In the Matter of: OOO Pegas Touristik, 5 Building 1, Volokoplamsk Highway, Moscow, Russian Federation, 125080, Appellant; Final Decision and Order, 70417-70420 [2023-22433]
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Federal Register / Vol. 88, No. 195 / Wednesday, October 11, 2023 / Notices
70417
TOMMY CANTRELL
ADMINISTRATIVE LAW JUDGE
UNITED STATES COAST GUARD
Certificate of Service
I hereby certify that I have served by
electronic mail the foregoing
Recommended Decision to Dismiss
Appeal upon the following:
Gregory Michelsen, Esq., Andrea Duvall,
Esq., Attorneys for Bureau of Industry
and Security, Office of Chief Counsel
for Industry and Security, U.S.
Department of Commerce (Sent via
electronic mail)
Wendy Wysong, Esq., Ali Burney, Esq.,
Steptoe & Johnson HK LLP, Attorneys
for Respondent (Sent via electronic
mail)
U.S. Coast Guard, ALJ Docketing Center,
Attn: Hearing Docket Clerk (Sent via
electronic mail)
I hereby certify that I have forwarded
by Express Courier the foregoing
Recommended Decision to Dismiss
Appeal and the case file upon the
following:
Alan F. Estevez, Under Secretary for
Industry and Security, Bureau of
Industry and Security, U.S.
Department of Commerce (Sent via
Fed Ex)
Done and dated August 24, 2023, at
Galveston, Texas.
Ericka J. Pollard
Paralegal Specialist to
Tommy Cantrell
Administrative Law Judge
United States Coast Guard
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
[Docket Number: 23–BIS–TDO–1]
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In the Matter of: OOO Pegas Touristik,
5 Building 1, Volokoplamsk Highway,
Moscow, Russian Federation, 125080,
Appellant; Final Decision and Order
Before me for my final decision is a
Recommended Decision (RD), issued on
August 23, 2023, by Administrative Law
Judge (ALJ) Tommy Cantrell. The RD
recommends that this appeal filed by
OOO Pegas Touristik (Pegas) be
dismissed. As further discussed below,
I accept the findings of fact and
conclusions of law in the ALJ’s RD.
I. Background
Pegas appeals a Temporary Denial
Order (TDO) temporarily denying the
export privileges of Nordwind Airlines
(Nordwind), first issued by the Assistant
Secretary of Commerce for Export
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Enforcement (Assistant Secretary) of the
Bureau of Industry and Security (BIS or
the Agency) on June 24, 2022, 87 FR
38704. The Export Administration
Regulations (EAR or Regulations) at 15
CFR 766.24 authorize the Assistant
Secretary to issue a TDO for a period of
up to 180 days to prevent an ‘‘imminent
violation’’ of the Regulations. 15 CFR
766.24(b)(1), (b)(4). Moreover, a TDO
may be made applicable to ‘‘related
persons’’ in accordance with § 766.23 of
the Regulations.
The Agency subsequently renewed
the TDO against Nordwind twice, on
December 20, 2022, 87 FR 79725, and
June 15, 2023, 88 FR 40202. Upon the
second renewal, the Agency added
Pegas as a related person to the TDO,
then modified the TDO on June 27,
2023, to remove Pegas as a related
person, 88 FR 42290.
On August 4, 2023, Pegas, through
counsel, filed an appeal (Pegas Appeal)
with the U.S. Coast Guard ALJ
Docketing Center (Docketing Center)
pursuant to 15 CFR 766.23(c) of the
EAR. After assignment of the matter to
an ALJ by the Docketing Center on
August 10, 2023, BIS filed a response to
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the appeal on August 17, 2023. ALJ
Cantrell issued the August 23, 2023, RD,
which my office received on August 24,
2023. On August 24, 2023, Pegas
requested a hearing and/or opportunity
to respond to the ALJ’s RD. Upon
consideration of the views of the parties,
I issued an order on August 29, 2023,
denying Pegas’s request for a hearing
and granting its request to submit a
response. The order also extended the
period of time to issue this Final
Decision and set forth a schedule for
additional written submissions by the
parties. Consistent with the order, Pegas
filed a ‘‘Response to the Administrative
Law Judge’s Recommended Decision’’
(Pegas Response) on September 6, 2023,
and the Agency filed a ‘‘Reply to
Response by Non-Party OOO Pegas
Touristik’’ (BIS Reply) on September 15,
2023.
II. Standard
As described above, § 766.24(b) of the
Regulations addresses the Assistant
Secretary’s authority to issue TDOs. To
issue a TDO, BIS must make a showing
that the order is necessary in the public
interest to prevent an ‘‘imminent
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violation’’ of the Regulations. 15 CFR
766.24(b)(1). The Regulations authorize
the issuance of a TDO on an ex parte
basis but require that the order define
the imminent violation and state why it
was issued without a hearing. Id. at
§ 766.24(b)(2). BIS also has the authority
to renew the TDO for additional
periods. Id. at § 766.24(d)(1).
To prevent evasion of the TDO, the
Assistant Secretary may apply the terms
of the TDO to ‘‘related persons,’’ that is,
‘‘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.’’ Id. at
§ 766.23(a). When seeking to add a
related person to a denial order, ‘‘BIS
shall, except in an ex parte proceeding
under § 766.24(a) of this part,’’ give that
person notice and an opportunity to
oppose such an action. Id. at § 766.23(b).
