[Federal Register Volume 89, Number 56 (Thursday, March 21, 2024)]
[Rules and Regulations]
[Pages 20107-20116]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06067]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 740, 744 and 746

[Docket No. 240308-0076]
RIN 0694-AI82


Export Administration Regulations End-User Controls: Imposition 
of Restrictions on Certain Persons Identified on the List of Specially 
Designated Nationals and Blocked Persons (SDN List)

AGENCY: Bureau of Industry and Security, Department of Commerce.

ACTION: Final rule.

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

SUMMARY: In this final rule, the Bureau of Industry and Security (BIS) 
makes changes to the end-user controls of the Export Administration 
Regulations (EAR) to add end-user controls, and in certain cases expand 
existing end-user controls, on certain persons identified on the List 
of Specially Designated Nationals and Blocked Persons (SDN List) 
maintained by the Department of the Treasury's Office of Foreign Assets 
Control (OFAC).

DATES: This rule is effective on March 21, 2024.

FOR FURTHER INFORMATION CONTACT: For questions on this final rule, 
contact W. Collmann Griffin, Senior Policy Advisor, International 
Policy Office, Bureau of Industry and Security, Department of Commerce, 
Phone: 202-482-1430, Email: [email protected].
    For emails, include ``EAR requirements for SDNs'' in the subject 
line.

SUPPLEMENTARY INFORMATION: 

I. Background

    The U.S. Government has a number of list-based tools to restrict 
economic activities of individuals and entities to protect U.S. 
national security or foreign policy interests. BIS employs end-user 
controls under the Export Administration Regulations (EAR), 15 CFR 
parts 730-774, including the Entity List (Supplement No. 4 to part 744 
of the EAR), to impose license requirements for the export, reexport, 
and transfer (in-country) of items subject to the EAR. End-user 
requirements and Entity List additions allow for the monitoring of 
items subject to the EAR, including less-sensitive items. In the 
context of the Entity List, BIS maintains stringent license review 
policies and restrictions on the use of EAR license exceptions specific 
to each listed entity.
    The U.S. Department of the Treasury's Office of Foreign Assets 
Control (OFAC) maintains the List of Specially Designated Nationals and 
Blocked Persons (SDN List) to identify persons whose property or 
interests in property that are or come within the United States or in 
the possession or control of U.S. persons, wherever located, are 
blocked (see appendix A to 31 CFR chapter V and https://www.treas.gov/sdn). These targeted economic sanctions tools enable the U.S. 
Government to escalate economic pressure and promote deterrence while 
mitigating unintended economic effects on the United States and our 
partners and allies.
    After reviewing categories of end users and global activities that 
implicate both financial and export control concerns, BIS has 
determined to implement EAR license requirements for all items subject 
to the EAR for all persons blocked under eleven OFAC-administered 
sanctions programs. BIS will also continue to apply license 
requirements involving all items subject to the EAR in connection with 
persons sanctioned under three OFAC-administered sanctions programs. 
The EAR restrictions involving these

[[Page 20108]]

fourteen OFAC-administered sanctions programs serve as a force 
multiplier and complement OFAC's blocking sanctions, which prohibit all 
transactions by U.S. persons or within (or transiting) the United 
States that involve any property or interests in property of designated 
or blocked persons, unless authorized by a general or specific license 
issued by OFAC, or exempt.
    The imposition of these EAR license requirements for exports, 
reexports, and transfers (in-country) allows for the EAR controls to 
act as a backstop for activities over which OFAC does not exercise 
jurisdiction, including deemed exports and deemed reexports, and for 
reexports and transfers (in-country) that would otherwise not involve 
U.S. persons (e.g., U.S. financial institutions). Notably, the new 
license requirements allow for controls on items outside the United 
States, complementing the existing authority in many OFAC programs to 
impose blocking sanctions on persons who materially assist, sponsor, or 
provide financial, material, or technological support for, or goods or 
services to or in support of, SDNs, even outside of U.S. jurisdiction.
    In this final rule, persons blocked under fourteen OFAC sanctions 
programs will be subject to stringent export controls under the EAR. 
Each program is listed below with the corresponding sanctions authority 
and program code or ``identifier,'' arranged by thematic program to 
assist understanding.
    Related to Russia's invasion of Ukraine:
     Belarus Sanctions Regulations, 31 CFR part 548; Executive 
Order 13405 (OFAC program code or ``identifier'' [BELARUS]);
     Executive Order 14038 ([BELARUS-EO14038]);
     Russian Harmful Foreign Activities Sanctions Regulations 
31 CFR part 587; Executive Order 14024 [RUSSIA-EO14024];
     Executive Order 13660 ([UKRAINE-EO13660]);
     Executive Order 13661 ([UKRAINE-EO13661]);
     Executive Order 13662 [UKRAINE-EO13662]; and
     Executive Order 13685 ([UKRAINE-EO13685]).
    Related to terrorism:
     Foreign Terrorist Organizations Sanctions Regulations, 31 
CFR part 597 [FTO]; and
     Global Terrorism Sanctions Regulations, 31 CFR part 594 
[SDGT].
    Related to WMD:
     Weapons of Mass Destruction Proliferators Sanctions 
Regulations, 31 CFR part 544 [NPWMD].
    Related to narcotics trafficking or other criminal networks:
     Executive Order 14059 [ILLICIT DRUGS-EO14059];
     Narcotics Trafficking Sanctions Regulations, 31 CFR part 
536 [SDNT];
     Foreign Narcotics Kingpin Sanctions Regulations, 31 CFR 
part 598 [SDNTK]; and
     Transnational Criminal Organizations Sanctions 
Regulations, 31 CFR part 590; Executive Order 13581 [TCO].
    See Program Tag Definitions for OFAC Sanctions Lists for additional 
information: https://ofac.treasury.gov/specially-designated-nationals-list-sdn-list/program-tag-definitions-for-ofac-sanctions-lists.
    Prior to this final rule, persons designated under two of these 
fourteen OFAC-administered sanctions programs (i.e., [ILLICIT DRUGS-
EO14059] and [TCO]) were not subject to restrictions under the EAR. 
Persons designated under the other twelve programs were already subject 
to comprehensive export controls under part 744 provisions, or under 
provisions in parts 740 or 746 of the EAR. As described below under 
sections II and III, this final rule expands certain of these part 744 
provisions and revises part 744 to feature a comprehensive, 
consolidated provision that references all fourteen OFAC-administered 
sanctions programs. It also consolidates the relevant export control 
restrictions from part 740 and 746 under this new provision in part 
744.
    The EAR, prior to this final rule, imposed licensing restrictions 
on export, reexport, and transfer (in-country) transactions involving 
all items subject to the EAR in which persons blocked under three OFAC-
administered sanctions programs--[FTO], [SDGT], and [NPWMD]--served as 
parties to the transaction. This rule eliminates the three applicable 
underlying sections in part 744 and adds their contents to a 
consolidated single section under Sec.  744.8.
    In addition, prior to this final rule, the EAR imposed licensing 
restrictions on exports, reexports, and transfers (in-country) of 
`luxury goods' in which persons blocked under seven of these OFAC 
administered sanctions programs--[BELARUS], [BELARUS-EO14038], [RUSSIA-
EO14024], [UKRAINE-EO13660], [UKRAINE-EO13661], [UKRAINE-EO13662], and 
[UKRAINE-EO13685]--served as parties to the transaction. This final 
rule expands the license requirement to all items subject to the EAR 
and moves the relevant regulatory contents from current Sec.  
746.10(a)(2) into a consolidated single section of the EAR under Sec.  
744.8.
    Prior to this final rule, the EAR also imposed restrictions on the 
availability of license exceptions for transactions involving certain 
items in which persons blocked under two of these OFAC-administered 
sanctions programs, [SDNT] and [SDNTK], served as parties to the 
transaction. This final rule restricts such license exception 
availability further by adding a license requirement for all items 
subject to the EAR when a person blocked pursuant to these two programs 
is a party to the transaction and places the substantive regulatory 
contents in a consolidated single section of the EAR under Sec.  744.8.
    BIS will continue its regular coordination with OFAC to impose 
restrictions on persons designated under other OFAC blocking or 
sanctions programs in cases in which BIS determines that its export 
controls would be an effective tool to complement OFAC's sanctions 
programs. All interested parties may consult the Commerce Department-
maintained Consolidated Screening List (CSL), available to the public 
at https://www.trade.gov/consolidated-screening-list, as a single-
search portal to identify individuals and entities who appear on lists 
maintained by the Departments of Commerce, the Treasury, and State.
    This final rule also makes several structural and technical changes 
to part 744 and removes four end-user control provisions under part 744 
of the EAR that are either outdated or obsolete in light of changes 
made to other federal authorities.
    Specifically, this final rule:
    A. Imposes end-user controls under the EAR involving persons 
identified on OFAC's SDN List under eleven categories with the 
following identifiers: [BELARUS], [BELARUS-EO14038], [RUSSIA-EO14024], 
[UKRAINE-EO13660], [UKRAINE-EO13661], [UKRAINE-EO13662], [UKRAINE-
EO13685], [ILLICIT DRUGS-EO14059], [SDNT], [SDNTK], and [TCO].
    B. Consolidates into a single section the contents of several part 
744 SDN-related end-user provisions under the EAR. Prior to this final 
rule, part 744 included five separate sections involving SDNs 
designated in or pursuant to several specified Executive Orders 
(E.O.s). This final rule consolidates the contents of those five 
sections and the eleven new SDN-related restrictions so that all of the 
SDN-related end-user controls in part 744 will be in the same section. 
As part

