81_FR_49662 81 FR 49517 - Commerce Control List: Addition of Items Determined To No Longer Warrant Control Under United States Munitions List Category XIV (Toxicological Agents) or Category XVIII (Directed Energy Weapons)

81 FR 49517 - Commerce Control List: Addition of Items Determined To No Longer Warrant Control Under United States Munitions List Category XIV (Toxicological Agents) or Category XVIII (Directed Energy Weapons)

DEPARTMENT OF COMMERCE
Bureau of Industry and Security

Federal Register Volume 81, Issue 145 (July 28, 2016)

Page Range49517-49531
FR Document2016-17506

This final rule implements changes described in a proposed rule that the Bureau of Industry and Security (BIS) published on June 17, 2015. Specifically, this final rule describes how articles the President has determined no longer warrant control under Category XIV (Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated Equipment) or Category XVIII (Directed Energy Weapons) of the United States Munitions List (USML) are now controlled under the Commerce Control List (CCL). The affected Category XIV articles consist primarily of dissemination, detection, and protection ``equipment'' and related articles, such as production and test ``equipment,'' and are controlled under new Export Control Classification Numbers (ECCNs) 1A607, 1B607, 1C607, 1D607, and 1E607, as added to the CCL by this final rule. The affected Category XVIII articles consist primarily of tooling, production ``equipment,'' test and evaluation ``equipment,'' test models, and related articles and are controlled under new ECCNs 6B619, 6D619 and 6E619, as added to the CCL by this final rule. This final rule is one in a series of rules describing how various types of articles that the President has determined no longer warrant control on the USML, as part of the Administration's Export Control Reform Initiative, are controlled on the CCL in accordance with the requirements of the Export Administration Regulations (EAR). This final rule is being published by BIS in conjunction with a final rule from the Department of State, Directorate of Defense Trade Controls, which amends the list of articles controlled by USML Categories XIV and XVIII. The citations in this BIS rule to USML Categories XIV and XVIII reflect the amendments contained in the Department of State's rule. The revisions made by BIS in this rule are part of Commerce's retrospective regulatory review plan under Executive Order 13563 completed in August 2011.

Federal Register, Volume 81 Issue 145 (Thursday, July 28, 2016)
[Federal Register Volume 81, Number 145 (Thursday, July 28, 2016)]
[Rules and Regulations]
[Pages 49517-49531]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-17506]



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Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules 
and Regulations

[[Page 49517]]



DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 740 and 774

[Docket No. 120105019-5755-01]
RIN 0694-AF52


Commerce Control List: Addition of Items Determined To No Longer 
Warrant Control Under United States Munitions List Category XIV 
(Toxicological Agents) or Category XVIII (Directed Energy Weapons)

AGENCY: Bureau of Industry and Security, Department of Commerce.

ACTION: Final rule.

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

SUMMARY: This final rule implements changes described in a proposed 
rule that the Bureau of Industry and Security (BIS) published on June 
17, 2015. Specifically, this final rule describes how articles the 
President has determined no longer warrant control under Category XIV 
(Toxicological Agents, Including Chemical Agents, Biological Agents, 
and Associated Equipment) or Category XVIII (Directed Energy Weapons) 
of the United States Munitions List (USML) are now controlled under the 
Commerce Control List (CCL). The affected Category XIV articles consist 
primarily of dissemination, detection, and protection ``equipment'' and 
related articles, such as production and test ``equipment,'' and are 
controlled under new Export Control Classification Numbers (ECCNs) 
1A607, 1B607, 1C607, 1D607, and 1E607, as added to the CCL by this 
final rule. The affected Category XVIII articles consist primarily of 
tooling, production ``equipment,'' test and evaluation ``equipment,'' 
test models, and related articles and are controlled under new ECCNs 
6B619, 6D619 and 6E619, as added to the CCL by this final rule.
    This final rule is one in a series of rules describing how various 
types of articles that the President has determined no longer warrant 
control on the USML, as part of the Administration's Export Control 
Reform Initiative, are controlled on the CCL in accordance with the 
requirements of the Export Administration Regulations (EAR).
    This final rule is being published by BIS in conjunction with a 
final rule from the Department of State, Directorate of Defense Trade 
Controls, which amends the list of articles controlled by USML 
Categories XIV and XVIII. The citations in this BIS rule to USML 
Categories XIV and XVIII reflect the amendments contained in the 
Department of State's rule. The revisions made by BIS in this rule are 
part of Commerce's retrospective regulatory review plan under Executive 
Order 13563 completed in August 2011.

DATES: This rule is effective December 31, 2016.

ADDRESSES: The Department of Commerce's full retrospective regulatory 
review plan can be accessed at: http://open.commerce.gov/news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules.

FOR FURTHER INFORMATION CONTACT: For questions regarding dissemination, 
detection and protection ``equipment'' and related items that are 
controlled under new ECCNs 1A607, 1B607, 1C607, 1D607, and 1E607, 
contact Richard P. Duncan, Ph.D., Director, Chemical and Biological 
Controls Division, Office of Nonproliferation and Treaty Compliance, 
Bureau of Industry and Security, telephone: (202) 482-3343, email: 
[email protected].
    For questions regarding tooling, production ``equipment,'' test and 
evaluation ``equipment,'' test models, and related items that are 
controlled under new ECCNs 6B619, 6D619 and 6E619, contact Mark Jaso, 
Sensors and Aviation Division, Office of National Security & Technology 
Transfer Controls, Bureau of Industry and Security, telephone: (202) 
482-0987, email: [email protected].

SUPPLEMENTARY INFORMATION: 

Background

    This final rule is published by the Bureau of Industry and Security 
(BIS) as part of the Administration's Export Control Reform (ECR) 
Initiative, the object of which is to protect and enhance U.S. national 
security interests. The implementation of the ECR initiative includes 
amendment of the International Traffic in Arms Regulations (ITAR) and 
its U.S. Munitions List (USML), so that they control only those items 
that provide the United States with a critical military or intelligence 
advantage or otherwise warrant such controls, and amendment of the 
Export Administration Regulations (EAR) to control military items that 
do not warrant USML controls. This series of amendments to the ITAR and 
the EAR will reform the U.S. export control system to enhance our 
national security by: (i) Improving the interoperability of U.S. 
military forces with allied countries; (ii) strengthening the U.S. 
industrial base by, among other things, reducing incentives for foreign 
manufacturers to design out and avoid U.S.-origin content and services; 
and (iii) allowing export control officials to focus government 
resources on transactions that pose greater national security, foreign 
policy, or proliferation concerns than those involving our NATO allies 
and other multi-regime partners.
    Following the structure set forth in the final rule titled 
``Revisions to the Export Administration Regulations: Initial 
Implementation of Export Control Reform'' (78 FR 22660, April 16, 2013) 
(hereinafter the ``April 16 (initial implementation) rule''), this 
final rule describes BIS's implementation of controls, under the EAR's 
CCL, on certain dissemination, detection and protection ``equipment'' 
and related articles previously controlled under USML Category XIV in 
the ITAR and certain tooling, production ``equipment,'' test and 
evaluation ``equipment,'' test models and related articles previously 
controlled under USML Category XVIII of the ITAR.
    In the April 16 (initial implementation) rule, BIS created a series 
of new ECCNs to control items that would be removed from the USML and 
similar items from the Wassenaar Arrangement on Export Controls for 
Conventional Arms and Dual Use Goods and Technologies Munitions List 
(Wassenaar Arrangement Munitions List or WAML) that were already 
controlled elsewhere on the CCL. That final rule referred to this 
series of new ECCNs as

[[Page 49518]]

