Addition and Removal of Certain Persons on the Entity List: Addition of Persons Acting Contrary to the National Security or Foreign Policy Interests of the United States; Removal of Persons Based on ERC Annual Review and Removal Requests; and Entry Modified for Purposes of Clarification

AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Final rule.

SUMMARY:

This rule amends the Export Administration Regulations (EAR) by adding thirteen additional persons to the Entity List (Supplement No. 4 to Part 744) on the basis of Section 744.11 of the EAR. The persons that are added to the Entity List have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. This rule also amends the Export Administration Regulations by removing three persons from the Entity List. BIS removes one of the three persons from the Entity List as a result of a determination made by the United States Government during the annual review of the Entity List conducted by the End-User Review Committee (ERC). The two remaining persons are removed from the Entity List in response to a request for removal. Finally, this rule makes a correction to the address of one person listed on the Entity List. The Entity List provides notice to the public that certain exports and reexports to parties identified on the Entity List require a license from the Bureau of Industry and Security (BIS) and that availability of License Exceptions in such transactions is limited.

DATES:

Effective Date: This rule is effective July 21, 2009. Although there is no formal comment period, public comments on this regulation are welcome on a continuing basis.

ADDRESSES:

You may submit comments, identified by RIN 0694-AE59, by any of the following methods:

E-mail: publiccomments@bis.doc.gov. Include “RIN 0694-AE59” in the subject line of the message.

Fax: (202) 482-3355. Please alert the Regulatory Policy Division, by calling (202) 482-2440, if you are faxing comments.

Mail or Hand Delivery/Courier: Timothy Mooney, U.S. Department of Commerce, Bureau of Industry and Security, Regulatory Policy Division, 14th St. & Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230, Attn: RIN 0694-AE59.

Send comments regarding the collection of information associated with this rule, including suggestions for reducing the burden, to Jasmeet K. Seehra, Office of Management and Budget (OMB), by e-mail to Jasmeet_K._Seehra@omb.eop.gov, or by fax to (202) 395-7285; and to the Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, 14th St., & Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230. Comments on this collection of information should be submitted separately from comments on the final rule (i.e., RIN 0694-AE59)—all comments on the latter should be submitted by one of the three methods outlined above.

FOR FURTHER INFORMATION CONTACT:

Elizabeth Scott Sangine, End-User Review Committee, Office of the Assistant Secretary, Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-3343, Fax: (202) 482-3911, E-mail: bscott@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

The Entity List provides notice to the public that certain exports and reexports to parties identified on the Entity List require a license from the Bureau of Industry and Security (BIS) and that availability of License Exceptions in such transactions is limited. BIS first published the Entity List in February 1997 as part of its efforts to inform the public of entities that have engaged in activities that could result in an increased risk of diversion of exported and reexported items to weapons of mass destruction (WMD) programs. Since its initial publication, grounds for inclusion on the Entity List have expanded to activities sanctioned by the Department of State and activities contrary to U.S. national security and/or foreign policy interests.

ERC Entity List Decisions

Pursuant to Supplement No. 5 to part 744 (Procedures for End-User Review Committee Entity List Decisions) of the EAR, the ERC, composed of representatives of the Departments of Commerce, State, Defense, Energy and, where appropriate, the Treasury, makes all decisions to make additions to, removals from or changes to the Entity List. The ERC is chaired by the Department of Commerce and makes all decisions to add an entry to the Entity List by majority vote and all decisions to remove or modify an entry by unanimous vote.

The ERC made a determination to add thirteen persons to the Entity List on the basis of § 744.11 (License Requirements that Apply to Entities Acting Contrary to the National Security or Foreign Policy Interests of the United States) of the EAR. The thirteen entities added to the Entity List consist of three persons in Germany, five persons in Hong Kong and five persons in Ireland.

The ERC reviewed § 744.11(b) (Criteria for revising the Entity List) in making the determination to add these persons to the Entity List. Under that paragraph, entities for which 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 and those acting on behalf of such entities may be added to the Entity List pursuant to § 744.11.

Paragraph (b) of § 744.11 includes an illustrative list of activities that could be contrary to the national security or foreign policy interests of the United States. This illustrative list of activities of concern is described under paragraphs (b)(1)-(b)(5). The persons being added to the Entity List under this rule have been determined by the ERC to be involved in activities that could be contrary to the national security or foreign policy interests of the United States.

