80 FR 29530 - Russian Sanctions: Revisions and Clarifications for Licensing Policy for the Crimea Region of Ukraine

DEPARTMENT OF COMMERCE
Bureau of Industry and Security

Federal Register Volume 80, Issue 99 (May 22, 2015)

The Bureau of Industry and Security (BIS) issues this final rule to amend the Export Administration Regulations (EAR) to facilitate Internet-based communications with persons in the Crimea region of Ukraine. This final rule allows exports or reexports without a license to the Crimea region of Ukraine of software that is necessary to enable the exchange of personal communications over the Internet, provided that such software is designated EAR99, or is classified as mass market software under Export Control Classification Number (ECCN) 5D992.c of the EAR, and provided further that such software is widely available to the public at no cost to the user. This final rule is being published simultaneously with the Department of the Treasury's Office of Foreign Assets Control (OFAC) issuance of General License No. 9, which authorizes the export or reexport from the United States or by U.S. persons to the Crimea region of Ukraine of certain services and software incident to the exchange of personal communications over the Internet. This action is consistent with the U.S. Government's policy to promote personal communications between the people in Crimea and the outside world. Lastly, this final rule makes clarifications to the EAR with respect to the addition of the Crimea region of Ukraine provisions in a final rule published on January, 29, 2015, to the EAR. These clarifications are in response to requests that BIS received for guidance on applying these provisions.

[Federal Register Volume 80, Number 99 (Friday, May 22, 2015)]
[Rules and Regulations]
[Pages 29530-29533]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-12267]


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

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 738, 740, and 746

[Docket No. 150302205-5205-01]
RIN 0694-AG54


Russian Sanctions: Revisions and Clarifications for Licensing 
Policy for the Crimea Region of Ukraine

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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

SUMMARY: The Bureau of Industry and Security (BIS) issues this final 
rule to amend the Export Administration Regulations (EAR) to facilitate 
Internet-based communications with persons in the Crimea region of 
Ukraine. This final rule allows exports or reexports without a license 
to the Crimea region of Ukraine of software that is necessary to enable 
the exchange of personal communications over the Internet, provided 
that such software is designated EAR99, or is classified as mass market 
software under Export Control Classification Number (ECCN) 5D992.c of 
the EAR, and provided further that such software is widely available to 
the public at no cost to the user. This final rule is being published 
simultaneously with the Department of the Treasury's Office of Foreign 
Assets Control (OFAC) issuance of General License No. 9, which 
authorizes the export or reexport from the United States or by U.S. 
persons to the Crimea region of Ukraine of certain services and 
software incident to the exchange of personal communications over the 
Internet. This action is consistent with the U.S. Government's policy 
to promote personal communications between the people in Crimea and the 
outside world.
    Lastly, this final rule makes clarifications to the EAR with 
respect to the addition of the Crimea region of Ukraine provisions in a 
final rule published on January, 29, 2015, to the EAR. These 
clarifications are in response to requests that BIS received for 
guidance on applying these provisions.

DATES: This rule is effective May 22, 2015.

FOR FURTHER INFORMATION CONTACT: Eileen Albanese, Director, Office of 
National Security and Technology Transfer Controls, Bureau of Industry 
and Security, Department of Commerce, Phone: (202) 482-0092, Fax: (202) 
482-482-3355, Email: [email protected]. For emails, include ``Russia'' 
in the subject line.

SUPPLEMENTARY INFORMATION: On January 29, 2015, the Bureau of Industry 
and Security (BIS) published the final rule Russian Sanctions: 
Licensing Policy for the Crimea Region of Ukraine (80 FR 4776) 
(hereinafter the ``January 29 rule''). The January 29 rule imposed 
additional sanctions that implemented U.S. policy toward Russia.
    Specifically, the January 29 rule imposed a license requirement for 
the export and reexport to the Crimea region of Ukraine, and the 
transfer within the Crimea region of Ukraine, of all items subject to 
the EAR, other than food and medicine designated as EAR99. The January 
29 rule also added other provisions specific to the Crimea region of 
Ukraine. This action was consistent with the goals and objectives of 
Executive Order 13685.

