Implementation of Additional Sanctions Against Russia and Belarus Under the Export Administration Regulations (EAR) and Refinements to Existing Controls, 4804-4815 [2024-01408]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Industry and Security

[Federal Register Volume 89, Number 17 (Thursday, January 25, 2024)]
[Rules and Regulations]
[Pages 4804-4815]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01408]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 734 and 746

[Docket No. 240119-0019]
RIN 0694-AJ48


Implementation of Additional Sanctions Against Russia and Belarus 
Under the Export Administration Regulations (EAR) and Refinements to 
Existing Controls

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

ACTION: Final rule.

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SUMMARY: In response to the Russian Federation's (Russia's) ongoing 
aggression against Ukraine and Belarus's complicity in the invasion, 
the Department of Commerce is strengthening its existing sanctions 
under the Export Administration Regulations (EAR) against Russia and 
Belarus, including by expanding the scope of the EAR's Russian and 
Belarusian Industry Sector Sanctions and making certain changes to the 
licensing requirements that apply to the occupied Crimea region of 
Ukraine as well. Additionally, this rule revises recent restrictions 
targeting Iran's supply of Unmanned Aerial Vehicles to Russia. This 
rule also refines certain existing export controls on Russia and 
Belarus. The Department of Commerce is taking these actions to enhance 
the effectiveness of its controls on these countries and to better 
align them with those implemented by U.S. allies and partners.

DATES: This rule is effective on January 23, 2024.

FOR FURTHER INFORMATION CONTACT: For general questions on this final 
rule, contact Eileen Albanese, Director, Office of National Security 
and Technology Transfer Controls, Bureau of Industry and Security, 
Department of Commerce, Phone: (202) 482-0092, Fax: (202) 482-482-3355, 
Email: [email protected]. For emails, include ``Russia, Belarus, and 
Iran December 2023 export control measures'' in the subject line.

SUPPLEMENTARY INFORMATION:

I. Background

    In response to Russia's February 2022 further invasion of Ukraine, 
BIS imposed extensive sanctions on Russia under the Export 
Administration Regulations (15 CFR parts 730 through 774) (EAR) as part 
of the final rule ``Implementation of Sanctions Against Russia Under 
the Export Administration Regulations (EAR)'' (the Russia Sanctions 
Rule) (87 FR 12226, March 3, 2022). To address Belarus's complicity in 
the invasion, BIS imposed similar sanctions on Belarus under the EAR in 
a final rule, ``Implementation of Sanctions Against Belarus'' 
(``Belarus Sanctions Rule'') (87 FR 13048, March 6, 2022). During the 
last two years, BIS has published a number of additional final rules 
strengthening the export controls on Russia and Belarus, including 
measures undertaken in coordination with U.S. allies and partners.
    Most recently, BIS strengthened its existing sanctions under the 
EAR against Russia and Belarus, including by expanding the scope of the 
EAR's Russian and Belarusian Industry Sector Sanctions and by expanding 
the foreign direct product rule that already applied to Russia and 
Belarus to apply as well to the Crimea region of Ukraine, which has 
been occupied by Russia since 2014 (88 FR 33422, May 22, 2023). 
Additionally, that rule revised restrictions implemented in a February 
2023 rule, ``Export Control Measures Under the Export Administration 
Regulations (EAR) to Address Iranian Unmanned Aerial Vehicles (UAVs) 
and Their Use by the Russian Federation,'' targeting Iran's supply of 
Unmanned Aerial Vehicles (UAVs) to Russia and refined existing export 
controls on Russia and Belarus (Iran UAV rule) (88 FR 12150, February 
27, 2023). The Department of Commerce took these actions to enhance the 
effectiveness of its controls on these countries and to better align 
them with those implemented by U.S. allies and partners.
    Taken together, these actions under the EAR reflect the U.S. 
Government's position that Russia's invasion of Ukraine and Belarus's 
complicity in the invasion, flagrantly violate international law, are 
contrary to U.S. national security and foreign policy interests, and 
undermine global order, peace, and security.
    The export control measures in this final rule build upon the 
policy objectives set forth in the earlier rules referenced above. The 
adoption of these measures, undertaken in part to better align U.S. 
controls with the stringent measures implemented by partners and 
allies, will enhance the effectiveness of the multilateral sanctions on 
Russia by further limiting Russia's access to items that enable its 
military capabilities and to sources of revenue that could support 
those capabilities. Additionally, the new or expanded controls 
specified in this rule target Belarus as part of the U.S. response to 
the country's complicity in

[[Page 4805]]

Russia's aggression, as well as Iran for its support of Russia.

II. Overview of New Controls

    This rule revises the EAR to enhance and strengthen the existing 
sanctions against Russia and Belarus by expanding the scope of the 
Russian and Belarusian industry sector sanctions to better align them 
with the controls that have been implemented by U.S. allies and 
partners imposing substantially similar controls on Russia and Belarus, 
including a control added on Iran pursuant to the Iran UAV rule, that 
targeted Iran's supply of UAVs to Russia (88 FR 12150, February 27, 
2023) (Iran UAVs rule). For similar policy reasons, this rule also 
refines other controls on Russia and Belarus that were imposed in 
response to Russia's February 2022 further invasion of Ukraine.

III. Amendments to the Export Administration Regulations (EAR)

    This rule enhances and strengthens the sanctions that have been 
implemented on Russia, Belarus, the occupied Crimea region of Ukraine, 
and Iran under the EAR, as described under sections A and B below. The 
regulatory revisions described under Section A. Imposition of new 
export controls on Russia, Belarus, and Iran, including changes to 
align controls with those imposed by U.S. allies and partners include:
     Expansion of Russian and Belarusian Industry Sector 
Sanctions that apply to items listed in supplement no. 4 to part 746 to 
add additional items to align with controls imposed by U.S. partners 
and allies and to make other changes to render the EAR's controls 
stronger, more effective, and easier to understand;
     Expansion of items that require a license under Sec.  
746.7 when destined to Iran and under Sec.  746.8 when destined to 
Russia or Belarus under supplement no. 7 to part 746 to add an 
additional item to align with controls imposed by U.S. partners and 
allies and to make other changes to render the EAR's controls stronger, 
more effective, and easier to understand; and
     Eliminating the lowest-level military and spacecraft-
related items (i.e., .y items) from being eligible for de minimis 
treatment when incorporated into foreign-made items for export from 
abroad or reexport to Russia or Belarus.

