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69540 Federal Register / Vol. 71, No.

231 / Friday, December 1, 2006 / Notices

for the food service, the SLA ‘‘may’’ (Buildings 41, 44, and 48), Denver, Industry and Security’s request for
exercise its right to respond. The State CO. renewal of the Order Temporarily
official expressed surprise that the FBI NPA: Aspen Diversified Industries, Inc., Denying the Export Privileges of
had not offered to negotiate or solicit a Colorado Springs, CO. Respondents, Data Physics Corporation,
contract after the SLA waived the Contracting Activity: GSA, PBS Region Data Physics China (Shanghai and
Randolph-Sheppard priority. 8, Denver, CO. Beijing Offices), Sri Welaratna and Bill
According to the SLA comment, the Service Type/Location: Janitorial/ Chen for 180 days as I find that renewal
FBI indicated that it considered the Custodial, Federal Records Center of the TDO is necessary in the public
SLA’s earlier waiver of its priority to be and USDA Laboratory, East Point, interest to prevent an imminent
final, which would explain why no GA. violation of the EAR.
subsequent offer to negotiate or solicit NPA: WORKTEC, Jonesboro, GA.
Contracting Activity: GSA, PBS. I. Procedural History
for the food service was forthcoming.
The Committee believes that allowing Service Type/Location: Janitorial/ On May 12, 2006, I signed an Order
the SLA to ignore its own priority Grounds and Related Services, Temporarily Denying the Export
waiver at this late hour, when a capable Motor Pool Office and Garage, 450 Privileges of the Respondents for 180
nonprofit agency is ready to create many N. Grande, Tucson, AZ. days on the grounds that its issuance
jobs by providing this food service and NPA: Beacon Group SW, Inc., Tucson, was necessary in the public interest to
the SLA has identified no blind vendor AZ. prevent an imminent violation of the
ready and able to serve as an alternative Contracting Activity: GSA, PBS— EAR (‘‘TDO’’). Pursuant to Section
provider, could not have been the intent 9PMFC, San Francisco, CA. 766.24(a), the TDO was issued ex parte
of the Randolph-Sheppard Act. In the Service Type/Location: Repair of Small and went into effect on May 23, 2006,
absence of the Randolph-Sheppard Hand Tools, Robins Air Force Base, the date it was published in the Federal
priority, the Committee sees no bar to Robins AFB, GA. Register. The TDO is valid through
NPA: Epilepsy Association of Georgia, November 19, 2006.
adding the food service to the
Warner Robins, GA. On October 13, 2006, the Bureau of
Procurement List.
Contracting Activity: Department of the Industry and Security (‘‘BIS’’), through
Deletions Air Force. its Office of Export Enforcement, filed a
On September 29, 2006, the Sheryl D. Kennerly, written request for renewal of the TDO
Committee for Purchase From People Director, Information Management.
against the Respondents for 180 days
Who Are Blind or Severely Disabled and served a copy of its request on the
[FR Doc. E6–20364 Filed 11–30–06; 8:45 am]
published notice (70 FR 57464; 57465) Respondents in accordance with Section
BILLING CODE 6353–01–P
of proposed deletions to the 766.5 of the EAR. On November 6, 2006,
Procurement List. Data Physics Corporation, Data Physics
After consideration of the relevant China (Shanghai and Beijing Offices)
DEPARTMENT OF COMMERCE and Sri Welaratna (collectively referred
matter presented, the Committee has
determined that the services listed to hereinafter as ‘‘Data Physics Group’’)
Bureau of Industry and Security
below are no longer suitable for filed a written opposition to the request
procurement by the Federal Government Action Affecting Export Privileges; for renewal of the TDO. The Data
under 41 U.S.C. 46–48c and 41 CFR 51– Data Physics Corporation, Data Physics Group also requested the
2.4. Physics China, Data Physics China, Sri production of documents and a hearing.
Welaratna, Bill Chen I approved Data Physics Group’s two
Regulatory Flexibility Act Certification requests for production of documents as
I certify that the following action will Data Physics Corporation, 2025 Gateway good cause was shown and I ordered
not have a significant impact on a Place, Suite 260, San Jose, California 95110. that BIS produce the relevant
substantial number of small entities. Data Physics China, 1605B Westgate Tower, nonprivileged documents by 1 p.m. on
The major factors considered for this 1038 Nanjing Road West, Shanghai, P.R. November 3, 2006. BIS served the Data
China 200041. Data Physics China, RM. 1509, Physics Group with its responses in a
certification were:
Building 2, Xinquduan Jiayan, No. 5 timely manner and a hearing on the
1. The action may result in additional Changchunquia Road, Haidian District,
reporting, recordkeeping or other record was held on the request for
Beijing, P.R. China 100089. Sri Welaratna, renewal on November 8, 2006 at the
compliance requirements for small President, Data Physics Corporation, 2025
entities. Gateway Place, Suite 260, San Jose,
U.S. Department of Commerce in
California 95110. Bill Chen, Manager, AKA: Washington, DC. BIS and the Data
2. The action may result in
Yuequan Chen, Data Physics China, RM. Physics Group each presented oral
authorizing small entities to furnish the
1509, Building 2, Xinquduan Jiayan, No. 5 arguments.
services to the Government.
Changchunquia Road, Haidian District,
3. There are no known regulatory Beijing, P.R. China 100089, Respondents.
II. Discussion
alternatives which would accomplish (A) Legal Standard
the objectives of the Javits-Wagner- Order Renewing Order Temporarily
O’Day Act (41 U.S.C. 46–48c) in Denying Export Privileges Pursuant to section 766.24(d)(3) of the
connection with the services deleted EAR, the sole issue in determining
Pursuant to section 766.24 of the
from the Procurement List. whether to continue a TDO is whether
Export Administration Regulations
the TDO should be renewed to prevent
End of Certification (‘‘EAR’’),1 I hereby grant the Bureau of
an imminent violation of the EAR. ‘‘A
violation may be ‘imminent’ either in
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Accordingly, the following services 1 15 CFR Parts 730–774 (2006). The EAR are

