Establishment of New General License G-BETA for Exports of Certain Beta Test Software

DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 771 and 779

[Docket No. 950407090-5090-01]

RIN 0694-AB18

Establishment of New General License G-BETA for Exports of

Certain Beta Test Software

AGENCY: Bureau of Export Administration, Commerce.

ACTION: Interim rule.

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SUMMARY: This rule amends the Export Administration Regulations (EAR)

by establishing a new General License G-BETA for certain exports of

beta test software under the jurisdiction of the Department of

Commerce. Under the provisions of this new General License, beta test

software programs may be exported to all destinations except Country

Groups S and Z, Iran, Iraq, Sudan, and Syria. Exporters are advised

that certain restrictions apply, and should consult the EAR before

using General License G-BETA.

This new General License eligibility will greatly reduce the number

of validated license applications for certain software intended for

mass-market distribution.

DATES: This rule is effective April 13, 1995. Comments must be received

by May 30, 1995.

ADDRESSES: Written comments (six copies) should be sent to Nancy Crowe,

Bureau of Export Administration, Department of Commerce, P.O. Box 273,

Washington, DC 20044.

FOR FURTHER INFORMATION CONTACT: Nancy Crowe, Regulatory Policy

Division, Office of Exporter Services, Bureau of Export Administration,

Telephone: (202) 482-2440.

SUPPLEMENTARY INFORMATION: This rule amends Part 771 of the Export

Administration Regulations (EAR) by establishing a new General License

G-BETA for certain exports of beta test software. This change will

allow exports, under certain conditions, of software controlled by the

Department of Commerce on the Commerce Control List (Supplement No. 1

to Part 799.1 of the EAR), and under Commerce licensing jurisdiction,

which would otherwise require a validated license to all destinations

except Country Groups S and Z, Iran, Iraq, Sudan, and Syria.

This rule will allow shipment under General License G-BETA of beta

test software programs that: (a) Are intended for export and reexport

under the provisions of the General Software Note (Supplement No. 2 to

Part 799.1 of the EAR) after completion of testing; (b) are provided

free-of-charge or at a price that does not exceed the cost of

reproduction and distribution; and (c) are designed for user-

installation. In addition, the exporter must obtain a statement from

each testing consignee prior to shipment certifying that the beta test

software will only be used for beta testing purposes, and will not be

rented, leased, sold, sublicensed, assigned, or otherwise transferred.

Further, the statement must certify that the testing consignee will not

transfer or export any product, process, or service that is the direct

product of the beta test software. Software shipped under General

License G-BETA must be destroyed abroad or returned to the exporter

within 30 days of the end of the beta test period as defined by the

software producer or, if the software producer does not define a test

period, within 30 days of completion of the consignee's role in the

test.

The following is a brief description of the development of this

rule. In the Fall

[[Page 18732]]

of 1994, BXA hosted a large seminar for exporters. At that meeting, BXA

invited the exporting community to provide input on administrative

changes that might be made to the EAR without the passage of new

legislation. In response to that invitation, several of the major

exporters of mass market software provided suggestions on a new general

license to authorize the export of software for beta testing. BXA also

gathered the views of industry on a new general license for beta test

software through BXA's Telecommunications Technical Advisory Committee,

Regulations & Procedures Technical Advisory Committee, and Computer

Systems Technical Advisory Committee. The industry views served as a

basis for BXA's development of a regulation on General License G-BETA.

BXA shared with industry its view of the possible changes in the

draft regulation and sought information from certain software exporters

to determine the industry's best practices for exporting software to

Beta testers. For example, BXA collected samples of end-use clauses

regularly used by software producers for commercial purposes. BXA then

shaped General License G-BETA so that certifications required under the

rule are consistent with the standard practices of many members of the

industry. This has the benefit of achieving the objectives of the

export control system with the least intrusive impact on the exporting

community. The industry input provided by the advisory committees and

by the companies was highly valuable to BXA in developing General

License G-BETA.

This new General License eligibility will reduce the number of

validated license applications for certain software intended for

distribution to the general public.

Rulemaking Requirements

1. This interim rule has been determined to be not significant for

purposes of E. O. 12866.