‘‘Related persons’’ may not oppose the
issuance or renewal of a TDO, but may
file an appeal with an ALJ, who issues
an RD for the review of the Under
Secretary in accordance with § 766.24(e)
of the Regulations. See id. at
§§ 766.23(c)(2)(ii), 766.24(d)(3)(ii). For
appeals by related persons, the
Regulations provide that the ‘‘sole
issues to be raised and ruled on in any
such appeal are whether the person so
named is related to the respondent and
whether the order is justified in order to
prevent evasion.’’ Id. at § 766.23(c).
III. Discussion
Pegas’s appeal requests that an Order
be issued ‘‘that orders the Assistant
Secretary to issue an amended Order
that retroactively nullifies and voids the
addition of Pegas Touristik as a related
person to the TDO and the subjection of
Pegas Touristik to a denial order from
June 15, 2023, to June 27, 2023.’’ Pegas
Appeal at 11. Pegas also seeks a public
acknowledgement from BIS that its
designation of Pegas as a related person
to the TDO and the addition of Pegas to
the BIS Denied Persons List was in
error. Pegas Appeal at 10, Pegas
Response at 8. In short, the limited
scope of the appeal under § 766.23(c) of
the Regulations prevents me from doing
as Pegas requests.
The ALJ makes twelve recommended
findings of fact in the RD. RD at 2–3. I
accept these recommended findings of
fact. Three of the Recommended Facts
(2, 9, and 10) were discussed in the
additional submissions by the parties,
and warrant additional discussion. In its
response to the RD, Pegas describes
these three Recommended Facts as
‘‘materially incomplete and/or
misleading,’’ but concedes that
Recommended Facts 9 and 10 are
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indeed factually accurate. Pegas
Response at 6–7. Because both parties
agree on accuracy, see id., BIS Reply at
2, I decline to disturb the ALJ’s fact
determinations and accept
Recommended Facts 9 and 10 as set
forth in the RD. Regarding
Recommended Fact 2, Pegas argues that
this fact should be ‘‘clarified’’ to reflect
additional information about alleged
deficiencies in the TDO renewal
process, but does not explicitly contest
its accuracy. Pegas Response at 6. I am
unpersuaded by Pegas’s contention that
Recommended Fact 2 as submitted by
the ALJ is insufficient, and think the
clarification requested by Pegas is not
necessary for the disposition of this
§ 766.23(c) appeal. Thus I accept
Recommended Fact 2 as set forth in the
RD.
Regarding the conclusion of law in
the RD, I agree that Pegas seeks relief
outside the scope of an appeal as set
forth in 15 CFR 766.23(c). As discussed
above, the Regulations limit the scope of
the appeal to two issues: whether the
related person is related to the
respondent subject to the TDO, and
whether the TDO is justified to prevent
evasion. 15 CFR 766.23(c). Although
Pegas takes issue in its appeal with the
process by which it was added as a
related person to the Nordwind TDO on
June 15, 2023, Pegas’s appeal does not
address in detail whether it is indeed
related to Nordwind, nor does it address
whether the TDO was justified to
prevent evasion. Regardless, as of June
27, 2023, Pegas was no longer a related
person under § 766.23 to the Nordwind
TDO, and therefore an appeal under
§ 766.23(c) is no longer available to
Pegas. The ALJ concludes that he
‘‘cannot rule on these issues because
there is no TDO currently in effect
naming Pegas as a related person, thus,
[he] cannot affirm, modify, or vacate as
part of this appeal,’’ RD at 5, and I agree.
IV. Conclusion and Order
Based on my review of the record, I
accept the findings of fact and
conclusions of law made by the ALJ in
his RD. I also confirm that as of the date
of issuance of this Final Decision and
Order, Pegas is not listed on the BIS
Denied Persons List, nor is it subject to
the license requirements and
prohibitions in the Nordwind TDO.
Accordingly, it is therefore ordered:
First, that this appeal is dismissed.
Second, that this Final Decision and
Order shall be served on Appellants and
on BIS and shall be published in the
Federal Register. In addition, the ALJ’s
Recommended Decision shall also be
published in the Federal Register.
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This Order, which constitutes the
Department’s final decision with regard
to this appeal, is effective immediately.
Dated: September 29, 2023.
Alan F. Estevez,
Under Secretary of Commerce for Industry
and Security.
UNITED STATES DEPARTMENT OF
COMMERCE, BUREAU OF INDUSTRY
AND SECURITY, WASHINGTON, DC
20230
In the matter of: OOO Pegas Touristik,
Appellant.
Docket No.: 23–BIS–TDO1
RECOMMENDED DECISION
Issued by: Honorable Tommy Cantrell,
Administrative Law Judge
Issued: August 23, 2023
On August 4, 2023, OOO Pegas
Touristik (Pegas) filed an appeal
pursuant to 15 CFR 766.23(c) of the
Export Administration Regulations
(EAR). Specifically, Pegas requests I
issue an order directing the Assistant
Secretary of Commerce for Export
Enforcement (Assistant Secretary) to
‘‘issue an amended Order that
retroactively nullifies and voids the
addition of Pegas as a related person’’ to
a Temporary Denial Order (TDO) issued
to Nordwind Airlines (Nordwind), ‘‘as
well as Pegas Touristik’s inclusion in
the [Denied Persons List] order from
June 15, 2023, to June 27, 2023.’’