are deleted from the Procurement List: issued under the Export Administration Act of
1979, as amended (50 U.S.C. app. 2401–2420 by the Notice of August 3, 2006 (71 FR 44,551,
Services (2000)) (‘‘EAA’’). Since August 21, 2001, the EAA (August 7, 2006)), has continued the EAR in effect
has been in lapse and the President, through under the International Emergency Economic
Service Type/Location: Custodial Executive Order 13222 of August 17, 2001 (3 CFR, Powers Act (50 U.S.C. 1701–1706 (2000))
Services, Denver Federal Center 2001 Comp. 783 (2002)), as extended most recently (‘‘IEEPA’’).

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Federal Register / Vol. 71, No. 231 / Friday, December 1, 2006 / Notices 69541

time or in degree of likelihood.’’ 15 CFR in the request for renewal of the TDO.1a Charge (‘‘SAC’’) Salcido that the
766.24(b)(3). This includes a violation Data Physics made multiple arguments Shanghai Xinyue Instrument Factory
that ‘‘is about to occur, or that the opposing the basis for the initial TDO, was of missile proliferation concern.
general circumstances of the matter including arguing that the 27th While the Data Physics Group tried to
under investigation or case under Locomotive was a legitimate end-user, dispute the significance of this
criminal or administrative charges that the transactions posed no transaction by arguing that the
demonstrate a likelihood of future traditional ‘‘red flags,’’ the evidence notification by SAC Salcido occurred in
violation.’’ Id. Significant, deliberate, supporting BIS’s claim that it was 2002, the notification was in response to
and covert violations are more probative exporting to the 3rd Academy is not a March 2002 letter from Data Physics’
of imminence and the likelihood of credible as it is based on hearsay President, Sri Welaratna, to OEE
future violations than lesser technical statements of a terminated employee regarding sponsorship of three visitors
ones. Id. A ‘‘lack of information who retracted his statements, and the from Shanghai Xinyue Instrument
documents obtained from a Data Physics Factory by Data Physics, and BIS has
establishing the precise time a violation
computer were not probative of Data not placed Shanghai Xinyue on the
may occur does not preclude a finding
Physics and the President’s knowledge. Entity List or any other list, I find those
that a violation is imminent, so long as The Data Physics Group also presented
there is sufficient reason to believe the arguments unpersuasive and troubling
evidence arguing that the new evidence as the evidence on this export further
likelihood of a violation.’’ Id. submitted by BIS in support of the demonstrates the Respondents’
(B) Arguments renewal (the export to Shanghai Xinyue willingness to knowingly export to
Instruments Factory, that the Data entities of missile proliferation concern
BIS’s request for renewal of the TDO Physics Group may be soliciting an without seeking advice or authorization
was based upon the facts underlying the illegal transaction, failing to submit from the U.S. Government prior to
issuance of the initial TDO as well as evidence to BIS in accordance with exporting. Significantly, in between the
evidence of continued actions by the certain license conditions and time of SAC Salcido’s E-mail
Respondents that demonstrate a negotiating export transactions while notification to Mr. Welaratna and Data
willingness to disregard U.S. export the TDO was in effect) was not correct Physics that Shanghai Xinyue is of
controls. The initial TDO was issued as and/or was insufficient to prove that missile proliferation concern and the
a result of evidence that showed the renewal of the TDO was appropriate. September 2005 export to Shanghai
Data Physics Corporation and Data III. Findings Xinyue by Data Physics, two significant
Physics China (Shanghai and Beijing events happened. First, the export
offices), with the knowledge of Data As to the new evidence submitted by
occurred after OEE executed a search
BIS in support of its request for renewal
