Industry and Security Bureau 2006 – Federal Register Recent Federal Regulation Documents

This final rule amends the Export Administration Regulations (EAR) to clarify the civil monetary penalties that BIS may impose for violations of the EAR during periods when the EAR are continued under the Export Administration Act, of 1979, as amended, the International Emergency Economic Powers Act, as amended, or other statutory authority. BIS is revising the EAR to reflect amendments to the International Emergency Economic Powers Act made by the USA PATRIOT ACT Improvement and Reauthorization Act of 2005.

Six 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 and 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 4 times per year. Members of the Committees will not be compensated for their services. The six 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 (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). 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. For Further Information Contact: Ms. Yvette Springer on (202) 482- 4814.

The Bureau of Industry and Security (BIS) is withdrawing a proposed rule that would have made use of the Simplified Network Application Process (SNAP) mandatory and that would have comprehensively revised the provisions of the Export Administration Regulations (EAR) that govern electronic filing. BIS is continuing to work on improvements to its on-line application system and will issue new rules as needed to implement those improvements.

On June 14, 2002, the Bureau of Industry and Security (``BIS'') published a notice in the Federal Register that set forth a list of persons in foreign countries who were parties to past export transactions where pre-license checks or post-shipment verifications could not be conducted for reasons outside the control of the U.S. Government (``Unverified List''). Additionally, on July 16, 2004, BIS published a notice in the Federal Register that advised exporters that the Unverified List would also include persons in foreign countries in transactions where BIS is not able to verify the existence or authenticity of the end-user, intermediate consignee, ultimate consignee, or other party to the transaction. These notices advised exporters that the involvement of a listed person as a party to a proposed transaction constitutes a ``red flag'' as described in the guidance set forth in Supplement No. 3 to 15 CFR part 732, requiring heightened scrutiny by the exporter before proceeding with such a transaction. This notice adds three entities to the Unverified List. The entities are: Sheeba Import Export, Hadda Street, Sanaa, Yemen; Aerospace Consumerist Consortium FZCO, Sheikh Zayed Road, P.O. Box 17951, Jebel Ali Free Zone, Dubai, United Arab Emirates (UAE) and Dubai International Airport, Dubai, 3365, UAE; and Medline International LLC, P.O. Box 86343 Dubai, UAE.

It is the policy of the United States Government to prevent exports that would make a material contribution to the military capability of the People's Republic of China (PRC), while facilitating U.S. exports to legitimate civil end-users in the PRC. Consistent with this policy, the Bureau of Industry and Security (BIS) proposes to amend the Export Administration Regulations (EAR) by revising and clarifying United States licensing requirements and licensing policy on exports and reexports of goods and technology to the PRC. The proposed amendments include a revision to the licensing review policy for items controlled on the Commerce Control List (CCL) for reasons of national security, including a new control based on knowledge of a military end-use on exports to the PRC of certain CCL items that otherwise do not require a license to the PRC. The items subject to this license requirement will be set forth in a list. This rule further proposes to revise the licensing review policy for items controlled for reasons of chemical and biological proliferation, nuclear nonproliferation, and missile technology for export to the PRC, requiring that applications involving such items be reviewed in conjunction with the revised national security licensing policy. This rule proposes the creation of a new authorization for validated end-users in certain destinations, including the PRC, to whom certain, specified items may be exported or reexported. Such validated end-users would be placed on a list in the EAR after review and approval by the United States Government. Finally, this rule proposes to require exporters to obtain an End- User Certificate, issued by the PRC Ministry of Commerce, for all items that both require a license to the PRC for any reason and exceed a total value of $5,000. The current PRC End-Use Certificate applies only to items controlled for national security reasons. This rule also proposes to eliminate the current requirement that exporters submit PRC End-User Certificates to BIS with their license applications but provides that they must retain them for five years.

This rule revises Section 756.2 of the Export Administration Regulations (EAR) to authorize the Under Secretary for Industry and Security to designate any employee of the Department of Commerce to be the appeals coordinator for appeals of administrative actions taken under part 756 of the EAR. Such designation of employees from outside the Bureau of Industry and Security shall require the concurrence of the head of the operating unit in which that employee is employed. Prior to publication of this rule, only a ``BIS official'' might have been designated as appeals coordinator.

