[Federal Register Volume 64, Number 144 (Wednesday, July 28, 1999)]
[Notices]
[Pages 40817-40818]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19248]
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DEPARTMENT OF COMMERCE
Bureau of Export Administration
Action Affecting Export Privileges; Dmitry N. Chernyshenko;
Decision and Order
In the Matters of: Dmitry N. Chernyshenko, Director, SFT
Advertising Agency, 35 Altufievskoe Avenue, Moscow, 127410, Russia,
and SFT Advertising Agency, 35 Altufievskoe Avenue, Moscow, 127410,
Russia, Respondents.
On May 14, 1998, the Office of Export Enforcement, Bureau of Export
Administration, United States Department of Commerce (hereinafter
``BXA''), issued separate charging letters initiating administrative
proceedings against Dmitry N. Chernyshenko and SFT Advertising Agency,
(hereinafter) ``Chernyshenko'' and ``SFT'').\1\ The charging letters
alleged that Chernyshenko and SFT each committed three violations of
the Export Administration Regulations (currently codified at 15 CFR
Parts 730-774 (1999)) (hereinafter the ``Regulations''),\2\ issued
pursuant to the Export Administration Act of 1979, as amended (50
U.S.C.A. app. Secs. 2401-2420 (1991 & Supp. 1998)) (hereinafter the
``Act'').\3\
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\1\ In light of the fact that the enforcement proceedings
against Chernyshenko and SFT arose out of the same transaction, and
as the evidence supporting BXA's allegations in both cases is the
same, BXA has consolidated the proceedings and filed a single
default submission.
\2\ The violations at issue occurred in 1993. The Regulations
governing those violations are found in the 1993 version of the Code
of Federal Regulations (15 CFR Parts 768-799 (1993)) and referred to
hereinafter as the former Regulations. Since that time, the
Regulations have been reorganized and restructured; the restructured
Regulations establish the procedures and apply to these matters.
\3\ The Act expired on August 20, 1994. The Executive Order
12924 (3 CFR, 1994 Comp. 917 (1995)), extended by Presidential
Notices of August 15, 1995 (3 CFR, 1995 Comp. 501 (1996)), August
14, 1996 (3 CFR, 1996 Comp. 298 (1997)), August 13, 1997 (3 CFR,
1997 Comp. 306 (1998)), and August 13, 1998 (3 CFR, 1998 Comp. 294
(1999)), continued the Regulations in effect under the International
Emergency Economic Powers Act (50 U.S.C.A. Secs. 1701-1706 (1991 &
Supp. 1999)).
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Specifically, the charging letters alleged that, beginning in March
1993 and continuing through September 1993, Chernyshenko and SFT
engaged in a scheme to cause the export of a Hewlett-Packard Apollo
Model 735 Workstation with a 99 MHz PA RISC processor chip (hereinafter
collectively referred to as ``HP-Workstation'') from the United States
through Germany to Russia, the ultimate destination, without first
obtaininig the authorizations that Chernyshenko and SFT knew or had
reason to know were required. BXA alleged that, by ordering commodities
exported or to be exported from the United States, and that, by
financing that transaction, with knowledge or reason to know that a
violation of the Act, or any regulation, order, or license issued
thereunder occurred, was about to occur, or was intended to occur with
respect to the transaction, both Chernyshenko and SFT violated Section
787.4(a) of the former Regulations.
Furthermore, the charging letters alleged that, in connection with
that transaction, on or about May 14, 1993, using a German business
affiliate's stationery and signing that affiliate's president's name
without his permission, Chernyshenko, acting in his capacity as
Director of SFT, drafted a letter of assurance which stated, among
other things, that the HP-Workstation would not be shipped outside GCT-
eligible countries, without prior authorization from the appropriate
national authorities and, in particular, that ``this workstation [will
not be reexported] from Germany to Russia or any other portion of the
former Soviet Union without the permission of the U.S. Commerce
Department.'' BXA alleged that, by falsifying information in
[[Page 40818]]
the letter of assurance, both Chernyshenko and SFT (through
Chernyshenko, its Director) concealed material facts directly or
indirectly from a United States agency for the purpose of or in
connection with effecting an export from the United States, and thereby
violated Section 787.5(a) of the former Regulations.
Finally, the charging letters alleged that, in connection with the
transaction and the activities described above, on or about July 20,
1993, both Cherynshenko and SFT caused, counseled or induced a third
party to state on a Shipper's Export Declaratio, an export control
document as defined in Section 770.2 of the former Regulations, that
the shipment of the HP-Workstation was authorized for export from the
United States to Germany under General License GCT, when in fact the
shipment required a validated license, as the HP-Workstation was
ultimately destined for Russia. BXA alleged that, in so doing, both
Chernyshenko and SFT caused, counseled, or induced the making of a
false statement of material fact either directly or indirectly to a
United States agency on an export control document, an act prohibited
by Section 787.5(a) of the former Regulations, and thereby violated
Section 787.2 of the former Regulations.
BXA presented evidence that the changing letters were served on
Chernyshenko and SFT. Neither Chernyshenko nor SFT has answered the
charging letters, as required by Section 766.7 of the Regulations, and
each respondent is therefore in default. Thus, pursuant to Section
766.7 of the Regulations, BXA moved that the Administrative Law Judge
(hereinafter the ``ALJ'') find the facts to be as alleged in the
charging letters and render a Recommended Decision and Order.
Following BXA's motion, the ALJ issued a Recommended Decision and
Order in which he found the facts to be as alleged in the charging
letters, and concluded that those facts constitute three violations of
the former Regulations by both Chernyshenko and SFT, as BXA alleged.
The ALJ also agreed with BXA's recommendation that the appropriate
penalty to be imposed for those violations is that Chernyshenko and SFT
each be denied all U.S. export privileges for a period of 10 years. As
provided by Section 766.22 of the Regulations, the Recommended Decision
and Order has been referred to me for final action.
Based on my review of the entire record, I affirm the findings of
fact and conclusions of law in the Recommended Decision and Order of
the ALJ.
Accordingly, it is therefore ordered,
First, that, for a period of 10 years from the date of this Order,
Dmitry N. Chernyshenko, Director, SFT Advertising Agency, 35
Altufievskoe Avenue, Moscow, 127410 Russia, and SFT Advertising Agency,
35 Altufievskoe Avenue, Moscow, 127410 Russia, and all of SFT's
successors, assigns, officers, representatives, agents and employees
when acting for or on behalf of SFT, 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. 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.
Second, that no person may, directly or indirectly, do any of the
following:
A. Export or reexport to or on behalf of either denied person any
item subject to the Regulations;
B. Take any action that facilitates the acquisition or attempted
acquisition by either 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 either 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 either denied person or any item subject
to the Regulations that has been exported from the United States;
D. Obtain from either 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 that is owned, possessed or controlled by either denied person, or
service any item, of whatever origin, that is owned, possessed or
controlled by either 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, 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 either 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, 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.
Fifth, that this Order shall be served on both Chernyshenko and
SFT, as well as on BXA, and shall be published in the Federal Register.
This Order, which constitutes the final agency action in this
matter, is effective immediately.
Dated: July 21, 1999.
William A. Reinsch,
Under Secretary for Export Administration.
[FR Doc. 99-19248 Filed 7-27-99; 8:45 am]
BILLING CODE 3510-DT-M