(Appeal at 3). The Bureau of Industry
and Security (BIS) opposes the appeal,
arguing there is no factual or legal basis
to support the appeal or the relief Pegas
seeks. For the reasons set forth herein,
I recommend the appeal be dismissed.
I. Procedural Background
On June 24, 2022, the Assistant
Secretary issued a TDO to Russian
airline Nordwind pursuant to 15 CFR
766.24. (Ex. 1).1 In accordance with BIS
regulations, the Assistant Secretary
renewed the TDO for an additional 180
days on December 20, 2022. (Ex. 2). The
Assistant Secretary again renewed the
TDO on June 15, 2023, this time adding
Pegas as a related person pursuant to 15
CFR 766.23 of the EAR. (Ex. 3).2
Thereafter, following discussions and an
exchange of information between BIS
and Pegas, the Assistant Secretary
issued a ‘‘Modification of June 15, 2023
Renewal of Temporary Denial Order,’’
1 ‘‘Ex. 1’’ references the first of 12 exhibits
attached to the Appeal dated August 4, 2023.
2 BIS published this TDO on the Federal Register
on June 21, 2023. See 88 FR 40202.
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removing Pegas from the Nordwind
TDO. (Exs. 3–7).3
On August 4, 2023, Pegas filed this
appeal with the United States Coast
Guard Administrative Law Judge
Docketing Center (Docketing Center).4
The appeal letter included twelve
exhibits. On August 10, 2023, the
Docketing Center assigned this case to
me for adjudication. BIS submitted its
response to the appeal on August 17,
2023. The record is now closed and the
appeal is ripe for decision.
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II. Recommended Findings of Fact
1. On June 24, 2022, the Assistant
Secretary issued a Temporary Denial
Order (TDO) to Russian airline
Nordwind Airlines (Norwind),
temporarily denying Nordwind’s export
privileges on an ex parte basis pursuant
to 15 CFR 766.24 to prevent an
‘‘imminent violation’’ of the Export
Administration Regulations (EAR). (Ex.
1).
2. On June 15, 2023, the Assistant
Secretary renewed the TDO and added
Pegas as a related person. (Ex. 3).
3. As modified, the June 15, 2023,
TDO refers to both Nordwind Airlines
and Pegas as ‘‘Denied Persons’’ who
‘‘may not, directly or indirectly,
participate in any way in any
transaction involving any commodity,
software or technology . . . exported or
to be exported from the United States
that is subject to the EAR . . . .’’ 5 (Ex.
3).
4. BIS published the June 15, 2023
TDO in the Federal Register on June 21,
2023. See 88 FR 40202.
5. On June 20, 2023, Pegas contacted
BIS to express concerns about the TDO,
specifically arguing the addition of
Pegas as a related person was legally
and factually incorrect because BIS did
not provide Pegas with advance notice
or an opportunity to oppose the action.
(Ex. 4).
6. On June 21, 2023, the Office of
Export Enforcement (OEE) requested
information from Pegas regarding its
business operations, ownership and
corporate structure, and other facts
related to certain individuals, including
information regarding whether Pegas
was related to Nordwind Airlines. (Ex.
5).
7. Following discussions between
Pegas and BIS, on June 27, 2023, the
3 BIS published this TDO on the Federal Register
on June 30, 2023. See 88 FR 42290.
4 Pursuant to an interagency agreement, United
States Coast Guard (USCG) Administrative Law
Judges are permitted to adjudicate BIS cases.
5 The TDO refers to Pegas as a ‘‘Denied Person’’
but the record does not contain a separate ‘‘Denied
Persons List’’ or ‘‘DPL.’’ For purposes of this
decision, I consider the naming of Pegas as a related
person the same as its inclusion on a DPL.
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Assistant Secretary issued a modified
TDO removing Pegas as a related
person. (Exs. 6a, 6b, 7).
8. BIS published the June 27, 2023,
TDO in the Federal Register on June 30,
2023. See 88 FR 42290.
9. The modified TDO does not discuss
specific reasons for the removal but
states the OEE requested ‘‘Pegas
Touristik be removed from the TDO to
allow the opportunity for additional
administrative process under Part 766 of
the Regulations.’’ (Ex. 7).
10. On July 24, 2023, BIS corrected
the Table of Contents for Export
Violations on its website to indicate the
June 15, 2023, TDO related solely to
Nordwind Airlines. (Ex. 11).
11. On July 28, 2023, Pegas requested
the Assistant Secretary issue an order
which clearly and definitively states
‘‘Pegas Touristik was erroneously added
as a related person to the June 15 Order
and to the List of Denied Persons’’ and
‘‘Pegas Touristik has never been subject
to a valid denial order imposed by the
U.S. Department of Commerce’s Bureau
of Industry and Security.’’ (Ex. 10).
12. In response, BIS sent Pegas an
email noting the following: ‘‘BIS issued
an Order on June 27, 2023, removing
Pegas Touristik as a party from the June
15, 2023 Nordwind TDO. Additionally,
on July 24, 2023, BIS amended the
caption in its EFOIA Table of Contents.
Given the above, no further action is
necessary.’’ (Ex. 11).
