Addition and Removal of Certain Persons on the Entity List: Addition of Persons Acting Contrary to the National Security or Foreign Policy Interests of the United States; Removal of Person Based on Removal Request

AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Final rule.

SUMMARY:

This rule amends the Export Administration Regulations (EAR) by adding twenty-four persons to the Entity List (Supplement No. 4 to Part 744) on the basis of Section 744.11 of the EAR. The persons who are added to the Entity List have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. These persons will be listed under the following nine destinations on the Entity List: Belarus, China, Hong Kong, Iran, Malaysia, New Zealand, Norway, South Africa and United Kingdom.

This rule also removes one person located in Hong Kong from the Entity List. This person is being removed from the Entity List as a result of a request for removal submitted by that person, a review of information provided in the removal request in accordance with Section 744.16 (Procedure for requesting removal or modification of an Entity List entity), and further review conducted by the End-User Review Committee's (ERC) member agencies.

The Entity List provides notice to the public that certain exports, reexports, and transfers (in-country) to parties identified on the Entity List require a license from the Bureau of Industry and Security (BIS) and that availability of license exceptions in such transactions is limited.

DATES:

Effective Date: This rule is effective June 28, 2010. Although there is no formal comment period, public comments on this regulation are welcome on a continuing basis.

ADDRESSES:

You may submit comments, identified by RIN 0694-AE92, by any of the following methods:

E-mail: publiccomments@bis.doc.gov. Include “RIN 0694-AE92” in the subject line of the message.

Fax: (202) 482-3355. Please alert the Regulatory Policy Division, by calling (202) 482-2440, if you are faxing comments.

Mail or Hand Delivery/Courier: Timothy Mooney, U.S. Department of Commerce, Bureau of Industry and Security, Regulatory Policy Division, 14th St. & Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230, Attn: RIN 0694-AE92.

Send comments regarding the collection of information associated with this rule, including suggestions for reducing the burden, to Jasmeet K. Seehra, Office of Management and Budget (OMB), by e-mail to Jasmeet_K._Seehra@omb.eop.gov, or by fax to (202) 395-7285; and to the Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, 14th St. & Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230. Comments on this collection of information should be submitted separately from comments on the final rule (i.e. RIN 0694-AE92)—all comments on the latter should be submitted by one of the three methods outlined above.

FOR FURTHER INFORMATION CONTACT:

Karen Nies-Vogel, Chairman, End-User Review Committee, Office of the Assistant Secretary, Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-3811, Fax: (202) 482-3911, E-mail: kniesv@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

The Entity List provides notice to the public that certain exports, reexports, and transfers (in-country) to parties identified on the Entity List require a license from the Bureau of Industry and Security (BIS) and that availability of license exceptions in such transactions is limited. Persons are placed on the Entity List on the basis of criteria set forth in certain sections of part 744 (Control Policy: End-User and End-Use Based) of the EAR.

The End-User Review Committee (ERC), composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, the Treasury, makes all decisions regarding additions to, removals from or changes to the Entity List. The ERC makes all decisions to add an entry to the Entity List by majority vote and all decisions to remove or modify an entry by unanimous vote.

ERC Entity List Decisions

Additions to the Entity List

The ERC made a determination to add twenty-four persons under twenty-five entries to the Entity List on the basis of Section 744.11 (License Requirements that Apply to Entities Acting Contrary to the National Security or Foreign Policy Interests of the United States) of the EAR. The twenty-five entries added to the Entity List consist of three persons in Belarus, three persons in China, two persons in Hong Kong, three persons in Iran, four persons in Malaysia, two persons in New Zealand, two persons in Norway, five persons in South Africa, and one person in the United Kingdom. The twenty-fifth entry is to account for one person who has addresses in both Norway and South Africa.

