Revisions to the Export Administration Regulations: License Exceptions

DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 732, 736, 740, 742, 744, 746, 748, 750, 752, 758, and

770

[Docket No. 961122325-6325-01]

RIN 0694-AB51

Revisions to the Export Administration Regulations: License

Exceptions

AGENCY: Bureau of Export Administration, Commerce.

ACTION: Final rule.

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SUMMARY: This final rule revises the Export Administration Regulations

(EAR) by reorganizing those License Exceptions that are referenced on

the Commerce Control List. These License Exceptions had been bundled

together in a single section, bearing a group symbol to be used for

export clearance purposes. This rule splits the list-based License

Exceptions into separate sections, each with its own clearance symbol.

This rule makes conforming changes throughout the EAR. Finally, this

rule makes corrections and clarifications to certain sections of the

EAR affected by the changes to the License Exceptions.

DATES: This rule is effective December 4, 1996.

FOR FURTHER INFORMATION CONTACT: Hillary Hess, Office of Exporter

Services, Bureau of Export Administration, Telephone: (202) 482-2440.

SUPPLEMENTARY INFORMATION:

Background

On March 25, 1996, the Bureau of Export Administration (BXA)

published an interim rule that revised the entire EAR (61 FR 12714).

Prior to that date, on May 11, 1995, BXA had published a proposed

version of this comprehensive revision (60 FR 25267), and public

comments on that proposed rule significantly helped shape the interim

rule. Public comments on the proposed rule indicated that the number of

License Exceptions was too high and generally supported combining

similar License Exceptions. In response to these comments, BXA

consolidated single License Exceptions into ``groupings.'' Exporters

used the grouping symbol as a certification on their shipping

documents; each single License Exception also bore a symbol, for

optional use in recordkeeping and ease of distinguishing among separate

sets of provisions.

Public comments on the interim rule, however, generally contained

objections to the consolidation of those License Exceptions found on

the Commerce Control List (CCL). These License Exceptions included the

following: Limited Value Shipments (LVS), Shipments to Group B

Countries (GBS), Civil End-users (CIV), Technology and Software under

Restriction (TSR), and Computers (CTP); they were consolidated into the

``list-based'' License Exception section and exporters shipping under

any of the five used the grouping symbol ``LST'' for export clearance

purposes. Many exporters with automated processes found that using a

grouping symbol added an additional step to their programs; others

simply found using the grouping more cumbersome. While groupings of the

other, more transaction-based License Exceptions did not elicit the

same objections, exporters indicated that having additional acronyms

for optional recordkeeping use, but not for export clearance, was more

confusing than convenient.

Consequently, this rule splits or ``debundles'' the list-based

License

[[Page 64273]]

Exceptions, putting each in its own section. Each License Exception

symbol for export clearance documents matches that on the CCL (i.e.,

LVS); the grouping symbol ``LST'' disappears. Other groupings remain

unchanged, except that this rule removes any acronyms that are not used

for clearance purposes. This rule also drops the term ``grouping'' in

favor of calling each section a License Exception. Specific sets of

terms and conditions, formerly referred to as ``License Exceptions,''

are termed ``provisions.'' Any references throughout the EAR to meeting

all terms and conditions of License Exceptions should be understood to

mean meeting all applicable terms and conditions.

A License Exception may contain one, two, or more sets of terms and

conditions; and to use a given License Exception you must meet all the

terms and conditions of one such set. For example, if you meet all the

terms and conditions of paragraph 740.5(a) of the EAR for One-for-One

Replacement of Parts, you may export or reexport under that paragraph

even though you do not meet all the terms and conditions of paragraph

740.5(b) of the EAR for Servicing and Replacement. The correct symbol

for use on a required SED in this case is RPL. As an additional

example, if you meet all the terms and conditions of paragraph 740.8(d)

of the EAR for the General Software Note and mass market software, you

may export or reexport under that paragraph even though you do not meet

all the terms and conditions of paragraph 740.8(a) of the EAR for

Operation Technology and Software, paragraph 740.8(b) of the EAR for

Sales Technology, or paragraph 740.8(c) of the EAR for Software

Updates.

Finally, this rule makes certain corrections and clarifications to

sections of the EAR affected by the changes to the License Exceptions

part. This rule clarifies certain provisions on the availability of

License Exceptions LVS, GBS, CIV, and TSR. This rule removes Laos and

Cambodia from Computer Tier 2 and adds them to Computer Tier 3 in

License Exception CTP; adds Hong Kong, New Zealand, and Taiwan to the

list of countries that are defined as ``cooperating'' for purposes of

License Exception GOV; changes Country Group A:4 to A:1, Iceland, or

New Zealand in License Exception TMP; adds Iceland to the list of

countries eligible to receive operation and sales technology and

software even when that technology or software pertains to otherwise

restricted nuclear end-uses in Sec. 744.2; and adds CTP to the list of

those License Exceptions requiring a Destination Control Statement in

Sec. 758.6. This rule also corrects certain cross-references that were

incorrect in the March 25 rule.

Although the Export Administration Act (EAA) expired on August 20,

1994, the President invoked the International Emergency Economic Powers

Act and continued in effect, to the extent permitted by law, the

provisions of the EAA and the EAR in Executive Order 12924 of August

19, 1994, as extended by the President's notice of August 15, 1995 (60

FR 42767) and August 14, 1996 (61 FR 42527).

Rulemaking Requirements

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

purposes of Executive Order 12866.

2. Notwithstanding any other provision of law, no person is

required to respond to nor shall a person be subject to a penalty for

failure to comply with a collection of information subject to the

requirements of the Paperwork Reduction Act unless that collection of

information displays a currently valid OMB Control Number. 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

0694-0023, 0694-0029, and 0694-0088.

3. This rule does not contain policies with Federalism implications

sufficient to warrant preparation of a Federalism assessment under

Executive Order 12612.

4. 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. Section 13(b) of the EAA, cite, does not

require that this rule be published in proposed form because this rule

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

notice of proposed rulemaking and an opportunity for public comment be

given for this rule. Because a notice of proposed rulemaking and an

opportunity for public comment are not required to be given for this

rule by 5 U.S.C. 553, or by any other law, the analytical requirements

of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., are

inapplicable.

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

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

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

Hess, Regulatory Policy Division, Office of Exporter Services, Bureau

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

Washington, DC 20044.

List of Subjects

15 CFR Parts 732, 740, 748, 750, 752 and 758

Administrative practice and procedure, Exports, Foreign trade,

Reporting and recordkeeping requirements.

15 CFR Parts 736, 742 and 770

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.

Accordingly, the Export Administration Regulations (15 CFR parts

730-799A) are amended as follows:

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

follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;

E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; Notice of August

15, 1995 (60 FR 42767, August 17, 1995); and Notice of August 14,

1996 (61 FR 42527).

2. The authority citation for 15 CFR part 736 continues to read as

follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;

E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; E.O. 12938, 59

FR 59099, 3 CFR, 1994 Comp., p. 950; Notice of August 15, 1995 (60

FR 42767, August 17, 1995; and Notice of August 14, 1996 (61 FR

42527).

3. The authority citation for 15 CFR part 740 continues to read as

follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;

E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; Notice of August

15, 1995 (60 FR 42767, August 17, 1995); and Notice of August 14,

1996 (61 FR 42527).

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

follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;

18 U.S.C. 2510 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a;

E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58

FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12924, 59 FR 43437, 3 CFR,

1994 Comp., p. 917; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p.

950; Notice of August 15, 1995 (60 FR 42767, August 17, 1995); and

Notice of August 14, 1996 (61 FR 42527).

5. The authority citation for 15 CFR part 744 continues to read as

follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;

22 U.S.C. 3201 et seq.;

[[Page 64274]]

42 U.S.C. 2139a; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179;

E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12924, 59

FR 43437, 3 CFR, 1994 Comp., p. 917; E.O. 12938, 59 FR 59099, 3 CFR,

1994 Comp., p. 950; Notice of August 15, 1995 (60 FR 42767, August

17, 1995); and Notice of August 14, 1996 (61 FR 42527).

6. The authority citation for 15 CFR part 746 continues to read as

follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;

22 U.S.C. 287c; 22 U.S.C. 6004; E.O. 12918, 59 FR 28205, 3 CFR, 1994

Comp., p. 899; E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917;

Notice of August 15, 1995 (60 FR 42767, August 17, 1995); and Notice

of August 14, 1996 (61 FR 42527).

7. The authority citation for 15 CFR part 748 continues to read as

follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;

E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; Notice of August

15, 1995 (60 FR 42767, August 17, 1995); and Notice of August 14,

1996 (61 FR 42527).

8. The authority citation for 15 CFR part 750 continues to read as

follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;

E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; Notice of August

15, 1995 (60 FR 42767, August 17, 1995); E.O. 12981, 60 FR 62981;

and Notice of August 14, 1996 (61 FR 42527).

9. The authority citation for 15 CFR part 752 continues to read as

follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;

E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; Notice of August

15, 1995 (60 FR 42767, August 17, 1995); and Notice of August 14,

1996 (61 FR 42527).

10. The authority citation for 15 CFR part 758 continues to read as

follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;

E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; Notice of August

15, 1995 (60 FR 42767, August 17, 1995); and Notice of August 14,

1996 (61 FR 42527).

11. The authority citation for 15 CFR part 770 continues to read as

follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;

E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; Notice of August

15, 1995 (60 FR 42767, August 17, 1995); and Notice of August 14,

1996 (61 FR 42527).

PART 732--[AMENDED]

Sec. 732.2 [Amended]

12. In Sec. 732.2, paragraph (f)(1)(ii) is amended by revising the

reference to ``License Exception TSR at Sec. 740.3(d) of the EAR'' to

read ``License Exception TSR in Sec. 740.6 of the EAR''.

Sec. 732.3 [Amended]

13. In Sec. 732.3, paragraph (f)(1)(ii) is amended by revising the

reference to ``License Exception TSR described Sec. 740.19 of the EAR''

to read ``License Exception TSR in Sec. 740.6 of the EAR''.

14. Section 732.4 is amended by revising paragraph (b)(3)(iii) to

read as follows:

Sec. 732.4 Steps regarding License Exceptions.

