[Federal Register Volume 66, Number 224 (Tuesday, November 20, 2001)]
[Notices]
[Pages 58112-58115]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-28940]


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DEPARTMENT OF COMMERCE

Export Administration

[Docket Number: 01-BXA/TD-01]


Export Privileges, Actions Affecting: Tetrabal Corp., et al.

    Tetrabal Corporation, Inc., 605 Trail Lake Drive, Richardson, 
Texas 75081 and Ihsan Medhat ``Sammy'' Elashi, 316 Candlewood Place, 
Richardson, Texas 75081; Related persons--Appellants.

Decision and Order

    On November 2, 2001, the Administrative Law Judge (hereinafter the 
``ALJ'') issued a Recommended Decision and Order in the above-captioned 
matter. The Recommended Decision and Order, a copy of which is attached 
hereto and made a part hereof, has been referred to me for final 
action. The Recommended Decision and Order sets forth the procedural 
history of the case, the facts of the case, and the detailed findings 
of fact and conclusions of law. The findings of fact and conclusions of 
law concern whether Tetrabal Corporation, Inc. (``Tetrabal'') and Ihsan 
Medhat ``Sammy'' Elashi (``Elashi'') are ``related persons'' to Infocom 
Corporation, Inc. (``Infocom''). The findings of fact and conclusions 
of law also concern whether the issuance

[[Page 58113]]

of the September 6, 2001 order by the Assistant Secretary for Export 
Enforcement temporarily denying the export privileges of Tetrabal and 
Elashi because they are ``related persons'' to Infocom is justified and 
necessary to prevent evasion of that order.
    Based on my review of the record and pursuant to Sec. 766.23(c) of 
the Export Administration Regulations (15 CFR 766.23(c)),\1\ I affirm 
the ALJ's finding that Tetrabal and Elashi are ``related persons'' to 
Infocom as that term is defined in 15 CFR 766.23. Moreover, I affirm 
the ALJ's finding that the order issued by the Assistant Secretary for 
Export Enforcement of September 6, 2001 denying the export privileges 
of Tetrabal and Elashi because they are ``related persons'' to Infocom 
is justified and necessary to prevent evasion of that order. 
Accordingly, the ALJ's Recommended Decision and Order is affirmed, the 
September 6, 2001 temporary denial order issued by the Assistant 
Secretary of Commerce for Export Enforcement is affirmed, and the 
appeal filed by Tetrabal and Elashi is denied.
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    \1\ The Export Administration Regulations codified at 15 CFR 
parts 730-774 were enacted in accordance with the Export 
Administration Act of 1979, as amended, which lapsed on August 20, 
2001. However, pursuant to the International Emergency Economic 
Powers Act (50 U.S.C. 1701-1706 (1994 & Supp. IV 1998)), the 
President, through Executive Order 13,222 of August 17, 2001 (66 FR 
44,025 (Aug. 22, 2001)), has continued the Regulations in full force 
and effect.
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    This order is effective immediately.

    Dated: November 10, 2001.
Kenneth I. Juster,
Under Secretary of Commerce for Export Administration.
In the matter of: Tetrabal Corporation,\1\ 605 Trail Lake Drive, 
Richardson, Texas 75081
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    \1\ The Appellant's appeal letter dated September 28, 2001 
maintained that the address for Tetrabal Corp. is 908 Audelia Rd., 
Suite 200, PMB #245, Richardson, Texas 75801. The return address on 
the envelope accompanying the appeal letter maintained that the 
address is 605 Trail Alke Drive, Richardson, Texas 75801. On October 
22, 2001, Appellant Ihsan Elashi verified that the true address for 
Tetrabal Corp. is 605 Trail Lake Drive, Richardson, Texas 78501.
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    and
Ihsan Medhat ``Sammy'' Elashi,\2\ 316 Candlewood Place, Richardson, 
Texas 75081, Related persons--Appellants
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    \2\ The Appellants have used several different spellings for 
``Elashi'' including: El Ashi, Elashye, Ashi, and Elashyi.
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Before: Hon. Joseph N. Ingolia, Chief Administrative Law Judge, 
United States Coast Guard; Recommended Decision

