[Federal Register: May 30, 2007 (Volume 72, Number 103)]
[Notices]
[Page 29965-29967]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30my07-45]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
[Docket No. 05-BIS-15]
In the Matter of: Winter Aircraft Products SA; a/k/a Ruf S. Lopez
SA, C/Ferrocarril 41, 1 DCHA, 28045 Madrid, Spain; Respondent; Final
Decision and Order
This matter is before me upon a Recommended Decision and Order of
the Administrative Law Judge (``ALJ'').
In a charging letter filed on September 12, 2005, the Bureau of
Industry and Security (``BIS'') alleged that Respondent, Winter
Aircraft Products SA (hereinafter ``Winter Aircraft''), also known as
Ruf S. Lopez SA., committed two violations of the Export Administration
Regulations (currently codified at 15 CFR parts 730-774) (2007))
(``Regulations'') \1\, issued under the Export Administration Act of
1979, as amended (50 U.S.C. app. 2401-2420 (2000)) (the ``Act'').\2\
Specifically, the charging letter alleged that between on or about
November 1,2000, and on or about November 17, 2000, Winter Aircraft
took actions with intent to evade the Regulations. Specifically, on or
about November 1, 2000, Winter Aircraft acquired aircraft parts, items
subject to the Regulations and classified under Export Control
Classification Number (``ECCN'') 9A991, from U.S. suppliers with intent
to transship such items to Iran. Winter Aircraft failed to inform the
U.S. suppliers of the ultimate destination of the items and, as such,
no license was obtained from the U.S. Government for this transaction,
as was required by Section 746.7 of the Regulations. On or about
November 17, 2000, Winter Aircraft transshipped the aircraft parts
subject to the Regulations to Iran. In taking these actions, Winter
Aircraft committed one violation of Section 764.2(h) of the
Regulations.
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\1\ The violations charged occurred in 2000. The Regulations
governing the violations at issue are found in the 2000 version of
the Code of Federal Regulations (15 CFR parts 730-774 (2000)). The
2007 Regulations establish the procedures that apply to this matter.
\2\ From August 21, 1994, through November 12, 2000, the Act was
in lapse. During that period, the President, through Executive Order
12924, which had been extended by successive Presidential Notices,
the last of which was August 3, 2000 (3 CFR, 2000 Comp. 397 (2001)),
continued the Regulations in effect under the International
Emergency Economic Powers Act (50 U.S.C. 1701--1706 (2000))
(``IEEPA''). On November 13, 2000, the Act was reauthorized and it
remained in effect through August 20, 2001. 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 3, 2006 (71 FR 44,551 (August 7, 2006)), has
continued the Regulations in effect under IEEPA.
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The charging letter further alleged that between on or about
October 19, 2000, and on or about November 22, 2000, Winter Aircraft
took actions with intent to evade the Regulations. Specifically, on or
about October 19, 2000, Winter Aircraft acquired aircraft parts, items
subject to the Regulations and classified under ECCN 9A991, from U.S.
suppliers with intent to transship such items to Iran. Winter Aircraft
failed to inform the U.S. suppliers of the ultimate destination of the
items and, as such, no license was obtained from the U.S. Government
for this transaction, as was required by Section 746.7 of the
Regulations. On or about November 22, 2000, Winter Aircraft
transshipped the aircraft parts subject to the Regulations to Iran. In
taking these actions, Winter Aircraft committed one violation of
Section 764.2(h) of the Regulations.
In accordance with Section 766.3(b)(1) of the Regulations, on
September 12, 2005, BIS mailed the notice of issuance of the charging
letter by registered mail to Winter Aircraft at its last known address.
The notice of issuance of a charging letter was received by Winter
Aircraft on or about September 21, 2005. The file establishes that BIS
and Winter Aircraft engaged in several months of correspondence
regarding the matter, and that BIS counsel advised Winter Aircraft to
file an answer to the charging letter. To date, however, Winter
Aircraft has not filed an answer to the charging letter with the ALJ,
as required by the Regulations.
