Industry and Security Bureau 2010 – Federal Register Recent Federal Regulation Documents

This rule amends the Export Administration Regulations (EAR) to implement additional changes to the Entity List (Supplement No. 4 to Part 744) on the basis of the annual review of the Entity List conducted by the End-User Review Committee (ERC). The changes from the annual review will be implemented in three rules. The first rule published on May 28, 2010 (75 FR 29884) implemented the results of the annual review for listed entities located in Canada, Egypt, Germany, Hong Kong, Israel, Kuwait, Lebanon, Malaysia, South Korea, Singapore, and the United Kingdom. The second rule, published today, implements the results of the annual review for entities located in China and Russia. This rule removes five entities from the Entity List under Russia and makes twenty-one modifications to the Entity List (consisting of modifications to eighteen Chinese entries and three Russian entries currently on the Entity List) by adding additional addresses, aliases and/or clarifying the names for these twenty-one entities. The third rule, which will likely be published in early 2011, will implement the remaining results of the annual review. The Entity List provides notice to the public that certain exports, reexports, and transfers (in-country) to entities identified on the Entity List require a license from the Bureau of Industry and Security and that availability of license exceptions in such transactions is limited.

This proposed rule would add a new license exception to the Export Administration Regulations (EAR). The exception would allow exports, reexports and transfers (in-country) of specified items to destinations that pose little risk of unauthorized use of those items. To provide assurance against diversion to unauthorized destinations, transactions under this license exception would be subject to notification, destination control statement and consignee statement requirements. This proposed rule is part of the Administration's Export Control Reform Initiative undertaken as a result of the fundamental review of the U.S. export control system announced by the President in August 2009.

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) is seeking public comments on the impact that implementation of the Chemical Weapons Convention (CWC), through the Chemical Weapons Convention Implementation Act (CWCIA) and the Chemical Weapons Convention Regulations (CWCR), has had on commercial activities involving ``Schedule 1'' chemicals during calendar year 2010. BIS reminds the public that the CWC, CWCIA, or CWCR have potential impacts on commercial activities whenever Schedule 1 chemicals (e.g., nitrogen mustards) are intermediates in the synthesis of other chemicals, not just when the Schedule 1 chemicals are end products. The purpose of this notice of inquiry is to collect information to assist BIS in its preparation of the annual certification to the Congress, which is required under Condition 9 of Senate Resolution 75, April 24, 1997, in which the Senate gave its advice and consent to the ratification of the CWC.

In this action, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to remove one facility from the list of Semiconductor Manufacturing International Corporation (SMIC) facilities that are authorized to receive certain items in the People's Republic of China (PRC) under SMIC's validated end-user (VEU) authorization. Specifically, BIS removes Cension Semiconductor Manufacturing Corporation (Cension) from SMIC's list of approved VEU facilities in the PRC due to a material change at SMIC. This amendment is not the result of prohibited activities by Cension or by SMIC, nor does it establish any new license requirements or more restrictive licensing policies for exports, reexports or transfers (in- country) of items to the facility identified in this rule; license requirements set forth in the EAR continue to apply to this facility.

The Bureau of Industry and Security (BIS) published a final rule in the Federal Register on Tuesday, September 7, 2010 (75 FR 54271) that revised the Export Administration Regulations (EAR) by amending entries for certain items that are controlled for national security reasons in Categories 1, 2, 3, 4, 5 Part I (telecommunications), 6, 7, and 9; adding new entries to the Commerce Control List; revising reporting requirements; and adding and amending EAR Definitions. That final rule contained errors that affected Export Control Classification Numbers (ECCNs) 6A005, 6A008, and 9A001, as well as the definition of ``energetic materials.'' In addition, that final rule's preamble erroneously identified ECCN 6E993 as one of the ECCNs that was revised in the rule's text. This document corrects these errors.