the ``600 series,'' because the third character in each of these new 
ECCNs is the number ``6.'' The first two characters of the ``600 
series'' ECCNs serve the same function as any other ECCN as described 
in Sec.  738.2 of the EAR. The first character is a number, within the 
range of 0 through 9, that identifies the Category on the CCL in which 
the ECCN is located. The second character is a letter, within the range 
of A through E, that identifies the product group in a CCL Category. As 
indicated above, the third character in the ``600 series'' ECCNs is the 
number ``6,'' which distinguishes the items controlled under this 
series of ECCNs from items identified under other ECCNs on the CCL. 
With few exceptions, the final two characters identify the WAML 
category that covers items that are the same or similar to items in a 
particular ``600 series'' ECCN.
    Pursuant to section 38(f) of the Arms Export Control Act (AECA), 
the President is obligated to review the USML ``to determine what 
items, if any, no longer warrant export controls under'' the AECA. The 
President must report the results of the review to Congress and wait 30 
days before removing any such items from the USML. The report must 
``describe the nature of any controls to be imposed on that item under 
any other provision of law.'' 22 U.S.C. 2778(f)(1).
    The changes made by this final rule and in the State Department's 
companion rule to Categories XIV and XVIII of the USML are based on a 
review of these USML Categories by the Defense Department, which worked 
with the Departments of State and Commerce in preparing these 
amendments. Other agencies with expertise and equities in the items at 
issue in these rules were consulted as well. The review focused on 
identifying those types of articles that provide the United States with 
a critical military or intelligence capability and that are not 
currently in normal commercial use. Such items remain on the USML. 
Other items with less than a critical military or intelligence 
capability not in normal commercial use will transition to the ``600 
series'' controls. It is the intent of the agencies that USML 
Categories XIV and XVIII, and the corresponding ``600 series'' ECCNs on 
the CCL, not control items in normal commercial use. Such items should 
be controlled under existing dual-use controls on the CCL, consistent 
with the Wassenaar Arrangement List of Dual-Use Goods and Technologies.
    All references to the USML in this rule are to the list of defense 
articles that are controlled for purposes of export, temporary import, 
or brokering pursuant to the ITAR, and not to the list of defense 
articles on the United States Munitions Import List (USMIL) that are 
controlled by the Bureau of Alcohol, Tobacco, Firearms and Explosives 
(ATF) for purposes of permanent import under its regulations at 27 CFR 
part 447. Pursuant to section 38(a)(1) of the AECA, all defense 
articles controlled for export or import, or that are subject to 
brokering controls, are part of the ``USML'' under the AECA. For the 
sake of clarity, references to the USMIL are to the list of defense 
articles controlled by ATF for purposes of permanent import. All 
defense articles described in the USMIL or the USML are subject to the 
brokering controls administered by the U.S. Department of State in part 
129 of the ITAR. The transfer of defense articles from the ITAR's USML 
to the EAR's CCL, for purposes of export controls, does not affect the 
list of defense articles that are controlled on the USMIL under the 
AECA for purposes of permanent import.
    On January 18, 2011, the President issued Executive Order 13563, 
affirming general principles of regulation and directing government 
agencies to conduct retrospective reviews of existing regulations. The 
revisions made by this rule are part of Commerce's retrospective 
regulatory review plan under Executive Order 13563. Commerce's full 
plan, completed in August 2011, can be accessed at: http://open.commerce.gov/news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules.
    This final rule implements amendments to the EAR proposed in BIS's 
rule titled ``Commerce Control List: Addition of Items Determined to No 
Longer Warrant Control under United States Munitions List Category XIV 
(Toxicological Agents) or Category XVIII (Directed Energy Weapons),'' 
which was published in the Federal Register on June 17, 2015 (RIN 0694-
AF52) (80 FR 34562) (herein ``the June 17 (toxicological agents and 
directed energy weapons) rule'').

Dissemination, Detection and Protection ``Equipment'' and Related Items

Public Comments and BIS Responses

    BIS received comments from eight parties in response to the 
proposed amendments in the June 17 (toxicological agents and directed 
energy weapons) rule that addressed dissemination, detection and 
protection ``equipment'' and related items.

ECCN 1A607 (Military Dissemination, Detection, and Protection 
``Equipment'')

    Comment: One commenter noted that tear gas and riot control agents 
were dropped from proposed USML Category XIV(d), but did not appear in 
proposed ECCN 1A607.
    Response: The tear gas and riot control agents removed from USML 
Category XIV(d) are now controlled under ECCN 1C607.a.1 through a.6, as 
they were proposed to be controlled in BIS's June 17 (toxicological 
agents and directed energy weapons) rule. Therefore, no further action 
is required.

ECCN 1A607.f (Protection ``Equipment'')

    Comment: One commenter noted that proposed ECCN 1A607.f included 
protection ``equipment,'' but did not specifically indicate that it 
controlled Chemical Agent Resistant Coatings (CARC). The commenter 
recommended that CARC be specifically identified in ECCN 1A607.f or 
that the word ``material'' be added so that companies would be more 
likely to interpret ECCN 1A607.f to include coatings, such as CARC. In 
addition, the commenter recommended that the export controls on CARC be 
changed to align more closely with export controls maintained by U.S. 
allies, who do not require an export license for CARC to most 
destinations. Specifically, the commenter felt that companies familiar 
with the European Union military list could become confused, because 
the controls in ECCN 1A607.f are similar to those described in ML.7.f, 
which does not control CARC. In the event that CARC continues to 
require a license to most destinations, the commenter recommended that 
all CARC be placed under the export licensing jurisdiction of a single 
U.S. Government agency to simplify jurisdictional and/or classification 
determinations.
    Response: ECCN 1A607.f indicates that it controls protection 
``equipment'' not controlled by USML Category XIV(f) that is 
``specially designed'' for military use and for defense against 
materials specified by USML XIV(a) or (b) or riot control agents 
controlled by ECCN 1C607.a. BIS believes that this control language, as 
revised in this final rule to specify ``protective coatings'' (as well 
as air conditioning units and protective clothing), is now sufficiently 
clear as to leave no doubt that it applies to paintings/coatings such 
as CARC. Consequently, the control language used in the June 17 
(toxicological agents and directed energy weapons) rule has been 
retained in this final rule with only the above-referenced change 
(i.e., the

[[Page 49519]]

revision of the parenthetical phrase in the introductory text of ECCN 
1A607.f to read, as follows: ``including air conditioning units, 
protective coatings, and protective clothing.''
    As for the scope of the license requirements that apply to CARC, 
all items in ECCN 1A607, including CARC, are subject to NS Column 1 and 
RS Column 1 license requirements, which apply to all destinations, 
except Canada. While the scope of the EAR license requirements on CARC 
is considerably broader than that maintained by some of our allies, 
exports of CARC are authorized without a license, under License 
Exception STA, for destinations in, or nationals of, Country Group A:5 
in Supplement No. 1 to part 740 of the EAR, which currently contains 36 
countries. Furthermore, the EAR requirements that apply to the CARC 
that were previously controlled under USML Category XIV and are now 
controlled under new ECCN 1A607.f represent a significant easing of the 
regulatory burden on exporters of such CARC through: (i) Elimination of 
some license requirements; (ii) greater availability of license 
exceptions; (iii) simpler license application procedures; and (iv) 
reduced or eliminated registration fees. With respect to the 
commenter's recommendation that all CARC be placed under the export 
licensing jurisdiction of a single U.S. Government agency, BIS notes 
that the only CARC that continue to be controlled under USML Category 
XIV (specifically, in paragraph (f)(7) of USML Category XIV) are those 
that have been qualified to one of the following four military 
specifications: MIL-PRF-32348, MIL-DTL-64159, MIL-C-46168, or MIL-DTL-
53039. In light of the anticipated benefits of moving certain CARC from 
USML Category XIV to new ECCN 1A607 on the EAR's CCL, as described 
above, there would appear to be little practical upside to continuing 
to control all CARC under the export licensing jurisdiction of a single 
U.S. Government agency.
    Comment: One commenter recommended that all items identified in 
USML Category XIV(f)(4) for individual protection against chemical and 
biological agents specified in USML Category XIV(a) or (b) should be 
controlled under new ECCN 1A607.f on the CCL. In addition, the 
commenter recommended that all individual protection ``equipment'' and 
clothing controlled under new ECCN 1A607.f should be authorized for 
export under License Exception BAG under special provisions similar to 
those currently applicable to ``personal protective equipment'' (i.e., 
ECCN 1A613.c or .d) in accordance with Section 740.14(h) of the EAR.
    Response: USML Category XIV(f)(4), as set forth in the State 
Department's companion rule to this final rule, controls equipment or 
items that offer individual or collective protection against items 
specified in USML Category XIV(a) or (b), as follows: (1) M53 Chemical 
Biological Protective Mask or M50 Joint Service General Purpose Mask 
(JSGPM); (2) filter cartridges containing sorbents controlled in USML 
Category XIV(f)(4)(iii); (3) ASZM-TEDA carbon; and (4) ensembles, 
garments, suits, jackets, pants, boots or socks for individual 
protection, and liners for collective protection, that allow no more 
than 1% breakthrough of GD, or no more than 2% breakthrough of any 
other chemical specified in USML Category XIV(a), when evaluated by 
executing the applicable method(s) of testing described in the current 
version of Test Operations Procedure (TOP) 08-2-201 (Collective 
Protection Novel Closures Testing) or 08-2-501 (Permeation Testing of 
Materials with Chemical Agents or Simulants--Swatch Testing) and using 
the defined DoD-specific requirements described therein.
    The control criteria in USML Category XIV(f)(4), as described 
above, are the result of a review of USML Category XIV, as part of the 
Administration's Export Control Reform (ECR) Initiative, to ensure that 
it controls only those items that are inherently military, provide the 
United States with a critical military or intelligence advantage, or 
otherwise warrant control on the USML. In the absence of any compelling 
evidence contrary to the results of this review, no change is 
contemplated, with respect to these USML Category XIV criteria, at this 
time. New ECCN 1A607.f controls ``equipment'' previously controlled 
under USML Category XIV(f)(4) or (f)(5) that the President has 
determined no longer warrants control on the USML (i.e., protection 
``equipment,'' including ``equipment'' for individual protection, not 
controlled by USML Category XIV(f) that is ``specially designed'' for 
military use and for defense against materials specified by USML XIV(a) 
or (b) or riot control agents controlled by ECCN 1C607.a). This final 
rule does not expand the scope of new ECCN 1A607.f to control all 
``equipment'' for individual protection against chemical and biological 
agents specified in USML Category XIV(a) or (b), because this change 
would be contrary to the President's determination, based on the 
results of the aforementioned review of USML Category XIV (i.e., it 
would result in the transfer to the CCL of items that are inherently 
military, provide the United States with a critical military or 
intelligence advantage, or otherwise warrant control on the USML).
    With respect to the commenter's recommendation that all individual 
protection ``equipment'' and clothing controlled under new ECCN 1A607.f 
should be authorized for export under License Exception BAG (under 
special provisions similar to those currently applicable to ``personal 
protective equipment''), this final rule amends the License Exception 
BAG provisions in Section 740.14(h) of the EAR to authorize exports, 
reexports, or in-country transfers of chemical or biological agent 
protective gear consistent with the requirements and restrictions 
described therein. In a corresponding change, this final rule also 
amends the License Exception TMP provisions in Section 740.9(a)(11) of 
the EAR to authorize temporary exports, reexports, or in-country 
transfers of chemical or biological agent protective gear consistent 
with the requirements and restrictions described therein. These changes 
are also intended to make the scope of these license exceptions, as 
they apply to chemical or biological agent protective gear controlled 
under new ECCN 1A607.f, conform with the scope of the ITAR exemption 
for personal protective equipment in Section 123.17 of the ITAR.
    Comment: One commenter noted that neither BIS's June 17 
(toxicological agents and directed energy weapons) rule nor State's 
companion proposed rule clearly indicated whether filter cartridges 
containing sorbents funded by the Department of Defense via contract or 
other funding authorization, as proposed to be controlled under USML 
Category XIV(n), would be controlled under new ECCN 1A607.f on the CCL 
or under USML Category XIV(f) or (n). In addition, the commenter noted 
that neither of these proposed rules clearly indicated whether filter 
cartridges that meet the requirements of specifications PRF-EA-2251 for 
the M61 filter cartridge, but do not contain ASZM-TEDA carbon, would be 
controlled under new ECCN 1A605.f or under USML Category XIV(f) or (n).
    Response: Neither of the observations made by the commenter 
requires any modification to new ECCN 1A607.f. Filter cartridges 
containing developmental sorbents are controlled under USML Category 
XIV(f)(4)(ii) if the sorbents were funded by the Department of Defense 
via contract or other funding authorization, as specified in USML 
Category XIV(n), and none of the

