[Federal Register Volume 76, Number 234 (Tuesday, December 6, 2011)]
[Proposed Rules]
[Pages 76085-76096]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30976]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 742, 770 and 774
[Docket No. 110310188-1621-02]
RIN 0694-AF17
Revisions to the Export Administration Regulations (EAR): Control
of Military Vehicles and Related Items That the President Determines No
Longer Warrant Control on the United States Munitions List
AGENCY: Bureau of Industry and Security, Department of Commerce.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Bureau of Industry and Security publishes a third proposed
rule that describes how articles the President determines no longer
warrant control under Category VII (military vehicles and related
articles) of the United States Munitions List (USML) would be
controlled under the Commerce Control List (CCL). This proposed rule
would re-propose, with certain changes, five new Export Control
Classification Numbers (ECCNs) on the Commerce Control List (CCL) that
were proposed in a proposed rule published on July 15, 2011 (76 FR
41958). The revised ECCNs in this proposed rule are the result of
continued deliberations of the Bureau of Industry and Security, the
Department of Defense and the Department of State and recommendations
of commenters on the July 15 proposed rule. This proposed rule is being
published in conjunction with a proposed rule by the Department of
State, Directorate of Defense Trade Controls to remove from Category
VII of the USML (22 CFR 121.1, Category VII) articles that the
President determines no longer warrant control on the USML.
DATES: Comments must be received by January 20, 2012.
ADDRESSES: You may submit comments by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
The identification number for this rulemaking is BIS-2011-0040.
By email directly to: [email protected]. Include
RIN 0694-AF17 in the subject line.
By mail or delivery to: Regulatory Policy Division, Bureau
of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th
Street and Pennsylvania Avenue NW., Washington, DC 20230. Refer to RIN
0694-AF17.
FOR FURTHER INFORMATION CONTACT: Gene Christiansen, Office of National
Security and Technology Transfer Controls, 202 482 2984,
[email protected].
SUPPLEMENTARY INFORMATON:
Background
On July 15, 2011, as part of the Administration's ongoing Export
Control Reform Initiative, the Bureau of Industry and Security (BIS)
published a proposed rule (76 FR 41958) that set forth a framework for
how articles the President determines, in accordance with section 38(f)
of the Arms Export Control Act (AECA) (22 U.S.C. 2778(f)), would no
longer warrant control on the United States Munitions List (USML) would
be controlled on the Commerce Control List (CCL). In that proposed
rule, BIS also described its proposal for how military vehicles and
related articles in USML Category VII that no longer warrant controls
under the USML would be controlled on the CCL. On November 7, 2011, BIS
published a proposed rule (76 FR 68675)) that sets forth how aircraft
and related items the President determines to no longer warrant control
on the USML would be controlled on the CCL (herein, the aircraft
proposed rule). In that proposed rule, BIS made several changes and
additions to the framework proposed in the July 15 proposed rule.
Following the structure of the July 15 proposed rule, as modified by
the rule published on November 7, this proposed rule describes BIS's
revised proposal for how various military vehicles and related articles
that are controlled by USML Category VII would be controlled on the
CCL.
The changes described in this proposed rule and the State
Department's proposed amendment to Category VII of the USML are based
on a review of Category VII by the Defense Department, which worked
with the Departments of State and Commerce in preparing the proposed
amendments. The review was focused on identifying the types of articles
that are now controlled by USML Category VII that either (i) Are
inherently military and otherwise warrant control on the USML, or (ii)
if of a type common to civil vehicles, possess parameters or
characteristics that provide a critical military or intelligence
advantage to the United States and that are almost exclusively
available from the United States. For articles that satisfy one or both
of those criteria, the review resulted in the article's remaining on
the USML. An article that did not satisfy either standard but was
nonetheless a type of article that is, as a result of differences in
form and fit, ``specially designed'' for military applications, would
be identified in the new ECCNs proposed in this notice.
The license requirements and other EAR-specific controls for such
items also described in this notice would enhance national security by
(i) Allowing for greater interoperability with our NATO and other
allies while still maintaining and expanding robust controls and, in
some cases, prohibitions on exports or reexports to other countries and
for proscribed end users and end uses; (ii) enhancing our defense
industrial base by, for example, reducing the current incentives for
foreign companies to design out or avoid U.S.-origin ITAR-controlled
content, particularly with respect to generic, unspecified parts and
components; and (iii) permitting the U.S. Government to focus its
resources on controlling, monitoring, investigating, analyzing, and, if
need be, prohibiting exports and reexports of more significant items to
destinations, end uses, and end users of greater concern than our NATO
allies and other multi-regime partners.
Pursuant to section 38(f) of the AECA, the President shall review
the USML ``to determine what items, if any, no longer warrant export
controls under'' the
[[Page 76086]]
AECA. The President must report the results of the review to Congress
and wait 30 days before removing any such items from the USML. The
report must ``describe the nature of any controls to be imposed on that
item under any other provision of law.'' 22 U.S.C. 2778(f)(1). This
proposed rule describes how certain military vehicles and related
articles in USML Category VII would be controlled by the EAR and its
CCL if the President determines that the articles no longer warrant
control on the USML.
In the July 15 proposed rule, BIS proposed creating a series of new
ECCNs to control articles that would be moved from the USML to the CCL
or that are Wassenaar Arrangement on Export Controls for Conventional
Arms and Dual-Use Goods and Technologies Munitions List (WAML) items
already controlled elsewhere on the CCL. The proposed rule referred to
this series as the ``600 series'' because the third character in each
of the new ECCNs would be a ``6.'' The first two characters of the 600
series ECCNs serve the same function as any other ECCN as described in
Sec. 738.2 of the EAR. The first character is a digit in the range 0
through 9 that identifies the Category on the CCL in which the ECCN is
located. The second character is a letter in the range A through E that
identifies the product group within a CCL Category. In the 600 series,
the third character is the number 6. With few exceptions, the final two
characters identify the WAML category that covers items that are the
same or similar to items in a particular 600 series ECCN.
The July 15 proposed rule specifically proposed creating five new
``600 series'' ECCNs (0A606, 0B606, 0C606, 0D606 and 0E606). This
proposed rule re-proposes, with certain changes, those ECCNs based on
review of the public comments on the July 15 proposed rule and on
further deliberations by BIS, the Department of Defense and the
Department of State.
BIS will publish additional Federal Register notices containing
proposed amendments to the CCL that will describe proposed controls for
additional categories of articles the President determines no longer
warrant control under the USML. The State Department will publish
concurrently proposed amendments to the USML that correspond to the BIS
notices. BIS will also publish proposed rules to further align the CCL
with the WAML and the Missile Technology Control Regime Equipment,
Software and Technology Annex.
Comments Regarding ECCNs 0A606, 0B606, 0C606, 0D606 and 0E606 in the
July 15 Proposed Rule
The comment period for the July 15 proposed rule ended on September
13, 2011. Some of the comments that BIS received concerned exclusively
the text of the proposed new ECCN 0A606, 0B606, 0C606, 0D606 and 0E606.
BIS has adopted some of the recommendations in those comments and
incorporated them into this proposed rule. BIS will continue to
consider some of those comments and will make a decision whether or not
to adopt their recommendations in any final rule concerning those new
ECCNs.
Comment 1
Two commenters recommended removing the modifier ``non-combat''
from the description of military support vehicles in 0A606.b.5 so that
any combat vehicles that are not described in the USML will not
inadvertently become EAR99. One commenter offered the additional
rationale that that the distinction between combat and non-combat
military vehicles is not always clear. Some vehicles such as tow trucks
and ambulances may have armor and be used in combat zones.
Response
BIS has not adopted this recommendation exactly as proposed, but
has modified proposed ECCN 0A606 in a way that it believes would
address the concerns of these commenters. As modified, ECCN 0A606 would
apply explicitly to military vehicles not listed in Category VII of the
USML. BIS believes that the explicit requirement that a military
vehicles not be on the USML in order to be classified under 0A606
reduces the likelihood that a reader would conclude that vehicles not
classified under 0A606 are EAR99. The modified ECCN 0A606 also does not
use the phrase ``non-combat,'' which eliminates the need to make
decisions as to whether a particular military vehicle is also a combat
vehicle.
