Expansion of Certain End-Use and End-User Controls and Controls on Specific Activities of U.S. Persons; Corrections; and Burma Sanctions, 18433-18437 [2021-07357]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Industry and Security

[Federal Register Volume 86, Number 67 (Friday, April 9, 2021)]
[Rules and Regulations]
[Pages 18433-18437]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-07357]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 732, 736, and 744

[Docket No. 210405-0075]
RIN 0694-AI38


Expansion of Certain End-Use and End-User Controls and Controls 
on Specific Activities of U.S. Persons; Corrections; and Burma 
Sanctions

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Interim final rule.

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SUMMARY: On January 15, 2021, the Bureau of Industry and Security (BIS) 
published an interim final rule establishing end-use and end-user 
controls, as well as controls on specific activities of U.S. persons, 
with respect to certain military-intelligence end uses and end users. 
These new controls were made effective on March 16, 2021. In this 
interim final rule, BIS is making technical corrections and conforming 
changes to certain provisions of the Export Administration Regulations 
to address inadvertent errors introduced by the January 15, 2021 rule. 
This interim final rule also adds Burma to the list of countries 
subject to military-intelligence-related controls that were added by 
the prior rule. This action strengthens sanctions on Burma that were 
imposed on March 8, 2021 in response to a February 1, 2021 military 
coup.

DATES: This rule is effective April 9, 2021.

FOR FURTHER INFORMATION CONTACT: For questions concerning Burma, please 
contact Tracy Patts, Foreign Policy Division, Office of 
Nonproliferation and Treaty Compliance, Bureau of Industry and 
Security, U.S. Department of Commerce, by email at 
[email protected], or by phone at 202-482-4252. For all other 
questions, please contact Philip Johnson, Senior Advisor, Export 
Enforcement, Bureau of Industry and Security, by email at 
[email protected], or by phone at (202) 482-3685.

SUPPLEMENTARY INFORMATION:

[[Page 18434]]

Background

    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. 4801-
4852). ECRA directs the President to control exports, reexports, and 
transfers (in-country), as well as the activities of U.S. persons, in 
connection with foreign military intelligence services (50 U.S.C. 
4812(a)(2)(F)), and provides authority to the Secretary of Commerce to 
implement such controls on behalf of the President (50 U.S.C. 
4813(a)(16)). Accordingly, on January 15, 2021, BIS published an 
interim final rule, Expansion of Certain End-Use and End-User Controls 
and Controls on Specific Activities of U.S. Persons, in the Federal 
Register (86 FR 4865) (``January 15 rule'') amending parts 730, 734, 
736, and 744 of the Export Administration Regulations (EAR) (15 CFR 
parts 730 through 774) to implement, among other things, controls on 
exports, reexports, and transfers (in-country), as well as specific 
activities of U.S. persons, in connection with military-intelligence 
end uses and end users in China, Cuba, Iran, North Korea, Russia, 
Syria, and Venezuela. On March 17, 2021, BIS published a rule in the 
Federal Register (86 FR 14534), which corrected an erroneous 
instruction in the January 15 rule, which would have resulted in the 
inadvertent deletion of two provisions of the EAR's controls on rocket 
systems and unmanned aerial vehicles. The January 15 rule took effect 
on March 16, 2021.

Technical Corrections

    BIS is now revising Sec. Sec.  744.6 and 744.22 of the EAR to 
implement certain technical corrections to address errors that were 
inadvertently introduced as part of the January 15 rule. Specifically, 
BIS is adding double quotes around the term ``U.S. person,'' where that 
term appears in Sec.  744.6(d) and (e), because that is a defined term 
that appears in Sec.  772.1 of the EAR. In addition, BIS is revising 
the definition of `military-intelligence end use' in Sec.  744.22(f)(1) 
of the EAR to remove the term ``use.'' ``Use'' is a defined term in 
Sec.  772.1 of the EAR meaning ``[o]peration, installation (including 
on-site installation), maintenance (checking), repair, overhaul and 
refurbishing.'' Because Sec.  744.22(f)(1) already includes 
``operation, installation (including on-site installation), maintenance 
(checking), repair, overhaul, or refurbishing,'' the inclusion of the 
term ``use'' in this section of the EAR is redundant and unnecessary. 
Likewise, BIS is removing the word ``design'' from Sec.  744.22(f)(1) 
of the EAR as redundant and unnecessary because that section already 
includes the Sec.  772.1 defined term ``development,'' which includes 
design, design research, design analyses, design concepts, and other 
design-related activities.
    In addition, the January 15 rule omitted a necessary conforming 
change to Sec.  732.3(j) of the EAR to include an evaluation of the 
applicability of any U.S. person activity controls pursuant to Sec.  
744.6 of the EAR. Accordingly, BIS is revising Sec.  732.3(j) to 
reflect that U.S. person activity controls apply not only with respect 
to certain weapons of mass destruction proliferation end uses, but also 
to certain military-intelligence end uses and end users, in accordance 
with the amendments made to Sec.  744.6 of the EAR in the January 15 
rule. In addition, BIS is revising the reference in Sec.  732.3(j) of 
the EAR to the definition of the term ``U.S. person'' in part 744 of 
the EAR to direct the reader to Sec.  772.1 of the EAR for a definition 
of that term, as the January 15 rule removed the definition of ``U.S. 
person'' from Sec.  744.6 of the EAR.

Burma Sanctions

    On March 8, 2021, BIS published a final rule, Burma: Implementation 
of Sanctions, in the Federal Register (86 FR 13173) (``March 8 rule'') 
amending various provisions of the EAR to implement sanctions on Burma, 
following a February 1, 2021 military coup that overthrew the country's 
democratically-elected government and the military's subsequent arrest 
and detention of government leaders, human rights defenders, and 
journalists. Among other revisions, the March 8 rule amended Sec.  
744.21 of the EAR to add Burma to the list of countries subject to 
military end-use and end-user controls. The March 8 rule and a second 
final rule, Addition of Entities to the Entity List, issued that day 
(March 08, 2021; 86 FR 13179) adding four entities (two government 
ministries and two related commercial enterprises) in Burma to the 
Entity List, were consistent with Executive Order 14014 of February 10, 
2021 (86 FR 9429), in which President Biden declared a national 
emergency to address the threat posed to the United States by the 
situation in, and in relation to, Burma.
    To strengthen sanctions on Burma, and to address in particular the 
Burmese military's continued oppression and surveillance of the Burmese 
people, whether by restricting internet access or through the 
imprisonment of protesters and civil society activists, BIS is hereby 
amending the EAR to apply military-intelligence-related controls to 
Burma and to restrict U.S. persons' activities in connection with 
military-intelligence end uses and end users in Burma. Specifically, 
BIS is amending Sec.  744.22 of the EAR to impose a license requirement 
on the export, reexport, or transfer (in-country) of any item subject 
to the EAR if an exporter, reexporter, or transferor has knowledge, or 
is informed by BIS, that the item is destined for a military-
intelligence end use or end user in Burma, specifically including 
Burma's Office of Chief of Military Security Affairs (OCMSA), a branch 
of the Burmese armed forces tasked with monitoring and interrogating 
Burmese protesters, and the Directorate of Signal, a branch of the 
Burmese Army responsible for the military telecommunications network. 
Additionally, BIS is revising Sec. Sec.  736.2(b)(7)(i)(A)(5) (General 
Prohibition Seven, on U.S. Person controls) and 744.6(b)(5) 
(Restrictions on specific activities of ``U.S. Persons'') of the EAR to 
add Burma to the list of countries in which U.S. persons are prohibited 
from supporting military-intelligence end uses or end users, even when 
such support does not involve an item subject to the EAR. BIS is taking 
this action to prevent the Burmese military, and specifically its 
intelligence operations, from benefitting from access to items subject 
to the EAR, including sensitive technology, or the expertise of U.S. 
persons. BIS is also making a conforming change to Sec.  744.1(a) of 
the EAR, which provides an overview of the end-use and end-user-based 
controls in part 744 of the EAR, to reflect the fact that military end-
use and end-user controls, as well as military-intelligence end-use and 
end-user controls, apply with respect to Burma.
    Although BIS is issuing this interim final rule to make certain 
technical corrections and to implement additional Burma sanctions, BIS 
continues to review public comments received in response to the January 
15 rule to assess whether any revisions to the scope of controls set 
forth in that rule are warranted.