The ERC reviewed Section 744.11(b) (Criteria for revising the Entity List) in making the determination to add these persons to the Entity List. Under that paragraph, entities for which there is reasonable cause to believe, based on specific and articulable facts, that have been involved, are involved, or pose a significant risk of being or becoming involved in activities that are contrary to the national security or foreign policy interests of the United States and those acting on behalf of such entities may be added to the Entity List pursuant to Section 744.11. Paragraphs (b)(1)-(b)(5) include an illustrative list of activities that could be contrary to the national security or foreign policy interests of the United States. The persons being added to the Entity List under this rule have been determined by the ERC to be involved in activities that could be contrary to the national security or foreign policy interests of the United States. Examples of the specific activities these persons were involved with that are contrary to the national security or foreign policy interests of the United States pursuant to Section 744.11 are, as follows:

Belmicrosystems Research and Design Center, SOE Semiconductor Devices Factory, Vasili Kuntsevich and Hamid Reza Simchi are being added based on evidence that they reexported U.S.-origin read-out integrated circuit (ROIC) wafers to Electronic Components Industries (ECI) of Iran.

Fang Yu and Xi'an Xiangyu Aviation Technology Group are being added due to their role in the illegal export to China of Unmanned Aerial Vehicle (UAV) autopilots controlled for national security reasons.

OnTime Electronics Technology Company and Tam Wai Tak, a.k.a., Thomsom Tam, are being added due to their involvement in the diversion of controlled U.S.-origin items through Hong Kong to China. On June 5, 2008, OnTime Electronics Technology Company and Tam Wai Tak were indicted in the Southern District of Florida for conspiracy and violations of the Arms Export Control Act and the International Emergency Economic Powers Act.

Fadjr Marine Industries, a.k.a., SADAF; Tadbir Sanaat Sharif Technology Development Center (TSS); Austral Aero-Marine Corp. Sdn Bhd; Austral Aviation Corp.; Jimmy Tok; Mok Chin Fan, a.k.a., Chong Chen Fah; Leigh Michau; Q-SPD (Q-Marine International Ltd.); Gunther Migeotte; Icarus Design AS; Icarus Marine (Pty) Ltd.; Ralph Brucher; Scavenger Manufacturing (Pty) Ltd.; Shawn Hugo De Villiers; and Ad Hoc Marine Designs Ltd., are being added for illegally reexporting the Bradstone Challenger, a vessel that was subject to the EAR, to Iran for intended use by the Iranian Revolutionary Guard Corps (IRGC) Navy and for providing technical assistance on Iranian naval projects.

In addition, the Department of Commerce has reason to believe that Chinese electro-optics procurement firm Toptics, Inc. has procured U.S. origin uncooled thermal imaging cameras and may have reexported these items to Iran.

This rule implements the decision of the ERC to add twenty-four persons under twenty-five entries to the Entity List on the basis of Section 744.11 of the EAR. For all of the twenty-four persons under twenty-five entries added to the Entity List, the ERC specifies a license requirement for all items subject to the EAR and establishes a license application review policy of a presumption of denial. A BIS license is required for the export, reexport or transfer (in-country) of any item subject to the EAR to any of the persons listed above and described below in further detail, including any transaction in which any of the listed persons will act as purchaser, intermediate consignee, ultimate consignee, or end-user of the items. This listing of these persons also prohibits the use of license exceptions (see part 740 of the EAR) for exports, reexports and transfers (in-country) of items subject to the EAR involving such persons.

Specifically, this rule adds the following twenty-four persons under twenty-five entries to the Entity List:

BELARUS

(1) Belmicrosystems Research and Design Center, Office 313, 12 Korzhenevsky Street, 20108 Minsk, Republic of Belarus;

(2) SOE Semiconductor Devices Factory, Office 313, 12 Korzhenevsky Street, 20108 Minsk, Republic of Belarus; and

(3) Vasili Kuntsevich, Office 313, 12 Korzhenevsky Street, 20108 Minsk, Republic of Belarus.

CHINA

(1) Fang Yu, 16 Gaoxin 4th Road, Xian High Tech Industrial Development Zone, Xian, China;

(2) Toptics, Inc., Chuangye Building 7/1F, 1197 Bin'An Road, Binjiang, Hangzhou, Zhejiang 310052, China; and

(3) Xi'an Xiangyu Aviation Technology Group, a.k.a., Xi'an Xiangyu Aviation Technology Company, 16 Gaoxin 4th Road, Xian High Tech Industrial Development Zone, Xian, China.

