DURING 2004
DEPARTMENT OF COMMERCE, BUREAU OF INDUSTRY AND SECURITY
EXPORT ADMINISTRATION REGULATIONS
(15 CFR Part 730 et seq.)
NOTE: CHANGES TO THE EXPORT ADMINISTRATION REGULATIONS LISTED BELOW ARE NUMBERED CONSECUTIVELY, BEGINNING IN JANUARY OF THE NEW YEAR.
To search the Federal Register for the full text of the regulations, Click Here.
1. Mandatory Use of Simplified Network Application Processing System(68 FR 1685 on January 12, 2004)
Commentary: The Bureau of Industry and Security (BIS) is extending the deadline for public comments on the proposed rule that would amend the Export Administration Regulations (EAR) to implement a revised version of the BIS Simplified Network Application Processing System until February 12, 200 to allow the public additional time to comment on the rule.
2. Chemical Weapons Convention Regulations: Electronic Submission of Declarations and Reports Through the Web-Data Entry System for Industry (Web-DESI)(68 FR 2501 on January 16, 2004)
Commentary: BIS published an interim rule on December 30, 1999, that established the Chemical Weapons Convention Regulations (CWCR) to implement the provisions of the Chemical Weapons Convention (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 interim final rule amends the CWCR by adding instructions on how to obtain authorization from BIS to make electronic submissions of declarations and reports through the Web-Data Entry System for Industry (Web-DESI), which can be accessed on the CWC Web site at http://www.cwc.gov. The rule also establishes procedures for the assignment and use of passwords for facilities, plant sites and trading companies (USC password) and procedures for the assignment and use of Web-DESI user accounts.
3. Lifting of U.N. Sanctions Against UNITA(68 FR 3004 on January 22, 2004)
Commentary: BIS has published a rule amending the EAR by removing from the EAR references to sanctions on Angola administered by the Department of the Treasury’s Office of Foreign Assets Control (OFAC). In response to United Nationals Security Council (UNSC) resolutions regarding the conflict in Angola, the President, by Executive Order, directed the Department of the Treasury to maintain sanctions on the National Union for the Total Independence of Angola (UNITA). On December 9, 2002, the UNSC terminated the sanctions previously imposed on UNITA. On May 6, 2003, consistent with the UNSC action, the President terminated the relevant Executive Orders, effectively ending U.S. sanctions. This rule amends the EAR to remove certain references to the sanctions, which had been maintained by OFAC with respect to UNITA.
4. Revisions and Clarifications to the Export Administration Regulations(69 FR 5686 on February 6, 2004)
Commentary: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by making certain corrections, including insertion of material inadvertently omitted from previous rules. For a complete list of the nineteen corrections and clarifications, please refer to the register notice cited above.
5. Licensing Jurisdiction for QRS11 Micromachined Angular Rate Sensors(69 FR 5928 on February 9, 2004)
Commentary: BIS has published a final rule amending the EAR to transfer, coincident with the State Department’s written commodity jurisdiction determination of February 9, 2004, licensing jurisdiction for QRS11-00100-100/101 Micromachined Angular Rate Sensors from the Department of State to the Department of Commerce when those sensors are integrated into a instrument system (CSIS) of the type described in ECCN 7A994 or aircraft of the type described in ECCN 9A991 that incorporates a CSIS that has such a sensor integrated, or are exported solely for integration into such a system. This rule also excludes systems or aircraft integrating QRS11-00100-100/101 sensors from eligibility for the de minimis provision of the EAR, and excludes the sensors from license exception eligibility.
6. Export Administration Regulations: Penalty Guidance in the Settlement of Administrative Enforcement Cases(69 FR 7867 on February 20, 2004)
Commentary: In response to the comments received on the September 17, 2003, proposed rule regarding penalty guidance in the settlement of administration enforcement cases (68 FR 54402), BIS has issued a final rule, which discusses the comments received, and the extent to which they have been adopted.
Specifically, this rule incorporates guidance in the EAR—specifically, in a new Supplement No. 1 to Part 766—on how BIS determines what penalty is appropriate for the settlement of an administrative enforcement case. This guidance identifies both general factors, such as the destination for the export and degree of willfulness involved in violations, and specific mitigating and aggravating factors, which BIS typically takes into account in determining an appropriate penalty. The guidance also describes factors that BIS’s Office Export Enforcement (OEE) typically consider in describing whether a violation should be addressed in a warning letter, rather than in an administrative enforcement case. The guidance does not apply to antiboycott matters arising under Part 760 of the EAR.
The rule also amends Section 764.5(e) of the EAR to state that Supplement No. 1 to Part 766 describes how BIS typically exercises its discretion regarding whether to pursue an administrative enforcement case regarding violations reported in a voluntary self-disclosure under Section 764.5, and what administrative sanctions to seek in settling such a case.
In Part 766, the rule amends Section 766.3(a) to state that Supplement No. 1 to Part 766 describes how BIS typically exercises its discretion regarding the issuance of charging letters, other than in antiboycott matters under Part 760. The rule amends Section 766.28 to add a new paragraph (f), stating that Supplement No. 1 to Part 766 describes how BIS typically exercises its discretion regarding the terms under which it is willing to settle particular cases, other than antiboycott matters under Part 760.
This guidance is consistent with the objectives of Section 223 of the Small Business Regulatory Enforcement Fairness Act (Title II, Pub. Law 104-121).
7. Amendments to the Export Administration Regulations (EAR) Implementing the Understandings Reached at the June 2003 Australia Group (AG) Plenary Meeting and a Subsequent AG Intersessional Decision on Certain Animal Pathogens(69 FR 12789 on March 18, 2004)
Commentary: The Bureau of Industry and Security (BIS) has published a final rule to describe the understandings reached at the June 2003 plenary meeting of the Australia Group (AG) and to amend the Export Administration Regulations (EAR), as needed to implement these AG understandings. Specifically, this final rule amends the EAR by adding twelve new viruses and two new bacteria to the list of AG-controlled human and zoonotic pathogens and toxins described on the Commerce Control List (CCL). This rule also amends the EAR to implement an AG intersessional decision, which was adopted after the June 2003 AG plenary meeting, by adding two viruses to the list of AG-controlled animal pathogens described on the CCL. Finally, this rule updates the list of countries that are currently States Parties to the Chemical Weapons Convention (CWC) by adding nine countries that recently became States Parties: Afghanistan, Belize, Cape Verde, Kyrgyzstan, Libya, Sao Tome and Principe, Timor Leste, Tonga, and Tuvalu.
8. Removal of “National Security” controls Form, and Imposition of “Regional Stability” Controls on, Certain Items on the Commerce Control List(69 FR 16478 on March 30, 2004)
Commentary: BIS has published a final rule amending the CCL to remove “National Security” (NS) controls from, and to impose “Regional Stability” (RS) controls on, certain items in order to conform with Section 5(c)(6)(A) of the Export Administration Act, which limited the duration of U.S. unilaterally imposed NS controls. The reason for the imposed RS controls is that these items have the potential to contribute to military capabilities in a manner that could alter regional military balances contrary to the foreign policy interests of the United States. Although the Act has expired, BIS continues to carry out the provisions of the Act, as appropriate and to the extent permitted by law, pursuant to Executive Order 13222 and the International Emergency Economic Powers Act. This rule also revises two references to the “International Munitions List” to read “Wassenaar Munitions List” to reflect the correct current title of that document and amends the language controlling muzzle loading (black powder) firearms to conform with the corresponding language on the Wassenaar Munitions List.
9. Removal of “National Security” Controls from, and Imposition of “Regional Stability” Controls on, Certain Items on the Commerce Control List; Correction(69 FR 17926 on April 6, 2004)
Commentary: The Bureau of Industry and Security (BIS) has published a correction to the final rule published in the Federal Register of March 30, 2004 which replaced national security export and reexport controls on certain items with regional stability controls. This rule corrects two typographical errors that appeared in that rule.
10. Addition of Aruba, Netherlands Antilles, East Timor, and Democratic Republic of the Congo, and Update of Country Names, in the Export Administration Regulations (69 FR 21055 April 20, 2004)
Commentary: The Bureau of Industry and Security (BIS) has amended the Export Administration Regulations (EAR) to update the Country Chart to add East Timor and the Democratic Republic of the Congo, to establish separate export licensing requirements for Aruba and Netherlands Antilles, and to update references to certain countries to reflect their officially recognized names.
This segregation of Aruba and Netherlands Antilles from the Netherlands is not meant as a departure from current export control policy as to the treatment of dependencies. The EAR will continue to treat territories, possessions or departments of foreign countries as having the same licensing requirements as their sovereigns on the Commerce Country Chart when such territories, possessions or departments are not separately listed on the Commerce Country Chart.
This final rule also updates references to certain countries in the EAR to reflect their officially recognized names, including Macedonia (the Former Yugoslav Republic of), Micronesia (Federated States of), Saint Vincent and the Grenadines, Samoa, Serbia and Montenegro, and Antigua and Barbuda.
11. Revisions to the Unverified List—Guidance as to “Red Flags” (69. FR 22002 April 23, 2004)
Commentary: The Bureau of Industry and Security has published a notice advising exporters that involvement of a listed person on the U.S. Government’s Unverified List 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. The notice also states that when warranted, BIS would remove persons from the Unverified List. Recently a post shipment verification (PSV) was completed at the facilities of Power Test & Research Institute of Guangzhou, No. 38 East Huangshi Road, Guangzhou, People’s Republic of China. Accordingly, Power Test & Research Institute of Guangzhou is removed from the Unverified List. For a full list of Unverified Parties, refer to the published regulation.
12. December 2003 Wassenaar Arrangement Plenary Agreement Implementation: Categories 1, 2, 3, 4, 5, 6 and 7 of the Commerce Control List, and Reporting Requirement; and Interpretation Regarding NUMA Technology; Final Rule (69 FR 23598 April 29, 2004)
Commentary: The Bureau of Industry and Security (BIS) has published a final rule revising certain entries controlled for national security reasons in Categories 1, 2, 3, 5 Part I (telecommunications), 5 Part II (information security), 6, and 7 to conform with changes in the List of Dual–Use Goods and Technologies 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). The Wassenaar Arrangement focuses on implementation of effective export controls on strategic items with the objective of improving regional and international security and stability.
