Action Affecting Export Privileges; Mahan Airways and Gatewick LLC, 56052-56055 [2010-23011]
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resources, transportation, farmland,
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PLACE:
Dated in Washington, DC, on September
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Peter Minarik,
Acting Chief, Regional Programs
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[FR Doc. 2010–23184 Filed 9–13–10; 4:15 pm]
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Action Affecting Export Privileges;
Mahan Airways and Gatewick LLC
Sunshine Act Notice
United States Commission on
Civil Rights.
ACTION: Notice of meeting.
AGENCY:
Friday, September 24,
2010; 9:30 a.m. EDT
DATE AND TIME:
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Mahan Airways, Mahan Tower, No. 21,
Azadegan St., M.A. Jenah Exp. Way,
Tehran, Iran; and Gatewick LLC,
a/k/a Gatewick Freight & Cargo
Services, a/k/a/Gatewick Aviation
Services, G#22 Dubai Airport Free
Zone, P.O. Box 393754, Dubai, United
Arab Emirates; and P.O. Box 52404,
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Federal Register / Vol. 75, No. 178 / Wednesday, September 15, 2010 / Notices
Dubai, United Arab Emirates; and
Mohamed Abdulla Alqaz Building, Al
Maktoum Street, Al Rigga, Dubai,
United Arab Emirates.
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Order Renewing Order Temporarily
Denying Export Privileges and Also
Making That Temporary Denial of
Export Privileges Applicable to Related
Person
Pursuant to Section 766.24 of the
Export Administration Regulations, 15
CFR Parts 730–774 (2010) (‘‘EAR’’ or the
‘‘Regulations’’), I hereby grant the
request of the Bureau of Industry and
Security (‘‘BIS’’) to renew for 180 days
the Order Temporarily Denying the
Export Privileges of Mahan Airways
(‘‘TDO’’), as I find that renewal of the
TDO is necessary in the public interest
to prevent an imminent violation of the
EAR. Additionally, pursuant to Section
766.23 of the Regulations, including the
provision of notice and an opportunity
to respond, I find it necessary to add the
following entity as a related person:
Gatewick LLC, a/k/a Gatewick Freight &
Cargo Services, a/k/a Gatewick
Aviation Services, G#22 Dubai
Airport Free Zone, P.O. Box 393754,
Dubai, United Arab Emirates; and
P.O. Box 52404, Dubai, United Arab
Emirates; and Mohamed Abdulla
Alqaz Building, Al Maktoum Street,
Al Rigga, Dubai, United Arab
Emirates.
I. Procedural History
On March 17, 2008, Darryl W.
Jackson, the then-Assistant Secretary of
Commerce for Export Enforcement
(‘‘Assistant Secretary’’), signed a TDO
denying Mahan Airways’ export
privileges for a period of 180 days on
the grounds that its issuance was
necessary in the public interest to
prevent an imminent violation of the
Regulations. The TDO also named as
denied persons Blue Airways, of
Yerevan, Armenia (‘‘Blue Airways of
Armenia’’), as well as the ‘‘Balli Group
Respondents,’’ namely, Balli Group PLC,
Balli Aviation, Balli Holdings, Vahid
Alaghband, Hassan Alaghband, Blue
Sky One Ltd., Blue Sky Two Ltd., Blue
Sky Three Ltd., Blue Sky Four Ltd., Blue
Sky Five Ltd., and Blue Sky Six Ltd., all
of the United Kingdom. The TDO was
issued ex parte pursuant to Section
766.24(a), and went into effect on March
21, 2008, the date it was published in
the Federal Register.
On July 18, 2008, in accordance with
Section 766.23 of the Regulations,
Assistant Secretary Jackson issued an
Order adding to the TDO both Blue
Airways FZE, of Dubai, United Arab
Emirates (‘‘the UAE’’), and Blue
Airways, also of Dubai, United Arab
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Emirates (‘‘Blue Airways UAE’’), as
persons related to Blue Airways of
Armenia. (Blue Airways of Armenia,
Blue Airways FZE, and Blue Airways
UAE are hereinafter collectively referred
to as the ‘‘Blue Airways Respondents’’).1
On September 17, 2008, Assistant
Secretary Jackson renewed the TDO for
an additional 180 days in accordance
with Section 766.24 of the Regulations,
via an order effective upon issuance,
and on March 16, 2009, the TDO was
similarly renewed by then-Acting
Assistant Secretary Kevin Delli-Colli.2
On September 11, 2009, Acting
Assistant Secretary Delli-Colli renewed
the TDO for an additional 180 days
against Mahan Airways.3 BIS did not
seek renewal of the TDO against the
Blue Airways Respondents, which BIS
believed at that time had ceased
operating, or against the Balli Group
Respondents.
On March 9, 2010, I renewed the TDO
against Mahan Airways for an
additional 180 days. That renewal was
effective upon issuance and was
published in the Federal Register on
March 18, 2010.
On August 13, 2010, BIS, through its
Office of Export Enforcement (‘‘OEE’’),
filed a written request for renewal of the
TDO against Mahan Airways for an
additional 180 days, and served a copy
of its request on Mahan in accordance
with Section 766.5 of the Regulations.
No opposition to renewal of the TDO
has been received from Mahan Airways.
