[Federal Register Volume 77, Number 36 (Thursday, February 23, 2012)]
[Notices]
[Pages 10719-10722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-4207]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Order Renewing Order Temporarily Denying Export Privileges

Mahan Airways, Mahan Tower, No. 21, Azadegan St., M.A. Jenah Exp. 
Way, Tehran, Iran;
Zarand Aviation, a/k/a GIE Zarand Aviation, 42 Avenue Montaigne, 
75008 Paris, France;

and

112 Avenue Kleber, 75116 Paris, France;

Gatewick LLC, a/k/a Gatewick Freight & Cargo Services, a/k/a/
Gatewick Aviation Services, G22 Dubai Airport Free Zone, 
P.O Box 393754, Dubai, United Arab Emirates;

and

P.O. Box 52404, Dubai, United Arab Emirates;

and

Mohamed Abdulla Alqaz Building, Al Maktoum Street, Al Rigga, Dubai, 
United Arab Emirates;
Pejman Mahmood Kosarayanifard, a/k/a Kosarian Fard, P.O. Box 52404, 
Dubai, United Arab Emirates;
Mahmoud Amini, G22 Dubai Airport Free Zone, P.O. Box 
393754, Dubai, United Arab Emirates;
and

P.O. Box 52404, Dubai, United Arab Emirates;

and

Mohamed Abdulla Alqaz Building, Al Maktoum Street, Al Rigga, Dubai, 
United Arab Emirates;
Kerman Aviation, a/k/a GIE Kerman Aviation, 42 Avenue Montaigne 
75008, Paris, France;
Sirjanco Trading, P.O. Box 8709, Dubai, United Arab Emirates;
Ali Eslamian, 4th Floor, 33 Cavendish Square, London, W1G0PW, United 
Kingdom;

and

2 Bentinck Close, Prince Albert Road St., Johns Wood, London NW87RY, 
United Kingdom

    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 Office of Export 
Enforcement (``OEE'') to renew the August 24, 2011 Order Temporarily 
Denying the Export Privileges of Mahan Airways, Zarand Aviation, 
Gatewick LLC, Pejman Mahmood Kosarayanifard, Mahmoud Amini, Kerman 
Aviation, Sirjanco Trading LLC, and Ali Eslamian, as I find that 
renewal of the Temporary Denial Order (``TDO'') is necessary in the 
public interest to prevent an imminent violation of the EAR.\1\
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    \1\ The August 24, 2011 Order was published in the Federal 
Register on August 31, 2011. See 76 FR 54198.
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I. Procedural History

    On March 17, 2008, Darryl W. Jackson, the then-Assistant Secretary 
of Commerce for Export Enforcement (``Assistant Secretary''), signed a 
TDO denying Mahan Airways' export privileges for a period of 180 days 
on the grounds that its issuance was necessary in the public interest 
to prevent an imminent violation of the Regulations. The TDO also named 
as denied persons Blue Airways, of Yerevan, Armenia (``Blue Airways of 
Armenia''), as well as the ``Balli Group Respondents,'' namely, Balli 
Group PLC, Balli Aviation, Balli Holdings, Vahid Alaghband, Hassan 
Alaghband, Blue Sky One Ltd., Blue Sky Two Ltd., Blue Sky Three Ltd., 
Blue Sky Four Ltd., Blue Sky Five Ltd., and Blue Sky Six Ltd., all of 
the United Kingdom. The TDO was issued ex parte pursuant to Section 
766.24(a), and went into effect on March 21, 2008, the date it was 
published in the Federal Register.
    The TDO subsequently has been renewed in accordance with Section 
766.24(d), including most recently on August 24, 2011, with 
modifications and the additions of related persons having been made to 
the TDO during 2010 and 2011.\2\ As of March 9, 2010, the Balli Group 
Respondents and Blue Airways were no longer subject to the TDO. As part 
of the February 25, 2011 TDO renewal, Gatwick LLC, Mahmoud Amini, and 
Pejman Mahmood Kasarayanifard (``Kosarian Fard'') were added as related 
persons in accordance with Section 766.23 of the Regulations. On July 
1, 2011, the TDO was modified by adding Zarand Aviation as a respondent 
in order to prevent an imminent violation. Specifically, Zarand 
Aviation owned an Airbus A310, an aircraft subject to the Regulations, 
that was being operated for the benefit of Mahan Airways in violation 
of both the TDO and the

[[Page 10720]]

