81 FR 19026 - Revisions to the Export Administration Regulations Based on the 2015 Missile Technology Control Regime Plenary Agreements

DEPARTMENT OF COMMERCE
Bureau of Industry and Security

Federal Register Volume 81, Issue 64 (April 4, 2016)

The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to reflect changes to the Missile Technology Control Regime (MTCR) Annex that were agreed to by MTCR member countries at the October 2015 Plenary in Rotterdam, Netherlands, and the April 2015 Technical Experts Meeting (TEM) in Bern, Switzerland. This final rule makes conforming changes to correlate the Commerce Control List (CCL) (Supplement No. 1 to Part 774 of the EAR) and other EAR provisions with the current MTCR Annex. This final rule revises six Export Control Classification Numbers (ECCNs) to implement the changes that were agreed to at the meetings and to better align the MT controls on the CCL with the MTCR Annex. In addition, this final rule makes a change to MT licensing policy to be consistent with the MTCR Annex General Minimum Software Note and the MTCR Annex General Technology Note that specify that a license for MT controlled items should also authorize certain minimum ``software'' and ``technology.'' This final rule also adds a new paragraph to the section of the EAR that specifies which changes to a license are considered ``non- material.'' This amendment will facilitate this rule's revised MT licensing policy, which will apply to all licenses for MT controlled items, except when excluded by a license condition.

[Federal Register Volume 81, Number 64 (Monday, April 4, 2016)]
[Rules and Regulations]
[Pages 19026-19032]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-07601]



[[Page 19026]]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 742, 750 and 774

[Docket No. 160204079-6079-01]
RIN 0694-AG77


Revisions to the Export Administration Regulations Based on the 
2015 Missile Technology Control Regime Plenary Agreements

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: The Bureau of Industry and Security (BIS) is amending the 
Export Administration Regulations (EAR) to reflect changes to the 
Missile Technology Control Regime (MTCR) Annex that were agreed to by 
MTCR member countries at the October 2015 Plenary in Rotterdam, 
Netherlands, and the April 2015 Technical Experts Meeting (TEM) in 
Bern, Switzerland. This final rule makes conforming changes to 
correlate the Commerce Control List (CCL) (Supplement No. 1 to Part 774 
of the EAR) and other EAR provisions with the current MTCR Annex. This 
final rule revises six Export Control Classification Numbers (ECCNs) to 
implement the changes that were agreed to at the meetings and to better 
align the MT controls on the CCL with the MTCR Annex. In addition, this 
final rule makes a change to MT licensing policy to be consistent with 
the MTCR Annex General Minimum Software Note and the MTCR Annex General 
Technology Note that specify that a license for MT controlled items 
should also authorize certain minimum ``software'' and ``technology.'' 
This final rule also adds a new paragraph to the section of the EAR 
that specifies which changes to a license are considered ``non-
material.'' This amendment will facilitate this rule's revised MT 
licensing policy, which will apply to all licenses for MT controlled 
items, except when excluded by a license condition.

DATES: This rule is effective April 4, 2016.

FOR FURTHER INFORMATION CONTACT: Sharon Bragonje, Nuclear and Missile 
Technology Controls Division, Bureau of Industry and Security, Phone: 
(202) 482-0434; Email: [email protected]

SUPPLEMENTARY INFORMATION:

Background

    The Missile Technology Control Regime (MTCR) is an export control 
arrangement among 34 nations, including most of the world's suppliers 
of advanced missiles and missile-related equipment, materials, software 
and technology. The regime establishes a common list of controlled 
items (the Annex) and a common export control policy (the Guidelines) 
that member countries implement in accordance with their national 
export controls. The MTCR seeks to limit the risk of proliferation of 
weapons of mass destruction by controlling exports of goods and 
technologies that could make a contribution to delivery systems (other 
than manned aircraft) for such weapons.
    In 1993, the MTCR's original focus on missiles for nuclear weapons 
delivery was expanded to include the proliferation of missiles for the 
delivery of all types of weapons of mass destruction (WMD), i.e., 
nuclear, chemical and biological weapons. Such proliferation has been 
identified as a threat to international peace and security. One way to 
address this threat is to maintain vigilance over the transfer of 
missile equipment, material, and related technologies usable for 
systems capable of delivering WMD. MTCR members voluntarily pledge to 
adopt the Regime's export Guidelines and to restrict the export of 
items contained in the Regime's Annex. The Regime's Guidelines are 
implemented through the national export control laws, regulations and 
policies of the regime members.