[[Page 20109]]

of this regulatory action, BIS removes from the EAR two provisions: one 
provision involving a terminated E.O. that had targeted Specially 
Designated Terrorists (SDTs) and a second provision involving Iraq that 
does not address current policy concerns under the EAR.
    C. Removes two end-user control provisions in part 744 of the EAR 
that are no longer needed because of the existence of a broader end-
user control in Sec.  744.11 that allows BIS to impose restrictions on 
entities acting contrary to the national security or foreign policy 
interests of the United States.

II. Expansion of SDN-Related End-User Controls Under the EAR

A. Persons Designated on SDN List With the Identifiers [BELARUS], 
[BELARUS-EO14038], [RUSSIA-EO14024], [UKRAINE-EO13660], [UKRAINE-
EO13661], [UKRAINE-EO13662], or [UKRAINE-EO13685]

1. Export Controls Implemented Against Russia and Belarus
    In response to Russia's February 2022 invasion of Ukraine, BIS 
imposed extensive sanctions on Russia under the EAR as part of the 
final rule, ``Implementation of Sanctions Against Russia Under the 
Export Administration Regulations (EAR)'' (the Russia Sanctions Rule) 
(87 FR 12226, March 3, 2022). To address Belarus's complicity in the 
invasion, BIS imposed similar sanctions on Belarus under the EAR in a 
final rule, ``Implementation of Sanctions Against Belarus'' (``Belarus 
Sanctions Rule'') (87 FR 13048, March 6, 2022). During the last two 
years, BIS has published a number of additional final rules 
strengthening the export controls on Russia and Belarus, including 
measures undertaken in coordination with U.S. allies and partners.
    Most recently, in a January 2024 rule, ``Implementation of 
Additional Sanctions Against Russia and Belarus Under the Export 
Administration Regulations (EAR) and Refinements to Existing 
Controls,'' BIS strengthened its sanctions under the EAR against Russia 
and Belarus, including by expanding the scope of the EAR's Russian and 
Belarusian Industry Sector Sanctions, expanding the EAR's Russia/
Belarus foreign direct product rule to cover certain EAR99 antennas, 
antenna reflectors, and parts thereof, and other actions to prohibit 
exports or reexports of military and spacecraft-related items to Russia 
and Belarus (89 FR 4804, January 25, 2024). The Department of Commerce 
took these actions to enhance the effectiveness of its controls on 
these two countries and to better align them with those implemented by 
U.S. allies and partners.
2. Designations Made Pursuant to E.O.s 13405, 13660, 13661, 13662, 
13685, 14024, and 14038 and BIS Actions To Complement Such Designations
    OFAC has taken action to address Russia's February 2022 invasion of 
Ukraine, including adding various persons to OFAC's SDN List pursuant 
to E.O. 13405, 13660, 13661, 13662, 13685, 14024, and 14038. Persons 
who are blocked pursuant to one of these seven E.O.s are designated on 
the SDN List with the identifier [BELARUS], [BELARUS-EO14038], [RUSSIA-
EO14024], [UKRAINE-EO13660], [UKRAINE-EO13661], [UKRAINE-EO13662], or 
[UKRAINE-EO13685] (see http://www.treas.gov/sdn).
    In this rule, in order to complement the designations made under 
E.O. 13405, 13660, 13661, 13662, 13685, 14024, or 14038, BIS amends the 
EAR to revise Sec.  744.8 to impose a license requirement for all 
exports, reexports, or transfers (in-country) of items subject to the 
EAR when a person designated under one of these seven E.O.s is a party 
to the transaction as defined in Sec.  748.5(c) through (f). In 
particular, these new EAR license requirements under Sec.  744.8 will 
apply to any reexport or transfer (in-country) transaction that is not 
subject to regulation by OFAC, including due to the fact that the 
transaction does not involve U.S. persons or the U.S. financial system, 
thereby ensuring that the U.S. Government can restrict such activity. 
These new license requirements will apply broadly to all items subject 
to the EAR. There will also be a prohibition on the use of any license 
exceptions, although as specified in new Sec.  744.8(a)(2), the EAR 
authorization requirements will take into account OFAC general licenses 
and exemptions to ensure consistency, and a restrictive presumption of 
denial review policy will apply to license applications involving these 
persons as parties to the transaction.
    These EAR changes will limit these persons' access to items subject 
to the EAR, regardless of their source. Also, these actions will 
advance the U.S. national security and foreign policy objectives set 
forth in E.O. 13405, 13660, 13661, 13662, 13685, 14024, and 14038, and 
build upon the policy objectives set forth in the Russia Sanctions 
rules and in the Belarus Sanctions rules as described above. This rule 
is part of a set of larger U.S. Government and partner and allied 
country actions intended to increase the financial, economic, and 
strategic consequences of Russia's further invasion of Ukraine and 
Belarus's substantial enabling of such invasion, and Russia's ongoing 
military aggression in Ukraine during the past two years.
    In order to avoid duplication, if OFAC issues a general license or 
specific license that authorizes a transaction with or involving a 
person blocked under the applicable OFAC regulations and included on 
the SDN List with the identifier [BELARUS], [BELARUS-EO14038], [RUSSIA-
EO14024], [UKRAINE-EO13660], [UKRAINE-EO13661], [UKRAINE-EO13662], or 
[UKRAINE-EO13685] or such transaction is otherwise exempt from OFAC's 
regulations, then no additional BIS authorization is required for 
exports, reexports, or transfers (in-country) of any item subject to 
the EAR when that person is a party to the transaction as defined in 
Sec.  748.5(c) through (f), provided that a license would otherwise 
only be required under Sec.  744.8. A BIS license would still be 
required for exports, reexports, or transfers (in-country) that 
implicate other parts of the EAR, including parts 742 and 746, as well 
as supplement no. 4 to part 744 or other end-use or end-user controls. 
For example, an entity with the SDN List identifier [RUSSIA-EO14024] 
would be subject to the license requirements under Sec.  744.8 but 
could also be listed on the Entity List in supplement no. 4 to part 
744. If the entity were listed on the Entity List, a party seeking to 
make an export, rexport, or transfer (in-country) would have to 
overcome the additional EAR license requirements. Alternatively, if the 
item were highly controlled, such as a ``600 series'' military item, 
the party seeking to make an export, reexport, or transfer (in-country) 
would have to overcome Commerce Control List (CCL)-based license 
requirements in addition to requirements set forth in Sec.  744.8.
    BIS estimates new license requirements under Sec.  744.8 for 
persons included on the SDN List with the identifier [BELARUS], 
[BELARUS-EO14038], [RUSSIA-EO14024], [UKRAINE-EO13660], [UKRAINE-
EO13661], [UKRAINE-EO13662], or [UKRAINE-EO13685] will result in an 
additional five license applications being submitted to BIS annually.

