Order Denying Export Privileges, 34340-34342 [2012-14109]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Industry and Security

[Federal Register Volume 77, Number 112 (Monday, June 11, 2012)]
[Notices]
[Pages 34340-34342]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14109]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Order Denying Export Privileges

    In the Matter of: Chitron Electronics, Inc., 102 Clematis Avenue, 
Suite 7, Waltham, MA 02453, Respondent, Chitron Electronics Company 
Limited, a/k/a Chi-Chuang Electronics Company Limited, a/k/a Shenzhen 
Chitron Electronics Company Limited, 2127 Sungang Road, Huatong 
Building 19/F, Luohu District, Shenzhen, 518001, China and Chitron (HK) 
Electronics Company Limited, a/k/a C.I.C. Electronics (HK) Limited, 
Room 05 13/F Nanyang Plaza, No. 57 Hung To Road, Kwum Tong, Kowloon, 
Hong Kong, Related Persons.

A. Denial of Export Privileges of Chitron Electronics, Inc.

    On January 28, 2011, in the U.S. District Court, District of 
Massachusetts, Chitron Electronics, Inc. (``Chitron-US'') was convicted 
of violating the International Emergency Economic Powers Act (50 U.S.C. 
1701 et seq. (2000)) (``IEEPA'') and Section 38 of the Arms Export 
Control Act (22 U.S.C. 2778 (2000)) (``AECA''). Specifically, Chitron-
US was convicted of illegally exporting various electronic components 
and other items subject to the Export Administration Regulations 
(``EAR'' or ``Regulations'') \1\ to end-users in China between 2004 and 
2007, including to entities on the BIS Entity List, and for military 
end-uses. Chitron-US was also convicted of illegally exporting military 
electronic components designated on the U.S. Munitions List to China 
through Hong Kong between 2004 and 2007. In addition, Chitron-US was 
convicted of conspiring over a period of 10 years to violate the IEEPA 
and AECA (18 U.S.C. 371) and aiding and abetting (18 U.S.C. 2). 
Chitron-US was ordered to pay a $10,400 Special Assessment and a $15.5 
million fine. Chitron-US is also listed on the Department of State's 
Debarred List.
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    \1\ The Regulations are currently codified in the Code of 
Federal Regulations at 15 CFR parts 730-774 (2011). The Regulations 
issued pursuant to the EAA (50 U.S.C. app. Sec. Sec.  2401-2420 
(2000)). Since August 21, 2001, the EAA has been in lapse and the 
President, through Executive Order 13222 of August 17, 2001 (3 
C.F.R., 2001 Comp. 783 (2002)), which has been extended by 
successive Presidential Notices, the most recent being that of 
August 12, 2011 (76 FR 50661, August 16, 2011), has continued the 
Regulations in effect under the International Emergency Economic 
Powers Act (50 U.S.C. 1701 et seq. (2000)).
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    Section 766.25 of the Regulations provides, in pertinent part, that 
``[t]he Director of the Office of Exporter Services, in consultation 
with the

[[Page 34341]]

Director of the Office of Export Enforcement, may deny the export 
privileges of any person who has been convicted of a violation of the 
[Export Administration Act (``EAA'')], the EAR, of any order, license 
or authorization issued thereunder; any regulation, license, or order 
issued under the International Emergency Economic Powers Act (50 U.S.C. 
1701-1706); 18 U.S.C. 793, 794 or 798; section 4(b) of the Internal 
Security Act of 1950 (50 U.S.C. 783(b)), or section 38 of the Arms 
Export Control Act (22 U.S.C. 2778).'' 15 CFR 766.25(a); see also 
Section 11(h) of the EAA, 50 U.S.C. app. Sec.  2410(h). The denial of 
export privileges under this provision may be for a period of up to 10 
years from the date of the conviction. 15 CFR 766.25(d); see also 50 
U.S.C. app. Sec.  2410(h). In addition, Section 750.8 of the 
Regulations states that the Bureau of Industry and Security's Office of 
Exporter Services may revoke any Bureau of Industry and Security 
(``BIS'') licenses previously issued in which the person had an 
interest in at the time of his conviction.
    I have received notice of Chitron-US's conviction for violating 
IEEPA and the AECA, and have provided notice and an opportunity for 
Chitron-US to make a written submission to BIS, as provided in Section 
766.25 of the Regulations. I have not received a submission from 
Chitron-US. Based upon my review and consultations with BIS's Office of 
Export Enforcement, including its Director, and the facts available to 
BIS, I have decided to deny Chitron-US's export privileges under the 
Regulations for a period of 10 years from the date of Chitron-US's 
conviction. I have also decided to revoke all licenses issued pursuant 
to the Act or Regulations in which Chitron-US had an interest at the 
time of its conviction.

