[Federal Register Volume 64, Number 148 (Tuesday, August 3, 1999)]
[Rules and Regulations]
[Pages 42009-42012]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19644]
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DEPARTMENT OF COMMERCE
Bureau of Export Administration
15 CFR Parts 734, 738, 740, and 742
[Docket No. 990709187-9187-01]
RIN 0694-AB96
Revision of High Performance Computer Licensing Policy
AGENCY: Bureau of Export Administration, Commerce.
ACTION: Final rule.
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SUMMARY: The Bureau of Export Administration (BXA) is amending the
Export Administration Regulations (EAR) by raising the performance
parameters for those computers which can be exported and reexported
under License Exception CTP. The upper threshold of the Composite
Theoretical Performance (CTP) parameter for Computer Tier 2 countries
is raised from 10,000 millions of theoretical operations per second
(MTOPS) to 20,000 MTOPS. The upper threshold for Computer Tier 3
countries is raised from 7,000 MTOPS to 12,300 MTOPS for civilian end-
users and end-uses. For military end-users and end-uses in Computer
Tier 3 destinations the CTP parameter remains at 2,000 MTOPS for the
immediate future. The upper parameter for military end-users and end-
uses to Computer Tier 3 countries will be raised from 2,000 MTOPS to
6,500 MTOPS on the same date the threshold for advance notification for
high performance computers (HPC) exports to Tier 3 countries is raised
from 2,000 MTOPS to 6,500 MTOPS. The threshold for advance notification
for exports of HPCs to Tier 3 countries is raised to 6,500 MTOPS,
effective approximately 180 days following the submission of a
statutorily mandated report to Congress. The President sent this report
to Congress on July 26, 1999. In addition, the following countries are
moved from Computer Tier 2 to Computer Tier 1: Brazil, the Czech
Republic, Hungary, and Poland.
DATES: This rule is effective August 3, 1999.
FOR FURTHER INFORMATION CONTACT: James A. Lewis, Office of Strategic
Trade and Foreign Policy Controls, Bureau of Export Administration,
Telephone: (202) 482-4196.
SUPPLEMENTARY INFORMATION:
Background
On January 25, 1996, the Bureau of Export Administration created
License Exception CTP for exports and reexports of HPCs. This policy
took into account rapid technical advances in computing power, as well
as national security and nonproliferation concerns. License Exception
CTP divided the world into tiers based on U.S. national security and
foreign policy interests. These tiers represent the level of
proliferation and security risk a country poses to the U.S. and, as a
result, the technical level of computer exports tier members can
receive without applying for an export license. Computer Tier 1
consists of close U.S. allies; Computer Tier 2 includes countries
representing minimal security concerns to the U.S; countries
representing a potential proliferation or security concern are listed
in Computer Tier 3; and Computer Tier 4 consists of terrorist
supporting states.
The President has decided to amend these country tiers by
transferring Brazil, the Czech Republic, Hungary, and Poland from Tier
2 to Tier 1. The Administration will consider moving additional
countries between Computer Tiers in the future.
The rapid evolution of computer technology has also made CTP
parameter revisions necessary. This rule changes the upper threshold of
the CTP
[[Page 42010]]
parameter for Computer Tier 2 from 10,000 MTOPS to 20,000 MTOPS and the
upper threshold of Computer Tier 3 countries from 7,000 MTOPS to 12,300
MTOPS for civilian end-users and end-uses. License Exception CTP will
be made available for military end-users and end-uses in Computer Tier
3 in approximately 180 days along with the raising of the advance
notification level under the 1998 National Defense Authorization Act
(NDAA) from 2,000 MTOPS to 6,500 MTOPS. Revision of the advance
notification threshold will be effective 180 days after the submission
by the President of a required report notifying the Congress of this
change. The President sent this report to Congress on July 26, 1999.
Following this 180 day period, the upper parameter will be raised from
2,000 MTOPS to 6,500 MTOPS for military end-users and end-uses in
Computer Tier 3. This level reflects the Administration's determination
that widespread commercial availability makes computers with a
performance of 6,500 MTOPS or less uncontrollable. Note that the
advance notification requirements of the 1998 NDAA for exports and
reexports of computers with a CTP greater than 2,000 MTOPS to Computer
Tier 3 destinations remains in effect until such changes are reviewed
by the U.S. Congress.
