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Six Persons in Hong Kong, 37 in Mainland China Subject to Tighter U.S. Export Controls

The U.S. Department of Commerce’s Bureau of Industry and Security has issued a final rule that, effective 11 April, adds 50 foreign persons to the Unverified List because an end-use check could not be completed satisfactorily for reasons outside the U.S. government’s control. BIS is also removing five persons in Russia, three in mainland China, one in Finland and one in the United Arab Emirates from the list.

The new entries consist of 37 persons in mainland China, six in Hong Kong, four in the UAE, two in Malaysia and one in Indonesia. In addition, an existing entry for a Hong Kong person has been revised. This rule suspends licence exceptions for exports, re-exports and transfers (in-country) involving these persons. In addition, exporters, re-exporters and transferors of goods subject to the Export Administration Regulations but not requiring a licence to these persons must obtain (and keep a record of) a UVL statement from them before proceeding with the transaction.

The UVL contains the names and addresses of foreign persons who are or have been parties to a transaction involving the export, re-export or transfer (in-country) of items subject to the EAR whose bona fides (i.e., legitimacy and reliability relating to the end-use and end-user of items subject to the EAR) BIS has been unable to verify through an end-use check; e.g., the check could not be completed satisfactorily for reasons outside the U.S. government’s control, or during a check a recipient of items subject to the EAR was unable to produce them for visual inspection or provide sufficient documentation or other evidence to confirm their disposition. BIS may place persons on the UVL when there is insufficient evidence to place them on the Entity List.

Shipments (i) removed from licence exception eligibility or that are now subject to requirements in §744.15 of the EAR as a result of this rule, (ii) eligible for export, re-export or transfer (in-country) without a licence before this rule, and (iii) on dock for loading, on lighter, laden aboard an exporting carrier, or en route aboard a carrier to a port of export on 11 April, pursuant to actual orders, may proceed to that UVL-listed person under the previous licence exception eligibility or without a licence so long as they have been exported from the United States, re-exported or transferred (in-country) before 13 May. Any such items not actually exported, re-exported or transferred (in-country) before midnight on 13 May will be subject to the requirements in §744.15 of the EAR in accordance with this rule.

The UVL (available here) currently contains a total of 64 persons in Hong Kong and 138 persons in mainland China. Nineteen of the Hong Kong persons currently listed were added on 16 June 2014, nine were added on 29 January 2015, four were added on 7 October 2015, 25 were added on 21 June 2016, one was added on 17 May 2018, and six were added on 11 April 2019.

Any company that has been placed on the UVL and is seeking removal from the list should secure export controls counsel in the United States. Counsel can then help listed companies work with the DOC to provide any required information about the company, its products and partners to support their removal from the list.

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