International Law Advisory - BIS Amends EAR, Adding Five Iranian Entities to the Entity List

Pursuant to the notification procedure for restricted entities under the Enhanced Proliferation Control Initiative, the US Department of Commerce’s Bureau of Industry and Security (BIS) published a final rule on July 12, 2007 modifying the Export Administration Regulations (EAR) to add five Iranian entities to the Entity List (see 72 Fed Reg. 38008-38010).

The EAR contains an Entity List in Supplement No. 4 to Part 744 of the EAR (15 C.F.R. Part 744, Supp. No. 4) that imposes license requirements for export transactions involving certain listed foreign end users who have been determined to present an unacceptable risk of diversion to developing weapons of mass destruction or missiles used to deliver these weapons. The Entity List was established to inform the public of who those entities are, and to impose more stringent export licensing requirements on such entities.

The new rule adds the following Iranian entities to the Entity List:

1. Atomic Energy Organization of Iran (a.k.a. Sazeman-E Energy Atomi), P.O. Box 14144–1339, End of North Karegar Avenue, Tehran, Iran;
2. Kala Electric Company (a.k.a. Kalaye Electric Company), 33 Fifteenth (15th) Street, Seyed-Jamal-Eddin-Assad Abadi Avenue, Tehran, Iran; 
3. Mesbah Energy Company (MEC), 77 Armaghan Gharbi Street, Valiasr Blve,Tehran, Iran;
4. Shahid Bakeri Industrial Group (SBIG), Tehran, Iran; and
5. Shahid Hemmat Industrial Group (SHIG), Damavand Tehran Highway, Tehran, Iran. 

For all exports or re-exports of commodities subject to the EAR, the effect of this rule is to create an explicit license requirement for such transactions. Given that all exports from the United States (other than certain informational materials and humanitarian items) are already restricted to Iran, the more significant aspect of this rule is for non-US persons who may be re-exporting commodities subject to the EAR to Iran. For example, US-origin commodities classified as “EAR 99” can often be re-exported to Iran by a non-US person without a license. However, the EAR prohibit all re-exports of US-origin commodities from non-US persons to entities on the Entity List, including those newly added by the final rule cited above.

If you have any questions regarding the new rule, please contact Ed Krauland at 202.429.8083.