[Federal Register Volume 73, Number 225 (Thursday, November 20, 2008)]
[Notices]
[Pages 70322-70323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-27588]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 0810231385-81390-01]


Request for Public Comments on the Prospect of Removing 7A 
Commodities From De Minimis Eligibility

AGENCY: Bureau of Industry and Security, Department of Commerce.

ACTION: Notice of Inquiry.

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SUMMARY: The Bureau of Industry and Security (BIS) is seeking public 
comment on the prospect of removing from de minimis eligibility 
commodities controlled for missile technology (MT) reasons under 
Category 7--Product Group A on the Commerce Control List except when 
the 7A commodities are incorporated as standard equipment in Federal 
Aviation Administration (FAA) (or national equivalent) certified 
civilian transport aircraft. If such a policy were implemented, foreign 
made items that incorporate U.S.-origin 7A commodities would be subject 
to the Export Administration Regulations, except when the 7A 
commodities are incorporated as standard equipment in FAA (or national 
equivalent) certified civilian transport aircraft. Specifically, BIS is 
seeking public input on the impact such a change would have on U.S. 
manufacturers of category 7A commodities, as well as the impact such a 
change would have on foreign manufacturers that incorporate U.S.-origin 
7A commodities into their foreign-made products.

DATES: Comments must be received no later than January 20, 2009.

ADDRESSES: Written comments may be submitted via http://www.regulations.gov, by e-mail directly to BIS at 
[email protected] or on paper to U.S. Department of Commerce, 
Bureau of Industry and Security, Regulatory Policy Division, Room H-
2705, Washington DC 20230. Please input ``7A/De minimis'' in the 
subject line.

FOR FURTHER INFORMATION CONTACT: Sharron Cook, Office of Exporter 
Services, Regulatory Policy Division, Bureau of Industry and Security 
at 202-482-2440, or fax 202-482-3355, or e-mail at [email protected].

SUPPLEMENTARY INFORMATION: 

Background

    The term ``de minimis'' generally refers to matters that are of 
minor significance. The de minimis provisions of the Export 
Administration Regulations (EAR) promote U.S. export

[[Page 70323]]

control objectives as set forth in the Export Administration Act of 
1979, as amended, (EAA) while limiting U.S. jurisdiction over non-U.S. 
products containing a de minimis percentage, by value, of U.S. content. 
To prevent the diversion of controlled U.S. items and foreign-made 
items incorporating a significant amount of U.S. content, a foreign-
made item that contains more than the de minimis amount of controlled 
U.S.-origin content by value is subject to the EAR, i.e., a license may 
be required from BIS for the export abroad to another foreign country 
or in-country transfer of the foreign-made item. Prior to March 1987, 
the EAR set no de minimis levels for U.S. content in foreign-made 
items; foreign-made items were subject to the EAR if they contained any 
amount of U.S.-origin content, no matter how small. A rule published 
March 23, 1987 (52 FR 9147) revised what were then called the ``parts 
and components'' provisions to establish thresholds at which the amount 
of U.S.-origin commodities in foreign-made items would warrant exercise 
of U.S. jurisdiction over the foreign-made item when located outside 
the United States. The rule was established to alleviate a major trade 
dispute with allies who strenuously objected to U.S. assertion of 
jurisdiction over all reexports of non-U.S. items that contained even 
small amounts of U.S. content. A major revision of the EAR in 1996 (61 
FR 12714) introduced the term ``de minimis'' and established de minimis 
thresholds for software and technology. The most recent revisions to 
the de minimis rules occurred on October 1, 2008, when BIS published a 
rule to change the de minimis calculation for foreign produced hardware 
bundled with U.S.-origin software, clarify the definition of 
`incorporate' as it is applied to the de minimis rules, and to make 
certain other changes.
    Commodities controlled by Category 7--Product Group A in the 
Commerce Control List are certain equipment and components related to 
navigation and avionics. Reviewing agencies have raised concerns that 
such commodities, when controlled for MT reasons, have the potential to 
provide a foreign product with unique military capabilities, even if 
the value of the commodity is below normal de minimis levels. Airline 
and national aviation safety controls help to minimize the risk of 
diversion for Category 7--Product Group A commodities installed in 
civilian aircraft. It is expected the commodities will remain in the 
aircraft and free from tampering with such safety controls. However, 
when the commodities are exported in less costly end items with no 
national aviation safety authority controls, there may be a higher risk 
of diversion.

Requests for Comments

    BIS is seeking public comments on the expected impact on U.S. 
manufacturers of commodities controlled by Category 7--Product Group A, 
as well as the expected impact on foreign manufacturers that 
incorporate U.S.-origin 7A commodities into their foreign-made 
products, if BIS were to remove from de minimis eligibility commodities 
controlled for MT reasons under Category 7--Product Group A, except 
when the commodities are incorporated as standard equipment in FAA (or 
national equivalent) certified civilian transport aircraft. Specific 
estimates related to number of exports, revenue, jobs, etc. that would 
be affected would be very useful. Also, the impact such a change would 
have on decisions to incorporate U.S.-origin items in future foreign 
products would also be useful. Examples of commercial foreign products 
that incorporate commodities controlled by Category 7--Product Group A 
would be helpful as well. Comments that include rational argument in 
support of the position taken in the comment are likely to be more 
useful than comments that merely assert a position without such 
support.
    Finally, BIS is interested in concrete information (URL addresses, 
technical specifications, etc.) about the availability of equivalent 
commodities from foreign sources.

    Dated: November 14, 2008.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. E8-27588 Filed 11-19-08; 8:45 am]
BILLING CODE 3510-33-P