In the Matter of: Petrochemical Commercial Co. Ltd., NIOC House, 4 Victoria Street, London, UK SW1H One, Respondent; Decision and Order, 23983-23987 [05-9118]
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[FR Doc. 05–9014 Filed 5–5–05; 8:45 am]
BILLING CODE 6335–01–P
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
[Docket No. 04–BIS–10]
In the Matter of: Petrochemical
Commercial Co. Ltd., NIOC House, 4
Victoria Street, London, UK SW1H One,
Respondent; Decision and Order
On March 31, 2004, the Bureau of
Industry and Security (‘‘BIS’’) filed a
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charging letter against the respondent,
Petrochemical Commercial Co. (UK)
Ltd. (‘‘PCC’’), that alleged one violation
of Section 764.2(b) of the Export
Administration Regulations
(Regulations),1 which were issued under
the Export Administration Act of 1979,
as amended (50 U.S.C. app. 2401–2420
(2000)) (‘‘Act’’).2
Specifically, the charging letter
alleged that on or about August 28,
2002, PCC, a British company,
forwarded a bid by Chemical Industries
Consolidated b.v. (‘‘CIC’’), of the
Netherlands, for gas compression spare
parts (‘‘compressor parts’’) to be
exported from the United States to
Tabriz Petrochemical Company in Iran
(‘‘Tabriz’’). CIC was attempting to
arrange for the export of the items from
the United States to Iran without
authorization from the U.S. Department
of Treasury’s Office of Foreign Assets
Control (‘‘OFAC’’) as required by § 746.7
of the Regulations. The compressor
parts are items subject both to the
Regulations and the Iranian
Transactions Regulations administered
by OFAC. In forwarding the bid, BIS
charged that PCC aided the solicitation
of that attempted export to Tabriz in
violation of the Regulations, thereby
committing one violation of Section
746.2(b) of the Regulations.
On May 3, 2004, PCC filed a
Statement of Answer (‘‘Answer’’)
denying the formal charge. As ordered
by the Administrative Law Judge
(‘‘ALJ’’), on November 8, 2004, BIS filed
a Memorandum and Submission of
Evidence to Supplement the Record
and, on January 18, 2005, it filed a
Memorandum of Proposed Findings of
Fact and Conclusions of Law. PCC did
not submit any further filings to the ALJ.
Based on the record before it, on
March 30, 2005, the ALJ issued a
Recommended Decision and Order in
which he found that PCC committed the
1 The violation charged occurred in 2002. The
Regulations governing the violations at issue are
found in the 2002 version of the Code of Federal
Regulations (15 CFR Parts 730–774 (2002)). The
2005 Regulations establish the procedures that
apply to this matter.
2 From August 21, 1994 through November 12,
2000, the Act was in lapse. During that period, the
President, through Executive Order 12924, which
had been extended by successive Presidential
Notices, the last of which was August 3, 2000 (3
CFR, 2000 Comp. 397 (2001)), continued the
Regulations in effect under the International
Emergency Economic Powers Act (50 U.S.C. 1701–
1706 (2000)) (IEEPA). On November 13, 2000, the
Act was reauthorized by Pub. L. 106–508 (114 Stat.
2360 (2000)) and it remained in effect through
August 20, 2001. Executive Order 13222 of August
17, 2001 (3 CFR, 2001 Comp., p. 783 (2002)), which
has been extended by successive Presidential
Notices, the most recent being that of August 6,
2004 (69 FR 48763, August 10, 2004), continues the
Regulations in effect under IEEPA.
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23983
violation described above. First, based
on uncontested evidence, the ALJ
determined that CIC solicited certain
compressor parts for export to Tabriz in
Iran in violation of the Regulations. On
July 15, 2002, CIC faxed a request for
bid for the compressor parts to a
company in the United States, and
subsequently indicated to the U.S.
company that the items were destined
for Iran. A CIC representative was
eventually arrested and pled guilty to a
violation of IEEPA for his attempt to
export the compressor parts to Iran in
violation of the U.S. embargo on that
country. Second, also based on
uncontested evidence, the ALJ
determined that PCC assisted in CIC’s
solicitation of the spare compressor
parts. On or about July 11, 2002, PCC
originated the transaction at issue by
forwarding a request from Tabriz to CIC
seeking quotations for space parts
associated with certain ‘‘Joy
compressors.’’ By letter dated August
27, 2002, CIC provided PCC with price
quotations for the requested parts,
indicating that the parts were of U.S.origin. On August 28, PCC forwarded
the quotations to Tabriz, which
subsequently confirmed the transaction
with PCC by facsimile. PCC stated
during the underlying administrative
proceeding that it was fully aware of the
U.S. embargo on trade with Iran and
also knew that the U.S. Government had
not authorized the export of the space
parts in question. In light of these facts,
the ALJ held that PCC committed one
violation of Section 764.2(b) of the
Regulations. He also recommended the
penalty proposed by BIS—denial of
PCC’s export privileges for three years.
Pursuant to § 766.22 of the
Regulations, the ALJ’s Recommended
Decision and Order has been referred to
me for final action. Based on my review
of the entire record, I find that the
record supports the ALJ’s findings of
fact and conclusions of law regarding
the above-referenced charge. I also find
that the penalty recommended by the
ALJ is appropriate give the nature of the
violation and the importance of
preventing future unauthorized exports
to Iran, a country against which the
United States maintains an economic
embargo because of its support for
international terrorism. In light of these
circumstances, I affirm the findings of
fact and conclusions of law of the ALJ’s
Recommended Decision and Order.
It is hereby ordered,
First, that, for a period of three years
from the date on which this Order takes
effect, Petrochemical Commercial
Company (UK) Ltd. (‘‘PCC’’), NIOC
House, 4 Victoria Street, London, UK
SW1H One, and all of its successors or
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Federal Register / Vol. 70, No. 87 / Friday, May 6, 2005 / Notices
assigns, and when acting for or on
behalf of PCC, its officers,
representatives, agents, and employees
(individually referred to as ‘‘a Denied
Person’’), 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
Regulations, or in any other activity
subject to the Regulations, including,
but no 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 Regulations, or in any
other activity subject to the Regulations;
or
C. Benefiting in any way from any
transaction involving any item exported
or to be exported from the United States
that is subject to the Regulations, or in
connection with any other activity
subject to the Regulations.
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 Regulations:
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 Regulations 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 form a Denied Person of any
item subject to the Regulations that has
been exported from the United States;
D. Obtain from a Denied Person in the
United States any item subject to the
Regulations 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 Regulations that
has been or will be exported from the
United States and that is owned,
possessed, or controlled by a Denied
Person, or service any item, or whatever
origin, that is owned, possessed, or
controlled by a Denied Person if such
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service involves the use of any item
subject to the Regulations 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 Regulations, any
person, firm, corporation, or business
organization related to a Denied Persons
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.
Fourth, that this Order shall be served
on the Denied Person and on BIS, and
shall be published in the Federal
Register. In addition, the ALJ’s
Recommended Decision and Order,
except for the section related to the
Recommended Order, shall be
published in the Federal Register.
This Order, which constitutes the
final agency action in this matter, is
effective upon publication in the
Federal Register.
Dated: May 2, 2005.
Peter Liehtenbaum,
Acting Under Secretary of Commerce for
Industry and Security.
Recommended Decision and Order
Before:
Honorable Walter J. Brudzinski
Administrative Law Judge
United States Coast Guard
Appearances:
For the Bureau of Industry and Security
Philip K. Ankel, Esq.
Office of Chief Counsel
Bureau of Industry and Security
For the Respondent
Petrochemical Commercial Co., Ltd.
Managing Director: Mr. M. Beirami
Pro se
Preliminary Statement
On March 31, 2004, the Bureau of Industry
and Security (‘‘BIS’’ or ‘‘Agency’’) filed a
formal Complaint against Petrochemical
Commercial Co., Ltd., (‘‘Petrochemical’’ or
‘‘Respondent’’) charging one count of
violation of the Export Administration
Regulations (‘‘EAR’’) under 15 CFR 764.2(b).
