[Federal Register Volume 88, Number 144 (Friday, July 28, 2023)]
[Notices]
[Pages 48789-48792]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16035]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Order Renewing Temporary Denial of Export Privileges

Empresa de Transporte A[eacute]reocargo del Sur, S.A., a/k/a 
Aerocargo del Sur Transportation Company, a/k/a EMTRASUR, Avenida 
Intercomunal, Edificio Sede, Sector 6.3, Maiquetia, Distrito 
Federal, Venezuela, Avenida Lecuna Torre Oeste Piso 49, Libertador, 
Caracas, Venezuela

    Pursuant to section 766.24 of the Export Administration 
Regulations, 15 CFR parts 730-774 (2021) (``EAR'' or

[[Page 48790]]

``the Regulations''),\1\ I hereby grant the request of the Bureau of 
Industry and Security (``BIS''), U.S. Department of Commerce, through 
its Office of Export Enforcement (``OEE''), to renew the temporary 
denial order (``TDO'') issued in this matter on January 26, 2023. I 
find that renewal of this order is necessary in the public interest to 
prevent an imminent violation of the Regulations.
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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according to their terms until modified, superseded, set aside, or 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. Procedural History

    On August 2, 2022, I signed an order denying the export privileges 
of Venezuela-based cargo airline Empresa de Transporte 
A[eacute]reocargo del Sur, S.A., a/k/a Aerocargo del Sur Transportation 
Company, a/k/a EMTRASUR (``EMTRASUR'') for a period of 180 days on the 
ground that issuance of the order was necessary in the public interest 
to prevent an imminent violation of the Regulations. The order was 
issued ex parte pursuant to section 766.24(a) of the Regulations and 
was effective upon issuance.\2\ This temporary denial order was 
subsequently renewed in accordance with section 766.24(d) of the 
Regulations.\3\ The renewal order issued on January 26, 2023 and was 
effective upon issuance.\4\
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    \2\ The TDO was published in the Federal Register on August 5, 
2022. See 87 FR 47964 (August 5, 2022).
    \3\ Section 766.24(d) provides that BIS may seek renewal of a 
temporary denial order for additional 180-day renewal periods, if it 
believes that renewal is necessary in the public interest to prevent 
an imminent violation. Renewal requests are to be made in writing no 
later than 20 days before the scheduled expiration date of a 
temporary denial order.
    \4\ The January 26, 2023 renewal order was published in the 
Federal Register on January 31, 2023. See 88 FR 6231 (January 31, 
2023).
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    On July 3, 2023, BIS, through OEE, submitted a written request for 
renewal of the TDO that issued on January 26, 2023. The written request 
was made more than 20 days before the TDO's scheduled expiration. A 
copy of the renewal request was sent to EMTRASUR in accordance with 
sections 766.5 and 766.24(d) of the Regulations. No opposition to the 
renewal of the TDO has been received.

II. Renewal of the TDO

A. 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, or any order, license or authorization 
issued thereunder. 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 ``lack 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.

