[Federal Register Volume 69, Number 146 (Friday, July 30, 2004)]
[Rules and Regulations]
[Pages 46070-46088]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17532]



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Part VII





Department of Commerce





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Bureau of Industry and Security



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15 CFR Parts 732, 738, 740 et al.



Export and Reexport Controls for Iraq; Interim Final Rule

  Federal Register / Vol. 69, No. 146 / Friday, July 30, 2004 / Rules 
and Regulations  

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 732, 738, 740, 742, 744, 746, 747, 750, 758, 762, 772 
and 774

[Docket No. 040302078-4078-01]
RIN 0694--AC84


Export and Reexport Controls for Iraq

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule amends the Export Administration Regulations (EAR) 
to implement the reversion to the Department of Commerce from the 
Department of the Treasury of the licensing responsibility for exports 
and reexports to Iraq of items subject to the EAR. In addition, a 
license will be required for certain transfers within Iraq of items 
subject to the EAR. This rule is consistent with United Nations 
Security Council Resolutions 1483 (2003) and 1546 (2004), which lifted 
the comprehensive United Nations trade embargo imposed on Iraq but 
retained an embargo on arms and related materiel and their means of 
production.

DATES: This rule is effective July 30, 2004. Comments must be received 
on or before August 30, 2004.

ADDRESSES: Written comments should be sent to Sheila Quarterman, 
Regulatory Policy Division, Bureau of Industry and Security, Department 
of Commerce, P.O. Box 273, Washington, DC 20044, or to e-mail: 
[email protected]. The Bureau of Industry and Security Freedom of 
Information Records Inspection Facility is located at Room 6881, 
Department of Commerce, 14th Street and Pennsylvania Avenue, NW., 
Washington, DC 20230. Send comments regarding the burden estimate or 
any other aspect of the collections of information, including 
suggestions for reducing the burden, to David Rostker, Office of 
Management and Budget (OMB), by e-mail to [email protected], 
or by fax to (202) 395-7285; and to the Regulatory Policy Division, 
Bureau of Industry and Security, Department of Commerce, P.O. Box 273, 
Washington, DC 20044.

FOR FURTHER INFORMATION CONTACT: Joan Roberts, Director, Foreign Policy 
Controls Division, Office of Nonproliferation and Treaty Compliance, 
Bureau of Industry and Security, Department of Commerce, P.O. Box 273, 
Washington, DC 20044; telephone: (202) 482-4252, or e-mail: 
[email protected]. Information about the inspection and copying of 
records at the facility may be obtained from the Bureau of Industry and 
Security Freedom of Information Officer at the above address or by 
calling (202) 482-0500.

SUPPLEMENTARY INFORMATION:

Background

    This rule establishes the new export control policy for exports to 
Iraq under the licensing responsibility of the Bureau of Industry and 
Security (BIS). The new export control policy reflects changed 
circumstances in Iraq and is consistent with changes in U.S. legal 
authorities concerning Iraq and actions taken by the United Nations 
Security Council with respect to the embargo against Iraq.
    The President has signed an Executive Order terminating the 
national emergency declared in Executive Order 12722, revoking it and 
certain related Executive Orders. Among other things, the termination 
of the national emergency in those Executive Orders ends the Department 
of the Treasury's authority to maintain export controls pursuant to 
those orders and related regulations, namely the Iraqi Sanctions 
Regulations, 31 CFR part 575. By virtue of this action, primary export 
licensing jurisdiction reverts to BIS.
    In addition, Section 1503 of the Emergency Wartime Supplemental 
Appropriations Act, 2003 (Pub. L. 108-11), authorized the President to 
make inapplicable, with respect to Iraq, Section 620A of the Foreign 
Assistance Act and any other provision of law applicable to countries 
that have supported terrorism. On May 7, 2003, the President exercised 
this authority by the issuance of Presidential Determination 2003-23, 
which, among other things, suspended the application of the provisions 
of the Iraq Sanctions Act of 1990 (Pub. L. 101-513), except section 
586E (relating to penalties). In particular, the President's action 
suspended the requirement in section 586G(a)(3) of the Iraq Sanctions 
Act that items controlled under sections 5 and 6 of the Export 
Administration Act (50 U.S.C. App. 2401 et seq.) (EAA) be prohibited 
for export to Iraq and made inapplicable with respect to Iraq section 
620A of the Foreign Assistance Act and any other provision of law that 
applies to countries that have supported terrorism.
    Further, on May 22, 2003, the United Nations Security Council 
(UNSC) adopted Resolution 1483 that lifted the comprehensive UNSC trade 
sanctions on Iraq while retaining restrictions on the sale or supply to 
Iraq of arms and related materiel and their means of production. 
Resolution 1483 also reiterated certain provisions of related UNSC 
Resolutions 707 of August 15, 1991, and 687 of April 3, 1991. In 
particular, those provisions require that Iraq eliminate its nuclear 
weapons program and restrict its nuclear activities to the use of 
isotopes for medical, industrial or agricultural purposes. Such 
provisions further mandate the elimination of Iraq's chemical and 
biological weapons programs as well as its ballistic missile program. 
Sale or supply by U.S. entities that would make a material contribution 
to any of these programs is prohibited.
    Finally, on June 8, 2004, the UNSC adopted Resolution 1546. In this 
resolution, the UNSC decided that prohibitions related to the sale or 
supply to Iraq of arms and related materiel under previous resolutions 
shall not apply to such items required by the Interim Government of 
Iraq or the Multinational Force in Iraq to serve the purposes of the 
resolution. Provisions in UNSC Resolutions 687 and 707 noted above are 
not affected by UNSC Resolution 1546.

License Requirements for Exports and Reexports to Iraq and Certain 
Transfers Within Iraq

Overview

    The new Iraq export licensing policy significantly reduces the 
level of control over commercial exports to Iraq while retaining 
restrictions on the export of multilaterally-controlled items and other 
sensitive items to Iraq in keeping with Iraq's new economic and 
security status. The licensing requirements and licensing policy 
reflected in this rule are consistent with UNSC Resolution 1483 (2003) 
and other relevant resolutions which lifted the comprehensive trade 
embargo imposed on Iraq but retained certain restrictions including an 
embargo on arms and related materiel and their means of production.
    This rule is designed to address two significant foreign policy 
goals with respect to Iraq. In particular, this rule furthers the goal 
of ensuring that exports and reexports of controlled items destined to 
civil infrastructure rebuilding do not suffer undue licensing delays. 
At the same time, in furtherance of applicable UNSC Resolutions and 
U.S. foreign policy interests, this rule revises section 746.3 of the 
Export Administration Regulations (15 CFR parts 730-799) (EAR) and 
retains substantial restrictions on exports to Iraq destined for 
inappropriate end-users or end-uses. In addition, this rule addresses 
certain transactions involving

[[Page 46071]]

the transfer of items subject to the EAR within Iraq.

Items for Which Export License Requirements Are Generally Lifted

    Under this rule, items subject to the EAR but not listed on the 
Commerce Control List (15 CFR part 774) (CCL) (i.e., EAR99 items) will 
generally not be subject to a license requirement except pursuant to 
the end-user and end-use controls set forth in part 744 of the EAR and 
revised section 746.3 of the EAR. Items controlled only for anti-
terrorism (AT) reasons on the CCL, except for items controlled under 
six Export Control Classification Numbers (ECCNs), will also not be 
subject to a licensing requirement, except for the end-use and end-user 
requirements noted above. The six ECCNs controlled for AT reasons only 
for which licensing requirements are imposed by this rule are: 0B999 
(Specific processing equipment such as hot cells and glove boxes 
suitable for use with radioactive materials), 0D999 (Specific software 
for neutronic calculations, radiation transport calculations and 
hydrodynamic calculations/modeling), 1B999 (Specific processing 
equipment such as electrolytic cells for fluorine production and 
particle accelerators), 1C992 (Commercial charges containing energetic 
materials, n.e.s.), 1C999 (Specific Materials, n.e.s.) and 6A992 
(Optical Sensors, not controlled by 6A002). Please note that this rule 
retains AT controls for items controlled under ECCNs 1C995 (Certain 
mixtures and testing kits) and 1C997 (Ammonium Nitrate).
    As a result, in most instances, the new policy will allow the 
export or reexport to Iraq, or the transfer within Iraq, without a 
license, of items classified as EAR99 or controlled only for AT 
reasons.
    Also, the de minimis rules applicable to Iraq are amended to 
provide generally that reexports of items to Iraq from abroad are 
subject to the EAR only when U.S.-origin controlled content in such 
items exceeds 25% (as opposed to the existing 10%).

Items for Which Export License Requirements Will Be Retained

    This rule retains license requirements for the export or reexport 
of items on the multilateral export control regime lists, the Wassenaar 
Arrangement, the Nuclear Suppliers' Group, the Australia Group and the 
Missile Technology Control Regime, and items controlled for crime 
control (CC) or regional stability (RS) reasons. These license 
requirements are set forth in part 742 of the EAR and are reflected in 
the relevant columns of the Country Chart in Supplement No. 1 to part 
738 of the EAR. Certain categories of items that are controlled for 
reasons not included on the Country Chart (e.g., encryption (EI), short 
supply (SS), and Chemical Weapons (CW)) also require a license for 
export or reexport to Iraq or transfer within Iraq.

New License Requirements

    A license is required for the transfer within Iraq of any item 
subject to the EAR exported or reexported pursuant to a specific 
license issued by the Department of the Treasury or a Department of 
Commerce specific license or License Exception.
    Section 746.3 of this rule imposes a license requirement for the 
export, reexport, or transfer of items subject to the EAR if, at the 
time of the export, reexport, or transfer, you know, have reason to 
know, or are informed by BIS that the item will be, or is intended to 
be, used in Iraq for a ``military end-use'' or by a ``military end-
user'', as defined in that section. This license requirement does not 
apply to exports, reexports, or transfers of items for the official use 
by personnel or agencies of the U.S. Government or exports, reexports, 
or transfers to the Interim Government of Iraq or the Multinational 
Force in Iraq. This new license requirement is in addition to the 
existing license requirements established pursuant to the Enhanced 
Proliferation Control Initiative (EPCI), as set forth in part 744 of 
the EAR. The EPCI requirements will now also apply to the transfer 
within Iraq of any item subject to the EAR, if, at the time of the 
transfer, you know, have reason to know, or are informed by BIS that 
the item will be used in the design, development, production or use of 
weapons of mass destruction or the means of their delivery.
    In addition, transfers within Iraq to designated terrorists or 
terrorist organizations, as set forth in sections 744.12, 744.13, or 
744.14 of the EAR, and transfers to any persons referenced in new 
section 744.18 of the EAR, will require a license.
    In addition to the license requirements described above, items on 
the CCL controlled for united nations (UN) reasons (including shotgun 
shells controlled under ECCN 0A986) will require a license for export 
or reexport to Iraq or transfer within Iraq, except exports, reexports 
or transfers to the Interim Government of Iraq or the Multinational 
Force in Iraq.
    In this rule, BIS also will delete from the CCL the entry for ECCN 
6A018, ``Magnetic, pressure, and acoustic underwater detection devices 
specially designed for military purposes and controls and components.'' 
References to ECCN 6A018 in entries for ECCNs 6E001 and 6E002 also will 
be removed. BIS has determined that no items subject to the EAR are 
controlled under this entry. Such items are subject to the export 
licensing authority of the U.S. Department of State Division of Defense 
Trade Controls.

Licensing Policy

    Except as set forth in revised section 746.3, license applications 
for exports or reexports to Iraq and certain transfers within Iraq will 
be reviewed on a case-by-case basis pursuant to applicable licensing 
policies set forth in parts 742, 744 or elsewhere in the EAR.
    Such review will be conducted consistent with UNSC Resolutions 1483 
and 1546, and relevant resolutions, including UNSC Resolutions 687 and 
707. UNSC Resolution 1483 reaffirms Iraq's disarmament obligations 
contained in prior UNSC resolutions relating to nuclear, chemical and 
biological weapons as well as ballistic missiles (defined for Iraq as 
those capable of a range greater than 150 kilometers). UNSC Resolutions 
1483 and 1546 also retain restrictions on the sale or supply to Iraq of 
arms and related materiel and their means of production, and limit 
Iraq's civil or military nuclear activity, except for use of isotopes 
for medical, industrial or agricultural purposes. UNSC Resolution 1546 
affirms these restrictions, while permitting exports, reexports, and 
transfers to the Interim Government of Iraq or the Multinational Force 
in Iraq.

Reason for Control: Chemical and Biological Weapons (CB)

    CB-controlled exports and reexports to Iraq, and transfers within 
Iraq, will be reviewed on a case-by-case basis. Unless the export, 
reexport, or transfer is determined to contribute to the building of 
Iraqi civil infrastructure, there will be a general policy of denial 
for CB-controlled items.