The Charging Letter asserts that on or about
August 28, 2002, Petrochemical forwarded a
bid for Chemical Industries Consolidated,
b.v. (‘‘CIC’’) for the unauthorized
procurement of gas compressor parts that are
subject to the EAR concerning exports from
the United States to the Islamic Republic of
Iran (‘‘Iran’’). In so doing, Petrochemical
aided or abetted in the solicitation of an
unauthorized export in violation of the
Export Administration Act of 1979 (‘‘EAA’’)
and the Export Administration Regulations.1
See 50 U.S.C. App. 2401–20 (1991), amended
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by Pub. L. 106–508, 114 Stat. 2360 (Supp.
2002); 15 CFR parts 730–774. the EAA and
its underlying regulations were created to
establish a ‘‘system of controlling exports by
balancing national security, foreign policy
and domestic supply needs with the interest
of encouraging export to enhance * * * the
economic well being’’ of the United States.
See Times Publ’g Co. v. United States Dep’t
of Commerce, 236 F.3d 1286, 1290 (11th Cir.
2001); see also 50 U.S.C. App. 2401–02.2
On May 3, 2004, Petrochemical filed a
Statement of Answer (‘‘Answer’’) with
documentation denying the formal charge. In
its Answer, Petrochemical did not formally
demand a hearing. Therefore, this matter was
assigned to the Undersigned to render a
decision on the record pursuant to 15 CFR
766.15. BIS regulations provide that a written
demand for hearing must be expressly
provided. As in this case, Respondent’s
failure to formally demand a hearing is
deemed a waiver of Respondent’s right to a
hearing and this Recommended Decision and
Order is hereby issued on the basis of the
submitted record.3 See id. and
§ 766.6(c).
On June 3, 2004, the undersigned issued an
Order to File Briefs directing the parties to
file the necessary, ‘‘Affidavits or declarations,
depositions, admissions, answers to
interrogatories and stipulations.’’ Following
the grant of several procedural stays, the time
period to file the necessary briefs was
extended up to and including, November 8,
2004. In keeping with the original time frame
associated with the June 3, 2004 Order, the
parties were provided with an opportunity to
file rebuttal evidence to be due by the close
of business November 30, 2004. On
November 8, 2004, BIS filed its
Memorandum and Submission of Evidence to
Supplement the Record (‘‘BIS
Memorandum’’).
1 Due to the nature of this transaction, the items
in question are also subject to the Iranian
Transactions Regulations under the jurisdiction of
the Department of Treasury’s Office of Foreign
Assets Control (OFAC).
2 The EAA and all regulations under it expired on
August 20, 2001. See 50 U.S.C. App. 2419. Three
(3) days before its expiration, the President declared
that the lapse of the EAA constitutes a national
emergency. See Exec. Order No. 13222, reprinted in
3 CFR at 783–784, (2002). Exercising authority
under the International Emergency Economic
Powers Act (IEEPA), 50 U.S.C. 1701–06 (2002), the
President maintained the effectiveness of the EAA
and its underlying regulations throughout the
expiration period by issuing Exec. Order No. 13222
(Aug. 17, 2001). The effectiveness of the export
control laws and regulations were further extended
by Notice issued by the President on August 14,
2002 and August 7, 2003. See Notice of August 14,
2002: Continuation of Emergency Regarding Export
Control Regulations, reprinted in 3 CFR at Part 306
(2003) and 68 FR 47833, August 11, 2003. Courts
have held that the continued operation and
effectiveness of the EAA and its regulations through
the issuance of Executive Orders by the President
constitutes a valid exercise of authority. See
Wisconsin Project on Nuclear Arms Control v.
United States Dep’t of Commerce, 317 F.3d 275,
278–79 (D.C. Cir. 2003).
3 No witness testimony was received in this
proceeding. The case Index of the official record
provides the exclusive listing of documents
received in this matter. A copy of the Index is
provided as Attachment A.
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On January 3, 2005, an Order to File Predecisional Briefs was issued to provide the
parties with an opportunity to file any:
1. Exceptions to any ruling made by this
Administrative Law Judge or to the
admissibility of evidence proffered in this
matter;
2. Proposed findings of fact and
conclusions of law;
3. Supporting legal arguments for the
exceptions and proposed findings and
conclusions submitted; and
4. A proposed order.
On January 18, 2005, BIS filed its
Memorandum of Proposed Findings of Fact
and Conclusions of Law (‘‘Pre-decisional
Memorandum’’) which also included a
proposed Recommended Decision and Order.
The Pre-decisional memorandum and
proposed Recommended Decision and Order
are made part of this Recommended Decision
and Order and are included by reference.4 As
of this date, Respondent has not filed any
other documentation in this matter other
than the original Statement of Answer that
was received on May 3, 2004. Given that the
parties have been provided an ample amount
of time and opportunity to supplement the
record, and in keeping with the procedures
set forth in 15 CFR part 766, I find that this
matter is now ripe for decision.
For the reasons that follow, I hereby find
that the Bureau of Industry and Security has
met its burden as shown in the written record
by the preponderance of substantial, reliable,
and probative evidence in that Petrochemical
Commercial Co., Ltd. aided and abetted in
the solicitation of an unlicensed export to the
Islamic Republic of Iran in violation of 49
CFR 764.2(b).
Findings of Fact
The Underlying Solicitation 5
1. On July 15, 2005, Chemical Industries
Consolidated, b.v. (‘‘CIC’’) a company
registered and located in the Dutch
Netherlands made an inquiry addressed to
‘‘Joy Compressor’’ for a quotation of
compressor spare parts. (Exhibit D, BIS
Memorandum).
2. The company listed in the inquiry as
‘‘Joy Compressor’’ and as referenced by the
facsimile number and subsequent
documentation was Cooper
Turbocompressor, Inc. (‘‘Cooper’’), a United
States company located in Buffalo, New
York. (Exhibit D & F, BIS Memorandum).
3. Upon receipt of the request, Cooper then
requested further information from CIC and
specifically, sought the serial numbers of the
affected compressors. On July 23, 2002, CIC
forwarded this information by facsimile to
Cooper. (Exhibit E, BIS Memorandum).
4. Cooper verified that the serial numbers
were registered to compressors; model TAQ–
70M4C/30 that are located in Iran at Tabriz
Petrochemical. (Exhibit E & G BIS
Memorandum, Answer Appendix 2).
4 The Agency’s Proposed Findings of Fact and
Conclusions of Law are ACCEPTED and
INCORPORATED.
5 The citations provided hereunder reference the
exhibit numbers associated with the Agency’s
Memorandum and Submission of Evidence to
Supplement the Record (‘‘BIS Memorandum’’) and
Respondent’s Statement of Answer (‘‘Answer’’).
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5. The spare parts and specifically the
rotors listed in the inquiry request are
classified under the title of ‘‘EAR99,’’ which
in turn are subject to review under the Export
Administration Regulations for both, the
Department of Treasury’s Office of Foreign
Assets Control (‘‘OFAC’’) and the Bureau of
Industry and Security. (Exhibit A, BIS
Memorandum).
6. The Export and Anti-boycott
Coordinator from Cooper notified the Office
of Export Enforcement regarding CIC’s
inquiry for the compressor parts. The
destination for the listed parts was the
Islamic Republic of Iran. (Exhibit F, BIS
Memorandum).
7. Based on this information, an
undercover company, IMC Global (‘‘IMC’’)
sent a facsimile to CIC dated July 24, 2002.
The facsimile stated that Cooper had
forwarded CIC’s bid request to IMC for
further action. (Exhibit G, BIS
Memorandum).
8. The facsimile provided that the spare
parts concerned two compressors, serial
numbers X0–0484, and 85, located in the
Islamic Republic of Iran. IMC stated,
‘‘Unfortunately, Cooper cannot sell these
items directly to you once they know that
they are destined for Iran’’ but ‘‘we can offer
you these items as a domestic US sale * * *
and will only ship to a company in the
United States.’’ (Exhibit G, BIS
Memorandum).
9. As represented by BIS, the potential sale
of the spare compressor parts was
‘‘aggressively pursued’’ by CIC, which
eventually led to the arrest and subsequent
conviction of a CIC representative in
connection with this matter. (Exhibit B, BIS
Memorandum).