Amendments to the Export Administration Regulations

    This final rule revises the Export Administration Regulations (EAR) 
to reflect changes to the MTCR Annex agreed to at the October 2015 
Plenary in Rotterdam, Netherlands, and changes resulting from the April 
2015 Technical Experts Meeting (TEM) in Bern, Switzerland.
     Corresponding MTCR Annex references are provided below for the 
MTCR Annex changes agreed to at the meetings. This rule also makes two 
conforming changes to correlate the Commerce Control List (CCL) 
(Supplement No. 1 to Part 774 of the EAR) and other EAR provisions with 
the current MTCR Annex. These conforming changes are made to better 
align the MT controls on the CCL and other parts of the EAR with the 
MTCR Annex. In the explanation below for the revisions made in this 
rule, BIS identifies these changes as follows: ``Rotterdam 2015 
Plenary,'' ``Bern 2015 TEM,'' and ``Conforming Change to MTCR Annex'' 
to assist the public in understanding the origin of each change 
included in this final rule.
    In Sec.  742.5 (Missile technology), this final rule adds a new 
paragraph (b)(3), and redesignates paragraphs (b)(3) and (b)(4), as 
paragraphs (b)(4) and (b)(5). This paragraph specifies that BIS 
licenses for MT controlled items also authorize the minimum 
``software'' and ``technology'' for MT controlled items authorized 
under the same license, unless such minimum ``software'' and 
``technology'' are specifically excluded by BIS on the license. This 
final rule also amends Sec.  750.7(c)(1), which identifies ``non-
material changes [to a license that] do not require submission of a 
`Replacement' license or any other notification to BIS.'' BIS has 
determined that a license applicant who does not seek a license for 
minimum ``software'' or ``technology'' for an MT controlled item need 
not seek a ``Replacement'' license if the applicant subsequently wishes 
to export such software or technology under the authority of the 
previously issued license. Such a use of the license would amount to a 
non-material change because the basic purpose of the license would be 
substantially undermined if the exporter could not promptly provide 
minimum necessary software or technology for the previously licensed MT 
item, an outcome that would be especially problematic in view of the 
2015 regime changes referred to above. Moreover, in many instances, 
such exports of minimum necessary software and technology may already 
be made pursuant to License Exception TSU, set forth at Sec.  740.13(a) 
and (c) (referring to minimum necessary operation software and 
technology), and notwithstanding the general prohibition against the 
use of License Exceptions for MT controlled items in Sec.  
740.2(a)(5)(i), which excludes a substantial number of MT items from 
the general prohibition under specified circumstances. Because BIS has 
previously determined that many such exports can be made pursuant to a 
License Exception, it stands to reason that the substantially similar 
MT ``minimum necessary'' software and technology exports at issue in 
this rule should be eligible for ``non-material'' treatment under Sec.  
750.7(c)(1). Accordingly, in this rule BIS establishes a new paragraph 
(c)(1)(x) to Sec.  750.7 that applies to all MT licenses, except when a 
condition is placed on the license that excludes such minimum 
``software'' and ``technology.'' These changes are also consistent with 
the boilerplate text on BIS licenses, because the Sec.  750.7(c)(1)(x) 
revision identifies the export, reexport or transfer (in-country) of 
minimum necessary MT controlled software and

[[Page 19027]]

