[Federal Register Volume 76, Number 79 (Monday, April 25, 2011)]
[Notices]
[Pages 22865-22867]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9932]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


 Action Affecting Export Privileges; Orion Air, S.L. and Syrian 
Pearl Airlines

    In the Matter of:

Orion Air, S.L., Canada Real de Merinas, 7 Edificio 5, 3'A, 
Eissenhower business center, 28042 Madrid, Spain; and Ad. de las 
Cortes Valencianas no 37, Esc.A Puerta 45 46015 Valencia, Spain; and 
Syrian Pearl Airlines, Damascus International Airport, Damascus, 
Syria, Respondents.

Order Renewing Temporary Denial of Export Privileges

    Pursuant to Section 766.24 of the Export Administration 
Regulations, 15 CFR parts 730-774 (2011) (``EAR'' or the 
``Regulations''), I hereby grant the request of the Bureau of Industry 
and Security (``BIS'') to renew for 180 days the Order Temporarily 
Denying the Export Privileges of Respondents Orion Air, S.L. (``Orion 
Air'') and Syrian Pearl Airlines (collectively, ``Respondents''), as I 
find that renewal of the temporary denial order (``TDO'' or the 
``Order'') is necessary in the public interest to prevent an imminent 
violation of the EAR.

I. Procedural History

    On May 7, 2009, then-Acting Assistant Secretary of Commerce for 
Export Enforcement Kevin Delli-Colli signed an Order Temporarily 
Denying the Export Privileges of the Respondents for 180 days on the 
grounds that its issuance was necessary in the public interest to 
prevent an imminent violation of the Regulations. Pursuant to Section 
766.24(a), the TDO was issued ex parte and was effective upon issuance. 
Copies of the TDO were sent to each Respondent in accordance with 
Section 766.5 of the Regulations and the Order was published in the 
Federal Register on May 26, 2009.\1\ Thereafter, Acting Assistant 
Secretary Delli-Colli issued an Order on November 2, 2009, renewing the 
TDO for an additional 180 days, and I similarly issued a 180-day 
renewal Order on April 29, 2010.\2\
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    \1\ 74 FR 24,786.
    \2\ The November 2, 2009 renewal Order was published in the 
Federal Register on November 9, 2009 (74 FR 57,626). The April 29, 
2010 renewal Order was published in the Federal Register on May 7, 
2010 (75 FR 25,002).
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    Most recently, on October 22, 2010, I renewed the TDO against the 
Respondents for an additional 180 days. This renewal was effective upon 
issuance and was published in the Federal Register on October 29, 
2010.\3\ The current Order would expire on April 20, 2011, unless 
renewed in accordance with Section 766.24 of the Regulations.
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    \3\ 75 FR 66,728 (October 29, 2010).
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    On March 28, 2011, BIS, through its Office of Export Enforcement 
(``OEE''), filed a written request for renewal of the TDO against the 
Respondents for an additional 180 days. A copy of this request was 
delivered to the Respondents in accordance with Section 766.5 of the 
Regulations. No opposition to renewal of the TDO has been received from 
either Orion Air or Syrian Pearl Airlines.

II. Discussion

 A. Legal Standard

    Pursuant to section 766.24(d)(3) of the EAR, the sole issue to be 
considered in determining whether to continue a TDO is whether the TDO 
should be renewed to prevent an imminent violation of the EAR, as 
``imminent'' violation is defined in Section 766.24. ``A violation may 
be `imminent' either in time or in degree of likelihood.'' 15 CFR 
766.24(b)(3). BIS may show ``either that a violation is about to occur, 
or that the general circumstances of the matter under investigation or 
case under criminal or administrative charges demonstrate a likelihood 
of future violations.'' Id. As to the likelihood of future violations, 
BIS may show that ``the violation under investigation or charges is 
significant, deliberate, covert and/or likely to occur again, rather 
than technical and negligent[.]'' Id. A ``lack of information 
establishing the precise time a violation may occur does not preclude a 
finding that a violation is imminent, so long as there is sufficient 
reason to believe the likelihood of a violation.'' Id.

 B. Findings

    As part of its initial TDO request, BIS presented evidence that on 
or about May 1, 2009, Orion Air re-exported a BAE 146-300 aircraft 
(tail number EC-JVO) to Syria, and specifically to Syrian Pearl 
Airlines, without the U.S. Government authorization required by General 
Order No. 2 of Supplement 1 to Part 736 of the EAR. The aircraft is 
subject to the Regulations because it contains greater than a 10-
percent de minimis amount of U.S.-origin content. Orion Air engaged in 
this re-export transaction despite having been directly informed of the 
export licensing requirements by the U.S. Government. Moreover, Orion 
Air not only engaged in this conduct after having received actual as 
well as constructive notice of the applicable license requirements, but 
then sought to evade the Regulations and U.S. export controls by giving 
the U.S. Government false assurances that it would put the transaction 
on hold due to the U.S. Government's concerns.
    BIS also produced evidence that the re-exported aircraft bore the 
livery, colors and logos of Syrian Pearl Airlines, a national of Syria, 
a Country Group E:1 destination; was flight capable; and under the 
terms of the lease agreement was to be based in and operated out of 
Syria during the lease term. The record also shows that the re-exported 
aircraft currently remains in Syria under the control of Syrian Pearl 
Airlines.

