[Federal Register Volume 73, Number 45 (Thursday, March 6, 2008)]
[Notices]
[Pages 12073-12078]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 08-974]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 07-BIS15-21]


In the Matter of: Mr. Ali Asghar Manzarpour, Preston Technical 
Services, Ltd.-UK, 17 Preston Village Mews Middle Road, Brighton East 
Sussex BN1 6XU, England; and c/o Maria House, 35 Millers Rd., Brighton 
BN1 5NP, England, Respondent; Final Decision and Order

    This matter is before me upon a Recommended Decision and Order 
(``RDO'') of the Administration Law Judge (``ALJ'') issued on February 
4, 2008.
    In a charging letter filed on July 27, 2007, the Bureau of Industry 
and Security (``BIS'') alleged that Respondent, Ali Asghar Manzarpour 
(``Manzarpour''), Director of Preston Technical Services, Ltd., 
committed three violations of the Export Administration Regulations 
(currently codified at 15 CFR Parts 730-774) (2007)) 
(``Regulations''),\1\ 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 violations charged occurred in 2004. The Regulations 
governing the violations at issue are found in the 2004 version of 
the Code of Federal Regulations (15 CFR Parts 730-774 (2004)). 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)), which has been extended by successive 
Presidential Notices, the most recent being that of August 15, 2007 
(72 FR 46,137 (August 16, 2007)), has continued the Regulations in 
effect under the International Emergency Economic Powers Act (50 
U.S.C. 1701-1706 (2000)) (``IEEPA'').
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    Specifically, the charging letter alleged that on or about April 
28, 2004, Manzarpour caused, aided, or abetted in the doing of an act 
prohibited by the Regulations by facilitating and coordinating the 
export of a single engine aircraft that is subject to the Regulations, 
classified under Export Control Classification Number (ECCN) 9A991.b 
and controlled for anti-terrorism (AT) reasons, to Iran without the 
required export authorization. Specifically, Manzarpour ordered a 
freight-forwarding company to ship the aircraft from the United States 
to the United Kingdom (UK) knowing that Iran was the ultimate 
destination. Upon its arrival in the UK, Manzarpour instructed the 
freight forwarder to transship the item to Iran, but the item was 
detained before leaving the UK. Pursuant to section 560.204 of the 
Iranian Transactions Regulations maintained by the Department of the

[[Page 12074]]

