Document ID: BIS-2011-0048-0001
Agency: bis
Document Type: Rule
Title: Addition of Certain Persons to Entity List and Implementation of Entity List Annual Review Changes
Posted Date: 2011-12-16T05:00Z

[Federal Register Volume 76, Number 242 (Friday, December 16, 2011)]
[Rules and Regulations]
[Pages 78146-78149]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32341]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 744

[Docket No. 111202715-1724-01]
RIN 0694-AF46

Addition of Certain Persons to the Entity List; and 
Implementation of Entity List Annual Review Changes

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: This rule amends the Export Administration Regulations (EAR) 
by adding two persons to the Entity List. The persons who are added to 
the Entity List have been determined by the U.S. Government to be 
acting contrary to the national security or foreign policy interests of 
the United States. These persons will be listed on the Entity List 
under the United Arab Emirates (U.A.E.).
    This rule also amends the Entity List on the basis of the annual 
review of the Entity List conducted by the End-User Review Committee 
(ERC). The ERC conducts the annual review to determine if any entries 
on the Entity List should be removed or modified.
    This rule removes two persons located in Singapore and two persons 
located in Taiwan on the basis of the annual review, and revises the 
entry concerning one person located in Malaysia to add an alternate 
address.
    The Entity List provides notice to the public that certain exports, 
reexports, and transfers (in-country) to entities identified on the 
Entity List require a license from the Bureau of Industry and Security 
(BIS) and that availability of

[[Page 78147]]

license exceptions in such transactions is limited.

DATES: Effective Date: This rule is effective December 16, 2011.

FOR FURTHER INFORMATION CONTACT: Karen Nies-Vogel, Chair, End-User 
Review Committee, Office of the Assistant Secretary, Export 
Administration, Bureau of Industry and Security, Department of 
Commerce, Phone: (202) 482-5991, Fax: (202) 482-3911, Email: 
ERC@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

    The Entity List (Supplement No. 4 to Part 744) provides notice to 
the public that certain exports, reexports, and transfers (in-country) 
to entities identified on the Entity List require a license from the 
Bureau of Industry and Security and that the availability of license 
exceptions in such transactions is limited. Entities are placed on the 
Entity List on the basis of certain sections of part 744 (Control 
Policy: End-User and End-Use Based) of the EAR.
    The ERC, composed of representatives of the Departments of Commerce 
(Chair), State, Defense, Energy and, when appropriate, the Treasury, 
makes all decisions regarding additions to, removals from, or other 
modifications to the Entity List. The ERC makes all decisions to add an 
entry to the Entity List by majority vote and all decisions to remove 
or modify an entry by unanimous vote.

ERC Entity List decisions

Additions to the Entity List

    This rule implements the decision of the ERC to add two persons to 
the Entity List on the basis of Section 744.11 (License requirements 
that apply to entities acting contrary to the national security or 
foreign policy interests of the United States) of the EAR. The two 
entries added to the Entity List consist of two persons located in the 
U.A.E.
    The ERC reviewed Section 744.11(b) (Criteria for revising the 
Entity List) in making the determination to add the two persons located 
in the U.A.E. to the Entity List. Under that paragraph, persons for 
which there is reasonable cause to believe, based on specific and 
articulable facts, that the persons have been involved, are involved, 
or pose a significant risk of being or becoming involved in, activities 
that are contrary to the national security or foreign policy interests 
of the United States and those acting on behalf of such persons may be 
added to the Entity List pursuant to Section 744.11. Paragraphs (b)(1)-
(b)(5) of Section 744.11 include an illustrative list of activities 
that could be contrary to the national security or foreign policy 
interests of the United States.
    The two persons in the U.A.E. being added to the Entity List under 
this rule have been determined by the ERC to be involved in activities 
that could be contrary to the national security or foreign policy 
interests of the United States. Specifically, BIS's Office of Export 
Enforcement is investigating the presence of Blue Coat internet 
filtering devices in Syria and has developed evidence regarding the 
parties involved in the transfer of these devices to Syria. Waseem 
Jawad, using the company name Infotec, a.k.a., Info Tech, ordered 
multiple Blue Coat SG9000-20 Proxy devices in December 2010 from a Blue 
Coat authorized distributor in the U.A.E. That authorized distributor 
in turn placed an order for the devices with Blue Coat. A December 2010 
email notification identified the end-user of the Blue Coat products 
for this order as the Ministry of Communication (National Telecom), Al 
Fadi Street, Baghdad, Iraq. In February 2011, the devices were shipped 
from the United States to the United Arab Emirates, and ownership was 
transferred to Waseem Jawad, Info Tech, RAKFTZ, U.A.E. Approximately 
three days later, the devices departed the U.A.E. for delivery to 
Syria. Several of these devices have been identified by serial number 
as the devices being used by the Syrian Telecommunications 
Establishment in Damascus, Syria. The investigation is ongoing and 
additional parties related to these transactions may be added to the 
Entity List in the future.
    For the two persons added to the Entity List, the ERC specified a 
license requirement for all items subject to the EAR and established a 
license application review policy of a presumption of denial. The 
license requirement applies to any transaction in which items are to be 
exported, reexported, or transferred (in-country) to such persons or in 
which such persons act as purchaser, intermediate consignee, ultimate 
consignee, or end-user. In addition, no license exceptions are 
available for exports, reexports, or transfers (in-country) to those 
persons being added to the Entity List.
    This final rule adds the following two persons under two entries to 
the Entity List:

United Arab Emirates

    (1) Infotec, a.k.a., Info Tech., Ras Al Khaimah Free Trade Zone 
(RAKFTZ), U.A.E.; and
    (2) Waseem Jawad, Ras Al Khaimah Free Trade Zone (RAKFTZ), U.A.E.; 
and P.O. Box: 25123, Dubai U.A.E.

Annual Review of the Entity List

    This rule also amends the Entity List on the basis of the annual 
review of the Entity List conducted by the ERC, in accordance with the 
procedures outlined in Supplement No. 5 to part 744 (Procedures for 
End-User Review Committee Entity List Decisions). The changes from the 
annual review of the Entity List that are approved by the ERC are 
implemented in stages as the ERC completes its review of entities 
listed under different destinations on the Entity List. This rule 
implements the results of the annual review for entities located in 
Malaysia, Singapore, and Taiwan.
A. Removals From the Entity List
    This rule removes four entities from the Entity List, which 
consists of two entities from Singapore and two entities from Taiwan. 
Specifically, this rule implements the decision of the ERC to remove 
two entities, Strive Components and Synoptics Imaging Systems Pte Ltd., 
located in Singapore, and two entities, Christine Sun and In-Tech 
Company, a.k.a., In-Tech Telecom, located in Taiwan, from the Entity 
List on the basis of the annual review of the Entity List, as follows:

Singapore

    (1) Strive Components, Block 10 Toa Payoh Industrial Park Lor 8 
01-1221, Singapore, 319062; and
    (2) Synoptics Imaging Systems Pte Ltd., 12 Lor Bakar Batu 
06-09, Singapore, 348745.

Taiwan

    (1) Christine Sun, 7th Floor, Number 17, Zhonghua Rd., Sec 2, 
Xinzhuang City, Taipei, Taiwan; and
    (2) In-Tech Company, a.k.a., In-Tech Telecom, Number 15, Lane 347, 
Jhongjheng Road, Sinjihuang City, Taipei, Taiwan, and 7th Floor, Number 
17, Zhonghua Rd., Sec 2, Xinzhuang City, Taipei, Taiwan.
    The removal of the above-referenced four entities from the Entity 
List eliminates the existing license requirements in Supplement No. 4 
to part 744 for exports, reexports and transfers (in-country) to the 
four entities. However, the removal of these four entities from the 
Entity List does not relieve persons of other obligations under part 
744 of the EAR or under other parts of the EAR. Neither the removal of 
an entity from the Entity List nor the removal of Entity List-based 
license requirements relieves persons of their obligations under 
General Prohibition 5 in section 736.2(b)(5) of the EAR which provides 
that, ``you may not, without a license, knowingly export

