[Federal Register Volume 85, Number 165 (Tuesday, August 25, 2020)]
[Notices]
[Pages 52321-52324]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18587]



[[Page 52321]]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Order Temporarily Denying Export Privileges

PT MS Aero Support, Mth Square Building, No. B9B, Jl. Mt. Haryono 
Kav 10, East Jakarta 13330, Indonesia, and Halim Perdana Kusuma 
Airport Building, 2nd Fl. #261-262, Jakarta 13610, Indonesia, and 
Sinar Kasih Building 4th Floor, JL. Dewi Sartika No. 136 D, Jakarta 
13630 Indonesia
PT Antasena Kreasi, Mth Square Building, No, B9B, Jl. Mt. Haryono 
Kav 10, East Jakarta 13330, Indonesia and Palma One Building, Lt 5, 
Suite 500, JIHR Rasuna Said Blok X-2 Kav 4, Setiabudi Jakarta 
Selatan, Indonesia
PT Kandiyasa Energi Utama, Jalan Wijaya No 75, Jakarta Selatan 12170 
Indonesia, and Palma One Building, Lt 5, Suite 500, JIHR Rasuna Said 
Blok X-2 Kav 4, Setiabudi Jakarta Selatan, Indonesia
Sunarko Kuntjoro, Mth Square Building, No. B9B, Jl. Mt. Haryono Kav 
10, East Jakarta 13330, Indonesia
Triadi Senna Kuntjoro, Mth Square Building, No. B9B, Jl. Mt. Haryono 
Kav 10, East Jakarta 13330, Indonesia and Jalan Wijaya No 75, 
Jakarta Selatan 12170 Indonesia
Satrio Wiharjo Sasmito, Mth Square Building, No. B9B, Jl. Mt. 
Haryono Kav 10, East Jakarta 13330, Indonesia, and Halim Perdana 
Kusuma Airport Building, 2nd Fl. #261-262, Jakarta 13610, Indonesia

    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 the issuance of an Order 
temporarily denying, for a period of 180 days, the export privileges 
under the Regulations of: PT MS Aero Support (``PTMS Aero''), PT 
Antasena Kreasi (``PTAK''), PT Kandiyasa Energi Utama (``PTKEU''), 
Sunarko Kuntjoro, Triadi Senna Kuntjoro, and Satrio Wiharjo Sasmito. 
OEE's request and related information indicates that these parties are 
located in Indonesia, at the respective addresses listed on the caption 
page of this order and on page 11, infra, and that Sunarko Kuntjoro 
owns or controls or is otherwise affiliated with PTMS Aero and the 
other companies at issue. Moreover, Sunarko Kuntjoro's son Triadi Senna 
Kuntjoro and brother Satrio Wiharjo Sasmito are not only close 
relatives but also were involved in the operation of these companies 
and the unlicensed exports as discussed further below.
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    \1\ The Regulations, currently codified at 15 CFR parts 730-774 
(2020), 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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I. Legal Standard

    Pursuant to Section 766.24, BIS may issue an order temporarily 
denying a respondent's export privileges upon a showing that the order 
is necessary in the public interest to prevent an ``imminent 
violation'' of the Regulations. 15 CFR 766.24(b)(1) and 766.24(d). ``A 
violation may be `imminent' either in time or degree of likelihood.'' 
15 CFR 766.24(b)(3). BIS may show ``either that a violation is about to 
occur, or that the general circumstances of the matter under 
investigation or case under criminal or administrative charges 
demonstrate a likelihood of future violations.'' Id. As to the 
likelihood of future violations, BIS may show that the violation under 
investigation or 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 temporary denial order 
(``TDO'') may also 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 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). 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).

