View all text of Part 744 [§ 744.1 - § 744.23]
§ 744.11 - License requirements that apply to entities acting or at significant risk of acting contrary to the national security or foreign policy interests of the United States.
BIS may impose foreign policy export, re-export, and transfer (in-country) license requirements, limitations on availability of license exceptions, and set license application review policy based on the criteria in this section. Such requirements, limitations and policy are in addition to those set forth elsewhere in the EAR. License requirements, limitations on use of license exceptions, and license application review policies will be imposed under this section by adding an entity or an address that presents a high diversion risk (see § 744.16(f) of this part) to the Entity List (supplement no. 4 to this part) with a reference to this section and by stating on the Entity List the license requirements and license application review policies that apply to that entity or address, or by informing an exporter, re-exporter, or transferor pursuant to paragraph (c) of this section that a specific entity or address is subject to a license requirement, limitations on use of license exceptions and license application review policies as specified in a specific notice provided to an exporter, re-exporter, or transferor. BIS may remove an entity from the Entity List if it is no longer engaged in the activities described in paragraph (b) of this section and is unlikely to engage in such activities in the future, or if it is no longer at significant risk of acting contrary to the national security or foreign policy interests of the United States as described therein. BIS may remove an address that presents a high diversion risk from the Entity List if the address is determined to no longer be a high diversion risk, for example if measures are undertaken to educate companies operating at those addresses on export compliance, or to effectively screen clients for diversion risk. BIS may modify the license exception limitations and license application review policies that apply to a particular entity or address that presents a high diversion risk to implement the policies of this section. BIS will implement the provisions of this section in accordance with the decisions of the End-User Review Committee or, if appropriate in a particular case, in accordance with the decisions of the body to which the End-User Review Committee decision is escalated. The End-User Review Committee will follow the procedures set forth in supplement no. 5 to this part.
(a) License requirement, availability of license exceptions, and license application review policy. A license is required, to the extent specified on the Entity List, to export, reexport, or transfer (in-country) any item subject to the EAR when an entity that is listed on the Entity List, or any entity using an address identified on the Entity List as presenting a high risk of diversion to activities of concern, is a party to the transaction as described in § 748.5(c) through (f) of the EAR unless otherwise authorized or excluded in this section. License exceptions may not be used unless authorized in the Entity List entry for the entity that is party to the transaction or for an address that presents a high diversion risk that is used by a party to the transaction. Applications for licenses required by this section will be evaluated as stated in the relevant Entity List entry, in addition to any other applicable review policy stated elsewhere in the EAR.
(1) [Reserved]
(2) Entity List foreign-“direct product” (FDP) license requirements, review policy, and license exceptions—(i) Footnote 1 entities. You may not, without a license or license exception, reexport, export from abroad, or transfer (in-country) to or within any destination or to any end user or party any foreign-produced item subject to the EAR pursuant to § 734.9(e)(1) of the EAR. All license exceptions described in part 740 of the EAR are available for foreign-produced items that are subject to this license requirement if all terms and conditions of the applicable license exception are met and the restrictions in § 740.2 of this EAR do not apply. The sophistication and capabilities of technology in items is a factor in license application review; license applications for foreign-produced items subject to a license requirement by this paragraph (a)(2) that are capable of supporting the “development” or “production” of telecom systems, equipment, and devices below the 5G level (e.g., 4G, 3G) will be reviewed on a case-by-case basis.
(ii) [Reserved]
(iii) Footnote 3 entities. License requirements for foreign-produced items involving entities marked with footnote 3 are described in § 746.8(a)(3). The license review policy is set forth in the entry in supplement no. 4 to this part for each entity with a footnote 3 designation.
(iv) Footnote 4 entities. You may not, without a license, reexport, export from abroad, or transfer (in-country) to or within any destination or to any end user or party any foreign-produced item subject to the EAR pursuant to § 734.9(e)(2) of the EAR. See § 744.23 for additional license requirements that may apply to these entities. The license review policy for foreign-produced items subject to this license requirement is set forth in the entry in supplement no. 4 to this part for each entity with a footnote 4 designation.
