Amendment to the Export Administration Regulations to Add XBS Epoxy System to the List of 0Y521 Series; Technical Amendment to Update Other 0Y521 Items, 70676-70679 [2015-28978]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Industry and Security

[Federal Register Volume 80, Number 220 (Monday, November 16, 2015)]
[Rules and Regulations]
[Pages 70676-70679]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-28978]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 774

[Docket No.150825777-5777-01]
RIN 0694-AG70


Amendment to the Export Administration Regulations to Add XBS 
Epoxy System to the List of 0Y521 Series; Technical Amendment to Update 
Other 0Y521 Items

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Interim final rule with request for comments.

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SUMMARY: In this interim final rule, the Bureau of Industry and 
Security (BIS) amends the Export Administration Regulations (EAR) to 
make certain items subject to the EAR and to impose on those items a 
license requirement for export and reexport to all destinations, except 
Canada. Specifically, this rule classifies the specified XBS Epoxy 
System under Export Control Classification Number (ECCN) 0C521 on the 
Commerce Control List (CCL). As described in the final rule that 
established the 0Y521 series and that

[[Page 70677]]

was published in the Federal Register on April 13, 2012, items are 
added to the 0Y521 series upon a determination by the Department of 
Commerce, with the concurrence of the Departments of Defense and State, 
that the items should be controlled for export because the items 
provide at least a significant military or intelligence advantage to 
the United States or foreign policy reasons justify control. The items 
identified in this rule are controlled for regional stability (RS) 
Column 1 reasons. The only license exception available for these items 
is for exports, reexports, and transfers (in-country) made by or 
consigned to a department or agency of the U.S. Government. In this 
rule, BIS also removes technology and software related to aircraft wing 
folding systems.

DATES: This rule is effective November 16, 2015. Comments must be 
received by January 15, 2016. Comments requested on the addition of the 
0C521 item only.

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-2015-0043.
     By email directly to: publiccomments@bis.doc.gov. Include 
RIN 0694-AG70 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-AG70.

FOR FURTHER INFORMATION CONTACT: Michael Rithmire, Electronics and 
Materials Division, Office of National Security and Technology Transfer 
Controls by phone at (202) 482-6105 or by email at 
Michael.Rithmire@bis.doc.gov.

SUPPLEMENTARY INFORMATION: 

Background

    BIS established the ECCN 0Y521 series to identify items that 
warrant control on the CCL but are not yet identified in an existing 
ECCN (77 FR 22191, April 13, 2012). Items are added to the ECCN 0Y521 
series by the Department of Commerce, with the concurrence of the 
Departments of Defense and State, upon a determination that an item 
should be controlled because it provides at least a significant 
military or intelligence advantage to the United States or because 
foreign policy reasons justify such control. The ECCN 0Y521 series is a 
temporary holding classification with a limitation that while an item 
is temporarily classified under ECCN 0Y521, the U.S. Government works 
to adopt a control through the relevant multilateral regime(s), to 
determine an appropriate longer-term control over the item, or that the 
item does not warrant control on the CCL.
    Items classified under ECCN 0Y521, including the item identified in 
this interim final rule as an 0C521 item, remain so-classified for one 
year from the date a final rule identifying the item is published in 
the Federal Register amending the EAR, unless the item is re-classified 
under a different ECCN, under an EAR99 designation, or the 0Y521 
classification is extended. During this time, the U.S. Government 
determines whether it is appropriate to submit a proposed control to 
the applicable export control regime (e.g., the Wassenaar Arrangement) 
for potential multilateral control, with the understanding that 
multilateral controls are preferable when practical. An item's ECCN 
0Y521 classification may be extended for two one-year periods to 
provide time for the U.S. Government and multilateral regime(s) to 
reach agreement on controls for the item, and provided that the U.S. 
Government has submitted a proposal to obtain multilateral controls 
over the item. Further extension beyond three years may occur only if 
the Under Secretary for Industry and Security makes a determination 
that such extension is in the national security or foreign policy 
interests of the United States. An extension or re-extension, including 
a determination by the Under Secretary for Industry and Security, will 
be published in the Federal Register.

