[Federal Register Volume 85, Number 16 (Friday, January 24, 2020)]
[Notices]
[Pages 4271-4276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-01118]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
Order Temporarily Denying Export Privileges
Muhammad Kamran Wali, 1st Floor, Jahanzeb Center, Bank Road, Saddar,
Rawalpindi, Pakistan
Muhammad Ahsan Wali, 4453 Weeping Willow Drive, Mississauga,
Ontario, Canada
Haji Wali Muhammad Sheikh, 4453 Weeping Willow Drive, Mississauga,
Ontario, Canada
Ahmed Waheed, 143 Wards Road, Ilford, Essex, United Kingdom
Ashraf Khan Muhammad, M/F 20 Pei Ho Street, Sham Shui Po, Kowloon,
Hong Kong
Business World, 1st Floor, Jahanzeb Center, Bank Road, Saddar,
Rawalpindi, Pakistan
Buziness World, 4453 Weeping Willow Drive, Mississauga, Ontario,
Canada
Business World, 2nd Floor, Kau On Building, 251-253 Cheung Shaw Wan
Road, Kowloon, Hong Kong
Industria Hong Kong Ltd, d/b/a Transcool Auto Air Conditioning
Products, d/b/a Electro-Power Solutions, 2nd Floor, Kau On Building,
251-253 Cheung Shaw Wan Road, Kowloon, Hong Kong
Product Engineering, Unit 10, Chowk Gowalmandi, Daryabad,
Gowalmandi, Rawalpindi, Punjab, Pakistan
I. Introduction and Background on the Parties
Pursuant to Section 766.24 of the Export Administration Regulations
(the ``Regulations'' or ``EAR''),\1\ the Bureau of Industry and
Security (``BIS''), U.S. Department of Commerce, through its Office of
Export Enforcement (``OEE''), has requested that I issue an order
temporarily denying, for a period of 180 days, the export privileges of
Muhammad Kamran Wali, Muhammad Ahsan Wali, Haji Wali Muhammad Sheikh,
Ahmed Waheed, Ashraf Khan Muhammad, Business World (of Pakistan),
Buziness World (of Canada), Business World (of Hong Kong), and
Industria Hong Kong Ltd, d/b/a Transcool Auto Air Conditioning
Products, d/b/a Electro-Power Solutions (collectively, ``Respondents''
and when only referring to natural persons ``individual Respondents'').
OEE also has requested, pursuant to Sections 766.23 and 766.24 of the
Regulations, that this order (``the TDO'') be applied to Product
Engineering as a related person.
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\1\ The Regulations, currently codified at 15 CFR parts 730-774
(2019), originally issued pursuant to the Export Administration Act
(50 U.S.C. 4601-4623 (Supp. III 2015) (``EAA''), which lapsed on
August 21, 2001. The President, through Executive Order 13222 of
August 17, 2001 (3 CFR 2001 Comp. 783 (2002)), as extended by
successive Presidential Notices, continued the Regulations in 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 orders, rules, regulations, and other forms
of administrative action 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. Moreover, Section 1761(a)(5)
of ECRA authorizes the issuance of temporary denial orders.
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OEE has presented evidence that the Respondents have been operating
an international procurement scheme to illegally obtain U.S.-origin
items on behalf of two entities involved in nuclear and missile
proliferation activities, the Pakistan Atomic Energy Commission
(``PAEC'') and Pakistan's Advanced Engineering Research Organization
(``AERO''), without the required BIS licenses. The PAEC and AERO have
been on BIS's Entity List since November 1998, and September 2014,
respectively, and a license is required for all items subject to the
EAR for export, reexport or in-country transfer to the PAEC or AERO.\2\
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\2\ The PAEC was originally added to the BIS Entity List, along
with a number of other Pakistani government (and parastatal and
private) entities involved in nuclear or missile activities, on
November 19, 1998, shortly after Pakistan detonated a nuclear
device. 63 FR 64322. Its current listing has remained unchanged
since September 18, 2014. 15 CFR part 744, Supplement No. 4. All
items subject to the EAR require a BIS license for export, reexport
or in-country transfer to the PAEC. Id. AERO was originally added to
the entity list on September 18, 2014. 79 FR 56003 (Sept. 18, 2014)
(listing AERO on the Entity List for involvement in the procurement
of sensitive U.S. technology in support of Pakistan's development of
its missile and strategic unmanned aerial vehicle (UAV) programs).
