[Federal Register Volume 70, Number 219 (Tuesday, November 15, 2005)]
[Notices]
[Pages 69314-69316]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-22607]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[05-BIS-02]


In the Matter of: Suburban Guns (Pty) Ltd., 119 Main Road, 
Plumstead 7800, Cape Town, South Africa, Respondent

Decision and Order

    This matter is before me upon a Recommended Decision and Order of 
an Administrative Law Judge (``ALJ''), as further described below.
    In a charging letter filed on January 28, 2005, the Bureau of 
Industry and Security (``BIS'') alleged that respondent Suburban Guns 
(Pty) Ltd. (``Suburban Guns'') committed four violations of the Export 
Administration Regulations (the ``Regulations''),\1\ issued under the 
Export Administration Act of 1979, as amended (50 U.S.C. app. 
Sec. Sec.  2401-2420 (2000)) (the ``Act'').\2\ Specifically, BIS 
alleged that Suburban Guns committed two violations of section 764.2(a) 
and two violations of section 764.2(e) of the Regulations. The charging 
letter alleged that, in violation of a denial of export privileges 
imposed against it by BIS on April 1, 1998,\3\ Suburban Guns placed two 
orders with U.S. companies for shotgun screw chokes, choke tubes, and 
barrels, which are classified under Export Control Classification 
Number (``ECCN'') 0A984, and for other shotgun accessories, which are 
designated as EAR99 items.\4\ The charging letter further alleged that 
Suburban Guns committed these acts in violation of the Denial Order 
imposed against it with knowledge that a violation of an Order issued 
under the Act and the Regulations would occur.
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    \1\ The charged violations occurred in 2000. The Regulations 
governing the violations at issue are found in the 2000 version of 
the Code of Federal Regulations. 15 CFR parts 730-774 (2000). The 
2005 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 
Public Law No. 106-508 (114 Stat. 2360 (2000)) 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)), which has been 
extended by successive Presidential Notices, the most recent being 
that of August 2, 2005 (70 FR 45273, Aug. 5, 2005), has continued 
the Regulations in effect under IEEPA.
    \3\ Action Affecting Export Privileges; Suburban Guns (Pty) 
Ltd., 63 FR 15828 (Apr. 1, 1998).
    \4\ EAR99 is a designation for items subject to the Regulations 
but not listed on the Commerce Control List.
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    BIS's charging letter was served by certified mail on Suburban Guns 
on January 28, 2005, and received on or about February 10, 2005. 
Suburban Guns did not file an answer to BIS's charging letter with the 
ALJ.
    On August 4, 2005, BIS filed a Motion for Default with the ALJ, 
recommending that Suburban Guns be denied export privileges for a 
period of five years, beginning on July 25, 2007 when its current 
Denial Order expires, and that Suburban Guns be required to pay a 
$44,000 penalty. Thereafter, on September 21, 2005, based on the record 
before it, the ALJ issued a Recommended Decision and Order in which he 
found that Suburban Guns committed four violations of the Regulations 
and recommended the penalty proposed by BIS--denial of Suburban Guns' 
export privileges for five years, beginning on July 25, 2007, and 
imposition of a $44,000 penalty against Suburban Guns.
    The ALJ's Recommended Decision and Order, together with the entire 
record in this case, has been referred to me for final action under 
section 766.22 of the Regulations. I find that the record supports the 
ALJ's findings of fact and conclusions of law regarding the liability 
of Suburban Guns for the above-referenced charges. I also find that the 
penalty recommended by the ALJ is appropriate, given the nature of the 
violations and the importance of preventing future unauthorized 
exports. Based on my review of the entire record, I affirm the findings 
of fact and conclusions of law in the ALJ's Recommended Decision and 
Order.
    Accordingly, it is Therefore Order,
    First, that a civil penalty of $44,000 is assessed against Suburban 
Guns, which shall be paid to the U.S. 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, 
Suburban Guns will 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 the timely payment of the civil penalty set forth above 
is hereby made a condition to the granting, restoration, or continuing 
validity of any export license, license exception, permission, or 
privileged granted, or to be granted, to Suburban Guns. Accordingly, if 
Suburban Guns should fail to pay the civil penalty in a timely manner, 
the undersigned may enter an Order denying all of Suburban Guns' export 
privileges for a period of one year from the date of entry of this 
Order.
    Fourth, that, for a period of five years from July 25, 2007, the 
date of expiration of the Denial Order imposed against Suburban Guns in 
Action Affecting Export Privileges; Suburban Guns (Pty) Ltd., 63, FR 
15828 (Apr. 1, 1998), Suburban Guns (Pty) Ltd. 119 Main Road, P.O. Box 
30, Plumstead 7800, Cape Town, South Africa, and all of its successors 
or assigns, and, when acting for or on behalf of Suburban Guns, its 
officers, representatives, agents, and 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 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.
    Fifth, 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;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by the Denied Person of the ownership,

[[Page 69315]]

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 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;
    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; 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 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. For purposes of this paragraph, servicing means 
installation, maintenance, repair, modification or testing.
    Sixth, 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 the 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.
    Seventh, that this Order does not prohibit any export, re-export 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.
    Eighth, that this Order shall be served on the Respondent and on 
BIS, and shall be published in the Federal Register. In addition, the 
ALJ's Recommended Decision and Order, except for the section related to 
the Recommended Order, shall be published in the Federal Register.
    This Order, which constitutes the final agency section in this 
matter, is effective upon publication in the Federal Register.