Additionally, BIS requested that I add
Gatewick LLC (‘‘Gatewick’’) to the TDO
as a related person in accordance with
Section 766.23. Gatewick was provided
notice of BIS’s intent to add it to the
TDO and on August 26, 2010, submitted
a written opposition.
II. Renewal of the TDO
A. Legal Standard
Pursuant to Section 766.24(d)(3) of
the EAR, the sole issue to be considered
in determining whether to continue a
TDO is whether the TDO should be
renewed to prevent an ‘‘imminent’’
violation of the EAR as defined in
Section 766.24. ‘‘A violation may be
‘imminent’ either in time or in degree of
likelihood.’’ 15 CFR 766.24(b)(3). BIS
may show ‘‘either that a violation is
about to occur, or that the general
1 The Related Persons Order was published in the
Federal Register on July 24, 2008.
2 The September 17, 2008 Renewal Order was
published in the Federal Register on October 1,
2008. The March 16, 2009 Renewal Order was
published in the Federal Register on March 25,
2009.
3 The September 11, 2009 Renewal Order was
published in the Federal Register on September 18,
2009.
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circumstances of the matter under
investigation or case under criminal or
administrative charges demonstrate a
likelihood of future violations.’’ Id. As to
the likelihood of future violations, BIS
may show that ‘‘the violation under
investigation or charges is significant,
deliberate, covert and/or likely to occur
again, rather than technical and
negligent [.]’’ Id. A ‘‘lack of information
establishing the precise time a violation
may occur does not preclude a finding
that a violation is imminent, so long as
there is sufficient reason to believe the
likelihood of a violation.’’ Id.
B. The TDO and BIS’s Request for
Renewal
OEE’s request for renewal is based
upon the facts underlying the issuance
of the initial TDO and the TDO renewals
in this matter and the evidence
developed over the course of this
investigation indicating Mahan
Airways’ clear willingness to continue
to disregard U.S. export controls and the
TDO. The initial TDO was issued as a
result of evidence that showed that
Mahan Airways and other parties
engaged in conduct prohibited by the
EAR by knowingly re-exporting to Iran
three U.S.-origin aircraft, specifically
Boeing 747s (‘‘Aircraft 1–3’’), items
subject to the EAR and classified under
Export Control Classification Number
(‘‘ECCN’’) 9A991.b, without the required
U.S. Government authorization. Further
evidence submitted by BIS indicated
that Mahan Airways was involved in the
attempted re-export of three additional
U.S.-origin Boeing 747s (‘‘Aircraft 4–6’’)
to Iran.
As discussed in the September 17,
2008 TDO Renewal Order, evidence
presented by BIS indicated that Aircraft
1–3 continued to be flown on Mahan
Airways’ routes after issuance of the
TDO, in violation of the Regulations and
the TDO itself.4 It also showed that
Aircraft 1–3 had been flown in further
violation of the Regulations and the
TDO on the routes of Iran Air, an
Iranian Government airline. In addition,
as more fully discussed in the March 16,
2009 Renewal Order, in October 2008,
Mahan Airways caused Aircraft 1–3 to
be deregistered from the Armenian civil
aircraft registry and subsequently
registered the aircraft in Iran. The
aircraft were relocated to Iran and were
issued Iranian tail numbers, including
EP–MNA and EP–MNB, and continued
to be operated on Mahan Airways’
4 Engaging in conduct prohibited by a denial
order violates the Regulations. 15 CFR 764.2(a) and
(k).
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routes in violation of the Regulations
and the TDO.
Moreover, as discussed in the
September 11, 2009 and March 9, 2010
Renewal Orders, Mahan Airways
continued to operate at least two of
Aircraft 1–3 in violation of the
Regulations and the TDO,5 and also
committed an additional knowing and
willful violation of the Regulations and
the TDO when it negotiated for and
acquired an additional U.S.-origin
aircraft. The additional aircraft was an
MD–82 aircraft, which was
subsequently painted in Mahan Airways
livery and flown on multiple Mahan
Airways’ routes under tail number TC–
TUA.
The March 9, 2010 Renewal Order
also noted that a court in the United
Kingdom (‘‘U.K.’’) had found Mahan
Airways in contempt of court on
February 1, 2010, for failing to comply
with that court’s December 21, 2009 and
January 12, 2010 orders compelling
Mahan Airways to remove the Boeing
747s from Iran and ground them in the
Netherlands. Mahan Airways and the
Balli Group Respondents have been
litigating before the U.K. court
concerning ownership and control of
Aircraft 1–3. Blue Airways LLC also has
been a party to that litigation. In a letter
to the U.K. court dated January 12, 2010,
Mahan Airways’ Chairman indicated,
inter alia, that Mahan Airways opposes
U.S. Government actions against Iran,
that it continued to operate the aircraft
on its routes in and out of Tehran (and
had 158,000 ‘‘forward bookings’’ for
these aircraft), and that it wished to
continue to do so and would pay
damages if required by that court, rather
than ground the aircraft.
OEE’s evidence indicates that Aircraft
1–3 remain in Mahan Airways’
possession, control, and livery in
Tehran, Iran. These aircraft also remain,
to BIS’s knowledge, airworthy.
