[Federal Register Volume 66, Number 245 (Thursday, December 20, 2001)]
[Proposed Rules]
[Pages 65666-65667]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31322]


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DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 738 and 742

[Docket No. 011019257-1257-01]
RIN 0694-AC48


Removal of Licensing Exemption for Exports and Reexports of 
Missile Technology-Controlled Items Destined to Canada

AGENCY: Bureau of Export Administration, Commerce.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Bureau of Export Administration (BXA) is reviewing the 
existing license exemption contained within the Export Administration 
Regulations (EAR) for the export of missile technology (MT)-controlled 
items to Canada, because of the recommendations contained in the 
Government Accounting Office Report entitled: ``Export Controls: 
Regulatory

[[Page 65667]]

Change Needed to Comply with Missile Technology Licensing 
Requirements'' (GA-01-530). BXA is seeking comments on how removing the 
existing licensing exemption for MT-controlled exports to Canada would 
affect industry and more specifically the exporting community.

DATES: Comments must be received by February 19, 2002.

ADDRESSES: Written comments (three copies) should be sent to Sharron 
Cook, Regulatory Policy Division, Office of Exporter Services, Bureau 
of Export Administration, Department of Commerce, 14th and Pennsylvania 
Avenue, NW, PO Box 273, Room 2705, Washington, DC 20230; E-Mailed to: 
[email protected]; or faxed to 202-482-3355.

FOR FURTHER INFORMATION CONTACT: Steven Goldman, Director, Office of 
Nonproliferation Controls and Treaty Compliance, Bureau of Export 
Administration, Telephone: (202) 482-4188. Copies of the referenced GAO 
Report are available at the GAO website: http://www.gao.gov.

SUPPLEMENTARY INFORMATION:

Background

    The Government Accounting Office (GAO) Report entitled: ``Export 
Controls: Regulatory Change Needed to Comply with Missile Technology 
Licensing Requirements'' (GA-01-530), recommended that the Department 
of Commerce amend the Export Administration Regulations (EAR) to 
require a license for the export of dual-use items controlled pursuant 
to the Missile Technology Control Regime (MTCR) to Canada. The GAO 
based its recommendation on a provision in the National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 1991, which amended the 
Export Administration Act (EAA) of 1979 to require a license for any 
export of dual-use Missile Technology Control Regime (MTCR) controlled 
goods or technology to any country. In 1991, the Department of Commerce 
implemented the NDAA requirements in EAR by controlling MTCR Annex 
items on the Commerce Control List (CCL) under a new designated reason 
for control, ``missile technology (MT)'' and generally requiring a 
license for the export or reexport of these items and technologies. 
Many of these items were already on the CCL and controlled under 
foreign policy or national security reasons. However, the Department of 
Commerce did not revise the EAR's existing license exemption for 
exports to Canada to require licenses for MT-controlled items to 
Canada. The license exemption for Canada existed in the EAR many years 
prior to the enactment of the MT provisions of the EAA. Since the Hyde 
Park Declaration of 1941, the United States has authorized nearly all 
dual-use goods intended for consumption in Canada to be exported 
without a license, although any reexport of U.S.-origin items 
controlled for MT concerns from Canada would require a license from the 
U.S. Government. The Department of Commerce is interested in evaluating 
the impact on U.S. exporters of removing the existing licensing 
exemption for MT-controlled exports to Canada.
    The current missile technology (MT) controls maintained by the 
Bureau of Export Administration (BXA) are set forth in the Export 
Administration Regulations (EAR), parts 742 (CCL Based Controls) and 
744 (End-User and End-Use Based Controls). A regulatory implementation 
would entail adding an ``X'' in the row for Canada under the column 
from ``MT 1'' in the ``Missile Tech'' column of Supplement No. 1 to 
part 738, Commerce Country Chart. In addition, section 742.5 of the EAR 
would be revised to remove the phrase ``except Canada'' in the third 
sentence of paragraph (a)(1).
    To ensure maximum public participation in the review process, 
comments are solicited for the next 60 days on the removal of the 
existing licensing exemption for the export of MT-controlled goods and 
technologies to Canada. BXA is particularly interested in the 
experience of individual exporters with the licensing exemption for MT-
controlled exports to Canada, with emphasis on economic impact and 
specific business circumstances. BXA is also interested in industry 
information relating to the following:
    1. Information on the effect of a licensing requirement for the 
export of MT-controlled items (commodities, software, and technology) 
to Canada on sales of U.S. products and market-share.
    2. Information on joint-ventures or U.S. industry owned facilities 
in Canada that would be affected by the removal of a licensing 
exemption for the export of MT-controlled items to Canada.
    3. Information on controls maintained by U.S. trade partners (i.e., 
to what extent do other MTCR Partners have similar exemptions for the 
export of MT-controlled goods and technology to other countries)?
    4. Additional suggestions for revisions to the Canadian licensing 
exemption policy.
    5. Data or other information as to the effect of a Canadian 
licensing requirement on overall trade, either for individual firms or 
for individual industrial sectors.
    Parties submitting comments are asked to be as specific as 
possible. Accordingly, the Department encourages interested persons who 
wish to comment to do it at the earliest possible time.
    The period for submission of comments will close February 19, 2002. 
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. The Department 
requires comments be submitted in written form, which will be a matter 
of public record and will be available for public review and copying.
    The public record concerning these comments will be maintained in 
the Bureau of Export Administration, Office of Administration, U.S. 
Department of Commerce, Room 6883, 14th and Constitution Avenue, NW, 
Washington, DC 20230; (202) 482-0637. This component does not maintain 
a separate public inspection facility. Requesters should first view 
BXA's FOIA website (which can be reached through http://www.bxa.doc.gov/foia). If the records sought cannot be located at this 
site, or if the requester does not have access to a computer, please 
call the phone number above for assistance.

List of Subjects in 15 CFR Parts 738 and 742

    Exports, Foreign trade.

    Dated: December 14, 2001.
James J. Jochum,
Assistant Secretary for Export Administration.
[FR Doc. 01-31322 Filed 12-19-01; 8:45 am]
BILLING CODE 3510-33-P