[[Page 49520]]

elements in Note 1 to paragraph (n) apply (i.e., the sorbents are 
determined to be subject to the EAR via a commodity jurisdiction 
determination or they are identified in the relevant Department of 
Defense contract or other funding authorization as being developed for 
both civil and military applications). The commenter's question 
concerning the export licensing jurisdiction status of filter 
cartridges reflects the fact that State's companion Category XIV/XVIII 
proposed rule did not specifically enumerate (in Category XIV) filter 
cartridges containing sorbents controlled under USML Category XIV(n). 
USML Category XIV(f)(ii), in State's proposed rule, specified that it 
controlled filter cartridges containing sorbents controlled under USML 
Category XIV(f)(iii), but the control status of filter cartridges 
containing sorbents enumerated in proposed USML Category XIV(n) was not 
specifically indicated. Consequently, State's companion Category XIV/
XVIII final rule corrects this oversight by clarifying USML Category 
XIV to indicate that it applies to filter cartridges that contain any 
of the sorbents specified under USML Category XIV(f)(iii) or (n) and, 
in so doing, eliminates the possibility that such filter cartridges 
could be controlled under new ECCN 1A607.f on the CCL (except to the 
limited extent that sorbents funded by the Department of Defense via 
contract or other funding authorization are excluded from USML Category 
XIV(n) for a specified period of time, as indicated in Note 3 thereto).
    In response to the commenter's request for clarification concerning 
controls on filter cartridges that meet the requirements of 
specifications PRF-EA-2251 for the M61 filter cartridge, but do not 
contain ASZM-TEDA carbon, their control status also would depend upon 
the sorbents that they contain. As indicated above, filter cartridges 
that contain any of the sorbents controlled by USML Category XIV (i.e., 
sorbents specified under paragraph (f)(iii) or (n) of Category XIV) are 
controlled under USML Category XIV. Otherwise, they are controlled 
under new ECCN 1A607.f.

ECCN 1A607.h (Detection/Identification ``Equipment'')

    Comment: One commenter interpreted BIS's June 17 (toxicological 
agents and directed energy weapons) rule and State's companion USML 
Category XIV/XVIII proposed rule as transferring to new ECCN 1A607.h on 
the CCL all detection equipment, previously controlled under USML 
Category XIV(f)(2), that is ``specially designed'' for military use for 
the detection of agents identified in proposed USML Category XIV(a) or 
(b), except for: (1) Detection equipment that is classified or that 
relates to classified information; and (2) military detection equipment 
developed under a DoD contract or other funding authorization, as 
described in proposed USML Category XIV(f)(2) and subject to the 
restriction in Note 3 thereto, which indicated that the controls in 
paragraph (f)(2) would apply only to controls dated one year (or later) 
after the date of publication of State's USML Category XIV final rule. 
Note 3 to paragraph (f)(2) was mistakenly included in USML Category 
XIV, as described in State's proposed rule; consequently, it does not 
appear in State's final rule.
    Response: New ECCN 1A607.h controls ``equipment'' not controlled by 
USML Category XIV(f) that is ``specially designed'' for military use 
and for the detection or identification of materials specified by USML 
Category XIV(a) or (b) or riot control agents controlled by ECCN 
1C607.a on the CCL. Because new ECCN 1A607.h indicates that it does not 
include any detection equipment that is controlled by USML Category 
XIV(f), the scope of the ECCN is necessarily dependent upon the scope 
of Category XIV(f), which, in turn, is subject to interpretation by the 
U.S. Department of State. Therefore, the Department of State, and not 
BIS, is the appropriate U.S. Government agency to confirm whether the 
commenter's statement is correct (in whole or in part), as it applies 
to the scope of new ECCN 1A607.h and the ``equipment'' previously 
controlled under USML Category XIV(f)(2). Consequently, this question 
should be addressed, with respect to specific detection ``equipment,'' 
through the submission of one or more commodity jurisdiction (CJ) 
requests to the State Department's Directorate of Defense Trade 
Controls (DDTC), consistent with the requirements in the ITAR.

ECCN 1A607.k (Medical Countermeasures)

    Comment: One commenter noted that items controlled under proposed 
new ECCN 1A607.k (military medical countermeasures ``equipment''), and 
related ``technology'' controlled under proposed new ECCN 1E607.a, 
would not be eligible for export/reexport under the License Exception 
GOV provisions in Section 740.11(d), International Inspections under 
the Chemical Weapons Convention (CWC), to destinations located outside 
of Country Group A:5 in Supplement No. 1 to part 740 of the EAR.
    Response: The commenter is correct in noting that ``equipment'' in 
new ECCN 1A607.k and related ``technology'' in new ECCN 1E607.a are not 
eligible for export under the License Exception GOV provisions in 
Section 740.11(d) of the EAR, except to destinations located in Country 
Group A:5. This restriction, which is described in Section 
740.11(d)(2)(iii) of the EAR, was implemented as part of BIS's April 16 
(initial implementation) rule in which the License Exception GOV 
provisions in Section 740.11 of the EAR were revised. Among the License 
Exception GOV provisions that were affected by these revisions were 
those authorizing exports and reexports to the Organization for the 
Prohibition of Chemical Weapons (OPCW) and exports and reexports by the 
OPCW for official international inspection and verification use under 
the terms of the CWC. Under the OPCW authorization, as revised, Section 
740.11(d)(2)(iii) of the EAR prohibits exports and reexports of items 
controlled under ``600 series'' ECCNs on the CCL to countries not 
listed in Country Group A:5. Country Group A:5 currently consists of 36 
countries, as established by BIS's April 16 (initial implementation) 
rule, which became effective on October 15, 2013. The scope of the OPCW 
authorization in License Exception GOV was the result of extensive U.S. 
Government interagency review and discussion. Furthermore, the scope of 
eligible countries for the OPCW authorization (i.e., 36 countries), as 
established by BIS's April 16 (initial implementation) rule, was 
initially broader than the country scope that was authorized under the 
License Exception GOV provisions for cooperating governments, as 
described in Section 740.11(c) of the EAR, which then authorized 
exports and reexports to 27 cooperating governments and agencies of the 
North Atlantic Treaty Organization (NATO). The country scope of the 
cooperating governments authorization under License Exception GOV was 
subsequently expanded, by BIS's Wassenaar Arrangement (WA) 2014 Plenary 
final rule (98 FR 29432, May 21, 2015), to include 41 cooperating 
governments and agencies of NATO. Currently, the country scope of the 
cooperating governments and OPCW authorizations under License Exception 
GOV are roughly equivalent (i.e., the former applies to four more 
countries than the latter--two of those countries are CWC States 
Parties and one is a special administrative region of a State Party). 
In light of the recent changes to the License Exception GOV provisions 
described above, BIS does

[[Page 49521]]

not have any immediate plans to address possible revisions to the 
country scope of the OPCW authorization. BIS also considers any such 
action to be outside the scope of this rulemaking, which does not 
specifically address EAR requirements involving the CWC and the OPCW.

