Document ID: BIS-2019-0017-0001
Agency: bis
Document Type: Rule
Title: Revisions to the Unverified List
Posted Date: 2019-06-27T04:00Z

[Federal Register Volume 84, Number 124 (Thursday, June 27, 2019)]
[Rules and Regulations]
[Pages 30593-30595]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13639]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 744

[Docket No. 190605486-9486-01]
RIN 0694-AH79

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 eight (8) persons 
from the Unverified List (``UVL'') and correcting the name for one (1) 
person currently listed on the UVL. The eight persons are removed from 
the UVL on the basis that BIS was able to verify their bona fides 
because of an end-use check.

DATES: This rule is effective: June 27, 2019.

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, found in supplement no. 6 to part 744 of the 
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 (i.e., 
legitimacy and reliability relating to the end use and end user of 
items subject to the EAR) 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 such purposes for reasons outside the U.S. 
Government's control.
    There are occasions where, for a number of reasons, end-use checks

[[Page 30594]]

cannot be completed. These include 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 under 
Sec.  744.11 of the EAR (Criteria for revising the Entity List). In 
such circumstances, BIS may add the foreign person to the UVL.
    Furthermore, BIS sometimes conducts 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, BIS may not have sufficient information to 
establish that such persons are involved in activities described in 
parts 744 or 746 of the EAR, preventing the placement of the persons on 
the Entity List. In such circumstances, the foreign persons may be 
added to the Unverified List.
    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 corrects the name for one person currently listed on the 
UVL under the destination of China, Beijing Institute of Nanoenergy and 
Technology. BIS was notified that the person's correct name is Beijing 
Institute of Nanoenergy and Nanosystems.
    Finally, this rule removes eight persons from the UVL. BIS is 
removing these persons pursuant to Sec.  744.15(c)(2) of the EAR. This 
final rule implements the decision to remove the following eight 
persons located in China from the UVL:
China
    (1) Beijing Bayi Space LCD Materials Technology Co., Ltd, Dongfeng 
Rd, Yanshan, Beijing, China;
    (2) Hubei Flying Optical, No 1, Changfei Avenue, Yanhua, Industrial 
Park, Jianghan Oil Field, Qianjiang, China;
    (3) Sunder Tools (Changxing) Technology, Zhongtie Avenue Huaxi 
Industrial Area,
    Changxing County, Huzhou, Zhejiang Province, China 313100;
    (4) Wuhan Yifi Laser Equipment Co., Dingxin Industry Park, Jiayuan 
Road, Optics Valley, Hubei, Wuhan, China 430074;
    (5) Wuxi Hengling Technology Co. Ltd., Bldg C1, No. 999 East 
Gaolang Rd., Binhu District, Jiangsu Province, Wuxi City, China 214131;
    (6) Xiamen Sanan Optoelectronics, Luling Road 1721-1725#, Ximing, 
Xiamen, China 361008;
    (7) Zhejiang Xizi Aviation, No. 277 Xinken Road, Qianjin, 
Technological Development Area, Zhejiang, China 311222; and
    (8) Zolix Instruments Co., LDUV 68B, No. 16 Huanke Middle Rd, 
Tongzhou Zone, Tongzhou District, Beijing, China 101102.

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) (Title XVII, 
Subtitle B of Pub. L. 115-232) that provides the legal basis for BIS's 
principal authorities and serves as the authority under which BIS 
issues this rule. As set forth in Section 1768 of ECRA, all 
delegations, rules, regulations, orders, determinations, licenses, or 
other forms of administrative action that have been made, issued, 
conducted, or allowed to become effective under the Export 
Administration Act of 1979 (50 U.S.C. 4601 et seq.) (as in effect prior 
to August 13, 2018, and as continued in effect pursuant to the 
International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) 
and Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 
(2002), as amended by Executive Order 13637 of March 8, 2013, 78 FR 
16129 (March 13, 2013), and as extended by the Notice of August 8, 
2018, 83 FR 39871 (August 13, 2018)), or the Export Administration 
Regulations, and are in effect as of August 13, 2018, shall continue in 
effect according to their terms until modified, superseded, set aside, 
or revoked under the authority of ECRA.

