01-5007. Exports to the Federal Republic of Yugoslavia; Revision of Foreign Policy Controls

AGENCY:

Bureau of Export Administration, Commerce.

ACTION:

Final rule.

SUMMARY:

This final rule amends the Export Administration Regulations (EAR) by removing the additional license requirements imposed on Serbia in May 1999. However, a license is required for all exports and reexports by U.S. persons of any item subject to the EAR to persons listed pursuant to Executive Order 13088, as amended by Executive Order 13192 of January 17, 2001. The persons subject to sanctions under amended Executive Order 13088 include Slobodan Milosevic, his family, his close associates, and those indicted for war crimes. These sanctioned persons are identified on the list of specially designated nationals and blocked persons maintained by the Department of the Treasury's Office of Foreign Assets Control and identified by the bracketed suffix initials [FRYM]. Controls are maintained under the EAR on arms and related materiel to the Federal Republic of Yugoslavia (Serbia and Montenegro) consistent with United Nations Security Council Resolution 1160 of March 3, 1998.

DATES:

This rule is effective March 1, 2001.

FOR FURTHER INFORMATION CONTACT:

Brian Nilsson, Office of Strategic Trade and Foreign Policy Controls, Telephone: [phone].

SUPPLEMENTARY INFORMATION:

Background

Executive Order 13088 of June 9, 1998, as amended by Executive Order 13121 on April 30, 1999, imposed, among other measures, comprehensive U.S. export and reexport prohibitions on the Federal Republic of Yugoslavia (Serbia and Montenegro). On May 4, 1999, the Bureau of Export Administration (BXA) issued a final rule imposing a license requirement for exports and reexports to Serbia of all items subject to the EAR and a case-by-case review of applications with a presumption of denial for other than humanitarian items. These measures were intended to deter Serbia's human rights offenses against ethnic Albanians in Kosovo and to prevent the expansion of the ethnic conflict. BXA's May 4, 1999 rule did not impose similar comprehensive controls on exports or reexports to Montenegro.

Effective January 19, 2001, Executive Order 13192 amended Executive Order 13088 to revoke previously imposed prohibitions, including those on exports and reexports. BXA is taking action under its export control authorities consistent with amended Executive Order 13088. Specifically, this rule removes the additional license requirements imposed under the EAR by the May 4, 1999, rule on exports and reexports to Serbia, and thus restores Serbia to the export control status it had prior to May 4, 1999. However, persons listed in the Annex to Executive Order 13192, as well as persons designated by the Secretary of the Treasury, in consultation with the Secretary of State pursuant to that order, are subject to sanctions administered by the Department of the Treasury's Office of Foreign Assets Control. Exports and reexports of any item subject to the EAR by a U.S. person to a person designated pursuant to amended Executive Order 13088 are subject to a license requirement and a licensing policy of denial. These sanctioned persons are included on a list of specially designated nationals and blocked persons (SDNs) maintained by the Department of the Treasury, Office of Foreign Assets Control (OFAC) and identified by the bracketed suffix initials [FRYM]. To obtain additional information regarding the list of SDNs, contact OFAC at telephone number 202/622-2520. BXA provisions regarding these sanctioned persons are included in new section 744.16 of the EAR.

This rule eliminates the distinctions previously applicable to Serbia, Kosovo and Montenegro, which had been established by the final rule of November 5, 1999, for export control purposes. With the publication of this rule, Serbia (including the province of Kosovo) and Montenegro will be listed together as the Federal Republic of Yugoslavia (Serbia and Montenegro) for License Exception eligibility purposes, as members of “Country Group B” (see Supplement No. 1 to part 740), “Computer Tier 3” (see § 740.7), and in the “Commerce Country Chart” (see Supplement No. 1 part 738).

Note that the arms embargo mandated by United Nations Security Council Resolution 1160 of March 3, 1998 remains in effect. This embargo prohibits the sale or supply of arms and arms-related items to the Federal Republic of Yugoslavia (Serbia and Montenegro), including those controlled under the EAR for crime control and regional stability reasons.

A foreign policy report on the new controls imposed by this rule on designated persons pursuant to amended Executive Order 13088 was submitted to the Congress on February 23, 2001.

Rulemaking Requirements

1. This rule was determined to be not significant for purposes of Executive Order 12866.

2. This rule involves a collection of information subject to the Paperwork Reduction Act (P.R.A.) of 1995 (U.S.C. 3501 et seq.). This collection has been approved by the Office of Management and Budget under control number 0694-0088, “Multi-Purpose Application,” which carries a burden hour estimate of 45 minutes per manual submission on form BXA-748P and 40 minutes per electronic submission. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the P.R.A., unless that collection of information displays a currently valid OMB Control Number.

3. This rule does not contain policies with Federalism implications sufficient to warrant preparation of a Federalism assessment under Executive Order 13132

4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military and foreign affairs function of the United States (Sec. 5 U.S.C. 553(a)(1)). Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this final rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under 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. 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 Sheila Quarterman, Office of Exporter Services, Bureau of Export Administration, Department of Commerce, P.O. Box 273, Washington, DC 20044.

