The Unverified List; Additions and Removals

<RULE> DEPARTMENT OF COMMERCE <SUBAGY>Bureau of Industry and Security</SUBAGY> <CFR>15 CFR Part 744</CFR> <DEPDOC>[Docket No. 240626-0176]</DEPDOC> <RIN>RIN 0694-AJ70</RIN> <SUBJECT>The Unverified List; Additions and Removals</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Bureau of Industry and Security, Department of Commerce. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by adding 13 persons to the Unverified List (UVL). The 13 persons being added are added under the following destinations: China, Peoples' Republic of (China) (8), Cyprus (1), Kyrgyzstan (1), Türkiye (2), and the United Arab Emirates (UAE) (1). BIS is also amending the EAR by removing eight persons from the UVL. Of the eight persons being removed, one is under the destination of the UAE, one is under the destination of Russia, and six are under the destination of China. This final rule also removes the country name Russia from the UVL. Lastly, this final rule replaces the country name Turkey with Türkiye in the UVL. This is a conforming change to the U.S. State Department's recognition on January 9, 2023, of Türkiye's official name. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">This rule is effective:</E> July 3, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Deniz Muslu Acting Director, Office of Enforcement Analysis, Phone: (202) 482-4255, Email: <E T="03">UVLRequest@bis.doc.gov</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Background</HD> <HD SOURCE="HD1">Unverified List</HD> The UVL, found in supplement no. 6 to part 744 of the EAR (15 CFR parts 730-774), contains the names and addresses of foreign persons who are or have been parties to a transaction, as described in § 748.5 of the EAR, involving the export, reexport, or transfer (in-country) of items subject to the EAR. These foreign persons are added to the UVL because BIS or Federal officials acting on BIS's behalf were unable to verify their <E T="03">bona fides</E> ( <E T="03">i.e.,</E> legitimacy and reliability relating to the end use and end user of items subject to the EAR) through the completion of an end-use check. Sometimes these checks, such as a pre-license check (PLC) or a post-shipment verification (PSV), cannot be completed satisfactorily for reasons outside the U.S. Government's control. There are a number of reasons why end-use checks cannot be completed to the satisfaction of the U.S. Government. The reasons include, but are not limited to: (1) reasons unrelated to the cooperation of the foreign party subject to the end-use check ( <E T="03">e.g.,</E> BIS sometimes initiates end-use checks, but is unable to complete them because the foreign party cannot be found at the address indicated on the associated export documents and BIS cannot contact the party by telephone or email); (2) reasons related to a lack of cooperation by a host government that fails to schedule and facilitate the completion of an end-use check ( <E T="03">e.g.,</E> a host government agencies' lack of response to requests to conduct end-use checks, actions preventing the scheduling of such checks, or refusals to schedule checks in a timely manner); or (3) when, during the end-use check, a recipient of items subject to the EAR is unable to produce the items that are the subject of the end-use check for visual inspection or provide sufficient documentation or other evidence to confirm the disposition of the items. BIS's inability to confirm the <E T="03">bona fides</E> of foreign persons subject to end-use checks raises concerns about the suitability of such persons as participants in future exports, reexports, or transfers (in-country) of items subject to the EAR; the inability to confirm a foreign person's <E T="03">bona fides</E> also indicates a risk that items subject to the EAR may be diverted to prohibited end uses and/or end users. Under such circumstances, there may not be sufficient information to add the foreign person at issue to the Entity List (supplement no. 4 to part 744 of the EAR) under § 744.11 of the EAR. Therefore, BIS may add the foreign person to the UVL. As provided in § 740.2(a)(17) of the EAR, the use of license exceptions for exports, reexports, and transfers (in-country) involving a party or parties to the transaction who are listed on the UVL is suspended. Additionally, under § 744.15(b) of the EAR, there is a requirement for exporters, re-exporters, and transferors to obtain, and maintain a record of, a UVL statement from a party or parties to the transaction who are listed on the UVL before proceeding with exports, reexports, and transfers (in-country) to such persons, when the exports, reexports and transfers (in-country) are not subject to a license requirement. Finally, pursuant to § 758.1(b)(8), Electronic Export Information (EEI) must be filed in the Automated Export System (AES) for all exports of tangible items subject to the EAR in which parties to the transaction, as described in § 748.5(d) through (f), are listed on the UVL. Requests for the removal of a UVL entry must be made in accordance with § 744.15(d) of the EAR. Decisions regarding the removal or modification of UVL entry will be made by the Deputy Assistant Secretary for Export Enforcement, based on a demonstration by the listed person of their <E T="03">bona fides.