Reason for Control: Nuclear Nonproliferation (NP)

    NP-controlled exports and reexports to Iraq, and transfers within 
Iraq, will be reviewed on a case-by-case basis. Unless the export, 
reexport, or transfer is determined to contribute to the building of 
Iraqi civil non-nuclear infrastructure, there will be a general policy 
of denial for subsystems or components or any nuclear weapons research, 
development, support, or manufacturing facilities.

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Reason for Control: National Security (NS)

    NS-controlled machine tool equipment, software and technology 
exports and reexports to Iraq, and transfers within Iraq, will be 
reviewed on a case-by-case basis. Unless the export, reexport, or 
transfer is determined to contribute to the building of Iraqi civil 
infrastructure, there will be a general policy of denial for items for 
the production, research, design, development, support, maintenance or 
manufacture of Iraqi weapons of mass destruction or ballistic missiles 
(for Iraq, defined as those with a range of 150 km or greater) or arms 
and related materiel.

Reason for Control: Missile Technology (MT)

    MT-controlled exports and reexports to Iraq, and transfers within 
Iraq, will be reviewed on a case-by-case basis. Unless the export, 
reexport, or transfer is determined to contribute to the building of 
Iraqi civil infrastructure, there will be a general policy of denial 
for major parts, repair and production facilities related to ballistic 
missiles with a range greater than 150 kilometers.

Licensing Policy Specific to Section 746.3 (Iraq)

    As specified in section 746.3(b)(1), applications for the export or 
reexport to Iraq, or transfer within Iraq, of items controlled on the 
Commerce Control List for NS, MT, NP, CW, CB, RS, CC, EI, SI, XP or UN 
reasons will be subject to a policy of denial if destined for use in 
Iraqi civil nuclear or military nuclear activity. An exception exists 
for use of isotopes for medical, industrial or agricultural purposes, 
which will be reviewed on a case by case basis.
    As specified in section 746.3(b)(2), applications for the export or 
reexport to Iraq, or transfer within Iraq, of machine tools controlled 
for NS and/or nuclear non-proliferation reasons, as well as any items 
controlled for CC or UN reasons (including under ECCN 0A986) or under 
ECCNs that end in the number ``018'', that would make a material 
contribution to the production, research, design, development, support, 
maintenance or manufacture of Iraqi weapons of mass destruction or 
ballistic missiles or arms and related materiel will also be subject to 
a general policy of denial.
    As specified in section 746.3(b)(3), applications for the export or 
reexport to Iraq and transfer within Iraq, of items controlled for AT 
reasons under ECCNs 0B999, 0D999, 1B999, 1C992, 1C995, 1C997, 1C999 and 
6A992 will be reviewed on a case-by-case basis to determine if they 
would contribute to the building of Iraqi civil infrastructure. 
Applications determined not to contribute to the building of Iraqi 
civil infrastructure will be subject to a general policy of denial.
    Pursuant to section 746.3(b)(4), applications for the export or 
reexport to Iraq, or transfer within Iraq, of items that will be, or 
are intended to be, used for a ``military end-use'' or destined to a 
``military end-user'' will be subject to a policy of denial.

License Exceptions

License Exceptions Available Generally to Group D Countries

    The rule removes Iraq from Country Group E:1, found in Supplement 1 
to part 740. Iraq has been added to Country Group D:1 and remains in 
Country Groups D:2, D:3 and D:4. Although Iraq currently remains on the 
list of designated terrorist-supporting countries, the anti-terrorism 
(AT) controls that apply to such countries under section 6(j) of the 
EAA will not apply to Iraq pursuant to Presidential Determination 2003-
23. Countries in Country Group D:1 are of concern for national security 
reasons. Countries in Country Groups D:2, D:3 and D:4 are of concern 
for weapons proliferation reasons. As a result of Iraq's inclusion in 
Country Groups D:1 to D:4, the following License Exceptions may be 
available: CIV, CTP, TMP, RPL, GOV, GFT, TSU, BAG, AVS, ENC and KMI. A 
specific transaction is eligible for a License Exception only if it 
satisfies all of the terms and conditions of the relevant License 
Exception and is not excluded by any of the restrictions that apply to 
all License Exceptions, as set forth in the EAR (including, 
specifically, section 740.2).

Expanded License Exception Availability

    The rule adds Iraq to Computer Tier 3 for exports or reexports of 
high performance computers under License Exception CTP (section 740.7 
of the EAR). Countries in Tier 3 are eligible to receive computers up 
to and including 190,000 MTOPS (millions of theoretical operations per 
second) under License Exception CTP. Certain transfers within Iraq of 
computers up to and including 190,000 MTOPS will now require a license.
    The export or reexport to Iraq of high performance computers 
exceeding 190,000 MTOPS continues to require a license. In addition, 
transfers within Iraq of computers exceeding 190,000 MTOPS will now 
also require a license.

Special License(s): Special Iraq Reconstruction License (SIRL)

    This rule further establishes a new part 747 of the EAR entitled 
Special Iraq Reconstruction License (SIRL). Part 747 authorizes exports 
or reexports to Iraq, or transfers within Iraq, of items in furtherance 
of civil reconstruction and other projects funded by specified entities 
including the United States Government. Also included are projects 
funded by the United Nations, the World Bank, and the International 
Monetary Fund, and their affiliated entities (i.e., International Bank 
for Reconstruction and Development, International Finance Corporation, 
and United Nations Development Programme) as well as any other entities 
the U.S. Government may designate. All items subject to the EAR except 
items controlled for missile technology (MT), nuclear nonproliferation 
(NP), or chemical and biological weapons (CB) reasons are eligible for 
export or reexport under a SIRL.
    Applicants may apply for a SIRL by submitting a completed BIS 
Multipurpose Application form (BIS-748P), Item Appendix (BIS-748P-A), 
and End-User Appendix (BIS-748P-B), plus narrative statements, as 
described in section 747.4 of new part 747. BIS will process SIRL 
applications expeditiously. To approve a SIRL, BIS must be satisfied 
that the parties to the license will adhere to the conditions of the 
license and the EAR and that approval of the application will not be 
detrimental to U.S. national security, nonproliferation, or other 
foreign policy interests. A license is required to transfer within Iraq 
any item exported or reexported pursuant to a SIRL to an end-user not 
identified on the end-user appendix.

Savings Clause

    Among other things, the termination of the national emergency 
declared in Executive Order 12722 ends the export prohibition in that 
and related Executive Orders and in OFAC's Iraqi Sanctions Regulations, 
31 CFR part 575. However, to facilitate a smooth transition of 
licensing responsibility from OFAC to BIS, this rule extends the 
validity of licenses issued by OFAC for Iraq. For those specific 
licenses with specified expiration dates, such dates will continue to 
apply. Licenses without specified expiration dates will be valid 
through July 30, 2005.
    Items licensed by OFAC and subsequently returned from Iraq to the 
United States do not require further authorization from BIS. However, 
persons returning items to the United

[[Page 46073]]

States that were previously exported or reexported to Iraq under a 
specific license granted by OFAC will be subject to a recordkeeping 
requirement set forth in revised section 746.3(e) of the EAR.
    In addition, items exported or reexported to Iraq under a specific 
license granted by OFAC may not be transferred within Iraq to a new 
end-user without a license from BIS. Reexports of items previously 
exported or reexported to Iraq under a specific license granted by OFAC 
must conform with relevant provisions of the EAR based on the country 
to which the items are being reexported. In certain circumstances, such 
reexports may be eligible for a License Exception or may not require a 
license. Such reexports will also be subject to the recordkeeping 
requirement set forth in section 746.3(e) of the EAR.

Other Provisions

    Consistent with Executive Order 13315 of August 28, 2003 
(``Blocking Property of the Former Iraqi Regime, its Senior Officials 
and Their Family Members, and Taking Certain Other Actions''), this 
rule amends the EAR to create a new section 744.18 that creates a 
license requirement for exports, reexports, or transfers, of any item 
subject to the EAR to persons designated in or pursuant to Executive 
Order 13315. These persons include individuals and entities listed in 
the Annex to Executive Order 13315, as well as persons subsequently 
designated pursuant to criteria set forth in the order.
    OFAC includes the names of persons designated pursuant to Executive 
Order 13315 in Appendix A to 31 CFR Chapter V, which lists persons 
subject to various sanctions programs administered by OFAC. All persons 
designated in or pursuant to Executive Order 13315 are identified in 
Appendix A by the bracketed initials [IRAQ2].
    To avoid duplication, U.S. persons are not required to seek 
separate BIS authorization for an export, reexport, or transfer, to a 
person identified in section 744.18 of any item subject to both the EAR 
and regulations maintained by OFAC. You should consult with OFAC 
concerning transactions subject to OFAC licensing requirements.
    U.S. persons must seek authorization from BIS for the export, 
reexport, or transfer, to a person identified in section 744.18 of any 
item subject to the EAR but not subject to regulations maintained by 
OFAC (e.g., deemed exports). Non-U.S. persons must seek authorization 
from BIS for the export from abroad, reexport, or transfer, to a person 
identified in section 744.18 of any item subject to the EAR. 
Applications for licenses for the export, reexport, or transfer, to a 
person identified in section 744.18 of any item subject to the EAR will 
be subject to a general policy of denial.
    Although the EAA expired on August 30, 2001, Executive Order 13222 
of August 17, 2001 (66 FR 44025, August 22, 2001), as extended by the 
Notice of August 7, 2003 (68 Fed. Reg. 47833, August 11, 2003), 
continues the EAR in effect under the International Emergency Economic 
Powers Act.
    This action is taken after consultation with the Secretary of 
State. BIS submitted a foreign policy report to the Congress indicating 
the imposition of new foreign policy controls on July 28, 2004.

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 a collection of 
information approved by the Office of Management and Budget under 
control numbers 0694-0088, ``Multi-Purpose Application,'' which carries 
a burden hour estimate of 58 minutes for a manual or electronic 
submission and 0694-0129, ``Special Iraq Reconstruction License'' which 
carries a maximum annual burden of 3.5 hours per applicant. The Special 
Iraq Reconstruction License (SIRL) process authorizes special project-
based licenses for exports and reexports in support of Iraq 
reconstruction. Public comment is sought regarding whether the 
collection of information requirements are necessary for the proper 
performance of the functions of the agency, including whether the 
information shall have practical utility; the accuracy of the burden 
estimates; ways to enhance the quality, utility, and clarity of the 
information to be collected; and ways to minimize the burden of the 
collection of information, including the use of automated collection 
techniques or other forms of technology. Send comments regarding this 
burden estimate or any other aspect of these collections of 
information, including suggestions for reducing the burden, to David 
Rostker, Office of Management and Budget (OMB), by e-mail to [email protected], or by fax to (202) 395-7285; and to the Regulatory 
Policy Division, Bureau of Industry and Security, Department of 
Commerce, P.O. Box 273, Washington, DC 20044.
    3. This rule does not contain policies with Federalism implications 
sufficient to warrant preparation of a Federalism assessment under 
Executive Order 13132.
    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 interim rule. Because 
a notice of proposed rulemaking and an opportunity for public comment 
are not required to be given for this rule under Title 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 BIS will 
consider comments in the development of the final regulations. 
Accordingly, the Department of Commerce (the Department) encourages 
interested persons who wish to comment to do so at the earliest 
possible time to permit the fullest consideration of their views.
    The period for submission of comments will close August 30, 2004. 
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

[[Page 46074]]

theUnited States Government and general comments from foreign 
governments will not be available for public inspection.
    The public record concerning this regulation will be maintained in 
the Bureau of Industry and Security Freedom of Information Records 
Inspection Facility (see ADDRESSES above). 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 the Bureau of Industry and 
Security Freedom of Information Officer. (See FOR FURTHER INFORMATION 
CONTACT section above.)

List of Subjects

15 CFR Parts 732, 740, 747, 750, and 758

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

15 CFR Parts 738, 742, 772, and 774

    Exports, Foreign trade.

15 CFR Part 744

    Exports, Foreign trade, Reporting and recordkeeping requirements.

15 CFR Part 746

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

15 CFR Part 762

    Administrative practice and procedure, Business and Industry, 
Confidential business information, Exports, Foreign trade, Reporting 
and recordkeeping requirements.


0
Accordingly, parts 732, 738, 740, 742, 744, 746, 747, 750, 758, 762, 
772 and 774 of the Export Administration Regulations (15 CFR parts 730-
799) are amended as follows:

PART 732--[AMENDED]

0
1. The authority citation for 15 CFR part 732 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 
FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 7, 2003, 68 FR 
47833, 3 CFR, 2003 Comp., p. 328.


Sec.  732.1  [Amended]

0
2. Section 732.1 is amended:
0
a. By revising the phrase ``Cuba, Iran and Iraq.'' in the next to last 
sentence of paragraph (d)(2) to read ``Cuba and Iran.''; and
0
b. By revising the phrase ``countries subject to a comprehensive 
embargo (e.g., Cuba, Iran and Iraq),'' in (d)(3) to read ``countries 
subject to a comprehensive embargo (e.g., Cuba and Iran),''.

0
3. Section 732.3 is amended by revising paragraph (d)(4) to read as 
follows:


Sec.  732.3  Steps regarding the ten general prohibitions.

