[Federal Register Volume 78, Number 145 (Monday, July 29, 2013)]
[Notices]
[Pages 45497-45502]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-18078]


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 DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[10-BIS-0002]


Final Decision and Order

    In the Matter of:
Chan Heep Loong, 95 Havelock Road, 14-583, Singapore, 
160095 SG; Respondent.

    This matter is before me upon a Recommended Decision and Order 
(``RDO'') of an Administrative Law Judge (``ALJ''), as further 
described below.\1\
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    \1\ I received the certified record from the ALJ, including the 
original copy of the RDO, for my review on June 26, 2013. The RDO is 
dated June 25, 2013. BIS timely submitted a response to the RDO, 
while Respondent has not filed a response to the RDO.
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I. Background

    On February 10, 2010, the Bureau of Industry and Security (``BIS'') 
issued a Charging Letter alleging that Respondent, Chan Heep Loong, of 
Singapore (``Loong'' or ``Respondent''), committed three violations of 
the Export Administration Regulations (``Regulations''),\2\ issued 
pursuant to the Export Administration Act of 1979, as amended (50 
U.S.C. app. 2401-2420 (2000)) (``Act'').\3\ The Charging Letter 
included the following specific allegations:
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    \2\ The Regulations currently are codified at 15 CFR Parts 730-
774 (2013). The charged violations occurred in 2005 and 2006. The 
Regulations governing the violations at issue are found in the 2005 
and 2006 versions of the Code of Federal Regulations. 15 CFR Parts 
730-774 (2005-06). The 2013 Regulations establish the procedures 
that apply to this matter. All citations herein to provisions of 
Part 766 (Administrative Enforcement Proceedings) are to the 2013 
version of the Regulations. All other citations to the Regulations 
are to the 2005 and 2006 versions of the Regulations, as applicable, 
unless otherwise indicated. For ease of reference, I note that the 
2005, 2006, and 2013 versions of the Regulations are the same with 
respect to the provisions of Section 764.2 and Part 766 cited 
herein, while Section 746.7 remains substantively the same in 
pertinent part.
    \3\ Since August 21, 2001, the Act has been in lapse and the 
President, through Executive Order 13,222 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, 2012 
(77 FR 49,699 (Aug. 16, 2012)), has continued the Regulations in 
effect under the International Emergency Economic Powers Act (50 
U.S.C. 1701, et seq.) (2006 and Supp. IV 2010).
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Charge 1 15 CFR 764.2(b)--Causing an Export to Iran Without 
Authorization

    From on or about February 14, 2005, through on or about February 
24, 2005, Loong caused the doing of an act prohibited by the 
Regulations. Specifically, Loong caused the export from the United 
States to Iran, via transshipment through Singapore, of GPS engines, 
items subject to the Regulations and the Iranian Transaction 
Regulations (``ITR'') of the Department of the Treasury's Office of 
Foreign Assets Control (``OFAC''), without the required U.S. 
Government authorization. Specifically, Loong, in his capacity as 
Owner/Operator of Tysonic Enterprises (``Tysonic''), of Singapore, 
ordered and/or bought the GPS engines, items that are classified 
under Export Control Classification Number (``ECCN'') 7A994 and are 
controlled for anti-terrorism reasons, from a U.S. company without 
informing that company of the intended final destination of the 
items. Loong then instructed the U.S. company to ship the items from 
the United States to Tysonic in Singapore, and, following arrival in 
Singapore, the items were then forwarded to Iran. Pursuant to 
Section 734.2(b)(6) of the Regulations, the export of an item from 
the United States to a second country intended for transshipment to 
a third country is deemed to be an export to that third country. 
Under Section 746.7 of the Regulations, a license from either BIS or 
OFAC is required to export to Iran items subject to control for 
anti-terrorism reasons, including items listed under ECCN 7A994. 
Neither BIS nor OFAC authorized the exports of the items described 
above to Iran. In engaging in the activity described herein, Loong 
committed one violation of Section 764.2(b) of the Regulations.

