[Federal Register Volume 73, Number 208 (Monday, October 27, 2008)]
[Notices]
[Pages 63676-63678]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-25353]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[05-BIS-23]


In the Matter of: NEAZ Trading Corporation 612 Business Centre, 
Mumtaz Hasan Road, Off I.I. Chundrigar Road, Karachi, Pakistan, 
Respondent

Final Decision and Order

    This matter is before me upon a Recommended Decision and Order 
(``RDO'') of an Administrative Law Judge (``ALJ'')
    In a charging letter issued on December 15, 2005, the Bureau of 
Industry and Security (``BIS'') alleged that Respondent, NEAZ Trading 
Corporation, committed two violations of the Export Administration 
Regulations (currently codified at 15 CFR Parts 730-774 (2008) 
(``Regulations'')),\1\ issued pursuant to the Export Administration Act 
of 1979, as amended (50 U.S.C. app. Sec.  240 1-2420 (2000)) 
(``Act'').\2\
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    \1\ The charged violations occurred during the 2002 period. The 
Regulations governing the violations at issue are found in the 2000-
2002 versions of the Code of Federal Regulations (15 CFR Parts 730-
774 (2000-2002)). The 2008 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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    The charging letter included a charge that was based on actions 
taken by NEAZ to evade licensing requirements governing exports of 
items subject to the Regulations, specifically, the export of items 
subject to the Regulations to a Pakistani organization listed on BIS's 
Entity List. Specifically, Charge One alleged as follows:
    Charge 1 (15 CFR 764.2(h)--Actions Taken with Intent to Evade the 
Regulations)
    On or about April 27, 2002, NEAZ, through its operations 
specialist, took actions with the intent to evade the U.S. Government's 
licensing requirements for exports to Pakistan. Specifically, NEAZ took 
actions, including but not limited to, the submission of false 
information to a freight forwarder in connection with an export of 
components for an online chemical monitoring system, items subject to 
the Regulations (EAR99 and 4A994), from the United States to the 
Karachi Nuclear Power Plant (``KANUPP'') in Karachi, Pakistan via the 
United Arab Emirates (UAE). NEAZ provided shipping information 
representing that the consignee was in the UAE but omitting the final 
destination for the items. The purpose of NEAZ's actions was to conceal 
the end-user, KANUPP, a Pakistani organization on the Entity List set 
forth in Supplement No. 4 to Part 744 of the Regulations and for which 
a Department of Commerce export license was required by section 744.1 
of the Regulations. In so doing, NEAZ committed one violation of 
section 764.2(h) of the Regulations.\3\
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    \3\ The charging letter included a second evasion charge, Charge 
Two, relating to BIS's export control documentation filing 
requirements. By Notice of Withdrawal filed with the Administrative 
Law Judge simultaneously with its Motion for Default Order, BIS 
provided notice that it was withdrawing Charge Two.
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    In accordance with section 766.3(b)(l) of the Regulations, on 
December 15, 2005, BIS mailed the notice of issuance of the charging 
letter by registered mail to NEAZ at its last known address, which is 
in Pakistan. Although BIS did not receive a signed return mail receipt 
for the letter, the charging letter was delivered no later than on or 
about February 16, 2006. On or about that date, Yasmin Ahmed, NEAZ's 
Chief Operating Officer and the person at NEAZ to whose attention the 
NEAZ charging letter was addressed, telephoned the BIS attorney named 
in the charging letter to discuss that letter, as well as the charging 
letter served in a related administrative proceeding also initiated by 
BIS on December 15, 2005, In the Matter of Yasmin Ahmed (Docket No. 05-
BIS-24). Ms. Ahmed had possession of the NEAZ charging letter by the 
date of that telephone call; otherwise, she would not have known the 
name or had direct contact information for BIS's attorney or been able 
to discuss the charging letter with BIS. To date, NEAZ has not filed an 
answer to the charging letter with the AU, as required by the 
Regulations.
    Under section 766.6(a) of the Regulations, the ``respondent must 
answer the charging letter within 30 days after being served with 
notice of issuance'' of the charging letter. Section 766.7(a) of the 
Regulations provides that the ``[f]ailure of the respondent to file an 
answer within the time provided constitutes a waiver of the 
respondent's right to appear and contest the allegations in the 
charging letter,'' and that ``on BIS's motion and without further 
notice to the respondent, [the AU] shall find the facts to be as 
alleged in the charging letter[.]''
    In accordance with section 766.7 of the Regulations, and because 
more than thirty days had passed since NEAZ had been served with the 
charging letter, BIS filed a Motion for Default Order that was received 
by the AU on July 15, 2008. This Motion for Default Order recommended 
that NEAZ be denied export privileges under the Regulations for a 
period of seven years.
    On September 16, 2008, based on the record before him, the AU 
issued a RDO in which he found NEAZ in default, found the facts to be 
as alleged in Charge One of the charging letter, and held that NEAZ had 
committed the one violation of section 764.2(h) of the Regulations. The 
AU also recommended the penalty of denial of NEAZ's export privileges 
for seven years.
    The ALJ's 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 AU's findings of fact 
and conclusions of law. I also find that the penalty recommended by the 
AU is appropriate, given the nature of the violation 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 RDO.
    Accordingly, it is therefore ordered,
    First, that, for a period of seven (7) years from the date this 
Order is published in the Federal Register, NEAZ Trading Corporation, 
612 Business Centre, Mumtaz Hasan Road, Off I.I. Chundrigar Road, 
Karachi, Pakistan, and when acting for or on behalf of NEAZ Trading 
Corporation, its representatives, agents, assigns and employees 
(hereinafter collectively referred to as the ``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;

