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###### Department of Commerce

###### Bureau of Industry and Security

      ( print page 56630)    
                    The Bureau of Industry and Security, U.S. Department of Commerce (“BIS”) has notified John H. Carrington (“Carrington”) of its intention to initiate an administrative proceeding against him pursuant to Section 766.3 of the Export Administration Regulations (currently codified at 15 CFR parts 730-774 (2005)) (“Regulations”),[1]                                          and Section 13(c) of the Export Administration Act of 1979, as amended (50 U.S.C. app. §§ 2401-2420 (2000)) (“Act”),[2]                                          by issuing a proposed charging letter issued to Carrington that alleged that he committed 181 violations of the Regulations. Specifically, the charges are:                

1. One Violation of 15 CFR 764.2(d)—Conspiracy to Violate the Regulations: Beginning in or about September 2000 and continuing through in or about March 2004, Carrington conspired and acted in concert with others, known and unknown, to do or bring about an act that violates the Regulations. The purpose of the conspiracy was to export fingerprint imaging equipment and fingerprint ink and powder, items subject to the Regulations, from the United States to the Hong Kong Special Administrative Region (“Hong Kong”) through Italy without the U.S. Department of Commerce licenses required by Section 742.7 of the Regulations. Fingerprint imaging equipment is classified under Export Control Classification Number (“ ECCN”) 3A981, and fingerprint ink and powder is classified under ECCN 1A985. Carrington and its co-conspirators took acts in furtherance of the conspiracy by exporting fingerprint imaging equipment and fingerprint ink and powder from the United States to Hong Kong through Italy without the required license.

2. 25 Violations of 15 CFR 764.2(a)—Exporting Fingerprint Imaging Equipment without the Required Licenses: On 25 occasions, between on or about September 29, 2000 and on or about March 31, 2004, Carrington engaged in conduct prohibited by the Regulations by exporting or causing to be exported fingerprint imaging equipment, items classified under ECCN 3A981, to Hong Kong through Italy without the licenses required by Section 742.7 of the Regulations.

3. 25 Violations of 15 CFR 764.2(e)—Selling Fingerprint Imaging Equipment with Knowledge of a Violation of the Regulations: On the same 25 occasions described above, Carrington sold fingerprint imaging equipment, items classified under ECCN 3A981, to Hong Kong through Italy with knowledge that a violation of the Regulations was about to occur in connection with the items. At all times relevant hereto, Carrington knew or should have known that a Department of Commerce license was required to export the fingerprint imaging equipment and Carrington sold the items knowing that the required license has not or would not be obtained.

4. 25 Violations of 15 CFR 764.2(h)—Taking Actions with Intent to Evade the Regulations: On the same 25 occasions described above, Carrington took actions with the intention of evading the Regulations. Specifically, Carrington sold and shipped fingerprint imaging equipment to a distributor in Italy for transshipment to Hong Kong with the intent of evading the license requirements of Section 742.7 of the Regulations. This was done to conceal the ultimate destination of the items.

5. 25 Violations of 15 CFR 764.2(g)—False Statements of Fact on Export Control Documents: On the same 25 occasions described above, Carrington filed or caused to be filed Shippers' Export Declarations (“SEDs”), export control documents as defined in Section 772.1 of the Regulations, with the U.S. Government through the Automated Export System (“AES”) stating that no license was required for the exports. These statements were false because, as described in charges 2-26, licenses were required for the export of fingerprint imaging equipment to Hong Kong.

6. Nine Violations of 15 CFR 764.2(a)—Exporting Fingerprint Ink and Powder without the Required Licenses: On nine occasions, between on or about April 14, 2001 and on or about March 2, 2004, Carrington engaged in conduct prohibited by the Regulations by exporting or causing to be exported fingerprint ink and powder, items classified under ECCN 1A985, to Hong Kong through Italy without the licenses required by Section 742.7 of the Regulations.

7. Nine Violations of 15 CFR 764.2(e)—Selling Fingerprint Ink and Powder with Knowledge of a Violation of the Regulations: On the same nine occasions described above, Carrington sold fingerprint ink and powder, items classified under ECCN 1A985, to Hong Kong through Italy with knowledge that a violation of the Regulations was about to occur in connection with the items. At all times relevant hereto, Carrington knew or should have known that a Department of Commerce license was required to export the fingerprint ink and powder and Carrington sold the items knowing that the required license had not or would not be obtained.

8. Nine Violations of 15 CFR 764.2(h)—Taking Actions with Intent to Evade the Regulations: On the same nine occasions described above, Carrington took actions with the intention of evading the Regulations. Specifically, Carrington sold and shipped fingerprint ink and powder to a distributor in Italy for transshipment to Hong Kong with the intent of evading the license requirements of Section 742.7 of the Regulations. This was done to conceal the ultimate destination of the items.

