[Federal Register Volume 64, Number 214 (Friday, November 5, 1999)]
[Rules and Regulations]
[Pages 60339-60342]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28855]


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DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 738, 740, and 746

[Docket No. 990923261-9261-01]
RIN 0694-AB99


Exports to Kosovo

AGENCY: Bureau of Export Administration, Commerce.

ACTION: Final rule.

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SUMMARY: The Bureau of Export Administration (BXA) is amending the 
Export Administration Regulations (EAR) to exempt the Serbian province 
of Kosovo (``Kosovo'') from certain license requirements for exports 
and reexports to Serbia of items subject to the Export Administration 
Regulations (EAR).

EFFECTIVE DATE: This rule is effective November 5, 1999.

FOR FURTHER INFORMATION CONTACT: James A. Lewis, Director, Office of 
Strategic Trade and Foreign Policy Controls, Bureau of Export 
Administration, Telephone: (202) 482-4196.

SUPPLEMENTARY INFORMATION:

Background

    In Resolution 1203 (adopted on October 24, 1998), the United 
Nations Security Council (UNSC) expressed alarm at what it described as 
the continuing grave humanitarian situation throughout Kosovo and the 
impending humanitarian catastrophe there. In response to the Serbian 
government's continued ethnic cleansing in its Kosovo province and its 
rejection of the proposed peace agreement accepted by the Kosovars, 
NATO (including the United States) took military action intended to 
halt the mass killing and dislocation of ethnic Albanians in Kosovo and 
to prevent a widening of the conflict.
    In response to the situation in Kosovo, Executive Order 13121 of 
April 30, 1999, tightened existing U.S. economic sanctions against 
Serbia, including the province of Kosovo. On May 4, 1999, BXA published 
a rule amending the

[[Page 60340]]

EAR to require a license for exports and reexports of all items subject 
to the EAR to Serbia, including Kosovo (64 FR 24018). Executive Order 
13121 delegated authority to administer the sanctions to the Department 
of the Treasury's Office of Foreign Assets Control (OFAC). By issuing 
General License 3 under the Kosovo Sanctions Regulations (31 CFR Part 
586) on May 20, 1999, OFAC generally authorized certain transactions 
incident to exports licensed by BXA, thereby eliminating the need to 
seek separate authorization from two agencies for most export and 
reexport transactions.
    In the wake of the cessation of hostilities and the withdrawal of 
Serbian troops from Kosovo, the United States Government is by this 
rule exempting Kosovo from the additional license requirements imposed 
on Serbia by the May 4, 1999, rule, thus returning Kosovo to the status 
it had prior to that date. General License No. 4, issued by the Office 
of Foreign Assets Control (OFAC) of the Department of the Treasury on 
August 17, 1999, effects a complementary exemption of Kosovo from 
OFAC's ``Federal Republic of Yugoslavia (Serbia and Montenegro) Kosovo 
Sanctions Regulations' (see 31 CFR part 586).
    For purposes of the EAR, this rule eliminates the term ``Federal 
Republic of Yugoslavia'' and establishes Serbia, Kosovo, and Montenegro 
as distinct destinations under the EAR. This distinction does not 
address issues of sovereignty; it merely clarifies the applicability of 
export controls under the EAR to different destinations. Although 
comprehensive sanctions on Serbia (excluding Kosovo) remain in place, 
both Kosovo and Montenegro retain, for License Exception eligibility 
purposes, membership in ``Country Group B'' (see Supplement No. 1 to 
part 740) and ``Computer Tier 3'' (see Sec. 740.7). Serbia, Kosovo, and 
Montenegro are now listed separately in the Commerce Country Chart (see 
Supplement No. 1 to part 738).
    On July 14, 1998, BXA implemented an embargo on arms and arms-
related items in the Export Administration Regulations (EAR) that 
applied to Serbia (including Kosovo) and Montenegro. The arms embargo 
continues in effect, and this rule leaves provisions regarding the arms 
embargo unaltered, except that ``Federal Republic of Yugoslavia (Serbia 
and Montenegro)'' is revised to read ``Serbia, Kosovo, and 
Montenegro.''
    Although the Export Administration Act (EAA) expired on August 20, 
1994, the President invoked the International Emergency Economic Powers 
Act (50 U.S.C. 1701 et seq.) and continued in effect the EAR, and to 
the extent permitted by law, the provisions of the EAA 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), August 
13, 1997 (62 FR 43629), August 13, 1998 (63 FR 44121), and August 10, 
1999 (64 FR 44101, August 13, 1999).