Comment 2
These same commenters in Comment 1 recommending adding the phrase
``not on the USML'' to 0A606.x and .y because, absent such a statement,
unwary readers might conclude that parts and components not elsewhere
in paragraphs .x or .y are EAR99 when they might in fact be listed on
the ITAR. Another commenter noted that exclusions in some of the items
listed in paragraph .y might lead readers to conclude that the excluded
item is EAR99. This commenter also recommended language making clear
that items in paragraph .y are not those that are not listed on the
ITAR.
Response
BIS agrees and has included the phrase ``not elsewhere specified on
the USML or CCL'' in both paragraphs .x and .y.
Comment 3
Two commenters recommended listing the ECCN paragraphs to which a
control applies (or does not apply) in the ``Control(s)'' column within
an ECCN rather than in the ``Country Chart'' column.
Response
The structure that these commenters recommended is already used
throughout the CCL. BIS has used it for this proposed rule and expects
to use for other proposed rules relating to control of items that the
President determines no longer warrant control on the United States
Munitions List.
Comment 4
One commenter noted that a number of parts and components currently
controlled by 9A018 would, under the proposed text of ECCN 0A606 and
the proposed definition of ``specially designed,'' move to new ECCN
0A606.x, which would make them ineligible for License Exception LVS
because proposed ECCN 0A606 allows that license exception for 0A606.a,
.b and .c only. This commenter also stated that the new definition of
specially designed would require it to obtain licenses for exports to
Country Group B countries.
Response
BIS acknowledges that this is an unintentional consequence of ECCN
0A606 and has revised this ECCN to make License Exception LVS, which
allows limited value shipments to Country Group B, available for all
commodities classified under proposed ECCN 0A606 including those
currently found in ECCN 9A018. BIS notes that License Exception GBS,
which authorizes shipments to Country Group B without value limits,
currently is not available for commodities classified under ECCN 9A018.
Thus the movement of items from ECCN 9A018 to 0A606 does not affect
eligibility for exports under License Exception GBS.
Comment 5
One commenter recommended that regional stability controls not
apply to ECCN 0A606.a. The commenter noted that the items that would be
classified under that proposed paragraph currently are classified under
0A018.a
[[Page 76087]]
and not subject to any regional stability reason for control. The
commenter stated that it is not aware of any compelling reason for a
change in policy for these items.
Response
BIS acknowledges that some commodities currently classified under
0A018.a (therefore not subject to a regional stability reason for
control) and other commodities currently classified under 9A018.b
(therefore subject to the regional stability column 2 reason for
control) would, under the July 15 rule, be classified under ECCN 0A606
and therefore would be subject to the regional stability column 1 (RS
1) reason for control. However, BIS believes that the impact of this
change on the public would be both reasonable and justified in light of
the nature of the commodities that would be affected, and is not
proposing any changes to ECCN 0A606 as proposed in the July 15 rule.
Currently ECCN 0A018.a and 9A018.b are subject to the national
security column 1 (NS 1) reason for control. Both the NS1 and RS 1
reasons for control impose a license requirement for all destinations
other than Canada. However, licensing policy for the two reasons are
different. The national security licensing policy is focused on risk of
diversion to Country Group D:1 destinations. The RS 1 licensing policy
is focused on preventing enhancement of military capabilities that
would alter or destabilize a region's stability contrary to the
interests of the United States. All commodities that would be subject
to the RS 1 reason for control in proposed ECCN 0A606 are inherently
military and, therefore, any export of these items can be expected to
enhance some country's military capability. Because of this inherently
military nature, BIS believes that application of the more
comprehensive RS 1 licensing policy in addition to the more traditional
NS 1 licensing policy is justified.
Comment 6
One commenter recommended that 0A606.x be limited to specific
``parts,'' ``components,'' ``accessories and attachments'' that are
``specially designed'' for a commodity subject to control in this ECCN
or a defense article in USML Category VII that has military application
with no civil equivalent. That commenter provided an illustrative list
of items that, in its opinion, have military application with no civil
equivalent. That list consisted of:
Weapon systems (including mounting. targeting. and
stabilization systems);
Sensor systems (other than collision avoidance or parking
sensors systems); and
Communication systems (other than communication systems
designed to work with civil communication systems).
This commenter also recommended that paragraph .y be made into an
illustrative list of items that have little or no military significance
or no civil equivalent and that the list in paragraph .y should include
only items with military significance. Items with no military
significance should be EAR99.
Response
The purpose of the controls in a .y paragraph is to create a
specific, clear, and exclusive list of parts and components that are so
militarily insignificant that they do not warrant NS1 or RS1 controls,
even if those parts or components are ``specially designed'' for a
defense article on the USML or for an item in another paragraph of the
ECCN that includes that .y paragraph. Turning such a list into an
illustrative list would create significant doubts among exporters and
government officials regarding precisely which items were subject to
its controls. Thus, BIS did not accept this recommendation.
Comment 7
One commenter recommended that paragraph .x be either a positive
list of parts and components that are militarily significant or a list
of the characteristics that make a part militarily significant.
Response
As described in the State Department's proposed rule amending USML
Category VII (which is being published simultaneously with this
proposed rule), paragraph (g) for Category VII, which has historically
contained a catch-all control for all parts, components, accessories,
or attachments ``specifically designed or modified'' in any way for a
defense article in Category VII, would be replaced by a positive list
of parts, components, accessories, and attachments that would be
controlled by the proposed revised paragraph VII(g). Thus, this
proposed amendment is consistent with the Administration's goal of
creating, to the extent possible, positive lists of controlled items--
i.e., controlling items without using broad, design-intent based catch-
all controls over generic types of items such as ``parts'' and
``components.'' However, another Administration objective is to make
sure that items ``specially designed'' for defense articles that are
now USML controlled items but that would not be USML controlled items
after any proposed jurisdictional changes not fall out of export
controls completely. This is why the proposed .x controls in each of
the new 600 series ECCNs control all parts, components, accessories,
and attachments ``specially designed'' for a defense article in the
corresponding USML category or that ECCN. Thus, BIS rejected this
recommendation.
Comment 8
Three commenters proposed function tests for identifying items to
be included in 0A606 paragraph .y as follows:
The same commenter in Comment 7 recommended that if paragraph .x
cannot to be made into a positive list, certain items should be added
to paragraph .y. These items are common (in function) to items widely
used in civilian vehicles. They include gauges such as speedometers;
instrument panels/clusters; vehicle/engine sensors; vehicle engine
monitoring sensors and displays such as check engine lights and their
associated sensors; electronic braking systems; multiplexing systems to
limit vehicle wiring; tire pressure monitoring systems; and data
relating to tires (not including run-flats). Although these items might
have to be modified for a particular military vehicle, such
modifications typically relate fit and are similar to the types of
modifications that are made for civilian vehicles.
This commenter also stated that the proposed rule did not set forth
any criteria by which BIS selected items for paragraph .y and the
selection was arbitrary. The commenter noted five possible
characteristics that the BIS proposed 0A606.y items appeared to have in
common. Those characteristics are: (1) The items are widely used in
civilian and military vehicles alike; (2) without these products, many
military and civilian vehicles could not function at all; (3) they do
not include offensive weaponry, armor, threat detection systems, or
military command, control, and communications systems; (4) they do not
include items that control or monitor offensive weaponry, armor, threat
detection systems, or military command control and communications
systems; and (5) they are available from foreign sources in many
locations around the world. The commenter stated that it thinks such
would be good criteria for limiting the reason for control to
antiterrorism.
This commenter also suggested that BIS's selection of items for
paragraph .y appears to equate complexity and the age of a technology
with military significance. The commenter pointed out that no
electronic parts are in
[[Page 76088]]
paragraph .y. This commenter also noted that multilateral regimes do
not require that the United States control non-significant parts and
the end-use and end-user license requirements provide adequate control
for parts that have no military significance.
One commenter asked why 0A606.y did not include exhaust pipes. This
commenter stated that exhaust pipes consist mainly of metal tubing that
is bent to fit a particular model of vehicle. As such, they appear to
be classified under 0A606.x. However, exhaust pipes serve the function
of keeping poisonous gases away from the passenger compartment on both
civilian and military vehicles.
One commenter recommended that wheels be added to 0A606.y, stating
that wheels have no more military significance than bearings, axles and
blackout lights, all of which were in 0A606.y of the proposed rule.