OEE also has submitted evidence that
Mahan Airways’ violations of the TDO
have extended beyond operating U.S.origin aircraft in violation of the TDO
and attempting to acquire additional
U.S.-origin aircraft. In February 2009,
while subject to the TDO, Mahan
Airways participated in the export of
computer motherboards, items subject
to the Regulations and designated as
EAR99, from the United States to Iran,
via the UAE, in violation of both the
TDO and the Regulations, by
transporting and/or forwarding the
computer equipment from the UAE to
5 The third Boeing 747 appeared to have
undergone significant service maintenance and may
not have been operational at the time of the March
9, 2010 Renewal Order.
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Iran. Mahan Airways’ violations were
facilitated by Gatewick, which not only
participated in the transaction, but also
has stated to BIS that it is Mahan
Airways’ sole booking agent for cargo
and freight forwarding services in the
UAE.
As discussed below, renewal of the
TDO against Mahan is necessary and
appropriate. Renewal is necessary with
or without the evidence relating to
Mahan Airways’ violations regarding
the computer motherboards, but that
evidence is in any event also pertinent
to BIS’s request to add Gatewick to the
TDO as a related person.
C. Findings
Under the applicable standard set
forth in Section 766.24 of the
Regulations and my review of the record
here, I find that the evidence presented
by BIS convincingly demonstrates that
Mahan Airways has repeatedly violated
the EAR and the TDO, that such
knowing violations have been
significant, deliberate and covert, and
that there is a likelihood of future
violations. I find that, as alleged by OEE,
the violations have involved both U.S.origin aircraft and computer equipment
that are subject to the Regulations. A
renewal of the TDO is needed to give
notice to persons and companies in the
United States and abroad that they
should continue to cease dealing with
Mahan Airways in export transactions
involving items subject to the EAR.
Such a TDO is consistent with the
public interest to prevent imminent
violation of the EAR.6
Accordingly, I find pursuant to
Section 766.24 that renewal of the TDO
for 180 days against Mahan Airways is
necessary in the public interest to
prevent an imminent violation of the
EAR.
III. Addition of Related Person
A. Legal Standard
Section 766.23 of the Regulations
provides that ‘‘[i]n order to prevent
evasion, certain types of orders under
this part may be made applicable not
only to the respondent, but also to other
persons then or thereafter related to the
respondent by ownership, control,
position of responsibility, affiliation, or
other connection in the conduct of trade
or business. Orders that may be made
applicable to related persons include
those that deny or affect export
6 My findings are made pursuant to Section
766.24 and the Regulations, and are not based on
the contempt finding against Mahan Airways in the
U.K. litigation. I note, however, that Mahan
Airways’ statements and actions in that litigation
are consistent with my findings here.
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privileges, including temporary denial
orders * * *’’ 15 CFR 766.23(a).
B. Analysis and Findings
OEE has requested that Gatewick be
added as a related person in order to
prevent evasion of the TDO. OEE’s
request includes evidence, confirmed in
writing by Gatewick, that indicates that
a significant and on-going business
connection between Gatewick and
Mahan Airways. Gatewick officials
previously told BIS during a 2009 post
shipment verification that it acts as
Mahan Airways’ sole booking agent for
cargo and freight forwarding services in
the UAE, a major transshipment hub.
This business connection was again
confirmed by Gatewick in its written
opposition to the related person’s notice
it received from BIS. Gatewick’s
opposition also included a copy of its
General Cargo Sales Agreement (‘‘GSA’’)
with Mahan Airways, which remains in
effect. Through this significant business
relationship, Gatewick has the ability,
with Mahan Airways’ authorization and
agreement, to use Mahan’s import code
to clear UAE customs and then re-book
cargo on outbound Mahan flights,
including to Iran.
In its August 26, 2010 opposition,
Gatewick admits to having a current
GSA with Mahan Airways, but it asserts
that it is not owned by Mahan and does
not have any common directors with
Mahan, and thus should not be added
to the TDO. Gatewick’s submission
includes copies of corporate registration
documents in addition to the GSA with
Mahan. However, rather than distancing
itself from Mahan Airways and its coconspirators, the documents provided
by Gatewick actually reveal other
connections or relationships between
Gatewick and Mahan Airways, as well
as the Blue Airways Respondents.
The GSA with Mahan Airways was
signed on Gatewick’s behalf by its
Managing Director, Pejman Mahmood
Kosarayanifard, also known as Kosarian
Fard, who also owns 35% of Gatewick
according to corporate registration
documents submitted by the company.
Kosarian Fard also played an important
role in Mahan Airways’ acquisition of
Aircraft 1–3 discussed above, as
indicated by evidence obtained by BIS
during its investigation and as
acknowledged by Kosarian Fard in his
testimony in the U.K. litigation
referenced above. Kosarian Fard was a
founder, the majority shareholder, and
the Commercial Director of Blue
Airways of Armenia. In that capacity, he
signed the Boeing 747 lease agreements
with the Balli Group that ultimately led
to Mahan Airways’ acquisition of
Aircraft 1–3.
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Kosarian Fard’s written testimony in
the U.K. litigation included the
following concerning his ‘‘close
relationship’’ with Mahan Airways and
some of the acts he took at its direction:
As I have said, I was majority shareholder
of Blue [Airways] but in the summer of 2007,
I agreed to sell a 51% stake in Blue to Skyco
(UK) Ltd. I did this at the request of Mahan.
Given my close relationship with Mahan, I
did not ask questions but, again, acted on the
basis of the trust I had in Mr. Arabnejad and
Mr. Mahmoudi [two Mahan Airways’
directors].