Rulemaking Requirements

    1. This final rule has been determined to be significant for 
purposes of E.O. 12866.
    2. This rule involves a collection 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 number 0694-0088, ``Multi-Purpose Application,'' which 
carries a burden hour estimate of 40 minutes to prepare and submit 
electronically and 45 minutes to submit manually on form BXA-748P. 
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.
    3. This rule does not contain policies with Federalism implications 
sufficient to warrant preparation of a Federalism assessment under 
Executive Order 12612.
    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 (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 final 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.
    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, Regulatory Policy Division, Bureau of Export Administration, 
Department of Commerce, P.O. Box 273, Washington, DC 20044.

List of Subjects

15 CFR Part 738

    Administrative practice and procedure, Exports, Foreign trade.

15 CFR Part 740

    Administrative practice and procedure, Exports, Foreign trade, 
Reporting and recordkeeping requirements.

15 CFR Part 746

    Embargoes, Exports, Foreign trade, Reporting and recordkeeping 
requirements.

    Accordingly, parts 738, 740, and 746 of the Export Administration 
Regulations (15 CFR parts 730-99) are amended as follows:

    1. The authority citation for 15 CFR part 738 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; E.O. 12924, 59 FR 43437, 3 CFR, 1994 
Comp., p. 917; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; 
and Notice of August 10, 1999, 64 FR 44101 (August 13, 1999).

    2. The authority citation for 15 CFR 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; and Notice of August 10, 1999, 
64 FR 44101 (August 13, 1999).

    3. The authority citation for part 746 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; and Notice of August 10, 1999, 
64 FR 44101 (August 13, 1999).

PART 738--[AMENDED]

    4. Supplement No. 1 to Part 738 is amended by removing ``Serbia and 
Montenegro'' and adding, in alphabetical order, ``Kosovo,'' 
``Montenegro,'' and ``Serbia,'' to read as follows:
Supplement No. 1 to Part 738--COMMERCE COUNTRY CHART
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[[Page 60341]]



                                                                                     Commerce Country Chart
                                                                                      [Reason for Control]
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                                                            Chemical & Biological       Nuclear         National     Missile     Regional      Firearms       Crime  Control           Anti-
                                                                   Weapons         Nonproliferation     Security       Tech      Stability    Convention ------------------------    Terrorism
                        Countries                         -----------------------------------------------------------------------------------------------                        ---------------
                                                            CB  1   CB  2   CB  3   NP  1    NP  2    NS  1   NS  2   MT  1    RS  1   RS  2     FS  1     CC  1   CC  2   CC  3   AT  1   AT  2
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Kosovo (Serbian province of).............................      X       X                X                X       X        X       X       X                   X               X
Montenegro...............................................      X       X                X                X       X        X       X       X                   X               X
Serbia (not including Kosovo)............................          See part 746 of the EAR to determine whether a license is required in order to export or reexport to this destination.
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PART 740--[AMENDED]

    5. Section 740.7 is amended by removing ``Serbia & Montenegro'' 
from paragraph (d)(1) and by adding, in alphabetical order, ``Kosovo 
(Serbian province of),'' ``Montenegro,'' and ``Serbia''.
    6. Supplement No. 1 to part 740 is amended by removing ``Serbia & 
Montenegro'' from the list of ``Country Group B'' countries and by 
adding, in alphabetical order, ``Kosovo (Serbian province of)'' and 
``Montenegro''.

PART 746--[AMENDED]

    7. Section 746.9 is revised to read as follows:


Sec. 746.9  Serbia, Kosovo, and Montenegro.

