[Federal Register Volume 67, Number 46 (Friday, March 8, 2002)]
[Rules and Regulations]
[Pages 10608-10611]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5562]


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DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 734, 740, 742, and 774

[Docket No. 020228045-2045-01]

RIN 0694-AC56


Revisions to License Exception CTP: Implementation of 
Presidential Announcement of January 2, 2002

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) by revising License Exception 
CTP to reflect rapid technological advances in computing capability. 
This rule implements the President's decision to revise U.S. export 
controls on high performance computers (HPCs), announced January 2, 
2002. All HPCs continue to be eligible for export to a Computer Tier 1 
country under License

[[Page 10609]]

Exception CTP. Beginning March 3, 2002, HPCs controlled by Export 
Control Classification Number (ECCN) 4A003 with a CTP up to 190,000 
Millions of Theoretical Operations per Second (MTOPS) can be exported 
to Computer Tier 3 countries under License Exception CTP without 
advance notification. This revision also applies to electronic 
assemblies and specially designed components controlled by ECCN 4A003. 
This rule also moves Latvia from Computer Tier 3 to Computer Tier 1, 
effective May 2, 2002. Finally, this rule adds Australia, New Zealand, 
Norway, Switzerland, and Turkey to the list of countries eligible for 
exports and reexports of software and technology for computers with 
unlimited CTP under License Exception TSR. The President's action will 
promote our national security, enhance the effectiveness of our export 
control system and ease unnecessary regulatory burdens on both 
government and industry.

DATES: This rule is effective March 6, 2002.

FOR FURTHER INFORMATION CONTACT: Tanya Hodge Mottley in the Office of 
Strategic Trade and Foreign Policy Controls, Bureau of Export 
Administration, at (202) 482-1837.

SUPPLEMENTARY INFORMATION:

Background

    The 1998 National Defense Authorization Act (NDAA) provides that 
the President must submit a report to Congress 60 days before raising 
the CTP level above which exporters must notify the Department of 
Commerce before exporting a computer to a Tier 3 country under License 
Exception CTP. License Exception CTP authorizes exports and reexports 
of computers, electronic assemblies, and specially designed components 
controlled by ECCN 4A003 to Computer Tier countries as provided by 
740.7 of the EAR. On January 2, 2002, the President announced 
significant changes to U.S. export control policy for High Performance 
Computers (HPCs). This new policy was necessary to reflect rapid 
advancements in computer hardware, as well as identify any risk posed 
by HPC exports to certain end-users and countries. This policy 
strengthens America's high tech competitiveness, while maintaining 
export controls to protect U.S. national security. On January 2, 2002, 
the President also sent a report to Congress announcing this change.
    This rule implements the President's decision to increase License 
Exception CTP eligibility for the export of HPCs, electronic 
assemblies, and specially designed components controlled by ECCN 4A003 
to countries in Computer Tier 3 from 85,000 Millions of Theoretical 
Operations per Second (MTOPS) to 190,000 MTOPS, to reflect the 
widespread availability of computers. This change will become effective 
on March 3, 2002. Advance notification and post-shipment verification 
reporting provided for in the NDAA, as amended, are not required for 
computers that are eligible for License Exception CTP since March 20, 
2001, and will not be required as a result of this rule. Beginning 
March 3, 2002, the advance notification level and the upper limit for 
License Exception CTP will be 190,000 MTOPS, so separate advance 
notification will not be required. However, provisions in 
Sec. 742.12(b)(3)(iv) of the EAR continue to require post-shipment 
verification reporting for licensed exports and reexports of computers 
above 190,000 MTOPS, and for licensed exports of items used to enhance 
previously exported or reexported computers, where the CTP will be 
greater than 190,000 MTOPS.
    This rule also implements the President's decision to remove Latvia 
from Computer Tier 3 and places it in Computer Tier 1. Pursuant to the 
NDAA, a decision to move a country from Computer Tier 3 to Computer 
Tier 1 is not effective until 120 days after the Congress receives a 
report justifying such a removal. The President included a 
justification in his January 2, 2002 report to Congress. Therefore, 
Latvia will be moved from Tier 3 to Tier 1 effective May 2, 2002.
    To implement the President's decision, this rule makes the 
following specific amendments to the EAR.
    1. This rule revises the Export Administration Regulations by 
modifying computer exports under License Exception CTP, as follows:
    (A) Raising the CTP limit for computers eligible for License 
Exception CTP for exports and reexports to Computer Tier 3 destinations 
from ``85,000 MTOPS'' to ``190,000 MTOPS'', effective March 3, 2002; 
and
    (B) Moving Latvia from Tier 3 to Tier 1, effective May 2, 2002.
    2. This rule revises the Export Administration Regulations by 
modifying computer exports under section 742.12, ``High Performance 
Computers,'' as follows:
    (A) Raising the XP control CTP level for computers that require a 
license to export or reexport to a country in Computer Tier 3 from 
85,000 MTOPS to 190,000 MTOPS, effective March 3, 2002; and
    (B) Raising the CTP level for computers that require a NDAA post 
shipment verification report to export or reexport to a country in 
Computer Tier 3 from 85,000 MTOPS to 190,000 MTOPS, effective March 3, 
2002.