Physics’ President Sri Welaratna, and warrant on Data Physics Corporation in
of the TDO, I find that the Data Physics
manager, Bill Chen, engaged in conduct connection with believed illegal
Group, through its written submission
prohibited by the EAR by knowingly exports. In April 2005, OEE agents
and oral arguments, provided sufficient
selling and exporting spherical executed a search warrant at Data
evidence to rebut a significant part of
couplings and a test shaker, items Physics and during execution of the
BIS’s evidence concerning the issues
subject to the EAR, to China HaiYang search warrant, OEE agents found
that the Data Physics Group may be
Electro Mechanical Technology copies of Part 744 of the EAR in the
soliciting an illegal transaction, failing
Academy (a.k.a. ‘‘3rd Academy’’ or office of the Data Physics manager who
to submit evidence to BIS in accordance
‘‘Beijing 3 yuan’’), an entity engaged in is responsible for export compliance.
with certain license conditions, and
the design, development, production Second, this Data Physics manager
negotiating export transactions while
and use of cruise missile systems, attended a May 2005 BIS sponsored
the TDO was in effect, and that BIS did
without an export license as required by seminar on export training during
not provide further evidence to rebut
Section 744.3 of the EAR. The evidence which an OEE agent gave a presentation
this evidence presented by the Data
further showed that the Respondents that focused on Part 744 of the EAR, the
Physics Group.
attempted to conceal the identity of the Enhanced Proliferation Control
However, I do find that the evidence
end-user by using a false customer Initiative, and specifically
presented by BIS in its renewal request
name—the ‘‘27th Locomotive Factory.’’ recommended doing research on
as to Data Physics Corporation’s export
The new evidence presented by BIS in customers, including Internet searches,
to the Shanghai Xinyue Instrument
support of the renewal of the TDO prior to exporting.2 Notwithstanding
Factory is persuasive and credible
includes documents indicating that Data evidence that proves that the TDO these events, Data Physics still exported
Physics Corporation exported to an should be renewed to prevent an a vector vibration controller to the
entity in China after it had been imminent violation of the EAR and that Shanghai Xinyue Instrument Factory, an
informed by BIS’s Office of Export the Data Physics Group did not provide entity of missile proliferation concern,
sufficient or persuasive evidence to without any consultation with BIS after
Enforcement that the end-user was of
rebut BIS’s evidence. First, it is having been notified by OEE that the
missile proliferation concern, that the
uncontested that Data Physics end-user was of missile proliferation
Data Physics Group may be soliciting an
Corporation exported a vector vibration concern. Significantly, the evidence
illegal transaction, failing to submit
controller, an item subject to the EAR, indicates that Data Physics only
evidence to BIS in accordance with
in September 2005 to the Shanghai checked the BIS Entity List and other
certain license conditions, and lists before exporting a vector vibration
negotiating export transactions while Xinyue Instrument Factory in China
without a BIS export license or controller to Shanghai Xinyue. This
the TDO was in effect. limited action by Data Physics is
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otherwise consulting with BIS after Data


In its opposition to the request for
Physics and its President, Sri Welaratna,
renewal of the TDO, the Data Physics 2 The Data Physics Group contests that OEE
were advised by Special Agent in recommended conducting Internet searches. The
Group challenges BIS’s evidence that
basis of this challenge was that the advice regarding
was the basis for the initial TDO as well 1a None of the Respondents appealed the initial conducting Internet searches was not included in
as the new evidence that was included TDO. the power point slides.

