Note, however, that BIS does not treat the shipment of items via official diplomatic pouch to an embassy or consulate in a third country (host country) as a transaction covered by the destination-based licensing requirements set forth in the EAR. So long as the items remain within the ownership and control of the embassy or consulate in the host country, no license is required under the EAR. The items may also be returned to the home country via diplomatic pouch or shipped to other foreign embassies and consulates via diplomatic pouch without authorization from BIS. However, if the embassy or consulate resells or disposes of the items locally in the host country, licensing requirements set forth in the EAR for exports to the host country would be implicated. Similarly, reselling or disposing the items to end users outside of the host country would implicate reexport licensing requirements set forth in the EAR, to the extent the items are not shipped via diplomatic pouch.
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GOV also authorizes the export of certain items to a “diplomatic or consular mission” of a cooperating government for official use within the territory of a country in Country Group B (Supplement No. 1 to Part 740 of the EAR). Cooperating governments are those listed in Country Group A:1 (Supplement No. 1 to part 740 of the EAR) as well as the governments of Argentina, Austria, Finland, Hong Kong, Ireland, the Republic of Korea, New Zealand, Singapore, Sweden, Switzerland, Singapore, and Taiwan. For example, GOV would authorize certain exports to the French Embassy in India because France is a cooperating government and India is a Country Group B country.
GOV does not authorize, however, the export of items to cooperating government embassies located outside of cooperating government or Country Group B destinations. For example, an export to the French Embassy in Belarus would not be authorized under GOV because while France is a cooperating government, Belarus is not listed in Country Group B. Such exports may, however, be eligible for other License Exceptions, including License Exception CIV (Section 740.5 of the EAR) which authorizes certain exports for civilian use in Country Group D countries.
Items eligible to be exported or reexported pursuant to these provisions of License Exception GOV are described in Supplement No. 1 to Section 740.11 of the EAR.
• Rocket systems (including ballistic missile systems, space launch vehicles, and sounding rockets) or unmanned aerial vehicles (including cruise missile systems, target drones, and reconnaissance drones) capable of a range of at least 300 km for use in or by a country listed in Country Group D:4 (see Supplement No. 1 to Part 738 of the EAR)
• Any rocket system or unmanned aerial vehicles in a D:4 country where system characteristics or use are unknown
• Any rocket systems or unmanned aerial vehicles for the delivery of chemical, biological, or nuclear weapons to anywhere in the world, except by governmental programs for nuclear weapons delivery of the Nuclear Non-Proliferation Treaty Nuclear Weapons States that are also members of NATO
(i) The specific nature of the end use
(ii) The significance of the export in terms of its contribution to the design, development, production, or use of missiles
(iii) The capabilities and objective of the missile and space programs of the recipient country
(iv) The nonproliferation credentials of the importing country
(v) The types of assurances or guarantees against design, development, production, or use of missiles that are given in a particular case
(vi) The existence of a pre-existing contract
Yes. However, BIS considers that transactions of any nature with listed entities carry a "red flag" and recommends that U.S. companies proceed with caution with respect to such transactions. Note that the Entity List describes license requirements and policies for the export, reexport, and/or transfer (in-country) of items subject to the EAR only. Additionally, although many of the persons included on the Entity List are subject to policies of denial for the export, reexport, and/or transfer (in-country) of all items subject to the EAR, some are subject to policies and requirements that are narrower in scope (i.e., not all persons included on the Entity List are subject to license requirements for all items subject to the EAR, while others are subject to license requirements for all or some items listed on the Commerce Control List (CCL)). Be sure to review the licensing policy and requirements carefully.
As set forth in the answer to question 28, both BIS and other agencies in the U.S. Government maintain other lists of entities for which there are restrictions on doing business. In addition, the provisions of part 744 of the EAR, including § 744.6 of the EAR, apply to transactions regardless of whether the entity in question is listed on the Entity List or not.
Additionally, BIS recommends that exporters, reexporters, or persons transferring (in-country) items subject to the EAR review the U.S. Government’s list of proscribed persons to ensure that a proposed transaction does not violate other U. S. Government requirements.
Persons on the Entity List are subject to the licensing policy and requirements defined in their specific entries on the Entity List regardless of their location. BIS works to revise and correct the entries on the Entity List on a regular basis, in order to ensure that each entry reflects the most accurate and recent information for the person named in that entry. However, if your due diligence indicates that the person to whom you wish to export, reexport, or transfer (in-country) is designated on the Entity List, then, regardless of the address listed in the Entity List entry, you should follow the licensing requirements set forth in the Entity List for that person.
Yes; this process was articulated in BIS’s August revision of the EAR titled “Authorization to Impose License Requirements for Exports or Reexports to Entities Acting Contrary to the National Security or Foreign Policy Interests of the United States.”
As a result of the August rule, §744.16 of the EAR defines the procedures that allow a person listed on the Entity List to submit a written request to the End-User Review Committee (ERC) that its entry be removed or modified. The request must be made in English and the party must provide a basis for the removal or modification. After the ERC has reviewed the request and reached a decision, BIS’s Deputy Assistant Secretary for Export Administration will provide the decision in a written response to the requesting party. The decision communicated to the party by the Deputy Assistant Secretary is final. BIS will publish any modifications to, or removals from, the Entity List resulting from such appeals in the Federal Register. The timeframe for appeals is 30 calendar days after the ERC’s receipt of the appeal (note that BIS conducts an internal review of all appeals prior to referral to the ERC that may add to this timeframe).
Please note that if a party on the Entity List submits an appeal, it remains subject to the Entity List's licensing requirements while the appeal is being processed. In order for a party to be released from the additional licensing requirements imposed by being on the Entity List, two actions must occur: 1) the appeal must be approved by the ERC, and 2) a formal notice of the party’s removal from the Entity List must be published in the Federal Register.
Subsidiaries, parent companies, and sister companies are legally distinct from listed entities. Therefore, the licensing and other obligations imposed on a listed entity by virtue of its being listed do not per se apply to its subsidiaries, parent companies, sister companies, or other legally distinct affiliates that are not listed on the Entity List. If, however, such a company, or even an unaffiliated company, acts as an agent, a front, or a shell company for the listed entity in order to facilitate transactions that would not otherwise be permissible with the listed entity, then the company is likely violating, inter alia, General Prohibition 10, EAR section 764.2(b) (causing, aiding, or abetting a violation) and possibly other subsections of 764.2 as well.
Those who export, reexport, or transfer items subject to the EAR with knowledge that the items are destined to a subsidiary, sister, parent, or other affiliate of a listed entity are encouraged to take extra due diligence steps to ensure that (i) the items are not ultimately destined for the listed entity and (ii) the affiliate is a separate legal entity (as opposed to a branch or operating division of the listed entity). If one is uncertain whether a planned transaction involving an actor with some relationship to a listed entity would be affected by the obligations pertaining to the listed entity, one may seek an advisory opinion from BIS pursuant to section 748.3.
BIS does not prohibit the sale or transfer of commodities subject to the EAR to persons on the Entity List if those persons are in the United States. However, the release of software source code or technology in the United States to a person on the Entity List or a person employed by or representing an organization on the Entity List may require a license as a “deemed export.” Should such a person depart the United States, a license will be required for the export of commodities and software (other than software source code) consistent with the entity’s listing on the Entity List. In addition, if at the time of the domestic sale or transfer in the United States, the transferor or seller had “knowledge” that the person on the Entity List or the person employed by or representing the organization on the Entity List intended to export the item(s) out of the United States without obtaining BIS authorization, a violation of the EAR under §736.2(b)(10) (General Prohibition Ten) and §764.2(e) may occur. BIS recommends that exporters exercise a high level of due diligence prior to entering into a transaction with any person on the Entity List, regardless of where that person is located. Note also that the release outside of the United States of software source code or technology subject to the EAR to a person on the Entity List or a person employed by or representing an organization on the Entity List may require a license or other EAR authorization prior to the “deemed reexport” of that software source code or technology.
The Bureau of Industry & Security’s jurisdiction is limited to the export, reexport and transfer (in-country) of items subject to the Export Administration Regulations (EAR) and the placement of a person on the Entity List imposes supplemental license requirements and license application review policies on the shipment of items subject to the EAR to that person. Although a person’s inclusion on the Entity List does not create a prohibition on purchases from that person, companies contemplating such purchases should note that BIS suggests that there are red flags on the purchase of U.S.-origin items and other items subject to the EAR from Entity List persons. Companies need to exercise additional due diligence to ensure that the items desired for purchase, should they be U.S. origin or otherwise subject to the EAR, were sent to the company listed on the Entity List with the appropriate authorization. Anyone seeking to purchase items from a company listed on the Entity List should note that the Entity List is made up of entities about whom the United States Government found there to be reasonable cause to believe that the entity has been involved, is involved, or poses a significant risk of being or becoming involved in activities that are contrary to the national security or foreign policy interests of the U.S. government, and those acting on behalf of such entities.
A student’s enrollment at a university included on the Entity List is a “red flag” which requires exporters undertake an additional level of due diligence before proceeding with any such transaction. However, a student is not an integral part of the university (e.g., does not have fiduciary duty to from the university in the same manner that as an employee, officer, trustee, or person in a similar position in the university would) in which he/she is enrolled and therefore BIS does not include them in the licensing requirements and policy specific to the university. With the caveat of the red flag mentioned above, BIS advises exporters to treat exports, reexports, and transfers (in country) to students as shipments to the country of which the student is a citizen.
The Departments of Commerce, State, and the Treasury maintain separate lists for the programs each agency administers because these programs have different purposes and are regulated under different authorities.
BIS maintains three lists: the Denied Persons List (DPL); the Unverified List; and the Entity List. The Entity List is described in detail in these FAQs and can be found here.
The DPL lists persons that have been denied export privileges; any dealings with persons listed on the DPL that violate the terms of their denial order would be a violation of the EAR. The DPL can be found here.
The Unverified List is a list of parties that have not cooperated with BIS during post-shipment verification checks. The presence of a party on the Unverified List in a transaction is a “red flag” that must be resolved before proceeding with the transaction. The Unverified List can be found here.
The Departments of the Treasury and State maintain other lists that should be consulted before exporting, reexporting, or transferring item(s). These lists include the Specially Designated Nationals and Blocked Persons (SDN) List, the Debarred List, and the lists of persons subject to Nonproliferation Sanctions. You can find links to these lists .
Link to Success Flag
A consolidated version of all of the U.S. Government proscribed parties lists is available here.
The Entity List includes restrictions on exports, reexports, or transfers (in-country) to certain persons by reference, meaning that the EAR defines the licensing policy and requirements specific to such persons but does not necessarily include them as individual entries on the Entity List. These persons are designated in or pursuant to Executive Orders or other legal mechanisms. Examples of such persons include but are not limited to Specially Designated Global Terrorists (SDGTs), as referenced in §744.12 of the EAR, and Specially Designated Terrorists (SDTs), as referenced in §744.13 of the EAR.
In incorporating the lists maintained by other U.S. Government (USG) agencies by reference, BIS is clarifying the EAR licensing requirements and policies applicable to the entities on the other USG lists. BIS recommends that exporters, reexporters, or transferors in-country consult the other lists maintained by the USG when exporting, reexporting, and/or transferring (in-country) items since, in many cases, they will not be required to also seek separate authorization from BIS. Note, however, that in some cases an EAR authorization may still be required. See §§ 744.8, 744.12, 744.13, 744.14, 744.18, and 744.22 of the EAR for additional details. In other words, EAR license requirements supplement those of the other USG agencies.
This list is published in the IAEA’s Information Circular titled "Agreement between the Government of India and the International Atomic Energy Agency for the Application of Safeguards to Civilian Nuclear Facilities" (INFCIRC/754), which is available at the IAEA’s website (www.iaea.org). In this document there is an annex (the "List of Facilities Subject to Safeguards Under the Agreement Between the Government of India and The International Atomic Energy Agency for the Application of Safeguards to Civilian Nuclear Facilities") that contains the list of nuclear reactors (including power plants) and fuel fabrication facilities under IAEA safeguards. Please note that this list is updated regularly with the publication of documents titled "Agreement between the Government of India and the International Atomic Energy Agency for the Application of Safeguards to Civilian Nuclear Facilities: Addition to the List of Facilities Subject to Safeguards Under the Agreement" and that these updates are numbered as follows: INFCIRC/754/Add.1, INFCIRC/754/Add.2, INFCIRC/754/Add.3, etc. BIS recommends that exporters check the most recent version of the list on a regular basis by searching the IAEA’s website for "INFCIRC/754". As of November 18, , the most recent version of this document is INFCIRC/754/Add.4.
No. Items controlled on the Commerce Control List (Part 774 of the EAR) for missile technology (MT) or crime control (CC) reasons are not eligible to be authorized for shipment under Authorization VEU. Additionally, items exported under Authorization VEU may not be used for any activities described in Part 744 of the EAR. Accordingly, asserting that an item is being exported pursuant to Authorization VEU when it is destined for use in any of the activities described in Part 744 would constitute a violation of the EAR.
Further, the items eligible for shipment to each individual VEU are specified in the individual entries found in Supplement No. 7 to Part 748 of the EAR. These are the only items that may be shipped to the VEU under Authorization VEU. Note that within any VEU listing, certain items may be authorized for shipment to some but not all of a VEU’s eligible facilities.
As noted above, only specifically listed, eligible items may be shipped to a VEU pursuant to Authorization VEU. In accordance with relevant statutory requirements and pursuant to Section 748.15(c) of the EAR, BIS does not authorize items controlled for missile technology (MT) or crime control (CC) reasons under the VEU program. Additionally, pursuant to Section 748.15(d) of the EAR, items obtained under Authorization VEU may be used only for civil end-uses, and specifically not for any activities described in Part 744 of the EAR.
Finally, exports, reexports, and transfers (in-country) made under Authorization VEU are allowed only if the items’ end-user is a validated end-user. VEUs may only: a) use the received items at their approved facility(ies) as listed in Supplement No. 7 to Part 748; b) consume the items during use; and c) transfer or reexport the items only as authorized by BIS.
End-users in eligible destinations can apply directly to the Department of Commerce for VEU authorization status or exporters or reexporters may file applications on behalf of such end-users. Prospective VEUs must provide detailed information on how they will ensure that they are in compliance the requirements of the VEU program. Additional information may be requested by the U.S. Government while a VEU application is being reviewed.
Once an end-user applies to be a VEU, the End-User Review Committee, which is a committee composed of representatives from multiple U.S. Government agencies, reviews the application and determines:
BIS has prepared a VEU application template to assist entities requesting VEU authorization. Additionally, Supplement No. 8 to Part 748 of the EAR outlines the information required in requests for VEU authorization. Note that the U.S. Government may request additional information from a prospective VEU while a VEU application is being reviewed.
BIS encourages entities to submit draft VEU applications to [ protected]. BIS will review and provide comments on the draft application, and also will provide draft applications to the other members of the End-User Review Committee for review and comment, if requested by applicants.
Prospective VEUs must provide written certification to the U.S. Government that the items proposed for receipt under Authorization VEU will be used in accordance with VEU program restrictions, and must provide detailed information to verify compliance with the overall requirements of the VEU program (e.g., an internal compliance plan). Additionally, VEUs are often required to comply with conditions similar to those found in individual licenses, as well as to submit regular reports on their use of the items received under Authorization VEU to the U.S. Government.