II. OEE's Request for a Temporary Denial Order

    As referenced in OEE's request, PTMS Aero, PTAK, PTKEU, and Sunarko 
Kuntjoro were each indicted in December 2019 on multiple counts in the 
United States District Court for the District of Columbia. The charges 
include, but are not limited to, conspiring to violate U.S. export 
control and sanctions laws in connection with the unlicensed export of 
aircraft parts to Mahan Air, an Iranian airline and prohibited end-
user, often in coordination with Mustafa Ovieci, a Mahan executive. 
These parties also facilitated the shipment of damaged Mahan Air parts 
to the United States for repair and subsequent export back to Iran in 
further violation of U.S. laws. In both instances, the fact that the 
items were destined to Iran/Mahan Air was concealed from U.S. 
companies, shippers, and freight forwarders.
    Mahan Air has been on BIS's Denied Persons List since March 2008, 
due to numerous significant, continuing, deliberate, and covert 
violations of the Regulations.\2\ In addition, since October 2011, it 
has been designated as a Specially Designated Global Terrorist 
(``SDGT'') by the Treasury Department's Office of Foreign Assets 
Control (``OFAC'') pursuant to Executive Order 13224 for providing 
financial, material and technological support to Iran's Islamic 
Revolutionary Guard Corps-Qods Force (IRGC-QF). See 77 FR 64,427 
(October 18, 2011).
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    \2\ Mahan Airways' status as a denied person was most recently 
renewed by BIS through a temporary denial order issued on May 29, 
2020. See 85 FR 34405 (Jun. 4, 2020). The May 29, 2020 renewal order 
summarizes the initial TDO issued against Mahan in March 2008, and 
the other renewal orders prior to May 29, 2020. See id.
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    Further, Mustafa Oveici, an Iranian national and Mahan Air 
executive was placed on BIS's Entity List, Supplement No. 4 to Part 744 
of the Regulations, on December 12, 2013 (see 78 FR 75,463), for 
engaging in activities contrary to the national security or foreign 
policy interests of the United States. See 15 CFR 744.11. Mr. Oveici 
was one of 19 persons engaged in the operation of a procurement scheme 
that directly supported the operation of Mahan Air. See 78 FR 75,463 
(Dec. 12, 2013). As a result of that listing, no item subject to the 
Regulations may be exported, reexported, or transferred (in-country) to 
him without prior license authorization from BIS. See 15 CFR 744.11; 
Supp No. 4 to 15 CFR part 744. Moreover, BIS's review policy regarding 
such

[[Page 52322]]

applications involving Mr. Oveici is a presumption of denial. Id.
    In its request, OEE has presented evidence indicating that Sunarko 
Kuntjoro and the other above-captioned parties are engaged in 
procurement and servicing activities relating to U.S.-origin aircraft 
parts for or on behalf of Mahan Air, operating as parties to the 
transactions and/or facilitating transactions that are structured to 
evade the Regulations as well as the Iranian Transactions and Sanctions 
Regulations (``ITSR''), 31 CFR part 560, administered by OFAC \3\ by 
routing unlicensed exports or reexports through Indonesia and other 
third countries, including but not limited to Singapore, Hong Kong, and 
Thailand to Iran.
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    \3\ Pursuant to Section 746.7(e) of the EAR, 15 CFR 746.7(e), no 
person may export or reexport any item that is subject to the EAR if 
such transaction is prohibited by the ITSR and has not been 
authorized by OFAC. The prohibition found in Section 746.7(e) 
applies whether or not the EAR requires a license for the export or 
reexport in question. Id.
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A. Misconduct Charged in December 2019 Indictment

