ENTITY LIST SCREENING HEADACHES

On 13th September, the often very interesting Export Control Blog posted an item reflecting on problems that can arise when US exporters have to check the Entity List, which contains the names of foreign entities subject to US export control restrictions.  The Export Administration Regulations (EAR) contain a list of names of certain foreign persons – including businesses, research institutions, government and private organizations, individuals, and other types of legal persons – that are subject to specific licence requirements for the export, re-export and/or transfer (in-country) of specified items. These persons comprise the so-called “Entity List”. The posting concerns the case of Mohawk Logistics Corporation, recently subject to penalties for the export of items to institutions on the Entity List without the required licence – though, in both instances, Mohawk screened against the list, but things went wrong.  For example, one of the exports was for the University of Electronic Science and Technology of China.  Rather than screen against the full name of the university, Mohawk just screened the university’s commonly-used acronym — UESTC.   As a result, it failed to flag the transaction.  Another export was to a Russian entity, the abbreviation for which was translated into VNIIEF from the Cyrillic, but was still missed by the company.  It seems that due to change in the listing, searches for VNIIEF, the common name of that entity, prior to 2011 would not have turned up anything – and so the posting cautions, don’t (just) search on abbreviations or acronyms.  The same argument should apply to sanctions list checks too.

https://www.exportlawblog.com/

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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