The listing was most recently revised on January 26, 2018. 83 FR
3580 (adding an alias and two additional addresses to the entry for
AERO). 15 CFR part 744, Supplement No. 4. All items subject to the
EAR require a BIS license for export, reexport or in-country
transfer to AERO, and licenses are subject to a presumption of
denial. Id., see also 15 CFR 744.11.
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Beginning in or around at least September 2014, the individual
Respondents involved in the procurement scheme have used entities that
they own, operate or control to undertake efforts to obtain U.S.-origin
items, either directly or through transshipment via third countries,
while masking that the items were intended for the PAEC and later for
AERO. OEE's evidence indicates that members of the scheme concealed the
fact that the PAEC and AERO were the true end users, including at times
falsely identifying other entities in Pakistan as the end users,
thereby causing unlicensed exports and the filing of false or
misleading Electronic Export Information (``EEI'') in the Automated
Export System (``AES''). In addition, these individual Respondents have
regularly used the names of other companies or intermediaries on
shipping documents, or had such entities pay for the U.S.-origin items
through a third country, to further conceal the identity of the true
end users from U.S. manufacturers and suppliers and U.S. law
enforcement authorities. No BIS licenses were sought or obtained for
any of the exports identified by OEE and described below.
Respondent Haji Wali Muhammad Sheikh, his sons Muhammad Kamran Wali
and Muhammad Ahsan Wali, and business associates Ashraf Khan Muhammad
and Ahmed Waheed, have each been charged with conspiracy to violate the
International Emergency Economic Powers Act and conspiracy to violate
the Export Control Reform Act of 2018 in an indictment returned in the
U.S. District Court for the District of New Hampshire, which is being
unsealed in conjunction with the issuance of this TDO. The Respondent-
Defendants in that criminal case remain at large. Additionally, OEE's
ongoing investigation of the Respondents shows that they continue to
seek similar U.S.-origin items as recently as September 2019,
underscoring OEE's concern that absent the issuance of a TDO,
Respondents will continue to divert items to prohibited end users such
as the PAEC and AERO. A review of EEI
[[Page 4272]]
indicates that members of the scheme have obtained U.S.-origin items as
recently as November 2019.
Named Individual Respondents and Related Entities
Set out below is an overview of the individual Respondents involved
in the procurement scheme, their personal and business relationships
with each other, and the entities and email accounts that they
controlled and used in their efforts to unlawfully obtain U.S.-origin
items for the PAEC and AERO.
Muhammad Kamran Wali (``Kamran'') is believed to be a citizen and
resident of Pakistan. He is the owner of Business World, located in
Rawalpindi, Pakistan (``Business World Pakistan''), which is believed
to be related to or have business affiliations with Product
Engineering. Kamran is the son of Respondent Haji Wali Muhammad Sheikh
and the brother of Respondent Muhammad Ahsan Wali, discussed below.
Typically, Kamran or Business World Pakistan received the underlying
tender inquiry or other order from the PAEC or AERO. Kamran is believed
to control and use the email addresses [email protected] and
[email protected], through which he communicates with both U.S.
companies and procurement offices of the PAEC and AERO.
Muhammad Ahsan Wali (``Ahsan'') is believed to be a citizen and
resident of Mississauga, Ontario, Canada. He is also believed to be a
citizen of Pakistan. He is the son of Haji Wali Muhammad Sheikh and the
brother of Respondent Kamran. Ahsan and his father Haji Wali Muhammad
Sheikh are believed to control and use the email address
[email protected]. Ahsan assisted in paying for exports from the
United States and at least in one instance used a credit card in his
name to pay for an order of U.S.-origin items.
