[Federal Register Volume 80, Number 32 (Wednesday, February 18, 2015)]
[Rules and Regulations]
[Pages 8520-8524]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-03329]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 740 and 742

[Docket No. 140812661-4661-01]
RIN 0694-AG24


Revisions to License Exception Availability for Consumer 
Communications Devices and Licensing Policy for Civil 
Telecommunications-Related Items Such as Infrastructure Regarding Sudan

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule amends the Export Administration Regulations to 
revise the general licensing policy of denial to one of case-by-case 
licensing for exports and reexports to Sudan of telecommunications 
equipment and associated computers, software, and technology for civil 
end use, including items useful for the development of civil 
telecommunications network

[[Page 8521]]

infrastructure. It also revises License Exception Consumer 
Communications Devices (CCD), which previously applied only to consumer 
communications devices to Cuba, to authorize exports and reexports of 
such devices to Sudan. Additionally, it makes minor technical changes 
to the list of items that are eligible for both Sudan and Cuba under 
the license exception. This rule also makes changes to License 
Exception Temporary Imports, Exports, Reexports and Transfers (in-
country) (TMP) in light of the changes to License Exception CCD. 
Finally, it removes a license requirement for reexports to Sudan of 
certain telecommunications software. BIS is making these changes 
consistent with the U.S. Government's commitment to the advancement of 
the free flow of information to, from, and within Sudan, including 
during a national dialogue.

DATES: The rule is effective February 18, 2015.

FOR FURTHER INFORMATION CONTACT: Theodore Curtin, telephone (202) 482-
4252, email [email protected].

SUPPLEMENTARY INFORMATION:

Background

    Section 742.10 of the Export Administration Regulations (EAR) 
requires a license for antiterrorism reasons for the export and 
reexport of most items on the Commerce Control List, Supp. 1 to part 
774, to Sudan in keeping with Sudan's designation as a state sponsor of 
terrorism. These items include certain consumer communication devices 
and related software and telecommunications infrastructure items that 
do not require a license for export or reexport to most destinations. 
Prior to publication of this rule, the EAR imposed a general policy of 
denial on applications for export or reexport of many of these items to 
Sudan. This rule modifies that policy to one of case-by-case review 
with respect to telecommunications equipment and associated computers, 
software and technology for civil end use, including items useful for 
the development of civil telecommunications network infrastructure. 
This rule also makes certain telecommunications software that was 
subject to a reexport license requirement prior to this rule's 
publication eligible for reexport to Sudan without a license and 
authorizes use of a license exception to export or reexport consumer 
communications devices to Sudan. This rule is being published 
simultaneously with a Department of the Treasury, Office of Foreign 
Assets Control general license in the Sudanese Sanctions Regulations 
(31 CFR part 538) for export or reexport of certain services, hardware, 
and software incident to personal communications to Sudan. BIS is 
publishing this rule after consultations with the Department of State 
to facilitate communication and the free flow of information among the 
Sudanese people, including by providing them with access to 
communications tools.

Specific Changes Made by This Rule

Expansion of License Exception Consumer Communication Devices (CCD) and 
Implementation of Conforming Change to License Temporary Imports, 
Exports, Reexports and Transfers (In-Country) (TMP)

    This rule revises Sec.  740.19 of the EAR (License Exception CCD) 
to add Sudan as an eligible destination. This license exception 
authorizes export and reexport of consumer communications devices 
(commodities such as computers, communications equipment and related 
items including personal computers, mobile phones, televisions, radios 
and digital cameras) that are widely available for retail purchase and 
that are commonly used to exchange information and facilitate 
interpersonal communications, as well as certain telecommunications- 
and information security-related software. Prior to publication of this 
rule, Cuba was the only eligible destination under License Exception 
CCD. This rule also makes some additions and other changes to the 
license exception related to the addition of Sudan. The changes related 
to Sudan are:
     Adding certain Global Positioning System receivers or 
similar satellite receivers as eligible items for export and reexport 
to Sudan under this license exception; and
     Limiting availability of the license exception to certain 
consumer software that is distributed free of charge in situations 
where the government of Sudan is the end user.
    Many of the items eligible for export and reexport under this 
license exception are designated EAR99. Consequently, prior to the 
publication of this rule, they did not require a license from BIS for 
export or reexport to Sudan under most circumstances (i.e., 
circumstances that do not trigger end-use or end-user concerns under 
part 744 of the EAR). Similarly, commodities classified under Export 
Control Classification Number (ECCN) 5A992 generally did not require a 
license from BIS for reexport to Sudan in the absence of part 744-
related end-use and end-user concerns. The publication of this rule 
does not change these two general practices. Adding Sudan to License 
Exception CCD as an eligible destination does not impose a license 
requirement for such items. However, the license exception would be 
available for the export or reexport to Sudan of items listed on the 
CCL that would otherwise require a license.
    BIS is making these changes to License Exception CCD to facilitate 
the supplying of communications capabilities to people in Sudan in 
support of the U.S. Government's policy to promote the Sudanese 
people's communication among themselves and with the outside world, 
including during a national dialogue where the Sudanese people may 
participate in broad discussions to address their longstanding concerns 
regarding governance. This rule is intended to facilitate inclusive and 
broad participation in such a dialogue by making the necessary 
communications tools available to the Sudanese people. These changes 
are being made in coordination with a general license being published 
simultaneously by the Department of the Treasury, Office of Foreign 
Assets Control and added to the Sudanese Sanctions Regulations (31 CFR 
part 538) that generally authorizes the export and reexport to Sudan of 
certain services, hardware, and software incident to personal 
communications.

Changes to License Exception CCD Affecting Items Eligible for Cuba and 
Sudan

    This rule adds a note that defines the term ``consumer'' for 
purposes of paragraph (b), which applies the term ``consumer'' when 
describing the commodities and software in paragraphs (b)(1)--
computers, (b)(2)--disk drives and solid state storage equipment, 
(b)(12)--information security equipment, software and peripherals and 
(b)(17)--software. This addition is not a substantive change to the 
scope of License Exception CCD. This addition emphasizes the 
consistency of this rule with the related general license being 
published simultaneously by the Department of the Treasury, Office of 
Foreign Assets Control, which includes this definition of ``consumer'' 
in connection with commodities and software.

Conforming Change to License Exception TMP

    This rule also removes the provision of License Exception TMP 
(Sec.  740.9(a)(2) of the EAR) related to tools of trade being 
temporarily taken to Sudan for a specific class of persons for certain 
specified purposes (generally,

[[Page 8522]]

temporary exports and reexports by non-governmental organizations and 
related individuals, including employees and contractors, for 
development or humanitarian purposes) because it is no longer 
necessary. With the changes made by this rule, License Exception CCD 
now authorizes all of the exports and reexports that were authorized by 
that provision of License Exception TMP without the limitations imposed 
by License Exception TMP on duration, class of persons who may use the 
license exception, and end use.

Certain Telecommunications Software Made Eligible for Reexport to Sudan 
Without a License

    This rule makes software controlled under ECCN 5D992.b or .c 
eligible for reexport to Sudan without a license from BIS. Software 
controlled under ECCN 5D992.b has the characteristics of, or performs 
or simulates the functions of, telecommunications equipment and 
information security equipment controlled under ECCN 5A992.a or .b. 
Commodities controlled under ECCN 5A992 were eligible for reexport to 
Sudan without a license from BIS prior to the publication of this rule. 
This change makes software that shares the characteristics of and/or 
performs or simulates the same functions as the hardware (commodities) 
eligible for reexport to Sudan on the same terms as the commodities 
themselves. Software controlled under ECCN 5D992.c includes mass market 
software such as mobile apps that may promote personal communications 
by the Sudanese people.

Adoption of Case-by-Case License Application Review Policy

    This rule revises the statement of antiterrorism licensing policy 
for Sudan set forth in Sec.  742.10 of the EAR to provide that license 
applications for export or reexport to Sudan of ``telecommunications 
equipment and associated computers, software and technology for civil 
end use, including items useful for the development of civil 
telecommunications network infrastructure'' will be considered on a 
case-by-case basis rather than being subject to a general policy of 
denial. This change is being made to allow BIS and the other agencies 
that review such applications to further U.S. government policy of 
advancing the free flow of information to, from and within Sudan and to 
facilitate the Sudanese people's communications among themselves and 
with the outside world. BIS recognizes the importance of adequate civil 
telecommunications network infrastructural capability to enable the 
Sudanese people to engage in secure, effective, and reliable personal 
communications.

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). This rule 
does not impose any regulatory burden on the public and is consistent 
with the goals of Executive Order 13563. This rule has been determined 
to be significant for purposes of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor shall any person 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 rule 
involves a collection of information approved under OMB control number 
0694-0088--Simplified Network Application Processing+ System (SNAP+) 
and the Multipurpose Export License Application which carries an annual 
estimated burden of 31,833 hours. BIS believes that this rule will have 
no material impact on that burden. To the extent that it has any impact 
at all, the impact would be to reduce the burden because this rule 
makes some transactions that would otherwise require a license eligible 
for a license exception.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under Executive Order 13132.
    4. BIS finds good cause under 5 U.S.C. 553(b)(B) to waive prior 
notice of proposed rulemaking and the opportunity for public comment 
because it is impracticable and contrary to the public interest. BIS is 
publishing this rule as part of a State Department-led initiative to 
promote the free flow of information and to facilitate communications 
by the Sudanese people. This rule supports that initiative by reducing 
the procedural requirements needed to send personal communications 
devices, such as mobile phones, that are the instruments of modern 
communications to Sudan. Ensuring that the Sudanese people have tools 
to communicate freely is particularly vital. In a joint statement 
issued on September 18, 2014, the United States, the United Kingdom, 
and Norway reiterated their ``support for a mediation architecture that 
facilitates both resolution of conflict and a comprehensive process of 
national dialogue.'' The time needed to conduct a notice and public 
comment would thwart the purpose of this rule, which is to enhance 
communications, including during a national dialogue period. Consistent 
with the initiative, this rule amends the EAR to allow case-by-case 
review of license applications to send telecommunications-related 
items, including items useful for the development of civil 
telecommunications infrastructure, to Sudan. In coordination with BIS, 
the Department of the Treasury, Office of Foreign Assets Control (OFAC) 
is amending the Sudanese Sanctions Regulations (31 CFR part 538) to 
authorize similar transactions involving the exportation of certain 
services, software, and hardware incident to personal communications. 
The time that would be required for notice and opportunity for public 
comment required by 5 U.S.C. part 553 for BIS's rule would undermine 
the opportunity for enhanced communications and information flow, 
thereby causing the rule to fail to meet the objective of promoting the 
Sudanese people's ability to communicate in a free, robust, and secure 
manner. Delay in publication of this rule would be contrary to the 
public interest because it would undermine the ability of the Sudanese 
people to participate fully in a national dialogue.
    BIS also finds good cause under 5 U.S.C. 553(d)(3) to waive the 30-
day delay in effectiveness. This rule amends the EAR to allow case-by-
case review of license applications to send telecommunications-related 
items, including items useful for the development of civil 
telecommunications infrastructure, to Sudan. The 30-day delay in 
effectiveness otherwise required under 5 U.S.C. 553 would undermine the 
opportunity for enhanced communications and information flow, thereby 
causing the rule to fail in its objective, which is to promote the 
Sudanese people's ability to communicate in a free, robust, and secure 
manner including during a national dialogue. This final rule is being 
implemented with immediate effectiveness to be concurrent with OFAC's 
publication of its regulatory changes, which are also being made 
effective upon publication. Prompt, simultaneous publication is 
important in light of the fact that certain

[[Page 8523]]

transactions with Sudan require authorization under both the EAR and 
the Sudanese Sanctions Regulations. For example, an export of an item 
might require an export license from BIS and a separate license from 
OFAC. Payment for the export might also require authorization from 
OFAC. Simultaneous publication would permit effective implementation of 
the changes to the two agencies' regulations. In particular, it would 
ensure that an export transaction authorized under OFAC's general 
license pertaining to certain software, hardware, and services incident 
to personal communications would be eligible for a license exception 
under the EAR rather than requiring a license from BIS, thereby 
effectuating the U.S. Government's policy to advance personal 
communications in Sudan.

List of Subjects

15 CFR Part 740

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

15 CFR Part 742

    Exports, Terrorism.

    For the reasons set forth in the preamble, the Export 
Administration Regulations (15 CFR parts 730-774) are amended as 
follows:

PART 740--[AMENDED]

0
1. 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 7, 2014, 79 FR 46959 (Aug. 11, 2014).


Sec.  740.9  [Amended]

0
2. Section 740.9 is amended by:
0
a. Removing the semicolon and the phrase ``for Sudan, see paragraph 
(a)(2) of this section'' from the first sentence of paragraph (a)(1); 
and
0
b. Removing and reserving paragraph (a)(2).

0
3. Section 740.19 is amended by:
0
a. Revising paragraph (a);
0
b. Revising paragraph (b) introductory text;
0
c. Removing the word ``and'' from the end of paragraph (b)(16);
0
d. Removing the period from the end of paragraph (b)(17) and adding in 
its place a semicolon followed by the word ``and'';
0
e. Adding paragraph (b)(18);
0
f. Adding a note to paragraph (b); and
0
g. Revising paragraph (c).
    The revisions and additions read as follows:


Sec.  740.19  Consumer Communications Devices (CCD).

    (a) Authorizations. This section authorizes the export or reexport 
of commodities and software, either sold or donated, to Cuba or Sudan 
subject to the requirements stated herein. This section does not 
authorize U.S.-owned or -controlled entities in third countries to 
engage in reexports of foreign produced commodities to Cuba for which 
no license would be issued by the Department of the Treasury pursuant 
to 31 CFR 515.559.
    (b) Eligible commodities and software. Commodities and software in 
paragraphs (b)(1) through (17) of this section are eligible for export 
or reexport under this section to Cuba or Sudan. Commodities in 
paragraph (b)(18) of this section are eligible for export or reexport 
under this section to Sudan only.
    * * *
    (18) (Sudan only) Global Positioning System receivers or similar 
satellite receivers controlled under ECCN 7A994.

