Export Administration Regulations: Removal of Special Comprehensive License Provisions, 51725-51730 [2015-20980]
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Federal Register / Vol. 80, No. 165 / Wednesday, August 26, 2015 / Rules and Regulations
The Special Conditions
Accordingly, pursuant to the authority
delegated to me by the Administrator,
the following special conditions are
issued as part of the type certification
basis for Bombardier BD–100–1A10
airplane modified by S4A, Solutions for
Aviation, S.L.
In lieu of the requirements of Title 14,
Code of Federal Regulations (14 CFR)
25.1353(c)(1) through (c)(4) at
Amendment 25–101 for rechargeable
lithium batteries and battery systems, all
installations must be designed and
installed as follows:
1. Safe cell temperatures and
pressures must be maintained during
any foreseeable charging or discharging
condition and during any failure of the
charging or battery monitoring system
not shown to be extremely remote. The
rechargeable lithium battery installation
must preclude explosion in the event of
those failures.
2. Design of the rechargeable lithium
batteries must preclude the occurrence
of self-sustaining, uncontrolled
increases in temperature or pressure.
3. No explosive or toxic gases emitted
by any rechargeable lithium battery in
normal operation, or as the result of any
failure of the battery charging system,
monitoring system, or battery
installation which is not shown to be
extremely remote, may accumulate in
hazardous quantities within the
airplane.
4. Installations of rechargeable
lithium batteries must meet the
requirements of § 25.863(a) through (d).
5. No corrosive fluids or gases that
may escape from any rechargeable
lithium battery may damage
surrounding structure or any adjacent
systems, equipment, or electrical wiring
of the airplane in such a way as to cause
a major or more severe failure condition,
in accordance with § 25.1309(b) and
applicable regulatory guidance.
6. Each rechargeable lithium battery
installation must have provisions to
prevent any hazardous effect on
structure or essential systems caused by
the maximum amount of heat the
battery can generate during a short
circuit of the battery or of its individual
cells.
7. Lithium battery installations must
have a system to control the charging
rate of the battery automatically, so as
to prevent battery overheating or
overcharging, and,
a. A battery temperature sensing and
over-temperature warning system with a
means for automatically disconnecting
the battery from its charging source in
the event of an over-temperature
condition, or,
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b. A battery failure sensing and
warning system with a means for
automatically disconnecting the battery
from its charging source in the event of
battery failure.
8. Any rechargeable lithium battery
installation, the function of which is
required for safe operation of the
airplane, must incorporate a monitoring
and warning feature that will provide an
indication to the appropriate flight
crewmembers whenever the state-ofcharge of the batteries has fallen below
levels considered acceptable for
dispatch of the airplane.
9. The instructions for continued
airworthiness required by § 25.1529
must contain maintenance requirements
to assure that the battery is sufficiently
charged at appropriate intervals
specified by the battery manufacturer
and the equipment manufacturer that
contain the rechargeable lithium battery
or rechargeable lithium battery system.
This is required to ensure that lithium
rechargeable batteries and lithium
rechargeable battery systems will not
degrade below specified ampere-hour
levels sufficient to power the aircraft
system, for intended applications. The
instructions for continued airworthiness
must also contain procedures for the
maintenance of batteries in spares
storage to prevent the replacement of
batteries with batteries that have
experienced degraded charge retention
ability or other damage due to
prolonged storage at a low state of
charge. Replacement batteries must be
of the same manufacturer and part
number as approved by the FAA.
Precautions should be included in the
instructions for continued airworthiness
maintenance instructions to prevent
mishandling of the rechargeable lithium
battery and rechargeable lithium battery
systems which could result in shortcircuit or other unintentional impact
damage caused by dropping or other
destructive means that could result in
personal injury or property damage.
Note 1: The term ‘‘sufficiently charged’’
means that the battery will retain enough of
a charge, expressed in ampere-hours, to
ensure that the battery cells will not be
damaged. A battery cell may be damaged by
lowering the charge below a point where
there is a reduction in the ability to charge
and retain a full charge. This reduction
would be greater than the reduction that may
result from normal operational degradation.
Note 2: These special conditions are not
intended to replace § 25.1353(c) at
Amendment 25–101 in the certification basis
of the BD–100–1A10 airplane. These special
conditions apply only to rechargeable
lithium batteries and lithium battery systems
and their installations. The requirements of
§ 25.1353(c) at Amendment 25–101 remain in
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51725
effect for batteries and battery installations
on the BD–100–1A10 airplane that do not use
lithium batteries.
Issued in Renton, Washington, on August
7, 2015.
Michael Kaszycki,
Acting Manager, Transport Airplane
Directorate, Aircraft Certification Service.
[FR Doc. 2015–21118 Filed 8–25–15; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 730, 732, 738, 743, 748,
752, 762, 772, and 774
[Docket No. 140613501–5698–02]
RIN 0694–AG13
Export Administration Regulations:
Removal of Special Comprehensive
License Provisions
Bureau of Industry and
Security, Commerce.
ACTION: Final rule.
AGENCY:
In this final rule, the Bureau
of Industry and Security (BIS) amends
the Export Administration Regulations
(EAR) by removing the Special
Comprehensive License (SCL)
authorization. Based on changes to the
EAR as part of Export Control Reform,
BIS concludes that the SCL has outlived
its usefulness to the exporting public
since recent changes to the EAR permit
exporters to accomplish similar results
using individual licenses and without
undertaking the more onerous SCL
application. This rule also makes
conforming amendments. These changes
are part of BIS’s efforts to further update
export controls under the EAR
consistent with the Retrospective
Regulatory Review Initiative that directs
BIS and other federal agencies to
streamline regulations and reduce
unnecessary regulatory burdens on the
public.
DATES: This is effective September 25,
2015.
FOR FURTHER INFORMATION CONTACT:
Thomas Andrukonis, Director, Export
Management and Compliance Division,
Office of Exporter Services, Bureau of
Industry and Security, by telephone at
(202) 482–6396 or by email at
Thomas.Andrukonis@bis.doc.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
BIS issues this final rule to remove
the Special Comprehensive License
(SCL) provisions from the Export
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Administration Regulations (EAR),
consistent with the Retrospective
Regulatory Review Initiative and Export
Control Reform. In the preamble to a
rule published in the Federal Register
on September 30, 2014 (79 FR 58704)
(hereinafter ‘‘the September 30
proposed rule’’ or ‘‘the September 30
rule’’), BIS reviewed the origins and
historical nature of the SCL, and
described the specific sections of the
EAR that BIS proposed to amend. Based
on changes to the EAR as part of Export
Control Reform, BIS concluded that the
SCL has outlived its usefulness to the
exporting public since recent changes to
the EAR permit exporters to accomplish
similar results using individual licenses
and without undertaking the more
onerous SCL application.
This rule finalizes the revisions to the
EAR as described in the September 30
proposed rule except for a modification
discussed in the Transition Guidance
section of the preamble. In that
guidance, BIS proposed that all SCLs
would expire one year from the date of
publication of a final rule that removes
SCL provisions from the EAR or on the
expiration date of the SCL under the
particular terms of the license,
whichever would come earlier. As a
practical matter to facilitate
administrative ease for SCL holders who
already have begun to transition to
licenses other than the SCL and for SCL
holders who have yet to begin that
transition for their transactions under
the EAR, BIS provides instead in this
final rule that all SCLs still in effect at
this publication will expire one year
from the effective date of this rule,
which will be September 26, 2016.
Further, during this transition period,
BIS will not accept new SCL
applications or amendments, including
renewals, to outstanding SCLs. As stated
in the proposed rule, with the
publication of this final rule, SCL
holders may choose to apply for fouryear individual licenses for exporting
and reexporting items under the EAR or
use available license exceptions.
