[Federal Register Volume 82, Number 12 (Thursday, January 19, 2017)]
[Rules and Regulations]
[Pages 6216-6218]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00446]
[[Page 6216]]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 740, 748, and 762
[Docket No. 161230999-7013-01]
RIN 0694-AH11
Support Document Requirements With Respect to Hong Kong
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Final rule.
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SUMMARY: This rule requires persons intending to export or reexport to
Hong Kong any item subject to the Export Administration Regulations
(EAR) and controlled on the Commerce Control List (CCL) for national
security (NS), missile technology (MT), nuclear nonproliferation (NP
column 1), or chemical and biological weapons (CB) reasons to obtain,
prior to such export or reexport, a copy of a Hong Kong import license
or a written statement from the Hong Kong government that such a
license is not required.
This rule also requires persons intending to reexport from Hong
Kong any item subject to the EAR and controlled for NS, MT, NP column
1, or CB reasons to obtain a Hong Kong export license or a statement
from the Hong Kong government that such a license is not required.
DATES: The rule is effective April 19, 2017.
FOR FURTHER INFORMATION CONTACT: Tracey Patts, Foreign Policy Division,
Bureau of Industry and Security, Phone: (202) 482-4252.
SUPPLEMENTARY INFORMATION:
Background
The government of the Hong Kong Special Administrative Region
maintains an import and export control system. The ``Import and Export
(Strategic Commodities) Regulations'' are an integral part of that
system. Schedules in those regulations identify articles that may not
be imported or exported without a license from Hong Kong's Director-
General of Trade and Industry. Those schedules and much of the CCL are
based on the control lists published by four multilateral export
control regimes. Export control classification number (ECCN) entries on
the CCL identify one or more reason(s) for which listed items are
controlled. Four of these reasons for control are based on the four
multilateral export control regimes, as follows: The Wassenaar
Arrangement on Export Controls for Conventional Arms and Dual-Use Goods
and Technologies (NS on the CCL), the Missile Technology Control Regime
(MT on the CCL), the Nuclear Suppliers Group (NP column 1 on the CCL),
and the Australia Group (CB on the CCL). Because the Hong Kong
schedules and most of the CCL are developed from these same four
sources, large portions of both sets of documents cover the same items.
The government of the Hong Kong Special Administrative Region uses
information from the import licenses that it issues to identify
articles that require an export license. This rule imposes new support
documentation requirements affecting items subject to the EAR that are
exported or reexported to Hong Kong or are reexported from Hong Kong.
BIS is taking this action to provide greater assurance that U.S. origin
items that are subject to the multilateral control regimes noted above
will be properly authorized by the United States to their final
destination, even when those items first pass through Hong Kong. This
rule does not impose any new license requirements.
Exports and Reexports to Hong Kong
This rule requires exporters and reexporters using a BIS license or
a license exception to export or reexport to Hong Kong items controlled
for NS, MT, NP column 1, or CB reasons to obtain certain documents that
verify the items' status under the Hong Kong Import and Export
(Strategic Commodities) Regulations. The exporter or reexporter must
obtain from its client or consignee a copy of a valid import license
issued to the Hong Kong importer by the Hong Kong government
authorizing import of the item(s) to be shipped to Hong Kong, or a copy
of a written statement issued by the Hong Kong government stating that
no import license is required to import the item(s) into Hong Kong. The
exporter or reexporter must have the copies in its possession, and any
Hong Kong import license must not have expired at the time of the
export or reexport to Hong Kong. For purposes of this requirement, a
written statement issued by the Hong Kong government includes either a
written communication to a license applicant informing the applicant
that the item does not require a license or a statement available to
the general public (including a statement on a Web site by the Hong
Kong government) that a license is not required for the item.
Reexports From Hong Kong
This rule also requires reexporters in Hong Kong intending to
reexport from Hong Kong items subject to the EAR that are controlled
for NS, MT, NP column 1, or CB reasons to obtain from the Hong Kong
government a license authorizing export from Hong Kong of the items, or
a copy of a written statement issued by the Hong Kong government
stating that no export license is required from Hong Kong to export the
items. If a Hong Kong license is issued, the reexport must be in
accordance with the terms of that license and must be completed during
the validity period of the Hong Kong-issued export license. For
purposes of this requirement, a written statement issued by the Hong
Kong government includes a written communication to a license applicant
informing the applicant that the item does not require a license or a
statement available to the general public (including a statement on a
Web site by the Hong Kong government) that a license is not required
for the item.
Export Administration Act
Since August 21, 2001, the Export Administration Act of 1979, as
amended, has been in lapse. However, 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 4, 2016, 81 FR 52587
(August 8, 2016), has continued the EAR 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). 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 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
includes an expansion of an existing collection of information approved
[[Page 6217]]
under OMB control number 0694-0093--Import Certificate and End-User
Certificate, for which the current burden estimates are 5,872 responses
and 1,618 hours annually. BIS expects that this rule will increase the
number of transactions for which exporters and reexporters will have to
acquire support documentation by about 12,000 transactions annually,
with a corresponding increase in the number of burden hours. Send
comments regarding this burden estimate or any other aspect of this
collections of information, including suggestions for reducing the
burden, to Jasmeet K. Seehra, Office of Management and Budget, by email
at [email protected] or by fax to (202) 395-7285 and to Hillary Hess,
BIS, at [email protected].
3. This rule does not contain policies with Federalism implications
as that term is defined under Executive Order 13132.
4. The provisions of the Administrative Procedure Act (5 U.S.C.
553) requiring notice of proposed rulemaking, the opportunity for
public participation, and a 30-day delay in effective date, are
inapplicable because this regulation involves a military and foreign
affairs function of the United States (5 U.S.C. 553(a)(1)). Therefore,
we are issuing this action as a final rule. This action will foster
effective administration of and compliance with the export control
regulations of the Hong Kong Special Administrative Region with respect
to U.S.-origin items. Those regulations apply to items that are listed
on the control lists of multilateral export control regimes of which
the United States is a member. Effective control over such items
imported into Hong Kong by the government of the Hong Kong Special
Administrative Region serves the United States' national security and
foreign policy interests directly, because many of these items are
controlled due to their national security significance or their
potential to be used in activities that would promote proliferation of
weapons of mass destruction or in regional destabilizing activities.
This rule also enhances the effectiveness of the multilateral
control regimes, which serves United States interests in two ways.
First, widespread consistent implementation of those regime-based
export controls promotes peace and stability throughout the world
generally. Second, this rule signals to other nations, regime member
states and non-members alike, the United States' determination that
distribution of U.S. origin items throughout the world will be in
accordance with its regime commitments.
Moreover, BIS expects that in nearly all instances, this rule
requires only that a party in Hong Kong obtain a license that is
already required under Hong Kong law. In those instances, no new action
is required by persons reexporting from Hong Kong and the only new
action with respect to exports and reexports to Hong Kong is for the
person in Hong Kong to send a copy of the license to its supplier. In
the limited instances where the CCL covers items with one or more of
the reasons for control noted above that are not listed on the Hong
Kong control, such as when the Hong Kong Government and the United
States Government update their control lists in response the changes in
the multilateral export control regime lists at different times, the
party in Hong Kong will have to obtain a written statement from the
Hong Kong Government that a Hong Kong license is not required. However,
the rule gives the party in Hong Kong several options for providing the
required information. Various documents, including the Hong Kong
government's specific response to a license application informing the
applicant that a license is not required and more general statements
downloaded from a Hong Kong Government Web site, will be adequate to
fulfill this requirement. One document may be used for multiple
shipments as long as the document remains accurate.
Despite the importance of prompt publication and effectiveness to
our foreign policy goals as noted above, BIS recognizes that some
exporters and reexporters will need time to obtain the required
documentation from their customers for all transactions subject to this
rule. Therefore, the effective date of this final rule is ninety days
after publication.
List of Subjects
15 CFR Parts 740 and 748
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
15 CFR Part 762
Administrative practice and procedure, Business and industry,
Confidential business information, Exports, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, parts 740, 742, and 762
of the Export Administration Regulations (15 CFR parts 730 through 774)
are amended as follows:
PART 740--LICENSE EXCEPTIONS
0
1. The authority citation for part 740 is revised to read as follows:
Authority: 50 U.S.C. 4601 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 4, 2016, 81 FR 52587 (August 8, 2016).
0
2. In Sec. 740.2, add paragraphs (a)(19) and (20) to read as follows:
Sec. 740.2 Restrictions on all License Exceptions.
(a) * * *
(19) The exporter or reexporter to Hong Kong of any item subject to
the EAR and controlled on the CCL for NS, MT, NP Column 1, or CB
reasons has not received one of the following with respect to the item:
(i) A copy of an import license issued to the Hong Kong importer by
the Government of the Hong Kong Special Administrative Region, pursuant
to the Hong Kong Import and Export (Strategic Commodities) Regulations,
that covers all items to be exported or reexported pursuant to that
license exception for which a Hong Kong import license is required and
that is valid on the date of the export or reexport that is subject to
the EAR; or
(ii) A copy of a written statement issued by the Government of the
Hong Kong Special Administrative Region that no import license is
required to import into Hong Kong the item(s) to be exported or
reexported. The statement may have been issued directly to the Hong
Kong importer or it may be a written statement available to the general
public. The statement may be used for more than one export or reexport
to Hong Kong so long as it remains an accurate statement of Hong Kong
law.
(20) The reexporter from Hong Kong of any item subject to the EAR
controlled on the CCL for NS, MT, NP column 1, or CB reasons has not
received one of the following with respect to the item:
(i) An export license issued by the Government of the Hong Kong
Special Administrative Region, pursuant to the Hong Kong Import and
Export (Strategic Commodities) Regulations, that covers all items to be
reexported pursuant to that license exception for which a Hong Kong
export license is required and that is valid on the date of the
reexport that is subject to the EAR; or
(ii) A copy of a written statement issued by the Government of the
Hong Kong Special Administrative Region that no Hong Kong export
license is required for the item(s) to be rexported.
[[Page 6218]]
The statement may have been issued directly to the Hong Kong reexporter
or it may be a written statement available to the general public. The
statement may be used for more than one reexport from Hong Kong so long
as it remains an accurate statement of Hong Kong law.
PART 748--APPLICATIONS (CLASSIFICATION, ADVISORY, AND LICENSE) AND
DOCUMENTATION
0
3. The authority citation for part 748 is revised to read as follows:
Authority: 50 U.S.C. 4601 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 4, 2016, 81 FR
52587 (August 8, 2016).
0
4. 748.9(b) is amended by revising the section heading, revising
paragraph (b) and all notes to paragraph (b), and adding two sentences
to the end paragraph of (e)(1), to read as follows:
Sec. 748.9 Support documents for evaluation of foreign parties in
license applications and/or for promoting compliance with license
requirements.
* * * * *
(b) Requirements to obtain support documents for license
applications. Unless an exception in paragraph (c) of this section
applies, a support document is required for certain license
applications for:
(1) The People's Republic of China (PRC) other than the Hong Kong
Special Administrative Region (see Sec. Sec. 748.10 and 748.11(a)(2));
(2) ``600 Series Major Defense Equipment'' (see Sec. 748.11);
(3) Firearms and related commodities to member countries of the
Organization of American States (see Sec. 748.12); and
(4) The Hong Kong Special Administrative Region of the People's
Republic of China (see Sec. 748.13).
Note 1 to Paragraph (b): On a case-by-case basis, BIS may
require license applicants to obtain a support document for any
license application.
Note 2 to Paragraph (b): For End-Use Certificate requirements
under the Chemical Weapons Convention, see Sec. 745.2 of the EAR.
* * * * *
(e) * * *
(1) * * * The documents issued by the Government of the Hong Kong
Special Administrative region that are required pursuant to Sec.
748.13 are not used to evaluate license applications. They must be
obtained before shipment and need not be obtained before submitting a
license application.
* * * * *
0
5. Redesignate Sec. 748.13 as Sec. 748.14 and add new Sec. 748.13 to
read as follows:
Sec. 748.13 Hong Kong import and export licenses.
(a) Requirement to obtain the document--(1) Exports and reexports
to Hong Kong. An exporter or reexporter must obtain the documents
described in paragraph (a)(1)(i) or (a)(1)(ii) of this section before
using a license issued by BIS to export or reexport to Hong Kong any
item subject to the EAR and controlled on the CCL for NS, MT, NP column
1, or CB reasons. Collectively, the documents issued by Hong Kong must
cover all of the items to be exported or reexported pursuant to a
license.
(i) A copy of an import license issued to the Hong Kong importer by
the Government of the Hong Kong Special Administrative Region, pursuant
to the Hong Kong Import and Export (Strategic Commodities) Regulations,
that covers the items to be exported or reexported pursuant to that BIS
license for which a Hong Kong import license is required and that is
valid on the date of the export or reexport that is subject to the EAR;
or
(ii) A copy of a written statement issued by the Government of the
Hong Kong Special Administrative Region that no import license is
required to import into Hong Kong the item(s) to be exported or
reexported to Hong Kong. The statement may have been issued directly to
the Hong Kong importer or it may be a written statement available to
the general public. The statement may be used for more than one export
or reexport to Hong Kong so long as it remains an accurate statement of
Hong Kong law.
(2) Reexports from Hong Kong. No license issued by BIS may be used
to reexport from Hong Kong any item subject to the EAR controlled on
the CCL for NS, MT, NP column 1, and/or CB reasons unless the
reexporter has received either:
(i) An export license issued by the Government of the Hong Kong
Special Administrative Region, pursuant to the Hong Kong Import and
Export (Strategic Commodities) Regulations, that covers all items to be
rexported pursuant to that BIS license for which a Hong Kong export
license is required and that is valid on the date of the reexport that
is subject to the EAR; or
(ii) A copy of a written statement issued by the Government of the
Hong Kong Special Administrative Region that no export license is
required from Hong Kong for the item(s) to be reexported. The statement
may have been issued directly to the Hong Kong reexporter or it may be
a written statement available to the general public. The statement may
be used for more than one reexport from Hong Kong so long as it remains
an accurate statement of Hong Kong law.
(b) Recordkeeping. The documents required to be obtained by
paragraph (a) of this section must be retained and made available to
the U.S. Government upon request in accordance with part 762 of the
EAR.
PART 762--RECORDKEEPING
0
6. The authority citation for part 762 continues to read as follows:
Authority: 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; E.O.
13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 4,
2016, 81 FR 52587 (August 8, 2016).
0
7. In Sec. 762.2 remove the word ``and'' from the end of paragraph
(b)(52); remove the period from the end of paragraph (b)(53) and add in
its place a semicolon followed by the word ``and''; add paragraph
(b)(54) to read as follows:
Sec. 762.2 Records to be retained.
* * * * *
(b) * * *
(54) Sec. 748.13, Certain Hong Kong import and export licenses.
* * * * *
Dated: January 6, 2017.
Kevin J. Wolf,
Assistant Secretary for Export Admiration.
[FR Doc. 2017-00446 Filed 1-18-17; 8:45 am]
BILLING CODE 3510-33-P