2. This rule involves collections of information subject to the

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

collections have been approved by the Office of Management and Budget

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

3. This rule does not contain policies with Federalism implications

sufficient to warrant preparation of a Federalism assessment under

Executive Order 12612.

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

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

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

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

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

has to be or will be prepared.

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

553) requiring notice of proposed rulemaking, the opportunity for

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

because this regulation involves a military and foreign affairs

function of the United States. Further, no other law requires that a

notice of proposed rulemaking and an opportunity for public comment be

given for this rule.

However, because of the importance of the issues raised by these

regulations, this rule is issued in interim form and comments will be

considered in the development of final regulations. Accordingly, the

Department encourages interested persons who wish to comment to do so

at the earliest possible time to permit the fullest consideration of

their views.

The period for submission of comments will close May 30, 1995. The

Department will consider all comments received before the close of the

comment period in developing final regulations. Comments received after

the end of the comment period will be considered if possible, but their

consideration cannot be assured. The Department will not accept public

comments accompanied by a request that a part or all of the material be

treated confidentially because of its business proprietary nature or

for any other reason. The Department will return such comments and

materials to the person submitting the comments and will not consider

them in the development of final regulations. All public comments on

these regulations will be a matter of public record and will be

available for public inspection and copying. In the interest of

accuracy and completeness, the Department requires comments in written

form.

Oral comments must be followed by written memoranda, which will

also be a matter of public record and will be available for public

review and copying. Communications from agencies of the United States

Government or foreign governments will not be made available for public

inspection.

The public record concerning these regulations will be maintained

in the Bureau of Export Administration Freedom of Information Records

Inspection Facility, Room 4525, Department of Commerce, 14th Street and

Pennsylvania Avenue, N.W., Washington, DC 20230. Records in this

facility, including written public comments and memoranda summarizing

the substance of oral communications, may be inspected and copied in

accordance with regulations published in Part 4 of Title 15 of the Code

of Federal Regulations. Information about the inspection and copying of

records at the facility may be obtained from Margaret Cornejo, Bureau

of Export Administration Freedom of Information Officer, at the above

address or by calling (202) 482-5653.

List of Subjects

15 CFR Part 771

Exports, Reporting and recordkeeping requirements.

15 CFR Part 779

Computer technology, Exports, Reporting and recordkeeping

requirements, Science and technology.

Accordingly, Parts 771 and 779 of the Export Administration

Regulations (15 CFR Parts 730-799) are amended as follows:

PART 771--[AMENDED]

1. The authority citation for 15 CFR Part 771 continues to read as

follows:

Authority: 50 U.S.C. App. 5, as amended; Pub. L. 264, 59 Stat.

619 (22 U.S.C. 287c), as amended; Pub. L. 90-351, 82 Stat. 197 (18

U.S.C. 2510 et seq.), as amended; sec. 101, Pub. L. 93-153, 87 Stat.

576 (30 U.S.C. 185), as amended; sec. 103, Pub. L. 94-163, 89 Stat.

877 (42 U.S.C. 6212), as amended; secs. 201 and 201(11)(e), Pub. L.

94-258, 90 Stat. 309 (10 U.S.C. 7420 and 7430(e)), as amended; Pub.

L. 95-223, 91 Stat. 1626 (50 U.S.C. 1701 et seq.); Pub. L. 95-242,

92 Stat. 120 (22 U.S.C. 3201 et seq. and 42 U.S.C. 2139a); sec. 208,

Pub. L. 95-372, 92 Stat. 668 (43 U.S.C. 1354); Pub. L. 96-72, 93

Stat. 503 (50 U.S.C. App. 2401 et seq.), as amended; sec. 125, Pub.

L. 99-64, 99 Stat. 156 (46 U.S.C. 466c); Pub. L. 102-484, 106 Stat.

2575 (22 U.S.C. 6004); E.O. 11912 of April 13, 1976 (41 FR 15825,

April 15, 1976); E.O. 12002 of July 7, 1977 (42 FR 35623, July 7,

1977), as amended; E.O. 12058 of May 11, 1978 (43 FR 20947, May 16,

1978); E.O. 12214 of May 2, 1980 (45 FR 29783, May 6, 1980); E.O.