III. Opinion and Recommended
Conclusion of Law
BIS regulations related to export
administration are issued ‘‘under laws
relating to the control of certain exports,
reexports, and activities.’’ 15 CFR
730.1.6 Its export control provisions
‘‘are intended to serve the national
security, foreign policy,
nonproliferation of weapons of mass
destruction, and other interests of the
United States.’’ 15 CFR 730.6. To
prevent an imminent violation of the
EAR, BIS may request the Assistant
Secretary issue a TDO on an ex parte
basis. 15 CFR 766.24(a). The TDO is
only valid for 180 days, but the
Assistant Secretary may renew it in
additional 180-day increments as
deemed necessary. 15 CFR 766.24(b)(4),
766.24(d)(4). When deciding to renew
an order, the only issue to be considered
‘‘is whether the temporary denial order
should be continued to prevent an
imminent violation.’’ 15 CFR
766.24(d)(3). The Assistant Secretary
6 The EAR primarily relate to the implementation
of the Export Administration Act of 1979. 15 CFR
730.2.
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70419
may also modify or amend a TDO. 15
CFR 766.24(d), 766.23(b).
To prevent evasion of a TDO, the
Assistant Secretary may apply the order
‘‘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.’’ 15 CFR
766.23(a), 766.24(c). When adding a
related party to an order affecting export
privileges, ‘‘BIS shall, except in an ex
parte proceeding under § 766.24’’ give
that person notice and an opportunity to
oppose the action. 15 CFR 766.23(b).
Where the Assistant Secretary issues
or renews a TDO on an ex parte basis
pursuant to 15 CFR 766.24, persons
‘‘designated as a related person may not
oppose the issuance or renewal of the
temporary denial order, but may file an
appeal in accordance with § 766.23(c).’’
15 CFR 766.24(d)(3)(ii). The only issues
that may be raised on appeal are
‘‘whether the person so named is related
to the respondent and whether the order
is justified in order to prevent evasion.’’
15 CFR 766.23(c). An administrative law
judge then submits a recommended
decision to the Under Secretary for
Industry and Security ‘‘recommending
whether the issuance or the renewal of
the temporary denial order should be
affirmed, modified, or vacated.’’ 15 CFR
766.24(e)(4).
Having outlined the relevant
regulations governing this appeal, I now
turn to the facts of the case.
a. Pegas Seeks Relief Outside the Scope
of an Appeal as Set Forth in 15 CFR
766.23(c)
Here, the issues that may be raised
and ruled upon in an appeal under 15
CFR 766.23(c) are (1) whether Pegas is
related to Nordwind Airlines, and (2)
whether the order naming Pegas as a
related person is justified to prevent
evasion of the Nordwind TDO. 15 CFR
766.23(c). Pegas does not argue either of
these issues.7 Ultimately, I cannot rule
on these issues because there is no TDO
currently in effect naming Pegas as a
related person, thus, I cannot affirm,
modify, or vacate as part of this appeal.
7 At the crux of Pegas’s appeal is the argument
BIS acted outside its regulations when it named the
company a related party without first giving it
notice and an opportunity to oppose the action. It
asserts this allegedly ultra vires activity should
render the June 15, 2023, TDO null and void. I note,
however, the Assistant Secretary issued and
renewed the Nordwind TDO on an ex parte basis
pursuant to 15 CFR 766.24. Specifically, the June
15, 2023, TDO which added Pegas as a related party
was also issued ex parte in accordance with 15 CFR
766.24. As such, as a related party Pegas could not
oppose its issuance or renewal but could file an
appeal pursuant to § 766.23(c). 15 CFR
766.24(d)(3)(ii); 15 CFR 766.23(b).
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15 CFR 766.24(e)(4). The Assistant
Secretary removed Pegas from the
Nordwind TDO on June 27, 2023. (Ex.
7). According to Pegas, BIS also
removed it from its list of ‘‘Denied
Persons.’’ (Ex. 9). The latest version of
the Nordwind TDO is not called into
question and remains in effect regarding
Nordwind Airlines—not Pegas—until
December 12, 2023.
While I understand Pegas’s business
concerns, the regulations do not grant
me authority to issue an order
retroactively nullifying the addition of
Pegas as a related party in the June 15,
2023, TDO. In light of the above, I
recommend this appeal be dismissed.
Done and dated this 23rd day of August
2023, at Galveston, Texas.
TOMMY CANTRELL
ADMINISTRATIVE LAW JUDGE
UNITED STATES COAST GUARD
Certificate of Service
I hereby certify that I have served by
electronic mail the foregoing
Recommended Decision upon the
following:
Gregory Michelsen, Esq., Andrea Duvall,
Esq., Attorneys for Bureau of Industry
and Security, Office of Chief Counsel
for Industry and Security,
U.S. Department of Commerce (Sent via
electronic mail)
Melissa B. Mannino, Esq., Lana
Muranovic, Esq., Orga Cadet, Esq.,
BAKER & HOSTETLER LLP,
Attorneys for Respondent (Sent via
electronic mail)
U.S. Coast Guard, ALJ Docketing Center,
Attn: Hearing Docket Clerk (Sent via
electronic mail)
Done and dated August 23, 2023, at
Galveston, Texas
I hereby certify that I have forwarded
by Express Courier the foregoing
Recommended Decision and the case
file upon the following:
Alan F. Estevez, Under Secretary for
Industry and Security, Bureau of
Industry and Security, U.S.
Department of Commerce (Sent via
Fed Ex)
~ (olla,v:f
Ericka J. Pollard
Paralegal Specialist to
Tommy Cantrell
Administrative Law Judge
United States Coast Guard
DEPARTMENT OF EDUCATION
Presidential Advisory Commission on
Advancing Educational Equity,
Excellence, and Economic Opportunity
for Black Americans; Meeting
White House Initiative on
Advancing Educational Equity,
Excellence, and Economic Opportunity
for Black Americans, Office of the
Secretary, U.S. Department of
Education.
