In the Matter of: Micei International, Respondent; Final Decision and Order, 24788-24796 [E9-11885]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Industry and Security

[Federal Register Volume 74, Number 99 (Tuesday, May 26, 2009)]
[Notices]
[Pages 24788-24796]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-11885]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[08-B IS-0005]


In the Matter of: Micei International, Respondent; Final Decision 
and Order

    This matter is before me upon a Recommended Decision and Order 
(``RDO'') of an Administrative Law Judge (``ALJ''), as further 
described below.
    In a charging letter filed on July 1, 2008, and amended on January 
9, 2009, the Bureau of Industry and Security (``BIS'') alleged that 
Respondent Micei International (``Micei'') committed fourteen 
violations of the Export Administration Regulations (currently codified 
at 15 CFR Parts 730-774 (2009) (``Regulations'')), issued pursuant to 
the Export Administration Act of 1979, as amended (50 U.S.C. app. 2401-
2420) (the ``EAA'' or ``Act''),1 stemming from its knowing 
participation in seven export transactions using an individual subject 
to a Denial Order as an employee or agent to negotiate for and/or 
purchase items in the United States for export from the United States 
to Micei in Macedonia. The charges are as follows:
    1. Since August 21, 2001, the Act has been in lapse, and the 
President, through Executive Order 13,222 of August 17, 2001 (3 CFR, 
2001 Comp. 783 (2002)), which has been extended by successive 
Presidential Notices, the most recent being that of July 23, 2008 (73 
FR 43,603, July 25, 2008), has continued the Regulations in effect 
under the International Emergency Economic Powers Act (50 U.S.C. 1701-
1707).

Charges 1-7; 15 CFR 764.2(b): Causing, Aiding, Abetting, Inducing and/
or Permitting a Violation of a Denial Order

    As described in further detail in the attached schedule of 
violations, which is incorporated herein by reference, on seven 
occasions between on or about July 2, 2003, and on or about October 8, 
2003, Micei caused, aided, abetted, induced and/or permitted acts 
prohibited by the Regulations, namely, the violations by Yuri 
Montgomery (``Montgomery'') of a BIS order denying Montgomery's export 
privileges under Section 766.25 of the Regulations (the ``Denial 
Order''). Specifically, Micei authorized, requested, and/or arranged 
for Montgomery to negotiate for and/or make certain purchases for or on 
behalf of Micei of items subject to the Regulations for export from the 
United States to Micei in Macedonia. To further facilitate these 
purchases, Micei also contacted Montgomery and provided information on 
the items to be ordered and their approximate cost, and identified the 
vendors from which to order them. With Micei's knowledge and/or 
permission, Montgomery operated or held himself out as Micei's employee 
or agent, including indicating in an e-mail to a U.S. supplier that 
Micei had a U.S. regional office in Seattle, Washington, where 
Montgomery was located, and that Micei was interested in forming a 
distributorship relationship with the supplier. That e-mail was copied 
to Micei's president and signed by Montgomery with ``Micei Int'l 
Reg[ional] Off[ice].'' As part of these actions, Montgomery carried on 
negotiations concerning, ordered, bought, sold and/or financed various 
items that were subject to the Regulations and were exported or to be 
exported from the United States to Micei in Macedonia, and Montgomery 
benefitted from these transactions, in violation of the Denial Order.
    The Denial Order is dated September 11, 2000, and was published in 
the Federal Register on September 22, 2000 (65 FR 57,313). Under the 
terms of the Denial Order, Montgomery ``may not directly or indirectly, 
participate in any way in 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, 
including [c]arrying 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 * * * [b]enefitting 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 any other 
activity subject to the Regulations.'' The Denial Order is effective 
until January 22, 2009, and continued in force at the time of the 
aforementioned actions. In so doing, Micei committed seven violations 
of Section 764.2(b) of the Regulations.

[[Page 24789]]

Charges 8-14; 15 CFR 764.2(e): Acting with Knowledge of a Violation

    As described in further detail in the attached schedule of 
violations, which is incorporated herein by reference, on seven 
occasions between on or about July 2, 2003 and on or about October 8, 
2003, Micei ordered, bought, sold, used and/or financed various items 
subject to the Regulations with knowledge that violations of an order 
issued under the Regulations had occurred, was about to occur, or was 
intended to occur in connection with the items, namely, the violations 
by Yuri Montgomery (``Montgomery'') of a BIS order denying Montgomery's 
export privileges under Section 766.25 of the Regulations (the ``Denial 
Order''). Operating as Micei's employee or agent or otherwise for or on 
its behalf during these transactions, Montgomery carried on 
negotiations concerning, ordered, bought, sold and/or financed various 
items that were subject to the Regulations and were exported or to be 
exported from the United States to Micei in Macedonia, and also 
benefitted from these transactions, in violation of the Denial Order. 
The Denial Order is dated September 11, 2000, and was published in the 
Federal Register on September 22, 2000 (65 FR 57,313). At the time of 
these actions, Montgomery's export privileges were denied by the Denial 
Order. Micei knew that Montgomery was subject to the Denial Order 
because, inter alia, on November 6 and 13, 2003, Iii Malinkovski, then 
identified as a vice president of Micei, told BIS Special Agents that 
he was aware of the Denial Order on Montgomery and that Montgomery was 
subject to the Denial Order until January 2009. In so doing, Micei 
committed seven violations of Section 764.2(e) of the Regulations.