(b) Criteria for revising the Entity List. Entities for which there is reasonable cause to believe, based on specific and articulable facts, that the entity or party to the transaction that is operating at an address that presents a high diversion risk has been involved, is involved, or poses a significant risk of being or becoming involved in activities that are contrary to the national security or foreign policy interests of the United States and those acting on behalf of such entities or conducting operations at an address that presents a high diversion risk may be added to the Entity List pursuant to this section. An entity or address that presents a high diversion risk may pose a significant risk through certain circumstances that may be outside of its own control or in the case of addresses with high diversion risk, outside the control of certain parties to the transaction operating at such address that presents a high diversion risk. Such circumstances that may place an entity or address that presents a high diversion risk include situations involving a sustained lack of cooperation by a host government authority, for example, by preventing an end-use check from being conducted, that effectively prevents BIS from determining compliance with the EAR. This section may not be used to place any U.S. person, as defined in § 772.1 of the EAR, on the Entity List. Paragraphs (b)(1) through (5) of this section provide an illustrative list of activities that could be or represent a significant risk of being contrary to the national security or foreign policy interests of the United States, including the foreign policy interest of the protection of human rights throughout the world.
(1) Supporting persons engaged in acts of terror.
(2) Actions that could enhance the military capability of, or the ability to support terrorism of governments that have been designated by the Secretary of State as having repeatedly provided support for acts of international terrorism.
(3) Transferring, developing, servicing, repairing or producing conventional weapons in a manner that is contrary to United States national security or foreign policy interests or enabling such transfer, service, repair, development, or production by supplying parts, components, technology, or financing for such activity.
(4) Prevention of the accomplishment of an end use check conducted by or on behalf of BIS or the Directorate of Defense Trade Controls of the Department of State by:
(i) The entity or persons that own or control an address that presents a high diversion risk precluding access to; refusing to provide information about; or providing false or misleading information about parties to the transaction or the item to be checked. The conduct in this example includes: expressly refusing to permit a check; providing false or misleading information; or engaging in dilatory or evasive conduct that effectively prevents the check from occurring or makes the check inaccurate or useless. A nexus between the conduct of the party or address that presents a high diversion risk to be listed and the failure to produce a complete, accurate and useful check is required, even though an express refusal by the party to be listed is not required; or
(ii) A sustained lack of cooperation by the host government to schedule and facilitate the completion of an end-use check of entities identified on the Unverified List pursuant to § 744.15, resulting in sufficient concern such that the End-User Review Committee believes that prior review of exports, reexports, or transfers (in-country) involving the entity and the possible imposition of license conditions or license denial enhance BIS's ability to prevent violations of the EAR.
(5) Engaging in conduct that poses a risk of violating the EAR when such conduct raises sufficient concern that the End-User Review Committee believes that prior review of exports, reexports, or transfers (in-country) involving the party and the possible imposition of license conditions or license denial enhances BIS's ability to prevent violations of the EAR.
(c) Additional prohibition on persons informed by BIS. BIS may inform persons, either individually by specific notice or through amendment to the EAR, that a license is required for:
(1) A specific export, reexport, or transfer (in-country) because there is an unacceptable risk that the export, reexport, or transfer (in-country) is intended to circumvent the license requirement imposed on an entity or address that presents a high diversion risk listed in supplement no. 4 to this part; or
(2) The export, reexport, or transfer (in-country) of specified items to a certain party because there is an unacceptable risk that the party is acting as an agent, front, or shell company for an entity listed in supplement no. 4 to this part, or is otherwise assisting that listed entity in circumventing the license requirement set forth in that entity's entry in supplement no. 4 to this part; or
(3) The export, reexport, or transfer (in-country) of specified items to a certain party or address that presents a high diversion risk because there is reasonable cause to believe, based on specific and articulable facts, that the entity has been involved, is involved, or poses a significant risk of being or becoming involved in activities that are contrary to the national security or foreign policy interests of the United States, including the foreign policy interest of the protection of human rights throughout the world, and those acting on behalf of such entity or that an address that presents a high diversion risk of being used to divert items subject to the EAR to end-uses or end-users inconsistent with U.S. foreign policy or national security interests. Specific notice will be given only by, or at the direction of, the Principal Deputy Assistant Secretary for Strategic Trade and Technology Security or the Deputy Assistant Secretary for Strategic Trade. When such notice is provided orally, it will be followed by written notice within two working days signed by the Principal Deputy Assistant Secretary for Strategic Trade and Technology Security or the Principal Deputy Assistant Secretary's or Deputy Assistant Secretary's designee. The specific notice will include the license requirement, limitations on use of license exceptions, and license application review policy with which that exporter, re-exporter, or transferor must comply pursuant to this paragraph (c)(3). The ERC may add such entities or addresses that present a high diversion risk to the Entity List in supplement no. 4 to this part.