[Federal Register Volume 69, Number 190 (Friday, October 1, 2004)]
[Notices]
[Pages 58884-58889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-22057]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket Nos. 03-BIS-12 and 03-BIS-11]


In the Matters of: Xinjian Yi and Yu Yi, Respondents; Decision 
and Order

    On November 5, 2003, the Bureau of Industry and Security (``BIS'') 
issued separate charging letters against Xinjian Yi and Yu Yi 
(collectively known as ``Respondents''), alleging that the Respondents 
had each committed three violations of the Export Administration 
Regulations (the ``Regulations''),\1\ which were issued under the 
Export Administration Act of 1979, as amended (50 U.S.C. app. 2401-2420 
(2000)) (the ``Act''),\2\
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    \1\ The alleged violations occurred from 1998 through 1999. The 
Regulations governing the violations at issue are found in the 1998 
and 1999 versions of the Code of Federal Regulations (15 CFR parts 
730-774 (1998-1999)). The 2004 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 by Pub. 
L. 106-508, 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 6, 2004 (69 FR 48763, August 
10, 2004), continues the Regulations in effect under IEEPA.
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    BIS charged that Xinjian Yi: (i) In or about June 1998 through in 
or about July 1998, conspired with others to export from the United 
States to the People's Republic of China (``PRC'') thermal imaging 
cameras, which were classified under export control classification 
number (``ECCN'') 6A003 and controlled for national security reasons, 
without a BIS export license in violation of Section 764.2(d) of the 
Regulations; (ii) in or about July 1998, exported the national security 
controlled thermal

[[Page 58885]]