HONG KONG

(1) OnTime Electronics Technology Company, Room 609-610 6/F Boss Commercial Center, 28 Ferry Street, Jordon, Kowloon, Hong Kong; and

(2) Tam Wai Tak, a.k.a., Thomsom Tam, Room 609-610 6/F, Boss Commercial Center, 28 Ferry Street, Jordon, Kowloon, Hong Kong.

IRAN

(1) Fadjr Marine Industries, a.k.a., SADAF, 169 Malekloo Ave, Farjam Ave, Tehran Pars, Tehran, Iran;

(2) Hamid Reza Simchi, P.O. Box 19575-354, Tehran, Iran; and

(3) Tadbir Sanaat Sharif Technology Development Center (TSS), First Floor, No. 25 Shahid Siadat Boulevard, North Zanjan Street,Yadegar Emam Highway, Tehran, Iran.

MALAYSIA

(1) Austral Aero-Marine Corp. Sdn Bhd, 10A Jalan 2/137B, Resource Industrial Centre Off Jalan Kelang Lama 58000, Kuala Lumpur, Malaysia;

(2) Austral Aviation Corp., 10A Jalan 2/137B, Resource Industrial Centre Off Jalan Kelang Lama 58000, Kuala Lumpur, Malaysia;

(3) Jimmy Tok, 10A Jalan 2/137B, Resource Industrial Centre Off Jalan Kelang Lama 58000, Kuala Lumpur, Malaysia; and

(4) Mok Chin Fan, a.k.a., Chong Chen Fah, 10A Jalan 2/137B, Resource Industrial Centre Off Jalan Kelang Lama 58000, Kuala Lumpur, Malaysia.

NEW ZEALAND

(1) Leigh Michau, P.O. Box 34-881, Birkenhead, Auckland, New Zealand; and

(2) Q-SPD (Q-Marine International Ltd.), P.O. Box 34-881, Birkenhead, Auckland, New Zealand.

NORWAY

(1) Gunther Migeotte, Titangata 1, N-1630 Gamle, Fredrikstad, Norway; and H. Evjes vei 8A, Gressvik, Norway; and Holsneset 19, 6030 Langevag, Norway; and Titangata 1, 1630 Fredrikstad, Norway (See alternate address under South Africa); and

(2) Icarus Design AS, Titangata 1 N-1630 Gamle, Fredrikstad, Norway.

SOUTH AFRICA

(1) Gunther Migeotte, 1 River Street, Rosebank, Cape Town, 7700, South Africa; and P.O. Box 36623, Menlo Park, 0102, South Africa; and 16 Manu Rua, 262 Sprite Avenue, Faerie Glen, 0081, South Africa (See alternate address under Norway);

(2) Icarus Marine (Pty) Ltd., 1 River Street, Rosebank, Cape Town, South Africa;

(3) Ralph Brucher, P.O. Box 9523, Centurion 0046, South Africa;

(4) Scavenger Manufacturing (Pty) Ltd., P.O. Box 288, Silverton, Pretoria 0127, South Africa; and

(5) Shawn Hugo De Villiers, 1 River Street, Rosebank, Cape Town 7700, South Africa; and 39 Myburgii Street, Somerset West, Cape Town, South Africa.

UNITED KINGDOM

(1) Ad Hoc Marine Designs Ltd., 38 Buckland Gardens, Ryde Isle of Wight PO 33 3AG United Kingdom.

Removal From the Entity List

The ERC also made a determination to remove one person, Asia Link, located in Hong Kong, as a result of Asia Link's request for removal from the Entity List. Based upon the review of the information provided in the removal request in accordance with Section 744.16 (Procedure for requesting removal or modification of an Entity List entity), and further review that was conducted by the ERC's member agencies, the ERC determined that Asia Link should be removed from the Entity List.

The ERC decision to remove Asia Link took into account Asia Link's cooperation with the U.S. Government, as well as Asia Link's assurances of future compliance with the EAR. In accordance with Section 744.16(c), the Deputy Assistant Secretary for Export Administration has sent written notification to Asia Link informing this entity of the ERC's decision to remove it from the Entity List. This final rule implements the decision to remove this one Hong Kong person from the Entity List.

