Export Compliance: General Prohibitions, End Uses, and End Users
 

General Prohibitions/License Required

Designated individuals and organizations are prohibited from receiving U.S. exports and others may receive goods only if they are licensed, even items that do not normally require a license based on the ECCN and Commerce Country Chart or based on an EAR99 designation. Exporters must be aware of the following lists:

Entity List - EAR Part 744, Supplement 4 - A list of organizations identified by BIS as engaging in activities related to the proliferation of weapons of mass destruction. Depending on your item, you may be required to obtain a license to export to an organization on the Entity List even if one is not otherwise required.

Treasury Department Specially Designated Nationals and Blocked Persons List- EAR Part 764, Supplement 3 - A list maintained by the Department of Treasury's Office of Foreign Assets Control comprising individuals and organizations deemed to represent restricted countries or known to be involved in terrorism and narcotics trafficking.

The Unverified List is composed of firms for which BIS was unable to complete an end-use check. Firms on the unverified list present a "red flag" that exporters have a duty to inquire about before making an export to them.

Denied Persons - You may not participate in an export or reexport transaction subject to the EAR with a person whose export privileges have been denied by the BIS. A list of those firms and individuals whose export privileges have been denied is available on this Web site. Note that some denied persons are located within the United States. If you believe a person whose export privileges have been denied wants to buy your product in order to export it, you must not make the sale and should report the situation to BIS's Office of Export Enforcement. If you have questions about Denied Persons, you may contact BIS's Office of Enforcement Analysis at (202) 482-4255.

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What Are End Uses and End Users?

In addition to controlling exports of specific commodities to specific individuals or geographical destinations, exports must be evaluated with regard to their end use and end user.

End-use and end-user export control policy requires the exporter to assume considerable responsibility for ensuring that an export is consistent with all U.S. export laws and regulations aimed at meeting this country's national security, economic, and foreign policy objectives. Even uncontrolled items (that is, items normally eligible for license exceptions) may require an export license when a particular end user is concerned.

The U.S. government requires that licenses be obtained for exports to foreign entities involved in defense-related activities (very broadly defined). In addition, the government maintains lists of sensitive countries for which exports must undergo formal export controls or other review processes.

Current end-use and end-user export control policy also requires a license review for exports to specified destinations when there is reason to know, suspect, or believe that the exports will be used in the design, development, production, or use of missiles or in the design, development, production, stockpiling, or use of chemical or biological weapons.

An export license is required when there is reason to know, suspect, or believe that the exporter is informed that the export involves an identified risk of diversion to an unauthorized end user.

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Know the Customer

The Bureau of Export Administration requires the exporter to "know the customer." Guidance and "red flags" in this regard can be found in detail in the Export Administration Regulations (EAR: 15 CFR Part 732, Supplement 3).

Be alert for "red flags."That is, note any irregularities or abnormal circumstances in a transaction that might indicate the export is destined for an inappropriate end use, end user, or destination. Potential "red flags" could include:

  • Requests for items that are inconsistent with the needs of a project.
  • Requests for equipment configurations that are incompatible with the stated destination (e.g., requesting 120-volt equipment for a country that uses 220 volts).
  • Reluctance to provide end-user information.
  • Requests for atypical terms.
  • Orders for packing or delivery that are outside of normal practice.
  • Use of a P.O. Box address.

If there are "red flags," inquire further. In the absence of any "red flags," SAO employees are not normally expected to inquire, verify, or otherwise go behind the foreign party's representation. However, when "red flags" are raised, employees should immediately notify the SAO Export Compliance Official so that suspicious circumstances and the end use, end user, or ultimate country of destination may be verified.

Avoiding willful blindness. Do not "put on blinders" to prevent the discovery of, or disregard, obvious and relevant information. (e.g., do not tell potential foreign partners to refrain from discussing actual end uses, end users, or countries of destination.) Attempts to avoid learning "bad" information will not insulate SAO or individuals from liability and could be considered an aggravating factor in enforcement proceedings.

Handling "red flags." The technical and program knowledge of employees in spotting "red flags" is a valuable resource to the SAO officials responsible for the Observatory's compliance with U.S. export control policy. All "red flags" must be resolved before the export can proceed.

When in doubt, do not export. If concerns remain about a particular export after inquiry and evaluation, refrain from the export.

Countries with Export Restrictions

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