[[Page 63677]]

    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. Benefitting 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;
    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 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.
    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 
AU'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: October 16, 2008.
Mario Mancuso,
Under Secretary of Commerce for Industry and Security.

United States Department of Commerce Bureau of Industry and Security

    In the Matter of: NEAZ Trading Corporation, 612 Business Centre, 
Mumtaz Hasan Road, Off I.I. Chundrigar Road, Karachi, Pakistan, 
Respondent.

Recommended Decision and Order

    On December 15, 2005, the Bureau of Industry and Security, U.S. 
Department of Commerce (BIS), issued a charging letter initiating 
this administrative enforcement proceeding against NEAZ Trading 
Corporation (NEAZ). The charging letter alleged NEAZ committed two 
violations of the Export Administration Regulations (currently 
codified at 15 CFR Parts 730-774 (2008)) (Regulations),\1\ issued 
under the Export Administration Act of 1979, as amended (50 U.S.C. 
app. 2401-2420 (2000)) (the Act).\2\ In accordance with Sec.  766.7 
of the Regulations, BIS has moved for the issuance of an Order of 
Default against NEAZ in connection with Charge I in the charging 
letter, as NEAZ has failed to file an answer to the allegation in 
the charging letter issued by BIS within the time period required by 
the Regulations.\3\
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    \1\ The violations charged occurred during 2002 period. The 
Regulations governing the violations at issue are found in the 2002 
version of the Code of Federal Regulations (15 CFR Parts 730-774 
(2002)). The 2008 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 46137 (Aug. 16, 2007)), has continued the Regulations in 
effect under the International Emergency Economic Powers Act (50 
U.S.C. 1701-1706 (2000)) (``IEEPA'').
    \3\ In a Notice of Withdrawal filed simultaneously with its 
Motion For Default Order, BIS provided notice to the Administrative 
Law Judge that it was withdrawing Charge 2.
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A. Legal Authority for Issuing an Order of Default

    Section 766.7 of the Regulations states that upon motion by BIS, 
the Court shall find a respondent in default if the respondent fails 
to properly file a timely answer to a charging letter. That section, 
entitled Default, provides in pertinent part:
    Failure of the respondent to file an answer within the time 
provided constitutes a waiver of the respondent's right to appear 
and contest the allegations in the charging letter. In such event, 
the administrative law judge, on BIS's motion and without further 
notice to the respondent, shall find the facts to be as alleged in 
the charging letter and render an initial or recommended decision 
containing findings of fact and appropriate conclusions of law and 
issue or recommend an order imposing appropriate sanctions.
    15 CFR 766.7 (2006).
    Pursuant to Sec.  766.6 of the Regulations, a respondent must 
file an answer to the charging letter ``within 30 days after being 
served with notice of the issuance of the charging letter'' 
initiating the proceeding.