Finally, as stated in the proposed rule,
as with all transactions subject to the
EAR, the applicable recordkeeping
requirements under 15 CFR part 762
will continue to apply to SCL
transactions until the applicable
retention periods are fulfilled.
Public Comments on the September 30
Proposed Rule To Remove the SCL and
BIS Responses
BIS received three comments from
three SCL holders who are private
companies in the fields of geophysical
and seismic technology on the
September 30 proposed rule. A
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summary of the comments and BIS
responses are below. Where possible,
similar comments on the proposed rule
have been consolidated.
Advantages of the SCL Compared to
Individual Licenses
Comment 1: One commenter
acknowledged that while the current
individual validated license, (individual
license) offers advantages previously
only available with the SCL, the SCL
offers additional advantages that to a
great extent do not exist with an
individual license. The commenter
explained that the SCL allows the
company, given the company’s volume
of business, to operate effectively with
minimal interruptions and to ensure
compliance for the following reasons:
The SCL is a single license requiring a
single license application, which is
easier to track than a large number of
individual licenses with varying
expiration dates; and the SCL has a fouryear validity period, while individual
licenses may be, but are not
automatically, granted for up to four
years, making planning for mediumand long-term operations onerous. The
commenter also noted that unlike
individual licenses for which
amendments require a replacement
license, the SCL item or end user may
be amended without submitting an
entirely new license application.
Response 1: BIS acknowledges, as a
practical matter, that there is a
likelihood exporters might need more
than one individual license or need to
replace an existing license more than
once within a four-year validity period
to complete transactions under the EAR.
However, BIS licensing information
indicates that SCL holders also have
needed to amend their SCLs a number
of times within the SCL four-year
validity period. It also indicates that the
initial SCL application and review
process historically required that
applicants submit more documents and
wait for decisions on those applications
for a longer period than that for an
individual license. Currently, applying
for an amendment to either a SCL or a
replacement for an individual license
requires that exporters submit in a less
cumbersome manner such information
electronically through SNAP–R.
Further, not all changes to individual
licenses require that they be replaced.
As detailed in Section 750.7 of the EAR,
non-material changes to a license may
be made without the issuance of a
replacement license. In addition, the
four-year validity period for an
individual license is not as tentative or
unpredictable as the commenter
suggests, given the updated provisions
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in Section 750.7(g) of the EAR. Finally,
with regard to the ease of tracking SCLs
versus individual licenses, exporters are
responsible for keeping track of all
authorizations allowed or granted to the
exporter under the EAR. While BIS
continually seeks to decrease any
unreasonable burden exporters may
have in complying with the EAR, BIS
suggests that exporters develop a degree
of familiarity or predictability regarding
their business practices that allows
them to review and predict what
resources and activities will be needed
to complete their regulatory obligations
for export and reexport.
Comment 2: A commenter stated that
an advantage of the SCL is that it
contains a single set of conditions while
the conditions for individual license
vary. The commenter further stated that
the varying conditions on individual
licenses make compliance difficult if
not impossible. However, another
commenter stated that SCL conditions
and individual license conditions for
the commenter’s individual licenses are
the same, as agreed to by BIS and the
State Department’s Directorate of
Defense Trade Controls (DDTC).
Response 2: BIS agrees with the
second commenter on this issue.
Conditions attached to a particular
license, whether on an individual
license or SCL, remain the same for the
duration of the validity period. Should
an exporter submit a replacement
license, the related changes could
reasonably impact the nature and scope
of the conditions on that license. Even
if there are variations between
conditions on different individual
licenses, these variations may be
justified in light of the different fact sets
for each license application.
Comment 3: A commenter stated that
the SCL is more flexible and better fits
a company that needs quick turnaround
to compete in the international
marketplace, such as the market for
subsea remotely operated vehicles
(ROVs) to support oil and gas
exploration. The commenter added, as
an example of flexibility, that the
United Kingdom offers two week
processing on flexible individual
licenses, which impose significantly
less restrictive conditions as compared
to the individual licenses issued by the
United States. The commenter further
stated that the SCL is critical to enabling
the company to compete effectively
with foreign competitors while
continuing to manufacture controlled
ROVs in the United States. Without the
SCL, according to the commenter, the
commenter’s competitiveness with
foreign ROV manufacturers, who
function under less restrictive export
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control regimes and with the benefit of
flexible licensing, would be negatively
impacted.
Response 3: BIS notes that the current
features of the EAR’s SCL can be
replicated in an individual license.
More importantly, as noted in Response
to Comment 1, the review period for an
individual license is less cumbersome
and time consuming than for a SCL
application, barring any missing
information or significant interagency
concerns about the proposed
transaction. Finally, the SCL holders are
companies with well-established license
history under the EAR. These
companies have conducted business in
their industries long enough to
reasonably forecast licensing needs,
including needs for authorizations for
potential additional export or reexport
opportunities, and submit requests to
BIS accordingly. Thus, the individual
licensing process described by the
commenter should not negatively
impact the commenter’s export and
reexport interests under the EAR.
Comment 4: A commenter stated that
the SCL advances U.S. national security
and foreign policy interests. The
commenter further stated that it was not
surprising that the September 30
proposed rule did not suggest that
eliminating the SCL furthers U.S.
national security or foreign policy
interests because the existence of the
SCL provides an impetus for companies
to develop and implement
comprehensive Internal Control
Programs (ICPs), which are subject to
audits by BIS. The commenter also
stated that the commenter’s compliance
with the EAR is reinforced due to the
stringent requirements for obtaining and
relying on a SCL.
Response 4: BIS finds merit in the
commenter’s point that the SCL has
contributed to advancing U.S. national
security and foreign policy interests and
provided an impetus for companies to
invest in comprehensive ICPs. Further,
the commenter’s point gives BIS an
opportunity to note that the elements of
a SCL ICP are strong, practical factors
that will contribute to the success of
transactions using individual licenses
authorized under the EAR. These factors
reflect that SCL holders are
sophisticated businesses that manage
well their export licensing obligations,
as noted in the Response to Comment 1.
Comment 5: One commenter stated
that SCL administrative and compliance
benefits greatly outweigh the SCL
administrative burden, unlike
individual licenses. The commenter
added that individual licenses are
tedious, time consuming and
repetitious, and hamper companies’
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abilities to respond to short-term bid
opportunities.
Response 5: As mentioned in the
Response to Comment 3, barring an
insufficient individual license
application or significant concerns
raised during interagency review,
objectively the individual license
application process is less cumbersome
and time consuming than the SCL
application process. BIS appreciates that
the commenter does not mind the
administrative burden associated with
the SCL. However, the point of Export
Control Reform and the President’s
Retrospective Regulatory Review is for
agencies to adopt regulatory changes
that will remove redundancies and offer
more streamlined and practical
requirements and processes benefiting
the greatest number of constituents
while facilitating the agencies’ missions.
An individual license should be able to
accommodate in a timely manner the
commenter’s efforts to pursue shortterm bid opportunities, especially given
the company’s established licensing
history under the EAR. Lastly, whether
changes in transactions require
companies to submit an application to
amend a SCL or to replace an individual
license (in case the change does not
qualify as a non-material change), the
thoroughness and accuracy of the
application and the complexity of the
basis for and type of change requested
will impact how quickly BIS can
process a license application, whether a
SCL amendment or replacement license.
Alternative Authorizations Under the
EAR (i.e., License Exceptions, Validated
End User (VEU) Authorization, etc.)
