Revision to the Export Administration Regulations: Suspension of License Exceptions for Hong Kong, 45998-46000 [2020-16278]
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45998
Federal Register / Vol. 85, No. 148 / Friday, July 31, 2020 / Rules and Regulations
traffic procedures and air navigation, it
is certified that this rule, when
promulgated, would not have a
significant economic impact on a
substantial number of small entities
under the criteria of the Regulatory
Flexibility Act.
Environmental Review
The FAA has determined that this
action qualifies for categorical exclusion
under the National Environmental
Policy Act in accordance with FAA
Order 1050.1F, ‘‘Environmental
Impacts: Policies and Procedures,’’
paragraph 5–6.5a. This airspace action
is not expected to cause any potentially
significant environmental impacts, and
no extraordinary circumstances exist
that warrant preparation of an
environmental assessment.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference,
Navigation (air).
Adoption of the Amendment
In consideration of the foregoing, the
Federal Aviation Administration
amends 14 CFR part 71 as follows:
(Lat. 57°02′49″ N, long. 135°21′40″ W)
That airspace extending upward from the
surface within 4 miles north and 8 miles
south of the 315° bearing from the airport,
extending from 0.9 miles northwest of the
airport to 28.3 miles northwest of the Sitka
Rocky Gutierrez Airport.
Paragraph 6005 Class E Airspace Areas
Extending Upward From 700 Feet or More
Above the Surface of the Earth.
*
*
*
*
*
AAL AK E5 Sitka, AK [Amended]
Sitka Rocky Gutierrez Airport, AK
(Lat. 57°02′49″ N, long. 135°21′40″ W)
That airspace extending upward from 700
feet above the surface within a 6.6-mile
radius of the airport, and within 5 miles each
side of the 216° bearing from the airport,
extending from the 6.6-mile radius to 26
miles southwest of the Sitka Rocky Gutierrez
Airport; excluding that airspace extending
beyond 12 miles from the coast.
Issued in Seattle, Washington, on July 22,
2020.
B.G. Chew,
Acting Group Manager, Western Service
Center, Operations Support Group.
[FR Doc. 2020–16314 Filed 7–30–20; 8:45 am]
BILLING CODE 4910–13–P
PART 71—DESIGNATION OF CLASS A,
B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND
REPORTING POINTS
DEPARTMENT OF COMMERCE
1. The authority citation for 14 CFR
part 71 continues to read as follows:
15 CFR Part 740
Authority: 49 U.S.C. 106(f), 106(g), 40103,
40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR,
1959–1963 Comp., p. 389.
RIN 0694–AI14
■
§ 71.1
2. The incorporation by reference in
14 CFR 71.1 of FAA Order 7400.11D,
Airspace Designations and Reporting
Points, dated August 8, 2019, and
effective September 15, 2019, is
amended as follows:
Bureau of Industry and
Security, Commerce.
ACTION: Final rule.
AGENCY:
*
*
*
AAL AK E2 Sitka, AK [Amended]
Sitka Rocky Gutierrez Airport, AK
(Lat. 57°02′49″ N, long. 135°21′40″ W)
That airspace extending upward from the
surface within a 4.1 mile radius of Sitka
Rocky Gutierrez Airport, and within 1.5
miles each side of the 209° bearing from the
airport, extending from the 4.1-mile radius to
4.4 miles southwest of the Sitka Rocky
Gutierrez Airport.
Paragraph 6004 Class E Airspace Areas
Designated as an Extension to a Class D or
Class E Surface Area.
*
*
*
*
*
AAL AK E4 Sitka, AK [New]
Sitka Rocky Gutierrez Airport, AK
VerDate Sep<11>2014
16:02 Jul 30, 2020
Jkt 250001
The Bureau of Industry and
Security (BIS) amends the Export
Administration Regulations (EAR) to
suspend the availability of all License
Exceptions for Hong Kong that provide
differential treatment as compared to
those available to the People’s Republic
of China (PRC). As announced on BIS’s
website on June 30, 2020, these License
Exceptions are no longer available for
exports and reexports to Hong Kong,
and transfers within Hong Kong, of all
items subject to the EAR. BIS is taking
this action as part of revised U.S. policy
toward Hong Kong in response to the
newly imposed security measures on
Hong Kong by the Chinese Communist
Party. These new security measures
undermine Hong Kong’s autonomy and
thereby increase the risk that sensitive
U.S. technology and items will be
SUMMARY:
Paragraph 6002 Class E Airspace Areas
Designated as a Surface Area.
