[Federal Register Volume 69, Number 96 (Tuesday, May 18, 2004)]
[Notices]
[Pages 28120-28121]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-11210]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 03-BIS-06]


Under Secretary for Industry and; Security In the Matter of: 
Arian Transportvermittlungs GmbH, Morsestrasse 1, D-50769 Cologne, 
Germany, Respondent; Decision and Order

    On May 15, 2003 the Bureau of Industry and Security (``BIS'') 
issued a charging letter against the respondent, Arian 
Transportvermittlungs GmbH (Arian), that alleged two violations of the 
Export Administration Regulations (Regulations).\1\ The charging letter 
alleged that Arian committed one violation of Sec.  764.2(a) and one 
violation of Sec.  764.2(e) of the Regulations, issued under the Export 
Administration Act of 1979, as amended (50 U.S.C. app. 2401-2420 
(2000)) (``Act'').\2\
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    \1\ The violations charged occurred in 1999. The Regulations 
governing the violations at issue are found in the 1999 version of 
the Code of Federal Regulations (15 CFR parts 730-774 (1999)). The 
2003 Regulations establish the procedures that apply to this matter.
    \2\ 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. Executive Order 13222 of August 17, 
2001 (3 CFR, 2001 Comp., p. 783 (2002)), which has been extended by 
successive Presidential Notices, the most recent being that of 
August 7, 2003 (68 FR 47833, August 11, 2003), continues the 
Regulations in effect under IEEPA.
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    Specifically, the charging letter alleged that, on or about July 
17, 1999, Arian reexported certain computers and encryption software, 
items subject to the Regulations and classified under Export Control 
Classification Numbers 4A994 and 5D002, from Germany to Iran without 
obtaining a license from BIS as required by Sec.  746.7 of the 
Regulations. BIS alleged that, by reexporting the computers and 
encryption software, Arian committed one violation of Sec.  764.2(a) of 
the Regulations.
    The charging letter further alleged that, in connection with the 
reexport, Arian caused the transport of certain computers and 
encryption software to Iran with knowledge that a violation of the 
Regulations would occur. BIS alleged that, by causing the reexport of 
items with knowledge that a violation of the Regulations would occur, 
Arian committed one violation of Sec.  764.2(e) of the Regulations.

[[Page 28121]]

    On the basis of the factual record before the Administrative Law 
Judge (ALJ), he found that the respondent failed to file an answer to 
BIS's charging letter within the time required by the Regulations. 
Indeed, service of the notice of issuance of a charging letter on the 
respondent was properly effected on July 22, 2003, a response to the 
charging letter was due no later than August 21, 2003, and the record 
does not include any such response from Arian. The ALJ therefore held 
Arian in default.
    Under the default procedures set forth in Sec.  766.7(a) of the 
Regulations, ``[f]ailure of the respondent to file an answer within the 
time provided constitutes a waiver of the respondent's right to 
appear,'' and ``on BIS's motion and without further notice to the 
respondent, [the ALJ] shall find the facts to be as alleged in the 
charging letter.'' Accordingly, on April 8, 2004, the ALJ issued a 
Recommended Decision and Order, in which he found that the facts 
alleged in the charging letter constitute the findings of fact in this 
matter and, thereby, establish that Arian committed one violation of 
Sec.  764.2(a) and one violation of Sec.  764.2(e) of the Regulations. 
The ALJ also recommended a penalty of a ten-year denial of Arian's 
export privileges.
    Pursuant to Sec.  766.22 of the Regulations, the ALJ's Recommended 
Decision and Order has been referred to me for final action. Based on 
my review of the entire record, I find that the record supports the 
ALJ's findings of fact and conclusions of law regarding each of the 
above-referenced charges. I also find that the penalty recommended by 
the ALJ is appropriate, given the knowing nature of the violations and 
the importance of preventing future unauthorized exports to Iran, an 
embargoed country. I therefore affirm the findings of fact and 
conclusions of law in the ALJ's Recommended Decision and Order.
    It is hereby ordered,
    First, that, for a period of 10 years from the date on which this 
Order takes effect, Arian Transportvermittlungs GmbH (``Arian''), 
Morsestrasse 1, D-50769 Cologne, Germany, and all of its successors or 
assigns, and, when acting for or on behalf of Arian, its officers, 
representatives, agents, and employees (individually referred to as ``a 
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 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 an 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 that is subject to 
the Regulations, or in connection with 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 a Denied Person any item 
subject to the Regulations;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by a 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 a 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 a Denied person of any item subject to 
the Regulations that has been exported from the United States;
    D. Obtain from a 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 a Denied Person, or 
service any item, of whatever origin, that is owned, possessed, or 
controlled by a 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 
Sec.  766.23 of the Regulations, any person, firm, corporation, or 
business organization related to a 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 shall be served on the Denied Persons and 
on BIS, and shall be published in the Federal Register. In addition, 
the ALJ's Recommended Decision and Order, except for the section with 
the heading ``Recommended Order,'' shall be published in the Federal 
Register.
    This Order, which constitutes the final agency action in this 
matter, is effective upon publication in the Federal Register.

    Dated: May 12, 2004.
Kenneth I. Juster,
Under Secretary of Commerce for Industry and Security.
[FR Doc. 04-11210 Filed 5-17-04; 8:45 am]
BILLING CODE 3510-33-M