Export Administration Regulation; Simplification of Export Administration Regulations

SUMMARY: The Bureau of Export Administration (BXA) is proposing a

comprehensive revision and reorganization of its Export Administration

Regulations (EAR), the regulatory regime through which BXA imposes

export and reexport controls on those items and activities within its

jurisdiction. This proposed rule would clarify the language of the EAR,

simplify their application, and generally make the export control

regulatory regime more user-friendly.

DATES: Written comments on this proposed rule must be received on or

before July 10, 1995.

ADDRESSES: Written comments should be sent to Cecil Hunt, Deputy Chief

Counsel for Export Administration, United States Department of

Commerce, Bureau of Export Administration, Fourteenth Street and

Constitution Avenue, N.W., Room 3839, Washington, D.C. 20230.

FOR FURTHER INFORMATION CONTACT: Larry E. Christensen, Acting Director,

Regulatory Policy Division, Bureau of Export Administration, (202) 482-

2440.

SUPPLEMENTARY INFORMATION:

Background

On September 30, 1993, the Secretary of Commerce submitted to the

Congress a report of the Trade Promotion Coordinating Committee (TPCC),

entitled Toward a National Export Strategy. The report included the

following among its goals:

Undertake a comprehensive review of the Export Administration

Regulations to simplify, clarify, and make the regulations more user-

friendly.

In November 1993, BXA organized a Task Group, drawn from several of

its offices, to carry out the TPCC recommendation. The Task Group

launched its review project by publishing an advance notice of proposed

rulemaking (ANPRM) in the Federal Register on February 10, 1994 (59 FR

6528). This notice was designed to solicit comments from industry and

the interested public. The ANPRM asked for suggestions concerning

improvements BXA could make to the EAR and described several specific

issues on which BXA was particularly interested in receiving public

input.

Over seven months during the development of this proposed

regulation, BXA shared four discussion packages with Regulations &

Procedures Technical Advisory Committee (RPTAC), an advisory committee

consisting of industry representatives. This was to seek the comments

of a working group of persons intimately familiar with the private

sector's role in using the EAR. The packages were also made available

to other interested members of the public, with the last two being made

available electronically on FedWorld. The four discussion Packages were

dated August 2, 1994, September 29, 1994, January 12, 1995, and

February 28, 1995.

Based on the comments received from the public and from the RPTAC

and its own assessment of how the EAR could be improved, the Task Force

determined that the EAR should be entirely reorganized and streamlined.

The Task Force accomplished this through the development of innovations

that resulted in the following important features, among others:

No license or other authorization would be required for

any transaction under BXA jurisdiction unless the regulations

affirmatively state the requirement. (Current regulations state that

all exports are prohibited unless an applicable general license has

been established or a validated license or other authorization has

been granted by BXA.)

The terms ``general'' license and ``validated'' license

would be dropped. The term ``license'' would be used to refer only

to authorization issued by BXA upon application. The proposed

regulations would convert the many current general licenses into a

smaller number of ``exceptions'', set forth in the proposed

regulations, to the obligation to seek a license when the control

list indicates that the particular item going to the stated country

generally requires a license.

The chapters of the regulations would be arranged to

give the exporter and reexporter a logical path to follow.

The affirmative statements of the need to obtain a

license, currently scattered throughout the regulations, would be

consolidated into ten general prohibitions. One chapter would

contain the license review policy for all list-based license

requirements; another would provide for the requirements and review

policies of licenses based on the end-use or end-user involved in a

proposed export or reexport; and the list-based license requirements

are contained in the Commerce Control List (CCL) indicating the

reason for control and the Country Chart indicating the country

scope of each reason for control.

The Country Groups used in the current regulations

would be revised in favor of Groups which better reflect post-Cold

War circumstances.

The CCL would be redesigned to state the reasons for

control more specifically within each Export Control Classification

Number (ECCN).

The redesigned CCL would be used in tandem with a new

Country Chart that would indicate whether a license is required for

any ECCN to any country in the world and the reason or reasons for

control.

Set forth below is a detailed part-by-part description of the

proposed rule and a review of comments received pursuant to the ANPRM,

along with BXA's responses.

Part-by-Part Analysis

Part 730--General Information

This Part is designed to provide a convenient introduction and

orientation for readers of the EAR, particularly those who are not used

to dealing with such regulations. This Part briefly indicates the types

of controls contained in the EAR (export and reexport controls and

antiboycott regulations), identifies the key statutes involved, and

alerts the reader to the fact that jurisdiction over some exports and

reexports is exercised by agencies other than BXA.

Part 730 notes the basic control purposes and the relationship of

some of the controls to multilateral arrangements. It points out that

only a small percentage of exports, reexports, and other transactions

subject to the EAR involve the need to apply to BXA for a license. Many

items (commodities, technology, and software) listed on the CCL may be

exported and reexported without a license due to License Exceptions

that can be used simply by meeting the terms of the EAR.

Further, this Part 730 notes that this proposed re-write of the EAR

is designed to enhance the ability of exporters and reexporters to find

the rules on their own, but also advises on the availability of help.

It also highlights the benefits to exporters and reexporters from the

precision, completeness, and objective character of the detailed

provisions of the EAR.

Part 730 relates the antiboycott provisions of the EAR to the

Internal Revenue Code provisions that deny certain tax benefits for

boycott-related reasons.

Part 730 closes by cautioning that its brief descriptions are

solely for convenience and that readers must look to the body of the

EAR and elsewhere [[Page 25269]] for the actual rules. The regulations

being replaced do not contain material comparable to Part 730.

Part 732--Scope of the Export Administration Regulations

The proposed regulation would introduce the term ``subject to the

EAR'' to define the scope of the regulations. The term would be used in

the rule to describe those items and activities over which BXA

exercises regulatory jurisdiction under the EAR. Conversely, items and

activities that are not subject to the EAR would be outside the

regulatory jurisdiction of the EAR and not affected by the proposed

regulations. It should be noted that the term ``subject to the EAR'' is

not to be confused with licensing or other requirements imposed in

other parts of the EAR. The fact that an item or activity is subject to

the EAR does not mean that a license or other requirement automatically

applies. A license or other requirement would apply only in those cases

where the EAR impose a licensing or other requirement on such items or

activities.

Items previously included on the CCL under ECCNs ending in the

letter ``G'' were known as basket categories. Under this rule, the

basket categories would be included within the term ``subject to the

EAR,'' even though they are not listed on the CCL.

The proposed rule would make clear that items and activities

subject to the EAR are not necessarily exempted from the control

programs of other agencies. Although BXA and other agencies try to

minimize overlapping jurisdiction, situations might occur in which an

exporter and a reexporter would have to comply with more than one

regulatory program. Moreover, items not subject to the EAR may or may

not be subject to licensing by other agencies.

Generally, all U.S. origin items, items exported from the United

States, and certain foreign-made products, as described in Sec. 732.4,

would be subject to the EAR. However, certain items, such as items that

are exclusively controlled for export by another department or agency

of the U.S. Government, would be explicitly excepted from the EAR.

Further, technology and software that are already publicly available or

will be made publicly available, as described in Sec. 732.7; arise

during or result from fundamental research, as described in Sec. 732.8;

are educational, as described in Sec. 732.9; or are included in certain

patent applications, as described in Sec. 732.10, would not be subject

to the EAR.

Certain foreign-made products would be subject to the EAR.

Controlled U.S. origin parts, components, materials, or other

commodities incorporated abroad into foreign-made products, if they

exceed certain de minimis levels. For the first time, the proposed rule

includes technology and software in the calculation of de minimis

values. BXA especially invites substantive comments and suggestions on

calculating such values for technology and software. BXA is considering

requirements that such calculations be made in accordance with United

States accounting standards including the rulings of the Financial

Accounting Standards Board and that calculations be based solely upon

cost records maintained in the normal course of business. BXA is also

considering whether to require a one-time report of such calculations

in advance of any reliance upon the de minimis exclusion for technology

and software. BXA also urges exporters to provide substantive comments

and suggestions on this option. In addition, foreign-made direct

products of U.S. origin technology or software and any commodity

produced by any plant or major component of a plant which is a direct

product of U.S. origin technology or software, would be subject to the

EAR as provided in the current regulations.

The proposed regulations make clear that certain activities would

also be subject to the EAR. The activities subject to the EAR would

include certain proliferation-related activities by any person, as set

forth in Part 744. Activities prohibited by any order issued under the

EAR, including a denial order, would also be subject to the EAR.

Part 732 would also contain rules governing other exports and

reexports subject to the EAR. The rule would continue the general

policy of permitting most shipments to Canada without a license.

Further, items exported from U.S. foreign trade zones would be subject

to the EAR, as would items moving intransit through the United States.

Finally, the proposed regulations would state that neither a license

nor other authorization would be required for shipments from the United

States to Puerto Rico, the Commonwealth of the Northern Mariana

Islands, or any other territory, dependency, or possession of the

United States.

BXA would offer assistance to a potential exporter, or other

interested party, in determining whether an item is subject to the EAR.

Part 734--General Prohibitions

If an export, reexport, or activity is subject to the EAR, the

general prohibitions contained in Part 734 and the exceptions set forth

in Part 740 must be reviewed to determine if a license is necessary.

However, no license or other authorization would be required for any

transaction subject to the EAR unless the regulations affirmatively

state the requirement.

Part 734 would contain the rules for ascertaining when an export or

reexport subject to the EAR requires a license. This would involve

determining whether a transaction subject to the EAR is subject to a

general prohibition. Specifically, if an export or reexport subject to

the EAR is also subject to a general prohibition, then a license would

be required in order to undertake the export or reexport, unless an

exception to the prohibition applies.

This part would set forth ten general prohibitions, listed in the

proposed regulations at Secs. 734.2(b)(1)-(10). The CCL in Part 774 and

the Country Chart in Part 738 when taken together define the scope of

General Prohibitions One (Exports and Reexports in the Form Received),

Two (Parts and Components Reexports), and Three (Foreign Produced

Direct Product Reexports). General Prohibitions Four through Ten are

not so limited, these general prohibitions apply to all items subject

to the EAR unless otherwise specified, and these general prohibitions

apply to all items subject to the EAR whether or not listed on the CCL.

BXA especially invites substantive comments concerning the controls

on foreign produced direct products of U.S. technology and software

provided at General Prohibition Three. The term ``duties'' is used in

the proposed regulation to mean responsibilities. One early comment

suggested that some readers might confuse this with the term ``duties''

meaning a tax on the importation of items. BXA invites comments on the

use of the term.

Part 736--Steps You May Follow in Determining Your Licensing

Requirements

Part 736 would provide a logical step-by-step path exporters and

reexporters may follow in discerning their license requirements and

prohibitions under the EAR. These steps would explain the relationship

among the scope of the EAR, the general prohibitions, the License

Exceptions, and other chapters of the EAR. BXA is considering the

possibility of merging the text regarding steps into the introductory

portions of the ``General Prohibitions'' chapter (Part 734). BXA

invites specific comments on such a reorganization. [[Page 25270]]

Part 738--Commerce Control List and the Country Chart

BXA maintains the Commerce Control List (CCL), located in

Supplement No. 1 to Part 774, which includes listed items subject to

the EAR. Individual items are identified on the CCL under an Export

Control Classification Number (ECCN).

An ECCN contains several items of information that the exporter and

reexporter must have in order to determine whether a license is

required by the CCL for a particular item. As revised by the proposed

rule, the ``License Requirements'' section of each ECCN contains two

columns entitled ``Controls'' and ``Country Chart''. The ``Controls''

column lists all applicable Reasons for Control, in order of

restrictiveness, and to what extent each applies (e.g., to the entire

entry or only to certain subparagraphs). Those items requiring licenses

for a greater number of countries and/or items are listed first. The

``Country Chart'' column identifies, for each applicable Reason for

Control, a column name and number. This column information is used in

the Country Chart to identify the list of countries requiring a

license.

The proposed rule also adds a ``License Alternatives'' section to

each ECCN. The ``License Alternatives'' section identifies ECCN-driven

alternatives to applying for a license and a brief eligibility

statement for each. The alternatives consist of ECCN-driven License

Exceptions (Part 740) and the Special Comprehensive License (Part 752).

The information in this section is provided to assist in deciding which

alternative related to a particular item and destination would be

explored prior to submitting an application for a license to BXA. This

section would be consulted only AFTER an exporter or reexporter has

determined that a license is required based on an analysis of the ECCN

and the Country Chart.

The proposed rule also introduces the Commerce Country Chart

(Country Chart). The Country Chart, located in Supplement No. 1 to Part

738, contains licensing requirements based on the export's destination

and ``Reason for Control.'' In combination with the CCL, the Country

Chart allows an exporter and reexporter to refer to one place in the

EAR and determine whether a license is required for the export or

reexport of any item on the CCL to any country in the world.

Part 740--License Exceptions

Part 740 of the proposed rule provides for exceptions from license

requirements similar to many of the general licenses contained in the

current regulations. It consolidates exceptions into one chapter; the

current regulation deals with commodities in one chapter and technology

and software in another. This Part also organizes the exceptions in

more transaction-oriented groupings, e.g., all exceptions dealing with

parts are included in License Exception PTS. License Exceptions

contained in this Part of the proposed rule permit the export or

reexport without a license required by the CCL provided the conditions

for the use of the License Exception are met.

Eligibility for a License Exception would be based upon the item to

be exported or reexported, the country of ultimate destination, the

end-use of the item, and the end-user. If a License Exception is

available, the exporter or reexporter may proceed with the export or

reexport without a license. However, the exporter and reexporter would

be required to meet all the terms and conditions required by the

License Exception for the export or reexport to be authorized without a

license. By using a License Exception, the exporter or reexporter would

be self-certifying that all terms, conditions, and provisions for the

use of that License Exception have been met. Including the appropriate

License Exception symbol on the Shippers Export Declaration, e.g.,

``TMP'' for temporary exports, would constitute such a certification.

Items that are listed on the CCL but do not require a license by

reason of the Country Chart at Part 738 must be certified by entering

the symbol ``NLR'' in the appropriate place on the Shippers Export

Declaration. This constitutes representations of the exporter that the

listed item does not require a license under General Prohibitions One

(Exports and Reexports in the Form Received), Two (Parts and Components

Reexports), and Three (Foreign Produced Direct Product Reexports); that

General Prohibitions Four through Ten do not apply to the given export,

reexport, or other activity; and that the item is subject to the EAR.

BXA solicits comments on the incorporation of proliferation

controls into License Exceptions. Many General Licenses and Permissive

Reexports originally focused on national security controls. BXA would

like public input on the extent to which proliferation concerns have,

or have not, been addressed by License Exceptions.

Part 742--Control Policy--CCL Based Controls

This Part contains licensing review policies and certain

requirements for all items listed on the CCL. It consolidates most of

current Part 785, and substantial portions of Parts 776 and 778. In

addition to providing the license policies and certain license

requirements, it notes any contract sanctity dates that may have been

established for particular export or reexport control programs and

describes any multilateral cooperation in particular export or reexport

control programs.

The proposed regulation tracks the reasons for control listed in

the Country Chart by providing the licensing policy for every column on

the chart. In addition, this Part includes two control policies for

items included on the CCL, but not reflected in the Country Chart; it

includes provisions for supercomputers and communications intercepting

devices.

This proposed rule, consistent with the National Defense

Authorization Act (NDAA) for fiscal year 1993 entitled the ``Iran-Iraq

Arms Non-Proliferation Act of 1992'', would codify the current

statutory policy of denial for all items that require a license for

Iran. The reader should note that additional unilateral trade

restrictions on Iran are currently under review within the

Administration.

The reader should also note that controls for Libya are currently

under review within the Administration.