Charge 2 15 CFR 764.2(b)--Causing an Export to Iran Without 
Authorization

    From on or about April 22, 2005, through on or about May 12, 
2005, Loong caused the doing of an act prohibited by the 
Regulations. Specifically, Loong caused the export from the United 
States to Iran, via transshipment through Singapore, of a peak power 
meter, an item subject to the Regulations and the Iranian 
Transaction Regulations (``ITR'') of the Department of the 
Treasury's Office of Foreign Assets Control (``OFAC''), without the 
required U.S. Government authorization. Specifically, Loong, in his 
capacity as Owner/Operator of Tysonic, ordered and/or bought the 
peak power meter, an item classified under ECCN 3A992 and is 
controlled for anti-terrorism reasons, from a U.S. company [ ]. 
Loong then instructed the U.S. company to ship the items from the 
United States to Tysonic in Singapore, and, following arrival in 
Singapore, the items were then forwarded to Iran. Pursuant to 
Section 734.2(b)(6) of the Regulations, the export of an item from 
the United States to a second country intended for transshipment to 
a third country is deemed to be an export to that third country. 
Under Section 746.7 of the Regulations, a license from BIS or OFAC 
is required to export to Iran items subject to control for anti-
terrorism reasons, including items listed under ECCN 3A992. Neither 
BIS nor OFAC authorized the export of the items described above to 
Iran. In engaging in the activity described herein, Loong committed 
one violation of Section 764.2(b) of the Regulations.

Charge 3 15 CFR 764.2(k)--Violation of Terms of an Order Temporarily 
Denying Export Privileges

    On or about August 29, 2006, Loong engaged in conduct prohibited 
by an Order issued by the Assistant Secretary of Commerce for Export 
Enforcement on April 12, 2006 pursuant to Section 766.24 of the 
Regulations, and effective upon publication in the Federal Register 
on April 19, 2006, temporarily denying the export privileges of 
Loong and Tysonic for 180 days (71 FR 20074, April 19, 2006) (the 
``TDO''). Under the terms of the TDO, Loong was prohibited from 
``directly or indirectly, participat[ing] in any way in any 
transaction involving any [item] exported or to be exported from the 
United States that is subject to the Regulations, or in a[n]y other 
activity subject to the Regulations [ ], including. . . .[c]arrying 
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.'' On or about 
August 29, 2006, Loong, acting through

[[Page 45498]]

Rosen Enterprises, ordered and/or bought 30 inverters, items subject 
to the EAR and designated as EAR99, from a company located in the 
United States for export from the United States. Rosen Enterprises 
is owned and operated by Loong and co-located with Tysonic in 
Singapore. On or about August 29, 2006, the 30 inverters were 
exported from the United States to Singapore. The TDO continued in 
force at the time of the aforementioned actions taken by Loong. In 
engaging in the conduct described herein, Loong committed one 
violation of Section 764.2(k) of the Regulations.

