Revision of Firearms License Requirements

Federal RegisterApr 30, 2024

Ask Donna

What actually matters in this document.

Text

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 732, 734, 738, 740, 742, 743, 748, 750, 758, 762, 772, and 774

[Docket No. 240419-0113]

RIN 0694-AJ46

Revision of Firearms License Requirements

AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Interim final rule.

SUMMARY:

In this interim final rule (IFR), the Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to enhance the control structure for firearms and related items. These changes will better protect U.S. national security and foreign policy interests, which include countering the diversion and misuse of firearms and related items and advancing human rights. This rule identifies semi-automatic firearms under new Export Control Classification Numbers (ECCNs); adds additional license requirements for Crime Control and Detection (CC) items, thereby resulting in additional restrictions on the availability of license exceptions for most destinations; amends license review policies so that they are more explicit as to the nature of review that will accompany different types of transactions and license exception availability (including adding a new list of high-risk destinations); updates and expands requirements for support documentation submitted with license applications; and better accounts for the import documentation requirements of other countries (such as an import certificate or other permit prior to importation) when firearms and related items are authorized under a BIS license exception. BIS is publishing this rule as an IFR to solicit comments from the public on additional changes to export controls on firearms and related items that would better protect U.S. national security and foreign policy interests.

DATES:

This rule is effective May 30, 2024. Comments must be received by BIS no later than July 1, 2024.

ADDRESSES:

Comments on this rule may be submitted to the Federal rulemaking portal (

www.regulations.gov

). The

regulations.gov

ID for this rule is: BIS-2024-0003. Please refer to RIN 0694-AJ46 in all comments.

All filers using the portal should use the name of the person or entity submitting the comments as the name of their files, in accordance with the instructions below. Anyone submitting business confidential information should clearly identify the business confidential portion at the time of submission, file a statement justifying nondisclosure and referring to the specific legal authority claimed, and provide a non-confidential version of the submission.

For comments submitted electronically containing business confidential information, the file name of the business confidential version should begin with the characters “BC.” Any page containing business confidential information must be clearly marked “BUSINESS CONFIDENTIAL” on the top of that page. The corresponding non-confidential version of those comments must be clearly marked “PUBLIC.” The file name of the non-confidential version should begin with the character “P.” Any submissions with file names that do not begin with either a “BC” or a “P” will be assumed to be public and will be made publicly available through

https://www.regulations.gov

. Commenters submitting business confidential information are encouraged to scan a hard copy of the non-confidential version to create an image of the file, rather than submitting a digital copy with redactions applied, to avoid inadvertent redaction errors which could enable the public to read business confidential information.

The Firearms Guidance Memorandum is available at

www.bis.gov/guidance_memorandum

and at

www.regulations.gov

under the

regulations.gov

ID BIS-2024-0003.

FOR FURTHER INFORMATION CONTACT:

Anthony Christino, Acting Director, Office of Nonproliferation and Foreign Policy Controls; tel. (202) 482-3825 or email

NFPC_firearms@bis.doc.gov

SUPPLEMENTARY INFORMATION:

A. Background

BIS is amending the EAR (15 CFR parts 730-774) by revising the license requirements and review policies, as well as other aspects of the control structure (

e.g.,

license exceptions eligibility and export clearance requirements) for firearms, shotguns and related items (

e.g.,

discharge type arms, optical devices, ammunition, and related technology and software) controlled under the following ECCNs: 0A501, 0A502, 0A504, 0A505, 0A506, 0A507, 0A508, 0A509, 0B501, 0B505, 0D501, 0D505, 0E501, 0E504, and 0E505 (collectively referred to as firearms and related items for the purposes of this IFR). Background regarding these changes is detailed below.

1. History of EAR Firearms Controls

Firearms and related items have been controlled in the current structure by the Commerce Department (Commerce) under the EAR since March 9, 2020, when jurisdiction over certain end-item firearms and related items was transferred from the State Department's (State) United States Munitions List (USML) (

see

22 CFR part 121) to the Commerce Control List (CCL), supplement no. 1 to part 774 of the EAR, maintained by BIS.

See

the January 23, 2020, BIS final rule, “Control of Firearms, Guns, Ammunition and Related Articles the President Determines No Longer Warrant Control Under the United States Munitions List (USML)” (85 FR 4136) (January 2020 EAR final rule; effective date: March 9, 2020) and the January 20, 2020, State final rule, “International Traffic in Arms Regulations: U.S. Munitions List Categories I, II, and III.” (85 FR 3819; effective date: March 9, 2020). Notably, BIS controlled long barrel shotguns prior to the publication of those rules. For the past almost four years, BIS has required that authorization be obtained for all exports and reexports of these firearms and related items to all destinations, including Canada. This worldwide license requirement under the EAR for firearms and certain related items is more restrictive than the license requirement that applies to other items whose jurisdiction transferred from the USML to the CCL as part of the Export Control Reform initiative (

i.e.,

the “600 series” military items and 9x515 spacecraft items), as the license requirement for those other items in most cases does not extend to Canada.

In addition to the worldwide license requirement, since March 9, 2020, BIS has maintained other requirements with respect to firearms and related items. These include certain export clearance requirements that provide increased transparency regarding the specific items being exported; limitations on the availability of license exceptions; certain recordkeeping requirements; and requirements to address temporary imports into the United States. As referenced in the January 2020 EAR final rule, these requirements were imposed to ensure, as much as possible, that the EAR control structure for firearms and related items would protect U.S. national security and foreign policy interests, which include countering diversion and misuse of firearms and related items and advancing human rights. As part of this control structure, BIS included provisions to ensure that U.S. export

controls under the EAR account for the firearms-related import controls of other countries; specifically, the use of BIS licenses is predicated on having an Import Certificate or other permit (if required) by the importing country.

2. Firearms Licensing Pause

On October 27, 2023, Commerce paused the issuance of new BIS export licenses involving certain firearms, related “parts” and “components,” and ammunition (detailed under ECCNs 0A501, 0A502, 0A504, and 0A505) to non-governmental end users not located in Ukraine, Israel, and most Wassenaar Arrangement Participating States (

i.e.,

Country Group A:1, supplement no. 1 to part 740). During this “pause,” Commerce assessed export control review policies for firearms and related items to determine whether any changes to the regulatory measures implemented in March 2020 were warranted to advance U.S. national security and foreign policy interests. The review focused on assessing and mitigating the risk of firearms being diverted to entities or activities that promote regional instability, abuse or violate human rights, or fuel criminal activities, including terrorism, extortion, and illicit trafficking of any kind.

This pause followed the identification by Commerce over the past year of several instances in which lawfully exported firearms and related items from the United States have been diverted or misused in a manner contrary to U.S. national security and foreign policy interests; this includes instances predating the transfer of licensing authorities from State to the Commerce Department. Because those instances of diversion largely involved commercial exports to non-governmental end users, Commerce tailored the pause to apply only to exports involving non-governmental end users.

Leading up to the pause, Commerce reviewed aggregate data showing that a substantial number of firearms recovered by foreign law enforcement agencies were lawfully exported from the United States. For example, a GAO report published in January 2022 identified concerns that the U.S. government is licensing firearm exports that fuel criminal activity and gun violence, enable human rights abuses, and destabilize government institutions in foreign countries, particularly in Central America.

The report explained that in Belize, El Salvador, Guatemala, and Honduras, transnational criminal organizations and other violent criminals frequently use firearms to commit murders for hire, carry out extortion schemes, and resist local police forces. The report further explained that, between 2015 and 2019, nearly 20% of approximately 27,000 firearms recovered and traced by law enforcement agencies in those four countries were U.S.-origin firearms diverted from legitimate commerce (

i.e.,

they were not illicitly smuggled from the United States, but rather lawfully exported).

United States Government Accountability Office,

Firearms Trafficking: More Information is Needed to Inform U.S. Efforts in Central America

(Jan. 2022) (“GAO Report”),

https://www.gao.gov/assets/gao-22-104680.pdf

The 2023 National Firearms Commerce and Trafficking Assessment provides additional data regarding the diversion of lawfully exported firearms. As described in that report, participating law enforcement agencies in foreign countries can submit firearm trace requests to ATF's eTrace system to help determine the purchase or ownership history of a recovered crime gun. ATF's analysis of all international crime gun trace requests received between 2017 and 2021 indicates that at least 11% (18,749) of traced firearms were lawfully exported from the United States and later recovered in a foreign country. For countries outside of North America, at least 37% of firearms submitted to ATF were lawful exports; for countries in Central America, at least 19% of firearms submitted to ATF were lawful exports.

These data are of particular concern given that ATF was working with a limited set of international crime guns for which a trace request was submitted. Together, these reports indicate that a sizeable portion of international crime guns are diverted from lawful exports.

Bureau of Alcohol, Tobacco, Firearms, and Explosives, “National Firearms Commerce and Trafficking Assessment (NFCTA): Crime Guns—Volume Two, Part IV: Crime Guns Recovered Outside the United States and Traced by Law Enforcement,” January 2023, pg 5,

https://www.atf.gov/firearms/docs/report/nfcta-volume-ii-part-iv-crime-guns-recovered-outside-us-and-traced-le/download

Commerce also identified specific cases in which lawful exports of firearms and related items were misused or diverted in a manner that adversely impacted U.S. national security and foreign policy interests. In one case, a firearm that was licensed for export to one country was subsequently diverted to a bordering country and used in a political assassination. In another, a license exception was used to export parts for the unlawful assembly of firearms in Taiwan. BIS also identified instances of firearms and ammunition exports being diverted to Russia via commercial resellers in third countries; such firearms and ammunition may be used to support Russia's further invasion of Ukraine.

In addition, partner governments, particularly those in the Western Hemisphere, have expressed, and have continued to express, concern to Commerce with respect to illicit firearms trafficking, including the diversion of lawfully exported firearms. For example, governments in the Caribbean region expressed concern that individuals are using license exceptions to bring firearms, particularly semi-automatic handguns, to their countries, and that those firearms are being diverted to violent criminals. These partner governments have sought U.S. assistance in addressing diversion, which is fueling violence, criminal activity, and instability within their countries or regions.

Commerce takes seriously its responsibility to regulate the export of firearms and related items consistent with U.S. national security and foreign policy interests, which include countering diversion and misuse of firearms and advancing human rights. Given the lethality of these items, the significant volume and value of the applications being processed, and the risk of diversion or misuse associated with them, Commerce is committed to ensuring that controls for these items appropriately protect the security of the United States and our allies and partners. Thus, during the pause, Commerce conducted a thorough review to assess the risk factors that contribute to the diversion and misuse of firearms and related items, evaluate whether existing review policies sufficiently account for those factors, and determine whether those policies could be improved. As part of that review, Commerce closely reexamined the data and case studies that led to the pause. It supplemented those data and case studies by studying reports and other empirical evidence regarding the conditions and risk factors that enable diversion and misuse of U.S. firearms and related items. Additionally, Commerce continued to engage with stakeholders and partner governments to gather different perspectives on addressing the risks associated with the diversion of firearms and related items.

As part of this review, Commerce, together with interagency export control partners in the Departments of Defense, Energy, and State, as well as other federal agencies with technical expertise in firearms and related items, assessed current U.S. firearms export control policies to determine whether updates to BIS's review process and procedures

would further U.S. foreign policy and national security interests and how to appropriately implement those updates. In particular, as discussed further below, Commerce worked extensively with State, which is a key participant in the review process for license applications involving items subject to Commerce's jurisdiction. At the outset of the review process, Commerce drew upon its extensive experience reviewing applications for exports and reexports of firearms and related items and outlined an initial set of factors that increase the risk of these items being diverted or misused in a manner contrary to U.S. national security and foreign policy. Commerce consulted with State about these risk factors and, upon further review of the data and case studies as informed by State's experience, the agencies determined the key risk factors. In light of the fact that many of the factors concern conditions in destination countries, Commerce requested that State, which has deep expertise in evaluating such conditions, determine whether there are specific destinations where there is a substantial risk that firearms and related items will be diverted or misused in a manner contrary to U.S. national security and foreign policy. After conducting a thorough analysis that included consultation with U.S. Government stakeholders, State responded by developing a list of destinations in which it determined that there is a substantial risk that lawfully exported firearms sold to non-government end users will be diverted or misused in a manner contrary to U.S. national security and foreign policy.

Commerce also engaged with certain counterparts in Country Group A:1 destinations that export firearms and related items to understand the export license application requirements and risk factors considered under their firearms export control authorities and related policies. Because governments in A:1 destinations have demonstrated a commitment to export controls as participants in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies and share our interest in countering diversion or misuse of firearms and related items, advancing human rights, and promoting mutual security, BIS found it helpful to consult their processes and policies in making the regulatory updates outlined in this IFR.

Commerce also continued regular engagement with the Caribbean Community (CARICOM) to identify specific actions the U.S. could take to minimize the diversion to unauthorized end users of U.S. firearms and related items that were lawfully exported to end users in CARICOM member and partner countries. For example, concerns were raised that certain license exceptions, including License Exception Shipments of Limited Value (LVS) under § 740.3 and License Exception Baggage (BAG) under § 740.14, may have been used to bring firearms and related items into these CARICOM countries that were subsequently diverted in violation of license exception terms, or to export greater quantities of firearms and related items than were legally available under these two license exceptions. Note that License Exception LVS is not available for end-item firearms but is available for certain “parts” and “components” of firearms when for export or reexport to a Country Group B destination. Commerce also engaged with the U.S. firearms industry, as well as a wide variety of other stakeholders, to assess current export control processes and policies for firearms and related items and seek recommendations on effectively addressing diversion and misuse risks.

3. Findings of Policy Review and Engagement

As a result of this policy review and engagement, Commerce identified several concerns associated with export controls that apply under the EAR to firearms and related items. First, Commerce determined that the existing licensing procedures and requirements did not provide it with sufficient documentation and data to evaluate national security and foreign policy risks effectively. In particular, limited documentation requirements made it challenging to validate that firearms and related items are exported only to trustworthy foreign partners. Existing data collection practices also limited visibility of agencies that participate in the license review process into trade flows for different types of firearms under its jurisdiction, rendering it difficult to assess whether lawful exports might be at a particularly acute risk of diversion. In addition, these practices limited the US Government's ability to monitor potentially high-risk sales from distributors to third parties.

Second, Commerce concluded that the existing EAR license application requirements and review process for firearms and related items did not sufficiently enable identification of transactions that pose a heightened risk of diversion or misuse contrary to U.S. national security and foreign policy. Given that data and case studies show that exports of U.S. firearm and related items are at significant risk of being diverted or misused, Commerce conducted an extensive analysis to determine whether certain types of license applications warrant more scrutiny than others.

As an initial matter, Commerce determined that the risk of diversion is significantly higher for exports to non-government end users than for exports to government end users and that consequently applications involving non-government end users warrant additional scrutiny. Data show that “[g]lobally, the private civilian stockpile is less accountable, far less strictly guarded and three times as plentiful as its state counterpart—all qualities that support easy diversion of weapons to the illegal sector.”

