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 Type | Description | Recipient's Responsibility |
| Supplier List | Letter 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 Request | Letter 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 Letter | Letter 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" Letter | Letter 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.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.