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Kosarian Fard Written Statement to U.K.
Court (signed and dated May 27, 2009
by hand), at page 7, paragraph 12.
The record also shows that Gatewick
is located at the same G#22 Dubai
Airport Free Zone location formerly
used by the Blue Airways FZE and Blue
Airways UAE.
Based on the information provided by
OEE and Gatewick’s submission, I find
that Gatewick’s significant and on-going
business relationship and/or
connections with Mahan Airways
satisfies the requirements of Section
766.23, and that Gatewick’s addition to
the TDO as a related person is necessary
to prevent evasion. This is demonstrated
not only by the nature and significance
of Gatewick’s relationship with Mahan
Airways and its stated role as Mahan
Airways’ sole booking agent in the UAE
for Mahan’s cargo and freight
forwarding services, but also by
Gatewick’s participation with Mahan
Airways in the 2009 transaction
involving the export of computer
motherboards to Iran, via the UAE, in
violation of the outstanding TDO against
Mahan. It is further demonstrated by
Kosarian Fard’s central role at Gatewick,
as Managing Director and owner, his
admitted close relationship with Mahan
Airways, and the prominent role he
played in the unlawful re-export of
Aircraft 1–3 to Mahan.
IV. Order
It is therefore ordered:
First, that MAHAN AIRWAYS, Mahan
Tower, No. 21, Azadegan St., M.A.
Jenah Exp.Way, Tehran, Iran, and
GATEWICK LLC, A/K/A GATEWICK
FREIGHT & CARGO SERVICES, A/K/A
GATEWICK AVIATION SERVICE, G#22
Dubai Airport Free Zone, P.O. Box
393754, Dubai, United Arab Emirates,
and P.O. Box 52404, Dubai, United Arab
Emirates, and Mohamed Abdulla Alqaz
Building, Al Maktoum Street, Al Rigga,
Dubai, United Arab Emirates (each a
‘‘Denied Person’’ and collectively the
‘‘Denied Persons’’), may not, directly or
indirectly, participate in any way in any
transaction involving any commodity,
software or technology (hereinafter
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collectively referred to as ‘‘item’’)
exported or to be exported from the
United States that is subject to the
Export Administration Regulations
(‘‘EAR’’), or in any other activity subject
to the EAR including, but not limited to:
A. Applying for, obtaining, or using
any license, License Exception, or
export control document;
B. Carrying on negotiations
concerning, or ordering, buying,
receiving, using, selling, delivering,
storing, disposing of, forwarding,
transporting, financing, or otherwise
servicing in any way, any transaction
involving any item exported or to be
exported from the United States that is
subject to the EAR, or in any other
activity subject to the EAR; or
C. Benefiting in any way from any
transaction involving any item exported
or to be exported from the United States
that is subject to the EAR, or in any
other activity subject to the EAR.
Second, that no person may, directly
or indirectly, do any of the following:
A. Export or reexport to or on behalf
of a Denied Person any item subject to
the EAR;
B. Take any action that facilitates the
acquisition or attempted acquisition by
a Denied Person of the ownership,
possession, or control of any item
subject to the EAR that has been or will
be exported from the United States,
including financing or other support
activities related to a transaction
whereby a Denied Person acquires or
attempts to acquire such ownership,
possession or control;
C. Take any action to acquire from or
to facilitate the acquisition or attempted
acquisition from a Denied Person of any
item subject to the EAR that has been
exported from the United States;
D. Obtain from a Denied Person in the
United States any item subject to the
EAR with knowledge or reason to know
that the item will be, or is intended to
be, exported from the United States; or
E. Engage in any transaction to service
any item subject to the EAR that has
been or will be exported from the
United States and which is owned,
possessed or controlled by a Denied
Person, or service any item, of whatever
origin, that is owned, possessed or
controlled by a Denied Person if such
service involves the use of any item
subject to the EAR that has been or will
be exported from the United States. For
purposes of this paragraph, servicing
means installation, maintenance, repair,
modification or testing.
Third, that, after notice and
opportunity for comment as provided in
section 766.23 of the EAR, any other
person, firm, corporation, or business
organization related to a Denied Person
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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 does not
prohibit any export, reexport, or other
transaction subject to the EAR where the
only items involved that are subject to
the EAR are the foreign-produced direct
product of U.S.-origin technology.
In accordance with the provisions of
Sections 766.24(e) and 766.23(c)(2) of
the EAR, Mahan Airways and/or
Gatewick LLC may, at any time, appeal
this Order by filing a full written
statement in support of the appeal with
the Office of the Administrative Law
Judge, U.S. Coast Guard ALJ Docketing
Center, 40 South Gay Street, Baltimore,
Maryland 21202–4022.7
In accordance with the provisions of
Section 766.24(d) of the EAR, BIS may
seek renewal of this Order by filing a
written request not later than 20 days
before the expiration date. A renewal
request may be opposed as provided in
Section 766.24(d), by filing a written
submission with the Assistant Secretary
of Commerce for Export Enforcement,
which must be received not later than
seven days before the expiration date of
the Order.8
A copy of this Order shall be provided
to Mahan Airways and Gatewick LLC
and shall be published in the Federal
Register. This Order is effective
immediately and shall remain in effect
for 180 days.
Issued this 3rd day of September 2010.
David W. Mills,
Assistant Secretary of Commerce for Export
Enforcement.