* * * * *

(b) * * *

(3) * * *

(iii) License Exceptions TMP, RPL, BAG, AVS, GOV, and TSU authorize

exports notwithstanding the provisions of the CCL. List-based License

Exceptions (LVS, GBS, CIV, TSR, and CTP) are available only to the

extent specified on the CCL. Part 740 of the EAR provides authorization

for reexports only to the extent each License Exception expressly

authorizes reexports. License Exception APR authorizes reexports only.

* * * * *

15. Section 732.5 is amended by revising paragraph (a)(2) to read

as follows:

Sec. 732.5 Steps regarding Shipper's Export Declaration, Destination

Control Statements, recordkeeping, license applications, and other

requirements.

(a) * * *

(2) License Exception symbol. You must enter on any required SED

the letter code (e.g., LVS, TMP) of the License Exceptions under which

you are exporting. In the case of License Exceptions LVS, GBS, and CIV,

the ECCN of the item being exported must also be entered when an SED is

required. Please refer to Sec. 758.3 of the EAR for detailed

information on use of SEDs.

* * * * *

PART 736--[AMENDED]

16. Section 736.2 is amended by revising paragraphs

(b)(3)(ii)(A)(1) and (b)(3)(ii)(B)(1) to read as follows:

Sec. 736.2 General prohibitions and determination of applicability.

* * * * *

(b) * * *

(3) * * *

(ii) * * *

(A) * * *

(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 in Sec. 740.6 of

the EAR, and

* * * * *

(B) * * *

(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 in

Sec. 740.6 of the EAR, and

* * * * *

PART 740--[AMENDED]

17. Part 740 is amended:

a. By revising Sec. 740.1, paragraphs (c) and (d) (1)

b. By revising Sec. 740.2, paragraphs (a)(5) and (a)(6);

c. By revising Sec. 740.3;

d. By redesignating Secs. 740.4 through 740.11 as Secs. 740.8

through 740.15;

e. By adding new Secs. 740.4 through 740.7;

f. By revising newly designated Secs. 740.8 through 740.12.

Sec. 740.1 Introduction.

* * * * *

(c) License Exception symbols. Each License Exception bears a three

letter symbol that will be used for export clearance purposes (see

paragraph (d) of this section).

(d) Shipper's Export Declaration--(1) Clearing exports under

License Exceptions. You must enter on any required Shipper's Export

Declaration (SED) the letter code (e.g., LVS, TMP) of the License

Exception(s) under which you are exporting. In the case of License

Exceptions LVS, GBS, and CIV, the ECCN of the item being exported must

also be entered. Please refer to Sec. 758.3 of the EAR for the use of

SEDs.

* * * * *

Sec. 740.2 Restrictions on all License Exceptions.

(a) * * *

(5) The item is for surreptitious interception of wire or oral

communications controlled under ECCN 5A980, unless you are a U.S.

Government agency (see Sec. 740.10(b)(2)(ii) of this part, Governments

(License Exception GOV)).

(6) The commodity you are shipping is a specially designed crime

control and detection instrument or equipment as described in

Sec. 742.7 of the EAR and you are not shipping to Iceland, New Zealand,

or countries listed in Country Group A:1 (see Supplement No. 1 to part

740), unless the shipment is authorized under License Exception BAG,

Sec. 740.13(e) of this part (shotguns and shotgun shells).

* * * * *

Sec. 740.3 Shipments of Limited Value (LVS).

(a) Scope. License Exception LVS authorizes the export and reexport

in a single shipment of eligible commodities as identified by ``LVS -

$(value limit)'' on the CCL.

[[Page 64275]]

(b) Eligible Destinations. This License Exception is available for

all destinations in Country Group B (see Supplement No. 1 to part 740),

provided that the net value of the commodities included in the same

order and controlled under the same ECCN entry on the CCL does not

exceed the amount specified in the LVS paragraph for that entry.

(c) Definitions--(1) Order. The term ``order'' as used in this

Sec. 740.3 means a communication from a person in a foreign country, or

that person's representative, expressing an intent to import

commodities from the exporter. Although all of the details of the order

need not be finally determined at the time of export, terms relating to

the kinds and quantities of the commodities to be exported, as well as

the selling prices of these commodities, must be finalized before the

goods can be exported under License Exception LVS.

(2) Net value: for LVS shipments. The actual selling price of the

commodities that are included in the same order and are controlled

under the same entry on the CCL, less shipping charges, or the current

market price of the commodities to the same type of purchaser in the

United States, whichever is the larger. In determining the actual

selling price or the current market price of the commodity, the value

of containers in which the commodity is being exported may be excluded.

The value for LVS purposes is that of the controlled commodity that is

being exported, and may not be reduced by subtracting the value of any

content that would not, if shipped separately, be subject to licensing.

Where the total value of the containers and their contents must be

shown on Shipper's Export Declarations under one Schedule B Number, the

exporter, in effecting a shipment under this License Exception, must

indicate the ``net value'' of the contained commodity immediately below

the description of the commodity.

(3) Single shipment. All commodities moving at the same time from

one exporter to one consignee or intermediate consignee on the same

exporting carrier even though these commodities will be forwarded to

one or more ultimate consignees. Commodities being transported in this

manner will be treated as a single shipment even if the commodities

represent more than one order or are in separate containers.

(d) Additional eligibility requirements and restrictions--(1)

Eligible orders. To be eligible for this License Exception, orders must

meet the following criteria:

(i) Orders must not exceed the applicable ``LVS'' dollar value

limits. An order is eligible for shipment under LVS when the ``net

value'' of the commodities controlled under the same entry on the CCL

does not exceed the amount specified in the ``LVS'' paragraph for that

entry. An LVS shipment may include more than one eligible order.

(ii) Orders may not be split to meet the applicable LVS dollar

limits. An order that exceeds the applicable LVS dollar value limit may

not be misrepresented as two or more orders, or split among two or more

shipments, to give the appearance of meeting the applicable LVS dollar

value limit. However an order that meets all the LVS eligibility

requirements, including the applicable LVS dollar value limit, may be

split among two or more shipments.

(iii) Orders must be legitimate. Exporters and consignees may not,

either collectively or individually, structure or adjust orders to meet

the applicable LVS dollar value limits.

(2) Restriction on annual value of LVS orders. The total value of

exports per calendar year to the same ultimate or intermediate

consignee of commodities classified under a single ECCN may not exceed

12 times the LVS value limit for that ECCN; however, there is no

restriction on the number of shipments provided that value is not

exceeded. This annual value limit applies to shipments to the same

ultimate consignee even though the shipments are made through more than

one intermediate consignee. There is no restriction on the number of

orders that may be included in a shipment, except that the annual value

limit per ECCN must not be exceeded.

(3) Orders where two or more LVS dollar value limits apply. An

order may include commodities that are controlled under more than one

entry on the CCL. In this case, the net value of the entire order may

exceed the LVS dollar value for any single entry on the CCL. However,

the net value of the commodities controlled under each ECCN entry shall

not exceed the LVS dollar value limit specified for that entry.

Example to paragraph (d)(3): An order includes commodities

valued at $8,000. The order consists of commodities controlled under

two ECCN entries, each having an LVS value limit of $5000.

Commodities in the order controlled under one ECCN are valued at

$3,500 while those controlled under the other ECCN are valued at

$4,500. Since the net value of the commodities controlled under each

entry falls within the LVS dollar value limits applicable to that

entry, the order may be shipped under this License Exception.

(4) Prohibition against evasion of license requirements. Any

activity involving the use of this License Exception to evade license

requirements is prohibited. Such devices include, but are not limited

to, the splitting or structuring of orders to meet applicable LVS

dollar value limits, as prohibited by paragraphs (d)(1) (ii) and (iii)

of this section.

(e) Reexports. Commodities may be reexported under this License

Exception, provided that they could be exported from the United States

to the new country of destination under LVS.

Sec. 740.4 Shipments to Country Group B countries (GBS).

License Exception GBS authorizes exports and reexports to Country

Group B (see Supplement No. 1 to part 740) of those commodities

controlled to the ultimate destination for national security reasons

only and identified by ``GBS--Yes'' on the CCL.

Sec. 740.5 Civil end-users (CIV).

License Exception CIV authorizes exports and reexports controlled

to the ultimate destination for national security reasons only and

identified by ``CIV--Yes'' on the CCL, provided the items are destined

to civil end-users for civil end-uses in Country Group D:1. (See

Supplement No. 1 to part 740.) CIV may not be used for exports and

reexports to military end-users or to known military uses. Such exports

and reexports will continue to require a license. In addition to

conventional military activities, military uses include any

proliferation activities described and prohibited by part 744 of the

EAR. A license is also required for transfer to military end-users or

end-uses in eligible countries of items exported under CIV.

Sec. 740.6 Technology and software under restriction (TSR).

(a) Scope. License Exception TSR permits exports and reexports of

technology and software controlled to the ultimate destination for

national security reasons only and identified by ``TSR--Yes'' in

entries on the CCL, provided the software or technology is destined to

Country Group B. (See Supplement No. 1 to part 740.) A written

assurance is required from the consignee before exporting or

reexporting under this License Exception.

(1) Required assurance for export of technology. You may not export

or reexport technology under this License Exception until you have

received from the importer a written assurance that, without a BXA

license or License Exception, the importer will not:

[[Page 64276]]

(i) Reexport or release the technology to a national of a country

in Country Groups D:1 or E:2; or

(ii) Export to Country Groups D:1 or E:2 the direct product of the

technology, if such foreign produced direct product is subject to

national security controls as identified on the CCL (See General

Prohibition Three, Sec. 736.2(b)(3) of the EAR); or

(iii) If the direct product of the technology is a complete plant

or any major component of a plant, export to Country Groups D:1 or E:2

the direct product of the plant or major component thereof, if such

foreign produced direct product is subject to national security

controls as identified on the CCL or is subject to State Department

controls under the U.S. Munitions List (22 CFR part 121).

(2) Required assurance for export of software. You may not export

or reexport software under this License Exception until you have

received from the importer a written assurance that, without a BXA

license or License Exception, the importer will neither:

(i) Reexport or release the software or the source code for the

software to a national of a country in Country Groups D:1 or E:2; nor

(ii) Export to Country Groups D:1 or E:2 the direct product of the

software, if such foreign produced direct product is subject to

national security controls as identified on the CCL. (See General

Prohibition Three, Sec. 736.2(b)(3) of the EAR).

(3) Form of written assurance. The required assurance may be made

in the form of a letter or any other written communication from the

importer, or the assurance may be incorporated into a licensing

agreement that specifically includes the assurances. An assurance

included in a licensing agreement is acceptable only if the agreement

specifies that the assurance will be honored even after the expiration

date of the licensing agreement. If such a written assurance is not

received, License Exception TSR is not applicable and a license is

required. The license application must include a statement explaining

why assurances could not be obtained.

(4) Other License Exceptions. The requirements in this License

Exception do not apply to the export of technology or software under

other License Exceptions, or to the export of technology or software

included in an application for the foreign filing of a patent, provided

the filing is in accordance with the regulations of the U.S. Patent

Office.

(b) [Reserved]

Sec. 740.7 Computers (CTP).

(a) Scope. License Exception CTP authorizes exports and reexports

of computers and specially designed components therefor, exported or

reexported separately or as part of a system, and related equipment

therefor when exported or reexported with these computers as part of a

system, for consumption in Computer Tier countries as provided by this

section. You may not use this License Exception to export or reexport

items that you know will be used to enhance the CTP beyond the

eligibility limit allowed to your country of destination. When

evaluating your computer to determine License Exception CTP

eligibility, use the CTP parameter to the exclusion of other technical

parameters for computers classified under ECCN 4A003, except of

parameters specified as Missile Technology (MT) concerns, 4A003.e

(equipment performing analog-to-digital conversions exceeding the

limits in ECCN 3A001.a.5), and graphic accelerators or graphic

coprocessors exceeding a ``3-D vector rate'' of 10,000,000. This

License Exception does not authorize export or reexport of such graphic

accelerators or coprocessors, or of computers controlled for MT

reasons.

(b) Computer Tier 1--(1) Eligible countries. The countries that are

eligible to receive exports and reexports under this License Exception

are Australia, Austria, Belgium, Denmark, Finland, France, Germany,

Greece, the Holy See, Iceland, Ireland, Italy, Japan, Liechtenstein,

Luxembourg, Mexico, Monaco, Netherlands, New Zealand, Norway, Portugal,

San Marino, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.

(2) Eligible Computers. The computers eligible for License

Exception CTP are those with a CTP greater than 2,000 MTOPS.

(c) Computer Tier 2--(1) Eligible countries. The countries that are

eligible to receive exports under this License Exception include

Antigua and Barbuda, Argentina, Bahamas, Barbados, Bangladesh, Belize,

Benin, Bhutan, Bolivia, Botswana, Brazil, Brunei, Burkina Faso, Burma,

Burundi, Cameroon, Cape Verde, Central Africa, Chad, Chile, Colombia,

Congo, Costa Rica, Cote d'Ivoire, Cyprus, Czech Republic, Dominica,

Dominican Republic, Ecuador, El Salvador, Equatorial Guinea, Eritrea,

Ethiopia, Fiji, Gabon, Gambia (The), Ghana, Grenada, Guatemala, Guinea,

Guinea-Bissau, Guyana, Haiti, Honduras, Hong Kong, Hungary, Indonesia,

Jamaica, Kenya, Kiribati, Korea (Republic of), Lesotho, Liberia,

Madagascar, Malawi, Malaysia, Maldives, Mali, Malta, Marshall Islands,

Mauritius, Micronesia (Federated States of), Mozambique, Namibia,

Nauru, Nepal, Nicaragua, Niger, Nigeria, Palau, Panama, Papua New

Guinea, Paraguay, Peru, Philippines, Poland, Rwanda, St. Kitts & Nevis,

St. Lucia, St. Vincent and Grenadines, Sao Tome & Principe, Senegal,

Seychelles, Sierra Leone, Singapore, Slovak Republic, Slovenia, Solomon

Islands, Somalia, South Africa, Sri Lanka, Surinam, Swaziland, Taiwan,

Tanzania, Togo, Tonga, Thailand, Trinidad and Tobago, Tuvalu, Uganda,

Uruguay, Venezuela, Western Sahara, Western Samoa, Zaire, Zambia, and

Zimbabwe.

(2) Eligible computers. The computers eligible for License

Exception CTP are those having a Composite Theoretical Performance

(CTP) greater than 2000, but equal to or less than 10,000 Millions of

Theoretical Operations Per Second (MTOPS).

(d) Computer Tier 3--(1) Eligible countries. The countries that are

eligible to receive exports and reexports under this License Exception

are Afghanistan, Albania, Algeria, Andorra, Angola, Armenia,

Azerbaijan, Bahrain, Belarus, Bosnia & Herzegovina, Bulgaria, Cambodia,

China (People's Republic of), Comoros, Croatia, Djibouti, Egypt,

Estonia, Georgia, India, Israel, Jordan, Kazakhstan, Kuwait,

Kyrgyzstan, Laos, Latvia, Lebanon, Lithuania, Macedonia (The Former

Yugoslav Republic of), Mauritania, Moldova, Mongolia, Morocco, Oman,

Pakistan, Qatar, Romania, Russia, Saudi Arabia, Serbia & Montenegro,

Tajikistan, Tunisia, Turkmenistan, Ukraine, United Arab Emirates,

Uzbekistan, Vanuatu, Vietnam, and Yemen.

(2) Eligible computers. The computers eligible for License

Exception CTP are those having a Composite Theoretical Performance

(CTP) greater than 2,000 Millions of Theoretical Operations Per Second

(MTOPS), but less than or equal to 7,000 MTOPS.

(3) Eligible exports. Only exports and reexports to permitted end-

users and end-uses located in countries in Computer Tier 3. License

Exception CTP does not authorize exports and reexports to Computer Tier

3 for military end-users and end-uses and nuclear, chemical,

biological, or missile end-users and end-uses defined in part 744 of

the EAR. Exports and reexports under this License Exception may not be

made to known military end-users or to known military end-uses or known

proliferation end-uses or end-users defined in part 744 of the EAR.

Such exports and reexports will continue to require a license and will

be considered on a case-by-case basis. Retransfers to

[[Page 64277]]

military end-users or end-uses and defined proliferation end-users and

end-uses in eligible countries are strictly prohibited without prior

authorization.

(e) Restrictions. (1) Computers eligible for License Exception CTP

may not be accessed either physically or computationally by nationals

of Cuba, Iran, Iraq, Libya, North Korea, Sudan or Syria, except that

commercial consignees described in Sec. 742.12 of the EAR are

prohibited only from giving such nationals user-accessible

programmability.

(2) Computers, software and specially designed technology eligible

for License Exception CTP may not be reexported/retransferred without

prior authorization from BXA i.e., a license, a permissive reexport,

another License Exception, or ``No License Required''. This restriction

must be conveyed to the consignee, via the Destination Control

Statement, see Sec. 758.6 of the EAR.

(f) Recordkeeping requirements. In addition to the recordkeeping

requirements in part 762 of the EAR, you must keep records of each

export under License Exception CTP. These records will be made

available to the U.S. Government on request. The records must include

the following information:

(1) Date of shipment;

(2) Name and address of the end-user and each intermediate

consignee;

(3) CTP of each computer in shipment;

(4) Volume of computers in shipment;

(5) Dollar value of shipment; and

(6) End-use.

Sec. 740.8 Temporary imports, exports, and reexports (TMP).

This License Exception authorizes various temporary exports and

reexports; exports and reexports of items temporarily in the United

States; and exports and reexports of beta test software.

(a) Temporary exports and reexports. (1) Scope. You may export and

reexport commodities and software for temporary use abroad (including

use in international waters) subject to the conditions and exclusions

described in paragraph (a)(4) of this section. Commodities and software

shipped as temporary exports or reexports under the provisions of this

paragraph (a) must be returned to the country from which they were

exported as soon as practicable but, except in circumstances described

in this section, no later than one year from the date of export. This

requirement does not apply if the commodities and software are consumed

or destroyed in the normal course of authorized temporary use abroad or

an extension or other disposition is permitted by the EAR or in writing

by BXA.

(2) Eligible commodities and software. The following commodities

and software are eligible to be shipped under this paragraph (a):

(i) Tools of trade. Usual and reasonable kinds and quantities of

commodities and software for use by employees of the exporter in a

lawful enterprise or undertaking of the exporter. Eligible commodities

and software may include, but are not limited to, such equipment as is

necessary to commission or service goods, provided that the equipment

is appropriate for this purpose and that all goods to be commissioned

or serviced are of foreign origin, or if subject to the EAR, have been

legally exported or reexported. The commodities and software must

remain under the effective control of the exporter or the exporter's

employee. The shipment of commodities and software may accompany the

individual departing from the United States or may be shipped

unaccompanied within one month before the individual's departure from

the United States, or at any time after departure. No tools of the

trade may be taken to Country Group E:2, and only equipment necessary

to commission or service goods may be taken as tools of trade to

Country Group D:1. (See Supplement No. 1 to part 740.)

(ii) Kits consisting of replacement parts. Kits consisting of

replacement parts may be exported or reexported to all destinations,

except Country Group E:2 (see Supplement No. 1 to part 740), provided

that:

(A) The parts would qualify for shipment under paragraph

(a)(2)(ii)(C) of this section if exported as one-for-one replacements;

(B) The kits remain under effective control of the exporter or an

employee of the exporter; and

(C) All parts in the kit are returned, except that one-for-one

replacements may be made in accordance with the requirements of License

Exception RPL and the defective parts returned (see ``parts'',

Sec. 740.9(a) of this part).

(iii) Exhibition and demonstration in Country Group B. Commodities

and software for exhibition or demonstration in Country Group B (see

Supplement No. 1 to part 740) may be exported or reexported under this

provision provided that the exporter maintains ownership of the

commodities and software while they are abroad and provided that the

exporter, an employee of the exporter, or the exporter's designated

sales representative retains effective control over the commodities and

software while they are abroad. The commodities and software may not be

used for their intended purpose while abroad, except to the minimum

extent required for effective demonstration. The commodities and

software may not be exhibited or demonstrated at any one site more than

120 days after installation and debugging, unless authorized by BXA.

However, before or after an exhibition or demonstration, pending

movement to another site, return to the United States or the foreign

reexporter, or BXA approval for other disposition, the commodities and

software may be placed in a bonded warehouse or a storage facility

provided that the exporter retains effective control over their

disposition. The export documentation for this type of transaction must

show the U.S. exporter as ultimate consignee, in care of the person who

will have control over the commodities and software abroad.

(iv) Inspection and calibration. Commodities to be inspected,

tested, calibrated or repaired abroad.

(v) Containers. Containers for which another License Exception is

not available and that are necessary for export of commodities.

However, this ``containers'' provision does not authorize the export of

the container's contents, which, if not exempt from licensing, must be

separately authorized for export under either a License Exception or a

license.

(vi) Broadcast material. (A) Video tape containing program material

recorded in the country of export to be publicly broadcast in another

country.

(B) Blank video tape (raw stock) for use in recording program

material abroad.

(vii) Assembly in Mexico. Commodities to be exported to Mexico

under Customs entries that require return to the United States after

processing, assembly, or incorporation into end products by companies,

factories, or facilities participating in Mexico's in-bond

industrialization program (Maquiladora), provided that all resulting

end-products (or the commodities themselves) are returned to the United

States.

(viii) News media. (A) Commodities necessary for news-gathering

purposes (and software necessary to use such commodities) may accompany

``accredited'' news media personnel (i.e., persons with credentials

from a news gathering or reporting firm) to Country Groups D:1 or E:2

(see Supplement No. 1 to part 740) if the commodities:

(1) Are retained under ``effective control'' of the exporting news

gathering firm;

[[Page 64278]]

(2) Remain in the physical possession of the news media personnel.

The term physical possession for purposes of this paragraph

(a)(2)(viii), news media, is defined as maintaining effective measures

to prevent unauthorized access (e.g., securing equipment in locked

facilities or hiring security guards to protect the equipment); and

(3) Are removed with the news media personnel at the end of the

trip.

(B) When exporting under this paragraph (a)(2)(viii) from the

United States, the exporter must send a copy of the packing list or

similar identification of the exported commodities, to: U.S. Department

of Commerce, Bureau of Export Administration, Office of Enforcement

Support, Room H4069, 14th Street and Constitution Avenue, N.W.,

Washington, DC 20230, or any of its field offices, specifying the

destination and estimated dates of departure and return. The Office of

Export Enforcement (OEE) may spot check returns to assure that the

temporary exports and reexports provisions of this License Exception

are being used properly.

(C) Commodities or software necessary for news-gathering purposes

that accompany news media personnel to all other destinations shall be

exported or reexported under paragraph (a)(2)(i), tools of trade, of

this section if owned by the news gathering firm, or if they are

personal property of the individual news media personnel. Note that

paragraphs (a)(2)(i), tools of trade and (a)(2)(viii), news media, of

this section do not preclude independent ``accredited'' contract

personnel, who are under control of news gathering firms while on

assignment, from utilizing these provisions, provided that the news

gathering firm designate an employee of the contract firm to be

responsible for the equipment.)

(3) Special restrictions--(i) Destinations. (A) No commodity or

software may be exported to Country Group E:2 (see Supplement No. 1 to

part 740) except as permitted by paragraph (a)(2)(viii), news media, of

this section;

(B) No commodity or software may be exported to Country Group D:1

(see Supplement No. 1 to part 740) except:

(1) Commodities and software exported under paragraph (a)(2)(viii),

news media, of this section;

(2) Commodities and software exported under paragraph (a)(2)(i),

tools of trade, of this section; and

(3) Commodities exported as kits of replacement parts, consistent

with the requirements of paragraph (a)(2)(ii) of this section.

(C) These destination restrictions apply to temporary exports to

and for use on any vessel, aircraft or territory under ownership,

control, lease, or charter by any country in Country Group D:1 or E:2,

or any national thereof. (See Supplement No. 1 to part 740.)

(ii) Ineligible commodities or software. Commodities or software

that will be used outside of Country Group A:1 (see Supplement No. 1 to

part 740), Iceland, or New Zealand, either directly or indirectly in

any sensitive nuclear activity as described in Sec. 744.2 of the EAR

may not be exported or reexported to any destination under the

temporary exports and reexports provisions of this License Exception.

(iii) Use or disposition. No commodity or software may be exported

or reexported under this paragraph (a) if:

(A) An order to acquire the commodity or software has been received

before shipment;

(B) The exporter has prior knowledge that the commodity or software

will stay abroad beyond the terms described in this paragraph (a); or

(C) The commodity or software is for lease or rental abroad.

(4) Return or disposal of commodities and software. All commodities

and software exported or reexported under these provisions must, if not

consumed or destroyed in the normal course of authorized temporary use

abroad, be returned as soon as practicable but no later than one year

after the date of export, to the United States or other country from

which the commodities and software were so exported, or shall be

disposed of or retained in one of the following ways:

(i) Permanent export or reexport. If the exporter or the reexporter

wishes to sell or otherwise dispose of the commodities or software

abroad, except as permitted by this or other applicable License

Exception, the exporter must request authorization by submitting a

license application to BXA at the address listed in part 748 of the

EAR. (See part 748 of the EAR for more information on license

applications.) The request should comply with all applicable provisions

of the EAR covering export directly from the United States to the

proposed destination. The request must also be supported by any

documents that would be required in support of an application for

export license for shipment of the same commodities or software

directly from the United States to the proposed destination. BXA will

advise the exporter of its decision.

(ii) Use of a license. An outstanding license may also be used to

dispose of commodities or software covered by the provisions of this

paragraph (a), provided that the outstanding license authorizes direct

shipment of the same commodity or software to the same new ultimate

consignee in the new country of destination.

(iii) Authorization to retain abroad beyond one year. If the

exporter wishes to retain a commodity or software abroad beyond the 12

months authorized by paragraph (a) of this section, the exporter must

request authorization by submitting Form BXA-748P, Multipurpose

Application, 90 days prior to the expiration of the 12 month period.

The request must be sent to BXA at the address listed in part 748 of

the EAR and should include the name and address of the exporter, the

date the commodities or software were exported, a brief product

description, and the justification for the extension. If BXA approves

the extension request, the exporter will receive authorization for a

one-time extension not to exceed six months. BXA normally will not

allow an extension for commodities or software that have been abroad

more than 12 months, nor will a second six month extension be

authorized. Any request for retaining the commodities or software

abroad for a period exceeding 18 months must be made in accordance with

the requirements of paragraph (a)(4)(i) of this section.

(5) Reexports. Commodities and software legally exported from the

United States may be reexported to a new country(ies) of destination

under this paragraph (a) provided its terms and conditions are met and

the commodities and software are returned to the country from which the

reexport occurred.

(b) Exports of items temporarily in the United States: Scope. The

provisions of this paragraph (b) describe the conditions for exporting

foreign-origin items temporarily in the United States. The provisions

include the export of items moving in transit through the United

States, imported for display at a U.S. exhibition or trade fair,

returned because unwanted, or returned because refused entry.

Note 1 to paragraph (b) of this section: A commodity withdrawn

from a bonded warehouse in the United States under a ``withdrawal

for export'' customs entry is considered as ``moving in transit''.

It is not considered as ``moving in transit'' if it is withdrawn

from a bonded warehouse under any other type of customs entry or if

its transit has been broken for a processing operation, regardless

of the type of customs entry.

Note 2 to paragraph (b) of this section: Items shipped on board

a vessel or aircraft and passing through the United States from one

foreign country to another may be exported without a license

provided that (a)

[[Page 64279]]

while passing in transit through the United States, they have not

been unladen from the vessel or aircraft on which they entered, and

(b) they are not originally manifested to the United States.)

(1) Items moving in transit through the United States. Subject to

the following conditions, the provisions of paragraph (b)(1) of this

section authorize export of items moving in transit through the United

States under a Transportation and Exportation (T.& E.) customs entry or

an Immediate Exportation (I.E.) customs entry made at a U.S. Customs

Office.

(i) Items controlled for national security, nuclear proliferation,

missile technology, or chemical and biological weapons reasons may not

be exported to Country Group D:1, 2, 3, or 4 (see Supplement No. 1 to

part 740), respectively, under this paragraph (b)(1).

(ii) Items may not be exported to Country Group E:2 under this

paragraph (b)(1).

(iii) The following may not be exported in transit from the United

States under Sec. 740.8(b)(1):

(A) Commodities shipped to the United States under an International

Import Certificate, Form BXA-645P;

(B) Chemicals controlled under ECCN 1C350; or

(C) Horses for export by sea (refer to short supply controls in

part 754 of the EAR).

(iv) The provisions of paragraph (b)(1) apply to all shipments from

Canada moving in transit through the United States to any foreign

destination, regardless of the nature of the commodities or software or

their origin. For such shipments the customs office at the U.S. port of

export will require a copy of Form B-13, Canadian Customs Entry,

certified or stamped by Canadian customs authorities, except where the

shipment is valued at less than $50.00. (In transit shipments

originating in Canada that are exempt from U.S. licensing, or made

under a U.S. license or other applicable U.S. License Exception do not

require this form.) The commodity or software description, quantity,

ultimate consignee, country of ultimate destination, and all other

pertinent details of the shipment must be the same on a required Form

B-13, as on Commerce Form 7513, or when Form 7513 is not required, must

be the same as on Customs Form 7512. When there is a material

difference, a corrected Form B-13 authorizing the shipment is required.

(2) Items imported for display at U.S. exhibitions or trade fairs.

Subject to the following conditions, the provisions of this paragraph

(b)(2) authorize the export of items that were imported into the United

States for display at an exhibition or trade fair and were either

entered under bond or permitted temporary free import under bond

providing for their export and are being exported in accordance with

the terms of that bond.

(i) Items may be exported to the country from which imported into

the United States. However, items originally imported from Cuba or

North Korea may not be exported unless the U.S. Government had licensed

the import from that country.