Charging Letter at 1-3.
    In accordance with Sec.  766.3(b)(1) of the Regulations, on 
February 12, 2010, BIS mailed the notice of issuance of the Charging 
Letter to Loong at Loong's last known address in Singapore by 
registered mail. RDO at 2. BIS received a letter from Respondent's 
legal counsel, Mr. V. Esvaran, Esq., of the firm Esvaran & Tan, of 
Singapore, on March 4, 2010, indicating that the firm was acting for 
Loong, who had forwarded the Charging Letter from BIS to Mr. Esvaran 
and his firm. Id. at 2-3. Mr. Esvaran's letter also stated that 
although the Charging Letter was dated February 12, 2010, Loong was 
served with the Charging Letter on February 25, 2010. Id. at 3.
    In March 2010, BIS counsel received an informal request from 
Respondent's counsel that BIS stipulate to an extension until April 15, 
2010 to answer the charges. BIS counsel indicated that BIS would not 
object to Loongs's request if Loong's counsel entered a notice of 
appearance and filed the stipulation. Id. at 3. No notice of appearance 
or stipulation of extension of time to file an answer was ever filed. 
Id. Respondent thus was obligated to answer the Charging Letter by no 
later than March 27, 2010.
    On February 27, 2013, BIS counsel sent a letter by email and 
Federal Express to Respondent's counsel indicating that BIS would file 
a motion for default order if Respondent did not file an answer as 
required by the Regulations by March 13, 2013. Id. Respondent's counsel 
provided a letter response by email to BIS counsel on February 28, 
2013, acknowledging that Respondent ``has to respond in a format and in 
compliance with instructions under the regulations,'' and asserting 
that Respondent would ``revert shortly on the matter.'' Id. However, 
Respondent did not submit an answer by March 13, 2013, or at any time 
thereafter. Id.
    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, in turn, 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 ALJ] shall find the facts to be as 
alleged in the charging letter[.]''
    On April 15, 2013, BIS filed its Motion for Default Order in 
accordance with Section 766.7(a) of the Regulations.\4\ The Motion for 
Default Order recommended that Loong be denied export privileges under 
the Regulations for a period of at least ten years. Id. at 7. In 
addition to the serious nature of Loong's violations, Loong's location 
in Singapore, BIS indicated that a monetary penalty may be difficult to 
collect and may not serve a sufficient deterrent effect.
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    \4\ Although not required to do so by Section 766.7 of the 
Regulations a copy of the Motion for Default Order was served on 
Loong.
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    On June 25, 2013, based on the record before him, the ALJ issued 
the RDO, in which he found Loong in default, found the facts to be as 
alleged in the Charging Letter, and concluded that Loong had committed 
the three violations alleged in the charging letter, specifically, two 
violations of 15 CFR 764.2(b), and one violation of 15 CFR 764.2(k). 
Id. at 7. The RDO contains a detailed review of the facts and 
applicable law relating to both merits and sanctions issues in this 
case.
    Based on the record, the ALJ determined, inter alia, that, between 
February and April 2005, Loong caused two exports of items subject to 
the Regulations from the United States to Iran via transshipment 
through Singapore without the required U.S. Government authorization, 
in violation of Section 764.2(b) of the Regulations. Id. at 7-8. 
Further, the ALJ determined that after a TDO regarding Loong's U.S. 
export privileges was issued, Loong used another company he owned and 
controlled, Rosen Enterprises, to obtain other items subject to the 
Regulations for export from the United States in direct violation of 
the terms of the TDO. Id.
    The ALJ also recommended that the Under Secretary deny Loong's 
export privileges for a period of ten years, citing, inter alia, 
Loong's ``clear disregard for the Regulations and U.S. export control 
law, including the long-standing U.S. trade embargo against Iran and 
the TDO issued against him in April 2006.'' Id. at 8. The ALJ further 
noted that a 10-year denial order was appropriate in this case ``in 
light of the nature of his conduct, his multiple violations and his 
location in Singapore.'' Id.

II. Review Under Section 766.22

    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. BIS submitted a timely response to the RDO pursuant to 
Section 766.22(b); however, [Respondent has not submitted a response to 
the RDO].
    I find that the record supports the ALJ's findings of fact and 
conclusions of law that Respondent never filed an answer, is in 
default, and committed the three violations of the Regulations as 
alleged in the Charging Letter and set forth above.
    I also find that the ten-year denial order recommended by the ALJ 
upon his review of the entire record is appropriate, given, as 
discussed in further detail in the RDO, the nature and number of the 
violations, the facts of this case, and the importance of deterring 
Respondent and others from acting to evade the Regulations and 
otherwise knowingly violate the Regulations.
    Accordingly, based on my review of the entire record, I affirm the 
findings of fact and conclusions of law in the RDO without 
modification.
    Accordingly, it is therefore ordered:
    First, that for a period of ten (10) years from the date this Order 
is published in the Federal Register, Chan Heep Loong (``Loong''), with 
a last known address of 95 Havelock Road, 140583, Singapore, 
160095 SG, and his successors and assigns, and when acting for or on 
its behalf, his employees, representatives, or agents (hereinafter 
collectively referred to as ``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 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

[[Page 45499]]

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 which 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 
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: July 21, 2013.
Eric L. Hirschhorn,
Under Secretary of Commerce for Industry and Security.