January 9, 2009; Amended Charging Letter at 1-2

    In sum, Charges 1-7 alleged that on seven occasions between on or 
about July 2, 2003 and on or about October 8, 2003, Micei caused, 
aided, abetted and/or induced violations of a BIS denial order in 
violation of Section 764.2(b); in connection with those same 
transactions and items, Charges 8-14 allege that, in violation of 
Section 764.2(e), Micei acted with knowledge that the violations of the 
denial order had occurred, were about to occur, or were intended to 
occur.
    The Respondent filed a lengthy motion to dismiss on September 17, 
2008, which raised several jurisdictional challenges, including whether 
the Regulations were in effect at the time of the violations and 
whether the Regulations apply extraterritorially. After briefing on the 
motion was completed, in an order dated December 22, 2008, the ALJ 
ruled that a motion to dismiss is not provided for in the Regulations, 
but gave the Respondent the benefit of the doubt and reviewed the 
motion as if it were a motion for summary decision, which is provided 
for by Section 766.8 of the Regulations. ALJ Order Denying Motion To 
Dismiss; RDO at 4-5. The ALJ ruled that the motion was without merit 
and did not meet the requirements for summary decision under Section 
766.8 of the Regulations, and set a deadline of January 12, 2009 for 
the Respondent to file an answer. Id.
    On January 9, 2009, BIS filed an amended Charging Letter that was 
served by Federal Express, registered mail, fax, and e-mail, which 
under the Regulations extended Respondent's time to answer arguably 
until February 12, 2009 (pursuant to the delivery by Federal Express), 
and certainly no later than February 19, 2009 (pursuant to the 
registered mail delivery). This amendment included limited additional 
allegations concerning the same transactions, items, and violations as 
alleged in the initial Charging Letter 2.
    2. The items involved in the transactions were as follows: boots in 
Charges 1 and 8; firing range clearing devices in Charges 2 and 9; 
boots in Charges 3 and 10; shoes and remote strobe tubes in Charges 4 
and 11; shirts in Charges 5 and 12; a load binder, ratchet strap, 
binder chain and safety shackle in Charges 6 and 13; and the items in 
order number 25473620/017 in Charges 7 and 14.
    Respondent did not file anything further until February 23, 2009, 
when it filed not an answer, but what it styled a motion for a more 
definite statement. BIS filed a motion for a default order on March 24, 
2009, arguing that Respondent had not filed an answer within the time 
provided by the Regulations (and the ALJ's Order Denying Motion To 
Dismiss), and had waived its right to contest the allegations pursuant 
to Section 766.7 of the Regulations. Although BIS is not required under 
Section 766.7 to give notice of its motion for default order, BIS 
served its motion (and opposition to Respondent's motion for a more 
definite statement) by Federal Express, fax, and e-mail.
    Respondent has not filed an answer to the amended Charging Letter 
dated January 9, 2009, and did not file an answer to the initial 
Charging Letter dated July 1, 2008. It also did not respond to BIS's 
motion for default order.
    On April 14, 2009, the ALJ issued the RDO, denying Respondent's 
motion for a more definite statement and granting BIS's motion for a 
default order. Even though the ALJ did not specifically state that the 
Regulations provide for the filing of a motion for a more definite 
statement, the Regulations do not, in fact, provide for such a motion, 
just as they do not provide for a motion to dismiss. 15 CFR Part 766; 
In the Matter of Yuri Montgomery, ALJ Brudzinski's Order Denying 
Respondent's Motion for More Definite Statement at 6 (March 23, 2009) 
(``The regulations at 15 CFR Part 766 do not provide for motions for a 
more definite statement or for hearings thereon.''). Further, the 
Respondent's motion was frivolous in that the Charging Letter clearly 
met all of the requirements of Section 766.3 of the Regulations, 
including setting forth the essential facts about the alleged 
violations, referring to the specific regulatory and other provisions 
involved, and giving notice of the available sanctions. 15 CFR 
766.3(a). The Respondent's motion for a more definite statement was, in 
fact, just another vehicle through which Respondent sought to avoid 
answering the charges, and instead repeated the arguments put forth in 
its motion to dismiss, which had previously been denied. The ALJ 
determined that the Respondent ``ha[d] been given several opportunities 
to participate in the process'' and contest the charges in this matter, 
but had demonstrated ``a pattern of declining to file an answer.'' RDO 
at 12.
    3. Under the Federal Rules of Civil Procedure, Federal courts will 
only grant such a motion when the complaint is ``so vague or ambiguous 
that a party cannot reasonably prepare a response.'' Fed. R. Civ. P. 
12(e); Brown v. Aramark Corp., 591 F. Supp. 2d 68 at 76 n. 5 (D.D.C. 
2008) (the basis for granting a motion for a more definite statement 
under Rule 12(e) is ``unintelligibility, not mere lack of detail'').
    Pursuant to Section 766.7 of the Regulations, the ALJ found the 
facts to be as alleged in the Charging Letter and concluded that Micei 
committed seven violations of 764.2(b) when it caused, aided and 
abetted Montgomery's violations of the Denial Order as alleged in 
Charges 1-7, and committed seven violations of 764.2(e) when, as 
alleged in Charges 8-14, it acted with knowledge of those violations of 
the Denial Order. The ALJ also recommended that Micei be assessed a 
monetary penalty of $126,000 and a denial of its export privileges for 
five years, given, inter alia, that Micei deliberately participated in 
multiple

[[Page 24790]]