technology as a non-material change to a license.
    BIS makes this change to MT licensing policy to be consistent with 
the MTCR Annex General Minimum Software Note and the MTCR Annex General 
Technology Note that specify that a license for MT controlled items 
should also authorize certain minimum ``software'' and ``technology,'' 
which is being implemented by adding paragraph (c)(1)(x) to Sec.  750.7 
(which allows licensees to make such exports, reexports and transfers 
(in-country) pursuant to licenses for MT items) and paragraph (b)(3) to 
Sec.  742.5 (which specifies this MT licensing policy) of the EAR. 
(MTCR Annex Change, General Minimum Software Note, Rotterdam 2015 
Plenary; and MTCR Annex, General Technology Note, Conforming Change to 
MTCR Annex). The MTCR General Minimum Software Note, MTCR Annex General 
Technology Note, and the provisions this final rule adds to Sec.  742.5 
are consistent with the General Software Note and General Technology 
Note in Supplement No. 2 to part 774 and License Exception TSU under 
Sec.  740.13, paragraphs (a) and (c). Note, however, that the 
implementation of these provisions is being done through the MT 
licensing policy, and the addition of paragraph (c)(1)(x) to Sec.  
750.7 described below, instead of through the use of a license 
exception.
    BIS is presumptively including such minimum ``software'' and 
``technology'' as part of the authorized scope for each license that 
includes MT controlled items. Therefore, applicants are not required to 
identify or provide any support documentation for such minimum 
``software'' and ``technology'' on a license application for MT 
controlled items because such minimum ``software'' and ``technology'' 
is authorized within the scope of the license, pursuant to Sec.  
750.7(c)(1)(x), absent a license condition to the contrary. Applicants 
will be informed when such minimum ``software'' and/or ``technology'' 
in Sec.  750.7(c)(1)(x) is excluded from the license by a BIS condition 
on the license, which will state the following: ``This license does not 
authorize the export, reexport or transfer (in-country) of the minimum 
``software'' and/or ``technology'' specified in paragraph (b)(3) of 
Sec.  742.5.'' Absent this condition on the license for MT controlled 
items, the licensee may assume, consistent with Sec.  750.7(c)(1)(x) 
and the licensing policy in Sec.  742.5, that the approved license also 
authorizes the export (or reexport, or transfer (in-country) as 
applicable) to the same ultimate consignee(s) and end user(s) specified 
on the license of the minimum ``software,'' excluding source code, 
controlled for MT reasons that is required for the installation, 
operation, maintenance or repair of the item and the ``technology'' 
required for the installation, operation, maintenance, or repair of the 
item in order to ensure the item's safe operation as originally 
intended. It is important to note that this licensing policy in 
paragraph (b)(3) of Sec.  742.5 is only available for licensed exports 
(or reexports, or transfers (in-country)). For example, if an exporter 
wishes to export such minimum ``software'' and ``technology'' for a 
machine tool controlled for MT reasons, but there is not a license in 
place authorizing the export of the machine tool, then the export of 
such minimum ``software'' and ``technology'' would require a separate 
authorization under the EAR. This final rule adds a new Note to 
paragraph (b)(3), as described below, to make this clear.
    This final rule also specifies in Sec.  742.5, paragraph (b)(3) 
that a license for MT controlled items authorizes pursuant to Sec.  
750.7(c)(1)(x) the later export (or reexport, or transfer (in-country) 
as applicable) of ``software'' controlled for MT reasons intended to 
correct defects (bug fixes) in a previously legally exported item under 
a BIS license to the same ultimate consignee(s) and end user(s) 
specified on the license, provided that the capability and/or 
performance of the item are not otherwise enhanced and such 
``software'' is not excluded from the license by a BIS condition on the 
license.
    Lastly, for the changes to Sec.  742.5, this final rule adds a Note 
to paragraph (b)(3) to clarify that for the limited number of ECCNs 
that are identified in Sec.  740.2, paragraph (a)(5), License Exception 
TSU is available, and therefore exporters do not need to apply for a 
license from BIS for such minimum ``software'' or ``technology.'' 
License Exception TSU is available provided such minimum ``software'' 
or ``technology'' is for an end use specified in that paragraph and 
meets the requirements of License Exception TSU and is not otherwise 
restricted under Sec.  740.2 of the EAR. This Note to paragraph (b)(3) 
also clarifies that the licensing policy in paragraph (b)(3) is only 
available for licensed exports (or reexports, or transfers (in-
country)), as noted above in the example for what minimum ``software'' 
and ``technology'' would require a separate authorization under the 
EAR. BIS took into account that certain minimum ``software'' and 
``technology'' was already eligible for License Exception TSU when 
deciding to add paragraph (b)(3) to Sec.  742.5 for the MT licensing 
policy and paragraph (c)(1)(x) to Sec.  750.7 to allow for such changes 
to a license for MT items.
    In Sec.  750.7(c) (Changes to the license), this rule adds a new 
paragraph (c)(1)(x), as referenced above in the description of the 
changes this final rule makes to Sec.  742.5. This paragraph (c)(1)(x) 
specifies that the export, reexport or transfer (in-country) of missile 
technology (MT) controlled minimum ``software'' and/or ``technology'' 
permitted pursuant to the missile technology licensing policy in Sec.  
742.5(b)(3) does not require a new license. This final rule also 
includes a parenthetical phrase in Sec.  750.7(c)(1)(x) to cross 
reference Sec.  742.5(b)(3)(i) to define the scope of eligible minimum 
``software'' and ``technology'' and other limitations for licenses for 
MT controlled items.
    Also in Sec.  750.7, this final rule adds two notes to paragraph 
(c)(1)(x). The new Note 1 provides context for why BIS is implementing 
the MT licensing policy pursuant to Sec.  750.7(c)(1)(x). Note 1 
explains that the MT licensing policy is being implemented pursuant to 
paragraph (c)(1)(x) because it applies to all MT licenses. This new 
Note 1 also explains that this MT licensing policy does not apply when 
BIS places a condition on the specific license(s) which excludes the 
use of paragraph (c)(1)(x). This final rule also adds a Note 2 to 
paragraph (c)(1)(x) to provide guidance on the relationship between 
License Exception TSU and Sec.  750.7(c)(1)(x), as well as Sec.  
742.5(b)(3). Note 2 is the same as the Note to paragraph (b)(3) to 
Sec.  742.5, described above in this final rule, except for minor 
changes to reflect that the note is in Sec.  750.7.
    In addition, this final rule amends the Commerce Control List (CCL) 
to reflect changes to the MTCR Annex. Specifically, the following six 
ECCNs are affected by the changes set forth in this final rule:
    ECCN 1B101. This final rule amends ECCN 1B101 by revising paragraph 
a and the introductory text of paragraph b in the List of Items 
Controlled section. (MTCR Annex Change, Category II: Item 6.B.1.a. and 
b., Bern 2015 TEM). Specifically, this final rule amends paragraph a to 
revise the term `fiber-placement machines' to add the term ``/tow'' 
after the term ``fiber'' to clarify that the scope of the control 
parameter extends to placement machines regardless of whether they are 
named fiber-placement machines or tow-placement machines. This final 
rule revises the term ``fiber-placement machines'' to ``fiber/tow-
placement machines'' in order to clarify that both