(I) Preliminary Statement

    This appeal is taken by Tetrabal Corporation (``Tetrabal'') and, 
its Chief Executive Officer and sole owner, Ihsan Medhat ``Sammy'' 
Elashi in accordance with the Bureau of Export Administration (``BXA'' 
or ``Agency'') laws and regulations codified at 50 U.S.C. app. sec. 
2412(d) and 15 CFR 766.23 and 766.24.
    Pursuant to 50 U.S.C. app. sec. 2412(d), 5 U.S.C. 3344, 5 CFR 
Sec. 930.213, a letter dated October 15, 2001 from the United States 
Office of Personnel Management, and an interagency agreement entered 
into between the Coast Guard and BXA, the United States Coast Guard 
Administrative Law Judge Program has authority to adjudicate cases 
brought under the Export Administration Act of 1979 (``EAA'' or 
``Act'') codified at 50 U.S.C. app. sec. 2401-2420 (1994 & Supp. IV 
1998), and the underlying procedural regulations codified at 15 CFR 
part 766.\3\
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    \3\ The Export Administration Regulations codified at 15 CFR 
part 766 were enacted in accordance with the EAA. The Act lapsed on 
August 20, 2001. However, pursuant to the International Emergency 
Economic Powers Act (50 U.S.C. 1701-1706 (1994 & Supp. IV 1998)), 
the President, through Executive Order 13222 of August 17, 2001 (66 
FR 44025 (August 22, 2001)), has continued the Regulations in full 
force and effect.
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(II) Procedural Background

    By order dated September 6, 2001, the Assistant Secretary for 
Export Enforcement (``Secretary) temporarily denied for a period of 180 
Days (``Temporary Denial Order'') all U.S. export privileges of Infocom 
Corporation, Inc. (``Infocom) and various closely related persons, 
including Tetrabal Corporation, Ihsan Medhat ``Sammy'' Elashi, and five 
other natural persons, who are all interconnected by ownership, 
control, or affiliation with Infocom. The Secretary found that:
    (1) Infocom deliberately and covertly committed repeated violations 
of the Export Administration Regulations (``EAR'') between 1997 and 
2000 by making three shipments and attempting to ship computer 
equipment to Libya and Syria without obtaining required BXA export 
licenses, and by attempting to conceal the shipments to Librya and 
Syria by undervaluing the goods and by filing false and deceptive 
shipping documents;
    (2) Infocom's principals have actively sought to engage in further 
export transactions; and
    (3) Given the nature of the item shipped, future violations could 
go undetected.
    Based on the aforementioned, the Secretary determined that a 
temporary denial order issued on an ex parte basis, without a hearing, 
was necessary and in the public interest to preclude future EAR 
violations. The Temporary Denial Order was served on Infocom and all 
related persons by mail on September 7, 2001, and was published in 66 
FR 47630 on September 13, 2001.
    On October 3, 2001, the United States Coast Guard Administrative 
Law Judge Docketing Center (``ALJ Docketing Center'') received a letter 
dated September 28, 2001, appealing the temporary denial of export 
privileges. A copy of the letter was not served on BXA. The Appellants 
Tetrabal and Mr. Ihsan Elashi were advised that the appeal would not be 
considered perfected and action would not be taken until BXA was served 
with a copy of the letter.
    On October 10, 2001, BXA notified the ALJ Docketing Center that the 
appeal had been received. BXA filed an opposition to the appeal on 
October 17, 2001.
    In this case, the appeal was considered perfected once BXA was 
served with a copy of the appeal letter on October 10, 2001. Thus, 
pursuant to the time limitations established in 15 CFR 
Sec. 766.24(e)(4), the recommended decision in the case was to be 
issued on October 24, 2001. However, since Respondent Elashi 
supplemented his appeal on October 22nd, two days before the 
recommended decision was going to be issued, by filing a response to 
BXA's answer, the time period for issuing the recommended decision was 
extended in order to allow BXA an opportunity to file a response. BXA 
filed a reply to the Appellants' supplemental pleading on October 30, 
2001. The appellate record is now closed and the appeal is now ripe for 
decision.
    Upon careful review of the pleadings and documentary evidence in 
this case, I recommend that the appeal filed by Tetrabal Corporation 
and Ihsan Mehat ``Sammy'' Elashi be Denied, and the Temporary Denial 
Ordered issued by the Affirmed.

