Revision To ECCN 1C350 (Mixtures): Removal of Solvent Free Basis Calculation Requirement and Trace Quantity Exemption

DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 770 and 774

[Docket No. 980219044-8044-01]

RIN 0694-AB66

Revision To ECCN 1C350 (Mixtures): Removal of Solvent Free Basis

Calculation Requirement and Trace Quantity Exemption

AGENCY: Bureau of Export Administration, Commerce.

ACTION: Final rule.

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

SUMMARY: Chemicals capable of being used as precursors for chemical

weapons agents are controlled for export on the Commerce Control List

under Export Control Classification Number 1C350. Note 2 of the License

Requirement Notes section of ECCN

[[Page 14029]]

1C350 describes the three tier de minimis exemption for mixtures that

contain these controlled chemicals. The de minimis exemption is based

on the weight percentage (0%, 10%, and 25%) of these controlled

chemicals within the mixture calculated on a ``solvent free basis''.

This rule removes the requirement to calculate the weight percentage on

a ``solvent free basis.'' Therefore, the de minimis exemption for

mixtures will now be based on the weight percentage of controlled

chemicals calculated on the absolute (total) weight of the mixture.

The removal of the ``solvent free basis'' calculation requirement

eliminates the necessity of the ``trace quantity'' exemption. The trace

quantity exemption permitted exports of mixtures of concentrations of

no more than 10,000 parts by weight per million of certain controlled

chemicals. Therefore, the ``trace quantity'' exemption is removed.

Although the EAA expired on August 20, 1994, the President,

invoking the International Emergency Powers Act (IEEPA), continued in

effect the export control system in place under the provisions of the

Act and the Export Administration Regulations, to the extent permitted

by law (Executive Order 12924 of August 19, 1994 and Notices of August

15, 1995, August 14, 1996 and August 13, 1997).

EFFECTIVE DATE: March 24, 1998.

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

contact Mr. Jim Seevaratnam, Office of Chemical and Biological Controls

and Treaty Compliance, at (202) 482-3343 or facsimile (202) 482-0751.

For questions of a general nature, call Sharron Cook, Regulatory

Policy Division, at (202) 482-2440.

SUPPLEMENTARY INFORMATION:

Background

The Australia Group (AG) recently held its annual consultations on

ways to prevent the proliferation of chemical and biological weapons.

The AG, an informal arrangement between 30 countries and the

European Commission, was initiated by Australia in 1985, after the

United Nations discovered that chemical weapons had been used in the

Iran-Iraq war. The AG's participants include: Argentina, Australia,

Austria, Belgium, Canada, the Czech Republic, Denmark, the European

Commission, Finland, France, Germany, Greece, Hungary, Iceland,

Ireland, Italy, Japan, Korea (the Republic of), Luxembourg,

Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovak

Republic, Spain, Sweden, Switzerland, United Kingdom and the United

States.

In 1994, in accordance with AG policy, BXA revised Note 2 to former

ECCN 1C60 (currently 1C350) to establish a three-tiered approach to

requiring licenses for mixtures containing controlled chemicals (59 FR

52685 October 19, 1994). That revision permitted export and reexports

without a license when the amount of a controlled chemical in the

mixture did not exceed a specified weight percentage (0% for tier 1,

10% for tier 2, 25% for tier 3). The calculation was done on a

``solvent free basis'', meaning that the amount of the solvent had to

be subtracted before the weight percentage of the controlled chemical

could be determined. This method of calculation proved difficult to

implement for both exporters and other AG member governments. At the

October 1997 session, the AG decided to change the method of

calculation from ``solvent free basis'' to ``absolute weight.'' This

change will simplify calculation and improve the coordination of the

mixtures policy among AG members, while not compromising our

nonproliferation objectives.

Rulemaking Requirements

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

purposes of Executive Order 12866.

2. This rule involves collections of information subject to the

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

collections have been approved by the Office of Management and Budget

under control numbers 0694-0086,'Sample Shipment quarterly report,''

which carries a burden hour estimate of 35 minutes per submission; and

0694-0088, ``Multi-Purpose Application,'' which carries a burden hour

estimate of 52.5 minutes per submission. There will be a decrease of

approximately 100 Multi-Purpose Applications per year as a result of

the revisions in this rule. Send comments on burden, or any other

aspect of these collections of information to Linda Engelmeier,

Departmental Clearance Officer, Department of Commerce, Room 5327, 14th

and Constitution Avenue, NW, Washington DC 20230, and to the Office of

Information and Regulatory Affairs, Office of Management and Budget,

Washington, DC 20503 (Attention: BXA Desk Officer).

