The Bureau of Industry and Security, U.S. Department of Commerce (“BIS”) has notified Dolphin International, Ltd. (hereinafter referred to as “Dolphin”) of its intention to initiate an administrative proceeding against Dolphin pursuant to § 766.3 of the Export Administration Regulations (currently codified at 15 CFR parts 730-774 (2005)) (“Regulations”)  and Section 13(c) of the Export Administration Act of 1979, as amended (50 U.S.C. app. §§ 2401-Start Printed Page 121652420 (2000))(“Act”), by issuing a proposed charging letter to Dolphin that alleged that Dolphin committed two violations of the Regulations. Specifically, the charges are:
1. One Violation of 15 CFR 764.2(d)-Conspiracy to Export Toxins to North Korea Without the Required License: Beginning in or about late 2000 and continuing into September 2002, Dolphin conspired and acted in concert with others, known and unknown, to export toxins from the United States to North Korea without the required Department of Commerce license. The goal of the conspiracy was to obtain certain toxins, including Aflatoxin (M1, P1, Q1) and Staphyloccocal Enterotoxin (A and B), items subject to the Regulations and classified under export control classification number (“ECCN”) 1C351, on behalf of a North Korean end-user and to export those toxins to North Korea. In furtherance of the conspiracy, Dolphin negotiated with individuals from North Korea end-user and to export those toxins to North Korea. In furtherance of the conspiracy, Dolphin negotiated with individuals from North Korea to acquire the toxins and developed a plan to deliver the toxins from the United States to North Korea. Contrary to Section 742.2 of the Regulations, no Department of Commerce license was obtained for the export of toxins from the United States to North Korea.
2. One Violation of 15 CFR 764.2(c)—Soliciting an Export of Toxins Without the Required License: In or about late 2000 through in or about September 2002, Dolphin solicited a violation of the Regulations by enlisting others to acquire toxins, including Aflatoxin (M1, P1, Q1) and Staphyloccocal Enterotoxin (A and B), items subject to the Regulations and classified under ECCN 1C351, for export from the United States to North Korea without the required Department of Commerce license. Specifically, Dolphin asked a co-conspirator in the United States to acquire the toxins from the U.S. manufacturer and then ship the toxins to a co-conspirator in the Netherlands, who would forward the toxins to North Korea. Contrary to Seciton 742.2 of the Regulations, no Department of Commerce license was obtained for the export of toxins from the United States to North Korea.
Whereas, BIS and Dolphin have entered into a Settlement Agreement pursuant to Section 766.18(a) 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 the terms of such Settlement Agreement;
It is therefore ordered:
First, that a civil penalty of $22,000 is assessed against Dolphin, which shall be paid to the U.S. Department of Commerce no later than 30 days from the date of entry of this Order. Payment shall be made in the manner specified in the attached instructions.
Second, that, pursuant to the Debt Collection Act of 1982, as amended (31 U.S.C. 3701-3702E (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, Dolphin 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 timely payment of the civil penalty 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 Dolphin. Accordingly, if Dolphin should fail to pay the civil penalty in a timely manner, the undersigned may enter an Order denying all of Dolphin's export privileges under the Regulations for a period of one year from the date of entry of this Order. The payment of the civil penalty is guaranteed by Mr. Vishwanath Kakade Rao (hereinafter referred to as “K.V. Rao”), in his individual capacity, and K.V. Rao and Dolphin, are jointly and severally liable for the payment of the penalty.
Fourth, that for a period of four years from the date of entry of this Order, Dolphin International, Ltd., 21 Commercial Complex, Gulboker Park Extension, New Delhi 110049, India, its successors or assigns, and when acting for or on behalf of Dolphin, its officers, representatives, agents, or employees (“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. Benefiting 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.Start Printed Page 12166
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 Dolphin 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 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.
Eighth, that the proposed charging letter, the Settlement Agreement, and this Order shall be made available to the public.
Ninth, that this Order shall be served on the Denied Person 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.Start Signature
Entered this 2nd day of March, 2006.
Darryl W. Jackson,
Assistant Secretary of Commerce for Export Enforcement.
1. The violations charged occurred in 2000 through 2002. The Regulations governing the violations at issue at found in the 2000 through 2002 versions of the Code of Federal Regulations (15 CFR Parts 730-774 (2000-2002)). The 2005 Regulations establish the procedures that apply to this matter.Back to Citation
2. From August 21, 1994 through November 12, 2000, the Act was in lapse. During that period, the President, through Executive Order 12924, which has 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 2, 2005 (70 FR 45273 (August 5, 2005)), has continued the Regulations in effect under the IEEPA.Back to Citation
[FR Doc. 06-2242 Filed 3-8-06; 8:45 am]
BILLING CODE 3510-DT-M