Order Denying Export Privileges

Citation85 FR 16054
Record Number2020-05993
Published date20 March 2020
SectionNotices
CourtIndustry And Security Bureau
Federal Register, Volume 85 Issue 55 (Friday, March 20, 2020)
[Federal Register Volume 85, Number 55 (Friday, March 20, 2020)]
                [Notices]
                [Pages 16054-16055]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-05993]
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                DEPARTMENT OF COMMERCE
                Bureau of Industry and Security
                Order Denying Export Privileges
                 In the Matter of: Zimo Sheng, Jinxiuyuan 17-403, Changshu,
                Jiangsu 215500, China and 3975 N Cramer Street, Unit 204, Milwaukee,
                WI 53211.
                 On December 13, 2018, in the U.S. District Court for the Eastern
                District of Wisconsin, Zimo Sheng (``Sheng'') was convicted of
                violating Section 38 of the Arms Export Control Act (22 U.S.C. 2778
                (2012)) (``AECA''). Sheng was convicted of violating Section 38 of the
                AECA by knowingly and willfully attempting to export from the United
                States to China the complete upper assembly for a Glock 43 pistol
                BDEV511, designated as a defense article on the United States Munitions
                List, without the required U.S. Department of State licenses. Sheng was
                sentenced to 40 months in prison and a special assessment of $200.
                 The Export Administration Regulations (``EAR'' or ``Regulations'')
                are administered and enforced by the
                [[Page 16055]]
                U.S. Department of Commerce's Bureau of Industry and Security
                (``BIS'').\1\ Section 766.25 of the Regulations provides, in pertinent
                part, that the ``Director of [BIS's] Office of Exporter Services, in
                consultation with the Director of [BIS's] Office of Export Enforcement,
                may deny the export privileges of any person who has been convicted of
                a violation of . . . section 38 of the Arms Export Control Act (22
                U.S.C. 2778).'' 15 CFR 766.25(a). The denial of export privileges under
                this provision may be for a period of up to 10 years from the date of
                the conviction. 15 CFR 766.25(d).\2\ In addition, pursuant to Section
                750.8 of the Regulations, BIS's Office of Exporter Services may revoke
                any BIS-issued licenses in which the person had an interest at the time
                of his/her conviction.\3\
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                 \1\ The Regulations are currently codified in the Code of
                Federal Regulations at 15 CFR parts 730-774 (2019). The Regulations
                originally issued under the Export Administration Act of 1979, as
                amended, 50 U.S.C. 4601-4623 (Supp. III 2015) (``EAA''), which
                lapsed on August 21, 2001. The President, through Executive Order
                13,222 of August 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), which was
                extended by successive Presidential Notices, continued the
                Regulations in full force and effect under the International
                Emergency Economic Powers Act, 50 U.S.C. 1701, et seq. (2012)
                (``IEEPA''). On August 13, 2018, the President signed into law the
                John S. McCain National Defense Authorization Act for Fiscal Year
                2019, which includes the Export Control Reform Act of 2018, which is
                codified as amended at 50 U.S.C. 4801-4852 (``ECRA''). While Section
                1766 of ECRA repeals the provisions of the EAA (except for three
                sections which are inapplicable here), Section 1768 of ECRA
                provides, in pertinent part, that all rules and regulations that
                were made or issued under the EAA (including as continued in effect
                pursuant to IEEPA) or under the EAR, and were in effect as of ECRA's
                date of enactment (August 13, 2018), shall continue in effect
                according to their terms until modified, superseded, set aside, or
                revoked through action undertaken pursuant to the authority provided
                under ECRA.
                 \2\ See also Section 11(h) of the EAA, 50 U.S.C. 4610(h) (Supp.
                III 2015); Sections 4819(e) and 4826 of ECRA, 50 U.S.C. 4819 and
                4826; and note 1, supra.
                 \3\ See notes 1 and 2, supra.
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                 BIS has received notice of Sheng's conviction for violating Section
                38 of the AECA. The Regulations provide that before taking action to
                deny a person's export privileges under Section 766.25, BIS shall
                provide the person written notice of the proposed action and an
                opportunity to comment through a written submission, ``unless
                exceptional circumstances exist.'' 15 CFR 766.25(b). In this case,
                following sentencing in the criminal matter, Sheng fled the United
                States, rather than surrendering to the Bureau of Prisons to serve his
                sentence, and his current whereabouts are unknown to BIS. As a result,
                exceptional circumstances exist. However, as set forth below, the
                opportunity to appeal this Order pursuant to part 756 of the
                Regulations remains available to Sheng.
                 Following consultations with BIS's Office of Export Enforcement,
                including its Director, I have decided to deny Sheng's export
                privileges under the Regulations for a period of 10 years from the date
                of Sheng's conviction. I have also decided to revoke any BIS-issued
                licenses in which Sheng had an interest at the time of his conviction.
                 Accordingly, it is hereby ordered:
                 First, from the date of this Order until December 13, 2028, Zimo
                Sheng, with last known addresses of Jinxiuyuan 17-403, Changshu,
                Jiangsu 215500, China, and 3975 N Cramer Street, Unit 204, Milwaukee,
                WI 53211, and when acting for or on his behalf, his successors,
                assigns, employees, agents or representatives (``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 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 engaging in any
                other activity subject to the Regulations; 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 Regulations, or from any other activity subject to the Regulations.
                 Second, 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 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 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 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, after notice and opportunity for comment as provided in
                Section 766.23 of the Regulations, any other person, firm, corporation,
                or business organization related to Sheng by ownership, control,
                position of responsibility, affiliation, or other connection in the
                conduct of trade or business may also be made subject to the provisions
                of this Order in order to prevent evasion of this Order.
                 Fourth, in accordance with part 756 of the Regulations, Sheng may
                file an appeal of this Order with the Under Secretary of Commerce for
                Industry and Security. The appeal must be filed within 45 days from the
                date of this Order and must comply with the provisions of part 756 of
                the Regulations.
                 Fifth, a copy of this Order shall be delivered to Sheng and shall
                be published in the Federal Register.
                 Sixth, this Order is effective immediately and shall remain in
                effect until December 13, 2028.
                 Issued this 16th day of March, 2020.
                Karen H. Nies-Vogel,
                Director, Office of Exporter Services.
                [FR Doc. 2020-05993 Filed 3-19-20; 8:45 am]
                 BILLING CODE P
                

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