Order Relating to Xun Wang, 72387-72388 [2011-30222]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Industry and Security

[Federal Register Volume 76, Number 226 (Wednesday, November 23, 2011)]
[Notices]
[Pages 72387-72388]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-30222]


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Federal Register / Vol. 76, No. 226 / Wednesday, November 23, 2011 / 
Notices

[[Page 72387]]



DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[11-BIS-0004]


Order Relating to Xun Wang

In the Matter of:

Xun Wang, No. 30, Lane 3535, Yindu Road, Shanghai, 201108, People's 
Republic of China,

and

115 Tobin Clark Drive, Hillsborough, CA 94010, Respondent.

    The Bureau of Industry and Security, U.S. Department of Commerce 
(``BIS''), has notified Xun Wang (``Wang'') of its intention to 
initiate an administrative proceeding against Wang pursuant to Section 
766.3 of the Export Administration Regulations (the 
``Regulations''),\1\ and Section 13(c) of the Export Administration Act 
of 1979, as amended (the ``Act''),\2\ through the issuance of a 
Charging Letter to Wang that, as amended, (``Charging Letter'') alleges 
that Wang committed one violation of the Regulations. Specifically, the 
charge is:
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    \1\ The Regulations are currently codified in the Code of 
Federal Regulations at 15 CFR parts 730-774 (2011). The charged 
violation occurred in 2006 and 2007. The Regulations governing the 
violation at issue are found in the 2006 and 2007 versions of the 
Code of Federal Regulations. 15 CFR parts 730-774 (2006-2007). The 
2011 Regulations set forth the procedures that apply to this matter.
    \2\ 50 U.S.C. app. 2401-2420 (2000). Since August 21, 2001, the 
Act has been in lapse and the President, through Executive Order 
13222 of August 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), which has 
been extended by successive Presidential Notices, the most recent 
being that of August 12, 2011 (76 FR 50,661 (Aug. 16, 2011)), has 
continued the Regulations in effect under the International 
Emergency Economic Powers Act (50 U.S.C. 1701, et seq.).
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Charge 1 15 CFR 764.2(d)--Conspiracy

