[Federal Register Volume 75, Number 224 (Monday, November 22, 2010)]
[Notices]
[Pages 71075-71078]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-29327]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
Action Affecting Export Privileges; Anvik Technologies Sdn. Bhd.,
a/k/a Anvik Technologies; Babak Jafarpour, a/k/a Bob Jefferson
Anvik Technologies Sdn. Bhd., a/k/a Anvik Technologies
Level 20, Menara Standard Chartered, 30 Jalan Sultan Ismail, Kuala
Lumpur 50250, Malaysia
Level 36, Menara Citibank, 165 Jalan Ampang, Kuala Lumpur 50450,
Malaysia
Level 19, Two International Finance Centre, 8 Finance Street
Central Hong Kong
155 North Wacker Drive, 42nd Floor, Chicago, IL 60606; and
Babak Jafarpour, a/k/a Bob Jefferson
Level 20, Menara Standard Chartered, 30 Jalan Sultan Ismail, Kuala
Lumpur 50250, Malaysia
Level 36, Menara Citibank, 165 Jalan Ampang, Kuala Lumpur 50450,
Malaysia
Level 19, Two International Finance Centre, 8 Finance Street
Central Hong Kong
155 North Wacker Drive, 42nd Floor, Chicago, IL 60606
Respondents.
Order Temporarily Denying Export Privileges
Pursuant to Section 766.24 of the Export Administration Regulations
(``EAR'' or the ``Regulations''),\1\ the Bureau of Industry and
Security (``BIS''), U.S. Department of Commerce, through its Office of
Export Enforcement (``OEE''), has requested that I issue an Order
temporarily denying, for a period of 180 days, the export privileges
under the EAR of:
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\1\ The EAR is currently codified at 15 CFR parts 730-774
(2010). The EAR are issued under the Export Administration Act of
1979, as amended (50 U.S.C. app. Sec. Sec. 2401-2420 (2000))
(``EAA''). Since August 21, 2001, the Act has been in lapse and the
President, through Executive Order 13222 of August 17, 2001 (3 CFR,
2001 Comp. 783 (2002)), which has been extended by successive
presidential notices, the most recent being that of August 12, 2010
(75 FR 50681 (Aug. 16, 2010)), has continued the Regulations in
effect under the International Emergency Economic Powers Act (50
U.S.C. 1701, et seq.) (``IEEPA'').
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1. Anvik Technologies Sdn. Bhd. a/k/a Anvik Technologies.
Level 20, Menara Standard Chartered, 30 Jalan Sultan Ismail, Kuala
Lumpur 50250, Malaysia.
Level 36, Menara Citibank, 165 Jalan Ampang, Kuala Lumpur 50450,
Malaysia.
Level 19, Two International Finance Centre, 8 Finance Street
Central
[[Page 71076]]
Hong Kong.
155 North Wacker Drive, 42nd Floor, Chicago, IL 60606.\2\
\2\ As explained further below, this address is an address for
``virtual office space'' leased by Respondents from a company called
Servcorp. See note 4. infra. It is BIS's understanding that other
persons also rent ``virtual office space'' at this address. The only
current users at this address subject to this Temporary Denial Order
as issued are the Respondents listed above. Other persons currently
using this address are not subject to the Order.
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2. Babak Jafarpour a/k/a Bob Jefferson.
Level 20, Menara Standard Chartered, 30 Jalan Sultan Ismail, Kuala
Lumpur 50250, Malaysia.
Level 36, Menara Citibank, 165 Jalan Ampang, Kuala Lumpur 50450,
Malaysia.
Level 19, Two International Finance Centre, 8 Finance Street
Central Hong Kong.
155 North Wacker Drive, 42nd Floor, Chicago, IL 60606.\3\.
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\3\ See footnote 2 above.
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Legal Standard
Pursuant to Section 766.24(b) of the Regulations, BIS may issue a
TDO upon a showing that the order is necessary in the public interest
to prevent an ``imminent violation'' of the Regulations. 15 CFR
766.24(b)(1). ``A violation may be `imminent' either in time or degree
of likelihood.'' 15 CFR 766.24(b)(3). BIS may show ``either that a
violation is about to occur, or that the general circumstances of the
matter under investigation or case under criminal or administrative
charges demonstrate a likelihood of future violations.'' Id. As to the
likelihood of future violations, BIS may show that ``the violation
under investigation or charges is significant, deliberate, covert and/
or likely to occur again, rather than technical or negligent[.]'' Id. A
``lack of information establishing the precise time a violation may
occur does not preclude a finding that a violation is imminent, so long
as there is sufficient reason to believe the likelihood of a
violation.'' Id.