[FR Doc. 2010–23011 Filed 9–14–10; 8:45 am]
BILLING CODE 3510–DT–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
RIN 0648–XY91
Advisory Committee and Species
Working Group Technical Advisor
Appointments
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
AGENCY:
7 A party named or added to temporary denial
order as a related person may appeal its inclusion
as a related person, but not the underlying basis for
the issuance of the TDO. See Section 766.23(c).
8 A party named or added as a related person may
not oppose the issuance or renewal of a temporary
denial order, but may file an appeal in accordance
with Section 766.23(c). See also note 7, supra.
E:\FR\FM\15SEN1.SGM
15SEN1
]]>Agencies
[Federal Register Volume 75, Number 178 (Wednesday, September 15, 2010)]
[Notices]
[Pages 56052-56055]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-23011]
=======================================================================
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
Action Affecting Export Privileges; Mahan Airways and Gatewick
LLC
Mahan Airways, Mahan Tower, No. 21, Azadegan St., M.A. Jenah Exp. Way,
Tehran, Iran; and Gatewick LLC, a/k/a Gatewick Freight & Cargo
Services, a/k/a/Gatewick Aviation Services, G22 Dubai Airport
Free Zone, P.O. Box 393754, Dubai, United Arab Emirates; and P.O. Box
52404,
[[Page 56053]]
Dubai, United Arab Emirates; and Mohamed Abdulla Alqaz Building, Al
Maktoum Street, Al Rigga, Dubai, United Arab Emirates.
Order Renewing Order Temporarily Denying Export Privileges and Also
Making That Temporary Denial of Export Privileges Applicable to Related
Person
Pursuant to Section 766.24 of the Export Administration
Regulations, 15 CFR Parts 730-774 (2010) (``EAR'' or the
``Regulations''), I hereby grant the request of the Bureau of Industry
and Security (``BIS'') to renew for 180 days the Order Temporarily
Denying the Export Privileges of Mahan Airways (``TDO''), as I find
that renewal of the TDO is necessary in the public interest to prevent
an imminent violation of the EAR. Additionally, pursuant to Section
766.23 of the Regulations, including the provision of notice and an
opportunity to respond, I find it necessary to add the following entity
as a related person:
Gatewick LLC, a/k/a Gatewick Freight & Cargo Services, a/k/a Gatewick
Aviation Services, G22 Dubai Airport Free Zone, P.O. Box
393754, Dubai, United Arab Emirates; and P.O. Box 52404, Dubai, United
Arab Emirates; and Mohamed Abdulla Alqaz Building, Al Maktoum Street,
Al Rigga, Dubai, United Arab Emirates.
I. Procedural History
On March 17, 2008, Darryl W. Jackson, the then-Assistant Secretary
of Commerce for Export Enforcement (``Assistant Secretary''), signed a
TDO denying Mahan Airways' export privileges for a period of 180 days
on the grounds that its issuance was necessary in the public interest
to prevent an imminent violation of the Regulations. The TDO also named
as denied persons Blue Airways, of Yerevan, Armenia (``Blue Airways of
Armenia''), as well as the ``Balli Group Respondents,'' namely, Balli
Group PLC, Balli Aviation, Balli Holdings, Vahid Alaghband, Hassan
Alaghband, Blue Sky One Ltd., Blue Sky Two Ltd., Blue Sky Three Ltd.,
Blue Sky Four Ltd., Blue Sky Five Ltd., and Blue Sky Six Ltd., all of
the United Kingdom. The TDO was issued ex parte pursuant to Section
766.24(a), and went into effect on March 21, 2008, the date it was
published in the Federal Register.
On July 18, 2008, in accordance with Section 766.23 of the
Regulations, Assistant Secretary Jackson issued an Order adding to the
TDO both Blue Airways FZE, of Dubai, United Arab Emirates (``the
UAE''), and Blue Airways, also of Dubai, United Arab Emirates (``Blue
Airways UAE''), as persons related to Blue Airways of Armenia. (Blue
Airways of Armenia, Blue Airways FZE, and Blue Airways UAE are
hereinafter collectively referred to as the ``Blue Airways
Respondents'').\1\
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\1\ The Related Persons Order was published in the Federal
Register on July 24, 2008.
---------------------------------------------------------------------------
On September 17, 2008, Assistant Secretary Jackson renewed the TDO
for an additional 180 days in accordance with Section 766.24 of the
Regulations, via an order effective upon issuance, and on March 16,
2009, the TDO was similarly renewed by then-Acting Assistant Secretary
Kevin Delli-Colli.\2\ On September 11, 2009, Acting Assistant Secretary
Delli-Colli renewed the TDO for an additional 180 days against Mahan
Airways.\3\ BIS did not seek renewal of the TDO against the Blue
Airways Respondents, which BIS believed at that time had ceased
operating, or against the Balli Group Respondents.
---------------------------------------------------------------------------
\2\ The September 17, 2008 Renewal Order was published in the
Federal Register on October 1, 2008. The March 16, 2009 Renewal
Order was published in the Federal Register on March 25, 2009.
\3\ The September 11, 2009 Renewal Order was published in the
Federal Register on September 18, 2009.
---------------------------------------------------------------------------
On March 9, 2010, I renewed the TDO against Mahan Airways for an
additional 180 days. That renewal was effective upon issuance and was
published in the Federal Register on March 18, 2010.
