Revisions to the Export Administration Regulations (EAR) To Make the Commerce Control List (CCL) Clearer

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 734, 738, 740, 742, 748, 750, 772, and 774

[Docket No. 110818512-3478-02]

RIN 0694-AF37

Revisions to the Export Administration Regulations (EAR) To Make the Commerce Control List (CCL) Clearer

AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Final rule.

SUMMARY:

This final rule implements changes that were proposed on November 29, 2012 in a proposed rule entitled

Revisions to the Export Administration Regulations (EAR) To Make the Commerce Control List (CCL) Clearer.

The changes in the November 29 proposed rule were informed by public comments received in response to an advance notice of proposed rulemaking entitled

Commerce Control List: Revising Descriptions of Items and Foreign Availability

published as part of the President's Export Control Reform (ECR) Initiative on December 9, 2010. This final rule implements changes that can be made to the CCL without requiring changes to multilateral export control regime guidelines or lists.

This final rule also makes conforming changes and minor clarifications as a result of the publication of two final rules implementing the Export Control Reform Initiative: the April 16, 2013 final rule entitled

Revisions to the Export Administration Regulations: Initial Implementation of Export Control Reform;

and the July 8, 2013 final rule entitled

Revisions to the Export Administration Regulations: Military Vehicles; Vessels of War; Submersible Vessels, Oceanographic Equipment; Related Items; and Auxiliary and Miscellaneous Items that the President Determines No Longer Warrant Control under the United States Munitions List.

Lastly, this final rule is making revisions to the EAR as a result of public comments received in response to the November 29 proposed rule and to a notice of inquiry (NOI) entitled

Request for Public Comments on Shipping Tolerances for Export Licenses Issued by the Bureau of Industry and Security (BIS),

that BIS published on July 5, 2012.

DATES:

Effective Date:

This rule is effective on October 15, 2013, except that amendatory instructions 25, 28, 31 and 35.c to Supplement No. 1 to part 774 are effective January 6, 2014.

FOR FURTHER INFORMATION CONTACT:

Timothy Mooney or Robert Monjay, Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-2440, Fax: (202) 482-3355, Email:

rpd2@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

This final rule implements changes proposed on November 29, 2012 in a proposed rule entitled

Revisions to the Export Administration Regulations (EAR) To Make the Commerce Control List (CCL) Clearer.

The changes in the November 29 proposed rule were also informed by public comments received in response to an advance notice of proposed rulemaking entitled

Commerce Control List: Revising Descriptions of Items and Foreign Availability

as part of the President's Export Control Reform (ECR) Initiative that was published by BIS on December 9, 2010 (75 FR 76664). The December 9 notice sought, among other things, public comments on how descriptions of items controlled on the Commerce Control List (CCL) could be made clearer.

Although the revisions proposed in the November 29 proposed rule originated with the ECR initiative, the November 29 proposed rule and this final rule are consistent with Executive Order 13563. Executive Order 13563 requires agencies to review their “existing significant regulations, and consider how best to promote retrospective analysis of rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.” In response to this requirement, on August 23, 2011, Commerce released a plan for the review of its regulations. This proposed rule was identified by the Department as part of its plan for the retrospective analysis of regulations and is being implemented today in final form with the publication of this final rule. The Department's plan may be found at:

http://open.commerce.gov/news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules.

This rule implements changes that can be made to the CCL without requiring a multilateral regime change. For certain changes BIS identified that would make the CCL clearer, but would require a multilateral export control regime change to implement, the U.S. Government is developing regime change proposals for consideration by the relevant multilateral export control regimes. BIS will implement those changes, if approved by the multilateral export control regimes, in separate rulemakings.

To better facilitate intelligibility of the provisions implemented by BIS, this final rule identifies new phrases or headings within double quotations. The EAR identifies terms defined in part 772 with double quotations as well. Not all the terms in double quotations in this final rule are defined in part 772. The additional double quotations around new phrases, headings, or commonly used words, are used in the Background section of this final rule to assist in the readability of the text.

The descriptions of the changes implemented in this final rule are organized under the four subject headings used in the November 29 proposed rule and two additional subject headings. The descriptions include summaries of the public comments received and BIS's responses to those comments. The fifth subject heading describes changes that are being implemented as a result of comments received in response to a notice of inquiry (NOI) that BIS published on July 5, 2012 (77 FR 39679), entitled

Request for Public Comments on Shipping Tolerances for Export Licenses Issued by the Bureau of Industry and Security (BIS).

The sixth subject heading describes clarifications to the final rule published on April 16, 2013 (78 FR 22660) entitled

Revisions to the Export Administration Regulations: Initial Implementation of Export Control Reform

(the April 16 (initial implementation) rule). The public comments BIS received in response to the notice of inquiry prompted BIS to include these changes in this final rule because they are not only responsive to the public comments, but they will also make the CCL clearer and easier to use.

The six headings are:

(1) Clarifications to existing CCL controls, including the use of the terms “parts” and “components” on the CCL;

(2) Changes to conform the CCL to the multilateral export control regime control lists and previous amendments to the EAR;

(3) Structural changes to improve the clarity of the CCL;

(4) Removal of fourteen Export Control Classification Numbers (ECCNs) subject to the exclusive jurisdiction of the Nuclear Regulatory Commission (NRC);

(5) Revisions to Shipping Tolerances and removal of all “Unit” paragraphs; and

(6) Clarifications to the April 16 (initial implementation) rule.

The public comment period for the November 29 proposed rule closed on January 28, 2013. BIS received 10 public comments in response. When referring to specific comments, BIS identifies those as Commenters No. 1 through No. 10. The comments, including the table for the Record of Public Comments, can be found on the BIS Web site at

http://efoia.bis.doc.gov/index.php/electronic-foia/index-of-documents.

Most commenters thought the cumulative impact of the November 29 proposed rule would be beneficial for exporters and would improve the clarity of the CCL. BIS did not accept some of the comments and addressed others in ways different than the recommendation. Commenter No. 7, for example, commended and fully supported the effort by BIS to modify the CCL in order to make all sections consistent and the CCL easier to read and interpret. Commenter No. 7 agreed with BIS that the cumulative impact of the proposed changes should improve clarity, and hence understanding, of the CCL. Commenter No. 7 expressed support for the rule, and noted that the increased ease of use of the CCL would especially benefit exporters of items that may transfer to the CCL as a result of Export Control Reform. Commenter No. 9 noted that the CCL contains a number of ambiguities and inconsistencies that require attention. Commenter No. 9 endorsed the recommendations specified in the November 29 proposed rule, asserting that the modifications, if implemented, will improve the overall clarity of the CCL. Commenter No. 3, however, was critical of BIS's proposal to remove fourteen NRC ECCNs. Commenter No. 8 objected to the proposed “parts” and “components” changes and questioned whether the changes in the November 29 rule were too extensive for industry to be able to review in a single proposed rule.

Some comments identified specific changes that needed to be made to achieve the objectives of certain proposed changes. Others identified formatting errors or typos in the November 29 rule. Some commenters also suggested additional changes that were not specifically proposed in the November 29 rule, either by specifically identifying additional changes or highlighting where additional review should be conducted under the CCL clean-up effort. BIS has incorporated some of these changes, for example the formatting errors and typos, although other changes may need to be addressed in subsequent reviews of the CCL. An effective control list is not static; therefore, although this final rule implements a large number of changes to improve the CCL, no single rule, including this final rule, can eliminate the need for review of the CCL to ensure that it is clear and the scope reflects the current national security and foreign policy interests of the United States.

Some comments addressed issues outside the scope of the November 29 proposed rule. BIS did not address these comments in this final rule, but it provides a brief overview of the issues raised by the commenters for transparency. Commenter No. 5 submitted comments that were submitted previously on July 23, 2012 in response to a BIS proposed rule dealing with personal protective equipment and the proposed “600 series” ECCN 1A613. This comment is not addressed in this final rule because it is outside the scope of the November 29 rule, but this comment is being evaluated along with other comments received in response to the June 7, 2012 proposed rule as BIS prepares the final rule for publication. Another comment received that was outside the scope of the November 29 proposed rule dealt with the proposed definition of “components” that was set forth in the proposed rule published on July 15, 2011 (76 FR 41958). BIS completed its review, responded to comments received on the definition of “components,” and published a definition of “components” in the April 16 (initial implementation) rule. Lastly, one commenter made a number of suggestions regarding the meaning and use of the term “specially designed” and regarding other design related terms on the CCL. These comments are outside the scope of the November 29 proposed rule. BIS proposed a definition of “specially designed” in a proposed rule published on June 19, 2012, and also an advance notice of proposed rulemaking published on the same day that requested comments on the feasibility of enumerating “specially designed” components on the CCL. BIS reviewed and responded to comments received on the definition of “specially designed” submitted in response to the June 19 proposed rule. A final definition of “specially designed” was published in the April 16 (initial implementation) rule. BIS is still evaluating where it may be feasible to remove the term “specially designed” from non-“600 series” ECCNs on the CCL.

(1) Clarifications to Existing CCL Controls, Including the Use of the Terms “parts” and “components” on the CCL

The majority of changes proposed in the November 29 rule and being implemented in this final rule amend the CCL without changing the scope of the controls. The bulk of the changes this final rule is making to the CCL are non-substantive and will provide additional regulatory guidance to people classifying items subject to the EAR. One proposed change from the November 29 rule that is being implemented in this final rule will clarify the scope of ECCNs by providing clearer definitions of the terms “part” and “component,” which is discussed below. However, this final rule does include changes that would affect the scope of one ECCN. Specifically, this final rule removes ECCN 8A918 and adds certain marine boilers to ECCN 8A992, where they would be controlled for AT and UN reasons.

BIS proposed in the November 29 proposed rule changes to align the regulations with the definitions of “part” and “component” included in a proposed rule published on July 15, 2011 (76 FR 41958) entitled “

Proposed Revisions to the Export Administration Regulations (EAR): Control of Items the President Determines No Longer Warrant Control Under the United States Munitions List (USML)”

(hereinafter “the July 15 (framework) rule”), which were made final in the April 16 (initial implementation) rule. The changes that are implemented in this final rule include adding additional references to “part” (although scaled back considerably compared to what was proposed in the November 29 proposed rule), and “component” in certain ECCNs to clarify that the scope of those ECCNs also extends to “parts” and “components” even if previously those ECCNs may have only referenced either “part” or “component,” but not both terms together. The proposed definitions of “part” and “component” were provided in the November 29 proposed rule as a reference, along with a discussion of the context for the need to make certain conforming changes. The November 29 proposed rule indicated that the conforming changes would not be published in final form until the revised definitions of “part” and “component” were published in final form, which occurred, as noted above in this paragraph, in the April 16 (initial implementation) rule that is effective on October 15, 2013. Because of the relationship between this final rule and the initial implementation rule, this final rule's effective date is coordinated to become effective on the same day as the initial implementation rule.

As was noted in the November 29 proposed rule, BIS is not attempting to add additional references to “parts” and “components” in this final rule that would change the scope of what the

affected ECCNs control. In the past, BIS had not drawn clear distinctions between what was a “part” or “component” because both terms were undefined on the CCL. Having newly defined terms for “part” and “component” makes the CCL clearer and allows for more nuanced controls to be developed, but making the necessary conforming changes to the current CCL control text to conform to those new definitions, while not changing the intended scope of those existing ECCNs is also an important part to the Export Control Reform effort. BIS encouraged the public to participate in this process by reviewing the proposed changes in this area included in the November 29 rule.

In the November 29 rule, BIS indicated that if, however, the public believes any of the proposed changes would change the present scope of the affected ECCNs, then the public should submit comments that identify such changes and explain how the changes would cause the ECCNs to deviate from their present scope. One commenter did submit comments that were highly critical of these changes and questioned BIS's assumptions, in particular whether such conforming changes would not change the scope of these ECCNs. BIS addresses this comment below in detail, including discussing the additional review conducted by BIS and the other agencies that reviewed this rule that led to a significant reduction in the number of ECCNs where “parts” are being added in this final rule. In addition, in the November 29 proposed rule, the public was encouraged to review the entire CCL to identify and comment on any other ECCN that uses the terms “parts” or “components” where additional changes may be warranted to conform to the intended scope of those ECCNs. Certain commenters conducted such analysis and made suggestions for additional changes that are addressed or implemented in this final rule. These public comments and additional reviews conducted by BIS and the other agencies helped to improve this final rule.

The following describes the changes included in this final rule, the comments received that pertained to changes proposed in the November 29 rule, and any additional changes that are being implemented in this final rule as a result of BIS's review of the comments and additional analysis conducted of the CCL.

The clarifying changes being implemented in this final rule are as follows:

(A) Revisions to ECCN Headings To Clarify Meaning

Revision to the headings of thirty-one ECCNs.

In Supplement No. 1 to part 774—The Commerce Control List, this final rule revises, to enhance clarity, the headings of the following thirty-one ECCNs: 0A018, 1A995, 1B018 1B115, 1C350, 1C355, 1C992, 2A291, 2A991, 2B005, 2B201, 2B109, 2B991, 2B992, 3B991, 3B992, 4A994, 5A991, 5A992, 5D992, 5E992, 6A997, 6A998, 6B995, 6D993, 7A103, 7A107, 8A992, 9A004, 9A106 and 9B991. This final rule also clarifies the relationship between the headings and the “items” paragraph in the List of Items Controlled section of these thirty-one ECCNs. For example, in certain ECCNs, the entries include an “items” paragraph, but the ECCN heading does not direct people to review the “items” paragraph. This rule will add the phrase “(see List of Items Controlled)” to these ECCN headings. For other ECCNs listed above, the heading includes the phrase “(see List of Items Controlled),” but the placement of the phrase is not correct in terms of what BIS intended to control in the ECCN. If the phrase appears at the end of the heading, then that means the “items” paragraph in the List of Items Controlled section is the exclusive, complete list of the items the ECCN controls. If, however, the phrase appears in the middle of the heading, then that means only that portion of the heading prior to the phrase “(see List of Items Controlled)” is specifically identified in the “items” paragraph in the List of Items Controlled section, and that the remaining part of the heading (i.e., the rest of the heading after the phrase “(see List of Items Controlled)”) is an exclusive, complete description.

The placement of the phrase “(see List of Items Controlled)” is important for “parts” and “components” referred to in ECCN headings. If “parts” and “components” references appear before the phrase, the entry only controls “parts” and “components” specifically identified in the “items” paragraph in the List of Items Controlled section. If, however, the phrase is in the middle of the heading and the reference to “parts” and “components” appears after the phrase—such as “and specially designed “parts” and “components” therefor”—that means the ECCN would control “specially designed” “parts” and “components” for any item identified in the “items” paragraph in the List of Items Controlled section. This rule does not address the definition of “specially designed,” which was published in the April 16 (initial implementation) rule, but rather the relationship between these headings and the “items” paragraph in each of these respective ECCNs.

Revisions to fourteen ECCNs.

In addition, this rule adds the phrase “as follows” to the headings of the following fourteen ECCNs: 0A981, 2B201, 5D991, 5D992, 5E992, 6A992, 6A994, 6A995, 6A997, 6A998, 6B995, 6C994, 6D993 and 9B991, to ensure consistency with the structure of other ECCNs on the CCL. The phrase “as follows” is used on some of the multilateral export control regime control lists, which is why the phrase appears on the CCL, including in some ECCNs that reflect controls applied unilaterally by the United States based on domestic foreign policy to conform to the structure of the regime-based ECCNs. The multilateral export control regimes do not use the phrase “(see List of Items Controlled),” but this phrase is used in many of the multilateral-based ECCNs on the CCL. BIS seeks greater consistency in how CCL headings are constructed, in particular how these two phrases are used in the ECCN headings. Commenter No. 8 to the November 29 proposed rule recommended, where the two phrases appear together at the end of the heading, that the use of “as follows” serves no purposes and therefore should be removed. Although BIS agrees there is redundancy in such cases, BIS desires to maintain consistency with the Wassenaar Arrangement, which uses the term “as follows” while at the same time using the CCL convention of directing the public to the “items” paragraph when needed. Thus, BIS is not accepting the recommendation in this comment, but will continue to consider whether additional changes should be made, including whether multilateral regime change proposals or discussions in this area may be warranted.