Other Revisions

    In addition to implementing provisions from the President's January 
2, 2002 announcement, this rule amends the EAR to correct an 
inadvertent omission. This rule adds Australia, New Zealand, Norway, 
Switzerland, and Turkey to the list of countries eligible for exports 
and reexports of software and technology for computers with unlimited 
CTP under License Exception TSR, to correct an inadvertent omission of 
countries that were either a member or designated a cooperating country 
of the Coordinating Committee for Multilateral Export Controls (CoCoM), 
these are identified in Country Group A:1 or by footnote number 1 of 
Supplement No. 1 to part 740 of the EAR.
    To harmonize other sections of the EAR that are affected by the 
President's decisions, this rule raises the eligibility level for 
computers in License Exception GOV from a CTP greater than 85,000 MTOPS 
to a CTP greater than 190,000 MTOPS, effective March 3, 2002. This rule 
also raises the CTP limit from 85,000 MTOPS to 190,000 MTOPS for 
computers containing U.S.-origin controlled semiconductors (other than 
memory circuits) classified under ECCN 3A001 that are eligible for 
becoming ``not subject to the EAR'' under the de minimis procedures of 
734.4 of the EAR when destined to Computer Tier 3, while keeping the 
limit at 28,000 MTOPS for computers containing U.S.-origin controlled 
semiconductors (other than memory circuits) classified under ECCN 3A001 
or high speed interconnect devices (ECCN 4A994.j) when destined to 
Computer Tier 4 countries, effective March 3, 2002.
    This rule makes the following specific amendments to the Commerce 
Control List, in Category 4--Computers:
    4D001--Amended by:
    (1) Reformatting the eligibility text of License Exception TSR; and
    (2) Adding Australia, New Zealand, Norway, Switzerland, and Turkey 
to License Exception TSR eligibility.
    4E001--Amended by:
    (1) Reformatting the eligibility text of License Exception TSR; and
    (2) Adding Australia, New Zealand, Norway, Switzerland, and Turkey 
to License Exception TSR eligibility.
    Although the Export Administration Act expired on August 20, 2001, 
Executive Order 13222 of August 17,

[[Page 10610]]

2001 (66 FR 44025, August 22, 2001) continues the Regulations in effect 
under the International Emergency Economic Powers Act.