B. Persons Designated on the SDN List With [ILLICIT DRUGS-EO14059], 
[SDNT], [SDNTK], or [TCO] Identifiers Related to Narcotics or Criminal 
Activities

    OFAC has taken various actions to address narcotics or other 
criminal activities, including by adding various

[[Page 20110]]

persons to the SDN List with the identifiers [ILLICIT DRUGS-EO14059], 
[SDNT], [SDNTK], or [TCO].
    This final rule adds persons designated on the SDN List with the 
following identifiers to Sec.  744.8 of the EAR: [ILLICIT DRUGS-
EO14059] (persons designated pursuant to E.O. 14059); [SDNT] (persons 
designated pursuant to the Narcotics Trafficking Sanctions Regulations, 
31 CFR part 536); [SDNTK] (persons designated pursuant to the Foreign 
Narcotics Kingpin Sanctions Regulations, 31 CFR part 598); and [TCO] 
(persons designated pursuant to the Transnational Criminal 
Organizations Sanctions Regulations, 31 CFR part 590 and E.O. 13581). 
Consistent with these SDN-related end-user controls, Sec.  744.8, as 
revised and consolidated by this final rule, will impose license 
requirements for all items subject to the EAR, restrict the 
availability of all license exceptions, and specify a presumption of 
denial license review policy.
    This rule removes and reserves Sec.  740.2(a)(22) as a conforming 
change to the addition of two of these SDN List identifiers to Sec.  
744.8. Due to the fact that Sec.  744.8 will include a restriction on 
the use of EAR license exceptions for export, reexport, and transfer 
(in-country) transactions involving all items subject to the EAR, Sec.  
740.2(a)(22) is no longer needed.
    Prior to this final rule, the SDN identifiers [SDNT] and [SDNTK] 
were included in a general restriction on the use of license exceptions 
under Sec.  740.2(a)(22) for certain items. This general restriction 
specified that the export, reexport, or transfer (in-country) of any 
item classified under a 0x5zz Export Control Classification Number 
(ECCN) (i.e., firearms and related items) could not be authorized under 
an EAR license exception when a party to the transaction was designated 
on the SDN List with one of these identifiers. Because persons 
designated on the SDN List with these identifiers were involved in 
narcotics or other criminal activities, BIS had restricted the use of 
all EAR license exceptions for the firearms and related items 
controlled under the 0x5zz ECCNs to protect U.S. national security and 
foreign policy interests. Due to the fact that there is a worldwide 
license requirement under the EAR for firearms, BIS did not impose a 
license requirement under part 744 for transactions involving persons 
on the SDN List with these identifiers who are parties to the 
transaction, and instead relied on the CCL-based license requirements 
and related license review policies.
    BIS has determined that the license requirements for export, 
reexport, and transfer (in-country) transactions in which persons 
designated on the SDN List with the identifiers [ILLICIT DRUGS-
EO14059], [SDNT], [SDNTK], or [TCO] are parties to the transaction 
should be expanded from CCL-based requirements to all items subject to 
the EAR to further protect U.S. national security and foreign policy 
interests. In order to avoid duplication, U.S. persons are not required 
to seek separate BIS authorization for an export, reexport, or transfer 
(in-country) of any item subject to both the EAR and OFAC's regulations 
when a person identified in Sec.  744.8 is a party to the transaction 
as defined in Sec.  748.5(c) through (f). Therefore, if OFAC authorizes 
an export from the United States or an export, reexport, or transfer 
(in-country) by a U.S. person to a person identified in Sec.  744.8, no 
separate BIS authorization is required.
    BIS estimates new license requirements under Sec.  744.8 for 
transactions in which persons designated on the SDN List with the 
identifiers [ILLICIT DRUGS-EO14059], [SDNT], [SDNTK], or [TCO] are 
parties to the transaction will result in an additional 15 license 
applications being submitted to BIS annually.

III. Consolidation of the SDN-Related End-User Controls Under the EAR

A. Increasing Use and Expansion of End-User Controls

    The increasing use of end-use and end-user controls under the EAR 
has led to an expansion of the number of sections under part 744, 
``Control Policy: End User and End-Use Based.'' For example, there are 
five sections similarly structured in part 744 that prior to this final 
rule imposed restrictions on certain persons designated on the SDN 
List. This rule simplifies part 744 by combining these sections into a 
single section that will specify the requirements under the EAR and by 
adding the eleven new SDN identifiers described above under section II 
to the same consolidated section. This streamlining and restructuring 
will reduce the compliance burden on parties because it will be easier 
to review one consolidated SDN-related section instead of fourteen 
separate SDN-related sections.
    This final rule removes and reserves Sec.  744.13, relating to 
persons identified on the SDN List with the [SDT] identifier, which 
OFAC no longer uses. The now-obsolete [SDT] restrictions in Sec.  
744.13 are related to E.O. 12947 of January 23, 1995, which was revoked 
on September 9, 2019, by E.O. 13886. E.O. 13886 also modified E.O. 
13224, which underlies the Global Terrorism Sanctions Regulations (31 
CFR part 594) referenced in Sec.  744.12. The existing [SDT] SDNs were 
re-designated as [SDGT] SDNs upon E.O. 12947's revocation. This final 
rule also does not include the restrictions related to SDNs with the 
[IRAQ2] identifier under Sec.  744.18 as part of the consolidation 
under revised Sec.  744.8 because the vast majority of these natural 
persons or entities are either dead or no longer in existence, and they 
remain designated as SDNs primarily for purposes of blocking financial 
assets. Therefore, these additional EAR requirements are no longer 
needed.