Haji Wali Muhammad Sheikh (``Haji'') is a resident of Canada and a
citizen of Pakistan. Haji is the owner of the Buziness World, located
in Canada (``Buziness World Canada''). Respondents Kamran and Ahsan are
his sons. Haji and his son Ahsan are believed to control and use the
email address [email protected]. Buziness World Canada often appears
as the payee in transactions and is at times listed as the shipper from
the United States, even if it is not otherwise involved in the export.
Ashraf Khan Muhammad (``Khan'') is a resident of Hong Kong. His
nationality is not known. He identifies himself as the owner of
Business World, located in Hong Kong (``Business World Hong Kong''),
and the corporate secretary of Industria Hong Kong Limited (``Industria
Hong Kong''). Another company called Transcool Auto Air Conditioning
Products of Hong Kong identifies as a branch of Business World Hong
Kong. Khan is believed to control and use several email addresses,
including [email protected] and [email protected]. He
is a business associate of Kamran discussed above and Ahmed Waheed of
Ilford, UK.
Ahmed Waheed (``Waheed'') is a resident of Ilford, England. He is a
United Kingdom citizen. He was the owner of Business International GB
Ltd of the United Kingdom, which is now dissolved. He is also the owner
of Industria Hong Kong. Waheed is believed to control the email address
[email protected]. He is a business associate of Khan of Hong
Kong, who also has interests in Industria Hong Kong.
II. Legal Standard
Pursuant to Section 766.24 of the Regulations, BIS may issue, on an
ex parte basis, 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(a)-(b). ``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 charge ``is significant, deliberate, covert and/or
likely to occur again, rather than technical or negligent[.]'' Id. A
``[l]ack 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.
Pursuant to Sections 766.23 and 766.24, a TDO also may be made
applicable to other persons if BIS has reason to believe that they are
related to a respondent and that applying the order to them is
necessary to prevent its evasion. 15 CFR 766.23(a)-(b) and 766.24(c). A
``related person'' is a person, either at the time of the TDO's
issuance or thereafter, who is related to a respondent ``by ownership,
control, position of responsibility, affiliation, or other connection
in the conduct of trade or business.'' 15 CFR 766.23(a).
III. Respondents Are Engaged in a Longstanding Conspiracy To Procure
U.S.-Origin Items for the PAEC and AERO
OEE has presented evidence to show that the individual Respondents
identified above used a series of entities to surreptitiously obtain
U.S.-origin items on behalf of prohibited parties the PAEC and AERO
without the required export licenses. As uncovered in this
investigation, Kamran or Business World Pakistan received purchase
orders or tender inquiries from the PAEC and AERO, and he or Business
World Pakistan would either seek to obtain these items from U.S.
suppliers, or engage other members of the procurement scheme to obtain
the items either directly or through intermediary entities. The
Respondents used a series of aliases and alternative shipping addresses
to avoid detection by law enforcement and having the shipment flagged
or questioned by the freight forwarder's export compliance program. The
investigation uncovered a number of shipments using a similar pattern,
though using slightly different entities or routes so as to escape
suspicion and detection. The examples, as outlined in detail below,
establish reasonable cause to believe that, despite the indictment, the
Respondents will continue to operate this well-established and durable
international procurement network for the PAEC and AERO absent action
by this order.
A. Recent Transactions
Through its investigation, OEE has developed reasonable cause to
believe that the Respondents and other members of the procurement
network continue to obtain U.S.-origin items from U.S. companies in
violation of U.S. law. Further, because the procurement channels change
to avoid detection, a PAEC or AERO order may take several months for
the procurement network to fulfill from a given U.S. company and even
longer to ultimately reach the prohibited end users. Accordingly, the
issuance of this TDO is necessary to stop transactions-in-progress and
prevent U.S.-origin items from reaching prohibited end users. Moreover,
the scheme is ongoing as OEE's investigation has uncovered that the
Respondents continued to obtain items in 2018 as detailed below and
have initiated the process to obtain additional U.S.-origin items in
late 2019.