This proposed rule would reflect the Secretary of State's 6(j)

determination of August 12, 1993, that the Government of Sudan has

repeatedly provided support for acts of international terrorism. This

rule would also reflect the Acting Secretary of State's determination

of December 28, 1993, that five categories of multilaterally controlled

items would be controlled under section 6(j). License applications for

the following items would be reviewed under the 6(j) procedures:

All items subject to national security controls, except national

security controlled digital computers with a Composite Theoretical

Performance (CTP) of 500 Million Theoretical Operations Per Second

(MTOPS) or less. Such items will generally be denied if destined to a

military end-user or for military end-use. Applications for non-

military end-users or end-uses will be considered on a case-by-case

basis;

All items subject to chemical and biological weapons proliferation

controls. Such items will generally be denied;

All dual-use items subject to missile proliferation controls. Such

items will generally be denied;

All items subject to nuclear weapons proliferation controls. Such

items will generally be considered on a case-by-case basis;

and [[Page 25271]]

All military related items (items controlled by the Commerce

Control List (CCL) entries ending with the number 18. Such items will

generally be denied.

This proposed rule does not reflect these 6(j) controls for Sudan

on either the Country Chart or on the CCL. However, they will be

incorporated into the final rule.

Additional unilateral trade restrictions under 6(a) for Sudan are

currently under review within the Administration.

This Part would not include controls and licensing policies that

apply to exports and reexports to embargoed destinations and additional

controls under the EAR implementing U.N. sanctions. Currently, the

embargoed countries include Cuba, Libya, North Korea, the Federal

Republic of Yugoslavia (Serbia and Montenegro), and Iraq. An exporter

or reexporter seeking to export or reexport items to these countries

should first review Part 746, Embargoes and Other Special Controls.

Additionally, this Part would not address controls and licensing

policies for items controlled for ``short supply'' reasons. These would

be covered in Part 754, Short Supply Controls.

Part 744--Control Policy--End-User/End-Use Based

This part contains prohibitions against exports, reexports, and

activities related to certain end-uses and end-users. Specifically,

Sec. 744.2 would prohibit exports and reexports of items subject to the

EAR, without a validated license, if at the time of the export or

reexport you know or have reason to know, that the item will be used in

nuclear explosive, or other safeguarded or unsafeguarded, nuclear

activities. Section 744.3 would prohibit the export or reexport,

without a validated license, of certain items to be used for missile

end-uses. Similarly, section Sec. 744.4 would prohibit the export or

reexport of items with certain chemical and biological weapon end-uses.

Next, Sec. 744.5 would prohibit the export or reexport of items to be

used for specified nuclear maritime end-uses. Finally, Sec. 744.6 would

place restrictions on certain proliferation-related activities of U.S.

persons. For purposes of this prohibition the term ``U.S. person''

would mean citizens, permanent resident aliens, or protected

individuals as defined in the immigration laws; any judicial person

organized under the laws of the United States or any U.S. jurisdiction;

and any person physically in the United States.

This part would also contain prohibitions against exports,

reexports, and certain transfers to specified end-users.

Part 746--Embargoes and Other Special Controls

Part 746 of the proposed regulations contains all the control

requirements that apply to embargoed destinations, including Cuba, the

Federal Republic of Yugoslavia (Serbia and Montenegro), Iraq, Libya,

and North Korea. It also contains the control requirements implementing

U.N. sanctions that result in additional EAR controls on certain

countries, such as Rwanda.

In addition, Part 746 would add provisions to reflect current

policy on exports and reexports to Cuba of medical items and

telecommunications equipment, and reexports to Libya of items covered

by United Nations Resolutions. This Part also would include new

Department of Commerce license requirements that codify existing United

States policy implemented by the Treasury Department for exports and

reexports to Iraq. It would also reflect current policy by clarifying

certain eligibility requirements for the Humanitarian License

Procedure. BXA is considering eliminating the Humanitarian License

Procedure, and would therefore be particularly interested in comments

on its usefulness. Finally, this Part would include Supplements

containing general information on embargoes and sanctions administered

by other federal agencies.

Part 748--Applications (Classification, Advisory, and License) and

Documentation

Part 748 describes the process for applying for a classification

request, advisory opinion, or a license. All such requests and license

applications (for both exports and reexports) would be submitted on a

new form, BXA-748P. The BXA-748P would replace the BXA-622P and the

BXA-699P. The Form BXA-648P has been eliminated along with the Form

BXA-685P. Form BXA-648P was used for notification of Delivery

Verification requirement, while Form BXA-685P was required for certain

amendments to outstanding licenses. When this rule becomes final, with

certain exceptions, exporters and reexporters would now be required to

submit a new license application when requesting modification to an

outstanding license.

This change would allow BXA to ensure a complete electronic record

is maintained of all licenses, classification requests, and advisory

opinions. Instructional information contained on Form BXA-648P has been

incorporated into the text of the regulations. BXA would notify

exporters of the requirement for a Delivery Verification directly on

the license, instead of a separate piece of paper. No changes have been

made to the structure of the requirement.

The requirement for exporters to obtain Form BXA-629P from their

purchaser and consignees would be modified under this proposed rule.

BXA would permit you to obtain either a new Form BXA-711 or a letter

with the same certifications that appear on the new Form BXA-711. The

new Form BXA-711 would be a one-sided redraft of the current Form BXA-

629P.

Items currently captured by the current basket categories, i.e.,

ECCNs ending in the letter ``G,'' will remain subject to the EAR as

defined in Part 732 in this proposed rule even though they are not

listed on the CCL at Part 774. For such items, BXA will respond to a

classification request by indicating that though they are subject to

the EAR, they are not listed in the CCL. This will be noted by the

symbol ``NOL'', which means the items are ``not on the list'' but are

subject to the EAR. For items listed on the CCL under this proposed

rule, BXA will continue to respond to classification requests by

indicating the appropriate ECCN. Under this Part 748 of the proposed

regulation, unless items are subject to General Prohibitions Four

through Ten, you need not apply for a license to export or reexport

such items that are not on the list (NOL).

BXA specifically invites comments on the question of how BXA should

respond to classification requests for items that are not listed on the

CCL but that are subject to the EAR. Does the designator ``NOL''

appropriately replace the current ECCNs ending in the letter ``G''?

Should this be the appropriate entry for the Shippers' Export

Declaration (SED) as proposed? Readers should note that this topic is

related to the proposed requirement to indicate ``NLR'' on the SED for

listed items that do not require a license to the specific country of

destination as indicated on the Country Chart.

A Supplement No. 4 to Part 748 would be added. This supplement

would replace current Part 768. There are no revisions at this time to

the existing text contained in this Part, which is being incorporated

into this proposed rule by reference. The current Part 768 is at 15 CFR

768, and you may obtain a copy of Supplement No. 4 to Part 748 by

downloading it electronically from FedWorld via Internet or through

your modem by dialing (703) 321-3339. This service is

[[Page 25272]] free, except for long distance telephone charges and any

standard charges you already incur for the use of the Internet or other

commercial online service. The current Antiboycott Regulations are not

on FedWorld.

Part 750--License Processing

Part 750 describes the processing procedures of any application

submitted to BXA, whether for a classification request, advisory

opinion, or a license. In addition to procedures specific to each type

of application, time frames (established in the draft 1994 Export

Administration Act bill) associated with each are provided. This part

also would provide a clear description of the interagency dispute

resolution process and the interrelationship between all agencies and

departments reviewing license applications. All aspects of license

issuance would be addressed including, actual issuance of the license,

validity periods, transfers, revocations, suspensions, and shipping

tolerances.

The licensing processing procedures remain under review within the

Administration and will be the subject of a separate Federal Register

notice once a final policy is completed.

Validity periods for the various types of licenses would be

synchronized. The new validity period for all licenses (except those

issued for items subject to short supply controls, or those processed

under emergency handling procedures) would be 2 years. This alignment

would result in a validity period for all reexport and parts and

components licenses, and an increase in the validity period for

licenses authorizing temporary exports of items.

Part 752--Special Comprehensive License

Part 752 describes the provisions of the Special Comprehensive

License (SCL). The SCL would consolidate the activities currently

authorized under the Project, Distribution, Service Supply, Service

Facilities, and Special Chemical Licenses and would provide for

additional flexibility to BXA in shaping appropriate SCLs and internal

control programs. For example, the Project and Service Supply Licenses

currently authorize exports and reexports to countries of the former

Soviet Union, Eastern European, and the People's Republic of China

(PRC), but the Distribution License, which includes an extensive

mandatory Internal Control Program that is not required for the Project

License and the Service Supply Procedure, does not allow exports and

reexports for distribution in these same countries. The SCL would also

conform item and country eligibility.

All items subject to the EAR would be eligible for export and

reexport under the SCL, except:

Items identified by the letters MT in the ``Reason for Control''

paragraph on the Commerce Control List (CCL);

Biologicals, or equipment and materials that can be used in the

production of biologicals (items identified under ECCNs 1C61, 1B71,

1E61, and 1E70);

Communication intercepting devices identified under ECCN 5A80 on

the CCL;

Chemicals and chemical equipment and materials that can be used in

the production of chemical weapons to destinations listed in Country

Group D:3; (items identified under ECCNs 1C60, 1E60, 1B70, and 1D60);

Maritime (civil) nuclear propulsion systems or associated design or

production software and technology identified in Sec. 774.5;

Items specifically identified as ineligible by BXA on your approved

SCL, and

Additional items may be excluded consistent with multilateral

obligations.

Exports and reexports of items identified as NP in the ``Reason for

Control'' paragraph on the CCL will not generally be authorized under

an approved SCL for export or reexport to countries listed in Country

Group D:2.

All countries are eligible to receive exports and reexports under

the SCL except:

Countries designated by the Secretary of State that have repeatedly

provided support for acts of international terrorism (Cuba, Libya,

Iran, Iraq, North Korea, Sudan, Syria).

Countries listed in Country Group E; and

Other countries that BXA may declare on a case-by-case basis.

SCLs are designed to allow multiple exports and reexports of

controlled items. Because BXA does not review each individual

transaction covered by a SCL, parties to the SCL would be required to

have the mechanisms in place to ensure that each export and reexport

made under a SCL meets all the terms and conditions of the license, as

well as the EAR. It is through Internal Control Programs (ICPs) that

the Special Comprehensive License Holder (SLH) and the Special License

Consignee (SLC) assure that exports and reexports are not made contrary

to the national security, nonproliferation, and foreign policy

objectives of the EAR. ICPs are designed to provide that mechanism and

are a pre-requisite to approval of a SCL.

There are three levels, or examples, of ICPs provided for in Part

752. The elements of each ICP would reflect the complexity of the

activities authorized under the SCL, the countries involved, and the

relationship between the SLH and the approved consignees. A general

description of the elements of each of the three of ICPs is included,

as well as guidance on which ICP you would need to establish before

using the SCL.

To ensure that exports under the SCL do not jeopardize our national

security and foreign policy interests, BXA would review each

application for a SCL on a case-by-case basis, and may limit the scope

of eligible items, countries, end-users, and end-uses. In addition, BXA

may require inclusion in an ICP of any combination of elements from one

or more levels, depending upon the nature of each SCL request.

The provisions of this Part would also require participating

entities to audit their export control programs, and authorize BXA to

conduct systems reviews. These audits and review would ensure that the

exporter and any authorized consignees have fulfilled all the

requirements of the SCL, and that any exports and reexports made under

the SCL have not and will not jeopardize national security interests.

Part 754--Short Supply

This part would continue to implement the provisions of Section 7,

``Short Supply Controls'', of the Export Administration Act of 1979,

and similar provisions in other laws that are not based on national

security and foreign policy reasons. Provisions in this part include

controls and licensing policies on crude oil, petroleum products,

unprocessed western red cedar timber, and exports and reexports of

horses by sea. This part also would include certain License Exceptions

that would permit exports and reexports without a license of western

red cedar and petroleum products. Provisions in the current regulations

dealing with petitions for monitoring or controls on recyclable

metallic materials and registration of agricultural commodities would

be removed but would be incorporated in the EAR by reference.

The provisions concerning exports and reexports of crude oil and

petroleum products have been reorganized and revised for clarity.

Certain archaic provisions have been removed.

A recent final rule regarding certain exports of crude oil is not

incorporated into the draft rule, but it will be incorporated into the

final rule.

Part 756--Appeals

This part describes the procedures that would be applicable to

appeals [[Page 25273]] from administrative actions taken by BXA.

Administrative action is any action (not including an administrative

enforcement proceeding) taken under the EAA or EAR with respect to a

particular person, including denial of a license application, return of

a license application for other than procedural deficiencies or

additional information, or classification of an appellant's commodity.

Essentially, any person directly and adversely affected by an

administrative action would be allowed to appeal to the Under Secretary

for Export Administration for reconsideration of that administrative

action. The procedures for such an appeal would be unchanged from that

currently existing in the EAR.

Part 758--General Export Clearance Requirements

This part deals with requirements imposed on exporters and others

regarding the movement of items subject of the EAR out of the country.

The purpose of this part would be to ensure that the movement of items

subject to the EAR conforms to the requirements of the export license

or other authorization for their export. Under this proposed

regulation, certain items are subject to the EAR as defined in Part 732

even though they are not listed on the CCL at Part 774. If such items

are not subject to any of the ten general prohibitions, the symbol

``NOL'' must be entered in the appropriate place on the Shippers Export

Declaration.

Under this proposed rule, certain items are listed on the CCL but

do not require a license to all destinations under General Prohibitions

One, (Exports and Reexports in the Form Received), Two (Parts and

Components Reexports), and Three (Foreign Produced Direct Product

Reexports). If General Prohibitions Four through Ten also do not apply,

the symbol ``NLR'' must be entered in the appropriate place on the

Shippers Export Declaration. The term ``NLR'' represents exports of

listed items when no license is required.

BXA specifically invites comments on the use of the designators

``NOL'' and ``NLR'' for the SED. BXA currently feels that this

distinction allows a separate classification of ``NOL'' for items

currently in ECCNs ending in the letter ``G'', which items would not be

listed on the CCL in this proposed rule. This is the rationale for

distinguishing ``NOL'' from ``NLR'', which merely refers to an item on

the CCL that does not require a license to the specific destination in

a given export or reexport. One early comment suggested that the term

``NLR'' be the only entry required on the SED for both of these sets of

items. If BXA adopted such an approach, what would then be the best

alternative for classifying items subject to the EAR but not listed on

the CCL, i.e. items under current ECCNs ending in the letter ``G''?

This Part imposes specific responsibilities on the persons involved

in export or reexport transactions to ensure compliance with other

provisions of the EAR and of the Foreign Trade Statistics Regulations

(15 CFR Part 30), including exporters, freight forwarders, exporters'

agents, carriers and all other persons. It prohibits any person from

engaging in certain proscribed conduct.

Part 758 imposes specific responsibilities for assuring that

Shipper's Export Declarations, bills of lading and air waybills are

accurately filled out and are consistent with the export license or

other authorization for the export to which they correspond. It

restricts the conduct of exporters, forwarders, carriers and others to

assure that the delivery abroad of items subject to the EAR is in

accordance with the terms of the export license, exception to the

licensing requirement, or other authorization. In some cases, it

imposes duties on parties to the transaction to return the items to the

United States or take steps to prevent them from entering the commerce

of a foreign country.

This proposed rule makes several changes to the existing rule. In

several instances the existing regulations require carriers to conform

their documents or their routing to statements made on Shipper's Export

Declarations. In recent years, more exceptions to the Shipper's Export

Declaration filing requirement have been created. This proposed rule

deals with the exceptions by requiring carriers to conform their

documents and routing to the Shipper's Letters of Instruction if there

is no Shipper's Declaration or to other written instructions if there

is no Shipper's Letter of Instruction.

This proposed rule does not contain some of the specific provisions

relating to who may sign the Shipper's Export Declaration, the status

and duties of forwarding agents, requirements for power of attorney

currently found in 15 CFR Secs. 786.3(d) & (e) which duplicate

provisions of the Foreign Trade Statistics Regulations.