export transactions of items from the United States to Macedonia 
involving violations of a BIS Denial Order, and given its failure to 
contest the charged violations or meet the deadlines provided in the 
Regulations and orders issued in this matter.
    The RDO, together with the entire record in this case, has been 
referred to me for final action under Sec.  766.22 of the Regulations. 
I find that the record supports the ALJ's findings of fact and 
conclusions of law.
    In doing so, I have determined that the ALJ properly found that the 
items at issue were located in the United States and were exported or 
(on one occasion) intended to be exported from the United States to 
Micei in Macedonia. Findings of Fact, RDO at 69. The ALJ also correctly 
concluded that the items at issue are subject to the Regulations. 
Conclusions of Law, RDO at 17.
    In the Discussion section of the RDO (pages 9-16 of the RDO), the 
ALJ cited to both Sections 734.3(a)(1) (``all items in the United 
States'') and 734.3(a)(2) (``all U.S. origin items wherever located''). 
RDO at 9. In that section, the ALJ also subsequently referred to the 
items as being ``of U.S. origin.'' RDO at 10, 15. I have not determined 
as part of this decision whether the items were manufactured in the 
United States, and thus were ``of U.S. origin,'' and such a 
determination is not necessary because jurisdiction over the items is 
established in this matter under Section 734.3(a)(1), given the 
location of these items in the United States. Indeed, all of the items 
were purchased, or attempted to be purchased, in the United States for 
export from the United States to Micei in Macedonia, as found in the 
RDO. Thus, my determinations are entirely consistent with the 
allegations contained in the Charging Letter and the findings and 
conclusions contained in the RDO.
    The jurisdictional challenges raised by Respondent have been 
considered and denied in prior matters, but there is value in repeating 
the central points. The continuation of the operation and effectiveness 
of the FAA 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. U.S. Dep't of Commerce, 
317 F.3d 275, 278-79 (D.C. Cir. 2003), and Times Publ'g Co. v. U.S. 
Dep't of Commerce, 235 F.3d 1286, 1290 (11th Cir. 2001)). Therefore, as 
the ALJ stated, ``the laws and regulations underlying this enforcement 
action and the corresponding procedural requirements were in full force 
on the dates of the charged violations and have remained in effect 
pursuant to the authority exercised by the President.'' Order Denying 
Motion to Dismiss at 4.
    Respondent's arguments challenging the extraterritorial reach of 
the FAA and the Regulations may be irrelevant in light of the 
allegations of its substantial contacts with the United States, 
including those contacts carried out through Montgomery acting, with 
Micei's knowledge and permission, as Micei's employee or agent. 
Nevertheless, to the extent that this matter concerns the 
extraterritorial application of the FAA and the Regulations, the ALJ 
correctly determined that both apply to persons extraterritorial so 
long as items subject to the Regulations are involved, and regardless 
of the person's nationality or locality. RDO at 10; In the Matter of 
Mahdi, 68 FR 57406 (Oct. 3, 2003)); accord In the Matter of Petrom GmbH 
International Trade, 70 FR 32743 (June 6, 2005) and In the Matter of 
Petrochemical Commercial Co. Ltd., 71 FR 23983 (May 6, 2005). The 
Respondent is therefore subject to the Regulations based on its actions 
involving items subject to the Regulations that at the least were 
located in and purchased (or attempted to be purchased) from the United 
States and then exported from the United States to the Respondent. 
United States v. McKeeve, 131 F.3d 1 (1st Cir. 1997) (the First Circuit 
cited Section 1702(a)(1) when it rejected an extraterritorial challenge 
to an IEEPA conspiracy conviction brought by a foreign national in the 
context of a conspiracy involving foreign nationals to export computer 
equipment to Libya. The computer equipment was stored in Massachusetts 
and therefore ``unquestionably subject to the jurisdiction of the 
United States'').
    I also find that the penalty recommended by the ALJ based upon his 
review of the entire record is appropriate, given the nature of the 
violations, the facts of this case, and the importance of deterring 
future unauthorized exports or attempted exports. Micei deliberately 
participated in multiple export transactions of items from the United 
States to Macedonia involving violations of a BIS Denial Order, and its 
blatant disregard for U.S. export control laws is further highlighted 
by its conduct during this enforcement action.
    Based on my review of the entire record, I affirm the findings of 
fact and conclusions of law in the RDO.
    Accordingly, it is therefore ordered,
    First, that a civil penalty of $126,000.00 is assessed against 
Micei International, which shall be paid to the U.S. Department of 
Commerce within (30) thirty days from the date of entry of this Order.
    Second, pursuant to the Debt Collection Act of 1982, as amended (31 
U.S.C. 370 1-3720E (2000)), the civil penalty owed under this Order 
accrues interest as more fully described in the attached Notice, and, 
if payment is not made by the due date specified herein, Micei 
International will be assessed, in addition to the full amount of the 
civil penalty and interest, a penalty charge and administrative charge.
    Third, for a period of five (5) years from the date that this Order 
is published in the Federal Register, Micei International, Kamnik bb, 
1000 Skopje, Republic of Macedonia, its successors or assigns, and when 
acting for or on behalf of Micei, its representatives, agents, officers 
or employees (hereinafter collectively referred to as ``Denied 
Person'') may not participate, directly or indirectly, 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 not 
limited to:
    A. Applying for, obtaining, or using any license, License 
Exception, or export control document;
    B. Carrying on negotiations concerning, or ordering, buying, 
receiving, using, selling, delivering, storing, disposing of, 
forwarding, transporting, financing, or otherwise servicing in any way, 
any transaction involving any item exported or to be exported from the 
United States that is subject to the 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 any other activity subject to the Regulations.
    Fourth, that no person may, directly or indirectly, do any of the 
following:
    A. Export or reexport to or on behalf of the Denied Person any item 
subject to the Regulations;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by the 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 the Denied Person acquires 
or attempts to acquire such ownership, possession or control;

[[Page 24791]]

    C. Take any action to acquire from or to facilitate the acquisition 
or attempted acquisition from the Denied Person of any item subject to 
the Regulations that has been exported from the United States;
    D. Obtain from the 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 which is owned, possessed or controlled by the Denied Person, or 
service any item, of whatever origin, that is owned, possessed or 
controlled by the 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.
    Fifth, that, after notice and opportunity for comment as provided 
in Sec.  766.23 of the Regulations, any person, firm, corporation, or 
business organization related to the Denied Person 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 
the Order.
    Sixth, that this Order does not prohibit any export, reexport, or 
other transaction subject to the Regulations where the only items 
involved that are subject to the Regulations are the foreign-produced 
direct product of U.S.-origin technology.
    Seventh, that the final Decision and Order shall be served on Micei 
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 also 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 14, 2009.
Daniel Hill,
Acting Under Secretary of Commerce for Industry and Security.

REDACTED COPY

    United States of America, Department of Commerce, Bureau of 
Industry and Security.
    In the Matter of: MICEI International, Respondent.
    Docket No.: 08-BIS-0005.
    Recommended Decision and Order Granting Motion for Default.
    Issued: April 14, 2009.
    Issued by: Hon. Michael J. Devine.

I. Summary of Decision

    This case arises from Respondent Micei International's (Micei) use 
of an individual subject to a Denial Order as an employee or agent to 
negotiate for Respondent Micei and facilitate exports from the United 
States. The charging letter identifies Yuri Montgomery 
(``Montgomery''), as the individual involved in transactions with Micei 
which violate the terms of a previously issued Denial Order in 
connection with his (Montgomery's) exporting various goods from the 
United States to Macedonia in 2003. Micei International, Inc. 
(``Micei'' or ``Respondent''), has been charged causing, aiding, or 
abetting Montgomery to violate the Denial Order and acting with 
knowledge of the violation. The Bureau of Industry Security, United 
States Department of Commerce (``BIS'' or ``Bureau'') has alleged that 
Micei's conduct in connection with Montgomery violating his Denial 
Order constitutes fourteen (14) violations of the Export Administration 
Act of 1979 (``Act'' or ``EAA'') and the Export Administration 
Regulations (``EAR''). 50 U.S.C. app. 2401-20 (1991), amended by Public 
Law 106-508, 114 Stat. 2360 (Supp. 2002) (EAA); 15 CFR Parts 730-74 
(1997-1999) (EAR or Regulations). Montgomery is not a party to this 
enforcement action against Micei International.
    The EAA and its underlying regulations 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. 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. 240120.\1\
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    \1\ The EAA and all regulations promulgated thereunder expired 
on August 20, 2001. See 50 U.S.C. App. 2419, Three days before its 
expiration, on August 17, 2001, the President declared the lapse of 
the EAA constitutes a national emergency. See Exec. Order. No. 
13222, reprinted in 3 CFR at 783-784, 2001 comp. (2002). Exercising 
authority under the International Emergency Economic Powers Act 
(``IEEPA''), 50 U.S.C. 170 1-1706 (2002), the President maintained 
the effectiveness of the EAA and its underlying regulations 
throughout the expiration period by issuing Exec. Order. No. 13222 
on August 17, 2001. Id. The effectiveness of the export control laws 
and regulations were further extended by successive Notices issued 
by the President; the most recent being that of July 23, 2008. See 
Notice: Continuation of Emergency Regarding Export Control 
Regulations, 73 FR 43603 (July, 23, 2008). Courts have held that the 
continuation of the 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. U.S. Dep't of Commerce, 317 F.3d 
275, 278-79 (D.C. Cir. 2003); Times Publ'g Co. v. U.S. Dep't of 
Commerce, 236 F.3d 1286, 1290 (11th Cir. 2001).
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    Here, BIS alleges that Micei committed fourteen (14) violations of 
the EAR and seeks a denial of the Respondent's export privileges from 
the United States for a period of five (5) years as well as assessment 
of $126,000 in civil penalties.
    As discussed infra, Micei filed a Motion to Dismiss the charges and 
various briefs and materials in support of that motion, including a 
declaration by Iki Malinkovski. However, Micei has not filed an Answer 
or other appropriate responsive pleadings in this case. After the time 
for an Answer passed, BIS filed a Motion for Default. This Order finds 
that Respondent Micei is in default and that the fourteen (14) 
violations of the EAA and EAR alleged in the Amended Charging Letter 
are proven by default. Finally, this Order recommends imposing a five 
(5) year denial of export privileges and a $126,000.00 civil penalty 
upon Respondent.

