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. 250416-0068]</DEPDOC> <RIN>RIN 0694-AK06</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 18 persons to the Unverified List (UVL). Of the 18 persons being added: five are under the destination of China, People's Republic of (China); six are under the destination of Finland; three are under the destination of Türkiye; two are under the destination of Kazakhstan; one is under the destination of Italy; and one is under the destination of the United Kingdom. BIS is also amending the EAR by removing five persons from the UVL. Of the five persons being removed, three are under the destination of China and two are under the destination of the United Arab Emirates. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This rule is effective: April 25, 2025. </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 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 of 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 agency fails to respond to requests to conduct end-use checks, undertakes actions preventing the scheduling of such checks, or refuses 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 a 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> Pursuant to § 744.15(c) of the EAR, this rule adds 18 persons to the UVL by amending supplement no. 6 to part 744 of the EAR to include their names and addresses. This final rule implements the decision to add the following 18 persons located in the following destinations to the UVL: • Arctic Star Co., Ltd.; Henixio Aviation Co., Ltd.; Shusum Construction Ltd.; Sino-World International Co., Ltd.; and Vauxhall International Co., Ltd., under the destination of China; • Buran TMI; Finland Multi Center FMC OY; Finnalliance OY; Inmargo OY; Karjalan Puutyo; and MM Cargo OY, under the destination of Finland; • Euro Servizi Elettromeccanici Industriali SEI., under the destination of Italy; • EltexAlatau and Inter-Traid Electro, under the destination of Kazakhstan; • Bagil Havacilik, Basak Traktor, and Ozkanlar Grup Makine AS, under the destination of Türkiye; and • Identiparts Ltd., under the destination of the United Kingdom. <HD SOURCE="HD2">Removals From the UVL</HD> This rule removes a total of five persons from the UVL by amending supplement no. 6 to part 744 of the EAR. The following four persons located in the following destinations are removed from the UVL because BIS was able to verify their <E T="03">bona fides:</E> Bada Group Hong Kong Corporation, Limited and PNC Systems (Jiangsu) Co., Ltd. under the destination of China; and Lavender General Trading and Sea Prince Logistics LLC under the destination of the United Arab Emirates. BIS is removing these four persons pursuant to § 744.15(c)(2) of the EAR. On October 23, 2024, in the final rule “Addition of Entities, Revision of an Entry, and Removal of Entries on the Entity List”, BIS added “Small Leopard Electronics Co., Ltd.” under the destination of China to the Entity List (89 FR 84460). Therefore, as a conforming change, this final rule also removes “Small Leopard Electronics Co., Ltd.”, under the destination of China, from the UVL. <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, § 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, § 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 § 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, by April 25, 2025, 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 May 27, 2025. Any such items not actually exported, reexported or transferred (in-country) before midnight on May 27, 2025 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 of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits ( ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 23k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━