End-Use and End-User Based Export Controls, Including U.S. Persons Activities Controls: Military and Intelligence End Uses and End Users, 60985-60998 [2024-16496]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Industry and Security

[Federal Register Volume 89, Number 145 (Monday, July 29, 2024)]
[Proposed Rules]
[Pages 60985-60998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16496]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 730, 732, 734, 736, 740, and 744

[Docket No. 240712-0193]
RIN 0694-AJ43


End-Use and End-User Based Export Controls, Including U.S. 
Persons Activities Controls: Military and Intelligence End Uses and End 
Users

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

ACTION: Proposed rule, with request for comments.

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SUMMARY: The Department of Commerce, Bureau of Industry and Security 
(BIS), seeks public comment on proposed changes to existing 
restrictions under the Export Administration Regulations (EAR) on 
military and intelligence end uses and end users and related U.S. 
persons activities controls, as well as the proposed addition of a 
military-support end-user control. These proposed revisions and 
additions to the EAR's end-use, end-user, and ``U.S. persons'' activity 
controls would implement expanded Export Control Reform Act of 2018 
(ECRA) authority to control certain ``U.S. persons'' activities under 
the EAR. Specific to the EAR's ``U.S. persons'' activities controls, 
BIS is proposing amendments to control `support' furnished by ``U.S. 
persons'' to military end users and military-production activities, as 
well as intelligence end users that are not otherwise already regulated 
under or prohibited by U.S. law. In addition, BIS is proposing to 
revise the definition of `support' set forth in the EAR's ``U.S. 
person'' activity control provision in response to requests by the 
public for clarification. The revisions and additions, along with 
clarifications, to end use, end user, and ``U.S. persons'' activity 
controls under the EAR, would further the national security and the 
foreign policy of the United States.

DATES: Comments must be received by BIS no later than September 27, 
2024.

ADDRESSES: Comments on this rule may be submitted to the Federal 
rulemaking portal (www.regulations.gov). The regulations.gov ID for 
this rule is: BIS-2024-0029. Please refer to RIN 0694-AJ43 in all 
comments.
    All filers using the portal should use the name of the person or 
entity submitting the comments as the name of their files, in 
accordance with the instructions below. Anyone submitting

[[Page 60986]]

business confidential information should clearly identify the business 
confidential portion at the time of submission, file a statement 
justifying nondisclosure and referring to the specific legal authority 
claimed, and provide a non-confidential version of the submission. For 
comments submitted electronically containing business confidential 
information, the file name of the business confidential version should 
begin with the characters ``BC.'' Any page containing business 
confidential information must be clearly marked ``BUSINESS 
CONFIDENTIAL'' on the top of that page. The corresponding non-
confidential version of those comments must be clearly marked 
``PUBLIC.'' The file name of the non-confidential version should begin 
with the character ``P.'' Any submissions with file names that do not 
begin with either a ``BC'' or a ``P'' will be assumed to be public and 
will be made publicly available through https://www.regulations.gov. 
Commenters submitting business confidential information are encouraged 
to scan a hard copy of the non-confidential version to create an image 
of the file, rather than submitting a digital copy with redactions 
applied, to avoid inadvertent redaction errors which could enable the 
public to read business confidential information.

FOR FURTHER INFORMATION CONTACT: For questions contact Sharron Cook, 
Senior Export Policy Analyst in the Regulatory Policy Division of the 
Bureau of Industry and Security at [email protected] or Phone: 
(202) 482-4890. Please refer to RIN 0694-AJ43 in the subject line of 
emails.

SUPPLEMENTARY INFORMATION:

Background

    Section 5589(b) of the December 2022 National Defense Authorization 
Act (NDAA) for Fiscal Year (FY) 2023 (Pub. L. 117-263, NDAA for FY 
2023) amended section 1753(a)(2)(F) of the Export Control Reform Act of 
2018 (ECRA) (50 U.S.C. 4812(a)(2)(F)) by providing the Bureau of 
Industry and Security (BIS) with the statutory authority to impose 
controls on ``the activities of United States persons, wherever 
located, relating to specific foreign military, security, or 
intelligence services.'' Consistent with this statutory amendment, BIS 
proposes to revise the ``U.S. persons'' activities control in Sec.  
744.6 on military-intelligence end-use and end-user activities and 
expand existing part 744 restrictions to encompass activities of ``U.S. 
persons'' in connection with defined military end users, military-
production activities (an end use proposed by this rule), and 
intelligence end users. BIS also proposes to clarify the definition of 
`support' in the ``U.S. persons'' activities control provision. 
Consistent with section 1754(d)(1) of ECRA (50 U.S.C. 4813(d)(1)), BIS 
proposes to regulate the ``U.S. persons'' activities described above 
only to the extent not subject to a license requirement or general 
prohibition administered by another Federal department or agency. BIS 
is proposing amendments to the EAR on foreign-security end user 
controls, and controls that would restrict U.S. persons' support of 
such end users, in a separate rule published concurrently with this 
rule.
    Furthermore, also in accordance with ECRA, as expanded by the NDAA 
for FY 2023, BIS proposes to add to part 744 new controls on defined 
military-support end users, as well as revise existing controls on 
military-intelligence, and military end users and end uses. These 
revisions and additions to end-use and end-user controls under the EAR 
would further the national security and foreign policy of the United 
States.
    On November 14, 1994, Executive Order 12938 (E.O. 12938, 59 FR 
59099, 3 CFR, 1994 Comp., p. 950) directed BIS to continue to regulate 
the activities of ``U.S. persons'' to prevent their participation in 
activities that could contribute to the proliferation of weapons of 
mass destruction. This control, which is set forth in Sec.  744.6 of 
the EAR, imposes licensing requirements on assistance furnished by 
``U.S. persons'' in connection with activities of proliferation 
concern, even when such assistance does not involve any items subject 
to the EAR or any foreign entities subject to specified restrictions 
under the EAR (e.g., persons whose export privileges have been denied 
under the EAR). Subsequently, with the enactment of ECRA as part of the 
John S. McCain NDAA for FY 2019 (Pub. L. 115-232), Congress authorized 
in ECRA section 4812(a)(2)(F) the control of ``U.S. persons'' 
activities related not only to weapons of mass destruction and their 
means of delivery, but also to specific ``foreign military intelligence 
services.'' Accordingly, in January 2021, BIS amended Sec.  744.6 of 
the EAR to add a new restriction on the activities of ``U.S. persons'' 
in support of certain military-intelligence end uses and end users and 
also created a new Sec.  744.22 that targeted exports, reexports, and 
transfers (in-country) destined for certain military-intelligence end 
uses or end users (86 FR 4865 (Jan. 15, 2021)).
    Through the NDAA for FY 2023's amendment to ECRA, section 
1753(a)(2)(A-F) of ECRA (50 U.S.C. 4812(a)(2)(A-F)) directs the 
President to impose controls on the activities of ``U.S. persons,'' 
wherever located, relating to specific nuclear explosive devices; 
missiles; chemical or biological weapons; whole plants for chemical 
weapons precursors; foreign maritime nuclear projects; and foreign 
military services, foreign intelligence services, and foreign security 
services. Additionally, Sec.  1754(d) of ECRA (50 U.S.C. 4813(d)) 
directs the Secretary of Commerce to require U.S. persons to apply to 
BIS for authorization to engage in the aforementioned activities except 
to the extent that those activities are already authorized by a statute 
or regulation administered by a Federal department or agency other than 
the Department of Commerce.
    As described below, BIS proposes amending Sec.  744.6 of the EAR to 
add additional controls on specific activities of ``U.S. persons'' 
consistent with ECRA authority as expanded pursuant to the NDAA for FY 
2023 related to military and intelligence services. Controls related to 
security services consistent with the NDAA for FY 2023 will be proposed 
in a separate rule. Specifically, in this rule, BIS proposes modifying 
the existing prohibition on ``U.S. persons'' `support' to military-
intelligence end users and end uses in Sec.  744.6(b)(5) to apply to 
military end users. In addition, BIS proposes to add two new 
prohibitions in Sec.  744.6(b)(6) and (7) corresponding to `military-
production' activities and intelligence end users, respectively. 
Furthermore, also consistent with its expanded ECRA authority, BIS 
proposes to add additional end-use and end-user controls in connection 
with the U.S. person `support' activities subject to the EAR's general 
prohibitions (paragraph in Sec.  744.6(b)(1) through (7)). 
Specifically, BIS proposes the following changes: (1) revising Sec.  
744.21 (Restrictions on certain `military end uses' or `military end 
users'); (2) moving Sec.  744.22 (Restrictions on exports, reexports, 
and transfers (in-country) to certain military-intelligence end uses or 
end users) to Sec.  744.24 and renaming it as (Restrictions on certain 
intelligence end users); and (3) adding a new Sec.  744.22 
(Restrictions on certain military-support end users). For some of these 
controls, BIS proposes new end use and/or end user definitions and new 
item and country scopes. Each control is described more fully in the 
preamble below, in order of appearance in the EAR.

