[Federal Register Volume 80, Number 152 (Friday, August 7, 2015)]
[Rules and Regulations]
[Pages 47402-47405]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-19274]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 744 and 746

[Docket No. 150610514-5514-01]
RIN 0694-AG66


Russian Sanctions: Addition to the Entity List To Prevent 
Violations of Russian Industry Sector Sanctions

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: This final rule amends the Export Administration Regulations 
(EAR) to further implement U.S. sanctions on certain Russian energy 
projects. Specifically, in this rule, the Bureau of Industry and 
Security (BIS) amends the EAR by adding a Russian oil and gas field, 
the Yuzhno-Kirinskoye Field located in the Sea of Okhotsk, to the 
Entity List. This Russian field is reported to contain substantial 
reserves of oil in addition to reserves of gas. The U.S. Government has 
determined, therefore, that exports, reexports, and transfers (in-
country) of all items subject to the EAR to this Russian field by any 
person without first obtaining a BIS license present an unacceptable 
risk of use in, or diversion to, the activities specified in the 
Russian industry sector sanctions. Thus, as part of the BIS ``is 
informed'' process, this final rule adds this Russian field to the 
Entity List to further implement the Russian industry sector sanctions. 
This Russian field will be listed on the Entity List under the 
destination of Russia. This final rule clarifies the introductory text 
of the Entity List to specify that the embargoes and other special 
controls part of the EAR is also used to add entities to the Entity 
List. Lastly, this final rule makes a change to the Russian industry 
sector sanctions by clarifying the additional prohibition on those 
informed by BIS also includes end-uses that are within the scope of the 
Russian Industry sector sanctions.

DATES: This rule is effective August 7, 2015.

FOR FURTHER INFORMATION CONTACT: For this Entity List-related change, 
contact the Chair, End-User Review Committee, Office of the Assistant 
Secretary, Export Administration, Bureau of Industry and Security, 
Department of Commerce, Phone: (202) 482-5991, Fax: (202) 482-3911, 
Email: ERC@bis.doc.gov. For the Russian industry sector sanctions 
referred to in this rule, contact Eileen Albanese, Director, Office of 
National Security and Technology Transfer Controls, Bureau of Industry 
and Security, Department of Commerce, Phone: (202) 482-0092, Fax: (202) 
482-482-3355, Email: rpd2@bis.doc.gov. For emails, include ``Russia'' 
in the subject line.

SUPPLEMENTARY INFORMATION:

Background

    This final rule amends the Export Administration Regulations (EAR) 
to further implement U.S. sanctions on certain Russian energy projects. 
Specifically, in this rule, the Bureau of Industry and Security (BIS) 
amends the EAR by adding a Russian oil and gas field, the Yuzhno-
Kirinskoye Field located in the Sea of Okhotsk, to the Entity List.
    This Russian field is reported to contain substantial reserves of 
oil in addition to reserves of gas. The U.S. Government has determined, 
therefore, that exports, reexports, and transfers (in-country) of all 
items subject to the EAR to this Russian field by any person without 
first obtaining a BIS license present an unacceptable risk of use in, 
or diversion to, the activities specified in the Russian industry 
sector sanctions. Thus, as part of the BIS ``is informed'' process, 
this final rule adds this Russian field to the Entity List to further 
implement the Russian industry sector sanctions. This Russian field 
will be listed on the Entity List under the destination of Russia.