[[Page 19028]]

these similar machines (two types of placement machines) are classified 
under this control parameter, regardless of the naming convention. This 
final rule revises paragraph b to add single quotation marks around the 
term `tape-laying machines' to indicate that this term is defined for 
purposes of ECCN 1B101. This final rule also revises paragraph b to 
remove the phrase ``and sheets,'' because it is no longer needed as 
part of the control parameter because the definition of tape now 
encompasses sheets. Lastly, this final rule adds four new Technical 
Notes to paragraphs a and b. The addition of these four Technical Notes 
provides a clear technical definition for `fiber/tow-placement 
machines' and `tape-laying machines' under new Technical Note 1, which 
is based on the minimum width of material that these machines are 
capable of laying (as specified further in the new Technical Notes 3 
and 4 this final rule adds to ECCN 1B101). This final rule also adds a 
Technical Note 2 to provide an ECCN-specific definition of `filament 
band,' which is also used as part of the definition of `fiber/tow-
placement machines' and `tape-laying machines.' The purpose of this 
change to ECCN 1B101 is to more clearly define and differentiate 
between fiber/tow-placement machines and tape-laying machines. The only 
increase in license applications will be due to the clarification that 
tow-placement machines are definitively controlled by the MTCR.
    ECCN 1C111. This final rule amends ECCN 1C111 by revising 
paragraphs b.4, b.9, d.9, and d.12 in the List of Items Controlled 
section to add CAS (Chemical Abstract Service) Numbers. CAS Numbers are 
numerical identifiers assigned by the Chemical Abstracts Service (CAS) 
to every chemical substance described in open scientific literature, 
including organic and inorganic compounds, minerals, isotopes and 
alloys. The inclusion of CAS Numbers will make it easier to identify 
the materials controlled under these ``items'' paragraphs of 1C111.
    This final rule revises paragraph b.4 to add the CAS Number (CAS 
25265-19-4/CAS 68891-50-9) after the material ``polybutadiene acrylic 
acid acrylonitrile (PBAN).'' (MTCR Annex Change, Category II: Item 
4.C.5.e., Rotterdam 2015 Plenary). This change is not expected to have 
any impact on the number of license applications received by BIS. This 
final rule revises paragraph d.9 to add the CAS Number (CAS 6068-98-0) 
after the material ``ethylene dihydrazine.'' (MTCR Annex Change, 
Category II: Item 4.C.2.b.8., Rotterdam 2015 Plenary). This change is 
not expected to have any impact on the number of license applications 
received by BIS.
    This final rule revises paragraph d.12 to add the material ``1,1-
Dimethylhydrazinium azide (CAS 227955-52-4),'' which is an alternative 
structure of the same chemical (Dimethylhydrazinium azide) classified 
under d.12. This final rule also revises paragraph d.12 to add ``1,2-'' 
before the material ``Dimethylhydrazinium azide'' and adds the CAS 
Number (CAS 299177-50-7) after the material ``1,2-Dimethylhydrazinium 
azide.'' These changes will aid exporters and licensing officers by 
making it clear that both structures of the chemical are caught under 
paragraph d.12. (MTCR Annex Change, Category II: Item 4.C.2.b.12., 
Rotterdam 2015 Plenary). These changes are not expected to have any 
impact on the number of license applications received by BIS.
    Lastly, for the changes to ECCN 1C111, this final rule revises 
paragraph d.19, to add the material ``1,1-Diethylhydrazine nitrate 
(DEHN),'' which is an alternative structure of the same chemical 
(Diethylhydrazine nitrate (DEHN)) classified under d.19. This final 
rule also revises paragraph d.19 to add ``1,2-'' before the material 
``Diethylhydrazine nitrate (DEHN)'' and adds the CAS Number (CAS 
363453-17-2) after the material ``1,2-Dimethylhydrazinium nitrate.'' 
These changes will aid exporters and licensing officers and make clear 
that both structures of the chemical are caught under paragraph d.19. 
(MTCR Annex Change, Category II: Item 4.C.2.b.19., Rotterdam 2015 
Plenary). These changes are not expected to have any impact on the 
number of license applications received by BIS.
    ECCN 7A116. This final rule amends ECCN 7A116 to revise the heading 
to add the term ``pneumatic'' to the beginning of the control parameter 
to specify that pneumatic flight control systems are also controlled 
under ECCN 7A116. In addition, this final rule adds the phrase ``and 
fly-by-light'' to the parenthetical phrase ``(including fly-by-wire 
systems)'' to specify that the flight control systems classified under 
this ECCN include fly-by-wire and fly-by-light systems. (MTCR Annex 
Change, Category II: Item 10.A.1., Rotterdam 2015 Plenary). These 
changes are not expected to have any impact on the number of license 
applications received by BIS, because the commodities described in ECCN 
7A116 are ``subject to the ITAR.''
    ECCN 9A012. This final rule amends ECCN 9A012 by adding paragraph 
b.5 in the List of Items Controlled section to control pneumatic, 
hydraulic, mechanical, electro-optical, or electromechanical flight 
control systems (including fly-by-wire and fly-by-light systems) and 
attitude control equipment designed or modified for UAVs or drones 
controlled by ECCN 9A012, and capable of delivering at least 500 
kilograms payload to a range of at least 300 km. (MTCR Annex Change, 
Category II: Item 10.A.1., Rotterdam 2015 Plenary). New paragraph b.5 
is not intended to control UAVs or drones controlled by either USML 
paragraph VIII(a) or ECCN 9A610.a. This change is made to conform to 
the MTCR Annex and to address that certain MTCR Category I UAVs are on 
the CCL as a result of Export Control Reform.
    This final rule also makes two conforming changes to ECCN 9A012 for 
the addition of paragraph 9A012.b.5. Specifically, this final rule is 
revising the ``MT'' paragraph in the License Requirements section to 
add an MT control for the new paragraph 9A012.b.5. This final rule is 
revising the Related Control Paragraph to include a reference to also 
see ECCN 9A610, because as noted above, similar types of systems and 
equipment are controlled under ECCN 9A610.w. This change is expected to 
result in an increase of 1-3 applications received annually by BIS.
    ECCN 9A610. This final rule amends ECCN 9A610 by revising paragraph 
w in the List of Items Controlled section to add the term ``pneumatic'' 
to the beginning of the control parameter to specify that pneumatic 
flight control systems are also classified under this paragraph w. In 
addition, this final rule adds the phrase ``and fly-by-light'' to the 
parenthetical phrase ``(including fly-by-wire systems)'' to specify 
that the flight control systems classified under this paragraph w 
include fly-by-wire and fly-by-light systems. (MTCR Annex Change, 
Category II: Item 10.A.1., Rotterdam 2015 Plenary). These changes are a 
slight expansion of the control parameter by extending the control to 
include pneumatic flight control systems that are designed or modified 
for ``missiles.'' This expansion of the control parameter is needed 
because state-of-the-art flight control systems may use optical fibers 
to provide digital communication between the flight control components. 
This change is expected to result in an increase of 1-3 applications 
received annually by BIS.
    ECCN 9B106. This final rule amends ECCN 9B106 by revising 
paragraphs a.1 and the introductory text of paragraph a.2 in the List 
of Items Controlled section. The introductory text of paragraph a 
previously referred to both paragraphs a.1 and a.2 as flight

