[Federal Register Volume 79, Number 92 (Tuesday, May 13, 2014)]
[Rules and Regulations]
[Pages 27417-27443]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10807]



[[Page 27417]]

Vol. 79

Tuesday,

No. 92

May 13, 2014

Part III





Department of Commerce





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Bureau of Industry and Security





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15 CFR Parts 732, 734, 736, et al.





 Revisions to the Export Administration Regulations (EAR): Control of 
Spacecraft Systems and Related Items the President Determines No Longer 
Warrant Control Under the United States Munitions List (USML); Final 
Rule

Federal Register / Vol. 79, No. 92 / Tuesday, May 13, 2014 / Rules 
and Regulations

[[Page 27418]]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 732, 734, 736, 740, 742, 744, 748, 758, 772, 774

[Docket No. 130110030-3740-02]
RIN 0694-AF87


Revisions to the Export Administration Regulations (EAR): Control 
of Spacecraft Systems and Related Items the President Determines No 
Longer Warrant Control Under the United States Munitions List (USML)

AGENCY: Bureau of Industry and Security, Department of Commerce.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule adds controls to the Export 
Administration Regulations (EAR) for spacecraft and related items that 
the President has determined no longer warrant control under United 
States Munitions List (USML) Category XV--spacecraft and related items. 
New Export Control Classification Numbers (ECCNs) 9A515, 9B515, 9D515, 
and 9E515 created by this rule and existing ECCNs on the Commerce 
Control List (CCL) will control such items. This rule also revises 
various sections of the EAR to provide the proper level of control for 
the new ECCNs.
    This rule is being published in conjunction with the publication of 
a Department of State, Directorate of Defense Trade Controls rule 
revising USML Category XV to control those articles the President has 
determined warrant control on the USML. Both rules are part of the 
President's Export Control Reform Initiative. The revisions in this 
final rule are also part of Commerce's retrospective regulatory review 
plan under Executive Order (EO) 13563 (see the SUPPLEMENTARY 
INFORMATION for availability of the plan). This rule is being published 
as an interim final rule because the Departments of Commerce and State 
acknowledge that additional internal analysis of and industry input 
regarding the control threshold for various aspects of the amendments 
is warranted, particularly with respect to civil and commercial remote 
sensing satellites and civil and commercial space flight-related items. 
The Departments did not want to wait until this review is done to 
publish this rule in final form because of the substantial national and 
economic security benefits that will flow from the various amendments 
to the controls on satellites and related items.

DATES: Effective Date: This rule is effective June 27, 2014 except for 
amendatory instruction 8, which is effective July 1, 2014, and 
amendatory instructions 28-47, 49-50, 52, and 54, which are effective 
November 10, 2014.
    Comment Date: Comments must be received by November 10, 2014.

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-2013-0012.
     By email directly to publiccomments@bis.doc.gov. Include 
RIN 0694-AF87 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-AF87.

FOR FURTHER INFORMATION CONTACT: For questions about the ECCNs included 
in this rule, contact Dennis Krepp, Office of National Security and 
Technology Transfer Controls, Bureau of Industry and Security, U.S. 
Department of Commerce, Telephone: 202-482-1309, email: 
Dennis.Krepp@bis.doc.gov. For general questions about the regulatory 
changes pertaining to satellites, spacecraft, and related items, 
contact Robert Monjay, Regulatory Policy Division, Office of Exporter 
Services, Bureau of Industry and Security, at 202-482-2440 or 
Robert.Monjay@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

    The Bureau of Industry and Security (BIS) is publishing this 
interim final rule with request for comments as part of the 
Administration's Export Control Reform (ECR) Initiative. President 
Obama directed the Administration in August 2009 to conduct a broad-
based review of the U.S. export control system to identify additional 
ways to enhance national security. In April 2010, then-Secretary of 
Defense Robert M. Gates, describing the initial results of that effort, 
explained that fundamental reform of the U.S. export control system is 
necessary to enhance our national security. The implementation of ECR 
includes amending the International Traffic in Arms Regulations (ITAR) 
and its U.S. Munitions List (USML) so that they control only those 
items that provide the United States with a critical military or 
intelligence advantage or otherwise warrant such controls, and amending 
the Export Administration Regulations (EAR) to control the formerly 
ITAR-controlled items that do not warrant the controls of the ITAR.
    On January 2, 2013, President Obama signed the National Defense 
Authorization Act for Fiscal Year 2013 (``2013 NDAA'') (Pub. L. 112-
239). Section 1261 of the 2013 NDAA amended Section 1513 of the Strom 
Thurmond National Defense Authorization Act for Fiscal Year 1999 
(``1999 NDAA'') by striking the requirement that all satellites and 
related items be subject to the export control jurisdiction of the 
ITAR. The 2013 NDAA authorized the President, pursuant to section 38(f) 
of the Arms Export Control Act (AECA) (22 U.S.C. 2778(f)), to review 
Category XV of the USML ``to determine what items, if any, no longer 
warrant export controls under'' the AECA. On May 24, 2013, the 
Department of State, Directorate of Defense Trade Controls (DDTC) 
published a proposed rule, Amendment to the International Traffic in 
Arms Regulations: Revision of U.S. Munitions List Category XV and 
Definition of ``Defense Service'' (78 FR 31444) (herein ``the companion 
proposed DDTC rule'') setting forth the proposed revised USML Category 
XV. On the same day, BIS published a companion proposed rule, Export 
Administration Regulations (EAR): Control of Spacecraft Systems and 
Related Items the President Determines No Longer Warrant Control Under 
the United States Munitions List (USML) (78 FR 31431) (herein ``the May 
24 (spacecraft) rule''), describing the revisions to the EAR required 
to exercise control over those spacecraft and related items no longer 
listed in USML Category XV and setting forth the proposed 9x515 ECCNs.
    This interim final rule implements the proposal of the May 24 
(spacecraft) rule to create four new 9x515 ECCNs in CCL Category 9 
(ECCNs 9A515, 9B515, 9D515, and 9E515) to describe the EAR controls 
over items the President determines no longer warrant control under 
USML Category XV and that are not otherwise within the scope of an 
existing ECCN. New ECCN 9A515 applies to spacecraft, ground stations, 
and ``specially designed'' parts, components, accessories and 
attachments. New ECCN 9B515 applies to related test, inspection and 
production equipment and the ``specially designed'' parts and 
components. New ECCN 9D515 applies to related software. New ECCN 9E515 
applies to related technology.
    This rule also makes a number of conforming changes to the EAR and 
existing ECCNs to implement the creation of the 9x515 ECCNs and the 
appropriate controls on the export of

[[Page 27419]]

those items. In several existing ECCNs, BIS added or revised the 
related controls to provide cross references to relevant paragraphs in 
the revised Category XV or the new 9x515 ECCNs. The sections below set 
out the issues identified in the public comments to the May 24 
(spacecraft) rule and describe BIS responses to those comments and 
changes from the proposed text.
    This rule will be implemented in two stages. On the first effective 
date, 45 days following the publication of this interim final rule, the 
controls on radiation-hardened microelectronic circuits in Category 
XV(d) will be deleted from the USML, and microelectronic circuits will 
be removed from USML Category XV(e). In addition, the ITAR controls on 
software and technical data directly related to such microelectronic 
circuits will be removed from USML XV(f). The EAR will simultaneously 
create ECCNs 9A515.d and .e to control radiation-hardened 
microelectronic circuits, and 9D515.d and .e and 9E515.d and .e, to 
control software and technology specially designed for or required for 
such radiation-hardened microelectronic circuits. All changes in the 
EAR outside the CCL needed to give effect to these new controls will 
also become effective 45 days following the publication of this interim 
final rule. The reason for the 45-day period is explained in response 
to public comment 38 below.
    On the second effective date, 180 days following the publication of 
this final rule, the remainder of USML Category XV will be revised. The 
remaining changes in this rule will then become effective, including 
the revisions to several non-9x515 ECCNs, the rest of ECCN 9A515 to 
provide the controls in paragraphs .a, .b, .x and .y, adding ECCN 
9B515, and the rest of ECCNs 9D515 and 9E515 to control software and 
technology specially designed for or required for the remaining items 
that become subject to the controls of the 9x515 ECCN simultaneously 
with the amendments to the rest of USML XV.
    This interim final rule requests public comment on the changes to 
the EAR implemented in this rule and the continued applicability of 
USML Category XV of the ITAR to commercial and civil spacecraft. In 
particular, BIS seeks comments on the continued application of USML 
controls to civil and commercial communications satellites, civil and 
commercial remote sensing satellites, commercial space launch vehicles, 
human spaceflight and academic or scientific satellites and other 
spacecraft. BIS would like to study if controls can and should be 
revised to allow continued control of spacecraft with uniquely military 
or intelligence related capabilities on the USML, while allowing most, 
if not all, civil, commercial and scientific spacecraft to be shifted 
to the CCL. In addition, BIS seeks comments on any other aspect of this 
interim final rule and, in particular, whether the new controls 
described in this interim final rule are clear and, if not, how they 
could be revised to help ensure understanding of and compliance with 
the controls. DDTC will accept comments on paragraphs (a)(7) and 
(e)(11) of USML Category XV and ITAR Sec.  124.15, as described in its 
interim final rule amending USML Category XV. Any revisions made by 
DDTC to the ITAR as a result of those comments may necessitate further 
revisions to the EAR, including to the new license documentation 
requirements for the export of satellites for launch, described in the 
new paragraph (y) of Supplement No. 2 to Part 748.
    As required by Executive Order (EO) 13563, BIS intends to review 
this rule's impact on the licensing burden on exporters. Commerce's 
full plan is available at: http://open.commerce.gov/news/2011/08/23/commerce-plan-analysis-existing-rules. Data are routinely collected, 
including through the comments to be submitted, and new information and 
results from AES data on an ongoing basis. These results and data have 
been, and will continue to form, the basis for ongoing reviews of the 
rule and assessments of various aspects of the rule. As part of its 
plan for retrospective analysis under EO 13563, BIS intends to conduct 
periodic reviews of this rule and to modify, or repeal, aspects of this 
rule, as appropriate, and after public notice and comment. With regard 
to a number of aspects of this rule, assessments and refinements will 
be made on an ongoing basis. This is particularly the case with regard 
to possible modifications that will be considered based on public 
comments described above.

Response to Comments

    BIS received thirty-eight public comments on the May 24 
(spacecraft) rule before the close of the public comment period on July 
8, 2013. The following is a summary of those comments, along with BIS's 
responses and descriptions of all changes from the May 24 (spacecraft) 
rule. The comments are organized by topic, with similar comments 
grouped together under the same heading. BIS is referring to the new 
ECCNs 9A515, 9B515, 9D515 and 9E515 collectively as 9x515. In the May 
24 (spacecraft) rule, BIS referred to these proposed ECCNs as the ``500 
series,'' and many comments refer to the ``500 series.''

General Comments

    Comment #1: Twenty commenters expressed overall support for the May 
24 (spacecraft) rule.
    Response to Comment #1: BIS is pleased with the overwhelmingly 
positive response to the concept of moving commercial, scientific, 
weather and other less sensitive spacecraft and parts and components, 
and related software and technology, from the USML to the CCL in order 
to accomplish the national and economic security objectives of this 
part of the Export Control Reform effort.
    Comment #2: One commenter requested that BIS review the effective 
date of the entire rule to determine if a six month delayed effective 
date is necessary to ensure proper implementation of the new regime by 
the U.S. licensing agencies and the effected industry.
    Response to Comment #2: BIS has determined that, in general, a six-
month period is required to allow exporters, reexporters and other 
parties sufficient time to study the new rules, to reclassify their 
products, and to update their compliance systems for transitioning 
``spacecraft'' and related items. However, as discussed in detail below 
in the response to comments regarding radiation-hardened 
microelectronic circuits, controls on such items will transition from 
the USML to CCL on June 27, 2014. Therefore, this interim final rule 
contains two effective dates to accommodate the interests of the two 
different industries in a manner that does not compromise the national 
security, foreign policy, and other objectives of these controls.
    Comment #3: Three commenters asked BIS to address how this final 
rule and the DDTC final rule for USML Category XV, published in tandem 
with this rule, will apply to items previously exported from the United 
States.
    Response to Comment #3: This interim final rule applies to all 
items subject to the EAR on the date this rule becomes effective, 
regardless of their geographic location or when they were originally 
exported. The transition plan for items moving from the USML to the CCL 
as part of Export Control Reform was described in final rules published 
by BIS and DDTC on April 16, 2013; 78 FR 22660 (Revisions to the Export 
Administration Regulations: Initial Implementation of Export Control 
Reform) and 78 FR 22740 (Amendment to the International Traffic in Arms 
Regulations: Initial Implementation of Export Control Reform). These 
rules

[[Page 27420]]

contain a description of how items are controlled during the transition 
period. Any item subject to the EAR, including under these new 
regulations, must comply with the EAR for all subsequent exports, 
reexports and transfers (in-country) beginning on the date the change 
becomes effective. Any foreign parties who wish to reexport or 
retransfer items transitioned to a 9x515 or other ECCN should 
reclassify their items and comply with the EAR by the time the change 
becomes effective. If the reexport or retransfer is authorized under an 
active DDTC license, and the party wishes to engage in the transaction 
under the EAR, they should review the ITAR Initial Implementation of 
Export Control Reform at 78 FR 22747 or contact DDTC for further 
guidance.
    Comment #4: One commenter claimed that most companies will not 
avoid future DDTC licensing fees because one or more products will 
remain on the USML.
    Response to Comment #4: BIS agrees that some companies involved in 
the satellite industry will now have items subject to both the EAR and 
the ITAR. However, BIS believes that many companies will now only have 
items subject to the EAR and others' items will remain wholly subject 
to the ITAR. It is not the purpose of the Export Control Reform effort 
to remove all items from the control of the ITAR or EAR merely for the 
sake of changing controls. Rather, the purpose is to apply the right 
level of control to items of different sensitivities based on national 
security and foreign policy considerations. In general, items that 
warrant essentially worldwide controls with few exceptions and that 
otherwise warrant the controls of the ITAR for the reasons described in 
the preamble are in USML Category XV. Other items pertaining to 
satellites and other spacecraft that do not warrant control on the 
ITAR, but that nonetheless warrant or are required to be controlled, 
will become subject to the EAR. The structure of the EAR allows for 
more tailored controls. Less sensitive items can be controlled 
differently to different destinations under different circumstances.
    Comment #5: Two commenters recommended a formal interagency review 
process for continued revision of USML Category XV and the transition 
of items to the 9x515 ECCNs.
    Response to Comment #5: BIS agrees that a formal interagency review 
process for continued revision of USML Category XV and the transition 
of items to the 9x515 ECCNs is warranted. BIS and DDTC are publishing 
their respective rules as interim final rules because both acknowledge 
that several parts of the new regulations warrant additional and, 
indeed, continued review based on evolving technologies and commercial 
applications for what were once exclusively military or intelligence 
applications. In particular, BIS, DDTC, and the other relevant agencies 
will continue to study the interim final controls on remote sensing 
satellites to determine whether additional revisions are warranted. BIS 
and DDTC acknowledge that, as published, the ITAR will continue to 
control some satellites that have civil or commercial application. BIS 
and DDTC may or may not determine that additional revisions are 
warranted to these and the other controls in these interim final rules. 
They will publish a final rule taking into account public comments 
received, within six months of the effective date of this rule. The 
Departments of State, Commerce, and Defense will also announce 
separately their plans to re-create the Space Technology Working Group 
in order to establish a regular process for discussing with industry 
developments in space-related technologies and applications.
    Comment #6: One commenter suggested that BIS revise 15 CFR 
732.2(b)(1) to read: ``If your technology or software is publicly 
available and therefore outside the scope of the EAR, you may proceed 
with the export or reexport.'' The commenter argues that deletion of 
the phrase ``if you are not a U.S. person subject to General 
Prohibition Seven'' would be consistent with all other parts of the 
EAR, which treat publicly available information as outside the scope of 
the EAR and with the proposed revisions to 22 CFR 120.9 that ``defense 
service'' means furnishing of assistance using ``other than public 
domain information'' in the companion proposed DDTC rule.
    Response to Comment #6: BIS does not accept this comment because it 
is outside the scope of the May 24 (spacecraft) rule and, in any event, 
the concern is unwarranted. By definition, technology or software that 
is publicly available is not subject to the EAR. See Sec.  734.3(b)(3) 
of the EAR. Additionally, General Prohibition No. 7 imposes 
restrictions on all U.S. persons engaged in prohibited activities 
regardless of whether any technology involved is publicly available. 
Therefore, the removal of the reference to General Prohibition No. 7 
would be misleading.
    Comment #7: One commenter argued that only half of the countries 
listed in Country Group D:5 are labeled in 22 CFR 126.1 as subject to 
arms embargoes (10 U.N. embargoes plus three unilateral--Burma, China, 
Sudan). The commenter argues that, therefore, the restrictions on 
exports to the countries listed in Country Group D:5 in the EAR May 24 
(spacecraft) rule are more restrictive than apparently intended, 
identifying the proposed revisions to Sec. Sec.  734.4, 736.2(b)(3), 
740.2(a)(12), 740.9(a), 740.10(a)(3)(viii) and (b)(3)(i)(F), 
742.4(b)(1)(ii), and 742.6(b)(1).
    Response to Comment #7: BIS does not accept the change suggested by 
the commenter. Country Group D:5 accurately reflects the countries 
currently identified in Sec.  126.1 of the ITAR as being subject to a 
U.S. arms embargo. BIS will review all license applications for export 
to destinations in Country Group D:5 consistent with the applicable 
U.S. arms embargo policy for that destination set forth in Sec.  126.1 
of the ITAR. This means, for example, that if the State Department 
would deny a license to export a USML Category XV item to a country in 
the ITAR's Sec.  126.1 then the Commerce Department would deny a 
license to export a 9A515 item to the same country, all other facts 
being the same. If the State Department would have approved the 
license, then the Commerce Department would approve the license, all 
other facts being the same.

De Minimis Comments

    Comment #8: One commenter suggested revising the de minimis level 
for foreign-made commercial satellites or components containing 9A515 
parts and components so that the foreign-made satellites could be 
reexported to the People's Republic of China (PRC) without a license as 
not subject to the EAR if they contained 25% or less U.S.-origin 
controlled content.
    Response to Comment #8: BIS rejects the change suggested by the 
commenter. BIS has determined that the 2013 NDAA authorizing the 
removal of ``spacecraft'' and related items from the USML mandates that 
de minimis treatment is not available for any 9A515 items incorporated 
into ``spacecraft'' reexported to the PRC. Even if BIS had the 
discretion under the 2013 NDAA to allow 25% de minimis treatment for 
reexports to the PRC, BIS has determined that it is in the national 
security and foreign policy interests of the United States to maintain 
the 0% de minimis treatment for 9A515 items with respect to their 
export and reexport to the PRC, in whole or as part of foreign-made 
systems and other items.

