When it comes to managing your international shipments, it is imperative that you have full transparency surrounding all parties involved with the transaction. At BDP, it is a regulatory compliance requirement that all parties involved with our orders need to be “screened” against the lists provided by the US government. Some lists are direct “red” lights, for which all orders must be stopped; while some lists are “yellow”, indicating to proceed with caution.
When you encounter a “yellow” list, it is important to take certain steps that are required under US regulations. Following this guide will help to ensure due diligence with party management to move the order properly and efficiently.
So, what is the Unverified List(UVL)?
The UVL lists names of companies that the Bureau of Industry Security (BIS) could not verify as bona fide because an end-user check could not be completed to a satisfactory level. Usually, this is due to reasons outside of the US Government’s control.
Parties listed on the UVL are ineligible to receive items subject to the Export Administration Regulations (EAR) by means of a license exception.
In addition, exporters must file an Automated Export System record for all exports to parties listed on the UVL, and obtain a statement from such parties prior to exporting, re-exporting, or transferring to such parties any item subject to the EAR which is not subject to a license requirement. Restrictions on exports, re-exports, and transfers (in-country) to persons listed on the UVL are set forth in Section 744.15 of the EAR. The Unverified List is set forth in Supplement No. 6 to Part 744 of the EAR.
So, what are the steps to properly manage these exports?
- Screen all parties for all transactions against the “Restricted Parties List”
- Evaluate and investigate the potential transaction to determine whether the customer will proceed with the transaction. In some cases, the customer may decide to refuse the business.
- License Exceptions are NOT available. If the commodity is eligible for a license exception to the country where the UVL is located, you cannot use the license exception, you would have to apply for a validated license.
- UVL statement is a MUST. Before exporting, re-exporting, or transferring any product or technology to a UVL, you must acquire the statement from the UVL with the following information:
- AES filing is mandatory. Requiring exporters to file an Automated Export System (AES) record for all exports subject to the EAR involving a party to the transaction who is listed on the UV, regardless of value, (meaning the $2500.00 per classification number does not apply)
- See something, say something! If the transaction appears to be suspicious, consider notifying the local Office of Export Enforcement (OEE) in order to partner with the agency.
In order to avoid any potential risk or license violations, it is imperative to know what parties are involved with your customers' shipments. Should you have any questions or concerns, please reach out to me directly.