2017-00893. Order Relating To Berty Tyloo

In the Matter of: Berty Tyloo with last known addresses of: Rue du Pont Nerf 2, Morges, Switzerland and Rue du Centre, 2, 1131 Tolochenaz, Morges, Switzerland, Respondent

The Bureau of Industry and Security, U.S. Department of Commerce (“BIS”), has notified Berty Tyloo, of Morges, Switzerland (“Tyloo”), of its intention to initiate an administrative proceeding against Tyloo pursuant to Section 766.3 of the Export Administration Regulations (the “Regulations”),^[1] and Section 13(c) of the Export Administration Act of 1979, as amended (the “Act”),^[2] through the issuance of a Proposed Charging Letter to Tyloo that alleges that Tyloo committed one violation of the Regulations. Specifically, the charge is:

Charge 1 15 CFR 764.2(g): Misrepresentation and Concealment of Facts in the Course of an Investigation

On or about June 14, 2013, Tyloo made false or misleading statements to BIS in the course of an investigation. Specifically, Tyloo was interviewed by two BIS supervisory special agents on or about June 14, 2013, in relation to an investigation of unlicensed exports and reexports to Syria of items subject to the Regulations and manufactured by Agilent Technologies, Inc. (“Agilent”), a U.S. company. As early as 2001, Tyloo was the area sales manager or distribution channel manager for the Middle East and Africa for Agilent products for European subsidiaries or affiliates of Agilent, including with regard to the sale and distribution of Agilent products to Syria through a Lebanese distributor or reseller, Technoline SAL (“Technoline”).^[3] In addition, upon information and belief, Tyloo had an ownership interest in Technoline from at least March 2003 until at least the spring of 2008, as demonstrated, inter alia, by correspondence between Tyloo and Technoline management or ownership during this time period in which Tyloo sought information regarding his “share” and “assets” and “profit” in or from Technoline.

During the June 2013 interview, Tyloo stated that he had “no idea” how Agilent products had ended up in Syria and that, as far as he knew, all such products had stayed in Lebanon. Similarly, when asked if Technoline had ever shipped U.S.-origin items to Syria, Tyloo stated, “No, not to my knowledge.” At the time he made these statements, Tyloo knew they were false or misleading and that, in fact, Technoline had sold and distributed Agilent items to Syria beginning in at least 2004. Between at least November 2004 and December 2010, Technoline served as a distributor/reseller of Agilent products to several countries in the Middle East region pursuant to an International Designated Reseller Program Agreement (“reseller agreement”) entered into annually with Agilent's Swiss affiliates.^[4] Each of these reseller agreements explicitly stated that Technoline's territory included Syria. Moreover, on or about January 1, 2010, Tyloo electronically signed the 2010 version of the reseller agreement on Agilent Switzerland's behalf. Nonetheless, during the June 2013 interview, Tyloo falsely or misleadingly omitted any mention of Syria in describing the countries in Technoline's territory under the reseller agreements.

Tyloo's role as the area sales manager or distribution channel manager for Agilent products in the Middle East provided Tyloo access to information about Technoline's sale and distribution of Agilent products to Syria. Upon information and belief, his ownership stake in Technoline also provided him with access to such information. In addition, consistent with the longstanding reseller arrangement described above, on various occasions Tyloo acknowledged Technoline's Syria business involving Agilent products. For example, in a November 14, 2004 message captioned “Agilent sales in Technoline,” Tyloo informed two Technoline officials that he “kept on Syria” in a “contract” for Fiscal Year 2005 between Technoline and Agilent, noting further that even if the Agilent contract administrator removed the reference, “THIS SHOULD NOT STOP US SELLING THERE (capitalization in the original).” ^[5] On or about March 31, 2009, Tyloo thanked Technoline's area sales manager for his “continuous support and all the orders that you [and] your team delivers every month,” citing “your tough territories like Lebanon, Syria, Iraq . . . .” Additionally, on or about November 23, 2009, Technoline's area sales manager provided Tyloo with business plans for several countries in the Middle East, including Syria, and noted in the accompanying message that the “main focus” for 2010 would include “Pharma[ceuticals] in Syria” and “Mid Range products in Academia (Syria and Iraq).” (Parenthetical in original). Tyloo requested these business plans in preparation for his upcoming performance evaluations at Agilent Switzerland. Similarly, in December 2010, Tyloo gave a presentation at a meeting in Spain involving multiple Agilent European affiliates, in which he highlighted sales of Agilent products to Syria.

As alleged herein, Tyloo made false or misleading statements to BIS in the course of an investigation, in violation of Section 764.2(g) of the Regulations. Tyloo did so even though he acknowledged during the June 2013 interview that providing false or misleading information to the BIS agents was unlawful.

Whereas, BIS and Tyloo 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 of the terms of such Settlement Agreement; it is therefore ordered:

First, for a period of three (3) years from the date of this Order, Berty Tyloo, with last known addresses of Rue du Pont Nerf 2, Morges, Switzerland, and Rue du Centre, 2, 1131 Tolochenaz, Morges, Switzerland, and when acting for or on his behalf, his successors, assigns, representatives, agents, or employees (hereinafter collectively referred to as “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, 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.

Third, 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, Tyloo shall not take any action or make or permit to be made any public statement, directly or indirectly, denying the allegations in the Proposed Charging Letter or this Order. The foregoing does not affect Tyloo's testimonial obligations in any proceeding; nor does it affect his right to take legal or factual positions in civil litigation or other civil proceedings in which the U.S. Department of Commerce is not a party.

Fifth, the Proposed Charging Letter, the Settlement Agreement, and this Order shall be made available to the public.

Sixth, this Order shall be served on Tyloo, and shall be published in the Federal Register.

This Order, which constitutes the final agency action in this matter, is effective immediately.

Issued this 10th day of January, 2017.

Richard R. Majauskas,

Acting Assistant Secretary for Export Enforcement.

Footnotes

1.  The Regulations are currently codified in the Code of Federal Regulations at 15 CFR parts 730-774 (2016). The charged violation occurred in 2013. The Regulations governing the violation at issue are found in the 2013 version of the Code of Federal Regulations (15 CFR parts 730-774). The 2016 Regulations set forth the procedures that apply to this matter.

2.  50 U.S.C. 4601-4623 (Supp. III 2015). 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 Comp. 783 (2002)), which has been extended by successive Presidential Notices, the most recent being that of August 4, 2016 (81 FR 52,587 (Aug. 8, 2016)), has continued the Regulations in effect under the International Emergency Economic Powers Act (50 U.S.C. 1701, et seq. (2012)).

3.  From in or about November 1999, until in or about May 2011, Tyloo was employed first by Agilent Technologies Europe B.V. and then Agilent Technologies International SARL. Tyloo was based in Switzerland. Agilent was spun off in 1999 from Hewlett-Packard (“HP”). Tyloo was employed by HP from in or about April 1990, until in or about November 1999, at which time he was transferred to Agilent, within the international distributor operation at Agilent Technologies Europe B.V.

4.  Between on or about November 1, 2004, and on or about December 31, 2007, Technoline acted as a distributor/reseller of Agilent products through reseller agreements it executed with Agilent Technologies Europe B.V. Technoline signed the 2008-2010 versions of the reseller agreement with Agilent Technologies International SARL. See also note 3, supra.

5.  In May 2004, six months prior to Tyloo's November 14, 2004 message, the U.S. Government implemented restrictions on the export and reexport to Syria of U.S.-origin items (with the exception of food and certain medicines). General Order No. 2 of May 14, 2004, Supp. No. 1 to part 736 to the Regulations, was issued pursuant to the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003, enacted on December 12, 2003, and Executive Order 13338 of May 11, 2004. In December 2011, the controls on exports and reexports to Syria were moved from General Order No. 2 to Section 746.9 of the Regulations. The licensing requirements continued unchanged. See 76 FR 77,115 (Dec. 12, 2011). During the June 2013 interview, Tyloo admitted that he had received regular training on U.S. export controls from Agilent's legal department during his tenure with the Agilent subsidiaries or affiliates, including regarding embargoed and sanctioned destinations, and that he knew that U.S.-origin items could not be shipped to, inter alia, Syria. Tyloo also stated that he had received annual export controls training while he was employed by HP.