For example, as ATF explained in a report on firearm theft in the U.S., “more than 95% of stolen guns originate via thefts from private citizens.”

The case studies reviewed by BIS provide additional support for these general trends. Indeed, in each of the case studies described above, the diverted firearm had originally been exported to a non-governmental end user.

Rebecca Peters, “Small Arms: No Single Solution,” United Nations Chronicle

https://www.un.org/en/chronicle/article/small-arms-no-single-solution

Bureau of Alcohol, Tobacco, Firearms, and Explosives, “National Firearms Commerce and Trafficking Assessment (NFCTA): Crime Guns—Volume Two, Part V: Firearm Thefts,” January 2023, pg 1

https://www.atf.gov/firearms/docs/report/nfcta-volume-ii-part-v-firearm-thefts/download

Commerce also determined that the licensing process would benefit from clarifying the specific national security and foreign policy factors considered when license applications are reviewed; such factors are associated with the risk of diversion or misuse of firearms and related items and the potential impact to U.S. national security and foreign policy interests. While national security and foreign policy concerns have always been considered as part of the review process, detailing transparent review criteria will enable BIS, its interagency partners, exporters, and reexporters to more effectively and consistently assess the potential risks associated with a given transaction. The factors that will be considered include, but are not limited to: the nature of the end user; destination-specific national security and foreign policy risk factors, including firearms trafficking, terrorism, human rights concerns and political violence, state fragility, corruption, organized crime or gang activity, and drug trafficking; instances of past diversion or misuse; and the capabilities, potential uses, and lethality of the item. These factors are consistent

with U.S. National Security Memorandum 18, Conventional Arms Transfer Policy,

as well as the criteria that the United Kingdom and allies and partners in European Union member states apply to similar transactions, including the consideration of human rights; the preservation of regional peace, security, and stability; internal repression, tensions, or armed conflicts; terrorism and organized crime risks; and diversion risks. Notably, these key review factors, which are set forth in a new regulatory note to § 742.7(b)(3) of the EAR, apply to applications involving certain exports and reexports of firearms and related items to both government and non-government end users in all destinations.

U.S. National Security Memorandum 18, Memorandum on United States Conventional Arms Transfer Polic, (Feb 2023),

https://www.whitehouse.gov/briefing-room/presidential-actions/2023/02/23/memorandum-on-united-states-conventional-arms-transfer-policy/

Each of the destination-specific factors directly correlates with the risk of diversion or misuse. In countries with high rates of firearms trafficking, there is an increased risk that criminals will seek to divert U.S. firearms and sell them to traffickers. There is a similar risk in countries with high rates of drug trafficking, as “illicit drugs are the most common non-firearms-related commodities seized together with firearms.”

Drug traffickers and producers frequently seek to obtain diverted firearms, both to further their core operations

and to establish illicit firearms markets.

United Nations Office on Drugs and Crime, “Global Study on Firearms Trafficking 2020,” page 77 (Mar. 2020) (“UN Global Study”),

https://www.unodc.org/documents/data-and-analysis/Firearms/2020_REPORT_Global_Study_on_Firearms_Trafficking_2020_web.pdf

UN Global Study, page 36 (“Firearms are instrumental to organized crime and gangs as they can convey the sense of threat and power which allow the protection of the group, the territory and eventually their illicit markets.”).

Global Initiative Against Transnational Organized Crime,

Arms Trafficking and Organized Crime: Global trade, local impacts,

page 13 (Aug. 2022) (“GI-TOC Report”) (explaining that “drugs and firearms markets tend to benefit and reinforce each other” because drug operations “[use] profits from the drug trade to buy and sell firearms not only to their members but also other criminal groups at huge mark-ups”),

https://globalinitiative.net/wp-content/uploads/2022/08/GI-TOC-policy-brief_Arms-trafficking-web-1.pdf

Organized crime, human rights abuses, and terrorist activity are strong indicators of diversion risk because the “interface between organized crime, violent extremism and terrorism, as well as state actors, allows regions to become flush with weapons looted from government stockpiles and weapons legally procured but sold on the black market.”

As discussed, the GAO report on arms trafficking in Belize, El Salvador, Guatemala, and Honduras provides empirical evidence that countries with high degrees of organized crime, human rights abuses, and violent extremism also have high degrees of firearm diversion.

GI-TOC Report, page 3.

GAO Report, page 16.

A high degree of corruption in a country also increases diversion risk.

Specifically, in countries where corruption leads to reduced funding for law enforcement agencies, those agencies are less equipped to prevent criminals from diverting U.S. firearms. The risk of diversion is especially high in countries where corrupt government officials work directly with criminal organizations to traffic diverted U.S. firearms.

Trevor Thrall and Jordan Cohen, “2021 Arms Sales Risk Index” (Jan. 18, 2022) (“Cato Report”),

https://www.cato.org/study/2021-arms-sales-risk-index#mapping-risk

GI-TOC Report, page 4.

Finally, state fragility correlates with diversion risk because “strong states should have greater ability to manage and to control legal arms shipments than their weaker counterparts.”

Diversion risk is especially high in countries experiencing internal violent conflict because conflict incentivizes armed groups to stockpile weapons through any means necessary, including through the diversion of U.S. firearms.

Carla Martinez Machain, Jeffrey Pickering, “The Human Cost of the Weapons Trade: Small Arms Transfers and Recipient State Homicide” Journal of Global Security Studies (2020) (showing that state strength mitigates the relationship between small arms trade and rates of homicide)

https://academic.oup.com/jogss/article-abstract/5/4/578/5592220

UNODC Report page 37 (“In conflict and post-conflict countries, the accumulation of legal stockpiles of weapons may create the potential for firearms to reach the hands of non-state armed groups, other criminal groups or even the general population, especially if that very conflict weakens the ability of the state infrastructure to manage those stockpiles properly.”).

The destination-specific factors also correlate with the risk that a diverted firearm will be used to commit violent acts that undermine U.S. national security and foreign policy objectives. As an initial matter, in countries with high rates of firearms trafficking, there is an increased risk that diverted firearms and related items will end up in the hands of cartels, gangs, terrorists, paramilitary groups, and other criminal organizations, all of which use firearms and related items for activities that directly undermine U.S. national security and foreign policy.

In countries with high rates of drug trafficking and organized crime, there is an increased risk that the diversion or misuse of firearms and related items will increase the ability of cartels, gangs, and other criminal organizations to undermine U.S. national security and foreign policy by flooding the United States with potentially deadly substances, sparking regional conflict that has spillover effects in the United States, and establishing transnational operations that extend into the U.S.

Similarly, in countries where terrorist groups have a significant presence, there is an increased risk that the diversion of firearms and related items will increase the capability of those groups to carry out attacks that undermine U.S. national security.

And in countries with high rates of human rights abuses and political violence, whether by government-sponsored paramilitary groups or non-state forces, there is an increased risk that the diversion of firearms and related items will enable further human rights abuses, which directly undermines a key U.S. foreign policy objective.

U.S. Department of Defense, “Framework to Counter Drug Trafficking and Other Illicit Threat Networks,” page 1 (May 2019),

https://policy.defense.gov/Portals/11/Documents/DoD%20Framework%20to%20Counter%20Drug%20Trafficking%20and%20Other%20Illicit%20Threat%20Networks%20May%202019.pdf;

GI-TOC Report, page 10.

Cato Report.

GI-TOC Report, page 10; Cato Report.

The diversion and misuse of firearms and related items in countries with high degrees of corruption and state fragility poses similar risks to national security and foreign policy. In countries with high degrees of corruption, there is an increased risk that the diversion of firearms and related items to criminal organizations will further undermine the ability of law enforcement agencies to promote country stability, which is a central U.S. foreign policy objective. In turn, in a fragile state experiencing violent internal conflict, “the influx of arms not only fuels the fighting but it contributes to the fragmentation and spreading of conflict; increases the number of criminal groups and their use of violence as a vehicle for market control; and strengthens armed groups against state responses.”

Not only does such conflict undermine U.S. foreign policy by increasing country instability, it causes spillover effects that directly threaten U.S. national security.

GI-TOC Report, page 3.

In addition to the destination-specific factors, other important factors are the capabilities, lethality, and potential uses of different firearms and related items. BIS controls a diverse range of firearms and related items, including optics and

scopes, antique firearms, non-automatic and semi-automatic firearms, and ammunition. The potential for diversion or misuse of each of these categories of items should be carefully considered during the review of an export application.

The capabilities, lethality, and potential use of an item have numerous implications for U.S. national security and foreign policy interests. To begin with, certain items under BIS jurisdiction have characteristics that may render them either more or less dangerous in criminal, terrorist, or other adversaries' hands. For example, buckshot, blank ammunition, or antique firearms regulated by BIS under the EAR, have relatively limited capacity to pose harm to U.S. interests if they are diverted or misused. By contrast, some items subject to the EAR, such as certain semiautomatic firearms, may pose a higher risk to U.S. national security and foreign policy interests if diverted to criminals, terrorists, and cartels. For example, ATF studies on the import of semiautomatic rifles and shotguns have found that certain characteristics can render such firearms “particularly suitable for the military or law enforcement” use.

Firearms that could be used to give cartels, terrorist organizations, and other non-state actors parity with law enforcement agencies, including those of the U.S. and their allies, could pose a unique risk if diverted or misused. Furthermore, data from ATF indicates that weapons with these characteristics have, in fact, been diverted and misused in criminal activities,

and that certain types of weapons may be particularly appealing to cartels that seek to destabilize regions and engage in drug trafficking activities. Such factors are important to consider alongside other indicia of the end user's credibility and a destination's risk profile.

Bureau of Alcohol, Tobacco, Firearms, and Explosives, Study on the Importability of Certain Shotguns,” January 2011, pages 8-9

https://www.atf.gov/firearms/docs/report/nfcta-volume-ii-part-iv-crime-guns-recovered-outside-us-and-traced-le/download

The capabilities, lethality, and potential uses of an item can also render it more amenable to diversion than other comparable items. In the context of drug trafficking and other criminal activity in the CARICOM region, for example, studies have indicated that criminals rely on access to unlawfully exported or diverted handguns. This is due to the fact that handguns are “concealable, easier to use in close quarters, and just as effective for almost every criminal task” as other firearms.

Similarly, a study of diversion in the CARICOM region showed both that criminals use various methods of concealment and that there is a prevalence of 9mm semiautomatic handguns in criminal activity.

These data are consistent with other studies showing that Central American police recovered and traced pistols at a greater rate than other types of weapons in that region.

Foreign government law enforcement agencies have likewise identified instances in which extraordinarily large quantities of ammunition—which is small and often can be repurposed for a large variety of firearms—are illicitly trafficked.

Put simply, some items may be more dangerous if they are diverted or misused, and others might be easier to divert or misuse. As such, the capabilities, lethality, and potential uses of certain items are closely linked to the U.S. national security and foreign policy interests that should be considered in the context of reviewing licensing applications.

United Nations Office on Drugs and Crime, “Transnational Crime in Central America and the Caribbean,” December 2012, page 59,

unodc.org/documents/data-and-analysis/Studies/TOC_Central_America_and_the_Caribbean_english.pdf

Small Arms Survey, “Weapons Compass: The Caribbean Firearms Study,” April 2023, pages 67-85,

https://www.smallarmssurvey.org/sites/default/files/resources/CARICOM-IMPACS-SAS-Caribbean-Firearms-Study.pdf

United Nations Office on Drugs and Crime, “Transnational Crime in Central America and the Caribbean,” December 2012, page 59,

unodc.org/documents/data-and-analysis/Studies/TOC_Central_America_and_the_Caribbean_english.pdf

; GAO report, page 19.

Alessandro Ford, “Scandal at Haiti Customs After Over 100,000 Rounds of Smuggled Ammunition Seized,” Insight Crime, July 2022,

https://insightcrime.org/news/scandal-at-haiti-customs-after-over-100000-rounds-of-smuggled-ammunition-seized/

Finally, in addition to specifying certain key factors that will be considered when reviewing license applications to export firearms and related items to any end user, Commerce determined that destination-specific factors should be used to identify destinations where firearm exports to non-government end users entail a substantial risk of diversion or misuse in a manner adverse to U.S. national security and foreign policy. Identifying those “high-risk destinations” enables BIS to develop a uniform review policy for license applications, ensuring that the licensing process consistently accounts for the risks associated with various transactions; provides transparency and predictability to exporters, stakeholders, and the public; and adequately safeguards U.S. foreign policy and national security interests.

As discussed above, Commerce requested that State, which has extensive expertise in evaluating country-specific conditions and associated national security and foreign policy concerns, assist in developing a list of high-risk destinations. In response, State provided Commerce with a guidance memorandum, which is available on the BIS website at

www.bis.gov/guidance_memorandum

and on

regulations.gov,

outlining a methodology to evaluate the risk that firearms exports to specific destinations will be diverted or misused in a manner contrary to U.S. national security and foreign policy (hereinafter, the “Firearms Guidance Memorandum”). As the Firearms Guidance Memorandum explains, State leveraged its expertise in foreign policy and in subject matter areas, including human rights, international counternarcotics, counterterrorism, and arms control, and the expertise of stakeholders from across the U.S. Government in conducting its analysis.

After working with Commerce to determine the key risk factors, State gathered data and other empirical evidence relevant to assessing how those factors apply to specific destinations. That evidence came from a diverse set of credible sources, including reports produced by the U.S. Government (

e.g.,

the State Department's Country Reports on Human Rights Practices and the Presidential Determination on Major Drug Transit or Major Illicit Drug Producing Countries) and reports produced by reputable non-government organizations (

e.g.,

the Global Terrorism Index and the Corruption Perceptions Index). State also engaged in consultations with U.S. Embassy officials, including those with significant experience working with local law enforcement agencies, subject matter experts, and regional experts. Finally, State sought policy guidance from stakeholders across the U.S. Government to ensure that the assessment incorporated relevant aspects of U.S. national security and foreign policy interests.

Based on that analysis, State identified 36 countries in which there is a substantial risk that lawful firearms exports to non-governmental end users will be diverted or misused in a manner adverse to U.S. national security and foreign policy interests. Commerce has decided to apply a presumption of denial review policy to firearm license

applications involving non-government end users in those destinations. That uniform policy will ensure that the licensing process consistently accounts for the risks associated with those transactions, provides transparency to exporters and other stakeholders, and safeguards U.S. national security and foreign policy interests.

4. Policy Changes

BIS has determined that the changes described in this IFR will advance U.S. national security and foreign policy interests. As with all EAR controls, these changes are designed to be as targeted as possible to accomplish BIS's mission to protect the national security and foreign policy interests of the United States, including a full consideration of this IFR's economic impact. The regulatory changes implemented by this IFR will facilitate more robust data tracking capabilities for exports and re-exports of firearms and related items. Updates to license application requirements and applicable review policies will enhance the ability of BIS and its interagency partners to review and process license applications consistent with U.S. national security and foreign policy interests. In addition, this IFR creates greater transparency for industry by identifying the risk factors considered during the application review process, as well as destinations identified in the Firearms Guidance Memorandum as presenting a substantial risk of diversion or misuse in a manner contrary to U.S. national security and foreign policy.

B. New ECCNs for Semi-Automatic Firearms and Certain Related Parts, Components, Attachments, and Accessories

Prior to this IFR, ECCN 0A501 controlled rifles, pistols, and related “parts,” “components,” and certain “attachments,” and “accessories” on the CCL, while ECCN 0A502 controlled shotguns and related “parts,” “components,” and certain “attachments,” and “accessories.” Neither ECCN distinguished between non-automatic and semi-automatic firearms. BIS was unable to readily identify what share of firearms exports to a country were semi-automatic rifles versus non-automatic pistols because they were controlled under the same item paragraph of ECCN 0A501. Accordingly, BIS was unable to readily disaggregate and review licensing and export data for specific types of end-item firearms or specific “parts,” “components,” “attachments” and “accessories” of most concern. This data gap limited BIS's ability to efficiently evaluate the export, reexport, transfer (in-country) and diversion of specific types of rifles, pistols, shotguns, and certain “parts,” “components,” “attachments,” and “accessories” that may pose risks to U.S. national security and foreign policy. However, such information is useful to assess the risk of diversion.

To better track the export, reexport, transfer (in-country) and diversion of different types of firearms and related items, this IFR adds four new ECCNs to the CCL. ECCN 0A506 controls semi-automatic rifles, ECCN 0A507 controls semi-automatic pistols, ECCN 0A508 controls semi-automatic shotguns, and ECCN 0A509 controls certain “parts,” “components,” devices, “accessories,” and “attachments” for items controlled under ECCNs 0A506, 0A507, and 0A508. The creation of these four new ECCNs will enable BIS to better track and more readily identify exports of end-item semi-automatic firearms and shotguns and certain related “parts,” “components,” “accessories,” and “attachments” of concern when reviewing the Electronic Export Information (EEI) that exporters file in the Automated Export System (AES). Pursuant to § 758.1(g)(1) and (2), an EEI must specify the ECCN of the exported item. In order to further enhance transparency and the collection and review of export data on these items, this IFR also implements export clearance changes as described below under the heading

Changes to make identification of end-item firearms mandatory in AES.

The addition of ECCNs 0A506, 0A507, 0A508, and 0A509 is not expected to have an impact on the number of license applications received by BIS, because these items were previously controlled under different ECCNs. Other changes included in this IFR that are expected to increase the number of licenses and other support documents are described elsewhere in this preamble.

1. Addition of ECCN 0A506 for Semi-Automatic Rifles

The commodities controlled under ECCN 0A506 were controlled previously under ECCN 0A501. BIS, supported by an interagency working group, consulted the Wassenaar Munitions List (WAML1) as well as ATF's non-sporting firearm importation criteria to identify specific features or accessories to delineate in the ECCN 0A506 item paragraphs. The item paragraph structure will enable better tracking and transparency for exports of various types of end-item semi-automatic rifles. ECCN 0A506 has two primary item paragraphs. Item paragraph .a details semi-automatic centerfire (non-rimfire) rifles equal to .50 caliber (12.7 mm) or less that have any of the following characteristics (controlled under .a.1 through .a.4): the ability to accept a detachable large capacity magazine (more than 10 rounds) or may be easily modified to do so; folding, telescoping, or collapsible stock; separate pistol grips; or a flash suppressor. Item paragraph .b controls all other semi-automatic rifles equal to .50 caliber (12.7 mm) or less, including all non-centerfire (rimfire) that are not elsewhere specified (noted as “n.e.s.” on the CCL). ECCN 0A506 includes a note to 0A506.a and .b that “parts” and “components” that are “specially designed” for a commodity classified under .a or .b of 0A506, except those controlled under ECCN 0A509, are controlled under ECCN 0A501. ECCN 0A506 also includes a technical note stating that firearms controlled in 0A506 include those chambered for the .50 BMG cartridge. The reasons for control for new ECCN 0A506 mirror the reasons for control that apply to ECCN 0A501 (with the addition of CC Column 2 reason for control outlined below). Specifically, National Security (NS) Column 1, Regional Stability (RS) Column 1, Firearms Convention (FC) Column 1, CC Column 2, United Nations Security Council arms embargo (UN), and Anti-Terrorism (AT) Column 1 apply to the entire entry. License Exceptions LVS, Shipments to Country Group B Countries (GBS), and License Exception Strategic Trade Authorization (STA) are not available for use with commodities controlled under ECCN 0A506, as discussed in greater detail below.

2. Addition of ECCN 0A507 for Semi-Automatic Pistols

The commodities controlled under ECCN 0A507 were controlled previously under ECCN 0A501. BIS, supported by an interagency working group, consulted the WAML1 and 27 CFR 478.12 to identify specific features or accessories to delineate in the ECCN 0A507 item paragraphs. The item paragraph structure will enable better tracking and transparency for exports of various types of end-item semi-automatic pistols. ECCN 0A507 has two item paragraphs: paragraph .a controls semi-automatic centerfire (non-rimfire) pistols equal to .50 caliber (12.7 mm) or less; and paragraph .b controls semi-automatic (rimfire) pistols equal to .50 caliber (12.7 mm) or less. ECCN 0A507 includes a note to 0A507.a and .b to specify that “parts” and “components” that are “specially designed” for a commodity classified under 0A507,

except those controlled under ECCN 0A509, are controlled under ECCN 0A501.c, .d, .x, or .y. The ECCN also includes a technical note stating that firearms described in 0A507 includes those chambered for the .50 BMG cartridge, which clarifies that any handgun that may be developed to fire .50 BMG cartridges will be controlled under this ECCN. The reasons for control for new ECCN 0A507 mirror the reasons for control that apply to ECCN 0A501 (with the addition of CC Column 2 reason for control outlined in D.2 of this preamble in this IFR). Specifically, NS Column 1, RS Column 1, FC Column 1, CC Column 2, UN, and AT Column 1 apply to the entire entry. License Exceptions LVS, GBS, and STA are not available for use with commodities controlled under ECCN 0A507, as discussed in greater detail below.

3. Addition of ECCN 0A508 for Semi-Automatic Shotguns

The commodities controlled under ECCN 0A508 were controlled previously under ECCN 0A502. BIS, supported by an interagency working group, consulted both the WAML1 and ATF's non-sporting importation criteria to identify specific characteristics or attachments and accessories to delineate in the ECCN 0A508 item paragraphs. The item paragraph structure will better enable tracking and transparency for exports of various types of end-item semi-automatic shotguns. ECCN 0A508 has two item paragraphs. Item paragraph .a controls semi-automatic centerfire (non-rimfire) shotguns with any of the of the following characteristics (which are detailed in a.1 through a.6): folding, telescoping, or collapsible stock; magazine over five rounds; a drum magazine; a flash suppressor; Excessive Weight (greater than 10 lbs. for 12 gauge or smaller); or Excessive Bulk (greater than 3 inches in width and/or greater than 4 inches in depth). Item paragraph .b controls all other semi-automatic shotguns, including all non-centerfire (rimfire) shotguns that are not elsewhere specified. The reasons for control for new ECCN 0A508 mirror the reasons for control that apply to ECCN 0A502 (except for CC Column 2, which now applies to the entire 0A502 and 0A508 entry): Specifically, NS Column 1 and RS Column 1 for 0A508 commodities (with barrel length less than 18 inches), FC Column 1, CC Column 2, UN for the entire entry, and AT Column 1 for 0A508 commodities (with barrel length less than 18 inches). LVS, GBS, and License Exception STA are not available for use with ECCN 0A508, as discussed in greater detail below.

4. Addition of ECCN 0A509 for Certain “Parts,” “Components,” Devices, “Accessories,” and “Attachments” for Items Controlled Under ECCNs 0A506, 0A507, and 0A508

The commodities controlled under ECCN 0A509 were controlled previously under ECCNs 0A501 and 0A502. The commodities controlled under 0A509 warrant separate tracking under a distinct ECCN due to their sensitivity, including the potential that these firearms-related items are used to illicitly assemble firearms or are otherwise used to convert a non-automatic firearm controlled by 0A501 or 0A502 into a semi-automatic firearm or to accelerate the rate of fire of a semi-automatic firearm controlled by 0A506, 0A507, or 0A508. The item paragraph structure will enable better tracking and transparency for exports of certain “parts,” “components,” devices, “accessories,” and “attachments” separate from the end-item semi-automatic rifles, pistols, and shotguns controlled under ECCNs 0A506, 0A507, and 0A508. ECCN 0A509 has four item paragraphs. Item paragraph .a controls any “part,” “component,” device, “attachment,” or “accessory” not elsewhere specified on the USML that is designed or functions to accelerate the rate of fire of a semi-automatic firearm controlled under ECCNs 0A506, 0A507, or 0A508. Item paragraphs .b and .c control receivers (frames), including castings, forgings, stampings, or machined items thereof, “specially designed” for an item controlled under ECCNs 0A506 and 0A507, respectively. Item paragraph .d of ECCN 0A509 controls receivers (frames) and “specially designed” “complete breech mechanisms” for a commodity controlled under ECCN 0A508. ECCN 0A509 has a note to item paragraphs .b and .c stating that receivers (frames) under 0A509.b and .c refers to any “part” or “component” of the firearm that has or is customarily marked with a serial number when required by law; the “parts” and “components” in paragraphs 0A509.b and .c are regulated by ATF as firearms (

see

18 U.S.C. 921(a)(3); 27 CFR parts 447, 478, and 479). The reasons for control for commodities controlled under new ECCN 0A509 are as follows: NS Column 1, RS Column 1, FC Column 1, CC Column 2, UN, and AT Column 1 apply to the entire entry. License Exceptions LVS, GBS, and STA are not available for use with commodities controlled under ECCN 0A509, as discussed in greater detail below.

5. Other Changes for Existing 0x5zz ECCNs

BIS also reevaluated the reasons for control for rifles, pistols, shotguns, ammunition, and related “parts,” “components,” “accessories,” “attachments,” “software,” and “technologies” detailed under existing ECCNs 0A501, 0A502, 0A504, 0A505, 0D501, 0D505, 0E501, 0E504, and 0E505. BIS is applying or maintaining CC column 2-based controls on most items under these ECCNs, consistent with BIS policy to apply CC controls on items to address human rights-related concerns. Certain specific “parts” and “components” and ammunition controlled under ECCNs 0A501.y and 0A505.c, 0A505.d, and 0A505.x are not controlled for CC reasons (or certain other reasons under the EAR), because they raise relatively few concerns related to human rights or other foreign policy objectives. The CC changes described in this paragraph, along with the other CC changes described in this preamble section B.5, are expected to result in an increase of 1,115 license applications received annually by BIS.

Prior to this IFR, either CC Column 1, CC Column 2, or CC Column 3 applied to shotguns controlled under ECCN 0A502 based on the barrel length and particular end user (specifically, police or law enforcement). This IFR revises the CC reasons for control on 0A502 to underscore their significant relationship to U.S. foreign policy objectives, including human rights. CC Column 2 applies to the entire entry of 0A502, regardless of barrel length or end user. Similarly, CC Column 2 applies to the entire entry of 0A508, regardless of barrel length or end user. These changes implement a new license requirement for the export of certain shotguns to certain countries and end users. All other existing reasons for control on 0A502 remain in effect under this IFR. In particular, consistent with the licensing policy for items controlled for RS reasons, § 742.6(b)(1)(i), BIS will continue to review these items to determine whether the transaction is contrary to U.S. foreign policy interests, including promoting the observance of human rights throughout the world.

Similarly, this IFR adds CC Column 2 reasons for control to software controlled under ECCNs 0D501 and 0D505 and technology controlled under 0E501. Given that these ECCNs control the software and technology that relate to firearms and related items, the same human rights concerns apply. Therefore, as noted above, this change aligns the reason for control for ECCNs 0D501,

0D505, and 0E501 with BIS policy to apply CC to firearms and related items.

6. Other EAR conforming changes to reflect the new ECCNs for semi-automatic firearms and semi-automatic shotguns.

With the exception of those commodities controlled under new ECCNs 0A506, 0A507, 0A508, and 0A509 as described above, all firearms, shotguns, and their “parts,” “components,” “accessories,” “attachments,” and equipment remain controlled under ECCNs 0A501 and 0A502 on the CCL. However, the creation of the four new ECCNs requires conforming changes throughout the EAR to maintain enhanced restrictions on end-item firearms where only ECCNs 0A501 and 0A502 were previously referenced. This IFR adds references to semi-automatic firearms and semi-automatic shotguns controlled under ECCNs 0A506, 0A507, and 0A508, as well as the commodities controlled under 0A509, where appropriate; these conforming changes ensure that the semi-automatic versions of end-use firearms and shotguns controlled under these three new ECCNs, as well as the commodities controlled under 0A509, continue to be subject to licensing restrictions and limitations on licensing exception availability.

The conforming changes appear in the following EAR provisions (referenced here in the order in which they are described under Table 1): §§ 732.2(b), 734.7(c), 740.2(a)(21), 740.2(a)(23), 740.9(a) and (b)(5) introductory text, 740.9(b)(5)(ii), 740.9, Note 1 to paragraph (b)(5), 740.10(b)(1) introductory text and (b)(4), 740.10(b)(4)(i), 740.10, Note 1 to paragraph (b)(4), 740.11 introductory text, 740.14(e)(1) introductory text, 740.14(e)(1)(i), 740.14(e)(3) introductory text, 740.14(e)(3)(i), 740.14(e)(3)(iv), 740.14(e)(4), 740.20(b)(2)(ii)(A), 740.20(b)(2)(ii)(B), 742.6(b), 742.7(a)(5), 742.17(f), 743.4(c) (redesignated as paragraph (b)), 743.6(a) introductory text, (a)(1) and (2), (b), and (c), 748.12(a)(1), 748.12, Note 2 to paragraph (d)(3), supplement no. 2 to part 748, paragraph (z), supplement no. 2 to part 748, Note 1 to paragraph (z), supplement no. 2 to part 748, paragraph (bb) (redesignates as paragraph (aa)(1)), 758.1(b)(9), Note 1 to paragraph (c)(1), and (g)(4)(i), 758.1(g)(4)(ii), 758.10(a) introductory text, Note 1 to paragraph (b)(1), and Note 2 to paragraph (b)(1), 758.11(a) and (b)(2), 762.2(a)(11), 762.3(a)(5), as well as ECCNs 0A501 heading, Related Controls paragraph, Technical Note to 0A501.c, Note 5 to 0A501.e, and 0A501.x and .y, 0A502 heading, and Related Controls paragraph, 0A505.a and .d, 0B501 heading and 0B501.e, 0D501 heading, 0E501 heading, 0E501.a and .b, 0E502 heading, and ECCN 2B018 text under the heading. These changes are not expected to have any impact on the number of license applications received by BIS.

