Revisions to the Export Administration Regulations: Auxiliary and Miscellaneous Items That No Longer Warrant Control Under the United States Munitions List and Items on the Wassenaar Arrangement Munitions List, 29564-29575 [2012-12124]
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29564
Proposed Rules
Federal Register
Vol. 77, No. 97
Friday, May 18, 2012
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 742, 772 and 774
[Docket No. 111229800–2073–01]
RIN 0694–AF51
Revisions to the Export Administration
Regulations: Auxiliary and
Miscellaneous Items That No Longer
Warrant Control Under the United
States Munitions List and Items on the
Wassenaar Arrangement Munitions
List
Bureau of Industry and
Security, Department of Commerce.
ACTION: Proposed rule.
AGENCY:
The Bureau of Industry and
Security (BIS) publishes this action to
propose how auxiliary and
miscellaneous military equipment and
related articles the President determines
no longer warrant control under
Category XIII (Auxiliary Military
Equipment) of the United States
Munitions List (USML) would be
controlled under the Commerce Control
List (CCL) in new Export Control
Classification Numbers (ECCNs) 0A617,
0B617, 0C617, 0D617, and 0E617 as part
of the proposed new ‘‘600 series’’ of
ECCNs.
This rule proposes also to integrate
into those five new ECCNs items within
the scope of Wassenaar Arrangement
Munitions List (WAML) Category 17
that would be removed from the USML,
or that are not specifically identified on
the USML or CCL but that are currently
subject to USML jurisdiction. Finally,
this rule proposes to control some items
now classified under ECCNs 0A018,
0A918 and 0E018 under new ECCNs
0A617 and 0E617. This action would
consolidate the above-mentioned
auxiliary and miscellaneous military
equipment and related articles on the
CCL in the proposed new ‘‘600 series.’’
This rule is one of a planned series
proposing how various types of articles
that the President determines, as part of
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SUMMARY:
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the Administration’s Export Control
Reform Initiative, no longer warrant
control on the USML under the
International Traffic in Arms
Regulations (ITAR), would be controlled
on the CCL in accordance with the
requirements of the Export
Administration Regulations (EAR). This
proposed rule is being published in
conjunction with a proposed rule from
the Department of State, Directorate of
Defense Trade Controls, which would
amend the list of articles controlled by
USML Category XIII.
DATES: Comments must be received by
July 2, 2012.
ADDRESSES: You may submit comments
by any of the following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. The identification
number for this rulemaking is BIS–
2012–0014.
• By email directly to
publiccomments@bis.doc.gov. Include
RIN 0694–AF51 in the subject line.
• By mail or delivery to Regulatory
Policy Division, Bureau of Industry and
Security, U.S. Department of Commerce,
Room 2099B, 14th Street and
Pennsylvania Avenue NW., Washington,
DC 20230. Refer to RIN 0694–AF51.
FOR FURTHER INFORMATION CONTACT:
Michael Rithmire, Office of National
Security and Technology Transfer
Controls, Bureau of Industry and
Security, U.S. Department of Commerce,
Telephone: (202) 482–6105, Email:
Michael.Rithmire@bis.doc.gov.
SUPPLEMENTARY INFORMATION:
Background
On July 15, 2011, as part of the
Administration’s ongoing Export
Control Reform Initiative, the Bureau of
Industry and Security (BIS) published a
proposed rule (76 FR 41958) (herein the
‘‘July 15 proposed rule’’) that set forth
a framework for how to transfer articles
the President determines, in accordance
with section 38(f) of the Arms Export
Control Act (AECA) (22 U.S.C. 2778(f)),
no longer warrant control on the United
States Munitions List (USML) to control
under the Commerce Control List (CCL)
in Supplement No. 1 to Part 774 of the
Export Administration Regulations
(EAR). That framework included a
proposal by BIS describing a new ‘‘600
series’’ set of Export Control
Classification Numbers (ECCNs) to
control defense articles that move to the
CCL from the USML, as well as
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Wassenaar Arrangement Munitions List
(WAML) items. Specifically, the
proposed new ‘‘600 series’’ entries
would capture WAML and formerly
USML end items and related items that
have been removed from the USML or
that are not specifically identified on
the USML or CCL. It would also control
some items now classified on the CCL.
These actions would consolidate control
of munitions items and related articles
on the CCL.
On November 7, 2011 (76 FR 68675),
BIS published a proposed rule (herein
the ‘‘November 7 proposed rule’’)
proposing several changes to the
framework initially proposed in the July
15 proposed rule.
Following the structure of the July 15
and November 7 proposed rules, this
action proposes to control in new
ECCNs 0A617, 0B617, 0C617, 0D617,
and 0E617: Auxiliary and miscellaneous
military equipment and related items
from WAML 17 that would be removed
from USML Category XIII under the
International Traffic in Arms
Regulations (ITAR) because the
President determines they no longer
warrant control under USML Category
XIII; items not specifically identified on
the USML or CCL, but that currently are
subject to USML jurisdiction; and items
ending in ‘‘018’’ on the CCL.
The proposed changes described in
this rule and the State Department’s
proposed amendments to Category XIII
of the USML are based on a review of
the USML by the Defense Department,
which worked with the Departments of
State and Commerce in preparing the
proposed rules. That review focused on
identifying the types of articles that are
now controlled by USML Category XIII
and other relevant USML Categories that
are either: (i) Inherently military and
otherwise warrant control on the USML;
or (ii) a type common to civil
applications, possessing parameters or
characteristics that provide a critical
military or intelligence advantage to the
United States, and that are almost
exclusively available from the United
States. If an article satisfied either or
both of those criteria, the article remains
on the USML. If an article did not
satisfy either criterion, but was
determined, nonetheless, to be a type of
article that is now on the corresponding
USML or the Munitions List of the
Wassenaar Arrangement on Export
Controls for Conventional Arms and
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Dual-Use Goods and Technologies
(Wassenaar Arrangement Munitions List
or WAML), then it has been identified
in one of the new ECCNs in this
proposed rule. The license
requirements, license policies and other
EAR-specific controls for such items
that are proposed in this action would,
when considered in the context of the
other proposed amendments to the
USML and the CCL, enhance national
security by: (i) Allowing for greater
interoperability with North Atlantic
Treaty Organization (NATO) and other
allies while maintaining and expanding
robust controls that, in some instances,
include prohibitions on exports or
reexports destined for other countries or
intended for proscribed end users and
end uses; (ii) enhancing the U.S. defense
industrial base by, for example,
reducing the current incentives for
foreign companies to design out or
avoid U.S.-origin ITAR-controlled
content, particularly with respect to
generic, unspecified parts and
components; and (iii) permitting the
U.S. Government to focus its resources
on controlling, monitoring,
investigating, analyzing, and, if need be,
prohibiting exports and reexports of
more significant items to destinations,
end users, and end uses of greater
concern than NATO allies and other
multi-regime partners.
Pursuant to section 38(f) of the AECA,
the President shall review the USML ‘‘to
determine what items, if any, no longer
warrant export controls under’’ the
AECA. The President must report the
results of the review to Congress and
wait 30 days before removing any such
items from the USML. The report must
‘‘describe the nature of any controls to
be imposed on that item under any
other provision of law.’’ 22 U.S.C.
2778(f)(1).
As noted above, this action proposes
to control under the EAR auxiliary and
miscellaneous military equipment and
related articles currently in USML
Category XIII under the ITAR that the
President determines no longer warrant
control on the USML. If implemented,
this rule would control under the EAR:
Items from WAML Category 17 that
would be removed from USML Category
XIII; items not specifically identified on
the USML or CCL but that currently are
subject to USML jurisdiction; and items
ending in ‘‘018’’ on the CCL,
specifically, some items now classified
under ECCNs 0A018, 0A918 and 0E018
under new ECCNs 0A617 and 0E617.
This would consolidate the abovementioned auxiliary and miscellaneous
military equipment and related articles
on the CCL in a proposed new ‘‘600
series.’’ As this rule describes the
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controls that would be in place for
miscellaneous items, it also specifies
how the CCL would be amended to
clarify where an item may be controlled
under another USML Category or ECCN.
In the July 15 proposed rule, BIS
proposed creating a series of new
ECCNs to control items that: (i) Would
be moved from the USML to the CCL;
or (ii) are listed on the Wassenaar
Arrangement Munitions List and are
already controlled elsewhere on the
CCL. That proposed rule referred to this
series as the ‘‘600 series’’ because the
third character in each of the new
ECCNs would be a ‘‘6.’’ The first two
characters of the ‘‘600 series’’ ECCNs
serve the same function as described for
any other ECCN in § 738.2 of the EAR.
The first character is a digit in the range
0 through 9 that identifies the Category
on the CCL in which the ECCN is
located. The second character is a letter
in the range A through E that identifies
the product group within a CCL
Category. In the ‘‘600 series,’’ the third
character is the number 6. With few
exceptions, the final two characters
identify the WAML category that covers
items that are the same or similar to
items in a particular ‘‘600 series’’ ECCN.
This proposed rule would create five
new ‘‘600 series’’ ECCNs in CCL
Category 0 (ECCNs 0A617, 0B617,
0C617, 0D617, and 0E617). ECCN 0A617
would cover miscellaneous equipment,
materials, and related commodities,
including crew kits. ECCN 0B617 would
cover test, inspection, and production
‘‘equipment’’ and related commodities
‘‘specially designed’’ for the
‘‘development’’ or ‘‘production’’ of
commodities controlled by ECCN 0A617
or USML Category XIII. ECCN 0C617
would cover miscellaneous materials
‘‘specially designed’’ for military use.
ECCN 0D617 would cover ‘‘software’’
‘‘specially designed’’ for the
‘‘development,’’ ‘‘production,’’
operation, installation, maintenance,
repair, overhaul or refurbishing of
commodities controlled by 0A617,
‘‘equipment’’ controlled by 0B617, or
materials controlled by 0C617. ECCN
0E617 would cover ‘‘technology’’
‘‘required’’ for the ‘‘development,’’
‘‘production,’’ operation, installation,
maintenance, repair, overhaul or
refurbishing of commodities controlled
by 0A617 ‘‘equipment’’ controlled by
0B617, materials controlled by 0C617,
or ‘‘software’’ controlled by 0D617.
BIS will publish additional Federal
Register notices containing proposed
amendments to the CCL that will
describe proposed controls for
additional categories of articles the
President determines no longer warrant
control under the USML. The State
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Department will publish, concurrently,
proposed amendments to the USML that
correspond to the BIS notices. BIS will
also publish proposed rules to further
align the CCL with the WAML and the
Missile Technology Control Regime
Equipment, Software and Technology
Annex.
Detailed Description of Changes
Proposed by This Rule
This proposed rule would create five
new ‘‘600 series’’ ECCNs in CCL
Category 0—0A617, 0B617, 0C617,
0D617, and 0E617—that would clarify
the EAR controls that apply to auxiliary
and miscellaneous military equipment
and related articles the President
determines no longer warrant control
under USML Category XIII. This
category also applies to items from
WAML Category 17 that would be
removed from USML Category XIII;
items not specifically identified on the
USML or CCL but that currently are
subject to USML jurisdiction; and items
ending in ‘‘018’’ on the CCL,
specifically, some items now classified
under ECCNs 0A018, 0A918 and 0E018
under new ECCNs 0A617 and 0E617.
This action would consolidate the
above-mentioned auxiliary and
miscellaneous military equipment and
related articles on the CCL in a
proposed new ‘‘600 series’’ consistent
with the regulatory construct identified
in the July 15 proposed rule. Finally,
this rule would add a corresponding
new definition to section 772.1 of the
EAR.
The proposed changes are discussed
in more detail below.
New ECCN 0A617: Miscellaneous
Equipment, Materials, and Related
Commodities
ECCN 0A617.a would control
construction equipment ‘‘specially
designed’’ for military use, including
such equipment ‘‘specially designed’’
for transport in aircraft controlled by
USML Category VIII(a) or proposed
ECCN 9A610.a (proposed in the
November 7 rule); and ‘‘parts,’’
‘‘components’’ and ‘‘accessories and
attachments’’ ‘‘specially designed’’
therefor, including crew protection kits
used as protective cabs. Such items
currently are controlled under ECCN
0A018.a as ‘‘construction equipment
built to military specifications,
including equipment specially designed
for airborne transport; and specially
designed parts and accessories for such
construction equipment, including crew
protection kits used as protective cabs,’’
and are identified in WAML Category
17.b.
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ECCN 0A617.b would control
concealment and deception equipment
‘‘specially designed’’ for military
application that are not controlled in
USML Category XIII(g), as well as
‘‘parts,’’ ‘‘components,’’ ‘‘accessories
and attachments’’ specially designed
therefor. ECCN 0A617.c would control
ferries, bridges (other than those
described in ECCN 0A606 or USML
Category VII), and pontoons if the
ferries, bridges or pontoons are
‘‘specially designed’’ for military use,
also identified in WAML Category 17.m.
Although not explicitly named or
described on the USML, these items are
currently controlled by USML Category
VII(g). ECCN 0A617.d would control test
models ‘‘specially designed’’ for the
‘‘development’’ of defense articles
controlled by the USML or commodities
controlled in the ‘‘600 series.’’ Such
items are identified in WAML Category
17.n. Although not explicitly named or
described on the USML, such items
would be controlled in relation to the
defense article they model, such as
items in USML Categories VII(g) and
VIII(h). ECCN 0A617.e. would control
photointerpretation, stereoscopic
plotting and photogrammetry
equipment that would not be controlled
by USML Category XIII(a) or elsewhere
in the USML, as well as ‘‘parts,’’
‘‘components,’’ ‘‘accessories and
attachments’’ ‘‘specially designed’’
therefor. ECCN 0A617.f would control
‘‘metal embrittlement agents’’, currently
controlled by USML Category XIII(i) but
not within the scope of the revised
Category XIII the State Department has
proposed. The term ‘‘metal
embrittlement agents’’ would be defined
in the EAR the same way it is now
defined in the ITAR.
Paragraphs .g through .x would be
reserved for possible future use. Unlike
other proposed Category rules
previously published as a part of the
Export Control Reform Initiative, ECCN
0A617, and the other ECCNs in the
0X617 series, would not contain a catchall control in the ‘‘.x’’ subparagraph for
all parts and components ‘‘specially
designed’’ for items in that category
because neither USML Category XIII nor
WAML Category 17 contain such a
catch-all for auxiliary or miscellaneous
military equipment. To the extent a part
or component is controlled in this
ECCN, it is described in the applicable
subparagraphs.
Paragraph .y would control other
commodities, as listed in the .y
subparagraphs. Specifically, ECCN
0A617.y.1 would control containers
‘‘specially designed’’ for military use,
which are currently identified in WAML
Category 17.l. ECCN 0A617.y.2 would
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control military field generators, which
are currently identified in WAML 17.k.
ECCN 0A617.y.3 would control military
power-controlled searchlights and
related items. Such items are currently
classified under ECCN 0A918.a as
‘‘miscellaneous military equipment.’’
Paragraphs y.4 through y.98 would be
reserved for future use.
Finally, to the extent an item referred
to in WAML 17 is already clearly
controlled in another existing USML
Category or ECCN, then the ‘‘related
controls’’ note at the beginning of
proposed ECCN 0A617 would identify
where in the CCL and/or USML it is
controlled.
New ECCN 0B617: ‘‘Equipment’’
‘‘Specially Designed’’ for Commodities
Controlled by ECCN 0A617.a or USML
Category XIII
ECCN 0B617.a would control test,
inspection, and production
‘‘equipment’’ not controlled by USML
Category XIII(k) ‘‘specially designed’’ for
the ‘‘production’’ or ‘‘development’’ of
commodities controlled by ECCN 0A617
or USML Category XIII. Paragraphs .b
through .x would be reserved for
possible future use.
ECCN 0B617.y would control specific
test, inspection, and production
‘‘equipment’’ ‘‘specially designed’’ for
the ‘‘production’’ or ‘‘development’’ of
commodities controlled by ECCN 0A617
(except 0A617.y) and ‘‘parts,’’
‘‘components,’’ and ‘‘accessories and
attachments’’ ‘‘specially designed’’
therefor. Since this proposed rule does
not list specific equipment under
paragraph .y, sub-paragraphs .y.1
through .y.98 would be reserved for
possible future use.
A note to 0B617 explains that field
engineer equipment ‘‘specially
designed’’ for use in a combat zone and
mobile repair shops ‘‘specially designed
or modified to service military
equipment, which are identified in
WAML Categories 17.d and 17.j,’’
respectively, are classified under ECCN
0B617 to the extent that the items are
not included in USML XIII(k).
New ECCN 0C617: Miscellaneous
Materials ‘‘Specially Designed’’ for
Military Use
ECCN 0C617.a would control
materials, coatings and treatments for
signature suppression, ‘‘specially
designed’’ for military use and that are
not controlled by the USML or ECCNs
1C001 or 1C101. Paragraphs .b through
.x would be reserved for possible future
use. ECCN 0C617.y would control
materials ‘‘specially designed’’ for
military use, which are currently
identified in WAML Category 17.c.
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However, this proposed rule would not
include in paragraph .y those items that
are ‘‘specially designed’’ for defense
articles on the USML. Because this
proposed rule does not list specific
materials under paragraph .y, subparagraphs .y.1 through .y.98 would be
reserved for possible future use.
Of particular significance to this rule,
as noted in the November 7 rule,
materials currently controlled by USML
Category XIII(f), not identified in
another USML Category, and not
identified in ECCN 0C617 through this
proposed rule, will likely be captured in
other ‘‘600 series’’ ECCNs published in
future proposed rules. In each instance,
the materials will likely be classified in
the C entry related to the end items for
which the materials are specially
designed. For example, as stated in the
November 7 proposed rule, materials
specially designed for military aircraft
that are currently controlled under
USML Category XIII(f) would be
captured by ECCN 9C610, which
controls materials ‘‘specially designed’’
for military aircraft controlled by ECCN
9A610.
