07-5590. In the Matters of: S.P. Equipamentos de Protecao ao Trabalho Ltda., Rua Visconde de Inhauma, 386-Saude 04146-030 Sao Paulo, Brazil, Respondent; Decision and Order on Petition to Set Aside Default Order

On February 26, 2007, the Acting Under Secretary of Commerce for Industry and Security issued a Final Decision and Order, pursuant to his authority under Section 766.22 of the Export Administration Regulations (hereinafter “Regulations”), in which he affirmed the findings of fact and conclusions of law as recommended by an Administrative Law Judge (ALJ) that Respondent was in default on an administrative proceedings initiated against it under the Regulations.

Respondent has petitioned me to set aside the default order using my authority under Section 366.7(b) of the Regulations. For the reasons stated below, I grant the Petition.

The relevant facts in this matter are as follows. In a charging letter filed on September 13, 2004, the Bureau of Industry and Security (“BIS”) alleged that Respondent committed two violations of the Regulations,^[1] issued under the Export Administration Act of 1979, as amended (50 U.S.C. app 2401-2420 (2000)).^[2]

On September 13, 2004, BIS mailed the notice of issuance of the charging letter by registered to the Respondent at its last known address. The file indicates that the notice of issuance of a charging letter was received by the Respondent on or about September 24, 2004, and counsel, who no longer represents the Respondent, filed a Notice of Appearance on February 7, 2005. Respondent, or its former counsel, did not file an answer to the charging letter with the ALJ, as required by Section 766.6 of the Regulations, but there is evidence in the file that the opposing counsel engaged in settlement negotiations regarding these charges for about one year before BIS filed a Motion for Default Order on or about November 9, 2006. The former counsel for the Respondent states in a declaration to accompany this Petition that counsel did not receive notice of the BIS decision to file a Motion for Default Order, nor was counsel served with the motion that was filed.

On January 31, 2007, based on the record before him, the ALJ issued a recommended decision in which he found that the Respondent was in default. On February 26, 2007, the Acting Under Secretary for Industry and Security issued a Final Decision and Order affirming the ALJ's recommended decision, and imposing a ten-year denial of Respondent's export privileges.

On September 7, 2007, Respondent filed its Petition asserting among other things, that good cause exists to set aside the default. On October 24, 2007, BIS filed a response to the Petition in which it did not oppose the finding that goop cause exists to set aside the default.

The Regulations provide me with the authority to set aside a default order. Section 766.7(b)(1) of the Regulations states: “[U]pon petition filed by a respondent against whom a default order has been issued, which petition is accompanied by an answer meeting the requirements of § 766.6(b) of this part, the Under Secretary may, after giving all parties an opportunity to comment, and for good cause shown, set aside the default and vacate the order entered thereon and remand the matter to the administrative law judge for further proceedings.”

The Petition and its supporting materials justify a finding that good cause exists to grant this Petition and there is no opposition to this finding.

Accordingly, I find good cause has been shown to set aside the Final Decision and Order, dated February 26, 2007, and the Order is hereby vacated and this matter is remanded to the ALJ for further proceedings.

This Order, which constitutes the final agency action on this Petition, is effective immediately.

Dated: November 5, 2007.

Mario Mancuso,

Under Secretary for Industry and Security

Footnotes

1.  The violations charged occurred in 2002. The Regulations governing the violations at issue are found in the 2002 version of the Code of Federal Regulations (15 CFR parts 730-774 (2002)). The 2007 Regulations establish the procedures that apply to this matter.

2.  50 U.S.C. app. §§ 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)), which has been extended by successive Presidential Notices, the most recent being that of August 15, 2007 (72 FR 46137 (Aug. 16, 2007)), has continued the Regulations in effect under the International Emergency Economic Powers Act (50 U.S.C. 1701-1706 (2000)) (“IEEPA”).