[[Page 27421]]

Licensing Requirements and Licensing Policy Comments

    Comment #9: One commenter suggested that BIS should ensure dual 
licensing is not required.
    Response to Comment #9: As part of the review of USML Category XV 
and the public comments, BIS has worked diligently to avoid the 
potential for dual license requirements. However, in the event that a 
dual license requirement does arise, as part of the initial 
implementation of Export Control Reform, BIS and DDTC created new 
regulatory mechanisms to allow DDTC to license items subject to the EAR 
when used in or with defense articles on the USML. See Sec.  734.3(e) 
of the EAR and Sec.  120.5(b) of the ITAR.
    Additionally, as described above, to address the potential for dual 
licensing, the revised USML Category XV and the 9x515 controls have 
been revised, through the addition of a note to USML Category XV and to 
9A515 to allow the incorporation of USML items into spacecraft 
controlled in 9A515 without the resultant satellite's being subject to 
the ITAR.
    Comment #10: One commenter requested that BIS clarify the on-orbit 
satellite registration transfer licensing requirements. For example, 
are license requirements based on purchaser's place of incorporation or 
ownership?
    Response to Comment #10: BIS controls, within the definition of 
``reexport'' the transfer of registration of a satellite or operational 
control over a satellite from a party resident in one country to a 
party resident in another country. For transfers to corporations, 
licensing will be based on the country of residency of the corporation, 
such as the country of incorporation or the country of its primary 
place of business. See Sec.  772.1 of the EAR. BIS appreciates that 
this part of the definition, which has not been applied since 
satellites were transferred to the control of the State Department in 
1999, will require refinement as new business patterns are presented. 
BIS encourages the public to submit comments while this rule is an 
interim final rule to help clarify the scope of the licensing and other 
obligations with such transactions.
    Comment #11: One commenter asked BIS to clarify the phrase 
``destined to a country'' in the context of license requirements for 
the export and reexport of ``spacecraft.'' Specifically, the requester 
asked if an export is only to the end-user country, or whether it would 
include the country of any party in temporary contact with the item 
while it is transiting one of these countries. The requester also 
asked, if a commercial communications satellite incorporating a U.S. 
component controlled under 9A515.x were to transit through, be handled 
by a national of (e.g., in a transport container), or be launched from 
a country listed in Group D:5, would a de minimis rule of 0% be 
applicable?
    Response to Comment #11: The EAR generally imposes licenses 
requirements based on the country of ultimate destination. With the 
exception of those countries identified in General Prohibition 8 (Sec.  
736.2(b)(8) of the EAR), transiting a country en-route to the ultimate 
destination is not a licensable event. However, under the EAR, 
``spacecraft'' have two potential countries of ultimate destination, 
the country where a space launch occurs and the country that will have 
control over the ``spacecraft'' after launch. The 0% de minimis 
threshold for D:5 countries applies to both the country of launch and 
the country of control.
    Comment #12: One commenter stated that the last sentence of 
proposed Sec.  742.6(b)(1) set out a policy of denial for 9x515 items 
to the PRC that is more restrictive than the case-by-case review for 
licenses for ``600 series'' items to the PRC and stated that treating 
the 9x515 items more restrictively than the ``600 series'' with respect 
to licensing policy to the PRC is inconsistent with the reasoning for 
treating 9x515 more liberally than ``600 series'' in other respects, 
such as License Exception Strategic Trade Authorization (STA) 
restrictions to other countries.
    Response to Comment #12: BIS has determined that the 2013 NDAA 
authorizing the removal of ``spacecraft'' and related items from the 
USML mandates a policy of denial for export licenses of 9x515 items to 
the PRC. BIS has adopted such a policy of denial with regard to 
National Security controls in Sec.  742.4(b)(1)(iii) and with regard to 
Regional Stability controls in Sec.  742.6(b)(1). As described in Sec.  
742.4(b)(1)(ii) and Sec.  742.6(b)(1) exports of both 9x515 and ``600 
series'' items destined to countries in Country Group D:5, including 
the PRC, will be reviewed consistent with the review policies set forth 
in Sec.  126.1 of the ITAR for U.S. arms embargos.
    Comment #13: One commenter stated that it is inappropriate for BIS 
to adopt a policy of denial for exports to countries subject to arms 
embargoes (such as the PRC) of 9x515 items, which include many items 
that are commercial items with no military or intelligence 
applications.
    Response to Comment #13: BIS has determined that the 2013 NDAA 
authorizing the removal of ``spacecraft'' and related items from the 
USML mandates a policy of denial for export licenses of 9x515 items to 
the PRC, North Korea, and any country that is a state sponsor of 
terrorism. Therefore, BIS has adopted a policy of denial for such items 
to these destinations. Further, BIS has determined that the 2013 NDAA 
mandates a presumption of denial for the export of 9x515 items to any 
country with respect to which the United States maintains a 
comprehensive arms embargo. To give effect to the United States arms 
embargoes, BIS will review all 9x515 licenses consistent with the 
United States arms embargo policies set forth in Sec.  126.1 of the 
ITAR.
    Comment #14: One commenter stated that Sec.  750.7(i) of the EAR 
provides that a foreign entity is not bound by the prior STA Consignee 
Statement and Destination Control Statement associated with 9x515 and 
``600 series'' items when retransferring or reexporting the items under 
the authority of de minimis after integration into a larger assembly or 
as a result of an additional applicable license exception, providing 
examples of License Exception Additional Permissive Reexports (LE APR 
at Sec.  740.16) and License Exception Temporary Imports, Exports and 
Reexports (LE TMP at Sec.  740.9).
    Response to Comment #14: Section 750.7(i) of the EAR is a provision 
that allows an exporter who obtained an individually validated licenses 
from BIS to no longer be bound by the license conditions attached to 
that authorization in the event that the EAR has been amended to either 
authorize the transaction on the license under a license exception or 
to remove the license requirement from that transaction. It has no 
effect in the absence of a license.
    Additionally, for an export under License Exception STA to be 
valid, all parties must ensure compliance with all the requirements of 
License Exception STA, including those attested to in the Prior 
Consignee Statement. Further, any foreign-origin item incorporating US 
origin 9x515 or ``600 series'' content will always be subject to the 0% 
de minimis threshold for shipments to countries in Country Group D:5 
and will require a license for any such shipments.
    Comment #15: One commenter asked BIS to create a streamlined export 
licensing process for programs (such as insurance) that typically 
include multiple parties, or are in multiple countries with multiple 
third-country nationals and dual nationals.
    Response to Comment #15: BIS licensing processes and procedures are

[[Page 27422]]

described in Part 748 of the EAR, and applications are submitted 
through the SNAP-R application on the BIS Web site. One aspect of the 
reform effort that is outside the scope of this rule but relevant to 
the comment is that BIS has the authority to generally structure 
licenses in a flexible manner to accommodate both applicant's issues as 
well as the national security, foreign policy, and other reasons the 
items at issue warranted control. BIS thus encourages the commenter to 
contact the relevant licensing officer to discuss issues regarding the 
structuring of any particular license applications the commenter has in 
mind.
    Comment #16: One commenter recommended that BIS create a CCL 
licensing practice or policy by which a satellite manufacturer or 
operator could obtain a single cradle-to-grave program license that 
would cover all manufacturer-client interactions, beginning with 
marketing and sales activities and including contract discussions, 
delivery negotiations, and on-orbit support. Even if a separate license 
for launch services would also be required, a single license covering 
all other activities would be invaluable.
    Response to Comment #16: BIS agrees that having a single program 
under one license is a desirable outcome for compliance purposes. If an 
applicant can define the total activity that is subject to EAR--namely, 
the end users, end uses, destinations, and specific items at issue in 
the program at issue--BIS generally has the authority and capability to 
approve such transactions under a single license. With respect to 
marketing and sales activities that may occur without a specific 
license, the commenter should review License Exception Technology and 
Software Unrestricted (TSU) (Sec.  740.13).

License Exceptions

    Comment #17: One commenter suggested deleting Sec.  740.2(a)(7) to 
allow the use of license exceptions for the export of ``space-
qualified'' items that had remained subject to the EAR.
    Response to Comment #17: BIS accepts the change suggested by the 
commenter. Section 740.2(a)(7) was a limitation on the use of license 
exceptions for certain ``space-qualified'' items that remained subject 
to the EAR following the transfer of jurisdiction for satellites and 
related items to DDTC. With the revision to USML Category XV, BIS has 
determined that it is inconsistent with the purpose of the new controls 
and the availability of certain license exceptions, to continue to 
prohibit the use of license exceptions for ``space-qualified'' items 
controlled in other ECCNs. To determine which license exceptions are 
available for each ECCN, please review the specific ECCN and Part 740 
of the EAR.
    Comment #18: One commenter suggested revising proposed Sec.  
740.2(a)(17) to allow License Exception STA for technology described in 
proposed 9E515.b.
    Response to Comment #18: BIS does not accept the change suggested 
by the commenter. BIS has revised 9E515 to clarify the technology 
controlled in paragraph .b. Section 740.2(a)(17) still prohibits the 
use of License Exception STA for the technology described in 9E515.b 
(and 9E515.d and .e with respect to radiation-hardened microelectronic 
circuits), but the universe of technology described has been revised so 
that it is more clear.
    Comment #19: One commenter suggested allowing a license exception 
for ``deemed exports'' for amateur radio satellite design and 
construction to allow the free exchange of ideas, software, and other 
activities pertaining to amateur radio satellite design and 
construction with foreign nationals who are citizens of nations listed 
in the License Exception STA Country List.
    Response to Comment #19: Security concerns resulting from the 
deemed export of technology in 9E515.b that led to the restriction on 
STA eligibility do not depend on the commercial nature of the 
transactions. Therefore, BIS does not accept the change suggested by 
the commenter.
    Comment #20: One commenter noted that the ITAR contains a specific 
exemption for the export by U.S. institutions of higher learning of 
satellites for fundamental research purposes under Sec.  123.16(b)(10), 
which has not been incorporated into the proposed EAR 500 series.
    Response to Comment #20: BIS accepts the change suggested by the 
commenter and has created a new paragraph (e) in License Exception 
Aircraft and Vessels (AVS) to recreate the scope of ITAR Sec.  
123.16(b)(10) in the EAR in a manner consistent with the structure of 
the EAR and the less sensitive nature of the items that have moved from 
USML Category XV. The new Sec.  740.15(e) allows the export of 
``spacecraft'' and other commodities controlled in 9A515 by accredited 
institutions of higher learning in the United States to countries that 
are members of NATO (see Sec.  120.31 of the ITAR), European Space 
Agency or the European Union, or are major non-NATO allies (see Sec.  
120.32 of the ITAR), and other countries that are not subject to 
embargoes, when fabricated only for the purpose of fundamental 
research. This rule also changes the name of License Exception AVS to 
``Aircraft, Vessels, and Spacecraft.''
    Comment #21: Two commenters stated that multiple provisions in the 
ITAR that are essential to university-based research have not been 
carried over to the EAR, including 22 CFR 123.16, 22 CFR 125.4(b)(7), 
and 22 CFR 125.4(b)(9).
    Response to Comment #21: The commenters' assertions are not 
completely correct. Certain ITAR license exemptions identified by the 
commenter have preexisting parallel provisions in the EAR. For 
exemptions found in ITAR Sec.  125.4(b)(7), the commenter should review 
License Exception TMP at Sec.  740.9(b)(3). For those found in ITAR 
Sec.  125.4(b)(9), the commenter should review License Exception TMP at 
Sec.  740.9(a)(1) and License Exception GOV at Sec.  740.11(b). As 
detailed above in the response to Comment 20, ITAR Sec.  
123.16(b)(10) has been replicated in the EAR in the new paragraph (e) 
of License Exception AVS (Sec.  740.15). Additionally, License 
Exception STA at Sec.  740.20 does authorize many of the transactions 
authorized under ITAR Sec.  123.16(b)(10) and the other exemptions. If, 
upon further review, the commenter identifies transactions that would 
be exempt from an individual licensing requirement in the ITAR that 
would not be for the same transaction involving items that have become 
subject to the EAR, all other facts being equal, then it should inform 
BIS of such information.
    Comment #22: Two commenters stated that the utility of license 
exceptions in the EAR will be significantly limited for any items or 
technologies that are subject to control for MT reasons, including 
portions of the 9x515 ECCNs created by this rule. The commenters 
requested that BIS consider ways that the EAR can be adjusted to 
prevent items that are transferred to the CCL from creating more of a 
licensing burden than they were under the ITAR.
    Response to Comment #22: BIS has determined that certain uses of 
MT-controlled items in ``spacecraft'' meet the criteria for the 
applicability of license exceptions and is revising Sec.  
740.2(a)(5)(i) to allow the use of license exceptions for certain MT-
controlled items when exported as part of a ``spacecraft'' or in 
quantities appropriate for replacement parts. BIS is also adding 7A105, 
for certain GPS systems that were previously ITAR controlled, and 
9A515, for certain spacecraft, related items, radiation hardened 
microelectronic circuits and parts, components, accessories and

[[Page 27423]]

attachments that were previously ITAR controlled, to the list of ECCNs 
that are eligible for the use of certain license exceptions for MT 
items. BIS is prohibited by statute from further amending licensing 
obligations for items that are MT controlled.
    Comment #23: Two commenters stated that License Exception STA 
should apply to all of 9D515 and 9E515.
    Response to Comment #23: BIS does not accept the change suggested 
by the commenter. Certain software, listed in 9D515.b (to be effective 
on November 10, 2014), .d, and .e, is excluded from STA eligibility 
based on the national security concerns related to the export of the 
referenced software. Similarly, the technology in 9E515.b (to be 
effective on November 10, 2014), .d, and .e is excluded from STA 
eligibility based on the national security concerns related to that 
technology. The commenter should nonetheless review the revisions to 
9D515 and 9E515 that clarify the scope of the STA exclusions from the 
ECCNs.
    Comment #24: One commenter suggested that BIS allow small- and 
medium-sized companies the ability to quickly support new startups and 
ventures with companies in countries authorized as destinations in 
License Exception STA in paragraphs (c)(1) and (2).
    Response to Comment #24: License Exception STA is not authorized to 
Country Group A:6 (the countries authorized in paragraph (c)(2) of 
License Exception STA) for any 9x515 items. However, License Exception 
STA is available for exports to countries in Country Group A:5 (the 
countries authorized in paragraph (c)(1) of License Exception STA) for 
most of the items controlled in 9A515, 9D515 and 9E515, and all the 
items controlled in 9B515.
    Certain specific ``spacecraft,'' controlled in 9A515.a, that 
provide space-based logistics, assembly or servicing to another 
spacecraft are excluded from automatic eligibility for License 
Exception STA. To use License Exception STA for these ``spacecraft,'' 
the exporter must submit a request to BIS, in accordance with Sec.  
740.20(g) (License Exception STA eligibility requests for certain 9x515 
and ``600 series'' end items), for a determination by BIS that the item 
is eligible for License Exception STA. This rule revises Sec.  
740.20(g) to add the specific 9A515.a ``spacecraft'' to the list of 
items authorized for determination under that paragraph and revises the 
heading to include a reference to 9x515.
    Comment #25: One commenter noted that the ITAR includes a license 
exemption in Sec.  125.4(b)(7), allowing the return of technical data 
to the original source of import, and requested that it be brought to 
the EAR.
    Response to Comment #25: The exports authorized by Sec.  
125.4(b)(7) of the ITAR will generally be authorized by License 
Exception TMP Sec.  740.9(b)(3) for items subject to the EAR. It is 
comparable in that it allows the return of items to the country of 
origin, except for Cuba, if the original items had not been enhanced. 
This license exception does not allow the dissemination of technology 
that has been revised, or in any way improved, while in the United 
States. Such actions create U.S.-origin technology, which would be 
subject to the EAR and may require a license for export. If the 
commenter can identify a transaction where License Exception TMP is 
more restrictive than ITAR Sec.  125.4(b)(7), then it should let BIS 
know.

General Comments Related to ECCN 9A515

    Comment #26: Two commenters requested the insertion of a note to 
9x515 that would make clear that non-U.S. origin items described in the 
ECCNs that are transferred to the United States would not be subject to 
the EAR, and therefore would not require a license in order to be re-
transferred outside the United States.
    Response to Comment #26: BIS does not accept the changed suggested 
by the commenter. All items in the United States, not otherwise 
excluded from BIS jurisdiction, are subject to the EAR, whether U.S.-
origin or foreign origin. However, License Exception TMP (Sec.  
740.9(b)(3)) does allow the return of items to their country of origin 
if unaltered while in the U.S. In addition, the export from the United 
States of a wholly foreign-made item does not mean that subsequent 
reexports of that item are subject to the EAR. See 15 CFR 734.3(a).
    Comment #27: One commenter noted that 9A515 was drafted using 
catch-all phrases similar to the unrevised USML Category XV and 
suggested that BIS redraft 9A515 so that it used only positive 
controls, similar to the revised USML Category XV.
    Response to Comment #27: BIS does not accept the change suggested 
by the commenter. As with the ``600 series'' ECCNs created to 
accomplish the rewrites of the other USML Categories, the 9x515 ECCNs 
necessarily include catch-all provisions to ensure continuity of 
control over all items removed from the USML. This is necessary because 
USML Category XV used catch-all phrases for its controls. Thus, the 
reform effort will result in more positive controls on the USML, while 
maintaining catch-all controls on the CCL. As described in previous 
Federal Register notices, BIS believes the negative aspects of catch-
all controls have been ameliorated through the creation of a relatively 
objective definition of ``specially designed.''
    Comment #28: One commenter asked if the new 9x515 ECCNs include 
only items that are transferred from the USML to the CCL, or if they 
also include items previously covered by other ECCNs (such as for 
example 9A004.b.) or items designated EAR99.
    Response to Comment #28: BIS's goal in drafting the 9x515 ECCNs is 
that they would control no more items than that were either (i) 
formerly controlled in USML XV that are no longer described in the 
revised USML XV or (ii) within the scope of the former 9A004.b, and 
that they would not control items (i) within the scope of existing 
``space-qualified'' ECCNs or (ii) that are star trackers in 7A004 and 
7A104. BIS believes that its decision to change the catch-all control 
parameter in 9A515.x from ``space-qualified'' to ``specially designed'' 
removes the uncertainty that EAR99 items would move up to 9A515.x 
through successful testing for use in space. BIS is unaware of any item 
that was properly determined to be subject to the EAR and as an EAR99 
item that would be within the scope of 9A515.x or any other 9x515 ECCN 
paragraph. If the commenter believes otherwise, then he should notify 
BIS of the issue either during the interim period of this final rule or 
through the commodity classification process described in EAR Sec.  
748.3.
    Comment #29: Two commenters requested that BIS separate out purely 
commercial items and subject them to lesser controls.
    Response to Comment #29: Controls are based on the national 
security and foreign policy concerns associated with a particular item 
and are imposed at the levels that are warranted. Merely because 
something is commercial does not mean control is not warranted. Even 
purely commercial satellites provide a significant functionality that 
warrants significant control. Specifically, any satellite can, by 
virtue of its position in orbit above the earth, provide a platform 
with a global reach and the potential to carry alternative payloads 
that may have direct national security implications. Additionally, the 
technology related to the workings of commercial satellites provide the 
majority of the technology necessary to allow other countries to 
establish a space presence of significant concern as described in the 
report the Departments of Defense and State

[[Page 27424]]

provided to Congress in 2012 regarding controls on spacecraft. See 
Departments of Defense and State ``Final Report,'' required by section 
1248 of the National Defense Authorization Act of Fiscal Year 2010, 
available at http://www.defense.gov/home/features/2011/0111_nsss/docs/1248_Report_Space_Export_Control.pdf (the ``1248 Report'').
    Comment #30: One commenter requested that BIS change the reasons 
for control on 9A515 from NS1 and RS1 to NS2 and RS2.
    Response to Comment #30: BIS accepts the change suggested by the 
commenter for the new microelectronic circuit control described in 
9A515.e. ECCN 9A515.e has an RS2 reason for control because it is for 
lower level radiation tolerant microelectronic circuits that do not 
raise the same national security concerns and do not require the same 
global license requirement as other space related items. The remainder 
of 9A515, except the new .y paragraph, has NS1 and RS1 reasons for 
control.