Background and Findings
OEE has presented evidence that, on multiple occasions, beginning
in October 2009 and continuing to date, Anvik Technologies Sdn. Bhd.
(``Anvik''), and its owner and operator Babak Jafarpour, have procured
and attempted to procure various items subject to the Regulations for
export from the United States to Iran, via transshipment through third
countries, including Malaysia and Hong Kong, without obtaining the
required authorization from the U.S. Government.
OEE, through its investigation, has provided evidence that Anvik
and Jafarpour (hereinafter collectively referred to as ``Respondents'')
have been utilizing a global network of leased ``virtual offices'' \4\
to procure items from the United States and ship those items to Iran
through third countries. Respondents use the leased virtual office
space in order to obtain various addresses, including the addresses in
Malaysia and Hong Kong, that Respondents then provide to suppliers as
the ultimate destination and end-users of the items while disguising
the true ultimate destination and end-users in Iran. OEE has identified
at least four transactions where the Respondents have shipped or
attempted to ship items to Iran using the same method of operation,
including two attempted exports to Iran as recently as September 2010.
In this section, I discuss evidence obtained by OEE relating to those
transactions and submitted to me in support of its TDO request.
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\4\ A ``virtual office'' arrangement provides users with
communication and physical office services available to a typical
lessee of office space, providing the appearance that the user
maintains an office at the virtual office location. Virtual office
users can use phone numbers, physical/mailing addresses,
receptionist services, etc. without actually leasing space or ever
being present at the virtual office.
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Between February and June 2010, Respondents exchanged email
messages with a U.S. manufacturer concerning the procurement of
microwave mixers and bias tees. These items, which are components used
in communications and radar systems, are subject to the Regulations and
designated as EAR99. Respondents' email messages with the U.S.
manufacturer originated in Iran. However, Respondents completed an end-
user statement that they provided to the U.S. manufacturer stating that
the microwave mixers and bias tees were to be used by Anvik at its
address at 155 North Wacker Drive, 42nd Floor, Chicago, IL 60606.
On September 7, 2010, on the instructions of Respondents, the U.S.
manufacturer shipped the microwave mixers and bias tees to the address
in Chicago provided by Respondents. However, the Chicago, IL address is
for the ``virtual office'' at which Respondents do not occupy any
physical space or otherwise have operations that would enable them to
use these items there, and instead only lease certain services, such as
remote receptionist and administrative support and use of the local
phone number and address. When the microwave mixers and bias tees
arrived in Chicago, the ``virtual office'' staff, on the instructions
of Respondent Jafarpour, replaced the manufacturer's invoice with one
provided by him and shipped the items to another of Respondents'
``virtual office'' addresses, at Level 20, Menara Standard Chartered,
30 Jalan Sultan Ismail, Kuala Lumpur 50250, Malaysia. Jafarpour
instructed the virtual office staff in Malaysia to forward the package
to Iran upon receipt. However, the shipment was stopped in Malaysia
prior to being delivered to the virtual office address there.
As provided in Section 746.7 of the Regulations, no person may
export or reexport any item that is subject to the EAR, if such
transaction is prohibited by the Iranian Transactions Regulations (31
CFR part 560) and has not been authorized by OFAC. The evidence shows
that using the scheme described above, Respondents took actions to
evade the Regulations by exporting microwave mixers and bias tees from
the United States to Iran through Malaysia. Respondents intended to
have the shipment relabeled and delivered to a forwarder/shipper for
transshipment to Iran once it arrived in Malaysia. Respondents had not
sought or received the required U.S. Government authorization.
