Legal Definitions - denied persons list

The Denied Persons List is a critical roster maintained by the U.S. Department of Commerce's Bureau of Industry and Security (BIS). This list identifies specific individuals and organizations, both within the United States and in other countries, who have been prohibited from participating in export and reexport transactions involving items subject to U.S. export control regulations.

Essentially, if a person or company appears on this list, they are barred from receiving or facilitating the movement of goods, technology, or software from the United States, or U.S.-origin items from other countries. U.S. companies and individuals are legally forbidden from engaging in any export or reexport activities with anyone appearing on this list, as doing so would constitute a violation of U.S. law.

• Example 1: A U.S. software development company receives an inquiry from a foreign technology firm interested in licensing its advanced data encryption software. Before finalizing the agreement, the U.S. company conducts a mandatory compliance check and discovers that the foreign firm's Chief Technology Officer (CTO), who would be directly involved in the software's implementation, is on the Denied Persons List due to previous violations of export control laws. The U.S. company must decline the licensing agreement.

  Explanation: This illustrates that even indirect involvement through a key individual can trigger the prohibition. The U.S. company cannot proceed with licensing its software (an export transaction) to the foreign firm as long as the CTO, a listed individual, is involved.

• Example 2: A U.S. manufacturer of specialized industrial components receives a large order from a factory located overseas. As part of its due diligence, the U.S. manufacturer screens the foreign factory and its parent company against the Denied Persons List. They find that the parent company, which owns the factory and would be the ultimate recipient and user of the components, is on the list.

  Explanation: In this scenario, the U.S. manufacturer is prevented from exporting its components to the foreign factory because the controlling entity (the parent company) is on the Denied Persons List, making the entire transaction prohibited under U.S. law.

• Example 3: An American university researcher plans to send a sophisticated, U.S.-made laboratory instrument to a collaborating scientist in another country for a joint research project. The university's export compliance office reviews the transaction and discovers that the foreign scientist is listed on the Denied Persons List.

  Explanation: This example demonstrates that even academic or research collaborations involving the transfer of controlled items, like specialized equipment, are considered export transactions. The U.S. university cannot send the instrument to the foreign scientist because the scientist is on the Denied Persons List, regardless of the non-commercial nature of the collaboration.