[[Page 60987]]

I. Revisions to U.S. Person Restrictions

    Consistent with new ECRA authority to control certain ``U.S. 
persons'' activities under the EAR, BIS is proposing amendments to 
control ``U.S. persons'' support for certain military end users, 
military support end users, and military production activities, as well 
as certain intelligence end users. BIS anticipates proposing new 
controls on security end users and support for foreign maritime nuclear 
projects in a separate rule. Related to all these controls, BIS 
proposes adding specific exclusions to the definition of `support' that 
is set forth in Sec.  744.6 (Restrictions on certain activities of 
``U.S. persons'').
    First, BIS proposes to relocate the current definition of `support' 
from paragraph (b)(6) to new paragraph (a)(1)(i). The definition of 
`support' remains unchanged, although certain exclusions from the 
definition are proposed. First, this rule proposes that this definition 
not include activities relating to items that are not subject to the 
EAR as specified in Sec.  734.3(b). This exclusion renders explicit 
BIS's longstanding policy that restrictions on ``U.S. persons'' 
activities do not apply to activities relating to items not subject to 
the EAR that are specified in Sec.  734.3(b). Due to the expansion of 
the scope of ``U.S. person'' controls that is proposed in this rule, 
this clarification of BIS policy will ensure that the regulated public 
is aware of the intended scope of the proposed controls and reaffirm 
that the EAR's ``U.S. person'' controls, including as proposed to be 
expanded, are consistent with the policy objectives underlying the 
various exclusions set forth in Sec.  734.3(b). For example, activities 
involving items that are not subject to the EAR because they are, e.g., 
published, released by instruction in a catalog course or associated 
teaching laboratory of an academic institution, or ``software'' or 
``technology'' arising during or resulting from fundamental research 
(Sec.  734.3(b)(3) of the EAR), are not intended to be restricted under 
these expanded ``U.S. persons'' activities controls.
    Second, as a general matter, BIS proposes to regulate those 
activities of U.S. persons that support the end uses and end users set 
forth in Sec.  744.6(b) to the extent they are not subject to control 
by the State Department's Directorate of Defense Trade Controls (DDTC) 
or another Federal department or agency and are not specifically 
excluded from control by BIS in proposed new Sec.  744.6(a)(1)(ii). 
While this approach is already explained in existing Sec.  744.6(a), to 
add additional clarity, this rule would amend Sec.  744.6 to state 
explicitly that prohibited ``U.S. persons'' `support' does not include 
any activity undertaken with respect to defense articles listed on the 
United States Munitions List (USML) (22 CFR 121.1) or on the United 
States Munitions Import List (USMIL) (27 CFR 447.21), to the extent 
such activities are subject to control under the International Traffic 
in Arms Regulations (ITAR) (22 CFR parts 120 through 130). The ITAR 
controls a wide range of activities including development, production, 
maintenance, repair, and brokering, when such activities involve not 
only defense articles listed on the USML, but also defense articles 
listed on the USMIL, including when such USMIL defense articles are 
also enumerated on the Commerce Control List, Supp. No. 1 to part 774 
of the EAR (CCL) (e.g., in the case of most semi-automatic firearms). 
As an illustrative example, BIS does not propose to regulate the 
brokering of semi-automatic firearms by ``U.S. persons,'' an activity 
that is subject to ITAR licensing requirements (22 CFR 129.1(b)). An 
explicit statement referring to this exclusion from coverage under the 
EAR of ITAR-related activities is proposed to be added to Sec.  
744.6(a)(1)(ii), and a related note is proposed to be added to Sec.  
744.6(a) to advise ``U.S. persons'' to review ITAR licensing 
requirements and submit a commodity jurisdiction determination request 
if any doubt exists as to whether specific activities are subject to 
control under the ITAR or the EAR.
    Third, this rule would exclude from regulation certain activities 
of ``U.S. persons'' that do not extend beyond administrative services. 
The proposed exclusion incorporates language used in an exclusion from 
the ITAR's definition of brokering activities (22 CFR 129.2(b)(2)(iv)) 
that is already familiar to the regulated industry. BIS anticipates 
that using existing regulatory terminology will facilitate compliance 
by industry and will effectively and accurately describe the intended 
scope of the exclusion under the EAR.
    Fourth, also drawing on language from exclusions to the ITAR's 
brokering registration requirements (22 CFR 129.3(b)(2)), BIS proposes 
excluding commercial activities related to the movement of goods by 
common carriers from the EAR's definition of `support' solely with 
respect to the expanded controls proposed in this rule to implement new 
ECRA authority (i.e., the restrictions in Sec.  744.6(b)(5) through 
(7)). The purpose of this exclusion is to permit ``U.S. persons'' 
continued involvement in transportation, shipping, and/or transferring 
items as part of routine business activities of companies such as 
freight forwarders and shipping lines. This proposed exclusion is 
intended to ensure that the EAR's ``U.S persons' '' `support' controls 
do not adversely impact the basic business operations of shipping lines 
and air carriers, companies that are generally not involved in 
arranging underlying transactions involving the sale of the items at 
issue. However, to the extent a ``U.S. person'' undertakes shipping, 
transmitting, and transferring activities involving items not subject 
to the EAR with ``knowledge'' that such items will support certain 
military end users, military-production activities, military-support 
end users, and intelligence end users remain controlled activities 
under Sec.  744.6 of the EAR. BIS intends that these controls apply to 
``U.S. persons'' involved in the sale or supply of items not subject to 
the EAR with ``knowledge'' that such items will be used by the 
military- and intelligence-related end uses and end users described 
above, such as ``U.S. persons'' abroad who procure or sell such items 
for such end uses or end users. Moreover, BIS is excluding the routine 
business activities of common carriers only with respect to the new 
military- and intelligence-related activity controls proposed in this 
rule pursuant to ECRA for consistency with a similar exclusion in 
complementary ITAR defense services controls proposed in a separate 
rule in this issue of the Federal Register. In 1991, when BIS 
implemented restrictions on specific activities of ``U.S. persons'' as 
part of the Enhanced Proliferation Control Initiative (EPCI), BIS 
specifically restricted activities, including transportation, in 
connection with the proliferation of nuclear weapons, missiles, and 
chemical or biological weapons (56 FR 40500, August 15, 1991). Because 
restrictions on transportation, including by common carriers, applied 
to the activity controls related to the proliferation of weapons of 
mass destruction and their means of delivery implemented under E.O. 
12938, BIS does not propose to eliminate those longstanding controls.
    Fifth, BIS would exclude certain activities that are conducted for, 
on behalf of, or in connection with the U.S. Government, including 
specified programs or agreements executed by a U.S. Government 
department or agency. Specifically, this exclusion draws upon and 
references three paragraphs of EAR License Exception GOV (Section 
740.11(b)(2)), which authorize exports, reexports, and transfers (in-
country) made for or on behalf of a department or agency of the U.S. 
Government to

[[Page 60988]]

agencies of the U.S. Government and certain shipments by the Department 
of Defense (15 CFR 740.11(b)(2)(iii)(B), (C) and (D)). This new 
exclusion exempts from the licensing requirements of Sec.  744.6 those 
activities that would meet the conditions for the use of these three 
provisions of License Exception GOV if conducted with respect to items 
subject to the EAR.
    This rule also proposes several revisions to the end uses and end 
users set forth in Sec.  744.6(b), with respect to which ``U.S. 
persons'' activities are restricted. First, this rule proposes to 
remove the existing restrictions in Sec.  744.6(b)(5) on military-
intelligence end uses and end users in connection with a related 
proposed change (explained further in section IV of this preamble), 
that would characterize military-intelligence end users as a subset of 
a new, broader category of defined intelligence end users proposed to 
be subject to EAR controls. In place of these military-intelligence end 
use and end user restrictions, this rule proposes to set forth in Sec.  
744.6(b)(5) new controls on `military end users,' which are defined in 
Sec.  744.21(f)(2) of the EAR, as described further in section II of 
this preamble.
    Sixth, this rule proposes to add paragraph (b)(6) to Sec.  744.6 to 
control ``U.S. persons'' `support' of `military-production activity,' 
and sets forth a section-specific definition of this term distinct from 
`military end use,' as defined in Sec.  744.21(f)(1) of the EAR, for 
the reasons described further in section II. of this preamble.
    Seventh, this rule proposes to add paragraph (b)(7) to Sec.  744.6 
to control ``U.S. person'' `support' of `intelligence end users,' as 
described further in section IV of this preamble.
    As conforming changes, BIS proposes to ensure that references to 
``U.S. persons'' controls throughout the EAR reflect the expanded scope 
of such controls, including by making necessary revisions to the 
following sections of the EAR to ensure that they reference not only 
proliferation-related controls implemented under E.O. 12938, but also 
broader ``U.S. persons'' activity controls implemented under expanded 
ECRA authority (section 4812(a)(2)(F) of ECRA): Sec. Sec.  730.5(d), 
732.1(d)(1)(viii) and (d)(3), 732.3(j)(1), 734.4(a)(7), 734.5, and 
736.2(b)(7).
    Consistent with the current version of Sec.  744.6, paragraph (c) 
would continue to set forth additional prohibitions on ``U.S. persons'' 
informed by BIS that their activities could involve support to the end 
uses or end users described in paragraphs (b)(1) through (7). BIS 
proposes to add a note to paragraph (b) that explains that General 
Order 6 of supplement no. 1 to part 736 authorizes the activities 
described in paragraph (b) when such activities are required for the 
performance of defense services subject to control under the ITAR that 
have been authorized by DDTC. This new General Order 6 is intended to 
ensure ``U.S. persons'' who have received a DDTC authorization to 
engage in defense services are not required to seek additional 
authorization from BIS to perform services subject to the license 
requirements of Sec.  744.6 of the EAR, if such services are required 
in furtherance of the DDTC-authorized defense services. As an 
illustrative example, if a ``U.S. person'' is authorized by DDTC to 
assist a foreign defense contractor in integrating a foreign-origin 
thermal imaging camera that is not subject to the EAR but meets the 
parameters of ECCN 6A003 into a USML Category VII(a)(2) combat vehicle 
destined to the armed forces of a D:5 country, that ``U.S. person'' may 
rely on General Order 6 to satisfy the BIS licensing requirement that 
would otherwise apply pursuant to Sec.  744.6(b)(6) of the EAR to the 
facilitation of the sale of that foreign-origin 6A003-equivalent 
thermal camera to the same foreign defense contractor to be installed 
on the Category VII(a)(2) vehicle, as authorized by DDTC.
    Finally, paragraph (e) specifies that applications for licenses 
submitted pursuant to Sec.  744.6(b)(5) through (7) will be reviewed in 
accordance with the license review policies set forth in the 
corresponding end-use and end-user controls set forth in Sec. Sec.  
744.21, 744.22, and 744.24, respectively.