CERTIFICATE OF SERVICE

    I hereby certify that on July 22, 2013, I caused the foregoing 
Response of the Bureau of Industry and Security to the Administrative 
Law Judge's Recommended Decision and Order to be sent by Federal 
Express to:
    Chan Heep Loong, 95 Havelock Road, 14-583, 
Singapore, 160095 SG.
    And Hand-delivered to:
    John T. Masterson, Jr., Esq., Joseph Jest, Esq., Peter Klason, 
Esq., Attorneys for the Bureau of Industry and Security, Office of 
Chief Counsel for Industry and Security, U.S. Department of 
Commerce, 14th & Constitution Avenue NW, Room H-3839, Washington, DC 
20230.
,
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Kirsten Mortimer,

Office of the Under Secretary for Industry and Security

United States Department of Commerce Bureau of Industry and Security 
Washington, DC 20230

    10-BIS-0002
    In the Matter of:
Chan Heep Loong, 95 Havelock Road, 14-583, Singapore, 
160095 SG; Respondent.

Order Granting Motion for Default and Recommended Decision and Order

    On February 12, 2010, the Bureau of Industry and Security (BIS), 
U.S. Department of Commerce, issued a charging letter initiating this 
administrative enforcement proceeding against Chan Heep Loong (Loong or 
Respondent).
    The charging letter alleged that Chan Heep Loong, as Owner/Operator 
of Tysonic Enterprises (Tysonic) committed three (3) violations of the 
Export Administration Regulations (Regulations) (See 15 CFR Parts 730-
774 (2008)) \5\. The Regulations were issued under the Export 
Administration Act of 1979, as amended (50 U.S.C. app. 2401-2420 
(2000)) (Act).\6\ In accordance with Section 766.7 of the Regulations, 
BIS moved for the issuance of an Order of Default against Chan Heep 
Loong in connection with Charges 1, 2 and 3 in the charging letter, as 
Chan Heep Loong failed to file an Answer to the allegations contained 
in the charging letter within the time period required by law.
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    \5\ The charges are for violations that are alleged to have 
occurred during 2005 and 2006. The Regulations governing the 
violations at issue are found in the 2005 and 2006 versions of the 
Code of Federal Regulations (15 CFR Parts 730-774 (2005-06)). The 
2013 Regulations establish the procedures that apply to this matter.
    \6\ Since August 21, 2001, the Export Administration 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, 2012 (77 FR 49699 (Aug. 16, 2012)), continues the 
Regulations in effect under the International Emergency Economic 
Powers Act (50 U.S.C. 1701-1706 (2006 and Supp. IV 2010)).
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A. Legal Authority for Issuing an Order of Default

    Section 766.7 of the Regulations states upon Motion by BIS, the 
Court shall enter a judgment of default if a respondent fails to file a 
timely answer to the charging letter. That section, entitled Default, 
provides in pertinent part as follows:

    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' 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 (2008).