Treasury's Office for Foreign Assets Control (``OFAC''), the export of 
an item to a third country intended for transshipment to Iran is a 
transaction that requires OFAC authorization. Under section 746.7 of 
the Regulations, no person may engage in the exportation of an item 
subject to both the Regulations and the Iranian Transactions 
Regulations without authorization from OFAC. No OFAC authorization was 
obtained for the export. BIS charged that in so doing, Manzarpour 
committed one violation of section 764.2(b) of the Regulations.
    The charging letter also alleged that on or about April 28, 2004, 
Manzarpour violated the Regulations by ordering, selling, and/or buying 
an item for export from the United States with knowledge that a 
violation of the Regulations would occur in connection with the items. 
Specifically, Manzarpour ordered, bought, and/or sold an aircraft 
subject to the Regulations and the Iranian Transactions Regulations, 
with knowledge or reason to know that the item would be exported to 
Iran, via the UK, without the required U.S. Government authorization. 
Manzarpour had knowledge that the U.S. item could not be sold to 
sanctioned countries, including Iran, a fact he acknowledged during an 
interview with UK Customs officials. BIS charged that in so doing, 
Manzarpour committed one violation of section 764.2(e) of the 
Regulations.
    Finally, the charging letter alleged that on or about April 28, 
2004, Manzarpour took actions with intent to evade the Regulations. 
Specifically, Manzarpour, acting through his companies, Preston 
Technical Services Ltd.-UK and Baronmode, Ltd.-UK, acquired an aircraft 
subject to the Regulations, and classified as ECCN 9A991.b, from U.S. 
suppliers with intent to transship the aircraft to Iran. Manzarpour and 
his companies failed to inform the U.S. suppliers of the ultimate 
destination of the item and, as such, no license was obtained from the 
U.S. Government for this transaction, as was required by section 746.7 
of the Regulations. BIS charged that in so doing, Manzarpour committed 
one violation of section 746.2(h) of the Regulations.
    In accordance with section 766.3(b)(1) of the Regulations, on July 
27, 2007, BIS mailed the notice of issuance of the charging letter by 
registered mail to Manzarpour at his last known address. Failing to 
receive a return receipt, BIS also mailed a copy by registered mail to 
Manzarpour at an alternate address on September 4, 2007. In addition, 
BIS attempted to serve the charges on Manzarpour by various other 
means, including facsimile, Federal Express and electronic mail.
    BIS presented evidence that on September 20, 2007, delivery of the 
charging letter, sent on September 4, 2007, was attempted via 
registered mail and ``refused.'' Thus, under section 766.3(c) of the 
Regulations, the ALJ deemed September 20, 2007 the effective date of 
service based on the ``refusal.'' To date, however, Manzarpour has not 
filed an answer to the charging letter with the ALJ, as required by the 
Regulations.
    In accordance with section 766.7 of the Regulations, BIS filed a 
Motion for Default Order on December 4, 2007, which it supplemented on 
December 17, 2007. Under section 766.7(a), ``[f]ailure of the 
respondent to file an answer within the time provided constitutes a 
waiver of the respondent's right to appear,'' and ``on BIS's motion and 
without further notice to the respondent, [the ALJ] shall find the 
facts to be as alleged in the charging letter.'' The Motion for Default 
Order recommended that Manzarpour be denied export privileges under the 
Regulations for a period of twenty years.
    Based on the record before him, the ALJ issued an RDO on February 
4, 2008, in which he found Manzarpour in default and held that the 
Respondent had committed one violation of section 764.2(b), one 
violation of section 764.2(e) and one violation of section 764.2(h). 
The ALJ also recommended the penalty of denial of Manzarpour's export 
privileges under the Regulations for twenty years.
    The RDO, 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 concerning Manzarpour's default and concerning 
his violations of the Regulations as alleged in the charging letter. I 
also find that the penalty recommended by the ALJ is appropriate, given 
the facts of this case, the nature of the violations, and the 
importance of preventing future unauthorized exports.
    I do note, however, one clarification regarding dictum contained in 
the ALJ's Recommended Decision and Order. On pages 4 and 9 of the RDO, 
the ALJ concluded that notice of the charging letter was provided to 
Manzarpour via registered mail. On page 9 of the RDO, in addressing 
attempts to serve the charging letter by means of electronic mail and 
Federal Express, the ALJ states: ``The problem with both methods of 
service is that they are not authorized under 15 CFR 766.3(b) as an 
acceptable means of obtaining service.'' I agree with the ALJ that, in 
this particular case, BIS did not present sufficient evidence to 
establish service by means other than or in addition to registered 
mail. The Regulations do not, however, preclude use of a delivery 
service, such as Federal Express, to effectively serve charges. Use of 
such an alternative means of service could satisfy section 766.3(b)(2) 
or (b)(3) of the Regulations under certain circumstances. The 
Regulations provide that effective service of a charging letter can be 
satisfied if delivered to or left with an appropriate officer or agent 
pursuant to section 766.3(b)(2), or with a person of suitable age and 
discretion who resides at the Respondent's last known dwelling pursuant 
to section 766.3(b)(3), and a certificate of service is signed by the 
person making such service stating the method of service and the 
identity of the person with whom the charging letter was left as 
indicated in section 766.3(b)(4).
    The clarification discussed above does not affect the findings or 
conclusions reached by the ALJ concerning Manzarpour's default or his 
violations of the Regulations. Based on my review of the entire record, 
I affirm the findings of act and conclusions of law in the RDO, with 
the clarification discussed above.
    Accordingly, It is therefore ordered,
    First, that for a period of twenty (20) years from the date this 
Order is published in the Federal Register, Ali Agar Manzarpour, 
Preston Technical Services, Ltd.-UK, 17 Preston Village Mews Middle 
Road, Brighton East Sussex BN1 6XU, England, and c/o Maria House, 35 
Millers Rd., Brighton BN1 5NP, England, and when acting for or on his 
behalf, his representatives, agents, assigns, 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'') exporter 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

[[Page 12075]]

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.
    Second, 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;
    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 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 expected from 
the United States. For purposes of this paragraph, servicing means 
installation, maintenance, repair, modification or testing.
    Third, 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.
    Fourth, 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.
    Fifth, that this Order shall be served on the Denied Person 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 action in this 
matter, is effective upon publication in the Federal Register.