A. Imposition of New Export Controls on Russia, Belarus, and Iran, 
Including Changes To Align Controls With Those Imposed by U.S. Allies 
and Partners

    This rule expands the scope of the Russian and Belarusian Industry 
Sector Sanctions (Sec.  746.5 of the EAR) by adding additional items to 
supplement no. 4 to part 746 that will require a license under Sec.  
746.5(a)(1)(ii), as described further below. This rule also adds an 
additional item to supplement no. 7 to part 746 that will require a 
license under Sec.  746.7 when destined to Iran and under Sec.  746.8 
when destined to Russia or Belarus.
    1. Expansion of Russian and Belarusian Industry Sector Sanctions by 
adding additional items to supplement no. 4 to part 746 consistent with 
the objective to undermine Russia's and Belarus's industrial bases and 
align the EAR controls further with those imposed by U.S. partners and 
allies.
    This rule expands the list of items set forth in supplement no. 4 
to part 746 (Russian and Belarusian Industry Sector Sanctions Pursuant 
to Sec.  746.5(a)(1)(ii)). Specifically, this rule adds 94 additional 
Harmonized Tariff Schedule (HTS)-6 Code entries to supplement no. 4; 
consequently, these items will now require a license for export, 
reexport to, or transfer within Russia or Belarus under Sec.  
746.5(a)(1)(ii). Restrictions on these 94 groups of industrial items 
are intended to further undermine the Russian and Belarusian industrial 
bases and their ability to continue to support Russia's military 
aggression in Ukraine. The items added include a variety of industrial 
materials, items needed for manufacturing, and certain aircraft-related 
items. The complete list of 94 new HTS-6 Codes this rule adds to 
supplement no. 4 are identified in amendatory instruction 10.
    In May 2023, BIS imposed controls on entire harmonized system 
chapters 84, 85, and 90 in supplement no. 4 to part 746 of the EAR. 
With this new rule, BIS will notably be controlling all of harmonized 
system chapter 88 as well. Chapter 88 is focused on aircraft, 
spacecraft, and parts thereof, and there is significant overlap between 
items in this chapter and items classified in Category 9 of the 
Commerce Control List (see, e.g., Export Control Classification Number 
(ECCN) 9A991). However, BIS believes that adding controls to all of 
chapter 88 will more closely align U.S. controls with those of U.S. 
allies, who generally impose aviation controls on Russia through 
reference to Chapter 88. This will also ensure that additional related 
items not enumerated or otherwise specified on the Commerce Control 
List are controlled for export, reexport, or transfer (in-country) to 
or within Russia and Belarus. Through such comprehensive controls, BIS 
intends to cut further off Russia's access to items of potential 
military significance and expand the economic impact of controls that 
will deny Russia additional resources it needs to continue waging war. 
Consistent with the amendments made elsewhere by this rule, the proper 
order of review for destination-based controls specific to Russia and 
Belarus is to review Sec.  746.8 before reviewing controls imposed by 
Sec.  746.5. Furthermore, consistent with the Order of Review described 
in supplement no. 4 to part 774 of the EAR and Sec.  734.3(b)(1)(i), 
defense articles on the United States Munitions List (USML) are subject 
to the exclusive jurisdiction of another agency and are thus not 
subject to the EAR. Accordingly, no USML defense articles are 
controlled under the EAR for export, reexport, or transfer (in-country) 
to or within Russia or Belarus based on Sec.  746.5, no matter their 
tariff code classification. See the International Traffic in Arms 
Regulations (ITAR) (22 CFR parts 120 through 130) for controls for USML 
defense articles.
    Items controlled through amendments made by this rule were 
identified based on a review of public and non-public information 
regarding which items Russia seeks to further its war against Ukraine, 
an evaluation of areas in which U.S. trade has continued to provide an 
economic benefit to Russia, and an assessment of how the United States 
could better align with its allies and partners to degrade Russia's war 
effort. BIS estimates these changes to supplement no. 4 to part 746 
will result in an additional 25 license applications submitted to BIS 
annually.
    2. Expansion of items that require a license under Sec.  746.7 when 
destined to Iran and under Sec.  746.8 when destined to Russia or 
Belarus under supplement no. 7 to part 746 to align with controls 
imposed by U.S. partners and allies and to make other changes to render 
the EAR's controls stronger, more effective, and easier to understand.
    In supplement no. 7 to part 746 (Items That Require a License Under 
Sec.  746.6 When Destined to the Temporarily Occupied Crimea region of 
Ukraine, Under Sec.  746.7 When Destined to Iran, and Under Sec.  746.8 
When Destined to Russia or Belarus), this rule expands the list of 
items that require a license by adding one additional HTS-6 Code entry 
(852910) to supplement no. 7; consequently, items classified under this 
HTS-6 entry will now require a license for export or reexport to Iran 
under Sec.  746.7(a)(1)(ii) and to Russia and Belarus under Sec.  
746.8(a)(2). The restrictions on these items are intended to further 
undermine Iran's ability to support the Russian and Belarusian 
industrial bases that have in turn provided support for Russia's 
military

[[Page 4806]]

aggression in Ukraine. The items that fall under this entry include a 
variety of antennas and antenna reflectors and parts thereof. BIS 
estimates this change to supplement no. 7 to part 746 will result in an 
additional five license applications submitted to BIS annually.
    3. Prohibiting the use of de minimis for .y ``600 series'' and 
9x515 items for Belarus and Russia.
    This rule revises Sec.  734.4 (De minimis U.S. content) to expand 
the scope of the paragraph (a)(6)(ii) restriction that specifies there 
is no de minimis level for foreign-made items that incorporate U.S.-
origin 9x515 or ``600 series'' .y items when destined for a country 
listed in Country Group E:1 or E:2 of supplement no. 1 to part 740 of 
the EAR or for China. Specifically, this rule adds Belarus and Russia 
to this paragraph so that there is no de minimis level for U.S.-origin 
9x515 or ``600 series'' .y items destined for Belarus or Russia. Adding 
Belarus and Russia to this restriction on the use of de minimis will 
bring additional foreign-made military and spacecraft items within the 
scope of the EAR and put additional pressure on Russia's military and 
defense industrial base, as well as make it more difficult for foreign 
suppliers to provide even low-level military and spacecraft items to 
Belarus and Russia. While the license requirements under Sec.  
746.8(a)(1) already apply to the export, reexport, or transfer (in-
country) to or within Russia or Belarus of these low-level military and 
spacecraft items, eliminating the eligibility of these items for de 
minimis treatment makes the EAR's Russia and Belarus controls stronger, 
more far reaching, and more effective. BIS estimates this change to 
Sec.  734.4 will result in an additional five license applications 
submitted to BIS annually.