II. Military End Users and End Uses

A. End-Use and End-User Controls

    BIS proposes amending Sec.  744.21 (Restrictions on certain 
`military end uses' or `military end users') to expand and clarify 
which military end uses and end users are subject to this control. This 
rule proposes to update the definition of `military end user'; expand 
the provision's end-use and end-user controls to apply to all items 
subject to the EAR (rather than only the items specified in supplement 
no. 2 to part 744, which this rule proposes to remove and reserve); and 
expand the country scope of these end-use and end-user controls to 
apply to all countries identified in Country Group D:5, as well as 
Macau. Additionally, this rule proposes a new licensing policy under 
which license applications would be reviewed. No other changes to Sec.  
744.21 are being proposed at this time, although BIS welcomes comment 
on all requirements set forth in Sec.  744.21 to assess their 
effectiveness.
    In paragraph (a), BIS would revise the current general prohibition 
set forth in (a)(1) to apply to the export, reexport, and in-country 
transfer of all items subject to the EAR (currently only items 
specified in supplement number 2 to part 744 and in connection with 
only six countries) if at the time of such action a person has 
``knowledge'' as defined in the EAR that the item is intended for (1) a 
`military end use' that occurs in Macau or a D:5 country or the product 
of which is destined to Macau or a country listed specified in Country 
Group D:5 in supplement no. 1 to part 740 of the EAR, or (2) a 
`military end user' wherever located, of Macau or a D:5 country.
    Through this proposed rule, BIS is expanding the prohibition's 
scope to cover countries or destinations subject to a policy of denial 
for exports of defense articles and defense services, as identified by 
the Department of State. These countries or destinations are listed in 
22 CFR 126.1(d) of the ITAR and incorporated by reference in the 
footnote of Country Group D:5. This grouping includes, but is broader 
than, the six countries currently subject to MEU controls. BIS believes 
that using a Country Group reference instead of a specific list of 
countries or destinations promotes ease of regulatory compliance and 
reduces regulatory complexity. BIS is also including Macau, which is 
not listed in Country Group D:5 but is a Special Administrative Region 
of the People's Republic of China (PRC), which is listed in Country 
Group D:5. As a general matter, BIS has ensured that all new controls 
under the EAR applicable to the PRC apply equally to Macau (88 FR 2821 
(Jan. 17, 2023); 88 FR 54875 (Aug. 11, 2023)).
    BIS also proposes to streamline the text in paragraph (b) and 
render it consistent with the standard text for additional prohibitions 
that apply to persons informed by BIS that is found in other end use/
user sections in part 744.
    As a result of this rule's proposed revisions, all of the end users 
on the Military End-User List in supplement no. 7 to part 744 would be 
moved to the Entity List in supplement no. 4 to part 744 with a license 
requirement that applies to all items subject to the EAR. The removal 
of entities from supplement no. 7 to part 744 and their corresponding 
addition to supplement no. 4 to part 744 would be implemented in a 
separate, final rule published in the Federal Register, which would 
also remove and reserve supplement no. 7 to part 744. Should the 
revisions to

[[Page 60989]]

Sec.  744.21 proposed in this rule be implemented in final form, this 
action will be a necessary conforming change, as the Military End-User 
List differs primarily from the Entity List in that the Military End-
User List's license requirements apply only to items specified in 
supplement no. 2 to part 744. In addition, the license review policy 
column of the Entity List will point to Sec.  744.21(e), which will be 
an indicator that the entity is considered a military end user. If the 
license requirement for `military end users' is expanded to all items 
subject to the EAR, as proposed in this rule, `military end users' will 
be more appropriately listed on the Entity List, which generally 
provides for a broader license requirement.
    The license review standards currently set forth in paragraphs 
(e)(1) through (3) are proposed to be combined and consolidated in one 
paragraph (e). Applications to export, reexport, or transfer (in-
country) items for a `military end use' or to a `military end user' as 
described in revised and expanded paragraph (a) or paragraph (b) in 
connection with Burma, China, Cuba, Iran, Macau, North Korea, Syria, 
and Venezuela, will be reviewed with a presumption of denial. 
Applications for Russia and Belarus will be reviewed with a policy of 
denial consistent with Sec.  746.8(b)(1) of the EAR. All other 
applications, including those involving Cambodia (currently listed in 
Sec.  744.21 of the EAR) will be reviewed under a case-by-case review 
policy, consistent with United States policies set forth in Sec.  126.1 
of the ITAR.
    BIS also proposes to merge the definitions of military end use and 
military end user currently located in paragraphs (f) and (g), 
respectively, into a revised paragraph (f). In addition, a general 
statement about the purpose and use of the definitions in paragraph (f) 
would be added to the introduction text of paragraph (f). This rule 
does not propose to amend the definition of `military end use.' It only 
makes a technical correction by removing the phrase ``or items 
classified under ECCNs ending in `A018' '' in two places, because these 
ECCNs do not currently control items and are only used to point to 
``600 series'' ECCNs.
    The definition of `military end user' is proposed for revision by 
removing from its scope the ``national police, government intelligence 
or reconnaissance organizations (excluding those described in Sec.  
744.22(f)(2)), or any person or entity whose actions or functions are 
intended to support `military end uses' as defined in paragraph (f) of 
this section.'' These categories of entities are instead proposed as 
new types of end users in this rule, i.e., `military-support end 
users,' and `intelligence end users,' or, in the case of national 
police previously included in the definition of `military end user,' 
are expected to be proposed as `security end users' in a separate rule.
    Lastly, this rule proposes to expand the scope of this provision's 
definition of `military end user' by adding ``any person or entity 
performing the functions of a `military end user,' including 
mercenaries, paramilitary, or irregular forces.'' This expansion is 
intended to capture private companies, non-state actors, or parastatal 
entities that engage in combat or other activities akin to those of 
traditional armed forces, other than the kinds of activities described 
below in connection with `military-support end users,' which generally 
involves the design, development, production, installation, 
maintenance, repair, overhaul, or refurbishing of military items. The 
term `military end users' would include entities designated with a 
footnote 3 (Russian or Belarusian military end users) or 5 (Military 
End Users (other than Russia or Belarus and not subject to the foreign 
direct product rule set forth in Sec.  734.(g))) on the Entity List in 
supplement no. 4 to this part.

B. ``U.S. Persons'' Activity Control

    Consistent with the proposed revisions to the military end-use 
controls in Sec.  744.21 of the EAR, BIS also proposes to control 
specific activities of ``U.S. persons'' that assist defined military 
end users (as proposed for revision, as described above). In paragraph 
(b)(5) of Section 744.6, BIS proposes restrictions on ``U.S. persons'' 
supporting military end users as defined in proposed Sec.  
744.21(f)(2), including military end users listed on the Entity List 
with a footnote 3 or 5 designation. As noted above, this restriction 
(along with the other restrictions set forth in Section 744.6) applies 
only to the extent the underlying activities are not regulated by DDTC 
as defense services (see a complementary rule published elsewhere in 
this issue of the Federal Register in which DDTC proposes to regulate 
as ITAR defense services assistance that creates, supports, or improves 
the organization or formation of military or paramilitary forces or 
operations). Illustrative examples of activities that, depending upon 
the specific facts of each case, may be subject to this proposed ``U.S. 
persons'' activity control include:
    (1) Facilitating a military end user's acquisition or procurement 
of foreign-origin items, which if located in the United States would be 
subject to the EAR (i.e., not USML defense articles) and also not 
enumerated on the USMIL.
    (2) Performing basic repair or maintenance services with respect to 
items owned or employed by a military end user, which if located in the 
United States would be subject to the EAR.
    Note: BIS does not propose to regulate ``U.S. persons'' engaging in 
combat or other military operations as a member of, or on behalf of, a 
foreign military force or paramilitary organization. BIS notes that 
such activities may be subject to licensing requirements by other U.S. 
government agencies, or to prohibitions under U.S. criminal statutes.
    In addition to the proposed ``U.S. persons'' activity controls with 
respect to military end users, BIS proposes to add to Sec.  744.6(b)(6) 
controls on ``U.S. persons'' support to `military-production 
activities.' BIS is proposing a new section-specific definition of 
`military-production activities,' (distinct from the Sec.  744.21(f)(1) 
definition of `military end use') to provide greater clarity for the 
regulated public and avoid creating a misimpression that the agency is 
regulating under the EAR services regulated by DDTC under the ITAR. 
Specifically, the proposed definition of `military-production 
activities' differs from Section 744.21(f)(1)'s definition of `military 
end use' in two key aspects. First, the `military-production 
activities' definition excludes activities directly related to USML 
defense articles, as such activities are defense services subject to 
the ITAR. While BIS controls the export, reexport, or transfer (in-
country) of items subject to the EAR that will be incorporated abroad 
into defense articles (see, inter alia, Sec.  744.21 of the EAR), BIS 
does not control services directly related to the underlying 
incorporation of such items subject to the EAR into defense articles. 
DDTC regulates activities related to ``600 series'' items to the extent 
these activities are ITAR defense services regulated by the ITAR. 
Second, the new `military- production activities' definition includes 
activities related to dual-use items which if located in the United 
States would be subject to the EAR. Consequently, ``U.S. persons'' 
developing or producing such items for `military end users' in targeted 
countries must receive authorization from BIS. Illustrative examples of 
activities that, depending upon the specific facts of each case, may be 
subject to this proposed ``U.S. persons'' activity control include:
    (1) Assisting a defense contractor in a targeted country in 
producing an ECCN 0A606.a armored vehicle;

[[Page 60990]]

    (2) Assisting a defense contractor in a targeted country in 
installing an ECCN 8A002.g light system in an ECCN 8A620.a submersible 
vessel; and
    (3) Assisting an electronics company in a targeted country in 
developing ECCN 3A001 integrated circuits that have been ordered by the 
armed services of a targeted country.