B. Consolidation of EAR Controls Involving Items Destined for Certain 
Persons Designated on the SDN List

1. Overview of the Consolidated Controls
    In part 744, this final rule removes and reserves Sec. Sec.  
744.12, 744.13, 744.14, and 744.18. For Sec. Sec.  744.12 and 744.14, 
this final rule adds the substance of these controls to the revised 
Sec.  744.8. This final rule does not add the controls under Sec.  
744.13 or under Sec.  744.18 for the reasons described above under 
section III.A.
    In Sec.  744.8, this final rule revises this section, including the 
heading, to reflect the consolidation of Sec. Sec.  744.12 and 744.14 
therein. This final rule additionally makes certain clarifying changes 
to Sec.  744.8, including clarifying that the specified EAR 
requirements apply to transfers (in-country) and that OFAC general 
licenses remain available for entities that are otherwise subject to 
these license requirements under Sec.  744.8.
    Also, in Sec.  744.8, this rule expands the end-user controls under 
part 744 to extend the controls to transactions featuring as a party to 
the transaction a person designated on the SDN List with the 
identifiers [BELARUS], [BELARUS-EO14038], [RUSSIA-EO14024], [UKRAINE-
EO13660], [UKRAINE-EO13661], [UKRAINE-EO13662], or [UKRAINE-EO13685] as 
described under section II.A, and with the identifiers [ILLICIT DRUGS-
EO14059], [SDNT], [SDNTK], or [TCO] as described under section II.B of 
this final rule.
2. Comparison of the Original and Consolidated EAR Controls for SDNs 
Under Part 744
    The EAR imposes license requirements, license review policies, and 
restrictions on the use of license exceptions under certain sections of 
part

[[Page 20111]]

744 of the EAR for transactions featuring as a party to the transaction 
certain persons designated on the SDN List with specified identifiers, 
as described in section III.B.1.
    Table 1 identifies these EAR restrictions prior to this final rule 
and the corresponding EAR section for these end-user requirements under 
Sec.  744.8, as revised. Because of the number of sections this final 
rule removes and consolidates under part 744, BIS includes Table 1 to 
assist the exporting community's understanding of these changes.
    Table 2 identifies the eleven new SDN List identifiers ([BELARUS], 
[ILLICIT DRUGS-EO14059], [RUSSIA-EO14024], [SDNT], [SDNTK], [TCO], 
[UKRAINE-EO13660], [UKRAINE-EO13661], [UKRAINE-EO13662], and [UKRAINE-
EO13685]) that this final rule adds to the end-user requirements under 
part 744 of the EAR. BIS includes Table 2 to assist the exporting 
community's understanding of these changes, including specifying the 
requirements in place prior to this final rule and the new and expanded 
requirements under this final rule.

  Table 1--Existing SDN List Identifiers That Require a License for All Items Subject to the EAR That Are Being
                   Consolidated Into Sec.   744.8 or Are Otherwise Being Removed From the EAR
----------------------------------------------------------------------------------------------------------------
                                                                               EAR section
      Program identifier         Sanctions program     OFAC sanctions list    prior to this   New EAR section in
                                                                               final rule      this final rule
----------------------------------------------------------------------------------------------------------------
                                                Terrorism-related
----------------------------------------------------------------------------------------------------------------
[FTO].........................  Foreign Terrorist    SDN                      Sec.   744.14  Sec.   744.8.
                                 Organizations
                                 Sanctions
                                 Regulations, 31
                                 CFR part 597.
[SDGT]........................  Global Terrorism     SDN                      Sec.   744.12  Sec.   744.8.
                                 Sanctions
                                 Regulations, 31
                                 CFR part 594.
* [SDT].......................  Terrorism            N/A                      Sec.   744.13  N/A, because this
                                 Regulations, 31                                              identifier is no
                                 CFR part 595.                                                longer used.
----------------------------------------------------------------------------------------------------------------
                                                   WMD related
----------------------------------------------------------------------------------------------------------------
[NPWMD].......................  Weapons of Mass      SDN                       Sec.   744.8  Sec.   744.8.
                                 Destruction
                                 Proliferators
                                 Sanctions
                                 Regulations, 31
                                 CFR part 544.
----------------------------------------------------------------------------------------------------------------
                                                  Iraq related
----------------------------------------------------------------------------------------------------------------
* [IRAQ2].....................  E.O. 13315; E.O.     SDN                      Sec.   744.18  N/A, because the
                                 13350.                                                       vast majority of
                                                                                              these persons or
                                                                                              entities are
                                                                                              either dead or
                                                                                              otherwise no
                                                                                              longer in
                                                                                              existence.
----------------------------------------------------------------------------------------------------------------
* Denotes SDN List identifiers that are being removed from part 744 license requirements in this final rule.

    Some of the SDN List identifiers in Table 2 are new to the EAR and 
others were previously subject to EAR license requirements or other 
restrictions that are being expanded in this final rule with the 
additions of these SDN List identifiers to Sec.  744.8.

                               Table 2--SDN List Identifiers Added to Sec.   744.8
----------------------------------------------------------------------------------------------------------------
                                                                                                      New EAR
                                                                                  EAR section       section in
         Program identifier           Sanctions program  OFAC  sanctions list    prior to this      this final
                                                                                   final rule          rule
----------------------------------------------------------------------------------------------------------------
                                     Related to Russia's invasion of Ukraine
----------------------------------------------------------------------------------------------------------------
[BELARUS]...........................  31 CFR part 548..  SDN                   Sec.   746.10,       Sec.   744.8
                                                                                which required a
                                                                                license for
                                                                                `luxury goods'
                                                                                identified in
                                                                                supplement no. 5
                                                                                to part 746.
[BELARUS-EO14038]...................  31 CFR part 548..  SDN                   Sec.   746.10,       Sec.   744.8
                                                                                which required a
                                                                                license for
                                                                                `luxury goods'
                                                                                identified in
                                                                                supplement no. 5
                                                                                to part 746.
[RUSSIA-EO14024]....................  Russian Harmful    SDN                   Sec.   746.10,       Sec.   744.8
                                       Foreign                                  which required a
                                       Activities                               license for
                                       Sanctions                                `luxury goods'
                                       Regulations, 31                          identified in
                                       CFR part 587;                            supplement no. 5
                                       E.O. 14024.                              to part 746.
[UKRAINE-EO13660]...................  31 CFR part 589..  SDN                   Sec.   746.10,       Sec.   744.8
                                                                                which required a
                                                                                license for
                                                                                `luxury goods'
                                                                                identified in
                                                                                supplement no. 5
                                                                                to part 746.
[UKRAINE-EO13661]...................  31 CFR part 589..  SDN                   Sec.   746.10,       Sec.   744.8
                                                                                which required a
                                                                                license for
                                                                                `luxury goods'
                                                                                identified in
                                                                                supplement no. 5
                                                                                to part 746.
[UKRAINE-EO13662]...................  31 CFR part 589..  SDN                   Sec.   746.10,       Sec.   744.8
                                                                                which required a
                                                                                license for
                                                                                `luxury goods'
                                                                                identified in
                                                                                supplement no. 5
                                                                                to part 746.

