80 FR 16632 - Amended Order Temporarily Denying Export Privileges

DEPARTMENT OF COMMERCE
Bureau of Industry and Security

Federal Register Volume 80, Issue 60 (March 30, 2015)

[Federal Register Volume 80, Number 60 (Monday, March 30, 2015)]
[Notices]
[Pages 16632-16634]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-07181]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Amended Order Temporarily Denying Export Privileges

    Flider Electronics, LLC a/k/a Flider Electronics d/b/a Trident 
International Corporation d/b/a Trident International d/b/a Trident 
International Corporation, LLC, 837 Turk Street, San Francisco, 
California 94102

and

    Pavel Semenovich Flider a/k/a Pavel Flider, 21 Eye Street, San 
Rafael, California 94901

and

    Gennadiy Semenovich Flider a/k/a Gennadiy Flider, 699 36th 
Avenue #203, San Francisco, California 94121

    Pursuant to Section 766.24 of the Export Administration Regulations 
(the ``Regulations'' or ``EAR''),\1\ the Bureau of Industry and 
Security (``BIS''), U.S. Department of Commerce, through its Office of 
Export Enforcement (``OEE''), has requested that I issue an Order 
temporarily denying, for a period of 180 days, the export privileges of 
Flider Electronics, LLC, also known as Flider Electronics, and doing 
business as Trident International Corporation, Trident International, 
and Trident International Corporation, LLC. Flider Electronics, LLC is 
a California limited liability company based in San Francisco, 
California. It is operated, at least in substantial part, for the 
purpose of procuring and exporting U.S.-origin electronic components. 
California State Corporation Number C1908339 has been used in 
connection with the doing business names of Trident International 
Corporation, Trident International, and Trident International 
Corporation, LLC, but that number is associated with Flider 
Electronics, LLC and the address used in connection with those doing 
business as names is the same address as Flider Electronics, LLC. Pavel 
Semenovich Flider, also known as Pavel Flider, is the president and 
owner of Flider Electronics/Trident International (``Trident''). His 
brother Gennadiy Semenovich Flider, also known as Gennadiy Flider, has 
identified himself as Trident's office manager, since 2003, and his 
duties include the purchase of items from U.S. distributors, the 
shipment of those items abroad, and related filings with U.S. 
Government agencies.\2\
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    \1\ The Regulations are currently codified at 15 CFR parts 730-
774 (2014). The EAR issued under the Export Administration Act of 
1979, as amended (50 U.S.C. app. Sec. Sec.  2401-2420 (2000)) 
(``EAA''). 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)), which has been extended by successive 
Presidential Notices, the most recent being that of August 7, 2014 
(79 FR 46959 (Aug. 11, 2014)), has continued the Regulations in 
effect under the International Emergency Economic Powers Act (50 
U.S.C. 1701, et seq.) (2006 & Supp. IV 2010).
    \2\ I approved OEE's request and issued a temporary denial order 
against Trident on March 19, 2015. Pavel Flider and Gennadiy Flider 
were added to that order, as issued, as related persons to Trident. 
This amended order makes limited revision to page 6 of the March 19, 
2015 order, and does not change my findings or the terms of the 
order issued on March 19, 2015. See pp. 6-11, infra.
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    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. 15 CFR 766.24(b)(1) and 776.24(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.
    In its request, OEE has presented evidence that it has reason to 
believe that Trident engaged in conduct prohibited by the Regulations 
by exporting items subject to the EAR to Russia via transshipment 
through third countries. In Automated Export System (``AES'') filings 
it made, Trident identified as ``ultimate consignees'' companies in 
Estonia and Finland that BIS has reason to believe were operating as 
freight forwarders and not end users of the U.S.-origin items. OEE's 
presentation also indicates that at least two of these transactions are 
known to have involved items that are listed on the Commerce Control 
List and that a search of BIS's licensing database reveals no licensing 
history of controlled U.S.-origin electronics to Russia for the company 
and individuals captioned in this case. Based on, inter alia, the 
transshipment of the items, the misrepresentations made on the AES 
filings, and information obtained pursuant to a Mutual Legal Assistance 
Treaty (``MLAT'') request, OEE indicates that it has reason to believe 
that these exports required a license.

