[Federal Register: July 16, 2004 (Volume 69, Number 136)]
[Notices]
[Page 42652-42654]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16jy04-30]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
[Docket No. 040706200-4200-01]
Addition of Persons to the Unverified List, Guidance To Exporters
as to ``Red Flags,'' and Criteria for Listing of Unverified Persons in
Foreign Countries
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Notice.
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SUMMARY: On June 14, 2002, the Bureau of Industry and Security
(``BIS'') published a notice in the Federal Register establishing a
list of persons in foreign countries who were parties to past export
transactions where pre-license checks or post-shipment verifications
could not be conducted for reasons outside the control of the U.S.
Government (``Unverified List''). See 67 FR 40910. That notice also
advised exporters that the involvement of a listed person as a party to
a proposed transaction constitutes a ``red flag'' as described in the
guidance set forth in Supplement No. 3 to 15 CFR part 732. Under that
guidance, the ``red flag'' requires heightened scrutiny by the exporter
(and others involved in the transaction) before proceeding with a
transaction in which a listed person is a party. Since that time, BIS
has issued subsequent notices that added persons to and removed them
from the Unverified List, as circumstances warranted. This notice
advises exporters that the Unverified List will now also include
persons in foreign countries in situations where BIS is not able to
verify the existence or authenticity of the end user, intermediate
consignee, ultimate consignee, or other party to an export transaction.
This notice also adds five persons to the Unverified List and advises
exporters that the involvement of these persons as a party to a
proposed transaction constitutes a ``red flag.''
DATES: This notice is effective July 16, 2004.
FOR FURTHER INFORMATION CONTACT: Thomas W. Andrukonis, Office of
Enforcement Analysis, Bureau of Industry and Security, Telephone: (202)
482-4255.
SUPPLEMENTARY INFORMATION:
Background
In administering export controls under the Export Administration
Regulations (15 CFR parts 730 to 774) (EAR), BIS carries out a number
of preventive enforcement activities with respect to individual export
transactions. Such activities are intended to assess diversion risks,
identify potential violations, verify end-uses, and determine the
suitability of end-users to receive U.S. commodities or technology. In
carrying out these activities, BIS officials, or officials of other
federal agencies acting on BIS's behalf, selectively conduct pre-
license checks (``PLCs'') to verify the bona fides of the transaction
and the suitability of the end-user or ultimate consignee. In addition,
such officials sometimes carry out post-shipment verifications
(``PSVs'') to ensure that U.S. exports have actually been delivered to
the authorized end-user, are being used in a manner consistent with the
terms of a license or license exception, and are otherwise consistent
with the EAR.
A. Inclusion of Persons on the Unverified List
In certain instances BIS officials, or other federal officials
acting on BIS's behalf, have been unable to perform a PLC or PSV with
respect to certain export control transactions, for reasons outside the
control of the U.S. Government (including a lack of cooperation by the
host government authority, the end-user, or the ultimate consignee). As
a result, certain foreign end-users and consignees involved in such
transactions have been listed on the Unverified List.
This notice advises exporters and other persons that the Unverified
List will now also include persons involved in export transactions
where BIS has not been able to verify the existence or authenticity of
the end user, intermediate consignee, ultimate consignee, or other
party to an export transaction. This could include situations where the
end-users or consignees are merely post-office boxes, drop shipment
points, or front companies.
The inability of BIS to verify the nature of the activities, or
suitability of any end-user or consignee involved in an export
transaction can raise concerns about the bona fides of such person, and
that person's suitability for participation in future transactions
subject to the EAR. Accordingly, BIS continues to advise the exporting
community that the participation of a person on the Unverified List in
any proposed
[[Page 42653]]
transaction will be considered by BIS to raise a ``red flag'' for
purposes of the ``Know Your Customer'' guidance set forth in Supplement
No. 3 to 15 CFR part 732. Under that guidance, whenever there is a
``red flag,'' exporters and other persons have an affirmative duty to
inquire, verify, or otherwise substantiate the proposed transaction to
satisfy themselves that the transaction does not involve a
proliferation activity prohibited by part 744, and does not violate
other provisions of the EAR.
The listing of a person on the Unverified List does not equate to a
licensing requirement such as that imposed on persons included on the
Entity List in 15 CFR part 744. If an exporter or other person involved
in the transaction is satisfied that the transaction does not involve a
proliferation activity and does not violate any other provision of the
EAR, the exporter may proceed with the transaction notwithstanding the
inclusion of the person on the Unverified List. If an exporter or other
person involved in a transaction continues to have reasons for concern
after the inquiry, that person should refrain from such transaction or
submit all relevant information to BIS in the form of an application
for a license or a request for an advisory opinion. Periodically, BIS
will add persons to the Unverified List based on the criteria set forth
above, and remove the names of persons from the Unverified List when
warranted. Moreover, BIS may add to the Unverified List names of
persons that BIS discovers are affiliated with a person on the
Unverified List by virtue of ownership, control, position of
responsibility, or other affiliation or connection in the conduct of
trade or business. Persons on the Unverified List may request that BIS
review their inclusion on the Unverified List by filing an appeal in
accordance with 15 CFR part 756.