This proposed rule replaces the terms ``commodity'' or

``commodities'' with the terms ``item'' or ``items'' in several places

to reflect coverage of technology and software under the EAR. The

Foreign Trade Statistics Regulations and the Shipper's Export

Declaration form still refer to ``commodity'' or ``commodities'', but

they are being reviewed by the Bureau of the Census for conforming

changes. For shipments where items requiring a license for export are

listed on the same Shipper's Export Declaration as items not requiring

an export license this proposed rule eliminates the requirement that

the person filling out the declaration place an asterisk next to the

items being shipped under a general license and replaces it with a

requirement that the license number and expiration date or symbol

authorizing export without a license be shown below the description of

the item. This change would make the EAR consistent with the

corresponding portions of the Foreign Trade Statistics Regulations

which require that the license number and expiration date or general

license symbol be shown below the commodity to which it applies.

Current regulations require an exporter whose shipment under a

validated export license is unloaded at an unscheduled stop to notify

the Office of Export Licensing of the proposed disposition of the

items. The proposed rule changes the term ``validated license'' to

``export license'' and requires the exporter to wait for a response

from the Office of Exporter Services before proceeding with the

disposition.

The proposed rule revises the destination control statements that

exporters must place on shipping documents to place other parties to a

transaction on notice of U.S. export control regulations. The revisions

make the destination control statements conform with the country groups

elsewhere in the proposed regulations instead of with the country

groups contained in the existing regulations. The revisions would also

make the destination control statements conform with the concept of

export licenses, License Exceptions and other authorizations (e.g. NOL

and NLR) rather than the concept of general licenses and validated

licenses.

Part 760--Restrictive Trade Practices or Boycotts

This Part would replace current Part 769. There are no revisions to

the existing text contained in this Part, which is being incorporated

into this proposed rule by reference. The current Part 769 is at 15 CFR

769, and you may obtain a copy of Part 760 by downloading it

electronically from FedWorld via Internet or through your modem by

dialing (703) 321-3339. This service is free, except for long distance

telephone charges and any standard charges you already incur for the

use of the Internet. The current Antiboycott Regulations are not on

FedWorld. [[Page 25274]]

Part 762--Recordkeeping

This part has been reorganized and restated to eliminate the

requirement that the regulated persons obtain BXA approval prior to

destroying original documents and replacing them with electronic,

magnetic, photographic or other images. It would set standards for

retrieving and legibility of such records. This part would also make it

clear that regulated entities may always keep the records that must be

kept pursuant to this part in the form in which that person receives or

creates it. In addition, this part would extend the recordkeeping to

five years to coincide with the applicable statue of limitations.

Part 764--Enforcement

Part 764 has been reorganized to deal primarily with violations and

sanctions. The description of sanctions has been broadened to state

that conduct which constitutes a violation of the EAA or EAR may also

be prosecuted under certain other sections of the United States Code

(Sec. 764.3(b)), and such violative conduct may be subject to statutory

or other sanctions or protective measures under the EAA or under other

statutory or regulatory provisions (Sec. 764.3(c)).

Provisions dealing with denial of export privileges would be

clarified so that almost all relevant information can be found in Part

764 of the EAR. Part 764 provisions are organized by violation

(Sec. 764.2(k)), description of sanction (Sec. 764.3(a)(2)) and terms

of a standard denial order (Supplement No. 1), and reference to the

Denied Persons List (Supplement No. 2). This method of organization

makes it easier for the world to understand how to comply with denial

orders.

The former frequently-used Sec. 787.6 violation of ``export,

diversion, reexport, transshipment'' has been replaced by the new

Sec. 764.2(a) violation entitled ``engaging in prohibited conduct.''

The formulation of the new violation is intended to take into account

the new EAR Part 734 - General Prohibitions, as well as to encompass

the former Sec. 787.6. It provides that no person may engage in any

conduct prohibited by, or refrain from engaging in any conduct required

by, the EAA, the EAR, or any order, license or authorization issued

thereunder.

The detailed provisions that set forth recordkeeping requirements

have been moved to Part 762, while the violation for failing or

refusing to comply with recordkeeping requirements appears in

Sec. 764.2(i), along with other defined violations.

Part 766--Administrative Enforcement Proceedings

Part 766 has been reorganized to remove descriptions of sanctions

available for violations, placing them instead in Part 764

(Enforcement), and to separate the procedures for imposing sanctions

for violations from the procedures for taking protective enforcement

measures (temporary denial orders and denial orders authorized by

Sec. 11(h) of the EAA). Further, this Part has been re-designed to

simplify and expedite proceedings, including the addition of sections

specifically authorizing interlocutory review of rulings by the Under

Secretary (Sec. 766.14) and permitting cases to be disposed of through

``summary decisions,'' such as through motions for summary judgment

(Sec. 766.8).

Significant changes would be made to simplify and clarify the

process by which cases are settled (Sec. 766.18). To avoid the

impression that settlements are in any way one-sided, BXA would

substitute the term ``settlement agreement'' for the term ``consent

agreement.'' Virtually all orders approving settlement agreements would

be entered by the Assistant Secretary for Export Enforcement, obviating

the need for Administrative Law Judge (ALJ) and Under Secretary review.

The proposal makes clear that cases can be settled even if they are

before the Under Secretary for decision, and codifies case law holding

that cases may be settled without a finding that violations occurred.

Finally, the proposed rule would add specific guidance that any

settlement relates only to claims at issue in the administrative

enforcement proceeding and has no impact on any criminal prosecution.

A new section (Sec. 766.23) would consolidate all procedures that

apply when naming or adding related persons to orders issued under Part

766. It codifies the current practice of permitting BXA to name related

persons when the order is first issued and continues BXA's authority to

add related persons to an order at a later date through a ``show

cause'' procedure. The proposal would also provide procedures whereby

related persons may appeal to the ALJ any finding that they are related

to the respondent.

Part 768--Foreign Availability Determination Procedures and Criteria

Foreign availability exists when the Secretary determines that an

item is comparable in quality to an item subject to U.S. national

security export controls, and is available-in-fact to a country, from a

non-U.S. source, in sufficient quantities to render the U.S. export

control of that item or the denial of an export license ineffective.

For a controlled country, such control or denial is ``ineffective''

when maintaining such control or denying a specific license would not

restrict the availability of goods or technology that would make a

significant contribution to the military potential of the controlled

country or combination of countries that would prove detrimental to the

national security of the United States.

There are two types of foreign availability, foreign availability

to a controlled country; and foreign availability to a non-controlled

country.

A foreign availability assessment is an evidentiary analysis that

BXA conducts to assess the foreign availability of a given item under

the assessment criteria. BXA uses the results of the analysis in

formulating its recommendation to the Secretary on whether foreign

availability exists for a given item. If the Secretary determines that

foreign availability exists, the Secretary will decontrol the item or

approve the license in question, unless the President exercises a

National Security Override.

The procedures by which BXA would conduct a foreign availability

assessment, the criteria for control, and a National Security Override

would be unchanged from that currently existing in the EAR.

Part 770--Interpretations

This part would provide commodity, technology, and software

interpretations. These interpretations would clarify the scope of

controls where such controls are not readily apparent for the Commerce

Control List and from other provisions of the EAA.

Part 772--Definitions

This part would define terms as used in the Export Administration

Regulations. Many of the terms currently defined in the EAR would be

used in this part, including the addition of several new terms, such as

``export'', ``Advisory Committee on Export Policy (ACEP)'', ``Export

Administration Review Board (EARB)'', and other terms that would define

new concepts, such as ``License Alternatives''.

BXA is particularly interested in comments from the business

community on what terms they would like defined that are not already

included in this part.

Part 774--The Commerce Control List

Former Supplements 1, 2, and 3 to Sec. 779.1 (the Commerce Control

List, [[Page 25275]] General Technology and Software Notes, and

Definitions to the CCL, respectively) would become Supplements 1, 2,

and 3 to Part 774. Supplement No. 1 would be amended by removing the

references to ECCN's ending in the letter ``G'' (basket categories).

Such ECCNs would continue to remain subject to the EAR, even though

they would not appear on the CCL. In addition, Supplement No. 1 would

be amended by revising the ``Requirements'' section of each ECCN to

reflect the new structure of the EAR. The ``List of Items Controlled''

section and Supplement Nos. 2 and 3 would not be revised and will be

included with the publication of the final rule.

The current ``List of Items Controlled'' sections of each ECCN on

the CCL and Supplement Nos. 2 and 3 are at 15 CFR 779, and you may

obtain a copy of Part 774 by downloading it electronically from

FedWorld via Internet or through your modem by dialing (703) 321-3339.

This service is free, except for long distance telephone charges and

any standard charges you already incur for the use of the Internet.

Summary of Comments to the ANPRM

Rulemaking Requirements

1. For purposes of Executive Order 12866, this proposed rule has

been determined to be significant.

2. This proposed rule contains two new collections of information

subject to the requirements of the Paperwork Reduction Act, 44 U.S.C.

ch. 35. The new ``Multipurpose Application'' replaces the ``Application

for Export License'', ``Request for Reexport Authorization'', and the

``Request for Amendment Action'' forms. The ``Statement by Ultimate

Consignee and Purchaser'' form has also been revised. There is a new

``Special Comprehensive License'' which consolidates the procedures for

applying for the former project, distribution, service supply and

chemical licenses. All other collections of information contained in

the rulemaking have been previously approved by OMB. The public

reporting burdens for the new collections of information are estimated

to average 45 minutes for the Multipurpose Application and between 20

and 40 hours for the Special Comprehensive License. These estimates

include the time for reviewing instructions, searching existing data

sources, gathering and maintaining the data needed, and completing and

reviewing the collections of information. Send comments regarding these

burden estimates or any other aspect of these collections of

information, including suggestions for reducing the burden, to Larry E.

Christensen, Acting Director, Regulatory Policy Division, Bureau of

Export Administration, (202) 482-2440.

3. For purposes of Executive Order 12612, this proposed rule does

not contain policies with Federalism implications sufficient to warrant

preparation of a Federalism Assessment.

4. Pursuant to authority at 5 U.S.C. 553(a)(1) and section 13(a) of

the Export Administration Act, 50 U.S.C. 2401--2420 et seq., though

prior notice and an opportunity for public comment are provided, such

procedures are not required for this regulatory action. As such, no

Initial or Final Regulatory Flexibility Analysis is required under

sections 3 and 4 of the Regulatory Flexibility Act, 5 U.S.C. 603(a) and

604(a), and none has been prepared.

5. Although the Export Administration Act expired on August 20,

1994, the President invoked his authority under the International

Emergency Economic Powers Act, through Executive Order 12924, August

19, 1994, and determined that, to the extent permitted by law, the

provisions of the Export Administration Act shall be extended so as to

continue in full force and effect and amend, as necessary, the export

control system previously implemented, as the Export Administration

Regulations, pursuant to the Export Administration Act.

List of Subjects

15 CFR Part 730

Administrative practice and procedure, Advisory committees,

Exports, Foreign trade, Reporting and recordkeeping requirements,

Strategic and critical materials.

15 CFR Part 732

Administrative practice and procedure, Exports, Foreign trade,

Reporting and recordkeeping requirements.

15 CFR Part 734

Administrative practice and procedure, Exports, Foreign trade.

15 CFR Part 736

Exports, Foreign trade.

15 CFR Part 738

Exports, Foreign trade.

15 CFR Part 740

Administrative practice and procedure, Exports, Foreign trade,

Reporting and recordkeeping requirements.

15 CFR Part 742

Exports, Foreign trade.

15 CFR Part 744

Exports, Foreign trade, Reporting and recordkeeping requirements.

15 CFR Part 746

Embargoes, Exports, Foreign trade, Reporting and recordkeeping

requirements.

15 CFR Part 748

Administrative practice and procedure, Exports, Foreign trade,

Reporting and recordkeeping requirements.

15 CFR Part 750

Administrative practice and procedure, Exports, Foreign trade,

Reporting and recordkeeping requirements.

15 CFR Part 752

Administrative practice and procedure, Exports, Foreign trade,

Reporting and recordkeeping requirements.

15 CFR Part 754

Exports, Foreign trade, Forests and forest products, Petroleum,

Reporting and recordkeeping requirements.

15 CFR Part 756

Administrative practice and procedure, Exports, Foreign trade,

Penalties.

15 CFR Part 758

Administrative practice and procedure, Exports, Foreign trade,

Reporting and recordkeeping requirements.

15 CFR Part 760

Boycotts, Exports, Foreign trade, Reporting and recordkeeping

requirements.

15 CFR Part 762

Administrative practice and procedure, Business and industry,

Confidential business information, Exports, Foreign trade, Reporting

and recordkeeping requirements.

15 CFR Part 764

Administrative practice and procedure, Exports, Foreign trade, Law

enforcement, Penalties.

15 CFR Part 766

Administrative practice and procedure, Confidential business

information, Exports, Foreign trade, Law enforcement, Penalties.

15 CFR Part 768

Administrative practice and procedure, Exports, Foreign trade,

[[Page 25276]] Reporting and recordkeeping requirements.

15 CFR Part 770

Exports, Foreign trade.

15 CFR Part 772

Exports, Foreign trade.

15 CFR Part 774

Exports, Foreign trade.

Dated: April 10, 1995.

Sue E. Eckert,

Assistant Secretary for Export Administration.

For the reasons set forth in the preamble, Subchapter C, Chapter 7

of Title 15, Code of Federal Regulations is proposed to be amended as

follows:

1. Parts 730, 732, 734, 736, 738, 740, 742, 744, 746, 748, 750,

752, 754, 756 and 758 are added to read as follows:

PART 730--GENERAL INFORMATION

Sec.

730.1 What these regulations cover.

730.2 Statutory authority.

730.3 Dual-use exports.

730.4 Other control agencies and departments.

730.5 Coverage of more than exports.

730.6 Control purposes.

730.7 License requirements and exceptions.

730.8 How to proceed and where to get help.

730.9 Boycott.

730.10 Caution.

Authority: 18 U.S.C. 2510 et seq.; 30 U.S.C. 185; 42 U.S.C.

6212; 10 U.S.C. 7429; 10 U.S.C. 7430(e); 50 U.S.C. 1710 et seq.; 22

U.S.C. 3201 et seq.; 42 U.S.C. 2139(a); 43 U.S.C. 1354; 50 U.S.C.

2401 et seq.; 46 U.S.C 466(c); E.O. 12924.

Sec. 730.1 What these regulations cover.

These Export Administration Regulations (EAR) (15 CFR, subchapter

C, chapter 7) are issued by the Bureau of Export Administration (BXA)

of the United States Department of Commerce under laws relating to the

control of certain exports, reexports, and activity. In addition, the

EAR implement antiboycott law provisions requiring regulations to

prohibit specified conduct by United States persons that has the effect

of furthering or supporting boycotts fostered or imposed by a country

against a country friendly to United States.

Sec. 730.2 Statutory authority.

The EAR have been designed primarily to implement the Export

Administration Act of 1979, as amended, 50 U.S.C. app. 2401-2420 (EAA).

There are numerous other legal authorities underlying the EAR. These

are listed in the Federal Register Notices promulgating the EAR and at

the beginning of each Part of the EAR in the Code of Federal

Regulations. 15 CFR parts 730-774. From time to time, the President has

exercised authority under the International Emergency Economic Powers

Act with respect to the EAR. 50 U.S.C. 1701-1706 (IEEPA). The EAA is

not permanent legislation, and when it has lapsed due to the failure to

enact a timely extension, Presidential executive orders under IEEPA

have directed and authorized the continuation in force of the EAR.

Sec. 730.3 Dual-use exports.

