[Federal Register Volume 87, Number 169 (Thursday, September 1, 2022)]
[Notices]
[Pages 53716-53718]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18874]



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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Hans De Geetere, Paul Parmentierlaan 121, 8300 Knokke Heist, 
Belgium and Nyckeesstraat 4, 8300 Knokke Heist, Belgium; Knokke-Heist 
Support Corporation Management a/k/a Hasa-Invest, Paul Parmentierlaan 
121, 8300 Knokke Heist, Belgium and Nyckeesstraat 4, 8300 Knokke Heist, 
Belgium; Order Temporarily Denying Export Privileges

    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: Hans De Geetere of Belgium (``De Geetere'') 
and his company Knokke-Heist Support Corporation Management, also known 
as Hasa-Invest (``Knokke-Heist'') (collectively ``Respondents'').
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    \1\ 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 Export Administration Act, 50 U.S.C. app. 2401 et 
seq. (``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 the International Emergency Economic Powers Act, 
50 U.S.C. 1701 et seq. (``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according to their terms until modified, superseded, set aside, or 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. 50 U.S.C. 4820(a)(5).
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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.

II. OEE's Request for a Temporary Denial Order

    As further detailed below, OEE's request and investigation are 
based, inter alia, upon facts indicating that De Geetere engaged in 
conduct prohibited by the Regulations by acquiring or attempting to 
acquire under false pretenses accelerometers, items subject to the 
Regulations, from the United States on behalf of prohibited end-users 
or for prohibited end-uses in China. The use of accelerometers by the 
aerospace and defense industries, and Respondents' false statements 
made to U.S. companies to obtain the items, raises significant concerns 
of future violations absent the issuance of a TDO.

A. Providing False End-User Information To Obtain U.S.-Origin 
Accelerometers

    OEE's request and its broader investigation outline numerous 
attempts by Respondents to obtain U.S.-origin accelerometers from a 
U.S. vendor (``U.S. Company 1''). For instance, in or about April 2021, 
OEE detained a shipment of accelerometers being exported to a German 
company. OEE obtained sales documentation for this shipment from U.S. 
Company 1, including an end-user statement wherein Knokke-Heist 
asserted that the items were being purchased on behalf of a Belgian 
Government agency. Respondents provided U.S. Company 1 a letter in 
support of the end-user statement that was purportedly signed by the 
Belgian Government. In an attempt to get the accelerometers released, 
U.S. authorities were provided a BIS Form 711 dated April 15, 2021, and 
signed by ``De Geetere H,'' identified as the CEO of Knokke-Heist, 
asserting that the end-user was a Belgian Government agency.
    OEE subsequently informed Respondents that they were unable to 
confirm the alleged Belgian Government end-user and planned to advise 
U.S. Company 1 not to proceed with the transaction. Despite this 
warning, OEE received an email purportedly written by Knokke-Heist's 
Belgian Government customer, copying De Geetere. The email states in 
relevant part:

    I can hereby confirm that the order the BV--KHSCM--with enclosed 
reference letter KN0212807-KN (Paul Parmentierlaan 121--8300 Knokke 
Heist) is about a project that is financed and purchased by our 
services. This concerns the current trial order 81 pieces of [U.S. 
Company No. 1 accelerometers] and an open order that still needs to 
be completed according to the needs of 20,000 pieces [U.S. Company 
No. 1 accelerometers] (Year 2021).
    We have included a support letter with the end user document to 
confirm the order. There is also a confirmation from the Ministry of 
Foreign Affairs. The document is drawn up in one of the three 
national languages of Belgium with which we officially communicate. 
I can only send you this letter in Flemish.

    OEE was able to confirm this was a fraudulent email and that it did 
not come from the Belgian Government.

B. Respondent Prior Orders of Accelerometers and Entity List 
Connections

    OEE's investigation later revealed that prior to the April 2021 
detained shipment described above, De Geetere, via Knokke-Heist, had 
ordered approximately $360,000 worth of accelerometers via U.S. Company 
1's German distributor starting in or about July 2020. Notably, these 
orders started shortly after a Chinese distributor for U.S. Company 1, 
Shanghai Nova Instruments Company, Ltd, was placed on the Entity List 
on June 5, 2020, for being ``involved in the procurement of items 
subject to the EAR for possible use in missile and unmanned aerial 
vehicle applications in China without the licenses required pursuant to 
Sec. Sec.  744.3 and 744.21 of the EAR.'' \2\
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    \2\ See 85 FR 34495 (June 5, 2020). Given the concerns that 
Chinese military end-users would continue to try and acquire U.S. 
Company 1's accelerometers, BIS issued US Company 1 an ``is-
informed'' letter pursuant to section 744.21(b) of the Regulations 
imposing a license requirement for the export of accelerometers to 
China. An ``is-informed'' letter is specific notification provided 
by BIS ``that a license is required for specific exports, reexports, 
or transfers (in-country) of any item because there is an 
unacceptable risk of use in or diversion to a 'military end use' or 
'military end user''' in certain destinations including China. 15 
CFR 744.21.(b).
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    OEE's on-going investigation obtained evidence suggesting that at 
least some of Respondents' orders were placed on behalf of China 
Aerospace Research Institute, an entity BIS has reason to believe is 
connected to or is an alias for the China Aerospace Science and 
Technology Corporation (``CASC'') 1st Academy 12 Research Institute, a 
party also on BIS' Entity List and the recipient of at least some 
earlier shipments from entity listed Shanghai Nova Instruments.\3\ In 
or about November

