[Federal Register Volume 67, Number 225 (Thursday, November 21, 2002)]
[Notices]
[Pages 70209-70210]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-29680]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 021113273-2273-01]


Removal of Person From the Unverified List--Guidance as to ``Red 
Flags'' Under Supplement No. 3 to 15 CFR Part 732

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Notice.

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SUMMARY: On June 14, 2002, the Bureau of Industry and Security 
(``BIS'') published a notice in the Federal Register that set forth a 
list of persons in foreign countries who were parties to past export 
transactions where pre-license checks (``PLC'') or post-shipment 
verifications (``PSV'') could not be conducted for reasons outside the 
control of the U.S. Government (``Unverified List''). The notice also 
advised exporters that the involvement of a listed person as a party to 
a proposed transaction constitutes a ``red flag'' as described in the 
guidance set forth in supplement no. 3 to 15 CFR part 732, requiring 
heightened scrutiny by the exporter before proceeding with such a 
transaction. The notice also stated that, when warranted, BIS would 
remove persons from the Unverified List. Recently, a PSV was completed 
at the facilities of S.B. Submarine Systems Co., Ltd., 1591 Hongqiao 
Rd., Bldg 15, People's Republic of China, (``S.B. Submarine''). 
Accordingly, by this notice, S.B. Submarine is removed from the 
Unverified List.

DATES: This notice is effective November 21, 2002.

FOR FURTHER INFORMATION CONTACT: Thomas W. Andrukonis, Office of 
Enforcement Analysis, Bureau of Industry and Security, Telephone: (202) 
482-4255.

SUPPLEMENTARY INFORMATION: In administering export controls under the 
Export Administration Regulations (15 CFR parts 730 to 774) (``EAR''), 
BIS carries out a number of preventive enforcement activities with 
respect to individual export transactions. Such activities are intended 
to assess diversion risks, identify potential violations, verify end-
uses, and determine the suitability of end-users to receive U.S. 
commodities or technology. In carrying out these activities, BIS 
officials, or officials of other federal agencies acting on BIS's 
behalf, selectively conduct PLCs to verify the bona fides of the 
transaction and the suitability of the end-user or ultimate consignee. 
In addition, such officials

[[Page 70210]]

sometimes carry out PSVs to ensure that U.S. exports have actually been 
delivered to the authorized end-user, are being used in a manner 
consistent with the terms of a license or license exception, and are 
otherwise consistent with the EAR.
    In certain instances BIS officials, or other federal officials 
acting on BIS's behalf, have been unable to perform a PLC or PSV with 
respect to certain export control transactions for reasons outside the 
control of the U.S. Government (including a lack of cooperation by the 
host government authority, the end-user, or the ultimate consignee). In 
a notice issued on June 14, 2002 (67 FR 40910), BIS set forth an 
Unverified List of certain foreign end-users and consignees involved in 
such transactions.
    The June 14 notice also advised exporters that the participation of 
a person on the Unverified List in a proposed transaction will be 
considered by BIS to raise a ``red flag'' under the ``Know Your 
Customer'' guidance set forth in supplement no. 3 to 15 CFR part 732 of 
the EAR. Under that guidance, whenever there is a ``red flag,'' 
exporters have an affirmative duty to inquire, verify, or otherwise 
substantiate the proposed transaction to satisfy themselves that the 
transaction does not involve a proliferation activity prohibited in 15 
CFR part 744, and does not violate other provisions of the EAR.
    The Federal Register notice further stated that persons on the 
Unverified List would be removed from the list when warranted. BIS has 
now conducted a PSV in a transaction involving S.B. Submarine Systems 
Co., Ltd., 1591 Hongqiao Rd., Bldg. 15, People's Republic of China, 
(``S.B. Submarine''), a person included on the Unverified List. This 
notice advises exporters that S.B. Submarine is removed from the 
Unverified List, and the ``red flag'' resulting from S.B. Submarine's 
inclusion on the Unverified List is rescinded.
    The Unverified List, as modified by this notice, is set forth 
below.

    Dated: November 15, 2002.
Michael J. Garcia,
Assistant Secretary for Export Enforcement.

Unverified List as of November 21, 2002

    The Unverified List includes names and countries of foreign persons 
who in the past were parties to a transaction with respect to which BIS 
could not conduct a pre-license check (``PLC'') or a post-shipment 
verification (``PSV'') for reasons outside of the U.S. Government's 
control. Any transaction to which a listed person is a party will be 
deemed by BIS to raise a ``red flag'' with respect to such transaction 
within the meaning of the guidance set forth in supplement no. 3 to 15 
CFR part 732. The red flag applies to the person on the Unverified List 
regardless of where the person is located in the country include on the 
list.

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            Name                     Country         Last known address
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Power Test & Research         People's Republic of  No. 38 East Huangshi
 Institute of Guangzhou.       China.                Road, Guangzhou.
Civil Airport Construction    People's Republic of  111 Bei Sihuan Str.
 Corporation.                  China.                East, Chao Yang
                                                     District, Beijing.
Xian XR Aerocomponents Co.,   Peopole's Republic    Xujiawen Beijiao,
 Ltd.                          of China.             Xian, Shaanxi.
Shaanxi Telecom Measuring     People's Republic of  39 Jixiang Road,
 Station.                      China.                Yanta District,
                                                     Xian Shaanxi.
Beijing San Zhong Electronic  People's Republic of  Hai Dian Fu Yuau,
 Equipment Engineer Co., Ltd.  China.                Men Hao1 Hao,
                                                     Beijing.
Huabei Petroleum              People's Republic of  South Yanshan Road,
 Administration Bureau         China.                Ren Qiu City,
 Logging Company.                                    Hebei.
Yunma Aircraft Mfg..........  People's Republic of  Yaopu, Anshun,
                               China.                Guizhou.
Daqing Production Logging     People's Republic of  No. 3 Fengshou
 Institute.                    China.                Village, Sartu
                                                     District, Daqing
                                                     City, Heilongjiang.
Dee Communications MSDN. BHD  Malaysia............  G5/G6, Ground Floor,
                                                     Jin Gereja, Johor
                                                     Bahru.
Arrow Electronics Industries  United Arab Emirates  204 Arbift Tower,
                                                     Benyas Road, Dubai.
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[FR Doc. 02-29680 Filed 11-20-02; 8:45 am]
BILLING CODE 3510-33-P