B. Corrections and Clarifications to Existing Controls on Russia and 
Belarus

    Some of the EAR's Russia and Belarus-related provisions discussed 
above in Section A with respect to the additional controls being 
imposed on Russia and Belarus are also discussed here because this rule 
makes corrections and clarifications with respect to those provisions. 
The regulatory revisions described under Section B. Corrections and 
clarifications to existing controls on Russia and Belarus include:
     Addition of exclusion from license requirements under 
Sec.  746.6 for exports, reexports, and transfers (in-country) related 
to deployments by the Armed Forces of Ukraine to or within the 
temporarily occupied Crimea region of Ukraine and covered regions of 
Ukraine;
     Clarification that U.S.-origin controlled content that 
meets the criteria in new Sec.  746.10(a)(3) is excluded from de 
minimis calculations when identifying controlled U.S.-origin content to 
harmonize with similar exclusions under Sec. Sec.  746.5 and 746.8;
     Clarification regarding which EAR section takes precedence 
when determining licensing requirements that apply to items identified 
in supplements no. 2, 4, or 5 to part 746 that are also classified in 
an ECCN under Sec. Sec.  746.5, 746.8, and 746.10;
     Clarification that fasteners are excluded from the scope 
of supplement nos. 2, 4, 5, and 7, but are subject to the license 
requirements under Sec.  744.21 for Russia and Belarus, as well as any 
other part 744 license requirement that applies to all items subject to 
the EAR;
     Harmonization of License Exceptions available under 
Sec. Sec.  746.5, 746.8, and 746.10, except as limited in the 
introductory text of the respective paragraph (c);
     Clarification that ``medicines'' are excluded from the 
scope of supplement no. 6 to part 746;
     Conforming change to adopt case-by-case license review 
policy for applications related to the safety of flight under 
Sec. Sec.  746.5 and 746.10 to conform with Sec.  746.8; and
     Clarification that the import restrictions on the 
temporary import of firearms from Ukraine do not apply to firearms that 
were previously exported, reexported, or transferred (in-country) under 
a BIS license that are being temporarily returned to the United States 
for repair and servicing.
    BIS anticipates that the changes discussed in section B will not 
result in the submission of any additional license applications to BIS.
    1. Addition of exclusion from license requirements for deployments 
by the Armed Forces of Ukraine to or within the temporarily occupied 
Crimea region of Ukraine and covered regions of Ukraine.
    In Sec.  746.6, this rule adds an exclusion from the license 
requirements for exports, reexports, and transfers (in-country) to or 
within the temporarily occupied Crimea region of Ukraine and covered 
regions of Ukraine related to deployments made by the Armed Forces of 
Ukraine. This exclusion is added to facilitate the operations of the 
Armed Forces of Ukraine (AFU or ZSU) within the temporarily occupied 
Crimea region of Ukraine and covered regions of Ukraine. This change is 
intended to make their deployments more efficient and effective.
    2. Clarification that U.S.-origin controlled content that meets the 
criteria in new Sec.  746.10(a)(3) is also excluded from de minimis 
calculations when identifying controlled U.S.-origin content to 
harmonize with similar exclusions under Sec. Sec.  746.5 and 746.8.
    In Sec.  746.10 (`Luxury goods' sanctions against Russia and 
Belarus and Russian and Belarusian oligarchs and malign actors), this 
rule adds a new paragraph (a)(3) (Exclusion from scope of U.S.-origin 
controlled content under paragraphs (a)(1) and (2) of this section). 
Currently, certain U.S.-origin EAR99 items are not considered U.S. 
controlled content for purposes of the EAR's de minimis rules when 
incorporated into foreign-made items reexported or exported from abroad 
from countries listed in supplement no. 3 to part 746 of the EAR 
(Countries Excluded from Certain License Requirements of Sec. Sec.  
746.6, 746.7, and 746.8). These exclusions are currently found in 
Sec. Sec.  746.5(a)(3) and 746.8(a)(5) of the EAR. This addition to 
Sec.  746.10 clarifies that the same de minimis exclusion applies to 
the luxury goods items identified in supplement no. 5 to part 746 of 
the EAR.
    As a conforming change to the clarification to Sec.  746.10, this 
final rule revises supplement no. 2 to part 734 (Guidelines for De 
Minimis Rules) by adding an appropriate cross-reference to the new 
paragraph (a)(3).
    3. Clarification regarding which section takes precedence for items 
identified in supplements no. 2, 4, or 5 to part 746 that are also 
classified in an ECCN.
    This rule revises the introductory text in Sec. Sec.  746.5 and 
746.10 and makes a conforming change to Sec.  746.8 to clarify how 
exporters should treat items that are controlled to Russia or Belarus 
by more than one section of the EAR. Specifically, in Sec. Sec.  746.5 
and 746.10, this rule revises paragraph (a) introductory text to 
establish an order of review for purposes of the license requirements, 
license exceptions, and license review policies that apply to any item 
that is both classified in an Export Control Classification Number 
(ECCN) on the Commerce Control List (CCL) in supplement no. 1 to part 
774, and identified in supplement no. 4, 5, or 6 to part 746. BIS has 
imposed export controls on Russia and Belarus under three different 
sections of the EAR, sometimes using different classification methods. 
Under Sec.  746.5, BIS largely imposes controls on Russia using HTS-6 
code (see supplement no. 4 to part 746 of the EAR) or description (see 
supplement no. 6 to part 746 of the EAR). Under Sec.  746.10, BIS 
imposes controls on Russia using HTS-6 codes (see supplement no. 5 to 
part 746 of the EAR). However, under Sec.  746.8, BIS largely imposes 
controls using ECCNs.

[[Page 4807]]

