[Federal Register Volume 85, Number 32 (Tuesday, February 18, 2020)]
[Rules and Regulations]
[Pages 8722-8725]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03144]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 744 and 762

[Docket No. 200211-0051]
RIN 0694-AH97


Temporary General License: Extension of Validity

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: The U.S. Government has decided to extend through April 1, 
2020, the temporary general license to Huawei Technologies Co., Ltd. 
(Huawei) and one hundred and fourteen of its non-U.S. affiliates on the 
Entity List. In order to implement this decision, this final rule 
revises the temporary general license to remove the expiration date of 
February 16, 2020, and substitute the date of April 1, 2020.

DATES: This rule is effective February 13, 2020, through April 1, 2020, 
except for amendatory instructions 1 and 3, which are effective 
February 13, 2020.

FOR FURTHER INFORMATION CONTACT: Director, Office of Exporter Services, 
Bureau of Industry and Security, Department of Commerce, Phone: (949) 
660-0144 or (408) 998-8806 or email your inquiry to: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Background

    As published on May 22, 2019 (84 FR 23468) and extended and amended 
through a final rule published on August 21, 2019 (84 FR 43487), this 
temporary general license authorizes certain activities, including 
those necessary for the continued operations of existing networks and 
equipment as well as the support of existing mobile services, including 
cybersecurity research critical to maintaining the integrity and 
reliability of existing and fully operational networks and equipment. 
Exporters, reexporters, and transferors are required to maintain 
certifications and other records, to be made available when requested 
by BIS, regarding their use of the temporary general license. The 
expiration date was again updated through February 16, 2020 (84 FR 
64018, Nov. 20, 2019).
    As published on May 22, 2019 (84 FR 22961), and as revised and 
clarified by a final rule published on August 21, 2019 (84 FR 43493), 
any exports, reexports, or in-country transfers of items subject to the 
EAR to any of the listed Huawei entities as of the effective date they 
were added to the Entity List continue to require a license, with the 
exception of transactions explicitly authorized by the temporary 
general license and eligible for export, reexport, or transfer (in-
country) prior to May 16, 2019 without a license or under a license 
exception. License applications will continue to be reviewed under a 
presumption of denial, as stated in the Entity List entries for the 
listed Huawei

[[Page 8723]]

entities. No persons are relieved of other obligations under the EAR, 
including but not limited to licensing requirements to the People's 
Republic of China (PRC or China) or other destinations and the 
requirements of part 744 of the EAR. The temporary general license also 
does not authorize any activities or transactions involving Country 
Group E countries (i.e., Cuba, Iran, North Korea, Sudan, and Syria) or 
foreign nationals.

Extension of validity

    At this time, the U.S. Government has decided to extend the 
temporary general license until April 1, 2020. In order to implement 
this U.S. Government decision, this final rule revises the temporary 
general license to remove the date of February 16, 2020 and substitute 
the date of April 1, 2020 in the introductory text in paragraph (b)(1) 
of the temporary general license and in the introductory text of 
paragraph (c) of Supplement No. 7 to part 744.

Export Control Reform Act of 2018

    On August 13, 2018, the President signed into law the John S. 
McCain National Defense Authorization Act for Fiscal Year 2019, which 
included the Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4801-
4852). ECRA provides the legal basis for BIS's principal authorities 
and serves as the authority under which BIS issues this rule. As set 
forth in Section 1768 of ECRA, all delegations, rules, regulations, 
orders, determinations, licenses, or other forms of administrative 
action that were made, issued, conducted, or allowed to become 
effective under the Export Administration Act of 1979 (previously, 50 
U.S.C. 4601 et seq.) (as in effect prior to August 13, 2018 and as 
continued in effect pursuant to the International Emergency Economic 
Powers Act (50 U.S.C. 1701 et seq.)) or the Export Administration 
Regulations, and were in effect as of August 13, 2018, shall continue 
in effect according to their terms until modified, superseded, set 
aside, or revoked under the authority of ECRA.

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 significant for 
purposes of Executive Order 12866. This rule is not an Executive Order 
13771 regulatory action because this rule is not significant under 
Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to or 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 
42.5 minutes for a manual or electronic submission. Total burden hours 
associated with the PRA and OMB control number 0694-0088 are not 
expected to increase as a result of this rule. You may send comments 
regarding the collection of information associated with this rule, 
including suggestions for reducing the burden, to Jasmeet K. Seehra, 
Office of Management and Budget (OMB), by email to 
[email protected], or by fax to (202) 395-7285.
    3. This rule does not contain policies with federalism implications 
as that term is defined in Executive Order 13132.
    4. Pursuant to section 1762 of ECRA, this action is exempt from the 
Administrative Procedure Act (5 U.S.C. 553) requirements for notice of 
proposed rulemaking, opportunity for public participation, and delay in 
effective date.
    5. 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 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

15 CFR Part 762

    Administrative practice and procedure, Business and industry, 
Confidential business information, Exports, Reporting and recordkeeping 
requirements.

    Accordingly, parts 744 and 762 of the Export Administration 
Regulations (15 CFR parts 730 through 774) is amended as follows:

PART 744--[AMENDED]

0
1. The authority citation for 15 CFR part 744 is revised to read as 
follows:

    Authority:  50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 
U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 
1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 
608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 
61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 
CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., 
p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice 
of September 19, 2019, 83 FR 49633 (September 20, 2019); Notice of 
November 12, 2019, 84 FR 61817 (November 13, 2019).


0
2. Supplement No. 7 to part 744 is added to read as follows:

Supplement No. 7 to Part 744--Temporary General License

    Notwithstanding the requirements and other provisions of Supplement 
No. 4 to this part, which became effective as to Huawei Technologies 
Co., Ltd. (Huawei), Shenzhen, Guangdong, China on May 16, 2019, and its 
non-U.S. affiliates listed in Supplement No. 4 to this part on, as 
applicable, May 16, 2019 or August 19, 2019, the licensing and other 
requirements in the EAR as of May 15, 2019, are restored in part as of 
May 20, 2019, and through April 1, 2020, pertaining to exports, 
reexports, and transfers (in-country) of items subject to the EAR to 
any of the listed Huawei entities. The licensing and other policies of 
the EAR that were in effect as of May 15, 2019, are available to 
export, reexport, or transfer (in-country) such items to the listed 
Huawei entities if the transaction meets the conditions of paragraph 
(b) of this supplement, is limited in scope to one or more of the 
activities described in paragraphs (c)(1) through (3) of this 
supplement, and if the transaction parties satisfy the requirements of 
paragraph (d)(1) of this supplement and, if applicable, paragraph 
(d)(2) of this supplement. Thus, for example, the authority of NLR or a 
License Exception that was available as of May 15, 2019, may be used in 
connection with a transaction as per this temporary general license.
    (a) Identification of non-U.S. affiliates. The non-U.S. affiliates 
to whom the licensing and other

[[Page 8724]]