III. `Military-Support End Users'

A. End-User Control

    BIS proposes moving the contents of current Sec.  744.22 
``Restrictions on certain military-intelligence end user(s)'' to Sec.  
744.24, and adding a new section, ``Restrictions on certain military-
support end users,'' to Sec.  744.22, directly following Sec.  744.21 
``Restrictions on certain military end uses and end users.'' Since the 
establishment of the military end-use and end-user controls in the EAR, 
BIS has received numerous questions about the applicability of these 
controls to persons or entities that provide assistance to military end 
users and end uses. These `military-support end users' warrant a 
separate section in part 744, to clarify that BIS seeks to control 
exports, reexports, and in-country transfers to these entities by 
subjecting them to a narrower license requirement, as described below. 
Separate controls are warranted for these entities in recognition of 
the various types and roles of end users that fall into this category.
    Under this proposed new control, a license would be required only 
to export, reexport, or transfer (in-country) to `military-support end 
users' items subject to the EAR that are specified on the CCL. This 
license requirement would apply when a person has ``knowledge,'' as 
defined in part 772 of the EAR, that the item is intended, entirely or 
in part, for a `military-support end user,' as defined in Sec.  
744.22(f), in Macau or a D:5 country, or wherever located when 
identified on the Entity List in supplement no. 4 to part 744 of the 
EAR and identified with a footnote 6 designation.
    As in Sec.  744.21, there would also be a license requirement when 
BIS informs a person either individually by specific notice or through 
a notice published in the Federal Register that a license is required 
for specific exports, reexport, or transfers (in-country) of any item 
because there is an unacceptable risk of use in or diversion to a 
`military-support end user.' Only License Exception GOV (specifically, 
the paragraph authorizing certain exports, reexports, or transfers (in-
country) by or involving agencies or departments of the U.S. 
Government) of the EAR (Sec.  740.11(b)(2)) would overcome the license 
requirements in Sec.  744.22 of the EAR.
    The license review policy for applications submitted pursuant to 
this section would be the same as under Sec.  744.21. Specifically, 
applications to export, reexport, or transfer (in-country) items for a 
`military-support end user' in connection with Burma, China, Cuba, 
Iran, Macau, North Korea, Syria, and Venezuela, will be reviewed with a 
presumption of denial. Applications for Russia and Belarus will be 
reviewed with a policy of denial consistent with Sec.  746.8(b)(1) of 
the EAR. All other applications, including those involving Cambodia 
(currently listed in Sec.  744.21) will be reviewed under a case-by-
case review policy, consistent with United States policies set forth in 
Sec.  126.1 of the ITAR.
    The definition of `military-support end user' would be set forth in 
Sec.  744.22(f) of the EAR and is proposed to mean any person or entity 
whose actions or functions support `military end uses,' as defined in 
Sec.  744.21(f). In addition, the term would include entities 
designated with a footnote 6 on the Entity List in supplement no. 4 to 
this part, as BIS will add these types of entities to the Entity List.

B. ``U.S. Persons'' Activity Control

    With this rule, BIS does not propose to add a ``U.S. persons'' 
activity control that corresponds directly to the proposed new control 
on certain exports, reexports, and transfers (in-country) involving 
`military support end users.' However, in Sec.  744.6(b)(5), BIS 
proposes that controls on ``U.S. persons'' support to `military end 
users' will extend to entities listed on the Entity List and designated 
with a footnote 6, which is applicable to certain `military support end 
users.' As a result, while ``U.S. persons'' need to exercise due 
diligence to ensure they are not providing `support' without a BIS 
license to certain `military end users,' as defined in Sec.  
744.21(f)(2) regardless of whether such `military end users' are 
designated with a footnote 3 or 5 on the Entity List, for purposes of 
the activity controls in Sec.  744.6(b)(5), ``U.S. persons'' do not 
need to determine whether their `support' activities assist a 
`military-support end user' as defined in Sec.  744.22(f) of the EAR. 
Instead, ``U.S. persons'' only need to identify whether contemplated 
`support' assists a `military-support end user' that is specifically 
identified on the Entity List with a footnote 6 designation. However, 
``U.S. persons'' still need to exercise due diligence to ensure their 
activities do not involve `support' for `military-production 
activities' described in Sec.  744.6(b)(6), regardless of whether the 
foreign party the ``U.S. person'' is supporting is listed on the Entity 
List with a footnote 6 designation. Because the license requirement for 
footnote 6 entities may be limited to CCL items as specified in Sec.  
744.22, or as provided in such entities' entries on the Entity List, 
BIS also proposes to add a note to Sec.  744.6(b) to clarify that, 
unlike for other footnote-designated entities subject to a broader 
restriction on ``U.S. persons'' `support' activities, for footnote 6 
entities, ``U.S. persons'' should consult the license requirement of 
such entities' entries on the Entity List. Restrictions on ``U.S. 
persons'' `support' to `military-support end users' are limited to 
activities with respect to items described in the footnote 6 entity's 
license requirement column on the Entity List, or their foreign-origin 
equivalents.

IV. `Intelligence End User'

A. End-User Control

    To harmonize with section 4812(a)(2)(F) of ECRA, this rule would 
revise the term `military-intelligence end user' by dropping the 
qualifier ``military,'' resulting in the term `intelligence end user.' 
This revision would expand the scope of controls to all intelligence 
end users of the covered countries, instead of only intelligence end 
users that are part of the armed services or national guard of the 
covered countries. As a result of this revision, an `intelligence end 
user' would encompass not only military, but also other governmental 
(e.g., civilian) intelligence and reconnaissance organizations. As 
noted above, BIS proposes to move current Sec.  744.22 ``Restrictions 
on export, reexports, and transfers (in-country) to certain military-
intelligence end uses or end users'' to Sec.  744.24 and rename the 
section to reflect the new term, `intelligence end user'. Within new 
Sec.  744.24, BIS proposes to revise definitions, license requirements, 
and license review policy. In particular, as detailed below, BIS 
proposes the following revisions:
    (1) Updating the definition of `intelligence end users';
    (2) Establishing that the control applies to all items subject to 
the EAR and to the countries identified in Country Groups D and E that 
are not also listed in Country Groups A:5 and A:6; and
    (3) Establishing a new license application review policy.
    The country scope of the license requirement would be revised from 
the current language, which reads as follows: ``Belarus, Burma, 
Cambodia,

[[Page 60991]]

the People's Republic of China (China), Russia, or Venezuela; or a 
country specified in Country Groups E:1 or E:2 (see supplement no. 1 to 
part 740 of the EAR)'' and expanded to include all countries or 
destinations specified in Country Groups D or E that are not also 
identified in Country Group A:5 or A:6 of supplement no. 1 to part 740 
of the EAR. Country Group D comprises countries of national security, 
nuclear, chemical and biological, and missile technology concerns, 
along with those subject to U.S. arms embargoes. Country Group E 
identifies countries that are terrorist-supporting (E:1) or subject to 
a unilateral embargo (E:2). Country Groups A:5 and A:6 are composed of 
countries that maintain strong export controls cooperation with the 
United States. The 45 Country Group D and E countries that are not also 
identified in Country Group A:5 or A:6 are as follows: Afghanistan, 
Armenia, Azerbaijan, Bahrain, Belarus, Burma, Cambodia, Central African 
Republic, People's Republic of China (China), Democratic Republic of 
Congo, Cuba, Egypt, Eritrea, Georgia, Haiti, Iran, Iraq, Jordan, 
Kazakhstan, North Korea, Kuwait, Kyrgyzstan, Laos, Lebanon, Libya, 
Macau, Moldova, Mongolia, Oman, Pakistan, Qatar, Russia, Saudi Arabia, 
Somalia, South Sudan, Sudan, Syria, Tajikistan, Turkmenistan, United 
Arab Emirates, Uzbekistan, Venezuela, Vietnam, Yemen, and Zimbabwe. BIS 
assesses that the imposition of a license requirement on exports, 
reexports, and transfers (in-country) for `intelligence end users' in 
these covered countries would enhance U.S. national security by 
allowing prior U.S. government review of contemplated transactions 
involving intelligence or reconnaissance organizations located in these 
countries.
    As in Sec. Sec.  744.21 and 744.22, there would also be a license 
requirement when BIS informs a person either individually by specific 
notice, or through a notice published in the Federal Register, that a 
license is required for specific exports, reexports, or transfers (in-
country) of any item because there is an unacceptable risk of diversion 
to a `foreign-intelligence end user.' Only License Exception GOV set 
forth in Sec.  740.11(b)(2) of the EAR would overcome the license 
requirements in Sec.  744.24 of the EAR.
    The license review policy for applications submitted pursuant to 
this section would be the same as under Sec. Sec.  744.21 and 744.22 of 
the EAR. Specifically, applications to export, reexport, or transfer 
(in-country) items for a `intelligence end user' in connection with 
Burma, China, Cuba, Iran, Macau, North Korea, Syria, and Venezuela, 
will be reviewed with a presumption of denial. Applications for Russia 
and Belarus will be reviewed with a policy of denial consistent with 
Sec.  746.8(b)(1) of the EAR. All other applications will be reviewed 
under a case-by-case review policy, consistent with United States 
policies set forth in Sec.  126.1 of the ITAR.
    Finally, as noted above, the definition of an `intelligence end 
user' set forth in paragraph (f) would cover ``any government 
intelligence or reconnaissance organization and other entities 
performing functions on behalf of such entities.'' BIS intends that 
this would include entities performing intelligence functions such as 
planning and directing, processing and exploiting, analyzing and 
producing, disseminating and integrating, surveilling, and evaluating 
and providing feedback. This definition is intended to cover 
traditional espionage and economic espionage activities. Also included 
in the definition of `intelligence end users' would be Entity List 
entities designated with footnote 7. Consistent with the separation of 
the terms military and intelligence in ECRA as a consequence of the 
amendment to ECRA in the NDAA for FY 2023, BIS is proposing to remove 
the term `military-intelligence end use' and the related definition of 
this term from this provision. Moreover, as a policy matter, with the 
expansion of `military end use' controls to apply to all items subject 
to the EAR and in light of the expansion of the definition of 
`intelligence end user' to include not only civilian government 
intelligence and reconnaissance organizations, but also private sector 
entities that perform certain functions on behalf of such entities, BIS 
does not believe that controls on `military-intelligence end uses' 
continue to be warranted. Transactions previously subject to `military-
intelligence end use' controls will now be subject to either `military 
end use' controls in Sec.  744.21 of the EAR, or controls on entities 
performing functions on behalf of government intelligence or 
reconnaissance organizations in Sec.  744.24 of the EAR.

