[Federal Register Volume 71, Number 46 (Thursday, March 9, 2006)]
[Notices]
[Pages 12164-12166]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2242]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Action Affecting Export Privileges; Dolphin International, Ltd., 
In the Matter of: Dolphin International, Ltd., 21 Commercial Complex, 
Gulboker Park Extension, New Delhi 110049, India; Respondent

Order

    The Bureau of Industry and Security, U.S. Department of Commerce 
(``BIS'') has notified Dolphin International, Ltd. (hereinafter 
referred to as ``Dolphin'') of its intention to initiate an 
administrative proceeding against Dolphin 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-

[[Page 12165]]

2420 (2000))(``Act''),\2\ by issuing a proposed charging letter to 
Dolphin that alleged that Dolphin 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 at 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, 
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 (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 or about late 
2000 and continuing into September 2002, Dolphin 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 certain 
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, Dolphin negotiated with individuals from 
North Korea end-user and to export those toxins to North Korea. In 
furtherance of the conspiracy, Dolphin negotiated with individuals from 
North Korea to acquire the toxins and developed a plan to deliver the 
toxins from the United States 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(c)--Soliciting an Export of Toxins 
Without the Required License: In or about late 2000 through in or about 
September 2002, Dolphin solicited a violation of the Regulations by 
enlisting others to acquire toxins, including Aflatoxin (M1, P1, Q1) 
and Staphyloccocal Enterotoxin (A and B), items subject to the 
Regulations and classified under ECCN 1C351, for export from the United 
States to North Korea without the required Department of Commerce 
license. Specifically, Dolphin asked a co-conspirator in the United 
States to acquire the toxins from the U.S. manufacturer and then ship 
the toxins to a co-conspirator in the Netherlands, who would forward 
the toxins to North Korea. Contrary to Seciton 742.2 of the 
Regulations, no Department of Commerce license was obtained for the 
export of toxins from the United States to North Korea.
    Whereas, BIS and Dolphin 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 $22,000 is assessed against Dolphin, 
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. 3701-3702E (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, 
Dolphin 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 
privilege granted, or to be granted, to Dolphin. Accordingly, if 
Dolphin should fail to pay the civil penalty in a timely manner, the 
undersigned may enter an Order denying all of Dolphin's export 
privileges under the Regulations for a period of one year from the date 
of entry of this Order. The payment of the civil penalty is guaranteed 
by Mr. Vishwanath Kakade Rao (hereinafter referred to as ``K.V. Rao''), 
in his individual capacity, and K.V. Rao and Dolphin, 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, Dolphin International, Ltd., 21 Commercial Complex, 
Gulboker Park Extension, New Delhi 110049, India, its successors or 
assigns, and when acting for or on behalf of Dolphin, 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 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, 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 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. For purposes of this paragraph, servicing means 
installation, maintenance, repair, modification or testing.

[[Page 12166]]

    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 Dolphin 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 
matter, is effective immediately.

    Entered this 2nd day of March, 2006.
Darryl W. Jackson,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 06-2242 Filed 3-8-06; 8:45 am]
BILLING CODE 3510-DT-M