In addition, the ERC made a determination to remove three entities from the Entity List. As outlined in Supplement No. 5 to part 744, under the last paragraph of that Supplement, the ERC conducts a systematic review of the Entity List. Based upon the results of that annual review, the ERC made a determination that one person in Pakistan should be removed from the Entity List, because this person is not engaged in activities that would warrant including the person on the Entity List.

The ERC also made a determination to remove two other persons, located in the United Arab Emirates, as a result of a request for removal submitted by these two listed entities. Based upon the review of the information provided in the removal request, in accordance with § 744.16 and further review that was conducted by the ERC's member agencies of these end-users, the ERC determined that these two persons should be removed from the Entity List. The ERC decision to remove Feroz Jafar and Telectron took into account these two listed persons' cooperation with the U.S. Government, as well as these listed persons' assurances of future compliance with the EAR. In accordance with § 744.16(c), the Deputy Assistant Secretary for Export Administration has sent written notification to these persons informing them of the ERC's decision to remove them from the Entity List.

Additions to the Entity List

This rule implements the decision of the ERC to add thirteen persons to the Entity List on the basis of § 744.11 of the EAR. For all of the thirteen persons added to the Entity List, the ERC specified a license requirement for all items subject to the EAR and established a license application review policy of a general policy of denial. The license requirement applies to any transaction in which items are to be exported or reexported to such persons or in which such persons act as purchaser, intermediate consignee, ultimate consignee, or end-user. In addition, no license exceptions are available for shipments to those persons being added to the Entity List.

Specifically, this rule adds the following thirteen persons to the Entity List:

Germany

(1) Christof Schneider, Margaretenweg #10, 42929 Wermelskirchen, Germany;

(2) Hans Werner Schneider, Bertha von Suttner Weg #1, 42929 Wermelskirchen, Germany; and

(3) Schneider GMBH, Thomas Mann Str. 35-37, 42929 Wermelskirchen, Germany; and P.O. Box 1523, Wermelskirchen, 42908 DE; and Thomas Mann Str., 35-37, P.O. Box 1523, Wermelskirchen, 42908 DE.

Hong Kong

(4) Able City Development Limited, Unit C, 9/F Neich Tower, 128 Gloucester Road, Wanchai, Hong Kong; and Unit 401, Harbour Ctr., Tower 2, 8 Hok Cheung Street, Hung Hom, Kowloon, Hong Kong;

(5) Sik Yin Ngai, a.k.a., Spencer Ngai, Unit 401, Harbour Ctr., Tower 2, 8 Hok Cheung Street Hung Hom, Kowloon, Hong Kong;

(6) Siu Ching Ngai, a.k.a., Terry Ngai, Unit C, 9/F Neich Tower, 128 Gloucester Road, Wanchai, Hong Kong;

(7) Sysdynamic Limited, Unit 716A, 7/F Enterprise Place (Building 9), No. 5 Science Park West Avenue, Hong Kong Science Park, Shatin, New Territories, Hong Kong; and Unit 401, Harbour Ctr., Tower 2, 8 Hok Cheung Street, Hung Hom, Kowloon, Hong Kong; and

(8) Tam Shue Ngai, Unit C, 9/F Neich Tower, 128 Gloucester Road, Wanchai, Hong Kong.

Ireland

(9) Mac Aviation Group, a.k.a., Mac Aviation Limited, Cloonmull House, Drumcliffe, County Sligo, Ireland;

(10) Mac Aviation Nigeria, Cloonmull House, Drumcliffe, County Sligo, Ireland;

(11) Sean Byrne, Cloonmull House, Drumcliffe, County Sligo, Ireland;

(12) Sean McGuinn, Cloonmull House, Drumcliffe, County Sligo, Ireland; and

(13) Thomas McGuinn a.k.a., Tom McGuinn, Cloonmull House, Drumcliffe, County Sligo, Ireland.

A BIS license is required for the export or reexport of any item subject to the EAR to any of the persons listed above, including any transaction in which any of the listed persons will act as purchaser, intermediate consignee, ultimate consignee, or end-user of the items. This listing of these persons also prohibits the use of License Exceptions (see part 740 of the EAR) for exports and reexports of items subject to the EAR involving such persons.

Removal From the Entity List

One person being removed from the Entity List with this rule is removed on the basis of the results of the annual review of the Entity List that was conducted by the ERC in accordance with the procedures outlined in Supplement No. 5 to part 744. The entity is located in Pakistan:

Pakistan

(1) Karachi CBW Research Institute, University of Karachi's Husein Ebrahim Jamal Research Institute of Chemistry (HEJRIC).

