[Federal Register Volume 70, Number 214 (Monday, November 7, 2005)]
[Rules and Regulations]
[Pages 67346-67348]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-22079]



[[Page 67346]]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 736, 738, 740, 742, 744, and 772

[Docket No. 051020273-5273-01]
RIN [0694-AD61]


Revision of License Requirements and Licensing Policy, and 
Increased Availability of License Exceptions for Certain North Atlantic 
Treaty Organization (NATO) Member States

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: This final rule amends certain provisions of the Export 
Administration Regulations (EAR) that affect Bulgaria, Czech Republic, 
Estonia, Hungary, Iceland, Latvia, Lithuania, Poland, Romania, Slovakia 
and Slovenia. These amendments provide consistent treatment to all NATO 
member states with respect to national security-based license 
requirements, national security licensing policy, availability of 
certain License Exceptions, and certain in-transit transactions.

DATES: Effective date: November 7, 2005.

ADDRESSES: Comments concerning this rule may be sent by e-mail to 
[email protected], by fax to 202 482 3355 or to the Regulatory Policy 
Division, Bureau of Industry and Security, Room H2017, U.S. Department 
of Commerce, Washington, DC 20230. Please refer to RIN 0694-AD47 in all 
comments. Comments regarding the Paperwork Reduction Act burden 
estimates or any other aspect of the collection of information affected 
by this rule may be sent to David Rostker, OMB Desk Officer, by e-mail 
at [email protected] or by fax to 202 395 7285; with a copy to 
the Regulatory Policy Division, Bureau of Industry and Security at one 
of the addresses above.

FOR FURTHER INFORMATION CONTACT: William Arvin, Regulatory Policy 
Division, Office of Exporter Services at [email protected] or 202 482 
2440.

SUPPLEMENTARY INFORMATION:

Background

    On June 28, 2004, the Bureau of Industry and Security (BIS) 
published an amendment to the EAR to remove certain regional stability 
and crime control license requirements to new NATO member countries. 
Seven countries acceded to NATO on March 29, 2004: Bulgaria, Estonia, 
Latvia, Lithuania, Romania, Slovakia and Slovenia. This final rule 
amends the EAR to provide for these newer NATO member states and for 
three other NATO member states, Hungary, Iceland, and Poland, treatment 
consistent with all other NATO member states respect to national 
security license requirements (Sec.  742.2(a)) and Supplement No. 1 to 
part 738 (Country Chart)). This final rule also removes Bulgaria, 
Estonia, Latvia and Lithuania from General Prohibition Eight, which 
concerns certain in-transit transactions, (Sec.  736.2(b)(8)), and 
removes restrictions on License Exceptions related to crime control 
from Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Poland, 
Romania, Slovakia, and Slovenia (Sec.  740.2). This final rules adds 
Bulgaria, Estonia, Latvia, Lithuania and Romania to Country Group B, 
and removes them from Country Group D:1 (Supplement No. 1 to part 740). 
Exports to these countries are now eligible for certain license 
exceptions set forth in part 740, and the national security licensing 
policy set forth in Sec.  742.2(b) for Country Group D:1 countries no 
longer applies. The Czech Republic, Iceland, Poland, Slovakia and 
Slovenia have been included in Country Group B since it was created in 
1996. Finally, this final rule makes certain technical and conforming 
amendments to other provisions of the EAR that refer to NATO member 
states or to individual countries that are now NATO member states. 
Specific amendments made by this final rule are described below.

Amendments to General Prohibition Eight

    General Prohibition Eight (Sec.  736.2(b)(8) of the EAR) requires a 
license for items that transit listed countries if the items would 
require a license to be exported or reexported to those countries and 
no license exception would authorize the export or reexport. This rule 
removes NATO member states Bulgaria, Estonia, Latvia, and Lithuania 
from the list of countries in General Prohibition Eight.

Amendments to National Security License Requirements

    Section 742.4(a) of the EAR sets forth the license requirements for 
items listed on the Commerce Control List (CCL) with ``National 
Security'' indicated as a reason for control. Prior to publication of 
this rule, Sec.  742.4(a) required a license for export or reexport 
``to all destinations except Country Group A:1 and cooperating 
countries'' of any item in an Export Control Classification Number 
(ECCN) that included ``NS Column 2'' in its ``License Requirements'' 
section. This rule adds Bulgaria, Czech Republic, Estonia, Hungary, 
Iceland, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia to 
the destinations excepted from the ``NS Column 2'' license requirement 
in Sec.  742.4(a). All other NATO member states other than the United 
States are already exempt from this license requirement because they 
are listed in Country Group A:1. Country Group A:1 is at Supp. No. 1 to 
Part 740 of the EAR.
    To reflect the changes made to Sec.  742.4(a), this rule also 
amends Supplement No. 1 to part 738 of the EAR by removing the ``X'' 
from the column labeled ``NS 2'' on the Country Chart in the rows for 
Bulgaria, Czech Republic, Estonia, Hungary, Iceland, Latvia, Poland, 
Romania, Slovakia and Slovenia.