requirements of the EAR are restored as described herein are those 
Huawei entities and affiliates added to the Entity List through the 
Federal Register documents listed in paragraphs (a)(1) and (2) of this 
supplement:
    (1) Addition of Entities to the Entity List, published on 5/21/19.
    (2) Non-U.S. affiliates of Huawei added to the Entity List on 
August 19, 2019.
    (b) Conditions for use of temporary general license. Use of this 
temporary general license is subject to the following conditions:
    (1) This temporary general license is effective from May 20, 2019, 
through April 1, 2020.
    (2) This temporary general license does not resolve persons of 
other obligations under the EAR, including but not limited to licensing 
requirements to the People's Republic of China or elsewhere and/or the 
requirements of part 744 of the EAR. This authorization does not 
authorize any activities or transactions involving Country Group E 
countries (i.e., Cuba, Iran, North Korea, Sudan and Syria) or persons.
    (3) With the exception of those explicitly authorized in this 
temporary general license, exports, reexports, transfers (in-country) 
continue to require a license pursuant to the licensing policy 
described on the Entity List and license applications will be reviewed 
under the license review policy for that entry.
    (c) Authorized transactions. This temporary general license allows, 
from May 20, 2019, through April 1, 2020, the following:
    (1) Continued operation of existing networks and equipment. BIS 
authorizes, subject to other provisions of the EAR, engagement in 
transactions necessary to maintain and support existing and currently 
'fully operational network' and equipment, including software for bug 
fixes, security vulnerability patches, and other changes to existing 
versions of the software, subject to legally binding contracts and 
agreements executed between Huawei, or one of its listed non-U.S. 
affiliates, and 'third parties' on or before May 16, 2019. Such 
transactions may not enhance the functional capacities of the original 
software or equipment.
    (i) Exclusions. (A) The authorization under paragraph (c)(1) of 
this supplement extends only to activities such as patching networks 
and network infrastructure equipment, not end-devices such as general-
purpose computing devices that would not be considered to be part of an 
existing and 'fully operational network.' Paragraph (c)(1) of this 
supplement does not authorize support for equipment that is not 
directly related to the support and maintenance of the network.
    (B) The provision of the temporary general license under paragraph 
(c)(1) of this supplement does not authorize transfers of equipment for 
general business purposes or for activities that are not in direct 
support of an existing and `fully operational network' (e.g., 
semiconductor production equipment).
    (ii) [Reserved]
    Note 1 to paragraph (c)(1): The term `third parties' in paragraph 
(c)(1) of this supplement and the term 'third party' in Notes 2 and 3 
to paragraph (c)(1) refer to a party that is not Huawei, one of its 
listed non-U.S. affiliates, or the exporter, reexporter, or transferor, 
but rather an organization such as a telecommunications service 
provider.
    Note 2 to paragraph (c)(1): The term `fully operational network' in 
paragraph (c)(1) of this supplement, as well as in paragraph (c)(3) of 
the supplement, refers to a `third party' network providing services to 
the `third party's' customers.
    (2) Support to existing `personal consumer electronic devices' and 
`Customer Premises Equipment (CPE)'. BIS authorizes, subject to other 
provisions of the EAR, engagement in transactions necessary to provide 
service and support, including software for bug fixes, security 
vulnerability patches, and other changes to existing versions of the 
software, to existing Huawei `personal consumer electronic devices.' 
Such transactions may not enhance the functional capacities of the 
original software or equipment. For the purposes of this paragraph 
(c)(2), the term `personal consumer electronic devices' is defined as 
including phones and other personally-owned equipment, such as a 
tablets, smart watches, and mobile hotspots such as MiFi devices. The 
authorized transactions under this paragraph (c)(2) include support for 
personal use of telecommunications hardware known as `Customer Premises 
Equipment (CPE),' such as network switches, residential internet 
gateways, set-top boxes, home networking adapters and other personally-
owned equipment that enables consumers to access network communications 
services and distribute them within their residence or small business. 
The authorization conferred by this paragraph (c)(2) is limited to 
models of Huawei `personal consumer electronic devices' and `CPE' that 
were available to the public on or before May 16, 2019.
    (3) Cybersecurity research and vulnerability disclosure. BIS 
authorizes, subject to other provisions of the EAR, the disclosure to 
Huawei and/or to its listed non-U.S. affiliates of information 
regarding security vulnerabilities in items owned, possessed, or 
controlled by Huawei or any of its non-U.S. affiliates when related to 
the process of providing ongoing security research critical to 
maintaining the integrity and reliability of existing and currently 
`fully operational network' and equipment.
    (d) Certification statement. Prior to making an export, reexport, 
or transfer (in-country) pursuant to the temporary general license, the 
exporter, reexporter, or transferor must obtain a certification 
statement and any additional support documentation needed to 
substantiate the certification statement from the listed Huawei entity 
that will receive the item(s), as specified in paragraph (d)(1) of this 
supplement.
    (1) Certification statement required from Huawei or one of its 
listed non-U.S. affiliates. Prior to any export, reexport, or transfer 
(in-country) under the temporary general license to Huawei or any of 
its listed non-U.S. affiliates identified in paragraph (a) of this 
supplement, the exporter, reexporter, or transferor must obtain a 
certification statement from the entity that will receive the item(s). 
The temporary general license also requires the party exporting, 
reexporting, or transferring (in-country) an item ``subject to the 
EAR'' to obtain, from the listed Huawei entity receiving the item, a 
certification statement under paragraph (d) of this supplement 
specifying how the export, reexport, or in-country transfer satisfies 
the provisions of the temporary general license, including specifying 
whether the activity or activities that will be supported by the 
transaction fall within paragraph (c)(1), (2), or (3) of this 
supplement. In order to substantiate the certification statement for 
transactions that fall within paragraph (c)(1), the exporter, 
reexporter, or transferor must obtain documentation from Huawei or one 
of its listed non-U.S. affiliates showing that there was a legally 
binding contract or agreement executed between the listed Huawei entity 
and a 'third party' on or before May 16, 2019. The exporter, 
reexporter, or transferor and the listed Huawei entity are each 
responsible for retaining the certification statement and any 
additional support documentation needed to substantiate the 
certification statement under paragraph (d). See part 762 of the EAR 
for record retention requirements. The certification statement must be 
in writing (which may be conveyed by email), be signed and dated by an 
individual of sufficient authority to legally bind the listed