1. Company A Transaction
Company A is a manufacturer located in the United States. OEE's
investigation indicates that from in or around January
[[Page 4273]]
2018 through in or around July 2018, Kamran of Business World Pakistan
ordered U.S.-origin items for the PAEC's Heavy Mechanical Complex-3
(``HMC-3''). The evidence also establishes that Kamran continues to
solicit U.S.-origin items for the same customer. Kamran made false
statements in a purchase order, claiming that the items were intended
for end use by MRI fielded rooms in various hospitals in Pakistan
through a manufacturer named ``Precision Engineering Services'' in
Islamabad, Pakistan. In fact, evidence indicates that the items were
actually intended for end use by the PAEC.
Specifically, email correspondence dated February 7, 2018, reflects
that Business World Pakistan (through email address
[email protected]) had received a tender order from HMC-3, which,
according to the PAEC's website, is actually the PAEC's ``in house
design, manufacturing, inspection, testing facilities.'' The tender
order requested several items specifically manufactured by Company A.
These were the same items that Business World Pakistan had sought in
its purchase order to Company A on or about January 8, 2018, and had
represented were for a hospital rather than a PAEC facility.
On or about April 19, 2018, Kamran of Business World Pakistan
placed an order with Company A for the same items in the HMC-3 request.
On or about April 20, 2018, Kamran of Business World Pakistan forwarded
to Haji in Canada copies of the Company A's pro forma invoices and
payment instructions.
About a week later, Haji in Canada made a wire transfer payment to
Company A in the United States for $26,266 for the order with the HMC-3
items. The funds came from Buziness World Canada's account connected
with Haji. When asked by Company A to explain the relationship between
Buziness World Canada and Business World Pakistan, Kamran described the
funds as coming from a ``proprietary'' account and the ``funds transfer
have been made by them as a favour as we had returned money to customer
and it will be repaid against delivery to us which we will settle with
Buziness World Canada later.''
Business World Pakistan arranged for shipping from Company A,
though the freight forwarder collecting the shipment from Company A
listed the shipper as ``Buziness World Canada.'' Shipping records
indicate that the items were sent from the United States to Pakistan in
or about June 2018. Based on BIS's investigation, BIS has reasonable
cause to believe that the U.S.-origin items were intended for the PAEC.
2. Company B Transaction
Company B is a manufacturer located in the United States. From at
least in or around 2017 through in or around 2018, Kamran and others at
Business World Pakistan contacted Company B to obtain U.S.-origin
industrial safety equipment that BIS has reasonable cause to believe
was intended for the Chasma Nuclear Power Project of the PAEC. These
items included Foreign Material Exclusion or ``FME'' placards. The
payments for these items were facilitated through middle parties, and
the shipper was listed as Buziness World Canada, even though the order
was exported directly from the United States to Pakistan.
On or about June 7, 2018, Kamran of Business World Pakistan
contacted Company B regarding the delivery status of parts for its
existing order of FME placards. The Company B representative responded
the same day indicating that the company was still waiting for the
delivery of parts.
Around the same time, Kamran of Business World Pakistan was also in
contact with freight forwarder Airways Freight Pakistan to pick up the
shipment from Company B's facilities in New Hampshire. In an email
dated on or about June 21, 2018, Kamran provided his freight forwarder
with contact information for the Company B representative. The freight
forwarder subsequently provided a booking reference that identified the
shipment as bound for Karachi with the shipper identified as Company B
and the consignee as ``Business World'' Pakistan. The booking reference
identified the commodity as ``safety tarps and supplies'' and the
subject line included a reference to ``FMEZ.'' In response to this
email from the freight forwarder with the booking reference, Kamran of
Business World Pakistan requested that the shipper be changed from
Company B to Buziness World Canada.
In an email dated August 2, 2018, a Business World Pakistan
representative, who had been copied on the email to the freight
forwarder, notified the procurement manager of the PAEC's Chasma
Nuclear Power Project of delivery delays related to its purchase order
and sought an extension of delivery time until August 31, 2018.