ECCN 1A607.x (``Parts,'' ``Components,'' ``Accessories,'' and 
``Attachments'')

    Comment: One commenter noted that proposed new ECCN 1A607.x 
indicated that it controlled ``parts,'' ``components,'' 
``accessories,'' and ``attachments'' ``specially designed'' for the 
``equipment'' described in proposed ECCN 1A607.e, .f, .g, or .j. 
However, the commenter also noted that ``parts,'' ``components,'' 
``accessories,'' and ``attachments'' ``specially designed'' for the 
detection/identification ``equipment'' described in proposed ECCN 
1A607.h were not included in proposed ECCN 1A607.x. As a result, the 
commenter questioned whether any ``parts,'' ``components,'' 
``accessories,'' and ``attachments'' ``specially designed'' for 
detection/identification ``equipment'' that might be removed from the 
USML, as a result of the proposed revisions to USML Category XIV(f), 
would be controlled under proposed new ECCN 1A607 on the CCL (e.g., 
under proposed ECCN 1A607.x).
    Response: The commenter is correct in noting that proposed new ECCN 
1A607.x specified only those ``parts,'' ``components,'' 
``accessories,'' and ``attachments'' ``specially designed'' for the 
``equipment'' described in ECCN 1A607.e, .f, .g, or .j, and not those 
``parts,'' ``components,'' ``accessories,'' and ``attachments'' 
``specially designed'' for detection/identification ``equipment'' 
described in ECCN 1A607.h. This final rule corrects that oversight. New 
ECCN 1A607.x, as added to the CCL by this final rule, indicates that it 
controls ``parts,'' ``components,'' ``accessories,'' and 
``attachments'' that are ``specially designed'' for a commodity 
controlled by ECCN 1A607.e, .f, .g, .h, or .j or for a defense article 
controlled by USML Category XIV(f) and that are not enumerated or 
otherwise described elsewhere in the USML.

General Comments on Dissemination, Detection and Protection 
``Equipment''

    Comment: One commenter noted that the BIS and State Category XIV/
XVIII proposed rules omitted coverage of the Wassenaar Munitions List 
(WAML) items in WAML 7.a (Biological agents or radioactive materials 
adapted for use in war to produce casualties in humans and animals, 
degrade equipment, or damage crops or the environment).
    Response: The items noted by the commenter are not identified in 
any of the new ``600 series'' ECCNs described in BIS's June 17 
(toxicological agents and directed energy weapons) rule, but they are 
clearly enumerated under USML Category XIV in State's companion 
proposed rule. Proposed USML Category XIV(b)(1)(ii) identifies specific 
biological agents that have been militarized, as described in USML 
Category XIV(b)(1)(i), and proposed USML Category XIV(b)(2) describes 
biological agents identified under ECCN 1C351, 1C353, or 1C354 on the 
EAR's CCL that have been militarized, as described in USML Category 
XIV(b)(2)(i) and (b)(2)(ii). These defense articles are identified in 
the USML Category XIV amendments contained in State's companion rule to 
this final rule.
    Comment: One commenter noted that the following two Australia Group 
(AG) controlled items were not identified in either the BIS or State 
Category XIV/XVIII proposed rules:
    (1) Valves with a closure element designed to be interchangeable, 
as listed under 6.b on the AG Control List of Dual-Use Chemical 
Manufacturing Facilities and Equipment); and (2) nose-only exposure 
apparatus, as listed under 8.b on the AG Control List of Dual-Use 
Biological Equipment.
    Response: The commenter accurately noted that neither of the two 
items were identified in the BIS and State Category XIV/XVIII proposed 
rules. However, because these items are identified as dual-use items on 
the AG common control lists indicated above, neither item is within the 
scope of this rulemaking. The valves, described under 6.b on the AG 
chemical manufacturing facilities and equipment control list, are 
currently controlled under ECCN 2B350.g.2 on the CCL. The nose-only 
exposure apparatus, described under 8.b on the AG biological equipment 
common control list, was recently added to this AG control list and is 
currently controlled under ECCN 2B352.h based on a recent update of AG 
listed items on the CCL (see 81 FR 36458, June 7, 2016).
    Comment: One commenter indicated that some of the proposed new 
``600 series'' ECCNs in BIS's June 17 (toxicological agents and 
directed energy weapons) rule maintained unilateral controls on certain 
items that were proposed to be transferred to the CCL from USML 
Category XIV.
    Response: All the items described in the new ``600 series'' ECCNs 
created by this final rule were previously controlled on the USML under 
the ITAR and were added to these new ECCNs on the CCL only after the 
President determined that these items no longer warrant control on the 
USML for the reasons set forth above.

Changes Made by This Rule to Controls on Certain Dissemination, 
Detection and Protection ``Equipment'' and Related Items Previously 
Controlled Under USML Category XIV

    This final rule creates five new ``600 series'' ECCNs in CCL 
Category 1 (ECCNs 1A607, 1B607, 1C607, 1D607, and 1E607) that clarify 
the EAR controls applicable to certain dissemination, detection and 
protection ``equipment'' and related items that the President has 
determined no longer warrant control under USML Category XIV. Terms 
such as ``part,'' ``component'' ``accessories,'' ``attachments,'' and 
``specially designed'' are applied in the same manner in this rule as 
those terms are defined in Section 772.1 of the EAR. In addition, to 
assist exporters in determining the control status of their items, a 
``Specially Designed'' Decision Tool and a CCL Order of Review Decision 
Tool are available on the BIS Web site at: http://www.bis.doc.gov/index.php/decision-tree-tools.

New ECCN 1A607 Military dissemination ``equipment'' for riot control 
agents, military detection and protection ``equipment'' for 
toxicological agents (including chemical, biological, and riot 
control agents), and related commodities.

    In new ECCN 1A607, paragraphs .a through .d, paragraph .i, and 
paragraphs .l through .w are reserved. Paragraph .e of ECCN 1A607 
controls ``equipment'' ``specially designed'' for military use and for 
the dissemination of any of the riot control agents controlled in ECCN 
1C607.a. Paragraph .f of ECCN 1A607 controls protection ``equipment'' 
``specially designed'' for military use and for defense against either 
materials controlled by USML Category XIV(a) or (b) or any of the riot 
control agents in new ECCN 1C607.a. Paragraph .g of ECCN 1A607 controls 
decontamination ``equipment'' not controlled by USML Category XIV(f) 
that is ``specially designed'' for military use and for the 
decontamination of objects contaminated with materials controlled by 
USML Category XIV(a) or (b). Paragraph .h controls ``equipment'' not 
controlled by USML Category XIV(f) that is ``specially designed'' for 
military use and for the detection or identification of either 
materials specified by USML Category XIV(a) or (b) or riot control 
agents controlled by new ECCN 1C607.a. Paragraph .j controls 
``equipment'' ``specially

[[Page 49522]]

designed'' to: (i) Interface with a detector, shelter, vehicle, vessel, 
or aircraft controlled by the USML or a ``600 series'' ECCN; and (ii) 
collect and process samples of articles controlled in USML Category 
XIV(a) or (b). Paragraph .k controls medical countermeasures that are 
``specially designed'' for military use (including pre- and post- 
treatments, antidotes, and medical diagnostics) and ``specially 
designed'' to counter chemical agents controlled by USML Category 
XIV(a). Paragraph .x controls ``parts,'' ``components,'' 
``accessories,'' and ``attachments'' that are ``specially designed'' 
for a commodity controlled under ECCN 1A607.e, .f, .g, .h, or .j or a 
defense article controlled in USML Category XIV(f) and that are not 
enumerated or otherwise described elsewhere in the USML.

New ECCN 1B607 Military test, inspection, and production 
``equipment'' and related commodities ``specially designed'' for the 
``development,'' ``production,'' repair, overhaul, or refurbishing 
of commodities identified in ECCN 1A607 or 1C607, or defense 
articles enumerated or otherwise described in USML Category XIV.

