Exports to Kosovo

DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 738, 740, and 746

[Docket No. 990923261-9261-01]

RIN 0694-AB99

Exports to Kosovo

AGENCY: Bureau of Export Administration, Commerce.

ACTION: Final rule.

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SUMMARY: The Bureau of Export Administration (BXA) is amending the

Export Administration Regulations (EAR) to exempt the Serbian province

of Kosovo (``Kosovo'') from certain license requirements for exports

and reexports to Serbia of items subject to the Export Administration

Regulations (EAR).

EFFECTIVE DATE: This rule is effective November 5, 1999.

FOR FURTHER INFORMATION CONTACT: James A. Lewis, Director, Office of

Strategic Trade and Foreign Policy Controls, Bureau of Export

Administration, Telephone: (202) 482-4196.

SUPPLEMENTARY INFORMATION:

Background

In Resolution 1203 (adopted on October 24, 1998), the United

Nations Security Council (UNSC) expressed alarm at what it described as

the continuing grave humanitarian situation throughout Kosovo and the

impending humanitarian catastrophe there. In response to the Serbian

government's continued ethnic cleansing in its Kosovo province and its

rejection of the proposed peace agreement accepted by the Kosovars,

NATO (including the United States) took military action intended to

halt the mass killing and dislocation of ethnic Albanians in Kosovo and

to prevent a widening of the conflict.

In response to the situation in Kosovo, Executive Order 13121 of

April 30, 1999, tightened existing U.S. economic sanctions against

Serbia, including the province of Kosovo. On May 4, 1999, BXA published

a rule amending the

[[Page 60340]]

EAR to require a license for exports and reexports of all items subject

to the EAR to Serbia, including Kosovo (64 FR 24018). Executive Order

13121 delegated authority to administer the sanctions to the Department

of the Treasury's Office of Foreign Assets Control (OFAC). By issuing

General License 3 under the Kosovo Sanctions Regulations (31 CFR Part

586) on May 20, 1999, OFAC generally authorized certain transactions

incident to exports licensed by BXA, thereby eliminating the need to

seek separate authorization from two agencies for most export and

reexport transactions.

In the wake of the cessation of hostilities and the withdrawal of

Serbian troops from Kosovo, the United States Government is by this

rule exempting Kosovo from the additional license requirements imposed

on Serbia by the May 4, 1999, rule, thus returning Kosovo to the status

it had prior to that date. General License No. 4, issued by the Office

of Foreign Assets Control (OFAC) of the Department of the Treasury on

August 17, 1999, effects a complementary exemption of Kosovo from

OFAC's ``Federal Republic of Yugoslavia (Serbia and Montenegro) Kosovo

Sanctions Regulations' (see 31 CFR part 586).

For purposes of the EAR, this rule eliminates the term ``Federal

Republic of Yugoslavia'' and establishes Serbia, Kosovo, and Montenegro

as distinct destinations under the EAR. This distinction does not

address issues of sovereignty; it merely clarifies the applicability of

export controls under the EAR to different destinations. Although

comprehensive sanctions on Serbia (excluding Kosovo) remain in place,

both Kosovo and Montenegro retain, for License Exception eligibility

purposes, membership in ``Country Group B'' (see Supplement No. 1 to

part 740) and ``Computer Tier 3'' (see Sec. 740.7). Serbia, Kosovo, and

Montenegro are now listed separately in the Commerce Country Chart (see

Supplement No. 1 to part 738).

On July 14, 1998, BXA implemented an embargo on arms and arms-

related items in the Export Administration Regulations (EAR) that

applied to Serbia (including Kosovo) and Montenegro. The arms embargo

continues in effect, and this rule leaves provisions regarding the arms

embargo unaltered, except that ``Federal Republic of Yugoslavia (Serbia

and Montenegro)'' is revised to read ``Serbia, Kosovo, and

Montenegro.''

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

1994, the President invoked the International Emergency Economic Powers

Act (50 U.S.C. 1701 et seq.) and continued in effect the EAR, and to

the extent permitted by law, the provisions of the EAA in Executive

Order 12924 of August 19, 1994, as extended by the President's notices

of August 15, 1995 (60 FR 42767), August 14, 1996 (61 FR 42527), August

13, 1997 (62 FR 43629), August 13, 1998 (63 FR 44121), and August 10,

1999 (64 FR 44101, August 13, 1999).