ECCN 1C011.

This final rule is removing the cross reference from the heading of 1C011 to 1C111 because this text is no longer needed as a result of the addition of Supplement No. 4 to Part 774—Commerce Control List Order of Review in the initial implementation rule. Under Step 5 of the new CCL Order of Review, if an item is not classified by a “600 series” ECCN, then starting from the beginning of the product group you should analyze each ECCN to determine whether any other ECCN in that product group describes the item. This new CCL Order of Review makes the relationship clear between these two ECCNs, so there is no need to qualify the heading of 1C011 with the phrase “other than those specified in 1C111.” Therefore, this final rule

removes those phrases from the heading of 1C011.

ECCN 1D993.

This rule revises the heading of 1D993 to remove the term “equipment” to be consistent with the definition of “equipment” added to the EAR in the April 16 (initial implementation) rule. This ECCN currently refers to equipment or materials, but the only ECCNs cross referenced in the heading are for controls on materials, so the term equipment is not needed in 1D993. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCNs 0D001, 3D980, 3E980, 4D980 and 4E980.

This rule revises the headings of ECCNs 0D001, 3D980, 3E980, 4D980 and 4E980, by removing the term “items” and adding the term “commodities” in its place. BIS makes this change because in the context of these five ECCN headings, the term “commodities” is more accurate and specific regarding the scope of these entries. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 2B998.

The heading of 2B998 uses the undefined term “units.” To add greater specificity regarding what the term “unit” is intended to cover in this ECCN, this rule modifies the heading by removing the term “units” and adding the term “circuit boards.” This change will clarify that “circuit boards” are the items covered under the heading of 2B998. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCNs 3A980 and 3A981.

This rule adds the term “therefor” immediately before the term “n.e.s.” to the headings of ECCNs 3A980 and 3A981. This rule makes this change to emphasize that these ECCNs refer only to components of the subject voice print equipment and polygraph equipment. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 9A004.

Commenter No. 7 suggested the term “specifically designed” should be replaced with “specially designed” on the CCL wherever it occurs. The November 29 proposed rule did not propose this change to ECCN 9A004. Commenter No. 7 noted that ECCN 9A004 still uses specifically designed “parts” and “components” as opposed to “specially designed.” For consistency this commenter suggested “specially designed” should be used all the time on the CCL. As part of the Export Control Reform Initiative, BIS will review the use of “specifically designed” on the CCL as it corresponds to the USML categories, and how those categories are revised during the USML-to-CCL regulatory process.

(B) Clarification of the Use of the Terms “parts” and “components” on the CCL

The July 15 (framework) rule included proposed definitions for the terms “part” and “component.” The April 16 (initial implementation) rule included a final definition for the terms “part” and “component.” Specifically, the initial implementation rule, and the July 15 (framework) proposed rule, defined “parts” as “any single unassembled element of a component, accessory, or attachment which is not normally subject to disassembly without the destruction or the impairment of design use. Examples include threaded fasteners (e.g., screws, bolts, nuts, nut plates, studs, inserts), other fasteners (e.g., clips, rivets, pins), common hardware (e.g., washers, spacers, insulators, grommets, bushings), springs and wire.”

The April 16 (initial implementation) rule, and the July 15 (framework) rule, defined “components” as an item that is useful only when used in conjunction with an “end item.” Note that components are also commonly referred to as assemblies. For purposes of this new definition that was added to the EAR on April 16, 2013, in the initial implementation final rule that becomes effective on October 15, 2013, an assembly and a component are the same. Additionally, there are now two types of “components”: “Major components” and “minor components.” A “major component” includes any assembled element which forms a portion of an “end item” without which the end item is inoperable. For example, for an automobile, components include the engine, transmission, and battery. If you do not have all those items, the automobile will not function, or function as effectively. A “minor component” includes any assembled element of a “major component.” Note also that “components” consist of “parts.” ' References in the CCL to “components” include both “major components” and “minor components.”

Another example for applying the definition of “component” in the automobile context would be a fuel pump and the engine. Under this additional example, the fuel pump is a minor component of an automobile, as it is an assembled element of a “major component,” the engine. While the car will not function without the fuel pump, it is not a “major component” because it is integrated into a “major component,” the engine.

The July 15 (framework) rule indicated BIS would review the use of these two terms on the CCL and would likely make clarifications to CCL entries to conform to the proposed definitions included in the July 15 (framework) rule under a separate rule. The November 29 proposed rule addressed the use of the terms “parts” and “components” on the CCL to ensure these terms were being used in a manner consistent with the final definitions included in the April 16 (initial implementation) rule. BIS received a variety of different comments on these proposed changes that are addressed here.

The terms “parts” and “components” sometimes have been used interchangeably in various ECCNs, which may have been the source of some confusion. The final definitions included in the initial implementation rule were developed to provide clear, distinct definitions for both these terms and other terms such as “end item,” “system,” “accessories,” and “attachments,” to align with the definitions of these terms in the International Traffic in Arms Regulations (ITAR). See 22 CFR § 121.8. Such distinctions are significant for purposes of determining whether an ECCN applies to an item.

If an ECCN does not include a control on “parts” or “components,” then that ECCN would not, by definition, apply to the export of any particular “parts” or “components.” However, as mentioned above, the terms “parts” and components” have sometimes been used interchangeably. Therefore, to ensure that once the definition of “part” and “component” are added to the EAR the scope of existing controls is not narrowed, the November 29 rule proposed adding additional references to “parts” or “components,” in particular for ECCNs that are based on the multilateral export control regime control lists. The November 29 rule took a cautious approach, possibly erring on the side of potential over control versus under control when making these conforming changes for “parts” and “components,” in particular for the addition of “parts” to entries that only identified components.

Under the current EAR, many of the ECCNs based on the multilateral control lists reference “components,” but not “parts.” For these entries where parts were not referenced, the U.S. Government had to take into account in drafting the November 29 rule how the U.S. Government has interpreted these ECCNs as well as how the other multilateral regime members have

interpreted these ECCNs to determine whether the intent of the U.S. Government and the other regime members was for these entries to include “parts.” In certain contexts BIS has determined the intent of the U.S. Government and the respective multilateral regimes is to also control “parts.” However, in other contexts after further review, BIS has determined the addition of “parts” is not needed, and therefore this final rule does not add references to “parts.” The Departments of State and Defense, along with other agencies that reviewed this final rule, assisted BIS in making these determinations. These determinations were focused on making sure that the conforming changes for “parts” and “components” being implemented in this final rule are consistent with past practice and would not result in a change in existing controls.

As noted in the November 29 rule, over the mid- to long-term, BIS will work with the other U.S. Government agencies involved in the multilateral regimes, in particular the Department of State as the lead representative to the multilateral export control regimes, to raise in the respective multilateral export control regimes whether certain ECCNs should be limited to “components” or “parts” or some other subset of “components,” such as major components or minor components.

Based on the public comments received, there appears to be some degree of disparate interpretation regarding whether some of these ECCNs are intended to also include “parts.” For example, Commenter No. 8 believes that in the vast majority of contexts, these ECCNs are not intended to reach “parts.” However, Commenters No. 6 and 7 supported the conforming changes, including those involving the addition of “parts.” Because BIS in the past had not defined or clearly distinguished between these two terms, it is not surprising to BIS that certain commenters would arrive at differing determinations regarding whether current ECCNs that do not include “parts” are intended to also include “parts.”

Many unilateral ECCNs on the CCL refer to “parts” but not “components.” For unilateral ECCNs, BIS has more discretion in whether these ECCNs should control “parts” and “components.” However, for consistency with the approach implemented for the multilateral-based ECCNs in this final rule, and to ensure the scope of the unilateral ECCNs is not changed, this final rule is adding references to “parts” and “components” as needed in the unilateral ECCNs to reflect how BIS has interpreted the scope of these ECCNs in the past. These changes proposed in the November 29 rule were not opposed by any of the public comments received.

Consistent with the April 16, 2013 final definitions of “part” and “component” included in the initial implementation rule, BIS is implementing a number of changes to the CCL to incorporate the terms “parts” and “components” in specific ECCNs. However, as noted above, BIS has significantly scaled back the number of “parts” additions included in the final rule. The primary purpose of these ECCN changes is to conform to those definitions and to ensure that no substantive changes are made to the current U.S. Government interpretation of these ECCNs.

Public Comments Received for Clarifying the Use of the Terms “parts” and “components” on the CCL

The following discusses the comments received regarding the clarification of the use of the terms “parts” and “components” on the CCL.

Two commenters supported the “parts” and “components” changes.

Commenter No. 6 noted that the definition of “part” and “component” is a welcome clarification.” Commenter No. 7 also indicated these changes should resolve ambiguities about ECCN coverage and enable companies to correctly classify items falling under each of these designations. BIS agrees with these comments. Commenters No. 6 and 7 support BIS's rationale for these changes and provide additional rationale highlighting the benefits and need to make these changes.

One commenter opposed the “parts” and “components” changes.

Commenter No. 8 opposed the “parts” and “components” changes because central to the proposed “parts” and “components” changes are the definitions of “specially designed” and “component,” respectively. This commenter noted that it is difficult to gauge the impact of the proposed changes in this area set forth in this rule without knowing the definitions of these terms. BIS acknowledges that these other terms have been proposed in other proposed rules being implemented under the ECR Initiative. BIS made this explicit in the November 29 proposed rule by including references to the definitions of “part” and “component” included in the July 15 (framework) rule. The public was informed in the November 29 proposed rule that those proposed definitions should be used as they evaluate the clarifying changes that were proposed in the November 29 proposed rule, and was given ample opportunity to review and comment on those proposed definitions. The April 16 (initial implementation) final rule that includes the definitions for these terms was informed by such public comments. The definitions of “part” and “component” included in the initial implementation rule did not substantively change from what was originally proposed in the July 15 (framework) rule.

Commenter No. 8 also stated as part of their rationale that the proposed rule tries to accomplish far too much at one time. BIS acknowledges that the proposed rule was large. However, the proposed rule clearly identified the proposed changes and the rationale for the various clarifying changes to “parts” and “components.” The public, including all potentially affected industries, was given adequate notice to review the proposed changes and submit comments. Certain specific examples were provided by commenters, such as Commenter No. 6 that noted in certain places the importance of the use of “and” or “or” as it related to certain technology ECCNs. BIS made clarifying changes to certain technology ECCNs as a result of these comments regarding “and” or “or.” The specific technology ECCNs that were revised to address the “and” or “or” issue are discussed elsewhere in this rule under the specific ECCNs.

Over time if the public identifies additional entries where changes should be made to “parts” and “components,” BIS may make additional clarifications to such controls, including implementation of multilateral export control regime changes, if approved by the relevant regime.

Commenter No. 8 also opposed these changes, asserting that these changes will cost exporters substantially more time to evaluate whether the numerous additions of “parts” or “components” will change the scope of an ECCN in a material way for their operations. This commenter noted that a substantial amount of time will also be required for exporters to evaluate the numerous inherent ambiguities the additions create in given ECCNs. BIS does not agree that the addition of “part” or “component” references by this rule will require exporters to spend substantially more time to determine the scope of the potentially relevant ECCN. Interested members of the public had adequate notice to review the proposed changes and submit comments as the November 29 proposed rule included a 60-day public comment review period. The preamble to the rule also identified changes to “parts” and “components”

and provided a considerable amount of detail regarding what was changing and why. Based on the comments received, BIS and the other agencies as mentioned above conducted a review of all the “parts” and ” components” changes, which resulted in a significant scaling back of the “parts” changes. The proposed rule and the comments received along with the subsequent U.S. Government review led to a better final rule that more clearly achieves the stated objectives for the conforming “parts” and “components” changes.

As noted earlier, exporters and any other affected party may also submit additional suggestions for clarifications to the CCL at any time, so if in the future someone wishes to submit suggestions for further clarifying the use of “parts” and “components,” they may do that at any time consistent with § 756.1(a)(1) of the EAR.

Commenter No. 8 also requested that BIS publish several proposed rules proposing “parts” and “components” to be evaluated for each industry or related ECCNs. This commenter suggested that one option would be to propose “parts” and “components” rules for fewer ECCNs at a time, and possibly only pertaining to similar products or industries, so that BIS can be more confident that exporters will have identified and evaluated any unintended scope changes and ambiguities that may arise. BIS does not believe that such an approach is warranted based on the reasons noted above.

Commenter No. 8 also questioned BIS's premise that these changes were limited to making clarifications to the CCL. This commenter argued that references to “parts” and “components” will significantly change the scope of many well established ECCNs. This commenter disputed BIS's assertion that the addition of the term “parts” or “components” to numerous ECCNs, to ensure they include both terms, will not change the CCL substantively. BIS stated in the November 29 proposed rule that one of the objectives was to not change the scope of the ECCNs. As a result of this concern raised by Commenter No. 8, BIS and the other agencies reevaluated the “parts” and “components” changes and were able to identify a large number of ECCNs where the “parts” additions were not needed, and thus are not being implemented in this final rule. This change also addresses the clarity issues raised by Commenter No. 8. This reevaluation confirmed that the remaining ECCNs included in this rule where “parts” are being added need “parts” to be added in order to maintain the intended scope of control.

However, Commenter No. 8 also argued that “parts” and “components” cover very different things, so BIS cannot interpret them interchangeably. The commenter noted that even if BIS sometimes interprets the terms “parts” and “components” interchangeably, the new proposed definitions of those terms describe very different items and will, therefore, require that those terms cover different items. To add one or the other of those terms to an ECCN in which it does not currently appear will dramatically change the scope and coverage of the ECCN. BIS agrees that the terms “part” and “component” under the new definitions will be distinct. Prior to the addition of a definition for “part” and “component” by the initial implementation rule, BIS had not used the same level of specificity in interpreting the scope of the undefined terms parts and components as used on the CCL. If the entry used the term “part,” BIS typically also interpreted the entry to extend to components. Similarly, when the entry used the term “components,” BIS in the context of certain entries interpreted those entries to extend also to parts. More importantly, because the terms part and component were not defined, this was not perceived as an issue. However, now that the two terms are defined, and as indicated in the comment cover different commodities, there is a need to specify in the context of each ECCN what was intended.

Commenter No. 8 also argued that treating “parts” and “components” as interchangeable is counter to the ECR goal of harmonizing terms and concepts across the USML and CCL. This commenter noted that the USML maintains separate definitions of “part” and “component.” Because one of the goals of export control reform is to harmonize terms and concepts across regulatory regimes, the notion that “parts” and “components” are “interchangeable” terms in the EAR will potentially create confusion and drafting problems as items move from the USML to CCL, or as well as when the planned consolidation of the two control lists eventually occurs. BIS does not agree that treating the undefined terms “parts” and “components” as interchangeable is counter to the ECR goal of harmonizing terms and concepts across the USML and CCL. BIS is making the changes as part of the larger effort to begin the harmonization between the EAR and the ITAR of key terms. If BIS did not make the changes, then “parts” that are within the scope of the word “components” throughout the CCL would become decontrolled once the EAR adopted in Part 772 the ITAR's definition of “part.” Thus, this conforming change will bring the non-“600 series” into alignment with the structure of both the ITAR and the “600 series” ECCNs. As noted above, Commenters No. 6 and 7 view the greater specificity as a benefit to exporters, so although these “parts” and “components” changes are integral to the larger USML-to-CCL process now under way under the ECR Initiative, these changes will also make the overall CCL clearer.

Commenter No. 8 also noted that adding one term or another to an ECCN's heading as a matter of course to ensure the heading includes both terms will inevitably create new ambiguities in interpreting an ECCN. BIS clearly described the intent of these changes in the proposed rule and then requested the public to review each of these changes and to identify any changes that either were not consistent with how they interpret the scope of these ECCNs or created any perceived ambiguity. BIS received comments on this issue that related to ECCNs 1C007, 2A292 and 6A992, 2B116, and 3A001 and analyzed them as follows:

ECCN 1C007.

Commenter No. 7 suggested BIS replace “components” in 1C007 with the term “ingredients,” which the commenter thought makes more sense in this materials category. BIS did not propose this change in the November 29 rule, but understands the rationale for the suggestion. However, BIS is addressing the commenter's suggestion by not adding quotes around the term components in 1C007.e. BIS is not adding quotes around the reference to “components” in 1C007.e, because the controls are for “carbon and nitrogen components,” which is interpreted as a single term for purposes of 1C007.e, in this final rule. This is similar to the rationale provided below for why quotes are not being used in ECCNs 3A001.b, 3A982 and 3D982 in this final rule.

ECCNs 2A292 and 6A992.

BIS received comments from Commenter No. 8 in response to the proposed changes to the “unit” paragraph in ECCNs 2A292 and 6A992. However, as noted elsewhere in this final rule, BIS is not implementing the proposed changes to the “unit” paragraphs because this final rule is removing the “unit” paragraph from all ECCNs on the CCL as part of the effort to simplify the shipping tolerance provisions under the EAR that are also being implemented in this final rule. For these reasons, BIS is not implementing the changes suggested in the comments to 2A292 and 6A992.

ECCN 2B116.

Commenter No. 8 noted a specific ECCN example (2B116) as a basis for their concern regarding the use of “parts.” This commenter noted that the November 29 rule proposed to add “parts” to 2B116, which currently covers only “components” for relevant vibration test systems. This commenter was concerned that none of items listed in 2B116, however, would likely be considered a “part” under the new definition. This commenter believed that if implemented, exporters would then be left with uncertainty as to whether an item that could be considered a “part” of a covered vibration system is controlled. BIS does not believe any changes for clarity need to be made for 2B116. The subsequent review conducted by the U.S. Government of the “parts” changes determined in the context of 2B116 that “parts” is needed in order to maintain the intended scope of control. Moreover, BIS believes with “(see List of Items Controlled)” appearing at the end of the entry, there should be no confusion as to what is controlled because only the items listed are controlled. This interpretation also aligns with the original Missile Technology Control Regime (MTCR) text and interpretation regarding the scope of this entry. Therefore, for the reasons noted above, BIS is implementing the changes, as proposed; in this final rule.

ECCN 3A001.

Commenter No. 8 also noted ECCN 3A001.c as an example of their specific concerns about the use of “parts.” This commenter thought this change would result in new compliance obligations for companies that deal in less complex elements (“parts”) of a covered wave device. The subsequent review conducted by the U.S. Government of the “parts” changes determined in the context of 3A001 that “parts” is not needed in order to maintain the current scope of control. Therefore, BIS is not implementing this change to 3A001 and to all other ECCNs where the subsequent review determined “parts” was not needed in order to maintain the current scope of control.

Commenter No. 8 also noted that the “parts” and “components” changes are not consistent with multilateral regime control lists. This commenter asserted the proposed rule makes changes to many ECCNs that are governed by multilateral export control regimes, including WA, which BIS acknowledges is a correct statement. Commenter No. 8 indicated that adding “parts” to CCL headings represents a significant change and marked expansion of scope of the current entries and is not consistent with specific WA language. This commenter believed the U.S. Government should submit this change to the Wassenaar Arrangement. This commenter believes these proposed changes will require consent of WA members before they can be made. The same is true with other proposed changes to other CCL entries that are based on other multilateral regimes, such as the Australia Group (AG). This commenter encouraged BIS to consult with the other regime members before these changes are made because failing to do so could lead to a different scope of coverage in the U.S.

The United States is a member of the four major multilateral export control regimes. In accordance with the terms of membership of these regimes, the CCL is consistent with the control lists used by the respective multilateral export control regimes, although there is national discretion in how those lists are implemented in the various member countries' controls. BIS's interpretation of the usage of the term “parts,” which informed the proposed changes included in the November 29 proposed rule, was that “parts” generally fall under “components” for the typical WA control text. BIS applies this same interpretation to the other multilateral control lists, which also informed the changes included in the November 29 proposed rule. However, based on the concerns raised by Commenter No. 8, the U.S. Government, including the Department of State, conducted an additional review of the “parts” and “components” changes that were included in the November 29 rule. This review, as noted above, resulted in a significant reduction in the number of ECCNs where “parts” is added in this final rule, in particular for many of the Wassenaar Arrangement-based ECCNs. In the remaining ECCNs where “parts” is being added, the U.S. Government has determined that the intent in the context of these ECCNs, including the multilateral based ECCNs, is that “parts” is needed in order to maintain the current scope of control.

In the future, if one of the respective multilateral regimes specifies under one of the multilateral-based entries that such entries are intended to only reach “components” or some other formulation, BIS will implement those changes to the respective entries on the CCL consistent with the U.S. Government's multilateral regime commitments.

The November 29 rule proposed changes implemented in this final rule revise one hundred and one ECCNs on the CCL where the term “parts” or “components” is used, as identified and described in the paragraphs below in more detail.

“Parts” is used, but “specially designed” “components” or `components' as follows” is intended or “specially designed” “parts” and “components” is intended.

In three ECCNs, the term “parts” is used, but the term “specially designed” “components” is intended. This final rule removes the term “parts” and replaces it with the terms “specially designed” “components” in the following three ECCNs: 0A979, 3A980, and 3A981. This rule removes the term “part” and replaces it with the terms “specially designed” “parts” and “components” in the following four ECCNs: 0A982, 0A983, 0A985, and 0A986. In ECCNs 0A984 and 0A987, the term “parts” is used, but the term “components” or “ “components” as follows” is intended. This rule removes the term “parts” and replaces it with the term “components” or “ “components” as follows” in these ECCNs. BIS is implementing these changes, as proposed, in this final rule.

The hybrid term “component parts” is used, but “parts” and “components” is intended.

In certain ECCNs, the hybrid undefined term “component parts” is used, but the intent is “parts” and “components.” This final rule changes ECCN 3A201 to bring its meaning into alignment with this intent by changing “component parts” to “parts” and “components.” BIS is implementing these changes, as proposed, in this final rule. This same issue appears in some of the “xY018” ECCNs on the CCL, but given that those ECCNs will be addressed in the ongoing USML-to-CCL process as those items in the “xY018” ECCNs are moved to the “600 series” ECCNs, the November 29 proposed rule did not propose making changes to those “xY018” entries.

“Parts” or “components” is used, but “parts” and “components” is intended.

Because the terms “parts” and “components” are currently used interchangeably in the context of several entries on the CCL, maintaining current controls while adopting definitions for these words requires the use of both words in each of the seventy-two ECCNs where one of those terms is currently used but both terms are intended. This will ensure that existing ECCNs maintain the same controls that existed when the terms were undefined, so that “parts” and “components” will encompass all subsidiary elements of a complete system in the context of these ECCNs. The November 29 rule proposed adding “parts” or “components” to one hundred and forty-six ECCNs, but after further review conducted by the U.S.

Government, BIS determined only seventy-two ECCNs needed “parts” or “components” added in order to maintain the current scope of control. The significant reduction in the number of these changes is from the reduction in the number of ECCNs where “parts” is being added in this final rule. BIS, in consultation with the other agencies and multilateral export control regimes, intends to revise these entries in the future to further refine the CCL controls, but BIS has determined the changes being implemented in this final rule are the only ones needed at this time and are consistent with the current multilateral regime control lists.

This final rule will insert “parts” and add quotation marks in the following sixty-four ECCNs (in the November 29 proposed rule “parts” was to be added in one hundred and twenty-seven ECCNs): 1A001, 1A002, 1A102, 1A995, 1B003, 1B101, 1B102, 1B115, 1B117, 1B118, 1B119, 1C117, 2A991, 2B109, 2B116, 2B229, 2B351, 2B352, 2B992, 2B998, 2D351, 3A101, 3A201, 3A292, 3A999, 3B991, 3B992, 3D991, 3E982, 3E991, 4A101, 4A994, 5A991, 6A107, 6A203, 6A991, 6B995, 6E001, 6E002, 6E993, 7A101, 7A102, 7A103, 7A104, 7A105, 7A107, 7D101, 7E101, 8A002, 8A992, 9A004, 9A010, 9A011, 9A106, 9A108, 9A109, 9A111, 9A120, 9B001, 9B002, 9B009, 9B115, 9B116 and 9E003. BIS is implementing these changes as proposed, except for the following sixty-three ECCNs: 1A004, 1A005, 1A006, 1A008, 1B001,1C007, 1C230, 2A001 (although BIS is adding a new Note to 2A001.a to clarify this paragraph includes a control on roller bearing and roller elements “specially designed” for the items specified therein), 2B001, (not implemented for heading), 2B003, 2B004, 2B005, 3A001, 3A003, 3A233, 3A982, 3A991, 3B001, 3B002, 3D982, 3E001, 3E003, 4A001, 4A003, 4A004, 5A001, 5B001, 5E001, 5A002, 5A992, 6A001, 6A002, 6A003, 6A004, 6A005, 6A006, 6A008, 6A102, 6A205, 6A992, 6A995, 6A996, 6A998, 6B008, 6D001, 7A001, 7A002, 7A003, 7A004, 7A005, 7A008, 7D001, 7E001, 7E002, 9A002, 9A003, 9A005, 9A006, 9A008, 9A012, 9B003, 9B010, and 9D004 (not implemented for 9D004.e) that will not be changed based on the subsequent U.S. Government review of the “parts” and “components” changes, in this final rule.

ECCN 3A001.

After further review of the proposed changes, including a review of input received from BIS's TACs, BIS decided to not add quotes around the first reference to “components” in the phrase “electronic components” in the heading of ECCN 3A001 to avoid creating confusion over the meaning of the phrase. “Electronic components;” although undefined; is interpreted as a single term for purposes of 3A001. For similar reasons, BIS is not adding quotes around the reference to “components” in 3A001.b because the controls are for microwave or millimeter wave components, which is interpreted as a single term for purposes of 3A001.b, as well as the references to the phrase microwave or millimeter wave components in the headings of ECCNs 3A982 and 3D982 in this final rule.

This final rule inserts “components” and adds quotation marks in the following eight ECCNs: 2A994, 2B201, 5A980, 6A203, 6B995, 8A992, 9A106, and 9A991. In this final rule, BIS is implementing these changes as proposed, except 2A292, 2B001 (in the heading), and 9A012 will not be changed based on the subsequent U.S. Government review of the “parts” and “components” changes included in the November 29 rule.

This final rule will add quotation marks to the existing term “components” in the following fifty-two ECCNs: 1A004, 1A005, 1A006, 1A008, 1B001, 1C007, 2A001, 2B003, 2B004, 3A003, 3B001, 3B002, 3E001, 4A001, 4A003, 4A004, introductory text of Note 1, the N.B.2 and Note 2 that immediately follows the Category 5 Part 1—Telecommunications, 5A001, 5A002, 5A992, 5B001, 5E001, 6A001, 6A002, 6A003, 6A004, 6A005, 6A006, 6A008, 6A992, 6A995, 6A996, 6A998, 6B008, 6D001, 7A001, 7A002, 7A003, 7A004, 7A005, 7A008, 7E001, 7E002, 9A002, 9A003, 9A005, 9A006, 9A008, 9B003, 9B010, 9A012, 9D003 and 9E003.

This final rule will reposition the term “parts” before “components” and will add quotation marks to the existing terms “parts” and “components” in the following ten ECCNs: 1C002, 2A983, 2A984, 3A001, 4A994, 7A994, 9A106, 9A991, 9B990, and 9E003. BIS is implementing these changes, as proposed, in this final rule, except 1A004, 3A001, and 6A992 will not be changed based on the subsequent U.S. Government review of the “parts” and “components” changes included in the November 29 rule.

ECCN 1C350 and 1C355.

After further review of the proposed changes to ECCNs 1C350 and 1C355, including reviewing input received from BIS's TACs, BIS decided to not add the term “parts” to ECCNs 1C350 and 1 C355. BIS decided it would be better to replace the term “components” in these two ECCNs with the alternative term “ingredients.” This change will more clearly reflect the intent of these two ECCNs and avoid potential confusion with the new definition of “component.”

ECCN 9E003.

Commenter No. 6 noted that although they supported the addition of the conforming changes for “parts” and “components,” for certain technology entries using “and” instead of “or” between “parts” and “components” may inadvertently allow the release of certain technology. This commenter noted that the proposed rules used the phrases

“parts” or “components”

and “

parts” and “components”

interchangeably. The commenter further asserted that there are cases where this may cause some readers to read the control as being narrower than intended, specifically in ECCNs 9E003.a.7, 9E003.a.8, and 9E003.c. In the case of the proposed wording for 9E003.a.7, Commenter No. 6 asserted this could be interpreted to mean that the “technology” is “required” only if it applies to both “parts”

and

“components”, which is narrower than the “technology” for either item. This commenter recommended using “or” in these three items paragraphs of 9E003. However, as a result of this comment, BIS also evaluated the other entries where conforming changes for “parts” and “components” were being made and determined that “and” should also be replaced with “or” in the following two ECCNs: 2B201 note to .a, and 9B009 heading.

(C) Clarification of the Use of the Term “assemblies” on the CCL as Components

In the “component” definition added to the EAR in the April 16 (initial implementation) rule, it states that “components are also commonly referred to as assemblies. For purposes of this definition, an assembly and a component are the same.” BIS has reviewed the CCL to ensure the term “assemblies” is not being used redundantly on the CCL. This review identified five ECCNs (5A991, 9A002, 9A003, 9B002, and 9D004) where the terms “assemblies” and “components” are being used in the same ECCN, but where the term “assemblies” should be removed to avoid the incorrect interpretation that assemblies are different from components. This final rule adds the term “electronic” before the term “assemblies” in 5A991 under “items” paragraphs (c.1) and (g) to distinguish the particular type of assembly that is intended to be controlled under this entry. As was noted in the November 29 proposed rule, with regard to ECCNs 9A002, 9A003, 9B002, and 9D004, the U.S. Government intends to develop a proposal to submit to the Wassenaar Arrangement that would propose the

removal of the term “assemblies” from these ECCNs or, in the alternative, propose the addition of more descriptive terms, such as “electronic” to clarify the scope of those other multilateral-based ECCNs.

This final rule removes reference to the term “assemblies” in ECCN 6A998 and adds the term “components” in its place. As described above, this rule also adds the term “parts” to 6A998. BIS is implementing these changes as proposed, with the one exception, in this final rule.

(D) Revisions to the Following ECCNs, Including Changes Made as a Result of Comments

ECCN 1A005.

Commenter No. 7 noted that “specially designed” does not consistently appear in quotation marks, as exemplified by 1A005. This commenter believes that to conform to the new definition of “specially designed” added in the initial implementation rule, the term should be in quotes in 1A005 and wherever else the term “specially designed” is used on the CCL. BIS agrees and is adding quotes wherever the term “specially designed” is used on the CCL in this final rule.

ECCN 1B001.

Commenter No. 7 requested that BIS clarify in this final rule whether the July 15 (framework) rule proposed definition of “accessories” applies to 1B001 and to other places it is used on the CCL. This commenter also requested that BIS add quotation marks around “accessories” in 1B001 and wherever else on the CCL the term “accessories” is used. The definition for “accessories” was added to the EAR in the initial implementation rule, and will apply to 1B001 and wherever the term “accessories” is used on the CCL. Therefore, BIS in this final rule accepts these comments and is adding quotation marks to wherever the term “accessories” is used in this rule. Note that “accessories” and “attachments” are defined as separate terms in part 772, but the definition is the same for “accessories” and “attachments” and each definition cross references the other. For the same reason that BIS is adding quotation marks around “accessories,” BIS is also adding quotation marks around “attachments” in this final rule.