The highlights in Categories 3, 4, 5, and 6 are:
Category 3 – Electronics. In ECCNs 3A001.b.1.a.1, 3A001.b.3, 3A001.b.4.b, 3B002.a and 3E003.g, the parameter was changed from 31 GHz to 31.8 GHz. The entry for microwave monolithic integrated circuits (MMIC) power amplifiers in ECCN 3B001.b.2 has been completely rewritten with six subparagraphs including frequencies and power controls. The entry for microwave transistors in ECCN 3B001.b.3 has been completely rewritten with five subparagraphs including frequencies and power controls. The entry for microwave solid state amplifiers in ECCN 3B001.b.4 has been completely rewritten with six subparagraphs including frequencies and power controls. The entry for microwave "assemblies" capable of operating at frequencies exceeding 31 GHz in ECCN 3A001.b.6 has been deleted. The description of frequency synthesized signal generators in ECCN 3A002.d has been amended by changing subparagraph 1 that controls items exceeding 31.8 GHz but not exceeding 43.5 GHz and rated to generate a pulse duration of less than 100 ns and adding a new subparagraph 2 controlling items with a maximum synthesized frequency exceeding 43.5 GHz. A new entry has been created, ECCN 3A003, adding a control on spray cooling thermal management systems.
In addition, there were a number of changes to the controls on semiconductor manufacturing equipment controlled under ECCN 3B001. In 3B001.a, .b, .c, .d, .e, and .f, the term “Stored program controlled" was deleted. The entry for 3B001.a.1 was rewritten for equipment designed for epitaxial growth to include new sub-paragraphs. The entry for equipment with cassette-to-cassette operation and load-locks in 3B001.d was modified and subparagraph b controlling equipment for generating less than 0.04 particles/cm² with a measurable particle size greater than 0.1mm in diameter was eliminated. The controls on "Stored program controlled" test equipment, specially designed for testing finished or unfinished semiconductor devices in 3B002 were changed from 31 GHz to 31.8 GHz and from 333 MHz to 667 MHz.
Changes to software included a major revision to ECCN 3D003, which formerly controlled computer-aided-design (CAD) "software". This entry has been rewritten to control “physics-based simulation ‘software’ specially designed for the ‘development’ of lithographic, etching or deposition processes for translating masking patterns into specific topographical patterns in conductors, dielectrics or semiconductor materials”. A new entry, 3D004, was added for "Software" specially designed for the "development" of the spray cooling thermal management systems controlled by 3A003.
In the Technology controls, ECCN 3E003.b was modified to include a new note explaining that this entry does not control technology for high electron mobility transistors (HEMT) operating at frequencies lower than 31.8 GHz and hetero-junction bipolar transistors (HBT) operating at frequencies lower than 31.8 GHz.
Category 4 – Computers. ECCN 4A002 which controlled "Hybrid computers" and "electronic assemblies" and specially designed components was deleted. The rule also adds a paragraph to Interpretation 12 “Computers” to provide guidance as to how to calculate the Composite Theoretical Performance (CTP) for computer systems with “non-uniform memory access” (NUMA) architecture, and to define NUMA.
Category 5 Part 1 – Telecommunications. The big change in telecommunications occurred in ECCN 5B001.b.1, 5D001.d.1, and 5E001.c.1 which changed the control on equipment, software, or technology for the development or production of equipment employing digital techniques designed to operate at a "total digital transfer rate" exceeding 1.5 Gbit/s. The new control parameter is 15 Gbit/s and the term “Asynchronous Transfer Mode” has been deleted. In addition, in ECCN 5B001.b, 5D001.d, and 5E001.c the term “Stored program controlled" was deleted. The control parameter in 5E001.c.4.b was changed from 31 GHz to 31.8 GHz.
Category 5 Part 2 – Information Security. ECCN 5A002.a.7 which controlled items designed or modified to provide certified or certifiable "multilevel security" or user isolation at a level exceeding Class B2 of the Trusted Computer System Evaluation Criteria (TCSEC) or equivalent was deleted.
Category 6 – Sensors and Lasers. The entry for towed acoustic hydrophone arrays with hydrophone group spacing of less than 12.5 m controlled under ECCN 6A001.a.2.b.1 was amended to control hydrophone group spacing of less than 12.5 m or able to be modified to have hydrophone group spacing of less than 12.5 m.
The entry for video cameras incorporating solid state sensors, having a peak response in the wavelength range exceeding 10nm, but not exceeding 30,000 nm controlled under 6A003.b.1 was changed from “any of the following” to “having all of the following”. Other amendments included renumbering the sub-paragraphs and adding a new Technical Note 2 that says, “For the purpose of this entry, camera tracking data is the information necessary to define camera line of sight orientation with respect to the earth. This includes: 1) the horizontal angle the camera line of sight makes with respect to the earth's magnetic field direction and; 2) the vertical angle between the camera line of sight and the earth's horizon.”
The entry for individual, multiple-transverse mode semiconductor "lasers" controlled under 6A005.b.2 was changed from “having all of the following” to “any of the following”. Other amendments included rewriting sub-paragraphs a. and b. and adding a new sub-paragraph c. Thus, the control for individual, multiple-transverse mode semiconductor "lasers" controlled under 6A005.b.2 now reads as follows:
Individual, multiple-transverse mode semiconductor "lasers", having any of the following:
a. A wavelength of less than 1400 nm, and having an average or CW output power exceeding 10W;
b. A wavelength equal to or greater than 1400 nm and less than 1900 nm, and having an average or CW output power exceeding 2.5 W; or
c. A wavelength equal to or greater than 1900 nm and having an average or CW output power exceeding 1 W.
The entry for individual arrays of individual semiconductor "lasers", controlled under 6A005.b.3 was rewritten and now includes a new paragraph c. Thus, ECCN 6A005.b.3 now controls:
Individual semiconductor "laser" arrays, having any of the following:
a.A wavelength of less than 1400 nm, and having an average or CW output power exceeding 80 W;
b.A wavelength equal to or greater than 1400 nm and less than 1900 nm, and having an average or CW output power exceeding 25 W; or
c.A wavelength equal to or greater than 1900 nm, and having an average or CW output power exceeding 10 W.
A new entry was created in ECCN 6A005.b.4 for array stacks of semiconductor "lasers" containing at least one array that is controlled under 6A005.b.3.
ECCN 6A006.a, magnetometers, was amended to include “triaxial fluxagate”. ECCN 6E003.f which controls technology for the “development” or “production” of fluxgate “magnetometers” or fluxgate “magnetometer” systems was amended to refer to “non-triaxial fluxgate”.
In addition, this rule adds a paragraph to Interpretation 12 “Computers” to provide guidance as to how to calculate the Composite Theoretical Performance (CTP) for computer systems with “Non-uniform memory access” (NUMA) architecture, and to define NUMA. In the CTP formula found in Supplement No. 1 to part 774, Category 4, there are two ways to calculate the CTP values of computers with multiple processors: the shared memory and non-shared memory methods. The use of either one of these two methods was well understood back in the early 1990's when computers were either symmetric multi-processor (SMP) systems or massively parallel systems. With the advancement of high-performance and relatively inexpensive microprocessors, NUMA has emerged as a popular computer architecture.
13. Revision of Export and Reexport Restrictions on Libya; Interim Rule (69. FR 23626 April 29, 2004)
Commentary: The Bureau of Industry and Security (BIS) has published an interim rule with a request for comments amending the Export Administration Regulations (EAR) to implement the President’s April 23, 2004, decision to revise United States sanctions against Libya. This rule also implements the transfer to the Department of Commerce from the Department of Treasury of the licensing jurisdiction of exports to Libya of items subject to the EAR. Written comments regarding this interim rule must be received on or before June 1, 2004.
Under the new policy established by this rule, BIS will require a license for the export or reexport of most items on the Commerce Control List (CCL) to Libya. BIS's new licensing requirements and policies for Libya are as follows:
License Requirements
· Items subject to the EAR but not listed on the Commerce Control List (CCL) (i.e., EAR99 items) are generally not subject to a license requirement except as defined in the end-user and end-use controls set forth in Part 744 of the EAR.
·Items controlled by the multilateral export control regimes [i.e., items controlled for national security (NS), missile technology (MT), chemical and biological weapons (CB), and nuclear nonproliferation (NP) reasons] on the CCL require a license to Libya, as do items controlled for crime control (CC) and regional stability (RS) reasons.
·Libya remains on the list of designated state sponsors of terrorism. As a result, most items controlled for anti-terrorism (AT) reasons will continue to require a license for export or reexport to Libya.
· Additionally, certain categories of items controlled for reasons not included on the Country Chart in Part 738 of the EAR [e.g., encryption (EI), short supply (SS), Chemical Weapons (CW), Computers (XP) and Significant Items (SI)] also require a license for export or reexport to Libya.
License Exceptions
· Libya remains in Country Groups E:1, D:2, D:3 and D:4. It has been removed from Country Group E:2.
·As a result, the following license exceptions may be available in whole or in part: TMP, GOV, GFT, TSU, BAG, RPL, and AVS.
· A specific transaction is eligible for a License Exception only if it satisfies all of the terms and conditions of the relevant License Exception and is not excluded by any of the restrictions that apply to all License Exceptions, as set forth in the EAR.
Licensing Policy
License applications for exports or reexports to Libya will be reviewed pursuant to applicable licensing policies in the EAR, as follows:
Chemical/Biological
· Items controlled for chemical/biological (CB) reasons on the CCL and destined to Libya will be reviewed under a general policy of denial.
Nuclear Nonproliferation
·Items controlled for nuclear nonproliferation (NP) reasons on the CCL and destined to Libya will be reviewed on a case-by-case basis. Items controlled for NP reasons on the CCL and destined to military, police, intelligence or other sensitive end-users in Libya will generally be denied.
National Security
· Items controlled for national security (NS) reasons on the CCL destined to Libya will be reviewed on a case-by-case basis. Items controlled for NS reasons on the CCL and destined to military, police, intelligence or other sensitive end-users in Libya will generally be denied.
·Items designated as NS Column 1 in the Country Chart column of the License Requirements section of the ECCN on the CCL and controlled by equipment or material entries ending in the number 18 that are destined to Libya will be reviewed under a general policy of denial.
Missile Technology
· Items controlled for missile technology (MT) reasons on the CCL and destined to Libya will be reviewed under a general policy of denial.
Cryptographic, Cryptoanalytic, and Cryptologic items
·Cryptographic, cryptoanalytic and cryptologic items destined to Libya will be reviewed under a general policy of denial. Such items contain an AT column 1 and an NS Column 1 or NS column 2 in the Country Chart of the License Requirements section of an ECCN on the CCL.
