BIS Adds 33 Chinese Entities to UVL List

The Bureau of Industry and Security added 33 Chinese entities to its Unverified List this week, including universities and companies operating in China's technology and electronics sectors. BIS hasn’t been able to verify the “legitimacy and reliability” of the entities through end-use checks, including their ability to responsibly receive controlled U.S. exports, the agency said in a notice. The UVL additions take effect Feb. 8

BIS suspended all export license exceptions for the companies, and exporters must obtain a statement from any party to the UVL before proceeding with certain exports, including for items not subject to license requirements. All exports, reexports and transfers that now require a license as a result of the increased export restrictions that were aboard a carrier to a port as of Feb. 8 may proceed to their destinations under the previous eligibility as long as the items have been exported before March 11, BIS said. Any items not exported before March 11 will be subject to the new UVL requirements.

The agency added the 33 entities because it said it couldn’t “verify their bona fides” to reliably act as parties to a transaction that involves controlled U.S. exports. “For reasons outside the U.S. Government’s control,” BIS said, it couldn’t “satisfactorily” complete end-use checks on transactions involving the entities, including ones that involved items subject to the Export Administration Regulations.

BIS said it sometimes can’t verify a company’s bona fides if the company won’t produce the items subject to the end-use check for “visual inspection” or provide “sufficient documentation or other evidence to confirm the disposition of the items.” Other times, the agency said, the company can’t “be found at the address indicated on the associated export documents,” or the host government agencies don’t “respond to requests to conduct end-use checks, prevent the scheduling of such checks, or refuse to schedule them in a timely manner.” Those red flags suggest the entity may present a risk of diverting controlled exports to prohibited end-users or for prohibited end-uses, BIS said.

Matthew Axelrod, BIS's assistant secretary for export enforcement, called end-use checks a "core principle" of the agency's export control system. The UVL additions "will assist U.S. exporters in conducting due diligence and assessing transaction risk, and signal to the [Chinese] government the importance of their cooperation in scheduling end-use checks," said Axelrod, who was confirmed by the Senate in December (see 2112200007 and 2201070006).

Separately, BIS made a minor technical change to the EAR. The agency changed the country name of “China” in the first column of the UVL to the “People’s Republic of China,” reflecting that usage in the Entity List and the Military End-User List.