Removal of National Security-Based Validated License Requirements for Exports to Proscribed Destinations of Oil Well Perforators

DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Part 799

[Docket No. 930775-4082]

RIN 0694-AA96

Removal of National Security-Based Validated License Requirements

for Exports to Proscribed Destinations of Oil Well Perforators

AGENCY: Bureau of Export Administration, Commerce.

ACTION: Final rule.

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

SUMMARY: This final rule amends ECCN 1C18A to remove national security-

based validated license requirements for exports to Country Groups Q,

W, Y, and Z and the People's Republic of China of certain oil well

perforators. This action is a result of a determination that foreign

availability exists for certain oil well perforators within the meaning

of section 5(f) of the Export Administration Act (EAA), as amended, and

part 791 of the Export Administration Regulations (EAR). The Bureau of

Export Administration (BXA) published an interim rule in the Federal

Register on November 23, 1993 (58 FR 61806), that included the foreign

availability determination and removed national security-based

validated license requirements for exports of these oil well

perforators to Country Groups T and V, except the People's Republic of

China.

A validated export license continues to be required for exports to

Iran, Syria, Country Groups S and Z, and the South African military and

police, for foreign policy reasons.

This rule will eliminate export license applications for these oil

well perforators for all but a few countries, thereby reducing the

paperwork burden on exporters.

EFFECTIVE DATE: This rule is effective March 18, 1994.

FOR FURTHER INFORMATION CONTACT: For questions of a technical nature,

contact Jeffrey Tripp, Office of Technology and Policy Analysis, Bureau

of Export Administration, Department of Commerce, Telephone: (202) 482-

1309.

For questions on the foreign availability assessment, contact

Ronald Rolfe, Foreign Industrial Analyst, Office of Foreign

Availability, Bureau of Export Administration, Department of Commerce,

Telephone: (202) 482-0074.

SUPPLEMENTARY INFORMATION:

Background

Section 5(f)(3) of the EAA and part 791 of the EAR set forth the

procedures and criteria for determining the foreign availability of

items controlled for national security reasons. The Secretary of

Commerce, or the Secretary's designee, is authorized to determine

whether foreign availability exists.

With limited exceptions, the Department of Commerce may not

maintain national security controls on exports of an item when the

Department determines that items of comparable quality are available,

in fact, to countries from foreign sources in quantities sufficient to

render the controls ineffective in achieving their purpose.

On June 21, 1993, the Office of Foreign Availability (OFA)

initiated a foreign availability assessment of oil well perforators

controlled by ECCN 1C18A in response to a claim filed pursuant to Part

791 of the EAR. The Department published a notice of the initiation of

the assessment in the Federal Register on July 28, 1993 (58 FR 40407).

On October 18, 1993, the Acting Assistant Secretary, having

considered the assessment and other relevant information provided by

OFA, determined that foreign availability of certain oil well

perforators exists within the meaning of section 5(f) of the EAA and

part 791 of the EAR. The Department provided all interested agencies an

opportunity to review and comment on the assessment and determination.

On November 8, 1993, based on discussions with other agencies, the

Acting Assistant Secretary clarified the scope of oil well perforators

covered by the foreign availability determination, as provided for in

the EAA.

On November 23, 1993, the Department published an interim rule

containing the foreign availability determination. This rule removed

validated licensing requirements for exports to most non-proscribed

destinations (i.e. Country Groups T and V, except for Iran, Syria, and

the People's Republic of China) for oil well perforators controlled by

1C18A, and made them eligible for export under General License GFW.

Effective March 18, 1994, these oil well perforators are eligible

for export under General License G-DEST to all destinations except

Cuba, North Korea, Libya, Iran, Syria, and the South African military

and police.

Exporters should also be aware that the Department of the

Treasury's Office of Foreign Assets Control maintains an embargo on

other destinations, such as Iraq, Haiti, and the Federal Republic of

Yugoslavia (Serbia and Montenegro).

