[Federal Register Volume 89, Number 17 (Thursday, January 25, 2024)]
[Notices]
[Pages 4901-4903]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01411]


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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 through 774 (2023) (``EAR'' or ``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 July 25, 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. section 
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superseded, set aside, or revoked through action undertaken pursuant 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\ A second renewal order issued on July 25, 
2025 and was also effective upon issuance.\5\
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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).
    \5\ The July 25, 2023 renewal order was published in the Federal 
Register on July 28 2023. See 88 FR 48789 (July 28, 2023).
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    On December 22, 2023, BIS, through OEE, submitted a written request 
for renewal of the TDO that issued on July 25, 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

[[Page 4902]]

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.\6\
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    \6\ 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.\7\
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    \7\ 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.\8\ See General Prohibition 10 of the EAR at 15 CFR 736.2(b)(10). 
There are no license exceptions available for this General 
Prohibition.\9\ 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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    \8\ 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.
    \9\ 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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    The January 26, 2023 and July 2023 renewal orders outlined evidence 
demonstrating that EMTRASUR's acquisition of MSN 23413 from Mahan Air 
was in violation of the TDO previously issued against Mahan Air as well 
as 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. Accordingly, 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 and July 25, 2023 
renewal orders, 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. BIS also 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). Most recently, on or about 
January 4, 2024, a federal judge in Argentina issued an order for the 
aircraft at to be released to the United States Government.\10\ 
Notwithstanding this order, however, the aircraft physically remains in 
Argentina and has not yet been recovered by the United States 
government.
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    \10\ https://www.msn.com/en-us/news/world/argentina-surrenders-emtrasur-747-aircraft-to-the-us/ar-AA1mE3uV.
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    Based upon the violations by EMTRASUR, its disregard for the 
Regulations and the previously issued TDO against Mahan Air, and the 
attempts by the Venezuelan government to reacquire control of MSN 
23413, there are concerns of future violations of the EAR. These 
concerns are heightened because any subsequent actions taken with 
regard to MSN 23413 for or on behalf of EMTRASUR would 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;

[[Page 4903]]

    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 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: January 21, 2024.
Matthew S. Axelrod,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2024-01411 Filed 1-24-24; 8:45 am]
BILLING CODE 3510-DT-P