[[Page 20112]]

 
[UKRAINE-EO13685]...................  31 CFR part 589..  SDN                   Sec.   746.10,       Sec.   744.8
                                                                                which required a
                                                                                license for
                                                                                `luxury goods'
                                                                                identified in
                                                                                supplement no. 5
                                                                                to part 746.
----------------------------------------------------------------------------------------------------------------
                           Related to narcotics trafficking or other criminal networks
----------------------------------------------------------------------------------------------------------------
[ILLICIT DRUGS-EO14059].............  31 CFR part 599..  SDN                   N/A (new SDN List-   Sec.   744.8
                                                                                related
                                                                                identifier).
[SDNT]..............................  Narcotics          SDN                   Sec.                 Sec.   744.8
                                       Trafficking                              740.2(a)(22),
                                       Sanctions                                which restricted
                                       Regulations, 31                          the use of
                                       CFR part 536.                            license
                                                                                exceptions for
                                                                                0x5zz items, but
                                                                                did not impose
                                                                                additional
                                                                                license
                                                                                requirements for
                                                                                these persons.
                                                                                This final rule
                                                                                removes
                                                                                paragraph
                                                                                (a)(22) because
                                                                                it will be
                                                                                addressed under
                                                                                Sec.   744.8.
[SDNTK].............................  Foreign Narcotics  SDN                   Sec.                 Sec.   744.8
                                       Kingpin                                  740.2(a)(22),
                                       Sanctions                                which restricted
                                       Regulations, 31                          the use of
                                       CFR part 598.                            license
                                                                                exceptions for
                                                                                0x5zz items but
                                                                                did not impose
                                                                                additional
                                                                                license
                                                                                requirements for
                                                                                these persons.
                                                                                This final rule
                                                                                removes
                                                                                paragraph
                                                                                (a)(22) because
                                                                                it will be
                                                                                addressed under
                                                                                Sec.   744.8.
[TCO]...............................  Transnational      SDN                   N/A (new SDN List-   Sec.   744.8
                                       Criminal                                 related
                                       Organizations                            identifier).
                                       Sanctions
                                       Regulations, 31
                                       CFR part 590;
                                       Executive Order
                                       13581.
----------------------------------------------------------------------------------------------------------------

IV. Removal of Two End-User Control Sections Under the EAR

    Section 744.11 (License requirements that apply to entities acting 
or at significant risk of acting contrary to the national security or 
foreign policy interests of the United States), provides a basis for 
BIS to impose license requirements by adding persons to the Entity List 
who have been involved, are involved, or pose a significant risk of 
being or becoming involved in activities that are contrary to the 
national security or foreign policy interests of the United States. 
Other sections of parts 744 (e.g., Sec.  744.3, relating to activities 
of concern involving missile technology) and 746 are also used to add 
persons to the Entity List. The substantive criteria set forth in two 
sections of part 744, Sec. Sec.  744.10 (Restrictions on certain 
entities in Russia) and 744.20 (License requirements that apply to 
certain sanctioned entities), are duplicative of Sec.  744.11 and/or 
other provisions in parts 744 and 746), which provide sufficient 
authority to add to the Entity List persons meeting the criteria set 
forth in those two sections. Therefore, this final rule removes and 
reserves Sec. Sec.  744.10 and 744.20.
    This final rule will reduce by two the number of sections that 
exporters, reexports, and transferors will need to review in part 744. 
Taking into account the additional four sections that this final rule 
removes as part of the consolidation of the SDN restrictions under 
Sec.  744.8, as described under section III above, as well as the 
removal of the outdated SDN-related sections Sec. Sec.  744.13 and 
744.18, these changes will result in the removal of a total of six 
sections from part 744, making the end-user controls under part 744 
simpler (thereby facilitating compliance) and more effective while 
continuing to serve to protect and advance U.S. national security and 
foreign policy interests.

V. Amendments to the EAR

    In Sec.  740.2, this final rule removes and reserves paragraph 
(a)(22) from the EAR because its restrictions on certain SDNs have been 
moved to the broader end-user restrictions under Sec.  744.8.
    In Sec.  744.1, this final rule revises paragraph (a)(1) 
(Introduction), to remove references to Sec. Sec.  744.12, 744.13, 
744.14, and 744.18, and makes changes to the reference to Sec.  744.8 
to reflect that this section will now be the single section in part 744 
that specifies end-user license requirements for export, reexport, and 
transfer (in-country) transactions involving certain SDNs. This final 
rule also removes the sentences referencing Sec. Sec.  744.18 and 
744.20, which are simultaneously being removed from the EAR. As a 
conforming change, this final rule revises the sentence that references 
Sec.  744.7 to add the term ``transfer (in-country)'' for consistency 
with the requirements in Sec.  744.7. For clarification purposes, this 
final rule revises the section that references Sec.  744.19 to add the 
term ``transfer (in-country).'' In the sentence that specifies that 
these sections of part 744 include license review policies for export 
license applications submitted as required by these sections, this 
final rule adds the phrase ``reexport, and in-country transfer,'' 
because the license requirements of part 744 extend to reexports and 
transfers (in-country). In the sentence that refers to Sec.  744.21, 
this final rule makes updates for consistency with the existing 
requirements under Sec.  744.21 for Russia and Belarus, which are 
different than those for the other countries identified in Sec.  
744.21.
    In Sec.  744.7(b)(2) (Exports to U.S. or Canadian Airline's 
Installation or Agent), this final rule adds the phrase ``reexports, 
and transfers (in-country)'' for clarity. This addition is consistent 
with the agency's longstanding position that this paragraph is 
available for reexports and transfers (in-country). In Sec.  744.8 
(Restrictions on exports and reexports to persons designated pursuant 
to E.O. 13382--blocking property of weapons of mass destruction 
proliferators and their supporters), this final rule revises this 
section heading to now read as ``Restrictions on exports, reexports, 
and transfers (in-country) when certain persons designated on the List 
of Specially Designated Nationals and Blocked Persons (SDN List) are a 
party to the transaction'' to reflect the broadened scope of this 
revised section.
    Paragraph (a)(1) (Scope) defines the scope of the revised Sec.  
744.8. The final rule revises Sec.  744.8 to impose EAR license 
requirements, specify license

[[Page 20113]]