ECCN 1C996.

This final rule will amend 1C996 by revising the heading to add the phrase “not controlled by 1C006,” to clarify the scope of 1C996 as it relates to 1C006. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 2A994.

As an additional clarification to existing controls, Commenter No. 4 suggested adding an ECCN-specific definition of “portable electric generator” to 2A994. This commenter was aware of past advisory opinion guidance provided by BIS that had interpreted the term “portable electric generator” for purposes of 2A994. BIS is aware of this past advisory opinion and agrees it would be beneficial to add an ECCN-specific definition based on that previously provided guidance. This new ECCN-specific definition added by this final rule makes it clear that the generators that are in 2A994 are portable—5,000 lbs or less on wheels or transportable in a 2

1/2

ton truck without a special set up requirement.

ECCN 2B350.

This final rule amends 2B350 by revising the “Related Definitions” paragraph in the List of Items Controlled section to indicate for purposes of this entry that the term `chemical warfare agents' includes those agents “subject to the ITAR” (see 22 CFR parts 120 through 130). In addition, this rule adds a note at the end of the “items” paragraph in the List of Items Controlled section to provide a reminder and cross reference to the Note for exporters, reexporters and transferors, stating the following: “See Categories V and XIV of the United States Munitions List for all chemicals that are “ `subject to the ITAR' (see 22 CFR parts 120 through 130).”

Commenter No. 8 requested BIS to specify whether the definition for the “chemical warfare agents” proposed for 2B350 also applies to 1A004 and 2B351. The 2B350 definition is an ECCN-specific definition, so it does not apply to 1A004 or 2B351. If the definition were intended to also apply to other ECCNs, then adding a definition of “chemical warfare agents” to 772 would be the appropriate change to make, but as noted that was not intended in the November 29 proposed rule.

Commenter No. 8 also indicated the “chemical warfare agents” definition scope proposed for ECCN 2B350 is not correct in terms of its reference to USML categories referenced. Specifically, Commenter No. 8 was concerned that proposing that the ITAR-controlled chemicals are only found in USML Categories V and XIV is not correct because such chemicals could conceptually fall within USML Category XXI and possibly others. In drafting the November 29 proposed rule, BIS consulted with the Department of State on the appropriate USML categories to reference in the 2B350 definition. In reviewing this comment and preparing this final rule, BIS also consulted with the Department of State. BIS acknowledges USML Category XXI, which is a temporary holding category on the USML, could be applicable, but USML Category XXI could also be applicable for any other USML-related cross reference provided on the CCL. For this reason, BIS does not add references to USML category XXI. Based on the interagency review of this comment and the draft final rule, no additional USML categories need to be added to the `chemical warfare agents' definition in ECCN 2B350. For the reasons noted above in responding to the commenter, BIS is implementing this change, as proposed, in this final rule.

ECCN 2B996.

This final rule amends 2B996 by revising the heading to clarify that dimensional inspection or measuring systems or equipment not controlled by 2B006 or 2B206 are controlled under this ECCN. Certain dimensional inspection or measuring systems or equipment controlled under 2B206 would also be controlled under 2B996. To clarify the relationship between 2B996 and 2B206, this rule adds 2B206 to the exclusion in 2B996. BIS did not receive any comments on this change, so this change is implemented, as proposed, in this final rule.

ECCN 2B999.

Commenter No. 1 requested BIS clarify the scope of 2B999.g for fittings. The commenter asked BIS to clarify whether or not 304 and 316 stainless steel pipe fittings, which do not fall under 2A292.a, are classified under 2B999.g. This commenter noted that currently, manufacturers have differing interpretations. Some classify fittings under 2B999 and others EAR99. Confusion comes from some thinking 2B999.g includes fittings because “fittings are simply shorter pieces of pipe.” However, others may classify fittings as EAR99 because they are not specified in 2B999.g. Lastly, this commenter noted that whether the fittings are EAR99 or 2B999.g the same license requirements apply. BIS addressed this commenter's suggestion for removing 2B999 elsewhere in this rule and addressed the request for clarification here regarding the scope of 2B999.g. BIS confirms here that fittings are considered part of “piping” for purposes of 2B999. BIS also adds a new note to 2B999.g to clarify the scope of this item.

ECCN 6A002.

This final rule revises the STA (License Exception “Strategic Trade Authorization”) paragraph in the License Exceptions section, which as proposed in the November 29 rule and as implemented in the final rule, is now

in its own section called Special Conditions for License Exception STA. This final rule removes the phrase, “to any of the eight destinations listed in § 740.20(c)(2) of the EAR” from the end of the current STA paragraph and adds it to the introductory text of the STA paragraph. BIS makes this change to clarify the 6A002 “items” paragraphs that are not eligible for License Exception STA to any of the eight destinations listed in § 740.20(c)(2). BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 6E001 and 6E002.

This final rule removes the term “equipment” and replaces it with the term “items” in the “NP” and “RS” controls paragraphs in the License Requirements section of 6E001 and 6E002. This clarification is made as a conforming change to the new “equipment” definition added in the April 16 (initial implementation) rule. The clarification is made because the “NP” and RS” items include paragraph references to other ECCNs that control items other than equipment and therefore the broader term “items” is intended in these two controls paragraphs in 6E001 and 6E002.

ECCN 8A918.

This final rule removes the marine boilers from 8A918 and moves these items to two new “items” paragraphs in the List of Items Controlled section of 8A992. This rule adds a new “items” paragraph (l) to 8A992 for marine boilers designed to have any of the characteristics in the new 8A992.l.1 or .l.2. This rule adds “items” paragraph (m) to 8A992 for “components,” “parts,” “accessories,” and “attachments” for marine boilers that would be described in 8A992.l. This rule's movement of these commodities from 8A918 to 8A992.l and .m will remove the Regional Stability (RS) Column 2 control on these commodities. The Anti-Terrorism (AT) and United Nations (UN) controls will be retained for the commodities moved to 8A992.l and .m. BIS proposed this change in the November 29 rule because these marine boilers do not warrant an RS control or a separate ECCN entry and can therefore be added under ECCN 8A992 to be controlled with other types of marine commodities warranting an AT control. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 9A980.

This final rule revises 9A980 by removing the term “parts” from the heading of the ECCN and adding a new heading note to clarify the scope of the ECCN. The Crime Control (CC) parts that would have been classified under this entry if exported alone are already accounted for on the CCL and controlled for CC reasons. The new heading note clarifies that in order for a vehicle to be classified as a nonmilitary mobile crime scene laboratory under ECCN 9A980, the vehicle must contain one or more analytical or laboratory items controlled for Crime Control (CC) reasons on the CCL, such as items controlled under ECCN 3A980 or 3A981. This new heading note does not change the scope of the ECCN, but clarifies the scope of this ECCN and the relationship to other CC ECCNs. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 9A991.

In reviewing the conforming changes for “parts” and “components,” Commenter No. 6 raised concerns regarding whether the proposed changes to 9A991.d should be implemented due to a concern that the proposed wording may inadvertently classify some aircraft “parts” and “components” as EAR99 while an aircraft is in development. Commenter No. 6 asserted that under the proposed wording, the “parts” and “components” to be controlled are only those for “aircraft” that meet requirements of 9A991.a or .b. ECCN 9A991.a controls specific military aircraft, and ECCN 9A991.b controls “civil aircraft.” Prior to receiving a civil airworthiness certificate, developmental aircraft do not meet the definition of “civil aircraft” in § 772.1 of the EAR. The commenter stated that it would follow that “parts” and “components” “specially designed” for pre-certification non-military aircraft or in countries where such certificates are not granted are not described in 9A991.d, and barring any other control, would be classified EAR99. Once the aircraft is certified, these parts would move to 9A991.d. Commenter No. 6 indicated they believed this is not the intent of the control. BIS agrees that this is not the intent of the control. BIS reviewed this issue and determined it was better to revise 9A991.b by replacing the term “civil aircraft” with the term “aircraft n.e.s.” This revision to 9A991.b would describe more precisely the scope of the ECCN and would be consistent with how BIS now interprets the ECCN. Aircraft subject to the ITAR will remain ITAR controlled. Aircraft subject to the EAR and controlled by ECCN 9A610.a will continue to be controlled by that ECCN. Aircraft described in ECCN 9A991.a will continue to be controlled by that subparagraph. ECCN 9A911.b will continue to control all other aircraft at all stages of their development or production, and regardless of whether they have a certification from an aviation authority. This final rule also makes a conforming change to the change in 9A991.b by revising the regional stability (RS) 1 control in ECCNs 7D001, 7E001, 7E002, and 7E101. These ECCNs are amended by removing the term “civil aircraft” and replacing it with the more accurate phrase 9A991.b aircraft. This change is not substantive and is limited to conforming to the clarification made to 9A991.b and to add greater specificity in these three RS controls. For additional clarity, this final rule also adds the conjunction “and” to the RS control between the terms “inertial navigation system” or “inertial equipment” in 7D001, 7E001, 7E002 and 7E101, along with other clarifying text to the RS control in 7E101 to clarify the scope of this RS control by adding the terms “required” and “specially designed.”

xY999 ECCNs.

Commenter No. 1 suggested BIS remove all xY999 ECCNs where items controlled are only AT-controlled. BIS evaluated this change in drafting the November 29 proposed rule and considered implementing the removal of certain xY999 entries in this final rule. However, in evaluating these possible removals with the other agencies involved in the review process of the November 29 rule, it was determined that additional analysis is needed before moving forward with these removals. This determination also took into account the minimal impact that such removals would have, given that the only xY999 ECCNs under consideration for removal are those where the license requirements would be redundant with EAR99 items. BIS is still evaluating whether it may be possible to remove some or all of the “xY999” ECCNs on the CCL that may have redundant license requirements with EAR99 items.

(E) Addition of “Related Controls” To Aid in Classification

Most ECCNs on the CCL contain a “related controls” paragraph in the List of Items Controlled section that provides cross references to related ECCNs to assist the public in classifying items that are subject to the EAR. In some ECCNs, the “related controls” paragraph also includes cross-references to the export controls other U.S. Government agencies administer.

The November 29 rule proposed adding a number of additional “related controls” paragraphs or revising existing “related controls” paragraphs to assist the public in classifying items. This final rule implements those changes, along with certain additional “related

controls” changes in response to BIS's review of the public comments. In the November 29 proposed rule, BIS advised that in responding to the proposed rule, the public may also provide suggestions for additional “related controls” that would assist the public in classifying items. This final rule is revising the “related controls” paragraphs in the following twelve ECCNs: 1A985, 1B117, 1B118, 1B119, 1B225, 1C117, 1C233, 2B105, 2B116, 3A230, 7A103 and 9B009 that were proposed in the November 29 rule. In addition, as a result of the review of public comments, this final rule is also revising the “related controls” paragraphs in the following three ECCNs: 2A226, 2A292 and 2B350 as follows:

ECCN 2A226.

Commenter No. 9 suggested adding ECCN 2B999 to the “related controls” paragraph of 2A226. This commenter noted that 2A226 references other valve ECCNs (2A292 and 2B350), but has no reference to 2B999. BIS agrees that adding 2B999 would be helpful, so this final rule is implementing this change.

ECCN 2A292.

Commenter No. 9 suggested adding ECCNs 2B350 and 2B999 to the “related controls” paragraph of 2A292. This commenter noted 2A292 references to one other valve ECCN (2A226), but has no reference to 2B350 or 2B999. BIS agrees that adding 2B350 and 2B999 would be helpful, so this final rule is implementing this change.

ECCN 2B350.

Commenter No. 9 suggested adding ECCNs to the “related controls” paragraph of ECCN 2B350 instead of using N/A. The commenter was concerned that the use of “N/A” may lead you to mistakenly conclude that there are no applicable technology ECCNs or any other potential valve ECCNs. BIS agrees that adding ECCNs 2A226, 2A292, 2A293, 2B231 and 2B999 to the “related controls” paragraph of 2B350 would be helpful, so this final rule is implementing this change.

ECCN 2B999.

Commenter No. 9 suggested adding ECCNs 2A226 and 2A292 to the “related controls” of 2B999. This commenter noted that 2B999 refers to a number of other ECCNs, including 2B350, but it does not refer to the other valve ECCNs (2A226 and 2A292). BIS does not accept this change because it is clear within the context of this ECCN 2B999 that the only valves that are controlled are those referenced in the long list of “items.” BIS is also still evaluating whether it may be possible to remove 2B999, along with similar “xY999” ECCNs on the CCL that have redundant license requirements with EAR99 items. Additional analysis is needed, however, before any such “xY999” ECCNs can be removed from the CCL, as noted above.

Commenter No. 9 also suggested BIS conduct a review of all the “related controls” on the CCL to identify additional changes to make and address inconsistencies. This commenter recommended BIS review the “related controls” section of each ECCN in Groups A, B or C to identify all related ECCNs. The “related controls” then should be updated accordingly to include similar ECCNs of Groups A, B or C as well as the applicable software and technology ECCNs of Groups D and E. BIS agrees that regular review of the “related controls” paragraphs should be conducted. BIS has already conducted a review of all the “related controls” paragraphs on the CCL, and these are the changes that were proposed in the November 29 rule. In evaluating the comments received in response to the November 29 proposed rule, BIS also identified additional “related controls” changes that are being implemented in this final rule, as described above for ECCNs 2A226, 2A292, and 2B350. BIS will continue conducting regular reviews of the “related controls” paragraphs and make updates as necessary on the CCL. Note, however, that although the “related controls” paragraphs are a useful tool for classifying related items under the CCL, the “related controls” paragraphs are not exhaustive or determinative of an item's control status. They are not part of the control text for a specific ECCN. Related controls are a method of identifying other ECCN entries that may be applicable to a particular item, including highlighting in certain cases when a related item may be subject to the exclusive jurisdiction of another agency of the U.S. Government. However, to determine whether an item is classified under another entry on the CCL or another control list, such as the Nuclear Trigger List or the United States Munitions List (USML), a person classifying an item should review the other ECCN or other control lists as applicable to determine the jurisdictional and classification status of a particular item.

Supplement No. 4 to part 774—Commerce Control List Order of Review—was added to the EAR in the initial implementation rule, and identifies the proper order of review for reviewing the CCL.

ECCNs 7A005 and 7A994.

This final rule also revises the “related controls” paragraphs in ECCNs 7A005 and 7A994 and includes the substance of the amended related control paragraph as a new “license requirement note” in 7A994. This change will clarify the relationship between 7A005 and 7A994 and provide guidance on the appropriate classification for GPS equipment. The added text in 7A005 and 7A994 will alert persons classifying GPS items that “typically commercially available GPS do not employ encryption or adaptive antenna and are classified as 7A994.” BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

(F) Addition of the Term “subject to the ITAR” to the EAR.

This final rule adds the term “subject to the ITAR” to § 772.1 (Definitions of terms as used in the EAR). This defined term is added to parallel the use of the term “subject to the EAR” that is commonly used in the EAR, along with simplifying many of the references to the export jurisdiction of the Department of State that are included in the EAR. The vast majority of these references to the export control jurisdiction of the Department of State are on the CCL. This final rule will therefore add the following definition of “subject to the ITAR” in § 772.1:

A term used in the EAR to describe those commodities, software, technology (e.g., technical data) and defense services over which the U.S. Department of State, Directorate of Defense Trade Controls (DDTC) exercises regulatory jurisdiction under the International Traffic in Arms Regulations (ITAR) (see 22 CFR 120-130).

This final rule makes conforming changes to the rest of the EAR, including several ECCNs and §§ 734.4 (

De minimis

U.S. content), 734.6 (Assistance available from BIS for determining licensing and other requirements), and 740.6 (Technology and software under restriction (TSR)), by adding “subject to the ITAR” where the export control jurisdiction of the Department of State is referenced. In addition to making the conforming change in § 734.6, this rule revises the references to the ITAR to clarify that, in order to determine whether an item is “subject to the ITAR,” you should review the ITAR's United States Munitions List (see 22 CFR §§ 120.6 and 121.1). If the item is within the scope of a USML category, then the item is a defense article subject to the ITAR. If it is not, then it is not subject to the ITAR. The revised text also clarifies that you may also submit a request to the Department of State, Directorate of Defense Trade Controls, for a formal jurisdictional determination regarding

the commodity, software, technology, or activity at issue (see 22 CFR § 120.4). BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

(H) Addition of Paragraph To Clarify the Jurisdiction of Items Subject to the EAR When Sold, Leased or Loaned by the Department of Defense to a Foreign Country or International Organization Under the Foreign Military Sales (FMS) Program

This final rule adds a new paragraph (b)(1)(vi) to § 734.3, which identifies items subject to the EAR. This new paragraph was not proposed in the November 29 rule, but the change is being made in this final rule as a clarification to the addition of § 734.3(e) in the initial implementation final rule published on April 16, 2013. While not effective until October 15, 2013, § 734.3(e) specifies that items subject to the EAR may be exported, reexported, or transferred in country under licenses, agreements, or other approvals from the Department of State's Directorate of Defense Trade Controls pursuant to §§ 120.5(b) and 126.6(c) of the International Traffic in Arms Regulations (ITAR) (22 CFR 120.5(b) and 126.6(c)) or under actions made by the Department of State's Office of Regional Security and Arms Transfers.

New paragraph (b)(1)(vi) clarifies that items that would otherwise be subject to the EAR and that are sold, leased or loaned by the Department of Defense to a foreign country or international organization under the Foreign Military Sales (FMS) Program of the Arms Export Control Act, pursuant to a Letter of Offer and Acceptance (LOA) authorizing such transfers, are

not

“subject to the EAR” but rather, are subject to the authority of the Arms Export Control Act. New paragraph (b)(1)(vi) clarifies that the terms and conditions of the LOA would govern the export, reexport, or other transfer of the items. Lastly, because the heading for new paragraph (b)(1)(vi) refers to the Department of Defense (DoD) and Department of State, BIS is adding a cross reference from new paragraph (b)(1)(vi) to paragraph (b)(1)(i), along with a cross reference from (b)(1)(i) to (b)(1)(vi).

(I) Corrections and Minor Clarifications to Existing CCL Text and Proposed Text Included in the November 29 Proposed Rule

The November 29 rule also included minor corrections and clarifications to the CCL, such as to correct certain misspellings and typographical errors and make other minor updates to the CCL. BIS did not receive any comments on these changes, so BIS is implementing these changes, as proposed, in this final rule for the following two ECCNs: 6C992 and 9B002.

In the public comments received in response to the November 29 rule, the public identified some additional corrections or minor clarifications that should be made to existing CCL text or to some of the proposed text included in the November 29 rule. BIS has accepted some of these suggested changes, so BIS is implementing these changes in this final rule for the following ECCNs: 1C002 (to correct a formatting error in 1C002.c.1.a where “10

9

” was incorrectly proposed as “109”); 2B352 (to correct a formatting error in 2B352.d.2 where “(0.2 m

2

)” was incorrectly proposed as “(0.2 m2)”); 9E003 (to insert an omitted “Related Controls) paragraph number (2)”); and 1A002 (to remove an extra “and” that was not needed and modify the punctuation).

Commenter No. 8 suggested that the heading of 1A002 should also end in the word “therefor.” BIS does not accept this change because the current entry is consistent with the Wassenaar Arrangement WA dual-use list entry 1.A.2. In addition, the term is not needed in the context of this entry.

ECCN 5A991 (and similar changes to 5A001, 6A008 and 7A005).

This rule changes the spelling of the word “antennae” in the “items” paragraph (f) of 5A991. This term should be spelled as “antennas” to reflect common American English usage in this ECCN. BIS also accepted Commenter No. 8's suggestion that a review should be conducted of the entire CCL to identify any additional places where this same issue occurs and standardize this usage. BIS identified five other references on the CCL where this correction needs to be made: ECCN 5A001.d and the Note to 5A001.d; ECCN 6A008 in the decontrol note for (PAR), 6A008.e; and ECCN 7A005 in the Note to 7A005.b. This final rule is implementing these additional five corrections to address this incorrect word usage on the CCL.

This final rule does not implement the related change to the “unit” paragraph of 5A001 because the “unit” paragraph will no longer be used in ECCNs under the simplified structure being implemented in this rule for calculating shipping tolerances under the EAR. As described below, this final rule removes all “unit” paragraphs from the CCL, so the proposed change to the “unit” paragraph of 5A001 is no longer required, along with any proposed changes to the “unit” paragraph that was included in the November 29 rule.

(2) Changes To Conform the CCL to the Multilateral Export Control Regime Control Lists and Previous Amendments to the EAR

This final rule is also making the following changes to conform the CCL to the multilateral export control regime control lists and to conform the CCL to the intent of past amendments to the EAR. These are cases where a previous amendment to the EAR was intended to effect a change, but the change was not implemented as intended, or where a conforming change should have been made to the CCL, but was inadvertently not made. In general, the public did not raise specific concerns regarding the changes described under this heading (2). The comments that were received highlighted additional specific examples that also warranted attention in the final rule: Commenter No. 8, as was discussed above under heading (1)(B)(

Clarifying the use of the terms “parts” and “components” on the CCL

), raised a concern that the proposed changes were not consistent with the multilateral export control regimes and that a regime change proposal would need to be approved before BIS implemented such changes to multilateral-based ECCNs, such as those controlled by the Wassenaar Arrangement. BIS does not agree with this comment for the reasons discussed above under heading (1)(B). BIS considered discussing these two comments here, but because the “parts” and “components” changes were described above under heading (1)(B), BIS decided to also include these two comments under the earlier discussion to group them with the other comments and BIS responses on the “parts” and “components” changes being implemented in this final rule.

(A) Conforming Changes for Limitations on Use of TSR for Wassenaar Very Sensitive List Items

In implementing its commitment to exercise vigilance in the licensing of items listed on the Wassenaar Very Sensitive List, the United States has limited the use of License Exception TSR to a list of specifically identified countries for certain ECCNs. These limitations are contained in the TSR paragraph in the License Exception section of nine ECCNs (i.e., ECCNs 1E001, 5D001, 5E001, 6D001, 6D003, 6E001, 6E002, 8D001 and 8E001) that control items on the Wassenaar Very Sensitive List and for which TSR has been authorized for some, or all of the ECCN.

The TSR paragraph limitation was introduced in 1998, upon

implementation of the Wassenaar Arrangement (63 FR 2452), with a list of sixteen destinations eligible for TSR for Wassenaar Very Sensitive List items. Approximately one year later, Japan was added to the TSR paragraph limitation (64 FR 10852). In 2008, Australia and Norway were added to the TSR paragraph in ECCN 1E001, with the explanation that their original exclusion had been an oversight. Australia and Norway were not added to the other TSR paragraphs with Wassenaar Very Sensitive List limitations, creating an inconsistency.

This final rule adopts a standardized list of countries under the EAR for the nine ECCNs. The use of this standardized list of countries simplifies the use of the TSR License Exception for these nine ECCNs and aid the public's understanding regarding which countries are eligible and not eligible to receive National Security (NS) controlled technology under these nine ECCNs. Commenter No. 7 supported the proposed change. BIS has recently determined that the thirty-six countries listed in License Exception Strategic Trade Authorization, Section 740.20(c)(1) of the EAR, are eligible for License Exception authorization for Wassenaar Very Sensitive List items. These 36 countries are: Argentina, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, Turkey, and the United Kingdom. This final rule revises the list of countries in the TSR paragraph for the nine ECCNs to state “those countries listed in § 740.20(c)(1) (License Exception STA).” The 17 countries (19 countries in 1E001) that were previously identified as being eligible for License Exception TSR under these ECCNs were a subset of the 36 STA-eligible countries. Therefore, this final rule adds the remaining 19 countries, except for 1E001 where this final rule adds the remaining 17 countries, as eligible countries to receive this type of technology through application of License Exception TSR under these ECCNs.

(B) ECCN Changes To Conform to the Multilateral Export Control Regimes

Commenters No. 5 and 7 noted they supported what they said was the “BIS” effort to conform the CCL to multilateral export control regime control lists. Commenter No. 7 also noted they appreciated all the changes to make CCL language consistent with the MTCR, but they requested confirmation that their understanding of the intent and scope of the following proposed changes in the November 29 rule is correct: “missiles” is replaced with rockets, missiles and UAVs to ensure Category 1 and 2 UAVs are captured; only UAV range is specified in 1A101 and 9D105 to capture Category 1 and 2 MTCR items; UAV and payload are specified in 1D103 to only capture Category 1 subsystems; and UAVs are not included in 7E104 because the MTCR Annex is specific to optimization of rocket system trajectory, and does not include a control related to UAVs. Commenter No. 7's description of the intent and scope of these changes from the November 29 rule is correct. BIS received no other comments regarding these proposed changes, so BIS is implementing these changes, as proposed, in this final rule.

ECCN 1A101.

This final rule amends 1A101 by replacing the term “missiles” in the heading with the phrase “rockets, missiles, or unmanned aerial vehicles capable of achieving a “range” equal to or greater than 300 km” to conform to the Missile Technology Control Regime (MTCR) Annex. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 1D103.

This final rule amends 1D103 by replacing the term “missiles” in the heading with the phrase “rockets, missiles, or unmanned aerial vehicles capable of delivering at least a 500 kg payload to a “range” equal to or greater than 300 km” to conform to the MTCR Annex. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 1E001.

This final rule amends 1E001 by removing ECCN 1A008 from the heading and NS controls paragraph. This change is made to conform to the Wassenaar Arrangement List of Dual-Use Goods and Technologies that does not extend to technology for 1A008. This change was not proposed in the November 29 rule, but was identified by BIS as an additional change that needed to be implemented to conform to the Wassenaar Arrangement. Therefore, BIS is implementing these changes in this final rule.

ECCNs 2E001 and 2E002.

Commenter No. 6 suggested expanding the scope of the exclusion in the headings in 2E001 and 2E002 by adding ECCN 2B999 to the list of commodities controlled in 2B that are not within the scope of 2E001 and 2E002. To support their position, this commenter noted that 2E001 and 2E002 control “technology” for all isostatic presses, regardless of capability. They further noted that even commercial MIG welders and industrial sewage pumps (e.g., ECCNs 2B999.d and 2B999.j) are thus controlled. Commenter No. 6 asserted that given 2E001 and 2E002 are generally associated with high levels of control, there may be confusion when “production” “technology” for a MIG welder is classified 2E001, but the commodity is classified under an AT-only control. BIS agrees with Commenter No. 6 and is implementing these two changes in this final rule. The change being implemented in the final rule will exclude technology for 2B999, but the overall impact on the number of licenses received by BIS is expected to be minimal.

ECCN 5D101.

This final rule amends 5D101 by removing the term “items” from the heading and adding the term “equipment” in its place. This rule will make this change to be consistent with the MTCR Annex. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCNs 6A002 and 6A003.

This final rule amends 6A002 and 6A003 by correcting a spelling error in the headings of these two ECCNs to remove the term “therefore” and replace it with “therefor.” These changes are being made to conform to the Wassenaar Arrangement List of Dual-Use Goods and Technologies that uses the term “therefor” for both of these entries. These two changes were not proposed in the November 29 rule, but were identified by BIS as additional changes that needed to be implemented to conform to the Wassenaar Arrangement. Therefore, BIS is implementing these changes in this final rule.

ECCN 6D102.

This final rule amends 6D102 by removing the term “goods” from the heading and adding the term “equipment” in its place. This rule makes this change to be consistent with the MTCR Annex. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 6D994.

This final rule removes 6D994 to conform to a previous amendment to the EAR that imposed a control for these same items under 6D003.c. BIS's intention when 6D994 was added to the CCL was to impose a control on this software until a control could be approved at the Wassenaar Arrangement and implemented in the EAR. When the final rule to add this software to 6D003.c was published, the intention was to remove 6D994. However, this entry was inadvertently retained at the time 6D003.c was added to the CCL, which may have caused

confusion for exporters trying to classify this type of software because the software meets the description of two software ECCNs. To address this oversight, this final rule removes 6D994 from the CCL, leaving 6D003.c as the control ECCN. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 7D101.

This final rule amends 7D101 by revising the heading to include 7A117 in the list of ECCNs for which 7D101 controls the software. 7A117 is a reference to a USML control based on the MTCR Annex. 7D101 controls the software of certain commodities controlled for MT reasons. This change is made to conform to the MTCR Annex. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 7E104.

This final rule amends 7E104 by replacing the term “missiles” in the heading with the phrase “rockets or missiles capable of achieving a “range” equal to or greater than 300 km” to conform to the MTCR Annex. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 9A107.

This final rule amends 9A107 by revising the heading to replace the word “engines” with the word “motors.” This change is made to conform to the MTCR Annex. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 9A110.

This final rule amends 9A110 by revising the heading to include 9A109 in the list of ECCNs for which 9A110 controls the composite structures, laminates and manufactures thereof. 9A109 is a reference to a USML control based on the MTCR Annex. 9A110 controls the software of certain commodities controlled for MT reasons. This rule also amends 9A110 by replacing the defined term “missiles” with the phrase “rockets, missiles, or unmanned aerial vehicles capable of achieving a “range” equal to or greater than 300 km.” These changes are made to conform to the MTCR Annex. BIS did not receive any comments on these changes, so BIS is implementing this change, as proposed, in this final rule.

ECCN 9A118.

This final rule amends 9A118 by inserting the phrase “missiles, and unmanned aerial vehicles capable of achieving a “range” “equal to or greater than 300 km” into the heading to conform to the MTCR Annex. Commenter No. 7 identified a typographical error in 9A118 where the word “of” was used, but the word “to” was intended. BIS accepts this change and is correcting the error in this final rule, so the parameter correctly reads, “capable of achieving a range equal to or greater than 300 km.”

ECCNs 9B001, 9B002, 9B003 and 9B004.

Commenter No. 6 noted that the relationship between these four ECCNs and ECCN 9A001 could be made clearer as it relates to the MT controlled portions of these four ECCNs. This commenter noted that, as currently written, the equipment described in these four ECCNs is controlled for MT reasons if it is applicable to any engine whose characteristics are described in 9A001. However, this commenter suggested that rather than referencing 9A101 obliquely through reference to 9A001 in the MT control(s) paragraphs in 9B001, 9B002, 9B003, and 9B004, BIS should add the following sentence to the MT control(s) paragraph in these four ECCNs: “MT applies only to equipment for engines that meet the characteristics described in 9A101.” BIS agrees that revising the MT control(s) paragraph in these four ECCNs would be helpful, but BIS decided to use different control text than to what was proposed by Commenter No. 6. BIS will revise the MT control(s) paragraph in these four ECCNs to indicate that the MT control applies to equipment for engines controlled under 9A001 for MT reasons and for engines controlled under 9A101. These changes are being implemented in this final rule.

ECCN 9B115.

This final rule amends 9B115 by revising the heading to include 9A103 in the list of ECCNs for which 9B115 controls the “production equipment.” 9A103 is a reference to a USML control based on the MTCR Annex. 9B115 controls the “production equipment” of certain commodities controlled for MT reasons. This change is made to conform to the MTCR Annex. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 9B116.

This final rule amends 9B116 by revising the heading to include 9A103 in the list of ECCNs for which 9B116 controls the “production equipment.” 9A103 is a reference to a USML control based on the MTCR Annex. 9B116 controls the “production equipment” of certain commodities controlled for MT reasons. This change is made to conform to the MTCR Annex. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 9D103.