imaging cameras to the PRC without the required license in violation of 
Section 764.2(a) of the Regulations; and (iii) in or about July 1999, 
made a false statement to an Office of Export Enforcement (``OEE'') 
Special Agent about the thermal imaging cameras during the course of 
the OEE investigation, in violation of Section 764.2(g) of the 
Regulations.
    BIS charged that Yu Yi: (i) In or about June 1998 through in or 
about July 1998, conspired with others to export from the United States 
to the PRC thermal imaging cameras, which were classified under ECCN 
6A003 and controlled for national security reasons, without a BIS 
export license in violation of Sec.  764.2(d) of the Regulations; (ii) 
aided and abetted the unlicensed export of the national security 
controlled thermal imaging cameras to the PRC in violation of Sec.  
764.2(b) of the Regulations; and (iii) in or about April 1999, made a 
false statement to an OEE Special Agent about the thermal imaging 
cameras in the course of the OEE investigation, in violation of Sec.  
764.2(g) of the Regulations.
    These cases were consolidated pursuant to a motion filed by the 
parties.
    On March 12, 2004, BIS filed a Motion for Summary Decision on two 
of the three charges filed against each Respondent.\3\ Respondents 
opposed the Motion. On April 28, 2004, the Administrative Law Judge 
(``ALJ'') granted BIS's Motion for Summary Decision, holding that 
Xinjian Yi and Yu Yi had each violated Sec.  764.2(d) of the 
Regulations by conspiring to export thermal imaging cameras to the PRC 
without the required license. He also found that Xinjian Yi had 
violated Sec.  764.2(a) of the Regulations by making the unlicensed 
export of the thermal imaging cameras, and that Yu Yi had violated 
Sec.  764.2(b) by aiding and abetting the unlicensed export to the PRC. 
Specifically, the ALJ held that BIS ``met it's [sic] burden by the 
submission of reliable, probative and relevant evidence * * * in that 
no genuine issue of material fact was present and [BIS] was entitled to 
judgment as a matter of law.'' \4\ ALJ's Recommended Decision and Order 
at 8.
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    \3\ BIS did not move for summary decision as to the false 
statement charge against each Respondent.
    \4\ After the issuance of the ALJ's Order granting BIS's Summary 
Decision Motion, BIS withdrew the remaining false statement charges 
against each Respondent.
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    In June 2004, the parties filed their briefs for the proposed civil 
penalties. On August 25, 2004, the ALJ issued his Recommended Decision 
and Order, recommending that each Respondent be fined $22,000 and that 
each Respondent's export privileges under the Regulations be denied for 
10 years, as proposed by BIS. Specifically, the ALJ found that the 
``record does not support the Respondent's [sic] arguments to allow 
mitigation of the proposed civil penalty assessments.'' ALJ's 
Recommended Decision and Order at 11.
    Pursuant to Sec.  766.22 of the Regulations, the ALJ's Recommended 
Decision and Order has been referred to me for final action. In the 
Respondents' responses to the ALJ's Recommended Decision and Order, the 
Respondents do not challenge the ALJ's factual and legal conclusions 
with respect to each of the charges. Rather, the Respondents argue that 
the ALJ's civil penalty assessment is unjustified and should be 
mitigated.
    Based upon my review of the entire record, I find that the evidence 
supports the ALJ's findings of fact and conclusions of law regarding 
each of the above-referenced charges. I also find that the penalties 
recommended by the ALJ are appropriate given the sensitivity of the 
cameras involved, the country of ultimate destination, the concerted 
actions of the Respondents, the inconsistent and incomplete information 
provided by the Respondents, and the absence of strong or persuasive 
mitigating factors. The Repondent's concerted actions to export 
national security-controlled items to the PRC without the required 
export license from BIS is a significant aggravating factor. BIS has 
determined that this type of transaction is detrimental to U.S. 
national security interests, and has, in fact, denied a license for the 
export of similar items to the same PRC end-user at issue. That 
significant aggravating factor combined with inconsistent statements 
made by the Respondents during the course of the investigation and the 
incomplete financial information provided cannot be overcome by the 
mitigating factors alleged by the Respondents.
    It is hereby ordered,
    First, that a civil penalty of $22,000 is assessed against each 
Xinjian Yi and Yu Yi, which shall be paid to the Department of Commerce 
within 30 days from the date of entry of this Order. Payment 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 owned 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, 
Xinjian Yi and Yu Yi will be assessed, in addition to the full amount 
of the civil penalty and interest, a penalty charge and an 
administrative charge, as further described in the attached Notice.
    Third, that, for a period of 10 years from the date on which this 
order takes effect, Xinjian Yi of Wuhan, People's Republic of China, 
and Yu Yi of Wuhan, People's Republic of China, their successors or 
assigns and, when acting for or on behalf of them, their officers, 
representatives, agents, or 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 any 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 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 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

[[Page 58886]]

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.
    Fifth, that, after notice and opportunity for comment as provided 
in Seciton 766.23 of the Regulations, any person, firm, corporation, or 
business organization related to 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.
    Sixth, 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 Sanction'' and the export licensing information 
\5\ on pages 7 and 10, shall be published in the Federal Register.
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    \5\ The export licensing information on pages 7 and 10 of the 
ALJ Recommended Decision it protected by the confidentiality 
provisions of section 12(c) of the Act.
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    This Order, which constitutes the final ageancy action in this 
matter, is effective upon pulication in the Federal Register.

    Dated: September 27, 2004.
Kenneth I. Juster,
Under Secretary of Commerce for Industry and Security.

Instructions for Payment of Civil Penalty

    1. The civil penalty check should be made payable to: U.S. 
Department of Commerce.
    2. The check should be mailed to: U.S. Department of Commerce, 
Bureau of Industry and Security, Export Enforcement Team, Room H-6883, 
14th Street and Constitution Avenue, NW., Washington, DC 20230. Attn: 
Sharon Gardner.

