2024-01253. Removals From the Unverified List

AGENCY:

Bureau of Industry and Security, Department of Commerce.

ACTION:

Final rule.

SUMMARY:

The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by removing three persons, including one under the destination of Canada, one under the destination of People's Republic of China (China), and one under the destination of the United Arab Emirates, from the Unverified List (UVL) because BIS was able to verify their bona fides.

DATES:

This rule is effective on January 19, 2024.

FOR FURTHER INFORMATION CONTACT:

Kevin J. Kurland, Deputy Assistant Secretary for Export Enforcement, Phone: [phone] or by email at [e-mail].

SUPPLEMENTARY INFORMATION:

Background

The UVL, found in supplement no. 6 to part 744 of the EAR (15 CFR parts 730–774), contains the names and addresses of foreign persons who are or have been parties to a transaction, as described in § 748.5 of the EAR, involving the export, reexport, or transfer (in-country) of items subject to the EAR. These foreign persons are added to the UVL because BIS or federal officials acting on BIS's behalf were unable to verify their bona fides ( i.e., legitimacy and reliability relating to the end-use and end user of items subject to the EAR) through an end-use check. These checks, such as a pre-license check (PLC) or a post-shipment verification (PSV), cannot be completed satisfactorily for reasons outside the U.S. Government's control.

As set forth in the EAR, there are any number of reasons why these checks cannot be completed to the satisfaction of the U.S. Government. Section 744.15(c)(1) of the EAR provides illustrative examples of those circumstances, including reasons unrelated to the cooperation of the foreign party subject to the end-use check. Such examples include: (i) During the conduct of an end-use check, the subject of the check is unable to demonstrate the disposition of items subject to the EAR; (ii) The existence or authenticity of the subject of an end-use check cannot be verified ( e.g., the subject of the check cannot be located or contacted); (iii) Lack of cooperation by the host government authority prevents an end-use check from being conducted.

BIS's inability to confirm the bona fides of foreign persons subject to end-use checks raises concerns about the suitability of such persons as participants in future exports, reexports, or transfers (in-country) of items subject to the EAR; it also indicates a risk that such items may be diverted to prohibited end-uses and/or end-users. Under such circumstances, there may not be sufficient information to add the foreign person at issue to the Entity List under § 744.11 of the EAR. Therefore, BIS may add the foreign person to the UVL.

As provided in § 740.2(a)(17) of the EAR, the use of license exceptions for exports, reexports, and transfers (in-country) involving a party or parties to the transaction who are listed on the UVL is suspended. Additionally, under § 744.15(b) of the EAR, there is a requirement for exporters, reexporters, and transferors to obtain (and maintain a record of) a UVL statement from a party or parties to the transaction who are listed on the UVL before proceeding with exports, reexports, and transfers (in-country) to such persons, when the exports, reexports and transfers (in-country) are not subject to a license requirement. Finally, pursuant to § 758.1(b)(8), Electronic Export Information (EEI) must be filed in the Automated Export System (AES) for all exports of tangible items subject to the EAR where any party to the transaction, as described in § 748.5(d) through (f), is listed on the UVL.

Requests for the removal of a UVL entry must be made in accordance with § 744.15(d) of the EAR. Decisions regarding the removal or modification of a UVL entry will be made by the Deputy Assistant Secretary for Export Enforcement, based on a demonstration by the listed person of their bona fides.

Removals From the UVL

This final rule removes three persons from the UVL because BIS was able to verify their bona fides. This rule removes “Skymount Drones” under the destination of Canada, “Plexus (Xiamen) Co., Ltd.,” under the destination of China, and “Delma Industrial Supply & Marine Services” under the destination of the United Arab Emirates. BIS is removing these three persons pursuant to § 744.15(c)(2) of the EAR.

Rulemaking Requirements

Executive Order Requirements

Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distribute impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule has been deemed not significant for purposes of Executive Order 12866.

This rule does not contain policies with Federalism implications as that term is defined under Executive Order 13132.

Paperwork Reduction Act Requirements

Notwithstanding any other provision of law, no person is required to respond to, nor is subject to a penalty for failure to comply with, a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number.

The UVL additions contain collections of information approved by OMB under the following control numbers:

• OMB Control Number 0694–0088—Simple Network Application Process and Multipurpose Application Form
• OMB Control Number 0694–0122—Miscellaneous Licensing Responsibilities and Enforcement
• OMB Control Number 0694–0134—Entity List and Unverified List Requests,
• OMB Control Number 0694–0137—License Exemptions and Exclusions.

BIS believes that the overall increases in burdens and costs will be minimal and will fall within the already approved amounts for these existing collections. Additional information regarding these collections of information—including all background materials—can be found at https://www.reginfo.gov/​public/​do/​PRAMain by using the search function to enter either the title of the collection or the OMB Control Number.

Administrative Procedure Act and Regulatory Flexibility Act Requirements

Pursuant to Section 1762 of ECRA (50 U.S.C. 4821), this action is exempt from the Administrative Procedure Act (5 U.S.C. 553) requirements for notice of proposed rulemaking and opportunity for public participation.

Further, no other law requires notice of proposed rulemaking or opportunity for public comment for this final rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required under the Administrative Procedure Act or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable.

List of Subjects in 15 CFR Part 744

• Exports
• Reporting and recordkeeping requirements
• Terrorism

Accordingly, part 744 of the Export Administration Regulations (15 CFR parts 730 through 774) is amended as follows:

PART 744—END-USE AND END-USER CONTROLS

1. The authority citation for 15 CFR part 744 continues to read as follows:

Authority: 50 U.S.C. 4801–4852; 50 U.S.C. 4601 et seq.;50 U.S.C. 1701 et seq.;22 U.S.C. 3201 et seq.;42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.;22 U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice of November 8, 2022, 87 FR 68015, 3 CFR, 2022 Comp., p. 563; Notice of September 7, 2023, 88 FR 62439 (September 11, 2023).

2. Supplement No. 6 to Part 744 is amended:

a. Under CANADA by removing the entry for “Skymount Drones,”

b. Under CHINA, PEOPLE'S REPUBLIC OF, by removing the entry for “Plexus (Xiamen) Co., Ltd.,” and

c. Under UNITED ARAB EMIRATES by removing the entry for “Delma Industrial Supply & Marine Services.”

Thea D. Rozman Kendler,

Assistant Secretary for Export Administration.