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69542 Federal Register / Vol. 71, No. 231 / Friday, December 1, 2006 / Notices

particularly troubling as the on Section 744.3 of the EAR and Locomotive was a legitimate end-user.
uncontested facts prove that Data because of the internal Data Physics’ e- Hence, all the evidence on the 3rd
Physics and its President, SRI mails that clearly and unequivocally Academy before me provides that the
Welaratna, know that Data Physics sells provide that references for the customer 3rd Academy is engaged in the design,
and exports item that have military end- Beijing 3 Yuan (a.k.a 3rd Academy) development, production and use of
uses, including for the design, should be referred to as the 27th cruise missile systems.
development and production of Locomotive. This evidence is persuasive The Data Physics Group further
missiles, and were notified that and indicates that several Data Physics argues that the e-mails and other
Shanghai Xinyue was of missile employees (not just Bill Chen) were documents reflecting communications
proliferation concern. While, I find this aware of attempts to conceal the identity between Bill Chen and other Data
evidence alone is a sufficient basis for of the 3rd Academy. Further, Data Physics employees which contained the
renewal of the TDO against all Physics Corporation is a company of statements that the 3rd Academy should
Respondents, I also find that the less than 40 employees and it knows be referred to as the 27th Locomotive
evidence serving as the basis of the that the items it sells, including were not known to any Data Physics
initial TDO is a further basis for renewal spherical couplings and test shakers, employees in the United States and do
of the TDO against all Respondents. have military end-uses. Hence, I find not demonstrate an intent by certain
As to the evidence underlying the these arguments of the Data Physics Respondents to conceal the true identity
initial TDO, I do not find the Data Group to be unpersuasive. of the end-user from BIS. I disagree.
Physics Group provided sufficient The Data Physics Group also argues These e-mails were obtained from Bill
credible evidence to rebut BIS’s credible that a significant portion of BIS’s Chen’s Data Physics’ lap top computer
and persuasive evidence that evidence, statements from a disgruntled which was in the United States and Mr.
Respondents knowingly participated in former Data Physics employee who was Chen worked in the United States and
the sale and unauthorized exports of terminated and who subsequently China for Data Physics. Further, the
spherical couplings and a test shaker, retracted his statements, is not credible exports to the 3rd Academy could not
items subject to the EAR, to the 3rd and is hearsay and, as such, is have been handled by just one or two
Academy, an entity engaged in the inadmissible. Again, the Data Physics persons. In fact, e-mails were seized at
design, development, production and Group’s arguments fall short. The Data Physics California headquarters
use of cruise missile systems, and took evidence submitted by BIS in support of that had 27th Locomotive in the subject
actions to conceal these transactions by its initial TDO clearly shows that there line but had ‘‘3 Yuan 3 * * *’’ hand
using a false end-user name. This is independent evidence that written in the upper right hand corner.4
evidence is the basis of the TDO. I corroborates the allegations from the Further, the Data Physics Group did not
further find that the evidence before me, former employee. Specifically, there is a provide any credible evidence to
presented both in the written series of e-mails between the former explain the statements directing the 3rd
submissions and oral arguments, employee, Bill Chen, and at least two Academy be referred to as the 27th
regarding the Respondents knowingly other current Data Physics employees Locomotive. In fact, while several
selling and exporting spherical that expressly provide that the customer affidavits submitted by the Data Physics
couplings and a test shaker to the 3rd name of the 27th Locomotive should be Group contained explicit statements
Academy without an export license used when referring to the 3rd Academy that ‘‘I do not recall ever hearing any
reveals violative actions that were or Beijing 3 Yuan. The evidence is references to the customer 27th
significant, deliberate and covert and admissible 3 and based upon the Locomotive using another entity name,
indicate a likelihood of future violations corroborating evidence, I find the nor do I recall seeing documentation
absent continuation of the TDO. Hence, statements persuasive. In addition, the that referred to this entity under another
on this basis alone I find that renewal Data Physics Group also contended that name;’’ the affidavit from an individual
of the TDO is appropriate. Bill Chen was gone from the company who was included in the e-mails does
First, the Data Physics Group not contain a similar statement.
and that any threat did not continue. I
incorrectly contends that BIS is arguing A find that the evidence presented by
disagree. Bill Chen is on administrative
that the 27th Locomotive does not exist, BIS demonstrates that the Respondents
leave from Data Physics and at least one
and that if it does exist, that it would have violated the EAR, that such
of the employees involved in the e-mail
not use the type of equipment at issue. violations have been significant,
exchange directing the 3rd Academy to
The evidence submitted by BIS does not deliberate and covert, and that there is
go to the existence of the 27th be referred to as the 27th Locomotive is
still with Data Physics. a likelihood of future violations. As
Locomotive but to the fact that the such a Temporary Denial Order
Further, the Data Physics Group tried
Respondents used the name of the 27th (‘‘TDO’’) is needed to give notice to
to argue that BIS’s evidence that the 3rd
Locomotive in attempts to conceal the persons and companies in the United
Academy is engaged in design,
fact it was selling and exporting States and abroad that they should
development, production and use of
spherical couplings and a test shaker to continue to cease dealing with the
cruise missile systems was not reliable
the 3rd Academy, an entity engaged in Respondents in export transactions
the design, development, production as it consisted of searches from the
Internet. These arguments also were not involving items subject to the EAR.
and use of cruise missile systems. I find Such a TDO is consistent with the
that these arguments raised by the Data persuasive. Again the evidence is
admissible and the Data Physics Group public interest to preclude violations of
Physics Group are not on point and the EAR.
unpersuasive. did not provide any evidence as to what
types of activities the 3rd Academy is Accordingly, I find that renewing the
The Data Physics Group further TDO naming Data Physics Corporation,
engaged in. Rather, their arguments
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argues that there were no traditional its two offices in China, Sri Welaratna
‘‘red flags’’ relating to exports to the focused on whether the 27th
and Bill Chen should be continued for
27th Locomotive as the 27th Locomotive 3 The Federal Rules of Evidence do not apply and 180 days as it is necessary in the public
is not on DIS’s Entity List or any other evidence that was relevant and material was
such list. This argument too is entertained and given appropriate weight. 15 CFR 4 The Data Physics Group has submitted evidence