    Dated: March 3, 2008.
Daniel O. Hill,
Acting Under Secretary of Commerce for Industry and Security.

Redacted Copy

Recommended Decision and Order; Default

    The Bureau of Industry and Security (``BIS'' or ``Agency'') 
commenced this administrative enforcement action seeking imposition of 
sanctions against Ali Asghar Manzarpour, Director of Preston Technical 
Services, Ltd (``Respondent''). On July 27, 2007, BIS issued and served 
a Charging Letter by registered mail to Mr. Manzarpour's last known 
address. The Charging Letter alleges that on April 28, 2004\1\ Mr. 
Manzarpour committed three violations of the Export Administration Act 
of 1979 (``Act''), as amended and codified at 50 U.S.C. App. Sections 
2401-20 (2000), and the Export Administration Regulations (``EAR'' or 
``Regulations''), as amended and codified at 15 CFR Parts 730-74 
(2007).\2\ To date Mr. Manzarpour has not filed an Answer to the 
Charging Letter. Pursuant to 15 CFR 766.7, BIS filed a Motion for 
Default.
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    \1\ The charged violation occurred in 2004. The regulations 
governing the violations at issue are found in the 2004 version of 
the Code of Federal Regulations (15 CFR 730-774 (2001-02)). The 2007 
regulations codified at 15 CFR Part 766 establish the procedural 
rules that apply to this matter.
    \2\ The EAA and all regulations promulgated there under expired 
on August 20, 201. See 50 U.S.C. App. 2419. Three days before its 
expiration, on august 17, 2001, the President declared the lapse of 
the EAA constitutes a national emergency. See Exec. Order. No. 
13222, reprinted in 3 CFR at 783-784, 2001 Comp. (2002). Exercising 
authority under the International Emergency Economic Powers Act 
(``IEEPA''), 50 U.S.C. Sec. Sec.  1701-1706 (2002), the President 
maintained the effectiveness of the EAA and its underlying 
regulations throughout the expiration period by issuing Exec. Order. 
No. 13222 on august 17, 2001. Id. The effectiveness of the export 
control laws and regulations were further extended by successive 
Notices issued by the President; the most recent being that of 
august 15, 2007. See Notice: Continuation of Emergency Regarding 
Export Control Regulations, 72 Fed. Reg. 46, 137 (August 15, 2007). 
Courts have held that the continuation of the operation and 
effectiveness of the EAA and its regulations through the issuance of 
Executive Orders by the President constitutes a valid exercise of 
authority. See Wisconsin Project on Nuclear Arms Control v. United 
States Dep't of Commerce, 317 F.3d 275, 278-79 (D.C. Cir. 2003); 
times Publ'g Co. v. U.S. Department of Commerce, 236 F.3d 1286, 1200 
(11th Cir. 2001).
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    For reasons stated herein, the Motion for Default filed in granted.

I. Findings of Fact

    Charge 1 alleges Mr. Manzarpour violated 15 CFR 764.2(b), on or 
about April 28, 2004, by causing, aiding, or abetting an act prohibited 
by the EAR when he ordered a freight forwarding company to export a 
single engine aircraft from the United States (U.S.) without the 
required government authorization to the United Kingdom (UK) knowing 
that Iran was the ultimate destination. Pursuant to Section 560.204 of 
the Iranian Transactions Regulations, the export of an item to a third 
country intended for transshipment to Iran is a transaction that 
requires the Department of the Treasury's Office of Foreign Assets 
Controls (``OFAC'') authorization. Under Section 746.7 of the 
regulations, no person may engage in the exportation of an item subject 
to both the Regulations and the Iranian Transactions Regulations 
without authorization from OFAC. No OFAC authorization was obtained for 
the export. (BIS Exhibit (Ex.) A).
    Charge 2 alleges Mr. Manzarpour violated 15 CFR 766.2(e), on or 
about April 28, 2004, by acting with knowledge of a violation when he 
ordered, sold, and/or bought the aircraft at issue knowing or having 
reason to know that the item would be transshipped to Iran via the UK 
without the required U.S. government authorization. (Id.).
    Charge 3 alleges Mr. Manzarpour violated 15 CFR 764.2(h), on or 
about April 28, 2004, by acting with the intent to evade the EAR when 
he, acting through his companies, Preston Technical Services Ltd.-UK 
and Baronmode, Ltd.-UK, acquired the aircraft from U.S. suppliers 
without disclosing that the intended ultimate destination of the item 
was Iran, and thereby failing to obtain the required U.S. government 
license for the transaction. (Id.).
    BIS first attempted to serve the Charging Letter on July 27, 2007 
by registered mail at Mr. Manzarpour's last known address: Preston 
Technical Services, Ltd.-UK, 17 Preston Village Mews Middle Road, 
Brighton East Sussex, BN1 6XU, United Kingdom. (Id.). To date, BIS has 
not received a return receipt for the registered mail, the Charging 
Letter has not been returned

