)) (hereinafter the ``Act''), 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.
    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.\1\ 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 is stated to be $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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    \1\ 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 cyclinder 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 in that investigation 
support renewal of the TDO issued against the Respondents as the 
evidence shows that Respondents engaged in a significant, deliberate, 
and covert scheme to violate U.S. export control laws, including the 
regulations, over a period of years and are likely to commit future 
violations without the renewal of the TDO. The Respondents' pattern of 
extensive, repeated and clandestine shipments combined with the 
Respondents' business knowledge and practice (e.g., setting up shell 
companies, both foreign and domestic) and repeated inquiries with 
foreign entities to acquire contracts to conduct business in Libya and 
Iran demonstrate a likelihood that Respondents may commit further 
violations.
    In April 1998, BXA and the Respondents reached an agreement, 
whereby BXA sought a renewal of the TDO, but changing the ``standard'' 
format to 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 pending resolution of the criminal charges against 
Respondents. 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 comparable to the terms of the 
March 20, 2001 TDO; respondents have hereto not opposed renewal of the 
TDO in a ``non-standard'' format.
    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 with 2 revisions: deleting North Korea from the list of 
countries to which Respondents' export privileges are denied as North 
Korea is no longer subject to a general trade embargo and adding Sudan 
to the list as Sudan is now subject to a general trade embargo. I find 
that such renewal is necessary in the public interest to prevent 
imminent violations 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, Sudan, 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.
    Accordingly, it is therefore ordered:
    First, that Thane-Coat, Inc., 12725 Royal Drive, Stafford, Texas 
77477, and all of its successors or assigns, officers, representatives, 
agents, and employees when acting on its behalf; Jerry Vernon Ford, 
President, Thane-Coat, Inc., 12725 Royal Drive, Stafford, Texas 77477, 
and 58 East Guada Coma, New Braunfels, Texas 78130, and all of his 
successors or assigns, representatives, agents and employees when 
acting on his behalf; and Preston John Engebretson, Vice-President, 
Thane-Coat, Inc., 12725 Royal Drive, Stafford, Texas 77477 and 8903 
Bonhomme Road, Houston, Texas 77074, 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, Iran, or 
Sudan 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 activity 
subject to the regulations with respect to the Covered Countries, 
including but not limited to:

[[Page 49000]]

    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. Benefitting 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, without limiting the provisions of the First Ordering 
Paragraph on page 5, after notice and opportunity for comment, as 
provided in Sec. 766.23 of the regulations, any persons, 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 Sec. 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 Sec. 766.24(d) 
of the regulations, BXA may seek renewal of this Order by filing a 
written request not 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 the Order.
    A copy of this Order shall be served on each Respondent and shall 
be published in the Federal Register.

    Entered this 14th day of September, 2001.
Michael I. Farcia,
Assistant Secretary for Export Enforcement.
[FR Doc. 01-23948 Filed 9-24-01; 8:45 am]
BILLING CODE 3510-DT-M