On July 10, 2024, the Department of Commerce’s Bureau of Industry and Security (BIS) released guidance to provide helpful “best practices” for companies and universities who have received a “supplier list” letters, Project Guardian requests, “red flag” letters, or “is informed” letters from BIS.

These notifications generally require the recipients of the letter to take additional steps when dealing with the identified foreign end users by recognizing and resolving red flags, and/or requesting an export license prior to exporting to these identified end users. The notification guidance is summarized in the table below.

Notification TypeDescriptionRecipient’s Responsibility
Supplier ListLetter from BIS notifying the recipient that a specific foreign party not on one of its public screening lists that has exported to, or facilitated transactions with, destinations or end users of national security or foreign policy concern.Review transactions to determine if any involve the identified parties, determine if “red flags” are present, and resolve the “red flag” risk before filling the order
Project Guardian RequestLetter from BIS asking the recipient to scrutinize transactions with a specific party, or inquiries about a certain product.If such transactions are identified, deny the order and contact their local BIS enforcement agent.
Red Flag LetterLetter from BIS notifying the recipient that one of the recipient’s customers may have illegally reexported or transferred the same type of item that the recipient previously exported to that customer.Conduct additional due diligence on the customer, determine if “red flags” are present, and resolve the “red flag” risk, if possible. This may involve obtaining an export license.
“Is Informed” LetterLetter from BIS notifying the recipient of additional license requirements applicable to specific items going to specific entities and/or destinations, or to specific activities of U.S. persons.Obtain the appropriate authorization as described in the letter.

In addition to providing these helpful guidelines, BIS added a recommendation that exporters regularly screen export transactions against the Trade Integrity Project (TIP) database, which specifically focuses on trade in Common High Priority List (CHPL) items, and displays entities that have shipped CHPL items to Russia since 2023.  BIS encourages screening against the TIP as part of exporters’ regular transaction screening procedures.

Although the notifications by BIS (other than “is informed” letters) may be viewed as suggestions, BIS warns that if a recipient of a BIS notification fails to conduct the proper due diligence or obtain the appropriate authorizations recommended, BIS will view these actions as an aggravating factor in any subsequent enforcement action..  On the other hand, BIS will consider a company or university’s cooperation with a Project Guardian request as a mitigating factor in the event of a later, even unrelated, enforcement action against the entity.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Jana del-Cerro Jana del-Cerro

Maria Alejandra (Jana) del-Cerro is a partner in Crowell & Moring’s Washington, D.C. office and a member of the firm’s International Trade and Government Contracts groups. She advises clients with respect to the U.S. regulation of outbound trade, including U.S. export controls. Jana

Maria Alejandra (Jana) del-Cerro is a partner in Crowell & Moring’s Washington, D.C. office and a member of the firm’s International Trade and Government Contracts groups. She advises clients with respect to the U.S. regulation of outbound trade, including U.S. export controls. Jana works with clients across a broad range of industries, from traditional aerospace and defense manufacturers and multi-national software companies, to start-ups in the technology sector, and she regularly represents them before the Departments of State, Commerce, and Treasury in responding to government inquiries, conducting internal reviews, and in compliance investigations and voluntary disclosures.

Photo of Aryn Gruneisen Aryn Gruneisen

With over a decade of experience working in-house in trade compliance roles, Aryn Gruneisen provides clients with a wealth of knowledge in export controls, sanctions compliance, and trade regulations. Before joining Crowell & Moring, Aryn managed trade compliance programs involving encryption, robotics, avionics,

With over a decade of experience working in-house in trade compliance roles, Aryn Gruneisen provides clients with a wealth of knowledge in export controls, sanctions compliance, and trade regulations. Before joining Crowell & Moring, Aryn managed trade compliance programs involving encryption, robotics, avionics, photonics, semiconductor, and defense-related controls. She has demonstrated success in building risk-based compliance programs with cross-functional teams.

Photo of Edward Goetz Edward Goetz

Edward Goetz is the Director for International Trade Services in Crowell & Moring’s Washington, D.C. office. Edward leads the firm’s international trade analysts providing practice support to the International Trade Group in the areas of customs regulations, trade remedies, trade policy, export control…

Edward Goetz is the Director for International Trade Services in Crowell & Moring’s Washington, D.C. office. Edward leads the firm’s international trade analysts providing practice support to the International Trade Group in the areas of customs regulations, trade remedies, trade policy, export control, economic sanctions, anti-money laundering (AML), anti-corruption/anti-bribery, and antiboycott. He has extensive government experience providing information and interpretive guidance on the International Traffic in Arms Regulations (ITAR) concerning the export of defense articles, defense services, and related technical data. He also assists attorneys with matters involving the Export Administration Regulations (EAR), economic sanctions, AML, anti-corruption/anti-bribery, and trade remedies.