[[Page 8725]]

entity, and shall provide the information required in paragraphs 
(d)(1)(i) and (ii) of this supplement and the certifications specified 
in paragraphs (d)(1)(iii) through (v) of this supplement.
    (i) Name of the entity; complete physical address, to include 
shipping, corporate, and end user addresses, if different (simply 
listing a post office box is insufficient); telephone number; email 
address; website (if available); and name and title of individual 
signing the certification statement;
    (ii) A complete list of the item(s), including the applicable 
Export Control Classification Number(s) or designation (if EAR99) for 
the item(s) under the EAR, and (for tangible shipments of commodities 
and software) the quantity or quantities of the item(s) that will be 
exported, reexported, or transferred under the authority of the 
temporary general license (this inclusive list may cover multiple 
exports, reexports, or transfers (in-country) under the temporary 
general license of the same item(s); see paragraph (d)(2) of this 
supplement);
    (iii) The end-use of the item(s) to be received as an export, 
reexport, or transfer (in-country) falls within the scope of a 
specified authorizing paragraph under paragraph (c) of this supplement 
(a general statement or declaration that the item falls within the 
scope of paragraph (c) or the scope of the temporary general license 
will not be sufficient, as the specific authorizing paragraph under 
paragraph (c) must be identified);
    (iv) The entity will comply with the recordkeeping requirements in 
part 762 of the EAR, including by providing copies of the certification 
statement and all other export, reexport, or transfer (in-country) 
records required to be retained in part 762 to any authorized agent, 
official, or employee of BIS, the U.S. Customs Service, or any other 
agency of the U.S. Government as required in Sec.  762.7 of the EAR; 
and
    (v) The individual signing the certification statement, on behalf 
of the consignee identified in paragraph (a) of this supplement, has 
sufficient authority to legally bind the entity.
    (2) Certification statements may be used for multiple exports, 
reexports, and transfers (in-country). Exporters, reexporters, and 
transferors may rely on the certification statements obtained under 
paragraph (d)(1) of this supplement for multiple exports, reexports, 
and transfers (in-country) involving the same item(s) to the same 
consignee/end-user, provided the information included remains accurate 
for those additional exports, reexports, and transfers (in-country). If 
one certification statement is used for multiple exports, reexports, or 
transfers (in-country) made pursuant to the temporary general license, 
the exporter, reexporter, and transferor must maintain a log or other 
similar record that identifies each such export, reexport, and transfer 
(in-country) against that specific certification statement. The log or 
other similar record must be retained in accordance with part 762 of 
the EAR.

PART 762--[AMENDED]

0
3. The authority citation for part 762 is revised to read as follows:

    Authority:  50 U.S.C. 4801-4852; 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.

0
4. Section 762.2 is amended by adding paragraph (b)(55) to read as 
follows:


Sec.  762.2  Records to be retained.

* * * * *
    (b) * * *
    (55) Supplement No. 7 to part 744, Temporary General License 
Certification Statements and logs or other records required, including 
any additional support documentation needed to substantiate the 
certification statement, under paragraph (d) of Supplement 7 to part 
744 of this chapter.
* * * * *

    Dated: February 12, 2020.
Richard E. Ashooh,
Assistant Secretary for Export Administration.
[FR Doc. 2020-03144 Filed 2-13-20; 4:15 pm]
 BILLING CODE 3510-33-P