Security Agency Proposes Tougher Export Rules

WASHINGTON (CN) - The Bureau of Industry and Security proposed tougher export rules that would make it harder to export goods to companies that do not cooperate with the government's verification process.

The bureau investigates violations of the Export Administration Regulations and maintains a list of unverified foreign companies and people.

The list, established in 2002, flags companies that were parties to transactions that the bureau could not verify pre-license checks or post-shipment verification.

The bureau has proposed a rule that would require exporters to file an automated export system record for all the exports involving companies or people on the unverified list.

"This rule proposes to eliminate ambiguity for listing foreign persons on the unverified list and the entity list by removing lack of cooperation by a foreign party as a basis for revising the unverified list," the bureau wrote.

Under the proposed rule, when the government determines that a party's lack of cooperation prevented the bureau from conducting an end-use check, the bureau can add those parties to the entity list.

"Examples of actions that could result in a person being listed on the UVL include: The subject of the check is unable to demonstrate the disposition of items during an end-use check; the existence or authenticity of the subject of an end-use check cannot be verified because, inter alia, the subject of the check cannot be located or contacted; or lack of cooperation by the host government authority."

The bureau said it is no longer considering affiliation with a person on the unverified list as a basis for adding a party to the list without more substantial evidence.

If the bureau finds that a foreign person may be affiliated with someone on the unverified list, the bureau will start an end-use check on the export, re-export or transfer in question.

The end-use check may include investigating any transaction subject to export rules in the last five years, the bureau said.

Comments on the proposed rule are due by Oct. 11.

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