II. Background

    On July 2, 2008, BIS filed a Charging Letter with the Docketing 
Center alleging that Micei committed fourteen (14) violations of the 
Export Administration Regulations (``EAR'') and the Export 
Administration Act of 1979 (``EAA'').\2\
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    \2\ The EAR and EAA are currently in full force and effect and 
have been at all relevant times with respect to this case. See 
discussion supra n.1 wherein the history of these laws and 
regulations is examined.
---------------------------------------------------------------------------

    Specifically, BIS alleges that on seven (7) occasions between on or 
about July 2, 2003, and on or about October 8, 2003, Micei caused, 
aided, abetted, and/or induced an Montgomery to violate a BIS Order 
which denied that individual's export privileges under 15 CFR 766.25. 
These charges involve alleged illegal exportation of various goods from 
the United States to Macedonia.
    BIS further alleges that these acts created seven (7) additional 
violations of the EAR because Micei committed them with knowledge that 
a violation of an order issued under the EAR had occurred, was about to 
occur, or was intended to occur in connection with the transactions.
    On September 17, 2008, Respondent through counsel \3\ filed 
Respondent's

[[Page 24792]]

Motion to Dismiss and Demand for a Hearing on the Motion to Dismiss. 
With said filing, Respondent submitted a Memorandum of Points and 
Authorities in support of its Motion to Dismiss wherein Respondent made 
numerous arguments and included extensive discussion. After prehearing 
scheduling matters, including various filings, and interim Orders which 
need not be discussed here, BIS filed its Opposition to Respondent's 
Motion to Dismiss on November 25, 2008,\4\ BIS addressed Respondent's 
Motion to Dismiss and the arguments and authorities contained therein. 
On December 16, 2008 Respondent submitted its Reply to BIS's Opposition 
to Respondent's Motion to Dismiss.\5\
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    \3\ Note that the attorney initially representing Respondent 
requested to withdraw and that the company president step in as a 
non attorney representative until replacement counsel could be 
obtained. As noted in the file, the Respondent's counsel was not 
permitted to withdraw until after the Motion to Dismiss was 
resolved. On December 11, 2008, Mr. Vasko Tomanovic filed a Notice 
of Appearance of Respondent's Substitute Counsel. It is unclear 
whether Mr. Tomanovic is now the sole representative or whether the 
company president who has been serving as a non attorney 
representative retains any involvement as a representative. Unless 
the Court is notified to the contrary, Mr. Tomanovic and the company 
president will be treated as joint representatives in this case.
    \4\ Note that BIS's November 25, 2008 filing is a corrected 
version of a previous filing. For simplicity, BIS's November 25, 
2008 filing will be discussed as if it were BIS sole opposition to 
Respondent's Motion to Dismiss.
    \5\ A Notice of Filing Corrected Version of Respondent's Reply 
Memorandum of Points and Authorities in Support of Memorandum to 
Dismiss was submitted by Vasko Tomanovic on behalf of Respondent 
Micei on December 18, 2008. This also included a declaration in 
support of the motion by Iki Malinkovski which contains various 
asserted ``facts'' regarding the Micei company and its interaction 
with his Uncle Yuri Montgomery. Since the motion was denied and no 
responsive Answer or pleading has been filed by Micei, none of the 
matters asserted in support of the motion will be considered either 
as admissions or as a basis for Micei to deny or contest the charged 
violations.
---------------------------------------------------------------------------

    On December 22, 2008, this Court issued an Order denying 
Respondent's Motion to Dismiss and Demand for Hearing on the Motion to 
Dismiss. Respondent's demand for a hearing on the Motion to Dismiss was 
denied because the Regulations do not provide for such a procedural 
step and because the parties already fully briefed the Court on the 
Motion to Dismiss, thus rendering a hearing on the matter unnecessary. 
After extensive briefing by the parties, Respondent's Motion to Dismiss 
was similarly denied because the Regulations do not provide for this 
procedural step, it was not sufficient to be a Motion for Summary 
Decision, and because there was no merit to Respondent's position. At 
the core of Respondent's argument was an assertion that this Court 
somehow lacked jurisdiction to adjudicate the case based on a Federal 
Civil Procedure process for civil lawsuits that does not apply to 
administrative regulation matters. This argument was rejected with an 
explanation of BIS's and the Court's jurisdiction along with a brief 
restatement of how administrative law functions.
    Respondent's Motion to Dismiss could have been considered as non 
responsive and subject to default because it was not in proper form to 
be considered either as an Answer to the Charges or as a Motion 
permitted by the regulations. Since Respondent's Motion to Dismiss was 
not sufficient as an Answer, it was considered and analyzed as if it 
were a Motion for Summary Decision. The Motion was insufficient as a 
Motion for Summary Decision as well in that it failed to establish that 
there was no genuine issue of material fact and that based on the facts 
Respondent was entitled to judgment as a matter of law. The Motion was 
denied on December 22, 2008 and a Scheduling Order was issued that 
directed Respondent to file an Answer by January 12, 2009.
    On January 9, 2009, BIS filed a Notice of Amended Charging Letter 
containing limited additional allegations involving the same charged 
violation. The amendments asserted additional support for the 
allegations that Respondent conducted itself with knowledge that a 
violation of Montgomery's Denial Order would occur. This amendment was 
allowed by rule because Respondent had yet to file an answer at that 
time. 15 CFR 766.3(a). An Answer to the Amended Charging Letter was due 
on February 10, 2009 in keeping with the regulations that require an 
Answer within 30 days of notice of the amendment to the charges. 15 CFR 
766.6(a).
    On February 23, 2009, Respondent filed a Motion for a More Definite 
Statement and Demand for Hearing. This motion repeats much of the 
argument asserted in the Motion to Dismiss that was denied by the Order 
of December 22, 2008.
    On March 24, 2009, BIS filed a Motion for Default Order and 
Opposition to Respondent's Motion for a More Definite Statement. BIS 
sought a civil penalty of $126,000 and a five (5) year denial of export 
privileges for Micei. On April 1, 2009, BIS filed a Motion to Stay 
Further Running of the Court's Scheduling Order. As discussed below, 
Respondent's Motion for a More Definite Statement is denied and BIS's 
Motion for Default is granted. This Order fully resolves this matter, 
therefore BIS's Motion to Stay Further Running of the Court's 
Scheduling Order is moot. Likewise any other Motions pending in this 
case are moot.