B. Addition of New Entities on the Unverified List
This notice advises exporters and other persons that BIS has added
the following five entities to the Unverified List:
Jetpower Industrial Ltd, Room 311, 3rd Floor, Wing On Plaza, 62 Mody
Road,Tsim Sha Tsui East, Kowloon, Hong Kong Special Administrative
Region.
Onion Enterprises Ltd., Room 311, 3rd Floor, Wing On Plaza, 62 Mody
Road, Tsim Sha Tsui East, Kowloon, Hong Kong Special Administrative
Region.
Lucktrade International, Room 311, 3rd Floor, Wing On Plaza, 62 Mody
Road, Tsim Sha Tsui East, Kowloon, Hong Kong Special Administrative
Region.
Litchfield Co. Ltd., Room 311, 3rd Floor, Wing On Plaza, 62 Mody Road,
Tsim Sha Tsui East, Kowloon, Hong Kong Special Administrative Region.
Sunford Trading Ltd., Unit 2208, 22/F, 118 Connaught Road West, Hong
Kong Special Administrative Region.
This notice advises exporters that Jetpower International Ltd.,
Onion Enterprises Ltd, Litchfield Co. Ltd, and Sunford Trading Ltd are
added to the Unverified List, and that a second address has been added
for Lucktrade International in the Hong Kong Special Administrative
Region. A ``red flag'' now exists for transactions involving these
persons due to their inclusion on the Unverified List. As a result,
exporters have an affirmative duty to inquire, verify, or otherwise
substantiate the proposed transaction to satisfy themselves that the
transaction does not involve a proliferation activity prohibited in 15
CFR Part 744, and does not violate other provisions of the EAR.
The Unverified List, as modified by this notice, is set forth
below.
Julie L. Myers,
Assistant Secretary for Export Enforcement.
Unverified List (as of July 16, 2004)
The Unverified List includes names, countries, last known addresses
of foreign persons involved in export transactions with respect to
which: the Bureau of Industry and Security (``BIS'') could not conduct
a pre license check (``PLC'') or a post shipment verification (``PSV'')
for reasons outside the U.S. Government's control; and/or BIS was not
able to verify the existence or authenticity of the end user,
intermediate consignee, ultimate consignee or other party to an export
transaction. Any transaction to which a listed person is a party will
be deemed to raise a ``red flag'' with respect to such transaction
within the meaning of the guidance set forth in Supplement No. 3 to 15
CFR part 732. The red flag applies to the person on the Unverified List
regardless of where the person is located in the country included on
the list.
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Name Country Last known address
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Lucktrade International....... Hong Kong Special P.O. Box 91150, Tsim
Administrative Sha Tsui, Hong Kong.
Region.
Brilliant Intervest........... Malaysia......... 14-1, Persian 65C,
Jalan Pahang, Barat,
Kuala Lumpur, 53000.
Dee Communications M SDN. BHD. Malaysia......... G5/G6, Ground Floor,
Jin Gereja Johor
Bahru.
Shaanxi Telecom Measuring People's Republic 39 Jixiang Road,
Station. of China. Yanta District,
Xian, Shaanxi.
Yunma Aircraft Mfg............ People's Republic Yaopu, Anshun,
of China. Guizhou.
Civil Airport Construction People's Republic 111 Bei Sihuan Str.
Corporation. of China. East, Chao Yang
District, Beijing.
Power Test & Research People's Republic No. 38 East Huangshi
Institute of Guangzhou. of China. Road, Guangzhou.
Beijing San Zhong Electronic People's Republic Hai Dian Fu Yuau, Men
Equipment Engineer Co., Ltd. of China. Hao 1 Hao, Beijing.
Huabei Petroleum People's Republic South Yanshan Road,
Administration Bureau Logging of China. Ren Qiu City, Hebei.
Company.
Peluang Teguh................. Singapore........ 203 Henderson Road
09-05H,
Henderson Industrial
Park, Singapore.
Lucktrade International PTE Singapore........ 35 Tannery Road
Ltd. 01-07
Tannery Block, Ruby
Industrial Complex,
Singapore 347740.
Arrow Electronics Industries.. United Arab 204 Arbift Tower,
Emirates. Benyas Road, Dubai.
Jetpower Industrial Ltd....... Hong Kong Special Room 311, 3rd Floor,
Administrative Wing On Plaza, 62
Region. Mody Road, Tsim Sha
Tsui East, Kowloon.
Onion Enterprises Ltd......... Hong Kong Special Room 311, 3rd Floor,
Administrative Wing On Plaza, 62
Region. Mody Road, Tsim Sha
Tsui East, Kowloon.
Lucktrade International....... Hong Kong Special Room 311, 3rd Floor,
Administrative Wing On Plaza, 62
Region. Mody Road, Tsim Sha
Tsui East, Kowloon.
Litchfield Co. Ltd............ Hong Kong Special Room 311, 3rd Floor,
Administrative Wing On Plaza, 62
Region. Mody Road, Tsim Sha
Tsui East, Kowloon.
[[Page 42654]]
Sunford Trading Ltd........... Hong Kong Special Unit 2208, 22/F, 118
Administrative Connaught Road West.
Region.
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[FR Doc. 04-16143 Filed 7-15-04; 8:45 am]
BILLING CODE 3510-33-P