[Federal Register Volume 84, Number 220 (Thursday, November 14, 2019)]
[Notices]
[Pages 61870-61872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24742]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Case No. 18-BIS-0002]


In the Matter of: Ali Caby, a/k/a ``Alex'' Caby, Blvd. James 
Boucher 91, Apt. 13, Floor 4, Lozenets, Sofia, Bulgaria 1407, et al., 
Respondents; Order Relating to Ali Caby, a/k/a ``Alex'' Caby

    The Bureau of Industry and Security, U.S. Department of Commerce 
(``BIS''), has notified Ali Caby, a/k/a ``Alex'' Caby, of Sofia, 
Bulgaria, that it has initiated an administrative proceeding against 
him pursuant to Section 766.3 of the Export Administration Regulations 
(the ``Regulations''),\1\ through the issuance of a Charging Letter 
alleging that Ali Caby, Arash Caby, Marjan Caby, AW-Tronics LLC, (``AW-
Tronics'') and Arrowtronic, LLC (``Arrowtronic'') (collectively, 
``Respondents'') violated the Regulations as follows:
---------------------------------------------------------------------------

    \1\ The Regulations originally issued under the Export 
Administration Act of 1979, as amended, 50 U.S.C. 4601-4623 (Supp. 
III 2015) (``the 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 was extended by successive 
Presidential Notices, 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, 50 U.S.C. 4801-4852 (``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until modified, superseded, set aside, or revoked through action 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. The 
Regulations are currently codified in the Code of Federal 
Regulations at 15 CFR parts 730-774 (2018). The charged violation 
occurred in 2013-2014. The Regulations governing the violation at 
issue are found in the 2013-2014 versions of the Code of Federal 
Regulations (15 CFR parts 730-774 (2013-2014)). The 2019 Regulations 
set forth the procedures that apply to this matter.

Charge 1 15 CFR 764.2(d)--Conspiracy

    Beginning as early as in or about September 2013, and continuing 
through in or about March 2014, Respondents conspired and acted in 
concert with others, known and unknown, to bring about one or more 
acts that constitute a violation of the Regulations. The purpose and 
object of the conspiracy was to unlawfully export goods from the 
United States through transshipment points to Syria, including to 
Syrian Arab Airlines (``Syrian Air''), the flag carrier airline of 
Syria and a Specially Designated Global Terrorist (``SDGT''), and in 
doing so evade the prohibitions and licensing requirements of the 
Regulations and avoid detection by U.S. law enforcement.

[[Page 61871]]

    Pursuant to Section 746.9 of the Regulations, a license is 
required for the export or reexport to Syria of all items subject to 
the Regulations, except food and medicine classified as EAR99. 
Furthermore, pursuant to Section 744.12 of the Regulations, a 
license is required to export or reexport items subject to the 
Regulations to SDGTs. Syrian Air was designated as an SDGT on May 
16, 2013 (see 78 FR 32304, May 29, 2013), under authority granted to 
the Department of the Treasury by Executive Order 13,224, and was at 
all times pertinent hereto (and remains) listed as an SDGT.
    At all pertinent times, AW-Tronics and Arrowtronic were active 
limited liability companies incorporated in the State of Florida. 
Documentary evidence and email correspondence shows that AW-Tronics 
personnel represented to various transaction parties that AW-Tronics 
and Arrowtronic (collectively, ``AW-Tronics/Arrowtronic'') were the 
same company. Arash Caby was listed on Florida corporate records as 
a Managing Member of AW-Tronics at the time of the violations. From 
January 2014 until its most recent annual report in January 2017, 
Ali Caby was listed on Florida corporate records as the registered 
agent of AW-Tronics. AW-Tronics/Arrowtronic has maintained offices 
in Miami, Florida and Sofia, Bulgaria, as well as other locations.
    As part of the conspiracy, the co-conspirators used electronic 
mail (email) and other forms of communication to communicate with 
each other between the United States, Bulgaria, United Arab Emirates 
(UAE), and Syria. Under their scheme, co-conspirators would purchase 
from U.S. suppliers or vendors items subject to the Regulations for 
export to Syrian Air in Syria, including aircraft parts and 
equipment, and would provide materially false or misleading 
documents and information to conceal the illegal exports. In 
furtherance of the conspiracy, they also would arrange for payment 
for the illegal exports to be made using third-party companies to 
transfer payments between the co-conspirators. Overall, between in 
or about September 2013 and in or about March 2014, Respondents 
engaged in multiple transactions with Syrian Air involving the 
export of aircraft parts and equipment subject to the Regulations 
from the Miami office of AW-Tronics/Arrowtronic to Syrian Air's 
transshipment point in Dubai, United Arab Emirates. These items were 
actually intended for, and some or all were ultimately delivered to, 
Syrian Air in Syria.
    During the conspiracy, Ali Caby managed the Bulgaria office of 
AW-Tronics/Arrowtronic, while Arash Caby managed its Miami office, 
and Marjan Caby was its internal auditor. In furtherance of the 
conspiracy, each of these respondents exchanged numerous emails with 
other AW-Tronics/Arrowtronic employees authorizing or otherwise 
discussing the above-described exports to Syrian Air. These email 
communications included, for example, instructions that were 
designed to prevent U.S. law enforcement from detecting the unlawful 
exports to Syria and to allow them to continue by changing the 
routing of exports from AW-Tronics/Arrowtronic's Miami, Florida 
office. In March 2014, United States Customs and Border Protection 
seized a shipment of micro switches that, according to Electronic 
Export Information (EEI) filed in the Automated Export System, was 
destined for Syrian Air in the UAE, when, in fact, the ultimate 
destination was Syria. On March 5, 2014, Marjan Caby sent an email 
to AW-Tronics/Arrowtronic logistics employees, copying Alex Caby, 
that explained, ``We will . . . have packages stopped by the US 
Customs and Border Control [and] have a case file like this for the 
same client[,]'' and provided instructions stating, ``NOTHING WILL 
BE SHIPPED TO CLIENTS IN THE MIDDLE EAST FROM THE USA OFFICE. WE 
HAVE TO SEND TO BG [Bulgaria] THEN TO CLIENT.'' (Emphasis in 
original). ``SYRIA'' was specifically listed as one country for 
which Respondents would use Bulgaria as a transshipment point. 
(Same).
    In so doing, Ali Caby, a/k/a Alex Caby, Arash Caby, a/k/a 
``Axel'' Caby, Marjan Caby, AW-Tronics, LLC, and Arrowtronic, LLC 
violated Section 764.2(d) of the Regulations, for which they are 
jointly and severally liable.