Entities applying for qualification as a VEU must also agree to allow the U.S. Government to conduct inspections of the facility or facilities in which the U.S. origin items received under Authorization VEU will be used. These inspections are known as “on-site reviews,” and are similar to the “end-use checks” that the U.S. Government routinely conducts at facilities that have imported U.S.-origin items under individual licenses.
A.4. You (including the defense contractor in the Country Group A:5 country) do not need to obtain a prior consignee statement from the Country Group A:5 government. While License Exception STA requires a prior consignee statement from the defense contractor for export to the Country Group A:5 country, the subsequent transfer (in-country) from the defense contractor to the Country Group A:5 military does not require an additional authorization under the EAR. A transfer (in-country) for which no license is required does not require an EAR authorization. Therefore, since a prior consignee statement was provided by the defense contractor and the subsequent transfers (in-country) do not require an additional authorization, a separate prior consignee statement is not needed from the Country Group A:5 military or from any other party receiving the "600 series" item in-country prior to the Country Group A:5 military receiving the "600 series" item for its ultimate end use.
Consignees that provide the prior consignee statements should be aware that they are ultimately responsible for ensuring that the "600 series" item is provided to an end-user that is eligible to receive "600-series" items under License Exception STA. Thus, the consignee should take reasonable steps to assure that any parties who will handle the item understand and comply with this STA limitation (in other words, the consignee should take reasonable steps to put any such parties on notice). One potential approach for putting those other parties on notice could include communicating to all parties that the "600 series" item they are receiving was exported under License Exception STA for ultimate end use by the Country Group A:5 military and obtaining written commitments from those parties that they will comply with these requirements. Another potential approach for putting those other parties on notice may be through contractual liability clauses.
Another scenario where License Exception STA may be used for a transfer (in-country) would be if an EAR license exception were no longer available because the proposed particulars of a transaction have changed and it no longer meets the license exception’s terms and conditions. For example, if a Country Group A:5 government received a "600 series" item under License Exception GOV and then subsequently wanted or needed to transfer (in-country) that "600 series" item to a defense contractor or some other non-governmental party, License Exception STA could likely be used to authorize the transfer (in-country) as long as the item would eventually be for that Country Group A:5 government’s ultimate end use. In certain cases, other EAR License Exceptions may also be available to authorize such transfers (in-country), such as License Exceptions TMP or RPL.
For any item that is not a "part," "component," "accessory," "attachment" or "software," such as an "end item" or "material" ("end item" and "material" are defined in § 772.1 of the EAR) described in a paragraph that uses "specially designed," paragraph (a)(1) functions as the entire "specially designed" definition – meaning (a)(1) acts as the ‘catch’ and ‘release.’ For example, if the end item meets the criteria of (a)(1), it is "specially designed." If it does not meet the criteria of paragraph (a)(1), it is not "specially designed."
A.14: Yes, this is referred to informally as the review-paragraph-(b)-first track for analyzing "specially designed." As was noted in response to Specially Designed Q.12 above, if an item is NOT ‘caught,’ under (a), then there is no need to review paragraph (b) for "parts," "components," "accessories," "attachments," or "software." However, the converse also applies. If an item is ‘released’ under paragraph (b) (assuming you are not reviewing a decontrol that uses "specially designed"), then there is no need to review paragraph (a), because you have already determined the "part," "component," "accessory," "attachment," or "software" is ‘released’ from "specially designed." For example, assume you have a fastener you are trying to classify. A fastener is a "part" that is specified under paragraph (b)(2) of "specially designed" as not being "specially designed." Therefore, if you have a fastener, you simply can review paragraph (b)(2) and once you confirm a fastener is specified as one of the "parts" or minor "components" ‘released’ from "specially designed," your analysis of "specially designed" is done.
A.16: Yes, see paragraph (b)(1) of "specially designed." Paragraph (b)(1) specifies that "parts," "components," "accessories," "attachments," or "software" identified in such a CJ would not be "specially designed" on the CCL. In addition, in conducting your analysis of the CCL Order of Review for the "600 series," having a past CJ that identified the item as subject to the EAR, and that item was classified in an ECCN that did not end in -018 or was designated as EAR99 would mean under the CCL Order of Review, you would skip to Step 5 in your analysis of the CCL. This is because the new General Order No. 5 to Part 736 under paragraph (c) (Prior commodity jurisdiction determinations) specifies such items in past CJs are not classified in the "600 series."
