The Department of Commerce added another round of entities to the Entity List that is maintained by Bureau of Industry and Security (“BIS”). The September 22, 2020 final rule published in the Federal Register release noted here, Federal Register Notice 2020-18909, documented the addition of forty-seven (47) new entities spanning multiple countries; specifically Canada, China, Hong Kong, Iran, Malaysia, Oman, Pakistan, Thailand, Turkey, United Arab Emirates (UAE), and the United Kingdom. All of the entities (companies or individuals) are suspected to be ‘acting contrary to the foreign policy and national security interests of the United States.’
In recent months we have seen the additions to the Entity List of thirty-eight of Huawei Technologies non-U.S. affiliates from accessing items produced domestically and abroad containing U.S. technology and software; to the eleven (11) entities expressly in China for their participation in human rights violation and abuses based on the repression of the Muslim minority group in the Xinjiang Uyghur Autonomous Region (XUAR) of China, and now the latest round which involves a myriad of concerns for the U.S., from the diversion of U.S.-origin unmanned aerial vehicle parts to Iran, the support of nuclear-related activities, purported non-compliance of the Iranian Transaction and Sanctions Regulations, and the involvement of several countries to illegally purchase Bell 412 helicopters for eventual shipment to FARCO Aviation MRO, an company currently listed on the Entity List.
As your company’s designated Trade Compliance Officer, who is bobbing up and down in that sea with a floating compliance iceberg ahead of you, what should you be doing to protect your company?
- Send this BLOG out to all functional areas that have any touch with an international transaction, (you know all the usual suspects – sales/marketing, engineering, management, etc).
- Review your compliance procedures to ensure they meet the standards BIS expects in an Export Compliance Program. If they are outdated, now is the time to make sure you have updated them to reflect the expected requirements.
- Evaluate how your company is processing Restricted Party Screenings. Does the application provide you enough data to determine if there is a screening ‘Alert’ that must be addressed and resolved before a transaction can be released?
- Then, you know that compliance training you’ve been putting off? Now is the time to bring everyone together and reiterate the risks to your company if due diligence – end-use statements, denied party screenings, licensing determinations – are not followed.
- Lastly, if you have shipments in transit on a carrier prior to the September 22nd update, that shipment may proceed to its destination under an approved license exception or without a license (an export or re-export released as No License Required (NLR)). Shipments made after that date will be subject to the conditions of the final rule.
Always remember if your company has questions needs compliance assistance, now is the time to claim your free, no-hassle consultation today!
Beverly Demma is a Sr. Consultant for Export Solutions -- a full-service consulting firm specializing in U.S. import and export regulations.