* * * * *
    (d) * * *
    (4) Destinations subject to embargo provisions. The Country Chart 
does not apply to Cuba and Iran; and for those countries you should 
review the embargo provisions at part 746 of the EAR and may skip this 
step concerning the Country Chart. For Iraq and Rwanda, the Country 
Chart provides for certain license requirements, and part 746 of the 
EAR provides additional requirements.

PART 738--[AMENDED]

0
4. The authority citation for 15 CFR part 738 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, Pub. L. 106-387; Sec. 
221, Pub. L. 107-56; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 
228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783;

0
5. Supplement No. 1 to part 738 is amended by revising the entry for 
``Iraq'' to read as follows:

Supplement No. 1 to Part 738--Commerce Country Chart

                                                                                                         Commerce Country Chart
                                                                                                          [Reason for control]
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Chemical & biological           Nuclear        National security    Missile    Regional stability     Firearms             Crime control           Anti-Terrorism
                                                                            weapons             nonproliferation  --------------------     tech    --------------------   Convention   -------------------------------------------------
                           Countries                            --------------------------------------------------                    -------------                    ----------------
                                                                   CB  1     CB  2     CB  3     NP  1     NP  2     NS  1     NS  2      MT  1       RS  1     RS  2        FC  1        CC  1     CC  2     CC  3     AT  1     AT  2
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                                                              * * * * * * *
Iraq\1\........................................................        X         X         X         X         X         X         X            X         X         X   ..............        X         X
 
                                                                                                              * * * * * * *
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ This country is subject to sanctions implemented by the United Nations Security Council. See part 746 for additional information and licensing requirements that apply to exports and reexports to the countries so marked. See also
  Sec.   746.3 for license requirements for exports and reexports to Iraq or transfers within Iraq. Although most items controlled only for AT reasons do not require a license to Iraq, some items do require a license. See Sec.
  746.8 for license requirements for exports and reexports to Rwanda.

PART 740--[AMENDED]

0
6. 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, Pub. L. 106-387; E.O. 13026, 61 FR 58767, 3 CFR, 1996 
Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; 
Notice of August 7, 2003, 68 FR 47833, 3 CFR, 2003 Comp., p. 328.


0
7. Section 740.2 is amended:
0
a. By revising the phrase ``to an embargoed destination (Cuba, Iran and 
Iraq)'' of paragraph (a)(6) to read ``to a comprehensively embargoed 
destination (Cuba and Iran)''; and

0
b. By amending paragraph (a)(8)(ii) by inserting ``or (v)'' before the 
semicolon; and
0
c. By adding new paragraph (d) to read as follows:


Sec.  740.2  Restrictions on all License Exceptions

* * * * *
    (d) See Sec.  746.3 for restrictions on certain transfers within 
Iraq of items exported or reexported to Iraq pursuant to a License 
Exception.
* * * * *

0
8. Section 740.7 is amended:
0
a. By revising the phrase ``Cuba, Iran, Iraq, North Korea, Sudan, or 
Syria,'' in paragraph (b)(2) to read ``Cuba, Iran, North Korea, Sudan, 
or Syria,'' and
0
b. By revising paragraph (d)(1) to read as follows:


Sec.  740.7  Computers (CTP).

* * * * *

[[Page 46075]]

    (d) Computer Tier 3--(1) Eligible countries. The countries that are 
eligible to receive exports and reexports under this License Exception 
are Afghanistan, Albania, Algeria, Andorra, Angola, Armenia, 
Azerbaijan, Bahrain, Belarus, Bosnia & Herzegovina, Bulgaria, Cambodia, 
China (People's Republic of), Comoros, Croatia, Djibouti, Egypt, 
Georgia, India, Iraq, Israel, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, 
Laos, Latvia, Lebanon, Macau, Macedonia (The Former Yugoslav Republic 
of ), Mauritania, Moldova, Mongolia, Morocco, Oman, Pakistan, Qatar, 
Russia, Serbia and Montenegro, Saudi Arabia, Tajikistan, Tunisia, 
Turkmenistan, Ukraine, United Arab Emirates, Uzbekistan, Vanuatu, 
Vietnam, and Yemen. As of May 2, 2002, Latvia is moved to Computer Tier 
1.
* * * * *

0
9. Section 740.9 is amended by revising paragraph (c)(2) to read as 
follows:


Sec.  740.9  Temporary, imports, exports, and reexports (TMP).

* * * * *
    (c) * * *
    (1) * * *
    (2) Eligible countries. Encryption software controlled under ECCN 
5D002 is not eligible for export or reexport to a country in Country 
Group E:1 under the provisions of this paragraph (c). All other beta 
test software is eligible for export or reexport to all destinations, 
except Cuba, Iran, and Sudan under the provisions of this paragraph 
(c).
* * * * *


Sec.  740.11  [Amended]

0
10. Section 740.11 is amended by revising the phrase ``Cuba, Iran, 
Iraq, Libya, North Korea, Sudan, or Syria,'' in paragraph (c)(2)(i) to 
read ``Cuba, Iran, Libya, North Korea, Sudan, or Syria,''.


Sec.  740.13  [Amended]

0
11. Section 740.13 is amended:
0
a. By revising the phrase ``Cuba, Iran, Iraq, Libya, North Korea, Sudan 
or Syria.'' in paragraph (e)(4) to read ``a country in Country Group 
E:1.''; and
0
b. By revising the phrase ``Cuba, Iran, Iraq, Libya, North Korea, Sudan 
and Syria.'' in paragraph (e)(6) to read ``a country in Country Group 
E:1.''.
0
12. Supplement No. 1 to part 740 is amended:
0
a. By revising the entry for Iraq in Country Group D; and
0
b. By revising Country Group E to read as follows:
    Supplement No. 1 to PART 740--Country Groups
* * * * *

                                                 Country Group D
----------------------------------------------------------------------------------------------------------------
                                                                 [D:1]                     [D:3]        [D:4]
                           Country                              National      [D:2]      Chemical &    Missile
                                                                Security     Nuclear     Biological   Technology
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
Iraq........................................................            X            X            X            X
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------


                           Country Group E \1\
------------------------------------------------------------------------
                                             [E:1]
                                           Terrorist          [E:2]
                Country                    supporting       Unilateral
                                         countries \2\       embargo
------------------------------------------------------------------------
Cuba..................................               X                X
Iran..................................               X
Korea, North..........................               X
Libya.................................               X
Sudan.................................               X
Syria.................................               X
------------------------------------------------------------------------
\1\ In addition to the controls maintained by the Bureau of Industry and
  Security pursuant to the EAR, note that the Department of the Treasury
  administers:
(a) A comprehensive embargo against Cuba, Iran, and Sudan; and
(b) An embargo against certain persons, e.g., Specially Designated
  Terrorists (SDT), Foreign Terrorist Organizations (FTO), Specially
  Designated Global Terrorists (SDGT), and Specially Designated
  Narcotics Traffickers (SDNT). Please see part 744 of the EAR for
  controls maintained by the Bureau of Industry and Security on these
  and other persons.
\2\ The President made inapplicable with respect to Iraq provisions of
  law that apply to countries that have supported terrorism.

PART 742--[AMENDED]

0
13. The authority citation for 15 CFR 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; 
Sec. 901-911, Pub. L. 106-387; Sec. 221, Pub. L. 107-56; Sec 1503, 
Pub. L. 108-11,117 Stat. 559; 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, 3 CFR, 
2001 Comp., p. 783; Presidential Determination 2003-23 of May 7, 
2003, 68 FR 26459, May 16, 2003; Notice of November 9, 2001, 66 FR 
56965, 3 CFR, 2001 Comp., p. 917; Notice of August 7, 2003, 68 FR 
47833, 3 CFR, 2003 Comp., p. 328.

0
14. Section 742.1 is amended:
0
a. By revising the heading ``Exports and reexports involving Cuba, 
Iran, and Iraq'' of paragraph (c) to read ``Exports and reexports 
involving Cuba and Iran'';
0
b. By revising the parenthetical phrase ``(Cuba, Iran, and Iraq).'' in 
paragraph (c) to read ``(Cuba and Iran).''; and
0
c. By revising paragraph (d) to read as follows:


Sec.  742.1  Introduction.

* * * * *
    (d) Anti-terrorism Controls on Cuba, Iran, Iraq, Libya, North 
Korea, Sudan and Syria. Commerce maintains anti-terrorism controls on 
Cuba, Iran, Iraq, Libya, North Korea, Syria and Sudan under section 
6(a) of the Export Administration Act. Items controlled under section 
6(a) to Iran, Syria, Sudan, North Korea and Libya are described in 
Sec. Sec.  742.8, 742.9, 742.10, 742.19, and 742.20, respectively, and 
in Supplement No. 2 to part 742. Items controlled under section 6(a) to 
Iraq are described in Sec.  746.3(a)(3). Commerce also maintains 
controls under section 6(j) of the EAA to Cuba, Libya, Iran, North 
Korea, Sudan and Syria. Items controlled to these countries under EAA 
section 6(j) are also described in Supplement 2 to part 742. The 
Secretaries of Commerce and State are required to notify appropriate 
Committees of the Congress 30 days before issuing a license for an item 
controlled under section 6(j) to Cuba, Libya, North Korea, Iran, Sudan 
or Syria. As noted in paragraph (c) of this section, if you are 
exporting or reexporting to Cuba, Iran, or Iraq you should review part 
746 of the EAR, Embargoes and Other Special Controls.

0
15. Section 742.5 is amended by revising paragraph (a)(2) to read as 
follows:


Sec.  742.5  Missile technology.

    (a) * * *
    (1) * * *
    (2) The term ``missiles'' is defined as rocket systems (including 
ballistic

[[Page 46076]]

missile systems, space launch vehicles, and sounding rockets) and 
unmanned air vehicle systems (including cruise missile systems, target 
drones, and reconnaissance drones) capable of delivering at least 500 
kilograms (kg) payload to a range of a least 300 kilometers (km). See 
Sec.  746.3 of the EAR for definition of a ``ballistic missile'' to be 
exported or reexported to Iraq.


Sec.  742.12  [Amended]

0
16. Section 742.12 is amended:
0
a. By revising the phrase ``Cuba, Iran, Iraq, Libya, North Korea, 
Sudan, and Syria.'' in paragraph (a)(2) to read ``Cuba, Iran, Libya, 
North Korea, Sudan, and Syria.''; and
0
b. By removing the phrase ``for Iraq see Sec.  746.3;'' from paragraph 
(b)(4)(ii).

0
17. Supplement No. 2 to part 742 is amended by revising paragraph 
(b)(1) to read as follows:

Supplement No. 2 to Part 742--Anti-Terrorism Controls: Iran, Libya, 
North Korea, Syria and Sudan Contract Sanctity Dates and Related 
Policies

* * * * *
    (b) * * *
    (1) On December 28, 1993, the Secretary of State determined that 
the export to Cuba, Libya, Iran, Iraq, North Korea, Sudan, or Syria of 
items described in paragraphs (c)(1) through (c)(5) of this Supplement, 
if destined to military, police, intelligence or other sensitive end-
users, are controlled under EAA section 6(j). Therefore, the 30-day 
advance Congressional notification requirement applies to the export or 
reexport of these items to sensitive end-users in any of these 
countries.

    Note to paragraph (b)(1): The items described in paragraphs 
(c)(1) through (c)(5) are not controlled under EAA section 6(j) to 
military, police, intelligence and other sensitive end-users in 
Iraq. The 30-day prior Congressional notification requirement also 
does not apply for the issuance of licenses for such transactions 
involving Iraq, consistent with Presidential Determination 2003-23, 
in which the President exercised his authority under the Emergency 
Wartime Supplemental Appropriations Act, 2003, to make inapplicable 
with respect to Iraq provisions of law that apply to countries that 
have supported terrorism. As described in Sec.  746.3(a)(3), items 
to all end-users in Iraq classified under ECCNs 0B999, 0D999, 1B999, 
1C992, 1C995, 1C997, 1C999 and 6A992 continue to be controlled under 
EAA section 6(a). Other licensing requirements continue to apply.
* * * * *

PART 744--[AMENDED]

0
18. The authority citation for 15 CFR part 744 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; Sec. 901-911, Pub. L. 106-
387; Sec. 221, Pub. 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. 12947, 60 
FR 5079, 3 CFR, 1995 Comp., p. 356; E.O. 13026, 61 FR 58767, 3 CFR, 
1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., 
p.208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 
13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice of November 9, 
2001, 66 FR 56965, 3 CFR, 2001 Comp., p. 917; Notice of August 7, 
2003, 68 FR 47833, 3 CFR, 2003 Comp., p. 328.


0
19. Part 744 is amended by adding a new section 744.18 to read as 
follows:


Sec.  744.18  Restrictions on exports, reexports, and transfers to 
persons designated in or pursuant to Executive Order 13315.