Comment 6: One commenter stated
that none of the changes to the EAR
described in the preamble of the
September 30 proposed rule would
make up for that commenter’s loss of the
SCL. In particular, the commenter stated
that the existing license exceptions do
not offer a viable alternative for the
commenter’s operations because the
majority of the commenter’s
commodities fall under Export Control
Classification Number (ECCN)
6A001.a.2 and the only license
exception allowed would be License
Exception Temporary imports, exports,
reexports, and transfers (in-country)
(TMP), which does not meet the
commenter’s business needs . A second
commenter also stated that restrictions
on available license exceptions
significantly limit the benefit of the
exceptions. For example, License
Exceptions, such as Shipments to
Country Group B countries (GBS), cover
only a fraction of controlled spare parts
for ROVs; and License Exception
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Servicing and replacement of parts and
equipment (RPL) only authorizes a onefor-one replacement of parts. The
second commenter also stated that
License Exception Strategic Trade
Authorization (STA) does not solve the
commenter’s authorization needs
because the countries in which the
commenter’s ROVs are currently used
are not in Country Group A:5 and ROVs
under ECCN 8A001 are not eligible for
export to STA Country Group A:6.
Lastly, the commenter stated that TMP
does not solve the commenter’s needs
because installation and use of ROVs
abroad may go on for years and applying
for individual licenses to keep the ROVs
abroad is a cumbersome process.
Response 6: BIS understands that the
scenario described by the commenter
relative to potential assistance provided
by license exceptions will not apply to
every situation or exporter, but will
assist some exporters in certain
situations.
Comment 7: A commenter stated that
the VEU Authorization would not be a
viable alternative to the SCL because of
the limited number of countries
approved under the authorization.
Response 7: BIS acknowledges that
currently there are few approved
validated end users and countries.
However, the use of VEU Authorization
for the existing approved end users and
the respective approved countries and
items provides easier and accountable
access for U.S. companies and other
companies. Therefore, the authorization
remains an option, which may be
helpful for some exporters or
reexporters, including SCL holders.
Improvements in Individual Licenses
Comment 8: One commenter stated
that the process or procedures for
obtaining individual licenses under the
EAR has not grown noticeably simpler
or more expeditious than when the
commenter received its SCL. The
commenter further stated that SNAP–R
is not new to the commenter, and that
application processing times also have
not grown appreciably shorter, noting
that BIS reported that the average
processing time to review a license
application was 29 days in FY 2010 and
26 days in FY 2013.
Response 8: The system for
submitting and processing license
applications has substantially improved
over the decades. Although the
improvements that BIS has
implemented do not perfectly
accommodate every licensable EAR
transaction, they have resulted in a
more streamlined and comparably
versatile licensing process when
compared to the protracted initial SCL
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application. BIS reminds exporters that
the updates for individual license
applications include four-year, or
longer—per Section 750.7(g)—validity
period, and allowing the listing of a
greater number of end-users, among
other enhancements. Lastly, the
September 30 proposed rule described
developments and improvements under
the EAR that directly respond to the
President’s Retrospective Regulatory
Review Initiative.
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Projected Impact of Removal of the SCL
Comment 9: Raising a point similar to
that in Comment 1, a commenter stated
that the removal of the SCL will
increase the number of individual
licenses that must be managed, and that
unlike the SCL, exporters will be unable
to amend export and reexport licenses.
The commenter noted that the
commenter amends its SCL twice a year.
The commenter further stated that an
increase in individual licenses will
require additional internal resources,
and increased chances of freight
forwarder errors.
Response 9: BIS acknowledges, as a
practical matter, there is a likelihood
exporters might need more than one
individual license or need to replace an
existing license more than once within
a four-year validity period to complete
transactions under the EAR. However,
BIS licensing information indicates that
SCL holders typically have applied for
additional licenses under the EAR to
fully accommodate the SCL
holders’export and reexport needs
under the EAR. Please see Response to
Comment 1. Regarding the commenter’s
assertion that exporters will be unable
to amend export and reexport licenses,
BIS expects that changes to individual
licenses will be handled in a similar
fashion as amendments to SCL
amendments.
Other
Comment 10: A commenter suggested
that to offset the removal of the SCL, BIS
should entertain the possibility of
issuing export and reexport licenses to
include all countries except those
sanctioned or embargoed. The
commenter believed that this approach
would help mitigate the risk of losing
new business opportunities.
Response 10: BIS will consider the
commenter’s recommendation
consistent with pertinent authorities
and U.S. and allied policy objectives.
Comment 11: A commenter asserted
that the two 2012 comments from
industry cited in the September 30
proposed rule that expressed
reservations about the benefits of the
SCL do not extend to other U.S.
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companies, including the commenter’s
company. The commenter went on to
say that other companies should
determine if the benefits of a SCL do not
outweigh the burdens on an individual
basis.
Response 11: BIS did not intend to
imply that the SCL has not provided
significant benefits to other U.S.
companies. BIS included the comments
in question in the September 30
proposed rule because their nature and
quality were relevant to the priorities of
the President’s Retrospective Regulatory
Initiative. In keeping with that
Initiative, BIS published the September
30 proposed rule to determine if there
were better ways to serve the broad
spectrum of constituents under the
jurisdiction of the EAR. That said, as
already indicated, BIS believes all
current features of the SCL can be
replicated in an individual license, and
thus the usefulness and effectiveness of
export authorizations under the EAR
should not be impacted negatively by
removal of the SCL.
Description of Changes From the
Proposed Rule
This rule publishes in final form the
proposed amendments to the SCL as
described initially in the September 30
rule, except for one change to the
proposed expiration date of the SCL and
two proposed amendments that were
overtaken by a recent rulemaking.
Change to Expiration Date of the SCL
In the proposed rule, BIS proposed
that all SCLs would expire one year
from the date of publication of a final
rule or the expiration date of the SCL
under the particular terms of the
license, whichever would come earlier.
BIS provides instead in this final rule
that all SCLs still in effect at this
publication will expire one year from
the effective date of this rule, which will
be September 26, 2016.
The Intervening Changes
In the September 30 rule, BIS
proposed to remove a reference to an
exception to required filing of support
documents for a SCL by removing and
reserving paragraph (a)(6) of Section
748.9 (formerly Support documents for
license applications). A final rule,
Revisions to Support Document
Requirements for License Applications
under the Export Administration
Regulations, published in the Federal
Register March 13, 2015 (80 FR 13210)
(hereinafter ‘‘the March 13 final rule’’),
revised Section 748.9 (currently Support
documents for evaluation of foreign
parties in license applications) and in
doing so moved the reference to the SCL
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support documents exception to
paragraph (c)(1)(vi) of the section. In
this final rule, BIS removes and reserves
paragraph (c)(1)(vi) of Section 748.9,
which updates the amendment to
Section 748.9(a)(6) proposed in the
September 30 rule.
In addition, BIS proposed to remove
the reference to the SCL in existing
paragraph (a)(1)(iii) of Section 748.12
(formerly Special provisions for support
documents). This paragraph provided
that exporters had a grace period of 45
days to comply with support documents
requirements for a license application if
an item had been removed from SCL
eligibility. The March 13 final rule
revised that provision by removing
references to the SCL in the provision
and moving the remainder of the
provision to Section 748.9(h) of the
EAR. The revision in the March 13 final
rule eliminates the need to retain the
amendment to Section 748.12 (currently
Firearms Convention (FC) Import
Certificate) (a)(1)(iii) proposed in the
September 30 rule. That update will be
reflected in the regulatory text of this
final rule.
Export Administration Act
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 amended by
Executive Order 13637 of March 8,
2013, 78 FR 16129 (March 13, 2013) and
as extended by the Notice of August 7,
2015, 80 FR 48233 (August 11, 2015),
has continued the Export
Administration Regulations in effect
under the International Emergency
Economic Powers Act. BIS continues to
carry out the provisions of the Export
Administration Act, as appropriate and
to the extent permitted by law, pursuant
to Executive Order 13222 as amended
by Executive Order 13637.