(III) Findings of Fact

    1. Infocom Coporation, Inc. is a reseller of computers and 
computer-related equipment, which was incorporated in the State of 
Texas on March 16, 1992 by Mr. Bayan Medhat Elashi. (Agency's 
Opposition to Appeal, Exhibit 2).
    2. Infocom is located at 630 International Parkway, Suite 100, 
Richardson, Texas, (Id.).
    3. Mr. Bayan Elashi is the owner and Chief Executive Officer of 
Infocom. (Id.).
    4. Infocom is operated by: (a) Mr. Bayan Elashi; (b) his mother 
Fadwa Elafrangi, who serves as majority owner; and (c) his four 
brothers; (i) Ghassan Elashi, Vice President of Marketing; (ii) Basman 
Medhat Elashi, Logistics Manager; (iii) Hazin Elashi, Manager of 
Personal Computers Division; and (iv)

[[Page 58114]]

Appellant Ihsan Medhat (``Sammy'' Elashi, Systems Consultant, (Id.; 
Agency's Opposition to Appeal, Exhibit 1).
    5. Appellant Ihsan Elashi is a United States citizen, who resides 
at 316 Candlewood Place, Richardson, Texas. He is the father of four 
boys, ranging in ages from 1 to 8 years old. (Agency's Opposition to 
Appeal, Exhibit 2; Appellants' Supplemental Pleading).
    6. Appellant Ihsan Elashi was employed by Infocom until sometime 
well into 2000 and was very active in Infocom's business. (Agency's 
Opposition to Appeal, Exhibit 2; Appellants' Supplemental Pleading).
    7. Computer parts and accessories are regularly shipped to Infocom 
at Appellant Ihsan Elashi's home address. (Id.; Agency's Reply to 
Appellants' Supplemental Pleading, Exhibit 2, 4-12).
    8. Infocom uses Appellant Ihsan Elashi's home address on preprinted 
domestic and international Federal Express shipping labels. (Id.).
    9. Infocom does not possess a license from either BXA or the 
Department of Treasury's Office of Foreign Assets Control to export or 
re-export computers or computer-related equipment to Libya or Syria. 
(Agency's Opposition to Appeal, Exhibit 1 and 2).
    10. In February of 1997, Mr. Ihsan Elashi of Infocom knowingly sold 
computer equipment to Yousef Elamri, the director, shareholder, and 
representative of Computers & Information Technology, Ltd., a Libyan 
based company that has a presence in Malta. (Agency's Opposition to 
Appeal, Exhibit 2; Agency's Reply to Appellants' Supplemental Pleading, 
Exhibit 1, 12 and 13).
    11. Mr. Ihsan Elashi had direct telephone contact with Mr. Elamri 
in Libya in February of 1997 and arranged for the computer equipment to 
be shipped to SMS Air Cargo (``SMS''), a freight forwarder in Valletta, 
Malta, and thereafter redirected to Libya. (Agency's Reply to 
Appellants' Supplemental Pleading, Exhibit 1 and 12).
    12. Infocom shipped the computer equipment to SMS in Malta on March 
5, 1997. (Agency's Opposition to Appeal, Exhibit 2).
    13. The Shipper's Export Declaration (``SED''), which was signed by 
Basman Elashi, identified SMS as the ultimate consignee of the goods 
when, in fact, the true ultimate consignee was Computers & Information 
Technology, Ltd. in Libya. (Id.).
    14. The computer equipment arrived in Malta on March 17, 1997 and 
was immediately loaded on a ferry and shipped to Tripoli, Libya on 
March 20, 1997. (Id.).
    15. Tetrabal Corporation is a computer and computer-related 
equipment reseller that was incorporated by the Appellant Ihsan Elashi 
on July 20, 2000. (Agency's Opposition to Appeal, Exhibit 2; 
Appellants' Supplemental Pleading).
    16. Mr. Ihsan uses his home address as the business address for 
Tetrabal. He also uses the following addresses in letters and other 
correspondence: (a) 605 Trail Lake Drive, Richardson, Texas 75081; and 
(b) 908 Audelia Rd, Suite 200, PNB# 245, Richardson, Texas 75081.
    17. Tetrabal and Infocom conduct business with the same vendors 
that sell computers and computer-related equipment to both companies. 
(Id.).
    18. Tetrabal and Infocom maintain the same customers and business 
contacts. (Id.).
    19. Tetrabal has, on at least three occasions, sold computer 
products and equipment to Infocom on several occasions. (Id.).
    20. On September 6, 2001, the Assistant Secretary for Export 
Enforcement issued an order temporarily denying all export privileges 
of Infocom, Appellant Tetrabal, Bayan Elashi, Ghassan Elashi, Basman 
Elashi, Appellant Ihsan Elashi, Hazim Elashi, and Fadwa Elafrangi for a 
period of 180 days upon finding that Infocom and its corporate officers 
and employees illegally shipped computer equipment between 1997 and 
2000 to Libya and Syria without the required export licenses, and the 
company attempted to conceal the shipment by undervaluing the goods and 
filing false SEDs. (Agency's Opposition to Appeal, Exhibit 1).
    21. On September 19, 2001, thirteen days after the Temporary Denial 
Order was issued, Appellant Ihsan Elashi delivered a Tetrabal 
Corporation check to Salinas International Freight, a freight forwarder 
in Dallas, Texas, to pay for shipment of 82 computers to Saudi Arabia, 
which was previously ordered from Dell on August 20, 2001 and sent to 
the freight forwarder on August 30, 2001. Upon receiving payment, 
Salinas International Freight exported the computers on September 22, 
2001. Tetrabal undervalued the goods in this shipment on the SEDs. 
(Agency's Opposition to Appeal, Exhibit 2; Agency's Reply to 
Appellants' Supplemental Pleading, Exhibit 3; Appellants' Supplemental 
Pleading).
    22. In a letter dated September 28, 2001 that was addressed to 
Ingram Micro, Inc., a computer product vendor and drafted by an 
employee or representative of Ingram Micro, Inc., Appellant Ihsan 
Elashi certified, by signing the letter, that he represents Infocom 
Corp. and Tetrabal Corp and all related persons cited in the Temporary 
Denial Order and Provides assurances that all products purchased from 
Ingram Micro, Inc. are intended for use or resale within the United 
States and will not be exported or re-exported except by express 
authorization of the U.S. Government. (Agency's Opposition to Appeal, 
Exhibit 2 and 3; Appellants' Supplemental Pleading).
    23. Infocom has now shifted its business efforts to being an 
Internet service provider, while Tetrabal maintains the computer sales 
business. (Agency's Opposition to Appeal, Exhibit 2).