New ECCN 0D617: ‘‘Software’’
‘‘Specially Designed’’ for Items
Controlled by ECCN 0A617, 0B617 or
0C617
ECCN 0D617.a would control
‘‘software’’ ‘‘specially designed’’ for the
‘‘development,’’ ‘‘production,’’
operation, installation, maintenance,
repair, overhaul or refurbishing of
commodities controlled by ECCN
0A617, ‘‘equipment’’ controlled by
ECCN 0B617, or materials controlled by
ECCN 0C617. Consistent with the other
proposed ‘‘600 series’’ software controls,
the .y paragraphs for ECCN 0D617
would control specific ‘‘software’’
‘‘specially designed’’ for the
‘‘production,’’ ‘‘development,’’ or
operation or maintenance of
commodities controlled by ECCN
0A617.y, 0B617.y or 0C617.y.
Paragraphs .b through .x would be
reserved for possible for future use.
Because this proposed rule does not list
specific materials under paragraph .y,
sub-paragraphs .y.1 through .y.98 also
would be reserved for possible future
use.
New ECCN 0E617: ‘‘Technology’’
‘‘Required’’ for Items Controlled by
ECCN 0A617, 0B617, 0C617 or 0D617
ECCN 0E617.a would control
‘‘technology’’ ‘‘required’’ for the
‘‘development,’’ ‘‘production,’’
operation, installation, maintenance,
repair, overhaul or refurbishing of
commodities controlled by ECCN
0A617, ‘‘equipment’’ controlled by
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ECCN 0B617, materials controlled by
ECCN 0C617, or ‘‘software’’ controlled
by ECCN 0D617. Items controlled by
ECCN 0E617 would include
‘‘technology’’ currently in ECCN 0E018
for the ‘‘production’’ of crew protection
kits used as protective cabs (currently in
ECCN 0A018.a and proposed for ECCN
0A617). Paragraphs .b through .x would
be reserved for possible for future use.
Subparagraph .y.1 of ECCN 0E617
would control specific ‘‘technology’’
‘‘required’’ for the ‘‘development,’’
‘‘production,’’ operation, installation,
maintenance, repair, overhaul or
refurbishing of items controlled by
ECCNs 0A617.y, 0B617.y, 0C617.y or
0D617.y. ECCN 0E617.y.1 would control
‘‘technology’’ for military powercontrolled searchlights and related
items, which would be classified under
proposed ECCN 0A617.y.3 (moving
from ECCN 0A918.a). The ‘‘technology’’
for such items is currently not classified
on the CCL, but if this rule is
implemented, it would be classified
under ECCN 0E617.y.1. Subparagraphs
.y.2 through .y.98 would be reserved for
possible future use.
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Including ‘‘.y.99’’ Paragraphs in ‘‘600
Series’’ ECCNs
ECCNs 0A617, 0B617, 0C617, 0D617
and 0E617 would also contain a
paragraph ‘‘.y.99,’’ that would control
any item that: (i) Has been determined,
in an applicable commodity jurisdiction
determination issued by the U.S.
Department of State, to be subject to the
EAR; and (ii) would otherwise be
controlled elsewhere under one of the
Category 0, ‘‘600 series.’’
Applicable Controls
All items in these proposed 0Y617
ECCNs (except items in the .y
paragraphs) would be subject to national
security (NS Column 1), regional
stability (RS Column 1) and
antiterrorism (AT Column 1) controls.
Items in the .y paragraphs would be
subject only to antiterrorism (AT
Column 1) controls.
Under ECCN 0A018, ‘‘construction
equipment built to military
specifications, including equipment
specially designed for airborne
transport; and specially designed parts
and accessories for such construction
equipment, including crew protection
kits used as protective cabs’’ are
currently controlled for national
security, antiterrorism and United
Nations reasons. Under proposed ECCN
0A617.a, they would be controlled for
national security, regional stability and
antiterrorism reasons, but no longer for
United Nations reasons. Controlling
these items for United Nations reasons
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is unnecessary in light of the November
7 proposed rule’s amendment to the RS
Column 1 licensing policy, which stated
that there would be a general policy of
denial for ‘‘600 series’’ items if the
destination is subject to a United States
arms embargo. A list of such
destinations is identified in proposed
section 740.2(a)(12), set forth in the
November 7 proposed rule.
In addition, control of power
controlled searchlights and control units
therefor, designed for military use, and
equipment mounting such units; and
‘‘parts,’’ ‘‘components,’’ and
‘‘accessories and attachments’’
‘‘specially designed’’ therefor, would be
moved from ECCN 0A918.a to ECCN
0A617.y.3. Under ECCN 0A918, such
items are controlled for regional
stability, antiterrorism and United
Nations reasons, but under proposed
ECCN 0A617.y.3, they would be
controlled for antiterrorism reasons
only. More advanced alternatives to
ECCN 0A918 items exist today
compared to items currently controlled
under ECCN 0A918. For this reason,
there is no longer a need to control such
items for regional stability reasons. The
rationale for removing the United
Nations reason for control is the same as
that for crew protection kits discussed
above.
Revision to Three ECCNs: 0A018, 0A918
and 0E018
As discussed above, this proposed
rule would remove ‘‘construction
equipment built to military
specifications, including specially
designed for airborne transport; and
specially designed parts and accessories
for such construction equipment,
including crew protection kits used as
protective cabs’’ from ECCN 0A018.a
and add them to the .a paragraph of
proposed ECCN 0A617. It would also
move ‘‘power controlled searchlights
and control units therefor, designed for
military use, and equipment mounting
such units; and specially designed parts
and accessories therefor’’ from ECCN
0A918.a to the .y.3 paragraph of
proposed ECCN 0A617.
Accordingly, this rule would amend
ECCN 0A918 to remove paragraph .a
and provisions related to that paragraph.
The related controls paragraph would be
amended to provide a cross-reference to
proposed ECCN 0A617.y.3.
In addition, this rule would amend
ECCN 0A018.a to cross-reference new
ECCN 0A617.a, and would amend ECCN
0E018 to add a note stating that this
ECCN no longer controls ‘‘technology’’
for items formerly classified under
ECCN 0A018.a, which would now be
classified under ECCN 0A617.a. Under
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this rule, the technology for such items,
as noted above, would be classified
under ECCN 0E617.a.
Note with respect to the proposed
movement of ECCN 0A018.a items to
proposed ECCN 0A617.a that in the July
15 proposed rule, BIS proposed moving
ECCN 0A018.a items to proposed ECCN
0A606.a. Thereafter, on December 6,
2011, BIS published another proposed
rule (76 FR 76085) that included
revisions to the text of ECCN 0A606.a to
cover a broad array of military vehicles,
both armed and unarmed. While the
revised proposal for ECCN 0A606.a was
intended to include 0A018.a items, it
did not explicitly name such items.
After further reflection, BIS has
concluded that expressly identifying
military construction equipment in
ECCN 0A617.a, rather than including it
in a broad category of armed and
unarmed military vehicles in ECCN
0A606.a, would be more informative
and less likely to confuse the public. In
addition, the items currently classified
under ECCN 0A018.a are identified in
WAML Category 17. Accordingly, this
rule would include construction
equipment specially designed for
military use and related items in
proposed ECCN 0A617.a, to promote
clarity and to further the
Administration’s goal of aligning the
600 series ECCNs with the WAML.
Neither the December 6 proposed rule
nor this proposed rule would change the
license requirements or the license
exception eligibility originally proposed
for construction equipment and related
items in the July 15 proposed rule.
Corresponding Amendments
To implement the regional stability
controls that apply to the five new ‘‘600
series’’ ECCNs noted above, this
proposed rule would amend
§ 742.6(a)(1) of the EAR to apply the RS
Column 1 licensing policy to items
classified under ECCNs 0A617, 0B617,
0C617, 0D617 and 0E617 (except the .y
paragraphs).
In conjunction with the proposed
control on ‘‘metal embrittlement agents’’
in new ECCN 0A617.f, this rule
proposes adding to section 772.1 of the
EAR (Definitions of terms as used in the
EAR) to define that term as it currently
is in USML Category XIII(m).
Relationship to the July 15 and
November 7 Proposed Rules
As referenced above, the purpose of
the July 15 proposed rule was to
establish the framework to support the
transfer of items that the President
determines no longer warrant control on
the USML from the USML to the CCL.
To facilitate that goal, the July 15
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proposed rule contains definitions and
concepts that were meant to be applied
across categories. However, as BIS
undertakes rulemakings to move
specific categories of items from the
USML to the CCL, there may be
unforeseen issues or complications that
may require BIS to reexamine those
definitions and concepts. The comment
period for the July 15 proposed rule
closed on September 13, 2011. In the
November 7 proposed rule, BIS
proposed several changes to those
definitions and concepts. The comment
period for the November 7 proposed
rule closed on December 22, 2011.
To the extent that this rule’s proposals
affect any provision in either of those
proposed rules or that any provisions in
either of those proposed rules affect this
proposed rule, BIS will consider
comments on those provisions so long
as they are within the context of the
changes proposed in this rule.
BIS believes that the following
provisions of the July 15 proposed rule
and the November 7 proposed rule are
among those that could affect this
proposed rule, but because those rules
remain under review, BIS does not
know yet how exactly they may impact
this rule:
• De minimis provisions in § 734.4;
• Restrictions on use of license
exceptions in §§ 740.2, 740.10, 740.11,
and 740.20;
• Change to national security
licensing policy in § 742.4;
• Requirement to request
authorization to use License Exception
STA (strategic trade authorization) for
end items in 600 series ECCNs and
procedures for submitting such requests
in §§ 740.2, 740.20, 748.8 and Supp. No.
2 to part 748;
• Addition of ‘‘600 series’’ items to
Supplement No. 2 to Part 744—List of
Items Subject to the Military End-Use
Requirement of § 744.21; and
• Definitions of terms in § 772.1.
BIS believes that the following
provisions of this proposed rule are
among those that could affect the
provisions of the July 15 and November
7 proposed rules:
• Additional ‘‘600 series’’ items
identified in the RS Column 1 licensing
policy described in § 742.6.
Effects of This Proposed Rule
BIS believes that the principal effect
of this rule will be to provide greater
flexibility for exports and reexports to
NATO member countries and other
multiple-regime-member countries of
items the President determines no
longer warrant control on the USML.
This greater flexibility will be in the
form of: availability of license
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exceptions, particularly License
Exceptions RPL (servicing and
replacement of parts and equipment)
and STA (strategic trade authorization);
eliminating the requirements for
manufacturing license agreements and
technical assistance agreements in
connection with exports of technology;
reducing or eliminating exporter and
manufacturer registration requirements
and associated registration fees; and
applying the EAR’s de minimis
threshold principle for items
constituting less than a de minimis
amount of controlled U.S.-origin content
in foreign-made items. Some of these
specific effects are discussed in more
detail below.
De minimis
The July 15 proposed rule would
impose certain unique de minimis
requirements on items controlled under
the new ‘‘600 series’’ ECCNs. Section
734.3 of the EAR provides, inter alia,
that, under certain conditions, items
made outside the United States that
incorporate items subject to the EAR are
not subject to the EAR if they do not
exceed a de minimis percentage of
controlled U.S. origin content.
Depending on the destination, the de
minimis percentage can be either 10
percent or 25 percent. If the July 15
proposed rule’s amendments at § 734.4
of the EAR are adopted, the new ECCNs
0A617, 0B617, 0C617, 0D617, and
0E617 proposed in this rule would be
subject to the de minimis provisions set
forth in the July 15 proposed rule.
Foreign-made items incorporating items
controlled under the new ECCNs would
become eligible for de minimis
treatment at the 10 percent level (i.e., a
foreign-made item is not subject to the
EAR, for de minimis purposes, if the
value of its U.S.-origin controlled
content does not exceed 10 percent of
foreign-made item’s value). In contrast,
the AECA does not permit the ITAR to
have a de minimis treatment for USMLlisted items, regardless of the
significance or insignificance of the
U.S.-origin content or the percentage of
U.S.-origin content in the foreign-made
item (i.e., USML-listed items remain
subject to the ITAR when they are
incorporated abroad into a foreign-made
item, regardless of either of these
factors). In addition, foreign-made items
that incorporate any items that are
currently classified under an 018 ECCN
(e.g., ECCN 0E018) and that are moved
to a new ‘‘600 series’’ ECCN (e.g., ECCN
0E617) would be subject to the EAR if
those foreign-made items contain more
than 10 percent U.S.-origin controlled
content, regardless of the destination
and the proportion of the U.S.-origin
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controlled content accounted for by the
former 018 ECCN items.
Use of License Exceptions
The July 15 proposed rule would
impose certain restrictions on the use of
license exceptions for items that would
be controlled under the new ‘‘600
series’’ ECCNs on the CCL. For example,
proposed § 740.2(a)(12) would make
‘‘600 series’’ items that are destined for
a country subject to a United States
arms embargo ineligible for shipment
under a license exception, except where
authorized by License Exception GOV
under § 740.11(b)(2)(ii) of the EAR. BIS
believes that, even with the July 15 and
November 7 proposed restrictions on
the use of license exceptions for ‘‘600
series’’ items, the restrictions on those
items currently on the USML would be
reduced, particularly with respect to
exports to NATO members and
multiple-regime member countries, if
those items are moved from the USML
to proposed ECCN 0A617, 0B617 or
0C617. BIS also believes that, in
practice, moving items from a 018 ECCN
to a new ‘‘600 series’’ ECCN (e.g., the
construction equipment built to military
specifications and related items that
would move from ECCN 0A018.a to
proposed ECCN 0A617.a) would have
little effect on license exception
availability for those items. However,
BIS is aware of two situations (the use
of License Exceptions GOV and STA) in
which movement of items from a 018
ECCN to a new ‘‘600 series’’ ECCN
could, in practice, impose greater limits
on the use of license exceptions than
currently is the case.
First, the July 15 proposed rule would
limit the use of License Exception GOV
for ‘‘600 series’’ commodities to
situations in which the U.S.
Government is the consignee and end
user, or to situations in which the
consignee or end user is the government
of a country listed in § 740.20(c)(1).
Currently, construction equipment built
to military specifications and related
items, classified under ECCN 0A018.a,
may be exported under any provision of
License Exception GOV to any
destination authorized by that provision
if all of the conditions of that provision
are met and nothing else in the EAR
precludes such shipment.
Second, the July 15 proposed rule
would: (i) Limit the use of License
Exception STA for ‘‘end items’’ in ‘‘600
series’’ ECCNs to those end items for
which a specific request for License
Exception STA eligibility (filed in
conjunction with a license application)
has been approved; and (ii) require that
the end item be for ultimate end use by
a foreign government agency of a type
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specified in the July 15 proposed rule.
The July 15 proposed rule also would
limit exports of ‘‘600 series’’ parts,
components, accessories, and
attachments under License Exception
STA for ultimate end use by the same
set of end users. Neither the end-item
restriction nor the restriction applicable
to parts, components, accessories, and
attachments currently applies to the use
of License Exception STA for
commodities classified under ECCN
0A018.a, but the latter restriction would
apply to these commodities under new
ECCN 0A617.a. In addition, the July 15
proposed rule would limit the shipment
of ‘‘600 series’’ items under License
Exception STA to destinations listed in
§ 740.20(c)(1). Currently, the
commodities classified under ECCN
0A018.a (which would be moved to
ECCN 0A617.a by this proposed rule)
may be shipped under License
Exception STA to destinations listed in
§ 740.20(c)(1) or (c)(2).
In addition, this proposed rule
provides that STA-eligible items
controlled under new ECCN 0A617,
0B617, or 0C617 would not be subject
to the restriction, proposed in the July
15 rule, on using of License Exception
STA for ‘‘end items’’ in ‘‘600 series’’
ECCNs unless a specific request for
License Exception STA eligibility has
been submitted to, and approved by,
BIS.
Items controlled under proposed
ECCNs 0A617, 0B617 or 0C617 would
be eligible for License Exception LVS
(limited value shipments) up to a value
of $1,500. Note that for items previously
classified under ECCN 0A018.a that
would, under this proposal, be
classified under ECCN 0A918.a, the
threshold for LVS availability would
generally drop from $5,000 to $1,500
with this proposed change (and increase
from $0 to $1,500 for Rwanda). Items
controlled under proposed ECCNs
0A617, 0B617, 0C617, 0D617 or 0E617
also would be eligible for License
Exception TMP (temporary exports),
and items controlled under proposed
ECCNs 0A617, 0B617 or 0D617 would
be eligible for License Exception RPL
(servicing and replacement parts).
Making U.S. Export Controls More
Consistent With the Wassenaar
Arrangement Munitions List Controls
Since the beginning of the Export
Control Reform Initiative, the
Administration has stated that the
reforms will be consistent with the
United States’ obligations to the
multilateral export control regimes.
Accordingly, the Administration will, in
this and subsequent proposed rules,
exercise its national discretion to
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implement, clarify, and, to the extent
feasible, align its controls with those of
the regimes. For example, proposed
ECCNs 0A617 and 0C617 implement, to
the extent possible, the controls in
WAML Category 17 pertaining to
miscellaneous munitions items, while
proposed ECCNs 0B617.a, 0D617 and
0E617, to the extent possible,
implement the controls in WAML
Category 18 for production equipment,
the controls in WAML Category 21 for
software, and the controls in WAML
Category 22 for technology.
Other Effects: National Security and
Regional Stability Controls
Pursuant to the framework identified
in the July 15 proposed rule, auxiliary
and miscellaneous military
commodities classified under ECCN
0A617 (other than ECCN 0A617.y),
along with related test inspection and
production equipment, materials,
software, and technology classified
under ECCNs 0B617, 0C617, 0D617 or
0E617 (except items classified under the
.y paragraphs of these ECCNs) would be
subject to the licensing policies that
apply to items controlled for national
security reasons, as described in
§ 742.4(b)(1)—specifically, NS Column 1
controls. In addition, commodities in
ECCN 0A617 (other than 0A617.y),
along with related test, inspection and
production equipment, materials,
software and technology classified
under ECCNs 0B617, 0C617, 0D617 or
0E617 (except items classified under the
.y paragraphs of these ECCNs), would be
subject to the regional stability licensing
policies set forth in § 742.6(a)(1)—
specifically, RS Column 1.