[[Page 78148]]

or reexport any item subject to the EAR to an end-user or end-use that 
is prohibited by part 744 of the EAR.'' Additionally these removals do 
not relieve persons of their obligation to apply for export, reexport 
or in-country transfer licenses required by other provisions of the 
EAR. BIS strongly urges the use of Supplement No. 3 to part 732 of the 
EAR, ``BIS's `Know Your Customer' Guidance and Red Flags,'' when 
persons are involved in transactions that are subject to the EAR.
B. Modifications to the Entity List
    On the basis of a decision made by the ERC during the annual 
review, this rule amends one entry currently on the Entity List under 
Malaysia by adding an alternate address, as follows:

Malaysia

    (1) VTE Industrial Automation SDN BHD, 97C, Jalan Kenari 23, 
Puchong Jaya, Puchong, Selangor, Malaysia; and 45-02, Jalan Kenari 19A, 
Puchong Jaya, 47100 Malaysia.

Savings Clause

    Shipments of items removed from eligibility for a License Exception 
or export or reexport without a license (NLR) as a result of this 
regulatory action that were on dock for loading, on lighter, laden 
aboard an exporting or reexporting carrier, or en route aboard a 
carrier to a port of export or reexport, on December 16, 2011, pursuant 
to actual orders for export or reexport to a foreign destination, may 
proceed to that destination under the previous eligibility for a 
License Exception or export or reexport without a license (NLR) so long 
as they are exported or reexported before January 3, 2012. Any such 
items not actually exported or reexported before midnight, on January 
3, 2012, require a license in accordance with the EAR.
    Although the Export Administration Act expired on August 20, 2001, 
the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 
2001 Comp., p. 783 (2002), as extended by the Notice of August 12, 
2011, 76 FR 50661 (August 16, 2011), has continued the Export 
Administration Regulations in effect under the International Emergency 
Economic Powers Act. BIS continues to carry out the provisions of the 
Export Administration Act, as appropriate and to the extent permitted 
by law, pursuant to Executive Order 13222.

Rulemaking Requirements

    1. 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, distributive 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 rule has been determined to be not significant for 
purposes of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to nor be 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. This regulation involves 
collections previously approved by the OMB under control numbers 0694-
0088, ``Multi-Purpose Application,'' which carries a burden hour 
estimate of 43.8 minutes for a manual or electronic submission. Total 
burden hours associated with the PRA and OMB control number 0694-0088 
are not expected to increase as a result of this rule. You may send 
comments regarding the collection of information associated with this 
rule, including suggestions for reducing the burden, to Jasmeet K. 
Seehra, Office of Management and Budget (OMB), by email to Jasmeet_K._Seehra@omb.eop.gov, or by fax to (202) 395-7285.
    3. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 13132.
    4. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring notice of proposed rulemaking, the opportunity for 
public comment and a delay in effective date are inapplicable because 
this regulation involves a military or foreign affairs function of the 
United States. (See 5 U.S.C. 553(a)(1)). BIS implements this rule to 
protect U.S. national security or foreign policy interests by 
preventing items from being exported, reexported, or transferred (in 
country) to the persons being added to the Entity List. If this rule 
were delayed to allow for notice and comment and a delay in effective 
date, then entities being added to the Entity List by this action would 
continue to be able to receive items without a license and to conduct 
activities contrary to the national security or foreign policy 
interests of the United States. In addition, because these parties may 
receive notice of the U.S. Government's intention to place these 
entities on the Entity List once a final rule was published it would 
create an incentive for these persons to either accelerate receiving 
items subject to the EAR to conduct activities that are contrary to the 
national security or foreign policy interests of the United States and/
or to take steps to set up additional aliases, change addresses, and 
take other steps to try to limit the impact of the listing on the 
Entity List once a final rule was published. Further, no other law 
requires that a notice of proposed rulemaking and an opportunity for 
public comment be given for this rule. Because a notice of proposed 
rulemaking and an opportunity for public comment are not required to be 
given for this rule by 5 U.S.C. 553, 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 Subject in 15 CFR Part 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