unpersuasive as BIS is basing its charges 766.13. that this is Bill Chen’s handwriting.

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Federal Register / Vol. 71, No. 231 / Friday, December 1, 2006 / Notices 69543

interest to prevent an imminent B. Take any action that facilitates the before the expiration date. The
violation of the EAR. acquisition or attempted acquisition by Respondents may oppose a request to
The Data Physics Group also the Denied Persons of the ownership, renew this Order by filing a written
requested that to the extent the TDO is possession, or control of any item submission with the Assistant Secretary
renewed that it be limited to exports subject to the EAR that has been or will of Commerce for Export Enforcement,
and reexports to China. Based upon the be exported from the United States, which must be received not later than
evidence, I disagree. including financing or other support seven days before the expiration date of
activities related to a transaction the Order.
IV. ORDER whereby the Denied Persons acquires or A copy of this Order shall be served
It Is Therefore Ordered: attempts to acquire such ownership, on the Respondents and shall be
FIRST, that the Respondents, DATA possession or control; published in the Federal Register.
PHYSICS CORPORATION, 2025 C. Take any action to acquire from or This Order is effective immediately
Gateway Place, Suite 260, San Jose, to facilitate the acquisition or attempted and shall remain in effect for 180 days.
California, 95110, and DATA PHYSICS acquisition from the Denied Persons of
any item subject to the EAR that has Entered this 17th day of November, 2006.
CHINA, 1605B Westgate Tower, 1038
been exported from the United States; Darryl W. Jackson,
Nanjing Road West, Shanghai, P.R.
China, 200041, and DATA PHYSICS D. Obtain from the Denied Persons in Assistant Secretary of Commerce, for Export
the United States any item subject to the Enforcement.
CHINA, RM. 1509, Building 2,
Xinquaduan Jiayan, No. 5 EAR with knowledge or reason to know [FR Doc. 06–9419 Filed 11–30–06; 8:45 am]
Changchunquia Road, Haidian District, that the item will be, or is intended to BILLING CODE 3510–DT–M