Computers
·Computers with a composite theoretical performance (CTP) of 6 million theoretical operations per second (MTOPs) or more will be reviewed on a case-by-case basis. Items with a CTP of 6 MTOPs or more and destined to military, police, intelligence or other sensitive end-users in Libya will generally be denied.
Crime Control
· Items controlled for crime control (CC) reasons on the CCL and destined to Libya will be generally be denied based on evidence that the government has violated internationally recognized human rights.
Civil Aircraft
·The Administration intends that any license applications for the export of civil aircraft (powered and unpowered), helicopters, engines, and related spare parts and components to Libya will be considered on a case-by-case basis, with no presumption of denial.
The Department of the Treasury's Office of Foreign Assets Control (OFAC) continues to maintain certain financial restrictions, including blocking the assets of named persons. Specific licenses previously issued by OFAC will be valid until the date specified on the license or May 1, 2005, if no expiration date is specified.
11. Amendment to the Export Administration Regulations: Correction to ECCN 1C355 on the Commerce Control List(69 FR 24507 on May 4, 2004)
Commentary: The Bureau of Industry and Security (BIS) has amended the Export Administration Regulations (EAR) to correct the description of certain precursor chemicals on the Commerce Control List to make it consistent with the list of “Schedule 2” chemicals under the Chemical Weapons Convention (CWC). Specifically the rule corrects Export Control Classification Number (ECCN) 1C355.a.2.a to be consistent with the description in Schedule 2.B(4) of the CWC, set forth in Supplement No. 1 to Part 745 of the EAR, by changing “* * * with no additional carbon atoms in the structure,” to “* * * but not further carbon atoms” at the end of the description. This correction is necessary to clarify that all Schedule 2.B(4) chemicals are controlled for export under ECCN 1C355. This final rule also deletes the subheading “Family” of ECCN 1C355.a.2.a to correct the description of this category of chemicals.
12. Revisions to the Export Administration Regulations Based on the 2003 Missile Technology Control Regime Plenary Agreements (69 FR 24508 May 4, 2004)
Commentary: The BIS has amended the EAR to reflect changes to the Missile Technology Control Regime (MTCR) Annex agreed to at the September 2003 Plenary in Buenos Aires, Argentina. All revisions and additions are made to ensure that items that can be utilized in missile of MTCR concern are appropriately controlled. Specifically, the following ECCNs are affected:
1B118: Changing the 1B118.b parameter from reading “Capability to open the mixing chamber” to read “A single rotating shaft which oscillates and has kneading teeth/pins on the shaft as well as inside the casing of the mixing chamber”
1C111: Adding Inhibited Red Fuming Nitric Acid (IRFNA) to 1C111.a.3.e.
5A101:
- Clarifying heading to include the phrase “including ground equipment”.
- Revising telemetry controls to capture only items designed or modified for missile or UAV systems capable of traveling at least 300km.
- Amending the technical note to add equipment that is not controlled by this entry, including: equipment designed or modified for manned aircraft or satellites; ground based equipment for terrestrial or marine applications; and equipment designed for commercial, civil, or safety of life (e.g. data integrity or flight safety) Global Navigation Satellite System services.
- Adding a note to specify, “Item 5A101 does not include items not designed or modified for unmanned aerial vehicles or rocket systems (including ballistic missile systems, space launch vehicles, sounding rockets, cruise missile systems, target drones, and reconnaissance drones) capable of maximum “range” equal to or greater than 300km (e.g., telemetry circuit cards limited by design to reception only and designed for use in personal computers).”
9A115: Amending the heading to clarify that this entry captures equipment used in association with UAV’s capable of traveling at least 300km.
9A120: Adding this ECCN to capture UAVs designed or modified for aerosol delivery.
13. Protective Equipment Export License Jurisdiction (69 FR 25312 May 6, 2004)
Commentary: BIS published a final rule revising the CCL to conform the description of certain protection and detection equipment to that found in the Wassenaar Arrangement List of Dual Use Goods and Technologies (the Dual Use List), to impose national security and anti-terrorism license requirements on those items, and to impose antiterrorism controls on certain items that are excluded from the Dual Use List.
BIS generally has export licensing authority over items having predominantly civil uses even if they also may be used by the military. Prior to publication of this rule ECCN 1A004 referred readers to the Department of States Directorate for Defense Trade Controls with regard to “protective and detection equipment and components, not specially designed for military use.”
This rule revises ECCN 1A004 to emulate entry 1.A.4 on the Dual Use List, including an exclusion note from that entry. This rule applies national security (NS2) and antiterrorism (AT1) controls to items covered by ECCN 1A004, including gas masks, filter canisters, decontamination equipment, protective suits, gloves and shoes specially designed or modified for defense against biological agents or radioactive materials adapted for use in war or chemical warfare agents, and certain nuclear, chemical, and biological detection systems. The national security controls require a license for export or reexport to all destinations except Country Group A:1 and cooperating countries as listed in 15 CFR part 740, supp. No. 1.
This rule also creates a new ECCN 1A995, that imposes antiterrorism controls (AT1) on personal radiation monitoring dosimeters and equipment limited by design or function to protect against hazards specific to civil industries, such as mining, quarrying, agriculture, pharmaceuticals, medical, veterinary, environmental, waste management, or to the food industry that are excluded from 1A004, requiring a license for export or reexport to countries designated by the Secretary of State as state sponsors of international terrorism. New ECCN 1A995 includes a note that items for protection against chemical or biological agents that are consumer goods, packaged for retail sale or personal use and medical products are excluded from 1A995, and are EAR99. EAR99 items are not listed in any specific entry on the CCL, but are subject to other provisions of the EAR, including those that impose a license requirement based on recipient or end-use, those that apply to embargoed destinations, the prohibitions on violating denial orders, and export clearance requirements.
14. December 2003 Wassenaar Arrangement Plenary Agreement Implementation: Categories 1, 2, 3, 4, 5, 6 and 7 of the Commerce Control List, and Reporting Requirement; and Interpretation Regarding NUMA Technology; Correction (69 FR 25314 May 6, 2004)
Commentary: BIS published a final rule in the Federal Register of April 29, 2004 that revised certain entries to conform with changes in the List of Dual–Use Goods and Technologies maintained and agreed to by governments participating in the Wassenaar Arrangement. This final rule corrects one error that appeared in ECCN 3A001.
Specifically it expands the Related Controls under ECCN 3A001 to read: “(1) The following commodities are under the export licensing authority of the Department of State, Office of Defense Trade Controls (22 CFR part 121) when “space qualified” and operating at frequencies higher than 31.8 GHz: helix tubes (traveling wave tubes (TWT)) defined in 3A001.b.1.a.4.c; microwave solid state amplifiers defined in 3A001.b.4.b traveling wave tube amplifiers (TWTA) defined in 3A001.b.8; and derivatives thereof; (2) “Space qualified” and radiation hardened photovoltaic arrays, as defined in 3A001.e.1.c, having silicon cells or having single, dual or triple junction solar cells that have gallium arsenide as one of the junctions, are subject to the export licensing authority of the Department of Commerce. All other “space qualified” and radiation hardened photovoltaic arrays defined in 3A001.e.1.c and spacecraft/satellite concentrators and batteries are under the export licensing authority of the Department of State, Office of Defense Trade Controls (22 CFR part 121). See also 3A101, 3A201, and 3A991.”
15. General Order Implementing Syria Accountability and Lebanese Sovereignty Act of 2003 (69 FR 26766 May 14, 2004)
Commentary: BIS amended the EAR by adding a new General Order No. 1 to Supplement No. 1, Part 736. Section 5(a)(1) of the Syria Accountability and Lebanese Sovereignty Act of 2003 (Pub. L. 108-175, codified as a note to 22 U.S.C. 2151) (the SAA), requires a prohibition on the export to Syria of all items on the Commerce Control List (15 CFR 774) (CCL). The SAA also requires that the President impose two or more of the six additional sanctions set forth in sections 5(a)(2)(A)-(F). One of the additional sanctions chosen by the President and described in section 5(a)(2)(A) is a prohibition on the export to Syria of products of the United States, other than food and medicine. The President has also exercised national security waiver authority pursuant to section 5(b) of the SAA for certain transactions.
Pursuant to this General Order, exports and reexports of all items subject to the EAR, except food and medicine classified as EAR99 and “deemed export” and “deemed reexport” of EAR99 technology or source code, require a license to Syria (medicine is defined in part 772 of the EAR). All license applications for exports or reexports to Syria are subject to a general policy of denial, other than transactions described below.
BIS may consider, on a case-by-case basis, license applications for exports and reexports of items necessary to carry out the President's constitutional authority to conduct U.S. foreign affairs and as Commander-in-Chief, including those exports and reexports of items necessary for the performance of official functions by United States Government personnel abroad such as:
·items in support of activities, diplomatic or otherwise, of the United States Government (to the extent that regulation of such exportation or reexportation would not fall within the President's constitutional authority to conduct the nation's foreign affairs); medicine (on the CCL) and medical devices (both as defined in part 772 of the EAR);
· parts and components intended to ensure the safety of civil aviation and the safe operation of commercial passenger aircraft; aircraft chartered by the Syrian Government for the transport of Syrian Government officials on official Syrian Government business;
· telecommunications equipment and associated computers, software and technology;
· and items in support of United Nations operations in Syria.
The total dollar value of each approved license for aircraft parts for flight safety normally will be limited to no more than $2 million over the 24-month standard license term, except in the case of complete overhauls. In addition, consistent with part 734 of the EAR, the following are not subject to this General Order: informational materials in the form of books and other media; publicly available software and technology; and technology exported in the form of a patent application or an amendment, modification, or supplement thereto or a division thereof (see 15 CFR 734.3(b)(1)(v) and 734.3(b)(2) and (3)).
This General Order makes inapplicable for Syria all License Exceptions set forth in part 740 of the EAR, except as described below.
Pursuant to the President's exercise of the national security waiver authority in section 5(b) of the SAA, the following License Exceptions, or portions thereof, are available: TMP (15 CFR 740.9(a)(2)(viii) only) for items for use by the news media; GOV (15 CFR 740.11(b)(2)(i) and (ii) only) for items for personal or official use by personnel and agencies of the U.S. Government; TSU (15 CFR 740.13(a), (b), and (c) only) for operation technology and software, sales technology and software updates; BAG (15 CFR 740.14) for exports of items by individuals leaving the United States as personal baggage; and AVS (15 CFR 740.15(a)(4) only) for the reexport of civil aircraft on temporary sojourn to Syria. Shotguns and shotgun shells described in 15 CFR 740.14(e) are not permitted to be exported to Syria under License Exception BAG.