Comments Related to Spacecraft in 9A515.a

    Comment #31: Two commenters suggested that ``spacecraft'' 
controlled in 9A515.a should remain ``subject to the EAR'' even if they 
incorporate a defense article listed on the USML.
    Response to Comment #31: BIS accepts the change suggested by the 
commenter and has added a heading note at the top of the Items 
paragraph of 9A515 to state that ``spacecraft'' and other items 
described in 9A515 remain subject to the EAR even if defense articles 
described on the USML are incorporated into the items, unless they take 
on the characteristics described in Category XV(a) of the USML. The 
note also states that in all other cases, defense articles described on 
the USML are subject to the ITAR. DDTC has added a corresponding note 
to its revised USML XV. This note in 9A515 provides readers with a 
summary of the note on the ITAR excluding these integral and 
incorporated defense articles from the USML. As this represents a 
departure from the standard ITAR ``see-through'' rule, it is 
appropriate to call it to the reader's attention.
    The 1999 NDAA mandates certain special export controls on the 
export of satellites and the performance of certain activities 
associated with the launch of a U.S.-origin satellite in a foreign 
country. The 2013 NDAA requires that the President provide for end-use 
monitoring of satellites and related items transferred from the USML to 
the CCL. As a result of the changes to Category XV in response to 
public comment, certain end item satellites may not be subject to ITAR 
licensing for the export of those satellites, including when exported 
for launch. Therefore, DDTC has revised Sec.  124.15 of the ITAR, which 
implements the 1999 NDAA mandate, to clarify which special export 
controls apply only to satellites and related items subject to the ITAR 
and which controls apply to all satellites and related items regardless 
of jurisdiction.
    Mirroring these revisions to Sec.  124.15 of the ITAR, BIS created 
new export license application requirements, consistent with the 1999 
NDAA mandate and implementing the 2013 NDAA mandate, for satellites 
subject to the EAR. In Supplement No. 2 to Part 748, BIS added a 
paragraph (y) to describe the requirement, from the 1999 NDAA, for a 
Department of Defense approved technology control plan and a National 
Security Agency approved encryption control plan, or evidence of 
ongoing discussions to obtain approved plans, and evidence of 
arrangements for the Department of Defense to provide monitoring, to be 
provided to BIS with the application for an export license for a 
satellite.
    The 1999 NDAA only mandates special export controls for licenses to 
export a satellite to a country that is not a member of the North 
Atlantic Treaty Organization (NATO) or a major non-NATO ally of the 
United States. However, in furtherance of the national security and 
foreign policy interests of the United States, BIS has the discretion 
to require evidence of compliance with special export control 
requirements in connection with licenses to export satellites or 
spacecraft subject to the EAR to a country that is a member of NATO or 
is a major non-NATO ally. Accordingly, paragraph (y)(2) of Supplement 
No. 2 to Part 748 states that a license application to export a 
satellite controlled by ECCN 9A515.a to such countries must include (i) 
a technology transfer control plan approved by the Department of 
Defense and an encryption technology control plan approved by the 
National Security Agency, or documentation from the Department of 
Defense that such plans are not required; and (ii) evidence of 
arrangements with the Department of Defense for monitoring of the 
launch or documentation from the Department of Defense that such 
monitoring is not required.
    Regardless of a satellite's or spacecraft's jurisdictional status, 
ownership, or origin, the ITAR controls as a ``defense service'' the 
furnishing of assistance (including training) by a U.S. person to a 
foreign person directly related to (a) the integration of a satellite 
or spacecraft to a launch vehicle or (b) launch failure analyses. See 
22 CFR 121.1, USML XV(f).
    Comment #32: Two commenters suggested that BIS control sub-orbital 
spacecraft that are ``reusable launch vehicles'' and designed to carry 
humans on-board and any ``specially designed'' carrier aircraft in 
9A515. The commenters also suggested adopting definitions for 
``suborbital rockets'' and ``reusable launch vehicles'' from the 
Federal Aviation Administration, Commercial Space Transportation 
regulations at 14 CFR 401.5.
    Response to Comment #32: BIS is controlling in 9A515.a all 
``spacecraft'' no longer listed on USML XV(a). The revised USML 
Category XV(a) does not list ``spacecraft'' ``specially designed'' for 
human habitation that do not incorporate propulsion and navigation 
systems. Therefore, these items are controlled in 9A515.a. All launch 
platforms and launch vehicles remain subject to the ITAR.
    BIS recognizes that commercial spaceflight and specifically, sub-
orbital commercial space flight, is a significant emerging industry and 
that these activities are being regulated by the Federal Aviation 
Administration as commercial activities. However, the technology that 
is at the heart of the ability to put a commercial vehicle into space 
and return to earth is often the same technology that would allow the 
delivery of weapons of mass destruction and other activities that 
present significant national security concerns. At this time, BIS is 
unable to draw a line between the commercial applications of these 
capacities and the inherently military potential of launch and reentry 
that would warrant their controls on the CCL. Therefore, these systems 
will remain on the USML, regardless of their potential commercial 
applications. BIS recognizes that the continued control of spacecraft 
with commercial applications on the USML is a significant issue for 
industry and that more work is required to further refine the controls 
in this area. The U.S. Government has committed to continue to review 
the issue and, to the extent further revisions to the controls in this 
rule are warranted, BIS will make them in coordination with the 
Department of State.
    Comment #33: One commenter stated that Servicing Mission Extension 
Vehicles do not appear on the USML but are also not listed specifically 
in the Note to 9A515.a.
    Response to Comment #33: Servicing Mission Extension Vehicles, to 
the extent that they incorporate a

[[Page 27425]]

propulsion and guidance system, are listed on the revised USML Category 
XV at (a)(4) and thus are not ``subject to the EAR.'' Servicing Mission 
Extension Vehicles, and other ``spacecraft'' that provide space-based 
logistics, assembly or servicing of any spacecraft (e.g., refueling), 
which do not have integrated propulsion, beyond attitude control, are 
``subject to the EAR'' and controlled in 9A515, but are not immediately 
eligible for License Exception STA.
    Comment #34: Two commenters suggested adding the phrase 
``satellites not otherwise enumerated in USML Category XV'' to the note 
to 9A515.a, to make clear that any satellites not specifically listed 
under USML Category XV are covered under 9A515.a.
    Response to Comment #34: The suggested phrase is included in the 
control text of 9A515.a. Thus, BIS has determined that it is 
unnecessary to add it to the note as well.
    Comment #35: One commenter suggested adding the words ``or 
controlled by 9A004'' in 9A515.a after the phrase ``not enumerated in 
USML Category XV'' to clarify that the International Space Station 
(ISS) and other items controlled in 9A004 are not controlled in 9A515.
    Response to Comment #35: BIS accepts the change suggested by the 
commenter in principle and has added the words ``or described in 
9A004'' to the description of items controlled in 9A515.a. This 
excludes all items described in 9A004 from 9A515.a. As the ISS is not 
controlled in 9A515.a, the parts, components, accessories and 
attachments ``specially designed'' for the ISS are not controlled in 
9A515.x.
    Comment #36: One commenter suggested revising the MT paragraph in 
9A515 to read: ``MT applies to 9A515.d when also described in 
3A101.a.''
    Response to Comment #36: BIS does not adopt this suggestion because 
quoting the Missile Technology Control Regime (MTCR) text is more 
precise.
    Comment #37: One commenter suggested defining the term ``usable'' 
in the MT paragraphs for 3A001.a.1.a and 9A515 d. to reference a 
specific characteristic of to refer to a standard.
    Response to Comment #37: BIS acknowledges that the phrase ``when 
usable in missiles for protecting missiles against nuclear effects 
(e.g. Electromagnetic Pulse (EMP), X-rays, combined blast and thermal 
effects)'' can be difficult to apply in certain circumstances. However, 
this is the multilaterally agreed MTCR text, and BIS has determined 
that by providing a reference to a specific standard, the United States 
would be deviating from its regime commitments. If an exporter has 
particular issues warranting clarification, then it should submit an 
advisory opinion request under Sec.  748.3(c).

Comments Related to 9A515.d and 9A515.e

    Comment #38: Six commenters requested that items described in USML 
Category XV(d) be transitioned to 9A515 on the date of publication of 
this final rule.
    Response to Comment #38: BIS agrees on the need to accelerate 
implementation of the transition of the radiation-hardened 
microelectronic circuits from the USML to the CCL. Microelectronic 
circuit development has advanced to a stage where manufacturers are 
concerned that the next generation of purely commercial microelectronic 
circuits may meet or exceed the parameters listed in USML Category 
XV(d). It is necessary to quickly transition these items to the CCL to 
avoid requiring that these commercial manufacturers register with DDTC 
and obtain ITAR licenses for the development of these items. In the 
final rule revising Category XV, DDTC has provided that the effective 
date for the deletion of USML Category XV(d), microelectronic circuits 
controlled by XV(e), and directly related technical data and software 
controlled by XV(f), will be 45 days following the publication of the 
final rule, the minimum period permitted for a major regulatory action. 
Therefore, BIS has also provided that this rule will transition those 
items to 9A515.d, 9A515.e, 9D515.d, 9D515.e, 9E515.d, and 9E515.e, 
respectively, 45 days following the publication of the final rule, on 
June 27, 2014.
    Comment #39: One commenter asked BIS to clarify Notes 2 and 3 to 
9A515.d to state which microelectronic circuits are intended to be 
controlled under 3A001 as opposed to 9A515.x.
    Response to Comment #39: BIS has revised the controls on 
microelectronic circuits that fall below the threshold described in 
9A515.d. BIS has created a new paragraph .e that controls certain 
microelectronic circuits that are ``specially designed'' for defense 
articles controlled by USML Category XV or items controlled by 9A515 
and meet two technical parameters (1) a total dose >=1 x 10\5\ Rads 
(Si) (1 x 10\3\ Gy(Si)) and <5 x 10\5\ Rads (Si) (5 x 10\3\ Gy(Si)) and 
(2) a single event effect (SEE) (i.e., single event latchup (SEL), 
single event burnout (SEB), or single event gate rupture (SEGR)) 
immunity to a linear energy transfer (LET) >=80 MeV-cm\2\/mg. BIS has 
also excluded all microelectronic circuits from 9A515.x. Therefore, 
microelectronic circuits that meet the control criteria of either 
9A515.d or 9A515.e are the only microelectronic circuits controlled in 
9A515. All other microelectronic circuits subject to the EAR will be 
controlled based on their technical parameters in the appropriate ECCN 
or designated as EAR99 items.
    Comment #40: One commenter asked that BIS insert into Note 1 of 
9A515.d a statement adopting the longstanding definition of ``ASIC'' 
put forward by the JEDEC Solid State Technology Association--namely 
that an ASIC is ``an integrated circuit developed and produced for a 
specific application or functions and for a single customer.''
    Response to Comment #40: BIS accepts the commenter's suggestion to 
provide a definition of ASIC or application specific integrated 
circuits. In Note 1 to 9A515.d and .e, BIS has included the phrase 
``integrated circuits developed and produced for a specific application 
or function'' following the term ASIC to provide definition to the 
term. BIS does not accept the commenter's suggestion that the term ASIC 
be limited to items produced for a single customer. Such language could 
lead to unintended drops in controls. Additionally, this Note 1 to 
9A515.d and the new .e is a reference to the USML control in USML 
Category XI(c). Items are controlled on the USML if described therein, 
regardless of whether they are also within the scope of a particular 
ECCN. This note has no substantive effect on items that are controlled 
as ASICs on the USML. It is merely a cross reference inserted for the 
convenience of the exporter.
    Comment #41: One commenter noted that the fourth and fifth 
technical parameters contained within 9A515.d differ from the fourth 
and fifth technical parameters contained within the prior USML Category 
XV(d). The commenter asks why those changes have been made, and whether 
there is any need for them. The commenter suggests that the five 
technical parameters contained within USML Category XV(d) should be 
replicated exactly in 9A515.d.
    Response to Comment #41: The comment is correct that the words of 
the fourth and fifth technical parameters contained within 9A515.d are 
slightly different from those in prior USML Category XV(d). These 
controls have been updated and clarified, so BIS does not accept the 
request to revert to the previous controls. Anything that did not meet 
previous USML Category XV(d) controls will not be captured by the new 
9A515.d parameters.
    Comment #42: One commenter noted that some items currently listed 
under

[[Page 27426]]

other CCL ECCNs (e.g., 3A001) contain microelectronic circuits that 
have all of the specifications listed under 9A515.d. The commenter asks 
whether the microelectronic circuits meeting the described 
specifications that are currently controlled under other ECCNs will be 
moved into 9A515.d.
    Response to Comment #42: Microelectronic circuits are controlled in 
9A515.d when they meet or exceed the five technical parameters 
described in the subparagraph and are ``specially designed'' for a 
defense article, a 600 series item, or an item in 9A515. The criteria 
in 3A001.a are also controlled in 9A515.d. However, 9A515.d describes a 
higher level of technical parameters than 3A001.a. Therefore, if a 
microelectronic circuit meets or exceeds the same three criteria in 
9A515.d, but does not meet or exceed the remaining two 9A515.d 
criteria, then 3A001.a will apply. However, all items controlled in 
9A515.d were previously subject to the ITAR pursuant to USML Category 
XV(d). Therefore, nothing described in 9A515.d could have been properly 
classified as 3A001.a. Moving forward, under the Order of Review (see 
Sec.  774, Supplement No. 4), exporters must review the 9x515 ECCNs and 
``600 series'' prior to reviewing other ECCNs. Therefore, if an item is 
described in 9A515.d, or the new 9A515.e, it will be controlled in 
those paragraphs, even if it also meets the technical parameters in 
3A001 or any other ECCN.

Comments Related to 9A515.x

    Comment #43: One commenter requested that BIS not apply NS1 and RS1 
reasons for control to 9A515.x.
    Response to Comment #43: BIS does not accept the change suggested 
by the commenter. The items controlled in 9A515.x are ``specially 
designed'' for spacecraft and space applications, and thus raise 
national security and foreign policy concerns. Therefore, the U.S. 
Government will require visibility into the export of these items. 
Applying NS1 and RS1 reasons for control requires world-wide licensing, 
other than exports to Canada. Allowing the use of License Exception STA 
for most items to our 36 closest allies and partners provides 
significantly more record of the transactions than allowing No License 
Required (NLR) shipments.
    Comment #44: Two commenters stated that the 9A515.x control 
parameter should be ``specially designed.''
    Response to Comment #44: BIS accepts the change suggested by the 
commenter. BIS agrees that the use of the control parameter ``space-
qualified'' in 9A515.x was potentially confusing and has changed it to 
``specially designed.'' The structure of 9A515.x will now track the 
structure of all ``600 series'' entries, in that, with small 
exceptions, it will be a catch-all control for all parts, components, 
accessories, and attachments ``specially designed'' for items in 9A515 
or USML Category XV and not themselves controlled in USML Category XV. 
The exceptions pertain to (i) microelectronic circuits, (ii) star 
trackers in 7A004 and 7A104, and (iii) already existing multilateral 
controls on ``space-qualified'' items controlled elsewhere in the CCL.
    Comment #45: One commenter asked whether 9A515.x will capture all 
spacecraft ``parts,'' ``components,'' ``accessories,'' and 
``attachments'' not controlled under paragraph (e) of USML Category XV 
or listed under other specific ECCNs above, or will other ECCNs that 
currently control spacecraft components (e.g., 7A004 or 7A104) continue 
to do so. Specifically, the commenter requested clarification on which 
ECCN will control the solar concentrators, power conditioners and/or 
controllers, bearing and power transfer assemblies, deployment 
hardware/systems for solar arrays, ``space-qualified'' star trackers 
and ``space-qualified'' gyro-astro compasses currently controlled under 
Category XV(e). The commenter also stated that delineating which items 
are controlled by each of these ECCNs would help satellite component 
manufacturers understand which controls apply to their products.
    Response to Comment #45: BIS has clarified 9A515.x in this final 
rule so that the star trackers (except the star tracker specified in 
USML Category XV(e)) and gyro-astro compasses controlled in 7A004 and 
7A104 are not controlled in 9A515.x. All other ``parts,'' 
``components,'' ``accessories,'' or ``attachments'' that are specially 
designed for items in USML Category XV or 9A515 are controlled in 
9A515.x unless listed on the ITAR, identified in another paragraph of 
9A515, are a microelectronic circuit, or are controlled in one of the 
``space-qualified'' ECCNs that are specifically excluded. BIS is 
unaware of any items that will be controlled by 9A515.x that were not 
previously controlled under USML Category XV(e). If the commenter is 
aware of such items, then it should provide a comment to BIS during the 
interim period of this rule or submit a classification request pursuant 
to EAR section 748.3.
    Comment #46: One commenter asked BIS to confirm that space-related 
products that are currently designated with a specific ECCN or are 
designated EAR99, will not be moved to either the USML, 9x515, or a 
``600 series'' ECCN. The comment requested that BIS include a specific 
statement to that effect, or if not true, include a grandfathering 
clause for such items already in inventory.
    Response to Comment #46: Other than with respect to 9A004.b items 
that BIS is moving to 9A515, BIS is unaware of any items that will be 
controlled by 9A515 that were not previously controlled under USML 
Category XV. If the commenter is aware of such items, then it should 
provide a comment to BIS during the interim period of this rule or 
submit a classification request pursuant to EAR Sec.  748.3.
    Comment #47: Six commenters asked if, when a commercial-off-the-
shelf (COTS) or other EAR99 item is successfully tested for operation 
in space, it becomes space-qualified with repercussions for the 
manufacturer, even though the original part may have been EAR99 and has 
not been modified.
    Response to Comment #47: BIS believes that the other ECCNs that 
will continue to use ``space-qualified'' as the control parameter do 
not raise the same concerns for controlling otherwise EAR99 items on 
the basis of testing, as they are not catch-all controls. Additionally, 
this comment assumes that the qualification through testing of a single 
item will cause items other than the one tested to become space-
qualified. As the note indicates, qualification through successful 
testing only applies to the actual unit tested.
    Comment #48: One commenter stated that BIS should exclude building 
block electronic components that would qualify for exclusion from 
specially designed, even if they are individually tested or create a 
new ECCN for Space-Qualified Basic Building Block Electrical/Electronic 
Components with AT only controls.
    Response to Comment #48: As noted above, BIS has revised 9A515.x in 
this final rule to use ``specially designed'' instead of ``space-
qualified'' as the control parameter. To the extent that the item at 
issue is a microelectronic circuit, it will only be controlled in 9A515 
if it meets the .d or .e control parameters. All other electronic 
components will be controlled by .x, regardless of significance, if 
``specially designed'' for a 9A515 or USML Category XV item and not 
listed on the USML or one of the other ECCNs described in 9A515.x. The 
commenter should also review the procedures in EAR section 748.3(e) 
that allows one to petition BIS for removal of an item otherwise within 
the scope of 9A515.x and the re-designation of the item as a 9A515.y 
item.