In the course of the foreign availability study, the U.S.

determined that there was not unanimous agreement that these oil well

perforators were, in fact, controlled under the COCOM International

Munitions List. Consistent with the foreign availability procedures,

the United States has notified COCOM that it is removing national

security controls on these oil well perforators.

This final rule amends ECCN 1C18A by revising the GFW paragraph in

the Requirements section to remove GFW eligibility for certain oil well

perforators. General License GFW no longer applies to these oil well

perforators because they may now be exported under General License G-

DEST to most destinations.

This rule also creates a new ECCN 1C93F for shaped charges

specially designed for oil well operations, utilizing one charge

functioning along a single axis, that upon detonation produce a hole,

and: (a) Contain any formulation of RDX, PYX, PETN, HNS, or HMX; and

(b) have only a uniformly shaped conical liner with an included angle

of 90 degrees or less; and (c) have a total explosive mass of no more

than 90 grams; and (d) have a diameter not exceeding three inches.These

changes are controlled for foreign policy reasons to Country Groups S

and Z, Iran, Syria, and the South African military and police. The

creation of ECCN 1C93F does not constitute a new control.

Rulemaking Requirements

1. This rule was not subject to review by the Office of Management

and Budget under Executive Order 12866.

2. This rule involves collections of information subject to the

Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). These

collections have been approved by the Office of Management and Budget

under control numbers 0694-0005, 0694-0007, and 0694-0010.

3. This rule does not contain policies with Federalism implications

sufficient to warrant preparation of a Federalism assessment under

Executive Order 12612.

4. Because a notice of proposed rulemaking and an opportunity for

public comment are not required to be given for this rule by section

553 of the Administrative Procedure Act (5 U.S.C. 553) or by any other

law, under section 3(a) of the Regulatory Flexibility Act (5 U.S.C.

603(a) and 604(a)) no initial or final Regulatory Flexibility Analysis

has to be or will be prepared.

5. The provisions of the Administrative Procedure Act, 5 U.S.C.

553, requiring notice of proposed rulemaking, the opportunity for

public participation, and a delay in the effective date, are

inapplicable because this regulation involves a military or foreign

affairs function of the United States. Section 13(b) of the EAA does

not require that this rule be published in proposed form because this

rule does not impose a new control. Further, no other law requires that

a notice of proposed rulemaking and an opportunity for public comment

be given for this rule.

Therefore, this regulation is issued in final form. Although there

is no formal comment period, public comments on this regulation are

welcome on a continuing basis. Comments should be submitted to Patricia

Muldonian, Office of Technology and Policy Analysis, Bureau of Export

Administration, Department of Commerce, P.O. Box 273, Washington, DC

20044.

List of Subjects in 15 CFR Part 799

Exports, Reporting and recordkeeping requirements.

Accordingly, part 799 of the Export Administration Regulations (15

CFR parts 730-799) is amended as follows:

1. The authority citation for 15 CFR part 799 continues to read as

follows:

Authority: Pub. L. 90-351, 82 Stat. 197 (18 U.S.C. 2510 et

seq.), as amended; sec. 101, Pub. L. 93-153, 87 Stat. 576 (30 U.S.C.

185), as amended; sec. 103, Pub. L. 94-163, 89 Stat. 877 (42 U.S.C.

6212), as amended; secs. 201 and 201(11)(e), Pub. L. 94-258, 90

Stat. 309 (10 U.S.C. 7420 and 7430(e)), as amended; Pub. L. 95-223,

91 Stat. 1626 (50 U.S.C. 1701 et seq.); Pub. L. 95-242, 92 Stat. 120

(22 U.S.C. 3201 et seq. and 42 U.S.C. 2139a); sec. 208, Pub. L. 95-

372, 92 Stat. 668 (43 U.S.C. 1354); Pub. L. 96-72, 93 Stat. 503 (50

U.S.C. App. 2401 et seq.), as amended (extended by Pub. L. 103-10,

107 Stat. 40); sec. 125, Pub. L. 99-64, 99 Stat. 156 (46 U.S.C.

466c); E.O. 11912 of April 13, 1976 (41 FR 15825, April 15, 1976);