This rule does not have an immediate impact on post-shipment
reporting and record keeping requirements compelled by the 1998 NDAA
for HPC exports. All HPC exports with a CTP greater than 2,000 MTOPS to
Tier 3 Countries still require post-shipment reporting. However, BXA
may, prior to January 23, 2000, publish an additional rule regarding
further reporting requirements to meet stipulations under the 1998 NDAA
to provide the Congress an annual report on all HPC exports to Computer
Tier 3 destinations. This potential rule will most likely require HPC
exporters to report the intended end-use of all HPC exports with a CTP
greater than 2,000 MTOPS but less than or equal to 6,500 MTOPS to
Computer Tier 3 destinations. This information is currently provided by
exporters in their advance notification requests for computers with a
CTP greater than 2,000 MTOPS to Computer Tier 3 destinations. In light
of the rapid technological advancement in HPCs, the United States will
routinely review these licensing levels to determine if further
adjustments are warranted. In particular, for Tier 2, the United States
will review the licensing level in six months with the expectation of
raising the level to the 32,000 to 36,000 MTOPS range. Changes to Tier
3 may also be made at that time.
This rule specifically amends the EAR in the following ways:
1. In section 740.7, Brazil, the Czech Republic, Hungary, and
Poland are moved from Computer Tier 2 to Computer Tier 1, and the upper
threshold of the CTP parameter for Computer Tier 2 is raised from
10,000 MTOPS to 20,000 MTOPS.
2. In section 740.7, the upper threshold of the CTP parameter for
Computer Tier 3 is raised from 7,000 MTOPS to 12,300 MTOPS for civilian
end-users and end-uses. The upper parameter for military end-users and
uses is raised from 2,000 MTOPS to 6,500 MTOPS, effective January 23,
2000.
3. In section 740.7, the CTP level for computers requiring advance
notification for export and reexport to Computer Tier 3 destinations is
raised from 2,000 MTOPS to 6,500 MTOPS, effective January 23, 2000.
4. In section 740.11 and Supplement No. 1 to section 740.11, the
CTP level for computers not eligible for License Exception GOV is
raised from 10,000 MTOPS to 20,000 MTOPS.
5. In section 742.12, the upper threshold of the CTP parameter as
measured in MTOPS for Computer Tier 2 is raised from 10,000 MTOPS to
20,000 MTOPS.
6. In section 742.12, the upper threshold of the CTP parameter for
Computer Tier 3 is raised from 7,000 MTOPS to 12,300 MTOPS for civil
end-users and end-uses. Effective January 23, 2000, the upper threshold
of the CTP parameter for Computer Tier 3 is raised from 2,000 MTOPS to
6,500 MTOPS for military end-users and end-uses.
Although the Export Administration Act (EAA) expired on August 20,
1994, the President invoked the International Emergency Economic Powers
Act and continued in effect the EAR, and to the extent permitted by
law, the provisions of the EAA, as amended, in Executive Order 12924 of
August 19, 1994, as extended by the President's notices of August 15,
1995 (60 FR 42767), August 14, 1996 (61 FR 42527) August 13, 1997 (62
FR 43629) and August 13, 1998 (63 FR 44121).
Rule Making Requirements
1. This final rule has been determined to be significant for
purposes of E.O. 12866.
2. Notwithstanding any other provision of law, no person is
required to respond to nor be subject to a penalty for failure to
comply with a collection of information subject to the requirements of
the Paperwork Reduction Act unless that collection of information
displays a current valid OMB Control Number. This regulation involves
collections previously approved by the Office of Management and Budget
under control numbers 0694-0088, ``Multi-Purpose Application,'' which
carries a burden hour estimate of 45 minutes per manual submission and
40 minutes per electronic submission. Miscellaneous and recordkeeping
activities account for 12 minutes per submission. In addition,
information is also collected under OMB control number 0694-0107,
``National Defense Authorization Act,'' Advance Notifications and Post-
Shipment Verification reports.