10. No authorization was obtained from the
United States Government to allow the
export of the spare parts to Iran. (Exhibit K,
BIS Memorandum).
The Relation Between Petrochemical, CIC,
and the Islamic Republic of Iran
11. Petrochemical Commercial Company,
Ltd. is registered and domiciled in the United
Kingdom and ‘‘provide procurement and
shipping services to all NPC [National
Petrochemical Company] organization,
namely, Iranian petrochemical companies
and complexes * * *’’ (Exhibit L, BIS
Memorandum, Answer at 4).
12. Petrochemical is a ‘‘subsidiary’’ of the
National Petrochemical Company which
itself is a subsidiary of the Iranian Petroleum
Ministry owned by the Islamic Republic of
Iran. (Exhibit C, L, & M, BIS Memorandum).
13. Tabriz Petrochemical Company of Iran
(‘‘Tabriz’’) is a ‘‘producing company’’ that is
also a subsidiary of the NPC. (Exhibit C, BIS
Memorandum).
14. On or about July 11, 2002,
Petrochemical originated the transaction at
issue by forwarding a request from Tabriz to
CIC seeking quotations for spare parts (bull
gear and shaft, and rotor assemblies)
associated with ‘‘Joy compressors.’’ (Exhibit
H & K, BIS Memorandum, Answer Appendix
2).
15. By letter dated August 27, 2002, CIC
provided Petrochemical with price
quotations for the requested parts. In that
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letter, the stated country of origin for the
listed spare parts was the ‘‘USA.’’ (Exhibit I,
BIS Memorandum).
16. By facsimile dated September 26, 2002,
Petrochemical received confirmation from
Tabriz regarding Petrochemical’s offer for
CIC’s procurement of the spare compressor
parts. (Exhibit J, BIS Memorandum).
17. Petrochemical was fully aware of the
United States embargo on trade with Iran and
also knew that the United States Government
had not authorized the export of parts in
question.6 (Exhibit K, BIS Memorandum).
Ultimate Findings of Fact and Conclusions of
Law
1. Petrochemical Commercial Company,
Ltd. and the subject matter of this case are
properly within the jurisdiction of the
Bureau of Industry and Security in
accordance with the Export Administration
Act of 1979 (50 U.S.C. App. 2401–20) and the
Export Administration Regulations (15 CFR
parts 730–774).
2. The Bureau of Industry and Security has
established by preponderance of the evidence
that Respondent violated 15 CFR 764.2(b) by
aiding and abetting in the solicitation of an
unlicensed export to the Islamic Republic of
Iran.
3. The Bureau of Industry and Security
proposed civil penalty assessment for the
denial of export privileges against
Petrochemical Commercial Company, Ltd. for
the period of three (3) years is justified and
reasonable.
Discussion
The Export Administration Act and
supporting Export Administration
Regulations provide extensive and broad
authority for the control of exports from the
United States to foreign countries. See In the
Matter of: Abdulamir Madhi, et al., 68 FR
57406, (October 3, 2003); see also 50 U.S.C.
App. 2402(92)(A), 2404(a)(1) and 2405(a)(1).
Also, the President of the United States
provides additional authority and explicit
controls with regard to exports to Islamic
Republic of Iran. In 1987, the President
invoked import sanctions against Iran by
issuance of an Executive Order which in
general prohibits the export of any goods,
technology, or services from the United
States to Iran without express authorization.
See Exec. Order No. 12613, reprinted in 52
FR 41940 (Oct. 30, 1987); see also Exec.
Order No. 12959, reprinted in 60 FR 24757
(May 6, 1995) (expanding sanctions imposed
against Iran); Exec. Order No, 12957,
reprinted in 60 FR 14615 (Mar. 15, 1995)
(declaring actions and policies with respect
to the Iranian Government to be a national
emergency); see also 31 CFR 560.204,
560.501.
The burden in this Administrative
Proceeding lies with the Bureau of Industry
and Security to prove the charged violation
by the preponderance of the evidence. The
preponderance of evidence standard is
demonstrated by reliable, probative, and
substantial evidence. See Steadman v. S.E.C.,
450 U.S. 91, 102 (1981). The Agency, in
6 No OFAC license was obtained for the proposed
export as the purported buyer was apprehended
before any license could be applied for.
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simple terms, must demonstrate ‘‘that the
existence of a fact is more probable than it
nonexistence.’’ Concrete Pipe and Products
v. Construction Laborers Pension Trust, 508
U.S. 602, 622 (1993).
In this matter, Petrochemical is charged
with aiding and abetting the solicitation of an
attempted unauthorized export. As a general
rule, ‘‘No person may engaged in any
conduct prohibited by or contrary to * * *
any conduct required by, the EAA, the EAR
* * * .’’ 15 CFR 764.2(a). It is a violation of
the EEA and the EAR to solicit or attempt a
violation of the rules. Id. at § 764.2(c). As
charged in this matter, ‘‘No person may cause
or aid, abet, counsel, command, induce,
procure, or permit the doing of any act
prohibited, or the omission of any act
required, by the EAA, the EAR, or any order,
license or authorization issued thereunder.’’
Id. at § 764.2(b).
The term ‘‘Export means an actual
shipment or transmission of items subject to
the EAR from the United States * * *.’’ Id.
at § 734.3(b)(1). In this case, an actual export
did not occur as CIC was thwarted in its bid
to carry out the unauthorized export of the
spare parts in question. However, as
indicated above, it remains a violation to
attempt an unauthorized export in
contravention of the rules.
BIS has jurisdiction for all items ‘‘subject
to the EAR,’’ which generally can be found
listed on the Commerce Control List (CCL).
However, ‘‘For ease of reference and
classification purposes, items subject to the
EAR which are not listed on the CCL are
designated as ‘EAR99.’ ’’ Id. at § 734.3(c). The
spare parts at issue are classified as
‘‘EAR99’’, see Exhibit A, BIS Memorandum,
and are ‘‘subject to the EAR’’ pursuant to 15
CFR 734.3(c). It is also important to note that
the rules provide that a person, whether or
not she or he is complying with foreign laws
or regulations ‘‘is not relieved of the
responsibility of complying with U.S. laws
and regulations, including the EAR.’’ Id. at
§ 734.12.
Upon review of Respondent’s Statement of
Answer and the record taken as a whole, the
basic tenant argued to by Respondent is that
Petrochemical only acted as an agent with no
liability or responsibility in the procurement
of items for CIC. Petrochemical argues that
CIC, ‘‘as exporter of the materials’’ was
responsible ‘‘for all required export customs,
formalities, and obtaining all necessary
permits for the shipment.’’ Petrochemical
further asserts that BIS lacks jurisdiction as
it is a private company incorporated and
domiciled under the laws of the United
Kingdom. Finally, Petrochemical attempts to
apply criminal elements to this
administrative proceeding by arguing that it
lacked the requisite intent or ‘‘mens rea’’
necessary to commit the charged violation.
I find that Petrochemical’s Answer to be
unavailing and lacking legal foundation.
Given the regulations and statements of law,
including the findings of fact as provided
above, Petrochemical was involved in the
solicitation process with CIC that resulted in
the failed attempt to procure unauthorized
spare parts that were subject to the EAR, for
shipment from the United States to Iran.
Certainly, Petrochemical cannot argue
VerDate jul<14>2003
18:03 May 05, 2005
Jkt 205001
otherwise. The August 27, 2002 quotation
from CIC to Petrochemical clearly indicated
the country of origin as the ‘‘USA.’’ See
Exhibit I, BIS Memorandum. Petrochemical’s
argument that it was not aware of, or did not
order, procure or attempt to procure any
spare parts from the United States because it
was dealing strictly with CIC, a European
country, is nothing more than a veiled
attempt to circumvent the exports laws of the
United States.
Further, it is clear that Petrochemical
cannot shield itself from the EAA or EAR by
the simple fact that it is a United Kingdom
corporation, see In the Matter of Abdulamir
Madhi, et al., 68 FR 57406 (October 3, 2003);
15 CFR 734.12, and that intent, criminal or
otherwise, is an element with regard to the
Charge brought in this matter. See In the
matter of: Aluminum Company of America,
64 FR 42641–42651 (Aug. 5, 1999) (finding
that ‘‘liability and administrative sanctions
are imposed on a strict liability basis once
the Respondent commits the proscribed act’’)
Iran Air v. Kugelman, 996 F.2d 1253 (D.C.
