Red Flag – ABC GmbH’s address is similar to one of the parties found on BIS’, the Office of Foreign Assets Control’s (“OFAC”) or other U.S. Government agency’s denied parties/persons lists.
The existence of this “red flag” means that Missiles, Inc., will need to perform additional due diligence, e.g., research, to confirm that ABC GmbH is not the party on the subject denied party list. This is a difficult “red flag” to overcome, particularly when viewed in conjunction with the other “red flags” explained below. Missiles, Inc., must have persuasive evidence, not merely a statement in writing, that ABC GmbH is an entirely different organization from the listed entity at a different address. As companies who are prohibited from receiving U.S. exports will take significant steps to conceal their “prohibited” status, Missiles, Inc., must conduct extensive due diligence to overcome this “red flag”.
Red Flag – ABC GmbH refused to provide an end-use statement regarding how it will utilize the missile engine components after Missiles, Inc., requested the end-use statement.
This “red flag” is a very serious one, particularly in light of the sensitive end use and extensive controls applicable worldwide on missile components. Detailed end-use statements are absolutely essential for items like missile components given that the U.S. Government will only approve export to vetted Governmental end users in “friendly” countries. This “red flag” may also present itself in other obvious ways such as the customer providing limited information on end-use when requested. If the potential customer or purchasing agent understands U.S. export regulations and believes it knows the classification of your product, they may try and tell you that there is no licensing requirement for the export of your product to their country. Therefore, end-use information is not required. The correct response, per EAR Part 744, or the ITAR (if applicable) is that the U.S. Government prohibits sales of any item if it will be used in nuclear production or any unsafeguarded nuclear facility; or any missile or unmanned aerial vehicle capable of a range of 300km or greater; or any chemical or biological end-use. Thus, your company requires end-use information to rule out the requirement for a license per EAR Part 744.