ACTION: Announcement of an open
meeting.
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AGENCY:
This notice sets forth the
agenda for the October 26–27, 2023,
meeting of the Presidential Advisory
Commission on Advancing Educational
SUMMARY:
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Equity, Excellence, and Economic
Opportunity for Black Americans (PAC)
and provides information to members of
the public about how to submit written
comments before the meeting. Notice of
the meeting is required and is intended
to notify the public of its opportunity to
attend.
DATES: The PAC will be meeting on
October 26 and 27, 2023, from 10 a.m.
to 5 p.m. E.D.T.
ADDRESSES: The October 26, 2023,
meeting will be held at the White
House. The October 27, 2023, meeting
will be in the Barnard Auditorium at the
U.S. Department of Education, located
at 400 Maryland Avenue SW,
Washington, DC 20202. The public may
join both meetings virtually.
FOR FURTHER INFORMATION CONTACT:
Monique Toussaint, Designated Federal
Official, U.S. Department of Education,
White House Initiative on Advancing
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Educational Equity, Excellence, and
Economic Opportunity for Black
Americans, 400 Maryland Avenue SW,
Washington, DC 20202. Telephone:
(202) 260–0964. Email:
monique.toussaint@ed.gov.
SUPPLEMENTARY INFORMATION:
PAC’s Statutory Authority and
Function: The PAC is established by
Executive Order 14050 (October 19,
2021). The PAC is governed by the
provisions of 5 U.S.C. Chapter 10
(Federal Advisory Committees), which
sets forth standards for the formation
and use of advisory committees. The
purpose of the PAC is to advise the
President, through the Secretary of the
U.S. Department of Education, on all
matters pertaining to advancing
educational equity, excellence, and
economic opportunity for Black
Americans and communities.
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Agencies
[Federal Register Volume 88, Number 195 (Wednesday, October 11, 2023)]
[Notices]
[Pages 70417-70420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22433]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
[Docket Number: 23-BIS-TDO-1]
In the Matter of: OOO Pegas Touristik, 5 Building 1, Volokoplamsk
Highway, Moscow, Russian Federation, 125080, Appellant; Final Decision
and Order
Before me for my final decision is a Recommended Decision (RD),
issued on August 23, 2023, by Administrative Law Judge (ALJ) Tommy
Cantrell. The RD recommends that this appeal filed by OOO Pegas
Touristik (Pegas) be dismissed. As further discussed below, I accept
the findings of fact and conclusions of law in the ALJ's RD.
I. Background
Pegas appeals a Temporary Denial Order (TDO) temporarily denying
the export privileges of Nordwind Airlines (Nordwind), first issued by
the Assistant Secretary of Commerce for Export Enforcement (Assistant
Secretary) of the Bureau of Industry and Security (BIS or the Agency)
on June 24, 2022, 87 FR 38704. The Export Administration Regulations
(EAR or Regulations) at 15 CFR 766.24 authorize the Assistant Secretary
to issue a TDO for a period of up to 180 days to prevent an ``imminent
violation'' of the Regulations. 15 CFR 766.24(b)(1), (b)(4). Moreover,
a TDO may be made applicable to ``related persons'' in accordance with
Sec. 766.23 of the Regulations.
The Agency subsequently renewed the TDO against Nordwind twice, on
December 20, 2022, 87 FR 79725, and June 15, 2023, 88 FR 40202. Upon
the second renewal, the Agency added Pegas as a related person to the
TDO, then modified the TDO on June 27, 2023, to remove Pegas as a
related person, 88 FR 42290.
On August 4, 2023, Pegas, through counsel, filed an appeal (Pegas
Appeal) with the U.S. Coast Guard ALJ Docketing Center (Docketing
Center) pursuant to 15 CFR 766.23(c) of the EAR. After assignment of
the matter to an ALJ by the Docketing Center on August 10, 2023, BIS
filed a response to the appeal on August 17, 2023. ALJ Cantrell issued
the August 23, 2023, RD, which my office received on August 24, 2023.
On August 24, 2023, Pegas requested a hearing and/or opportunity to
respond to the ALJ's RD. Upon consideration of the views of the
parties, I issued an order on August 29, 2023, denying Pegas's request
for a hearing and granting its request to submit a response. The order
also extended the period of time to issue this Final Decision and set
forth a schedule for additional written submissions by the parties.
Consistent with the order, Pegas filed a ``Response to the
Administrative Law Judge's Recommended Decision'' (Pegas Response) on
September 6, 2023, and the Agency filed a ``Reply to Response by Non-
Party OOO Pegas Touristik'' (BIS Reply) on September 15, 2023.
II. Standard
As described above, Sec. 766.24(b) of the Regulations addresses
the Assistant Secretary's authority to issue TDOs. To issue a TDO, BIS
must make a showing that the order is necessary in the public interest
to prevent an ``imminent
[[Page 70418]]
violation'' of the Regulations. 15 CFR 766.24(b)(1). The Regulations
authorize the issuance of a TDO on an ex parte basis but require that
the order define the imminent violation and state why it was issued
without a hearing. Id. at Sec. 766.24(b)(2). BIS also has the
authority to renew the TDO for additional periods. Id. at Sec.