The convenient term ``dual-use'' is sometimes used to distinguish

the types of items covered by the EAR from those that are covered by

the regulations of certain other export licensing agencies. In general,

the term dual-use serves to distinguish EAR-controlled items that can

be used both in sensitive (e.g., military or nuclear) and other, non-

sensitive applications from those that are (a) weapons or military-

related in use or design and subject to the controls of the Department

of State (22 CFR parts 120 through 130) or (b) subject to the nuclear-

related controls of the Department of Energy or the Nuclear Regulatory

Commission (10 CFR part 110). Note, however, that although the short-

hand term dual-use may be employed to refer to the entire scope of the

EAR, the EAR also apply to some items that have solely civil uses.

Sec. 730.4 Other control agencies and departments.

In addition to the agencies mentioned in the preceding section that

license the export of nuclear and military-related items, there are

other agencies with jurisdiction over certain narrower classes of

exports. These include the Department of Treasury's Office of Foreign

Assets Control (OFAC) (31 CFR parts 500 through 590), which administers

controls against certain countries which are the object of sanctions

affecting not only exports, but also imports and financial dealings.

(Some OFAC regulations provide for the licensing by BXA of exports and

reexports which are permitted as exceptions to the embargo.) For your

convenience, the list that follows identifies agencies with regulatory

jurisdiction over certain types of exports and reexports. This is not a

comprehensive list, and the brief descriptions are intended are only

generally indicative of the types of controls administered and/or

enforced by each agency.

Defense Services and Defense Articles

Department of State, Office of Defense Trade Controls, Tel. (703)

875-6644, 22 CFR parts 120 through 130

Foreign Assets and Transactions Controls

Department of Treasury, Office of Foreign Assets Control, Tel. (202)

622-2420, 31 CFR parts 500 through 590

Narcotics, Dangerous Drugs, Processing Equipment

Drug Enforcement Administration, Tel. (703) 307-1000, 21 CFR parts

1311 through 1313

Natural Gas and Electric Power

Department of Energy, Tel. (202) 586-1000, 10 CFR Part 305, 320

[reserved]; 18 CFR Part 34

Nuclear; Nuclear Materials, Reactor Vessels, Specially Designed

Commodities

Nuclear Regulatory Commission, Tel. (301) 492-7000, 10 CFR Part 110

Nuclear; Technical Data for Nuclear Weapons/Special Nuclear Materials

Department of Energy, Tel. (202) 586-5000, 10 CFR Part 810

Patent Filing Data Sent Abroad

Patent and Trademark Office, Tel. (703) 557-4636, 37 CFR 5.11; 15

CFR 732.3(b)(4) and 732.10

Watercraft

U.S. Coast Guard documented watercraft of 5 net tons or more--export

or transfer to foreign interest, U.S. Maritime Administration, Tel.

(202) 366-5807, 46 App. U.S.C. 808, 839

Sec. 730.5 Coverage of more than exports.

The core of the export control provisions of the EAR concerns

exports from the United States. You will find, however, that some

provisions give broad meaning to the term ``export'', apply to

transactions outside of the United States, or apply to activities other

than exports.

(a) Reexports. Commodities, technology, and software (referred to

collectively in the EAR as ``items'') that have been exported from the

United States are generally subject to the EAR with respect to

reexport. Many such reexports, however, will qualify for an exception

from licensing requirements.

(b) Foreign products. In some cases, authorization to export

technology from the United States will be subject to assurances that

items produced abroad that are the direct product of that technology

will not be exported to certain destinations without authorization from

BXA.

(c) Deemed exports. Certain actions that you might not regard as an

``export'' in other contexts do constitute an export subject to the

EAR. For example: the electronic transmission of non-public

[[Page 25277]] data that will be received abroad; the release of

technology to a foreign national in the United States through such

means as demonstration or oral briefing; shipments that might not be

deemed ``exports'' for other purposes, such as the return of foreign

equipment to its country of origin after repair in the United States or

shipments from a U.S. foreign trade zone.

(d) U.S. person activities. To counter the proliferation of weapons

of mass destruction, the EAR restrict the involvement of ``United

States persons'' (as defined in the EAR) anywhere in the world in

exports of foreign-origin items, or in providing services or support,

that may contribute to such proliferation.

Sec. 730.6 Control purposes.

The export control provisions of the EAR are intended to serve the

national security, foreign policy, nonproliferation, and short supply

interests of the United States and, in some cases, to carry out its

international obligations. Some controls are designed to restrict

access to dual-use items by countries or persons that might apply such

items to uses inimical to U.S. interests. These include controls

designed to stem the proliferation of weapons of mass destruction and

controls designed to limit the military and terrorism-support

capability of certain countries designated by reason of their support

of terrorist activity. The effectiveness of many of the controls under

the EAR is enhanced by their being maintained as part of a multilateral

system of controls. Multilateral export control cooperation is sought

through arrangements such as the Nuclear Suppliers Group, the Australia

Group, and the Missile Technology Control Regime. The EAR also includes

some export controls to protect the United States from the adverse

impact of the unrestricted export of commodities in short supply.

Sec. 730.7 License requirements and exceptions.

A relatively small percentage of exports and reexports subject to

the EAR require an application to BXA for a License. Most such activity

is permitted by one or more of the License Exceptions described in the

EAR, in which case no application need be made to BXA. In such a case,

reference to the pertinent License Exception is to be entered on the

Shipper's Export Declaration, a document that is to be submitted to the

Customs office at the port of export.

Sec. 730.8 How to proceed and where to get help.

(a) Self-help. In order to determine what the rules are and what

you need to do, review the titles and the introductory sections of the

parts of the EAR. By referring next to part 736, Steps for Determining

Licensing Requirements, you will find guidance to enable you to tell

whether or not your transaction is subject to the EAR and, if it is,

whether it qualifies for a License Exception or must be authorized

through issuance of a license.

(b) Why the EAR are so detailed. Some people will find the great

length of the EAR and their extensive use of technical terms

intimidating. BXA believes, however, that such detail and precision can

and does serve the interests of the public. The detailed listing of

technical parameters in the Commerce Control List (contained in

Supplement No. 1 to part 774 of this subchapter) establishes precise,

objective, criteria. This, should, in most cases, enable the exporter

to ascertain control status. Broader, more subjective criteria would

leave exporters more dependent upon interpretations and rulings by BXA

officials. Moreover, much of the detail in the Commerce Control List is

derived from multilaterally adopted lists, and the specificity serves

to enhance the uniformity and effectiveness of international control

practices and to promote the ``level playing field.'' The detailed

presentation of such elements as licensing and export clearance

procedures enables exporters to find in one place what they need to

know to comply with pertinent requirements. Of special importance is

the detailed listing of License Exception criteria, as these enable an

exporter to determine quickly, and with confidence, that a transaction

can go forward without delay. Finally, some of the detail results from

the need to draft the EAR with care in order to avoid loop-holes and to

permit effective enforcement.

(c) Where to get help. Throughout the EAR you will find information

on offices you can contact for various purposes and types of

information. General information, information on how to obtain forms

and publications, and information on training programs offered by BXA,

is available from the Office of Exporter Services through both its:

Exporter Counselling Division, U.S. Department of Commerce, 14th and

Pennsylvania Avenue, N.W., Room H1099D, Washington, D.C., 20230,

Telephone number: (202) 482-4811, FAX number: (202) 482-3617.

and

Western Regional Office, U.S. Department of Commerce, 3300 Irvine

Avenue, Suite 345, Newport Beach, California 92660-3198, Telephone

number (714) 660-0144, FAX number (714) 660-9347.

Sec. 730.9 Boycott.

Part 760, Restrictive Trade Practices or Boycotts, implements the

antiboycott provisions of the EAA. There are also boycott-related rules

in section 999 of the Internal Revenue Code which deny tax benefits for

certain types of boycott-related agreements. The EAR prohibits certain

discriminatory or boycott-supporting conduct, including the furnishing

of information in a boycott context. The Internal Revenue Code

penalizes many of the same activities by denying the benefit of certain

tax code provisions otherwise available for foreign operations. The EAA

and Internal Revenue Code provisions are not completely parallel. Both

laws also require reporting of boycott-related requests. The Internal

Revenue Code, additionally, requires reports of operations in, with, or

related to a boycotting country or its nationals.

Sec. 730.10 Caution.

The General Information in this Part is just that--general. To

achieve brevity, so as to give you a quick overview, the information in

this Part is selective, incomplete and not expressed with regulatory

precision. The controlling language is the language of succeeding parts

of the EAR and of any other laws or regulations referred to or

applicable. The content of this Part is not to be construed as

modifying or interpreting any other language. You should not take any

action based solely on what you read in this Part.

PART 732--SCOPE OF THE EXPORT ADMINISTRATION REGULATIONS

Sec.

732.1 Introduction.

732.2 Important EAR terms and principles.

732.3 Items subject to the EAR.

732.4 Foreign-made products subject to the EAR.

732.5 Activities of U.S. and foreign persons subject to the EAR.

732.6 Assistance available from BXA for determining licensing and

other requirements.

732.7 Publicly available.

732.8 Information resulting from fundamental research.

732.9 Educational information.

732.10 Patent applications.

732.11 Government-sponsored research covered by contract controls.

732.12 Exports involving Canada.

732.13 Exports from U.S. foreign trade zones. [[Page 25278]]

732.14 Intransit shipments through the United States.

732.15 Shipments to territories, possessions, dependencies, or

departments.

732.16 Effect on foreign laws and regulations.

Supplement No. 1 to Part 732--Questions and Answers--Technology and

Software Subject to the EAR

Supplement No. 2 to Part 732--Other Departments and Agencies With

Foreign Policy and National Security Based Controls

Supplement No. 3 to Part 732--Calculation of Values for De Minimis

Rules

Authority: 18 U.S.C. 2510 et seq.; 30 U.S.C. 185; 42 U.S.C.

6212; 10 U.S.C. 7429; 10 U.S.C. 7430(e); 50 U.S.C. 1710 et seq.; 22

U.S.C. 3201 et seq.; 42 U.S.C. 2139(a); 43 U.S.C. 1354; 50 U.S.C.

2401 et seq.; 46 U.S.C 466(c); E.O. 12924.

Sec. 732.1 Introduction.

(a) This part sets forth the scope of the Export Administration

Regulations (EAR) (15 CFR, subchapter C, chapter 7). Specifically, this

part covers the following subjects:

(1) It explains the usage in the EAR of the terms ``subject to the

EAR,'' ``item,'' ``you,'' and ``export and reexport of technology and

software.'' (Sec. 732.2 of this part)

(2) It describes the kinds of items of U.S. origin that are subject

to the EAR (Secs. 732.3, 732.7, 732.8, 732.9, 732.10, and 732.11 of

this part). It also describes when foreign-made products are subject to

the EAR and sets forth specific guidance for determining whether

certain technology and software are subject to the EAR. (Sec. 732.4 of

this part)

(3) It describes the activities of U.S. persons and foreign persons

that are subject to the EAR. (Sec. 732.5 of this part)

(4) It notes that assistance to the public is available from BXA

for determining whether an item or activity is within BXA's

jurisdiction. (Sec. 732.6 of this part)

(5) It sets forth the special policies under the EAR that apply to

exports involving Canada. (Secs. 732.6 and 732.12 of this part)

(Sec. 748.3 of this subchapter)

(6) It describes how the EAR deal with exports from U.S. foreign

trade zones. (Sec. 732.13 of this part)

(7) It makes clear that items moving in transit through the United

States are subject to the EAR. (Sec. 732.14 of this part)

(8) It describes how the EAR deal with shipments to the

Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana

Islands, and U.S. territories, dependencies, and possessions.

(Sec. 732.15 of this part)

(9) It makes clear that compliance with the EAR does not relieve

any responsibilities under foreign laws or regulations. (Sec. 732.16 of

this part)

(b) This part does not address any of the provisions set forth in

Part 760 of this subchapter, Restrictive Trade Practices or Boycotts.

(c) This part does not define the scope of legal authority to

regulate exports, including reexports, or activities found in the

Export Administration Act and other statutes. What this part does do is

set forth the extent to which such legal authority has been exercised

through the EAR.

Sec. 732.2 Important EAR terms and principles.

(a) Subject to the EAR--Definition. (1) ``Subject to the EAR'' is a

term used in the EAR to describe those items and activities over which

BXA exercises regulatory jurisdiction under the EAR. Conversely, items

and activities that are not subject to the EAR are outside the

regulatory jurisdiction of the EAR and are not affected by the

regulations in this subchapter. The items and activities subject to the

EAR are described in Sec. 732.2 through Sec. 732.5 of this part. You

should review the Commerce Control List and any applicable parts of the

EAR to determine whether an item or activity is subject to the EAR.

However, if you need help in determining whether an item or activity is

subject to the EAR, see Sec. 732.6 of this part. Publicly available

technology and software not subject to the EAR are described in

Sec. 732.7 through Sec. 732.11 and Supplement No. 1 to this part.

(2) Items and activities subject to the EAR may also be controlled

under export-related programs administered by other agencies. Items and

activities subject to the EAR are not necessarily exempted from the

control programs of other agencies. Although BXA and other agencies

which maintain controls for national security and foreign policy

reasons (see Supplement No. 2 to Part 732) try to minimize overlapping

jurisdiction, you should be aware that in some instances you may have

to comply with more than one regulatory program.

(3) The term ``subject to the EAR'' should not be confused with

licensing or other requirements imposed in other parts of the EAR. Just

because an item or activity is subject to the EAR does not mean that a

license or other requirement automatically applies. A license or other

requirement applies only in those cases where other parts of the EAR

impose a licensing or other requirement on such items or activities.

(b) Use of the term ``item''. The term ``item'' is used in the EAR

to mean ``commodities, technology, and software.'' The two terms are

used interchangeably. When the EAR intend to refer specifically to

commodities, technology, or software, the text will use the specific

reference.

(c) Use of the term ``you''. Unless otherwise indicated, the

prohibitions and duties under the regulations in this subchapter apply

to all persons and firms and the term ``you'' means any person,

including a natural person or a firm. Moreover, firms are responsible

for the acts of their employees and agents that violate the

prohibitions and duties imposed by the EAR; and persons acting as

employees or agents are also individually liable for such violations.

(d) Export and reexport of technology and software. (1) ``Export''

of technology or software means:

(i) An actual shipment or transmission of technology or software

out of the United States;

(ii) Any release of technology or source code to a foreign

national. Such release is deemed to be an export to the home country or

countries of the foreign national. This deemed export rule does not

apply to persons lawfully admitted for permanent residence in the

United States and does not apply to persons who are protected

individuals under the Immigration and Naturalization Act (8 U.S.C.

1324b(a)(3)). Note that the release of any item to any party with

knowledge or reason to know a violation is about to occur is prohibited

by Sec. 734.2(b)(8) of this subchapter; or

(iii) Any release of technology or software of U.S.-origin in a

foreign country.

(2) ``Release'' of technology or software. Technology or software

is released for export through:

(i) Visual inspection by foreign nationals of U.S.-origin equipment

and facilities;

(ii) Oral exchanges of information in the United States or abroad;

or

(iii) The application to situations abroad of personal knowledge or

technical experience acquired in the United States.

(3) ``Reexport'' of technology or software means an actual shipment

or transmission from one foreign country to another. In addition, any

release of technology or source code to a foreign national of another

country is a deemed reexport to the home country or countries of the

foreign national. However, this deemed reexport definition does not

apply to persons lawfully admitted for permanent residence. The term

``release'' is defined in paragraph (d)(2) of this section. Note that

the release of any item to any party with knowledge or reason to know a

violation is about to occur is prohibited by Sec. 734.2(b)(8) of this

subchapter. [[Page 25279]]

Sec. 732.3 Items subject to the EAR.

All U.S. origin items and certain foreign-made products as

described in Sec. 732.4 of this Part, are subject to the EAR, except

the following:

(a) Items that are exclusively controlled for export or reexport by

another department or agency of the U.S. Government which regulates

exports or reexports for national security or foreign policy purposes

(see Supplement No. 2 to part 742). For assistance in determining

whether an item is subject to the EAR, see Sec. 732.6 of this part. See

part 730 of this subchapter for a listing of other departments and

agencies that administer export and reexport controls.

