04-1737. Revisions and Clarifications to the Export Administration Regulations

AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Final rule.

SUMMARY:

This rule amends the Export Administration Regulations (EAR) by making certain corrections and clarifications, including insertion of material inadvertently omitted from previous rules.

DATES:

This rule is effective February 6, 2004.

FOR FURTHER INFORMATION CONTACT:

Sharron Cook, Office of Exporter Services, Bureau of Industry and Security, Telephone: [phone].

SUPPLEMENTARY INFORMATION:

This rule makes the following corrections and clarifications:

1. In part 730, paragraph 730.8(c) is revised to correctly state names of offices, addresses, phone and facsimile numbers, and, in Supplement No. 3 to Part 730 (Other Government Departments and Agencies with Export Control Responsibilities), the office title, description of items processed, phone number, and fax number of the Department of Energy is revised.

2. In paragraph 732.3(h)(2) (Steps regarding the ten general prohibitions), old terminology is removed, i.e., OTS, STS, and SUD.

3. In Supplement Nos. 1 and 2 to part 732, the flowcharts entitled “Am I Subject to the EAR” and “Export Control Decision Tree” are replaced with simpler and easier to read versions.

4. In paragraph 734.1(a) (Introduction to the Scope of the EAR), a correction is made to clarify the meaning of the fifth sentence.

5. In paragraph 734.3(b)(4) (Items subject to the EAR), a correction is made by replacing the word “greater” with the word “less”. This will clarify that foreign made items that have less than the de minimis U.S. content based on the principles described in § 734.4, are not subject to the EAR.

6. In paragraph 734.4(d) (De minimis U.S. content), the citation reference to paragraph (b) is replaced with the correct citation reference to paragraph (c).

7. In paragraph 736.2(b)(3)(i)(General Prohibition Three—Reexport and export from abroad of the foreign-produced direct product of U.S. technology and software), a phrase is added to clarify that exports, reexports, or exports from abroad of items subject to the scope of General Prohibition three to Cuba, Libya, or a destination in Country Group D:1 are permitted under the authority of a license or eligible License Exception.

8. In Part 740, language is added to the description of the scope of items eligible for License Exceptions GBS (740.4), CIV (740.5), TSR (740.6), to clarify that items eligible for these License Exceptions are those that require a license for national security reasons only.

9. In paragraph 740.9(a)(2)(viii)(3)(B) (Temporary Exports), the title and room number is corrected for the Office of Export Enforcement located in Room H4616.

10. In paragraph 740.12(b)(5)(iii), a citation is corrected.

11. In paragraph 740.13(a)(1) (Operation technology and software under TSU), a clarification is made by replacing the word “products” with the words “commodities or software''.

12. In paragraphs 746.2(a)(1)(ii) (License Exceptions for Cuba) and 746.4(b)(2)(ii)(B) (Reexports to Libya), clarifying language is added to correctly describe the scope of operation technology and software eligible under License Exception TSU to Cuba and Libya. The word “products” is revised to read “commodities or software”.

13. In paragraph 746.4(b)(2) (Reexports to Libya), two citations are corrected: “734.2(b)(2)” to read “734.3(a)(3)”, and “734.2(b)(3)” to read “734.3(a)(4)”.

14. In paragraph 746.4(c)(2)(vii)(A) (License Policy for Libya), a typographical error is fixed to correctly describe the capacity of the pumps to transport crude oil and natural gas that generally are subject to a denial policy. The phrase “equal to or larger than 3500 cubic meters per hour” now reads “equal to or larger than 350 cubic meters per hour”.

15. In paragraph 746.7, Iran, the first sentence of the introductory paragraph is revised to update the authority references for the section.

16. In paragraph 748.2(a), a revision is made to correctly state names of offices, addresses, phone and facsimile numbers.

17. Section 750.7 is amended by revising paragraph (c)(1)(viii) to allow the exporter to revise the wording of the item description on a license (although not necessary for the purpose of conforming to an official revision in the CCL) without having to obtain a replacement license. This revision will not allow an actual change in the item to be shipped.

18. In paragraphs 752.3(a)(2) and (a)(3) (Eligible Items for export and reexport under the Special Comprehensive License) references to ECCNs were corrected. ECCNs 1E350 and 1E351 were removed from paragraph (a)(2). ECCNs 1E350 and 1E351 were added to paragraph (a)(3).

19. Supplement No. 3 to part 774, “Cross-Reference”, is removed because it is no longer necessary and has become confusing since the implementation of Wassenaar revisions to the Commerce Control List.

Although the Export Administration Act expired on August 20, 2001, Executive Order 13222 of August 17, 2001 (66 FR 44025, August 22, 2001), as extended by the notice of August 7, 2003, (68 FR 47833, August 11, 2003), continues the Regulations in effect under the International Emergency Economic Powers Act.

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 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 rule involves a collection of information subject to 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 for a manual or electronic submission. Send comments regarding these burden estimates or any other aspect of these collections of information, including suggestions for reducing the burden, to OMB Desk Officer, New Executive Office Building, Washington, DC 20503; and to the Office of Administration, Bureau of Industry and Security, Department of Commerce, 14th and Pennsylvania Avenue NW., Room 6883, Washington, DC 20230.