    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

    Section 766.3(b)(1) of the Regulations provides notice of the 
issuance of a charging letter shall be served on a respondent by 
mailing a copy by registered or certified mail addressed to the 
respondent at the respondent's last known address. On February 12, 
2010, BIS mailed the notice of issuance of a charging letter by 
registered mail to Chan Heep Loong at his last known address in 
Singapore. See Gov't Ex. 1. Pursuant to Section 766.3(c) of the 
Regulations, the date of service in this case is the date of delivery. 
After mailing the Charging Letter to Chan Heep Loong at his last known 
address, BIS received a letter from Respondent's legal counsel, Mr. V. 
Esvaran, Esq., of the firm of Esvaran & Tan, of Singapore, on March 4, 
2010, indicating the firm was acting for Tysonic Enterprises and

[[Page 45500]]

Respondent Chan Heep Loong who had forwarded the Charging Letter from 
the Agency to Mr. Esvaran and his firm. See Gov't Ex. 3. Mr. Esvaran's 
letter also stated that although the Charges are dated February 12, 
2010 his clients were served with the Charges on February 25, 2010. Id. 
I find that BIS properly served the Charging Letter in accordance with 
15 CFR 766.3(b).
    In March of 2010, BIS counsel received an informal request from 
Respondent's counsel requesting BIS stipulate to an extension until 
April 15, 2010 to answer the charges. Agency counsel indicated BIS 
would not object if Respondent's counsel entered a notice of appearance 
and the necessary stipulation. See Gov't Ex. 4. However, no notice of 
appearance, motion, or stipulation for an extension has been filed. To 
date, Respondent has not filed an answer.
    On February 27, 2013, BIS counsel sent a letter by email (and 
Federal Express) to Respondent's counsel indicating that BIS would file 
a motion for a default order if Respondent did not file an answer as 
required by the regulations with the Docketing Center by March 13, 
2013. See Gov't Ex. 5; 15 CFR 766.5 and 766.6.
    Respondent's counsel provided a letter response by email to BIS on 
February 28, 2013, acknowledging that Respondent ``has to respond in a 
format and in compliance with instructions under the requisite 
regulations,'' and asserting that Respondent would ``revert shortly on 
the matter.'' See Gov't Ex. 6. However, Respondent did not submit an 
answer on March 13, 2013 or at any time thereafter. On April 15, 2013, 
BIS filed a Motion for Default Order.
    Under Section 766.6(a) of the Regulations, a respondent must file 
an answer to the charging letter within 30 days after being served with 
notice of issuance of the charging letter initiating the administrative 
enforcement proceeding. Respondent originally had 30 days from February 
25, 2010, to file an answer to the charging letter. As noted above, on 
February 27, 2013 BIS provided notice to Respondent of another 
opportunity to file an answer by March 13, 2013 and that failure to 
answer would result in submission of a default motion by BIS. To date, 
Respondent has not filed an answer.

