81 FR 15633 - Temporary General License

DEPARTMENT OF COMMERCE
Bureau of Industry and Security

Federal Register Volume 81, Issue 57 (March 24, 2016)

This final rule creates a temporary general license that temporarily restores the licensing requirements and policies under the Export Administration Regulations (EAR) for exports, reexports, and transfers (in-country) to two entities added to the Entity List on March 8, 2016. BIS is issuing this rule in connection with a request to remove or modify the listing.

[Federal Register Volume 81, Number 57 (Thursday, March 24, 2016)]
[Rules and Regulations]
[Pages 15633-15635]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-06689]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 744

[Docket No. 160106014-6262-02]
RIN 0694-AG82


Temporary General License

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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

SUMMARY: This final rule creates a temporary general license that 
temporarily restores the licensing requirements and policies under the 
Export Administration Regulations (EAR) for exports, reexports, and 
transfers (in-country) to two entities added to the Entity List on 
March 8, 2016. BIS is issuing this rule in connection with a request to 
remove or modify the listing.

DATES:  This rule is effective March 24, 2016 through June 30, 2016.

FOR FURTHER INFORMATION CONTACT: Chair, End-User Review Committee, 
Office of the Assistant Secretary, Export Administration, Bureau of 
Industry and Security, Department of Commerce,

[[Page 15634]]

Phone: (202) 482-5991, Fax: (202) 482-3911, Email: [email protected].

SUPPLEMENTARY INFORMATION: 

Background

    The Entity List (Supplement No. 4 to Part 744) identifies entities 
and other persons reasonably believed to be involved, or to pose a 
significant risk of being or becoming involved, in activities contrary 
to the national security or foreign policy interests of the United 
States. The End-User Review Committee (ERC), composed of 
representatives of the Departments of Commerce (Chair), State, Defense, 
Energy and, where appropriate, the Treasury, makes all decisions 
regarding additions to, removals from, or other modifications to the 
Entity List. The ERC makes all decisions to add an entry to the Entity 
List by majority vote and all decisions to remove or modify an entry by 
unanimous vote.
    This final rule does not amend the Entity List, but modifies an 
entry on the Entity List as described further below by adding a 
temporary general license for two entities recently added to the Entity 
List.

Addition of ZTE to the Entity List and Overview of Requests for Removal

    BIS added Zhongxing Telecommunications Equipment (ZTE) Corporation 
(ZTE Corporation), ZTE Kangxun Telecommunications Ltd. (ZTE Kangxun), 
and two other entities to the Entity List on March 8, 2016. Details 
regarding the scope of the listing are at 81 FR 12004 (Mar. 8, 2016), 
(``Additions to the Entity List''). Each person on the Entity List has 
the right to request that its listing on the Entity List be removed or 
modified. Instructions on the request for removal or modification 
process are found at Sec.  744.16 of the EAR.
    The ERC reviews such requests in accordance with the procedures set 
forth in Supplement No. 5 to part 744. Specifically, as part of its 
review of requests to remove or modify a listing, the ERC will consider 
whether the circumstances that led to the decision to add the entity to 
the Entity List continue to exist. This includes reviewing whether 
there continues to be reasonable cause to believe, based on specific 
and articulable facts, that the entity has been involved, is involved, 
or poses a significant risk of being or becoming involved in activities 
that are contrary to the national security or foreign policy interests 
of the United States--the standard for revising the Entity List 
established in Sec.  744.11(b) of the EAR. In connection with a request 
by ZTE Corporation and ZTE Kangxun to remove or modify their listings 
on the Entity List submitted to BIS pursuant to the foregoing 
provisions, and binding commitments made by these entities to the U.S. 
Government, BIS is modifying the effect of their entries on the Entity 
List by adding a temporary general license to restore temporarily the 
status quo ante licensing policy pertaining to exports, reexports, and 
transfers (in-country) to ZTE Corporation and ZTE Kangxun. This final 
rule does not apply to the other two entities added to Supplement No. 4 
to part 744 (The Entity List) on March 8, 2016.
    Specifically, this final rule makes the following change to the 
EAR:

Addition of Temporary General License

    This final rule amends the EAR by adding Supplement No. 7 to Part 
744 to create a Temporary General License that returns until June 30, 
2016 the licensing and other policies of the EAR regarding exports, 
reexports, and transfers (in-country) to Zhongxing Telecommunications 
Equipment (ZTE) Corporation and ZTE Kangxun to that which was in effect 
just prior to their having been added to the Entity List on March 8, 
2016. For example, the authority of NLR or a License Exception that was 
available as of March 7, 2016, may be used as per this temporary 
general license. The temporary general license is renewable if the U.S. 
Government determines, in its sole discretion, that ZTE Corporation and 
ZTE Kangxun are timely performing their undertakings to the U.S. 
Government and otherwise cooperating with the U.S. Government in 
resolving the matter.
    The impact of this temporary general license is that the license 
and other requirements specified in Sec.  744.11 and Supplement No. 4 
to part 744 pertaining to exports, reexports, and transfers (in-
country) to ZTE Corporation and ZTE Kangxun do not apply during the 
period the temporary general license is in effect. This means that the 
license requirements, license review policies, and license exceptions 
that applied on March 7, 2016, are applicable regarding exports, 
reexports, and transfers (in-country) to ZTE Corporation and ZTE 
Kangxun until June 30, 2016, unless amended. However, the temporary 
general license does not relieve persons of other obligations under 
part 744 of the EAR or under other parts of the EAR, such as those 
specified in Sec. Sec.  744.2, 744.3 and 744.4 of the EAR. For example, 
this temporary general license does not relieve persons of their 
obligations under General Prohibition 5 in Sec.  736.2(b)(5) of the EAR 
which provides that, ``you may not, without a license, knowingly export 
or reexport any item subject to the EAR to an end-user or end-use that 
is prohibited by part 744 of the EAR.'' Additionally, this temporary 
general license does not relieve persons of their obligation to apply 
for export, reexport, or in-country transfer licenses required by other 
provisions of the EAR. BIS strongly urges the use of Supplement No. 3 
to part 732 of the EAR, ``BIS's `Know Your Customer' Guidance and Red 
Flags,'' when persons are involved in transactions that are subject to 
the EAR.

Export Administration Act

    Although the Export Administration Act expired on August 20, 2001, 
the President, through Executive Order 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, 2015, 80 FR 48233 (August 11, 2015), 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

[[Page 15635]]

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 because 
this regulation involves a military or foreign affairs function of the 
United States. (See 5 U.S.C. 553(a)(1)). If this rule were delayed to 
allow for notice and comment and a delay in effective date, then the 
national security and foreign policy objectives of this rule would be 
harmed. 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.

List of Subject in 15 CFR Part 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

    Accordingly, part 744 of the Export Administration Regulations (15 
CFR parts 730 through 774) is amended as follows:

PART 744--[AMENDED]

0
1. The authority citation for 15 CFR part 744 continues to read as 
follows:

    Authority:  50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22 
U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 
U.S.C. 7210; 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. 12938, 59 
FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 12947, 60 FR 5079, 3 CFR, 
1995 Comp., p. 356; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 
228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 
66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 
CFR, 2001 Comp., p. 786; Notice of August 7, 2015, 80 FR 48233 
(August 11, 2015); Notice of September 18, 2015, 80 FR 57281 
(September 22, 2015); Notice of November 12, 2015, 80 FR 70667 
(November 13, 2015); Notice of January 20, 2016, 81 FR 3937 (January 
22, 2016).


0
2. Add Supplement No. 7 to part 744 to read as follows:

SUPPLEMENT NO. 7 TO PART 744--TEMPORARY GENERAL LICENSE

    Notwithstanding the requirements and other provisions of supplement 
4 to part 744, which became effective on March 8, 2016, the licensing 
and other requirements in the EAR as of March 7, 2016, pertaining to 
exports, reexports, and transfers (in-country) of items ``subject to 
the EAR'' to Zhongxing Telecommunications Equipment (ZTE) Corporation, 
ZTE Plaza, Keji Road South, Hi-Tech Industrial Park, Nanshan District, 
Shenzhen, China, and ZTE Kangxun Telecommunications Ltd., 2/3 Floor, 
Suite A, ZTE Communication Mansion Keji (S) Road, Hi-New Shenzhen, 
518057 China, are restored as of March 24, 2016 and through June 30, 
2016. Thus, for example, the authority of NLR or a License Exception 
that was available as of March 7, 2016, may be used as per this 
temporary general license. The temporary general license is renewable 
if the U.S. Government determines, in its sole discretion, that ZTE 
Corporation and ZTE Kangxun are timely performing their undertakings to 
the U.S. Government and otherwise cooperating with the U.S. Government 
in resolving the matter.

    Dated: March 21, 2016.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2016-06689 Filed 3-21-16; 4:15 pm]
BILLING CODE 3510-33-P