*
[Docket No. 200718–0196]
Revision to the Export Administration
Regulations: Suspension of License
Exceptions for Hong Kong
[Amended]
■
*
Bureau of Industry and Security
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illegally diverted to unauthorized end
uses and end users in the PRC or to
unauthorized destinations such as Iran
or North Korea. This rule includes
saving clauses for items, including for
deemed exports.
DATES: This rule is effective July 31,
2020.
FOR FURTHER INFORMATION CONTACT:
Patricia Muldonian, Office of National
Security and Technology Transfer
Controls, patricia.muldonian@
bis.doc.gov.
The
Chinese Communist Party of the
People’s Republic of China (PRC) has
imposed new measures that undermine
Hong Kong’s autonomy. As a result, the
United States Government (USG) has
revised its policy toward Hong Kong,
including treatment of Hong Kong under
the EAR. Undermining Hong Kong’s
autonomy increases the risk that
sensitive U.S. technology and items will
be illegally diverted to unauthorized
end uses and end users in the PRC or
to unauthorized destinations such as
Iran or North Korea.
As the USG finds that it can no longer
distinguish between the export of
controlled items to Hong Kong and the
PRC, the United States is removing
eligibility for License Exceptions for
exports or reexports to, or transfers
within, Hong Kong that are not available
for exports and reexports to the PRC or
transfers within the PRC. This action
targets the PRC regime, not residents of
Hong Kong. The Bureau of Industry and
Security (BIS), in consultation with
other executive branch agencies,
continues to review the EAR to assess
whether additional amendments are
warranted.
SUPPLEMENTARY INFORMATION:
Amendments to the EAR
In this final rule, BIS amends the
Export Administration Regulations, 15
CFR parts 730–774 (EAR), to suspend
the availability of the License
Exceptions for exports and reexports to
Hong Kong, and transfers within Hong
Kong of all items subject to the EAR that
provide differential treatment from the
license exceptions available to the PRC.
BIS is taking this action pursuant to
§ 740.2(b) of the EAR (15 CFR 740.2(b)),
which provides that all License
Exceptions are subject to revision,
suspension, or revocation, in whole or
in part, without notice. The following
License Exceptions are suspended to the
extent they allow exports or reexports to
or from Hong Kong, or transfers within
Hong Kong, when they may not be used
for exports or reexports to the PRC, or
transfers within the PRC:
E:\FR\FM\31JYR1.SGM
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Federal Register / Vol. 85, No. 148 / Friday, July 31, 2020 / Rules and Regulations
(1) Shipments of Limited Value (LVS)
(§ 740.3);
(2) Shipments to Group B Countries
(GBS) (§ 740.4);
(3) Technology and Software under
Restriction (TSR) (§ 740.6);
(4) Computers, Tier 1 only (APP)
(§ 740.7(c));
(5) Temporary Imports, Exports,
Reexports, and Transfers (in-country)
(TMP) (§ 740.9(a)(11), (b)(2)(ii)(C, and
(b)(5));
(6) Servicing and Replacement Parts
and Equipment (RPL)
(§ 740.10(a)(3)(viii), (a)(4), (b)(1) except
as permitted to Country Group D:5, and
(b)(3)(i)(F) and (ii)(C));
(7) Governments (GOV)
(§ 740.11(c)(1)—Cooperating
Governments only));
(8) Gift Parcels and Humanitarian
Donations (GFT) (§ 740.12);
(9) Technology and Software
Unrestricted (TSU) (§ 740.13);
(10) Baggage (BAG) (§ 740.14) (except
as permitted by § 740.14(d));
(11) Aircraft, Vessels, and Spacecraft
(AVS) (§ 740.15(b)(1), (b)(2), (c));
(12) Additional Permissive Reexports
(APR) (§ 740.16(a) and (j)); and
(13) Strategic Trade Authorization
(STA) (§ 740.20(c)(2)).