(IV) Ultimate Findings of Fact and Conclusions of Law

    1. Appellants Tetrabal Corporation and Ihsan Medahat ``Sammy'' 
Elashi are related persons to Infocom Corporation, Inc. within the 
meaning of 15 CFR 766.23.
    2. The Temporary Denial Order issued by the Assistant Secretary for 
Export Enforcement is justified and necessary to prevent evasion.

(V) Opinion

    In support of foreign policy against terrorism, BXA and the 
Department of Treasury's Office of Foreign Assets Control has 
established comprehensive controls on export and re-export of goods to 
Libya and Syria from the United States. Virtually all exports and re-
exports of U.S. origin goods, technology, or services to Libya are 
prohibited, unless specifically authorized. See 15 CFR 764.4; see also 
31 CFR 550.202 and 550.409. A license is specifically required for the 
export and re-export from the United States to Libya of virtually all 
items, except, among other things, ``publications and donated articles 
intended to relieve human suffering, such as food, clothing, medicine 
and medical supplies intended strictly for medical purposes.'' 31 CFR 
550.202; see also 15 CFR 764.4(b)(1) and (2). Similarly, for anti-
terrorism purposes, a license is required for the export and re-export 
of certain goods, such as computer equipment (ECCN 3A001), to Syria. 15 
CFR 742.9 and 774, Supp. 1.
    The Assistant Secretary for Export Enforcement has authority to 
issue a temporary denial order on an ex parte basis ``upon a showing by 
BXA that the order is necessary in the public interest to prevent an 
imminent violation of the EAA, the EAR, or any order, license or 
authorization issued thereunder.'' 15

[[Page 58115]]

CFR 766.24(b). The Temporary Denial Order may be issued against a 
respondent and any ``related persons.'' 15 CFR 766.23(a) and 766.24(c). 
The term ``related persons'' is defined as ``persons then or thereafter 
related to the respondent by ownership, control, position of 
responsibility, affiliation or other connection in the conduct of trade 
or business.'' 15 CFR 766.23(a). ``Person'' is defined in the EAA as 
any individual, partnership, corporation, or other form of association. 
50 U.S.C. App. sec. 2415(1).
    In these proceedings, a ``related person'' may file an appeal with 
the administrative law judge. 15 CFR 766.23(c). The sole issues to be 
decided on appeal by the administrative law judge are: (a) Whether the 
person(s) is related to the respondent; and (b) whether the order is 
justified in order to prevent evasion. Id.
    The facts in this case establish that Tetrabal and Ihsan Elashi are 
related persons within the meaning of 15 CFR 766.23(a) and the 
Temporary Denial Order is justified in order to prevent evasion.

