Federal Register, Volume 76 Issue 242 (Friday, December 16, 2011)

[Federal Register Volume 76, Number 242 (Friday, December 16, 2011)]
[Rules and Regulations]
[Pages 78146-78149]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32341]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 744

[Docket No. 111202715-1724-01]
RIN 0694-AF46

Addition of Certain Persons to the Entity List; and
Implementation of Entity List Annual Review Changes

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: This rule amends the Export Administration Regulations (EAR)
by adding two persons to the Entity List. The persons who 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. These persons will be listed on the Entity List
under the United Arab Emirates (U.A.E.).
This rule also amends the Entity List on the basis of the annual
review of the Entity List conducted by the End-User Review Committee
(ERC). The ERC conducts the annual review to determine if any entries
on the Entity List should be removed or modified.
This rule removes two persons located in Singapore and two persons
located in Taiwan on the basis of the annual review, and revises the
entry concerning one person located in Malaysia to add an alternate
address.
The Entity List provides notice to the public that certain exports,
reexports, and transfers (in-country) to entities identified on the
Entity List require a license from the Bureau of Industry and Security
(BIS) and that availability of

[[Page 78147]]

license exceptions in such transactions is limited.

DATES: Effective Date: This rule is effective December 16, 2011.

FOR FURTHER INFORMATION CONTACT: Karen Nies-Vogel, Chair, End-User
Review Committee, Office of the Assistant Secretary, Export
Administration, Bureau of Industry and Security, Department of
Commerce, Phone: (202) 482-5991, Fax: (202) 482-3911, Email:
ERC@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

The Entity List (Supplement No. 4 to Part 744) provides notice to
the public that certain exports, reexports, and transfers (in-country)
to entities identified on the Entity List require a license from the
Bureau of Industry and Security and that the availability of license
exceptions in such transactions is limited. Entities are placed on the
Entity List on the basis of certain sections of part 744 (Control
Policy: End-User and End-Use Based) of the EAR.
The ERC, composed of representatives of the Departments of Commerce
(Chair), State, Defense, Energy and, when appropriate, the Treasury,
makes all decisions regarding additions to, removals from, or other
modifications to the Entity List. The ERC 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.

ERC Entity List decisions

Additions to the Entity List

This rule implements the decision of the ERC to add two persons to
the Entity List on the basis of Section 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 two
entries added to the Entity List consist of two persons located in the
U.A.E.
The ERC reviewed Section 744.11(b) (Criteria for revising the
Entity List) in making the determination to add the two persons located
in the U.A.E. to the Entity List. Under that paragraph, persons for
which there is reasonable cause to believe, based on specific and
articulable facts, that the persons have been involved, are involved,
or pose 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 persons may be
added to the Entity List pursuant to Section 744.11. Paragraphs (b)(1)-
(b)(5) of Section 744.11 include an illustrative list of activities
that could be contrary to the national security or foreign policy
interests of the United States.
The two persons in the U.A.E. 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. Specifically, BIS's Office of Export
Enforcement is investigating the presence of Blue Coat internet
filtering devices in Syria and has developed evidence regarding the
parties involved in the transfer of these devices to Syria. Waseem
Jawad, using the company name Infotec, a.k.a., Info Tech, ordered
multiple Blue Coat SG9000-20 Proxy devices in December 2010 from a Blue
Coat authorized distributor in the U.A.E. That authorized distributor
in turn placed an order for the devices with Blue Coat. A December 2010
email notification identified the end-user of the Blue Coat products
for this order as the Ministry of Communication (National Telecom), Al
Fadi Street, Baghdad, Iraq. In February 2011, the devices were shipped
from the United States to the United Arab Emirates, and ownership was
transferred to Waseem Jawad, Info Tech, RAKFTZ, U.A.E. Approximately
three days later, the devices departed the U.A.E. for delivery to
Syria. Several of these devices have been identified by serial number
as the devices being used by the Syrian Telecommunications
Establishment in Damascus, Syria. The investigation is ongoing and
additional parties related to these transactions may be added to the
Entity List in the future.
For the two 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 presumption of denial. The
license requirement applies to any transaction in which items are to be
exported, reexported, or transferred (in-country) 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 exports, reexports, or transfers (in-country) to those
persons being added to the Entity List.
This final rule adds the following two persons under two entries to
the Entity List:

United Arab Emirates

(1) Infotec, a.k.a., Info Tech., Ras Al Khaimah Free Trade Zone
(RAKFTZ), U.A.E.; and
(2) Waseem Jawad, Ras Al Khaimah Free Trade Zone (RAKFTZ), U.A.E.;
and P.O. Box: 25123, Dubai U.A.E.

Annual Review of the Entity List

This rule also amends the Entity List on the basis of the annual
review of the Entity List conducted by the ERC, in accordance with the
procedures outlined in Supplement No. 5 to part 744 (Procedures for
End-User Review Committee Entity List Decisions). The changes from the
annual review of the Entity List that are approved by the ERC are
implemented in stages as the ERC completes its review of entities
listed under different destinations on the Entity List. This rule
implements the results of the annual review for entities located in
Malaysia, Singapore, and Taiwan.
A. Removals From the Entity List
This rule removes four entities from the Entity List, which
consists of two entities from Singapore and two entities from Taiwan.
Specifically, this rule implements the decision of the ERC to remove
two entities, Strive Components and Synoptics Imaging Systems Pte Ltd.,
located in Singapore, and two entities, Christine Sun and In-Tech
Company, a.k.a., In-Tech Telecom, located in Taiwan, from the Entity
List on the basis of the annual review of the Entity List, as follows:

Singapore

(1) Strive Components, Block 10 Toa Payoh Industrial Park Lor 8
01-1221, Singapore, 319062; and
(2) Synoptics Imaging Systems Pte Ltd., 12 Lor Bakar Batu
06-09, Singapore, 348745.

Taiwan

(1) Christine Sun, 7th Floor, Number 17, Zhonghua Rd., Sec 2,
Xinzhuang City, Taipei, Taiwan; and
(2) In-Tech Company, a.k.a., In-Tech Telecom, Number 15, Lane 347,
Jhongjheng Road, Sinjihuang City, Taipei, Taiwan, and 7th Floor, Number
17, Zhonghua Rd., Sec 2, Xinzhuang City, Taipei, Taiwan.
The removal of the above-referenced four entities from the Entity
List eliminates the existing license requirements in Supplement No. 4
to part 744 for exports, reexports and transfers (in-country) to the
four entities. However, the removal of these four entities 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
an entity from the Entity List nor the removal of Entity List-based
license requirements relieves persons of their obligations under
General Prohibition 5 in section 736.2(b)(5) of the EAR which provides
that, ``you may not, without a license, knowingly export

[[Page 78148]]

or reexport any item subject to the EAR to an end-user or end-use that
is prohibited by part 744 of the EAR.'' Additionally these removals do
not relieve persons of their obligation to apply for export, reexport
or in-country transfer 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.
B. Modifications to the Entity List
On the basis of a decision made by the ERC during the annual
review, this rule amends one entry currently on the Entity List under
Malaysia by adding an alternate address, as follows:

Malaysia

(1) VTE Industrial Automation SDN BHD, 97C, Jalan Kenari 23,
Puchong Jaya, Puchong, Selangor, Malaysia; and 45-02, Jalan Kenari 19A,
Puchong Jaya, 47100 Malaysia.

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 December 16, 2011, 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 January 3, 2012. Any such
items not actually exported or reexported before midnight, on January
3, 2012, require a license in accordance with the EAR.
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 August 12,
2011, 76 FR 50661 (August 16, 2011), has continued the Export
Administration Regulations in effect under the International Emergency
Economic Powers Act. BIS continues to carry out the provisions of the
Export Administration Act, as appropriate and to the extent permitted
by law, pursuant to Executive Order 13222.

