The Entity List and how entities are added

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1. What the Entity List is

The Entity List, supplement no. 4 to part 744 of the Export Administration Regulations (EAR), identifies persons, or addresses of persons, reasonably believed to be involved in activities contrary to U.S. national security or foreign policy interests (15 CFR 744.16). It also covers those posing a significant risk of becoming involved in such activities. Entries are added under sections of part 744, on end-user and end-use controls, and part 746, on embargoes and other special controls.

The Bureau of Industry and Security (BIS) may use section 744.11 to impose foreign policy license requirements, limit license exceptions and set license review policy (15 CFR 744.11). These apply in addition to the rest of the EAR. BIS does so by adding an entity, or an address presenting a high diversion risk, to the Entity List with the applicable requirements stated in its entry. It may instead inform a party by specific notice.

2. The license requirement

A license is required, to the extent the Entity List specifies, for any item subject to the EAR when a listed entity is a party to the transaction (15 CFR 744.11(a)). The same applies to any entity using a listed high diversion risk address. Party to the transaction has the meaning given in section 748.5(c) through (f). The specific requirement for each entity or address appears in the License Requirement column of the list (15 CFR 744.16(a)).

License exceptions may not be used unless the entry for the entity or address authorizes them (15 CFR 744.11(a)). Applications are evaluated as the entry states, in addition to any other review policy in the EAR. The review policy for each entity or address is in the License Review Policy column (15 CFR 744.16(c)(1)). Entries marked with certain footnotes carry further license requirements for foreign-produced items under the foreign direct product rules (15 CFR 744.11(a)(2)).

3. Limited license exceptions

No license exceptions are available for specified items going to listed entities or addresses, with two exceptions (15 CFR 744.16(b)). One covers certain items listed in section 740.2(a)(5) for specific listed entities, to ensure the safety of civil aviation and the safe operation of commercial passenger aircraft. The other covers entities added under section 744.20, to the extent the list specifies.

4. Who may be added

An entity may be added on reasonable cause to believe, based on specific and articulable facts, that it has been or is involved in such activities, or poses a significant risk of becoming involved (15 CFR 744.11(b)). The same applies to parties operating at a high diversion risk address, and to those acting on behalf of such entities. A significant risk may arise from circumstances outside the entity’s control. One example is a sustained lack of cooperation by a host government that prevents an end-use check.

The section may not be used to place any U.S. person on the Entity List (15 CFR 744.11(b)). The rule gives an illustrative list of activities that may be contrary to U.S. interests, including the foreign policy interest in protecting human rights worldwide.

5. The illustrative activities

The first is supporting persons engaged in acts of terror (15 CFR 744.11(b)(1)). The second is actions that could enhance the military capability of, or ability to support terrorism of, governments the Secretary of State has designated as repeated supporters of international terrorism (15 CFR 744.11(b)(2)). The third is transferring, developing, servicing, repairing or producing conventional weapons contrary to U.S. interests (15 CFR 744.11(b)(3)). Enabling such activity by supplying parts, components, technology or financing is included.

The fourth is preventing an end-use check by or for BIS or the State Department’s Directorate of Defense Trade Controls (15 CFR 744.11(b)(4)). That covers the entity, or those owning or controlling a high diversion risk address, precluding access, refusing information or giving false or misleading information (15 CFR 744.11(b)(4)(i)). It also covers dilatory or evasive conduct that effectively prevents a check or makes it inaccurate or useless. A nexus between the conduct and the failed check is required, though an express refusal is not. A further case is a sustained lack of host government cooperation with checks on Unverified List entities, where the End-User Review Committee believes prior review of transactions would help BIS prevent violations (15 CFR 744.11(b)(4)(ii)).

The fifth is conduct posing a risk of violating the EAR, where the End-User Review Committee believes prior review of the party’s transactions would help BIS prevent violations (15 CFR 744.11(b)(5)).

6. Notices about circumvention

BIS may inform persons, by specific notice or by amending the EAR, that a license is required in three cases (15 CFR 744.11(c)). The first is a specific transaction with an unacceptable risk of circumventing the license requirement on a listed entity or address (15 CFR 744.11(c)(1)). The second is specified items to a party at unacceptable risk of acting as an agent, front or shell company for a listed entity (15 CFR 744.11(c)(2)).

The third is specified items to a party or high diversion risk address where the reasonable cause standard for listing is met (15 CFR 744.11(c)(3)). Specific notice comes only from, or at the direction of, the Principal Deputy Assistant Secretary for Strategic Trade and Technology Security or the Deputy Assistant Secretary for Strategic Trade. An oral notice is confirmed in writing within two working days. The notice states the license requirement, the limits on license exceptions and the review policy that apply.

7. The End-User Review Committee

The End-User Review Committee (ERC) generally decides additions to, removals from and other changes to the Entity List (15 CFR 744.16(d)). It is made up of representatives of the Departments of Commerce, which chairs it, State, Defense and Energy, and where appropriate the Treasury. BIS implements section 744.11 in line with ERC decisions, or decisions of the body to which a matter is escalated (15 CFR 744.11). The ERC follows the procedures in supplement no. 5 to part 744.

BIS may remove an entity that is no longer engaged in the listed activities and is unlikely to engage in them, or is no longer at significant risk (15 CFR 744.11). It may remove an address that no longer presents a high diversion risk, for example after compliance education or effective client screening at that address.

8. High diversion risk addresses

In limited circumstances BIS may publish an address on the Entity List without an entity name (15 CFR 744.16(f)). That can happen when several listed entities share an address, or BIS does not know the name of an entity there. The entry then applies to all entities using that address. An applicant should name the specific entity on the license application and state that the address is on the Entity List. The wider structure of part 744 is covered in how EAR end-use and end-user controls work.

Key terms

Entity List	Supplement no. 4 to part 744, with license requirements stated entry by entry.
High diversion risk address	An address listed without an entity name, binding all entities using it.
ERC	The End-User Review Committee, chaired by Commerce.
Specific and articulable facts	The evidential standard for adding an entity.
Front or shell company	A party used to circumvent a listed entity’s license requirement.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

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