    Beginning on or about June 15, 2006, and continuing through on 
or about March 2007, Xun Wang conspired and acted in concert with 
others, known and unknown, to bring about an act that constitutes a 
violation of the Regulations. The purpose of the conspiracy was to 
bring about the export of epoxy paint and epoxy paint thinner, items 
subject to the Regulations, to Pakistan, through China, for use in 
the Chasma 2 nuclear power plant that was under construction in 
Islamabad, Pakistan, and was a subordinate entity under the 
ownership and control of the Pakistan Atomic Energy Commission 
(``PAEC''), an entity that is listed on the Entity List set forth in 
Supplement No. 4 to Part 744 of the Regulations, without the 
required Department of Commerce license. The Chasma 2 nuclear plant 
was being constructed for PAEC by China Zhongyuan Engineering 
Corporation (``Zhongyuan'') with the assistance of subcontractor 
China Nuclear Industry Huaxing Construction Co. Ltd. (``Huaxing''). 
The epoxy paint and thinner were designated as EAR99 \3\ items and 
were certified as meeting industry standards for ``Level 1'' use in 
a nuclear reactor and core. Pursuant to Section 744.1 and Supplement 
No. 4 to Part 744 of the Regulations, a Department of Commerce 
license was required before these items could be exported or 
reexported to the PAEC or any PAEC subordinate nuclear power plant.
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    \3\ EAR99 is a designation for items subject to the Regulations 
but not listed on the Commerce Control List. 15 CFR 734.3(c) (2011).
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    On or about June 8, 2006, Wang, at the time Managing Director of 
PPG Paints Trading (Shanghai) Co., Ltd. (``PPG Paints Trading''), 
learned that PPG's application for a U.S. export license to export 
the items to the PAEC's Chasma 2 plant had been denied. On or about 
June 15, 2006, Wang and other representatives of PPG Paints Trading 
met with Huaxing to discuss the denial of the license and whether 
PPG Paints Trading would be able to supply Huaxing with U.S.-origin 
PPG epoxy paint and thinner. During this meeting, Wang and Huaxing 
developed and agreed upon a scheme under which PPG Paints Trading 
would supply the PPG epoxy paint and thinner to Huaxing for use in 
the PAEC facility despite the lack of a U.S. export license. Under 
this scheme, a third-party Chinese distributor would be added to the 
transaction to facilitate obtaining the items from PPG and the 
transshipment of the items to Pakistan after their arrival in China. 
This transaction structure was designed to avoid the shipment of the 
items from the United States directly to the PAEC's Chasma 2 
facility in Pakistan and the U.S. license requirement for such an 
export. Thereafter, the conspirators, including Xun Wang, took and/
or directed actions in furtherance of the conspiracy, including, 
inter alia, selecting a third party in China to serve as the 
intermediary party in the transaction and arranging for the delivery 
of the items to China from PPG in the United States.
    In so doing, Wang committed one violation of Section 764.2(d) of 
the Regulations.
    Whereas, BIS and Wang have entered into a Settlement Agreement 
pursuant to Section 766.18(b) of the Regulations, whereby they agreed 
to settle this matter in accordance with the terms and conditions set 
forth therein; and
    Whereas, I have approved of the terms of such Settlement Agreement;
    It Is Therefore Ordered:
    First, Wang shall be assessed a civil penalty in the amount of 
$250,000. Wang shall pay $50,000 to the U.S. Department of Commerce 
within 30 days of the date of the Order. Wang shall pay the U.S. 
Department of Commerce $50,000 not later than April 30, 2012; $50,000 
not later than July 30, 2012; and $50,000 not later than October 30, 
2012. Payment of the remaining $50,000 shall be suspended for a period 
of five years from the date of the Order, and thereafter shall be 
waived, provided that during the five-year payment probationary period 
under the Order, Wang has committed no violation of the Act, or any 
regulation, order, license or authorization issued thereunder and has 
made full and timely payment of $200,000 as set forth above.
    Second, that, pursuant to the Debt Collection Act of 1982, as 
amended (31 U.S.C. 3701-3720E (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, 
Wang will be assessed, in addition to the full amount of the civil 
penalty and interest, a penalty charge and an administrative charge, as 
more fully described in the attached Notice.
    Third, that the full and timely payment of the civil penalty in 
accordance with the payment schedule set forth above is hereby made a 
condition to the granting, restoration, or continuing validity of any 
export license, license exception, permission, or privilege granted, or 
to be granted, to Wang.
    Fourth, that for a period of ten (10) years from the date of entry 
of the Order, Xun Wang, with last known addresses of No. 30, Lane 3535, 
Yindu Road, Shanghai, 201108, People's Republic of China, and 115 Tobin 
Clark Drive, Hillsborough, CA 94010, and when acting for or on her 
behalf, her successors, assigns, representatives, agents, or employees 
(hereinafter collectively referred to as ``Denied

[[Page 72388]]

Person''), may not, directly or indirectly, participate in any way in 
any transaction involving any commodity, software or technology 
(hereinafter collectively referred to as ``item'') exported or to be 
exported from the United States that is subject to the Regulations, or 
in any other activity subject to the Regulations, including, but 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. Benefitting 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.
    Fifth, 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;
    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.
    Sixth, that, after notice and opportunity for comment as provided 
in Section 766.23 of the Regulations, any person, firm, corporation, or 
business organization related to 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.
    Seventh, that, as authorized by Section 766.18(c) of the 
Regulations, the ten-year denial period set forth above shall be active 
for a period of five years from the date of the Order. The remaining 
five years of the denial period shall be suspended, and shall 
thereafter be waived at the conclusion of the ten-year denial period, 
provided that Wang has made full and timely payment of the civil 
penalty as set forth above and has committed no other violation of the 
Act or any regulation, order, license or authorization issued 
thereunder during the ten-year denial period. If Wang does not make 
full and timely payment of the civil penalty or commits another 
violation, the suspension may be modified or revoked by BIS.
    Eighth, that the Charging Letter, the Settlement Agreement, and 
this Order shall be made available to the public.
    Ninth, that this Order shall be served on Wang and on BIS, and 
shall be published in the Federal Register.
    This Order, which constitutes the final agency action in this 
matter, is effective immediately.

     Issued this 16 day of November, 2011.
David W. Mills,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2011-30222 Filed 11-22-11; 8:45 a.m.]
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