C. Summary of Violations Charged

    The charging letter filed by BIS included a total of three charged 
violations. Two violations concerned causing unauthorized exports to 
Iran, via transshipment through Singapore, of items controlled under 
the Regulations on anti-terrorism grounds; and one charge for violating 
an Order issued by the Assistant Secretary of Commerce for Export 
Enforcement on April 12, 2006 temporarily denying export privileges 
(TDO) of Loong and Tysonic for 180 days. (71 FR 20074, April 19, 2006).
    Specifically, Charge 1 alleges from on or about February 14, 2005, 
through on or about February 24, 2005, Loong violated Section 
764.2(b)(Causing, Aiding or Abetting a Violation) of the Regulations by 
causing the export of GPS engines to Iran, via transshipment through 
Singapore, without the required license. Acting through Tysonic 
Enterprises, a Singapore company Loong owned and operated, Loong 
ordered and/or bought the GPS engines, items classified on the Commerce 
Control List under Export Control Classification Number (ECCN) 7A994 
and controlled for anti-terrorism reasons, from a U.S. company without 
informing that company that Iran was the intended final destination of 
the items. 7 Loong instead instructed the U.S. company to ship the 
items from the United States to Tysonic in Singapore, and following 
their arrival in Singapore, the items were forwarded to Iran. Pursuant 
to Section 734.2(b)(6) of the Regulations, the export of an item from 
the United States to a second country, such as Singapore, intended for 
transshipment to a third country, such as Iran, constitutes an export 
to that third country. Charge 1 further alleges that under Section 
746.7 of the Regulations, a license from either BIS or the Treasury 
Department's Office of Foreign Assets Control (OFAC) was required to 
export these items to Iran, and that neither BIS nor OFAC authorized 
these exports to Iran. See Charging Letter; Gov. Ex. 1.
    Charge 2 alleges from on or about April 22, 2005, through on or 
about May 12, 2005, Loong violated Section 764.2(b)(Causing, Aiding or 
Abetting a Violation) of the Regulations by causing the export of a 
peak power meter to Iran, via transshipment through Singapore, without 
the license required under Section 746.7 of the Regulations. Acting 
through Tysonic Enterprises, a Singapore company Loong owned and 
operated, Loong ordered and/or bought the peak power meter, an item 
classified on the Commerce Control List under ECCN 3A992 and controlled 
for anti-terrorism reasons, from a U.S. company without informing that 
company that Iran was the intended final destination of the item. Loong 
instead instructed the U.S. company to ship the item from the United 
States to Tysonic in Singapore, and following their arrival in 
Singapore, the items were forwarded to Iran. Pursuant to Section 
734.2(b)(6) of the Regulations, the export of an item from the United 
States to a second country, such as Singapore, intended for 
transshipment to a third country, such as Iran, constitutes an export 
to that third country. Charge 2 further alleges that under Section 
746.7 of the Regulations, a license from either BIS or OFAC was 
required to export this item to Iran, and that neither BIS nor OFAC 
authorized this export to Iran. See Charging Letter; Gov. Ex. 1.
    Charge 3 alleges from on or about August 29, 2006, Loong, acting 
through Rosen Enterprises, violated Section 764.2(k)(Violation of Terms 
of an Order Temporarily Denying Export Privileges) of the Regulations 
by purchasing 30 inverters, items subject to the EAR and designated as 
EAR99, from a company located in the United States for export from the 
United States. Rosen Enterprises is owned and operated by Loong and co-
located with Tysonic Enterprises in Singapore. On or about August 29, 
2006, the 30 inverters were exported from the United States to 
Singapore. The TDO continued in force at the time of these export 
actions taken by Respondent Loong. In engaging in these actions Loong 
committed one violation of Section 764.2(k) of the Regulations.

D. Penalty Recommendation

    Pursuant to the default procedures set forth in Sec.  766.7 of the 
Regulations, I find the allegations contained in the charging letter to 
be fact; and hereby determine that those facts establish Chan Heep 
Loong committed two violations of Sec.  764.2(b) of the Regulations and 
one violation of Section 764.2(k) of the Regulations.
    Section 764.3 of the Regulations establishes the sanctions BIS may 
seek for the violations charged in this proceeding. Sanctions 
potentially sought in this case include a civil monetary penalty, 
suspension from practice before the Department of Commerce, and a 
denial of export privileges under the Regulations. See 15 CFR 764.3.
    BIS requests I recommend to the Under Secretary of Commerce for 
Industry and Security that Chan Heep Loong's export privileges under 
the Regulations be denied for ten (10) years.\8\ BIS believes that 
imposition of a civil penalty in this case would be ineffective and 
argues that a denial is justified because of the nature of Chan

[[Page 45501]]