Reexports of items subject to the EAR
from Hong Kong under License
Exception APR § 740.16(a) are also
restricted.
In this final rule, BIS also amends
paragraph (a) of § 740.2—Restrictions on
all License Exceptions—by adding a
new paragraph (a)(23) to identify the
suspension of the availability of these
License Exceptions for exports to Hong
Kong, reexports to and from Hong Kong,
and transfers within Hong Kong of all
items subject to the EAR.
A License Exception is an
authorization contained in Part 740 of
the EAR that allows exports, reexports,
or transfers (in-country) under stated
conditions of items subject to the EAR
that would otherwise require a license.
This includes License Exception APR
which was previously also available for
reexports from Hong Kong.
Export Control Reform Act of 2018
On August 13, 2018, the President
signed into law the John S. McCain
National Defense Authorization Act for
Fiscal Year 2019, which included the
Export Control Reform Act of 2018
(ECRA), 50 U.S.C. Sections 4801–4852.
ECRA provides the legal basis for BIS’s
principal authorities and serves as the
authority under which BIS issues this
rule.
Rulemaking Requirements
Executive Orders 13563 and 12866
direct agencies to assess all costs and
VerDate Sep<11>2014
16:02 Jul 30, 2020
Jkt 250001
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 final rule has been
designated significant under Executive
Order 12866. This final rule will protect
the national security and foreign policy
objectives of the United States by
addressing the increased risk of illegal
diversion of sensitive U.S. technology
and other items to unauthorized end
uses and end users in China or to
unauthorized destinations such as Iran
or North Korea.
This final rule is not subject to the
requirements of Executive Order 13771
(82 FR 9339; February 3, 2017) because
it is issued with respect to a national
security function of the United States.
The cost-benefit analysis required
pursuant to Executive Orders 12866 and
13563 indicates that this rule is
intended to improve national security as
its primary direct benefit. Specifically,
suspending license exceptions for Hong
Kong serves U.S. national security
interests and foreign policy objectives.
Accordingly, this rule meets the
requirements set forth in the April 5,
2017 OMB guidance implementing
Executive Order 13771, regarding what
constitutes a regulation issued ‘‘with
respect to a national security function of
the United States,’’ and is, therefore,
exempt from the requirements of
Executive Order 13771.
This rule does not contain policies
with federalism implications as that
term is defined under Executive Order
13132.
Paperwork Reduction Act
Requirements
Notwithstanding any other provision
of law, no person may be required to
respond to or be 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 Office of Management
and Budget (OMB) Control Number.
This regulation involves collections
currently approved by OMB under
control numbers 0694–0088, Simplified
Network Application Processing
System, and 0694–0137, License
Exceptions and Exclusions. These
collections include, among other things,
license applications, which carries a
PO 00000
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45999
burden estimate of 42.5 minutes for a
manual or electronic submission for a
total burden estimate of 31,878 hours.
This rule is expected to increase the
number of licenses required as license
exception availability is suspended,
including for deemed exports and
reexports, but this increase is not
expected to exceed the existing
estimates currently associated with
OMB control number 0694–0088. A
minimal decrease in burden is expected
for 0694–0137.
Administrative Procedure Act and
Regulatory Flexibility Act
Requirements
Pursuant to section 1762 of the Export
Control Reform Act of 2018 (50 U.S.C.
4801–4852), which was included in the
John S. McCain National Defense
Authorization Act for Fiscal Year 2019,
this action is exempt from the
Administrative Procedure Act (5 U.S.C.
553) requirements for notice of
proposed rulemaking, opportunity for
public participation, and delay in
effective date. Because a notice of
proposed rulemaking and an
opportunity for public comment are not
required to be given for this rule by 5
U.S.C. 553, or by any other law, the
analytical requirements of the
Regulatory Flexibility Act, 5 U.S.C. 601,
et seq., are not applicable. Accordingly,
no regulatory flexibility analysis is
required, and none has been prepared.
Savings Clauses
Shipments of items that are removed
from eligibility for a License Exception
as a result of this action and were on
dock for loading, on lighter, laden
aboard an exporting or transferring
carrier, or en route aboard a carrier to
a port of export or reexport on June 30,
2020, pursuant to actual orders for
export to Hong Kong, reexport to or
from Hong Kong, or transfer within
Hong Kong, may proceed to their
destination under the previous License
Exception eligibility.
Similarly, the deemed export/reexport
transactions involving Hong Kong
persons authorized under License
Exception eligibility prior to June 30,
2020, may continue to be authorized
under such provision until August 28,
2020, after which such transactions will
require a license. Exporters, reexporters, or transferors (in-country)
availing themselves of this 60-day
savings clause must maintain
documentation demonstrating that the
Hong Kong national was hired and
provided access to technology eligible
for Hong Kong under part 740 prior to
June 30, 2020.
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46000
Federal Register / Vol. 85, No. 148 / Friday, July 31, 2020 / Rules and Regulations
List of Subjects
15 CFR Part 740
Administrative practice and
procedure, Exports, Reporting and
recordkeeping requirements.
Accordingly, part 740 of the Export
Administration Regulations (15 CFR
parts 730–774) is amended as follows:
PART 740—LICENSE EXCEPTIONS
1. The authority citation for part 740
continues to read as follows:
■
Authority: 50 U.S.C. 4801–4852; 50 U.S.C.
4601 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.
2. Section 740.2 is amended by
revising paragraphs (a)(12) and (13)
introductory text and by adding new
paragraph (a)(23) to read as follows:
■
BILLING CODE 3510–33–P
CONSUMER PRODUCT SAFETY
COMMISSION
(a) * * *
(12) The item is described in a 9x515
or ‘‘600 series’’ ECCN and is destined to,
shipped from, or was manufactured in
a destination listed in Country Group
D:5 or Hong Kong (see Supplement No.
1 to part 740 of the EAR), except that:
*
*
*
*
*
(13) ‘‘600 series’’ items that are
controlled for missile technology (MT)
reasons may not be exported,
reexported, or transferred (in-country)
under License Exception STA (§ 740.20
of the EAR). Items controlled under
ECCNs 9D610.b, 9D619.b, 9E610.b, or
9E619.b or .c are not eligible for license
exceptions except for License Exception
GOV (§ 740.11(b)(2) of the EAR). Only
the following license exceptions may be
used to export ‘‘600 series’’ items to
destinations other than those identified
in Country Group D:5 or Hong Kong (see
Supplement No. 1 to part 740 of the
EAR):
*
*
*
*
*
(23) The item is subject to the EAR
and is for export to Hong Kong, reexport
to Hong Kong or transfer (in-country)
within Hong Kong under License
Exceptions LVS—Shipments of Limited
Value (§ 740.3); GBS—Shipments to
Group B Countries (§ 740.4); TSR—
Technology and Software under
Restriction (§ 740.6); APP—Computers,
Tier 1 only (§ 740.7(c)); TMP Temporary
Imports, Exports, Reexports, and
Transfers (in-country)—(§ 740.9(a)(11)
and (b)(2)(ii)(C) and (b)(5) only); RPL—
Servicing and Replacement Parts and
Equipment (§ 740.10(a)(3)(viii), (a)(4),
(b)(1) except as permitted to Country
Group D:5, and (b)(3)(i)(F) and (ii)(C)
only); GOV—Cooperating Governments
16:02 Jul 30, 2020
Jkt 250001
Matthew S. Borman,
Deputy Assistant Secretary for Export
Administration.
[FR Doc. 2020–16278 Filed 7–30–20; 8:45 am]
§ 740.2 Restrictions on all License
Exceptions.
