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Clarifications and Corrections to the Export Administration Regulations (EAR): Control of Spacecraft Systems and Related Items the President Determines No Longer Warrant Control Under the United States Munitions List (USML)
This final rule makes corrections and clarifications to the interim final rule, Revisions to the Export Administration Regulations (EAR): Control of Spacecraft Systems and Related Items the President Determines No Longer Warrant Control Under the United States Munitions List (USML), that was published on May 13, 2014 (79 FR 27417) (May 13 interim final rule). The May 13 rule added controls to the Export Administration Regulations (EAR) for spacecraft and related items that the President has determined no longer warrant control under United States Munitions List (USML) Category XV—spacecraft and related items. New Export Control Classification Numbers (ECCNs) 9A515, 9B515, 9D515, and 9E515 created by the May 13 rule and preexisting ECCNs on the Commerce Control List (CCL) will control such items. The May 13 rule also revised various sections of the EAR to provide the proper level of control for the new ECCNs.
The vast majority of the changes included in the May 13 rule have been implemented as published in the interim final rule, so those change are not republished in this final rule. A full description of those changes can be found in the Background section and the regulatory text of the May 13 rule. The changes included in this final rule are limited to corrections and clarifications to what was included in the interim final rule. These corrections and clarifications were also informed by comments received in response to the May 13 rule that included a request for comments. This rule also adds a clarification to § 758.6 of the EAR stating that compliance with 22 CFR 123.9(b)(1) is sufficient to satisfy the Destination Control Statement requirement for the EAR of shipments that include both items subject to the EAR and items subject to the International Traffic in Arms Regulations (ITAR).
The May 13 rule was published in conjunction with the publication of a Department of State, Directorate of Defense Trade Controls rule revising USML Category XV to control those articles the President has determined warrant control on the USML. Both rules, including the final rules published May 13 by the Departments of Commerce and State and the rules making corrections to the May 13 rules, are part of the President’s Export Control Reform Initiative. The corrections and clarifications to the May 13 rule are also part of Commerce’s retrospective regulatory review plan under Executive Order (EO) 13563.
In § 734.4 (De minimis U.S. content) under the introductory text of paragraph (a)(6), this final rule adds a reference to 9×515 to conform to the scope of paragraph (a)(6)(i) and (ii). The May 13 interim final rule added 9×515 to paragraph (a)(6)(i) and (ii), but did not add a reference to the introductory text of paragraph (a)(6). In order to provide greater clarity regarding the scope of paragraph (a)(6) and to conform with the existing text of paragraphs (a)(6)(i) and (ii), this final rule adds the reference to 9×515 to the introductory text of this paragraph.
In § 740.2 (Restrictions on all license exceptions) under paragraph (a)(5)(i), this final rule revises the cross reference to § 740.15(b) (License Exception AVS) to reference the correct name of the license exception. The May 13 final rule revised the heading of License Exception AVS, but inadvertently omitted the phrase “or spacecraft” when referencing the scope of License Exception AVS in paragraph (a)(5)(i) of this section.
In Supplement No. 2 to part 748 (Unique Application and Submission Requirements), this final rule revises the introductory text in paragraph (y)(1) and the introductory text in paragraph (y)(2) to make the same clarification. This final rule removes the phrase “to a country” and replaces that phrase with the more specific phrase “for launch in or by a country”. The intent of both of these paragraphs is to require unique application and submission requirements for exports of satellites under ECCN 9A515.a for launch in or by one of the countries identified under (y)(1) or (y)(2). The new text will make it clearer for when applications will be subject to these unique application and submission requirements.
In the Commerce Control List in Supplement No. 1 to part 774, this final rule makes clarifications to three Export Control Classification Numbers (ECCNs): 9A004, 9A515 and 9E515, and adds a new Note to Category 9.