License Requirements, Policies and Exceptions

    The license requirements and policies for the ECCN 0Y521 series 
appear in Sec.  742.6(a)(7) of the EAR. ECCN 0Y521 items are subject to 
a nearly worldwide license requirement (i.e., for every country except 
Canada) with a case-by-case license review policy, through regional 
stability (RS Column 1) controls. The description and status of ECCN 
0Y521 items appear in Supplement No. 5 to part 774 of the EAR, along 
with any item-specific license exceptions, where applicable. Unless 
otherwise indicated, License Exception GOV is the only license 
exception available and is applicable to all ECCN 0Y521 series items, 
including those items identified in this document, if the item is 
within the scope of Sec.  740.11(b)(2)(ii) (Exports, reexports, and 
transfers (in-country) made by or consigned to a department or agency 
of the U.S. Government), as provided in Sec.  740.2(a)(14).

Addition of ECCN 0C521 Item: XBS Epoxy System

    In this rule, BIS amends the EAR to make the specified XBS Epoxy 
System subject to the EAR and impose a license requirement on the item. 
This item is being added to the 0Y521 series pursuant to a 
determination by the Department of Commerce, with the concurrence of 
the Departments of State and Defense, that the item should be 
controlled because it provides a significant military or intelligence 
advantage to the United States or because foreign policy reasons 
justify such controls. The specified XBS Epoxy System is classified 
under ECCN 0C521 No. 1. The control, which appears in the table found 
in Supplement No. 5 to part 774 of the EAR, covers an Epoxy system 
designed to obfuscate critical technology components against X-ray and 
terahertz microscopy imaging attempts.

License Applications for the New ECCN 0C521 Item

    License applications for this item may be submitted through SNAP-R 
in accordance with Sec.  748.6 of the EAR. Exporters are directed to 
include detailed descriptions and technical specifications with the 
license application, and identify the item as 0C521.

Technical Amendment: Removal of No. 3 0D521 and No. 2 0E521 Items, 
Aircraft Wing Folding Systems, From Supplement No. 5 to Part 774

    In this rule, BIS also removes references to aircraft wing folding 
systems ``software'' and related ``technology'' listed, prior to this 
rule, as entries No. 3 0D521 and No. 2 0E521, respectively, in 
Supplement No. 5 to part 774. The references to these items are 
obsolete because, in accordance with procedure established in the April 
13, 2012, final rule, the U.S. Government adopted a control through the 
relevant multilateral regime(s), which determined an appropriate 
longer-term control over the item. The wing fold system ``software'' is 
now controlled by ECCN 9D001, and the ``technology'' is controlled by 
ECCN 9E003.j on the CCL. A final rule published in the Federal Register 
May 21, 2015 (80 FR 29431), and which went into effect the same day, 
implemented the 2014 Wassenaar Plenary Agreements by establishing new 
controls on the items, rendering their 0Y521 status obsolete. BIS is 
not soliciting public comments on the removal provisions.
    The rule is being issued in interim final form because while the

[[Page 70678]]