VerDate Sep<11>2014
only (§ 740.11(c)(1)); GFT—Gift Parcels
(except as permitted by § 740.12(a)(3));
TSU Technology and Software
Unrestricted—only § 740.13(f); BAG—
Baggage (except as permitted by
§ 740.14(d)); AVS Aircraft, Vessels, and
Spacecraft—(§ 740.15(b)(1), (b)(2), (c),
and (f) only); APR—Additional
Permissive Reexports (§ 740.16(a) and
(j)); and STA—Strategic Trade
Authorization (§ 740.20). Reexports of
items subject to the EAR from Hong
Kong under License Exception APR
§ 740.16(a) are also restricted.
*
*
*
*
*
[Docket No. CPSC–2012–0068]
B. Delaying the Effective Date of the
Rule
16 CFR Part 1225
Safety Standard for Hand-Held Infant
Carriers
Consumer Product Safety
Commission.
ACTION: Final rule; delay of effective
date.
AGENCY:
On May 20, 2020, the
Consumer Product Safety Commission
(Commission, or CPSC) issued a direct
final rule revising the CPSC’s mandatory
standard for hand-held infant carriers to
incorporate by reference the most recent
version of the applicable ASTM
standard. We are publishing this final
rule to delay the effective date of the
CPSC’s mandatory standard for handheld infant carriers, due to the COVID–
19 pandemic.
DATES: The effective date for the direct
final rule published on May 20, 2020, at
85 FR 30605, is delayed from August 3,
2020, until January 1, 2021.
FOR FURTHER INFORMATION CONTACT:
Keysha L. Walker, Compliance Officer,
Office of Compliance and Field
Operations, Consumer Product Safety
Commission, 4330 East West Highway,
Bethesda, MD 20814–4408; telephone:
301–504–6820; email: kwalker@
cpsc.gov.
SUMMARY:
SUPPLEMENTARY INFORMATION:
A. Background
On May 20, 2020, the Commission
published a direct final rule (DFR),
revising 16 CFR part 1225, the CPSC’s
mandatory standard for hand-held
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Fmt 4700
Sfmt 4700
infant carriers, to incorporate by
reference the most recent version of the
applicable ASTM standard, ASTM
F2050–19, Standard Consumer Safety
Specification for Hand-Held Infant
Carriers. See 85 FR 30605. The DFR was
originally set to become effective by
operation of law on August 3, 2020,
unless the Commission received a
significant adverse comment by June 19,
2020.
Since Commission approval of the
DFR in April 2020, Executive Order
(E.O.) 13924, ‘‘Regulatory Relief to
Support Economic Recovery,’’ was
issued on May 19, 2020. 85 FR 31385.
E.O. 13924 encourages federal agencies
to address the economic consequences
of COVID–19 ‘‘by rescinding, modifying,
waiving, or providing exemptions from
regulations and other requirements that
may inhibit economic recovery,
consistent with applicable law and with
protection of the public health and
safety.’’
CPSC received two comments in
response to the DFR notice. Neither
comment is considered to be a
‘‘significant adverse comment.’’ 1
However, one commenter, who was
anonymous, noted that in the last few
months, the pandemic has ‘‘caused
drastic changes in consumer behavior
and manufacturing capabilities,
including reduced sales and otherwise
unforeseen production stoppages.’’ The
commenter stated: ‘‘As a consequence,
inventory levels of some previously
ordered components have been
extended further into the year than
typical. Lead times for new material
have also increased as manufacturers
struggle to return to pre-pandemic
production output capabilities.’’ The
commenter recommends the effective
date should be pushed back, ‘‘perhaps
as far as to the end of the calendar year,
to allow manufacturers more time to use
up existing inventory before
implementing the required changes.’’
1 The Commission considers a significant adverse
comment to be ‘‘one where the commenter explains
why the rule would be inappropriate,’’ including an
assertion challenging ‘‘the rule’s underlying
premise or approach,’’ or a claim that the rule
would be ‘‘ineffective or unacceptable without
change.’’ 60 FR 43108, 43111. One commenter
asserted that the incorporation by reference process
does not allow the public free access to the law
without paying for the incorporated voluntary
standard. CPSC did not consider that comment to
be a significant adverse comment because a copy of
the standard can be inspected at the National
Archives and Records Administration, or at the
CPSC, and a read-only copy of the standard will be
available for viewing on the ASTM website at
www.astm.org/READINGLIBRARY.