766.24(d)(1).
To prevent evasion of the TDO, the Assistant Secretary may apply
the terms of the TDO to ``related persons,'' that is, ``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.'' Id. at Sec. 766.23(a). When seeking to
add a related person to a denial order, ``BIS shall, except in an ex
parte proceeding under Sec. 766.24(a) of this part,'' give that person
notice and an opportunity to oppose such an action. Id. at Sec.
766.23(b).
``Related persons'' may not oppose the issuance or renewal of a
TDO, but may file an appeal with an ALJ, who issues an RD for the
review of the Under Secretary in accordance with Sec. 766.24(e) of the
Regulations. See id. at Sec. Sec. 766.23(c)(2)(ii), 766.24(d)(3)(ii).
For appeals by related persons, the Regulations provide that the ``sole
issues to be raised and ruled on in any such appeal are whether the
person so named is related to the respondent and whether the order is
justified in order to prevent evasion.'' Id. at Sec. 766.23(c).
III. Discussion
Pegas's appeal requests that an Order be issued ``that orders the
Assistant Secretary to issue an amended Order that retroactively
nullifies and voids the addition of Pegas Touristik as a related person
to the TDO and the subjection of Pegas Touristik to a denial order from
June 15, 2023, to June 27, 2023.'' Pegas Appeal at 11. Pegas also seeks
a public acknowledgement from BIS that its designation of Pegas as a
related person to the TDO and the addition of Pegas to the BIS Denied
Persons List was in error. Pegas Appeal at 10, Pegas Response at 8. In
short, the limited scope of the appeal under Sec. 766.23(c) of the
Regulations prevents me from doing as Pegas requests.
The ALJ makes twelve recommended findings of fact in the RD. RD at
2-3. I accept these recommended findings of fact. Three of the
Recommended Facts (2, 9, and 10) were discussed in the additional
submissions by the parties, and warrant additional discussion. In its
response to the RD, Pegas describes these three Recommended Facts as
``materially incomplete and/or misleading,'' but concedes that
Recommended Facts 9 and 10 are indeed factually accurate. Pegas
Response at 6-7. Because both parties agree on accuracy, see id., BIS
Reply at 2, I decline to disturb the ALJ's fact determinations and
accept Recommended Facts 9 and 10 as set forth in the RD. Regarding
Recommended Fact 2, Pegas argues that this fact should be ``clarified''
to reflect additional information about alleged deficiencies in the TDO
renewal process, but does not explicitly contest its accuracy. Pegas
Response at 6. I am unpersuaded by Pegas's contention that Recommended
Fact 2 as submitted by the ALJ is insufficient, and think the
clarification requested by Pegas is not necessary for the disposition
of this Sec. 766.23(c) appeal. Thus I accept Recommended Fact 2 as set
forth in the RD.
Regarding the conclusion of law in the RD, I agree that Pegas seeks
relief outside the scope of an appeal as set forth in 15 CFR 766.23(c).
As discussed above, the Regulations limit the scope of the appeal to
two issues: whether the related person is related to the respondent
subject to the TDO, and whether the TDO is justified to prevent
evasion. 15 CFR 766.23(c). Although Pegas takes issue in its appeal
with the process by which it was added as a related person to the
Nordwind TDO on June 15, 2023, Pegas's appeal does not address in
detail whether it is indeed related to Nordwind, nor does it address
whether the TDO was justified to prevent evasion. Regardless, as of
June 27, 2023, Pegas was no longer a related person under Sec. 766.23
to the Nordwind TDO, and therefore an appeal under Sec. 766.23(c) is
no longer available to Pegas. The ALJ concludes that he ``cannot rule
on these issues because there is no TDO currently in effect naming
Pegas as a related person, thus, [he] cannot affirm, modify, or vacate
as part of this appeal,'' RD at 5, and I agree.
IV. Conclusion and Order
Based on my review of the record, I accept the findings of fact and
conclusions of law made by the ALJ in his RD. I also confirm that as of
the date of issuance of this Final Decision and Order, Pegas is not
listed on the BIS Denied Persons List, nor is it subject to the license
requirements and prohibitions in the Nordwind TDO. Accordingly, it is
therefore ordered:
First, that this appeal is dismissed.
Second, that this Final Decision and Order shall be served on
Appellants and on BIS and shall be published in the Federal Register.
In addition, the ALJ's Recommended Decision shall also be published in
the Federal Register.
This Order, which constitutes the Department's final decision with
regard to this appeal, is effective immediately.
Dated: September 29, 2023.
Alan F. Estevez,
Under Secretary of Commerce for Industry and Security.
UNITED STATES DEPARTMENT OF COMMERCE, BUREAU OF INDUSTRY AND SECURITY,
WASHINGTON, DC 20230
In the matter of: OOO Pegas Touristik, Appellant.
Docket No.: 23-BIS-TDO1
RECOMMENDED DECISION
Issued by: Honorable Tommy Cantrell, Administrative Law Judge
Issued: August 23, 2023
On August 4, 2023, OOO Pegas Touristik (Pegas) filed an appeal
pursuant to 15 CFR 766.23(c) of the Export Administration Regulations
(EAR). Specifically, Pegas requests I issue an order directing the
Assistant Secretary of Commerce for Export Enforcement (Assistant
Secretary) to ``issue an amended Order that retroactively nullifies and
voids the addition of Pegas as a related person'' to a Temporary Denial
Order (TDO) issued to Nordwind Airlines (Nordwind), ``as well as Pegas
Touristik's inclusion in the [Denied Persons List] order from June 15,
2023, to June 27, 2023.'' (Appeal at 3). The Bureau of Industry and
Security (BIS) opposes the appeal, arguing there is no factual or legal
basis to support the appeal or the relief Pegas seeks. For the reasons
set forth herein, I recommend the appeal be dismissed.
