The Bureau of Industry and Security, U.S. Department of Commerce (“BIS”) has initiated an administrative proceeding against EHI Group, USA, Inc. (“EhI”) pursuant to section 766.3 of the Export Administration Regulations (currently codified at 15 CFR parts 730-774 (2207)) (the “Regulations”), and section 13(c) of the Export Administration Act of 1979, as amended (50 U.S.C. app. section 2401-2420 (2000)) (the “Act”), through issuance of a charging letter to EHI that alleged that EHI committed 3 violations of the Regulations. Specifically, the charges are:
Charge 1: 15 CFR 764.2(d)—Conspiracy to Export Microwave Amplifiers to China without the required Department of Commerce License.
Beginning in or about September 2001 and continuing into or about May 2002, EHI conspired and acted in concert with others, known and unknown, to bring about or do to an act that constitutes a violation of the Regulations. Specifically, EHI conspired to export microwave amplifiers from the United States to the People's Republic of China (“China”) without the required Department of Commerce license. The goal of the conspiracy was to obtain microwave amplifiers on behalf of a Chinese end-user and to export those microwave amplifiers to China. In furtherance of the conspiracy, EHI acquired the microwave amplifiers from a U.S. company and then exported them from the United States to China. The microwave amplifiers were items subject to the Regulations and were classified under export control classification number (“ECCN”) 3A001. Contrary to section 742.4 of the Regulations, no Department of Commerce license was obtained for the export of the amplifiers from the United States to China. In so doing, EHI committed one violation of section 764.4 of the Regulations.
Charge 2: 15 CFR section 764.2(a): Exporting Microwave Amplifiers Without the Required Department of Commerce License.
On or about May 22, 2002, EHI engaged in conduct prohibited by the Regulations by exporting microwave amplifiers, items subject to the Regulations and classified under ECCN 3A001, from the United States to China, without obtaining a license from the Department of Commerce as required by section 742.4 of the Regulations. In so doing, EHI committed one violation of section 764.2(a) of the Regulations.
Charge 3: 15 CFR section 764.2(e): Acting With Knowledge That a Violation of the Regulations Would Occur.
In connection with the transaction referenced above, EHI ordered or transferred microwave amplifiers that were to be exported from the United States with knowledge that a violation of the Regulations would occur. Specifically, EHI had knowledge that a license was required for the export as EHI was advised by an individual in China that the items in question were classified as ECCN 3A001 and subject to U.S. export regulations. Furthermore, EHI had knowledge of the Regulations, as Mr. Qing Chang Jiang, President of EHI, had met with officials from BIS on several occasions to discuss the Regulations and the export of microwave amplifiers to China. In addition, EHI submitted an export application to the Department of Commerce for the microwave amplifiers described above and exported Start Printed Page 46210those amplifiers during the pendency of that application. As such, EHI, at all relevant times, knew that the items required a license if exported to China and that no such license would be obtained. In so doing, EHI committed one violation of section 764.2(e) of the Regulations.
Whereas, BIS and EHI have entered into a Settlement Agreement pursuant to section 766.18(b) 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 of the terms of such Settlement Agreement; It is Therefore Ordered:
First, that a civil penalty of $17,000 is assessed against EHI, of which $500 shall be paid to the U.S. Department of Commerce not later than November 1, 2007; $500 shall be paid to the U.S. Department of Commerce not later than February 1, 2008; $5,000 shall be paid to the U.S. Department of Commerce not later than May 1, 2008; and the balance of $11,000 shall be paid to the U.S. Department of Commerce not later than August 1, 2008. Payment shall be made in the manner specified in the attached instructions.
Second, for a period of five years from the date of entry of this Order, EHI Group USA, Inc., 10677 C Rosewood Road, Cupertino, CA 95014, its successors or assigns, and when acting for or on behalf of EHI, its representatives, agents, officers or employees (“Denied Person”) may not participate, directly or indirectly, 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.
Third, 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.
Fourth, 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 EHI 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.
Fifth, 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.
Sixth, that the charging letter, the Settlement Agreement, this Order, and the record of this case as defined by Section 766.20 of the Regulations shall be made available to the public.
Seventh, that the administrative law judge shall be notified that this case is withdrawn from adjudication.
Eighth, 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 6th day of August, 2007.
Darryl W. Jackson,
Assistant Secretary of Commerce for Export Enforcement.
1. The violations alleged to have been committed occurred in 2001 and 2002. The Regulations governing the violations at issue are found in the 2001-2002 versions of the Code of Federal Regulations (15 CFR parts 730-774 (2001-2002)). The 2007 Regulations establish the procedures that apply to this matter.Back to Citation
2. 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)), as extended by successive Presidential Notices, the most recent being that of August 3, 2006 (71 FR 44,551 (Aug. 7, 2006)), has continued the Regulations in effect under the International Emergency Economic Powers Act (50 U.S.C. section 1701-1706 (2000)).Back to Citation
[FR Doc. 07-4036 Filed 8-16-07; 8:45 am]
BILLING CODE 3510-DT-M