    The December 10, 2019 indictment charged Sunarko Kuntjoro, PTMS 
Aero, PTAK, and PTKEU with conspiracy to unlawfully export U.S.-origin 
goods and technology to Iran and to defraud the United States. Sunarko 
Kuntjoro and PTMS Aero were also charged with unlawful exports and 
attempted exports to an embargoed country, conspiracy to launder 
monetary instruments, and false statements. The evidence presented and 
charged in the indictment covers misconduct occurring between at least 
March 2011 through at least July 2018 and shows that Sunarko Kuntjoro 
was not only aware of U.S. export control laws but also took active 
steps to conceal his unlawful export-related activities in order to 
evade detection by law enforcement. As stated in the indictment for 
instance, in May 2013, OEE contacted Sunarko Kuntjoro regarding an 
attempted export involving PTMS Aero that was suspected of being 
diverted to Iran. In addition to asking about the specific transaction, 
OEE provided educational material on U.S. export controls, including 
restrictions on exports to Iran. Sunarko Kuntjoro acknowledged receipt 
responding, in part, ``[t]hank you for the valuable information you 
gave me on the attachment. I do understand the US government policy.''
    Later that same month, Sunarko Kuntjoro contacted Mahan Air, 
copying Triadi Senna Kuntjoro on the correspondence, about the need to 
conceal their activities by using a company other than PTMS Aero for 
procuring aircraft parts. Specifically, Sunarko Kuntjoro states, in 
part, that ``[a]s proposed during the meeting with mr O[veici], he 
recommended to use other company name besides of MS aero . . . I have 
established the company name Kandiyasa Energi Utama [PTKEU] . . . The 
person incharge is Triadi Sena Sunarko . . . I also in this company . . 
. so everytime you send the rfq [request for quote] for tools and 
equipment ONLY, you will get quotation from KANDIYASA'' (typographical 
errors in original communication). When subsequently questioned by OEE 
via email in June 2013 regarding the export of aircraft engines subject 
to the Regulations, Sunarko Kuntjoro and Mostafa Oveici expressed 
concerns with each other that their activities had been discovered and 
discussed the need to avoid email correspondence and discuss the matter 
in person because ``there may be a leak in the system that jeopardize 
all transaction[s].''
    As further alleged in the indictment, in February 2017, Sunarko 
Kuntjoro and PTAK negotiated with Mahan Air to have PTAK purchase, 
repair, and refurbish aircraft parts for the benefit of Mahan. Mahan 
Air would send the parts to PTAK via a freight forwarder in Singapore. 
PTAK would then remove any references to Mahan Air or Iran and then 
have the parts forwarded to the United States for repair via a 
different freight forwarder located in Hong Kong.
    Additional steps taken by Sunarko Kuntjoro and PTMS Aero to evade 
the regulations include, but are not limited to, making false 
statements in January 2018 on a BIS Form 711 [Statement by Ultimate 
Consignee] submitted to a U.S. exporter regarding a shipment of 
aircraft parts detained by OEE. Sunarko Kuntjoro signed the form as 
Chairman of PTMS Aero falsely stating the parts would be used by 
Indonesian airlines and omitting any reference to Mahan Air--the true 
intended end-user. Moreover, when questioned about the form by OEE 
Special Agents in February 2018, Sunarko Kuntjoro reiterated the false 
statements claiming the information on the BIS Form 711 was correct.

B. Additional Unlawful Exports of Aircraft Parts From the United States

    In addition to the wide-ranging conduct addressed in the indictment 
which spanned more than six years, OEE has detected that these parties 
continue to seek aircraft parts from the United States until as 
recently as December 2019, raising further concerns of continuing 
additional violations of both the Regulations and the Mahan Air TDO. 
OEE has identified an additional six exports of aircraft parts 
involving PTAK during 2018 valued at approximately $43,184, plus five 
2019 shipments involving both PTMS AERO and PTAK worth approximately 
$79,548. As an example, on December 20, 2019, OEE Special Agents 
detained an export of aircraft parts identified as Viledon P15 Pre-
filter Mats intended for PTAK. This transaction appeared to be 
structured in a similar manner to those charged in the indictment, 
including that the items were to be shipped from the United States to a 
freight forwarder in Singapore, rather than PTAK in Indonesia. 
Correspondence related to this shipment identified the email address 
[email protected] which closely matches PTAK's full name 
and the associated IP address relates back to Iran. Notably, Triadi 
Senna Kuntjoro is also copied on the correspondence for this 
transaction.
    In sum, the facts and circumstances here and related evidence 
indicate a high likelihood of future violations of the Regulations and 
U.S. export control laws, given the repeated attempts over an extended 
period of time to evade the long-standing and well-known U.S. embargo 
against Iran by obtaining and facilitating the acquisition of U.S.-
origin aircraft parts from the United States for transshipment to Iran 
and specifically to Mahan Air, a denied person (and SDGT).