Response
These commenters are, in effect, proposing a function test for
inclusion in paragraph 0A606.y, i.e., items that differ only in form or
fit from items that perform a function that is common to both military
and civilian vehicles but that must be adapted in form or fit to a
military vehicle should be controlled at no more than the antiterrorism
reason for control. BIS believes that this recommendation is relevant
to all ECCNs that would become part of this phase of the Export Control
Reform Initiative. BIS will continue to review the concept underlying
this recommendation and encourages further comment on appropriate
criteria for determining which items classified under 600 series ECCNs
should be limited to the AT reason for control. BIS will also continue
to review the specific items proposed for inclusion in 0A606.y by these
commenters. BIS also notes that, at least in some instances, exhaust
systems for military vehicles perform additional functions than those
typically performed by civilian vehicle exhaust systems. Some military
exhaust systems are designed and built to facilitate deep water fording
or to reduce emission of thermal radiation, thereby making the vehicle
less detectable by opposing forces. Thus, exhaust systems are not per
se items that, even if specially designed for a military application
would have little or no military significance.
Comment 9
One commenter stated that bearings should be EAR99 rather than
0A606.y. This same commenter also stated that gears have about the same
level of military significance as bearings and that gears should be in
0A606.y
Response
Bearings that are not otherwise identified in the CCL, such as in
ECCN 2A001, and that are not ``specially designed'' for a military
vehicle controlled on the USML or CCL would be EAR99 bearings. The fact
that there are significant controls on some types of bearings in the
CCL indicates that bearings are not per se the types of items that
would have little or no military significance even if specially
designed for a military end item. With respect to ``gears,'' BIS
proposed excluding from controls in its definition of ``specially
designed'' single unassembled parts that are commonly used in civil
applications. As indicated above, BIS is reviewing the public comments
on this aspect of the proposed definition and will address this point
in a second proposed rule pertaining to the definition of specially
designed.
Comment 10
One commenter questioned why blackout lights were included in
proposed ECCN 0A606.y, which applies to items of little or no military
significance and also in proposed Interpretation 8, which, among other
things, identifies features that give a vehicle military
characteristics.
Response
This proposed rule would amend proposed 0A606.y to remove blackout
lights and would remove Interpretation 8 in its entirety. Controls on
blackout lights are currently the subject of deliberations by the
Wassenaar Arrangement on Export Controls for Conventional Arms and Dual
Use Goods and Technologies. Changing controls on blackout lights at
this time would be premature. Therefore this proposed rule would not
include blackout lights in paragraph .y of ECCN 0A606. Blackout lights
that are specially designed parts, components, accessories or
attachments for a commodity enumerated in ECCN 0A606 (other than
0A606.b) or a defense article enumerated in USML Category VII
classified under ECCN 0A606.x unless specified elsewhere on the CCL or
the USML.
Comment 11
Some commenters recommended that a paragraph .y (or a note) be
included in ECCNs 0B606, 0C606, 0D606 and 0E606 to cover test,
inspection and production equipment; materials; software; and
technology that applies to commodities in 0A606.y
Response
BIS agrees with this comment. This proposed rule would apply this
limitation to proposed ECCNs 0B606, 0C606, 0D606 and 0E606.
Comment 12
Two commenters noted that software for the development, production
or use of 0A606.y commodity item should be controlled at the AT level.
Response
BIS agrees with this comment and proposes to apply AT controls for
development, production, operation or maintenance software.
Comment 13
One commenter recommended that to promote the adaption of
commercial products for use in U.S. military vehicles, the Department
of Commerce should limit the controls on form, fit and function data
that is necessary to provide military insignificant items for military
vehicles to the antiterrorism reason for control only unless that
information relates to certain sensitive items. Specifically this
commenter recommended adding a note to ECCN 0A606 providing that: ``The
form, fit, and function information necessary to design, modify, adapt,
and configure parts and components listed in ECCN 0A606.y as having
little or no military significance is controlled only for AT reasons.
To the extent the form, fit, and function information relates to
vehicle weapons; armor; threat detection systems; or military command,
control, and communications systems, that information is controlled to
the extent and in the same manner as `technology' or `technical data'
concerning such item is controlled by the EAR or ITAR, respectively.''
Response
This comment, although directed at 0A606, applies to all the 600
series ECCNs that would be created in the Export Control Reform
Initiative. BIS is not making the recommended changes at this time but
will continue to consider the recommendation and may propose changes,
if warranted. BIS encourages additional comments on this issue.
Specific Changes Proposed by This Rule
Removal of Interpretation 8
This rule would remove Sec. 770.2(h) Interpretation 8: Ground
vehicles. BIS believes that the text that this rule proposes for ECCN
0A606 when read with the proposed State Department revisions to
Category VII of the USML
[[Page 76089]]
are sufficiently precise to make Interpretation 8 unnecessary.
Changes to Proposed ECCNs 0A606, 0B606, 0C606, 0D606 and 0E606
Following the pattern announced in the July 15 proposed rule, each
of the five ECCNs noted above would contain a new paragraph designated
``.y.99'' to cover items that would otherwise fall within the scope of
one of the ECCNs because, for example, they were ``specially designed''
for a military use, but which (i) Had been previously determined by the
Department of State to be subject to the EAR and (ii) were not listed
on the CCL. Items in these .y.99 paragraphs would be subject to
antiterrorism controls.
Again, following the pattern announced in the aircraft proposed
rule, the United Nations reason for control would be removed from the
``License Requirements'' section of each of the five ECCNs listed
above. The policy of denying applications for licenses to export or
reexport 600 series items to destinations that are subject to a United
Nations arms embargo would be implemented in connection with the
national security reason for control (proposed by the July 15 proposed
rule) and with the regional stability reason for control (proposed by
the aircraft proposed rule). Because the EAR as proposed relies on the
national security and regional stability reasons for control to
implement United Nations arms embargoes with respect to 600 series
items on the CCL, a reference to the United Nations in these ECCNs has
no legal effect and is likely to engender public confusion by
suggesting the existence of a separate United Nations arms embargo
licensing requirements and licensing policy section in the EAR. Such a
section does not exist.
The references to other 600 series items in the same CCL category
and product group would be removed from the ``Related Controls''
paragraphs of each of the five ECCNs noted above to conform to the
practice prevailing throughout the CCL. Using the five product groups
to describe items that differ in function but that are related to other
items in the same CCL category has been an organizing principle of the
EAR since at least 1966. Related Controls paragraphs alert readers to
items that are similar to the items in a given ECCN but that are
subject to the export control jurisdiction of another agency or appear
in a different ECCN.
The words under the ``Controls'' and ``Country Chart'' columns in
the ``Reasons for Control'' paragraph of each ECCN would be revised to
conform to the pattern prevailing throughout the CCL wherein the ECCN
paragraphs to which a control apply are listed the ``Controls'' column
rather than in the ``Country Chart'' column as was the case in the July
15 proposed rule. This change is stylistic only, and would not affect
any license requirements.
Changes to Proposed ECCN 0A606
This rule proposes a new version of ECCN 0A606 that differs in a
number of respects from the proposed ECCN 0A606 in the July 15 proposed
rule. Those differences and the reasons therefor are as follows.
The heading would be revised from ``Ground Vehicles, `Parts' and
`Components' as follows'' to ``Ground vehicles and related commodities,
as follows (See List of Items Controlled)'' to reflect the fact that
some of the items listed in the entry are accessories, attachments,
forgings, castings and other unfinished products that are not, as
defined, ``parts'' or ``components'' of the ground vehicles that would
be classified under proposed ECCN 0A606.
This proposed rule would add a new sentence to the STA paragraph in
the License Exception section to explicitly state that items in 0A606.x
are not subject to the requirement for a determination as described in
Sec. 740.20(g) before being exported or reexported under License
Exception STA. Such determinations are not needed because item in
paragraph .x are, by definition, parts and components and are not ``end
items.'' BIS regards this proposal as an additional statement of a
principle set forth in the July 15 proposed rule and is not a
substantive change.
The EAR Country Chart Column designators in the License
Requirements section would apply national security (NS column 2),
regional stability (RS column 2) to 0A606.b, certain unarmed all-wheel
drive off-road vehicles derived from civilian vehicles that provide
ballistic protection to level III (National Institute of Justice
standard 0108.01, September 1985) or better and parts and components
that provide such protection. As proposed in the July 15 proposed rule,
all other paragraphs of this ECCN, except paragraph .y, would be
subject to the NS column 1 and RS column 1 reason for control, and the
entire ECCN would be subject to the anti-terrorism reason for control.
Applying NS column 2 and RS column 2 reasons for control to the armored
off-road vehicles in 0A606.b would allow armored SUVs that are used for
personal protection to be exported to most NATO member countries along
with Australia, Japan and New Zealand without a license. Any risk that
such vehicles exported to such destinations would be employed in a
military use inimical to the United States or its allies is minimal.
As revised, proposed new ECCN 0A606 would include deep water
fording kits ``specially designed'' for ground vehicles controlled by
0A606.a or USML Category VII, and self-launching bridge components not
enumerated in USML Category VII(g) ``specially designed'' for
deployment by ground vehicles enumerated in USML Category VII or 0A606.
Such items are specifically identified in WAML Category 6. Because a
goal of the effort of the reform effort is to more clearly align the
U.S. Government's controls with the controls of the multilateral
regimes, these controls are specifically listed in the new 0A606.
This proposed rule would add a note to paragraph .x providing that
forgings, castings and certain other unfinished products that have
reached a stage in manufacture where they are clearly identifiable as
commodities controlled by 0A606.x are controlled by that paragraph.
Adding this note serves to better align the controls over 600 series
military articles with the controls in the WAML, which controls in its
Category 16 such forgings and castings. This proposed note also would
better align the requirements of ECCN 0A606 with the controls on
forgings and castings now in the ITAR (22 CFR 121.10). BIS encourages
comments on whether the proposed controls on forgings and castings in
the new 0A606.x are clear.
Also, the proposed new ECCN would not include in paragraph .y
blackout lights, which were included in paragraph .y of the July 15
proposed rule because the subject of appropriate controls over blackout
lights is a topic under consideration by the Wassenaar Arrangements on
Export Controls for Conventional Arms and Dual-Use Goods and
Technologies. Blackout lights that are specially designed parts,
components, accessories or attachments for a commodity enumerated in
ECCN 0A606 (other than 0A606.b) or a defense article enumerated in USML
Category VII classified under ECCN 0A606.x unless specified elsewhere
on the CCL or the USML.
Finally, the proposed new ECCN 0A606 would not include military
vehicle gas turbine engines because controls on gas turbine engines and
related items for military aircraft, ships, and vehicles are addressed
in another proposed rule which, would create a proposed ECCN 9A619.
Although this numbering deviates slightly from the WAML numbering
approach, BIS believes that it would be more efficient
[[Page 76090]]
to list all 600 series controls for gas turbine engines and related
items in one ECCN. The anticipated new ECCN will correspond to a new
USML Category XIX that the State Department would propose creating to
control USML-controlled gas turbine engines and related articles.
Changes to Proposed ECCN 0B606
This rule proposes a new version of ECCN 0B606 that differs in a
number of respects from the ECCN 0B606 in the July 15 proposed rule.
The heading would be changed from ``Test, inspection, and
production `equipment' and related commodities `specially designed' for
the `development' or `production' of commodities enumerated in ECCN
0A606'' to ``Test, inspection, and production `equipment' and related
commodities `specially designed' for the `development' or `production'
of commodities enumerated in ECCN 0A606 or USML Category VII (See List
of Items Controlled).'' This text more accurately reflects the scope of
this proposed ECCN.
The four specific commodities that were listed in paragraphs .a, .b
.c and .d in the July 15 proposed rule: (i) Armor plate drilling
machines, other than radial drilling machines, (ii) armor plate planing
machines, (iii) armor plate quenching presses; and (iv) tank turret
bearing grinding machines are included as a note to paragraph .a in
this proposed rule. Paragraph .a, as a whole, would apply more broadly
in this proposed rule to test, inspection, and production ``equipment''
``specially designed'' for the ``production'' or ``development'' of
commodities enumerated in ECCN 0A606 (except for 0A606.y) or in USML
Category VII, and ``parts,'' ``components,'' ``accessories and
attachments'' ``specially designed'' therefor. Paragraph .b would apply
more broadly in this proposed rule to environmental test facilities
``specially designed'' for the certification, qualification, or testing
of commodities enumerated in ECCN 0A606 (except for 0A606.b or 0A606.y)
or in USML Category VII, and ``equipment'' ``specially designed''
therefor. This specifically identifies as controlled in U.S. export
control law such items, which are identified in WAML Category 18.
Paragraphs .c through .x would be reserved for future use.
Changes to Proposed ECCN 0C606
The ``Items'' paragraph in the ``List of Items Controlled'' section
would be in the form of a list rather than just a reference to the ECCN
heading as was the case in the July 15 proposed rule. Paragraph .a of
that list would enumerate materials ``specially designed'' for the
``development'' or ``production'' of commodities enumerated in ECCN
0A606 (other than 0A606.b or 0A606.y) or USML Category VII, not
elsewhere specified in the USML or the CCL. Two notes following
paragraph .a would make clear that materials enumerated elsewhere on
the CCL are subject to the controls of the CCL in which they are
enumerated and materials specially designed for vehicles enumerated in
ECCN 0A606 or in USML Category VII are subject to ECCN 0C606 unless
such materials are identified in USML Category VII(g).
Changes to Proposed ECCN 0D606
The term ``use'' would be replaced with the term ``operation and
maintenance'' because the latter more accurately describes the software
functions of concern.
Changes to Proposed ECCN 0E606
The term ``use'' would be replaced with the term ``operation,
installation, maintenance, repair or overhaul'' because the latter is a
more accurate description of the technology of concern.
Request for Comments
All comments must be in writing and submitted via one or more of
the methods listed under the ADDRESSES caption to this notice. All
comments (including any personal identifiable information) will be
available for public inspection and copying. Anyone wishing to comment
anonymously may do so by submitting their comment via regulations.gov
and leaving the fields for information that would identify the
commenter for identifying information blank.
Relationship to the July 15 Proposed Rule and the Aircraft Proposed
Rule
As referenced above, the purpose of the July 15 proposed rule was
to set up the framework to support the transfer of items from the USML
to the CCL. To facilitate that goal, the July 15 proposed rule
contained definitions and concepts that were meant to be applied across
Categories. However, as BIS undertakes rulemakings to move specific
categories of items from the USML to the CCL, there may be unforeseen
issues or complications that may require BIS to reexamine those
definitions and concepts. The comment period for the July 15 proposed
rule closed on September 13, 2011. In the aircraft proposed rule, BIS
proposed several changes to those definitions and concepts. The comment
period for the aircraft proposed rule will close on December 22, 2011.
To the extent that this rule's proposals affect any provision in
either of those proposed rules or any provision in either of those
proposed rules affect this proposed rule, BIS will consider comments on
those provisions so long as they are in the context of the changes
proposed in this rule.
BIS believes that the following aspects of the July 15 proposed
rule and the aircraft proposed rule are among those that could affect
this proposed rule:
De minimis provisions in Sec. 734.4;
Definitions of terms in Sec. 772.1;
Restrictions on use of license exceptions in Sec. Sec.
740.2, 740.10, 740.11, and 740.20 (including restrictions proposed by
the November 7, 2011, proposed rule that would apply to items outside
the scope of that rule);
Change to national security licensing policy in Sec.
742.4;
Requirement to request authorization to use License
Exception STA for end items in 600 series ECCNs and procedures for
submitting such requests in Sec. Sec. 740.2, 740.20, 748.8 and Supp.
No. 2 to part 748;
Licensing policy in Sec. 742.4(b)(1)(ii);
Addition of 600 series items to Supplement No. 2 to Part
744--List of Items Subject to the Military End-Use Requirement of Sec.
744.21; and
Addition of U.S. arms embargo policy regarding 600 series
items set forth in Sec. 742.4(b)(1)(ii) (national security) of the
July 15 proposed rule to Sec. 742.6(b)(1) (regional stability) of this
proposed rule.
Although the Export Administration Act expired on August 20, 2001,
the President, through Executive Order 13222 of August 17, 2001, 3 CFR,
2001 Comp., p. 783 (2002), as extended by the Notice of August 12,
2011, 76 FR 50661 (August 16, 2011), has continued the Export
Administration Regulations in effect under the International Emergency
Economic Powers Act. BIS continues to carry out the provisions of the
Act, as appropriate and to the extent permitted by law, pursuant to
Executive Order 13222.
Rulemaking Requirements
Regulatory Requirements
1. Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distribute impacts, and equity).
[[Page 76091]]
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and of
promoting flexibility. This rule has been designated a ``significant
regulatory action,'' although not economically significant, under
section 3(f) of Executive Order 12866. Accordingly, the rule has been
reviewed by the Office of Management and Budget (OMB).
2. Notwithstanding any other provision of law, no person is
required to respond to, nor is subject to a penalty for failure to
comply with, a collection of information, subject to the requirements
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA),
unless that collection of information displays a currently valid OMB
control number. This proposed rule would affect two approved
collections: Simplified Network Application Processing + System
(control number 0694-0088), which includes, among other things, license
applications, and License Exceptions and Exclusions (0694-0137).
As stated in the proposed rule published at 76 FR 41958 (July 15,
2011), BIS believes that the combined effect of all rules to be
published adding items to EAR that are being removed from the ITAR as
part of the administration's Export Control Reform Initiative will
increase the number of license applications to be submitted to BIS by
approximately 16,000 annually, resulting in an increase in burden hours
of 5,067 (16,000 transactions at 17 minutes each) under control number
0694-0088.
Some items formerly on the USML will become eligible for License
Exception STA under this rule. Other such items may become eligible for
License Exception STA upon approval of a request submitted in
conjunction with a license application. As stated in the July 15
proposed rule, BIS believes that the increased use of License Exception
STA resulting from combined effect of all rules to be published adding
items to EAR that are being removed from the ITAR as part of the
administration's Export Control Reform Initiative will increase the
burden associated with control number 0694-0137 by about 23,858 hours
(20,450 transactions @1 hour and 10 minutes each).
BIS expects that this increase in burden would be more than offset
by a reduction in burden hours associated with approved collections
related to the ITAR. This proposed rule addresses controls on military
vehicles and related parts, components, production equipment,
materials, software, and technology. The largest impact of the proposed
rule would be with respect to exporters of parts and components
because, under the proposed rule, most U.S. and foreign military
vehicles currently in service would continue to be subject to the ITAR.
Because, with few exceptions, the ITAR allows exemptions from license
requirements only for exports to Canada, most exports to integrators
for U.S. government equipment and most exports of routine maintenance
parts and components for our NATO and other close allies require State
Department authorization. In addition, the exports necessary to produce
parts and components for defense articles in the inventories of the
United States and its NATO and other close allies require State
Department authorizations. Under the EAR, as proposed, a small number
of low level parts would not require a license to most destinations.
Most other parts, components, accessories, and attachments would become
eligible for export to NATO and other close allies under License
Exception STA. Use of License Exception STA imposes a paperwork and
compliance burden because, for example, exporters must furnish
information about the item being exported to the consignee and obtain
from the consignee and acknowledgement and commitment to comply with
the EAR. It is, however, the Administration's understanding that
complying with the burdens of STA is likely to be less burdensome than
applying for licenses. For example, under License Exception STA, a
single consignee statement can apply to an unlimited number of
products, need not have an expiration date, and need not be submitted
to the government in advance for approval. Suppliers with regular
customers can tailor a single statement and assurance to match their
business relationship rather than applying repeatedly for licenses with
every purchase order to supply allied and, in some cases, U.S. forces
with routine replacement parts and components.
Even in situations in which a license would be required under the
EAR, the burden is likely to be reduced compared to the license
requirement of the ITAR. In particular, license applications for
exports of technology controlled by ECCN 0E606 are likely to be less
complex and burdensome than the authorizations required to export ITAR-
controlled technology, i.e., Manufacturing License Agreements and
Technical Assistance Agreements.
3. This rule does not contain policies with Federalism implications
as that term is defined under E.O. 13132.
4. The Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C.
601 et seq., generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to the notice and comment
rulemaking requirements under the Administrative Procedure Act (5
U.S.C. 553) or any other statute, unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Under section 605(b) of the RFA, however, if
the head of an agency certifies that a rule will not have a significant
impact on a substantial number of small entities, the statute does not
require the agency to prepare a regulatory flexibility analysis.
Pursuant to section 605(b), the Chief Counsel for Regulations,
Department of Commerce, submitted a memorandum to the Chief Counsel for
Advocacy, Small Business Administration, certifying that proposed rule
published on July 15, 2011, will not have a significant impact on a
substantial number of small entities.
This proposed rule re-proposes with certain changes, 5 ECCNs that
were proposed in the July 15, 2011 rule. The changes proposed in this
rule do not impact the original certification. Consequently, BIS has
not prepared a regulatory flexibility analysis. A summary of the
factual basis for the certification, which also takes into
consideration the changes to the five proposed ECCNs in this rule, is
provided below.
Number of Small Entities
The Bureau of Industry and Security (BIS) does not collect data on
the size of entities that apply for and are issued export licenses.
Although BIS is unable to estimate the exact number of small entities
that would be affected by this rule, it acknowledges that this rule
would affect some unknown number.
Economic Impact
This proposed rule is part of the Administration's Export Control
Reform Initiative. Under that initiative, the United States Munitions
List (22 CFR part 121) (USML) would be revised to be a ``positive''
list, i.e., a list that does not use generic, catch-all controls on any
part, component, accessory, attachment, or end item that was in any way
specifically modified for a defense article, regardless of the
article's military or intelligence significance or non-military
applications. At the same time, articles that are determined to no
longer warrant control on the USML would become controlled on the
[[Page 76092]]
Commerce Control List (CCL). Such items, along with certain military
items that currently are on the CCL, will be identified in specific
Export Control Classification Numbers (ECCNs) known as the ``600
series'' ECCNs. In addition, some items currently on the Commerce
Control List would move from existing ECCNs to the new 600 series
ECCNs. In practice, the greatest impact of this rule on small entities
would likely be reduced administrative costs and reduced delay for
exports of items that are now on the USML but would become subject to
the EAR. This rule focuses on Category VII articles, which are tanks
and military vehicles and related parts, components, production
equipment, software, and technology. Most operational tanks and
military vehicles currently in active inventory would remain on the
USML. However, parts and components, which are more likely to be
produced by small businesses than are complete vehicles, would in many
cases become subject to the EAR. In addition, officials of the
Department of State have informed BIS that license applications for
such parts and components are a high percentage of the license
applications for USML articles review by that department.
Changing the jurisdictional status of Category VII items would
reduce the burden on small entities (and other entities as well)
through elimination of some license requirements, greater availability
of license exceptions, simpler license application procedures, and
reduced (or eliminated) registration fees.
In addition, parts and components controlled under the ITAR remain
under ITAR control when incorporated into foreign-made items,
regardless of the significance or insignificance of the item,
discouraging foreign buyers from incorporating such U.S. content. The
availability of de minimis treatment under the EAR may reduce the
incentive for foreign manufacturers to avoid purchasing U.S.-origin
parts and components.
Fourteen types of parts and components, identified in ECCN 0A606.y,
would be designated immediately as parts and components that, even if
specially designed for a military use, have little or no military
significance. These parts and components, which under the ITAR require
a license to nearly all destinations, would, under the EAR, require a
license to only five destinations and, if destined for a military end
use, the People's Republic of China.
Many exports and reexports of Category VII articles that would be
placed on the CCL by this rule, particularly parts and components,
would become eligible for license exceptions that apply to shipments to
United States Government agencies, shipments valued at less than
$1,500, parts and components being exported for use as replacement
parts, temporary exports, and License Exception Strategic Trade
Authorization (STA), reducing the number of licenses that exporters of
these items would need. License Exceptions under the EAR would allow
suppliers to send routine replacement parts and low level parts to NATO
and other close allies and export control regime partners for use by
those governments and for use by contractors building equipment for
those governments or for the United States government without having to
obtain export licenses. Under License Exception STA, the exporter would
need to furnish information about the item being exported to the
consignee and obtain a statement from the consignee that, among other
things, would commit the consignee to comply with the EAR and other
applicable U.S. laws. Because such statements and obligations can apply
to an unlimited number of transactions and have no expiration date,
they would impose a net reduction in burden on transactions that the
government routinely approves through the license application process
that the License Exception STA statements would replace.
Even for exports and reexports in which a license would be
required, the process would be simpler and less costly under the EAR.
When a USML Category VII article is moved to the CCL, the number of
destinations for which a license is required would remain unchanged.
However, the burden on the license applicant would decrease because the
licensing procedure for CCL items is simpler and more flexible that the
license procedure for USML articles.
Under the USML licensing procedure, an applicant must include a
purchase order or contract with its application. There is no such
requirement under the CCL licensing procedure. This difference gives
the CCL applicant at least two advantages. First, the applicant has a
way of determining whether the U.S. government will authorize the
transaction before it enters into potentially lengthy, complex and
expensive sales presentations or contract negotiations. Under the USML
procedure, the applicant will need to caveat all sales presentations
with a reference to the need for government approval and is more likely
to have to engage in substantial effort and expense only to find that
the government will reject the application. Second, a CCL license
applicant need not limit its application to the quantity or value of
one purchase order or contract. It may apply for a license to cover all
of its expected exports or reexports to a particular consignee over the
life of a license (normally two years, but may be longer if
circumstances warrant a longer period), reducing the total number of
licenses for which the applicant must apply.
In addition, many applicants exporting or reexporting items that
this rule would transfer from the USML to the CCL would realize cost
savings through the elimination of some or all registration fees
currently assessed under the USML's licensing procedure. Currently,
USML applicants must pay to use the USML licensing procedure even if
they never actually are authorized to export. Registration fees for
manufacturers and exporters of articles on the USML start at $2,500 per
year, increase to $2,750 for organizations applying for one to ten
licenses per year and further increases to $2,750 plus $250 per license
application (subject to a maximum of three percent of total application
value) for those who need to apply for more than ten licenses per year.
There are no registration or application processing fees for
applications to export items listed on the CCL. Once the Category VII
items that are the subject to this rulemaking are moved from the USML
to the CCL, entities currently applying for licenses from the
Department of State would find their registration fees reduced if the
number of USML licenses those entities need declines. If an entity's
entire product line is moved to the CCL, then its ITAR registration and
registration fee requirement would be eliminated.
De minimis treatment under the EAR would become available for all
items that this rule would transfer from the USML to the CCL. Items
subject to the ITAR remain subject to the ITAR when they are
incorporated abroad into a foreign-made product regardless of the
percentage of U.S. content in that foreign made product. Foreign-made
products that incorporate items that this rule would move to the CCL
would be subject to the EAR only if their total controlled U.S.-origin
content exceeded 10 percent. Because including small amounts of U.S.-
origin content would not subject foreign-made products to the EAR,
foreign manufacturers would have less incentive to avoid such U.S.-
origin parts and components, a development that potentially would mean
greater sales for U.S. suppliers, including small entities.
[[Page 76093]]
For items currently on the CCL that would be moved from existing
ECCNs to the new 600 series, license exception availability would be
narrowed somewhat and the applicable de minimis threshold for foreign-
made products containing those items would in some cases be reduced
from 25 percent to 10 percent. However, BIS believes that increased
burden imposed by those actions will be offset substantially by the
reduction in burden attributable to the moving of items from the USML
to CCL and the compliance benefits associated with the consolidation of
all WAML items subject to the EAR in one series of ECCNs.
Conclusion
BIS is unable to determine the precise number of small entities
that would be affected by this rule. Based on the facts and conclusions
set forth above, BIS believes that any burdens imposed by this rule
would be offset by the a reduction in the number of items that would
require a license, increased opportunities for use of license
exceptions for exports to certain countries, simpler export license
applications, reduced or eliminated registration fees, and application
of a de minimis threshold for foreign-made items incorporating U.S.-
origin parts and components, which would reduce the incentive for
foreign buyers to design out or avoid U.S.-origin content. For these
reasons, the Chief Counsel for Regulations of the Department of
Commerce certified to the Chief Counsel for Advocacy of the Small
Business Administration that this rule, if adopted in final form, would
not have a significant economic impact on a substantial number of small
entities.
List of Subjects
15 CFR Part 742
Exports, Terrorism.
15 CFR Part 770
Exports.
15 CFR Part 774
Exports, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, the Export Administration
Regulations (15 CFR parts 730-774) are proposed to be amended as
follows:
15 CFR PART 742--[AMENDED]
1. The authority citation paragraph for part 742 is revised to read
as follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22
U.S.C. 7210; Sec 1503, Pub. L. 108-11, 117 Stat. 559; E.O. 12058, 43
FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR,
1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p.
950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222,
66 FR 44025, 3 CFR, 2001 Comp., p. 783; Presidential Determination
2003-23 of May 7, 2003, 68 FR 26459, May 16, 2003; Notice of August
12, 2011, 76 FR 50661 (August 16, 2011); Notice of November 9, 2011,
76 FR 70319 (November 10, 2011).
2. Section 742.6 is amended by revising paragraphs (a)(1) and
(a)(4)(i) to read as follows:
Sec. 742.6 Regional stability.
(a) * * *
(1) RS Column 1 License Requirements in General. As indicated in
the CCL and in RS column 1 of the Commerce Country Chart (see
Supplement No. 1 to part 738 of the EAR), a license is required to all
destinations, except Canada, for items described on the CCL under ECCNs
0A521; 0A606 (except 0A606.b and .y); 0B521; 0B606 (except 0B606.y);
0C521; 0C606 (except 0C606.y); 0D521; 0D606 (except 0D606.y); 0E521;
0E606 (except 0E606.y); 6A002.a.1, a.2, a.3, .c, or .e; 6A003.b.3, and
b.4.a; 6A008.j.1; 6A998.b; 6D001 (only ``software'' for the
``development'' or ``production'' of items in 6A002.a.1, a.2, a.3, .c;
6A003.b.3 and .b.4; or 6A008.j.1); 6D002 (only ``software'' for the
``use'' of items in 6A002.a.1, a.2, a.3, .c; 6A003.b.3 and .b.4; or
6A008.j.1); 6D003.c; 6D991 (only ``software'' for the ``development,''
``production,'' or ``use'' of equipment classified under 6A002.e or
6A998.b); 6E001 (only ``technology'' for ``development'' of items in
6A002.a.1, a.2, a.3 (except 6A002.a.3.d.2.a and 6A002.a.3.e for lead
selenide focal plane arrays), and .c or .e, 6A003.b.3 and b.4, or
6A008.j.1); 6E002 (only ``technology'' for ``production'' of items in
6A002.a.1, a.2, a.3, .c, or .e, 6A003.b.3 or b.4, or 6A008.j.1); 6E991
(only ``technology'' for the ``development,'' ``production,'' or
``use'' of equipment classified under 6A998.b); 6D994; 7A994 (only
QRS11-00100-100/101 and QRS11-0050-443/569 Micromachined Angular Rate
Sensors); 7D001 (only ``software'' for ``development'' or
``production'' of items in 7A001, 7A002, or 7A003); 7E001 (only
``technology'' for the ``development'' of inertial navigation systems,
inertial equipment, and specially designed components therefor for
civil aircraft); 7E002 (only ``technology'' for the ``production'' of
inertial navigation systems, inertial equipment, and specially designed
components therefor for civil aircraft); 7E101 (only ``technology'' for
the ``use'' of inertial navigation systems, inertial equipment, and
specially designed components for civil aircraft); 9A610 (except
9A610.y); 9A619; 9B610 (except 9B610.y); 9B619 (except 9B619.y); 9C610
(except 9C610.y); 9C619 (except 9C619,y); 9D610 (except software for
the development,'' ``production,'' operation or maintenance of
commodities controlled by 9A610.y, 9B610.y, or 9C610.y); 9D619 (except
software for the ``development,'' ``production,'' operation or
maintenance of commodities controlled by 9A619.y, 9B619.y, or 9C619.y);
9E610 (except ``technology'' for the ``development,'' ``production''
operation, installation, maintenance, repair, overhaul, or
refurbishment of commodities controlled by ECCN 9A610.y, 9B610.y, or
9C610.y) and 9E619 (except ``technology'' for the ``development,''
``production,'' operation, installation, maintenance, repair, overhaul
of refurbishment of commodities controlled by ECCN 9A619.y, 9B619.y, or
9C619.y).
* * *
(4) * * *
(i) License Requirements Applicable to Most RS Column 2 Items. As
indicated in the CCL and in RS Column 2 of the Commerce Country Chart
(see Supplement No. 1 to part 738 of the EAR), a license is required to
any destination except Australia, Japan, New Zealand, and countries in
the North Atlantic Treaty Organization (NATO) for items described on
the CCL under ECCNs 0A918, 0E918, 1A004.d, 1D003 (software to enable
equipment to perform the functions of equipment controlled by 1A004.d),
1E001 (technology for the development, production, or use of 1A004.d),
2A983, 2A984, 2D983, 2D984, 2E983, 2E984, 0A606.b, 8A918, and for
military vehicles and certain commodities (specially designed) used to
manufacture military equipment, described on the CCL in ECCNs 0A018.c,
1B018.a, and 2B018.
