[Federal Register Volume 59, Number 59 (Monday, March 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7234]


[Federal Register: March 28, 1994]


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DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 771 and 785

[Docket No. 940384-4084]
RIN 0694-AA88


Exports to South Africa; Revision of Foreign Policy Controls

AGENCY: Bureau of Export Administration, Commerce.

ACTION: Final rule.

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SUMMARY: With the significant political changes underway in South 
Africa, the rationale for prohibiting all exports to South African 
military and police entities no longer applies. The controls necessary 
to implement the mandatory U.N. arms embargo against South Africa 
remain. In addition, restrictions on certain exports to the South 
African military and police continue. This final rule amends the Export 
Administration Regulations (EAR) by revising the export licensing 
policy for exports to South African military and police entities in the 
following ways: By clarifying exemptions from general prohibitions on 
certain technology and software; by revising policy to permit the 
consideration of certain license applications; and by updating the list 
of South African military and police entities in the special country 
policies and provisions. These changes, while not diminishing U.S. 
compliance with the U.N. mandatory embargo against South Africa, and 
while maintaining U.S. ability to implement U.N. voluntary controls on 
certain exports to the South African military and police, will allow 
U.S. businesses to begin to compete with foreign suppliers, who are no 
longer bound by similar restrictions in their own countries. Thus, 
although it will likely result in an increase in export license 
applications submitted, this rule will be generally beneficial to U.S. 
exporters.

EFFECTIVE DATE: This rule is effective March 28, 1994.

FOR FURTHER INFORMATION CONTACT: David Schlechty, Office of Technology 
and Policy Analysis, Bureau of Export Administration, Telephone: (202) 
482-4252.

SUPPLEMENTARY INFORMATION:

Background

    In conformity with the United Nations Security Council Resolutions 
of 1977 and 1986, the United States maintains an embargo on the export 
of arms, munitions and military equipment, and items used in their 
manufacture and maintenance to the Republic of South Africa, as well as 
on certain items to the South African military or police that have a 
military capacity and are intended for military purposes. These 
controls continue. Beyond these controls related to U.N. Security 
Council resolutions, the United States has also maintained an embargo 
on virtually all exports to South African military and police entities. 
The recent historic political changes in the Republic of South Africa 
argue against the continuation of such global restrictions. This rule 
modifies existing controls to allow certain exports to the South 
African military and police under an individual validated license. For 
example, applications to export food, medicine, or items to meet 
emergency humanitarian needs, prevent acts of unlawful interference 
with international civil aviation, or counter international narcotics 
trafficking will generally receive favorable consideration on a case-
by-case basis. Applications for export of items relating to arms, 
munitions, military equipment and their manufacture or maintenance, or 
that have a military capacity and are intended for military purposes, 
will be subject to either a strict or general policy of denial. All 
other exports will be considered on a case-by-case basis.
    Regardless of expanded opportunities to export under an individual 
validated license, return, repair or replacement commodities may not be 
exported under General License GLR at this time. Therefore, exporters 
should include an allowance for replacement parts on their original 
license applications. Repairs should be arranged in-country when 
practical, since GLR will not be available for returning the item to 
South Africa after repair elsewhere, and the need for a validated 
license could delay the return.
    Additionally, this rule clarifies the opportunity to use General 
License GTDU for exports destined to South African military and police 
entities of sales data that are the minimum necessary to support a 
proposal; operation technical data that are the minimum necessary to 
operate equipment authorized for export; or software updates (bug 
fixes) that do not enhance the capabilities of the initially authorized 
package. While such exports have been allowed under the provisions of 
Sec. 779.4(e), the availability of GTDU for these shipments was 
obscured by Sec. 771.2(c)(11), which broadly prohibits use of general 
licenses for exports to South African military and police entities. 
This rule clarifies the exemption of sales data, operation data and 
software updates from the general prohibitions.
    General License GIT may now be used for shipments in transit 
through the United States destined to the Republic of South Africa, 
provided that the commodities are not related to arms and munitions or 
destined for military and police entities.
    This rule also updates the list of military and police entities. 
This rule adds the company Denel (Pty) Ltd. and certain of its 
subsidiaries to the list of South African military and police entities, 
and removes Musgrave, a former subsidiary of Armscor, from the list. 
Denel was formed from several former Armscor subsidiaries, and produces 
a variety of products for the South African military as well as the 
civilian population.
    Finally, this rule removes remaining restrictions on exports to 
Walvis Bay. On February 28, 1994, South Africa returned Walvis Bay to 
Namibia.