List of Subjects

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

15 CFR Part 744

• Exports
• Foreign trade
• Reporting and recordkeeping requirements

15 CFR Part 746

• Embargoes
• Exports
• Foreign trade
• Reporting and recordkeeping requirements

Accordingly, parts 738, 740, 744, and 746 of the Export Administration Regulations (15 CFR Parts 730-799) are amended as follows:

1. The authority citation for part 738 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; Public Law No. 106-508; 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; Notice of August 3, 2000 (65 FR 48347, August 8, 2000).

2. The authority citation for part 740 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; Public Law No. 106-508; 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; Notice of August 3, 2000 (65 FR 48347, August 8, 2000).

3. The authority citation for part 744 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; Public Law No. 106-508; 50 U.S.C. 1701 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, 58 FR 33181, 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; E.O. 13088, 63 FR 32109, 3 CFR, 1998 Comp., p. 191; E.O. 13121 of April 30, 1999, 64 FR 24021 (May 5, 1999); E.O. 13192 of January 17, 2001, 66 FR 7379 (January 23, 2001); Notice of November 12, 1998, 63 FR 63589, 3 CFR, 1998 Comp., p. 305; Notice of August 3, 2000 (65 FR 48347, August 8, 2000).

4. The authority citation for Part 746 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; Public Law No. 106-508; 50 U.S.C. 1701 et seq.; 22 U.S.C. 287c; 22 U.S.C. 6004; 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. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; Notice of August 3, 2000 (65 FR 48347, August 8, 2000).

PART 738—[AMENDED]

5. Supplement No. 1 to Part 738 is amended by removing the entries “Kosovo (Serbian province of)” and “Montenegro”, by revising the entry heading “Serbia (not including Kosovo)” to read “Yugoslavia (Serbia and Montenegro), Federal Republic of”, and by revising the newly designated “Yugoslavia (Serbia and Montenegro), Federal Republic of” row, to read as follows:

Supplement No. 1 to Part 738—(Commerce Country Chart)

Commerce Country Chart—Reason for Control

Countries	Chemical & biological weapons			Nuclear nonproliferation		National security		Missile tech	Regional stability		Firearms convention	Crime control			Anti-terrorism
	CB 1	CB 2	CB 3	NP 1	NP 2	NS 1	NS 2	MT 1	RS 1	RS 2	FC 1	CC 1	CC 2	CC 3	AT 1	AT 2
*         *         *         *         *         *         *
Yugoslavia (Serbia and Montenegro), Federal Republic of1	X	X		X		X	X	X	X	X		X	X	X
*         *         *         *         *         *       *
1 This country is subject to United Nations Sanctions. See part 746 of the EAR for additional OFAC licensing requirements thatm ay apply to your proposed transaction.

PART 740—[AMENDED]

6. Section 740.7 is amended by revising paragraph (d)(1) to read as follows:

§ 740.7

Computers (CTP).

* * * * *

(d) Computer Tier 3—(1) Eligible countries. The countries that are eligible to receive exports and reexports under this License Exception are Afghanistan, Albania, Algeria, Andorra, Angola, Armenia, Azerbaijan, Bahrain, Belarus, Bosnia & Herzegovina, Bulgaria, Cambodia, China (People's Republic of), Comoros, Croatia, Djibouti, Egypt, and Yugoslavia (Serbia and Montenegro), Federal Republic of, Georgia, India, Israel, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Laos, Latvia, Lebanon, Lithuania, Macau, Macedonia (The Former Yugoslav Republic of), Mauritania, Moldova, Mongolia, Morocco, Oman, Pakistan, Qatar, Russia, Saudi Arabia, Tajikistan, Tunisia, Turkmenistan, Ukraine, United Arab Emirates, Uzbekistan, Vanuatu, Vietnam, Yemen and Yugoslavia. As of May 19, 2001, Lithuania moves to Computer Tier 1.

* * * * *

7. Supplement No. 1 to part 740 is amended by removing “Kosovo (Serbian province of)” and “Montenegro” from the list of “Country Group B” countries and by adding, in alphabetical order, “Yugoslavia (Serbia and Montenegro), Federal Republic of”.

PART 744—AMENDED

8. Part 744 is amended by adding new section 744.16 to read as follows:

§ 744.16

Restrictions on exports and reexports by U.S. persons to specially designated persons on the list of Specially Designated Nationals identified by the bracketed suffix initials [FRYM].

