Revisions to the Unverified List

AGENCY:

Bureau of Industry and Security, Department of Commerce.

ACTION:

Final rule.

SUMMARY:

The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by adding 32 persons to the Unverified List (UVL). Of the 32 persons being added, one is under each of the following destinations: Bulgaria, Canada, Indonesia, Israel, Malaysia, Saudi Arabia, and Singapore; 14 are under the destination of China, two are under the destination of Germany, four are under the destination of Turkey, and five under the destination of the United Arab Emirates (UAE).

DATES:

This rule is effective: March 24, 2023.

FOR FURTHER INFORMATION CONTACT:

Linda Minsker, Director, Office of Enforcement Analysis, Phone: (202) 482-4255, Email: UVLRequest@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

Unverified List

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 bona fides ( i.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 (for example, 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; for example, 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 bona fides 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; this 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) 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 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 bona fides.

Additions to the UVL

This rule adds 32 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 32 persons located in the following destinations to the UVL: Under Bulgaria, Vera Yordanova. Under Canada, Skymount Drones. Under China, Airpart Consolidated Trading; ECOM International (HK) Co., Ltd.; Guangzhou Trusme Electronics Technology Co., Ltd.; HK P&W Industry Co. Ltd. (HKPW); Jet-Prop International Forwarding (HK) Ltd.; Kesina Services; Lightstar Technology Ltd.; Shandong Yuehaitongxin Keji Ltd.; Shengwei Technology Co., Ltd.; Small Leopard Electronics Co., Ltd.; Solar Way (Hong Kong) Ltd.; Sunway Technology Electronics Ltd.; USETA Tech (HK) Ltd.; and Winners Global Trading Co. Under Germany, In Time Forwarding & Courier e.K. and One Light GMBH. Under Indonesia, PT Smart Cakrawala Aviation. Under Israel, CNG Labs. Under Malaysia, Golden Gamp Sdn Bhd. Under Saudi Arabia, Al Gihaz Co., Ltd. for Contracting and Trading. Under Singapore, Smart Cakrawala Aviation. Under Turkey, BLC Havacilik Saglik Medikal Insaat Elektrik Ic ve Dis Ticaret; Odak Kimya; Piro Deniz Motorlari; and Üçüzler Lojistik Gida Tekstil. Under the UAE, Al Kabiru Trading LLC; BNS Hardware; Delma Industrial Supply & Marine Services; Diamond River General Trading; and Masoud Afghan General Trading.

Allied Governments Note

As a reminder, particularly with respect to partner countries, the Unverified List is not intended for use as a sanction against any particular country or government.

Export Control Reform Act of 2018

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.

Savings Clause

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 March 24, 2023, 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 April 22, 2023. Any such items not actually exported, reexported or transferred (in-country) before midnight on April 22, 2023, are subject to the requirements in § 744.15 of the EAR in accordance with this rule.

Rulemaking Requirements

Executive Order Requirements

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.

Paperwork Reduction Act Requirements

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 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number.

The UVL additions contain collections of information approved by OMB under the following control numbers:

• OMB Control Number 0694-0088—Simple Network Application Process and Multipurpose Application Form
• OMB Control Number 0694-0122—Miscellaneous Licensing Responsibilities and Enforcement
• OMB Control Number 0694-0134—Entity List and Unverified List Requests,
• OMB Control Number 0694-0137—License Exemptions and Exclusions.

BIS believes that the overall increases in burdens and costs will be minimal and will fall within the already approved amounts for these existing collections. Additional information regarding these collections of information—including all background materials—can be found at https://www.reginfo.gov/public/do/PRAMain by using the search function to enter either the title of the collection or the OMB Control Number.

Administrative Procedure Act and Regulatory Flexibility Act Requirements

Pursuant to Section 4821 of ECRA, this action is exempt from the Administrative Procedure Act (5 U.S.C. 553) requirements for notice of proposed rulemaking and opportunity for public participation.

Further, no other law requires notice of proposed rulemaking or opportunity for public comment for this final rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required under the Administrative Procedure Act or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable.

List of Subjects in 15 CFR Part 744

• Exports
• Reporting and recordkeeping requirements
• Terrorism

Accordingly, part 744 of the Export Administration Regulations (15 CFR parts 730 through 774) is amended as follows:

PART 744—CONTROL POLICY: END-USER AND END-USE BASED

1. The authority citation for part 744 is revised to read as follows:

Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice of September 19, 2022, 87 FR 57569 (September 21, 2022); Notice of November 8, 2022, 87 FR 68015 (November 10, 2022).

2. Supplement no. 6 to part 744 is amended:

a. By creating a country listing for BULGARIA;

b. Under BULGARIA by adding an entry, in alphabetical order, for the following entity: “Vera Yordanova;”

c. Under CANADA by adding an entry, in alphabetical order, for the following entity: “Skymount Drones;”

d. Under CHINA, by adding entries, in alphabetical order, for the following entities: “Airpart Consolidated Trading;” “ECOM International (HK) Co., Ltd.;” “Guangzhou Trusme Electronics Technology Co., Ltd.;” “HK P&W Industry Co. Ltd. (HKPW);” “Jet-Prop International Forwarding (HK) Ltd.;” “Kesina Services;” “Lightstar Technology Ltd.;” “Shandong Yuehaitongxin Keji Ltd.;” “Shengwei Technology Co., Ltd.;” “Small Leopard Electronics Co., Ltd.;” “Solar Way (Hong Kong) Ltd.;” “Sunway Technology Electronics Ltd.;” “USETA Tech (HK) Ltd.;” and “Winners Global Trading Co.;”

e. Under GERMANY by adding entries, in alphabetical order, for the following entities: “In Time Forwarding & Courier e.K;” and “One Light GMBH;”

f. By creating a country listing for INDONESIA;

g. Under INDONESIA by adding an entry, in alphabetical order, for the following entity: “PT Smart Cakrawala Aviation;”

h. By creating a country listing for ISRAEL;

i. Under ISRAEL by adding an entry, in alphabetical order, for the following entity: “CNG Labs;”

j. Under MALAYSIA by adding an entry, in alphabetical order, for the following entity: “Golden Gamp Sdn Bhd;”

k. By creating a country listing for SAUDI ARABIA;

l. Under SAUDI ARABIA by adding an entry, in alphabetical order, for the following entity: “Al Gihaz Co., Ltd. for Contracting and Trading;”

m. Under SINGAPORE by adding an entry, in alphabetical order, for the following entity: “Smart Cakrawala Aviation;”

n. Under TURKEY by adding entries, in alphabetical order, for the following entities: “BLC Havacilik Saglik Medikal Insaat Elektrik Ic ve Dis Ticaret;” “Odak Kimya; Piro Deniz Motorlari;” and “Üçüzler Lojistik Gida Tekstil” and

o. Under UNITED ARAB EMIRATES by adding entries, in alphabetical order, for the following entities: “Al Kabiru Trading LLC;” “BNS Hardware;” “Delma Industrial Supply & Marine Services;” “Diamond River General Trading;” and “Masoud Afghan General Trading.”

The additions read as follows:

SUPPLEMENT NO. 6 TO PART 744—UNVERIFIED LIST