[Federal Register Volume 84, Number 62 (Monday, April 1, 2019)]
[Notices]
[Pages 12196-12197]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-06186]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


In the Matter of: Arnoldo Antonio Arredondo, Inmate Number: 
23611-479, FCI Beaumont Medium, Federal Correctional Institution, P.O. 
Box 26040, Beaumont, TX 77720; Order Denying Export Privileges

    On November 28, 2017, in the U.S. District Court for the Southern 
District of Texas, Arnoldo Antonio Arredondo (``Arredondo'') was 
convicted of violating Section 38 of the Arms Export Control Act (22 
U.S.C. 2778 (2012)) (``AECA''). Arredondo was convicted of violating 
Section 38 of the AECA by conspiring and agreeing with others to 
knowingly and willfully export and cause to be exported, from the 
United States to Mexico, .223 caliber rifles, which were designated as 
defense articles on the United States Munitions List, without the 
required U.S. Department of State licenses. Arredondo was sentenced to 
46 months in prison, three years of supervised release, and an 
assessment of $100.
    The Export Administration Regulations (``EAR'' or ``Regulations'') 
are administered and enforced by the U.S. Department of Commerce's 
Bureau of Industry and Security (``BIS'').\1\ Section 766.25 of the 
Regulations provides, in pertinent part, that the ``Director of [BIS's] 
Office of Exporter Services, in consultation with the Director of 
[BIS's] Office of Export Enforcement, may deny the export privileges of 
any person who has been convicted of a violation of . . . section 38 of 
the Arms Export Control Act (22 U.S.C. 2778).'' 15 CFR 766.25(a). The 
denial of export privileges under this provision may be for a period of 
up to 10 years from the date of the conviction. 15 CFR 766.25(d).\2\ In 
addition, pursuant to Section 750.8 of the Regulations, BIS's Office of 
Exporter Services may revoke any BIS-issued licenses in which the 
person had an interest at the time of his/her conviction.\3\
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    \1\ The Regulations are currently codified in the Code of 
Federal Regulations at 15 CFR parts 730-774 (2018). The Regulations 
originally issued under the Export Administration Act of 1979, as 
amended, 50 U.S.C. 4601-4623 (Supp. III 2015) (``EAA''), which 
lapsed on August 21, 2001. 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 8, 2018 (83 FR 39,871 (Aug. 13, 2018)), 
continued the Regulations in full force and effect under the 
International Emergency Economic Powers Act, 50 U.S.C. 1701, et seq. 
(2012) (``IEEPA''). On August 13, 2018, the President signed into 
law the John S. McCain National Defense Authorization Act for Fiscal 
Year 2019, which includes the Export Control Reform Act of 2018, 
Title XVII, Subtitle B of Public Law 115-232, 132 Stat. 2208 
(``ECRA''). While Section 1766 of ECRA repeals the provisions of the 
EAA (except for three sections which are inapplicable here), Section 
1768 of ECRA provides, in pertinent part, that all rules and 
regulations that were made or issued under the EAA, including as 
continued in effect pursuant to IEEPA, and were in effect as of 
ECRA's date of enactment (August 13, 2018), shall continue in effect 
according to their terms until modified, superseded, set aside, or 
revoked through action undertaken pursuant to the authority provided 
under ECRA.
    \2\ See also Section 11(h) of the EAA, 50 U.S.C. 4610(h) (Supp. 
III 2015); Sections 1760(e) and 1768 of ECRA, Title XVII, Subtitle B 
of Public Law 115-232, 132 Stat. 2208, 2225 and 2233 (Aug. 13, 
2018); and note 1, supra.
    \3\ See notes 1 and 2, supra.
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    BIS has received notice of Arredondo's conviction for violating 
Section 38 of the AECA, and has provided notice and an opportunity for 
Arredondo to make a written submission to BIS, as provided in Section 
766.25 of the Regulations. BIS has not received a submission from 
Arredondo.
    Based upon my review and consultations with BIS's Office of Export 
Enforcement, including its

[[Page 12197]]

Director, and the facts available to BIS, I have decided to deny 
Arredondo's export privileges under the Regulations for a period of 10 
years from the date of Arredondo's conviction. I have also decided to 
revoke all BIS-issued licenses in which Arredondo had an interest at 
the time of his conviction.
    Accordingly, it is hereby ordered:
    First, from the date of this Order until November 28, 2027, Arnoldo 
Antonio Arredondo, with a last known address of Inmate Number: 23611-
479, FCI Beaumont Medium, Federal Correctional Institution, P.O. Box 
26040, Beaumont, TX 77720, and when acting for or on his behalf, his 
successors, assigns, employees, agents or representatives (``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, 
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 engaging 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 from any other activity subject to the Regulations.
    Second, 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, after notice and opportunity for comment as provided in 
Section 766.23 of the Regulations, any other person, firm, corporation, 
or business organization related to Arredondo by ownership, control, 
position of responsibility, affiliation, or other connection in the 
conduct of trade or business may also be made subject to the provisions 
of this Order in order to prevent evasion of this Order.
    Fourth, in accordance with Part 756 of the Regulations, Arredondo 
may file an appeal of this Order with the Under Secretary of Commerce 
for Industry and Security. The appeal must be filed within 45 days from 
the date of this Order and must comply with the provisions of Part 756 
of the Regulations.
    Fifth, a copy of this Order shall be delivered to Arredondo and 
shall be published in the Federal Register.
    Sixth, this Order is effective immediately and shall remain in 
effect until November 28, 2027.

    Issued this 25th day of March, 2019.
Karen H. Nies-Vogel,
Director, Office of Exporter Services.
[FR Doc. 2019-06186 Filed 3-29-19; 8:45 am]
BILLING CODE P