Cir. 1993) (reaffirming the Agency’s position
that knowledge is not an ‘‘essential element
of proof for the imposition of civil
penalties’’). In the Agency’s Memorandum of
Proposed Findings of Fact and Conclusions
of Law, it stated, ‘‘to prove that
[Petrochemical] committed a violation of
Section 764.2(b), BIS need not prove intent
or knowledge. Rather, BIS must prove that:
(1) the items in question were subject to the
Regulations, (2) a proposed transaction in
violation of the Regulations was solicited,
and (3) [Petrochemical] aided such
solicitation.’’ I agree with the Agency’s
analysis and hold that the Charge for the
violation of 15 CFR 764.2(b) is hereby found
PROVED by the preponderance of the
evidence as contained in the written record.
Petrochemical forwarded the bid for the
procurement of compressor spare parts that
were subject to the EAR and aided and
abetted CIC in the unlawful solicitation for
an attempted and unauthorized export of
U.S. origin equipment to Iran.
Basis of Sanction
The Bureau of Industry and Security has
authority to assess civil penalties and to issue
suspensions from practice, including the
denial of export privileges before the
Department of Commerce. See 15 CFR 764.3.
Here, BIS recommends a three (3) year period
of denial of export privileges be assessed
against Petrochemical for its unlawful
conduct in this matter. BIS argues that
Petrochemical disregarded U.S. export laws
and regulations with the knowledge that a
major embargo existed between the United
States and Iran.
The record shows that Petrochemical know
that U.S. Government authorization had not
been given for the transaction at issue. BIS
notes that employees of CIC, in connection
with this transaction, accepted settlement
agreements that resulted in the assessment of
denial privileges ranging from five (5) to
fifteen (15) years. BIS proposes that a three
(3) year period for the denial of export
privileges for Petrochemical is appropriate
and is consistent with other cases of this
nature. See In the Matter of: Arian
PO 00000
Frm 00026
Fmt 4703
Sfmt 4703
Transportvermittlungs Gmbh, 69 FR 28120,
(May 18, 2004) (assessing a ten (10) year
denial period in connection with an Iranian
transaction); In the Matter of: Abdulamir
Madhi, et al, 68 FR 57406, (October 3, 2003)
(assessing a twenty (20) year denial period in
connection with an Iranian transaction); In
the Matter of: Jubal Damavand General
Trading Co., 67 FR 32009, (May 13, 2002)
(assessing a ten (10) year denial period in
connection with an Iranian transaction).
Without any countervailing evidence to the
contrary, I agree with the Agency’s proposed
assessment and hold that a three (3) year
period for the denial of export privileges
against Petrochemical is reasonable and
justified.
[‘‘Recommended Order’’ Section—Redacted]
This Recommended Decision and Order is
being referred to the Under Secretary for
review and final action by express mail as
provided under 15 CFR 766.17(b)(2). Due to
the short period of time for review by the
Under Secretary, all papers filed with the
Under Secretary in response to this
Recommended Decision and Order must be
sent by personal delivery, facsimile, express
mail, or other overnight carrier as provided
in § 766.22(a). Submissions by the parties
must be filed with the Under Secretary for
Export Administration, Bureau of Industry
and Security, U.S. Department of Commerce,
Room H–3808, 14th Street and Constitution
Avenue, NW., Washington, DC 20230, within
twelve (12) days from the date of issuance of
this Recommended Decision and Order.
Thereafter, the parties have eight (8) days
from receipt of any response(s) in which to
submit replies.
Within thirty (30) days after receipt of this
Recommended Decision and Order, the
Under Secretary shall issue a written order,
affirming, modifying or vacating the
Recommended Decision and Order. See
§ 766.22(c). A copy of the agency regulations
for Review by the Under Secretary is
attached.
Done and dated this 30th day of March,
2005 at New York, New York.
Walter J. Brudzinski,
Administrative Law Judge, U.S. Coast Guard.
Certificate of Service
I hereby certify that I have served the
foregoing RECOMMENDED DECISION &
ORDER by Federal Express to the following
persons.
Under Secretary for Export Administration,
Bureau of Industry and Security, U.S.
Department of Commerce, Room H–3839,
14th & Constitution Avenue, NW.,
Washington, DC 20230, Phone: 202–482–
5301.
Philip K. Ankel, Esq., Office of Chief Counsel
for Industry and Security, U.S. Department
of Commerce, Room H–3839, 14th Street &
Constitution Avenue, NW., Washington,
DC 20230, Phone (202) 482–5301,
Facsimile: (202) 482–0085, (via Federal
Express).
Petrochemical Commercial Co., Ltd., Attn: M.
Beirami, NIOC House, 4 Victoria Street,
London, UK SWIH One, Phone: 020 7799
1717, Facsimile: 020 7233 0024, (via
Federal Express—International).
E:\FR\FM\06MYN1.SGM
06MYN1
Federal Register / Vol. 70, No. 87 / Friday, May 6, 2005 / Notices
ALJ Docketing Center, Baltimore, 40 S. Gay
Street, Room 412, Baltimore, Maryland
21202–4022, Phone: 410–962–7434.
Done and dated this 30th day of March,
2005, at New York, New York,
Done and dated this 30th day of March
2005, at New Udate Dated:
Shaniqua Jenkins,
Paralegal Specialist to the Administrative Law
Judge.
[FR Doc. 05–9118 Filed 5–5–05; 8:45 am]
BILLING CODE 3510–33–M
DEPARTMENT OF COMMERCE
International Trade Administration
A–570–848
Freshwater Crawfish Tail Meat from the
People’s Republic of China: Initiation
of New Shipper Antidumping Duty
Reviews
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: In March 2005, the
Department of Commerce (‘‘the
Department’’) received three requests to
conduct new shipper reviews of the
antidumping duty order on freshwater
crawfish tail meat from the People’s
Republic of China (‘‘PRC’’). We have
determined that each of these requests
meet the statutory and regulatory
requirements for the initiation of a new
shipper review.
EFFECTIVE DATE: May 6, 2005.
FOR FURTHER INFORMATION CONTACT: Scot
Fullerton at (202) 482–1386 or Kristina
Boughton at (202) 482–8173; AD/CVD
Operations, Office 9, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW., Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
AGENCY:
Background
The Department received timely
requests from Shanghai Sunbeauty
Trading Co., Ltd., (‘‘Shanghai
Sunbeauty’’) (March 18, 2005), Jiangsu
Jiushoutang Organisms–Manufactures
Co., Ltd., (‘‘Jiangsu JOM’’) (March 18,
2005), and Qingdao Wentai Trading Co.,
Ltd., (‘‘Qingdao Wentai’’) (March 21,
2005) in accordance with 19 CFR
351.214 (c), for new shipper reviews of
the antidumping duty order on
freshwater crawfish tail meat from the
PRC, which has a March semiannual
anniversary month. Jiangsu JOM
identified itself as the producer and
exporter of freshwater crawfish tail
meat. Shanghai Sunbeauty identified
itself as the exporter and Wuwei Xinhua
VerDate jul<14>2003
18:03 May 05, 2005
Jkt 205001
Food Co., Ltd., (‘‘Wuwei Xinhua’’) as
the producer of subject merchandise.
Qingdao Wentai identified itself as the
exporter and Nanxian Shunxiang
Aquatic Food Products Co., Ltd., as the
producer of subject merchandise. As
required by 19 CFR 351.214(b)(2)(i), and
(iii)(A), Shanghai Sunbeauty, Jiangsu
JOM, and Qingdao Wentai certified that
they did not export freshwater crawfish
tail meat to the United States during the
period of investigation (‘‘POI’’), and that
each company has never been affiliated
with any exporter or producer which
exported freshwater crawfish tail meat
to the United States during the POI.
