04-24680. Microprocessor Technology Eligible for Export Under License Exception

AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Final rule.

SUMMARY:

The Bureau of Industry and Security (BIS) is expanding the availability of License Exception CIV for certain deemed exports of microprocessor technology on the Commerce Control List (CCL) of the Export Administration Regulations (EAR) under Export Classification Control Numbers (ECCN) 3E001 and 3E002. These ECCNs control technology that can be used for the development and production of microprocessors. This final rule partially implements a proposed rule published on October 24, 2003. The proposed rule included the export and reexport of general purpose microprocessor technology under License Exception CIV, while this final rule limits License Exception CIV eligibility to deemed exports for certain microprocessor technology. BIS has determined that further liberalization of controls on exports of microprocessor technology must await agreement in the Wassenaar Arrangement. This rule also establishes a “Foreign National Review (FNR)” requirement under License Exception CIV for deemed exports of microprocessor technology to certain eligible foreign nationals.

DATES:

This rule is effective on November 5, 2004.

FOR FURTHER INFORMATION CONTACT:

Sharron Cook, Senior Export Policy Analyst, Office of Exporter Services, Regulatory Policy Division, Bureau of Industry and Security, Telephone: [phone].

SUPPLEMENTARY INFORMATION:

Background

On October 24, 2003, BIS published a proposed rule with request for comments (68 FR 60891) from industry to assist BIS in evaluating microprocessor technology controlled under ECCN 3E002, as well as computer technology and software controls. BIS received eleven comments in response to this request. While the proposed rule covered both microprocessor technology and computer technology and software, BIS has decided to address computer technology and software and microprocessor technology in two different rules. This final rule implements the license exception expansion for microprocessor technology. The corresponding rule on license exception eligibility for computer technology is published elsewhere in this issue of the Federal Register.

Current Controls on Microprocessor Technology

Technology for the development and production of microprocessors that have a CTP exceeding 530 MTOPS and an arithmetic logic unit with an access width of 32 bits or more are controlled by ECCN 3E002, pursuant to agreement by members of the Wassenaar Arrangement (WA). License Exception TSR is available for the export and reexport of technology for microprocessors of unlimited CTP to all Country Group B countries (see Supplement No. 1 to part 740 of the EAR), if all the criteria of License Exception TSR are met (see section 740.6 of the EAR for License Exception TSR requirements).

In addition, technology for the development or production of microprocessors that have more than one data or instruction bus or serial communication port that provides a direct external interconnection between parallel “microprocessor microcircuits” with a transfer rate exceeding 150 Megabytes per second are controlled by ECCN 3E001, because “microprocessor microcircuits”, “micro-computer microcircuits” and microcontroller microcircuits having this characteristic are controlled under ECCN 3A001.a.3.c. License Exception TSR is available for the export and reexport of technology for microprocessors of unlimited transfer rate to all Country Group B countries (see Supplement No. 1 to part 740 of the EAR), if all the criteria of License Exception TSR are met (see section 740.6 of the EAR for License Exception TSR requirements).

Deemed Export Revisions

While the original Federal Register notice proposed expanding License Exception availability for actual exports and reexports of microprocessor technology, this final rule expands License Exception CIV availability for deemed exports only. Generally, Wassenaar countries do not have in-country transfer controls (deemed export controls), with the exception of classified material.

Microprocessor technology is listed by the Wassenaar Arrangement on the Basic List (530 MTOPS). Accordingly adjustments in control limits for actual exports and reexport of microprocessor technology should be implemented based on agreement with the United States' Wassenaar partners. Therefore, the United States may discuss raising the level of controls for actual export and reexport of microprocessor technology in the Wassenaar Arrangement.

The EAR defines “export” to include, among other things, the release of technology or source code subject to the EAR to a foreign national within the United States. Such release is “deemed” to be an export to the home country or countries of the foreign national. The deemed export rule does not apply to persons lawfully admitted for permanent residence in the United States and does not apply to persons who are protected individuals under the Immigration and Naturalization Act (8 U.S.C. 1324b(a)(3)). Deemed export license applications for foreign nationals with dual citizenship should be based on the most recently obtained country citizenship. Applications for foreign nationals with temporary or permanent residence status of a third country (i.e., non-U.S. and a temporary or permanent residence status other than a foreign national's country of origin) should be based on the foreign national's country of citizenship.