The July 15 proposed rule would
change § 742.4 to apply a general policy
of denial to ‘‘600 series’’ items for
destinations that are subject to a United
States arms embargo. That policy would
apply to all items controlled for national
security (NS) reasons under this
proposed rule. The November 7
proposed rule would expand that
general policy of denial to include ‘‘600
series’’ items subject to the licensing
policies that apply to items controlled
for regional stability reasons, as
described in § 742.6(b)(1)—specifically,
RS Column 1. While this change might
seem redundant for the items affected
by this proposed rule, it ensures that a
general denial policy would apply to
any ‘‘600 series’’ items that are
controlled for missile technology (MT)
and regional stability (RS) reasons, but
not for national security (NS) reasons (as
would be the case for certain items
affected by the November 7 proposed
rule).
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Section-by-Section Description of the
Proposed Changes
• Section 742.6—ECCNs 0A617,
0B617, 0C617, 0D617 and 0E617 would
be added to § 742.6(a)(1) to impose an
RS Column 1 license requirement and
licensing policy, including a general
policy of denial in Section 742.6(b)(1),
for applications to export or reexport
‘‘600 series’’ items to destinations that
are subject to a United States arms
embargo.
• Section 772.1—The definition
section of the EAR would be amended
to include, in alphabetical order, the
definition of the term ‘‘metal
embrittlement agents’’ to correspond
with the proposed classification of such
items under ECCN 0A617.f.
• Supplement No. 1 to part 774—
ECCNs 0A617, 0B617, 0C617, 0D617
and 0E617 would be added to
Supplement No. 1 to part 774. ECCN
0A018 would be removed and reserved,
and the related controls paragraph
would be amended to include a crossreference directing the public to
proposed new ECCN 0A617.a for items
currently controlled by ECCN 0A018.a.
ECCN 0A918 would be amended to
remove paragraph .a and provisions
related to that paragraph. The related
controls paragraph would be amended
to include a cross-reference directing
the public to proposed new ECCN
0A617.y.3. And ECCN 0E018 would be
amended to add a note cross-referencing
controls in proposed ECCN 0E617.a.
Request for Comments
BIS seeks comments on this proposed
rule. BIS will consider all comments
received on or before July 2, 2012. All
comments (including any personally
identifying information or information
for which a claim of confidentially is
asserted either in those comments or
their transmittal emails) will be made
available for public inspection and
copying. Parties who wish to comment
anonymously may do so by submitting
their comments via
www.Regulations.gov, leaving the fields
that would identify the commenter
blank and including no identifying
information in the comment itself.
Although the Export Administration
Act expired on August 20, 2001, the
President, through Executive Order
13222 of August 17, 2001, 3 CFR, 2001
Comp., p. 783 (2002), as extended by the
Notice of August 12, 2011, 76 FR 50661
(August 16, 2011), has continued the
Export Administration Regulations in
effect under the International
Emergency Economic Powers Act. BIS
continues to carry out the provisions of
the Act, as appropriate and to the extent
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permitted by law, pursuant to Executive
Order 13222.
Rulemaking Requirements
1. Executive Orders 13563 and 12866
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distribute impacts, and equity).
Executive Order 13563 emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. This rule has been
designated a ‘‘significant regulatory
action,’’ although not economically
significant, under section 3(f) of
Executive Order 12866. Accordingly,
the rule has been reviewed by the Office
of Management and Budget (OMB).
2. Notwithstanding any other
provision of law, no person is required
to respond to, nor is subject to a penalty
for failure to comply with, a collection
of information, subject to the
requirements of the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501
et seq.) (PRA), unless that collection of
information displays a currently valid
OMB control number. This proposed
rule would affect two approved
collections: Simplified Network
Application Processing + System
(control number 0694–0088), which
includes, among other things, license
applications, and License Exceptions
and Exclusions (0694–0137).
As stated in the July 15, 2011,
proposed rule (76 FR 41958), BIS
believes that the combined effect of all
rules to be published adding items to
the EAR that would be removed from
the ITAR as part of the administration’s
Export Control Reform Initiative would
increase the number of license
applications submitted by
approximately 16,000 annually,
resulting in an increase in burden hours
of 5,067 (16,000 transactions at 17
minutes each) under control number
0694–0088.
Some items formerly on the USML
would become eligible for License
Exception STA under this rule. As
specified in the STA eligibility
paragraph for proposed new ECCNs
0A617, 0B617, and 0C617, such items
would not need a determination of
eligibility per § 740.20(g) of the EAR. As
stated in the July 15 proposed rule, BIS
believes that the increased use of
License Exception STA resulting from
the combined effect of all rules to be
published adding items to the EAR that
would be removed from the ITAR as
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part of the administration’s Export
Control Reform Initiative would
increase the burden associated with
control number 0694–0137 by about
23,858 hours (20,450 transactions at 1
hour and 10 minutes each).
BIS expects that this increase in
burden would be more than offset by a
reduction in burden hours associated
with approved collections related to the
ITAR. This proposed rule addresses
controls on auxiliary and miscellaneous
equipment, materials and related parts,
components, test and production
equipment, software, and technology.
The largest impact of the proposed rule
would likely apply to exporters of end
items. Under the EAR, such items
would become eligible for export to
NATO member states and other close
allies under License Exception STA.
Use of License Exception STA imposes
a paperwork and compliance burden
because, for example, exporters must
furnish information about the item
being exported to the consignee and
obtain from the consignee an
acknowledgement and commitment to
comply with the EAR. However, the
Administration understands that
complying with the requirements of
STA is likely to be less burdensome
than applying for licenses. For example,
under License Exception STA, a single
consignee statement can apply to an
unlimited number of products, need not
have an expiration date, and need not be
submitted to the government in advance
for approval. Suppliers with regular
customers can tailor a single statement
and assurance to match their business
relationship rather than applying
repeatedly for licenses with every
purchase order to supply reliable
customers in countries that are close
allies or members of export control
regimes, or both.
Even in situations in which a license
would be required under the EAR, the
burden likely will be reduced compared
to the license requirement of the ITAR.
In particular, license applications for
exports of technology controlled by
ECCN 0E617 are likely to be less
complex and burdensome than the
authorizations required to export ITARcontrolled technology, i.e.,
Manufacturing License Agreements and
Technical Assistance Agreements.
3. This rule does not contain policies
with Federalism implications as that
term is defined under E.O. 13132.
4. The Regulatory Flexibility Act
(RFA), as amended by the Small
Business Regulatory Enforcement
Fairness Act of 1996 (SBREFA), 5 U.S.C.
601 et seq., generally requires an agency
to prepare an initial regulatory
flexibility analysis (IRFA) for any rule
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subject to the notice and comment
rulemaking requirements under the
Administrative Procedure Act (5 U.S.C.
553) or any other statute. However,
under section 605(b) of the RFA, if the
head of an agency certifies that a rule
will not have a significant impact on a
substantial number of small entities, the
RFA does not require the agency to
prepare a regulatory flexibility analysis.
Pursuant to section 605(b), the Chief
Counsel for Regulation, Department of
Commerce, certified to the Chief
Counsel for Advocacy, Small Business
Administration that this proposed rule,
if promulgated, will not have a
significant impact on a substantial
number of small entities.
Number of Small Entities
The Bureau of Industry and Security
(BIS) does not collect data on the size
of entities that apply for and are issued
export licenses. Although BIS is unable
to estimate the exact number of small
entities that would be affected by this
rule, it acknowledges that this rule
would affect some unknown number of
them.
Economic Impact
This proposed rule is part of the
Administration’s Export Control Reform
Initiative. Under that initiative, the
United States Munitions List (22 CFR
part 121) (USML) will be revised to be
a ‘‘positive’’ list, i.e., a list that does not
use generic, catch-all controls on any
part, component, accessory, attachment,
or end item that was in any way
specifically modified for a defense
article, regardless of the article’s
military or intelligence significance or
non-military applications. At the same
time, articles that the President
determines no longer warrant control on
the USML will become controlled on
the Commerce Control List (CCL). Such
items, along with certain military items
that currently are on the CCL, will be
identified in specific Export Control
Classification Numbers (ECCNs) known
as the ‘‘600 series’’ ECCNs. In addition,
some items currently on the Commerce
Control List will move from existing
ECCNs to the new ‘‘600 series’’ ECCNs.
This rule addresses certain
miscellaneous equipment and related
articles currently controlled in WAML
Category 17 (Miscellaneous equipment,
materials and ‘libraries’ and specially
designed components) and USML
Category XIII (Materials and
Miscellaneous Articles).
Changing the jurisdictional status of
these USML articles would, potentially,
reduce the burden on small entities (and
other entities as well) through: (i)
Eliminating some license requirements;
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(ii) increasing availability of license
exceptions; (iii) simplifying license
application procedures; and (iv)
reducing or eliminating registration fees.
These amendments are part of the
Administration’s effort to make the
USML the U.S. Government’s list of
critical military and intelligence items
that warrant the stringent worldwide
controls of the ITAR, while controlling
all other military and intelligence items,
particularly generic parts and
components, through the CCL. BIS
believes that the economic benefits for
the proposed amendments include the
significant reduction in the time spent
determining and addressing issues
associated with determining the
jurisdictional status of such items now.
In addition, parts and components
currently controlled under the ITAR
remain under ITAR control when
incorporated into foreign-made items,
regardless of the significance or
insignificance of the item. This
discourages foreign buyers from
incorporating such U.S. content. The
availability of de minimis treatment for
items that are transferred to control
under the EAR may reduce the
disincentive to foreign manufacturers
for purchasing U.S.-origin parts and
components.
Many exports and reexports of the
Category XIII articles that would be
placed on the CCL by this rule would
become eligible for license exceptions
that apply to shipments to U.S.
Government agencies, thereby reducing
the number of licenses that exporters of
these items would need. License
Exceptions under the EAR would allow
suppliers to send routine replacement
and low level parts to NATO member
states and other close allies and export
control regime partners for use by those
governments, and for use by contractors
building equipment for those
governments or for the U.S. Government
without having to obtain export
licenses. Under License Exception
Strategic Trade Authorization (STA), the
exporter would need to furnish
information about the item being
exported to the consignee and obtain a
statement from the consignee that,
among other things, would commit the
consignee to comply with the EAR and
other applicable U.S. laws. Because
such statements and obligations can
apply to an unlimited number of
transactions and have no expiration
date, they would impose a net reduction
in burden on transactions that the
government routinely approves through
the license application process that the
License Exception STA statements
would replace.
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Even for exports and reexports for
which a license would be required
under the proposed rule, the process
would be simpler and less costly under
the EAR. When a USML Category XIII
article is moved to the CCL, the number
of destinations for which a license is
required would remain unchanged.
However, the burden on the license
applicant would decrease because the
licensing procedure for CCL items is
simpler and more flexible than the
license procedure for USML articles.
Under the USML licensing procedure,
an applicant must include a purchase
order or contract with its application.
There is no such requirement under the
CCL licensing procedure. This
difference gives the CCL applicant at
least two advantages. First, the
applicant has a way to determine
whether the U.S. Government will
authorize the transaction before it enters
into potentially lengthy, complex and
expensive sales presentations or
contract negotiations. Under the USML
procedure, the applicant must caveat all
sales presentations with a reference to
the need for government approval, and
is more likely to engage in substantial
effort and expense only to find that the
government will reject the application.
Second, a CCL license applicant need
not limit its application to the quantity
or value of one purchase order or
contract. It may apply for a license to
cover all of its expected exports or
reexports to a specified consignee over
the life of a license (normally two years,
but may be longer if circumstances
warrant a longer period), thus reducing
the total number of licenses for which
the applicant must apply.
In addition, many applicants
exporting or reexporting items that this
rule would transfer from the USML to
the CCL would realize cost savings
through the elimination of some or all
registration fees currently assessed
under the USML’s licensing procedure.
Currently, USML applicants must pay to
use the USML licensing procedure even
if they never actually are authorized to
export. Registration fees for
manufacturers and exporters of articles
on the USML start at $2,250 per year,
increase to $2,750 for exporters
applying for one to ten licenses per year
and further increase to $2,750, plus
$250 per license application (subject to
a maximum of three percent of total
application value) for those who need to
apply for more than ten licenses per
year. Conversely, there are no
registration or application processing
fees for applications to export items
listed on the CCL. Once the Category
XIII items that are the subject to this
rulemaking are moved from the USML
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29571
to the CCL, entities currently applying
for licenses from the Department of
State will find their registration fees
reduced if the number of USML licenses
those entities need declines. If an
entity’s entire product line is moved to
the CCL, its ITAR registration and
registration fee requirement will be
eliminated.
De minimis treatment under the EAR
would also become available for all
items that this rule proposes to transfer
from the USML to the CCL. Items
subject to the ITAR remain subject to
the ITAR when they are incorporated
abroad into a foreign-made product
regardless of the percentage of U.S.
content in that foreign-made product.
However, foreign-made products
incorporating items that this rule would
move to the CCL would be subject to the
EAR only if their total controlled U.S.origin content exceeds 10 percent.
Because including small amounts of
U.S.-origin content would not subject
foreign-made products to the EAR,
foreign manufacturers would have less
incentive to refrain from purchasing
such U.S.-origin parts and components,
a development that potentially would
mean greater sales for U.S. suppliers,
including small entities.
For items currently on the CCL that
would be moved from existing ECCNs to
the new ‘‘600 series,’’ license exception
availability would be narrowed
somewhat and the applicable de
minimis threshold for foreign-made
products containing those items would
in some cases be reduced from 25
percent to 10 percent. However, BIS
believes that any increased burden
imposed by those actions would be
offset substantially by the reduction in
burden attributable to moving items
from the USML to CCL and the
compliance benefits associated with the
consolidation of all WAML items
subject to the EAR in one series of
ECCNs. These changes also would
reduce the burden on small entities by
resolving actual and potential
jurisdictional uncertainty with respect
to items that are related to articles
controlled by USML Category XIII.
Conclusion
BIS is unable to determine the precise
number of small entities that would be
affected by this rule. Based on the facts
and conclusions set forth above, BIS
believes that any burdens imposed by
this rule would be offset by a reduction
in the number of items that would
require a license, increased
opportunities for use of license
exceptions for exports to certain
countries, simpler export license
applications, reduced or eliminated
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registration fees, and application of a
de minimis threshold for foreign-made
items incorporating U.S.-origin parts
and components, which would reduce
the incentive for foreign buyers to
design out or avoid U.S.-origin content.
For these reasons, the Chief Counsel for
Regulation of the Department of
Commerce certified to the Chief Counsel
for Advocacy of the Small Business
Administration that this rule, if adopted
in final form, would not have a
significant economic impact on a
substantial number of small entities.
Accordingly, no IRFA is required, and
none has been prepared.
List of Subjects
15 CFR Part 742
Exports, Terrorism.
15 CFR Part 772
Exports.
15 CFR Part 774
Exports, Reporting and recordkeeping
requirements.
For the reasons stated in the
preamble, parts 742, 772 and 774 of the
Export Administration Regulations (15
CFR parts 730–774) are proposed to be
amended as follows:
PART 742—[AMENDED]
1. The authority citation for 15 CFR
part 742 continues to read as follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50
U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.;
42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22
U.S.C. 7210; Sec 1503, Pub. L. 108–11, 117
Stat. 559; E.O. 12058, 43 FR 20947, 3 CFR,
1978 Comp., p. 179; E.O. 12851, 58 FR 33181,
3 CFR, 1993 Comp., p. 608; E.O. 12938, 59
FR 59099, 3 CFR, 1994 Comp., p. 950; E.O.
13026, 61 FR 58767, 3 CFR, 1996 Comp., p.
228; E.O. 13222, 66 FR 44025, 3 CFR, 2001
Comp., p. 783; Presidential Determination
2003–23 of May 7, 2003, 68 FR 26459, May
16, 2003; Notice of August 12, 2011, 76 FR
50661 (August 16, 2011); Notice of November
9, 2011, 76 FR 70319 (November 10, 2011).
2. Section 742.6 is amended by
revising paragraph (a)(1) to read as
follows:
srobinson on DSK4SPTVN1PROD with PROPOSALS
§ 742.6
Regional stability.