Since nearly all items classified under ECCNs also can be classified 
under, for example, an HTS-6 code, there are some instances when an 
item may require a license under Sec.  746.8 of the EAR, and under one 
of the other sections that imposes controls on Russia and Belarus.
    In Sec.  746.5, this rule adds two sentences to the end of the 
paragraph (a) introductory text to clarify two points. First, that a 
license is not required under Sec.  746.5(a)(1)(ii) or (iii) for any 
item that is listed in supplement no. 4 or 6 and classified in an ECCN. 
Second, that exporters, reexporters, and transferors should consult 
Sec.  746.8 for license requirements, license exceptions, and license 
review policies that apply to items classified under ECCNs. In this 
way, this amendment clarifies that controls in Sec.  746.8 should be 
reviewed before controls in Sec.  746.5. However, this rule does not 
make any changes to Sec.  746.5(a)(1)(i), which imposes end-use 
specific controls on items described in supplement no. 2 to part 746. 
This is because that provision's end-use control applies more broadly 
than the destination scope in Sec.  746.8, and that control continues 
to apply even for items listed in supplement no. 2 to part 746 and 
classified in an ECCN. For the same reason, in Sec.  746.10, this rule 
revises the paragraph (a) introductory text to clarify two similar 
points as in Sec.  746.5. First, that for purposes of Sec.  
746.10(a)(1), this rule specifies that a license is not required for 
any item that is listed in supplement no. 5 and classified in an ECCN. 
Second, this rule adds a sentence to direct exporters, reexporters, and 
transferors to see Sec.  746.8 for license requirements, license 
exceptions, and license review policies for exports, reexports, and 
transfers to or within Russia or Belarus for items classified under 
ECCNs. This rule does not exclude any item that is listed in supplement 
no. 5 and is classified in an ECCN from the scope of the license 
requirements under Sec.  746.10(a)(2) because this is a worldwide end-
user license requirement, which has a much broader destination scope 
than Sec.  746.8. Because of the narrowed scope of the ECCN controls 
under Sec.  746.10, this rule removes the exclusion from the paragraph 
(a) introductory text for ECCNs 5A991, 5A992.c, and 5D992.c because it 
is no longer needed.
    In Sec.  746.8, this rule adds a sentence to the end of the 
paragraph (a) introductory text to specify that this section is used 
for determining license requirements for exports, reexports, and 
transfers to or within Russia or Belarus of any item that is listed in 
supplement nos. 4 through 6 and is classified in an ECCN. This rule 
also adds a second sentence to direct exporters, reexporters, and 
transferors to see Sec. Sec.  746.5 and 746.10 for license 
requirements, license review policies, and license exceptions for 
exports, reexports, and transfers (in-country) to or within Russia or 
Belarus of any EAR99-designated item that is also listed in supplement 
nos. 4 through 6, and to also consult the end-use and end-user controls 
under part 744 of the EAR. This rule adds a third sentence to specify 
that this ECCN exclusion from the scope of the license requirements in 
Sec. Sec.  746.5 and 746.10 is not applicable to the end-use license 
requirements imposed under Sec.  746.5(a)(1)(i) or the end-user license 
requirements imposed under Sec.  746.10(a)(2).
    4. Clarification that fasteners are excluded from the scope of 
supplement nos. 2, 4, 5, and 7, but are subject to the license 
requirements under Sec.  744.21 for Russia and Belarus, as well as any 
other part 744 license requirement that applies to all items subject to 
the EAR.
    Supplement nos. 2, 4, 5, and 7 to part 746 include text that 
specifies that items described in each of these supplements include any 
modified or designed ``components,'' ``parts,'' ``accessories,'' and 
``attachments'' therefor regardless of the HTS Code or HTS Description 
of the ``components,'' ``parts,'' ``accessories,'' and ``attachments,'' 
apart from any ``part'' or minor ``component'' that is a fastener 
(e.g., screw, bolt, nut, nut plate, stud, insert, clip, rivet, pin), 
washer, spacer, insulator, grommet, bushing, spring, wire, or solder. 
BIS has received questions from the public asking for confirmation 
whether a fastener (e.g., screw, bolt, nut, nut plate, stud, insert, 
clip, rivet, pin), washer, spacer, insulator, grommet, bushing, spring, 
wire, or solder, which are excluded from the scope of these three 
supplements and the license requirements under the respective 
Sec. Sec.  746.5, 746.8, and 746.10, could therefore be exported, 
reexported, or transferred (in-country) to a Russian or Belarusian 
``military end user'' or for a Russian or Belarusian ``military end 
use.'' A license would be required for such an export, reexport, or 
transfer (in-country) under Sec.  744.21 (Restrictions on certain 
`military end uses' or `military end users'). In addition to clarifying 
this response to these questions, this rule revises the introductory 
text of supplement nos. 2, 4, and 5 to add two sentences to specify 
that although these fasteners (e.g., screws, bolts, nuts, nut plates, 
studs, inserts, clips, rivets, pins, washers, spacers, insulators, 
grommets, bushing, springs, wires, and solders) are excluded from the 
scope of these respective supplements, the exporter, reexporter, or 
transferor must also review part 744 for the license requirements for 
Russia and Belarus that extend to all items ``subject to the EAR.''
    5. Harmonization of License Exceptions available under Sec. Sec.  
746.5, 746.8 and 746.10, except as limited in the introductory text of 
the respective paragraph (c) paragraphs.
    In Sec. Sec.  746.5, 746.8, and 746.10, this rule revises paragraph 
(c) (License exceptions) for each of these three sections to adopt a 
common set of license exceptions that are available for the Russia and 
Belarus controls being implemented under part 746 of the EAR. In order 
to use any EAR License Exception, the export, reexport, or transfer 
(in-country) must not be otherwise restricted under Sec.  740.2 and 
must meet all of the applicable terms and conditions of the referenced 
license exception. Because of the differences in scope between 
supplement nos. 2, 4, 5, and 6, as well as some of the differences 
referenced in Sec. Sec.  746.5, 746.8, and 746.10, BIS has not allowed 
license exceptions for all Russia controls equally. In general, there 
have been good reasons for this; for example, there is no reason to add 
a license exception for a CCL item in a section of the EAR that does 
not apply to CCL items. However, BIS has found that in some cases, this 
approach to license exception eligibility has caused confusion, such as 
when a particular item is controlled under multiple provisions, only 
one of which is eligible for a particular license exception. This rule 
adopts a common set of license exceptions for all three sections. BIS 
notes that the change described under section B.3 of this rule (i.e., 
on order of review) will also likely reduce issues related to the 
inconsistent language in Russia-related sections of part 746 
significantly, but to ensure the issue is addressed as fully as 
possible, this rule also adopts this common list of EAR License 
Exceptions that will be available under these three sections.
    This rules also places the License Exceptions in numerical order 
for ease of reference under each of the paragraph (c) references. This 
rule does not adopt a common set of License Exceptions for Sec.  746.6 
(on the Temporarily occupied Crimea region of Ukraine and covered 
regions of Ukraine) and does not expand the scope of license exceptions 
available to overcome the end-user license requirements under Sec.  
746.10(a)(2) because changes are not warranted for those sections. For 
ease of reference, BIS has set out a short table below with the License 
Exceptions in one column and then three additional columns for 
Sec. Sec.  746.5, 746.8, and 746.10 indicating the availability of each 
License

[[Page 4808]]

Exception. For the column entries that indicate ``Available'' that 
section included this license exception eligibility prior to this rule. 
For any column that indicates ``Eligibility added,'' this rule is 
adding EAR License Exception eligibility for that respective section.
Table for Comparison of License Exception Eligibility Prior to This 
Rule and New License Exception Eligibility Added by This Rule
    BIS cautions exporters, reexporters, and transferors that a license 
exception or portion of a license exception that is referenced as being 
available under Sec. Sec.  746.5, 746.8, and 746.10 is only the first 
step in determining whether the referenced EAR license exception or 
portion of such license exception may actually be used. The exporter, 
reexporter, or transferor must then review Sec.  740.2 to confirm that 
none of the general restrictions on the use of EAR License Exceptions 
apply, followed by a review to determine whether the contemplated 
transaction meets all of the applicable terms and conditions of the 
referenced license exception.

----------------------------------------------------------------------------------------------------------------
          License exceptions                 Sec.   746.5             Sec.   746.8            Sec.   746.10
----------------------------------------------------------------------------------------------------------------
License Exception temporary exports    Eligibility added......  Available..............  Eligibility added.
 and reexports (TMP) for items for
 use by the news media as set forth
 in Sec.   740.9(a)(9) of the EAR.
License Exception governments and      Available..............  Available..............  Eligibility added.
 international organizations (GOV)
 (Sec.   740.11(b)).
License Exception software updates     Eligibility added......  Available..............  Eligibility added.
 (TSU) for software updates for civil
 end-users that are wholly-owned U.S.
 subsidiaries, branches, or sales
 offices, foreign subsidiaries,
 branches, or sales offices of U.S.
 companies that are joint ventures
 with other U.S. and companies, joint
 ventures of U.S. companies with
 companies headquartered in countries
 from Country Group A:5 and A:6 in
 supplement no. 1 to part 740 of the
 EAR countries, the wholly-owned
 subsidiaries, branches, or sales
 offices of companies headquartered
 in countries from Country Group A:5
 and A:6 in supplement no. 1 to part
 740, or joint ventures of companies
 headquartered in Country Group A:5
 and A:6 with other companies
 headquartered in Country Groups A:5
 and A:6 (Sec.   740.13(c) of the
 EAR).
License Exception baggage (BAG),       Eligibility added......  Available..............  Available.
 excluding firearms and ammunition
 (Sec.   740.14, excluding paragraph
 (e), of the EAR).
License Exception aircraft, vessels    Available..............  Available..............  Eligibility added.
 and spacecraft (AVS), excluding any                                                     Note: A narrower subset
 aircraft registered in, owned or                                                         of License Exception
 controlled by, or under charter or                                                       AVS was previously
 lease by Russia or Belarus or a                                                          referenced, but for
 national of Russia or Belarus (Sec.                                                      conformity with the
  740.15(a) and (b) of the EAR).                                                          other two sections
                                                                                          this rule adopts the
                                                                                          same License Exception
                                                                                          AVS eligibility.
License Exception encryption           Eligibility added......  Available..............  Eligibility added.
 commodities, software, and
 technology (ENC) for civil end-users
 that are wholly-owned U.S.
 subsidiaries, branches, or sales
 offices, foreign subsidiaries,
 branches, or sales offices of U.S.
 companies that are joint ventures
 with other U.S. companies, joint
 ventures of U.S. companies with
 companies headquartered in countries
 from Country Group A:5 and A:6 in
 supplement no. 1 to part 740 of the
 EAR countries, the wholly-owned
 subsidiaries, branches, or sales
 offices of companies headquartered
 in countries from Country Group A:5
 and A:6 in supplement no. 1 to part
 740, or joint ventures of companies
 headquartered in Country Group A:5
 and A:6 with other companies
 headquartered in Country Groups A:5
 and A:6 (Sec.  Sec.   740.13(c) and
 740.17 of the EAR).
License Exception commodities and      Available..............  Available..............  Available.
 software authorized under License
 Exception consumer communications
 devices (CCD) (Sec.   740.19 of the
 EAR).
----------------------------------------------------------------------------------------------------------------

