FAC No. IQ-214111

[Jul 8 2004]

PREPENALTY NOTICE

Mr. Ryan Clancy
133 West Oregon Street, Apt. 203
Milwaukee, Wl 53204
Dear Mr. Clancy

The Office of Foreign Assets Control ("OFAC") has reason to believe that you have engaged in certain prohibited transactions, detailed below. Inasmuch as no license or approval had been issued by OFAC prior to such transactions, you appear to have violated the Iraqi Sanctions Regulations, 31 C.F.R. Part 575 ("Regulations"), promulgated pursuant to the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-1706 ("IEEPA"), and underlying statutes and Executive Orders. See §§ 575.205 and 575.207 of the Regulations.

*Violations

The violation for which this Notice is issued concerns your exportation of services to Iraq and your unauthorized travcl-rc1ated transactions in Iraq. The specific violations are as follows:

On January 28, 2003, you departed the United States with an ultimate destination to Baghdad, Iraq, The cost of the transportation totaled £300, Including ground transportation between Amman, Jordan and Baghdad. You arrived in Iraq on or around February 5 2003, where you stayed in the Andalus Apartments, a hotel in Baghdad, and a food storage facility 30 to 40 minutes north of Baghdad. While In Iraq, you provided services by shielding Government of Iraq facilities from possible U.S. military action. You returned to the United States on March 7, 2003,

*Proposed Penalty

Section 206 of IEEPA, 50 U.S.C. § 1705, provides, in part, for a civil penalty not to exceed $10,000 for each such violation. Section 586E of the Iraq Sanctions Act of 1990, PL. 101-513, 104 Stat. 2049, provides, in part, for a civil penalty not to exceed $250,000 for each violation occurring after November 5, 1990 [1] See § 575.701 of the Regulations. Pursuant to§ 575.702, you are hereby notified that OFAC intends to issue a claim against you for a monetary penalty in the amount of $10,000.

Before making a final determination as to whether a penalty will be assessed and, if so, in what amount, OFAC will consider favorably mitigating factors, such as future compliance with economic sanctions programs, as well as aggravating factors, such as the willful nature of the violation.

Election of Proceedings

1. You have the right to make a written presentation to OFAC within thirty (30) days of the mailing of this Notice. Such written presentation in response to this Notice need not be in any particular form, but it should contain a response to the allegations herein, and set forth the reasons why the penalty should not be issued, or if issued, why the amount should be less than that proposed in this Notice. Any written response you make will be considered a mitigating factor that may result in a lower final penalty amount absent any aggravating factors. Your response should be addressed to the Office of Foreign Assets Control (Attention: Civil Penalties Division), U.S. Department of the Treasury, 1500 Pennsylvania Avenue, N.W., Washington, D.C. 20220.

2. In the event that yon elect not to respond, OFAC will conclude that you have decided not to submit any new facts or explanations for our consideration. ln such instance, OFAC generally will issue a Penalty Notice in accordance with § 575.704(b) of the Regulations, finding a violation and assessing a monetary penalty.

3. Should you elect to resolve this matter informally absent any final agency finding of violation, you may initiate settlement negotiations by telephoning the OFAC staff member named below under "Contact Person" at any time before you are issued a Penalty notice. If the negotiations result in settlement within the time period set forth in this Notice, you are not required to make a written response to this Notice, which will be withdrawn without a formal determination of violation.

Collection

Section 575.705 of the Regulations provide that this matter may be referred for administrative collective measures by the Department of the Treasury or to the United States Department of Justice for collection if the penalty is not paid within thirty (30) days of the mailing of a Penalty Notice, should one be issued pursuant to § 575.704 of the Regulations.

Please note that 31 U.S.C. § 7701 requires that a person assessed a penalty by a Federal agency furnish a taxpayer identification number/Social Security Number and also requires FAC to disclose that the agency intends to use such number for the purposes of collecting and reporting on any delinquent penalty amount in the event of a failure to pay the penalty imposed.

Contact

In view of the short response time, if you have any questions concerning this matter, please feel free to contact the appropriate member of my staff, Mrs. B.S. Scott, Chief, Civil Penalties Division, at telephone number (202) 622-6140.

Sincerely,

[Signature]

R. Richard Newcomb
Director
Office of Foreign Assets Control

[1] Section 4 of the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, 104 Stat. 890, 28 U.S.C. 2461 note), as amended by the Debt Collection Improvement Act of 1996 (Pub. L. 104-134 sec. 31001(s)1), apr. 26, 1996, 110 Stat. 1321-373 – Jointly the "FCPIA"). Accordingly, on October 23, 1996, OFAC published in the Federal Register the required amendment, effective October 21, 1996, to the regulations adjusting its CMP to $275,000. See 61 FR 54936 at 54939.