Background for Executive Order 13685

    This Order took additional steps to address the national emergency 
declared in Executive Order 13660 of March 6, 2014 (as expanded by 
Executive Order 13661 of March 16, 2014 and Executive Order 13662 of 
March 20, 2014), finding that the actions and policies of the 
Government of the Russian Federation with respect to Ukraine--including 
the deployment of Russian Federation military forces in the Crimea 
region of Ukraine--undermine democratic processes and institutions in 
Ukraine; threaten its peace, security, stability, sovereignty, and 
territorial integrity; and contribute to the misappropriation of its 
assets, and thereby constitute an unusual and extraordinary threat to 
the national security and foreign policy of the United States.
    In part, Executive Order 13685 prohibits certain transactions with 
respect to the Crimea region of Ukraine, including the export, 
reexport, sale or supply, directly or indirectly, from the United 
States, or by a U.S. person, of any goods, services or technology to 
the Crimea region of Ukraine. Under Section 10 of Executive Order 
13685, all agencies of the United States Government are directed to 
take all appropriate measures within their authority to carry out the 
provisions of the Order.

Permitted Exports and Reexports of Certain Software to the Crimea 
Region of Ukraine

    This final rule published today makes additional changes to the EAR 
for the Crimea region of Ukraine. Specifically, in Sec.  746.6, this 
final rule revises paragraph (a) (license requirements) to

[[Page 29531]]

add an additional sentence that allows exports or reexports without a 
license to the Crimea region of Ukraine and transfers (in-country) 
within the Crimean region of Ukraine of certain software (described 
further below) that is necessary to enable the exchange of personal 
communications over the Internet.
    This change to the license requirements, in addition to relieving a 
regulatory burden on exporters, reexporters, and transferors of such 
software, may also facilitate Internet-based communication between 
people located in the Crimea region of Ukraine and other people around 
the world. Facilitating such Internet-based communication with the 
people located in the Crimea region of Ukraine is in the United States' 
national security and foreign policy interests because it helps the 
people of the Crimea region of Ukraine communicate with the outside 
world. Persons in the Crimea region of Ukraine may use such Internet-
based communication to describe their situation directly and counter 
any false messages being propagated by those currently exercising 
control over the Crimea region of Ukraine.
    By creating an opportunity for the people of the Crimea region of 
Ukraine to draw attention to these issues, this final rule may reduce 
the ability of Russia, and those acting on Russia's behalf in the 
Crimea region of Ukraine, to control the narrative of local events. In 
addition, creating an opportunity for people in the Crimea region of 
Ukraine to draw attention to these issues may also encourage other 
countries to join with the United States and other like-minded 
countries currently imposing sanctions on Russia as a result of their 
activities in the Crimea region of Ukraine and other parts of eastern 
Ukraine, which is also in the national security and foreign policy 
interests of the United States.
    This final rule is being published simultaneously with the 
Department of the Treasury's Office of Foreign Assets Control (OFAC) 
issuance of General License No. 9--Exportation of Certain Services and 
Software Incident to Internet-Based Communications Authorized. This 
general license authorizes the export or reexport, directly or 
indirectly, from the United States or by U.S. persons to the Crimea 
region of Ukraine of certain services incident to the exchange of 
personal communications over the Internet, such as instant messaging, 
chat and email, social networking, sharing of photos and movies, web 
browsing, and blogging, provided that such services are publicly 
available at no cost to the user, subject to certain exclusions. 
General License 9 further authorizes, in relevant part, the export or 
reexport, directly or indirectly, from the United States or by U.S. 
persons, wherever located, to persons in the Crimea region of Ukraine 
of software necessary to enable the services described above, provided 
that such software is designated as EAR99 or is classified as mass 
market software under ECCN 5D992.c of the EAR, and provided further 
that such software is widely available to the public at no cost to the 
user, subject to certain exclusions. See http://www.treasury.gov/resource-center/sanctions/Programs/Documents/ukraine_gl9.pdf BIS is 
publishing this rule to make Sec.  746.6(a) of the EAR consistent with 
OFAC's new general license. This rule revises Sec.  746.6(a) to allow 
license-free treatment of software that is necessary to enable the 
exchange of personal communications over the Internet only if such 
software is designated EAR99 or is classified as mass market software 
under ECCN 5D992.c of the EAR, and provided further that such software 
is widely available to the public at no cost to the user.