Notice

    The Order to which this Notice is attached describes the reasons 
for the assessment of the civil monetary penalty. It also specifies the 
amount owed and the date by which payment of the civil penalty is due 
and payable.
    Under the Debt Collection Act of 1982, as amended (31 U.S.C. 3701-
3720E (2000)), and the Federal Claims Collection Standards (31 CFR 
parts 900-904 (2002)), interest accrues on any and all civil monetary 
penalties owed and unpaid under the Order, from the date of the Order 
until paid in full. The rate of interest assessed respondent is the 
rate of the current value of funds to the U.S. Treasury on the date 
that the Order was entered. However, interest is waived on any portion 
paid within 30 days of the date of the Order. See 31 U.S.C.A section 
3717 and 31 CFR 901.9.
    The civil monetary penalty will be delinquent if not paid by the 
due date specified in the Order. If the penalty becomes delinquent, 
interest will continue to accrue on the balance remaining due and 
unpaid, and respondent will also be assessed both an administrative 
charge to cover the cost of processing and handling the delinquent 
claim and a penalty charge of six percent per year. However, although 
the penalty charge will be computed from the date that the civil 
penalty becomes delinquent, it will be assessed only on sums due and 
unpaid for over 90 days after that date. See 31 U.S.C.A. section 3717 
and 31 CFR 901.9.
    The foregoing constitutes the initial written notice and demand to 
respondent in accordance with Sec.  901.2(b) of the Federal Claims 
Collection Standards (31 CFR 901.2(b)).

Recommended Decision and Order and Order Granting Agency's 
Recommendation for Imposition of Civil Penalty Assessment

    On November 5, 2003, the Bureau of Industry and Security (BIS or 
Agency) filed formal Complaints against Xinjian Yi and Yu Yi charging 
each with three (3) separate violations of the Export Administration 
Regulations (EAR) (15 CFR parts 730-74) \1\ issued pursuant to the 
Export Administration Act of 1979 (Act), as amended (50 U.S.C. 2401-420 
(1991 and Supp. 2001)).\2\ Upon motion by the parties, both cases were 
consolidated into a single proceeding. On March 12, 2004 BIS filed a 
Motion for Summary Decision regarding the first and second charges 
filed against both Respondents. By Order issued on April 28, 2004, the 
Undersigned Administrative Law Judge granted the Agency's Motion for 
Summary Decision (Summary Decision Order). In so doing, it was held 
that the Agency met its burden to prove the respective charges that 
Xinjian Yi: (1) Conspired to violate the Export Administration 
Regulations and (2) unlawfully exported thermal imaging cameras to the 
People's Republic of China (PRC) and that Yu Yi: (1) Conspired to 
violate the Export Administration Regulations and (2) aided and abetted 
the unauthorized export of thermal imaging cameras to the People's 
Republic of China. At that time, a hearing was set for May 18, 2004, to 
hear the final remaining charges.
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    \1\ The regulations are currently codified in the Code of 
Federal Regulations (CFR) at 15 CFR parts 730-774 (2004). The 
regulations governing the violations at issue are found in the 1998 
version of the CFR. The 1998 regulations and the degree to which 
they pertain to this matter are substantially the same as the 2004 
version.
    \2\ From August 21, 1994, through November 12, 2000, the Act was 
in lapse. During that period, the President, through Executive Order 
12924, which has been extended by successive Presidential Notices, 
continued the Regulations in effect under the International Economic 
Powers Act (50 U.S.C. 1701-1706 (1994 & Supp. V. 1999)) (``IEEPA''). 
On November 13, 2000, the Act was reauthorized and it remained in 
effect through August 20, 2001. Since that time, the Act has been in 
lapse and the President, through Executive Order 13222 of August 17, 
2001, as extended by subsequent Notices (the last being found at 68 
FR 47833 (August 7, 2003)), has continued the regulations in effect 
under IEEPA.
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    On or about May 10, 2004, the Agency notified this office of its 
intent to withdraw the remaining third charge filed against each 
Respondent. The parties requested to cancel the scheduled hearing and 
sought to file briefs regarding final sanctions. On May 19, 2004, an 
Order was issued to cancel the scheduled hearing and to provide the 
parties an opportunity to file briefs on the issue of sanctions.
    On June 24, 2004, Respondents Xinjian Yi and Yu Yi filed their 
Brief on Proposed Civil Penalty (Respondent's Brief) with nine (9) 
attached exhibits. Respondent's Brief argued for the mitigation of any 
civil monetary penalty and submitted that the appropriate penalty 
should be the denial of Respondent's export privileges for a reasonable 
period of time (one year period of time for each charge). On June 29, 
2004, the Agency filed its Recommendation for Imposition of 
Administrative Penalties Against Xinjian Yi and Yu Yi (Agency's Brief) 
with six (6) exhibits. The Agency seeks the maximum civil penalty 
assessment of $22,000.00 and a ten (10) year period of time for denial 
of export privileges for each Respondent.
    As a result of the Agency's decision to withdraw the remaining 
charges, the issuance of the April 28, 2004, Summary Decision Order has 
effectively decided the legal issues in this matter. However, it should 
be noted that no credibility determinations have been made regarding 
the parties and no

