2011-12803. Removal and Modifications for Persons Listed Under Russia on the Entity List

AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Final rule.

SUMMARY:

This final rule amends the Export Administration Regulations (EAR) by removing one and revising two Russian entries on the Entity List (Supplement No. 4 to Part 744). This final rule removes the Federal Atomic Power of Russia (Rusatom) (now known as the Russian State Corporation of Atomic Energy (Rosatom)) entry from the Entity List and adds language clarifying that both the All-Russian Scientific Research Institute of Technical Physics (VNIITF) and the All-Russian Scientific Research Institute of Experimental Physics (VNIIEF), which are Rosatom components, remain on the Entity List. In addition, this rule adds additional aliases and revises some of the existing aliases for the two Russian entries that are being retained on the Entity List. These changes will better inform exporters, reexporters, and transferors of the scope of these Entity List-based license requirements.

The Entity List provides notice to the public that certain exports, reexports, and transfers (in-country) to parties identified on the Entity List require a license from the Bureau of Industry and Security (BIS) and that availability of license exceptions in such transactions is limited.

DATES:

Effective Date: This rule is effective May 24, 2011.

FOR FURTHER INFORMATION CONTACT:

Karen Nies-Vogel, Chair, End-User Review Committee, Office of the Assistant Secretary, Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: [phone], Fax: [phone], E-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

Background

The Entity List provides notice to the public that certain exports, reexports, and transfers (in-country) to entities identified on the Entity List require a license from the Bureau of Industry and Security (BIS) and that the availability of license exceptions in such transactions is limited. Entities are placed on the Entity List on the basis of certain sections of part 744 (Control Policy: End-User and End-Use Based) of the EAR.

The End-User Review Committee (ERC), composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, when appropriate, the Treasury, makes all decisions to make additions to, removals from and other changes to the Entity List. The ERC makes all decisions to add an entry to the Entity List by majority vote and all decisions to remove or modify an entry by unanimous vote. The Departments represented on the ERC approved these changes to the Entity List.

Entity List Decisions

In recognition of the bilateral partnership between the United States and Russia, a policy decision was made by the Departments represented on the ERC to clarify the Russian entries on the Entity List by removing one and revising two Russian entities listed on the Entity List. The decision implemented by this final rule includes removing the Federal Atomic Power of Russia (Rusatom) (which is now known as the Russian State Corporation of Atomic Energy (Rosatom)) as an individual entry on the Entity List and adding language to clarify that two specified Russian entries (i.e., the All-Russian Scientific Research Institute of Technical Physics (VNIITF) and the All-Russian Scientific Research Institute of Experimental Physics (VNIIEF)) which are Rosatom components, are both remaining on the Entity List. These revisions further clarify that VNIITF and VNIIEF are the only Rosatom components remaining on the Entity List. This language is being added to clarify that neither Rosatom at locations outside of Snezhinsk and Sarov nor any of its components or subsidiaries located outside of Snezhinsk and Sarov are subject to the Entity List's supplemental licensing requirements and policies.

In addition, this rule adds other aliases and revises some of the existing aliases for the two Russian entries that are being retained on the Entity List. These changes will better inform exporters, reexporters, and transferors of the scope of these Entity List-based license requirements.

A. Removal From the Entity List

This rule implements a policy decision made by the Departments represented on the ERC to remove one Russian entity from the Entity List. Specifically, this rule removes the Federal Atomic Power of Russia (Rusatom), which is now known as the Russian State Corporation of Atomic Energy (Rosatom) from the Entity List. However, VNIITF and VNIIEF will remain on the Entity List. Moreover, this rule adds and revises particular aliases of VNIITF and VNIIEF to the Entity List to better assist exporters, reexporters and transferors in identifying these two entities on the Entity List.

This rule removes the following person located in Russia from the Entity List:

Russia

(1) Federal Atomic Power of Russia (Rusatom) (any entities, institutes, or centers associated with), a.k.a. the following three aliases:

—Federal Atomic Agency (FAAE);

—MINATOM; and

—Ministry of Atomic Power and Industry (MAPI).