    Consistent with Executive Order (E.O.) 13315 of August 28, 2003 
(``Blocking Property of the Former Iraqi Regime, Its Senior Officials 
and Their Family Members, and Taking Certain Other Actions''), BIS 
maintains restrictions on exports, reexports, and transfers to persons 
designated in or pursuant to E.O. 13315. These persons include 
individuals and entities listed in the Annex to Executive Order 13315, 
as well as persons subsequently designated pursuant to criteria set 
forth in the order. OFAC includes the names of persons designated 
pursuant to E.O. 13315 in Appendix A to 31 CFR Chapter V, which lists 
persons subject to various sanctions programs administered by OFAC. All 
persons designated in or pursuant to E.O. 13315 are identified in 
Appendix A by the bracketed initials [IRAQ2].
    (a) License Requirements.
    (1) A license requirement applies to the export, reexport, or 
transfer of any item subject to the EAR to--
    (i) Persons listed in the Annex to E.O. 13315 of August 28, 2003; 
or
    (ii) Persons determined to be subject to E.O. 13315.
    (2) To avoid duplication, U.S. persons are not required to seek 
separate BIS authorization for an export, reexport, or transfer to a 
person identified in paragraph (a) of this section of any item subject 
to both the EAR and regulations maintained by OFAC. Therefore, if OFAC 
authorizes an export from the United States or an export, reexport, or 
transfer by a U.S. person to a person identified in paragraph (a) of 
this section, no separate authorization from BIS is necessary.
    (3) U.S. persons must seek authorization from BIS for the export, 
reexport, or transfer to a person identified in paragraph (a) of this 
section of any item subject to the EAR but not subject to regulations 
maintained by OFAC.
    (4) Non-U.S. persons must seek authorization from BIS for the 
export from abroad, reexport, or transfer to a person identified in 
paragraph (a) of this section of any item subject to the EAR.
    (5) Any export, reexport, or transfer to a person identified in 
paragraph (a) of this section by a U.S. person of any item subject both 
to the EAR and regulations maintained by OFAC and not authorized by 
OFAC is a violation of the EAR.
    (6) Any export, reexport, or transfer by a U.S. person to a person 
identified in paragraph (a) of this section of any item subject to the 
EAR that is not subject to regulations maintained by OFAC and not 
authorized by BIS is a violation of the EAR. Any export from abroad, 
reexport, or transfer by a non-U.S. person to a person identified in 
paragraph (a) of this section of any item subject to the EAR and not 
authorized by BIS is a violation of the EAR.
    (7) These licensing requirements supplement any other requirements 
set forth elsewhere in the EAR.
    (b) Exceptions. No License Exceptions or other BIS authorizations 
are available for export, reexport, or transfer to a person identified 
in paragraph (a) of this section of any item subject to the EAR.
    (c) Licensing policy. Applications for licenses for the export, 
reexport, or transfer to a person identified in paragraph (a) of this 
section of any item subject to the EAR will generally be denied. You 
should consult with OFAC concerning transactions subject to OFAC 
licensing requirements.
    (d) Contract sanctity. Contract sanctity provisions are not 
available for license applications reviewed under this section.

PART 746--[AMENDED]

0
20. The authority citation for 15 CFR part 746 is revised to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
22 U.S.C. 287c; Sec 1503, Pub. L. 108-11,117 Stat. 559; 22 U.S.C. 
6004; Sec. 901-911, Pub. L. 106-387; Sec. 221, Pub. L. 107-56; E.O. 
12854, 58 FR 36587, 3 CFR 1993 Comp., p. 614; E.O. 12918, 59 FR 
28205, 3 CFR, 1994 Comp., p. 899; E.O. 13222, 3 CFR, 2001 Comp., p. 
783; Presidential Determination 2003-23 of May 7, 2003, 68 FR 26459, 
May 16, 2003; Notice of August 7, 2003, 68 FR 47833, 3 CFR, 2003 
Comp., p. 328.
0
21. Section 746.1 is amended:
0
a. By revising the phrase ``Cuba, Iran and Iraq'' in paragraph (a) to 
read ``Cuba and Iran';
0
b. By revising paragraphs (a)(2) and (b) to read as follows:

[[Page 46077]]

Sec.  746.1  Introduction.

* * * * *
    (a) * * *
    (1) * * *
    (2) Iran. BIS maintains license requirements and other restrictions 
on exports and reexports to Iran. A comprehensive embargo on 
transactions involving this country is administered by the Department 
of The Treasury's Office of Foreign Assets Control (OFAC).
    (b) Sanctions on selected categories of items to specific 
destinations.
    BIS controls the export and reexport of selected categories of 
items to Iraq and Rwanda consistent with United Nations Security 
Council Resolutions.
* * * * *

0
22. Section 746.3 is revised to read as follows:


Sec.  746.3  Iraq.

    Pursuant to United Nations Security Council (UNSC) Resolutions 1483 
and 1546 and other relevant resolutions, the United Nations maintains 
an embargo on the sale or supply to Iraq of arms and related materiel 
and their means of production, except items required by the Interim 
Government of Iraq or the Multinational Force in Iraq to serve the 
purposes of Resolution 1546. UNSC Resolutions 707 and 687 require that 
Iraq eliminate its nuclear weapons program and restrict its nuclear 
activities to the use of isotopes for medical, industrial or 
agricultural purposes. Such resolutions further mandate that Iraq 
eliminate its chemical and biological weapons programs as well as its 
ballistic missile program. In support of the applicable UNSC 
resolutions, certain Iraq specific license requirements and licensing 
policies are detailed in this section. In addition, this section 
details restrictions on transfers of items subject to the EAR within 
Iraq. Exporters should be aware that other provisions of the EAR, 
including parts 742 and 744, will continue to apply with respect to 
exports and reexports to Iraq and transfers within Iraq.
    (a) License requirements. (1) A license is required for the export 
or reexport to Iraq or transfer within Iraq of any item controlled on 
the Commerce Control List for NS, MT, NP, CW, CB, RS, CC, EI, SI, or XP 
reasons. See part 742 of the EAR.
    (2) A license is required for the export or reexport to Iraq or 
transfer within Iraq of any item controlled on the Commerce Control 
List for UN reasons.
    (3) A license is required for the export or reexport to Iraq or 
transfer within Iraq of items on the Commerce Control List controlled 
for AT reasons under the following ECCNs: 0B999, 0D999, 1B999,1C992, 
1C995, 1C997, 1C999 and 6A992.
    (4) A license is required for the export or reexport to Iraq or 
transfer within Iraq of any item subject to the EAR if, at the time of 
the export, reexport or transfer, you know, have reason to know, or are 
informed by BIS that the item will be, or is intended to be, used for a 
``military end-use'' or by a ``military end-user'', as defined in this 
section. This license requirement does not apply to exports, reexports 
or transfers of items for the official use by personnel and agencies of 
the U.S. Government or exports, reexports or transfers to the Interim 
Government of Iraq or the Multinational Force in Iraq. See Sec.  
740.11(b)(3) of the EAR for the definition of ``agency of the U.S. 
Government.'' BIS may inform an exporter, reexporter, or other person, 
either individually by specific notice or through amendment to the EAR, 
that a license is required for export, reexport or transfer of items 
subject to the EAR to specified end-users, because BIS has determined 
that there is an unacceptable risk of diversion to the uses or users 
described in this paragraph. Specific notice is to be given only by, or 
at the direction of, the Deputy Assistant Secretary for Export 
Administration. When such notice is provided orally, it will be 
followed by a written notice within two working days signed by the 
Deputy Assistant Secretary for Export Administration. The absence of 
any such notification does not excuse the exporter, reexporter or other 
person from compliance with the license requirements of this paragraph.
    (i) Military end-use. In this section, the phrase ``military end-
use'' means incorporation into a military item described on the U.S. 
Munitions List (USML) (22 CFR part 121, International Traffic in Arms 
Regulations) or the Wassenaar Arrangement Munitions List (WAML) (as set 
out on the Wassenaar Arrangement website at http://www.wassenaar.org); 
or use, development, or deployment of military items described on the 
USML or the WAML.
    (ii) Military end-user. In this section, the term ``military end-
user'' means any ``person'' whose actions or functions are intended to 
support ``military end-uses'' as defined in paragraph (a)(4)(i) of this 
section and who is not recognized as a legitimate military organization 
by the U.S. Government.
    (5) Definitions. For purposes of exports or reexports to Iraq or 
transfers within Iraq, ``ballistic missile'' is defined as any missile 
capable of a range greater than 150 kilometers.
    (b) Licensing policy. (1) License applications for the export or 
reexport to Iraq or transfer within Iraq of items listed in paragraph 
(a)(1), (a)(2), or (a)(3) of this section for Iraqi civil nuclear or 
military nuclear activity, except for use of isotopes for medical, 
industrial or agricultural purposes, will be subject to a policy of 
denial.
    (2) License applications for the export or reexport to Iraq or 
transfer within Iraq of machine tools controlled for national security 
(NS) or nuclear non-proliferation (NP) reasons, as well as for any 
items controlled for crime control (CC) or united nations (UN) reasons 
(including items controlled under ECCN 0A986) or ECCNs that end in the 
number ``018'', that would make a material contribution to the 
production, research, design, development, support, maintenance or 
manufacture of Iraqi weapons of mass destruction, ballistic missiles or 
arms and related materiel will be subject to a general policy of 
denial.
    (3) License applications for the export or reexport to Iraq or 
transfer within Iraq of items listed in paragraph (a)(3) of this 
section will be reviewed on a case-by-case basis to determine if they 
would contribute to the building of Iraqi civil infrastructure. 
Applications determined not to contribute to the building of Iraqi 
civil infrastructure will be subject to a general policy of denial.
    (4) License applications for the export or reexport to Iraq or 
transfer within Iraq of items listed in paragraph (a)(4) of this 
section will be subject to a policy of denial.
    (c) License exceptions. You may export or reexport without a 
license if your transaction meets all the requirements of any of the 
following License Exceptions: CIV, CTP, TMP, RPL, GOV, GFT, TSU, BAG, 
AVS, ENC or KMI. For specific requirements of each of these License 
Exceptions, refer to part 740 of the EAR.
    (d) Related State Department controls. The Department of State, 
Directorate of Defense Trade Controls, maintains controls on arms and 
military equipment to Iraq under the International Traffic in Arms 
Regulations (22 CFR parts 120 through 130).
    (e) Transition for licenses issued by the Department of the 
Treasury's Office of Foreign Assets Control. Prior to July 30, 2004, 
the Department of the Treasury's Office of Foreign Assets Control 
(OFAC) exercised primary licensing jurisdiction for transactions with 
Iraq, as provided in 31 CFR part 575. This section establishes a 
validity period for licenses issued by OFAC for exports or reexports to 
Iraq.

[[Page 46078]]

    (1) Validity period. Licenses issued by OFAC for the export or 
reexport of items that require a license to Iraq under the Export 
Administration Regulations (EAR) shall continue to be valid under the 
EAR. For those licenses with specified expiration dates, such dates 
will continue to apply. Licenses without specified expiration dates 
will be valid through July 30, 2005. The recordkeeping requirements 
applicable to exports and reexports of items pursuant to licenses 
issued by OFAC are described in paragraph (e)(3) of this section.

    Note to paragraph (e)(1). Persons that have been authorized by 
OFAC to export or reexport items that are subject to the export 
control jurisdiction of other agencies must consult with OFAC and 
the other relevant agencies with regard to the expiration date of 
the authorization granted by OFAC.

    (2) Reexports or transfers. Items subject to a license requirement 
under the EAR for export or reexport to Iraq as of July 30, 2004, that 
were previously exported or reexported to Iraq under a specific license 
granted by OFAC:
    (i) May not be transferred within Iraq to a new end-user without a 
license from BIS,
    (ii) May be reexported to the United States without a license,
    (iii) May be reexported to third countries subject to the license 
requirements for the destination, end-use or end-user set forth 
elsewhere in the EAR.
    (3) Recordkeeping requirement. Persons in receipt of a specific 
license granted by OFAC described in paragraph (e)(1) of this section 
must maintain a record of those items exported or reexported to Iraq 
pursuant to such specific license and record when the items are 
consumed or destroyed in the normal course of their use in Iraq, 
reexported to a third country not requiring further authorization from 
BIS, or returned to the United States. This requirement applies only to 
items subject to a license requirement under the EAR for export to Iraq 
as of July 30, 2004. These records must be maintained in accordance 
with recordkeeping requirements set forth in part 762 of the EAR and 
must include the following information:
    (i) Date of export or reexport and related details (including means 
of transport);
    (ii) Description of items (including ECCN) and value of items in 
U.S. Dollars;
    (iii) Description of proposed end-use and locations in Iraq where 
items are intended to be used;
    (iv) Parties other than specific OFAC licensee who may be given 
temporary access to the items; and
    (v) Date of consumption or destruction, if the items are consumed 
or destroyed in the normal course of their use in Iraq, or the date of 
reexport to a third country not requiring further authorization from 
BIS, or return to the United States.
    (f) License Requirements for certain transfers within Iraq of items 
subject to the EAR. (1) Licensed items. A license is required for the 
transfer within Iraq of any item subject to the EAR exported or 
reexported pursuant to a specific license issued by the Department of 
the Treasury or a Department of Commerce specific license or License 
Exception.
    (2) Other items. (i) A license is required for the transfer within 
Iraq of any item subject to the EAR, if, at the time of the transfer, 
you know, have reason to know, or are informed by BIS that the item 
will be used in the design, development, production or use of weapons 
of mass destruction or the means of their delivery, as set forth in 
part 744 of the EAR.
    (ii) A license is required for the transfer within Iraq to 
designated terrorists or terrorist organizations, as set forth in 
Sec. Sec.  744.12, 744.13, or 744.14 of the EAR.

PART 747--[NEW]

0
23. New part 747 is added to read as follows:

PART 747--SPECIAL IRAQ RECONSTRUCTION LICENSE

Sec.
747.1 Scope.
747.2 Eligibility requirements.
747.3 Eligible items.
747.4 Steps you must follow to apply for a SIRL.
747.5 SIRL application review process.

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
Sec. 1503, Pub.L. 108-11,117 Stat. 559; E.O. 12918, 59 FR 28205, 3 
CFR, 1994 Comp., p. 899; E.O. 13222, 3 CFR, 2001 Comp., p. 783; 
Presidential Determination 2003-23 of May 7, 2003, 68 FR 26459, May 
16, 2003; Notice of August 7, 2003, 68 FR 47833, 3 CFR, 2003 Comp., 
p. 328.


Sec.  747.1  Scope.

    A Special Iraq Reconstruction License (SIRL) authorizes exports and 
reexports to Iraq and transfers within Iraq of items in furtherance of 
civil reconstruction and other related projects.


Sec.  747.2  Eligibility requirements.

    (a) A SIRL authorizes exports and reexports to Iraq and transfers 
within Iraq of items in furtherance of civil reconstruction and other 
projects funded by:
    (1) The United States Government;
    (2) The United Nations, the World Bank, and the International 
Monetary Fund, their affiliated entities (i.e., International Bank for 
Reconstruction and Development, International Finance Corporation, and 
United Nations Development Programme); and
    (3) Any other entities that the U.S. Government may designate.
    (b) To be eligible for a SIRL, exports, reexports or transfers must 
be made pursuant to and within the scope of contractual or similar 
arrangements in furtherance of civil reconstruction or other projects 
in Iraq funded by any of the entities described above.


Sec.  747.3  Eligible items.

    All items subject to the EAR, other than items controlled for 
missile technology (MT), nuclear nonproliferation (NP) or chemical and 
biological weapons (CB) reasons, are eligible for export, reexport or 
transfer under a SIRL.


Sec.  747.4  Steps you must follow to apply for a SIRL.

    (a) Step One: Prepare your documentation.
    (1) Form BIS-748P, Multipurpose Application, and Form BIS-748P-A, 
Item Appendix. You must complete the Multipurpose Application Form 
(BIS-748P) to apply for a SIRL. Applications must specifically 
describe, on Form BIS-748P-A, Item Appendix, all items subject to the 
EAR to be exported or reexported to Iraq, or transferred within Iraq, 
for which BIS approval is sought. Export control classification numbers 
(ECCNs) must be identified for all such items. Applicants should 
provide BIS commodity classifications, where available, as this will 
assist BIS to rule upon the application quickly.
    (2) Form BIS-748P-B, End-User Appendix. All end-users must be 
identified on Form BIS-748P-B, End-User Appendix.
    (b) Step Two: Narrative statement to support application--In 
support of an application for a SIRL, exporters must submit with the 
application a narrative statement that includes the following 
information:
    (1) Identity of all parties to the proposed transaction;
    (2) Detailed description of the project, funding entity, the 
contract or work order which formed the basis of the transaction, and 
any identification number or project code for that contract or work 
order;
    (3) Explanation of how the project will contribute to the 
reconstruction of

[[Page 46079]]

Iraq and any potential security issues associated with the items to be 
exported, reexported or transferred;
    (4) Written statement from one or more funding agencies referred to 
in Sec.  747.2 addressing whether the transaction is likely to pose 
security issues;
    (5) Certification that items will not be used in any of the 
prohibited proliferation activities described in part 744 of the EAR;
    (6) For items that will remain in the control of the exporter, a 
commitment to return all items to the United States when the authorized 
project or activity is complete, excluding those items that are 
consumed in Iraq, absent specific permission from BIS; and
    (7) Certification that parties to the transaction will obtain a 
license from BIS prior to transferring within Iraq or reexporting items 
to end-users not authorized under the SIRL, unless they would not 
require a BIS license to the new country of destination. (Please see 
the guidance in Sec.  747.5(d) regarding the transfer of items to 
persons within Iraq not included on the End-User Appendix.)


Sec.  747.5  SIRL application review process.

    (a) Application processing time frames. Upon receiving a complete 
application with all requisite supporting documentation, BIS may review 
the application for up to ten days before referring the application to 
the other appropriate agencies. Agencies have 30 days from the date of 
referral to process the application. The U.S. Government will review 
the application as expeditiously as possible.
    (b) Review policy. (1) BIS will review SIRL applications on a case-
by-case basis. To approve a SIRL, BIS must be satisfied that the 
parties to the license will adhere to the conditions of the license and 
the EAR, and that approval of the application will not be detrimental 
to U.S. national security, nonproliferation, or foreign policy 
interests. In reviewing and approving a specific SIRL application, BIS 
may retain the right to limit the items that are eligible or to 
prohibit the export, reexport, or transfer of items under the 
reconstruction license to specific firms or individuals.
    (2) BIS will thoroughly analyze all parties, items and activities 
associated with the applicant's proposed transaction(s). If BIS cannot 
verify that all parties, items and activities are appropriate, or 
establish the reliability of the proposed parties to the application, 
it may deny the application, or modify it by eliminating certain 
consignees, items, activities or other elements.
    (3) The licensing decision will focus on the following factors:
    (i) The proposed end-use(s);
    (ii) If the proposed transaction will contribute to the 
reconstruction of Iraq;
    (iii) If the proposed transaction could contribute to the design, 
development, production, stockpiling, or use of nuclear or chemical or 
biological weapons, or missiles of greater than 150 kilometer range and 
the types of assurances available against these activities;
    (iv) The potential impact of the proposed transaction on the 
security situation in Iraq; and
    (v) The reliability of all parties to the proposed transaction.
    (4) If the U.S. Government determines that the proposed transaction 
does not satisfy all the criteria of part 747, BIS will inform the 
applicant that the agency will review the application under standard 
license procedures for individual items rather than as a SIRL. The 
applicant may elect to have the application Returned Without Action. 
Applicants are not required to use the SIRL procedure and may seek 
authorization under standard license procedures.
    (c) Validity period. SIRLs will be valid until the completion or 
discontinuation of the associated project detailed in the application 
or until otherwise determined by BIS. Applicants are required to submit 
a report to BIS verifying completion of the project or indicating that 
the project has been discontinued. These reports should be submitted to 
the following address: U.S. Department of Commerce, Office of Exporter 
Services, ATTN: Reports, 14th Pennsylvania Ave., NW., Washington, DC, 
20230. The report should include the following information:
    (1) The SIRL reference number;
    (2) The date the project is completed or discontinued;
    (3) Verification that items exported under the authority of the 
SIRL were, as applicable, consumed during use, returned to the United 
States, reexported to a third country, or transferred to a party within 
Iraq for whom the applicant has received a license from BIS; and
    (4) The reference numbers of the licenses received for the reexport 
or transfer within Iraq, if required.
    (d) Post-shipment information. For any items exported or reexported 
pursuant to a SIRL that are not consumed in Iraq, the applicant must 
either:
    (1) Return the items to the United States,
    (2) Reexport the items to a third country, and obtain prior BIS 
approval where required; or
    (3) Seek a license from BIS prior to transferring the items within 
Iraq to an end-user not identified on the End-User Appendix.
    (e) Changes to a SIRL. Changes to a SIRL require BIS prior approval 
if they involve:
    (1) Change to consignee name or address;
    (2) Addition of new consignee;
    (3) Addition of new item;
    (4) Changes to end user information or additional end users added; 
and/or
    (5) Change to license holder ownership or control. Applicants must 
submit a written request for a change to the Office of Exporter 
Services. BIS will respond to these requests in written form. Changes 
involving the following must be reported to BIS within 30 days of their 
occurrence but do not require prior BIS approval:
    (i) License holder address, contact information, or license value; 
or
    (ii) Removing consignee(s), items or end users from the SIRL.
    (f) Administrative actions. If BIS believes any party to a SIRL is 
not complying with all conditions of the SIRL, BIS may take measures 
including revoking or suspending parts of the SIRL, or may restrict 
what items may be shipped under the SIRL. Whenever necessary to protect 
the national interest of the United States, BIS may take any licensing 
action it deems appropriate, without regard to contracts or agreements 
entered into before such administrative action.

PART 750--[AMENDED]

0
24. The authority citation for 15 CFR part 750 is revised to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
Sec. 1503, Pub. L. 108-11,117 Stat. 559; E.O. 13026, 61 FR 58767, 3 
CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., 
p. 783; Presidential Determination 2003-23 of May 7, 2003, 68 FR 
26459, May 16, 2003; Notice of August 7, 2003, 68 FR 47833, 3 CFR, 
2003 Comp., p. 328.


0
25. Section 750.4 is amended by revising paragraph (b)(6)(i) to read as 
follows:


Sec.  750.4  Procedures for processing license applications.

* * * * *
    (b) * * *
    (6) * * *
    (i) Designated countries. The following countries have been 
designated by the Secretary of State as terrorist-supporting countries: 
Cuba,

[[Page 46080]]

Iran, Iraq, Libya, North Korea, Sudan, and Syria. However, the 
congressional notification requirement does not apply to Iraq in view 
of Presidential Determination 2003-23, in which the President exercised 
his authority under the Emergency Wartime Supplemental Appropriations 
Act, 2003, to make inapplicable with respect to Iraq section 620A of 
the Foreign Assistance Act and any other provision of law that applies 
to countries that have supported terrorism.
* * * * *

PART 758--[AMENDED]

0
26. The authority citation for 15 CFR part 758 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 
7, 2003, 68 FR 47833, 3 CFR, 2003 Comp., p. 328.


0
27. Section 758.1 is amended by revising the phrase ``Cuba, Iran, Iraq, 
Libya, North Korea, Sudan, or Syria,'' of paragraph (b)(1) to read ``A 
country in Country Group E:1 of Supplement No. 1 to part 740 of the 
EAR''.

PART 762--[AMENDED]

0
28. The authority citation for part 762 continues to read as follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 
7, 2003, 68 FR 47833, 3 CFR, 2003 Comp., p. 328.


0
29. Section 762.2 is amended by redesignating paragraphs (b)(10) 
through (b)(43) as (b)(12) through (b)(45); and inserting new 
paragraphs (b)(10) and (b)(11) to read as follows:


Sec.  762.2  Records to be retained.

* * * * *
    (b) * * *
    (10) Sec.  746.3 Iraq.
    (11) Part 747, Special Iraq Reconstruction License.
* * * * *

PART 772--[AMENDED]

0
30. The authority citation for part 772 continues to read as follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 
7, 2003, 68 FR 47833, 3 CFR, 2003 Comp., p. 328.
0
31. Section 772.1 is amended by revising the definition of ``Missiles'' 
to read as follows:


Sec.  772.1  Definitions of terms as used in the Export Administration 
Regulations (EAR).

* * * * *
    ``Missiles''. (All)--Rocket systems (including ballistic missile 
systems, space launch vehicles, and sounding rockets) and unmanned air 
vehicle systems (including cruise missile systems, target drones, and 
reconnaissance drones) ``capable of'' delivering at least 500 kilograms 
payload to a range of at least 300 kilometers. See Sec.  746.3 for 
definition of a ``ballistic missile'' to be exported or reexported to 
Iraq or transferred within Iraq.

PART 774--[AMENDED]

0
32. The authority citation for 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, Pub. L. 106-387; Sec. 
221, Pub. L. 107-56; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 
228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of 
August 7, 2003, 68 FR 47833, 3 CFR, 2003 Comp., p. 328.


0
33. In Supplement No. 1 part 774 (the Commerce Control List), Category 
0--Nuclear Materials, Facilities, and Equipment [and Miscellaneous 
Items], Export Control Classification Number (ECCN) 0A018 is amended by 
revising the License Requirements section to read as follows:

0A018 Items on the Wassenaar Munitions List

License Requirements
    Reason for Control: NS, AT, UN.

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry............  NS Column 1.
AT applies to entire entry............  AT Column 1.
UN applies to entire entry............  Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *

0
34. In Supplement No. 1 part 774 (the Commerce Control List), Category 
0--Nuclear Materials, Facilities, and Equipment [and Miscellaneous 
Items], Export Control Classification Number (ECCN) 0A918 is amended by 
revising the License Requirements section to read as follows:

0A918 Miscellaneous Military Equipment not on the Wassenaar Munitions 
List

License Requirements
    Reason for Control: RS, AT, UN.