Heep Loong's multiple violations and his demonstrated disregard for 
U.S. export control laws including the long-standing U.S. trade embargo 
against Iran and a TDO issued against him by BIS. Specifically, between 
February and April 2005, Loong caused two exports of items subject to 
the Regulations from the United States to Iran \9\ via transshipment 
through Singapore without the required U.S. Government authorization, 
in violation of Section 764.2(b) of the Regulations, 15 CFR 764.2(b). 
See Charging Letter, Gov't Ex. 1, at Charges 1-2. Loong failed to 
inform the U.S. exporters that the intended final destination of the 
items was Iran, and instead instructed the exporters to ship the items 
from the United States to Tysonic in Singapore. Following the arrival 
of these items in Singapore, the items were forwarded on to Iran. These 
actions by Loong constitute two violations of Section 764.2(b) of the 
Regulations. Id.
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    \8\ Pursuant to Section 13(c)(1) of the Act and Sec.  
766.17(b)(2) of the Regulations, in export control enforcement 
cases, the Administrative Law Judge issues a recommended decision 
and order which is reviewed by the Under Secretary, who issues the 
final agency decision in the case.
    \9\ Pursuant to 15 CFR 734.2(b)(6) the export of items from the 
United States to a second country, intended for transshipment to a 
third country is deemed to be an export to the third country.
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    BIS further notes Loong's actions in August 2006 were a clear 
violation of the TDO BIS issued against him (and Tysonic) on April 12, 
2006.
    Further, BIS asserts that a denial is justified in this case 
because Loong remains in Singapore, therefore a monetary penalty may be 
difficult to collect and would not serve a sufficient deterrent effect. 
In light of these circumstances, BIS requests the Court to recommend 
denial of Loong's export privileges for ten years as an appropriate 
sanction.
    I agree that the facts set forth in the Charging Letter show that 
Loong engaged in conduct that demonstrated a clear disregard for the 
Regulations and U.S. export control laws, including the long-standing 
U.S. trade embargo against Iran and the TDO issued against him in April 
2006. In addition, the facts show that to facilitate the purchase and 
unlawful export of the items at issue in Charges 1 and 2, Loong failed 
to inform the U.S. exporters that Iran, not Singapore, was the intended 
final destination for the anti-terrorism controlled items at issue. 
Likewise, after the TDO regarding Loong and Tysonic's U.S. export 
privileges was issued, Loong used another company he owned and 
controlled, Rosen Enterprises, to obtain other items subject to the 
Regulations for export from the United States in direct violation of 
the terms of the TDO.
    I agree that Loong's unlawful conduct calls for a significant 
sanction and recommend as an appropriate sanction the denial of Loong's 
export privileges for a period of ten (10) years, in light of the 
nature of his conduct, his multiple violations, and his location in 
Singapore. The imposition of a 10-year denial order as a sanction is 
also consistent with BIS precedent. See e.g. In the Matter of: Teepad 
Electronic General Trading, 71 FR 34596 (June 15, 2006) Ten (10) year 
denial order imposed against a defaulting respondent located in the 
United Arab Emirates (UAE) for conspiring to export anti-terrorism 
controlled telecommunications devices without the required licenses to 
Iran, via transshipment through UAE, aiding and abetting the unlicensed 
export of such items to Iran on two occasions, and committing knowledge 
violations in connection with those two exports. See also In the Matter 
of: Aqua-Loop Cooling Towers, Co., 75 FR 16732 (Apr. 2, 2010). In view 
of the above facts and analysis I find Respondent's misconduct 
exhibited a disregard for the Regulations and U.S. export controls, and 
that a monetary penalty is not likely to be an effective deterrent in 
this case. Given the foregoing, and consistent with BIS precedent, I 
recommend, pursuant to Section 766.7(a), that the Under Secretary of 
Commerce for Industry and Security enter an Order denying Chan Heep 
Loong's export privileges for a period of ten (10) years.
    Using provisions from the Standard Terms of Orders Denying Export 
Privileges set forth in Supplement No. 1 to Part 764 of the Regulations 
(Supp. No. 1 to 15 CFR Part 764), I recommend that the Under Secretary 
issue a Denial Order against Chan Heep Loong as follows:

[REDACTED SECTION]

[REDACTED SECTION]

[REDACTED SECTION]

[REDACTED SECTION]

