What exactly is the Entity List? That intentionally reads like a Jeopardy question. It’s the answer to where some of the people and organizations who’ve been sanctioned by the US Bureau of Industry and Security live, trapped like General Zod of Superman II and his companions.
If you’ve been following the news about the US Kaspersky ban or other similar cyber sanctions, you’ve perhaps seen the term. The Entity List is one of several Restricted Party Lists maintained by the US Government of people and organizations to whom international trade is restricted (you likely need an export license) or banned.
When Was It Established?
The Bureau of Industry and Security – BIS (B-I-S, Not Biz) created the Entity List in 1977. BIS is part of the Department of Commerce – for the interest of the hierarchy keeping mechanism in your mind.
You can find all things US government on the Federal Register. Glad this thing isn’t paper.
Why Was It Established?
A story.
International trade’s got a term called the “Destination Control Statement.” It used to be this short clause stating that diversion (of an export) contrary to US law is prohibited. This appears on export documents.
Both the State Department and the Department of Commerce had their own versions, and in 2016, the US government harmonized the statement to cover both Commerce and ITAR-relevant shipments to say essentially that but with more words.
If you’re interested, the info lives here: Part 758.6 of the Export Administration Regulations.
So, the “entities” on the Entity List are considered to be nasty Diverters – escaping the strictures of the Destination Control Statement.
Here’s the whole thing, the now version:
“These items are controlled by the U.S. Government and authorized for export only to the country of ultimate destination for use by the ultimate consignee or end-user(s) herein identified. They may not be resold, transferred, or otherwise disposed of, to any other country or to any person other than the authorized ultimate consignee or end-user(s), either in their original form or after being incorporated into other items, without first obtaining approval from the U.S. government or as otherwise authorized by U.S. law and regulations”
The Ultimate Consignee is the stated party from whom the goods must not be diverted. The goods stop here, yes, yes.
But there’s a part of this I left out – diverters to whom? Well, according to the original definition of the Entity List, diverters to weapons of mass destruction programs.
Hmm.
The modern definition: “[Entities] that are subject to specific license requirements for the export, reexport and/or transfer (in-country) of specified items.”
You can find the Entity List’s current incarnation in a few places:
- eCFR – Supplement No. 4 to Part 744, Title 15 – Entity List
- The Consolidated Screening List, as offered by the US government
- Far savvier software for purchase by private vendors who consolidate a whole bunch of lists for easy ongoing screening and compliance. I might know one very well.
It’s a long list. Each entity points to the Federal Register in one or more places with information about its origin on said list.
What Specifically Does It Do?
The Entity list keeps the name and a bunch of aliases by which the entity may be referred.
Clicking on the Kaspersky Federal Register detail shows that 3 Entities were added together – 1 in the UK and 2 in Russia.
Some detail:
“…based on specific and articulable facts, that the entities have been involved, are involved, or pose a significant risk of being or becoming involved in activities contrary to the national security or foreign policy interests of the United States, pursuant to § 744.11(b). The EAR imposes additional license requirements on, and limits the availability of, most license exceptions for exports, reexports, and transfers (in-country) when a listed entity is a party to the transaction.”
I’m thinking precogs and Minority Report (to continue the movie theme), but I’m not privy to all of the information that went into this designation and decision.
So…naughty things, as defined by many pundits wiser than I aspire to be. Kaspersky’s competitors are all over this, of course, with advertising of “Switch from Kaspersky.”
But this section is about what the Entity List does – it keeps track of listed people and companies and can be screened so that trading partners past, current, and future can cease trade or make necessary licensing modifications to trade with said Entity forthwith and avoid non-compliance woes.
In other words, the burden’s on you, trading partner, to know it’s on the list and what to do with it. The government just publishes the list.
How Often Is It Updated?
Yes. The government updates this list (and many other sibling lists) at its discretion. Interested parties (entities?) can find the information in the Federal Register.
How Do I Avoid Being Listed on It?
This is a harder question. Follow US trade compliance laws, to start. It also helps to not be foreign owned and associated with nefarious or perhaps deemed-to-be-nefarious folks. If you’re concerned, screen yourself.
Why Should I Care?
Compliance. We’ve seen how seriously the current US administration is attempting to be about foreign ownership in companies influential in the US. More on that in the future.
So Now I Know. What Do I Do Next?
Be compliant if you’re in the US. If you’re exporting goods, you should be screening the entities involved in each transaction. There’s an easier way to do that – I alluded to it and will leave that right there.
Individual countries and departments within some countries maintain their own lists. Wise to screen those as well and then determine what to do with matches and close matches. It’s good, too, if your screening mechanism also alerts you when past transactions – likely organizations and people you might ship to again – find themselves on the Entity List or one of its ilk.
Conclusion
This is probably the most attention the Entity List will receive in 2024, so I do hope you enjoyed this foray into it. Perhaps at some point in the future we can have a one-sided Heather blather conversation about the SDN – or Specially Designated Nationals list people and organizations.
The lists go on and on.
