BIS End-Use Checks: What Happens When an Export Control Officer Calls Your Customer 

BIS has published a plain-language FAQ on its End-Use Check program, the on-site visits its Export Control Officers conduct at foreign consignees and end users of U.S.-origin items. This article explains what those visits are, what your foreign customer will be asked to produce, the statutory and regulatory authority behind the request, and the consequences when a check cannot be completed. It matters because the penalty for a failed check falls on the exporter’s ability to ship, not only on the foreign party being visited. 

Key Takeaways 

• An End-Use Check (EUC) is BIS verifying, on site and overseas, that your foreign customer is who it says it is and used your items the way the license or the EAR required. 
• A failed or incomplete check does not need a finding of wrongdoing to hurt you. The customer can land on the Unverified List, license exceptions disappear, and every shipment then requires a UVL statement. 
• Since October 2022, a check that stays incomplete for 60 days after Unverified List placement, because a host government blocks it, triggers Entity List proceedings. 
• The exporter’s exposure is set before the visit ever happens: by the accuracy of the license application, the quality of the paper trail, and whether the foreign party was told what to expect. 
• Diaz Trade Law prepares exporters and their foreign customers for EUCs, manages the document response, and handles Unverified List removal. 

EUC: A Compliance Event You Do Not Control 

Most exporters treat the license approval, or the determination that no license is required, as the end of the compliance story. BIS does not. Under the Export Control Reform Act of 2018, Section 1755(b)(1)(E), the President is directed to establish policies and procedures for end-use monitoring of exports, reexports, and in-country transfers of items subject to the Export Administration Regulations. BIS carries that mandate out through End-Use Checks conducted globally by Export Control Officers posted at U.S. Embassies and Consulates. 

An EUC is an on-site verification of a party to a transaction. According to the BIS FAQ, the check confirms the legitimacy and reliability of the end use and end user, monitors compliance with license conditions, and confirms that items were used, re-exported, or transferred in accordance with the EAR. There are two types: 

• A Pre-License Check (PLC) is conducted before export. It establishes the bona fides of the parties named in a pending license application, assesses diversion risk, and validates the information on the application. BIS states it aims to complete PLCs quickly so the application can be processed within a reasonable time. 
• A Post-Shipment Verification (PSV) is conducted after the shipment has moved. PSVs apply to licensed transactions, to shipments made under a license exception, and to NLR (no license required) transactions where BIS wants to confirm the item is not going to an unauthorized end use or user. 

That last category is the one exporters underestimate. A PSV can be triggered on a shipment that never touched a license. The absence of a licensing requirement is not the absence of BIS interest. 

The visit happens at the foreign party’s facility, in the foreign party’s language, on the foreign party’s records. The exporter is typically not in the room. Yet the exporter is the one who loses license exceptions, faces added scrutiny on future applications, and has to explain to the next customer why a named consignee is on a U.S. government list. 

What the Foreign Party Should Expect 

The FAQ describes the process in practical terms, and exporters should share it with overseas customers before a check is scheduled. 

Contact comes from the U.S. Embassy or Consulate, or in some countries from the host government. Legitimate correspondence arrives on BIS, Embassy, or Consulate letterhead, or from an official U.S. Government email domain such as @bis.doc.gov, @trade.gov, or @state.gov. The letter identifies the specific transactions, actual or proposed, that BIS wants to confirm and asks the company to schedule the visit as soon as possible. Anything that does not match that pattern should be verified before any documents are shared. 

During the visit, the Export Control Officer will explain the purpose and walk through the transactions identified in the notification letter. BIS will want to meet with someone who understands the overall business and someone who can speak to the specific transactions. The company will be asked to produce transactional records, including air waybills, invoices, and customs declarations, sufficient to show the transaction occurred as described. The officer will want to see the item, or evidence of its disposition, and confirm the end user and end use match what was represented to BIS. 

The regulatory hook is Section 762.7(b) of the EAR. Foreign recipients of items subject to the EAR are required to produce all records required to be kept and make them available for inspection and copying upon request by an authorized BIS official. Accepting U.S.-origin controlled items carries that obligation with it, whether or not the foreign party ever read the regulation. 

What Happens When a Check Fails 

Section 744.15(c) of the EAR permits BIS to add a foreign person to the Unverified List (UVL) when an end-use check cannot be completed satisfactorily for reasons outside the U.S. Government’s control. The illustrative circumstances are: the subject cannot demonstrate the disposition of items subject to the EAR; the existence or authenticity of the subject cannot be verified, for example because it cannot be located or contacted; or the host government’s lack of cooperation prevents the check from being conducted. 

There is no requirement that BIS find a violation. A customer that moved offices without updating its registration, a receptionist who did not pass along an Embassy letter, or a plant manager who could not find the invoice for a two-year-old shipment can each produce the same result as a diversion. 