3. This rule does not contain policies with Federalism implications
sufficient to warrant preparation of a Federalism assessment under
Executive Order 12612.
4. The provisions of the Administrative Procedure Act requiring
notice of proposed rule making, the opportunity for public
participation, and a delay in effective date, are inapplicable because
this regulation involves a military or foreign affairs function of the
United States (see 5 U.S.C. 553(a)(1)). Further, no other law requires
that a notice of proposed rule making and an opportunity for public
comment be given for this rule. Because a notice of proposed rule
making and opportunities for public comment are not required to be
given for this rule by 5 U.S.C. 553, or by any other law, the
analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601
et seq., are inapplicable.
Therefore, this regulation is issued in final form. Although there
is no formal comment period, public comments on this regulation are
welcome on a continuing basis. Comments should be submitted to Frank J.
Ruggiero, Office of Exporter Services, Bureau of Export Administration,
Department of Commerce, P.O. Box 273, Washington, D.C. 20044.
List of Subjects
15 CFR Part 734
Administrative practice and procedure, Exports, Foreign trade.
15 CFR Part 738
Administrative practice and procedure, Exports, Foreign trade.
15 CFR Part 740
Administrative practice and procedure, Exports, Foreign trade,
Reporting and recordkeeping requirements.
[[Page 42011]]
15 CFR Part 742
Exports, Foreign Trade.
Accordingly, parts 734, 738, 740, and 742 of the Export
Administration Regulations (15 CFR Parts 730-774) are amended as
follows:
1. The authority citation for 15 CFR part 734 is revised to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq., 1701 et seq.; E.O.
12924, 3 CFR, 1994 Comp., p. 917; E.O. 12938, 3 CFR, 1994 Comp., p.
950; E.O. 13020, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 3 CFR, 1996
Comp., p. 228; and Notice of August 13, 1998, 63 FR 44121, 3 CFR,
1998 Comp., p. 294.
2. The authority citation for 15 CFR Part 738 is revised 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); 18 U.S.C. 2510 et seq.; 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; 46 U.S.C.
app. 466c; 50 U.S.C. app. 5; E.O. 12924, 59 FR 43437, 3 CFR, 1994
Comp., p. 917; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228;
and Notice of August 13, 1998, 63 FR 44121, 3 CFR 1998 Comp., p.
294.
3. The authority citation for 15 CFR Part 740 is revised to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; E.O. 13026, 61
FR 58767, 3 CFR, 1996 Comp., p. 228; and Notice of August 13, 1998,
63 FR 44121, 3 CFR 1998 Comp., p. 294.
4. The authority citation for 15 CFR Part 742 is revised to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
18 U.S.C. 2510 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a;
E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 3
CFR, 1993 Comp., p. 608; E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp.,
p. 917; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O.
13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; and Notice of August
13, 1998, 63 FR 44121, 3 CFR 1998 Comp., p. 294.
PART 734--[AMENDED]
Sec. 734.4 [Amended]
5. Section 734.4 is amended by revising the phrase ``7,000 MTOPS''
in paragraph (a) to read ``12,300 MTOPS''.
PART 738--[AMENDED]
6. Supplement No. 1 to Part 738 is amended by revising the phrase
``greater than 10,000 MTOPS'' in the second footnote to read ``greater
than 20,000 MTOPS''.
PART 740--[AMENDED]
7. Section 740.7 is amended by:
a. Revising paragraphs (b)(1) and (c);
b. Revising paragraphs (d)(2) and (d)(3); and
c. Revising paragraphs (d)(5)(i) and (d)(5)(v) introductory text to
read as follows:
Sec. 740.7 Computers (CTP).
* * * * *
(b) Computer Tier 1--(1) Eligible countries. The countries that are
eligible to receive exports and reexports under this License Exception
are Australia, Austria, Belgium, Brazil, Czech Republic, Denmark,
Finland, France, Germany, Greece, the Holy See, Hungary, Iceland,
Ireland, Italy, Japan, Liechtenstein, Luxembourg, Mexico, Monaco,
Netherlands, New Zealand, Norway, Poland, Portugal, San Marino, Spain,
Sweden, Switzerland, Turkey, and the United Kingdom.