BXA maintains restrictions on exports and reexports of any item subject to the EAR by U.S. persons to persons designated pursuant to Executive Order 13088 of June 9, 1998, as amended by Executive Order 13192 of January 17, 2001 (Executive Order 13088, as amended). These designated persons include individuals listed in the Annex to Executive Order 13192, as well as persons designated by the Secretary of the Treasury, in consultation with the Secretary of State pursuant to that order (e.g., the former President of the Federal Republic of Yugoslavia, Slobodan Milosevic; his close associates; persons determined to be under open indictment by the International Criminal Tribunal for the former Yugoslavia; and persons determined to have sought, or to be seeking, to maintain or reestablish illegitimate control over the political processes or economic resources of the Federal Republic of Yugoslavia (Serbia and Montenegro)). Persons designated pursuant to Executive Order 13088, as amended, are included on the list of Specially Designated Nationals maintained by the Department of the Treasury's Office of Foreign Assets Control (OFAC) and identified by the bracketed suffix initials [FRYM]. The requirements set forth in this section further the objectives of Executive Order 13088, as amended.

(a) License requirements. (1) A license is required for all exports and reexports of any item subject to the EAR by a U.S. person to a person on the list of Specially Designated Nationals maintained by OFAC and identified by the bracketed initials [FRYM].

(2) A U.S. person may also be required to seek separate authorization from OFAC for an export or reexport to a designated person identified by the bracketed initials [FRYM].

(b) License policy. Applications for exports and reexports of any item subject to the EAR by a U.S. person to a Specially Designated National identified by the bracketed initials [FRYM] will be reviewed with a general policy of denial.

PART 746—[AMENDED]

9. Section 746.9 is revised to read as follows:

§ 746.9

The Federal Republic of Yugoslavia (Serbia and Montenegro).

United Nations Security Council Resolution 1160 of March 31, 1998 provides that all member States shall prevent the sale or supply to the Federal Republic of Yugoslavia, including Kosovo, by their nationals or from their territories or using their flag vessels and aircraft, of arms and related materiel of all types, such as weapons and ammunition, military vehicles and equipment and spare parts for the aforementioned, and shall prevent the arming and training for terrorist activities there. Executive Order 12918 of May 26, 1994 (3 CFR, 1994 comp., p. 899) authorizes the Secretary of State and the Secretary of Commerce, under section 5 of the United Nations Participation Act and other authorities available to the respective Secretaries, to take all actions necessary to implement any arms embargo mandated by resolution of the UNSC.

(a) License requirements. (1) Under Executive Order 12918 of May 26, 1994, and in conformity with UNSC Resolution 1160 of March 31, 1998, an embargo applies to the sale or supply to the Federal Republic of Yugoslavia (Serbia and Montenegro), of arms and related materiel of all types and regardless of origin, such as weapons and ammunition, military vehicles and equipment, and spare parts for such items. You will, therefore, need a license for the sale, supply or export to the Federal Republic of Yugoslavia (Serbia and Montenegro) from the United States of embargoed items, as listed in paragraphs (a)(1)(i) and (ii) of this section. You will also need a license for the sale, supply, export or reexport to the Federal Republic of Yugoslavia (Serbia and Montenegro) of such items by any U.S. person in any foreign country or other location. (Reexport controls imposed by this embargo apply only to reexports by U.S. persons. Reexport controls on U.S.-origin items to the Federal Republic of Yugoslavia (Serbia and Montenegro) set forth in other parts of the EAR remain in effect.) You will also need a license for the use of any U.S.-registered aircraft or vessel to supply or transport to the Federal Republic of Yugoslavia (Serbia and Montenegro) any such items. These requirements apply to the following items, regardless of origin.

(i) Crime Control and Detection Equipment as identified on the CCL under CC Columns No. 1, 2 or 3 in the Country Chart column of the “License Requirements” section of the applicable ECCN.

(ii) Items described by ECCNs ending in “018”; and 0A978, 0A979, 0A982, 0A983, 0A984, 0A985, 0A986, 0A987, 0A988, 0A989, 0B986, 0E982, 0E984, 1A005, 1A984, 1A985, 1C992.b.-k., 2A993, 3A980, 3A981, 3D980, 3E980, 4A980, 4D980, 4E980, 5A980, 6A002, 6A003.b.3 and b.4, 6E001, 6E002, 9A980, and 9A991.a.

(2) Date of embargo. The licensing requirements in paragraph (a)(1) of this section were effective on July 14, 1998, except for ECCN 0E982, which took effect on September 13, 2000.

(b) Licensing policy. Applications for export or reexport of all items listed in paragraphs (a)(1)(i) and (ii) of this section are subject to a general policy of denial. Consistent with United Nations Security Council Resolution 1160, this embargo is effective notwithstanding the existence of any rights or obligations conferred or imposed by any international agreement or any contract entered into or any license or permit granted prior to the appropriate date referred to in paragraph (a)(2) of this section, except to the extent provided in regulations, orders, directives or licenses that may be issued in the future under Executive Order 12918 or under the EAR.

(c) Related controls. The Department of State, Office of Defense Trade Controls, maintains related controls on arms and military equipment under the International Traffic in Arms Regulations (22 CFR parts 120 through 130). You should also contact the Department of the Treasury's Office of Foreign Assets Control concerning any restrictions which might apply to U.S. persons involving financial transactions or dealings with the Federal Republic of Yugoslavia (Serbia and Montenegro).

Dated: February 26, 2001.

Matthew S. Borman,

Deputy Assistant Secretary for Export Administration.