E:\FR\FM\31JYR1.SGM
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]]>Agencies
[Federal Register Volume 85, Number 148 (Friday, July 31, 2020)]
[Rules and Regulations]
[Pages 45998-46000]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16278]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Part 740
[Docket No. 200718-0196]
RIN 0694-AI14
Revision to the Export Administration Regulations: Suspension of
License Exceptions for Hong Kong
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Bureau of Industry and Security (BIS) amends the Export
Administration Regulations (EAR) to suspend the availability of all
License Exceptions for Hong Kong that provide differential treatment as
compared to those available to the People's Republic of China (PRC). As
announced on BIS's website on June 30, 2020, these License Exceptions
are no longer available for exports and reexports to Hong Kong, and
transfers within Hong Kong, of all items subject to the EAR. BIS is
taking this action as part of revised U.S. policy toward Hong Kong in
response to the newly imposed security measures on Hong Kong by the
Chinese Communist Party. These new security measures undermine Hong
Kong's autonomy and thereby increase the risk that sensitive U.S.
technology and items will be illegally diverted to unauthorized end
uses and end users in the PRC or to unauthorized destinations such as
Iran or North Korea. This rule includes saving clauses for items,
including for deemed exports.
DATES: This rule is effective July 31, 2020.
FOR FURTHER INFORMATION CONTACT: Patricia Muldonian, Office of National
Security and Technology Transfer Controls,
[email protected].
SUPPLEMENTARY INFORMATION: The Chinese Communist Party of the People's
Republic of China (PRC) has imposed new measures that undermine Hong
Kong's autonomy. As a result, the United States Government (USG) has
revised its policy toward Hong Kong, including treatment of Hong Kong
under the EAR. Undermining Hong Kong's autonomy increases the risk that
sensitive U.S. technology and items will be illegally diverted to
unauthorized end uses and end users in the PRC or to unauthorized
destinations such as Iran or North Korea.
As the USG finds that it can no longer distinguish between the
export of controlled items to Hong Kong and the PRC, the United States
is removing eligibility for License Exceptions for exports or reexports
to, or transfers within, Hong Kong that are not available for exports
and reexports to the PRC or transfers within the PRC. This action
targets the PRC regime, not residents of Hong Kong. The Bureau of
Industry and Security (BIS), in consultation with other executive
branch agencies, continues to review the EAR to assess whether
additional amendments are warranted.
Amendments to the EAR
In this final rule, BIS amends the Export Administration
Regulations, 15 CFR parts 730-774 (EAR), to suspend the availability of
the License Exceptions for exports and reexports to Hong Kong, and
transfers within Hong Kong of all items subject to the EAR that provide
differential treatment from the license exceptions available to the
PRC.
BIS is taking this action pursuant to Sec. 740.2(b) of the EAR (15
CFR 740.2(b)), which provides that all License Exceptions are subject
to revision, suspension, or revocation, in whole or in part, without
notice. The following License Exceptions are suspended to the extent
they allow exports or reexports to or from Hong Kong, or transfers
within Hong Kong, when they may not be used for exports or reexports to
the PRC, or transfers within the PRC:
[[Page 45999]]
(1) Shipments of Limited Value (LVS) (Sec. 740.3);
(2) Shipments to Group B Countries (GBS) (Sec. 740.4);
(3) Technology and Software under Restriction (TSR) (Sec. 740.6);
(4) Computers, Tier 1 only (APP) (Sec. 740.7(c));
(5) Temporary Imports, Exports, Reexports, and Transfers (in-
country) (TMP) (Sec. 740.9(a)(11), (b)(2)(ii)(C, and (b)(5));
(6) Servicing and Replacement Parts and Equipment (RPL) (Sec.