B. ``U.S. Persons'' Activity Control

    Consistent with the proposed revisions to the end-user control in 
Sec.  744.24 described above, BIS proposes to add new paragraph (b)(7) 
to Sec.  744.6 to impose controls on ``U.S. persons'' `support' for 
`intelligence end users' of the 45 Country Group D and E countries not 
also listed in Country Groups A:5 or A:6. As with all Sec.  744.6 
controls on specific activities of ``U.S. persons,'' such controls only 
apply to the extent the underlying activities are not subject to a 
license requirement or general prohibition administered by another 
Federal department or agency. In a complementary rule published 
elsewhere in this issue of the Federal Register, DDTC proposes to 
revise the definition of defense services under the ITAR (22 CFR parts 
120--through 130) and to create a specific USML defense service entry 
to control certain assistance that creates, supports, or improves 
intelligence activities, regardless of whether such assistance involves 
the use of a defense article. DDTC proposes several exclusions to the 
scope of its controls, many of which align with exclusions in proposed 
Sec.  744.6(a)(1)(ii) of the EAR, which would also not be subject to 
BIS control.
    However, BIS does propose to regulate, with respect to D and E 
countries not also listed in A:5 or A:6 the types of ``U.S. person'' 
`support' for `intelligence end users,' which DDTC proposes to exclude 
from the scope of defense services controls and which BIS does not 
exclude from control under Sec.  744.6(a)(1)(ii). Accordingly, as 
illustrative examples, ``U.S. persons'' will need to seek authorization 
from BIS prior to performing the following types of activities with 
respect to `intelligence end users' of the targeted countries or 
destinations:
    (1) Maintenance, repair, overhaul, or refurbishing of items which 
if located in the United States would be subject to the EAR that are 
owned by or will be used by or to support `intelligence end users'; and
    (2) Information technology services to support ordinary business 
activities that are not specific to a particular business field.

V. Entity List and Section 744.11

    Consistent with to the proposed revisions to Sec. Sec.  744.6, 
744.21, 744.22, and 744.24, BIS proposes amending Sec.  744.11 
``License requirements that apply to entities acting or at significant 
risk of acting contrary to the national security or foreign policy 
interests of the United States'' by adding entities that are `military 
end users,' `military-support end users,' and `intelligence end users' 
to the Entity List in supplement no. 4 to part 744, designating them by 
specific footnote, and adding license requirements for these entities 
to Sec.  744.11 of the EAR. Changes to the Entity List would be made in 
a separate final rule.
    BIS proposes amending Sec.  744.11 by revising the heading for 
paragraph (a)(2) from ``Entity List foreign-direct product'' (FDP) 
license requirements, review policy, and license exceptions''

[[Page 60992]]

 to ``Entities designated by specified footnotes,'' because not all 
Entity List entities or footnote designated entities have license 
requirements that include foreign-produced items subject to the EAR 
pursuant to a foreign-direct product rule in Sec.  734.9 of the EAR. 
This rule also proposes to redesignate paragraph (a)(2)(ii) as 
(a)(2)(iii) and to set forth license requirements for footnote 3 
entities--Russian and Belarusian `military end users' in paragraph 
(a)(2)(ii). To set forth license requirements in Sec.  744.11 for 
footnote designated entities, this rule proposes to add paragraph 
(a)(2)(iv) footnote 5 entities--`military-end users'; paragraph 
(a)(2)(v) footnote 6 entities--`military-support end users'; and 
paragraph (a)(2)(vi) footnote 7 entities--`intelligence end users.'
    This rule also proposes to add introductory text to paragraph 
(a)(2) to clarify that the ``standards-related activities'' exclusion 
to the license requirements set forth in paragraph (a)(1) applies to 
all the footnote designated entities described in paragraph (a)(2).

VI. Conforming Changes

    BIS proposes revising Sec.  744.1(a)(1) to update the descriptions 
of sections in part 744.

Request for Comments on This Proposed Rule

    This rule is being issued in proposed form because while it is in 
the foreign policy and national security interests of the United States 
to impose these new end-use and end-user controls with the earliest 
possible effective date, BIS also seeks to provide the interested 
public with an opportunity to submit comments in order to avoid any 
unnecessary disruption to supply chains, ensure that the controls are 
drafted to be as effective as possible, and that the provisions of the 
controls are clear and unambiguous for ease of compliance by exporters, 
reexporters, and transferors. BIS continues to evaluate the scope of 
items subject to this rule, the scope of the end users covered by this 
rule, and the potential for complementary end-use controls and welcomes 
comments on these issues.
    Therefore, as part of this rule BIS is soliciting public comment on 
the proposed revisions and additions to the proposed revisions to the 
military end-use and end-user controls in Sec.  744.21 and the foreign-
intelligence end-user controls in Sec.  744.24; the proposed additions 
of new Sec.  744.22 (Restrictions on certain foreign-military-support 
end users); and any of the other revisions in this rule. Comments may 
be submitted in accordance with the DATES and ADDRESSES sections of 
this rule. BIS will review and, if appropriate, address such comments 
through a related rulemaking process.
Export Control Reform Act of 2018
    On August 13, 2018, the President signed into law the John S. 
McCain National Defense Authorization Act for FY 2019, which included 
the Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4801-4852). On 
December 23, 2022, the President signed into law the National Defense 
Authorization Act for FY 2023 (NDAA, Pub. L. 117-263) section 5589(b) 
of which amended section 4812(a)(2)(F) of ECRA. ECRA provides the legal 
basis for BIS's principal authorities and serves as the authority under 
which BIS issues this rule.
Rulemaking Requirements
    1. Executive Order 12866, as amended by Executive Orders 13563 and 
14094, directs 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, distributed 
impacts, and equity). This rule has been designated a ``significant 
regulatory action'' by the Office and Information and Regulatory 
Affairs under Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
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 previously approved by OMB under control number 0694-0088, 
Simplified Network Application Processing System, which includes, among 
other things, license applications and commodity classifications, and 
carries a burden estimate of 29.4 minutes for a manual or electronic 
submission for a total burden estimate of 33,133 hours. This rule 
increases the estimated number of submissions by 150 which is not 
expected to exceed the current approved estimates.
    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, this action is exempt from the Administrative Procedure Act (5 
U.S.C. 553) (APA) 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 independently exempt from those APA 
requirements because it involves a military or foreign affairs function 
of the United States (5 U.S.C. 553(a)(1)). Notwithstanding this 
determination, for the policy reasons set forth in Section VI. above, 
BIS is seeking public comment on this proposed rule.
    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 730

    Administrative practice and procedure, Advisory committees, 
Exports, Reporting and recordkeeping requirements, Strategic and 
critical materials.

15 CFR Part 732

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

15 CFR Part 734

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

15 CFR Part 736

    Exports.

15 CFR Part 740

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

15 CFR Part 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

    Accordingly, parts 730, 732, 734, 736, 740, and 744 of the Export 
Administration Regulations (15 CFR parts 730-774) are proposed to be 
amended as follows:

PART 730--[AMENDED]

0
1. The authority citation for 15 CFR part 730 is revised 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.; 10 U.S.C.

[[Page 60993]]

8720; 10 U.S.C. 8730(e); 22 U.S.C. 287c; 22 U.S.C. 2151 note; 22 
U.S.C. 3201 et seq.; 22 U.S.C. 6004; 42 U.S.C. 2139a; 15 U.S.C. 
1824; 50 U.S.C. 4305; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 
11912, 41 FR 15825, 3 CFR, 1976 Comp., p. 114; E.O. 12002, 42 FR 
35623, 3 CFR, 1977 Comp., p. 133; E.O. 12058, 43 FR 20947, 3 CFR, 
1978 Comp., p. 179; E.O. 12214, 45 FR 29783, 3 CFR, 1980 Comp., p. 
256; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12854, 
58 FR 36587, 3 CFR, 1993 Comp., p. 179; E.O. 12918, 59 FR 28205, 3 
CFR, 1994 Comp., p. 899; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., 
p. 950; E.O. 12981, 60 FR 62981, 3 CFR, 1995 Comp., p. 419; 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. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 
786; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., p 168; E.O. 13637, 
78 FR 16129, 3 CFR, 2014 Comp., p. 223; Notice of September 7, 2023, 
88 FR 62439 (September 11, 2023); Notice of November 1, 2023, 88 FR 
75475 (November 3, 2023); Notice of May 8, 2024, 89 FR 40355 (May 9, 
2024).

0
2. Section 730.5 is amended by revising paragraph (d) to read as 
follows:


Sec.  730.5  Coverage of more than exports.

* * * * *
    (d) ``U.S. person'' activities. The EAR restrict specific 
activities of ``U.S. persons,'' wherever located, as described in Sec.  
744.6 of the EAR.

PART 732--[AMENDED]

0
3. The authority citation for 15 CFR 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
4. Section 732.1 is amended by revising paragraphs (d)(1)(vii) and 
(d)(3), to read as follows:


Sec.  732.1  Steps overview.

* * * * *
    (d) * * *
    (1) * * *
    (vii) General Prohibition Seven (Support of proliferation 
activities and certain military end users, military-production 
activities, and intelligence end users (``U.S. person'' activities)).
* * * * *
    (3) Controls on activities. Steps 12 through 18 refer to General 
Prohibitions Four through Ten. Those general prohibitions apply to all 
items subject to the EAR, not merely those items listed on the CCL in 
part 774 of the EAR. For example, they refer to the general 
prohibitions for persons denied export privileges, prohibited end uses 
and end users, countries subject to a comprehensive embargo (e.g., 
Cuba, Iran, North Korea and Syria), prohibited activities of ``U.S. 
persons'' in support of proliferation of weapons of mass destruction 
and certain military and intelligence end users and military-production 
activities, prohibited unlading of shipments, compliance with orders, 
terms, and conditions, and activities when a violation has occurred or 
is about to occur.
* * * * *
0
5. Section 732.3 is amended by revising paragraph (j)(1) to read as 
follows:


Sec.  732.3  Steps regarding the ten general prohibitions.