    The Department of Commerce maintains a comprehensive embargo on 
exports and reexports to Serbia, excluding the Serbian province of 
Kosovo (``Kosovo''). For purposes of the EAR, Serbia (excluding 
Kosovo), Kosovo, and Montenegro are separate destinations under the 
EAR. Additionally, a United Nations mandated arms embargo applies to 
certain items destined to Serbia, Kosovo, and Montenegro.
    (a) Serbia. (1) License requirements. You will need a license to 
export or reexport all items subject to the EAR to Serbia, except as 
specified in paragraph (a)(3) of this section. This requirement does 
not apply to Kosovo or Montenegro; controls set forth in other parts of 
the EAR (e.g., the Commerce Country Chart) remain in effect for items 
destined to Kosovo or Montenegro.
    (2) Licensing policy. Applications for export or reexport of all 
items subject to the EAR to Serbia will be reviewed on a case-by-case 
basis, with a presumption of denial for any items other than 
humanitarian items. BXA will approve sales of agricultural commodities 
and products, medicine, and medical equipment for civilian end-use when 
appropriate safeguards can be developed to prevent diversion to 
military, paramilitary or political use.
    (3) License Exceptions. Items consigned to and for use by personnel 
and agencies of the U.S. Government under License Exception GOV (see 
Sec. 740.11(b)(2) of the EAR) and individual gift parcels under License 
Exception GFT (see Sec. 740.12(a) of the EAR) may be exported or 
reexported to Serbia, and temporary exports or reexports by the news 
media may be made to Serbia under License Exception TMP (see 
Sec. 740.9(a)(2)(viii) of the EAR). No other License Exceptions are 
available for Serbia.
    (b) Serbia, Kosovo, and Montenegro. (1) License requirements. Under 
Executive Order 12918 of May 26, 1994 (59 FR 28205, 3 CFR, 1994 Comp., 
p. 899) (which authorizes the Secretary of State and the Secretary of 
Commerce, under section 5 of the United Nations Participation Act and 
other authorities available to the respective Secretaries, to take all 
actions necessary to implement any arms embargo mandated by resolution 
of the United Nations Security Council), and in conformity with United 
Nations Security Council (UNSC) Resolution 1160 of March 31, 1998, an 
embargo applies to the sale or supply to Serbia, Kosovo, or Montenegro 
of arms and related materiel of all types and regardless of origin, 
such as weapons and ammunition, military vehicles and equipment, and 
spare parts for such items. You will therefore need a license for the 
sale, supply or export to Serbia, Kosovo, or Montenegro from the United 
States of embargoed items, as listed in paragraphs (b)(1)(i) and (ii) 
of this section. You will also need a license for the sale, supply, 
export or reexport to Serbia, Kosovo, or Montenegro of such items by 
any United States person in any foreign country or other location. 
(Reexport controls imposed under this paragraph (b)(1) apply only to 
reexports by U.S. persons. Reexport controls on U.S.-origin items to 
Serbia, Kosovo, or Montenegro set forth in other parts of the EAR 
remain in effect.) You will also need a license for the use of any 
U.S.-registered aircraft or vessel to supply or transport to Serbia, 
Kosovo, or Montenegro any such items. These requirements apply to 
embargoed items specified in paragraphs (b)(1)(i) and (b)(1)(ii) of 
this section, regardless of origin.
    (i) Crime Control and Detection Equipment as identified on the CCL 
under CC Columns No. 1, 2 or 3 in the Country Chart column of the 
``License Requirements'' section of the applicable ECCN.
    (ii) Items described by ECCNs ending in ``018''; and 0A982, 0A983, 
0A984, 0A985, 0A986, 0A988, 0A989, 0B986, 0E984, 1A005, 1A984, 1C998, 
2A993, 3A980, 3A981, 3D980, 3E980, 4A980, 4D980, 4E980, 5A980, 6A002, 
6A003.b.3 and b.4, 6E001, 6E002, 9A980, and 9A991.a.
    (2) Date of embargo. The licensing requirements in paragraph (b) of 
this section were effective on July 14, 1998.
    (3) License policy. Applications for export or reexport of all 
items listed in paragraphs (b)(1)(i) and (ii) of this section are 
subject to a general policy of denial. Consistent with United Nations 
Security Council Resolution 1160, this embargo is effective 
notwithstanding the existence of any rights or obligations conferred or 
imposed by any international agreement or any contract entered into or 
any license or permit granted prior to July 14, 1998, except to the 
extent provided in regulations, orders, directives or licenses that may 
be issued in the future under Executive Order 12918 or under the EAR.
    (c) Related controls. The Department of State, Office of Defense 
Trade Controls, maintains related controls on arms and military 
equipment under the International Traffic in Arms Regulations (22 CFR 
parts 120 through 130). You should also contact the Department of the 
Treasury's Office of Foreign Assets Control concerning any restrictions 
which might apply to U.S. persons involving financial transactions with 
Serbia, Kosovo, or Montenegro, including those transactions related to 
the export or reexport of services and non-U.S.-origin items.


[[Page 60342]]


    Dated: October 28, 1999.
R. Roger Majak,
Assistant Secretary for Export Administration.
[FR Doc. 99-28855 Filed 11-4-99; 8:45 am]
BILLING CODE 3510-DT-P