Seven Technical Advisory Committees (TACs) advise the Department of Commerce on the technical parameters for export controls applicable to dual-use commodities and technology and on the administration of those controls. The TACs are composed of representatives from industry representatives, academic leaders and U.S. Government representing diverse points of view on the concerns of the exporting community. Industry representatives are selected from firms producing a broad range of goods, technologies, and software presently controlled for national security, non-proliferation, foreign policy, and short supply reasons or that are proposed for such controls, balanced to the extent possible among large and small firms. TAC members are appointed by the Secretary of Commerce and serve terms of not more than four consecutive years. The membership reflects the Department's commitment to attaining balance and diversity. TAC members must obtain secret-level clearances prior to appointment. These clearances are necessary so that members may be permitted access to the classified information needed to formulate recommendations to the Department of Commerce. Each TAC meets approximately four times per year. Members of the Committees will not be compensated for their services. The seven TACs are responsible for advising the Department of Commerce on the technical parameters for export controls and the administration of those controls within the following areas: Information Systems TAC: Control List Categories 3 (electronics), 4 (computers), and 5 (telecommunications and information security); Materials TAC: Control List Category 1 (materials, chemicals, microorganisms, and toxins); Materials Processing Equipment TAC: Control List Category 2 (materials processing); Regulations and Procedures TAC: The Export Administration Regulations (EAR) and Procedures for implementing the EAR; Sensors and Instrumentation TAC: Control List Category 6 (sensors and lasers); Transportation and Related Equipment TAC: Control List Categories 7 (navigation and avionics), 8 (marine), and 9 (propulsion systems, space vehicles, and related equipment) and Emerging Technology and Research Advisory Committee: (1) The identification of emerging technologies and research and development activities that may be of interest from a dual-use perspective; (2) the prioritization of new and existing controls to determine which are of greatest consequence to national security; (3) the potential impact of dual-use export control requirements on research activities; and (4) the threat to national security posed by the unauthorized exports of technologies. To respond to this recruitment notice, please send a copy of your resume to Ms. Yvette Springer at Yspringer@bis.doc.gov. Deadline: This Notice of Recruitment will be open for one year from its date of publication in the Federal Register.

In this final rule, the Bureau of Industry and Security amends the Export Administration Regulations (EAR) to add three end-users, Hynix Semiconductor (China) Ltd., Hynix Semiconductor (Wuxi) Ltd. and Lam Research Corporation to the list of validated end-users in the People's Republic of China (PRC). With this rule, exports, reexports and transfers (in-country) of certain items to one facility of Hynix Semiconductor (China) Ltd., one facility of Hynix Semiconductor (Wuxi) Ltd. and nine facilities of Lam Research Corporation in the PRC are now authorized under Authorization Validated End-User (VEU).

The President's Export Council Subcommittee on Export Administration (PECSEA) advises the U.S. Government on matters and issues pertinent to implementation of the provisions of the Export Administration Act and the Export Administration Regulations, as amended, and related statutes and regulations. These issues relate to U.S. export controls as mandated by law for national security, foreign policy, non-proliferation, and short supply reasons. The PECSEA draws on the expertise of its members to provide advice and make recommendations on ways to minimize the possible adverse impact export controls may have on U.S. industry. The PECSEA provides the Government with direct input from representatives of the broad range of industries that are directly affected by export controls. The PECSEA is composed of high-level industry and Government members representing diverse points of view on the concerns of the business community. PECSEA industry representatives are selected from firms producing a broad range of goods, software, and technologies presently controlled for national security, foreign policy, non- proliferation, and short supply reasons or that are proposed for such controls, balanced to the extent possible among large and small firms. PECSEA members are appointed by the Secretary of Commerce and serve at the Secretary's discretion. The membership reflects the Department's commitment to attaining balance and diversity. PECSEA members must obtain secret-level clearances prior to appointment. These clearances are necessary so that members can be permitted access to relevant classified information needed in formulating recommendations to the President and the U.S. Government. The PECSEA meets 4 to 6 times per year. Members of the Subcommittee will not be compensated for their services. The PECSEA is seeking private-sector members with senior export control expertise and direct experience in one or more of the following industries: Machine tools, semiconductors, commercial communication satellites, high performance computers, telecommunications, aircraft, pharmaceuticals, and chemicals. To Apply: Please send a short biographical sketch to Ms. Yvette Springer at Yspringer@bis.doc.gov. For more information, please contact Ms. Springer on 202-482-2813. Deadline: This Notice of Recruitment has been extended until October 6, 2010.

The Bureau of Industry and Security (BIS) is reviewing the foreign policy-based export controls in the Export Administration Regulations to determine whether they should be modified, rescinded or extended. To help make these determinations, BIS is seeking public comments on how existing foreign policy-based export controls have affected exporters and the general public.

