Commerce Control List: Addition of Items Determined To No Longer Warrant Control Under United States Munitions List Category XIV (Toxicological Agents) or Category XVIII (Directed Energy Weapons), 49517-49531 [2016-17506]

Download as PDF 49517 Rules and Regulations Federal Register Vol. 81, No. 145 Thursday, July 28, 2016 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of new books are listed in the first FEDERAL REGISTER issue of each week. DEPARTMENT OF COMMERCE Bureau of Industry and Security 15 CFR Parts 740 and 774 [Docket No. 120105019–5755–01] RIN 0694–AF52 Commerce Control List: Addition of Items Determined To No Longer Warrant Control Under United States Munitions List Category XIV (Toxicological Agents) or Category XVIII (Directed Energy Weapons) Bureau of Industry and Security, Department of Commerce. ACTION: Final rule. AGENCY: This final rule implements changes described in a proposed rule that the Bureau of Industry and Security (BIS) published on June 17, 2015. Specifically, this final rule describes how articles the President has determined no longer warrant control under Category XIV (Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated Equipment) or Category XVIII (Directed Energy Weapons) of the United States Munitions List (USML) are now controlled under the Commerce Control List (CCL). The affected Category XIV articles consist primarily of dissemination, detection, and protection ‘‘equipment’’ and related articles, such as production and test ‘‘equipment,’’ and are controlled under new Export Control Classification Numbers (ECCNs) 1A607, 1B607, 1C607, 1D607, and 1E607, as added to the CCL by this final rule. The affected Category XVIII articles consist primarily of tooling, production ‘‘equipment,’’ test and evaluation ‘‘equipment,’’ test models, and related articles and are controlled under new ECCNs 6B619, 6D619 and 6E619, as added to the CCL by this final rule. Lhorne on DSK30JT082PROD with RULES SUMMARY: VerDate Sep<11>2014 14:41 Jul 27, 2016 Jkt 238001 This final rule is one in a series of rules describing how various types of articles that the President has determined no longer warrant control on the USML, as part of the Administration’s Export Control Reform Initiative, are controlled on the CCL in accordance with the requirements of the Export Administration Regulations (EAR). This final rule is being published by BIS in conjunction with a final rule from the Department of State, Directorate of Defense Trade Controls, which amends the list of articles controlled by USML Categories XIV and XVIII. The citations in this BIS rule to USML Categories XIV and XVIII reflect the amendments contained in the Department of State’s rule. The revisions made by BIS in this rule are part of Commerce’s retrospective regulatory review plan under Executive Order 13563 completed in August 2011. DATES: This rule is effective December 31, 2016. ADDRESSES: The Department of Commerce’s full retrospective regulatory review plan can be accessed at: http:// open.commerce.gov/news/2011/08/23/ commerce-plan-retrospective-analysisexisting-rules. FOR FURTHER INFORMATION CONTACT: For questions regarding dissemination, detection and protection ‘‘equipment’’ and related items that are controlled under new ECCNs 1A607, 1B607, 1C607, 1D607, and 1E607, contact Richard P. Duncan, Ph.D., Director, Chemical and Biological Controls Division, Office of Nonproliferation and Treaty Compliance, Bureau of Industry and Security, telephone: (202) 482– 3343, email: Richard.Duncan@ bis.doc.gov. For questions regarding tooling, production ‘‘equipment,’’ test and evaluation ‘‘equipment,’’ test models, and related items that are controlled under new ECCNs 6B619, 6D619 and 6E619, contact Mark Jaso, Sensors and Aviation Division, Office of National Security & Technology Transfer Controls, Bureau of Industry and Security, telephone: (202) 482–0987, email: Mark.Jaso@bis.doc.gov. SUPPLEMENTARY INFORMATION: Background This final rule is published by the Bureau of Industry and Security (BIS) as part of the Administration’s Export PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 Control Reform (ECR) Initiative, the object of which is to protect and enhance U.S. national security interests. The implementation of the ECR initiative includes amendment of the International Traffic in Arms Regulations (ITAR) and its U.S. Munitions List (USML), so that they control only those items that provide the United States with a critical military or intelligence advantage or otherwise warrant such controls, and amendment of the Export Administration Regulations (EAR) to control military items that do not warrant USML controls. This series of amendments to the ITAR and the EAR will reform the U.S. export control system to enhance our national security by: (i) Improving the interoperability of U.S. military forces with allied countries; (ii) strengthening the U.S. industrial base by, among other things, reducing incentives for foreign manufacturers to design out and avoid U.S.-origin content and services; and (iii) allowing export control officials to focus government resources on transactions that pose greater national security, foreign policy, or proliferation concerns than those involving our NATO allies and other multi-regime partners. Following the structure set forth in the final rule titled ‘‘Revisions to the Export Administration Regulations: Initial Implementation of Export Control Reform’’ (78 FR 22660, April 16, 2013) (hereinafter the ‘‘April 16 (initial implementation) rule’’), this final rule describes BIS’s implementation of controls, under the EAR’s CCL, on certain dissemination, detection and protection ‘‘equipment’’ and related articles previously controlled under USML Category XIV in the ITAR and certain tooling, production ‘‘equipment,’’ test and evaluation ‘‘equipment,’’ test models and related articles previously controlled under USML Category XVIII of the ITAR. In the April 16 (initial implementation) rule, BIS created a series of new ECCNs to control items that would be removed from the USML and similar items from the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies Munitions List (Wassenaar Arrangement Munitions List or WAML) that were already controlled elsewhere on the CCL. That final rule referred to this series of new ECCNs as E:\FR\FM\28JYR1.SGM 28JYR1 Lhorne on DSK30JT082PROD with RULES 49518 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations the ‘‘600 series,’’ because the third character in each of these new ECCNs is the number ‘‘6.’’ The first two characters of the ‘‘600 series’’ ECCNs serve the same function as any other ECCN as described in § 738.2 of the EAR. The first character is a number, within the range of 0 through 9, that identifies the Category on the CCL in which the ECCN is located. The second character is a letter, within the range of A through E, that identifies the product group in a CCL Category. As indicated above, the third character in the ‘‘600 series’’ ECCNs is the number ‘‘6,’’ which distinguishes the items controlled under this series of ECCNs from items identified under other ECCNs on the CCL. With few exceptions, the final two characters identify the WAML category that covers items that are the same or similar to items in a particular ‘‘600 series’’ ECCN. Pursuant to section 38(f) of the Arms Export Control Act (AECA), the President is obligated to review the USML ‘‘to determine what items, if any, no longer warrant export controls under’’ the AECA. The President must report the results of the review to Congress and wait 30 days before removing any such items from the USML. The report must ‘‘describe the nature of any controls to be imposed on that item under any other provision of law.’’ 22 U.S.C. 2778(f)(1). The changes made by this final rule and in the State Department’s companion rule to Categories XIV and XVIII of the USML are based on a review of these USML Categories by the Defense Department, which worked with the Departments of State and Commerce in preparing these amendments. Other agencies with expertise and equities in the items at issue in these rules were consulted as well. The review focused on identifying those types of articles that provide the United States with a critical military or intelligence capability and that are not currently in normal commercial use. Such items remain on the USML. Other items with less than a critical military or intelligence capability not in normal commercial use will transition to the ‘‘600 series’’ controls. It is the intent of the agencies that USML Categories XIV and XVIII, and the corresponding ‘‘600 series’’ ECCNs on the CCL, not control items in normal commercial use. Such items should be controlled under existing dual-use controls on the CCL, consistent with the Wassenaar Arrangement List of Dual-Use Goods and Technologies. All references to the USML in this rule are to the list of defense articles that are controlled for purposes of VerDate Sep<11>2014 14:41 Jul 27, 2016 Jkt 238001 export, temporary import, or brokering pursuant to the ITAR, and not to the list of defense articles on the United States Munitions Import List (USMIL) that are controlled by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) for purposes of permanent import under its regulations at 27 CFR part 447. Pursuant to section 38(a)(1) of the AECA, all defense articles controlled for export or import, or that are subject to brokering controls, are part of the ‘‘USML’’ under the AECA. For the sake of clarity, references to the USMIL are to the list of defense articles controlled by ATF for purposes of permanent import. All defense articles described in the USMIL or the USML are subject to the brokering controls administered by the U.S. Department of State in part 129 of the ITAR. The transfer of defense articles from the ITAR’s USML to the EAR’s CCL, for purposes of export controls, does not affect the list of defense articles that are controlled on the USMIL under the AECA for purposes of permanent import. On January 18, 2011, the President issued Executive Order 13563, affirming general principles of regulation and directing government agencies to conduct retrospective reviews of existing regulations. The revisions made by this rule are part of Commerce’s retrospective regulatory review plan under Executive Order 13563. Commerce’s full plan, completed in August 2011, can be accessed at: http:// open.commerce.gov/news/2011/08/23/ commerce-plan-retrospective-analysisexisting-rules. This final rule implements amendments to the EAR proposed in BIS’s rule titled ‘‘Commerce Control List: Addition of Items Determined to No Longer Warrant Control under United States Munitions List Category XIV (Toxicological Agents) or Category XVIII (Directed Energy Weapons),’’ which was published in the Federal Register on June 17, 2015 (RIN 0694– AF52) (80 FR 34562) (herein ‘‘the June 17 (toxicological agents and directed energy weapons) rule’’). Dissemination, Detection and Protection ‘‘Equipment’’ and Related Items Public Comments and BIS Responses BIS received comments from eight parties in response to the proposed amendments in the June 17 (toxicological agents and directed energy weapons) rule that addressed dissemination, detection and protection ‘‘equipment’’ and related items. PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 ECCN 1A607 (Military Dissemination, Detection, and Protection ‘‘Equipment’’) Comment: One commenter noted that tear gas and riot control agents were dropped from proposed USML Category XIV(d), but did not appear in proposed ECCN 1A607. Response: The tear gas and riot control agents removed from USML Category XIV(d) are now controlled under ECCN 1C607.a.1 through a.6, as they were proposed to be controlled in BIS’s June 17 (toxicological agents and directed energy weapons) rule. Therefore, no further action is required. ECCN 1A607.f ‘‘Equipment’’) (Protection Comment: One commenter noted that proposed ECCN 1A607.f included protection ‘‘equipment,’’ but did not specifically indicate that it controlled Chemical Agent Resistant Coatings (CARC). The commenter recommended that CARC be specifically identified in ECCN 1A607.f or that the word ‘‘material’’ be added so that companies would be more likely to interpret ECCN 1A607.f to include coatings, such as CARC. In addition, the commenter recommended that the export controls on CARC be changed to align more closely with export controls maintained by U.S. allies, who do not require an export license for CARC to most destinations. Specifically, the commenter felt that companies familiar with the European Union military list could become confused, because the controls in ECCN 1A607.f are similar to those described in ML.7.f, which does not control CARC. In the event that CARC continues to require a license to most destinations, the commenter recommended that all CARC be placed under the export licensing jurisdiction of a single U.S. Government agency to simplify jurisdictional and/or classification determinations. Response: ECCN 1A607.f indicates that it controls protection ‘‘equipment’’ not controlled by USML Category XIV(f) that is ‘‘specially designed’’ for military use and for defense against materials specified by USML XIV(a) or (b) or riot control agents controlled by ECCN 1C607.a. BIS believes that this control language, as revised in this final rule to specify ‘‘protective coatings’’ (as well as air conditioning units and protective clothing), is now sufficiently clear as to leave no doubt that it applies to paintings/coatings such as CARC. Consequently, the control language used in the June 17 (toxicological agents and directed energy weapons) rule has been retained in this final rule with only the above-referenced change (i.e., the E:\FR\FM\28JYR1.SGM 28JYR1 Lhorne on DSK30JT082PROD with RULES Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations revision of the parenthetical phrase in the introductory text of ECCN 1A607.f to read, as follows: ‘‘including air conditioning units, protective coatings, and protective clothing.’’ As for the scope of the license requirements that apply to CARC, all items in ECCN 1A607, including CARC, are subject to NS Column 1 and RS Column 1 license requirements, which apply to all destinations, except Canada. While the scope of the EAR license requirements on CARC is considerably broader than that maintained by some of our allies, exports of CARC are authorized without a license, under License Exception STA, for destinations in, or nationals of, Country Group A:5 in Supplement No. 1 to part 740 of the EAR, which currently contains 36 countries. Furthermore, the EAR requirements that apply to the CARC that were previously controlled under USML Category XIV and are now controlled under new ECCN 1A607.f represent a significant easing of the regulatory burden on exporters of such CARC through: (i) Elimination of some license requirements; (ii) greater availability of license exceptions; (iii) simpler license application procedures; and (iv) reduced or eliminated registration fees. With respect to the commenter’s recommendation that all CARC be placed under the export licensing jurisdiction of a single U.S. Government agency, BIS notes that the only CARC that continue to be controlled under USML Category XIV (specifically, in paragraph (f)(7) of USML Category XIV) are those that have been qualified to one of the following four military specifications: MIL–PRF– 32348, MIL–DTL–64159, MIL–C–46168, or MIL–DTL–53039. In light of the anticipated benefits of moving certain CARC from USML Category XIV to new ECCN 1A607 on the EAR’s CCL, as described above, there would appear to be little practical upside to continuing to control all CARC under the export licensing jurisdiction of a single U.S. Government agency. Comment: One commenter recommended that all items identified in USML Category XIV(f)(4) for individual protection against chemical and biological agents specified in USML Category XIV(a) or (b) should be controlled under new ECCN 1A607.f on the CCL. In addition, the commenter recommended that all individual protection ‘‘equipment’’ and clothing controlled under new ECCN 1A607.f should be authorized for export under License Exception BAG under special provisions similar to those currently applicable to ‘‘personal protective equipment’’ (i.e., ECCN 1A613.c or .d) VerDate Sep<11>2014 14:41 Jul 27, 2016 Jkt 238001 in accordance with Section 740.14(h) of the EAR. Response: USML Category XIV(f)(4), as set forth in the State Department’s companion rule to this final rule, controls equipment or items that offer individual or collective protection against items specified in USML Category XIV(a) or (b), as follows: (1) M53 Chemical Biological Protective Mask or M50 Joint Service General Purpose Mask (JSGPM); (2) filter cartridges containing sorbents controlled in USML Category XIV(f)(4)(iii); (3) ASZM–TEDA carbon; and (4) ensembles, garments, suits, jackets, pants, boots or socks for individual protection, and liners for collective protection, that allow no more than 1% breakthrough of GD, or no more than 2% breakthrough of any other chemical specified in USML Category XIV(a), when evaluated by executing the applicable method(s) of testing described in the current version of Test Operations Procedure (TOP) 08–2–201 (Collective Protection Novel Closures Testing) or 08–2–501 (Permeation Testing of Materials with Chemical Agents or Simulants—Swatch Testing) and using the defined DoD-specific requirements described therein. The control criteria in USML Category XIV(f)(4), as described above, are the result of a review of USML Category XIV, as part of the Administration’s Export Control Reform (ECR) Initiative, to ensure that it controls only those items that are inherently military, provide the United States with a critical military or intelligence advantage, or otherwise warrant control on the USML. In the absence of any compelling evidence contrary to the results of this review, no change is contemplated, with respect to these USML Category XIV criteria, at this time. New ECCN 1A607.f controls ‘‘equipment’’ previously controlled under USML Category XIV(f)(4) or (f)(5) that the President has determined no longer warrants control on the USML (i.e., protection ‘‘equipment,’’ including ‘‘equipment’’ for individual protection, not controlled by USML Category XIV(f) that is ‘‘specially designed’’ for military use and for defense against materials specified by USML XIV(a) or (b) or riot control agents controlled by ECCN 1C607.a). This final rule does not expand the scope of new ECCN 1A607.f to control all ‘‘equipment’’ for individual protection against chemical and biological agents specified in USML Category XIV(a) or (b), because this change would be contrary to the President’s determination, based on the results of the aforementioned review of USML Category XIV (i.e., it would result PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 49519 in the transfer to the CCL of items that are inherently military, provide the United States with a critical military or intelligence advantage, or otherwise warrant control on the USML). With respect to the commenter’s recommendation that all individual protection ‘‘equipment’’ and clothing controlled under new ECCN 1A607.f should be authorized for export under License Exception BAG (under special provisions similar to those currently applicable to ‘‘personal protective equipment’’), this final rule amends the License Exception BAG provisions in Section 740.14(h) of the EAR to authorize exports, reexports, or incountry transfers of chemical or biological agent protective gear consistent with the requirements and restrictions described therein. In a corresponding change, this final rule also amends the License Exception TMP provisions in Section 740.9(a)(11) of the EAR to authorize temporary exports, reexports, or in-country transfers of chemical or biological agent protective gear consistent with the requirements and restrictions described therein. These changes are also intended to make the scope of these license exceptions, as they apply to chemical or biological agent protective gear controlled under new ECCN 1A607.f, conform with the scope of the ITAR exemption for personal protective equipment in Section 123.17 of the ITAR. Comment: One commenter noted that neither BIS’s June 17 (toxicological agents and directed energy weapons) rule nor State’s companion proposed rule clearly indicated whether filter cartridges containing sorbents funded by the Department of Defense via contract or other funding authorization, as proposed to be controlled under USML Category XIV(n), would be controlled under new ECCN 1A607.f on the CCL or under USML Category XIV(f) or (n). In addition, the commenter noted that neither of these proposed rules clearly indicated whether filter cartridges that meet the requirements of specifications PRF–EA–2251 for the M61 filter cartridge, but do not contain ASZM–TEDA carbon, would be controlled under new ECCN 1A605.f or under USML Category XIV(f) or (n). Response: Neither of the observations made by the commenter requires any modification to new ECCN 1A607.f. Filter cartridges containing developmental sorbents are controlled under USML Category XIV(f)(4)(ii) if the sorbents were funded by the Department of Defense via contract or other funding authorization, as specified in USML Category XIV(n), and none of the E:\FR\FM\28JYR1.SGM 28JYR1 49520 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations Lhorne on DSK30JT082PROD with RULES elements in Note 1 to paragraph (n) apply (i.e., the sorbents are determined to be subject to the EAR via a commodity jurisdiction determination or they are identified in the relevant Department of Defense contract or other funding authorization as being developed for both civil and military applications). The commenter’s question concerning the export licensing jurisdiction status of filter cartridges reflects the fact that State’s companion Category XIV/XVIII proposed rule did not specifically enumerate (in Category XIV) filter cartridges containing sorbents controlled under USML Category XIV(n). USML Category XIV(f)(ii), in State’s proposed rule, specified that it controlled filter cartridges containing sorbents controlled under USML Category XIV(f)(iii), but the control status of filter cartridges containing sorbents enumerated in proposed USML Category XIV(n) was not specifically indicated. Consequently, State’s companion Category XIV/XVIII final rule corrects this oversight by clarifying USML Category XIV to indicate that it applies to filter cartridges that contain any of the sorbents specified under USML Category XIV(f)(iii) or (n) and, in so doing, eliminates the possibility that such filter cartridges could be controlled under new ECCN 1A607.f on the CCL (except to the limited extent that sorbents funded by the Department of Defense via contract or other funding authorization are excluded from USML Category XIV(n) for a specified period of time, as indicated in Note 3 thereto). In response to the commenter’s request for clarification concerning controls on filter cartridges that meet the requirements of specifications PRF– EA–2251 for the M61 filter cartridge, but do not contain ASZM–TEDA carbon, their control status also would depend upon the sorbents that they contain. As indicated above, filter cartridges that contain any of the sorbents controlled by USML Category XIV (i.e., sorbents specified under paragraph (f)(iii) or (n) of Category XIV) are controlled under USML Category XIV. Otherwise, they are controlled under new ECCN 1A607.f. ECCN 1A607.h (Detection/ Identification ‘‘Equipment’’) Comment: One commenter interpreted BIS’s June 17 (toxicological agents and directed energy weapons) rule and State’s companion USML Category XIV/XVIII proposed rule as transferring to new ECCN 1A607.h on the CCL all detection equipment, previously controlled under USML Category XIV(f)(2), that is ‘‘specially VerDate Sep<11>2014 14:41 Jul 27, 2016 Jkt 238001 designed’’ for military use for the detection of agents identified in proposed USML Category XIV(a) or (b), except for: (1) Detection equipment that is classified or that relates to classified information; and (2) military detection equipment developed under a DoD contract or other funding authorization, as described in proposed USML Category XIV(f)(2) and subject to the restriction in Note 3 thereto, which indicated that the controls in paragraph (f)(2) would apply only to controls dated one year (or later) after the date of publication of State’s USML Category XIV final rule. Note 3 to paragraph (f)(2) was mistakenly included in USML Category XIV, as described in State’s proposed rule; consequently, it does not appear in State’s final rule. Response: New ECCN 1A607.h controls ‘‘equipment’’ not controlled by USML Category XIV(f) that is ‘‘specially designed’’ for military use and for the detection or identification of materials specified by USML Category XIV(a) or (b) or riot control agents controlled by ECCN 1C607.a on the CCL. Because new ECCN 1A607.h indicates that it does not include any detection equipment that is controlled by USML Category XIV(f), the scope of the ECCN is necessarily dependent upon the scope of Category XIV(f), which, in turn, is subject to interpretation by the U.S. Department of State. Therefore, the Department of State, and not BIS, is the appropriate U.S. Government agency to confirm whether the commenter’s statement is correct (in whole or in part), as it applies to the scope of new ECCN 1A607.h and the ‘‘equipment’’ previously controlled under USML Category XIV(f)(2). Consequently, this question should be addressed, with respect to specific detection ‘‘equipment,’’ through the submission of one or more commodity jurisdiction (CJ) requests to the State Department’s Directorate of Defense Trade Controls (DDTC), consistent with the requirements in the ITAR. ECCN 1A607.k (Medical Countermeasures) Comment: One commenter noted that items controlled under proposed new ECCN 1A607.k (military medical countermeasures ‘‘equipment’’), and related ‘‘technology’’ controlled under proposed new ECCN 1E607.a, would not be eligible for export/reexport under the License Exception GOV provisions in Section 740.11(d), International Inspections under the Chemical Weapons Convention (CWC), to destinations located outside of Country Group A:5 in Supplement No. 1 to part 740 of the EAR. PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 Response: The commenter is correct in noting that ‘‘equipment’’ in new ECCN 1A607.k and related ‘‘technology’’ in new ECCN 1E607.a are not eligible for export under the License Exception