Two additional persons are being removed under this rule as a result of the submission of a formal request for removal based upon the procedures outlined in § 744.16 of the EAR. These two entities are located in the United Arab Emirates:

United Arab Emirates

(2) Feroz Jafar, Al Salam St., P.O. Box 2946 Abu Dhabi, U.A.E.; and

(3) Telectron, Al Salam St., P.O. Box 2946, Abu Dhabi, U.A.E.

The removal of these three persons from the Entity List eliminates the existing license requirements in Supplement No. 4 to part 744 for exports and reexports to these persons. However, the removal of these persons from the Entity List does not relieve persons of other obligations under part 744 of the EAR or under other parts of the EAR. Neither the removal of a person from the Entity List nor the removal of Entity List-based license requirements relieves persons of their obligations under General Prohibition 5 in § 736.2(b)(5) of the EAR which provides that, “you may not, without a license, knowingly export or reexport any item subject to the EAR to an end-user or end-use that is prohibited by part 744 of the EAR.” Nor do such removals relieve persons of their obligation to apply for export or reexport licenses required by other provisions of the EAR. BIS strongly urges the use of Supplement No. 3 to part 732 of the EAR, “BIS's ‘Know Your Customer' Guidance and Red Flags,” when persons are involved in transactions that are subject to the EAR.

Correction to the Entity List

This rule revises the address provided for one person that was listed on the Entity List from the United Arab Emirates. Specifically, this rule to correct an inadvertent removal of the name of the city where the person is located, which occurred in a December 5, 2008 (73 FR 73999) final rule that revised this entry.

This rule revises the name and address of this one listed person, as follows:

United Arab Emirates

(1) Advanced Technology General Trading Company, Dubai, U.A.E. (See alternate address under Kuwait).

Savings Clause

Shipments of items removed from eligibility for a License Exception or export or reexport without a license (NLR) as a result of this regulatory action that were on dock for loading, on lighter, laden aboard an exporting or reexporting carrier, or en route aboard a carrier to a port of export or reexport, on July 21, 2009, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export or reexport without a license (NLR) so long as they are exported or reexported before August 20, 2009. Any such items not actually exported or reexported before midnight on August 20, 2009, require a license in accordance with this rule.

Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as extended by the Notice of July 23, 2008, 73 FR 43603 (July 23, 2008), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act.

Rulemaking Requirements

1. This rule has been determined to be not significant for purposes of Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves collections previously approved by the OMB under control numbers 0694-0088, “Multi-Purpose Application,” which carries a burden hour estimate of 58 minutes to prepare and submit form BIS-748. Miscellaneous and recordkeeping activities account for 12 minutes per submission. Total burden hours associated with the Paperwork Reduction Act and Office and Management and Budget control number 0694-0088 are expected to increase slightly as a result of this rule.

3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military or foreign affairs function of the United States. (See 5 U.S.C. 553(a)(1)). Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., are not applicable.

List of Subjects in 15 CFR Part 744

• Exports
• Reporting and recordkeeping requirements
• Terrorism

Accordingly, part 744 of the Export Administration Regulations (15 CFR parts 730-774) is amended as follows:

PART 744—[AMENDED]

1. The authority citation for 15 CFR part 744 continues to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 12947, 60 FR 5079, 3 CFR, 1995 Comp., p. 356; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice of July 23, 2008, 73 FR 43603 (July 25, 2008); Notice of November 10, 2008, 73 FR 67097 (November 12, 2008).

2. Supplement No. 4 to part 744 is amended:

a. By removing under Pakistan, this one Pakistani entity “Karachi CBW Research Institute, University of Karachi's Husein Ebrahim Jamal Research Institute of Chemistry (HEJRIC)”;

b. By removing under United Arab Emirates, these two U.A.E. entities “Feroz Jafar, Al Salam St., P.O. Box 2946, Abu Dhabi, U.A.E.”; and “Telectron, Al Salam St., P.O. Box 2946, Abu Dhabi, U.A.E.”;

c. By adding under Germany, in alphabetical order, three German entities;

d. By adding under Hong Kong, in alphabetical order, five Hong Kong entities;

e. By adding, in alphabetical order, the country of Ireland and five Irish entities; and

f. By revising under United Arab Emirates, in alphabetical order, one U.A.E. entity.

The additions and revision read as follows: