2010-12956. Implementation of Changes from the 2009 Annual Review of the Entity List

AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Final Rule.

SUMMARY:

This rule amends the Export Administration Regulations (EAR) to implement changes to the Entity List (Supplement No. 4 to Part 744) on the basis of the 2009 annual review of the Entity List conducted by the End-User Review Committee. The changes from the annual review will be implemented in two rules. The first rule published today implements the results of the annual review for listed entities under eleven destinations on the Entity List: Canada, Egypt, Germany, Hong Kong, Israel, Kuwait, Lebanon, Malaysia, South Korea, Singapore, and the United Kingdom.

The second rule will implement the results of the annual review for entities listed under the remaining seven destinations that were included in the 2009 annual review: China, India, Iran, Pakistan, Russia, Syria, and the United Arab Emirates. Entities listed under the destinations of Armenia, Ireland or Taiwan were not included in the 2009 annual review because they were added to the Entity List in 2009 or 2010.

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 and that availability of license exceptions in such transactions is limited.

DATES:

Effective Date: This rule is effective May 28, 2010. Although there is no formal comment period, public comments on this regulation are welcome on a continuing basis.

ADDRESSES:

You may submit comments, identified by RIN 0694-AE88, by any of the following methods:

E-mail: [e-mail] Include “RIN 0694-AE88” in the subject line of the message.

Fax: [phone]. Please alert the Regulatory Policy Division, by calling [phone], if you are faxing comments.

Mail or Hand Delivery/Courier: Timothy Mooney, U.S. Department of Commerce, Bureau of Industry and Security, Regulatory Policy Division, 14th St. & Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230, Attn: RIN 0694-AE88. 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]; and to the Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, 14th St. & Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230. Comments on this collection of information should be submitted separately from comments on the final rule (i.e., RIN 0694-AE88)—all comments on the latter should be submitted by one of the three methods outlined above.

FOR FURTHER INFORMATION CONTACT:

Susan Kramer, Acting Chairman, 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 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, where 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.

2009 Annual Review of the Entity List

This rule amends the Export Administration Regulations (EAR) to implement changes to the Entity List (Supplement No. 4 to part 744) on the basis of the 2009 annual review of the Entity List conducted by the ERC, in accordance with the procedures outlined in Supplement No. 5 to part 744 (Procedures for End-User Review Committee Entity List Decisions).

As of January 1, 2009, entities on the Entity List were listed under one or more of eighteen different destinations. The changes from the 2009 annual review of the Entity List that were approved by the ERC will be implemented in two rules. The first rule published today implements the results of the annual review for listed entities under eleven destinations on the Entity List: Canada, Egypt, Germany, Hong Kong, Israel, Kuwait, Lebanon, Malaysia, South Korea, Singapore, and the United Kingdom. The second rule will implement the results of the annual review for entities listed under the remaining seven destinations: China, India, Iran, Pakistan, Russia, Syria, and the United Arab Emirates. Entities listed under the destinations of Armenia, Ireland or Taiwan were not included in the 2009 annual review because they were added to the Entity List in 2009 or 2010.

ERC Entity List Decisions

This rule removes one entity from the Entity List under Hong Kong. This rule also makes two modifications to the Entity List: by making a correction to the address of one entity listed under Egypt, and by making a clarification to the license requirement for one entity listed under Israel. On the basis of the 2009 annual review, no additional changes will be made to listed entities under the following eight destinations: Canada, Germany, Kuwait, Lebanon, Malaysia, South Korea, Singapore, and the United Kingdom.

Removal From the Entity List

The entity being removed from the Entity List is located in Hong Kong:

Hong Kong

(1) Speedy Electronics Ltd., 1206-7, 12/F New Victory House, Hong Kong.

The removal of Speedy Electronics Ltd. from the Entity List (from Hong Kong, as described above) eliminates the existing license requirement in Supplement No. 4 to part 744 for exports, reexports and transfers (in-country) to this entity. However, the removal of Speedy Electronics Ltd. 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 § 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 such 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.

Modifications to the Entity List

(1) This rule amends one Egyptian entry currently on the Entity List by adding an additional address for the entity listed, as follows:

Egypt

H Logic, Behind 14 Mahmoud Sedky St., El Ekbal, Alexandria, Egypt; and 11 Abd El-Hamid Shoman St., Nasser City, Cairo.

A BIS license is required for the export, reexport or transfer (in-country) of any item subject to the EAR to H Logic, 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 this entity 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.

(2) Finally, this rule amends one Israeli entry currently on the Entity List (i.e., Ben Gurion University) by revising the license requirement for the entity listed. This change was needed because the license requirement for this listed entity prior to publication of this rule was based on a section of the EAR that is no longer in the EAR (i.e., Section 742.12 (High Performance Computers)). This section of the EAR was removed and reserved on April 24, 2006 (71 FR 20876). To conform to the April 2006 change and to clarify the Entity List based license requirement for this listed entity, this rule is revising the license requirement to indicate the license requirement applies to computers above the Tier 3 level described in Section 740.7(d) of License APP (Computers). The entity column and the revision to the license requirement column for this listed entity is, as follows:

Israel

Ben Gurion University, Israel.

License Requirement

For computers above the Tier 3 level described in Section 740.7(d) (i.e., Tier 3 under APP).

A BIS license is required for the export, reexport or transfer (in-country) of any computers above the Tier 3 level described in Section 740.7(d) (i.e., Tier 3 under APP) subject to the EAR to Ben Gurion University, 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 this entity also prohibits the use of license exceptions (see part 740 of the EAR) for exports, reexports and transfers (in-country) of these types of computers subject to the EAR involving this entity.

Savings Clause

Shipments of items removed from eligibility for a License Exception or export or reexport without a license (NLR) as a result of this regulatory action that were on dock for loading, on lighter, laden aboard an exporting or reexporting carrier, or en route aboard a carrier to a port of export or reexport, on May 28, 2010 pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export or reexport without a license (NLR) so long as they are exported or reexported before June 28, 2010. Any such items not actually exported or reexported before midnight, on June 28, 2010, require a license in accordance with this rule.

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 13, 2009, 74 FR 41325 (August 14, 2009), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act.

Rulemaking Requirements

1. 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 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 expected to increase slightly as a result of this rule.

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 participation, 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)). 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 13, 2009, 74 FR 41325 (August 14, 2009); Notice of November 6, 2009, 74 FR 58187 (November 10, 2009).

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

a. By removing under Hong Kong, one Hong Kong entity “Speedy Electronics Ltd., 1206-7, 12/F New Victory House, Hong Kong”;

b. By revising under Egypt, in alphabetical order, one Egyptian entity; and

c. By revising under Israel, in alphabetical order, one Israeli entity;

The revisions read as follows:

Supplement No. 4 to Part 744—Entity List

Country	Entity	License requirement	License review policy	Federal Register citation
	*         *         *         *         *         *         *
EGYPT	H Logic, Behind 14 Mahmoud Sedky St., El Ekbal, Alexandria, Egypt; and 11 Abd El-Hamid Shoman St., Nasser City, Cairo	For all items subject to the EAR. (See § 744.11 of the EAR)	Presumption of denial	73 FR 54504, 9/22/08. 75 FR [Insert FR page number and 5/28/10.
	*         *         *         *         *         *         *
ISRAEL	Ben Gurion University, Israel	For computers above the Tier 3 level described in Section 740.7(d) (i.e., Tier 3 under APP).	Case-by-case basis	62 FR 4910, 2/3/97 65 FR 12919, 03/10/00. 75 FR [Insert FR page number and 5/28/10.
	*         *         *         *         *         *

Dated: May 21, 2010.

Kevin J. Wolf,

Assistant Secretary for Export Administration.