BIS Adds 60 New Parties To The Entity List

Today, the Commerce Department’s Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) (15 C.F.R. Parts 730 – 774) by adding sixty (60) parties from China, France, Hong Kong, Indonesia, Malaysia, Oman, Pakistan, Russia, Switzerland and the United Arab Emirates to the Entity List for the following reasons—

• Attempted diversion of controlled U.S.-origin aircraft parts to Iran in violation of the U.S. sanctions on Iran;
• Contribution to unsafeguarded nuclear activities and missile proliferation activities;
• Falsifying information submitted in support of BIS license applications in order to divert U.S.-origin items to Iran without the requires authorization;
• Attempted exports, reexports or in-country transfers of items intended for military end-use activities in China;
• Involvement with the Russian military and Russia’s chemical weapons and biological weapons programs;
• Attempted acquisition of U.S.-origin items for a person on the Entity List in support of China’s military;
• Establishment of new affiliates by an existing Entity List party (i.e., the companies were created to continue the parent company’s proliferation activities); or,
• Enabling China to reclaim and militarize disputed outposts in the South China Sea (e.g., reclaiming land at Mischief Reef which is part of the Philippines, etc.).

Individuals and parties are designated on the Entity List if they are found to be involved in (or pose a significant risk of being involved in) activities that are contrary to U.S. national security or foreign policy interests.

U.S. persons are prohibited from exporting, reexporting or transferring in-country any commodities, software or technology that are subject to the EAR to parties on the Entity List without a license from the BIS. In addition, no license exceptions in Part 740 of the EAR are available for these newly added parties, and the applicable BIS licensing policy (i.e., case-by-case consideration or presumption of denial) varies depending upon the party in question. The Entity List can be found in Supplement No. 4 to Part 744 of the EAR.

The individuals and parties added to the Entity List today are as follows—

The BIS added a savings clause stating that affected shipments of items that were made under EAR license exceptions or that were exported/reexported without a license, which were en route aboard a carrier to a port of export or reexport on August 27, 2020, are authorized to continue to their destinations under the previous authorizations (i.e., license exception or NLR). See 85 Federal Register 52898 (August 27, 2020) for further details.

Many companies rely on automated solutions for screening international orders and new customers against the U.S. restricted parties lists, including the Entity List—these solutions interface with companies’ ERP systems and automatically screen transactions against the most current versions of the lists. They are updated rapidly whenever the restricted parties lists are modified. However, should a company have any concerns, it is recommended that they contact their screening solution providers to confirm that their systems have been updated to take into account today’s Entity List changes. In addition, the website for the online Consolidated Screening List (CSL) currently states that it is—

…[U]pdated automatically every day at 5:00 AM EST/EDT. The CSL pulls updates of the lists detailed below from each of the sourcing federal agencies. It is the responsibility of the federal agency to make available updated file(s) in order for the CSL to be up-to-date. 

The CSL can be found at: https://www.trade.gov/consolidated-screening-list.