[Federal Register Volume 76, Number 44 (Monday, March 7, 2011)]
[Notices]
[Pages 12318-12322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-5114]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Action Affecting Export Privileges; Mahan Airways, Gatewick LLC; 
Pejman Mahmood Kosarayanifard and Mahmoud Amini; Order Renewing Order 
Temporarily Denying Export Privileges and Also Making That Temporary 
Denial of Export Privileges Applicable to Related Persons)

Mahan Airways, Mahan Tower, No. 21, Azadegan St., M.A. Jenah Exp. 
Way, Tehran, Iran;
Gatewick LLC, a/k/a Gatewick Freight & Cargo Services, a/k/a/
Gatewick Aviation Services, G<greek-i>22 Dubai Airport Free Zone, 
P.O. Box 393754, Dubai, United Arab Emirates;

and

P.O. Box 52404, Dubai, United Arab Emirates;

and

Mohamed Abdulla Alqaz Building, Al Maktoum Street, Al Rigga, Dubai, 
United Arab Emirates;
Pejman Mahmood Kosarayanifard, a/k/a Kosarian Fard, P.O. Box 52404, 
Dubai, United Arab Emirates;
Mahmoud Amini G<greek-i>22 Dubai Airport Free Zone, P.O. Box 393754, 
Dubai, United Arab Emirates;

and

P.O. Box 52404, Dubai, United Arab Emirates;


[[Page 12319]]


and

Mohamed Abdulla Alqaz Building, Al Maktoum Street, Al Rigga, Dubai, 
United Arab Emirates; )

    Pursuant to Section 766.24 of the Export Administration 
Regulations, 15 CFR Parts 730-774 (2010) (``EAR'' or the 
``Regulations''), I hereby grant the request of the Bureau of Industry 
and Security (``BIS'') to renew for 180 days the September 3, 2010 
Order Temporarily Denying the Export Privileges of Mahan Airways and 
Gatewick LLC (``TDO''), as I find that renewal of the TDO is necessary 
in the public interest to prevent an imminent violation of the EAR.\1\ 
Additionally, pursuant to Section 766.23 of the Regulations, including 
the provision of notice and an opportunity to respond, I find it 
necessary to add the following persons as related persons in order to 
prevent evasion of the TDO:
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    \1\ The September 3, 2010 Order was published in the Federal 
Register on September 15, 2010.

Pejman Mahmood Kosarayanifard, a/k/a Kosarian Fard, P.O. Box 52404, 
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Dubai, United Arab Emirates;

and

Mahmoud Amini, G<greek-i>22 Dubai Airport Free Zone, P.O. Box 393754, 
Dubai, United Arab Emirates;

and

P.O. Box 52404, Dubai, United Arab Emirates;

and

Mohamed Abdulla Alqaz Building, Al Maktoum Street Al Rigga, Dubai, 
United Arab Emirates.