GOV provisions in Section 740.11(d) of the EAR, except to destinations located in Country Group A:5. This restriction, which is described in Section 740.11(d)(2)(iii) of the EAR, was implemented as part of BIS’s April 16 (initial implementation) rule in which the License Exception GOV provisions in Section 740.11 of the EAR were revised. Among the License Exception GOV provisions that were affected by these revisions were those authorizing exports and reexports to the Organization for the Prohibition of Chemical Weapons (OPCW) and exports and reexports by the OPCW for official international inspection and verification use under the terms of the CWC. Under the OPCW authorization, as revised, Section 740.11(d)(2)(iii) of the EAR prohibits exports and reexports of items controlled under ‘‘600 series’’ ECCNs on the CCL to countries not listed in Country Group A:5. Country Group A:5 currently consists of 36 countries, as established by BIS’s April 16 (initial implementation) rule, which became effective on October 15, 2013. The scope of the OPCW authorization in License Exception GOV was the result of extensive U.S. Government interagency review and discussion. Furthermore, the scope of eligible countries for the OPCW authorization (i.e., 36 countries), as established by BIS’s April 16 (initial implementation) rule, was initially broader than the country scope that was authorized under the License Exception GOV provisions for cooperating governments, as described in Section 740.11(c) of the EAR, which then authorized exports and reexports to 27 cooperating governments and agencies of the North Atlantic Treaty Organization (NATO). The country scope of the cooperating governments authorization under License Exception GOV was subsequently expanded, by BIS’s Wassenaar Arrangement (WA) 2014 Plenary final rule (98 FR 29432, May 21, 2015), to include 41 cooperating governments and agencies of NATO. Currently, the country scope of the cooperating governments and OPCW authorizations under License Exception GOV are roughly equivalent (i.e., the former applies to four more countries than the latter—two of those countries are CWC States Parties and one is a special administrative region of a State Party). In light of the recent changes to the License Exception GOV provisions described above, BIS does E:\FR\FM\28JYR1.SGM 28JYR1 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations not have any immediate plans to address possible revisions to the country scope of the OPCW authorization. BIS also considers any such action to be outside the scope of this rulemaking, which does not specifically address EAR requirements involving the CWC and the OPCW. Lhorne on DSK30JT082PROD with RULES ECCN 1A607.x (‘‘Parts,’’ ‘‘Components,’’ ‘‘Accessories,’’ and ‘‘Attachments’’) Comment: One commenter noted that proposed new ECCN 1A607.x indicated that it controlled ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ ‘‘specially designed’’ for the ‘‘equipment’’ described in proposed ECCN 1A607.e, .f, .g, or .j. However, the commenter also noted that ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ ‘‘specially designed’’ for the detection/identification ‘‘equipment’’ described in proposed ECCN 1A607.h were not included in proposed ECCN 1A607.x. As a result, the commenter questioned whether any ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ ‘‘specially designed’’ for detection/identification ‘‘equipment’’ that might be removed from the USML, as a result of the proposed revisions to USML Category XIV(f), would be controlled under proposed new ECCN 1A607 on the CCL (e.g., under proposed ECCN 1A607.x). Response: The commenter is correct in noting that proposed new ECCN 1A607.x specified only those ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ ‘‘specially designed’’ for the ‘‘equipment’’ described in ECCN 1A607.e, .f, .g, or .j, and not those ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ ‘‘specially designed’’ for detection/identification ‘‘equipment’’ described in ECCN 1A607.h. This final rule corrects that oversight. New ECCN 1A607.x, as added to the CCL by this final rule, indicates that it controls ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ that are ‘‘specially designed’’ for a commodity controlled by ECCN 1A607.e, .f, .g, .h, or .j or for a defense article controlled by USML Category XIV(f) and that are not enumerated or otherwise described elsewhere in the USML. General Comments on Dissemination, Detection and Protection ‘‘Equipment’’ Comment: One commenter noted that the BIS and State Category XIV/XVIII proposed rules omitted coverage of the Wassenaar Munitions List (WAML) items in WAML 7.a (Biological agents or radioactive materials adapted for use in war to produce casualties in humans VerDate Sep<11>2014 14:41 Jul 27, 2016 Jkt 238001 and animals, degrade equipment, or damage crops or the environment). Response: The items noted by the commenter are not identified in any of the new ‘‘600 series’’ ECCNs described in BIS’s June 17 (toxicological agents and directed energy weapons) rule, but they are clearly enumerated under USML Category XIV in State’s companion proposed rule. Proposed USML Category XIV(b)(1)(ii) identifies specific biological agents that have been militarized, as described in USML Category XIV(b)(1)(i), and proposed USML Category XIV(b)(2) describes biological agents identified under ECCN 1C351, 1C353, or 1C354 on the EAR’s CCL that have been militarized, as described in USML Category XIV(b)(2)(i) and (b)(2)(ii). These defense articles are identified in the USML Category XIV amendments contained in State’s companion rule to this final rule. Comment: One commenter noted that the following two Australia Group (AG) controlled items were not identified in either the BIS or State Category XIV/ XVIII proposed rules: (1) Valves with a closure element designed to be interchangeable, as listed under 6.b on the AG Control List of Dual-Use Chemical Manufacturing Facilities and Equipment); and (2) noseonly exposure apparatus, as listed under 8.b on the AG Control List of Dual-Use Biological Equipment. Response: The commenter accurately noted that neither of the two items were identified in the BIS and State Category XIV/XVIII proposed rules. However, because these items are identified as dual-use items on the AG common control lists indicated above, neither item is within the scope of this rulemaking. The valves, described under 6.b on the AG chemical manufacturing facilities and equipment control list, are currently controlled under ECCN 2B350.g.2 on the CCL. The nose-only exposure apparatus, described under 8.b on the AG biological equipment common control list, was recently added to this AG control list and is currently controlled under ECCN 2B352.h based on a recent update of AG listed items on the CCL (see 81 FR 36458, June 7, 2016). Comment: One commenter indicated that some of the proposed new ‘‘600 series’’ ECCNs in BIS’s June 17 (toxicological agents and directed energy weapons) rule maintained unilateral controls on certain items that were proposed to be transferred to the CCL from USML Category XIV. Response: All the items described in the new ‘‘600 series’’ ECCNs created by this final rule were previously controlled on the USML under the ITAR PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 49521 and were added to these new ECCNs on the CCL only after the President determined that these items no longer warrant control on the USML for the reasons set forth above. Changes Made by This Rule to Controls on Certain Dissemination, Detection and Protection ‘‘Equipment’’ and Related Items Previously Controlled Under USML Category XIV This final rule creates five new ‘‘600 series’’ ECCNs in CCL Category 1 (ECCNs 1A607, 1B607, 1C607, 1D607, and 1E607) that clarify the EAR controls applicable to certain dissemination, detection and protection ‘‘equipment’’ and related items that the President has determined no longer warrant control under USML Category XIV. Terms such as ‘‘part,’’ ‘‘component’’ ‘‘accessories,’’ ‘‘attachments,’’ and ‘‘specially designed’’ are applied in the same manner in this rule as those terms are defined in Section 772.1 of the EAR. In addition, to assist exporters in determining the control status of their items, a ‘‘Specially Designed’’ Decision Tool and a CCL Order of Review Decision Tool are available on the BIS Web site at: http://www.bis.doc.gov/ index.php/decision-tree-tools. New ECCN 1A607 Military dissemination ‘‘equipment’’ for riot control agents, military detection and protection ‘‘equipment’’ for toxicological agents (including chemical, biological, and riot control agents), and related commodities. In new ECCN 1A607, paragraphs .a through .d, paragraph .i, and paragraphs .l through .w are reserved. Paragraph .e of ECCN 1A607 controls ‘‘equipment’’ ‘‘specially designed’’ for military use and for the dissemination of any of the riot control agents controlled in ECCN 1C607.a. Paragraph .f of ECCN 1A607 controls protection ‘‘equipment’’ ‘‘specially designed’’ for military use and for defense against either materials controlled by USML Category XIV(a) or (b) or any of the riot control agents in new ECCN 1C607.a. Paragraph .g of ECCN 1A607 controls decontamination ‘‘equipment’’ not controlled by USML Category XIV(f) that is ‘‘specially designed’’ for military use and for the decontamination of objects contaminated with materials controlled by USML Category XIV(a) or (b). Paragraph .h controls ‘‘equipment’’ not controlled by USML Category XIV(f) that is ‘‘specially designed’’ for military use and for the detection or identification of either materials specified by USML Category XIV(a) or (b) or riot control agents controlled by new ECCN 1C607.a. Paragraph .j controls ‘‘equipment’’ ‘‘specially E:\FR\FM\28JYR1.SGM 28JYR1 49522 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations ‘‘specially designed’’ for testing the articles controlled in paragraph (a), (b), (c), (e), or (f)(4) of USML Category XIV). In addition to the test facilities and ‘‘equipment’’ controlled by ECCN 1B607.b, see the tooling and ‘‘equipment’’ classified under ECCN 2B350 or 2B352 for producing the chemical/biological agents, precursors, or defoliants described in USML Category XIV(a), (b), (c), or (e). The EAR also control tooling and ‘‘equipment’’ to produce the antibodies/polynucleotides and vaccines described in USML Category XIV(g) and (h), respectively, as follows: lab ‘‘equipment’’ designated as EAR99 under the EAR; biological dualuse ‘‘equipment’’ (including protective ‘‘equipment’’) classified under ECCN 2B352; and EAR-controlled biological systems for making vaccines (involving the use of mice, rabbits, etc.). New ECCN 1B607 Military test, inspection, and production ‘‘equipment’’ and related commodities ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ repair, overhaul, or refurbishing of commodities identified in ECCN 1A607 or 1C607, or defense articles enumerated or otherwise described in USML Category XIV. Lhorne on DSK30JT082PROD with RULES designed’’ to: (i) Interface with a detector, shelter, vehicle, vessel, or aircraft controlled by the USML or a ‘‘600 series’’ ECCN; and (ii) collect and process samples of articles controlled in USML Category XIV(a) or (b). Paragraph .k controls medical countermeasures that are ‘‘specially designed’’ for military use (including pre- and posttreatments, antidotes, and medical diagnostics) and ‘‘specially designed’’ to counter chemical agents controlled by USML Category XIV(a). Paragraph .x controls ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ that are ‘‘specially designed’’ for a commodity controlled under ECCN 1A607.e, .f, .g, .h, or .j or a defense article controlled in USML Category XIV(f) and that are not enumerated or otherwise described elsewhere in the USML. New ECCN 1C607 Tear gases, riot control agents and materials for the detection and decontamination of chemical warfare agents. In new ECCN 1B607, paragraph .a controls ‘‘equipment,’’ not including incinerators, that is ‘‘specially designed’’ for the destruction of chemical agents controlled by USML Category XIV(a). Paragraph .b of ECCN 1B607 controls test facilities and ‘‘equipment’’ that are ‘‘specially designed’’ for military certification, qualification, or testing of commodities controlled by new ECCN 1A607.e, .f, .g, .h, or .j or by USML Category XIV(f), except for XIV(f)(1). Paragraph .c of ECCN 1B607 controls tooling and ‘‘equipment’’ ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ repair, overhaul, or refurbishing of commodities controlled under new ECCN 1A607.e, .f, .g, .h, or .j or USML Category XIV(f). Paragraphs .d through .w are reserved. Paragraph .x controls ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments,’’ not enumerated or otherwise described elsewhere in the USML, that are ‘‘specially designed’’ for a commodity controlled by ECCN 1B607.b or .c or for a defense article controlled by USML Category XIV(f). As indicated above, ECCN 1B607.b does not control test facilities and ‘‘equipment’’ that are ‘‘specially designed’’ for military certification, qualification, or testing of commodities and are enumerated or otherwise described in USML Category XIV(f)(1), as set forth in State’s companion rule to this final rule (e.g., see the equipment in USML Category XIV(f)(1)(ii) that is VerDate Sep<11>2014 14:41 Jul 27, 2016 Jkt 238001 New ECCN 1C607.a controls specified tear gases and riot control agents. Paragraph .b of ECCN 1C607 controls ‘‘biopolymers’’ not controlled by USML Category XIV(g) that are ‘‘specially designed’’ or processed for the detection or identification of chemical warfare (CW) agents specified by USML Category XIV(a) and the cultures of specific cells used to produce them. Paragraph .c controls specified ‘‘biocatalysts’’ and biological systems that are not controlled by USML Category XIV(g) and are ‘‘specially designed’’ for the decontamination or degradation of CW agents specified by USML Category XIV(a). Paragraph .d controls chemical mixtures not controlled by USML Category XIV(f) that are ‘‘specially designed’’ for military use for the decontamination of objects contaminated with materials specified by USML Category XIV(a) or (b). New ECCN 1D607 ‘‘Software’’ ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ operation, or maintenance of items controlled by 1A607, 1B607 or 1C607. New ECCN 1D607.a controls ‘‘software’’ ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ operation, or maintenance of items controlled by ECCN 1A607, 1B607 or 1C607. Paragraph .b of ECCN 1D607 is reserved. New ECCN 1E607 ‘‘Technology’’ ‘‘required’’ for the ‘‘development,’’ ‘‘production,’’ operation, installation, maintenance, repair, overhaul, or refurbishing of items controlled by ECCN 1A607, 1B607, 1C607, or 1D607. PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 New ECCN 1E607.a controls ‘‘technology’’ ‘‘required’’ for the ‘‘development,’’ ‘‘production,’’ operation, installation, maintenance, repair, overhaul, or refurbishing of items controlled by ECCN 1A607, 1B607, 1C607, or 1D607. Paragraph .b of ECCN 1E607 is reserved. Amendments to License Exceptions BAG and TMP related to Individual Protection ‘‘Equipment’’ in ECCN 1A607.f. In response to public comments recommending that all individual protection ‘‘equipment’’ and clothing controlled under new ECCN 1A607.f should be authorized for export under License Exception BAG (under special provisions similar to those currently applicable to ‘‘personal protective equipment’’), this final rule amends the License Exception BAG provisions in Section 740.14(h) of the EAR to authorize exports, reexports, or incountry transfers of chemical or biological agent protective gear consistent with the requirements and restrictions described therein. In a corresponding change, this final rule also amends the License Exception TMP provisions in Section 740.9(a)(11) of the EAR to authorize temporary exports, reexports, or in-country transfers of chemical or biological agent protective gear consistent with the requirements and restrictions described therein. The amendments to License Exceptions BAG and TMP also change the requirements for Afghanistan to be consistent with those of the majority of other Country Group D:5 destinations (i.e., the U.S. person authorized to use the license exception must be affiliated with the U.S. Government and be traveling on official business or traveling in support of a U.S. Government contract). The same requirement applies to the use of these license exception provisions for Iraq, also a D:5 country, with the additional option that the U.S. person must be traveling to Iraq under a direct authorization by the Government of Iraq and engaging in activities for, on behalf of, or at the request of, the Government of Iraq. These amendments are also intended to ensure that the scope of these license exceptions, as they apply to chemical or biological agent protective gear controlled under new ECCN 1A607.f, conforms with the scope of the ITAR exemption for personal protective equipment in Section 123.17 of the ITAR (e.g., by correcting the provisions for Afghanistan, as described above, to be consistent with those of the majority of other Country Group D:5 destinations). E:\FR\FM\28JYR1.SGM 28JYR1 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations Tooling, Production ‘‘Equipment,’’ Test and Evaluation ‘‘Equipment,’’ Test Models and Other Articles Related to Directed Energy Weapons Public Comments and BIS Responses BIS received comments from two parties in response to the proposed amendments in the June 17 (toxicological agents and directed energy weapons) rule related to tooling, production ‘‘equipment,’’ test, and evaluation ‘‘equipment,’’ test models and other articles related to directed energy weapons. Lhorne on DSK30JT082PROD with RULES General Comments on Items Related to Directed Energy Weapons Comment: One commenter noted that the BIS and State Category XIV/XVIII proposed rules omitted coverage of the Wassenaar Munitions List (WAML) items in WAML 19.f (‘‘Laser’’ systems ‘‘specially designed’’ to cause permanent blindness to unenhanced vision). Response: The items noted by the commenter are not identified in any of the new ‘‘600 series’’ ECCNs described in BIS’s June 17 (toxicological agents and directed energy weapons) rule, but they are clearly enumerated under USML Category XVIII in State’s companion proposed rule. Proposed USML Category XVIII(a) identifies directed energy weapons (DEW) systems or ‘‘equipment’’ that, as their sole or primary purpose, cause permanent or flash blindness. These articles are identified in the USML Category XVIII amendments contained in State’s companion rule to this final rule. Comment: One commenter indicated that some of the proposed new ‘‘600 series’’ ECCNs in BIS’s June 17 (toxicological agents and directed energy weapons) rule maintained unilateral controls on certain items that were proposed to be transferred to the CCL from the USML Category XVIII. Response: All the items described in the new ‘‘600 series’’ ECCNs created by this final rule were previously controlled on the USML under the ITAR and were added to these new ECCNs on the CCL only after the President determined that these items no longer warrant control on the USML for the reasons set forth above. Changes Made by This Rule to Controls on Certain Tooling, Production ‘‘Equipment,’’ Test and Evaluation ‘‘Equipment’’ and Test Models Previously Controlled Under USML Category XVIII This rule creates three new ‘‘600 series’’ ECCNs in CCL Category 6 (ECCNs 6B619, 6D619 and 6E619) that VerDate Sep<11>2014 14:41 Jul 27, 2016 Jkt 238001 clarify the EAR controls applicable to certain tooling, production ‘‘equipment,’’ test and evaluation ‘‘equipment,’’ test models, and related articles for Directed Energy Weapons (DEWs) that the President has determined no longer warrant control under USML Category XVIII. Terms such as ‘‘part,’’ ‘‘component’’ ‘‘accessories,’’ ‘‘attachments,’’ and ‘‘specially designed’’ are applied in the same manner in this rule as those terms are defined in Section 772.1 of the EAR. In addition, to assist exporters in determining the control status of their items, a ‘‘Specially Designed’’ Decision Tool and a CCL Order of Review Decision Tool are available on the BIS Web site at: http://www.bis.doc.gov/ index.php/decision-tree-tools. New ECCN 6B619 Test, inspection and production ‘‘equipment,’’ and related commodities, ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ repair, overhaul, or refurbishing of commodities enumerated or otherwise described in USML Category XVIII. New ECCN 6B619.a controls tooling, templates, jigs, mandrels, molds, dies, fixtures, alignment mechanisms, and test ‘‘equipment’’ not enumerated or otherwise described in USML Category XVIII and not elsewhere specified on the USML that are ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ repair, overhaul, or refurbishing of commodities controlled by USML Category XVIII. The commodities that are controlled under new ECCN 6B619.a are used to produce directed energy weapons (including non-lethal directed energy weapons, such as active denial systems) and are similar to commodities that are in operation in a number of other countries, some of which are not allies of the United States or members of multinational export control regimes. Research and development is currently underway to determine the possible uses of such commodities (e.g., to protect the Earth from asteroids, or for perimeter security and crowd control). Possession of such commodities does not confer a significant military advantage on the United States and, therefore, the inclusion of such commodities on the CCL would be appropriate. Paragraphs .b through .w of ECCN 6B619 are reserved. Paragraph .x controls ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ ‘‘specially designed’’ for a commodity subject to control under paragraph .a of this ECCN and not enumerated or otherwise described in USML Category XVIII and not elsewhere specified on the USML. PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 49523 New ECCN 6D619 ‘‘Software’’ ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ operation or maintenance of commodities controlled by 6B619. New ECCN 6D619 controls ‘‘software’’ ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ operation or maintenance of commodities controlled by ECCN 6B619. Inclusion of this ‘‘software’’ on the CCL is appropriate, because it is limited to ‘‘software’’ ‘‘specially designed’’ for ECCN 6B619 commodities and does not include any ‘‘software’’ for items specifically enumerated or otherwise described on the USML. New ECCN 6E619 ‘‘Technology’’ ‘‘required’’ for the ‘‘development,’’ ‘‘production,’’ operation, installation, maintenance, repair, overhaul or refurbishing of commodities controlled by 6B619 or ‘‘software’’ controlled by 6D619. New ECCN 6E619 controls ‘‘technology’’ ‘‘required’’ for the ‘‘development,’’ ‘‘production,’’ operation, installation, maintenance, repair, overhaul or refurbishing of commodities controlled by ECCN 6B619, or ‘‘software’’ controlled by 6D619. Inclusion of this ‘‘technology’’ on the CCL is appropriate, because it is limited to ‘‘technology’’ ‘‘required’’ for ECCN 6B619 commodities and does not include any ‘‘technology’’ for items specifically enumerated or otherwise described on the USML. Applicable Controls for the New ‘‘600 Series’’ ECCNs Created by This Rule Pursuant to the framework established in the April 16 (initial implementation) rule, detection and protection ‘‘equipment’’ and related commodities classified under ECCN 1A607; related test, inspection and production ‘‘equipment’’ classified under ECCN 1B607; tear gases, riot control agents and related commodities classified under ECCN 1C607 (except for items listed in ECCN 1C607.a.10, .a.11, .a.12, or a.14, all of which are specifically excluded from WAML Category 7 by Note 1 thereto); related ‘‘software’’ classified under ECCN 1D607 (except ‘‘software’’ for items listed in ECCN 1C607.a.10, .a.11, .a.12, or a.14); and related ‘‘technology’’ classified under ECCN 1E607 (except ‘‘technology’’ for items listed in ECCN 1C607.a.10, .a.11, .a.12, or a.14 and 1D607 ‘‘software’’ therefor) are subject to the licensing policies that apply to items controlled for national security (NS) reasons, as described in § 742.4(b)(1)—specifically, NS Column 1 controls. The same level of NS controls and licensing policies also apply to the directed energy weapons items that are controlled under the three new ECCNs (i.e., test, E:\FR\FM\28JYR1.SGM 28JYR1 49524 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations inspection, and production ‘‘equipment’’ classified under ECCN 6B619; related ‘‘software’’ classified under ECCN 6D619; and related ‘‘technology’’ classified under ECCN 6E619) that this rule adds to Category 6 of the CCL. In addition, all the items that are controlled under the new ECCNs created by this rule are subject to the regional stability (RS) licensing policies set forth in § 742.6(a)(1), i.e., RS Column 1, as well as antiterrorism (AT Column 1) and United Nations (UN) controls. Also, in accordance with §§ 742.4(b)(1) and 742.6(b)(1) of the EAR, exports and reexports of ‘‘600 series’’ items controlled for NS or RS reasons will be reviewed consistent with United States arms embargo policies in § 126.1 of the ITAR, if destined to a country listed in Country Group D:5 of Supplement No. 1 to part 740 of the EAR. All items controlled for NS or RS reasons, as set forth in this final rule, are subject to this licensing policy. Lhorne on DSK30JT082PROD with RULES Effects of This Final Rule BIS believes that the principal effect of this final rule, when considered in the context of similar rules being published as part of the ECR, will be to provide greater flexibility for exports and reexports to NATO member countries and other multiple-regimemember countries of items the President determines no longer warrant control on the USML. This greater flexibility is in the form of: the application of the EAR’s de minimis threshold principle for items constituting less than a de minimis amount of controlled U.S.