[[Page 27427]]

    Comment #49: One commenter suggested deleting 6A002.e from the list 
of ``space-qualified'' ECCN carved out of 9A515.x.
    Response to Comment #49: BIS accepts the change suggested by the 
commenter. This paragraph was previously removed from the EAR.

Comments Related to the Application of ``Space-Qualified''

    Comment #50: One commenter stated that the note to the proposed EAR 
definition of ``space-qualified'' providing that the terms `designed' 
and `manufactured' in this definition are synonymous with ``specially 
designed'' is confusing. The purpose may have been to be sure that all 
``catch-all'' components being removed from USML Category XV are 
covered by 9A515, but 9A515.x use of ``space-qualified,'' rather than 
``specially designed,'' seems to make the Note unnecessary for this 
purpose.
    Response to Comment #50: Although the comments related to the use 
of ``space-qualified'' are no longer relevant to 9A515.x because the 
paragraph will not use ``space-qualified,'' they are nonetheless 
relevant to other uses of ``space-qualified'' in the EAR.
    The note to the definition of ``space-qualified'' that states that 
the terms `designed' and `manufactured' are synonymous with the 
definition of ``specially designed'' allows exporters to apply the 
newly defined term ``specially designed'' rather than force exporters 
to apply two new undefined terms `designed' and `manufactured.' This 
note prevents exporters from having to determine for themselves what, 
if any, difference exists between `designed' and `manufactured' and the 
term ``specially designed.''
    Comment #51: One commenter suggested to change ``or'' to ``and'' in 
the ``space-qualified'' definition. The modified definition would read: 
``. . . an article is ``space-qualified'' if it is designed, 
manufactured, and qualified through successful testing, for operation 
at altitudes greater than . . .'' Another commenter suggested revising 
the second note to state that ``specially designed'' is synonymous with 
the phrase ``designed, manufactured, or qualified through successful 
testing,'' which would have the same effect.
    Response to Comment #51: BIS does not accept these suggested 
changes for two reasons. First, this definition was agreed to as part 
of the 2012 amendments to the Wassenaar Arrangement on Export Controls 
for Conventional Arms and Dual-Use Goods and Technologies (Wassenaar 
Arrangement), and the internationally agreed on language is 
incorporated into the EAR. Second, such a change would significantly 
reduce the scope of the space-qualified definition and result in less 
sensitive items not being controlled. An item may become space-
qualified in two ways, if either (1) intentional steps were taken in 
the design and manufacture of the item to make it suitable for use in 
space, or (2) due to inconsistencies in the manufacturing process that 
cause variations in quality that result in only a subset of the 
production run to be suitable for use in space, individual items are 
qualified through testing.
    Comment #52: Two commenters stated that the use of ``or'' in 
``Designed, manufactured, or qualified through successful testing'' 
seems to contradict the second note, which intends to exclude parts and 
components which have not been ``specially designed.'' Conversely, the 
first note excludes items that are not individually tested. As 
radiation testing is destructive, industry practice is to test 
radiation tolerance on lot samples and not on the actual parts to be 
used on the spacecraft. The note would result in excluding from being 
``space-qualified,'' parts determined to be radiation tolerant as a 
result of being of the same lot as samples successfully tested as 
radiation tolerant.
    Response to Comment #52: BIS does not accept the changes suggested 
by the commenter. The existing definition in the EAR is identical to 
the definition that was adopted by the Wassenaar Arrangement. However, 
Commerce will keep in mind these comments when considering future 
modifications, if necessary, to the multilateral regime definition.
    Comment #53: Four commenters asked BIS to establish parameters for 
testing that qualifies an item as ``space-qualified.''
    Response to Comment #53: The concern raised by the commenters is 
largely resolved by the change in .x to apply ``specially designed'' 
instead of ``space-qualified'' as the control parameter and creation of 
new 9A515.d and .e. Clarification of the use of the new ``space-
qualified'' definition in the existing CCL entries should be resolved 
multilaterally as part of the WA process.
    Comment #54: One commenter suggested that ``space-qualified'' 
should incorporate both the catch and release of ``specially 
designed.''
    Response to Comment #54: The designed or manufactured prong of 
``space-qualified'' is synonymous with ``specially designed'' per the 
second note to the definition of ``space-qualified,'' and thus includes 
both the catch and release provisions of the definition of ``specially 
designed.'' The qualified through successful testing prong of ``space-
qualified'' operates independently of the designed or manufactured 
prong, and does not incorporate the ``specially designed'' release 
provisions.
    Comment #55: One commenter asked BIS to confirm that the ``space-
qualified'' criterion applies only to items that have been designed, 
manufactured or qualified through successful testing performed at U.S. 
premises or using U.S. technologies.
    Response to Comment #55: For such entries, the ``testing'' element 
is not limited to testing done in the United States or using U.S.-
origin technology. Other clarifications or revisions to ``space-
qualified'' will need to be part of the multilateral regime 
discussions.
    Comment #56: One commenter states that items should only be 
``space-qualified'' if certified by the manufacturer. The commenter 
suggested that BIS add the following note ``For purposes of this 
definition, ``qualified'' must be evidenced by an explicit rating or 
certification to operate at altitudes greater than 100 km above the 
Earth. Thus, any device certified by the manufacturer to be operative 
at altitudes greater than 100 km is ``qualified through successful 
testing,'' and any device not certified by the manufacturer to be 
operative at altitudes greater than 100 km is not ``qualified through 
successful testing,'' regardless of any testing performed by any party.
    Response to Comment #56: BIS does not accept the change suggested 
by the commenter. The purpose of qualification through testing in the 
``space qualified'' definition is to control those items identified 
through testing to meet the requirements necessary to perform in space. 
It is not relevant what entity conducts the testing.
    Comment #57: One commenter asked whether the note to the ``space-
qualified'' definition means that each component must be tested 
separately to be ``space-qualified.'' For example, if only one of four 
identical components is successfully tested and thus qualified, would 
the four identical components be then all ``space-qualified'' or will 
only the one successfully tested be ``space-qualified''?
    Response to Comment #57: For items qualified through testing, only 
items actually tested are ``space-qualified.'' If an item is ``space-
qualified'' as a result of design or manufacture, testing is not 
relevant.
    Comment #58: Two commenters asked whether the definition of 
``space-qualified'' allowed the ``exclusion'' for prior determination 
through a

[[Page 27428]]

commodity jurisdiction (CJ) determination or interagency-cleared 
commodity classification (CCATS) pursuant to Sec.  748.3(e) in 
paragraph (b)(1) of the ``specially designed'' definition. If not, the 
commenters stated that a part that has been previously determined to 
be, for instance, EAR99 through a Commodity Jurisdiction could see its 
classification become 9A915.x by virtue of meeting the criteria of 
``space-qualified,'' i.e. qualified through successful testing, for 
operations at altitudes greater than 100km above the surface of the 
Earth, even though the design, performances, and testing flow of this 
part are the same that had been previously reviewed by the U.S. 
Government during the CJ or CCATS process.
    Response to Comment #58: As noted in Response to Comment 
45, BIS has revised 9A515.x in this final rule to remove the 
``space-qualified'' control parameter, replacing it with ``specially 
designed.''
    Comment #59: Three commenters stated that testing should only apply 
to the item tested.
    Response to Comment #59: As stated in the first note to the 
``space-qualified'' definition, only the item tested is qualified 
through testing. However, if an item is ``space-qualified'' as a result 
of design or manufacture, testing is not relevant.
    Comment #60: Items are identified as ``space-qualified'' as a 
marker for high reliability and the level of control should not be 
increased to 9A515.x based on that criteria.
    Response to Comment #60: As noted in Response to Comment 
45, BIS has revised 9A515.x to remove the ``space-qualified'' 
control parameter, replacing it with ``specially designed.''
    Comment #61: One comment asked why the proposed rules only refer to 
categories 3, 6, and 9 in the ``space-qualified'' definition and what 
that means regarding the other categories of EAR.
    Response to Comment #61: The term ``space-qualified'' only appears 
in ECCNs in categories 3, 6 and 9 of the Commerce Control List and the 
convention for Wassenaar Arrangement defined terms is to identify the 
categories in which they are used, if not common throughout the control 
list. As ``space-qualified'' is no longer the control parameter in 
9A515.x, category 9 is removed from this list.
    Comment #62: One commenter requested that BIS clarify how 
``required'' applies to items with only a ``space qualified'' control 
parameter, particularly when qualified through testing.
    Response to Comment #62: BIS has revised 9A515.x in this final rule 
to remove the ``space-qualified'' control parameter, replacing it with 
``specially designed.'' Therefore, it is no longer necessary to 
determine how 9E515 controls apply to items that are controlled as 
``space-qualified'' by virtue of testing.

Comments Related to 9A515.y

    Comment #63: Two commenters suggested that BIS create a .y 
paragraph for items that only warrant AT control, including certain 
``space-qualified'' basic building block electronic components.
    Response to Comment #63: BIS accepts the suggestion to create a .y 
paragraph with an AT reason for control and prohibition on the export 
to China. Unlike the .y paragraphs in many of the ``600 series'' ECCNs, 
9A515.y will not initially be a list of items. Rather, the control 
parameter will be ``[i]tems described in 9A515.x that have been 
identified in an interagency-cleared commodity classification (CCATS) 
pursuant to Sec.  748.3(e).'' The reason for control on the .y 
paragraph, as with the other .y paragraphs in the ``600 series'' ECCNs, 
is Anti-Terrorism Column 1 (AT). Additionally, as with the other .y 
paragraphs, export to China is prohibited and Sec.  744.21(a)(2) is 
amended to add a prohibition of the export of all items described in 
9A515.y to China.
    At the time of publication, no items are designated within the .y 
control. BIS will accept requests to designate 9A515.x items under 
Sec.  784.3(e) as .y upon publication of this rule, but will not begin 
populating any .y controls until on or after the effective date of this 
rule.

Comments Related to 9B515

    Comment #64: One commenter requested that BIS clarify the 
classification of encryption simulators used to test COMSEC encryptors 
when installed on a foreign manufactured satellite.
    Response to Comment #64: Encryptors that are ``specially designed'' 
for spacecraft will be controlled in 9A515.x to the extent they are 
commodities or in 9D515 to the extent they are software. The simulators 
to test those items will not be controlled in a 9x515 ECCN. BIS has 
revised 9B515.a and .b so that the controls on test, inspection and 
production equipment controlled in 9B515.a and the equipment, cells and 
stands for testing, analysis and fault isolation in 9B515.b only apply 
to items ``specially designed'' for items in 9A515.a or USML Category 
XV paragraphs (a) or (e). Therefore, simulators for testing a part, 
component, accessory or attachment controlled in 9A515.x are not 
controlled in 9B515.
    Comment #65: One commenter has stated that it is unclear why the 
(10-4) Torr technical threshold has been included in 
9B515.c. In general, the development of more advanced satellite designs 
has led to increases in design life, a feature that requires more 
demanding testing standards and more advanced testing equipment to 
validate these designs. It is, therefore, plausible that commercially 
available environmental test chambers could approach this threshold due 
to natural competitive pressures and the general interest among both 
satellite manufacturers and their customers in developing more reliable 
spacecraft. Unless there is a specific reason for the inclusion of this 
threshold, the commenter recommends that this control be removed.
    Response to Comment #65: BIS accepts the changes suggested in this 
comment, in part. The control for the Torr technical threshold is 
currently in 1B018.b and it is deleted by this rule. The intent is to 
control chambers for ``spacecraft.'' The chambers will only be 
controlled in 9B515.c if ``specially designed'' for commodities 
enumerated in 9A515.a or USML Category XV(a).

Comments Related to 9D515

    Comment #66: One commenter requested the addition of a note to 
9D515 that clarifies the jurisdiction of software common to both USML 
and CCL satellites. The note should state that if software is not 
specially designed or modified for a satellite controlled under the 
USML, it is subject to the EAR and controlled under this ECCN.
    Response to Comment #66: BIS does not accept the changes suggested 
by the commenter. Software is ITAR controlled if it meets the 
definition of Sec.  120.10 of the ITAR (i.e., it is ``required'' for 
one of the functions listed in 120.10) and is also, per USML Category 
XV(f), ``directly related'' to a USML Category XV spacecraft or other 
defense article in USML XV. Software that is completely common to ITAR 
and EAR items would not meet this threshold. Thus, the requested note 
is not necessary.

Comments Related to 9E515

    Comment #67: Ten commenters requested that BIS apply controls on 
the technology for the three defined terms ``development,'' 
``production,'' and ``use'' and not apply control to technology on the 
six disjunctive elements of the defined term ``use,''

[[Page 27429]]

namely operation, installation, maintenance, repair, overhaul and 
refurbishing. Two of the commenters further noted that technical data 
and technical assistance required for any one of the disjunctive 
elements of use does not fit within the Part 772 definition of 
technology as a threshold matter due to the use of the defined terms 
``development,'' ``production'' and ``use.'' Additionally, one 
commenter noted that the expansion of technology controls to include 
operation, installation, maintenance, or repair activities in 
connection with 9x515 and ``600 series'' items is in contradiction to 
the approach DDTC appears to be taking in revising the ITAR definition 
of defense services and the potential revision of the definition of 
technical data.
    Response to Comment #67: BIS adopted controls on elements of the 
defined term ``use'' for the ``600 series'' technology ECCNs, and 
proposed such controls for 9E515 to maintain continuity of control over 
the technical data and defense services for the items transitioning to 
the CCL that was controlled on the ITAR. Controls on the technology 
required for each of the listed disjunctive elements in each technology 
ECCN are appropriate to retain the necessary level of control 
consistent with the national security interests of the United States. 
Specifically with regard to 9E515, this was also done to conform to the 
1248 Report and to identify for Congress where all items controlled in 
USML Category XV are controlled on the CCL.
    In response to these comments, BIS, in consultation with other 
departments and agencies of the U.S. Government, has reviewed the use 
of various combinations of the disjunctive elements, operation, 
installation, maintenance, repair, overhaul and refurbishing, and 
determined that for most 9E515 technology, export controls on the 
technology for the operation and maintenance of those items are not 
necessary. BIS has also determined that all technology controls on the 
ground stations described in 9A515.b are unnecessary. Therefore, BIS 
has revised 9E515.a to exclude technology for items controlled in 
9A515.b, 9A515.d, 9A515.e, and removed the words operation and 
maintenance. BIS also added a parenthetical following the word repair 
to make it clear that repair includes any on-orbit anomaly resolution 
and analysis when it goes beyond established procedures.
    Comment #68: Five commenters suggested that 9E515 be revised to 
clarify any potential overlap between 9E515.a and 9E515.b.
    Response to Comment #68: BIS has reviewed and revised 9E515 to 
clarify the difference between the technologies controlled in each 
paragraph, as described in Response to Comment 67.
    Comment #69: Several commenters asked BIS and DDTC to confirm that 
various types of telemetry--i.e., communications to and from satellites 
and other spacecraft, whether on the ground, in the air, or in space--
are not subject to the ITAR or the EAR, or, if so, to exclude them from 
the controls over satellite and spacecraft technology and technical 
data in USML Categories XV(f) and 9E515.
    Response to Comment #69: Based on a review of the comments and the 
types of information pertaining to satellites and spacecraft that 
warrant control, BIS and DDTC have determined to codify existing policy 
within the regulations that data transmitted to or from a satellite or 
spacecraft, whether real or simulated, should not be subject to the 
ITAR and should not fall within the scope of the EAR's definition of 
``technology,'' if it is limited to information about the health, 
operational status, or function of, or raw sensor output from, the 
spacecraft, spacecraft payload, or its associated subsystems or 
components. Such information is often referred to as housekeeping data. 
In addition, the act of processing such telemetry data--i.e., 
converting raw data into engineering units or readable products--or 
encrypting it does not, in and of itself, cause the telemetry data to 
become subject to the ITAR or to ECCN 9E515. To implement this 
determination, DDTC has added a note to USML Category XV(f) that such 
information is not subject to the ITAR, and BIS has added a note to 
9E515 that such information, to the extent it would be subject to the 
EAR, is not within the scope of information captured within the 
definition of ``technology'' in the EAR.
    These notes do not indicate that other types of technical data, as 
defined in ITAR Sec.  120.10, directly related to USML Category XV 
items and other types of technology, as defined in EAR Sec.  772.1, 
required for 9A515 items are no longer controlled. In addition, the 
notes to USML Category XV(f) and 9E515 do not change the ITAR-control 
status of classified information directly related to defense articles 
and defense services on the U.S. Munitions List and 600-series items 
subject to the EAR, as well as information covered by an invention 
secrecy order. ``Classified,'' for these purposes, means that which is 
classified pursuant to Executive Order 13526, predecessor or successor 
order, or to the corresponding classification rules of another 
government or international organization.
    Comment #70: One commenter suggested that BIS delete the quotation 
marks around the term ``technology'' in 9E515 because these alterations 
would create a different definition for the term than the one that 
currently exists in the EAR.
    Response to Comment #70: BIS does not accept the changes suggested 
by the commenter. BIS has denominated the technology that is 
appropriate for control given the national security concerns relevant 
to the various items controlled in the 9x515 ECCNs. BIS will be 
undertaking a larger project to review the technology definitions and 
controls in the EAR and to harmonize, where appropriate, the technology 
controls with those in the ITAR.
    Comment #71: One commenter requested that BIS address how the terms 
installation, maintenance, repair, overhaul or refurbishing will apply 
to technology for items controlled in 9A515.a, end-item spacecraft. For 
example, would data provided to satellite operators for post-launch 
operations (e.g., orbit-raising) meet this definition? The commenter 
noted that the terms installation, maintenance, repair, overhaul or 
refurbishing seem to apply only to the ground control systems 
controlled under 9A515.b. The commenter requested that BIS revise 9E515 
so that installation, maintenance, repair, overhaul or refurbishing 
technology are only controlled for ground control systems listed under 
9A515.b, ``equipment'' controlled by 9B515, and ``software'' controlled 
by 9D515.
    Response to Comment #71: As detailed in Response to Comment 
69, BIS has revised 9E515.a so that it now controls technology 
``required'' for the ``development,'' ``production,'' installation, 
repair (including on-orbit anomaly resolution and analysis beyond 
established procedures), overhaul or refurbishing of commodities 
controlled by 9A515 (except 9A515.d. or .e), 9B515, or ``software'' 
controlled by 9D515.a. 9E515.b now controls technology ``required'' for 
the ``development,'' ``production,'' e.g., failure analysis and anomaly 
resolution of software controlled by 9D515.b. One of the revisions to 
9E515.a also makes clear that the control of repair technology includes 
on-orbit anomaly resolution and analysis, beyond established 
procedures. However, standard post-launch operations (e.g., orbit-
raising), orbit maintenance and other movement of the spacecraft on-
orbit do not fall within the controlled technology. If an exporter has 
any