    In new ECCN 1B607, paragraph .a controls ``equipment,'' not 
including incinerators, that is ``specially designed'' for the 
destruction of chemical agents controlled by USML Category XIV(a). 
Paragraph .b of ECCN 1B607 controls test facilities and ``equipment'' 
that are ``specially designed'' for military certification, 
qualification, or testing of commodities controlled by new ECCN 
1A607.e, .f, .g, .h, or .j or by USML Category XIV(f), except for 
XIV(f)(1). Paragraph .c of ECCN 1B607 controls tooling and 
``equipment'' ``specially designed'' for the ``development,'' 
``production,'' repair, overhaul, or refurbishing of commodities 
controlled under new ECCN 1A607.e, .f, .g, .h, or .j or USML Category 
XIV(f). Paragraphs .d through .w are reserved. Paragraph .x controls 
``parts,'' ``components,'' ``accessories,'' and ``attachments,'' not 
enumerated or otherwise described elsewhere in the USML, that are 
``specially designed'' for a commodity controlled by ECCN 1B607.b or .c 
or for a defense article controlled by USML Category XIV(f).
    As indicated above, ECCN 1B607.b does not control test facilities 
and ``equipment'' that are ``specially designed'' for military 
certification, qualification, or testing of commodities and are 
enumerated or otherwise described in USML Category XIV(f)(1), as set 
forth in State's companion rule to this final rule (e.g., see the 
equipment in USML Category XIV(f)(1)(ii) that is ``specially designed'' 
for testing the articles controlled in paragraph (a), (b), (c), (e), or 
(f)(4) of USML Category XIV). In addition to the test facilities and 
``equipment'' controlled by ECCN 1B607.b, see the tooling and 
``equipment'' classified under ECCN 2B350 or 2B352 for producing the 
chemical/biological agents, precursors, or defoliants described in USML 
Category XIV(a), (b), (c), or (e). The EAR also control tooling and 
``equipment'' to produce the antibodies/polynucleotides and vaccines 
described in USML Category XIV(g) and (h), respectively, as follows: 
lab ``equipment'' designated as EAR99 under the EAR; biological dual-
use ``equipment'' (including protective ``equipment'') classified under 
ECCN 2B352; and EAR-controlled biological systems for making vaccines 
(involving the use of mice, rabbits, etc.).

New ECCN 1C607 Tear gases, riot control agents and materials for the 
detection and decontamination of chemical warfare agents.

    New ECCN 1C607.a controls specified tear gases and riot control 
agents. Paragraph .b of ECCN 1C607 controls ``biopolymers'' not 
controlled by USML Category XIV(g) that are ``specially designed'' or 
processed for the detection or identification of chemical warfare (CW) 
agents specified by USML Category XIV(a) and the cultures of specific 
cells used to produce them. Paragraph .c controls specified 
``biocatalysts'' and biological systems that are not controlled by USML 
Category XIV(g) and are ``specially designed'' for the decontamination 
or degradation of CW agents specified by USML Category XIV(a). 
Paragraph .d controls chemical mixtures not controlled by USML Category 
XIV(f) that are ``specially designed'' for military use for the 
decontamination of objects contaminated with materials specified by 
USML Category XIV(a) or (b).

New ECCN 1D607 ``Software'' ``specially designed'' for the 
``development,'' ``production,'' operation, or maintenance of items 
controlled by 1A607, 1B607 or 1C607.

    New ECCN 1D607.a controls ``software'' ``specially designed'' for 
the ``development,'' ``production,'' operation, or maintenance of items 
controlled by ECCN 1A607, 1B607 or 1C607. Paragraph .b of ECCN 1D607 is 
reserved.

New ECCN 1E607 ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, 
overhaul, or refurbishing of items controlled by ECCN 1A607, 1B607, 
1C607, or 1D607.

    New ECCN 1E607.a controls ``technology'' ``required'' for the 
``development,'' ``production,'' operation, installation, maintenance, 
repair, overhaul, or refurbishing of items controlled by ECCN 1A607, 
1B607, 1C607, or 1D607. Paragraph .b of ECCN 1E607 is reserved.
    Amendments to License Exceptions BAG and TMP related to Individual 
Protection ``Equipment'' in ECCN 1A607.f.
    In response to public comments recommending that all individual 
protection ``equipment'' and clothing controlled under new ECCN 1A607.f 
should be authorized for export under License Exception BAG (under 
special provisions similar to those currently applicable to ``personal 
protective equipment''), this final rule amends the License Exception 
BAG provisions in Section 740.14(h) of the EAR to authorize exports, 
reexports, or in-country transfers of chemical or biological agent 
protective gear consistent with the requirements and restrictions 
described therein. In a corresponding change, this final rule also 
amends the License Exception TMP provisions in Section 740.9(a)(11) of 
the EAR to authorize temporary exports, reexports, or in-country 
transfers of chemical or biological agent protective gear consistent 
with the requirements and restrictions described therein. The 
amendments to License Exceptions BAG and TMP also change the 
requirements for Afghanistan to be consistent with those of the 
majority of other Country Group D:5 destinations (i.e., the U.S. person 
authorized to use the license exception must be affiliated with the 
U.S. Government and be traveling on official business or traveling in 
support of a U.S. Government contract). The same requirement applies to 
the use of these license exception provisions for Iraq, also a D:5 
country, with the additional option that the U.S. person must be 
traveling to Iraq under a direct authorization by the Government of 
Iraq and engaging in activities for, on behalf of, or at the request 
of, the Government of Iraq. These amendments are also intended to 
ensure that the scope of these license exceptions, as they apply to 
chemical or biological agent protective gear controlled under new ECCN 
1A607.f, conforms with the scope of the ITAR exemption for personal 
protective equipment in Section 123.17 of the ITAR (e.g., by correcting 
the provisions for Afghanistan, as described above, to be consistent 
with those of the majority of other Country Group D:5 destinations).

[[Page 49523]]

Tooling, Production ``Equipment,'' Test and Evaluation ``Equipment,'' 
Test Models and Other Articles Related to Directed Energy Weapons

Public Comments and BIS Responses

    BIS received comments from two parties in response to the proposed 
amendments in the June 17 (toxicological agents and directed energy 
weapons) rule related to tooling, production ``equipment,'' test, and 
evaluation ``equipment,'' test models and other articles related to 
directed energy weapons.

General Comments on Items Related to Directed Energy Weapons

    Comment: One commenter noted that the BIS and State Category XIV/
XVIII proposed rules omitted coverage of the Wassenaar Munitions List 
(WAML) items in WAML 19.f (``Laser'' systems ``specially designed'' to 
cause permanent blindness to unenhanced vision).
    Response: The items noted by the commenter are not identified in 
any of the new ``600 series'' ECCNs described in BIS's June 17 
(toxicological agents and directed energy weapons) rule, but they are 
clearly enumerated under USML Category XVIII in State's companion 
proposed rule. Proposed USML Category XVIII(a) identifies directed 
energy weapons (DEW) systems or ``equipment'' that, as their sole or 
primary purpose, cause permanent or flash blindness. These articles are 
identified in the USML Category XVIII amendments contained in State's 
companion rule to this final rule.
    Comment: One commenter indicated that some of the proposed new 
``600 series'' ECCNs in BIS's June 17 (toxicological agents and 
directed energy weapons) rule maintained unilateral controls on certain 
items that were proposed to be transferred to the CCL from the USML 
Category XVIII.
    Response: All the items described in the new ``600 series'' ECCNs 
created by this final rule were previously controlled on the USML under 
the ITAR and were added to these new ECCNs on the CCL only after the 
President determined that these items no longer warrant control on the 
USML for the reasons set forth above.

Changes Made by This Rule to Controls on Certain Tooling, Production 
``Equipment,'' Test and Evaluation ``Equipment'' and Test Models 
Previously Controlled Under USML Category XVIII

    This rule creates three new ``600 series'' ECCNs in CCL Category 6 
(ECCNs 6B619, 6D619 and 6E619) that clarify the EAR controls applicable 
to certain tooling, production ``equipment,'' test and evaluation 
``equipment,'' test models, and related articles for Directed Energy 
Weapons (DEWs) that the President has determined no longer warrant 
control under USML Category XVIII. Terms such as ``part,'' 
``component'' ``accessories,'' ``attachments,'' and ``specially 
designed'' are applied in the same manner in this rule as those terms 
are defined in Section 772.1 of the EAR. In addition, to assist 
exporters in determining the control status of their items, a 
``Specially Designed'' Decision Tool and a CCL Order of Review Decision 
Tool are available on the BIS Web site at: http://www.bis.doc.gov/index.php/decision-tree-tools.

New ECCN 6B619 Test, inspection and production ``equipment,'' and 
related commodities, ``specially designed'' for the ``development,'' 
``production,'' repair, overhaul, or refurbishing of commodities 
enumerated or otherwise described in USML Category XVIII.

