[Federal Register Volume 79, Number 151 (Wednesday, August 6, 2014)]
[Rules and Regulations]
[Pages 45675-45682]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-18579]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 732, 738, 740, 742, 744, 746 and 774

[Docket No. 140729634-4638-01]
RIN 0694-AG25


Russian Oil Industry Sanctions and Addition of Person to the 
Entity List

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: In this rule, the Bureau of Industry and Security (BIS) amends 
the Export Administration Regulations (EAR) by adding one person to the 
Entity List. The person who is added to the Entity List is located in 
Russia and has been determined by the U.S. Government to be acting 
contrary to the national security or foreign policy interests of the 
United States. This person will be listed on the Entity List under the 
destination of Russia.
    This rule also imposes controls on certain items for use in 
Russia's energy sector intended for energy exploration or production 
from deepwater (greater than 500 feet), Arctic offshore, or shale 
projects.

DATES: Effective date: This rule is effective August 6, 2014.

FOR FURTHER INFORMATION CONTACT: For the change to Russia licensing 
policy contact Eileen Albanese, Director, Office of National Security 
and Technology Transfer Controls, Bureau of Industry and Security, 
Department of Commerce, Phone: (202) 482-0092, Fax: (202) 482-3355, 
Email: [email protected]. For emails, include ``Russia'' in the subject 
line.
    For the Entity List-related changes contact the Chair, End-User 
Review Committee, Office of the Assistant Secretary, Export 
Administration, Bureau of Industry and Security, Department of 
Commerce, Phone: (202) 482-5991, Fax: (202) 482-3911, Email: 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    In this rule, the Bureau of Industry and Security (BIS) amends the 
Export Administration Regulations (EAR) to impose additional sanctions 
implementing U.S. policy toward Russia to address that country's 
continuing policy of destabilization in Ukraine and continuing 
occupation of Crimea and Sevastopol. Specifically, in this rule BIS 
adds one person to the Entity List. In addition, this rule imposes 
controls on certain items for use in Russia's energy sector intended 
for exploration or production from deepwater (greater than 500 feet), 
Arctic offshore, or shale projects that have the potential to produce 
oil or gas in Russia.

A. The Entity List

    The Entity List (Supplement No. 4 to Part 744) notifies the public 
about entities that have engaged in activities that could result in an 
increased risk of the diversion of exported, reexported or transferred 
(in-country) items to weapons of mass destruction (WMD) programs, 
activities sanctioned by the State Department and activities contrary 
to U.S. national security or foreign policy interests, including 
terrorism and export control violations involving abuse of human 
rights. Certain exports, reexports, and transfers (in-country) to 
entities identified on the Entity List require licenses from BIS and 
are usually subject to a policy of denial. The availability of license 
exceptions in such transactions is very limited. The license review 
policy for each entity is identified in the license review policy 
column on the Entity List and the availability of license exceptions is 
noted in the Federal Register notices adding persons to the Entity 
List. BIS places entities on the Entity List based on certain sections 
of part 744 (Control Policy: End-User and End-Use Based) of the EAR.
    The End-User Review Committee (ERC), composed of representatives of 
the Departments of Commerce (Chair), State, Defense, Energy and, where 
appropriate, the Treasury, makes all decisions regarding additions to, 
removals from, or other modifications to

[[Page 45676]]

the Entity List. The ERC makes all decisions to add an entry to the 
Entity List by majority vote and all decisions to remove or modify an 
entry by unanimous vote. The Departments represented on the ERC 
approved this change to the Entity List.
Addition to the Entity List in This Rule
    This rule implements the decision of the ERC to add one person to 
the Entity List on the basis of Sec.  744.11 (License requirements that 
apply to entities acting contrary to the national security or foreign 
policy interests of the United States) of the EAR. The entry added to 
the Entity List consists of one person in Russia.
    The ERC reviewed Sec.  744.11(b) (Criteria for revising the Entity 
List) in making the determination to add this person to the Entity 
List. Under that paragraph, persons for whom there is reasonable cause 
to believe, based on specific and articulable facts, have been 
involved, are involved, or pose a significant risk of being or becoming 
involved in, activities that are contrary to the national security or 
foreign policy interests of the United States and those acting on 
behalf of such persons may be added to the Entity List. The person 
being added to the Entity List has been determined by the ERC to be 
involved in activities that are contrary to the national security or 
foreign policy interests of the United States. Those activities are 
described in Executive Order 13661 (79 FR 15533), Blocking Property of 
Additional Persons Contributing to the Situation in Ukraine, issued by 
the President on March 16, 2014. This Order expanded the scope of the 
national emergency declared in Executive Order 13660, finding that the 
actions and policies of the Government of the Russian Federation with 
respect to Ukraine--including the deployment of Russian Federation 
military forces in Crimea (Occupied)--undermine democratic processes 
and institutions in Ukraine; threaten its peace, security, stability, 
sovereignty, and territorial integrity; and contribute to the 
misappropriation of its assets, and thereby constitute an unusual and 
extraordinary threat to the national security and foreign policy of the 
United States.
    Specifically, Executive Order 13661 includes a directive that all 
property and interests in property that are in the United States, that 
hereafter come within the United States, or that are or thereafter come 
within the possession or control of any United States person (including 
any foreign branch) of the following persons are blocked and may not be 
transferred, paid, exported, withdrawn, or otherwise dealt in: Persons 
operating in the defense or related materiel sector in the Russian 
Federation. Under Section 8 of the Order, all agencies of the United 
States Government are directed to take all appropriate measures within 
their authority to carry out the provisions of the Order. The 
Department of the Treasury's Office of Foreign Assets Control, pursuant 
to Executive Order 13661, has designated the following person: United 
Shipbuilding Corporation. In conjunction with that designation, the 
Department of Commerce adds to the Entity List under this rule and 
imposes a license requirement for exports, reexports, or transfers (in-
country) to this blocked person. This license requirement implements an 
appropriate measure within the authority of the EAR to carry out the 
provisions of Executive Order 13661.
    The person added to the Entity List in this rule under Executive 
Order 13661 operates in the Russian Federation's defense or related 
materiel sector. United Shipbuilding Corporation is a Russian state-
owned company that manufactures, among other things, ordnance and 
accessories, and is engaged in shipbuilding, repair, and maintenance. 
Therefore, pursuant to Sec.  744.11 of the EAR, the conduct of this 
person raises sufficient concern that prior review of exports, 
reexports, or transfers (in-country) of items subject to the EAR 
involving this person, and the possible imposition of license 
conditions or license denials on shipments to these persons, will 
enhance BIS's ability to protect the foreign policy and national 
security interests of the United States.
    For the person added to the Entity List, there is a license 
requirement for all items subject to the EAR and a license review 
policy of presumption of denial. The license requirements apply to any 
transaction in which items are to be exported, reexported, or 
transferred (in-country) to any of the persons or in which such persons 
act as purchaser, intermediate consignee, ultimate consignee, or end-
user. In addition, no license exceptions are available for exports, 
reexports, or transfers (in-country) to the person being added to the 
Entity List in this rule.
    This final rule adds the following person to the Entity List:

Russia

    1. United Shipbuilding Corporation, a.k.a., the following four 
aliases:

--Obedinennaya Sudostroitelnaya Korporatsiya OAO;
--OJSC United Shipbuilding Corporation; and
--United Shipbuilding Corporation Joint Stock Company; and
--OSK OAO.

90, Marata ul., St. Petersburg 191119, Russia; and 11, Sadovaya-
Kudrinskaya str., Moscow 123242, Russia.

B. Change to the license requirements and review policy for Russia

    This final rule makes the following additional changes to the EAR 
to implement changes to the license requirements and review policy for 
Russia.

Section 732.3 Steps Regarding the Ten General Prohibitions

    In paragraph (d)(4), this rule adds Russia to the list of countries 
that are subject to other special controls provisions. Specifically, 
this paragraph indicates that the Commerce Country Chart in Supplement 
No. 1 to part 738 sets forth license requirements for Russia, and part 
746 sets out additional license requirements. In paragraph (i), this 
rule also adds a sentence referencing Sec.  746.5 for Russian Industry 
Sector Sanctions.

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

    This rule adds a new footnote 6 designation for Russia to alert 
members of the public to additional license requirements pursuant to 
Sec.  746.5 Russian Industry Sector Sanctions for ECCNs 0A998, 1C992, 
3A229, 3A231, 3A232, 6A991, 8A992, and 8D999.

Section 740.2 Restrictions on All License Exceptions

    This rule revises Sec.  740.2(a)(6) by adding restrictions on 
license exception eligibility when a license is required under limited 
sanctions for specified countries, unless a license exception or 
portion thereof is specifically listed in the license exceptions 
paragraph pertaining to a particular sanctioned country. Specifically, 
Russia (Sec.  746.5) is added. This change clarifies restrictions for 
license exceptions that are not specifically authorized to countries 
under limited sanctions in part 746, as well as implementing this 
restriction for the limited sanctions on Russia.

Section 742.4 National Security

    This rule removes Russia's favorable license review status under 
national security reasons for control in Sec.  742.4(b)(5). In light of 
recent actions by Russia and the sanctions that the U.S. and other 
countries are placing on Russia, this favorable license review status 
is removed. As a result of this

[[Page 45677]]

rule, Russia will no longer receive the enhanced favorable licensing 
treatment previously afforded to Russia under Sec.  742.4(b)(5). 
Instead, the licensing policy for Russia will be the general licensing 
policy for countries in Country Group D:1 as set forth in Sec.  
742.4(b)(2). Kazakhstan and Mongolia will continue to receive enhanced 
favorable licensing treatment under Sec.  742.4(b)(5).

Section 746.1 Introduction

    This rule redesignates paragraph (c) as paragraph (d) and adds a 
new paragraph (c) to explain where to find the Russian Industry Sector 
Sanctions in part 746, as well as where these sanctions are referenced 
in the EAR.