(a) * * *
(1) RS Column 1 License
Requirements in General. As indicated
in the CCL and in RS column 1 of the
Commerce Country Chart (see
Supplement No. 1 to part 738 of the
EAR), a license is required to all
destinations, except Canada, for items
described on the CCL under ECCNs
0A521; 0A606 (except 0A606.b and .y);
0A617 (except 0A617.y); 0B521; 0B606
(except 0B606.y); 0B617 (except
0B617.y); 0C521; 0C606 (except
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0C606.y); 0C617 (except 0C617.y),
0D521; 0D606 (except 0D606.y); 0D617
(except 0D617.y) 0E521; 0E606 (except
0E606.y); 0E617 (except 0E617.y);
1A607 (except 1A607.y); 1B607 (except
1B607.y); 1B608 (except 1B608.y);
1C607; 1C608; 1D607 (except 1D607.y);
1D608 (except 1D608.y); 1E607 (except
1E607.y); 1E608 (except 1E608.y);
6A002.a.1, a.2, a.3, .c, or .e; 6A003.b.3,
and b.4.a; 6A008.j.1; 6A998.b; 6D001
(only ‘‘software’’ for the ‘‘development’’
or ‘‘production’’ of items in 6A002.a.1,
a.2, a.3, .c; 6A003.b.3 and .b.4; or
6A008.j.1); 6D002 (only ‘‘software’’ for
the ‘‘use’’ of items in 6A002.a.1, a.2, a.3,
.c; 6A003.b.3 and .b.4; or 6A008.j.1);
6D003.c; 6D991 (only ‘‘software’’ for the
‘‘development,’’ ‘‘production,’’ or ‘‘use’’
of equipment classified under 6A002.e
or 6A998.b); 6E001 (only ‘‘technology’’
for ‘‘development’’ of items in
6A002.a.1, a.2, a.3 (except
6A002.a.3.d.2.a and 6A002.a.3.e for lead
selenide focal plane arrays), and .c or .e,
6A003.b.3 and b.4, or 6A008.j.1); 6E002
(only ‘‘technology’’ for ‘‘production’’ of
items in 6A002.a.1, a.2, a.3, .c, or .e,
6A003.b.3 or b.4, or 6A008.j.1); 6E991
(only ‘‘technology’’ for the
‘‘development,’’ ‘‘production,’’ or ‘‘use’’
of equipment classified under 6A998.b);
6D994; 7A994 (only QRS11–00100–100/
101 and QRS11–0050–443/569
Micromachined Angular Rate Sensors);
7D001 (only ‘‘software’’ for
‘‘development’’ or ‘‘production’’ of
items in 7A001, 7A002, or 7A003);
7E001 (only ‘‘technology’’ for the
‘‘development’’ of inertial navigation
systems, inertial equipment, and
specially designed components therefor
for civil aircraft); 7E002 (only
‘‘technology’’ for the ‘‘production’’ of
inertial navigation systems, inertial
equipment, and specially designed
components therefor for civil aircraft);
7E101 (only ‘‘technology’’ for the ‘‘use’’
of inertial navigation systems, inertial
equipment, and specially designed
components for civil aircraft); 8A609
(except 8A609.y); 8B609 (except
8B609.y); 8C609 (except 8C609.y);
8D609 (except software for the
‘‘development,’’ ‘‘production,’’
operation, or maintenance of
commodities controlled by 8A609.y,
8B609.y, or 8C609.y); 8E609 (except
‘‘technology’’ for the ‘‘development,’’
‘‘production,’’ operation, installation,
maintenance, repair, or overhaul of
commodities controlled by 8A609.y,
8B609.y, or 8C609.y); 9A610 (except
9A610.y); 9A619 (except 9A619.y);
9B610 (except 9B610.y); 9B619 (except
9B619.y); 9C610 (except 9C610.y);
9C619 (except 9C619.y); 9D610 (except
software for the ‘‘development,’’
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‘‘production,’’ operation, installation,
maintenance, repair, or overhaul of
commodities controlled by 9A610.y,
9B610.y, or 9C610.y); 9D619 (except
software for the ‘‘development,’’
‘‘production,’’ operation, or
maintenance of commodities controlled
by 9A619.y, 9B619.y, or 9C619.y);
9E610 (except ‘‘technology’’ for the
‘‘development,’’ ‘‘production,’’
operation, installation, maintenance,
repair, or overhaul of commodities
controlled by ECCN 9A610.y, 9B610.y,
or 9C610.y); and 9E619 (except
‘‘technology’’ for the ‘‘development,’’
‘‘production’’ operation, installation,
maintenance, repair, or overhaul of
commodities controlled by ECCN
9A619.y, 9B619.y, or 9C619.y).
*
*
*
*
*
PART 772—[AMENDED]
3. The authority citation for 15 CFR
part 772 continues to read as follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50
U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025,
3 CFR, 2001 Comp., p. 783; Notice of August
12, 2011, 76 FR 50661 (August 16, 2011).
4. Section 772.1 is amended by
adding a definition for ‘‘metal
embrittlement agents’’ in alphabetical
order to read as follows:
§ 772.1 Definitions of terms as used in the
Export Administration Regulations (EAR).
*
*
*
*
*
Metal embrittlement agents. (Cat. 0)—
Non-lethal weapon substances that alter
the crystal structure of metals within a
short time span. Metal embrittling
agents severely weaken metals by
chemically changing their molecular
structure. These agents are compounded
in various substances to include
adhesives, liquids, aerosols, foams and
lubricants.
*
*
*
*
*
PART 774—[AMENDED]
5. The authority citation for 15 CFR
part 774 continues to read as follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50
U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C.
7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et
seq., 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u);
42 U.S.C. 2139a; 42 U.S.C. 6212; 43 U.S.C.
1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O.
13026, 61 FR 58767, 3 CFR, 1996 Comp., p.
228; E.O. 13222, 66 FR 44025, 3 CFR, 2001
Comp., p. 783; Notice of August 12, 2011, 76
FR 50661 (August 16, 2011).
6. In Supplement No. 1 to part 774
(the Commerce Control List), Category
0—Nuclear Materials, Facilities, and
Equipment [and Miscellaneous Items]—
Export Control Classification Number
(ECCN) 0A018 is amended
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a. By adding a sentence to the end of
the Related Controls paragraph in the
List of Items Controlled section; and
b. By removing and reserving
paragraph .a in the Items paragraph of
the List of Items Controlled section to
read as follows:
Supplement No. 1 to Part 774—The
Commerce Control List
*
*
*
*
*
0A018 Items on the Wassenaar
Munitions List
*
*
*
*
*
List of Items Controlled:
Unit: * * *
Related Controls: * * * 3) See ECCN
0A617.a for items formerly controlled
by ECCN 0A018.a.
Related Definitions: * * *
Items:
a. [RESERVED].
*
*
*
*
*
7. In Supplement No. 1 to part 774
(the Commerce Control List), Category
0—Nuclear Materials, Facilities, and
Equipment [and Miscellaneous Items]
add a new ECCN 0A617 between ECCNs
0A018 and 0A918 to read as follows:
0A617 Miscellaneous ‘‘Equipment,’’
Materials, and Related Commodities
License Requirements
Reason for Control: NS, RS, AT
Control(s)
Country chart
NS applies to entire entry except 0A617.y .......................................................................................................................................
RS applies to entire entry except 0A617.y .......................................................................................................................................
AT applies to entire entry .................................................................................................................................................................
srobinson on DSK4SPTVN1PROD with PROPOSALS
License Exceptions
LVS: $1500
GBS: N/A
CIV: N/A
STA:
(1) Paragraph (c)(2) of License
Exception STA (§ 740.20(c)(2)) of the
EAR may not be used for any item in
0A617.
(2) Paragraph (c)(1) of License
Exception STA (§ 740.20(c)(1)) may be
used for items in 0A617 without the
need for a determination described in
§ 740.20(g).
List of Items Controlled
Unit: End items in number; parts,
components, accessories and
attachments in $ value.
Related Controls: (1) Defense articles,
such as materials made from classified
information, that are controlled by
USML Category XIII, and technical data
(including software) directly related
thereto, are subject to the ITAR. (2) See
ECCN 0A919 for foreign-made ‘‘military
commodities’’ that incorporate more
than 10% U.S.-origin ‘‘600 series’’
items. (3) For controls on self-contained
diving and underwater swimming
apparatus and related commodities, see
ECCN 8A620.f. (4) For controls on
robots, robot controllers, and robot endeffectors, see USML Category VII and
ECCNs 0A606 and 2B007. (5)
‘‘Libraries,’’ i.e., parametric technical
databases, ‘‘specially designed’’ for
military use with equipment controlled
by USML or a ‘‘600 series’’ ECCN are
controlled by the technical data and
technology controls pertaining to such
items. (6) For controls on nuclear power
generating equipment or propulsion
equipment, including ‘‘nuclear
reactors,’’ ‘‘specially designed’’ for
military use, and parts and components
‘‘specially designed’’ therefor, see
USML Categories VI, XIII, XV, and XX.
(7) Simulators ‘‘specially designed’’ for
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16:18 May 17, 2012
Jkt 226001
military ‘‘nuclear reactors’’ are
controlled by USML Category IX(b). (8)
Laser protection equipment (e.g., eye
and sensor protection) ‘‘specially
designed’’ for military use are subject to
the controls of USML Category X(a)(7).
(9) ‘‘Fuel cells’’ ‘‘specially designed’’ for
a defense article not on the USML or a
commodity controlled by a ‘‘600 series’’
ECCN are controlled according to the
corresponding ‘‘600 series’’ ECCN for
such end items. (10) See USML Category
XV and ECCN 9A515 for controls on
fuel cells specially designed for satellite
or spacecraft.
Items:
a. Construction equipment ‘‘specially
designed’’ for military use, including
such equipment ‘‘specially designed’’
for transport in aircraft controlled by
USML VIII(a) or ECCN 9A610.a; and
‘‘parts,’’ ‘‘components’’ and ‘‘accessories
and attachments’’ ‘‘specially designed’’
therefor, including crew protection kits
used as protective cabs;
b. Concealment and deception
equipment ‘‘specially designed’’ for
military application, including special
paints, decoys, smoke or obscuration
equipment and simulators, and ‘‘parts,’’
‘‘components,’’ ‘‘accessories and
attachments’’ ‘‘specially designed’’
therefor, not controlled by USML
Category XIII.
c. Ferries, bridges (other than those
described in ECCN 0A606 or USML
Category VII), and pontoons ‘‘specially
designed’’ for military use.
d. Test models ‘‘specially designed’’
for the ‘‘development’’ of defense
articles controlled by the USML or
commodities controlled by a ‘‘600
series’’ ECCN.
e. Photointerpretation, stereoscopic
plotting and photogrammetry
equipment ‘‘specially designed’’ for
military use, and ‘‘parts,’’
‘‘components,’’ ‘‘accessories and
PO 00000
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NS Column 1.
RS Column 1.
AT Column 1.
attachments’’ ‘‘specially designed’’
therefor.
f. ‘‘Metal embrittlement agents.’’
g. Through x. [RESERVED]
y. Other commodities as follows:
y.1. Containers ‘‘specially designed’’
for defense articles or items controlled
by a ‘‘600 series’’ ECCN.
y.2 Field generators ‘‘specially
designed’’ for military use.
y.3 Power controlled searchlights
and control units therefor, ‘‘specially
designed’’ for military use, and
‘‘equipment’’ mounting such units; and
‘‘parts,’’ ‘‘components’’ and ‘‘accessories
and attachments’’ ‘‘specially designed’’
therefor.
y.4 to y.98. [RESERVED]
y.99. Commodities not identified on
the CCL that (i) have been determined,
in an applicable commodity jurisdiction
determination issued by the U.S.
Department of State, to be subject to the
EAR and (ii) would otherwise be
controlled elsewhere in ECCN 0A617.
8. In Supplement No. 1 to part 774
(the Commerce Control List), Category
0—Nuclear Materials, Facilities, and
Equipment [and Miscellaneous Items],
Export Control Classification Number
(ECCN) 0A918 is amended
a. By revising the License Exception
section; and
b. By revising the List of Items
Controlled section to read as follows:
0A918 Miscellaneous Military
Equipment Not on the Wassenaar
Munitions List
*
*
*
*
*
License Exceptions
LVS: $1,500, $0 for Rwanda
GBS: N/A
CIV: N/A
List of Items Controlled
Unit: In Number.
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Related Controls: See ECCN
0A617.y.3 for items formerly controlled
by ECCN 0A918.a.
Related Definitions: N/A
Items: Bayonets.
9. In Supplement No. 1 to part 774
(the Commerce Control List), Category
0—Nuclear Materials, Facilities, and
Equipment [and Miscellaneous Items],
add a new ECCN 0B617 between ECCNs
0B006 and 0B986 to read as follows:
0B617 Test, Inspection, and
Production ‘‘Equipment’’ and Related
Commodities ‘‘Specially Designed’’ for
the ‘‘Development’’ or ‘‘Production’’ of
Commodities Controlled by ECCN
0A617.a or USML Category XIII
License Requirements
Reason for Control: NS, RS, AT
Control(s)
Country chart
NS applies to entire entry except 0B617.y .......................................................................................................................................
RS applies to entire entry except 0B617.y .......................................................................................................................................
AT applies to entire entry .................................................................................................................................................................
License Exceptions
LVS: $1500
GBS: N/A
CIV: N/A
STA:
(1) Paragraph (c)(2) of License
Exception STA (§ 740.20(c)(2)) of the
EAR may not be used for any item in
0B617.
(2) Paragraph (c)(1) of License
Exception STA (§ 740.20(c)(1)) may be
used for items in 0B617 without the
need for a determination described in
§ 740.20(g).
List of Items Controlled
Unit: N/A
Related Controls:
Related Definitions: N/A
Items: a. Test, inspection, and
production ‘‘equipment’’ not controlled
by USML Category XIII(k) ‘‘specially
designed’’ for the ‘‘production’’ or
‘‘development’’ of commodities
controlled by ECCN 0A617 or USML
Category XIII.
b. through .x [RESERVED].
y.1 through .y.98 [RESERVED]
y.99 Commodities not identified on
the CCL that (i) have been determined,
in an applicable commodity jurisdiction
determination issued by the U.S.
Department of State, to be subject to the
EAR and (ii) would otherwise be
controlled elsewhere in ECCN 0B617.
NOTE TO 0B617: Field engineer
equipment ‘‘specially designed’’ for use
in a combat zone, identified in WAML
Category 17.d, and mobile repair shops
‘‘specially designed’’ or modified to
service military equipment, identified in
WAML Category 17.j, are controlled by
0B617 to the extent that the items are
not included in USML Category XIII(k).
10. In Supplement No. 1 to part 774
(the Commerce Control List), Category
0—Nuclear Materials, Facilities, and
Equipment [and Miscellaneous Items],
add a new ECCN 0C617 after ECCN
0C201 to read as follows:
0C617 Miscellaneous Materials
‘‘Specially Designed’’ for Military Use
License Requirements
Reason for Control: NS, RS, AT
Control(s)
Country chart
NS applies to entire entry except 0C617.y ......................................................................................................................................
RS applies to entire entry except 0C617.y ......................................................................................................................................
AT applies to entire entry .................................................................................................................................................................
License Exceptions
LVS: $1500
GBS: N/A
CIV: N/A
(1) STA: Paragraph (c)(2) of License
Exception STA (§ 740.20(c)(2)) of the
EAR may not be used for any item in
0C617.
(2) Paragraph (c)(1) of License
Exception STA (§ 740.20(c)(1)) may be
used for items in 0C617 without the
need for a determination described in
§ 740.20(g).
srobinson on DSK4SPTVN1PROD with PROPOSALS
List of Items Controlled
Unit: End items in number; parts,
component, accessories and attachments
in $ value.
Related Controls: For controls on
other signature suppression materials,
see USML Category XIII and ECCNs
1C001 and 1C101.
Related Definitions:
Items:
a. Materials, coatings and treatments
for signature suppression, ‘‘specially
designed’’ for military use and that are
not controlled by USML Category XIII or
ECCNs 1C001 or 1C101.
b. through x. [RESERVED].
y.1 through y.98 [RESERVED].
y.99. Materials not identified on the
CCL that (i) have been determined, in an
applicable commodity jurisdiction
determination issued by the U.S.
Department of State, to be subject to the
0D617 ‘‘Software’’ ‘‘Specially
Designed’’ for the ‘‘Development,’’
‘‘Production,’’ Operation, Installation,
Maintenance, Repair, Overhaul or
Refurbishing of Commodities
Controlled by 0A617, ‘‘Equipment’’
Controlled by 0B617, or Materials
Controlled by 0C617
License Requirements
Reason for Control: NS, RS, AT
Country chart
NS applies to entire entry except 0D617.y ......................................................................................................................................
RS applies to entire entry except 0D617.y ......................................................................................................................................
AT applies to entire entry .................................................................................................................................................................
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NS Column 1.
RS Column 1.
AT Column 1.
EAR and (ii) would otherwise be
controlled elsewhere in ECCN 0C617.
11. In Supplement No. 1 to part 774
(the Commerce Control List), Category
0—Nuclear Materials, Facilities, and
Equipment [and Miscellaneous Items],
add a new ECCN 0D617 between ECCNs
0D001 and 0D999 to read as follows:
Control(s)
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RS Column 1.
AT Column 1.
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RS Column 1.
AT Column 1.
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License Exceptions
CIV: N/A
TSR: N/A
STA: Paragraph (c)(2) of License
Exception STA (§ 740.20(c)(2))of the
EAR may not be used for any ‘‘software’’
in 0D617.
List of Items Controlled
Unit: $ value
Related Controls: ‘‘Software’’ directly
related to articles controlled by USML
Category XIII is subject to the control of
USML paragraph XIII(l).
Related Definitions: N/A
Items:
a. ‘‘Software’’ (other than ‘‘software’’
controlled in paragraph .y of this entry)
‘‘specially designed’’ for the
‘‘development,’’ ‘‘production,’’
operation or maintenance of
commodities controlled by ECCNs
0A617 (except 0A617.y), 0B617 (except
0B617.y), or 0C617 (except 0C617.y).
b. to x. [RESERVED].
y. Specific ‘‘software’’ ‘‘specially
designed’’ for the ‘‘production,’’
‘‘development,’’ or operation or
maintenance of commodities controlled
by ECCN 0A617, 0B617 or 0C617, as
follows:
y.1. Specific ‘‘software’’ ‘‘specially
designed’’ for the ‘‘production,’’
‘‘development,’’ operation or
maintenance of commodities controlled
by ECCN 0A617.y, 0B617.y or 0C617.y.
y.2 through y.98 [RESERVED].
y.99. Software not identified on the
CCL that (i) has been determined, in an
applicable commodity jurisdiction
determination issued by the U.S.
Department of State, to be subject to the
EAR and (ii) would otherwise be
controlled elsewhere in ECCN 0D617.
12. In Supplement No. 1 to part 774
(the Commerce Control List), Category
0—Nuclear Materials, Facilities, and
Equipment [and Miscellaneous Items]—
ECCN 0E018 is amended by adding a
note at the end of the entry to read as
follows:
Note: This ECCN no longer controls
‘‘technology’’ for items formerly
controlled by 0A018.a. See ECCN
0A617.a for items formerly controlled
by 0A018.a and see the ‘‘technology’’
controls for those items in ECCN
0E617.a.
13. In Supplement No. 1 to part 774
(the Commerce Control List), Category
0—Nuclear Materials, Facilities, and
Equipment [and Miscellaneous Items]
add a new ECCN 0E617 between ECCNs
0E018 and 0E982 to read as follows:
0E018 ‘‘Technology’’ for the
‘‘Development,’’ ‘‘Production,’’ or
‘‘Use’’ of Items Controlled by 0A018
License Requirements
*
*
*
*
0E617 ‘‘Technology’’ ‘‘Required’’ for
the ‘‘Development,’’ ‘‘Production,’’
Operation, Installation, Maintenance,
Repair, Overhaul or Refurbishing of
Commodities Controlled by 0A617,
‘‘Equipment’’ Controlled by 0B617,
Materials Controlled by 0C617, or
‘‘Software’’ Controlled by 0D617
Reason for Control: NS, RS, AT
*
Control(s)
Country chart
NS applies to entire entry except 0E617.y .......................................................................................................................................