[[Page 27430]]

question whether certain specific information is technology for an item 
in 9A515.a, BIS recommends that the exporter submit a classification 
request to BIS and this will be a fact-based inquiry.
    Comment #72: One commenter suggested that export licensing 
requirements should only focus on the export of hardware, such as 
amateur radio satellite subsystems or complete amateur radio 
satellites, and not on technology related to that hardware.
    Response to Comment #72: BIS does not accept the change suggested 
by the commenter. Technology for commodities and software is often just 
as significant, and is sometimes even more significant, than the 
commodities derived from the technology. Teaching other countries how 
to design, develop or produce these items imparts the capacity to 
create the items domestically. Therefore, BIS continues to maintain 
controls on technology. However, BIS has reviewed 9E515 and, as 
discussed in Response to Comment 69, has excluded controls on 
operation and maintenance technology for most items and expanded the 
scope of technology eligible for License Exception STA.
    Comment #73: One commenter stated that this rule should do more to 
unburden university research and teaching regarding space technology.
    Response to Comment #73: BIS understands that compliance with 
export controls in the university context can be complex and 
appreciates all the efforts by colleges and universities to vigilantly 
maintain compliance with the EAR and the ITAR. Although export controls 
are required on the basis of national security concerns arising from 
the potential proliferation of these items, BIS notes that classroom 
instruction is often not subject to the EAR. See Sec.  734.9 of the 
EAR.
    Comment #74: Four commenters stated that BIS should not attach 
license conditions to technology transfer licenses that are similar to 
the current DDTC TAA provisos.
    Response to Comment #74: Licensing decisions and the license 
conditions attached to specific licenses are driven by the national 
security implications of the specific transaction under consideration. 
Specific license conditions are not set out in the regulations and, 
therefore, discussion of the appropriateness in any situation of any 
individual license condition is not germane to this regulatory 
revision.
    Comment #75: Three commenters requested that BIS exclude controls 
on operation technology, because it is already exempt from the ITAR 
under Sec.  125.4(b)(5).
    Response to Comment #75: BIS has revised 9E515.a so that it no 
longer includes controls on technology merely for operation.
    Comment #76: One commenter requested that, in the event that BIS 
decides that ``operation'' data should be controlled under 9E515.a, an 
exception for basic operations, maintenance, and training information 
similar to the one provided by Sec.  125.4(b)(5) of the ITAR should be 
added in a note to the paragraph.
    Response to Comment #76: BIS has revised 9E515 and .a no longer 
includes controls on technology for operation. However, when the EAR do 
control operation technology, License Exception TSU (Sec.  740.13) 
provides comparable authority for the export of operation and other 
basic technology with a legally exported item.
    Comment #77: One commenter suggested that there is an overlap 
between the controls on technology for production, which includes the 
integration stage, and technology for installation and asked if 
``installation'' in this ECCN has the same definition as in the 
definition of ``defense service'' proposed in the companion proposed 
DDTC rule.
    Response to Comment #77: BIS recognizes that there is some 
conceptual overlap between the integration stage controlled as 
production technology and installation technology. There is also 
conceptual overlap between various stages of development and production 
technology and certain technology involved in the repair, overhaul, or 
refurbishing or items. At this time, all controlled technology for 
9x515 items has the same level of control, so whether a particular 
piece of information is required for production or only for 
installation is academic. As noted above, BIS intends to engage in a 
review of technology controls and to coordinate with DDTC to harmonize 
technology controls between the EAR and the ITAR.
    Comment #78: Three commenters suggested that development and 
production technology should be in 9E515.a.
    Response to Comment #78: BIS accepts the change suggested by the 
commenters, except for development and production technology for 
radiation-hardened microelectronic circuits controlled in 9A515.d or 
9A515.e. Due to the sensitive nature of radiation hardening technology, 
it was necessary to continue to exclude all technology related to the 
radiation hardened and radiation tolerant microelectronic circuits in 
9A515.d and .e from STA eligibility, including the technology for the 
development or production of these items.
    Comment #79: Three commenters requested that controls on technology 
for the design verification, quality control and manufacturability be 
moved to 9E515.a, and not be subject to licensing in the same way as 
production and development technology.
    Response to Comment #79: BIS has revised 9E515 to no longer use the 
terms design verification, quality control and manufacturability. These 
were undefined terms which may have caused confusion and which became 
unnecessary once 9E515 was revised.
    Comment #80: Two commenters suggested that BIS develop a definition 
for manufacturability to distinguish it from development and production 
technology, exclude it from the controls on development and production 
technology in 9A515.a, and retain the control in 9E515.b.
    Response to Comment #80: BIS has revised 9E515 so that it no longer 
uses the term ``manufacturability'' to avoid any confusion.
    Comment #81: Two commenters suggested that BIS clarify its 
definition of ``build-to-print'' technology and some of the elements in 
Proposed 9E515.b, with which it appears to conflict.
    Response to Comment #81: BIS has revised 9E515 so that it no longer 
uses the term build-to-print to enhance clarity and avoid any 
confusion.
    Comment #82: One commenter suggested that BIS create a 9E515.y 
paragraph to control low-level technology.
    Response to Comment #82: As discussed above in response to comment 
63, BIS did accept a comment to create a 9A515.y paragraph for 
items that are ``specially designed'' for items in 9A515 or USML 
Category XV that the U.S. Government determines do not warrant control 
in 9A515.x. As also discussed above, BIS will continue to review 
technology controlled by 9E515 to determine whether lower levels of 
controls on some types of space-related technologies are warranted.
    Comment #83: Five commenters expressed support for keeping the 
passenger and participant spaceflight experience EAR99.
    Response to Comment #83: BIS agrees that export controls on the 
passenger and participant spaceflight experience are not necessary and 
has revised the note to 9E515, now Note 2 to 9E515, to clarify the 
scope of the technology related to the passenger and participant

[[Page 27431]]

spaceflight experience, which is not subject to the ITAR or the EAR.

Comments Related to the International Space Station (ISS)

    Comment #84: One commenter suggested that BIS delete the Related 
Control Note 6 in 9A004 and move ISS technology from the USML to 9E001 
and 9E002.
    Response to Comment #84: BIS accepts the change suggested by the 
commenter and revises all of the Related Control Notes to 9A004 and the 
text of the List of Items Controlled paragraph. The USML has been 
revised to exclude the ISS and all specially designed parts and 
components therefor. See USML Category XV, note to paragraph (a)(12). 
Therefore, the ISS will remain controlled in 9A004.a and the parts, 
components, accessories and attachments ``specially designed'' for the 
ISS will be controlled in a new 9A004.x. The result of this exclusion 
on the ITAR is also to remove the technology directly related to the 
ISS and its specially designed parts and components from the USML to 
the CCL. The technology controls for 9A004 are 9E001 for development 
technology and 9E002 for production technology.
    Comment #85: One commenter suggested that BIS revise 9A004 Related 
Controls (4) by deleting ``and related articles'' and ``and 9B515.''
    Response to Comment #85: As discussed above in the response to 
comment 84, BIS has revised all of the Related Control 
paragraphs in 9A004, and this comment is no longer relevant.

Comments Related to Other ECCNs

    Comment #86: One commenter asked if BIS intends to remove the 
related controls 3 and 4 from 3A001.
    Response to Comment #86: BIS did not propose any changes to related 
controls 3 and 4 in 3A001 and does not make any changes in this rule.
    Comment #87: One commenter suggested that BIS edit several ECCNs 
paragraphs in 3A001, 3A002, 3A101, 3D001, 3D101, 3E001, 5A001, 6A002, 
7A004, 7A104, 9A004 and 9A116 to identify potential overlaps with the 
USML or 9A515 and remove references to the USML or 9A515 from the 
related control paragraphs in those ECCNs.
    Response to Comment #87: BIS does not accept the changes suggested 
by the commenter. BIS uses the convention of identifying related 
controls, including potentially overlapping controls, in the related 
controls paragraph and not in each ECCN paragraph. The order of review 
directs parties classifying an item to review USML before reviewing the 
CCL and to review the 9x515 ECCNs before reviewing any other ECCNs. 
Therefore, when the USML describes an item, it is controlled on the 
USML, and when 9A515 describes an item, it is controlled in 9A515, even 
if also described in another ECCN.
    Comment #88: One commenter suggested that BIS revise the MT reason 
for control paragraph in 3A001 and 9A515.
    Response to Comment #88: BIS does not accept the change suggested 
by the commenter. Quoting the MTCR text is more precise.
    Comment #89: One commenter suggested that BIS revise the List of 
Items Controlled paragraph in 3A001 and the heading to 3D101.
    Response to Comment #89: BIS does not accept the change suggested 
by the commenter because it is outside the scope of the May 24 
(spacecraft) rule.
    Comment #90: One commenter suggested that BIS revised 6A002 by 
deleting Related Control paragraph (1).
    Response to Comment #90: BIS does not accept the change suggested 
by the commenter. In addition to controls in USML Category XV on 
certain ``space-qualified'' optics, many of the image intensifiers and 
focal plane arrays described in Related Control paragraph (1) are 
controlled in USML Category XII and will be addressed when that 
paragraph is revised. Additionally, items that are ``specially 
designed'' for military use will be controlled on the USML or in the 
``600 series'' in most circumstances.
    Comment #91: One commenter suggested that BIS delete Related 
Controls (2) in 6A004.
    Response to Comment #91: BIS acknowledges the commenter's support 
for this proposed revision, which appeared in the May 24 (spacecraft) 
rule, and has implemented the change in this final rule.
    Comment #92: One commenter suggested that BIS revise 7A005 by 
deleting the License Requirements reference that these items are 
subject to DDTC export licensing authority, and revising the related 
controls paragraph.
    Response to Comment #92: BIS does not accept the suggested change 
by the commenter because it is outside the scope of the May 24 
(spacecraft) rule. Major revisions to the controls on GPS will be 
addressed in the revisions of USML Category XII and the companion EAR 
``600 series'' ECCNs. Additionally, this ECCN is currently subject to 
the ITAR and is licensed for export by DDTC.
    Comment #93: One commenter suggested that BIS revise 7A105 to read: 
``Receiving equipment for Global Navigation Satellite Systems (GNSS) 
(e.g., GPS, GLONASS or Galileo), designed or modified for airborne 
applications and capable of providing navigation information at speeds 
in excess of 600 m/s (1,165 nautical miles/hour). MT applies to entire 
entry. MT Column 1. Related Controls: See also USML Category XV(c) and 
7A005.'' (To conform with MTCR 11.A.3.b.1).
    Response to Comment #93: BIS accepts the changes suggested by the 
commenter. Although revisions to USML controls on GPS items will be 
addressed in revisions of USML Category XII, the revised USML Category 
XV has removed paragraph XV(c)(2). The GPS described in that paragraph 
therefore moves to the CCL. Because 7A105 describes the MTCR control on 
that type of GPS and GPS is not specifically related to spacecraft, it 
will be controlled in 7A105 and not within 9A515. The text of 7A105 is 
revised to match the current MTCR text, as accurately described in the 
comment and to add control for ``specially designed'' parts and 
components as well. The reasons for control will be Missile Technology 
(MT) and Anti-Terrorism (AT) and a license will be required for all 
destinations other than Canada.

Export Administration Act

    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 amended by Executive Order 13637 of March 
8, 2013, 78 FR 16129 (March 13, 2013) and as extended by the Notice of 
August 8, 2013, 78, 2013, 78 FR 49107 (August 12, 2013), has continued 
the Export Administration Regulations in effect under the International 
Emergency Economic Powers Act. BIS continues to carry out the 
provisions of the Export Administration Act, as appropriate and to the 
extent permitted by law, pursuant to Executive Order 13222 as amended 
by Executive Order 13637.

Rulemaking 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). 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

[[Page 27432]]

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 rule affects 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).
    BIS believes that the effect of adding items to the EAR that would 
be removed from the ITAR as a result of this rule as part of the 
administration's Export Control Reform Initiative would increase the 
number of license applications to be submitted to BIS by approximately 
1,500 annually, resulting in an increase in burden hours of 425 (1,500 
transactions at 17 minutes each) under control number 0694-0088.
    Most ``spacecraft'' and ground control systems, ``space-qualified'' 
``parts,'' ``components,'' ``accessories'' and ``attachments,'' and 
related ``software'' and ``technology'' formerly on the USML would 
become eligible for License Exception STA under this rule. BIS believes 
that the increased use of License Exception STA resulting from the 
effect of adding items to the EAR that would be removed from the ITAR 
as a result of this rule as part of the Administration's Export Control 
Reform Initiative would increase the burden associated with control 
number 0694-0137 by about 2,258 hours (1,935 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. The largest impact of the 
rule would likely apply to exporters of parts, components, accessories, 
and attachments specifically designed or modified for satellite and 
other ``spacecraft'' items that would have been approved for export 
under the ITAR pursuant to a license for export to NATO allies and 
regime partners. Because, with few exceptions, the ITAR allows 
exemptions from license requirements only for certain exports to 
Canada, most exports of such parts, even when destined to NATO and 
other allied countries, require specific State Department 
authorization. Under the EAR, as included in this rule, such ``parts'' 
and ``components'' would become eligible for export to countries that 
are NATO and other multi-regime 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 an 
acknowledgement and commitment to comply with the EAR. However, the 
Administration understands that complying with the burdens of STA is 
likely less burdensome than applying for licenses or other approval 
from the State Department. 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 reliable customers in countries 
that are close allies or members of export control regimes or both.
    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 9E515 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 Regulation, 
Department of Commerce, submitted a memorandum to the Chief Counsel for 
Advocacy, Small Business Administration, certifying that this rule will 
not have a significant impact on a substantial number of small 
entities. A summary of the factual basis for this certification 
follows.
    5. To the extent that any changes to the EAR made by this 
rulemaking are outside the scope of the logical outgrowth of the 
changes proposed in the May 24 (spacecraft) rule and the public 
comments received on that rule, the provisions of the Administrative 
Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking 
and the opportunity for public comment are waived for good cause as it 
is contrary to the public interest. (5 U.S.C. 553(b)(B)). BIS 
implements the new provisions in section paragraph (y) in Supplement 
No. 2 to Part 748 in this rule to protect U.S. national security or 
foreign policy interests by preventing the unauthorized export of 
satellites and unauthorized release of technology related to satellites 
and launch vehicles. Executive Order 13222 as amended by Executive 
Order 13637, promulgated, in part, pursuant to Sec.  203 of the 
International Emergency Economic Powers Act (50 U.S.C. 1702), declares 
the unrestricted access of foreign parties to U.S. goods and technology 
to constitute an unusual and extraordinary threat to the national 
security, foreign policy, and economy of the United States and declares 
a national emergency with respect to that threat BIS continues to carry 
out the provisions of the Export Administration Act pursuant to this 
emergency authority. Additionally, the Congress of the United States 
has declared that it is in the national security interests of the 
United States that satellites be subject to the same export controls 
that apply to munitions. (Section 1511(5) of the 1999 NDAA). Further, 
Congress has conditioned the removal of satellites from the USML on a 
determination that the removal of such satellites is in the national 
security interests of the United States. (Section 1261(b)(1) of the 
2013 NDAA). The provisions in paragraph (y) in Supplement No. 2 to Part 
748 are implemented to prevent the export of technology related to 
satellite launches by unauthorized persons. Without this provision, BIS 
would lack sufficient information to ensure that the exporter has 
complied with the statutory requirements for the foreign launch of 
U.S.-origin satellites and related technology that could be released in 
a manner that is inconsistent with the U.S. national interest. If BIS 
cannot

[[Page 27433]]

confirm that the required approvals from DOD and NSA and that the 
appropriate monitoring has been arranged, BIS will not be able to 
ensure that U.S. national security concerns are appropriately addressed 
in relation to the export. For this reason, BIS finds good cause to 
waive prior notice and opportunity for public comment.

Number of Small Entities

    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 rule is part of the Administration's Export Control Reform 
Initiative. Under that initiative, the USML (22 CFR part 121) 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 CCL. ``Spacecraft'' and related items so 
designated will be identified in specific ECCNs known as the 9x515 
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.
    Many ``spacecraft'' and specific parts and components would remain 
on the USML. However, ``parts,'' ``components,'' ``accessories,'' and 
``attachments'' for such ``equipment'' would be included on the CCL 
unless expressly enumerated on the USML. Such ``parts'' and 
``components'' are more likely to be produced by small businesses than 
complete ``spacecraft,'' which would in many cases become subject to 
the EAR. Moreover, officials at 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 
reviewed by that department. The changes in this rule will not result 
in the decontrol of such items, but will reduce administrative and 
collateral regulatory burdens by, for example, allowing for the use of 
License Exception STA for exports to NATO and other multi-regime allied 
countries.
    Thus, changing the jurisdictional status of certain Category XV 
articles would reduce the burden on small entities (and other entities 
as well) through: Elimination of some license requirements, greater 
availability of license exceptions, simplification of license 
application procedures, and reduction (or elimination) of 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.
    Exporters and reexporters of the Category XV articles, particularly 
``parts'' and ``components,'' that would be placed on the CCL by this 
rule would need fewer licenses because their transactions 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). License Exceptions under the EAR would allow 
suppliers to send routine parts and low level parts to NATO and other 
export control regime partner countries 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 
than under the USML. When a USML Category XV article moves 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 than 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 four 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, who are 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 $2,250 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 costs or application processing fees for 
applications to export items listed on the CCL. Once the Category XV 
articles that are the subject of this rulemaking are added to the CCL 
and removed from the USML, 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, and 
it would no longer incur that expense.
    De minimis treatment under the EAR would also become available for 
all items that this rule would transfer from

[[Page 27434]]

the USML to the CCL, except for items destined to embargoed 
destinations in Country Group D:5. 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 exceeds 25 percent for most 
destinations. 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.

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 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 Regulation 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.
    BIS did not receive any comments regarding the economic impacts of 
this rule. As a result, a final regulatory flexibility analysis was not 
required and one was not prepared.

List of Subjects

15 CFR Parts 732, 734, 740, 744, 748 and 758

    Administrative practice and procedure, Exports, Reporting and 
recordkeeping requirements.

15 CFR Parts 736 and 772

    Exports.

15 CFR Parts 742 and 774

    Exports, Reporting and recordkeeping requirements.

    Accordingly, the Export Administration Regulations (15 CFR Parts 
730-774) are amended as follows:

PART 732--[AMENDED]

0
1. The authority citation for 15 CFR part 732 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
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 8, 2013, 78 FR 
49107 (August 12, 2013).


0
2. Supplement No. 3 to part 732 is amended by revising paragraphs 
(b)13. and (b)14. to read as follows:

SUPPLEMENT NO. 3 TO PART 732--BIS'S ``KNOW YOUR CUSTOMER'' GUIDANCE AND 
RED FLAGS

* * * * *
    (b) * * *
    13. You receive an order for ``parts'' or ``components'' for an 
end item in 9x515 or the ``600 series.'' The requested ``parts'' or 
``components'' may be eligible for License Exception STA, another 
authorization, or may not require a destination-based license 
requirement for the country in question. However, the requested 
``parts'' or ``components'' would be sufficient to service one 
hundred of the 9x515 or ``600 series'' end items, but you ``know'' 
the country does not have those types of end items or only has two 
of those end items.
    14. The customer indicates or the facts pertaining to the 
proposed export suggest that a 9x515 or ``600 series'' item may be 
reexported to a destination listed in Country Group D:5 (see 
Supplement No. 1 to part 740 of the EAR).