* * * * *
    (j) * * *
    (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. persons'' 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 and intelligence end users and 
military-production activities and are not limited to items subject to 
the EAR. See Sec.  744.6(a)(1) of the EAR for the full definition of 
`support,' which includes, inter alia, ordering, storing, using, 
selling, loaning, disposing, servicing, financing, transporting, 
freight forwarding, or conducting negotiations to facilitate such 
activities.
* * * * *

PART 734--[AMENDED]

0
6. 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 1, 2023, 88 FR 75475 (November 3, 2023).

0
7. Section 734.4 is amended by revising paragraph (a)(7) to read as 
follows:


Sec.  734.4  De minimis U.S. content.

    (a) * * *
    (7) Under certain rules issued by the Office of Foreign Assets 
Control, certain exports from abroad by U.S.-owned or controlled 
entities may be prohibited notwithstanding the de minimis provisions of 
the EAR. In addition, the de minimis rules do not relieve ``U.S. 
persons'' of the obligation to refrain from supporting the 
proliferation of weapons of mass destruction, their means of delivery, 
military and intelligence end uses, and military-production activities 
as provided in Sec.  744.6 of the EAR.
* * * * *
0
8. Section 734.5 is amended by revising paragraph (a) to read as 
follows:


Sec.  734.5  Activities of U.S. and foreign persons subject to the EAR.

* * * * *
    (a) Specific activities of ``U.S. persons,'' wherever located, 
related to the proliferation of nuclear explosive devices, 
``missiles,'' chemical or biological weapons, and whole plants for 
chemical weapons precursors; and to certain military and intelligence 
end users and military-production activities described in Sec.  744.6 
of the EAR.
* * * * *

PART 736--[AMENDED]

0
9. The authority citation for 15 CFR part 736 is revised 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 1, 2023, 88 FR 75475 (November 3, 2023); 
Notice of May 8, 2024, 89 FR 40355 (May 9, 2024).

0
10. Section 736.2 is amended by revising paragraph (b)(7) introductory 
text to read as follows:


Sec.  736.2  General prohibitions and determination of applicability.

* * * * *
    (b) * * *
    (7) General Prohibition Seven--Support of proliferation activities 
and certain military and intelligence end uses and end users (``U.S. 
person'' activities). A ``U.S. person,'' with ``knowledge'' and 
wherever located, may not without a license `support,' as defined in 
Sec.  744.6(a), proliferation activities specified in Sec.  744.6, 
e.g., nuclear explosive or unsafeguarded activities; rocket systems 
(including ballistic missiles, space launch vehicles and sounding 
rockets); unmanned aerial vehicle (including cruise missiles, target 
drones and reconnaissance drones) end uses; chemical (including 
chemical precursors) or biological weapons end uses; a `military end 
user' or `military-production activity,' as defined in Sec.  
744.6(b)(6) of the EAR; or an

[[Page 60994]]

`intelligence end user,' as defined in Sec.  744.24(f) of the EAR.
* * * * *
0
11. Supplement no. 1 to part 736 is amended by adding paragraph f to 
read as follows:

Supplement No. 1 to Part 736--General Orders

* * * * *
    (f) General Order No. 6:
    General Order No. 6 of [DATE EFFECTIVE] authorizes ``U.S. 
persons'' to perform services that require a license pursuant to 
Sec.  744.6(b) of the EAR if required for the performance of defense 
services subject to control under the ITAR and authorized by the 
Department of State, Directorate of Defense Trade Controls (DDTC).
* * * * *

PART 740--[AMENDED]

0
12. The authority citation for 15 CFR 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
13. Section 740.11 is amended by revising paragraph (b)(2)(ii) to read 
as follows:


Sec.  740.11  Governments, international organizations, international 
inspections under the Chemical Weapons Convention, and the 
International Space Station (GOV).

* * * * *
    (b) * * *
    (2) * * *
    (ii) Exports, reexports, and transfers (in-country) made by or 
consigned to a department or agency of the U.S. Government. This 
paragraph authorizes exports, reexports, and transfers of items when 
made by or consigned to a department or agency of the U.S. Government, 
solely for its official use, including for use in any lawfully 
authorized investigative, protective, or intelligence activity of a law 
enforcement or intelligence agency of the United States or of a 
territory, possession, State, or District of the United States, 
including political subdivisions thereof, or for carrying out any U.S. 
Government program with foreign governments or international 
organizations that is authorized by law and subject to control by the 
President by other means. This paragraph does not authorize a 
department or agency of the U.S. Government to make any export, 
reexport, or transfer that is otherwise prohibited by other 
administrative provisions or by statute. Contractor support personnel 
of a department or agency of the U.S. Government are eligible for this 
authorization when in the performance of their duties pursuant to the 
applicable contract or other official duties. `Contractor support 
personnel' for the purpose of this provision means those persons who 
provide administrative, managerial, scientific or technical support 
under contract to a U.S. Government department or agency (e.g., 
contractor employees of Federally Funded Research Facilities or Systems 
Engineering and Technical Assistance contractors). The term `contractor 
support personnel' for purposes of this paragraph (b)(2)(ii) is limited 
to those individuals who are providing such support within a U.S. 
Government owned or operated facility or under the direct supervision 
of a U.S. government employee (i.e., an individual directly employed by 
the U.S. Government). Private security contractors are not `contractor 
support personnel' for purposes of this paragraph (b)(2)(ii) because 
although they may work within a U.S. Government owned or operated 
facility, such contractors do not provide administrative, managerial, 
scientific or technical support under contract to the U.S. Government. 
This authorization is not available when a department or agency of the 
U.S. Government acts as a transmittal agent on behalf of a non-U.S. 
Government person, either as a convenience or in satisfaction of 
security requirements.
* * * * *

PART 744--[AMENDED]

0
14. The authority citation for 15 CFR part 744 is revised 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 7, 2023, 88 FR 62439 (September 11, 2023); Notice of 
November 1, 2023, 88 FR 75475 (November 3, 2023).

0
15. 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 (in-
country) to certain end users and end uses, as well as certain ``U.S. 
person'' activities, as described in General Prohibitions Five (End 
use/End users), Seven (``U.S. person'' activities), and Nine (Orders, 
Terms, and Conditions), unless authorized by BIS. It should also be 
noted that part 764 of the EAR prohibits exports, reexports and certain 
transfers (in-country) of items subject to the EAR to denied parties.
* * * * *
0
16. Section 744.6 is amended by:
0
a. Revising paragraph (a);
0
b. Revising paragraphs (b)(4) through (6);
0
c. Adding paragraph (b)(7);
0
d. Revising paragraph (c)(1);
0
e. Revising paragraphs (d) introductory text and (d)(2); and
0
f. Revising paragraph (e)(2).
    The revisions and additions read as follows:


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

    (a) Scope and order of review. The general prohibitions in this 
section apply only to the extent that the underlying activities are not 
subject to a license requirement or general prohibition administered by 
another federal department or agency, see, for example, Assistance to 
Foreign Atomic Energy Activities regulations (10 CFR part 810), 
administered by the Department of Energy; International Traffic in Arms 
Regulations (ITAR) (22 CFR parts 120 through 130), administered by the 
Department of State; and certain sanctions regulations (to include, but 
not limited to, 31 CFR parts 500 through 599), administered by the 
Department of the Treasury. Accordingly, ``U.S. persons'' are required 
to seek a license from BIS only for the activities described in this 
section that are not subject to a license requirement or general 
prohibition administered by the Department of Energy, Department of 
State, Department of the Treasury, or other Federal department or 
agency. The issuance of a license by BIS, or any other Federal 
department or agency, does not authorize ``U.S. persons'' to engage in 
any activity that is otherwise prohibited by law, including criminal 
statutes.
    (1) Definition of support--(i) Support means:
    (A) Shipping or transmitting from one foreign country to another 
foreign country any item not subject to the EAR you know will be used 
in or by any of the end uses or end users described in paragraphs 
(b)(1) through (7) of this section, including the sending or taking of 
such item to or from foreign countries in any manner;

[[Page 60995]]

    (B) Transferring (in-country) any item not subject to the EAR you 
know will be used in or by any of the end uses or end users described 
in paragraphs (b)(1) through (7) of this section;
    (C) Facilitating such shipment, transmission, or transfer (in-
country); or
    (D) Performing any contract, service, or employment you know may 
assist or benefit any of the end uses or end users described in 
paragraphs (b)(1) through (7) of this section, including, but not 
limited to: ordering, buying, removing, concealing, storing, using, 
selling, loaning, disposing, servicing, financing, transporting, 
freight forwarding, or conducting negotiations to facilitate such 
activities.
    (ii) Exclusions. Support does not include:
    (A) Activities related to items described in Sec.  734.3(b) of the 
EAR;
    (B) Activities related to items enumerated on the USML or on the 
United States Munitions Import List (USMIL) (27 CFR 447.21), to the 
extent such activities are subject to control under the ITAR.
    (C) Activities limited to administrative services, such as 
providing or arranging office space and equipment, hospitality, 
advertising, or clerical, visa, or translation services, collecting 
product and pricing information to prepare a response to a request for 
proposal, generally promoting company goodwill at trade shows, or 
activities by an attorney that are limited to the provision of legal 
advice;
    (D) With respect to the end uses and end users in paragraphs (b)(5) 
through (7) only, commercial activities related to the movement of 
goods by common carriers; or
    (E) Activities conducted for, on behalf of, or in connection with:
    (1) A department or agency of the U.S. Government, including any 
lawfully authorized investigative, protective, or intelligence activity 
of a law enforcement or intelligence agency of the United States or of 
a territory, possession, State, or District of the United States, 
including political subdivisions thereof;
    (2) Any U.S. Government cooperative program, project, agreement, or 
arrangement with a foreign government or international organization or 
agency that is authorized by law and subject to control by the 
President, as further described in Sec.  740.11(b)(2)(iii)(B) of the 
EAR;
    (3) Any U.S. Government foreign assistance or sales program 
authorized by law and subject to the control of the President as 
further described in Sec.  740.11(b)(2)(iii)(C) of the EAR; or
    (4) An Acquisition and Cross Servicing Agreement (ACSA) that is 
executed at the direction of the U.S. Department of Defense as further 
described in Sec.  740.11(b)(2)(iii)(D).
    (2) [Reserved]

    Note 1 to paragraph (a): Activities subject to ITAR licensing 
requirements, including as defense services (see 22 CFR 120.32 and 
the United States Munitions List (USML) (22 CFR 121.1)) or brokering 
(see 22 CFR part 129) are not subject to EAR licensing requirements 
pursuant to Sec.  744.6(a) of the EAR. Particularly in the case of 
``support'' to `military end users,' `military-production 
activities,' and `intelligence end users,' ``U.S. persons'' should 
be aware that their activities may be subject to ITAR licensing 
requirements and conduct their review accordingly. For a formal 
determination as to whether a specific ``U.S. person'' activity is 
subject to the ITAR or the EAR, you may submit a commodity 
jurisdiction request to the Department of State, consistent with the 
procedures in 22 CFR 120.12.