[[Page 58887]]

witness testimony has been received. I have carefully reviewed the 
record in its entirety and specifically, the parties' briefs and 
exhibits concerning the award of sanctions. I find that the Agency has 
sustained its burden for the award of sanctions as it proposed. 
Respondents' arguments are well pled but fall short of providing the 
necessary legal documentation to overcome or mitigate the Agency's 
proposed sanctions. As such, the Agency is hereby awarded the full 
civil penalty assessment of $22,000.00 and a ten (10) year period of 
time for denial of export privileges as filed against each Respondent. 
The civil penalty assessment is based on the following.

Charging Letter

    The final charges against the Respondents are as follows:
Xinjian Yi
    Charge 1: Conspiracy To Violate the Export Administration 
Regulations--15 CFR 764.2(d).

Beginning on or about June 1998 and continuing through and in or 
about July 1998, Xinjian Yi conspired and acted in concert with 
others, known and unknown, to violate the Regulations. The purpose 
of the conspiracy was to export thermal imaging cameras from the 
United States to the People's Republic of China without a BIS export 
license. The thermal imaging cameras were items subject to the 
Regulations and covered by export control classification number 
(``ECCN'') 6A003.b. As set forth in Sec.  742.2 of the Regulations, 
a BIS export license was required before the thermal imaging cameras 
could be exported to the People's Republic of China. To accomplish 
the conspiracy, the conspirators, including Xinjian Yi, participated 
in a scheme to have a co-conspirator purchase the cameras from a 
U.S. distributor, have the U.S. distributor ship the cameras to a 
destination in the United States, and then have a co-conspirator 
carry the cameras by hand to the People's Republic of China without 
a BIS export license. In doing so, Xinjian Yi committed one 
violation of Sec.  764.2(d) of the Regulations.

    Charge 2: Exporting Thermal Imaging Cameras to the People's 
Republic of China Without the Required BIS Export License--15 CFR Sec.  
764.2(a).

In connection with the conspiracy referenced in Charge 1, in or 
about July 1998, Xinjian Yi exported or caused the export of the 
three thermal imaging cameras, items covered by ECCN 6A003.b of the 
Regulations, from the United States to the People's Republic of 
China without a license from BIS as required by Sec.  742.4 of the 
Regulations. In doing so, Xinjian Yi committed one violation of 
Sec.  764.2(b) of the Regulations.
Yu Yi
    Charge 1: Conspiracy To Violate the Export Administration 
Regulations--15 CFR Sec.  764.2(d).