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. 4801-
4852. ECRA provides the legal basis for BIS's principal authorities and 
serves as the authority under which BIS issues this rule.

[[Page 18435]]

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 interim final rule is not a ``significant regulatory 
action'' for purposes of Executive Order 12866.
    2. This rule does not contain policies with Federalism implications 
as that term is defined under Executive Order 13132.
    3. Pursuant to section 1762 of the Export Control Reform Act of 
2018 (50 U.S.C. 4821), 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.
    4. 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.
    5. 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 a 
collection of information previously approved by OMB under control 
number 0694-0088, Simplified Network Application Processing System, 
which includes, among other things, license applications and carries a 
burden estimate of 42.5 minutes for a manual or electronic submission. 
BIS expects the burden hours associated with this collection to not 
significantly increase with the publication of this rule.

Savings Clause

    Shipments of items that may no longer be made under No License 
Required (NLR) or 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 April 9, 2021, pursuant to actual orders for export to 
Burma, reexport to Burma, or transfer (in-country) within Burma may 
proceed to their destination under the prior authorization.

List of Subjects

15 CFR Part 732

    Steps for using the EAR.

15 CFR Part 736

    Exports, General prohibitions.

15 CFR Part 744

    End-user and end-use based control policy, Exports, Reporting and 
recordkeeping requirements, Terrorism.

    Accordingly, parts 732, 736, and 744 of the EAR (15 CFR parts 730 
through 774) are amended as follows:

PART 732--STEPS FOR USING THE EAR

0
1. The authority citation for part 732 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.; 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 732.3 is amended by revising paragraph (j) to read as 
follows:


Sec.  732.3   Steps regarding the ten general prohibitions.

* * * * *
    (j) Step 15: Restrictions on specific activities of ``U.S. 
persons.'' (1) Review the scope of activity prohibited by General 
Prohibition Seven (``U.S. person'' activities) (Sec.  736.2(b)(7) of 
the EAR) as that activity is described in Sec.  744.6 of the EAR. Keep 
in mind that such activity is not limited to exports, reexports, or 
transfers (in-country). ``U.S. person'' activities extend to services 
and shipping or transmitting certain wholly foreign-origin items, or 
facilitating such shipments or transmissions, in `support' of the 
specified weapons of mass destruction and military-intelligence-related 
end uses and end users and is not limited to items listed on the CCL or 
designated EAR99. See Sec.  744.6(b)(6) of the EAR for the full 
definition of `support,' which includes ordering, storing, using, 
selling, loaning, disposing, servicing, financing, transporting, 
freight forwarding, or conducting negotiations in furtherance of.
    (2) Review the definition of ``U.S. person'' in Sec.  772.1 of the 
EAR.
* * * * *

PART 736 -GENERAL PROHIBITIONS

0
3. The authority citation for part 736 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.; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 
950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 
61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 
CFR, 2001 Comp., p. 783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., 
p. 168; Notice of November 12, 2020, 85 FR 72897 (November 13, 
2020); Notice of May 7, 2020, 85 FR 27639.

0
4. Section 736.2 is amended by revising paragraph (b)(7)(i)(A)(5) and 
adding reserved paragraph (b)(7)(i)(B) to read as follows:


Sec.  736.2   General prohibitions and determination of applicability.

* * * * *
    (b) * * *
    (7) * * *
    (i) * * *
    (A) * * *
    (5) A `military-intelligence end use' or a `military-intelligence 
end user,' as defined in Sec.  744.22(f) of the EAR, in Burma, the 
People's Republic of China, Russia, or Venezuela; or a country listed 
in Country Groups E:1 or E:2.
    (B) [Reserved].
* * * * *

PART 744--CONTROL POLICY; END-USER AND END-USE BASED

0
5. The authority citation for part 744 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. 3201 et seq.; 42 U.S.C. 2139a; 22 
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 
1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 
608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 
61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 
CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., 
p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice 
of September 18, 2020, 85 FR 59641 (September 22, 2020); Notice of 
November 12, 2020, 85 FR 72897 (November 13, 2020).