Amendments to Restrictions on Use of License Exceptions

    Section 740.2 of the EAR imposes certain restrictions on the use of 
License Exceptions. Paragraph (a)(4) of that section imposes 
restrictions on the use of License Exceptions when exporting or 
reexporting commodities controlled for crime control reasons. This rule 
replaces the phrase ``Iceland, New Zealand or countries listed in 
Country Group A:1'' in paragraph (a)(4) of Sec.  740.2, with the phrase 
``Australia, Japan, New Zealand or a NATO member state.'' The effect of 
this change is to eliminate the restrictions imposed by paragraph 
(a)(4) on exports and reexports to Bulgaria, Czech Republic, Estonia, 
Hungary, Latvia, Poland, Romania, Slovakia and Slovenia. Although 
Iceland is no longer mentioned by name in paragraph (a)(4), it will 
continue to be exempt from the restrictions imposed by paragraph (a)(4) 
because it is a NATO member state. Although Country Group A:1 is no 
longer mentioned by name, all of its members will continue be exempt, 
either because they are NATO member states or because they are now 
mentioned by name in paragraph (a)(4).

Amendments to Country Groups B and D:1 Affecting License Exception 
Eligibility and Licensing Policy

    Supplement No. 1 to Part 740 contains several tables of ``Country 
Groups'' that are used to identify, among other things, License 
Exception eligibility and licensing policy. This rule adds Bulgaria, 
Estonia, Latvia, Lithuania, and Romania to Country Group B and removes 
them from Country Group D:1.

[[Page 67347]]

Effects of the Amendments to Country Group B

    License Exceptions found in Sec.  740.3, Shipments of limited value 
(LVS); Sec.  740.4, Shipments to Country Group B countries (GBS); and 
Sec.  740.6, Technology and software under restriction (TSR) are 
available only if the destination is in Country Group B. This change 
makes Bulgaria, Estonia, Latvia, Lithuania, and Romania eligible 
destinations for exports and reexports that are authorized by License 
Exceptions LVS, GBS and TSR. All other NATO member states other than 
the United States continue to be eligible destinations for these 
License Exceptions because they are already in Country Group B.

Effects of the Amendments to Country Group D:1

    License Exceptions found in Sec.  740.9, Temporary imports, exports 
and reexport (TMP); Sec.  740.10, Servicing and replacement of parts 
and equipment (RPL); Sec.  740.12, Gift parcels and humanitarian 
donations (GFT); Sec.  740.14, Baggage (BAG); and Sec.  740.15, 
Aircraft and vessels (AVS) all contain limitations or restrictions on 
their use for exports or reexports to destinations in Country Group 
D:1. Those limitations and restrictions no longer apply to exports and 
reexports authorized by License Exceptions TMP, GFT, BAG and AVS to 
Bulgaria, Estonia, Latvia, Lithuania, or Romania. Other NATO member 
states continue to be exempt from those limitations and restriction 
because they are not in Country Group D:1.
    Section 742.4(b)(1) of the EAR states the licensing policy for 
export and reexport of national security controlled items to 
destinations outside Country Group D:1. That licensing policy ``is to 
approve * * * unless there a significant risk that the items will be 
diverted to a country in Country Group D:1.'' Applications to export 
national security controlled items to Bulgaria, Estonia, Latvia, 
Lithuania, or Romania are now subject to this licensing policy. 
Applications to export or reexport national security controlled items 
to other NATO member states continue to be subject to this policy 
because they are not in Country Group D:1.
    Section 742.4(b)(2) of the EAR states the licensing policy for 
export and reexport of national security controlled items to 
destinations in Country Group D:1. That licensing policy is ``to 
approve applications when BIS determines, on a case-by-case basis, that 
the items are for civilian use or otherwise would not make a 
significant contribution to the military potential of the country of 
destination that would prove detrimental to the national security of 
the United States.'' Applications to export or reexport national 
security controlled items to Bulgaria, Estonia, Latvia, Lithuania, or 
Romania are no longer subject to this licensing policy. Applications to 
export or reexport national security controlled items to other NATO 
member states continue not to be subject to this policy because they 
are not in Country Group D:1.