Rulemaking Requirements

    1. This final rule has been determined to be not significant for 
purposes of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to nor 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 current valid OMB Control Number. This regulation involves 
collections previously approved by the Office of Management and Budget 
under control numbers 0694-0088, ``Multi-Purpose Application,'' which 
carries a burden hour estimate of 45 minutes per manual submission and 
40 minutes per electronic submission. Miscellaneous and recordkeeping 
activities account for 12 minutes per submission. Information is also 
collected under OMB control number 0694-0107, ``National Defense 
Authorization Act,'' Advance Notifications and Post-Shipment 
Verification Reports, which carries a burden hour estimate of 15 
minutes per report. This rule also involves collections of information 
under OMB control number 0694-0073, ``Export Controls of High 
Performance Computers'' and OMB control number 0694-0093, ``Import 
Certificates and End-User Certificates.''
    3. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 13132.
    4. The provisions of the Administrative Procedure Act requiring 
notice of proposed rule making, the opportunity for public 
participation, and a delay in effective date, are inapplicable because 
this regulation involves a military or 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 rule making and an opportunity for public 
comment be given for this rule. Because a notice of proposed rule 
making and opportunities 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. 601 
et seq., are inapplicable.
    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 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 734

    Administrative practice and procedure, Exports, and Foreign trade.

15 CFR Part 740

    Administrative practice and procedure, Exports, Foreign trade, 
Reporting and record keeping requirements.

15 CFR Parts 742 and 774

    Exports, Foreign trade.

    Accordingly, parts 734, 740, 742, and 774 of the Export 
Administration Regulations (15 CFR Parts 730-799) are amended as 
follows:
    1. The authority citation for 15 CFR part 734 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13020, 61 
FR 54079, 3 CFR, 1996 Comp. p. 219; E.O. 13026, 61 FR 58767, 3 CFR, 
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, August 22, 2001; Notice 
of November 9, 2001, 66 FR 56965, November 13, 2001.

    2. The authority citation for 15 CFR part 740 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
Sec. 901-911, Publ. L. 106-387; E.O. 13026, 61 FR 58767, 3 CFR, 1996 
Comp., p. 228; E.O. 13222, 66 FR 44025, August 22, 2001.


    3. The authority citation for 15 CFR part 742 continues 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; 
Sec. 901-911, Publ. L. 106-387; Sec. 221, Publ. L. 107-56; 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. 12938, 59 FR 59099, 3 CFR, 
1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 
228; E.O. 13222, 66 FR 44025, August 22, 2001; Notice of November 9, 
2001, 66 FR 56965, November 13, 2001.


    4. 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; 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; Sec. 901-911, Publ. L. 106-387; Sec. 
221, Publ. L. 107-56; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 
228; E.O. 13222, 66 FR 44025, August 22, 2001.

PART 734--[AMENDED]

    5. Part 734 is amended by revising the phrase ``85,000 MTOPS'' to 
read ``190,000 MTOPS'' in Sec. 734.4(a).

PART 740--[AMENDED]

    6. Section 740.7 is amended by:
    (a) Adding a sentence to the end of paragraphs (c)(1) and (d)(1), 
to read as follows;
    (b) Revising the phrase ``equal to 85,000 MTOPS'' to read ``equal 
to 190,000 MTOPS'' in paragraph (d)(2).


Sec. 740.7  Computers (CTP).

* * * * *
    (c) Computer Tier 1. (1) Eligible countries. * * * As of May 2, 
2002, Latvia is a Computer Tier 1 country.
* * * * *
    (d) Computer Tier 3. (1) Eligible countries. * * * As of May 2, 
2002, Latvia is moved to Computer Tier 1.
* * * * *


Sec. 740.11  [Amended]

    7. Section 740.11 is amended by revising the number ``85,000'' to 
read ``190,000'' in paragraphs (a)(2)(ii), (a)(2)(iii), and (c)(2)(i).

    8. Supplement No. 1 to part 740.11 is amended by revising the 
number ``85,000'' to read ``190,000'' in paragraphs (a)(1)(ii), 
(a)(1)(iii), (b)(1)(ii), and (b)(1)(iii).

PART 742--[AMENDED]


Sec. 740.12  [Amended]

    9. Section 742.12 is amended by revising the phrase ``where the CTP 
is greater than 85,000 MTOPS'' to read ``where the CTP is greater than 
190,000 MTOPS'' in paragraph (b)(3)(iv)(A).

