[Federal Register Volume 75, Number 200 (Monday, October 18, 2010)]
[Notices]
[Pages 63802-63804]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-26117]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Action Affecting Export Privileges; Parto Abgardan Cooling Towers 
Co.

Parto Abgardan Cooling Towers Co., P.O. Box 966, Folsom, CA 95763; 
and
P.O. Box 19395/5478, Tehran, Iran; and
No. 56 Shaydaee St., Yakhchal St., Shariati Ave., Tehran 19497, 
Iran; and
No. 56 Sheidaei St., Yakhchal St., Dr. Shariati Ave., Tehran 19497, 
Iran; and
No. 56 Corner of Noushin Blind Alley, Sheidaei St., Yakhchal St., 
Dr. Shariati Ave., Tehran (19497), Iran; and
No. 56 Next to Noushin Blind Alley, Sheidaei St., Yakhchal St., Dr. 
Shariati Ave., Tehran (19497), Iran; and
No. 56, Corner of Noushin Dd. End, Sheidaie St., Yakhchal St., 
Shariati St., 19497, Tehran, Iran.

Order Making Denial of Export Privileges of Aqua-Loop Cooling Towers, 
Co. Applicable to Parto Abgardan Cooling Towers Co.

    Pursuant to Section 766.23 of the Export Administration Regulations 
(``EAR'' or ``Regulations''), the Bureau of Industry and Security 
(``BIS''), U.S. Department of Commerce, through its Office of Export 
Enforcement (``OEE''), has requested that I make the denial order that 
was issued against Aqua-Loop Cooling Towers, Co. (``Aqua-Loop'') on 
March 25, 2010 (``Denial Order''), applicable to the following entity, 
as a person related to Aqua-Loop:

Parto Abgardan Cooling Towers Co., P.O. Box 966, Folsom, CA 95763; and
P.O. Box 19395/5478, Tehran, Iran; and
No. 56 Shaydaee St., Yakhchal St., Shariati Ave., Tehran 19497, Iran; 
and
No. 56 Sheidaei St., Yakhchal St., Dr. Shariati Ave., Tehran 19497, 
Iran; and
No. 56 Corner of Noushin Blind Alley, Sheidaei St., Yakhchal St., Dr. 
Shariati Ave., Tehran (19497), Iran; and
No. 56 Next to Noushin Blind Alley, Sheidaei St., Yakhchal St., Dr. 
Shariati Ave., Tehran (19497), Iran; and
No. 56, Corner of Noushin Dd. End, Sheidaie St., Yakhchal St., Shariati 
St., 19497, Tehran, Iran.

    The Denial Order was effective upon issuance, was published in the 
Federal Register on April 2, 2010 (see 75 FR 16732 (April 2, 2010)), 
and will remain in effect until March 25, 2020.

I. Background

A. The Denial Order

    The Denial Order denies the export privileges of Aqua-Loop until 
March 25, 2020, pursuant to Section 764.3(a)(2) of the Regulations, and 
was issued based upon my approval of a settlement agreement entered 
into by BIS and Aqua-Loop. Specifically, in July 2009, BIS filed a 
Charging Letter against Aqua-Loop for violating the Regulations by 
causing unlicensed exports to Parto Abgardan in Iran of items subject 
to the Regulations, knowingly violating the Regulations in connection 
with the export of those items, and conspiring with Parto Abgardan and 
others, known

[[Page 63803]]