I. Tetrabal Corporation and Ihsan Elashi Are Related Persons to Infocom

    The Appellants' argument that Tetrabal Corporation and Ihsan Elashi 
are separate entities and there is no relationship with Infocom is 
rejected. The Temporary Denial Order and the documentary evidence 
submitted by BXA on appeal clearly establish an intimate business 
relationship between Infocom, Tetrabal Corporation, and Mr. Ihsan 
Elashi. Tetrabal Corporation and Mr. Ihsan Elashi are affiliated or 
interconnected with Infocom.
    Mr. Bayan Elashi incorporated Infocom on March 16, 1992 and 
employed his brother, Ihsan Elashi to serve as the Systems Consultant. 
Mr. Ihsan Elashi worked for Infocom well into 2000 and represented 
Infocom until well after the issuance of the Temporary Denial Order on 
September 7, 2001. There is no evidence to support a finding that Mr. 
Ihsan Elashi was a mere employee.
    To the contrary, Mr. Ihan Elashi was very active in Infocom's 
business. For instance, in March of 1997, Mr. Ihsan Elashi directly 
participated in the illegal and fraudulent sale and export of computer 
equipment to Libya, through Malta, without first obtaining the required 
BXA export license. He also used his home address on preprinted Federal 
Express shipping labels for Infocom and regularly accepted shipment of 
goods to his home address on behalf of Infocom.
    Furthermore, after Ihsan Elashi incorporated Tetrabal Corp. on July 
20, 2000, he continued to maintain an intimate business relationship 
with Infocom. Infocom and Tetrabal both shared use of Mr. Ihsan 
Elashi's home address for shipment and other purposes. The two 
companies maintain common computer vendors and customers. In addition, 
Tetrabal has sold computer components and equipment to Infocom on at 
least three occasions. Moreover, on September 28, 2001, Mr. Ihsan 
Elashi provided a written statement to Ingram Micro, Inc indicating 
that he represents Infocom, Tetrabal, and all related persons 
identified in the Temporary Denial Order.
    There is no evidence that the statement in the September 28, 2001 
letter was made under duress or that Mr. Ihsan Elashi was otherwise 
forced to make the statement. The mere fact that Ingram Micro, Inc. 
drafted the September 28, 2001 letter that was provided to Mr. Ihsan 
Elashi by electronic mail for signature is, by itself, insufficient to 
establish duress.

II. The Temporary Denial Order Is Justified

    BXA has established that the Temporary Denial Order is justified. 
BXA procedural regulations provide that a Temporary Denial Order may be 
issued to prevent an ``imminent'' violation of export laws, 
regulations, or any order, license, or authorization issued thereunder. 
15 CFR 766.24(b)(1). The procedural regulations provide:

    A violation may be ``imminent'' in either time or in degree of 
likelihood. To establish grounds for the temporary denial order, BXA 
may show either that a violation is about to occur, or that the 
general circumstances of the matter under investigation or case 
under criminal or administrative charges demonstrate a likelihood of 
future violations. To indicate the likelihood of future violations, 
BXA may show that the violation under investigation or charges is 
significant, deliberate, covert and/or likely to occur again, and 
that it is appropriate to give notice to companies in the United 
States and abroad to cease dealing with the person * * * in order to 
reduce the likelihood that a [the] person continues to export * * * 
(U.S.-origin) items, risking subsequent disposition contrary to 
export control requirements.

15 CFR 766.24(b)(3).
    In this case, BXA has established that because of the deliberate 
and covert nature of the Appellants' actions, there exists a likelihood 
of future violations. The record shows that Infocom has recently 
focused its business efforts on being an Internet service provider 
while Mr. Ihsan Elashi and Tetrabal maintains the computer sales 
business. The purpose of the regulations that authorize the issuance of 
Temporary Denial Orders against related persons is to prevent 
respondents from evading the order by using an alter ego to conduct and 
continue exporting goods and other items. The record shows that Mr. 
Ihsan Elashi and Tetrabal have a propensity to commit future violations 
of the export regulations. As a matter of fact, on September 22, 2001, 
Mr. Ihsan Elashi, doing business as Tetrabal, violated the Temporary 
Denial Order, issued several weeks earlier, by exporting 82 personal 
computers to Saudi Arabia and undervaluing the goods on the SED. This 
most recent violation lends further justification for the Temporary 
Denial Order.

(VI) Conclusion

    For the reasons stated above, I recommend that the appeal filed by 
Tetrabal Corporation and Ihsan Medhat ``Sammy'' Elashi be Denied, and 
the Temporary Denial Order issued by the Secretary be Affirmed.

    Done and dated this 2nd day of November 2001, Baltimore, 
Maryland.
Joseph N. Ingolia,
Chief Administrative Law Judge, United States Coast Guard.
[FR Doc. 01-28940 Filed 11-19-01; 8:45 am]
BILLING CODE 3510-JT-M