    (b) * * *
    (4) The design, ``development,'' ``production,'' operation, 
installation (including on-site installation), maintenance (checking), 
repair, overhaul, refurbishing, shipment, or transfer (in-country) of a 
whole plant to make chemical weapons precursors identified in ECCN 
1C350, in or by countries other than those listed in Country Group A:3 
(Australia Group);
    (5) A `military end user,' as defined in Sec.  744.21(f)(2), in or 
from a destination specified in Country Group D:5 or Macau, including, 
but not limited to, `military end users' designated with a footnote 3 
or 5 on the Entity List in supplement no. 4 to this part, and only 
those `military-support end users' designated with a footnote 6 on the 
Entity List in supplement no. 4 to this part;
    (6) A `military-production activity,' when such activity occurs in 
or the product of such activity is destined to a country listed in 
Country Group D:5 or Macau. The term `military-production activity' 
means incorporation into the following types of items or any other 
activity that supports or contributes to the operation, installation, 
maintenance, repair, overhaul, refurbishing, ``development,'' or 
``production'' of the following types of items:
    (i) ``600 series'' items, including foreign-origin items not 
subject to the EAR; or
    (ii) Any other item that is either described on the Commerce 
Control List in other than a ``600 series'' ECCN, or designated EAR99, 
including foreign-origin items not subject to the EAR, that you 
``know'' is ultimately destined to or for use by a `military end user,' 
as defined in Sec.  744.21(f)(2); or
    (7) An `intelligence end user,' as defined in Sec.  744.24(f), 
wherever located, from a destination specified in Country Group D or E, 
but not also listed in Country Group A:5 or A:6 (see supplement no. 1 
to part 740 of the EAR for Country Groups), including, but not limited 
to, `intelligence end users' designated with a footnote 7 on the Entity 
List in supplement no. 4 of this part.

    Note 2 to paragraph (b): General Order No. 6 authorizes ``U.S. 
persons'' to perform activities subject to the license requirements 
of paragraph (b) of this section, when required for the performance 
of defense services subject to control under the ITAR and authorized 
by the Department of State, Directorate of Defense Trade Controls 
(see supplement no. 1 to part 736 of the EAR).


    Note 3 to paragraph (b):  Restrictions on `support' to entities 
designated with a footnote 6 on the Entity List in supplement no. 4 
of this part only apply when the support activities relate to items 
described in the license requirement column of the entity's entry in 
supplement no. 4 of this part, or their foreign-origin equivalents.

* * * * *
    (c) * * *
    (1) BIS may inform ``U.S. persons,'' 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 because an activity could involve 
the types of `support' (as defined in paragraph (a)(1) of this section) 
to the end uses or end users described in paragraphs (b)(1) through (7) 
of this section. Specific notice is to be given only by, or at the 
direction of, the Principal Deputy Assistant Secretary for Strategic 
Trade and Technology Security or the Deputy Assistant Secretary for 
Strategic Trade. When such notice is provided orally, it will be 
followed by a written notice within two working days signed by the 
Principal Deputy Assistant Secretary or Deputy Assistant Secretary or 
their designee. However, the absence of any such notification does not 
excuse the ``U.S. person'' from compliance with the license 
requirements of paragraph (b) of this section.
* * * * *
    (d) Exceptions and exclusions. No license exceptions apply to the 
prohibitions described in paragraphs (b)(1) through (7) or paragraph 
(c)(2) of this section.
* * * * *
    (2) Exclusion to paragraphs (b)(5) through (7) and (c)(2)(iii) of 
this section. Notwithstanding the prohibitions in paragraphs (b)(5) 
through (7) and

[[Page 60996]]

(c)(2)(iii) of this section, ``U.S. persons'' who are employees of a 
department or agency of the U.S. Government may `support' a `military-
production activity,' `military end user,' a 'military support end 
user,' or an `intelligence end user,' as described in paragraphs (b)(5) 
through (7) and (c)(2)(iii) of this section, if the `support' is 
provided in the performance of official duties in furtherance of a U.S. 
Government program that is authorized by law and subject to control by 
the President by other means. This paragraph (d)(2) does not authorize 
a department or agency of the U.S. Government to provide `support' that 
is otherwise prohibited by other administrative provisions or by 
statute. `Contractor support personnel' of a department or agency of 
the U.S. Government are eligible for this authorization when in the 
performance of their duties pursuant to the applicable contract or 
other official duties. `Contractor support personnel' for the purposes 
of this paragraph (d)(2) has the same meaning given to that term in 
Sec.  740.11(b)(2)(ii) of the EAR. This authorization is not available 
when a department or agency of the U.S. Government acts as an agent on 
behalf of a non-U.S. Government person.
* * * * *
    (e) * * *
    (2) Applications for a ``U.S. person'' to `support' an end use or 
end user as described in paragraphs (b)(5) through (7) of this section 
will be reviewed consistent with the applicable policies described in 
Sec. Sec.  744.21, 744.22, and 744.24.
* * * * *
0
17. Section 744.11 is amended by:
0
a. Revising the heading of paragraph (a)(2) and adding introductory 
text;
0
b. Redesignating paragraph (a)(2)(ii) as paragraph (iii); and
0
c. Adding paragraphs (a)(2)(ii) and (iv) through (vi).
    The revisions and additions read as follows:


Sec.  744.11  License requirements that apply to entities acting or at 
significant risk of acting contrary to the national security or foreign 
policy interests of the United States.

* * * * *
    (a) * * *
    (2) Entities designated by specified footnotes. With the exception 
of ``standards-related activities'' described in paragraph (a)(1) of 
this section, license requirements are set forth for footnote 
designated entities as described in this paragraph (a)(2) .
* * * * *
    (ii) Footnote 3 entities. You may not export, reexport, or transfer 
(in-country) any item subject to the EAR, including foreign-produced 
items that are subject to the EAR under Sec.  734.9(g) of 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 Russian or Belarusian `military 
end user,' as defined in Sec.  744.21(f)(2), wherever located that is 
listed on the Entity List in supplement no. 4 to this part with a 
footnote 3 designation. See Sec. Sec.  744.21 and 746.8 of the EAR for 
license review policy, and restrictions on license exceptions. See 
Sec.  744.6(b)(5) for restrictions on specific activities of ``U.S. 
persons'' related to such entities.
* * * * *
    (iv) Footnote 5 entities. 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 end user,' wherever located, that is listed on the Entity 
List in supplement no. 4 to this part with a footnote 5 designation. 
See Sec.  744.21. See also Sec.  744.6(b)(5) for restrictions on 
specific activities of ``U.S. persons'' related to such entities.
    (v) Footnote 6 entities. You may not export, reexport, or transfer 
(in-country) any item subject to the EAR specified in the license 
requirement column of the corresponding entry in supplement no. 4 to 
this part 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-support end 
user,' wherever located, that is listed on the Entity List in 
supplement no. 4 to this part with a footnote 6 designation. See Sec.  
744.22. See also Sec.  744.6(b)(5) for restrictions on specific 
activities of ``U.S. persons'' related to such entities.
    (vi) Footnote 7 entities. 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 an 
`intelligence end user,' wherever located, that is listed on the Entity 
List in supplement no. 4 to this part with a footnote 7 designation. 
See Sec.  744.24. See also Sec.  744.6(b)(7) for restrictions on 
specific activities of ``U.S. persons'' related to such entities.
* * * * *
0
18. Section 744.21 is revised to read as follows:


Sec.  744.21  Restrictions on certain `military end uses' and `military 
end users.'