B. The TDO and BIS's Request for Renewal

    OEE's request for renewal is based upon the facts underlying the 
issuance of the initial TDO and evidence developed during this 
investigation, which demonstrate continued disregard for U.S. export 
controls and the terms of a preexisting TDO. As noted in OEE's initial 
request for a temporary denial order, EMTRASUR is a subsidiary of 
Consorcio Venezolano de Industrias Aeronauticas Y Servicios Aereos, 
S.A., a/k/a CONVIASA (``CONVIASA''), a Venezuelan state-owned airline. 
On or about February 7, 2020, U.S. Department of the Treasury's Office 
of Foreign Assets Control (``OFAC'') added CONVIASA to the list of 
Specially Designated Nationals (``SDN'') pursuant to Executive Order 
(E.O.) 13884.\5\
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    \5\ See https://home.treasury.gov/news/press-releases/sm903.
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    The initial TDO, issued on August 2, 2022, was based on evidence 
that EMTRASUR engaged in conduct prohibited by a TDO that had been 
previously issued against Iranian airline Mahan Air a/k/a Mahan 
Airlines a/k/a Mahan Airways (``Mahan Air'') and the Regulations when 
EMTRASUR, through its parent company, acquired custody and/or control 
from Mahan Air of a U.S-origin Boeing 747 aircraft bearing 
manufacturer's serial number 23413 (``MSN 23413''), an item subject to 
the EAR and classified under ECCN 9A991, in or around October 2021.\6\
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    \6\ Mahan Air's status as a denied person was most recently 
renewed by BIS through a TDO issued on May 5, 2023. See 88 FR 30078 
(May 10, 2023). The May 5, 2023 renewal order summarizes the initial 
TDO issued against Mahan in March 2008 and the other renewal orders 
issued prior to May 5, 2023. See id.
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    Moreover, the initial TDO, issued on August 2, 2022, was also based 
on evidence that EMTRASUR had continued to use MSN 23413 on flights 
into Iran and Russia in violation of General Prohibition 10, which 
(among other restrictions) prohibits the continued use of an item that 
was known to have been exported or reexported in violation of the 
EAR.\7\ See General Prohibition 10 of the EAR at 15 CFR 736.2(b)(10). 
There are no license exceptions available for this General 
Prohibition.\8\ As also noted in OEE's initial request, MSN 23413 was 
detained by Argentinian authorities on or about June 8, 2022, where it 
presently remains. On or about August 2, 2022, the United States 
Department of Justice transmitted a request to Argentinian authorities 
for the seizure of MSN 23413 following the unsealing of a seizure 
warrant in the U.S. District Court for the District of Columbia.
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    \7\ Publicly available flight tracking information demonstrates, 
for instance, that EMTRASUR operated MSN 23413 on multiple flights 
between Caracas, Venezuela and Tehran, Iran between February 19, 
2022 and May 25, 2022. In addition, EMTRASUR operated MSN 23413 on 
flights between Tehran, Iran and Moscow, Russia on May 24, 2022 and 
May 25, 2022.
    \8\ Section 736.2(b)(10) of the EAR provides: General 
Prohibition Ten--Proceeding with transactions with knowledge that a 
violation has occurred or is about to occur (Knowledge Violation to 
Occur). You may not sell, transfer, export, reexport, finance, 
order, buy, remove, conceal, store, use, loan, dispose of, 
transport, forward, or otherwise service, in whole or in part, any 
item subject to the EAR and exported or to be exported with 
knowledge that a violation of the Export Administration Regulations, 
the Export Administration Act or any order, license, License 
Exception, or other authorization issued thereunder has occurred, is 
about to occur, or is intended to occur in connection with the item. 
Nor may you rely upon any license or License Exception after notice 
to you of the suspension or revocation of that license or exception. 
There are no License Exceptions to this General Prohibition Ten in 
part 740 of the EAR.
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    In its request for renewal of the August 2, 2022 TDO, as well as 
the most recent request submitted on July 3, 2023, BIS offered evidence 
demonstrating that EMTRASUR's acquisition of MSN 23413 from Mahan Air 
was in violation of the TDO previously issued against Mahan Air and the 
Regulations. Specifically, BIS's

[[Page 48791]]

ongoing investigation has uncovered evidence that certain of MSN 
23413's parts, including spare parts which appear to be U.S-origin, 
bear the markings and logos of Mahan and/or CONVIASA. This evidence 
further demonstrates that EMTRASUR's acquisition and operation of the 
aircraft violated the TDO issued against Mahan Air; as a result, any 
attempts by EMTRASUR to operate the aircraft or to return it to 
Venezuela, as well as any efforts EMTRASUR may take to maintain it, 
would violate General Prohibition 10.
    Moreover, as detailed in the January 26, 2023 renewal order, BIS's 
investigation indicates that Venezuelan parties took affirmative 
actions to secure the release of the aircraft from its detention in 
Argentina, even after the issuance of the August 2, 2022, TDO against 
EMTRASUR. In its most recent request for renewal, BIS has offered 
evidence that on May 3, 2023, United States District Judge Randolph D. 
Moss of the United States District Court for the District of Columbia 
issued a final order of forfeiture as to the aircraft, vesting all 
rights to MSN 23413 with the United States. See United States v. Boeing 
747-300 Aircraft, No. 1:22-cv-3208, Dkt. 11 (D.D.C. May 3, 2023). 
Notwithstanding this order, however, the aircraft remains in Argentina 
and has not yet been recovered by the United States government.
    Based upon the violations by EMTRASUR, its disregard for the 
Regulations and the previously-issued TDO against Mahan Air, and the 
potential release of the MSN 23413 from detention, there are concerns 
of future violations of the EAR. These concerns are heightened because 
any subsequent actions taken with regard to MSN 23413 may violate the 
EAR, including, but not limited to, its refueling, maintenance, repair, 
or the provision of spare parts or services.