Furthermore, Shanghai Sunbeauty,
Jiangsu JOM, and Qingdao Wentai have
also certified that their export activities
are not controlled by the central
government of the PRC, satisfying the
requirements of 19 CFR
351.214(b)(2)(iii)(B). Pursuant to 19 CFR
351.214(b)(2)(iv), Shanghai Sunbeauty,
Jiangsu JOM, and Qingdao Wentai
submitted documentation establishing
the date on which the subject
merchandise was first entered for
consumption in the United States, the
volume of that first shipment and any
subsequent shipments, and the date of
the first sale to an unaffiliated customer
in the United States. The Department
conducted Customs database queries to
confirm that each company’s shipment
had officially entered the United States
via assignment of an entry date in the
Customs database by U.S. Customs and
Border Protection (‘‘CBP’’).
Initiation of Reviews
In accordance with section
751(a)(2)(B) of the Tariff Act of 1930
(‘‘the Act’’), as amended, and 19 CFR
351.214(d)(1), and based on information
on the record, we are initiating new
shipper reviews for Shanghai
Sunbeauty, Jiangsu JOM, and Qingdao
Wentai. See Memoranda to the File
through James C. Doyle, ‘‘New Shipper
Initiation Checklist,’’ all dated April 29,
2005. We intend to issue the
preliminary results of this review not
later than 180 days after the date on
which this review was initiated, and the
final results of this review within 90
days after the date on which the
preliminary results were issued.
Pursuant to 19 CFR
351.214(g)(1)(i)(B), the period of review
(‘‘POR’’) for a new shipper review,
initiated in the month immediately
following the semiannual anniversary
month, will be the six-month period
immediately preceding the semiannual
anniversary month. Therefore, the POR
for the new shipper reviews of Shanghai
Sunbeauty, Jiangsu JOM, and Qingdao
PO 00000
Frm 00027
Fmt 4703
Sfmt 4703
23987
Wentai will be September 1, 2004,
through February 28, 2005.
It is the Department’s usual practice
in cases involving non-market
economies to require that a company
seeking to establish eligibility for an
antidumping duty rate separate from the
country-wide rate provide evidence of
de jure and de facto absence of
government control over the company’s
export activities. Accordingly, we will
issue questionnaires to Shanghai
Sunbeauty, Jiangsu JOM, and Qingdao
Wentai, including a separate rates
section. The reviews will proceed if the
responses provide sufficient indication
that Shanghai Sunbeauty, Jiangsu JOM,
and Qingdao Wentai are not subject to
either de jure or de facto government
control with respect to their exports of
freshwater crawfish tail meat. However,
if the exporter does not demonstrate the
company’s eligibility for a separate rate,
then the company will be deemed not
separate from the PRC-wide entity,
which exported during the POI and its
new shipper review will be rescinded.
See, 19 CFR 251.214(2)(iii)(A), see also
Notice of Preliminary Results of
Antidumping Duty New Shipper Review
and Rescission of New Shipper Reviews:
Freshwater Crawfish Tail Meat from the
People’s Republic of China, 69 FR 53669
(September 2, 2004) and Brake Rotors
From the People’s Republic of China:
Rescission of Second New Shipper
Review and Final Results and Partial
Rescission of First Antidumping Duty
Administrative Review, 64 FR 61581
(November 12, 1999). In accordance
with section 751(a)(2)(B)(iii) of the Act
and 19 CFR 351.214(e), we will instruct
CBP to allow, at the option of the
importer, the posting, until the
completion of the review, of a single
entry bond or security in lieu of a cash
deposit for certain entries of the
merchandise exported by either
Shanghai Sunbeauty, Jiangsu JOM, or
Qingdao Wentai. We will apply the
bonding option under 19 CFR
351.107(b)(1)(i) only to entries from
these three exporters for which the
respective producers under review are
the suppliers. Interested parties that
need access to proprietary information
in these new shipper reviews should
submit applications for disclosure under
administrative protective orders in
accordance with 19 CFR 351.305 and
351.306. This initiation and notice are
in accordance with section 751(a) of the
Act (19 U.S.C. 1675(a)) and 19 CFR
351.214(d).
E:\FR\FM\06MYN1.SGM
06MYN1
]]>Agencies
[Federal Register Volume 70, Number 87 (Friday, May 6, 2005)]
[Notices]
[Pages 23983-23987]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-9118]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
[Docket No. 04-BIS-10]
In the Matter of: Petrochemical Commercial Co. Ltd., NIOC House,
4 Victoria Street, London, UK SW1H One, Respondent; Decision and Order
On March 31, 2004, the Bureau of Industry and Security (``BIS'')
filed a charging letter against the respondent, Petrochemical
Commercial Co. (UK) Ltd. (``PCC''), that alleged one violation of
Section 764.2(b) of the Export Administration Regulations
(Regulations),\1\ which were issued under the Export Administration Act
of 1979, as amended (50 U.S.C. app. 2401-2420 (2000)) (``Act'').\2\
---------------------------------------------------------------------------
\1\ The violation charged occurred in 2002. The Regulations
governing the violations at issue are found in the 2002 version of
the Code of Federal Regulations (15 CFR Parts 730-774 (2002)). The
2005 Regulations establish the procedures that apply to this matter.
\2\ From August 21, 1994 through November 12, 2000, the Act was
in lapse. During that period, the President, through Executive Order
12924, which had been extended by successive Presidential Notices,
the last of which was August 3, 2000 (3 CFR, 2000 Comp. 397 (2001)),
continued the Regulations in effect under the International
Emergency Economic Powers Act (50 U.S.C. 1701-1706 (2000)) (IEEPA).
On November 13, 2000, the Act was reauthorized by Pub. L. 106-508
(114 Stat. 2360 (2000)) and it remained in effect through August 20,
2001. Executive Order 13222 of August 17, 2001 (3 CFR, 2001 Comp.,
p. 783 (2002)), which has been extended by successive Presidential
Notices, the most recent being that of August 6, 2004 (69 FR 48763,
August 10, 2004), continues the Regulations in effect under IEEPA.
---------------------------------------------------------------------------
Specifically, the charging letter alleged that on or about August
28, 2002, PCC, a British company, forwarded a bid by Chemical
Industries Consolidated b.v. (``CIC''), of the Netherlands, for gas
compression spare parts (``compressor parts'') to be exported from the
United States to Tabriz Petrochemical Company in Iran (``Tabriz''). CIC
was attempting to arrange for the export of the items from the United
States to Iran without authorization from the U.S. Department of
Treasury's Office of Foreign Assets Control (``OFAC'') as required by
Sec. 746.7 of the Regulations. The compressor parts are items subject
both to the Regulations and the Iranian Transactions Regulations
administered by OFAC. In forwarding the bid, BIS charged that PCC aided
the solicitation of that attempted export to Tabriz in violation of the
Regulations, thereby committing one violation of Section 746.2(b) of
the Regulations.
On May 3, 2004, PCC filed a Statement of Answer (``Answer'')
denying the formal charge. As ordered by the Administrative Law Judge
(``ALJ''), on November 8, 2004, BIS filed a Memorandum and Submission
of Evidence to Supplement the Record and, on January 18, 2005, it filed
a Memorandum of Proposed Findings of Fact and Conclusions of Law. PCC
did not submit any further filings to the ALJ.
Based on the record before it, on March 30, 2005, the ALJ issued a
Recommended Decision and Order in which he found that PCC committed the
violation described above. First, based on uncontested evidence, the
ALJ determined that CIC solicited certain compressor parts for export
to Tabriz in Iran in violation of the Regulations. On July 15, 2002,
CIC faxed a request for bid for the compressor parts to a company in
the United States, and subsequently indicated to the U.S. company that
the items were destined for Iran. A CIC representative was eventually
arrested and pled guilty to a violation of IEEPA for his attempt to
export the compressor parts to Iran in violation of the U.S. embargo on
that country. Second, also based on uncontested evidence, the ALJ
determined that PCC assisted in CIC's solicitation of the spare
compressor parts. On or about July 11, 2002, PCC originated the
transaction at issue by forwarding a request from Tabriz to CIC seeking
quotations for space parts associated with certain ``Joy compressors.''
By letter dated August 27, 2002, CIC provided PCC with price quotations
for the requested parts, indicating that the parts were of U.S.-origin.