Other Clarifications To the EAR for the Crimea Region of Ukraine

    In addition to the changes described above, this final rule also 
makes clarifications to the EAR with respect to the addition of the 
Crimea region of Ukraine provisions to the EAR. These clarifications 
are in response to requests that BIS received for guidance on applying 
these provisions. These clarifications do not change policy as it 
relates to the Crimea region of Ukraine provisions added to the EAR in 
the January 29 rule, but rather provide guidance on how BIS interprets 
them. These questions primarily arise because Crimea is not a country, 
so the public had questions in regards to how to apply certain EAR 
provisions that are generally tied to countries when they involve the 
Crimea region of Ukraine.

New Footnote To Clarify Application of Country Groups for Crimea Region 
of Ukraine

    In Supplement No. 1 to part 740--Country Groups, this final rule 
adds a footnote 3 to the entry for Ukraine. The new footnote clarifies 
that for purposes of the Country Group provisions under the EAR, the 
Crimea region of Ukraine uses the same Country Group designations as 
the country of Ukraine. This is because the Crimea region of Ukraine is 
not a country. The Country Groups are also closely tied to the use of 
license exceptions, so the new footnote also clarifies that the only 
license exceptions that may be used for the Crimea region of Ukraine 
are those specified in Sec.  746.6(c). Similar to footnote 8 that was 
added to the Commerce Country Chart in Supplement No. 1 to part 738 in 
the January 29 rule, footnote 3 makes the public aware of the 
additional requirements under Sec.  746.6 that apply to the `Crimea 
region of Ukraine,' including limitations on the use of license 
exceptions. The new footnote also includes the same definition of 
`Crimea region of Ukraine' that appears in footnote 8 to the Commerce 
Country Chart and this rule's revision to Sec.  746.6.

New Note To Clarify Application of Deemed Exports and Deemed Reexports 
for Crimea Region of Ukraine

    In Sec.  746.6 (Crimea region of Ukraine), this final rule adds a 
paragraph (a)(2) to clarify that for purposes of applying the EAR 
deemed export and deemed reexport requirements for foreign nationals 
located in or from the Crimea region of Ukraine, the nationality of the 
foreign national (as determined by accepted methods, such as looking to 
the passport or other nationality documents recognized by the United 
States Government) is what is used for purposes of determining whether 
a license is required under the EAR. For example, if a foreign national 
is in the United States and has a Ukrainian passport, the person 
releasing the technology or software source code would use Ukraine for 
purposes of determining the EAR license requirements and would not need 
to determine whether the person was from the Crimea region of Ukraine. 
For releases of technology in the Crimea region to foreign nationals of 
any country other than Ukraine, the nationality of the foreign national 
is used for determining deemed reexport license requirements. For 
example, a release of technology or software source code to a Russian 
national located in the Crimea region of Ukraine would use Russia for 
purposes of determining the EAR license requirements. BIS makes this 
clarification because of requests received from the public for guidance 
on how to apply the Crimea region of Ukraine license requirements in 
the deemed export and deemed reexport contexts. Note that nothing in 
this rule affects licensing requirements for the provision of goods and 
services under the OFAC regulations, 31 CFR parts 500-599.

Export Administration Act

    Although the Export Administration Act expired on August 20, 2001, 
the President, through Executive Order

[[Page 29532]]

13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as amended 
by Executive Order 13637 of March 8, 2013, 78 FR 16129 (March 13, 2013) 
and as extended by the Notice of August 7, 2014, 79 FR 46959 (August 
11, 2014), has continued the Export Administration Regulations in 
effect under the International Emergency Economic Powers Act. BIS 
continues to carry out the provisions of the Export Administration Act, 
as appropriate and to the extent permitted by law, pursuant to 
Executive Order 13222 as amended by Executive Order 13637.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This 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 be subject to a penalty for failure to 
comply with a collection of information, subject to the requirements of 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), 
unless that collection of information displays a currently valid Office 
of Management and Budget (OMB) Control Number. This regulation involves 
collections previously approved by OMB under control number 0694-0088, 
Simplified Network Application Processing System, which includes, among 
other things, license applications and carries a burden estimate of 
43.8 minutes for a manual or electronic submission. Total burden hours 
associated with the PRA and OMB control number 0694-0088 are not 
expected to increase as a result of this rule. You may send comments 
regarding the collection of information associated with this rule, 
including suggestions for reducing the burden, to Jasmeet K. Seehra, 
Office of Management and Budget (OMB), by email to 
[email protected], or by fax to (202) 395-7285.
    3. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 13132.
    4. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring notice of proposed rulemaking, the opportunity for 
public comment and a delay in effective date are inapplicable to the 
changes described above under the heading Permitted exports and 
reexports of certain software to the Crimea region of Ukraine because 
this regulation involves a military or foreign affairs function of the 
United States. (See 5 U.S.C. 553(a)(1)). BIS implements this rule to 
advance U.S. policy toward Russia and therefore promote U.S. national 
security or foreign policy objectives by immediately facilitating 
Internet-based communications with persons in the Crimea region of 
Ukraine. Delay in publication and the rule's effective date to allow 
for notice and comment would frustrate those objectives. This change to 
the license requirements, in addition to relieving a regulatory burden 
of exporters, reexporters and transferors of such software, may also 
facilitate Internet-based communication between people located in the 
Crimea region of Ukraine and other people around the world. 
Facilitating such Internet-based communication with the people located 
in the Crimea region of Ukraine is in U.S. national security and 
foreign policy interests because it helps create a potentially 
uncontrolled access point to the outside world for the people of the 
Crimea region of Ukraine. They may use such Internet-based 
communication to highlight their plight and to counter any false 
messages being propagated by those currently exercising control over 
the Crimea region of Ukraine. By creating an opportunity for the people 
of the Crimea region of Ukraine to draw attention to these issues, this 
final rule may increase pressure on Russia and those acting on Russia's 
behalf in the Crimea region of Ukraine to stop such activities, or at 
least to allow a counter version of local events. In addition, creating 
an opportunity for people in the Crimea region of Ukraine to draw 
attention to these issues may also encourage other countries to join 
with the United States and other like-minded countries currently 
imposing sanctions on Russia as a result of their activities in the 
Crimea region of Ukraine and other parts of eastern Ukraine, which is 
also in the national security and foreign policy interests of the 
United States. Further, no other law requires that a notice of proposed 
rulemaking and an opportunity for public comment be given for this 
rule. 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 not applicable. Accordingly, 
no regulatory flexibility analysis is required and none has been 
prepared.
    5. The Department finds for the changes described under the heading 
Other Clarifications to the EAR for the Crimea region of Ukraine that 
there is good cause under 5 U.S.C. 553(b)(3)(B) to waive the provisions 
of the Administrative Procedure Act requiring prior notice and the 
opportunity for public comment because they are unnecessary. These 
changes included in this final rule are limited to clarifications to 
what was included in the final rule published on January 29, 2015. 
These revisions are non-substantive, or are limited to only clarifying 
the regulations to ensure consistency with the intent of the January 29 
rule; therefore, providing an additional opportunity for public comment 
on these corrections is unnecessary.
    In addition, BIS finds good cause to waive the 30-day delay in 
effectiveness under 5 U.S.C. 553(d)(3) because it will allow the 
clarifications to go into effect immediately, which will reduce the 
potential for confusion among the public and make sure all members of 
the public are aware of how BIS interprets these Crimea region of 
Ukraine provisions as they relate to other EAR provisions.

List of Subjects

15 CFR Part 738

    Exports.

15 CFR Part 740

    Administrative practice and procedure, Exports, Reporting and 
recordkeeping requirements.

15 CFR Part 746

    Exports, Reporting and recordkeeping requirements.

    Accordingly, parts 738, 740, and 746 of the Export Administration 
Regulations (15 CFR parts 730-774) are amended as follows:

PART 738--[AMENDED]

0
1. The authority citation for 15 CFR part 738 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); 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; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22 
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 13026, 61 FR 58767, 3 CFR, 
1996 Comp., p.

[[Page 29533]]

228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of 
August 7, 2014, 79 FR 46959 (August 11, 2014).