[[Page 53717]]

2020, shortly after an order for China Aerospace Research Institute was 
rejected by U.S. Company 1, Respondents attempted to obtain the same 
quantity and model of accelerometers from U.S. Company 1's German 
distributor.
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    \3\ On August 14, 2019, BIS modified the Entity List entry for 
Beijing Aerospace Automatic Control Institute (BICD), which was 
first added to the Entity List on May 28, 1999 (64 FR 28909). This 
rule changes the existing entity name to China Aerospace Science and 
Technology Corporation (CASC) 1st Academy 12 Research Institute. 84 
FR 40237 (Aug. 14, 2019). Additionally, on June 3, 2021, the Office 
of Foreign Assets Control (OFAC) named CASC to its list of Non-SDN 
Chinese Military-Industrial Complex Companies (NS-CMIC List). See 
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20210603.
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C. Later Attempts To Acquire Accelerometers via Additional Countries 
and Distributors

    OEE later became aware of two June 2021 shipments of accelerometers 
by U.S. Company 1 to a recently incorporated United Arab Emirates-based 
company (``UAE Company 1''). Given the size of the second shipment and 
UAE Company 1's recent incorporation, the second shipment was detained 
to verify its bona fides and conduct a post-shipment verification 
(``PSV'') of the first and smaller shipment of accelerometers to UAE 
Company 1. Among other things, the PSV determined UAE Company 1 did not 
possess the type of equipment that could utilize the accelerometers at 
issue and did not make available either the items or records confirming 
their ultimate destination. Additionally, the PSV found that a 
fictitious name was used by UAE Company 1 when dealing with U.S. 
Company 1.
    Further investigation revealed that UAE Company 1 purchased the 
items on behalf of Knokke-Heist and had forwarded the first shipment to 
Respondents using an address in the Netherlands. Moreover, other 
evidence gathered indicates that De Geetere was assisting UAE Company 1 
in responding to the detention and subsequent seizure of the second 
shipment by the U.S. Government. The investigation also uncovered facts 
that indicate that De Geetere led UAE Company 1 to believe that the 
items were for ultimate use by a Belgian Government entity; the same 
fraudulent scheme De Geetere and Knokke-Heist employed directly with 
U.S. Company 1 several months earlier.
    Additional attempts by the Knokke-Heist to acquire the same model 
of accelerometers were made to several other European distributors of 
U.S. Company 1 along with a separate September 2021 attempt to acquire 
the items directly from a U.S. company located in Florida, which 
identified De Geetere as the buyer's point of contact. Most recently, 
Belgian authorities identified a mid-August 2022 shipment of 
accelerometers from the United States to the Respondents. Given the 
sheer number and nature of attempts by Respondents to acquire U.S.-
origin items under false pretenses on behalf of prohibited end-users or 
for prohibited end-uses, conduct which OEE's investigation reveals has 
continued, renders a TDO necessary to prevent future violations.

III. Findings

    I find that the evidence presented by BIS demonstrates a clear 
pattern of Respondents attempting to obtain items subject to the EAR by 
knowingly providing false information in an attempt to conceal the true 
identity of their customers for which BIS authorization otherwise would 
be required, and that a violation of the Regulations by the above-
captioned parties is imminent in 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 De Geetere and Knokke-
Heist 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 serious national 
security concerns impacted by the misconduct and the clear disregard 
for complying with U.S. export control laws.
    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 of the Regulations.
    It is therefore ordered:
    First, that Hans De Geetere, with an addresses at Paul 
Parmentierlaan 121, 8300 Knokke Heist, Belgium, and Nyckeesstraat 4, 
8300 Knokke Heist, Belgium; and Knokke-Heist Support Corporation 
Management, a/k/a Hasa-Invest, with an addresses at Paul Parmentierlaan 
121, 8300 Knokke Heist, Belgium, and Nyckeesstraat 4, 8300 Knokke 
Heist, Belgium, 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, reexport, or transfer (in-country) 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 response as provided 
in section 766.23 of the EAR, any other person, firm, corporation, or 
business organization related to De Geetere or Knokke-Heist, 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, 
De Geetere or Knokke-Heist, may, at any time, appeal this Order by 
filing a full written

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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 De Geetere 
or Knokke-Heist, 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.

Matthew S. Axelrod,
Assistant Secretary for Export Enforcement.
[FR Doc. 2022-18874 Filed 8-31-22; 8:45 am]
BILLING CODE 3510-DT-P