Example 1
(Meets the ‘equivalent’ standard): A fuel pump used in AT-only controlled aircraft in "production" is modified for use in a military aircraft. The fuel pump has the same function, performance capabilities, but needed to be modified solely for fit purposes (to fit in an area of a military aircraft). No other changes to the fuel pump were made, such as for fuel flow.
Example 2
(Does NOT meet the ‘equivalent’ standard): A fuel pump used in AT-only aircraft in "production" is modified for use in a military aircraft. However, in addition to modifying the fuel pump for fit purposes (to fit in an area of a military aircraft), the fuel pump has been made of higher strength materials to allow it to pump at a higher pressure.
A.1: Yes. Absent such a determination, a foreign person may make a self-determination of an item’s jurisdictional and classification status. Indeed, a foreign person is obligated to know whether an item is subject to the ITAR or, if subject to the EAR, how it is classified before reexporting or transferring the item in order to ensure compliance with the ITAR’s and the EAR’s licensing and other obligations. The U.S. exporter is responsible for determining the jurisdictional and classification status of the items it is exporting. However, if reliable jurisdictional and classification information has not already been provided by another party, such as the original equipment manufacturer, then the foreign person may and, indeed, must make these determinations itself in order to avoid violating the ITAR or the EAR if it later reexports or retransfers the article or item. As a matter of due diligence, however, the foreign person should seek jurisdictional and classification information from the manufacturer of the items or the owner of the technology in question and resolve any potential differences in interpretation. If after reviewing the ITAR’s U.S. Munitions List (USML) and all relevant facts, doubt exists regarding whether the item is enumerated or otherwise described on the USML, the foreign person should request from DDTC a commodity jurisdiction determination pursuant to 22 C.F.R. § 120.4. If the item is clearly not enumerated or otherwise described on the USML and, after reviewing the EAR and all relevant facts, there is doubt regarding whether or where the item is enumerated or otherwise described on the EAR’s Commerce Control List, then the foreign person should request from the Department of Commerce’s Bureau of Industry and Security a commodity classification determination pursuant to 15 C.F.R. § 748.3.
A.5: The questioner is correct that "parts" made from castings are the easiest way to determine whether you are classifying a "part" compared to a "component." However, the definition of "part" also extends to other types of manufacturing processes where the commodity being created is a single unassembled element and, importantly, is not normally subject to disassembly without the destruction or the impairment of design use. These phrases from the definition of "part" help to refine the scope of what is considered a "part."
Must be a single element. For example, any commodity that includes assembly instructions or blue prints for connecting more than one single element, would take the commodity in question outside the scope of the definition of "part." In this example, the commodity would be considered an assembly, a term which under the EAR, is also referred to as a "component."
Must not normally be subject to disassembly without the destruction or the impairment of the commodity’s design use. Manufacturing methods where a "part" is made by welding or diffusion bonding that permanently combines together elements to make a single unassembled element would meet this criterion from the definition because any disassembly would clearly destroy the commodity or at a minimum impair its design use.
Anyone who considers a yacht to be the most enjoyable form of transport is certainly familiar with flags. These decorative indicators have been considered vital for communication on the open water since the dawn of the Age of Sail, whether in the form of a country flag proudly displayed, or flags used in semaphore (signalling with two flags), to share important information between vessels. While flags might make a regular appearance in your many sailing adventures, how much do you know about the country flags of the world? Just as the history of maritime flags is fascinating, so too are some of the intriguing details that make up the world's broader relationship with the flag. Read on to claim such knowledge as your own!
So, there you have it. A miscellaneous assortment of facts related to country flags of the world, that may come in handy the next time you find yourself at a pub quiz. Can you think of any fun facts that we missed?
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