    Within thirty (30) days after receipt of this Recommended Decision 
and Order, the Under Secretary shall issue a written order affirming, 
modifying, or vacating this Recommended Decision and Order. See 15 CFR 
766.22(c). A copy of the Agency Regulations for Review by the Under 
Secretary can be found as Attachment A.
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Hon Michael J. Devine,

Administrative Law Judge United States Coast Guard
Done and dated this 25th day of June, 2013, Baltimore, Maryland

ATTACHMENT A

NOTICE TO THE PARTIES REGARDING REVIEW BY UNDER SECRETARY
TITLE 15--COMMERCE AND FOREIGN TRADE SUBTITLE B--REGULATIONS RELATING 
TO COMMERCE AND FOREIGN TRADE
CHAPTER VII--BUREAU OF INDUSTRY AND SECURITY, DEPARTMENT OF COMMERCE
SUBCHAPTER C--EXPORT ADMINISTRATION REGULATIONS
PART 766--ADMINISTRATIVE ENFORCEMENT PROCEEDINGS
15 CFR 766.22

Sec.  766.22 Review by Under Secretary.

    (a) Recommended decision. For proceedings not involving violations 
relating to part 760 of the EAR, the administrative law judge shall 
immediately refer the recommended decision and order to the Under 
Secretary. Because of the time limits provided under the EAA for review 
by the Under Secretary, service of the recommended decision and order 
on the parties, all papers filed by the parties in response, and the 
final decision of the Under Secretary must be by personal delivery, 
facsimile, express mail or other overnight carrier. If the Under 
Secretary cannot act on a recommended decision and order for any 
reason, the Under Secretary will designate another Department of 
Commerce official to receive and act on the recommendation.
    (b) Submissions by parties. Parties shall have 12 days from the 
date of issuance of the 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.
    (c) Final decision. Within 30 days after receipt of the recommended 
decision and order, the Under Secretary shall issue a written order 
affirming, modifying or vacating the recommended decision and order of 
the administrative law judge. If he/she vacates the recommended 
decision and order, the Under Secretary may refer the case back to the 
administrative law judge for further proceedings. Because of the time 
limits, the Under Secretary's review will ordinarily be limited to the 
written record for decision, including the transcript of any hearing, 
and any submissions by the parties concerning the recommended decision.

[[Page 45502]]

    (d) Delivery. The final decision and implementing order shall be 
served on the parties and will be publicly available in accordance with 
Sec.  766.20 of this part.
    [61 FR 12907, Mar. 25, 1996, as amended at 75 FR 33683, June 15, 
2010]

CERTIFICATE OF SERVICE

    I hereby certify that I have served the foregoing RECOMMENDED 
DECISION AND ORDER as indicated below:

Mr. Eric H. Hirschhorn,
Under Secretary for Industry and Security, Bureau of Industry and 
Security, U.S. Department of Commerce, Room H-3838, 14th Street & 
Constitution Avenue, N.W., Washington, DC 20230, Phone: (202) 482-1460
Sent by Federal Express courier
Chan Heep Loong,
95 Havelock Road, #14-583, Singapore, 160095 SG
Sent by Federal Express courier
Hearing Docket Clerk,
United States Coast Guard, ALJ Dockering Center, 40 S. Gay Street, Room 
414, Baltimore, MD 21202, Telephone: (410) 962-51`00, Fax: (410) 962-
1746
Sent by Hand Delivery
Peter Klason, Esq.,
Attorney-Advisor, Office of Chief Counsel for Ind. & Security, U.S. 
Dept. of Commerce, Room H-3839, 14th Street & Constitution Avenue, NW., 
Washington, DC 20230, Phone: (202) 482-5301, Fax: (202) 482-0085
Sent by Facsimile
-----------------------------------------------------------------------
Jenny L. Collins,

Paralegal Specialist for the Administrative Law Judge
    Done and dated this 25th day of June, 2013 Baltimore, Maryland.

[FR Doc. 2013-18078 Filed 7-26-13; 8:45 am]
BILLING CODE P