Section 746.5 Russian Industry Sector Sanctions

    This rule adds new Sec.  746.5 entitled Russian Industry Sector 
Sanctions. This section imposes controls on the export, reexport or 
transfer (in-country) of any item subject to the EAR listed in 
Supplement No. 2 to this part and items specified in ECCNs 0A998, 
1C992, 3A229, 3A231, 3A232, 6A991, 8A992, and 8D999 when the exporter, 
reexporter or transferor knows or is informed that the item will be 
used directly or indirectly in Russia's energy sector for exploration 
or production from deepwater (greater than 500 feet), Arctic offshore, 
or shale projects in Russia that have the potential to produce oil or 
gas or is unable to determine whether the item will be used in such 
projects in Russia.
    Such items include, but are not limited to, drilling rigs, parts 
for horizontal drilling, drilling and completion equipment, subsea 
processing equipment, Arctic-capable marine equipment, wireline and 
down hole motors and equipment, drill pipe and casing, software for 
hydraulic fracturing, high pressure pumps, seismicc acquisition 
equipment, remotely operated vehicles, compressors, expanders, valves, 
and risers. No license exceptions may overcome the license requirements 
set forth in Sec.  746.5, except License Exception GOV Sec.  740.11(b).
    The license review policy for all items requiring a license for 
export to Russia is presumption of denial when there is potential for 
use directly or indirectly for exploration or production from deepwater 
(greater than 500 feet), Arctic offshore, or shale projects in Russia 
that have the potential to produce oil. To assist in the identification 
of such license applications, this rule indicates that license 
applications submitted to BIS under this section may include the phrase 
``section 746.5'' in Block 9 (Special Purpose) in Supplement No. 1 to 
part 748.

Supplement No. 2 to Part 746--Russian Industry Sector Sanctions List

    This rule adds Supplement No. 2 to Part 746 to a supplement that 
was previously reserved under the EAR. This new Supplement No. 2 
identifies items that are subject to the new Sec.  746.5 Russian 
Industry Sector Sanctions, in addition to the five ECCNs identified in 
that section. The items identified in new Supplement No. 2 are set 
forth as ``Schedule B numbers.'' A Schedule B number is a 10-digit 
commodity classification number administered by the Census Bureau and 
is used for reporting foreign trade. The source for the Schedule B 
numbers and descriptions in this list is the Bureau of the Census's 
Schedule B concordance of exports 2014. Census's Schedule B List 2014 
can be found at http://www.census.gov/foreign-trade/schedules/b/2014/index.html.

Supplement No. 1 to Part 774--Commerce Control List

    ECCNs 1C992, 3A229, 3A231, 3A232, 6A991, and 8A992 are amended by 
revising the License Requirements sections to add a license requirement 
that applies to these ECCNs when destined to Russia pursuant to Sec.  
746.5 of the EAR.
    ECCN 0A998 is added to control specific oil and gas exploration 
items, including software and data. Many U.S. companies are hired to 
provide or analyze seismic or other types of data in order to assist in 
oil exploration. This data does not come within the definition of 
``technology,'' as it does not pertain to the development, production 
or use of listed commodities or software, and is not specific 
information necessary for any of the following: Operation, 
installation, maintenance, repair, overhaul, refurbishing, or other 
terms specified in ECCNs on the CCL that control technology. However, 
this data product obtained through the analysis of raw seismic or other 
types of data is a commodity sold by companies. Such data is now 
controlled under this new entry. The Commerce Country Chart in 
Supplement No. 1 to part 738 is not designed to provide license 
requirements for this type of license requirement. In addition, BIS is 
making an exception to its general policy of not including software in 
A group ECCNs and is including oil and gas exploration software in ECCN 
0A998. For more precise information about the license requirement and 
license review policy under the Russian Industry Sector Sanctions, see 
Sec.  746.5 of the EAR.
    ECCN 8D999 is added to the Commerce Control List to control 
software specially designed for the operation of unmanned vessels used 
in the oil and gas industry of Russia. For more information about the 
license requirements and license review policy under the Russian 
Industry Sector Sanctions, see Sec.  746.5 of the EAR.

No Savings Clause

    Given the foreign policy objective of this rule, there is no 
savings clause in this rule. Accordingly, shipments of items removed 
from eligibility for a License Exception or export or reexport without 
a license (NLR) as a result of this regulatory action that were en 
route aboard a carrier to a port of export or reexport, on August 6, 
2014, pursuant to actual orders for export or reexport to a foreign 
destination, may not proceed to that destination under the previous 
eligibility for a License Exception or export or reexport without a 
license (NLR).

Foreign Policy Report

    The application of Russian Industry Sector Sanctions controls to 
the items covered by this rule imposes a foreign policy control. 
Section 6(f) of the Export Administration Act requires that a report be 
delivered to Congress before imposing such controls. The report was 
delivered to Congress on August 1, 2014.

Export Administration Act

    Although the Export Administration Act expired on August 20, 2001, 
the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 
2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March 
8, 2013, 78 FR 16129 (March 13, 2013) and as extended by the Notice of 
August 8, 2013, 78, 2013, 78 FR 49107 (August 12, 2013), has continued 
the Export Administration Regulations in effect under the International 
Emergency Economic Powers Act. BIS continues to carry out the 
provisions of the Export Administration Act, as appropriate and to the 
extent permitted by law, pursuant to Executive Order 13222 as amended 
by Executive Order 13637.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety

[[Page 45678]]

effects, distributive impacts, and equity). Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. 
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 involves 
collections previously approved by OMB under control number 0694-0088, 
Simplified Network Application Processing System, which includes, among 
other things, license applications and carries a burden estimate of 
43.8 minutes for a manual or electronic submission.
    Total burden hours associated with the PRA and OMB control number 
0694-0088 are not expected to increase as a result of this rule. You 
may send comments regarding the collection of information associated 
with this rule, including suggestions for reducing the burden, to 
Jasmeet K. Seehra, Office of Management and Budget (OMB), by email to 
[email protected], or by fax to (202) 395-7285.
    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 comment 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)). BIS implements this rule to 
advance U.S. policy toward Russia and therefore protect U.S. national 
security or foreign policy interests by preventing items from being 
exported, reexported, or transferred (in country) to the person being 
added to the Entity List, and for use in Russia's energy sector 
intended for exploration or production from deepwater (greater than 500 
feet), Arctic offshore, or shale projects that have the potential to 
produce oil. If this rule were delayed to allow for notice and comment 
and a delay in effective date, then the entity being added to the 
Entity List by this action would continue to be able to receive items 
without a license and to conduct activities contrary to the national 
security or foreign policy interests of the United States. In addition, 
publishing a proposed rule would give this party notice of the U.S. 
Government's intention to place the person on the Entity List and would 
create an incentive for this person to either accelerate receiving 
items subject to the EAR to conduct activities that are contrary to the 
national security or foreign policy interests of the United States, 
and/or to take steps to set up additional aliases, change addresses, 
and other measures to try to limit the impact of the listing on the 
Entity List once a final rule was published. In addition, U.S. national 
security and foreign policy also would be undermined by not immediately 
restricting the export, reexport or transfer (in-country) of certain 
items related to the energy sector in Russia. 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. Accordingly, no regulatory flexibility 
analysis is required and none has been prepared.

List of Subjects

15 CFR Parts 732 and 740

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

15 CFR Part 738

    Exports.

15 CFR Part 742

    Exports, Terrorism.

15 CFR Part 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

15 CFR Part 746

    Exports, Reporting and recordkeeping requirements.

15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

    Accordingly, parts 732, 738, 740, 742, 744, 746 and 774 of the 
Export Administration Regulations (15 CFR parts 730-774) 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 8, 2013, 78 FR 
49107 (August 12, 2013).

0
2. Section 732.3 is amended:
0
a. By revising paragraph (d)(4); and
0
b. By revising paragraph (i) introductory text to read as follows:


Sec.  732.3  Steps regarding the ten general prohibitions.

* * * * *
    (d) * * *
    (4) Destinations subject to embargo and other special controls 
provisions. The Country Chart does not apply to Cuba, Iran, North 
Korea, and Syria. For those countries you should review the provisions 
at part 746 of the EAR and may skip this step concerning the Country 
Chart. For Iraq and Russia, the Country Chart provides for certain 
license requirements, and part 746 of the EAR provides additional 
requirements.
* * * * *
    (i) Step 14: Embargoed countries and special destinations. If your 
destination for any item is Cuba, Iran, Iraq, North Korea, or Syria, 
you must consider the requirements of parts 742 and 746 of the EAR. 
Unless otherwise indicated, General Prohibition Six (Embargo) applies 
to all items subject to the EAR, i.e. both items on the CCL and within 
EAR99. See Sec.  746.1(b) for destinations subject to limited sanctions 
under United Nations Security Council arms embargoes. See Sec.  746.5 
for Russian Industry Sector Sanctions. You may not make an export or 
reexport contrary to the provisions of part 746 of the EAR without a 
license unless:
* * * * *

PART 738--[AMENDED]

0
3. 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); 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; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22 
U.S.C. 7201 et seq.; 22 U.S.C. 7210; 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 8, 2013, 78 FR 49107 (August 12, 2013).

0
4. Supplement No. 1 to part 738 is amended by:
0
a. Adding footnote designation ``6'' to ``Russia''; and

[[Page 45679]]

0
b. Adding footnote 6 to read as follows:

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

* * * * *
    \6\ See Sec.  746.5 for additional license requirements under the 
Russian Industry Sector Sanctions for ECCNs 0A998, 1C992, 3A229, 3A231, 
3A232, 6A991, 8A992, and 8D999.

PART 740--[AMENDED]

0
5. 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.; 
22 U.S.C. 7201 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 8, 2013, 78 FR 49107 (August 12, 2013).


0
6. Section 740.2 is amended by revising paragraph (a)(6) to read as 
follows:


Sec.  740.2  Restrictions on all license exceptions.

    (a) * * *
    (6) The export or reexport is to a sanctioned destination (Cuba, 
Iran, North Korea, and Syria) or a license is required based on a 
limited sanction (Russia) unless a license exception or portion thereof 
is specifically listed in the license exceptions paragraph pertaining 
to a particular sanctioned country in part 746 of the EAR.
* * * * *

PART 742--[AMENDED]

0
7. The authority citation for 15 CFR part 742 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 
U.S.C. 7210; 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 August 8, 2013, 78 FR 49107 (August 12, 2013); Notice of 
November 7, 2013, 78 FR 67289 (November 12, 2013).


0
8. Section 742.4(b)(5) is amended to read as follows:


Sec.  742.4  National security.

* * * * *
    (b) * * *
    (5) In recognition of efforts made to adopt safeguard measures for 
exports and reexports, Kazakhstan and Mongolia are accorded enhanced 
favorable consideration licensing treatment.
* * * * *

PART 744--[AMENDED]

0
9. 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; 22 U.S.C. 7201 et seq.; 22 
U.S.C. 7210; 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 August 8, 2013, 78 FR 49107 
(August 12, 2013); Notice of September 18, 2013, 78 FR 58151 
(September 20, 2013); Notice of November 7, 2013, 78 FR 67289 
(November 12, 2013); Notice of January 21, 2014, 79 FR 3721 (January 
22, 2014).