* * * * *
(c) Computer Tier 2--(1) Eligible countries. The countries that are
eligible to receive exports under this License Exception include
Antigua and Barbuda, Argentina, Bahamas, Barbados, Bangladesh, Belize,
Benin, Bhutan, Bolivia, Botswana, Brunei, Burkina Faso, Burma, Burundi,
Cameroon, Cape Verde, Central Africa, Chad, Chile, Colombia, Congo,
Costa Rica, Cote d'Ivoire, Cyprus, Dominica, Dominican Republic,
Ecuador, El Salvador, Equatorial Guinea, Eritrea, Ethiopia, Fiji,
Gabon, Gambia (The), Ghana, Grenada, Guatemala, Guinea, Guinea-Bissau,
Guyana, Haiti, Honduras, Hong Kong, Indonesia, Jamaica, Kenya,
Kiribati, Korea (Republic of), Lesotho, Liberia, Madagascar, Malawi,
Malaysia, Maldives, Mali, Malta, Marshall Islands, Mauritius,
Micronesia (Federated States of), Mozambique, Namibia, Nauru, Nepal,
Nicaragua, Niger, Nigeria, Palau, Panama, Papua New Guinea, Paraguay,
Peru, Philippines, Rwanda, St. Kitts & Nevis, St. Lucia, St. Vincent
and Grenadines, Sao Tome & Principe, Senegal, Seychelles, Sierra Leone,
Singapore, Slovak Republic, Slovenia, Solomon Islands, Somalia, South
Africa, Sri Lanka, Surinam, Swaziland, Taiwan, Tanzania, Togo, Tonga,
Thailand, Trinidad and Tobago, Tuvalu, Uganda, Uruguay, Venezuela,
Western Sahara, Western Samoa, Zaire, Zambia, and Zimbabwe.
(2) Eligible computers. The computers eligible for License
Exception CTP to Tier 2 destinations are those having a CTP greater
than 2,000 MTOPS, but less than or equal to 20,000 MTOPS.
(d) * * *
(2) Eligible computers. The computers eligible for License
Exception CTP to Tier 3 destinations are those having a CTP greater
than 2,000 MTOPS, but less than or equal to 12,300 MTOPS for civil end-
users and end-uses. Beginning on January 23, 2000, computers having a
CTP greater than 2,000 MTOPS but less than or equal to 6,500 MTOPS are
eligible for License Exception CTP to military end-users and end-uses
subject to the restrictions in paragraph (d)(3) of this section.
(3) Eligible exports. Only exports and reexports to permitted end-
users and end-uses located in countries in Computer Tier 3. License
Exception CTP does not authorize exports and reexports to Computer Tier
3 for nuclear, chemical, biological, or missile end-users and end-uses
and military end-users and end-uses subject to license requirements
under Sec. 744.2, Sec. 744.3, 0Sec. 744.4, Sec. 744.5, and Sec. 744.12
of the EAR. Such exports and reexports will continue to require a
license and will be considered on a case-by-case basis. Retransfers to
defined proliferation end-users and end-uses in eligible countries is
strictly prohibited without prior authorization.
(4) * * *
(5) NDAA notification--(i) General requirement. The National
Defense Authorization Act (NDAA) of FY98 enacted on November 18, 1997
requires advance notification of certain exports and reexports of
computers to Computer Tier 3 countries. Prior to January 23, 2000,
advance notification is required for all exports and reexports of
computers with a CTP between 2,000 and 12,300 MTOPS to Computer Tier 3
destinations. Beginning on January 23, 2000, advance notification is
required for all exports and reexports of computers with a CTP between
6,500 and 12,300 MTOPS to Computer Tier 3 destinations. For each such
transaction destined to Computer Tier 3, prior to using License
Exception CTP, you must first notify BXA by submitting a completed
Multipurpose Application Form (BXA-748P). The Multipurpose Application
Form must be completed including all information required for a license
application according to the instructions described in Supplement No. 1
to part 748 of the EAR, with two exceptions. You (the applicant as
listed in Block 14) shall in Block 5 (Type of Application) mark the box
``Other.'' This designator will permit BXA to route the NDAA notice
into a special processing procedure. (Blocks 6 and 7, regarding support
documentation, may be left blank.) You must also provide a notice using
this procedure prior to exporting or reexporting items that you know
will be used to enhance beyond 2,000 MTOPS the CTP of a previously
exported or reexported computer. Beginning on January 23, 2000, you
must provide a notice using this
[[Page 42012]]
procedure prior to exporting or reexporting items that you know will be
used to enhance beyond 6,500 MTOPS the CTP of a previously exported or
reexported computer. BXA will not initiate the registration of an NDAA
notice unless all information on the Multipurpose Application form is
complete.