III. Recommended Findings of Fact

    In light of the Respondent's failure to file an answer within the 
time provided, the facts alleged in the Amended Charging Letter are 
found proven. 15 CFR 766.7(a). The facts found proven include the 
following:
    1. Micei International is a company of Skopje, Macedonia.
    2. Micei has a regional office in Seattle, WA.
    3. The supplier at issue in this case is a U.S. supplier.
    4. Iki Malinkovski was the vice president of Micei at all relevant 
times.
    5. Yuri Montgomery is an individual subject to a BIS Denial Order 
at all relevant times.
    6. The Denial Order regarding Yuri Montgomery dated September 11, 
2000, was published in the Federal Register on September 22, 2000 (65 
FR 57,313), and has been and continued to be effective until January 
22, 2009.
    7. Under the terms of the Denial Order, Montgomery ``may not 
directly or indirectly, participate in any way in 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, including [c]arrying 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 * * * 
[b]enefiting in any way from the 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.''
    8. On July 2, 2003, Micei authorized, requested, and/or arranged 
for Montgomery to negotiate for and/or purchase 61 pair of Magnum boots 
valued at $3,355 for or on behalf of Micei for export from the United 
States to Micei in Macedonia. On the same day and acting through its 
employee or agent Montgomery, Micei Ordered, bought, sold, used and/or 
financed this purchase with knowledge that Montgomery would be 
violating his Denial Order. Montgomery participated in and benefited 
from this transaction.
    9. On July 18, 2003, Micei authorized, requested, and/or arranged 
for Montgomery to negotiate for and/or purchase 2 firing range clearing 
devices

[[Page 24793]]

valued at $1,136 for or on behalf of Micei for export from the United 
States to Micei in Macedonia. On the same day and acting through its 
employee or agent Montgomery, Micei Ordered, bought, sold, used and/or 
financed this purchase with knowledge that Montgomery would be 
violating his Denial Order. Montgomery participated in and benefited 
from this transaction.
    10. On August 5, 2003, Micei authorized, requested, and/or arranged 
for Montgomery to negotiate for and/or purchase 10,800 pair of boots 
with an undetermined value for or on behalf of Micei for export from 
the United States to Micei in Macedonia. On the same day and acting 
through its employee or agent Montgomery, Micei Ordered, bought, sold, 
used and/or financed this purchase with knowledge that Montgomery would 
be violating his Denial Order. Montgomery participated in and benefited 
from this transaction.
    11. On August 5, 2003, Micei authorized, requested, and/or arranged 
for Montgomery to negotiate for and/or purchase 45 pair of Oxford shoes 
and 5 remote strobe tubes valued at $2,562 for or on behalf of Micei 
for export from the United States to Micei in Macedonia. On the same 
day and acting through its employee or agent Montgomery, Micei Ordered, 
bought, sold, used and/or financed this purchase with knowledge that 
Montgomery would be violating his Denial Order. Montgomery participated 
in and benefited from this transaction.
    12. On August 13, 2003, Micei authorized, requested, and/or 
arranged for Montgomery to negotiate for and/or purchase 150 shirts 
valued at $1,744 for or on behalf of Micei for export from the United 
States to Micei in Macedonia. On the same day and acting through its 
employee or agent Montgomery, Micei Ordered, bought, sold, used and/or 
financed this purchase with knowledge that Montgomery would be 
violating his Denial Order. Montgomery participated in and benefited 
from this transaction.
    13. On September 9, 2003, Micei authorized, requested, and/or 
arranged for Montgomery to negotiate for and/or purchase 2 load 
binders, 1 ratchet strap, 1 binder chain, and 1 safety shackle for or 
on behalf of Micei for export from the United States to Micei in 
Macedonia. On the same day and acting through its employee or agent 
Montgomery, Micei Ordered, bought, sold, used and/or financed this 
purchase with knowledge that Montgomery would be violating his Denial 
Order. Montgomery participated in and benefited from this transaction.
    14. On October 8, 2003, Micei authorized, requested, and/or 
arranged for Montgomery to negotiate for and/or purchase Items in Order 
 25473620/017 for or on behalf of Micei for export from the 
United States to Micei in Macedonia. On the same day and acting through 
its employee or agent Montgomery, Micei Ordered, bought, sold, used 
and/or financed this purchase with knowledge that Montgomery would be 
violating his Denial Order. Montgomery participated in and benefited 
from this transaction.
    15. To further facilitate these purchases, Micei contacted 
Montgomery and provided information on the items to be ordered and 
their approximate cost, and identified the vendors from which to order 
them. With Micei's knowledge and/or permission, Montgomery operated or 
held himself out as Micei's employee or agent, including indicating in 
an e-mail to a U.S. supplier that Micei had a U.S. regional office in 
Seattle, Washington, where Montgomery was located, and that Micei was 
interested in forming a distributorship relationship with the supplier. 
That e-mail was copied to Micei's president and signed by Montgomery 
with ``Micei Int'l Reg[ional] Office].''