B. Service of the Notice of Issuance of Charging Letter

    In this case, BIS served notice of issuance of the charging 
letter in accordance with Sec.  766.3(b)(1) of the Regulations when 
it sent a copy of the charging letter by registered mail to NEAZ at 
its last known address on December 15, 2005. BIS did not receive a 
return mail receipt for the letter. To date, NEAZ has failed to file 
an answer to the charging letter as required by section 766.6 of the 
Regulations. On or about February 16, 2006, Yasmin Ahmed, NEAZ's 
Chief Operating Officer (the person to whose attention the NEAZ 
letter was directed) telephoned BIS attorney of record, Parvin Huda. 
Since Ms. Ahmed contacted BIS on February 16, 2006, Ms. Ahmed must 
have been in possession of the Charging Letter or she would not have 
known Ms. Huda's contact information. Clearly 30 days has passed 
since Ms. Ahmed received the charging letter. Accordingly, NEAZ is 
in default.

C. Summary of Violations Charged

    The charging letter filed by BIS included two charges. BIS 
provided notice that it was withdrawing the second charge, in its 
Notice of Withdrawal filed with the Administrative Law Judge 
simultaneously with its Motion for Default Order. BIS's Motion for 
Default Order covered the one remaining charge, Charge 1, which 
alleged that on or about April 27, 2002, NEAZ, through its 
operations specialist, took actions with the intent to evade the 
U.S. Government's licensing requirements for exports to Pakistan. 
These actions included, but were not limited to, the submission of 
false information to a freight forwarder in connection with an 
export of components for an online chemical monitoring system, items 
subject to the

[[Page 63678]]

Regulations (EAR99 \4\ and ``ECCN 4A994'' \5\), from the United 
States to the Karachi Nuclear Power Plant (``KANUPP'') in Karachi, 
Pakistan, via the United Arab Emirates (UAE). NEAZ provided shipping 
information representing that the consignee was in the UAE but 
omitting the final destination for the items. BIS alleges the 
purpose of NEAZ's actions was to conceal the end-user, KANUPP, a 
Pakistani organization on the Entity List set forth in Supplement 
No. 4 to Part 744 of the Regulations and for which a Department of 
Commerce export license was required by section 744.1 of the 
Regulations.
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    \4\ EAR 99 is a designation for items subject to the Regulations 
that are not listed on the Commerce Control List.
    \5\ ``ECCN'' refers to ``Export Control Classification Number.'' 
See Supp. ito 15 CFR 774.
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D. Penalty Recommendation

[REDACTED SECTION]

E. Conclusion

    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 Sec.  766.7 of the Regulations.
    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).

Joseph N. Ingolia,
Chief Administrative Law Judge, United States Coast Guard.

    Done and dated 16th of September, 2008, Baltimore, Maryland.

Certificate of Service

    I hereby certify that I have served the foregoing RECOMMENDED 
DECISION AND ORDER upon the following party in this proceeding at the 
addresses indicated below by First Class Mail to:

Parvin R. Huda, Senior Counsel, Attorneys for Bureau of Industry and 
Security, Office of Chief Counsel, For Industry and Security, U.S. 
Department of Commerce, Room H-3839, 14th Street & Constitution Avenue, 
NW., Washington, DC 20230, (202) 482-5301.

NEAZ Trading Corporation, 612 Business Centre, Mumtaz Hasan Road, Off 
1.1 Chundrigar Road, Karachi, Pakistan.

    Dated on September 18, 2008, Baltimore, Maryland.
Debra M. Gundy,
Paralegal Specialist, Administrative Law Judges Office, U.S. Coast 
Guard.
 [FR Doc. E8-25353 Filed 10-24-08; 8:45 am]
BILLING CODE 3510-DT-M