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, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits,
reducing costs, harmonizing rules, and
promoting flexibility. This rule has been
determined to be a not significant
regulatory action for purposes of
Executive Order 12866.
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2. This rule amends collections
previously approved by the Office of
Management and Budget (OMB) under
Control Numbers 0694–0088,
‘‘Simplified Network Application
Processing + System (SNAP+) and the
Multi-Purpose Application,’’ which
carries a burden hour estimate of 43.8
minutes to prepare and submit form
BIS–748; 0694–0089, ‘‘Special
Comprehensive License,’’ which carries
a burden hour estimate of 40 hours to
complete an application, 30 minutes to
complete annual extension requests, 4
hours to complete amendments, and six
hours to perform recordkeeping and
internal control program annual
certifications; and 0694–0152,
‘‘Automated Export System (AES)
Program,’’ which carries a burden hour
estimate of three minutes or 0.05 hours
per electronic submission.
The total burden hours associated
with the Paperwork Reduction Act of
1995 (44 U.S.C. 3501 et seq.) (PRA) and
the aforementioned OMB Control
Numbers would be expected to decrease
as a result of this removal of part 752
of the EAR and related provisions in
this rule issued in final form, thereby
reducing burden hours associated with
approved collections related to the EAR.
Notwithstanding any other provision
of the law, no person is required to
respond to, nor shall any person be
subject to a penalty for failure to comply
with, a collection of information subject
to the requirements of the PRA, unless
that collection of information displays a
currently valid OMB Control Number.
3. This rule does not contain policies
with Federalism implications as that
term is defined under Executive Order
13132.
4. The Chief Counsel for Regulation at
the Department of Commerce certified
to the Chief Counsel for Advocacy at the
Small Business Administration that this
rule, if adopted, would not have a
significant economic impact on a
substantial number of small entities.
The factual basis was published in the
proposed rule and is not repeated here.
BIS received no comments that
addressed the economic impact of this
rule on small entities. Therefore, a final
regulatory flexibility analysis is not
required and one was not prepared.
List of Subjects
15 CFR Part 730
Administrative practice and
procedure, Advisory committees,
Exports, Reporting and recordkeeping
requirements, Strategic and critical
materials.
15 CFR Parts 732, 748, and 752
Administrative practice and
procedure, Exports, Reporting and
recordkeeping requirements.
15 CFR Parts 738 and 772
Exports.
15 CFR Part 743
Administrative practice and
procedure, Reporting and recordkeeping
requirements.
15 CFR Part 762
Administrative practice and
procedure, Business and industry,
Confidential business information,
Exports, Reporting and recordkeeping
requirements.
15 CFR Part 774
Exports, Reporting and recordkeeping
requirements.
Accordingly, under the authority of
50 U.S.C. 1701 et seq., parts 730, 732,
738, 743, 748, 752, 762, 772 and 774 of
the Export Administration Regulations
(15 CFR parts 730–774) are amended as
follows:
PART 730—[AMENDED]
1. The authority citation for part 730
is revised to read as follows:
■
Authority: 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.
51729
2151 note; 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. 11912, 41
FR 15825, 3 CFR, 1976 Comp., p. 114; E.O.
12002, 42 FR 35623, 3 CFR, 1977 Comp., p.
133; E.O. 12058, 43 FR 20947, 3 CFR, 1978
Comp., p. 179; E.O. 12214, 45 FR 29783, 3
CFR, 1980 Comp., p. 256; E.O. 12851, 58 FR
33181, 3 CFR, 1993 Comp., p. 608; E.O.
12854, 58 FR 36587, 3 CFR, 1993 Comp., p.
179; E.O. 12918, 59 FR 28205, 3 CFR, 1994
Comp., p. 899; E.O. 12938, 59 FR 59099, 3
CFR, 1994 Comp., p. 950; E.O. 12947, 60 FR
5079, 3 CFR, 1995 Comp., p. 356; E.O. 12981,
60 FR 62981, 3 CFR, 1995 Comp., p. 419; E.O.
13020, 61 FR 54079, 3 CFR, 1996 Comp., p.
219; E.O. 13026, 61 FR 58767, 3 CFR, 1996
Comp., p. 228; E.O. 13099, 63 FR 45167, 3
CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR
44025, 3 CFR, 2001 Comp., p. 783; E.O.
13224, 66 FR 49079, 3 CFR, 2001 Comp., p.
786; E.O. 13338, 69 FR 26751, 3 CFR, 2004
Comp., p 168; E.O. 13637 of March 8, 2013,
78 FR 16129 (March 13, 2013); Notice of
September 17, 2014, 79 FR 56475 (September
19, 2014); Notice of November 7, 2014, 79 FR
67035 (November 12, 2014); Notice of
January 21, 2015, 80 FR 3461 (January 22,
2015); Notice of May 6, 2015, 80 FR 26815
(May 8, 2015); Notice of August 7, 2015, 80
FR 48233 (August 11, 2015).
§ 730.8
[Amended]
2. Section 730.8 is amended by
removing the next to last sentence in
paragraph (a)(5).
■
Supplement No. 1 to Part 730
[Amended]
3. Supplement No. 1 to Part 730 is
amended by:
■ a. Revising the entries for Collection
number ‘‘0694–0088’’ and Collection
number ‘‘0694–0152’’; and;
■ b. Removing the entry for Collection
number ‘‘0694–0089’’.
The revisions read as follow:
■
Supplement No. 1 to Part 730—
Information Collection Requirements
Under the Paperwork Reduction Act:
OMB Control Numbers
*
*
*
*
*
Title
Reference in the EAR
*
*
0694–0088 .....................................
*
*
*
Simplified Network Application Processing+ System (SNAP+) and the
Multipurpose Export License Application.
*
*
Parts 746 and 748, and § 762.2(b).
*
*
0607–0152 .....................................
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Collection No.
*
*
*
Automated Export System (AES) Program ............................................
*
*
§§ 740.1(d), 740.3(a)(3), 754.2(h),
754.4(c), 758.1, 758.2, and
758.3 of the EAR.
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51730
Federal Register / Vol. 80, No. 165 / Wednesday, August 26, 2015 / Rules and Regulations
PART 732—[AMENDED]
PART 748—[AMENDED]
■
4. The authority citation for part 732
is revised to read as follows:
■
Authority: 50 U.S.C. app. 2401 et seq.; 50
U.S.C. 1701 et seq.; 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 7, 2015, 80 FR 48233 (August 11,
2015).
Authority: 50 U.S.C. app. 2401 et seq.; 50
U.S.C. 1701 et seq.; 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 7, 2015, 80 FR 48233 (August 11,
2015).
5. Section 732.5 is amended by
revising the next to last sentence of
paragraph (b) to read as follows:
§ 748.1
12. The authority citation for part 748
is revised to read as follows:
■
[Amended]
§ 732.5 Steps regarding Electronic Export
Information (EEI) requirements, Destination
Control Statements, and recordkeeping.
13. Section 748.1 is amended by
removing the phrase ‘‘Special
Comprehensive License or’’ from the
first parenthetical in the first sentence
in paragraph (d), introductory text.
*
*
*
*
*
(b) * * * DCS requirements do not
apply to reexports * * *
*
*
*
*
*
§ 748.4
§ 732.6
§ 748.7
■
14. Section 748.4 is amended by
removing the next to last sentence in
paragraph (h).
■
[Amended]
6. Section 732.6 is amended by
removing and reserving paragraph (d).