IV. Discussion

A. Application of EAR and EAA to Respondent and to Montgomery

    Throughout this enforcement proceeding, Micei has repeatedly 
contended that the Bureau lacks jurisdiction over Micei and the 
relevant transactions at issue in this case. These arguments are 
rejected and have been fully discussed in a previous Order. The 
jurisdictional grounds for this enforcement action are nevertheless 
briefly outlined below.
    The authority delegated by Congress to the President of the United 
States under the EAA is extensive. The EAA gives the President 
authority to regulate or prohibit the export of goods, technology, and 
information ``to the extent necessary to further the foreign policy of 
the United States or fulfill its international obligation.'' 50 U.S.C. 
app. 2405(a)(1).
1. BIS Authority Over These Items
    The instant case involves various goods supplied to Micei through a 
U.S. supplier for shipment abroad to Macedonia. Based on the above 
referenced authority, the Regulations specify that ``all U.S. origin 
items wherever located'' are subject to the EAR and are therefore 
``items * * * over which BIS exercises regulatory jurisdiction under 
the EAR.'' 15 CFR 734.3(a)(1)-(a)(2). The Regulations further specify 
that ``item'' simply means ``commodity,'' which is defined as ``[a]ny 
article, material, or supply.'' 15 CFR 772.1. This case involves the 
materials noted in the charges as being exported to Macedonia by the 
action of Micei and its agents or employees, including: Boots, firing 
range clearing devices, shoes, remote strobe tubes, shirts, load 
binders, a ratchet strap, a binder chain, a safety shackles, and other 
items included in order 25473620/017. The various goods at 
issue in this case are clearly articles, materials, and supplies and 
are therefore commodities, and thus are ``items'' under the 
regulations. Since their supplier was located in the U.S., they were of 
U.S. origin and therefore subject to the EAR, giving BIS regulatory 
authority.
2. BIS Authority Over Micei and Montgomery
    At the time in question, the EAR affirmatively stated that no 
``person'' may engage in a variety of prohibited acts. 15 CFR 764.2(b), 
(e). The EAR defines a person as a ``natural person, including a 
citizen or national of the United States or of any foreign country; any 
firm;* * * and any other association or organization whether or not 
organized for profit.'' 15 CFR 772.1. From the plain language of the 
export laws and Regulations, it is clear that the EAA and EAR were 
intended to apply to natural persons and companies extraterritorially, 
regardless of a person's or company's nationality or locality, so long 
as items subject to the EAR are involved. In the Matter of Mahdi, 68 FR 
57406-02 (Oct. 3, 2003). Thus, it is immaterial whether Micei and/or 
Montgomery are of a foreign county. To hold otherwise would contravene 
existing law and regulations, and would completely undermine the 
effectiveness of the EAA and the EAR. Both Micei and Montgomery are 
persons subject to the EAR through their actions in exporting activity, 
giving BIS regulatory authority over them.

B. Default

    Generally, the Agency has the burden of proving the allegations in 
the Charging Letter by reliable, probative, and substantial evidence. 5 
U.S.C. 556(d). When the respondent fails to file an answer within the 
time provided, however, this ``constitutes a waiver of the respondent's 
right to appear and contest the allegations in the charging letter. In 
such event, the administrative law judge, on BIS's motion and without 
further notice to the respondent, shall find the facts to be as alleged 
in the charging letter and render an initial or recommended decision 
containing findings of fact and appropriate

[[Page 24794]]

conclusions of law and issue or recommend an order imposing appropriate 
sanctions.'' 15 CFR 766.7(a).
    In the instant case, BIS filed its original Charging Letter on July 
1, 2008. As previously discussed, Respondent did not file an Answer as 
required under the Regulations, but instead filed a Motion to Dismiss 
on September 17, 2008. This Motion was denied, but in giving Respondent 
the benefit of the doubt, this filing was treated as a Motion for 
Summary Decision and Respondent's time to file an Answer was extended 
to January 12, 2009. Prior to this deadline on January 9, 2009, BIS 
filed an Amended Charging Letter adding limited additional allegations 
serving the same on Respondents via courier and facsimile. This 
amendment was allowed by rule since Respondent had not yet filed an 
Answer. 15 CFR 766.3(a). Pursuant to 15 CFR 766,6(a), a Respondent must 
answer ``within 30 days of notice of any supplement or amendment to a 
charging letter, unless time is extended under Sec.  766.16 of this 
part.'' Since there have been no extensions given under Sec.  766.16, 
Respondent's Answer to the Amended Charging Letter would have been due 
on February 9, 2009.
    Respondent submitted its next filing in this case on February 23, 
2009. In addition to the fact that this filing was submitted 14 days 
after the due date for Respondent to file an Answer, it was not an 
Answer in form or substance. Instead, it was titled Respondent's Motion 
for a More Definite Statement and Demand for Hearing. In this filing, 
Respondent again asserted its previous argument that BIS and the Court 
lack jurisdiction in this case. Furthermore, this filing was not at all 
responsive to BIS's Amended Charging Letter and did not admit or deny 
specifically each separate allegation of the Amended Charging Letter as 
required under the Regulations. 15 CFR 766.6(b).
    On March 5, 2009, Respondent made three additional filings--
Response to BIS's Request for Admissions by Respondent Micei 
International, Response to BIS's First set of Interrogatories and 
Requests for production of Documents by Respondent Micei International, 
and Response to BIS's Second set of Interrogators and Requests for 
Production of Documents by Respondent Micei International. Similar to 
Respondent's previous filing, these three filings were submitted well 
after Respondent's time to file an Answer to BIS's Amended Charging 
Letter and cannot be construed to constitute an Answer in form or 
substance. Instead, these filings amount to a continuation of 
Respondent's pattern of declining to follow the regulatory requirement 
of filing an Answer in this case. This filing was not at all responsive 
to BIS's Amended Charging Letter and did not admit or deny specifically 
each separate allegation of the Amended Charging Letter. 15 CFR 
766.6(b). Respondent has instead restated the previously rejected 
argument that no jurisdiction exists in this case and fell short of 
satisfying its regulatory requirement to file an Answer to BIS's 
Amended Charging Letter. The Respondent has previously been provided 
with copies of the procedural regulations and has been given several 
opportunities to participate in the process provided by the regulations 
to contest these charges. Respondent has declined to take advantage of 
this opportunity.
    On March 24, 2009, BIS filed a Motion for Default Order arguing 
that Respondent has yet to file an Answer as required under the 
Regulations. BIS argued that Respondent's Answer was actually due on 
February 9, 2009, but due not later then February 19, 2009 under any 
conceivable construction of the Regulations. I agree.
    As of the date of this Order (April 14, 2009) Respondent has still 
failed to file an Answer (or any other permitted responsive pleading 
under the Regulations) to BIS's Amended Charging Letter. In light of 
the fact that Respondent has still not filed an Answer after being 
given multiple opportunities to properly contest this case within the 
process provided by the Regulations, BIS's Motion is granted and 
Respondent is held to be in default. As such, the findings of fact 
contained in this Order are found as alleged in the Amended Charging 
Letter. 15 CFR 766.7(a). Appropriate conclusions of law and the 
recommended sanctions will be based thereon. Id.