Beginning in or about June 1998 and continuing through and in or 
about July 1998, Yu Yi conspired and acted in concert with others, 
known and unknown, to violate the Regulations. The purpose of the 
conspiracy was to export thermal imaging cameras from the United 
States to the People's Republic of China without a BIS export 
license. The thermal imaging cameras were items subject to the 
Regulations and covered by export control classification number 
(``ECCN'') 6A003.b. As set forth in Sec.  742.2 of the Regulations, 
a BIS export license was required before the thermal imaging cameras 
could be exported to the People's Republic of China. To accomplish 
the conspiracy, the conspirators, including Yu Yi, participated in a 
scheme to have a co-conspirator purchase the cameras from a U.S. 
distributor, have the U.S. distributor ship the cameras to a 
destination in the United States, and then have a co-conspirator 
carry the cameras by hand to the People's Republic of China without 
a BIS export license. In doing so, Yu Yi committed one violation of 
Sec.  764.2(d) of the Regulations.

    Charge 2: Aiding and Abetting the Unauthorized Export of Thermal 
Imaging Cameras to the People's Republic of China--15 CFR Sec.  
764.2(b).

In connection with the conspiracy referenced in Charge 1, in or 
about July 1998, Yu Yi aided and abetted the unauthorized export of 
the three thermal imaging cameras, items covered by ECCN 6A003.b of 
the Regulations, from the United States to the People's Republic of 
China without a license from BIS as required by Sec.  742.4 of the 
Regulations. In doing so, Yu Yi committed one violation of Sec.  
764.2(b) of the Regulations.

Finding of Facts

    The findings of facts, unless otherwise noted, were previously 
determined by the issuance of the April 28, 2004 Summary Decision 
Order. They are essentially as follows: \3\
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    \3\ Unless otherwise noted the following designations are used: 
(1) Exhibits referenced are those attached with the Agency's Motion 
for Summary Decision, (2) any reference made to Respondents' 
exhibits (Opposition Motion to BIS's Motion for Summary Decision) 
will be designated as R-1, R-2, etc.
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    1. Xinjian Yi is a chinese citizen who lives in Wuhan, People's 
Republic of China (``PRC'').
    2. At the times relevant hereto, Mr. Yi was a professor in the 
Department of Opto-electronic Engineering at Huazhong University of 
Science and Technology in Wuhan, PRC.
    3. Yu Yi is the daughter of Xinjian Yi. See the July 21, 1999 
letter from Yu Yi, which is attached hereto as Exhibit E.
    4. At the times relevant hereto, Yu Yi was employed in Dallas, 
Texas. Ex.E.
    5. In 1998, Xinjian Yi contacted Yu Yi and requested her assistance 
in purchasing thermal imaging cameras (``cameras'') from Accurate 
Locators, Inc., a U.S. company. Exs. D and E.
    6. Pursuant to her father's request, Yu Yi contacted Accurate 
Locators and purchased one thermal imaging camera. Exs. D and E.
    7. Yu Yi told Accurate Locators to send the camera to her sister, 
Yong Yi, who lived in Boston, Massachusetts. Exs. D and E.
    8. Yu Yi wired payment for the camera to Accurate Locators. Ex.E.
    9. The funds used by Yu Yi to pay for the camera were transferred 
to her from the PRC. Ex. E.
    10. Accurate Locators shipped the camera to Yong Yi's address in 
Boston. Exs. D and E.
    11. Xinjian Yi traveled from the PRC to Boston on or about June 
1998 and stayed with his daughter, Yong Yi. Exs. B and E.
    12. After arriving in Boston, Xinjian Yi took possession of the 
camera that had been shipped to his daughter's house in Boston. Exs. B 
and E.
    13. Xinjian Yi then asked Yu Yi to buy two more cameras from 
Accurate Locators. Ex. E.
    14. Pursuant to her father's request, Yu Yi purchased two 
additional thermal imaging cameras for him from Accurate Locators. Ex. 
E.
    15. Yu Yi told Accurate Locators to send the two cameras using 
funds that had been wired to her from the PRC. Ex. E.
    16. Yu Yi wired the company payment for the two cameras using funds 
that had been wired to her from the PRC. Ex. E.
    17. Xinjian Yi received all three cameras and on or about July 1998 
traveled back to the PRC with the three cameras. Ex. B.
    18. Yu Yi believed the cameras were for use by Xinjian Yi for some 
research he was conducting at the University in the PRC. Ex. E.
    19. The cameras were items subject to the regulations and 
classified under Export Control Classification Number 6A003.b. A copy 
of the licensing determinations is attached hereto as Ex. F.
    20. A license from BIS was required for the export of the cameras 
from the United States to the PRC. Ex. F.
    21. No License from BIS was obtained for the export of the cameras 
from the United States to PRC. Ex. B.
    In addition to the above, the following findings of fact have been 
determined based on the parties' recent filings.
    22. Yu Yi now resides in the PRC. Respondent's Brief at 5.
    23. The thermal imaging cameras in question remain in the PRC. 
Agency's Brief, Ex. 1.
    24. [Redacted. See footnote 5.] was denied an export license for 
the

