[Federal Register Volume 70, Number 221 (Thursday, November 17, 2005)]
[Notices]
[Pages 69733-69734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-22782]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 05-BIS-03]


Action Affecting Export Privileges; Performance Medical Supplies; 
In the Matter of: Performance Medical Supplies, 16 Gardenia Cresent, 
Cheltenham, Victoria 3192, Australia; Respondent; Order Relating to 
Performance Medical Supplies

    The Bureau of Industry and Security, U.S. Department of Commerce 
(``BIS'') has initiated an administrative proceeding against 
Performance Medical Supplies (``Performance Medical Supplies'') 
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\ 
through issuance of a charging letter to Performance Medical Supplies 
that alleged that Performance Medical Supplies committed 10 violations 
of the Regulations. Specifically, the charges are:
---------------------------------------------------------------------------

    \1\ The violations charged occurred in 2000. The Regulations 
governing the violations at issue are found in the 2000 version of 
the Code of Federal Regulations (15 CFR Parts 730-774 (2000)). The 
2005 Regulations establish the procedures that apply to this matter.
    \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 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.
---------------------------------------------------------------------------

    1. One violation of 15 CFR 764.2(d)--Conspiracy to Export Physical 
Therapy Equipment to Iran Without the Required U.S. Government 
Authorizations: In or about April 2000, Performance Medical Supplies 
conspired and acted in concert with others, known and unknown, to bring 
about acts that constitute violations of the Regulations by knowingly 
participating in the export of physical therapy equipment from the 
United States, via Australia, to Iran without the required U.S. 
Government authorization. Pursuant to Section 746.7 of the Regulations, 
authorization was required from the Office of Foreign Assets Control, 
U.S. Department of the Treasury (``OFAC'') before the physical therapy 
equipment, items subject to the Regulations and the Iranian 
Transactions Regulations, could be exported from the United States to 
Iran. In furtherance of conspiracy, Performance Medical Supplies and 
its co-conspirator devised and employed a scheme under which 
Performance Medical Supplies would purchase the items from its co-
conspirator in the United States and would then forward the items to 
Iran.
    2. Three violations of 15 CFR 764.2(b)--Aiding the Export of 
Physical Therapy Equipment to Iran Without the Required U.S. Government 
Authorization: From on or about March 28, 2000 through and including 
April 7, 2000, Performance Medical Supplies engaged in conduct 
prohibited by Regulations when it, on three occasions, aided the export 
of physical therapy equipment from the United States to Iran, via 
Australia, without the required U.S. Government authorization. Pursuant 
to Section 746.7 of the Regulations, authorization from OFAC was 
required for the export of physical therapy equipment, items subject to 
the Regulations and the Iranian Transactions Regulations, from the 
United States to Iran. The U.S. exporter did not have OFAC 
authorization for the export.

[[Page 69734]]

    3. Three violations of 15 CFR 764.2(e)--Ordering Physical Therapy 
Equipment With Knowledge That a Violation of the Regulations Was to 
Occur: On three occasions, Performance Medical Supplies ordered 
physical therapy equipment with knowledge that violations of the 
Regulations would occur. At all times relevant hereto, Performance 
Medical Supplies knew that prior authorization was required from the 
U.S. Government to export the physical therapy equipment, items subject 
to the Regulations and the Iranian Transactions Regulations, from the 
United States to Iran. Performance Medical Supplies ordered the items 
knowing that they would be exported to Iran without the required U.S. 
Government authorization.
    4. Three Violations of 15 CFR 764.2(h)--Actions to Evade the 
Requirements of the Regulations: On three occasions, Performance 
Medical Supplies took actions to evade the U.S. Government's licensing 
requirements for the export of physical therapy equipment to Iran. 
Specifically, Performance Medical Supplies participated in the routing 
of sales to Iran through Australia to conceal the fact that the 
physical therapy equipment was destined for Iran.
    Whereas, BIS and Performance Medical Supplies 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 such Settlement Agreement;
    It Is Therefore Ordered:
    First, for a period of five years from the date of entry of the 
Order, Performance Medical Supplies, 16 Gardenia Cresent, Cheltenham, 
Victoria 3192, Australia, its successors or assigns, and when acting 
for or on behalf of Performance Medical Supplies, its officers, 
representatives, agents, 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. 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 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 acquired 
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, to prevent evasion of this Order, BIS, after notice 
and opportunity for comment as provided in Section 766.23 of the 
Regulations, may make any person, firm, corporation, or business 
organization related to Performance Medical Supplies by affiliation, 
ownership, control, or position of responsibility in the conduct of 
trade or related services subject to the provisions of this 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 charging letter, the Settlement Agreement, this 
Order, and the record of this case as defined by Section 766.20 of the 
Regulations shall be made available to the public.
    Sixth, that the administrative law judge shall be notified that 
this case is withdrawn from adjudication.
    This Order, which constitutes the final agency action in this 
matter, is effective upon publication in the Federal Register.

    Entered this 9th day of November 2005.
Darryl W. Jackson,
Assistant Secretary of Commerce, for Export Enforcement.
[FR Doc. 05-22782 Filed 11-16-05; 8:45 am]
BILLING CODE 3510-DT-M