The Bureau of Industry and Security's upcoming shift in its administrative enforcement policies could signal a more aggressive posture toward cracking down on illegal exports and may change how companies voluntarily disclose violations, a former BIS agent said. But some lawyers say the policies could represent a minor shift, and it may be too early to tell how they will affect compliance decisions.
BIS Unverified List
The BIS Unverified List is a list of entities subject to certain restrictions and additional compliance steps. Inclusion on the list is not punitive but rather an indication that the entity is ineligible to receive license exceptions, and exporters to those entities may need to submit certain Electronic Export Information in the Automated Export System.
China objected to the U.S. decision to add 33 Chinese entities to its Unverified List, it said in a Feb. 7 news release. The Bureau of Industry and Security made the additions, which included universities and companies operating in China's technology and electronics sectors, due to its inability to verify the reliability of the entities through end-use checks (see 2202070012). According to an unofficial translation, China's Ministry of Commerce said that the U.S. should immediately correct its perceived wrongdoing and return to mutual beneficial cooperation. MofCom characterized this action, along with the U.S. past export control moves, as tools of "political suppression and economic bullying." A BIS spokesperson dubbed its end-use checks a "core principle" of the agency's export control system.
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
The Bureau of Industry and Security will add 33 Chinese entities to its Unverified List this week, including a range of companies operating in China's technology and electronics sectors, it said in a notice released Feb. 7. BIS said it 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. All export license exceptions involving those parties will be suspended, and exporters must obtain a statement from any party listed on the UVL before proceeding with certain exports.
The Commerce Department published its fall 2021 regulatory agenda for the Bureau of Industry and Security, including a new mention of an export control rule for crime-control items and a rule that would reorganize provisions of the foreign direct product rule in federal regulations.
The Bureau of Industry and Security removed 40 entries and added 26 others to its Unverified List, the agency said in a final rule released Oct. 8. BIS removed the 40 entries -- located in China, Hong Kong, Indonesia and the United Arab Emirates -- after verifying their “legitimacy and reliability” relating to the end use of items subject to the Export Administration Regulations or because their companies are no longer “involved in U.S. exports.” BIS added the 26 others -- located in Armenia, Finland, Hong Kong, Germany, Pakistan, Turkey, the UAE, Mexico and China -- because it was unable to verify their “bona fides” through an end-use check. The changes take effect Oct. 9.