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
RS applies to entire entry............  RS Column 2.
AT applies to entire entry............  AT Column 1.
UN applies to entire entry............  Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *


0
35. In Supplement No. 1 part 774 (the Commerce Control List), Category 
0--Nuclear Materials, Facilities, and Equipment [and Miscellaneous 
Items], Export Control Classification Number (ECCN) 0A984 is amended by 
revising the License Requirements section to read as follows:

0A984 Shotguns, barrel length 18 inches (45.72 cm) inches or over; 
buckshot shotgun shells; except equipment used exclusively to treat or 
tranquilize animals, and except arms designed solely for signal, flare, 
or saluting use; and parts, n.e.s.

License Requirements
    Reason for Control: CC, FC, UN.

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
FC applies to entire entry............  FC Column 1.
CC applies to shotguns with a barrel..  CC Column 1.
length greater than or equal to 18      ................................
 in.(45.72 cm), but less than 24
 in.(60.96 cm) or buckshot shotgun
 shells controlled by this entry,
 regardless of end-user.
CC applies to shotguns with a barrel    CC Column 2.
 length greater than or equal to 24
 in.(60.96 cm), regardless of end-user.
CC applies to shotguns with a barrel    CC Column 3.
 length greater than or equal to 24
 in.(60.96 cm) if for sale or resale
 to police or law enforcement.
UN applies to entire entry............  Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *

0
36. In Supplement No. 1 part 774 (the Commerce Control List), Category 
0--Nuclear Materials, Facilities, and Equipment [and Miscellaneous 
Items], Export Control Classification Number (ECCN) 0A985 is amended by 
revising the License Requirements section to read as follows:

[[Page 46081]]

0A985 Discharge type arms (for example, stun guns, shock batons, 
electric cattle prods, immobilization guns and projectiles) except 
equipment used exclusively to treat or tranquilize animals, and except 
arms designed solely for signal, flare, or saluting use; and parts, 
n.e.s.

License Requirements
    Reason for Control: CC, UN.
    Control(s): CC applies to entire entry. A license is required for 
ALL destinations, except Canada, regardless of end-use. Accordingly, a 
column specific to this control does not appear on the Commerce Country 
Chart. (See part 742 of the EAR for additional information.)

UN applies to entire entry............  Iraq and Rwanda
------------------------------------------------------------------------

* * * * *


0
37. In Supplement No. 1 part 774 (the Commerce Control List), Category 
0--Nuclear Materials, Facilities, and Equipment [and Miscellaneous 
Items], Export Control Classification Number (ECCN) 0A986 is amended by 
revising the License Requirements section to read as follows:

0A986 Shotgun shells, except buckshot shotgun shells, and parts

License Requirements
    Reason for Control: AT, FC, UN.
    Control(s)--Country Chart: AT applies to entire entry. A license is 
required for items controlled by this entry to North Korea for anti-
terrorism reasons. The Commerce Country Chart is not designed to 
determine AT licensing requirements for this entry. See Sec.  742.19 of 
the EAR for additional information.

FC applies to entire entry............  FC Column 1.
UN applies to entire entry............  Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *


0
38. In Supplement No. 1 part 774 (the Commerce Control List), Category 
0--Nuclear Materials, Facilities, and Equipment [and Miscellaneous 
Items], Export Control Classification Number (ECCN) 0A987 is amended by 
revising the License Requirements section to read as follows:

0A987 Optical sighting devices for firearms (including shotguns 
controlled by 0A984); and parts, n.e.s.

License Requirements
    Reason for Control: FC, CC, UN.

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
FC applies to optical sights for        FC Column 1.
 firearms, including shotguns
 described in ECCN 0A984, and related
 parts.
CC applies to entire entry............  CC Column 1.
UN applies to entire entry............  Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *


0
39. In Supplement No. 1 part 774 (the Commerce Control List), Category 
0--Nuclear Materials, Facilities, and Equipment [and Miscellaneous 
Items], Export Control Classification Number (ECCN) 0A988 is amended by 
revising the License Requirements section to read as follows:

0A988 Conventional military steel helmets as described by 0A018.d.1.; 
and machetes

License Requirements
    Reason for Control: UN.
    Control(s): UN applies to entire entry. A license is required for 
conventional military steel helmets as described by 0A018.d.1 to Iraq 
and Rwanda. A license is required for machetes to Iraq and Rwanda. The 
Commerce Country Chart is not designed to determine licensing 
requirements for this entry. See part 746 of the EAR for additional 
information.

    Note: Exports from the U.S. and transhipments to Iran must be 
licensed by the Department of Treasury, Office of Foreign Assets 
Control. (See Sec.  746.7 of the EAR for additional information on 
this requirement.)

* * * * *


0
40. In Supplement No. 1 part 774 (the Commerce Control List), Category 
0--Nuclear Materials, Facilities, and Equipment [and Miscellaneous 
Items], Export Control Classification Number (ECCN) 0B986 is amended by 
revising the License Requirements section to read as follows:

0B986 Equipment specially designed for manufacturing shotgun shells; 
and ammunition hand-loading equipment for both cartridges and shotgun 
shells

License Requirements
    Reason for Control: AT, UN.
    Control(s): AT applies to entire entry. A license is required for 
items controlled by this entry to North Korea for anti-terrorism 
reasons. The Commerce Country Chart is not designed to determine AT 
licensing requirements for this entry. See Sec.  742.19 of the EAR for 
additional information.
    UN applies to entire entry. A license is required for items 
controlled by this entry to Iraq and Rwanda. The Commerce Country Chart 
is not designed to determine licensing requirements for this entry. See 
part 746 of the EAR for additional information.
* * * * *


0
41. In Supplement No. 1 part 774 (the Commerce Control List), Category 
0--Nuclear Materials, Facilities, and Equipment [and Miscellaneous 
Items], Export Control Classification Number (ECCN) 0B999 is amended by 
revising the License Requirements section to read as follows:

0B999 Specific processing equipment, as follows (see List of Items 
Controlled)

License Requirements
    Reason for Control: AT.
    Control(s)--Country Chart: AT applies to entire entry. A license is 
required for items controlled by this entry to Iraq and North Korea for 
anti-terrorism reasons. The Commerce Country Chart is not designed to 
determine AT licensing requirements for this entry. See Sec.  742.19 
and Sec.  746.3 of the EAR for additional information.
* * * * *


0
42. In Supplement No. 1 part 774 (the Commerce Control List), Category 
0--Nuclear Materials, Facilities, and Equipment [and Miscellaneous 
Items], Export Control Classification Number (ECCN) 0D999 is amended by 
revising the License Requirements section to read as follows:

0D999 Specific software, as follows (see List of Items Controlled)

License Requirements
    Reason for Control: AT.
    Control(s)--Country Chart: AT applies to entire entry. A license is 
required for items controlled by this entry to Iraq and North Korea for 
anti-terrorism reasons. The Commerce Country Chart is not designed to 
determine AT licensing requirements for this entry. See Sec.  742.19 
and Sec.  746.3 of the EAR for additional information.
* * * * *


0
43. In Supplement No. 1 part 774 (the Commerce Control List), Category 
0--Nuclear Materials, Facilities, and Equipment [and Miscellaneous 
Items], Export Control Classification Number (ECCN) 0E018 is amended by 
revising the License Requirements section to read as follows:

[[Page 46082]]

0E018 ``Technology'' for the ``development'', ``production'', or 
``use'' of items controlled by 0A018.a through 0A018.c

License Requirements
    Reason for Control: NS, UN, AT.

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry............  NS Column 1.
UN applies to entire entry............  Iraq and Rwanda.
AT applies to entire entry............  AT Column 1.
------------------------------------------------------------------------

* * * * *


0
44. In Supplement No. 1 part 774 (the Commerce Control List), Category 
0--Nuclear Materials, Facilities, and Equipment [and Miscellaneous 
Items], Export Control Classification Number (ECCN) 0E918 is amended by 
revising the License Requirements section to read as follows:

0E918 ``Technology'' for the ``development'', ``production'', or 
``use'' of bayonets

License Requirements
    Reason for Control: RS, UN, AT.

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
RS applies to entire entry............  RS Column 2.
UN applies to entire entry............  Iraq and Rwanda.
AT applies to entire entry............  AT Column 1.
------------------------------------------------------------------------

* * * * *


0
45. In Supplement No. 1 part 774 (the Commerce Control List), Category 
0--Nuclear Materials, Facilities, and Equipment [and Miscellaneous 
Items], Export Control Classification Number (ECCN) 0E984 is amended by 
revising the License Requirements section to read as follows:

0E984 Technology'' for the ``development'' or ``production'' of 
shotguns controlled by 0A984 and buckshot shotgun shells

License Requirements
    Reason for Control: CC, UN.

 
------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
CC applies to ``technology'' for        CC Column 1.
 shotguns with a barrel length over 18
 in. (45.72 cm) but less than 24 in.
 (60.96 cm) and shotgun shells,
 regardless of end-user.
CC applies to ``technology'' for        CC Column 2.
 shotguns with a barrel length over 24
 in. (60.96 cm), regardless of end-
 user.
CC applies to ``technology'' for        CC Column 3.
 shotguns with a barrel length over 24
 in. (60.96 cm) if for sale or resale
 to police or law enforcement.
UN applies to entire entry............  Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *

0
46. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Materials, Chemicals, ``Microorganisms,'' and Toxins, 
Export Control Classification Number (ECCN) 1A005 is amended by 
revising the License Requirements section to read as follows:

1A005 Body armor, and specially designed components therefor, not 
manufactured to military standards or specifications, nor to their 
equivalents in performance

License Requirements
    Reason for Control: NS, UN, AT

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry............  NS Column 2.
UN applies to entire entry............  Iraq and Rwanda.
AT applies to entire entry............  AT Column 1.
------------------------------------------------------------------------

* * * * *


0
47. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Materials, Chemicals, ``Microorganisms,'' and Toxins, 
Export Control Classification Number (ECCN) 1B018 is amended by 
revising the License Requirements section to read as follows:

1B018 Equipment on the International Munitions List

License Requirements
    Reason for Control: NS, MT, RS, AT, UN.

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry............  NS Column 1.
MT applies to equipment for the         MT Column 1.
 ``production'' of rocket propellants.
RS applies to 1B018.a.................  RS Column 2.
AT applies to entire entry............  AT Column 1.
UN applies to entire entry............  Iraq and Rwanda.
------------------------------------------------------------------------



0
48. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Materials, Chemicals, ``Microorganisms,'' and Toxins, 
Export Control Classification Number (ECCN) 1B999 is amended by 
revising the License Requirements section to read as follows:

1B999 Specific processing equipment, n.e.s., as follows (see List of 
Items Controlled)

License Requirements
    Reason for Control: AT.
    Control(s)--Country Chart AT applies to entire entry. A license is 
required for items controlled by this entry to Iraq and North Korea for 
anti-terrorism reasons. The Commerce Country Chart is not designed to 
determine AT licensing requirements for this entry. See Sec.  742.19 
and Sec.  746.3 of the EAR for additional information.
* * * * *

0
49. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Materials, Chemicals, ``Microorganisms,'' and Toxins, 
Export Control Classification Number (ECCN) 1C018 is amended by 
revising the License Requirements section to read as follows:

1C018 Commercial charges and devices containing energetic materials on 
the International Munitions List and certain chemicals as follows (see 
List of Items Controlled)

License Requirements
    Reason for Control: NS, MT, AT, UN.

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry except as    NS Column 1.
 noted in 1C018.m.
MT applies to 1C018.m except as noted   MT Column 1.
 therein.
AT applies to entire entry............  AT Column 1.
UN applies to entire entry............  Iraq and Rwanda.
------------------------------------------------------------------------


* * * * *

[[Page 46083]]


0
50. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Materials, Chemicals, ``Microorganisms,'' and Toxins, 
Export Control Classification Number (ECCN) 1C350 is amended by 
revising the License Requirements section to read as follows:

1C350 Chemicals that may be used as precursors for toxic chemical 
agents

License Requirements:
    Reason for Control: CB, CW, AT.

