Illegal Diversion Law and Legal Definition

In the context of antitrust law, illegal diversion refers to practices that prevent the discovery of the ultimate recipient of goods. For example, Export Administration Regulations (EAR) apply to transactions that involve parties who are listed on the Unverified List (UVL). The UVL identifies parties who has previously been involved in a transaction in which a pre-license check (PLC) or a post-shipment verification (PSV) couldn't be conducted. Therefore, there are doubts about the final disposition of goods exported to them. The EAR promotes the need for exporters to “know your customer.” Export Control Reform and the amendments to the EAR stress the responsibility on exporters to verify their customers and the ultimate use of exported items in order to prevent illegal diversion.