Entity List

    The Entity List (Supplement No. 4 to Part 744) identifies entities 
and other persons reasonably believed to be involved, or to pose a 
significant risk of being or becoming involved, in activities contrary 
to the national security or foreign policy interests of the United 
States. The EAR imposes

[[Page 47403]]

additional licensing requirements on, and limits the availability of 
most license exceptions for, exports, reexports, and transfers (in-
country) to those listed. The ``license review policy'' for each listed 
entity or other person is identified in the License Review Policy 
column on the Entity List and the impact on the availability of license 
exceptions is described in the Federal Register notice adding entities 
or other persons to the Entity List. BIS places entities and other 
persons on the Entity List pursuant to sections of part 744 (Control 
Policy: End-User and End-Use Based) and part 746 (Embargoes and Other 
Special Controls) of the EAR.
    The ERC, composed of representatives of the Departments of Commerce 
(Chair), State, Defense, Energy, and, where appropriate, the Treasury, 
rules on additions to, removals from, and other modifications to the 
Entity List. The ERC makes decisions to add an entry to the Entity List 
by majority vote and decisions to remove or modify an entry by 
unanimous vote.

Addition to the Entity List Consistent With Executive Order 13662

    Under Sec.  746.5(a)(2), BIS in this final rule is adding a Russian 
oil and gas field to the Entity List and informing the public of a 
license requirement for exports, reexports, or transfers (in-country) 
of any item subject to the EAR to that location. This Russian field is 
added based on being the site of activities that are described in 
Executive Order 13662 (79 FR 16169), Blocking Property of Additional 
Persons Contributing to the Situation in Ukraine, issued by the 
President on March 20, 2014. This Order expanded the scope of the 
national emergency declared in Executive Order 13660 of March 6, 2014 
and Executive Order 13661 of March 16, 2014. Specifically, Executive 
Order 13662 expanded the scope to include sectors of the Russian 
Federation's economy as may be determined by the Secretary of the 
Treasury, in consultation with the Secretary of State, such as 
financial services, energy, metals and mining, engineering, and defense 
and related materiel. The Department of the Treasury's Office of 
Foreign Assets Control (OFAC), pursuant to Executive Order 13662 and on 
behalf of the Secretary of the Treasury, has designated certain 
entities operating in these sectors.
    The Yuzhno-Kirinskoye Field is being added to the Entity List 
because it is reported to contain substantial reserves of oil. 
Consequently, exports, reexports, and transfers (in-country) of all 
items subject to the EAR to this Russian oil and gas field by any 
person without first obtaining a BIS license has been determined by the 
U.S. Government to present an unacceptable risk of use in, or diversion 
to, the activities specified in paragraph (a)(1) of Sec.  746.5, namely 
exploration for, or production of, oil or gas in Russian deepwater 
(greater than 500 feet) locations. Therefore, a license requirement for 
all items subject to the EAR is warranted.
    License applications for such transactions will be reviewed with a 
presumption of denial because such exports, reexports, and transfers 
(in-country) are for use directly or indirectly in exploration or 
production from a deepwater (greater than 500 feet) project in Russia 
that has the potential to produce oil. In addition, no license 
exceptions are available for exports, reexports, or transfers (in-
country) to the field being added to the Entity List in this rule.
    This final rule adds the following one Russian gas and oil field to 
the Entity List to expand the EAR license requirements in Sec.  746.5:

Russia

    (1) Yuzhno-Kirinskoye Field, in the Sea of Okhotsk.

Clarification to the Introductory Text of the Entity List

    As noted above, BIS places entities on the Entity List based on 
certain sections of part 744 (Control Policy: End-User and End-Use 
Based) and part 746 (Embargoes and Other Special Controls) of the EAR. 
This final rule, as a clarification for this existing BIS policy for 
adding persons to the Entity List, revises the first sentence of the 
introductory text of the Entity List to add a reference to part 746. 
This clarification to the introductory text will make it clear that 
this Supplement lists certain entities subject to license requirements 
for specified items under this part 744 and part 746 of the EAR.