12851 of June 11, 1993 (58 FR 33181, June 15, 1993); E.O. 12867 of

September 30, 1993 (58 FR 51747, October 4, 1993); E.O 12918 of May

26, 1994 (59 FR 28205, May 31, 1994); E.O. 12924 of August 19, 1994

(59 FR 43437 of August 23, 1994); and E.O. 12938 of November 14,

1994 (59 FR 59099 of November 16, 1994)

PART 779--[AMENDED]

2. The authority citation for 15 CFR Part 779 continues to read as

follows:

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

seq.), as amended; Pub. L. 95-223, 91 Stat. 1626 (50 U.S.C. 1701 et

seq.); Pub. L. 95-242, 92 Stat. 120 (22 U.S.C. 3201 et seq. and 42

U.S.C. 2139a); Pub. L. 96-72,

[[Page 18733]]

93 Stat. 503 (50 U.S.C. App. 2401 et seq.), as amended; Pub. L. 102-

484, 106 Stat. 2575 (22 U.S.C. 6004); E.O. 12002 of July 7, 1977 (42

FR 35623, July 7, 1977), as amended; E.O. 12058 of May 11, 1978 (43

FR 20947, May 16, 1978); E.O. 12214 of May 2, 1980 (45 FR 29783, May

6, 1980); E.O. 12730 of September 30, 1990 (55 FR 40373, October 2,

1990), as continued by Notice of September 25, 1992 (57 FR 44649,

September 28, 1992); E.O. 12924 of August 19, 1994 (59 FR 43437,

August 23, 1994); and E.O. 12938 of November 14, 1994 (59 FR 59099

of November 16, 1994).

PART 771--[AMENDED]

3. Part 771 is amended by adding a new Sec. 771.27 to read as

follows:

Sec. 771.27 General license G-BETA; Exports of beta test software.

(a) Scope. A General License designated G-BETA is established

subject to the provisions of this section authorizing exports and

reexports to eligible countries of beta test software intended for

distribution to the general public.

(b) Eligible countries. The countries that are eligible to receive

exports and reexports under this General License are all countries

except those listed in Country Groups S and Z, Iran, Iraq, Sudan, and

Syria.

(c) Eligible software. All software that is controlled by the

Commerce Control List (see Supplement No. 1 to Part 799.1 of this

subchapter), and under Commerce licensing jurisdiction, is eligible for

export and reexport under General License G-BETA, subject to the

restrictions set forth in this section.

(d) Conditions for use. Any beta test software program may be

exported or reexported to eligible countries if all of the conditions

under this section are met:

(1) The software producer intends to market the software to the

general public after completion of the beta testing, as described in

the General Software Note found in Supplement No. 2 to Part 799.1 of

this subchapter;

(2) The software producer provides the software to the testing

consignee free-of-charge or at a price that does not exceed the cost of

reproduction and distribution; and

(3) The software is designed for installation by the end-user

without further substantial support from the supplier.

(e) Importer statement. Prior to shipping any eligible software

under General License G-BETA, the exporter or reexporter must obtain

the following statement from the testing consignee, which may be

included in a contract, non-disclosure agreement, or other document

that identifies the importer, the software to be exported, the country

of destination, and the testing consignee:

We certify that this beta test software will only be used for

beta testing purposes, and will not be rented, leased, sold,

sublicensed, assigned, or otherwise transferred. Further, we certify

that we will not transfer or export any product, process, or service

that is the direct product of the beta test software.

(f) Use limitations. Only testing consignees that provide the

importer statement required by paragraph (e) of this section may

execute any software received under General License G-BETA.

(g) Return or disposal of software. All beta test software exported

under General License G-BETA must be destroyed abroad or returned to

the exporter within 30 days of the end of the beta test period as

defined by the software producer or, if the software producer does not

define a test period, within 30 days of completion of the consignee's

role in the test. Among other methods, this requirement may be

satisfied by a software module that will destroy the software and all

its copies at or before the end of the beta test period.

PART 779--[AMENDED]

4. Part 779.2 is amended in the last sentence by revising the

phrase ``exports to Canada7,8'' to read ``exports to

Canada7,8, and exports of beta test software eligible for General

License G-BETA.''.

Dated: April 10, 1995.

Sue E. Eckert,

Assistant Secretary for Export Administration.

[FR Doc. 95-9157 Filed 4-12-95; 8:45 am]

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