On August 28, PCC forwarded the quotations to Tabriz, which
subsequently confirmed the transaction with PCC by facsimile. PCC
stated during the underlying administrative proceeding that it was
fully aware of the U.S. embargo on trade with Iran and also knew that
the U.S. Government had not authorized the export of the space parts in
question. In light of these facts, the ALJ held that PCC committed one
violation of Section 764.2(b) of the Regulations. He also recommended
the penalty proposed by BIS--denial of PCC's export privileges for
three years.
Pursuant to Sec. 766.22 of the Regulations, the ALJ's Recommended
Decision and Order has been referred to me for final action. Based on
my review of the entire record, I find that the record supports the
ALJ's findings of fact and conclusions of law regarding the above-
referenced charge. I also find that the penalty recommended by the ALJ
is appropriate give the nature of the violation and the importance of
preventing future unauthorized exports to Iran, a country against which
the United States maintains an economic embargo because of its support
for international terrorism. In light of these circumstances, I affirm
the findings of fact and conclusions of law of the ALJ's Recommended
Decision and Order.
It is hereby ordered,
First, that, for a period of three years from the date on which
this Order takes effect, Petrochemical Commercial Company (UK) Ltd.
(``PCC''), NIOC House, 4 Victoria Street, London, UK SW1H One, and all
of its successors or
[[Page 23984]]
assigns, and when acting for or on behalf of PCC, its officers,
representatives, agents, and employees (individually referred to as ``a
Denied Person''), 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 Regulations, or
in any other activity subject to the Regulations, including, but no
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 Regulations, or in any other
activity subject to the Regulations; or
C. Benefiting in any way from any transaction involving any item
exported or to be exported from the United States that is subject to
the Regulations, or in connection with any other activity subject to
the Regulations.
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 Regulations:
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 Regulations 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 form a Denied Person of any item subject to
the Regulations that has been exported from the United States;
D. Obtain from a Denied Person in the United States any item
subject to the Regulations 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
Regulations that has been or will be exported from the United States
and that is owned, possessed, or controlled by a Denied Person, or
service any item, or whatever origin, that is owned, possessed, or
controlled by a Denied Person if such service involves the use of any
item subject to the Regulations 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 Regulations, any person, firm, corporation, or
business organization related to a Denied Persons 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.
Fourth, that this Order shall be served on the Denied Person and on
BIS, and shall be published in the Federal Register. In addition, the
ALJ's Recommended Decision and Order, except for the section related to
the Recommended Order, shall be published in the Federal Register.
This Order, which constitutes the final agency action in this
matter, is effective upon publication in the Federal Register.
Dated: May 2, 2005.
Peter Liehtenbaum,
Acting Under Secretary of Commerce for Industry and Security.
Recommended Decision and Order
Before:
Honorable Walter J. Brudzinski
Administrative Law Judge
United States Coast Guard
Appearances:
For the Bureau of Industry and Security
Philip K. Ankel, Esq.
Office of Chief Counsel
Bureau of Industry and Security
For the Respondent
Petrochemical Commercial Co., Ltd.
Managing Director: Mr. M. Beirami
Pro se
Preliminary Statement
On March 31, 2004, the Bureau of Industry and Security (``BIS''
or ``Agency'') filed a formal Complaint against Petrochemical
Commercial Co., Ltd., (``Petrochemical'' or ``Respondent'') charging
one count of violation of the Export Administration Regulations
(``EAR'') under 15 CFR 764.2(b). The Charging Letter asserts that on
or about August 28, 2002, Petrochemical forwarded a bid for Chemical
Industries Consolidated, b.v. (``CIC'') for the unauthorized
procurement of gas compressor parts that are subject to the EAR
concerning exports from the United States to the Islamic Republic of
Iran (``Iran''). In so doing, Petrochemical aided or abetted in the
solicitation of an unauthorized export in violation of the Export
Administration Act of 1979 (``EAA'') and the Export Administration
Regulations.\1\ See 50 U.S.C. App. 2401-20 (1991), amended by Pub.
L. 106-508, 114 Stat. 2360 (Supp. 2002); 15 CFR parts 730-774. the
EAA and its underlying regulations were created to establish a
``system of controlling exports by balancing national security,
foreign policy and domestic supply needs with the interest of
encouraging export to enhance * * * the economic well being'' of the
United States. See Times Publ'g Co. v. United States Dep't of
Commerce, 236 F.3d 1286, 1290 (11th Cir. 2001); see also 50 U.S.C.
App. 2401-02.\2\
---------------------------------------------------------------------------
\1\ Due to the nature of this transaction, the items in question
are also subject to the Iranian Transactions Regulations under the
jurisdiction of the Department of Treasury's Office of Foreign
Assets Control (OFAC).
\2\ The EAA and all regulations under it expired on August 20,
2001. See 50 U.S.C. App. 2419. Three (3) days before its expiration,
the President declared that the lapse of the EAA constitutes a
national emergency. See Exec. Order No. 13222, reprinted in 3 CFR at
783-784, (2002). Exercising authority under the International
Emergency Economic Powers Act (IEEPA), 50 U.S.C. 1701-06 (2002), the
President maintained the effectiveness of the EAA and its underlying
regulations throughout the expiration period by issuing Exec. Order
No. 13222 (Aug. 17, 2001). The effectiveness of the export control
laws and regulations were further extended by Notice issued by the
President on August 14, 2002 and August 7, 2003. See Notice of
August 14, 2002: Continuation of Emergency Regarding Export Control
Regulations, reprinted in 3 CFR at Part 306 (2003) and 68 FR 47833,
August 11, 2003. Courts have held that the continued operation and
effectiveness of the EAA and its regulations through the issuance of
Executive Orders by the President constitutes a valid exercise of
authority. See Wisconsin Project on Nuclear Arms Control v. United
States Dep't of Commerce, 317 F.3d 275, 278-79 (D.C. Cir. 2003).
---------------------------------------------------------------------------
On May 3, 2004, Petrochemical filed a Statement of Answer
(``Answer'') with documentation denying the formal charge. In its
Answer, Petrochemical did not formally demand a hearing. Therefore,
this matter was assigned to the Undersigned to render a decision on
the record pursuant to 15 CFR 766.15. BIS regulations provide that a
written demand for hearing must be expressly provided. As in this
case, Respondent's failure to formally demand a hearing is deemed a
waiver of Respondent's right to a hearing and this Recommended
Decision and Order is hereby issued on the basis of the submitted
record.\3\ See id. and Sec. 766.6(c).
---------------------------------------------------------------------------
\3\ No witness testimony was received in this proceeding. The
case Index of the official record provides the exclusive listing of
documents received in this matter. A copy of the Index is provided
as Attachment A.
---------------------------------------------------------------------------
On June 3, 2004, the undersigned issued an Order to File Briefs
directing the parties to file the necessary, ``Affidavits or
declarations, depositions, admissions, answers to interrogatories
and stipulations.'' Following the grant of several procedural stays,
the time period to file the necessary briefs was extended up to and
including, November 8, 2004. In keeping with the original time frame
associated with the June 3, 2004 Order, the parties were provided
with an opportunity to file rebuttal evidence to be due by the close
of business November 30, 2004. On November 8, 2004, BIS filed its
Memorandum and Submission of Evidence to Supplement the Record
(``BIS Memorandum'').
[[Page 23985]]
On January 3, 2005, an Order to File Pre-decisional Briefs was
issued to provide the parties with an opportunity to file any:
1. Exceptions to any ruling made by this Administrative Law
Judge or to the admissibility of evidence proffered in this matter;
2. Proposed findings of fact and conclusions of law;
3. Supporting legal arguments for the exceptions and proposed
findings and conclusions submitted; and
4. A proposed order.
On January 18, 2005, BIS filed its Memorandum of Proposed
Findings of Fact and Conclusions of Law (``Pre-decisional
Memorandum'') which also included a proposed Recommended Decision
and Order. The Pre-decisional memorandum and proposed Recommended
Decision and Order are made part of this Recommended Decision and
Order and are included by reference.\4\ As of this date, Respondent
has not filed any other documentation in this matter other than the
original Statement of Answer that was received on May 3, 2004. Given
that the parties have been provided an ample amount of time and
opportunity to supplement the record, and in keeping with the
procedures set forth in 15 CFR part 766, I find that this matter is
now ripe for decision.