[[Page 12076]]

by the U.S. Post Office, and Mr. Manzarpour has not filed an Answer.\3\
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    \3\BIS obtained the address for Mr. Manzarpour at Preston 
Technical Services from two sources: (1) Commercial Invoice No. 
2283/04 dated 18-March-2004 for the aircraft at issue in this case; 
and (2) a written statement dated July 6, 2004 drafted on Preston 
Technical Services' letterhead and signed by Mr. Manzarpour in his 
capacity as the organization's Director. (BIS Ex. B-C).
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    Thereafter, on September 4, 2007, BIS made a series of unsuccessful 
attempts to serve a copy of the Charging Letter through various 
mediums, including: (a) Facsimile sent to the last know Preston 
Technical Services company fax number listed on the July 6, 2004, 
written statement signed by Mr. Manzarpour; (b) registered mail sent to 
Mr. Manzarpour at Baronmode, Ltd.'s last known business address 
reported in Dunn and Bradstreet as Maria House, 35 Millers Road, 
Brighton East Sussex BN1 5NP, United Kingdom (the Ultimate Consignee on 
the Shipper's Export Declaration form dated 4/28/2004 for the export of 
the aircraft at issue from the United States); (c) six electronic mails 
(``e-mails'') sent to several addresses compiled from a variety of 
sources; and (d) Federal Express (``FedEx'') to Preston Technical 
Services' address. See (BIS Ex. C-J).
    The fax number for Preston Technical Services was no longer in 
working order; four of the six e-mails failed and the remaining two e-
mails were successfully relayed but there are no assurances that they 
were read; and delivery of the FedEx to Preston Technical Services 
proved unsuccessful. See (BIS Ex. D, I, J). The Charging Letter sent 
registered mail on September 4, 2007 to Mr. Manzarpour at Baronmode, 
Ltd.'s business address located at 35 Millers Road was returned to BIS 
on December 7, 2007, with ``refused'' marked on the front of the 
envelope. See (BIS Ex. U). More specifically, the registered mail 
return receipt shows that the letter was ``refused'' on September 20, 
2007. (Id).
    In the interim, on September 7, 2007, BIS directed FedEx to deliver 
the Charging Letter to Mr. Manzarpour at Maria House, 35 Millers Road, 
Brighton East Sussex BN1 5NP, United Kingdom. The Charging Letter was 
successfully delivered by FedEx to the address on Millers Road and was 
signed for by F. Lynn on September 18, 2007. See (BIS Ex. K). To date, 
Mr. Manzapour has not filed an Answer to the Charging Letter.
    Based on Mr. Manzapour's failure to file an answer, on December 4, 
2007, BIS filed a Motion for Default Order together with a Recommended 
Decision and Order. BIS filed a Supplement to the Motion for Default 
Order and an Amended Recommended Decision and Order on December 17, 
2007.\4\ In both Motions, BIS seeks imposition of a twenty (20) year 
Denial Order against Mr. Manzarpour.
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    \4\ BIS filed the Supplement to the Motion for Default Order and 
Amended Recommended Decision and Order after receiving the returned 
Charging Letter sent registered mail on September 4, 2007 to Mr. 
Manzarpour at Baronmode, Ltd.'s business address located at 35 
Millers Road marked ``refused.''
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II. Applicable Law/Regulations