Business World Pakistan attached to its email the bill of lading from
its freight forwarder and referenced the same bill of lading as the one
identified for Business World Pakistan's shipment from Company B.
Business World Pakistan had sent its email to [email protected], which
is believed to be an email associated with the procurement arm of the
Chasma Nuclear Power Project-3.
B. Historical Transactions
OEE's investigation revealed that the Respondents have, over a
period of years, been engaged in a flexible procurement scheme in order
to illegally route U.S.-origin items to Pakistan. OEE identified a
number of prior export transactions where the Respondents' procurement
network obscured the originator of the transaction by incorporating
middle parties and alternative entities and destinations. OEE has
demonstrated that the Respondents should be included in this TDO to
prevent further diversion of U.S.-origin items to the prohibited
parties the PAEC and AERO.
1. Unlicensed Export to AERO From Company C and Ties to Waheed and Hong
Kong Company Transcool
Company C is a manufacturer located in the United States. On or
about October 4, 2016, Company C of State College, Pennsylvania, sold
electronics valued at $4,370 to a company in Beckley, West Virginia.
These items were later transshipped through Hong Kong for ultimate
export to AERO in Pakistan in fulfillment of a purchase order request
made through Kamran of Business World Pakistan and routed through
entities in the United Kingdom, United States, Hong Kong and ultimately
Pakistan.
OEE's investigation uncovered that [email protected], an
email account owned and controlled by Kamran of Business World
Pakistan, received an AERO tender inquiry dated July 24, 2015, for
items manufactured by Company C. In a purchase order dated March 10,
2016, Business World Pakistan requested the same items of Business
International UK, a company that was owned and controlled by Waheed.
Business International UK sent an invoice acknowledging the sales order
on or about March 15, 2016. Thereafter, a company in the United States
in Beckley, West Virginia, contacted Company C regarding obtaining the
same items.
Although Business International UK requested the order and the
items were ultimately exported via Hong Kong to Pakistan, the company
in Beckley, West Virginia, was listed as the ``sold to'' and ``ship
to'' party, and at this time BIS does not have evidence indicating that
the company in Beckley, West Virginia, which is now dissolved,
disclosed that the items were for export. OEE's investigation uncovered
that the
[[Page 4274]]
shipment was sent to a freight forwarder in Hong Kong and a related
invoice for the Company C items listed ``Transcool Auto Air
Conditioning Products'' as the recipient at the same address as
Business World Hong Kong and Industria Hong Kong. An invoice dated
December 2, 2016, from Kamran of Business World Pakistan (using email
address [email protected]) to ``Khan'' at Business World
Hong Kong (received at email address businessworldhk@hotmail), with a
carbon copy to Waheed (to email address [email protected])
included an invoice with the exact same Company C items in product code
and quantity and in exactly the same order as in the AERO request.
Based on these facts, BIS has reasonable cause to believe that the
Respondents engaged in a scheme to transship items that were ultimately
intended for delivery to AERO in Pakistan.
2. Unlicensed Exports to AERO From Company D and Ties to Business World
Hong Kong, Business World Canada and Product Engineering in Pakistan
Company D is an electronics parts supplier located in the United
States. A series of exports by Company D of Casselberry, Florida,
highlight the variety of entities and transshipment routes used to
export U.S.-origin items to AERO. Throughout 2016 and 2017, the
procurement network used entities in Pakistan, Canada, and Hong Kong to
fulfill orders for AERO. Company D identified several shipments to
Business World entities in this time frame, and OEE's investigation
uncovered the items were connected to purchase orders or other requests
from either the PAEC or AERO. Examples of these transactions include:
On or about March 5, 2016, Company D exported capacitors
to Business World Hong Kong, with Business World Hong Kong listed on
the invoice as the ``bill to'' and ``ship to'' party. Emails from
Business World Hong Kong included those signed by ``M.A. Khan.'' OEE
has reason to believe that this is the same Khan identified above in
the list of Respondents. OEE's investigation identified an AERO tender
dated July 2, 2015, and sent to [email protected], an email
address believed to be controlled by Kamran of Business World Pakistan,
that listed AERO as seeking the exact same product in the same
quantity.