Because the United States is one of the only WA country members to implement deemed export controls, U.S. industry has been required to obtain license authorization for these deemed exports when other WA member countries have not imposed such controls on their industries. Expanding the availability of a License Exception for general purpose microprocessor technology provides relief from licensing burdens for U.S. industry and levels the playing field in global competition. BIS has found that the expansion of license exception availability under the technology parameters set forth below will not have an adverse impact on the U.S. national security.

Expansion of License Exception CIV for Certain Deemed Exports of Microprocessor Technology Controlled Under ECCNs 3E001 and 3E002

This rule authorizes under License Exception CIV deemed exports of technology controlled under ECCN 3E001 for the development and production of microprocessors controlled under ECCN 3A001.a.3.c.with a CTP less than or equal to 40,000 MTOPS (regardless of word length or access width) to Country Group D:1 nationals. License Exception CIV does not apply to ECCN 3E001 technology for ECCN 3A001.a.3.c required for the development or production of other items controlled under ECCNs beginning with 3A, 3B, or 3C, or to ECCN 3E001 technology also controlled under ECCN 3E003.

In addition, this rule authorizes under License Exception CIV deemed exports of technology controlled under ECCN 3E002 for the development and production of microprocessors having a CTP less than or equal to 40,000 MTOPS (regardless of word length or access width) to Country Group D:1 nationals. License Exception CIV does not apply to ECCN 3E002 technology also required for the development or production of items controlled under ECCNs beginning with 3A, 3B, or 3C, or to ECCN 3E002 technology also controlled under ECCN 3E003.

Requirements for Use of License Exception CIV for Deemed Exports of Eligible Microprocessor Technology

License Exception CIV may not be used for military end-users or to known military uses. In addition to conventional military activities, military uses include any proliferation activities described in part 744 of the EAR. Deemed exports under License Exception CIV are not authorized to foreign nationals in an expired visa status. It is the responsibility of the exporter to ensure that, in the case of deemed exports, the foreign national maintains a valid U.S. visa, if required to hold a visa from the United States.

This rule makes License Exception CIV available for deemed exports of eligible microprocessor technology to any Country Group D:1 foreign national once a Foreign National Review (FNR) request has been submitted to BIS and confirmation of eligibility has been obtained from the System for Tracking Export License Applications (STELA) or the Simplified Network Application Procedure (SNAP). FNR requests must be submitted using Form BIS-748P (Multipurpose Application), or its electronic equivalent, and must include information about the foreign national who is to receive the microprocessor technology. The information required for the FNR request is set forth in paragraphs (s) and (t) of Supplement No 2 to part 748 of the EAR. BIS will refer the FNR request for interagency review within nine business days or, if necessary, return the FNR request without action to the applicant, e.g., if more information is necessary. The agencies have 30 days in which to return a recommendation to BIS.

Exporters who have current licenses for deemed exports of such technology to Country Group D:1 foreign nationals that become eligible for License Exception CIV are no longer bound by conditions on their licenses, as provided under section 750.7 of the EAR. Termination of license conditions does not relieve an exporter of its responsibility for violations that occurred prior to the availability of the License Exception.

Although most licenses for microprocessor technology have been issued to companies who employ Country Group D:1 foreign nationals in their U.S. facilities and who hold work visas issued by the U.S. Government, the availability of License Exception CIV for deemed exports is not confined to employer releases of technology to employees. It is also available for deemed exports of technology to Country Group D:1 foreign national visitors and customers, provided that their backgrounds have been checked under the procedures set forth in License Exception CIV.

Although the Export Administration Act expired on August 20, 2001, Executive Order 13222 of August 17, 2001 (3 CFR, 2001 Comp., p. 783 (2002)), as extended by the Notice of August 6, 2004, 69 FR 48763 (August 10, 2004) continues the Regulations in effect under the International Emergency Economic Powers Act.