Regulations. As part of the August 24, 2011 renewal, Kerman Aviation, 
Sirjanco Trading LLC, and Ali Eslamian were added to the TDO as related 
persons.
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    \2\ The TDO was renewed on September 17, 2008, March 16, 2009, 
September 11, 2009, March 9, 2010, September 3, 2010, February 24, 
2011, and August 24, 2011. The August 24, 2011 renewal followed the 
modification of the TDO on July 1, 2011, which, as discussed above, 
added Zarand Aviation as a respondent. Each renewal or modification 
order was published in the Federal Register.
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    On January 27, 2012, BIS, through its Office of Export Enforcement 
(``OEE''), filed a written request for renewal of the TDO. The current 
TDO dated August 24, 2011, will expire, unless renewed, on February 19, 
2012. Notice of the renewal request was provided to Mahan Airways and 
Zarand Aviation by delivery of a copy of the request in accordance with 
Sections 766.5 and 766.24(d) of the Regulations. No opposition to any 
aspect of renewal of the TDO has been received from either Mahan 
Airways or Zarand Aviation. Further, no appeal of the related person 
determinations I made as part of the September 3, 2010, February 25, 
2011 and August 24, 2011 Renewal Orders has been made by Gatewick LLC, 
Kosarian Fard, Mahmoud Amini, Kerman Aviation, Sirjanco Trading LLC or 
Ali Eslamian.\3\
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    \3\ A party named or added as a related person may not oppose 
the issuance or renewal of the underlying temporary denial order, 
but may file an appeal of the related person determination in 
accordance with Section 766.23(c).
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 II. Renewal of the TDO

A. Legal Standard

    Pursuant to Section 766.24, BIS may issue or renew an order 
temporarily denying a respondent's export privileges upon a showing 
that the order is necessary in the public interest to prevent an 
``imminent violation'' of the Regulations. 15 CFR 766.24(b)(1) and 
776.24(d). ``A violation may be `imminent' either in time or 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 or 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. The TDO and BIS's Request for Renewal

    OEE's request for renewal is based upon the facts underlying the 
issuance of the initial TDO and the TDO renewals in this matter and the 
evidence developed over the course of this investigation indicating a 
blatant disregard of U.S. export controls and the TDO. The initial TDO 
was issued as a result of evidence that showed that Mahan Airways and 
other parties engaged in conduct prohibited by the EAR by knowingly re-
exporting to Iran three U.S.-origin aircraft, specifically Boeing 747s 
(``Aircraft 1-3''), items subject to the EAR and classified under 
Export Control Classification Number (``ECCN'') 9A991.b, without the 
required U.S. Government authorization. Further evidence submitted by 
BIS indicated that Mahan Airways was involved in the attempted re-
export of three additional U.S.-origin Boeing 747s (``Aircraft 4-6'') 
to Iran.
    As discussed in the September 17, 2008 TDO Renewal Order, evidence 
presented by BIS indicated that Aircraft 1-3 continued to be flown on 
Mahan Airways' routes after issuance of the TDO, in violation of the 
Regulations and the TDO itself.\4\ It also showed that Aircraft 1-3 had 
been flown in further violation of the Regulations and the TDO on the 
routes of Iran Air, an Iranian Government airline. Moreover, as 
discussed in the March 16, 2009, September 11, 2009 and March 9, 2010 
Renewal Orders, Mahan Airways registered Aircraft 1-3 in Iran, obtained 
Iranian tail numbers for them (including EP-MNA and EP-MNB), and 
continued to operate at least two of them in violation of the 
Regulations and the TDO,\5\ while also committing an additional knowing 
and willful violation of the Regulations and the TDO when it negotiated 
for and acquired an additional U.S.-origin aircraft. The additional 
acquired aircraft was an MD-82 aircraft, which subsequently was painted 
in Mahan Airways' livery and flown on multiple Mahan Airways' routes 
under tail number TC-TUA.
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    \4\ Engaging in conduct prohibited by a denial order violates 
the Regulations. 15 CFR 764.2(a) and (k).
    \5\ The third Boeing 747 appeared to have undergone significant 
service maintenance and may not have been operational at the time of 
the March 9, 2010 Renewal Order.
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    The March 9, 2010 Renewal Order also noted that a court in the 
United Kingdom (``U.K.'') had found Mahan Airways in contempt of court 
on February 1, 2010, for failing to comply with that court's December 
21, 2009 and January 12, 2010 orders compelling Mahan Airways to remove 
the Boeing 747s from Iran and ground them in the Netherlands. Mahan 
Airways and the Balli Group Respondents had been litigating before the 
U.K. court concerning ownership and control of Aircraft 1-3. In a 
letter to the U.K. court dated January 12, 2010, Mahan Airways' 
Chairman indicated, inter alia, that Mahan Airways opposes U.S. 
Government actions against Iran, that it continued to operate the 
aircraft on its routes in and out of Tehran (and had 158,000 ``forward 
bookings'' for these aircraft), and that it wished to continue to do so 
and would pay damages if required by that court, rather than ground the 
aircraft.
    The September 3, 2010 Renewal Order pointed out that Mahan Airways' 
violations of the TDO extended beyond operating U.S.-origin aircraft in 
violation of the TDO and attempting to acquire additional U.S.-origin 
aircraft. In February 2009, while subject to the TDO, Mahan Airways 
participated in the export of computer motherboards, items subject to 
the Regulations and designated as EAR99, from the United States to 
Iran, via the UAE, in violation of both the TDO and the Regulations, by 
transporting and/or forwarding the computer motherboards from the UAE 
to Iran. Mahan Airways' violations were facilitated by Gatewick LLC, 
which not only participated in the transaction, but also has stated to 
BIS that it is Mahan Airways' sole booking agent for cargo and freight 
forwarding services in the UAE.
    Moreover, in a January 24, 2011 filing in the U.K. Court, Mahan 
Airways asserted that Aircraft 1-3 were not being used, but stated in 
pertinent part that the aircraft were being maintained in Iran 
especially ``in an airworthy condition'' and that, depending on the 
outcome of its U.K. Court appeal, the aircraft ``could immediately go 
back into service * * * on international routes into and out of Iran.'' 
Mahan Airways' January 24, 2011 submission to U.K. Court of Appeal, at 
p. 25, paragraphs 108, 110. This clearly stated intent, both on its own 
and in conjunction with Mahan Airways' prior misconduct and statements, 
demonstrated the need to renew the TDO in order to prevent imminent 
future violations.
    More recently, as noted in the July 1, 2011 and August 24, 2011 
Orders, Mahan Airways has continued to evade U.S. export control laws 
by operating two Airbus A310 aircraft \6\ bearing Mahan Airways' 
livery, colors and logo on flights into and out of Iran. The