Rulemaking Requirements

    1. This rule was not subject to review by Office of Management and 
Budget under Executive Order 12866.
    2. This rule involves collections of information subject to the 
Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). These 
collections have been approved by the Office of Management and Budget 
under control numbers 0694-0005, 0694-0007, and 0694-0010.
    3. This rule does not contain policies with Federalism implications 
sufficient to warrant preparation of a Federalism assessment under 
Executive Order 12612.
    4. Because a notice of proposed rulemaking and an opportunity for 
public comment are not required to be given for this rule by section 
553 of the Administrative Procedure Act (5 U.S.C. 553) or by any other 
law, under section 3(a) of the Regulatory Flexibility Act (5 U.S.C. 
603(a) and 604(a)) no initial or final Regulatory Flexibility Analysis 
has to be or will be prepared.
    5. 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. Further, no other law requires that a 
notice of proposed rulemaking and an opportunity for public comment be 
given for this rule.

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 Hillary 
Hess, Office of Technology and Policy Analysis, Bureau of Export 
Administration, Department of Commerce, P.O. Box 273, Washington, DC 
20044.

List of Subjects

15 CFR Part 771

    Exports, Reporting and recordkeeping requirements.

15 CFR Part 785

    Exports.

    Accordingly, parts 771 and 785 of the Export Administration 
Regulations (15 CFR parts 730-799) are amended as follows:
    1. The authority citation for 15 CFR part 771 continues to read as 
follows:

    Authority: Pub. L. 90-351, 82 Stat. 197 (18 U.S.C. 2510 et 
seq.), as amended; sec. 101, Pub. L. 93-153, 87 Stat. 576 (30 U.S.C. 
185), as amended; sec. 103, Pub. L. 94-163, 89 Stat. 877 (42 U.S.C. 
6212), as amended; secs. 201 and 201(11)(e), Pub. L. 94-258, 90 
Stat. 309 (10 U.S.C. 7420 and 7430(e)), as amended; Pub. L. 95-223, 
91 Stat. 1626 (50 U.S.C. 1701 et seq.); Pub. L. 95-242, 92 Stat. 120 
(22 U.S.C. 3201 et seq. and 42 U.S.C. 2139a); sec. 208, Pub. L. 95-
372, 92 Stat. 668 (43 U.S.C. 1354); Pub. L. 96-72, 93 Stat. 503 (50 
U.S.C. app. 2401 et seq.), as amended (extended by Pub. L. 103-10, 
107 Stat. 40); sec. 125, Pub. L. 99-64, 99 Stat. 156 (46 U.S.C. 
466c); E.O. 11912 of April 13, 1976 (41 FR 15825, April 15, 1976); 
E.O. 12002 of July 7, 1977 (42 FR 35623, July 7, 1977), as amended; 
E.O. 12058 of May 11, 1978 (43 FR 20947, May 16, 1978); E.O. 12214 
of May 2, 1980 (45 FR 29783, May 6, 1980); E.O. 12735 of November 
16, 1990 (55 FR 48587, November 20, 1990), as continued by Notice of 
November 12, 1993 (58 FR 60361, November 15, 1993); E.O. 12867 of 
September 30, 1993 (58 FR 51747, October 4, 1993); and E.O. 12868 of 
September 30, 1993 (58 FR 51749, October 4, 1993).


    2. The authority citation for 15 CFR part 785 continues to read as 
follows:

    Authority: Pub. L. 90-351, 82 Stat. 197 (18 U.S.C. 2510 et 
seq.), as amended; Pub. L. 95-223, 91 Stat. 1626 (50 U.S.C. 1701 et 
seq.); Pub. L. 95-242, 92 Stat. 120 (22 U.S.C. 3201 et seq. and 42 
U.S.C. 2139a); Pub. L. 96-72, 93 Stat. 503 (50 U.S.C. App. 2401 et 
seq.), as amended (extended by Pub. L. 103-10, 107 Stat. 40); E.O. 
12002 of July 7, 1977 (42 FR 35623, July 7, 1977), as amended; E.O. 
12058 of May 11, 1978 (43 FR 20947, May 16, 1978); E.O. 12214 of May 
2, 1980 (45 FR 29783, May 6, 1980); E.O. 12735 of November 16, 1990 
(55 FR 48587, November 20, 1990), as continued by Notice of November 
11, 1992 (57 FR 53979, November 13, 1992); E.O. 12867 of September 
30, 1993 (58 FR 51747, October 4, 1993); and E.O. 12868 of September 
30, 1993 (58 FR 51749, October 4, 1993).

PART 771--[AMENDED]

    3. Section 771.2 is amended by revising paragraph (c)(11) to read 
as follows:


Sec. 771.2   General provisions.

* * * * *
    (c) * * *
    (11) The exporter or reexporter knows or has reason to know that 
the item is for delivery, directly or indirectly, to or for use by or 
for military or police entities in the Republic of South Africa. This 
includes items for servicing equipment owned, controlled or used by or 
for such entities. However, this prohibition does not apply to exports 
of sales technical data, operation technical data, and software updates 
as described in Sec. 779.4(b)(1), (b)(2), and (b)(3) of this 
subchapter; or to generally available software as described in the 
General Software Note, Supplement No. 2 to Sec. 799.1 of this 
subchapter unless the exporter knows or has reason to know it would 
contribute to the manufacture or maintenance of items to which a strict 
policy of denial applies under Sec. 785.4(a)(5) of this subchapter, or 
to which a general policy of denial applies under Sec. 785.4(a)(6) of 
this subchapter. Note that ability to provide sales data does not 
confer a presumption that a license will be issued should an order be 
received.
* * * * *
    4. Section 771.4 is amended by revising paragraph (b)(3) to read as 
follows:


Sec. 771.4   General License GIT; intransit shipments

* * * * *
    (b) * * *
    (3) Commodities destined for the Republic of South Africa that are 
listed in Supplement No. 2 to part 779 of this subchapter, commodities 
described by any ECCN ending in ``18A'', or commodities for export to 
or for use by or for the South African military or police.
* * * * *

PART 785--[AMENDED]

    5. Section 785.4 is amended by revising paragraphs (a)(2) through 
(a)(6) and by removing paragraph (a)(7) to read as follows:


Sec. 785.4   Country Groups T & V.