Located in either Snezhinsk or Kremlev (Sarov).

The removal of this entity from the Entity List eliminates the existing license requirements in Supplement No. 4 to part 744 for exports, reexports and transfers (in-country) to this entity, although those licensing requirements remain in place for VNIITF and VNIIEF. Moreover, the removal of this entity from the Entity List does not relieve persons of other obligations under part 744 of the EAR or under other parts of the EAR. Neither the removal of an entity from the Entity List nor the removal of Entity List-based license requirements relieves persons of their obligations under General Prohibition 5 in section 736.2(b)(5) of the EAR which provides that, “you may not, without a license, knowingly export or reexport any item subject to the EAR to an end-user or end-use that is prohibited by part 744 of the EAR.” Nor do these removals relieve persons of their obligation to apply for export, reexport or in-country transfer licenses required by other provisions of the EAR. BIS strongly urges the use of Supplement No. 3 to part 732 of the EAR, “BIS's `Know Your Customer' Guidance and Red Flags,” when persons are involved in transactions that are subject to the EAR.

B. Modifications to the Entity List

As noted above, this rule is removing the Russian entity Rusatom, which is now known as Rosatom, from the Entity List. However, and also as noted above, because Rosatom has components (VNIITF and VNIIEF) located in Snezhinsk and Sarov that will remain on the Entity List, this final rule specifies that VNIITF and VNIIEF will remain on the Entity List.

In addition, the changes in the final rule include adding additional aliases and revising some of the existing aliases for VNIITF and VNIIEF to better assist exporters, reexporters and transferors in identifying these two entities on the Entity List. Specifically, this rule revises the following two persons on the Entity List:

Note:

The asterisks below indicate where revisions are being made to these two Russian entries on the Entity List.

Russia

(1) *All-Russian Scientific Research Institute of Technical Physics (VNIITF), a.k.a., the following eight aliases:

*—Vserossiyskiy Nauchno-Issledovatelskiy Institut Tekhnicheskoy Fiziki;

*—Russian Federal Nuclear Center-VNIITF (RFNC-VNIITF);

*—Kasli Nuclear Weapons Development Center;

*—Institute of Technical Physics;

*—Zababakhin Institute;

*—ARITP (All Russian Institute for Technical Physics);

—Federal State Unitary Enterprise Russian Federal Nuclear Center—Academician E.I. Zababkhin All-Russian Scientific Research Institute of Technical Physics (FGUPRFYaTs-VNIITF)

—Chelyabinsk—70,

(Address: P.O. Box 245, 456770, Snezhinsk, Chelyabinsk Region Russia); and

*Any nuclear-related entities, institutes or centers located in Snezhinsk.

(2) *All-Russian Scientific Research Institute of Experimental Physics (VNIIEF), a.k.a., the following nine aliases:

*—Vserossiyskiy Nauchno-Issledovatelskiy Institut Eksperimentalnoy Fiziki;

*—Russian Federal Nuclear Center-VNIIEF (RFNC-VNIIEF);

*—Institute of Experimental Physics;

*—ARIEP (All Russian Institute for Experimental Physics);

—Khariton Institute;

—Sarov Nuclear Weapons Plant;

—Avangard Electromechanical Plant;

—Federal State Unitary Enterprise Russian Federal Nuclear Center—All Russian Scientific Research Institute of Experimental Physics (FGUPRFNCs VNIIEF)

—Arzamas—16,

(Address: 37 Mira Ave. Sarov, Nizhny Novgorod Region, 607188 Russia); and

* Any nuclear-related entities, institutes or centers located in Sarov (Kremlev).