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 Blue Airways, of Yerevan, Armenia (``Blue Airways of 
Armenia''), as well as the ``Balli Group Respondents,'' namely, 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. 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 to the 
TDO both Blue Airways FZE, of Dubai, United Arab Emirates (``the 
UAE''), and Blue Airways, also of Dubai, United Arab Emirates (``Blue 
Airways UAE''), as persons related to Blue Airways of Armenia. (Blue 
Airways of Armenia, Blue Airways FZE, and Blue Airways UAE are 
hereinafter collectively referred to as the ``Blue Airways 
Respondents'').\2\
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    \2\ The Related Persons Order was published in the Federal 
Register on July 24, 2008.
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    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.\3\ On September 11, 2009, Acting Assistant Secretary 
Delli-Colli renewed the TDO for an additional 180 days against Mahan 
Airways.\4\ BIS did not seek renewal of the TDO against the Blue 
Airways Respondents, which BIS believed at that time had ceased 
operating, or against the Balli Group Respondents.
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    \3\ 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.
    \4\ The September 11, 2009 Renewal Order was published in the 
Federal Register on September 18, 2009.
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    On March 9, 2010,\5\ and September 3, 2010, I renewed the TDO 
against Mahan Airways for an additional 180 days. The September 3, 2010 
Renewal Order added Gatewick LLC (``Gatewick'') to the TDO as a related 
person in accordance with Section 766.23, after written notice to 
Gatewick and consideration of its August 26, 2010 response, which was 
signed and submitted by Mahmoud Amini as Gatewick's General Manager. As 
discussed in the September 3, 2010 Renewal Order, that response 
confirmed Gatewick's role as Mahan Airway's sole booking agent for 
cargo and freight forwarding services in the UAE.
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    \5\ The March 9, 2010 Renewal Order was published in the Federal 
Register on March 18, 2010.
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    On February 7, 2011, BIS, through its Office of Export Enforcement 
(``OEE''), filed a written request for renewal of the TDO against Mahan 
Airways and Gatewick. Notice of the renewal request was provided to 
Mahan Airways and Gatewick by delivery of a copy of the request in 
accordance with Sections 766.5 and 766.24(d) of the Regulations. No 
opposition to any aspect of renewal of the TDO has been received from 
Mahan Airways, while Gatewick has not at any time appealed the related 
person determination I made as part of the September 3, 2010 Renewal 
Order.\6\
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    \6\ A party named or added as a related person may not oppose 
the issuance or renewal of the underlying temporary denial order, 
but may file an appeal of the related person determination in 
accordance with Section 766.23(c).
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    Additionally, BIS has requested that I add both Pejman Mahmood 
Kosarayanifard a/k/a Kosarian Fard (``Kosarian Fard'') and Mahmoud 
Amini as related persons in accordance with Section 766.23. Both 
Kosarian Fard and Mahmoud Amini were provided notice of BIS's intent to 
add them to the TDO pursuant to Section 766.23(b) of the Regulations. 
No opposition was received from Kosarian Fard, while Mahmoud Amini 
submitted a short e-mail response received on October 17, 2010, 
opposing his addition to the TDO.\7\
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    \7\ The e-mail response from Amini is dated October 13, 2010 but 
was received by BIS on October 17, 2010.
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II. Renewal of the TDO

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 the 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

[[Page 12320]]

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 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.\8\ 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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    \8\ 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 and March 9, 2010 
Renewal Orders, Mahan Airways continued to operate at least two of 
Aircraft 1-3 in violation of the Regulations and the TDO,\9\ 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 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.
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    \9\ The third Boeing 747 appeared to have undergone significant 
service maintenance and may not have been operational at the time of 
the March 9, 2010 Renewal Order.
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    The March 9, 2010 Renewal Order also noted that a court in the 
United Kingdom (``U.K.'') had 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. Mahan 
Airways and the Balli Group Respondents have been litigating before the 
U.K. court concerning ownership and control of Aircraft 1-3. Blue 
Airways LLC also has been a party to that litigation. In a letter to 
the U.K. court dated January 12, 2010, Mahan Airways' Chairman 
indicated, inter alia, that Mahan Airways opposes U.S. Government 
actions against Iran, that it continued 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.
    The September 3, 2010 Renewal Order pointed out that Mahan Airways' 
violations of the TDO extended beyond operating U.S.-origin aircraft in 
violation of the TDO and attempting to acquire additional U.S.-origin 
aircraft. In February 2009, while subject to the TDO, Mahan Airways 
participated in the export of computer motherboards, items subject to 
the Regulations and designated as EAR99, from the United States to 
Iran, via the UAE, in violation of both the TDO and the Regulations, by 
transporting and/or forwarding the computer motherboards from the UAE 
to Iran. Mahan Airways' violations were facilitated by Gatewick, which 
not only participated in the transaction, but also has stated to BIS 
that it is Mahan Airways' sole booking agent for cargo and freight 
forwarding services in the UAE.
    Additional evidence obtained by OEE indicates that Aircraft 1-3 
remain in Mahan Airways' possession, control, and livery in Tehran, 
Iran. In a recent January 24, 2011 filing in the U.K. Court, Mahan 
Airways asserted that Aircraft 1-3 are not being used, but stated in 
pertinent part that the aircraft are being maintained especially ``in 
an airworthy condition'' and that, depending on the outcome of its U.K. 
Court appeal, the aircraft ``could immediately go back into service * * 
* on international routes into and out of Iran.'' Mahan Airways' 
January 24, 2011 submission to U.K. Court of Appeal, at p. 25, 
paragraphs 108,110. This clearly stated intent, both on its own and in 
conjunction with Mahan Airways' prior misconduct and statements, 
demonstrates the need to renew the TDO in order to prevent imminent 
future violations.