* * * * *
15 CFR PART 770--[AMENDED]
3. The authority citation paragraph for part 770 continues to read
as follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August
12, 2011, 76 FR 50661 (August 16, 2011).
Section 770.2 [Amended]
4. Section 770.2 is amended by removing and reserving paragraph
(h).
PART 774--[AMENDED]
5. The authority citation paragraph for part 774 continues to read
as follows:
[[Page 76094]]
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
10 U.S.C. 7420; 10 U.S.C. 7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et
seq., 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42
U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 13026, 61 FR 58767, 3 CFR,
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783; Notice of August 12, 2011, 76 FR 50661 (August 16, 2011).
6. In Supplement No. 1 to part 774, Category 0, add Export Control
Classification Number 0A606 between Export Control Classification
Numbers 0A018 and 0A918 to read as follows:
0A606 Ground vehicles and related commodities, as follows (See List
of Items Controlled):
License Requirements
Reason for Control: NS, RS, AT
------------------------------------------------------------------------
Control(s) Country chart
------------------------------------------------------------------------
NS applies to entire, entry except 0A606.b NS Column 1
and .y.
NS applies to 0A606.b..................... NS Column 2
RS applies to entire entry, except 0A606.b RS Column 1
and .y.
RS applies to 0A606.b..................... RS Column 2
AT applies to entire entry................ AT Column 1
------------------------------------------------------------------------
License Exceptions
LVS: $1500
GBS: N/A
CIV: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2))
of the EAR may not be used for any item in 0A606. Paragraph (c)(1)
of License Exception STA (Sec. 740.20(c)(1)) may not be used for
any ``end item'' in 0A606, unless determined by BIS to be eligible
for License Exception STA in accordance with Sec. 740.20(g)
(License Exception STA eligibility requests for ``600 series'' end
items). See Sec. 740.20(g) for the procedures to follow if you wish
to request new STA eligibility for ``end items'' under this ECCN
0A606 as part of an export, reexport, or in-country (transfer)
license application. ``End items'' under this entry that have
already been determined to be eligible for License Exception STA are
listed in Supplement No. 4 to part 774 and on the BIS Web site at
http://www.bis.doc.gov * * *.
Paragraph (c)(1) of License Exception STA (Sec. 740.20(c)(1)) may
be used to export, reexport, or transfer (in-country) commodities
that are not ``end items,'' such as those controlled by 0A606.x,
without the need for a determination described in Sec. 740.20(g).
List of Items Controlled
Unit: Equipment in number; ``parts,'' ``components,'' ``accessories
and attachments'' in $ value
Related Controls: (1) Ground vehicles and related articles,
technical data (including software) and services described in 22 CFR
part 121, Category VII, Ground Vehicles and Related Articles, are
subject to the jurisdiction of the International Traffic in Arms
Regulations. (2) See ECCN 0A919 for foreign-made ``military
commodities'' that incorporate more than 10% U.S.-origin ``600
series'' items.
Related Definitions: N/A
Items:
a. Ground vehicles, whether manned or unmanned, ``specially
designed'' for a military use and not enumerated in USML Category
VII.
Note: For purposes of paragraph .a, ``ground vehicles'' include
(i) Tanks and armored vehicles manufactured prior to 1956 that do
not contain a functional weapon or a weapon capable of becoming
functional through repair; (ii) military railway trains except those
that are armed or are ``specially designed'' to launch missiles;
(iii) unarmored military recovery and other support vehicles; (iv)
unarmored, unarmed vehicles with mounts or hard points for firearms
of .50 caliber or less; and (iv) trailers ``specially designed'' for
use with other ground vehicles enumerated in USML Category VII or
ECCN 0A606.a, and not separately enumerated in USML Category VII.
b. Other Ground Vehicles and Related Commodities, as follows:
b.1. Unarmed all-wheel drive vehicles capable of off-road use
that are derived from civilian vehicles that have been modified or
fitted with materials or components other than reactive or
electromagnetic armor to provide ballistic protection to level III
(National Institute of Justice standard 0108.01, September 1985) or
better.
b.2. ``Parts'' and ``components'' that provide ballistic
protection to level III (National Institute of Justice standard
0108.01, September 1985) or better ``specially designed'' for ground
vehicles controlled by 0A606.b.1.
Note 1: Ground vehicles otherwise controlled by 0A606.b.1 that
contain reactive or electromagnetic armor are subject to the
controls of USML Category VII.
Note 2: ECCN 0A606.b.1 does not control civilian vehicles
``specially designed'' for transporting money or valuables.
Note 3: ``Unarmed'' means not having installed weapons,
installed mountings for weapons, or special reinforcements for
mounts for weapons.
c. Air-cooled diesel engines and engine blocks for armored
vehicles that weigh more than 40 tons.
d. Fully automatic continuously variable transmissions for
tracked combat vehicles.
e. Deep water fording kits ``specially designed'' for ground
vehicles controlled by ECCN 0A606.a or USML Category VII.
f. Self-launching bridge components not enumerated in USML
Category VII(g) ``specially designed'' for deployment by ground
vehicles enumerated in USML Category VII or this ECCN.
g. through w. [RESERVED]
x. ``Parts,'' ``components,'' ``accessories and attachments''
that are ``specially designed'' for a commodity enumerated in ECCN
0A606 (other than 0A606.b) or a defense article enumerated in USML
Category VII and not elsewhere specified on the USML or the CCL.
Note 1: Forgings, castings, and other unfinished products, such
as extrusions and machined bodies, that have reached a stage in
manufacture where they are clearly identifiable by material
composition, geometry, or function as commodities controlled by ECCN
0A606.x are controlled by ECCN 0A606.x.
Note 2: ``Parts,'' ``components,'' ``accessories and
attachments'' enumerated in USML paragraph VII(g) are subject to the
controls of that paragraph. ``Parts,'' ``components,'' ``accessories
and attachments'' enumerated in ECCN 0A606.y are subject to the
controls of that paragraph.
y. Specific ``parts,'' ``components,'' ``accessories and
attachments'' ``specially designed'' for a commodity enumerated in
this ECCN (other than ECCN 0A606.b) or for a defense article in USML
Category VII and not elsewhere specified on the USML or the CCL, as
follows:
y.1. Brake system components (e.g., discs, rotors, shoes, drums,
springs, cylinders, lines, and hoses);
y.2. Alternators and generators;
y.3. Axles;
y.4. Batteries;
y.5. Bearings (e.g., ball, roller, wheel);
y.6. Cables, cable assembles, and connectors;
y.7. Cooling system hoses;
y.8. Hydraulic, fuel, oil, and air filters, other than those
controlled by ECCN 1A004;
y.9. Gaskets and o-rings;
y.10. Hydraulic system hoses, fittings, couplings, adapters, and
valves;
y.11. Latches and hinges;
y.12. Lighting systems, fuses, and components;
y.13. Pneumatic hoses, fittings, adapters, couplings, and
valves;
y.14. Seats, seat assemblies, seat supports, and harnesses;
y.15 Tires, except run flat ; and
y.16 Windows, except those for armored vehicles.
y.17. to .98. [RESERVED]
y.99. Commodities that would otherwise be controlled elsewhere
in ECCN 0A606 but that (i) Have been determined to be ``subject to
the EAR'' in a commodity jurisdiction determination issued by the
U.S. Department of State and (ii) are not elsewhere identified on
the CCL.
7. In Supplement No. 1 to part 774, Category 0, add Export Control
Classification Number 0B606 between Export Control Classification
Numbers 0B006 and 0B986 to read as follows:
0B606 Test, inspection, and production ``equipment'' and related
commodities, not enumerated on the USML, ``specially designed'' for the
``development'' or ``production'' of commodities enumerated in ECCN
0A606 or USML Category VII (See List of Items Controlled).
[[Page 76095]]
License Requirements
Reason for Control: NS, RS, AT
------------------------------------------------------------------------
Control(s) Country chart
------------------------------------------------------------------------
NS applies to 0B606, except 0B606.y....... NS Column 1
RS applies to 0B606, except 0B606.y....... RS Column 1
AT applies to entire entry................ AT Column 1
------------------------------------------------------------------------
License Exceptions
LVS: $1,500
GBS: N/A
CIV: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2)) of
the EAR may not be used for any item in 0B606.