III. Findings

    Under the applicable standard set forth in section 766.24 of the 
Regulations and my review of the entire record, I find that the 
evidence presented by BIS convincingly demonstrates that EMTRASUR has 
acted in violation of the Regulations and the TDO; that such violations 
have been significant, deliberate and covert; and that given the 
foregoing and the nature of the matters under investigation, there is a 
likelihood of imminent violations. Therefore, renewal of the TDO is 
necessary in the public interest to prevent imminent violation of the 
Regulations and to give notice to companies and individuals in the 
United States and abroad that they should avoid dealing with EMTRASUR 
in connection with export and reexport transactions involving items 
subject to the Regulations and in connection with any other activity 
subject to the Regulations.

IV. Order

    It is therefore ordered:
    First, Empresa de Transporte A[eacute]reocargo del Sur, S.A., a/k/a 
Aerocargo del Sur Transportation Company, a/k/a EMTRASUR, Avenida 
Intercomunal, Edificio Sede, Sector 6.3, Maiquetia, Distrito Federal, 
Venezuela, and Avenida Lecuna Torre Oeste Piso 49, Libertador, Caracas, 
Venezuela, and when acting for or on its behalf, any successors or 
assigns, agents, or employees 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 (except directly 
related to safety of flight), 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 except directly related to 
safety of flight and authorized by BIS pursuant to section 764.3(a)(2) 
of the Regulations, or engaging in any other activity subject to the 
EAR except directly related to safety of flight and authorized by BIS 
pursuant to section 764.3(a)(2) of 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 EAR, or from any other activity subject to the EAR except directly 
related to safety of flight and authorized by BIS pursuant to section 
764.3(a)(2) of the Regulations.
    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 
EMTRASUR any item subject to the EAR except directly related to safety 
of flight and authorized by BIS pursuant to section 764.3(a)(2) of the 
Regulations;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by EMTRASUR 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 EMTRASUR acquires or attempts to acquire such 
ownership, possession or control except directly related to safety of 
flight and authorized by BIS pursuant to section 764.3(a)(2) of the 
Regulations;
    C. Take any action to acquire from or to facilitate the acquisition 
or attempted acquisition from EMTRASUR of any item subject to the EAR 
that has been exported from the United States except directly related 
to safety of flight and authorized by BIS pursuant to section 
764.3(a)(2) of the Regulations;
    D. Obtain from EMTRASUR 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 except directly related 
to safety of flight and authorized by BIS pursuant to section 
764.3(a)(2) of the Regulations; 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 EMTRASUR, or service any item, of 
whatever origin, that is owned, possessed or controlled by EMTRASUR if 
such service involves the use of any item subject to the EAR that has 
been or will be exported from the United States except directly related 
to safety of flight and authorized by BIS pursuant to section 
764.3(a)(2) of the Regulations. 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 EMTRASUR 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 sections 766.24(e) of the EAR, 
EMTRASUR 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 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. A renewal request may be 
opposed by EMTRASUR as provided in section 766.24(d), by

[[Page 48792]]

filing a written submission with the Assistant Secretary of Commerce 
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 provided to EMTRASUR and shall be 
published in the Federal Register.
    This Order is effective immediately and shall remain in effect for 
180 days.

    Dated: July 25, 2023.
Matthew S. Axelrod,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2023-16035 Filed 7-27-23; 8:45 am]
BILLING CODE 3510-DT-P