Bureau of Export Administration
December 4, 1998
1. A U.S. company is a
service provider to a listed entity (example: provides engineering services). Is a license
If the services involve the export or reexport of
technology,including technical assistance, subject to the Export
Administration Regulations (EAR), a license is required. Section 772 of the EAR
provides a definition of technology. Also, see the response to question 5
concerning activities of U.S. persons.
2. Can representatives of a U.S. company talk
(e.g., communications by phone, in writing, or in person) to a listed entity about future
Yes, as long as the communications do not involve
the export or reexport of technology subject to the EAR. See the response to question
1 for further guidance.
3. Does an exporter need to get a license in
order to provide a listed entity technical specifications so that the listed entity can
manufacture an item which the U.S. exporter will purchase?
If the technical specifications constitute
technology subject to the EAR, then a license is required. For example, if the technology
qualifies for TSR or TSU to
that country but it is going to a listed entity, a license is required.
4. Do Office of Foreign Asset
Control(OFAC)regulations parallel BXA regulations?
No, they do not. Certain financial-related
sanctions, including sanctions on India and Pakistan that would have been implemented by
OFAC, have been waived by the President. Please contact OFAC for further information on the status of any
5. Can a U.S. person invest
money in a listed entity?
Yes, however, Section 744.6 of the EAR imposes
licensing requirements on exporters and other U.S. persons when they have knowledge that
their activities will directly assist in prohibited proliferation activities. Exporters
and other U.S. persons have obligations under the "Know Your Customer"
guidance and "Red
Flag" indicators, contained in Supplement No. 3 to Part 732 of the EAR.
6. Are exports permitted if a listed entity
is the purchaser or order party but the export is drop-shipped to a benign, unlisted
entity in India or in another country?
If the listed entity is party to the transaction
but is not the Ultimate Consignee or End-User, a license would be required if the entity
takes possession of the goods. A license is always required if the listed entity is either
the Ultimate Consignee or End-User.
7. How does a bank determine if an exporter
qualifies under the saving clause before it pays out on a letter of credit?
There is no regulatory requirement in the EAR
specifying what documents a bank must obtain prior to paying a letter of credit. A bank
should request such information from the exporter (e.g., invoice, bills of lading, air way
bills, etc.) which would satisfy the bank that the export is authorized under the savings
clause. Please note that exporters and other persons have obligations under the "Know
Your Customer" guidance and Red Flag indicators, contained in Supplement No. 3 to
Part 732 of the EAR. In addition, exporters and other persons should be mindful of
Prohibition 10 set out in section 736.2 of the EAR regarding proceeding with transactions
with knowledge that a violation
has occurred or is about to occur.
8. Can a U.S. person provide information in
an open forum in India about how to use a commodity that is classified as EAR99?
Yes, as long as the open forum satisfies the terms
and conditions of section 734.3(b)(3) of the EAR concerning publicly available technology
and software. Supplement No. 1 to Part 734 contains explanatory questions and answers on
publicly available technology and software, including release in an open conference.
9. Can a Special Comprehensive License be
used to ship items to a listed entity?
No. Part 752(a)(1) states "The existence of an
Special Comprehensive License does not supersede an exporter's obligation to request a
separate license as many be required by part 744."
10. Is it a Red Flag when BXA lists an entity
on the Entity List?
11. Can I now send a service person to
service or install equipment which had been sent to an entity on the Entity List prior to
the publication of the India/Pakistan regulations?
If the service or installation involves the export
or reexport of goods, technology, or software subject to the EAR, a license is required.
No License Exceptions are available.
12. Since Bharat Electronics was on the
Entity List prior to November 19 with the requirement for a license for all items subject
to the Export Administration Regulations, not having a classification of EAR99, is it a
mistake in the current listing that Bharat Electronics now requires a license for all
items subject to the Export Administration Regulations?
No, the current regulation is correct.
13. Can products manufactured in-country
(i.e., domestically manufactured in India or Pakistan) be sold to a listed entity?
Domestically manufactured products may be sold to a
listed entity. Please note that there are licensing requirements if you export or reexport
to a listed entity U.S.-origin manufacturing technology or U.S.-origin parts for
incorporation in a foreign- manufactured product. Please note that Section 744.6 of the
EAR imposes licensing requirements on U.S. persons when they have knowledge that their
activities will directly assist in prohibited proliferation activities. See the response
to question 5.
14. What is the licensing policy for
computers with a CTP of under 2,000 to a listed entity?
Computers subject to the Export Administration
Regulations to a listed entity have a presumption of denial. If the listed entity is a
parastatal or private entity and BXA confirms that there is a pre-existing business
arrangement, the licensing policy is presumption of approval. Computers that have a
classification of EAR99 do not require a license to listed military entities.
15. Can warranty services be provided for a
previously exported commodity to a listed entity?
If the services involve the export or reexport of
technology or software subject to the EAR, a license is required.
16. Are the India/Pakistan regulations
intended to prohibit the export of food and other agricultural commodities, which are
exempt under the provisions of Section 102(b)(2) of the Arms Export Control Act (the Glenn
Amendment sanctions), as amended?
No. Consistent with the provisions of section
102(b)(2) of the Arms Export Control Act and the provisions of the Agriculture Export
Relief Act of 1998 (P.L. 105-194), BXA intends to publish in the near future a regulatory
revision to clarify the exemption to cover food and agricultural commodities (which
17. Does the saving clause language relating
to "on dock" refer to the exporter's loading dock or the dock of the exporting
Shipments for actual orders received on or prior to
November 19 must have left the exporter premises by November 19. The items must have been
either aboard an exporting carrier or en route to a port of export (ex. freight forwarder,
airline, any place other than the exporter loading dock) by midnight November 19.
Items that are "exported" electronically
(such as by fax or Internet; or software and technology) had to be out of the control of
the exporter by midnight November 19. If such items were in the control of the exporter
after November 19, you must apply for a license.
All shipments under the "savings clause",
must leave the United States by midnight December 17. Items cannot be stored or send to a
bonded warehouse/foreign-trade zone for later shipment, since for the purpose of export
controls a bonded warehouse/foreign-trade zone is considered within the territory of the
Dual-use Export Control Sanctions: India and Pakistan
December 4, 1998
India-Pakistan Entities: Federal Register
Rule of November 19, 1998 (109KB PDF file)