Order Relating to AW-Tronics LLC

Citation84 FR 62502
Record Number2019-24824
Published date15 November 2019
SectionNotices
CourtIndustry And Security Bureau
Federal Register, Volume 84 Issue 221 (Friday, November 15, 2019)
[Federal Register Volume 84, Number 221 (Friday, November 15, 2019)]
                [Notices]
                [Pages 62502-62504]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2019-24824]
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                DEPARTMENT OF COMMERCE
                Bureau of Industry and Security
                [Case No. 18-BIS-0002]
                 Order Relating to AW-Tronics LLC
                 In the Matter of:
                AW-Tronics LLC, 7405 SW 79CT, Miami, FL 33143, et al.,
                 Respondents
                 The Bureau of Industry and Security, U.S. Department of Commerce
                (``BIS''), has notified AW-Tronics LLC, of Miami, Florida, (``AW-
                Tronics'') that it has initiated an administrative proceeding
                [[Page 62503]]
                against it pursuant to Section 766.3 of the Export Administration
                Regulations (the ``Regulations''),\1\ through the issuance of a
                Charging Letter alleging that AW-Tronics, Ali Caby, Arash Caby, Marjan
                Caby, and Arrowtronic, LLC (``Arrowtronic'') (collectively,
                ``Respondents'') violated the Regulations as follows:
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                 \1\ The Regulations originally issued under the Export
                Administration Act of 1979, as amended, 50 U.S.C. 4601-4623 (Supp.
                III 2015) (``the 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, 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, 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. The
                Regulations are currently codified in the Code of Federal
                Regulations at 15 CFR parts 730-774 (2018). The charged violation
                occurred in 2013-2014. The Regulations governing the violation at
                issue are found in the 2013-2014 versions of the Code of Federal
                Regulations (15 CFR parts 730-774 (2013-2014)). The 2019 Regulations
                set forth the procedures that apply to this matter.
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                Charge 1 15 CFR 764.2(d)--Conspiracy
                 Beginning as early as in or about September 2013, and continuing
                through in or about March 2014, Respondents conspired and acted in
                concert with others, known and unknown, to bring about one or more
                acts that constitute a violation of the Regulations. The purpose and
                object of the conspiracy was to unlawfully export goods from the
                United States through transshipment points to Syria, including to
                Syrian Arab Airlines (``Syrian Air''), the flag carrier airline of
                Syria and a Specially Designated Global Terrorist (``SDGT''), and in
                doing so evade the prohibitions and licensing requirements of the
                Regulations and avoid detection by U.S. law enforcement.
                 Pursuant to Section 746.9 of the Regulations, a license is
                required for the export or reexport to Syria of all items subject to
                the Regulations, except food and medicine classified as EAR99.
                Furthermore, pursuant to Section 744.12 of the Regulations, a
                license is required to export or reexport items subject to the
                Regulations to SDGTs. Syrian Air was designated as an SDGT on May
                16, 2013 (see 78 FR 32304, May 29, 2013), under authority granted to
                the Department of the Treasury by Executive Order 13,224, and was at
                all times pertinent hereto (and remains) listed as an SDGT.
                 At all pertinent times, AW-Tronics and Arrowtronic were active
                limited liability companies incorporated in the State of Florida.
                Documentary evidence and email correspondence shows that AW-Tronics
                personnel represented to various transaction parties that AW-Tronics
                and Arrowtronic (collectively, ``AW-Tronics/Arrowtronic'') were the
                same company. Arash Caby was listed on Florida corporate records as
                a Managing Member of AW-Tronics at the time of the violations. From
                January 2014 until its most recent annual report in January 2017,
                Ali Caby was listed on Florida corporate records as the registered
                agent of AW-Tronics. AW-Tronics/Arrowtronic has maintained offices
                in Miami, Florida and Sofia, Bulgaria, as well as other locations.