OEE's investigation has uncovered another recent attempt by
Respondents to procure items for Iranian end-users in violation of the
Regulations. Beginning in or about September 2010, Respondents
attempted to export GPS timing boards, items subject to the
Regulations, classified as Export Control Classification Number 7A994,
and controlled for anti-terrorism reasons, from the United States to
Iran without the license required under Section 742.8 of the
Regulations to export or reexport anti-terrorism controlled items to
Iran. The order was placed with a U.S. manufacturer through its Swedish
distributor. The purchase order submitted by Anvik stated that the
terms of delivery were ``FOB USA,'' indicating that Respondents knew
the items were being exported from the United States. Respondents
ordered the GPS timing boards using an address at Level 19, Two
International Finance Centre, 8 Finance Street Central, Hong Kong. This
address is ``virtual office'' space leased by Respondents. Respondents
provided a different address, at Level 20, Menara Standard Chartered,
30 Jalan Sultan Ismail, Kuala Lumpur 50250, Malaysia, as the ``ship
to'' address on the order form. This address also is ``virtual office''
space leased by Respondents. The shipping label on the package that
arrived at Respondent Anvik's address in Malaysia stated that it was
from the U.S.
[[Page 71077]]
manufacturer in New York, United States, and the packing list included
an export control warning from the U.S. manufacturer and a certificate
of U.S. origin. Information provided by the forwarder demonstrates
that, once the GPS timing boards were delivered to the address in
Malaysia, they were immediately relabeled for shipment by the same
forwarder to Iran. The shipment from Malaysia to Iran was stopped in
Singapore while en route to Iran.
OEE also has uncovered other transactions in which Respondents were
able to successfully procure items subject to the Regulations and cause
their export from the United States to Iran via transshipment through
third countries. Respondents used methods similar to those described
above, having the items shipped to ``virtual offices'' they leased
abroad and then transshipping the items from there to Iran.
In September 2009, Respondents placed an order with a U.S.
manufacturer through its Singapore-based distributor for ten digital
phase shifters. These items, which have a number of uses, including in
radar systems, satellite communications, phase cancellation and
beamforming modules, are subject to the Regulations and designated as
EAR99. Respondents provided the U.S. manufacturer and its distributor
with an end-user statement indicating that the digital phase shifters
would be used by Anvik at Level 36, Menara Citibank, 165 Jalan Ampang,
Kuala Lumpur 50450, Malaysia, and certifying that the items ``will not
be diverted to any country, company or individual that is prohibited by
the U.S. Government.'' The address listed on the end-user statement is
a ``virtual office'' address leased by Respondents. On October 19,
2009, the U.S. manufacturer exported the digital phase shifters to
Anvik in Malaysia via the distributor in Singapore. Evidence uncovered
by OEE demonstrates that, once the package arrived in Malaysia,
Respondents promptly instructed the ``virtual office'' staff to ship
the package to ECI Co. in Shiraz, Iran. Respondents did not obtain the
required U.S. Government authorization to export the digital phase
shifters from the United States to Iran.
On October 27, 2009, a U.S. manufacturer exported a
millidioptometer to Anvik at Level 36, Menara Citibank, 165 Jalan
Ampang, Kuala Lumpur 50450, Malaysia. This item, which is a measuring
tool used for various optical systems, including those in aircraft
systems, is subject to the Regulations and designated as EAR99. The
address provided by Anvik is a virtual office address leased by
Respondents. Evidence obtained by OEE indicates that, at the request of
Respondent Jafarpour, the virtual office staff arranged for the
millidioptometer to be promptly transshipped on Respondents' behalf
from Malaysia to IOI (Isfahan Optics Institute), a subsidiary of Iran
Electronics Industries in Isfahan, Iran.\5\ Respondents did not obtain
the required U.S. Government authorization to export the digital phase
shifters from the United States to Iran.
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\5\ On September 17, 2008, the U.S. Department of Treasury
designated Iran Electronics Industries as a Weapons of Mass
Destruction proliferator or supporter pursuant to Executive Order
13382. Iran Electronics Industries was designated because it is
owned or controlled by Iran's Ministry of Defense and Armed Forces
Logistics (MODAFL). MODAFL, which was designated under Executive
Order 13382 on October 25, 2007, controls other previously
designated entities DIO, and Aerospace Industries Organization,
which is the overall manager and coordinator of Iran's missile
program.
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In addition to the evidence discussed above showing continued
deliberate and covert actions by Anvik and Jafarpour to cause or
attempt to cause items to be exported from the United States to Iran
via third countries without obtaining U.S. Government authorization,
BIS also has submitted direct evidence that Respondents had actual
knowledge of the U.S. embargo against Iran. For example, in
communications in June 2009, with a prospective supplier based in
Canada, Respondent Jafarpour acknowledges knowing that the United
States maintains an embargo against Iran.
