01-20148. Revisions to the Export Administration Regulations; Country Group E:1; License Exception TMP

AGENCY:

Bureau of Export Administration, Commerce.

ACTION:

Interim final rule.

SUMMARY:

This interim final rule amends the Export Administration Regulations (EAR) by revising Country Group E:1 to include all terrorist-supporting countries, and replacing references to Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria with Country Group E:1 where appropriate. This rule also expands the scope of eligible countries for License Exception TMP for exhibition and demonstration to all countries except the new Country Group E:1, with certain restrictions.

DATES:

This rule is effective August 10, 2001. Comments on this rule must be received on or before September 10, 2001.

ADDRESSES:

Written comments should be sent to Sharron Cook, Regulatory Policy Division, Bureau of Export Administration, Room 2705, 14th Street and Pennsylvania Ave., NW., Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT:

Sharron Cook, Regulatory Policy Division, Bureau of Export Administration, at [phone].

SUPPLEMENTARY INFORMATION:

Background

The Bureau of Export Administration (BXA) is amending the Export Administration Regulations (EAR) to continue its efforts to simplify the EAR and to reflect current business practice and world circumstance. Specifically, this rule amends the EAR by revising the list of countries included in Country Group E:1 in Supplement No. 1 to part 740.

This rule revises Country Group E:1, in Supplement no. 1 to part 740 of the EAR. This country group currently lists the countries subject to United Nations embargo, is revised by listing countries designated by the Department of State as those countries whose governments have repeatedly provided support for acts of international terrorism (Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria). Therefore, this rule removes Angola, Bosnia and Herzegovina, and Rwanda from Country Group E:1, and adds Iran, Sudan and Syria. This rule does not change export control policy or license requirements for these countries or for Angola, Serbia and Montenegro, or Rwanda set forth in parts 742 and 746. This rule also makes conforming changes in § 734.4—De minimis U.S. content, § 740.9—Temporary imports, export, and reexports (TMP), § 740.10—Servicing and replacement of parts and equipment (RPL) by replacing references to those countries with the phrase “Country Group E:1.”

This rule also expands the scope of eligible countries for License Exception TMP for exhibition and demonstration by making Country Group D:1 eligible for this provision. Under License Exception TMP, you may now export or reexport commodities and software for exhibition or demonstration in any country, including countries in Country Group D:1, except a country listed in Country Group E:1, subject to the terms and conditions of License Exception TMP and the restrictions that apply to all License Exceptions in § 740.2 of the EAR.

This rule clarifies that a license exception may be applicable to items for which a license would otherwise be required under General Prohibition one, two, three, or eight.

Rulemaking Requirements

1. This interim final rule has been determined to be not 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 rule involves a collection of information subject to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). This collection has been approved by the Office of Management and Budget under control number 0694-0088.

3. This rule does not contain policies with Federalism impacts 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 participation, and a delay in effective date, are inapplicable because this regulation involves a military and 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 rulemaking and an opportunity for public comment be given for this interim 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.

However, because of the importance of the issues raised by these regulations, this rule is being issued in interim form and BXA will consider comments in the development of the final regulations.

Accordingly, the Department encourages interested persons who wish to comment to do it at the earliest possible time to permit the fullest consideration of their views.

The period for submission of comments will close September 10, 2001. The Department will consider all comments received before the close of the comment period in developing final regulations. Comments received after the end of the comment period will be considered if possible, but their consideration cannot be assured. The Department will not accept public comments accompanied by a request that a part or all of the material be treated confidentially because of its business proprietary nature or for any other reason. The Department will return such comments and materials to the persons submitting the comments and will not consider them in the development of final regulations. All public comments on these regulations will be a matter of public record and will be available for public inspection and copying. In the interest of accuracy and completeness, the Department requires comments be submitted in written form. Oral comments must be followed by written memoranda, which will also be a matter of public record and will be available for public review and copying.

The public record concerning these comments will be maintained in the Bureau of Export Administration, Office of Administration, U.S. Department of Commerce, Room 6883, 14th and Constitution Avenue, NW., Washington, DC 20230; [phone]. This component does not maintain a separate public inspection facility. Requesters should first view BXA's FOIA website (which can be reached through http://www.bxa.doc.gov/​foia). If the records sought cannot be located at this site, or if the requester does not have access to a computer, please call the number above for assistance.

List of Subjects

15 CFR Part 734

• Administrative practice and procedure
• Exports
• Foreign trade

15 CFR Part 740

• Administrative practice and procedure
• Exports
• Foreign trade
• Reporting and Record keeping requirements

Accordingly, parts 734 and 740 of the Export Administration Regulations (15 CFR Parts 730-799) are amended as follows:

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

Authority: 50 U.S.C. app. 2401 et seq.; Pub. L. 106-508; 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. 13206, 66 FR 18397, April 9, 2001; Notice of November 9, 2000, 65 FR 68063, 3 CFR, 2000 Comp., p. 408.

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

Authority: 50 U.S.C. app. 2401 et seq.; Pub. L. 106-508; 50 U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13206, 66 FR 18397, April 9, 2001.

