United States: BIS Amends EAR To Revise Requirements For Exports To Persons Listed On The Unverified List

On December 19, 2013, the US Commerce Department, Bureau of Industry and Security (BIS) issued a final rule (Final Rule) amending the Export Administration Regulations (EAR), 15 C.F.R. Parts 730-774, to impose certain requirements for exporters that deal with parties listed on the Unverified List (UVL)  and to clarify the criteria for designation of a person on the UVL.  The Final Rule adds new Section 744.15 of the EAR, which specifically addresses exports involving persons listed on the UVL, and also amends several provisions of the EAR.  The Final Rule will be effective January 18, 2014.


BIS maintains the UVL, which includes names and countries of foreign persons who previously were parties to transactions in which BIS was unable to verify the person's bona fides by conducting a pre-license check or a post-shipment verification.  BIS considers transactions involving a listed party to raise a "red flag" under Supplement No. 3 to Part 732 of the EAR.  Therefore, an exporter is required to conduct additional due diligence prior to proceeding with any export or reexport transaction involving a person listed on the UVL.

Final Rule

The Final Rule introduces several new requirements for exporters seeking to engage in transactions involving persons listed on the UVL.

First, the Final Rule amends § 758.1 of the EAR to require exporters to file an Automated Export System (AES) record for all exports in which a person listed on the UVL is an intermediate consignee, ultimate consignee, or end user.  This is an expansion of § 758.1, which previously required exporters to file AES records when applying for a license or where the transaction value exceeded $2,500.  An AES record captures basic information regarding an export, including the names and addresses of the parties to the transaction.  Thus, under the new rule, export transactions where no license is needed and regardless of value will require the filing of an Electronic Export Information (EEI) if a person or entity on the UVL is a consignee or end user in the transaction.

Second, the Final Rule amends § 740.2 of the EAR to suspend license exceptions for exports, reexports, and transfers of US-origin items in which a purchaser, intermediate consignee, ultimate consignee, or end user is listed on the UVL.  For such transactions, an exporter must apply to BIS for a license if the EAR requires a license for export.

Third, with regard to items subject to the EAR but for which a license is not required, the Final Rule provides at new § 744.15(b) that an exporter must obtain a "UVL statement" before exporting, reexporting, or transferring such an item where a purchaser, intermediate consignee, ultimate consignee, or end user is listed on the UVL.  The UVL statement, which the exporter must obtain from the listed party, must include:

  • the name, physical address(es), telephone number, fax number, email address, and website of the listed party, as well as the name and title of the person signing the UVL statement;
  • an agreement not to use, reexport, or transfer the item in any manner prohibited by the EAR;
  • a declaration of the item's end use, end user, and country of ultimate destination;
  • an agreement to cooperate with BIS end-use checks;
  • an agreement to provide export records required by Part 762 of the EAR; and
  • certification of the signatory's authority to legally bind the listed party.

Fourth, new § 744.15(c) of the EAR sets out the criteria that BIS will review when determining whether to add a foreign person to the UVL.  BIS may add a person to the UVL where it is unable to verify the person's bona fides for reasons beyond BIS's control, such as where:

  • the subject of an end-use check cannot demonstrate the disposition of items subject to the EAR;
  • BIS is unable to locate or contact the subject of an end-use check; or
  • lack of cooperation by the host government prevents BIS from conducting an end-use check.

Notably, the Final Rule provides that lack of cooperation by the subject is not a ground for addition to the UVL, which previously was the case.  Rather, such lack of cooperation is a ground for addition to the Entity List, set out at Supplement No. 4 to Part 744 of the EAR.

Furthermore, the Final Rule provides that BIS will no longer consider affiliation with a listed person (by virtue of ownership, control, position of responsibility, or other affiliation) to be a basis for addition to the UVL.  This is a change from existing law.

Pursuant to the Final Rule, BIS has removed all persons previously listed on the UVL and will, going forward, add persons to the UVL based on the criteria set out above.  The UVL will be set out at new Supplement No. 6 to Part 744 of the EAR.  BIS may remove a person from the UVL where it verifies the bona fides of the person by conducting an end-use check or, where lack of host government cooperation prevents an end-use check, through an "alternative" verification process.  The Final Rule states that one example of such "alternative" verification could involve the US applicant visiting the UVL party and subsequently providing BIS with the information necessary to verify the party's bona fides.


The Final Rule adds several new requirements for exporters engaging in transactions involving persons listed on the UVL.  The requirements are intended to facilitate BIS review of such transactions.  Exporters should take care to ensure that their screening processes include checks of all parties to a transaction—including intermediate consignees, ultimate consignees, purchasers, and end users—against the UVL.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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