OEE submits, in sum, that future violations of the EAR are imminent
as defined in Section 766.24 of the Regulations. I agree based on the
evidence of Respondents' continued deliberate, significant, and covert
efforts to procure items from the United States for export to Iran via
third countries without the required U.S. Government authorization,
including by providing false information to U.S. companies about end-
users in an effort to prevent U.S. law enforcement officials from
discovering and ultimately stopping Respondents' conduct. Accordingly,
I find that the evidence presented by OEE demonstrates that a violation
of the Regulations by Respondents is imminent in both time and degree
of likelihood. The conduct in this case is deliberate, significant, and
likely to occur again absent the issuance of a TDO. As such, a TDO is
needed to give notice to persons and companies in the United States and
abroad that they should cease dealing with the Respondents in export
transactions involving items subject to the EAR.
Accordingly, I find that a TDO naming Anvik Technologies Sdn. Bhd.
and Babak Jafarpour is necessary, in the public interest, to prevent an
imminent violation of the EAR.
This Order is being issued on an ex parte basis without a hearing
based upon BIS's showing of an imminent violation.
I. Order
It is therefore ordered:
First, that the Respondents, Anvik Technologies SDN. BHD. also
known as (``a/k/a'') Anvik Technologies, Level 20, Menara Standard
Chartered, 30 Jalan Sultan Ismail, Kuala Lumpur 50250, Malaysia; Level
36, Menara Citibank, 165 Jalan Ampang, Kuala Lumpur 50450, Malaysia;
Level 19, Two International Finance Centre, 8 Finance Street Central,
Hong Kong; 155 North Wacker Drive, 42nd Floor, Chicago, IL 60606; Babak
Jafarpour a/k/a Bob Jefferson, Level 20, Menara Standard Chartered, 30
Jalan Sultan Ismail, Kuala Lumpur 50250, Malaysia; Level 36, Menara
Citibank, 165 Jalan Ampang, Kuala Lumpur 50450, Malaysia; Level 19, Two
International Finance Centre, 8 Finance Street Central, Hong Kong; 155
North Wacker Drive, 42nd Floor, Chicago, IL 60606, and each of their
successors or assigns and, when acting for or on behalf of any of the
foregoing, each of their officers, representatives, agents or employees
(each a ``Denied Person'' and collectively 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 Export Administration
Regulations (``EAR''), or in any other activity subject to the EAR
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 EAR, or in any other activity
subject to the EAR; or
C. Benefitting in any way from any transaction involving any item
exported or to be exported from the United States that is subject to
the EAR, or in any other activity subject to the EAR.
Second, that no person may, directly or indirectly, do any of the
following:
[[Page 71078]]
A. Export or reexport to or on behalf of a Denied Person any item
subject to the EAR;
B. Take any action that facilitates the acquisition or attempted
acquisition by a Denied Person of the ownership, possession, or control
of any item subject to the EAR that has been or will be exported from
the United States, including financing or other support activities
related to a transaction whereby a 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 a Denied Person of any item subject to
the EAR that has been exported from the United States;
D. Obtain from a Denied Person in the United States any item
subject to the EAR 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 EAR
that has been or will be exported from the United States and which is
owned, possessed or controlled by a Denied Person, or service any item,
of whatever origin, that is owned, possessed or controlled by a Denied
Person if such service involves the use of any item subject to the EAR
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 EAR, any other person, firm, corporation, or
business organization related to a 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 EAR where the only items involved that
are subject to the EAR are the foreign-produced direct product of U.S.-
origin technology.
In accordance with the provisions of Section 766.24(e) of the EAR,
the Respondents 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.
BIS may seek renewal of this Order by filing a written request with
the Assistant Secretary of Commerce for Export Enforcement in
accordance with the provisions of Section 766.24(d) of the EAR, which
currently provides that such a written request must be submitted not
later than 20 days before the expiration date. A Respondent may oppose
a request to renew this Order in accordance with Section 766.24(d),
including by filing a written submission with the Assistant Secretary
of Commerce for Export Enforcement, supported by appropriate evidence.
Any opposition ordinarily must be received not later than seven days
before the expiration date of the Order.
Notice of the issuance of this Order shall be given to Respondents
in accordance with Sections 766.5(b) and 766.24(b)(5) of the
Regulations. This Order also shall be published in the Federal
Register.
This Order is effective immediately and shall remain in effect for
180 days.
Issued this 15th day of November 2010.
David W. Mills,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2010-29327 Filed 11-19-10; 8:45 am]
BILLING CODE 3510-DT-P