C. Violations of the EAA and EAR

    Micei has been charged with seven (7) counts of counseling, aiding, 
and abetting Montgomery to violate a BIS Denial Order, and with seven 
(7) counts of acting with knowledge of a violation.
1. Causing, Aiding or Abetting the Violation of a Denial Order, 15 CFR 
764.2(b)
    ``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.'' 15 CFR 764.2(b). As with most of the 
764.2 provisions, 764.2(b) of the Regulations is a strict liability 
offense. See 15 CFR 764.2; Iran Air v. Kugelman, 996 F.2d 1253, 1258-9 
(D.C. Cir. 1993) (upholding the Department of Commerce's reading of the 
Regulations as allowing for strict liability charges); In the Matter of 
Kabba & Amir Investments, Inc., d.b.a. Int'l Freight Forwarders, 73 FR 
25649, 25652 (May 7, 2008) (concluding that Section 764.2(b) is a 
strict liability offense), aff'd by Under Secretary, 73 FR 25648; see 
also In the Matter of Petrom GmbH Int'l Trade, 70 FR 32743, 32754 (June 
6, 2005). Micei can be found to have counseled, aided, or abetted 
Montgomery to violate his Denial Order by the Agency demonstrating that 
Micei participated in the transactions noted in Charges 1-7 and that 
Montgomery was a ``person denied export privileges'' and subject to a 
BIS Denial Order. That is, these charges can be found proven against 
Micei if the actions that Montgomery was taking in connection with 
Micei would constitute a violation of an active Denial Order. Here, the 
Respondent is in default and the facts alleged in the charges are 
deemed proven. I find that the alleged conduct would violate the Denial 
Order.
    On September 22, 2000, Montgomery became a ``person denied export 
privileges'' when BIS issued a Denial Order against him effective until 
January 22, 2009. The Denial Order was published in the Federal 
Register on September 22, 2000 (65 FR 57313) and was in continuous 
effect from September 22, 2000 to January 22, 2009 and continued in 
force at the time of the actions alleged in the charges.
    The Amended Charging Letter alleges that Montgomery's Denial Order 
mandates that Montgomery ``may not directly or indirectly, participate 
in any way in 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, including [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 * * * [b]enefiting in any way from the 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.''
    As previously discussed, in view of Respondent Micei' s failure to 
answer the charges, Micei has waived the right to contest the facts as 
alleged in the Amended Charging Letter in keeping

[[Page 24795]]

with 15 CFR 766.7(a). The Amended Charging Letter clearly alleges that 
Montgomery directly and indirectly participated in at least seven (7) 
transactions involving items to be exported from the United States to 
Macedonia. This occurred when Montgomery negotiated to be a purchasing 
agent for Micei for the boots, firing range clearing devices, shoes, 
remote strobe tubes, shirts, load binders, a ratchet strap, a binder 
chain, safety shackles, and other items included in order 
25473620/017. These goods are subject to the Regulations 
because they are items of U.S. origin. The Amended Charging Letter goes 
on to allege that Montgomery participated in and benefited from these 
transactions.
    There is no doubt that the facts alleged in the Amended Charging 
Letter are sufficient to show that Montgomery was subject to an active 
Denial Order and that his actions constituted a violation of said 
Denial Order on each of the seven (7) transactions alleged in the 
Amended Charging Letter. Clearly then, Micei's authorizing, requesting, 
and/or arranging Montgomery's actions to purchase boots, firing range 
clearing devices, shoes, remote strobe tubes, shirts, load binders, a 
ratchet strap, a binder chain, safety shackles, and other items 
included in order 25473620/017 constitute causing, aiding, 
abetting, counseling, commanding, inducing, procuring, or permitting 
Montgomery to violate said Denial Order. Since knowledge is not a 
required element for the first seven (7) charges, these facts alone are 
sufficient to find that Micei's actions constitute seven (7) violations 
of the EAR as charged.
2. Acting With Knowledge of a Violation 15 CFR 764.2(e)
    BIS has also charged Respondent with seven (7) charges alleging 
that Micei was acting with knowledge of a violation with regard to 
Montgomery's violation of his Denial Order. As discussed above, 
Montgomery was subject to an active BIS Denial Order and that his 
actions and attempted actions were in direct contradiction or violation 
of the Denial Order. The question then is whether Micei's actions in 
regard to Montgomery's violation of the Denial Order were taken ``with 
knowledge'' of a violation. I find that they were and that knowledge of 
a violation was present.
    The Regulations mandate that ``[n]o person may order, buy, remove, 
conceal, store, use, sell, loan, dispose of, transfer, transport, 
finance, forward, or otherwise service, in whole or in part, any item 
exported or to be exported from the United States, or that is otherwise 
subject to the EAR, with knowledge that a violation of the EAA, the 
EAR, or any order, license or authorization issued thereunder, has 
occurred, is about to occur, or is intended to occur in connection with 
the item.''
    In the Amended Charging Letter, BIS alleged that Micei had actual 
and constructive knowledge that a violation of Montgomery's Denial 
Order has occurred, is about to occur, or is intended to occur in 
connection with the items and transactions at issue in this case. 
Specifically, BIS alleged that shortly after the alleged transactions 
occurred, Micei, through its vice president, told BIS special 
investigators that Micei was aware of Montgomery's Denial Order. BIS 
goes on to allege that Montgomery's Denial Order was published in the 
Federal Register imputing knowledge to Micei that Montgomery was a 
``person denied export privileges'' at all relevant times.
    It is therefore clear that the allegations are adequate to support 
the charges that Micei acted ``with knowledge'' that Montgomery was 
subject to a Denial Order. In keeping with 15 CFR 766.7(a), the facts 
as alleged are therefore sufficient to prove the seven (7) additional 
violations in connection with the negotiations and transactions by 
Montgomery and Micei at issue in this case.

V. Recommended Conclusions of Law

    1. The boots, firing range clearing devices, shoes, remote strobe 
tubes, shirts, load binders, a ratchet strap, a binder chain, safety 
shackles, and other items included in order 25473620/017 at 
issue in this case are items subject to the Regulations, giving BIS 
regulatory authority.
    2. Both Montgomery and Micei are ``persons'' subject to the 
Regulations, giving BIS regulatory authority.
    3. Micei has failed to file an Answer to BIS's Amended Charging 
Letter as required by the Regulations and upon BIS's Motion, Micei is 
found to be in default.
    4. Because Micei has been found to be in default, the facts have 
been found as alleged in the Amended Charging Letter.
    5. At all relevant times, Montgomery was subject to a BIS Denial 
Order and violated said Denial Order seven (7) times between on or 
about July 2, 2003 and on or about October 8, 2003.
    6. On seven (7) occasions between on or about July 2, 2003 and on 
or about October 8, 2003 Micei caused, aided, or abetted Montgomery to 
violate a standing BIS Denial Order.
    7. On seven (7) occasions between on or about July 2, 2003 and on 
or about October 8, 2003 Micei acted with knowledge of a violation when 
it caused, aided, or abetted Montgomery to violate a standing BIS 
Denial Order.