(b) Technology and software that:

(1) Are already publicly available or will be made publicly

available as described in Sec. 732.7 of this part;

(2) Arise during or result from fundamental research, as described

in Sec. 732.8 of this part;

(3) Are educational, as described in Sec. 732.9 of this part;

(4) Are included in certain patent applications, as described in

Sec. 732.10 of this part; or

(5) Are classified by being assigned a security classification

(e.g., ``top secret,'' ``secret,'' or ``confidential'') by an officer

or agency of the U.S. government.1

\1\The export of classified technology and software is

controlled by the Center for Defense Trade of the U.S. Department of

State or the U.S. Department of Energy.

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Sec. 732.4 Foreign-made products subject to the EAR.

(a) Items subject to the EAR. The following are included among the

items that are subject to the EAR:

(1) U.S.-origin parts, components, materials, or other commodities

incorporated abroad into foreign-made products, in quantities exceeding

de minimis levels as set forth in paragraph (b) of this section;

(2) Certain foreign-made direct products of U.S. origin technology

or software, as set forth in Sec. 734.2(b)(3) of this subchapter. The

term ``direct product'' means the immediate product (including

processes and services) produced directly by the use of technology or

software; and

(3) Certain commodities produced by any plant or major component of

a plant that is a direct product of U.S. origin technology or software,

as set forth in Sec. 734.2(b)(3) of this subchapter.

(b) De minimis U.S. content. (1) There is no de minimis level for

the export from a foreign country of a foreign-made supercomputer

containing U.S. origin parts, components, or materials that are

controlled to the new destination.

(2) Except for supercomputers, for embargoed countries at part 746

of this subchapter and for countries named as terrorist-supporting

countries at part 744 of this subchapter the following are not subject

to the EAR:

(i) Reexports of a foreign-made commodity incorporating controlled

U.S.-origin commodities valued at 10% or less of the total value of the

foreign-made commodity;

(ii) Reexports of foreign-made software incorporating controlled

U.S.-origin software valued at 10% or less of the total value of the

foreign-made software; or

(iii) Reexports of foreign technology commingled with or drawn from

controlled U.S. origin technology valued at 10% or less of the total

value of the foreign technology.

(3) Except for supercomputers, for all other countries, the

following are not subject to the EAR:

(i) Reexports of a foreign-made commodity incorporating controlled

U.S.-origin commodities valued at 25% or less of the total value of the

foreign-made commodity;

(ii) Reexports of foreign-made software incorporating controlled

U.S.-origin software valued at 25% or less of the total value of the

foreign-made software; or

(iii) Reexports of foreign technology commingled with or drawn from

controlled U.S.-origin technology valued at 25% or less of the total

value of the foreign technology.

(4) For purposes of determining de minimis levels, technology and

source code used to design or produce foreign-made commodities or

software are not considered to be incorporated into such foreign-made

commodities or software. Commodities subject only to short supply

controls are not included in calculating U.S. content.

(5) You are responsible for making the necessary calculations to

determine whether the de minimis provisions apply to your situation.

See Supplement No. 3 to part 742 for guidance regarding calculation of

U.S. controlled content.

Sec. 732.5 Activities of U.S. and foreign persons subject to the EAR.

The following kinds of activities are subject to the EAR:

(a) Certain activities of U.S. persons related to the proliferation

of chemical or biological weapons or of missile technology as set forth

in Sec. 744.6 of this subchapter.

(b) Activities of U.S. or foreign persons prohibited by any order

issued under the EAR, including a Denial Order issued pursuant to part

766 of this subchapter.

Sec. 732.6 Assistance available from BXA for determining licensing and

other requirements.

(a) If you are not sure whether a commodity, technology, or

software, or activity is subject to the EAR, or is subject to licensing

or other requirements under the EAR, you may ask BXA for an advisory

opinion, classification, or a determination whether a particular item

or activity is subject to the EAR. In many instances, including those

where the item is specially designed, developed, configured, adapted,

or modified for military application, the item may fall under the

licensing jurisdiction of the Department of State and may be subject to

the controls of the International Traffic in Arms Regulations (22 CFR

parts 120 to 130) (ITAR). In order to determine if the Department of

State has licensing jurisdiction over an item, you should submit a

request for a commodity jurisdiction determination to the Department of

State, Office of Defense Trade Controls. Exporters should note that in

a very limited number of cases, the categories of items may be subject

to both the ITAR and the EAR. The relevant departments are working to

eliminate any unnecessary overlaps that may exist.

(b) As the agency responsible for administering the EAR, BXA is the

only agency that has the responsibility for determining whether an item

or activity is subject to the EAR and, if so, what licensing or other

requirements apply under the EAR. Such a determination only affects EAR

requirements, and does not affect the applicability of any other

regulatory programs.

(c) If you need help in determining BXA licensing or other

requirements you may ask BXA for help by following the procedures set

forth in Sec. 748.3 of this subchapter.

Sec. 732.7 Publicly available.

(a) Information is made public and so becomes ``publicly

available'' when it becomes generally accessible to the interested

public in any form, including:

(1) Publication in periodicals, books, print, electronic, or any

other media available for general distribution to any member of the

public or to a community of persons interested in the subject matter,

such as those in a scientific or engineering discipline, either free or

at a price that does not exceed the cost of reproduction and

distribution (See Supplement No. 1 to part 732, Questions A(1) through

A(6));

(2) Ready availability at libraries open to the public or at

university libraries (See Supplement No. 1 to part 732, Question A(6));

[[Page 25280]]

(3) Patents and open (published) patent applications available at

any patent office; and

(4) Release at an open conference, meeting, seminar, trade show, or

other open gathering.

(i) A conference or gathering is ``open'' if all technically

qualified members of the public are eligible to attend and attendees

are permitted to take notes or otherwise make a personal record (not

necessarily a recording) of the proceedings and presentations.

(ii) All technically qualified members of the public may be

considered eligible to attend a conference or other gathering

notwithstanding:

(A) A registration fee reasonably related to cost and reflecting an

intention that all interested and technically qualified persons be able

to attend, or a limitation on actual attendance, as long as attendees

either are the first who have applied or are selected on the basis of

relevant scientific or technical competence, experience, or

responsibility (See Supplement No. 1 to Part 732, Questions B(1)

through B(6)).

(B) Reserved.

(iii) ``Publicly available'' includes submission of papers to

domestic or foreign editors or reviewers of journals, or to organizers

of open conferences or other open gatherings, with the understanding

that the papers will be made publicly available if favorably received.

(See Supplement No. 1 to Part 732, Questions A(1) and A(3)).

(b) Reserved.

Sec. 732.8 Information resulting from fundamental research.

(a) Fundamental research. Paragraphs (b) through (d) of this

section and Sec. 732.11 of this part provide specific rules that will

be used to determine whether research in particular institutional

contexts qualifies as ``fundamental research''. The intent behind those

provisions is to identify as ``fundamental research'' basic and applied

research in science and engineering, where the resulting information is

ordinarily published and shared broadly within the scientific

community. Such research can be distinguished from proprietary research

and from industrial development, design, production, and product

utilization, the results of which ordinarily are restricted for

proprietary reasons or specific national security reasons as defined in

Sec. 732.10 of this part. (See Supplement No. 1 to part 732, Question

D(8)).

(b) University based research. (1) Research conducted by

scientists, engineers, or students at a university normally will be

considered fundamental research, as described in this paragraph (b).

(``University'' means any accredited institution of higher education

located in the United States.)

(2) Prepublication review by a sponsor of university research

solely to insure that the publication would not inadvertently divulge

proprietary information that the sponsor has furnished to the

researchers does not change the status of the research as fundamental

research. However, release of information from a corporate sponsor to

university researches where the research results are subject to

prepublication review, is subject to the EAR. (See Supplement No. 1 to

part 732, Questions D(7), D(9), and D(10)).

(3) Prepublication review by a sponsor of university research

solely to ensure that publication would not compromise patent rights

does not change the status of fundamental research, so long as the

review causes no more than a temporary delay in publication of the

research results.

(4) However, the initial transfer of information from an industry

sponsor to university researchers is subject to the EAR where the

parties have agreed that the sponsor may withhold from publication some

or all of the information so provided. (See Supplement No. 1 to this

part, Question D(2)).

(5) University based research is not considered ``fundamental

research'' if the university or its researchers accept (at the request,

for example, of an industrial sponsor) other restrictions on

publication of scientific and technical information resulting from the

project or activity. Scientific and technical information resulting

from the research will nonetheless qualify as fundamental research once

all such restrictions have expired or have been removed. (See

Supplement No. 1 to part 732, Questions D(7) and D(9)).

(6) The provisions of Sec. 732.11 of this part will apply if a

university or its researchers accept specific national security

controls (as defined in Sec. 732.11 of this part) on a research project

or activity sponsored by the U.S. Government. (See Supplement No. 1 to

part 732, Questions E(1) and E(2)).

(c) Research based at Federal agencies or FFRDCs. Research

conducted by scientists or engineers working for a Federal agency or a

Federally Funded Research and Development Center (FFRDC) may be

designated as ``fundamental research'' within any appropriate system

devised by the agency or the FFRDC to control the release of

information by such scientists and engineers. (See Supplement No. 1 to

part 732, Questions D(8) and D(11)).

(d) Corporate research. (1) Research conducted by scientists or

engineers working for a business entity will be considered

``fundamental research'' at such time and to the extent that the

researchers are free to make scientific and technical information

resulting from the research publicly available without restriction or

delay based on proprietary concerns or specific national security

controls as defined in Sec. 732.11 of this part.

(2) Prepublication review by the company solely to ensure that the

publication would compromise no proprietary information provided by the

company to the researchers is not considered to be a proprietary

restriction under paragraph (d)(1) of this section. However, paragraph

(d)(1) of this section does not authorize the release of information to

university researchers where the research results are subject to

prepublication review. (See Supplement No. 1 to part 732, Questions

D(8), D(9), and D(10)).

(3) Prepublication review by the company solely to ensure that

prepublication would compromise no patent rights will not be considered

a proprietary restriction for this purpose, so long as the review

causes no more than a temporary delay in publication of the research

results.

(4) However, the initial transfer of information from a business

entity to researchers is not authorized under the ``fundamental

research'' provision where the parties have agreed that the business

entity may withhold from publication some or all of the information so

provided.

(e) Research based elsewhere. Research conducted by scientists or

engineers who are not working for any of the institutions described in

paragraphs (b) through (d) of this section will be treated as corporate

research, as described in paragraph (d) of this section. (See

Supplement No. 1 to part 732, Question D(8)).

Sec. 732.9 Educational information.

``Educational information'' referred to in Sec. 732.3(b)(3) of this

part is not subject to the EAR if it is released by instruction in

catalog courses and associated teaching laboratories of academic

institutions. Dissertation research is discussed in Sec. 732.8(b) of

this part. (See Supplement No. 1 to part 732, Questions C(1) through

C(6)).

Sec. 732.10 Patent applications.

The information referred to in Sec. 732.3(b)(4) of this part is:

[[Page 25281]]

(a) Information contained in a patent application prepared wholly

from foreign-origin technical data where the application is being sent

to the foreign inventor to be executed and returned to the United

States for subsequent filing in the U.S. Patent and Trademark Office;

(b) Information contained in a patent application, or an amendment,

modification, supplement or division of an application, and authorized

for filing in a foreign country in accordance with the regulations of

the Patent and Trademark Office, 37 CFR part 5;2 or

\2\Regulations issued by the Patent and Trademark Office in 37

CFR Part 5 provide for the export to a foreign country of

unclassified technical data in the form of a patent application or

an amendment, modification, or supplement thereto or division

thereof.

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(3) Information contained in a patent application when sent to a

foreign country before or within six months after the filing of a

United States patent application for the purpose of obtaining the

signature of an inventor who was in the United States when the

invention was made or who is a co-inventor with a person residing in

the United States.

Sec. 732.11 Government-sponsored research covered by contract

controls.

(a) If research is funded by the U.S. Government, and specific

national security controls are agreed on to protect information

resulting from the research, Sec. 732.3(b)(2) of this part will not

apply to any export or reexport of such information in violation of

such controls. However, any export or reexport of information resulting

from the research that is consistent with the specific controls may

nonetheless be made under this provision.

(b) Examples of ``specific national security controls'' include

requirements for prepublication review by the Government, with right to

withhold permission for publication; restrictions on prepublication

dissemination of information to non-U.S. citizens or other categories

of persons; or restrictions on participation of non-U.S. citizens or

other categories of persons in the research. A general reference to one

or more export control laws or regulations or a general reminder that

the Government retains the right to classify is not a ``specific

national security control''. (See Supplement No. 1 to part 732,

Questions E(1) and E(2).)

Sec. 732.12 Exports involving Canada.

(a) Exports of items to Canada are subject to the EAR.

(b) Recognizing the special relationship between the United States

and Canada, the general policy under the EAR is to permit most

shipments of items to Canada for consumption or use in that country

without a license.

(c) When the items leaving the United States will transit Canada or

are intended for reexport from Canada to another foreign destination

and such shipment would require a license if made directly from the

United States to that destination, a license is required under the EAR.

The licensing policy will be based on the policy applicable to a direct

shipment from the United States to such other destination. Please see

Sec. 758.1(d) of this subchapter for special documentation provisions

that apply to exports from the United States that transit Canada.

Sec. 732.13 Exports from U.S. foreign trade zones.

(a) Items exported from U.S. foreign trade zones are subject to the

EAR.

(b) EAR licensing requirements apply to items originating in the

United States and located in a foreign trade zone, as well as foreign

origin items that, as a result of processing, manufacturing, or

assembly while in a U.S. foreign trade zone, have been so altered that

they have either been substantially enhanced in value or have lost

their original identity with respect to form.

(c) Shipments of items of foreign origin that have not been altered

as described in paragraph (b) of this section, for which no customs

entry has been made and that enter a U.S. foreign trade zone may be

exported from the foreign trade zone without a license, except the

following:

(1) Exports to Country Group D:1 and E:2 (see supplement No. 1 to

part 740 of this subchapter), if a shipment of similar items of U.S.

origin could not be made from the customs territory of the United

States to such a destination without a license. Items of Canadian

origin require a license only if the shipment of the items would

require a license to virtually all destinations, including Country

Group B, if exported directly from the United States.

(2) Items shipped to the United States under International Import

Certificates, Form BXA 645P/ATF-4522/DSP-53, in accordance with the

procedure described in Supplement No. 4 to part 748 of this subchapter.

(3) The export and reexport of any commodity listed in Part 754,

Short Supply, as requiring a license if the commodity were exported

from the custom territory of the United States.

(d) Commodities of U.S. or foreign origin disposed of by the U.S.

Government under a foreign excess property disposal program that enter

a U.S. foreign trade zone without a customs entry require a license if

the same shipment would require a license if the export were made

directly from the customs territory of the United States.

Sec. 732.14 Intransit shipments through the United States.

(a) Items moving intransit through the United States are subject to

the EAR.

(b) Items shipped on board a conveyance and passing through the

United States in transit from one foreign country to another do not

require a license under the EAR provided that:

(1) While passing its transit through the United States, such items

have not been unladen from the conveyance on which they entered; and

(2) They are not originally manifested to the United States.

(c) If you determine that an item moving intransit through the

United States requires a license under the EAR, see Sec. 740.8 of this

subchapter, Exception 6, Exports of Items Temporarily in the United

States (TUS), for a description of specific exceptions to licensing

requirements for intransit shipments.

Sec. 732.15 Shipments to territories, possessions, dependencies, or

departments.

(a) Shipments to Puerto Rico, the Mariana Islands and U.S.

territories, dependencies, and possessions. The EAR do not require a

license or other authorization for shipments from the United States to

the Commonwealth of Puerto Rico, or the Commonwealth of the Northern

Mariana Islands or any territory, dependency, or possession of the

United States as listed in Schedules C & E, Classification of Country

and Territory Designations for U.S. Export Statistics, issued by the

Bureau of the Census.