(ii) Items may be exported to any destination other than the

country from which imported except:

(A) Items imported into the United States under an International

Import Certificate;

(B) Exports to Country Group E:2 (see Supplement No. 1 to part

740); or

(C) Exports to Country Group D:1, 2, 3, or 4 (see Supplement No. 1

to part 740) of items controlled for national security, missile

technology, chemical and biological weapons reasons, or nuclear

proliferation, respectively.

(3) Return of unwanted shipments. A foreign-origin item may be

returned to the country from which it was imported if its

characteristics and capabilities have not been enhanced while in the

United States. No foreign-origin items may be returned to Cuba, Libya,

or North Korea.

(4) Return of shipments refused entry. Shipments of items refused

entry by the U.S. Customs Service, the Food and Drug Administration, or

other U.S. Government agency may be returned to the country of origin,

except to:

(i) A destination in Cuba, Libya, or North Korea; or

(ii) A destination from which the shipment has been refused entry

because of the Foreign Assets Control Regulations of the Treasury

Department, unless such return is licensed or otherwise authorized by

the Treasury Department, Office of Foreign Assets Control (31 CFR part

500).

(c) Exports of beta test software. (1) Scope. The provisions of

paragraph (c) authorize exports and reexports to eligible countries of

beta test software intended for distribution to the general public.

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

exports and reexports are all countries except those in Country Group

E:2.

(3) Eligible software. All software that is controlled by the CCL

(part 774 of the EAR), and under Commerce licensing jurisdiction, is

eligible for export and reexport, subject to the restrictions in this

paragraph (c).

(4) 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:

(i) 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 774 of the

EAR;

(ii) 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

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

without further substantial support from the supplier.

(5) Importer Statement. Prior to shipping any eligible software,

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.

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

importer statement required by paragraph (c)(5) of this section may

execute any software received.

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

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.

Sec. 740.9 Servicing and replacement of parts and equipment (RPL).

This License Exception authorizes exports and reexports associated with

one-for-one replacement of parts or servicing and replacement of

equipment.

(a) Parts--(1) Scope. The provisions of this paragraph (a)

authorize the export and reexport of one-for-one replacement parts for

previously exported equipment.

(2) One-for-one replacement of parts. (i) The term ``replacement

parts'' as

[[Page 64280]]

used in this section means parts needed for the immediate repair of

equipment, including replacement of defective or worn parts. (It

includes subassemblies but does not include test instruments or

operating supplies). (The term ``subassembly'' means a number of

components assembled to perform a specific function or functions within

a commodity. One example would be printed circuit boards with

components mounted thereon. This definition does not include major

subsystems such as those composed of a number of subassemblies.) Items

that improve or change the basic design characteristics, e.g., as to

accuracy, capability, performance or productivity, of the equipment

upon which they are installed, are not deemed to be replacement parts.

For kits consisting of replacement parts, consult Sec. 740.8(a)(2)(ii)

of this part.

(ii) Parts may be exported only to replace, on a one-for-one basis,

parts contained in commodities that were: legally exported from the

United States; legally reexported; or made in a foreign country

incorporating authorized U.S.-origin parts. The conditions of the

original U.S. authorization must not have been violated. Accordingly,

the export of replacement parts may be made only by the party who

originally exported or reexported the commodity to be repaired, or by a

party that has confirmed the appropriate authority for the original

transaction.

(iii) The parts to be replaced must either be destroyed abroad or

returned promptly to the person who supplied the replacement parts, or

to a foreign firm that is under the effective control of that person.

(3) Exclusions. (i) No replacement parts may be exported to repair

a commodity exported under a license if that license included a

condition that any subsequent replacement parts must be exported only

under a license.

(ii) No parts may be exported to be held abroad as spare parts or

equipment for future use. Replacement parts may be exported to replace

spare parts that were authorized to accompany the export of equipment,

as those spare parts are utilized in the repair of the equipment. This

will allow maintenance of the stock of spares at a consistent level as

parts are used.

(iii) No parts may be exported to any destination except Iceland,

New Zealand, or the countries listed in Country Group A:1 (see

Supplement No. 1 to part 740) if the item is to be incorporated into or

used in nuclear weapons, nuclear explosive devices, nuclear testing

related to activities described in Sec. 744.2(a) of the EAR, the

chemical processing of irradiated special nuclear or source material,

the production of heavy water, the separation of isotopes of source and

special nuclear materials, or the fabrication of nuclear reactor fuel

containing plutonium, as described in Sec. 744.2(a) of the EAR.

(iv) No replacement parts may be exported to Cuba, Iran, Iraq,

Sudan, Syria, Libya, or North Korea (countries designated by the

Secretary of State as supporting acts of international terrorism) if

the commodity to be repaired is an ``aircraft'' (as defined in part 772

of the EAR) or national security controlled commodity.

(v) The conditions described in this paragraph (a)(3) relating to

replacement of parts do not apply to reexports to a foreign country of

parts as replacements in foreign-origin products, if at the time the

replacements are furnished, the foreign-origin product is eligible for

export to such country under any of the License Exceptions in this part

or the exceptions in Sec. 734.4 of the EAR.

(4) Reexports. Parts exported from the United States may be

reexported to a new country of destination, provided that the

restrictions described in paragraphs (a)(2) and (3) of this section are

met. A party reexporting U.S.-origin one-for-one replacement parts

shall ensure that the commodities being repaired were shipped to their

present location in accordance with U.S. law and continue to be legally

used, and that either before or promptly after reexport of the

replacement parts, the replaced parts are either destroyed or returned

to the United States, or to the foreign firm in Country Group B (see

Supplement No. 1 to part 740) that shipped the replacement parts.

(b) Servicing and replacement--(1) Scope. The provisions of this

paragraph (b) authorize the export and reexport of items that were

returned to the United States for servicing and the replacement of

defective or unacceptable U.S.-origin commodities and software.

(2) Commodities and software sent to a United States or foreign

party for servicing.

(i) Definition. ``Servicing'' as used in this section means

inspection, testing, calibration or repair, including overhaul and

reconditioning. The servicing shall not have improved or changed the

basic characteristics, e.g., as to accuracy, capability, performance,

or productivity of the commodity or software as originally authorized

for export or reexport.

(ii) Return of serviced commodities and software. When the serviced

commodity or software is returned, it may include any replacement or

rebuilt parts necessary to its repair and may be accompanied by any

spare part, tool, accessory, or other item that was sent with it for

servicing.

(iii) Commodities and software imported from Country Group D:1

except the PRC. Commodities and software legally exported or reexported

to a consignee in Country Group D:1 (except the People's Republic of

China (PRC)) (see Supplement No. 1 to part 740) that are sent to the

United States or a foreign party for servicing may be returned to the

country from which it was sent, provided that both of the following

conditions are met:

(A) The exporter making the shipment is the same person or firm to

whom the original license was issued; and

(B) The end-use and the end-user of the serviced commodities or

software and other particulars of the transaction, as set forth in the

application and supporting documentation that formed the basis for

issuance of the license have not changed.

(iv) Cuba, Iran, Iraq, Libya, North Korea, Sudan, and Syria. No

repaired commodity or software may be exported or reexported to Cuba,

Iran, Iraq, Libya, North Korea, Sudan, or Syria.

(3) Replacements for defective or unacceptable U.S.-origin

equipment.

(i) Subject to the following conditions, commodities or software

may be exported or reexported to replace defective or otherwise

unusable (e.g., erroneously supplied) items.

(A) The commodity or software to be replaced must have been

previously exported or reexported in its present form under a license

or authorization granted by BXA.

(B) No commodity or software may be exported or reexported to

replace equipment that is worn out from normal use, nor may any

commodity or software be exported to be held in stock abroad as spare

equipment for future use.

(C) The replacement item may not improve the basic characteristic,

e.g., as to accuracy, capability, performance, or productivity, of the

equipment as originally approved for export or reexport under a license

issued by BXA.

(D) No shipment may be made to Cuba, Iran, Iraq, Libya, North

Korea, Sudan, or Syria, or to any other destination to replace

defective or otherwise unusable equipment owned or controlled by, or

leased or chartered to, a national of any of those countries.

(ii) Special conditions applicable to exports to Country Group B

and Country Group D:1. (See Supplement No. 1 to part 740.) In addition

to the general conditions in paragraph (b)(3)(i) of this section, the

following conditions apply

[[Page 64281]]

to exports or reexports of replacements for defective or unacceptable

U.S.-origin commodities or software to a destination in Country Group B

or Country Group D:1:

(A) By making such an export or reexport, the exporter represents

that all the requirements of this paragraph (b) have been met and

undertakes to destroy or return the replaced parts as provided in

paragraph (b)(3)(ii)(C) of this section.

(B) The defective or otherwise unusable equipment must be replaced

free of charge, except for transportation and labor charges. If

exporting to the countries listed in Country Group D:1 (except the

PRC), the exporter shall replace the commodity or software within the

warranty period or within 12 months of its shipment to the ultimate

consignee in the country of destination, whichever is shorter.

(C) The commodity or software to be replaced must either be

destroyed abroad or returned to the United States, or to a foreign firm

in Country Group B that is under the effective control of the U.S.

exporter, or to the foreign firm that is providing the replacement part

or equipment. The destruction or return must be effected before, or

promptly after, the replacement item is exported from the United

States.

(D) A party reexporting replacements for defective or unacceptable

U.S.-origin equipment must ensure that the commodities or software

being replaced were shipped to their present location in accordance

with U.S. law and continue to be legally used.

Sec. 740.10 Governments and international organizations (GOV).

This Licenses Exception authorizes exports and reexports for

international nuclear safeguards; U.S. government agencies or

personnel, and agencies of cooperating governments.

(a) International safeguards--(1) Scope. You may export and

reexport commodities or software to the International Atomic Energy

Agency (IAEA) and the European Atomic Energy Community (Euratom), and

reexports by IAEA and Euratom for official international safeguard use,

as follows:

(i) Commodities or software consigned to the IAEA at its

headquarters in Vienna, Austria, or field offices in Toronto, Ontario,

Canada or Tokyo, Japan for official international safeguards use. The

IAEA is an international organization that establishes and administers

safeguards designed to ensure that special nuclear materials and other

related nuclear facilities, equipment, and material are not diverted

from peaceful purposes to non-peaceful purposes.

