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UNVERIFIED LIST

Q: Which government agency controls this list?
A: This list is controlled by the Bureau of Industry and Security (BIS), which is part of the Commerce Department.

Q: What is the Unverified List?
A: The Unverified List includes names and countries of foreign persons who in the past were parties to a transaction with respect to which the Bureau of Industry and Security (BIS) could not conduct a pre-license check (PLC) or a post-shipment verification (PSV) for reasons outside of the U.S. Government's control. Any transaction to which a listed person is a party will be deemed by BIS to raise a Red Flag. The Red Flag applies to the person on the Unverified List regardless of where the person is located in the country included on the list.

Q: Where is the Unverified List published?
A: The Unverified List is published on the Bureau of Industry and Security's website.

Q: How does the Bureau of Industry and Security define a Red Flag?
A: Red Flags are abnormal circumstances in a transaction that indicate that the export may be destined for an inappropriate end-use, end-user, or destination. A Red Flag raises a reasonable suspicion that the transaction is a violation of the Export Administration Regulations (EAR).

Q: What are the Red Flags that a transaction could be a violation of the Export Administration Regulations (EAR)?
A: The Bureau of Industry and Security has posed the following list of circumstances which may indicate that the EAR is being violated:

The customer or its address is similar to one of the parties found on the Bureau of Industry and Security’s list of Denied Persons.
The customer or purchasing agent is reluctant to offer information about the end-use of the item.
The product's capabilities do not fit the buyer's line of business, such as an order for sophisticated computers for a small bakery.
The item ordered is incompatible with the technical level of the country to which it is being shipped, such as semiconductor manufacturing equipment being shipped to a country that has no electronics industry.
The customer is willing to pay cash for a very expensive item when the terms of sale would normally call for financing.
The customer has little or no business background.
The customer is unfamiliar with the product's performance characteristics but still wants the product.
Routine installation, training, or maintenance services are declined by the customer.
Delivery dates are vague, or deliveries are planned for out of the way destinations.
A freight forwarding firm is listed as the product's final destination.
The shipping route is abnormal for the product and destination.
Packaging is inconsistent with the stated method of shipment or destination.
When questioned, the buyer is evasive and especially unclear about whether the purchased product is for domestic use, for export, or for re-export.

Q: How suspicious is an exporter required to be?
A: If there are no Red Flags in the information that comes to the exporter, then the exporter should be able to proceed with a transaction in reliance on information you have received. That is, absent Red Flags (or an express requirement in the Export Administration Regulations), there is no affirmative duty upon exporters to inquire, verify, or otherwise "go behind" the customer's representations.

Q: What should an exporter do when a Red Flag is raised?
A: When Red Flags are raised in the information that comes to an exporter, that party has a duty to check out the suspicious circumstances and inquire about the end-use, end-user, or ultimate country of destination.