(b) Shipments to the territories, possessions, or departments of

other destinations. There are a number of destinations that are not

listed in the Commerce Country Chart contained in Supplement No. 1 to

Part 738 of this subchapter, or in the Country Groups contained in

Supplement No. 1 to part 740 of this subchapter. If your destination is

not listed on the Commerce Country Chart or in the Country Groups and

such destination is a territory, possession, or department of another

country, the EAR accords your proposed destination the same licensing

treatment as the country to which it is a territory, possession, or

department. For example, if your destination is the Cayman Islands, a

dependent territory of the United Kingdom, consult the United Kingdom

on the Commerce Country Chart and in the Country Groups.

[[Page 25282]]

Sec. 732.16 Effect on foreign laws and regulations.

Any person who complies with any of the license or other

requirements of the EAR is not relieved of the responsibility of

complying with applicable foreign laws and regulations. Conversely, any

person who complies with the license or other requirements of a foreign

law or regulation is not relieved of the responsibility of complying

with U.S. laws and regulations, including the EAR.

Supplement No. 1--Questions and Answers--Technology and Software

Subject to the EAR

This Supplement No. 1 contains explanatory questions and answers

relating to technology and software that is subject to the EAR. It

is intended to give the public guidance in understanding how BXA

interprets this part, but is only illustrative, not comprehensive.

In addition, facts or circumstances that differ in any material way

from those set forth in the questions or answers will be considered

under the applicable provisions of the EAR.

This Supplement is divided into nine sections according to topic

as follows:

Section A: Publication of technology [and software] and exports

and reexports of technology that has been or will be published.

Section B: Release of technology at conferences.

Section C: Educational instruction.

Section D: Research, correspondence, and informal scientific

exchanges.

Section E: Federal contract controls.

Section F: Commercial consulting.

Section G: Software.

Section H: Availability in a public library.

Section I: Miscellaneous.

Section A: Publication

Question A(1): I plan to publish in a foreign journal a

scientific paper describing the results of my research, which is in

an area listed in the EAR as requiring a license to all countries

except Canada. Do I need a license to send a copy to my publisher

abroad?

Answer: No. This export transaction is not subject to the EAR.

The EAR do not cover technology that is already publicly available,

as well as technology that is made public by the transaction in

question. (Secs. 732.3 and 732.7 of this part) Your research results

would be made public by the planned publication. You would not need

a license.

Question A(2): Would the answer differ depending on where I work

or where I performed the research?

Answer: No. Of course, the result would be different if your

employer or another sponsor of your research imposed restrictions on

its publication. (Sec. 732.8 of this part)

Question (A)3: Would I need a license to send the paper to the

editors of a foreign journal for review to determine whether it will

be accepted for publication?

Answer: No. This export transaction is not subject to the EAR

because you are submitting the paper to the editors with the

intention that the paper will be published if favorably received.

(Sec. 732.7(d)(3) of this part)

Question A(4): The research on which I will be reporting in my

paper is supported by a grant from the Department of Energy (DOE).

The grant requires prepublication clearance by DOE. Does that make

any difference under the Export Administration Regulations?

Answer: No, the transaction is not subject to the EAR. But if

you published in violation of any Department of Energy controls you

have accepted in the grant, you may be subject to appropriate

administrative, civil, or criminal sanctions under other laws.

Question A(5): We provide consulting services on the design,

layout, and construction of integrated circuit plants and production

lines. A major part of our business is the publication for sale to

clients of detailed handbooks and reference manuals on key aspects

on the design and manufacturing processes. A typical cost of

publishing such a handbook and manual might be $500; the typical

sales price is about $15,000. Is the publication and sale of such

handbooks or manuals subject to the EAR?

Answer: Yes. The price is above the cost of reproduction and

distribution. (Sec. 732.7(a) of this part) Thus, you would need to

obtain a license or qualify for a License Exception before you could

export or reexport any of these handbooks or manuals.

Question A(6): My Ph.D. thesis is on technology, listed in the

EAR as requiring a license to all destination except Canada, which

has never been published for general distribution. However, the

thesis is available at the institution from which I took the degree.

Do I need a license to send another copy to a colleague overseas?

Answer: That may depend on where in the institution it is

available. If it is not readily available in the university library

(e.g., by filing in open stacks with a reference in the catalog), it

is not ``publicly available'' and the export or reexport would be

subject to the EAR on that ground. The export or reexport would not

be subject to the EAR if your Ph.D. research qualified as

``fundamental research'' under Sec. 732.8 of this Part. If not,

however, you will need to obtain a license or qualify for a License

Exception before you can send a copy out of the country.

Question A(7): We sell electronically recorded information,

including software and databases, at wholesale and retail. Our

products are available by mail order to any member of the public,

though intended for specialists in various fields. They are priced

to maximize sales to persons in those fields. Do we need a license

to sell our products to foreign customers?

Answer: You would not need a license for otherwise controlled

technology or software if the technology and software are made

publicly available at a price that does not exceed the cost of

production and distribution to the technical community. Even if

priced at a higher level, the export or reexport of the technology

or software source code in a library accessible to the public is not

subject to the EAR. (Sec. 732.7(a) of this part)

Section B: Conferences

Question B(1): I have been invited to give a paper at a

prestigious international scientific conference on a subject listed

as requiring a license under the EAR to all countries, except

Canada. Scientists in the field are given an opportunity to submit

applications to attend. Invitations are given to those judged to be

the leading researchers in the field, and attendance is by

invitation only. Attendees will be free to take notes, but not make

electronic or verbatim recordings of the presentations or

discussions. Some of the attendees will be foreigners. Do I need a

license to give my paper?

Answer: No. Release of information at an open conference and

information that has been released at an open conference is not

subject to the EAR. The conference you describe fits the definition

of an open conference. (Sec. 732.7(d) of this part)

Question B(2): Would it make any difference if there were a

prohibition on making any notes or other personal record of what

transpires at the conference?

Answer: Yes. To qualify as an ``open'' conference, attendees

must be permitted to take notes or otherwise make a personal record

(although not necessarily a recording). If note taking or the making

of personal records is altogether prohibited, the conference would

not be considered ``open''.

Question B(3): Would it make any difference if there were also a

registration fee?

Answer: That would depend on whether the fee is reasonably

related to costs and reflects an intention that all interested and

technically qualified persons should be able to attend.

(Sec. 732.7(d)(2)(i) of this part).

Question B(4): Would it make any difference if the conference

were to take place in another country?

Answer: No.

Question B(5): Must I have a license to send the paper I propose

to present at such a foreign conference to the conference organizer

for review?

Answer: No. A license is not required under the EAR to submit

papers to foreign organizers of open conferences or other open

gatherings with the intention that the papers will be delivered at

the conference, and so made publicly available, if favorably

received. The submission of the papers is not subject to the EAR.

(Sec. 732.7(d)(3) of this part)

Question B(6): Would the answers to any of the foregoing

questions be different if my work were supported by the Federal

Government?

Answer: No. You may export and reexport the papers, even if the

release of the paper violates any agreements you have made with your

government sponsor. However, nothing in the EAR relieves you of

responsibility for conforming to any controls you have agreed to in

your Federal grant or contract.

Section C: Educational Instruction

Question C(1): I teach a university graduate course on design

and manufacture of very high-speed integrated circuitry. Many of the

students are foreigners. Do I need a license to teach this course?

Answer: No. Release of information by instruction in catalog

courses and associated [[Page 25283]] teaching laboratories of

academic institutions is not subject to the EAR. (Sec. 732.9 of this

part)

Question C(2): Would it make any difference if some of the

students were from countries to which export licenses are required?

Answer: No.

Question C(3): Would it make any difference if I talk about

recent and as yet unpublished results from my laboratory research?

Answer: No.

Question C(4): Even if that research is funded by the

Government?

Answer: Even then, but you would not be released from any

separate obligations you have accepted in your grant or contract.

Question C(5): Would it make any difference if I were teaching

at a foreign university?

Answer: No.

Question C(6): We teach proprietary courses on design and

manufacture of high-performance machine tools. Is the instruction in

our classes subject to the EAR?

Answer: Yes. That instruction would not qualify as ``release of

educational information'' under Sec. 732.9 of this part because your

proprietary business does not qualify as an ``academic institution''

within the meaning of Sec. 732.9 of this part. Conceivably, however,

the instruction might qualify as ``release at an open * * * seminar,

* * * or other open gathering'' under Sec. 732.7(d) of this part.

The conditions for qualification of such a seminar or gathering as

``open'', including a fee ``reasonably related to costs (of the

conference, not of producing the data) and reflecting an intention

that all interested and technically qualified persons be able to

attend,'' would have to be satisfied.

Section D: Research, Correspondence, and Informal Scientific

Exchanges

Question D(1): Do I need a license in order for a foreign

graduate student to work in my laboratory?

Answer: Not if the research on which the foreign student is

working qualifies as ``fundamental research'' under Sec. 732.8 of

this part. In that case, the research is not subject to the EAR.

Question D(2): Our company has entered into a cooperative

research arrangement with a research group at a university. One of

the researchers in that group is a PRC national. We would like to

share some of our proprietary information with the university

research group. We have no way of guaranteeing that this information

will not get into the hands of the PRC scientist. Do we need to

obtain a license to protect against that possibility?

Answer: No. The EAR do not cover the disclosure of information

to any scientists, engineers, or students at a U.S. university in

the course of industry-university research collaboration under

specific arrangements between the firm and the university, provided

these arrangements do not permit the sponsor to withhold from

publication any of the information that he provides to the

researchers. However, if your company and the researchers have

agreed to a prohibition on publication, then you must obtain a

license or qualify for a License Exception before transferring the

information to the university. It is important that you as the

corporate sponsor and the university get together to discuss whether

foreign nationals will have access to the information, so that you

may obtain any necessary authorization prior to transferring the

information to the research team.

Question D(3): My university will host a prominent scientist

from the PRC who is an expert on research in engineered ceramics and

composite materials. Do I require a license before telling our

visitor about my latest, as yet unpublished, research results in

those fields?

Answer: Probably not. If you performed your research at the

university, and you were subject to no contract controls on release

of the research, your research would qualify as ``fundamental

research'' (Sec. 732.8(b) of this part). Information arising during

or resulting from such research is not subject to the EAR

(Sec. 732.3(b)(2) of this part).

You should probably assume, however, that your visitor will be

debriefed later about anything of potential military value he learns

from you. If you are concerned that giving such information to him,

even though permitted, could jeopardize U.S. security interests, the

Commerce Department can put you in touch with appropriate Government

scientists who can advise you. Write to Department of Commerce,

Bureau of Export Administration, P.O. Box 273, Washington, DC 20044.

Question D(4): Would it make any difference if I were proposing

to talk with a PRC expert in China?

Answer: No, if the information in question arose during or

resulted from the same ``fundamental research.''

Question D(5): Could I properly do some work with him in his

research laboratory inside China?

Answer: Application abroad of personal knowledge or technical

experience acquired in the United States constitutes an export of

that knowledge and experience, and such an export may be subject to

the EAR. If any of the knowledge or experience you export in this

way requires a license under the EAR, you must obtain such a license

or qualify for a License Exception.

Question D(6): I would like to correspond and share research

results with an Iranian expert in my field, which deals with

technology that requires a license to all destinations except

Canada. Do I need a license to do so?

Answer: Not as long as we are still talking about information

that arose during or resulted from research that qualifies as

``fundamental'' under the rules spelled out in Sec. 732.8 of this

part.

Question D(7): Suppose the research in question were funded by a

corporate sponsor and I had agreed to prepublication review of any

paper arising from the research?

Answer: Whether your research would still qualify as

``fundamental'' would depend on the nature and purpose of the

prepublication review. If the review is intended solely to ensure

that your publications will neither compromise patent rights nor

inadvertently divulge proprietary information that the sponsor has

furnished to you, the research could still qualify as

``fundamental.'' But if the sponsor will consider as part of its

prepublication review whether it wants to hold your new research

results as trade secrets or otherwise proprietary information (even

if your voluntary cooperation would be needed for it to do so), your

research would no longer qualify as ``fundamental.'' As used in

these regulations it is the actual and intended openness of research

results that primarily determines whether the research counts as

``fundamental'' and so is not subject to the EAR.

Question D(8): In determining whether research is thus open and

therefore counts as ``fundamental,'' does it matter where or in what

sort of institution the research is performed?

Answer: In principle, no. ``Fundamental research'' is performed

in industry, Federal laboratories, or other types of institutions,

as well as in universities. The regulations introduce some

operational presumptions and procedures that can be used both by

those subject to the regulations and by those who administer them to

determine with some precision whether a particular research activity

is covered. Recognizing that common and predictable norms operate in

different types of institutions, the regulations use the

institutional locus of the research as a starting point for these

presumptions and procedures. Nonetheless, it remains the type of

research, and particularly the intent and freedom to publish, that

identifies ``fundamental research'', not the institutional locus.

(Sec. 732.8 of this part)

Question D(9): I am doing research on high-powered lasers in the

central basic-research laboratory of an industrial corporation. I am

required to submit the results of my research for prepublication

review before I can publish them or otherwise make them public. I

would like to compare research results with a scientific colleague

from Vietnam and discuss the results of the research with her when

she visits the United States. Do I need a license to do so?

Answer: You probably do need a license (Sec. 732.8(d) of this

part). However, if the only restriction on your publishing any of

that information is a prepublication review solely to ensure that

publication would compromise no patent rights or proprietary

information provided by the company to the researcher your research

may be considered ``fundamental research,'' in which case you may be

able to share information because it is not subject to the EAR. Note

that the information will be subject to the EAR if the

prepublication review is intended to withhold the results of the

research from publication.

Question D(10): Suppose I have already cleared my company's

review process and am free to publish all the information I intend

to share with my colleague, though I have not yet published?

Answer: If the clearance from your company means that you are

free to make all the information publicly available without

restriction or delay, the information is not subject to the EAR.

(Sec. 732.8(d) of this part)

Question D(11): I work as a researcher at a Government-owned,

contractor-operated [[Page 25284]] research center. May I share the

results of my unpublished research with foreign nationals without

concern for export controls under the EAR?

Answer: That is up to the sponsoring agency and the center's

management. If your research is designated ``fundamental research''

within any appropriate system devised by them to control release of

information by scientists and engineers at the center, it will be

treated as such by the Commerce Department, and the research will

not be subject to the EAR. Otherwise, you would need to obtain a

license or qualify for a License Exception, except to publish or

otherwise make the information public. (Sec. 732.8(c) of this part).

Section E: Federal Contract Controls

Question E(1): In a contract for performance of research entered

into with the Department of Defense (DOD), we have agreed to certain

national security controls. DOD is to have ninety days to review any

papers we proposed before they are published and must approve

assignment of any foreign nationals to the project. The work in

question would otherwise qualify as ``fundamental research'' section

under Sec. 732.8 of this part. Is the information arising during or

resulting from this sponsored research subject to the EAR?

Answer: Under Sec. 732.11 of this part, any export or reexport

of information resulting from government-sponsored research that is

inconsistent with contract controls you have agreed to will not

qualify as ``fundamental research'' and any such export or reexport

would be subject to the EAR. Any such export or reexport that is

consistent with the controls will continue to be eligible for export

and reexport under the ``fundamental research'' rule set forth in

Sec. 732.8 of this part. Thus, if you abide by the specific controls

you have agreed to, you need not be concerned about violating the

EAR. If you violate those controls and export or reexport

information as ``fundamental research'' under Sec. 732.8 of this

part, you may subject yourself to the sanctions provided for under

the EAR, including criminal sanctions, in addition to administrative

and civil penalties for breach of contract under other law.

Question E(2): Do the Export Administration Regulations restrict

my ability to publish the results of my research?

Answer: The Export Administration Regulations are not the means

for enforcing the national security controls you have agreed to. If

such a publication violates the contract, you would be subject to

administrative, civil, and possible criminal penalties under other

law.

Section F: Commercial Consulting

Question F(1): I am a professor at a U.S. university, with

expertise in design and creation of submicron devices. I have been

asked to be a consultant for a ``third-world'' company that wishes

to manufacture such devices. Do I need a license to do so?

Answer: Quite possibly you do. Application abroad of personal

knowledge or technical experience acquired in the United States

constitutes an export of that knowledge and experience that is

subject to the Export Administration Regulations. If any part of the

knowledge or experience your export or reexport deals with

technology that requires a license under the EAR, you will need to

obtain a license or qualify for a License Exception.

Section G: Software\1\

Question G(1): Is the export or reexport of software in machine

readable code subject to the EAR when the source code for such

software is publicly available?

\1\Exporters should note that these provisions do not apply to

software controlled under the International Traffic in Arms

Regulations (e.g., certain encryption software).

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

Answer: If the source code of a software program is publicly

available, then the machine readable code compiled from the source

code is software that is publicly available and therefore not

subject to the EAR.

Question G(2): Is the export or reexport of software sold at a

price that does not exceed the cost of reproduction and distribution

subject to the EAR?

Answer: Software in machine readable code is publicly available

if it is available to a community at a price that does not exceed

the cost of reproduction and distribution. Such reproduction and

distribution costs may include variable and fixed allocations of

overhead and normal profit for the reproduction and distribution

functions either in your company or in a third party distribution

system. In your company, such costs may not include recovery for

development, design, or acquisition. In this case, the provider of

the software does not receive a fee for the inherent value of the

software.

Question G(3): Is the export or reexport of software subject to

the EAR if it is sold at a price BXA concludes in a classification

letter to be sufficiently low so as not to subject it to the EAR?

Answer: In response to classification requests, BXA may choose

to classify certain software as not subject to the EAR even though

it is sold at a price above the costs of reproduction and

distribution as long as the price is nonetheless sufficiently low to

qualify for such a classification in the judgment of BXA.

Section H: Available in a Public Library

Question H(1): Is the export or reexport of information subject

to the EAR if it is available in a library and sold through an

electronic or print service?

Answer: Electronic and print services for the distribution of

information may be relatively expensive in the marketplace because

of the value vendors add in retrieving and organizing information in

a useful way. If such information is also available in a library--

itself accessible to the public--or has been published in any way,

that information is ``publicly available'' for those reasons, and

the information itself continues not to be subject to the EAR even

though you access the information through an electronic or print

service for which you or your employer pay a substantial fee.

Question H(2): Is the export or reexport of information subject

to the EAR if the information is available in an electronic form in

a library at no charge to the library patron?

Answer: Information available in an electronic form at no charge

to the library patron in a library accessible to the public is

information publicly available even though the library pays a

substantial subscription fee for the electronic retrieval service.

Question H(3): Is the export or reexport of information subject

to the EAR if the information is available in a library and sold for

more than the cost of reproduction and distribution?

Answer: Information from books, magazines, dissertations,

papers, electronic data bases, and other information available in a

library that is accessible to the public is not subject to the EAR.

This is true even if you purchase such a book at more than the cost

of reproduction and distribution. In other words, such information

is ``publicly available'' even though the author makes a profit on

your particular purchase for the inherent value of the information.

Section I: Miscellaneous

Question I(1): The manufacturing plant that I work at is

planning to begin admitting groups of the general public to tour the

plant facilities. We are concerned that a license might be required

if the tour groups include foreign nationals. Would such a tour

constitute an export? If so, is the export subject to the EAR?

Answer: The EAR define exports and reexports of technology to

include release through visual inspection by foreign nationals of

U.S.-origin equipment and facilities. Such an export or reexport

qualifies under the ``publicly available'' provision and would not

be subject to the EAR so long as the tour is truly open to all

members of the public, including your competitors, and you do not

charge a fee that is not reasonably related to the cost of

conducting the tours. Otherwise, you will have to obtain a license,

or qualify for a License Exception, prior to permitting foreign

nationals to tour your facilities. (Sec. 732.7 of this part).

Question I(2): Is the export or reexport of information subject

to the EAR if the information is not in a library or published, but

sold at a price that does not exceed the cost of reproduction and

distribution?

Answer: Information that is not in a library accessible to the

public and that has not been published in any way, may nonetheless

become ``publicly available'' if you make it both available to a

community of persons and if you sell it at no more than the cost of

reproduction and distribution. Such reproduction and distribution

costs may include variable and fixed cost allocations of overhead

and normal profit for the reproduction and distribution functions

either in your company or in a third party distribution system. In

your company, such costs may not include recovery for development,

design, or acquisition costs of the technology or software. The

reason for this conclusion is that the provider of the information

receives nothing for the inherent value of the information.

Question I(3): Is the export or reexport of information

contributed to an electronic bulletin board subject to the EAR?

[[Page 25285]]

Answer: (1) Assume each of the following:

(i) Information is uploaded to an electronic bulletin board by a

person that is the owner or originator of the information;

(ii) That person does not charge a fee to the bulletin board

administrator or the subscribers of the bulletin board; and

(iii) The bulletin board is available for subscription to any

subscriber in a given community regardless of the cost of

subscription.

(2) Such information is ``publicly available'' and therefore not

subject to the EAR even if it is not elsewhere published and is not

in a library. The reason for this conclusion is that the bulletin

board subscription charges or line charges are for distribution

exclusively, and the provider of the information receives nothing

for the inherent value of the information.

Question I(4): Is the export or reexport of patented information

fully disclosed on the public record subject to the EAR?

Answer: Information to the extent it is disclosed on the patent

record open to the public is not subject to the EAR even though you

may use such information only after paying a fee in excess of the

costs of reproduction and distribution. In this case the seller does

receive a fee for the inherent value of the technical data; however,

the export or reexport of the information is nonetheless not subject

to the EAR because any person can obtain the technology from the

public record and further disclose or publish the information. For

that reason, it is impossible to impose export controls that deny

access to the information.

Supplement No. 2 to Part 732--Other Departments and Agencies With

Foreign Policy and National Security Based Controls

(a) Department of State. Regulations administered by the Office

of Defense Trade Controls within the Center for Defense Trade, U.S.

Department of State, govern the export and reexport of defense

articles and defense services on the U.S. Munitions List included in

the International Traffic in Arms Regulations (ITAR) (22 CFR part

121). These regulations are issued under the authority of section 38

of the Arms Export Control Act (22 U.S.C. 2778).

(b) Treasury Department, Office of Foreign Assets Control

(OFAC). Regulations administered by OFAC implement broad controls

and embargoes transactions with certain foreign countries, which

include controls on exports and reexports, as appropriate to such

countries (31 CFR part 500). These regulations are issued under a

grandfather provision in the Trading With the Enemy Act for Cuba and

North Korea (50 U.S.C. App. Section 1 et seq.), and under the

International Emergency Economic Powers Act for other countries (50

U.S.C. Section 1701, et seq.)

(c) U.S. Nuclear Regulatory Commission (NRC). Regulations

administered by NRC control the export and reexport of commodities

related to nuclear reactor vessels (10 CFR Part 110). These

regulations are issued under the authority of the Atomic Energy Act

of 1954, as amended (42 U.S.C. Part 2011 et seq.).

(d) Department of Energy (DOE). Regulations administered by DOE

control the export and reexport of technology related to the

production of special nuclear materials (10 CFR Part 810). These

regulations are issued under the authority of the Atomic Energy Act

of 1954, as amended (42 U.S.C. Part 2011 et seq.).

(e) Patent and Trademark Office (PTO). Regulations administered

by PTO provide for the export to a foreign country of unclassified

technology in the form of a patent application or an amendment,

modification, or supplement thereto or division thereof (37 CFR Part

5). BXA has delegated authority under the Export Administration Act

to the PTO to approve exports and reexports of such technology which

is subject to the EAR. Exports and reexports of such technology not

approved under PTO regulations must comply with the EAR.

Supplement No. 3 to Part 732--Calculation of Values for De Minimis

Rules

Use the following guidelines in determining values for

establishing exemptions or for submission of a request for

authorization:

(a) U.S. content value.

(1) U.S. content value is the delivered cost to the foreign

manufacturer of the U.S. origin parts, components, or materials.

(When affiliated firms have special arrangements that result in

lower than normal pricing, the cost should reflect ``fair market''

prices that would normally be charged to similar, unaffiliated

customers.)

(2) In calculating the U.S. content value, do not include parts,

components, or materials that could be exported from the United

States to the new country of destination without a license or

License Exception GBS.

(b) The foreign-made product value is the normal selling price

f.o.b. factory (excluding value added taxes or excise taxes).

PART 734--GENERAL PROHIBITIONS

Sec.

734.1 Introduction.

734.2 General prohibitions and determination of applicability.

Authority: 18 U.S.C. 2510 et seq.; 30 U.S.C. 185; 42 U.S.C.

6212; 10 U.S.C. 7429; 10 U.S.C. 7430(e); 50 U.S.C. 1710 et seq.; 22

U.S.C. 3201 et seq.; 42 U.S.C. 2139(a); 43 U.S.C. 1354; 50 U.S.C.

2401 et seq.; 46 U.S.C 466(c); E.O. 12924.

Sec. 734.1 Introduction.

A person may undertake transactions subject to the EAR without a

license or other authorization, unless the regulations affirmatively

state such a requirement. As such, if an export, reexport, or activity

is subject to the EAR, the general prohibitions contained in part 734

and the License Exceptions set forth in part 740 must be reviewed to

determine if a license is necessary. In the case of all exports from

the United States, you must document your export as described in part

762 of this subchapter regarding recordkeeping and clear your export

through the U.S. Customs Service as described in part 758 of this

subchapter regarding export clearance requirements.

(a) In this part 734 we tell you:

(1) The facts that make your proposed export, reexport, or conduct

subject to these general prohibitions, and

(2) The ten general prohibitions.

(b) Your obligations under the ten general prohibitions and under

the EAR depend in large part upon five types of information and facts

or information described in Sec. 734.2(a) of this part and upon the

general prohibitions described in Sec. 734.2(b) of this part. Note that

the ten general prohibitions contain cross-references to other parts of

this subchapter that further define the breadth of the general

prohibitions, and, for that reason, part 734 is not freestanding. In

part 736, we provide certain steps you must follow in proper order to

understand the general prohibitions and their relationship to other

parts of this subchapter.

(c) If you violate any of these ten general prohibitions, or engage

in other conduct contrary to the Export Administration Act, the EAR, or

any order, license, License Exception, or authorization issued

thereunder, as described in part 764 of this subchapter regarding

enforcement, you will be subject to any of the sanctions described in

that part.

Sec. 734.2 General prohibitions and determination of applicability.

(a) Information or facts that determine the applicability of the

general prohibitions. The following five types of facts determine your

obligations under the ten general prohibitions and the EAR generally:

(1) Destination. The country of ultimate destination for an export

or reexport (see parts 738 and 774 of this subchapter concerning the

country chart and the Commerce Control List);

(2) End-user. The ultimate end-user (see General Prohibition Four

(paragraph (b)(4) of this section) and parts 744 and 764 of this

subchapter for a reference to the list of persons you may not deal

with);

(3) End-use. The ultimate end-use (see General Prohibition Five

(paragraph (b)(5) of this section) and part 744 of this subchapter for

general end-use restrictions);

(4) Classification of the item. The classification of the item on

the Commerce Control List (see part 774 of this subchapter); and

(5) Conduct. Conduct such as contracting, financing, and freight

forwarding in support of a proliferation [[Page 25286]] project as

described in part 744 of this subchapter.

(b) General prohibitions. The following ten general prohibitions

proscribe certain exports, reexports, and other conduct, subject to the

scope of the EAR, you may not engage in unless you either have a

license from the Bureau of Export Administration (BXA) or qualify under

part 740 of this subchapter for a License Exception from each

applicable general prohibition below. The License Exceptions at part

740 of this subchapter apply only to General Prohibitions One (Exports

and Reexports in the Form Received), Two (Parts and Components

Reexports), and Three (Foreign Produced Direct Product Reexports);

however, selected License Exceptions are specifically referenced and

authorized in part 746 of this subchapter concerning embargo

destinations and other special destinations.

(1) General Prohibition One--Export and reexport controlled items

to listed countries (Exports and Reexports in the Form Received). You

may not, without a license or License Exception, export or reexport any

item subject to the EAR to another country if each of the following is

true:

(i) The item is controlled for a reason indicated in the applicable

Export Control Classification Number (ECCN).

(ii) Export to the country of destination requires a license for

the control reason as indicated on the Country Chart at part 738 of

this subchapter. (The scope of this prohibition is determined by the

correct classification of your item and the ultimate destination as

that combination is reflected on the Country Chart.)\1\

\1\The following export and reexport prohibitions are not

described on the Country Chart. The scope of this prohibition for

super computers and certain listening devices, and the country scope

for such controls is defined in the relevant ECCN. The prohibition

on exports and reexports and the related country scope for short

supply controls are in part 574 and relevant ECCNs. The prohibition

on exports concerning certain UN sanctions and other embargoes and

the related country scope of those controls are contained in part

746 and General Prohibition Six (paragraph (b)(6) of this section).

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(iii) Each License Exception described at part 740 of this

subchapter supersedes General Prohibition One if all terms and

conditions of a given License Exception are met by the exporter or

reexporter.

(2) General Prohibition Two--Reexport and export from abroad

foreign-made items incorporating more than a de minimis amount of

controlled U.S. content (Parts and Components Reexports). (i) You may

not, without a license or License Exception, export, reexport or export

from abroad any foreign-made commodity, software, or technology

incorporating U.S.-origin commodities, software, or technology

respectively that is controlled to the country of ultimate destination

if the foreign-made item meets all three of the following conditions:

(A) It incorporates more than the de minimis amount of controlled

U.S. content, as defined in Sec. 732.4 of this subchapter concerning

the scope of the EAR;

(B) It is controlled for a reason indicated in the applicable ECCN;

and

(C) Its export to the country of destination requires a license for

that control reason as indicated on the Country Chart. (The scope of

this prohibition is determined by the correct classification of your

foreign-made item and the ultimate destination, as that combination is

reflected on the country chart.)

(ii) Each License Exception described at part 740 of this

subchapter supersedes General Prohibition One if all terms and

conditions of a given License Exception are met by the exporter or

reexporter.

(3) General Prohibition Three--Reexport and export from abroad the

foreign-produced direct product of U.S. technology and software

(Foreign Produced Direct Product Reexports).

(i) Country scope of prohibition. You may not export, reexport, or

export from abroad items subject to the scope of this General

Prohibition Three to Cuba, North Korea, Libya, or a destination in

Country Group D:1 (See Supplement No. 1 to part 740 of this

subchapter).

(ii) Product scope of foreign-made items subject to prohibition.

(A) Foreign-made items are subject to this General Prohibition 3 if

they meet both of the following conditions:

(1) They are the direct product of technology or software that

requires a written assurance as a supporting document for a license or

as a precondition for the use of License Exception TSR at Sec. 740.19

of this subchapter, and

(2) They are subject to national security controls as designated on

the applicable ECCN of the Commerce Control List at part 774 of this

subchapter.

(B) Foreign-made items are also subject to this General Prohibition

3 if they are the direct product of a complete plant or any major

component of a plant if both of the following conditions are met:

(1) Such plant or component is the direct product of technology

that requires a written assurance as a supporting document for a

license or as a precondition for the use of License Exception TSR at

Sec. 740.19 of this subchapter, and

(2) Such foreign-made direct products of the plant or component are

subject to national security controls as designated on the applicable

ECCN of the Commerce Control List at part 774 of this subchapter.

(iii) License exceptions. Each License Exception described at part

740 of this subchapter supersedes this General Prohibition Three if all

terms and conditions of a given exception are met by the exporter or

reexporter.