Rulemaking Requirements

1. Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. 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 43.8 minutes for a manual or electronic submission. Total
burden hours associated with the PRA and OMB control number 0694-0088
are not expected to increase as a result of this rule. You may 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 email to Jasmeet_K._Seehra@omb.eop.gov, or by fax to (202) 395-7285.
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 comment 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)). BIS implements this rule to
protect U.S. national security or foreign policy interests by
preventing items from being exported, reexported, or transferred (in
country) to the persons being added to the Entity List. If this rule
were delayed to allow for notice and comment and a delay in effective
date, then entities being added to the Entity List by this action would
continue to be able to receive items without a license and to conduct
activities contrary to the national security or foreign policy
interests of the United States. In addition, because these parties may
receive notice of the U.S. Government's intention to place these
entities on the Entity List once a final rule was published it would
create an incentive for these persons to either accelerate receiving
items subject to the EAR to conduct activities that are contrary to the
national security or foreign policy interests of the United States and/
or to take steps to set up additional aliases, change addresses, and
take other steps to try to limit the impact of the listing on the
Entity List once a final rule was published. 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 Subject 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]

0
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 January 13, 2011, 76 FR 3009,
January 18, 2011; Notice of August 12, 2011, 76 FR 50661 (August 16,
2011); Notice of November 9, 2011, 76 FR 70391 (November 9, 2011).

0
2. Supplement No. 4 to part 744 is amended:
0
(a) By revising under Malaysia, in alphabetical order, one Malaysian
entity;
0
(b) By removing under Singapore, the two Singaporean entities: ``Strive
Components, Block 10 Toa Payoh Industrial Park Lor 8 01-1221,
Singapore, 319062'' and ``Synoptics Imaging Systems Pte Ltd., 12 Lor
Bakar Batu 06-09, Singapore, 348745'';
0
(c) By removing under Taiwan, the two Taiwanese entities: ``Christine
Sun,

[[Page 78149]]

7th Floor, Number 17, Zhonghua Rd., Sec 2, Xinzhuang City, Taipei,
Taiwan'' and ``In-Tech Company, a.k.a., In-Tech Telecom, Number 15,
Lane 347, Jhongjheng Road, Sinjihuang City, Taipei, Taiwan, and 7th
Floor, Number 17, Zhonghua Rd., Sec 2, Xinzhuang City, Taipei,
Taiwan''; and
0
(d) By adding under United Arab Emirates, in alphabetical order, two
U.A.E. entities:
The additions and revisions read as follows:

Supplement No. 4 to Part 744--Entity List
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License License review Federal Register
Country Entity requirement policy citation
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* * * * * * *
Malaysia

* * * * * * *
VTE Industrial For all items Presumption of 73 FR 54503, 9/22/
Automation SDN BHD, subject to the denial. 08.
97C, Jalan Kenari 23, EAR. (See Sec. 76 FR [INSERT FR
Puchong Jaya, 744.11 of the PAGE NUMBER] 12/
Puchong, Selangor, EAR) 16/11.
Malaysia; and 45-02,
Jalan Kenari 19A,
Puchong Jaya, 47100
Malaysia.

* * * * * * *
United Arab Emirates

* * * * * * *
Infotec, a.k.a., Info For all items Presumption of 76 FR [INSERT FR
Tech, Ras Al Khaimah subject to the denial PAGE NUMBER] 12/
Free Trade Zone EAR. (See Sec. 16/11.
(RAKFTZ), U.A.E. 744.11 of the
EAR)

* * * * * * *
Waseem Jawad, Ras Al For all items Presumption of 76 FR [INSERT FR
Khaimah Free Trade subject to the denial PAGE NUMBER] 12/
Zone (RAKFTZ), EAR. (See Sec. 16/11.
U.A.E.; and P.O. Box: 744.11 of the
25123, Dubai U.A.E. EAR)

* * * * * * *
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Dated: December 12, 2011.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2011-32341 Filed 12-15-11; 8:45 am]
BILLING CODE 3510-33-P