[Federal Register Volume 75, Number 52 (Thursday, March 18, 2010)]
[Notices]
[Pages 13079-13081]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-5889]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
Action Affecting Export Privileges; MAHAN AIRWAYS; Mahan Airways,
Mahan Tower, No. 21, Azadegan St., M.A. Jenah Exp. Way, Tehran, Iran,
Respondent; Order Renewing Order Temporarily Denying Export Privileges
Pursuant to Section 766.24 of the Export Administration
Regulations, 15 CFR Parts 730-774 (2009) (``EAR'' or the
``Regulations''), I hereby grant the request of the Bureau of Industry
and Security (``BIS'') to renew for 180 days the Order Temporarily
Denying the Export Privileges of Respondent Mahan Airways (``TDO''), as
I find that renewal of the TDO is necessary in the public interest to
prevent an imminent violation of the EAR.
I. Procedural History
On March 17, 2008, Darryl W. Jackson, the then-Assistant Secretary
of Commerce for Export Enforcement (``Assistant Secretary''), signed a
TDO denying Mahan Airways' export privileges for a period of 180 days
on the grounds that its issuance was necessary in the public interest
to prevent an imminent violation of the Regulations. The TDO also named
as denied persons Balli Group PLC, Balli Aviation, Balli Holdings,
Vahid Alaghband, Hassan Alaghband, Blue Sky One Ltd., Blue Sky Two
Ltd., Blue Sky Three Ltd., Blue Sky Four Ltd., Blue Sky Five Ltd., and
Blue Sky Six Ltd. (all of the United Kingdom and hereinafter
collectively referred to as the ``Balli Group Respondents''), as well
as Blue Airways (of Yerevan, Armenia). The TDO was issued ex parte
pursuant to Section 766.24(a), and went into effect on March 21, 2008,
the date it was published in the Federal Register. On July 18, 2008, in
accordance with Section 766.23 of the Regulations, Assistant Secretary
Jackson issued an Order adding Blue Airways FZE and Blue Airways, both
of Dubai, United Arab Emirates (``the UAE''), to the TDO as persons
related to Blue Airways of Armenia (along with Blue Airways FZE and
Blue Airways of the UAE, hereinafter collectively referred to as the
Blue Airways Respondents).\1\ On September 17, 2008, Assistant
Secretary Jackson renewed the TDO for an additional 180 days in
accordance with Section 766.24 of the Regulations, via an order
effective upon issuance, and on March 16, 2009, the TDO was similarly
renewed by then-Acting Assistant Secretary Kevin Delli-Colli.\2\ On
September 11, 2009,\3\ Acting Assistant Secretary Delli-Colli renewed
the TDO for an additional 180 days against Mahan Airways. The TDO was
not renewed against the Balli Group Respondents or the Blue Airways
Respondents.
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\1\ The Related Persons Order was published in the Federal
Register on July 24, 2008.
\2\ The September 17, 2008 Renewal Order was published in the
Federal Register on October 1, 2008. The March 16, 2009 Renewal
Order was published in the Federal Register on March 25, 2009.
\3\ The September 11, 2009 Renewal Order was published in the
Federal Register on September 18, 2009.
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On February 17, 2010, BIS, through its Office of Export Enforcement
(``OEE''), filed a written request for renewal of the TDO against Mahan
Airways for an additional 180 days, and served a copy of its request on
the Respondent in accordance with Section 766.5 of the Regulations. No
opposition to renewal of the TDO has been received from Mahan Airways.
II. Discussion
A. Legal Standard
Pursuant to Section 766.24(d)(3) of the EAR, the sole issue to be
considered in determining whether to continue a TDO is whether the TDO
should be renewed to prevent an ``imminent'' violation of the EAR as
defined in Section 766.24. ``A violation may be `imminent' either in
time or in 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 and 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.
B. The TDO and BIS's Request for Renewal
OEE's request for renewal is based upon the facts underlying the
issuance of the initial TDO and TDO renewals in this matter and the
evidence developed over the course of this investigation indicating
Mahan Airways' clear willingness to continue to disregard U.S. export
controls and the TDO. The initial TDO was issued as a result of
evidence that showed that Mahan Airways and other parties engaged in
conduct prohibited by the EAR by knowingly re-exporting to Iran three
U.S.-origin aircraft, specifically Boeing 747s (``Aircraft 1-3''),
items subject to the EAR and classified under Export Control
Classification Number (``ECCN'') 9A991.b, without the required U.S.
Government authorization. Further evidence submitted by BIS indicated
that Mahan Airways was involved in the attempted re-export of three
additional U.S.-origin Boeing 747s (``Aircraft 4-6'') to Iran.
As more fully discussed in the September 17, 2008 TDO Renewal
Order, evidence presented by BIS indicated that Aircraft 1-3 continued
to be flown on Mahan Airways' routes after issuance of the TDO, in
violation of the Regulations and the TDO itself.\4\ It also showed that
Aircraft 1-3 had been flown in further violation of the Regulations and
the TDO on the routes of Iran Air, an Iranian Government airline. In
addition, as more fully discussed in the March 16, 2009 Renewal Order,
in October 2008, Mahan Airways caused Aircraft 1-3 to be deregistered
from the Armenian civil aircraft registry and subsequently registered
the aircraft in Iran. The aircraft were relocated to Iran and were
issued Iranian tail numbers, including EP-MNA and EP-MNB, and continued
to be operated on Mahan Airways' routes in violation of the Regulations
and the TDO.
