Regulatory intelligence for US exporters

BIS Adds 6 With Ties to China, Russia to Entity List; Updates UVL

The Bureau of Industry and Security this week added six entities to the Entity List for either helping to train China’s military, evading U.S. government end-use checks or shipping export-controlled items to Russia. The agency also updated its Unverified List, adding 13 new parties and removing eight others, including one Russian company that it transferred to the Entity List earlier this year. Both rules took effect July 3.

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The Entity List additions include companies in China, South Africa, the United Arab Emirates and the U.K. They will be subject to license requirements for all items subject to the Export Administration Regulations, and licenses will be reviewed under a presumption of denial.

BIS Undersecretary Alan Estevez said several of the companies were added for their "roles in training military personnel and supporting unauthorized military advancements." He added that export restrictions "are crucial to prevent these entities from exploiting our most cutting-edge technologies against our national security interests.”

BIS said China-based Global Training Solutions Limited and Smartech Future Limited, South Africa-based Grace Air (Pty) Ltd., and U.K.-based Livingston Aerospace Ltd. have ties to the Test Flying Academy of South Africa, an entity the agency added to the Entity List last year for providing training to Chinese military pilots. BIS said the four companies have also provided training to China’s military forces using Western and NATO sources.

The rule also adds UAE-based Mega Fast Cargo LLC and Mega Technique General Trading to the Entity List because they “repeatedly engaged in dilatory or evasive conduct, including the provision of false, misleading, or incomplete information,” during BIS end-use checks. Mega Fast Cargo also has been involved in shipments of U.S.-origin items to Russia after Moscow invaded Ukraine in 2022, BIS said.

BIS also updated two existing Entity List entries by adding three aliases for China-based Tenco Technology Company Ltd. and adding an address for Russia-based Systems of Biological Synthesis.

All exports that now require a license as a result of this Entity List final rule but were aboard a carrier to a port as of July 3 may proceed to their destinations under the previous eligibility as long as the items are exported before Aug. 2, BIS said. Any items not exported before midnight Aug. 2 will require a license.

In a separate rule, BIS added 13 new companies to its Unverified List after the agency said it wasn’t able to verify their reliability in receiving export controlled items. They mostly include companies operating in the technology, electronics or logistics sectors of China, Cyprus, Kyrgyzstan, Turkey and the UAE.

The companies and parties aren’t subject to additional export license requirements but are no longer eligible for license exceptions, and all current exceptions will be suspended. Suppliers to those entities must also obtain a statement from the UVL party that certifies, among other things, that the party won’t use the shipment for any activity prohibited by the EAR. Exporters must also file Electronic Export Information in the Automated Export System for all exports of “tangible items” subject to the EAR if the transactions involve parties on the UVL.

If BIS is unable to complete an end-use check on those companies within 60 days, it can move them to the more restrictive Entity List (see 2212060059, 2211170069 and 2210070006).

The agency also removed six companies in China and one UAE company from the UVL after BIS was able to verify their “bona fides” in receiving export controlled items. The agency removed another company, Russia-based EFO Company Limited Liability Company, because BIS wasn’t able to verify its bona fides and transferred it to the Entity List in February (see 2402230035). BIS said the company has tried to supply U.S.-origin items for Russia’s military.

The agency also made several minor changes to the UVL, including one that removes the destination of Russia from the list because the UVL no longer includes any parties based in Russia. BIS also changed the name of Turkey to Turkiye in the UVL to “conform to the U.S. State Department’s recognition on January 9, 2023, of Turkiye’s official name.”

All exports that were removed from license exception eligibility and that now require a license as a result of the UVL changes but were aboard a carrier to a port as of July 3 may proceed to their destinations under the previous eligibility as long as the items are exported before Aug. 2, BIS said. Any items not exported before midnight Aug. 2 are subject to UVL requirements.