Document ID: BIS-2021-0001-0002
Agency: bis
Document Type: Rule
Title: Revisions to the Unverified List
Posted Date: 2021-01-11T05:00Z

[Federal Register Volume 86, Number 6 (Monday, January 11, 2021)]
[Rules and Regulations]
[Pages 1766-1768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27931]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 744

[Docket No. 201214-0340]
RIN 0694-AI39

Revisions to the Unverified List (UVL)

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: The Bureau of Industry and Security (BIS) is amending the 
Export Administration Regulations (EAR) by removing three (3) persons 
from the Unverified List (UVL). The three persons are removed from the 
UVL on the basis that BIS was able 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 successful end-use checks.

DATES: This rule is effective January 11, 2021.

[[Page 1767]]

FOR FURTHER INFORMATION CONTACT: Kevin Kurland, Director, Office of 
Enforcement Analysis, Bureau of Industry and Security, Department of 
Commerce, Phone: (202) 482-4255 or by email at UVLRequest@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

    The Unverified List (UVL), found in Supplement No. 6 to part 744 of 
the Export Administration Regulations (15 CFR parts 730 through 774) 
(EAR), contains the names and addresses of foreign persons who are or 
have been parties to a transaction, as such parties are described in 
Sec.  748.5 of the EAR, involving the export, reexport, or transfer 
(in-country) of items subject to the EAR, and whose bona fides the 
Bureau of Industry and Security (BIS) has been unable to verify through 
an end-use check. BIS may add persons to the UVL when BIS or federal 
officials acting on BIS's behalf have been unable to verify a foreign 
person's bona fides because an end-use check, 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.
    There are a number of reasons why end-use checks cannot be 
completed. These include but are not limited to reasons unrelated to 
the cooperation of the foreign party subject to the end-use check. For 
example, BIS sometimes initiates end-use checks and cannot find a 
foreign party at the address indicated on export documents and cannot 
locate the party by telephone or email. Additionally, BIS sometimes is 
unable to conduct end-use checks when host government agencies do not 
respond to requests to conduct end-use checks, prevent the scheduling 
of such checks, or refuse to schedule them in a timely manner. Under 
these circumstances, although BIS has an interest in informing the 
public of its inability to verify the foreign party's bona fides, there 
may not be sufficient information to add the foreign person at issue to 
the Entity List (Supplement No. 4 to part 744 of the EAR) under Sec.  
744.11 of the EAR (see paragraph (b), Criteria for revising the Entity 
List), or under another provision of the EAR. In such circumstances, 
BIS may add the foreign person to the UVL.
    Furthermore, BIS sometimes is able to conduct end-use checks but 
cannot verify the bona fides of a foreign party. For example, BIS may 
be unable to verify bona fides if, during the conduct of an end-use 
check, a recipient of items subject to the EAR is unable to produce the 
items that are the subject of the end-use check for visual inspection 
or provide sufficient documentation or other evidence to confirm the 
disposition of the items. The inability of foreign persons subject to 
end-use checks to demonstrate their bona fides raises concerns about 
the suitability of such persons as participants in future exports, 
reexports, or transfers (in-country) of items subject to the EAR and 
indicates a risk that such items may be diverted to prohibited end uses 
and/or end users. However, in such circumstances, BIS may not have 
sufficient information to establish that such persons are involved in 
activities described in parts 744 or 746 of the EAR, therefore 
preventing the placement of the persons on the Entity List. In such 
circumstances, the foreign persons may be added to the UVL.
    As provided in Sec.  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 Sec.  744.15(b) of the EAR, there is a 
requirement for exporters, reexporters, and transferors to obtain (and 
keep 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.
    Requests for removal of a UVL entry must be made in accordance with 
Sec.  744.15(d) of the EAR. Decisions regarding the removal or 
modification of UVL listings will be made by the Deputy Assistant 
Secretary for Export Enforcement, based on a demonstration by the 
listed person of its bona fides.