In accordance with Section 766.7 of the Regulations, BIS filed a
Motion for Default Order on March 20, 2007. This Motion for Default
Order recommended that Winter Aircraft be denied export privileges
under the Regulations for a period of ten years. Under Section 766.7(a)
of the Regulations, ``[fJailure of the respondent to file an answer
within the time provided constitutes a waiver of the respondent's right
to appear,'' and ``on BIS's motion and without further notice to the
respondent, [the ALJ] shall find the facts to be as alleged in the
charging letter.'' Based upon the record before him, the ALJ found
Winter Aircraft in default.
On May 1, 2007, ALJ issued a Recommended Decision and Order in
which he found that Winter Aircraft committed two violations of Section
764.2(h). The ALJ also recommended the penalty of denial of Winter
Aircraft's export privileges for ten years.
The ALJ's Recommended Decision and Order, together with the entire
record in this case, has been referred to me for final action under
Section 766.22 of the Regulations. I find that the record supports the
ALJ's findings of fact and conclusions of law. I also find that the
penalty recommended by the ALJ is appropriate, given the nature of the
violations and the facts of this case, and the importance of preventing
future unauthorized exports.
Based on my review of the entire record, I affirm the findings of
fact and conclusions of law in the ALJ's Recommended Decision and
Order.
Accordingly, it is therefore ordered,
First, that for a period of ten years from the date of this Order,
Winter Aircraft Product SA, a/k/a Ruf S. Lopez SA, C/Ferrocarril 41,
28045 Madrid, Spain, its successors and assigns, and when acting for or
on behalf of Winter Aircraft, its representatives, agents and
[[Page 29966]]
employees (hereinafter collectively referred to as 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, 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.
Second, 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 that 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, 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
this Order.
Fourth, that 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.
Fifth, that this Order shall be served on the Denied Person and on
BIS, and shall be published in the Federal Register. In addition, the
ALJ's Recommended Decision and Order, except for the section related to
the Recommended Order, shall be published in the Federal Register.
This Order, which constitutes the final agency action in this
matter, is effective immediately.
Dated: May 24, 2007.
Mark Foulon,
Acting Under Secretary of Commerce for Industry and Security.
Recommended Decision and Order
On September 12, 2005, the Bureau of Industry and Security, U.S.
Department of Commerce (BIS), issued a charging letter initiating this
administrative enforcement proceeding against Winter Aircraft Products
SA (``Winter Aircraft''), also known as Ruf S. Lopez SA. The charging
letter alleged that Winter Aircraft committed two violations of the
Export Administration Regulations (currently codified at 15 CFR parts
730-774 (2006)) (the ``Regulations''),\1\ Issued under the Export
Administration Act of 1979, as amended (50 U.S.C. app. 2401-2420
(2000)) (the ``Act'').\2\ In accordance with Sec. 766.7 of the
Regulations, BIS has moved for the issuance of an Order of Default
against Winter Aircraft as Winter Aircraft has failed to file an answer
to the allegations in the charging letter issued by BIS within the time
period required by law.
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\1\ The violations charged occurred in 2000. The Regulations
governing the violations at issue are found in the 2000 version of
the Code of Federal Regulations (15 CFR parts 730-774 (2000)). The
2006 Regulations establish the procedures that apply to this matter.
\2\ From August 21, 1994 through November 12, 2000, the Act was
in lapse. During that period, the President, through Executive Order
12,924, which had been extended by successive Presidential Notices,
the last of which was August 3, 2000, 3 CFR, 2000 Comp. 397 (2001),
continued the Regulations in effect under the International
Emergency Economic Powers Act, 50 U.S.C. 1701-1706 (2000)
(``IEEPA''). On November 13, 2000, the Act was reauthorized and it
remained in effect through August 20, 2001. Since August 21, 2001,
the Act has been in lapse and the President, through Executive Order
13,222 of August 17, 2001, 3 CFR, 2001 Compo 783 (2002), as extended
by the Notice of August 3, 2006, 71 FR 44551 (Aug. 7, 2006), has
continued the Regulations in effect under the IEEPA.