This General Order also revokes the authority to export or reexport to Syria under existing licenses. However, exporters may submit new license applications for any transaction that they believe is eligible for case-by-case review based on this General Order. License conditions requiring written U.S. Government authorization for the reexport, transfer, or resale of items already exported or reexported remain in effect, and requests for BIS authorization to reexport, transfer, or sell such items will require interagency approval.
License applications for “deemed exports” and “deemed reexports” as described in 15 CFR 734.2(b) will be reviewed on a case-by-case basis. “Deemed exports” and “deemed reexports” involving or technology or source code subject to the EAR but not listed on the CCL do not require a license to Syrian foreign nationals.
16. Revision of Export and Reexport Restrictions on Cuba(69 FR 34565 on June 22, 2004)
Commentary: The Bureau of Industry and Security (BIS) has published a final rule placing new limits on gift parcels and personal baggage and revised the licensing policy regarding vessels going to Cuba. These changes are being made to implement the President’s May 6, 2004 direction with respect to certain recommendations in the May 2004 Report to the President from the Commission on Assistance to a Free Cuba.
Specifically, the rule narrows the list of eligible commodities that can be included in gift parcels to Cuba under License Exception GFT. It also limits the delivery of gift parcels to Cuba containing items other than food to once per month per household, instead of once per month per individual recipient.
Finally, the rule makes all commodities listed on the Commerce Control List (CCL) ineligible for export or reexport to Cuba under the gift parcel provisions of License Exception GFT. For all other destinations, only commodities listed on the CCL with a reason for control based on one or more multilateral export control regimes (i.e., the Wassenaar Arrangement (reason for control: National Security—NS); the Nuclear Supplier’s Group (reason for control: Nuclear Nonproliferation—NP; the Australia Group (reasons for control Chemical and Biological Weapons—CB); and the Missile Technology Control Regime (reason for control: Missile Technology—MT) are ineligible for inclusion in a gift parcel sent under this license exception. This rule does not change the requirement that commodities sent in gift parcels be of a type and in quantities normally given as gifts between individuals and that non-food items be limited in value to $200 per gift parcel.
17. Revisions to the Export Administration Regulations To Remove Certain Regional Stability and Crime Control License Requirements to New North Atlantic Treaty Organization (NATO) Member Countries (69 FR 36009 May June 28, 2004)
Commentary: The BIS has amended the Export Administration Regulations (EAR) to remove the license requirements for certain regional stability items and for certain crime control items destined to Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia to reflect the accession of those countries to NATO on March 29, 2004. The rule also removes the “X” from the RS:2 column and from all CC columns for these countries in the Commerce Country Chart in Supplement No. 1 to Part 738 of the EAR.
In addition, this rule revises the definition of NATO in Part 772 of the EAR, by adding the 7 countries that recently joined NATO, plus Czech Republic, Hungary, and Poland, which were inadvertently not added to the definition of NATO in the regulation published on March 18, 2002 (67 FR 11896). This rule also amends the definition of COCOM (Coordinating Committee on Multilateral Export Controls) by replacing the phrase “COCOM member included the NATO countries, except Iceland, plus Japan and Australia” with a specific list of countries that were members of COCOM, to clarify that the membership of NATO at the time COCOM existed was different than it is today.
This rule also clarifies License Exception TSR eligibility in the License Exception sections of two Export Control Classification Numbers (ECCNs) 9D018 and 9E018 in the Commerce Control List. The TSR paragraph for these ECCNs state, “Yes for Australia, Japan, New Zealand, and NATO.” However, TSR is only available for export and reexport to countries listed in Country Group B. Therefore, the statement of eligibility for TSR for these ECCNs will be revised to read, “Yes for Australia, Japan, New Zealand, and NATO countries that are also listed in Country Group B of supplement No. 1 to Part 740 of the EAR.”
18. Revision to the Export Administration Regulations To Remove Certain Regional Stability and Crime Control License Requirements to New North Atlantic Treaty Organization (NATO) Member Countries(69 FR 41879 on July 12, 2004)
Commentary: On June 28, 2004 (69 FR 36009), the Bureau of Industry and Security (BIS) revised the Export Administration Regulations (EAR) to remove the license requirements for certain regional stability items and for certain crime control items destined to those countries who entered NATO on March 29, 2004. Inadvertently, the notice failed to remove the controls for both Bulgaria and Latvia. This rule corrects the error by removing the “X” from the RS:2 column and from all CC columns for both Bulgaria and Latvia in the Commerce Country Chart in Supplement No. 1 to Part 738 of the EAR.
19. Revocation of General Order No. 3 Which Imposed License Requirements on Shaykh Hamad bin Ali bin Jaber Al-Thani and Entities Related to or Controlled by Him (69 FR 42332 July 15, 2004)
Commentary: The BIS has published a final rule revoking General Order No. 3 of the EAR which imposed a license requirement for exports and reexports of all items on the Commerce Control List destined to or for Shaykh Hamad bin Ali bin Jaber Al-Thani and listed entities related to or controlled by him. General Order No. 3 was imposed on Shaykh Hamad bin Ali bin Jaber Al-Thani on December 7, 2000 following his violation of the United Nationals Security Council resolution restricting trade with Iraq. This revocation reflects the changed circumstances in Iraq and is consistent with changes in U.S. export control policies concerning Iraq and actions taken by the United Nations Security Council with respect to the embargo against Iraq. This rule also removes Section 744.15 of the EAR, which provided a cross-reference to General Order No. 3.
20. Addition of Persons to the Unverified List, Guidance to Exporters as to “Red Flags,” and Criteria for Listing of Unverified Persons in Foreign Countries (69 FR 42652 July 16, 2004)
Commentary: BIS has published a notice advising exporters that the Unverified List, established on June 14, 2002 to list persons in foreign countries who were parties to past export transactions where pre-license checks or post-shipment versions could not be conducted for reasons outside the control of the U.S. Government will now include persons in foreign countries in situations where BIS is not able to verify the existence or authenticity of the end-user, intermediate consignee, ultimate consignee, or other party to an export transaction.
The notice also adds five persons to the Unverified List and advises exporters that the involvement of these persons as a party to a proposed transaction constitutes a “red flag.” The five entities include Jetpower Industrial Ltd, Room 311, 3rd Floor, Wing On Plaza, 62 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong Special Administrative Region; Onion Enterprises Ltd., Room 311, 3rd Floor, Wing On Plaza, 62 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong Special Administrative Region; Lucktrade International, Room 311, 3rd Floor, Wing On Plaza, 62 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong Special Administrative Region; Litchfield Co. Ltd, Room 311, 3rd Floor, Wing On Plaza, 62 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong Special Administrative Region; and Sunford Trading Ltd, Unit 2208, 22/F, 118 Connaught Road West, Hong Kong Special Administrative Region.
A “red flag” now exists for transactions involving these persons due to their inclusion on the Unverified List. As a result, exporters have an affirmative duty to inquire, verify, or otherwise substantiate the proposed transaction to satisfy themselves that the transaction does not involve a proliferation activity prohibited in 15 CFR Part 744, and does not violate other provisions of the EAR.
21 Revisions of Export Licensing Jurisdiction of Certain Types of Energetic Material and Other Chemicals Based on Review of the United States Munitions List (69 FR 42862 July 19, 2004)
Commentary: BIS has published a final rule amending the EAR to conform to the complementary rule published by the Department of State (67 FR 70839, November 27, 2002) DTC which moved export licensing jurisdiction of certain types of energetic materials and other chemicals from the Department of State, Directorate of Defense Trade Controls (DTC), to the Department of Commerce, Bureau of Industry and Security (BIS), and to move such jurisdiction for other chemicals from BIS to DTC. For a complete list of chemicals added and removed, see the notice cited above.
22. Revisions to the Unverified List, Guidance as to “Red Flags” Under Supplement No. 3 to 15 CFR Part 732 (69 FR 45008 July 28, 2004)
Commentary: BIS has published a notice revising the Unverified List to remove five entities based upon recently conducted post-shipment verifications (PSVs). The entities are: Shaanxi Telecom Measuring Station, 39 Jixiang Road, Yanta District Xian, Shaanxi, People’s Republic of China; Yunma Aircraft Mfg., Yaopu Anshun, Guizhou, People’s Republic of China; Civil Airport Construction Corporation, 111 Bei Sihuan Str. East, Chao Yang District, Beijing, People’s Republic of China; Huabei Petroleum Administration Bureau Logging Company, South Yanshan Road, Ren Qui City, Hebei, People’s Republic of China; and Beijing San Zhong Electronic Equipment Engineer Co., Ltd., Hai Dian Fu Yuay, Men Hao 1 Hao, Beijing, People’s Republic of China.
23. 15 CFR Parts 732, 738, 740 et al. Export and Reexport Control for Iraq; Interim Final Rule (69 FR 46070 July 30, 2004)
Commentary: BIS published an interim final rule amending the EAR to transfer jurisdiction to the Department of Commerce from the Department of Treasury for the licensing responsibility for exports and reexports to Iraq of items subject to the EAR. In addition, a license will be required for certain transfers within Iraq of items subject to the EAR. This rule is consistent with United Nations Security Council Resolutions 1483(2003) and 1546 (2004), which lifted the comprehensive United Nations trade embargo imposed on Iraq but retained an embargo on arms and related material and their means of production.
The new Iraq export licensing policy significantly reduces the level of control over commercial exports to Iraq while retaining restrictions on the export of multilaterally-controlled items and other sensitive items to Iraq in keeping with Iraq's new economic and security status. This rule is designed to address two significant foreign policy goals with respect to Iraq. In particular, this rule furthers the goal of ensuring that exports and reexports of controlled items destined to civil infrastructure rebuilding do not suffer undue licensing delays. At the same time, this rule revises section 746.3 of the EAR and retains substantial restrictions on exports to Iraq destined for inappropriate end-users or end-uses. In addition, this rule addresses certain transactions involving the transfer of items subject to the EAR within Iraq.