On or about April 20, 2017, Company D exported U.S.-origin
electronic components to Business World Pakistan. The related invoice
identifying the ``bill to'' party as Business World Canada and the
``ship to'' party as Business World Pakistan. OEE's investigation
identified an AERO purchase order to Business World Pakistan dated
November 18, 2016, that includes the exact same ten items by part
number in the same quantity and in exactly the same order as those
listed on the Company D invoice.
On or about July 20, 2017, Company D exported U.S.-origin
semiconductors to Business World Canada. The invoice listed the ``bill
to'' party as Buziness World Canada and the ``ship to'' party as
Product Engineering in Pakistan. OEE's investigation identified an AERO
purchase order dated September 22, 2016, to Business World Pakistan
that includes the exact same 27 items by part number in the same
quantity and in exactly the same order as those listed on the Company D
invoice.
3. Unlicensed Export to the PAEC From Company E and Ties to Electro-
Power Solutions and Industria Hong Kong
Company E is a supplier located in the United States. In another
example, the procurement network used entities in Hong Kong, including
the company name ``Electro-Power Solutions,'' to obtain items for the
PAEC. Some common elements remained, however, such as oversight and
direction by Kamran of Business World Pakistan and payment by Business
World Canada.
On or about November 10, 2016, Company E of Brentwood, New
Hampshire, exported cartridge heaters to Industria Hong Kong for an
order placed by Electro-Power Solutions of Hong Kong, a company located
at the same address as Business World Hong Kong and Industria Hong
Kong. Kamran of Business World Pakistan, through his email address of
[email protected], directed Business World Canada at
[email protected] to make a wire transfer payment of $1,557.50 to
Company E. OEE's investigation identified ``ICCC'' or the
Instrumentation Control and Computer Complex, an arm of the PAEC, as
requesting the U.S.-origin cartridge heaters from Kamran of Business
World Pakistan based on an email dated July 25, 2016. A Business World
Pakistan purchase order to ICCC dated December 30, 2016, confirms that
the order was revised to 125 cartridge heaters, rather than 150,
matching the Company E export.
4. Unlicensed Export to AERO From Company F and Ties to Business World
Hong Kong and Ahsan
Company F is a manufacturer and distributor located in the United
States. In another variation of Respondents' procurement scheme,
Business World Canada used a credit card to pay for an order for AERO
that was routed through middle parties in Hong Kong for ultimate
transshipment to Pakistan.
On or about January 8, 2016, Company F of Las Vegas, Nevada,
exported electronic connectors to Business World Hong Kong. The related
invoice listed the ``ship to'' party as Business World Hong Kong and
the ``bill to'' party as Business World Pakistan, though the actual
payor was Ahsan of Business World Canada, who paid $9,846 using a
credit card in his name. OEE's investigation identified an AERO tender
dated June 8, 2015, with the exact same parts in the same quantity as
in the Company F invoice; the AERO tender had been forwarded from the
[email protected] to others at Business World Pakistan. OEE's
investigation also identified shipping documents where ``M.A. Khan'' of
Business World Hong Kong reexported the items listed on the Company F
invoice to Business World Pakistan on or about March 30, 2017. No
license was obtained for the shipment since Business World Pakistan
concealed the true end user.
IV. Ongoing Nature of Respondents' Procurement Scheme
BIS's investigation has uncovered that Respondents continue to seek
U.S.-origin items from companies which they have previously obtained
items on behalf of the PAEC and AERO, and with which they have an
established business relationship. As recently as September 2019,
Business World Hong Kong, using a well-established modus operandi,
including the same email addresses and aliases used in prior efforts to
illegally obtain U.S.-origin items for the PAEC, sought to obtain
additional items from U.S. companies. Specifically, on or about April
12, 2019, Business World Hong Kong re-engaged the U.S. company to seek
new items--picking up an earlier email exchange that had been used as
part of the illegal procurement scheme on behalf of the PAEC. Not only
was the means of engagement identical, Business World Hong Kong sought
the same cartridge heaters as had been acquired previously. Further,
based on OEE's review of the procurement scheme's prior transaction and
the entities involved here, OEE has reasonable cause to believe that
the current request is also for listed entities, the PAEC and AERO.