    6. Clarification that ``medicines'' are excluded from the scope of 
supplement no. 6 to part 746.
    In supplement no. 6 to part 746 (Russian and Belarusian Industry 
Sector Sanctions Pursuant to Sec.  746.5(a)(1)(iii)), this rule adds 
one sentence to the end of the introductory text to the supplement to 
specify that this supplement does not include any item that meets the 
definition of ``medicine'' in Sec.  772.1 of the EAR. Under the EAR, 
including Russia and Belarus sanctions, ``medicines'' means a ``drug'' 
as defined in section 201 of the Federal Food, Drug and Cosmetic Act 
(21 U.S.C. 321). For purposes of the EAR, medicine includes EAR99 
prescription and over the counter medicines for humans and animals. 
This rule specifies here that certain medicines, such as certain 
vaccines and immunotoxins, are on the Commerce Control List and are not 
affected by this change.
    7. Conforming change to adopt case-by-case license review policy 
for applications related to safety of flight under Sec. Sec.  746.5 and 
746.10 to conform with Sec.  746.8.

[[Page 4809]]

    This rule also makes a conforming change to the licensing policy in 
Sec. Sec.  746.5(b)(2) and 746.10(b) to add applications related to 
safety of flight to the case-by-case license review policy under these 
two sections for consistency with the licensing policy in Sec.  
746.8(b). This conforming change is made because certain EAR99 items 
used in aircraft that may be related to safety of flight are identified 
in supplement nos. 4 and 5 and license applications for these items 
should be reviewed consistently with the license review policy in Sec.  
746.8. Specifically, in Sec.  746.5, this rule adds a new paragraph 
(b)(2)(i) to add applications related to safety of flight to the case-
by-case license review policy and redesignates existing paragraphs 
(b)(2)(i) through (v) as paragraphs (b)(2)(ii) through (vi), 
respectively. In Sec.  746.10, this rule revises paragraph (b) 
(Licensing policy) to add a new paragraph (b)(1) (Presumption of 
denial) and adds a new paragraph (b)(2) (Case-by-case) to specify the 
license applications that will be reviewed under a case-by-case 
licensing policy. This rule adds a new paragraph (b)(2)(i) for the 
case-by-case licensing policy for applications related to safety of 
flight and adds new paragraphs (b)(2)(ii) and (iii) for the previous 
case-by-case licensing policies that already applied under paragraph 
(b) of Sec.  746.10.
    BIS reminds applicants that BIS and the other license review 
agencies have used a narrow and restrictive interpretation of what 
items would qualify for the ``related to safety of flight'' category 
set forth in Sec.  746.8(b)(2)(i). When BIS originally added the case-
by-case license review policy to Sec.  746.8(b), BIS provided guidance 
as part of BIS's outreach on the Russia sanctions, such as at BIS 
conferences and outreach seminars, to clarify that falling within this 
safety of flight-related category would have to satisfy a strict 
standard and would not apply broadly to all items used on an aircraft, 
but only to those items without which an aircraft would be unable to be 
safely operated. BIS does not intend that this category apply to 
aircraft that are in ``production,'' only those that require safety-
critical items in an emergency. Since that time, BIS has consistently 
maintained this position in its review of applications as well as in 
outreach efforts.
    8. Clarification that the import restriction on the temporary 
import of firearms from Ukraine does not apply to firearms that were 
previously exported, reexported, or transferred (in-country) under a 
BIS license that are being temporarily returned for repair and 
servicing.
    BIS has authorized under BIS licenses the export and reexport to 
Ukraine of various firearms subject to the EAR since the Russian 
invasion of Ukraine. BIS has received questions from the public on 
whether it would be permissible to temporarily return those firearms to 
the United States for repair and servicing and to subsequently return 
those firearms under License Exception Replacement of Parts and 
Equipment (RPL) (Sec.  740.10(b)) or under a new BIS license if the 
capabilities of the firearms were changed as a result of such repair 
and servicing. BIS will be updating the ``Exports of Firearms and 
Related Items FAQs'' on the BIS website at https://www.bis.doc.gov/index.php/documents/policy-guidance/2572-faqs-for-the-commerce-category-i-iii-firearms-rule-posted-on-bis-website-7-7-20/file to 
address this question. Because of the importance of the answer to this 
question for Ukraine's continued ability to receive these items as part 
of its defense against Russia's war of aggression, and to inform as 
many exporters, reexporters, and transferors (in-country) as possible, 
BIS is also publishing this new firearms frequently asked question 
(FAQ) in the preamble of this rule. U.S. origin firearms originally 
provided to Ukraine pursuant to a BIS license may be temporarily 
imported pursuant to the EAR for repair or for replacement under 
License Exception RPL (15 CFR 740.10(b)(4)(i)) for return to Ukraine 
for use in its defense against Russia's war of aggression, because such 
activity is consistent with the EAR and U.S. foreign policy.
    Q: My company exported 500 firearms classified under ECCN 0A501.a 
under a BIS license to Ukraine in 2022. These rifles are not specified 
under Annex A in supplement no. 4 to part 740. At this time, the 
consignee in Ukraine needs to temporarily return 50 of the rifles that 
they received under a BIS license to my company in the United States 
for repair and servicing. I have reviewed the general restrictions 
under 15 CFR 740.2 and the applicable terms and conditions under 
License Exception RPL under 15 CFR 740.10(b) and believe the export 
would meet the terms of using License Exception RPL, except I have a 
question on the applicability of the restriction under 15 CFR 
740.10(b)(4)(i) that specifies that ``[t]he firearms were not shipped 
from or manufactured in Russia, Georgia, Kazakhstan, Kyrgyzstan, 
Moldova, Turkmenistan, Ukraine, or Uzbekistan, except for any firearm 
model controlled by 0A501 that is specified under Annex A in Supplement 
No. 4 to this part.'' Does this restriction apply for temporarily 
importing firearms from Ukraine that were received in Ukraine under a 
BIS license or other U.S. Government authorization that will 
subsequently be authorized under License Exception RPL? Can you also 
confirm whether your answer to this License Exception RPL question 
would also apply to the same restriction that is also found under 15 
CFR 740.9(b)(5)(ii) for exports of firearms and certain shotguns 
temporarily in the United States and in supplement no. 2 to part 748, 
paragraph (z) certification requirement for exports of firearms and 
certain shotguns temporarily in the United States?
    A: The restrictions under 15 CFR 740.10(b)(4)(i) and 
740.9(b)(5)(ii) and the certification requirement for BIS licenses 
under supplement no. 2 to part 748, paragraph (z) do not apply to 
temporary imports into the U.S. of any firearm that is subject to the 
EAR that was exported, reexported to, or transferred within Ukraine 
under a BIS authorization or a Department of State authorization under 
the 22 CFR 120.5(b) process.
Savings Clause
    For the changes being made in this final rule, shipments of items 
removed from eligibility for a License Exception or export, reexport, 
or transfer (in-country) without a license (NLR) as a result of this 
regulatory action that were en route aboard a carrier to a port of 
export, reexport, or transfer (in-country), on January 23, 2024, 
pursuant to actual orders for export, reexport, or transfer (in-
country) to or within a foreign destination, may proceed to that 
destination under the previous eligibility for a License Exception or 
export, reexport, or transfer (in-country) without a license (NLR), 
provided the export, reexport, or transfer (in-country) is completed no 
later than on February 22, 2024.
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) (codified, as 
amended, at 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. To the extent it applies to certain activities that 
are the subject of this rule, the Trade Sanctions Reform and Export 
Enhancement Act of 2000 (TSRA) (codified, as amended, at 22 U.S.C. 
7201-7211) also serves as authority for this rule.