review policies, and set forth restrictions on the use of license 
exceptions for exports, reexports, and transfers (in-country) when a 
person who is designated on the SDN List with any of the following 
identifiers is a party to the transaction as described in Sec.  
748.5(c) through (f): [BELARUS], [BELARUS-EO14038], [RUSSIA-EO14024], 
[UKRAINE-EO13660], [UKRAINE-EO13661], [UKRAINE-EO13662], [UKRAINE-
EO13685], [ILLICIT DRUGS-EO14059], [SDNT], [SDNTK], and [TCO]. 
Paragraph (a)(1) will also include a sentence specifying that these 
persons are set forth in appendix A to 31 CFR chapter V and on OFAC's 
website at https://www.treas.gov/sdn to assist exporters, reexporters, 
and transferors in identifying these persons. This final rule adds a 
new note 1 to paragraph (a)(1) to include a cross reference to direct 
the public to the OFAC website for Program Tag Definitions for OFAC 
Sanctions Lists for additional background rather than carrying over the 
background information from the underlying part 744 SDN-related 
sections.
    Paragraph (a)(2) specifies the relationship between BIS and OFAC 
for these part 744 requirements specified under Sec.  744.8. Paragraph 
(a)(2) clarifies that these EAR controls supplement and strengthen the 
sanctions that are imposed by OFAC on these SDNs to better ensure that 
U.S. national security and foreign policy interests are protected in 
the case of export, reexport, and transfer (in-country) transactions 
involving items subject to the EAR. Paragraph (a)(2) includes a 
sentence identifying the most likely scenarios in which the OFAC 
regulations generally would not apply but the EAR controls would. This 
final rule also includes a sentence at the end of paragraph (a)(2) to 
specify that in order to avoid imposing a dual licensing requirement, 
the EAR authorization requirements specified in this section do not 
require a separate EAR authorization if the activities are authorized 
under an OFAC specific or general license or are exempted under OFAC's 
regulations.
    This final rule adds one note to paragraph (a). New note 2 
clarifies that the Entity List in supplement no. 4 to part 744 includes 
certain persons that have also been designated on the SDN List. This 
note includes a cross reference to Sec.  744.11 and supplement no. 4 to 
part 744 for requirements and related license review policies for these 
entities, which take precedence over those set forth in Sec.  744.8. 
BIS also clarifies in new note 1 that BIS requires an EAR authorization 
as specified in the license requirement column on the Entity List for 
these persons regardless of whether the export, reexport, or transfer 
(in-country) is authorized under an OFAC specific or general license.
    In Sec.  744.8(b) (License requirements), this final rule specifies 
that unless the export, reexport, or transfer (in-country) is 
authorized under an OFAC specific or general license or exempt under 
OFAC's regulations, a license is required under the EAR for the export, 
reexport, or transfer (in-country) of any item ``subject to the EAR'' 
when a person who is designated on OFAC's SDN List with any of the 
following identifiers is a party to the transaction as described in 
Sec.  748.5(c) through (f): [BELARUS], [BELARUS-EO14038], [RUSSIA-
EO14024], [UKRAINE-EO13660], [UKRAINE-EO13661], [UKRAINE-EO13662], 
[UKRAINE-EO13685], [ILLICIT DRUGS-EO14059], [SDNT], [SDNTK], and [TCO]. 
This rule also adds one sentence at the end of paragraph (b) to specify 
that a BIS license is not required for transactions described in this 
paragraph that would have otherwise met all of the terms and conditions 
of an OFAC general license if the transactions had been subject to OFAC 
jurisdiction.
    In Sec.  744.8(c) (License exceptions), this final rule specifies 
that no license exceptions may overcome the license requirements in 
this section, except in the case of entities that are also listed on 
the Entity List in supplement no. 4 to part 744 and for which certain 
license exceptions are available. In such circumstances, the specified 
license exceptions may overcome the license requirements of this 
section and supplement no. 4 to part 744 that would otherwise apply.
    In Sec.  744.8(d) (License review policy), this final rule 
specifies that applications for licenses required by this section will 
be subject to a presumption of denial review policy, except when note 1 
to paragraph (a) is applicable. When note 1 to paragraph (a)(1) is 
applicable, the license review policy under the Entity List entry for 
that person would take precedence. This final rule also includes a 
cross reference in paragraph (d) to direct exporters, reexporters, and 
transferors to consult OFAC concerning transactions subject to OFAC 
licensing requirements.
    In Sec.  744.8(e) (Violations), this final rule includes, in 
streamlined form, information included prior to this final rule 
regarding violations of the EAR. Specifically, paragraph (e)(1) states 
that any export, reexport, or transfer (in-country) by a U.S. person of 
any item subject both to the EAR and OFAC's regulations and not 
authorized by OFAC when a person identified in paragraph (a)(1) is a 
party to the transaction as defined in Sec.  748.5(c) through (f) 
constitutes a violation of the EAR. This final rule also adds one 
sentence to clarify that this paragraph does not apply to entities 
identified under both this section and on the Entity List in supplement 
no. 4 to part 744. EAR violations involving entities identified under 
both this section and the Entity List, will be addressed pursuant to 
Sec. Sec.  744.11 and 744.16.
    This final rule adds paragraph (e)(2) to specify that any export, 
reexport, or transfer (in-country) by a U.S. person of any item subject 
to the EAR that is not subject to OFAC's regulations and not authorized 
by BIS when a person identified in paragraph (a)(1) is a party to the 
transaction as defined in Sec.  748.5(c) through (f) constitutes a 
violation of the EAR. Paragraph (e)(2) also specifies that any export 
from abroad, reexport, or transfer (in-country) by a non-U.S. person of 
any item subject to the EAR and not authorized by BIS when a person 
identified in paragraph (a)(1) is a party to the transaction as defined 
in Sec.  748.5(c) through (f) constitutes a violation of the EAR.
    This final rule also includes a note 3 to Sec.  744.8 to specify 
that this section does not implement, construe, or limit the scope of 
any criminal statute, including but not limited to 18 U.S.C. 
2339B(a)(1) and 2339A, and does not excuse any person from complying 
with any criminal statute, including but not limited to 18 U.S.C. 
2339B(a)(1) and 18 U.S.C. 2339A. This note is included for consistency 
with previous SDN-related restrictions under part 744 of the EAR.
    In part 744, this final rule removes and reserves Sec. Sec.  744.12 
and 744.14 as conforming changes to the consolidation under Sec.  744.8 
of the requirements previously specified in those sections. Also in 
part 744, this final rule removes and reserves Sec. Sec.  744.10, 
744.13, 744.18, and 744.20 because these sections are no longer needed.
    In Sec.  746.10 (`Luxury goods' sanctions against Russia and 
Belarus and Russian and Belarusian oligarchs and malign actors), this 
final rule revises paragraph (a)(2) to remove the license requirement 
and include a cross reference to Sec.  744.8 of the EAR for additional 
license requirements for persons designated on OFAC's SDN List with the 
identifier [BELARUS-EO14038], [BELARUS], [RUSSIA-EO14024], [UKRAINE-
EO13660], [UKRAINE-EO13661], [UKRAINE-EO13662], or [UKRAINE-EO13685]. 
The license requirement under Sec.  744.8 is for all items subject to 
the EAR, which includes all `luxury goods' identified in supplement no. 
5 to part 746. This rule adds to Sec.  746.10 a

[[Page 20114]]

cross reference to the expanded license requirements under Sec.  744.8 
to alert exporters, reexporters, and transferors to the fact that 
persons with these SDN identifiers remain subject to a license 
requirement (expanded in scope by this rule) under Sec.  744.8.

Savings Clause

    For the changes being made in this final rule, shipments of items 
removed from eligibility for a License Exception or export, reexport, 
or transfer (in-country) without a license (NLR) as a result of this 
regulatory action that were en route aboard a carrier to a port of 
export, reexport, or transfer (in-country), on March 21, 2024, pursuant 
to actual orders for export, reexport, or transfer (in-country) to or 
within a foreign destination, may proceed to that destination under the 
previous eligibility for a License Exception or export, reexport, or 
transfer (in-country) without a license (NLR) provided the export, 
reexport, or transfer (in-country) is completed no later than on April 
22, 2024.

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) (codified, as 
amended, at 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.

Rulemaking Requirements

    1. BIS has examined the impact of this rule as required by 
Executive Orders 12866, 13563, and 14094, which 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 (e.g., potential economic, environmental, public, 
health, and safety effects, distributive impacts, and equity). This 
final rule is considered a ``significant regulatory action'' under sec. 
3(f) of E.O. 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 the following OMB-approved collections of information subject 
to the PRA: 0694-0088, ``Multi-Purpose Application,'' which carries a 
burden hour estimate of 29.6 minutes for a manual or electronic 
submission; 0694-0096 ``Five Year Records Retention Period,'' which 
carries a burden hour estimate of less than one minute; and 0607-0152 
``Automated Export System (AES) Program,'' which carries a burden hour 
estimate of three minutes per electronic submission. This rule changes 
the respondent burden under these control numbers by increasing the 
estimated number of submissions by twenty, which is not expected to 
exceed the current approved estimates.
    3. This rule does not contain policies with federalism implications 
as that term is defined in E.O. 13132.
    4. Pursuant to section 1762 of ECRA (50 U.S.C. 4821), this action 
is exempt from the Administrative Procedure Act (APA) (5 U.S.C. 553) 
requirements for notice of proposed rulemaking, opportunity for public 
participation, and delay in effective date. While section 1762 of ECRA 
provides sufficient authority for such an exemption, this action is 
also independently exempt from these APA requirements because it 
involves a military or foreign affairs function of the United States (5 
U.S.C. 553(a)(1)).
    5. Because neither the Administrative Procedure Act nor any other 
law requires that notice of proposed rulemaking and an opportunity for 
public comment be given for this rule, the analytical requirements of 
the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not 
applicable. Accordingly, no Final Regulatory Flexibility Analysis is 
required and none has been prepared.