Similarly, continuing through late 2019, Kamran contacted U.S.
companies to obtain other U.S.-origin items that BIS has reasonable
cause to believe are for listed entities, such as the PAEC and AERO,
based on his prior transactions. These
[[Page 4275]]
transactions included payments from seemingly unrelated entities in
third countries in a method similar to other transactions.
In sum, Respondents operated a well-developed procurement scheme
for at least five years, designed to circumvent U.S. restrictions on
exports of items to the PAEC and AERO based on their involvement in the
proliferation of nuclear and missile technology. This scheme involved
multinational entities and players located in at least three countries,
the use of related and unrelated companies, changeable transshipment
routes, and duplicitous methods of payment. Respondents themselves
routinely generated false information to avoid detection of the scheme.
In addition, on its own, the unsealing of the criminal indictment
against the individual Respondents will not give the public sufficient
notice of the individuals and entities involved in the ongoing
procurement scheme. Thus, with the identification of the Respondents as
set forth in this TDO, the undersigned expects to reduce the likelihood
that U.S.-origin items will be exported, reexported or transferred to
listed entities as part of the procurement scheme.
Based on the foregoing evidence, the scheme is durable and ongoing,
and violations of the Regulations are thereby imminent.
V. Related Persons
Section 766.23 of the Regulations provides that in order to prevent
evasion, TDOs ``may be made applicable not only to the respondent, but
also to other persons then or thereafter related to the respondent by
ownership, control, position of responsibility, affiliation, or other
connection in the conduct of trade or business.'' 15 CFR 766.23(a).
Related persons may be added to a TDO on an ex-parte basis in
accordance with Section 766.23(b) of the Regulations. 15 CFR 766.23(b).
The designation of Product Engineering's name and address as the ``ship
to'' party in at least one transaction highlights that Respondents
regularly used their affiliations and business relationships to obscure
the true end user of an export of U.S.-origin items. Product
Engineering is intertwined in its conduct of business with Kamran of
Business World Pakistan, and as such is properly designated as a
related person. As noted above, the Respondents regularly procured
U.S.-origin items for the PAEC and AERO, and OEE uncovered evidence
that U.S.-origin items shipped to Product Engineering were ultimately
destined for the prohibited end users.
VI. Findings
I find that the evidence presented by BIS demonstrates that a
violation of the Regulations is imminent in both time and degree of
likelihood. The Respondents have engaged in knowing violations of the
Regulations relating to the procurement of U.S.-origin items subject to
the Regulations for export to persons on the BIS Entity List, at times
via transshipment through Hong Kong, while providing false or
misleading information regarding the ultimate consignee and final
destination of the items to U.S. suppliers and/or the U.S. Government.
Respondents structured and routed their transactions in a manner
designed to conceal or obscure the destinations, end users, and/or end
uses of the U.S.-origin items they procure, thereby attempting to avoid
export control scrutiny and possible detection by U.S. law enforcement.
In sum, the facts and circumstances taken together, including the
transshipment of U.S.-origin items, misrepresentations made in AES
filings, and concerted actions of the Respondents, coupled with very
recent activity employing the same modus operandi, provide strong
indicators that violations likely are imminent absent the issuance of a
TDO. Therefore, a 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.
Accordingly, I find that an order denying the export privileges of
Muhammad Kamran Wali, Muhammad Ahsan Wali, Haji Wali Muhammad Sheikh,
Ahmed Waheed, Ashraf Khan Muhammad, Business World (of Pakistan),
Buziness World (of Canada), Business World (of Hong Kong), and
Industria Hong Kong Ltd, d/b/a Transcool Auto Air Conditioning
Products, d/b/a Electro-Power Solutions is necessary, in the public
interest, to prevent an imminent violation of the EAR. Additionally, I
find that Product Engineering meets the criteria set out in Section
776.23 and should be added to the TDO as a related person in order to
prevent evasion.