Comments

The comments that were received by BIS may be found at http://efoia.bis.doc.gov/​pubcomm/​Computer%20Tech%20and%20Software/​Final.pdf. Set forth below are the questions that were posed to industry in the proposed rule and a summary of the comments BIS received and, where applicable, BIS's response to those comments.

1. What impact would the proposed revision of computer technology and software controls have on your company?

Comments in response to this question are addressed in the final rule for computer technology export controls.

2. Is there another proposal regarding computer technology and software, and microprocessor technology controls that you would like Commerce to consider? If so, describe your proposal in detail and please give technical and other justifications for your proposal.

BIS received many comments from industry suggesting that BIS eliminate MTOPS controls for microprocessor technology and instead use end-user and end-use based controls to harmonize with the export controls of microprocessor chips implemented by BIS.

Technology and software for the development and production of microprocessor chips is listed on the Sensitive List (Annex 1) of the Wassenaar Arrangement, i.e., 33 member countries have agreed that this technology must not only be on the List of Dual-use Good and Technologies, but must be carefully monitored because of the usefulness of this technology and software in producing and developing conventional arms. The controlling parameters that have been approved by the Wassenaar member countries are Composite Theoretical Performance (CTP) in Millions of Operations per Second (MTOPS), composition material (compound semiconductor), clock frequency in MHz, and number of data or instruction bus or serial communication ports and related data transfer rate in Mbyte/s. On the other hand, the CTP parameter has been removed from the Wassenaar List for microprocessor chips, which is why BIS decided to implement an end-user/use control for microprocessor chips, i.e., a license is required only when sent to military or weapons of mass destruction (proliferation) end-uses or end-users. Therefore, the microprocessor technology and hardware are controlled in two different ways, and BIS will not change the control parameters for microprocessor technology absent a change to the Wassenaar List.

Others suggested that BIS implement a license exception for microprocessor technology along the same lines as License Exception ENC: i.e., to (a) permit U.S. information technology (IT) companies to transfer controlled knowledge to their foreign subsidiaries; and (b) permit U.S. IT companies to transfer controlled knowledge to their lawfully admitted foreign national employees working within the United States. In return, companies would commit to implement fundamental safeguards on the internal movement of technology.

This technology is already eligible for export or reexport under License Exception TSR to countries listed in Country Group B. However, because of the usefulness of this technology in producing and developing conventional arms and the sensitivity placed on it by the Wassenaar Arrangement, BIS has decided that it would not be prudent to make such technology eligible for export or reexport under a license exception to end-users located in countries that the United States has determined pose a national security concern, i.e., Country Group D:1 countries. Nonetheless, because other Wassenaar member countries do not require licenses for deemed exports of this technology, this rule will make certain microprocessor technology eligible for License Exception CIV after the foreign national has been approved via a Foreign National Review by BIS.

While BIS has decided to only allow deemed exports of this technology under license exception at this time, BIS recognizes that certain licensing requirements for microprocessor technology may be limiting. Therefore, BIS has discussed with other agencies a possibility of allowing the export, reexport, or transfer of this technology through a “Special Intra-company License (SIL).” The goal is to create a license that will ease the flow of certain authorized technology and source code within the global corporate structure, based on an approved Technology Control Plan, i.e., an internal control program.

3. What is the highest CTP level for microprocessors currently being manufactured by your company?

Many respondents either said that this information was proprietary or that they had already submitted this information to BIS. Some respondents provided CTPs in the range of 2,700-24,170 MTOPS.

4. What should be the CTP MTOPS limitation for microprocessor technology under the proposed License Exception CIV? Please provide detailed technical and other justification for your proposal.

Most respondents said License Exception CIV should have a CTP with unlimited MTOPS. This rule makes deemed exports of microprocessor technology at a certain MTOPs level eligible for License Exception CIV. While BIS believes that deemed exports are more easily enforced, because they take place in the United States, BIS is not naive about efforts of other countries to obtain this integrated circuit technology, see 69 F.R. 26360 5/12/04 regarding Suntek Microwave, Inc. Therefore, BIS has set a limit on the MTOPS level eligible under License Exception CIV.

