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September 18, 2008 

BIS Adds 75 Names to Entity List and Removes General Order No. 3

The Bureau of Industry and Security (BIS) has now released the names of the 75 parties added to the Entity List as part of yesterday's coordinated effort with the Departments of Justice and Treasury to rein in the global procurement network that attempted to acquire U.S.-origin dual-use and military components for the Iranian Government.

The 75 names will be included in the Entity List as part of a final rule that will be published in the Federal Register early next week. An advance copy of the final rule can be found here (pdf).

The final rule, which will take effect on the publication date, is significant in that it transfers the 33 parties included on General Order No. 3 to the Entity List and removes General Order No. 3 from the EAR. Thus, the Entity List will now consist of 108 names, which includes the 75 new companies and individuals being added, the 33 parties previously included on the Entity List and 7 persons with addresses in multiple countries, since the Entity List is organized by country.

The final rule notes that the recently created inter-agency End User Review Committee (ERC) "decided to specify a license requirement for all items subject to the EAR and establish a license applications review policy of a general policy of denial." In addition, no license exceptions can be used for shipments to the 108 parties on the Entity List.

The good news for U.S. exporters is that this marks the recent time in recent memory that the U.S. Government has actually removed a restricted party list. Transferring the parties included on General Order No. 3 to the Entity List makes it less likely that exporters and freight forwarders will engage in a prohibited transaction with one of the named parties due to their failure to screen the transaction against General Order No. 3. BIS has already brought several enforcement actions against U.S. exporters and freight forwarders for shipping to parties included on the Entity List.

UPDATE: The final rule mentioned above was published in the Federal Register on September 22, 2008 and can be found here.




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