(ii) Commodities or software consigned to the Euratom Safeguards

Directorate in Luxembourg, Luxembourg for official international

safeguards use. Euratom is an international organization of European

countries with headquarters in Luxembourg. Euratom establishes and

administers safeguards designed to ensure that special nuclear

materials and other related nuclear facilities, equipment, and material

are not diverted from peaceful purposes to non-peaceful purposes.

(iii) Commodities consigned to IAEA or Euratom may be reexported to

any country for IAEA or Euratom international safeguards use provided

that IAEA or Euratom maintains control of or otherwise safeguards the

commodities and returns the commodities to the locations described in

paragraphs (a)(1)(i) and (a)(1)(ii) of this section when they become

obsolete, are no longer required, or are replaced.

(iv) Commodity or software shipments may be made by commercial

companies under direct contract with IAEA or Euratom, or by Department

of Energy National Laboratories as directed by the Department of State

or the Department of Energy.

(v) The monitoring functions of IAEA and Euratom are not subject to

the restrictions on prohibited safeguarded nuclear activities described

in Sec. 744.2(a)(3) of the EAR.

(vi) When commodities or software originally consigned to IAEA or

Euratom are no longer in IAEA or Euratom official safeguards use, such

commodities may only be disposed of in accordance with the regulations

in the EAR.

(2) Exclusions. No computers with a CTP greater than 10,000 MTOPS

may be exported or reexported to countries listed in Computer Tiers 3

or 4. See Sec. 742.12 of the EAR for a complete list of the countries

within Computer Tiers 3 and 4.

(b) Governments--(1) Scope. The provisions of paragraph (b)

authorize exports and reexports of the items listed in paragraph (b)(2)

of this section to personnel and agencies of the U.S. Government or

agencies of cooperating governments.

(2) Eligibility--(i) Items for personal use by personnel and

agencies of the U.S. Government. This provision is available for items

in quantities sufficient only for the personal use of members of the

U.S. Armed Forces or civilian personnel of the U.S. Government

(including U.S. representatives to public international organizations),

and their immediate families and servants. Items for personal use

include household effects, food, beverages, and other daily

necessities.

(ii) Items for official use by personnel and agencies of the U.S.

Government. This provision is available for items consigned to and for

the official use of any agency of the U.S. Government.

(iii) Items for official use within national territory by agencies

of cooperating governments. This provision is available for all items

consigned to and for the official use of any agency of a cooperating

government within the territory of any cooperating government, except:

(A) Computers with a CTP greater than 10,000 MTOPS when destined

for Argentina, Hong Kong, South Korea, Singapore, or Taiwan;

(B) Items identified on the Commerce Control List as controlled for

missile technology (MT), chemical and biological warfare (CB), or

nuclear nonproliferation (NP) reasons; or

(C) Regional stability items controlled under Export Control

Classification Numbers (ECCNs) 6A002, 6A003, 6D102, 6E001, 6E002,

7D001, 7E001, 7E002, and 7E101, as described in Sec. 742.6(a)(1) of the

EAR.

(iv) Diplomatic and consular missions of a cooperating government.

This provision is available for all items consigned to and for the

official use of a diplomatic or consular mission of a cooperating

government located in any country in Country Group B (see Supplement

No. 1 to part 740), except:

(A) Computers with a CTP greater than 10,000 MTOPS when destined

for Argentina, Hong Kong, South Korea, Singapore, or Taiwan;

(B) Items identified on the Commerce Control List as controlled for

missile technology (MT), chemical and biological warfare (CB), or

nuclear nonproliferation (NP) reasons; or

(C) Regional stability items controlled under Export Control

Classification Numbers (ECCNs) 6A002, 6A003, 6D102, 6E001, 6E002,

7D001, 7E001, 7E002, and 7E101, as described in Sec. 742.6 (a)(1) of

the EAR.

(3) Definitions. (i) ``Agency of the U.S. Government'' includes all

civilian and military departments, branches, missions, government-owned

corporations, and other agencies of the U.S. Government, but does not

include such national agencies as the American Red Cross or

international organizations in which the United States participates

such as the Organization of American States. Therefore, shipments may

not be made to these non-government national or international agencies,

except as provided in paragraph (b)(2)(i) of this

[[Page 64282]]

section for U.S. representatives to these organizations.

(ii) ``Agency of a cooperating government'' includes all civilian

and military departments, branches, missions, and other governmental

agencies of a cooperating national government. Cooperating governments

are the national governments of countries listed in Country Group A:1

(see Supplement No. 1 to part 740) and the national governments of

Argentina, Austria, Finland, Hong Kong, Ireland, Korea (Republic of),

New Zealand, Singapore, Sweden, Switzerland, and Taiwan.

Sec. 740.11 Gift parcels and humanitarian donations (GFT).

(a) Gift parcels.--(1) Scope. The provisions of paragraph (a)

authorize exports and reexports of gift parcels by an individual

(donor) addressed to an individual, or a religious, charitable or

educational organization (donee) located in any destination for the use

of the donee or the donee's immediate family (and not for resale). The

gift parcel must be provided free of charge to the donee. However,

payment by the donee of any handling charges or of any fees levied by

the importing country (e.g., import duties, taxes, etc.) is not

considered to be a cost to the donee for purposes of this definition of

``gift parcel.''

Note to paragraph (a) of this section: A gift parcel, within the

context of this paragraph (a), does not include multiple parcels

exported in a single shipment for delivery to individuals residing

in a foreign country. Such multiple gift parcels, if subject to the

General Prohibitions described in Sec. 734.2(b) of the EAR, must be

licensed by BXA. (See Supplement No. 2 to part 748 of the EAR for

licensing of multiple gift parcels).

(2) Commodity, value and other limitations.--(i) Eligible

commodities. The eligible commodities are as follows:

(A) The commodity must not be controlled for chemical and

biological weapons (CB), missile technology (MT), national security

(NS), or nuclear proliferation (NP) (see Commerce Control List, part

774 of the EAR); and

(B) The commodity must be of a type and in quantities normally

given as gifts between individuals.

(1) For Cuba, the only commodities that may be included in a gift

parcel are the following items: food, vitamins, seeds, medicines,

medical supplies and devices, hospital supplies and equipment,

equipment for the handicapped, clothing, personal hygiene items,

veterinary medicines and supplies, fishing equipment and supplies,

soap-making equipment, and in addition receive-only radio equipment for

reception of commercial/civil AM/FM and short wave publicly available

frequency bands, and batteries for such equipment.

(2) For all other destinations, eligible commodities include all

items described in paragraph (a)(2)(i)(B)(1) of this section as well as

all other items normally sent as gifts. Gold bullion, gold taels, and

gold bars are prohibited as are items intended for resale or reexport.

Example to paragraph (a) of this section. A watch or piece of

jewelry is normally sent as a gift. However, multiple watches,

either in one package or in subsequent shipments, would not quality

for such gift parcels because the quantity exceeds that normally

given between individuals. Similarly, a sewing machine or bicycle,

within the dollar limits of this License Exception, may be an

appropriate gift. However, subsequent shipments of the same item to

the same donee would not be a gift normally given between

individuals.

(3) For purposes of paragraph (a)(2)(i)(B) of this section,

clothing is appropriate, except that export of military wearing apparel

to Country Group D:1 or E:2 under this License Exception is

specifically prohibited, regardless of whether all distinctive U.S.

military insignia, buttons, and other markings are removed.

(ii) Import requirements. The commodities must be acceptable in

type and quantity by the recipient country for import as gifts.

Commodities exceeding the import limits may not be included in gift

parcels.

(iii) Frequency. Except for gift parcels of food to Cuba, not more

than one gift parcel may be sent from the same donor to the same donee

in any one calendar month. Parties seeking authorization to exceed this

limit due to compelling humanitarian concerns (e.g., gifts of medicine

to relatives) should submit a license application (BXA-748P) with

complete justification.

(iv) Value. The combined total domestic retail value of all

commodities included in a gift parcel may not exceed $400, except for

gift parcels to Cuba where the value of non-food items may not exceed

$200. There is no dollar value limit on food contained in a gift parcel

to Cuba.

(3) How to export gift parcels. (i) A gift parcel must be sent

directly to the donee by the individual donor, or for such donor by a

commercial or other gift-forwarding service or organization. Each gift

parcel must show, on the outside wrapper, the name and address of the

donor, as well as the name and address of the donee, regardless of

whether sent by the donor or by a forwarding service.

(ii) Each parcel must have the notation ``GIFT--Export License Not

Required'' written on the addressee side of the package and the symbol

``GFT'' written on any required customs declaration.

(b) Humanitarian donations.--(1) Scope. The provisions of paragraph

(b) authorize exports by groups or organizations of donations to meet

basic human needs when those groups or organizations have experience in

maintaining a verifiable system of distribution that ensures delivery

to the intended beneficiaries.

(2) Basic human needs. Basic human needs are defined as those

requirements essential to individual well-being: health, food,

clothing, shelter, and education. These needs are considered to extend

beyond those of an emergency nature and those that meet direct needs

for mere subsistence.

(3) Eligible donors. Eligible donors are U.S. charitable

organizations that have an established record of involvement in

donative programs and experience in maintaining and verifying a system

of distribution to ensure delivery of commodities and software to the

intended beneficiaries. Eligible distribution arrangements may consist

of any one or more of the following:

(i) A permanent staff maintained in the recipient country to

monitor the receipt and distribution of the donations to the intended

beneficiaries;

(ii) Periodic spot-checks in the recipient country by members of

the exporter's staff; or

(iii) An agreement to utilize the services of a charitable

organization that has a monitoring system in place.

(4) Donations. To qualify for export under the provisions of this

paragraph (b), the items must be provided free of charge to the

beneficiary. The payment by the beneficiary, however, of normal

handling charges or fees levied by the importing country (e.g., import

duties, taxes, etc.) is not considered to be a cost to the beneficiary

for purposes of this paragraph (b).