[[Page 19029]]

conditions, which was not entirely accurate. Therefore, this final rule 
revises the introductory text of paragraph a by removing the phrase 
``simulating all of the following flight conditions'' and adding in its 
place the phrase ``having all of the following characteristics.'' (MTCR 
Annex Change, Category II: Item 15.B.4.a., Bern 2015 TEM). The altitude 
and temperature requirements specified in paragraphs a.1.a and a.2.a 
are flight conditions, but the incorporation or ability to incorporate 
a shaker unit or other vibration test equipment specified in paragraph 
a.2 is not strictly a flight condition, but a means of simulating a 
flight condition, so the introductory text of paragraph a needed to be 
updated for clarity. This clarification to the introductory text of 
paragraph a reflects the way this control has previously been 
interpreted by BIS. This final rule revises the control parameter in 
paragraph a.1.b to clarify the temperature range goes from below -
50[deg] C to above 125[deg] C. The revision to paragraph a.1.b does not 
change the scope of control of 9B610 and this revision will better 
reflect the control text of the MTCR Annex. (MTCR Annex Change, 
Category II: Item 15.B.4.a.1.b., Conforming Change to MTCR Annex).
    Lastly, as a non-substantive formatting change, this final rule 
revises paragraph a.2 to move the comma inside of the single quotation 
marks for the term `bare table.' These changes are not expected to have 
any impact on the number of license applications received by BIS.

Savings Clause

    Shipments of items removed from eligibility for a License Exception 
or export or reexport without a license (NLR) as a result of this 
regulatory action that were on dock for loading, on lighter, laden 
aboard an exporting or reexporting carrier, or enroute aboard a carrier 
to a port of export or reexport, on April 4, 2016, pursuant to actual 
orders for export or reexport to a foreign destination, may proceed to 
that destination under the previous eligibility for a License Exception 
or export or reexport without a license (NLR) so long as they are 
exported or reexported before May 4, 2016. Any such items not actually 
exported or reexported before midnight, on May 4, 2016, require a 
license in accordance with this rule.

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.