Technical and Conforming Changes

    Sections 740.15(c)(1), 740.15(c)(2), 744.7(b)(1) and 744.7(b)(2) 
each contain reference to conditions that apply to most countries in 
Country Group D:1. Section 740.15(c) deals with the use of License 
Exception AVS to supply U.S. or Canadian vessels, airplane or airline 
installations or agents. Section 744.7 requires a license for exports 
and reexports to service aircraft if the item being exported or 
reexported would require a license the country where the vessel or 
aircraft is located, in which it is registered or by which it is 
controlled, leased or chartered. Paragraph (b) provides certain 
exceptions for U.S. or Canadian carriers. Prior to publication of this 
rule, each of those references excluded Romania by name from the 
conditions that apply to most Country Group D:1 countries. By removing 
Romania from Country Group D:1, this rule eliminates the need to 
exclude Romania by name. Therefore, this rule also eliminates the 
references to Romania from Sec. Sec.  740.15(c)(1), 740.15(c)(2), 
744.7(b)(1) and 744.7(b)(2).
    Section 742.4(b)(5) lists certain Country Group D:1 countries that, 
because of their efforts to adopt safeguard measures for exports and 
reexports, are ``accorded enhanced favorable consideration licensing 
treatment.'' Three of the countries that were listed in Sec.  
742.4(b)(5) prior to publication of this rule, Bulgaria, Latvia and 
Lithuania, are removed from Country Group D:1 by this rule. The removal 
of those countries from Country Group D:1 eliminates the need to list 
them in Sec.  742.4(b)(5). Therefore this rule removes those three 
countries from Sec.  742.4(b)(5).
    This rule also removes Bulgaria, Estonia, Latvia, Lithuania and 
Romania from the definition of ``Controlled Country'' in Sec.  772.1 to 
make that definition consistent with the removal of those countries 
from Country Group D:1.
    Although the Export Administration Act of 1979 (EAA), as amended, 
expired on August 20, 2001, Executive Order 13222 of August 17, 2001 (3 
CFR, 2001 Comp., p. 783 (2002)) as extended by the Notice of August 2, 
2005, 70 FR 45273 (August 5, 2005), continues the EAR in effect under 
the International Emergency Economic Powers Act (IEEPA).

Rulemaking Requirements

    1. This rule has been determined to be not significant for purposes 
of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to nor be subject to a penalty for failure to 
comply with a collection of information, subject to the requirements of 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), 
unless that collection of information displays a currently valid Office 
of Management and Budget (OMB) Control Number. This regulation contains 
a collection approved by the OMB under control number 0694-0088, 
``Multi-Purpose Application,'' which carries a burden hour estimate of 
58 minutes to prepare and submit form BIS-748. Miscellaneous and 
recordkeeping activities account for 12 minutes per submission. BIS 
expects that this rule will eliminate the need for approximate 56 BIS-
748 submissions per year.
    3. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 13132.
    4. The provisions of the Administrative Procedure Act (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 or foreign affairs function 
of the United States (see 5 U.S.C. 553(a)(1)). Further, no other law 
requires that a notice of proposed rulemaking and an opportunity for 
public comment be given for this rule. Because a notice of proposed 
rulemaking and an opportunity for public comment are not required to be 
given for this rule by 5 U.S.C. 553, or by any other law, the 
analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 
et. seq., are not applicable.

List of Subjects

15 CFR Parts 736, 738 and 772

    Exports.

15 CFR Part 740

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

15 CFR Part 742

    Export, Terrorism.

[[Page 67348]]

15 CFR Part 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

0
Accordingly the Export Administration Regulations (15 CFR parts 730-
799) are amended as follows:

PART 736--[AMENDED]

0
1. The authority citation for part 736 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. 2151 (note), Pub. L. 108-175; E.O. 12938, 59 FR 59099, 3 
CFR, 1994 Comp., p. 950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp. 
p. 219; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 
13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13338, 69 FR 
26751, May 13, 2004; Notice of November 4, 2004, 69 FR 64637, 3 CFR, 
2004 Comp., p. 303; Notice of August 2, 2005, 70 FR 45273 (August 5, 
2005).


