2010-5109. Action Affecting Export Privileges; Robert Kraaipoel

In the Matter of: Robert Kraaipoel, P.O. Box 418, Heerhugowaard, Netherlands 1700AK.

and

Flemming Straat 36, Heerhugowaard, Netherlands 1700AK.

Respondent.

Order Relating to Robert Kraaipoel

The Bureau of Industry and Security, U.S. Department of Commerce (“BIS”), has notified Robert Kraaipoel, in his individual capacity, of its intention to initiate an administrative proceeding against him 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 Robert Kraaipoel that alleged that he committed one violation of the Regulations. Specifically, the charge is:

Charge 1 15 CFR 764.2(d)—Conspiracy

Between on or about October 1, 2005, and continuing through on or about October 30, 2007, Robert Kraaipoel conspired and acted in concert with others, known and unknown, to violate the Regulations and to bring about acts that constitute violations of the Regulations. The purpose of the conspiracy was to export U.S.-origin items including aircraft parts, electronic components, and polymide film on multiple occasions, from the United States to Iran, via the Netherlands, Cyprus, and the United Arab Emirates (“UAE”), without the required U.S. Government authorization. Pursuant to section 746.7 of the Regulations, authorization was required from OFAC before the aircraft parts, electronic components, and polymide film, items subject to the Regulations ^[3] and the Iranian Transactions Regulations, 31 CFR Part 560 (“ITR”), could be exported from the United States to Iran. Pursuant to Section 560.204 of the ITR, an export to a third country intended for transshipment to Iran is a transaction subject to the ITR. In furtherance of the conspiracy, Robert Kraaipoel and his co-conspirators devised and employed a scheme to purchase these items from the United States on behalf of Iranian customers and give U.S. manufacturers false information regarding the ultimate destination, end user, and end use of the items, thereby causing false export control documents to be submitted to the U.S. Government listing countries other than Iran as the ultimate destination for the items. These acts were taken to export U.S.-origin items to Iran without the required U.S. Government authorization and avoid detection by law enforcement. By engaging in this activity, Robert Kraaipoel committed one violation of section 764.2(d) of the Regulations.

Whereas, BIS and Robert Kraaipoel 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, Robert Kraaipoel shall be assessed a civil penalty in the amount of $250,000. Payment of the $250,000 penalty shall be suspended for a period of three (3) years from the date of this Order, and thereafter shall be waived, provided that during the period of suspension, Robert Kraaipoel has committed no violation of the Act, or any regulation, order, or license issued thereunder.

Second, for a period of seven (7) years from the date of this Order, Robert Kraaipoel, P.O. Box 418, Heerhugowaard, Netherlands 1700AK and Flemming Straat 36, Heerhugowaard, Netherlands 1700AK, his representatives, assigns or agents (hereinafter collectively referred to as “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 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 Robert Kraaipoel 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 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 Proposed Charging Letter, the Settlement Agreement, and this Order shall be made available to the public.

Seventh, that this Order shall be served on the Denied Person, and shall be published in the Federal Register.

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

Issued this 2nd day of March 2010.

David W. Mills,

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 charged violations occurred between 2005 and 2007. The Regulations governing the violations at issue are found in the 2005 through 2007 versions of the Code of Federal Regulations (15 CFR Parts 730-774 (2005-2007)). The 2009 Regulations set forth 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. However, 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 13, 2009 (74 FR 41,325 (Aug. 14, 2009)), has continued the Regulations in effect under the International Emergency Economic Powers Act (50 U.S.C. 1701, et seq.).

3.  The items were classified as Export Control Classification Numbers (“ECCNs”) 9A991, 1C008.a.3, and 5A991. Additionally, some of the aircraft parts were designated EAR99, which is a designation for items subject to the Regulations but not listed on the Commerce Control List. (2005-2007).