Bureau of Industry and Security July 2011 – Federal Register Recent Federal Regulation Documents

This rule amends the Export Administration Regulations (EAR)

President Obama directed the Administration in August 2009 to conduct a broad-based review of the U.S. export control system in order to identify additional ways to enhance national security. Secretary of Defense Gates described in April 2010 the initial results of that effort and why fundamental reform of the U.S. export control system is necessary to enhance national security. The Departments of Commerce and State described in two December 2010 Advanced Notice of Proposed Rulemakings the Administration's general plans for reviewing and revising the two primary lists of controlled itemsthe Commerce Control List (CCL) and the United States Munitions List (USML)to accomplish this objective by, inter alia, making the lists more ``positive,'' ``aligned,'' and ``tiered.'' This rule proposes a new regulatory construct for the transfer of items on the USML that, in accordance with section 38(f) of the Arms Export Control Act (AECA) (22 U.S.C. 2778(f)(1)), the President determines no longer warrant control under the AECA and that would be controlled under the Export Administration Regulations (EAR) once the congressional notification requirements of section 38(f) and corresponding amendments to the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120-130) and its USML and the EAR and its CCL are completed. In addition to proposing a regulatory construct for transferring these items into the CCL, this rule proposes the transfer of an initial tranche of items from USML Category VII (Tanks and Military Vehicles) to the CCL. This rule also proposes amending the EAR to establish a process by which certain items moving from the USML to the CCL would be made eligible for License Exception Strategic Trade Authorization (STA), and proposes EAR amendments related to movement of USML items to the CCL, such as new definitions of relevant terms, including ``specially designed,'' ``end items,'' ``parts,'' and ``components.'' Finally, this notice proposes establishing a new holding Export Control Classification Number (ECCN) in which items that warrant a significant level of control, but are not otherwise classified on the CCL, may be temporarily placed.

In this final rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to add controls on exports and reexports of U.S.-origin dual-use items to a new nation, the Republic of South Sudan. In January 2011, a referendum was held in the region of Southern Sudan to determine whether that region would remain part of Sudan or become a separate, independent nation. On February 7, 2011, the referendum commission announced that the region of Southern Sudan had voted to become a separate nation, effective July 9, 2011. On February 7, 2011, recognizing this historic milestone in the implementation of the Comprehensive Peace Agreement (CPA), President Obama announced the intention of the United States to formally recognize the Republic of South Sudan as a sovereign state in July, 2011. BIS is therefore amending the EAR to reflect the July 9, 2011 formal recognition by adding the new nation, the Republic of South Sudan, to the Commerce Country Chart and including it in Country Group B, which will render the destination eligible for certain export and reexport License Exceptions. The controls that continue to apply to ``Sudan'' under the EAR will not apply to the Republic of South Sudan.

The Bureau of Industry and Security (BIS) is seeking public comments on the impact of amending the Chemical Weapons Convention Regulations (CWCR) to reduce the concentration level below which the CWCR exempt certain mixtures containing a Schedule 2A chemical from the declaration requirements that apply to Schedule 2A chemical production, processing, and consumption under the Chemical Weapons Convention (CWC). To make these declaration requirements consistent with the international agreement adopted by the Organization for the Prohibition of Chemical Weapons (OPCW), BIS is considering amending the CWCR to replace the current low concentration exemption (a concentration of ``less than 30%'' by volume or weight) with a two-tiered low concentration exemption that is based, in part, on whether the total amount of a Schedule 2A chemical produced, processed, or consumed at one or more plants on a plant site during a calendar year is less than the applicable verification threshold in the CWCR. Under this two- tiered approach, the declaration and reporting requirements in the CWCR would not apply to a chemical mixture containing a Schedule 2A chemical if: The concentration of the Schedule 2A chemical in the mixture is ``1% or less,'' or the concentration of the Schedule 2A chemical in the mixture is ``more than 1%, but less than or equal to 10%,'' and the annual amount of the Schedule 2A chemical produced, processed, or consumed is less than the relevant verification threshold. Legislative amendment of the Chemical Weapons Convention Implementation Act (CWCIA) is required in order to implement this proposed amendment to the CWCR. In addition, at U.S. national discretion, BIS is considering amending the CWCR to require declarations/reports for exports and imports of any mixtures that contain ``more than 10%'' of a Schedule 2A chemical by volume or weight (whichever method yields the lesser percentage), if the total quantity of the Schedule 2A chemical exported or imported during a calendar year exceeds the applicable CWCR declaration threshold.

This rule makes several technical amendments to the Export Administration Regulations (EAR). This rule corrects one omission of a publication date in the authority citation paragraph of part 730 of the Export Administration Regulations. It revises the address of the Bureau of Industry and Security's (BIS) Western Regional Office at two places in the EAR to reflect the recent relocation of that office. Additionally, this rule updates the table of authorized information collection control numbers in Supplement No. 1 to part 730 of the EAR to reflect consolidation of several authorizations relating to license exceptions and exclusions into a single authorization with a single control number. Finally, this rule removes a requirement to report to BIS certain exports of oil transported from the North Slope of Alaska over Federal rights-of-way granted pursuant to section 203 of the Trans-Alaska Pipeline Authorization Act because BIS can now obtain this information from the Automated Export System (AES).