Do the license requirements and policies in the Entity List also apply to the parent company if a subsidiary is a listed entity?
In most cases, Entity List license requirements apply only to the specific companies listed. The Entity List license requirements generally do not extend to parent or sister companies unless specified, although all of the other license requirements set forth in the EAR, including the end-use based restrictions in part 744 of the EAR, continue to apply. BIS recommends that the U.S. company conduct more detailed due diligence to clarify the nature of the parent/subsidiary relationship as well as the end-use of the requested items. Note that BIS considers that there is a red flag on transactions involving companies owned by listed entities and recommends that exporters undertake detailed due diligence.
In most cases, Entity List license requirements apply only to the specific companies listed and their direct subordinates. The Entity List license requirements generally do not extend to parent or sister companies unless specified, although all of the other license requirements set forth in the EAR, including the end-user and end-use based restrictions in Part 744 of the EAR, continue to apply. BIS recommends that the exporters, reexporters, and transferors conduct more detailed due diligence to clarify the nature of the parent/subsidiary relationship as well as the end-use of the requested items. Note that BIS considers that there is a “red flag” on transactions involving companies that own or are otherwise affiliated with listed entities and recommends that exporters undertake detailed due diligence.
Related Questions
- Do the license requirements and policies of the Entity List apply to branch office and subsidiaries if the parent company is the listed entity?
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