0
10. Supplement No. 4 to part 744 is amended by adding under Russia, in 
alphabetical order, one Russian entity.
    The addition reads as follows:

Supplement No. 4 to Part 744--Entity List

----------------------------------------------------------------------------------------------------------------
                                                                          License  review      Federal Register
         Country                  Entity          License requirement         policy               citation
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
Russia
 
                                                  * * * * * * *
                           United Shipbuilding   For all items         Presumption of        79 FR [INSERT FR
                            Corporation,          subject to the EAR.   denial.               PAGE NUMBER] 8/6/
                            a.k.a., the           (See Sec.   744.11                          14
                            following four        of the EAR).
                            aliases:
                           --Obedinennaya
                            Sudostroitelnaya
                            Korporatsiya OAO;
                            and.
                           --OJSC United
                            Shipbuilding
                            Corporation; and.
                           --United
                            Shipbuilding
                            Corporation Joint
                            Stock Company; and.
                           --OSK OAO...........
                           90, Marata ul., St.
                            Petersburg 191119,
                            Russia; and 11,
                            Sadovaya-
                            Kudrinskaya str.,
                            Moscow 123242,
                            Russia.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

PART 746--[AMENDED]

0
11. The authority citation for 15 CFR part 746 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. 287c; Sec 1503, Pub. L. 108-11, 117 Stat. 559; 22 U.S.C. 
6004; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; 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, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., p 168; Presidential 
Determination 2003-23 of May 7, 2003, 68 FR 26459, May 16, 2003; 
Presidential Determination 2007-7 of December 7, 2006, 72 FR 1899 
(January 16, 2007); Notice of August 8, 2013, 78 FR 49107 (August 
12, 2013); Notice of May 7, 2014, 79 FR 26589 (May 9, 2014).

0
12. Section 746.1 is amended by redesignating paragraph (c) as (d) and 
adding a new paragraph (c) to read as follows.


Sec.  746.1  Introduction.

* * * * *
    (c) Russian Industry Sector Sanctions. The Russian Industry Sector 
Sanctions are set forth under Sec.  746.5 and referenced under the 
License Requirements section of certain Export Control Classification 
Numbers (ECCNs) in Supplement No. 1 to part 774 (Commerce Control 
List), as well as in

[[Page 45680]]

a footnote to the Commerce Country Chart in Supplement No. 1 to part 
738.
* * * * *

0
13. Add Sec.  746.5 to read as follows:


Sec.  746.5  Russian Industry Sector Sanctions.

    (a) License requirements. (1) General prohibition. As authorized by 
Section 6 of the Export Administration Act of 1979, a license is 
required to export, reexport or transfer (in-country) any item subject 
to the EAR listed in Supplement No. 2 to this part and items specified 
in ECCNs 0A998, 1C992, 3A229, 3A231, 3A232, 6A991, 8A992, and 8D999 
when you know that the item will be used directly or indirectly in 
exploration for, or production of, oil or gas in Russian deepwater 
(greater than 500 feet) or Arctic offshore locations or shale 
formations in Russia, or are unable to determine whether the item will 
be used in such projects. Such items include, but are not limited to, 
drilling rigs, parts for horizontal drilling, drilling and completion 
equipment, subsea processing equipment, Arctic-capable marine 
equipment, wireline and down hole motors and equipment, drill pipe and 
casing, software for hydraulic fracturing, high pressure pumps, seismic 
acquisition equipment, remotely operated vehicles, compressors, 
expanders, valves, and risers. You should be aware that other 
provisions of the EAR, including parts 742 and 744, also apply to 
exports and reexports to Russia. License applications submitted to BIS 
under this section may include the phrase ``section 746.5'' in Block 9 
(Special Purpose) in Supplement No. 1 to part 748.
    (2) Additional prohibition on those informed by BIS. BIS may inform 
persons, either individually by specific notice or through amendment to 
the EAR, that a license is required for a specific export, reexport or 
transfer (in-country) or for the export, reexport, or transfer (in-
country) of specified items to a certain end-user, because there is an 
unacceptable risk of use in, or diversion to, the activities specified 
in paragraph (a)(1) of this section in Russia. 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. However, the 
absence of any such notification does not excuse persons from 
compliance with the license requirements of paragraph (a)(1) of this 
section.
    (b) Licensing policy. Applications for the export, reexport or 
transfer (in-country) of any item that requires a license for Russia 
will be reviewed with a presumption of denial when for use directly or 
indirectly for exploration or production from deepwater (greater than 
500 feet), Arctic offshore, or shale projects in Russia that have the 
potential to produce oil.
    (c) License exceptions. No license exceptions may overcome the 
license requirements set forth in this section, except License 
Exception GOV (Sec.  740.11(b)).

0
14. Supplement No. 2 to part 746 is added to read as follows:

Supplement No. 2 to Part 746--Russian Industry Sector Sanction List

    The source for the Schedule B numbers and descriptions in this list 
comes from the Bureau of the Census's Schedule B concordance of exports 
2014. Census's Schedule B List 2014 can be found at http://www.census.gov/foreign-trade/schedules/b/2014/index.html The 
Introduction Chapter of the Schedule B provides important information 
about classifying products and interpretations of the Schedule B, e.g., 
NESOI means Not Elsewhere Specified or Included. In addition, important 
information about products within a particular chapter may be found at 
the beginning of chapters.