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

required to respond nor shall any 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.

4. This rule does not contain policies with Federalism implications

sufficient to warrant preparation of a Federalism assessment under

Executive Order 12612.

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

553) requiring notice of proposed rulemaking, an 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 (see 5 U.S.C. 553(a)(1)). 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. 601et seq.)

are not applicable.

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 Sharron

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

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

Washington, D.C. 20044.

List of Subjects

15 CFR Part 770

Exports.

15 CFR Part 774

Exports, Reporting and recordkeeping requirements.

Accordingly, parts 770 and 774 of the Export Administration

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

1. The authority citation for 15 CFR Part 770 continues to read as

follows:

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

12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; E.O. 13026, 61 FR

58767, 3 CFR, 1996 Comp. 228 (1997); Notice of August 15, 1995, 3

CFR, 1995 Comp. 501 (1996); Notice of August 14, 1996, 3 CFR, 1996

Comp. 298 (1997); Notice of August 13, 1997 (62 FR 43629, August 15,

1997).

2. The authority citation for 15 CFR part 774 continues to read as

follows:

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

10 U.S.C. 7420; 10 U.S.C. 7430(e); 18 U.S.C. 2510 et seq.; 22 U.S.C.

287c; 22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; Sec. 201, Pub. L. 104-

58, 109 Stat. 557 (30 U.S.C. 185(s)); 30 U.S.C. 185(u); 42 U.S.C.

[[Page 14030]]

2139a; 42 U.S.C. 6212; 43 U.S.C. 1354; 46 U.S.C. app. 466c; 50

U.S.C. app. 5; E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917;

E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp. 228 (1997); Notice of

August 15, 1995, 3 CFR, 1995 Comp. 501 (1996); Notice of August 14,

1996, 3 CFR, 1996 Comp. 298 (1997); Notice of August 13, 1997 (62 FR

43629, August 15, 1997).

PART 770--[AMENDED]

Sec. 770.4 [Removed]

3. Part 770 is amended by removing Sec. 770.4, ``Interpretations

related to chemical mixtures--de minimis exceptions examples.''

PART 774--[AMENDED]

4. Supplement No. 1 to part 774 (Commerce Control List), Category 1

(Materials, Chemicals, ``Microorganisms'', & ``Toxins''), is amended by

revising the License Requirements section of ECCN 1C350, to read as

follows:

Supplement No. 1 to Part 774--the Commerce Control List

* * * * *

Category 1--Materials, Chemicals, ``Microorganisms'', & ``Toxins''

* * * * *

C. Materials

* * * * *

1C350 Chemicals that may be used as precursors for toxic chemical

agents, as follows (see List of Items Controlled).

License Requirements

Reason for Control: CB, AT

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

Control(s) Country chart

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

CB applies to entire entry............. CB Column 2.

AT applies to entire entry............. AT Column 1.

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

License Requirement Notes:

1. SAMPLE SHIPMENTS: Certain sample shipments of chemicals

controlled under ECCN 1C350 may be made without a license, as

provided by the following:

a. Chemicals Not Eligible: The following chemicals are not

eligible for sample shipments: 0-Ethyl-2-diisopropylaminoethyl

methylphosphonite (QL) (C.A.S. #57856-11-8), Ethylphosphonyl

difluoride (C.A.S. #753-98-0), and Methylphosphonyl difluoride

(C.A.S. #676-99-3).

b. Countries Not Eligible: The following countries are not

eligible to receive sample shipments: Cuba, Iran, Iraq, Libya, North

Korea, Sudan, Syria.

c. Sample Shipments: A license is not required for sample

shipments when the cumulative total of these shipments does not

exceed a 55-gallon container or 200 kg of each chemical to any one

consignee per calendar year. Multiple sample shipments, in any

quantity, not exceeding the cumulative totals indicated in this

paragraph may be exported without a license, in accordance with the

provisions of this Note 1. A consignee that receives a sample

shipment under this exclusion may not resell, transfer or reexport

the sample shipment, but may use the sample shipment for any other

legal purpose unrelated to chemical weapons. However, a sample

shipment received under this exclusion remains subject to all

General Prohibitions including the end-use restriction described in

Sec. 744.4 of the EAR.

d. The exporter is required to submit a quarterly written report

for shipments of samples made under this Note 1. The report must be

on company letterhead stationery (titled ``Report of Sample

Shipments of Chemical Precursors'' at the top of the first page) and

identify the chemical(s), Chemical Abstract Service Registry

(C.A.S.) number(s), quantity(ies), the ultimate consignee's name and

address, and the date exported. The report must be sent to the U.S.

