Today I have good news and bad news. Let’s take the bad news first. Starting on January 21, new rules of the Bureau of Industry and Security (“BIS”) with respect to exports to persons on the mysterious “Unverified List” will require more red tape, including extra license requirements and more paperwork. Now for the bad news. On January 21, everyone on the current Unverified List will be removed from the list. But, don’t get all excited there: BIS starts planning to add people back to the list and will announce the changes in the Federal Register so you’ll be sure to know who’s on the new Unverified List. (You read the Federal Register every day like a good exporter, don’t you?)
Prior to the adoption of the new rules, the presence of a party on the Unverified List meant that BIS had some difficulty with respect to an end-user check for that party and that you, as an exporter, were supposed to treat the presence of that party on the list as a red flag. When the rule goes into effect on January 21, you will need to file an AES statement for every export to a party on the list without regard to whether a license was required or the value of the shipment. (And for those of you who rely on your freight forwarder to file your AES entries, this is going to be fun.) Second, no license exceptions will apply for shipments that require licenses. Third, you’re going to need to get the Unverified party to sign an “Unverified List Statement” for all transactions that don’t require a license. The new rules don’t provide a form for the Unverified List Statement t but just a laundry list of things that you must include in the Statement, including a promise by the Unverified Party to be very, very good and not violate anything in the Export Administration Regulations. Good luck with that, as the kids say.