    New ECCN 6B619.a controls tooling, templates, jigs, mandrels, 
molds, dies, fixtures, alignment mechanisms, and test ``equipment'' not 
enumerated or otherwise described in USML Category XVIII and not 
elsewhere specified on the USML that are ``specially designed'' for the 
``development,'' ``production,'' repair, overhaul, or refurbishing of 
commodities controlled by USML Category XVIII. The commodities that are 
controlled under new ECCN 6B619.a are used to produce directed energy 
weapons (including non-lethal directed energy weapons, such as active 
denial systems) and are similar to commodities that are in operation in 
a number of other countries, some of which are not allies of the United 
States or members of multinational export control regimes. Research and 
development is currently underway to determine the possible uses of 
such commodities (e.g., to protect the Earth from asteroids, or for 
perimeter security and crowd control). Possession of such commodities 
does not confer a significant military advantage on the United States 
and, therefore, the inclusion of such commodities on the CCL would be 
appropriate.
    Paragraphs .b through .w of ECCN 6B619 are reserved. Paragraph .x 
controls ``parts,'' ``components,'' ``accessories,'' and 
``attachments'' ``specially designed'' for a commodity subject to 
control under paragraph .a of this ECCN and not enumerated or otherwise 
described in USML Category XVIII and not elsewhere specified on the 
USML.

New ECCN 6D619 ``Software'' ``specially designed'' for the 
``development,'' ``production,'' operation or maintenance of 
commodities controlled by 6B619.

    New ECCN 6D619 controls ``software'' ``specially designed'' for the 
``development,'' ``production,'' operation or maintenance of 
commodities controlled by ECCN 6B619. Inclusion of this ``software'' on 
the CCL is appropriate, because it is limited to ``software'' 
``specially designed'' for ECCN 6B619 commodities and does not include 
any ``software'' for items specifically enumerated or otherwise 
described on the USML.

New ECCN 6E619 ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, 
overhaul or refurbishing of commodities controlled by 6B619 or 
``software'' controlled by 6D619.

    New ECCN 6E619 controls ``technology'' ``required'' for the 
``development,'' ``production,'' operation, installation, maintenance, 
repair, overhaul or refurbishing of commodities controlled by ECCN 
6B619, or ``software'' controlled by 6D619. Inclusion of this 
``technology'' on the CCL is appropriate, because it is limited to 
``technology'' ``required'' for ECCN 6B619 commodities and does not 
include any ``technology'' for items specifically enumerated or 
otherwise described on the USML.

Applicable Controls for the New ``600 Series'' ECCNs Created by This 
Rule

    Pursuant to the framework established in the April 16 (initial 
implementation) rule, detection and protection ``equipment'' and 
related commodities classified under ECCN 1A607; related test, 
inspection and production ``equipment'' classified under ECCN 1B607; 
tear gases, riot control agents and related commodities classified 
under ECCN 1C607 (except for items listed in ECCN 1C607.a.10, .a.11, 
.a.12, or a.14, all of which are specifically excluded from WAML 
Category 7 by Note 1 thereto); related ``software'' classified under 
ECCN 1D607 (except ``software'' for items listed in ECCN 1C607.a.10, 
.a.11, .a.12, or a.14); and related ``technology'' classified under 
ECCN 1E607 (except ``technology'' for items listed in ECCN 1C607.a.10, 
.a.11, .a.12, or a.14 and 1D607 ``software'' therefor) are subject to 
the licensing policies that apply to items controlled for national 
security (NS) reasons, as described in Sec.  742.4(b)(1)--specifically, 
NS Column 1 controls. The same level of NS controls and licensing 
policies also apply to the directed energy weapons items that are 
controlled under the three new ECCNs (i.e., test,

[[Page 49524]]

inspection, and production ``equipment'' classified under ECCN 6B619; 
related ``software'' classified under ECCN 6D619; and related 
``technology'' classified under ECCN 6E619) that this rule adds to 
Category 6 of the CCL. In addition, all the items that are controlled 
under the new ECCNs created by this rule are subject to the regional 
stability (RS) licensing policies set forth in Sec.  742.6(a)(1), i.e., 
RS Column 1, as well as antiterrorism (AT Column 1) and United Nations 
(UN) controls.
    Also, in accordance with Sec. Sec.  742.4(b)(1) and 742.6(b)(1) of 
the EAR, exports and reexports of ``600 series'' items controlled for 
NS or RS reasons will be reviewed consistent with United States arms 
embargo policies in Sec.  126.1 of the ITAR, if destined to a country 
listed in Country Group D:5 of Supplement No. 1 to part 740 of the EAR. 
All items controlled for NS or RS reasons, as set forth in this final 
rule, are subject to this licensing policy.

Effects of This Final Rule

    BIS believes that the principal effect of this final rule, when 
considered in the context of similar rules being published as part of 
the ECR, will be to provide greater flexibility for exports and 
reexports to NATO member countries and other multiple-regime-member 
countries of items the President determines no longer warrant control 
on the USML. This greater flexibility is in the form of: the 
application of the EAR's de minimis threshold principle for items 
constituting less than a de minimis amount of controlled U.S.-origin 
content in foreign made items; the availability of license exceptions, 
particularly License Exceptions ``Servicing and Replacement of Parts 
and Equipment'' (RPL) and ``Strategic Trade Authorization'' (STA); the 
elimination of requirements for manufacturing license agreements and 
technical assistance agreements in connection with exports of 
technology; and a reduction in, or the elimination of, exporter and 
manufacturer registration requirements and associated registration 
fees. Some of these specific effects are discussed in more detail, 
below.

De Minimis

    The April 16 (initial implementation) rule imposed certain unique 
de minimis requirements on items controlled under the new ``600 
series'' ECCNs. Section 734.3 of the EAR provides, inter alia, that, 
under certain conditions, items made outside the United States that 
incorporate items subject to the EAR are not subject to the EAR if they 
do not exceed a ``de minimis'' percentage of controlled U.S. origin 
content. Under Section 734.4 of the EAR, as amended by the April 16 
(initial implementation) rule, there is no eligibility for de minimis 
treatment for a foreign-made item that incorporates U.S.-origin ``600 
series'' items when the foreign-made item is destined for a country 
that is subject to a U.S. arms embargo, i.e., a country listed in 
Country Group D:5 of Supplement No. 1 to part 740 of the EAR. Items 
controlled under the new ``600 series'' ECCNs created by this rule are 
eligible for de minimis treatment under the EAR, provided that the 
foreign-made items into which they are incorporated are not destined 
for a country listed in Country Group D:5. In contrast, the AECA does 
not permit the ITAR to have a de minimis treatment for USML-listed 
items, regardless of the significance or insignificance of the U.S.-
origin content or the percentage of U.S.-origin content in the foreign-
made item (i.e., USML-listed items remain subject to the ITAR when they 
are incorporated abroad into a foreign-made item, regardless of either 
of these factors).

Use of License Exceptions

    The April 16 (initial implementation) rule imposed certain 
restrictions on the use of license exceptions for items controlled 
under ``600 series'' ECCNs on the CCL. The general restrictions that 
apply to the use of license exceptions for such items are described in 
Sec.  740.2(a)(13) of the EAR. The EAR provisions that describe the 
requirements specific to individual license exceptions contain 
additional restrictions on the use of license exceptions for such 
items.
    For example, this rule authorizes limited License Exception STA 
availability for the new ``600 series'' ECCNs contained herein. None of 
the items controlled under these new ECCNs are eligible for the STA 
``controls of lesser sensitivity'' described in Sec.  740.20(c)(2) of 
the EAR. Instead, STA eligibility for all such items is limited to the 
destinations listed in Sec.  740.20(c)(1) of the EAR (i.e., Country 
Group A:5 destinations indicated in Supplement No. 1 to part 740 of the 
EAR). In addition, such items must be for: (1) ultimate end-use by a 
person of a type specified in Sec.  740.20(b)(3)(ii) of the EAR (i.e., 
the armed forces, police, paramilitary, law enforcement, customs, 
correctional, fire, or a search and rescue agency of a government of 
one of the countries listed in Country Group A:5 or the United States 
Government); or (2) the ``development,'' ``production,'' operation 
installation, maintenance, repair, overhaul, or refurbishing of an 
item, in one of the countries listed in Country Group A:5 or the United 
States, that will ultimately be used by any such government agencies, 
the United States Government, or by a person in the United States. The 
use of License Exception STA also may be authorized, under certain 
circumstances described in Sec.  740.20(b)(3)(ii)(C), where the U.S. 
Government has otherwise authorized the ultimate end-use under a 
license.
    None of the items controlled under the new ``600 series'' ECCNs 
created by this rule are treated as ``end items'' for purposes of 
License Exception STA and, therefore, such items are not subject to the 
License Exception STA eligibility request requirements in Sec.  
740.20(g) of the EAR.
    Items controlled under new ECCN 1B607 or 6B619 are also eligible 
for License Exception LVS (limited value shipments) up to a value of 
$1,500, TMP (temporary exports), and RPL (servicing and replacement 
parts). License Exceptions TMP and RPL also are available for items 
controlled under new ECCN 1A607. In addition, special provisions in 
License Exception TMP (see Sec.  740.9(a)(11) of the EAR) and License 
Exception BAG (baggage) (see Sec.  740.14(h) of the EAR), as amended by 
this final rule, authorize exports, reexports, or in-country transfers 
of certain protection ``equipment'' described in ECCN 1A607.f.
    BIS believes that the restrictions that apply to the use of license 
exceptions for the items in the new ``600 series'' ECCNs represents an 
overall reduction from the level of restrictions that previously 
applied to such items on the USML. This is particularly true with 
respect to exports of such items to NATO members and multiple-regime 
member countries.