I. Procedural Background
On June 24, 2022, the Assistant Secretary issued a TDO to Russian
airline Nordwind pursuant to 15 CFR 766.24. (Ex. 1).\1\ In accordance
with BIS regulations, the Assistant Secretary renewed the TDO for an
additional 180 days on December 20, 2022. (Ex. 2). The Assistant
Secretary again renewed the TDO on June 15, 2023, this time adding
Pegas as a related person pursuant to 15 CFR 766.23 of the EAR. (Ex.
3).\2\ Thereafter, following discussions and an exchange of information
between BIS and Pegas, the Assistant Secretary issued a ``Modification
of June 15, 2023 Renewal of Temporary Denial Order,''
[[Page 70419]]
removing Pegas from the Nordwind TDO. (Exs. 3-7).\3\
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\1\ ``Ex. 1'' references the first of 12 exhibits attached to
the Appeal dated August 4, 2023.
\2\ BIS published this TDO on the Federal Register on June 21,
2023. See 88 FR 40202.
\3\ BIS published this TDO on the Federal Register on June 30,
2023. See 88 FR 42290.
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On August 4, 2023, Pegas filed this appeal with the United States
Coast Guard Administrative Law Judge Docketing Center (Docketing
Center).\4\ The appeal letter included twelve exhibits. On August 10,
2023, the Docketing Center assigned this case to me for adjudication.
BIS submitted its response to the appeal on August 17, 2023. The record
is now closed and the appeal is ripe for decision.
---------------------------------------------------------------------------
\4\ Pursuant to an interagency agreement, United States Coast
Guard (USCG) Administrative Law Judges are permitted to adjudicate
BIS cases.
---------------------------------------------------------------------------
II. Recommended Findings of Fact
1. On June 24, 2022, the Assistant Secretary issued a Temporary
Denial Order (TDO) to Russian airline Nordwind Airlines (Norwind),
temporarily denying Nordwind's export privileges on an ex parte basis
pursuant to 15 CFR 766.24 to prevent an ``imminent violation'' of the
Export Administration Regulations (EAR). (Ex. 1).
2. On June 15, 2023, the Assistant Secretary renewed the TDO and
added Pegas as a related person. (Ex. 3).
3. As modified, the June 15, 2023, TDO refers to both Nordwind
Airlines and Pegas as ``Denied Persons'' who ``may not, directly or
indirectly, participate in any way in any transaction involving any
commodity, software or technology . . . exported or to be exported from
the United States that is subject to the EAR . . . .'' \5\ (Ex. 3).
---------------------------------------------------------------------------
\5\ The TDO refers to Pegas as a ``Denied Person'' but the
record does not contain a separate ``Denied Persons List'' or
``DPL.'' For purposes of this decision, I consider the naming of
Pegas as a related person the same as its inclusion on a DPL.
---------------------------------------------------------------------------
4. BIS published the June 15, 2023 TDO in the Federal Register on
June 21, 2023. See 88 FR 40202.
5. On June 20, 2023, Pegas contacted BIS to express concerns about
the TDO, specifically arguing the addition of Pegas as a related person
was legally and factually incorrect because BIS did not provide Pegas
with advance notice or an opportunity to oppose the action. (Ex. 4).
6. On June 21, 2023, the Office of Export Enforcement (OEE)
requested information from Pegas regarding its business operations,
ownership and corporate structure, and other facts related to certain
individuals, including information regarding whether Pegas was related
to Nordwind Airlines. (Ex. 5).
7. Following discussions between Pegas and BIS, on June 27, 2023,
the Assistant Secretary issued a modified TDO removing Pegas as a
related person. (Exs. 6a, 6b, 7).
8. BIS published the June 27, 2023, TDO in the Federal Register on
June 30, 2023. See 88 FR 42290.
9. The modified TDO does not discuss specific reasons for the
removal but states the OEE requested ``Pegas Touristik be removed from
the TDO to allow the opportunity for additional administrative process
under Part 766 of the Regulations.'' (Ex. 7).
10. On July 24, 2023, BIS corrected the Table of Contents for
Export Violations on its website to indicate the June 15, 2023, TDO
related solely to Nordwind Airlines. (Ex. 11).
11. On July 28, 2023, Pegas requested the Assistant Secretary issue
an order which clearly and definitively states ``Pegas Touristik was
erroneously added as a related person to the June 15 Order and to the
List of Denied Persons'' and ``Pegas Touristik has never been subject
to a valid denial order imposed by the U.S. Department of Commerce's
Bureau of Industry and Security.'' (Ex. 10).
12. In response, BIS sent Pegas an email noting the following:
``BIS issued an Order on June 27, 2023, removing Pegas Touristik as a
party from the June 15, 2023 Nordwind TDO. Additionally, on July 24,
2023, BIS amended the caption in its EFOIA Table of Contents. Given the
above, no further action is necessary.'' (Ex. 11).