---------------------------------------------------------------------------
\4\ The Agency's Proposed Findings of Fact and Conclusions of
Law are ACCEPTED and INCORPORATED.
---------------------------------------------------------------------------
For the reasons that follow, I hereby find that the Bureau of
Industry and Security has met its burden as shown in the written
record by the preponderance of substantial, reliable, and probative
evidence in that Petrochemical Commercial Co., Ltd. aided and
abetted in the solicitation of an unlicensed export to the Islamic
Republic of Iran in violation of 49 CFR 764.2(b).
Findings of Fact
The Underlying Solicitation \5\
1. On July 15, 2005, Chemical Industries Consolidated, b.v.
(``CIC'') a company registered and located in the Dutch Netherlands
made an inquiry addressed to ``Joy Compressor'' for a quotation of
compressor spare parts. (Exhibit D, BIS Memorandum).
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\5\ The citations provided hereunder reference the exhibit
numbers associated with the Agency's Memorandum and Submission of
Evidence to Supplement the Record (``BIS Memorandum'') and
Respondent's Statement of Answer (``Answer'').
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2. The company listed in the inquiry as ``Joy Compressor'' and
as referenced by the facsimile number and subsequent documentation
was Cooper Turbocompressor, Inc. (``Cooper''), a United States
company located in Buffalo, New York. (Exhibit D & F, BIS
Memorandum).
3. Upon receipt of the request, Cooper then requested further
information from CIC and specifically, sought the serial numbers of
the affected compressors. On July 23, 2002, CIC forwarded this
information by facsimile to Cooper. (Exhibit E, BIS Memorandum).
4. Cooper verified that the serial numbers were registered to
compressors; model TAQ-70M4C/30 that are located in Iran at Tabriz
Petrochemical. (Exhibit E & G BIS Memorandum, Answer Appendix 2).
5. The spare parts and specifically the rotors listed in the
inquiry request are classified under the title of ``EAR99,'' which
in turn are subject to review under the Export Administration
Regulations for both, the Department of Treasury's Office of Foreign
Assets Control (``OFAC'') and the Bureau of Industry and Security.
(Exhibit A, BIS Memorandum).
6. The Export and Anti-boycott Coordinator from Cooper notified
the Office of Export Enforcement regarding CIC's inquiry for the
compressor parts. The destination for the listed parts was the
Islamic Republic of Iran. (Exhibit F, BIS Memorandum).
7. Based on this information, an undercover company, IMC Global
(``IMC'') sent a facsimile to CIC dated July 24, 2002. The facsimile
stated that Cooper had forwarded CIC's bid request to IMC for
further action. (Exhibit G, BIS Memorandum).
8. The facsimile provided that the spare parts concerned two
compressors, serial numbers X0-0484, and 85, located in the Islamic
Republic of Iran. IMC stated, ``Unfortunately, Cooper cannot sell
these items directly to you once they know that they are destined
for Iran'' but ``we can offer you these items as a domestic US sale
* * * and will only ship to a company in the United States.''
(Exhibit G, BIS Memorandum).
9. As represented by BIS, the potential sale of the spare
compressor parts was ``aggressively pursued'' by CIC, which
eventually led to the arrest and subsequent conviction of a CIC
representative in connection with this matter. (Exhibit B, BIS
Memorandum).
10. No authorization was obtained from the United States
Government to allow the export of the spare parts to Iran. (Exhibit
K, BIS Memorandum).
The Relation Between Petrochemical, CIC, and the Islamic Republic
of Iran
11. Petrochemical Commercial Company, Ltd. is registered and
domiciled in the United Kingdom and ``provide procurement and
shipping services to all NPC [National Petrochemical Company]
organization, namely, Iranian petrochemical companies and complexes
* * *'' (Exhibit L, BIS Memorandum, Answer at 4).
12. Petrochemical is a ``subsidiary'' of the National
Petrochemical Company which itself is a subsidiary of the Iranian
Petroleum Ministry owned by the Islamic Republic of Iran. (Exhibit
C, L, & M, BIS Memorandum).
13. Tabriz Petrochemical Company of Iran (``Tabriz'') is a
``producing company'' that is also a subsidiary of the NPC. (Exhibit
C, BIS Memorandum).
14. On or about July 11, 2002, Petrochemical originated the
transaction at issue by forwarding a request from Tabriz to CIC
seeking quotations for spare parts (bull gear and shaft, and rotor
assemblies) associated with ``Joy compressors.'' (Exhibit H & K, BIS
Memorandum, Answer Appendix 2).
15. By letter dated August 27, 2002, CIC provided Petrochemical
with price quotations for the requested parts. In that letter, the
stated country of origin for the listed spare parts was the ``USA.''
(Exhibit I, BIS Memorandum).
16. By facsimile dated September 26, 2002, Petrochemical
received confirmation from Tabriz regarding Petrochemical's offer
for CIC's procurement of the spare compressor parts. (Exhibit J, BIS
Memorandum).
17. Petrochemical was fully aware of the United States embargo
on trade with Iran and also knew that the United States Government
had not authorized the export of parts in question.\6\ (Exhibit K,
BIS Memorandum).
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\6\ No OFAC license was obtained for the proposed export as the
purported buyer was apprehended before any license could be applied
for.
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Ultimate Findings of Fact and Conclusions of Law
1. Petrochemical Commercial Company, Ltd. and the subject matter
of this case are properly within the jurisdiction of the Bureau of
Industry and Security in accordance with the Export Administration
Act of 1979 (50 U.S.C. App. 2401-20) and the Export Administration
Regulations (15 CFR parts 730-774).
2. The Bureau of Industry and Security has established by
preponderance of the evidence that Respondent violated 15 CFR
764.2(b) by aiding and abetting in the solicitation of an unlicensed
export to the Islamic Republic of Iran.
3. The Bureau of Industry and Security proposed civil penalty
assessment for the denial of export privileges against Petrochemical
Commercial Company, Ltd. for the period of three (3) years is
justified and reasonable.
Discussion
The Export Administration Act and supporting Export
Administration Regulations provide extensive and broad authority for
the control of exports from the United States to foreign countries.
See In the Matter of: Abdulamir Madhi, et al., 68 FR 57406, (October
3, 2003); see also 50 U.S.C. App. 2402(92)(A), 2404(a)(1) and
2405(a)(1). Also, the President of the United States provides
additional authority and explicit controls with regard to exports to
Islamic Republic of Iran. In 1987, the President invoked import
sanctions against Iran by issuance of an Executive Order which in
general prohibits the export of any goods, technology, or services
from the United States to Iran without express authorization. See
Exec. Order No. 12613, reprinted in 52 FR 41940 (Oct. 30, 1987); see
also Exec. Order No. 12959, reprinted in 60 FR 24757 (May 6, 1995)
(expanding sanctions imposed against Iran); Exec. Order No, 12957,
reprinted in 60 FR 14615 (Mar. 15, 1995) (declaring actions and
policies with respect to the Iranian Government to be a national
emergency); see also 31 CFR 560.204, 560.501.
The burden in this Administrative Proceeding lies with the
Bureau of Industry and Security to prove the charged violation by
the preponderance of the evidence. The preponderance of evidence
standard is demonstrated by reliable, probative, and substantial
evidence. See Steadman v. S.E.C., 450 U.S. 91, 102 (1981). The
Agency, in
[[Page 23986]]
simple terms, must demonstrate ``that the existence of a fact is
more probable than it nonexistence.'' Concrete Pipe and Products v.
Construction Laborers Pension Trust, 508 U.S. 602, 622 (1993).
In this matter, Petrochemical is charged with aiding and
abetting the solicitation of an attempted unauthorized export. As a
general rule, ``No person may engaged in any conduct prohibited by
or contrary to * * * any conduct required by, the EAA, the EAR * * *
.'' 15 CFR 764.2(a). It is a violation of the EEA and the EAR to
solicit or attempt a violation of the rules. Id. at Sec. 764.2(c).
As charged in this matter, ``No person may cause or aid, abet,
counsel, command, induce, procure, or permit the doing of any act
prohibited, or the omission of any act required, by the EAA, the
EAR, or any order, license or authorization issued thereunder.'' Id.
at Sec. 764.2(b).