740.10(a)(3)(viii), (a)(4), (b)(1) except as permitted to Country Group
D:5, and (b)(3)(i)(F) and (ii)(C));
(7) Governments (GOV) (Sec. 740.11(c)(1)--Cooperating Governments
only));
(8) Gift Parcels and Humanitarian Donations (GFT) (Sec. 740.12);
(9) Technology and Software Unrestricted (TSU) (Sec. 740.13);
(10) Baggage (BAG) (Sec. 740.14) (except as permitted by Sec.
740.14(d));
(11) Aircraft, Vessels, and Spacecraft (AVS) (Sec. 740.15(b)(1),
(b)(2), (c));
(12) Additional Permissive Reexports (APR) (Sec. 740.16(a) and
(j)); and
(13) Strategic Trade Authorization (STA) (Sec. 740.20(c)(2)).
Reexports of items subject to the EAR from Hong Kong under License
Exception APR Sec. 740.16(a) are also restricted.
In this final rule, BIS also amends paragraph (a) of Sec. 740.2--
Restrictions on all License Exceptions--by adding a new paragraph
(a)(23) to identify the suspension of the availability of these License
Exceptions for exports to Hong Kong, reexports to and from Hong Kong,
and transfers within Hong Kong of all items subject to the EAR.
A License Exception is an authorization contained in Part 740 of
the EAR that allows exports, reexports, or transfers (in-country) under
stated conditions of items subject to the EAR that would otherwise
require a license. This includes License Exception APR which was
previously also available for reexports from Hong Kong.
Export Control Reform Act of 2018
On August 13, 2018, the President signed into law the John S.
McCain National Defense Authorization Act for Fiscal Year 2019, which
included the Export Control Reform Act of 2018 (ECRA), 50 U.S.C.
Sections 4801-4852. ECRA provides the legal basis for BIS's principal
authorities and serves as the authority under which BIS issues this
rule.
Rulemaking Requirements
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 final rule has been designated significant under
Executive Order 12866. This final rule will protect the national
security and foreign policy objectives of the United States by
addressing the increased risk of illegal diversion of sensitive U.S.
technology and other items to unauthorized end uses and end users in
China or to unauthorized destinations such as Iran or North Korea.
This final rule is not subject to the requirements of Executive
Order 13771 (82 FR 9339; February 3, 2017) because it is issued with
respect to a national security function of the United States. The cost-
benefit analysis required pursuant to Executive Orders 12866 and 13563
indicates that this rule is intended to improve national security as
its primary direct benefit. Specifically, suspending license exceptions
for Hong Kong serves U.S. national security interests and foreign
policy objectives. Accordingly, this rule meets the requirements set
forth in the April 5, 2017 OMB guidance implementing Executive Order
13771, regarding what constitutes a regulation issued ``with respect to
a national security function of the United States,'' and is, therefore,
exempt from the requirements of Executive Order 13771.
This rule does not contain policies with federalism implications as
that term is defined under Executive Order 13132.
Paperwork Reduction Act Requirements
Notwithstanding any other provision of law, no person may be
required to respond to or be 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 Office of
Management and Budget (OMB) Control Number. This regulation involves
collections currently approved by OMB under control numbers 0694-0088,
Simplified Network Application Processing System, and 0694-0137,
License Exceptions and Exclusions. These collections include, among
other things, license applications, which carries a burden estimate of
42.5 minutes for a manual or electronic submission for a total burden
estimate of 31,878 hours. This rule is expected to increase the number
of licenses required as license exception availability is suspended,
including for deemed exports and reexports, but this increase is not
expected to exceed the existing estimates currently associated with OMB
control number 0694-0088. A minimal decrease in burden is expected for
0694-0137.
Administrative Procedure Act and Regulatory Flexibility Act
Requirements
Pursuant to section 1762 of the Export Control Reform Act of 2018
(50 U.S.C. 4801-4852), which was included in the John S. McCain
National Defense Authorization Act for Fiscal Year 2019, this action is
exempt from the Administrative Procedure Act (5 U.S.C. 553)
requirements for notice of proposed rulemaking, opportunity for public
participation, and delay in effective date. Because a notice of
proposed rulemaking and an opportunity for public comment are not
required to be given for this rule by 5 U.S.C. 553, or by any other
law, the analytical requirements of the Regulatory Flexibility Act, 5
U.S.C. 601, et seq., are not applicable. Accordingly, no regulatory
flexibility analysis is required, and none has been prepared.
