03-12266. Addition of Persons to Unverified List-Guidance as to “Red Flags” Under Supplement No. 3 to 15 CFR Part 732

AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Notice.

SUMMARY:

On June 14, 2002, the Bureau of Industry and Security (“BIS”) published a notice in the Federal Register that set forth a list of persons in foreign countries who were parties to past export transactions where pre-license checks (“PLC”) or post-shipment verifications (“PSV”) could not be conducted for reasons outside the control of the U.S. Government (“Unverified List”). This 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, requiring heightened scrutiny by the exporter before proceeding with such a transaction. The notice also stated that, when warranted, BIS would add persons to the Unverified List. This notice adds Lucktrade International PTE Ltd. and Peluang Teguh which are located in Singapore, and Lucktrade International which is located in Hong Kong to the Unverified List.

DATES:

This notice is effective May 16, 2003.

FOR FURTHER INFORMATION CONTACT:

Thomas W. Andrukonis, Office of Enforcement Analysis, Bureau of Industry and Security, Telephone: [phone].

SUPPLEMENTARY INFORMATION:

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 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 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.

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). In a notice issued on June 14, 2002 (67 FR 40910), BIS set forth an Unverified List of certain foreign end-users and consignees involved in such transactions.

The June 14 notice also advised exporters that participation of a person on the Unverified List in a proposed transaction will be considered by BIS to raise a “red flag” under the “Know Your Customer” guidance set forth in Supplement No. 3 to 15 CFR part 732 of the EAR. Under that guidance, whenever there is a “red flag,” 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 the EAR.

The Federal Register notice further stated that BIS may periodically add persons to the Unverified List based on the criteria set forth above, and remove names of persons from the Unverified List when warranted. BIS has attempted, and was unable to conduct, a PSV in transactions involving the following persons:

Lucktrade International PTE Ltd., 35 Tannery Road #01-07 Tannery Block, Ruby Industrial Complex, Singapore 347740.

Peluag Teguh, 203 Henderson Road #09-05H, Henderson Industrial Park, Singapore.

Lucktrade International, P.O. Box 91150, Tsim Sha Tsui, Hong Kong.

This notice advises exporters that Lucktrade International PTE Ltd.; Pelaug Teguh; and Lucktrade International are added to the Unverified List, and 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 the EAR.

The Unverified List, as modified by this notice, is set forth below.

Dated: May 12, 2003.

Thomas W. Andrukonis,

Acting Assistant Secretary for Export Enforcement.

Unverified List

(as of May 16, 2003)

The Unverified List includes names and countries of foreign persons who in the past were parties to a transaction with respect to which BIS could not conduct a pre-license check (“PLC”) or a post-shipment verification (“PSV”) for reasons outside of the U.S. Government's control. Any transaction to which a listed person is a party will be deemed by BIS 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.

Name	Country	Last known address
Lucktrade International	Hong Kong Special Administrative Region	P.O. Box 91150, Tsim Sha Tsui, Hong Kong.
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 Station	People's Republic of China	39 Jixiang Road, Yanta District Xian, Shaanxi.
Yunma Aircraft Mfg.	People's Republic of China	Yaopu Anshun, Guizhou.
Civil Airport Construction Corporation	People's Republic of China	111 Bei Sihuan Str. East Chao Yang District, Beijing.
Power Test & Research Institute of Guangzhou.	People's Republic of China	No. 38 East Huangshi Road, Guangzhou.
Beijing San Zhong Electronic Equipment Engineer Co., Ltd	People's Republic of China	Hai Dian Fu Yuau Men Hao 1 Hao, Beijing.
Huabei Petroleum Administration Bureau Logging Company	People's Republic of China	South Yanshan Road Ren Qiu City, Hebei.
Daqing Production Logging Institute	People's Republic of China	No. 3 Fengshou Village Sartu District Daqing City, Heilongjiang.
Peluang Teguh	Singapore	203 Henderson Road, #09-05H, Henderson Industrial Park, Singapore.
Lucktrade International PTE Ltd	Singapore	35 Tannery Road, #01-07 Tannery Block, Ruby Industrial Complex, Singapore 347740.
Arrow Electronics Industries	United Arab Emirates	204 Arbift Tower, Benyas Road, Dubai.