The term ``Export means an actual shipment or transmission of
items subject to the EAR from the United States * * *.'' Id. at
Sec. 734.3(b)(1). In this case, an actual export did not occur as
CIC was thwarted in its bid to carry out the unauthorized export of
the spare parts in question. However, as indicated above, it remains
a violation to attempt an unauthorized export in contravention of
the rules.
BIS has jurisdiction for all items ``subject to the EAR,'' which
generally can be found listed on the Commerce Control List (CCL).
However, ``For ease of reference and classification purposes, items
subject to the EAR which are not listed on the CCL are designated as
`EAR99.' '' Id. at Sec. 734.3(c). The spare parts at issue are
classified as ``EAR99'', see Exhibit A, BIS Memorandum, and are
``subject to the EAR'' pursuant to 15 CFR 734.3(c). It is also
important to note that the rules provide that a person, whether or
not she or he is complying with foreign laws or regulations ``is not
relieved of the responsibility of complying with U.S. laws and
regulations, including the EAR.'' Id. at Sec. 734.12.
Upon review of Respondent's Statement of Answer and the record
taken as a whole, the basic tenant argued to by Respondent is that
Petrochemical only acted as an agent with no liability or
responsibility in the procurement of items for CIC. Petrochemical
argues that CIC, ``as exporter of the materials'' was responsible
``for all required export customs, formalities, and obtaining all
necessary permits for the shipment.'' Petrochemical further asserts
that BIS lacks jurisdiction as it is a private company incorporated
and domiciled under the laws of the United Kingdom. Finally,
Petrochemical attempts to apply criminal elements to this
administrative proceeding by arguing that it lacked the requisite
intent or ``mens rea'' necessary to commit the charged violation.
I find that Petrochemical's Answer to be unavailing and lacking
legal foundation. Given the regulations and statements of law,
including the findings of fact as provided above, Petrochemical was
involved in the solicitation process with CIC that resulted in the
failed attempt to procure unauthorized spare parts that were subject
to the EAR, for shipment from the United States to Iran. Certainly,
Petrochemical cannot argue otherwise. The August 27, 2002 quotation
from CIC to Petrochemical clearly indicated the country of origin as
the ``USA.'' See Exhibit I, BIS Memorandum. Petrochemical's argument
that it was not aware of, or did not order, procure or attempt to
procure any spare parts from the United States because it was
dealing strictly with CIC, a European country, is nothing more than
a veiled attempt to circumvent the exports laws of the United
States.
Further, it is clear that Petrochemical cannot shield itself
from the EAA or EAR by the simple fact that it is a United Kingdom
corporation, see In the Matter of Abdulamir Madhi, et al., 68 FR
57406 (October 3, 2003); 15 CFR 734.12, and that intent, criminal or
otherwise, is an element with regard to the Charge brought in this
matter. See In the matter of: Aluminum Company of America, 64 FR
42641-42651 (Aug. 5, 1999) (finding that ``liability and
administrative sanctions are imposed on a strict liability basis
once the Respondent commits the proscribed act'') Iran Air v.
Kugelman, 996 F.2d 1253 (D.C. Cir. 1993) (reaffirming the Agency's
position that knowledge is not an ``essential element of proof for
the imposition of civil penalties''). In the Agency's Memorandum of
Proposed Findings of Fact and Conclusions of Law, it stated, ``to
prove that [Petrochemical] committed a violation of Section
764.2(b), BIS need not prove intent or knowledge. Rather, BIS must
prove that: (1) the items in question were subject to the
Regulations, (2) a proposed transaction in violation of the
Regulations was solicited, and (3) [Petrochemical] aided such
solicitation.'' I agree with the Agency's analysis and hold that the
Charge for the violation of 15 CFR 764.2(b) is hereby found PROVED
by the preponderance of the evidence as contained in the written
record. Petrochemical forwarded the bid for the procurement of
compressor spare parts that were subject to the EAR and aided and
abetted CIC in the unlawful solicitation for an attempted and
unauthorized export of U.S. origin equipment to Iran.
Basis of Sanction
The Bureau of Industry and Security has authority to assess
civil penalties and to issue suspensions from practice, including
the denial of export privileges before the Department of Commerce.
See 15 CFR 764.3. Here, BIS recommends a three (3) year period of
denial of export privileges be assessed against Petrochemical for
its unlawful conduct in this matter. BIS argues that Petrochemical
disregarded U.S. export laws and regulations with the knowledge that
a major embargo existed between the United States and Iran.
The record shows that Petrochemical know that U.S. Government
authorization had not been given for the transaction at issue. BIS
notes that employees of CIC, in connection with this transaction,
accepted settlement agreements that resulted in the assessment of
denial privileges ranging from five (5) to fifteen (15) years. BIS
proposes that a three (3) year period for the denial of export
privileges for Petrochemical is appropriate and is consistent with
other cases of this nature. See In the Matter of: Arian
Transportvermittlungs Gmbh, 69 FR 28120, (May 18, 2004) (assessing a
ten (10) year denial period in connection with an Iranian
transaction); In the Matter of: Abdulamir Madhi, et al, 68 FR 57406,
(October 3, 2003) (assessing a twenty (20) year denial period in
connection with an Iranian transaction); In the Matter of: Jubal
Damavand General Trading Co., 67 FR 32009, (May 13, 2002) (assessing
a ten (10) year denial period in connection with an Iranian
transaction). Without any countervailing evidence to the contrary, I
agree with the Agency's proposed assessment and hold that a three
(3) year period for the denial of export privileges against
Petrochemical is reasonable and justified.
[``Recommended Order'' Section--Redacted]
This Recommended Decision and Order is being referred to the
Under Secretary for review and final action by express mail as
provided under 15 CFR 766.17(b)(2). Due to the short period of time
for review by the Under Secretary, all papers filed with the Under
Secretary in response to this Recommended Decision and Order must be
sent by personal delivery, facsimile, express mail, or other
overnight carrier as provided in Sec. 766.22(a). Submissions by the
parties must be filed with the Under Secretary for Export
Administration, Bureau of Industry and Security, U.S. Department of
Commerce, Room H-3808, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230, within twelve (12) days from the date of
issuance of this Recommended Decision and Order. Thereafter, the
parties have eight (8) days from receipt of any response(s) in which
to submit replies.
Within thirty (30) days after receipt of this Recommended
Decision and Order, the Under Secretary shall issue a written order,
affirming, modifying or vacating the Recommended Decision and Order.
See Sec. 766.22(c). A copy of the agency regulations for Review by
the Under Secretary is attached.
Done and dated this 30th day of March, 2005 at New York, New
York.
Walter J. Brudzinski,
Administrative Law Judge, U.S. Coast Guard.
Certificate of Service
I hereby certify that I have served the foregoing RECOMMENDED
DECISION & ORDER by Federal Express to the following persons.
Under Secretary for Export Administration, Bureau of Industry and
Security, U.S. Department of Commerce, Room H-3839, 14th &
Constitution Avenue, NW., Washington, DC 20230, Phone: 202-482-5301.
Philip K. Ankel, Esq., Office of Chief Counsel for Industry and
Security, U.S. Department of Commerce, Room H-3839, 14th Street &
Constitution Avenue, NW., Washington, DC 20230, Phone (202) 482-
5301, Facsimile: (202) 482-0085, (via Federal Express).
Petrochemical Commercial Co., Ltd., Attn: M. Beirami, NIOC House, 4
Victoria Street, London, UK SWIH One, Phone: 020 7799 1717,
Facsimile: 020 7233 0024, (via Federal Express--International).
[[Page 23987]]
ALJ Docketing Center, Baltimore, 40 S. Gay Street, Room 412,
Baltimore, Maryland 21202-4022, Phone: 410-962-7434.
Done and dated this 30th day of March, 2005, at New York, New
York,
Done and dated this 30th day of March 2005, at New Udate Dated:
Shaniqua Jenkins,
Paralegal Specialist to the Administrative Law Judge.
[FR Doc. 05-9118 Filed 5-5-05; 8:45 am]
BILLING CODE 3510-33-M
