[Federal Register: May 23, 2006 (Volume 71, Number 99)]
[Notices]
[Page 29613-29615]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23my06-29]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
Action Affecting Export Privileges; Data Physics Corporation,
Data Physics China, SRI Welranta, Bill Chen; In the Matter of: Data
Physics Corporation, 2025 Gateway Place, Suite 260, San Jose,
California, 95110; Data Physics China, 1605B Westgate Tower, 1038
Nanjing Road West, Shanghai, P.R. China 200041; Data Physics China, RM.
1509, Building 2, Xinquduan Jiayan, No. 5 Changchunquia Road, Haidian
District, Beijing, P.R. China, 100089; Sri Welranta, President, Data
Physics Corporation, 2025 Gateway Place, Suite 260, San Jose,
California, 95110; Bill Chen, Manager, AKA: Yuequan Chen, Data Physics
China, RM. 1509, Building 2, Xinquduan Jiayan, No. 5 Changchunquia
Road, Haidian District, Beijing, P.R. China, 100089; Respondents; Order
Temporarily Denying Export Privileges
Pursuant to Section 766.24 of the Export Administration Regulations
(``EAR''),\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
[[Page 29614]]
denying the export privileges under the EAR of:
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\1\ 15 CFR parts 730-774 (2006). The EAR are issued under the
Export Administration Act of 1979, as amended (50 U.S.C. app. 2401-
2420 (2000)) (``EAA''). Since August 21, 2001, the EAA has been in
lapse and the President, through Executive Order 13222 of August 17,
2001 (3 C.F.R., 2001 Comp. 783 (2002)), as extended by the Notice of
August 2, 2005 (70 FR 45,273, (August 5, 2005)), has continued the
EAR in effect under the International Emergency Economic Powers Act
(50 U.S.C. 1701-1706 (2000)) (``IEEPA'').
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(1) Data Physics Corporation, 2025 Gateway Place, Suite 260, San
Jose, California, 95110.
(2) Data Physics China (Shanghai Office), 1605B Westgate Tower,
1038 Nanjing Road West, Shanghai, P.R. China, 200041.
(3) Data Physics China (Beijing Office), RM. 1509, Building 2,
Xinquduan Jiayan, No. 5 Changchunquia Road, Haidian District, Beijing,
P.R. China, 100089.
(4) Sri Welranta, President, Data Physics Corporation, 2025 Gateway
Place, Suite 260, San Jose, California, 95110.
(5) Bill Chen, Manager, AKA: Yuequan Chen, Data Physics China, RM.
1509, Building 2, Xinquduan Jiayan, No. 5 Changchunquia Road, Haidian
District, Beijing, P.R. China, 100089 (hereinafter collectively
referred to as the ``Respondents'') for 180 days.
In its request, BIS has presented evidence that shows that Data
Physics Corporation (``Data Physics'') and its Beijing and Shanghai
offices, with the knowledge of company president Sri Welranta
(``Welranta'') and manager Bill Chen (``Chen''), engaged in conduct
prohibited by the EAR. Specifically, Data Physics sold and shipped
items subject to the EAR to an end-user in China, who is engaged in the
design, development, production and use of cruise missile systems
without an export license as required by Section 744.3 of the EAR.
Specifically, the evidence shows that, on or about June 12, 2002,
Respondents sold and later shipped spherical couplings, items subject
to the EAR, from the United States to China HaiYang Electro Mechanical
Technology Academy (``3rd Academy'') in China, an end-user involved in
the development of cruise missiles. The evidence shows that Data
Physics attempted to conceal the identity of the end-user by using a
false customer name ``27th Locomotive Factory.'' Data Physics would
also attempt to evade the licensing requirements by breaking down the
items into smaller components and separate shipments in order to avoid
raising suspicion. Installation reports seized from Data Physics show
that after the items would arrive at the 3rd Academy, employees from
the Chinese offices of Data Physics would go reassemble and install the
equipment.
There is also evidence that on or about June 23, 2005, Data Physics
exported a Test Shaker to the 3rd Academy again using the false
customer name ``27th Locomotive Factory.'' Specifically, Data Physics
filed a Shipper's Export Declaration (``SED'') for the item stating it
was being shipped to China National Instruments in Beijing, China.
Further investigation reveals that the Data Physics' contract summary
for the Test Shaker lists the ``27th Locomotive Factory'' as the end-
user. China National Instruments acted as the trading company.
The evidence also demonstrates that the Respondents were aware of
restrictions on the shipment of U.S. commodities that can be used for
the design, development, production or use of rocket systems or
unmanned aerial vehicles to end-users in Country Group D.\2\
Specifically, copies of EAR Section 744.3 were found during a search of
Data Physics with the applicable portions highlighted. Additionally,
numerous Data Physics employees including Welranta attended BIS
training involving exports to China and end-use restrictions.
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\2\ 15 CFR part 740, Supplement 1 for countries in Group D.
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I find that the evidence presented by BIS demonstrates that the
Respondents have violated the EAR, that such violations have been
deliberate and covert, and that there is a likelihood of future
violations, particularly given the nature of the transactions. As such,
a Temporary Denial Order (``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. Such a TDO is consistent with the public interest
to preclude future violations of the EAR.
Accordingly, I find that a TDO naming Data Physics Corporation, its
two offices in China, Sri Welranta and Bill Chen Respondents is
necessary, in the public interest, to prevent an imminent violation of
the EAR. This Order is issued on an ex parte basis without a hearing
based upon BIS's showing of an imminent violation.
It is therefore ordered: First, that the Respondents, Data Physics
Corporation, 2025 Gateway Place, Suite 260, San Jose, California,
95110, and Data Physics China, 1605B Westgate Tower, 1038 Nanjing Road
West, Shanghai, P.R. China, 200041, and Data Physics China, RM. 1509,
Building 2, Xinquduan Jiayan, No. 5 Changchunquia Road, Haidian
District, Beijing, P.R. China, 100089, Sri Welranta, President, Data
Physics Corporation, 2025 Gateway Place, Suite 260, San Jose,
California, 95110, and Bill Chen, Manager, AKA: Yuequan Chen, Data
Physics China, RM. 1509, Building 2, Xinquduan Jiayan, No. 5
Changchunquia Road, Haidian District, Beijing, P.R. China, 100089
(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. 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 Persons any
item subject to the EAR;
B. Take any action that facilitates the acquisition or attempted
acquisition by the Denied Persons 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 Persons 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 Persons of any item subject to
the EAR that has been exported from the United States;
D. Obtain from the Denied Persons 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 Persons, or service any
item, of whatever origin, that is owned, possessed or controlled by the
Denied Persons if such service involves the use of any item subject to
the EAR that has been or will be exported from the
[[Page 29615]]
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 any of the Denied Persons 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.
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 Respondents may
oppose a request to renew this Order by filing a written submission
with the Assistant Secretary of Commerce for Export Enforcement, 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 Respondents and shall
be published in the Federal Register.
This Order is effective upon date of publication in the Federal
Register and shall remain in effect for 180 days.
Entered this 12th day of May, 2006.
Darryl W. Jackson,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. E6-7733 Filed 5-22-06; 8:45 am]
BILLING CODE 3510-DT-P