------------------------------------------------------------------------
            Schedule B                          Description
------------------------------------------------------------------------
7304110000.......................  LINE PIPE OF A KIND USED FOR OIL OR
                                    GAS PIPELINES, SEAMLESS, OF
                                    STAINLESS STEEL
7304191020.......................  LINE PIPE OF A KIND USED FOR OIL OR
                                    GAS PIPELINES, SEAMLESS, OF IRON
                                    (NONCAST) OR NONALLOY STEEL, WITH AN
                                    OUTSIDE DIAMETER NOT EXCEEDING 114.3
                                    MM
7304191050.......................  LINE PIPE FOR OIL OR GAS PIPELINES,
                                    SEAMLESS, IRON (NONCAST) OR NONALLOY
                                    STEEL, WITH OUTSIDE DIAMETER OVER
                                    114.3 MM BUT NOT OVER 406.4 MM
7304191080.......................  LINE PIPE OF A KIND USED FOR OIL OR
                                    GAS PIPELINES, SEAMLESS, OF IRON
                                    (NONCAST) OR NONALLOY STEEL, WITH AN
                                    OUTSIDE DIAMETER EXCEEDING 406.4 MM
7304195020.......................  LINE PIPE OF A KIND USED FOR OIL OR
                                    GAS PIPELINES, SEAMLESS, OF OTHER
                                    ALLOY STEEL, NOT STAINLESS, WITH AN
                                    OUTSIDE DIAMETER NOT EXCEEDING 114.3
                                    MM
7304195050.......................  LINE PIPE, USED FOR OIL OR GAS
                                    PIPELINES, SEAMLESS, OF OTHER ALLOY
                                    STEEL, NOT STAINLESS, WITH AN
                                    OUTSIDE DIAMETER >114.3 MM, BUT
                                    <406.4 MM
7304195080.......................  LINE PIPE OF A KIND USED FOR OIL OR
                                    GAS PIPELINES, SEAMLESS, OF ALLOY
                                    STEEL, NOT STAINLESS, WITH AN
                                    OUTSIDE DIAMETER EXCEEDING 406.4 MM
7304220000.......................  OIL WELL DRILL PIPE, OF STAINLESS
                                    STEEL
7304233000.......................  OIL WELL DRILL PIPE, OF IRON OR
                                    NONALLOY STEEL
7304236000.......................  OIL WELL DRILL PIPE, OF ALLOY STEEL
                                    OTHER THAN STAINLESS STEEL
7304241000.......................  OIL WELL CASING OF STAINLESS STEEL
7304246000.......................  OIL WELL TUBING OF STAINLESS STEEL
7304291055.......................  OIL WELL CASING OF IRON OR NONALLOY
                                    STEEL
7304293155.......................  OIL WELL CASING OF OTHER ALLOY STEEL
                                    NOT STAINLESS
7304295000.......................  OIL WELL TUBING OF IRON OR NONALLOY
                                    STEEL
7304296100.......................  OIL WELL TUBING OF OTHER ALLOY STEEL
                                    OTHER THAN STAINLESS STEEL
7305111000.......................  LINE PIPE FOR OIL OR GAS,
                                    LONGITUDINALLY SUBMERGED ARC WELDED,
                                    EXTERNAL DIAMETER MORE THAN 406.4
                                    MM, CIRCULAR CROSS-SECTIONS, OF IRON
                                    OR NONALLOY STEEL
7305115000.......................  LINE PIPE FOR OIL/GAS PIPELINES,
                                    LONGITUDINALLY SUBMERGED ARC WELDED
                                    WITH EXTERNAL DIAMETER OVER 406.4
                                    MM, OF ALLOY STEEL, WITH CIRCULAR
                                    CROSS-SECTION
7305121000.......................  LINE PIPE FOR OIL OR GAS, OTHER
                                    LONGITUDINALLY WELDED, EXTERNAL
                                    DIAMETER MORE THAN 406.4 MM,
                                    CIRCULAR CROSS-SECTION, IRON OR
                                    NONALLOY STEEL
7305125000.......................  LINE PIPE FOR OIL OR GAS PIPELINES,
                                    LONGITUDINALLY WELDED WITH EXTERNAL
                                    DIAMETER >406.4 MM, OF ALLOY STEEL,
                                    WITH CIRCULAR CROSS SECTION
7305191000.......................  LINE PIPE FOR OIL OR GAS OTHER THAN
                                    LONGITUDINALLY WELDED, EXTERNAL
                                    DIAMETER MORE THAN 406.4 MM,
                                    CIRCULAR CROSS-SECTION, IRON OR
                                    NONALLOY STEEL
7305195000.......................  LINE PIPE FOR OIL OR GAS PIPELINES,
                                    WITH EXTERNAL DIAMETER >406.4 MM, OF
                                    ALLOY STEEL, CIRCULAR CROSS SECTION,
                                    WELDED/RIVETED, NESOI

[[Page 45681]]