Changes to the EAR

Supplement No. 6 to Part 744 (``the Unverified List'' or ``UVL'')

    This rule removes three persons from the UVL. BIS is removing these 
persons pursuant to Sec.  744.15(c)(2) of the EAR based on the 
successful completion of end-use checks that resulted in the 
verification of their bona fides. This final rule implements the 
decision of the Acting Deputy Assistant Secretary for Export 
Enforcement to remove the following three persons located in Germany 
and Mexico from the UVL:
    Germany:
 DMA Logistics GmbH, Max Planck-Strasse 1, Unna, Germany; and
 Halm Elektronik GmbH, Burgstrasse 106, Frankfurt am Main, 
Germany
    Mexico:
     Integrated Production and Test Engineering, a.k.a. IPTE, 
Calle Alambiques 975--9, Parque Industrial el [Aacute]lamo, 
Guadalajara, Jalisco 44490, Mexico

Export Control Reform Act of 2018

    On August 13, 2018, the President signed into law the John S. 
McCain National Defense Authorization Act for Fiscal Year 2019, which 
included the Export Control Reform Act of 2018 (ECRA) (codified, as 
amended, at 50 U.S.C. 4801 through 4852). ECRA provides the legal basis 
for BIS's principal authorities and serves as the authority under which 
BIS issues this rule.

Rulemaking 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, 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 designated as ``not significant'' for 
purposes of Executive Order 12866. This rule is not an Executive Order 
13771 regulatory action because this rule is not significant under 
Executive Order 12866.
    This rule does not contain policies with Federalism implications as 
that term is defined in Executive Order 13132.
    Pursuant to section 1762 of the Export Control Reform Act of 2018 
(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, opportunity for public participation, and delay in 
effective date. The analytical requirements of the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.) are not applicable because no 
general notice of proposed rulemaking was required for this action. 
Accordingly, no regulatory flexibility analysis is required, and none 
has been prepared.
    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. This regulation involves 
collections previously approved by OMB under the

[[Page 1768]]

following control numbers: 0694-0088 (Simplified Network Application 
Processing+ System (SNAP+) and the Multipurpose Export License 
Application), 0694-0122 (Licensing Responsibilities and Enforcement), 
and 0694-0137 (License Exceptions and Exclusions). Collection 0694-0088 
includes, among other things, license applications, and carries a 
burden estimate of 42.5 minutes for a manual or electronic submission 
for a total burden estimate of 31,878 hours.
    This rule will not change public burden in a collection of 
information approved by OMB under control number 0694-0088. The 
restoration of license exceptions for listed persons on the Unverified 
List will result in decreased license applications being submitted to 
BIS by exporters. The removal of license exceptions for listed persons 
on the Unverified List will potentially result in increased license 
applications being submitted to BIS by exporters. Total burden hours 
associated with the Paperwork Reduction Act and OMB control number 
0694-0088 are expected not to change, as the restoration of some 
license exceptions and the restriction of other license exceptions will 
only affect transactions involving persons removed from or added to the 
Unverified List and not all export transactions. Because license 
exception eligibility is restored for these entities removed from the 
UVL, this rule increases public burden in a collection of information 
approved by OMB under control number 0694-0137 minimally, as this will 
only affect specifically listed individual persons. The decreased 
burden under 0694-0088 is reciprocal to the increased burden under 
0694-0137, and results in little or no change of burden to the public. 
This rule also decreases public burden in a collection of information 
under OMB control number 0694-0122, as a result of the exchange of UVL 
statements between private parties. The total change in burden hours 
associated with both of these collections is expected to be minimal, as 
it involves a limited number of persons listed on the UVL.

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--CONTROL POLICY: END-USER AND END-USE BASED

0
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 September 18, 2020, 85 FR 59641 (September 22, 2020); Notice of 
November 12, 2020, 85 FR 72897 (November 13, 2020).

Supplement No. 6 to Part 744 [Amended]

0
2. Supplement No. 6 to part 744 is amended in the table by:
0
a. Removing the entries for ``DMA Logistics GmbH'' and ``Halm 
Elektronik GmbH'' under ``Germany''; and
0
b. Removing the entry for ``Mexico''.

Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2020-27931 Filed 1-8-21; 8:45 am]
BILLING CODE 3510-33-P