    Whereas, BIS and Ali Caby have entered into a Settlement Agreement 
pursuant to Section 766.18(b) of the Regulations, whereby they agreed 
to settle this matter in accordance with the terms and conditions set 
forth therein;
    Whereas, I have taken into consideration the plea agreement entered 
into by Ali Caby with the U.S. Attorney's Office for the Southern 
District of Florida, and the sentence imposed against him following or 
upon the entry of his guilty plea and conviction (``the plea agreement 
and sentence''); and
    Whereas, I have approved of the terms of the Settlement Agreement;
    It is therefore ordered:
    First, for the period of six (6) years from the date of this Order 
Ali Caby, a/k/a ``Alex'' Caby, with a last known address of Blvd. James 
Boucher 91, Apt. 13, Floor 4, Lozenets, Sofia, Bulgaria 1407, and when 
acting for or on his behalf, his successors, assigns, representatives, 
agents, or employees (hereinafter collectively referred to as 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 to 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 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, any licenses issued under the Regulations in which Ali Caby 
has an interest as of the date of this Order shall be revoked by BIS.
    Fourth, 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.

[[Page 61872]]

    Fifth, the six-year denial period set forth above shall be active 
for a period of four years from the date of this Order. As authorized 
by Section 766.18(c) of the Regulations, the remaining two years of the 
denial period shall be suspended during a probationary period of two 
years under this Order, and shall thereafter be waived, provided that 
Ali Caby has committed no other violation of the Export Control Reform 
Act of 2018 (``ECRA''),\2\ or the Regulations or any order, license or 
authorization issued under ECRA or the Regulations. If Ali Caby commits 
another violation of ECRA or the Regulations or any order, license or 
authorization issued under ECRA or the Regulations during the six-year 
denial period under this Order, the two-year suspended portion of this 
Order may be modified or revoked by BIS. If the suspension is modified 
or revoked, BIS may extend the active denial period until up to six 
years from the date of this Order when the activation occurs during the 
first four years from the date of this Order. BIS may extend the active 
denial period until up to two years from the date of the activation 
when the activation occurs more than four years from the date of this 
Order.
---------------------------------------------------------------------------

    \2\ See note 1, supra.
---------------------------------------------------------------------------

    Sixth, Ali Caby shall not take any action or make or permit to be 
made any public statement, directly or indirectly, denying the 
allegations in the Charging Letter or this Order.
    Seventh, the Charging Letter, the Settlement Agreement, and this 
Order shall be made available to the public.
    Eighth, this Order shall be served on Ali Caby and shall be 
published in the Federal Register.
    This Order, which constitutes the final agency action in this 
matter related to Ali Caby, is effective immediately.

Douglas R. Hassebrock,
Director, Office of Export Enforcement, performing the non-exclusive 
functions and duties of the Assistant Secretary of Commerce for Export 
Enforcement.
[FR Doc. 2019-24742 Filed 11-13-19; 8:45 am]
 BILLING CODE P