(5) Ineligible commodities and software. The following commodities

and software are not eligible:

(i) Commodities and software controlled for national security,

chemical or biological weapons, and nuclear nonproliferation, missile

technology or crime control reasons (see Supplement No. 1 to part 774

of the EAR);

(ii) Exports for large-scale projects of the kind associated with

comprehensive economic growth, such as dams and hydroelectric plants;

or

(iii) Exports to Cuba of medical items excluded by Sec. 746.2(a)(3)

of the EAR.

[[Page 64283]]

(6) Eligible items. Eligible commodities and software are those

listed in Supplement No. 2 to part 740.

(7) Additional recordkeeping requirements. In addition to the

recordkeeping requirements in part 762 of the EAR, donors must keep

records containing the following information:

(i) The donor organization's identity and past experience as an

exporter of goods to meet basic human needs;

(ii) Past and current countries to which the donative programs have

been and are being directed, with particular reference to donative

programs in embargoed destinations;

(iii) Types of projects and commodities involved in the donative

programs;

(iv) Specific class(es) of beneficiaries of particular donated

goods intended to be exported under this License Exception; and

(v) Information concerning the source of funding for the donative

programs and the projected annual value of exports of humanitarian

donations.

Sec. 740.12 Technology and software--unrestricted (TSU). This License

Exception authorizes exports and reexports of operation technology and

software; sales technology and software; software updates (bug fixes);

and ``mass market'' software subject to the General Software Note

(a) Operation technology and software.--(1) Scope. The provisions

of paragraph (a) permit exports and reexports of operation technology

and software. ``Operation technology'' is the minimum technology

necessary for the installation, operation, maintenance (checking), and

repair of those products that are lawfully exported or reexported under

a license, a License Exception, or NLR. The ``minimum necessary''

operation technology does not include technology for development or

production and includes use technology only to the extent required to

ensure safe and efficient use of the product. Individual entries in the

software and technology subcategories of the CCL may further restrict

the export or reexport of operation technology.

(2) Provisions and destinations.--(i) Provisions. Operation

software may be exported or reexported provided that both of the

following conditions are met:

(A) The operation software is the minimum necessary to operate

equipment authorized for export or reexport; and

(B) The operation software is in object code.

(ii) Destinations. Operation software and technology may be

exported or reexported to any destination to which the equipment for

which it is required has been or is being legally exported or

reexported.

(b) Sales technology--(1) Scope. The provisions of paragraph (b)

authorize exports and reexports of sales technology. ``Sales

technology'' is data supporting a prospective or actual quotation, bid,

or offer to sell, lease, or otherwise supply any item.

(2) Provisions and destinations--(i) Provisions. Sales technology

may be exported or reexported provided that:

(A) The technology is a type customarily transmitted with a

prospective or actual quotation, bid, or offer in accordance with

established business practice; and

(B) Neither the export nor the reexport will disclose the detailed

design, production, or manufacture technology, or the means of

reconstruction, of either the quoted item or its product. The purpose

of this limitation is to prevent disclosure of technology so detailed

that the consignee could reduce the technology to production.

(ii) Destinations. Sales technology may be exported or reexported

to any destination.

Note: Neither this section nor its use means that the U.S.

Government intends, or is committed, to approve a license

application for any commodity, plant, software, or technology that

may be the subject of the transaction to which such quotation, bid,

or offer relates. Exporters are advised to include in any

quotations, bids, or offers, and in any contracts entered into

pursuant to such quotations, bids, or offers, a provision relieving

themselves of liability in the event that a license (when required)

is not approved by the Bureau of Export Administration.

(c) Software updates. The provisions of paragraph (c) authorize

exports and reexports of software updates that are intended for and are

limited to correction of errors (``fixes'' to ``bugs'') in software

lawfully exported or reexported (original software). Such software

updates may be exported or reexported only to the same consignee to

whom the original software was exported or reexported, and such

software updates may not enhance the functional capacities of the

original software. Such software updates may be exported or reexported

to any destination to which the software for which they are required

has been legally exported or reexported.

(d) General Software Note: ``mass market'' software--(1) Scope. The

provisions of paragraph (d) authorize exports and reexports of ``mass

market'' software subject to the General Software Note (see Supplement

No. 2 to part 774 of the EAR; also referenced in this section).

(2) Provisions and destinations--(i) Destinations. The ``mass

market'' provisions of this paragraph (d) for software are available to

all destinations except Cuba, Iran, Libya, North Korea, Sudan, and

Syria.

(ii) Provisions. ``Mass market'' treatment is available for

software that is generally available to the public by being:

(A) Sold from stock at retail selling points, without restriction,

by means of:

(1) Over the counter transactions;

(2) Mail order transactions; or

(3) Telephone call transactions; and

(B) Designed for installation by the user without further

substantial support by the supplier.

17a. The introductory text of newly designated Sec. 740.14 is

revised to read as follows:

Sec. 740.14 Aircraft and vessels (AVS).

This License Exception authorizes departure from the United States

of foreign registry civil aircraft on temporary sojourn in the United

States and of U.S. civil aircraft for temporary sojourn abroad; the

export of equipment and spare parts for permanent use on a vessel or

aircraft; and exports to vessels or planes of U.S. or Canadian registry

and U.S. or Canadian Airlines' installations or agents. Generally, no

License Exception symbol is necessary for export clearance purposes;

however, when necessary, the symbol ``AVS'' may be used.

* * * * *

PART 742--[AMENDED]

18. Section 742.4 is amended by revising the last sentence of

paragraph (a) to read as follows:

Sec. 742.4 National security.

(a) License requirements. * * * License Exception GBS is available

for the export and reexport of certain national security controlled

items to Country Group B (see Sec. 740.4 and Supplement No. 1 to part

740 of the EAR).

* * * * *

19. In Sec. 742.12(a)(1), the reference in the fourth sentence to

``Sec. 743.3(e)'' is revised to read ``Sec. 740.7''.

20. Section 742.12 is amended by revising the last sentence of

paragraph (a)(2) to read as follows:

Sec. 742.12 High performance computers.

(a) * * *

(2) * * * Countries included in Computer Tiers 1, 2, and 3 are

listed in License Exception CTP in Sec. 740.7 of the EAR. Computer Tier

4 consists of Cuba,

[[Page 64284]]

Iran, Iraq, Libya, North Korea, Sudan, and Syria.

* * * * *

PART 744--[AMENDED]

21. Section 744.2 is amended by revising paragraph (c) to read as

follows:

Sec. 744.2 Restrictions on certain nuclear end-uses.

* * * * *

(c) Exceptions. Despite the prohibitions described in paragraphs

(a) and (b) of this section, you may export technology subject to the

EAR under the operation technology and software or sales technology and

software provisions of License Exception TSU (see Sec. 740.12 (a) and

(b)), but only to and for use in countries listed in Country Group A:1

(see Supplement No. 1 to part 740 of the EAR), Iceland and New Zealand.

Notwithstanding the provisions of part 740 of the EAR, the provisions

of Sec. 740.12 (a) and (b) will only overcome general prohibition five

for countries listed in Country Group A:1, Iceland and New Zealand.

PART 746--[AMENDED]

21. Section 746.2 is amended by revising paragraph (a)(1) to read

as follows:

Sec. 746.2 Cuba.

(a) * * *

(1) License Exceptions. You may export without a license if your

transaction meets all the applicable terms and conditions of any of the

following License Exceptions. To determine the scope and eligibility

requirements, you will need to turn to the sections or specific

paragraphs of part 740 of the EAR (License Exceptions). Read each

License Exception carefully, as the provisions available for embargoed

countries are generally narrow.

(i) Temporary exports and reexports (TMP) by the news media (see

Sec. 740.8(a)(2)(viii) of the EAR).

(ii) Operation technology and software (TSU) for legally exported

commodities (see Sec. 740.12(a) of the EAR).

(iii) Sales technology (TSU) (see Sec. 740.12(b) of the EAR).

(iv) Software updates (TSU) for legally exported software (see

Sec. 740.12(c) of the EAR).

(v) Parts (RPL) for one-for-one replacement in certain legally

exported commodities (see Sec. 740.9(a) of the EAR).

(vi) Baggage (BAG) (see Sec. 740.13 of the EAR).

(vii) Governments and international organizations (GOV) (see

Sec. 740.10 of the EAR).

(viii) Gift parcels and humanitarian donations (GFT) (see

Sec. 740.11 of the EAR).

(ix) Items in transit (TMP) from Canada through the U.S. (see

Sec. 740.8(b)(1)(iv) of the EAR).

(x) Aircraft and vessels (AVS) for certain aircraft on temporary

sojourn (see Sec. 740.14(a) of the EAR).

* * * * *

23. Section 746.3 is amended by revising paragraph (a)(1) to read

as follows:

Sec. 746.3 Iraq.

(a) * * *

(1) License Exceptions. You may export or reexport without a

license if your transaction meets all the applicable terms and

conditions of one of the following License Exceptions. Read each

License Exception carefully, as the provisions available for embargoed

countries are generally narrow.

(i) Baggage (BAG) (See Sec. 740.13 of the EAR).

(ii) Governments and international organizations (GOV) (See

Sec. 740.10 of the EAR).

* * * * *

24. Section 746.4 is amended by revising paragraph (b) to read as

follows:

Sec. 746.4 Libya.

* * * * *

(b) License requirements.

(1) Exports. OFAC and BXA both require a license for virtually all

exports (including transshipments) to Libya. Except as noted in

paragraph (b) of this section or specified in OFAC regulation, you may

not use any BXA License Exception or other BXA authorization to export

or transship to Libya. You will need a license from OFAC for all direct

exports and transshipments to Libya except those eligible for the

following BXA License Exceptions:

(i) Baggage (BAG) (see Sec. 740.13 of the EAR).

(ii) Governments and international organizations (GOV) (see

Sec. 740.11 of the EAR).

(iii) Gift parcels (GFT) (see Sec. 740.11(a) of the EAR).