[[Page 4810]]

Rulemaking Requirements
    1. BIS has examined the impact of this rule as required by 
Executive Orders 12866, 13563, and 14094, which direct agencies to 
assess all costs and benefits of available regulatory alternatives and, 
if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public, health, and safety effects, distributive impacts, and equity). 
This final rule has been determined to be not significant for purposes 
of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor shall any person 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 rule involves the following OMB-approved collections of 
information subject to the PRA:
     0694-0088, ``Multi-Purpose Application,'' which carries a 
burden hour estimate of 29.4 minutes for a manual or electronic 
submission;
     0694-0096 ``Five Year Records Retention Period,'' which 
carries a burden hour estimate of less than 1 minute; and
     0607-0152 ``Automated Export System (AES) Program,'' which 
carries a burden hour estimate of 3 minutes per electronic submission.
    BIS estimates that these new controls on Russia, Belarus, and Iran 
under the EAR will result in an increase of 35 license applications 
submitted annually to BIS. However, the additional burden falls within 
the existing estimates currently associated with these control numbers. 
Additional information regarding these collections of information--
including all background materials--can be found at https://www.reginfo.gov/public/do/PRAMain by using the search function to enter 
either the title of the collection or the OMB Control Number.
    3. This rule does not contain policies with federalism implications 
as that term is defined in Executive Order 13132.
    4. Pursuant to section 1762 of the Export Control Reform Act of 
2018 (50 U.S.C. 4821) (ECRA), this action is exempt from the 
Administrative Procedure Act (APA) (5 U.S.C. 553) requirements for 
notice of proposed rulemaking, opportunity for public participation, 
and delay in effective date. While section 1762 of ECRA provides 
sufficient authority for such an exemption, this action is also 
independently exempt from these APA requirements because it involves a 
military or foreign affairs function of the United States (5 U.S.C. 
553(a)(1)).
    5. 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.

List of Subjects

15 CFR Part 734

    Administrative practice and procedure, Exports, Inventions and 
patents, Research, Science and technology.

15 CFR Part 746

    Exports, Reporting and recordkeeping requirements.

    For the reasons stated in the preamble, parts 734 and 746 of the 
Export Administration Regulations (15 CFR parts 730 through 774) are 
amended as follows:

PART 734--SCOPE OF THE EXPORT ADMINISTRATION REGULATIONS

0
1. The authority citation for 15 CFR part 734 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. 13637, 78 FR 16129, 3 CFR, 2014 Comp., 
p. 223; Notice of November 8, 2022, 87 FR 68015, 3 CFR, 2022 Comp., 
p. 563.


0
2. Section 734.4 is amended by revising paragraph (a)(6)(ii) to read as 
follows:


Sec.  734.4  De minimis U.S. content.

    (a) * * *
    (6) * * *
    (ii) There is no de minimis level for foreign-made items that 
incorporate U.S.-origin 9x515 or ``600 series'' .y items when destined 
for a country listed in Country Group E:1 or E:2 of supplement no. 1 to 
part 740 of the EAR or for Belarus, the People's Republic of China 
(PRC), or Russia.
* * * * *

0
3. Supplement no. 2 to part 734 is amended by revising the third 
sentence of paragraph (a)(1) to read as follows:

Supplement No. 2 to Part 734--Guidelines for De Minimis Rules

    (a) * * *
    (1) * * * For purposes of identifying U.S.-origin controlled 
content, you should consult the Commerce Country Chart in supplement 
no. 1 to part 738 of the EAR and controls described in part 746 of the 
EAR (excluding U.S.-origin content that meets the criteria in Sec.  
746.5(a)(3), Sec.  746.7(a)(1)(v), Sec.  746.8(a)(5), or Sec.  
746.10(a)(3)). * * *
* * * * *

PART 746--EMBARGOES AND OTHER SPECIAL CONTROLS

0
4. The authority citation for 15 CFR part 746 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. 287c; Sec 1503, Pub. L. 108-11, 117 
Stat. 559; 22 U.S.C. 2151 note; 22 U.S.C. 6004; 22 U.S.C. 7201 et 
seq.; 22 U.S.C. 7210; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., p. 
614; E.O. 12918, 59 FR 28205, 3 CFR, 1994 Comp., p. 899; E.O. 13222, 
66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13338, 69 FR 26751, 3 
CFR, 2004 Comp., p 168; Presidential Determination 2003-23, 68 FR 
26459, 3 CFR, 2004 Comp., p. 320; Presidential Determination 2007-7, 
72 FR 1899, 3 CFR, 2006 Comp., p. 325; Notice of May 810, 2023, 88 
FR 30211 (May 10, 2023).


0
5. Section 746.5 is amended by:
0
a. Revising paragraph (a) introductory text;
0
b. Redesignating paragraphs (b)(2)(i) through (v) as paragraphs 
(b)(2)(ii) through (vi), respectively;
0
c. Adding a new paragraph (b)(2)(i); and
0
d. Revising paragraph (c).
    The revisions and addition read as follows:


Sec.  746.5   Russian and Belarusian industry sector sanctions.

    (a) License requirements. For purposes of paragraphs (a)(1)(i) 
through (iii) of this section, a license is not required for deemed 
exports and deemed reexports. For purposes of paragraphs (a)(1)(ii) and 
(iii) of this section, a license is not required for any item that is 
listed in supplement no. 4 or 6 to this part that is also classified in 
an Export Control Classification Number (ECCN) on the Commerce Control 
List (CCL) in supplement no. 1 to part 774 of the EAR. See Sec.  746.8 
for license requirements, license exceptions, and license review 
policies for exports, reexports, and transfers to or within Russia or 
Belarus for items classified in ECCNs.
* * * * *
    (b) * * *
    (2) * * *

[[Page 4811]]