RS applies to entire entry except 0E617.y .......................................................................................................................................
AT applies to entire entry .................................................................................................................................................................
License Exceptions
CIV: N/A
TSR: N/A
STA: Paragraph (c)(2) of License
Exception STA (§ 740.20(c)(2)) of the
EAR may not be used for any technology
in 0E617.
srobinson on DSK4SPTVN1PROD with PROPOSALS
List of Items Controlled
Unit: $ value
Related Controls: Technical data
directly related to articles controlled by
USML Category XIII are subject to the
control of USML paragraph XIII(l).
Related Definitions: N/A
Items:
a. ‘‘Technology’’ (other than
‘‘technology’’ controlled by paragraph .y
of this entry) ‘‘required’’ for the
‘‘development,’’ ‘‘production,’’
operation, installation, maintenance,
repair, overhaul, or refurbishing of
commodities or ‘‘software’’ controlled
by ECCN 0A617 (except 0A617.y),
0B617 (except 0B617.y), 0C617 (except
0C617.y), or 0D617 (except 0D617.y).
b. through x. [RESERVED].
y. Specific ‘‘technology’’ ‘‘required’’
for the ‘‘production,’’ ‘‘development,’’
operation, installation, maintenance,
repair, or overhaul of items controlled
by ECCN 0A617, 0B617, 0C617 or
0D617, as follows:
VerDate Mar<15>2010
16:18 May 17, 2012
Jkt 226001
y.1. Specific ‘‘technology’’ ‘‘required’’
for the ‘‘production,’’ ‘‘development,’’
operation, installation, maintenance,
repair or overhaul of items controlled by
ECCN 0A617.y, 0B617.y, 0C617.y or
0D617.y.
y.2. through y.98 [RESERVED].
y.99. ‘‘Technology’’ not identified on
the CCL that (i) has been determined, in
an applicable commodity jurisdiction
determination issued by the U.S.
Department of State, to be subject to the
EAR and (ii) would otherwise be
controlled elsewhere in ECCN 0E617.
Dated: May 14, 2012.
Kevin J. Wolf,
Assistant Secretary of Commerce for Export
Administration.
[FR Doc. 2012–12124 Filed 5–17–12; 8:45 am]
BILLING CODE 3510–33–P
PO 00000
NS Column 1.
RS Column 1.
AT Column 1.
DEPARTMENT OF STATE
22 CFR Part 121
RIN 1400–AD13
[Public Notice 7883]
Amendment to the International Traffic
in Arms Regulations: Revision of U.S.
Munitions List Category XIII
Department of State.
Proposed rule.
AGENCY:
ACTION:
As part of the President’s
Export Control Reform effort, the
Department of State proposes to amend
the International Traffic in Arms
Regulations (ITAR) to revise Category
XIII (materials and miscellaneous
articles) of the U.S. Munitions List
(USML) to describe more precisely the
materials warranting control on the
USML.
SUMMARY:
The Department of State will
accept comments on this proposed rule
until July 2, 2012.
ADDRESSES: Interested parties may
submit comments within 45 days of the
date of publication by one of the
following methods:
• Email:
DDTCResponseTeam@state.gov with the
DATES:
Frm 00012
Fmt 4702
Sfmt 4702
E:\FR\FM\18MYP1.SGM
18MYP1
Agencies
[Federal Register Volume 77, Number 97 (Friday, May 18, 2012)]
[Proposed Rules]
[Pages 29564-29575]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-12124]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 77, No. 97 / Friday, May 18, 2012 / Proposed
Rules
[[Page 29564]]
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 742, 772 and 774
[Docket No. 111229800-2073-01]
RIN 0694-AF51
Revisions to the Export Administration Regulations: Auxiliary and
Miscellaneous Items That No Longer Warrant Control Under the United
States Munitions List and Items on the Wassenaar Arrangement Munitions
List
AGENCY: Bureau of Industry and Security, Department of Commerce.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Bureau of Industry and Security (BIS) publishes this
action to propose how auxiliary and miscellaneous military equipment
and related articles the President determines no longer warrant control
under Category XIII (Auxiliary Military Equipment) of the United States
Munitions List (USML) would be controlled under the Commerce Control
List (CCL) in new Export Control Classification Numbers (ECCNs) 0A617,
0B617, 0C617, 0D617, and 0E617 as part of the proposed new ``600
series'' of ECCNs.
This rule proposes also to integrate into those five new ECCNs
items within the scope of Wassenaar Arrangement Munitions List (WAML)
Category 17 that would be removed from the USML, or that are not
specifically identified on the USML or CCL but that are currently
subject to USML jurisdiction. Finally, this rule proposes to control
some items now classified under ECCNs 0A018, 0A918 and 0E018 under new
ECCNs 0A617 and 0E617. This action would consolidate the above-
mentioned auxiliary and miscellaneous military equipment and related
articles on the CCL in the proposed new ``600 series.'' This rule is
one of a planned series proposing how various types of articles that
the President determines, as part of the Administration's Export
Control Reform Initiative, no longer warrant control on the USML under
the International Traffic in Arms Regulations (ITAR), would be
controlled on the CCL in accordance with the requirements of the Export
Administration Regulations (EAR). This proposed rule is being published
in conjunction with a proposed rule from the Department of State,
Directorate of Defense Trade Controls, which would amend the list of
articles controlled by USML Category XIII.
DATES: Comments must be received by July 2, 2012.
ADDRESSES: You may submit comments by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
The identification number for this rulemaking is BIS-2012-0014.
By email directly to publiccomments@bis.doc.gov. Include
RIN 0694-AF51 in the subject line.
By mail or delivery to Regulatory Policy Division, Bureau
of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th
Street and Pennsylvania Avenue NW., Washington, DC 20230. Refer to RIN
0694-AF51.
FOR FURTHER INFORMATION CONTACT: Michael Rithmire, Office of National
Security and Technology Transfer Controls, Bureau of Industry and
Security, U.S. Department of Commerce, Telephone: (202) 482-6105,
Email: Michael.Rithmire@bis.doc.gov.
SUPPLEMENTARY INFORMATION:
Background
On July 15, 2011, as part of the Administration's ongoing Export
Control Reform Initiative, the Bureau of Industry and Security (BIS)
published a proposed rule (76 FR 41958) (herein the ``July 15 proposed
rule'') that set forth a framework for how to transfer articles the
President determines, in accordance with section 38(f) of the Arms
Export Control Act (AECA) (22 U.S.C. 2778(f)), no longer warrant
control on the United States Munitions List (USML) to control under the
Commerce Control List (CCL) in Supplement No. 1 to Part 774 of the
Export Administration Regulations (EAR). That framework included a
proposal by BIS describing a new ``600 series'' set of Export Control
Classification Numbers (ECCNs) to control defense articles that move to
the CCL from the USML, as well as Wassenaar Arrangement Munitions List
(WAML) items. Specifically, the proposed new ``600 series'' entries
would capture WAML and formerly USML end items and related items that
have been removed from the USML or that are not specifically identified
on the USML or CCL. It would also control some items now classified on
the CCL. These actions would consolidate control of munitions items and
related articles on the CCL.
On November 7, 2011 (76 FR 68675), BIS published a proposed rule
(herein the ``November 7 proposed rule'') proposing several changes to
the framework initially proposed in the July 15 proposed rule.
Following the structure of the July 15 and November 7 proposed
rules, this action proposes to control in new ECCNs 0A617, 0B617,
0C617, 0D617, and 0E617: Auxiliary and miscellaneous military equipment
and related items from WAML 17 that would be removed from USML Category
XIII under the International Traffic in Arms Regulations (ITAR) because
the President determines they no longer warrant control under USML
Category XIII; items not specifically identified on the USML or CCL,
but that currently are subject to USML jurisdiction; and items ending
in ``018'' on the CCL.
The proposed changes described in this rule and the State
Department's proposed amendments to Category XIII of the USML are based
on a review of the USML by the Defense Department, which worked with
the Departments of State and Commerce in preparing the proposed rules.
That review focused on identifying the types of articles that are now
controlled by USML Category XIII and other relevant USML Categories
that are either: (i) Inherently military and otherwise warrant control
on the USML; or (ii) a type common to civil applications, possessing
parameters or characteristics that provide a critical military or
intelligence advantage to the United States, and that are almost
exclusively available from the United States. If an article satisfied
either or both of those criteria, the article remains on the USML. If
an article did not satisfy either criterion, but was determined,
nonetheless, to be a type of article that is now on the corresponding
USML or the Munitions List of the Wassenaar Arrangement on Export
Controls for Conventional Arms and
[[Page 29565]]
Dual-Use Goods and Technologies (Wassenaar Arrangement Munitions List
or WAML), then it has been identified in one of the new ECCNs in this
proposed rule. The license requirements, license policies and other
EAR-specific controls for such items that are proposed in this action
would, when considered in the context of the other proposed amendments
to the USML and the CCL, enhance national security by: (i) Allowing for
greater interoperability with North Atlantic Treaty Organization (NATO)
and other allies while maintaining and expanding robust controls that,
in some instances, include prohibitions on exports or reexports
destined for other countries or intended for proscribed end users and
end uses; (ii) enhancing the U.S. defense industrial base by, for
example, reducing the current incentives for foreign companies to
design out or avoid U.S.-origin ITAR-controlled content, particularly
with respect to generic, unspecified parts and components; and (iii)
permitting the U.S. Government to focus its resources on controlling,
monitoring, investigating, analyzing, and, if need be, prohibiting
exports and reexports of more significant items to destinations, end
users, and end uses of greater concern than NATO allies and other
multi-regime partners.
Pursuant to section 38(f) of the AECA, the President shall review
the USML ``to determine what items, if any, no longer warrant export
controls under'' the AECA. The President must report the results of the
review to Congress and wait 30 days before removing any such items from
the USML. The report must ``describe the nature of any controls to be
imposed on that item under any other provision of law.'' 22 U.S.C.
2778(f)(1).
As noted above, this action proposes to control under the EAR
auxiliary and miscellaneous military equipment and related articles
currently in USML Category XIII under the ITAR that the President
determines no longer warrant control on the USML. If implemented, this
rule would control under the EAR: Items from WAML Category 17 that
would be removed from USML Category XIII; items not specifically
identified on the USML or CCL but that currently are subject to USML
jurisdiction; and items ending in ``018'' on the CCL, specifically,
some items now classified under ECCNs 0A018, 0A918 and 0E018 under new
ECCNs 0A617 and 0E617. This would consolidate the above-mentioned
auxiliary and miscellaneous military equipment and related articles on
the CCL in a proposed new ``600 series.'' As this rule describes the
controls that would be in place for miscellaneous items, it also
specifies how the CCL would be amended to clarify where an item may be
controlled under another USML Category or ECCN.
In the July 15 proposed rule, BIS proposed creating a series of new
ECCNs to control items that: (i) Would be moved from the USML to the
CCL; or (ii) are listed on the Wassenaar Arrangement Munitions List and
are already controlled elsewhere on the CCL. That proposed rule
referred to this series as the ``600 series'' because the third
character in each of the new ECCNs would be a ``6.'' The first two
characters of the ``600 series'' ECCNs serve the same function as
described for any other ECCN in Sec. 738.2 of the EAR. The first
character is a digit in the range 0 through 9 that identifies the
Category on the CCL in which the ECCN is located. The second character
is a letter in the range A through E that identifies the product group
within a CCL Category. In the ``600 series,'' the third character is
the number 6. With few exceptions, the final two characters identify
the WAML category that covers items that are the same or similar to
items in a particular ``600 series'' ECCN.
This proposed rule would create five new ``600 series'' ECCNs in
CCL Category 0 (ECCNs 0A617, 0B617, 0C617, 0D617, and 0E617). ECCN
0A617 would cover miscellaneous equipment, materials, and related
commodities, including crew kits. ECCN 0B617 would cover test,
inspection, and production ``equipment'' and related commodities
``specially designed'' for the ``development'' or ``production'' of
commodities controlled by ECCN 0A617 or USML Category XIII. ECCN 0C617
would cover miscellaneous materials ``specially designed'' for military
use. ECCN 0D617 would cover ``software'' ``specially designed'' for the
``development,'' ``production,'' operation, installation, maintenance,
repair, overhaul or refurbishing of commodities controlled by 0A617,
``equipment'' controlled by 0B617, or materials controlled by 0C617.
ECCN 0E617 would cover ``technology'' ``required'' for the
``development,'' ``production,'' operation, installation, maintenance,
repair, overhaul or refurbishing of commodities controlled by 0A617
``equipment'' controlled by 0B617, materials controlled by 0C617, or
``software'' controlled by 0D617.
BIS will publish additional Federal Register notices containing
proposed amendments to the CCL that will describe proposed controls for
additional categories of articles the President determines no longer
warrant control under the USML. The State Department will publish,
concurrently, proposed amendments to the USML that correspond to the
BIS notices. BIS will also publish proposed rules to further align the
CCL with the WAML and the Missile Technology Control Regime Equipment,
Software and Technology Annex.
Detailed Description of Changes Proposed by This Rule
This proposed rule would create five new ``600 series'' ECCNs in
CCL Category 0--0A617, 0B617, 0C617, 0D617, and 0E617--that would
clarify the EAR controls that apply to auxiliary and miscellaneous
military equipment and related articles the President determines no
longer warrant control under USML Category XIII. This category also
applies to items from WAML Category 17 that would be removed from USML
Category XIII; items not specifically identified on the USML or CCL but
that currently are subject to USML jurisdiction; and items ending in
``018'' on the CCL, specifically, some items now classified under ECCNs
0A018, 0A918 and 0E018 under new ECCNs 0A617 and 0E617. This action
would consolidate the above-mentioned auxiliary and miscellaneous
military equipment and related articles on the CCL in a proposed new
``600 series'' consistent with the regulatory construct identified in
the July 15 proposed rule. Finally, this rule would add a corresponding
new definition to section 772.1 of the EAR.
The proposed changes are discussed in more detail below.
New ECCN 0A617: Miscellaneous Equipment, Materials, and Related
Commodities
ECCN 0A617.a would control construction equipment ``specially
designed'' for military use, including such equipment ``specially
designed'' for transport in aircraft controlled by USML Category
VIII(a) or proposed ECCN 9A610.a (proposed in the November 7 rule); and
``parts,'' ``components'' and ``accessories and attachments''
``specially designed'' therefor, including crew protection kits used as
protective cabs. Such items currently are controlled under ECCN 0A018.a
as ``construction equipment built to military specifications, including
equipment specially designed for airborne transport; and specially
designed parts and accessories for such construction equipment,
including crew protection kits used as protective cabs,'' and are
identified in WAML Category 17.b.
[[Page 29566]]
ECCN 0A617.b would control concealment and deception equipment
``specially designed'' for military application that are not controlled
in USML Category XIII(g), as well as ``parts,'' ``components,''
``accessories and attachments'' specially designed therefor. ECCN
0A617.c would control ferries, bridges (other than those described in
ECCN 0A606 or USML Category VII), and pontoons if the ferries, bridges
or pontoons are ``specially designed'' for military use, also
identified in WAML Category 17.m. Although not explicitly named or
described on the USML, these items are currently controlled by USML
Category VII(g). ECCN 0A617.d would control test models ``specially
designed'' for the ``development'' of defense articles controlled by
the USML or commodities controlled in the ``600 series.'' Such items
are identified in WAML Category 17.n. Although not explicitly named or
described on the USML, such items would be controlled in relation to
the defense article they model, such as items in USML Categories VII(g)
and VIII(h). ECCN 0A617.e. would control photointerpretation,
stereoscopic plotting and photogrammetry equipment that would not be
controlled by USML Category XIII(a) or elsewhere in the USML, as well
as ``parts,'' ``components,'' ``accessories and attachments''
``specially designed'' therefor. ECCN 0A617.f would control ``metal
embrittlement agents'', currently controlled by USML Category XIII(i)
but not within the scope of the revised Category XIII the State
Department has proposed. The term ``metal embrittlement agents'' would
be defined in the EAR the same way it is now defined in the ITAR.
Paragraphs .g through .x would be reserved for possible future use.
Unlike other proposed Category rules previously published as a part of
the Export Control Reform Initiative, ECCN 0A617, and the other ECCNs
in the 0X617 series, would not contain a catch-all control in the
``.x'' subparagraph for all parts and components ``specially designed''
for items in that category because neither USML Category XIII nor WAML
Category 17 contain such a catch-all for auxiliary or miscellaneous
military equipment. To the extent a part or component is controlled in
this ECCN, it is described in the applicable subparagraphs.
Paragraph .y would control other commodities, as listed in the .y
subparagraphs. Specifically, ECCN 0A617.y.1 would control containers
``specially designed'' for military use, which are currently identified
in WAML Category 17.l. ECCN 0A617.y.2 would control military field
generators, which are currently identified in WAML 17.k. ECCN 0A617.y.3
would control military power-controlled searchlights and related items.
Such items are currently classified under ECCN 0A918.a as
``miscellaneous military equipment.'' Paragraphs y.4 through y.98 would
be reserved for future use.
Finally, to the extent an item referred to in WAML 17 is already
clearly controlled in another existing USML Category or ECCN, then the
``related controls'' note at the beginning of proposed ECCN 0A617 would
identify where in the CCL and/or USML it is controlled.
New ECCN 0B617: ``Equipment'' ``Specially Designed'' for Commodities
Controlled by ECCN 0A617.a or USML Category XIII
ECCN 0B617.a would control test, inspection, and production
``equipment'' not controlled by USML Category XIII(k) ``specially
designed'' for the ``production'' or ``development'' of commodities
controlled by ECCN 0A617 or USML Category XIII. Paragraphs .b through
.x would be reserved for possible future use.