    Note to paragraph (b): In this paragraph, the term ``consumer'' 
refers to items that are:
    1. Generally available to the public by being sold, without 
restriction, from stock at retail selling points by means of any of 
the following:
    a. Over-the-counter transactions;
    b. Mail order transactions;
    c. Electronic transactions; or
    d. Telephone call transactions; and
    2. Designed for installation by the user without further 
substantial support by the supplier.

    (c) Eligible and ineligible end-users--(1) Organizations. (i) This 
license exception may be used to export or reexport eligible 
commodities and software to and for the use of independent non-
governmental organizations in Cuba or Sudan.
    (ii) The Cuban Government or the Cuban Communist Party and 
organizations they administer or control are not eligible end-users.
    (iii) The Government of Sudan is not an eligible end-user for any 
item exported or reexported pursuant to this license exception except 
for consumer software that is authorized under paragraph (b)(12) or 
(b)(17) of this section and that is distributed free of charge.
    (2) Individuals. This License Exception may be used to export 
eligible commodities and software to and for the use of individuals 
other than the following:
    (i) Ineligible Cuban Government Officials. Ministers and vice-
ministers; members of the Council of State; members of the Council of 
Ministers; members and employees of the National Assembly of People's 
Power; members of any provincial assembly; local sector chiefs of the 
Committees for the Defense of the Revolution; Director Generals and 
sub-Director Generals and higher of all Cuban ministries and state 
agencies; employees of the Ministry of the Interior (MININT); employees 
of the Ministry of Defense (MINFAR); secretaries and first secretaries 
of the Confederation of Labor of Cuba (CTC) and its component unions; 
chief editors, editors and deputy editors of Cuban state-run media 
organizations and programs, including newspapers, television, and 
radio; or members and employees of the Supreme Court (Tribuno Supremo 
Nacional).
    (ii) Ineligible Cuban Communist Party Officials. Members of the 
Politburo; the Central Committee; Department Heads of the Central 
Committee; employees of the Central Committee; and the secretaries and 
first secretaries of provincial Party central committees.

PART 742--[AMENDED]

0
4. 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
5. Section 742.10 is amended by:
0
a. Revising the first sentence of paragraph (a)(2);
0
b. Revising paragraph (b)(3);
0
c. Redesignating the note to paragraph (b) as the note to paragraph 
(b)(3); and
0
d. Revising the newly redesignated note to paragraph (b)(3), to read as 
follows:


Sec.  742.10  Anti-terrorism: Sudan.

    (a) * * *
    (2) If AT column 1 or AT column 2 of the Commerce Country Chart 
(Supplement No. 1 to part 738 of the EAR) is indicated in the 
appropriate ECCN, a license is required for reexport to Sudan for anti-
terrorism purposes, except for ECCNs 2A994, 3A992.a, 5A991.g, 5A992, 
5D992.b or .c, 6A991, 6A998, 7A994, 8A992.d, .e, .f, and .g,

[[Page 8524]]

9A990.a and .b, and 9A991.d and .e. * * *
* * * * *
    (b) * * *
    (3) Notwithstanding the provisions of paragraphs (b)(1) and (b)(2) 
of this section, applications for Sudan will be considered on a case-
by-case basis in the following four situations.
    (i) The transaction involves the reexport to Sudan of items where 
Sudan was not the intended ultimate destination at the time of original 
export from the United States, provided that the exports from the U.S. 
occurred prior to the applicable contract sanctity date.
    (ii) The U.S. content of foreign-produced commodities is 20% or 
less by value.
    (iii) The commodities are medical items.
    (iv) The items are telecommunications equipment and associated 
computers, software and technology for civil end use, including items 
useful for the development of civil telecommunications network 
infrastructure.

    Note to paragraph (b)(3) of this section:  Applicants who wish 
any of the factors described in paragraph (b)(3) of this section to 
be considered in reviewing their license applications must submit 
adequate documentation demonstrating the appropriateness of the 
factor: i.e., the date of export from the United States, the value 
of the U.S. content, the specifications and medical use of the 
equipment, or the specific civil end use of the item and any 
function the item will have in the development of civil 
telecommunications network infrastructure, as relevant to the factor 
for which consideration is sought.

* * * * *

    Dated: February 12, 2015.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2015-03329 Filed 2-17-15; 8:45 am]
BILLING CODE 3510-33-P