BIS Expands the Criteria for Its "Unverified List" and Adds Five Entities
The Bureau of Industry and Security (BIS) has issued a notice announcing that, effective July 16, 2004, it has expanded the criteria it uses for including entities on its Unverified List. In addition, BIS states that five Hong Kong entities have been added to the Unverified List.
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Criteria for Listing Entities on Unverified List is Expanded
In June 2002, BIS published its first Unverified List, a list of persons in foreign countries who were parties to past export transactions where pre-license checks (PLCs) or post-shipment verifications (PSVs) could not be conducted for reasons outside the control of the U.S. government. Since that time, BIS has issued subsequent notices that added persons to and removed them from the Unverified List, as circumstances warranted. (See ITT's Online Archives or 04/26/04 news, 04042635, for BP summary of the most recent BIS changes to the Unverified List.)
(Involvement of a person on the Unverified List as a party to a proposed transaction constitutes a red flag as described in the guidelines set forth in Supplement No. 3 to 15 CFR Part 732, requiring heightened scrutiny by the exporter etc. before proceeding with such a transaction.)
BIS now states that in addition to the criteria it originally used for including entities on its Unverified List, it will now also include persons in foreign countries involved in export transactions where BIS has not been able to verify the existence or authenticity of the end user, intermediate consignee, ultimate consignee, or other party to an export transaction. BIS states that this could include situations where the end-users or consignees are merely post-office boxes, drop shipment points, or front companies.
BIS states that its inability to verify the nature of the activities, or suitability of any end-user or consignee involved in an export transaction can raise concerns about the bona fides of such person, and that person's suitability for participation in future transactions subject to the Export Administration regulations (EAR).
BIS Adds Five Hong Kong Entities to Unverified List
In addition to expanding its criteria for the Unverified List, BIS states that the following five entities have been added to the Unverified List:
Jetpower Industrial Ltd. Room 311, 3rd Floor, Wing On Plaza, 62 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong.
Onion Enterprises Ltd., Room 311, 3rd Floor, Wing On Plaza, 62 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong.
Lucktrade International, Room 311, 3rd Floor, Wing On Plaza, 62 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong1.
Litchfield Co. Ltd., Room 311, 3rd Floor, Wing On Plaza, 62 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong.
Sunford Trading Ltd., Unit 2208, 22/F, 118 Connaught Road West, Hong Kong.
1This represents the addition of a second address for Lucktrade International. A Singapore address for Lucktrade International has been on the Unverified List since May 2003.
Unverified List Now Includes 17 Entities
As a result of these additions, the Unverified List now contains 6 Hong Kong entities, 2 Malaysian entities, 6 Chinese entities, 2 Singaporean entities, and 1 United Arab Emirates entity.
The BIS cautions that a "red flag" now exists for transactions involving these persons due to their inclusion on the Unverified List. As a result, exporters have an affirmative duty to inquire, verify, or otherwise substantiate the proposed transactions to satisfy themselves that the transaction does not involve a proliferation activity prohibited in 15 CFR Part 744, and does not violate the EAR.
BIS Contact - Thomas Andrukonis (202) 482-4255
BIS Notice (D/N 040706200-4200-01, FR Pub 07/16/04) available athttp://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-16143.pdf