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It is a list that specifies license requirements for transactions involving certain “listed” entities. The Entity List is in Supplement No. 4 to part 744 of the Export Administration Regulations (EAR) (15 C.F.R. Part 744, Supp. No. 4). The Entity List must be consulted in conjunction with other parts of the EAR which may impose additional license requirements.
The Entity List was established in February 1997 to inform the public of entities engaged in activities that impose a risk of diversion to the development of weapons of mass destruction or their means of delivery. Since then, in an effort to further U.S. foreign policy goals, the grounds for listing an entity on the Entity List have expanded to include certain entities sanctioned by the State Department.
Not in every case. BIS may require an export license for listed entities as stated in the “License Requirement” column of the Entity List. For example, with respect to certain entities, exports of all items subject to the EAR require a license, while for other entities the export of all items listed on the Commerce Control List (a classification other than EAR99) requires a license.
Very few exceptions are available. As set forth in Section 744.1(c) of the EAR, license exceptions are not available for exports or reexports to listed entities of specified items, apart from license exceptions for items identified in Section 740.2(a)(5) that are destined for listed Indian and Pakistani entities and intended to ensure the safety of civil aviation and safe operation of commercial passenger aircraft and in the case of entities added to the Entity List pursuant to §744.20, to the extent specified on the Entity List.
The removal of entities from the Entity List eliminates the license requirement in Supplement No. 4 to part 744 for exports and reexports of EAR99 items to those entities. It should be noted, however, that the removal of entities from the Entity List does not relieve exporters of their standard obligation to know their customers. Under part 744 of the EAR, an export license is required even when it would not otherwise be necessary, if an exporter knows, has reason to know, or is otherwise informed by BIS that the item will be used in activities related to nuclear, chemical, or biological weapons, or rocket systems and unmanned air vehicles as described in part 744. BIS urges the use of Supplement No. 3 to part 732 of the EAR, "BIS's 'Know Your Customer' Guidance and Red Flags," when exporting or reexporting.
For entries that identify types of end users i.e., nuclear reactor, fuel reprocessing, enrichment or heavy water production facilities or their collocated ammonia plants - if the intended end-user of an export is one of these types of facilities, then it is considered a listed entity.
A license for export to formerly-listed entities is no longer automatically required, even where a previous license application for the same item was denied. However, as explained above, if you know, have reason to know, or are informed that the item you now intend to export to the previously listed entity will be used in activities related to nuclear, chemical or biological weapons, or rocket systems and unmanned air vehicles, as described in part 744, a license continues to be required. Moreover, as also explained above, other parts of the EAR, which may require a license, must also be consulted.
In most cases, this type of export license application will be returned without action (RWA) unless information becomes available to BIS - such as by the applicant specifically describing a reason for which a license would otherwise be required (end-use for which a license is required by part 744). The applicant must disclose any such end-use that it knows of or has reason to know of, or about which it has been informed by BIS. BIS will review an application for the export or reexport of an EAR99 item to a previously listed entity for such uses under the license review polices set forth in part 744 of the EAR.
BIS evaluates license applications to any listed entity according to the policy stated in the “License Review Policy” column for that entity and any other license review polices that apply to the transaction because of the nature of the item, or the end-use. If there is more than one license requirement for a particular transaction, only one license application should be submitted, but BIS will evaluate it according to the licensing policies of all applicable license requirements.
Example:
If your planned transaction requires a license due to the Export Control Classification Number (ECCN) and destination and your proposed consignee is on the Entity List, BIS will evaluate your application based on the Commerce Control List licensing policy in part 742 of the EAR and the policy for the consignee stated in the Entity List. If either policy requires denial, your application will be denied.
Unlicensed exports to parties on the Entity List may constitute violations of the EAR, and subject violators to both criminal prosecution and administrative penalties assessed by BIS.
Parties which may have engaged in violations of the EAR are encouraged to voluntarily disclose those violations to BIS. BIS considers voluntary self disclosures (VSDs) as “great weight” mitigating factors when negotiating settlements of administrative penalty cases. In appropriate cases, fines and other administrative penalties may be significantly reduced. The procedures for filing a VSD may be found in part 764 of the EAR.