III. Opinion and Recommended Conclusion of Law
BIS regulations related to export administration are issued ``under
laws relating to the control of certain exports, reexports, and
activities.'' 15 CFR 730.1.\6\ Its export control provisions ``are
intended to serve the national security, foreign policy,
nonproliferation of weapons of mass destruction, and other interests of
the United States.'' 15 CFR 730.6. To prevent an imminent violation of
the EAR, BIS may request the Assistant Secretary issue a TDO on an ex
parte basis. 15 CFR 766.24(a). The TDO is only valid for 180 days, but
the Assistant Secretary may renew it in additional 180-day increments
as deemed necessary. 15 CFR 766.24(b)(4), 766.24(d)(4). When deciding
to renew an order, the only issue to be considered ``is whether the
temporary denial order should be continued to prevent an imminent
violation.'' 15 CFR 766.24(d)(3). The Assistant Secretary may also
modify or amend a TDO. 15 CFR 766.24(d), 766.23(b).
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\6\ The EAR primarily relate to the implementation of the Export
Administration Act of 1979. 15 CFR 730.2.
---------------------------------------------------------------------------
To prevent evasion of a TDO, the Assistant Secretary may apply the
order ``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.'' 15 CFR 766.23(a), 766.24(c). When adding a related
party to an order affecting export privileges, ``BIS shall, except in
an ex parte proceeding under Sec. 766.24'' give that person notice and
an opportunity to oppose the action. 15 CFR 766.23(b).
Where the Assistant Secretary issues or renews a TDO on an ex parte
basis pursuant to 15 CFR 766.24, persons ``designated as a related
person may not oppose the issuance or renewal of the temporary denial
order, but may file an appeal in accordance with Sec. 766.23(c).'' 15
CFR 766.24(d)(3)(ii). The only issues that may be raised on appeal are
``whether the person so named is related to the respondent and whether
the order is justified in order to prevent evasion.'' 15 CFR 766.23(c).
An administrative law judge then submits a recommended decision to the
Under Secretary for Industry and Security ``recommending whether the
issuance or the renewal of the temporary denial order should be
affirmed, modified, or vacated.'' 15 CFR 766.24(e)(4).
Having outlined the relevant regulations governing this appeal, I
now turn to the facts of the case.
a. Pegas Seeks Relief Outside the Scope of an Appeal as Set Forth in 15
CFR 766.23(c)
Here, the issues that may be raised and ruled upon in an appeal
under 15 CFR 766.23(c) are (1) whether Pegas is related to Nordwind
Airlines, and (2) whether the order naming Pegas as a related person is
justified to prevent evasion of the Nordwind TDO. 15 CFR 766.23(c).
Pegas does not argue either of these issues.\7\ Ultimately, I cannot
rule on these issues because there is no TDO currently in effect naming
Pegas as a related person, thus, I cannot affirm, modify, or vacate as
part of this appeal.
[[Page 70420]]
15 CFR 766.24(e)(4). The Assistant Secretary removed Pegas from the
Nordwind TDO on June 27, 2023. (Ex. 7). According to Pegas, BIS also
removed it from its list of ``Denied Persons.'' (Ex. 9). The latest
version of the Nordwind TDO is not called into question and remains in
effect regarding Nordwind Airlines--not Pegas--until December 12, 2023.
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\7\ At the crux of Pegas's appeal is the argument BIS acted
outside its regulations when it named the company a related party
without first giving it notice and an opportunity to oppose the
action. It asserts this allegedly ultra vires activity should render
the June 15, 2023, TDO null and void. I note, however, the Assistant
Secretary issued and renewed the Nordwind TDO on an ex parte basis
pursuant to 15 CFR 766.24. Specifically, the June 15, 2023, TDO
which added Pegas as a related party was also issued ex parte in
accordance with 15 CFR 766.24. As such, as a related party Pegas
could not oppose its issuance or renewal but could file an appeal
pursuant to Sec. 766.23(c). 15 CFR 766.24(d)(3)(ii); 15 CFR
766.23(b).
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While I understand Pegas's business concerns, the regulations do
not grant me authority to issue an order retroactively nullifying the
addition of Pegas as a related party in the June 15, 2023, TDO. In
light of the above, I recommend this appeal be dismissed.
Done and dated this 23rd day of August 2023, at Galveston,
Texas.
[GRAPHIC] [TIFF OMITTED] TN11OC23.000
Certificate of Service
I hereby certify that I have served by electronic mail the
foregoing Recommended Decision upon the following:
Gregory Michelsen, Esq., Andrea Duvall, Esq., Attorneys for Bureau of
Industry and Security, Office of Chief Counsel for Industry and
Security,
U.S. Department of Commerce (Sent via electronic mail)
Melissa B. Mannino, Esq., Lana Muranovic, Esq., Orga Cadet, Esq., BAKER
& HOSTETLER LLP, Attorneys for Respondent (Sent via electronic mail)
U.S. Coast Guard, ALJ Docketing Center, Attn: Hearing Docket Clerk
(Sent via electronic mail)
I hereby certify that I have forwarded by Express Courier the
foregoing Recommended Decision and the case file upon the following:
Alan F. Estevez, Under Secretary for Industry and Security, Bureau of
Industry and Security, U.S. Department of Commerce (Sent via Fed Ex)
[GRAPHIC] [TIFF OMITTED] TN11OC23.001
[FR Doc. 2023-22433 Filed 10-10-23; 8:45 am]
BILLING CODE 3510-33-P