[Federal Register Volume 68, Number 60 (Friday, March 28, 2003)]
[Notices]
[Pages 15151-15152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-7484]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 030319065-3065-01]


Revisions to 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 add 
and remove persons from the Unverified List.
    This notice adds Brilliant Intervest to the Unverified List and 
removes Xian XR Aerocomponents Co., Ltd. from the Unverified List.

DATES: This notice is effective March 28, 2003.

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 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 set forth in 15 
CFR part 744, and does not violate the EAR.
    The Federal Register notice further stated that persons on the 
Unverified List would be added and removed from the list when 
warranted. BIS has attempted, and was unable to conduct, a PSV in 
transactions involving the following person: Brilliant Intervest, 14-1, 
Persian 65C, Jalan Pahang Barat, Kuala Lumpur, Malaysia 53000.
    This notice advises exporters that Brilliant Intervest is added to 
the Unverified List, and a ``red flag'' now exists for transactions 
involving this person due to its inclusion on the Unverified List. As a 
result, exporters

[[Page 15152]]

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 set forth in 15 CFR part 744, 
and does not violate the EAR.
    In addition, BIS has now conducted a PSV in a transaction involving 
Xian XR Aerocomponents Co., Ltd., Xujiawen Beijiao, Xian, Shaanxi, 
People's Republic of China, (``Xian''), a person included on the 
Unverified List. This notice advises exporters that Xian is removed 
from the Unverified List, and the ``red flag'' resulting from Xian's 
inclusion on the Unverified List is rescinded.
    The Unverified List, as modified by this notice, is set forth 
below.

    Dated: March 24, 2003.
Lisa A. Prager,
Acting Assistant Secretary for Export Enforcement.

Unverified List as of March 28, 2003

    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 included 
on the list.

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              Name                      Country       Last known address
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Power Test & Research Institute   People's Republic   No. 38 East
 of Guangzhou.                     of China.           Huangshi Road,
                                                       Guangzhou.
Civil Airport Construction        People's Republic   111 Bei Sihuan
 Corporation.                      of China.           Str. East, Chao
                                                       Yang District,
                                                       Beijing.
Shaanxi Telecom Measuring         People's Republic   39 Jixiang Road,
 Station.                          of China.           Yanta District,
                                                       Xian, Shaanxi.
Beijing San Zhong Electronic      People's Republic   Hai Dian Fu Yuau,
 Equipment Engineer Co., Ltd.      of China.           Men Hao 1 Hao,
                                                       Beijing.
Huabei Petroleum, Administration  People's Republic   South Yanshan
 Bureau, Logging Company.          of China.           Road, Ren Qiu
                                                       City, Hebei.
Yunma Aircraft Mfg..............  People's Republic   Yaopu, Anshun,
                                   of China.           Guizhou.
Daqing Production Logging         People's Republic   No. 3 Fengshou
 Institute.                        of China.           Village, Sartu
                                                       District, Daqing
                                                       City,
                                                       Heilongjiang.
Dee Communications M SDN.BHD....  Malaysia..........  G5/G6, Ground
                                                       Floor, Jin
                                                       Gereja, Johor
                                                       Bahru.
Brilliant Intervest.............  Malaysia..........  14-1, Persian 65C,
                                                       Jalan Pahang
                                                       Barat, Kuala
                                                       Lumpur, 53000.
Arrow Electronics...............  United Arab         204 Arbift Tower,
                                   Emirates.           Benyas Road,
                                                       Dubai.
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[FR Doc. 03-7484 Filed 3-27-03; 8:45 am]
BILLING CODE 3510-33-P