Alignment With the Wassenaar Arrangement Munitions List

    Since the beginning of ECR, the Administration has stated that the 
reforms will be consistent with the United States' obligations to the 
multilateral export control regimes. Accordingly, the Administration 
has, in this final rule, exercised its national discretion to 
implement, clarify, and, to the extent feasible, align its controls 
with those of the regimes. In this rule, new ECCNs 1A607 and 1C607 
implement, to the extent possible, the controls in WAML Category 7; new 
ECCNs 1B607 and 6B619 implement, to the extent possible, the controls 
in WAML Category 18 for production ``equipment;'' new ECCNs 1D607 and 
6D619 implement, to the extent possible, the controls in WAML

[[Page 49525]]

Category 21 for ``software;'' and new ECCNs 1E607 and 6E619 implement, 
to the extent possible, the controls in WAML Category 22 for 
``technology.''

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 (Aug. 11, 2015), has continued the Export 
Administration Regulations in effect under the International Emergency 
Economic Powers Act (50 U.S.C. 1701 et seq.). 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, 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 rule has been designated a ``significant regulatory 
action,'' although not economically significant, under Executive Order 
12866. Accordingly, the rule has been reviewed by the Office of 
Management and Budget (OMB).
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor is any person 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 OMB control number. This final rule affects the following 
approved collections: Simplified Network Application Processing System 
(control number 0694-0088), which includes, among other things, license 
applications; License Exceptions and Exclusions (0694-0137); 
recordkeeping (0694-0096); export clearance (0694-0122); and the 
Automated Export System (0607-0152). The discussion, below, is intended 
to provide a general overview of possible burden changes as a result of 
all the ECR rules published by BIS, and not just this final rule, which 
affects items previously controlled under USML Category XIV or XVIII. 
No changes in burden for any of these collections is anticipated at 
this time, other than as indicated in the discussion, below.
    As stated in the proposed rule published on July 15, 2011 (76 FR 
41958) (the ``July 15 proposed rule''), BIS initially estimated that 
the combined effect of all rules to be published, adding items to the 
EAR that would be removed from the ITAR as part of the Administration's 
Export Control Reform Initiative, would increase the number of license 
applications to be submitted to BIS by approximately 16,000 annually, 
resulting in an increase in burden hours of 5,067 (16,000 transactions 
at 17 minutes each) under control number 0694-0088. As the review of 
the USML has progressed, the interagency group has gained more specific 
information about the number of items that would come under BIS 
jurisdiction and whether those items would be eligible for export under 
license exception. As of June 21, 2012, BIS revised its estimate to 
reflect an increase in license applications of 30,000 annually, 
resulting in an increase in burden hours of 8,500 (30,000 transactions 
at 17 minutes each) under control number 0694-0088. BIS continues to 
believe that its revised estimate is accurate. Notwithstanding this 
increase in license applications under the EAR, the net burden that 
U.S. export controls impose on U.S. exporters is expected to go down, 
as described below, as a result of the transfer of less sensitive 
military items to the jurisdiction of the Department of Commerce, under 
the EAR, and the application of the license exceptions and other 
provisions in the EAR that are described in this final rule.
    As implemented by this rule, certain dissemination, detection and 
protection ``equipment'' and related articles currently controlled 
under USML Category XIV in the ITAR and certain tooling, production 
``equipment,'' test and evaluation ``equipment,'' test models and 
related articles currently controlled under USML Category XVIII of the 
ITAR are now subject to the licensing jurisdiction of the Department of 
Commerce under the EAR and its CCL, and also are eligible for certain 
license exceptions, including License Exception STA. For example, items 
controlled under new ECCN 1A607, 1B607, 1C607, 1D607, 1E607, 6B619, 
6D619, or 6E619 are now eligible under certain provisions of License 
Exception STA and do not need a determination of eligibility as 
described in Sec.  740.20(g) of the EAR. BIS believes that the 
increased use of License Exception STA resulting from the combined 
effect of all rules to be published, adding items to the EAR that would 
be removed from the ITAR as part of the Administration's Export Control 
Reform Initiative, would increase the burden associated with control 
number 0694-0137 by about 23,858 hours (20,450 transactions at 1 hour 
and 10 minutes each).
    BIS expects that this increase in burden hours under the EAR will 
be more than offset by a reduction in the burden hours associated with 
currently approved collections related to the ITAR. With few 
exceptions, most exports of the dissemination, detection and protection 
``equipment'' and related articles and the tooling, production 
``equipment,'' test and evaluation ``equipment,'' test models and 
related articles that this rule adds to the CCL previously required 
State Department authorization, even when destined to NATO member 
states and other close allies. In addition, the exports of 
``technology'' necessary to produce such items in the inventories of 
the United States and its NATO and other close allies previously 
required State Department authorization. Under the EAR, as implemented 
by this rule, such ``technology'' is now eligible for export to NATO 
member states and other close allies under License Exception STA, 
unless otherwise specifically excluded.
    The anticipated reduction in burden hours will particularly impact 
exporters of ``parts'' and ``components'' that are no longer be subject 
to the ITAR, because, with few exceptions, the ITAR exempt from license 
requirements only exports to Canada. Most exports of such ``parts'' and 
``components,'' even when destined to NATO and other close allies, 
previously required State Department authorization. Under the EAR, as 
implemented by this rule, a small number of low-level ``parts'' and 
``components'' do not require a license to most destinations, while 
most other ``parts'' and ``components'' identified under the new ``600 
series'' ECCNs are eligible for export to NATO and other close allies 
under License Exception STA.
    Use of License Exception STA imposes a paperwork and compliance 
burden because, for example, exporters must furnish information about 
the item that is being exported to the consignee and obtain from the 
consignee an acknowledgement and commitment to comply with the 
requirements of the EAR. However, the Administration believes that 
complying with the requirements of STA is likely to be less

[[Page 49526]]

burdensome than applying for licenses. For example, under License 
Exception STA, a single consignee statement can apply to an unlimited 
number of products, need not have an expiration date and need not be 
submitted to the government in advance for approval. Suppliers with 
regular customers can tailor a single statement and assurance to match 
their business relationship, rather than applying repeatedly for 
licenses with every purchase order, to supply allied and, in some 
cases, U.S. forces with routine replacement parts and components.
    Even in situations in which a license is required under the EAR, 
the burden likely will be reduced, compared to the previous license 
requirement under the ITAR. In particular, license applications for 
exports of ``technology'' controlled by ECCN 1E607 or 6E619 are likely 
to be less complex and burdensome than the authorizations required to 
export ITAR-controlled ``technology,'' i.e., Manufacturing License 
Agreements and Technical Assistance Agreements.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under E.O. 13132.
    4. The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 
601 et seq., generally requires an agency to prepare an initial 
regulatory flexibility analysis (IRFA) for any rule subject to the 
notice and comment rulemaking requirements under the Administrative 
Procedure Act (5 U.S.C. 553) or any other statute, unless the agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities. Under section 605(b) of the 
RFA, however, if the head of an agency certifies that a rule will not 
have a significant impact on a substantial number of small entities, 
the RFA does not require the agency to prepare a regulatory flexibility 
analysis. Accordingly, pursuant to section 605(b), the Chief Counsel 
for Regulation, Department of Commerce, has certified to the Chief 
Counsel for Advocacy, Small Business Administration, that this proposed 
rule, if promulgated, will not have a significant impact on a 
substantial number of small entities. The rationale for this 
certification is as follows.

Number of Small Entities

    Although BIS does not collect data on the size of entities that 
apply for, and are issued, export licenses and is, therefore, unable to 
estimate the exact number of small entities--as defined by the Small 
Business Administration's regulations implementing the RFA--BIS 
acknowledges that some small entities may be affected by this proposed 
rule.