VI. Recommended Sanction

    BIS has proposed a sanction against Micei of a five- (5)-year 
denial of U.S. export privileges under 15 CFR 764.3(a)(2) and a 
$126,000.00 civil penalty under 15 CFR 764.3(a)(1). BIS argues that 
this penalty is appropriate because Micei has deliberately participated 
in multiple export transactions of items from the United States to 
Macedonia involving violations of a BIS Denial Order with knowledge of 
the violations. BIS goes on to assert that Micei has demonstrated a 
``severe and blatant disregard for U.S. export control laws'' and that 
this is highlighted by Respondent's conduct during the various phases 
of this Enforcement Action.
    BIS cites several previous export enforcement cases wherein similar 
conduct and violations were assessed a penalty comparable to that which 
has been proposed in this case. In the Matter of Suburban Guns (Pty) 
Ltd., Docket No. 05-BIS-02, 70 FR 69,314 (Nov. 15, 2005). In Suburban 
Guns, the ALJ found that Respondent ordered firearm parts and 
accessories from a U.S. supplier and had them exported from the U.S. to 
its location in South Africa on two occasions in violation of a 
standing Denial Order. The ALJ recommended a five- (5)-year denial of 
export privileges and a civil penalty of $44,000. However, each case is 
determined separately based on the individual facts and circumstances 
presented.
    While Micei's conduct in the instant case is, to some extent, 
analogous to that of the respondents in the above mentioned cases, the 
information in the record could support an assertion that the 
violations are intentional and that could justify a significantly 
harsher penalty than that which BIS proposes. Micei has failed to 
contest for the charged violation of U.S. export laws and regulations 
in declining to follow the Regulations provided and failing to meet the 
deadlines provided in the Regulations and by the Orders issued in this 
matter. However, since the record in this matter is limited because it 
is being decided on a default motion, and Micei has also waived an 
opportunity to present any mitigating evidence it may have, I do not 
recommend increasing the penalty proposed by BIS. Therefore, I 
recommend that BIS's proposed penalty of a five- (5)-year denial of 
export privileges and a $126,000 civil penalty are deemed appropriate.

[[Page 24796]]

VII. Recommended Order

[REDACTED SECTION]

[REDACTED SECTION]

    The Recommended Decision and Order is being referred to the Under 
Secretary for review and final action. As provided by Section 
766.17(b)(2) of the EAR, the recommended decision and order is being 
served by express mail. Because the Under Secretary must review the 
decision in a short time frame, all papers filed with the Under 
Secretary in response to the recommended decision and order must be 
sent by personal delivery, facsimile, express mail, or other overnight 
carrier as provided in Section 766.22(a) of the EAR. 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-3898, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230, within 12 days from the date of issuance of this 
Recommended Decision and Order. Thereafter, the parties have eight days 
from receipt of any response(s) in which to submit replies.
    Within 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 15 CFR 
766.22(c).
    PLEASE TAKE NOTE THAT Respondent has one year from the date of 
entry of this Order to file a petition to vacate this default order. 15 
CFR 766.7(b).
    Administrative Law Judge in Norfolk, Virginia.

    Done and dated April 14, 2009. Norfolk, VA.

Hon. Michael J. Devine,
Administrative Law Judge, U.S. Coast Guard.

    6. United States Coast Guard Administrative Law Judges perform 
adjudicatory functions for the Bureau of Industry and Security with 
approval from the Office of Personnel Management pursuant to a 
memorandum of understanding between the Coast Guard and the Bureau of 
Industry and Security.

Certificate of Service

    I hereby certify that I have served the foregoing Scheduling Order 
upon the following parties (or designated representatives) at the 
address indicated below:

Eric Clark, Attorney-Advisor and Parvin Huda, Senior Counsel, and 
Joseph Jest, Chief of Enforcement and Litigation, Attorneys for Bureau 
of Industry and Security, Office of Chief Counsel for Industry and 
Security. U.S. Department of Commerce, Room H-3839, 14th Street & 
Constitution Avenue, NW., Washington, DC 20230. Fax: 202-482-0085. Sent 
by Facsimile and Federal Express.
Vasko Tomanovic, Counsel for Respondent, ``Kaminik'' b.b., 1000 Skopje, 
Republic of Macedonia. Tel: 389-70-436068. Fax: 41-44-567-1892. Sent by 
Facsimile and Federal Express.
ALJ Docketing Center, Attn: Hearing Docket Clerk, United States Coast 
Guard, 40 South Gay Street, Rm. 412, Baltimore, MD 21202. Fax: 410-962-
1746. Sent by Facsimile and Federal Express.
Mr. Iki Malinkovski, Micei International, Kaminik b.b., 1000 Skopje, 
Republic of Macedonia. Fax: 011-389-2252-2039. Sent by Facsimile and 
Federal Express.

    Done and dated April 14, 2009.

Janice L. Parker,
Paralegal Assistant to the Administrative Law Judge.

    Notice to the Parties Regarding Review by Under Secretary.
Title 15--Commerce and Foreign Trade.
Subtitle B--Regulations Relating to Commerce and Foreign Trade.
Chapter VII--Bureau of Industry and Security, Department of Commerce.
Subchapter C--Export Administration Regulations.
Part 766--Administrative Enforcement Proceedings.
15 CFR 766.22.

Sec.  766.22 Review by Under Secretary

    (a) Recommended decision. For proceedings not involving violations 
relating to part 760 of the EAR, the administrative law judge shall 
immediately refer the recommended decision and order to the Under 
Secretary. Because of the time limits provided under the EAA for review 
by the Under Secretary, service of the recommended decision and order 
on the parties, all papers filed by the parties in response, and the 
final decision of the Under Secretary must be by personal delivery, 
facsimile, express mail or other overnight carrier. If the Under 
Secretary cannot act on a recommended decision and order for any 
reason, the Under Secretary will designate another Department of 
Commerce official to receive and act on the recommendation.
    (b) Submissions by parties. Parties shall have 12 days from the 
date of issuance of the recommended decision and order in which to 
submit simultaneous responses. Parties thereafter shall have eight days 
from receipt of any response(s) in which to submit replies. Any 
response or reply must be received within the time specified by the 
Under Secretary.
    (c) Final decision. Within 30 days after receipt of the recommended 
decision and order, the Under Secretary shall issue a written order 
affirming, modifying or vacating the recommended decision and order of 
the administrative law judge. If he/she vacates the recommended 
decision and order, the Under Secretary may refer the case back to the 
administrative law judge for further proceedings. Because of the time 
limits, the Under Secretary's review will ordinarily be limited to the 
written record for decision, including the transcript of any hearing, 
and any submissions by the parties concerning the recommended decision.
    (d) Delivery. The final decision and implementing order shall be 
served on the parties and will be publicly available in accordance with 
Sec.  766.20 of this part.
    (e) Appeals. The charged party may appeal the Under Secretary's 
written order within 15 days to the United States Court of Appeals for 
the District of Columbia pursuant to 50 U.S.C. app. 2412(c)(3).

[FR Doc. E9-11885 Filed 5-22-09; 8:45 am]
BILLING CODE M