Action Affecting Export Privileges; Export Materials, Inc. and Thane-Coat International, Ltd.; Decision and Order on Renewal of Temporary Denial Order

DEPARTMENT OF COMMERCE

Bureau of Export Administration

Action Affecting Export Privileges; Export Materials, Inc. and

Thane-Coat International, Ltd.; Decision and Order on Renewal of

Temporary Denial Order

In the matters of: Export Materials, Inc., 3727 Greenbrier

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.

On October 31, 1997, Acting Assistant Secretary for Export

Enforcement Frank W. Deliberti issued a Decision and Order on Renewal

of Temporary Denial Order (hereinafter ``Order'' or ``TDO''), renewing

for 180 days a May 5, 1997 Order naming 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. (Export Materials, Inc. And Thane-Coat,

International, Ltd. hereinafter collectively referred to as the

``Respondents'' and Thane-Coat, Inc., Ford, and Engebretson, the

``affiliated parties''), as persons temporarily denied all U.S. export

privileges. 62 FR 60063-60065 (November 6, 1997). The Order will expire

on April 29, 1998.

On April 9, 1998, pursuant to Section 766.24 of the Export

Administration Regulations (15 C.F.R. Parts 730-774 (1997))

(hereinafter the ``Regulations''), issued pursuant to the Export

Administration Act of 1979, as amended (50 U.S.C.A. app. sections 2401-

2420 (1991 & Supp. 1998)) (hereinafter the ``Act''),\1\ the Office of

Export Enforcement, Bureau of Export Administration, United States

Department of Commerce (hereinafter ``BXA''), requested that the

Assistant Secretary for Export Enforcement renew the Order against

Thane-Coat International, Inc. and Export Materials, Inc. for an

additional 180 days.

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\1\ 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)), August 14, 1996

(3 C.F.R., 1996 Comp. 298 (1997)), and August 13, 1997 (62 FR 43629,

August 15, 1997), continued the Regulations in effect under the

International Emergency Economic Powers Act (currently codified at

50 U.S.C.A. 1701-1706 (1991 & Supp. 1998)).

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

investigation, it had 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 parts 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.\2\ Moreover, BXA's investigation gave it reason to

believe that the Respondents and the affiliated parties employed a

scheme to export U.S.-origin products from the United States, through

the United Kingdom, to Libya, a country subject to a comprehensive

economic sanctions program, without the authorizations required under

U.S. law, including the Regulations. The approximate value of the 100

shipments at issue was $35 million. In addition, the Respondents and

the affiliated parties undertook several significant and affirmative

actions in connection with the solicitation of business on another

phase of the Great Man-Made River Project.

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\2\ BXA understands that the ultimate goal of this project is to

bring fresh water from wells drilled in southeast and southwest

Libya through prestressed concrete cylinder pipe to the coastal

cities of Libya. This multibillion dollar, multiphase engineering

endeavor is being performed by the Dong Ah Construction Company of

Seoul, South Korea.

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BXA has stated that it believes that the matters under

investigation and the information obtained to date in that

investigation support renewal of the TDO issued against the

Respondents.\3\ 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 Thane-Coat International, Inc. and Export

Materials, Inc. in export-related transactions involving U.S.-origin

goods.

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\3\ On April 17, 1998, BXA requested that the Assistant

Secretary for Export Enforcement renew the October 31, 1997 TDO

against Thane-Coat, Inc., Jerry Vernon Ford, and Preston John

Engebretson.

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Based on BXA's showing, I find that it is appropriate to renew the

order temporarily denying all U.S. export privileges of Thane-Coat

International, Ltd. and Export Materials, Inc. I find that such renewal

is necessary in the public interest to prevent an imminent violation of

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

and abroad to cease dealing with these persons in any commodity,

software, or technology exported or to be exported from the United

States and subject to the Export Administration Regulations, or in any

other activity subject to the Regulations. Moreover, I find such

renewal is in the public interest in order to reduce the substantial

likelihood that Thane-Coat International, Inc. and Export Materials,

Inc. will engage in activities which are in violation of the

Regulations.

Accordingly, it is therefore ordered:

First, that Thane-Coat International, Ltd., and all of its

successors or assigns, officers, representatives, agents, and

[[Page 25200]]

employees when acting on its behalf, and Export Materials, Inc., and

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

and employees when acting on its behalf (hereinafter referred to

collectively as the ``denied persons''), 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 denied person any item

subject to the Regulations;

B. Take any action that facilitates the acquisition, or attempted

acquisition, by any 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 any 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 any denied person of any item

subject to the Regulations that has been exported from the United

States;

D. Obtain from any 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 which is owned, possessed or controlled by any denied person, or

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

controlled by any 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 any 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.

This order, which constitutes final agency action in this matter,

is effective immediately and shall remain in effect for 180 days.

A copy of this Order shall be served on each Respondent and this

Order shall be published in the Federal Register.

Entered this 29th day of April, 1998.

F. Amanda, DeBusk,

Assistant Secretary for Export Enforcement.

Certificate of Service

I hereby certify that, on April 30, 1998, I caused the foregoing

Decision and Order on Renewal of Temporary Denial Order to be mailed

first-class, postage prepaid to: Export Materials, Inc., 3727

Greenbriar Drive, No. 108, Stafford, Texas 77477.

I hereby certify that on April 30, 1998, I caused the foregoing

Decision and Order on renewal of Temporary Denial Order to be mailed

registered mail, return receipt requested to: Thane-Coat International,

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

The Bahamas.

Lucinda G. Maruca,

Secretary, Office of the Assistant Secretary for Export Enforcement.

[FR Doc. 98-12188 Filed 5-6-98; 8:45 am]

BILLING CODE 3510-DT-M