BIS Adds 15 Parties to Entity List; Justice Department Indicts Five Individuals for Export Control Violations

Today the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) today announced that it will add fifteen parties to the Entity List. The parties, which are located in China, Hong Kong, Iran and Singapore, were added to the Entity List for their alleged roles in a procurement network involving products subject to the jurisdiction of the Export Administration Regulations and International Traffic in Arms Regulations.

The following eight parties will be added to the Entity List since it was determined that they have engaged in actions that could enhance Iran's military capability and because their conduct and deceptive practices pose a risk of ongoing violations of the Export Administration Regulations: 

• Corezing International
• Hia Soo Gan Benson
• Hossein Ahmad Larijani
• Lim Kow Seng
• Lim Yong Nam
• NEL Electronics Pte. Ltd.
• Paya Electronic Complex
• Wong Yuh Lan.

According to BIS these parties participated in a network that engaged in schemes to divert U.S.-origin items to Iran and/or to China by using shifting/circuitous routes and false or omitted information on shipping documentation in an attempt to conceal their activities. These parties are also alleged to have obtained ITAR-controlled antennas designed for use in military radars and aircraft, and exported them to Singapore and Hong Kong. The individuals named above were indicted today by the Justice Department for their alleged roles in conspiring to export U.S.-origin components to Iran that were later found in IEDs in Iraq.

The following seven parties will be added to the Entity List based on evidence that they aided and/or facilitated the activities of the procurement network.

• Action Global, Amaze International and OEM Hub Co., Ltd., all Hong Kong entities, allegedly served as front companies and are otherwise related to the other entities named today.

• Ms. Luo Jie, director of Corezing International, Action Global and Amaze International, is being added on the basis of information indicating that she was involved in the procurement and attempted procurement of U.S. power amplifiers intended for end-users in China, as well as in the diversion of various U.S.-origin goods through Hong Kong to Iran.

• Parto Systems Tehran, an Iranian freight forwarder, is being added based on information indicating that it was involved in the diversion of U.S.-origin items to Iran and is closely associated with Hossein Ahmad Larijani.

• Surftech Electronics, a Singapore corporation established by Hia Soo Gan Benson, is co-located with Corezing International and allegedly sought to purchase certain U.S.-origin items for shipment to Iran.

• Mr. Zhou Zhenyong, director of Corezing International, is being added based on information that he was specifically involved in the procurement and attempted procurement of U.S.-origin items, including U.S.-origin munitions items destined for end-users in China and/or Iran.

While a BIS license is required to export, reexport or transfer any item subject to the EAR to any of the persons listed above, BIS has established a policy of a presumption of denial for all license applications.

The BIS Entity List, found in Supplement Number 4 to Part 744 of the Export Administration Regulations, includes the names of businesses, research institutions, government organizations and individuals that have been identified as being involved in activities that merit additional scrutiny and licensing requirements.

The entries on the Entity List specify the license requirements and license review policy that are applicable to shipments to each listed entity. In some cases, a license will be required to ship items classified as EAR99 to the customer, even when a license would not normally be required. In other cases, all items subject to the Export Administration Regulations will require a license. The export license review policy also varies from entity to entity. In some cases, there is a presumption of approval or denial and, in other cases, the license will be reviewed by BIS on a case-by-case basis. Significant penalties can be imposed against parties that engage in transactions with parties on the Entity List without the appropriate license.

Update: The final rule associated with this announcement was published in the Federal Register on October 31, 2011 and is effective on that date.