Unverified List placement is not a warning letter. Three consequences follow for the exporter: 

• License exceptions are unavailable for any export, reexport, or in-country transfer involving a UVL party. Shipments that previously moved under an exception now require a license or must stop. 
• Before shipping any item subject to the EAR to a UVL party without a license, the exporter must obtain a UVL statement from that party, signed by an authorized representative, certifying identity, acknowledging the EAR obligations, and agreeing to future end-use checks. 
• Electronic Export Information filing requirements apply to shipments involving UVL parties regardless of value or destination. 

Since BIS’s October 2022 rule, the ladder has a second rung. Where the reason the check cannot be completed is host government non-cooperation, and the check remains incomplete 60 days after the party is added to the Unverified List, BIS initiates proceedings to move the party to the Entity List. That rule was written with a particular jurisdiction in mind, and the bulk of the affected parties have been in China, but the regulatory text is not limited to any country. 

The firm has covered the broader arc of BIS list-based enforcement, including the first Military End User List, the Affiliates Rule extending Entity List restrictions to majority-owned subsidiaries, and BIS’s guidance to financial institutions on screening these lists. End-Use Checks are the mechanism that feeds those lists. 

Exporters Should Prepare Before the Letter Arrives 

The outcome of an End-Use Check is largely decided before the Export Control Officer books a flight. Five measures materially change the result. 

1. Get the license application right the first time. A PLC validates the information on the application. Addresses, entity names, corporate registrations, and end-use descriptions that do not match what the officer finds on the ground are the fastest route to an unverifiable finding. Confirm the consignee’s registered address and legal name against local corporate records before filing, not after. 
2. Build the disposition record into the sale. The foreign party will be asked to demonstrate where the items are. Exporters of controlled equipment should require serial-number-level delivery confirmation, installation records, and, for items subject to license conditions, periodic certifications of continued use. These records should be retained for at least five years, matching the EAR recordkeeping period in Part 762, and should be retrievable by the foreign party on short notice. 
3. Brief the foreign customer in writing. Most failed checks are failures of communication, not compliance. Distributors and end users should know that a letter from a U.S. Embassy is legitimate, that the visit is routine, that refusing it or ignoring it has consequences for their own supply, and that they should notify the exporter immediately when contacted. A one-page briefing memo attached to the distribution agreement accomplishes this, and it belongs in the export compliance plan as a standing procedure. Commerce, Treasury, and Justice have jointly reminded foreign-based persons that they are directly bound by U.S. export laws; the briefing memo should say so. 
4. Put EUC cooperation into the contract. Distribution and sales agreements for controlled items should require the counterparty to cooperate with U.S. Government end-use verification, retain and produce transactional records on request, notify the exporter of any contact from BIS or an Embassy, and refrain from re-export or transfer without prior written consent. A breach of that clause should be a termination event. This gives the exporter leverage if a customer decides a visit is inconvenient. 
5. Respond to a PLC or PSV request as a legal matter, not a courtesy call. When a customer reports that BIS has made contact, the exporter should review the transaction file, confirm the records the customer intends to produce are accurate and consistent with the license application and the EEI filing, and correct any discrepancies through counsel before the visit. A discrepancy discovered by an Export Control Officer becomes an enforcement referral. A discrepancy identified by the exporter and addressed through a voluntary self-disclosure is treated very differently under the BIS penalty guidelines. 

If a Customer Lands on the Unverified List 

Removal is available. Section 744.15(d) permits a party to request removal by submitting a request to BIS, and removal generally follows a successful end-use check. In practice, this means arranging for the check that failed to be completed, which requires the foreign party to be located, cooperative, and able to produce the records. The exporter usually has to drive that process, because the foreign party rarely understands what is being asked and the exporter is the one losing the business. 

The removal request should document the reason the original check could not be completed, the corrective steps taken, and the party’s readiness for a new visit. A request that simply asserts the company is legitimate, without addressing why the officer could not verify that on the first attempt, does not move quickly. 

Preparation Makes the Difference 

Exporters that treat End-Use Checks as part of the transaction lifecycle, rather than as a rare enforcement event, complete them without incident. Their customers know what to expect, the records are where they need to be, and the visit confirms what the license application said. Exporters that learn about the program from a Federal Register notice adding their largest distributor to the Unverified List spend the following quarter obtaining UVL statements, applying for licenses they never needed before, and explaining the situation to their bank. 

Diaz Trade Law assists exporters with pre-license diligence on foreign parties, drafting EUC cooperation and recordkeeping provisions for distribution agreements, preparing foreign customers for Pre-License Checks and Post-Shipment Verifications, reviewing transaction files before a visit, voluntary self-disclosures where a discrepancy is identified, and Unverified List removal requests. Contact us at 305-456-3830 or [email protected]. 

Further Reading from Diaz Trade Law 

Bloomberg Law articles by Jennifer Diaz: 

Related Diaz Trade Law blog posts: