[Federal Register Volume 79, Number 246 (Tuesday, December 23, 2014)]
[Rules and Regulations]
[Pages 76867-76874]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-29686]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 738, 740, 742, and 774
[Docket No. 141107937-4937-01]
RIN 0694-AG33
Revision to the Export Administration Regulations: Controls on
Electronic Commodities; Exports and Reexports to Hong Kong
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Final rule.
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SUMMARY: This rule amends the Export Administration Regulations (EAR)
to expand controls for national security reasons and responds to public
comments solicited by a Bureau of Industry and Security (BIS) notice of
inquiry regarding the proper export control classification of certain
electronic commodities and a type of radar. Specifically, in this rule,
BIS amends the EAR to expand national security controls on certain
electronic commodities controlled on the Commerce Control List (CCL)
and to limit license exceptions for these items. This rule also expands
license requirements for exports and reexports to Hong Kong of items
controlled for national security reasons.
DATES: Effective date: This rule is effective December 23, 2014, except
that the revision of the Related Controls paragraph under the List of
Items Controlled section in ECCN 3E001, Supplement No. 1 to part 774,
is effective December 30, 2014.
FOR FURTHER INFORMATION CONTACT: With respect to electronic components,
contact Brian Baker, Office of National Security and Technology
Transfer Controls, Electronics and Materials Division, at 202-482-5534.
With respect to the U.S. government's export control policy for Hong
Kong, contact Steven Schrader, Office of Nonproliferation and Treaty
Compliance, Foreign Policy Division, at 202-482-1338.
SUPPLEMENTARY INFORMATION:
Background
This rule amends the Export Administration Regulations (EAR) to
expand controls for national security reasons and responds to public
comments solicited by a Bureau of
[[Page 76868]]
Industry and Security (BIS) notice of inquiry regarding the proper
export control classification of certain electronic commodities and a
type of radar. Specifically, in this rule, BIS amends the EAR to expand
national security controls on certain electronic commodities controlled
on the Commerce Control List (CCL) and to limit license exceptions for
these items. This rule also expands license requirements for exports
and reexports to Hong Kong of items controlled for national security
reasons.
Electronic Components
Notice of Inquiry: Comment Summary and BIS Response
On July 1, 2014, BIS and the Department of State published final
rules related to military electronics to take effect on December 30,
2014 (see 79 FR 37551 and 79 FR 37536) (herein the ``BIS July 1
Military Electronics Rule'' and the ``Department of State July 1
Military Electronics Rule''). On the same day, BIS published a notice
of inquiry (79 FR 37547) seeking additional comments on the proper
export control classification of microwave monolithic integrated
circuit (MMIC) power amplifiers, discrete microwave transistors, and
bi-static and multi-static radar that exploits greater than 125 kHz
bandwidth and is lower than 2 GHz center frequency to passively detect
or track using radio frequency (RF) transmissions (e.g., commercial
radio or television stations).
The notice of inquiry set forth the parameters adopted by the
Wassenaar Arrangement 2013 plenary meeting for including MMIC power
amplifiers and discrete microwave transistors on its Dual-Use List.
Those parameters are found in Export Control Classification Number
(ECCN) 3A001 paragraphs .b.2 and .b.3. The BIS July 1 Military
Electronics Rule adopted additional parameters that, if met, would move
the MMIC power amplifier or discrete microwave transistor from ECCN
3A001 to the ``600 series'' ECCN 3A611, and corresponding technology
controls to 3E611. The notice sought comments on the appropriateness of
the factors used to distinguish devices to be controlled under ECCN
3A611 from those controlled under ECCN 3A001.
The Department of State July 1 Military Electronics Rule placed bi-
static and multi-static radar that exploits greater than 125 kHz
bandwidth and is lower than 2 GHz center frequency to passively detect
or track using radio frequency (RF) transmissions (e.g., commercial
radio or television stations) in USML Category XI(a)(3)(xxvii). The
notice of inquiry sought comments on whether such radars are in fact in
use in civil air traffic control, collision avoidance or weather radar
in sufficient quantities to justify moving such radar to the CCL.
BIS received comments from eight parties. Six addressed MMIC power
amplifiers or discrete microwave transistors or both. One commenter
addressed passive radar and one commenter addressed the impact that
regulations not administered by BIS have on his business.
Comments Related to Use of MMIC Power Amplifiers and/or Discrete
Microwave Transistors in Civil Applications and Impact of 3A611 Control
on U.S. Manufacturers
The commenters generally opined that classifications in the BIS
July 1 Military Electronics Rule would increase costs and impose delays
in shipping for U.S. manufacturers. The commenters cited a number of
civil uses for MMIC power amplifiers and discrete microwave transistors
that would be controlled in ECCN 3A611 under the BIS July 1 Military
Electronics Rule to become effective on December 30, 2014. The civil
uses that they cited are:
Cellular communications applications including
[cir] Point to point radios
[cir] Cellular backhaul
[cir] LTE infrastructure
WiMax
Ground to satellite communications
[cir] Block up converters and solid state power amplifiers
[cir] Direct internet access via satellite for individual customers
[cir] Satellite access for WiFi aboard commercial airliners
[cir] Very small aperture terminals (VSAT) mainly for business data
networks
Test equipment for telecommunications networks
Civilian radar (maritime, air traffic and weather).
Two commenters noted that civil applications are making greater use
of two sets of frequency ranges than in the past. The commenters stated
that cellular base stations are expanding into the 3.5 GHz band and
that block up-converters and solid state amplifiers used in satellite
based civil communications are expanding into the Ka band.
Four manufacturers of MMIC power amplifiers and/or discrete
microwave transistors provided a list of specific amplifiers and
transistors by model number that are sold for use in commercial
products and that would become controlled in ECCN 3A611 by the BIS July
1 Military Electronics Rule on December 30, 2014.
One manufacturer of commercial telecommunications equipment
confirmed that it has suppliers in the United States, Japan and
Singapore for some of the MMIC power amplifiers and discrete microwave
transistors that would be made subject to ECCN 3A611 by the BIS July 1
Military Electronics Rule.
Exacerbates an Existing Disadvantage
One commenter asserted that manufacturers located outside the
United States have advantages over their U.S. counterparts even without
the latter's being subjected to the 3A611 classification because the
European Union has not revised its control lists to implement any
Wassenaar Arrangement approved changes for three years. The expansion
of MMIC power amplifier and discrete microwave transistor coverage
adopted by the Wassenaar Arrangement December 2013 plenary meeting may
not be implemented by the EU for months or years. (On August 4, 2014,
the EAR was amended to include the expanded MMIC power amplifier and
discrete microwave transistor coverage adopted by the December 2013
plenary meeting. See 79 FR 45287).
This commenter further asserted that manufacturers located outside
the United States also have an advantage because other countries make
decisions on license applications more quickly than the United States.
Increases the Number of Licenses Required
One manufacturer estimated that ECCN 3A611 would impose license
requirements on exports that currently do not require a license for 39
products that it has been selling to commercial customers, in some
cases for more than a decade. The customers for these products are
largely global telecommunications equipment manufacturers. The
manufacturer noted that manufacturers in other countries can supply
MMIC power amplifiers and discrete microwave transistors that would
meet the parameters of 3A611 but that are not subject to the EAR. This
manufacturer stated that the license requirements of 3A611 would ``stop
exports of these 39 products hindering its participation in three of
our core commercial markets: Point to-point radio, satellite ground
terminal (also called VSAT, for Very Small Aperture Terminal), and
cellular base stations above 2.7 GHz.'' Because its customers for two
of these products, point-to-point radio and the emerging 3.5 GHz
cellular infrastructure (base stations), are largely
[[Page 76869]]
outside the United States, this manufacturer stated that without
ability to export it ``would likely terminate current investments'' to
develop MMIC power amplifiers and discrete microwave transistors for
such products.
Another manufacturer reported that about 75% of its MMIC products
that can currently be exported without a license would require a
license to all destinations other than Canada under ECCN 3A611. It has
obtained seven export licenses for these products in 18 months. With
the new requirements, it estimates that it would need about 71 export
licenses. Also, there will be a strong ``presumption of denial'' for
all export license applications for exports of MMICs to China (PRC)--a
factor that would make it impossible to use U.S. origin MMIC power
amplifiers and discrete microwave transistors for telecommunications
equipment made in China.
One telecommunications equipment manufacturer pointed out that its
products, if made outside the United States, but incorporating even one
U.S. origin 3A611 commodity, may not be exported to China because of
the zero de minimis threshold and license application denial policy for
600 series items that apply to that country. The same piece of
equipment manufactured outside the United States, if made with MMIC
power amplifiers or discrete microwave transistors that also were made
outside the United States, would not be subject to those restrictions.
This same manufacturer also noted that if the same piece of equipment
were manufactured in the United States, it would be classified under
the ECCN that controls the piece of equipment even if that piece of
equipment contained 600 series commodities. BIS notes that although a
foreign made item containing a 600 series MMIC power amplifier or
discrete microwave transistor would be subject to the EAR if being
exported to China, its ECCN (and thus CCL based license requirements)
would be based on the ECCN of the commodity, not that of its
incorporated parts or components.
Criteria for Distinguishing Civil From Military MMIC Power Amplifiers
and Discrete Microwave Transistors
Several commenters stated that power added efficiency (PAE) is not
an appropriate criterion for identifying which MMIC power amplifiers
and discrete microwave transistors are predominately used in military
applications. In the words of one commenter: ``Employing PAE for
distinguishing military from civil products seems based on an implicit
assumption that military systems uniformly require higher efficiency
than commercial operations. That assumption is not true.'' The
commenters offered the following reasons for asserting that power added
efficiency is not an appropriate metric for distinguishing military
from civil MMIC power amplifiers and discrete microwave transistors.
The PAE thresholds in ECCN 3A611 are too low. They would
cover most Gallium Nitride (GaN) MMICs and transistors.
PAE is not a precise measure. PAE of a single product can
vary widely depending on a number of factors at the time of testing:
bias condition, RF drive level, temperature, pulse width, duty cycle,
and time period of operation.
In industry practice, there is no standard consistent way
to measure PAE. It can be measured at the optimal output load, at a
single point of frequency, at a peak power level, or at an average
point of normal operation.
Many products are not rated for PAE because they will be
used in applications where other measures make more sense. For example,
in communications, a more relevant measure is saturated peak power
(which needs to be very high to achieve the average level of operation
that the customer needs).
The PAE metric creates the same problems as ``average
output power'' that was removed from ECCN 3A001 in accordance with the
Wassenaar Arrangement 2013 plenary meeting changes to the Wassenaar
Dual-Use List. It is not a metric that lends itself to clear or
consistent definition in the RF industry, and as such should not be the
basis for regulating RF products.
Producers of commercial systems are demanding ever-higher
efficiency to reduce system power consumption (which reduces operating
costs), size, and weight.
For power-intensive applications such as cellular base
stations, equipment manufacturers goals typically exceed present
capabilities of MMIC power amplifier and discrete microwave transistor
technology and power amplifier topology.
For the device, efficiency is determined by the device
technology and frequency of operation. For the amplifier that uses the
device, efficiency is determined by the topology and class of
operation, load tuning, and bandwidth.
One commenter noted that a major base station manufacturer is
asking for GaN drain efficiency at saturated output power to be greater
than 70%.
Comments and Responses
Commenters offered several possible changes to the criteria for
including MMIC power amplifiers or discrete microwave transistors in
ECCN 3A611. BIS and the Departments of Defense and State reviewed the
public comments and reassessed the appropriate level of control over
those devices.
Comment 1: Two commenters recommended eliminating the power added
efficiency values with respect to MMIC power amplifiers and increasing
the threshold values for peak saturated power output in all frequency
ranges to values that would be substantially higher than those
specified in the BIS July 1 Military Electronics Rule. Another
commenter recommended increasing the threshold values for fractional
bandwidth, peak saturated power output and power added efficiency in
all frequency ranges to values that would be substantially higher than
the values in the BIS July 1 Military Electronics Rule. Two commenters
recommended increasing the fractional bandwidth threshold values for
all or some of the frequency ranges to levels that that would be
substantially higher than those specified in the BIS July 1 Military
Electronics Rule, but did not recommend changes to the other
parameters.
Response 1: BIS did not adopt changes to the control based on
fractional bandwidth, peak saturated power output, and/or power added
efficiency because the agency found that attempting to designate some
MMIC power amplifiers and discrete microwave transistors as civil and
others as military based on those characteristics is impractical, and
any resulting classification would not accurately reflect real world
applications for those devices. Accordingly, this rule does not adopt
any performance parameters for distinguishing military MMIC power
amplifiers and discrete microwave transistors from their civil
counterparts.
Nevertheless, MMIC power amplifiers and discrete microwave
transistors, regardless of whether they meet the performance levels of
ECCN 3A001 or the published, but not yet effective ECCN 3A611, are able
to enhance the performance of certain military electronic systems in
ways that can confer a military advantage and thus, the U.S. government
needs to review not only proposed exports and reexports for use in
military applications, but also those that are for use in applications
that pose significant risk of diversion to a military application or
enhancement of a potential adversary's military
[[Page 76870]]
capability. After consultation with the Departments of Defense and
State, BIS has concluded that export and reexport of MMIC power
amplifiers and discrete microwave transistors for civil
telecommunication end uses do not impose such risks to an extent that
would justify license requirements beyond those currently imposed on
MMIC power amplifiers and discrete microwave transistors by ECCN 3A001.
However, for other end uses, the risks involved necessitate prior U.S.
Government review of transactions to guard against possible diversion
to a military application or enhancement of a potential adversary's
military capability. Accordingly, BIS has decided to require licenses
for the export and reexport of all MMIC power amplifiers and discrete
microwave transistors currently on the CCL for civil telecommunications
uses to the same extent as license are required for exports and
reexports of MMIC power transistors and discrete microwave transistors
currently controlled in ECCN 3A001. For all other uses, BIS will impose
a license requirement for all destinations other than Canada and will
eliminate eligibility for most license exceptions.
Comment 2: One commenter recommended adding the phrase ``specially
designed for a military application,'' which appears in ECCN 3A611.a,
to paragraphs .b and .c of that ECCN (which control MMIC power
amplifiers and discrete microwave transistors, respectively) as well.
Response 2: BIS also considered adding the phrase ``specially
designed for a military application,'' which appears in ECCN 3A611.a,
to paragraphs .b and .c of that ECCN as suggested by one commenter.
Although the idea has merit, its application would not trigger a
license requirement for all transactions into which the U.S. Government
needs visibility to determine whether the transaction negatively
affects United States security interests. Upon review, the agencies
concluded that the manufacture and distribution of devices that support
civil telecommunications networks and systems pose a very low risk.
However, incorporation into military hardware is not the only activity
into which the U.S. Government needs visibility. Some civil uses may
also have heightened potential for diversion to military application.
Comment 3: Two commenters recommended adding a de-control note to
ECCN 3A611 excluding products specifically designed for radio
communications in a frequency band allocated by the ITU.
Response 3: BIS considered and decided not to adopt the proposal to
exclude products specifically designed for radio communications in a
frequency band allocated by the ITU. Frequency bands allocated by ITU
may overlap the frequencies used by military devices.
Comments Regarding Bi-Static/Multistatic Passive Radar That Exploits
Greater Than 125 kHz Bandwidth Is Lower Than 2 GHz Center Frequency To
Passively Detect or Track Using Radio Frequency (RF) Transmissions
(e.g., Commercial Radio or Television Stations)
One commenter stated that it has an internal development project to
evaluate the feasibility of applying bi-static radar to civil air
traffic management applications. The bi-static radar approach could be
used as an airborne collision avoidance system for civil unmanned
aerial vehicles and could apply to general aviation aircraft. The radar
described in the USML Category XI(a)(3)(xxvii) control could be
installed at ground based locations to provide air traffic information
about aircraft not equipped with transponders to aircraft operating
around uncontrolled airports.
In the past, this commenter has classified its passive radar
efforts under ECCN 5A001.g and the related technology under ECCN 5E001.
Pursuant to the Department of State July 1 Military Electronics Rule,
it will now have to classify the system under USML Category
XI(a)(3)(xxvii). The commenter cited an on-going study to test the
feasibility of using passive radar that relies on radio and television
broadcast signals for air traffic control being conducted in the United
Kingdom (UK) under the auspices of the United Kingdom Technology
Strategy Board. The commenter stated that it did not know how this
technology is classified in the United Kingdom, but indicated that if
the UK does not classify it as a munition, the U.S. company could face
an un-level playing field.
BIS has decided not to recommend to the Department of State that
the revised USML Category XI scheduled to take effect on December 30 be
further revised as a result of this comment. As described by the
commenter, the technology is not ready for commercial application and
thus need not be removed from the USML and added to the CCL.
Comment Unrelated to Regulations Administered by BIS
One commenter commented on the effect that rules governing the
operation of unmanned aerial vehicles in the United States had on his
business.
The operation of unmanned aerial vehicles in the United States is
outside the scope of regulations administered by BIS. Therefore, BIS is
taking no action in response to this comment.
Specific Changes Related to ECCN 3A001 Made by This Final Rule
For the reasons discussed above, this rule imposes a national
security (NS column 1) control on certain MMIC power amplifiers and
certain discrete microwave transistors, except those that are being
exported or reexported for use in civil telecommunications
applications, because the U.S. Government has determined that these
commodities are at an increased risk of diversion to military
applications or to activities that would enhance the military
capabilities of potential adversaries, end users and end uses contrary
to national security objectives. This rule also limits the availability
of License Exceptions Limited Value Shipments (LVS), Shipments to Group
B Countries (GBS), Additional Permissive Reexports (APR), and Strategic
Trade Authorization (STA) for those commodities, and makes parallel
changes to the technology related to these commodities for the same
reason.
Specifically, this rule revises the controls paragraph in ECCN
3A001 to add a national security (NS column 1) control and a regional
stability (RS column 1) control to these commodities, which prior to
publication of this rule were controlled under NS column 2. (The anti-
terrorism (AT column 1) control remains unchanged by this rule.) This
rule revises the List Based License Exceptions paragraph in ECCN 3A001
to remove LVS and GBS eligibility, and to exclude these commodities
from License Exception STA eligibility under the Special Conditions for
STA paragraph. This rule also revises eligibility paragraphs in License
Exceptions APR (Sec. 740.16(a) and (b)) and STA (Sec. 740.20(b)(2))
to exclude these commodities.
Technology for the development and production of these commodities
is controlled by ECCN 3E001. This rule revises the List Based License
Exceptions paragraph in ECCN 3E001 to remove eligibility for License
Exception Technology and Software Under Restriction (TSR), and to
exclude technology for these commodities from License Exception STA
eligibility under the Special Conditions for STA paragraph. This rule
does not remove license exception eligibility for technology controlled
by ECCN 5E001.d. The fact that an item, such as
[[Page 76871]]
a MMIC, is used for telecommunications does not make that item a
telecommunications item controlled in Category 5 of the CCL. There are
additional special design modifications, frequency band limiters, and
interfaces that are specific for telecommunications and that constitute
the required technology controlled in 5E001.d MMIC power amplifiers for
telecommunications. The design technology for the MMIC is controlled by
ECCN 3E001. The additional technology required for telecommunications
is controlled by ECCN 5E001. This rule adds notes to the Related
Controls paragraphs in both ECCNs 3E001 and 5E001 to clarify the
classifications of these technologies.
These actions will allow the U.S. Government to examine in advance
the exports and reexports of MMIC power amplifiers and discrete
microwave transistors that pose the greatest risk of diversion or
enhancement of potential adversaries' military capabilities without
imposing unnecessary licensing requirements on low risk transactions.
Consistent with past practice, this rule provides a saving clause for
items already en route to proceed and allows sufficient time to obtain
a ``deemed'' export license for technology transfer to a foreign
national employed in the United States (see ``Saving Clause'' below).
BIS intends to publish, in a future rulemaking, a corrections
notice removing paragraphs .c and .d from ECCN 3A611 and paragraphs b.3
and b.4 from 3E611 as published in the BIS July 1 Military Electronics
Rule.
Exports and Reexports to Hong Kong
Notwithstanding Hong Kong's comprehensive export control system,
analysis of trade information indicates Wassenaar Arrangement
controlled items exported from the United States to Hong Kong or
reexported from abroad to Hong Kong are imported into Hong Kong and
reexported from Hong Kong contrary to the requirements of Hong Kong's
export control system (which requires import and export authorization
from the Hong Kong Government) and the EAR.
Prior to publication of this rule, certain national security-
controlled items (i.e., controlled for NS column 2 on the CCL) did not
have a destination-based license requirement for Hong Kong. This rule
imposes such a requirement by placing an ``X'' in the box in the entry
in the Commerce Country Chart for Hong Kong for NS column 2, and by
removing text in Sec. 742.4 (national security) that excepted Hong
Kong from NS column 2 license requirements. A corresponding import
license will be required from the Hong Kong government for these items,
and this action will facilitate Hong Kong's ability to track their
shipment and prevent diversion of these items. This rule is imposing
this new license requirement to support the objectives of both the U.S.
Government and the Hong Kong Government to prevent diversion of
sensitive items. This rule also aligns the treatment of Hong Kong under
the EAR with other Wassenaar Arrangement members' treatment of Hong
Kong for items under Wassenaar controls.
Saving Clause
Shipments of items removed from eligibility for export or reexport
under a license exception or without a license (i.e., under the
designator ``NLR'') as a result of this regulatory action that were on
dock for loading, on lighter, laden aboard an exporting carrier, or en
route aboard a carrier to a port of export, on December 23, 2014,
pursuant to actual orders for export or reexport to a foreign
destination, may proceed to that destination under the previously
applicable license exception or without a license (NLR) so long as they
are exported or reexported before January 22, 2015. Any such items not
actually exported or reexported before midnight, on January 22, 2015,
require a license in accordance with this regulation.
``Deemed'' exports of ``technology'' and ``source code'' removed
from eligibility for export under a license exception or without a
license (under the designator ``NLR'') as a result of this regulatory
action may continue to be made under the previously available license
exception or without a license (NLR) before February 23, 2015.
Beginning at midnight on February 23, 2015, such ``technology'' and
``source code'' may no longer be released, without a license, to a
foreign national subject to the ``deemed'' export controls in the EAR
when a license would be required to the home country of the foreign
national in accordance with this regulation.
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 7, 2014, 79 FR 46959 (August 11, 2014), 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 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 a significant rule
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 expected to increase by approximately 22 hours as a
result of this rule (an estimated thirty additional license per year).
You may send comments regarding the collection of information
associated with this rule, including suggestions for reducing the
burden, to 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)).
[[Page 76872]]
BIS is implementing this rule to protect U.S. national security or
foreign policy interests. This rule imposes an export and reexport
license requirement on certain items controlled for national security
reasons destined to Hong Kong. This rule is imposing this new license
requirement to support the objectives of both the U.S. Government and
the Hong Kong Government to prevent diversion of sensitive items. This
rule also removes certain license exception availability for some
electronic components, such as MMIC power amplifiers and certain
discrete microwave transistors, except those that are being exported or
reexported for use in civil telecommunications applications, that BIS
has determined are at risk for diversion or enhancement of potential
adversaries' military capabilities. By requiring a license for end uses
where that possibility of diversion or enhancement of potential
adversaries' military capabilities is higher, the U.S. Government has
the opportunity to evaluate the risk in advance of export or reexport.
Immediate implementation will allow BIS to prevent exports of these
items to users and for uses that pose a security threat to the United
States or its allies. If BIS published a proposed rule soliciting
notice and comment, the resulting delay in implementation would afford
an opportunity to divert these items to users and uses that pose such a
security threat, thereby undermining the purpose of the rule.
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 Part 738
Exports.
15 CFR Part 740
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
15 CFR Part 742
Exports, Terrorism.
15 CFR Part 774
Exports, Reporting and recordkeeping requirements.
Accordingly, parts 738, 740, 742, and 774 of the Export
Administration Regulations (15 CFR parts 730-774) are amended as
follows:
PART 738--[AMENDED]
0
1. 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 7, 2014, 79 FR 46959 (August 11, 2014).
Supplement No. 1 to Part 738 [Amended]
0
2. Supplement No. 1 to part 738 is amended by revising the entry for
Hong Kong to read as follows:
Supplement No. 1 to Part 738--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
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr-----------------------------------------------------------------------------------------------------------------------------------------------------------------
Hong Kong..................... X X ........ X ........ X X X X X .......... X ........ X ........ ........
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* * * * *
PART 740--[AMENDED]
0
3. The authority citation for 15 CFR part 740 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. 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 7, 2014, 79 FR 46959 (August 11, 2014).
0
4. Section 740.16 is amended by revising paragraphs (a)(2) and (b)(1)
to read as follows:
Sec. 740.16 Additional permissive reexports (APR).
* * * * *
(a) * * *
(2) The commodities being reexported are not controlled for NP, CB,
MT, SI or CC reasons and are not military commodities described in ECCN
0A919 or cameras described in ECCN 6A003.b.3 (having the
characteristics listed in 6A002.a.2.a or a.2.b), 6A003.b.4.b,
6A003.b.4.c, or commodities described in 3A001.b.2 or b.3 (except those
that are being reexported for use in civil telecommunications
applications), 6A002.a.2.a, a.2.b, a.2.c, a.3.b.2.b, or a.3.g; and
* * * * *
(b) * * *
(1) Commodities that are not controlled for nuclear
nonproliferation or missile technology reasons, described in 3A001.b.2
or b.3 (except those that are being reexported for use in civil
telecommunications applications), nor listed in paragraph (b)(2) or
(b)(3) of this section may be reexported to and among Country Group A:1
and cooperating countries, provided that eligible commodities are for
use or consumption within a Country Group A:1 (see Supplement No. 1 to
part 740) or cooperating country, or for reexport from such country in
accordance with other provisions of the EAR.
* * * * *
0
5. Section 740.20 is amended by adding paragraph (b)(2)(xi) to read as
follows:
Sec. 740.20 License exception strategic trade authorization (STA).
* * * * *
(b) * * *
(2) * * *
(xi) License Exception STA may not be used for any commodity
controlled by ECCN 3A001.b.2 or b.3 (except those
[[Page 76873]]
that are being exported or reexported for use in civil
telecommunications applications), or any ``technology'' controlled by
3E001 for the ``production'' or ``development'' of commodities
controlled by 3A001.b.2 or b.3.
* * * * *
PART 742--[AMENDED]
0
6. 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 7, 2014, 79 FR 46959 (August 11, 2014); Notice of
November 7, 2014, 79 FR 67035 (November 12, 2014).
0
7. Section 742.4 is amended by revising the third sentence of paragraph
(a) to read as follows:
Sec. 742.4 National security.
(a) License requirements. * * * A license is required to all
destinations except Country Group A:5 (not including Argentina) (see
Supplement No. 1 to part 740) and Mexico, for all items in ECCNs on the
CCL that include NS column 2 in the Commerce Country Chart column of
the ``License Requirements'' section except those cameras in ECCN
6A003.b.4.b that have a focal plane array with 111,000 or fewer
elements and a frame rate of 60 Hz or less. * * *
* * * * *
PART 774--[AMENDED]
0
8. 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 7, 2014, 79 FR 46959 (August 11, 2014).
0
9. In Supplement No. 1 to part 774 (the Commerce Control List),
Category 3, ECCN 3A001 is amended by revising the Reasons for Control
and the Control Table in the License Requirements section and the List
Based License Exceptions section, and adding a Special Conditions for
STA section before the List of Items Controlled section to read as
follows:
Supplement No. 1 to Part 774--the Commerce Control List
* * * * *
3A001 Electronic components and ``specially designed''
``components'' therefor, as follows (see List of Items Controlled).
License Requirements
Reason for Control: NS, RS, MT, NP, AT
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to Microwave ``Monolithic NS Column 1
Integrated Circuits'' (MMIC) power
amplifiers in 3A001.b.2 and discrete
microwave transistors in 3A001.b.3,
except those 3A001.b.2 and b.3 items
being exported or reexported for use in
civil telecommunications applications.
NS applies to entire entry................ NS Column 2
RS applies to Microwave ``Monolithic RS Column 1
Integrated Circuits'' (MMIC) power
amplifiers in 3A001.b.2 and discrete
microwave transistors in 3A001.b.3,
except those 3A001.b.2 and b.3 items
being exported or reexported for use in
civil telecommunications applications.
MT applies to 3A001.a.1.a when usable in MT Column 1
``missiles''; and to 3A001.a.5.a when
``designed or modified'' for military
use, hermetically sealed and rated for
operation in the temperature range from
below -54[deg]C to above +125[deg]C.
NP applies to pulse discharge capacitors NP Column 1
in in 3A001.e.2 and superconducting
solenoidal electromagnets in 3A001.e.3
that meet or exceed the technical
parameters in 3A201.a and 3A201.b,
respectively.
AT applies to entire entry................ AT Column 1
* * * * *
List Based License Exceptions (See Part 740 for a description of all
license exceptions)
LVS: N/A for MT or NP; N/A for Microwave ``Monolithic Integrated
Circuits'' (MMIC) power amplifiers in 3A001.b.2 and discrete
microwave transistors in 3A001.b.3, except those that are being
exported or reexported for use in civil telecommunications
applications
Yes for:
$1500: 3A001.c
$3000: 3A001.b.1, b.2 (exported or reexported for use in civil
telecommunications applications), b.3 (exported or reexported for
use in civil telecommunications applications), b.9, .d, .e, .f, and
.g.