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
CB applies to entire entry............  CB Column 2.
------------------------------------------------------------------------

    CW applies to 1C350.b and .c. The Commerce Country Chart is not 
designed to determine licensing requirements for items controlled for 
CW reasons. A license is required, for CW reasons, to export or 
reexport Schedule 2 chemicals and mixtures identified in 1C350.b to 
States not Party to the CWC (destinations not listed in Supplement No. 
2 to part 745 of the EAR). A license is required, for CW reasons, to 
export Schedule 3 chemicals and mixtures identified in 1C350.c to 
States not Party to the CWC, unless an End-Use Certificate issued by 
the government of the importing country has been obtained by the 
exporter prior to export. A license is required, for CW reasons, to 
reexport Schedule 3 chemicals and mixtures identified in 1C350.c from a 
State not Party to the CWC to any other State not Party to the CWC. 
(See Sec.  742.18 of the EAR for license requirements and policies for 
toxic and precursor chemicals controlled for CW reasons. See Sec.  
745.2 of the EAR for End-Use Certificate requirements that apply to 
exports of Schedule 3 chemicals to countries not listed in Supplement 
No. 2 to part 745 of the EAR.)
    AT applies to entire entry. The Commerce Country Chart is not 
designed to determine licensing requirements for items controlled for 
AT reasons in 1C350. A license is required, for AT reasons, to export 
or reexport items controlled by 1C350 to a country in Country Group E:1 
of Supplement No. 1 to part 740 of the EAR. (See part 742 of the EAR 
for additional information on the AT controls that apply to Iran, 
Libya, North Korea, Sudan, and Syria. See part 746 of the EAR for 
additional information on the comprehensive trade sanctions that apply 
to Cuba and Iran. See Supplement No. 1 to part 736 of the EAR for 
export controls on Syria.)
License Requirement Notes:
    1. SAMPLE SHIPMENTS: Subject to the following requirements and 
restrictions, 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 a single chemical to any one consignee during a 
calendar year. 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.
    a. Chemicals Not Eligible:
    A. [RESERVED]
    B. CWC Schedule 2 chemicals (States not Party to the CWC). No CWC 
Schedule 2 chemical or mixture identified in 1C350.b is eligible for 
sample shipment to States not Party to the CWC (i.e., destinations not 
listed in Supplement No. 2 to part 745 of the EAR) without a license.
    b. Countries Not Eligible: Countries in Country Group E:1 of 
Supplement No. 1 to part 740 of the EAR are not eligible to receive 
sample shipments of any chemicals controlled by this ECCN without a 
license.
    c. Sample shipments that require an End-Use Certificate for CW 
reasons: No CWC Schedule 3 chemical or mixture identified in 1C350.c is 
eligible for sample shipment to States not Party to the CWC 
(destinations not listed in Supplement No. 2 to part 745 of the EAR) 
without a license, unless an End-Use Certificate issued by the 
government of the importing country is obtained by the exporter prior 
to export (see Sec.  745.2 of the EAR for End-Use Certificate 
requirements).
    d. Sample shipments that require a license for reasons set forth 
elsewhere in the EAR: Sample shipments, as described in this Note 1, 
may require a license for reasons set forth elsewhere in the EAR. See, 
in particular, the end-use/end-user restrictions in part 744 of the 
EAR, and the restrictions that apply to embargoed countries in part 746 
of the EAR.
    e. Quarterly report requirement. 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 Industry and Security, P.O. Box 
273, Washington, DC 20044, Attn: ``Report of Sample Shipments of 
Chemical Precursors''.
    2. MIXTURES:
    a. Mixtures that contain precursor chemicals identified in ECCN 
1C350, in concentrations that are below the levels indicated in 1C350.a 
through .d, are controlled by ECCN 1C395 or 1C995 and are subject to 
the licensing requirements specified in those ECCNs.
    b. A license is not required for mixtures controlled under this 
ECCN when the controlled chemical in the mixture is a normal ingredient 
in consumer goods packaged for retail sale for personal use. Such 
consumer goods are classified as 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. Percent 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.
    3. COMPOUNDS. Compounds created with any chemicals identified in 
this ECCN 1C350 may be shipped NLR (No License Required), without 
obtaining an End-Use Certificate, unless those compounds are also 
identified in this entry or require a license for reasons set forth 
elsewhere in the EAR.
    4. TESTING KITS: Certain medical, analytical, diagnostic, and food 
testing kits containing small quantities of chemicals identified in 
this ECCN 1C350 are excluded from the scope of this ECCN and are 
controlled under ECCN 1C395 or 1C995. (Note that replacement reagents 
for such kits are controlled by this ECCN 1C350 if the reagents contain 
one or more of the precursor chemicals identified in 1C350 in 
concentrations equal to or greater than the control levels for mixtures 
indicated in 1C350.)

    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 (see 
1C350.d.7 in the List of Items Controlled) includes its liquid, 
gaseous, and aqueous phases, and hydrates.
* * * * *


0
51. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Materials, Chemicals, ``Microorganisms,'' and Toxins, 
Export

[[Page 46084]]

Control Classification Number (ECCN) 1C355 is amended by revising the 
License Requirements section to read as follows:

1C355 Chemical Weapons Convention (CWC) Schedule 2 and 3 chemicals and 
families of chemicals not controlled by ECCN 1C350 or by the Department 
of State under the ITAR

License Requirements
    Reason for Control: CW, AT.
    Control(s) CW applies to entire entry. The Commerce Country Chart 
is not designed to determine licensing requirements for items 
controlled for CW reasons. A license is required to export or reexport 
CWC Schedule 2 chemicals and mixtures identified in 1C355.a to States 
not Party to the CWC (i.e., destinations not listed in Supplement No. 2 
to part 745 of the EAR). A license is required to export CWC Schedule 3 
chemicals and mixtures identified in 1C355.b to States not Party to the 
CWC, unless an End-Use Certificate issued by the government of the 
importing country is obtained by the exporter, prior to export. A 
license is required to reexport CWC Schedule 3 chemicals and mixtures 
identified in 1C355.b from a State not Party to the CWC to any other 
State not Party to the CWC. (See Sec.  742.18 of the EAR for license 
requirements and policies for toxic and precursor chemicals controlled 
for CW reasons.)
    AT applies to entire entry. The Commerce Country Chart is not 
designed to determine licensing requirements for items controlled for 
AT reasons in 1C355. A license is required, for AT reasons, to export 
or reexport items controlled by 1C355 to a country in Country Group E:1 
of Supplement No. 1 to part 740 of the EAR. (See part 742 of the EAR 
for additional information on the AT controls that apply to Iran, 
Libya, North Korea, Sudan, and Syria. See part 746 of the EAR for 
additional information on the comprehensive trade sanctions that apply 
to Cuba and Iran. See Supplement No. 1 to part 736 of the EAR for 
export controls on Syria.)
* * * * *

0
52. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Materials, Chemicals, ``Microorganisms,'' and Toxins, 
Export Control Classification Number (ECCN) 1C395 is amended by 
revising the License Requirements section to read as follows:

1C395 Mixtures and medical, analytical, diagnostic, and food testing 
kits not controlled by ECCN 1C350, as follows (See List of Items 
Controlled)

License Requirements
    Reason for Control: CB, CW, AT
    Control(s): CB applies to entire entry. The Commerce Country Chart 
is not designed to determine licensing requirements for items 
controlled for CB reasons in 1C395. A license is required, for CB 
reasons, to export or reexport mixtures controlled by 1C395.a and test 
kits controlled by 1C395.b to States not Party to the CWC (i.e., 
destinations not listed in Supplement No. 2 to part 745 of the EAR).
    CW applies to entire entry. The Commerce Country Chart is not 
designed to determine licensing requirements for items controlled for 
CW reasons. A license is required for CW reasons, as follows, to States 
not Party to the CWC (i.e., destinations not listed in Supplement No. 2 
to part 745 of the EAR): (1) exports and reexports of mixtures 
controlled by 1C395.a, (2) exports and reexports of test kits 
controlled by 1C395.b that contain CWC Schedule 2 chemicals controlled 
by ECCN 1C350, (3) exports of test kits controlled by 1C395.b that 
contain CWC Schedule 3 chemicals controlled by ECCN 1C350, except that 
a license is not required, for CW reasons, to export test kits 
containing CWC Schedule 3 chemicals if an End-Use Certificate issued by 
the government of the importing country is obtained by the exporter 
prior to export, and (4) reexports from States not Party to the CWC of 
test kits controlled by 1C395.b that contain CWC Schedule 3 chemicals. 
(See Sec.  742.18 of the EAR for license requirements and policies for 
toxic and precursor chemicals controlled for CW reasons.)
    AT applies to entire entry. The Commerce Country Chart is not 
designed to determine licensing requirements for items controlled for 
AT reasons in 1C395. A license is required, for AT reasons, to export 
or reexport items controlled by 1C395 a country in Country Group E:1 of 
Supplement No. 1 to part 740 of the EAR. (See part 742 of the EAR for 
additional information on the AT controls that apply to Iran, Libya, 
North Korea, Sudan, and Syria. See part 746 of the EAR for additional 
information on the comprehensive trade sanctions that apply to Cuba and 
Iran. See Supplement No. 1 to part 736 of the EAR for export controls 
on Syria.)
* * * * *

0
53. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Materials, Chemicals, ``Microorganisms,'' and Toxins, 
Export Control Classification Number (ECCN) 1C992 is amended by 
revising the License Requirements section to read as follows:

1C992 Commercial charges and devices containing energetic materials, 
n.e.s. and nitrogen trifluoride in a gaseous state

License Requirements
    Reason for Control: AT

------------------------------------------------------------------------
              Control(s)                          Country Chart
------------------------------------------------------------------------
AT applies to entire entry              AT Column 1 and Iraq
------------------------------------------------------------------------

* * * * *

0
54. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Materials, Chemicals, ``Microorganisms,'' and Toxins, 
Export Control Classification Number (ECCN) 1C995 is amended by 
revising the License Requirements section to read as follows:

1C995 Mixtures not controlled by ECCN 1C350, ECCN 1C355 or ECCN 1C395 
that contain chemicals controlled by ECCN 1C350 or ECCN 1C355 and 
medical, analytical, diagnostic, and food testing kits not controlled 
by ECCN 1C350 or ECCN 1C395 that contain chemicals controlled by ECCN 
1C350.d, as follows (see List of Items Controlled)

License Requirements
    Reason for Control: AT Column 1 and Iraq.
* * * * *

0
55. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Materials, Chemicals, ``Microorganisms,'' and Toxins, 
Export Control Classification Number (ECCN) 1C999 is amended by 
revising the License Requirements section to read as follows:

1C999 Specific materials, n.e.s., as follows (see List of Items 
Controlled)

License Requirements
    Reason for Control: AT
    Control(s)--Country Chart: AT applies to entire entry. A license is 
required for items controlled by this entry to Iraq and North Korea for 
anti-terrorism reasons. The Commerce Country Chart is not designed to 
determine AT licensing requirements for this entry. See Sec.  742.19 
and Sec.  746.3 of the EAR for additional information.
* * * * *

0
56. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Materials, Chemicals,

[[Page 46085]]

``Microorganisms,'' and Toxins, Export Control Classification Number 
(ECCN) 1D018 is amended by revising the License Requirements section to 
read as follows:

1D018 ``Software'' specially designed or modified for the 
``development'', ``production'', or ``use'' of items controlled by 
1B018

License Requirements
    Reason for Control: NS, MT, AT, UN.

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry............  NS Column 1.
MT applies to ``software'' for the      MT Column 1.
 ``development'', ``production'', or
 ``use'' of items controlled by 1B018
 for MT reasons.
AT applies to entire entry............  AT Column 1.
UN applies to entire entry............  Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *

0
57. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 2--Materials Processing, Export Control Classification Number 
(ECCN) 2B018 is amended by revising the License Requirements section to 
read as follows:

2B018 Equipment on the International Munitions List

License Requirements
    Reason for Control: NS, MT, RS, AT, UN

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry............  NS Column 1.
MT applies to specialized machinery,    MT Column 1.
 equipment, and gear for producing
 rocket systems (including ballistic
 missile systems, space launch
 vehicles, and sounding rockets) and
 unmanned air vehicle systems
 (including cruise missile systems,
 target drones, and reconnaissance
 drones) usable in systems that are
 controlled for MT reasons including
 their propulsion systems and
 components, and pyrolytic deposition
 and densification equipment.
RS applies to entire entry............  RS Column 2.
AT applies to entire entry............  AT Column 1.
UN applies to entire entry............  Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *

0
58. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 2--Materials Processing, Export Control Classification Number 
(ECCN) 2D018 is amended by revising the License Requirements section to 
read as follows:

2D018 ``Software'' for the ``development'', ``production'' or ``use'' 
of equipment controlled by 2B018

License Requirements
    Reason for Control: NS, MT, AT, UN

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry............  NS Column 1.
MT applies to ``software'' for          MT Column 1.
 equipment controlled by 2B018 for MT
 reasons.
AT applies to entire entry............  AT Column 1.
UN applies to entire entry............  Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *

0
59. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 2--Materials Processing, Export Control Classification Number 
(ECCN) 2E018 is amended by revising the License Requirements section to 
read as follows:

2E018 ``Technology'' for the ``use'' of equipment controlled by 2B018

License Requirements
    Reason for Control: NS, MT, AT, UN

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry............  NS Column 1.
MT applies to ``technology'' for        MT Column 1.
 equipment controlled by 2B018 for MT
 reasons.
AT applies to entire entry............  AT Column 1.
UN applies to entire entry............  Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *

0
60. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 4--Computers, the following Export Control Classification 
Number (ECCN) 4A003 is amended by revising the License Requirements 
section, to read as follows:

4A003 ``Digital computers'', ``electronic assemblies'', and related 
equipment therefor, as follows, and specially designed components 
therefor

License Requirements
    Reason for Control: NS, MT, CC, AT, NP, XP

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to 4A003.b and .c..........  NS Column 1.
NS applies to 4A003.a, .e, and .g.....  NS Column 2.
MT applies to digital computers used    MT Column 1.
 as ancillary equipment for test
 facilities and equipment that are
 controlled by 9B005 or 9B006.
CC applies to ``digital computers''     CC Column 1.
 for computerized finger-print
 equipment.
AT applies to entire entry (refer to    AT Column 1.
 4A994 for controls on ``digital
 computers'' with a CTP >=6 but <= to
 190,000 MTOPS).
------------------------------------------------------------------------

    NP applies, unless a License Exception is available. See Sec.  
742.3(b) of the EAR for information on applicable licensing review 
policies.
    XP applies to ``digital computers'' with a CTP greater than 190,000 
MTOPS, unless a License Exception is available. XP controls vary 
according to destination and end-user and end-use; however, XP does not 
apply to Canada. See Sec.  742.12 of the EAR for additional 
information.