Rulemaking Requirements

1. This final rule has been determined to be significant for

purposes of E.O. 12866.

2. This rule involves a collection 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 number 0694-0088, ``Multi-Purpose Application,'' which

carries a burden hour estimate of 40 minutes to prepare and submit

electronically and 45 minutes to submit manually on form BXA-748P.

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.

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 (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 final rule. Because a

notice of proposed rulemaking and an opportunity for public comment are

not required to be given for this rule under 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 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 Hillary

Hess, Regulatory Policy Division, Bureau of Export Administration,

Department of Commerce, P.O. Box 273, Washington, DC 20044.

List of Subjects

15 CFR Part 738

Administrative practice and procedure, Exports, Foreign trade.

15 CFR Part 740

Administrative practice and procedure, Exports, Foreign trade,

Reporting and recordkeeping requirements.

15 CFR Part 746

Embargoes, Exports, Foreign trade, Reporting and recordkeeping

requirements.

Accordingly, parts 738, 740, and 746 of the Export Administration

Regulations (15 CFR parts 730-99) are amended as follows:

1. The authority citation for 15 CFR part 738 is revised 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; 30 U.S.C. 185(s),

185(u); 42 U.S.C. 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., p. 228;

and Notice of August 10, 1999, 64 FR 44101 (August 13, 1999).

2. The authority citation for 15 CFR part 740 is revised 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. 13026, 61

FR 58767, 3 CFR, 1996 Comp., p. 228; and Notice of August 10, 1999,

64 FR 44101 (August 13, 1999).

3. The authority citation for part 746 is revised 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. 13026, 61

FR 58767, 3 CFR, 1996 Comp., p. 228; and Notice of August 10, 1999,

64 FR 44101 (August 13, 1999).

PART 738--[AMENDED]

4. Supplement No. 1 to Part 738 is amended by removing ``Serbia and

Montenegro'' and adding, in alphabetical order, ``Kosovo,''

``Montenegro,'' and ``Serbia,'' to read as follows:

Supplement No. 1 to Part 738--COMMERCE COUNTRY CHART

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[[Page 60341]]

Commerce Country Chart

[Reason for Control]

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Chemical & Biological Nuclear National Missile Regional Firearms Crime Control Anti-

Weapons Nonproliferation Security Tech Stability Convention ------------------------ Terrorism

Countries ----------------------------------------------------------------------------------------------- ---------------

CB 1 CB 2 CB 3 NP 1 NP 2 NS 1 NS 2 MT 1 RS 1 RS 2 FS 1 CC 1 CC 2 CC 3 AT 1 AT 2

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Kosovo (Serbian province of)............................. X X X X X X X X X X

Montenegro............................................... X X X X X X X X X X

Serbia (not including Kosovo)............................ See part 746 of the EAR to determine whether a license is required in order to export or reexport to this destination.

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* * * * *

PART 740--[AMENDED]

5. Section 740.7 is amended by removing ``Serbia & Montenegro''

from paragraph (d)(1) and by adding, in alphabetical order, ``Kosovo

(Serbian province of),'' ``Montenegro,'' and ``Serbia''.

6. Supplement No. 1 to part 740 is amended by removing ``Serbia &

Montenegro'' from the list of ``Country Group B'' countries and by

adding, in alphabetical order, ``Kosovo (Serbian province of)'' and

``Montenegro''.

PART 746--[AMENDED]

7. Section 746.9 is revised to read as follows:

Sec. 746.9 Serbia, Kosovo, and Montenegro.

The Department of Commerce maintains a comprehensive embargo on

exports and reexports to Serbia, excluding the Serbian province of

Kosovo (``Kosovo''). For purposes of the EAR, Serbia (excluding

Kosovo), Kosovo, and Montenegro are separate destinations under the

EAR. Additionally, a United Nations mandated arms embargo applies to

certain items destined to Serbia, Kosovo, and Montenegro.

(a) Serbia. (1) License requirements. You will need a license to

export or reexport all items subject to the EAR to Serbia, except as

specified in paragraph (a)(3) of this section. This requirement does

not apply to Kosovo or Montenegro; controls set forth in other parts of

the EAR (e.g., the Commerce Country Chart) remain in effect for items

destined to Kosovo or Montenegro.