PART 734--[AMENDED]

0
3. The authority citation for 15 CFR part 734 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13020, 61 
FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 61 FR 58767, 3 CFR, 
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783; E.O. 13637 of March 8, 2013, 78 FR 16129 (March 13, 2013); 
Notice of August 8, 2013, 78 FR 49107 (August 12, 2013); Notice of 
November 7, 2013, 78 FR 67289 (November 12, 2013).


0
4. Section 734.4 is amended by revising paragraph (a)(6) to read as 
follows:


Sec.  734.4  De minimis U.S. content.

    (a) * * *
    (6) ``600 series.''
    (i) There is no de minimis level for foreign-made items that 
incorporate U.S.-origin 9x515 or ``600 series'' items enumerated or 
otherwise described in paragraphs .a through .x of a 9x515 or ``600 
series'' ECCN when destined for a country listed in Country Group 
D:5 of Supplement No. 1 to part 740 of the EAR.
    (ii) There is no de minimis level for foreign-made items that 
incorporate U.S.-origin 9x515 or ``600 series'' .y items when 
destined for a country listed in Country Group E:1 of Supplement No. 
1 to part 740 of the EAR or for the People's Republic of China 
(PRC).
* * * * *

PART 736--[AMENDED]

0
5. The authority citation for 15 CFR part 736 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
22 U.S.C. 2151 note; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 
950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 
61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 
CFR, 2001 Comp., p. 783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., 
p. 168; Notice of May 7, 2013, 78 FR 27301 (May 9, 2013); Notice of 
August 8, 2013, 78 FR 49107 (August 12, 2013); Notice of November 7, 
2013, 78 FR 67289 (November 12, 2013).


0
6. Section 736.2 is amended by revising paragraphs (b)(3)(iii) through 
(v) to read as follows:


Sec.  736.2  General prohibitions and determination of applicability.

* * * * *
    (b) * * *
    (3) * * *
    (iii) Additional country scope of prohibition for 9x515 or ``600 
series'' items. You may not, except as provided in paragraphs (b)(3)(v) 
or (vi) of this section, reexport or export from abroad without a 
license any ``600 series'' item subject to the scope of this General 
Prohibition Three to a destination in Country Groups D:1, D:3, D:4, D:5 
or E:1 (see Supplement No. 1 to part 740 of the EAR). You may not, 
except as provided in paragraphs (b)(3)(v) or (vi) of this section, 
reexport or export from abroad without a license any 9x515 item subject 
to the scope of this General Prohibition Three to a destination in 
Country Groups D:5 or E:1 (see Supplement No. 1 to part 740 of the 
EAR).
    (iv) Product scope of 9x515 and ``600 series'' items subject to 
this prohibition. This General Prohibition Three applies if a 9x515 or 
``600 series'' item meets either of the following conditions:
    (A) Conditions defining direct product of ``technology'' or 
``software'' for 9x515 and ``600 series'' items. Foreign-made 9x515 and 
``600 series'' items are subject to this General Prohibition Three if 
the foreign-made items meet both of the following conditions:
    (1) They are the direct product of ``technology'' or ``software'' 
that is in the 9x515 or ``600 series'' as designated on the applicable 
ECCN of the

[[Page 27435]]

Commerce Control List in Supplement No. 1 to part 774 of the EAR; and
    (2) They are in the 9x515 or ``600 series'' as designated on the 
applicable ECCN of the Commerce Control List in part 774 of the EAR.
    (B) Conditions defining direct product of a plant for 9x515 and 
``600 series'' items. Foreign-made 9x515 and ``600 series'' items are 
also subject to this General Prohibition Three if they are the direct 
product of a complete plant or any major component of a plant if both 
of the following conditions are met:
    (1) Such plant or major component is the direct product of 9x515 or 
``600 series'' ``technology'' as designated on the applicable ECCN of 
the Commerce Control List in part 774 of the EAR, and
    (2) Such foreign-made direct products of the plant or major 
component are in the 9x515 or ``600 series'' as designated on the 
applicable ECCN of the Commerce Control List in part 774 of the EAR.
    (v) 9x515 and ``600 series'' foreign-produced direct products of 
U.S. ``technology'' or ``software'' subject to this General Prohibition 
Three do not require a license for reexport or export from abroad to 
the new destination unless the same item, if exported from the U.S. to 
the new destination would have been prohibited or made subject to a 
license requirement by part 742, 744, 746, or 764 of the EAR.
* * * * *

PART 740--[AMENDED]

0
7. The authority citation for 15 CFR part 740 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
22 U.S.C. 7201 et seq.; 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 8, 2013, 78 FR 49107 (August 12, 2013).


0
8. Section 740.2 is amended by revising paragraph (a)(5)(i), removing 
and reserving paragraph (a)(7), revising paragraphs (a)(12) 
introductory text and (a)(12)(i), and adding paragraph (a)(18), 
effective July 1, 2014, to read as follows:


Sec.  740.2  Restrictions on all license exceptions.

    (a) * * *
    (5) * * *
    (i) The item is controlled for missile technology (MT) reasons, 
except that the items described in ECCNs 6A008, 7A001, 7A002, 7A004, 
7A101, 7A102, 7A103, 7A104, 7A105, 7B001, 7D001, 7D002, 7D003, 7D101, 
7D102, 7E003, 7E101 or 9A515, may be exported as part of a spacecraft, 
manned aircraft, land vehicle or marine vehicle or in quantities 
appropriate for replacement parts for such applications under Sec.  
740.9(a)(4) (License Exception TMP for kits consisting of replacement 
parts), Sec.  740.10 (License Exception RPL), Sec.  740.13 (License 
Exception TSU), or Sec.  740.15(b) (License Exception AVS for equipment 
and spare parts for permanent use on a vessel or aircraft).
* * * * *
    (7) [RESERVED]
* * * * *
    (12) The item is described in a 9x515 or ``600 series'' ECCN and is 
destined to, shipped from, or was manufactured in a destination listed 
in Country Group D:5 (see Supplement No. 1 to part 740 of the EAR), 
except that:
    (i) 9x515 or ``600 series'' items destined to, or in, Country Group 
D:5 are eligible for License Exception GOV (Sec.  740.11(b)(2) of the 
EAR); and
* * * * *
    (18) 9x515 items that are controlled for missile technology (MT) 
reasons may not be exported, reexported, or transferred (in-country) 
under License Exception STA (Sec.  740.20 of the EAR).
* * * * *

0
9. Section 740.9 is amended by revising the last sentence of paragraph 
(a) introductory text to read as follows:


Sec.  740.9  Temporary imports, exports, reexports, and transfers (in-
country) (TMP).

    (a) * * * The references to various countries and country groups 
in these TMP-specific provisions do not limit or amend the 
prohibitions in Sec.  740.2 of the EAR on the use of license 
exceptions generally, such as for exports of 9x515 or ``600 series'' 
items to destinations in Country Group D:5.
* * * * *

0
10. Section 740.10 is amended by revising paragraphs (a)(3)(viii), 
(a)(4)(ii), (b)(1), and (b)(3)(i)(F) to read as follows:


Sec.  740.10  License Exception Servicing and replacement of parts and 
equipment (RPL).

* * * * *
    (a) * * *
    (3) * * *
    (viii) ``Parts,'' ``components,'' ``accessories,'' and 
``attachments'' classified in 9x515 or ``600 series'' ECCNs may not 
be exported or reexported to a destination listed in Country Group 
D:5 (see Supplement No. 1 to this part).
    (4) * * *
    (ii) The conditions described in paragraph (a)(3) relating to 
replacement of ``parts,'' ``components,'' ``accessories,'' or 
``attachments'' (excluding 9x515 and ``600 series'' ECCNs) do not 
apply to reexports to a foreign country of ``parts,'' 
``components,'' ``accessories,'' or ``attachments'' as replacements 
in foreign-origin products, if at the time the replacements are 
furnished, the foreign-origin product is eligible for export to such 
country under any of the License Exceptions in this part or the 
foreign-origin product is not subject to the EAR pursuant to Sec.  
734.4.
* * * * *
    (b) * * *
    (1) Scope. The provisions of this paragraph (b) authorize the 
export and reexport to any destination, except for 9x515 or ``600 
series'' items to destinations identified in Country Group D:5 (see 
Supplement No. 1 to this part) or otherwise prohibited under the 
EAR, of commodities and software that were returned to the United 
States for servicing and the replacement of defective or 
unacceptable U.S.-origin commodities and software.
* * * * *
    (3) * * *
    (i) * * *
    (F) Commodities or ``software'' ``subject to the EAR'' and 
classified in 9x515 or ``600 Series'' ECCNs may not be exported or 
reexported to a destination identified in Country Group D:5 (see 
Supplement No. 1 to this part).
* * * * *

0
11. Section 740.15 is amended by revising the heading and the 
introductory text, and adding paragraph (e), to read as follows:


Sec.  740.15  Aircraft, vessels and spacecraft (AVS).

    This License Exception authorizes departure from the United 
States of foreign registry civil aircraft on temporary sojourn in 
the United States and of U.S. civil aircraft for temporary sojourn 
abroad; the export of equipment and spare parts for permanent use on 
a vessel or aircraft; exports to vessels or planes of U.S. or 
Canadian registry and U.S. or Canadian Airlines' installations or 
agents; and the export of spacecraft and components for fundamental 
research. Generally, no License Exception symbol is necessary for 
export clearance purposes; however, when necessary, the symbol 
``AVS'' may be used.
* * * * *
    (e) Spacecraft for launch. This paragraph (e) authorizes the 
export by accredited U.S. institutions of higher learning of 
commodities subject to the EAR fabricated only for fundamental 
research purposes when all of the following conditions are met:
    (1) The export is to an accredited institution of higher 
learning, a governmental research center, or an established 
government funded private research center located in a country other 
than Country Group D:5 (see Supp. No. 1 to this part) and involves 
exclusively nationals of such countries;
    (2) All the information about the commodity, including its 
design, and all of the resulting information obtained through 
fundamental research involving the commodity will be published and 
shared broadly within the scientific community, and is not 
restricted for proprietary reasons or specific U.S. government 
access and dissemination controls or other restrictions accepted by 
the institution or its researchers on publication of scientific and 
technical information resulting from the project or activity (see 
Sec.  734.11 of the EAR); and
    (3) If the commodity is for permanent export, the platform or 
system into which the

[[Page 27436]]

commodity will be incorporated must be a scientific, research, or 
experimental satellite and must be exclusively concerned with 
fundamental research and may only be launched into space from 
countries and by nationals of countries not identified in Country 
Group D:5.
* * * * *

0
12. Section 740.20 is amended by adding a new sentence to the end of 
paragraph (d)(2) introductory text and revising the heading of 
paragraph (g) and paragraph (g)(1) to read as follows:


Sec.  740.20  License Exception Strategic Trade Authorization (STA).

* * * * *
    (d) * * *
    (2) * * * Paragraph (vii) is also required for transactions 
including 9x515 items.
* * * * *
    (g) License Exception STA eligibility requests for 9x515 and 
``600 series'' end items. (1) Applicability. Any person may request 
License Exception STA eligibility for end items described in ECCN 
0A606.a, ECCN 8A609.a, ECCN 8A620.a or .b, or ECCN 9A610.a or 
spacecraft described in 9A515.a that provide space-based logistics, 
assembly or servicing of any spacecraft (e.g., refueling).

PART 742--[AMENDED]

0
13. The authority citation for 15 CFR part 742 continues 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 8, 2013, 78 FR 49107 (August 12, 2013); Notice of 
November 7, 2013, 78 FR 67289 (November 12, 2013).


0
14. Section 742.4 is amended by revising paragraph (b)(1)(ii) and 
adding a new paragraph (b)(1)(iii), to read as follows:


Sec.  742.4  National security.

* * * * *
    (b) * * *
    (1) * * *
    (ii) When destined to a country listed in Country Group D:5 in 
Supplement No. 1 to Part 740 of the EAR, however, items classified 
under 9x515 or ``600 series'' ECCNs will be reviewed consistent with 
United States arms embargo policies in Sec.  126.1 of the ITAR.
    (iii) When destined to the People's Republic of China or a 
country listed in Country Group E:1 in Supplement No. 1 to Part 740 
of the EAR, items classified under any 9x515 ECCN will be subject to 
a policy of denial.
* * * * *

0
15. Section 742.6 is amended by revising the first and fourth sentence 
and adding a new sentence to the end of paragraph (b)(1) to read as 
follows:


Sec.  742.6  Regional stability.

* * * * *
    (b) Licensing policy. (1) Applications for exports and reexports 
of 9x515 and ``600 series'' items will be reviewed on a case-by-case 
basis to determine whether the transaction is contrary to the 
national security or foreign policy interests of the United States. 
* * * Applications for export or reexport of items classified under 
any 9x515 or ``600 series'' ECCN requiring a license in accordance 
with paragraph (a)(1) of this section will also be reviewed 
consistent with United States arms embargo policies in Sec.  126.1 
of the ITAR if destined to a country set forth in Country Group D:5 
in Supplement No. 1 to part 740 of the EAR. * * * When destined to 
the People's Republic of China or a country listed in Country Group 
E:1 in Supplement No. 1 to Part 740 of the EAR, items classified 
under any 9x515 ECCN will be subject to a policy of denial.
* * * * *

PART 744--[AMENDED]

0
16. The authority citation for 15 CFR part 744 continues 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; 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. 12947, 60 FR 5079, 3 CFR, 
1995 Comp., p. 356; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 
228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 
66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 
CFR, 2001 Comp., p. 786; Notice of January 17, 2013, 78 FR 4303 
(January 22, 2013) Notice of August 8, 2013, 78 FR 49107 (August 12, 
2013); Notice of September 18, 2013, 78 FR 58151 (September 20, 
2013); Notice of November 7, 2013, 78 FR 67289 (November 12, 2013).


0
17. Section 744.21 is amended by revising paragraph (a)(2) to read as 
follows:


Sec.  744.21  Restrictions on certain military end-uses in the People's 
Republic of China (PRC).

    (a) * * *
    (2) General prohibition. In addition to the license requirements 
for 9x515 and ``600 series'' items specified on the Commerce Control 
List (CCL), you may not export, reexport, or transfer (in-country) 
any 9x515 or ``600 series'' item, including items described in a .y 
paragraph of a 9x515 or ``600 series'' ECCN, to the PRC without a 
license.
* * * * *

PART 748--[AMENDED]

0
18. The authority citation for 15 CFR part 748 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
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 8, 2013, 78 FR 
49107 (August 12, 2013).


0
19. Section 748.8 is amended by revising paragraph (x) and adding 
paragraph (y) to read as follows:


Sec.  748.8  Unique application and submission requirements.

* * * * *
    (x) License application for a transaction involving a 9x515 and 
``600 series'' item that is equivalent to a transaction previously 
approved under an ITAR license or other approval.
    (y) Satellite exports.

0
20. Supplement No. 1 to part 748 is amended by revising the first and 
fifth sentences of the final paragraph of Block 24 to read as follows:

Supplement No. 1 to Part 748--Item Appendix, and BIS-748P-B: End-User 
Appendix; Multipurpose Application Instructions

* * * * *
    Block 24: Additional Information.
    * * *
    This Block should be completed if your application includes a 
9x515 or ``600 series'' item that is equivalent to a transaction 
previously approved under an ITAR license or other approval.
    * * * The classification of the 9x515 or ``600 series'' item in 
question will no longer be the same because the item would no longer 
be ``subject to the ITAR,'' but all other aspects of the description 
of the item must be the same in order to be reviewed under this 
expedited process under paragraph (x) of Supplement No. 2 to part 
748 of the EAR.
* * * * *

0
21. Supplement No. 2 to part 748 is amended by revising paragraph (x) 
and adding paragraph (y) to read as follows:

Supplement No. 2 to Part 748--Unique Application and Submission 
Requirements

* * * * *
    (x) License application for a transaction involving a 9x515 or 
``600 series'' item that is equivalent to a transaction previously 
approved under an ITAR license or other approval. To request that 
the U.S. Government review of a license application for a 9x515 or 
``600 series'' item also take into consideration a previously 
approved ITAR license or other approval, applicants must also 
include the State license number or other approval identifier in 
Block 24 of the BIS license application (see the instructions in 
Supplement No. 1 to part 748 under Block 24).
* * * * *

[[Page 27437]]

    (y) Satellite exports. (1) A license application to export a 
satellite controlled by ECCN 9A515.a to a country that is not a 
member of the North Atlantic Treaty Organization (NATO) or a major 
non-NATO ally of the United States (as defined in 22 C.F.R. sections 
120.31 and 120.32), must include:
    (i) A technology transfer control plan approved by the 
Department of Defense and an encryption technology control plan 
approved by the National Security Agency, or drafts reflecting 
advance discussions with the departments and information identifying 
the U.S. Government officials familiar with the preparation of such 
draft plans; and
    (ii) Evidence of arrangements with the Department of Defense for 
monitoring of the launch activities.
    (2) A license application to export a satellite controlled by 
ECCN 9A515.a to a country that is a member of the North Atlantic 
Treaty Organization (NATO) or that is a major non-NATO ally of the 
United States (as defined in 22 C.F.R. sections 120.31 and 120.32), 
must include:
    (i) A technology transfer control plan approved by the 
Department of Defense and an encryption technology control plan 
approved by the National Security Agency, or documentation from the 
Department of Defense that such plans are not required; and
    (ii) Evidence of arrangements with the Department of Defense for 
monitoring of the launch or documentation from the Department of 
Defense that such monitoring is not required.

    Note 1 to Paragraph (y): Regardless of a satellite's or 
spacecraft's jurisdictional status, ownership, or origin, the ITAR 
controls as a ``defense service'' the furnishing of assistance 
(including training) by a U.S. person to a foreign person directly 
related to (a) the integration of a satellite or spacecraft to a 
launch vehicle or (b) launch failure analyses. See (See 22 CFR 121, 
Categories IV(i) and XV(f), and 22 CFR 124.15).

PART 758--[AMENDED]

0
22. The authority citation for 15 CFR part 758 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 
8, 2013, 78 FR 49107 (August 12, 2013).


0
23. Section 758.1 is amended by revising paragraph (b)(3) to read as 
follows:


Sec.  758.1  The Electronic Export Information (EEI) filing to the 
Automated Export System (AES).

* * * * *
    (b) * * *
    (3) For all exports of 9x515 or ``600 series'' items enumerated 
in paragraphs .a through .x of a 9x515 or ``600 series'' ECCN 
regardless of value or destination, including exports to Canada;
* * * * *

0
24. Section 758.2 is amended by revising paragraph (b)(4) to read as 
follows:


Sec.  758.2  Automated Export System (AES).

