[Federal Register Volume 63, Number 56 (Tuesday, March 24, 1998)]
[Rules and Regulations]
[Pages 14028-14030]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-7493]


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DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 770 and 774

[Docket No. 980219044-8044-01]
RIN 0694-AB66


Revision To ECCN 1C350 (Mixtures): Removal of Solvent Free Basis 
Calculation Requirement and Trace Quantity Exemption

AGENCY: Bureau of Export Administration, Commerce.

ACTION: Final rule.

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SUMMARY: Chemicals capable of being used as precursors for chemical 
weapons agents are controlled for export on the Commerce Control List 
under Export Control Classification Number 1C350. Note 2 of the License 
Requirement Notes section of ECCN

[[Page 14029]]

1C350 describes the three tier de minimis exemption for mixtures that 
contain these controlled chemicals. The de minimis exemption is based 
on the weight percentage (0%, 10%, and 25%) of these controlled 
chemicals within the mixture calculated on a ``solvent free basis''. 
This rule removes the requirement to calculate the weight percentage on 
a ``solvent free basis.'' Therefore, the de minimis exemption for 
mixtures will now be based on the weight percentage of controlled 
chemicals calculated on the absolute (total) weight of the mixture.
    The removal of the ``solvent free basis'' calculation requirement 
eliminates the necessity of the ``trace quantity'' exemption. The trace 
quantity exemption permitted exports of mixtures of concentrations of 
no more than 10,000 parts by weight per million of certain controlled 
chemicals. Therefore, the ``trace quantity'' exemption is removed.
    Although the EAA expired on August 20, 1994, the President, 
invoking the International Emergency Powers Act (IEEPA), continued in 
effect the export control system in place under the provisions of the 
Act and the Export Administration Regulations, to the extent permitted 
by law (Executive Order 12924 of August 19, 1994 and Notices of August 
15, 1995, August 14, 1996 and August 13, 1997).

EFFECTIVE DATE: March 24, 1998.

FOR FURTHER INFORMATION CONTACT: For questions of a technical nature, 
contact Mr. Jim Seevaratnam, Office of Chemical and Biological Controls 
and Treaty Compliance, at (202) 482-3343 or facsimile (202) 482-0751.
    For questions of a general nature, call Sharron Cook, Regulatory 
Policy Division, at (202) 482-2440.

SUPPLEMENTARY INFORMATION:

Background

    The Australia Group (AG) recently held its annual consultations on 
ways to prevent the proliferation of chemical and biological weapons.
    The AG, an informal arrangement between 30 countries and the 
European Commission, was initiated by Australia in 1985, after the 
United Nations discovered that chemical weapons had been used in the 
Iran-Iraq war. The AG's participants include: Argentina, Australia, 
Austria, Belgium, Canada, the Czech Republic, Denmark, the European 
Commission, Finland, France, Germany, Greece, Hungary, Iceland, 
Ireland, Italy, Japan, Korea (the Republic of), Luxembourg, 
Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovak 
Republic, Spain, Sweden, Switzerland, United Kingdom and the United 
States.
    In 1994, in accordance with AG policy, BXA revised Note 2 to former 
ECCN 1C60 (currently 1C350) to establish a three-tiered approach to 
requiring licenses for mixtures containing controlled chemicals (59 FR 
52685 October 19, 1994). That revision permitted export and reexports 
without a license when the amount of a controlled chemical in the 
mixture did not exceed a specified weight percentage (0% for tier 1, 
10% for tier 2, 25% for tier 3). The calculation was done on a 
``solvent free basis'', meaning that the amount of the solvent had to 
be subtracted before the weight percentage of the controlled chemical 
could be determined. This method of calculation proved difficult to 
implement for both exporters and other AG member governments. At the 
October 1997 session, the AG decided to change the method of 
calculation from ``solvent free basis'' to ``absolute weight.'' This 
change will simplify calculation and improve the coordination of the 
mixtures policy among AG members, while not compromising our 
nonproliferation objectives.

Rulemaking Requirements

    1. This final rule has been determined to be not significant for 
purposes of 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 0694-0086,'Sample Shipment quarterly report,'' 
which carries a burden hour estimate of 35 minutes per submission; and 
0694-0088, ``Multi-Purpose Application,'' which carries a burden hour 
estimate of 52.5 minutes per submission. There will be a decrease of 
approximately 100 Multi-Purpose Applications per year as a result of 
the revisions in this rule. Send comments on burden, or any other 
aspect of these collections of information to Linda Engelmeier, 
Departmental Clearance Officer, Department of Commerce, Room 5327, 14th 
and Constitution Avenue, NW, Washington DC 20230, and to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Washington, DC 20503 (Attention: BXA Desk Officer).
    3. Notwithstanding any other provision of law, no person is 
required to respond 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, unless that collection of 
information displays a currently valid OMB Control Number.
    4. This rule does not contain policies with Federalism implications 
sufficient to warrant preparation of a Federalism assessment under 
Executive Order 12612.
    5. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring notice of proposed rulemaking, an 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 (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. 601et 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, Regulatory Policy Division, Office of Exporter Services, Bureau 
of Export Administration, Department of Commerce, P.O. Box 273, 
Washington, D.C. 20044.

List of Subjects

15 CFR Part 770

    Exports.

15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

    Accordingly, parts 770 and 774 of the Export Administration 
Regulations (15 CFR parts 730-799) are amended as follows:
    1. The authority citation for 15 CFR Part 770 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 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. 228 (1997); Notice of August 15, 1995, 3 
CFR, 1995 Comp. 501 (1996); Notice of August 14, 1996, 3 CFR, 1996 
Comp. 298 (1997); Notice of August 13, 1997 (62 FR 43629, August 15, 
1997).

    2. The authority citation for 15 CFR 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; Sec. 201, Pub. L. 104-
58, 109 Stat. 557 (30 U.S.C. 185(s)); 30 U.S.C. 185(u); 42 U.S.C.

[[Page 14030]]

2139a; 42 U.S.C. 6212; 43 U.S.C. 1354; 46 U.S.C. app. 466c; 50 
U.S.C. app. 5; E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; 
E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp. 228 (1997); Notice of 
August 15, 1995, 3 CFR, 1995 Comp. 501 (1996); Notice of August 14, 
1996, 3 CFR, 1996 Comp. 298 (1997); Notice of August 13, 1997 (62 FR 
43629, August 15, 1997).

PART 770--[AMENDED]


Sec. 770.4  [Removed]

    3. Part 770 is amended by removing Sec. 770.4, ``Interpretations 
related to chemical mixtures--de minimis exceptions examples.''

PART 774--[AMENDED]

    4. Supplement No. 1 to part 774 (Commerce Control List), Category 1 
(Materials, Chemicals, ``Microorganisms'', & ``Toxins''), is amended by 
revising the License Requirements section of ECCN 1C350, to read as 
follows:
    Supplement No. 1 to Part 774--the Commerce Control List
* * * * *
    Category 1--Materials, Chemicals, ``Microorganisms'', & ``Toxins''
* * * * *
    C. Materials
* * * * *


1C350  Chemicals that may be used as precursors for toxic chemical 
agents, as follows (see List of Items Controlled).

License Requirements

    Reason for Control: CB, AT

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               Control(s)                         Country chart         
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CB applies to entire entry.............  CB Column 2.                   
AT applies to entire entry.............  AT Column 1.                   
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License Requirement Notes:

    1. SAMPLE SHIPMENTS: Certain sample shipments of chemicals 
controlled under ECCN 1C350 may be made without a license, as 
provided by the following:
    a. Chemicals Not Eligible: The following chemicals are not 
eligible for sample shipments: 0-Ethyl-2-diisopropylaminoethyl 
methylphosphonite (QL) (C.A.S. #57856-11-8), Ethylphosphonyl 
difluoride (C.A.S. #753-98-0), and Methylphosphonyl difluoride 
(C.A.S. #676-99-3).
    b. Countries Not Eligible: The following countries are not 
eligible to receive sample shipments: Cuba, Iran, Iraq, Libya, North 
Korea, Sudan, Syria.
    c. Sample Shipments: A license is not required for sample 
shipments when the cumulative total of these shipments does not 
exceed a 55-gallon container or 200 kg of each chemical to any one 
consignee per calendar year. Multiple sample shipments, in any 
quantity, not exceeding the cumulative totals indicated in this 
paragraph may be exported without a license, in accordance with the 
provisions of this Note 1. A consignee that receives a sample 
shipment under this exclusion may not resell, transfer or reexport 
the sample shipment, but may use the sample shipment for any other 
legal purpose unrelated to chemical weapons. However, a sample 
shipment received under this exclusion remains subject to all 
General Prohibitions including the end-use restriction described in 
Sec. 744.4 of the EAR.
    d. The exporter is required to submit a quarterly written report 
for shipments of samples made under this Note 1. The report must be 
on company letterhead stationery (titled ``Report of Sample 
Shipments of Chemical Precursors'' at the top of the first page) and 
identify the chemical(s), Chemical Abstract Service Registry 
(C.A.S.) number(s), quantity(ies), the ultimate consignee's name and 
address, and the date exported. The report must be sent to the U.S. 
Department of Commerce, Bureau of Export Administration, P.O. Box 
273, Washington, DC 20044, Attn: ``Report of Sample Shipments of 
Chemical Precursors''.
    2. MIXTURES: Mixtures controlled by this entry that contain 
certain concentrations of precursor and intermediate chemicals are 
subject to the following licensing requirements:
    a. A license is required, regardless of the concentrations in 
the mixture, for the following chemicals: 0-Ethyl-2-
diisopropylaminoethyl methylphosphonite (QL) (C.A.S.57856-
11-8), Ethylphosphonyl difluoride (C.A.S.753-98-0) and 
Methylphosphonyl difluoride (C.A.S.676-99-3);
    b. A license is required when at least one of the following 
chemicals constitutes more than 10 percent of the weight of the 
mixture: Arsenic trichloride (C.A.S.#7784-34-1), Benzilic acid 
(C.A.S.#76-93-7), Diethyl ethylphosphonate (C.A.S.#78-38-6), Diethyl 
methylphosphonite (C.A.S.#15715-41-0), Diethyl-N,N-
dimethylphosphoroamidate (C.A.S.#2404-03-7), N,N-Diisopropyl-beta-
aminoethane thiol (C.A.S.#5842-07-9), N,N-Diisopropyl-2-aminoethyl 
chloride hydrochloride (C.A.S.#4261-68-1), N,N-Diisopropyl-beta-
aminoethanol (C.A.S.#96-80-0), N,N-Diisopropyl-beta-aminoethyl 
chloride (C.A.S.#96-79-7), Dimethyl ethylphosphonate (C.A.S.#6163-
75-3), Dimethyl methylphosphonate (C.A.S.#756-79-6), 
Ethylphosphonous dichloride [Ethylphosphinyl dichloride] 
(C.A.S.#1498-40-4), Ethylphosphonus difluoride [Ethylphosphinyl 
difluoride] (C.A.S.#430-78-4), Ethylphosphonyl dichloride 
(C.A.S.#1066-50-8), Methylphosphonous dichloride [Methylphosphinyl 
dicloride] (C.A.S.#676-83-5), Methylphosphonous difluoride 
[Methylphosphinyl difluoride] (C.A.S.#753-59-3), Methylphosphonyl 
dichloride (C.A.S.#676-97-1), Pinacolyl alcohol (C.A.S.#464-07-3), 
3-Quinuclidinol (C.A.S.#1619-34-7), and Thiodiglycol (C.A.S.#111-48-
8) (Related ECCN: 1C995);
    c. A license is required when at least one of all other 
chemicals in the List of Items Controlled constitutes more than 25 
percent of the weight of the mixture(related ECCN: 1C995); and
    d. A license is not required under this entry for mixtures when 
the controlled chemical is a normal ingredient in consumer goods 
packaged for retail sale for personal use. Such consumer goods are 
controlled by ECCN EAR99.
    Note to Mixtures: Calculation of concentrations of AG-controlled 
chemicals:
    a. Exclusion. No chemical may be added to the mixture (solution) 
for the sole purpose of circumventing the Export Administration 
Regulations;
    b. Absolute Weight Calculation. When calculating the percentage, 
by weight, of components in a chemical mixture, include all 
components of the mixture, including those that act as solvents;
    c. Example.

11% chemical listed in paragraph b. of Note 2
39% chemical not listed in Note 2
50% Solvent
100% Mixture
11/100 = 11% chemical listed in paragraph b. of Note 2.

    In this example, a license is required because a chemical listed 
in paragraph b. of Note 2 constitutes more than 10 percent of the 
weight of the mixture.
    3. COMPOUNDS: A license is not required under this entry for 
chemical compounds created with any chemicals identified in this 
ECCN 1C350, unless those compounds are also identified in this 
entry.
    Technical Notes: 1. For purposes of this entry, a ``mixture'' is 
defined as a solid, liquid or gaseous product made up of two or more 
components that do not react together under normal storage 
conditions.
    2. The scope of this control applicable to Hydrogen Fluoride 
(Item 25 in List of Items Controlled) includes its liquid, gaseous, 
and aqueous phases, and hydrates.
* * * * *
    Dated: March 17, 1998.
R. Roger Majak,
Assistant Secretary for Export Administration.
[FR Doc. 98-7493 Filed 3-23-98; 8:45 am]
BILLING CODE 3510-33-P