government believes that it is in the national security interests of 
the United States to immediately implement these controls, it also 
wants to provide the interested public with an opportunity to comment 
on the new controls of the XBS Epoxy System. Comments may be submitted 
in accordance with the DATES and ADDRESSES sections of this 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, 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 determined to be not significant for 
purposes of Executive Order 12866.
    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 rule affects two approved collections: (1) The 
Simplified Network Application Processing + System (control number 
0694-0088), which carries a burden hour estimate of 43.8 minutes, 
including the time necessary to submit license applications, among 
other things, as well as miscellaneous and other recordkeeping 
activities that account for 12 minutes per submission; and (2) License 
Exceptions and Exclusions (0694-0137). With these initial 0Y521 series 
items, BIS does not believe that this rule will materially increase the 
number of submissions under these collections.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under E.O. 13132.
    4. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring prior notice, the opportunity for public comment and a 
delay in effective date are inapplicable because this regulation 
involves a military or foreign affairs function of the United States 
(See 5 U.S.C. 553(a)(1)). BIS, with the concurrence of the U.S. 
Departments of Defense and State, is implementing this rule because the 
item identified for the ECCN 0Y521 series in this rule provide a 
significant military or intelligence advantage to the United States. 
Immediate imposition of a license requirement is necessary to effect 
the national security and foreign policy goals of this rule. Immediate 
implementation will allow BIS to prevent exports of these items to 
users and for uses that pose a national security threat to the United 
States or its allies. If BIS delayed this rule to allow for prior 
notice and opportunity for public comment, the resulting delay in 
implementation would afford an opportunity for the export of these 
items to users and uses that pose such a national security threat, 
thereby undermining the purpose of the rule. In addition, if parties 
receive notice of the U.S. Government's intention to control these 
items under 0Y521 once a final rule was published, they might have an 
incentive to either accelerate orders of these items or attempt to have 
the items exported prior to the imposition of the control. In addition, 
prior notice and opportunity for public comment is unnecessary for the 
amendment to remove references to wing folding technology and software. 
The removal of the references updates Supplement No. 5 to part 774 and 
ensures that it accurately reflects the legal status of those items now 
classified under other ECCNs under the EAR. This amendment also serves 
to avoid confusing readers about the items' current status.
    Further, BIS finds good cause to waive the 30-day delay in 
effectiveness under 5 U.S.C. 553(d)(3). Immediate implementation of 
these changes will allow BIS to prevent exports of these items to users 
and for uses that pose a national security threat to the United States 
or its allies. If BIS delayed this rule to allow for a 30-day delay in 
effectiveness, the resulting delay in implementation would afford an 
opportunity for the export of these items to users and uses that pose 
such a national security threat, thereby undermining the purpose of the 
rule. BIS also finds good cause to waive the 30-delay in effectiveness 
for the implementation of the amendment to remove items because the 
amendment will assist in clarifying the current status of the wing 
folding technology and software, eliminating any possible confusion. 
Furthermore, the amendment is not a substantive change. Because a 
notice of proposed rulemaking and an opportunity for public comment are 
not required to be given for this rule by 5 U.S.C. 553, or by any other 
law, the analytical requirements of the Regulatory Flexibility Act, 5 
U.S.C. 601 et seq., are not applicable. Accordingly, no regulatory 
flexibility analysis is required and none has been prepared. Although 
notice and opportunity for comment are not required, BIS is issuing 
this rule as an interim final rule with a request for comments. All 
comments must be in writing and submitted via one or more of the 
methods listed under the ADDRESSES caption to this document. All 
comments (including any personal identifiable information) will be 
available for public inspection and copying. Those wishing to comment 
anonymously may do so by submitting their comment via regulations.gov 
and leaving the fields for identifying information blank.

List of Subjects in 15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

    Accordingly, part 774 of the Export Administration Regulations (15 
CFR parts 730-774) is amended as follows:

PART 774--[AMENDED]

0
1. The authority citation for 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 7, 2015, 80 FR 48233 (August 11, 2015).

0
2. Supplement No. 5 to part 774 is revised to read as follows:

SUPPLEMENT NO. 5 TO PART 774--ITEMS CLASSIFIED UNDER ECCNS 0A521, 
0B521, 0C521, 0D521 AND 0E521

    The following table lists items subject to the EAR that are not 
listed elsewhere in the CCL, but which the Department of Commerce, 
with the concurrence of the Departments of Defense and State, has

[[Page 70679]]

identified warrant control for export or reexport because the items 
provide at least a significant military or intelligence advantage to 
the United States or for foreign policy reasons.

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                                                                Date when the item will
      Item descriptor. Note: The          Date of initial or      be designated EAR99,
   description must match by model         subsequent  BIS       unless reclassified in   Item-specific license
 number or a broader descriptor that    classification  (ID =     another ECCN or the     exception eligibility
   does not necessarily need to be       initial date;  SD =    0Y521 classification is
           company specific                subsequent date)             reissued
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                                    0A521. Systems, Equipment and Components
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                                                   [RESERVED]
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                                0B521. Test, Inspection and Production Equipment
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                                                   [RESERVED]
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                                                0C521. Materials
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No. 1 XBS Epoxy system designed to     November 16, 2015 (ID).  November 16, 2016......  License Exception GOV
 obfuscate critical technology                                                            under Sec.
 components against x-ray and                                                             740.11(b)(2)(ii) only
 terahertz microscopy imaging
 attempts.
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No. 2 [RESERVED].....................  [RESERVED].............  [RESERVED].............  [RESERVED]
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                                                 0D521. Software
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                                                   [RESERVED]
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                                                0E521. Technology
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                                                   [RESERVED]
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    Dated: November 9, 2015.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2015-28978 Filed 11-13-15; 8:45 am]
 BILLING CODE 3510-33-P