                 As part of the conspiracy, the co-conspirators used electronic
                mail (email) and other forms of communication to communicate with
                each other between the United States, Bulgaria, United Arab Emirates
                (UAE), and Syria. Under their scheme, co-conspirators would purchase
                from U.S. suppliers or vendors items subject to the Regulations for
                export to Syrian Air in Syria, including aircraft parts and
                equipment, and would provide materially false or misleading
                documents and information to conceal the illegal exports. In
                furtherance of the conspiracy, they also would arrange for payment
                for the illegal exports to be made using third-party companies to
                transfer payments between the co-conspirators. Overall, between in
                or about September 2013 and in or about March 2014, Respondents
                engaged in multiple transactions with Syrian Air involving the
                export of aircraft parts and equipment subject to the Regulations
                from the Miami office of AW-Tronics/Arrowtronic to Syrian Air's
                transshipment point in Dubai, United Arab Emirates. These items were
                actually intended for, and some or all were ultimately delivered to,
                Syrian Air in Syria.
                 During the conspiracy, Ali Caby managed the Bulgaria office of
                AW-Tronics/Arrowtronic, while Arash Caby managed its Miami office,
                and Marjan Caby was its internal auditor. In furtherance of the
                conspiracy, each of these respondents exchanged numerous emails with
                other AW-Tronics/Arrowtronic employees authorizing or otherwise
                discussing the above-described exports to Syrian Air. These email
                communications included, for example, instructions that were
                designed to prevent U.S. law enforcement from detecting the unlawful
                exports to Syria and to allow them to continue by changing the
                routing of exports from AW-Tronics/Arrowtronic's Miami, Florida
                office. In March 2014, United States Customs and Border Protection
                seized a shipment of micro switches that, according to Electronic
                Export Information (EEI) filed in the Automated Export System, was
                destined for Syrian Air in the UAE, when, in fact, the ultimate
                destination was Syria. On March 5, 2014, Marjan Caby sent an email
                to AW-Tronics/Arrowtronic logistics employees, copying Alex Caby,
                that explained, ``We will . . . have packages stopped by the US
                Customs and Border Control [and] have a case file like this for the
                same client[,]'' and provided instructions stating, ``NOTHING WILL
                BE SHIPPED TO CLIENTS IN THE MIDDLE EAST FROM THE USA OFFICE. WE
                HAVE TO SEND TO BG [Bulgaria] THEN TO CLIENT.'' (Emphasis in
                original). ``SYRIA'' was specifically listed as one country for
                which Respondents would use Bulgaria as a transshipment point.
                (Same).
                 In so doing, Ali Caby, a/k/a Alex Caby, Arash Caby, a/k/a
                ``Axel'' Caby, Marjan Caby, AW-Tronics, LLC, and Arrowtronic, LLC
                violated Section 764.2(d) of the Regulations, for which they are
                jointly and severally liable.
                 Whereas, BIS and AW-Tronics have entered into a Settlement
                Agreement pursuant to Section 766.18(b) of the Regulations, whereby
                they agreed to settle this matter in accordance with the terms and
                conditions set forth therein; and
                 Whereas, I have approved of the terms of the Settlement Agreement;
                 It is therefore ordered:
                 First, for the period of six (6) years from the date of this Order
                AW-Tronics LLC, with a last known address of 7405 SW 79CT, Miami, FL
                33143, and when acting for or on its behalf, its successors, assigns,
                director, officers, representatives, agents, or employees (hereinafter
                collectively referred to as 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 to 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 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
                [[Page 62504]]
                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, any licenses issued under the Regulations in which AW-
                Tronics has an interest as of the date of this Order shall be revoked
                by BIS.
                 Fourth, after notice and opportunity for comment as provided in
                Section 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.
                 Fifth, AW-Tronics shall not take any action or make or permit to be
                made any public statement, directly or indirectly, denying the
                allegations in the Charging Letter or this Order.
                 Sixth, the Charging Letter, the Settlement Agreement, and this
                Order shall be made available to the public.
                 Seventh, this Order shall be served on AW-Tronics and shall be
                published in the Federal Register.
                 This Order, which constitutes the final agency action in this
                matter related to AW-Tronics, is effective immediately.
                 Dated: October 30, 2019.
                Douglas R. Hassebrock,
                Director, Office of Export Enforcement, performing the non-exclusive
                functions and duties of the Assistant Secretary of Commerce for Export
                Enforcement.
                [FR Doc. 2019-24824 Filed 11-14-19; 8:45 am]
                 BILLING CODE 3510-33-P
                

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