PART 734—[AMENDED]

3. Section 734.4 is amended by revising the introductory text of paragraph (c) to read as follows:

§ 734.4

De minimis U.S. content.

* * * * *

(c) Except as provided in paragraph (a) and (b) of this section for certain computers and items controlled for EI reasons, the following reexports are not subject to the EAR when made to either an embargoed country listed in part 746 of the EAR or to a terrorist-supporting country listed in Country Group E:1 (see Supplement No. 1 to part 740 of the EAR):

* * * * *

PART 740—AMENDED

4. Section 740.1 is amended in paragraph (a) by:

a. Revising the phrase “Prohibition One, Two, or Three,” to read “Prohibition One, Two, Three, or Eight,”, in the first sentence; and

b. Revising the phrase “Prohibitions Four, Seven, Eight, Nine, or Ten,” to read “Prohibitions Four, Seven, Nine, or Ten,” in the last sentence.

5. Section 740.8 is amended by revising the phrase “except Cuba, Libya, North Korea, Iraq, Iran, Syria, and Sudan” to read “except destinations in Country Group E:1 (see Supplement No. 1 to this part).” in paragraph (c).

6. Section 740.9 is amended:

a. By revising the heading and first sentence of paragraph (a)(2)(iii); and

b. By revising paragraph (a)(3)(i)(A) to read as follows:

§ 740.9

Temporary imports, exports, and reexports (TMP).

* * * * *

(a) * * *

(2) * * *

(iii) Exhibition and demonstration. You may export or reexport under this provision commodities and software for exhibition or demonstration in all countries except countries listed in Country Group E:1 (see Supplement No. 1 to this part) provided that the exporter maintains ownership of the commodities and software while they are abroad and provided that the exporter, an employee of the exporter, or the exporter's designated sales representative retains “effective control” over the commodities and software while they are abroad (see part 772 of the EAR for a definition of “effective control”). * * *

* * * * *

(3) Special restrictions. (i) Destinations. (A) No commodity or software may be exported or reexported under paragraph (a) of this section to Country Group E:2 (see Supplement No. 1 to this part) except as permitted by paragraph (a)(2)(viii) of this section (news media). These destination restrictions apply to temporary exports to and for use on any vessel, aircraft or territory under the ownership, control, lease, or charter by any country in Country Group E:2, or any national thereof.

* * * * *

7. Section 740.10 is amended:

a. By revising the phrase “Cuba, Iran, Iraq, Sudan, Syria, Libya, or North Korea” in paragraph (a)(3)(iv) to read “countries in Country Group E:1 (see Supplement No. 1 to this part)”;

b. By revising paragraph (b)(2)(iv); and

c. By revising the phrase “Cuba, Iran, Iraq, Libya, North Korea, Sudan or Syria” in paragraph (b)(3)(i)(D) to read “countries in Country Group E:1 (see Supplement No. 1 to this part)”.

§ 740.10

Servicing and replacement of parts and equipment (RPL).

* * * * *

(b) * * *

(2) * * *

(iv) Terrorist supporting countries. No repaired commodity or software may be exported or reexported to countries in Country Group E:1 (see Supplement No. 1 to this part).

* * * * *

8. Section 740.13 is amended by revising the phrase “except Cuba, Iran, Iraq, Libya, North Korea, Sudan, and Syria” in paragraph (d)(3)(i) to read “except destinations in Country Group E:1 (see Supplement No. 1 to this part).”

9. Section 740.15 is amended:

(a) By revising the phrase “Cuba, Iran, Iraq, Libya, North Korea, Sudan, or Syria” in paragraphs (a)(1)(i), (a)(1)(ii), (a)(3)(iv), (a)(3)(v), (a)(3)(vi), (a)(3)(vii), (a)(3)(viii) and (a)(3)(ix) to read “a destination in Country Group E:1 (see Supplement No. 1 to this part)”; and

(b) By revising the phrase “Cuba, Iran, Iraq, Sudan, Syria, Libya, and North Korea” in paragraph (a)(2)(ii) to read “a destination in Country Group E:1 (see Supplement No. 1 to this part)”.

10. Supplement No. 1 to part 740 is amended by revising Country Group E:1 to read as follows:

Supplement No. 1 to Part 740

* * * * *

Country Group E

Country	[E:1] Terrorist supporting countries	[E:2] unilateral embargo 1
Cuba	X	X
Iran	X
Iraq	X
Korea, North	X
Libya	X	X
Sudan	X
Syria	X
1 In addition to the controls of the EAR that the Bureau of Export Administration administers, note that the Treasury Department's Office of Foreign Assets Control administers:
(a) A comprehensive embargo against Cuba, Iran, Iraq, Libya, Sudan, and the Taliban and areas of Afghanistan controlled by the Taliban;
(b) A ban on arms and specified items destined to the National Union for the Total Independence of Angola (UNITA) located in Angola; and
(c) An embargo against certain individuals and entities, e.g., Specially Designated Terrorists (SDT). (Note: The Department of State also imposes sanctions on certain individuals and entities, please consult with the Department of State for further information concerning these controls.)

Dated: August 1, 2001.

James J. Jochum,

Assistant Secretary for Export Administration.