and unknown, to violate the Regulations in connection with the export 
of those items and other items that Aqua-Loop, Parto Abgardan and their 
co-conspirators sought to export to Iran without the required U.S. 
Government authorization.
    BIS alleged, inter alia, that in furtherance of the conspiracy, 
Aqua-Loop and Parto Abgardan participated in a scheme to have Aqua-Loop 
source or obtain items from U.S. distributors and then have the items 
exported to Parto Abgardan in Iran, via a United Arab Emirates 
(``U.A.E.'') entity identified by Parto Abgardan. The charges 
referenced, inter alia, documentary evidence in which Parto Abgardan 
told Aqua-Loop: ``Since [the U.S. company] can't sell directly to Iran, 
they are OK with selling it domestically and then we can transfer it 
from US to Dubai and then to Iran. With your permission, we are going 
to give Aqua-Loop's information to them so they can send you their 
offer'' based on the technical information provided to the U.S. company 
by Parto Abgardan. The charging letter provided additional details 
concerning the long-running conspiracy between Aqua-Loop and Parto 
Abgardan, which continued from at least in or about June 2004, through 
at least in or about April 2005.\1\
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    \1\ The charges filed against Aqua-Loop are contained in the 
Order issued upon settlement, which was subsequently published in 
the Federal Register. 75 FR 16,732 (April 2, 2010).
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    Aqua-Loop settled these charges with BIS in March 2010, agreeing to 
the imposition of the Denial Order and to a $100,000 monetary penalty, 
with the monetary penalty suspended for a period of ten years. At the 
same time, Aqua-Loop's co-owner and president, Bob Rahimzadeh, settled 
with BIS on the same terms regarding charges that he caused unlicensed 
exports and committed knowing violations of the Regulations relating to 
the same transactions.\2\
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    \2\ The charges filed against Bob Rahimzadeh are contained in 
the Order issued upon settlement, which was subsequently published 
in the Federal Register. 75 FR 16,735 (April 2, 2010).
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B. BIS's Related Person's Notice Letter and Request

    On May 21, 2010, pursuant to Section 766.23 of the Regulations, BIS 
notified Parto Abgardan of its intent to add the company as a person 
related to Aqua-Loop by ownership, control, position of responsibility, 
affiliation, or other connection in the conduct of trade or business, 
by letter sent in accordance with Sections 766.5(b) and 766.23(b). The 
letter also requested that Parto Abgardan provide additional 
information to BIS concerning the company's structure, affiliates and 
major shareholder(s).
    As part of its request, BIS presented evidence of conspiracy 
between Aqua-Loop and Parto Abgardan to violate the Regulations. BIS 
also has evidence indicating, inter alia, that Parto Abgardan's Web 
site identifies a ``sister factory'' in the United States. For contacts 
relating to the United States, Parto Abgardan's Web site provides 
contact information that includes Aqua-Loop's California mailing 
address, phone number, and fax number, without identifying Aqua-Loop 
separately by name. In contrast, Parto Abgardan's Web site provides 
Iranian mailing address, phone number, and fax number as contact 
information for ``all countries except U.S.''
    BIS's submission also included evidence that the owner and managing 
director of Parto Abgardan in Iran, Mahmoud Lazemizadeh, also is a co-
owner of Aqua-Loop.\3\ Moreover, Mahmoud Lazemizadeh's nephew, Behzad 
Lazemizadeh, was a mechanical engineer and manager of Parto Abgardan's 
technical office before he was transferred to Aqua-Loop in California 
for five years.
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    \3\ Mahmoud Lazemizadeh is a U.S. citizen who resides in Iran.
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C. Parto Abgardan's Response

    Mahmoud Lazemizadeh responded by email on Parto Abgardan's behalf 
on June 14, 2010. He asserted that Parto Abgardan is an Iranian company 
and that there was ``no connection of any kind between this company and 
Aqua-Loop cooling towers Co. [sic].'' He also asserted that Parto 
Abgardan and Aqua-Loop had the same dealings with each other as between 
Parto Abgardan and any ``other representative of other European or 
Asian companies * * *.''

II. Related Persons Under Section 766.23

    Section 766.23(a) of the Regulations provides that:

    In order to prevent evasion, certain types of orders under [Part 
766] 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, and 
those that exclude a respondent from practice before BIS.

15 CFR 766.23(a).

    Section 766.23(b) provides, in pertinent part, that upon a finding 
by the Assistant Secretary for Export Enforcement that a denial order 
should be made applicable to a related person or persons in order to 
prevent evasion of that denial order, the Assistant Secretary shall 
issue or amend the order accordingly. 15 CFR 766.23(b).

