The U.S. Department of Commerce, Bureau of Industry and Security (BIS) administers and enforces the Export Administration Regulations (EAR). As part of its regulatory and enforcement functions BIS administers and maintains the Entity List (published at 31 C.F.R. Part 744, Supplement No. 4). That list serves as notice to U.S. persons and all parties to a transaction involving U.S. goods or technology of the end-users that cannot receive some or all of the goods or technology subject to the EAR without further authorization from BIS.
BIS first published the Entity List in February 1997 as part of its efforts to inform the public of entities who have engaged in activities that could result in an increased risk of the diversion of exported, reexported, and transferred items to weapons of mass destruction programs. Since then, grounds for inclusion on the Entity List have dramatically expanded to activities sanctioned by the State Department and other activities contrary to U.S. national security and/or foreign policy interests. To undertake this endeavor, BIS works with representatives of the Departments of State, Defense, Energy, and where appropriate, the Treasury in the End-User Review Committee (ERC). This committee makes all decisions regarding additions to, removals from, or changes to the Entity List.
31 C.F.R. 744.16 informs persons appearing on the Entity List that they can request to have their listing be removed or modified as appropriate. All such requests, including reasons therefor, must be in writing and sent to the chairperson of the ERC. According to Supplement No. 5 to 15 C.F.R. Part 744 the chairperson of the ERC will forward a copy of the removal request to all other member of the ERC. The members are then directed to review and vote on all such requests.
Removal requests should contain effective and compelling reasons why the entity should be removed from the list. Simply asking to be removed from the list will likely be unsuccessful. Instead, entities should proactively implement and develop export compliance programs and provide BIS with assurances of future compliance with U.S. export laws. Additionally, listed entities can offer to cooperate and/or provide relevant and active intelligence to the U.S. Government regarding other persons of interest in exchange for removal. Lastly, if a party feels that they have been mistakenly placed on the list they should be prepared to make compelling arguments supported by evidence proving that the U.S. Government made a mistake.
To most effectively navigate the removal process all entities, including foreign entities, should consult with U.S.-based attorneys who are familiar with federal regulatory and legal practices. Attorneys familiar with U.S. export control laws, internal investigations, intelligence, and other national security-related matters will be best situated to navigate what is often an opaque and frustrating removal process.
This post is authored by Ferrari & Associates, P.C., a law firm specializing in federal criminal defense matters. Feel free to contact us at (202) 280-6370 or firstname.lastname@example.org.