[Federal Register Volume 63, Number 22 (Tuesday, February 3, 1998)]
[Rules and Regulations]
[Pages 5448-5451]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2499]
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DEPARTMENT OF COMMERCE
Bureau of Export Administration
15 CFR Parts 740 and 742
[Docket No. 980113010-8010-01]
RIN 0694-AB65
Exports of High Performance Computers Under License Exception CTP
AGENCY: Bureau of Export Administration, Commerce.
ACTION: Interim rule with request for comments.
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SUMMARY: The Bureau of Export Administration is amending the Export
Administration Regulations (15 CFR parts 730-799) by revising the
requirements for exports and reexports of high performance computers.
This revision implements Sections 1211-1215 of the National Defense
Authorization Act (NDAA) for fiscal year 1998 (P.L. 105-85, 111 Stat.
1629), signed by the President on November 18, 1997.
Although the Export Administration Act (EAA) expired on August 20,
1994, the President invoked the International Emergency Economic Powers
Act and continued in effect, to the extent permitted by law, the
provisions of the EAA and the EAR in Executive Order 12924 of August
19, 1994, as extended by the President's notices of August 15, 1995 (60
FR 42767), August 14, 1996 (61 FR 42527) and August 15, 1997 (62 FR
43629).
DATES: This rule is effective February 3, 1998.
Comments: Comments on this rule must be received on or before March 20,
1998.
ADDRESSES: Electronic submission and status tracking of the notices
required by this rule will not be available until February 17, 1998.
Prior to that date, exporters and reexporters may contact the Bureau of
Export Administration at (202) 482-0899 or (202) 482-0436. After
February 17, exporters and reexporters may contact STELA at (202) 482-
2752. Written comments on this rule should be sent to Hillary Hess,
Director, Regulatory Policy Division, Bureau of Export Administration,
Department of Commerce, P.O. Box 273, Washington, DC 20044.
FOR FURTHER INFORMATION CONTACT: Hillary Hess, Director, Regulatory
Policy Division, Bureau of Export Administration, Telephone: (202) 482-
2440.
SUPPLEMENTARY INFORMATION:
Background
The National Defense Authorization Act (NDAA) for FY98 contains
provisions regarding exports and reexports of high performance
computers. The NDAA establishes requirements for advance notification
of exports and reexports of high performance computers and post-
shipment verifications of such exports and reexports.
[[Page 5449]]
Export Approvals for High Performance Computers (Sec. 1211)
Section 1211 of the NDAA requires advance notification of all
exports and reexports of computers with CTPs between 2,000 and 7,000
MTOPS to Computer Tier 3 countries. Previously, such computers were
eligible for export or reexport to civil end-users under License
Exception CTP without prior government review. License Exception CTP
prohibits exports, reexports, and retransfers to military or
proliferation end-users or end-uses under its terms, and provides that
such transactions require licenses. It also excludes from eligibility
items that the exporter or reexporter knows will be used to enhance the
CTP beyond the eligibility limit allowed to the country of destination.
These exclusions remain in effect; therefore, exporters or reexporters
who have knowledge of a military or proliferation end-user or end-use,
or of a prohibited enhancement, must not submit notifications and
continue to be ineligible to use License Exception CTP. Licenses
continue to be required for such exports. For CTP-eligible transactions
destined to Tier 3 countries, this rule adds the NDAA notification
requirement to the terms and conditions of License Exception CTP.
Exports and reexports of computers with CTPs greater than 7,000 MTOPS
to Tier 3 countries continue to require a license.
To comply with the requirements of the NDAA, exporters and
reexporters are now required to submit ``NDAA notices'' for each
transaction by completing the Multipurpose Application Form (BXA-748P)
including all the information required on that form for a license
application, except for selecting ``other'' as the purpose of the
application. This designator will automatically place the notice onto a
special review track. BXA will refer complete NDAA notices to the
Departments of Defense, Energy, State, and the Arms Control and
Disarmament Agency (ACDA) within 24 hours of date of registration of
the request. After February 17, 1998, when BXA completes the changes to
its system, NDAA notices may be submitted electronically using the
procedure for electronic submission of license applications. Before
that date, only paper submissions can be accepted.
Since the NDAA authorizes shipment of the computer ``if no
objection is raised within the 10-day period,'' any agency objections
must be received by Commerce within nine calendar days of referral. In
contrast to the Executive Order on License Processing, under which pre-
license checks or requests for additional information may stop the
clock, there is no provision for stopping the clock during this
procedure. However, BXA will not initiate the registration of NDAA
notice unless all the information on the form is complete. Imposition
of a license requirement as a result of an objection to an NDAA notice
does not constitute ``informing'' or ``knowledge'' for purposes of part
744. Similarly, an interagency decision not to impose a licensing
requirement does not excuse the exporter or reexporter from licensing
requirements based on knowledge of a prohibited end-use and end-user as
referenced in general prohibition five (part 736) and set forth in part
744.
Prior to February 17, 1998, BXA will notify exporters and
reexporters of the status of their notifications. After February 17,
the application control number on the NDAA notice will allow exporters
and reexporters to track their notices by calling STELA. STELA will
provide the date of registration of the NDAA notice and a notice
number. If no agencies raise objections within the 10-day period, STELA
will confirm that you may proceed with the transaction. BXA will issue
subsequent written confirmation. STELA will also advise the exporter or
reexporter if a license is required. The NDAA notice will then be
processed by BXA as a license application in accordance with the
procedures described in part 750, and the licensing policies set forth
in the Export Administration Regulations. Its NDAA notice number will
be changed to a license application number. At this time, BXA may
request additional information from the exporter or reexporter to
complete the processing of the license application.
Post-Shipment Verification of Export of High Performance Computers
(Sec. 1213)
The NDAA requires post-shipment verification of exports to Tier 3
countries of computers with a CTP greater than 2,000 MTOPS.
In order to comply with the post-shipment verification requirement,
each exporter must provide a written report to BXA within 30 days of
export. The report must include the following information: exporter's
name, address, and telephone number; the number of the NDAA notice or
the license number, whichever is applicable; date of export; end-user's
name, a point of contact, address, and telephone number; carrier; air
waybill or bill of lading number; commodity description; and quantity.
BXA is considering creating a new form that will incorporate these data
elements and replace the written report.
Additionally, BXA may require the exporter or exporter's agent to
keep records and provide information on any visit to the site he or she
conducts, such as for installation or servicing. When a license is
required, BXA will continue to require various safeguards by the
exporter or exporter's agent as a license condition.
Savings Clause
Shipments of items now subject to the NDAA notice requirement as a
result of this regulatory action that were on dock for loading, on
lighter, laden aboard an exporting carrier, or en route aboard a
carrier to a port of export pursuant to actual orders for export before
February 17, 1998 may be exported without submitting an NDAA notice up
to and including February 17, 1998. Any such items not actually
exported before midnight February 17, 1998, require an NDAA notice in
accordance with this regulation.
Rulemaking Requirements
1. This interim rule has been determined to be significant for
purposes of E.O. 12866.
2. Notwithstanding any other provision of law, no person is
required to, nor shall any person be subject to a penalty for failure
to comply with a collection of information, subject to the Paperwork
Reduction Act (PRA), unless that collection of information displays a
currently valid OMB Control Number. This rule involves collections of
information subject to the Paperwork Reduction Act of 1995 (44 U.S.C.
3501 et seq.). These collections have been approved by the Office of
Management and Budget under control number 0694-0088, ``Multi-Purpose
Application,'' which carries a burden hour estimate of 52.5 minutes per
submission. This rule contains two new information collection
requirements approved under control number 0694-0107, ``National
Defense Authorization Act'', Advance Notifications and Post-Shipment
Verification reports. Advance Notifications using the existing
Multipurpose Application Form (BXA-748P) require an estimated 52.5
minutes per submission. Reports in support of Post-Shipment
Verifications require 15 minutes per submission, whether the Post-
Shipment Verification is conducted on an export authorized under a
license or License Exception CTP.
3. This rule does not contain policies with Federalism implications
sufficient to warrant preparation of a Federalism assessment under
Executive Order 12612.
[[Page 5450]]
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 (Sec. 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 comments
will be considered in the development of final regulations.
Accordingly, the Department encourages interested persons who wish
to comment to do at the earliest possible time to permit the fullest
consideration of views.
The period for submission of comments will close March 20, 1998.
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 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. Communications from agencies of the United States
Government or foreign governments will not be available for public
inspection.
The public record concerning these regulations will be maintained
in the Bureau of Export Administration Freedom of Information Records
Inspection Facility, Room 4525, Department of Commerce, 14th Street and
Pennsylvania Avenue, N.W., Washington, D.C. 20230. Records in this
facility, including written public comments and memoranda summarizing
the substance of oral communications, may be inspected and copied in
accordance with regulations published in part 4 of Title 15 of the Code
of Federal Regulations. Information about the inspection and copying of
records at the facility may be obtained from Margaret Cornejo, Bureau
of Export Administration Freedom of Information Officer, at the above
address or by calling (202) 482-5653.
List of Subjects
15 CFR Parts 740
Administrative practice and procedure, Exports, Foreign trade,
Reporting and recordkeeping requirements.
15 CFR Part 742
Exports, Foreign trade.
Accordingly, parts 740 and 742 of the Export Administration
Regulations (15 CFR parts 730-799) are amended to read 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.;
E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; E.O. 13026, 61
FR 58767, 3 CFR, 1996 Comp., p. 228 (1997); Notice of August 15,
1995, 3 CFR, 1995 Comp. 501 (1996); Notice of August 14, 1996, 61 FR
42527, 3 CFR 1996 Comp., p. 298 (1997); Notice of August 13, 1997
(62 FR 43629, August 15, 1997); and P.L. 105-85, 111 Stat. 1629.
2. Section 740.7 is amended by adding a new paragraph (d)(4),
adding a sentence to the end of paragraph (e)(2), and revising
paragraph (f) to read as follows:
Sec. 740.7 Computers (CTP).
* * * * *
(d) * * *
(4) NDAA notification--(i) General requirement. The National
Defense Authorization Act (NDAA) of FY98 enacted on November 18, 1997
requires advance notification of all exports and reexports of computers
with CTPs between 2,000 and 7,000 MTOPS to Computer Tier 3 countries.
For each transaction destined to Computer Tier 3, prior to using
License Exception CTP, you must first notify BXA by submitting a
completed Multipurpose Application Form (BXA-748P). The Multipurpose
Application Form should be completed including all information required
for a license application according to the instructions described in
Supplement No. 1 to part 748 of the EAR, with two exceptions. You (the
applicant as listed in Block 14) shall in Block 5 (Type of Application)
mark the box ``Other.'' This designator will permit BXA to route the
NDAA notice into a special processing procedure. (Blocks 6 and 7,
regarding support documentation, may be left blank.) You must also
provide a notice using this procedure prior to exporting or reexporting
items that you know will be used to enhance beyond 2,000 MTOPS the CTP
of a previously exported or reexported computer. BXA will not initiate
the registration of an NDAA notice unless all information on the
Multipurpose Application form is complete.
(ii) Action by BXA. Within 24 hours of the registration of the NDAA
notice, BXA will refer the notice for interagency review. Registration
is defined as the point at which the notice is entered into BXA's
electronic system.
(iii) Review by other departments or agencies. The Departments of
Defense, Energy, State, and the Arms Control and Disarmament Agency
(ACDA) have the authority to review the NDAA notice. Objections by any
department or agency must be received by the Secretary of Commerce
within nine days of the referral. Unlike the provisions described in
Sec. 750.4(b) of the EAR, there are no provisions for stopping the
processing time of the NDAA notice. If, within 10 days after the date
of registration, any reviewing agency provides a written objection to
the export or reexport of a computer, License Exception CTP may not be
used. In such cases, you will be notified that a license is required
for the export or reexport. The NDAA notice will then be processed by
BXA as a license application in accordance to the provisions described
in Sec. 750.4 of the EAR, and the licensing policies set forth in the
Export Administration Regulations. Its NDAA notice number will be
changed to a license application number. BXA may at this time request
additional information to properly review the license application. If
BXA confirms that no objection has been raised within the 10-day period
(as described in paragraph (d)(4)(iv) of this section), you may proceed
with the transaction on the eleventh day following date of
registration. (Note that the fact that you have been advised to proceed
with the transaction does not exempt you from other licensing
requirements under the EAR, such as those based on knowledge of a
prohibited end-use or end-user as referenced in general prohibition
five (part 736 of the EAR) and set forth in part 744 of the EAR.)
[[Page 5451]]
(iv) Status of pending advance notification requests. You must
contact BXA's System for Tracking Export License Applications
(``STELA'') at (202) 482-2752. (See Sec. 750.5 of the EAR for
procedures to access information on STELA.) STELA will provide the date
of registration of the NDAA notice. If no departments or agencies raise
objections within the 10-day period, STELA will provide you on the
eleventh day following date of registration with confirmation that no
objections have been raised and you may proceed with the transaction.
BXA will subsequently issue written confirmation to you. If a license
is required, STELA will notify you that an objection has been raised
and a license is required. The NDAA notice will be processed as a
license application. In addition, BXA may provide notice of an
objection by telephone, fax, courier service, or other means.
(v) Post-shipment verification. This section outlines special post-
shipment reporting requirements for exporters of computers with a CTP
between 2,000 and 7,000 MTOPS to destinations in Computer Tier 3 under
the NDAA. These reporting requirements also apply when you know that
the items being exported will be used to enhance beyond 2,000 MTOPS the
CTP of a previously exported or reexported computer. Such reports must
be submitted in accordance with the provisions of this paragraph
(d)(4)(v), and records of such exports subject to the post-shipment
reporting requirements of this section, must be kept in accordance with
part 762 of the EAR.
(A) Information that must be included in each post-shipment report.
Within 30 days from date of export, the exporter must submit the
following information to BXA at the address listed in paragraph
(d)(4)(v)(B) of this section:
(1) Exporter name, address, and telephone number;
(2) NDAA notification number;
(3) Date of export;
(4) End-user name, point of contact, address, telephone number;
(5) Carrier;
(6) Air waybill or bill of lading number;
(7) Commodity description, quantities--listed by model numbers or
serial numbers; and
(8) Certification line for exporters to sign and date. The exporter
must certify that the information contained in the report is accurate
to the best of his or her knowledge.
(B) Mailing address and facsimile number. A copy of the post-
shipment report[s] required under paragraph (d)(4)(v)(A) of this
section shall be delivered to one of the following addresses. Note that
BXA will not accept reports sent C.O.D.
(1) For deliveries by U.S. postal service: Bureau of Export
Administration, U.S. Department of Commerce, P.O. Box 273, Attn: Tom
Andrukonis, Director OES, Washington, D.C. 20044.
(2) For courier deliveries: Bureau of Export Administration, U.S.
Department of Commerce, Attn: Tom Andrukonis, Director OES, Room 4065,
14th Street and Pennsylvania Ave., Washington, DC 20230.
(3) Facsimile: 202-482-0971.
* * * * *
(e) Restrictions.
* * * * *
(2) * * * Additionally, the end-use and end-user restrictions in
paragraph (d)(3) of this section must be conveyed to any consignee in
Computer Tier 3.
(f) Reporting requirements. In addition to the reporting
requirements set forth in paragraph (d) of this section, see Sec. 743.1
of the EAR for additional reporting requirements of certain items under
License Exception CTP.
PART 742--[AMENDED]
3. The authority citation for part 742 is revised to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
18 U.S.C. 2510 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a;
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. 12924, 59 FR 43437, 3 CFR,
1994 Comp., p. 917; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p.
950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228 (1997);
Notice of August 15, 1995, 3 CFR, 1995 Comp. 501 (1996); Notice of
August 14, 1996, 61 FR 42527, 3 CFR 1996 Comp., p. 298 (1997);
Notice of August 13, 1997 (62 FR 43629, August 15, 1997); and P.L.
105-85, 111 Stat. 1629.
4. Section 742.12 is amended:
a. By adding paragraph (b)(3)(i)(C); and
b. By adding a new paragraph (b)(3)(iv), as follows:
Sec. 742.12 High performance computers.
* * * * *
(b) * * *
(3) * * *
(i) * * *
(C) A license may be required to export or reexport computers with
a CTP between 2,000 and 7,000 MTOPS to countries in Computer Tier 3
pursuant to the NDAA (see Sec. 740.7(d)(4) of the EAR).
* * * * *
(iv) Post-shipment verification. This section outlines special
post-shipment reporting requirements for exporters of computers with a
CTP in excess of 2,000 MTOPS to destinations in Computer Tier 3 under
the NDAA. These reporting requirements also apply when you know that
the items being exported will be used to enhance beyond 2,000 MTOPS the
CTP of a previously exported or reexported computer. Such reports must
be submitted in accordance with the provisions of this paragraph
(b)(3)(iv), and records of such exports subject to the post-shipment
reporting requirements of this section, must be kept in accordance with
part 762 of the EAR.
(A) Information that must be included in each post-shipment report.
Within 30 days from date of export, the exporter must submit the
following information to BXA at the address listed in paragraph
(b)(3)(iv)(B) of this section:
(1) Exporter name, address, and telephone number;
(2) License number;
(3) Date of export;
(4) End-user name, point of contact, address, telephone number;
(5) Carrier;
(6) Air waybill or bill of lading number;
(7) Commodity description, quantities--listed by model numbers or
serial numbers; and
(8) Certification line for exporters to sign and date. The exporter
must certify that the information contained in the report is accurate
to the best of his or her knowledge.
(B) Mailing address and facsimile number. A copy of the post-
shipment report[s] required under paragraph (b)(3)(vi)(A) of this
section shall be delivered to one of the following addresses. Note that
BXA will not accept reports sent C.O.D.
(1) For deliveries by U.S. postal service: Bureau of Export
Administration, U.S. Department of Commerce, P.O. Box 273, Attn: Tom
Andrukonis, Director OES, Washington, D.C. 20044.
(2) For courier deliveries: Bureau of Export Administration, U.S.
Department of Commerce Attn: Tom Andrukonis, Director OES, Room 4065,
14th Street and Pennsylvania Ave., Washington, DC 20230.
(3) Facsimile: 202-482-0971.
* * * * *
Dated: January 28, 1998.
R. Roger Majak,
Assistant Secretary for Export Administration.
[FR Doc. 98-2499 Filed 2-2-98; 8:45 am]
BILLING CODE 3510-33-P