    The procedural regulations governing service of the Charging Letter 
instituting administrative enforcement proceedings against a respondent 
is set forth in 15 CFR 766.3(b), which states in pertinent part as 
follows:

    (b) Notice of issuance of charging letter instituting 
administrative enforcement proceeding. A respondent shall be 
notified of the issuance of a charging letter, or any amendment or 
supplement thereto:
    (1) By mailing a copy by registered or certified mail addressed 
to the respondent at the respondent's last known address;
    (2) By leaving a copy with the respondent or with an officer, a 
managing or general agent, or any other agent authorized by 
appointment or by law to receive service of process for the 
respondent; or
    (3) By leaving a copy with a person of suitable age and 
discretion who resides at the respondent's last known dwelling.

    The Under Secretary has upheld that service of the Charging Letter 
is effective where the Agency makes diligent good-faith efforts to 
provide actual notice to respondent at the last known address, but 
never receives a return receipt for the Charging Letter. In re Modern 
Engineering Services, Ltd., 65 FR 81,822 (Dec. 27, 2000).\5\ The ``date 
of service'' is defined as ``the date of * * * delivery [of the 
Charging Letter], or its attempted delivery if delivery is refused.'' 
15 CFR 766.3(c).
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    \5\ Although Modern Engineering Services was issued by the 
predecessor to the Bureau of Industry & Security, the Bureau of 
Export Administration, the statements of law enunciated therein 
serves as appropriate guidance.
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     A respondent is required to file an answer within thirty (30) days 
after being served with the Charging Letter. See 15 CFR 766.6(a). 
Failure of the respondent to file an answer within the time prescribed 
by regulation constitutes a waiver of respondent's right to appear and 
contest the allegations in the Charging Letter. Id. at 766.7. It also 
entitles BIS to seek a default judgment. See In re Daqing Zhou, 71 FR 
65,775 (Nov. 9, 2006). Section 766.7 further provides that upon BIS's 
motion and without further notice to respondent, the judge shall find 
the facts as to be alleged in the Charging Letter and render an initial 
or recommended decision and order. 15 CFR 766.7.

III. Discussion

    In this case, BIS has established that notice of the Charging 
Letter was served on Mr. Manzarpour in accordance with 15 CFR 
766.3(b)(1). BIS presented evidence that on July 27, 2007, the Charging 
Letter was sent by registered mail to Mr. Manzarpour at Preston 
Technical Services, Ltd.-UK, 17 Preston Village Mews Middle Road, 
Brighton East Sussex, BN1 6XU, United Kingdom, Respondent's last known 
address obtained from a commercial invoice and a signed written 
statement. BIS also presented evidence that diligent and good-faith 
efforts were made to provide actual notice of the Charging Letter to 
Mr. Manzarpour, including: (a) Facsimile to Respondent's last known fax 
number; (b) FedEx to Respondent's last known address; (c) e-mail to 
various last known e-mail addresses used by Respondent; and (d) both 
registered mail and FedEx to Respondent's last known alternate business 
addresses.
     BIS presented evidence that F. Lynn signed for the Charging Letter 
on September 18, 2007, which was sent to Mr. Manzarpour by FedEx at a 
last known alternate address located on 35 Millers Road. In its 
Supplement to Motion for Default, BIS presented additional evidence 
that delivery of the Charging Letter, dated September 4, 2007, sent by 
registered mail to Mr. Manzarpour at the same alternate address, was 
``refused'' on September 20, 2007.
     As to the date of service and the date of ``refusal'', BIS raises 
three (3) arguments in support of its Motion for Default. First, BIS 
argues that October 25, 2007 (ninety (90) days after the Charging 
Letter was first issued) should be deemed the date of attempted 
delivery and constructive refusal. Second, Respondent argues that the 
date on which the Charging Letter was successfully delivered to 
Manzarpour's last known e-mail addresses or September 18, 2007 (i.e., 
the date in which the Charging Letter was received by F. Lynn via 
FedEx) might be acceptable as the date of service. Third, BIS argues 
that September 20, 2007 (i.e., the date in which delivery of the 
registered mail to Manzarpour at his last known alternate address) 
should be considered the date of service.
     In an effort to shed some light on determining the date of 
service, BIS's arguments are address in full detail.