ECCN 0B617.y would control specific test, inspection, and
production ``equipment'' ``specially designed'' for the ``production''
or ``development'' of commodities controlled by ECCN 0A617 (except
0A617.y) and ``parts,'' ``components,'' and ``accessories and
attachments'' ``specially designed'' therefor. Since this proposed rule
does not list specific equipment under paragraph .y, sub-paragraphs
.y.1 through .y.98 would be reserved for possible future use.
A note to 0B617 explains that field engineer equipment ``specially
designed'' for use in a combat zone and mobile repair shops ``specially
designed or modified to service military equipment, which are
identified in WAML Categories 17.d and 17.j,'' respectively, are
classified under ECCN 0B617 to the extent that the items are not
included in USML XIII(k).
New ECCN 0C617: Miscellaneous Materials ``Specially Designed'' for
Military Use
ECCN 0C617.a would control materials, coatings and treatments for
signature suppression, ``specially designed'' for military use and that
are not controlled by the USML or ECCNs 1C001 or 1C101. Paragraphs .b
through .x would be reserved for possible future use. ECCN 0C617.y
would control materials ``specially designed'' for military use, which
are currently identified in WAML Category 17.c. However, this proposed
rule would not include in paragraph .y those items that are ``specially
designed'' for defense articles on the USML. Because this proposed rule
does not list specific materials under paragraph .y, sub-paragraphs
.y.1 through .y.98 would be reserved for possible future use.
Of particular significance to this rule, as noted in the November 7
rule, materials currently controlled by USML Category XIII(f), not
identified in another USML Category, and not identified in ECCN 0C617
through this proposed rule, will likely be captured in other ``600
series'' ECCNs published in future proposed rules. In each instance,
the materials will likely be classified in the C entry related to the
end items for which the materials are specially designed. For example,
as stated in the November 7 proposed rule, materials specially designed
for military aircraft that are currently controlled under USML Category
XIII(f) would be captured by ECCN 9C610, which controls materials
``specially designed'' for military aircraft controlled by ECCN 9A610.
New ECCN 0D617: ``Software'' ``Specially Designed'' for Items
Controlled by ECCN 0A617, 0B617 or 0C617
ECCN 0D617.a would control ``software'' ``specially designed'' for
the ``development,'' ``production,'' operation, installation,
maintenance, repair, overhaul or refurbishing of commodities controlled
by ECCN 0A617, ``equipment'' controlled by ECCN 0B617, or materials
controlled by ECCN 0C617. Consistent with the other proposed ``600
series'' software controls, the .y paragraphs for ECCN 0D617 would
control specific ``software'' ``specially designed'' for the
``production,'' ``development,'' or operation or maintenance of
commodities controlled by ECCN 0A617.y, 0B617.y or 0C617.y. Paragraphs
.b through .x would be reserved for possible for future use. Because
this proposed rule does not list specific materials under paragraph .y,
sub-paragraphs .y.1 through .y.98 also would be reserved for possible
future use.
New ECCN 0E617: ``Technology'' ``Required'' for Items Controlled by
ECCN 0A617, 0B617, 0C617 or 0D617
ECCN 0E617.a would control ``technology'' ``required'' for the
``development,'' ``production,'' operation, installation, maintenance,
repair, overhaul or refurbishing of commodities controlled by ECCN
0A617, ``equipment'' controlled by
[[Page 29567]]
ECCN 0B617, materials controlled by ECCN 0C617, or ``software''
controlled by ECCN 0D617. Items controlled by ECCN 0E617 would include
``technology'' currently in ECCN 0E018 for the ``production'' of crew
protection kits used as protective cabs (currently in ECCN 0A018.a and
proposed for ECCN 0A617). Paragraphs .b through .x would be reserved
for possible for future use.
Subparagraph .y.1 of ECCN 0E617 would control specific
``technology'' ``required'' for the ``development,'' ``production,''
operation, installation, maintenance, repair, overhaul or refurbishing
of items controlled by ECCNs 0A617.y, 0B617.y, 0C617.y or 0D617.y. ECCN
0E617.y.1 would control ``technology'' for military power-controlled
searchlights and related items, which would be classified under
proposed ECCN 0A617.y.3 (moving from ECCN 0A918.a). The ``technology''
for such items is currently not classified on the CCL, but if this rule
is implemented, it would be classified under ECCN 0E617.y.1.
Subparagraphs .y.2 through .y.98 would be reserved for possible future
use.
Including ``.y.99'' Paragraphs in ``600 Series'' ECCNs
ECCNs 0A617, 0B617, 0C617, 0D617 and 0E617 would also contain a
paragraph ``.y.99,'' that would control any item that: (i) Has been
determined, in an applicable commodity jurisdiction determination
issued by the U.S. Department of State, to be subject to the EAR; and
(ii) would otherwise be controlled elsewhere under one of the Category
0, ``600 series.''
Applicable Controls
All items in these proposed 0Y617 ECCNs (except items in the .y
paragraphs) would be subject to national security (NS Column 1),
regional stability (RS Column 1) and antiterrorism (AT Column 1)
controls. Items in the .y paragraphs would be subject only to
antiterrorism (AT Column 1) controls.
Under ECCN 0A018, ``construction equipment built to military
specifications, including equipment specially designed for airborne
transport; and specially designed parts and accessories for such
construction equipment, including crew protection kits used as
protective cabs'' are currently controlled for national security,
antiterrorism and United Nations reasons. Under proposed ECCN 0A617.a,
they would be controlled for national security, regional stability and
antiterrorism reasons, but no longer for United Nations reasons.
Controlling these items for United Nations reasons is unnecessary in
light of the November 7 proposed rule's amendment to the RS Column 1
licensing policy, which stated that there would be a general policy of
denial for ``600 series'' items if the destination is subject to a
United States arms embargo. A list of such destinations is identified
in proposed section 740.2(a)(12), set forth in the November 7 proposed
rule.
In addition, control of power controlled searchlights and control
units therefor, designed for military use, and equipment mounting such
units; and ``parts,'' ``components,'' and ``accessories and
attachments'' ``specially designed'' therefor, would be moved from ECCN
0A918.a to ECCN 0A617.y.3. Under ECCN 0A918, such items are controlled
for regional stability, antiterrorism and United Nations reasons, but
under proposed ECCN 0A617.y.3, they would be controlled for
antiterrorism reasons only. More advanced alternatives to ECCN 0A918
items exist today compared to items currently controlled under ECCN
0A918. For this reason, there is no longer a need to control such items
for regional stability reasons. The rationale for removing the United
Nations reason for control is the same as that for crew protection kits
discussed above.
Revision to Three ECCNs: 0A018, 0A918 and 0E018
As discussed above, this proposed rule would remove ``construction
equipment built to military specifications, including specially
designed for airborne transport; and specially designed parts and
accessories for such construction equipment, including crew protection
kits used as protective cabs'' from ECCN 0A018.a and add them to the .a
paragraph of proposed ECCN 0A617. It would also move ``power controlled
searchlights and control units therefor, designed for military use, and
equipment mounting such units; and specially designed parts and
accessories therefor'' from ECCN 0A918.a to the .y.3 paragraph of
proposed ECCN 0A617.
Accordingly, this rule would amend ECCN 0A918 to remove paragraph
.a and provisions related to that paragraph. The related controls
paragraph would be amended to provide a cross-reference to proposed
ECCN 0A617.y.3.
In addition, this rule would amend ECCN 0A018.a to cross-reference
new ECCN 0A617.a, and would amend ECCN 0E018 to add a note stating that
this ECCN no longer controls ``technology'' for items formerly
classified under ECCN 0A018.a, which would now be classified under ECCN
0A617.a. Under this rule, the technology for such items, as noted
above, would be classified under ECCN 0E617.a.
Note with respect to the proposed movement of ECCN 0A018.a items to
proposed ECCN 0A617.a that in the July 15 proposed rule, BIS proposed
moving ECCN 0A018.a items to proposed ECCN 0A606.a. Thereafter, on
December 6, 2011, BIS published another proposed rule (76 FR 76085)
that included revisions to the text of ECCN 0A606.a to cover a broad
array of military vehicles, both armed and unarmed. While the revised
proposal for ECCN 0A606.a was intended to include 0A018.a items, it did
not explicitly name such items. After further reflection, BIS has
concluded that expressly identifying military construction equipment in
ECCN 0A617.a, rather than including it in a broad category of armed and
unarmed military vehicles in ECCN 0A606.a, would be more informative
and less likely to confuse the public. In addition, the items currently
classified under ECCN 0A018.a are identified in WAML Category 17.
Accordingly, this rule would include construction equipment specially
designed for military use and related items in proposed ECCN 0A617.a,
to promote clarity and to further the Administration's goal of aligning
the 600 series ECCNs with the WAML. Neither the December 6 proposed
rule nor this proposed rule would change the license requirements or
the license exception eligibility originally proposed for construction
equipment and related items in the July 15 proposed rule.
Corresponding Amendments
To implement the regional stability controls that apply to the five
new ``600 series'' ECCNs noted above, this proposed rule would amend
Sec. 742.6(a)(1) of the EAR to apply the RS Column 1 licensing policy
to items classified under ECCNs 0A617, 0B617, 0C617, 0D617 and 0E617
(except the .y paragraphs).
In conjunction with the proposed control on ``metal embrittlement
agents'' in new ECCN 0A617.f, this rule proposes adding to section
772.1 of the EAR (Definitions of terms as used in the EAR) to define
that term as it currently is in USML Category XIII(m).
Relationship to the July 15 and November 7 Proposed Rules
As referenced above, the purpose of the July 15 proposed rule was
to establish the framework to support the transfer of items that the
President determines no longer warrant control on the USML from the
USML to the CCL. To facilitate that goal, the July 15
[[Page 29568]]
proposed rule contains definitions and concepts that were meant to be
applied across categories. However, as BIS undertakes rulemakings to
move specific categories of items from the USML to the CCL, there may
be unforeseen issues or complications that may require BIS to reexamine
those definitions and concepts. The comment period for the July 15
proposed rule closed on September 13, 2011. In the November 7 proposed
rule, BIS proposed several changes to those definitions and concepts.
The comment period for the November 7 proposed rule closed on December
22, 2011.
To the extent that this rule's proposals affect any provision in
either of those proposed rules or that any provisions in either of
those proposed rules affect this proposed rule, BIS will consider
comments on those provisions so long as they are within the context of
the changes proposed in this rule.
BIS believes that the following provisions of the July 15 proposed
rule and the November 7 proposed rule are among those that could affect
this proposed rule, but because those rules remain under review, BIS
does not know yet how exactly they may impact this rule:
De minimis provisions in Sec. 734.4;
Restrictions on use of license exceptions in Sec. Sec.
740.2, 740.10, 740.11, and 740.20;
Change to national security licensing policy in Sec.
742.4;
Requirement to request authorization to use License
Exception STA (strategic trade authorization) for end items in 600
series ECCNs and procedures for submitting such requests in Sec. Sec.
740.2, 740.20, 748.8 and Supp. No. 2 to part 748;
Addition of ``600 series'' items to Supplement No. 2 to
Part 744--List of Items Subject to the Military End-Use Requirement of
Sec. 744.21; and
Definitions of terms in Sec. 772.1.
BIS believes that the following provisions of this proposed rule
are among those that could affect the provisions of the July 15 and
November 7 proposed rules:
Additional ``600 series'' items identified in the RS
Column 1 licensing policy described in Sec. 742.6.
Effects of This Proposed Rule
BIS believes that the principal effect of this rule will be to
provide greater flexibility for exports and reexports to NATO member
countries and other multiple-regime-member countries of items the
President determines no longer warrant control on the USML. This
greater flexibility will be in the form of: availability of license
exceptions, particularly License Exceptions RPL (servicing and
replacement of parts and equipment) and STA (strategic trade
authorization); eliminating the requirements for manufacturing license
agreements and technical assistance agreements in connection with
exports of technology; reducing or eliminating exporter and
manufacturer registration requirements and associated registration
fees; and applying the EAR's de minimis threshold principle for items
constituting less than a de minimis amount of controlled U.S.-origin
content in foreign-made items. Some of these specific effects are
discussed in more detail below.
De minimis
The July 15 proposed rule would impose certain unique de minimis
requirements on items controlled under the new ``600 series'' ECCNs.
Section 734.3 of the EAR provides, inter alia, that, under certain
conditions, items made outside the United States that incorporate items
subject to the EAR are not subject to the EAR if they do not exceed a
de minimis percentage of controlled U.S. origin content. Depending on
the destination, the de minimis percentage can be either 10 percent or
25 percent. If the July 15 proposed rule's amendments at Sec. 734.4 of
the EAR are adopted, the new ECCNs 0A617, 0B617, 0C617, 0D617, and
0E617 proposed in this rule would be subject to the de minimis
provisions set forth in the July 15 proposed rule. Foreign-made items
incorporating items controlled under the new ECCNs would become
eligible for de minimis treatment at the 10 percent level (i.e., a
foreign-made item is not subject to the EAR, for de minimis purposes,
if the value of its U.S.-origin controlled content does not exceed 10
percent of foreign-made item's value). In contrast, the AECA does not
permit the ITAR to have a de minimis treatment for USML-listed items,
regardless of the significance or insignificance of the U.S.-origin
content or the percentage of U.S.-origin content in the foreign-made
item (i.e., USML-listed items remain subject to the ITAR when they are
incorporated abroad into a foreign-made item, regardless of either of
these factors). In addition, foreign-made items that incorporate any
items that are currently classified under an 018 ECCN (e.g., ECCN
0E018) and that are moved to a new ``600 series'' ECCN (e.g., ECCN
0E617) would be subject to the EAR if those foreign-made items contain
more than 10 percent U.S.-origin controlled content, regardless of the
destination and the proportion of the U.S.-origin controlled content
accounted for by the former 018 ECCN items.
Use of License Exceptions
The July 15 proposed rule would impose certain restrictions on the
use of license exceptions for items that would be controlled under the
new ``600 series'' ECCNs on the CCL. For example, proposed Sec.
740.2(a)(12) would make ``600 series'' items that are destined for a
country subject to a United States arms embargo ineligible for shipment
under a license exception, except where authorized by License Exception
GOV under Sec. 740.11(b)(2)(ii) of the EAR. BIS believes that, even
with the July 15 and November 7 proposed restrictions on the use of
license exceptions for ``600 series'' items, the restrictions on those
items currently on the USML would be reduced, particularly with respect
to exports to NATO members and multiple-regime member countries, if
those items are moved from the USML to proposed ECCN 0A617, 0B617 or
0C617. BIS also believes that, in practice, moving items from a 018
ECCN to a new ``600 series'' ECCN (e.g., the construction equipment
built to military specifications and related items that would move from
ECCN 0A018.a to proposed ECCN 0A617.a) would have little effect on
license exception availability for those items. However, BIS is aware
of two situations (the use of License Exceptions GOV and STA) in which
movement of items from a 018 ECCN to a new ``600 series'' ECCN could,
in practice, impose greater limits on the use of license exceptions
than currently is the case.
First, the July 15 proposed rule would limit the use of License
Exception GOV for ``600 series'' commodities to situations in which the
U.S. Government is the consignee and end user, or to situations in
which the consignee or end user is the government of a country listed
in Sec. 740.20(c)(1). Currently, construction equipment built to
military specifications and related items, classified under ECCN
0A018.a, may be exported under any provision of License Exception GOV
to any destination authorized by that provision if all of the
conditions of that provision are met and nothing else in the EAR
precludes such shipment.
Second, the July 15 proposed rule would: (i) Limit the use of
License Exception STA for ``end items'' in ``600 series'' ECCNs to
those end items for which a specific request for License Exception STA
eligibility (filed in conjunction with a license application) has been
approved; and (ii) require that the end item be for ultimate end use by
a foreign government agency of a type
[[Page 29569]]
specified in the July 15 proposed rule. The July 15 proposed rule also
would limit exports of ``600 series'' parts, components, accessories,
and attachments under License Exception STA for ultimate end use by the
same set of end users. Neither the end-item restriction nor the
restriction applicable to parts, components, accessories, and
attachments currently applies to the use of License Exception STA for
commodities classified under ECCN 0A018.a, but the latter restriction
would apply to these commodities under new ECCN 0A617.a. In addition,
the July 15 proposed rule would limit the shipment of ``600 series''
items under License Exception STA to destinations listed in Sec.
740.20(c)(1). Currently, the commodities classified under ECCN 0A018.a
(which would be moved to ECCN 0A617.a by this proposed rule) may be
shipped under License Exception STA to destinations listed in Sec.
740.20(c)(1) or (c)(2).
In addition, this proposed rule provides that STA-eligible items
controlled under new ECCN 0A617, 0B617, or 0C617 would not be subject
to the restriction, proposed in the July 15 rule, on using of License
Exception STA for ``end items'' in ``600 series'' ECCNs unless a
specific request for License Exception STA eligibility has been
submitted to, and approved by, BIS.
Items controlled under proposed ECCNs 0A617, 0B617 or 0C617 would
be eligible for License Exception LVS (limited value shipments) up to a
value of $1,500. Note that for items previously classified under ECCN
0A018.a that would, under this proposal, be classified under ECCN
0A918.a, the threshold for LVS availability would generally drop from
$5,000 to $1,500 with this proposed change (and increase from $0 to
$1,500 for Rwanda). Items controlled under proposed ECCNs 0A617, 0B617,
0C617, 0D617 or 0E617 also would be eligible for License Exception TMP
(temporary exports), and items controlled under proposed ECCNs 0A617,
0B617 or 0D617 would be eligible for License Exception RPL (servicing
and replacement parts).
Making U.S. Export Controls More Consistent With the Wassenaar
Arrangement Munitions List Controls
Since the beginning of the Export Control Reform Initiative, the
Administration has stated that the reforms will be consistent with the
United States' obligations to the multilateral export control regimes.