Clarification to Russian Industry Sector Sanctions

    In Sec.  746.5 (Russian industry sector sanctions), this final rule 
revises the second sentence of paragraph (a)(2) for the additional 
prohibition on those informed by BIS to add the term ``end-use'' after 
the term ``end-user.'' This change clarifies that the additional 
prohibition described in this paragraph (a)(2), as part of the BIS ``is 
informed'' process, may be based on an end-user or end-use when BIS 
determines there is an unacceptable risk of use in, or diversion to, 
the activities specified in paragraph (a)(1) of this section in Russia. 
This clarification does not change the scope of Sec.  746.5, but rather 
clarifies the cases in which BIS will use the ``is informed'' process 
to assist exporters, reexporters, and transferors to ``know'' when an 
export, reexport, or transfer (in-country) is subject to the license 
requirements specified in Sec.  746.5.

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 7, 2014, 79 FR 46959 (August 11, 2014), 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, distributive 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 determined to be not significant for 
purposes of Executive Order 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 of 1995 (44 U.S.C. 3501 et seq.) (PRA), 
unless that collection of information displays a currently valid Office 
of Management and Budget (OMB) Control Number. This regulation involves 
collections previously approved by OMB under control number 0694-0088, 
Simplified Network Application Processing System, which includes, among 
other things, license applications and carries a burden estimate of 
43.8 minutes for a manual or electronic submission. Total burden hours 
associated with the PRA and OMB control number 0694-0088 are not 
expected to increase as a result of this rule. You may send comments 
regarding

[[Page 47404]]

the collection of information associated with this rule, including 
suggestions for reducing the burden, to Jasmeet K. Seehra, Office of 
Management and Budget (OMB), by email to Jasmeet_K._Seehra@omb.eop.gov, 
or by fax to (202) 395-7285.
    3. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 13132.
    4. For the Entity List changes in this final rule, the provisions 
of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of 
proposed rulemaking, the opportunity for public comment 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)). BIS implements this rule to protect U.S. foreign 
policy interests by preventing items from being exported, reexported, 
or transferred (in country) for use in, or diversion to, the activities 
specified in the Russian industry sector sanctions at the Russian field 
being added to the Entity List. If this rule were delayed to allow for 
notice and comment and a delay in effective date, then persons working 
on or in the Russian field being added to the Entity List by this 
action would continue to be able to receive items subject to the EAR 
without a license and to conduct activities contrary to the Russian 
industry sector sanctions. In addition, publishing a proposed rule 
would give parties trying to export, reexport, or transfer (in-country) 
to this location notice of the U.S. Government's intention to place 
this Russian field on the Entity List and would create an incentive for 
persons located at this Russian field to accelerate receiving items 
subject to the EAR to conduct activities that are contrary to the to 
the Russian industry sector sanctions, and/or to take steps to set up 
additional aliases and other measures to try to limit the impact of the 
listing on the Entity List. Further, no other law requires that a 
notice of proposed rulemaking and an opportunity for public comment be 
given for this rule. Because a notice of proposed rulemaking and an 
opportunity 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 not 
applicable. Accordingly, no regulatory flexibility analysis is required 
and none has been prepared.
    5. For the clarification to Russian industry sector sanctions and 
clarification to the introductory text of the Entity List, the 
Department finds that there is good cause under 5 U.S.C. 553(b)(B) to 
waive the provisions of the Administrative Procedure Act requiring 
prior notice and the opportunity for public comment because allowing 
for notice and comment would be contrary to the public interest. The 
revisions to Sec.  746.5(a)(2) and the introductory text to Supplement 
No. 4 to Part 744, facilitate public understanding of existing 
interpretations of current EAR provisions, and therefore prior notice 
and the opportunity for public comment would prevent BIS promulgating 
these revisions as soon as possible so that the public will be aware of 
the correct text and meaning of these current EAR provisions.
    BIS finds good cause to waive the 30-day delay in effectiveness 
under 5 U.S.C. 553(d)(3). As mentioned previously, the revisions 
described here made by this rule consist of minor clarifications that 
need to be in place as soon as possible to avoid confusion by the 
public regarding the intent and meaning of these changes to the EAR.
    Because a notice of proposed rulemaking and an opportunity for 
public comment are not required to be given for these amendments 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 not applicable.