    (i) Applications related to safety of flight;
* * * * *
    (c) License exceptions. No license exceptions may overcome the 
license requirements set forth in this section, except the license 
exceptions identified in paragraphs (c)(2) and (7) of this section.
    (1) License Exception TMP for items for use by the news media as 
set forth in Sec.  740.9(a)(9) of the EAR.
    (2) License Exception GOV (Sec.  740.11(b) of the EAR).
    (3) License Exception TSU for software updates for civil end-users 
that are wholly-owned U.S. subsidiaries, branches, or sales offices, 
foreign subsidiaries, branches, or sales offices of U.S. companies that 
are joint ventures with other U.S. and companies, joint ventures of 
U.S. companies with companies headquartered in countries from Country 
Group A:5 and A:6 in supplement no. 1 to part 740 of the EAR countries, 
the wholly-owned subsidiaries, branches, or sales offices of companies 
headquartered in countries from Country Group A:5 and A:6 in supplement 
no. 1 to part 740, or joint ventures of companies headquartered in 
Country Group A:5 and A:6 with other companies headquartered in Country 
Groups A:5 and A:6 (Sec.  740.13(c) of the EAR).
    (4) License Exception BAG, excluding firearms and ammunition (Sec.  
740.14, excluding paragraph (e), of the EAR).
    (5) License Exception AVS, excluding any aircraft registered in, 
owned or controlled by, or under charter or lease by Russia or Belarus 
or a national of Russia or Belarus (Sec.  740.15(a) and (b) of the 
EAR).
    (6) License Exception encryption commodities, software, and 
technology (ENC) for civil end-users that are wholly-owned U.S. 
subsidiaries, branches, or sales offices, foreign subsidiaries, 
branches, or sales offices of U.S. companies that are joint ventures 
with other U.S. companies, joint ventures of U.S. companies with 
companies headquartered in countries from Country Group A:5 and A:6 in 
supplement no. 1 to part 740 of the EAR countries, the wholly-owned 
subsidiaries, branches, or sales offices of companies headquartered in 
countries from Country Group A:5 and A:6 in supplement no. 1 to part 
740, or joint ventures of companies headquartered in Country Group A:5 
and A:6 with other companies headquartered in Country Groups A:5 and 
A:6 (Sec. Sec.  740.13(c) and 740.17 of the EAR).
    (7) License Exception CCD (Sec.  740.19 of the EAR).

0
6. Section 746.6 is amended by adding paragraph (a)(5) to read as 
follows:


Sec.  746.6   Temporarily occupied Crimea region of Ukraine and covered 
regions of Ukraine.

    (a) * * *
    (5) Exclusion for deployments by the Government of Ukraine to or 
within the temporarily occupied Crimea region of Ukraine or covered 
regions of Ukraine. The license requirements of paragraph (a) of this 
section do not apply to exports, reexports, and transfers (in country) 
used in or for deployments by the Government of Ukraine to or within 
the temporarily occupied Crimea region of Ukraine or covered regions of 
Ukraine.
* * * * *

0
7. Section 746.8 is amended by:
0
a. Adding three sentences to the end of paragraph (a) introductory 
text; and
0
b. Revising paragraph (c).
    The additions and revision read as follows:


Sec.  746.8  Sanctions against Russia and Belarus.

    (a) * * * This section is also used for determining license 
requirements for exports, reexports, and transfers to or within Russia 
or Belarus of any item that is listed in supplement nos. 4 through 6 to 
this part and is classified in an Export Control Classification Number 
(ECCN) on the Commerce Control List (CCL) in supplement no. 1 to part 
774 of the EAR. See Sec. Sec.  746.5 and 746.10 for license 
requirements, license review policies, and license exceptions for 
exports, reexports, and transfers (in-country) to or within Russia or 
Belarus of any EAR99-designated item that is also listed in supplement 
nos. 4 through 6 and the end-use and end-user controls under part 744 
of the EAR. This ECCN exclusion from the scope of the license 
requirements from Sec. Sec.  746.5 and 746.10 is not applicable to the 
end-use license requirements imposed under Sec.  746.5(a)(1)(i) or the 
end-user license requirements imposed under Sec.  746.10(a)(2).
* * * * *
    (c) License exceptions. No license exceptions may overcome the 
license requirements in paragraph (a)(3) of this section, except as 
specified in the Entity List entry for a Footnote 3 entity on the 
Entity List in supplement no. 4 to part 744 of the EAR. No license 
exceptions may overcome the license requirements in paragraphs (a)(1) 
and (2) of this section except the license exceptions identified in 
paragraphs (c)(1) through (7) of this section.
    (1) License Exception TMP for items for use by the news media as 
set forth in Sec.  740.9(a)(9) of the EAR.
    (2) License Exception GOV (Sec.  740.11(b) of the EAR).
    (3) License Exception TSU for software updates for civil end-users 
that are wholly-owned U.S. subsidiaries, branches, or sales offices, 
foreign subsidiaries, branches, or sales offices of U.S. companies that 
are joint ventures with other U.S. and companies, joint ventures of 
U.S. companies with companies headquartered in countries from Country 
Group A:5 and A:6 in supplement no. 1 to part 740 of the EAR countries, 
the wholly-owned subsidiaries, branches, or sales offices of companies 
headquartered in countries from Country Group A:5 and A:6 in supplement 
no. 1 to part 740, or joint ventures of companies headquartered in 
Country Group A:5 and A:6 with other companies headquartered in Country 
Groups A:5 and A:6 (Sec.  740.13(c) of the EAR).
    (4) License Exception BAG, excluding firearms and ammunition (Sec.  
740.14, excluding paragraph (e), of the EAR).
    (5) License Exception AVS, excluding any aircraft registered in, 
owned or controlled by, or under charter or lease by Russia or Belarus 
or a national of Russia or Belarus (Sec.  740.15(a) and (b) of the 
EAR).
    (6) License Exception ENC for civil end-users that are wholly-owned 
U.S. subsidiaries, branches, or sales offices, foreign subsidiaries, 
branches, or sales offices of U.S. companies that are joint ventures 
with other U.S. companies, joint ventures of U.S. companies with 
companies headquartered in countries from Country Group A:5 and A:6 in 
supplement no. 1 to part 740 of the EAR countries, the wholly-owned 
subsidiaries, branches, or sales offices of companies headquartered in 
countries from Country Group A:5 and A:6 in supplement no. 1 to part 
740, or joint ventures of companies headquartered in Country Group A:5 
and A:6 with other companies headquartered in Country Groups A:5 and 
A:6 (Sec. Sec.  740.13(c) and 740.17 of the EAR).
    (7) License Exception CCD (Sec.  740.19 of the EAR).

0
8. Section 746.10 is amended by:
0
a. Revising paragraph (a) introductory text;
0
b. Adding paragraph (a)(3); and
0
c. Revising paragraphs (b) and (c).
    The revisions and additions read as follows:

[[Page 4812]]

Sec.  746.10   `Luxury goods' sanctions against Russia and Belarus and 
Russian and Belarusian oligarchs and malign actors.