Accordingly, the Administration will, in this and subsequent proposed
rules, exercise its national discretion to implement, clarify, and, to
the extent feasible, align its controls with those of the regimes. For
example, proposed ECCNs 0A617 and 0C617 implement, to the extent
possible, the controls in WAML Category 17 pertaining to miscellaneous
munitions items, while proposed ECCNs 0B617.a, 0D617 and 0E617, to the
extent possible, implement the controls in WAML Category 18 for
production equipment, the controls in WAML Category 21 for software,
and the controls in WAML Category 22 for technology.
Other Effects: National Security and Regional Stability Controls
Pursuant to the framework identified in the July 15 proposed rule,
auxiliary and miscellaneous military commodities classified under ECCN
0A617 (other than ECCN 0A617.y), along with related test inspection and
production equipment, materials, software, and technology classified
under ECCNs 0B617, 0C617, 0D617 or 0E617 (except items classified under
the .y paragraphs of these ECCNs) would be subject to the licensing
policies that apply to items controlled for national security reasons,
as described in Sec. 742.4(b)(1)--specifically, NS Column 1 controls.
In addition, commodities in ECCN 0A617 (other than 0A617.y), along with
related test, inspection and production equipment, materials, software
and technology classified under ECCNs 0B617, 0C617, 0D617 or 0E617
(except items classified under the .y paragraphs of these ECCNs), would
be subject to the regional stability licensing policies set forth in
Sec. 742.6(a)(1)--specifically, RS Column 1.
The July 15 proposed rule would change Sec. 742.4 to apply a
general policy of denial to ``600 series'' items for destinations that
are subject to a United States arms embargo. That policy would apply to
all items controlled for national security (NS) reasons under this
proposed rule. The November 7 proposed rule would expand that general
policy of denial to include ``600 series'' items subject to the
licensing policies that apply to items controlled for regional
stability reasons, as described in Sec. 742.6(b)(1)--specifically, RS
Column 1. While this change might seem redundant for the items affected
by this proposed rule, it ensures that a general denial policy would
apply to any ``600 series'' items that are controlled for missile
technology (MT) and regional stability (RS) reasons, but not for
national security (NS) reasons (as would be the case for certain items
affected by the November 7 proposed rule).
Section-by-Section Description of the Proposed Changes
Section 742.6--ECCNs 0A617, 0B617, 0C617, 0D617 and 0E617
would be added to Sec. 742.6(a)(1) to impose an RS Column 1 license
requirement and licensing policy, including a general policy of denial
in Section 742.6(b)(1), for applications to export or reexport ``600
series'' items to destinations that are subject to a United States arms
embargo.
Section 772.1--The definition section of the EAR would be
amended to include, in alphabetical order, the definition of the term
``metal embrittlement agents'' to correspond with the proposed
classification of such items under ECCN 0A617.f.
Supplement No. 1 to part 774--ECCNs 0A617, 0B617, 0C617,
0D617 and 0E617 would be added to Supplement No. 1 to part 774. ECCN
0A018 would be removed and reserved, and the related controls paragraph
would be amended to include a cross-reference directing the public to
proposed new ECCN 0A617.a for items currently controlled by ECCN
0A018.a. ECCN 0A918 would be amended to remove paragraph .a and
provisions related to that paragraph. The related controls paragraph
would be amended to include a cross-reference directing the public to
proposed new ECCN 0A617.y.3. And ECCN 0E018 would be amended to add a
note cross-referencing controls in proposed ECCN 0E617.a.
Request for Comments
BIS seeks comments on this proposed rule. BIS will consider all
comments received on or before July 2, 2012. All comments (including
any personally identifying information or information for which a claim
of confidentially is asserted either in those comments or their
transmittal emails) will be made available for public inspection and
copying. Parties who wish to comment anonymously may do so by
submitting their comments via www.Regulations.gov, leaving the fields
that would identify the commenter blank and including no identifying
information in the comment itself.
Although the Export Administration Act expired on August 20, 2001,
the President, through Executive Order 13222 of August 17, 2001, 3 CFR,
2001 Comp., p. 783 (2002), as extended by the Notice of August 12,
2011, 76 FR 50661 (August 16, 2011), has continued the Export
Administration Regulations in effect under the International Emergency
Economic Powers Act. BIS continues to carry out the provisions of the
Act, as appropriate and to the extent
[[Page 29570]]
permitted by law, pursuant to Executive Order 13222.
Rulemaking Requirements
1. Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distribute impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been designated a ``significant regulatory
action,'' although not economically significant, under section 3(f) of
Executive Order 12866. Accordingly, the rule has been reviewed by the
Office of Management and Budget (OMB).
2. Notwithstanding any other provision of law, no person is
required to respond to, nor is subject to a penalty for failure to
comply with, a collection of information, subject to the requirements
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA),
unless that collection of information displays a currently valid OMB
control number. This proposed rule would affect two approved
collections: Simplified Network Application Processing + System
(control number 0694-0088), which includes, among other things, license
applications, and License Exceptions and Exclusions (0694-0137).
As stated in the July 15, 2011, proposed rule (76 FR 41958), BIS
believes that the combined effect of all rules to be published adding
items to the EAR that would be removed from the ITAR as part of the
administration's Export Control Reform Initiative would increase the
number of license applications submitted by approximately 16,000
annually, resulting in an increase in burden hours of 5,067 (16,000
transactions at 17 minutes each) under control number 0694-0088.
Some items formerly on the USML would become eligible for License
Exception STA under this rule. As specified in the STA eligibility
paragraph for proposed new ECCNs 0A617, 0B617, and 0C617, such items
would not need a determination of eligibility per Sec. 740.20(g) of
the EAR. As stated in the July 15 proposed rule, BIS believes that the
increased use of License Exception STA resulting from the combined
effect of all rules to be published adding items to the EAR that would
be removed from the ITAR as part of the administration's Export Control
Reform Initiative would increase the burden associated with control
number 0694-0137 by about 23,858 hours (20,450 transactions at 1 hour
and 10 minutes each).
BIS expects that this increase in burden would be more than offset
by a reduction in burden hours associated with approved collections
related to the ITAR. This proposed rule addresses controls on auxiliary
and miscellaneous equipment, materials and related parts, components,
test and production equipment, software, and technology. The largest
impact of the proposed rule would likely apply to exporters of end
items. Under the EAR, such items would become eligible for export to
NATO member states and other close allies under License Exception STA.
Use of License Exception STA imposes a paperwork and compliance burden
because, for example, exporters must furnish information about the item
being exported to the consignee and obtain from the consignee an
acknowledgement and commitment to comply with the EAR. However, the
Administration understands that complying with the requirements of STA
is likely to be less burdensome than applying for licenses. For
example, under License Exception STA, a single consignee statement can
apply to an unlimited number of products, need not have an expiration
date, and need not be submitted to the government in advance for
approval. Suppliers with regular customers can tailor a single
statement and assurance to match their business relationship rather
than applying repeatedly for licenses with every purchase order to
supply reliable customers in countries that are close allies or members
of export control regimes, or both.
Even in situations in which a license would be required under the
EAR, the burden likely will be reduced compared to the license
requirement of the ITAR. In particular, license applications for
exports of technology controlled by ECCN 0E617 are likely to be less
complex and burdensome than the authorizations required to export ITAR-
controlled technology, i.e., Manufacturing License Agreements and
Technical Assistance Agreements.
3. This rule does not contain policies with Federalism implications
as that term is defined under E.O. 13132.
4. The Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C.
601 et seq., generally requires an agency to prepare an initial
regulatory flexibility analysis (IRFA) for any rule subject to the
notice and comment rulemaking requirements under the Administrative
Procedure Act (5 U.S.C. 553) or any other statute. However, under
section 605(b) of the RFA, if the head of an agency certifies that a
rule will not have a significant impact on a substantial number of
small entities, the RFA does not require the agency to prepare a
regulatory flexibility analysis. Pursuant to section 605(b), the Chief
Counsel for Regulation, Department of Commerce, certified to the Chief
Counsel for Advocacy, Small Business Administration that this proposed
rule, if promulgated, will not have a significant impact on a
substantial number of small entities.
Number of Small Entities
The Bureau of Industry and Security (BIS) does not collect data on
the size of entities that apply for and are issued export licenses.
Although BIS is unable to estimate the exact number of small entities
that would be affected by this rule, it acknowledges that this rule
would affect some unknown number of them.
Economic Impact
This proposed rule is part of the Administration's Export Control
Reform Initiative. Under that initiative, the United States Munitions
List (22 CFR part 121) (USML) will be revised to be a ``positive''
list, i.e., a list that does not use generic, catch-all controls on any
part, component, accessory, attachment, or end item that was in any way
specifically modified for a defense article, regardless of the
article's military or intelligence significance or non-military
applications. At the same time, articles that the President determines
no longer warrant control on the USML will become controlled on the
Commerce Control List (CCL). Such items, along with certain military
items that currently are on the CCL, will be identified in specific
Export Control Classification Numbers (ECCNs) known as the ``600
series'' ECCNs. In addition, some items currently on the Commerce
Control List will move from existing ECCNs to the new ``600 series''
ECCNs.
This rule addresses certain miscellaneous equipment and related
articles currently controlled in WAML Category 17 (Miscellaneous
equipment, materials and `libraries' and specially designed components)
and USML Category XIII (Materials and Miscellaneous Articles).
Changing the jurisdictional status of these USML articles would,
potentially, reduce the burden on small entities (and other entities as
well) through: (i) Eliminating some license requirements;
[[Page 29571]]
(ii) increasing availability of license exceptions; (iii) simplifying
license application procedures; and (iv) reducing or eliminating
registration fees.
These amendments are part of the Administration's effort to make
the USML the U.S. Government's list of critical military and
intelligence items that warrant the stringent worldwide controls of the
ITAR, while controlling all other military and intelligence items,
particularly generic parts and components, through the CCL. BIS
believes that the economic benefits for the proposed amendments include
the significant reduction in the time spent determining and addressing
issues associated with determining the jurisdictional status of such
items now.
In addition, parts and components currently controlled under the
ITAR remain under ITAR control when incorporated into foreign-made
items, regardless of the significance or insignificance of the item.
This discourages foreign buyers from incorporating such U.S. content.
The availability of de minimis treatment for items that are transferred
to control under the EAR may reduce the disincentive to foreign
manufacturers for purchasing U.S.-origin parts and components.
Many exports and reexports of the Category XIII articles that would
be placed on the CCL by this rule would become eligible for license
exceptions that apply to shipments to U.S. Government agencies, thereby
reducing the number of licenses that exporters of these items would
need. License Exceptions under the EAR would allow suppliers to send
routine replacement and low level parts to NATO member states and other
close allies and export control regime partners for use by those
governments, and for use by contractors building equipment for those
governments or for the U.S. Government without having to obtain export
licenses. Under License Exception Strategic Trade Authorization (STA),
the exporter would need to furnish information about the item being
exported to the consignee and obtain a statement from the consignee
that, among other things, would commit the consignee to comply with the
EAR and other applicable U.S. laws. Because such statements and
obligations can apply to an unlimited number of transactions and have
no expiration date, they would impose a net reduction in burden on
transactions that the government routinely approves through the license
application process that the License Exception STA statements would
replace.
Even for exports and reexports for which a license would be
required under the proposed rule, the process would be simpler and less
costly under the EAR. When a USML Category XIII article is moved to the
CCL, the number of destinations for which a license is required would
remain unchanged. However, the burden on the license applicant would
decrease because the licensing procedure for CCL items is simpler and
more flexible than the license procedure for USML articles.
Under the USML licensing procedure, an applicant must include a
purchase order or contract with its application. There is no such
requirement under the CCL licensing procedure. This difference gives
the CCL applicant at least two advantages. First, the applicant has a
way to determine whether the U.S. Government will authorize the
transaction before it enters into potentially lengthy, complex and
expensive sales presentations or contract negotiations. Under the USML
procedure, the applicant must caveat all sales presentations with a
reference to the need for government approval, and is more likely to
engage in substantial effort and expense only to find that the
government will reject the application. Second, a CCL license applicant
need not limit its application to the quantity or value of one purchase
order or contract. It may apply for a license to cover all of its
expected exports or reexports to a specified consignee over the life of
a license (normally two years, but may be longer if circumstances
warrant a longer period), thus reducing the total number of licenses
for which the applicant must apply.
In addition, many applicants exporting or reexporting items that
this rule would transfer from the USML to the CCL would realize cost
savings through the elimination of some or all registration fees
currently assessed under the USML's licensing procedure. Currently,
USML applicants must pay to use the USML licensing procedure even if
they never actually are authorized to export. Registration fees for
manufacturers and exporters of articles on the USML start at $2,250 per
year, increase to $2,750 for exporters applying for one to ten licenses
per year and further increase to $2,750, plus $250 per license
application (subject to a maximum of three percent of total application
value) for those who need to apply for more than ten licenses per year.
Conversely, there are no registration or application processing fees
for applications to export items listed on the CCL. Once the Category
XIII items that are the subject to this rulemaking are moved from the
USML to the CCL, entities currently applying for licenses from the
Department of State will find their registration fees reduced if the
number of USML licenses those entities need declines. If an entity's
entire product line is moved to the CCL, its ITAR registration and
registration fee requirement will be eliminated.
De minimis treatment under the EAR would also become available for
all items that this rule proposes to transfer from the USML to the CCL.
Items subject to the ITAR remain subject to the ITAR when they are
incorporated abroad into a foreign-made product regardless of the
percentage of U.S. content in that foreign-made product. However,
foreign-made products incorporating items that this rule would move to
the CCL would be subject to the EAR only if their total controlled
U.S.-origin content exceeds 10 percent. Because including small amounts
of U.S.-origin content would not subject foreign-made products to the
EAR, foreign manufacturers would have less incentive to refrain from
purchasing such U.S.-origin parts and components, a development that
potentially would mean greater sales for U.S. suppliers, including
small entities.
For items currently on the CCL that would be moved from existing
ECCNs to the new ``600 series,'' license exception availability would
be narrowed somewhat and the applicable de minimis threshold for
foreign-made products containing those items would in some cases be
reduced from 25 percent to 10 percent. However, BIS believes that any
increased burden imposed by those actions would be offset substantially
by the reduction in burden attributable to moving items from the USML
to CCL and the compliance benefits associated with the consolidation of
all WAML items subject to the EAR in one series of ECCNs. These changes
also would reduce the burden on small entities by resolving actual and
potential jurisdictional uncertainty with respect to items that are
related to articles controlled by USML Category XIII.
Conclusion
BIS is unable to determine the precise number of small entities
that would be affected by this rule. Based on the facts and conclusions
set forth above, BIS believes that any burdens imposed by this rule
would be offset by a reduction in the number of items that would
require a license, increased opportunities for use of license
exceptions for exports to certain countries, simpler export license
applications, reduced or eliminated
[[Page 29572]]
registration fees, and application of a de minimis threshold for
foreign-made items incorporating U.S.-origin parts and components,
which would reduce the incentive for foreign buyers to design out or
avoid U.S.-origin content. For these reasons, the Chief Counsel for
Regulation of the Department of Commerce certified to the Chief Counsel
for Advocacy of the Small Business Administration that this rule, if
adopted in final form, would not have a significant economic impact on
a substantial number of small entities. Accordingly, no IRFA is
required, and none has been prepared.
List of Subjects
15 CFR Part 742
Exports, Terrorism.
15 CFR Part 772
Exports.
15 CFR Part 774
Exports, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, parts 742, 772 and 774 of
the Export Administration Regulations (15 CFR parts 730-774) are
proposed to be amended as follows:
PART 742--[AMENDED]
1. The authority citation for 15 CFR part 742 continues to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22
U.S.C. 7210; Sec 1503, Pub. L. 108-11, 117 Stat. 559; E.O. 12058, 43
FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR,
1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p.
950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222,
66 FR 44025, 3 CFR, 2001 Comp., p. 783; Presidential Determination
2003-23 of May 7, 2003, 68 FR 26459, May 16, 2003; Notice of August
12, 2011, 76 FR 50661 (August 16, 2011); Notice of November 9, 2011,
76 FR 70319 (November 10, 2011).
2. Section 742.6 is amended by revising paragraph (a)(1) to read as
follows:
Sec. 742.6 Regional stability.
(a) * * *
(1) RS Column 1 License Requirements in General. As indicated in
the CCL and in RS column 1 of the Commerce Country Chart (see
Supplement No. 1 to part 738 of the EAR), a license is required to all
destinations, except Canada, for items described on the CCL under ECCNs
0A521; 0A606 (except 0A606.b and .y); 0A617 (except 0A617.y); 0B521;
0B606 (except 0B606.y); 0B617 (except 0B617.y); 0C521; 0C606 (except
0C606.y); 0C617 (except 0C617.y), 0D521; 0D606 (except 0D606.y); 0D617
(except 0D617.y) 0E521; 0E606 (except 0E606.y); 0E617 (except 0E617.y);
1A607 (except 1A607.y); 1B607 (except 1B607.y); 1B608 (except 1B608.y);
1C607; 1C608; 1D607 (except 1D607.y); 1D608 (except 1D608.y); 1E607
(except 1E607.y); 1E608 (except 1E608.y); 6A002.a.1, a.2, a.3, .c, or
.e; 6A003.b.3, and b.4.a; 6A008.j.1; 6A998.b; 6D001 (only ``software''
for the ``development'' or ``production'' of items in 6A002.a.1, a.2,
a.3, .c; 6A003.b.3 and .b.4; or 6A008.j.1); 6D002 (only ``software''
for the ``use'' of items in 6A002.a.1, a.2, a.3, .c; 6A003.b.3 and
.b.4; or 6A008.j.1); 6D003.c; 6D991 (only ``software'' for the
``development,'' ``production,'' or ``use'' of equipment classified
under 6A002.e or 6A998.b); 6E001 (only ``technology'' for
``development'' of items in 6A002.a.1, a.2, a.3 (except 6A002.a.3.d.2.a
and 6A002.a.3.e for lead selenide focal plane arrays), and .c or .e,
6A003.b.3 and b.4, or 6A008.j.1); 6E002 (only ``technology'' for
``production'' of items in 6A002.a.1, a.2, a.3, .c, or .e, 6A003.b.3 or
b.4, or 6A008.j.1); 6E991 (only ``technology'' for the ``development,''
``production,'' or ``use'' of equipment classified under 6A998.b);
6D994; 7A994 (only QRS11-00100-100/101 and QRS11-0050-443/569
Micromachined Angular Rate Sensors); 7D001 (only ``software'' for
``development'' or ``production'' of items in 7A001, 7A002, or 7A003);
7E001 (only ``technology'' for the ``development'' of inertial
navigation systems, inertial equipment, and specially designed
components therefor for civil aircraft); 7E002 (only ``technology'' for
the ``production'' of inertial navigation systems, inertial equipment,
and specially designed components therefor for civil aircraft); 7E101
(only ``technology'' for the ``use'' of inertial navigation systems,
inertial equipment, and specially designed components for civil
aircraft); 8A609 (except 8A609.y); 8B609 (except 8B609.y); 8C609
(except 8C609.y); 8D609 (except software for the ``development,''
``production,'' operation, or maintenance of commodities controlled by
8A609.y, 8B609.y, or 8C609.y); 8E609 (except ``technology'' for the
``development,'' ``production,'' operation, installation, maintenance,
repair, or overhaul of commodities controlled by 8A609.y, 8B609.y, or
8C609.y); 9A610 (except 9A610.y); 9A619 (except 9A619.y); 9B610 (except
9B610.y); 9B619 (except 9B619.y); 9C610 (except 9C610.y); 9C619 (except
9C619.y); 9D610 (except software for the ``development,''
``production,'' operation, installation, maintenance, repair, or
overhaul of commodities controlled by 9A610.y, 9B610.y, or 9C610.y);
9D619 (except software for the ``development,'' ``production,''
operation, or maintenance of commodities controlled by 9A619.y,
9B619.y, or 9C619.y); 9E610 (except ``technology'' for the
``development,'' ``production,'' operation, installation, maintenance,
repair, or overhaul of commodities controlled by ECCN 9A610.y, 9B610.y,
or 9C610.y); and 9E619 (except ``technology'' for the ``development,''
``production'' operation, installation, maintenance, repair, or
overhaul of commodities controlled by ECCN 9A619.y, 9B619.y, or
9C619.y).