Savings Clauses
Shipments of items that are removed from eligibility for a License
Exception as a result of this action and were on dock for loading, on
lighter, laden aboard an exporting or transferring carrier, or en route
aboard a carrier to a port of export or reexport on June 30, 2020,
pursuant to actual orders for export to Hong Kong, reexport to or from
Hong Kong, or transfer within Hong Kong, may proceed to their
destination under the previous License Exception eligibility.
Similarly, the deemed export/reexport transactions involving Hong
Kong persons authorized under License Exception eligibility prior to
June 30, 2020, may continue to be authorized under such provision until
August 28, 2020, after which such transactions will require a license.
Exporters, re-exporters, or transferors (in-country) availing
themselves of this 60-day savings clause must maintain documentation
demonstrating that the Hong Kong national was hired and provided access
to technology eligible for Hong Kong under part 740 prior to June 30,
2020.
[[Page 46000]]
List of Subjects
15 CFR Part 740
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
Accordingly, part 740 of the Export Administration Regulations (15
CFR parts 730-774) is amended as follows:
PART 740--LICENSE EXCEPTIONS
0
1. The authority citation for part 740 continues to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 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.
0
2. Section 740.2 is amended by revising paragraphs (a)(12) and (13)
introductory text and by adding new paragraph (a)(23) to read as
follows:
Sec. 740.2 Restrictions on all License Exceptions.
(a) * * *
(12) The item is described in a 9x515 or ``600 series'' ECCN and is
destined to, shipped from, or was manufactured in a destination listed
in Country Group D:5 or Hong Kong (see Supplement No. 1 to part 740 of
the EAR), except that:
* * * * *
(13) ``600 series'' items that are controlled for missile
technology (MT) reasons may not be exported, reexported, or transferred
(in-country) under License Exception STA (Sec. 740.20 of the EAR).
Items controlled under ECCNs 9D610.b, 9D619.b, 9E610.b, or 9E619.b or
.c are not eligible for license exceptions except for License Exception
GOV (Sec. 740.11(b)(2) of the EAR). Only the following license
exceptions may be used to export ``600 series'' items to destinations
other than those identified in Country Group D:5 or Hong Kong (see
Supplement No. 1 to part 740 of the EAR):
* * * * *
(23) The item is subject to the EAR and is for export to Hong Kong,
reexport to Hong Kong or transfer (in-country) within Hong Kong under
License Exceptions LVS--Shipments of Limited Value (Sec. 740.3); GBS--
Shipments to Group B Countries (Sec. 740.4); TSR--Technology and
Software under Restriction (Sec. 740.6); APP--Computers, Tier 1 only
(Sec. 740.7(c)); TMP Temporary Imports, Exports, Reexports, and
Transfers (in-country)--(Sec. 740.9(a)(11) and (b)(2)(ii)(C) and
(b)(5) only); RPL--Servicing and Replacement Parts and Equipment (Sec.
740.10(a)(3)(viii), (a)(4), (b)(1) except as permitted to Country Group
D:5, and (b)(3)(i)(F) and (ii)(C) only); GOV--Cooperating Governments
only (Sec. 740.11(c)(1)); GFT--Gift Parcels (except as permitted by
Sec. 740.12(a)(3)); TSU Technology and Software Unrestricted--only
Sec. 740.13(f); BAG--Baggage (except as permitted by Sec. 740.14(d));
AVS Aircraft, Vessels, and Spacecraft--(Sec. 740.15(b)(1), (b)(2),
(c), and (f) only); APR--Additional Permissive Reexports (Sec.
740.16(a) and (j)); and STA--Strategic Trade Authorization (Sec.
740.20). Reexports of items subject to the EAR from Hong Kong under
License Exception APR Sec. 740.16(a) are also restricted.
* * * * *
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2020-16278 Filed 7-30-20; 8:45 am]
BILLING CODE 3510-33-P