* * * * *
    (b) * * *
    (4) Exports are made under License Exception Strategic Trade 
Authorization (STA); are made under Authorization Validated End User 
(VEU); or are of 9x515 or ``600 series'' items.


0
25. Section 758.6 is amended by revising paragraph (b) to read as 
follows:


Sec.  758.6  Destination control statement and other information 
furnished to consignees.

* * * * *
    (b) Additional Requirement for 9x515 and ``600 series'' items. 
In addition to the destination control statement required in 
paragraph (a), the ECCN for each 9x515 or ``600 series'' item being 
exported must be printed on the invoice and on the bill of lading, 
air waybill, or other export control document that accompanies the 
shipment from its point of origin in the United States to the 
ultimate consignee or end user abroad.

PART 772--[AMENDED]

0
26. The authority citation for 15 CFR part 772 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 
8, 2013, 78 FR 49107 (August 12, 2013).


0
27. Section 772.1 is amended by revising the definition for the term 
``space-qualified'' to read as follows:


Sec.  772.1  Definitions of terms as used in the Export Administration 
Regulations (EAR).

* * * * *
    ``Space-qualified''. (Cat 3 and 6) Designed, manufactured, or 
qualified through successful testing, for operation at altitudes 
greater than 100 km above the surface of the Earth.

    Note 1: A determination that a specific item is ``space-
qualified'' by virtue of testing does not mean that other items in 
the same production run or model series are ``space-qualified'' if 
not individually tested.


    Note 2: The terms `designed' and `manufactured' in this 
definition are synonymous with ``specially designed.'' Thus, for 
example, an item that is ``specially designed'' for a spacecraft is 
deemed to be `designed' or `manufactured' for operation at altitudes 
greater than 100 km and an item that is not ``specially designed'' 
for a spacecraft is not deemed to have been so `designed' or 
`manufactured.'

* * * * *

PART 774--[AMENDED]

0
28. The authority citation for 15 CFR part 774 continues to read as 
follows:

    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 8, 2013, 78 FR 49107 (August 12, 2013).

Supplement No. 1 to Part 774--[Amended]

0
29. In Supplement No. 1 to Part 774, Category 1, remove and reserve 
paragraph .b in the Items paragraph of the List of Items Controlled of 
Export Control Classification Number (ECCN) 1B018, effective November 
10, 2014.

0
30. In Supplement No. 1 to Part 774, Category 3, revise the MT 
paragraph of the License Requirements section and the Related Controls 
paragraphs (1) and (2) and add a new sentence to the beginning of the 
Related Definitions paragraph of Export Control Classification Number 
(ECCN) 3A001, effective November 10, 2014, to read as follows:

Supplement No. 1 to Part 774--The Commerce Control List

* * * * *
3A001 Electronic ``components'' and ``specially designed'' 
``components'' therefor, as follows (see List of Items Controlled).

License Requirements

* * * * *

 
                                            Country chart (See Supp. No.
                Controls(s)                        1 to part 738)
 
 
                                * * * * *
MT applies to 3A001.a.1.a for               MT Column 1
 `microcircuits' ``usable in''
 ``missiles'' for protecting ``missiles''
 against nuclear effects (e.g.
 Electromagnetic Pulse (EMP), X-rays,
 combined blast and thermal effects) and
 to 3A001.a.5.a when ``designed or
 modified'' for military use, hermetically
 sealed and rated for operation in the
 temperature range from below -54 [deg]C
 to above +125 [deg]C.
 

* * * * *

List of Items Controlled

* * * * *
Related Controls: (1) See Category XV of the USML for certain 
``space-qualified'' electronics and Category XI of the USML for 
certain ASICs ``subject to the ITAR'' (see 22 CFR parts 120 through 
130). (2) See

[[Page 27438]]

also 3A101, 3A201, 3A991, and 9A515. * * *
* * * * *
Related Definitions: `Microcircuit' means a device in which a number 
of passive or active elements are considered as indivisibly 
associated on or within a continuous structure to perform the 
function of a circuit. * * *
* * * * *

0
31. In Supplement No. 1 to Part 774, Category 3, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 
3A002, effective November 10, 2014, to read as follows:

3A002 General purpose electronic equipment and ``accessories'' 
therefor, as follows (see List of Items Controlled).
* * * * *

List of Items Controlled

Related Controls: See Category XV(e)(9) of the USML for certain 
``space-qualified'' atomic frequency standards ``subject to the 
ITAR'' (see 22 CFR parts 120 through 130). See also 3A292, 3A992 and 
9A515.x.
* * * * *

0
32. In Supplement No. 1 to Part 774, Category 3, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 
3D001, effective November 10, 2014, to read as follows:

3D001 ``Software'' ``specially designed'' for the ``development'' or 
``production'' of ``equipment'' controlled by 3A001.b to 3A002.g or 
3B (except 3B991 and 3B992).
* * * * *

List of Items Controlled

Related Controls: ``Software'' ``specially designed'' for the 
``development'' or ``production'' of certain ``space-qualified'' 
atomic frequency standards described in Category XV(e)(9) of the 
USML is ``subject to the ITAR'' (see 22 CFR parts 120 through 130). 
See also 3D101 and 9D515.
* * * * *

0
33. In Supplement No. 1 to Part 774, Category 3, revise the License 
Exception TSR and Related Controls paragraphs of Export Control 
Classification Number (ECCN) 3E001, effective November 10, 2014, to 
read as follows:

3E001 ``Technology'' according to the General Technology Note for 
the ``development'' or ``production'' of ``equipment'' or 
``materials'' controlled by 3A (except 3A292, 3A980, 3A981, 3A991, 
3A992, or 3A999), 3B (except 3B991 or 3B992) or 3C (except 3C992).
* * * * *

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

* * * * *
TSR: Yes, except N/A for MT, and ``technology'' ``specially 
designed'' for the ``development'' or ``production'' of: (a) 
Traveling Wave Tube Amplifiers described in 3A001.b.8, having 
operating frequencies exceeding 19 GHz; and (b) solar cells, 
coverglass-interconnect-cells or covered-interconnect-cells (CIC) 
``assemblies,'' solar arrays and/or solar panels described in 
3A001.e.4.
* * * * *

List of Items Controlled

* * * * *
    Related Controls: ``Technology'' according to the General 
Technology Note for the ``development'' or ``production'' of certain 
``space-qualified'' atomic frequency standards described in Category 
XV(e)(9), MMICs described in Category XV(e)(14), and oscillators 
described in Category XV(e)(15) of the USML are ``subject to the 
ITAR'' (see 22 CFR parts 120 through 130). See also 3E101, 3E201 and 
9E515.
* * * * *

0
34. In Supplement No. 1 to Part 774, Category 3, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 
3E003, effective November 10, 2014, to read as follows:

3E003 Other ``technology'' for the ``development'' or ``production'' 
of the following (see List of Items Controlled).
* * * * *

List of Items Controlled

Related Controls: See 3E001 for the ``development'' or 
``production'' related to radiation hardening of integrated 
circuits, including silicon-on-insulation (SOI) ``technology.'' See 
also USML Category XI for certain ASICs.
* * * * *

0
35. In Supplement No. 1 to Part 774, Category 5, revise the Related 
Controls paragraph and remove the second note to Items paragraph (a.3) 
of Export Control Classification Number (ECCN) 5A001, effective 
November 10, 2014, to read as follows:

5A001 Telecommunications systems, equipment, ``components'' and 
``accessories,'' as follows (see List of Items Controlled).
* * * * *

List of Items Controlled

Related Controls: (1) See USML Category XI for direction-finding 
``equipment'' defined in 5A001.e that is ``subject to the ITAR'' 
(see 22 CFR parts 120 through 130). (2) See also 5A101 and 5A991.
* * * * *

0
36. In Supplement No. 1 to Part 774, Category 5, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 
5A991, effective November 10, 2014, to read as follows:

5A991 Telecommunication equipment, not controlled by 5A001 (see List 
of Items Controlled).
* * * * *

List of Items Controlled

Related Controls: See also 5E101 and 5E991.
* * * * *

0
37. In Supplement No. 1 to Part 774, Category 5, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 
5E001, effective November 10, 2014, to read as follows:

5E001 ``Technology'' as follows (see List of Items Controlled).

* * * * *

List of Items Controlled

Related Controls: See also 5E101, 5E980 and 5E991.
* * * * *

0
38. In Supplement No. 1 to Part 774, Category 6, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 
6A002, effective November 10, 2014, to read as follows:

6A002 Optical sensors and equipment, and ``components'' therefor, as 
follows (see List of Items Controlled).
* * * * *

List of Items Controlled

Related Controls: (1) See USML Categories XII and XV for controls on 
``image intensifiers'' defined in 6A002.a.2 and ``focal plane 
arrays'' defined in 6A002.a.3 that are ``subject to the ITAR'' (see 
22 CFR parts 120 through 130). (2) See also 6A102, 6A202, and 6A992.
* * * * *

0
39. In Supplement No. 1 to Part 774, Category 6, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 
6A004, effective November 10, 2014, to read as follows:

6A004 Optical equipment, and ``components,'' as follows (see List of 
Items Controlled).
* * * * *

List of Items Controlled

Related Controls: (1) For optical mirrors or `aspheric optical 
elements' ``specially designed'' for lithography ``equipment,'' see 
ECCN 3B001. (2) See also 6A994.
* * * * *

0
40. In Supplement No. 1 to Part 774, Category 6, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 
6D001, effective November 10, 2014, to read as follows:

6D001 ``Software'' ``specially designed'' for the ``development'' or 
``production'' of equipment controlled by 6A004, 6A005, 6A008 or 
6B008.
* * * * *

[[Page 27439]]

List of Items Controlled

Related Controls: See also 6D991, and ECCN 6E001 (``development'') 
for ``technology'' for items controlled under this entry.
* * * * *

0
41. In Supplement No. 1 to Part 774, Category 6, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 
6D002, effective November 10, 2014, to read as follows:

6D002 ``Software'' ``specially designed'' for the ``use'' of 
equipment controlled by 6A002.b, 6A008 or 6B008.
* * * * *

List of Items Controlled

Related Controls: ``Software'' ``specially designed'' for the 
``use'' of ``space-qualified'' LIDAR ``equipment'' ``specially 
designed'' for surveying or for meteorological observation, released 
from control under the note in 6A008.j, is controlled in 6D991. See 
also 6D102, 6D991, and 6D992.
* * * * *

0
42. In Supplement No. 1 to Part 774, Category 6, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 
6E001, effective November 10, 2014, to read as follows:

6E001 ``Technology'' according to the General Technology Note for 
the ``development'' of equipment, materials or ``software'' 
controlled by 6A (except 6A991, 6A992, 6A994, 6A995, 6A996, 6A997, 
or 6A998), 6B (except 6B995), 6C (except 6C992 or 6C994), or 6D 
(except 6D991, 6D992, or 6D993).
* * * * *

List of Items Controlled

Related Controls: See also 6E101, 6E201, and 6E991.
* * * * *

0
43. In Supplement No. 1 to Part 774, Category 6, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 
6E002, effective November 10, 2014, to read as follows:

6E002 ``Technology'' according to the General Technology Note for 
the ``production'' of equipment or materials controlled by 6A 
(except 6A991, 6A992, 6A994, 6A995, 6A996, 6A997 or 6A998), 6B 
(except 6B995) or 6C (except 6C992 or 6C994).
* * * * *

List of Items Controlled

Related Controls: See also 6E992.
* * * * *

0
44. In Supplement No. 1 to Part 774, Category 7, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 
7A004, effective November 10, 2014, to read as follows:

7A004 `Star trackers' and ``components'' therefor, as follows (see 
List of Items Controlled).
* * * * *

List of Items Controlled

Related Controls: (1) See USML Category XV for certain `star 
trackers' that are ``subject to the ITAR'' (see 22 CFR parts 120 
through 130). (2) See also 7A104 and 7A994.
* * * * *

0
45. In Supplement No. 1 to Part 774, Category 7, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 
7A104, effective November 10, 2014, to read as follows:

7A104 Gyro-astro compasses and other devices, other than those 
controlled by 7A004, which derive position or orientation by means 
of automatically tracking celestial bodies or satellites and 
``specially designed'' ``parts'' and ``components'' therefor.
* * * * *

List of Items Controlled

Related Controls: (1) See USML Categories IV and XV for certain 
`star trackers' that are ``subject to the ITAR'' (see 22 CFR parts 
120 through 130). (2) This entry controls ``specially designed'' 
``parts'' and ``components'' for gyro-astro compasses and other 
devices controlled by 7A004.
* * * * *

0
46. In Supplement No. 1 to Part 774, Category 7, revise Export Control 
Classification Number (ECCN) 7A105, including the heading, effective 
November 10, 2014, to read as follows:

7A105 Receiving equipment for Global Navigation Satellite Systems 
(GNSS) (e.g., GPS, GLONASS, or Galileo) designed or modified for 
airborne applications and capable of providing navigation information 
at speeds in excess of 600 m/s (1,165 nautical mph), and ``specially 
designed'' ``parts'' and ``components'' therefor.

License Requirements

Reason for Control: MT, AT

 
                Control(s)                          Country chart
 
MT applies to entire entry................  MT Column 1
AT applies to entire entry................  AT Column 1
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

LVS: N/A
GBS: N/A
CIV: N/A

List of Items Controlled

Related Controls: (1) See also 7A005 and 7A994. (2) See Categories XI 
and XV of the U.S. Munitions List (22 CFR 121.1) for controls on 
similar equipment ``specially designed'' for defense articles.
Related Definitions: N/A
Items: The list of items controlled is contained in the ECCN heading.

0
47. In Supplement No. 1 to Part 774, Category 9, revise the List of 
Items Controlled paragraph of Export Control Classification Number 
(ECCN) 9A004, effective November 10, 2014, to read as follows:

9A004 Space launch vehicles and ``spacecraft,'' as follows (see List 
of Items Controlled).
* * * * *

List of Items Controlled

Related Controls: (1) See also 9A104, 9A515, and 9B515. (2) See 
ECCNs 9E001 (``development'') and 9E002 (``production'') for 
technology for items controlled by this entry. (3) See USML 
Categories IV and XV for the space launch vehicles and other 
spacecraft that are ``subject to the ITAR'' (see 22 CFR parts 120 
through 130).

Related Definitions: N/A
Items:

    a. The International Space Station being developed, launched, 
and operated under the supervision of the U.S. National Aeronautics 
and Space Administration.
    b. through w. [RESERVED]
    x. ``Parts,'' ``components,'' ``accessories'' and 
``attachments'' that are ``specially designed'' for the 
International Space Station.
* * * * *

0
48. In Supplement No. 1 to Part 774, between the entries for ECCNs 
9A120 and 9A610, add new entry for ECCN 9A515 to read as follows:

9A515 ``Spacecraft'' and related commodities, as follows (see List 
of Items Controlled).

License Requirements

Reason for Control: NS, RS, MT, AT

 
                Control(s)                          Country chart
 
NS applies to entire entry, except .e.....  NS Column 1
RS applies to entire entry, except .e.....  RS Column 1
RS applies to 9A515.e.....................  RS Column 2
MT applies to 9A515.d when ``usable in''    MT Column 1
 ``missiles'' for protecting ``missiles''
 against nuclear effects (e.g.
 Electromagnetic Pulse (EMP), X-rays,
 combined blast and thermal effects).
AT applies to entire entry................  AT Column 1
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

    LVS: $1500

[[Page 27440]]

    GBS: N/A
    CIV: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 9A515.

List of Items Controlled

Related Controls: N/A
Related Definitions: N/A
Items:

    a. [RESERVED]
    b. [RESERVED]
    c. [RESERVED]
    d. Microelectronic circuits (e.g., integrated circuits and 
micro-circuits) rated, certified, or otherwise specified or 
described as meeting or exceeding all the following characteristics 
and that are ``specially designed'' for defense articles, ``600 
series'' items, or items controlled by 9A515:
    d.1. A total dose of 5 x 10\5\ Rads (Si) (5 x 10\3\ Gy (Si));
    d.2. A dose rate upset threshold of 5 x 10\8\ Rads (Si)/sec (5 x 
10\6\ Gy (Si)/sec);
    d.3. A neutron dose of 1 x 10\14\ n/cm\2\ (1 MeV equivalent);
    d.4. An uncorrected single event upset sensitivity of 1 x 
10-10 errors/bit/day or less, for the CR[Egrave]ME-MC 
geosynchronous orbit, Solar Minimum Environment for heavy ion flux; 
and
    d.5. An uncorrected single event upset sensitivity of 1 x 
10-3 errors/part or less for a fluence of 1 x 10\7\ 
protons/cm\2\ for proton energy greater than 50 MeV.
    e. Microelectronic circuits (e.g., integrated circuits and 
micro-circuits) that are rated, certified, or otherwise specified or 
described as meeting or exceeding all the following characteristics 
and that are ``specially designed'' for defense articles controlled 
by USML Category XV or items controlled by 9A515:
    e.1. A total dose >=1 x 10\5\ Rads (Si) (1 x 10\3\ Gy(Si)) and 
<5 x 10\5\ Rads (Si) (5 x 10\3\ Gy(Si)); and
    e.2. A single event effect (SEE) (i.e., single event latchup 
(SEL), single event burnout (SEB), or single event gate rupture 
(SEGR)) immunity to a linear energy transfer (LET) >=80 MeV-cm\2\/
mg.

    Note 1 to 9A515.d and .e: Application specific integrated 
circuits (ASICs), integrated circuits developed and produced for a 
specific application or function, ``specially designed'' for defense 
articles are controlled by Category XI(c) of the USML regardless of 
characteristics.


    Note 2 to 9A515.d and .e: See 3A001.a for controls on radiation-
hardened microelectronic circuits ``subject to the EAR'' that are 
not controlled by 9A515.d or 9A515.e.

    f. through y. [RESERVED]


0
49. In Supplement No. 1 to Part 774, Category 9, revise Export Control 
Classification Number (ECCN) 9A515, effective November 10, 2014, to 
read as follows:

9A515 ``Spacecraft'' and related commodities, as follows (see List 
of Items Controlled).

License Requirements

    Reason for Control: NS, RS, MT, AT

 
                Control(s)                          Country chart
 
NS applies to entire entry, except .e and   NS Column 1
 .y.
RS applies to entire entry, except .e and   RS Column 1
 .y.
RS applies to 9A515.e.....................  RS Column 2
MT applies to 9A515.d when ``usable in''    MT Column 1
 ``missiles'' for protecting ``missiles''
 against nuclear effects (e.g.
 Electromagnetic Pulse (EMP), X-rays,
 combined blast and thermal effects).
AT applies to entire entry................  AT Column 1
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

LVS: $1500
GBS: N/A
CIV: N/A

Special Conditions for STA

STA: (1) Paragraph (c)(1) of License Exception STA (Sec.  
740.20(c)(1) of the EAR) may not be used for ``spacecraft'' in 
9A515.a that provide space-based logistics, assembly or servicing of 
any spacecraft (e.g., refueling), unless determined by BIS to be 
eligible for License Exception STA in accordance with Sec.  
740.20(g) (License Exception STA eligibility requests for certain 
``500 series'' and ``600 series'' end items). (2) Paragraph (c)(2) 
of License Exception STA (Sec.  740.20(c)(2) of the EAR) may not be 
used for any item in 9A515.