■
PART 738—[AMENDED]
7. The authority citation for 15 CFR
part 738 is revised to read as follows:
■
[Amended]
8. Section 738.4 is amended by
removing the phrase ‘‘or Special
Comprehensive License’’ at the end of
the sixth sentence in paragraph (b)(3).
■
[Amended]
15. Section 748.7 is amended by
removing the phrase ‘‘Special
Comprehensive Licenses and’’ from the
parenthetical in the second sentence in
paragraph (a) and from the parenthetical
in the first sentence in paragraph (d).
■
§ 748.9
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 7, 2015, 80
FR 48233 (August 11, 2015).
§ 738.4
[Amended]
[Amended]
16. Section 748.9 is amended by
removing and reserving paragraph
(c)(1)(vi).
■
Supplement No. 1 to Part 748
[Amended]
17. Supplement No. 1 to Part 748 is
amended by:
■ a. Removing the next to last sentence
and the caption, ‘‘Special
Comprehensive License’’ that precedes
it in paragraph ‘‘Block 5:’’ and
■ b. Removing and reserving paragraph
‘‘Block 8’’.
18. Remove and reserve part 752.
■
§ 743.1
[Amended]
rmajette on DSK7SPTVN1PROD with RULES
§ 743.4
19. The authority citation for part 762
is revised 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
7, 2015, 80 FR 48233 (August 11, 2015).
§ 762.2
10. Section 743.1 is amended by
removing and reserving paragraph
(b)(2).
■
[Amended]
11. Section 743.4 is amended by
removing and reserving paragraph
(b)(2).
[Amended]
20. Section 762.2 is amended by
removing and reserving paragraphs
(b)(31) through (38).
■
PART 772—[AMENDED]
■
VerDate Sep<11>2014
12:34 Aug 25, 2015
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PART 774—[AMENDED]
23. The authority citation for part 774
is revised 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 7, 2015, 80
FR 48233 (August 11, 2015).
Supplement No. 1 to Part 774
[Amended]
24. Supplement No. 1 to part 774 (the
Commerce Control List) is amended by
removing the phrase ‘‘Special
Comprehensive Licenses,’’ wherever it
is found.
■
Dated: August 17, 2015.
Kevin J. Wolf,
Assistant Secretary for Export
Administration.
BILLING CODE 3510–33–P
21. The authority citation for part 772
is revised to read as follows:
■
PO 00000
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ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R05–OAR–2009–0805; EPA–R05–
OAR–2011–0969; FRL–9932–97–Region 5]
Illinois; Disapproval of State Board
Infrastructure SIP Requirements for
the 2006 PM2.5 and 2008 Ozone NAAQS
Environmental Protection
Agency (EPA).
ACTION: Final rule.
AGENCY:
PART 762—[AMENDED]
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; E.O. 13637 of
March 8, 2013, 78 FR 16129 (March 13,
2013); 78 FR 16129; Notice of August 7, 2015,
80 FR 48233 (August 11, 2015).
[Amended]
22. Section 772.1 is amended by
removing the definition ‘‘Controlled in
fact.’’
■
■
■
9. The authority citation for part 743
is revised to read as follows:
§ 772.1
[FR Doc. 2015–20980 Filed 8–25–15; 8:45 am]
PART 752—[REMOVED AND
RESERVED]
PART 743—[AMENDED]
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
7, 2015, 80 FR 48233 (August 11, 2015).
The Environmental Protection
Agency (EPA) is disapproving an
element of State Implementation Plan
(SIP) submissions from Illinois
regarding the infrastructure
requirements of section 110 of the Clean
Air Act (CAA) for the 2006 fine
particulate matter (PM2.5) and 2008
ozone National Ambient Air Quality
Standards (NAAQS). The infrastructure
requirements are designed to ensure that
the structural components of each
state’s air quality management program
are adequate to meet the requirements of
SUMMARY:
E:\FR\FM\26AUR1.SGM
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Agencies
[Federal Register Volume 80, Number 165 (Wednesday, August 26, 2015)]
[Rules and Regulations]
[Pages 51725-51730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-20980]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 730, 732, 738, 743, 748, 752, 762, 772, and 774
[Docket No. 140613501-5698-02]
RIN 0694-AG13
Export Administration Regulations: Removal of Special
Comprehensive License Provisions
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In this final rule, the Bureau of Industry and Security (BIS)
amends the Export Administration Regulations (EAR) by removing the
Special Comprehensive License (SCL) authorization. Based on changes to
the EAR as part of Export Control Reform, BIS concludes that the SCL
has outlived its usefulness to the exporting public since recent
changes to the EAR permit exporters to accomplish similar results using
individual licenses and without undertaking the more onerous SCL
application. This rule also makes conforming amendments. These changes
are part of BIS's efforts to further update export controls under the
EAR consistent with the Retrospective Regulatory Review Initiative that
directs BIS and other federal agencies to streamline regulations and
reduce unnecessary regulatory burdens on the public.
DATES: This is effective September 25, 2015.
FOR FURTHER INFORMATION CONTACT: Thomas Andrukonis, Director, Export
Management and Compliance Division, Office of Exporter Services, Bureau
of Industry and Security, by telephone at (202) 482-6396 or by email at
Thomas.Andrukonis@bis.doc.gov.
SUPPLEMENTARY INFORMATION:
Background
BIS issues this final rule to remove the Special Comprehensive
License (SCL) provisions from the Export
[[Page 51726]]
Administration Regulations (EAR), consistent with the Retrospective
Regulatory Review Initiative and Export Control Reform. In the preamble
to a rule published in the Federal Register on September 30, 2014 (79
FR 58704) (hereinafter ``the September 30 proposed rule'' or ``the
September 30 rule''), BIS reviewed the origins and historical nature of
the SCL, and described the specific sections of the EAR that BIS
proposed to amend. Based on changes to the EAR as part of Export
Control Reform, BIS concluded that the SCL has outlived its usefulness
to the exporting public since recent changes to the EAR permit
exporters to accomplish similar results using individual licenses and
without undertaking the more onerous SCL application.
This rule finalizes the revisions to the EAR as described in the
September 30 proposed rule except for a modification discussed in the
Transition Guidance section of the preamble. In that guidance, BIS
proposed that all SCLs would expire one year from the date of
publication of a final rule that removes SCL provisions from the EAR or
on the expiration date of the SCL under the particular terms of the
license, whichever would come earlier. As a practical matter to
facilitate administrative ease for SCL holders who already have begun
to transition to licenses other than the SCL and for SCL holders who
have yet to begin that transition for their transactions under the EAR,
BIS provides instead in this final rule that all SCLs still in effect
at this publication will expire one year from the effective date of
this rule, which will be September 26, 2016. Further, during this
transition period, BIS will not accept new SCL applications or
amendments, including renewals, to outstanding SCLs. As stated in the
proposed rule, with the publication of this final rule, SCL holders may
choose to apply for four-year individual licenses for exporting and
reexporting items under the EAR or use available license exceptions.
Finally, as stated in the proposed rule, as with all transactions
subject to the EAR, the applicable recordkeeping requirements under 15
CFR part 762 will continue to apply to SCL transactions until the
applicable retention periods are fulfilled.
Public Comments on the September 30 Proposed Rule To Remove the SCL and
BIS Responses
BIS received three comments from three SCL holders who are private
companies in the fields of geophysical and seismic technology on the
September 30 proposed rule. A summary of the comments and BIS responses
are below. Where possible, similar comments on the proposed rule have
been consolidated.