List of Items Controlled
Unit: N/A
Related Controls: (1) Ground vehicles and related articles, technical
data (including software) and services described in 22 CFR part 121,
Category VII, Ground Vehicles and Related Articles, are subject to the
jurisdiction of the International Traffic in Arms Regulations. (2) See
ECCN 0A919 for foreign-made ``military commodities'' that incorporate
more than 10% U.S.-origin ``600 series'' items.
Related Definitions: N/A
Items:
a. Test, inspection, and production ``equipment'' ``specially
designed'' for the ``production'' or ``development'' of commodities
enumerated in ECCN 0A606 (except for 0A606.y) or in USML Category VII,
and ``parts,'' ``components,'' ``accessories and attachments''
``specially designed'' therefor.
Note 1: ECCN 0B606 includes (i) Armor plate drilling machines,
other than radial drilling machines, (ii) armor plate planing
machines, (iii) armor plate quenching presses; and (iv) tank turret
bearing grinding machines.
b. Environmental test facilities ``specially designed'' for the
certification, qualification, or testing of commodities enumerated in
ECCN 0A606 (except for 0A606.b or 0A606.y) or in USML Category VII, and
``equipment'' ``specially designed'' therefor.
c. through x. [RESERVED]
y. Specific test, inspection, and production ``equipment''
``specially designed'' for the ``production'' or ``development'' of
commodities enumerated in ECCN 0A606 (except for 0A606.y) or in USML
Category VII, and ``parts,'' ``components,'' ``accessories and
attachments'' ``specially designed'' therefor, as follows:
y.1. through y.98 [RESERVED]
y.99. Commodities that would otherwise be controlled elsewhere
by ECCN 0B606, but that (i) have been determined to be subject to
the EAR in a commodity jurisdiction determination issued by the U.S.
Department of State and (ii) are not elsewhere identified on the
CCL.
8. In Supplement No. 1 to part 774, Category 0, add Export Control
Classification Number 0C606 between Export Control Classification
Numbers 0C201 and the product group header that reads ``D. Software''
0C606 Materials ``specially designed'' for commodities controlled by
ECCN 0A606 not elsewhere specified in the USML or the CCL (See List
of Items Controlled).
License Requirements
Reason for Control: NS, RS, AT
NS applies to entire entry, except 0C606.y NS Column 1
RS applies to entire entry, except 0C606.y RS Column 1
AT applies to entire entry................ AT Column 1
------------------------------------------------------------------------
License Exceptions
LVS: $1,500
GBS: N/A
CIV: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2))
of the EAR may not be used for any item in 0C606.
List of Items Controlled
Unit: N/A
Related Controls: (1) Materials specifically designed, modified,
adapted, or configured for military vehicles and related articles
controlled in USML Category VII are controlled in USML paragraph
XIII(f). (2) See ECCN 0A919 for foreign-made ``military
commodities'' that incorporate more than 10% U.S.-origin ``600
series'' items.
Related Definitions: N/A
Items:
a. Materials ``specially designed'' for the ``development'' or
``production'' of commodities enumerated in ECCN 0A606 (other than
0A606.b or 0A606.y) or USML Category VII, not elsewhere specified in
the USML or the CCL.
Note 1: Materials enumerated elsewhere in the CCL, such as in a
CCL Category 1 ECCN, are controlled pursuant to controls of the
applicable ECCN.
Note 2: Materials ``specially designed'' for both ground
vehicles enumerated in USML Category VII and ground vehicles
enumerated in ECCN 0A606 are subject to the controls of this ECCN
unless identified in USML Category VII(g) as being subject to the
controls of that paragraph.
b. through .w. [RESERVED]
y. Specific materials ``specially designed'' for the
``production'' or ``development'' of commodities enumerated in ECCN
0A606 (except for 0A606.y), as follows:
y.1. through y.98 [RESERVED]
y.99. Materials that would otherwise be controlled elsewhere in
ECCN 0C606 but that (i) have been determined to be subject to the
EAR in a commodity jurisdiction determination issued by the U.S.
Department of State and (ii) are not otherwise identified elsewhere
on the CCL.
9. In Supplement No. 1 to part 774, Category 0, add Export Control
Classification Number 0D606 between Export Control Classification
Numbers 0D001 and 0D999 to read as follows:
0D606 ``Software'' ``specially designed'' for the ``development,''
``production,'' operation, or maintenance of ground vehicles and
related commodities controlled by 0A606, 0B606, or 0C606.
License Requirements
Reason for Control: NS, RS, AT
------------------------------------------------------------------------
Control(s) Country chart
------------------------------------------------------------------------
NS applies to entire entry, except 0D606.y NS Column 1
RS applies to entire entry, except 0D606.y RS Column 1
AT applies to entire entry................ AT Column 1
------------------------------------------------------------------------
License Exceptions
CIV: N/A
TSR: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2))
of the EAR may not be used for any software in 0D606.
List of Items Controlled
Unit: N/A
Related Controls: Software directly related to articles enumerated
in USML Category VII are subject to the controls of USML paragraph
VII(h). See ECCN 0A919 for foreign made ``military commodities''
that incorporate more than 10% U.S.-origin ``600 series'' items.
Related Definitions: N/A
Items:
a. ``Software'' ``specially designed'' for the ``development,''
``production,'' operation, or maintenance of commodities controlled
by ECCN 0A606 (except for ECCNs 0A606.b or 0A606.y).
b. to w. [RESERVED]
y. Specific ``software'' ``specially designed'' for the
``production,'' ``development,'' operation or maintenance of
commodities enumerated in ECCN 0A606, 0B606, or 0C606, as follows:
y.1. Specific ``software'' ``specially designed'' for the
``production,'' ``development,'' operation or maintenance of
commodities enumerated in ECCNs 9A610.y, 9B610.y, or 9C610.y.
y.2 through y.98 [RESERVED]
y.99. Software that would otherwise be controlled elsewhere by
ECCN 0D606 but
[[Page 76096]]
that (i) Has been determined to be subject to the EAR in a commodity
jurisdiction determination issued by the U.S. Department of State
and (ii) is not otherwise identified elsewhere on the CCL.
10. In Supplement No. 1 to part 774, Category 0, add Export Control
Classification Number 0E606 between Export Control Classification
Numbers 0E018 and 0E918 to read as follows:
0E606 Technology ``required'' for the ``development,''
``production,'' operation, installation, maintenance, repair, or
overhaul, of ground vehicles and related commodities in 0A606,
0B606, 0C606, or 0D606.
License Requirements
Reason for Control: NS, RS, AT
------------------------------------------------------------------------
Control(s) Country chart
------------------------------------------------------------------------
NS applies to entire entry, except 0E606.y NS Column 1
RS applies to entire entry, except 0E606.y RS Column 1
AT applies to entire entry................ AT Column 1
------------------------------------------------------------------------
License Exceptions
CIV: N/A
TSR: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2))
of the EAR may not be used for any technology in 0D606.
List of Items Controlled
Unit: N/A
Related Controls: Technical data directly related to articles
enumerated in USML Category VII are subject to the controls of USML
paragraph VII(h). See ECCN 0A919 for foreign made ``military
commodities'' that incorporate more than 10% U.S.-origin ``600
series'' items.
Related Definitions: N/A
Items:
a. ``Technology'' ``required'' for the ``development,''
``production,'' operation, installation, maintenance, repair, or
overhaul, of commodities enumerated in ECCN 0A606 (except for ECCNs
0A606.b or 0A606.y).
b. through w. [RESERVED]
y. Specific ``technology'' ``required'' for the ``production,''
``development,'' operation, installation, maintenance, repair, or
overhaul, of commodities enumerated in ECCN 0A606.y., 0B606.y, or
0C606.y, as follows:
y.1. Specific ``technology'' ``required'' for the
``production,'' ``development,'' operation, installation,
maintenance, repair or overhaul of commodities enumerated in ECCN
9A610.y, 9B610.y, 9C610.y, or 9D610.y.
y.2. through y.98 [RESERVED]
y.99. ``Technology'' that would otherwise be controlled
elsewhere by ECCN 0E606 but that (i) Has been determined to be
subject to the EAR in a commodity jurisdiction determination issued
by the U.S. Department of State and (ii) is not otherwise identified
elsewhere on the CCL.
Dated: November 28, 2011.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2011-30976 Filed 12-5-11; 8:45 am]
BILLING CODE 3510-33-P