[Federal Register Volume 68, Number 110 (Monday, June 9, 2003)]
[Notices]
[Pages 34376-34377]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-14377]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Action Affecting Export Privileges; Serfilco, Ltd.

    In the Matter of: Serfilco, Ltd., 1777 Shermer Road, Northbrook, 
IL 60062-5360, Respondent; Order

    The Bureau of Industry and Security, United States Department of 
Commerce (``BIS''), having notified Serfilco, Ltd., 1777 Shermer Road, 
Northbrook, Illinois 60062-5360, (``Serfilco'') of its intention to 
initiate an administrative proceeding against Serfilco, pursuant to 
Section 13(c) of the Export Administration Act of 1979, as amended (50 
U.S.C. app. Sec. Sec.  2401-2420 (2000)) (``Act''),\1\ and the Export 
Administration Regulations (currently codified at 15 CFR parts 730-774 
(2002)) (``Regulations''),\2\ based on allegations that Serfilco 
committed one violation each of Section 787A.3 and 787A.4 of the former 
Regulations, and four violations of Section 764.2(a) of Regulations by 
selling commodities to companies in the United States to be exported to 
Bahrain and Saudi Arabia, and negotiating the sale of commodities to be 
exported to the United Arab Emirates and Saudi Arabia, contrary to the 
terms of the June 10, 1996 Order denying all of Serfilco's export 
privileges to Bahrain, Iraq, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi 
Arabia, Syria, the United Arab Emirates, or the Republic of Yemen; and
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    \1\ From August 21, 1994 through November 12, 2000, the Act was 
in lapse. During that period, the President, through Executive Order 
12924, which had been extended by successive Presidential Notices, 
the last of which was August 3, 2000 (3 CFR, 2000 Comp. 397 (2001)), 
continued the Regulations in effect under the International 
Emergency Economic Powers Act (50 U.S.C. 1701-1706 (2000)) 
(``IEEPA''). On November 13, 2000, the Act was reauthorized and it 
remained in effect through August 20, 2001. Since August 21, 2001, 
the Act has been in lapse and the President, through Executive Order 
13222 of August 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), as extended 
by the Notice of August 14, 2002 (67 FR 53721 (August 16, 2002)), 
has continued the Regulations in effect under IEEPA.
    \2\ The Regulations governing the violations at issue are found 
in the 1996 and 1997 versions of the Code of Federal Regulations, 
(15 CFR parts 768-799 (1996), as amended (61 FR 12714, March 25, 
1996) (hereinafter ``the former Regulations'')), and 15 CFR parts 
768-799 (1997). The March 25, 1996 Federal Register publication 
redesignated, but did not republish, the then-existing Regulations 
as 15 CFR parts 768A-799A. As an interim measure that was part of 
the transition to newly restructured and reorganized Regulations, 
the March 25, 1996 Federal Register publication also restructured 
and reorganized the Regulations, designating them as an interim rule 
at 15 CFR parts 730-774, effective April 24, 1996. The former 
Regulations and the Regulations define the various violations that 
BIS alleges occurred. The Regulations establish the procedures that 
apply to this matter.
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    BIS and Serfilco having entered into a Settlement Agreement 
pursuant to Section 766.18(a) of the Regulations whereby they agreed to 
settle this matter in accordance with the terms and conditions set 
forth therein, and the terms of the Settlement Agreement having been 
approved by me;

It is Therefore Ordered:

    First, that a civil penalty of $65,000 is assessed against 
Serfilco, of which $32,500 shall be paid to the U.S. Department of 
Commerce within 30 days from the date of entry of this Order. Payment 
of the remaining $32,500 shall be made within six months from the date 
of the entry of the Order. Payments shall be made in the manner 
specified in the attached instructions.
    Second, that, pursuant to the Debt Collection Act of 1982, as 
amended (31 U.S.C. 3701-3720E (2000)), the civil penalty owed under 
this Order accrues interest as more fully described in the attached 
Notice, and, if payment is not made by the due date specified herein, 
Serfilco shall be assessed, in addition to the full amount of the civil 
penalty and interest, a penalty charge and an administrative charge, as 
more fully described in the attached Notice.
    Third, that for a period of three years from the date of this 
Order, Serfilco, its successors or assigns, and when acting for or on 
behalf of Serfilco, its officers, representatives, agents or employees 
(``denied person'') 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 to Bahrain, Iraq, Kuwait, Lebanon, 
Libya, Oman, Qatar, Saudi Arabia, Syria, the United Arab Emirates, or 
the Republic of Yemen, that is subject to the Regulations, or in any 
other activity subject to the Regulations related to export to Bahrain, 
Iraq, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, Syria, the 
United Arab Emirates, or the Republic of Yemen, 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.
    Fourth, 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 from the United States to Bahrain, Iraq, 
Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, Syria, the United 
Arab Emirates, or the Republic of Yemen;
    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 to Bahrain, Iraq, Kuwait, Lebanon, 
Libya, Oman, Qatar, Saudi Arabia, Syria, the United Arab Emirates, or 
the Republic of Yemen, 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 to 
Bahrain, Iraq, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, 
Syria, the United Arab Emirates, or the Republic of Yemen;

[[Page 34377]]

    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 to 
Bahrain, Iraq, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, 
Syria, the United Arab Emirates, or the Republic of Yemen; 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 
Bahrain, Iraq, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, 
Syria, the United Arab Emirates, or the Republic of Yemen, and which 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 to Bahrain, Iraq, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi 
Arabia, Syria, the United Arab Emirates, or the Republic of Yemen. For 
purposes of this paragraph, servicing means installation, maintenance, 
repair, modification or testing.
    Fifth, 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 Serfilco by affiliation, ownership, 
control, or position of responsibility in the conduct of trade or 
related services may also be subject to the provisions of this Order.
    Sixth, 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.
    Seventh, that the proposed charging letter, the Settlement 
Agreement, and this Order shall be made available to the public.
    This Order, which constitutes the final agency action in this 
matter, is effective immediately.

    Entered this 13th day of March 2003.
Lisa A. Prager,
Acting Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 03-14377 Filed 6-6-03; 8:45 am]
BILLING CODE 3510-DT-P