Order Denying Export Privileges, 40024-40025 [2019-17325]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Industry and Security

[Federal Register Volume 84, Number 156 (Tuesday, August 13, 2019)]
[Notices]
[Pages 40024-40025]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17325]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Order Denying Export Privileges

In the Matter of: Michael Shapovalov, a/k/a Mikhail Shapovalov, 
Inmate Number: 25296-014, Moshannon Valley Correctional Institution, 
555 Geo Drive, Philipsburg, PA 16866.

    On May 23, 2018, in the U.S. District Court for the District of 
Connecticut, Michael Shapovalov a/k/a Mikhail Shapovalov 
(``Shapovalov'') was convicted of violating Section 38 of the Arms 
Export Control Act (22 U.S.C. 2778 (2012)) (``AECA''). Shapovalov was 
convicted of violating Section 38 of the AECA by knowingly and 
willfully exporting and causing to be exported, from the United States 
to Latvia, a barrel and breech casing for a Glock carbine pistol with 
markings ``G17 19123 mech-tech made in USA,'' items designated as 
defense articles on the United States Munitions List, without the 
required U.S. Department of State licenses. Shapovalov was sentenced to 
34 months in prison, three years of supervised release, and an 
assessment of $100.
    The Export Administration Regulations (``EAR'' or ``Regulations'') 
are administered and enforced by the U.S. Department of Commerce's 
Bureau of Industry and Security (``BIS'').\1\ Section 766.25 of the 
Regulations provides, in pertinent part, that the ``Director of [BIS's] 
Office of Exporter Services, in consultation with the Director of 
[BIS's] Office of Export Enforcement, may deny the export privileges of 
any person who has been convicted of a violation of . . . section 38 of 
the Arms Export Control Act (22 U.S.C. 2778).'' 15 CFR 766.25(a). 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).\2\ In 
addition, pursuant to Section 750.8 of the Regulations, BIS's Office of 
Exporter Services may revoke any BIS-issued licenses in which the 
person had an interest at the time of his/her conviction.\3\
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    \1\ The Regulations are currently codified in the Code of 
Federal Regulations at 15 CFR parts 730-774 (2019). The Regulations 
originally issued under the Export Administration Act of 1979, as 
amended, 50 U.S.C. 4601-4623 (Supp. III 2015) (``EAA''), which 
lapsed on August 21, 2001. 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 August 8, 2018 (83 FR 39,871 (Aug. 13, 2018)), 
continued the Regulations in full force and effect under the 
International Emergency Economic Powers Act, 50 U.S.C. 1701, et seq. 
(2012) (``IEEPA''). On August 13, 2018, the President signed into 
law the John S. McCain National Defense Authorization Act for Fiscal 
Year 2019, which includes the Export Control Reform Act of 2018, 
Title XVII, Subtitle B of Public Law 115-232, 132 Stat. 2208 
(``ECRA''). While Section 1766 of ECRA repeals the provisions of the 
EAA (except for three sections which are inapplicable here), Section 
1768 of ECRA provides, in pertinent part, that all rules and 
regulations that were made or issued under the EAA, including as 
continued in effect pursuant to IEEPA, and were in effect as of 
ECRA's date of enactment (August 13, 2018), shall continue in effect 
according to their terms until modified, superseded, set aside, or 
revoked through action undertaken pursuant to the authority provided 
under ECRA.
    \2\ See also Section 11(h) of the EAA, 50 U.S.C. 4610(h) (Supp. 
III 2015); Sections 1760(e) and 1768 of ECRA, Title XVII, Subtitle B 
of Public Law 115-232, 132 Stat. 2208, 2225 and 2233 (Aug. 13, 
2018); and note 1, supra.
    \3\ See notes 1 and 2, supra.
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    BIS has received notice of Shapovalov's conviction for violating 
Section 38 of the AECA, and has provided notice and an opportunity for 
Shapovalov to make a written submission to BIS, as provided in Section 
766.25 of the Regulations. BIS has not received a submission from 
Shapovalov.
    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 Shapovalov's export privileges under the 
Regulations for a period of seven years from the date of Shapovalov's 
conviction. I have also decided to revoke all BIS-issued licenses in 
which Shapovalov had an interest at the time of his conviction.
    Accordingly, it is hereby ordered:
    First, from the date of this Order until May 23, 2025, Michael 
Shapovalov a/k/a Mikhail Shapovalov, with a last known address of 
Inmate Number: 25296-014, Moshannon Valley Correctional Institution, 
555 Geo Drive, Philipsburg, PA 16866, and when acting for or on his 
behalf, his successors, assigns, employees, agents or representatives 
(``the Denied Person''), may not, directly or indirectly, participate 
in any way in any transaction involving any commodity, software or 
technology (hereinafter collectively referred to as ``item'') exported 
or to be exported from the United States that is subject to the 
Regulations, 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 engaging 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 from any other activity subject to the Regulations.
    Second, 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

[[Page 40025]]

    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.
    Third, 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 Shapovalov by ownership, control, 
position of responsibility, affiliation, or other connection in the 
conduct of trade or business may also be made subject to the provisions 
of this Order in order to prevent evasion of this Order.
    Fourth, in accordance with Part 756 of the Regulations, Shapovalov 
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.
    Fifth, a copy of this Order shall be delivered to Shapovalov and 
shall be published in the Federal Register.
    Sixth, this Order is effective immediately and shall remain in 
effect until May 23, 2025.

    Issued this day of August 5, 2019.
Karen H. Nies-Vogel,
Director, Office of Exporter Services.
[FR Doc. 2019-17325 Filed 8-12-19; 8:45 am]
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