Notice2022-26737
Order Renewing Temporary Denial of Export Privileges, Quicksilver Manufacturing, Inc., 8209 Market St. #A173, Wilmington, NC 28411; Rapid Cut LLC, 8209 Market St. #A173, Wilmington, NC 28411; US Prototype, Inc., 8209 Market St. #A173, Wilmington, NC 28411
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 9, 2022
Issuing agencies
Commerce DepartmentIndustry and Security Bureau
Full Text
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<title>Federal Register, Volume 87 Issue 236 (Friday, December 9, 2022)</title>
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[Federal Register Volume 87, Number 236 (Friday, December 9, 2022)]
[Notices]
[Pages 75587-75589]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-26737]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
Order Renewing Temporary Denial of Export Privileges, Quicksilver
Manufacturing, Inc., 8209 Market St. #A173, Wilmington, NC 28411; Rapid
Cut LLC, 8209 Market St. #A173, Wilmington, NC 28411; US Prototype,
Inc., 8209 Market St. #A173, Wilmington, NC 28411
Pursuant to section 766.24 of the Export Administration
Regulations, 15 CFR parts 730-774 (2021) (``EAR'' or ``the
Regulations''),\1\ I hereby grant the request of the Office of Export
Enforcement (``OEE'') to renew the temporary denial order (``TDO'')
issued in this matter on June 7, 2022. I find that renewal of this
order is necessary in the public interest to prevent an imminent
violation of the Regulations.
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\1\ On August 13, 2018, the President signed into law the John
S. McCain National Defense Authorization Act for Fiscal Year 2019,
which includes the Export Control Reform Act of 2018, 50 U.S.C.
4801-4852 (``ECRA''). While Section 1766 of ECRA repeals the
provisions of the Export Administration Act, 50 U.S.C. App. 2401 et
seq. (``EAA''), (except for three sections which are inapplicable
here), section 1768 of ECRA provides, in pertinent part, that all
orders, rules, regulations, and other forms of administrative action
that were made or issued under the EAA, including as continued in
effect pursuant to the International Emergency Economic Powers Act,
50 U.S.C. 1701 et seq. (``IEEPA''), and were in effect as of ECRA's
date of enactment (August 13, 2018), shall continue in effect
according to their terms until modified, superseded, set aside, or
revoked through action undertaken pursuant to the authority provided
under ECRA. Moreover, section 1761(a)(5) of ECRA authorizes the
issuance of temporary denial orders. 50 U.S.C. 4820(a)(5).
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I. Procedural History
On June 7, 2022, an order was issued denying the export privileges
under the Regulations of Quicksilver Manufacturing, Inc.
(``Quicksilver''), Rapid Cut LLC (``Rapid Cut''), and US Prototype,
Inc. (``US Prototype'') (collectively Respondents) for a period of 180
days on the ground that issuance of the order was necessary in the
public interest to prevent an imminent violation of the Regulations.
The order was issued ex parte pursuant to section
[[Page 75588]]
766.24(a) of the Regulations and was effective upon issuance.\2\
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\2\ The TDO was published in the Federal Register on June 15,
2022 (87 FR 36104).
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On November 10, 2022, BIS, through OEE, submitted a written request
for renewal of the TDO that was issued on June 7, 2022. The written
request was made more than 20 days before the TDO's scheduled
expiration. A copy of the renewal request was sent to Respondents in
accordance with sections 766.5 and 766.24(d) of the Regulations. On
November 29, 2022, Respondents made a written submission for
consideration by BIS.
II. Renewal of the TDO
A. Legal Standard
Pursuant to section 766.24, BIS may issue an order temporarily
denying a respondent's export privileges upon a showing that the order
is necessary in the public interest to prevent an ``imminent
violation'' of the Regulations, or any order, license or authorization
issued thereunder. 15 CFR 766.24(b)(1) and 766.24(d). ``A violation may
be `imminent' either in time or 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 charge ``is
significant, deliberate, covert and/or likely to occur again, rather
than technical or 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, as well as evidence developed over the
continuing course of this investigation. The initial TDO, issued on
June 7, 2022, was based on evidence that Respondents engaged in conduct
prohibited by the Regulations by exporting or causing the export from
the United States of technology controlled on national security and/or
missile technology grounds to China for 3D printing without the
required U.S. government authorization.\3\ ``Export'' is defined in the
EAR as an ``actual shipment or transmission out of the United States,
including the sending or taking of an item out of the United States, in
any manner.'' 15 CFR 734.13(a)(1).\4\
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\3\ The June 7, 2022 TDO also detailed the export of technical
specifications to China controlled under United States Munitions
List Category XX (Submersible Vessels and Related Articles), section
(d), without the required U.S. Department of State authorization.