There are a number of references to the 0x5zz ECCNs in existing EAR provisions that pertain to firearms controls. However, no changes are required to such references because the four new ECCNs are also considered 0x5zz ECCNs.

Table 1—Identification of Conforming Changes Made to Existing EAR Regulatory References to Reflect the Addition of ECCN 0A506, 0A507, 0A508, and 0A509

This table identifies the specific EAR provision and type of conforming changes required for consistency with the addition of these four new ECCNs. BIS welcomes comments in response to this IFR on these conforming changes, as well as any other conforming changes that the public believes would be warranted to reflect the addition of these four new ECCNs.

BILLING CODE 3510-33-C

ER30AP24.020

ER30AP24.021

ER30AP24.022

BILLING CODE 3510-33-P

C. Changes to License Exceptions and Related Changes

1. General restrictions on use of license exceptions.

Section 740.2 of the EAR details restrictions in place on the use of all License Exceptions. Paragraph (a) enumerates these restrictions. This IFR makes two changes to this section. First, as a conforming change to the addition of the CC control under ECCNs 0A501, 0A506, and 0A507, this IFR revises the general restriction on the use of license exceptions under paragraph (a)(4)(iii) in § 740.2 for CC items identified in § 742.7 to remove the parenthetical phrase that limited the eligibility of License Exception BAG under paragraph (e) to certain shotguns and shotgun shells for personal use as the only License Exception BAG authorization that could overcome the general restriction in this paragraph (a)(4)(iii). Because the other firearms controlled under new ECCNs 0A506, 0A507, and 0A508 will require a license for CC as of the effective date of this IFR, all of these firearms and related items that are authorized under paragraph § 740.14(e) should be eligible to overcome this general restriction on the use of license exceptions under

§ 740.2(a)(4). These changes are not expected to have any impact on the number of license applications received by BIS.

Second, this IFR adds paragraph (a)(24) in § 740.2. New paragraph (a)(24) requires exporters to obtain a copy of an import certificate or equivalent document (if required by the government of the importing country) before the exporter can use any license exception for items controlled under ECCNs 0A501, 0A502, 0A504, 0A505, 0A506, 0A507, 0A508, or 0A509. This new requirement parallels the new policy detailed below related to obtaining and submitting an import certificate when applying for a license for certain firearms and related items. Although BIS anticipates that this requirement could increase the burden under this collection to some degree, BIS believes that exporters, as part of their current compliance programs, already have processes in place to confirm whether the firearms and related items that are to be exported may be imported into these foreign countries. Therefore, this recordkeeping requirement likely reflects practices and processes exporters already have in place and will therefore be of minimal burden to exporters. As described below under the Rulemaking section under paragraph 2, BIS welcomes comments from the public on this aspect of this IFR.

2. LVS additional restrictions.

License Exception LVS is detailed under § 740.3. BIS is further restricting the eligible destinations for LVS under paragraph (b). As amended by this IFR, LVS is no longer available for commodities controlled under ECCNs 0A501, 0A502, 0A504 (except 0A504.g), 0A505, 0A506, 0A507, 0A508, and 0A509 when they are destined for destinations in “CARICOM” or destinations specified in both Country Groups B and D:5. The addition to the EAR of the “CARICOM” as a defined term is detailed below. License Exception LVS remains available only for certain commodity ECCNs. These changes are expected to result in an increase of five hundred license applications received annually by BIS.

3. License Exception BAG new restrictions and single trip limit.

i. BAG is detailed under § 740.14.

License Exception BAG authorizes individuals leaving the United States either temporarily (

i.e.,

traveling) or longer-term (

i.e.,

moving) and crew members of exporting or reexporting carriers to take, as personal baggage, certain items. This IFR revises § 740.14 such that destination eligibility under License Exception BAG for items controlled under ECCNs 0A501, 0A502, 0A504, 0A505, 0A506, 0A507, 0A508, and 0A509 is limited to destinations other than those specified in Country Group D:5 (except for Zimbabwe) or destinations in “CARICOM.”

This IFR adds “CARICOM” as a defined term in § 772.1, which lists the definitions of terms used in the EAR. The definition of “CARICOM” specifies that for purposes of §§ 740.3 and 740.14 of the EAR, the term means an intergovernmental organization that consists of the following member states and associate members: member states: Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, St. Lucia, Suriname, St. Kitts and Nevis, St. Vincent and the Grenadines, and Trinidad and Tobago; associate members: Anguilla, Bermuda, British Virgin Islands, Cayman Islands, and Turks and Caicos, as well as any other state or associate member that has acceded to membership in accordance with Article 3 or Article 231 of the Treaty of Chaguaramas for members or associate members, respectively. The definition of “CARICOM” includes a note specifying that Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Montserrat, and Turks and Caicos are treated as the United Kingdom under all other EAR provisions that govern licensing requirements and license exceptions. These changes are expected to result in an increase of five hundred license applications received annually by BIS.

ii.

Limit BAG to three shotguns and firearms in total for a single trip.

This IFR also revises § 740.14 to limit the number of shotguns and firearms that an individual may export using BAG. Previously, paragraphs (e)(1)(i) and (e)(3)(i), read together, permitted U.S. citizens to export or reexport three shotguns, three firearms, and 1,000 rounds of ammunition on any one trip. This IFR limits U.S. citizens to three firearms or shotguns in total on any one trip. This change is expected to result in an increase of 50 license applications received annually by BIS.

D. Revisions to License Review Policies

As part of the BIS effort to review firearms-related policies and address concerns related to misuse or diversion contrary to U.S. national security and foreign policy interests, including diversion to entities or activities that promote regional instability, abuse or violate human rights, and/or fuel criminal activities, two control policies were identified for revision. This IFR revises the license review policies under the Regional Stability (RS) and Crime Control (CC) sections in part 742 of the EAR pursuant to BIS's findings. The revisions to the RS and CC license review policies, which impose presumptions of denial for certain high-risk transactions, are expected to result in a decrease of 650 license applications received annually by BIS, due to certain applicants likely being deterred from applying for licenses.

1. Revisions to RS license review policies.

Under § 742.6(b)(1), licensing policy for RS column 1 items, this IFR makes several structural changes to paragraph (b)(1)(i). To make the paragraph more readily understandable, this IFR sets forth each license review policy in a separate paragraph, (b)(1)(i)(A) through (G). This IFR also makes conforming changes to clarify which items are reviewed under the policies set forth in each paragraph. This IFR also makes substantive revisions to RS reason for control, as detailed below.

i. Adoption of policy of denial review policy for D:5 for certain 0x5zz ECCNs.

BIS reviews applications for exports and reexports of items classified under any 9x515 or “600 series” ECCN destined to Country Group D:5, destinations subject to a U.S. arms embargo, consistent with United States arms embargo policies in § 126.1 of the ITAR (22 CFR 126.1). This IFR amends § 742.6 of the EAR to extend this licensing policy to include all firearms and related items in ECCNs 0A501, 0A502, 0A505, 0A506, 0A507, 0A508, or 0A509 that are destined for D:5 destinations. This change is detailed in new paragraph (b)(1)(i)(D).

Furthermore, BIS previously reviewed applications for items controlled under certain firearms-related ECCNs and any 9x515 ECCN under a policy of denial when destined for China or a Country Group E:1 country. This IFR amends § 742.6 to extend this stringent review policy to all items classified under ECCNs 0A501, 0A502, 0A504, 0A505, 0A506, 0A507, 0A508, 0A509, 0B501, 0B505, 0D501, 0D505, 0E501, 0E504, or 0E505, or any 9x515 ECCNs. This change is detailed in new paragraph (b)(1)(i)(F).

2. Revisions to CC license review policies.

As stated above, this IFR also revises the CC licensing policy in § 742.7(b) to apply stricter scrutiny to exports of firearms and related items to destinations where diversion risks are particularly acute, such as destinations in which significant drug trafficking and associated criminal activity occurs. Previously, § 742.7(a) consisted of paragraphs (a)(1) through (6). Under this IFR, the firearms and shotgun related items are listed in paragraph (a)(5) (ECCNs 0A501, 0A502, 0A504, 0A505.b,

0A506, 0A507, 0A508, 0E502, and 0E505). The contents of previous paragraphs (a)(2) and (3) are removed as a conforming change to the removal of CC Column 2 and CC Column 3 from shotguns. The non-firearms and shotgun related items remain in (a)(1). Previous paragraphs (a)(4) through (6) are now paragraphs (a)(2) though (4). Paragraphs (a)(2) and (a)(4) contain a sentence showing that controls for these items appear in each ECCN; a column specific to these controls does not appear in the Country Chart (supplement no. 1 to part 738 of the EAR).

Given that this IFR makes § 742.7(a)(5) solely pertain to firearms and shotguns related items, BIS is designating these items as having CC Column 2 reasons for control. As a result of this change, the public can more easily identify firearms and shotguns related items on the CCL. To ensure easy understanding of the applicability of license requirements for CC Column 2 designated items, BIS in this IFR is putting an X in the box on the Commerce Country Chart (supplement no. 1 to part 738) for all countries except Canada. This change does not impose licensing requirements on exports or reexports to destinations for which a license was not previously required, as NS and RS requirements are already in place for all destinations other than Canada.

Previously, § 742.7(b) consisted of paragraphs (b)(1) and (2). Under this IFR, paragraph (b) consists of paragraphs (b)(1) through (3). Paragraphs (b)(1) and (2) remain, but apply to (a)(1) through (4). Paragraph (b)(3) applies to items controlled under § 742.7(a)(5). The review policy for these items is broken out for two types of end users as described in section D.2.i and D.2.ii:

i. License review policies for government end users.

Paragraph (b)(3)(i) describes policies for license applications when the items are destined for government end users. These applications will be reviewed on a case-by-case basis to determine the risk that the items will be diverted or misused in a manner that would adversely impact U.S. national security or foreign policy.

ii. License review policies for non-government end users.

Paragraph (b)(3)(ii) describes policies for license applications when the items are destined for non-government end users. These license applications will also be reviewed on a case-by-case basis. They will additionally be reviewed under a presumption of denial if one of two conditions (detailed in paragraphs (b)(1)(ii)(A) and (B)) are met: (A) the items are being exported or reexported to a destination identified in the Firearms Guidance Memorandum as a destination in which it determined that there is a substantial risk that firearms exports to non-governmental end users will be diverted or misused in a manner adverse to U.S. national security and foreign policy, or (B) there is otherwise a substantial risk that the items will be diverted or misused in a manner that would adversely impact U.S. national security or foreign policy.

The presumption of denial review policy for license applications involving exports and reexports to high-risk destinations identified in the Firearms Guidance Memorandum ensures that all exports of firearms and related items to those destinations are consistent with U.S. national security and foreign policy. As discussed above, to support Commerce's ongoing efforts to impose export controls that further U.S. national security and foreign policy, State has developed a list of destinations in which there is a substantial risk that lawfully exported firearms sold to non-governmental end users could be diverted or misused in a manner adverse to U.S. national security and foreign policy. The Firearms Guidance Memorandum, which is available on the BIS website at

www.bis.gov/guidance_memorandum

and on

regulations.gov

, outlines the methodology for evaluating destination-specific risks and identifies 36 high-risk destinations.

Having carefully reviewed the list and methodology, which was developed by national security and foreign policy experts at State in consultation with other experts from across the U.S. Government, BIS has determined that a presumption of denial should apply to applications for the export and reexport of firearms and related items involving non-government end users in these 36 destinations. Thus, as part of this IFR, BIS is adopting the list and adding it to a supplement to the EAR (see below, in this section of the preamble, for details).

A presumption of denial review policy for exports and reexports to non-government end users to the destinations identified in the Firearms Guidance Memorandum will significantly further U.S. national security and foreign policy interests. As described above, based on analysis of destination-specific risk factors and consultations with U.S. Embassy officials and stakeholders across the U.S. Government, State determined that firearms and related items exported to non-government end users in those 36 destinations face a substantial risk of diversion or misuse in a manner adverse to U.S. national security and foreign policy. In other words, there is a substantial risk that firearms and related items exported to those destinations will fall into the hands of organizations and individuals that will use those items to expand transnational drug operations, spark regional conflicts, commit acts of terrorism, abuse human rights, destabilize governments, or harm communities. Applying a presumption of denial to license applications for those exports will ensure that the licensing process fully and consistently accounts for those risks, thereby significantly furthering and safeguarding U.S. national security and foreign policy interests.

In addition, transparency with respect to destinations of concern will promote predictable and timely review of license applications and will help industry and other stakeholders understand the licensing process. It will also make the review process more efficient, thereby allowing BIS to focus time and resources on other license applications, including applications for exports to other destinations and applications to government end users in all destinations. Instead of reassessing the risks associated with transactions involving destinations identified in the Firearms Guidance Memorandum as presenting a substantial risk of diversion or misuse, BIS will be able to focus on assessing applications that present other, varying risk factors or indicia of reliability.

Moreover, exporters will have the opportunity to overcome the presumption of denial by demonstrating that a specific transaction does not present a substantial risk of diversion or misuse. A presumption of denial, as opposed to an absolute prohibition, will provide BIS with the flexibility to tailor its review to the individual facts and related policy interests. For example, BIS may recommend to approve a transaction involving a non-government security service charged with protecting a third-country embassy in a destination identified in the Firearms Guidance Memorandum as presenting a substantial risk of diversion or misuse. Notably, a presumption of denial in the firearms context is generally consistent with BIS's licensing review policies under the EAR, including in connection with other sensitive items and destinations of concern.

State has also committed to lead an interagency process to assess periodically, the risk that exports of firearms and related items to specific destinations, including those identified on the list, will be diverted or misused in a manner adverse to U.S. national

security and foreign policy. State will also lead a periodic interagency review of the factors and other aspects of in the Firearms Guidance Memorandum, with the goal of updating both the guidance memorandum and its list of destinations on an annual basis. State has also noted that the Firearms Guidance Memorandum and corresponding list of destinations may be updated outside of the annual window if there are exigent circumstances (

e.g.,

a coup) or if updates are otherwise needed to advance U.S. national security and foreign policy interests.

BIS will review any changes recommended as the result of the State-led, interagency-informed assessment process, and maintain the list in supplement no. 3 to part 742 of the EAR. BIS will publish any additions or deletions to the list in the

Federal Register

. As set forth in new supp. no. 3 to part 742, the list of countries for which there is a presumption of denial application review policy for exports and reexports to non-governmental end users is as follows: The Bahamas, Bangladesh, Belize, Bolivia, Burkina Faso, Burundi, Chad, Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Honduras, Indonesia, Jamaica, Kazakhstan, Kyrgyzstan, Laos, Malaysia, Mali, Mozambique, Nepal, Niger, Nigeria, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Suriname, Tajikistan, Trinidad and Tobago, Uganda, Vietnam, and Yemen.

iii. Addition of factors that will be considered for all 0x5zz license applications regardless of end user.

For all end users, paragraph (b)(3) details specific factors that BIS will consider in assessing the risk that firearms and related items will be diverted or misused in a manner that would adversely impact U.S. national security or foreign policy. For each license application, BIS will specifically review concerns in the destination associated with state fragility, human rights and political violence, terrorism, corruption, organized crime or gang-related activity, drug trafficking, and past diversion or misuse of firearms; the nature of the end user; the capabilities, potential uses, and lethality of the item; and other factors as needed. As always, license applicants are strongly encouraged to consider license review factors that are detailed in the EAR when sourcing potential customers abroad.

Revision to license review policies for Exports of Firearms to Organization of American States (OAS) Member Countries.

Consistent with Commerce's findings during its policy review, this IFR revises the licensing policies for the export and reexport of most firearms and related items to all OAS member countries, under § 742.17(b). There continue to be two distinct licensing policies for exports and reexports of firearms and related items to OAS member countries: a case-by-case review policy and a policy of denial for applications linked to drug trafficking, terrorism, and criminal activities. These are further discussed below under this section D.3.

Under this IFR, applications supported by an FC Import Certificate or equivalent official document issued by the government of the importing country will now be reviewed on a case-by-case basis, as opposed to the license review policy of general approval that applied before. This change matches the text in other provisions in part 742 of the EAR, which use the “case-by-case” text. Previously, applications supported by an FC Import Certificate or equivalent official document would “generally be approved.” With the increased visibility into transactions provided by other regulatory changes discussed in this IFR, a “case-by-case” review policy more accurately reflects the standards under which BIS will assesses these applications going forward. As part of the license review process, BIS will continue utilizing a variety of open-source and classified resources and anticipates that the other regulatory changes implemented by this IFR will provide increased visibility regarding these applications. These changes are expected to result in a decrease of 100 license applications received annually by BIS, due to certain applicants being deterred from applying for licenses because of the case-by-case license review policy.

This IFR does not change the review policy of denial for applications linked to drug trafficking, terrorism, and criminal activities. Applications linked to drug trafficking, terrorism, and transnational organized crime activities will continue to be reviewed under a policy of denial. This retention of the existing policy is not expected to have any impact on the number of license applications received by BIS.

E. Changes in Support Document Requirements for Firearms License Applications

1. Import Certificate Requirements

i. Require submission as part of the license application for all firearms license applications for Organization of American States (OAS) member countries and other destinations that require an import certificate or equivalent official document for the importation of firearms.

Previously, BIS required the submission of an import certificate or other equivalent official document only for OAS member states; for non-OAS member states that require an import certificate or equivalent official document, the applicant was required to obtain a copy of such documentation but was not required to submit it with the license application unless specifically requested by BIS. Under this IFR, the requirement that all license applications for firearms and related items include an import certificate or equivalent official document as part of the submission will minimize the risk of an exporter failing to obtain an import certificate or equivalent official document if required by the importing country. This requirement will also help ensure that the importing country's government is aware of the shipment and has confirmed that the import is lawful. This requirement applies to all firearms and related items described under 0x5zz ECCNs. These changes are expected to result in an increase of 250 import certificates or other equivalent official documents that need to be submitted with BIS licenses. BIS estimates that the time to submit each document will be 1 minute. This will result in an increase in burden hours of 4 hours.

ii. Combining the OAS and non-OAS requirements to simplify the requirements and improve understanding.

To facilitate this support document requirement, this IFR revises § 748.12, which addresses requirements for obtaining an import certificate or import permit. Previously, paragraph (a) specified the requirements for OAS member states and paragraph (e) specified the requirements for non-OAS member states. Given the detail set forth regarding the required documentation, and the fact that all destinations will be treated the same, this IFR removes previous paragraph (e). All applicable information in previous paragraph (e) is moved to revised paragraph (a), and conforming changes are included in revised paragraphs (a) through (d). These formatting and clarifying changes are expected to facilitate compliance and are not expected to have any impact on the number of import certificates or other equivalent official documents received by BIS. Paragraph (a)(2)(i) details OAS member countries; BIS is taking this opportunity to add a reference to this paragraph that OAS member countries includes any member country that has acceded in accordance with Chapter III of the Charter of the Organization of American States.

2. Requiring Purchase Orders for Certain Firearms License Applications

i. Conforming changes to provide clarity and to make the requirements easier to understand.

To facilitate understanding by the public regarding the changes discussed in sections E.2.ii and E.3 of this preamble, this IFR redesignates paragraphs (aa) and (bb) to supplement no. 2 to part 748 (Unique Application and Submission Requirements), such that previous (aa) paragraph, detailing “600 Series Major Defense Equipment,” is redesignated as paragraph (bb). Previous paragraph (bb) detailing “semi-automatic firearms controlled under ECCN 0A501.a” is redesignated as paragraph (aa), such that it follows existing paragraph (z) detailing “exports of firearms and certain shotguns temporarily in the U.S.” By making these changes so that the contents of paragraphs (z) and redesignated paragraph (aa) appear sequentially, these requirements should be clearer to the public.

This IFR also revises redesignated paragraph (aa) to include the unique application and submission requirements that apply to exports of other firearms, certain shotguns, and related items. The contents of the original paragraph, “semiautomatic firearms controlled under ECCN 0A501.a,” are redesignated under (aa)(1), with conforming revisions made to the title corresponding to the addition of new ECCNs detailed above. New paragraph (aa)(2) requires the submission of purchase documentation for certain applications. New paragraph (aa)(3) requires the submission of passport or other national identity card information for certain applications. Requirements in new paragraphs (aa)(2) and (3) are detailed below. These formatting and clarifying changes are not expected to have any impact on the number of purchase orders received by BIS.

ii. Addition of purchase order requirement for non-A:1 countries.

This IFR amends the EAR to require that a purchase order be submitted for exports and reexports of firearms and related items to non-A:1 countries. Previously, exporters were not required to submit a purchase order with BIS license applications, unless requested during the course of BIS's review of a particular application. This practice created a number of challenges. First, BIS processed and reviewed many applications that did not result in actual exports, thereby unnecessarily expending staffing resources. Previously, less than 20% of licensed quantities were actually exported. In addition, such licensing that did not result in exports offered limited visibility into actual demand for U.S. firearms abroad, which in turn made effective monitoring of diversion risks more difficult. Requiring purchase orders for exports and reexports to non-A:1 countries will enable BIS to use licensed quantities to estimate

bona fide

local demand, thereby ensuring that BIS can appropriately evaluate the national security and foreign policy risks associated with a given transaction and effectively allocate review and processing resources. This IFR specifies that purchase orders must be dated within 1 year of their submission with a license application. Purchase orders are required for certain items controlled under ECCNs 0A501 (except 0A501.y), 0A502, 0A505 (except 0A505.c), 0A505.d, and 0A505.e), 0A506, 0A507, and 0A508, and 0A509. Upon approving a license for these items, BIS will generally limit the licensed quantity to the quantity specified on the purchase order. However, applicants may request up to a 10% increase in quantity from the purchase order amount, which will be reviewed on a case-by-case basis. Additionally, parties may export or reexport various model types under the approved license, so long as the items remain consistent with the ECCN and ECCN item level paragraph specified on the approved application. These requirements appear in new paragraph (aa)(2) of supplement no. 2 to part 748. These changes are expected to result in a net increase of 7,109 purchase orders that will need to be submitted with license applications. BIS estimates that the time required to submit each will be 1 minute; this will result in an increase in burden hours of 116 hours. That estimate factors in that these changes are expected to result in a decrease of 500 license applications received annually because some exporters will be unwilling or unable to provide purchase orders.

3. Requiring Passport or National Identity Card for Firearms License Applications for Natural Persons Located in Destinations Other Than in Country Group A:1

Governmental purchasers and commercial distributors constitute the vast majority of end users identified on firearms license applications. However, in some cases, an exporter or reexporter may apply for a license to export or reexport firearms to a natural person (individual) abroad. This IFR amends the EAR to require that a passport or national identity card be submitted for exports and reexports of firearms and related items to natural persons in non-A:1 countries. Previously, passports or other national identity cards were not required with submission of applications for export to individuals unless requested by BIS for a specific license application. Based on its history of reviewing applications destined for individual recipients, BIS has determined that a passport or national identity card would help ensure robust vetting of the appropriate end user identified on the application, including vetting by local law enforcement in the recipient country, particularly to address any potential diversion risks. For example, BIS might use a national identity card to distinguish between individuals with the same name. Under this IFR, license applications for items controlled under ECCNs 0A501 (except 0A501.y), 0A502, 0A504, 0A505 (except 0A505.c, 0A505.d, and 0A505.e), 0A506, 0A507, 0A508, and 0A509 for individuals in destinations other than Country Group A:1 require the submission of passport or other national identity card information for all named individual recipient end users of those items. This requirement is detailed under new paragraph (aa)(3) to supplement no. 2 to part 748. These changes are expected to result in an increase of 3,160 passports or other national identity card information that will be submitted annually. BIS estimates that the time required to submit each document is 1 minute; resulting in an increase in burden hours of 57 hours. That estimate factors in that these changes are expected to result in a decrease of 100 license applications received annually by BIS, because some individuals will not want to provide such information to exporters or reexporters as part of the license application process.

F. Adoption of Formalized Interagency Working Group for Firearms License Application To Enhance the Existing Interagency License Review Process

BIS license applications involving 0x5zz items are reviewed by the longstanding interagency review processes specified under part 750 of the EAR. Accordingly, BIS has consulted with interagency partners regarding the review of license applications for exports and reexports of these items since their respective additions to the CCL. Additionally, BIS has participated in an informal interagency working group with representatives from State since summer 2023 to ensure appropriate focus on firearms license applications. This interagency review process is an important mechanism in ensuring that U.S. national security and foreign policy

interests are adequately considered in all licensing decisions.

This IFR builds on the existing review process by formalizing an interagency working group, chaired by State, to evaluate firearm diversion and misuse risks. By formalizing an interagency working group on the review process for licensing involving firearms and related items, BIS seeks to ensure proactive tracking across relevant stakeholder agencies of licensing and export data, ongoing review of licenses or pending applications of concern, and collaboration on addressing issues in various countries or with specific end users. Formalizing this process will help ensure its longevity and showcase the U.S. Government's commitment to its success. The creation of a formal interagency working group will help ensure that the risk factors outlined in this IFR (including terrorism, state fragility, corruption, human rights, political violence, and past diversion or misuse) are thoroughly vetted by interagency experts when reviewing firearms-related license applications. State has also committed to lead interagency efforts to use this working group to assess the determinations set out in the Firearms Guidance Memorandum, with the goal of revising the memorandum and updating its list of high-risk destinations annually and as needed. Interagency licensing working groups are detailed under § 750.4(d) of the EAR. This IFR will add § 750.4(d)(2)(v), which describes a new working group called “The Safeguard.” The Safeguard will be chaired by State and will review license applications involving firearm-related items controlled under 0x5zz ECCNs. These changes are not expected to have any impact on the number of license applications received by BIS.

G. Reduction in General License Validity Period (1-Year License Validity for Firearms Licenses)

This IFR amends the EAR to reduce the general validity period from four years to one year for all future licenses involving firearms and related items. Because national security and foreign policy considerations (including human rights-related considerations) in destinations abroad can change rapidly, the risks or potential benefits associated with certain transactions can be difficult to predict several years in advance. Limiting the length of the license validity period will lead to more frequent reviews of exports and thus enable BIS to account for developments and often fluid circumstances in destinations; doing so enables more precise and timely consideration of diversion risk and national security and foreign policy interests. A shortened validity period also reduces the risk of shipments on an expired import certificate, as well as the risk that BIS has to suspend or revoke a license based on rapidly developing national security and foreign policy concerns.

Previously, the general license validity period for a BIS license (with limited exceptions) was four years. Under this IFR, items controlled under ECCNs 0A501, 0A502, 0A504, 0A505, 0A506, 0A507, 0A508, and 0A509 are generally limited to a 12-month validity period under revised § 750.7(g). Licenses extending beyond 12 months for firearms and related items may still be granted in certain limited circumstances, such as transactions involving intra-company transfers of items (

e.g.,

from a subsidiary to a parent company) or government contracts that require a period of performance longer than 12 months. This IFR does not make any other changes to § 750.7(g), and all other aspects of the license validity period (such as expiration date) continue to apply to firearms and related items. This change is expected to result in an increase of 500 license applications received annually by BIS.

H. Changes To Make Mandatory in the Automated Export System the Identification of End-Item Firearms and Shotguns, Along With Certain “Parts,” “Components,” Devices, “Accessories,” and “Attachments” for Semi-Automatic Firearms and Semi-Automatic Shotguns, and Conforming Changes to Conventional Arms Reporting Requirements

As referenced above under section C of this preamble, this IFR creates four new ECCNs, 0A506, 0A507, 0A508, and 0A509, to help distinguish between non-automatic and semi-automatic firearms exports in AES EEI filings, along with the export of certain “parts,” “components,” devices, “accessories,” and “attachments” for semi-automatic firearms and semi-automatic shotguns. However, in order to further enhance the export data to distinguish between end-item firearms exports and other firearms “parts,” “components,” devices, “accessories, or “attachments” exports, as well as simplify the conventional arms reporting requirements for firearms under the EAR (§ 743.4), this IFR revises the requirement in § 758.1(g)(4)(ii), which previously allowed exporters to complete their conventional arms reporting requirements without submitting conventional arms reports to BIS. This IFR revises this reporting requirement by making conventional arms reporting information in the EEI filing in AES mandatory; it does this by specifying that exporters must include the items-level classification or other items-level descriptor in the Commodity description block in the EEI filed in AES. Section I further describes the conventional arms reporting-related changes to the EAR that are being made by this IFR.

Specifically, this IFR revises paragraph (g)(4)(ii) to expand the scope of the heading to include certain “parts,” “components,” devices, “accessories,” and “attachments” controlled under new ECCN 0A509. Because of the importance of these commodities for semi-automatic firearms and semi-automatic shotguns, additional visibility is needed regarding these “parts,” “components,” devices, “accessories,” and “attachments” controlled under new ECCN 0A509, as well as the commodities controlled under ECCNs 0A506, 0A507, and 0A508, for the export clearance requirement under paragraph (g)(4)(ii).

This IFR revises the paragraph (g)(4)(ii) introductory text to make the requirements of this paragraph mandatory instead of optional for all shipments that meet the specified criteria. It also expands the scope of this mandatory export clearance requirement to include not just ECCNs 0A501.a or .b and shotguns with a barrel length less than 18 inches controlled under ECCN 0A502, but also to include items controlled under ECCNs 0A501.a or .b, 0A506.a or .b, 0A507.a and .b, shotguns with a barrel length less than 18 inches controlled under ECCNs 0A502 or 0A508.a. or .b, or “parts,” “components,” devices, “accessories,” or “attachments” controlled under 0A509.a, .b, .c, or .d, as of the effective date of this IFR. To assist exporters in identifying the information that must be included in the Commodity description block in the EEI filing in AES, this IFR also adds new paragraphs (g)(4)(ii)(A) through (F). This information will be particularly helpful for certain ECCNs, such as new ECCN 0A506.a, which controls any semi-automatic centerfire (non-rimfire) rifles equal to .50 caliber (12.7 mm) or less that has any of the characteristics that will be specified under 0A506.a.1 through .a.6. New paragraph (g)(4)(ii)(C) specifies that, in that case, .a will appear as the first text in the Commodity description block in the EEI filing in AES. These changes are not expected to result in an increase in burden; a commodity description was already required to be provided in the EEI in AES prior to the effective date of this IFR, so including this additional information as part of the commodity

description will not change the burden hours for exporters.

