Bureau of Industry and Security October 2008 – Federal Register Recent Federal Regulation Documents

This final rule implements the provisions of the Protocol Additional to the Agreement Between the United States of America and the International Atomic Energy Agency (IAEA) for the Application of Safeguards in the United States of America (the ``Additional Protocol''). The Additional Protocol is an agreement between the United States and the IAEA to allow monitoring and reporting of certain civil nuclear fuel cycle-related activities. The Department of Commerce's Bureau of Industry and Security (BIS) is establishing these Additional Protocol Regulations (APR) to implement the provisions of the Additional Protocol affecting U.S. industry and other U.S. persons engaged in certain civil nuclear fuel cycle-related activities, which are not regulated by the U.S. Nuclear Regulatory Commission (NRC) or its domestic Agreement States, and are not located on certain U.S. government locations. The APR describe the requirement to report such activities to BIS, the scope and conduct of IAEA complementary access to locations at which such civil nuclear fuel cycle-related activities take place, and the role of BIS in implementing the Additional Protocol in the United States. The impact of the APR on U.S. industry and other U.S. persons involves the submission of initial reports, annual update reports, and other reporting requirements, as well as on-site activities in conjunction with complementary access. Other U.S. Government agencies issuing regulations to implement other provisions of the Additional Protocol include the Nuclear Regulatory Commission, the Department of Energy, and the Department of Defense. On July 25, 2008, BIS published a proposed rule that requested comments on the proposed establishment of the APR. BIS received comments from one respondent and has reviewed these comments and considered them in its preparation of this final rule.

The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.

The Bureau of Industry and Security (BIS) will hold a public meeting on October 27, 2008 for those companies, organizations, and individuals that have an interest in learning about the new license exception entitled ``Intra-Company Transfer (ICT)'' that would be established under the Export Administration Regulations (EAR) as presented in the proposed rule published in the Federal Register on October 3, 2008. U.S. Government officials will explain the amendments to the EAR proposed in the rule and answer questions from the public.

5 CFR 430.310 requires agencies to publish notice of Performance Review Board appointees in the Federal Register before their service begins. This notice announces the names of new and existing members of the Bureau of Industry and Security's Performance Review Board.

The Bureau of Industry and Security (BIS) maintains the Commerce Control List (CCL), which identifies items subject to Department of Commerce export controls. This final rule revises the Export Administration Regulations (EAR) to implement changes made to the Wassenaar Arrangement's List of Dual Use Goods and Technologies (Wassenaar List) maintained and agreed to by governments participating in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies (Wassenaar Arrangement, or WA). The Wassenaar Arrangement advocates implementation of effective export controls on strategic items with the objective of improving regional and international security and stability. To harmonize with the changes to the Wassenaar List, this rule revises the EAR by amending certain entries that are controlled for national security reasons in Categories 1, 2, 3, 5 Part I (telecommunications), 5 Part II (information security), 6, 7, and 9; adding new entries to the Commerce Control List (CCL), and amending EAR Definitions, as well as adding definitions. The purpose of this final rule is to revise the CCL and definitions of terms used in the EAR to implement Wassenaar List revisions that were agreed upon in the December 2007 Wassenaar Arrangement Plenary Meeting and the Wassenaar List provisions regarding solar cells agreed upon in the December 2006 plenary meeting. This rule also adds or expands unilateral U.S. export controls and national security export controls on certain items to make them consistent with the amendments made to implement the Wassenaar Arrangement's decisions.

This rule amends the Export Administration Regulations (EAR) to make revisions to the EAR as a result of a systematic review of the Commerce Control List (CCL) that was conducted by the Bureau of Industry and Security (BIS). This rule is the second phase of the regulatory implementation of the results of a review of the CCL that was conducted by BIS starting in 2007. The BIS CCL review benefited from input received from BIS's Technical Advisory Committees (TACs) and comments that were received from the interested public in response to the publication of a BIS notice of inquiry on July 17, 2007. The revisions in this rule include clarifications to existing controls, eliminating redundant or outdated controls, establishing more focused and rationalized controls, and adding additional controls for clarity or for consistency with international regimes.

This interim final rule amends the Export Administration Regulations (EAR) to make the treatment of encryption items more consistent with the treatment of other items subject to the EAR, as well as to simplify and clarify regulations pertaining to encryption items. The restrictions pertaining to technical assistance by U.S. persons with respect to encryption items are removed, because the current export and reexport restrictions set forth in the EAR for technology already include technical assistance. This rule also removes License Exception KMI as it has become obsolete because of developments in uses of encryption. In addition, this rule removes notification requirements for items classified as 5A992, 5D992, and 5E992. This rule also increases certain parameters under License Exception ENC, which is intended to reflect advances in technology. This rule adds two new review and reporting requirement exclusion paragraphs under License Exception ENC for wireless ``personal area network'' items and for ``ancillary cryptography'' items. This rule also adds Bulgaria, Canada, Iceland, Romania, and Turkey to the list of countries that receive favorable treatment under License Exception ENC. Commodities and software pending mass market review may no longer be exported under ECCNs 5A992 and 5D992 using No License Required (NLR). However, once the mass market review has been received by BIS, then such commodities and software may be exported using License Exception ENC under ECCNs 5A002 and 5D002. This rule will reduce the paperwork burden on the public by 9% (annual dollar amount savings of approximately $14,000 to the public and $5,000 to the U.S. Government), because of the removal of certain notification requirements, addition of countries to the list of those receiving favorable treatment under License Exception ENC, and the increase of reporting and review requirement exclusions. The Departments of Commerce, State and Defense will continue to review export control, license review policies, and license exceptions for encryption items in the EAR.