Action Affecting Export Privileges; Export Materials, Inc. and TIC Ltd.

DEPARTMENT OF COMMERCE

Bureau of Export Administration

Action Affecting Export Privileges; Export Materials, Inc. and

TIC Ltd.

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

Drive, No. 108, Stafford, Texas 77477; and TIC Ltd., Suite C, Regent

Centre, Explorers Way, P.O. Box F-40775, Freeport, The Bahamas,

Respondents.

Decision and Order on Renewal of Temporary Denial Order

On October 23, 1998, I 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, inter alia, Export Materials, Inc.

and Thane-Coat International Ltd. (hereinafter collectively referred to

as the ``Respondents''), as persons temporarily denied all U.S. export

privileges. 63 FR 58706-58707 (November 2, 1998).\1\ The Order will

expire on April 21, 1999.

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\1\ The May 5, 1997 Order also named Thane-Coat, Inc.; Jerry

Vernon Ford, president, Thane-Coat, Inc.; and Preston John

Engebretson, vice-president, Thane-Coat, Inc., as persons

temporarily denied all U.S. export privileges. I am issuing a

separate Decision and Order today renewing the TDO against Thane-

Coat, Ford, and Engebretson in a ``non-standard'' format.

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On April 1, 1999, pursuant to Section 766.24 of the Export

Administration Regulations (15 CFR Parts 730-774 (1998)) (hereinafter

the ``Regulations''), issued pursuant to the Export Administration Act

of 1979, as amended (50 U.S.C.A. app. Secs. 2401-2420 (1991 & Supp.

1998)) (hereinafter the ``Act''),\2\ the Office of Export Enforcement,

Bureau of Export Administration, United States Department of Commerce

(hereinafter ``BXA''), requested that I renew the Order against TIC

Ltd.\3\ and

[[Page 23050]]

Export Materials, Inc. for an additional 180 days.

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\2\ The Act explored 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)), August 14, 1996 (3

CFR, 1996 Comp. 298 (1997)), August 13, 1997 (3 CFR, 1997 Comp. 306

(1998)), and August 13, 1998 (63 FR 44121, August 17, 1998,

continued the Regulations in effect under the International

Emergency Economic Powers Act (currently codified at 50 U.S.C.A

Secs. 1701-1706 (1991 & Supp. 1998)).

\3\ In its initial request for the issuance of a TDO and its

October, 1997 and April, 1998 renewal requests, BXA identified this

company as Thane-Coat International, Ltd. The company is

incorporated in the Bahamas as TIC Ltd.

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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,

TIC 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.\4\ 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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\4\ BXA understands that the ultimate goal of this project is to

bring fresh water from wells drilled in southwest 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.\5\ 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 TIC Ltd. and Export Materials, Inc. in

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

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\5\ On April 1, 1999, BXA requested that I renew the October 23,

1998 TDO against Thane-Coat, Inc., Jerry Vernon Ford, and Preston

John Engebretson in a ``non-standard'' format.

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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 TIC 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 TIC Ltd.

and Export Materials, Inc. will engage in activities which are in

violation of the Regulations.

Accordingly, it is therefore ordered:

First, that TIC Ltd., Suite C, Regent Centre, Explorers Way, P.O.

Box F-40775, Freeport, the Bahamas, and all of its successors or

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

on its behalf, and Export Materials, Inc., 3727 Greenbriar Drive, No.

108, Stafford, Texas 77477, 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 of related services, may also be made subject to the provisions

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

of the Regulations, TIC Ltd. or Export Materials, Inc. may, at any

time, appeal this Order by filing a full written statement in support

of the appeal with the Office of the Administrative Law Judge, U.S.

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

Maryland 21202-4022.

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 that 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 the Order

[[Page 23051]]

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

Order shall be published in the Federal Register.

Entered this 20th day of April 1999.

F. Amanda DeBusk,

Assistant Secretary for Export Enforcement.

[FR Doc. 99-10739 Filed 4-28-99; 8:45 am]

BILLING CODE 3510-DT-M