I. Conventional Arms Reporting—Related Changes

This IFR revises the conventional arms reporting requirements in § 743.4 to make a conforming change for new ECCNs 0A506.a. and .b and 0A507.a. and .b. This IFR also revises § 743.4 to specify that BIS will be relying solely on the alternative submission method for obtaining the required information for the conventional arms reporting, as was also referenced above under section F of this preamble.

Conforming change to add 0A506.a and .b and 0A507.a and .b to the conventional arms reporting requirements.

This IFR revises § 743.4 to add references to the end-item firearms controlled under ECCNs 0A506.a and .b and 0A507.a, .b, and .c, to specify that these semi-automatic rifles and pistols are included for the conventional arms reporting for the Wassenaar Arrangement semi-annual reporting and the United Nations annual report described under § 743.4. This approach is consistent with how these items were previously reported when controlled under ECCN 0A501.a or .b. The changes discussed below regarding BIS's use of EEI data to meet conventional arms reporting requirements affect both the existing ECCNs and the newly added ECCNs referenced in § 743.4 (

i.e.,

ECCNs 0A501.a and .b, 0A506.a and .b, and 0A507.a. and .b).

Specifying that BIS will use AES EEI data to meet the conventional arms reporting requirements of 0A501.a and .b, 0A506.a and .b, and 0A507.a and .b.

In preparing this IFR, BIS reevaluated the conventional arms reporting requirements under existing § 743.4 and the alternative submission method for ECCN 0A501.a and .b referenced under §§ 743.4(h) and 758.1(g)(4)(ii) based on its experience since ECCNs 0A501.a and .b were added to the EAR on March 9, 2020. BIS determined, based on this review, that the conventional arms reporting requirements could be simplified by making the alternative submission method the sole method that exporters use to submit the information to meet the conventional arms reporting requirement for ECCN 0A501.a or .b, as well as for semi-automatic rifles controlled under ECCN 0A506.a and .b and semi-automatic pistols controlled under 0A507.a and .b.

Previously, BIS added the alternative submission method in § 743.4(h) of the EAR as part of the January 2020 EAR final rule to reflect exporters' recommendation that BIS use AES EEI data to obtain the information required for these two conventional arms reports. The alternative submission method gave exporters the option of including the additional .a or .b information as the first characters to appear in the commodity description block in AES, rather than requiring submission of information on end-item firearms under ECCN 0A501.a and .b in separate reports to BIS. Based on data reviewed by BIS, nearly all exporters have been using this alternative submission method to meet their conventional arms reporting requirements since March 9, 2020, the effective date of the January 2020 rule. The alternative submission method has also been an efficient method for extracting the data needed by BIS to prepare these reports.

In addition, consistent with BIS's interest in increasing transparency regarding exports and reexports of the semi-automatic firearms and related “parts,” “components,” devices, “accessories,” and “attachments,” this IFR revises § 758.1(g)(4)(ii), as described above under section F, to include the “items” level paragraph classification as the first characters to appear in the Commodity description block in the EEI filed in AES mandatory for ECCNs 0A501.a and .b, 0A506.a and .b, 0A507.a and .b, 0A508.a and .b. Given that a commodity description was already previously required in the EEI filing in AES, including this additional information as part of the commodity description is not expected to change the burden hours for exporters.

As a result of the requirement to submit item paragraph information in AES, the existing provisions in § 743.4 that require exporters to submit annual and semi-annual reports for the purposes of conventional arms reporting via email (“standard method”) unless the exporter provides the item paragraph classification with the exporter's AES EEI filings (“alternative method”) are no longer necessary, because BIS will be able to rely on AES data pursuant to the revisions to § 758.1(g)(4)(ii) addressing conventional arms reporting for ECCN 0A501.a and .b, as well as for 0A506.a and .b and 0A507.a and .b. These changes will streamline the exporter's reporting obligations by limiting them to the AES filing requirement. Because nearly all exporters that were required to submit conventional arms reports to BIS were already using the alternative method, the elimination of the submission of email reports as an available method under revised § 743.4 will not result in a substantive change in the burden on exporters.

J. Revocations and Modifications to Existing Licenses

Based on the policy rationale identified above, BIS has determined that it is necessary to revoke or modify certain valid licenses for the export and reexport of firearms and related items to non-government end users. As described below, on July 1, 2024, BIS will revoke all currently valid licenses to non-government end users in High-Risk Destinations for Firearms and Related Items. (

See

supplement no. 3 to part 742.) In addition, on May 30, 2024, BIS will modify certain other valid licenses with validity periods that end more than one year from the effective date of this IFR by rendering them invalid one year from the effective date of this IFR. These modified licenses cover exports and reexports to non-government end users in destinations outside High-Risk Destinations for Firearms and Related Items, Country Group A:1, Israel, and Ukraine.

1. License Revocations

On July 1, 2024, pursuant to § 750.8 of the EAR, BIS will revoke existing licenses for the export and reexport of firearms and related items to non-government end users in destinations identified in supplement no. 3 to part 742 (High-Risk Destinations for Firearms and Related Items). As discussed above, the Firearms Guidance Memorandum has identified that there is a substantial risk that firearms and related items exported or reexported to non-government end users in these destinations will be diverted or misused in a manner adverse to U.S. national security and foreign policy, including for use in drug trafficking, regional conflict, or human rights abuses. Accordingly, as discussed above, this IFR applies a presumption of denial to all license applications submitted on or after May 30, 2024 and seeking to export or reexport firearms and related items to non-government end users in these destinations. Existing licenses for exports and reexports to non-government end users in these destinations were issued under previous review criteria. Accordingly, failure to revoke these licenses would allow firearms and related items to continue to be exported to these destinations for up to several more years without review under the new policy. Such ongoing exports or reexports of firearms and related items could create a substantial risk of diversion and stockpiling in a manner contrary to U.S. national security and foreign policy interests.

BIS will issue these revocations on July 1, 2024, 30 days after the effective

date of this IFR, to ensure that planned shipments may be completed without disruption to ongoing trade. For any license that is revoked, the license holder may appeal a revocation to the Under Secretary for Industry and Security pursuant to § 756 of the EAR. Procedures for filing such an appeal are described in detail in § 756.2(b) of the EAR and will be included in the letters that BIS will send to notify license holders of the pending revocation. License holders whose license(s) are revoked by BIS may reapply to export or reexport the items covered by the revoked license without prejudice under BIS's new licensing policy, as described in this IFR.

2. License Modification

In addition to revoking the licenses described above, BIS will, upon the effective date of this IFR, May 30, 2024, pursuant to § 750.8 of the EAR, modify certain existing licenses for firearms and related items to non-government end users that have more than one year remaining of their validity periods to render them invalid on May 30, 2025. These modifications will not affect licenses to non-government end users in Country Group A:1, Israel, and Ukraine (which implement export controls consistent with the Wassenaar Arrangement), or to High-Risk Destinations for Firearms and Related Items. The affected licenses were not reviewed under the new policies established in this IFR, and were issued with a four-year validity period rather than the one-year general validity period established in this IFR. As discussed elsewhere in this IFR, BIS is shortening the validity period of licenses to export or reexport firearms and related items to one year to enable more precise consideration of the risk of diversion or misuse, consistent with national security and foreign policy interests. Accordingly, BIS is modifying the validity period of certain existing licenses, not subject to revocation, in furtherance of this effort.

The revocations and modifications described in section J, are expected to result in an increase of 270 license applications received annually by BIS. However, this is anticipated to be a one-time increase.

K. Request for Public Comment

In addition to seeking public comment on the changes reflected in this IFR, including the four new ECCNs and conforming changes (

see

Table 1 under section B.6 of this IFR), BIS is specifically seeking public comment on the issues below. See the

ADDRESSES

section of this rule for instructions on how to submit comments.

(1) BIS seeks comments on the expected impact on individuals, as well as industry, should BIS impose a time limit on the use of § 740.14 BAG License Exception for firearms classified under ECCNs 0A501, 0A502, 0A506, 0A507, and 0A508. Such limits would require the items to be returned to the United States or other country of re-export within the specified time limit, or to otherwise be disposed of in accordance with the EAR,

e.g.,

by obtaining a BIS license to authorize a longer temporary export or a permanent export. For temporary exports or reexports longer than the BAG time limit, a license would be required to authorize the export or reexport. In considering revisions to BAG, BIS identified that imposing a time limit of 45-, 60-, 90-, or 180-days on how long the exporter is eligible to keep the firearms out of the country could help address diversion risks.

(2) BIS seeks comments on potential additional revisions to § 740.14 of the EAR to require exporters of applicable firearms and related commodities authorized under License Exception BAG to submit EEI filings in AES under § 758.1(b)(9). This IFR does not make changes to the exemption from the EEI filing requirements for License Exception BAG authorized exports or the export clearance requirements under § 758.11, which will continue to require submission of the CBP Form 4457. However, BIS seeks comments on the potential impact on individuals if BIS were to remove the requirements in § 758.11 and instead require mandatory EEI filing in AES. BIS is aware of concerns about requiring individuals to file EEI in AES for License Exception BAG authorized exports; because of the benefits to increasing transparency and reducing the chance of diversion, BIS is considering whether additional changes may be warranted in this export clearance area. BIS also welcomes comments that provide alternative suggestions for increasing transparency and reducing diversion risk without imposing a mandatory EEI filing requirement in AES for exports authorized under License Exception BAG.

Export Control Reform Act of 2018

On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA), 50 U.S.C. 4801-4852. ECRA, as amended, provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this IFR.

Rulemaking Requirements

1. BIS has examined the expected impact of this IFR as required by Executive Orders 12866, 13563, and 14094, which direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public, health, and safety effects, distributive impacts, and equity). This IFR is considered a “significant regulatory action” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094.

2. Notwithstanding any other provision of law, no person may be required to respond to or be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501

et seq.

) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves five collections currently approved by OMB.

• OMB Control Number 0694-0088,

Simplified Network Application Processing System;

• OMB Control Number 0694-0096,

Five Year Records Retention Period;

• OMB Control Number 0694-0122,

Licensing Responsibilities and Enforcement;

• OMB Control Number 0694-0137,

License Exceptions and Exclusions;

and

• OMB Control Number 0607-0152,

Automated Export System (AES) Program.

Additional information regarding these collections of information—including all background materials—can be found at

https://www.reginfo.gov/public/do/PRAMain

by using the search function to enter either the title of the collection or the OMB Control Number.

With regard to control number 0694-0088,

Simple Network Application Process and Multipurpose Application Form.

BIS expects an increase of 1003 burden hours for this collection; however, 132 hours of this increase is anticipated to be a one-time increase related to the revocation and modification of licenses for firearms and related items described in section J of this IFR. These additional burden hours will be added during the current renewal approval process for this information collection.

For OMB control number 0694-0137,

License Exceptions and Exclusions,

BIS expects a slight increase in burden

hours for this collection because of the new restriction on the use of License Exceptions under § 740.2(a)(24). This requires exporters to obtain a copy of an import certificate or equivalent document (if required by the importing country) before the exporter can use any license exception for items controlled under ECCNs 0A501, 0A502, 0A504, 0A505, 0A506, 0A507, 0A508, and 0A509. Although BIS anticipates that this requirement could increase reporting burden to some degree under this collection, BIS believes that exporters, as part of their existing compliance programs, likely already have processes in place to confirm whether the firearms and related items that are to be exported may be imported into these foreign countries. BIS believes this requirement is likely reflective of practices and processes exporters already have in place and will therefore be of a minimal burden to exporters. BIS welcomes comments on this information collection requirement and on the assumptions that this confirmation requirement is not a deviation from exporters' current practices to ensure that exports of firearms and related items that are authorized under BIS license exceptions may be imported into the respective countries of import. In order to protect U.S. national security and foreign policy interests and to ensure that EAR license exceptions are not used to authorize an export of a firearm or related commodity when a foreign government requires an import certificate or other equivalent document that has not been issued, this IFR imposes a new general restriction on the use of all EAR license exceptions under § 740.2(a)(24). A similar type of import certificate or other equivalent document requirement applies for items authorized under a BIS license.

The AES change included in this rule under § 758.1(g)(4)(ii) is not anticipated to result in a change in the burden under the OMB control number 0607-0152,

Automated Export System (AES) Program

because exporters are already required to provide a description in the Commodity description block in the EEI filing in AES. Similarly, changes impacting OMB control numbers 0694-0096 and 0694-0122,

Five Year Records Retention Period

and

Licensing Responsibilities and Enforcement,

respectively, are not expected to result in an increase in burden hours.

3. This rule does not contain policies with federalism implications as that term is defined under Executive Order 13132.

4. Pursuant to Section 1762 of ECRA (50 U.S.C. 4821), this action is exempt from the Administrative Procedure Act (APA) (5 U.S.C. 553) requirements for notice of proposed rulemaking, opportunity for public participation, and delay in effective date.

5. Because neither the Administrative Procedure Act nor any other law requires notice of proposed rulemaking and an opportunity for public comment for this rule, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601

et seq.

) are not applicable. Accordingly, no Final Regulatory Flexibility Analysis is required and none has been prepared.

List of Subjects

15 CFR Part 732, 738, 740, 750, and 758

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

15 CFR Part 734

Administrative practice and procedure, Exports, Inventions and patents, Research, Science and technology.

15 CFR Part 742

Exports, Terrorism.

15 CFR Part 743

Administrative practice and procedure, Reporting and recordkeeping requirements.

15 CFR Part 748

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

15 CFR Part 762

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

15 CFR Part 772

Exports.

15 CFR Part 774

Exports, Reporting and recordkeeping requirements, Terrorism.

Accordingly, parts 732, 734, 738, 740, 742, 743, 748, 750, 758, 762, 772 and 774 of the Export Administration Regulations (15 CFR parts 730-774) are amended as follows:

PART 732—STEPS FOR USING THE EAR

1. The authority citation for 15 CFR part 732 continues to read as follows:

Authority:

50 U.S.C. 4801-4852; 50 U.S.C. 4601

et seq.;

50 U.S.C. 1701

et seq.;

E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783.

2. Section 732.2 is amended by revising paragraph (b) introductory text to read as follows:

§ 732.2

Steps regarding scope of the EAR.

(b)

Step 2: Publicly available technology and software.