Under this rule, items subject to the EAR but not listed on the Commerce Control List (15 CFR part 774) (CCL) (i.e., EAR99 items) will generally not be subject to a license requirement except pursuant to the end-user and end-use controls set forth in part 744 of the EAR and revised section 746.3 of the EAR. Items controlled only for anti-terrorism (AT) reasons on the CCL, except for items controlled under six Export Control Classification Numbers (ECCNs), will also not be subject to a licensing requirement, except for the end-use and end-user requirements noted above. The six ECCNs controlled for AT reasons only for which licensing requirements are imposed by this rule are:
· 0B999 (Specific processing equipment such as hot cells and glove boxes suitable for use with radioactive materials),
· 0D999 (Specific software for neutronic calculations, radiation transport calculations and hydrodynamic calculations/modeling),
· 1B999 (Specific processing equipment such as electrolytic cells for fluorine production and particle accelerators),
· 1C992 (Commercial charges containing energetic materials, n.e.s.),
·1C999 (Specific Materials, n.e.s.), and
· 6A992 (Optical Sensors, not controlled by 6A002).
Please note that this rule retains AT controls for items controlled under ECCNs 1C995 (Certain mixtures and testing kits) and 1C997 (Ammonium Nitrate).
As a result, in most instanses, the new policy will allow the export or reexport to Iraq, or the transfer within Iraq, without a license, of items classified as EAR99 or controlled only for AT reasons.
Also, the de minimis rules applicable to Iraq are amended to provide generally that reexports of items to Iraq from abroad are subject to the EAR only when U.S.-origin controlled content in such items exceeds 25% (as opposed to the existing 10%).
This rule retains license requirements for the export or reexport of items on the multilateral export control regime lists, the Wassenaar Arrangement, the Nuclear Suppliers' Group, the Australia Group and the Missile Technology Control Regime, and items controlled for crime control (CC) or regional stability (RS) reasons. These license requirements are set forth in part 742 of the EAR and are reflected in the relevant columns of the Country Chart in Supplement No. 1 to part 738 of the EAR. Certain categories of items that are controlled for reasons not included on the Country Chart (e.g., encryption (EI), short supply (SS), and Chemical Weapons (CW)) also require a license for export or reexport to Iraq or transfer within Iraq.
A license is required for the transfer within Iraq of any item subject to the EAR exported or reexported pursuant to a specific license issued by the Department of the Treasury or a Department of Commerce specific license or License Exception.
Section 746.3 of this rule imposes a license requirement for the export, reexport, or transfer of items subject to the EAR if, at the time of the export, reexport, or transfer, you know, have reason to know, or are informed by BIS that the item will be, or is intended to be, used in Iraq for a “military end-use” or by a “military end-user”, as defined in that section. This license requirement does not apply to exports, reexports, or transfers of items for the official use by personnel or agencies of the U.S. Government or exports, reexports, or transfers to the Interim Government of Iraq or the Multinational Force in Iraq. This new license requirement is in addition to the existing license requirements established pursuant to the Enhanced Proliferation Control Initiative (EPCI), as set forth in part 744 of the EAR. The EPCI requirements will now also apply to the transfer within Iraq of any item subject to the EAR, if, at the time of the transfer, you know, have reason to know, or are informed by BIS that the item will be used in the design, development, production or use of weapons of mass destruction or the means of their delivery. Pursuant to Section 746.3(b)(4), applications for the export or reexport to Iraq, or transfer within Iraq, of items that will be, or are intended to be, used for a “military end-use” or destined to a “military end-user” will be subject to a policy of denial.
In addition, transfers within Iraq to designated terrorists or terrorist organizations, as set forth in Sections 744.12, 744.13, or 744.14 of the EAR, and transfers to any persons referenced in new section 744.18 of the EAR, will require a license.
In addition to the license requirements described above, items on the CCL controlled for United Nations (UN) reasons (including shotgun shells controlled under ECCN 0A986) will require a license for export or reexport to Iraq or transfer within Iraq, except exports, reexports or transfers to the Interim Government of Iraq or the Multinational Force in Iraq.
In this rule, BIS also deletes from the CCL the entry for ECCN 6A018, “Magnetic, pressure, and acoustic underwater detection devices specially designed for military purposes and controls and components.” References to ECCN 6A018 in entries for ECCNs 6E001 and 6E002 also will be removed. BIS has determined that no items subject to the EAR are controlled under this entry. Such items are subject to the export licensing authority of the U.S. Department of State Division of Defense Trade Controls.
Except as set forth in revised Section 746.3, license applications for exports or reexports to Iraq and certain transfers within Iraq will be reviewed on a case-by-case basis pursuant to applicable licensing policies set forth in parts 742, 744 or elsewhere in the EAR. Such review will be conducted consistent with UNSC Resolutions 1483 and 1546, and relevant resolutions, including UNSC Resolutions 687 and 707. UNSC Resolution 1483 reaffirms Iraq's disarmament obligations contained in prior UNSC resolutions relating to nuclear, chemical and biological weapons as well as ballistic missiles (defined for Iraq as those capable of a range greater than 150 kilometers). UNSC Resolutions 1483 and 1546 also retain restrictions on the sale or supply to Iraq of arms and related materiel and their means of production, and limit Iraq's civil or military nuclear activity, except for use of isotopes for medical, industrial or agricultural purposes. UNSC Resolution 1546 affirms these restrictions, while permitting exports, reexports, and transfers to the Interim Government of Iraq or the Multinational Force in Iraq.
CB-controlled exports and reexports to Iraq, and transfers within Iraq, will be reviewed on a case-by-case basis. Unless the export, reexport, or transfer is determined to contribute to the building of Iraqi civil infrastructure, there will be a general policy of denial for CB-controlled items.
NP-controlled exports and reexports to Iraq, and transfers within Iraq, will be reviewed on a case-by-case basis. Unless the export, reexport, or transfer is determined to contribute to the building of Iraqi civil non-nuclear infrastructure, there will be a general policy of denial for subsystems or components or any nuclear weapons research, development, support, or manufacturing facilities.
NS-controlled machine tool equipment, software and technology exports and reexports to Iraq, and transfers within Iraq, will be reviewed on a case-by-case basis. Unless the export, reexport, or transfer is determined to contribute to the building of Iraqi civil infrastructure, there will be a general policy of denial for items for the production, research, design, development, support, maintenance or manufacture of Iraqi weapons of mass destruction or ballistic missiles (for Iraq, defined as those with a range of 150 km or greater) or arms and related materiel.
MT-controlled exports and reexports to Iraq, and transfers within Iraq, will be reviewed on a case-by-case basis. Unless the export, reexport, or transfer is determined to contribute to the building of Iraqi civil infrastructure, there will be a general policy of denial for major parts, repair and production facilities related to ballistic missiles with a range greater than 150 kilometers.
As specified in Section 746.3(b)(1), applications for the export or reexport to Iraq, or transfer within Iraq, of items controlled on the Commerce Control List for NS, MT, NP, CW, CB, RS, CC, EI, SI, XP or UN reasons will be subject to a policy of denial if destined for use in Iraqi civil nuclear or military nuclear activity. An exception exists for use of isotopes for medical, industrial or agricultural purposes, which will be reviewed on a case by case basis.
As specified in Section 746.3(b)(2), applications for the export or reexport to Iraq, or transfer within Iraq, of machine tools controlled for NS and/or nuclear non-proliferation reasons, as well as any items controlled for CC or UN reasons (including under ECCN 0A986) or under ECCNs that end in the number “018”, that would make a material contribution to the production, research, design, development, support, maintenance or manufacture of Iraqi weapons of mass destruction or ballistic missiles or arms and related materiel will also be subject to a general policy of denial.
As specified in section 746.3(b)(3), applications for the export or reexport to Iraq and transfer within Iraq, of items controlled for AT reasons under ECCNs 0B999, 0D999, 1B999, 1C992, 1C995, 1C997, 1C999 and 6A992 will be reviewed on a case-by-case basis to determine if they would contribute to the building of Iraqi civil infrastructure. Applications determined not to contribute to the building of Iraqi civil infrastructure will be subject to a general policy of denial.
The rule removes Iraq from Country Group E:1, found in Supplement 1 to part 740. Iraq has been added to Country Group D:1 and remains in Country Groups D:2, D:3 and D:4. Although Iraq currently remains on the list of designated terrorist-supporting countries, the anti-terrorism (AT) controls that apply to such countries under section 6(j) of the EAA will not apply to Iraq pursuant to Presidential Determination 2003-23. Countries in Country Group D:1 are of concern for national security reasons. Countries in Country Groups D:2, D:3 and D:4 are of concern for weapons proliferation reasons. As a result of Iraq's inclusion in Country Groups D:1 to D:4, the following License Exceptions may be available: CIV, CTP, TMP, RPL, GOV, GFT, TSU, BAG, AVS, ENC and KMI. A specific transaction is eligible for a License Exception only if it satisfies all of the terms and conditions of the relevant License Exception and is not excluded by any of the restrictions that apply to all License Exceptions, as set forth in the EAR (including, specifically, section 740.2).
The rule adds Iraq to Computer Tier 3 for exports or reexports of high performance computers under License Exception CTP (section 740.7 of the EAR). Countries in Tier 3 are eligible to receive computers up to and including 190,000 MTOPS (millions of theoretical operations per second) under License Exception CTP. Certain transfers within Iraq of computers up to and including 190,000 MTOPS will now require a license.
The export or reexport to Iraq of high performance computers exceeding 190,000 MTOPS continues to require a license. In addition, transfers within Iraq of computers exceeding 190,000 MTOPS will now also require a license.
This rule further establishes a new part 747 of the EAR entitled Special Iraq Reconstruction License (SIRL). Part 747 authorizes exports or reexports to Iraq, or transfers within Iraq, of items in furtherance of civil reconstruction and other projects funded by specified entities including the United States Government. Also included are projects funded by the United Nations, the World Bank, and the International Monetary Fund, and their affiliated entities (i.e., International Bank for Reconstruction and Development, International Finance Corporation, and United Nations Development Programme) as well as any other entities the U.S. Government may designate. All items subject to the EAR except items controlled for missile technology (MT), nuclear nonproliferation (NP), or chemical and biological weapons (CB) reasons are eligible for export or reexport under a SIRL. Procedures for applying for a SIRL are set forth within the regulation cited above.
24. Disclosure of Government Information(69 FR 49783 on August 12, 2004)
Commentary: The Department of Commerce has published a rule amending the Freedom of Information Act (FOIA) regulations by adding facsimile number (202-482-2552) and an e-mail address ( FOIAAppeals@doc.gov) as methods of transmitting appeals of initial responses to FOIA requests to the Office of General Counsel. The e-mail address is designed specifically to receive FOIA appeals. This amendment will ensure a more uniform and controlled method for the receipt and tracking of FOIA appeals, as well as assist the Office of General Counsel in providing accurate and timely responses.
25. Clarification of Export Controls on Military Vehicles and Parts(69 FR 52991 on August 31, 2004)
Commentary: The Bureau of Industry and Security, Department of Commerce has published a final rule that clarifies the export controls on parts and components of certain military ground vehicles, adds a new class of vehicles to the commerce Control List (CCL) and provides guidance for classifying ground vehicles that are subject to the Export Administration Regulations (EAR) and distinguishing those vehicles from those that are subject to the International Traffic in Arms Regulations.
Specifically, this rule revises Export Control Classification Number (ECCN) 9A018 on the CCL of the EAR to make clear that this ECCN applies to parts and components as well as to vehicles. This rule updates ECCN 9A018 to include unarmed all-wheel drive vehicles capable of off-road use that have been manufactured or fitted to provide a specified level of ballistic protection. This rule also clarifies that ECCN 9A018 does not include vehicles that are on the United States Munitions List (USML).
This rule also revises Interpretation 8 in Part 770 of the EAR, which provides guidance relating to ECCN 9A019.b. Revised Interpretation 8 eliminates explanations of terms that are no longer used in the EAR. It employs language from the Wassenaar Arrangement Munitions List to distinguish military vehicles from civil vehicles. It also provides guidance to distinguish military vehicles from civil vehicles. It also provides guidance to distinguish military vehicles subject to the export licensing jurisdiction of the Directorate of Defense Trade Controls from those subject to the export licensing jurisdiction of the Bureau of Industry and Security.
26. India: Removal of Indian Entity and Revision in License Review Policy for Certain Indian Entities; and a Clarification(69 FR 56693 on September 22, 2004)
Commentary: On January 12, 2004, President George W. Bush announced the Next Steps in Strategic Partnership (NSSP) with India. The Bureau of Industry and Security (BIS) has published a rule implementing three initial steps the United States has agreed to take under the NSSP. These steps are: to remove the Indian Space Research Organization (ISRO) Headquarters, Bangalore from the Department of Commerce Entity List; to remove the export license requirements for items subject to the Export Administration Regulations (EAR) having a classification of EAR99 or a classification where the third through fifth digits of the Export Commodity Classification Number (ECCN) are “999”, e.g. XX999, for the seven (7) ISRO subsidiaries listed on the Entity List; and establish a presumption of approval for all items not controlled for nuclear proliferation reasons going to the “balance of plant” porting of Indian nuclear facilities subject to International Atomic Energy Agency safeguards (Rajasthan 1 & 2 and Tarapur 1 & 2).
27. Effectiveness of Licensing Procedures for Agricultural Commodities to Cuba(69 FR 57894 on September 28, 2004)
Commentary: BIS has published a notice for requesting comments on the effectiveness of licensing procedures set forth in the EAR for the export of agricultural commodities to Cuba set forth in §740.18 of the EAR. Exporters are asked to be as specific as possible. BIS will include a description of these comments in its biennial report to the Congress, required by the Trade Sanctions Reform and Export Enhancement Act of 2000. Comments must be received by October 28, 2004.
28. Effects of Foreign Policy-Based Export Controls(69 FR 57895 on September 28, 2004)
Commentary: 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 comments on how existing foreign policy-based export controls have affected exporters and the general public. Comments are due by November 19, 2004.
29. India: Removal of Indian Entity and Revision in License Review Policy for Certain Indian Entities; and a Clarification; Correction(69 FR 58049 on September 29, 2004)
Commentary: BIS has published a clarification and correction to a rule published by BIS on September 22, 2004 which removed an Indian Entity from the Entity List and revised licensing policies for other Indian entities in the Export Administration Regulations. The September 22nd notice was misprinted, containing typographical errors in the statement of licensing policy with respect to two Indian Department of Atomic Entergy entities that are subject to International Atomic Energy Agency safeguards and in states of Federal Register citations amending the Entity List. Additionally, the preamble in that notice should have stated that the licensing policy for the “balance of plant” portion of Indian nuclear facilities subject to International Atomic Energy Agency safeguards (Rajasthan 1 & 2 and Tarapur 1 & 2) is a presumption of approval for items not multilaterally controlled for nuclear proliferation reasons.
30. India: Removal of Indian Entity and Revision in License Review Policy for Certain Indian Entities; and a Clarification; Correction(69 FR 59303 on October 4, 2004)
Commentary: The Bureau of Industry and Security (BIS) has published typographical corrections in rule document 04-21837 beginning on page 59049 in the issue of September 29, 2004.
31. Nomenclature change: References to Another Agency(69 FR 60545 on October 12, 2004)
Commentary: BIS has published a final rule amending the Export Administration Regulations (EAR) to update certain references to the U.S. State Department’s Directorate of Defense Trade Controls. The EAR contains references to this agency under its current name and under its former name, the Office of Defense Trade Controls. This amendment removes the possibility that a member of the public might think that two difference offices are being referenced.
32. Revised “Knowledge” Definition, Revision of “Red Flags” Guidance and Safe Harbor (69 FR 60829 on October 13, 2004)
Commentary: BIS has published a proposed rule revising the knowledge definition in the EAR to incorporate a “reasonable person” standard and to replace the phrase “high probability” with the phrase “more likely than not.”
Specifically, the proposed rule would amend the definition of knowledge in four ways: incorporating a “reasonable person” standard, replacing the phrase “high probability” with the phrase “more likely than not,” adding the phrase “inter alia” to the description of the facts and circumstances that could make person aware of the existence or future occurrence of a fact, and eliminating the phrase “known to the person” from the sentence in the knowledge definition that states that knowledge may be inferred from “conscious disregard of facts known to the person.”
BIS is also proposing to update and augment the “red flag” guidance and to increase from 12 to 23 the number of circumstances expressly identified as presenting a red flag. Although the “red flags” provide guidance, this rule would also incorporate them by reference into the proposed Safe Harbor and the Internal Compliance Programs requirements of Special Comprehensive Licenses. To clarify the rule the red flags would play under this proposed rule, BIS is proposing to add a statement that the red flags and know your customer guidance do not derogate from obligations imposed elsewhere in the EAR and to remove the statement “This guidance does not change or interpret the EAR” from Supplement No. 3 to Part 732. The 23 proposed red flag are:
1.The customer or purchasing agent is vague, evasive, or inconsistent in providing information about the end-use of a product.
2. The product's capabilities do not fit the buyer's line of business or level of technical sophistication. For example, a customer places an order for several advanced lasers from a facility with no use for such equipment in its manufacturing processes.
3. A request for equipment configuration is incompatible with the stated ultimate destination (e.g., 120 volts for a country with 220 volts).
4. The product ordered is incompatible with the technical level of the country to which the product is being shipped. For example, semiconductor manufacturing equipment would be of little use in a country without an electronics industry.
5. The customer has little background in the relevant business. For example, financial information is unavailable from ordinary commercial sources and the customer's corporate principal is unknown.
6. The customer is willing to pay cash for an expensive item when the normal practice in this business would involve financing.
7. The customer is unfamiliar with the product's performance characteristics, but still wants the product.
8. Installation, testing, training, or maintenance services are declined by the customer, even though these services are included in the sales price or ordinarily requested for the item involved.
9. Terms of delivery, such as date, location, and consignee, are vague or unexpectedly changed, or delivery is planned for an out-of-the-way destination.
10. The address of the ultimate consignee, as listed on the airway bill or bill of lading, indicates that it is in a free trade zone.
11. The ultimate consignee, as listed on the airway bill or bill of lading, is a freight forwarding firm, a trading company, a shipping company or a bank, unless it is apparent that the ultimate consignee is also the end-user or the end-user is otherwise identified on the airway bill or bill of lading.
12. The shipping route is abnormal for the product and destination.
13. Packaging is inconsistent with the stated method of shipment or destination.
14. When questioned, the buyer is evasive or unclear about whether the purchased product is for domestic use, export or reexport.
15.The customer uses an address that is inconsistent with standard business practices in the area (e.g., a P.O. Box address where street addresses are commonly used).
16. The customer does not have facilities that are appropriate for the items ordered or end-use stated.
17.The customer's order is for parts known to be inappropriate or for which the customer appears to have no legitimate need (e.g., there is no indication of prior authorized shipment of system for which the parts are sought).
18. The customer is known to have or is suspected of having dealings with embargoed countries.
19. The transaction involves a party on the Unverified List published by BIS in the Federal Register.
20. The product into which the exported item is to be incorporated bears unique designs or marks that indicate an embargoed destination or one other than the customer has claimed.
21.The customer gives different spellings of its name for different shipments, which can suggest that the customer is disguising its identity and/or the nature and extent of its procurement activities.
22. The requested terms of sale, such as product specification and calibration, suggest a destination or end-use other than what is claimed (e.g., equipment that is calibrated for a specific altitude that differs from the altitude of the claimed destination).
23. The customer provides information or documentation related to the transaction that you suspect is false, or requests that you provide documentation that you suspect is false.
While BIS believes that many conscientious participants in export transactions are following the current “red flag” guidance, they hope that the safe harbor provision would encourage more parties to take these measures and thereby prevent diversions to proscribed or inappropriate end-uses.
Under this safe harbor, parties who take steps identified in a new §764.7 will not have knowledge imputed to them by application of the “reasonable person” standard stated in the new definition. Parties who report to BIS’s Office of Enforcement Analysis, prior to shipment, all material information regarding the existence, assessment, and satisfactory resolution of the red flag(s) and who do not otherwise have “knowledge,” as defined in §772.1, will be eligible for a safe harbor from any enforcement action arising from the red flag(s) that they have addressed.
The steps to be listed in §764.7 are:
1) Comply with any item and/or destination-based license requirements and other notification or review requirements;
2) Determine whether parties in the transaction are subject to a denial order or to certain sanctions, whether they appear on the Entity List or the Unverified List, whether the transaction is governed by a general order issued by BIS; and
3) Follow the procedures for identifying and resolving red flags set forth in Supplement No. 3 to Part 732.
If BIS concludes that a reported transaction involves unresolved red flags, it will so advice the submitting party. If a party has actual knowledge or awareness that the fact of circumstance in question is more likely than not, then even if the party receives BIS concurrence (based on a report to the Office of Enforcement Analysis) that red flags are resolved, the party will not be eligible for the safe harbor nor will BIS concurrence bind a subsequent enforcement action or prosecution, because the report would have misstated or withheld relevant information.
BIS expects to respond to most such reports within 45 days of receipt. BIS will acknowledge in writing receipt of all reports and will provide a telephone number for the reporting party to call to learn the status of the report if it has not heard from BIS by the date stated in the acknowledgment. BIS may consult with other government agencies before responding to the party submitting the report. However, until receiving written confirmation from BIS or contacting BIS after the date specified in the acknowledgment and learning that BIS will not be responding to the report, the party is not entitled to conclude that BIS concurs in the party’s assessment that any red flags have been successfully resolved.
Parties who have filed such reports may not file a license application relating to the same situation while the report is under review by BIS. Such license applications will be returned without action. In addition to language in the new §764.7, §748.4(f) would be modified to implement this prohibition.
Comments are due November 12, 2004.
33. Computer Technology and Software Eligible for Export Under License Exception; and Establishment of “Foreign National Review” Requirement and Procedure(69 FR 64483 on November 5, 2004)
Commentary: The Bureau of Industry and Security (BIS) has published a final rule expanding the availability of license exceptions for certain deemed exports of computer technology and source code under the Export Administration Regulations (EAR), partially implementing the expansion set forth in a proposed rule published on October 24, 2003. This rule does not just apply to deemed exports for employees, is also available for deemed exports of technology and source code to foreign national visitors and customers, under the procedures set forth in License Exception CTP. In addition, this final rule clarifies certain provisions of License Exception CTP. This rule also establishes a new “Foreign National Review (FNR)” requirement for deemed exports of technology or source code under License Exception CTP.
Technology and source code controlled under ECCN 4E001 and 4D001 for computers with an unlimited CTP are eligible for deemed exports under License Exception CTP to foreign nationals of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, or the United Kingdom.
Technology and source code controlled under ECCN 4E001 and 4D001 for computers with a CTP of less than or equal to 190,000 MTOPS are eligible for deemed exports under License Exception CTP to foreign nationals of all Tier 1 destinations except the 22 countries in the previous (unlimited CTP) paragraph.
Technology and source code controlled under ECCN 4E001 and 4D001 for computers with a CTP of less than or equal to 75,000 MTOPS are eligible for deemed exports under License Exception CTP to foreign nationals of all Tier 3 destinations after a Foreign National Review (FNR). The FNR is required for deemed exports to a foreign national of a foreign nationals from a country in Computer Tier 3 that is not also a country listed in Country Group B of Supplement No. 1 to part 740.
This final rule provides that the 22 countries previously eligible to receive technology and software for computers with unlimited CTP under License Exception TSR continue to be eligible for export and reexport of unlimited CTP level of technology and software, but this eligibility is now pursuant to License Exception CTP. These countries include Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxemburg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, and the United Kingdom. All of these 22 countries are in “Computer Tier 1” for purposes of License Exception CTP.
This final rule provides that countries in Country Group B previously eligible to receive technology and software for computers and electronic assemblies classified under ECCN 4A003.b and ECCN 4A003.c, respectively, with a CTP less than or equal to 33,000 MTOPS under License Exception TSR continue to be eligible for export and reexport under License Exception TSR. In addition, technology and software for other equipment, i.e., not controlled under ECCN 4A003.b and ECCN 4A003.c, controlled under ECCNs 4E001 and 4D001 will also continue to be eligible for export and reexport under License Exception TSR.
However, this final rule amends License Exception TSR eligibility paragraphs under ECCNs 4D001 and 4E001 for certain controlled computer technology and software, so that technology and software with a CTP greater than 33,000 MTOPS to the 22 countries previously listed in the TSR paragraph is no longer eligible for export and reexport under TSR. In addition, this rule adds License Exception CTP to the License Exception section of ECCNs 4D001 and 4E001. License Exception CTP formerly applied to only computer hardware classified under ECCN 4A003.
Actual exports and reexports of computer technology and software will continue to be controlled for export and reexport under ECCNs 4D001 and 4E001 when the CTP exceeds 28,000 MTOPS, and eligible for License Exception TSR when the CTP is equal to or less than 33,000 MTOPS to Computer Tier 1 countries that are also Country Group B countries.
Exports and reexports to countries in Country Group E:1 (terrorist supporting countries - Cuba, Iran, Libya, North Korea, Sudan, and Syria) continue to be ineligible for License Exception CTP.
Foreign National Review (FNR). Prior to disclosing eligible technology or source code to a foreign national under License Exception CTP, an exporter must submit a FNR request to BIS. The FNR requirement only applies to foreign nationals from a country in Computer Tier 3 that is not also a country listed in Country Group B of Supplement No. 1 to Part 740. The exporter must confirm eligibility from the System for Tracking Export License Applications (STELA) or the Simplified Network Application Procedure (SNAP) prior to using License Exception CTP. FNR requests must be submitted using Form BIS-748P (Multipurpose Application), or its electronic equivalent, and must include information about the foreign national who is to receive the computer technology and source code. The information required for the FNR request is set forth in paragraphs (s) and (t) of Supplement No. 2 to Part 748 of the EAR. BIS will electronically refer the FNR request for interagency review within nine business days or, if necessary, return the FNR request without action to the applicant, e.g., if more information is necessary. Upon receipt of the BIS referral, the agencies have 30 days in which to return a recommendation to BIS. License exception CTP may not be used until the exporter has received official notification from BIS.
Exporters who have current licenses for deemed exports of computer technology or source code to Computer Tier 3 destination foreign nationals that become eligible for License Exception CTP are no longer bound by conditions on their licenses, as provided under Section 750.7 of the EAR. Termination of license conditions does not relieve an exporter of its responsibility for violations that occurred prior to the availability of the License Exception.
34. Microprocessor Technology Eligible for Export Under License Exception(69 FR 64490 on November 5, 2004)
Commentary: BIS has published a final rule expanding the availability of License Exception CIV for certain deemed exports of microprocessor technology on the Commerce Control List (CCL) of the EAR under ECCN 3E001 and 3E002. These ECCNs control technology that can be used for the development and production of microprocessors. This final rule partially implements a proposed rule published on October 24, 2003. This final rule limits License Exception CIV eligibility to deemed exports for certain microprocessor technology. This rule does not just apply to deemed exports for employees, is also available for deemed exports of technology to foreign national visitors and customers, under the procedures set forth in License Exception CIV. Finally, this rule also establishes a FNR requirement under License Exception CIV for deemed exports of microprocessor technology to certain eligible foreign nationals.
This final rule authorizes under License Exception CIV deemed exports of technology controlled under ECCN 3E001 for the development and production of microprocessors controlled under ECCN 3A001.a.3.c with a CTP less than or equal to 40,000 MTOPS (regardless of word length or access width) to Country Group D:1 nationals after a Foreign National Review (FNR). License Exception CIV does not apply to ECCN 3E001 technology for ECCN 3A001.a.3.c required for the development or production of other items controlled under ECCNs beginning with 3A, 3B, or 3C, or to ECCN 3E001 technology also controlled under ECCN 3E003.
In addition, this rule authorizes under License Exception CIV deemed exports of technology controlled under ECCN 3E002 for the development and production of microprocessors having a CTP less than or equal to 40,000 MTOPS (regardless of word length or access width) to Country Group D:1 nationals after a Foreign National Review (FNR). License Exception CIV does not apply to ECCN 3E002 technology also required for the development or production of items controlled under ECCNs beginning with 3A, 3B, or 3C, or to ECCN 3E002 technology also controlled under ECCN 3E003.
License Exception CIV may not be used for military end-users or to known military uses. In addition to conventional military activities, military uses include any proliferation activities described in Part 744 of the EAR. Deemed exports under License Exception CIV are not authorized to foreign nationals in an expired visa status. It is the responsibility of the exporter to ensure that, in the case of deemed exports, the foreign national maintains a valid U.S. visa, if required to hold a visa from the United States.
Exporters who have current licenses for deemed exports of such technology to Country Group D:1 foreign nationals that become eligible for License Exception CIV are no longer bound by conditions on their licenses, as provided under Section 750.7 of the EAR. Termination of license conditions does not relieve an exporter of its responsibility for violations that occurred prior to the availability of the License Exception.
35. Revisions to the Export Administration Regulations: Removal of the List of Missile Projects and Expansion of Missile-Related End-Use and End-User Controls(69 FR 64657 on November 8, 2004)
Commentary: BIS has published an interim rule amending the EAR by removing the list of missile projects of concern and expanding license requirements for missile-related end-users and end-uses. Specifically, this rule removes the list of missile projects in D:4 countries set forth in the footnote in Supplement No. 1 to Part 740 of the EAR because the activities subject to the license requirement set forth in 744.3 are no longer limited to “missile” projects with a certain payload and range capability. The referenced activities are expanded, by this rule, to include any rocket system or unmanned air vehicle with a range of 300 kilometers to be used in D:4 countries.
This rule also implements a new license requirement in Section 744.3 for exports, reexports and transfers to anywhere in the world that applies when you know, or are informed, that an item subject to the EAR will be used in rocket systems or unmanned air vehicles of any range for the delivery of chemical, biological or nuclear weapons.
This rule revises the license requirements under Section 744.3 of the EAR to provide that a license is required for the export, reexport or transfer of any item subject to the EAR if you know, or are informed, that the item will be used in the design, development, production or use of rocket systems or unmanned air vehicles capable of a range of at least 300 kilometers in or by a country listed in Country Group D:4. This rule also provides that a license is required if you know that the item will be used in the design, development, production or use of rocket systems or unmanned air vehicles in or by a country listed in Country Group D:4, but are unable to determine the characteristics (i.e., range capabilities) of the rocket systems or unmanned air vehicles, or whether the rocket systems or unmanned air vehicles, regardless of range capabilities, are used for the delivery of chemical, biological or nuclear weapons.
Finally, this rule adds a note to Section 744.3 of the EAR defining “rocket systems” and “unmanned air vehicles”. “Rocket systems” include, but are not limited to ballistic missile systems, space launch vehicles, and sounding rockets. “Unmanned air vehicles” include, but are not limited to cruise missile systems, target drones and reconnaissance drones.
These changes to the end-use and end-user controls are necessary to meet U.S. nonproliferation objectives and are consistent with the Missile Technology Control Regime (MTCR) Guidelines.