* * * * *
PART 772--[AMENDED]
3. The authority citation for 15 CFR part 772 continues to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August
12, 2011, 76 FR 50661 (August 16, 2011).
4. Section 772.1 is amended by adding a definition for ``metal
embrittlement agents'' in alphabetical order to read as follows:
Sec. 772.1 Definitions of terms as used in the Export Administration
Regulations (EAR).
* * * * *
Metal embrittlement agents. (Cat. 0)--Non-lethal weapon substances
that alter the crystal structure of metals within a short time span.
Metal embrittling agents severely weaken metals by chemically changing
their molecular structure. These agents are compounded in various
substances to include adhesives, liquids, aerosols, foams and
lubricants.
* * * * *
PART 774--[AMENDED]
5. The authority citation for 15 CFR part 774 continues to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
10 U.S.C. 7420; 10 U.S.C. 7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et
seq., 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42
U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 13026, 61 FR 58767, 3 CFR,
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783; Notice of August 12, 2011, 76 FR 50661 (August 16, 2011).
6. In Supplement No. 1 to part 774 (the Commerce Control List),
Category 0--Nuclear Materials, Facilities, and Equipment [and
Miscellaneous Items]--Export Control Classification Number (ECCN) 0A018
is amended
[[Page 29573]]
a. By adding a sentence to the end of the Related Controls
paragraph in the List of Items Controlled section; and
b. By removing and reserving paragraph .a in the Items paragraph of
the List of Items Controlled section to read as follows:
Supplement No. 1 to Part 774--The Commerce Control List
* * * * *
0A018 Items on the Wassenaar Munitions List
* * * * *
List of Items Controlled:
Unit: * * *
Related Controls: * * * 3) See ECCN 0A617.a for items formerly
controlled by ECCN 0A018.a.
Related Definitions: * * *
Items:
a. [RESERVED].
* * * * *
7. In Supplement No. 1 to part 774 (the Commerce Control List),
Category 0--Nuclear Materials, Facilities, and Equipment [and
Miscellaneous Items] add a new ECCN 0A617 between ECCNs 0A018 and 0A918
to read as follows:
0A617 Miscellaneous ``Equipment,'' Materials, and Related Commodities
License Requirements
Reason for Control: NS, RS, AT
------------------------------------------------------------------------
Control(s) Country chart
------------------------------------------------------------------------
NS applies to entire entry except 0A617.y.... NS Column 1.
RS applies to entire entry except 0A617.y.... RS Column 1.
AT applies to entire entry................... AT Column 1.
------------------------------------------------------------------------
License Exceptions
LVS: $1500
GBS: N/A
CIV: N/A
STA:
(1) Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2))
of the EAR may not be used for any item in 0A617.
(2) Paragraph (c)(1) of License Exception STA (Sec. 740.20(c)(1))
may be used for items in 0A617 without the need for a determination
described in Sec. 740.20(g).
List of Items Controlled
Unit: End items in number; parts, components, accessories and
attachments in $ value.
Related Controls: (1) Defense articles, such as materials made from
classified information, that are controlled by USML Category XIII, and
technical data (including software) directly related thereto, are
subject to the ITAR. (2) See ECCN 0A919 for foreign-made ``military
commodities'' that incorporate more than 10% U.S.-origin ``600 series''
items. (3) For controls on self-contained diving and underwater
swimming apparatus and related commodities, see ECCN 8A620.f. (4) For
controls on robots, robot controllers, and robot end-effectors, see
USML Category VII and ECCNs 0A606 and 2B007. (5) ``Libraries,'' i.e.,
parametric technical databases, ``specially designed'' for military use
with equipment controlled by USML or a ``600 series'' ECCN are
controlled by the technical data and technology controls pertaining to
such items. (6) For controls on nuclear power generating equipment or
propulsion equipment, including ``nuclear reactors,'' ``specially
designed'' for military use, and parts and components ``specially
designed'' therefor, see USML Categories VI, XIII, XV, and XX. (7)
Simulators ``specially designed'' for military ``nuclear reactors'' are
controlled by USML Category IX(b). (8) Laser protection equipment
(e.g., eye and sensor protection) ``specially designed'' for military
use are subject to the controls of USML Category X(a)(7). (9) ``Fuel
cells'' ``specially designed'' for a defense article not on the USML or
a commodity controlled by a ``600 series'' ECCN are controlled
according to the corresponding ``600 series'' ECCN for such end items.
(10) See USML Category XV and ECCN 9A515 for controls on fuel cells
specially designed for satellite or spacecraft.
Items:
a. Construction equipment ``specially designed'' for military use,
including such equipment ``specially designed'' for transport in
aircraft controlled by USML VIII(a) or ECCN 9A610.a; and ``parts,''
``components'' and ``accessories and attachments'' ``specially
designed'' therefor, including crew protection kits used as protective
cabs;
b. Concealment and deception equipment ``specially designed'' for
military application, including special paints, decoys, smoke or
obscuration equipment and simulators, and ``parts,'' ``components,''
``accessories and attachments'' ``specially designed'' therefor, not
controlled by USML Category XIII.
c. Ferries, bridges (other than those described in ECCN 0A606 or
USML Category VII), and pontoons ``specially designed'' for military
use.
d. Test models ``specially designed'' for the ``development'' of
defense articles controlled by the USML or commodities controlled by a
``600 series'' ECCN.
e. Photointerpretation, stereoscopic plotting and photogrammetry
equipment ``specially designed'' for military use, and ``parts,''
``components,'' ``accessories and attachments'' ``specially designed''
therefor.
f. ``Metal embrittlement agents.''
g. Through x. [RESERVED]
y. Other commodities as follows:
y.1. Containers ``specially designed'' for defense articles or
items controlled by a ``600 series'' ECCN.
y.2 Field generators ``specially designed'' for military use.
y.3 Power controlled searchlights and control units therefor,
``specially designed'' for military use, and ``equipment'' mounting
such units; and ``parts,'' ``components'' and ``accessories and
attachments'' ``specially designed'' therefor.
y.4 to y.98. [RESERVED]
y.99. Commodities not identified on the CCL that (i) have been
determined, in an applicable commodity jurisdiction determination
issued by the U.S. Department of State, to be subject to the EAR and
(ii) would otherwise be controlled elsewhere in ECCN 0A617.
8. In Supplement No. 1 to part 774 (the Commerce Control List),
Category 0--Nuclear Materials, Facilities, and Equipment [and
Miscellaneous Items], Export Control Classification Number (ECCN) 0A918
is amended
a. By revising the License Exception section; and
b. By revising the List of Items Controlled section to read as
follows:
0A918 Miscellaneous Military Equipment Not on the Wassenaar Munitions
List
* * * * *
License Exceptions
LVS: $1,500, $0 for Rwanda
GBS: N/A
CIV: N/A
List of Items Controlled
Unit: In Number.
[[Page 29574]]
Related Controls: See ECCN 0A617.y.3 for items formerly controlled
by ECCN 0A918.a.
Related Definitions: N/A
Items: Bayonets.
9. In Supplement No. 1 to part 774 (the Commerce Control List),
Category 0--Nuclear Materials, Facilities, and Equipment [and
Miscellaneous Items], add a new ECCN 0B617 between ECCNs 0B006 and
0B986 to read as follows:
0B617 Test, Inspection, and Production ``Equipment'' and Related
Commodities ``Specially Designed'' for the ``Development'' or
``Production'' of Commodities Controlled by ECCN 0A617.a or USML
Category XIII
License Requirements
Reason for Control: NS, RS, AT
------------------------------------------------------------------------
Control(s) Country chart
------------------------------------------------------------------------
NS applies to entire entry except 0B617.y.... NS Column 1.
RS applies to entire entry except 0B617.y.... RS Column 1.
AT applies to entire entry................... AT Column 1.
------------------------------------------------------------------------
License Exceptions
LVS: $1500
GBS: N/A
CIV: N/A
STA:
(1) Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2))
of the EAR may not be used for any item in 0B617.
(2) Paragraph (c)(1) of License Exception STA (Sec. 740.20(c)(1))
may be used for items in 0B617 without the need for a determination
described in Sec. 740.20(g).
List of Items Controlled
Unit: N/A
Related Controls:
Related Definitions: N/A
Items: a. Test, inspection, and production ``equipment'' not
controlled by USML Category XIII(k) ``specially designed'' for the
``production'' or ``development'' of commodities controlled by ECCN
0A617 or USML Category XIII.
b. through .x [RESERVED].
y.1 through .y.98 [RESERVED]
y.99 Commodities not identified on the CCL that (i) have been
determined, in an applicable commodity jurisdiction determination
issued by the U.S. Department of State, to be subject to the EAR and
(ii) would otherwise be controlled elsewhere in ECCN 0B617.
NOTE TO 0B617: Field engineer equipment ``specially designed'' for
use in a combat zone, identified in WAML Category 17.d, and mobile
repair shops ``specially designed'' or modified to service military
equipment, identified in WAML Category 17.j, are controlled by 0B617 to
the extent that the items are not included in USML Category XIII(k).
10. In Supplement No. 1 to part 774 (the Commerce Control List),
Category 0--Nuclear Materials, Facilities, and Equipment [and
Miscellaneous Items], add a new ECCN 0C617 after ECCN 0C201 to read as
follows:
0C617 Miscellaneous Materials ``Specially Designed'' for Military Use
License Requirements
Reason for Control: NS, RS, AT
------------------------------------------------------------------------
Control(s) Country chart
------------------------------------------------------------------------
NS applies to entire entry except 0C617.y.... NS Column 1.
RS applies to entire entry except 0C617.y.... RS Column 1.
AT applies to entire entry................... AT Column 1.
------------------------------------------------------------------------
License Exceptions
LVS: $1500
GBS: N/A
CIV: N/A
(1) STA: Paragraph (c)(2) of License Exception STA (Sec.
740.20(c)(2)) of the EAR may not be used for any item in 0C617.
(2) Paragraph (c)(1) of License Exception STA (Sec. 740.20(c)(1))
may be used for items in 0C617 without the need for a determination
described in Sec. 740.20(g).
List of Items Controlled
Unit: End items in number; parts, component, accessories and
attachments in $ value.
Related Controls: For controls on other signature suppression
materials, see USML Category XIII and ECCNs 1C001 and 1C101.
Related Definitions:
Items:
a. Materials, coatings and treatments for signature suppression,
``specially designed'' for military use and that are not controlled by
USML Category XIII or ECCNs 1C001 or 1C101.
b. through x. [RESERVED].
y.1 through y.98 [RESERVED].
y.99. Materials not identified on the CCL that (i) have been
determined, in an applicable commodity jurisdiction determination
issued by the U.S. Department of State, to be subject to the EAR and
(ii) would otherwise be controlled elsewhere in ECCN 0C617.
11. In Supplement No. 1 to part 774 (the Commerce Control List),
Category 0--Nuclear Materials, Facilities, and Equipment [and
Miscellaneous Items], add a new ECCN 0D617 between ECCNs 0D001 and
0D999 to read as follows:
0D617 ``Software'' ``Specially Designed'' for the ``Development,''
``Production,'' Operation, Installation, Maintenance, Repair, Overhaul
or Refurbishing of Commodities Controlled by 0A617, ``Equipment''
Controlled by 0B617, or Materials Controlled by 0C617
License Requirements
Reason for Control: NS, RS, AT
------------------------------------------------------------------------
Control(s) Country chart
------------------------------------------------------------------------
NS applies to entire entry except 0D617.y.... NS Column 1.
RS applies to entire entry except 0D617.y.... RS Column 1.
AT applies to entire entry................... AT Column 1.
------------------------------------------------------------------------
[[Page 29575]]
License Exceptions
CIV: N/A
TSR: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec.
740.20(c)(2))of the EAR may not be used for any ``software'' in 0D617.
List of Items Controlled
Unit: $ value
Related Controls: ``Software'' directly related to articles
controlled by USML Category XIII is subject to the control of USML
paragraph XIII(l).
Related Definitions: N/A
Items:
a. ``Software'' (other than ``software'' controlled in paragraph .y
of this entry) ``specially designed'' for the ``development,''
``production,'' operation or maintenance of commodities controlled by
ECCNs 0A617 (except 0A617.y), 0B617 (except 0B617.y), or 0C617 (except
0C617.y).
b. to x. [RESERVED].
y. Specific ``software'' ``specially designed'' for the
``production,'' ``development,'' or operation or maintenance of
commodities controlled by ECCN 0A617, 0B617 or 0C617, as follows:
y.1. Specific ``software'' ``specially designed'' for the
``production,'' ``development,'' operation or maintenance of
commodities controlled by ECCN 0A617.y, 0B617.y or 0C617.y.
y.2 through y.98 [RESERVED].
y.99. Software not identified on the CCL that (i) has been
determined, in an applicable commodity jurisdiction determination
issued by the U.S. Department of State, to be subject to the EAR and
(ii) would otherwise be controlled elsewhere in ECCN 0D617.
12. In Supplement No. 1 to part 774 (the Commerce Control List),
Category 0--Nuclear Materials, Facilities, and Equipment [and
Miscellaneous Items]--ECCN 0E018 is amended by adding a note at the end
of the entry to read as follows:
0E018 ``Technology'' for the ``Development,'' ``Production,'' or
``Use'' of Items Controlled by 0A018
* * * * *
Note: This ECCN no longer controls ``technology'' for items
formerly controlled by 0A018.a. See ECCN 0A617.a for items formerly
controlled by 0A018.a and see the ``technology'' controls for those
items in ECCN 0E617.a.
13. In Supplement No. 1 to part 774 (the Commerce Control List),
Category 0--Nuclear Materials, Facilities, and Equipment [and
Miscellaneous Items] add a new ECCN 0E617 between ECCNs 0E018 and 0E982
to read as follows:
0E617 ``Technology'' ``Required'' for the ``Development,''
``Production,'' Operation, Installation, Maintenance, Repair, Overhaul
or Refurbishing of Commodities Controlled by 0A617, ``Equipment''
Controlled by 0B617, Materials Controlled by 0C617, or ``Software''
Controlled by 0D617
License Requirements
Reason for Control: NS, RS, AT
------------------------------------------------------------------------
Control(s) Country chart
------------------------------------------------------------------------
NS applies to entire entry except 0E617.y.... NS Column 1.
RS applies to entire entry except 0E617.y.... RS Column 1.
AT applies to entire entry................... AT Column 1.
------------------------------------------------------------------------
License Exceptions
CIV: N/A
TSR: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2))
of the EAR may not be used for any technology in 0E617.
List of Items Controlled
Unit: $ value
Related Controls: Technical data directly related to articles
controlled by USML Category XIII are subject to the control of USML
paragraph XIII(l).
Related Definitions: N/A
Items:
a. ``Technology'' (other than ``technology'' controlled by
paragraph .y of this entry) ``required'' for the ``development,''
``production,'' operation, installation, maintenance, repair, overhaul,
or refurbishing of commodities or ``software'' controlled by ECCN 0A617
(except 0A617.y), 0B617 (except 0B617.y), 0C617 (except 0C617.y), or
0D617 (except 0D617.y).
b. through x. [RESERVED].
y. Specific ``technology'' ``required'' for the ``production,''
``development,'' operation, installation, maintenance, repair, or
overhaul of items controlled by ECCN 0A617, 0B617, 0C617 or 0D617, as
follows:
y.1. Specific ``technology'' ``required'' for the ``production,''
``development,'' operation, installation, maintenance, repair or
overhaul of items controlled by ECCN 0A617.y, 0B617.y, 0C617.y or
0D617.y.
y.2. through y.98 [RESERVED].
y.99. ``Technology'' not identified on the CCL that (i) has been
determined, in an applicable commodity jurisdiction determination
issued by the U.S. Department of State, to be subject to the EAR and
(ii) would otherwise be controlled elsewhere in ECCN 0E617.
Dated: May 14, 2012.
Kevin J. Wolf,
Assistant Secretary of Commerce for Export Administration.
[FR Doc. 2012-12124 Filed 5-17-12; 8:45 am]
BILLING CODE 3510-33-P