Action Affecting Export Privileges; Thane-Coat, Inc., Jerry Vernon Ford, Preston John Engebretson, Export Materials, Inc. and Thane-Coat International, Ltd

DEPARTMENT OF COMMERCE

Bureau of Export Administration

Action Affecting Export Privileges; Thane-Coat, Inc., Jerry

Vernon Ford, Preston John Engebretson, Export Materials, Inc. and

Thane-Coat International, Ltd

In the matters of: Thane-Coat, Inc., 12725 Royal Drive,

Stafford, Texas 77477; Jerry Vernon Ford, President, Thane-Coat,

Inc., 12725 Royal Drive, Stafford, Texas 77477, and with an address

at 7707 Augustine Drive, Houston, Texas 77036; Preston John

Engebretson, Vice-President, Thane-Coat, Inc., 12725 Royal Drive,

Stafford, Texas 77477, and with an address at 8903 Bonhomme Road,

Houston, Texas 77074; Export Materials, Inc., 3727 Greenbriar Drive,

No. 108, Stafford, Texas 77477, and Thane-Coat International, Ltd.,

Suite C, Regent Centre, Explorers Way, P.O. Box F-40775, Freeport,

The Bahamas, Respondents.

Order Temporarily Denying Export Privileges

The Office of Export Enforcement, Bureau of Export Administration,

United States Department of Commerce (hereinafter ``BXA''), pursuant to

the provisions of Section 766.24 of the Export Administration

Regulations (61 Federal Regulation 12734-13041, March 25, 1996, to be

codified at 15 CFR Parts 730-774) (hereinafter the ``Regulations''),

issued pursuant to the Export Administration Act of 1979, as amended

(50 U.S.C.A. app. Sec. Sec. 2401-2420 (1991 & Supp. 1997) (hereinafter

the ``Act''),\1\ has asked the Acting Assistant Secretary for Export

Enforcement to issue an order temporarily denying all United States

export privileges to Thane-Coat, Inc.; Jerry Vernon Ford, president,

Thane-Coat, Inc.; Preston John Engebretson, vice-president, Thane-Coat,

Inc.; Export Materials, Inc.; and Thane-Coat International, Ltd.

(hereinafter collectively referred to as ``respondents'').

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\1\ The Act expired on August 20, 1997. Executive Order 12924 (3

CFR 1994 Comp. 917 (1995)), extended by Presidential Notices of

August 15, 1995 (3 CFR, 1995 Comp. 501 (1996)) and August 14, 1996

(61 Federal Regulations 42527, August 15, 1996), continued the

Regulations in effect under the International Emergency Economic

Powers Act (currently codified at 50 U.S.C.A. Sec. Sec. 1701-1706

(1991 & Supp. 1997)).

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In its request, BXA states that, as a result of an ongoing

investigation, it has reason to believe that, during the period from

approximately June 1994 through approximately July 1996, Thane-Coat,

Inc., through Ford and Engebretson, and using its affiliated companies,

Thane-Coat International, Ltd. and Export Materials, Inc., made

approximately 100 shipments of U.S.-origin pipe coating materials,

machines, and part to the Dong Ah Consortium in Benghazi, Libya. These

items were for use in coating the internal surface of prestressed

concrete cylinder pipe for the Government of Libya's Great Man-Made

River Project. BXA's investigation gives it reason to believe that the

respondents employed a scheme to export U.S.-origin products from the

United States, through the United Kingdom or Italy, to Libya, a country

subject to a comprehensive economic sanctions program, without the

authorizations required under U.S. law and regulations, including the

Regulations.

In light of these events, BXA believes that the violations

respondents are suspected of having committed were significant,

deliberate and covert and are likely to occur again unless a temporary

denial order naming respondents is issued. In addition, BXA believes

that a temporary denial order is necessary to give notice to companies

in the United States and abroad that they should cease dealing with

respondents in export-related transactions involving U.S.-origin goods.

Based on the showing made by BXA, I find that an order temporarily

denying the export privileges of each respondent is necessary in the

public interest to prevent an imminent violation of the Act and the

Regulations and to give notice to companies in the United States and

abroad to cease dealing with respondents in items subject to the Act

and the Regulations, in order to reduce the substantial likelihood that

respondents will continue to engage in activities that are in violation

of the Act and the Regulations. This order is issued on an ex parte

basis without a hearing, based on BXA's showing that expedited action

is required.

Accordingly, it is therefore ordered: First, that Thane-Coat, Inc.

12725 Royal Drive, Stafford, Texas 77477, and all of its successors or

assigns, and officers, representatives, agents, and employees when

acting on its behalf; Jerry Vernon Ford, president, Thane-Coat, Inc.,

12725 Royal Drive, Stafford, Texas 77477, and with an address at 7707

Augustine Drive, Houston, Texas 77036; Preston John Engebretson, vice-

president, Thane-Coat, Inc. 12725 Royal Drive, Stafford, Texas 77477,

and with an address at 8903 Bonhomme Road, Houston, Texas 77074; Export

Materials, Inc., 3727 Greenbriar Drive, No. 108, Stafford, Texas 77477,

and all of its successors or assigns, and officers, representatives,

agents, and employees when acting on its behalf; and Thane-Coat

International, Ltd., Suite C, Regent Centre, Exployers Way, P.O. Box F-

40775, Freeport, The Banamas, and all of its successors or assigns, and

officers, representatives, agents, and employees when acting on its

behalf, 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 any of the denied persons

any item subject to the Regulations;

B. Take any action that facilitates the acquisition or attempted

acquisition by any of the denied persons of the

[[Page 26472]]

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 any of the denied persons 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 any of the denied persons of any item

subject to the Regulations that has been exported from the United

States;

D. Obtain from any of the denied persons 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 any of the denied

persons, or service any item, of whatever origin, that is owned,

possessed or controlled by any of the denied persons 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 any of the denied persons 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 foreign-produced

direct product of U.S.-origin technology.

Fifth, that, in accordance with the provisions of Section 766.24(e)

of the Regulations, any respondent may, at any time, appeal this Order

by filing with the Office of the Administrative Law Judge, U.S. Coast

Guard ALJ Docketing Center, 40 South Gay Street, Baltimore, Maryland

21202-4022, a full written statement in support of the appeal.

Sixth, that this Order is effective immediately and shall remain in

effect for 180 days.

Seventh, that, in accordance with the provisions of Section

766.24(d) of the Regulations, BXA may seek renewal of this Order by

filing a written request not later than 20 days before the expiration

date. Any respondent may oppose a request to renew this Order by filing

a written submission with the Assistant Secretary for Export

Enforcement, which must be received not later than seven days before

the expiration date of this Order.

A copy of this Order shall be served on each respondent. This Order

shall be published in the Federal Register.

Dated: May 5, 1997.

Frank Deliberti,

Acting Assistant Secretary for Export Enforcement.

[FR Doc. 97-12573 Filed 5-13-97; 8:45 am]

BILLING CODE 3510-DT-M