    Note: For all destinations, except those countries in Country 
Group E:1 of Supplement No. 1 to part 740 of the EAR, no license is 
required (NLR) for computers with a CTP not greater than 190,000 
MTOPS and for ``electronic assemblies'' described in 4A003.c that 
are not capable of exceeding a CTP greater than 190,000 MTOPS in 
aggregation, except certain transfers as set forth in Sec.  746.3 
(Iraq). Computers controlled in this entry for MT reasons are not 
eligible for NLR.

* * * * *

0
61. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 6--Sensors and Lasers, Export Control Classification Number 
(ECCN) 6A002 is amended by revising the License Requirements section to 
read as follows:

6A002 Optical sensors

License Requirements
    Reason for Control: NS, MT, CC, RS, AT, UN

[[Page 46086]]



------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry............  NS Column 2.
MT applies to optical detectors in      MT Column 1.
 6A002.a.1, a.3, or .e that are
 specially designed or modified to
 protect ``missiles'' against nuclear
 effects (e.g., Electromagnetic Pulse
 (EMP), X-rays, combined blast and
 thermal effects), and usable for
 ``missiles''.
RS applies to 6A002.a.1, a.2, a.3, .c,  RS Column 1.
 and .e.
CC applies to police-model infrared     CC Column 1.
 viewers in 6A002.c.
AT applies to entire entry............  AT Column 1.
UN applies to 6A002.a.1, a.2 a.3 and c  Iraq and Rwanda.
------------------------------------------------------------------------


    License Requirement Notes: See Sec.  743.1 of the EAR for 
reporting requirements for exports under License Exceptions.

* * * * *

0
62. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 6--Sensors and Lasers, Export Control Classification Number 
(ECCN) 6A003 is amended by revising the License Requirements section to 
read as follows:

6A003 Cameras

License Requirements
    Reason for Control: NS, NP, RS, AT, UN

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry............  NS Column 2.
NP applies to items controlled in       NP Column 1.
 paragraphs 6A003.a.2, a.3 and a.4.
RS applies to items controlled in       RS Column 1.
 6A003.b.3 and b.4.
AT applies to entire entry............  AT Column 1.
UN applies to items controlled in       Iraq and Rwanda.
 6A003.b.3 and b.4.
------------------------------------------------------------------------

* * * * *

0
63. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 6--Sensors and Lasers, is amended by removing Export Control 
Classification Number (ECCN) 6A018.

0
64. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 6--Sensors and Lasers, Export Control Classification Number 
(ECCN) 6A992 is amended by revising the License Requirements section to 
read as follows:

6A992 Optical Sensors, not controlled by 6A002

License Requirements
    Reason for Control: AT

------------------------------------------------------------------------
               Control(s)                         Country Chart
------------------------------------------------------------------------
 AT applies to entire entry...........   AT Column 1 and Iraq.
------------------------------------------------------------------------

* * * * *

0
65. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 6--Sensors and Lasers, Export Control Classification Number 
(ECCN) 6E001 is amended by revising the heading and the License 
Requirements section to read as follows:

6E001 ``Technology'' according to the General Technology Note for the 
``development'' of equipment, materials or ``software'' controlled by 
6A (except 6A018, 6A991, 6A992, 6A994, 6A995, 6A996, 6A997, or 6A998), 
6B (except 6B995), 6C (except 6C992 or 6C994), or 6D (except 6D991, 
6D992, or 6D993

License Requirements
    Reason for Control: NS, MT, NP, RS, CC, AT, UN

------------------------------------------------------------------------
               Control(s)                         Country chart
------------------------------------------------------------------------
 NS applies to ``technology'' for        NS Column 1.
 items controlled by 6A001 to 6A008,
 6B004 to 6B008, 6C002 to 6C005, or
 6D001 to 6D003.
 MT applies to ``technology'' for        MT Column 1.
 items controlled by 6A002, 6A007,
 6A008, 6A102, 6A107, 6A108, 6B008,
 6B108, 6D001, 6D002, 6D102 or 6D103
 for MT reasons.
 NP applies to ``technology'' for        NP Column 1.
 items controlled by 6A003, 6A005,
 6A202, 6A203, 6A205, 6A225, 6A226, or
 6D001 for NP reasons.
 RS applies to ``technology'' for        RS Column 1.
 equipment controlled by 6A002.a.1,
 .a.2, .a.3, .c, or .e, 6A003.b.3 or
 .b.4, or 6A008.j.1.
 CC applies to ``technology'' for        CC Column 1.
 equipment controlled by 6A002 for CC
 reasons.
 AT applies to entire entry...........   AT Column 1.
 UN applies to ``technology'' for        Iraq and Rwanda.
 equipment controlled by 6A002 or
 6A003 for UN reasons.
------------------------------------------------------------------------


    License Requirement Notes: See Sec.  743.1 of the EAR for 
reporting requirements for exports under License Exceptions.

* * * * *

0
66. Supplement No. 1 to part 774 (the Commerce Control List), Category 
6--Sensors and Lasers, Export Control Classification Number (ECCN) 
6E002 is amended by revising the heading and the License Requirements 
section to read as follows:

6E002 ``Technology'' according to the General Technology Note for the 
``production'' of equipment or materials controlled by 6A (except 
6A018, 6A991, 6A992, 6A994, 6A995, 6A996, 6A997 or 6A998), 6B (except 
6B995) or 6C (except 6C992 or 6C994)

License Requirements
    Reason for Control: NS, MT, NP, RS, CC, AT, UN

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to ``technology'' for        NS Column 1.
 equipment controlled by 6A001 to
 6A008, 6B004 to 6B008, or 6C002 to
 6C005.
MT applies to ``technology'' for        MT Column 1.
 equipment controlled by 6A002, 6A007,
 6A008, 6A102, 6A107, 6A108, 6B008, or
 6B108 for MT reasons.
NP applies to ``technology'' for        NP Column 1.
 equipment controlled by 6A003, 6A005,
 6A202, 6A203, 6A205, 6A225 or 6A226
 for NP reasons.
RS applies to ``technology''for         RS Column 1.
 equipment controlled by 6A002.a.1,
 .a.2, .a.3, .c, or .e, 6A003.b.3 or
 .b.4, or 6A008.j.1.
CC applies to ``technology'' for        CC Column 1.
 equipment controlled by 6A002 for CC
 reasons.
AT applies to entire entry............  AT Column 1.
UN applies to ``technology'' for        Iraq and Rwanda.
 equipment controlled by 6A002 or
 6A003 for UN reasons.
------------------------------------------------------------------------



[[Page 46087]]

    License Requirement Notes: See Sec.  743.1 of the EAR for 
reporting requirements for exports under License Exceptions.

* * * * *

0
67. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 8--Marine, Export Control Classification Number (ECCN) 8A018 
is amended by revising the License Requirements section to read as 
follows:

8A018 Items on the International Munitions List

License Requirements
    Reason for Control: NS, AT, UN

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry............  NS Column 1.
AT applies to entire entry............  AT Column 1.
UN applies to entire entry............  Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *

0
68. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 8--Marine, Export Control Classification Number (ECCN) 8A918 
is amended by revising the License Requirements section to read as 
follows:

8A918 Marine Boilers

License Requirements
    Reason for Control: RS, AT, UN

------------------------------------------------------------------------
               Control(s)                         Country chart
------------------------------------------------------------------------
 RS applies to entire entry...........   RS Column 2.
 AT applies to entire entry...........   AT Column 1.
 UN applies to entire entry...........   Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *

0
69. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 9--Propulsion Systems, Space Vehicles and Related Equipment, 
Export Control Classification Number (ECCN) 9A018 is amended by 
revising the License Requirements section to read as follows:

9A018 Equipment on the International Munitions List

License Requirements
    Reason for Control: NS, RS, AT, UN

------------------------------------------------------------------------
               Control(s)                         Country chart
------------------------------------------------------------------------
 NS applies to entire entry...........   NS Column 1.
 RS applies to 9A018.a and b..........   RS Column 2.
 AT applies to entire entry...........   AT Column 1.
 UN applies to entire entry...........   Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *

0
70. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 9--Propulsion Systems, Space Vehicles and Related Equipment, 
Export Control Classification Number (ECCN) 9A991 is amended by 
revising the License Requirements section to read as follows:

9A991 ``Aircraft'', n.e.s., and gas turbine engines not controlled by 
9A001 or 9A101 and parts and components, n.e.s.

License Requirements
    Reason for Control: AT, UN

------------------------------------------------------------------------
               Control(s)                         Country chart
------------------------------------------------------------------------
 AT applies to entire entry...........   AT Column 1.
 UN applies to 9A991.a................   Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *

0
71. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 9--Propulsion Systems, Space Vehicles and Related Equipment, 
Export Control Classification Number (ECCN) 9D018 is amended by 
revising the License Requirements section to read as follows:

9D018 ``Software'' for the ``use'' of equipment controlled by 9A018

License Requirements
    Reason for Control: NS, RS, AT, UN

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry............  NS Column 1.
RS applies to 9A018.a and .b..........  RS Column 2.
AT applies to entire entry............  AT Column 1.
UN applies to entire entry............  Iraq and Rwanda.
------------------------------------------------------------------------

* * * * *

0
72. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 9--Propulsion Systems, Space Vehicles and Related Equipment, 
Export Control Classification Number (ECCN) 9E018 is amended by 
revising the License Requirements section to read as follows:

9E018 ``Technology'' for the ``development'', ``production'', or 
``use'' of equipment controlled by 9A018

License Requirements
    Reason for Control: NS, RS, AT, UN

------------------------------------------------------------------------
              Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry............  NS Column 1
RS applies to 9A018.a and .b..........  RS Column 2
AT applies to entire entry............  AT Column 1
UN applies to entire entry............  Iraq and Rwanda
------------------------------------------------------------------------

* * * * *

0
73. Supplement No. 2 to Part 774 (General Technology and Software 
Notes) is revised to read as follows:

Supplement No. 2 to Part 774 (General Technology and Software Notes)

    1. General Technology Note. The export of ``technology'' that is 
``required'' for the ``development'', ``production'', or ``use'' of 
items on the Commerce Control List is controlled according to the 
provisions in each Category.
    ``Technology'' ``required'' for the ``development'', 
``production'', or ``use'' of a controlled product remains controlled 
even when applicable to a product controlled at a lower level.
    License Exception TSU is available for ``technology'' that is the 
minimum necessary for the installation, operation, maintenance 
(checking), and repair of those products that are eligible for License 
Exceptions or that are exported under a license.
    N.B.: This does not allow release under a License Exception of the 
repair ``technology'' controlled by 1E002.e, 1E002.f, 8E002.a, or 
8E002.b.
    N.B.: The ``minimum necessary'' excludes ``development'' or 
``production'' technology and permits ``use'' technology only to the 
extent ``required'' to ensure safe and efficient use of the product. 
Individual ECCNs may further restrict export of ``minimum necessary'' 
information.
    2. General Software Note. License Exception TSU (``mass market'' 
software) is available to all destinations, except countries in Country 
Group E:1 of Supplement No. 1 to part 740 of the EAR, for release of 
software that is generally available to the public by being:
    a. Sold from stock at retail selling points, without restriction, 
by means of:
    1. Over the counter transactions;
    2. Mail order transactions;
    3. Electronic transactions; or
    4. Telephone call transactions; and
    b. Designed for installation by the user without further 
substantial support by the supplier.

    Note: The General Software Note does not apply to ``software'' 
controlled by Category 5--part 2 (``Information Security''). For

[[Page 46088]]

``software'' controlled by Category 5, part 2, see Supplement No. 1 
to part 774, Category 5, part 2, Note 3--Cryptography Note.


    Dated: July 28, 2004.
Peter Lichtenbaum,
Assistant Secretary for Export Administration.
[FR Doc. 04-17532 Filed 7-29-04; 2:13 pm]
BILLING CODE 3510-33-P