\4\ ``Item'' means ``commodities, software, and technology.'' 15
CFR 772.1. Further, ``technology'' may be in any tangible or
intangible form, such as written or oral communications, blueprints,
drawings, photographs, plans, diagrams, models, formulae, tables,
engineering designs and specifications, computer-aided design files,
manuals or documentation, electronic media or information revealed
through visual inspection. Id.
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In its November 10, 2022, request for renewal of the TDO, BIS has
submitted evidence that Respondents' export compliance failures are
broader in scope than the initial investigation revealed along with new
concerns raised by actions taken after the issuance of the June 7, 2022
TDO. Specifically, BIS's evidence and further investigation has
identified additional U.S. companies that engaged in business with
Respondents involving the unlicensed export of technical specifications
to China related to firearm components (ECCN 0E501.a) and space-rated
items (ECCN 9E515.a), both of which are controlled on national security
and regional stability grounds, as well as numerous additional
suspected export control-related violations between 2017 and 2022.
BIS's evidence also indicates that Respondents' apparent attempts at
compliance since the issuance of the June 7, 2022 TDO at best continue
to fall short by providing inaccurate information to customers about
the scope of items subject to the Regulations.
Moreover, BIS has submitted evidence that a China-based individual
who is known to operate an @rapidcut.com email address to facilitate
Rapid Cut's business operations, may have violated the TDO shortly
after its issuance by providing customers information on how to
complete and fulfill pending orders, despite the issuance of the TDO.
Such information includes instructions to cancel existing Rapid Cut
orders and reissue purchase orders to China Company No. 1, in an
apparent attempt to avoid the restrictions of the TDO.\5\
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\5\ Respondents' November 29, 2022 submission asserts that the
individual who sent the above-described emails was not an employee
of Rapid Cut but rather an employee of China Company No. 1, a
separate legal entity. Rapid Cut markets and sells China Company No.
1's manufacturing capabilities in North America, and China Company
No. 1 pays Rapid Cut commissions on these sales.
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III. Findings
Under the applicable standard set forth in section 766.24 of the
Regulations and my review of the entire record, including Respondents'
November 29, 2022 submission, I find that the evidence presented by BIS
convincingly demonstrates that Respondents have acted in violation of
the Regulations; that such violations have been significant, deliberate
and covert; and that given the foregoing and the nature of the matters
under investigation, there is a likelihood of imminent violations.
Therefore, renewal of the TDO is necessary in the public interest to
prevent imminent violation of the Regulations and to give notice to
companies and individuals in the United States and abroad that they
should avoid dealing with Respondents, in connection with export and
reexport transactions involving items subject to the Regulations and in
connection with any other activity subject to the Regulations.
IV. Order
It is therefore ordered:
First, that Quicksilver Manufacturing, Inc., with an address at
8209 Market St. #A173, Wilmington, NC 28411; Rapid Cut LLC, with an
address at 8209 Market St. #A173, Wilmington, NC 28411; and US
Prototype, Inc., with an address at 8209 Market St. #A173, Wilmington,
NC 28411 (collectively Respondents), when acting for or on their
behalf, any successors or assigns, agents, or employees 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 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 engaging in any other
activity subject to the EAR; 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 EAR, or from any other activity subject to the EAR.
Second, that no person may, directly or indirectly, do any of the
following:
A. Export, reexport, or transfer (in-country) to or on behalf of
Respondents any item subject to the EAR;
[[Page 75589]]
B. Take any action that facilitates the acquisition or attempted
acquisition by Respondents 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 Respondents 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 Respondents of any item subject to the
EAR that has been exported from the United States;
D. Obtain from Respondents 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 Respondents or service any item, of
whatever origin, that is owned, possessed or controlled by Respondents
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 Respondents by ownership, control,
position of responsibility, affiliation, or other connection in the
conduct of trade or business may also be made subject to the provisions
of this Order.
In accordance with the provisions of sections 766.24(e) of the EAR,
Respondents 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.
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 by Respondents 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.
A copy of this Order shall be provided to Respondents and shall be
published in the Federal Register.
This Order is effective immediately and shall remain in effect for
180 days.
Dated: December 5, 2022.
Kevin J. Kurland,
Deputy Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2022-26737 Filed 12-8-22; 8:45 am]
BILLING CODE 3510-DT-P
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</html>Indexed from Federal Register on December 9, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.