Regulatory 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, distribute 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 final rule has been designated a ``significant 
regulatory action,'' although not economically significant, under 
section 3(f) of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person may be 
required to respond to or 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 expected 
to increase slightly as a result of this rule. The expected increase in 
total burden hours is expected to be minimal and to not exceed the 
existing estimates for burden hours associated with the PRA and OMB 
control number 0694-0088. 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 under E.O. 13132.
    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 (5 U.S.C. 553(a)(1)). Immediate 
implementation of these amendments fulfills the United States' 
international commitments to the MTCR. The MTCR contributes to 
international peace and security by promoting greater responsibility in 
transfers of missile technology items that could make a contribution to 
delivery systems (other than manned aircraft) for weapons of mass 
destruction. The MTCR consists of 34 member countries that act on a 
consensus basis and the changes set forth in this rule implement 
agreements reached by MTCR member countries at the October 2015 Plenary 
in Rotterdam, Netherlands and pursuant to the April 2015 Technical 
Experts Meeting in Bern, Switzerland. Since the United States is a 
significant exporter of the items in this rule, implementation of this 
provision is necessary for the MTCR to achieve its purpose. Moreover, 
it is in the public interest to waive the notice and comment 
requirements, as any delay in implementing this rule will disrupt the 
movement of affected items globally because of disharmony between 
export control measures implemented by MTCR members. Export controls 
work best when all countries implement the same export controls in a 
timely manner. If this rulemaking were delayed to allow for notice and 
comment and a 30 day delay in effectiveness, it would prevent the 
United States from fulfilling its commitment to the MTCR in a timely 
manner, would injure the credibility of the United States in this and 
other multilateral regimes, and may impair the international 
communities' ability to effectively control the export of certain 
potentially national- and international-security-threatening materials.
    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 the 
Administrative Procedure Act or by any other law, the analytical 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) 
are

[[Page 19030]]

not applicable. Therefore, this regulation is issued in final form.

List of Subjects

15 CFR Part 742

    Exports, Terrorism.

15 CFR Part 750

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

15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

    Accordingly, parts 742, 750 and 774 of the Export Administration 
Regulations (15 CFR parts 730-774) are amended as follows:

PART 742--[AMENDED]

0
1. The authority citation for 15 CFR part 742 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; Sec. 1503, Pub. L. 108-11, 117 Stat. 559; 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. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 
13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Presidential 
Determination 2003-23, 68 FR 26459, 3 CFR, 2004 Comp., p. 320; 
Notice of August 7, 2015, 80 FR 48233 (August 11, 2015); Notice of 
November 12, 2015, 80 FR 70667 (November 13, 2015).


0
2. Section 742.5 is amended:
0
a. By redesignating paragraphs (b)(3) and (4) as paragraphs (b)(4) and 
(5), respectively; and
0
b. By adding a new paragraph (b)(3) to read as follows:


Sec.  742.5  Missile technology.

* * * * *
    (b) * * *
    (3)(i) Consistent with the MTCR Annex General Minimum Software 
Note, MTCR Annex General Technology Note and Sec.  750.7(c)(1)(x) of 
the EAR, the approval of any item controlled for MT reasons on a BIS 
license also authorizes the export, reexport, or transfer (in-country) 
to the same ultimate consignee(s) and end user(s) specified on the 
license of the minimum ``software,'' excluding source code, controlled 
for MT reasons that is required for the installation, operation, 
maintenance or repair of the item and the ``technology'' required for 
the installation, operation, maintenance, or repair of the item in 
order to ensure the item's safe operation as originally intended. The 
approval of any item controlled for MT reasons on a BIS license also 
authorizes the later export, reexport, or transfer (in-country) of 
``software'' controlled for MT reasons intended to correct defects (bug 
fixes) in a previously legally exported item under a BIS license to the 
same ultimate consignee(s) and end user(s) specified on the license, 
provided that the capability and/or performance of the item are not 
otherwise enhanced. This MT licensing policy is implemented concurrent 
with Sec.  750.7(c)(1)(x) because it applies to all MT licenses, except 
when a condition is placed on the license which excludes the use of 
Sec.  750.7(c)(1)(x), as described in paragraph (b)(3)(ii) of this 
section.
    (ii) Applicants are not required to identify or provide any support 
documentation for such minimum ``software'' or ``technology'' on a 
license application for MT controlled items because such minimum 
``software'' or ``technology'' is authorized within the scope of the 
license, consistent with Sec.  750.7(c)(1)(x). Applicants will be 
informed when such minimum ``software'' and/or ``technology'' in Sec.  
750.7(c)(1)(x) is excluded from the license by a BIS condition on the 
license, which will state the following: ``This license does not 
authorize the export, reexport or transfer (in-country) of the minimum 
``software'' and/or ``technology'' specified in paragraph (c)(1)(x) of 
Sec.  750.7 (See paragraph (b)(3) of Sec.  742.5).''

    Note to paragraph (b)(3): License Exception TSU under Sec.  
740.13 of the EAR is available for the ECCNs controlled for MT 
reasons specified in paragraph (a)(5) in Sec.  740.2, provided the 
software or technology is for an end use specified in that paragraph 
and meets the requirements of License Exception TSU. (See Sec. Sec.  
740.2(a)(5) and 740.13). The licensing policy in paragraph (b)(3) is 
only available for licensed exports (or reexports, or transfers (in-
country)).

* * * * *

PART 750--[AMENDED]

0
3. The authority citation for 15 CFR part 750 continues to read as 
follows:

    Authority:  50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; Sec 
1503, Pub. L. 108-11, 117 Stat. 559; E.O. 13026, 61 FR 58767, 3 CFR, 
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783; E.O. 13637, 78 FR 16129, 3 CFR, 2013 Comp., p. 223; 
Presidential Determination 2003-23, 68 FR 26459, 3 CFR, 2004 Comp., 
p. 320; Notice of August 7, 2015, 80 FR 48233 (August 11, 2015).


