The Bureau of Industry and Security (BIS) End-User Review Committee (ERC) has added several new businesses to its entities list. This list continues to include a focus on aviation companies so it is especially important for ASA members to check these lists before exporting aircraft parts.
One of the aviation companies added to the entities list is the AVIC Research Institute for Special Structures of Aeronautical Composites. This AVIC company is accused of acquiring or attempting to acquire U.S.- origin items in support of China’s military modernization. This is not the only AVIC company that has been sanctioned – the United States has also issued sanctions against these other AVIC companies (do not consider this a complete list!):
- AVIC AVIATION HIGH-TECHNOLOGY COMPANY LIMITED
- AVIC HEAVY MACHINERY COMPANY LIMITED
- AVIC XI’AN AIRCRAFT INDUSTRY GROUP COMPANY LTD.
- AVIC AVIONICS
- AVIC AIRCRAFT CO. LTD.
- AVIC INTERNATIONAL HOLDING CORPORATION
These entities now have a license requirement for all items subject to the export regulations. The BIS license review policy for these companies typically includes a presumption of denial, but there are some exceptions available for some goods, so if you have a potential transaction, you should (1) identify whether government sanctions appear to prohibit the transaction, (2) examine the license presumptions, (3) examine whether the special nature of your transaction changes the presumptions, and (4) consider whether a license may be available for your particular transaction.
Where there is a presumption of denial, there is a significant burden to meet in order to rebut the presumption of denial. An important part of that burden should include a demonstration of the mechanisms that will be use to prevent diversion or redirection of the export from a stated civil end use to a military end use that would not have been licensed. The exporter who wants to get a license should consider this factor, as well as considering the strategies for preventing diversion.
As aviation companies continue to get added to the BIS Entities List, it continues to be very important to check your export customers on every transaction against the Consolidated Screening List.