[[Page 10721]]

aircraft are owned, respectively, by Zarand Aviation and Kerman 
Aviation, entities whose corporate registrations both list Mahan Air 
General Trading as a member of their Groupement D'interet Economique 
(``Economic Interest Group''). \7\
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    \6\ The Airbus A310s are powered with U.S.-origin engines. The 
engines are subject to the EAR and classified under Export Control 
Classification (``ECCN'') 9A991.d. The Airbus A310s contain 
controlled U.S.-origin items valued at more than 10 percent of the 
total value of the aircraft and as a result are subject to the EAR. 
They are classified under ECCN 9A991.b. The reexport of these 
aircraft to Iran requires U.S. Government authorization pursuant to 
Section 746.7 of the Regulations.
    \7\ Kerman Aviation's corporate registration also lists Mahan 
Aviation Services Company as an additional member of its Economic 
Interest Group.
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    At the time of the July 1, 2011 and August 24, 2011 Orders, these 
Airbus A310s were registered in France (with tail numbers F-OJHH and F-
OJHI, respectively). OEE's current renewal request provides further 
evidence that Mahan Airways and Zarand Aviation continue their efforts 
to circumvent the TDO and the Regulations. After the August 24, 2011 
renewal, Mahan Airways and Zarand Aviation worked in concert, along 
with Kerman Aviation, to de-register the two Airbus A310 aircraft in 
France and subsequently register both aircraft in Iran (with, 
respectively, Iranian tail numbers EP-MHH and EP-MHI). Both aircraft 
are active in Mahan Airways' fleet on flights in and out of Iran. These 
actions, taken after Zarand's addition to the TDO, have made it more 
likely that the aircraft will continue to operate in a manner contrary 
to U.S. export control laws.
    OEE's renewal request includes other evidence of continued or 
additional violations. As referenced supra, Ali Eslamian was added as a 
related person on August 24, 2011, in order to help prevent evasion of 
the TDO by Mahan Airways or other denied persons. Additionally, 
Eslamian has admitted to OEE that he formed Skyco (U.K.) Ltd., a 
company that buys and sells aircraft, aircraft engines and other 
aviation related services, with Mahan Airways' managing director and 
its vice president for business development. BIS has also obtained 
evidence that Eslamian has negotiated, including through his company 
Equipco, with a Brazilian airline for the purchase of two Airbus A-320 
aircraft and one aircraft engine, all items that are subject to the 
Regulations and require U.S. Government authorization for reexport to 
Iran.\8\ Eslamian signed a letter of intent with the Brazilian airline 
on November 20, 2009, and subsequently signed a sales and purchase 
agreement for the engine in April 2010. In spite of being added to the 
TDO on August 24, 2011, Eslamian signed a second letter of intent with 
the Brazilian airline regarding these two A-320 aircraft on September 
28, 2011, and at least as recently as December 2011, his efforts to 
acquire both the aircraft and the engine continued.
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    \8\ The Airbus A320s are powered with U.S.-origin engines. The 
engines are subject to the EAR and classified under ECCN 9A991.d. 
The Airbus A320s contain controlled U.S.-origin items valued at more 
than 10 percent of the total value of the aircraft and as a result 
are subject to the EAR. They are classified as ECCN 9A991.b. The 
reexport of these aircraft to Iran would require U.S. Government 
authorization pursuant to Section 746.7 of the Regulations, as would 
the reexport of the aircraft engine.
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C. Findings