    Dated: October 20, 2005.
David H. McCormick,
Under Secretary for Industry and Security.

Department of Commerce

Bureau of Industry and Security

[Docket No. 05-BIS-02]
In the Matter of: Suburban Guns (Pty) Ltd., 119 Main Road, P.O. Box 30, 
Plumstead 7800, Cape Town, South Africa, Respondent

Recommended Decision and Order

    On January 28, 2005, the Bureau of Industry and Security, U.S. 
Department of Commerce (hereinafter, ``BIS''), issued a charging 
letter initiating this administrative enforcement proceeding against 
Suburban Guns (Pty) Ltd. The charging letter alleged that Suburban 
Guns (Pty) Ltd. committed four (4) violations of the Export 
Administration Regulations (currently codified at 15 CFR parts 730-
74 (2005))(``the Regulations''),\1\ issued under the Export 
Administration Act of 1979, as amended.\2\
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    \1\ The charged violations occurred in 2000. The Regulations 
governing the violations at issue are found in the 2000 version of 
the Code of Federal Regulations (15 CFR parts 730-74 (2000)). The 
2005 Regulations establish the procedures that apply to this matter.
    \2\50 U.S.C. Sec. Sec.  2401-2420 (2000) (hereinafter, ``the 
Act''). From August 21, 1994 through November 12, 2000, the Act was 
in lapse. During that period, the President, through Executive Order 
12924, which was 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. 1701-06 (2000)) 
(hereinafter, ``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 2, 2005 (70 FR 
45273 (August 5, 2005)), has continued the Regulations in effect 
under IEEPA.
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    Specifically, the charging letter alleged that Suburban Guns 
(Pty) Ltd. violated the Denial Order imposed against it by placing 
an order on or about February 2, 2000, with a U.S. company for 
shotgun screw chokes, choke tubes, and other accessories, which were 
exported to Suburban Guns (Pty) Ltd. on or about March 1, 2000 
(Charge 1). The charging letter also alleged that Suburban Guns 
(Pty) Ltd. violated its Denial Order by placing an additional order 
on or about March 29, 2000, with a U.S. company for shotgun barrels 
and screw chokes, which were exported to Suburban Guns (Pty) Ltd. on 
or about March 30, 2000 (Charge 3). Pursuant to the Denial Order 
imposed against it, Suburban Guns (Pty) Ltd. was prohibited from 
participating in any transaction involving any item subject to the 
Regulations that was exported or to be exported from the United 
States. See Action Affecting Export Privileges; Suburban Guns (Pty) 
Ltd., 63 FR 15828 (Apr. 1, 1998). The BIS charging letter also 
alleged that, in both exports described above, Suburban Guns (Pty) 
Ltd. ordered and purchased the items with knowledge that violations 
of an Order issued under the Act and the Regulations would occur 
(Charges 2 and 4).
    Section 766.3(b)(1) of the Regulations provides that notice of 
issuance of a charging letter shall be served on a respondent by 
mailing a copy by registered or certified mail addressed to the 
respondent at the respondent's last known address. In accordance 
with the Regulations, on January 28, 2005, BIS mailed the notice of 
issuance of a charging letter by certified mail to Suburban Guns 
(Pty) Ltd. at: Suburban Guns (Pty) Ltd., 119 Main Road, P.O. Box 30, 
Plumstead 7800, Cape Town, South Africa. BIS has submitted evidence 
that establishes that this charging letter was received by Suburban 
Guns (Pty) Ltd. on or about February 10, 2005. These actions 
constitute service under the Regulations.
    Section 766.6(a) of the Regulations provides, in pertinent part, 
that ``[t]he respondent must answer the charging letter within 
thirty (30) days after being served with notice of issuance of the 
charging letter'' initiating the administrative enforcement 
proceeding. To date, Suburban Guns (Pty) Ltd. has not filed an 
answer to the charging letter.
    Pursuant to the default procedures set forth in section 766.7 of 
the Regulations, I find the facts to be as alleged in the charging 
letter, and hereby determine that those facts establish that 
Suburban Guns (Pty) Ltd. committed two violations of section 
764.2(e), one violation of section 764.2(g), and two violations of 
section 764.2(k) of the Regulations.
    Section 764.3 of the Regulations sets forth the sanctions BIS 
may seek for violations of the Regulations. The applicable sanctions 
are: (1) A monetary penalty; (2) suspension from practice before the 
Department of Commerce; and (3) denial of export privileges under 
the Regulations. See 15 CFR 764.3 (2005). Because Suburban Guns 
(Pty) Ltd. knowingly violated the Regulations by violating the 
Denial Order imposed against it, BIS requests that I recommended to 
the Undersecretary of Commerce for Industry and Security \3\ that 
Suburban Guns (Pty) Ltd.'s export privileges be denied for five (5) 
years, beginning on July 25, 2007, when its current Denial Order, 
issued pursuant to section 11(h) of the Export Administration Act 
expires, and that I imposes to a civil penalty of forty-four 
thousand dollars ($44,000).
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    \3\ Pursuant to section 13(c)(1) of the Export Administration 
Act and section 766.17(b)(2) of the Regulations, in export control 
enforcement cases, the Administrative Law Judge makes recommended 
findings of fact and conclusions of law that the Under Secretary 
must affirm, modify or vacate. The Under Secretary's action is the 
final decision for the U.S. Commerce Department.
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    BIS has suggested these sanctions because Suburban Guns (Pty) 
Ltd.'s actions, in twice violating a Denial Order imposed against 
it, doing so with knowledge that a violation of the Regulations was 
occurring evidence a blatant disregard for U.S. export control laws. 
Further, BIS believes that denying Suburban Guns (Pty) Ltd.'s export 
privileges in this case is not a sufficient deterrent to Suburban 
Guns (Pty) Ltd.'s, as evidenced by its willingness to violate the 
denial order in effect against it. In light of these circumstances, 
BIS believes that appropriate