</E> As provided in § 744.15(c)(2) of the EAR, BIS will remove a person from the UVL when BIS is able to verify the <E T="03">bona fides</E> of the listed person. <HD SOURCE="HD2">Additions to the UVL</HD> This rule adds 13 persons to the UVL by amending supplement no. 6 to part 744 of the EAR to include their names and addresses. BIS is adding these persons pursuant to § 744.15(c) of the EAR. This final rule implements the decision to add the following 13 persons to the UVL: Avant Science Co., Ltd.; Bada Group Hong Kong Corporation, Limited; Hongkong Delta Electronics Technology Co., Limited; Hongxin Technology Limited; Lihang Technology Co., Ltd.; Shenzhen Mingxinyuan Co., Ltd.; Shenzhen Xianhexin Electronics Co., Ltd.; and Xi'An Aerotek Co., Ltd. under the destination of China; Mirsystems Ltd. under the destination of Cyprus; Inerto LLC under the destination of Kyrgyzstan; AUK Group and ER Transport Uluslararasi Tasimacilik Limited Sirketi under the destination of Türkiye; and Navio Shipping LLC under the destination of the UAE. <HD SOURCE="HD2">Removals From the UVL</HD> This rule removes seven persons from the UVL because BIS was able to verify their <E T="03">bona fides.</E> This rule removes the following seven persons located in the following destinations from the UVL: Fulian Precision Electronics (Tianjin) Co., Ltd.; Nanning Fulian Fu Gui Precision Co., Ltd.; Guangzhou Trusme Electronics Technology Co., Ltd.; Guangzhou Xinyun Intelligent Technology Co., Ltd.; Shenzhen Jia Li Chuang Tech Development Co., Ltd.; and Xi'An Yierda Co., Ltd. under the destination of China; and Aero King FZC under the destination of the UAE. BIS is removing these persons pursuant to § 744.15(c)(2) of the EAR. This rule also makes a conforming change to remove one person under the destination of Russia from the UVL on the basis of that person's addition to the Entity List. On February 23, 2024, in the final rule “Additions of Entities to the Entity List” (89 FR 14385 February 27, 2024), BIS added “EFO Company Limited Liability Company” a.k.a. the following three aliases:—OOO EFO;—EFO Ltd.; <E T="03">and</E> —EFO LLC., under the destination of Russia to the Entity List. Therefore, this rule removes “EFO Ltd.”, under the destination of Russia, from the UVL. <HD SOURCE="HD2">Corrections to the UVL</HD> Given the removal of all entries all under the destination of Russia, this final rule removes the destination of Russia from the UVL. This final rule also changes the name of Turkey to Türkiye in the UVL, which impacts the name of the destination and the five entries within that destination. BIS makes this change to conform to the U.S. State Department's recognition on January 9, 2023, of Türkiye's official name. <HD SOURCE="HD1">Export Control Reform Act of 2018</HD> On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA), 50 U.S.C. 4801-4852. ECRA provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this final rule. <HD SOURCE="HD1">Savings Clause</HD> Shipments (1) that are removed from license exception eligibility or that are now subject to requirements in § 744.15 of the EAR as a result of this regulatory action; (2) that were eligible for export, reexport, or transfer (in-country) without a license before this regulatory action; and (3) that were on dock for loading, on lighter, laden aboard an exporting carrier, or enroute aboard a carrier to a port of export, on July 3, 2024, pursuant to actual orders, may proceed to that UVL listed person under the previous license exception eligibility or without a license and pursuant to the export clearance requirements set forth in part 758 of the EAR that applied prior to this person being listed on the UVL, so long as the items have been exported from the United States, reexported or transferred (in-country) before August 2, 2024. Any such items not actually exported, reexported or transferred (in-country) before midnight on August 2, 2024 are subject to the requirements in § 744.15 of the EAR in accordance with this rule. <HD SOURCE="HD1">Rulemaking Requirements</HD> <HD SOURCE="HD1">Executive Order Requirements</HD> Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 23k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━