[[Page 22866]]

    In addition to the unauthorized re-export described above, Acting 
Assistant Secretary Delli-Colli also concluded that additional 
violations were imminent based on statements by Orion Air to the U.S. 
Government in May 2009 that Orion Air planned to re-export an 
additional BAE 146-300 aircraft (tail number EC-JVJ) to Syria, and 
specifically to Syrian Pearl Airlines. This second aircraft was at the 
time undergoing maintenance in the United Kingdom, and remains located 
there. Moreover, the agreement between Orion Air and Syrian Pearl 
Airlines involved both aircraft being re-exported to Syria for Syrian 
Pearl Airlines' use and benefit.
    On December 10, 2010, pursuant to Section 764.3(a)(2) of the 
Regulations, BIS authorized Orion Air and Syrian Pearl Airlines to 
enter into a three-way release agreement with a third party that would 
terminate the original lease agreement between Orion Air and Syrian 
Pearl Airlines and allow the third party to take legal and physical 
control of both aircraft. Additionally, BIS authorized the performance 
of maintenance needed to make both aircraft flight-worthy, and 
authorized the third party to remove aircraft EC-JVO from Syria to any 
country not listed in Country Group E:1 \4\ of Supplement 1 to Part 740 
of the Regulations. Evidence obtained by BIS indicates that in the more 
than four months since this authorization was granted, aircraft EC-JVO 
has not been removed from Syria and remains in Syria under Syrian 
control. Thus, a significant risk remains that absent renewal of the 
TDO, this aircraft will be operated or disposed of in violation of the 
Regulations. Moreover, in spite of the authorization, there has been no 
change regarding aircraft EC-JVJ, which remains in the same status in 
the United Kingdom. Absent renewal of the TDO, there remains a 
substantial continued risk that aircraft EC-JVJ will be re-exported 
contrary to the Regulations, given that, inter alia, Orion Air acted 
with actual knowledge and took deceptive and evasive action, as 
discussed supra.
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    \4\ Group E:1 destinations are currently Syria, Iran, Cuba, 
Sudan and North Korea. See Supplement No. 1 to 15 CFR part 740 
(2011).
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    Based on my review of the record, I find that the facts and 
circumstances here, including those that led to the issuance of the 
initial TDO and subsequent renewal Orders, continue to show that 
renewal of the TDO for an additional 180 days is necessary and in the 
public interest to prevent an imminent violation of the EAR. 
Furthermore, renewal of the TDO is needed to give notice to persons and 
companies in the United States and abroad that they should cease 
dealing with the Respondents in export transactions involving items 
subject to the EAR.
    It is therefore ordered:
    First, that, Orion Air, S.L., Canada Real de Merinas, 7 Edificio 5, 
3'A, Eissenhower business center, 28042 Madrid, Spain, and Ad. de las 
Cortes Valencianas no 37, Esc.A Puerta 4546015 Valencia, Spain, and 
when acting for or on its behalf, any of its successors, assigns, 
agents, or employees; and Syrian Pearl Airlines, Damascus International 
Airport, Damascus, Syria, and when acting on its behalf, any of its 
successors, assigns, agents, or employees (each a ``Denied Person'' and 
collectively the ``Denied Persons'') 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 Export Administration Regulations (``EAR''), or in any 
other activity subject to the EAR 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 EAR, or in any other activity 
subject to the EAR; 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 EAR, or in any other activity subject to the EAR.
    Second, that no person may, directly or indirectly, do any of the 
following:
    A. Export or re-export to or on behalf of any Denied Person any 
item subject to the EAR;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by any Denied Person of the ownership, possession, or 
control of any item subject to the EAR that has been or will be 
exported from the United States, including financing or other support 
activities related to a transaction whereby any 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 any Denied Person of any item subject to 
the EAR that has been exported from the United States;
    D. Obtain from any Denied Person in the United States any item 
subject to the EAR 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 EAR 
that has been or will be exported from the United States and which is 
owned, possessed or controlled by any Denied Person, or service any 
item, of whatever origin, that is owned, possessed or controlled by any 
Denied Person if such service involves the use of any item subject to 
the EAR 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 EAR, any other person, firm, corporation, or 
business organization related to any of the Respondents 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, re-export, 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.
    In accordance with the provisions of Section 766.24(e) of the EAR, 
the Respondents may, at any time, appeal this Order by filing a full 
written statement in support of the appeal with the Office of the 
Administrative Law Judge, U.S. Coast Guard ALJ Docketing Center, 40 
South Gay Street, Baltimore, Maryland 21202-4022.
    BIS may seek renewal of this Order by filing a written request with 
the Assistant Secretary of Commerce for Export Enforcement in 
accordance with the provisions of Section 766.24(d) of the Regulations, 
which currently provides that such a written renewal request must be 
submitted not later than 20 days before the expiration date. The 
Respondents may oppose a request to renew this Order by doing so in 
accordance with Section 766.24(d), including filing a written 
submission with the Assistant Secretary for Export Enforcement, 
supported by appropriate evidence. Any opposition ordinarily must be 
received not later than seven days before the expiration date of the 
Order.
    Notice of the issuance of this Order shall be given to Respondents 
in accordance with Sections 766.5(b). This Order also shall be 
published in the

[[Page 22867]]

Federal Register. This Order is effective upon issuance and shall 
remain in effect for 180 days.

    Issued this 18th day of April 2011.
David W. Mills,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2011-9932 Filed 4-22-11; 8:45 am]
BILLING CODE 3510-DT-P