0
6. Section 744.1 is amended by revising paragraph (a)(1) to read as 
follows:


Sec.  744.1  General provisions.

    (a)(1) Introduction. In this part, references to the EAR are 
references to 15 CFR chapter VII, subchapter C. This part contains 
prohibitions against exports, reexports, and selected transfers to 
certain end users and end uses as introduced under General Prohibitions 
Five (End use/End users) and Nine (Orders, Terms, and

[[Page 18436]]

Conditions), unless authorized by BIS. Sections 744.2, 744.3, and 744.4 
prohibit exports, reexports, and transfers (in-country) of items 
subject to the EAR to defined nuclear, missile, and chemical and 
biological weapons proliferation activities. Section 744.5 prohibits 
exports, reexports, and transfers (in-country) of items subject to the 
EAR to defined nuclear maritime end-uses. Consistent with General 
Prohibition Seven (Support of Proliferation Activities and certain 
Military-Intelligence End Uses and End Users (``U.S. person'' 
activities)), Sec.  744.6 prohibits specific activities by U.S. persons 
in support of certain nuclear, missile, chemical and biological weapons 
end uses, and whole plants for chemical weapons precursors, as well as 
certain military-intelligence end uses and military-intelligence end 
users. Section 744.7 prohibits exports and reexports of certain items 
for certain aircraft and vessels. Section 744.8 prohibits exports and 
reexports without authorization to certain parties who have been 
designated as proliferators of weapons of mass destruction or as 
supporters of such proliferators pursuant to Executive Order 13382. 
Section 744.9 sets forth restrictions on exports, reexports, and 
transfers (in-country) of certain cameras, systems, or related 
components. Section 744.10 prohibits exports and reexports of any item 
subject to the EAR to Russian entities, included in supplement no. 4 of 
this part. Section 744.11 imposes license requirements, to the extent 
specified in supplement no. 4 to this part on entities listed in 
supplement no. 4 to this part for activities contrary to the national 
security or foreign policy interests of the United States. Sections 
744.12, 744.13, and 744.14 prohibit exports and reexports of any item 
subject to the EAR to persons designated as Specially Designated Global 
Terrorists, Specially Designated Terrorists, or Foreign Terrorist 
Organizations, respectively. Section 744.15 sets forth the conditions 
for exports, reexports, and transfers (in-country) to persons listed on 
the Unverified List (UVL) in supplement no. 6 to this part, the 
criteria for revising the UVL, as well as procedures for requesting 
removal or modification of a listing on the UVL. Section 744.16 sets 
forth the license requirements, policies and procedures for the Entity 
List. Section 744.17 sets forth restrictions on exports, reexports, and 
transfers (in-country) of microprocessors and associated ``software'' 
and ``technology'' for military end uses and to military end users. 
Section 744.18 sets forth restrictions on exports, reexports, and 
transfers to persons designated in or pursuant to Executive Order 
13315. Section 744.19 sets forth BIS's licensing policy for 
applications for exports or reexports when a party to the transaction 
is an entity that has been sanctioned pursuant to any of three 
specified statutes that require certain license applications to be 
denied. Section 744.20 requires a license, to the extent specified in 
supplement no. 4 to this part, for exports and reexports of items 
subject to the EAR destined to certain sanctioned entities listed in 
supplement no. 4 to this part. In addition, these sections include 
license review standards for export license applications submitted as 
required by these sections. It should also be noted that part 764 of 
the EAR prohibits exports, reexports and certain transfers of items 
subject to the EAR to denied parties. Section 744.21 imposes 
restrictions for exports, reexports and transfers (in-country) of items 
on the CCL for a military end use or military end user in Burma, the 
People's Republic of China (PRC or China), Russia, or Venezuela. 
Section 744.22 imposes restrictions on exports, reexports, and 
transfers (in-country) for a military-intelligence end use or military-
intelligence end user in Burma, China, Russia, or Venezuela; or a 
country listed in Country Groups E:1 or E:2 (see supplement no. 1 to 
part 740 of the EAR).
* * * * *

0
7. Section 744.6 is amended by:
0
a. Revising paragraph (b)(5);
0
b. Adding double quotation marks around the term ``U.S. persons'' in 
paragraph (d)(2); and
0
c. Adding double quotation marks around the term ``U.S. person'' in 
paragraphs (e)(1) and (2).
    The revision reads as follows:


Sec.  744.6   Restrictions on specific activities of ``U.S. persons.''