This step is relevant for both exports and reexports. Determine if your technology or software is publicly available as defined and explained at part 734 of the EAR. The Bureau of Industry and Security (BIS) website at

https://www.bis.doc.gov

contains several practical examples describing publicly available technology and software that are outside the scope of the EAR under the FAQ section of the website. See the FAQs under the heading, EAR Definitions, Technology and Software, Fundamental Research, and Patents FAQs at

https://www.bis.doc.gov/index.php/documents/compliance-training/export-administrationregulations-training/1554-ear-definitions-faq/file.

The examples are illustrative, not comprehensive. Note that encryption software classified under ECCN 5D002 on the Commerce Control List (refer to supplement no. 1 to part 774 of the EAR) is subject to the EAR even if publicly available, except for publicly available encryption object code software classified under ECCN 5D002 when the corresponding source code meets the criteria specified in § 740.13(e) of the EAR. The following also remains subject to the EAR: “Software” or “technology” for the production of a firearm, or firearm frame or receiver, controlled under ECCNs 0A501, 0A506, 0A507, or 0A509, as referenced in § 734.7(c) of the EAR.

PART 734—SCOPE OF THE EXPORT ADMINISTRATION REGULATIONS

3. The authority citation for 15 CFR part 734 continues to read as follows:

Authority:

50 U.S.C. 4801-4852; 50 U.S.C. 4601

et seq.;

50 U.S.C. 1701

et seq.;

E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13637, 78 FR 16129, 3 CFR, 2014 Comp., p. 223; Notice of November 8, 2022, 87 FR 68015 (November 10, 2022).

4. Section 734.7 is amended by revising paragraph (c) to read as follows:

§ 734.7

Published.

frame or receiver, controlled under ECCNs 0A501, 0A506, 0A507, or 0A509, that is made available by posting on the internet in an electronic format, such as AMF or G-code, and is ready for insertion into a computer numerically controlled machine tool, additive manufacturing equipment, or any other equipment that makes use of the “software” or “technology” to produce the firearm frame or receiver or complete firearm.

PART 738—COMMERCE CONTROL LIST OVERVIEW AND THE COUNTRY CHART

5. The authority citation for 15 CFR part 738 continues to read as follows:

Authority:

50 U.S.C. 4801-4852; 50 U.S.C. 4601

et seq.;

50 U.S.C. 1701

et seq.;

10 U.S.C. 8720; 10 U.S.C. 8730(e); 22 U.S.C. 287c; 22 U.S.C. 2151 note; 22 U.S.C. 3201

et seq.;

22 U.S.C. 6004; 42 U.S.C. 2139a; 15 U.S.C. 1824; 50 U.S.C. 4305; 22 U.S.C. 7201

et seq.;

22 U.S.C. 7210; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783.

6. Supplement no. 1 to part 738 is revised to read as follows:

Supplement No. 1 to Part 738—Commerce Country Chart

[Reason for control]

Countries

Chemical and biological weapons

CB 1

CB 2

CB 3

Nuclear

nonproliferation

NP 1

NP 2

National

security

NS 1

NS 2

Missile tech

MT 1

Regional

stability

RS 1

RS 2

Firearms

convention

FC 1

Crime

control

CC 1

CC 2

CC 3

Anti-

terrorism

AT 1

AT 2

Afghanistan

Albania

2 3

Algeria

Andorra

Angola

Antigua and Barbuda

Argentina

Armenia

Aruba

Australia

Austria

3 4

Azerbaijan

Bahamas, The

Bahrain

Bangladesh

Barbados

Belarus

Belgium

Belize

Benin

Bhutan

Bolivia

Bosnia and Herzegovina

Botswana

Brazil

Brunei

Bulgaria

Burkina Faso

Burma

Burundi

Cambodia

Cameroon

Canada

Cape Verde

Central African Republic

Chad

Chile

China

Colombia

Comoros

Congo (Democratic Republic of the)

Congo (Republic of the)

Costa Rica

Cote d'Ivoire

Croatia

Cuba

See part 746 of the EAR to determine whether a license is required in order to export or reexport to this destination.

Curaçao

Cyprus

2 3 4

Czech Republic

Denmark

Djibouti

Dominica

Dominican Republic

Ecuador

Egypt

El Salvador

Equatorial Guinea

Eritrea

Estonia

Ethiopia

Fiji

Finland

3 4

France

Gabon

Gambia, The

Georgia

Germany

Ghana

Greece

Grenada

Guatemala

Guinea

Guinea-Bissau

Guyana

Haiti

Honduras

Hungary

Iceland

India

Indonesia

Iran

See part 746 of the EAR to determine whether a license is required in order to export or reexport to this destination..

Iraq

Ireland

3 4

Israel

Italy

Jamaica

Japan

Jordan

Kazakhstan

Kenya

Kiribati

Korea, North

See Sections 742.19 and 746.4 of the EAR to determine whether a license is required in order to export or reexport to this destination.

Korea, South

3 4

Kosovo

Kuwait

Kyrgyzstan

Laos

Latvia

Lebanon

Lesotho

Liberia

Libya

Liechtenstein

Lithuania

Luxembourg

Macau

Macedonia (The Former Yugoslav Republic of)

Madagascar

Malawi

Malaysia

Maldives

Mali

Malta

2 3 4

Marshall Islands

Mauritania

Mauritius

Mexico

Micronesia (Federated State of)

Moldova

Monaco

Mongolia

Montenegro

Morocco

Mozambique

Namibia

Nauru

Nepal

Netherlands

New Zealand

Nicaragua

Niger

Nigeria

Norway

Oman

Pakistan

Palau

Panama

Papua New Guinea

Paraguay

Peru

Philippines

Poland

Portugal

Qatar

Romania

Russia

Rwanda

St. Kitts and Nevis

St. Lucia

St. Vincent and the Grenadines

Samoa

San Marino

Sao Tome and Principe

Saudi Arabia

Senegal

Serbia

Seycheles

Sierra Leone

Singapore

Sint Maarten (the Dutch two-fifths of the island of Saint Martin)

Slovakia

Slovenia

Solomon Islands

Somalia

South Africa

2 3 4

South Sudan, Republic of

Spain

Sri Lanka

Sudan

Suriname

Swaziland

Sweden

3 4

Switzerland

3 4

Syria

See § 746.9 of the EAR to determine whether a license is required in order to export or reexport to this destination.

Taiwan

Tajikistan

Tanzania

Thailand

Timor-Leste

Togo

Tonga

Trinidad and Tobago

Tunisia

Turkey

Turkmenistan

Tuvalu

Uganda

Ukraine

United Arab Emirates

United Kingdom

Uruguay

Uzbekistan

Vanuatu

Vatican City

Venezuela

Vietnam

Western Sahara

Yemen

Zambia

Zimbabwe

See § 746.1(b) for United Nations Security Council Sanctions under the EAR. See § 746.3 for United Nations Security Council-related license requirements for exports and reexports to Iraq or transfer within Iraq under the EAR, as well as regional stability licensing requirements not included in the Country Chart.

See § 742.4(a) for special provisions that apply to exports and reexports to these countries of certain thermal imaging cameras.

See § 742.6(a)(3) for special provisions that apply to military commodities that are subject to ECCN 0A919.

See § 742.6(a)(2) and (4)(ii) regarding special provisions for exports and reexports of certain thermal imaging cameras to these countries.

Refer to Switzerland for licensing requirements for Liechtenstein under the EAR.

See § 746.5 of the EAR for additional license requirements under the Russian Industry Sector Sanctions for ECCNs 0A998, 1C992, 3A229, 3A231, 3A232, 6A991, 8A992, and 8D999 and items identified in supplement no. 2 to part 746 of the EAR. See § 746.8 of the EAR for Sanctions against Russia and Belarus, including additional license requirements for items listed in any ECCN on the CCL.

Note that a license is still required for items controlled under ECCNs 6A003.b.4.b and 9A515.e for RS column 2 reasons when destined to India.

See § 746.6 of the EAR for additional license requirements for exports and reexports to the Crimea region of Ukraine and the so-called Donetsk People's Republic (DNR) and Luhansk People's Republic (LNR) regions of Ukraine and transfers (in-country) within the Crimea, DNR, and LNR regions of Ukraine for all items subject to the EAR, other than food and medicine designated as EAR99 and certain EAR99 or ECCN 5D992.c software for internet-based communications.

PART 740—LICENSE EXCEPTIONS

7. The authority citation for 15 CFR part 740 continues to read as follows:

Authority:

50 U.S.C. 4801-4852; 50 U.S.C. 4601

et seq.;

50 U.S.C. 1701

et seq.;

22 U.S.C. 7201

et seq.;

E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783.

8. Section 740.2 is amended by:

a. Revising paragraphs (a)(4)(iii), (a)(21) and (23); and

b. Adding paragraph (a)(24).

The revisions and addition read as follows:

§ 740.2

Restrictions on all License Exceptions.

(a) * * *

(4) * * *

(iii) Authorized by § 740.14(e) of the EAR; or

(21) The reexport or transfer (in-country) of firearms classified under ECCNs 0A501, 0A502, 0A506, 0A507, or 0A508 with either an ITAR-defined “foreign defense article” (22 CFR 120.39) that is not subject to Department of State jurisdiction that is incorporated into the firearm or “knowledge” that an ITAR-defined “defense article” (22 CFR 120.31) will be subsequently incorporated into the firearm, where the “(foreign) defense article” is described in USML Category I(h)(2). In such instances, no license exceptions are available except for License Exception GOV (§ 740.11(b)(2)(ii)).

(23) Exports, reexports, or transfers (in-country) of semi-automatic firearms or shotguns controlled under ECCNs 0A506, 0A507, or 0A508 sold under a contract or otherwise part of an export that includes $4,000,000 or more of such items are not eligible for any license exceptions except to personnel and agencies of the U.S. Government

under License Exception GOV (§ 740.11(b) of the EAR), for official use by an agency of NATO, or where a license exception would otherwise be available for the export, reexport, or transfer (in-country) of such items to a destination specified in Country Groups A:5 or A:6 (see supplement no. 1 to part 740 of the EAR) except Mexico, South Africa, or Turkey.

(24) Exporters of items controlled under ECCNs 0A501, 0A502, 0A504, 0A505, 0A506, 0A507, 0A508, or 0A509 wishing to use an EAR license exception for such items must first have the consignee obtain and provide to the exporter an import certification or equivalent document, if the importing country requires one, prior to using an EAR license exception.

9. Section 740.3 is amended by revising paragraph (b) to read as follows:

§ 740.3

Shipments of limited value (LVS).

(b)

Eligible destinations.

This License Exception is available for all destinations in Country Group B (see supplement no. 1 to this part), provided that the net value of the commodities included in the same order and controlled under the same ECCN entry on the CCL does not exceed the amount specified in the LVS paragraph for that entry. However, License Exception LVS is not available for 0x5zz items (except 0A504.g) when destined for countries in “CARICOM” or countries in Country Group D:5.

10. Section 740.9 is amended by revising paragraphs (a) introductory text, (b) introductory text, and (b)(5) to read as follows:

§ 740.9

Temporary imports, exports, reexports, and transfers (in-country) (TMP).

(a)

Temporary exports, reexports, and transfers (in-country).

License Exception TMP authorizes exports, reexports, and transfers (in-country) of items for temporary use abroad (including use in or above international waters) subject to the conditions specified in this paragraph (a). No item may be exported, reexported, or transferred (in-country) under this paragraph (a) if an order to acquire the item, such as a purchase order, has been received before shipment; with prior knowledge that the item will stay abroad beyond the terms of this License Exception; or when the item is for subsequent lease or rental abroad. The references to various countries and country groups in these TMP-specific provisions do not limit or amend the prohibitions in § 740.2 of the EAR on the use of license exceptions generally, such as for exports of 9x515 or “600 series” items to destinations in Country Group D:5. This paragraph (a) does not authorize any export of a commodity controlled under ECCNs 0A501.a or .b, 0A506 or 0A507, or shotguns with a barrel length less than 18 inches controlled under ECCN 0A502 or 0A508 to, or any export of such an item that was imported into the United States from, a country in Country Group D:5 (supplement no. 1 to this part), or from Russia, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or Uzbekistan. The only provisions of this paragraph (a) that are eligible for use to export such items are paragraph (a)(5) of this section (“Exhibition and demonstration”) and paragraph (a)(6) of this section (“Inspection, test, calibration, and repair”). In addition, this paragraph (a) may not be used to export more than 75 firearms per shipment. In accordance with the requirements in § 758.1(b)(9) and (g)(4) of the EAR, the exporter or its agent must provide documentation that includes the serial number, make, model, and caliber of each firearm being exported by filing these data elements in an EEI filing in AES. In accordance with the exclusions in License Exception TMP under paragraph (b)(5) of this section, the entry clearance requirements in § 758.1(b)(9) do not permit the temporary import of: Firearms controlled in ECCNs 0A501.a or .b, 0A506, or 0A507 that are shipped from or manufactured in a Country Group D:5 country, or that are shipped from or manufactured in Russia, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or Uzbekistan (except for any firearm model designation (if assigned) controlled by ECCNs 0A501, 0A506, or 0A507 that is specified under annex A in supplement no. 4 to this part); or shotguns with a barrel length less than 18 inches controlled in ECCNs 0A502 or 0A508 that are shipped from or manufactured in a Country Group D:5 country, or from Russia, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or Uzbekistan, because of the exclusions in License Exception TMP under paragraph (b)(5) of this section.

(b)

Exports of items temporarily in the United States.

No provision of this paragraph (b), other than paragraph (b)(3), (4), or (5), may be used to export firearms controlled by ECCN 0A501.a, .b, 0A506, 0A507, or shotguns with a barrel length less than 18 inches controlled in ECCN 0A502 or 0A508.

(5)

Exports of firearms and certain shotguns temporarily in the United States.

This paragraph (b)(5) authorizes the export of no more than 75 firearms per shipment controlled by ECCN 0A501.a or .b, 0A506, 0A507, or shotguns with a barrel length less than 18 inches controlled in ECCN 0A502 or 0A508 that are temporarily in the United States for a period not exceeding one year, provided that:

(i) The firearms were not shipped from or manufactured in a U.S. arms embargoed country,

i.e.,

destination listed in Country Group D:5 in supplement no. 1 to this part;

(ii) The firearms were not shipped from or manufactured in Russia, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or Uzbekistan, except for any firearm model controlled by 0A501, 0A506, or 0A507 that is specified under annex A in supplement no. 4 to this part; and

(iii) The firearms are not ultimately destined to a U.S. arms embargoed country,

i.e.,

destination listed in Country Group D:5 in supplement no. 1 to this part;

(iv) When the firearms entered the U.S. as a temporary import, the temporary importer or its agent:

(A) Provided the following statement to U.S. Customs and Border Protection: “This shipment will be exported in accordance with and under the authority of License Exception TMP (15 CFR 740.9(b)(5))”;

(B) Provided to U.S. Customs and Border Protection an invoice or other appropriate import-related documentation (or electronic equivalents) that includes a complete list and description of the firearms being temporarily imported, including their model, make, caliber, serial numbers, quantity, and U.S. dollar value; and

(C) Provided (if temporarily imported for a trade show, exhibition, demonstration, or testing) to U.S. Customs and Border Protection the relevant invitation or registration documentation for the event and an accompanying letter that details the arrangements to maintain effective control of the firearms while they are in the United States; and

(v) In addition to the export clearance requirements of part 758 of the EAR, the exporter or its agent must provide the import documentation related to paragraph (b)(5)(iv)(B) of this section to U.S. Customs and Border Protection at the time of export.

