Essam Alkadi; Export Privileges

DEPARTMENT OF COMMERCE

Export Administration

Essam Alkadi; Export Privileges

In the matter of: Essam Alkadi (also known as Essam Al-Kadi),

P.O. Box 201, Damman 31411, Saudi Arabia; Respondent.

Decision and Order

On May 16, 1997, 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 Essam Alkadi, also known as Essam Al-Kadi

(hereinafter collectively referred to as (``Alkadi''). The charging

letter alleged that Alkadi committed one violation 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.A. app.

Secs. 2401-2420 (1991 & Supp. 1997)) (hereinafter the ``Act'').\2\

Specifically, the charging letter alleged that, on or about December

17, 1993, Alkadi attempted to export a U.S.-origin shotgun from the

United States to Saudi Arabia without obtaining from BXA the validated

export license required by Section 772.1(b) of the former Regulations,

in violation of Section 787.3(b) of the former Regulations.

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\1\ The alleged violation occurred in 1993. The Regulations

governing the violation at issue are found in the 1993 version of

the Code of Federal Regulations (15 C.F.R. Parts 768-799 (1993)).

Those Regulations define the violation that BXA alleges occurred,

and are referred to hereinafter as the former Regulations. Since

that time, the Regulations have been reorganized and restructured;

the restructure Regulations, establish the procedures that apply to

the matters set forth in this decisions 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)), August 14, 1996

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

43629, August 15, 1997), continued the Regulations in effect under

the International Emergency Economic Powers Act (50 U.S.C.A.

Secs. 1701-1706 (1991 & Supp. 1997)).

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BXA presented evidence that it received a signed return receipt on

August 19, 1997 indicating that the charging letter had been delivered.

Because the receipt was returned from Saudi Arabia undated, however,

BXA does not know the exact date of service. Under these circumstances,

BXA designated August 19, 1997, the day BXA received the return

receipt, as the date of service. Alkadi has failed to file an answer to

the charging letter, as required by Section 766.7 of the Regulations,

and is therefore in default. Thus, pursuant to Section 766.7 of the

Regulations, BXA moved that the Administrative Law Judge (hereinafter

the ``ALJ'') find the facts to be as alleged in the charging letter and

render a Recommended Decision and Order.

Following BXA's motion, the ALJ 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 constitute one violation of the

former Regulations by Alkadi, as BXA alleged. The ALJ also agreed with

BXA's recommendation that the appropriate penalty to be imposed for

that violation is a denial, for a period of three years, of all of

Alkadi's export privileges. As provided by Section 766.22 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 ALJ.

Accordingly, it is therefore ordered,

First, that, for a period of three years from the date of this

Order, Essam Alkadi, also known as Essam Al-Kadi, P.O. Box 201 Dammam

31411, Saudi Arabia, 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

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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 the 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 the 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 the denied person, or

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

controlled by the 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 this Order shall be served on Alkadi and on BXA, and

shall be published in the Federal Register.

This Order, which constitutes the final agency action in this

matter, is effective immediately.

Dated: February 20, 1998.

William A. Reinsch,

Under Secretary for Export Administration.

[FR Doc. 98-5261 Filed 2-27-98; 8:45 am]

BILLING CODE 3510-DT-M