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 interim 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, P.O. Box 273, Washington, DC 20044.

List of Subjects

15 CFR Part 730

• Administrative practice and procedure
• Advisory committees
• Exports
• Foreign trade
• Reporting and recordkeeping requirements
• Strategic and critical materials

15 CFR Parts 732, 740, 748, 750, and 752

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

15 CFR Part 734

• Administrative practice and procedure
• Exports
• Foreign trade

15 CFR Parts 736 and 774

• Exports
• Foreign Trade

15 CFR Part 746

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

Accordingly, parts 730, 732, 734, 736, 740, 746, 748, 750, 752, and 774 of the Export Administration Regulations (15 CFR Parts 730-799) are amended as follows:

PART 730—[AMENDED]

1. The authority citation for 15 CFR part 730 is revised 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. 11912, 41 FR 15825, 3 CFR, 1976 Comp., p. 114; E.O. 12002, 42 FR 35623, 3 CFR, 1977 Comp., p.133; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12214, 45 FR 29783, 3 CFR, 1980 Comp., p. 256; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., p. 179; E.O. 12918, 59 FR 28205, 3 CFR, 1994 Comp., p. 899; E.O. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice of August 7, 2003, 68 FR 47833, August 11, 2003; Notice of October 29, 2003, 68 FR 62209, October 31, 2003.

2. Section 730.8(c) is amended by revising the phrase “Santa Clara Branch Office, U.S. Department of Commerce, 5201 Great America Parkway, Suite 333, Santa Clara, California 95054, Telephone number: [phone], Facsimile number: [phone]” to read “U.S. Export Assistance Center, Bureau of Industry and Security, 152 North Third Street, Suite 550, San Jose, California 95112-5591, Telephone number: [phone], Facsimile number: [phone]”

3. In part 730, Supplement No. 3 is amended by revising the Government Agency, address, and phone/fax numbers under “Nuclear Technology; Technical Data for Nuclear Weapons/Special Nuclear Materials” to read as follows:

Supplement No. 3 to PART 730—OTHER U.S. GOVERNMENT DEPARTMENTS AND AGENCIES WITH EXPORT CONTROL RESPONSIBILITIES

* * * * *

Nuclear Technologies and Services Which Contribute to the Production of Special Nuclear Material (Snm). Technologies Covered Include Nuclear Reactors, Enrichment, Reprocessing, Fuel Fabrication, and Heavy Water Production.

Department of Energy Office of Export Control Policy & Cooperation (NA-24) Tel. [phone], Fax [phone], 10 CFR part 810

* * * * *

PART 732—[AMENDED]

4. The authority citation for 15 CFR part 732 continues to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 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 7, 2003, 68 FR 47833, August 11, 2003.

5. Section 732.3 is amended by revising paragraph (h)(2), to read as follows:

§ 732.3

Steps regarding the ten general prohibitions.

* * * * *

(h) * * *

(2) Under License Exception TSU (§ 740.13 of the EAR), operation technology and software, sales technology, and software updates overcome General Prohibition Five (End-Use and End-User) (§ 736.2(b)(5) of the EAR) if all terms and conditions of these provisions are met by the exporter or reexporter.

* * * * *

6. Supplement Nos. 1 and 2 to part 732 are revised to read as follows:

PART 734—[AMENDED]

7. The authority citation for 15 CFR part 734 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 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. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 7, 2003, 68 FR 47833, August 11, 2003; Notice of October 29, 2003, 68 FR 62209, October 31, 2003.

8. Section 734.1 is amended by revising the phrase “If your item or activity is not subject to the EAR,” to read “If neither your item nor your activity is subject to the EAR,” in the fifth sentence of paragraph (a).

9. Section 734.3 is amended by revising the phrase “Foreign made items that have greater than the de minimis U.S. content based on the principles described in § 734.4 of this part.” to read “Foreign made items that have less than the de minimis percentage of controlled U.S. content based on the principles described in § 734.4 of this part.” in paragraph (b)(4).

10. Section 734.4 is amended by revising the introductory text to paragraph (d), as follows:

§ 734.4

De minimis U.S. content.

* * * * *

(d) Except as provided in paragraph (a) and (b) of this section for certain computers and items controlled for EI reasons, for all other countries not included in paragraph (c) of this section the following reexports are not subject to the EAR:

* * * * *

PART 736—[AMENDED]

11. The authority citation for 15 CFR part 736 continues to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 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. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 7, 2003, 68 FR 47833, August 11, 2003; Notice of October 29, 2003, 68 FR 62209, October 31, 2003.

12. Section 736.2 is amended by revising the phrase “You may not export, reexport, or export from abroad items subject to” to read “You may not, without a license or License Exception, reexport or export from abroad items subject to” in paragraph (b)(3)(i).

PART 740—[AMENDED]

13. The authority citation for 15 CFR part 740 continues 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 7, 2003, 68 FR 47833, August 11, 2003.

14. Section 740.4 is amended by revising the phrase, “commodities controlled to the ultimate destination for national security reasons only and identified” to read “commodities where the Commerce Country Chart (Supplement No. 1 to part 738 of the EAR) indicates a license requirement to the ultimate destination for national security reasons only and identified”.

15. Section 740.5 is amended by revising the phrase, “reexports controlled to the ultimate destination” to read “reexports where the Commerce Country Chart (Supplement No. 1 to part 738 of the EAR) indicates a license requirement to the ultimate destination” in the first sentence.

16. Section 740.6 is amended by revising the phrase “software controlled to the ultimate destination” to read “software where the Commerce Country Chart (Supplement No. 1 to part 738 of the EAR) indicates a license requirement to the ultimate destination” in the first sentence of paragraph (a).

17. Section 740.9 is amended by revising the phrase “Office of Enforcement Support, Room H4069,” to read “Office of Export Enforcement, Room H4616,” in paragraph (a)(2)(viii)(B).

18. Section 740.12 is amended by revising the citation “746.2(a)(3)” to read “746.2(b)(1)” in paragraph (b)(5)(iii).

19. Section 740.13(a)(1) is amended by revising:

a. The phrase “repair of those products” to read “repair of those commodities or software”; and

b. The phrase “efficient use of the product.” to read “efficient use of the commodity or software.”

PART 746—[AMENDED]

20. The authority citation for 15 CFR part 746 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 22 U.S.C. 287c; 22 U.S.C. 6004; Sec. 901-911, Pub. L. 106-387; Sec. 221, Pub. L. 107-56; 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. 13222, 3 CFR, 2001 Comp., p. 783; Notice of August 7, 2003, 68 FR 47833, August 11, 2003.

21. Part 746 is amended by revising:

a. The phrase “legally exported commodities” to read “legally exported commodities or software” in the following two sections: 746.2(a)(1)(ii), and 746.4(b)(2)(ii)(B).

b. The citation “§ 734.2(b)(2)” to read “§ 734.3(a)(3)” and the citation “§ 734.2(b)(3)” to read “§ 734.3(a)(4)” in section 746.4(b)(2);

c. The phrase “larger than 3500 cubic meters” to read “larger than 350 cubic meters” in section 746.4(c)(2)(vii)(A); and

d. The first sentence of the introductory paragraph to section 746.7 to read as follows:

§ 746.7

Iran.

The Treasury Department's Office of Foreign Assets Control (OFAC) administers a comprehensive trade and investment embargo against Iran under the authority, inter alia, of the International Emergency Economic Powers Act of 1977, as amended, section 505 of the International Security and Development Cooperation Act of 1985, and Executive Order 13059 of August 19, 1997, which consolidates the provisions of Executive Orders 12613, 12957 and 12959. * * *

* * * * *

PART 748—[AMENDED]

22. The authority citation for 15 CFR part 748 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 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 7, 2003, 68 FR 47833, August 11, 2003.

23. Section 748.2 is amended by revising the undesignated paragraph following paragraph (a) to read as follows:

§ 748.2

Obtaining forms; mailing addresses.

(a) * * *

Outreach and Exporter Services Division

U.S. Department of Commerce, 14th Street and Pennsylvania Ave., NW., Room H1099D, Washington, DC 20230, Telephone Number: [phone], Facsimile Number: [phone].

Western Regional Offices

U.S. Department of Commerce, 3300 Irvine Avenue, Suite 345, Newport Beach, CA 92660, Telephone Number: [phone], Facsimile Number: [phone].

U.S. Export Assistance Center

Bureau of Industry and Security, 152 North Third Street, Suite 550, San Jose, California 95112-5591, Telephone Number: [phone], Facsimile Number: [phone].

* * * * *

PART 750—[AMENDED]

24. The authority citation for 15 CFR part 750 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 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 7, 2003, 68 FR 47833, August 11, 2003.

25. Section 750.7 is amended by revising paragraph (c)(1)(viii) to read as follows:

§ 750.7

Issuance of licenses.

* * * * *

(c) * * *

(1) * * *

(viii) Change in ECCN, unit of quantity, or unit price, where necessary only for the purpose of conforming to an official revision in the CCL; or wording of the item description. This does not cover an actual change in the item to be shipped, or an increase in the total price or quantity on the license; or

* * * * *

PART 752—[AMENDED]

26. The authority citation for 15 CFR part 752 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp. p. 219; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 7, 2003, 68 FR 47833, August 11, 2003.

27. Section 752.3 is amended by revising paragraphs (a)(2) and (a)(3) to read as follows:

§ 752.3

Eligible items.

(a) * * *

(2) Items controlled by ECCNs 1C351, 1C352, 1C353, 1C354, 1C991, 1E001, 2B352, 2E001, 2E002, and 2E301 on the CCL controlled for CB reasons;

(3) Items controlled by ECCNs 1C350, 1C995, 1D390, 1E350, 1E351, 2B350, and 2B351 on the CCL that can be used in the production of chemical weapons precursors and chemical warfare agents, to destinations listed in Country Group D:3 (see Supplement No. 1 to part 740 of the EAR);

* * * * *

Dated: January 13, 2004.

Peter Lichtenbaum,

Assistant Secretary for Export Administration.