    (a) General prohibition. In addition to the license requirements 
for items specified on the Commerce Control List (CCL) (supplement no. 
1 to part 774), you may not export, reexport, or transfer (in-country) 
any item subject to the EAR without a license if, at the time of the 
export, reexport, or transfer (in-country), you have ``knowledge,'' as 
defined in Sec.  772.1 of the EAR, that the item is intended, entirely 
or in part, for:
    (1) A `military end use,' as defined in paragraph (f)(1) of this 
section, when the `military end use' occurs in, or the product of the 
`military end use' is destined to Macau or a country specified in 
Country Group D:5 in supplement no. 1 to part 740 of the EAR; or
    (2) A `military end user,' as defined in paragraph (f)(2) of this 
section, wherever located, of Macau or a country specified in Country 
Group D:5 in supplement no. 1 to part 740 of the EAR.
    (b) Additional prohibition on those informed by BIS. BIS may inform 
persons, either individually by specific notice or through amendment to 
the EAR published in the Federal Register, or through a separate 
notification published in the Federal Register, that a license is 
required for a specific export, reexport, or transfer (in-country) 
because there is an unacceptable risk of use in, or diversion to a 
`military end use,' or `military end user,' from or in Macau or a 
country specified in Country Group D:5. Specific notice is to be given 
only by, or at the direction of, the Principal Deputy Assistant 
Secretary for Strategic Trade and Technology Security or the Deputy 
Assistant Secretary for Strategic Trade. When such notice is provided 
orally, it will be followed by a written notice within two working days 
signed by the Principal Deputy Assistant Secretary or Deputy Assistant 
Secretary or their designee. However, the absence of any such 
notification does not excuse persons from compliance with the license 
requirements in paragraph (a) of this section.
    (c) License exception. Despite the prohibitions described in 
paragraphs (a) and (b) of this section, you may export, reexport, or 
transfer (in-country) items subject to the EAR under the provisions of 
License Exception GOV set forth in Sec.  740.11(b)(2) of the EAR.
    (d) License application procedure. When submitting a license 
application pursuant to this section, you must state in the 
``additional information'' block of the application that ``this 
application is submitted because of the license requirement in Sec.  
744.21 (``Restrictions

[[Page 60997]]

on certain `military end uses' and `military end users'.'') In 
addition, either in the additional information block of the application 
or in an attachment to the application, you must include all known 
information concerning the `military end use(r)(s)' of the item(s). If 
you submit an attachment with your license application, you must 
reference the attachment in the ``additional information'' block of the 
application.
    (e) License review policy. Applications to export, reexport, or 
transfer (in-country) items described in paragraphs (a) and (b) of this 
section will be reviewed with a presumption of denial for Burma, China, 
Cuba, Iran, Macau, Nicaragua, North Korea, Syria, and Venezuela. 
Applications for Russia and Belarus will be reviewed with a policy of 
denial consistent with Sec.  746.8(b)(1) of the EAR. All other 
applications will be reviewed under a case-by-case review policy, 
consistent with United States policies articulated in Sec.  126.1 of 
the ITAR.
    (f) Definitions. For purposes of this section or references to this 
section, the following definitions apply:
    (1) Military end use means incorporation occurring outside the 
United States into a defense article described on the U.S. Munitions 
List (USML) (22 CFR 121.1, International Traffic in Arms Regulations); 
incorporation into items classified under Export Control Classification 
Numbers (ECCNs) under ``600 series'' ECCNs; or any item that supports 
or contributes to the operation, installation, maintenance, repair, 
overhaul, refurbishing, ``development,'' or ``production,'' of defense 
articles described on the USML, or items classified under ECCNs under 
``600 series'' ECCNs.
    (2) Military end user (MEU) means the national armed services 
(army, navy, marine, air force, or coast guard), the national guard, or 
any person or entity performing the functions of a `military end user,' 
including mercenaries, paramilitary, or irregular forces. MEU also 
includes entities designated with a footnote 3 or 5 on the Entity List 
in supplement no. 4 of this part.
0
19. Section 744.22 is revised to read as follows:


Sec.  744.22  Restrictions on certain `military-support end users.'

    (a) General prohibition. In addition to the license requirements 
for items specified on the Commerce Control List (CCL) (supplement no. 
1 to part 774), you may not export, reexport, or transfer (in-country) 
any item subject to the EAR specified in any ECCN on the CCL without a 
license if, at the time of the export, reexport, or transfer (in-
country), you have ``knowledge,'' as defined in Sec.  772.1 of the EAR, 
that the item is intended, entirely or in part, for a `military-support 
end user,' as defined in paragraph (f) of this section, in Macau or a 
country specified in Country Group D:5 in supplement no. 1 to part 740 
of the EAR, or wherever located if identified on the Entity List in 
supplement no. 4 of this part 744 with a footnote 6 designation.
    (b) Additional prohibition on those informed by BIS. BIS may inform 
persons, either individually by specific notice or through amendment to 
the EAR, that a license is required for a specific export, reexport, or 
transfer (in-country), or for the export, reexport, or transfer (in-
country) of any item subject to the EAR to a certain end user, because 
there is an unacceptable risk of use in, or diversion to, the 
activities specified in paragraph (a) of this section. Specific notice 
is to be given only by, or at the direction of, the Principal Deputy 
Assistant Secretary for Strategic Trade and Technology Security or the 
Deputy Assistant Secretary for Strategic Trade or their designee. When 
such notice is provided orally, it will be followed by a written notice 
within two working days signed by the Principal Deputy Assistant 
Secretary or Deputy Assistant Secretary. However, the absence of any 
such notification does not excuse persons from compliance with the 
license requirements in paragraph (a) of this section.
    (c) License exception. Notwithstanding the prohibitions described 
in paragraphs (a) and (b) of this section, you may export, reexport, or 
transfer (in-country) items subject to the EAR under the provisions of 
License Exception GOV set forth in Sec.  740.11(b)(2) of the EAR.
    (d) License application procedure. When submitting a license 
application pursuant to this section, you must state in the 
``additional information'' block of the application that ``this 
application is submitted because of the license requirement in Sec.  
744.22 (Restrictions on certain `military-support end users').'' In 
addition, either in the additional information block of the application 
or in an attachment to the application, you must include all known 
information concerning the `military-support end users' of the item(s). 
If you submit an attachment with your license application, you must 
reference the attachment in the ``additional information'' block of the 
application.
    (e) License review policy. Applications to export, reexport, or 
transfer (in-country) items described in paragraphs (a) and (b) of this 
section will be reviewed with a presumption of denial for Macau and 
countries described in in ITAR Sec.  126.1(d)(1), with the exception of 
Russia and Belarus. Applications involving Belarus and Russia will be 
reviewed with a policy of denial consistent with Sec.  746.8(b)(1) of 
the EAR. All other applications will be reviewed under a case-by-case 
review policy, consistent with United States policies articulated in 
Sec.  126.1 of the ITAR.
    (f) Definition. For purposes of this section, references to this 
section, or references to the terms in this paragraph, the following 
definitions apply:
    Military-support end user (MSEU) means any person or entity whose 
actions or functions support `military end uses,' as defined in Sec.  
744.21(f) of this section. MSEU also includes entities designated with 
a footnote 6 on the Entity List in supplement no. 4 to this part.
0
20. Add Sec.  744.24 to read as follows:


Sec.  744.24  Restrictions on certain intelligence end users.

    (a) General prohibitions. In addition to the license requirements 
for items specified on the Commerce Control List (CCL) (supplement no. 
1 to part 774 of the EAR), 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 an 
`intelligence end user,' wherever located, that is from a country or 
destination specified in Country Group D or E, but not also listed in 
A:5 or A:6 in supplement no. 1 to part 740 of the EAR.
    (b) Additional prohibition for those informed by BIS. BIS may 
inform persons, either individually by specific notice, through 
amendment to the EAR published in the Federal Register, or through a 
separate notification published in the Federal Register, that a license 
is required for a specific export, reexport, or transfer (in-country), 
including to a certain end user, because there is an unacceptable risk 
of use in, or diversion to, the activities specified in paragraph (a) 
of this section. Specific notice is to be given only by, or at the 
direction of, the Principal Deputy Assistant Secretary for Strategic 
Trade and Technology Security or the Deputy Assistant Secretary for 
Strategic Trade. When such notice is provided orally, it will be 
followed by a written notice within two working days signed by the 
Principal Deputy Assistant Secretary or Deputy Assistant Secretary or 
their

[[Page 60998]]

designee. However, the absence of any such notification does not excuse 
persons from compliance with the license requirements in paragraph (a) 
of this section.
    (c) License exception. Notwithstanding the prohibitions described 
in paragraphs (a) and (b) of this section, you may export, reexport, or 
transfer (in-country) items subject to the EAR under the provision of 
License Exception GOV set forth in Sec.  740.11(b)(2) of the EAR.
    (d) License application procedure. When submitting a license 
application pursuant to this section, you must state in the 
``additional information'' block of the application that ``this 
application is submitted because of the license requirement in Sec.  
744.24 (Restrictions on exports, reexports, and transfers (in-country) 
to certain intelligence end users).'' In addition, either in the 
additional information block of the application or in an attachment to 
the application, you must include all known information concerning the 
intelligence end user(s) of the item(s). If you submit an attachment 
with your license application, you must reference the attachment in the 
``additional information'' block of the application.
    (e) License review policy. Applications to export, reexport, or 
transfer (in-country) items described in paragraphs (a) and (b) of this 
section will be reviewed with a presumption of denial for Macau and 
countries in ITAR Sec.  126.1(d)(1), with the exception of Russia and 
Belarus. Applications for Russia and Belarus will be reviewed with a 
policy of denial consistent with Sec.  746.8(b)(1) of the EAR. All 
other applications will be reviewed under a case-by-case review policy, 
consistent with United States policies articulated in Sec.  126.1 of 
the ITAR.
    (f) Definition. For the purposes of this section, references to 
this section, or references to the term in this paragraph, the 
following definition applies:
    Intelligence end user (IEU) means any foreign government 
intelligence, surveillance, or reconnaissance organizations or other 
entities performing functions on behalf of such organizations. IEU 
includes entities designated with a footnote 7 on the Entity List in 
supplement no. 4 of this part.

Supplement No. 2 to Part 744 [Removed and Reserved]

0
21. Supplement No. 2 to part 744 is removed and reserved.
0
22. Supplement No. 4 to part 744 is amended by adding Footnotes 5 
through 7, to read as follows:

Supplement No. 4 to Part 744--Entity List

* * * * *
    \5\ For this `military end user,' (MEU) as defined in Sec.  
744.21(f) of this part, entity, see Sec. Sec.  744.6, 
744.11(a)(2)(iv), and 744.21 for related license requirements and 
license review policy.
    \6\ For this `military-support end user,' (MSEU) as defined in 
Sec.  744.22(f) of the EAR, entity, see Sec. Sec.  744.6, 
744.11(a)(2)(v), and 744.22 for related license requirements and 
license review policy.
    \7\ For this `intelligence end user,' (IEU) as defined in Sec.  
744.24(f) of the EAR, entity, see Sec. Sec.  744.6, 
744.11(a)(2)(vi), and 744.24 for related license requirements and 
license review policy.
* * * * *

Thea D. Rozman Kendler,
Assistant Secretary for Export Administration.
[FR Doc. 2024-16496 Filed 7-25-24; 8:45 am]
BILLING CODE 3510-33-P