-origin content in foreign made items; the availability of license exceptions, particularly License Exceptions ‘‘Servicing and Replacement of Parts and Equipment’’ (RPL) and ‘‘Strategic Trade Authorization’’ (STA); the elimination of requirements for manufacturing license agreements and technical assistance agreements in connection with exports of technology; and a reduction in, or the elimination of, exporter and manufacturer registration requirements and associated registration fees. Some of these specific effects are discussed in more detail, below. De Minimis The April 16 (initial implementation) rule imposed certain unique de minimis requirements on items controlled under the new ‘‘600 series’’ ECCNs. Section 734.3 of the EAR provides, inter alia, that, under certain conditions, items made outside the United States that incorporate items subject to the EAR are not subject to the EAR if they do not VerDate Sep<11>2014 14:41 Jul 27, 2016 Jkt 238001 exceed a ‘‘de minimis’’ percentage of controlled U.S. origin content. Under Section 734.4 of the EAR, as amended by the April 16 (initial implementation) rule, there is no eligibility for de minimis treatment for a foreign-made item that incorporates U.S.-origin ‘‘600 series’’ items when the foreign-made item is destined for a country that is subject to a U.S. arms embargo, i.e., a country listed in Country Group D:5 of Supplement No. 1 to part 740 of the EAR. Items controlled under the new ‘‘600 series’’ ECCNs created by this rule are eligible for de minimis treatment under the EAR, provided that the foreign-made items into which they are incorporated are not destined for a country listed in Country Group D:5. In contrast, the AECA does not permit the ITAR to have a de minimis treatment for USML-listed items, regardless of the significance or insignificance of the U.S.-origin content or the percentage of U.S.-origin content in the foreign-made item (i.e., USML-listed items remain subject to the ITAR when they are incorporated abroad into a foreign-made item, regardless of either of these factors). Use of License Exceptions The April 16 (initial implementation) rule imposed certain restrictions on the use of license exceptions for items controlled under ‘‘600 series’’ ECCNs on the CCL. The general restrictions that apply to the use of license exceptions for such items are described in § 740.2(a)(13) of the EAR. The EAR provisions that describe the requirements specific to individual license exceptions contain additional restrictions on the use of license exceptions for such items. For example, this rule authorizes limited License Exception STA availability for the new ‘‘600 series’’ ECCNs contained herein. None of the items controlled under these new ECCNs are eligible for the STA ‘‘controls of lesser sensitivity’’ described in § 740.20(c)(2) of the EAR. Instead, STA eligibility for all such items is limited to the destinations listed in § 740.20(c)(1) of the EAR (i.e., Country Group A:5 destinations indicated in Supplement No. 1 to part 740 of the EAR). In addition, such items must be for: (1) ultimate end-use by a person of a type specified in § 740.20(b)(3)(ii) of the EAR (i.e., the armed forces, police, paramilitary, law enforcement, customs, correctional, fire, or a search and rescue agency of a government of one of the countries listed in Country Group A:5 or the United States Government); or (2) the ‘‘development,’’ ‘‘production,’’ operation installation, maintenance, PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 repair, overhaul, or refurbishing of an item, in one of the countries listed in Country Group A:5 or the United States, that will ultimately be used by any such government agencies, the United States Government, or by a person in the United States. The use of License Exception STA also may be authorized, under certain circumstances described in § 740.20(b)(3)(ii)(C), where the U.S. Government has otherwise authorized the ultimate end-use under a license. None of the items controlled under the new ‘‘600 series’’ ECCNs created by this rule are treated as ‘‘end items’’ for purposes of License Exception STA and, therefore, such items are not subject to the License Exception STA eligibility request requirements in § 740.20(g) of the EAR. Items controlled under new ECCN 1B607 or 6B619 are also eligible for License Exception LVS (limited value shipments) up to a value of $1,500, TMP (temporary exports), and RPL (servicing and replacement parts). License Exceptions TMP and RPL also are available for items controlled under new ECCN 1A607. In addition, special provisions in License Exception TMP (see § 740.9(a)(11) of the EAR) and License Exception BAG (baggage) (see § 740.14(h) of the EAR), as amended by this final rule, authorize exports, reexports, or in-country transfers of certain protection ‘‘equipment’’ described in ECCN 1A607.f. BIS believes that the restrictions that apply to the use of license exceptions for the items in the new ‘‘600 series’’ ECCNs represents an overall reduction from the level of restrictions that previously applied to such items on the USML. This is particularly true with respect to exports of such items to NATO members and multiple-regime member countries. Alignment With the Wassenaar Arrangement Munitions List Since the beginning of ECR, the Administration has stated that the reforms will be consistent with the United States’ obligations to the multilateral export control regimes. Accordingly, the Administration has, in this final rule, exercised its national discretion to implement, clarify, and, to the extent feasible, align its controls with those of the regimes. In this rule, new ECCNs 1A607 and 1C607 implement, to the extent possible, the controls in WAML Category 7; new ECCNs 1B607 and 6B619 implement, to the extent possible, the controls in WAML Category 18 for production ‘‘equipment;’’ new ECCNs 1D607 and 6D619 implement, to the extent possible, the controls in WAML E:\FR\FM\28JYR1.SGM 28JYR1 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations Category 21 for ‘‘software;’’ and new ECCNs 1E607 and 6E619 implement, to the extent possible, the controls in WAML Category 22 for ‘‘technology.’’ Lhorne on DSK30JT082PROD with RULES 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 (Aug. 11, 2015), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.). 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 designated a ‘‘significant regulatory action,’’ although not economically significant, under Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget (OMB). 2. Notwithstanding any other provision of law, no person is required to respond to, nor is any person 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 final rule affects the following approved collections: Simplified Network Application Processing System (control number 0694–0088), which includes, among other things, license applications; License Exceptions and Exclusions (0694–0137); recordkeeping (0694–0096); export clearance (0694– 0122); and the Automated Export System (0607–0152). The discussion, below, is intended to provide a general overview of possible burden changes as VerDate Sep<11>2014 14:41 Jul 27, 2016 Jkt 238001 a result of all the ECR rules published by BIS, and not just this final rule, which affects items previously controlled under USML Category XIV or XVIII. No changes in burden for any of these collections is anticipated at this time, other than as indicated in the discussion, below. As stated in the proposed rule published on July 15, 2011 (76 FR 41958) (the ‘‘July 15 proposed rule’’), BIS initially estimated that the combined effect of all rules to be published, adding items to the EAR that would be removed from the ITAR as part of the Administration’s Export Control Reform Initiative, would increase the number of license applications to be submitted to BIS by approximately 16,000 annually, resulting in an increase in burden hours of 5,067 (16,000 transactions at 17 minutes each) under control number 0694–0088. As the review of the USML has progressed, the interagency group has gained more specific information about the number of items that would come under BIS jurisdiction and whether those items would be eligible for export under license exception. As of June 21, 2012, BIS revised its estimate to reflect an increase in license applications of 30,000 annually, resulting in an increase in burden hours of 8,500 (30,000 transactions at 17 minutes each) under control number 0694–0088. BIS continues to believe that its revised estimate is accurate. Notwithstanding this increase in license applications under the EAR, the net burden that U.S. export controls impose on U.S. exporters is expected to go down, as described below, as a result of the transfer of less sensitive military items to the jurisdiction of the Department of Commerce, under the EAR, and the application of the license exceptions and other provisions in the EAR that are described in this final rule. As implemented by this rule, certain dissemination, detection and protection ‘‘equipment’’ and related articles currently controlled under USML Category XIV in the ITAR and certain tooling, production ‘‘equipment,’’ test and evaluation ‘‘equipment,’’ test models and related articles currently controlled under USML Category XVIII of the ITAR are now subject to the licensing jurisdiction of the Department of Commerce under the EAR and its CCL, and also are eligible for certain license exceptions, including License Exception STA. For example, items controlled under new ECCN 1A607, 1B607, 1C607, 1D607, 1E607, 6B619, 6D619, or 6E619 are now eligible under certain provisions of License Exception STA and do not need a determination of PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 49525 eligibility as described in § 740.20(g) of the EAR. BIS believes that the increased use of License Exception STA resulting from the combined effect of all rules to be published, adding items to the EAR that would be removed from the ITAR as part of the Administration’s Export Control Reform Initiative, would increase the burden associated with control number 0694–0137 by about 23,858 hours (20,450 transactions at 1 hour and 10 minutes each). BIS expects that this increase in burden hours under the EAR will be more than offset by a reduction in the burden hours associated with currently approved collections related to the ITAR. With few exceptions, most exports of the dissemination, detection and protection ‘‘equipment’’ and related articles and the tooling, production ‘‘equipment,’’ test and evaluation ‘‘equipment,’’ test models and related articles that this rule adds to the CCL previously required State Department authorization, even when destined to NATO member states and other close allies. In addition, the exports of ‘‘technology’’ necessary to produce such items in the inventories of the United States and its NATO and other close allies previously required State Department authorization. Under the EAR, as implemented by this rule, such ‘‘technology’’ is now eligible for export to NATO member states and other close allies under License Exception STA, unless otherwise specifically excluded. The anticipated reduction in burden hours will particularly impact exporters of ‘‘parts’’ and ‘‘components’’ that are no longer be subject to the ITAR, because, with few exceptions, the ITAR exempt from license requirements only exports to Canada. Most exports of such ‘‘parts’’ and ‘‘components,’’ even when destined to NATO and other close allies, previously required State Department authorization. Under the EAR, as implemented by this rule, a small number of low-level ‘‘parts’’ and ‘‘components’’ do not require a license to most destinations, while most other ‘‘parts’’ and ‘‘components’’ identified under the new ‘‘600 series’’ ECCNs are eligible for export to NATO and other close allies under License Exception STA. Use of License Exception STA imposes a paperwork and compliance burden because, for example, exporters must furnish information about the item that is being exported to the consignee and obtain from the consignee an acknowledgement and commitment to comply with the requirements of the EAR. However, the Administration believes that complying with the requirements of STA is likely to be less E:\FR\FM\28JYR1.SGM 28JYR1 49526 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations Lhorne on DSK30JT082PROD with RULES burdensome than applying for licenses. For example, under License Exception STA, a single consignee statement can apply to an unlimited number of products, need not have an expiration date and need not be submitted to the government in advance for approval. Suppliers with regular customers can tailor a single statement and assurance to match their business relationship, rather than applying repeatedly for licenses with every purchase order, to supply allied and, in some cases, U.S. forces with routine replacement parts and components. Even in situations in which a license is required under the EAR, the burden likely will be reduced, compared to the previous license requirement under the ITAR. In particular, license applications for exports of ‘‘technology’’ controlled by ECCN 1E607 or 6E619 are likely to be less complex and burdensome than the authorizations required to export ITAR-controlled ‘‘technology,’’ i.e., Manufacturing License Agreements and Technical Assistance Agreements. 3. This rule does not contain policies with Federalism implications as that term is defined under E.O. 13132. 4. The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et seq., generally requires an agency to prepare an initial regulatory flexibility analysis (IRFA) for any rule subject to the notice and comment rulemaking requirements under the Administrative Procedure Act (5 U.S.C. 553) or any other statute, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Under section 605(b) of the RFA, however, if the head of an agency certifies that a rule will not have a significant impact on a substantial number of small entities, the RFA does not require the agency to prepare a regulatory flexibility analysis. Accordingly, pursuant to section 605(b), the Chief Counsel for Regulation, Department of Commerce, has certified to the Chief Counsel for Advocacy, Small Business Administration, that this proposed rule, if promulgated, will not have a significant impact on a substantial number of small entities. The rationale for this certification is as follows. Number of Small Entities Although BIS does not collect data on the size of entities that apply for, and are issued, export licenses and is, therefore, unable to estimate the exact number of small entities—as defined by the Small Business Administration’s VerDate Sep<11>2014 14:41 Jul 27, 2016 Jkt 238001 regulations implementing the RFA—BIS acknowledges that some small entities may be affected by this proposed rule. Economic Impact The amendments set forth in this rule are part of the Administration’s ECR initiative, which seeks to revise the USML to be a positive control list—one that does not use generic, catch-all control text to describe items subject to the ITAR—and to move some items that the President has determined no longer warrant control under the ITAR to control under the EAR and its CCL. Such items, along with certain military items currently identified on the CCL (most of which are identified on the WAML), will be controlled under new ‘‘600 series’’ ECCNs on the CCL. In addition, certain other items currently on the CCL will move from existing ECCNs to the new ‘‘600 series’’ ECCNs. This rule addresses certain dissemination, detection and protection ‘‘equipment’’ and related articles previously enumerated or otherwise described in USML Category XIV (Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated Equipment) and certain tooling, production ‘‘equipment,’’ test and evaluation ‘‘equipment,’’ test models and related articles previously enumerated or otherwise described in USML Category XVIII (Directed Energy Weapons). Most toxicological agents (i.e., chemical and biological agents) and associated equipment and all Directed Energy Weapons (DEWs) systems ‘‘specially designed’’ or modified for military applications, equipment ‘‘specially designed’’ or modified to detect, identify or defend against such systems, and ‘‘specially designed’’ ‘‘parts,’’ ‘‘components,’’ ‘‘accessories’’ and ‘‘attachments’’ for such systems or equipment remain on the USML. However, many other ‘‘parts’’ and ‘‘components’’ are now subject to the EAR (as items described in ECCN 1A607.x, 1B607.x, or 6B619.x), unless specifically enumerated or otherwise described on the USML. Many of these ‘‘parts’’ and ‘‘components’’ are more likely, than the USML articles described above, to be produced by small businesses. In addition, officials of the Department of State have informed BIS that license applications for such ‘‘parts’’ and ‘‘components’’ represent a high percentage of the license applications for USML articles reviewed by that department. Changing the jurisdictional status of certain Category XIV and Category XVIII items will reduce the burden on small entities (and other entities as well) through: (i) Elimination PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 of some license requirements; (ii) greater availability of license exceptions; (iii) simpler license application procedures; and (iv) reduced or eliminated registration fees. Moreover, ‘‘parts’’ and ‘‘components’’ that are controlled under the ITAR remain under ITAR control when incorporated into foreign-made items, regardless of the significance or insignificance of the item. This discourages foreign buyers from incorporating such U.S. content. The availability of de minimis treatment under the EAR, for those items that are no longer controlled under the ITAR, may reduce the disincentive for foreign manufacturers to purchase U.S.-origin ‘‘parts’’ and ‘‘components,’’ a development that potentially would mean greater sales for U.S. suppliers, including small entities. Many exports and reexports of the Category XIV or Category XVIII articles that are added to the CCL by this rule (particularly, the ‘‘parts’’ and ‘‘components’’ that are controlled under new ECCN 1A607.x, 1B607.x, or 6B619.x) are now eligible for license exceptions that apply to exports to U.S. Government agencies, exports of ‘‘parts’’ and ‘‘components’’ for use as replacement parts, temporary exports and limited value exports (for ECCN 1B607 and 6B619 items, only), as well as License Exception STA, thereby reducing the number of licenses that exporters will need to obtain for these items. License exceptions under the EAR allow suppliers to send routine replacement parts and low level parts to NATO and other close allies and export control regime partners for use by those governments and for use by contractors building equipment for those governments or for the U.S. Government without having to obtain export licenses. Under License Exception STA, the exporter needs to furnish information about the item being exported to the consignee and obtain a statement from the consignee that, among other things, will commit the consignee to comply with the EAR and other applicable U.S. laws. Because such statements and obligations can apply to an unlimited number of transactions and have no expiration date, they will result in a net reduction in burden on transactions routinely approved by the government through the license application process that the License Exception STA statements would replace. Even for exports and reexports for which a license will be required, the process for obtaining a license is simpler and less costly under the EAR. When a USML Category XIV or Category E:\FR\FM\28JYR1.SGM 28JYR1 Lhorne on DSK30JT082PROD with RULES Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations XVIII article is moved to the CCL, the number of destinations for which a license is required remains unchanged. However, the burden on the license applicant decreases because the licensing procedure for CCL items is simpler and more flexible than the licensing procedure for USML articles. Under the USML licensing procedure, an applicant must include a purchase order or contract with its application. There is no such requirement under the CCL licensing procedure. This difference gives the CCL applicant at least two advantages. First, the applicant has a way to determine whether the U.S. Government will authorize the transaction before it enters into potentially lengthy, complex and expensive sales presentations or contract negotiations. Under the USML procedure, the applicant must caveat all sales presentations with a reference to the need for government approval, and is more likely to engage in substantial effort and expense only to find that the government will reject the application. Second, a CCL license applicant need not limit its application to the quantity or value of one purchase order or contract. It may apply for a license to cover all of its expected exports or reexports to a specified consignee over the life of a license (normally four years, but maybe longer if circumstances warrant a longer period), thus reducing the total number of licenses for which the applicant must apply. In addition, many applicants exporting or reexporting items that this rule transfers from the USML to the CCL will realize cost savings through the elimination of some or all registration fees assessed under the USML’s licensing procedure. Currently, USML applicants must pay to use the USML licensing procedure even if they never actually are authorized to export. Registration fees for manufacturers and exporters of articles on the USML start at $2,250 per year, increase to $2,750 for organizations applying for one to ten licenses per year and further increase to $2,750 plus $250 per license application (subject to a maximum of three percent of total application value) for those who need to apply for more than ten licenses per year. Conversely, there are no registration or application processing fees for applications to export items listed on the CCL. Entities who applied for licenses from the Department of State, for the Category XIV or Category XVIII items subject to this rulemaking that are removed from the USML and added to the CCL, will find their registration fees reduced if the number of USML licenses those entities need declines. If an entity’s entire product VerDate Sep<11>2014 14:41 Jul 27, 2016 Jkt 238001 49527 line moves to the CCL, its ITAR registration and registration fee requirement will be eliminated. ■ Conclusion § 740.9 Temporary imports, exports, reexports, and transfers (in-country) (TMP). BIS expects that the changes to the EAR implemented by this rule will have a positive effect on all affected entities, including small entities. While BIS acknowledges that this rule may have some cost impacts on small (and other) entities, those costs are more than offset by the benefits to the entities from the licensing procedures under the EAR, which are much less costly and less time consuming than the procedures under the ITAR. As noted above, any new burdens created by this rule will be offset by a reduction in the number of items that will require a license, increased opportunities for use of license exceptions for exports to certain countries, simpler export license applications, reduced or eliminated registration fees and application of a de minimis threshold for foreign-made items incorporating U.S.-origin parts and components, all of which will reduce the incentive for foreign buyers to design out or avoid U.S.-origin content. Accordingly, the Chief Counsel for Regulation, Department of Commerce, has certified to the Chief Counsel for Advocacy, Small Business Administration, that this rule, if implemented, would not have a significant economic impact on a substantial number of small entities. Accordingly, an initial regulatory flexibility analysis is not required, and none has been prepared. List of Subjects 15 CFR Part 740 Administrative practice and procedure, Exports, Reporting and recordkeeping requirements. 15 CFR Part 774 Exports, Reporting and recordkeeping requirements. For the reasons stated in the preamble, parts 740 and 774 of the Export Administration Regulations (15 CFR parts 730–774) are amended as follows: PART 740—[AMENDED] 1. The authority citation for 15 CFR part 740 continues to read as follows: ■ Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 22 U.S.C. 7201 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). PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 2. Section 740.9 is amended by revising paragraph (a)(11) to read as follows: * * * * * (a) * * * (11) Personal protective ‘‘equipment’’ classified under ECCN 1A613.c or .d and individual protection ‘‘equipment’’ classified under ECCN 1A607.f—(i) Temporary exports, reexports, or incountry transfers to countries not identified in Country Group D:5. U.S. persons may temporarily export or reexport one set of body armor classified under ECCN 1A613.d (which may include one helmet classified under ECCN 1A613.c) or one set of chemical or biological agent protective gear classified under ECCN 1A607.f (which may include one additional filter canister classified under ECCN 1A607.x) to countries not identified in Country Group D:5, provided that: (A) The items are with the U.S. person’s baggage or effects, whether accompanied or unaccompanied (but not mailed); and (B) The items are for that U.S. person’s exclusive use and not for transfer of ownership unless reexported or transferred (in-country) to another U.S. person. (ii) Temporary exports, reexports, or transfers (in-country) to countries identified in Country Group D:5—(A) Iraq. U.S. persons may temporarily export or reexport one set of body armor classified under ECCN 1A613.d (which may include one helmet classified under ECCN 1A613.c) or one set of chemical or biological agent protective gear classified under ECCN 1A607.f (which may include one additional filter canister classified under ECCN 1A607.x) to Iraq, for personal use, provided that the requirements in paragraph (a)(11)(i) of this section are met. In addition, the U.S. person must be affiliated with the U.S. Government and traveling on official business or traveling in support of a U.S. Government contract, or the U.S. person must be traveling to Iraq under a direct authorization by the Government of Iraq and engaging in activities for, on behalf of, or at the request of, the Government of Iraq. Documentation regarding direct authorization from the Government of Iraq shall include an English translation. (B) Other countries in Country Group D:5. U.S. persons may temporarily export or reexport one set of body armor classified under ECCN 1A613.d (which may include one helmet classified under ECCN 1A613.c) or one set of chemical or biological agent protective E:\FR\FM\28JYR1.SGM 28JYR1 49528 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations gear classified under ECCN 1A607.f (which may include one additional filter canister classified under ECCN 1A607.x) to countries in Country Group D:5 (except Iraq), for personal use, provided that the requirements in paragraph (a)(11)(i) of this section are met, and the U.S. person is affiliated with the U.S. Government traveling on official business or is traveling in support of a U.S. Government contract. (iii) Items exported, reexported, or transferred (in-country) under this paragraph (a)(11), if not consumed or destroyed in the normal course of authorized temporary use abroad, must be returned to the United States or other country from which the items were so transferred as soon as practicable but no later than four years after the date of export, reexport or transfer (in-country). * * * * * ■ 3. Section 740.14 is amended by revising paragraphs (h)(1) and (2) to read as follows: § 740.14 Baggage (BAG). Lhorne on DSK30JT082PROD with RULES * * * * * (h) Special provisions: personal protective ‘‘equipment’’ classified under ECCN 1A613.c or .d and individual protection ‘‘equipment’’ classified under ECCN 1A607.f—(1) Exports, reexports, or in-country transfers to countries not identified in Country Group D:5. U.S. persons may export, reexport, or transfer (in-country) one set of body armor classified under ECCN 1A613.d (which may include one helmet classified under ECCN 1A613.c) or one set of chemical or biological agent protective gear classified under ECCN 1A607.f (which may include one additional filter canister classified under ECCN 1A607.x) to countries not identified in Country Group D:5, provided that: (i) The items are with the U.S. person’s baggage or effects, whether accompanied or unaccompanied (but not mailed); and (ii) The items are for that person’s exclusive use and not for transfer of ownership unless reexported or transferred (in-country) to another U.S. person. (2) Exports, reexports, or in-country transfers to countries identified in Country Group D:5—(i) Iraq. U.S. persons may export, reexport, or transfer (in-country) one set of body armor classified under ECCN 1A613.d (which may include one helmet classified under ECCN 1A613.c) or one set of chemical or biological agent protective gear classified under ECCN 1A607.f (which may include one additional filter canister classified under ECCN 1A607.x) to Iraq, for personal use, provided that VerDate Sep<11>2014 16:16 Jul 27, 2016 Jkt 238001 the requirements in paragraph (h)(1) of this section are met. In addition, the U.S. person must be affiliated with the U.S. Government and traveling on official business or traveling in support of a U.S. Government contract, or the U.S. person must be traveling to Iraq under a direct authorization by the Government of Iraq and engaging in activities for, on behalf of, or at the request of, the Government of Iraq. Documentation regarding direct authorization from the Government of Iraq shall include an English translation. (ii) Other countries in Country Group D:5. U.S. persons may export, reexport, or transfer (in-country) one set of body armor classified under ECCN 1A613.d (which may include one helmet classified under ECCN 1A613.c) or one set of chemical or biological agent protective gear classified under ECCN 1A607.f (which may include one additional filter canister classified under ECCN 1A607.x) to countries in Country Group D:5 (except Iraq), for personal use, provided that the requirements in paragraph (h)(1) of this section are met, and the U.S. person is affiliated with the U.S. Government traveling on official business or is traveling in support of a U.S. Government contract. * * * * * PART 774—[AMENDED] 4. 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). 5. In Supplement No. 1 to part 774 (the Commerce Control List), Category 1—Special Materials and Related Equipment, Chemicals, ‘‘Microorganisms,’’ and ‘‘Toxins,’’ add ECCN 1A607 between ECCNs 1A290 and 1A613 to read as follows: ■ Supplement No. 1 to Part 774—the Commerce Control List * * * * * 1A607 Military dissemination ‘‘equipment’’ for riot control agents, military detection and protection ‘‘equipment’’ for toxicological agents (including chemical, biological, and riot control agents), and related commodities (see List of Items Controlled). PO 00000 Frm 00012 Fmt 4700 Sfmt 4700 License Requirements Reason for Control: NS, RS, AT, UN Control(s) NS applies to entire entry. RS applies to entire entry. AT applies to entire entry. UN applies to entire entry. Country chart (see Supp. No. 1 to Part 738) NS Column 1 RS Column 1 AT Column 1 See § 746.1(b) for UN controls List Based License Exceptions (See Part 740 for a description of all license exceptions) LVS: N/A GBS: N/A CIV: N/A Special Conditions for STA STA: Paragraph (c)(2) of License Exception STA (§ 740.20(c)(2) of the EAR) may not be used for any item in 1A607. List of Items Controlled Related Controls: (1) Vaccines identified in ECCN 1C991 are not controlled by this ECCN. (2) See 22 CFR 121.1 (USML), Category XIV(h), for vaccines that are subject to the ITAR. (3) Protection and detection equipment and related items identified in ECCN 1A004, 1A995, or 2B351 are not controlled by this ECCN. (4) See 22 CFR 121.1 (USML), Category XIV(f), for dissemination, detection and protection equipment that is subject to the ITAR. (5) See ECCN 0A919 for ‘‘military commodities’’ located and produced outside the United States that incorporate more than a de minimis amount of USorigin ‘‘600 series’’ controlled content. Related Definitions: N/A Items: a. through d. [Reserved] e. ‘‘Equipment’’ ‘‘specially designed’’ for military use and for the dissemination of any of the riot control agents controlled in ECCN 1C607.a. f. Protection ‘‘equipment’’ (including air conditioning units, protective coatings, and protective clothing): f.1. Not controlled by USML Category XIV(f); and f.2. ‘‘Specially designed’’ for military use and for defense against: f.2.1. Materials specified by USML Category XIV (a) or (b); or f.2.2. Riot control agents controlled in 1C607.a. g. Decontamination ‘‘equipment’’: g.1. Not controlled by USML Category XIV(f); and g.2. ‘‘Specially designed’’ for military use and for decontamination of objects contaminated with materials controlled by USML Category XIV(a) or (b). h. ‘‘Equipment’’: h.1. Not controlled by USML Category XIV(f); and h.2. ‘‘Specially designed’’ for military use and for the detection or identification of: h.2.1. Materials specified by USML Category XIV(a) or (b); or h.2.2. Riot control agents controlled by ECCN 1C607.a. E:\FR\FM\28JYR1.SGM 28JYR1 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations i. [Reserved] j. ‘‘Equipment’’ ‘‘specially designed’’ to: j.1. Interface with a detector, shelter, vehicle, vessel, or aircraft controlled by the USML or a ‘‘600 series’’ ECCN; and j.2. Collect and process samples of articles controlled in USML Category XIV(a) or (b). k. Medical countermeasures that are ‘‘specially designed’’ for military use (including pre- and post-treatments, antidotes, and medical diagnostics) and ‘‘specially designed’’ to counter chemical agents controlled by the USML Category XIV(a). Note: Examples of ‘‘equipment’’ controlled by this entry are barrier and non-barrier creams and filled autoinjectors (e.g., combopens where one injector contains 2– PAM and the other atropine) if ‘‘specially designed’’ to counter such agents. l. through w. [Reserved] x. ‘‘Parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ that are ‘‘specially designed’’ for a commodity controlled by ECCN 1A607.e, .f, .g, .h, or .j or for a defense article controlled by USML Category XIV(f) and that are not enumerated or otherwise described elsewhere in the USML. 6. In Supplement No. 1 to part 774 (the Commerce Control List), Category 1—Special Materials and Related Equipment, Chemicals, ‘‘Microorganisms,’’ and ‘‘Toxins,’’ add ECCN 1B607 between ECCNs 1B234 and 1B608 to read as follows: ■ 1B607 Military test, inspection, and production ‘‘equipment’’ and related commodities ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ repair, overhaul, or refurbishing of commodities identified in ECCN 1A607 or 1C607, or defense articles enumerated or otherwise described in USML Category XIV (see List of Items Controlled). License Requirements Reason for Control: NS, RS, AT, UN Control(s) NS applies to entire entry. RS applies to entire entry. AT applies to entire entry. UN applies to entire entry. Country chart (see Supp. No. 1 to Part 738) NS Column 1 7. In Supplement No. 1 to part 774 (the Commerce Control List), Category 1—Special Materials and Related Equipment, Chemicals, ‘‘Microorganisms,’’ and ‘‘Toxins,’’ add a new ECCN 1C607 between ECCNs 1C395 and 1C608 to read as follows: ■ 1C607 Tear Gases, Riot Control Agents and materials for the detection and decontamination of chemical warfare agents (see List of Items Controlled). License Requirements Reason for Control: NS, RS, AT, UN RS Column 1 Control(s) AT Column 1 See § 746.1(b) for UN controls List Based License Exceptions (See Part 740 for a description of all license exceptions) LVS: $1500 GBS: N/A CIV: N/A Lhorne on DSK30JT082PROD with RULES ECCN 0A919 for ‘‘military commodities’’ located and produced outside the United States that incorporate more than a de minimis amount of US-origin ‘‘600 series’’ controlled content. Related Definitions: N/A Items: a. ‘‘Equipment’’ ‘‘specially designed’’ for the destruction of the chemical agents controlled by USML Category XIV(a). Note to 1B607.a: ECCN 1B607.a includes controls over facilities ‘‘specially designed’’ for destruction operations. This paragraph .a does not control incinerators and ‘‘specially designed’’ handling facilities or ‘‘specially designed’’ waste supply systems therefor. b. Test facilities and ‘‘equipment’’ ‘‘specially designed’’ for military certification, qualification, or testing of commodities controlled by ECCN 1A607.e, .f, .g, .h, or .j or by USML Category XIV(f), except for XIV(f)(1). c. Tooling and ‘‘equipment’’ ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ repair, overhaul, or refurbishing of commodities controlled by ECCN 1A607.e, .f .g, .h, or .j or USML Category XIV(f). d. through w. [RESERVED] x. ‘‘Parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ that are ‘‘specially designed’’ for a commodity controlled by ECCN 1B607.b or .c, or for a defense article controlled by USML Category XIV(f), and that are not enumerated or otherwise described elsewhere in the USML. NS applies to entire entry, except 1C607.a.10, .a.11, .a.12, and .a.14. RS applies to entire entry. AT applies to entire entry. UN applies to entire entry. Country chart (see Supp. No. 1 to Part 738) NS Column 1 RS Column 1 AT Column 1 Special Conditions for STA STA: Paragraph (c)(2) of License Exception STA (§ 740.20(c)(2) of the EAR) may not be used for any item in 1B607. List Based License Exceptions (See Part 740 for a description of all license exceptions) List of Items Controlled Related Controls: (1) See ECCN 2B350 for controls on certain incinerators. (2) See LVS: N/A GBS: N/A CIV: N/A VerDate Sep<11>2014 16:16 Jul 27, 2016 Jkt 238001 PO 00000 Frm 00013 Fmt 4700 See § 746.1(b) for UN controls Sfmt 4700 49529 Special Conditions for STA STA: Paragraph (c)(2) of License Exception STA (§ 740.20(c)(2) of the EAR) may not be used for any item in 1C607. List of Items Controlled Related Controls: (1) See ECCN 1A984 for controls on other riot control agents. (2) See 22 CFR 121.1 (USML), Category XIV(b), for modified biological agents and biologically derived substances that are subject to the ITAR. (3) See 22 CFR 121.1 (USML), Category XIV(g), for ITAR controls on antibodies, recombinant protective antigens, polynucleotides, biopolymers or biocatalysts (including the expression vectors, viruses, plasmids, or cultures of specific cells used to produce them) that are ‘‘specially designed’’ for use with articles controlled under USML Category XIV(f). (4) See ECCN 0A919 for ‘‘military commodities’’ located and produced outside the United States that incorporate more than a de minimis amount of USorigin ‘‘600 series’’ controlled content. Related Definitions: N/A Items: a. Tear gases and riot control agents including: a.1. CA (Bromobenzyl cyanide) (CAS 5798– 79–8); a.2. CS (o-Chlorobenzylidenemalononitrile or o-Chlorobenzalmalononitrile) (CAS 2698– 41–1); a.3. CN (Phenylacyl chloride or wChloroacetophenone) (CAS 532–27–4); a.4. CR (Dibenz-(b,f)-1,4-oxazephine) (CAS 257–07–8); a.5. Adamsite (Diphenylamine chloroarsine or DM) (CAS 578–94–9); a.6. N-Nonanoylmorpholine, (MPA) (CAS 5299–64–9); a.7. Dibromodimethyl ether (CAS 4497– 29–4); a.8. Dichlorodimethyl ether (ClCi) (CAS 542–88–1); a.9. Ethyldibromoarsine (CAS 683–43–2); a.10. Bromo acetone (CAS 598–31–2); a.11. Bromo methylethylketone (CAS 816– 40–0); a.12. Iodo acetone (CAS 3019–04–3); a.13. Phenylcarbylamine chloride (CAS 622–44–6); a.14. Ethyl iodoacetate (CAS 623–48–3); Note to 1C607.a: ECCN 1C607.a. does not control the following: formulations containing 1% or less of CN or CS; individually packaged tear gases or riot control agents for personal self-defense purposes that are controlled by ECCN 1A984; or active constituent chemicals, and combinations thereof, identified and packaged for food production or medical purposes. b. ‘‘Biopolymers,’’ not controlled by USML Category XIV(g) ‘‘specially designed’’ or processed for the detection or identification of chemical warfare agents specified by USML Category XIV(a), and the cultures of specific cells used to produce them. c. ‘‘Biocatalysts,’’ and biological systems therefor, not controlled by USML Category XIV(g) ‘‘specially designed’’ for the decontamination or degradation of chemical warfare agents controlled in USML Category XIV (a), as follows: E:\FR\FM\28JYR1.SGM 28JYR1 49530 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations c.1. ‘‘Biocatalysts’’ ‘‘specially designed’’ for the decontamination or degradation of chemical warfare agents controlled in USML Category XIV(a) resulting from directed laboratory selection or genetic manipulation of biological systems; c.2. Biological systems containing the genetic information specific to the production of ‘‘biocatalysts’’ specified by 1C607.c.1, as follows: c.2.a. ‘‘Expression vectors;’’ c.2.b. Viruses; or c.2.c. Cultures of cells. Note to 1C607.b and .c: The cultures of cells and biological systems are exclusive and these sub-items do not apply to cells or biological systems for civil purposes, such as agricultural, pharmaceutical, medical, veterinary, environmental, waste management, or in the food industry. d. Chemical mixtures not controlled by USML Category XIV(f) ‘‘specially designed’’ for military use for the decontamination of objects contaminated with materials specified by USML Category XIV(a) or (b). 8. In Supplement No. 1 to part 774 (the Commerce Control List), Category 1—Special Materials and Related Equipment, Chemicals, ‘‘Microorganisms,’’ and ‘‘Toxins,’’ add ECCN 1D607 between ECCNs 1D390 and 1D608 to read as follows: ■ containing reagents, algorithms, coefficients, software, libraries, spectral databases, or alarm set point levels developed under U.S. Department of Defense contract or funding for the detection, identification, warning or monitoring of items controlled in paragraphs (a) or (b) of USML Category XIV, or for chemical or biological agents specified by U.S. Department of Defense funding or contract. (2) See ECCN 0A919 for ‘‘military commodities’’ located and produced outside the United States that incorporate more than a de minimis amount of US-origin ‘‘600 series’’ controlled content. Related Definitions: N/A Items: a. ‘‘Software’’ ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ operation, or maintenance of commodities controlled by ECCN 1A607, 1B607, or 1C607. b. [RESERVED] 9. In Supplement No. 1 to part 774 (the Commerce Control List), Category 1—Special Materials and Related Equipment, Chemicals, ‘‘Microorganisms,’’ and ‘‘Toxins,’’ add a new ECCN 1E607 between ECCNs 1E355 and 1E608 to read as follows: ■ 1D607 ‘‘Software’’ ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ operation, or maintenance of items controlled by 1A607, 1B607 or 1C607 (see List of Items Controlled). 1E607 ‘‘Technology’’ ‘‘required’’ for the ‘‘development,’’ ‘‘production,’’ operation, installation, maintenance, repair, overhaul, or refurbishing of items controlled by ECCN 1A607, 1B607, 1C607, or 1D607 (see List of Items Controlled). License Requirements Reason for Control: NS, RS, AT, UN License Requirements Reason for Control: NS, RS, AT, UN Control(s) NS applies to entire entry, except ‘‘software’’ for 1C607.a.10, .a.11, .a.12, and .a.14. RS applies to entire entry. AT applies to entire entry. UN applies to entire entry. Country chart (see Supp. No. 1 to Part 738) NS Column 1 RS Column 1 AT Column 1 See § 746.1(b) for UN controls Lhorne on DSK30JT082PROD with RULES Special Conditions for STA STA: Paragraph (c)(2) of License Exception STA (§ 740.20(c)(2) of the EAR) may not be used for any item in 1D607. List of Items Controlled Related Controls: (1) ‘‘Software’’ directly related to articles enumerated or otherwise described in USML Category XIV is subject to the ITAR (see 22 CFR § 121.1, Category XIV(m)). ‘‘Software’’ controlled by USML Category XIV(m) includes ‘‘software’’ directly related to any equipment 17:20 Jul 27, 2016 Jkt 238001 Country chart (see Supp. No. 1 to Part 738) 10. In Supplement No. 1 to Part 774 (the Commerce Control List), Category 6—Sensors and Lasers,’’ add a new ECCN 6B619 between ECCNs 6B108 and 6B995 to read as follows: ■ 6B619 Test, inspection, and production ‘‘equipment’’ and related commodities ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ repair, overhaul, or refurbishing of commodities enumerated or otherwise described in USML Category XVIII (see List of Items Controlled) License Requirements Reason for Control: NS, RS, AT, UN Control(s) List Based License Exceptions (See Part 740 for a description of all license exceptions) CIV: N/A TSR: N/A VerDate Sep<11>2014 Control(s) controlled by USML Category XIV(m) include technical data directly related to any equipment containing reagents, algorithms, coefficients, software, libraries, spectral databases, or alarm set point levels developed under U.S. Department of Defense contract or funding for the detection, identification, warning or monitoring of items controlled in paragraphs (a) or (b) of USML Category XIV, or for chemical or biological agents specified by U.S. Department of Defense funding or contract. Related Definitions: N/A Items: a. ‘‘Technology’’ ‘‘required’’ for the ‘‘development,’’ ‘‘production,’’ operation, installation, maintenance, repair, overhaul, or refurbishing of items controlled by ECCN 1A607, 1B607, 1C607 or 1D607. Note to 1E607.a: ECCN 1E607.a includes ‘‘technology’’ ‘‘required’’ exclusively for the incorporation of ‘‘biocatalysts’’ controlled by ECCN 1C607.c.1 into military carrier substances or military material. b. [RESERVED] NS applies to entire entry, except ‘‘technology’’ for 1C607.a.10, .a.11, .a.12, and .a.14 and for 1D607 ‘‘software’’ therefor. RS applies to entire entry. AT applies to entire entry. UN applies to entire entry. NS Column 1 RS Column 1 AT Column 1 See § 746.1(b) for UN controls List Based License Exceptions (See Part 740 for a description of all license exceptions) CIV: N/A TSR: N/A Special Conditions for STA STA: Paragraph (c)(2) of License Exception STA (§ 740.20(c)(2) of the EAR) may not be used for any item in 1E607. List of Items Controlled Related Controls: Technical data directly related to defense articles enumerated or otherwise described in USML Category XIV are subject to the ITAR (see 22 CFR § 121.1, Category XIV(m)). Technical data PO 00000 Frm 00014 Fmt 4700 Sfmt 4700 NS applies to entire entry. RS applies to entire entry. AT applies to entire entry. UN applies to entire entry. Country chart (see Supp. No. 1 to Part 738) NS Column 1 RS Column 1 AT Column 1 See § 746.1(b) for UN controls License Exceptions LVS: $1500 GBS: N/A CIV: N/A Special Conditions for STA STA: Paragraph (c)(2) of License Exception STA (§ 740.20(c)(2) of the EAR) may not be used for any item in 6B619. List of Items Controlled Related Controls: ‘‘Parts,’’ ‘‘components,’’ ‘‘accessories,’’ ‘‘attachments,’’ and associated systems or ‘‘equipment’’ ‘‘specially designed’’ for defense articles enumerated or otherwise described in paragraphs (a) or (b) of USML Category XVIII are subject to the ITAR (see 22 CFR 121.1, Category XVIII(e)). E:\FR\FM\28JYR1.SGM 28JYR1 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations Related Definitions: N/A Items: a. Tooling, templates, jigs, mandrels, molds, dies, fixtures, alignment mechanisms, and test ‘‘equipment’’ not enumerated or otherwise described in USML Category XVIII and not elsewhere specified on the USML that are ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ repair, overhaul, or refurbishing of commodities controlled by USML Category XVIII. b. through w. [Reserved] x. ‘‘Parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ ‘‘specially designed’’ for a commodity subject to control under paragraph .a of this ECCN and not enumerated or otherwise described in USML Category XVIII and not elsewhere specified on the USML. 11. In Supplement No. 1 to Part 774 (the Commerce Control List), Category 6—Sensors and Lasers,’’ add a new ECCN 6D619 between ECCNs 6D201 and 6D991 to read as follows: ■ 6D619 ‘‘Software’’ ‘‘specially designed’’ for the ‘‘development,’’ ‘‘production,’’ operation or maintenance of commodities controlled by 6B619. License Requirements Reason for Control: NS, RS, AT, UN Control(s) NS applies to entire entry. RS applies to entire entry. AT applies to entire entry. UN applies to entire entry. Country chart (see Supp. No. 1 to Part 738) NS Column 1 commodities controlled by 6B619 or ‘‘software’’ controlled by 6D619. License Requirements Reason for Control: NS, RS, AT, UN Control(s) NS applies to entire entry. RS applies to entire entry. AT applies to entire entry. UN applies to entire entry. Country chart (see Supp. No. 1 to Part 738) NS Column 1 RS Column 1 AT Column 1 See § 746.1(b) for UN controls License Exceptions CIV: N/A TSR: N/A Special Conditions for STA STA: Paragraph (c)(2) of License Exception STA (§ 740.20(c)(2) of the EAR) may not be used for any item in 6E619. List of Items Controlled Related Controls: Technical data directly related to articles enumerated or otherwise described in USML Category XVIII are subject to the ITAR (See 22 CFR 121.1, Category XVIII(f)). Related Definitions: N/A Items: The list of items controlled is contained in the ECCN heading. RS Column 1 Kevin J. Wolf, Assistant Secretary for Export Administration. AT Column 1 [FR Doc. 2016–17506 Filed 7–27–16; 8:45 am] See § 746.1(b) for UN controls BILLING CODE 3510–33–P License Exceptions CIV: N/A TSR: N/A DEPARTMENT OF STATE Special Conditions for STA STA: Paragraph (c)(2) of License Exception STA (§ 740.20(c)(2) of the EAR) may not be used for any item in 6D619. [Public Notice: 9466] 22 CFR Part 121 List of Items Controlled Related Controls: ‘‘Software’’ directly related to articles enumerated or otherwise described in USML Category XVIII is subject to the ITAR (See 22 CFR 121.1, Category XVIII(f)). Related Definitions: N/A Items: The list of items controlled is contained in the ECCN heading. 12. In Supplement No. 1 to Part 774 (the Commerce Control List), Category 6—Sensors and Lasers,’’ add ECCN 6E619 between ECCNs 6E202 and 6E990 to read as follows: Lhorne on DSK30JT082PROD with RULES ■ 6E619 ‘‘Technology’’ ‘‘required’’ for the ‘‘development,’’ ‘‘production,’’ operation, installation, maintenance, repair, overhaul or refurbishing of VerDate Sep<11>2014 16:16 Jul 27, 2016 Jkt 238001 RIN 1400–AD03 Amendment to the International Traffic in Arms Regulations: Revision of U.S. Munitions List Categories XIV and XVIII Department of State. Final rule. AGENCY: ACTION: As part of the President’s Export Control Reform effort, the Department of State amends the International Traffic in Arms Regulations (ITAR) to revise Categories XIV (toxicological agents, including chemical agents, biological agents, and associated equipment) and XVIII (directed energy weapons) of the U.S. Munitions List (USML) to describe more precisely the articles warranting control on the USML. The revisions contained in this rule are part of the Department of State’s retrospective plan under E.O. SUMMARY: PO 00000 Frm 00015 Fmt 4700 Sfmt 4700 49531 13563, completed on August 17, 2011. The Department of State’s full plan can be accessed at http://www.state.gov/ documents/organization/181028.pdf. DATES: This Final rule is effective on December 31, 2016. FOR FURTHER INFORMATION CONTACT: Mr. C. Edward Peartree, Director, Office of Defense Trade Controls Policy, Department of State, telephone (202) 663–2792; email DDTCPublicComments@state.gov. ATTN: ITAR Amendment—USML Categories XIV and XVIII. SUPPLEMENTARY INFORMATION: The Directorate of Defense Trade Controls (DDTC), U.S. Department of State, administers the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120–130). The items subject to the jurisdiction of the ITAR, i.e., ‘‘defense articles,’’ are identified on the ITAR’s U.S. Munitions List (USML) (22 CFR 121.1). With few exceptions, items not subject to the export control jurisdiction of the ITAR are subject to the jurisdiction of the Export Administration Regulations (‘‘EAR,’’ 15 CFR parts 730–774, which includes the Commerce Control List (CCL) in Supplement No. 1 to Part 774), administered by the Bureau of Industry and Security (BIS), U.S. Department of Commerce. Both the ITAR and the EAR impose license requirements on exports and reexports. Items not subject to the ITAR or to the exclusive licensing jurisdiction of any other set of regulations are subject to the EAR. All references to the USML in this rule are to the list of defense articles controlled for the purpose of export or temporary import pursuant to the ITAR, and not to the defense articles on the USML that are controlled by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATFE) for the purpose of permanent import under its regulations. See 27 CFR part 447. Pursuant to section 38(a)(1) of the Arms Export Control Act (AECA), all defense articles controlled for export or import are part of the USML under the AECA. The list of defense articles controlled by ATFE for the purpose of permanent import is the U.S. Munitions Import List (USMIL). The transfer of defense articles from the ITAR’s USML to the EAR’s CCL does not affect the list of defense articles controlled on the USMIL. Revision of Category XIV This final rule revises USML Category XIV, covering toxicological agents, including chemical agents, biological agents, and associated equipment. The revisions are undertaken in order to more accurately describe the articles E:\FR\FM\28JYR1.SGM 28JYR1