E.O. 12002 of July 7, 1977 (42 FR 35623, July 7, 1977), as amended;

E.O. 12058 of May 11, 1978 (43 FR 20947, May 16, 1978; E.O. 12214 of

May 2, 1980 (45 FR 29783, May 6, 1980); E.O. 12735 of November 16,

1990 (55 FR 48587, November 20, 1990), as continued by Notice of

November 12, 1993 (58 FR 60361, November 15, 1993); E.O. 12867 of

September 30, 1993 (58 FR 51743, October 7, 1993; and E.O. 12868 of

September 30, 1993 (58 FR 51749, October 7, 1993).

PART 799--[AMENDED]

Supplement No. 1 to Sec. 799.1--[Amended]

2. In Supplement No. 1 to Sec. 799.1 (the Commerce Control List),

Category 1 (Materials), ECCN 1C18A is revised and a new ECCN 1C93F is

added, as follows:

1C18A Items on the International Munitions List

Requirements

Validated License Required: QSTVWYZ

Unit: Kilograms

Reason for Control: NS

GLV: $3,000

GCT: No

GFW: Yes (Advisory Note Only).

List of Items Controlled

a. Ethyl and Methyl centralites.

b. NN-Diphenylurea (unsymmetrical diphenylurea).

c. Methyl-NN-diphenylurea (methyl unsymmetrical diphenylurea).

d. Ethyl-NN-diphenylurea (ethyl unsymmetrical diphenylurea).

e. Ethyl phenyl urethane.

f. Diphenyl urethane.

g. Diortho tolyl-urethane.

h. 2-Nitrodiphenylamine.

i. p-Nitromethylaniline.

j. 2,2' Dinitropropanol.

k. Bis(2,2' dinitropropyl) formal and acetal.

l. 3-Nitraza-1,5 pentane diisocyanate.

m. Guanidine nitrate.

n. Hydrogen peroxide in concentrations of 85%.

o. Charges specially designed for civilian applications, containing

military explosives, except those items described in 1C93.

TECHNICAL NOTE: Military high explosives are solid, liquid or

gaseous substances or mixtures of substances that, in their

application as primary, booster, or main charges in warheads,

demolition and other military applications, are required to

detonate.

ADVISORY NOTE: Licenses are likely to be approved for export to

satisfactory end-users in Country Groups QWY and the PRC of certain

explosive substances and mixtures in reasonable quantities for

civilian or industrial purposes when made into cartridges or charges

of an exclusively civilian or industrial nature, such as propellants

for sporting purposes or shooting gallery practice; cartridges for

riveting guns; and explosive charges for agricultural purposes,

public works, mines, quarries or oil-well drilling. The following

are the substances or mixtures to which this procedure applies:

a. Nitrate-based (40 percent or more) and provided they do not

contain more than 40 percent nitroglycol/nitroglycerin or no more

than 16 percent TNT;

b. Nitrocellulose with a nitrogen content of over 12.2 percent;

c. Nitroglycerin;

d. Single base nitrocellulose; and

e. Sodium azide and other inorganic azides.

* * * * *

1C93F Oil Well Perforators

Requirements

Validated License Required: SZ, Iran, Syria, South African military and

police

Unit: Number

Reason for Control: FP

GLV: No

GCT: No

GFW: No

List of Items Controlled

a. Shaped charges specially designed for oil well operations,

utilizing one charge functioning along a single axis, that upon

detonation produce a hole, and:

a.1. Contain any formulation of RDX, PYX, PETN, HNS, or HMX; and

a.2. Have only a uniformly shaped conical liner with an included

angle of 90 degrees or less; and

a.3. Have a total explosive mass of no more than 90 grams; and

a.4. Have a diameter not exceeding three inches.

b. [Reserved]

Dated: March 17, 1994.

Iain S. Baird,

Deputy Assistant Secretary for Export Administration.

[FR Doc. 94-6886 Filed 3-23-94; 8:45 am]

BILLING CODE 3510-DT-P