Advantages of the SCL Compared to Individual Licenses
Comment 1: One commenter acknowledged that while the current
individual validated license, (individual license) offers advantages
previously only available with the SCL, the SCL offers additional
advantages that to a great extent do not exist with an individual
license. The commenter explained that the SCL allows the company, given
the company's volume of business, to operate effectively with minimal
interruptions and to ensure compliance for the following reasons: The
SCL is a single license requiring a single license application, which
is easier to track than a large number of individual licenses with
varying expiration dates; and the SCL has a four-year validity period,
while individual licenses may be, but are not automatically, granted
for up to four years, making planning for medium- and long-term
operations onerous. The commenter also noted that unlike individual
licenses for which amendments require a replacement license, the SCL
item or end user may be amended without submitting an entirely new
license application.
Response 1: BIS acknowledges, as a practical matter, that there is
a likelihood exporters might need more than one individual license or
need to replace an existing license more than once within a four-year
validity period to complete transactions under the EAR. However, BIS
licensing information indicates that SCL holders also have needed to
amend their SCLs a number of times within the SCL four-year validity
period. It also indicates that the initial SCL application and review
process historically required that applicants submit more documents and
wait for decisions on those applications for a longer period than that
for an individual license. Currently, applying for an amendment to
either a SCL or a replacement for an individual license requires that
exporters submit in a less cumbersome manner such information
electronically through SNAP-R. Further, not all changes to individual
licenses require that they be replaced. As detailed in Section 750.7 of
the EAR, non-material changes to a license may be made without the
issuance of a replacement license. In addition, the four-year validity
period for an individual license is not as tentative or unpredictable
as the commenter suggests, given the updated provisions in Section
750.7(g) of the EAR. Finally, with regard to the ease of tracking SCLs
versus individual licenses, exporters are responsible for keeping track
of all authorizations allowed or granted to the exporter under the EAR.
While BIS continually seeks to decrease any unreasonable burden
exporters may have in complying with the EAR, BIS suggests that
exporters develop a degree of familiarity or predictability regarding
their business practices that allows them to review and predict what
resources and activities will be needed to complete their regulatory
obligations for export and reexport.
Comment 2: A commenter stated that an advantage of the SCL is that
it contains a single set of conditions while the conditions for
individual license vary. The commenter further stated that the varying
conditions on individual licenses make compliance difficult if not
impossible. However, another commenter stated that SCL conditions and
individual license conditions for the commenter's individual licenses
are the same, as agreed to by BIS and the State Department's
Directorate of Defense Trade Controls (DDTC).
Response 2: BIS agrees with the second commenter on this issue.
Conditions attached to a particular license, whether on an individual
license or SCL, remain the same for the duration of the validity
period. Should an exporter submit a replacement license, the related
changes could reasonably impact the nature and scope of the conditions
on that license. Even if there are variations between conditions on
different individual licenses, these variations may be justified in
light of the different fact sets for each license application.
Comment 3: A commenter stated that the SCL is more flexible and
better fits a company that needs quick turnaround to compete in the
international marketplace, such as the market for subsea remotely
operated vehicles (ROVs) to support oil and gas exploration. The
commenter added, as an example of flexibility, that the United Kingdom
offers two week processing on flexible individual licenses, which
impose significantly less restrictive conditions as compared to the
individual licenses issued by the United States. The commenter further
stated that the SCL is critical to enabling the company to compete
effectively with foreign competitors while continuing to manufacture
controlled ROVs in the United States. Without the SCL, according to the
commenter, the commenter's competitiveness with foreign ROV
manufacturers, who function under less restrictive export
[[Page 51727]]
control regimes and with the benefit of flexible licensing, would be
negatively impacted.
Response 3: BIS notes that the current features of the EAR's SCL
can be replicated in an individual license. More importantly, as noted
in Response to Comment 1, the review period for an individual license
is less cumbersome and time consuming than for a SCL application,
barring any missing information or significant interagency concerns
about the proposed transaction. Finally, the SCL holders are companies
with well-established license history under the EAR. These companies
have conducted business in their industries long enough to reasonably
forecast licensing needs, including needs for authorizations for
potential additional export or reexport opportunities, and submit
requests to BIS accordingly. Thus, the individual licensing process
described by the commenter should not negatively impact the commenter's
export and reexport interests under the EAR.
Comment 4: A commenter stated that the SCL advances U.S. national
security and foreign policy interests. The commenter further stated
that it was not surprising that the September 30 proposed rule did not
suggest that eliminating the SCL furthers U.S. national security or
foreign policy interests because the existence of the SCL provides an
impetus for companies to develop and implement comprehensive Internal
Control Programs (ICPs), which are subject to audits by BIS. The
commenter also stated that the commenter's compliance with the EAR is
reinforced due to the stringent requirements for obtaining and relying
on a SCL.
Response 4: BIS finds merit in the commenter's point that the SCL
has contributed to advancing U.S. national security and foreign policy
interests and provided an impetus for companies to invest in
comprehensive ICPs. Further, the commenter's point gives BIS an
opportunity to note that the elements of a SCL ICP are strong,
practical factors that will contribute to the success of transactions
using individual licenses authorized under the EAR. These factors
reflect that SCL holders are sophisticated businesses that manage well
their export licensing obligations, as noted in the Response to Comment
1.
Comment 5: One commenter stated that SCL administrative and
compliance benefits greatly outweigh the SCL administrative burden,
unlike individual licenses. The commenter added that individual
licenses are tedious, time consuming and repetitious, and hamper
companies' abilities to respond to short-term bid opportunities.
Response 5: As mentioned in the Response to Comment 3, barring an
insufficient individual license application or significant concerns
raised during interagency review, objectively the individual license
application process is less cumbersome and time consuming than the SCL
application process. BIS appreciates that the commenter does not mind
the administrative burden associated with the SCL. However, the point
of Export Control Reform and the President's Retrospective Regulatory
Review is for agencies to adopt regulatory changes that will remove
redundancies and offer more streamlined and practical requirements and
processes benefiting the greatest number of constituents while
facilitating the agencies' missions. An individual license should be
able to accommodate in a timely manner the commenter's efforts to
pursue short-term bid opportunities, especially given the company's
established licensing history under the EAR. Lastly, whether changes in
transactions require companies to submit an application to amend a SCL
or to replace an individual license (in case the change does not
qualify as a non-material change), the thoroughness and accuracy of the
application and the complexity of the basis for and type of change
requested will impact how quickly BIS can process a license
application, whether a SCL amendment or replacement license.
Alternative Authorizations Under the EAR (i.e., License Exceptions,
Validated End User (VEU) Authorization, etc.)
Comment 6: One commenter stated that none of the changes to the EAR
described in the preamble of the September 30 proposed rule would make
up for that commenter's loss of the SCL. In particular, the commenter
stated that the existing license exceptions do not offer a viable
alternative for the commenter's operations because the majority of the
commenter's commodities fall under Export Control Classification Number
(ECCN) 6A001.a.2 and the only license exception allowed would be
License Exception Temporary imports, exports, reexports, and transfers
(in-country) (TMP), which does not meet the commenter's business needs
. A second commenter also stated that restrictions on available license
exceptions significantly limit the benefit of the exceptions. For
example, License Exceptions, such as Shipments to Country Group B
countries (GBS), cover only a fraction of controlled spare parts for
ROVs; and License Exception Servicing and replacement of parts and
equipment (RPL) only authorizes a one-for-one replacement of parts. The
second commenter also stated that License Exception Strategic Trade
Authorization (STA) does not solve the commenter's authorization needs
because the countries in which the commenter's ROVs are currently used
are not in Country Group A:5 and ROVs under ECCN 8A001 are not eligible
for export to STA Country Group A:6. Lastly, the commenter stated that
TMP does not solve the commenter's needs because installation and use
of ROVs abroad may go on for years and applying for individual licenses
to keep the ROVs abroad is a cumbersome process.