9. One Violation of 15 CFR 764.2(g)—False Statement of Fact on Export Control Document: On one of the nine occasions described above, Carrington filed or caused to be filed a SED, an export control document as defined in Section 772.1 of the Regulations, with the U.S. Government through the Automated Export System (“AES”) stating that no license was required for the export. This statement was false because a license was required for the export of fingerprint ink and powder to Hong Kong.

                    10. 20 Violations of 15 CFR 764.2(a)—Exporting Fingerprint Imaging Equipment and Fingerprint Powder without the Required License: On 20 occasions, between on or about November 8, 2000 and on or about January 20, 2004, Carrington engaged in conduct prohibited by the Regulations by exporting or causing to be exported fingerprint imaging equipment or fingerprint powder, items classified under ECCNs 3A981 or 1A985 respectively, to Hong Kong without the                           ( print page 56631)                        licenses required by Section 742.7 of the Regulations.                

11. 20 Violations of 15 CFR 764.2(e)—Selling Fingerprint Imaging Equipment and Fingerprint Powder without the Required License: On the same 20 occasions described above, Carrington sold fingerprint imaging equipment or fingerprint powder, items classified under ECCNs 3A981 or 1A985 respectively, to Hong Kong with knowledge that a violation of the Regulations was about to occur in connection with the items. At all times relevant hereto, Carrington knew or should have known that a Department of Commerce license was required to export the fingerprint imaging equipment and sold the items knowing that the required license had not or would not be obtained.

12. 12 Violations of 15 CFR 764.2(g)—False Statements of Fact on Export Control Documents: On 12 of the 20 occasions described above, Carrington filed or caused to be filed SEDs, export control documents as defined in Section 772.1 of the Regulations, with the U.S. Government through the Automated Export System (“AES”) stating that no license was required for the export. These statements were false because, as described in charges 130-149, licenses were required for the export of fingerprint imaging equipment to Hong Kong.

*Whereas*, BIS and Carrington have entered into a Settlement Agreement pursuant to Section 766.18(a) 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 the terms of such Settlement Agreement;                 

*It Is Therefore Ordered:*

First, for a period five years from the date of entry of the Order, John H. Carrington, 2316 Wakefield Plantation Drive, Raleigh, North Carolina 27614, and when acting for or on behalf of Carrington, his representatives, agents, assigns, or employees (“Denied Person”) may not participate, directly or indirectly, 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, 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 in any other activity subject to the Regulations; 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 Regulations, or in any other activity subject to the Regulations. 

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 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, that, after notice and opportunity for comment as provided in Section 766.23 of the Regulations, any person, firm, corporation, or business organization related to Carrington 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 the Order. 

Fourth, that this Order does not prohibit any export, reexport, or other transaction subject to the Regulations where the only items involved that are subject to the Regulations are the foreign-produced direct product of U.S.-origin technology. 

Fifth, that the proposed charging letter, the Settlement Agreement, and this Order shall be made available to the public. 

                    Sixth, that this Order shall be served on the Denied Person and shall be published in the                     **Federal Register**                    .                

                    This Order, which constitutes the final agency action in this matter, is effective upon publication in the                     **Federal Register**                    .                

Entered this 22nd day of September 2005.

Wendy L. Wysong,

Deputy Assistant Secretary of Commerce for Export Enforcement.

# Footnotes

1.                             The charged violations occurred from 1999 to 2004. The Regulations governing the violations at issue are found in the 1999 to 2004 versions of the Code of Federal Regulations (15 CFR parts 730-774 (1999-2004)). The 2005 Regulations establish the procedures that apply to this matter.                    
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2.                             From August 21, 1994 through November 12, 2000, the Act was in lapse. During that period, the President, through Executive Order 12924, which had been extended by successive Presidential Notices, the last of which was issued on August 3, 2000 (3 CFR, 2000 Comp. 397 (2001)), continued the Regulations in effect under the International Emergency Economic Powers Act (50 U.S.C. §§ 1701-1706 (2000)) (“IEEPA”). On November 13, 2000, the Act was reauthorized and it remained in effect through August 20, 2001. Since August 21, 2001, the Act has been in lapse and the President, through Executive Order 13222 of August 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), as extended by the Notice of August 2, 2005, (70 FR 45273 (August 5, 2005)), has continued the Regulations in effect under IEEPA.                    
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[FR Doc. 05-19314 Filed 9-29-05; 8:45 am]

BILLING CODE 3510-DT-M