0
4. Section 750.7 is amended:
0
a. By removing the period at the end of paragraph (c)(1)(ix) and adding 
in its place ``; or''; and
0
b. By adding paragraph (c)(1)(x) to read as follows:


Sec.  750.7  Issuance of licenses.

* * * * *
    (c) * * *
    (1) * * *
    (x) Export, reexport or transfer (in-country) of missile technology 
(MT) controlled minimum necessary ``software'' and/or ``technology'' 
permitted pursuant to the missile technology licensing policy in Sec.  
742.5(b)(3) of the EAR. (See Sec.  742.5(b)(3)(i) for the scope of 
eligible minimum ``software'' and/or ``technology'' and other 
limitations for licenses for MT controlled items).

    Note 1 to paragraph (c)(1)(x): This MT licensing policy is 
implemented pursuant to paragraph (c)(1)(x) of this section because 
it applies to all MT licenses, except when a condition is placed on 
the license which excludes the use of paragraph (c)(1)(x) of this 
section, as described in Sec.  742.5(b)(3)(ii).


    Note 2 to paragraph (c)(1)(x): License Exception TSU under Sec.  
740.13 of the EAR is available for the ECCNs controlled for MT 
reasons specified in paragraph (a)(5) in Sec.  740.2, provided the 
software or technology is for an end use specified in that paragraph 
and meets the requirements of License Exception TSU. (See Sec. Sec.  
740.2(a)(5) and 740.13). The licensing policy in Sec.  742.5(b)(3) 
is only available for licensed exports (or reexports, or transfers 
(in-country)).

* * * * *

PART 774--[AMENDED]

0
5. The authority citation for 15 CFR part 774 continues to read as 
follows:

    Authority:  50 U.S.C. 4601 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; 43 
U.S.C. 1354; 15 U.S.C. 1824a; 50 U.S.C. 4305; 22 U.S.C. 7201 et 
seq.; 22 U.S.C. 7210; 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, 2015, 80 FR 48233 (August 11, 2015).


0
6. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Special Materials and Related Equipment, Chemicals, 
``Microorganisms'' and ``Toxins,'' Export Control Classification Number 
(ECCN) 1B101 is amended:
0
a. By revising ``items'' paragraphs a and b in the List of Items 
Controlled section; and
0
b. By adding Technical Notes for paragraphs a and b at the end of the 
``items'' paragraph b in the List of Items Controlled section to read 
as follows:

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

* * * * *

[[Page 19031]]

1B101 Equipment, other than that controlled by 1B001, for the 
``production'' of structural composites, fibers, prepregs or preforms, 
usable for rockets, missiles, or unmanned aerial vehicles capable of 
achieving a ``range'' equal to or greater than 300 km and their 
subsystems, as follows (see List of Items Controlled); and ``specially 
designed'' ``parts,'' ``components'' and ``accessories'' therefor.

* * * * *

List of Items Controlled

* * * * *
    Items:
    a. Filament winding machines or `fiber/tow-placement machines,' of 
which the motions for positioning, wrapping and winding fibers can be 
coordinated and programmed in three or more axes, designed to fabricate 
composite structures or laminates from fibrous or filamentary 
materials, and coordinating and programming controls;
    b. `Tape-laying machines' of which the motions for positioning and 
laying tape can be coordinated and programmed in two or more axes, 
designed for the manufacture of composite airframe and missile 
structures;

    Technical Notes for paragraphs a and b:  For the purposes of 
1B101.a. and 1B101.b., the following definitions apply:
    1. `Fiber/tow-placement machines' and `tape-laying machines' are 
machines that perform similar processes that use computer-guided 
heads to lay one or several `filament bands' onto a mold to create a 
part or a structure. These machines have the ability to cut and 
restart individual `filament band' courses during the laying 
process.
    2. A `filament band' is a single continuous width of fully or 
partially resin-impregnated tape, tow, or fiber. Fully or partially 
resin-impregnated `filament bands' include those coated with dry 
powder that tacks upon heating.
    3. `Fiber/tow-placement machines' have the ability to place one 
or more `filament bands' having widths less than or equal to 25.4 
mm. This refers to the minimum width of material the machine can 
place, regardless of the upper capability of the machine.
    4. `Tape-laying machines' have the ability to place one or more 
`filament bands' having widths less than or equal to 304.8 mm, but 
cannot place `filament bands' with a width equal to or less than 
25.4 mm. This refers to the minimum width of material the machine 
can place, regardless of the upper capability of the machine.

* * * * *

0
7. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Special Materials and Related Equipment, Chemicals, 
``Microorganisms'' and ``Toxins,'' Export Control Classification Number 
(ECCN) 1C111 is amended:
0
a. By revising ``items'' paragraph b.4 in the List of Items Controlled 
section; and
0
b. By revising ``items'' paragraphs d.9, d.12 and d.19 in the List of 
Items Controlled section to read as follows:

1C111 Propellants and constituent chemicals for propellants, other than 
those specified in 1C011, as follows (see List of Items Controlled).

