2005: Bureau of Export Administration

FINAL RULES PUBLISHED IN THE FEDERAL REGISTER DURING 2005
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.

 

  1. Chemical Weapons Convention Regulations (70 FR 1216 on January 6, 2005)

Commentary: The Bureau of Industry and Security (BIS) has published a proposed rule extending until February 7, 2005, the deadline for public comments on the proposed rule that would amend 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 (69 FR 70754). This extension of time would allow the public additional time to comment on the rule.

 

  1. Implementation of the Understandings Reached at the June 2004 Australia Group (AG) Plenary Meeting and Through a Subsequent AG Intersessional Decision; Correction (70 FR 2348 on January 13, 2005)

Commentary: On Wednesday, December 29, 2004, BIS published a final rule that amended the Export Administration Regulations (EAR) to implement the understandings reached at the June 2004 plenary meeting of the Australia Group (AG) and through a subsequent AB intersessional decision. The December 29, 2004, final rule contained a typographical error in the description of the AG-related license requirements in the EAR, as well as an error in the amendatory language for ECCN 2B351, which controls certain toxic gas monitoring systems and dedicated detectors therefore. This rule corrects those errors.

 

  1. Technical Corrections to the Export Administration Regulations (70 FR 8245 on February 18, 2005)

Commentary: The BIS has published a rule making technical corrections to the EAR by updating internal agency process matters, clarifying license exceptions, correcting citation errors and clarifying paperwork requirements. None of these technical corrections change the current interpretations or licensing requirements of the EAR. In part, this rule:

Revises and shortens the description of the scope of the Commerce Country Chart in Sec. 738.3(a);

Clarifies availability of License Exception TMP for exhibition and demonstration in Country Group D:1;

Clarifies availability of License Exception TMP for reexports of kits of replacement parts to Country Group D:1;

Adds the Under Secretary for Industry and Security as an official who may determine whether information subject to Sec. 12(c) of the Export Administration Act may be released to the public in conformance with the applicable Departmental Organization Order;

Removes an unnecessary statement about responsibility to classify items from Sec. 748.3(a);

Revises the description of emergency processing of license applications to conform to current agency practice;

Corrects a citation error in the prohibition against concealment or misrepresentation of facts and adds another citation to clearly distinguish the export control documents from the boycott report documents that are subject to Sec. 764.2(g);

Revises the address for filing papers in administrative enforcement proceedings;

Revises the definition of the term “controlled country” to make clear that controlled countries are countries subject to national security export controls, to add two previously omitted countries, and to reflect the shift of North Korea from Country Group E:2 to D:1;

Revises the ECCN 3A001 License Exceptions paragraph to exclude certain commodities controlled for missile technology reasons consistent with Sec. 740.2(a)(5).

 

  1. Revision of License Exception TMP for Activities by Organizations Working to Relieve Human Suffering in Sudan (70 FR 8251 on February 18, 2005)

Commentary: In order to reduce humanitarian organizations’ need for export licenses, BIS has revised the EAR and License Exception TMP to authorize certain exports, but not reexports, to Sudan of certain commodities and software that otherwise would require a license pursuant to §742.10 or §742.15 of the EAR. This rule makes the tools of trade provisions of License Exception TMP available to (1) non-governmental organizations that are engaged in activities to relieve human suffering in Sudan and that are registered by the Department of the Treasury, Office of Foreign Assets Control (OFAC) pursuant to 31 CFR 538.521, or (2) organizations that are authorized by OFAC to take actions, for humanitarian purposes, that otherwise would be prohibited by the Sudanese Sanctions Regulations (31 CFR Part 538), or (3) staff or employees of either such type of organization.

Under this rule, those parties are authorized, under Section 740.9(a)(i) of the EAR, to export to Sudan certain basic telecommunications equipment controlled under Export Control Classification Number (“ECCN”) 5A991 such as cell phones, personal digital assistants and other wireless handheld devices, personal computers (including laptops) controlled under ECCN 4A994 that do not exceed a composite theoretical operations of 6,500 millions of theoretical operations per second (MTOPS), and global positioning system (GPS) or similar satellite receivers controlled under ECCN 7A994.

These revisions to TMP also allow the export of related software controlled under ECCNs 4D994 and 5D002 for the use of such telecommunications equipment or computers. The software must be loaded onto the commodity prior to being exported and remain loaded on the commodity while in Sudan. This rule also authorizes parts and components of those ECCN 5A991 and 4A994 devices that are controlled under ECCN 5A992 and that are installed with, or contained in, such computers or equipment to be exported under License Exception TMP. The parts and components must remain installed with, or contained in, such computers or equipment while in Sudan. The tools of trade must accompany (either hand carries or as checked baggage) a member of the staff or an employee of such an organization to Sudan.

Exports made pursuant to this rule must also meet the general requirements for temporary exports under License Exception TMP set forth in §740.9(a) of the EAR and the specific requirements applying to tools of trade set forth in §740.9(a)(2)(i). Such exports are also subject of the restrictions on the use of all License Exceptions found in §740.2 of the EAR.

 

  1. Denied Persons and Specially Designation Nationals (70 FR 8718 on February 23, 2005)

Commentary: BIS has published a final rule removing all references in the EAR to the supplement containing the list of persons denied export privileges (“Denied Persons List” (DPL)) because no such supplement exists in the Code of Federal Regulations. In the past, such a supplement has been included only in the unofficial loose-leaf version of the EAR that is available by subscription from the U.S. Government Printing Office. In addition, the Bureau of Industry and Security provides notice to the public that it is discontinuing its practice in including in the loose-leaf version of the EAR both the DPL and the “Specially Designation Nationals and Block Persons” (SDL) List. Revisions to the DPL and SDN List are issued on such a frequent basis as to make the quarterly, hard-copy versions of the list include in the loose-leaf version of the EAR inaccurate. The removal of the DSP and SDL List from the loose-leaf version of the EAR will minimize any potential that parties might rely on an outdated list of persons denied export privileges under the EAR.

 

  1. Licensing Policy for Entities Sanctioned Under Specified Statutes; License Requirement for Certain Sanctioned Entities; and Imposition of License Requirement for Tula Instrument Design Bureau (70 FR 10865 on March 7, 2005)

Commentary: BIS has published an interim final rule with request for comments which states BIS’ licensing policy regarding transactions involving entities sanctioned by the State Department under three specified statues, imposes a new license required for certain entities sanctioned by the State Department, and identifies one specific entity subject to this new license requirement, Tula Instrument Design Bureau of Russia.

Specifically, this rule amends the EAR by adding a new §744.19 to set forth explicitly BIS’s licensing policy regarding entities sanctioned by the State Department under the authority of three statutes. The newly created §744.19 provides that BIS’s policy is to deny any export or reexport license application if the applicant, other party authorized to receive the license, purchaser, intermediate consignee, ultimate consignee, or end-user is subject to:

A sanction issued pursuant to the Iran-Iraq Arms Nonproliferation Act of 1992 (Pub. L. 102-484) that prohibits the issuance of any license for any export by or to the sanctioned person or;

a sanction issued pursuant to the Iran Nonproliferation Act of 2000 (Pub. L. 107-178) that prohibits the granting of a license for the transfer to foreign persons of items, the export of which is controlled under the EAR;

a sanction issued pursuant to section 11B(b)(1)(B)(ii) of the Export Administration Act of 1979, as amended (also known as the Missile Technology Control Act of 1990), that prohibits the issuance of new licenses for exports to the sanctioned entity of items controlled pursuant to the Export Administration Act of 1979.

In addition, §744.19 sets forth BIS’s policy to deny any export or reexport application for items listed on the Commerce Control List (“CCL”) with missile technology (MT) listed as a reason for control if any entity subject to a sanction issued pursuant to Section 11B(b)(1)(B)(i) of the Export Administration Act of 1979, as amended, is a party to the transaction.

This rule also adds new §744.20 to the EAR to provide that BIS may impose, as new foreign policy controls, license requirements on exports and reexports of items subject to the EAR to entities sanctioned by the State Department. Such license requirements are in addition to those imposed by other provisions of the EAR.

Finally, this rule imposes a license requirement under new §744.20 for exports or reexports to Tula Instrument Design Bureau (all locations including at Tula 300001, Russia) of the government of the Russian Federation (Tula) for all items subject to the EAR having a classification other than EAR99, prohibits use of any License Exception for such exports or reexports, and imposes a general policy of denial for all license applications to export or reexport to Tula. The rule adds Tula to the Entity List (Supplement No. 4 to part 744 of the EAR).

 

  1. Defense Priorities and Allocations Systems (DPAS): Electronic Transmission of Reasons for Rejection Rated Orders (70 FR 10864 on March 7, 2005)

Commentary: BIS has published a final rule revising the Defense Priorities and Allocations System to allow a person rejecting a rated order to give his or her reasons for the rejection through electronic means rather than requiring a person to submit the rationale in writing.

 

  1. Revisions to the Export Administration Regulations based on the 2004 Missile Technology Control Regime Plenary Agreements; Additions to the Entity List; Revisions to the Missile Catch-All Controls (70 FR 11858 on March 10, 2005)

Commentary: BIS has amended the EAR, including various entries on the CCL, to reflect changes to the Missile Technology Control Regime (MTCR) Annex that were agreed to by MTCR member countries at the October 2004 Plenary in Seoul, South Korea, as well as the plenary decision to allow Bulgaria to become a member of the MTCR. As a result of Bulgaria becoming a member of the Missile Technology Control Regime, the entry for Bulgaria in supplement No. 1 to part 740 (Country Group A) is revised by inserting an “X” in the box under Column [A:2](Missile Technology Control Regime). This rule amends Part 772 of the EAR to revise the definition for “Usable in” or “Capable of” (MTCR context) to now include “usable for” and “usable as” in the list of terms that are defined by this definition. In addition, the first sentence of this definition is revised from reading “Equipment, parts, components or ‘software’ that are suitable for a particular purpose” to read “Equipment, parts, components, materials or ‘software’ which are suitable for a particular purpose.”

In addition to these changes, this rule adds four entities located in Syria to the Entity List: Higher Institute of Applied Science and Technology (HIAST), Industrial Establishment of Defense (IED), National Standards and Calibration Laboratory (NSCL), and the Scientific Studies and Research Center (SSRC). License applications to export or reexport items subject to the EAR to these entities will be reviewed with a presumption of denial.

Lastly, this rule revises the missile catch-all controls for Restrictions on Certain Rocket Systems, by clarifying that the general prohibition includes a license requirement for items that will be used, anywhere in the world except by governmental programs for nuclear weapons delivery of NPT Nuclear Weapons States that are also members of NATO, in “the design, development, production or use of” rocket systems or unmanned air vehicles, regardless of range capabilities, for the delivery of chemical, biological, or nuclear weapons. This is a clarification of revisions published November 8, 2004 (69 FR 64657).

 

  1. Editorial Corrections to the Export Administration Regulations (70 FR 14385 on March 22, 2005)

Commentary: BIS has published a final rule amending the EAR to update a fax number of the Outreach & Exporter Services Division of the Bureau of Industry and Security to (202) 482-2927. This rule also updates the Paperwork Collections List to delete information collections that are no longer in effect and to add new information collections that have been approved.

 

  1. Revision of Export and Reexport Restrictions on Libya (70 FR 14387 on March 22, 2005)

Commentary: BIS has published a final rule amending the EAR to implement further changes to export and reexport controls with respect to Libya. Based on public comments received in response to the April 29, 2004 (69 FR 23626) interim rule, BIS has established a review policy and licensing procedure for activities involving items subject to the EAR that may have been illegally exported or reexported to Libya before the comprehensive embargo on Libya ended (“installed base” items). BIS has also modified the licensing policy for some commercial charges classified under ECCN 1C992. In addition BIS has modified the language in License Exception Temporary Imports, Exports and Reexports (TMP) to ensure clarity regarding certain software. Finally, BIS has corrected an inadvertent error in the April 29 interim rule, which omitted an ”X” in the NP:2 column for Libya on the Commerce Country Chart, Supplement 1 to Part 738 of the EAR.

 

  1. Revision and Clarification of Deemed Export Related Regulatory Requirements (70 FR 15607 on March 28, 2005)

Commentary: BIS has published an advance notice of proposed rulemaking. BIS is reviewing the recommendations contained in the U.S. Department of Commerce Office of Inspector General (OIG) Report entitled “Deemed Export Controls May Not Stop the Transfer of Sensitive Technology to Foreign Nationals in the U.S.” (Final Inspection Report No. IPE-16176-March 2004), and BIS is seeking comments on how potential regulatory revisions would affect industry, the academic community, and U.S. government agencies involved in research.

The OIG suggested that BIS revise the definition of “use” in §772.1 of the EAR to replace the word “and” with the word “or,” as follows: “Use”. (All categories and General Technology Note) — Means all aspects of “use,” such as: operation, installation (including on-site installation) maintenance (checking), repair, overhaul, or refurbishing.

The OIG also suggested that BIS amend its policy to require U.S. organizations to apply for a deemed export license for employees or visitors who are foreign nationals and have access to dual-use controlled technology if they were born in a country where the technology transfer in question would require an export license, regardless of their most recent citizenship or permanent residency.

BIS is soliciting comments for 60 days on this proposal. The period for submission of comments will close May 27, 2005, BIS is particularly interested in views on the impact the proposal will have on technology developers and manufacturers, academic institutions, and U.S. government research facilities. BIS is interested in receiving specific information regarding the impact of the regulations, e.g., data on the number of foreign nationals in the United States who will face licensing requirements if the OIG’s recommendations were adopted, and impact of compliance with the new licensing requirements — cost, resources, and procedures. BIS is also interested in receiving any alternative suggestions regarding the concerns raised by the OIG. Parties submitting comments are asked to be as specific as possible. BIS encourages interested persons who wish to comment to do so at the earliest possible date.

 

  1. Amendments Affecting the Country Scope of the Chemical/Biological End-User/End-Use Controls (70 FR 16110 on March 30, 2005)

Commentary: BIS has published a final rule amending the chemical and biological weapons end-user/end-use controls in the EAR. Specifically, this final rule expands the country scope of the EAR restrictions on certain chemical and biological weapons end-use to apply to exports and reexports of items subject to the EAR to any destination, worldwide. Prior to the publication of this rule, such restrictions applied only to exports and reexport of items subject to the EAR to certain countries of concern for chemical and/or biological reasons. The amendments are consistent with the “catch-all” provisions in the Australia Group’s (AG) “Guidelines for Transfers of Sensitive Chemical or Biological Items.”

 

  1. Expansion of the Country Scope of the License Requirements that Apply to Chemical/Biological (CB) Equipment and Related Technology; Amendments to CB-Related End-User/End-Use and U.S. Person Controls (70 FR 19688 on April 14, 2005)

Commentary: BIS has published a final rule amending the EAR by increasing the country scope of chemical/biological (CB) controls on those CCL entries that contain chemical/biological equipment and related technology included on the Australia Group (AG) Common Control Lists. Specifically this final rule expands the country scope of the CB license requirements for these CCL entries from certain countries of concern for chemical/biological weapons reasons to all destinations, worldwide, except for those countries that participate in the AG. These changes are intended to make the EAR license requirements that apply to chemical/biological equipment and related technology identified on the AG Common Control Lists consistent with the AG “Guidelines for Transfers of Sensitive Chemical or Biological Items.”

In addition, this final rule expands the EAR restrictions on certain chemical and biological weapons end-use to apply to exports, reexports, and transfers of items subject to the EAR or within any country or destination, worldwide. Prior to the publication of this rule, such restrictions applied only to exports and reexports. Finally, this rule amends the EAR by expanding the country scope of the restrictions on certain activities in support of the design, development, production, stockpiling, or use of chemical or biological weapons in or by any country or destination, worldwide. This change makes the country scope of these U.S. person controls consistent with the country scope of the chemical and biological weapons end-user/end-use controls in Section 744.4 of the EAR, as described above.

 

  1. Revision to the Unverified List—Guidance as to “Red Flags” (70 FR 21394 on April 26, 2005)

Commentary: BIS has published a notice adding an entity to the Unverified List. The Unverified List was created on June 14, 2002, when BIS published a notice in the Federal Register that set forth a list of persons in foreign countries who were parties to past export transactions where pre-license checks or post-shipment verifications could not be conducted for reasons outside the control of the U.S. Government. Additionally, on July 16, 2004, BIS published a notice in the Federal Register that advised exporters that the Unverified List would also include persons in foreign countries in transactions where BIS is not able to verify the existence or authenticity of the end-user, intermediate consignee, ultimate consignee, or other part to the transaction. These notices advised exporters that the involvement of a listed person as a party to a proposed transaction constitutes a “red flag” as described in the guidance set forth in Supplement No. 3 to 15 CFR Part 732, requiring heightened scrutiny by the exporter before proceeding with such a transaction.

The entity added to the Unverified List is: Parrlab Technical Solutions, LTD, 1204, 12 F Shanghai Industrial Building, 48-62 Hennesey Road, Wan Chai, Hong Kong, Special Administrative Region.

 

  1. Revised Contact Information, Nomenclature Change and Correction of Citation Error (70 FR 22247 on April 29, 2005)

Commentary: BIS has published a final rule revising the delivery addresses, telephone, and facsimile numbers; makes a nomenclature change, and corrects a citation error. Specifically, this rule revised the delivery address for the ENC Encryption Request Coordinator and the office within BIS that receives encryption review requests and reports. The suite number in the address of the ENC Encryption Request Coordinator is changed from 6131 to 6940 in §740.8(b)(2), §740.17(e)(5)(ii) and Supp. No. 6 to Part 742. The room number for deliveries to BIS’s Information Technology Controls Division is changed from 2526 to 2093 in Supplement No. 6. to Part 742. This rule also revises the facsimile number for BIS that appears in §748.4(h) and §748.2(a) to read “(202) 482-2927”.

In addition, this rule removes the Office of Export Enforcement (OEE) field offices from the list of locations at which to make voluntary disclosures in §764.5(c)(7). All such disclosures will have to be made to OEE headquarters and should be submitted to: Director, Office of Export Enforcement, 1401 Constitution Ave., Room H4514, Washington, DC 20230, Tel: (202) 482-5036, Facsimile: (202) 482-5889.

 

  1. Proposed Rule: Imposition of License Requirement for Exports and Reexports of Missile Technology-Controlled Items Destined to Canada (70 FR 29660 on May 24, 2005)

Commentary: BIS is proposing to amend the EAR by imposing a license requirement for exports and reexports of items controlled for missile technology (MT) reasons to Canada. To date, the EAR has required a license for MT-controlled items to all destinations except Canada, and generally no license exceptions are available for MT-controlled items.

This rule is consistent with the recommendation made by the Government Accountability Office in a 2001 report that BIS either impose a license requirement for exports and reexports of MT-controlled items to Canada, based on Section 6(l) of the Export Administration Act of 1979, as amended, or seek a statutory change. The effect of this rule is that all exports and reexports of MT-controlled items to any destination require a license, and generally no license exceptions are available, so that all exports and reexports of MT-controlled items subject to the EAR are subject to prior review. Comments on this proposed rule must be received on or before June 23, 2005.

 

  1. Revision and Clarification of Deemed Export Related Regulatory Requirements (70 FR 30655 on May 27, 2005)

Commentary: BIS has published an extension of the comment period on an advance notice of proposed rulemaking addressing potential regulatory and policy changes that would effect existing BIS deemed export licensing practices (70 FR 15607). BIS is continuing to seek comments on how these revisions would impact industry, the academic community, and U.S. government agencies involved in research. The new comment period deadline is June 27, 2005.

 

  1. Licensing Policy for Entities Sanctioned Under Specified Statutes; License Requirement for Certain Sanctioned Entities; and Imposition of License Requirement for Tula Instrument Design Bureau (70 FR 33693 on June 9, 2005)

Commentary: On March 7, 2005, BIS published an interim final with a request for comments, stating BIS’s licensing policy regarding transactions involving entities sanctioned by the State Department under three specified statues, imposed a new license requirement for certain entities sanctioned by the State Department, and identified one specific entity subject to this new license requirement, Tula Instrument Design Bureau of Russia (70 FR 10865). In addition, the rule added Tula to the Entity List (Supplement No. 4 to part 744 of the EAR).

This rule makes final the March 7, 2005 interim rule, without change.

 

  1. December 2004 Wassenaar Arrangement Plenary Agreement Implementation: Categories 1, 2, 3, 4, 5 Part 1 (Telecommunications), 6, 7, 8, and 9 of the Commerce Control List; Wassenaar Reporting Requirements; Definitions; and Certain New or Expanded Export Controls (70 FR 41094 on July 15, 2005)

Commentary: BIS has published a final rule to make the necessary changes to the CCL, definitions of terms used in the EAR, and Wassenaar reporting requirements to implement Wassenaar List revisions that were agreed upon in the December 2004 Wassenaar Arrangement Plenary Meeting. In addition this rule adds Slovenia to the list of Wassenaar member countries in the EAR. This rule also adds or expands unilateral U.S. controls on certain items consistent with the amendments made to implement the Wassenaar Arrangement’s decision.

This rule revises a number of entries on the CCL to conform to the December 2004 agreed revisions to the Wassenaar List of Dual-Use Goods and Technologies. This rule also revises language to provide a complete or more accurate description of controls. The ECCNs affected include: 1C008, 2B001, 2B005, 2B006, 2B201, 3A001, 3A001, 3A002, 3B001, 3B002, 3B991, 3B992, 4D001, 4E001, 5A001, 6A001, 6A002, 6A003, 6A006, 6A993, 6A996, 6E001, 6E002, 6E003, 6E991, 6E993, 7A002, 7A007, 8A002, and 9A001.

Within Category 3 — Electronics, this rule amends 3A001.a.3.c for microprocessor microcircuits, micro-computer microcircuits, and microcontroller microcircuits by increasing the controlling number of data or instruction bus or serial communication ports from “one” to “three,” and increasing the direct external interconnection between parallel microprocessor microcircuits from a transfer rate exceeding “150 Mbyte/s” to “1000 Mbyte/s or greater.” The revision to 3A001.a.3.c expands the availability of License Exception CIV for deemed exports of technology for the development or production of 3A001.a.3.c commodities, as described in 3E001.

Also in Category 3, ECCN 3A001.a.5.a is revised for analog-to-digital (A-D) converter integrated circuits to reduce control interpretation ambiguities across various A-D architectures. ECCN 3A002.c is revised to decontrol certain signal analyzers by replacing the 31.8-37.5 GHz range frequency blackout that was agreed to in December 2002 with controls based on resolution bandwidth. This action is complementary to and consistent with the controls on signal generators agreed to by the Wassenaar Arrangement in December 2003. ECCN 3B002 is amended by removing the term “stored program controlled” from the heading. This term is removed because most equipment is computer controlled now and the term no longer adds any value to the control. ECCN 3B002 is further amended by removing and reserving 3B002.b, including the Note and Technical Note.

Within Category 4 — Computers, this rule makes various editorial corrections in addition to amending 4D001 to remove the License Requirement Note that provided a reference to Wassenaar reporting requirements for computer software under ECCN 4D001. ECCN 4D001 is also amended to raise the CTP limit from “33,000 MTOPS” to “190,000 MTOPS” in the License Exception TSR eligibility paragraph under the License Exception section of ECCN 4D001. In addition, this rule also raises the composite theoretical performance (CTP) control threshold for software for the production, development, or use of computers from “28,000 MTOPS” to “75,000 MTOPS” in 4D001.b.1. Subsequently, ECCN 4E001 is amended to raise the CTP limit from “33,000 MTOPS” to “190,000 MTOPS” in the License Exception TSR eligibility paragraph under the License Exception section of 4E001; as well as raise the composite theoretical performance (CTP) control threshold for technology for the production, development, or use of computers from “28,000 MTOPS” to “75,000 MTOPS” in 4E001.b.1.

Within Category 5 – Part I, amendments include increasing the operating frequency for electronically steerable phased array antennae from “31 GHz” to “31.8 GHz” in paragraph 5A001.d which was overlooked in 2003, when all frequency control units in Categories 3 and 5 were changed from 31 GHz to 31.8 GHz.

Additionally, this rule moves ECCN 7A007 to 5A001.e –direction finding equipment operating at frequencies above 30 MHz, and having other characteristics set forth in 5A001.e.1 through e.3, and specially designed components therefor. It also add a note to the Related Controls paragraph in the List of Items Controlled section that states, “Direction finding equipment defined in 5A001.e is subject to the export licensing authority of the Department of State, Directorate of Defense Trade Controls (22 CFR part 121).” Direction finding equipment defined in 5A001.e is specifically excluded from eligibility for License Exceptions LVS, GBS, and CIV, because this equipment will remain under the jurisdiction of the Department of State, Directorate of Defense Trade Controls.

Within Category 6 – this rule imposes a unilateral U.S. license requirement to export and reexport commodities (and related software and technology) controlled under ECCNs 6A001.a.2.a.3.b, 6A001.a.2.a.3.c, 6A001.a.2.a.6, 6A002.a.3.f, 6A003.b.4.b, 7A002.b for AT reasons to Cuba, Iran, Libya, North Korea, Sudan and Syria, in addition to the national security controls imposed to implement the Wassenaar Arrangement’s decisions.

This rule also imposes a unilateral U.S. license requirement to export and reexport commodities (and related technology) controlled under ECCNs 6A002.a.3.f and 6A003.b.4.b for Regional Stability (RS) reasons to all countries, except Canada, in addition to the national security controls imposed to implement the Wassenaar Arrangement’s decisions. These destinations have an “X” indicated in RS column 1 on the Commerce Country Chart of Supplement No. 1 to part 738. Applications to export and reexport these commodities will be reviewed on a case-by-case basis to determine whether the export or reexport could contribute directly or indirectly to any country’s military capabilities in a manner that would alter or destabilize a region’s military balance contrary to the foreign policy interests of the United States. For designated terrorism-supporting countries, the applicable licensing policies are found in parts 742 and 746 of the EAR.

Additionally, this rule imposes a license requirement to export and reexport commodities (and related technology) controlled under ECCN 6A002.a.3.f for UN reasons to Rwanda in addition to the national security controls imposed to implement the Wassenaar Arrangement’s decisions. The U.S. Government has a general policy of denial for export or reexport of certain items, including 6A002.a.3, to Rwanda. However, proposed exports or reexports to the Government of Rwanda are reviewed on a case-by-case basis. The implementation of UN controls under 6A002.a.3.f, indirectly expands the UN controls under ECCNs 6A003.b.4, 6E001, and 6E002.

This rule also imposes a license requirement under Section 742.4(a) of the EAR for exports and reexports of commodities (and related software and technology) described in ECCNs 6A001.a.2.a.3.b, 6A001.a.2.a.3.c, 6A001.a.2.a.6, 6A002.a.3.f, and 6A003.b.4.b to all destinations that are not Country Group A:1 or cooperating countries (see Supplement No. 1 to part 740). These destinations have an “X” indicated in NS column 2 on the Commerce Country Chart of Supplement No. 1 to part 738. The purpose of the controls is to ensure that these items do not make a contribution to the military potential that would prove detrimental to the national security of the United States.

The licensing policy for national security controlled items exported or reexported to any country except a country in Country Group D:1 (see Supplement No. 1 to part 740) is to approve applications unless there is a significant risk that the items will be diverted to a country in Country Group D:1. The general policy for exports and reexport of items to Country Group D:1 is to approve applications when BIS determines, on a case-by-case basis, that the items are for civilian use or would otherwise not make a significant contribution to the military potential of the country of destination that would prove detrimental to the national security of the United States.

In addition, this rule amends Section 740.7 License Exception Computers (CTP) to raise the Composite Theoretical Performance (“CTP”) Eligibility limit from 75,000 MTOPS to 190,000 MTOPS for deemed exports of computer technology and source code to foreign nationals of Computer Tier 3 destinations, because doing so will assist the computer industry in the area of research and development to advance computer technology, and because it will not adversely affect the national security of the United States. Certain deemed exports to Computer Tier 3 foreign nationals are subject to a Foreign National Review requirement.

This rule also revises Section 740.11 and Supplement No. 1 to Part 740.11 — License Exception GOV by removing the restrictions for computer software classified under ECCN 4D001 and computer technology under ECCN 4E001 under License Exception GOV for: (1) The official use of any agency of a cooperating government within the territory of any cooperating government; (2) the official use of a diplomatic or consular mission of a cooperating government located in any country in Country Group B (see Supplement No. 1 to part 740); and (3) the official international safeguard use of the International Atomic Energy Agency (IAEA) and the European Atomic Energy Community (Euratom). However, the access of computer restriction by nationals of countries in Country Group E:1 will be retained in a new paragraph 740.11(a)(4).

In addition, this rule removes computers from the list of items excluded from eligibility under License Exception GOV to the Organization for Prohibition of Chemical Weapons (OPCW). However, the access of computer restriction by nationals of countries in Country Group E:1 will be retained in a new paragraph 740.11(c)(4).

For a detailed list of revisions as the result of the Wassenaar Arrangement Plenary Agreement, please refer to the above cited register notice.

 

  1. Exports of Nuclear Grade Graphite: Change in Licensing Jurisdiction (70 FR 41952 on July 21, 2005)

Commentary: BIS has published a final rule to make nuclear grade graphite intended for non-nuclear end uses subject to the Export Administration Regulations’ licensing jurisdiction, and imposes a license requirement for exports and reexports to destinations of concern for nuclear proliferation reasons. The Nuclear Regulatory Commission (NRC) is discontinuing such jurisdiction. This transfer of jurisdiction and the imposition of license requirements only to destinations of concern for nuclear proliferation reasons are intended to remove the licensing burden on exporters of nuclear grade graphite intended for non-nuclear end uses to most destinations.

 

  1. December 2004 Wassenaar Arrangement Plenary Agreement Implementation: Categories 1, 2, 3, 4, 5 Part 1 (Telecommunications), 6, 7, 8, and 9 of the Commerce Control List; Wassenaar Reporting Requirements; Definitions; and Certain New or Expanded Export Controls (70 FR 43041 on July 26, 2005)

This document corrects an inadvertent typographical error contained in ECCN 3A002 (General purpose electronic equipment, as follows (see List of Items Controlled)) on the CCL. Specifically, this document corrects paragraph 3A002.b by removing a comma that appears between the terms “Frequency synthesizer” and “electronic assemblies”. The removal of the comma corrects paragraph 3A002.b in conformity with language agreed upon in the December 2004 Wassenaar Arrangement Plenary Meeting.

This document also corrects a statement of the license requirements for deemed export license applications found in the Background section of the July 15 final rule. Specifically, the Background section of the July 15 final rule included an explanation of amendments to Section 740.7 (License Exception Computers (CTP)) of the EAR. That explanation included the following statement, “Applications for foreign nationals with temporary or permanent residence status of a third country (i.e., non-U.S. and a temporary or permanent residence status other than a foreign national’s country of origin) should be based on the foreign national’s country of citizenship.” This is not correctly stated; such license applications should be based on the most recently established residency.

 

  1. Implementation of the Understandings Reached at the April 2005 Australia Group (AG) Plenary Meeting (70 FR 45276 on August 5, 2005)

Commentary: BIS has published a final rule amending the EAR to implement the understandings reached at the April 2005 plenary meeting of the Australia Group (“AG”). Specifically, this final rule amends the EAR to implement changes to the AG “Control List of Dual-Use Chemical Manufacturing Facilities and Equipment and Related Technology” by revising the CCL entry that controls certain pumps that can be used to make chemical weapons or AG-controlled precursor chemicals. This rule also amends the EAR to implement changes to the AG “Control List of Dual-Use Biological Equipment” by revising the CCL entry that controls equipment capable of use in handling biological materials to add certain spraying or fogging systems, spray booms or arrays of aerosol generating units, and components therefore. This rule also amends the CCL entry that controls certain genetic elements and genetically modified organisms by revising the Technical Note in the entry.

In addition, this rule amends the EAR to reflect the addition of Ukraine to the Australia Group and updates the definition of “Australia Group” in the EAR to include a current listing of all participating countries. This rule updates the list of countries that currently are States Parties to the Chemical Weapons Convention (“CWC”) by adding “Niue,” which recently became a State Party. As a result of this change, the Chemical Weapons (“CW”) license requirements and policies in the EAR that apply to Niue now conform with those applicable to other CWC States Parties. This rule also clarifies the entry for the “Netherlands” on the list of CWC States Parties by adding a footnote to this entry to indicate that, for CWC purposes only, the Netherlands includes “Aruba and the Netherlands Antilles.” Finally, this rule further updates the list by removing “Yugoslavia (Federal Republic of)” and replacing it with “Serbia and Montenegro.”

 

  1. Removal of License Requirements for Exports and Reexports to India of Items Controlled Unilaterally for Nuclear Nonproliferation Reasons and Removal of Certain Indian Entities From the Entity List (70 FR 51251 on August 30, 2005)

Commentary: BIS, as a result of completion of the Next Steps in Strategic Partnership (“NSSP”) with India, has published a final rule to implement two steps the United States has agreed to take as part of the final phase of NSSP, namely, the removal of license requirements for export and reexports of items controlled for nuclear nonproliferation reasons to India and the removal of six Indian entities from the Entity List.

Specifically, this rule removes export and reexport license requirements for items controlled unilaterally by the United States for nuclear nonproliferation reasons (i.e., items that are not subject to the Nuclear Suppliers Group regime). The rule accomplishes this change by revising Sec. 742.3(a)(2) to except India from this license requirement and by removing the “X” from the box at the intersection of the row for India and the column labeled NP 2 of the Commerce Country Chart (Supplement No. 1 to Part 738 of the EAR). Removal of export license requirements for these items is expected to reduce the number of license applications for exports and reexports to India.

This rule also removes six Indian entities from the Entity List (Supplement No. 4 to Part 744 of the EAR). Three of these entities are Department of Atomic Energy entities, “Tarapur (TAPS 1 & 2),” “Rajasthan (RAPS 1& 2),” and “Kudankulam (1 & 2).” TAPS 1 & 2 and RAPS 1 & 2 are under International Atomic Energy Agency (“IAEA”) safeguards. Kudankulam 1 & 2 is under construction, and will be subject to IAEA safeguards upon completion. The other three entities are Indian Space Research Organization (“ISRO”) subordinate entities, specifically, “ISRO Telemetry, Tracking and Command Network (ISTRAC),” “ISRO Inertial Systems Unit (IISU), Thiruvananthapuram,” and “Space

Applications Center (SAC), Ahmadabad.”

Neither the removal of the unilateral nuclear nonproliferation license requirement nor the removal of the entities from the Entity List by this rule removes any other license requirements imposed by the EAR. Among others, the end use license requirements of Part 744, including the license requirements for the nuclear end uses specified in Sec. 744.2, 744.5 and 744.6, and missile end use license requirements specified in Sec. 744.3 and 744.6, continue to apply. This rule also does not affect license requirements related to entities that remain on the Entity List. For certain of those entities, a license is required for all items subject to the EAR; for others, a license is required for items with a classification other than (1) EAR99 or (2) where the third through fifth digits of the ECCN are “999.” BIS strongly urges parties to consult Supplement No. 3 to Part 732 of the EAR, “BIS’s “Know Your Customer” Guidance and Red Flags,” when exporting or reexporting items to India.

 

  1. Revisions and Clarifications to the Export Administration Regulations (70 FR 54626 on September 16, 2005)

Commentary: BIS has published a final rule amending various sections of the EAR. First, this rule deletes a redundant paragraph and redesignates the remaining paragraphs in Supplement No. 2 to Part 736 of the EAR. This rule also inserts material inadvertently omitted from previous rules in three places in the EAR.

In addition, this rule clarifies instructions for applying for authorization to transfer items subject to the EAR in-country using the BIS Multipurpose Application (Form 748-P) and its electronic equivalent in the Simplified Network Application Process (SNAP). These clarifications add specific instructions for filling out applications for in-country transfers in Supplement No. 2 to Part 748.

BIS is also revising Supplement No. 4 to Part 744 (Entity List) to revise the entry for the Beijing University of Aeronautics and Astronautics (BUAA) by adding an alias, Beihang University. This alias is added because the Chinese name for BUAA is sometimes translated to English as Beihang University. The Entity List now notifies the public that a license is required for the export or reexport of all items subject to the EAR to the “Beijing University of Aeronautics and Astronautics (BUAA), a.k.a. Beihang University”.

Finally, in Section 742.18, references to ECCNs 2B994 and 2C994 are removed, and references to ECCNs 2D994 and 2E994 are added. This corrects an error in the items controlled for AT reasons within the Country Chart to North Korea which was amended in June 2000 (65 FR 38148, June 19, 2000).

 

  1. Effects of Foreign Policy-Based Export Controls (70 FR 59678 on October 13, 2005)

Commentary: BIS is reviewing the foreign policy-based export controls in the EAR to determine whether the controls should be modified, rescinded or extended. BIS is seeking comments on how existing foreign policy-based export controls have affected exporters and the general public. The current foreign-policy based controls maintained by BIS are set forth in the EAR, including in Parts 742 (CCL Based Controls), 744 (End-Use and End-User Based Controls) and 746 (Embargoes and Special Country Controls). Under the provisions of section 6 of the Export Administration Act of 1979, as amended, export controls maintained for foreign policy purposes require annual extension. The specific criteria considered for determining whether to continue or revise U.S. foreign policy-based controls are included in the attached Federal Register notice. BIS is specifically interested in the experience of individual exporters in complying with the proliferation controls, with emphasis on economic impact and specific instances of business lost to foreign competitors. Comments are due November 14, 2005.

 

  1. Technical Correction (70 FR 62237 on October 31, 2005)

Commentary: BIS has published a final rule amending the EAR to correct an inadvertent error that the final rule of September 16, 2005 made in redesignating several paragraphs. This correction ensures that paragraphs in Supplement No. 2 to Part 736 of the EAR are consistently designated.

 

  1. Revision to the Unverified List – Guidance as to “Red Flags” (70 FR 62295 on October 31, 2005)

Commentary: BIS has published a notice adding five entities to the Unverified List. The entities are: T.Z.H. International Co. Ltd., Room 23, 2/F, Kowloon Bay Ind Center, No. 15 Wany Hoi Rd, Kowloon Bay, Hong Kong, Special Administrative Region; Design Engineering Center, House 184, Street 36, Sector F-10/1, Islamabad, Pakistan; Kantry, 13/2 Begovaya Street, Moscow, Russia 125284; Elaton Company, 20B Berezhkovskaya Naberezhnaya, Moscow, Russia; and Pskovenergo Service, 47-A Sovetskaya Street, Pskov, Russia Federation, 18000.

 

  1. Revision of License Requirements and Licensing Policy, and Increased Availability of License Exceptions for Certain North Atlantic Treaty Organization (NATO) Member States (70 FR 67346 on November 7, 2005)

Commentary: BIS has published a final rule amending certain provisions of the EAR that affect Bulgaria, Czech Republic, Estonia, Hungary, Iceland, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia acceded to NATO on March 29, 2004. Specifically, this rule amends the EAR to provide for these new NATO member states and for three other NATO member states, Hungary, Iceland, and Poland, treatment consistent with all other NATO member states with respect to national security license requirements (§742.2(a)) and Supplement No. 1 to Part 738 (Country Chart). This rule also removes Bulgaria, Estonia, Latvia and Lithuania from General Prohibition Eight, which concerns certain in-transit transactions (§736.2(b)(8)), and removes restrictions on License Exceptions related to crime control from Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Poland, Romania, Slovakia, and Slovenia (§740.2).

In addition, this final rule adds Bulgaria, Estonia, Latvia, Lithuania and Romania to Country Group B, and removes them from Country Group D:1 (Supplement No. 1 to Part 740). Exports to these countries are now eligible for certain license exceptions set forth in Part 740, and the national security licensing policy set forth in §742.2(b) for Country Group D:1 countries no longer applies. The Czech Republic, Iceland, Poland, Slovakia and Slovenia have been included in Country Group B since it was created in 1996. Finally, this rule makes certain technical and conforming amendments to other provisions of the EAR that refer to NATO member states or to individual countries that are now NATO member states.

 

  1. Impact of Implementation of the Chemical Weapons Convention on Commercial Activities Involving “Schedule 1” Chemicals Through Calendar Year 2005 (70 FR 67661 on November 8, 2005)

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 2005. 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 due December 6, 2005.

 

  1. Establishment of New License Exception for the Export or Reexport to U.S. Persons in Libya of Certain Items Controlled for Anti-Terrorism Reasons Only on the Commerce Control List (70 FR 69432 on November 16, 2005)

Commentary: BIS has published an interim rule amending the EAR to implement changes to export and reexport controls with respect to Libya. This rule is consistent with the President’s decision to modify United States’ sanctions against Libya, in response to Libya’s continuing efforts to dismantle its weapons of mass destruction (WMD) and missile programs and its renunciation of terrorism. Comments are due December 16, 2005.

Specifically, in this rule, BIS has established a new License Exception United States Persons in Libya (USPL) authorizing the export and reexport to U.S. persons in Libya of certain items listed on the CCL and controlled for anti-terrorism (AT) reasons only. These items eligible under the license exception are widely available outside the United States, and have a low likelihood to contribute significantly to terrorism or WMD-related activities in Libya.

The following items are eligible for License Exception USPL, as set forth in new §740.19 of the EAR, when those items are exported or reexported to Libya consigned to and for use by U.S. persons and their employees only. The definition of U.S. person set forth in part 772 of the EAR is applicable to this new provision.

All items controlled under the following ECCNs:

  1. 2A994;
  2. 5A992;
  3. 5D992; and
  4. 9A990

Other items, as follows:

  1. 3A991a through 3A991.j, and 3A991.n;
  2. 3A992b.1, 3A992.b.2 and 3A992.c;
  3. 3A992b;
  4. 4A994, for items with CTP levels up to 12,000 MTOPS; and
  5. 5A991b.2, 5A991.b.3, 5A991.b.4, 5A991.b.7, 5A991.c.1 through c.9, 5A991.e, 5A991.g and 5A991.h.

Items exported or reexported to Libya pursuant to the new License Exception USPL may only be used by U.S. persons or by non-U.S. person employees within the scope of their employment and must remain under the control and supervision of the U.S. person employer. They may not be transferred to non-U.S. persons in Libya.

Additionally, items exported or reexported to Libya pursuant to License Exception USPL and not consumed or destroyed in the ordinary course of business may be returned to the United States without authorization from BIS, or such items may be reexported to a third country consistent with the provisions of the EAR applicable to such reexports, which in some cases may require authorization from BIS.

Libya remains on the list of state sponsors of terrorism, and, therefore, it is appropriate for the United States to continue to require a license for the export or reexport to non-U.S. persons in Libya of AT-controlled items, as set forth in section 742.20. Further, AT-controlled items not specifically identified as eligible under License Exception USPL continue to require a license if exported or reexported to U.S. persons in Libya.

 

  1. Revisions to the Import Certificate Requirements in the Export Administration Regulations (70 FR 72073 on December 1, 2005)

Commentary: The Bureau of Industry and Security (“BIS”) is removing the requirement to obtain an Import Certificate in support of an export or reexport license when the ultimate consignee or purchaser is a foreign government or agency of Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovakia, and India. The requirement is being removed for Bulgaria Czech Republic, Hungary, Poland, Romania, and Slovakia because of their membership in the North Atlantic Treaty Organization (NATO) and their commitment to export controls, as is reflected by their membership in multiple export control regimes, such as the Wassenaar Arrangement, the Australia Group, the Missile Technology Control Regime, and Nuclear Suppliers Group.

This requirement is being removed for India because of the actions it has taken under the U.S.-India Next Steps in Strategic Partnership (NSSP). In light of the actions taken by the Government of India with regard to controlled goods or technologies it imports from the United States pursuant to the NSSP, this rule removes the Import Certificate requirement for exports to Indian Government entities under section 748.9(a)(2).

 

  1. Correction to “Revision to the Unverified List—Guidance as to ‘Red Flags’” (70 FR 72983 on December 8, 2005)

Commentary: BIS published a Federal Register Notice on October 31, 2005 (Federal Register, Vol. 70, No. 209, page 62295), entitled “Revision to the Unverified List—Guidance as to ‘Red Flags’”. This notice inadvertently included a misspelling of the name of one Entity. “Elaton Company” should have been spelled “Etalon Company”. The Notice advises exporters that the correct information for this Entity is: Etalon Company, 20B Berezhkovskaya Naberezhnaya, Moscow, Russia.