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) at the December 2009 WA Plenary Meeting (the Plenary). 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 made to the Wassenaar List at the Plenary, this rule revises the EAR by amending certain entries that are controlled for national security reasons in Categories 1, 2, 3, 4, 5 Part I (telecommunications), 6, 7, and 9, revising reporting requirements, and adding, removing and amending EAR Definitions. The changes agreed to at the Plenary that pertain to Export Control Classification Numbers (ECCNs) 5A002, 5D002, 6A002, 6A003, 8A002 and all related ECCNs will be implemented in a separate rule because of the sensitivity of the items and complexity of procedures and controls for these items. The changes agreed to at the Plenary that pertain to raising the Adjusted Peak Performance (APP) for digital computers in ECCN 4A003 will be implemented in a separate rule when the President's report for High Performance Computers has been sent to Congress that sets forth the new APP in accordance with the National Defense Authorization Act for FY1998.

The Department of Commerce's Bureau of Industry and Security (BIS) seeks public comments on a set of proposed ``Best Practices for Transit, Transshipment, and Reexport of Items Subject to the Export Administration Regulations.'' BIS is particularly interested in engaging in a dialogue with industry regarding new transshipment principles and best practices that complement those already identified by BIS in its Web guidance (https://www.bis.doc.gov/ complianceandenforcement/emcp.htm), and industry outreach regarding export management and compliance. BIS will consider all comments timely submitted before finalizing these best practices and publishing them in the Federal Register and on the BIS Web site. This document will include a discussion of those comments.

The President's Export Council Subcommittee on Export Administration (PECSEA) advises the U.S. Government on matters and issues pertinent to implementation of the provisions of the Export Administration Act and the Export Administration Regulations, as amended, and related statutes and regulations. These issues relate to U.S. export controls as mandated by law for national security, foreign policy, non-proliferation, and short supply reasons. The PECSEA draws on the expertise of its members to provide advice and make recommendations on ways to minimize the possible adverse impact export controls may have on U.S. industry. The PECSEA provides the Government with direct input from representatives of the broad range of industries that are directly affected by export controls.

This rule clarifies the intent of the encryption registration requirement that appeared in a rule published on June 25, 2010. In

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.

This rule updates and clarifies export and reexport license requirements on striking weapons, restraint devices, shotguns and parts, optical sighting devices, and electric shock devices. It also adds equipment designed for the execution of humans to the Commerce Control List. This rule makes no changes to the longstanding policy of denial of applications to export or reexport specially designed implements of torture. The rule provides additional illustrative examples of such items and adopts a definition of torture used in a U.S. statute that implements the United Nations Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment. BIS is publishing this rule as part of an ongoing review of crime control license requirements and policy.

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.

This rule amends the Export Administration Regulations (EAR) by adding twenty-four persons to the Entity List (Supplement No. 4 to Part 744) on the basis of Section 744.11 of the EAR. The persons who are added to the Entity List have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. These persons will be listed under the following nine destinations on the Entity List: Belarus, China, Hong Kong, Iran, Malaysia, New Zealand, Norway, South Africa and United Kingdom.

The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR or Regulations) to modify the requirements of License Exception ENC, ``Encryption Commodities, Software and Technology,'' and the requirements for qualifying an encryption item as mass market. BIS is also amending specific license requirements for encryption items. With respect to encryption products of lesser national security concern, this rule replaces the requirement to wait 30 days for a technical review before exporting such products and the requirement to file semi-annual post-export sales and distribution reports with a provision that allows immediate authorization to export and reexport these products after electronic submission to BIS of an encryption registration. A condition of this new authorization for less sensitive products is submission of an annual self-classification report on these commodities and software exported under License Exception ENC. With respect to most mass market encryption products, this rule similarly replaces the requirement to wait 30 days for a technical review before exporting and reexporting such products with a provision that allows immediate authorization to export and reexport these products after electronic submission to BIS of an encryption registration, subject to annual self-classification reporting for exported encryption products. Only a few categories of License Exception ENC and mass market encryption products will continue to require submission of a 30-day classification request. Encryption items that are more strictly controlled continue to be authorized for immediate export and reexport to most end-users located in close ally countries upon submission of an encryption registration and classification request to BIS. This rule also eases licensing requirements for the export and reexport of many types of technology necessary for the development and use of encryption products, except to countries subject to export or reexport license requirements for national security reasons or anti-terrorism reasons, or that are subject to embargo or sanctions. This rule also removes the requirement to file separate encryption classification requests (formerly encryption review requests) with both BIS and the ENC Encryption Request Coordinator (Ft. Meade, MD).