(2) Licensing policy. Applications for export or reexport of all

items subject to the EAR to Serbia will be reviewed on a case-by-case

basis, with a presumption of denial for any items other than

humanitarian items. BXA will approve sales of agricultural commodities

and products, medicine, and medical equipment for civilian end-use when

appropriate safeguards can be developed to prevent diversion to

military, paramilitary or political use.

(3) License Exceptions. Items consigned to and for use by personnel

and agencies of the U.S. Government under License Exception GOV (see

Sec. 740.11(b)(2) of the EAR) and individual gift parcels under License

Exception GFT (see Sec. 740.12(a) of the EAR) may be exported or

reexported to Serbia, and temporary exports or reexports by the news

media may be made to Serbia under License Exception TMP (see

Sec. 740.9(a)(2)(viii) of the EAR). No other License Exceptions are

available for Serbia.

(b) Serbia, Kosovo, and Montenegro. (1) License requirements. Under

Executive Order 12918 of May 26, 1994 (59 FR 28205, 3 CFR, 1994 Comp.,

p. 899) (which authorizes the Secretary of State and the Secretary of

Commerce, under section 5 of the United Nations Participation Act and

other authorities available to the respective Secretaries, to take all

actions necessary to implement any arms embargo mandated by resolution

of the United Nations Security Council), and in conformity with United

Nations Security Council (UNSC) Resolution 1160 of March 31, 1998, an

embargo applies to the sale or supply to Serbia, Kosovo, or Montenegro

of arms and related materiel of all types and regardless of origin,

such as weapons and ammunition, military vehicles and equipment, and

spare parts for such items. You will therefore need a license for the

sale, supply or export to Serbia, Kosovo, or Montenegro from the United

States of embargoed items, as listed in paragraphs (b)(1)(i) and (ii)

of this section. You will also need a license for the sale, supply,

export or reexport to Serbia, Kosovo, or Montenegro of such items by

any United States person in any foreign country or other location.

(Reexport controls imposed under this paragraph (b)(1) apply only to

reexports by U.S. persons. Reexport controls on U.S.-origin items to

Serbia, Kosovo, or Montenegro set forth in other parts of the EAR

remain in effect.) You will also need a license for the use of any

U.S.-registered aircraft or vessel to supply or transport to Serbia,

Kosovo, or Montenegro any such items. These requirements apply to

embargoed items specified in paragraphs (b)(1)(i) and (b)(1)(ii) of

this section, regardless of origin.

(i) Crime Control and Detection Equipment as identified on the CCL

under CC Columns No. 1, 2 or 3 in the Country Chart column of the

``License Requirements'' section of the applicable ECCN.

(ii) Items described by ECCNs ending in ``018''; and 0A982, 0A983,

0A984, 0A985, 0A986, 0A988, 0A989, 0B986, 0E984, 1A005, 1A984, 1C998,

2A993, 3A980, 3A981, 3D980, 3E980, 4A980, 4D980, 4E980, 5A980, 6A002,

6A003.b.3 and b.4, 6E001, 6E002, 9A980, and 9A991.a.

(2) Date of embargo. The licensing requirements in paragraph (b) of

this section were effective on July 14, 1998.

(3) License policy. Applications for export or reexport of all

items listed in paragraphs (b)(1)(i) and (ii) of this section are

subject to a general policy of denial. Consistent with United Nations

Security Council Resolution 1160, this embargo is effective

notwithstanding the existence of any rights or obligations conferred or

imposed by any international agreement or any contract entered into or

any license or permit granted prior to July 14, 1998, except to the

extent provided in regulations, orders, directives or licenses that may

be issued in the future under Executive Order 12918 or under the EAR.

(c) Related controls. The Department of State, Office of Defense

Trade Controls, maintains related controls on arms and military

equipment under the International Traffic in Arms Regulations (22 CFR

parts 120 through 130). You should also contact the Department of the

Treasury's Office of Foreign Assets Control concerning any restrictions

which might apply to U.S. persons involving financial transactions with

Serbia, Kosovo, or Montenegro, including those transactions related to

the export or reexport of services and non-U.S.-origin items.

[[Page 60342]]

Dated: October 28, 1999.

R. Roger Majak,

Assistant Secretary for Export Administration.

[FR Doc. 99-28855 Filed 11-4-99; 8:45 am]

BILLING CODE 3510-DT-P