List of Subjects

15 CFR Part 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

15 CFR Part 746

    Exports, Reporting and recordkeeping requirements.

    Accordingly, parts 744 and 746 of the Export Administration 
Regulations (15 CFR parts 730-774) are amended as follows:

PART 744--[AMENDED]

0
1. 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 August 7, 2014, 79 FR 46959 
(August 11, 2014); Notice of September 17, 2014, 79 FR 56475 
(September 19, 2014); Notice of November 7, 2014, 79 FR 67035 
(November 12, 2014); Notice of January 21, 2015, 80 FR 3461 (January 
22, 2015).

0
2. Supplement No. 4 to part 744 is amended by:
0
a. Adding introductory text;
0
b. Removing from the table the text below the headings and above the 
entry for ``Afghansistan''; and
0
c. Adding under Russia, in alphabetical order, the entity ``Yuzhno-
Kirinskoye Field, in the Sea of Okhotsk''.
    The additions read as follows:

Supplement No. 4 to Part 744--Entity List

    This Supplement lists certain entities subject to license 
requirements for specified items under this part 744 and part 746 of 
the EAR. License requirements for these entities include exports, 
reexports, and transfers (in-country) unless otherwise stated. This 
list of entities is revised and updated on a periodic basis in this 
Supplement by adding new or amended notifications and deleting 
notifications no longer in effect.

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                                                                              License review    Federal Register
        Country                     Entity             License requirement        policy            citation
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
RUSSIA.................                                         * * * * * *
                         Yuzhno-Kirinskoye Field, in   For all items        Presumption of     80 FR [INSERT FR
                          the Sea of Okhotsk.           subject to the       denial.            PAGE NUMBER]; 8/
                                                        EAR. (See Sec.                          7/15.
                                                        746.5 of the EAR).
                                                                * * * * * *
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[[Page 47405]]

PART 746--[AMENDED]

0
 3. The authority citation for 15 CFR part 746 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. 287c; Sec 1503, Pub. L. 108-11, 117 Stat. 559; 22 U.S.C. 
6004; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12854, 58 FR 
36587, 3 CFR, 1993 Comp., p. 614; E.O. 12918, 59 FR 28205, 3 CFR, 
1994 Comp., p. 899; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., p 168; Presidential 
Determination 2003-23 of May 7, 2003, 68 FR 26459, May 16, 2003; 
Presidential Determination 2007-7 of December 7, 2006, 72 FR 1899 
(January 16, 2007); Notice of August 7, 2014, 79 FR 46959 (August 
11, 2014); Notice of May 6, 2015, 80 FR 26815 (May 8, 2015).

0
4. Section 746.5 is amended by revising paragraph (a)(2) to read as 
follows:


Sec.  746.5  Russian industry sector sanctions.

    (a) * * *
    (2) Additional prohibition on those informed by BIS. BIS may inform 
persons, either individually by specific notice or through amendment to 
the EAR, that a license is required for a specific export, reexport, or 
transfer (in-country) or for the export, reexport, or transfer (in-
country) of specified items to a certain end-user or end-use, because 
there is an unacceptable risk of use in, or diversion to, the 
activities specified in paragraph (a)(1) of this section in Russia. 
Specific notice is to be given only by, or at the direction of, the 
Deputy Assistant Secretary for Export Administration. When such notice 
is provided orally, it will be followed by a written notice within two 
working days signed by the Deputy Assistant Secretary for Export 
Administration. However, the absence of any such notification does not 
excuse persons from compliance with the license requirements of 
paragraph (a)(1) of this section.
* * * * *

    Dated: July 30, 2015.
Eric L. Hirschhorn,
Under Secretary of Commerce for Industry and Security.
[FR Doc. 2015-19274 Filed 8-6-15; 8:45 am]
BILLING CODE 3510-33-P