III. Findings

    BIS notified Parto Abgardan of its intent to add the company as a 
related person in accordance with Section 766.23(b) of the Regulations. 
As indicated by BIS, with regard to the United States market, Parto 
Abgardan's Web site directs its (potential) customers and others to 
make U.S.-related contacts using Aqua-Loop's address in Folsom, 
California, and Aqua-Loop's phone number and fax number there, whereas 
all contacts elsewhere in the world are to be made directly to Parto 
Abgardan in Iran. Parto Abgardan's Web site also discusses a ``sister 
factory'' in the United States, in further apparent reference to Aqua-
Loop. Moreover, the record also shows that Parto Abgardan's owner and 
managing director, Mahmoud Lazemizadeh, is a co-owner of Aqua-Loop, 
while his nephew, Behzad Lazemizadeh, is an employee of Parto Abgardan 
and a former employee of Aqua-Loop. The record thus amply shows that 
Parto Abgardan is related to Aqua-Loop.
    The record similarly demonstrates that adding Parto Abgardan to the 
Denial Order is justified in order to prevent evasion of that Order. I 
find that BIS has presented evidence showing that Parto Abgardan and 
Aqua-Loop participated in a long-running conspiracy to violate the 
Regulations. That evidence shows, inter alia, that acting in concert 
with Parto Abgardan, Aqua-Loop sourced or obtained items in the United 
States and then exported them or caused their export to Parto Abgardan 
in Iran, via a U.A.E. middleman identified by Parto Abgardan, without 
the required U.S. Government licenses. These actions included Parto 
Abgardan's efforts to obtain a filament winding machine from a U.S. 
supplier, during which Parto Abgardan told Aqua-Loop: ``Since they [the 
U.S. supplier] can't sell directly to Iran, they are OK with selling it 
domestically and then we can transfer it from U.S. to Dubai and then to 
Iran. With your permission we are going to give Aqua-Loop's information 
to them so they can send you their offer'' based on the technical 
information provided to the U.S. company by Parto Abgardan.
    This long-running collaboration points to a substantial continued 
risk of diversion and evasion presented by the

[[Page 63804]]

ongoing business relationship between Parto Abgardan and Aqua-Loop, 
which is highlighted by Parto Abgardan's own Web site, and Mahmoud 
Lazemizadeh's control of Parto Abgardan and his ownership interest in 
Aqua-Loop. These concerns are only heightened by Parto Abgardan's 
assertions that there is no connection between the two entities, when, 
in fact, its owner is a co-owner of Aqua-Loop and its Web site, 
references a ``sister factory'' in the United States and lists Aqua-
Loop's mailing address and contact information in California.
    Based on the foregoing and the record as a whole, I find that Parto 
Abgardan is a person related to Aqua-Loop by ``ownership, control, 
position of responsibility, affiliation, or other connection in the 
conduct of trade or business'' pursuant to Section 766.23 of the 
Regulations, and that the Denial Order issued against Aqua-Loop should 
be made applicable to Parto Abgardan in order to prevent evasion of 
that Order.

IV. Order

    It is therefore ordered:
    First, that Parto Abgardan Cooling Towers Co. (``Parto Abgardan''), 
located at the following addresses: P.O. Box 966, Folsom, CA 95763; and 
P.O. Box 19395/5478, Tehran, Iran; and No. 56 Shaydaee St., Yakhchal 
St., Shariati Ave., Tehran (19497), Iran; and No. 56 Sheidaei St., 
Yakhchal St., Dr. Shariati Ave., Tehran (19497), Iran; and No. 56 
Corner of Noushin Blind Alley, Sheidaei St., Yakhchal St., Dr. Shariati 
Ave., Tehran (19497), Iran; and No. 56 Next to Noushin Blind Alley, 
Sheidaei St., Yakhchal St., Dr. Shariati Ave., Tehran (19497), Iran; 
and No. 56, Corner of Noushin Dd. End, Sheidaie St., Yakhchal St., 
Shariati St., (19497), Tehran, Iran, and Parto Abgardan's successors or 
assigns and, when acting for or on behalf of the Parto Abgardan, its 
officers, representatives, agents, or employees (Parto Abgardan and 
each of the foregoing as stated, a ``Denied Person''), 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 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, 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 in accordance with the provisions of Section 766.23(c) 
of the Regulations, the Denied Person may, at any time, make an appeal 
related to 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.
    This Order shall be published in the Federal Register and a copy 
provided to the denied person.
    This Order is effective upon issuance and shall remain in effect 
until March 25, 2020.

    Entered this 6th day of October 2010.
David W. Mills,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2010-26117 Filed 10-15-10; 8:45 am]
BILLING CODE 3510-DT-P