In addition, at least two respondents requested that if we do not eliminate the CTP parameter altogether, then the CTP should be set at twice the MTOPS of what is in current production. They estimated that this would result in a CTP threshold of 50,000 MTOPS. This final rule adopts the 40,000 MTOPS threshold for eligibility of deemed exports under License Exception CIV, because the projected future trends of technology thresholds, which were provided by industry, did not justify adopting a higher MTOPS level at this time.

Respondents said in support of the proposed rule that the export control level for microprocessor technology should match that of microprocessor hardware. One of the controlling parameters for microprocessor chips, CTP, was removed from the Wassenaar List in 2003, which is why BIS decided to implement an end-user/use control for microprocessor chips, i.e., a license is required only when sent to military or weapons of mass destruction (proliferation) end-uses or end-users. On the other hand, technology and software for the development and production of microprocessor chips is listed on the Sensitive List (Annex 1) of the Wassenaar Arrangement, i.e., 33 member countries have agreed that this technology must not only be on the List of Dual-use Good and Technologies, but must be carefully monitored because of the usefulness of this technology and software in producing and developing conventional arms. The controlling parameter for microprocessor technology that has been approved by the Wassenaar member countries under ECCN 3E002 is 530 MTOPS. Therefore, BIS, in keeping with its agreements to the Wassenaar Arrangement, will not be eliminating the CTP parameter for technology to match the no longer existent CTP parameter for microprocessor hardware.

A few respondents claimed that microprocessor technology controlled under the EAR is already available abroad, because microprocessors and like commodities (graphics chips, IDE controllers, and network routers) “require a broad set of design elements” (Arithmetic logic unit (ALU), memory, clock frequency, and control unit). One respondent wrote, “All of the elements are present and required in all of the technologies and each requires application of knowledge in each or all of the elements. For example, a current generation graphics processor chip contains ALU's capable of 100 Gf of 32 Bit FP performance. This level of performance would be approximately 50K CTP if the graphics chip were to be subjected to CTP analysis. Export controls for all of the example products, except for the microprocessor, are limited to anti-terrorism (AT) controls. There are no multi-national controls on those other products. Thus, countries of concern in Computer Tier 3 Country Group can easily obtain the needed component technology and then simply re-package it as a microprocessor.”

If this were feasible and simple to do, then countries around the world would be producing microprocessor chips and not buying U.S. microprocessors. However, we have found that this is not the case, and countries around the world greatly seek not only U.S. manufactured microprocessors, but the technology to produce and develop them. In addition, gathering bits and pieces of technology from different sources, while not easy in itself, does not provide enough comprehensive knowledge to produce a high quality microprocessor chip.

5. How do other countries license the transfer of computer technology and software, and microprocessor technology? Have there been instances where your company has been placed at a competitive disadvantage based on current U.S. license requirements?

The majority of respondents stated that they did not have access to specific procedures or regulations of other countries' export policies with regard to computer technology and software, and microprocessor technology. Some commented that the technology was widely available from non-U.S. sources and that the majority of other countries impose minimal export restrictions on this type of technology.

6. What are your predictions for the CTP level of microprocessors that will be in production 3 and 5 years from now? On what basis did you make your predictions?

Some respondents said they had already provided such information to BIS. Some respondents provided the requested predictions, based on Moore's Law and historic CTP information, as follows:

3 year predictions: 160,000 MTOPS, 250,000 MTOPS, and 400,000 MTOPS

5 year predictions: 600,000 MTOPS and 640,000 MTOPS

7 year prediction: 1,000,000 MTOPS

7. What percentage of your research and development is accomplished: (1) Outside of the United States; and (2) with the assistance of foreign nationals within the United States?

Some respondents said they had already provided such information to BIS. None of the respondents addressed this specifically, but one respondent noted that in the physical sciences and engineering, nearly 50 percent of all Masters and PhD degrees awarded by U.S. schools are earned by foreign nationals.

8. Is there an alternative method or parameter for controlling exports of computers and microprocessors and the technology and software therefore that industry believes would be more in-line with the way industry produces, develops, or measures these items?