C. Triadi Senna Kuntjoro and Satrio Wiharjo Sasmito as Related Persons

    OEE's investigation has established that Triadi Senna Kuntjoro, 
Sunarko Kuntjoro's son, is also connected to PTAK and involved in 
business activities on behalf of Mahan Air. In addition to his 
awareness of the December 2019 export detained by OEE as referenced 
above, Triadi Senna Kunjoro was also involved in the February 2017 
negotiations between PTAK and Mahan Air as referenced above as well. 
Specifically, on February 7, 2017, Triadi Senna Kuntjoro sent his 
father Sunarko Kuntjoro a document titled, ``MoU W5-AK-3.docx''. The 
attachment was a memorandum of understanding between Mahan Air and 
PTAK, with Triadi Senna Kuntjoro listed as a managing director of 
PTAK.\4\ The purpose of the memorandum of understanding was to define 
the scope of the working relationship between ``W5 [Mahan Air] and 
Antasena [PTAK] with respect to aviation industry for purchasing, 
repair, consultant and

[[Page 52323]]

forwarding the aircraft parts for W5 [Mahan Air].''
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    \4\ ``W5'' is the unique code given to Mahan Air by the 
International Air Transport Association (``IATA'').
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    Similarly, OEE has provided evidence that Sunarko Kuntjoro's 
brother Satrio Wiharjo Sasmito was not only aware of restrictions on 
exports to prohibited end-users and destinations such as Iran, but was 
also involved in obtaining aircraft parts from the United States for 
such prohibited end-users and destinations. An example of such evidence 
includes June 2015 correspondence between Satrio Wiharjo Sasmito and a 
U.S. aviation parts company using his PTMS Aero email account. 
Specifically, Satrio Wiharjo Sasmito provided the U.S. Company with a 
signed ``End-Use Statement'' form on behalf of PTMS Aero listing his 
position within the company as ``President Director'' and omitting any 
reference to Mahan and/or Iran. The form further acknowledges that PTMS 
Aero will not export or reexport the items to prohibited destinations 
such as Iran or to parties on BIS's Denied Persons List or OFAC's SDN 
List. These actions show not only an awareness of the EAR but also a 
willingness to provide false end-user information which resulted in the 
concealment of the item's ultimate destination from both the U.S. 
exporter and law enforcement.
    Additionally, the above-referenced indictment states in part that 
PTMS Aero, PTKEU, and Satrio Wiharjo Sasmito [identified in the 
indictment as ``Person C''] wired hundreds of thousands of dollars to 
the United States to ``repair Mahan airplane parts in the United States 
and to re-export those airplane parts back to PTMS [Aero] and Mahan.'' 
This conduct violates the Mahan TDO's prohibition on ``[e]ngaging 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 [Mahan] . . . For purposes of this 
paragraph, servicing means installation, maintenance, repair, 
modification, or testing.''

