[Federal Register Volume 68, Number 143 (Friday, July 25, 2003)]
[Notices]
[Pages 44039-44040]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-19017]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 030715174-3174-01]


Revisions to the Unverified List--Guidance as to ``Red Flags''

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''). This notice 
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 Daqing Production Logging Institute, No. 3 
Fengshou Village, Sartu District, Daqing City, Heilongjiang, People's 
Republic of China. Accordingly, by this notice, Daqing Production 
Logging Institute is removed from the Unverified List.

DATES: This notice is effective July 25, 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 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, 2002 notice also advised exporters that 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 that 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 requirements set forth in the 
EAR.
    The Federal Register notice further stated that BIS may 
periodically add persons to the Unverified List based on the criteria 
set forth above, and remove names of persons from the list when 
warranted.
    BIS has not conducted a PSV in a transaction involving Daqing 
Production Logging Institute, No. 3 Fengshou Village, Sartu District, 
Daqing City, Heilongjiang, People's Republic of China, a person 
included on the Unverified List. This notice advises exporters that 
Daqing Production Logging Institute is removed from the Unverified 
List, and the ``red flag'' resulting from Daqing Production Logging 
Institute's inclusion on the Unverified List is rescinded.
    The Unverified List, as modified by this notice, is set forth 
below.

Lisa A. Prager,
Acting Assistant Secretary for Export Enforcement.

Unverified List (as of July 25, 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.

[[Page 44040]]



------------------------------------------------------------------------
            Name                     Country         Last known addrress
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Lucktrade International.....  Hong Kong Special     P.O. Box 91150, Tsim
                               Administrative        Sha Tsui, Hong
                               Region.               Kong.
Brilliant Intervest.........  Malaysia............  14-1, Persian 65C,
                                                     Jalan Pahang Barat,
                                                     Kuala Lumpur,
                                                     53000.
Dee Communications M SDN.BHD  ......do............  G5/G6, Ground Floor,
                                                     Jin Gereja, Johor
                                                     Bahru.
Shaanxi Telecom Measuring     People's Republic of  39 Jixiang Road,
 Station.                      China.                Yanta District
                                                     Xian, Shaanxi.
Yunma Aircraft Mfg..........  ......do............  Yaopu Anshun,
                                                     Guizhou.
Civil Airport Construction    ......do............  111 Bei Sihuan Str.
 Corporation.                                        East, Chao Yang
                                                     District, Beijing.
Power Test & Research         ......do............  No. 38 East
 Institute of Guangzhou.                             Huangshi, Road,
                                                     Guangzhou.
Beijing San Zhong Electronic  ......do............  Hai Dian Fu Yuau,
 Equipment Engineer Co., Ltd.                        Men Hao 1 Hao,
                                                     Beijing.
Huabei Petroleum              ......do............  South Yanshan Road,
 Administraion Bureau                                Ren Qiu City,
 Logging Company.                                    Hebei.
Peluang Teguh...............  Singapore...........  203 Henderson Road
                                                     09-05H,
                                                     Henderson
                                                     Industrial Park,
                                                     Singapore.
Lucktrade International PTE   ......do............  35 Tannery Road,
 Ltd.                                                01-07
                                                     Tannery Block, Ruby
                                                     Industrial Complex,
                                                     Singapore 347740.
Arrow Electronics Industries  United Arab Emirates  204 Arbift Tower,
                                                     Benyas Road, Dubai.
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[FR Doc. 03-19017 Filed 7-24-03; 8:45 am]
BILLING CODE 3510-33-M