Revisions to the Unverified List

<RULE> DEPARTMENT OF COMMERCE <SUBAGY>Bureau of Industry and Security</SUBAGY> <CFR>15 CFR Part 744</CFR> <DEPDOC>[Docket No. 241004-0262]</DEPDOC> <RIN>RIN 0694-AJ91</RIN> <SUBJECT>Revisions to the Unverified List</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 eight persons to the Unverified List (UVL). Of the eight persons being added, three are under the destination of China, People's Republic of (China); two are under the destination of Germany; one is under the destination of Pakistan; and two are under the destination of Türkiye. BIS is also amending the EAR by removing two persons from the UVL. Of the two persons being removed, one is under the destination of Saudi Arabia, and the other is under the destination of China. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This rule is effective October 16, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Deniz Muslu, 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> The Unverified List (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 any number of reasons why these 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 responses 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; an inability to confirm <E T="03">bona fides</E> also indicates a risk that such items 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). 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, reexporters, and transferors to obtain (and maintain a record of) a UVL statement from a party or parties to a transaction who are listed on the UVL before proceeding with exports, reexports, and transfers (in-country) to such persons, when the items to be exported, reexported or transferred (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 where 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 eight 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 eight persons located in the following destinations to the UVL: Hengye Technology Co., Ltd.; Skytop Electronics Ltd.; and YXS Technology Co., Ltd., under the destination of China; Arabian Aviation Trade Group and Tiptrans Limited, under the destination of Germany; Marshal Traders, under the destination of Pakistan; and Pegasus Technic Services and Vast Polymers, Ambalaj Sanayi Ve Ticaret Limited Sirketi, under the destination of Türkiye. <HD SOURCE="HD2">Removals From the UVL</HD> This rule removes two persons from the UVL because BIS was able to verify their <E T="03">bona fides.</E> This rule removes the following two persons located in the following destinations from the UVL: Shengwei Technology Co., Ltd., under the destination of China; and Al Gihaz Co., Ltd. for Contracting and Trading, under the destination of Saudi Arabia. BIS is removing these persons pursuant to § 744.15(c)(2) of the EAR. <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. In particular, section 1753 of ECRA (50 U.S.C. 4812) authorizes the regulation of exports, reexports, and transfers (in-country) of items subject to U.S. jurisdiction. Further, section 1754(a)(1)-(16) of ECRA (50 U.S.C. 4813(a)(1)-(16)) authorizes, inter alia, requiring measures for compliance with the export controls established under ECRA; requiring and obtaining such information from U.S. persons and foreign persons as is necessary to carry out ECRA; apprising the public of changes in policy, regulations, and procedures; and any other action necessary to carry out ECRA that is not otherwise prohibited by law. Pursuant to section 1762(a) of ECRA (50 U.S.C. 4821(a)), these changes can be imposed in a final rule without prior notice and comment. <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 October 16, 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 November 15, 2024. Any such items not actually exported, reexported or transferred (in-country) before midnight on November 15, 2024 are subject to the requirements in § 744.15 of the EAR in accordance with this rule. <HD SOURCE="HD1">Executive Order Requirements</HD> Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distribute impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule is not a “significant regulatory action” under Executive Order 12866. This rule does not contain policies with federalism implications as that term is defined under Executive Order 13132. <HD SOURCE="HD1">Paperwork Reduction Act Requirements</HD> Notwithstanding any other provision of law, no person is required to respond to, nor is subject to a penalty for failure to comply with, a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 <E T="03">et seq.</E> ) (PRA), unless that collection of information displays a currently val ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 18k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━