Beijing, P.R. China, 100089, SRI be, exported from the United States; or
WELARANTNA, President, Data E. Engage in any transaction to service
any item subject to the EAR that has DEPARTMENT OF COMMERCE
Physics Corporation, 2025 Gateway
been or will be exported from the
Place, Suite 260, San Jose, California, International Trade Administration
United States and which is owned,
95110, and BILL CHEN, Manager, AKA:
possessed or controlled by the Denied
Yuequan Chen, Data Physics China, RM. Antidumping or Countervailing Duty
Persons, or service any item, or
1509, Building 2, Xinqudauan Jiayan, Order, Finding, or Suspended
whatever origin, that is owned,
No. 5 Changchunquia Road, Haidian Investigation; Opportunity To Request
possessed or controlled by the Denied
District, Beijing, P.R. China, 100089 Administrative Review
Persons if such service involves the use
(collectively the ‘‘Denied Persons’’),
of any item subject to the EAR that has AGENCY: Import Administration,
may not, directly or indirectly,
been or will be exported from the International Trade Administration,
participate in any way in any
United States. For purposes of this Department of Commerce.
transaction involving any commodity,
paragraph, servicing means installation,
software or technology (hereinafter FOR FURTHER INFORMATION CONTACT:
maintenance, repair, modification or
collectively referred to as ‘‘item’’) Sheila E. Forbes, Office of AD/CVD
testing.
exported or to be exported from the Third, that, after notice and Operations, Office 4, Import
United States that is subject to the opportunity for comment as provided in Administration, International Trade
Export Administration Regulations section 766.23 of the EAR, any other Administration, U.S. Department of
(‘‘EAR’’), or in any other activity subject person, firm, corporation, or business Commerce, 14th Street and Constitution
to the EAR, including, but not limited organization related to any of the Avenue, NW., Washington, DC 20230,
to: Denied Persons by affiliation, telephone: (202) 482–4697.
A. Applying for, obtaining, or using ownership, control, or position of
any license, License Exception, or Background
responsibility in the conduct of trade or
export control document; related services may also be made Each year during the anniversary
B. Carrying on negotiations subject to the provisions of this Order. month of the publication of an
concerning, or ordering, buying, Fourth, that this Order does not antidumping or countervailing duty
receiving, using, selling, delivering, prohibit any export, reexport, or other order, finding, or suspension of
storing, disposing of, forwarding, transaction subject to the EAR where the investigation, an interested party, as
transporting, financing, or otherwise only items involved that are subject to defined in section 771(9) of the Tariff
servicing in any way, any transaction the EAR are foreign-produced direct Act of 1930, as amended, may request,
involving any item exported or to be product of U.S.-origin technology. in accordance with section 351.213
exported from the United States that is In accordance with the provisions of (2004) of the Department of Commerce
subject to the EAR, or in any other Section 766.24(e) of the EAR, the (the Department) Regulations, that the
activity subject to the EAR; or Respondents may, at any time, appeal Department conduct an administrative
C. Benefiting in any way from any this Order by filing a full written review of that antidumping or
transaction involving any item exported statement in support of the appeal with countervailing duty order, finding, or
or to be exported from the United States the Office of the Administrative Law suspended investigation.
that is subject to the EAR, or in any Judge, U.S. Coast Guard ALJ Docketing Opportunity to Request a Review: Not
other activity subject to the EAR. Center, 40 South Gay Street, Baltimore, later than the last day of December
Second, that no person may, directly Maryland 21202–4022. 2006,1 interested parties may request
or indirectly, do any of the following: In accordance with the provisions of administrative review of the following
A. Export or reexport to or on behalf Section 766.24(d) of the EAR, BIS may orders, findings, or suspended
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of the Denied Persons any item subject seek renewal of this Order by filing a investigations, with anniversary dates in
to the EAR; written request not later than 20 days December for the following periods:

1 Or the next business day, if the deadline falls

on a weekend, Federal holiday or any other day


when the Department is closed.

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