In Category 9 under Product Group E: “Technology,” this final rule redesignates the Note to Product Group E as Note 1 and adds a new Note 2 to Product Group E. This final rule adds Note 2 to provide guidance on the classification of telemetry data specific to commodities classified under ECCNs 9A004 and 9A515. This is the same type of note that was included in ECCN 9E515 under Note 3 in the interim final rule, but because the note also has applicability to ECCNs 9E001 and 9E002, as they relate to 9A004, BIS decided to remove Note 3 to 9E515 and add in its place a Note 2 that covers the concept for purposes of Category 9 Product Group E. This note clarifies that for purposes of Category 9, Product Group E that ECCNs 9E001, 9E002 and 9E515 do not control the data transmitted to or from a satellite or “spacecraft,” whether real or simulated, when limited to information about the health, operational status, or measurements or function of, or raw sensor output from, the “spacecraft,” “spacecraft” payload(s), or its associated subsystems or components. This note clarifies that such information is not within the scope of information captured within the definition of “technology” in the EAR for purposes of ECCNs 9E001, 9E002 or 9E515.
ECCN 9A004. In ECCN 9A004, this final rule adds an items paragraph .y to the List of Items Controlled section. This new items paragraph .y will control items that would otherwise be within the scope of 9A004.x but that have been identified in an interagency-cleared commodity classification (CCATS) pursuant to § 748.3(e) as warranting control in 9A004.y. The § 748.3(e) CCATS process is an established process under the EAR. This clarification to 9A004 specifies where certain spacecraft related items determined to not warrant being classified as “specially designed” under a 9×515 ECCN may be designated on the CCL that would otherwise have been classified under 9A00.x and controlled for national security NS 1 reasons. Items determined to be classified under 9A004.y will be controlled for anti-terrorism AT 1 reasons to fewer destinations compared to items classified under 9A004.x.
ECCN 9A515. This final rule makes three clarifications to ECCN 9A515.The final rule adds a Related Controls paragraph in the List of Items Controlled section to inform people to see ECCN 9A610.g for pressure suits used for high altitude aircraft. This new Related Controls paragraph is a conforming change for the additions of new “items” paragraph f in 9A515, described below.
This final rule also revises the Note to items paragraph .a in the List of Items Controlled section. The revision to the note consists of removing the phrase “not identified in USML Category XV(a)” from the middle of the note and adding it to the end of this note. The phrase “not identified in USML Category XV(a)” is intended to modify all the items referenced earlier in the note. Therefore, the placement of the phrase in the context of the larger note was not correct. This final rule corrects the placement of this phrase by adding it to the end of the Note to paragraph .a in the List of Items Controlled section.
Lastly, for ECCN 9A515, this final rule also adds a new items paragraph .f in the List of Items Controlled section of 9A515 to clarify that pressure suits (i.e., space suits) capable of operating at altitudes 55,000 feet above sea level are controlled under this ECCN. These space suits were removed from USML Category XV and were intended to be classified under 9A515, but because of an oversight an items paragraph was not included in 9A515 to control these suits, although the intent as stated in the May 13 interim final rule was that such commodities would be controlled along with the other “spacecraft” and related commodities in 9A515.
ECCN 9E515. This final rule removes Note 3 to 9E515 at the end of the “items” paragraph in the List of Items Controlled section to conform to the addition of the same type of note to Category 9 Product Group E: Technology, which was described above. The substance of the note is the same, only the location has been changed in Category 9 because of the note’s applicability to other Category 9 technology ECCNs, specifically 9E001, 9E002 and 9E515.
Other Clarifications to the EAR
This rule also add a clarification to § 758.6 of the EAR stating that compliance with 22 CFR 123.9(b)(1) is sufficient to satisfy the Destination Control Statement requirement for the EAR for shipments that include both items subject to the EAR and to the International Traffic in Arms Regulations (ITAR).
Addressing Public Comments That May Be Received
The May 13 interim final rule requested public comment through November 10, 2014. BIS will review all comments received at that time and address them through a subsequent rulemaking.
As required by Executive Order (EO) 13563, BIS intends to review this rule’s impact on the licensing burden on exporters. Commerce’s full plan is available at: http://open.commerce.gov/news/2011/08/23/commerce-plan-analysis-existing-rules. Data are routinely collected on an ongoing basis, including through the comments to be submitted and as a result of new information and results from AES data. These results and data have been, and will continue to form, the basis for ongoing reviews of the rule and assessments of various aspects of the rule. As part of its plan for retrospective analysis under EO 13563, BIS intends to conduct periodic reviews of this rule and to modify, or repeal, aspects of this rule, as appropriate, and after public notice and comment. With regard to a number of aspects of this rule, assessments and refinements will be made on an ongoing basis. This is particularly the case with regard to possible modifications that will be considered based on public comments described above.
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