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

PART 744--[AMENDED]

0
1. The authority citation for 15 CFR part 744 continues to read as 
follows:

    Authority:  50 U.S.C. app. 2401 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. 12947, 60 FR 5079, 3 CFR, 
1995 Comp., p. 356; 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 January 13, 2011, 76 FR 3009, 
January 18, 2011; Notice of August 12, 2011, 76 FR 50661 (August 16, 
2011); Notice of November 9, 2011, 76 FR 70391 (November 9, 2011).

0
2. Supplement No. 4 to part 744 is amended:
0
(a) By revising under Malaysia, in alphabetical order, one Malaysian 
entity;
0
(b) By removing under Singapore, the two Singaporean entities: ``Strive 
Components, Block 10 Toa Payoh Industrial Park Lor 8 01-1221, 
Singapore, 319062'' and ``Synoptics Imaging Systems Pte Ltd., 12 Lor 
Bakar Batu 06-09, Singapore, 348745'';
0
(c) By removing under Taiwan, the two Taiwanese entities: ``Christine 
Sun,

[[Page 78149]]

7th Floor, Number 17, Zhonghua Rd., Sec 2, Xinzhuang City, Taipei, 
Taiwan'' and ``In-Tech Company, a.k.a., In-Tech Telecom, Number 15, 
Lane 347, Jhongjheng Road, Sinjihuang City, Taipei, Taiwan, and 7th 
Floor, Number 17, Zhonghua Rd., Sec 2, Xinzhuang City, Taipei, 
Taiwan''; and
0
(d) By adding under United Arab Emirates, in alphabetical order, two 
U.A.E. entities:
    The additions and revisions read as follows:

                                    Supplement No. 4 to Part 744--Entity List
----------------------------------------------------------------------------------------------------------------
                                                              License         License review   Federal  Register
            Country                      Entity             requirement           policy            citation
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
Malaysia
 
                                                  * * * * * * *
                                 VTE Industrial          For all items      Presumption of     73 FR 54503, 9/22/
                                  Automation SDN BHD,     subject to the     denial.            08.
                                  97C, Jalan Kenari 23,   EAR. (See Sec.                       76 FR [INSERT FR
                                  Puchong Jaya,           744.11 of the                         PAGE NUMBER] 12/
                                  Puchong, Selangor,      EAR)                                  16/11.
                                  Malaysia; and 45-02,
                                  Jalan Kenari 19A,
                                  Puchong Jaya, 47100
                                  Malaysia.
 
                                                  * * * * * * *
United Arab Emirates
 
                                                  * * * * * * *
                                 Infotec, a.k.a., Info   For all items      Presumption of     76 FR [INSERT FR
                                  Tech, Ras Al Khaimah    subject to the     denial             PAGE NUMBER] 12/
                                  Free Trade Zone         EAR. (See Sec.                        16/11.
                                  (RAKFTZ), U.A.E.        744.11 of the
                                                          EAR)
 
                                                  * * * * * * *
                                 Waseem Jawad, Ras Al    For all items      Presumption of     76 FR [INSERT FR
                                  Khaimah Free Trade      subject to the     denial             PAGE NUMBER] 12/
                                  Zone (RAKFTZ),          EAR. (See Sec.                        16/11.
                                  U.A.E.; and P.O. Box:   744.11 of the
                                  25123, Dubai U.A.E.     EAR)
 
                                                  * * * * * * *
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    Dated: December 12, 2011.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2011-32341 Filed 12-15-11; 8:45 am]
BILLING CODE 3510-33-P