* * * * *
(v) Post-shipment verification. This section outlines special post-
shipment reporting requirements for exporters of computers with a CTP
over 2,000 MTOPS to destinations in Computer Tier 3 under the NDAA.
These reporting requirements also apply when you know that the items
being exported will be used to enhance beyond 2,000 MTOPS the CTP of a
previously exported or reexported computer. Such reports must be
submitted in accordance with the provisions of this paragraph
(d)(5)(v), and records of such exports subject to the post-shipment
reporting requirements of this section, must be kept in accordance with
part 762 of the EAR.
* * * * *
Sec. 740.11 [Amended]
8. Section 740.11 is amended by revising the phrase ``10,000
MTOPS'' in paragraphs (a)(2)(ii) and (iii) and in paragraph (c)(2)(i)
to read ``20,000 MTOPS''.
9. Supplement No. 1 to section 740.11 is amended by revising the
phrase ``10,000 MTOPS'' in paragraphs (a)(1)(ii), (a)(1)(iii),
(b)(1)(ii), and (b)(1)(iii) to read ``20,000 MTOPS''.
PART 742--[AMENDED]
10. Section 742.12 is amended by revising the phrase ``greater than
10,000'' in paragraph (b)(2)(i) to read ``greater than 20,000''; by
revising the phrase ``to military end-users and end-uses and to
nuclear, chemical, biological, or missile end-users and end-uses
defined in part 744 of the EAR'' in paragraph (b)(3)(i)(A) to read ``to
nuclear, chemical, biological, or missile end-users and end-uses and
military end-users and end-uses subject to license requirements under
Sec. 744.2, Sec. 744.3, Sec. 744.4, Sec. 744.5, and Sec. 744.12 of the
EAR'' by revising the phrase ``to military end-users and end-uses and
nuclear, chemical, biological, or missile end-users and end-uses
defined in part 744 of the EAR'' in paragraph (b)(3)(ii) to read ``to
nuclear, chemical, biological, or missile end-users and end-uses and
military end-users and end-uses subject to license requirements under
Sec. 744.2, Sec. 744.3, Sec. 744.4, Sec. 744.5, and Sec. 744.12 of the
EAR''; and revising paragraphs (b)(3)(i)(B) and (C) to read as follows:
* * * * *
Sec. 742.12 High performance computers.
* * * * *
(b) * * *
(3) * * *
(i) * * *
(B) A license is required to export or reexport computers with a
CTP greater than 12,300 MTOPS for civilian end-users and end-uses in
countries in Computer Tier 3. Prior to January 23, 2000, a license is
required to export or reexport computers having a CTP greater than
2,000 MTOPS to military end-users and end-uses in Computer Tier 3.
Beginning on January 23, 2000, a license is required to export or
reexport computers having a CTP greater than 6,500 MTOPS to military
end-users and end-uses in Computer Tier 3.
(C) Prior to January 23, 2000, a license may be required to export
or reexport computers with a CTP greater than 2,000 MTOPS to countries
in Computer Tier 3 pursuant to the NDAA (see Sec. 740.7(d)(5) of the
EAR). Beginning on January 23, 2000, a license may be required to
export or reexport computers with a CTP greater than 6,500 MTOPS to
countries in Computer Tier 3 pursuant to the NDAA (see Sec. 740.7(d)(5)
of the EAR).
* * * * *
Dated: July 27, 1999.
Iain S. Baird,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 99-19644 Filed 8-2-99; 8:45 am]
BILLING CODE 3510-33-P