[Federal Register Volume 82, Number 113 (Wednesday, June 14, 2017)]
[Rules and Regulations]
[Pages 27108-27110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-12269]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 740 and 774

[Docket No. 160217120-7396-02]
RIN 0694-AG85


Wassenaar Arrangement 2015 Plenary Agreements Implementation, 
Removal of Foreign National Review Requirements, and Information 
Security Updates; Corrections

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Correcting amendments.

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SUMMARY: The Bureau of Industry and Security (BIS) maintains, as part 
of its Export Administration Regulations (EAR), the Commerce Control 
List (CCL), which identifies certain items subject to Department of 
Commerce jurisdiction. This rule corrects citations, replaces text that 
was inadvertently removed, and corrects other errors associated with 
the ``Wassenaar Arrangement 2015 Plenary Agreements Implementation, 
Removal of Foreign National Review Requirements, and Information 
Security Updates'' final rule published on September 20, 2016 (WA15 
rule).

DATES: This rule is effective: June 14, 2017.

FOR FURTHER INFORMATION CONTACT: For general questions contact Sharron 
Cook, Office of Exporter Services, Bureau of Industry and Security, 
U.S. Department of Commerce at 202-482 2440 or by email: 
[email protected].
    For technical questions contact: Office of National Security and 
Technology Transfer Controls, Information Technology Control Division, 
Aaron Amundson at 202-482-0707.

SUPPLEMENTARY INFORMATION:

Background

    On September 20, 2016, BIS published a final rule entitled, 
``Wassenaar Arrangement 2015 Plenary Agreements Implementation, Removal 
of Foreign National Review Requirements, and Information Security 
Updates'' (81 FR 64656-64692), (WA15

[[Page 27109]]

rule). The Wassenaar Arrangement (WA) on Export Controls for 
Conventional Arms and Dual-Use Goods and Technologies is a group of 41 
like-minded states committed to promoting responsibility and 
transparency in the global arms trade, and preventing destabilizing 
accumulations of arms. As a Participating State, the United States has 
committed to controlling for export all items on the WA control lists. 
The lists were first established in 1996 and have been revised annually 
thereafter. Proposals for changes to the WA control lists that achieve 
consensus are approved by Participating States at annual Plenary 
meetings. Participating States are charged with implementing the agreed 
list changes as soon as possible after approval. The United States' 
implementation of WA list changes ensures U.S. companies have a level 
playing field with their competitors in other WA Participating States. 
This rule affects three sections of the EAR by correcting citations, 
replacing text that was inadvertently removed, and correcting other 
errors associated with the publication of the September 20th WA15 rule.

Part 740--License Exceptions, Sec.  740.13 Technology and Software 
Unrestricted (TSU)

    The introductory paragraph of Sec.  740.13 (License Exception TSU) 
of the EAR is corrected by removing the reference to ``encryption 
source code (and corresponding object code) that would be considered 
publicly available under Sec.  734.3(b)(3) of the EAR,'' because the 
publicly available provisions for encryption were moved to Sec.  
742.15(b) in the WA15 rule. This action also adds to the introductory 
paragraph a reference to ``release of technology and source code in the 
United States by U.S. universities to their bona fide and full time 
regular employees'' as that authorization was added in Sec.  740.13(f) 
of the EAR by the initial implementation rule (78 FR 22718), April 16, 
2013.

Part 740--License Exceptions, Sec.  740.17 Encryption Commodities, 
Software, and Technology (ENC)

    This correcting action makes three changes to Sec.  740.17 of the 
EAR, as described below.
    In Sec.  740.17, a Note that was inadvertently removed by the WA15 
rule is added to introductory paragraph (b). The Note was omitted by 
error when the mass market provisions were moved from Sec.  742.15(b) 
to Sec.  740.17(b) in order to consolidate these provisions in one 
place.
    Also in Sec.  740.17, paragraph (b)(2)(i) is amended by replacing 
the incorrect reference to non-existing paragraph (a)(i)(A) and adding 
in its place the correct reference to paragraph (b)(2)(i)(A).

Supplement No. 3 to Part 774 (Statements of Understanding)

    This correction rule amends the Notes to paragraph (a) by revising 
paragraph (6) to replace the reference to Note 1 to Category 5, Part II 
with a reference to Supplement No. 2 to part 774 of the EAR because 
Note 1 to Category 5, Part II was removed by the WA15 rule and replaced 
with the Supp. No. 2 reference.

Export Administration Act

    Although the Export Administration Act of 1979, as amended, expired 
on August 21, 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 4, 2016, 81 FR 52587 (August 8, 
2016), has continued the Export Administration Regulations (EAR) in 
effect under the International Emergency Economic Powers Act (50 U.S.C. 
1701 et seq.). 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 designated a ``significant regulatory 
action,'' as defined under Executive Order 12866.
    2. This rule does not contain policies with Federalism implications 
as that term is defined under Executive Order 13132.
    3. The provisions of the Administrative Procedure Act requiring 
notice of proposed rulemaking, the opportunity for public 
participation, and a 30-day delay in effective date (5 U.S.C. 553) are 
inapplicable, because this regulation involves a military and foreign 
affairs function of the United States (5 U.S.C. 553(a)(1)). Immediate 
implementation of these amendments fulfills the United States' 
international obligation to the Wassenaar Arrangement on Export 
Controls for Conventional Arms and Dual-Use Goods and Technologies 
(Wassenaar Arrangement). The Wassenaar Arrangement contributes to 
international security and regional stability by promoting greater 
responsibility in transfers of conventional arms and dual use goods and 
technologies, thus preventing destabilizing accumulations of such 
items. The Wassenaar Arrangement consists of 41 member countries that 
act on a consensus basis, and the changes set forth in this action make 
technical corrections to regulations implementing agreements reached at 
the December 2015 plenary session of the Wassenaar Arrangement. Because 
the United States is a significant exporter of the items covered by 
this rule, implementation of this rule is necessary for the Wassenaar 
Arrangement to achieve its purpose. Any delay in implementation will 
create a disruption in the movement of affected items globally, because 
of disharmony between export control measures implemented by Wassenaar 
Arrangement members, resulting in tension between member countries. 
Export controls work best when all countries implement the same export 
controls in a timely manner. Delaying this rulemaking to allow for 
notice and comment and a 30-day delay in effectiveness would prevent 
the United States from fulfilling its commitment to the Wassenaar 
Arrangement in a timely manner, and would injure the credibility of the 
United States in this and other multilateral regimes.
    In addition, issuing a notice of proposed rulemaking would be 
inappropriate and contrary to the public interest in this instance, as 
this rule is merely making corrections to a previously published final 
rule.
    Although there is no formal comment period, public comments on this 
final rule are welcome on a continuing basis. Comments should be 
submitted to Sharron Cook, Office of Exporter Services, Bureau of 
Industry and Security, Department of Commerce, 14th and Pennsylvania 
Ave. NW., Room 2099, Washington, DC 20230.
    4. Because this action merely makes technical correcting amendments 
to the previously published WA15 final rule, the analysis required by 
the the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) that is 
contained in the WA15 final rule continues to apply to the regulatory 
text that is corrected by this

[[Page 27110]]

action, and no additional analysis is necessary.

List of Subjects

15 CFR Part 740

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

15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

    Accordingly, parts 740 and 774 of the Export Administration 
Regulations (15 CFR parts 730 through 774) are amended as follows:

PART 740 [AMENDED]

0
1. The authority citation for part 740 continues 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. Section 740.13 is amended by revising the introductory text to read 
as follows:


Sec.  740.13   Technology and Software--unrestricted (TSU).

    This license exception authorizes exports and reexports of 
operation technology and software; sales technology and software; 
software updates (bug fixes); ``mass market'' software subject to the 
General Software Note; and release of technology and source code in the 
United States by U.S. universities to their bona fide and full time 
regular employees. Note that encryption software subject to the EAR is 
not subject to the General Software Note (see paragraph (d)(2) of this 
section).
* * * * *

0
3. In Sec.  740.17:
0
a. Paragraph (b) introductory text is amended by adding a Note to the 
paragraph; and
0
b. Paragraph (b)(2)(i) is amended by removing the reference ``paragraph 
(a)(i)(A)'' and adding in its place ``paragraph (b)(2)(i)(A)''.
    The addition reads as follows:


Sec.  740.17   Encryption commodities, software, and technology (ENC).

* * * * *
    (b) * * *
    Note to paragraph (b) introductory text: Mass market encryption 
software that would be considered publicly available under Sec.  
734.3(b)(3) of the EAR, and is authorized for export under this 
paragraph (b), remains subject to the EAR until all applicable 
classification or self-classification requirements set forth in this 
section are fulfilled.
* * * * *

PART 774 [AMENDED]

0
4. The authority citation for part 774 continues to read as follows:

    Authority: 50 U.S.C. 4601 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; 42 U.S.C. 2139a; 15 U.S.C. 1824a; 50 U.S.C. 
4305; 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 4, 2016, 81 FR 52587 (August 8, 
2016).

Supplement No. 3 to Part 774 [Amended]

0
5. In Supplement No. 3 to part 774, the Notes to paragraph (a) are 
amended by revising paragraph (6) to read as follows:

Supplement No. 3 to Part 774--Statements of Understanding

    (a) * * *
    Notes to Paragraph (a): * * *
    (6) For commodities and software ``specially designed'' for medical 
end-use that incorporate an encryption or other ``information 
security'' item subject to the EAR, see also section 3 (General 
``Information Security'' Note (GISN)) to Supplement No. 2 to this part.
* * * * *

    Dated: June 7, 2017.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2017-12269 Filed 6-13-17; 8:45 am]
BILLING CODE 3510-33-P