Response 6: BIS understands that the scenario described by the
commenter relative to potential assistance provided by license
exceptions will not apply to every situation or exporter, but will
assist some exporters in certain situations.
Comment 7: A commenter stated that the VEU Authorization would not
be a viable alternative to the SCL because of the limited number of
countries approved under the authorization.
Response 7: BIS acknowledges that currently there are few approved
validated end users and countries. However, the use of VEU
Authorization for the existing approved end users and the respective
approved countries and items provides easier and accountable access for
U.S. companies and other companies. Therefore, the authorization
remains an option, which may be helpful for some exporters or
reexporters, including SCL holders.
Improvements in Individual Licenses
Comment 8: One commenter stated that the process or procedures for
obtaining individual licenses under the EAR has not grown noticeably
simpler or more expeditious than when the commenter received its SCL.
The commenter further stated that SNAP-R is not new to the commenter,
and that application processing times also have not grown appreciably
shorter, noting that BIS reported that the average processing time to
review a license application was 29 days in FY 2010 and 26 days in FY
2013.
Response 8: The system for submitting and processing license
applications has substantially improved over the decades. Although the
improvements that BIS has implemented do not perfectly accommodate
every licensable EAR transaction, they have resulted in a more
streamlined and comparably versatile licensing process when compared to
the protracted initial SCL
[[Page 51728]]
application. BIS reminds exporters that the updates for individual
license applications include four-year, or longer--per Section
750.7(g)--validity period, and allowing the listing of a greater number
of end-users, among other enhancements. Lastly, the September 30
proposed rule described developments and improvements under the EAR
that directly respond to the President's Retrospective Regulatory
Review Initiative.
Projected Impact of Removal of the SCL
Comment 9: Raising a point similar to that in Comment 1, a
commenter stated that the removal of the SCL will increase the number
of individual licenses that must be managed, and that unlike the SCL,
exporters will be unable to amend export and reexport licenses. The
commenter noted that the commenter amends its SCL twice a year. The
commenter further stated that an increase in individual licenses will
require additional internal resources, and increased chances of freight
forwarder errors.
Response 9: BIS acknowledges, as a practical matter, there is a
likelihood exporters might need more than one individual license or
need to replace an existing license more than once within a four-year
validity period to complete transactions under the EAR. However, BIS
licensing information indicates that SCL holders typically have applied
for additional licenses under the EAR to fully accommodate the SCL
holders'export and reexport needs under the EAR. Please see Response to
Comment 1. Regarding the commenter's assertion that exporters will be
unable to amend export and reexport licenses, BIS expects that changes
to individual licenses will be handled in a similar fashion as
amendments to SCL amendments.
Other
Comment 10: A commenter suggested that to offset the removal of the
SCL, BIS should entertain the possibility of issuing export and
reexport licenses to include all countries except those sanctioned or
embargoed. The commenter believed that this approach would help
mitigate the risk of losing new business opportunities.
Response 10: BIS will consider the commenter's recommendation
consistent with pertinent authorities and U.S. and allied policy
objectives.
Comment 11: A commenter asserted that the two 2012 comments from
industry cited in the September 30 proposed rule that expressed
reservations about the benefits of the SCL do not extend to other U.S.
companies, including the commenter's company. The commenter went on to
say that other companies should determine if the benefits of a SCL do
not outweigh the burdens on an individual basis.
Response 11: BIS did not intend to imply that the SCL has not
provided significant benefits to other U.S. companies. BIS included the
comments in question in the September 30 proposed rule because their
nature and quality were relevant to the priorities of the President's
Retrospective Regulatory Initiative. In keeping with that Initiative,
BIS published the September 30 proposed rule to determine if there were
better ways to serve the broad spectrum of constituents under the
jurisdiction of the EAR. That said, as already indicated, BIS believes
all current features of the SCL can be replicated in an individual
license, and thus the usefulness and effectiveness of export
authorizations under the EAR should not be impacted negatively by
removal of the SCL.
Description of Changes From the Proposed Rule
This rule publishes in final form the proposed amendments to the
SCL as described initially in the September 30 rule, except for one
change to the proposed expiration date of the SCL and two proposed
amendments that were overtaken by a recent rulemaking.
Change to Expiration Date of the SCL
In the proposed rule, BIS proposed that all SCLs would expire one
year from the date of publication of a final rule or the expiration
date of the SCL under the particular terms of the license, whichever
would come earlier. BIS provides instead in this final rule that all
SCLs still in effect at this publication will expire one year from the
effective date of this rule, which will be September 26, 2016.
The Intervening Changes
In the September 30 rule, BIS proposed to remove a reference to an
exception to required filing of support documents for a SCL by removing
and reserving paragraph (a)(6) of Section 748.9 (formerly Support
documents for license applications). A final rule, Revisions to Support
Document Requirements for License Applications under the Export
Administration Regulations, published in the Federal Register March 13,
2015 (80 FR 13210) (hereinafter ``the March 13 final rule''), revised
Section 748.9 (currently Support documents for evaluation of foreign
parties in license applications) and in doing so moved the reference to
the SCL support documents exception to paragraph (c)(1)(vi) of the
section. In this final rule, BIS removes and reserves paragraph
(c)(1)(vi) of Section 748.9, which updates the amendment to Section
748.9(a)(6) proposed in the September 30 rule.
In addition, BIS proposed to remove the reference to the SCL in
existing paragraph (a)(1)(iii) of Section 748.12 (formerly Special
provisions for support documents). This paragraph provided that
exporters had a grace period of 45 days to comply with support
documents requirements for a license application if an item had been
removed from SCL eligibility. The March 13 final rule revised that
provision by removing references to the SCL in the provision and moving
the remainder of the provision to Section 748.9(h) of the EAR. The
revision in the March 13 final rule eliminates the need to retain the
amendment to Section 748.12 (currently Firearms Convention (FC) Import
Certificate) (a)(1)(iii) proposed in the September 30 rule. That update
will be reflected in the regulatory text of this final rule.
Export Administration Act
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 amended by Executive Order 13637 of March
8, 2013, 78 FR 16129 (March 13, 2013) and as extended by the Notice of
August 7, 2015, 80 FR 48233 (August 11, 2015), has continued the Export
Administration Regulations in effect under the International Emergency
Economic Powers Act. BIS continues to carry out the provisions of the
Export Administration Act, as appropriate and to the extent permitted
by law, pursuant to Executive Order 13222 as amended by Executive Order
13637.
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, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
This rule has been determined to be a not significant regulatory action
for purposes of Executive Order 12866.
[[Page 51729]]
2. This rule amends collections previously approved by the Office
of Management and Budget (OMB) under Control Numbers 0694-0088,
``Simplified Network Application Processing + System (SNAP+) and the
Multi-Purpose Application,'' which carries a burden hour estimate of
43.8 minutes to prepare and submit form BIS-748; 0694-0089, ``Special
Comprehensive License,'' which carries a burden hour estimate of 40
hours to complete an application, 30 minutes to complete annual
extension requests, 4 hours to complete amendments, and six hours to
perform recordkeeping and internal control program annual
certifications; and 0694-0152, ``Automated Export System (AES)
Program,'' which carries a burden hour estimate of three minutes or
0.05 hours per electronic submission.
The total burden hours associated with the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.) (PRA) and the aforementioned OMB
Control Numbers would be expected to decrease as a result of this
removal of part 752 of the EAR and related provisions in this rule
issued in final form, thereby reducing burden hours associated with
approved collections related to the EAR.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the PRA, unless that collection of information displays
a currently valid OMB Control Number.