PART 743--[AMENDED]


Sec. 743.1  [Amended]

    10. Section 743.1 is amended by revising the phrase, ``having a CTP 
level of greater than 85,000 MTOPS'' to read ``having a CTP level of 
greater than 190,000 MTOPS'' in the note to paragraph (c)(2).
* * * * *

PART 774--[AMENDED]

    11. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 4--Computers is amended by revising the ``License Exceptions'' 
section of Export Control Classification Number (ECCNs) 4D001 and 
4E001, to read as follows:

4D001  ``Software'' specially designed or modified for the 
``development'',

[[Page 10611]]

``production'' or ``use'' of equipment or ``software'' controlled by 
4A001 to 4A004, or 4D (except 4D980, 4D993 or 4D994).
* * * * *

License Exceptions

CIV: N/A
TSR: (a) N/A for:

    (1) ``Software'' controlled for MT reasons;
    (2) ``Software'' for equipment or ``software'' requiring a 
license; or
    (3) ``Software'' described by TSR paragraph (b)(1)(ii) of this 
License Exception section, when exported or reexported to a 
destination not included in TSR paragraph (b)(1)(i) of this License 
Exception section.
    (b) Yes for:
    (1) ``Software'':
    (i) Exported or reexported to Australia, Austria, Belgium, 
Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, 
Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, 
Spain, Sweden, Switzerland, Turkey, or the United Kingdom; and
    (ii) Specially designed for the ``development'' or 
``production'' of any of the following:
    (A) ``Digital'' computers controlled by 4A003.b and having a CTP 
exceeding than 33,000 MTOPS; or
    (B) ``Electronic assemblies'' controlled by 4A003.c and capable 
of enhancing performance by aggregation of ``computing elements'' so 
that the CTP of the aggregation exceeds 33,000 MTOPS; and
    (2) All other ``software'' not described in TSR paragraphs (a) 
or (b)(1) of this License Exception section.
* * * * *

4E001  ``Technology'' according to the General Technology Note, for 
the ``development'', ``production'' or ``use'' of equipment or 
``software'' controlled by 4A (except 4A980, 4A993 or 4A994) or 4D 
(except 4D980, 4D993, 4D994).

* * * * *

License Exceptions

CIV: N/A
TSR: (a) N/A for:

    (1) ``Technology'' controlled for MT reasons; or
    (2) ``Technology'' described by TSR paragraph (b)(2)(ii) of this 
License Exception, when exported or reexported to a destination not 
included in TSR paragraph (b)(2)(i) of this License Exception.
    (b) Yes for:
    (1) `` Technology'' directly related to hardware eligible for 
export or reexport under a License Exception;
    (2) ``Technology'':
    (i) Exported or reexported to Australia, Austria, Belgium, 
Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, 
Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, 
Spain, Sweden, Switzerland, Turkey, or the United Kingdom; and
    (ii) For the ``development'' or ``production'' of any of the 
following:
    (A) ``Digital'' computers controlled by 4A003.b and having a CTP 
exceeding 33,000 MTOPS;
    (B) ``Electronic assemblies'' controlled by 4A003.c and capable 
of enhancing performance by aggregation of ``computing elements'' so 
that the CTP of the aggregation exceeds 33,000 MTOPS; or
    (C) ``Software'' controlled by 4D001 and specially designed for 
the ``development'' or ``production'' of equipment listed in TSR 
paragraphs (b)(2)(ii)(A) or (b)(2)(ii)(B) of this License Exception 
section; and
    (3) All other ``technology'' not described in TSR paragraphs 
(a), (b)(1), or (b)(2) of this License Exception section.

    Dated: March 5, 2002.
James J. Jochum,
Assistant Secretary for Export Administration.
[FR Doc. 02-5562 Filed 3-5-02; 4:04 pm]
BILLING CODE 3510-33-P