List of Subjects

15 CFR Part 740

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

15 CFR Part 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

15 CFR Part 746

    Exports, Reporting and recordkeeping requirements.

    For the reasons stated in the preamble, parts 740, 744 and 746 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 continues 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. 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.


Sec.  740.2  [Amended]

0
2. Section 740.2 is amended by removing and reserving paragraph 
(a)(22).

PART 744--END-USE AND END-USER CONTROLS

0
3. The authority citation for 15 CFR part 744 continues 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, 2022, 87 FR 57569 (September 21, 202); Notice of 
November 8, 2022, 87 FR 68015, 3 CFR, 2022 Comp., p. 563; Notice of 
September 7, 2023, 88 FR 62439 (September 11, 2023).


0
4. Section 744.1 is amended by revising paragraph (a)(1) to read as 
follows:


Sec.  744.1   General provisions.

    (a)(1) Introduction. In this part, references to the EAR are 
references to 15 CFR chapter VII, subchapter C. This part contains 
prohibitions against exports, reexports, and selected transfers to 
certain end users and end uses as introduced under General Prohibitions 
Five (End use/End users) and Nine (Orders, Terms, and Conditions), 
unless authorized by BIS. Sections 744.2, 744.3, and 744.4 prohibit 
exports, reexports, and transfers (in-country) of items subject to the 
EAR to defined nuclear, missile, and chemical and biological weapons 
proliferation activities. Section 744.5 prohibits exports, reexports, 
and transfers (in-country) of items subject to the EAR to defined 
nuclear maritime end-uses. Consistent with General Prohibition Seven 
(Support of Proliferation Activities and certain Military-Intelligence 
End Uses and End Users (``U.S. person'' activities)), Sec.  744.6 
prohibits specific activities by U.S. persons in support of certain 
nuclear, missile, chemical and biological weapons end uses, and whole 
plants for chemical weapons precursors, as well as certain military-
intelligence end uses and military-intelligence end users. Section 
744.7 prohibits exports, reexports, and transfers (in-country) of 
certain items for certain aircraft and

[[Page 20115]]

vessels. Section 744.8 prohibits exports, reexports, and transfers (in-
country) without authorization when a person designated on the list of 
Specially Designated Nationals and Blocked Persons (SDN List) pursuant 
to certain specified sanctions programs is a party to the transaction. 
Section 744.9 sets forth restrictions on exports, reexports, and 
transfers (in-country) of certain cameras, systems, or related 
components. Section 744.11 imposes license requirements, to the extent 
specified in supplement no. 4 to this part, on entities listed in 
supplement no. 4 to this part for activities contrary to the national 
security or foreign policy interests of the United States. Section 
744.15 sets forth the conditions for exports, reexports, and transfers 
(in-country) to persons listed on the Unverified List (UVL) in 
supplement no. 6 to this part, the criteria for revising the UVL, as 
well as procedures for requesting removal or modification of a listing 
on the UVL. Section 744.16 sets forth the license requirements, 
policies and procedures for the Entity List. Section 744.17 sets forth 
restrictions on exports, reexports, and transfers (in-country) of 
microprocessors and associated ``software'' and ``technology'' for 
military end uses and to military end users. Section 744.19 sets forth 
BIS's licensing policy for applications for export, reexport, and 
transfer (in-country) when a party to the transaction is an entity that 
has been sanctioned pursuant to any of three specified statutes that 
require certain license applications to be denied. In addition, these 
sections include license review standards for export, reexport, and in-
country transfer license applications submitted as required by these 
sections. It should also be noted that part 764 of the EAR prohibits 
exports, reexports, and certain transfers of items subject to the EAR 
to denied parties. Section 744.21 imposes restrictions for exports, 
reexports, and transfers (in-country) of item subject to the EAR listed 
in supplement no. 2 to this part for a military end use or military end 
user in Burma, Cambodia, the People's Republic of China (PRC or China), 
Nicaragua, or Venezuela and for a Burmese, Cambodian, Chinese, 
Nicaraguan, or Venezuelan military end user if identified in supplement 
no. 7 to this part. Section 744.21 also imposes restrictions for 
exports, reexports, and transfers (in-country) for all items subject to 
the EAR for a military end use or military end user in Belarus or 
Russia and for a Belarusian or Russian military end user wherever 
located if identified on supplement no. 4 to this part. Section 744.22 
imposes restrictions on exports, reexports, and transfers (in-country) 
for a military-intelligence end use or military-intelligence end user 
in Burma, China, Russia, or Venezuela; or for a country listed in 
Country Groups E:1 or E:2 (see supplement no. 1 to part 740 of the 
EAR). Section 744.23 sets forth restrictions on exports, reexports, and 
transfers (in-country) for certain ``supercomputer'' and semiconductor 
manufacturing end use.
* * * * *

0
5. Section 744.7 is amended by revising the paragraph (b)(2) heading to 
read as follows:


Sec.  744.7   Restrictions on certain exports to and for the use of 
certain foreign vessels or aircraft.

* * * * *
    (b) * * *
    (2) Exports, reexports, and transfers (in-country) to U.S. or 
Canadian Airline's Installation or Agent. * * *
* * * * *

0
6. Section 744.8 is revised to read as follows:


Sec.  744.8  Restrictions on exports, reexports, and transfers (in-
country) when certain persons designated on the list of Specially 
Designated Nationals and Blocked Persons (SDN List) are a party to the 
transaction.

    (a) Scope. (1) In addition to any other EAR license requirements 
that may be applicable, this section imposes EAR license requirements, 
license review policies, and restrictions on the use of license 
exceptions for exports, reexports, and transfers (in-country) when a 
person who is designated on the Department of the Treasury, Office of 
Foreign Assets Control's (OFAC) List of Specially Designated Nationals 
and Blocked Persons (SDN List) with any of the following identifiers is 
a party to the transaction, as described in Sec.  748.5(c) through (f):
    (i) Related to Russia's invasion of Ukraine.
    (A) [BELARUS-EO14038];
    (B) [BELARUS];
    (C) [RUSSIA-EO14024];
    (D) [UKRAINE-EO13660];
    (E) [UKRAINE-EO13661];
    (F) [UKRAINE-EO13662]; or
    (G) [UKRAINE-EO13685].
    (ii) Terrorism-related.
    (A) [FTO]; or
    (B) [SDGT].
    (iii) WMD-related.
    (A) [NPWMD].
    (B) [Reserved]
    (iv) Related to narcotics trafficking or other criminal networks.
    (A) [ILLICIT DRUGS-EO14059];
    (B) [SDNT];
    (C) [SDNTK]; or
    (D) [TCO].