[[Page 58888]]

purchase of a [Redacted.] thermal imaging camera in 2000 (subsequent to 
the unlawful export in this matter) based on the determination by the 
Department of Commerce that ``this export would be detrimental to U.S. 
national security interests.'' Agency's Brief, Ex. 2.
    25. Yu Yi's March 31, 1999 United States bank statement contained a 
total amount of $38,570.89 U.S. dollars. Agency's Brief, Ex. 6. A 
deposit certification in the amount of $5,040.75 U.S. dollars was made 
by Yu Yi to the Bank of China on May 20, 2003. Respondent's Brief, Ex. 
4.

Conclusions of Law

    1. Xinjian Yi and Yu Yi conspired to violate the Export 
Administration Regulation found under 15 CFR 764.2(d), issued pursuant 
to the Export Administration Act of 1979, as amended (50 U.S.C. app. 
2401-420 (1991 & Supp. 2001)). They participated in a scheme to export 
thermal imaging cameras which are subject to the regulations and 
covered by an export control classification number (ECCN) requiring a 
BIS export license for export to the People's Republic of China.
    2. Xinjian Yi violated the Export Administration Regulation found 
under 15 CFR 764.2(a), issued pursuant to the Export Administration Act 
of 1979, as amended (50 U.S.C. app. 2401-420 (1991 & Supp. 2001)) by 
exporting thermal imaging cameras to the People's Republic of China 
without having an export license as required by Sec.  764.2(a).
    3. Yu Yi violated the Export Administration Regulations found under 
15 CFR 764.2(b), issued pursuant to the Export Administration Act of 
1979, as amended (50 U.S.C. app. 2401-420 (1991 & Supp. 2001)) by 
aiding and abetting Xinjian Yi with the unauthorized export of thermal 
imaging cameras to the People's Republic of China.

