In the Matter of: Macosia International, 2004 Baltimore Street, Laredo, Texas 78041, Respondent

DEPARTMENT OF AGRICULTURE

DEPARTMENT OF COMMERCE

Bureau of Export Administration

In the Matter of: Macosia International, 2004 Baltimore Street,

Laredo, Texas 78041, Respondent

Decision and Order

On August 14, 1998, 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 Macosia International (hereinafter

``Macosia''). The charging letter alleged that Macosia committed four

violations of the Export Administration Regulations (currently codified

at 15 CFR parts 730-774 (1999)) (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. 1999)) (the Act).\2\

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\1\ The alleged violations occurred in 1993 and 1994. The

Regulations governing the violations at issue are found in the 1993

and 1994 versions of the Code of Federal Regulations (15 CFR parts

768-799 (1993 and 1994)). Those Regulations define the violations

that BXA alleges occurred and are referred to hereinafter as the

former Regulations. Since that time, the Regulations have been

reorganized and restructured; the restructured Regulations establish

the procedures that apply to the matters set forth herein.

\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)), August 14, 1996 (3

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

(1998)), August 13, 1998 (3 CFR, 1998 Comp. 294 (1999)) and August

10, 1999 (64 FR 44101, August 13, 1999), continued the Regulations

in effect under the International Emergency Economic Powers Act (50

U.S.C.A. 1701-1706 (1991 & Supp. 1999)).

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Specifically, the charging letter alleged that, on four separate

occasions between on or about August 17, 1993 and on or about August

18, 1994, Macosia exported handcuffs and leg irons from the United

States to Mexico without obtaining the validated export license

required by Sec. 772.1(b) of the former Regulations. BXA alleged that,

by exporting handcuffs and leg irons to any person or destination or

for any use in violation of or contrary to the terms of the Act, or any

regulation, order, or license issued thereunder, Macosia violated

Section 787.6 of the former Regulations in connection with each of the

exports, for a total of four violations.

Macosia failed to answer or otherwise respond to the charging

letter. Accordingly, pursuant to the default procedures set forth in

Sec. 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 that service of the charging letter was made on

Macosia on September 10, 1998 and that, because it filed no answer to

the charging letter, Macosia was in default. The ALJ also found the

facts to be as alleged in the charging letter, and concluded that those

facts establish that Macosia committed four violations of the former

Regulations, as BXA alleged. The ALJ also agreed with BXA's

recommendation that the appropriate penalty to be imposed for the

violations is a denial, for a period of seven years, of all of

Macosia's export privileges. As provided by Sec. 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

seven years from the date of this Order, Macosia International, 2004

Baltimore Street, Laredo, Texas 78041, and all of its successors or

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

for or on behalf of Macosia International 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 the denied person any item

subject to the Regulations;

B. Take any action that facilitates the acquisition or attempted

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 Sec. 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 Macosia International 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.

[[Page 68995]]

Dated: November 29, 1999.

William A. Reinsch,

Under Secretary for Export Administration.

[FR Doc. 99-31957 Filed 12-8-99 8:45 am]

BILLING CODE 3510-DT-M