    (a) * * *
* * * * *
    (2) An individual validated license is required for the export or 
reexport to the Republic of South Africa of any commodity, where the 
exporter or reexporter knows or has reason to know that the commodity 
will be sold to or used by or for military or police entities in South 
Africa or used to service equipment owned, controlled or used by or for 
such military or police entities.
    (3) An individual validated license is required for the export or 
reexport to the Republic of South Africa of software or technology--
except software or technology generally available to the public that 
meets the conditions of General License GTDA--where:
    (i) The software or technology relates to the commodities listed in 
Supplement No. 2 to part 779 of this subchapter; or
    (ii) The exporter or reexporter knows or has reason to know that 
the technology or software, or their direct product, are for delivery 
to or for use by or for military or police entities of the Republic of 
South Africa or for use in servicing equipment owned, controlled or 
used by or for these entities, with the following exceptions: (A) Sales 
technical data, operation technical data, and software updates as 
described in Sec. 779.4(b)(1), (b)(2), and (b)(3) of this subchapter; 
or
    (B) Generally available software as described in the General 
Software Note, Supplement No. 2 to Sec. 799.1 of this subchapter, 
unless the exporter knows or has reason to know it would contribute to 
the manufacture or maintenance of items to which a strict policy of 
denial applies under paragraph (a)(5) of this section, or to which a 
general policy of denial applies under paragraph (a)(6) of this 
section.
    (4) Parts, components, materials, and other commodities exported 
from the United States under either a general or validated export 
license may not be incorporated abroad into foreign-made end-products 
where it is known or there is reason to know that the end product will 
be sold to or used by or for military or police entities in the 
Republic of South Africa. (See Sec. 776.12(b)(4) of this subchapter for 
general exceptions and paragraph (a)(6) of this section for case-by-
case exceptions.)
    (5) Applications for validated licenses for arms, munitions, 
military equipment and materials, and materials and machinery for use 
in the manufacture and maintenance of such equipment, as described in 
Supplement No. 2 to part 779 of this subchapter, and related software 
or technology, will be subject to a strict policy of denial, in 
conformity with the embargo policy set out in paragraph (a)(1) of this 
section.
    (6) Licensing policy for items not subject to Sec. 785.4(a)(5) that 
are destined to or for use by or for the South African military or 
police is as follows:
    (i) Applications will generally be denied for items described by 
any ECCN ending in ``18A''; items that are or will be used to 
manufacture or maintain arms, munitions, military equipment, or 
paramilitary police equipment; and items that have military capacity 
and are intended for military purposes.
    (ii) Applications will generally be considered favorably on a case-
by-case basis for: (A) Food and other agricultural commodities;
    (B) Medicine, medical supplies, medical equipment, and parts and 
components therefor;
    (C) Items to be used in efforts to prevent acts of unlawful 
interference with international civil aviation;
    (D) Items to counter international narcotics trafficking; and
    (E) Items to be used to meet emergency humanitarian needs.
    (iii) All other applications will be considered on a case-by-case 
basis.
* * * * *
    6. Supplement No. 2 to part 785 is revised to read as follows:

Supplement No. 2 to Part 785--Interpretations

    (1) The Department has received inquiries as to whether certain 
entities in the Republic of South Africa are considered police or 
military entities and hence subject to the policies set forth in 
Sec. 785.4.
    (a) In addition to the military and police of the Republic of South 
Africa, the following entities are considered to be police and military 
entities:

Aeronautical Systems Technology (AEROTEK) Division of the Council for 
Scientific and Industrial Research (CSIR)
ARMSCOR (Armaments Development and Production Corporation) and all of 
its subsidiaries (including Specialist B Vehicles (SBV), Institute of 
Maritime Technology, and Milistan)
Denel (Pty) Ltd. (including the following of its subsidiaries: Advena, 
Armatron, Atlas Aircraft, Eloptro, Gennan, Gerotek, Infoplan, Kentron, 
Lyttleton Engineering Works (LIW), Mechem, Naschem, Nimrod 
International, Overberg Test Range (OTR), Pretoria Metal Pressing 
(PMP), Simera, Somchem, Swartklip Products)
Department of Correctional Services
``Homeland'' Police and Armed Forces
National Intelligence Services
Weapons Research activities of the Council for Scientific and 
Industrial Research (CSIR)

    (b) This list is not necessarily inclusive, and is subject to 
change. When dealing with any South African entity, exporters should be 
sensitive to the potential for prohibited diversion of their products 
to police and military entities, and the potential for illegal use of 
their exports in the manufacture or maintenance of arms or related 
materials.
Sue E. Eckert,
Assistant Secretary for Export Administration.
[FR Doc. 94-7234 Filed 3-25-94; 8:45 am]
BILLING CODE 3510-DT-P