 
7305203000.......................  CASING, OIL OR GAS DRILLING, OTHER
                                    THAN SEAMLESS, CIRCULAR CROSS-
                                    SECTION, EXTERNAL DIAMETER OVER
                                    406.4 MM, IRON OR NONALLOY STEEL
7305207000.......................  CASING, OIL OR GAS DRILLING, OTHER
                                    THAN SEAMLESS, CIRCULAR CROSS-
                                    SECTION, EXTERNAL DIAMETER OVER
                                    406.4 MM, ALLOY STEEL
7306110000.......................  LINE PIPE FOR OIL OR GAS NOT SEAMLESS
                                    NESOI, OF STAINLESS STEEL
7306191000.......................  LINE PIPE FOR OIL OR GAS NOT SEAMLESS
                                    NESOI, OF IRON OR NONALLOY STEEL
7306195000.......................  LINE PIPE FOR OIL OR GAS NOT SEAMLESS
                                    NESOI, OF ALLOY STEEL OTHER THAN
                                    STAINLESS STEEL
7311000000.......................  CONTAINERS FOR COMPRESSED OR
                                    LIQUEFIED GAS OF IRON OR STEEL
7613000000.......................  ALUMINUM CONTAINERS FOR COMPRESSED OR
                                    LIQUEFID GAS
8207130000.......................  ROCK DRILLING OR EARTH BORING TOOLS
                                    WITH WORKING PART OF CERMETS, AND
                                    PARTS THEREOF
8207191030.......................  PERCUSSION ROCK DRILL BITS, CORE BITS
                                    AND REAMERS, OF BASE METAL, AND
                                    PARTS THEREOF
8207192030.......................  ROTARY ROCK DRILL BITS, CORE BITS AND
                                    REAMERS OF BASE METAL, AND PARTS
                                    THEREOF
8207195030.......................  ROCK DRILLING OR EARTH BORING TOOLS
                                    OF BASE METALS, NESOI, AND PARTS
                                    THEREOF
8413500010.......................  OIL WELL AND OIL FIELD PUMPS,
                                    RECIPROCATING POSITIVE DISPLACEMENT
8413600050.......................  OIL WELL AND OIL FIELD PUMPS, ROTARY
                                    POSITIVE DISPLACEMENT
8413820000.......................  LIQUID ELEVATORS
8413920000.......................  PARTS OF LIQUID ELEVATORS
8421398020.......................  ELECTROSTATIC PRECIPITATORS,
                                    INDUSTRIAL GAS CLEANING EQUIPMENT
8421398030.......................  INDUSTRIAL GAS CLEANING EQUIPMENT,
                                    NESOI
8421398040.......................  GAS SEPARATION EQUIPMENT
8430494000.......................  OFFSHORE OIL AND NATURAL GAS DRILLING
                                    AND PRODUCTION PLATFORMS
8430498010.......................  BORING OR SINKING MACHINERY, ROTARY,
                                    FOR OIL WELL AND GAS FIELD DRILLING
8430498020.......................  BORING OR SINKING MACHINERY FOR OIL
                                    WELL AND GAS FIELD DRILLING, NESOI
8431390050.......................  PARTS SUITABLE FOR USE SOLELY OR
                                    PRINCIPALLY WITH THE OIL AND GAS
                                    FIELD MACHINERY OF HEADINGS 8425 TO
                                    8430
8431434000.......................  OFFSHORE OIL AND NATURAL GAS DRILLING
                                    AND PRODUCTION PLATFORM PARTS, OF
                                    SUBHEADING 8430.41 OR 8430.49
8431438010.......................  PARTS OF OIL AND GAS FIELD MACHINERY
                                    OF SUBHEADING 8430.49 EXCEPT PARTS
                                    OF OFFSHORE DRILLING AND PRODUCTION
                                    PLATFORMS
8431438090.......................  PARTS OF BORING OR SINKING MACHINERY
                                    OF SUBHEADING 8430.41 OR 8430.49,
                                    NESOI
8479899850.......................  OIL AND GAS FIELD WIRE LINE AND
                                    DOWNHOLE EQUIPMENT
8705200000.......................  MOBILE DRILLING DERRICKS
8708998175.......................  PARTS AND ACCESSORIES, FOR MOTOR
                                    VEHICLES OF HEADING 8705.20, NESOI
8905200000.......................  FLOATING OR SUBMERSIBLE DRILLING OR
                                    PRODUCTION PLATFORMS
8905901000.......................  FLOATING DOCKS
------------------------------------------------------------------------


0
15. Reserved Supplement No. 3 to Part 746 is removed.

PART 774--[AMENDED]

0
16. The authority citation for 15 CFR part 774 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
10 U.S.C. 7420; 10 U.S.C. 7430(e); 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; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22 
U.S.C. 7201 et seq.; 22 U.S.C. 7210; 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 8, 2013, 78 FR 49107 (August 12, 2013).

0
17. Supplement No. 1 to Part 774, Category 0, ECCN 0A998 is added after 
0A988 to read as follows:

Supplement No. 1 to Part 774--The Commerce Control List

* * * * *

0A998 Oil and gas exploration equipment, software, and data, as 
follows (see List of Items Controlled).

License Requirements

Reason for Control: Foreign policy

 
                Control(s):                         Country chart
 
Russian industry sector sanction applies    See Sec.   746.5 for
 to entire entry.                            specific license
                                             requirements and license
                                             review policy.
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

LVS: N/A
GBS: N/A
CIV: N/A

List of Items Controlled

Related Controls: N/A
Related Definitions: N/A
Items:
    a. Oil and gas exploration data, e.g., seismic analysis data.
    b. Hydraulic fracturing items, as follows:
    b.1. Hydraulic fracturing design and analysis software and data.
    b.2. Hydraulic fracturing `proppant,' `fracking fluid,' and 
chemical additives therefor.

    Technical Note: A `proppant' is a solid material, typically 
treated sand or man-made ceramic materials, designed to keep an 
induced hydraulic fracture open, during or following a fracturing 
treatment. It is added to a `fracking fluid' which may vary in 
composition depending on the type of fracturing used, and can be 
gel, foam or slickwater-based.


    b.3. High pressure pumps.
* * * * *

0
18. Supplement No. 1 to part 774, Category 1, 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 (see List of 
Items Controlled).

