2011-4819. Action Affecting Export Privileges; William Chi-Wai Tsu And Cheerway Corporation; Order Denying Export Privileges

In the Matter of:

William Chi-Wai Tsu, currently incarcerated at: Register Number 34009-112, USP Florence ADMAX, U.S. Penitentiary, P.O. Box 8500, Florence, CO 81226;

and with an address at:

1432 Forest Glen Drive, Unit #65, Hacienda Heights, CA 91745;

Respondent;

Cheerway Corporation, 1641 W. Main Street, Suite 308, Alhambra, CA 91801;

and with an address at:

1432 Forest Glenn Drive, Unit #65, Hacienda Heights, CA 91745;

Related Person.

A. Denial of Export Privileges of William Chi-Wai Tsu

On August 3, 2009, in the U.S. District Court for the Central District of California, William Chi-Wai Tsu (“Tsu”) pled guilty to, and was convicted of, violating two counts of the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq. (2000)) (“IEEPA”). Specifically, Tsu pled guilty to knowingly and willfully exporting and causing to be exported from the United States to the People's Republic of China Triquint Semiconductor integrated circuits classified as Export Control Classification Number 3A001 without first obtaining from the U.S. Department of Commerce a license or written authorization for such export, knowing such a license or authorization was required. Tsu was sentenced to 40 months of imprisonment and three years of supervised release.

Section 766.25 of the Export Administration Regulations (“EAR” or “Regulations”) ^[1] provides, in pertinent part, that “[t]he Director of the Office of Exporter Services, in consultation with the Director of the Office of Export Enforcement, may deny the export privileges of any person who has been convicted of a violation of the [Export Administration Act (“EAA”)], the EAR, of any order, license or authorization issued thereunder; any regulation, license, or order issued under the International Emergency Economic Powers Act (50 U.S.C. 1701-1706); 18 U.S.C. 793, 794 or 798; section 4(b) of the Internal Security Act of 1950 (50 U.S.C. 783(b)), or section 38 of the Arms Export Control Act (22 U.S.C. 2778).” 15 CFR 766.25(a); see also Section 11(h) of the EAA, 50 U.S.C. app. section 2410(h). The denial of export privileges under this provision may be for a period of up to 10 years from the date of the conviction. 15 CFR 766.25(d); see also 50 U.S.C. app. section 2410(h). In addition, Section 750.8 of the Regulations states that the Bureau of Industry and Security's Office of Exporter Services may revoke any Bureau of Industry and Security (“BIS”) licenses previously issued in which the person had an interest in at the time of his conviction.

I have received notice of Tsu's conviction for violating the IEEPA, and have provided notice and an opportunity for Tsu to make a written submission to BIS, as provided in Section 766.25 of the Regulations. I have not received a submission from Tsu. Based upon my review and consultations with BIS's Office of Export Enforcement, including its Director, and the facts available to BIS, I have decided to deny Tsu's export privileges under the Regulations for a period of 10 years from the date of Tsu's conviction. I have also decided to revoke all licenses issued pursuant to the Act or Regulations in which Tsu had an interest at the time of his conviction.

B. Denial of Export Privileges of Related Person

Pursuant to Sections 766.25(h) and 766.23 of the Regulations, the Director of BIS's Office of Exporter Services, in consultation with the Director of BIS's Office of Export Enforcement, may take action to name persons related to a Respondent by ownership, control, position of responsibility, affiliation, or other connection in the conduct of trade or business in order to prevent evasion of a denial order. Because Tsu is the vice president of Cheerway Corporation (“Cheerway”), Cheerway is related to Tsu by ownership, control, position of responsibility, affiliation, or other connection in the conduct of trade or business. BIS believes that naming Cheerway as a related person to Tsu is necessary to avoid evasion of the denial order against Tsu.

As provided in Section 766.23 of the Regulations, I gave notice to Cheerway that its export privileges under the Regulations could be denied for up to 10 years due to its relationship with Tsu and that BIS believes naming it as a person related to Tsu would be necessary to prevent evasion of a denial order imposed against Tsu. In providing such notice, I gave Cheerway an opportunity to oppose its addition to the Tsu Denial Order as a related party. Having received no submission, I have decided, following consultations with BIS's Office of Export Enforcement, including its Director, to name Cheerway as a Related Person to the Tsu Denial Order, thereby denying its export privileges for 10 years from the date of Tsu's conviction.

I have also decided to revoke all licenses issued pursuant to the Act or Regulations in which the Related Person had an interest at the time of Tsu's conviction. The 10-year denial period will end on August 3, 2019.

Accordingly, it is hereby ordered:

I. Until August 3, 2019, William Chi-Wai Tsu with last known addresses at: Register Number 34009-112, USP Florence ADMAX, U.S. Penitentiary, P.O. Box 8500, Florence, CO 81226 and 1432 Forest Glen Drive, Unit #65, Hacienda Heights, CA 91745, and when acting for or on behalf of Tsu, his representatives, assigns, agents or employees (collectively referred to hereinafter as the “Denied Person”), and the following person related to the Denied Person as defined by Section 766.23 of the Regulations: Cheerway Corporation, with last known addresses at: 1641 W. Main Street, Suite 308, Alhambra, CA 91801, and 1432 Forest Glenn Drive, Unit #65, Hacienda Heights, CA 91745, and when acting for or on behalf of Cheerway, its successors or assigns, agents, or employees (“the Related Person”) (together, the Denied Person and the Related Person are “Persons Subject to this Order”), 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. 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.

II. No person may, directly or indirectly, do any of the following:

A. Export or reexport to or on behalf of the Persons Subject to this Order any item subject to the Regulations;

B. Take any action that facilitates the acquisition or attempted acquisition by the Persons Subject to this Order 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 Persons Subject to this Order acquire or attempt to acquire such ownership, possession or control;

C. Take any action to acquire from or to facilitate the acquisition or attempted acquisition from the Persons Subject to this Order of any item subject to the Regulations that has been exported from the United States;

D. Obtain from the Persons Subject to this Order 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 Persons Subject to this Order, or service any item, of whatever origin, that is owned, possessed or controlled by the Persons Subject to this Order 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.

III. In addition to the Related Person named above, after notice and opportunity for comment as provided in section 766.23 of the Regulations, any other 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 if necessary to prevent evasion of the Order.

IV. 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.

V. This Order is effective immediately and shall remain in effect until August 3, 2019.

VI. In accordance with Part 756 of the Regulations, Tsu may file an appeal of this Order with the Under Secretary of Commerce for Industry and Security. The appeal must be filed within 45 days from the date of this Order and must comply with the provisions of Part 756 of the Regulations.

VII. In accordance with Part 756 of the Regulations, the Related Person may also file an appeal of this Order with the Under Secretary of Commerce for Industry and Security. The appeal must be filed within 45 days from the date of this Order and must comply with the provisions of Part 756 of the Regulations.

VIII. A copy of this Order shall be delivered to the Denied Person and the Related Person. This Order shall be published in the Federal Register.

Issued this 7th day of February, 2011.

Bernard Kritzer,

Director, Office of Exporter Services.

Footnotes

1.  The Regulations are currently codified in the Code of Federal Regulations at 15 CFR Parts 730-774 (2010). The Regulations issued pursuant to the EAA (50 U.S.C. app. sections 2401-2420 (2000)). Since August 21, 2001, the EAA 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 12, 2010 (75 FR 50681, August 16, 2010), has continued the Regulations in effect under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq. (2000)).