[[Page 16633]]

A. Detained Shipments on April 6, 2013

    On or about April 6, 2013, the U.S. Customs and Border Protection 
(``CBP'') detained two outbound shipments at San Francisco 
International Airport. CBP ultimately allowed one of these exports to 
proceed, but the other attempted export was not and the items were 
ultimately seized. The manifest and the AES filing for the seized 
shipment described the items as ``power supplies,'' but the shipment 
actually contained, among other items, 15 Xilinx field programmable 
gate array (FPGA) circuits that were controlled under Export Control 
Classification Number (ECCN) 3A001.a.2.c for national security reasons 
and generally required a license for Russia. The shipping documentation 
also listed Logilane Oy Ltd. in Finland (``Logilane'') as the ultimate 
consignee. Open source information confirmed that Logilane was a 
freight forwarder and thus unlikely to be the end user for the items 
contained in the shipment. When questioned about the shipment, Pavel 
Flider requested that the ultimate consignee be changed to Adimir OU 
(``Adimir'') in Estonia, which itself also proved to be a freight 
forwarder as discussed further below.

B. Interviews of Pavel Flider and Gennadiy Flider

    On or about April 19, 2013, OEE interviewed Trident office manager 
Gennadiy Flider, who identified his responsibilities as handling the 
procurement and shipment of items, including for export. He stated 
Trident had been doing business with Adimir for many years and that it 
was the only customer that his company had. He also indicated that 
Trident at times shipped items intended for its Estonian customer to 
Finland, claiming this was because it was cheaper.
    Similarly, in an August 5, 2013 interview, Trident's president and 
owner Pavel Flider stated that Adimir was Trident's one and only 
customer and that at times Adimir requested that items be shipped to a 
freight forwarder in Finland. Both Gennadiy Flider and Pavel Flider 
denied shipping to Russia.

C. July 2013 Detention and Subsequent Seizure

    On or about July 20, 2013, the U.S. Government detained a Trident 
shipment bound for Adimir in Estonia. In addition to Adimir being 
identified as the ultimate consignee on the AES filing, the items were 
identified as ``Electronic Equipment.'' A review of the invoice showed 
six Xilinx FPGAs, items which were controlled under ECCN 3A001.a.2.c 
for national security reasons and generally required a license for 
Russia. Moreover, an inspection of the shipment uncovered 51 controlled 
Xilinx chips, rather than just the six that had been declared. CBP 
ultimately seized the shipment on or about October 18, 2013.

D. Information Concerning Purported Estonian End User Obtained via an 
MLAT Request

    Based on information obtained in 2014 via a late 2013 MLAT request 
sent to Estonia relating to Adimir, BIS has reason to believe that 
Adimir was not an end user. During an interview, an Adimir corporate 
officer admitted to transshipping Trident shipments to Russia at the 
request of Pavel Flider. Adimir subsequently ceased operating.

E. Changes in the Scheme

    Following the detention and seizures, the MLAT request, and the 
Adimir interview, Trident began exporting directly to Russia, claiming 
that the controlled circuits were for use in railroads. This assertion 
sought to track a note to ECCN 3A001.a.2, which indicates that the ECCN 
does not apply to integrated circuits for civil automotive or railway 
train applications. Pavel Flider reported to the U.S. distributor that 
Trident had been ``referred'' Russian customers by Adimir, which was 
going out of business. After being made aware that the items actually 
were intended for export to Russia, the U.S. distributor requested that 
Trident sign a Form BIS-711 ``Statement by Ultimate Consignee and 
Purchaser,'' which includes an end use statement and must be signed by 
the purchaser and the ultimate consignee.
    From on or about January 23, 2014, to on or about April 16, 2014, 
Trident began listing in its AES filings OOO Elkomtex (``Elkomtex'') in 
St. Petersburg, Russia, as the ultimate consignee. On or about July 17, 
2014, the Elkomtex employees admitted that the company was not an end 
user but a distributor of electronics, acting as a broker between an 
exporter and an end use company.
    Beginning with an export on or about May 6, 2014, Trident again 
changed its export route and began exporting to a purported ultimate 
consignee named Logimix Ltd., in Vantaa, Finland (``Logimix''). Between 
on or about May 6, 2014, to on or about March 12, 2015, AES filings 
indicate that Trident has made 33 exports with Logimix listed as the 
ultimate consignee. Based on Logimix's Web site and other open source 
Internet information, however, OEE's presentation indicates that it has 
reason to believe that Logimix is a freight forwarder and not an end 
user. Moreover, given the violations, deceptive actions, and other 
evidence involving Trident, including those admitted by the Fliders, 
OEE also indicates that it has reason to believe that Trident have been 
making transshipments to Russia.
    OEE has further indicated that in February 2014, Trident ordered an 
additional 195 integrated circuits controlled under ECCN 3A001.a.2.c 
from a U.S. distributor and that those items would be available by in 
or around April 2015. In addition, Trident and Pavel Flider have been 
indicted for smuggling and money laundering, including in connection 
with some of the transactions discussed above. The U.S. Government also 
seized multiple accounts in which Trident had an interest.