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

273, Washington, DC 20044, Attn: ``Report of Sample Shipments of

Chemical Precursors''.

2. MIXTURES: Mixtures controlled by this entry that contain

certain concentrations of precursor and intermediate chemicals are

subject to the following licensing requirements:

a. A license is required, regardless of the concentrations in

the mixture, for the following chemicals: 0-Ethyl-2-

diisopropylaminoethyl methylphosphonite (QL) (C.A.S.57856-

11-8), Ethylphosphonyl difluoride (C.A.S.753-98-0) and

Methylphosphonyl difluoride (C.A.S.676-99-3);

b. A license is required when at least one of the following

chemicals constitutes more than 10 percent of the weight of the

mixture: Arsenic trichloride (C.A.S.#7784-34-1), Benzilic acid

(C.A.S.#76-93-7), Diethyl ethylphosphonate (C.A.S.#78-38-6), Diethyl

methylphosphonite (C.A.S.#15715-41-0), Diethyl-N,N-

dimethylphosphoroamidate (C.A.S.#2404-03-7), N,N-Diisopropyl-beta-

aminoethane thiol (C.A.S.#5842-07-9), N,N-Diisopropyl-2-aminoethyl

chloride hydrochloride (C.A.S.#4261-68-1), N,N-Diisopropyl-beta-

aminoethanol (C.A.S.#96-80-0), N,N-Diisopropyl-beta-aminoethyl

chloride (C.A.S.#96-79-7), Dimethyl ethylphosphonate (C.A.S.#6163-

75-3), Dimethyl methylphosphonate (C.A.S.#756-79-6),

Ethylphosphonous dichloride [Ethylphosphinyl dichloride]

(C.A.S.#1498-40-4), Ethylphosphonus difluoride [Ethylphosphinyl

difluoride] (C.A.S.#430-78-4), Ethylphosphonyl dichloride

(C.A.S.#1066-50-8), Methylphosphonous dichloride [Methylphosphinyl

dicloride] (C.A.S.#676-83-5), Methylphosphonous difluoride

[Methylphosphinyl difluoride] (C.A.S.#753-59-3), Methylphosphonyl

dichloride (C.A.S.#676-97-1), Pinacolyl alcohol (C.A.S.#464-07-3),

3-Quinuclidinol (C.A.S.#1619-34-7), and Thiodiglycol (C.A.S.#111-48-

8) (Related ECCN: 1C995);

c. A license is required when at least one of all other

chemicals in the List of Items Controlled constitutes more than 25

percent of the weight of the mixture(related ECCN: 1C995); and

d. A license is not required under this entry for mixtures when

the controlled chemical is a normal ingredient in consumer goods

packaged for retail sale for personal use. Such consumer goods are

controlled by ECCN EAR99.

Note to Mixtures: Calculation of concentrations of AG-controlled

chemicals:

a. Exclusion. No chemical may be added to the mixture (solution)

for the sole purpose of circumventing the Export Administration

Regulations;

b. Absolute Weight Calculation. When calculating the percentage,

by weight, of components in a chemical mixture, include all

components of the mixture, including those that act as solvents;

c. Example.

11% chemical listed in paragraph b. of Note 2

39% chemical not listed in Note 2

50% Solvent

100% Mixture

11/100 = 11% chemical listed in paragraph b. of Note 2.

In this example, a license is required because a chemical listed

in paragraph b. of Note 2 constitutes more than 10 percent of the

weight of the mixture.

3. COMPOUNDS: A license is not required under this entry for

chemical compounds created with any chemicals identified in this

ECCN 1C350, unless those compounds are also identified in this

entry.

Technical Notes: 1. For purposes of this entry, a ``mixture'' is

defined as a solid, liquid or gaseous product made up of two or more

components that do not react together under normal storage

conditions.

2. The scope of this control applicable to Hydrogen Fluoride

(Item 25 in List of Items Controlled) includes its liquid, gaseous,

and aqueous phases, and hydrates.

* * * * *

Dated: March 17, 1998.

R. Roger Majak,

Assistant Secretary for Export Administration.

[FR Doc. 98-7493 Filed 3-23-98; 8:45 am]

BILLING CODE 3510-33-P