List of Items Controlled

Related Controls: Spacecraft, launch vehicles and related articles 
that are enumerated in the USML, and technical data (including 
``software'') directly related thereto, and all services (including 
training) directly related to the integration of any satellite or 
spacecraft to a launch vehicle, including both planning and onsite 
support, or furnishing any assistance (including training) in the 
launch failure analysis or investigation for items in 9A515.a, are 
``subject to the ITAR.'' All other ``spacecraft,'' as enumerated 
below and defined in section 772.1, are subject to the controls of 
this ECCN. See also ECCNs 3A001, 3A002, 3A991, 3A992, 6A002, 6A004, 
6A008, and 6A998 for specific ``space-qualified'' items, 7A004 and 
7A104 for star trackers, and 9A004 for the International Space 
Station and specially designed part and components therefor. See 
USML Category XI(c) for controls on microwave monolithic integrated 
circuits (MMICs) that are ``specially designed'' for defense 
articles.
Related Definitions: N/A
Items:

    ``Spacecraft'' and other items described in ECCN 9A515 remain 
subject to the EAR even if exported, reexported, or transferred (in-
country) with defense articles ``subject to the ITAR'' integrated 
into and included therein as integral parts of the item. In all 
other cases, such defense articles are subject to the ITAR. For 
example, a 9A515.a ``spacecraft'' remains ``subject to the EAR'' 
even when it is exported, reexported, or transferred (in-country) 
with a ``hosted payload'' described in USML Category XV(e)(17) 
incorporated therein. In all other cases, a ``hosted payload'' 
performing a function described in USML Category XV(a) always 
remains a USML item.
    a. ``Spacecraft,'' including satellites, and space vehicles, 
whether designated developmental, experimental, research or 
scientific, not enumerated in USML Category XV or described in 
9A004.

    Note: ECCN 9A515.a includes commercial communications 
satellites, remote sensing satellites not identified in USML 
Category XV(a), planetary rovers, planetary and interplanetary 
probes, and in-space habitats.

    b. Ground control systems and training simulators ``specially 
designed'' for telemetry, tracking, and control of the 
``spacecraft'' controlled in paragraph 9A515.a.
    c. [RESERVED]
    d. Microelectronic circuits (e.g., integrated circuits and 
micro-circuits) rated, certified, or otherwise specified or 
described as meeting or exceeding all the following characteristics 
and that are ``specially designed'' for defense articles, ``600 
series'' items, or items controlled by 9A515:
    d.1. A total dose of 5 x 10\5\ Rads (Si) (5 x 10\3\ Gy (Si));
    d.2. A dose rate upset threshold of 5 x 10\8\ Rads (Si)/sec (5 x 
10\6\ Gy (Si)/sec);
    d.3. A neutron dose of 1 x 10\14\ n/cm\2\ (1 MeV equivalent);
    d.4. An uncorrected single event upset sensitivity of 1 x 
10-10 errors/bit/day or less, for the CR[Egrave]ME-MC 
geosynchronous orbit, Solar Minimum Environment for heavy ion flux; 
and
    d.5. An uncorrected single event upset sensitivity of 1 x 
10-3 errors/part or less for a fluence of 1 x 10\7\ 
protons/cm\2\ for proton energy greater than 50 MeV.
    e. Microelectronic circuits (e.g., integrated circuits and 
micro-circuits) that are rated, certified, or otherwise specified or 
described as meeting or exceeding all the following characteristics 
and that are ``specially designed'' for defense articles controlled 
by USML Category XV or items controlled by 9A515:
    e.1. A total dose >=1 x 10\5\ Rads (Si) (1 x 10\3\ Gy(Si)) and 
<5 x 10\5\ Rads (Si) (5 x 10\3\ Gy(Si)); and
    e.2. A single event effect (SEE) (i.e., single event latchup 
(SEL), single event burnout (SEB), or single event gate rupture 
(SEGR)) immunity to a linear energy transfer (LET) >=80 MeV-cm\2\/
mg.

    Note 1 to 9A515.d and .e: Application specific integrated 
circuits (ASICs), integrated circuits developed and produced for a 
specific application or function, specifically designed or modified 
for defense articles and not in normal commercial use

[[Page 27441]]

are controlled by Category XI(c) of the USML regardless of 
characteristics.
    Note 2 to 9A515.d and .e: See 3A001.a for controls on radiation-
hardened microelectronic circuits ``subject to the EAR'' that are 
not controlled by 9A515.d or 9A515.e.

    f. through w. [RESERVED]
    x. ``Parts,'' ``components,'' ``accessories'' and 
``attachments'' that are ``specially designed'' for defense articles 
controlled by USML Category XV or items controlled by 9A515, and 
that are NOT:
    1. Enumerated or controlled in the USML or elsewhere within ECCN 
9A515;
    2. Microelectronic circuits;
    3. Described in 7A004 or 7A104; or
    4. Described in an ECCN containing ``space-qualified'' as a 
control criterion (i.e., 3A001.b.1, 3A001.e.4, 3A002.a.3, 3A002.g.1, 
3A991.o, 3A992.b.3, 6A002.a.1, 6A002.b.2, 6A002.d.1, 6A004.c and .d, 
6A008.j.1, or 6A998.b).

    Note to 9A515.x: ``Parts,'' ``components,'' ``accessories,'' and 
``attachments'' specified in USML subcategory XV(e) or enumerated in 
other USML categories are subject to the controls of that paragraph 
or category.

    y. Items that would otherwise be within the scope of ECCN 
9A515.x but that have been identified in an interagency-cleared 
commodity classification (CCATS) pursuant to Sec.  748.3(e) as 
warranting control in 9A515.y.

0
50. In Supplement No. 1 to Part 774, between the entries for ECCNs 
9B117 and 9B610, add new entry for ECCN 9B515, effective November 10, 
2014, to read as follows:

9B515 Test, inspection, and production ``equipment'' ``specially 
designed'' for ``spacecraft'' 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................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

LVS: $1500; $5000 for 9B515.b
GBS: N/A
CIV: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 9B515.

List of Items Controlled

Related Controls: N/A
Related Definitions: N/A
Items:

    a. Test, inspection, and production ``equipment'' ``specially 
designed'' for the ``production'' or ``development'' of commodities 
enumerated in ECCN 9A515.a, or USML Category XV(a) or XV(e).
    Note: ECCN 9B515.a includes equipment, cells, and stands 
``specially designed'' for the analysis or isolation of faults in 
commodities enumerated in ECCN 9A515.a or USML Category XV(a) or 
XV(e).
    b. Environmental test chambers capable of pressures below 
(10-4) Torr, and ``specially designed'' for commodities 
enumerated in 9A515.a or USML Category XV(a).


0
51. In Supplement No. 1 to Part 774, between the entries for ECCNs 
9D105 and 9D610, add a new entry for ECCN 9D515 to read as follows:

9D515 ``Software'' ``specially designed'' for the ``development,'' 
``production'' operation, installation, maintenance, repair, 
overhaul, or refurbishing of ``spacecraft'' 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................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

CIV: N/A
TSR: N/A

Special Conditions for STA

STA: (1) Paragraph (c)(1) of License Exception STA (Sec.  
740.20(c)(1) of the EAR) may not be used for 9D515.d or .e (2) 
Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) of the 
EAR) may not be used for any ``software'' in 9D515.

List of Items Controlled

Related Controls: ``Software'' directly related to articles 
enumerated in USML Category XV is subject to the control of USML 
paragraph XV(f).
Related Definitions: N/A
Items:

    a. [RESERVED]
    b. [RESERVED]
    c. [RESERVED]
    d. ``Software'' ``specially designed'' for the ``development,'' 
``production,'' operation, failure analysis or anomaly resolution of 
commodities controlled by ECCN 9A515.d.
    e. ``Software'' ``specially designed'' for the ``development,'' 
``production,'' operation, failure analysis or anomaly resolution of 
commodities controlled by ECCN 9A515.e.

0
52. In Supplement No. 1 to Part 774, revise Export Control 
Classification Number (ECCN) 9D515, effective November 10, 2014, to 
read as follows:

9D515 ``Software'' ``specially designed'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, 
overhaul, or refurbishing of ``spacecraft'' 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................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

CIV: N/A
TSR: N/A

Special Conditions for STA

STA: (1) Paragraph (c)(1) of License Exception STA (Sec.  
740.20(c)(1) of the EAR) may not be used for 9D515.b, .d, or .e. (2) 
Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) of the 
EAR) may not be used for any ``software'' in 9D515.

List of Items Controlled

Related Controls: ``Software'' directly related to articles 
enumerated in USML Category XV is subject to the control of USML 
paragraph XV(f). See also ECCNs 3D001, 6D001, 6D002, and 6D991 for 
controls of specific software ``specially designed'' for certain 
``space-qualified'' items.
Related Definitions: N/A
Items:

    a. ``Software'' (other than ``software'' controlled in 
paragraphs .b, .d, or .e of this entry) ``specially designed'' for 
the ``development,'' ``production,'' operation, installation, 
maintenance, repair, overhaul, or refurbishing of commodities 
controlled by ECCN 9A515 (except 9A515.d or .e) or 9B515.
    b. ``Source code'' that:
    b.1. Contains the algorithms or control principles (e.g., for 
clock management), precise orbit determination (e.g., for ephemeris 
or pseudo range analysis), signal construct (e.g., pseudo-random 
noise (PRN) anti-spoofing) ``specially designed'' for items 
controlled by ECCN 9A515;
    b.2. Is ``specially designed'' for the integration, operation, 
or control of items controlled by ECCN 9A515;
    b.3. Contains algorithms or modules ``specially designed'' for 
system, subsystem, component, part, or accessory calibration, 
manipulation, or control of items controlled by ECCN 9A515;
    b.4. Is ``specially designed'' for data assemblage, 
extrapolation, or manipulation of items controlled by ECCN 9A515;
    b.5. Contains the algorithms or control laws ``specially 
designed'' for attitude, position, or flight control of items 
controlled in ECCN 9A515; or
    b.6. Is ``specially designed'' for built-in test and diagnostics 
for items controlled by ECCN 9A515.
    c. [RESERVED]
    d. ``Software'' ``specially designed'' for the ``development,'' 
``production,'' operation, failure analysis or anomaly resolution of 
commodities controlled by ECCN 9A515.d.
    e. ``Software'' ``specially designed'' for the ``development,'' 
``production,'' operation,

[[Page 27442]]

failure analysis or anomaly resolution of commodities controlled by 
ECCN 9A515.e.


0
53. In Supplement No. 1 to Part 774, between the entries for ECCNs 
9E102 and 9E610, add new entry for ECCN 9E515 to read as follows:
9E515 ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, repair, overhaul, or 
refurbishing of ``spacecraft'' and related commodities, as follows (see 
List of Items Controlled).

License Requirements

Reason for Control: NS, MT, RS, AT

 
                Control(s)                          Country chart
 
NS applies to entire entry................  NS Column 1
MT applies to technology for items in       MT Column 1
 9A515.d controlled for MT reasons.
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

CIV: N/A
TSR: N/A

Special Conditions for STA

STA: (1) Paragraph (c)(1) of License Exception STA (Sec.  740.20(c)(1) 
of the EAR) may not be used for 9E515.d or .e. (2) Paragraph (c)(2) of 
License Exception STA (Sec.  740.20(c)(2) of the EAR) may not be used 
for any ``technology'' in 9E515.

List of Items Controlled

Related Controls: Technical data directly related to articles 
enumerated in USML Category XV are subject to the control of USML 
paragraph XV(f).
Related Definitions: N/A
Items:

    a. [RESERVED]
    b. [RESERVED]
    c. [RESERVED]
    d. ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, failure analysis or anomaly resolution of 
commodities controlled by ECCN 9A515.d.
    e. ``Technology'' ``required'' for the ``development,'' 
``production,'' failure analysis or anomaly resolution of commodities 
controlled by ECCN 9A515.e.


0
54. In Supplement No. 1 to Part 774, revise Export Control 
Classification Number (ECCN) 9E515, effective November 10, 2014, to 
read as follows:

9E515 ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, repair, overhaul, or 
refurbishing of ``spacecraft'' and related commodities, as follows 
(see List of Items Controlled).

License Requirements

Reason for Control: NS, MT, RS, AT

 
                Control(s)                          Country chart
 
NS applies to entire entry................  NS Column 1
MT applies to technology for items in       MT Column 1
 9A515.d controlled for MT reasons.
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
 

License Exceptions

CIV: N/A
TSR: N/A

Special Conditions for STA

STA: (1) Paragraph (c)(1) of License Exception STA (Sec.  
740.20(c)(1) of the EAR) may not be used for 9E515.b, .d or .e. (2) 
Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) of the 
EAR) may not be used for any ``technology'' in 9E515.

List of Items Controlled

Related Controls: Technical data directly related to articles 
enumerated in USML Category XV are subject to the control of USML 
paragraph XV(f). See also ECCNs 3E001, 3E003, 6E001, and 6E002 for 
specific ``space-qualified'' items. See 9E001 and 9E002 for 
technology for the International Space Station and ``parts,'' 
``components,'' ``accessories,'' and ``attachments'' ``specially 
designed'' therefor. See USML category XV(f) for controls on 
technical data and defense services related to launch vehicle 
integration.
Related Definitions: N/A
Items:

    a. ``Technology'' ``required'' for the ``development,'' 
``production,'' installation, repair (including on-orbit anomaly 
resolution and analysis beyond established procedures), overhaul or 
refurbishing of commodities controlled by ECCN 9A515 (except 
9A515.b, .d, or .e), 9B515, or ``software'' controlled by 9D515.a.
    b. ``Technology'' ``required'' for the ``development,'' 
``production,'' failure analysis or anomaly resolution of software 
controlled by ECCN 9D515.b.
    c. [RESERVED]
    d. ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, failure analysis or anomaly resolution of 
commodities controlled by ECCN 9A515.d.
    e. ``Technology'' ``required'' for the ``development,'' 
``production,'' failure analysis or anomaly resolution of 
commodities controlled by ECCN 9A515.e.

    Note 1: [RESERVED]


    Note 2: Activities and technology/technical data directly 
related to or required for the spaceflight (e.g., sub-orbital, 
orbital, lunar, interplanetary, or otherwise beyond Earth orbit) 
passenger or participant experience, regardless of whether the 
passenger or participant experience is for space tourism, scientific 
or commercial research, commercial manufacturing/production 
activities, educational, media, or commercial transportation 
purposes, are not subject to the ITAR or the EAR. Such activities 
and technology/technical data include those directly related to or 
required for:
    (i) ``spacecraft'' access, ingress, and egress, including the 
operation of all ``spacecraft'' doors, hatches, and airlocks;
    (ii) physiological training (e.g., human-rated centrifuge 
training or parabolic flights, pressure suit or spacesuit training/
operation);
    (iii) medical evaluation or assessment of the spaceflight 
passenger or participant;
    (iv) training for and operation by the passenger or participant 
of health and safety related hardware (e.g., seating, environmental 
control and life support, hygiene facilities, food preparation, 
exercise equipment, fire suppression, communications equipment, 
safety-related clothing or headgear) or emergency procedures;
    (v) viewing of the interior and exterior of the spacecraft or 
terrestrial mock-ups;
    (vi) observing ``spacecraft'' operations (e.g., pre-flight 
checks, landing, in-flight status);
    (vii) training in ``spacecraft'' or terrestrial mock-ups for 
connecting to or operating passenger or participant equipment used 
for purposes other than operating the ``spacecraft''; or
    (viii) donning, wearing or utilizing the passenger's or 
participant's flight suit, pressure suit or spacesuit, and personal 
equipment.


    Note 3 to 9E515: Neither USML Category XV(f) nor ECCN 9E515 
control the data transmitted to or from a satellite or 
``spacecraft,'' whether real or simulated, when limited to 
information about the health, operational status, or measurements or 
function of, or raw sensor output from, the ``spacecraft,'' 
``spacecraft'' payload(s), or its associated subsystems or 
components. Such information is not within the scope of information 
captured within the definition of ``technology'' in the EAR. 
Examples of such information, which are commonly referred to as 
``housekeeping data,'' include (i) system, hardware, component 
configuration, and operation status information pertaining to 
temperatures, pressures, power, currents, voltages, and battery 
charges; (ii) ``spacecraft'' or payload orientation or position 
information, such as state vector or ephemeris information; (iii) 
payload raw mission or science output, such as images, spectra, 
particle measurements, or field measurements; (iv) command 
responses; (v) accurate timing information; and (vi) link budget 
data. The act of processing such telemetry data--i.e., converting 
raw data into engineering units or readable products--or encrypting 
it does not, in and of itself, cause the telemetry data to become 
subject to the ITAR or to ECCN 9E515. All classified technical data 
directly related to items controlled in USML Category XV or ECCNs 
9A515, and defense services using the

[[Page 27443]]

classified technical data remains subject to the ITAR. This note 
does not affect controls in USML VX(f), ECCN 9D515, or ECCN 9E515 on 
software source code or commands that control a ``spacecraft,'' 
payload, or associated subsystems.



0
55. In Supplement No. 4 to Part 774, revise paragraph (a)(3), the 
introductory text of paragraph (a)(4), and the first sentence of 
paragraph (a)(5), to read as follows:

Supplement No. 4 to Part 774--Commerce Control List Order of Review

    (a) * * *
    (3) Step 3. The ``600 series'' describes military items that 
were once subject to the ITAR. The 9x515 ECCNs describe 
``spacecraft,'' related items, and some radiation-hardened 
microelectronic circuits that were once subject to the ITAR under 
USML Category XV. Just as the ITAR effectively trumps the EAR, items 
described in a 9x515 ECCN or ``600 series'' ECCN trump other ECCNs 
on the CCL. Thus, the next step in conducting a classification 
analysis of an item ``subject to the EAR'' is to determine whether 
it is described in a 9x515 ECCN or ``600 series'' ECCN paragraph 
other than a ``catch-all'' paragraph such as a ``.x'' paragraph that 
controls unspecified ``parts'' and ``components'' ``specially 
designed'' for items in that ECCN or the corresponding USML 
paragraph. If so, the item is classified under that 9x515 ECCN or 
``600 series'' ECCN paragraph even if it would also be described in 
another ECCN.
    (4) Step 4. If the item is not described in a 9x515 ECCN or 
``600 series'' ECCN, then determine whether the item is classified 
under a 9x515 ECCN or ``600 series'' catch-all paragraph, i.e., one 
that controls non-specific ``parts,'' ``components,'' 
``accessories,'' and ``attachments'' ``specially designed'' for 
items in that ECCN or the corresponding USML paragraph. Such items 
are generally in the ``.x'' paragraph of ECCN 9A515 or a ``600 
series'' ECCN. * * *
    (5) Step 5. If an item is not classified by a ``600 series'' or 
in a 9x515 ECCN, then starting from the beginning of the product 
group analyze each ECCN to determine whether any other ECCN in that 
product group describes the item. * * *
* * * * *

    Dated: May 7, 2014.
Kevin J. Wolf,
Assistant Secretary of Commerce for Export Administration.
[FR Doc. 2014-10807 Filed 5-12-14; 8:45 am]
BILLING CODE 3510-33-P