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\4\ Engaging in conduct prohibited by a denial order violates
the Regulations. 15 CFR 764.2(a) and (k).
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Moreover, as discussed in the September 11, 2009 Renewal Order,
Mahan Airways continued to operate Aircraft 1-3 in violation of the
Regulations and the TDO, and also committed an additional knowing and
willful violation of the Regulations and the TDO when it negotiated for
and acquired an additional U.S.-origin
[[Page 13080]]
aircraft. The additional aircraft was an MD-82 aircraft, which was
subsequently painted in Mahan Airways livery and flown on multiple
Mahan Airways' routes under tail number TC-TUA.
OEE seeks renewal of the TDO against Mahan Airways based on its
participation in the violations discussed in the initial and renewed
TDOs and Mahan Airways' continued defiance of the Regulations and the
TDO by operating at least two of Aircraft 1-3 on its routes in and out
of Iran since the September 11, 2009 Renewal Order, and the third of
those aircraft during part of that time period.\5\ OEE also notes that
in addition to Mahan Airway's on-going violations of the Regulations
and TDO, a United Kingdom court found Mahan Airways in contempt of
court on February 1, 2010, for failing to comply with that court's
December 21, 2009 and January 12, 2010 orders compelling Mahan Airways
to remove the Boeing 747s from Iran and ground them in the Netherlands.
See Exhibit 3 to OEE's Renewal Request. Mahan Airways and the Balli
Group Respondents have been litigating before the U.K. court concerning
ownership and control of Aircraft 1-3. OEE's submission also includes a
copy of a letter from Mahan Airways' Chairman to the U.K. court dated
January 12, 2010, in which Mahan Airways indicates, inter alia, that it
opposes U.S. Government actions against Iran, that it was continuing to
operate the aircraft on its routes in and out of Tehran (and had
158,000 ``forward bookings'' for these aircraft), and that it wished to
continue to do so and would pay damages if required by that court,
rather than ground the aircraft. See Exhibit 4 to OEE's Renewal
Request.
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\5\ The third Boeing 747 appears to have undergone significant
service maintenance and was not in flight operation during part of
the renewal period.
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C. Findings
Under the applicable standard set forth in Section 766.24 of the
Regulations and my review of the record here, I find that violations of
the Regulations have occurred and continue to occur involving the
unlicensed re-export of U.S.-origin Boeing 747s presently under Mahan
Airways' possession and control. The aircraft are currently located in
Iran and are registered and/or operated by Mahan Airways in violation
of the Regulations and the most recent Renewal Order dated September
11, 2009. Mahan Airways' continued course of conduct illustrates its
refusal to comply with the TDO or U.S. export control laws.\6\
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\6\ My findings are made pursuant to Section 766.24 and the
Regulations, and are not based on the contempt finding against Mahan
Airways in the U.K. litigation, which I understand is still ongoing.
I note, however, that Mahan Airways' statements and actions in that
litigation are consistent with my findings here.
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I find that the evidence presented by BIS convincingly demonstrates
that Mahan Airways has repeatedly violated the EAR and the TDO and that
such knowing violations have been significant, deliberate and covert,
and that there is a likelihood of future violations. As such, a TDO is
needed to give notice to persons and companies in the United States and
abroad that they should continue to cease dealing with Mahan Airways in
export transactions involving items subject to the EAR. Such a TDO is
consistent with the public interest to prevent imminent violation of
the EAR.
Accordingly, I find pursuant to Section 766.24, that renewal of the
TDO for 180 days against Mahan Airways is necessary in the public
interest to prevent an imminent violation of the EAR.
III. Order
It is therefore ordered:
First, that the Respondent, MAHAN AIRWAYS, Mahan Tower, No. 21,
Azadegan St., M.A. Jenah Exp.Way, Tehran, Iran (the ``Denied Person'')
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. Benefiting 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:
A. Export or reexport to or on behalf of the Denied Person any item
subject to the EAR;
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 EAR 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 EAR that has been exported from the United States;
D. Obtain from the 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 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 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 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 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 Respondent 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.
In accordance with the provisions of Section 766.24(d) of the EAR,
BIS may seek renewal of this Order by filing a written request not
later than 20 days before the expiration date. The Respondent may
oppose a request to renew this Order by filing a written submission
with the Assistant Secretary of Commerce for Export Enforcement,
[[Page 13081]]
which must be received not later than seven days before the expiration
date of the Order.
A copy of this Order shall be served on the Respondent and shall be
published in the Federal Register.
This Order is effective immediately and shall remain in effect for
180 days.
Issued this March 7, 2010.
David W. Mills,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2010-5889 Filed 3-17-10; 8:45 am]
BILLING CODE 3510-DT-P