[[Page 69316]]

section is the denial of Suburban Guns (Pty) Ltd.'s export 
privileges for five (5) years and a civil penalty of forty-four 
thousand dollars ($44,000).
    On this basis, I concur with BIS and recommend that the Under 
Secretary enter an Order denying Suburban Guns (Pty) Ltd.'s export 
privileges for a period of five (5) years and requiring Suburban 
Guns (Pty) Ltd. to pay a civil penalty in the amount of forty-four 
thousand dollars ($44,000). These penalties are consistent with 
penalties imposed in recent cases under the Regulations involving 
violations of denial orders. In the Matters of Yaudat Mustafa Talyi 
a.k.a. Yaudat Mustafa a.k.a. Joseph Talyi, 41 Chamale Cove East, 
Slidell, Louisiana, 70460, Respondents; Decision and Order, 69 FR 
77177 (Dec. 27, 2004) (affirming the ALJ's recommendations that a 
twenty year denial and maximum civil penalty of $11,000 per 
violation was appropriate where an individual exported oil field 
parts to Libya without authorization, in violation of the terms and 
conditions of a BIS order temporarily denying his export privileges 
and with knowledge that a violation would occur; and solicited a 
violation of the Regulations by ordering oil field parts from an 
equipment manufacturer located in the United States without 
authorization and with knowledge that a violation would occur). A 
five (5) year denial of Suburban Guns (Pty) Ltd.'s export privileges 
is warranted because Suburban Guns (Pty) Ltd.'s violations, like 
those of the defendants in the above-cited case, were deliberate 
acts in violation of an order denying export privileges.

Recommended Order--[Redacted]

    Accordingly, I am referring this Recommended Decision and Order 
to the Under Secretary of Commerce for Industry and Security for 
review and final action for the agency, without further notice to 
the respondent, as provided in section 766.7 of the Regulations.
    Within thirty (30) days after receipt of this Recommended 
Decision and Order, the Under Secretary will issue a written order 
affirming, modifying or vacating the Recommended Decision and Order. 
See 15 CFR 766.22(c).
    Done and dated this 21st day of September, 2005.

Walter J. Brudzinski,
Administrative Law Judge, U.S. Coast Guard.

Certificate of Service

    I hereby certify that I have served the foregoing Recommended 
Decision & Order by Federal Express to the following persons:
    Under Secretary for Export Administration, Bureau of Industry 
and Security, U.S. Department of Commerce, Room H-3839, 14th & 
Constitution Avenue, NW., Washington, DC 20230. Phone: 202-482-5301.
    ALJ Docketing Center, Baltimore, 40 S. Gay Street, Room 412, 
Baltimore, Maryland 21202-4022. Phone: 410-962-7434.

    Done and dated this 21st day of September, 2005. New York, NY.

Regina V. Thompson,

Paralegal Specialist, Assistant to the Administrative Law Judge.
[FR Doc. 05-22607 Filed 11-14-05; 8:45 am]
BILLING CODE 3510-DT-M