(2) Reexports. You will need a license from BXA to reexport any

U.S.-origin item from a third country to Libya, any foreign-

manufactured item containing U.S.-origin parts, components or

materials, as defined in Sec. 734.2(b)(2) of the EAR, or any national

security-controlled foreign-produced direct product of U.S. technology

or software, as defined in Sec. 734.2(b)(3) of the EAR, exported from

the U.S. after March 12, 1982. You will need a license from BXA to

reexport all items subject to the EAR (see part 734 of the EAR) to

Libya, except:

(i) Food, medicines, medical supplies, and agricultural

commodities;

(ii) Reexports eligible for the following License Exceptions (read

each License Exception carefully, as the provisions available for

embargoed countries are generally narrow):

(A) Temporary exports and reexports (TMP): reexports by the news

media (see Sec. 740.8(a)(2)(viii) of the EAR).

(B) Operation technology and software (TSU) for legally exported

commodities (see Sec. 740.12(a) of the EAR).

(C) Sales technology (TSU) (see Sec. 740.12(b) of the EAR).

(D) Software updates (TSU) for legally exported software (see

Sec. 740.12(c) of the EAR).

(E) Parts (RPL) for one-for-one replacement in certain legally

exported commodities (Sec. 740.9(a) of the EAR).

(F) Baggage (BAG) (Sec. 740.13 of the EAR).

(G) Aircraft and vessels (AVS) for vessels only (see

Sec. 740.14(c)(1) of the EAR).

(H) Governments and international organizations (GOV) (see

Sec. 740.10 of the EAR).

(I) Gift parcels and humanitarian donations (GFT) (see Sec. 740.11

of the EAR).

* * * * *

25. Section 746.5 is amended by revising paragraphs (a)(1) and

(b)(1) to read as follows:

Sec. 746.5 North Korea.

(a) * * *

(1) License Exceptions. You may export without a license if your

transaction meets all the applicable terms and conditions of any of the

License Exceptions specified in this paragraph. To determine scope and

eligibility requirements, you will need to turn to the sections or

specific paragraphs of part 740 of the EAR (License Exceptions). Read

each License Exception carefully, as the provisions available for

embargoed countries are generally narrow.

(i) Temporary exports and reexports (TMP) by the news media (see

Sec. 740.8(a)(2)(viii) of the EAR).

(ii) Operation technology and software (TSU) for legally exported

commodities (see Sec. 740.12(a) of the EAR).

(iii) Sales technology (TSU) (see Sec. 740.12(b) of the EAR).

(iv) Software updates (TSU) for legally exported software (see

Sec. 740.12(c) of the EAR).

(v) Parts (RPL) for one-for-one replacement in certain legally

exported commodities (Sec. 740.9(a) of the EAR).

[[Page 64285]]

(vi) Baggage (BAG) (Sec. 740.13 of the EAR).

(vii) Aircraft and vessels (AVS) for fishing vessels under

governing international fishery agreements and foreign-registered

aircraft on temporary sojourn in the U.S.1 (see Sec. 740.14(a) and

(c)(1) of the EAR).

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

\1\ Export of U.S. aircraft on temporary sojourn or vessels is

prohibited, 44 CFR Ch. IV, Part 403 ``Shipping restrictions: North

Korea (T-2).''

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

(viii) Governments and international organizations (GOV) (see

Sec. 740.10 of the EAR).

(ix) Gift parcels and humanitarian donations (GFT) (see Sec. 740.11

of the EAR).

* * * * *

(b) * * *

(1) BXA will review on a case-by-case basis applications for export

of donated human-needs items listed in Supplement No. 2 to Part 740 of

the EAR that do not qualify for the humanitarian donation provisions of

License Exception GFT (see Sec. 740.11(b) of the EAR). Such

applications include single transactions involving exports to meet

emergency needs.

* * * * *

PART 748--[AMENDED]

26. Supplement No. 2 to part 748 is amended by revising the

introductory text of paragraphs (d), (e), and (p) to read as follows:

Supplement No. 2 to Part 748--Unique License Application Requirements

* * * * *

(d) Gift parcels; consolidated in a single shipment. If you are

submitting a license application to export multiple gift parcels for

delivery to individuals residing in a foreign country, you must include

the following information in your license application. NOTE: Each gift

parcel must meet the terms and conditions described for gift parcels in

License Exception GFT (See Sec. 740.11(a) of the EAR).

* * * * *

(e) Intransit through the United States. If you are submitting a

license application for items moving intransit through the United

States that do not qualify for the intransit provisions of License

Exception TMP (see Sec. 740.8(b)(1) of the EAR), you must provide the

following information with your license application:

* * * * *

(p) Temporary exports or reexports. If you are submitting a license

application for the temporary export or reexport of an item (not

eligible for the temporary exports and reexports provisions of License

Exception TMP (see Sec. 740.9(a) of the EAR)) you must include the

following certification in Block 24:

* * * * *

26. Supplement No. 5 to part 748 is amended by revising paragraph

(a)(6)(vii) to read as follows:

Supplement No. 5 to Part 748--U.S. Import Certificate and Delivery

Verification Procedure

* * * * *

(a) * * *

(6) * * *

(vii) Reexport or transshipment of items after delivery to U.S.

Items imported into the U.S. under the provisions of a U.S.

International Import Certificate may not be reexported to any

destination under the intransit provisions of License Exception TMP

(see Sec. 740.8(b)(1) of the EAR). However, all other provisions of the

EAR applicable to items of domestic origin shall apply to the reexport

of items of foreign origin shipped to the U.S. under a U.S.

International Import Certificate.

* * * * *

PART 750--[AMENDED]

28. Section 750.7 is amended by revising paragraph (h)(2) to read

as follows:

Sec. 750.7 Issuance of licenses.

* * * * *

(h) * * *

(2) Intransit within the United States. If you have been issued a

license authorizing an intransit shipment (that does not qualify for

the intransit provisions of License Exception TMP) through the United

States, your license will be valid only for the export of the intransit

shipment wholly of foreign origin and for which a Transportation and

Exportation customs entry or an Immediate Exportation customs entry is

outstanding.

* * * * *

PART 752--[AMENDED]

29. Section 752.5 is amended by revising the introductory text of

paragraph (c)(8)(i) to read as follows:

Sec. 752.5 Steps you must follow to apply for an SCL.

* * * * *

(c) * * *

(8) * * *

(i) Temporary exports. Proposed consignees that plan to exhibit or

demonstrate items in countries other than those in which they are

located or are authorized under an SCL, an approved Form BXA-752, or a

License Exception provision described in Sec. 740.8(a)(2)(iii) of the

EAR may obtain permission to do so by including the following

additional certification on company letterhead, and attaching it to

Form BXA-752.

* * * * *

PART 758--[AMENDED]

30. Section 758.1 is amended by revising the first sentence of

paragraph (d)(2)(vi) to read as follows:

Sec. 758.1 Export clearance requirements.

* * * * *

(d) * * *

(2) * * *

(vi) Software and technology. If you are exporting software or

technology, the export of which is authorized under the License

Exceptions in Sec. 740.6 or Sec. 740.12 of the EAR, you do not need to

make any notation on the package. * * *

* * * * *

31. Section 758.3 is amended by revising the third and fourth

sentences of paragraph (h)(2) introductory text and the introductory

text of paragraph (m)(3)(ii)(C) to read as follows:

Sec. 758.3 Shipper's Export Declaration (SED).

* * * * *

(h) * * *

(2) Exports not needing a license. * * * If the item(s) will be

exported under the provisions of License Exceptions GBS, CIV, or LVS,

or under the ``NLR'' provisions of the EAR (as described in

Sec. 758.1(a) of this part) and the item(s) are covered by entries on

the Commerce Control List that have the column identifier ``NS Column

2'' controlled for ``NS'' reasons, the ECCN must also be shown in the

designated space on the SED or SED continuation sheet. The following

apply for notations made on SED:

* * * * *

(m) * * *

(3) * * *

(ii) * * *

(C) For intransit shipments of items of U.S.-origin eligible for

the intransit provisions of License Exception TMP (see Sec. 740.8(b) of

the EAR), enter the following statement:

* * * * *

32. Section 758.6 is amended by revising paragraph (a)(1)(ii) to

read as follows:

Sec. 758.6 Destination control statement.

(a) * * *

(1) * * *

(ii) The export is made under the authority of the following

License

[[Page 64286]]

Exceptions: LVS, GBS, CIV, CTP, TMP, or RPL; or

* * * * *

PART 770--[AMENDED]

33. Section 770.3 is amended by revising paragraphs (d)(1)(i)(B),

(d)(1)(ii), and (d)(2)(ii) to read as follows:

Sec. 770.3 Interpretations related to exports of technology and

software to destinations in Country Group D:1.

* * * * *

(d) * * *

(1) * * *

(i) * * *

(B) Can we send an engineer (with knowledge and experience) to the

customer site to perform the installation or repair, under the

provisions of License Exception for operation technology and software

described in Sec. 740.12(a) of the EAR, if it is understood that he is

restricted by our normal business practices to performing the work

without imparting the knowledge or technology to the customer

personnel?

(ii) Answer 1. Export of technology includes release of U.S.-origin

data in a foreign country, and ``release'' includes ``application to

situations abroad of personal knowledge or technical experience

acquired in the United States.'' As the release of technology in the

circumstances described here would exceed that permitted under the

License Exception for operation technology and software described in

Sec. 740.12(a) of the EAR, a license would be required even though the

technician could apply the data without disclosing it to the customer.

* * * * *

(2) * * *

(ii) Answer 2. (A) Provided that this is your normal training, and

involves technology contained in your manuals and standard instructions

for the exported equipment, and meets the other requirements of License

Exception for operation technology and software described in

Sec. 740.12(a), the training may be provided within the limits of those

provisions of License Exception TSU. The location of the training is

not significant, as the export occurs at the time and place of the

actual transfer or imparting of the technology to the customer's

engineers.

(B) Any training beyond that covered under the provisions of

License Exception TSU for operation technology and software described

in Sec. 740.12(a), but specifically represented in your license

application as required for this customer installation, and in fact

authorized on the face of the license or a separate technology license,

may not be undertaken while the license is suspended or revoked.

Dated: November 25, 1996.

Sue E. Eckert,

Assistant Secretary for Export Administration.

[FR Doc. 96-30502 Filed 12-3-96; 8:45 am]

BILLING CODE 3510-33-P