* * * * *
    (b) * * *
    (5) A `military-intelligence end use' or a `military-intelligence 
end user,' as defined in Sec.  744.22(f) of the EAR, in Burma, the 
People's Republic of China, Russia, or Venezuela; or a country listed 
in Country Groups E:1 or E:2.
* * * * *

0
8. Section 744.22 is amended by revising paragraphs (a), (b), and (f), 
to read as follows:


Sec.  744.22  Restrictions on exports, reexports, and transfers (in-
country) to certain military-intelligence end uses or end users.

    (a) General prohibition. In addition to the license requirements 
for items specified on the Commerce Control List (CCL), you may not 
export, reexport, or transfer (in-country) any item subject to the EAR 
without a license from BIS if, at the time of the export, reexport, or 
transfer (in-country), you have ``knowledge'' that the item is 
intended, entirely or in part, for a `military-intelligence end use' or 
a `military-intelligence end user' in Burma, the People's Republic of 
China, Russia, or Venezuela; or a country listed in Country Groups E:1 
or E:2 (see supplement no. 1 to part 740 of the EAR).
    (b) Additional prohibition on those informed by BIS. BIS may inform 
you either individually by specific notice, through amendment to the 
EAR published in the Federal Register, or through a separate notice 
published in the Federal Register, that a license is required for 
specific exports, reexports, or transfers (in-country) of any item 
subject to the EAR because there is an unacceptable risk of use in, or 
diversion to, a `military-intelligence end use' or a `military-
intelligence end user' in Burma, the People's Republic of China, 
Russia, or Venezuela; or a country listed in Country Group E:1 or E:2 
(see supplement no. 1 to part 740 of the EAR).
* * * * *
    (f) Definitions. (1) `Military-intelligence end use' means the 
``development,'' ``production,'' operation, installation (including on-
site installation), maintenance (checking), repair, overhaul, or 
refurbishing of, or incorporation into, items described on the U.S. 
Munitions List (USML) (22 CFR part 121, International Traffic in Arms 
Regulations), or classified under ECCNs ending in ``A018'' or under 
``600 series'' ECCNs, which are intended to support the actions or 
functions of a `military-intelligence end user,' as defined in this 
section.
    (2) `Military-intelligence end user' means any intelligence or 
reconnaissance organization of the armed services (army, navy, marine, 
air force, or coast guard); or national guard. For license requirements 
applicable to other government intelligence or reconnaissance 
organizations in Burma, China, Russia, or Venezuela, see Sec.  744.21 
of the EAR. Military-intelligence end users subject to the license 
requirements set forth in this Sec.  744.22 include, but are not 
limited to, the following:

[[Page 18437]]

    (i) Burma. Office of Chief of Military Security Affairs (OCMSA) and 
the Directorate of Signal.
    (ii) Cuba. Directorate of Military Intelligence (DIM) and 
Directorate of Military Counterintelligence (CIM).
    (iii) China, People's Republic of. Intelligence Bureau of the Joint 
Staff Department.
    (iv) Iran. Islamic Revolutionary Guard Corps Intelligence 
Organization (IRGC-IO) and Artesh Directorate for Intelligence (J2).
    (v) Korea, North. Reconnaissance General Bureau (RGB).
    (vi) Russia. Main Intelligence Directorate (GRU).
    (vii) Syria. Military Intelligence Service.
    (viii) Venezuela. General Directorate of Military 
Counterintelligence (DGCIM).

Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2021-07357 Filed 4-7-21; 4:15 pm]
BILLING CODE 3510-33-P