This final rule amends 9D103 by revising the heading to include ECCNs 9A009, 9A107 and 9A109, and to expand the reference to 9A105 from 9A105.a to the entire ECCN in the list of ECCNs for which 9D103 controls certain “software.” ECCNs 9A009, 9A105, 9A107, and 9A109 are references to USML controls based on the MTCR Annex. 9D103 is a reference to a USML control based on the MTCR Annex. This change is made to conform to the MTCR Annex. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 9D104.

This final rule amends 9D104 by revising the heading to include ECCNs 9A006, 9A007, 9A008, 9A009, 9A010, 9A115, 9A116, and 9A106.e in the list of ECCNs for which 9D104 controls the “software.” 9A006, 9A007, 9A008, 9A009, 9A010, 9A115 and 9A116 are references to USML controls based on the MTCR Annex. 9A106.e is controlled on the CCL for MT reasons. 9D104 controls the “software” of certain commodities controlled for MT reasons. This change is made to conform to the MTCR Annex. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

ECCN 9D105.

This final rule amends 9D105 by replacing the term “missiles” in the heading with the phrase “rockets, missiles, or unmanned aerial vehicles capable of achieving a “range” equal to or greater than 300 km” to conform to the MTCR Annex. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

(3) Structural Changes To Improve the Clarity of the CCL

ECCNs on the CCL follow the same basic paragraph structure, although not all ECCNs contain the same paragraphs. The common paragraph structure is intended to allow the public to quickly review ECCNs and to identify relevant paragraphs in each ECCN. This final rule is implementing changes to the standard section headings that are used in most ECCNs on the CCL. These changes affect most of the ECCNs on the CCL, but are being implemented through instructions instead of setting out each revision in the regulatory text. BIS is making the changes in this manner to save on the cost of implementing these structural changes. BIS's decision also took into account that the changes are not ECCN specific and are more focused on how the ECCN information is being communicated to the public. Each of the structural changes this rule implements improves the clarity of the CCL and is further described below. Commenter No. 6 noted that the clarification and background in the November 29 proposed rule on the placement of the phrase “(see List of Items Controlled)”

is greatly appreciated, as is the addition of the phrase “as follows (see List of Items Controlled)” where necessary. Commenter No. 8 questioned the use of “as follows” because they believed it was redundant in ECCNs that also use “(see List of Items Controlled)” at the end of the ECCN. BIS agrees that the use of the phrase “as follows” in this case is redundant. BIS is, however, not accepting this change in the final rule because “as follows” is used on the Wassenaar Arrangement's control lists and because “(see List of Items Controlled)” is a CCL convention.

Commenter No. 7 noted they supported the structural changes, such as explicit references to Part 740, License Exceptions, references to Country Chart, and adding Reporting Requirements section to affected ECCNs. This commenter noted that these structural changes will increase understanding of license exceptions and the standardized structure will make it easier for exporters to use and comply with EAR. BIS agrees. Receiving no other comments on these changes, BIS implements these changes, as proposed, in this final rule.

BIS also implements in this final rule these same structural changes to the new ECCNs added in the April 16 (initial implementation) rule and the July 8, 2013 final rule,

Revisions to the Export Administration Regulations: Military Vehicles; Vessels of War; Submersible Vessels, Oceanographic Equipment; Related Items; and Auxiliary and Miscellaneous Items that the President Determines No Longer Warrant Control under the United States Munitions List

(July 8 (implementation) rule) (78 FR 22660). These are not corrections to the initial implementation rule and the July 8 (implementation) rule, but rather are conforming changes being made as a result of the changes included in this final rule. This final rule also includes clarifications to the April 16 (initial implementation) rule that are not limited to conforming changes with this final rule, but those are described below under (6)

Clarifications to the April 16 (initial implementation) rule.

Although the November 29 proposed rule was published before the initial implementation rule and the July 8 (implementation) rule, those final rules were published without the structural changes described here. At the time of publication of those final rules, their new “600 series” ECCNs were consistent with the existing structure of the CCL. This final rule makes these structural changes to the ECCNs added in those two rules and adopts them for all subsequent rules that add new ECCNs described here.

This final rule also includes clarifications to the April 16 (initial implementation) rule that are not limited to conforming changes with this final rule. These changes are described below under the heading “(6)

Clarifications to the April 16 (initial implementation) rule.”

(A) Revision of License Exceptions Section Heading

This final rule revises the License Exceptions section heading to add greater specificity. Specifically, this rule revises the section heading by changing it from “License Exceptions” to the more specific section heading of “List-Based License Exceptions (See Part 740 for a description of all license exceptions).” This rule also adds a parenthetical after the revised section heading to provide a cross reference to the license exceptions part of the EAR. This rule adds this cross reference because a definitive determination of whether a license exception may be used for a specific ECCN can only be made after also reviewing the applicable license exception provisions in part 740 of the EAR. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

This final rule also makes this change to the following ECCNs: 9A610, 9A619, 9B610, 9B619, 9C610, 9C619, 9D610, 9D619, 9E610, and 9E619, as added in the April 16 (initial implementation) rule (78 FR 22718), which goes into effect on October 15, 2013. In addition, this final rule makes this change to the following ECCNs: 0A606, 0A617, 0B606, 0B617, 0C606, 0C617, 0D606, 0D617, 0D617, 0E606, 0E617, 8A609, 8A620, 8B609, 8B620, 8C609, 8D609, 8D620, 8E609, and 8E620, as added July 8 (implementation) rule (78 FR 40892), which goes into effect on January 6, 2014.

(B) Removal of the License Exception STA Paragraphs

In order to implement the changes described above under (A)

Revision of License Exceptions section heading,

this final rule is also removing the License Exception STA paragraph in the License Exceptions section of the following seventy-nine ECCNs: 0A606, 0A617, 0B606, 0B617, 0C606, 0C617, 0D606, 0D617, 0D617, 0E606, 0E617, 1A002, 1C001, 1C007, 1C010, 1C012, 1D002, 1E001, 1E002, 2D001, 2E001, 2E002, 3A002, 3B001, 3D001, 3E001, 4A001, 4D001, 4E001, 5A001, 5B001, 5D001, 5E001, 6A001, 6A002, 6A003, 6A004, 6A006, 6A008, 6B008, 6D001, 6D003, 6E001, 6E002, 7D003, 7E001, 7E002, 8A001, 8A002, 8A609, 8A620, 8B609, 8B620, 8C609, 8D001, 8D002, 8E001, 8E002, 8D609, 8D620, 8E609, 8E620, 9A610, 9A619, 9B001, 9B610, 9B619, 9C610, 9C619, 9D001, 9D002, 9D004, 9D610, 9D619, 9E001, 9E002, 9E003, 9E610, and 9E619. This rule moves the text of those License Exception STA paragraphs to a new section titled “Special Conditions for STA.” This rule is creating this new section immediately following the proposed “List-Based License Exceptions (See Part 740 for a description of all license exceptions)” instruction because the License Exception STA paragraphs do not perform the same function as the other list-based license exception paragraphs. This rule is not implementing any changes to the regulatory text included in the current License Exception STA paragraphs of these ECCNs. These STA changes include the thirty “600 series” ECCNs referenced above (0A606, 0A617, 0B606, 0B617, 0C606, 0C617, 0D606, 0D617, 0D617, 0E606, 0E617, 8A609, 8A620, 8B609, 8B620, 8C609, 8D609, 8D620, 8E609, 8E620, 9A610, 9A610, 9B610, 9B619, 9C610, 9C619, 9D610, 9D619, 9E610 and 9E619) that were not included in the November 29 proposed rule, but are now included because ten of these ECCNs were published in the initial implementation rule and will be in the EAR on the effective date of this final rule, and the other twenty have been published in the July 8 (implementation) rule. The July 8 (implementation) rule is not effective until January 6, 2014, but the changes being implemented in this rule will align these twenty “600 series” ECCNs with structural changes being made to the ECCN headings when that rule does become effective. The changes implemented in this rule are limited to adding a new section heading and moving the existing License Exception STA paragraphs in these seventy-nine ECCNs to the new STA section heading. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

(C) Adding a Cross-Reference After Country Chart

This final rule is revising the “Country Chart” paragraph heading in the License Requirements section to add a parenthetical to indicate where the public can find the Country Chart. The revised Country Chart paragraph heading will now read “Country Chart (See Supp. No. 1 to part 738).” Not all ECCNs include a Country Chart paragraph and a small number of ECCNs do not rely on the Commerce Country Chart for determining destination-based

license requirements. Most ECCNs, however, are structured to refer to the information contained in the Country Chart paragraph in Supplement No. 1 to part 738 to identify destination-based license requirements. The changes in this rule will clarify that for the ECCNs that use this structure, exporters, reexporters and transferors need to refer to the Country Chart in Supplement No. 1 to part 738 to determine destination-based license requirements. For experienced exporters, reexporters, and transferors, this structure is well understood. The new cross references are primarily intended for those exporters, reexporters, and transferors who are new to the EAR and who may not as readily understand the relationship between this standard ECCN paragraph and Supplement No. 1 to part 738. The new parenthetical phrase at the end of the Country Chart paragraph will make the relationship explicit. BIS did not receive any comments on this change, so BIS is implementing this change, as proposed, in this final rule.

This final rule also makes this change to the following ECCNs: 9A610, 9A619, 9B610, 9B619, 9C610, 9C619, 9D610, 9D619, 9E610, and 9E619, as added in the April 16 (initial implementation) rule (78 FR 22718), which goes into effect on October 15, 2013. In addition, this final rule also makes this change to the following ECCNs: 0A606, 0A617, 0B606, 0B617, 0C606, 0C617, 0D606, 0D617, 0D617, 0E606, 0E617, 8A609, 8A620, 8B609, 8B620, 8C609, 8D609, 8D620, 8E609, and 8E620, as added July 8 (implementation) rule (78 FR 40892), which goes into effect on January 6, 2014.

(D) Adding a New “Reporting Requirements” Section to Certain ECCNs

Some ECCNs include references to reporting requirements, which are typically found either in License Requirement notes or in notes to the “items” paragraphs in the List of Items Controlled section. BIS has adopted a standardized paragraph structure for ECCNs, as much as possible, to assist the public in classifying items. A standardized paragraph structure helps the public classify items by putting the information contained in an ECCN into a useable and easily recognizable format. The current reporting requirements, which are found in various sections and paragraphs of the individual ECCNs, deviate from this type of standardized structure. To address this issue, this final rule is adding a new section heading called Reporting Requirements where the existing reporting requirements found in ECCNs will be consolidated. This rule is not making any changes to the scope of current reporting requirements. This standardized structure will aid in compliance with the reporting requirements and assist exporters in more quickly and easily identifying ECCNs subject to reporting requirements. The rule is adding the new Reporting Requirements section heading immediately before the License Exceptions section.

To implement this change in Supplement No. 1 to part 774 (the Commerce Control List), this final rule removes the “License Requirements Notes” paragraphs in the License Requirements section in the following forty-three ECCNs: 1A002, 1C007, 1C010, 1D002, 1E001, 1E002, 2B003, 2D001, 2E001, 2E002, 3A002, 3B001, 3D001, 3E001, 4A001, 4E001, 5A001, 5B001, 5D001, 5E001, 6A001, 6A002, 6A003, 6A004, 6A006, 6A008, 6B008, 6D001, 6D003, 6E001, 6E002, 8A001, 8A002, 8D001, 8D002, 8E001, 8E002, 9B001, 9D001, 9D002, 9E001, 9E002 and 9E003. In forty-two of these ECCNs and in six additional ECCNs: 1C001, 4D001, 7D002, 7D003, 7E001, 7E002, this rule adds the new section entitled “REPORTING REQUIREMENTS See § 743.1 of the EAR for reporting requirements for exports under License Exceptions, Special Comprehensive Licenses, and Validated End-User authorizations” after the License Requirements section in each of these respective ECCNs. BIS is adding the “REPORTING REQUIREMENTS” paragraph to ECCNs 1C001, 4D001, 7D002, 7D003, 7E001 and 7E002 to alert exporters that reporting requirements were imposed on these ECCNs in the April 16 (initial implementation) rule through the changes to § 743.1 and the addition of the Wassenaar Arrangement Sensitive and Very Sensitive Lists as Supplements Nos. 6 and 7 to Part 774. In ECCN 6A003, this rule adds a Reporting Requirement section with a more detailed statement describing the specific reporting requirement applicable to that ECCN. This rule also changes the new Reporting Requirements section to ensure that the text conforms to the listing of authorizations in § 743.1 that require reporting to BIS. Lastly, this rule removes the License Requirement Note in 3B001, but does not add a Reporting Requirements section because 3B001 is not identified in § 743.1, so the reference is no longer needed.

Commenter No. 8 requested that additional explanation be provided regarding the role of other License Requirements Notes on the CCL and whether such notes should be renamed to better reflect their role in those ECCNs. This commenter noted that unlike other elements of an ECCN, the EAR does not address what significance exporters should give such notes when interpreting an ECCN. This commenter noted that it would stand to reason that these notes are commentary relevant to “License Requirements” section. That section, however, addresses reasons why export of an item might require a license, whereas notes often purport to address substantive scope of an ECCN. BIS does not believe any additional renaming of the License Requirements Notes is needed at this time, but BIS will continue to review this issue as an additional option for making the CCL clearer. At this time, the License Requirements Notes tend to have an ECCN-specific meaning, typically describing in greater detail the scope of the ECCN or the license requirements applicable to a specific ECCN.

Commenter No. 8 also provided the example of the License Requirement Note 1 to 1C351, which states that certain medical products containing most ECCN 1C351 toxins are excluded from 1C351, to illustrate his concern and request for guidance. Commenter No. 8 asserted that this creates the impression 1C351 would control medical products containing some toxins listed in that ECCN, or possibly even other items covered by 1C351. The “items” paragraph of 1C351, however, covers only stand-alone viruses, bacteria, toxins and fungi. The EAR require that all items controlled under a given ECCN be set out in a positive list in the “items” paragraph, but ECCN 1C351's “items” paragraph does not identify any item that contains a toxin, virus, etc., contrary to the implication created by License Requirement Note 1. The commenter also contended that BIS takes the position that ECCN 1C351 does control items containing such ECCN 1C351 items. In addition to the general response above on the comment for renaming the License Requirements Notes, BIS provides this specific guidance on the meaning of the License Requirement Note in 1C351. The License Requirement Note is explicit regarding what is excluded from 1C351 and what is classified as 1C991 by specifying in the last sentence of the License Requirement Note that “vaccines, immunotoxins, certain medical products, and diagnostic and food testing kits excluded from the scope of this entry are controlled under ECCN 1C991.” Other products may be 1C351, such as tissue samples that have pathogens. However, if this person or

any other person has a question regarding the classification of a particular material or the applicability of a License Requirements Note, he or she may submit a commodity classification request to BIS using the SNAP-R online submission system. BIS did not receive any other comments on this change, so BIS is implementing it, as proposed, in this final rule.

(E)

Section 738.2(d)(2)(Reading an ECCN).

Commenter No. 8 noted that the explanations in the November 29 proposed rule of the relationship between the heading of an ECCN and its “items” paragraph, and the significance of the placement of the phrase “(see List of Items Controlled)” in the heading, are at odds with the instructions on reading an ECCN in § 738.2(d)(2) of the EAR. Section 738.2(d)(2) states that the “items” paragraph in the List of Items Controlled section is the list of items controlled under that ECCN and that if the header is a complete list, the “items” paragraph consists solely of a note directing the reader to review the heading.

BIS accepts this comment and revises § 738.2(d)(2) of the EAR to address the commenter's concerns, and adds new paragraphs (d)(2)(iv)(C)(1), (2), and (3) to provide examples of the three different uses of the phrase “(see List of Items Controlled)” in ECCN headings. Understanding the relationship between the heading and the “items” paragraph is important when classifying items that are “subject to the EAR” on the CCL and these examples will assist the public's understanding of these provisions of the EAR. These revisions reflect that the ECCN heading is a list of the items controlled in the ECCN and that the “items” paragraph in the List of Items Controlled section will completely describe portions of the ECCN heading subject to control if the phrase “(see List of Items Controlled)” is in the heading. If the phrase “(see List of Items Controlled)” does not appear in the heading, the heading is complete. An example of such a heading is ECCN 4E980 “[t]echnology” for the “development,” “production” or “use” of commodities controlled by 4A980. ECCNs 0A982, 3A292, 5D101, 8D001, and 9A002 are other examples where the heading is the exclusive description of the items classified under those respective ECCNs.

If the phrase “(see List of Items Controlled)” appears at the end of the heading, the “items” paragraph in the List of Items Controlled section is a complete, exclusive description of the items controlled under that ECCN and the heading is merely for reference purposes. An example of an ECCN where all of the heading text precedes the phrase “(see List of Items Controlled)” is ECCN 8A002 Marine systems, equipment, “parts” and “components,” as follows (see List of Items Controlled). ECCNs 1A001, 3A001, 6A001, 7A004, and 9A012 are other examples where all of the heading text precedes the phrase “(see List of Items Controlled).”

If the phrase “(see List of Items Controlled)” appears in the middle of the heading, the “items” paragraph in the List of Items Controlled section is a description of the items controlled under that ECCN for the portion of the heading that preceded the phrase. However, any portion of the heading that follows the phrase “(see List of Items Controlled)” is to be read in addition to the “items” paragraph. An example of such a heading is ECCN 2B992 Non-“numerically controlled” machine tools for generating optical quality surfaces, (see List of Items Controlled) and “specially designed” “parts” and “components” therefor. ECCNs 1A006, 3B992, 4A001, 6A006, and 7A001 are other examples where the phrase “(see List of Items Controlled)” appears in the middle of the ECCN heading. BIS has identified seven additional ECCNs that require the phrase “(see List of Items Controlled)” in the ECCN headings: 1C350, 1C355, 1C992, 2A991, 3B992, 5A992, and 9A004. In each of these ECCNs, the heading is not a complete description of the items controlled under that ECCN and the “items” paragraph of the List of Items Controlled section details the items controlled. Therefore, BIS implements the changes suggested by the commenter in this final rule.

(F) Addition of Guidance on the Use of Quotation Marks on the CCL

In addition to the changes described below for § 774.1, this final rule also revises this section to add a new paragraph (d) entitled

Conventions related to the use of quotation marks on the CCL.

This new paragraph provides guidance on the use of quotation marks on the CCL. This guidance is not a substantive change to the CCL and is limited to providing guidance on BIS's current practice as it relates to the use of quotation marks on the CCL. BIS did not propose this in the November 29 proposed rule, but identified this as an additional non-substantive clarification that could be made to the CCL. Therefore, BIS is implementing this change in this final rule.

As background for this new guidance, part 772 includes definitions for terms used in the EAR. Throughout the EAR, but most prevalent in the CCL, BIS uses the convention of double quotes to identify terms that are defined in part 772. If a term on the CCL uses double quotes, it means it is a defined term in part 772. However, the absence of double quotes does not mean that a term used on the CCL is not defined in part 772. Because the CCL includes many terms that are defined in part 772, BIS's practice is to use double quotes for certain defined terms and when it is needed for consistency with multilateral export control regime based entries, such as many derived from control lists, in particular for the Wassenaar Arrangement that also uses the double quotes convention. However, because of the large number of defined terms used on the CCL and a desire to avoid hindering readability by placing quotes around too many terms used in particular ECCNs, BIS's practice is to not add double quotes around certain terms, such as items and commodities.

The CCL also includes a convention regarding the use of single quotes. Single quotes on the CCL identify a term as a defined term in the context of a particular ECCN. However, even within BIS or other parts of the U.S. Government these conventions as they relate to the use of quotes can sometimes become more complex than needed. As a longer term project, BIS intends to conduct a review on the use of quotation marks on the CCL and in the larger EAR to determine if a simpler approach could be developed, such as possibly eliminating the use of double quotation marks to avoid the incorrect negative inference that the only defined terms are those with double quotation marks. The opposite end of the spectrum would be to add quotes around all defined terms, but that would hinder the readability of the CCL.

The use of quotation marks on the CCL is intended to be an aid to alert the reader to terms used on the CCL that are defined in part 772. In this sense the quotes are helpful, but a good compliance practice is to familiarize yourself with part 772 and the terms that are defined there, and when reviewing a control parameter on the CCL that uses a term that is not in quotes to be aware it may be defined in part 772.

(4) Removal of Fourteen ECCNs Subject to the Exclusive Jurisdiction of the Nuclear Regulatory Commission (NRC)

(A) Removal of Fourteen ECCNs

In the November 29 proposed rule, BIS proposed removing fourteen ECCNs to eliminate certain cross-references to controls that are under the exclusive jurisdiction of other agencies. The

current CCL includes forty-nine ECCNs that refer to items that are subject to the exclusive jurisdiction of the Department of Energy (DOE), the NRC, or the Department of State. They constitute approximately 10% of the total number of ECCNs on the CCL. Of the forty-nine ECCNs, fourteen are subject to the export licensing authority of the NRC at 10 CFR part 110. This final rule is removing these fourteen ECCNs from the CCL. The fourteen ECCNs are 0A001, 0B001, 0B002, 0B003, 0B004, 0B005, 0B006, 0C001, 0C002, 0C004, 0C005, 0C006, 0C201 and 1C012. These ECCNs are Nuclear Trigger List items, so the jurisdiction of these items is already established under U.S. export controls and, as explained below, there is no need to include this additional cross reference from the CCL to the controls maintained by the Nuclear Regulatory Commission.

BIS's original purpose for including these ECCNs on the CCL was to supplement § 734.3

(Items subject to the EAR)

under paragraph (b)(1), which describes items that are not subject to the EAR because they are subject to the exclusive jurisdiction of another agency of the U.S. Government, and to supplement the jurisdiction information for the other U.S. Government agencies found in Supplement No. 3 to part 730

(Other U.S. Government Departments and Agencies with Export Control Responsibilities).

BIS also included these ECCNs to better align the CCL with the European Union's control lists that are primarily based on the multilateral export control regimes. However, by including references to other agencies' controls in specific ECCNs there is the potential that such ECCN references will become out of date if the other agencies update their respective regulations and the corresponding changes are not made in the EAR in a timely manner.

For example, on September 7, 2011 (76 FR 55278), the National Nuclear Security Administration, Department of Energy (DOE), published a notice of proposed rulemaking that proposed various amendments to regulations concerning unclassified assistance to foreign atomic energy activities. These proposed revisions were intended to reduce uncertainties for industry users concerning which foreign nuclear related activities by U.S. persons are “generally authorized” under the regulation and which activities require a “specific authorization” from the Secretary of Energy. However, if the ECCNs on the CCL that currently refer to DOE and the NRC controls are not updated, the uncertainties for exporters, reexporters and transferors would increase because of inconsistencies among the regulations. This rule only removes the fourteen ECCNs that refer to NRC controls. The ECCN that refers to DOE export controls is ECCN 0E001, and that ECCN is not being removed at this time because it also includes certain portions of the entry that are “subject to the ITAR.” However, to avoid uncertainties for exporters, reexporters and transferors as noted in the example above, BIS will endeavor to remove cross references to ECCNs that refer to DOE and NRC controls to avoid inconsistencies among regulations. Given that the NRC respective regulations are controlling in this area and these ECCNs are only acting as a cross reference, BIS proposed the removal of these ECCNs in the November 29 rule.

Although BIS proposed to remove the cross-references, BIS has determined there still is utility in including general cross references to other agencies' controls, including after the review of the comments received in response to the November 29 rule. Thus, this final rule includes a general cross reference at the beginning of the CCL in a revised § 774.1 (Introduction) that contains those ECCNs that have been reserved and are subject to the exclusive jurisdiction of another agency of the U.S. Government. In addition, the related control paragraphs of ECCNs contain cross references to controls of other agencies to the extent that such controls are similar to or related to the controls of certain ECCNs.

The remaining thirty-five of the forty-nine ECCNs refer to items that are “subject to the ITAR,” which is maintained by the Department of State. Given the ongoing review of the United States Munitions List (USML) that is being conducted under the ECR Initiative, it is premature to remove or revise these thirty-five ECCNs. In addition, given the number of cross references, in particular in Categories 7 and 9 of the CCL, to these thirty-five ECCNs, BIS determined that removing the ECCNs that are “subject to the ITAR” should be addressed once the review of the USML has been completed. Therefore, BIS is not implementing any additional changes in this final rule for those remaining 35 ECCNs.

BIS received two comments on these proposed changes in the November 29 rule. One commenter supported and one commenter opposed the changes. Commenter No. 7 supported the removal of the fourteen ECCNs, stating that these changes will avoid regulatory confusion and eliminate the need for BIS to continually update controls administered by a different agency. BIS agrees. Commenter No. 3 opposed the removal of these fourteen ECCNs, stating that the removal of the fourteen ECCNs would not result in clarity but rather in complexity. Commenter No. 3 included a number of reasons supporting their position and also included suggested alternatives. BIS reviewed these comments and responds to these comments below. BIS's analysis also included conducting analysis of data in the Automated Export System (AES) for these fourteen ECCNs to further evaluate these changes. The analysis of the AES data in particular highlighted for BIS and the NRC that these cross references have not been reported properly in AES in certain cases, such as EAR license exceptions or No License Required (NLR) designations being reported for some of these fourteen ECCNs that are subject to the NRC. BIS is working with the U.S. Census Bureau and the NRC at this time to create a change in AES that will create a fatal error for AES filers who try to use any type of EAR authorization or NLR designation for these fourteen ECCNs that are subject to the exclusive jurisdiction of the NRC and that are being removed from the CCL in this final rule. BIS addresses the comments received below, but the review of the AES data also played an important role in informing BIS's decision to move forward with the implementation of the removal of these fourteen ECCNs as proposed in the November 29 rule with minor modifications based on the review of the public comments.

Commenter No. 3 indicated the removal of the fourteen ECCNs leaves exporters without valid ECCNs and no viable alternative is offered. Commenter No. 3 noted the proposed replacement list in § 774.1 of the EAR is little more than a difficult-to-find and difficult-to-use footnote. BIS understands that certain exporters are more comfortable with using the CCL than the NRC's control list, but the fact remains these items are not subject to the EAR. Therefore, although these fourteen ECCNs alert the public that these items are subject to the exclusive jurisdiction of the NRC, exporters still must review the NRC's control list and regulations to determine their responsibilities under the NRC regulations. There is and can be no easy substitute for reviewing the NRC's control list. The new CCL Order of Review that was added to the EAR in the initial implementation final rule published on April 16, 2013 further clarified this issue in terms of the proposed order of review of the CCL. If the item is not subject to the EAR

because it is subject to the exclusive jurisdiction of another U.S. Government export control agency, you should exit the EAR and consult the other agency's controls. Other parts of the EAR, such as Supplement No. 3 to part 730 referenced above and § 734.3(b), also address this issue. BIS has made some changes to § 774.1 to make those references more useful as a historical reference to these fourteen ECCNs and to also act as a better cross reference to the multilateral export control regime entries that applied to these fourteen ECCNs at the time of their removal.

Commenter No. 3 also noted the negative impact on Customs and Border Protection (CBP) because CBP cannot rely on those fourteen ECCNs anymore. The commenter noted that the NRC's regulations under 10 CFR part 110 do not use the standard ECCN format, so Customs cannot directly relate ECCNs on the shipping document to NRC export controls. The commenter noted if these fourteen ECCNs are removed as proposed in the November 29 rule, Customs officers would need to refer to an old version of the CCL or possibly to the European Union (EU) control list. BIS does not agree with this comment. CBP does not and should not rely on the CCL for items that are subject to the exclusive jurisdiction of another agency of the U.S. Government. For items described in these fourteen ECCN cross references or any other item that is subject to the exclusive jurisdiction of the NRC, CBP evaluates whether the item is subject to the exclusive jurisdiction of the NRC and whether it is being exported in accordance with the NRC's regulations. The EAR does not enter into their analysis. If there is any question regarding the jurisdiction or classification of the item or whether it is being exported in accordance with the NRC regulations, CBP would follow up directly with the NRC, similar to what is done under the EAR for items that are subject to the EAR. As noted above, the NRC's list and regulations control the transaction; therefore, CBP would refer directly to the NRC's list.

Commenter No. 3, who opposes the change, also noted that if the fourteen NRC ECCNs were removed from CCL, an exporter could erroneously choose to use no ECCN, to invent a non-standard ECCN, or to use the (now questionably-documented) former CCL ECCN. As BIS noted in response to the previous comment, the exporter should use the classification for the item based on the NRC's control list. The exporter should also use the applicable NRC authorization or designation when entering data in AES. Under no circumstances should an EAR authorization or NLR designation be used in AES for an item that is subject to the exclusive jurisdiction of the NRC. As noted above, BIS and the NRC are working with the U.S. Census Bureau to create a fatal error, which is expected to be implemented in 2014, to prevent filers from being able to reference EAR authorizations or the NLR designation.

Commenter No. 3 also noted the proposed language for some ECCNs is cumbersome, awkward and confusing. Commenter No. 3 offered ECCN 3A233 as an example, stating the proposed language is cumbersome and awkward, requiring 40 words (including two defined terms) to describe an exclusion that the current language accomplishes in six words. On a related issue this commenter stated that the proposed changes do not prevent cross-references from becoming out of date, and therefore might not reduce maintenance. In the existing CCL, the NRC ECCNs are clearly partitioned from the BIS ECCNs, but the proposed rule would blur the distinction, in some cases by adding Heading Notes (e.g., 3A225) and in other cases modifying the chapeau itself (e.g., 3A233). The commenter noted that both approaches incorporate more tightly into the CCL the NRC control language that BIS wishes to remove. The commenter asserted that the probable outcome of this proposal would increase rather than decrease BIS maintenance. As a result of BIS's review of these comments, BIS has made changes in the final rule. BIS will not be implementing the Heading Notes. In other places where a large amount of text was needed, BIS has removed the detailed description of the NRC controls in ECCNs that previously referenced one or more of the fourteen ECCNs being removed. This final rule instead includes a general reminder that items that are subject to the exclusive jurisdiction of the NRC are not subject to the scope of the particular ECCN in question. For example, 3A233, which was identified by the commenter as overly complex and ambiguous as proposed for revision in the November 29 rule, is simplified in this final rule as described in the next paragraph, along with similar changes being made on the CCL for those conforming changes to the fourteen ECCNs being removed in this final rule.

The changes in this final rule to 3A233 clarify the mass spectrometers controlled under this ECCN do not include “items that are subject to the export licensing authority of the Nuclear Regulatory Commission (see 10 CFR part 110).” This concept is already specified in other parts of the EAR, including the new CCL Order of Review referenced above, but BIS believes this simplified approach will address the concern noted by the commenter, while still alerting the public that certain items related to 3A233 may be subject to the NRC's regulations. BIS is making changes to similar ECCNs where conforming changes are being made, in particular to those ECCNs where new heading notes were proposed. BIS will continue to evaluate the best approach for referencing the NRC's controls and in the future may simply add such information to the “related controls” paragraphs of these ECCNs that are subject to the EAR. However, for purposes of the changes being implemented in this final rule, BIS has determined this modified approach best achieves the objectives of the rule to remove these fourteen ECCNs and to make appropriate conforming changes to the CCL ECCNs where needed, while not re-creating the need to update the CCL to track with changes to the NRC regulations. The commenter correctly noted this was one of the rationales provided for the November 29 changes. BIS agrees with the commenter that a slightly revised approach is needed in this final rule to achieve those objectives.