    (a) License requirements. For purposes of paragraph (a)(1) of this 
section, a license is not required for any item that is listed in 
supplement no. 5 to this part that is also classified in an Export 
Control Classification Number (ECCN) on the Commerce Control List (CCL) 
in supplement no. 1 to part 774 of the EAR. See Sec.  746.8 for license 
requirements, license exceptions, and license review policies for 
exports, reexports, and transfers to or within Russia or Belarus for 
items classified in ECCNs.
* * * * *
    (3) Exclusion from scope of U.S.-origin controlled content under 
paragraphs (a)(1) and (2) of this section. For purposes of determining 
U.S.-origin controlled content under supplement no. 2 to part 734 of 
the EAR when making a de minimis calculation for reexports and exports 
from abroad to Russia or Belarus, the license requirements in 
paragraphs (a)(1) and (2) of this section are not used to determine 
controlled U.S.-origin content in a foreign-made item, provided the 
criteria in paragraphs (a)(3)(i) and (ii) of this section are met:
    (i) The U.S.-origin content is described in supplement no. 5 to 
this part and is not otherwise excluded from the applicable Scope 
column in supplement no. 3 to this part; and
    (ii) The foreign made item will be reexported or exported from 
abroad from a country described in supplement no. 3 to this part.
* * * * *
    (b) Licensing policy--(1) Presumption of denial. Applications for 
the export, reexport, or transfer (in-country) of any item that 
requires a license for pursuant to the requirements of this section 
will be reviewed with a policy of denial, except as specified in 
paragraph (b)(2) of this section.
    (2) Case-by-case. The following types of license applications will 
be reviewed on a case-by-case basis to determine whether the 
transaction in question would benefit the Russian or Belarusian 
Government or defense sector:
    (i) Applications related to safety of flight;
    (ii) Applications involving items to meet humanitarian needs. The 
case-by-case license application review policy for items to meet 
humanitarian needs is included to address certain `luxury goods' items 
that may be used in medical devices or situations in which a case-by-
case analysis is needed to determine whether a license application 
should be approved to meet humanitarian needs while also taking into 
account the applicable broader U.S. national security and foreign 
policy concerns; and
    (iii) Applications for the disposition of items by companies not 
headquartered in Country Group D:1, D:5, E:1 or E:2 in supplement no. 1 
to part 740 of the EAR that are curtailing or closing all operations in 
Russia or Belarus; and replacement licenses for exports and reexports 
to and transfers within Russia and Belarus to add items described in 
Harmonized Tariff Schedule (HTS)-6 Codes that were added to the EAR 
after the effective validation date of the BIS license. See also Sec.  
750.7(c)(1)(xi) of the EAR for the divesture of items within Russia or 
Belarus or the transfer of items within Russia or Belarus for the 
purpose of reexporting from Russia or Belarus. For purposes of Sec.  
750.7(c)(1)(xi), divesture means the action or process of selling off 
subsidiary business interests or investments involving items subject to 
the EAR.
    (c) License exceptions. No license exceptions may overcome the 
license requirements in paragraph (a)(1) of this section except the 
license exceptions identified in paragraphs (c)(1) through (3) of this 
section. No license exceptions may overcome the license requirements in 
paragraph (a)(2) of this section.
    (1) License Exception TMP for items for use by the news media as 
set forth in Sec.  740.9(a)(9) of the EAR.
    (2) License Exception GOV (Sec.  740.11(b) of the EAR).
    (3) License Exception TSU for software updates for civil end-users 
that are wholly-owned U.S. subsidiaries, branches, or sales offices, 
foreign subsidiaries, branches, or sales offices of U.S. companies that 
are joint ventures with other U.S. and companies, joint ventures of 
U.S. companies with companies headquartered in countries from Country 
Group A:5 and A:6 in supplement no. 1 to part 740 of the EAR countries, 
the wholly-owned subsidiaries, branches, or sales offices of companies 
headquartered in countries from Country Group A:5 and A:6 in supplement 
no. 1 to part 740, or joint ventures of companies headquartered in 
Country Group A:5 and A:6 with other companies headquartered in Country 
Groups A:5 and A:6 (Sec.  740.13(c) of the EAR).
    (4) License Exception BAG, excluding firearms and ammunition (Sec.  
740.14, excluding paragraph (e), of the EAR).
    (5) License Exception AVS, excluding any aircraft registered in, 
owned or controlled by, or under charter or lease by Russia or Belarus 
or a national of Russia or Belarus (Sec.  740.15(a) and (b) of the 
EAR).
    (6) License Exception ENC for civil end-users that are wholly-owned 
U.S. subsidiaries, branches, or sales offices, foreign subsidiaries, 
branches, or sales offices of U.S. companies that are joint ventures 
with other U.S. companies, joint ventures of U.S. companies with 
companies headquartered in countries from Country Group A:5 and A:6 in 
supplement no. 1 to part 740 of the EAR countries, the wholly-owned 
subsidiaries, branches, or sales offices of companies headquartered in 
countries from Country Group A:5 and A:6 in supplement no. 1 to part 
740, or joint ventures of companies headquartered in Country Group A:5 
and A:6 with other companies headquartered in Country Groups A:5 and 
A:6 (Sec. Sec.  740.13(c) and 740.17 of the EAR).
    (7) License Exception CCD (Sec.  740.19 of the EAR).

0
9. Supplement no. 2 to part 746 is amended by adding a sentence 
following the second sentence of paragraph (a) to read as follows:

Supplement No. 2 to Part 746--Russian and Belarusian Industry Sector 
Sanction List Pursuant to Sec.  746.5(a)(1)(i)

    (a) * * * Although fasteners (e.g., screws, bolts, nuts, nut 
plates, studs, inserts, clips, rivets, pins), washers, spacers, 
insulator, grommets, bushings, springs, wires, and solders are excluded 
from the scope of this supplement, see part 744 of the EAR for license 
requirements for Russia and Belarus that extend to all items ``subject 
to the EAR,'' e.g., Sec.  744.21 of the EAR and the Entity List license 
requirements, which in most cases extend to all items ``subject to the 
EAR.'' * * *
* * * * *

0
10. Supplement no. 4 to part 746 is amended by:
0
a. Adding a sentence following the second sentence of paragraph (a); 
and
0
b. Adding in numerical order the following entries to the table: 
``270111,'' ``270112,'' ``270119,'' ``270120,'' ``270210,'' ``270220,'' 
``270300,'' ``270400,'' ``270720,'' ``270730,'' ``270820,'' ``271019,'' 
``271210,'' ``271290,'' ``271500,'' ``280110,'' ``280200,'' ``280410,'' 
``280430,'' ``280461,'' ``280470,'' ``280480,'' ``280511,'' ``280610,'' 
``280620,'' ``281111,'' ``281129,'' ``281310,'' ``281410,'' ``281420,'' 
``281512,'' ``281830,'' ``281990,'' ``282010,'' ``282731,'' ``282732,'' 
``282735,'' ``282751,'' ``282890,'' ``282990,'' ``283220,'' ``283324,'' 
``283330,'' ``283410,'' ``283630,'' ``283650,''

[[Page 4813]]

``283990,'' ``284030,'' ``284150,'' ``284180,'' ``284310,'' ``284329,'' 
``284330,'' ``284910,'' ``320611,'' ``391220,'' ``401699,'' ``540249,'' 
``591190,'' ``680520,'' ``681299,'' ``690919,'' ``701990,'' ``811241,'' 
``811249,'' ``820411,'' ``820559,'' ``820790,'' ``880100,'' ``880211,'' 
``880212,'' ``880220,'' ``880230,'' ``880240,'' ``880260,'' ``880400,'' 
``880510,'' ``880521,'' ``880529,'' ``880610,'' ``880621,'' ``880622,'' 
``880623,'' ``880624,'' ``880629,'' ``880691,'' ``880692,'' ``880693,'' 
``880694,'' ``880699,'' ``880710,'' ``880720,'' ``880730,'' and 
``880790''.
    The additions read as follows:

Supplement No. 4 to Part 746--Russian and Belarusian Industry Sector 
Sanctions Pursuant to Sec.  746.5(a)(1)