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 not been designated a ``significant 
regulatory action,'' under section 3(f) of Executive Order 12866. This 
rule is not an Executive Order 13771 regulatory action because this 
rule is not significant under Executive Order 12866.
    2. Pursuant to Section 1762 of the Export Control Reform Act of 
2018 (Title XVII, Subtitle B of Pub. L. 115-232), which was included in 
the John S. McCain National Defense Authorization Act for Fiscal Year 
2019, 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

[[Page 30595]]

analysis is required, and none has been prepared.
    3. 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 following control 
numbers: 0694-0088, 0694-0122, 0694-0134, and 0694-0137.
    This rule slightly decreases public burden in a collection of 
information approved by OMB under control number 0694-0088, which 
authorizes, among other things, export license applications. The 
restoration of license exceptions for listed persons on the Unverified 
List will result in decreased 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 to decrease 
minimally, as the restoration of license exceptions will only affect 
transactions involving persons removed from 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 specific 
individual listed persons. The decreased burden under 0694-0088 is 
reciprocal to the increased burden under 0694-0137, and results in 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, and 
under OMB control number 0694-0134, as a result of appeals from persons 
listed on the UVL for removal of their listing. The total decrease in 
burden hours associated with both of these collections is expected to 
be minimal, as they involve a limited number of persons listed on the 
UVL.
    Any comments regarding these collections of information, including 
suggestions for reducing the burden, may be sent to OMB Desk Officer, 
New Executive Office Building, Washington, DC 20503; and 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.
    4. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 13132.

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--[AMENDED]

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

    Authority: Pub. L. 115-232, Title XVII, Subtitle B, 132 Stat. 
2208 (to be codified at 50 U.S.C. 4801 et seq.); 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. 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 August 8, 2018, 83 FR 39871 (August 13, 2018); Notice of 
September 19, 2018, 83 FR 47799 (September 20, 2018); Notice of 
November 8, 2018, 83 FR 56253 (November 9, 2019); Notice of January 
16, 2019, 84 FR 127 (January 18, 2019).

0
2. Supplement No. 6 to Part 744 is amended by:
0
a. Removing the entry for ``Beijing Bayi Space LCD Materials Technology 
Co., Ltd.'' under ``China'';
0
b. Revising the entry for ``Beijing Institute of Nanoenergy and 
Technology'' under ``China'';
0
c. Removing the entry for ``Hubei Flying Optical'' under ``China'';
0
d. Removing the entry for ``Sunder Tools (Changxing) Technology'' under 
``China'';
0
e. Removing the entry for ``Wuhan Yifi Laser Equipment Co.'' under 
``China'';
0
f. Removing the entry for ``Wuxi Hengling Technology Co. Ltd.'' under 
``China'';
0
g. Removing the entry for ``Xiamen Sanan Optoelectronics'' under 
``China'';
0
h. Removing the entry for ``Zhejiang Xizi Aviation'' under ``China''; 
and
0
i. Removing the entry for ``Zolix Instruments Co.'' under ``China''.
    The revision reads as follows:

Supplement No. 6 to Part 744--Unverified List

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                                                     Federal Register
        Country             Listed person and      citation and date of
                                 address                publication
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                              * * * * * * *
CHINA..................  Beijing Institute of     84 FR 14610, 04/11/19.
                          Nanoenergy and           84 FR [INSERT Federal
                          Nanosystems, 30 Xue      Register PAGE
                          YuanLu HaiDianQu,        NUMBER], 06/27/19.
                          Beijing, China 100083.
 
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    Dated: June 21, 2019.
Richard E. Ashooh,
 Assistant Secretary for Export Administration, Bureau of Industry and 
Security.
[FR Doc. 2019-13639 Filed 6-26-19; 8:45 am]
 BILLING CODE 3510-33-P