    Note 1 to paragraph (a)(1): The names of such designations are 
published in the Federal Register and incorporated into the SDN 
List, as set forth in appendix A to 31 CFR chapter V and on OFAC's 
website at https://www.treas.gov/sdn. See Program Tag Definitions 
for OFAC Sanctions Lists for additional information: https://ofac.treasury.gov/specially-designated-nationals-list-sdn-list/program-tag-definitions-for-ofac-sanctions-lists.

    (2) These EAR controls supplement and strengthen the sanctions that 
are imposed by OFAC on these SDNs to better ensure that U.S. national 
security and foreign policy interests are protected. Specifically, this 
section imposes controls on exports, reexports, or transfers (in-
country) of items subject to the EAR where the OFAC regulations are not 
applicable, such as in certain situations involving deemed exports and 
deemed reexports, and reexports and transfers (in-country) not 
involving the U.S. financial system or otherwise involving U.S. 
persons. To avoid imposing a duplicative license requirement, the 
transactions specified in this section do not require separate EAR 
authorization if the transactions are authorized under an OFAC specific 
or general license or are exempted under OFAC's regulations.

    Note 2 to paragraph (a): The Entity List in supplement no. 4 to 
part 744 includes certain persons that have also been designated 
with certain identifiers on the SDN List. See Sec.  744.11 and 
supplement no. 4 to part 744 for requirements, including license 
review policies, for these entities, which take precedence over the 
requirements in this Sec.  744.8. BIS requires an EAR authorization 
as specified in the license requirement column on the Entity List 
for export, reexport, and transfer (in-country) transactions 
involving items subject to the EAR in which these persons are 
parties to the transaction regardless of whether such transaction is 
authorized under an OFAC specific or general license or exempted 
under OFAC's regulations.

    (b) License requirements. Unless the export, reexport, or transfer 
(in-country) is authorized under an OFAC specific or general license or 
exempted under OFAC's regulations, a license is required under the EAR 
for the export, reexport, or transfer (in-country) of any item 
``subject to the EAR'' when a person who is designated on OFAC's SDN 
List with any of the identifiers set forth in paragraph (a)(1) is a 
party to the transaction as described in Sec.  748.5(c) through (f). A 
Department of Commerce license is not required for transactions 
described in this paragraph (b) that would have otherwise met all of 
the terms and conditions of an OFAC

[[Page 20116]]

general license if the transactions had been subject to OFAC 
jurisdiction.
    (c) License exceptions. No license exceptions may overcome the 
license requirements in this section, except for entities that are also 
listed on the Entity List in supplement no. 4 to part 744 that have 
certain license exception eligibility, which is available to overcome 
the license requirements of this section and supplement no. 4 to part 
744 for that specific entity.
    (d) License review policy. Applications for licenses required by 
this section will be subject to a presumption of denial license review 
policy, except when note 1 to paragraph (a)(1) of this section is 
applicable and the license review policy specified on the Entity List 
in supplement no. 4 to part 744 is different, in which case the license 
review policy under the applicable Entity List entry for that person 
would govern. You should consult OFAC regarding transactions subject to 
licensing requirements under regulations maintained by OFAC.
    (e) Violations. (1) Any export, reexport, or transfer (in-country) 
by a U.S. person of any item subject to both the EAR and regulations 
maintained by OFAC in situations in which a person identified in 
paragraph (a)(1) is a party to the transaction as described in Sec.  
748.5(c) through (f) that is not authorized by OFAC constitutes a 
violation of the EAR. This paragraph does not apply to entities 
identified under both this section and the Entity List in supplement 
no. 4 to part 744. EAR violations involving entities identified under 
both this section and the Entity List will be addressed pursuant to 
Sec. Sec.  744.11 and 744.16.
    (2) Any export, reexport, or transfer (in-country) of any item 
subject to the EAR in which a person identified in paragraph (a)(1) is 
a party to the transaction as described in Sec.  748.5(c) through (f) 
and such transaction is not subject to regulations maintained by OFAC 
and not authorized by BIS constitutes a violation of the EAR.

    Note 3 to Sec.  744.8: This section does not implement, 
construe, or limit the scope of any criminal statute, including but 
not limited to 18 U.S.C. 2339B(a)(1) and 2339A, and does not excuse 
any person from complying with any criminal statute, including but 
not limited to 18 U.S.C. 2339B(a)(1) and 18 U.S.C. 2339A.


0
7. Sections 744.10, 744.12 through 744.14, 744.18, and 744.20 are 
removed and reserved.

PART 746--EMBARGOES AND OTHER SPECIAL CONTROLS

0
8. The authority citation for 15 CFR part 746 continues 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. 287c; Sec 1503, Pub. L. 108-11, 117 
Stat. 559; 22 U.S.C. 2151 note; 22 U.S.C. 6004; 22 U.S.C. 7201 et 
seq.; 22 U.S.C. 7210; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., p. 
614; E.O. 12918, 59 FR 28205, 3 CFR, 1994 Comp., p. 899; E.O. 13222, 
66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13338, 69 FR 26751, 3 
CFR, 2004 Comp., p 168; Presidential Determination 2003-23, 68 FR 
26459, 3 CFR, 2004 Comp., p. 320; Presidential Determination 2007-7, 
72 FR 1899, 3 CFR, 2006 Comp., p. 325; Notice of May 8, 2023, 88 FR 
30211 (May 10, 2023).


0
9. Section 746.10 is amended by:
0
a. Revising paragraph (a)(2);
0
b. Revising paragraph (a)(3) introductory text; and
0
c. Removing the final sentence of the paragraph (c) introductory text.
    The revisions read as follows:


Sec.  746.10  `Luxury goods' sanctions against Russia and Belarus and 
Russian and Belarusian oligarchs and malign actors.

    (a) * * *
    (2) Russian and Belarusian oligarch and malign actors. The license 
requirements under this section for persons designated on OFAC's SDN 
List with the identifier [BELARUS], [BELARUS-EO14038], [RUSSIA-E.O. 
14024], [UKRAINE-EO13660], [UKRAINE-EO13661], [UKRAINE-EO13662], or 
[UKRAINE-EO13685] were removed from this section on March 21, 2024, 
because a broader license requirement for all items subject to the EAR 
is required under Sec.  744.8 as of March 21, 2024, which includes all 
`luxury goods' under supplement no. 5 to part 746 and any other item 
subject to the EAR. See Sec.  744.8 of the EAR for license requirements 
for persons designated on OFAC's SDN List with the identifier 
[BELARUS], [BELARUS-EO14038], [RUSSIA-E.O. 14024], [UKRAINE-EO13660], 
[UKRAINE-EO13661], [UKRAINE-EO13662], or [UKRAINE-EO13685].
    (3) Exclusion from scope of U.S.-origin controlled content under 
paragraph (a)(1) of this section. For purposes of determining U.S.-
origin controlled content under supplement no. 2 to part 734 of the EAR 
when making a de minimis calculation for reexports and exports from 
abroad to Russia or Belarus, the license requirements in paragraph 
(a)(1) of this section are not used to determine controlled U.S.-origin 
content in a foreign-made item, provided the criteria in paragraphs 
(a)(3)(i) and (ii) of this section are met:
* * * * *

Thea D. Rozman Kendler,
Assistant Secretary for Export Administration.
[FR Doc. 2024-06067 Filed 3-20-24; 8:45 am]
BILLING CODE 3510-33-P