Specifically, this rule removes the following person from the Entity List:

HONG KONG

(1) Asia Link, Flat 1022, 10/F, No. 1 Hung To Rd., Kwun Tong, Kowloon, Hong Kong.

The removal of Asia Link from the Entity List (from Hong Kong, as described above) eliminates the existing license requirement in Supplement No. 4 to part 744 for exports, reexports and transfers (in-country) to this person. However, the removal of Asia Link from the Entity List does not relieve persons of other obligations under part 744 of the EAR or under other parts of the EAR. Neither the removal of a person from the Entity List nor the removal of Entity List-based license requirements relieves persons of their obligations under General Prohibition 5 in Section 736.2(b)(5) of the EAR, which provides that, “you may not, without a license, knowingly export or reexport any item subject to the EAR to an end-user or end-use that is prohibited by part 744 of the EAR.” Nor do such removals relieve persons of their obligation to apply for export, reexport or in-country transfer licenses required by other provisions of the EAR. BIS strongly urges the use of Supplement No. 3 to part 732 of the EAR, “BIS's `Know Your Customer' Guidance and Red Flags,” when persons are involved in transactions that are subject to the EAR.

Savings Clause

Shipments of items removed from eligibility for a License Exception or export or reexport without a license (NLR) as a result of this regulatory action that were on dock for loading, on lighter, laden aboard an exporting or reexporting carrier, or en route aboard a carrier to a port of export or reexport, on June 28, 2010, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export or reexport without a license (NLR) so long as they are exported or reexported before July 13, 2010. Any such items not actually exported or reexported before midnight, on July 13, 2010, require a license in accordance with this rule.

Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as extended by the Notice of August 13, 2009, 74 FR 41325 (August 14, 2009), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act.

Rulemaking Requirements

1. This rule has been determined to be not significant for purposes of Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves collections previously approved by the OMB under control numbers 0694-0088, “Multi-Purpose Application,” which carries a burden hour estimate of 58 minutes to prepare and submit form BIS-748. Miscellaneous and recordkeeping activities account for 12 minutes per submission. Total burden hours associated with the Paperwork Reduction Act and Office and Management and Budget control number 0694-0088 are expected to increase slightly as a result of this rule.

3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military or foreign affairs function of the United States. (See 5 U.S.C. 553(a)(1)). BIS implements this rule to prevent items from being exported, reexported or transferred (in country) to the persons being added to the Entity List. If this rule were delayed to allow for notice and comment and a delay in effective date, then entities being added to the Entity List by this action would continue to be able to receive items without a license and to conduct activities contrary to the national security or foreign policy interests of the United States. Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., are not applicable.

List of Subjects in 15 CFR Part 744

• Exports
• Reporting and recordkeeping requirements
• Terrorism

Accordingly, part 744 of the Export Administration Regulations (15 CFR parts 730-774) is amended as follows:

PART 744—[AMENDED]

1. The authority citation for 15 CFR part 744 continues to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 12947, 60 FR 5079, 3 CFR, 1995 Comp., p. 356; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice of August 13, 2009, 74 FR 41325 (August 14, 2009); Notice of November 6, 2009, 74 FR 58187 (November 10, 2009).

2. Supplement No. 4 to part 744 is amended:

(a) By adding, in alphabetical order, the destination of Belarus under the Country column and three Belarusian entities;

(b) By adding under China, People's Republic of, in alphabetical order, three Chinese entities;

(c) By removing under Hong Kong, this one Hong Kong entity “Asia Link, Flat 1022, 10/F, No. 1 Hung To Rd., Kwun Tong, Kowloon, Hong Kong”;

(d) By adding under Hong Kong, in alphabetical order, two Hong Kong entities;

(e) By adding under Iran, in alphabetical order, three Iranian entities;

(f) By adding under Malaysia, in alphabetical order, four Malaysian entities;

(g) By adding, in alphabetical order, the destination of New Zealand under the Country column and two New Zealanders entities;

(h) By adding, in alphabetical order, the destination of Norway under the Country column and two Norwegian entities;

(i) By adding, in alphabetical order, the destination of South Africa under the Country column and five South African entities; and

(j) By adding under United Kingdom, in alphabetical order, one British entity.

The additions read as follows: