E9-31367. Action Affecting Export Privileges: Ning Wen

In the Matter of: Ning Wen, No. 07511-089, Federal Prison Camp—H Dorm, P.O. Box 1000, Duluth, MN 55814; and 1218 Dewey St., #14, Manitowoc, WI 54220, Respondent.

Order Relating to Ning Wen

The Bureau of Industry and Security, U.S. Department of Commerce (“BIS”) has initiated an administrative proceeding against Ning Wen (“Wen”) 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 issuance of a charging letter to Wen that alleged that he committed 124 violations of the Regulations. Specifically, the charges are:

Charge 1: 15 CFR 764.2(d)—Conspiracy To Export Electronic Components to People's Republic of China Without the Required Licenses

Between on or about March 16, 1992 and on or about September 30, 2004, Wen conspired with others, known and unknown, to bring about acts that violated the Regulations. The object of the conspiracy was to export electronic components from the United States to the People's Republic of China (PRC) in violation of U.S. export control laws by failing to obtain the proper export licenses for certain shipments, and/or providing false descriptions and/or withholding required information on the invoices provided to the shippers. In furtherance of this conspiracy, the co-conspirators, through Wen Enterprises—a business run out of Wen's home—caused exports of electronic components controlled under Export Control Classification Numbers (“ECCNs”) 3A001 and 3A002 on the Commerce Control List to the PRC without the licenses required by the Regulations. Items classified under ECCNs 3A001 and 3A002 are controlled for national security reasons and their export to the PRC requires a license from the U.S. Department of Commerce pursuant to Section 742.2 of the Regulations. Also in furtherance of this conspiracy, the co-conspirators made false representations regarding the true value of shipments being exported to the PRC and, on several occasions between May 2004 and July 2004, Wen consulted directly with Ms. Hailin Lin regarding matters relevant to the conspiracy, including on methods to avoid detection of illegal exports. In conspiring to bring about acts that violate the Regulations, Wen committed one violation of Section 764.2(d) of the Regulations.

Charges 2-56: 15 CFR 764.2(b)—Causing an Export Without the Required License

Between on or about January 28, 2002 through on or about September 30, 2004, Wen caused 55 acts prohibited by the Regulations. Specifically, Wen caused 55 exports of items controlled under ECCNs 3A001 and 3A002 to the PRC without the licenses required by Section 742.2 of the Regulations. These exports were committed in furtherance of and as a reasonably foreseeable consequence of the conspiracy described in Charge One above. In so doing, Wen committed 55 violations of Section 764.2(b) of the Regulations.

Charges 57-111: 15 CFR 764.2(e)—Acting With Knowledge of a Violation

In connection with each of the transactions described in Charges 2 through 56 above, on 55 occasions between on or about January 28, 2002 through on or about September 30, 2004, Wen bought, sold, and/or transferred electronic components subject to the Regulations to be exported from the United States with knowledge that a violation of the Regulations was about to occur or was intended to occur in connection with the components. Specifically, at the time that the electronic components were bought, sold and/or transferred, all of which were done as a reasonably foreseeable consequence of the conspiracy described in Charge One above, Wen knew or had reason to know that the export of the items required an export license but that an export license would not be obtained. In so doing, Wen committed 55 violations of Section 764.2(e) of the Regulations.

Charges 112-124: 15 CFR 764.2(h)—Taking Action With Intent To Evade the Regulations

In connection with certain transactions described above, on thirteen occasions between on or about April 5, 2004 through on or about September 30, 2004, Wen took actions with intent to evade the provisions of the Regulations. Specifically, in connection with the preparation of export control documents, Wen did make false statements and conceal material facts by representing on shipping invoices that the value of thirteen different shipments was less than $2500 when in fact the true value of the shipments exceeded $2500. This was done so that Shipper's Export Declarations, which are filed with the U.S. Government and which must contain information about export license requirements, would not be requested for the exports. In so doing, Wen committed 13 violations of Section 764.2(h) of the Regulations.

Whereas, BIS and Wen 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 Wen shall be assessed a civil penalty in the amount of $1,364,000, the payment of which shall be suspended for a period of one (1) year from the date of entry of this Order, and thereafter shall be waived, provided that during the suspension, Wen has committed no violation of the Act, or any regulation, order or license issued thereunder.

Second, that for a period of 15 years from the date of issuance of the Order, Ning Wen, No. 07511-089, Federal Prison Camp-H Dorm, P.O. Box 1000, Duluth, MN 55814, with an address at 1218 Dewey St., #14, Manitowoc, WI 54220, and when acting on behalf of Wen, his representatives, assigns, or agents (“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. 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.

Third, that no person may, directly or indirectly, do any of the actions described below with respect to an item that is subject to the Regulations and that has been, will be, or is intended to be exported or reexported from the United States:

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 Wen 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.

Fifth, 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.

Sixth, that the Administrative Law Judge shall be notified that this case is withdrawn from adjudication.

Seventh, 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.

Entered this 29th day of December 2009.

Kevin Delli-Colli,

Deputy Assistant Secretary of Commerce for Export Enforcement.

Footnotes

1.  The Regulations are currently codified in the Code of Federal Regulations at 15 CFR parts 730-774 (2009). The violations charged occurred between 2002 and 2004. The Regulations governing the violations at issue are found in the 2002-2004 versions of the Code of Federal Regulations. The 2009 Regulations govern the procedural aspects of this case.

2.  50 U.S.C. app. sections 2401-2420 (2000). 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 most recently by the Notice of August 13, 2009 (74 FR 41325 Aug. 14, 2009)), has continued the Regulations in effect under the International Emergency Economic Powers Act (50 U.S.C. 1701-1706).