0
2. Supplement No. 1 to part 738 is amended by revising footnote 8 to 
read as follows:

Supplement No. 1 to Part 738--Commerce Country Chart

* * * * *
    \8\ See Sec.  746.6 for additional license requirements for export 
and reexports to the Crimea region of Ukraine and transfers (in-
country) within the Crimea region of Ukraine for all items subject to 
the EAR, other than food and medicine designated as EAR99 and certain 
EAR99 or ECCN 5D992.c software for Internet-based communications. The 
Crimea region of Ukraine includes the land territory in that region as 
well as any maritime area over which sovereignty, sovereign rights, or 
jurisdiction is claimed based on purported annexation of that land 
territory.

PART 740--[AMENDED]

0
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.; 
22 U.S.C. 7201 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., 
p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice 
of August 7, 2014, 79 FR 46959 (August 11, 2014).


0
4. Supplement No. 1 to part 740 is amended by:
0
a. Adding footnote designation ``3'' to ``Ukraine'' in Country Group A; 
and
0
b. Adding footnote 3 to Country Group A to read as follows:

Supplement No. 1 to Part 740--Country Groups

* * * * *
    \3\ For purposes of this supplement, as well as any other EAR 
provision that references the Country Groups, the designations for 
Ukraine also apply to the Crimea region of Ukraine. See Sec.  746.6(c) 
for an exhaustive listing of license exceptions that are available for 
the Crimea region of Ukraine. No other EAR license exceptions are 
available for the Crimea region of Ukraine. The Crimea region of 
Ukraine includes the land territory in that region as well as any 
maritime area over which sovereignty, sovereign rights, or jurisdiction 
is claimed based on purported annexation of that land territory.

PART 746--[AMENDED]

0
5. The authority citation for 15 CFR part 746 is revised 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; Sec 1503, Pub. L. 108-11, 117 Stat. 559; 22 U.S.C. 
6004; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12854, 58 FR 
36587, 3 CFR, 1993 Comp., p. 614; E.O. 12918, 59 FR 28205, 3 CFR, 
1994 Comp., p. 899; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., p 168; Presidential 
Determination 2003-23 of May 7, 2003, 68 FR 26459, May 16, 2003; 
Presidential Determination 2007-7 of December 7, 2006, 72 FR 1899 
(January 16, 2007); Notice of August 7, 2014, 79 FR 46959 (August 
11, 2014); Notice of May 6, 2015, 80 FR 26815 (May 8, 2015).


0
6. Section 746.6 is amended by revising paragraph (a) to read as 
follows:


Sec.  746.6  Crimea region of Ukraine.

    (a) License requirements--(1) General prohibition. As authorized by 
Section 6 of the Export Administration Act of 1979, a license is 
required to export or reexport any item subject to the EAR to the 
Crimea region of Ukraine and the transfer within the Crimea region of 
Ukraine except food and medicine designated as EAR99 or software that 
is necessary to enable the exchange of personal communications over the 
Internet (such as instant messaging, chat and email, social networking, 
sharing of photos and movies, Web browsing, and blogging), provided 
that such software is designated EAR99 or is classified as mass market 
software under Export Control Classification Number (ECCN) 5D992.c of 
the EAR, and provided further that such software is widely available to 
the public at no cost to the user. The `Crimea region of Ukraine' 
includes the land territory in that region as well as any maritime area 
over which sovereignty, sovereign rights, or jurisdiction is claimed 
based on purported annexation of that land territory.
    (2) For purposes of applying the EAR deemed export and deemed 
reexport requirements for foreign nationals located in or from the 
Crimea region of Ukraine, the nationality of the foreign national (as 
determined by accepted methods, such as looking to the passport or 
other nationality document(s) recognized by the United States 
Government) is what is used for purposes of determining whether a 
license is required for a deemed export or deemed reexport. For any 
other export, reexport or transfer (in-country), see the license 
requirements specified in paragraph (a).
* * * * *

    Dated: May 14, 2015.
Eric L. Hirschhorn,
Under Secretary of Commerce for Industry and Security.
[FR Doc. 2015-12267 Filed 5-21-15; 8:45 am]
 BILLING CODE 3510-33-P