[Federal Register Volume 75, Number 46 (Wednesday, March 10, 2010)]
[Notices]
[Pages 11113-11115]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-5107]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Action Affecting Export Privileges; Aviation Services 
International, B.V.

    In the Matter of: Aviation Services International, B.V. also known 
as Delta Logistics, B.V., P.O. Box 418, Heerhugowaard, Netherlands 
1700AK and Flemming Straat 36, Heerhugowaard, Netherlands 1700AK 
Respondent; Order Relating to Aviation Services International, B.V.
    The Bureau of Industry and Security, U.S. Department of Commerce 
(``BIS''), has initiated an administrative proceeding against Aviation 
Services International, B.V., also known as Delta Logistics, B.V. 
(collectively referred to herein as ``ASI'') pursuant to Section 766.3 
of the Export Administration Regulations (currently codified at 15 CFR 
parts 730-774 (2009)) (``EAR''),\1\ and Section 13(c) of the Export 
Administration Act of 1979, as amended (50 U.S.C. app. Sec. Sec.  2401-
2420) (the

[[Page 11114]]

``EAA''),\2\ through issuance of a Proposed Charging Letter to ASI that 
alleged that ASI committed one violation of the EAR. Specifically:
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    \1\ The violation alleged by BIS occurred between 2005 and 2007. 
The governing provisions of the EAR are found in the 2005-2007 
versions of the Code of Federal Regulations (15 CFR Parts 730-774 
(2005-2007)). The 2009 version of the EAR establishes the procedures 
that apply to the BIS administrative proceeding.
    \2\ Since August 21, 2001, the EAA has been in lapse and the 
President, through Executive Order 13222 of August 17, 2001 (3 CFR, 
2001 Comp. 783 (2002)), as extended most recently by the Notice of 
August 13, 2009 (74 FR 41325 (August 14, 2009)), has continued the 
EAR in effect under the International Emergency Economic Powers Act 
(50 U.S.C. 1701, et seq.) (``IEEPA'').
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Charge 1 15 CFR 764.2(d)--Conspiracy

    Between on or about October 1, 2005, and continuing through on or 
about October 30, 2007, ASI conspired and acted in concert with others, 
known and unknown, to violate the Regulations and to bring about acts 
that constitute violations of the Regulations. The purpose of the 
conspiracy was to export U.S.-origin items including aircraft parts, 
electronic components, and polymide film on multiple occasions, from 
the United States to Iran, via the Netherlands, Cyprus, and the United 
Arab Emirates (``UAE''), without the required U.S. Government 
authorization. Pursuant to section 746.7 of the Regulations, 
authorization was required from OFAC before the aircraft parts, 
electronic components, and polymide film, items subject to the 
Regulations \3\ and the Iranian Transactions Regulations, 31 CFR part 
560 (``ITR''), could be exported from the United States to Iran. 
Pursuant to section 560.204 of the ITR, an export to a third country 
intended for transshipment to Iran is a transaction subject to the ITR. 
In furtherance of the conspiracy, ASI and its co-conspirators devised 
and employed a scheme to purchase these items from the United States on 
behalf of Iranian customers and give U.S. manufacturers false 
information regarding the ultimate destination, end user, and end use 
of the items, thereby causing false export control documents to be 
submitted to the U.S. Government listing countries other than Iran as 
the ultimate destination for the items. These acts were taken to export 
U.S.-origin items to Iran without the required U.S. Government 
authorization and avoid detection by law enforcement. By engaging in 
this activity, ASI committed one violation of section 764.2(d) of the 
Regulations.
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    \3\ The items were classified as Export Control Classification 
Numbers (``ECCN'') 9A991, 1C008.A.3, 5A991. Additionally, some of 
the aircraft parts were designated EAR99, which is a designation for 
items subject to the Regulations but not listed on the Commerce 
Control List. (2005-2007).
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    Whereas, BIS and ASI have entered into a Settlement Agreement 
pursuant to Section 766.18 of the EAR, whereby they agreed to settle 
this matter in accordance with the terms and conditions set forth 
therein; \4\ and
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    \4\ The Settlement Agreement also resolves allegations by the 
U.S. Department of Treasury, Office of Foreign Assets Control 
(``OFAC''), which is also a party to the Settlement Agreement, of 
apparent violations of the Iranian Transactions Regulations, 31 CFR 
part 560 (``ITR'' or the ``OFAC Regulations''). ASI's apparent 
violations of the OFAC Regulations are contained in an OFAC 
Prepenalty Notice that was issued by OFAC on or about September 24, 
2009, identified as FAC Number IA-365318.
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    Whereas, I have approved of the terms of the Settlement Agreement; 
\5\
    It is therefore ordered:
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    \5\ This Order signifies my approval of the Settlement Agreement 
based on the violations alleged in the Proposed Charging Letter, and 
not the OFAC Prepenalty Notice referenced in note 4, supra.
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    First, that a civil penalty of $250,000 is assessed against ASI. 
Payment of the $250,000 penalty shall be suspended for a period of 
three (3) years from the date the BIS Order is issued and thereafter 
shall be waived provided that during the period of suspension, ASI has 
committed no violation of the EAA, EAR or any order or license issued 
thereunder.
    Second, that for a period of seven (7) years from the date of this 
Order, Aviation Services International, B.V., also known as Delta 
Logistics, B.V., P.O. Box 418, Heerhugowaard, Netherlands 1700AK and 
Fleming Straat 36, Heerhugowaard, Netherlands, 1700AK, its successors 
or assigns, and, when acting for or on behalf of ASI, its officers, 
representatives, agents 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. 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.
    Third, that no person may, directly or indirectly, do any of the 
actions described below with respect to an item that is subject to the 
Regulations that has been, will be, or is intended to be exported or 
reexported from the United States:
    A. Export or reexport to or on behalf of a Denied Person any item 
subject to the Regulations;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by a 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 a 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 a Denied Person of any item subject to 
the Regulations that has been exported from the United States;
    D. Obtain from a 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 a Denied Person, or 
service any item, of whatever origin, that is owned, possessed or 
controlled by a 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 ASI 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.
    Fifth, that this Order does not prohibit any export, reexport, or 
other transaction subject to the EAR where the only items involved that 
are subject to the EAR are the foreign-produced direct product of U.S.-
origin technology.
    Sixth, that the Proposed Charging Letter, the Settlement Agreement, 
and this Order shall be made available to the public.

[[Page 11115]]

    Seventh, that this Order shall be served on the Denied Person and 
shall be published in the Federal Register.
    This Order, which constitutes the final BIS action in this matter, 
is effective immediately.

     Issued this 2nd day of March 2010.
David W. Mills,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2010-5107 Filed 3-9-10; 8:45 am]
BILLING CODE 3510-DT-P