[[Page 12077]]

(1) October 25, 2007 Is Not an Acceptable Date of Service

     First, in its initial Motion for Default dated December 4, 2007, 
BIS argued that the date of service should be October 25, 2007 (i.e., 
ninety (90) days after the date in which the Charging Letter was first 
sent via registered mail to Respondent). To support its argument, BIS 
relies on Modern Engineering Services. This argument is rejected 
because, in the present case, the ninety (90) day time period for 
registered mail delivery from the U.S. to the UK is speculative.
     BIS's reliance on Modern Engineering Services is misplaced. The 
ninety (90) day period discussed in that case was based on information 
received from the U.S. Post Office establishing that it takes a maximum 
of ninety (90) days for registered mail sent from the U.S. to reach 
Pakistan. See 65 FR 81,822. In other words, the ninety (90) days period 
was case specific it did not establish a bright line rule to be applied 
to all BIS cases.
     In the present case, BIS presented no evidence concerning the 
maximum amount of time it takes registered mail sent from the U.S. to 
reach the UK. Without such evidence BIS's argument fails.

The Date of Successful Delivery of the Charging Letter on September 4, 
2007 to Respondent's Last Known E-mail Addresses and the Date in Which 
the Charging Letter Was Received by F. Lynn Via FedEx Are Not 
Acceptable as the Date of Service

    BIS's alternative argument raised in its Motion for Default is that 
September 4, 2007 or September 18, 2007 could be deemed the date of 
service. September 4, 2007 is the date when two messages containing the 
Charging Letter were successfully relayed to Respondent's last known e-
mail addresses. Conversely, September 18, 2007 is the date in which F. 
Lynn signed for the FedEx package containing the Charging Letter sent 
to Respondent's last known alternate business address. The problem with 
both methods of service is that they are not authorized under 15 CFR 
766.3(b) as an acceptable means of obtaining service. As such, BIS's 
alternative argument is rejected.

(3) September 20, 2007 Is the True Date of Service

    Third, in its supplemental Motion for Default Order, BIS argues 
that the date of service should be September 20, 2007, which is the 
date delivery of the Charging Letter by registered mail was 
``refused.'' This argument is well taken.
    BIS has established that in a good-faith effort to provide 
Respondent with notice of the Charging Letter, a courtesy copy was sent 
via registered mail on September 4, 2007 to Respondent at an alternate 
address located at 35 Miller Road in accordance with 15 CFR 766.3(b). 
BIS presented evidence that on September 20, 2007 delivery of the 
Charging Letter was attempted and ``refused.'' Thus, under 15 CFR 
766.3(c), September 20, 2007 is deemed the effective date of service 
based on the ``refusal.'' This means that 15 CFR 766.6(a) required Mr. 
Manzarpour to file an Answer to the Charging Letter no later than 
October 30, 2007 (i.e., 30 days after service of the Charging Letter). 
To date, Respondent has not filed an Answer. Accordingly, BIS is 
entitled to a default judgment, and Respondent is deemed to have waived 
his right to appear and contest the allegations in the Charging Letter.

IV. Conclusion of Law

    Pursuant to the default procedures set forth in 15 CFR 766.7, 
Manzarpour is found to have committed one violation of Section 
764.2(b), one violation of Section 764.2(e), and one violation of 
Section 764.2(h) as alleged in the Charging Letter.

