[Federal Register Volume 71, Number 46 (Thursday, March 9, 2006)]
[Notices]
[Pages 12167-12168]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2239]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Action Affecting Export Privileges; Orcas International, Inc.; In 
the Matter of Orcas International, Inc., 230 U.S. Highway 206, Suite 3, 
Flanders, NJ 07836; Respondent

Order

    The Bureau of Industry and Security, U.S. Department of Commerce 
(``BIS'') has notified Orcas International, Inc. (hereinafter referred 
to as ``Orcas'' of its intention to initiate an administrative 
proceeding against Orcas pursuant to Sec.  766.3 of the Export 
Administration Regulations (currently codified at 15 CFR parts 730-774 
(2005)) (``Regulations'') \1\ and Section 13(c) of the Export 
Administration Act of 1979, as amended (50 U.S.C. app. Sec.  Sec.  2401 
2420 (2000)) (``Act''),\2\ by issuing a proposed charging letter to 
Orcas that alleged that Orcas committed two violations of the 
Regulations. Specifically, the charges are:
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    \1\ The violations charged occurred in 2000 through 2002. The 
Regulations governing the violations at issue are found in the 2000 
through 2002 versions of the Code of Federal Regulations (15 CFR 
parts 730-774 (2000-2002)). 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 has 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, 
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 notice, the most recent 
being that of August 2, 2005 (70 FR 45273 (August 5, 2005)), has 
continued the Regulations in effect under the IEEPA.
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    1. One Violation of 15 CFR 764.2(d)--Conspiracy to Export Toxins to 
North Korea Without the Required License: Beginning in late 2000 and 
continuing into September 2002, Orcas conspired and acted in concert 
with others, known and unknown, to export toxins from the United States 
to North Korea without the required Department of Commerce license. The 
goal of the conspiracy was to obtain toxins, including Aflatoxin (M1, 
P1, Q1) and Staphyloccocal Enterotoxin (A and B), items subject to the 
Regulations and classified under export control classification number 
(``ECCN'') 1C351, on behalf of a North Korean end-user and to export 
those toxins to North Korea. In furtherance of the conspiracy, Orcas 
acquired the toxins from a U.S. company and then attempted to export 
them from the United States to a co-conspirator in the Netherlands who 
was to complete the export to North Korea. Contrary to Section 742.2 of 
the Regulations, no Department of Commerce license was obtained for the 
export of toxins from the United States to North Korea.
    2. One Violation of 15 CFR 764.2(b)--Attempting to Export Toxins 
Without the Required License: On or about September 12, 2002, Orcas 
attempted to export toxins, Aflatoxin (M1, P1, Q1) and Straphyloccocal 
Enterotoxin (A and B), items subject to the Regulations and classified 
under ECCN 1C351, from the United States to North Korea without 
obtaining an export license from the Department of Commerce as required 
by Section 742.2 of the Regulations.
    Whereas, BIS and Orcas have 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
    Whereas, I have approved the terms of such Settlement Agreement;
    It is therefore ordered:
    First, that a civil penalty of $19,800 is assessed against Orcas, 
which shall be paid to the U.S. Department of Commerce no later than 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 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, 
Orcas 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 agreed to in 
paragraph 2.a is hereby made a condition to the granting, restoration, 
or continuing validity of any export license, license exception, 
permission, or privilege granted, or to be granted, to Orcas. Failure 
to make timely payment of the civil penalty set forth above shall 
result in the denial of all Orcas's export privileges under the 
Regulations for a period of one year from the date of imposition of the 
penalty. The payment of the civil penalty is guaranteed by Mr. 
Graneshawar K. Rao (hereinafter referred to as ``K.G. Rao''), in his 
individual capacity, and K.G. Rao and Orcas, are jointly and severally 
liable for the payment of the penalty.
    Fourth, that for a period of four years from the date of entry of 
this Order, Orcas, its successors or assigns, and when, acting for or 
on behalf of Orcas, 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 that is specified on the Commerce 
Control List (``Control List'') \3\ or in any other activity that is 
subject to the Regulations involving an item that is specified on the 
Control List, including, but not limited to:
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    \3\ The Commerce Control List is set forth in Supp. 1 to part 
774 of the Regulations ``EAR99'' items are subject to the 
Regulations but not ``specified'' on the Control List. See 15 CFR 
774.1.
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    A. Applying for, obtaining, or using any license, License 
Exception, or export control document in connection with an item that 
is specified on the Control List;
    B. Carrying on negotiations concerning, or ordering, buying, 
receiving, using, selling, delivering,

[[Page 12168]]

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 specified on 
the Control List, or in any other activity subject to the Regulations 
involving an item that is specified on the Control List; or
    C. Benefitting in any way from any transaction involving any item 
exported or to be exported from the United States that is specified on 
the Control List, or in any other activity subject to the Regulations 
involving an item that is specified on the Control List.
    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 
specified on the Control List;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by the Denied Person of the ownership, possession, or 
control of any item specified on the Control List 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 specified 
on the Control List that has been exported from the United States;
    D. Obtain from the Denied Person in the United States any item 
specified on the Control List 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 specified on the 
Control List that has been or will be exported from the United States 
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 specified on the Control List 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 Orcas 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 the 
Order.
    Seventh, 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.
    Eighth, that the proposed charging letter, the Settlement 
Agreement, and this Order shall be made available to the public.
    Ninth, that this Order shall be served on the Denied Person and on 
BIS, and shall be published in the Federal Register.
    This Order, which constitutes the final agency action in this 
manner, is effective immediately.

    Entered this 2nd day of March 2006.
Darryl W. Jackson,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 06-2239 Filed 3-8-06; 8:45 am]
BILLING CODE 3510-DT-M