The Bureau of Industry and Security (BIS) is publishing this final rule to amend the Export Administration Regulations (EAR) to expand export and reexport controls on certain biological agents and toxins (referred to, herein, as ``select agents and toxins'') that have been determined by the Centers for Disease Control and Prevention (CDC), U.S. Department of Health and Human Services, and the Animal and Plant Health Inspection Service (APHIS), U.S. Department of Agriculture, to have the potential to pose a severe threat to human, animal and plant life, as well as certain sectors of the U.S. economy (e.g., agriculture). Prior to the publication of this rule, twenty-two of these agents were not listed on the Commerce Control List (CCL) and one of these agents was incompletely specified therein. By amending the EAR to add a new CCL entry that controls CDC and/or APHIS select agents and toxins (including associated genetic elements, recombinant nucleic acids, and recombinant organisms) not previously specified on the CCL, this rule complements the controls that CDC and AHPIS have imposed on the possession, use, and transfer of these select agents and toxins within the United States. The addition of these items to the CCL is expected to have a minimal impact on U.S. industry, since the volume of exports and reexports is extremely limited. This rule also amends the EAR to clarify controls on certain medical products containing AG-controlled toxins, other than ricin or saxitoxin, by revising the definition of such products to clearly indicate that they include pharmaceutical formulations, prepackaged for distribution as clinical or medical products, that have been approved by the Food and Drug Administration (FDA) for use as an ``Investigational New Drug'' (IND). Specifically, this rule clarifies that FDA-approved IND products containing AG-controlled toxins (except ricin or saxitoxin) are considered to be ``medical products'' as described in the CCL entry that controls vaccines, immunotoxins, medical products, and diagnostic and food testing kits. BIS is making this clarification because the previous revision to the definition of medical products inadvertently failed to specify that such products include IND items. Furthermore, this clarification is consistent with the language in the AG exemption for clinical and medical products containing botulinum toxins and conotoxins, since the AG exemption applies when such products are designed for ``testing,'' as well as human administration, in the treatment of medical conditions. In addition, this rule removes the license requirements for exports and reexports to St. Kitts and Nevis of items that require a license for export or reexport only to countries of concern for chemical and biological weapons proliferation (CB) reasons. This change is being made because St. Kitts and Nevis is not listed in Country Group D:3. As a result of this change, there is now a one-to-one correspondence between the countries included in Country Group D:3 and the countries for which a license requirement is indicated under CB Column 3 of the Commerce Country Chart. Finally, this rule updates the list of countries that currently are States Parties to the Chemical Weapons Convention (CWC) by adding Antigua and Barbuda, Bhutan, Cambodia, the Democratic Republic of the Congo, Djibouti, Grenada, Haiti, Honduras, Liberia, and Vanuatu, which recently became States Parties. As a result of this change, the CW (Chemical Weapons) license requirements and policies in the EAR that apply to these countries now conform with those applicable to other CWC States Parties.

The Bureau of Industry and Security (BIS) has reviewed the public comments received in response to the ``Advance Notice of Proposed Rulemaking: Revision and Clarification of Deemed Export Related Regulatory Requirements'' (ANPR) published in the Federal Register on March 28, 2005. The ANPR identified recommendations contained in the U.S. Department of Commerce Office of Inspector General (OIG) Report entitled ``Deemed Export Controls May Not Stop the Transfer of Sensitive Technology to Foreign Nationals in the U.S.'' (Final Inspection Report No. IPE-16176March 2004). This action discusses concerns raised by the OIG and summarizes public comments received in response to the ANPR. This document also states that the current BIS licensing policy related to deemed exports is appropriate and confirms that the existing definition of ``use'' adequately reflects the underlying export controls policy rationale in the Export Administration Regulations (EAR). As such, BIS is withdrawing the ANPR. In addition, this action addresses comments on the scope of the fundamental research provisions in the EAR.

The Bureau of Industry and Security (BIS) is announcing the creation of a Federal Advisory Committee that will review and provide recommendations to the Department of Commerce on deemed export policy. The Deemed Export Advisory Committee (DEAC) will help ensure that the deemed export licensing policy most effectively protects national security while ensuring the U.S. continues to be at the leading edge of technological innovation. This notice also provides an overview of steps that BIS has taken to improve understanding of deemed export policy within academia and industry, including outreach activities conducted by BIS.

This rule revises Section 766.23(c) of the Export Administration Regulations (EAR) to make the appeal procedure for any person named as a related person to the respondent in an order denying export privileges identical to the appeal procedure for the respondent in that order.

On April 25, 1997, the United States ratified the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on Their Destruction, also known as the Chemical Weapons Convention (CWC or Convention). The Bureau of Industry and Security (BIS) published an interim rule, on December 30, 1999, that established the Chemical Weapons Convention Regulations (CWCR) to implement the provisions of the CWC affecting U.S. industry and other U.S. persons. The CWCR include requirements to report certain activities, involving scheduled chemicals and unscheduled discrete organic chemicals, and to provide access for on-site verification by international inspectors of certain facilities and locations in the United States. This final rule updates the CWCR to remove outdated provisions and include additional requirements identified in the implementation of the CWC and by clarifying other CWC requirements.

The Bureau of Industry and Security (BIS) is seeking public comments on the impact of the Defense Priorities and Allocations System (DPAS) set-aside for metalworking machines on industry (15 CFR 700.31). This notice of inquiry is part of an effort to collect information to assist in the preparation of revisions to the DPAS regulation (15 CFR part 700), including the possible elimination of the metalworking machines set-aside.