Many of the respondents pointed out that performance-based controls are “unsuited” for general purpose and rapidly-advancing technologies such as semiconductors and computers. Many respondents would like to see end-use and end-user based controls. However, it has been determined by Wassenaar Arrangement members that technology and software for the development and production of microprocessors and computers warrant extra care and have placed such technology and software on the Wassenaar Sensitive List (Annex 1). These technology and software controls are based on their performance capabilities, and at this time the only metric that the regime members have agreed upon is CTP. In keeping with the Wassenaar Arrangement agreements, BIS will not adopt a unilateral end-use/user based control for microprocessor technology.

In addition to the above responses to the questions that were included in the proposed rule, BIS received some recommendations about ECCN 3A001.a.3.c, data transfer rate, another parameter that controls microprocessors. Some respondents recommended that BIS submit a proposal to Wassenaar to have this parameter removed, because it is outdated. BIS has in the past submitted proposals to Wassenaar to remove this parameter, but has not been successful in gaining unanimous agreement. BIS also received comments from industry explaining that microprocessor technology is also controlled under ECCN 3E001, because of the ECCN 3A001.a.3.c controls. Industry advised that this effort to expand CIV under ECCN 3E002 would be incomplete without a similar expansion of CIV under ECCN 3E001. BIS agrees with industry's assessment of ECCN 3E001, as it controls interconnect technology for microprocessors under ECCN 3A001.a.3.c. Therefore, this final rule adopts this recommendation by making deemed exports of certain microprocessor technology controlled under ECCNs 3E001 and 3E002 eligible for License Exception CIV.

Rulemaking Requirements

1. This 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 shall any person be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act (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 rule contains a collection of information subject to the requirements of the PRA. This collection has been approved by OMB under Control Number 0694-0088 (Multi-Purpose Application), which carries a burden hour estimate of 58 minutes to prepare and submit form BIS-748. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing the burden, to David Rostker, Office of Management and Budget (OMB), by e-mail to [e-mail], or by fax to [phone]; and to the Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, PO Box 273, Washington, DC 20044.

3. This rule does not contain policies with Federalism implications as that term is defined under E.O. 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 (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 the Administrative Procedure Act 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 Sharron Cook, Office of Exporter Services, Bureau of Industry and Security, Department of Commerce, PO Box 273, Washington, DC 20044.

List of Subjects

15 CFR Part 740

• Administrative practice and procedure
• Exports
• Reporting and recordkeeping requirements

15 CFR Part 774

• Exports
• Reporting and recordkeeping requirements

Accordingly, parts 740 and 774 of the Export Administration Regulations (15 CFR parts 730-799) are amended as follows:

PART 740—[AMENDED]

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

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; Sec. 901-911, Pub. L. 106-387; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 6, 2004, 69 FR 48763 (August 10, 2004).

2. Section 740.5 is revised to read as follows:

§ 740.5

Civil End-users (CIV).

(a) Scope. License Exception CIV authorizes exports and reexports of items on the Commerce Control List (CCL) (Supplement No. 1 to part 774 of the EAR) that have a license requirement to the ultimate destination pursuant to the Commerce Country Chart (Supplement No. 1 to part 738 of the EAR) for NS reasons only; and identified by “CIV—Yes” in the License Exception section of the Export Control Classification Number (ECCN), provided the items are destined to civil end-users for civil end-uses in Country Group D:1, except North Korea (Supplement No. 1 to part 740 of this part).

(b) Restrictions. (1) Restricted end-users and end-uses. You may not use CIV if you “know” the item will be or is intended to be exported, reexported, or transferred within country to military uses or military end-users. Such exports, reexports, and transfers will continue to require a license. In addition to conventional military activities, military uses include any proliferation activities described and prohibited by part 744 of the EAR.

(2) Visa Status. Deemed exports under License Exception CIV are not authorized to foreign nationals in an expired visa status. It is the responsibility of the exporter to ensure that, in the case of deemed exports, the foreign national maintains a valid U.S. visa, if required to hold a visa from the United States.

(c) Reporting Requirement. See § 743.1 of the EAR for reporting requirements for exports of certain items under this License Exception.

(d) Foreign National Review (FNR) requirement for deemed exports. (1) Submission requirement. Prior to disclosing eligible technology to a foreign national under this License Exception, you must submit a Foreign National Review (FNR) request to BIS, as required under § 748.8(s) of the EAR. Your FNR request must include information about the foreign national required under § 748.8(t) of the EAR and set forth in Supplement No. 2 of part 748 of the EAR.