0
2. In Sec.  736.2, revise paragraph (b)(8)(ii) to read as follows:


Sec.  736.2  General prohibitions and determination of applicability.

* * * * *
    (b) * * *
    (8) * * *
    (ii) Country scope. This General Prohibition Eight applies to 
Albania, Armenia, Azerbaijan, Belarus, Cambodia, Cuba, Georgia, 
Kazakhstan, Kyrgyzstan, Laos, Mongolia, North Korea, Russia, 
Tajikistan, Turkmenistan, Ukraine, Uzbekistan, Vietnam.
* * * * *

PART 738--[AMENDED]

0
3. The authority citation for 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; Notice of 
August 2, 2005, 70 FR 45273 (August 5, 2005).

Supplement No. 1 to Part 738--[Amended]

0
4. In Supplement No. 1 to part 738, the Country Chart, remove the ``X'' 
from the NS 2 column for Bulgaria, Czech Republic, Estonia, Hungary, 
Iceland, Latvia, Lithuania, Poland Romania, Slovakia, and Slovenia.

PART 740--[AMENDED]

0
5. The authority citation for part 740 is revised 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 2, 2005, 70 FR 45273 (August 5, 2005).


0
6. In Sec.  740.2 revise paragraph (a)(4) to read as follows:


Sec.  740.2  Restrictions on all License Exceptions.

    (a) * * *
    (4) The commodity you are shipping is a specially designed crime 
control and detection instrument or equipment described in Sec.  742.7 
of the EAR and you are not shipping to Australia, Japan, New Zealand, 
or a NATO member state (see definition of NATO in Sec.  772.1 of the 
EAR), unless the shipment is authorized under License Exception BAG, 
Sec.  740.14(e) of this part (shotguns and shotgun shells).
* * * * *


Sec.  740.15  [Amended]

0
7. In Sec.  740.15, remove the phrase ``and Romania'' from paragraph 
(c)(1), introductory text and from paragraph (c)(2), introductory text.

Supplement No. 1 to Part 740--[Amended]

0
8. In Supplement No. 1 to Part 740:
0
Add to the table labeled ``Country Group B--Countries'' in alphabetical 
order Bulgaria, Estonia, Latvia, Lithuania, and Romania; and
0
Remove Bulgaria, Estonia, Latvia, Lithuania, and Romania from the table 
labeled ``Country Group D.''

PART 742--[AMENDED]

0
9. The authority citation for part 742 continues to read as follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
18 U.S.C. 2510 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 
Sec. 901-911, 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 4, 2004, 69 FR 
64637, 3 CFR, 2004 Comp., p. 303; Notice of August 2, 2005, 70 FR 
45273 (August 5, 2005).


0
10. In Sec.  742.4, revise the third sentence of paragraph (a) and 
revise paragraph (b)(5) to read as follows:


Sec.  742.4  National security.

    (a) License requirements. * * * A license is required to all 
destinations except Country Group A:1 and cooperating countries (see 
Supplement No. 1 to part 740), Bulgaria, Czech Republic, Estonia, 
Hungary, Iceland, Latvia, Lithuania, Poland, Romania, Slovakia, and 
Slovenia for all items in ECCNs on the CCL that include NS Column 2 in 
the Country Chart column of the ``License Requirements'' section. * * *
    (b) * * *
    (5) In recognition of efforts made to adopt safeguard measures for 
exports and reexports, Kazakhstan, Mongolia, and Russia are accorded 
enhanced favorable consideration licensing treatment.
* * * * *

PART 744--[AMENDED]

0
11. The authority citation for 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 4, 2004, 
69 FR 64637, 3 CFR, 2004 Comp., p. 303; Notice of August 2, 2005, 70 
FR 45273 (August 5, 2005).


Sec.  744.7  [Amended]

0
12. In Sec.  744.7, remove the phrase ``and Romania'' from paragraph 
(b)(1) introductory text and paragraph (b)(2) introductory text.

PART 772--[AMENDED]

0
13. The authority citation for part 772 is revised 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 
2, 2005, 70 FR 45273 (August 5, 2005).


Sec.  772.1  [Amended]

0
14. In Sec.  772.1, remove ``Bulgaria,'', ``Estonia,'', ``Latvia,'', 
Lithuania,'', and ``Romania,'' from the second sentence of the 
definition of ``Controlled Country.''

    Dated: November 1, 2005.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 05-22079 Filed 11-4-05; 8:45 am]
BILLING CODE 3510-33-P