This Order is being issued on an ex parte basis without a hearing
based upon BIS's showing of an imminent violation in accordance with
Sections 766.24 and 766.23(b) of the Regulations.
It is therefore ordered:
First, that MUHAMMAD KAMRAN WALI, with the last known address of
1st Floor Jahanzeb Center, Bank Road, Saddar, Rawalpindi, Pakistan;
MUHAMMAD AHSAN WALI, with the last known address of 4453 Weeping Willow
Drive, Mississauga, Ontario, Canada; HAJI WALI MUHAMMAD SHEIKH, with
the last known address of 4453 Weeping Willow Drive, Mississauga,
Ontario, Canada; AHMED WAHEED, with the last known address of 143 Wards
Road, Ilford, Essex, United Kingdom; ASHRAF KHAN MUHAMMAD, M/F 20 Pei
Ho Street, Sham Shui Po, Kowloon, Hong Kong; BUSINESS WORLD, with the
last known address of 1st Floor Jahanzeb Center, Bank Road, Saddar,
Rawalpindi, Pakistan; BUZINESS WORLD, with the last known address of
4453 Weeping Willow Drive, Mississauga, Ontario, Canada; BUSINESS
WORLD, with the last known address of 2nd Floor, Kau On Building, 251-
253 Cheung Shaw Wan Road, Kowloon, Hong Kong; INDUSTRIA HONG KONG LTD,
d/b/a TRANSCOOL AUTO AIR CONDITIONING PRODUCTS, d/b/a ELECTRO-POWER
SOLUTIONS, with the last known address of 2nd Floor, Kau On Building,
251-253 Cheung Shaw Wan Road, Kowloon, Hong Kong; and PRODUCT
ENGINEERING, Unit 10, Chowk Gowalmandi, Daryabad, Gowalmandi,
Rawalpindi, Punjab, Pakistan, and when acting for or on their behalf,
any successors, assigns, directors, officers, employees, or agents
(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 engaging 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 from 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
[[Page 4276]]
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 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 or entity related to Muhammad Kamran Wali,
Muhammad Ahsan Wali, Haji Wali Muhammad Sheikh, Ahmed Waheed, Ashraf
Khan Muhammad, Business World (of Pakistan), Buziness World (of
Canada), Business World (of Hong Kong), and Industria Hong Kong Ltd 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 accordance with the provisions of Section 766.24(e) of the EAR,
Muhammad Kamran Wali, Muhammad Ahsan Wali, Haji Wali Muhammad Sheikh,
Ahmed Waheed, Ashraf Khan Muhammad, Business World (of Pakistan),
Buziness World (of Canada), Business World (of Hong Kong), and
Industria Hong Kong Ltd 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 Sections 766.23(c)(2) and
766.24(e)(3) of the EAR, Product Engineering may, at any time, appeal
its inclusion as a related person 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. Muhammad Kamran Wali,
Muhammad Ahsan Wali, Haji Wali Muhammad Sheikh, Ahmed Waheed, Ashraf
Khan Muhammad, Business World (of Pakistan), Buziness World (of
Canada), Business World (of Hong Kong), and Industria Hong Kong Ltd may
oppose a request to renew this Order by filing a written submission
with the Assistant Secretary 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 sent to Muhammad Kamran Wali,
Muhammad Ahsan Wali, Haji Wali Muhammad Sheikh, Ahmed Waheed, Ashraf
Khan Muhammad, Business World (of Pakistan), Buziness World (of
Canada), Business World (of Hong Kong), Industria Hong Kong Ltd and
Product Engineering, and shall be published in the Federal Register.
This Order is effective upon issuance and shall remain in effect
for 180 days.
Dated: January 15, 2020.
Douglas Hassebrock,
Acting Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2020-01118 Filed 1-23-20; 8:45 am]
BILLING CODE 3510-33-P