On August 13, 2010, BIS, through its Office of Export Enforcement
(``OEE''), filed a written request for renewal of the TDO against Mahan
Airways for an additional 180 days, and served a copy of its request on
Mahan in accordance with Section 766.5 of the Regulations. No
opposition to renewal of the TDO has been received from Mahan Airways.
Additionally, BIS requested that I add Gatewick LLC (``Gatewick'')
to the TDO as a related person in accordance with Section 766.23.
Gatewick was provided notice of BIS's intent to add it to the TDO and
on August 26, 2010, submitted a written opposition.
II. Renewal of the TDO
A. Legal Standard
Pursuant to Section 766.24(d)(3) of the EAR, the sole issue to be
considered in determining whether to continue a TDO is whether the TDO
should be renewed to prevent an ``imminent'' violation of the EAR as
defined in Section 766.24. ``A violation may be `imminent' either in
time or in degree of likelihood.'' 15 CFR 766.24(b)(3). BIS may show
``either that a violation is about to occur, or that the general
circumstances of the matter under investigation or case under criminal
or administrative charges demonstrate a likelihood of future
violations.'' Id. As to the likelihood of future violations, BIS may
show that ``the violation under investigation or charges is
significant, deliberate, covert and/or likely to occur again, rather
than technical and negligent [.]'' Id. A ``lack of information
establishing the precise time a violation may occur does not preclude a
finding that a violation is imminent, so long as there is sufficient
reason to believe the likelihood of a violation.'' Id.
B. The TDO and BIS's Request for Renewal
OEE's request for renewal is based upon the facts underlying the
issuance of the initial TDO and the TDO renewals in this matter and the
evidence developed over the course of this investigation indicating
Mahan Airways' clear willingness to continue to disregard U.S. export
controls and the TDO. The initial TDO was issued as a result of
evidence that showed that Mahan Airways and other parties engaged in
conduct prohibited by the EAR by knowingly re-exporting to Iran three
U.S.-origin aircraft, specifically Boeing 747s (``Aircraft 1-3''),
items subject to the EAR and classified under Export Control
Classification Number (``ECCN'') 9A991.b, without the required U.S.
Government authorization. Further evidence submitted by BIS indicated
that Mahan Airways was involved in the attempted re-export of three
additional U.S.-origin Boeing 747s (``Aircraft 4-6'') to Iran.
As discussed in the September 17, 2008 TDO Renewal Order, evidence
presented by BIS indicated that Aircraft 1-3 continued to be flown on
Mahan Airways' routes after issuance of the TDO, in violation of the
Regulations and the TDO itself.\4\ It also showed that Aircraft 1-3 had
been flown in further violation of the Regulations and the TDO on the
routes of Iran Air, an Iranian Government airline. In addition, as more
fully discussed in the March 16, 2009 Renewal Order, in October 2008,
Mahan Airways caused Aircraft 1-3 to be deregistered from the Armenian
civil aircraft registry and subsequently registered the aircraft in
Iran. The aircraft were relocated to Iran and were issued Iranian tail
numbers, including EP-MNA and EP-MNB, and continued to be operated on
Mahan Airways'
[[Page 56054]]
routes in violation of the Regulations and the TDO.
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\4\ Engaging in conduct prohibited by a denial order violates
the Regulations. 15 CFR 764.2(a) and (k).
---------------------------------------------------------------------------
Moreover, as discussed in the September 11, 2009 and March 9, 2010
Renewal Orders, Mahan Airways continued to operate at least two of
Aircraft 1-3 in violation of the Regulations and the TDO,\5\ and also
committed an additional knowing and willful violation of the
Regulations and the TDO when it negotiated for and acquired an
additional U.S.-origin aircraft. The additional aircraft was an MD-82
aircraft, which was subsequently painted in Mahan Airways livery and
flown on multiple Mahan Airways' routes under tail number TC-TUA.
---------------------------------------------------------------------------
\5\ The third Boeing 747 appeared to have undergone significant
service maintenance and may not have been operational at the time of
the March 9, 2010 Renewal Order.
---------------------------------------------------------------------------
The March 9, 2010 Renewal Order also noted that a court in the
United Kingdom (``U.K.'') had found Mahan Airways in contempt of court
on February 1, 2010, for failing to comply with that court's December
21, 2009 and January 12, 2010 orders compelling Mahan Airways to remove
the Boeing 747s from Iran and ground them in the Netherlands. Mahan
Airways and the Balli Group Respondents have been litigating before the
U.K. court concerning ownership and control of Aircraft 1-3. Blue
Airways LLC also has been a party to that litigation. In a letter to
the U.K. court dated January 12, 2010, Mahan Airways' Chairman
indicated, inter alia, that Mahan Airways opposes U.S. Government
actions against Iran, that it continued to operate the aircraft on its
routes in and out of Tehran (and had 158,000 ``forward bookings'' for
these aircraft), and that it wished to continue to do so and would pay
damages if required by that court, rather than ground the aircraft.
OEE's evidence indicates that Aircraft 1-3 remain in Mahan Airways'
possession, control, and livery in Tehran, Iran. These aircraft also
remain, to BIS's knowledge, airworthy.