Discussion

    As held by the April 28, 2004, Summary Decision Order, it was 
determined that the Agency met it's burden by the submission of 
reliable, probative, and relevant evidence with regard to the 
respective two (2) charges filed against Respondents in that no genuine 
issue of material fact was present and the Agency was entitled to 
judgment as a matter of law. Following the Agency's subsequent 
withdrawal of the respective final third charge and the filing of the 
parties' briefs concerning the award of sanctions, this matter is now 
ripe for issuance of the Recommended Decision and Order.
    Respondents argue and submit exhibits to support the view that they 
acted without knowledge and intent which inadvertently led to 
violations of the EAR. Respondents contend that the purchase of the 
thermal imaging cameras was based on the ability to get similar cameras 
at a cheaper price in the United States. The thermal imaging cameras 
were to be used for a university research project to develop a system 
for detecting and analyzing overheating problems in power distribution 
lines. For this reason Xinjian Yi contacted his daughter, Yu Yi, who at 
that time resided in the United States, to assist him with the purchase 
and delivery of the thermal imaging cameras from the United States to 
the People's Republic of China (PRC). Yu Yi's involvement is simply 
argued to be that of a dutiful daughter who sought not benefit, other 
than the gratitude of her father.
    The Agency contends that Respondents' lack credibility and noted, a 
``pattern of untrue statements'' allegedly made during the 
investigation of this matter. While no determination is made regarding 
Respondents' credibility, the Report of Investigative Activity 
(Respondent Brief, Ex. 3) indicated that Yu Yi was ``combative and 
evasive.'' More importantly, however, Respondents have failed to 
provide support for their arguments, including, but not limited to, 
whether or not the university research project was ever conducted or 
actually contemplated. At this point, the record reveals no documentary 
evidence, and Respondents have not provided, other than arguments, that 
Respondents' actions were simply innocent and inadvertent.
    Respondents further argue that the ultimate destination (the PRC) 
for the thermal imaging cameras does not raise any terrorism concerns 
because the PRC is not listed as a state sponsor of terrorism by the 
United States. Respondents support their claim, in part, by submitting 
documentation to show that thermal imaging cameras, arguably of similar 
quality to those at issue, are widely available in the PRC. Respondents 
contend that even if requested, an export license would likely have 
been granted and that no United States national security interest would 
have been challenged.
    The Agency disagrees and submits documentation that shows 
[Redacted. See footnote 5.] made a request in November 1999 for an 
export license for a [Redacted.] thermal imaging camera [Redacted.] 
This request was rejected by the Department of Commerce as 
``detrimental to U.S. national security interests.'' While Respondents 
have submitted numerous documents that show the apparent availability 
of similar thermal imaging cameras in the PRC, the fact remains that 
the United States Department of Commerce and the Bureau of Industry and 
Security have classified the thermal imaging cameras in question under 
an ECCN requiring an export license determination and have denied such 
request as ``detrimental to U.S. national security interests.'' 
[Redacted.]
    Finally, Respondents contend that the inadvertent violation of the 
EAR was simply the result of inexperience by novice persons who were 
unaware of export laws and regulations. Respondents do not have any 
prior history of export violations and argue that they never attempted 
to hide or conceal their identities or actions. Respondents' further 
argue an inability to pay stating that Xinjian Yi is now retired and 
living off his pension and Yu Yi is unemployed and raising a family. 
Based on all of the above, Respondents seek to totally mitigate or in 
the alternative, suspend or defer the monetary civil penalty assessment 
while seeking an export period of denial for one (1) year, (citing In 
the Matter of: Basem A. Alhalabi, 03-BIS-03, June 24, 2003 (settlement 
agreement denying Respondent's export privileges for a one (1) year 
period of time for the export of a thermal imaging camera to Syria)).

Conclusion

    Responsents' filings have been well written and argued throughout 
this proceeding. However, Respondents fail to provide in the record the 
necessary legal documentation to support mitigation of the proposed 
civil penalty assessments. Simply put, the record does not support the 
Respondent's arguments to allow mitigation of the proposed civil 
penalty assessments. The record indicates that Yu Yi was not totally 
cooperative during the investigation, that the financial documentation 
submitted is incomplete and Yu Yi's bank statements and deposit 
documentation raises other questions rather than provide answers. The 
record also lacks any affidavits or sworn statements, including 
documentation of Xinjian Yi's proposed research. With regard to the 
cited settlement agreement for Alhalabi, no weight is given to the 
sanction for this matter. Wherefore, Respondents' supporting 
documentation is not sufficient to overcome the Agency's proposal to 
individually assess a civil penalty assessment of $22,000.00 and a ten 
(10) year period of time for denial of export privileges.

[[Page 58889]]

    [Section on ``Recommended Sanction'' redacted. See footnote 5.]

    Done and dated this 25th day of August, 2004, at New York, New 
York.
Walter J. Brudzinski,
Administrative Law Judge.
[FR Doc. 04-22057 Filed 9-30-04; 8:45 am]
BILLING CODE 3510-33-M