Commenter No. 3 also noted that timely maintenance of the NRC ECCNs might not be needed. This commenter believed the existing structure of the CCL provides clear and adequate notice to exporters that certain items are subject to the export licensing jurisdiction of the NRC. Therefore, timely maintenance of fourteen NRC ECCNs in the CCL is not required. For the reasons noted above, BIS does not agree with this comment; NRC's regulations would control the transaction, not the CCL, regardless of whether the commenter believes the CCL is an easier list to review. The commenter may wish to contact the NRC and make suggestions for how the NRC control list could be reconfigured to make it more user friendly and more consistent with the structure used by the multilateral export control regimes. The premise that CCL entries are controlling or that the CCL entries can be relied on is incorrect. This analytical approach demonstrates an incorrect overreliance on the CCL for items that are not subject to the EAR, and further reinforces BIS's decision to remove these fourteen ECCNs.

Commenter No. 3 also noted that because the Nuclear Trigger List rarely changes, it is not difficult to stay current with it. BIS agrees that the Nuclear Trigger List rarely changes, but given the importance of exporters making a correct determination regarding the

export control jurisdiction for an item, and the fact that there is a real possibility of the NRC control list and the CCL entries' becoming inconsistent due to ill-timed updating, BIS has determined that the best approach is to create a clean break between the CCL and the NRC regarding items that are subject to the exclusive jurisdiction of the NRC.

Commenter No. 3 also noted the NRC rule example cited in the November 29 proposed rule did not change the Nuclear Trigger List. The cited NRC rule only clarified when a license was required. This commenter is correct, but based on the commenter's earlier comments about relying on the CCL and the fact that it appears from the AES data that certain exporters may not be referring at all to the NRC regulations and simply relying on one of those fourteen ECCNs and using an EAR authorization or NLR designation, any change to the NRC regulations in particular regarding license requirements is still relevant. In addition, there are other examples where the current NRC controls may have greater or less specificity than what is currently reflected on the CCL, which again speaks to the importance of exporters' reviewing the actual NRC control lists instead of relying on the CCL to perform that function for them. This commenter also suggested that ECCN 0B002 contains an error and does not match the Nuclear Trigger List.

BIS reviewed ECCN 0B002 and concluded that the current 0B002 is consistent with the multilateral control list. However, this example provides further support for the decision to remove the fourteen ECCNs so that all descriptions of NRC controls will be in NRC regulations.

BIS provides this paragraph to provide additional background on the reference above to the Nuclear Trigger List and how that fits in with the U.S. export control system. The Nuclear Suppliers Group controls two groups of items. The Part 1 Annex, which is often referred to as the Trigger List, controls those items that are uniquely nuclear, such as nuclear reactors and components; centrifuges and other enrichment equipment; nuclear materials such as uranium and plutonium; heavy water facilities, etc. These and other related items are controlled by the NRC under 10 CFR Part 110. The related Part 1 technology is controlled by the Department of Energy under 10 CFR Part 810. The Part 2 or Dual Use annex, covers those items that have both a nuclear and non-nuclear end use such as machine tools, pressure transducers, mass spectrometers, etc. and are under the licensing jurisdiction of the Department of Commerce. The International Atomic Energy Agency (IAEA) publishes both annexes under INFCIRC/254/Part1 and INFCIRC/254/Part 2. They may also be viewed on the Nuclear Suppliers Group Web site.

Commenter No. 3 also noted that the complexity of text could potentially also create burden for U.S. companies in the event that foreign export control authorities were to request clarification on whether the scope of, for example, U.S. ECCN 3A233 is equivalent to the scope of their national ECCN 3A233. BIS does not see this as a burden and also does not see this as the type of information that should be expected to be provided by a U.S. company. The U.S. Government is available to answer any questions from foreign parties, including other regime member governments, about how U.S. export control lists correspond with multilateral export control regime control lists. Therefore, if a U.S. company receives such a request, they may simply direct those foreign parties to contact the applicable agency of the U.S. Government, in this case the NRC, for resolution.

Commenter No. 3 noted that alignment with the EU control list remains a worthwhile goal. The commenter noted that the November 29 proposed rule did not seek to explain why this goal is no longer worthwhile. BIS has added in this final rule references to the multilateral export control regimes' control list to partially address this comment. The U.S. export control system implements U.S. Government commitments to the multilateral export control regimes in each of the respective agency control lists as applicable for the particular regimes. The removal of these fourteen ECCNs does not change the commitment of the U.S. Government to control such items that are reflected in the NRC control list. For the reasons noted above, though, not removing these fourteen ECCNs on the CCL may cause ambiguity regarding the proper export control jurisdiction between the CCL and the NRC's control lists. For that reason, this final rule removes those entries and replaces them with more general cross references to the NRC's control lists.

Commenter No. 3 noted that the removal of these ECCNs could set an undesirable precedent. This commenter believed U.S. action to split what had hitherto been a single control list into multiple lists could establish a precedent for other countries to do likewise—resulting in more complexity in global export control system. BIS does not agree the removal sets a bad precedent for other countries. Each country that is a member of the multilateral export control regimes implements those multilateral agreements into its own export control system, including determining what types of agency structure (single agency or multiple agencies) and type of control list (single control list or multiple control lists) is most appropriate under its respective national export controls. The importance is placed on implementing U.S. Government multilateral regime commitments, which the U.S. Government has done. This includes the removal of these fourteen ECCNs that, although the cross-references to the NRC controls are being removed from the CCL, are still controlled under the NRC. Therefore, the U.S. Government is meeting its obligations to the Nuclear Suppliers Group and other regimes as applicable, so BIS does not agree that the removal of these fourteen ECCNs will set a bad precedent.

Commenter No. 3 noted that these removals are contrary to the “single control list” goal of export control reform. BIS does not agree. The NRC and DOE regulations are not currently part of the single list objective of the ECR Initiative, so there is no inconsistency with this ECR objective.

Commenter No. 3 also offered two options for BIS to consider instead of removing these fourteen ECCNs, along with various proposed conforming changes to other ECCNs. The first option was retaining these ECCNs because it creates an easy way to identify and classify these items. The commenter asserted that retention of the fourteen NRC ECCNs on the CCL would provide a natural method for U.S. exporters to use an ECCN that is automatically and instantaneously recognized by all parties (exporter, importer, licensing officer, or enforcement officer) worldwide. For the reason discussed above in this section under (4)(A), BIS does not accept this approach.

The second option was to retain the fourteen ECCNs, but limit them to the headings with a cross reference back to the NRC. Under this alternative, the regulations would not remove the fourteen ECCN chapeaux within the CCL, but instead would delete the various subparagraphs of those ECCNs, and for “List of Items Controlled” indicate “refer to NRC at 10 CFR 110.” Simultaneously (so as to preclude the scenario described in option 1, above), the commenter suggested that BIS undertake joint BIS/NRC action to update the NRC control list to use the standard ECCN format. As noted above,

BIS has simplified the cross references to these fourteen ECCNs that were removed in the ECCNs that are retained on the CCL based, in part, on this comment. However, for the reasons noted above, BIS believes removing the fourteen ECCNs is the best way to achieve the policy objectives identified, so BIS does not accept this change.

(B) Changes to the CCL To Conform to the Removal of These Fourteen ECCNs

In addition to removing the fourteen ECCNs, this final rule also makes conforming changes to eleven ECCNs that would be retained on the CCL. The ECCNs that are revised by this rule contain references to one or more of the fourteen ECCNs that are being removed.

The removal of the fourteen ECCNs should not affect the existing controls for items subject to the EAR. However, given the relationship between the fourteen ECCNs removed and the ten ECCNs where conforming changes were made, BIS noted in the November 29 proposed rule that it was particularly interested whether the proposed changes accurately capture the intent of the previous references (i.e., the references to the fourteen ECCNs that would be removed in the ten ECCNs that are retained on the CCL). These comments and BIS' responses are discussed above in this section.

The final rule makes conforming changes to the following eleven ECCNs: 1A290, 1C107, 1C240, 1C298, 3A225, 3A226, 3A227, 3A233, 3A999, 6A005, and 6A205. This rule's revisions consist of the following:

ECCNs 3A225, 3A226, 3A227, 3A233, 6A005, and 6A205.

This final rule revises seven ECCN headings (1C240, 3A225, 3A226, 3A227, 3A233, 6A005, and 6A205). This rule takes this approach to minimize the number of changes that would need to be made, while still ensuring the headings reflect the intended scope of these six ECCNs.

On the CCL, these seven ECCN headings include references to some of the fourteen ECCNs that are being removed as a shorthand way of communicating the scope of items controlled. Therefore, the removal of fourteen ECCNs requires that a broader description be added to the headings of these seven ECCNs. In the November 29 rule, BIS indicated that if only one of the fourteen ECCNs that would be removed is referenced, then BIS believed that in most cases it is easy to incorporate the text of the removed ECCN into the heading of the seven ECCNs. However, there are certain ECCNs that reference one or more of the fourteen ECCNs that are being removed by this rule. In the cases where multiple ECCNs are referenced, an effort to insert all the text into the headings as a conforming change would not be feasible. However, for other ECCNs, the November 29 rule proposed adding heading notes, which would provide more space to describe the substance of the ECCNs that would be removed from the respective headings. After further review, BIS determined a simpler approach could be taken that is also more consistent with the existing EAR by simply including text to alert the public those eleven ECCNs exclude items that are subject to the export licensing authority of the Nuclear Regulatory Commission (see 10 CFR part 110).

ECCNs 1A290, 1C107 and 1E001.

This final rule revises three “related controls” paragraphs in ECCNs 1A290, 1C107 and 1E001. These changes revise references to one or more of the fourteen removed ECCNs in each of the three remaining ECCNs and replace them with a reference, in the related controls paragraph, to the NRC regulations. These changes will reduce the need for cross-referencing in the CCL to the fourteen removed ECCNs. The November 29 rule proposed to describe the NRC controls in the related controls paragraph. The November 29 rule described the approach being adopted as an alternative. BIS welcomed comments from the public regarding whether this alternate approach of simply using broad descriptors or some other approach not yet considered by BIS would be better than what was proposed. After reviewing the public comments, as discussed above, BIS decided to adopt this alternate approach consistent with the above described cross references to the fourteen removed ECCNs in ECCN headings.

ECCN 1E001.

This final rule also revises 1E001 by removing the reference to 1C012 in the License Exception STA paragraph in the License Exceptions section. This ECCN is subject to the exclusive jurisdiction of another agency. Thus, License Exception STA could never be used as the authority to export an item described in 1C012. BIS did not receive any comments on this change, so this change is implemented, as proposed, in this final rule.

ECCN 1C298.

This final rule revises one CCL note in ECCN 1C298 to remove references to one or more of the fourteen ECCNs that would be removed by this rule. BIS did not receive any comments on this change, so this change is implemented, as proposed, in this final rule.

(C) Adding a General Cross Reference to the Fourteen ECCNs That Would Be Removed

In § 774.1 (Introduction), this final rule redesignates the introductory text of the section as paragraph (a) with the heading “Scope of the control list,” and adds a paragraph (b) with the heading “ECCN cross-references for items subject to the exclusive jurisdiction of another agency.” The introductory text of paragraph (b) indicates that prior to the date of publication in the

Federal Register

of this final rule, the CCL contained fourteen ECCNs that were included as cross references on the CCL to the export control regulations administered by the NRC. Paragraph (b) identifies ECCNs formerly listed on the CCL that were subject to the jurisdiction of the NRC at 10 CFR part 110. This rule is adding a note to paragraph (b) to indicate that ECCNs 0D001 and 0E001 (ECCNs that are retained on the CCL) were subject to the jurisdiction of the NRC at 10 CFR part 110 or jurisdiction of the DOE at 10 CFR part 810, but also have certain portions that, as of the date of publication of this rule, were “subject to the ITAR.” These ECCNs are retained on the CCL as a cross reference. For the reasons noted above, BIS will implement these changes, as proposed, in this final rule.

(5) Revisions to Shipping Tolerances and Removal of All “Unit” Paragraphs

BIS in this final rule is revising the way shipping tolerances are calculated and applied under the EAR. This rule revises § 750.11

(Shipping tolerances)

to state that all items are licensed based on both quantity and value of the items. Quantity will be denominated in the unit of quantity that is in general commercial usage for the trade of each item. All licenses will be strictly limited by the quantity approved on the license and no shipping tolerance will be available to exceed that quantity. A shipping tolerance of ten percent will be available on the total approved value for all commodities subject to the EAR to account for price uncertainty and price inflation over the four year validity period of the license. Additionally, this rule removes the “Unit” paragraph from the List of Items Controlled section of every ECCN on the CCL. BIS will no longer differentiate between items based on unit for the availability of shipping tolerances, so all commodities will be licensed in the unit of quantity commonly used in the trade of that good. This final rule also makes conforming changes to paragraph (d)(2)(iii)(A) of § 738.2 (Commerce Control List (CCL) structure); § 738.4

(Determining whether a license is required); § 742.2 (

Proliferation of chemical and biological weapons

)(e); paragraph (e)(Quantity) and (f)(Units) of Supplement No. 1 to Part 748—BIS-748P, BIS-748P-A: Item Appendix, and BIS-748P-B: End-User Appendix; Multipurpose Application Instructions;, and paragraphs (c)(1)(ii), (c)(1), (viii) and (f) of § 750.7 (

Issuance of Licenses

).

BIS is making these revisions to the EAR as a result of public comments received in response to the proposed rule and to a notice of inquiry (NOI),

Request for Public Comments on Shipping Tolerances for Export Licenses Issued by the Bureau of Industry and Security (BIS),

that BIS published on July 5, 2012 (77 FR 39679). In the NOI, the public was requested to provide responses to the following three issues:

(1) If the current Export Administration Regulations (EAR) shipping tolerance rules should be maintained or if changes should be made that facilitate automatic calculation of the remaining license value;

(2) If the EAR shipping tolerance rules were changed, (i) should BIS continue to exclude certain Export Control Classification Numbers (ECCNs) from having an allowable shipping tolerance, and (ii) should the dollar value-based shipping tolerance be set at ten percent to match the Department of State rules; and

(3) Whether an automatic calculation of the dollar value-based shipping tolerance in AES (electronic decrementation) would assist exporters in maintaining compliance with the allowable shipping dollar value of the license.

BIS received 11 comments in response to the NOI. Most were supportive of automatic decrementation of the license value. One commenter noted that quantity is not automatically checked against the licensed amount under the current DDTC system or the BIS proposal, and that calculation of quantity overages presents a risk of violations. Two commenters noted that a single percentage for all commodities would be simpler and easier to calculate. Additional comments were outside the scope of the inquiry and addressed AES specific issues.

BIS received one comment in response to the November 29 proposed rule that related to unit paragraphs. The commenter identified several unit paragraphs that contained listings for types of items that are not controlled in that ECCN. This comment and the BIS response was also discussed above.

Based on the commenters' support for the automatic decrementation and the desire for a single, simple shipping tolerance threshold across the EAR, BIS is undertaking this revision of the EAR. Automatic decrementation can only be calculated on the monetary value of the shipment, so to simplify and standardize the shipping tolerances, BIS is allowing shipping tolerances on value for all items. Additionally, BIS is no longer allowing any shipping tolerance to the quantity approved in the license. This change requires BIS to revise how shipping tolerances are calculated and when they are allowed.

Commodities on the CCL are currently assigned a unit of quantity in the “Unit” paragraph in the List of Items Controlled section of each ECCN. These units of quantity are number, dollar value, or area, weight or other measure. The commodities are licensed in this unit of quantity, meaning that a license for an item denominated in number authorizes shipments of the commodity until the number has been reached. For items licensed in number or area, weight or other measure, the exporter must estimate the per unit cost and the license contains a total dollar value authorized. For items denominated in value, the exporter must provide BIS the number in whatever unit of quantity is common in that trade and the license contains a quantity authorized.

Presently, shipping tolerances are available to allow exporters to legally exceed the quantity or value on the license in certain circumstances. Items denominated in number are eligible for a shipping tolerance of up to twenty-five percent of the value authorized on the license. Items denominated in area, weight or other measure are eligible for a shipping tolerance of up to twenty-fi

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