Agencies

[Federal Register Volume 81, Number 145 (Thursday, July 28, 2016)]
[Rules and Regulations]
[Pages 49517-49531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17506]



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Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules 
and Regulations

[[Page 49517]]



DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 740 and 774

[Docket No. 120105019-5755-01]
RIN 0694-AF52


Commerce Control List: Addition of Items Determined To No Longer 
Warrant Control Under United States Munitions List Category XIV 
(Toxicological Agents) or Category XVIII (Directed Energy Weapons)

AGENCY: Bureau of Industry and Security, Department of Commerce.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule implements changes described in a proposed 
rule that the Bureau of Industry and Security (BIS) published on June 
17, 2015. Specifically, this final rule describes how articles the 
President has determined no longer warrant control under Category XIV 
(Toxicological Agents, Including Chemical Agents, Biological Agents, 
and Associated Equipment) or Category XVIII (Directed Energy Weapons) 
of the United States Munitions List (USML) are now controlled under the 
Commerce Control List (CCL). The affected Category XIV articles consist 
primarily of dissemination, detection, and protection ``equipment'' and 
related articles, such as production and test ``equipment,'' and are 
controlled under new Export Control Classification Numbers (ECCNs) 
1A607, 1B607, 1C607, 1D607, and 1E607, as added to the CCL by this 
final rule. The affected Category XVIII articles consist primarily of 
tooling, production ``equipment,'' test and evaluation ``equipment,'' 
test models, and related articles and are controlled under new ECCNs 
6B619, 6D619 and 6E619, as added to the CCL by this final rule.
    This final rule is one in a series of rules describing how various 
types of articles that the President has determined no longer warrant 
control on the USML, as part of the Administration's Export Control 
Reform Initiative, are controlled on the CCL in accordance with the 
requirements of the Export Administration Regulations (EAR).
    This final rule is being published by BIS in conjunction with a 
final rule from the Department of State, Directorate of Defense Trade 
Controls, which amends the list of articles controlled by USML 
Categories XIV and XVIII. The citations in this BIS rule to USML 
Categories XIV and XVIII reflect the amendments contained in the 
Department of State's rule. The revisions made by BIS in this rule are 
part of Commerce's retrospective regulatory review plan under Executive 
Order 13563 completed in August 2011.

DATES: This rule is effective December 31, 2016.

ADDRESSES: The Department of Commerce's full retrospective regulatory 
review plan can be accessed at: http://open.commerce.gov/news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules.

FOR FURTHER INFORMATION CONTACT: For questions regarding dissemination, 
detection and protection ``equipment'' and related items that are 
controlled under new ECCNs 1A607, 1B607, 1C607, 1D607, and 1E607, 
contact Richard P. Duncan, Ph.D., Director, Chemical and Biological 
Controls Division, Office of Nonproliferation and Treaty Compliance, 
Bureau of Industry and Security, telephone: (202) 482-3343, email: 
Richard.Duncan@bis.doc.gov.
    For questions regarding tooling, production ``equipment,'' test and 
evaluation ``equipment,'' test models, and related items that are 
controlled under new ECCNs 6B619, 6D619 and 6E619, contact Mark Jaso, 
Sensors and Aviation Division, Office of National Security & Technology 
Transfer Controls, Bureau of Industry and Security, telephone: (202) 
482-0987, email: Mark.Jaso@bis.doc.gov.

SUPPLEMENTARY INFORMATION: 

Background

    This final rule is published by the Bureau of Industry and Security 
(BIS) as part of the Administration's Export Control Reform (ECR) 
Initiative, the object of which is to protect and enhance U.S. national 
security interests. The implementation of the ECR initiative includes 
amendment of the International Traffic in Arms Regulations (ITAR) and 
its U.S. Munitions List (USML), so that they control only those items 
that provide the United States with a critical military or intelligence 
advantage or otherwise warrant such controls, and amendment of the 
Export Administration Regulations (EAR) to control military items that 
do not warrant USML controls. This series of amendments to the ITAR and 
the EAR will reform the U.S. export control system to enhance our 
national security by: (i) Improving the interoperability of U.S. 
military forces with allied countries; (ii) strengthening the U.S. 
industrial base by, among other things, reducing incentives for foreign 
manufacturers to design out and avoid U.S.-origin content and services; 
and (iii) allowing export control officials to focus government 
resources on transactions that pose greater national security, foreign 
policy, or proliferation concerns than those involving our NATO allies 
and other multi-regime partners.
    Following the structure set forth in the final rule titled 
``Revisions to the Export Administration Regulations: Initial 
Implementation of Export Control Reform'' (78 FR 22660, April 16, 2013) 
(hereinafter the ``April 16 (initial implementation) rule''), this 
final rule describes BIS's implementation of controls, under the EAR's 
CCL, on certain dissemination, detection and protection ``equipment'' 
and related articles previously controlled under USML Category XIV in 
the ITAR and certain tooling, production ``equipment,'' test and 
evaluation ``equipment,'' test models and related articles previously 
controlled under USML Category XVIII of the ITAR.
    In the April 16 (initial implementation) rule, BIS created a series 
of new ECCNs to control items that would be removed from the USML and 
similar items from the Wassenaar Arrangement on Export Controls for 
Conventional Arms and Dual Use Goods and Technologies Munitions List 
(Wassenaar Arrangement Munitions List or WAML) that were already 
controlled elsewhere on the CCL. That final rule referred to this 
series of new ECCNs as

[[Page 49518]]

the ``600 series,'' because the third character in each of these new 
ECCNs is the number ``6.'' The first two characters of the ``600 
series'' ECCNs serve the same function as any other ECCN as described 
in Sec.  738.2 of the EAR. The first character is a number, within the 
range of 0 through 9, that identifies the Category on the CCL in which 
the ECCN is located. The second character is a letter, within the range 
of A through E, that identifies the product group in a CCL Category. As 
indicated above, the third character in the ``600 series'' ECCNs is the 
number ``6,'' which distinguishes the items controlled under this 
series of ECCNs from items identified under other ECCNs on the CCL. 
With few exceptions, the final two characters identify the WAML 
category that covers items that are the same or similar to items in a 
particular ``600 series'' ECCN.
    Pursuant to section 38(f) of the Arms Export Control Act (AECA), 
the President is obligated to review the USML ``to determine what 
items, if any, no longer warrant export controls under'' the AECA. The 
President must report the results of the review to Congress and wait 30 
days before removing any such items from the USML. The report must 
``describe the nature of any controls to be imposed on that item under 
any other provision of law.'' 22 U.S.C. 2778(f)(1).
    The changes made by this final rule and in the State Department's 
companion rule to Categories XIV and XVIII of the USML are based on a 
review of these USML Categories by the Defense Department, which worked 
with the Departments of State and Commerce in preparing these 
amendments. Other agencies with expertise and equities in the items at 
issue in these rules were consulted as well. The review focused on 
identifying those types of articles that provide the United States with 
a critical military or intelligence capability and that are not 
currently in normal commercial use. Such items remain on the USML. 
Other items with less than a critical military or intelligence 
capability not in normal commercial use will transition to the ``600 
series'' controls. It is the intent of the agencies that USML 
Categories XIV and XVIII, and the corresponding ``600 series'' ECCNs on 
the CCL, not control items in normal commercial use. Such items should 
be controlled under existing dual-use controls on the CCL, consistent 
with the Wassenaar Arrangement List of Dual-Use Goods and Technologies.
    All references to the USML in this rule are to the list of defense 
articles that are controlled for purposes of export, temporary import, 
or brokering pursuant to the ITAR, and not to the list of defense 
articles on the United States Munitions Import List (USMIL) that are 
controlled by the Bureau of Alcohol, Tobacco, Firearms and Explosives 
(ATF) for purposes of permanent import under its regulations at 27 CFR 
part 447. Pursuant to section 38(a)(1) of the AECA, all defense 
articles controlled for export or import, or that are subject to 
brokering controls, are part of the ``USML'' under the AECA. For the 
sake of clarity, references to the USMIL are to the list of defense 
articles controlled by ATF for purposes of permanent import. All 
defense articles described in the USMIL or the USML are subject to the 
brokering controls administered by the U.S. Department of State in part 
129 of the ITAR. The transfer of defense articles from the ITAR's USML 
to the EAR's CCL, for purposes of export controls, does not affect the 
list of defense articles that are controlled on the USMIL under the 
AECA for purposes of permanent import.
    On January 18, 2011, the President issued Executive Order 13563, 
affirming general principles of regulation and directing government 
agencies to conduct retrospective reviews of existing regulations. The 
revisions made by this rule are part of Commerce's retrospective 
regulatory review plan under Executive Order 13563. Commerce's full 
plan, completed in August 2011, can be accessed at: http://open.commerce.gov/news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules.
    This final rule implements amendments to the EAR proposed in BIS's 
rule titled ``Commerce Control List: Addition of Items Determined to No 
Longer Warrant Control under United States Munitions List Category XIV 
(Toxicological Agents) or Category XVIII (Directed Energy Weapons),'' 
which was published in the Federal Register on June 17, 2015 (RIN 0694-
AF52) (80 FR 34562) (herein ``the June 17 (toxicological agents and 
directed energy weapons) rule'').

Dissemination, Detection and Protection ``Equipment'' and Related Items

Public Comments and BIS Responses

    BIS received comments from eight parties in response to the 
proposed amendments in the June 17 (toxicological agents and directed 
energy weapons) rule that addressed dissemination, detection and 
protection ``equipment'' and related items.

ECCN 1A607 (Military Dissemination, Detection, and Protection 
``Equipment'')

    Comment: One commenter noted that tear gas and riot control agents 
were dropped from proposed USML Category XIV(d), but did not appear in 
proposed ECCN 1A607.
    Response: The tear gas and riot control agents removed from USML 
Category XIV(d) are now controlled under ECCN 1C607.a.1 through a.6, as 
they were proposed to be controlled in BIS's June 17 (toxicological 
agents and directed energy weapons) rule. Therefore, no further action 
is required.

ECCN 1A607.f (Protection ``Equipment'')

    Comment: One commenter noted that proposed ECCN 1A607.f included 
protection ``equipment,'' but did not specifically indicate that it 
controlled Chemical Agent Resistant Coatings (CARC). The commenter 
recommended that CARC be specifically identified in ECCN 1A607.f or 
that the word ``material'' be added so that companies would be more 
likely to interpret ECCN 1A607.f to include coatings, such as CARC. In 
addition, the commenter recommended that the export controls on CARC be 
changed to align more closely with export controls maintained by U.S. 
allies, who do not require an export license for CARC to most 
destinations. Specifically, the commenter felt that companies familiar 
with the European Union military list could become confused, because 
the controls in ECCN 1A607.f are similar to those described in ML.7.f, 
which does not control CARC. In the event that CARC continues to 
require a license to most destinations, the commenter recommended that 
all CARC be placed under the export licensing jurisdiction of a single 
U.S. Government agency to simplify jurisdictional and/or classification 
determinations.
    Response: ECCN 1A607.f indicates that it controls protection 
``equipment'' not controlled by USML Category XIV(f) that is 
``specially designed'' for military use and for defense against 
materials specified by USML XIV(a) or (b) or riot control agents 
controlled by ECCN 1C607.a. BIS believes that this control language, as 
revised in this final rule to specify ``protective coatings'' (as well 
as air conditioning units and protective clothing), is now sufficiently 
clear as to leave no doubt that it applies to paintings/coatings such 
as CARC. Consequently, the control language used in the June 17 
(toxicological agents and directed energy weapons) rule has been 
retained in this final rule with only the above-referenced change 
(i.e., the

[[Page 49519]]

revision of the parenthetical phrase in the introductory text of ECCN 
1A607.f to read, as follows: ``including air conditioning units, 
protective coatings, and protective clothing.''
    As for the scope of the license requirements that apply to CARC, 
all items in ECCN 1A607, including CARC, are subject to NS Column 1 and 
RS Column 1 license requirements, which apply to all destinations, 
except Canada. While the scope of the EAR license requirements on CARC 
is considerably broader than that maintained by some of our allies, 
exports of CARC are authorized without a license, under License 
Exception STA, for destinations in, or nationals of, Country Group A:5 
in Supplement No. 1 to part 740 of the EAR, which currently contains 36 
countries. Furthermore, the EAR requirements that apply to the CARC 
that were previously controlled under USML Category XIV and are now 
controlled under new ECCN 1A607.f represent a significant easing of the 
regulatory burden on exporters of such CARC through: (i) Elimination of 
some license requirements; (ii) greater availability of license 
exceptions; (iii) simpler license application procedures; and (iv) 
reduced or eliminated registration fees. With respect to the 
commenter's recommendation that all CARC be placed under the export 
licensing jurisdiction of a single U.S. Government agency, BIS notes 
that the only CARC that continue to be controlled under USML Category 
XIV (specifically, in paragraph (f)(7) of USML Category XIV) are those 
that have been qualified to one of the following four military 
specifications: MIL-PRF-32348, MIL-DTL-64159, MIL-C-46168, or MIL-DTL-
53039. In light of the anticipated benefits of moving certain CARC from 
USML Category XIV to new ECCN 1A607 on the EAR's CCL, as described 
above, there would appear to be little practical upside to continuing 
to control all CARC under the export licensing jurisdiction of a single 
U.S. Government agency.
    Comment: One commenter recommended that all items identified in 
USML Category XIV(f)(4) for individual protection against chemical and 
biological agents specified in USML Category XIV(a) or (b) should be 
controlled under new ECCN 1A607.f on the CCL. In addition, the 
commenter recommended that all individual protection ``equipment'' and 
clothing controlled under new ECCN 1A607.f should be authorized for 
export under License Exception BAG under special provisions similar to 
those currently applicable to ``personal protective equipment'' (i.e., 
ECCN 1A613.c or .d) in accordance with Section 740.14(h) of the EAR.
    Response: USML Category XIV(f)(4), as set forth in the State 
Department's companion rule to this final rule, controls equipment or 
items that offer individual or collective protection against items 
specified in USML Category XIV(a) or (b), as follows: (1) M53 Chemical 
Biological Protective Mask or M50 Joint Service General Purpose Mask 
(JSGPM); (2) filter cartridges containing sorbents controlled in USML 
Category XIV(f)(4)(iii); (3) ASZM-TEDA carbon; and (4) ensembles, 
garments, suits, jackets, pants, boots or socks for individual 
protection, and liners for collective protection, that allow no more 
than 1% breakthrough of GD, or no more than 2% breakthrough of any 
other chemical specified in USML Category XIV(a), when evaluated by 
executing the applicable method(s) of testing described in the current 
version of Test Operations Procedure (TOP) 08-2-201 (Collective 
Protection Novel Closures Testing) or 08-2-501 (Permeation Testing of 
Materials with Chemical Agents or Simulants--Swatch Testing) and using 
the defined DoD-specific requirements described therein.
    The control criteria in USML Category XIV(f)(4), as described 
above, are the result of a review of USML Category XIV, as part of the 
Administration's Export Control Reform (ECR) Initiative, to ensure that 
it controls only those items that are inherently military, provide the 
United States with a critical military or intelligence advantage, or 
otherwise warrant control on the USML. In the absence of any compelling 
evidence contrary to the results of this review, no change is 
contemplated, with respect to these USML Category XIV criteria, at this 
time. New ECCN 1A607.f controls ``equipment'' previously controlled 
under USML Category XIV(f)(4) or (f)(5) that the President has 
determined no longer warrants control on the USML (i.e., protection 
``equipment,'' including ``equipment'' for individual protection, not 
controlled by USML Category XIV(f) that is ``specially designed'' for 
military use and for defense against materials specified by USML XIV(a) 
or (b) or riot control agents controlled by ECCN 1C607.a). This final 
rule does not expand the scope of new ECCN 1A607.f to control all 
``equipment'' for individual protection against chemical and biological 
agents specified in USML Category XIV(a) or (b), because this change 
would be contrary to the President's determination, based on the 
results of the aforementioned review of USML Category XIV (i.e., it 
would result in the transfer to the CCL of items that are inherently 
military, provide the United States with a critical military or 
intelligence advantage, or otherwise warrant control on the USML).
    With respect to the commenter's recommendation that all individual 
protection ``equipment'' and clothing controlled under new ECCN 1A607.f 
should be authorized for export under License Exception BAG (under 
special provisions similar to those currently applicable to ``personal 
protective equipment''), this final rule amends the License Exception 
BAG provisions in Section 740.14(h) of the EAR to authorize exports, 
reexports, or in-country transfers of chemical or biological agent 
protective gear consistent with the requirements and restrictions 
described therein. In a corresponding change, this final rule also 
amends the License Exception TMP provisions in Section 740.9(a)(11) of 
the EAR to authorize temporary exports, reexports, or in-country 
transfers of chemical or biological agent protective gear consistent 
with the requirements and restrictions described therein. These changes 
are also intended to make the scope of these license exceptions, as 
they apply to chemical or biological agent protective gear controlled 
under new ECCN 1A607.f, conform with the scope of the ITAR exemption 
for personal protective equipment in Section 123.17 of the ITAR.
    Comment: One commenter noted that neither BIS's June 17 
(toxicological agents and directed energy weapons) rule nor State's 
companion proposed rule clearly indicated whether filter cartridges 
containing sorbents funded by the Department of Defense via contract or 
other funding authorization, as proposed to be controlled under USML 
Category XIV(n), would be controlled under new ECCN 1A607.f on the CCL 
or under USML Category XIV(f) or (n). In addition, the commenter noted 
that neither of these proposed rules clearly indicated whether filter 
cartridges that meet the requirements of specifications PRF-EA-2251 for 
the M61 filter cartridge, but do not contain ASZM-TEDA carbon, would be 
controlled under new ECCN 1A605.f or under USML Category XIV(f) or (n).
    Response: Neither of the observations made by the commenter 
requires any modification to new ECCN 1A607.f. Filter cartridges 
containing developmental sorbents are controlled under USML Category 
XIV(f)(4)(ii) if the sorbents were funded by the Department of Defense 
via contract or other funding authorization, as specified in USML 
Category XIV(n), and none of the

[[Page 49520]]

elements in Note 1 to paragraph (n) apply (i.e., the sorbents are 
determined to be subject to the EAR via a commodity jurisdiction 
determination or they are identified in the relevant Department of 
Defense contract or other funding authorization as being developed for 
both civil and military applications). The commenter's question 
concerning the export licensing jurisdiction status of filter 
cartridges reflects the fact that State's companion Category XIV/XVIII 
proposed rule did not specifically enumerate (in Category XIV) filter 
cartridges containing sorbents controlled under USML Category XIV(n). 
USML Category XIV(f)(ii), in State's proposed rule, specified that it 
controlled filter cartridges containing sorbents controlled under USML 
Category XIV(f)(iii), but the control status of filter cartridges 
containing sorbents enumerated in proposed USML Category XIV(n) was not 
specifically indicated. Consequently, State's companion Category XIV/
XVIII final rule corrects this oversight by clarifying USML Category 
XIV to indicate that it applies to filter cartridges that contain any 
of the sorbents specified under USML Category XIV(f)(iii) or (n) and, 
in so doing, eliminates the possibility that such filter cartridges 
could be controlled under new ECCN 1A607.f on the CCL (except to the 
limited extent that sorbents funded by the Department of Defense via 
contract or other funding authorization are excluded from USML Category 
XIV(n) for a specified period of time, as indicated in Note 3 thereto).
    In response to the commenter's request for clarification concerning 
controls on filter cartridges that meet the requirements of 
specifications PRF-EA-2251 for the M61 filter cartridge, but do not 
contain ASZM-TEDA carbon, their control status also would depend upon 
the sorbents that they contain. As indicated above, filter cartridges 
that contain any of the sorbents controlled by USML Category XIV (i.e., 
sorbents specified under paragraph (f)(iii) or (n) of Category XIV) are 
controlled under USML Category XIV. Otherwise, they are controlled 
under new ECCN 1A607.f.