F. Findings

    I find that the evidence presented by BIS demonstrates that a 
violation of the Regulations is imminent in both time and degree of 
likelihood. Trident has engaged in some known violations of the 
Regulations and its actions, including changes in how it structures its 
export transactions and routes its shipments, appear designed to 
camouflage the actual destinations, end uses, and/or end users of the 
U.S.-origin items it has been and continues to export, including items 
on the Commerce Control List that are subject to national security-
based license requirements. Moreover, when interviewed in 2013, the 
Fliders could not provide a reasonable explanation for the purported 
exports to Estonia and Finland. When for a time Trident began direct 
exports to Russia, the entity listed as the ultimate consignee admitted 
that it was not an end user and instead acting as a broker.
    In sum, the fact and circumstances taken as a whole provide strong 
indicators that future violations are likely absent the issuance of a 
TDO. As such, a TDO is needed to give notice to persons and companies 
in the United States and abroad that they should cease dealing with 
Trident in export transactions involving items subject to the EAR. Such 
a TDO is consistent with the public interest to preclude future 
violations of the EAR.
    Additionally, 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

[[Page 16634]]

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). As stated 
above, Pavel Flider is the president and owner of Trident. Gennadiy 
Flider also is a Trident office manager, with responsibilities relating 
directly to the procurement and export activities at issue. As such, I 
find that Pavel Semenovich Flider and Gennadiy Semenovich Flider are 
related persons to Trident based on their positions of responsibility 
and that their additions to the order is necessary to prevent evasion.
    Accordingly, I find that an order denying the export privileges of 
Trident, Pavel Flider, and Gennadiy Flider is necessary, in the public 
interest, to prevent an imminent violation of the EAR.
    This Order is being issued on an ex parte basis without a hearing 
based upon BIS's showing of an imminent violation in accordance with 
Section 766.24 of the Regulations.
    It is therefore ordered:
    First, that FLIDER ELECTRONICS, LLC, a/k/a FLIDER ELECTRONICS, d/b/
a TRIDENT INTERNATIONAL CORPORATION, d/b/a TRIDENT INTERNATIONAL d/b/a 
TRIDENT INTERNATIONAL CORPORATION, LLC, 837 Turk Street, San Francisco, 
California 94102; PAVEL SEMENOVICH FLIDER, a/k/a PAVEL FLIDER, 21 Eye 
Street, San Rafael, California 94901; and GENNADIY SEMENOVICH FLIDER, 
a/k/a GENNADIY FLIDER, 699 36th Avenue #203, San Francisco, California 
94121, and when acting for or on their behalf, any successors or 
assigns, agents, or employees (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. 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 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 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 Section 766.24(e) of the EAR, 
Flider Electronics, LLC d/b/a Trident International Corporation, 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 Sections 
766.23(c)(2) and 766.24(e)(3) of the EAR, Pavel Semenovich Flider and 
Gennadiy Semenovich Flider may, at any time, appeal their inclusion as 
a related person 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. Flider Electronics, LLC 
d/b/a Trident International Corporation may oppose a request to renew 
this Order by filing a written submission with the Assistant Secretary 
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 sent to Flider Electronics LLC d/b/a 
Trident International Corporation and each related person, and shall be 
published in the Federal Register.
    This Order is effective upon issuance and shall remain in effect 
until September 14, 2015.

    Dated: March 23, 2015.
David W. Mills,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2015-07181 Filed 3-27-15; 8:45 am]
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