36. Termination of Certain Emergencies with Respect to Yugoslavia and Related Removal of Restrictions on Transactions With Persons Identified by the Bracketed Initials [FRYM] Under the Export Administration Regulations(69 FR 65368 on November 12, 2004)
Commentary: BIS has amended the EAR to delete the section that sets forth license requirements for exports and reexports to designated persons identified by the bracketed initials [FRYM]. The Department of Treasury, Office of Foreign Assets Control (OFAC) used the bracketed initials [FRYM] to identify certain persons on the list of Specially Designated Nationals and Blocked Persons ((a) former Yugoslav president Slobodan Milosevic and his close allies, (b) certain persons under indictment by the International Criminal Tribunal for the former Yugoslavia, (c) persons attempting to maintain or reestablish illegitimate control over the former Yugoslavia, (d) persons providing support to the persons mentioned above and (e) persons owned or controlled by or acting on behalf of any persons mentioned above.) OFAC discontinued the use of those bracketed initials following the termination of certain national emergencies with respect to Yugoslavia.
37. Removal of Four Russian Entities(69 FR 65539 on November 15, 2004)
Commentary: BIS has amended the EAR by removing four Russian entities from the Entity List, and by removing certain license requirements for exports and reexports to these entities, in conformance with the determination of the Department of State to remove nonproliferation measures imposed on these entities in 1998 and 1999. The four entities include Europalace 2000; Grafit (aka State Scientific Research Institute of Graphite or NIIGRAFIT); MOSO Company and The Scientific Research and Design institute of Power Technology (aka NIKIET, Research and Development Institute of Power Engineering (RDIPE), and ENTEK).
The removal of these entities from the Entity List eliminates the license requirements under Section 744.10 of the EAR for exports and reexports to these entities. However, license requirements for export and reexports set forth in Part 744 still apply to these entities when the export or reexporter knows that the item will be used in prohibited activity. BIS strongly urges the use of Supplement No. 3 to Part 732 of the EAR, “BIS’s ‘Know Your Customer’ Guidance and Red Flags” when exporting or reexporting.
38. Revised “Knowledge” Definition, Revisions of Red Flags” Guidance and Safe Harbor(69 FR 65555 on November 15, 2004)
Commentary: BIS has reopened the comment period on a proposed rule that would revise the knowledge definition and the “red flags” guidance as well as create a safe harbor from knowledge based violations in the EAR. Comments on the proposed rule must be received by December 15, 2004.
39. Defense Priorities and Allocations Systems: Electronic Transmission of Reasons for Rejecting Rated Orders(69 FR 67872 on November 22, 2004)
Commentary: BIS is proposing a rule that would amend the Defense Priorities and Allocations System (DPAS) regulations to allow a person who has rejected a rated order to give his or her reasons for the rejection through electronic means rather than requiring the person to submit the rationale in writing because of industry concern that the current procedure hampers efficiency. As a result, BIS proposes to amend 15 CFR 700.13(d)(1) to allow a person the option of transmitting his or her rationale for rejecting a rated order electronically to the appropriate contracting officer or agency. If this rule is adopted, a person would able to transmit his or her rationale for rejection either electronically or in writing. This amendment to the DPAS regulations should allow this information to be transmitted more quickly. Comments on this proposed rule must be received on or before December 22, 2004.
40. Revision of Licensee’s Responsibility to Communicate License Conditions(69 FR 68076 on November 23, 2004)
Commentary: BIS has published an interim rule revising the EAR to require licensees to communicate in writing specific license conditions to the parties to whom the license conditions apply. According to the rule, such communication must be in writing (which includes recorded and retrievable media, such as e-mail). This revision is in accordance with the Government Accountability Office’s (GAO) post-shipment verification recommendations to the BIS (Found in GAO-04-357). This revision will not increase the burden to the public, as license conditions generally are typically communicated in writing, (e.g. via e-mail or facsimile).
In addition, this rule also makes a technical correction to the title of Part 750 of the EAR. Currently, that part is entitled “Application Processing, Issuance or and Denial.” The “or and” in the title is in reverse order. This rule changes the title to read “Application Processing, Issuance and Denial.”
41. Impact of Implementation of the Chemical Weapons Convention on Commercial Activities Involving “Schedule 1” Chemicals Through Calendar Year 2004(69 FR 68127 on November 23, 2004)
Commentary: BIS is seeking public comments on the impact that implementation of the Chemical Weapons Convention has had on commercial activities involving “Schedule 1” chemicals through calendar year 2004. This notice of inquiry is part of an effort to collect information to assist in the preparation of the annual certification 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 Chemical Weapons Convention. Comments are to be received by BIS no later than December 21, 2004.
42. Correction to Revision of Licensee’s Responsibility To Communicate License Conditions(69 FR 69814 on December 1, 2004)
Commentary: The Bureau of Industry and Security (BIS) has published a correction of an interim rule that appeared in the Federal Register of November 23, 2004 (67 FR 68076). The rule amended the regulations to require licensees to communicate in writing specific licensing conditions. This rule amends the Export Administration Regulations (EAR) by correcting an error by inserting regulatory text inadvertently omitted.
43. Chemical Weapons Convention Regulations; Proposed Rule(69 FR 70754 on December 7, 2004)
Commentary: BIS has published an interim rule that revises the Chemical Weapons Convention Regulations (CWCR) by updating them to include additional requirements identified in the implementation of the Chemical Weapons Convention (CWC) and to clarify other CWC requirements.
Specifically, this rule proposes the following revisions to the CWCR, among others. The rule revises certain provisions affecting definitions of terms used in the CWCR, the scope of the CWCR, State Parties to the CWC, controlled activities involving specific listed chemicals, inspection of facilities and possible non-compliance with the CWC.
44. Encryption Export and Reexport Control Revisions(69 FR 71356 on December 9, 2004)
Commentary: BIS has published a final rule revising the encryption export and reexport controls of the Export Administration Regulations (EAR).
This rule removes the requirement to make a separate request for de minimis eligibility when submitting a review request for some encryption commodities and software under License Exception ENC. Foreign made items incorporating U.S. origin encryption items that have met specified notification or review requirements under mass market, License Exception TSU or License Exception ENC procedures will be treated like foreign made items that incorporate other U.S. origin items, in determining de minimis eligibility.
This rule also removes certain reporting requirements in License Exception TMP regarding beta test encryption software. In addition, this rule reduces the notification requirements for exports and reexports of certain “publicly available” encryption software that has been posted to the Internet pursuant to License Exception TSU by removing the requirement to notify the U.S. Government of updates or modifications if the Internet location has not changed.
This rule simplifies License Exception ENC review requirements for exports and reexports of eligible encryption items, by implementing a uniform 30 day period for most encryption reviews and by clarifying the criteria by which licensing requirements to certain “government end-users” are determined. In connection with this 30 day period associated with the initial U.S. Government technical review of an encryption item, this rule authorizes BIS to, at any time, require additional technical information about an encryption item submitted for review and, if the information is not furnished, to suspend or revoke authorization to use License Exception ENC with respect to the item for which the information is sought. This rule also expands the list of countries to which certain encryption items may be sent immediately, once a review request is submitted to the U.S. Government. The list (Supplement No. 3 to part 740) now covers all current members of the European Union (EU), to include those countries that joined the EU on May 1, 2004. This rule updates and clarifies several encryption review requirements in License Exception ENC and clarifies the definition of the term “hold without action” in the Export Administration Regulations. This rule also makes some technical changes, and revises the e-mail address of the ENC Encryption Request Coordinator from enc@ncsc.mil to enc@nsa.gov to match the current e-mail address of that organization.
45. Revision of Export Control Classification Number (ECCN) 2B351 To Conform With the Australia Group (AG) “Control List of Dual-Use Chemical Manufacturing Facilities and Equipment and Related Technology(69 FR 76842 on December 23, 2004)
Commentary: BIS has published a final rule amending the EAR by revising the Commerce Control List (CCL) entry that describes controls on certain toxic gas monitoring systems to conform with the Australia Group (AG) “Control List of Dual-Use Chemical Manufacturing Facilities and Equipment and Related Technology.” Specifically, this final rule removes a technical note that contained an overly broad description of the types of toxic gas monitoring systems and detectors subject to chemical/biological (CB) controls under the EAR. The note covered a number of toxic gas monitoring systems and detectors not included on the AG control list. By removing the technical note, this final rule eliminates the CB license requirement for these toxic gas monitoring systems and detectors. Toxic gas monitoring systems and detectors that are included on the AG control list continue to require a license, for CB reasons, to certain destinations.
46. Implementation of the Understandings Reached at the June 2004 Australia Group (AG) Plenary Meeting and Through a Subsequent AG Intersessional Decision; Clarifications to the Scope of ECCNs 1A004, 1A995, and 2B351; Corrections to Country Group D and ECCNs 1C355, 1C395, and 1C995; Additions to the List of States Parties to the Chemical Weapons Convention(69 FR 77890 on December 29, 2004)
Commentary: BIS has published a final rule to amend the EAR to implement the understandings reached at the June 2004 plenary meeting of the Australia Group (AG) and through a subsequent AG intersessional decision.
Specifically, this rule incorporated the following amendments to the EAR, among others. BIS added three bacteria and two viruses to the AG list of plant pathogens described in Export Control Classification Number (ECCN) 1C354 on the Commerce Control List (CCL) (Supplement No. 1 to Part 774 of the EAR). BIS also revised the EAR to reflect the AG’s removal of certain medical products containing conotoxins from the AG list of biological agents (i.e., human and zoonotic pathogens and toxins). As a result of the changes made by this rule, medical products containing conotoxins no longer require a license to those countries indicated under CB Column 3 on the Commerce Country Chart (Supplement No. 1 to Part 738 of the EAR). However, such medical products continue to require a license to certain destinations for anti-terrorism (AT) reasons. This also rule adds nine precursor chemicals to the list of AG-controlled precursor chemicals described in ECCN 1C350 on the CCL.
In addition, this rule amends the EAR to add Estonia, Latvia, Lithuania, Malta, and Slovenia as the newest participating countries in the Australia Group (which now includes a total of 38 countries). Supplement No. 1 to Part 740 (Country Groups) is revised to add these five countries to Country Group A:3 (Australia Group) and Supplement No. 1 to Part 738 (Commerce Country Chart) is revised to remove the licensing requirements for these countries under CB Column 2, in conformance with the licensing policy that applies to other AG participating countries. This rule also revises Supplement No. 2 to Part 745 of the EAR by adding the names of seven countries that recently have become States Parties to the CWC (i.e., Chad, Madagascar, Marshall Islands, Rwanda, Saint Kitts and Nevis, Sierra Leone, and Solomon Islands).