(4) General Prohibition Four--Engage in actions prohibited by a

denial order. (i) You may not take any action that is prohibited by a

denial order issued under part 766 of this subchapter, Administrative

Enforcement Proceedings. These orders prohibit many actions in addition

to direct exports by the person denied export privileges, including

some transfers within a single country either in the United States or

abroad by other persons. You are responsible for ensuring that any of

your transactions in which a person who is denied export privileges is

involved do not violate the terms of the order. The names of persons

denied export privileges are published in the Federal Register and are

also included on the Denied Persons List, which is referenced in

Supplement No. 2 to part 764 of this subchapter, Enforcement. The terms

of the standard denial order are set forth in Supplement No. 1 to part

764. You should note that some denial orders differ from the standard

denial order. BXA may, on an exceptional basis, authorize activity

otherwise prohibited by a denial order. See Sec. 764.3(a)(3) of this

subchapter.

(ii) There are no License Exceptions described in part 740 of this

subchapter that authorize conduct prohibited by this General

Prohibition Four.

(5) General Prohibition Five--Export or reexport to prohibited end-

users or end-uses (End Use). You may not, without a license, export or

reexport any item subject to the EAR to an end-user of end-use that is

prohibited by part 744 of this subchapter.

(6) General Prohibition Six--Export or reexport to embargoed

destinations (Embargo). (i) You may not, without a license or License

Exception authorized under part 746, export or reexport any item

subject to the EAR to a country that is embargoed by the United States

or otherwise made subject to controls as both are described at part 756

of this subchapter.

(ii) License Exceptions to this General Prohibition Six are

described at part 746 of this subchapter on Embargo Destinations and

Special Destinations [[Page 25287]] and unless a License Exception is

authorized in part 746 of this subchapter the License Exceptions at

part 740 of this subchapter are not available to overcome this general

prohibition.

(7) General Prohibition Seven--Support Proliferation Activities

(U.S. Person Proliferation Activity). If you are a U.S. Person as that

term is defined at Sec. 744.6 of this subchapter, you may not perform

any financing, contracting, service, support, transportation, freight

forwarding, or employment that you know will assist in certain

proliferation activities described further at part 744 of this

subchapter. There are no License Exceptions to this General Prohibition

Seven in part 740 of this subchapter unless specifically authorized in

that part.

(8) General Prohibition Eight--In transit shipments and items to be

unladen from vessels or aircraft (Intransit). (i) Unlading and shipping

in transit. If an item to be exported or reexported would require a

license to one of the countries listed in paragraph (b)(8)(ii) of this

section, you may not ship that item on an aircraft or vessel that will

be unladen in or that will move in transit through any of those

countries en route to some other destination unless a license

specifically authorizes such transshipment or unlading.

(ii) Country scope. This General Prohibition Eight applies to

Albania, Armenia, Azerbaijan, Belarus, Bulgaria, Cambodia, Cuba,

Estonia, Georgia, Kazakhstan, Kyrgyzstan, Laos, Latvia, Lithuania,

Mongolia, North Korea, Russia, Tajikistan, Turkmenistan, Ukraine,

Uzbkeistan, Vietnam.

(9) General Prohibition Nine--Violate any order, terms, and

conditions (Orders, Terms, and Conditions). You may not violate the

orders, terms, or conditions of a license or of a License Exception

issued under or made a part of the EAR. There are no License Exceptions

to this General Prohibition Nine in part 740 of this subchapter.

(10) General Prohibition Ten--Proceed with transactions with

knowledge that a violation has occurred or is about to occur (Knowledge

Violation to Occur). You may not sell, transfer, export, reexport,

finance, order, buy, remove, conceal, store, use, loan, dispose of,

transfer, transport, forward, or otherwise service, in whole or in

part, any item subject to the EAR and exported or to be exported with

knowledge that a violation of the Export Administration Regulations,

the Export Administration Act or any order, license, License Exception,

or other authorization issued thereunder has occurred, is about to

occur, or is intended to occur. Nor may you rely upon any license or

exception after notice to you of the suspension or revocation of that

license or exception. There are no License Exceptions to this General

Prohibition Ten in part 740 of this subchapter.

PART 736--STEPS FOR DETERMINING LICENSE REQUIREMENTS

Sec.

736.1 STEP ONE: Publicly available technology and software.

736.2 STEP TWO: Ultimate country of destination and embargoed

countries.

736.3 STEP THREE: Persons denied export privileges.

736.4 STEP FOUR: Prohibited end-uses and end-users.

736.5 STEP FIVE: Classification.

736.6 STEP SIX: Reason for control and the Country Chart.

736.7 STEP SEVEN: Foreign-made items incorporating U.S.- origin

items and the de minimis rule.

736.8 STEP EIGHT: Foreign-produced direct product.

736.9 STEP NINE: Review the ``Know Your Customer'' guidance.

736.10 STEP TEN: Proliferation conduct of U.S. persons unrelated to

exports and reexports.

736.11 STEP ELEVEN: Review of order, terms, and conditions.

736.12 STEP TWELVE: Intransit.

736.13 STEP THIRTEEN: Review of the remaining general prohibitions

and License Exceptions.

736.14 STEP FOURTEEN: Miscellaneous duties.

736.15 Inapplicability of General Prohibitions.

736.16 Review of License Exceptions.

Authority: 18 U.S.C. 2510 et seq.; 30 U.S.C. 185; 42 U.S.C.

6212; 10 U.S.C. 7429; 10 U.S.C. 7430(e); 50 U.S.C. 1710 et seq.; 22

U.S.C. 3201 et seq.; 42 U.S.C. 2139(a); 43 U.S.C. 1354; 50 U.S.C.

2401 et seq.; 46 U.S.C 466(c); E.O. 12924.

Sec. 736.1 STEP ONE: Publicly available technology and software.

Determine if your technology or software is publicly available as

defined and explained at part 732 of this subchapter concerning the

scope of the EAR.

(a) If your technology or software is outside the scope of the EAR,

then you may proceed with the export.

(b) If your technology or software does not qualify as publicly

available and is therefore within the scope of the EAR, you must

consider all of the general prohibitions as described in part 734 of

this subchapter.

(c) Supplement No. 1 to part 732 of this subchapter contains

several practical examples describing the scope of publicly available

technology and software that is outside the scope of the EAR. The

examples are illustrative, not comprehensive.

Sec. 736.2 STEP TWO: Country of ultimate destination and embargoed

countries.

Determine the country of ultimate destination. If your destination

for any item is an embargoed country or other country listed in part

746 of this subchapter, you may not make the export or reexport without

a license unless you are exporting only publicly available technology

or software or unless you qualify for a License Exception described in

part 746 of this subchapter concerning embargoed destinations. You may

not use a License Exception described at part 740 of this subchapter to

overcome General Prohibition 6 (Sec. 734.2(b)(6) of this subchapter)

unless it is specifically authorized in part 746 of this subchapter.

Sec. 736.3 STEP THREE: Persons denied export privileges.

(a) Determine whether your transferee, ultimate end-user, any

intermediate consignee, and any other party to a transaction is a

person denied export privileges. (See part 764 of this subchapter).

While it is not a violation of General Prohibition Four

(Sec. 734.2(b)(4) of this subchapter) to fail to check the Denied

Persons List prior to a transfer, it is nonetheless a per se violation

of the regulations in this subchapter to deal with a denied person in

any activity that is prohibited by the terms or conditions of a denial

order.

(b) There are no License Exceptions to General Prohibition Four

(end-user) (Sec. 734.2(b)(4) of this subchapter) concerning certain

end-users described in part 744 of this subchapter. The prohibitions

concerning persons denied export privileges may be overcome only by a

specific authorization from BXA, something that is rarely granted.

Sec. 736.4 STEP FOUR: Prohibited end-uses and end-users.

(a) Review the end-uses and end-users prohibited under General

Prohibitions Four (end-user) and Five (end-use) (Sec. 734.2(b)(4) and

(b)(5) of this subchapter) as described at part 744 of this subchapter.

(b) There are no License Exceptions to General Prohibitions Four

(end-user) and Five (end-use) (Sec. 734.2(b)(4) and (b)(5) of this

subchapter) described in part 740 of this subchapter.

Sec. 736.5 STEP FIVE: Classification.

(a) You must classify your items, and you may do so on your own

without the assistance of BXA. You are responsible for doing so

correctly, and your failure to correctly classify your items does not

[[Page 25288]] relieve you of the duty to obtain a license.

(b) You have a right to request the applicable classification of

your item from BXA, and BXA has a duty to provide that classification

to you. For further information on how to obtain classification

assistance from BXA, see part 748 of this subchapter for procedures and

contact persons.

Sec. 736.6 STEP SIX: Reason for control and the country chart.

(a) Reason for control within the Export Control Classification

Number (ECCN). The applicable ECCN will indicate the reason or reasons

for control for items within that ECCN. For example, ECCN 6A07 is

controlled for both national security and missile technology reasons.

(b) Reason for control within the country chart. Once you determine

the reason for control from the proper ECCN, look up your country of

destination on the country chart.

(1) A check mark in the box or boxes for the relevant country and

reason(s) for control indicates that a license is required for General

Prohibitions One (Exports and Reexports in the Form Received), Two

(Parts and Components Reexports), and Three (Foreign Produced Direct

Product Reexports). (See Sec. 734.2(b)(1), (b)(2), and (b)(3) of this

subchapter).

(2) If one or more boxes have a check, a license is required unless

you qualify for a License Exception under part 740 of this subchapter.

If a box does not have a mark for your destination in one relevant

reason for control, a license is not required under the CCL and the

country chart unless another box is marked as requiring a license for

another reason for control identified in the appropriate ECCN.

(3) Additional controls may apply to your export. You must go on to

steps Seven and Eight described in Secs. 736.7 and 736.8 of this Part

to identify whether additional limits described in Sec. 734.2,

paragraphs (b)(2) (foreign made items incorporating U.S.-origin parts

and components) and (b)(3) (the foreign produced direct product of U.S.

technology and software) of this subchapter apply.

Sec. 736.7 STEP SEVEN: Foreign-made items incorporating U.S.-origin

items and the de minimis rule.

If your foreign-made item is described in an entry on the CCL and

the country chart requires a license to your export or reexport

destination, you must determine whether the controlled U.S.-origin

commodities, software, or technology incorporated into the foreign-made

item exceeds the de minimis level applicable to the ultimate

destination of the foreign-made item, as follows:

(a) A 10% de-minimis level to embargoed and terrorist-supporting

countries; or

(b) A 25% de-minimis level to all other countries.

(c) For guidance on how to calculate the U.S. controlled content,

refer to part 732 of this subchapter.

Sec. 736.8 STEP EIGHT: Foreign produced direct product.

(a) If your foreign produced item is described in an entry on the

CCL and the country chart requires a license to your export or reexport

destination for national security reasons, you must determine whether

your item is subject to General Prohibition Three (Foreign Produced

Direct Product Reexports) (Sec. 734.2(b)(3) of this subchapter). Your

item is subject to this general prohibition if your transaction meets

each of the following conditions:

(1) Country scope of prohibition. Your export or reexport

destination for the direct product is Cuba, North Korea, Libya, or a

destination in Country Group D:1 (see Supplement No. 1 to part 740 of

this subchapter) (reexports of foreign produced direct products

exported to other destinations are not subject to General Prohibition

Three);

(2) Scope of technology or software used to create direct products

subject to the prohibition. Technology or software that was used to

create the foreign produced direct product, and such technology or

software that was subject to the EAR and required a written assurance

as a supporting document for a license or as a precondition for the use

of License Exception TSR at Sec. 740.19 of this subchapter (reexports

of foreign produced direct products created with other technology and

software are not subject to General Prohibition Three); and

(3) Scope of direct products subject to the prohibition. The

foreign produced direct products are subject to national security

controls as designated on the proper ECCN of the Commerce Control List

at part 774 of this subchapter (reexports of foreign produced direct

products not subject to national security controls are not subject to

General Prohibition Three).

(b) License Exceptions. Each License Exception described at part

740 of this subchapter overcomes this General Prohibition Three

(foreign produced direct product) if all terms and conditions of a

given exception are met by the exporter or reexporter.

Sec. 736.9 STEP NINE: Review the ``Know Your Customer'' Guidance.

License requirements under the regulations in this subchapter are

determined solely by the classification, end-use, end-user, ultimate

destination, and conduct of U.S. persons. Supplement No. 3 to part 744

of this subchapter is intended to provide helpful guidance regarding

the process for the evaluation of information about customers, end

uses, and end users.

Sec. 736.10 STEP TEN: Proliferation conduct of U.S. persons unrelated

to exports and reexports.

(a) First, review the scope of activity prohibited by General

Prohibition Seven (U.S. Person Proliferation Activity)

(Sec. 734.2(b)(7) of this subchapter) as that activity is described in

Sec. 744.6 of this subchapter. Keep in mind that such activity is not

limited to exports and reexports and is not limited to items subject to

General Prohibition One (exports and reexports in the form received),

Two (parts and components reexports), and Three (foreign produced

direct product reexports) (Sec. 734.2(b)(1), (b)(2), and (b)(3) of this

subchapter). Moreover, such activity extends to services and dealing in

wholly foreign-origin items in support of the specified proliferation

activity.

(b) Second, review the definition of ``U.S. Person.''

Sec. 736.11 STEP ELEVEN: Review of order, terms, and conditions.

Review the orders, terms, and conditions applicable to your

transaction. Terms and conditions are frequently contained in licenses.

In addition, the ten general prohibitions (Sec. 734.2(b)(1) through

(b)(10) of this subchapter) and the License Exceptions (part 740 of

this subchapter) impose terms and conditions or limitations on your

proposed transactions and use of License Exceptions. A given license or

License Exception may not be used unless each relevant term or

condition is met.

Sec. 736.12 STEP TWELVE: Intransit.

Shippers and operators of vessels or aircraft should review General

Prohibition Ten to determine the countries in which you may not unladen

items or ship them intransit.

Sec. 736.13 STEP THIRTEEN: Review of the remaining general

prohibitions and License Exceptions.

After completion of Steps described in this part 736, and review of

all ten general prohibitions, including cross-referenced regulations in

this subchapter, you will know which, if any, of the ten general

prohibitions in [[Page 25289]] part 734 of this subchapter apply to you

and your contemplated transaction or activity.

Sec. 736.14 STEP FOURTEEN: Miscellaneous duties.

Sections 736.1 through 736.13 of this part are useful in

determining the license requirements that apply to you. Other portions

of the EAR impose other duties and requirements. Some of them are:

(a) Requirements relating use of a license in Sec. 758.2 of this

subchapter.

(b) Requirements pertaining to the preparation and use of a

Shipper's Export Declaration in Sec. 758.3 of this subchapter.

(c) Duties of carriers, forwarders, and exporters and others to

take specific steps and prepare and deliver certain documents to assure

that items subject to the regulations in this subchapter are delivered

to the destination to which they are licensed or authorized by a

License Exception or some other provision of the regulations in

Secs. 758.4 through 785.6 of this subchapter.

(d) Duty of Carriers to return or unload shipments at the direction

of U.S. Government officials (see Sec. 758.8 of this subchapter).

(e) Specific duties imposed on parties to special comprehensive

licenses by part 752 of this subchapter.

(f) Recordkeeping requirements imposed by Part 762 of this

subchapter.

(g) Part 764 requirements to disclose facts that may come to your

attention after you file a license application or make other statement

to the government concerning a transaction or proposed transaction that

is subject to the EAR.

(h) Certain duties imposed by Part 760 of this subchapter on

parties who receive requests to take actions related to foreign

boycotts and prohibits certain actions relating to those boycotts.

Sec. 736.15 Inapplicability of general prohibitions.

If none of the ten general prohibitions described in part 734 of

this subchapter apply to your export, reexport or conduct, you may

proceed without a license and you need not and should not examine part

740 of this subchapter for License Exceptions.

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