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 the evidence 
presented by BIS convincingly demonstrates that Mahan Airways has 
repeatedly violated the EAR and the TDO, that such knowing violations 
have been significant, deliberate and covert, and that there is a 
likelihood of future violations. I find that, as alleged by OEE, the 
violations have involved both U.S.-origin aircraft and computer 
motherboards that are subject to the Regulations. A renewal of the 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.\10\
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    \10\ 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. I note, however, that Mahan Airways' 
statements and actions in that litigation are consistent with my 
findings here.
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    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. Addition of Related Persons

A. Legal Standard

    Section 766.23 of the Regulations provides that ``[i]n order to 
prevent evasion, certain types of orders under this part may be made 
applicable not only to the respondent, but also to other persons then 
or thereafter related to the respondent by ownership, control, position 
of responsibility, affiliation, or other connection in the conduct of 
trade or business. Orders that may be made applicable to related 
persons include those that deny or affect export privileges, including 
temporary denial orders * * * '' 15 CFR 766.23(a).

B. Analysis and Findings

    OEE has requested that Kosarian Fard and Mahmoud Amini be added as 
related persons in order to prevent evasion of the TDO. As noted above, 
both individuals were provided written notice of OEE's intent to add 
them as a related person to the TDO. Kosarian Fard did not respond, 
while Mahmoud Amini sent only a short e-mail to OEE received on October 
17, 2010. As discussed in the September 3, 2010 Order, a significant 
business relationship or connection exists between Gatewick and Mahan 
Airways. Gatewick had previously told BIS during a 2009 post shipment 
verification that Gatewick acts as Mahan Airways' sole booking agent 
for cargo and freight forwarding services in the UAE, a major 
transshipment hub. In its

[[Page 12321]]

August 26, 2010 response, Gatewick confirmed this relationship and 
provided a copy of the General Cargo Sales Agreement (``GSA'') between 
Gatewick and Mahan Airways, signed on Gatewick's behalf by Kosarian 
Fard, its owner and managing director. No challenge or assertion has 
been made by Gatewick, or by Kosarian Fard or Mahmoud Amini, that this 
relationship has ceased. Gatewick continues, in short, to have the 
ability, with Mahan Airways' authorization and agreement, to use 
Mahan's import code to clear UAE customs and then re-book cargo on 
outbound Mahan flights, including to Iran.
    Gatewick's corporate registration documents revealed other 
connections or relationships between Gatewick, Kosarian Fard, and Mahan 
Airways, as well as the Blue Airways Respondents. Moreover, as 
discussed infra, Kosarian Fard's extensive connections to Mahan extend 
well beyond his ownership interests and active participation at 
Gatewick.
    As previously discussed in the September 3, 2010 Renewal Order, 
Kosarian Fard played a prominent role in Mahan Airways' acquisition of 
Aircraft 1-3 discussed above, as indicated by evidence obtained by BIS 
during its investigation and as acknowledged by Kosarian Fard in his 
testimony in the U.K. litigation referenced above. Kosarian Fard was a 
founder, the majority shareholder, and the Commercial Director of Blue 
Airways of Armenia. In that capacity, he signed the Boeing 747 lease 
agreements with the Balli Group that ultimately led to Mahan Airways' 
acquisition of Aircraft 1-3 in violation of the Regulations. As 
previously cited in the September 3, 2010 Renewal Order, Kosarian 
Fard's written testimony in the U.K. litigation included the following 
concerning his ``close relationship'' with Mahan Airways and some of 
the acts he took at its direction:

    As I have said, I was majority shareholder of Blue [Airways] but 
in the summer of 2007, I agreed to sell a 51% stake in Blue to Skyco 
(UK) Ltd. I did this at the request of Mahan. Given my close 
relationship with Mahan, I did not ask questions but, again, acted 
on the basis of the trust I had in Mr. Arabnejad and Mr. Mahmoudi 
[two Mahan Airways' directors].