* * * * *

List of Items Controlled

* * * * *
    Items:
* * * * *
    b. * * *
* * * * *
    b.4. Polybutadiene acrylic acid acrylonitrile (PBAN) (CAS 25265-19-
4/CAS 68891-50-9);
* * * * *
    d. * * *
* * * * *
    d.9. Ethylene dihydrazine (CAS 6068-98-0);
* * * * *
    d.12. 1,1-Dimethylhydrazinium azide (CAS 227955-52-4)/1,2-
Dimethylhydrazinium azide (CAS 299177-50-7);
* * * * *
    d.19. 1,1-Diethylhydrazine nitrate (DEHN)/1,2-Diethylhydrazine 
nitrate (DEHN) (CAS 363453-17-2);
* * * * *

0
8. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 7-- Navigation and Avionics, Export Control Classification 
Number (ECCN) 7A116 is amended by revising the heading to read as 
follows:

7A116 Flight control systems (pneumatic, hydraulic, mechanical, 
electro-optical, or electro-mechanical flight control systems 
(including fly-by-wire and fly-by-light systems) and attitude control 
equipment) designed or modified for ``missiles''. (These items are 
``subject to the ITAR''. See 22 CFR parts 120 through 130.)

0
9. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 9--Aerospace and Propulsion, Export Control Classification 
Number (ECCN) 9A012 is amended:
0
a. By revising the ``MT'' paragraph in the table in the License 
Requirements section;
0
b. By revising the Related Controls paragraph in the List of Items 
Controlled section; and
0
c. By adding ``items'' paragraph b.5 in the List of Items Controlled 
section to read as follows:

9A012 Non-military ``Unmanned Aerial Vehicles,'' (``UAVs''), unmanned 
``airships'', related equipment and ``components'', as follows (see 
List of Items Controlled).

License Requirements

    Reason for Control:
* * * * *

------------------------------------------------------------------------
                                            Country Chart (see sup No. 1
                Control(s)                          to part 738)
------------------------------------------------------------------------
 
                                * * * * *
MT applies to non-military Unmanned Air    MT Column 1.
 Vehicle (UAVs) and Remotely Piloted
 Vehicles (RPVs) that are capable of a
 maximum range of at least 300 kilometers
 (km), regardless of payload, and
 9A012.b.5.
 
                                * * * * *
------------------------------------------------------------------------

* * * * *

List of Items Controlled

* * * * *
    Related Controls: See the U.S. Munitions List Category VIII (22 CFR 
part 121). Also see ECCN 9A610 and Sec.  744.3 of the EAR.
* * * * *
    Items:
* * * * *
    b. * * *
* * * * *
    b.5. Pneumatic, hydraulic, mechanical, electro-optical, or 
electromechanical flight control systems (including fly-by-wire and 
fly-by-light systems) and attitude control equipment designed or 
modified for UAVs or drones controlled by ECCN 9A012., and capable of 
delivering at least 500 kilograms payload to a range of at least 300 
km.
* * * * *

0
10. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 9--Aerospace and Propulsion, Export Control Classification 
Number (ECCN) 9A610 is amended by revising ``items'' paragraph w in the 
List of Items Controlled section to read as follows:

9A610 Military aircraft and related commodities, other than those 
enumerated in 9A991.a (see List of Items Controlled).

* * * * *

List of Items Controlled

* * * * *
    Items:
* * * * *

[[Page 19032]]

    w. Pneumatic, hydraulic, mechanical, electro-optical, or 
electromechanical flight control systems (including fly-by-wire and 
fly-by-light systems) and attitude control equipment designed or 
modified for UAVs or drones controlled by either USML paragraph VIII(a) 
or ECCN 9A610.a., and capable of delivering at least 500 kilograms 
payload to a range of at least 300 km.
* * * * *

0
11. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 9--Aerospace and Propulsion, Export Control Classification 
Number (ECCN) 9B106 is amended:
0
a. By revising the introductory text of ``items'' paragraph a in the 
List of Items Controlled section;
0
b. By revising ``items'' paragraph a.1 in the List of Items Controlled 
section; and
0
c. By revising the introductory text of items paragraph a.2 to read as 
follows:

9B106 Environmental chambers usable for rockets, missiles, or unmanned 
aerial vehicles capable of achieving a ``range'' equal to or greater 
than 300 km and their subsystems, as follows (see List of Items 
Controlled).

* * * * *

List of Items Controlled

* * * * *
    Items:
* * * * *
    a. Environmental chambers having all of the following 
characteristics:
    a.1. Capable of simulating any of the following flight conditions:
    a.1.a. Altitude equal to or greater than 15,000 m; or
    a.1.b. Temperature range from below -50 [deg]C to above 125 [deg]C; 
and
    a.2. Incorporating, or designed or modified to incorporate, a 
shaker unit or other vibration test equipment to produce vibration 
environments equal to or greater than 10 g rms, measured `bare table,' 
between 20 Hz and 2 kHz while imparting forces equal to or greater than 
5 kN;
* * * * *

    Dated: March 29, 2016.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2016-07601 Filed 4-1-16; 8:45 am]
 BILLING CODE 3510-33-P