$5000: 3A001.a (except a.1.a and a.5.a when controlled for MT), and
.b.4 to b.7.
GBS: Yes for 3A001.a.1.b, a.2 to a.13 (except .a.5.a when controlled
for MT), b.2 (exported or reexported for use in civil
telecommunications applications), b.8 (except for TWTAs exceeding 18
GHz), b.9., b.10, .g, and .h.
CIV: Yes for 3A001.a.3, a.7, and a.11.
Special Conditions for STA
STA: License Exception STA may not be used to ship any item in
3A001.b.2 or b.3, except those that are being exported or reexported
for use in civil telecommunications applications, to any of the
destinations listed in Country Group A:5 or A:6 (See Supplement No.1
to part 740 of the EAR).
* * * * *
0
10. In Supplement No. 1 to part 774 (the Commerce Control List),
Category 3, ECCN 3E001 is amended by revising the List Based License
Exceptions section, the Special Conditions for STA, and the Related
Controls paragraph under the List of Items Controlled section to read
as follows:
3E001 ``Technology'' according to the General Technology Note for
the ``development'' or ``production'' of equipment or materials
controlled by 3A (except 3A292, 3A980, 3A981, 3A991 3A992, or
3A999), 3B (except 3B991 or 3B992) or 3C (except 3C992).
* * * * *
[[Page 76874]]
List Based License Exceptions (See Part 740 for a description of all
license exceptions)
CIV: N/A
TSR: Yes, except N/A for MT, and ``technology'' for the
``development'' or ``production'' of: (a) Traveling Wave Tube
Amplifiers described in 3A001.b.8, having operating frequencies
exceeding 19 GHz; (b) solar cells, coverglass-interconnect-cells or
covered-interconnect-cells (CIC) ``assemblies,'' solar arrays and/or
solar panels described in 3A001.e.4; (c) Microwave ``Monolithic
Integrated Circuits'' (MMIC) power amplifiers in 3A001.b.2; and (d)
discrete microwave transistors in 3A001.b.3.
Special Conditions for STA
STA: License Exception STA may not be used to ship or transmit
``technology'' according to the General Technology Note for the
``development'' or ``production'' of equipment specified by ECCNs
3A002.g.1 or 3B001.a.2 to any of the destinations listed in Country
Group A:6 (See Supplement No.1 to part 740 of the EAR). License
Exception STA may not be used to ship or transmit ``technology''
according to the General Technology Note for the ``development'' or
``production'' of components specified by ECCN 3A001.b.2 or b.3 to
any of the destinations listed in Country Group A:5 or A:6 (See
Supplement No.1 to part 740 of the EAR).
List of Items Controlled
Related Controls: (1) ``Technology'' according to the General
Technology Note for the ``development'' or ``production'' of certain
``space-qualified'' atomic frequency standards described in Category
XV(e)(9), MMICs described in Category XV(e)(14), and oscillators
described in Category XV(e)(15) of the USML are ``subject to the
ITAR'' (see 22 CFR parts 120 through 130). See also 3E101, 3E201 and
9E515. (2) ``Technology'' for ``development'' or ``production'' of
Microwave ``Monolithic Integrated Circuits'' (MMIC) power amplifiers
in 3A001.b.2 is controlled in this ECCN 3E001; 5E001.d refers only
to that additional ``technology'' ``required'' for
telecommunications.
* * * * *
0
11. In Supplement No. 1 to part 774 (the Commerce Control List),
Category 5, ECCN 5E001 is amended by revising the Related Controls
paragraph under the List of Items Controlled section to read as
follows:
5E001 ``Technology'' as follows (see List of Items Controlled).
* * * * *
List of Items Controlled
Related Controls: (1) See also 5E101, 5E980 and 5E991. (2)
``Technology'' for ``development'' or ``production'' of Microwave
``Monolithic Integrated Circuits'' (MMIC) power amplifiers that meet
the control criteria given at 3A001.b.2 is controlled in 3E001;
5E001.d refers only to that additional ``technology'' ``required''
for telecommunications.
* * * * *
Dated: December 12, 2014.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2014-29686 Filed 12-22-14; 8:45 am]
BILLING CODE 3510-33-P