Note 1 to paragraph (b)(5):

In addition to complying with all applicable EAR

requirements for the export of commodities described in paragraph (b)(5) of this section, exporters and temporary importers should contact U.S. Customs and Border Protection (CBP) at the port of temporary import or export, or at the CBP website, for the proper procedures for temporarily importing or exporting firearms controlled in ECCNs 0A501.a or .b, 0A506, or 0A507, or shotguns with a barrel length less than 18 inches controlled in ECCN 0A502 or 0A508, including regarding how to provide any data or documentation required by BIS.

Note 2 to paragraph (b):

A commodity withdrawn from a bonded warehouse in the United States under a `withdrawal for export' customs entry is considered as `moving in transit'. It is not considered as `moving in transit' if it is withdrawn from a bonded warehouse under any other type of customs entry or if its transit has been broken for a processing operation, regardless of the type of customs entry.

Note 3 to paragraph (b):

Items shipped on board a vessel or aircraft and passing through the United States from one foreign country to another may be exported without a license provided that (a) while passing in transit through the United States, they have not been unladen from the vessel or aircraft on which they entered, and (b) they are not originally manifested to the United States.

Note 4 to paragraph (b):

A shipment originating in Canada or Mexico that incidentally transits the United States en route to a delivery point in the same country does not require a license.

11. Section 740.10 is amended by revising paragraphs (b)(1) and (4) to read as follows:

§ 740.10

License Exception Servicing and replacement of parts and equipment (RPL).

(b) * * *

(1) The provisions of this paragraph (b) authorize the export and reexport to any destination, except for 9x515 or “600 series” items to destinations identified in Country Group D:5 (see supplement no. 1 to this part) or otherwise prohibited under the EAR, of commodities and software that were sent to the United States or to a foreign party for servicing and replacement of commodities and software “subject to the EAR” (see § 734.2(a) of the EAR) that are defective or that an end user or ultimate consignee has found unacceptable. The export of firearms controlled by ECCNs 0A501.a or .b, 0A506, or 0A507 or shotguns with a barrel length less than 18 inches controlled in ECCN 0A502 or 0A508 temporarily in the United States for servicing and replacement may be exported under paragraph (b)(2) or (3) of this section only if the additional requirements in paragraph (b)(4) of this section are also met.

(4) This paragraph (b)(4) authorizes the export of firearms controlled by ECCNs 0A501.a or .b, 0A506, 0A507 or shotguns with a barrel length less than 18 inches controlled in ECCNs 0A502 or 0A508 that are temporarily in the United States for servicing or replacement for a period not exceeding one year or the time it takes to service or replace the commodity, whichever is shorter, provided that the requirements of paragraph (b)(2) or (3) of this section are met and:

(i) The firearms were not shipped from or manufactured in Russia, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or Uzbekistan, except for any firearm model controlled by 0A501, 0A506, or 0A507 that is specified under Annex A in Supplement No. 4 to this part;

(ii) When the firearms entered the U.S. as a temporary import, the temporary importer or its agent:

(A) Provided the following statement to U.S. Customs and Border Protection: “This shipment will be exported in accordance with and under the authority of License Exception RPL (15 CFR 740.10(b))”;

(C) Provided (if temporarily imported for servicing or replacement) to U.S. Customs and Border Protection the name, address and contact information (telephone number and/or email) of the organization or individual in the U.S. that will be receiving the item for servicing or replacement; and

(iii) In addition to the export clearance requirements of part 758 of the EAR, the exporter or its agent must provide the import documentation related to paragraph (b)(4)(iii)(B) of this section to U.S. Customs and Border Protection at the time of export.

Note 1 to paragraph (b)(4):

In addition to complying with all applicable EAR requirements for the export of commodities described in this paragraph (b)(4), exporters and temporary importers should contact U.S. Customs and Border Protection (CBP) at the port of temporary import or export, or at the CBP website, for the proper procedures for temporarily importing or exporting firearms controlled in ECCN 0A501.a or .b, 0A506, 0A507 or shotguns with a barrel length less than 18 inches controlled in ECCN 0A502 or 0A508, including regarding how to provide any data or documentation required by BIS.

12. Section 740.11 is amended by revising the introductory text to read as follows:

§ 740.11

Governments, international organizations, international inspections under the Chemical Weapons Convention, and the International Space Station (GOV).

This License Exception authorizes exports and reexports for international nuclear safeguards; U.S. government agencies or personnel; agencies of cooperating governments; international inspections under the Chemical Weapons Convention; and the International Space Station. Commodities listed in ECCNs 0A501, 0A506, 0A507, 0A508, and 0A509 are eligible only for transactions described in paragraphs (b)(2)(i) and (ii) of this section. Any item listed in a 0x5zz ECCN for export, reexport, or transfer (in-country) to an E:1 country is eligible only for transactions described in paragraphs (b)(2)(i) and (ii) solely for U.S. Government official use of this section.

13. Section 740.14 is amended by revising paragraph (e) to read as follows:

§ 740.14

Baggage (BAG).

(e)

Special provisions for firearms and ammunition.

(1) A United States citizen or a permanent resident alien leaving the United States may export or reexport shotguns with a barrel length of 18 inches or over controlled under ECCN 0A502 and 0A508 and shotgun shells controlled under ECCN 0A505.b and .c under this License Exception, subject to the following limitations:

(i) Not more than three firearms may be taken on any one trip (this includes shotguns in ECCNs 0A502 or 0A508, as well as firearms in ECCNs 0A501, 0A506, or 0A507).

(ii) The shotguns and shotgun shells must be with the person's baggage.

(iii) The shotguns and shotgun shells must be for the person's exclusive use for legitimate hunting or lawful sporting purposes, scientific purposes, or personal protection, and not for resale or other transfer of ownership or control. Accordingly, except as provided in (e)(2) of this section, shotguns may not be exported permanently under this License Exception. All shotguns and unused shotgun shells must be returned to the United States. Note that since certain countries may require an Import Certificate or a U.S. export license

before allowing the import of a shotgun, you should determine the import requirements of your country of destination in advance.

(2) A nonresident alien leaving the United States may export or reexport under this License Exception only such shotguns and shotgun shells as he or she brought into the United States under the provisions of the Department of Justice Regulations (27 CFR 478.115(d)).

(3) A United States citizen or a permanent resident alien leaving the United States may export under this License Exception firearms, “parts,” “components,” “accessories,” or “attachments” controlled under ECCNs 0A501, 0A506, 0A507, and 0A509 and ammunition controlled under ECCN 0A505.a, subject to the following limitations:

(i) Not more than three firearms may be taken on any one trip (this includes firearms in ECCNs 0A501, 0A506, or 0A507, as well as shotguns in ECCNs 0A502 or 0A508), and no more than 1,000 rounds of ammunition may be taken on any one trip.

(ii) “Parts,” “components,” “accessories,” and “attachments” exported pursuant to this paragraph (e)(3) must be of a kind and limited to quantities that are reasonable for the activities described in paragraph (e)(3)(iv) of this section or that are necessary for routine maintenance of the firearms being exported.

(iii) The commodities must be with the person's baggage.

(iv) The commodities must be for the person's exclusive use and not for resale or other transfer of ownership or control. Accordingly, except as provided in paragraph (e)(4) of this section, firearms, “parts,” “components,” “accessories,” “attachments,” and ammunition, may not be exported permanently under this License Exception. All firearms, “parts,” “components,” “accessories,” or “attachments” controlled under ECCN 0A501, 0A506, 0A507, and 0A509 and all unused ammunition controlled under ECCN 0A505.a exported under this License Exception must be returned to the United States.

(v) Travelers leaving the United States temporarily are required to declare the firearms, “parts,” “components,” “accessories,” “attachments,” and ammunition being exported under this License Exception to a Customs and Border Protection (CBP) officer prior to departure from the United States and present such items to the CBP officer for inspection, confirming that the authority for the export is License Exception BAG and that the exporter is compliant with its terms.

(4) A nonimmigrant alien leaving the United States may export or reexport under this License Exception only such firearms controlled under ECCN 0A501, 0A506, 0A507, and ammunition controlled under ECCN 0A505 as he or she brought into the United States under the relevant provisions of Department of Justice regulations at 27 CFR part 478.

(5) Destination eligibility under this License Exception for items controlled under ECCNs 0A501, 0A502, 0A504, 0A505, 0A506, 0A507, 0A508, or 0A509 is limited to countries other than those in Country Group D:5 (except for Zimbabwe) and “CARICOM” countries.

14. Section 740.20 is amended by revising paragraph (b)(2)(ii) to read as follows:

§ 740.20

License Exception Strategic Trade Authorization (STA).

(b) * * *

(2) * * *

(ii) License Exception STA may not be used for:

(A) Any item controlled in ECCNs 0A501.a, .b, .c, .d, or .e; 0A506; 0A507; 0A509; 0A981; 0A982; 0A983; 0A503; 0E504; 0E982; or

(B) Shotguns with barrel length less than 18 inches controlled in 0A502 or 0A508.

PART 742—CONTROL POLICY—CCL BASED CONTROLS

15. The authority citation for 15 CFR part 742 continues to read as follows:

Authority:

50 U.S.C. 4801-4852; 50 U.S.C. 4601

et seq.;

50 U.S.C. 1701

et seq.;

22 U.S.C. 3201

et seq.;

42 U.S.C. 2139a; 22 U.S.C. 7201

et seq.;

22 U.S.C. 7210; Sec. 1503, Pub. L. 108-11, 117 Stat. 559; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Presidential Determination 2003-23, 68 FR 26459, 3 CFR, 2004 Comp., p. 320; Notice of November 8, 2022, 87 FR 68015 (November 10, 2022).

16. Section 742.6 is amended by revising paragraph (b)(1)(i) to read as follows:

§ 742.6

Regional stability.

(b) * * *

(1) * * *

(i) Applications for exports and reexports of ECCN 0A501, 0A502, 0A504, 0A505, 0A506, 0A507, 0A508, 0A509, 0B501, 0B505, 0D501, 0D505, 0E501, 0E504, and 0E505 items, 9x515, and “600 series” items will be reviewed under the following policies:

(A) Applications for exports and reexports of ECCN 0A501, 0A502, 0A504, 0A505, 0A506, 0A507, 0A508, 0A509, 0B501, 0B505, 0D501, 0D505, 0E501, 0E504, and 0E505 items; 9x515 and “600 series” items will be reviewed on a case-by-case basis to determine whether the transaction is contrary to the national security or foreign policy interests of the United States, including the foreign policy interest of promoting the observance of human rights throughout the world.

(B) Other applications for exports and reexports described in paragraph (a)(1), (2), (6), or (8) of this section will be reviewed on a case-by-case basis to determine whether the export or reexport could contribute directly or indirectly to any country's military capabilities in a manner that would alter or destabilize a region's military balance contrary to the foreign policy interests of the United States.

(C) Applications for reexports of items described in paragraph (a)(3) of this section will be reviewed applying the policies for similar commodities that are subject to the ITAR.

(D) Applications for export or reexport of items classified under ECCNs 0A501, 0A502, 0A505, 0A506, 0A507, 0A508, or 0A509, or any 9x515 or “600 series” ECCN requiring a license in accordance with paragraph (a)(1) or (9) of this section, will also be reviewed consistent with United States arms embargo policies in § 126.1 of the ITAR (22 CFR 126.1), if destined to a country set forth in Country Group D:5 in Supplement No. 1 to part 740 of the EAR.

(E) Applications for export or reexport of “parts,” “components,” “accessories,” “attachments,” “software,” or “technology” “specially designed” or otherwise required for the F-14 aircraft will generally be denied.

(F) Applications for exports and reexports of items classified under ECCNs 0A501, 0A502, 0A504, 0A505, 0A506, 0A507, 0A508, 0A509, 0B501, 0B505, 0D501, 0D505, 0E501, 0E504, or 0E505, or any 9x515 ECCN will be subject to a policy of denial, when destined to China or a country listed in E:1 in Supplement No. 1 to part 740 of the EAR.

(G) Applications for exports and reexports of ECCNs 0A501, 0A502, 0A504, 0A505, 0A506, 0A507, 0A508, 0A509, 0B501, 0B505, 0D501, 0D505, 0E501, 0E504, and 0E505 items will be subject to a policy of denial when there is reason to believe the transaction involves criminal organizations, rebel groups, street gangs, or other similar

groups or individuals, that may be disruptive to regional stability, including within individual countries. * * *

17. Revise § 742.7 to read as follows:

§ 742.7

Crime control and detection.

(a)

License requirements.

In support of U.S. foreign policy to promote the observance of human rights throughout the world, a license is required to export and reexport crime control and detection equipment, related technology and software as follows:

(1) Crime control and detection instruments and equipment and related “technology” and “software” identified in the appropriate ECCNs on the CCL under CC Column 1 in the Country Chart column of the “License Requirements” section. A license is required to countries listed in CC Column 1 (Supplement No. 1 to part 738 of the EAR). Items affected by this requirement are identified on the CCL under the following ECCNs: 0A977, 0A978, 0A979, 0D977, 0E977, 1A984, 1A985, 3A980, 3A981, 3D980, 3E980, 4A003 (for fingerprint computers only), 4A980, 4D001 (for fingerprint computers only), 4D980, 4E001 (for fingerprint computers only), 4E980, 6A002 (for police-model infrared viewers only), 6E001 (for police-model infrared viewers only), 6E002 (for police-model infrared viewers only), and 9A980.

(2) Items designed for the execution of human beings as identified in ECCN 0A981 require a license to all destinations including Australia, Canada, and the United Kingdom. Controls for these items appear in each ECCN; a column specific to these controls does not appear in the Country Chart (supplement no. 1 to part 738 of the EAR).

(3) Certain crime control items require a license to all destinations, except Canada only. These items are identified under ECCNs 0A982, 0A503, and 0E982. Controls for these items appear in each ECCN; a column specific to these controls does not appear in the Country Chart (supplement no. 1 to part 738 of the EAR).

(4) See § 742.11 of the EAR for further information on items controlled under ECCN 0A983, which require a license to all destinations, including Australia, Canada, and the United Kingdom. Controls for these items appear in each ECCN; a column specific to these controls does not appear in the Country Chart (supplement no. 1 to part 738 of the EAR).

(5) Items detailed under this paragraph are specific to certain firearms, shotguns, and related items. Crime control and detection instruments and equipm

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.