A BIS license is required for the export, reexport or transfer (in-country) of any item subject to the EAR to the persons described above, including any transaction in which this listed entity will act as purchaser, intermediate consignee, ultimate consignee, or end-user of the items. This listing of these entities also prohibits the use of license exceptions (see part 740 of the EAR) for exports, reexports and transfers (in-country) of items subject to the EAR involving this entity.

Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as extended by the Notice of August 12, 2010, 75 FR 50681 (August 16, 2010), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act.

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 designated a “significant regulatory action” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.

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 the OMB under control numbers 0694-0088, “Multi-Purpose Application,” which carries a burden hour estimate of 58 minutes to prepare and submit form BIS-748. Miscellaneous and recordkeeping activities account for 12 minutes per submission. Total burden hours associated with the Paperwork Reduction Act and Office and Management and Budget control number 0694-0088 are not expected to increase as a result of this rule. You may send comments regarding 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 e-mail to [e-mail], or by fax to [phone].

3. This rule does not contain policies with Federalism implications as that term is defined in 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 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)). The U.S. Government's original basis for adding the entities affected by this rule to the Entity List was the entities' involvement in activities contrary to U.S. national security or foreign policy interests. BIS implements this rule to further protect U.S. national security and foreign policy interests by preventing items from being exported, reexported or transferred (in-country) to these persons listed on the Entity List by making clarifications to the existing entries to inform exporters, reexporters and persons making transfers (in-country) of the intended scope of the license requirements for these listed persons. This action does this by clarifying the listings of VNIITF and VNIIEF, clarifying the names of existing aliases, and adding aliases for the listed persons. If this rule were delayed to allow for notice and comment and a delay in effective date, there is a chance that certain exporters, reexporters and persons making transfers (in-country) to these listed persons may inadvertently export, reexport or transfer (in-country) to a listed person on the Entity List because the exporter, reexporter or person making the transfer (in-country) did not realize the listed person was subject to the Entity List-based license requirement because of perceived ambiguity regarding the listed person, such as a perceived ambiguity resulting from the use of an alias by a listed person. There is also a chance an exporter, reexporter or person making a transfer (in-country) may turn away a potential export, reexport, or transfer (in-country) because the customer incorrectly appeared to be within the scope of a listed person on the Entity List, thereby harming U.S. economic interests. The clarification of language provided in this rule may make clear that the person was not subject to an Entity List-based license requirement. For these reasons there is a public interest that these changes be implemented as a final action. 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.

List of Subjects in 15 CFR Part 744

• Exports
• Reporting and recordkeeping requirements
• Terrorism

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

PART 744—[AMENDED]

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 12, 2010, 75 FR 50681 (August 16, 2010); Notice of November 4, 2010, 75 FR 68673 (November 8, 2010); Notice of January 13, 2011, 76 FR 3009 (January 18, 2011).

2. Supplement No. 4 to part 744 is amended:

a. By removing under Russia, the Russian entity, Federal Atomic Power of Russia (Rusatom); and

b. By revising, under Russia, the following two Russian entities: All-Russian Scientific Research Institute of Technical Physics (VNIITF) and All-Russian Scientific Research Institute of Experimental Physics (VNIIEF).

The revisions read as follows:

Supplement No. 4 to Part 744—Entity List

Country	Entity	License requirement	License review policy	Federal Register citation
*         *         *         *         *         *         *
RUSSIA	All-Russian Scientific Research Institute of Technical Physics (VNIITF), a.k.a., the following eight aliases:	For all items subject to the EAR	Case-by-case basis	62 FR 35334, 6/30/97 66 FR 24267, 5/14/01 75 FR 78883, 12/17/10.
	All-Russian Scientific Research Institute of Experimental Physics (VNIIEF), a.k.a., the following nine aliases:	For all items subject to the EAR.	Case-by-case basis	62 FR 35334, 6/30/97 66 FR 24267, 5/14/01 75 FR 78883, 12/17/10.
	*         *         *         *         *         *         *

Dated: May 19, 2011.

Kevin J. Wolf,

Assistant Secretary for Export Administration.