Karl Cording; Decision and Order

DEPARTMENT OF COMMERCE

Export Administration

Karl Cording; Decision and Order

In the Matter of: Karl Cording, with Addresses at Anzstrasse 8,

Windhoek, Namibia, A. Rosenthal (PTY) Ltd., P.O. Box 97, 292

Independence Avenue, Windhoek, Namibia, 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 Karl Cording. The charging letter

alleged that Cording committed seven violations of the Export

Administration Regulations (61 FR 12734-13041, March 25, 1996, to be

codified at 15 CFR parts 730-774) (hereinafter the ``Regulations''),\1\

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

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

CFR 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 restructed; the restructured

Regulations, to be codified at 15 CFR Parts730-774, 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

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

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

(61 FR 42527, August 15, 1996), continued the Regulations in effect

under International Emergency Economic Powers Act (currently

codified at 50 U.S.C.A. 1701-1706 (1991 & Supp. 1997)).

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Specifically, the charging letter alleged that, between mid-1990

and early 1992, Cording conspired with James L. Stephens, president and

co-owner of Weisser's Sporting Goods, National City, California, and

Ian Ace, manager of A. Rosenthal, Cape Town, South Africa, to export

and, on two separate occasions, actually exported U.S.-origin shotguns,

with barrel lengths 18 inches and over, to Namibia and South Africa,

without applying for and obtaining from the Department the validated

export licenses Cording 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,

Cording 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,

Cording 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.

The charging letter was served on Cording during December 1995.

Cording failed to answer the charging letter. Thus, on April 18, 1997,

pursuant to section 766.7 of the Regulations, BXA moved that the

Administrative Law Judge find the facts to be as alleged in the

charging letter and render a Recommended Decision and Order.

Following BXA's motion, on May 1, 1997, Chief Administrative Law

Judge Joseph A. Ingolio issued a Recommended Decision and Order in

which he found the facts to be as alleged in the charging letter, and

concluded that those facts constituted violations of the Act and

Regulations, as BXA alleged. The Administrative Law Judge also

concurred with BXA's recommendation that the appropriate penalty to be

imposed for those violations is a denial, for a period of 20 years, of

all of Cording's export privileges. As provided by section 766.22(a) 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 Administrative Law Judge.

Accordingly, it is therefore Ordered, First, that for a period of

20 years from the date of this Order, Karl Cording, with an address at

Anzstrasse 8, Windhoek, Namibia; with an address c/o A. Rosenthal (PTY)

Ltd., P.O. Box 97, 292 Independence Avenue, Windhoek, Namibia; with an

address c/o A. Rosenthal (PTY) Ltd., P.O. Box 3721, 13 Loop Street,

Cape Town, South Africa; and with an address c/o 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 an ``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 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;

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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

Section 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 Cording and

BXA, and shall be published in the Federal Register.

This Decision and Order, which constitutes final agency action in

this matter, is effective immediately.

Dated: May 29, 1997.

William A. Reinsch,

Under Secretary for Export Administration.

[FR Doc. 97-14636 Filed 6-4-97; 8:45 am]

BILLING CODE 3510-DT-M