[Federal Register Volume 62, Number 157 (Thursday, August 14, 1997)]
[Notices]
[Pages 43503-43504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21453]
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DEPARTMENT OF COMMERCE
Bureau of Export Administration
Decision and Order
In the Matter of: Ian Ace, with addresses at 4 Mimosa Way,
Pinelands, South Africa, A. Rosenthal (PTY) Ltd., P.O. Box 3721, 13
Loop Street, Cape Town, South Africa, and A. Rosenthal (PTY) Ltd.,
P.O. Box 44198, 65 7th Street, Denmyr Building, 2104 Linden, South
Africa, Respondent.
Decision and Order
On November 27, 1995, the Office of Export Enforcement, Bureau of
Export Administration, United States Department of Commerce
(hereinafter ``BXA''), issued a charging letter initiating an
administrative proceeding against Ian Ace. The charging letter alleged
that Ian Ace committed seven violations of the Export Administration
Regulations (currently codified at 15 C.F.R. parts 730-774 (1997))
(hereinafter the ``Regulations''),\1\ issued pursuant to the Export
Administration Act of 1979, as amended (50 U.S.C. app. sections 2401-
2420) (hereinafter the ``Act'').\2\
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\1\ The violations at issue occurred between mid-1990 and early
1992. The Regulations governing those violations are found in the
1990, 1991, and 1992 versions of the Code of Federal Regulations (15
C.F.R. parts 768-799 (1990, 1991, and 1992)) and are referred to
hereinafter as the former Regulations. Since that time, the
Regulations have been reorganized and restructured; the restructured
Regulations, currently codified at 15 C.F.R. Parts 730-774 (1997),
establish the procedures that apply to the matters set forth in this
Decision and Order.
\2\ The Act expired on August 20, 1994. Executive Order 12924 (3
C.F.R. 1994 Comp. 917 (1995)), extended by Presidential Notices of
August 15, 1995 (3 C.F.R. 1995 Comp. 501 (1996)) and August 14, 1996
(3 C.F.R., 1996 Comp. 298 (1997)), continued the Regulations in
effect under the International Emergency Economic Powers Act
(currently codified at 50 U.S.C. 1701-1706).
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Specifically, the charging letter alleged that, between mid-1990
and early 1992, Ace, manager of A. Rosenthal (PTY) Ltd., Cape Town,
South Africa, conspired with James L. Stephens, president and co-owner
of Weisser's Sporting Goods, National City, California, and Karl
Cording, co-owner and managing director of A. Rosenthal (PTY) Ltd.,
Windhoek, Namibia, to export and, on two separate occasions, actually
exported U.S.-origin shotguns, with barrel lengths of 18 inches and
over, to Namibia and South Africa, without applying for and obtaining
from the U.S. Department of Commerce the validated export licenses Ace
knew or had reason to know were required under the Act and Regulations.
In addition, BXA alleged that, in furtherance of the conspiracy, and in
connection with each of those exports, Ace made false or misleading
representations of material fact to a U.S. Government Agency in
connection with the preparation, submission, or use of export control
documents. BXA alleged that, in so doing, Ace committed one violation
of Section 787.3(b), two violations of Section 787.4(a), two violations
of Section 787.5(a), and two violations of Section 787.6 of the former
Regulations, for a total of seven violations of the former Regulations.
BXA issued a charging letter to Ace at his residential address in
Pinelands, South Africa, and at his business address in Linden, South
Africa. BXA has presented evidence that Ace was served with notice of
issuance of the charging letter at his Linden, South Africa, business
address on December 9, 1995.\3\ Ace failed to answer the charging
letter. Thus, on June 26, 1997, pursuant to Section 766.7 of the
Regulations, BXA moved that the Administrative Law Judge find that
facts to be as alleged in the charging letter and render a Recommended
Decision and Order.
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\3\ The copy of the charging letter addressed to Ace at his
residential address was returned to BXA during April 1996. (It had
been marked by South African postal authorities as ``Unclaimed''.)
On April 24, 1996, BXA sent a copy of the November 27, 1995 charging
letter to Ace at a second business address in Cape Town, South
Africa. Ace received this copy of the charging letter on June 13,
1996.
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Following BXA's motion, on July 8, 1997, Chief Administrative Law
Judge Joseph A. Angel issued a Recommended Decision and Default Order
in which he found the facts to be as alleged in the charging letter. He
concluded that those facts constituted violations of the Act and
Regulations. The Administrative Law Judge also concurred with BXA's
recommendation that the appropriate penalty to be imposed for these
violations is a denial, for a period of 20 years, of all of Act's
export privileges. As provided by Section 766.22(a) of the Regulations,
the Administrative Law Judge referred the Recommended Decision and
Order 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 Administrative Law Judge. I believe that the Administrative Law
Judge's recommended denial of export privileges for 20 years is
appropriate. This case is aggravated by the fact that Ace violated
export controls that were designed to express U.S. abhorrence with
apartheid as then practiced in South Africa. These violations were
serious and undetermined important U.S. foreign policy interests. A
lengthy period of denial will help keep U.S.-origin items out of his
hands and make future violations less likely. Finally, this penalty is,
as the Administrative Law Judge explained, consistent with the
penalties received by the other participants in these violations.
Accordingly, it is therefore ordered, First, that for a period of
20 years from the date of this Order, Ian Ace, with the following
addresses, 4 Mimosa Way, Pinelands, South Africa; A. Rosenthal (PTY)
Ltd., P.O. Box 3721, 13 Loop Street, Cape Town, South Africa; and A.
Rosenthal (PTY) Ltd., P.O. Box 44198, 65 7th Street, Denmyr Building,
2104 Linden, South Africa, 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.
[[Page 43504]]
Second, 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 a 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 a 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 that is owned, possessed or controlled by a denied person, or
service any item, of whatever origin, that is owned, possessed or
controlled by a 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
Sec. 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, 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 a copy of this Order shall be served on Ace and BXA,
and shall be published in the Federal Register.
This Order, which constitutes final agency action in this matter,
is effective immediately.
Dated: August 8, 1997.
William A. Reinsch,
Under Secretary for Export Administration.
[FR Doc. 97-21453 Filed 8-13-97; 8:45 am]
BILLING CODE 3510-DT-M