OEE also has submitted evidence that Mahan Airways' violations of
the TDO have extended beyond operating U.S.-origin aircraft in
violation of the TDO and attempting to acquire additional U.S.-origin
aircraft. In February 2009, while subject to the TDO, Mahan Airways
participated in the export of computer motherboards, items subject to
the Regulations and designated as EAR99, from the United States to
Iran, via the UAE, in violation of both the TDO and the Regulations, by
transporting and/or forwarding the computer equipment from the UAE to
Iran. Mahan Airways' violations were facilitated by Gatewick, which not
only participated in the transaction, but also has stated to BIS that
it is Mahan Airways' sole booking agent for cargo and freight
forwarding services in the UAE.
As discussed below, renewal of the TDO against Mahan is necessary
and appropriate. Renewal is necessary with or without the evidence
relating to Mahan Airways' violations regarding the computer
motherboards, but that evidence is in any event also pertinent to BIS's
request to add Gatewick to the TDO as a related person.
C. Findings
Under the applicable standard set forth in Section 766.24 of the
Regulations and my review of the record here, I find that the evidence
presented by BIS convincingly demonstrates that Mahan Airways has
repeatedly violated the EAR and the TDO, that such knowing violations
have been significant, deliberate and covert, and that there is a
likelihood of future violations. I find that, as alleged by OEE, the
violations have involved both U.S.-origin aircraft and computer
equipment that are subject to the Regulations. A renewal of the TDO is
needed to give notice to persons and companies in the United States and
abroad that they should continue to cease dealing with Mahan Airways in
export transactions involving items subject to the EAR. Such a TDO is
consistent with the public interest to prevent imminent violation of
the EAR.\6\
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\6\ My findings are made pursuant to Section 766.24 and the
Regulations, and are not based on the contempt finding against Mahan
Airways in the U.K. litigation. I note, however, that Mahan Airways'
statements and actions in that litigation are consistent with my
findings here.
---------------------------------------------------------------------------
Accordingly, I find pursuant to Section 766.24 that renewal of the
TDO for 180 days against Mahan Airways is necessary in the public
interest to prevent an imminent violation of the EAR.
III. Addition of Related Person
A. Legal Standard
Section 766.23 of the Regulations provides that ``[i]n order to
prevent evasion, certain types of orders under this part may be made
applicable not only to the respondent, but also to other persons then
or thereafter related to the respondent by ownership, control, position
of responsibility, affiliation, or other connection in the conduct of
trade or business. Orders that may be made applicable to related
persons include those that deny or affect export privileges, including
temporary denial orders * * *'' 15 CFR 766.23(a).
B. Analysis and Findings
OEE has requested that Gatewick be added as a related person in
order to prevent evasion of the TDO. OEE's request includes evidence,
confirmed in writing by Gatewick, that indicates that a significant and
on-going business connection between Gatewick and Mahan Airways.
Gatewick officials previously told BIS during a 2009 post shipment
verification that it acts as Mahan Airways' sole booking agent for
cargo and freight forwarding services in the UAE, a major transshipment
hub. This business connection was again confirmed by Gatewick in its
written opposition to the related person's notice it received from BIS.
Gatewick's opposition also included a copy of its General Cargo Sales
Agreement (``GSA'') with Mahan Airways, which remains in effect.
Through this significant business relationship, Gatewick has the
ability, with Mahan Airways' authorization and agreement, to use
Mahan's import code to clear UAE customs and then re-book cargo on
outbound Mahan flights, including to Iran.
In its August 26, 2010 opposition, Gatewick admits to having a
current GSA with Mahan Airways, but it asserts that it is not owned by
Mahan and does not have any common directors with Mahan, and thus
should not be added to the TDO. Gatewick's submission includes copies
of corporate registration documents in addition to the GSA with Mahan.
However, rather than distancing itself from Mahan Airways and its co-
conspirators, the documents provided by Gatewick actually reveal other
connections or relationships between Gatewick and Mahan Airways, as
well as the Blue Airways Respondents.
The GSA with Mahan Airways was signed on Gatewick's behalf by its
Managing Director, Pejman Mahmood Kosarayanifard, also known as
Kosarian Fard, who also owns 35% of Gatewick according to corporate
registration documents submitted by the company. Kosarian Fard also
played an important role in Mahan Airways' acquisition of Aircraft 1-3
discussed above, as indicated by evidence obtained by BIS during its
investigation and as acknowledged by Kosarian Fard in his testimony in
the U.K. litigation referenced above. Kosarian Fard was a founder, the
majority shareholder, and the Commercial Director of Blue Airways of
Armenia. In that capacity, he signed the Boeing 747 lease agreements
with the Balli Group that ultimately led to Mahan Airways' acquisition
of Aircraft 1-3.
[[Page 56055]]
Kosarian Fard's written testimony in the U.K. litigation included
the following concerning his ``close relationship'' with Mahan Airways
and some of the acts he took at its direction:
As I have said, I was majority shareholder of Blue [Airways] but
in the summer of 2007, I agreed to sell a 51% stake in Blue to Skyco
(UK) Ltd. I did this at the request of Mahan. Given my close
relationship with Mahan, I did not ask questions but, again, acted
on the basis of the trust I had in Mr. Arabnejad and Mr. Mahmoudi
[two Mahan Airways' directors].
Kosarian Fard Written Statement to U.K. Court (signed and dated May 27,
2009 by hand), at page 7, paragraph 12.