    Under the applicable standard set forth in Section 766.24 of the 
Regulations and my review of the record here, I find that the evidence 
presented by BIS convincingly demonstrates that Mahan Airways has 
continually violated the EAR and the TDO, that such knowing violations 
have been significant, deliberate and covert, and that there is a 
likelihood of future violations. Additionally, since the August 24, 
2011 renewal Order, Zarand Aviation's Airbus A310 continues to be 
operated on routes into and out of Iran in violation of the Regulations 
and the TDO itself, and Zarand Aviation has acted in concert with Mahan 
Airways in an effort to evade the TDO and U.S. export control laws. 
Therefore, renewal of the TDO is necessary to prevent imminent 
violation of the EAR and to give notice to companies and individuals in 
the United States and abroad that they should continue to cease dealing 
with Mahan Airways, Zarand Aviation, and the other denied persons under 
the TDO in export transactions involving items subject to the EAR. The 
conduct of Mahan Airways, Zarand Aviation, and those related to them or 
acting in concert with them, such as Kerman Aviation and Ali Eslamian, 
raise significant ongoing concerns relating to the acquisition and use 
of aircraft, aircraft engines or other parts, and aircraft services in 
violation of the Regulations and the TDO.

IV. Order

    It Is Therefore Ordered:
    First, that MAHAN AIRWAYS, Mahan Tower, No. 21, Azadegan St., M.A. 
Jenah Exp. Way, Tehran, Iran; ZARAND AVIATION A/K/A GIE ZARAND 
AVIATION, 42 Avenue Montaigne, 75008 Paris, France, and 112 Avenue 
Kleber, 75116 Paris, France; GATEWICK LLC, A/K/A GATEWICK FREIGHT & 
CARGO SERVICES, A/K/A GATEWICK AVIATION SERVICE, G22 Dubai 
Airport Free Zone, P.O. Box 393754, Dubai, United Arab Emirates, and 
P.O. Box 52404, Dubai, United Arab Emirates, and Mohamed Abdulla Alqaz 
Building, Al Maktoum Street, Al Rigga, Dubai, United Arab Emirates; 
PEJMAN MAHMOOD KOSARAYANIFARD A/K/A KOSARIAN FARD, P.O. Box 52404, 
Dubai, United Arab Emirates; MAHMOUD AMINI, G22 Dubai Airport 
Free Zone, P.O. Box 393754, Dubai, United Arab Emirates, and P.O. Box 
52404, Dubai, United Arab Emirates, and Mohamed Abdulla Alqaz Building, 
Al Maktoum Street, Al Rigga, Dubai, United Arab Emirates; KERMAN 
AVIATION A/K/A GIE KERMAN AVIATION, 42 Avenue Montaigne 75008, Paris, 
France; SIRJANCO TRADING LLC, P.O. Box 8709, Dubai, United Arab 
Emirates; and ALI ESLAMIAN, 4th Floor, 33 Cavendish Square, London 
W1G0PW, United Kingdom, and 2 Bentinck Close, Prince Albert Road, St. 
Johns Wood, London NW87RY, United Kingdom and when acting for or on 
their behalf, any successors or 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. Benefiting 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 reexport to or on behalf of a Denied Person any item 
subject to the EAR;
    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 EAR 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

[[Page 10722]]

item subject to the EAR that has been exported from the United States;
    D. Obtain from a 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 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 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 a 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 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 Sections 766.24(e) and 
766.23(c)(2) of the EAR, Mahan Airways, Zarand Aviation, Gatewick LLC, 
Mahmoud Amini, Kosarian Fard, Kerman Aviation, Sirjanco Trading LLC 
and/or Ali Eslamian 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.
    In accordance with the provisions of Section 766.24(d) of the EAR, 
BIS may seek renewal of this Order by filing a written request not 
later than 20 days before the expiration date. A renewal request may be 
opposed by Mahan Airways and/or Zarand Aviation as provided in Section 
766.24(d), by filing a written submission with the Assistant Secretary 
of Commerce for Export Enforcement, which must be received not later 
than seven days before the expiration date of the Order.
    A copy of this Order shall be provided to Mahan Airways, Zarand 
Aviation and each related person and shall be published in the Federal 
Register. This Order is effective immediately and shall remain in 
effect for 180 days.

     Dated: February 15, 2012.
David W. Mills,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2012-4207 Filed 2-22-12; 8:45 am]
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