ECCN 1A607.h (Detection/Identification ``Equipment'')

    Comment: One commenter interpreted BIS's June 17 (toxicological 
agents and directed energy weapons) rule and State's companion USML 
Category XIV/XVIII proposed rule as transferring to new ECCN 1A607.h on 
the CCL all detection equipment, previously controlled under USML 
Category XIV(f)(2), that is ``specially designed'' for military use for 
the detection of agents identified in proposed USML Category XIV(a) or 
(b), except for: (1) Detection equipment that is classified or that 
relates to classified information; and (2) military detection equipment 
developed under a DoD contract or other funding authorization, as 
described in proposed USML Category XIV(f)(2) and subject to the 
restriction in Note 3 thereto, which indicated that the controls in 
paragraph (f)(2) would apply only to controls dated one year (or later) 
after the date of publication of State's USML Category XIV final rule. 
Note 3 to paragraph (f)(2) was mistakenly included in USML Category 
XIV, as described in State's proposed rule; consequently, it does not 
appear in State's final rule.
    Response: New ECCN 1A607.h controls ``equipment'' not controlled by 
USML Category XIV(f) that is ``specially designed'' for military use 
and for the detection or identification of materials specified by USML 
Category XIV(a) or (b) or riot control agents controlled by ECCN 
1C607.a on the CCL. Because new ECCN 1A607.h indicates that it does not 
include any detection equipment that is controlled by USML Category 
XIV(f), the scope of the ECCN is necessarily dependent upon the scope 
of Category XIV(f), which, in turn, is subject to interpretation by the 
U.S. Department of State. Therefore, the Department of State, and not 
BIS, is the appropriate U.S. Government agency to confirm whether the 
commenter's statement is correct (in whole or in part), as it applies 
to the scope of new ECCN 1A607.h and the ``equipment'' previously 
controlled under USML Category XIV(f)(2). Consequently, this question 
should be addressed, with respect to specific detection ``equipment,'' 
through the submission of one or more commodity jurisdiction (CJ) 
requests to the State Department's Directorate of Defense Trade 
Controls (DDTC), consistent with the requirements in the ITAR.

ECCN 1A607.k (Medical Countermeasures)

    Comment: One commenter noted that items controlled under proposed 
new ECCN 1A607.k (military medical countermeasures ``equipment''), and 
related ``technology'' controlled under proposed new ECCN 1E607.a, 
would not be eligible for export/reexport under the License Exception 
GOV provisions in Section 740.11(d), International Inspections under 
the Chemical Weapons Convention (CWC), to destinations located outside 
of Country Group A:5 in Supplement No. 1 to part 740 of the EAR.
    Response: The commenter is correct in noting that ``equipment'' in 
new ECCN 1A607.k and related ``technology'' in new ECCN 1E607.a are not 
eligible for export under the License Exception GOV provisions in 
Section 740.11(d) of the EAR, except to destinations located in Country 
Group A:5. This restriction, which is described in Section 
740.11(d)(2)(iii) of the EAR, was implemented as part of BIS's April 16 
(initial implementation) rule in which the License Exception GOV 
provisions in Section 740.11 of the EAR were revised. Among the License 
Exception GOV provisions that were affected by these revisions were 
those authorizing exports and reexports to the Organization for the 
Prohibition of Chemical Weapons (OPCW) and exports and reexports by the 
OPCW for official international inspection and verification use under 
the terms of the CWC. Under the OPCW authorization, as revised, Section 
740.11(d)(2)(iii) of the EAR prohibits exports and reexports of items 
controlled under ``600 series'' ECCNs on the CCL to countries not 
listed in Country Group A:5. Country Group A:5 currently consists of 36 
countries, as established by BIS's April 16 (initial implementation) 
rule, which became effective on October 15, 2013. The scope of the OPCW 
authorization in License Exception GOV was the result of extensive U.S. 
Government interagency review and discussion. Furthermore, the scope of 
eligible countries for the OPCW authorization (i.e., 36 countries), as 
established by BIS's April 16 (initial implementation) rule, was 
initially broader than the country scope that was authorized under the 
License Exception GOV provisions for cooperating governments, as 
described in Section 740.11(c) of the EAR, which then authorized 
exports and reexports to 27 cooperating governments and agencies of the 
North Atlantic Treaty Organization (NATO). The country scope of the 
cooperating governments authorization under License Exception GOV was 
subsequently expanded, by BIS's Wassenaar Arrangement (WA) 2014 Plenary 
final rule (98 FR 29432, May 21, 2015), to include 41 cooperating 
governments and agencies of NATO. Currently, the country scope of the 
cooperating governments and OPCW authorizations under License Exception 
GOV are roughly equivalent (i.e., the former applies to four more 
countries than the latter--two of those countries are CWC States 
Parties and one is a special administrative region of a State Party). 
In light of the recent changes to the License Exception GOV provisions 
described above, BIS does

[[Page 49521]]

not have any immediate plans to address possible revisions to the 
country scope of the OPCW authorization. BIS also considers any such 
action to be outside the scope of this rulemaking, which does not 
specifically address EAR requirements involving the CWC and the OPCW.

ECCN 1A607.x (``Parts,'' ``Components,'' ``Accessories,'' and 
``Attachments'')

    Comment: One commenter noted that proposed new ECCN 1A607.x 
indicated that it controlled ``parts,'' ``components,'' 
``accessories,'' and ``attachments'' ``specially designed'' for the 
``equipment'' described in proposed ECCN 1A607.e, .f, .g, or .j. 
However, the commenter also noted that ``parts,'' ``components,'' 
``accessories,'' and ``attachments'' ``specially designed'' for the 
detection/identification ``equipment'' described in proposed ECCN 
1A607.h were not included in proposed ECCN 1A607.x. As a result, the 
commenter questioned whether any ``parts,'' ``components,'' 
``accessories,'' and ``attachments'' ``specially designed'' for 
detection/identification ``equipment'' that might be removed from the 
USML, as a result of the proposed revisions to USML Category XIV(f), 
would be controlled under proposed new ECCN 1A607 on the CCL (e.g., 
under proposed ECCN 1A607.x).
    Response: The commenter is correct in noting that proposed new ECCN 
1A607.x specified only those ``parts,'' ``components,'' 
``accessories,'' and ``attachments'' ``specially designed'' for the 
``equipment'' described in ECCN 1A607.e, .f, .g, or .j, and not those 
``parts,'' ``components,'' ``accessories,'' and ``attachments'' 
``specially designed'' for detection/identification ``equipment'' 
described in ECCN 1A607.h. This final rule corrects that oversight. New 
ECCN 1A607.x, as added to the CCL by this final rule, indicates that it 
controls ``parts,'' ``components,'' ``accessories,'' and 
``attachments'' that are ``specially designed'' for a commodity 
controlled by ECCN 1A607.e, .f, .g, .h, or .j or for a defense article 
controlled by USML Category XIV(f) and that are not enumerated or 
otherwise described elsewhere in the USML.

General Comments on Dissemination, Detection and Protection 
``Equipment''

    Comment: One commenter noted that the BIS and State Category XIV/
XVIII proposed rules omitted coverage of the Wassenaar Munitions List 
(WAML) items in WAML 7.a (Biological agents or radioactive materials 
adapted for use in war to produce casualties in humans and animals, 
degrade equipment, or damage crops or the environment).
    Response: The items noted by the commenter are not identified in 
any of the new ``600 series'' ECCNs described in BIS's June 17 
(toxicological agents and directed energy weapons) rule, but they are 
clearly enumerated under USML Category XIV in State's companion 
proposed rule. Proposed USML Category XIV(b)(1)(ii) identifies specific 
biological agents that have been militarized, as described in USML 
Category XIV(b)(1)(i), and proposed USML Category XIV(b)(2) describes 
biological agents identified under ECCN 1C351, 1C353, or 1C354 on the 
EAR's CCL that have been militarized, as described in USML Category 
XIV(b)(2)(i) and (b)(2)(ii). These defense articles are identified in 
the USML Category XIV amendments contained in State's companion rule to 
this final rule.
    Comment: One commenter noted that the following two Australia Group 
(AG) controlled items were not identified in either the BIS or State 
Category XIV/XVIII proposed rules:
    (1) Valves with a closure element designed to be interchangeable, 
as listed under 6.b on the AG Control List of Dual-Use Chemical 
Manufacturing Facilities and Equipment); and (2) nose-only exposure 
apparatus, as listed under 8.b on the AG Control List of Dual-Use 
Biological Equipment.
    Response: The commenter accurately noted that neither of the two 
items were identified in the BIS and State Category XIV/XVIII proposed 
rules. However, because these items are identified as dual-use items on 
the AG common control lists indicated above, neither item is within the 
scope of this rulemaking. The valves, described under 6.b on the AG 
chemical manufacturing facilities and equipment control list, are 
currently controlled under ECCN 2B350.g.2 on the CCL. The nose-only 
exposure apparatus, described under 8.b on the AG biological equipment 
common control list, was recently added to this AG control list and is 
currently controlled under ECCN 2B352.h based on a recent update of AG 
listed items on the CCL (see 81 FR 36458, June 7, 2016).
    Comment: One commenter indicated that some of the proposed new 
``600 series'' ECCNs in BIS's June 17 (toxicological agents and 
directed energy weapons) rule maintained unilateral controls on certain 
items that were proposed to be transferred to the CCL from USML 
Category XIV.
    Response: All the items described in the new ``600 series'' ECCNs 
created by this final rule were previously controlled on the USML under 
the ITAR and were added to these new ECCNs on the CCL only after the 
President determined that these items no longer warrant control on the 
USML for the reasons set forth above.

Changes Made by This Rule to Controls on Certain Dissemination, 
Detection and Protection ``Equipment'' and Related Items Previously 
Controlled Under USML Category XIV

    This final rule creates five new ``600 series'' ECCNs in CCL 
Category 1 (ECCNs 1A607, 1B607, 1C607, 1D607, and 1E607) that clarify 
the EAR controls applicable to certain dissemination, detection and 
protection ``equipment'' and related items that the President has 
determined no longer warrant control under USML Category XIV. Terms 
such as ``part,'' ``component'' ``accessories,'' ``attachments,'' and 
``specially designed'' are applied in the same manner in this rule as 
those terms are defined in Section 772.1 of the EAR. In addition, to 
assist exporters in determining the control status of their items, a 
``Specially Designed'' Decision Tool and a CCL Order of Review Decision 
Tool are available on the BIS Web site at: http://www.bis.doc.gov/index.php/decision-tree-tools.

New ECCN 1A607 Military dissemination ``equipment'' for riot control 
agents, military detection and protection ``equipment'' for 
toxicological agents (including chemical, biological, and riot 
control agents), and related commodities.

    In new ECCN 1A607, paragraphs .a through .d, paragraph .i, and 
paragraphs .l through .w are reserved. Paragraph .e of ECCN 1A607 
controls ``equipment'' ``specially designed'' for military use and for 
the dissemination of any of the riot control agents controlled in ECCN 
1C607.a. Paragraph .f of ECCN 1A607 controls protection ``equipment'' 
``specially designed'' for military use and for defense against either 
materials controlled by USML Category XIV(a) or (b) or any of the riot 
control agents in new ECCN 1C607.a. Paragraph .g of ECCN 1A607 controls 
decontamination ``equipment'' not controlled by USML Category XIV(f) 
that is ``specially designed'' for military use and for the 
decontamination of objects contaminated with materials controlled by 
USML Category XIV(a) or (b). Paragraph .h controls ``equipment'' not 
controlled by USML Category XIV(f) that is ``specially designed'' for 
military use and for the detection or identification of either 
materials specified by USML Category XIV(a) or (b) or riot control 
agents controlled by new ECCN 1C607.a. Paragraph .j controls 
``equipment'' ``specially

[[Page 49522]]

designed'' to: (i) Interface with a detector, shelter, vehicle, vessel, 
or aircraft controlled by the USML or a ``600 series'' ECCN; and (ii) 
collect and process samples of articles controlled in USML Category 
XIV(a) or (b). Paragraph .k controls medical countermeasures that are 
``specially designed'' for military use (including pre- and post- 
treatments, antidotes, and medical diagnostics) and ``specially 
designed'' to counter chemical agents controlled by USML Category 
XIV(a). Paragraph .x controls ``parts,'' ``components,'' 
``accessories,'' and ``attachments'' that are ``specially designed'' 
for a commodity controlled under ECCN 1A607.e, .f, .g, .h, or .j or a 
defense article controlled in USML Category XIV(f) and that are not 
enumerated or otherwise described elsewhere in the USML.

New ECCN 1B607 Military test, inspection, and production 
``equipment'' and related commodities ``specially designed'' for the 
``development,'' ``production,'' repair, overhaul, or refurbishing 
of commodities identified in ECCN 1A607 or 1C607, or defense 
articles enumerated or otherwise described in USML Category XIV.

    In new ECCN 1B607, paragraph .a controls ``equipment,'' not 
including incinerators, that is ``specially designed'' for the 
destruction of chemical agents controlled by USML Category XIV(a). 
Paragraph .b of ECCN 1B607 controls test facilities and ``equipment'' 
that are ``specially designed'' for military certification, 
qualification, or testing of commodities controlled by new ECCN 
1A607.e, .f, .g, .h, or .j or by USML Category XIV(f), except for 
XIV(f)(1). Paragraph .c of ECCN 1B607 controls tooling and 
``equipment'' ``specially designed'' for the ``development,'' 
``production,'' repair, overhaul, or refurbishing of commodities 
controlled under new ECCN 1A607.e, .f, .g, .h, or .j or USML Category 
XIV(f). Paragraphs .d through .w are reserved. Paragraph .x controls 
``parts,'' ``components,'' ``accessories,'' and ``attachments,'' not 
enumerated or otherwise described elsewhere in the USML, that are 
``specially designed'' for a commodity controlled by ECCN 1B607.b or .c 
or for a defense article controlled by USML Category XIV(f).
    As indicated above, ECCN 1B607.b does not control test facilities 
and ``equipment'' that are ``specially designed'' for military 
certification, qualification, or testing of commodities and are 
enumerated or otherwise described in USML Category XIV(f)(1), as set 
forth in State's companion rule to this final rule (e.g., see the 
equipment in USML Category XIV(f)(1)(ii) that is ``specially designed'' 
for testing the articles controlled in paragraph (a), (b), (c), (e), or 
(f)(4) of USML Category XIV). In addition to the test facilities and 
``equipment'' controlled by ECCN 1B607.b, see the tooling and 
``equipment'' classified under ECCN 2B350 or 2B352 for producing the 
chemical/biological agents, precursors, or defoliants described in USML 
Category XIV(a), (b), (c), or (e). The EAR also control tooling and 
``equipment'' to produce the antibodies/polynucleotides and vaccines 
described in USML Category XIV(g) and (h), respectively, as follows: 
lab ``equipment'' designated as EAR99 under the EAR; biological dual-
use ``equipment'' (including protective ``equipment'') classified under 
ECCN 2B352; and EAR-controlled biological systems for making vaccines 
(involving the use of mice, rabbits, etc.).

New ECCN 1C607 Tear gases, riot control agents and materials for the 
detection and decontamination of chemical warfare agents.

    New ECCN 1C607.a controls specified tear gases and riot control 
agents. Paragraph .b of ECCN 1C607 controls ``biopolymers'' not 
controlled by USML Category XIV(g) that are ``specially designed'' or 
processed for the detection or identification of chemical warfare (CW) 
agents specified by USML Category XIV(a) and the cultures of specific 
cells used to produce them. Paragraph .c controls specified 
``biocatalysts'' and biological systems that are not controlled by USML 
Category XIV(g) and are ``specially designed'' for the decontamination 
or degradation of CW agents specified by USML Category XIV(a). 
Paragraph .d controls chemical mixtures not controlled by USML Category 
XIV(f) that are ``specially designed'' for military use for the 
decontamination of objects contaminated with materials specified by 
USML Category XIV(a) or (b).

New ECCN 1D607 ``Software'' ``specially designed'' for the 
``development,'' ``production,'' operation, or maintenance of items 
controlled by 1A607, 1B607 or 1C607.

    New ECCN 1D607.a controls ``software'' ``specially designed'' for 
the ``development,'' ``production,'' operation, or maintenance of items 
controlled by ECCN 1A607, 1B607 or 1C607. Paragraph .b of ECCN 1D607 is 
reserved.

New ECCN 1E607 ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, 
overhaul, or refurbishing of items controlled by ECCN 1A607, 1B607, 
1C607, or 1D607.

    New ECCN 1E607.a controls ``technology'' ``required'' for the 
``development,'' ``production,'' operation, installation, maintenance, 
repair, overhaul, or refurbishing of items controlled by ECCN 1A607, 
1B607, 1C607, or 1D607. Paragraph .b of ECCN 1E607 is reserved.
    Amendments to License Exceptions BAG and TMP related to Individual 
Protection ``Equipment'' in ECCN 1A607.f.
    In response to public comments recommending that all individual 
protection ``equipment'' and clothing controlled under new ECCN 1A607.f 
should be authorized for export under License Exception BAG (under 
special provisions similar to those currently applicable to ``personal 
protective equipment''), this final rule amends the License Exception 
BAG provisions in Section 740.14(h) of the EAR to authorize exports, 
reexports, or in-country transfers of chemical or biological agent 
protective gear consistent with the requirements and restrictions 
described therein. In a corresponding change, this final rule also 
amends the License Exception TMP provisions in Section 740.9(a)(11) of 
the EAR to authorize temporary exports, reexports, or in-country 
transfers of chemical or biological agent protective gear consistent 
with the requirements and restrictions described therein. The 
amendments to License Exceptions BAG and TMP also change the 
requirements for Afghanistan to be consistent with those of the 
majority of other Country Group D:5 destinations (i.e., the U.S. person 
authorized to use the license exception must be affiliated with the 
U.S. Government and be traveling on official business or traveling in 
support of a U.S. Government contract). The same requirement applies to 
the use of these license exception provisions for Iraq, also a D:5 
country, with the additional option that the U.S. person must be 
traveling to Iraq under a direct authorization by the Government of 
Iraq and engaging in activities for, on behalf of, or at the request 
of, the Government of Iraq. These amendments are also intended to 
ensure that the scope of these license exceptions, as they apply to 
chemical or biological agent protective gear controlled under new ECCN 
1A607.f, conforms with the scope of the ITAR exemption for personal 
protective equipment in Section 123.17 of the ITAR (e.g., by correcting 
the provisions for Afghanistan, as described above, to be consistent 
with those of the majority of other Country Group D:5 destinations).

[[Page 49523]]

Tooling, Production ``Equipment,'' Test and Evaluation ``Equipment,'' 
Test Models and Other Articles Related to Directed Energy Weapons

Public Comments and BIS Responses

    BIS received comments from two parties in response to the proposed 
amendments in the June 17 (toxicological agents and directed energy 
weapons) rule related to tooling, production ``equipment,'' test, and 
evaluation ``equipment,'' test models and other articles related to 
directed energy weapons.

General Comments on Items Related to Directed Energy Weapons

    Comment: One commenter noted that the BIS and State Category XIV/
XVIII proposed rules omitted coverage of the Wassenaar Munitions List 
(WAML) items in WAML 19.f (``Laser'' systems ``specially designed'' to 
cause permanent blindness to unenhanced vision).
    Response: The items noted by the commenter are not identified in 
any of the new ``600 series'' ECCNs described in BIS's June 17 
(toxicological agents and directed energy weapons) rule, but they are 
clearly enumerated under USML Category XVIII in State's companion 
proposed rule. Proposed USML Category XVIII(a) identifies directed 
energy weapons (DEW) systems or ``equipment'' that, as their sole or 
primary purpose, cause permanent or flash blindness. These articles are 
identified in the USML Category XVIII amendments contained in State's 
companion rule to this final rule.
    Comment: One commenter indicated that some of the proposed new 
``600 series'' ECCNs in BIS's June 17 (toxicological agents and 
directed energy weapons) rule maintained unilateral controls on certain 
items that were proposed to be transferred to the CCL from the USML 
Category XVIII.
    Response: All the items described in the new ``600 series'' ECCNs 
created by this final rule were previously controlled on the USML under 
the ITAR and were added to these new ECCNs on the CCL only after the 
President determined that these items no longer warrant control on the 
USML for the reasons set forth above.

Changes Made by This Rule to Controls on Certain Tooling, Production 
``Equipment,'' Test and Evaluation ``Equipment'' and Test Models 
Previously Controlled Under USML Category XVIII

    This rule creates three new ``600 series'' ECCNs in CCL Category 6 
(ECCNs 6B619, 6D619 and 6E619) that clarify the EAR controls applicable 
to certain tooling, production ``equipment,'' test and evaluation 
``equipment,'' test models, and related articles for Directed Energy 
Weapons (DEWs) that the President has determined no longer warrant 
control under USML Category XVIII. Terms such as ``part,'' 
``component'' ``accessories,'' ``attachments,'' and ``specially 
designed'' are applied in the same manner in this rule as those terms 
are defined in Section 772.1 of the EAR. In addition, to assist 
exporters in determining the control status of their items, a 
``Specially Designed'' Decision Tool and a CCL Order of Review Decision 
Tool are available on the BIS Web site at: http://www.bis.doc.gov/index.php/decision-tree-tools.

New ECCN 6B619 Test, inspection and production ``equipment,'' and 
related commodities, ``specially designed'' for the ``development,'' 
``production,'' repair, overhaul, or refurbishing of commodities 
enumerated or otherwise described in USML Category XVIII.

    New ECCN 6B619.a controls tooling, templates, jigs, mandrels, 
molds, dies, fixtures, alignment mechanisms, and test ``equipment'' not 
enumerated or otherwise described in USML Category XVIII and not 
elsewhere specified on the USML that are ``specially designed'' for the 
``development,'' ``production,'' repair, overhaul, or refurbishing of 
commodities controlled by USML Category XVIII. The commodities that are 
controlled under new ECCN 6B619.a are used to produce directed energy 
weapons (including non-lethal directed energy weapons, such as active 
denial systems) and are similar to commodities that are in operation in 
a number of other countries, some of which are not allies of the United 
States or members of multinational export control regimes. Research and 
development is currently underway to determine the possible uses of 
such commodities (e.g., to protect the Earth from asteroids, or for 
perimeter security and crowd control). Possession of such commodities 
does not confer a significant military advantage on the United States 
and, therefore, the inclusion of such commodities on the CCL would be 
appropriate.
    Paragraphs .b through .w of ECCN 6B619 are reserved. Paragraph .x 
controls ``parts,'' ``components,'' ``accessories,'' and 
``attachments'' ``specially designed'' for a commodity subject to 
control under paragraph .a of this ECCN and not enumerated or otherwise 
described in USML Category XVIII and not elsewhere specified on the 
USML.

New ECCN 6D619 ``Software'' ``specially designed'' for the 
``development,'' ``production,'' operation or maintenance of 
commodities controlled by 6B619.

    New ECCN 6D619 controls ``software'' ``specially designed'' for the 
``development,'' ``production,'' operation or maintenance of 
commodities controlled by ECCN 6B619. Inclusion of this ``software'' on 
the CCL is appropriate, because it is limited to ``software'' 
``specially designed'' for ECCN 6B619 commodities and does not include 
any ``software'' for items specifically enumerated or otherwise 
described on the USML.

New ECCN 6E619 ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, 
overhaul or refurbishing of commodities controlled by 6B619 or 
``software'' controlled by 6D619.

    New ECCN 6E619 controls ``technology'' ``required'' for the 
``development,'' ``production,'' operation, installation, maintenance, 
repair, overhaul or refurbishing of commodities controlled by ECCN 
6B619, or ``software'' controlled by 6D619. Inclusion of this 
``technology'' on the CCL is appropriate, because it is limited to 
``technology'' ``required'' for ECCN 6B619 commodities and does not 
include any ``technology'' for items specifically enumerated or 
otherwise described on the USML.

Applicable Controls for the New ``600 Series'' ECCNs Created by This 
Rule

    Pursuant to the framework established in the April 16 (initial 
implementation) rule, detection and protection ``equipment'' and 
related commodities classified under ECCN 1A607; related test, 
inspection and production ``equipment'' classified under ECCN 1B607; 
tear gases, riot control agents and related commodities classified 
under ECCN 1C607 (except for items listed in ECCN 1C607.a.10, .a.11, 
.a.12, or a.14, all of which are specifically excluded from WAML 
Category 7 by Note 1 thereto); related ``software'' classified under 
ECCN 1D607 (except ``software'' for items listed in ECCN 1C607.a.10, 
.a.11, .a.12, or a.14); and related ``technology'' classified under 
ECCN 1E607 (except ``technology'' for items listed in ECCN 1C607.a.10, 
.a.11, .a.12, or a.14 and 1D607 ``software'' therefor) are subject to 
the licensing policies that apply to items controlled for national 
security (NS) reasons, as described in Sec.  742.4(b)(1)--specifically, 
NS Column 1 controls. The same level of NS controls and licensing 
policies also apply to the directed energy weapons items that are 
controlled under the three new ECCNs (i.e., test,

[[Page 49524]]

inspection, and production ``equipment'' classified under ECCN 6B619; 
related ``software'' classified under ECCN 6D619; and related 
``technology'' classified under ECCN 6E619) that this rule adds to 
Category 6 of the CCL. In addition, all the items that are controlled 
under the new ECCNs created by this rule are subject to the regional 
stability (RS) licensing policies set forth in Sec.  742.6(a)(1), i.e., 
RS Column 1, as well as antiterrorism (AT Column 1) and United Nations 
(UN) controls.
    Also, in accordance with Sec. Sec.  742.4(b)(1) and 742.6(b)(1) of 
the EAR, exports and reexports of ``600 series'' items controlled for 
NS or RS reasons will be reviewed consistent with United States arms 
embargo policies in Sec.  126.1 of the ITAR, if destined to a country 
listed in Country Group D:5 of Supplement No. 1 to part 740 of the EAR. 
All items controlled for NS or RS reasons, as set forth in this final 
rule, are subject to this licensing policy.

Effects of This Final Rule

    BIS believes that the principal effect of this final rule, when 
considered in the context of similar rules being published as part of 
the ECR, will be to provide greater flexibility for exports and 
reexports to NATO member countries and other multiple-regime-member 
countries of items the President determines no longer warrant control 
on the USML. This greater flexibility is in the form of: the 
application of the EAR's de minimis threshold principle for items 
constituting less than a de minimis amount of controlled U.S.-origin 
content in foreign made items; the availability of license exceptions, 
particularly License Exceptions ``Servicing and Replacement of Parts 
and Equipment'' (RPL) and ``Strategic Trade Authorization'' (STA); the 
elimination of requirements for manufacturing license agreements and 
technical assistance agreements in connection with exports of 
technology; and a reduction in, or the elimination of, exporter and 
manufacturer registration requirements and associated registration 
fees. Some of these specific effects are discussed in more detail, 
below.

De Minimis

    The April 16 (initial implementation) rule imposed certain unique 
de minimis requirements on items controlled under the new ``600 
series'' ECCNs. Section 734.3 of the EAR provides, inter alia, that, 
under certain conditions, items made outside the United States that 
incorporate items subject to the EAR are not subject to the EAR if they 
do not exceed a ``de minimis'' percentage of controlled U.S. origin 
content. Under Section 734.4 of the EAR, as amended by the April 16 
(initial implementation) rule, there is no eligibility for de minimis 
treatment for a foreign-made item that incorporates U.S.-origin ``600 
series'' items when the foreign-made item is destined for a country 
that is subject to a U.S. arms embargo, i.e., a country listed in 
Country Group D:5 of Supplement No. 1 to part 740 of the EAR. Items 
controlled under the new ``600 series'' ECCNs created by this rule are 
eligible for de minimis treatment under the EAR, provided that the 
foreign-made items into which they are incorporated are not destined 
for a country listed in Country Group D:5. In contrast, the AECA does 
not permit the ITAR to have a de minimis treatment for USML-listed 
items, regardless of the significance or insignificance of the U.S.-
origin content or the percentage of U.S.-origin content in the foreign-
made item (i.e., USML-listed items remain subject to the ITAR when they 
are incorporated abroad into a foreign-made item, regardless of either 
of these factors).

Use of License Exceptions

    The April 16 (initial implementation) rule imposed certain 
restrictions on the use of license exceptions for items controlled 
under ``600 series'' ECCNs on the CCL. The general restrictions that 
apply to the use of license exceptions for such items are described in 
Sec.  740.2(a)(13) of the EAR. The EAR provisions that describe the 
requirements specific to individual license exceptions contain 
additional restrictions on the use of license exceptions for such 
items.
    For example, this rule authorizes limited License Exception STA 
availability for the new ``600 series'' ECCNs contained herein. None of 
the items controlled under these new ECCNs are eligible for the STA 
``controls of lesser sensitivity'' described in Sec.  740.20(c)(2) of 
the EAR. Instead, STA eligibility for all such items is limited to the 
destinations listed in Sec.  740.20(c)(1) of the EAR (i.e., Country 
Group A:5 destinations indicated in Supplement No. 1 to part 740 of the 
EAR). In addition, such items must be for: (1) ultimate end-use by a 
person of a type specified in Sec.  740.20(b)(3)(ii) of the EAR (i.e., 
the armed forces, police, paramilitary, law enforcement, customs, 
correctional, fire, or a search and rescue agency of a government of 
one of the countries listed in Country Group A:5 or the United States 
Government); or (2) the ``development,'' ``production,'' operation 
installation, maintenance, repair, overhaul, or refurbishing of an 
item, in one of the countries listed in Country Group A:5 or the United 
States, that will ultimately be used by any such government agencies, 
the United States Government, or by a person in the United States. The 
use of License Exception STA also may be authorized, under certain 
circumstances described in Sec.  740.20(b)(3)(ii)(C), where the U.S. 
Government has otherwise authorized the ultimate end-use under a 
license.
    None of the items controlled under the new ``600 series'' ECCNs 
created by this rule are treated as ``end items'' for purposes of 
License Exception STA and, therefore, such items are not subject to the 
License Exception STA eligibility request requirements in Sec.  
740.20(g) of the EAR.
    Items controlled under new ECCN 1B607 or 6B619 are also eligible 
for License Exception LVS (limited value shipments) up to a value of 
$1,500, TMP (temporary exports), and RPL (servicing and replacement 
parts). License Exceptions TMP and RPL also are available for items 
controlled under new ECCN 1A607. In addition, special provisions in 
License Exception TMP (see Sec.  740.9(a)(11) of the EAR) and License 
Exception BAG (baggage) (see Sec.  740.14(h) of the EAR), as amended by 
this final rule, authorize exports, reexports, or in-country transfers 
of certain protection ``equipment'' described in ECCN 1A607.f.
    BIS believes that the restrictions that apply to the use of license 
exceptions for the items in the new ``600 series'' ECCNs represents an 
overall reduction from the level of restrictions that previously 
applied to such items on the USML. This is particularly true with 
respect to exports of such items to NATO members and multiple-regime 
member countries.

Alignment With the Wassenaar Arrangement Munitions List

    Since the beginning of ECR, the Administration has stated that the 
reforms will be consistent with the United States' obligations to the 
multilateral export control regimes. Accordingly, the Administration 
has, in this final rule, exercised its national discretion to 
implement, clarify, and, to the extent feasible, align its controls 
with those of the regimes. In this rule, new ECCNs 1A607 and 1C607 
implement, to the extent possible, the controls in WAML Category 7; new 
ECCNs 1B607 and 6B619 implement, to the extent possible, the controls 
in WAML Category 18 for production ``equipment;'' new ECCNs 1D607 and 
6D619 implement, to the extent possible, the controls in WAML

[[Page 49525]]

Category 21 for ``software;'' and new ECCNs 1E607 and 6E619 implement, 
to the extent possible, the controls in WAML Category 22 for 
``technology.''

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 (Aug. 11, 2015), has continued the Export 
Administration Regulations in effect under the International Emergency 
Economic Powers Act (50 U.S.C. 1701 et seq.). 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 designated a ``significant regulatory 
action,'' although not economically significant, under Executive Order 
12866. Accordingly, the rule has been reviewed by the Office of 
Management and Budget (OMB).
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor is any person 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 final rule affects the following 
approved collections: Simplified Network Application Processing System 
(control number 0694-0088), which includes, among other things, license 
applications; License Exceptions and Exclusions (0694-0137); 
recordkeeping (0694-0096); export clearance (0694-0122); and the 
Automated Export System (0607-0152). The discussion, below, is intended 
to provide a general overview of possible burden changes as a result of 
all the ECR rules published by BIS, and not just this final rule, which 
affects items previously controlled under USML Category XIV or XVIII. 
No changes in burden for any of these collections is anticipated at 
this time, other than as indicated in the discussion, below.
    As stated in the proposed rule published on July 15, 2011 (76 FR 
41958) (the ``July 15 proposed rule''), BIS initially estimated that 
the combined effect of all rules to be published, adding items to the 
EAR that would be removed from the ITAR as part of the Administration's 
Export Control Reform Initiative, would increase the number of license 
applications to be submitted to BIS by approximately 16,000 annually, 
resulting in an increase in burden hours of 5,067 (16,000 transactions 
at 17 minutes each) under control number 0694-0088. As the review of 
the USML has progressed, the interagency group has gained more specific 
information about the number of items that would come under BIS 
jurisdiction and whether those items would be eligible for export under 
license exception. As of June 21, 2012, BIS revised its estimate to 
reflect an increase in license applications of 30,000 annually, 
resulting in an increase in burden hours of 8,500 (30,000 transactions 
at 17 minutes each) under control number 0694-0088. BIS continues to 
believe that its revised estimate is accurate. Notwithstanding this 
increase in license applications under the EAR, the net burden that 
U.S. export controls impose on U.S. exporters is expected to go down, 
as described below, as a result of the transfer of less sensitive 
military items to the jurisdiction of the Department of Commerce, under 
the EAR, and the application of the license exceptions and other 
provisions in the EAR that are described in this final rule.
    As implemented by this rule, certain dissemination, detection and 
protection ``equipment'' and related articles currently controlled 
under USML Category XIV in the ITAR and certain tooling, production 
``equipment,'' test and evaluation ``equipment,'' test models and 
related articles currently controlled under USML Category XVIII of the 
ITAR are now subject to the licensing jurisdiction of the Department of 
Commerce under the EAR and its CCL, and also are eligible for certain 
license exceptions, including License Exception STA. For example, items 
controlled under new ECCN 1A607, 1B607, 1C607, 1D607, 1E607, 6B619, 
6D619, or 6E619 are now eligible under certain provisions of License 
Exception STA and do not need a determination of eligibility as 
described in Sec.  740.20(g) of the EAR. BIS believes that the 
increased use of License Exception STA resulting from the combined 
effect of all rules to be published, adding items to the EAR that would 
be removed from the ITAR as part of the Administration's Export Control 
Reform Initiative, would increase the burden associated with control 
number 0694-0137 by about 23,858 hours (20,450 transactions at 1 hour 
and 10 minutes each).
    BIS expects that this increase in burden hours under the EAR will 
be more than offset by a reduction in the burden hours associated with 
currently approved collections related to the ITAR. With few 
exceptions, most exports of the dissemination, detection and protection 
``equipment'' and related articles and the tooling, production 
``equipment,'' test and evaluation ``equipment,'' test models and 
related articles that this rule adds to the CCL previously required 
State Department authorization, even when destined to NATO member 
states and other close allies. In addition, the exports of 
``technology'' necessary to produce such items in the inventories of 
the United States and its NATO and other close allies previously 
required State Department authorization. Under the EAR, as implemented 
by this rule, such ``technology'' is now eligible for export to NATO 
member states and other close allies under License Exception STA, 
unless otherwise specifically excluded.
    The anticipated reduction in burden hours will particularly impact 
exporters of ``parts'' and ``components'' that are no longer be subject 
to the ITAR, because, with few exceptions, the ITAR exempt from license 
requirements only exports to Canada. Most exports of such ``parts'' and 
``components,'' even when destined to NATO and other close allies, 
previously required State Department authorization. Under the EAR, as 
implemented by this rule, a small number of low-level ``parts'' and 
``components'' do not require a license to most destinations, while 
most other ``parts'' and ``components'' identified under the new ``600 
series'' ECCNs are eligible for export to NATO and other close allies 
under License Exception STA.
    Use of License Exception STA imposes a paperwork and compliance 
burden because, for example, exporters must furnish information about 
the item that is being exported to the consignee and obtain from the 
consignee an acknowledgement and commitment to comply with the 
requirements of the EAR. However, the Administration believes that 
complying with the requirements of STA is likely to be less

[[Page 49526]]

burdensome than applying for licenses. For example, under License 
Exception STA, a single consignee statement can apply to an unlimited 
number of products, need not have an expiration date and need not be 
submitted to the government in advance for approval. Suppliers with 
regular customers can tailor a single statement and assurance to match 
their business relationship, rather than applying repeatedly for 
licenses with every purchase order, to supply allied and, in some 
cases, U.S. forces with routine replacement parts and components.
    Even in situations in which a license is required under the EAR, 
the burden likely will be reduced, compared to the previous license 
requirement under the ITAR. In particular, license applications for 
exports of ``technology'' controlled by ECCN 1E607 or 6E619 are likely 
to be less complex and burdensome than the authorizations required to 
export ITAR-controlled ``technology,'' i.e., Manufacturing License 
Agreements and Technical Assistance Agreements.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under E.O. 13132.
    4. The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 
601 et seq., generally requires an agency to prepare an initial 
regulatory flexibility analysis (IRFA) for any rule subject to the 
notice and comment rulemaking requirements under the Administrative 
Procedure Act (5 U.S.C. 553) or any other statute, unless the agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities. Under section 605(b) of the 
RFA, however, if the head of an agency certifies that a rule will not 
have a significant impact on a substantial number of small entities, 
the RFA does not require the agency to prepare a regulatory flexibility 
analysis. Accordingly, pursuant to section 605(b), the Chief Counsel 
for Regulation, Department of Commerce, has certified to the Chief 
Counsel for Advocacy, Small Business Administration, that this proposed 
rule, if promulgated, will not have a significant impact on a 
substantial number of small entities. The rationale for this 
certification is as follows.

Number of Small Entities

    Although BIS does not collect data on the size of entities that 
apply for, and are issued, export licenses and is, therefore, unable to 
estimate the exact number of small entities--as defined by the Small 
Business Administration's regulations implementing the RFA--BIS 
acknowledges that some small entities may be affected by this proposed 
rule.

Economic Impact

    The amendments set forth in this rule are part of the 
Administration's ECR initiative, which seeks to revise the USML to be a 
positive control list--one that does not use generic, catch-all control 
text to describe items subject to the ITAR--and to move some items that 
the President has determined no longer warrant control under the ITAR 
to control under the EAR and its CCL. Such items, along with certain 
military items currently identified on the CCL (most of which are 
identified on the WAML), will be controlled under new ``600 series'' 
ECCNs on the CCL. In addition, certain other items currently on the CCL 
will move from existing ECCNs to the new ``600 series'' ECCNs.
    This rule addresses certain dissemination, detection and protection 
``equipment'' and related articles previously enumerated or otherwise 
described in USML Category XIV (Toxicological Agents, Including 
Chemical Agents, Biological Agents, and Associated Equipment) and 
certain tooling, production ``equipment,'' test and evaluation 
``equipment,'' test models and related articles previously enumerated 
or otherwise described in USML Category XVIII (Directed Energy 
Weapons). Most toxicological agents (i.e., chemical and biological 
agents) and associated equipment and all Directed Energy Weapons (DEWs) 
systems ``specially designed'' or modified for military applications, 
equipment ``specially designed'' or modified to detect, identify or 
defend against such systems, and ``specially designed'' ``parts,'' 
``components,'' ``accessories'' and ``attachments'' for such systems or 
equipment remain on the USML. However, many other ``parts'' and 
``components'' are now subject to the EAR (as items described in ECCN 
1A607.x, 1B607.x, or 6B619.x), unless specifically enumerated or 
otherwise described on the USML. Many of these ``parts'' and 
``components'' are more likely, than the USML articles described above, 
to be produced by small businesses. In addition, officials of the 
Department of State have informed BIS that license applications for 
such ``parts'' and ``components'' represent a high percentage of the 
license applications for USML articles reviewed by that department. 
Changing the jurisdictional status of certain Category XIV and Category 
XVIII items will reduce the burden on small entities (and other 
entities as well) through: (i) Elimination of some license 
requirements; (ii) greater availability of license exceptions; (iii) 
simpler license application procedures; and (iv) reduced or eliminated 
registration fees.
    Moreover, ``parts'' and ``components'' that are controlled under 
the ITAR remain under ITAR control when incorporated into foreign-made 
items, regardless of the significance or insignificance of the item. 
This discourages foreign buyers from incorporating such U.S. content. 
The availability of de minimis treatment under the EAR, for those items 
that are no longer controlled under the ITAR, may reduce the 
disincentive for foreign manufacturers to purchase U.S.-origin 
``parts'' and ``components,'' a development that potentially would mean 
greater sales for U.S. suppliers, including small entities.
    Many exports and reexports of the Category XIV or Category XVIII 
articles that are added to the CCL by this rule (particularly, the 
``parts'' and ``components'' that are controlled under new ECCN 
1A607.x, 1B607.x, or 6B619.x) are now eligible for license exceptions 
that apply to exports to U.S. Government agencies, exports of ``parts'' 
and ``components'' for use as replacement parts, temporary exports and 
limited value exports (for ECCN 1B607 and 6B619 items, only), as well 
as License Exception STA, thereby reducing the number of licenses that 
exporters will need to obtain for these items. License exceptions under 
the EAR allow suppliers to send routine replacement parts and low level 
parts to NATO and other close allies and export control regime partners 
for use by those governments and for use by contractors building 
equipment for those governments or for the U.S. Government without 
having to obtain export licenses. Under License Exception STA, the 
exporter needs to furnish information about the item being exported to 
the consignee and obtain a statement from the consignee that, among 
other things, will commit the consignee to comply with the EAR and 
other applicable U.S. laws. Because such statements and obligations can 
apply to an unlimited number of transactions and have no expiration 
date, they will result in a net reduction in burden on transactions 
routinely approved by the government through the license application 
process that the License Exception STA statements would replace.
    Even for exports and reexports for which a license will be 
required, the process for obtaining a license is simpler and less 
costly under the EAR. When a USML Category XIV or Category

[[Page 49527]]

XVIII article is moved to the CCL, the number of destinations for which 
a license is required remains unchanged. However, the burden on the 
license applicant decreases because the licensing procedure for CCL 
items is simpler and more flexible than the licensing procedure for 
USML articles.
    Under the USML licensing procedure, an applicant must include a 
purchase order or contract with its application. There is no such 
requirement under the CCL licensing procedure. This difference gives 
the CCL applicant at least two advantages. First, the applicant has a 
way to determine whether the U.S. Government will authorize the 
transaction before it enters into potentially lengthy, complex and 
expensive sales presentations or contract negotiations. Under the USML 
procedure, the applicant must caveat all sales presentations with a 
reference to the need for government approval, and is more likely to 
engage in substantial effort and expense only to find that the 
government will reject the application. Second, a CCL license applicant 
need not limit its application to the quantity or value of one purchase 
order or contract. It may apply for a license to cover all of its 
expected exports or reexports to a specified consignee over the life of 
a license (normally four years, but maybe longer if circumstances 
warrant a longer period), thus reducing the total number of licenses 
for which the applicant must apply.
    In addition, many applicants exporting or reexporting items that 
this rule transfers from the USML to the CCL will realize cost savings 
through the elimination of some or all registration fees assessed under 
the USML's licensing procedure. Currently, USML applicants must pay to 
use the USML licensing procedure even if they never actually are 
authorized to export. Registration fees for manufacturers and exporters 
of articles on the USML start at $2,250 per year, increase to $2,750 
for organizations applying for one to ten licenses per year and further 
increase to $2,750 plus $250 per license application (subject to a 
maximum of three percent of total application value) for those who need 
to apply for more than ten licenses per year. Conversely, there are no 
registration or application processing fees for applications to export 
items listed on the CCL. Entities who applied for licenses from the 
Department of State, for the Category XIV or Category XVIII items 
subject to this rulemaking that are removed from the USML and added to 
the CCL, will find their registration fees reduced if the number of 
USML licenses those entities need declines. If an entity's entire 
product line moves to the CCL, its ITAR registration and registration 
fee requirement will be eliminated.

Conclusion

    BIS expects that the changes to the EAR implemented by this rule 
will have a positive effect on all affected entities, including small 
entities. While BIS acknowledges that this rule may have some cost 
impacts on small (and other) entities, those costs are more than offset 
by the benefits to the entities from the licensing procedures under the 
EAR, which are much less costly and less time consuming than the 
procedures under the ITAR. As noted above, any new burdens created by 
this rule will be offset by a reduction in the number of items that 
will require a license, increased opportunities for use of license 
exceptions for exports to certain countries, simpler export license 
applications, reduced or eliminated registration fees and application 
of a de minimis threshold for foreign-made items incorporating U.S.-
origin parts and components, all of which will reduce the incentive for 
foreign buyers to design out or avoid U.S.-origin content. Accordingly, 
the Chief Counsel for Regulation, Department of Commerce, has certified 
to the Chief Counsel for Advocacy, Small Business Administration, that 
this rule, if implemented, would not have a significant economic impact 
on a substantial number of small entities. Accordingly, an initial 
regulatory flexibility analysis is not required, and none has been 
prepared.

