[Federal Register Volume 75, Number 178 (Wednesday, September 15, 2010)]
[Notices]
[Pages 56052-56055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-23011]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Action Affecting Export Privileges; Mahan Airways and Gatewick 
LLC

Mahan Airways, Mahan Tower, No. 21, Azadegan St., M.A. Jenah Exp. Way, 
Tehran, Iran; and 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,

[[Page 56053]]

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

Order Renewing Order Temporarily Denying Export Privileges and Also 
Making That Temporary Denial of Export Privileges Applicable to Related 
Person

    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 Order Temporarily 
Denying the Export Privileges of Mahan Airways (``TDO''), as I find 
that renewal of the TDO is necessary in the public interest to prevent 
an imminent violation of the EAR. 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 entity 
as a related person:

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.

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'').\1\
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    \1\ 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.\2\ On September 11, 2009, Acting Assistant Secretary 
Delli-Colli renewed the TDO for an additional 180 days against Mahan 
Airways.\3\ 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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    \2\ 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.
    \3\ The September 11, 2009 Renewal Order was published in the 
Federal Register on September 18, 2009.
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    On March 9, 2010, I renewed the TDO against Mahan Airways for an 
additional 180 days. That renewal was effective upon issuance and was 
published in the Federal Register on March 18, 2010.
    On August 13, 2010, BIS, through its Office of Export Enforcement 
(``OEE''), filed a written request for renewal of the TDO against Mahan 
Airways for an additional 180 days, and served a copy of its request on 
Mahan in accordance with Section 766.5 of the Regulations. No 
opposition to renewal of the TDO has been received from Mahan Airways.
    Additionally, BIS requested that I add Gatewick LLC (``Gatewick'') 
to the TDO as a related person in accordance with Section 766.23. 
Gatewick was provided notice of BIS's intent to add it to the TDO and 
on August 26, 2010, submitted a written opposition.

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 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.\4\ 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'

[[Page 56054]]

routes in violation of the Regulations and the TDO.
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    \4\ 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,\5\ 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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    \5\ 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.
    OEE's evidence indicates that Aircraft 1-3 remain in Mahan Airways' 
possession, control, and livery in Tehran, Iran. These aircraft also 
remain, to BIS's knowledge, airworthy.
    OEE also has submitted evidence that Mahan Airways' violations of 
the TDO have 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 equipment 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.
    As discussed below, renewal of the TDO against Mahan is necessary 
and appropriate. Renewal is necessary with or without the evidence 
relating to Mahan Airways' violations regarding the computer 
motherboards, but that evidence is in any event also pertinent to BIS's 
request to add Gatewick to the TDO as a related person.

 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 
equipment 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.\6\
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    \6\ 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 Person

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 Gatewick be added as a related person in 
order to prevent evasion of the TDO. OEE's request includes evidence, 
confirmed in writing by Gatewick, that indicates that a significant and 
on-going business connection between Gatewick and Mahan Airways. 
Gatewick officials previously told BIS during a 2009 post shipment 
verification that it acts as Mahan Airways' sole booking agent for 
cargo and freight forwarding services in the UAE, a major transshipment 
hub. This business connection was again confirmed by Gatewick in its 
written opposition to the related person's notice it received from BIS. 
Gatewick's opposition also included a copy of its General Cargo Sales 
Agreement (``GSA'') with Mahan Airways, which remains in effect. 
Through this significant business relationship, Gatewick has 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.
    In its August 26, 2010 opposition, Gatewick admits to having a 
current GSA with Mahan Airways, but it asserts that it is not owned by 
Mahan and does not have any common directors with Mahan, and thus 
should not be added to the TDO. Gatewick's submission includes copies 
of corporate registration documents in addition to the GSA with Mahan. 
However, rather than distancing itself from Mahan Airways and its co-
conspirators, the documents provided by Gatewick actually reveal other 
connections or relationships between Gatewick and Mahan Airways, as 
well as the Blue Airways Respondents.
    The GSA with Mahan Airways was signed on Gatewick's behalf by its 
Managing Director, Pejman Mahmood Kosarayanifard, also known as 
Kosarian Fard, who also owns 35% of Gatewick according to corporate 
registration documents submitted by the company. Kosarian Fard also 
played an important 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.

[[Page 56055]]

    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. Court (signed and dated May 27, 
2009 by hand), at page 7, paragraph 12.
    The record also shows that Gatewick is located at the same 
G<greek-i>22 Dubai Airport Free Zone location formerly used by the Blue 
Airways FZE and Blue Airways UAE.
    Based on the information provided by OEE and Gatewick's submission, 
I find that Gatewick's significant and on-going business relationship 
and/or connections with Mahan Airways satisfies the requirements of 
Section 766.23, and that Gatewick's addition to the TDO as a related 
person is necessary to prevent evasion. This is demonstrated not only 
by the nature and significance of Gatewick's relationship with Mahan 
Airways and its stated role as Mahan Airways' sole booking agent in the 
UAE for Mahan's cargo and freight forwarding services, but also by 
Gatewick's participation with Mahan Airways in the 2009 transaction 
involving the export of computer motherboards to Iran, via the UAE, in 
violation of the outstanding TDO against Mahan. It is further 
demonstrated by Kosarian Fard's central role at Gatewick, as Managing 
Director and owner, his admitted close relationship with Mahan Airways, 
and the prominent role he played in the unlawful re-export of Aircraft 
1-3 to Mahan.

IV. Order

    It is therefore ordered:
    First, that MAHAN AIRWAYS, Mahan Tower, No. 21, Azadegan St., M.A. 
Jenah Exp.Way, Tehran, Iran, and 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 
(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 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 and/or Gatewick LLC 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.\7\
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    \7\ 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 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.\8\
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    \8\ A party named or added as a related person may not oppose 
the issuance or renewal of a temporary denial order, but may file an 
appeal in accordance with Section 766.23(c). See also note 7, supra.
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    A copy of this Order shall be provided to Mahan Airways and 
Gatewick LLC and shall be published in the Federal Register. This Order 
is effective immediately and shall remain in effect for 180 days.

    Issued this 3rd day of September 2010.
David W. Mills,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2010-23011 Filed 9-14-10; 8:45 am]
BILLING CODE 3510-DT-P