[Federal Register Volume 72, Number 159 (Friday, August 17, 2007)]
[Notices]
[Pages 46209-46210]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-4036]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No.: 06-BIS-18]


Action Affecting Export Privileges; EHI Group, USA, Inc.; In the 
Matter of: EHI Group USA, Inc., 10677 C Rosewood Road, Cupertino, CA 
95014, Respondent: Order Relating to EHI Group, USA, Inc.

    The Bureau of Industry and Security, U.S. Department of Commerce 
(``BIS'') has initiated an administrative proceeding against EHI Group, 
USA, Inc. (``EhI'') pursuant to section 766.3 of the Export 
Administration Regulations (currently codified at 15 CFR parts 730-774 
(2207)) (the ``Regulations''),\1\ and section 13(c) of the Export 
Administration Act of 1979, as amended (50 U.S.C. app. section 2401-
2420 (2000)) (the ``Act''),\2\ through issuance of a charging letter to 
EHI that alleged that EHI committed 3 violations of the Regulations. 
Specifically, the charges are:

    \1\ The violations alleged to have been committed occurred in 
2001 and 2002. The Regulations governing the violations at issue are 
found in the 2001-2002 versions of the Code of Federal Regulations 
(15 CFR parts 730-774 (2001-2002)). The 2007 Regulations establish 
the procedures that apply to this matter.
    \2\ 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 successive Presidential 
Notices, the most recent being that of August 3, 2006 (71 FR 44,551 
(Aug. 7, 2006)), has continued the Regulations in effect under the 
International Emergency Economic Powers Act (50 U.S.C. section 1701-
1706 (2000)).
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    Charge 1: 15 CFR 764.2(d)--Conspiracy to Export Microwave 
Amplifiers to China without the required Department of Commerce 
License.
    Beginning in or about September 2001 and continuing into or 
about May 2002, EHI conspired and acted in concert with others, 
known and unknown, to bring about or do to an act that constitutes a 
violation of the Regulations. Specifically, EHI conspired to export 
microwave amplifiers from the United States to the People's Republic 
of China (``China'') without the required Department of Commerce 
license. The goal of the conspiracy was to obtain microwave 
amplifiers on behalf of a Chinese end-user and to export those 
microwave amplifiers to China. In furtherance of the conspiracy, EHI 
acquired the microwave amplifiers from a U.S. company and then 
exported them from the United States to China. The microwave 
amplifiers were items subject to the Regulations and were classified 
under export control classification number (``ECCN'') 3A001. 
Contrary to section 742.4 of the Regulations, no Department of 
Commerce license was obtained for the export of the amplifiers from 
the United States to China. In so doing, EHI committed one violation 
of section 764.4 of the Regulations.

    Charge 2: 15 CFR section 764.2(a): Exporting Microwave 
Amplifiers Without the Required Department of Commerce License.
    On or about May 22, 2002, EHI engaged in conduct prohibited by 
the Regulations by exporting microwave amplifiers, items subject to 
the Regulations and classified under ECCN 3A001, from the United 
States to China, without obtaining a license from the Department of 
Commerce as required by section 742.4 of the Regulations. In so 
doing, EHI committed one violation of section 764.2(a) of the 
Regulations.

    Charge 3: 15 CFR section 764.2(e): Acting With Knowledge That a 
Violation of the Regulations Would Occur.
    In connection with the transaction referenced above, EHI ordered 
or transferred microwave amplifiers that were to be exported from 
the United States with knowledge that a violation of the Regulations 
would occur. Specifically, EHI had knowledge that a license was 
required for the export as EHI was advised by an individual in China 
that the items in question were classified as ECCN 3A001 and subject 
to U.S. export regulations. Furthermore, EHI had knowledge of the 
Regulations, as Mr. Qing Chang Jiang, President of EHI, had met with 
officials from BIS on several occasions to discuss the Regulations 
and the export of microwave amplifiers to China. In addition, EHI 
submitted an export application to the Department of Commerce for 
the microwave amplifiers described above and exported

[[Page 46210]]

those amplifiers during the pendency of that application. As such, 
EHI, at all relevant times, knew that the items required a license 
if exported to China and that no such license would be obtained. In 
so doing, EHI committed one violation of section 764.2(e) of the 
Regulations.

    Whereas, BIS and EHI have entered into a Settlement Agreement 
pursuant to section 766.18(b) 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 of the terms of such Settlement Agreement; 
It is Therefore Ordered:
    First, that a civil penalty of $17,000 is assessed against EHI, of 
which $500 shall be paid to the U.S. Department of Commerce not later 
than November 1, 2007; $500 shall be paid to the U.S. Department of 
Commerce not later than February 1, 2008; $5,000 shall be paid to the 
U.S. Department of Commerce not later than May 1, 2008; and the balance 
of $11,000 shall be paid to the U.S. Department of Commerce not later 
than August 1, 2008. Payment shall be made in the manner specified in 
the attached instructions.
    Second, for a period of five years from the date of entry of this 
Order, EHI Group USA, Inc., 10677 C Rosewood Road, Cupertino, CA 95014, 
its successors or assigns, and when acting for or on behalf of EHI, its 
representatives, agents, officers or employees (``Denied Person'') may 
not participate, directly or indirectly, 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.
    Third, 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.
    Fourth, 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 EHI 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.
    Fifth, 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.
    Sixth, that the charging letter, the Settlement Agreement, this 
Order, and the record of this case as defined by Section 766.20 of the 
Regulations shall be made available to the public.
    Seventh, that the administrative law judge shall be notified that 
this case is withdrawn from adjudication.
    Eighth, 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 6th day of August, 2007.
Darryl W. Jackson,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 07-4036 Filed 8-16-07; 8:45 am]
BILLING CODE 3510-DT-M