List of Subjects

15 CFR Part 740

    Administrative practice and procedure, Exports, Reporting and 
recordkeeping requirements.

15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

    For the reasons stated in the preamble, parts 740 and 774 of the 
Export Administration Regulations (15 CFR parts 730-774) are amended as 
follows:

PART 740--[AMENDED]

0
1. The authority citation for 15 CFR part 740 continues to read as 
follows:

    Authority:  50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
22 U.S.C. 7201 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
2. Section 740.9 is amended by revising paragraph (a)(11) to read as 
follows:


Sec.  740.9  Temporary imports, exports, reexports, and transfers (in-
country) (TMP).

* * * * *
    (a) * * *
    (11) Personal protective ``equipment'' classified under ECCN 
1A613.c or .d and individual protection ``equipment'' classified under 
ECCN 1A607.f--(i) Temporary exports, reexports, or in-country transfers 
to countries not identified in Country Group D:5. U.S. persons may 
temporarily export or reexport one set of body armor classified under 
ECCN 1A613.d (which may include one helmet classified under ECCN 
1A613.c) or one set of chemical or biological agent protective gear 
classified under ECCN 1A607.f (which may include one additional filter 
canister classified under ECCN 1A607.x) to countries not identified in 
Country Group D:5, provided that:
    (A) The items are with the U.S. person's baggage or effects, 
whether accompanied or unaccompanied (but not mailed); and
    (B) The items are for that U.S. person's exclusive use and not for 
transfer of ownership unless reexported or transferred (in-country) to 
another U.S. person.
    (ii) Temporary exports, reexports, or transfers (in-country) to 
countries identified in Country Group D:5--(A) Iraq. U.S. persons may 
temporarily export or reexport one set of body armor classified under 
ECCN 1A613.d (which may include one helmet classified under ECCN 
1A613.c) or one set of chemical or biological agent protective gear 
classified under ECCN 1A607.f (which may include one additional filter 
canister classified under ECCN 1A607.x) to Iraq, for personal use, 
provided that the requirements in paragraph (a)(11)(i) of this section 
are met. In addition, the U.S. person must be affiliated with the U.S. 
Government and traveling on official business or traveling in support 
of a U.S. Government contract, or the U.S. person must be traveling to 
Iraq under a direct authorization by the Government of Iraq and 
engaging in activities for, on behalf of, or at the request of, the 
Government of Iraq. Documentation regarding direct authorization from 
the Government of Iraq shall include an English translation.
    (B) Other countries in Country Group D:5. U.S. persons may 
temporarily export or reexport one set of body armor classified under 
ECCN 1A613.d (which may include one helmet classified under ECCN 
1A613.c) or one set of chemical or biological agent protective

[[Page 49528]]

gear classified under ECCN 1A607.f (which may include one additional 
filter canister classified under ECCN 1A607.x) to countries in Country 
Group D:5 (except Iraq), for personal use, provided that the 
requirements in paragraph (a)(11)(i) of this section are met, and the 
U.S. person is affiliated with the U.S. Government traveling on 
official business or is traveling in support of a U.S. Government 
contract.
    (iii) Items exported, reexported, or transferred (in-country) under 
this paragraph (a)(11), if not consumed or destroyed in the normal 
course of authorized temporary use abroad, must be returned to the 
United States or other country from which the items were so transferred 
as soon as practicable but no later than four years after the date of 
export, reexport or transfer (in-country).
* * * * *

0
3. Section 740.14 is amended by revising paragraphs (h)(1) and (2) to 
read as follows:


Sec.  740.14  Baggage (BAG).

* * * * *
    (h) Special provisions: personal protective ``equipment'' 
classified under ECCN 1A613.c or .d and individual protection 
``equipment'' classified under ECCN 1A607.f--(1) Exports, reexports, or 
in-country transfers to countries not identified in Country Group D:5. 
U.S. persons may export, reexport, or transfer (in-country) one set of 
body armor classified under ECCN 1A613.d (which may include one helmet 
classified under ECCN 1A613.c) or one set of chemical or biological 
agent protective gear classified under ECCN 1A607.f (which may include 
one additional filter canister classified under ECCN 1A607.x) to 
countries not identified in Country Group D:5, provided that:
    (i) The items are with the U.S. person's baggage or effects, 
whether accompanied or unaccompanied (but not mailed); and
    (ii) The items are for that person's exclusive use and not for 
transfer of ownership unless reexported or transferred (in-country) to 
another U.S. person.
    (2) Exports, reexports, or in-country transfers to countries 
identified in Country Group D:5--(i) Iraq. U.S. persons may export, 
reexport, or transfer (in-country) one set of body armor classified 
under ECCN 1A613.d (which may include one helmet classified under ECCN 
1A613.c) or one set of chemical or biological agent protective gear 
classified under ECCN 1A607.f (which may include one additional filter 
canister classified under ECCN 1A607.x) to Iraq, for personal use, 
provided that the requirements in paragraph (h)(1) of this section are 
met. In addition, the U.S. person must be affiliated with the U.S. 
Government and traveling on official business or traveling in support 
of a U.S. Government contract, or the U.S. person must be traveling to 
Iraq under a direct authorization by the Government of Iraq and 
engaging in activities for, on behalf of, or at the request of, the 
Government of Iraq. Documentation regarding direct authorization from 
the Government of Iraq shall include an English translation.
    (ii) Other countries in Country Group D:5. U.S. persons may export, 
reexport, or transfer (in-country) one set of body armor classified 
under ECCN 1A613.d (which may include one helmet classified under ECCN 
1A613.c) or one set of chemical or biological agent protective gear 
classified under ECCN 1A607.f (which may include one additional filter 
canister classified under ECCN 1A607.x) to countries in Country Group 
D:5 (except Iraq), for personal use, provided that the requirements in 
paragraph (h)(1) of this section are met, and the U.S. person is 
affiliated with the U.S. Government traveling on official business or 
is traveling in support of a U.S. Government contract.
* * * * *

PART 774--[AMENDED]

0
4. 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
5. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Special Materials and Related Equipment, Chemicals, 
``Microorganisms,'' and ``Toxins,'' add ECCN 1A607 between ECCNs 1A290 
and 1A613 to read as follows:

Supplement No. 1 to Part 774--the Commerce Control List

* * * * *
1A607 Military dissemination ``equipment'' for riot control agents, 
military detection and protection ``equipment'' for toxicological 
agents (including chemical, biological, and riot control agents), 
and related commodities (see List of Items Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                Control(s)                       No. 1  to Part 738)
 
NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

LVS: N/A
GBS: N/A
CIV: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 1A607.

List of Items Controlled

Related Controls: (1) Vaccines identified in ECCN 1C991 are not 
controlled by this ECCN. (2) See 22 CFR 121.1 (USML), Category 
XIV(h), for vaccines that are subject to the ITAR. (3) Protection 
and detection equipment and related items identified in ECCN 1A004, 
1A995, or 2B351 are not controlled by this ECCN. (4) See 22 CFR 
121.1 (USML), Category XIV(f), for dissemination, detection and 
protection equipment that is subject to the ITAR. (5) See ECCN 0A919 
for ``military commodities'' located and produced outside the United 
States that incorporate more than a de minimis amount of US-origin 
``600 series'' controlled content.
Related Definitions: N/A
Items:

    a. through d. [Reserved]
    e. ``Equipment'' ``specially designed'' for military use and for 
the dissemination of any of the riot control agents controlled in 
ECCN 1C607.a.
    f. Protection ``equipment'' (including air conditioning units, 
protective coatings, and protective clothing):
    f.1. Not controlled by USML Category XIV(f); and
    f.2. ``Specially designed'' for military use and for defense 
against:
    f.2.1. Materials specified by USML Category XIV (a) or (b); or
    f.2.2. Riot control agents controlled in 1C607.a.
    g. Decontamination ``equipment'':
    g.1. Not controlled by USML Category XIV(f); and
    g.2. ``Specially designed'' for military use and for 
decontamination of objects contaminated with materials controlled by 
USML Category XIV(a) or (b).
    h. ``Equipment'':
    h.1. Not controlled by USML Category XIV(f); and
    h.2. ``Specially designed'' for military use and for the 
detection or identification of:
    h.2.1. Materials specified by USML Category XIV(a) or (b); or
    h.2.2. Riot control agents controlled by ECCN 1C607.a.

[[Page 49529]]

    i. [Reserved]
    j. ``Equipment'' ``specially designed'' to:
    j.1. Interface with a detector, shelter, vehicle, vessel, or 
aircraft controlled by the USML or a ``600 series'' ECCN; and
    j.2. Collect and process samples of articles controlled in USML 
Category XIV(a) or (b).
    k. Medical countermeasures that are ``specially designed'' for 
military use (including pre- and post-treatments, antidotes, and 
medical diagnostics) and ``specially designed'' to counter chemical 
agents controlled by the USML Category XIV(a).
    Note: Examples of ``equipment'' controlled by this entry are 
barrier and non-barrier creams and filled autoinjectors (e.g., 
combopens where one injector contains 2-PAM and the other atropine) 
if ``specially designed'' to counter such agents.
    l. through w. [Reserved]
    x. ``Parts,'' ``components,'' ``accessories,'' and 
``attachments'' that are ``specially designed'' for a commodity 
controlled by ECCN 1A607.e, .f, .g, .h, or .j or for a defense 
article controlled by USML Category XIV(f) and that are not 
enumerated or otherwise described elsewhere in the USML.


0
6. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Special Materials and Related Equipment, Chemicals, 
``Microorganisms,'' and ``Toxins,'' add ECCN 1B607 between ECCNs 1B234 
and 1B608 to read as follows:

1B607 Military test, inspection, and production ``equipment'' and 
related commodities ``specially designed'' for the ``development,'' 
``production,'' repair, overhaul, or refurbishing of commodities 
identified in ECCN 1A607 or 1C607, or defense articles enumerated or 
otherwise described in USML Category XIV (see List of Items 
Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                Control(s)                       No. 1  to Part 738)
 
NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

LVS: $1500
GBS: N/A
CIV: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 1B607.

List of Items Controlled

Related Controls: (1) See ECCN 2B350 for controls on certain 
incinerators. (2) See ECCN 0A919 for ``military commodities'' 
located and produced outside the United States that incorporate more 
than a de minimis amount of US-origin ``600 series'' controlled 
content.
Related Definitions: N/A
Items:

    a. ``Equipment'' ``specially designed'' for the destruction of 
the chemical agents controlled by USML Category XIV(a).
    Note to 1B607.a: ECCN 1B607.a includes controls over facilities 
``specially designed'' for destruction operations. This paragraph .a 
does not control incinerators and ``specially designed'' handling 
facilities or ``specially designed'' waste supply systems therefor.
    b. Test facilities and ``equipment'' ``specially designed'' for 
military certification, qualification, or testing of commodities 
controlled by ECCN 1A607.e, .f, .g, .h, or .j or by USML Category 
XIV(f), except for XIV(f)(1).
    c. Tooling and ``equipment'' ``specially designed'' for the 
``development,'' ``production,'' repair, overhaul, or refurbishing 
of commodities controlled by ECCN 1A607.e, .f .g, .h, or .j or USML 
Category XIV(f).
    d. through w. [RESERVED]
    x. ``Parts,'' ``components,'' ``accessories,'' and 
``attachments'' that are ``specially designed'' for a commodity 
controlled by ECCN 1B607.b or .c, or for a defense article 
controlled by USML Category XIV(f), and that are not enumerated or 
otherwise described elsewhere in the USML.


0
7. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Special Materials and Related Equipment, Chemicals, 
``Microorganisms,'' and ``Toxins,'' add a new ECCN 1C607 between ECCNs 
1C395 and 1C608 to read as follows:

1C607 Tear Gases, Riot Control Agents and materials for the 
detection and decontamination of chemical warfare agents (see List 
of Items Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                Control(s)                       No. 1  to Part 738)
 
NS applies to entire entry, except          NS Column 1
 1C607.a.10, .a.11, .a.12, and .a.14.
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

LVS: N/A
GBS: N/A
CIV: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 1C607.

List of Items Controlled

Related Controls: (1) See ECCN 1A984 for controls on other riot 
control agents. (2) See 22 CFR 121.1 (USML), Category XIV(b), for 
modified biological agents and biologically derived substances that 
are subject to the ITAR. (3) See 22 CFR 121.1 (USML), Category 
XIV(g), for ITAR controls on antibodies, recombinant protective 
antigens, polynucleotides, biopolymers or biocatalysts (including 
the expression vectors, viruses, plasmids, or cultures of specific 
cells used to produce them) that are ``specially designed'' for use 
with articles controlled under USML Category XIV(f). (4) See ECCN 
0A919 for ``military commodities'' located and produced outside the 
United States that incorporate more than a de minimis amount of US-
origin ``600 series'' controlled content.
Related Definitions: N/A
Items:

    a. Tear gases and riot control agents including:
    a.1. CA (Bromobenzyl cyanide) (CAS 5798-79-8);
    a.2. CS (o-Chlorobenzylidenemalononitrile or o-
Chlorobenzalmalononitrile) (CAS 2698-41-1);
    a.3. CN (Phenylacyl chloride or w-Chloroacetophenone) (CAS 532-
27-4);
    a.4. CR (Dibenz-(b,f)-1,4-oxazephine) (CAS 257-07-8);
    a.5. Adamsite (Diphenylamine chloroarsine or DM) (CAS 578-94-9);
    a.6. N-Nonanoylmorpholine, (MPA) (CAS 5299-64-9);
    a.7. Dibromodimethyl ether (CAS 4497-29-4);
    a.8. Dichlorodimethyl ether (ClCi) (CAS 542-88-1);
    a.9. Ethyldibromoarsine (CAS 683-43-2);
    a.10. Bromo acetone (CAS 598-31-2);
    a.11. Bromo methylethylketone (CAS 816-40-0);
    a.12. Iodo acetone (CAS 3019-04-3);
    a.13. Phenylcarbylamine chloride (CAS 622-44-6);
    a.14. Ethyl iodoacetate (CAS 623-48-3);
    Note to 1C607.a: ECCN 1C607.a. does not control the following: 
formulations containing 1% or less of CN or CS; individually 
packaged tear gases or riot control agents for personal self-defense 
purposes that are controlled by ECCN 1A984; or active constituent 
chemicals, and combinations thereof, identified and packaged for 
food production or medical purposes.
    b. ``Biopolymers,'' not controlled by USML Category XIV(g) 
``specially designed'' or processed for the detection or 
identification of chemical warfare agents specified by USML Category 
XIV(a), and the cultures of specific cells used to produce them.
    c. ``Biocatalysts,'' and biological systems therefor, not 
controlled by USML Category XIV(g) ``specially designed'' for the 
decontamination or degradation of chemical warfare agents controlled 
in USML Category XIV (a), as follows:

[[Page 49530]]

    c.1. ``Biocatalysts'' ``specially designed'' for the 
decontamination or degradation of chemical warfare agents controlled 
in USML Category XIV(a) resulting from directed laboratory selection 
or genetic manipulation of biological systems;
    c.2. Biological systems containing the genetic information 
specific to the production of ``biocatalysts'' specified by 
1C607.c.1, as follows:
    c.2.a. ``Expression vectors;''
    c.2.b. Viruses; or
    c.2.c. Cultures of cells.
    Note to 1C607.b and .c: The cultures of cells and biological 
systems are exclusive and these sub-items do not apply to cells or 
biological systems for civil purposes, such as agricultural, 
pharmaceutical, medical, veterinary, environmental, waste 
management, or in the food industry.
    d. Chemical mixtures not controlled by USML Category XIV(f) 
``specially designed'' for military use for the decontamination of 
objects contaminated with materials specified by USML Category 
XIV(a) or (b).


0
8. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Special Materials and Related Equipment, Chemicals, 
``Microorganisms,'' and ``Toxins,'' add ECCN 1D607 between ECCNs 1D390 
and 1D608 to read as follows:

1D607 ``Software'' ``specially designed'' for the ``development,'' 
``production,'' operation, or maintenance of items controlled by 
1A607, 1B607 or 1C607 (see List of Items Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                Control(s)                       No. 1  to Part 738)
 
NS applies to entire entry, except          NS Column 1
 ``software'' for 1C607.a.10, .a.11,
 .a.12, and .a.14.
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

CIV: N/A
TSR: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 1D607.

List of Items Controlled

Related Controls: (1) ``Software'' directly related to articles 
enumerated or otherwise described in USML Category XIV is subject to 
the ITAR (see 22 CFR Sec.  121.1, Category XIV(m)). ``Software'' 
controlled by USML Category XIV(m) includes ``software'' directly 
related to any equipment containing reagents, algorithms, 
coefficients, software, libraries, spectral databases, or alarm set 
point levels developed under U.S. Department of Defense contract or 
funding for the detection, identification, warning or monitoring of 
items controlled in paragraphs (a) or (b) of USML Category XIV, or 
for chemical or biological agents specified by U.S. Department of 
Defense funding or contract. (2) See ECCN 0A919 for ``military 
commodities'' located and produced outside the United States that 
incorporate more than a de minimis amount of US-origin ``600 
series'' controlled content.
Related Definitions: N/A
Items:

    a. ``Software'' ``specially designed'' for the ``development,'' 
``production,'' operation, or maintenance of commodities controlled 
by ECCN 1A607, 1B607, or 1C607.
    b. [RESERVED]


0
9. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Special Materials and Related Equipment, Chemicals, 
``Microorganisms,'' and ``Toxins,'' add a new ECCN 1E607 between ECCNs 
1E355 and 1E608 to read as follows:

1E607 ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, 
overhaul, or refurbishing of items controlled by ECCN 1A607, 1B607, 
1C607, or 1D607 (see List of Items Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                Control(s)                       No. 1  to Part 738)
 
NS applies to entire entry, except          NS Column 1
 ``technology'' for 1C607.a.10, .a.11,
 .a.12, and .a.14 and for 1D607
 ``software'' therefor.
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

CIV: N/A
TSR: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 1E607.

List of Items Controlled

Related Controls: Technical data directly related to defense 
articles enumerated or otherwise described in USML Category XIV are 
subject to the ITAR (see 22 CFR Sec.  121.1, Category XIV(m)). 
Technical data controlled by USML Category XIV(m) include technical 
data directly related to any equipment containing reagents, 
algorithms, coefficients, software, libraries, spectral databases, 
or alarm set point levels developed under U.S. Department of Defense 
contract or funding for the detection, identification, warning or 
monitoring of items controlled in paragraphs (a) or (b) of USML 
Category XIV, or for chemical or biological agents specified by U.S. 
Department of Defense funding or contract.
Related Definitions: N/A
Items:

    a. ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, 
overhaul, or refurbishing of items controlled by ECCN 1A607, 1B607, 
1C607 or 1D607.
    Note to 1E607.a: ECCN 1E607.a includes ``technology'' 
``required'' exclusively for the incorporation of ``biocatalysts'' 
controlled by ECCN 1C607.c.1 into military carrier substances or 
military material.
    b. [RESERVED]


0
10. In Supplement No. 1 to Part 774 (the Commerce Control List), 
Category 6--Sensors and Lasers,'' add a new ECCN 6B619 between ECCNs 
6B108 and 6B995 to read as follows:

6B619 Test, inspection, and production ``equipment'' and related 
commodities ``specially designed'' for the ``development,'' 
``production,'' repair, overhaul, or refurbishing of commodities 
enumerated or otherwise described in USML Category XVIII (see List 
of Items Controlled)

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                 Control(s)                      No. 1  to Part 738)
 
NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

License Exceptions

LVS: $1500
GBS: N/A
CIV: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 6B619.

List of Items Controlled

Related Controls: ``Parts,'' ``components,'' ``accessories,'' 
``attachments,'' and associated systems or ``equipment'' ``specially 
designed'' for defense articles enumerated or otherwise described in 
paragraphs (a) or (b) of USML Category XVIII are subject to the ITAR 
(see 22 CFR 121.1, Category XVIII(e)).

[[Page 49531]]

Related Definitions: N/A
Items:

    a. Tooling, templates, jigs, mandrels, molds, dies, fixtures, 
alignment mechanisms, and test ``equipment'' not enumerated or 
otherwise described in USML Category XVIII and not elsewhere 
specified on the USML that are ``specially designed'' for the 
``development,'' ``production,'' repair, overhaul, or refurbishing 
of commodities controlled by USML Category XVIII.
    b. through w. [Reserved]
    x. ``Parts,'' ``components,'' ``accessories,'' and 
``attachments'' ``specially designed'' for a commodity subject to 
control under paragraph .a of this ECCN and not enumerated or 
otherwise described in USML Category XVIII and not elsewhere 
specified on the USML.


0
11. In Supplement No. 1 to Part 774 (the Commerce Control List), 
Category 6--Sensors and Lasers,'' add a new ECCN 6D619 between ECCNs 
6D201 and 6D991 to read as follows:

 6D619 ``Software'' ``specially designed'' for the ``development,'' 
``production,'' operation or maintenance of commodities controlled 
by 6B619.

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                Control(s)                       No. 1  to Part 738)
 
NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

License Exceptions

CIV: N/A
TSR: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 6D619.

List of Items Controlled

Related Controls: ``Software'' directly related to articles 
enumerated or otherwise described in USML Category XVIII is subject 
to the ITAR (See 22 CFR 121.1, Category XVIII(f)).
Related Definitions: N/A
Items:

    The list of items controlled is contained in the ECCN heading.


0
12. In Supplement No. 1 to Part 774 (the Commerce Control List), 
Category 6--Sensors and Lasers,'' add ECCN 6E619 between ECCNs 6E202 
and 6E990 to read as follows:

 6E619 ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, 
overhaul or refurbishing of commodities controlled by 6B619 or 
``software'' controlled by 6D619.

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                 Control(s)                      No. 1  to Part 738)
 
NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

License Exceptions

CIV: N/A
TSR: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 6E619.

List of Items Controlled

Related Controls: Technical data directly related to articles 
enumerated or otherwise described in USML Category XVIII are subject 
to the ITAR (See 22 CFR 121.1, Category XVIII(f)).
Related Definitions: N/A
Items:

    The list of items controlled is contained in the ECCN heading.

Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2016-17506 Filed 7-27-16; 8:45 am]
 BILLING CODE 3510-33-P