III. Findings

    I find that the evidence presented by BIS demonstrates that a 
violation of the Regulations by the above-captioned parties is imminent 
in both time and degree of likelihood. As such, a TDO is needed to give 
notice to persons and companies in the United States and abroad that 
they should cease dealing with PT MS Aero Support, PT Antasena Kreasi, 
PT Kandiyasa Energi Utama, and Sunarko Kuntjoro in export or reexport 
transactions involving items subject to the EAR. Such a TDO is 
consistent with the public interest to preclude future violations of 
the Regulations given the deliberate, covert, and determined nature of 
the misconduct and clear disregard for complying with U.S. export 
control laws. Additionally, I find that Triadi Senna Kuntjoro, and 
Satrio Wiharjo Sasmito meet the criteria set out in Section 766.23 and 
should be added to the TDO as related persons 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 
Section 766.24 and 766.23(b) of the Regulations.
    It is therefore ordered:
    First, that PT MS Aero Support, with an address at Mth Square 
Building, No. B9B, Jl. Mt. Haryono Kav 10, East Jakarta 13330, 
Indonesia, and Halim Perdana Kusuma Airport Building, 2nd Fl. #261-262, 
Jakarta 13610, Indonesia, and Sinar Kasih Building 4th Floor, JL. Dewi 
Sartika No. 136 D, Jakarta 13630 Indonesia; PT Antasena Kreasi, with an 
address at Mth Square Building, No. B9B, Jl. Mt. Haryono Kav 10, East 
Jakarta 13330, Indonesia, and Palma One Building, Lt 5, Suite 500, JIHR 
Rasuna Said Blok X-2 Kav 4, Setiabudi Jakarta Selatan, Indonesia; PT 
Kandiyasa Energi Utama, with an address at Jalan Wijaya No 75, Jakarta 
Selatan 12170 Indonesia, and Palma One Building, Lt 5, Suite 500, JIHR 
Rasuna Said Blok X-2 Kav 4, Setiabudi Jakarta Selatan, Indonesia; 
Sunarko Kuntjoro, with an address at Mth Square Building, No. B9B, Jl. 
Mt. Haryono Kav 10, East Jakarta 13330, Indonesia; Triadi Senna 
Kuntjoro, with an address at Mth Square Building, No. B9B, Jl. Mt. 
Haryono Kav 10, East Jakarta 13330, Indonesia, and Jalan Wijaya No 75, 
Jakarta Selatan 12170 Indonesia; and Satrio Wiharjo Sasmito, with an 
address at Mth Square Building, No. B9B, Jl. Mt. Haryono Kav 10, East 
Jakarta 13330, Indonesia, and Halim Perdana Kusuma Airport Building, 
2nd Fl. #261-262, Jakarta 13610, Indonesia, and when acting for or on 
their behalf, any successors or assigns, agents, or employees (each a 
``Denied Person'' and collectively the ``Denied Persons'') may not, 
directly or indirectly, participate in any way in any transaction 
involving any commodity, software or technology (hereinafter 
collectively referred to as ``item'') exported or to be exported from 
the United States that is subject to the EAR, or in any other activity 
subject to the EAR including, but not limited to:
    A. Applying for, obtaining, or using any license, License 
Exception, or export control document;
    B. Carrying on negotiations concerning, or ordering, buying, 
receiving, using, selling, delivering, storing, disposing of, 
forwarding, transporting, financing, or otherwise servicing in any way, 
any transaction involving any item exported or to be exported from the 
United States that is subject to the EAR, or in any other activity 
subject to the EAR; or
    C. 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 in any other activity subject to the EAR.
    Second, that no person may, directly or indirectly, do any of the 
following:
    A. Export or reexport to or on behalf of a Denied Person any item 
subject to the EAR;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by a Denied Person of the ownership, possession, or control 
of any item subject to the EAR that has been or will be exported from 
the United States, including financing or other support activities 
related to a transaction whereby a Denied Person acquires or attempts 
to acquire such ownership, possession or control;
    C. Take any action to acquire from or to facilitate the acquisition 
or attempted acquisition from a Denied Person of any item subject to 
the EAR that has been exported from the United States;
    D. Obtain from a Denied Person in the United States any item 
subject to the EAR with knowledge or reason to know that the item will 
be, or is intended to be, exported from the United States; or
    E. Engage in any transaction to service any item subject to the EAR 
that has been or will be exported from the United States and which is 
owned, possessed or controlled by a Denied Person, or service any item, 
of whatever origin, that is owned, possessed or controlled by a Denied 
Person if such service involves the use of any item subject to the EAR 
that has been or will be exported from the United States. For purposes 
of this paragraph, servicing means installation, maintenance, repair, 
modification or testing.
    Third, that, after notice and opportunity for comment as provided 
in section 766.23 of the EAR, any other person, firm, corporation, or 
business organization related to PT MS Aero Support, PT Antasena 
Kreasi, PT Kandiyasa Energi Utama, or Sunarko Kuntjoro 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.
    In accordance with the provisions of Section 766.24(e) of the EAR, 
PT MS Aero Support, PT Antasena Kreasi, PT Kandiyasa Energi Utama, and 
Sunarko

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Kuntjoro 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, Triadi Senna Kuntjoro and Satrio Wiharjo 
Sasmito may, at any time, appeal their 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. Respondents PT MS Aero 
Support, PT Antasena Kreasi, PT Kandiyasa Energi Utama, and Sunarko 
Kuntjoro 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 served on each denied person and 
shall be published in the Federal Register.
    This Order is effective immediately and shall remain in effect for 
180 days.

    Dated: August 19, 2020.
P. Lee Smith,
Performing the Non-exclusive Functions and Duties of the Assistant 
Secretary for Export Enforcement.
[FR Doc. 2020-18587 Filed 8-24-20; 8:45 am]
BILLING CODE 3510-33-P