V. Penalty Assessment

    Section 764.3 of the EAR sets forth the sanctions BIS may seek for 
violations. The sanctions include: (i) A monetary penalty; (ii) 
suspension from practice before BIS, and (iii) denial of export 
privileges. See 15 CFR 766.3. A denial order may be considered an 
appropriate sanction even in matters involving simple negligence or 
carelessness, if the violation involves ``harm to the national security 
or other essential interests protected by the export control system,'' 
if the violations are of such a nature and extent that a monetary fine 
alone represents an insufficient penalty. See 15 CFR Part 766, Supp. 
No. 1, III, A.
    Based on the severity of Mr. Manzarpour's actions, a 20-year denial 
of Mr. Manzarpour's export privileges is recommended. Such a denial 
order is consistent with sanctions imposed in similar cases. For 
instance, in In re Yaudat Mustafa Talvi a/k/a Yaudat Mustafa a/k/a 
Joseph Talvi, the Under Secretary affirmed a 20-year denial order and 
civil penalty of $121,000 for the unauthorized export of oil field 
parts to Libya where respondent solicited a violation of the EAR with 
knowledge that a violation would occur. 69 FR 77,177 (Dec. 27, 2004). 
Similarly, in In re Daqing Zhou, a 20-year denial order was affirmed 
where respondent conspired to export and caused the export of items 
controlled for national security reasons to China without the required 
license and with knowledge that a violation would occur. 71 FR 65,775.
    In this case, BIS established that a 20-year denial order is 
appropriate because of Mr. Manzarpour's severe disregard for U.S. 
export laws and regulations. The facts found proved shows that Mr. 
Manzarpour caused a violation of the EAR by ordering a freight 
forwarder to export a single engine aircraft to Iran without the 
required U.S. government authorization. (BIS Ex. C, L, M, P and R). The 
aircraft was classified under ECCN 9A991.b and controlled for anti-
terrorism (AT) reasons. The facts found proved also establish that Mr. 
Manzarpour knew that the U.S.-origin item could not be sold to sanction 
countries, such as Iran; a fact Mr. Manzarpour acknowledged during an 
interview with UK Customs officials. (BIS Ex. C, O at 11-13). Yet, Mr. 
Manzarpour failed to disclose the aircraft's ultimate destination from 
U.S. suppliers in an attempt to evade the EAR. Therefore, no OFAC 
authorization was obtained for the transaction. (BIS Ex. P).
    These actions cannot be condoned. The 20-year denial order is 
further supported where, as in this case, Respondent shows a history of 
attempting to evade U.S. export control laws and regulations. BIS 
presented evidence that there is a pending criminal indictment against 
Mr. Manzarpour in the U.S. District Court for the District of Columbia 
involving the acts described in the Charging Letter as well as other 
exports and attempted exports of items subject to the EAR from the 
United States to Iran via Austria. (BIS Ex. S). BIS presented 
additional evidence that Mr. Manzarpour has indicated in public 
statements to UK media that the transactions are legal. (BIS Ex. T at 
4). Given his past actions and recent statements, there is a strong 
likelihood that future sales of U.S.-origin goods would be diverted to 
Iran in violation of the Iranian Transaction Regulations and the EAR. 
Future detection of such violations might prove difficult given the 
fact that Mr. Manzarpour lives and operates business abroad.
    In light of the above, denial of Mr. Manzarpour's U.S. export 
privileges is an appropriate sanction. This is especially true given 
the fact assessment of a monetary penalty alone might prove inadequate 
and, based on Mr. Manzarpour's business operations abroad, BIS would 
likely face difficulties collection a monetary penalty.

[[Page 12078]]

VI. Recommended Order \6\
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    \6\
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[Redacted Section]

    Accordingly, this Recommended Decision and Order is being referred 
to the Under Secretary for Industry & Security for review and final 
action for the agency, without further notice to the respondent as 
provided in Section 766.7 of the Regulations.
    Pursuant to Section 766.22(b), the parties have 12 days from the 
date of issuance of this recommended decision and order in which to 
submit simultaneous responses. Parties thereafter shall have eight days 
from receipt of any response(s) in which to submit replies. Any 
response or reply must be received within the time specified by the 
Under Secretary. Within 30 days after receipt of this Recommended 
Decision and Order, the Under Secretary shall issue a written order 
affirming, modifying, or vacating the Recommended Decision and Order. 
See 15 CFR 766.22(c).

    Done and dated February 4, 2008, Baltimore, Maryland.


Joseph N. Ingolia,

Administrative Law Judge, U.S. Coast Guard \7\

    \7\ United States coast Guard Administrative Law Judges perform 
adjudicatory functions required for the Bureau of Industry and 
Security with approval from the Office of Personnel Management 
pursuant to a memorandum of understanding between the Coast Guard 
and the Bureau of Industry and Security.
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[FR Doc. 08-974 Filed 3-5-08; 8:45 am]
BILLING CODE 3510-DT-M