The record also shows that Gatewick is located at the same
G22 Dubai Airport Free Zone location formerly used by the Blue
Airways FZE and Blue Airways UAE.
Based on the information provided by OEE and Gatewick's submission,
I find that Gatewick's significant and on-going business relationship
and/or connections with Mahan Airways satisfies the requirements of
Section 766.23, and that Gatewick's addition to the TDO as a related
person is necessary to prevent evasion. This is demonstrated not only
by the nature and significance of Gatewick's relationship with Mahan
Airways and its stated role as Mahan Airways' sole booking agent in the
UAE for Mahan's cargo and freight forwarding services, but also by
Gatewick's participation with Mahan Airways in the 2009 transaction
involving the export of computer motherboards to Iran, via the UAE, in
violation of the outstanding TDO against Mahan. It is further
demonstrated by Kosarian Fard's central role at Gatewick, as Managing
Director and owner, his admitted close relationship with Mahan Airways,
and the prominent role he played in the unlawful re-export of Aircraft
1-3 to Mahan.
IV. Order
It is therefore ordered:
First, that MAHAN AIRWAYS, Mahan Tower, No. 21, Azadegan St., M.A.
Jenah Exp.Way, Tehran, Iran, and GATEWICK LLC, A/K/A GATEWICK FREIGHT &
CARGO SERVICES, A/K/A GATEWICK AVIATION SERVICE, G22 Dubai
Airport Free Zone, P.O. Box 393754, Dubai, United Arab Emirates, and
P.O. Box 52404, Dubai, United Arab Emirates, and Mohamed Abdulla Alqaz
Building, Al Maktoum Street, Al Rigga, Dubai, United Arab Emirates
(each a ``Denied Person'' and collectively the ``Denied Persons''), may
not, directly or indirectly, participate in any way in any transaction
involving any commodity, software or technology (hereinafter
collectively referred to as ``item'') exported or to be exported from
the United States that is subject to the Export Administration
Regulations (``EAR''), or in any other activity subject to the EAR
including, but not limited to:
A. Applying for, obtaining, or using any license, License
Exception, or export control document;
B. Carrying on negotiations concerning, or ordering, buying,
receiving, using, selling, delivering, storing, disposing of,
forwarding, transporting, financing, or otherwise servicing in any way,
any transaction involving any item exported or to be exported from the
United States that is subject to the EAR, or in any other activity
subject to the EAR; or
C. Benefiting in any way from any transaction involving any item
exported or to be exported from the United States that is subject to
the EAR, or in any other activity subject to the EAR.
Second, that no person may, directly or indirectly, do any of the
following:
A. Export or reexport to or on behalf of a Denied Person any item
subject to the EAR;
B. Take any action that facilitates the acquisition or attempted
acquisition by a Denied Person of the ownership, possession, or control
of any item subject to the EAR that has been or will be exported from
the United States, including financing or other support activities
related to a transaction whereby a Denied Person acquires or attempts
to acquire such ownership, possession or control;
C. Take any action to acquire from or to facilitate the acquisition
or attempted acquisition from a Denied Person of any item subject to
the EAR that has been exported from the United States;
D. Obtain from a Denied Person in the United States any item
subject to the EAR with knowledge or reason to know that the item will
be, or is intended to be, exported from the United States; or
E. Engage in any transaction to service any item subject to the EAR
that has been or will be exported from the United States and which is
owned, possessed or controlled by a Denied Person, or service any item,
of whatever origin, that is owned, possessed or controlled by a Denied
Person if such service involves the use of any item subject to the EAR
that has been or will be exported from the United States. For purposes
of this paragraph, servicing means installation, maintenance, repair,
modification or testing.
Third, that, after notice and opportunity for comment as provided
in section 766.23 of the EAR, any other person, firm, corporation, or
business organization related to a 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
this Order.
Fourth, that this Order does not prohibit any export, reexport, or
other transaction subject to the EAR where the only items involved that
are subject to the EAR are the foreign-produced direct product of U.S.-
origin technology.
In accordance with the provisions of Sections 766.24(e) and
766.23(c)(2) of the EAR, Mahan Airways and/or Gatewick LLC may, at any
time, appeal this Order by filing a full written statement in support
of the appeal with the Office of the Administrative Law Judge, U.S.
Coast Guard ALJ Docketing Center, 40 South Gay Street, Baltimore,
Maryland 21202-4022.\7\
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\7\ A party named or added to temporary denial order as a
related person may appeal its inclusion as a related person, but not
the underlying basis for the issuance of the TDO. See Section
766.23(c).
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In accordance with the provisions of Section 766.24(d) of the EAR,
BIS may seek renewal of this Order by filing a written request not
later than 20 days before the expiration date. A renewal request may be
opposed as provided in Section 766.24(d), by filing a written
submission with the Assistant Secretary of Commerce for Export
Enforcement, which must be received not later than seven days before
the expiration date of the Order.\8\
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\8\ A party named or added as a related person may not oppose
the issuance or renewal of a temporary denial order, but may file an
appeal in accordance with Section 766.23(c). See also note 7, supra.
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A copy of this Order shall be provided to Mahan Airways and
Gatewick LLC and shall be published in the Federal Register. This Order
is effective immediately and shall remain in effect for 180 days.
Issued this 3rd day of September 2010.
David W. Mills,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2010-23011 Filed 9-14-10; 8:45 am]
BILLING CODE 3510-DT-P