License Requirements

Reason for Control: AT, RS

 
                                            Country chart (see Supp. No.
                Control(s)                         1 to part 738)
 
AT applies to entire entry................  AT Column 1

[[Page 45682]]

 
RS applies to entire entry................  A license is required for
                                             items controlled by this
                                             entry for export or
                                             reexport to Iraq and
                                             transfer within Iraq for
                                             regional stability reasons.
                                             The Commerce Country Chart
                                             is not designed to
                                             determine RS license
                                             requirements for this
                                             entry. See Sec.  Sec.
                                             742.6 and 746.3 of the EAR
                                             for additional information.
Russian industry sector sanctions apply to  See Sec.   746.5 for
 entire entry.                               specific license
                                             requirements and license
                                             review policy.
 

* * * * *

0
19. Supplement No. 1 to part 774, Category 3, ECCN 3A229 is amended by 
revising the License Requirements section to read as follows:

3A229 Firing sets and equivalent high-current pulse generators (for 
detonators controlled by 3A232), as follows (see List of Items 
Controlled).

License Requirements

Reason for Control: NP, AT

 
                                            Country chart (see Supp. No.
                Control(s)                         1 to part 738)
 
NP applies to entire entry................  NP Column 1
AT applies to entire entry................  AT Column 1
Russian industry sector sanctions apply to  See Sec.   746.5 for
 entire entry.                               specific license
                                             requirements and license
                                             review policy.
 

* * * * *


0
20. Supplement No. 1 to part 774, Category 3, ECCN 3A231 is amended by 
revising the License Requirements section to read as follows:

3A231 Neutron generator systems, including tubes, having both of the 
following characteristics (see List of Items Controlled).

License Requirements

Reason for Control: NP, AT

 
                                            Country chart (see Supp. No.
                Control(s)                         1 to part 738)
 
NP applies to entire entry................  NP Column 1
AT applies to entire entry................  AT Column 1
Russian industry sector sanctions apply to  See Sec.   746.5 for
 entire entry.                               specific license
                                             requirements and license
                                             review policy.
 

* * * * *


0
21. Supplement No. 1 to part 774, Category 3, ECCN 3A232 is amended by 
revising the License Requirements section to read as follows:

3A232 Detonators and multipoint initiation systems, as follows (see 
List of Items Controlled).

License Requirements

Reason for Control: AT, RS

 
                                            Country chart (See Supp. No.
                Control(s)                         1 to part 738)
 
NP applies to entire entry................  NP Column 1
AT applies to entire entry................  AT Column 1
Russian industry sector sanctions apply to  See Sec.   746.5 for
 entire entry.                               specific license
                                             requirements and license
                                             review policy.
 

* * * * *


0
22. Supplement No. 1 to part 774, Category 6, ECCN 6A991 is amended by 
revising the License Requirements section to read as follows:

6A991 Marine or terrestrial acoustic equipment, n.e.s., capable of 
detecting or locating underwater objects or features or positioning 
surface vessels or underwater vehicles; and ``specially designed'' 
``parts'' and ``components,'' n.e.s.

License Requirements

Reason for Control: AT

 
                                            Country chart (see Supp. No.
                Control(s)                         1 to part 738)
 
AT applies to entire entry................  AT Column 2
Russian industry sector sanctions apply to  See Sec.   746.5 for
 entire entry.                               specific license
                                             requirements and license
                                             review policy.
 

* * * * *


0
23. Supplement No. 1 to part 774, Category 8, ECCN 8A992 is amended by 
revising the License Requirements section to read as follows:

8A992 Vessels, marine systems or equipment, not controlled by 8A001 
or 8A002, and ``specially designed'' ``parts'' and ``components'' 
therefor, and marine boilers and ``parts,'' ``components,'' 
``accessories,'' and ``attachments'' therefor (see List of Items 
Controlled).

License Requirements

Reason for Control: AT, UN


 
                                            Country chart (see Supp. No.
                Control(s)                         1 to part 738)
 
AT applies to entire entry................  AT Column 1
UN applies to 8A992.l and m...............  See Sec.   746.1(b) for UN
                                             controls.
Russian industry sector sanctions apply to  See Sec.   746.5 for
 entire entry.                               specific license
                                             requirements and license
                                             review policy.
 

* * * * *

0
24. Supplement No. 1 to part 774, Category 8, ECCN 8D999 is added after 
ECCN 8D992 to read as follows:

8D999 ``Software'' ``specially designed'' for the operation of 
unmanned submersible vehicles used in the oil and gas industry.

License Requirements

Reason for Control: N/A

 
                                            Country chart (see Supp. No.
                Control(s)                         1 to part 738)
 
Russian industry sector sanctions apply to  See Sec.   746.5 for
 entire entry.                               specific license
                                             requirements and license
                                             review policy.
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

CIV: N/A
TSR: N/A

List of Items Controlled

Related Controls: N/A
Related Definitions: N/A
Items:

    The list of items controlled is contained in the ECCN heading.
* * * * *


    Dated: August 1, 2014.
Eric L. Hirschhorn,
Under Secretary of Commerce for Industry and Security.
[FR Doc. 2014-18579 Filed 8-1-14; 4:15 pm]
BILLING CODE 3510-33-P