B. Denial of Export Privileges of Related Person

    Pursuant to Sections 766.25(h) and 766.23 of the Regulations, the 
Director of BIS's Office of Exporter Services, in consultation with the 
Director of BIS's Office of Export Enforcement, may take action to name 
persons related to a Respondent by ownership, control, position of 
responsibility, affiliation, or other connection in the conduct of 
trade or business in order to prevent evasion of a denial order. 
Chitron Electronics Company Limited (``Chitron-Shenzhen''), located in 
China, is the parent company of Chitron-US and was also indicted for 
the same crimes as Chitron-US. Chitron (HK) Electronics Company Limited 
(``Chitron-HK''), is a branch office of Chitron-US, located in Hong 
Kong. The illegal enterprise involved the use of Chitron-US, as a front 
company, and Chitron-HK, as a transit point, to funnel goods to its 
parent company, Chitron-Shenzhen for final delivery to end-users in 
China. Chitron-Shenzhen and Chitron-HK are related to Chitron-US by 
ownership, control, position of responsibility, affiliation, or other 
connection in the conduct of trade or business. BIS believes that 
naming Chitron-Shenzhen and Chitron-HK as related persons to Chitron-US 
is necessary to avoid evasion of the denial order against Chitron-US.
    As provided in Section 766.23 of the Regulations, I gave notice to 
Chitron-Shenzhen and Chitron-HK that their export privileges under the 
Regulations could be denied for up to 10 years due to their 
relationship with Chitron-US and that BIS believes naming them as 
persons related to Chitron-US would be necessary to prevent evasion of 
a denial order imposed against Chitron-US. In providing such notice, I 
gave Chitron-Shenzhen and Chitron-HK an opportunity to oppose their 
addition to the Chitron-US Denial Order as a related party. Having 
received no submission, I have decided, following consultations with 
BIS's Office of Export Enforcement, including its Director, to name 
Chitron-Shenzhen and Chitron-HK as Related Persons to the Chitron-US 
Denial Order, thereby denying their export privileges for 10 years from 
the date of Chitron-US's conviction.
    I have also decided to revoke all licenses issued pursuant to the 
Act or Regulations in which the Related Persons had an interest at the 
time of Chitron-US's conviction. The 10-year denial period will end on 
January 28, 2021.
    Accordingly, it is hereby ordered:
    I. Until January 28, 2021, Chitron Electronics, Inc. with a last 
known address at: 102 Clematis Avenue, Suite 7, Waltham, MA 02453, and 
when acting for or on behalf of Chitron-US, its successors or assigns, 
agents or employees (collectively referred to hereinafter as the 
``Denied Person''), and the following persons related to the Denied 
Person as defined by Section 766.23 of the Regulations: Chitron 
Electronics Company Limited, a/k/a Chi-Chuang Electronics Company 
Limited, a/k/a Shenzhen Chitron Electronics Company Limited, with a 
last known address at: 2127 Sungang Road, Huatong Building 19/F, Luohu 
District, Shenzhen, 518001, China; and Chitron (HK) Electronics Company 
Limited, a/k/a C.I.C. Electronics (HK) Limited, with a last known 
address at: Room 05 13/F Nanyang Plaza, No. 57 Hung To Road, Kwum Tong, 
Kowloon, Hong Kong, and when acting for or on their behalf, their 
successors or assigns, agents, or employees (``the Related Persons'') 
(together, the Denied Person and the Related Persons are ``Persons 
Subject to this Order''), 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.
    II. No person may, directly or indirectly, do any of the following:
    A. Export or reexport to or on behalf of the Persons Subject to 
this Order any item subject to the Regulations;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by the Persons Subject to this Order 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 Persons 
Subject to this Order acquire or attempt to acquire such ownership, 
possession or control;
    C. Take any action to acquire from or to facilitate the acquisition 
or attempted acquisition from the Persons Subject to this Order of any 
item subject to the Regulations that has been exported from the United 
States;
    D. Obtain from the Persons Subject to this Order 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 Persons

[[Page 34342]]

Subject to this Order, or service any item, of whatever origin, that is 
owned, possessed or controlled by the Persons Subject to this Order 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.
    III. In addition to the Related Persons named above, after notice 
and opportunity for comment as provided in section 766.23 of the 
Regulations, any other 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 this 
Order if necessary to prevent evasion of the Order.
    IV. 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.
    V. This Order is effective immediately and shall remain in effect 
until January 28, 2021.
    VI. In accordance with Part 756 of the Regulations, Chitron-US may 
file an appeal of this Order with the Under Secretary of Commerce for 
Industry and Security. The appeal must be filed within 45 days from the 
date of this Order and must comply with the provisions of Part 756 of 
the Regulations.
    VII. In accordance with Part 756 of the Regulations, the Related 
Persons may also file an appeal of this Order with the Under Secretary 
of Commerce for Industry and Security. The appeal must be filed within 
45 days from the date of this Order and must comply with the provisions 
of Part 756 of the Regulations.
    VIII. A copy of this Order shall be delivered to the Denied Person 
and the Related Persons. This Order shall be published in the Federal 
Register.

    Issued this 4th day of June, 2012.
 Bernard Kritzer,
Director, Office of Exporter Services.
[FR Doc. 2012-14109 Filed 6-8-12; 8:45 am]
BILLING CODE P