Kosarian Fard Written Statement to U.K. Commercial Court (signed and 
dated May 27, 2009 by hand), at page 7, paragraph 12.

    Kosarian Fard's ties to Mahan not only established the connection 
between Mahan and Gatewick, but clearly demonstrate his own long 
standing and wide reaching business relationship with Mahan. In 
addition, Kosarian Fard has not contested BIS's related person's 
notice. In accordance with all of the foregoing, I find that Kosarian 
Fard is a related person under Section 766.23 and should be added to 
the TDO to prevent evasion of the Order.
    As indicated above, Mahmoud Amini did make a short response to the 
related person's notice via an e-mail received on October 17, 2010. In 
that e-mail, Amini asserted that his ``position in Gatewick aviation 
services is only domestic, General Manager,'' and that he is ``not 
``official manager of the company[.]'' This effort by Amini to limit or 
discount his role at Gatewick is undermined, however, by the fact that 
less than two months earlier, he signed Gatewick's August 26, 2010 
submission to BIS as its ``General Manager'' and in doing so made no 
assertion that his duties were ``only domestic.'' In addition, given 
the nature and significance of a General Manager, Amini is positioned 
to significantly determine Gatewick's conduct and activities, as also 
evidenced by the central role he played in Gatewick's August 26, 2010 
submission to BIS, hardly what one would expect of an employee with 
duties that are ``only domestic'' and unrelated to the significant 
Gatewick-Mahan Airways relationship.
    Amini also asserted in his e-mail that the ``only division of 
Gatewick'' in ``contact with Mahan'' is ``Gatewick freight and 
cargo[.]'' Amini provides no supporting evidence for this assertion. In 
addition, he never made such a distinction in his submission on 
Gatewick's behalf on August 26, 2010, and no such distinction is made 
in the GSA between Mahan Airways and Gatewick.
    Accordingly, I find that based on his position of authority and 
responsibility at Gatewick and Gatewick's significant business or trade 
ties with Mahan Airways, Mahmoud Amini is related not only to Gatewick, 
but also in the conduct of trade or business to Mahan Airways. Like 
Kosarian Fard, Mahmoud Amini should be added to the TDO as a related 
person under Section 766.23 in order to prevent evasion of that order.

IV. Order

    It is therefore ordered:
    First, that Mahan Airways, Mahan Tower, No. 21, Azadegan St., M.A. 
Jenah Exp. Way, Tehran, Iran; Gatewick LLC, A/K/A Gatewick Freight & 
Cargo Services, A/K/A Gatewick Aviation Service, G<greek-i>22 Dubai 
Airport Free Zone, P.O. Box 393754, Dubai, United Arab Emirates, and 
P.O. Box 52404, Dubai, United Arab Emirates, and Mohamed Abdulla Alqaz 
Building, Al Maktoum Street, Al Rigga, Dubai, United Arab Emirates; 
Pejman Mahmood Kosarayanifard A/K/A Kosarian Fard, P.O. Box 52404, 
Dubai, United Arab Emirates; and Mahmoud Amini, G<greek-i>22 Dubai 
Airport Free Zone, P.O. Box 393754, Dubai, United Arab Emirates, and 
P.O. Box 52404, Dubai, United Arab Emirates, and Mohamed Abdulla Alqaz 
Building, Al Maktoum Street, Al Rigga, Dubai, United Arab Emirates; and 
when acting for or on their behalf, any successors or assigns, 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. 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 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

[[Page 12322]]

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 Sections 766.24(e) and 
766.23(c)(2) of the EAR, Mahan Airways, Gatewick LLC, Mahmoud Amini 
and/or Kosarian Fard 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.\11\
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    \11\ A party named or added to temporary denial order as a 
related person may appeal its inclusion as a related person, but not 
the underlying basis for the issuance of the TDO. See Section 
766.23(c).
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    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. A renewal request may be 
opposed by Mahan Airways as provided in Section 766.24(d), 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 provided to Mahan Airways and each 
related person and shall be published in the Federal Register. This 
Order is effective immediately and shall remain in effect for 180 days.

    Dated: February 25, 2011.
David W. Mills,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2011-5114 Filed 3-4-11; 8:45 am]
BILLING CODE 3510-DT-P