(2) Confirmation of eligibility. You may not use License Exception CIV until you have obtained confirmation of eligibility by calling the System for Tracking Export License Applications (STELA), see § 750.5 for how to use STELA, or electronically from the Simplified Network Application Procedure (SNAP), see http://www.bis.doc.gov/​SNAP/​index.htm for more information about SNAP.

(3) Action by BIS. Within nine business days of the registration of the FNR request, BIS will refer the FNR request electronically, along with all necessary documentation for interagency review, or if necessary return the FNR request without action (e.g., if the information provided is incomplete). Processing time starts at the point at which the notification is registered into BIS's electronic system.

(4) Review by other departments or agencies. The Departments of Defense, State, Energy, and other agencies, as appropriate, may review the FNR request. Within 30 calendar days of receipt of the BIS referral, the reviewing agency will provide BIS with a recommendation either to approve or deny the FNR request. A reviewing agency that fails to provide a recommendation within 30 days shall be deemed to have no objection to the final decision of BIS.

(5) Action on the FNR Request. After the interagency review period, BIS will promptly notify the applicant regarding the FNR request, i.e., whether the FNR request is approved, denied, or more time is needed to consider the request.

PART 774—[AMENDED]

3. The authority citation for part 774 continues 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; Sec. 901-911, Pub. L. 106-387; Sec. 221, Pub. L. 107-56; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 6, 2004, 69 FR 48763 (August 10, 2004).

4. In Supplement No. 1 to part 774 (the Commerce Control List), Category 3—Electronics, Export Control Classification Number (ECCN) 3E001 is amended by revising the “CIV” paragraph in the License Exceptions section, to read as follows:

3E001 “Technology” according to the General Technology Note for the “development” or “production” of equipment or materials controlled by 3A (except 3A292, 3A980, 3A981, 3A991 or 3A992), 3B (except 3B991 or 3B992) or 3C.

* * * * *

License Exceptions

CIV: Yes for deemed exports, as described in § 734.2(b)(2)(ii) of the EAR, of technology for the development or production of microprocessor microcircuits, micro-computer microcircuits, and microcontroller microcircuits having the characteristics described in 3A001.a.3.c with a CTP less than or equal to 40,000 MTOPS (regardless of word length or access width). Deemed exports under License Exception CIV are subject to a Foreign National Review (FNR) requirement, see § 740.5 of the EAR for more information about the FNR. License Exception CIV does not apply to ECCN 3E001 technology for 3A001.a.3.c required for the development or production of other items controlled under ECCNs beginning with 3A, 3B, or 3C, or to ECCN 3E001 technology also controlled under ECCN 3E003.

TSR: * * *

* * * * *

5. In Supplement No. 1 to part 774 (the Commerce Control List), Category 3—Electronics, Export Control Classification Number (ECCN) 3E002 is amended by revising the “CIV” paragraph in the License Exceptions section, to read as follows:

3E002 “Technology” according to the General Technology Note other than that controlled in 3E001 for the “development” or “production” of “microprocessor microcircuits”, “micro-computer microcircuits” and microcontroller microcircuits having a “composite theoretical performance” (“CTP”) of 530 million theoretical operations per second (MTOPS) or more and an arithmetic logic unit with an access width of 32 bits or more.

* * * * *

License Exceptions

CIV: Yes, for deemed exports, as described in § 734.2(b)(2)(ii) of the EAR, of “technology” for the “development” or “production” of general purpose microprocessors with a CTP less than or equal to 40,000 MTOPS (regardless of word length or access width). Deemed exports under License Exception CIV are subject to a Foreign National Review (FNR) requirement, see § 740.5 of the EAR for more information about the FNR. License Exception CIV does not apply to ECCN 3E002 technology also required for the development or production of items controlled under ECCNs beginning with 3A, 3B, or 3C, or to ECCN 3E002 technology also controlled under ECCN 3E003.

TSR: * * *

* * * * *

Dated: October 28, 2004.

Peter Lichtenbaum,

Assistant Secretary for Export Administration.