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A. Legal Authority for Issuing an Order of Default
Section 766.7 of the Regulations states that BIS may file a motion
for an order of default if a respondent fails to file a timely answer
to a charging letter. That section, entitled Default, provides in
pertinent part:
Failure of the respondent to file an answer within the time
provided constitutes a waiver of the respondent's right to appear
and contest the allegations in the charging letter. In such event,
the administrative law judge, on BIS's motion and without further
notice to the respondent, shall find the facts to be as alleged in
the charging letter and render an initial or recommended decision
containing findings of fact and appropriate conclusions of law and
issue or recommend an order imposing appropriate sanctions.
15 CFR 766.7 (2006).
Pursuant to Sec. 766.6 of the Regulations, a respondent must file
an answer to the charging letter ``within 30 days after being served
with notice of the issuance of the charging letter'' initiating the
proceeding.
B. Service of the Notice of Issuance of Charging Letter
In this case, BIS served notice of issuance of the charging letter
in accordance with Sec. 766.3(b)(1) of the Regulations when it sent a
copy of the charging letter by registered mail to Winter Aircraft at
its last known address on September 12, 2005. BIS has submitted
evidence that establishes that this charging letter was received by
Winter Aircraft on or about September 21, 2005. In addition, BIS also
received a letter from Winter Aircraft acknowledging receipt of the
charging letter on September 21, 2005. Further, BIS and Winter Aircraft
have engaged in several months of correspondence regarding the matter.
BIS counsel has advised Winter Aircraft repeatedly to file an answer to
the charging letter with the Administrative Law Judge (``ALJ''). Winter
Aircraft has failed to file an answer to the charging letter as
required by section 766.6 of the Regulations.
[[Page 29967]]
Accordingly, Winter Aircraft is in default.
C. Summary of Violations Charged
The charging letter filed by BIS included a total of two charges.
Specifically, the charging letter alleged the following:
Charge 1 (15 CFR 764.2(h)--Engaging in a Transaction With Intent To
Evade the Regulations)
Between on or about November 1, 2000, and on or about November
17, 2000, Winter Aircraft took actions with intent to evade the
Regulations. Specifically, on or about November 1, 2000, Winter
Aircraft acquired aircraft parts, items subject to the Regulations
and classified under Export Control Classification Number (``ECCN'')
9A991, from U.S. suppliers with intent to transship such items to
Iran. Winter Aircraft failed to inform the U.S. suppliers of the
ultimate destination of the items and, as such, no license was
obtained from the U.S. Government for this transaction, as was
required by Section 746.7 of the Regulations. On or about November
17, 2000, Winter Aircraft transshipped the aircraft parts subject to
the EAR to Iran with a substantial markup in price. In taking these
actions, Winter Aircraft committed one violation of Section 764.2(h)
of the Regulations.
Charge 2 (15 CFR 764.2(h)--Engaging in a Transaction With Intent To
Evade the Regulations)
Between on or about October 19, 2000, and on or about November
22, 2000, Winter Aircraft took actions with intent to evade the
Regulations. Specifically, on or about October 19, 2000, Winter
Aircraft acquired aircraft parts, items subject to the Regulations
and classified under ECCN 9A991, from U.S. suppliers with intent to
transship such items to Iran. Winter Aircraft failed to inform the
U.S. suppliers of the ultimate destination of the items and, as
such, no license was obtained from the U.S. Government for this
transaction, as was required by Section 746.7 of the Regulations. On
or about November 22, 2000, Winter Aircraft transshipped the
aircraft parts subject to the EAR to Iran with a substantial markup
in price. In taking these actions, Winter Aircraft committed one
violation of Section 764.2(h) of the Regulations.
D. Penalty Recommendation
[REDACTED SECTION]
E. Conclusion
Accordingly, I am referring this Recommended Decision and Order to
the Under Secretary of Commerce for Industry and Security for review
and final action for the agency, without further notice to the
Respondent, as provided in Sec. 766.7 of the Regulations.
Within 30 days after receipt of this Recommended Decision and
Order, the Under Secretary shall issue a written order affirming,
modifying, or vacating the Recommended Decision and Order. See 15 CFR
766.22(c).
Done and Dated May 1, 2007, Baltimore, Maryland.
The Honorable Joseph N. Ingolia,
Chief Administrative Law Judge.
[FR Doc. 07-2676 Filed 5-25-07; 8:45 am]
BILLING CODE 3510-DT-M