3. This rule does not contain policies with Federalism implications
as that term is defined under Executive Order 13132.
4. The Chief Counsel for Regulation at the Department of Commerce
certified to the Chief Counsel for Advocacy at the Small Business
Administration that this rule, if adopted, would not have a significant
economic impact on a substantial number of small entities. The factual
basis was published in the proposed rule and is not repeated here. BIS
received no comments that addressed the economic impact of this rule on
small entities. Therefore, a final regulatory flexibility analysis is
not required and one was not prepared.
List of Subjects
15 CFR Part 730
Administrative practice and procedure, Advisory committees,
Exports, Reporting and recordkeeping requirements, Strategic and
critical materials.
15 CFR Parts 732, 748, and 752
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
15 CFR Parts 738 and 772
Exports.
15 CFR Part 743
Administrative practice and procedure, Reporting and recordkeeping
requirements.
15 CFR Part 762
Administrative practice and procedure, Business and industry,
Confidential business information, Exports, Reporting and recordkeeping
requirements.
15 CFR Part 774
Exports, Reporting and recordkeeping requirements.
Accordingly, under the authority of 50 U.S.C. 1701 et seq., parts
730, 732, 738, 743, 748, 752, 762, 772 and 774 of the Export
Administration Regulations (15 CFR parts 730-774) are amended as
follows:
PART 730--[AMENDED]
0
1. The authority citation for part 730 is revised to read as follows:
Authority: 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. 2151 note; 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. 11912, 41 FR 15825, 3 CFR, 1976 Comp., p. 114; E.O.
12002, 42 FR 35623, 3 CFR, 1977 Comp., p. 133; E.O. 12058, 43 FR
20947, 3 CFR, 1978 Comp., p. 179; E.O. 12214, 45 FR 29783, 3 CFR,
1980 Comp., p. 256; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p.
608; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., p. 179; E.O. 12918,
59 FR 28205, 3 CFR, 1994 Comp., p. 899; E.O. 12938, 59 FR 59099, 3
CFR, 1994 Comp., p. 950; E.O. 12947, 60 FR 5079, 3 CFR, 1995 Comp.,
p. 356; E.O. 12981, 60 FR 62981, 3 CFR, 1995 Comp., p. 419; E.O.
13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 61 FR
58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR,
1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; E.O. 13338,
69 FR 26751, 3 CFR, 2004 Comp., p 168; E.O. 13637 of March 8, 2013,
78 FR 16129 (March 13, 2013); Notice of September 17, 2014, 79 FR
56475 (September 19, 2014); Notice of November 7, 2014, 79 FR 67035
(November 12, 2014); Notice of January 21, 2015, 80 FR 3461 (January
22, 2015); Notice of May 6, 2015, 80 FR 26815 (May 8, 2015); Notice
of August 7, 2015, 80 FR 48233 (August 11, 2015).
Sec. 730.8 [Amended]
0
2. Section 730.8 is amended by removing the next to last sentence in
paragraph (a)(5).
Supplement No. 1 to Part 730 [Amended]
0
3. Supplement No. 1 to Part 730 is amended by:
0
a. Revising the entries for Collection number ``0694-0088'' and
Collection number ``0694-0152''; and;
0
b. Removing the entry for Collection number ``0694-0089''.
The revisions read as follow:
Supplement No. 1 to Part 730--Information Collection Requirements Under
the Paperwork Reduction Act: OMB Control Numbers
* * * * *
------------------------------------------------------------------------
Reference in the
Collection No. Title EAR
------------------------------------------------------------------------
* * * * * * *
0694-0088..................... Simplified Network Parts 746 and
Application 748, and Sec.
Processing+ System 762.2(b).
(SNAP+) and the
Multipurpose Export
License Application.
* * * * * * *
0607-0152..................... Automated Export Sec. Sec.
System (AES) Program. 740.1(d),
740.3(a)(3),
754.2(h),
754.4(c),
758.1, 758.2,
and 758.3 of
the EAR.
------------------------------------------------------------------------
[[Page 51730]]
PART 732--[AMENDED]
0
4. The authority citation for part 732 is revised to read as follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
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 7, 2015, 80 FR
48233 (August 11, 2015).
0
5. Section 732.5 is amended by revising the next to last sentence of
paragraph (b) to read as follows:
Sec. 732.5 Steps regarding Electronic Export Information (EEI)
requirements, Destination Control Statements, and recordkeeping.
* * * * *
(b) * * * DCS requirements do not apply to reexports * * *
* * * * *
Sec. 732.6 [Amended]
0
6. Section 732.6 is amended by removing and reserving paragraph (d).
PART 738--[AMENDED]
0
7. The authority citation for 15 CFR part 738 is revised 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 7, 2015, 80 FR 48233 (August 11, 2015).
Sec. 738.4 [Amended]
0
8. Section 738.4 is amended by removing the phrase ``or Special
Comprehensive License'' at the end of the sixth sentence in paragraph
(b)(3).
PART 743--[AMENDED]
0
9. The authority citation for part 743 is revised 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; E.O. 13637 of
March 8, 2013, 78 FR 16129 (March 13, 2013); 78 FR 16129; Notice of
August 7, 2015, 80 FR 48233 (August 11, 2015).
Sec. 743.1 [Amended]
0
10. Section 743.1 is amended by removing and reserving paragraph
(b)(2).
Sec. 743.4 [Amended]
0
11. Section 743.4 is amended by removing and reserving paragraph
(b)(2).
PART 748--[AMENDED]
0
12. The authority citation for part 748 is revised to read as follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
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 7, 2015, 80 FR
48233 (August 11, 2015).
Sec. 748.1 [Amended]
0
13. Section 748.1 is amended by removing the phrase ``Special
Comprehensive License or'' from the first parenthetical in the first
sentence in paragraph (d), introductory text.
Sec. 748.4 [Amended]
0
14. Section 748.4 is amended by removing the next to last sentence in
paragraph (h).
Sec. 748.7 [Amended]
0
15. Section 748.7 is amended by removing the phrase ``Special
Comprehensive Licenses and'' from the parenthetical in the second
sentence in paragraph (a) and from the parenthetical in the first
sentence in paragraph (d).
Sec. 748.9 [Amended]
0
16. Section 748.9 is amended by removing and reserving paragraph
(c)(1)(vi).
Supplement No. 1 to Part 748 [Amended]
0
17. Supplement No. 1 to Part 748 is amended by:
0
a. Removing the next to last sentence and the caption, ``Special
Comprehensive License'' that precedes it in paragraph ``Block 5:'' and
0
b. Removing and reserving paragraph ``Block 8''.
PART 752--[REMOVED AND RESERVED]
0
18. Remove and reserve part 752.
PART 762--[AMENDED]
0
19. The authority citation for part 762 is revised 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
7, 2015, 80 FR 48233 (August 11, 2015).
Sec. 762.2 [Amended]
0
20. Section 762.2 is amended by removing and reserving paragraphs
(b)(31) through (38).
PART 772--[AMENDED]
0
21. The authority citation for part 772 is revised 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
7, 2015, 80 FR 48233 (August 11, 2015).
Sec. 772.1 [Amended]
0
22. Section 772.1 is amended by removing the definition ``Controlled in
fact.''
PART 774--[AMENDED]
0
23. The authority citation for part 774 is revised 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 7, 2015, 80 FR 48233 (August 11, 2015).
Supplement No. 1 to Part 774 [Amended]
0
24. Supplement No. 1 to part 774 (the Commerce Control List) is amended
by removing the phrase ``Special Comprehensive Licenses,'' wherever it
is found.
Dated: August 17, 2015.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2015-20980 Filed 8-25-15; 8:45 am]
BILLING CODE 3510-33-P