Economic Impact

    The amendments set forth in this rule are part of the 
Administration's ECR initiative, which seeks to revise the USML to be a 
positive control list--one that does not use generic, catch-all control 
text to describe items subject to the ITAR--and to move some items that 
the President has determined no longer warrant control under the ITAR 
to control under the EAR and its CCL. Such items, along with certain 
military items currently identified on the CCL (most of which are 
identified on the WAML), will be controlled under new ``600 series'' 
ECCNs on the CCL. In addition, certain other items currently on the CCL 
will move from existing ECCNs to the new ``600 series'' ECCNs.
    This rule addresses certain dissemination, detection and protection 
``equipment'' and related articles previously enumerated or otherwise 
described in USML Category XIV (Toxicological Agents, Including 
Chemical Agents, Biological Agents, and Associated Equipment) and 
certain tooling, production ``equipment,'' test and evaluation 
``equipment,'' test models and related articles previously enumerated 
or otherwise described in USML Category XVIII (Directed Energy 
Weapons). Most toxicological agents (i.e., chemical and biological 
agents) and associated equipment and all Directed Energy Weapons (DEWs) 
systems ``specially designed'' or modified for military applications, 
equipment ``specially designed'' or modified to detect, identify or 
defend against such systems, and ``specially designed'' ``parts,'' 
``components,'' ``accessories'' and ``attachments'' for such systems or 
equipment remain on the USML. However, many other ``parts'' and 
``components'' are now subject to the EAR (as items described in ECCN 
1A607.x, 1B607.x, or 6B619.x), unless specifically enumerated or 
otherwise described on the USML. Many of these ``parts'' and 
``components'' are more likely, than the USML articles described above, 
to be produced by small businesses. In addition, officials of the 
Department of State have informed BIS that license applications for 
such ``parts'' and ``components'' represent a high percentage of the 
license applications for USML articles reviewed by that department. 
Changing the jurisdictional status of certain Category XIV and Category 
XVIII items will reduce the burden on small entities (and other 
entities as well) through: (i) Elimination of some license 
requirements; (ii) greater availability of license exceptions; (iii) 
simpler license application procedures; and (iv) reduced or eliminated 
registration fees.
    Moreover, ``parts'' and ``components'' that are controlled under 
the ITAR remain under ITAR control when incorporated into foreign-made 
items, regardless of the significance or insignificance of the item. 
This discourages foreign buyers from incorporating such U.S. content. 
The availability of de minimis treatment under the EAR, for those items 
that are no longer controlled under the ITAR, may reduce the 
disincentive for foreign manufacturers to purchase U.S.-origin 
``parts'' and ``components,'' a development that potentially would mean 
greater sales for U.S. suppliers, including small entities.
    Many exports and reexports of the Category XIV or Category XVIII 
articles that are added to the CCL by this rule (particularly, the 
``parts'' and ``components'' that are controlled under new ECCN 
1A607.x, 1B607.x, or 6B619.x) are now eligible for license exceptions 
that apply to exports to U.S. Government agencies, exports of ``parts'' 
and ``components'' for use as replacement parts, temporary exports and 
limited value exports (for ECCN 1B607 and 6B619 items, only), as well 
as License Exception STA, thereby reducing the number of licenses that 
exporters will need to obtain for these items. License exceptions under 
the EAR allow suppliers to send routine replacement parts and low level 
parts to NATO and other close allies and export control regime partners 
for use by those governments and for use by contractors building 
equipment for those governments or for the U.S. Government without 
having to obtain export licenses. Under License Exception STA, the 
exporter needs to furnish information about the item being exported to 
the consignee and obtain a statement from the consignee that, among 
other things, will commit the consignee to comply with the EAR and 
other applicable U.S. laws. Because such statements and obligations can 
apply to an unlimited number of transactions and have no expiration 
date, they will result in a net reduction in burden on transactions 
routinely approved by the government through the license application 
process that the License Exception STA statements would replace.
    Even for exports and reexports for which a license will be 
required, the process for obtaining a license is simpler and less 
costly under the EAR. When a USML Category XIV or Category

[[Page 49527]]

XVIII article is moved to the CCL, the number of destinations for which 
a license is required remains unchanged. However, the burden on the 
license applicant decreases because the licensing procedure for CCL 
items is simpler and more flexible than the licensing procedure for 
USML articles.
    Under the USML licensing procedure, an applicant must include a 
purchase order or contract with its application. There is no such 
requirement under the CCL licensing procedure. This difference gives 
the CCL applicant at least two advantages. First, the applicant has a 
way to determine whether the U.S. Government will authorize the 
transaction before it enters into potentially lengthy, complex and 
expensive sales presentations or contract negotiations. Under the USML 
procedure, the applicant must caveat all sales presentations with a 
reference to the need for government approval, and is more likely to 
engage in substantial effort and expense only to find that the 
government will reject the application. Second, a CCL license applicant 
need not limit its application to the quantity or value of one purchase 
order or contract. It may apply for a license to cover all of its 
expected exports or reexports to a specified consignee over the life of 
a license (normally four years, but maybe longer if circumstances 
warrant a longer period), thus reducing the total number of licenses 
for which the applicant must apply.
    In addition, many applicants exporting or reexporting items that 
this rule transfers from the USML to the CCL will realize cost savings 
through the elimination of some or all registration fees assessed under 
the USML's licensing procedure. Currently, USML applicants must pay to 
use the USML licensing procedure even if they never actually are 
authorized to export. Registration fees for manufacturers and exporters 
of articles on the USML start at $2,250 per year, increase to $2,750 
for organizations applying for one to ten licenses per year and further 
increase to $2,750 plus $250 per license application (subject to a 
maximum of three percent of total application value) for those who need 
to apply for more than ten licenses per year. Conversely, there are no 
registration or application processing fees for applications to export 
items listed on the CCL. Entities who applied for licenses from the 
Department of State, for the Category XIV or Category XVIII items 
subject to this rulemaking that are removed from the USML and added to 
the CCL, will find their registration fees reduced if the number of 
USML licenses those entities need declines. If an entity's entire 
product line moves to the CCL, its ITAR registration and registration 
fee requirement will be eliminated.

Conclusion

    BIS expects that the changes to the EAR implemented by this rule 
will have a positive effect on all affected entities, including small 
entities. While BIS acknowledges that this rule may have some cost 
impacts on small (and other) entities, those costs are more than offset 
by the benefits to the entities from the licensing procedures under the 
EAR, which are much less costly and less time consuming than the 
procedures under the ITAR. As noted above, any new burdens created by 
this rule will be offset by a reduction in the number of items that 
will require a license, increased opportunities for use of license 
exceptions for exports to certain countries, simpler export license 
applications, reduced or eliminated registration fees and application 
of a de minimis threshold for foreign-made items incorporating U.S.-
origin parts and components, all of which will reduce the incentive for 
foreign buyers to design out or avoid U.S.-origin content. Accordingly, 
the Chief Counsel for Regulation, Department of Commerce, has certified 
to the Chief Counsel for Advocacy, Small Business Administration, that 
this rule, if implemented, would not have a significant economic impact 
on a substantial number of small entities. Accordingly, an initial 
regulatory flexibility analysis is not required, and none has been 
prepared.

List of Subjects

15 CFR Part 740

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

15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

    For the reasons stated in the preamble, parts 740 and 774 of the 
Export Administration Regulations (15 CFR parts 730-774) are amended as 
follows:

PART 740--[AMENDED]

0
1. 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, 2015, 80 FR 48233 (August 11, 2015).


0
2. Section 740.9 is amended by revising paragraph (a)(11) to read as 
follows:


Sec.  740.9  Temporary imports, exports, reexports, and transfers (in-
country) (TMP).

* * * * *
    (a) * * *
    (11) Personal protective ``equipment'' classified under ECCN 
1A613.c or .d and individual protection ``equipment'' classified under 
ECCN 1A607.f--(i) Temporary exports, reexports, or in-country transfers 
to countries not identified in Country Group D:5. U.S. persons may 
temporarily export or reexport one set of body armor classified under 
ECCN 1A613.d (which may include one helmet classified under ECCN 
1A613.c) or one set of chemical or biological agent protective gear 
classified under ECCN 1A607.f (which may include one additional filter 
canister classified under ECCN 1A607.x) to countries not identified in 
Country Group D:5, provided that:
    (A) The items are with the U.S. person's baggage or effects, 
whether accompanied or unaccompanied (but not mailed); and
    (B) The items are for that U.S. person's exclusive use and not for 
transfer of ownership unless reexported or transferred (in-country) to 
another U.S. person.
    (ii) Temporary exports, reexports, or transfers (in-country) to 
countries identified in Country Group D:5--(A) Iraq. U.S. persons may 
temporarily export or reexport one set of body armor classified under 
ECCN 1A613.d (which may include one helmet classified under ECCN 
1A613.c) or one set of chemical or biological agent protective gear 
classified under ECCN 1A607.f (which may include one additional filter 
canister classified under ECCN 1A607.x) to Iraq, for personal use, 
provided that the requirements in paragraph (a)(11)(i) of this section 
are met. In addition, the U.S. person must be affiliated with the U.S. 
Government and traveling on official business or traveling in support 
of a U.S. Government contract, or the U.S. person must be traveling to 
Iraq under a direct authorization by the Government of Iraq and 
engaging in activities for, on behalf of, or at the request of, the 
Government of Iraq. Documentation regarding direct authorization from 
the Government of Iraq shall include an English translation.
    (B) Other countries in Country Group D:5. U.S. persons may 
temporarily export or reexport one set of body armor classified under 
ECCN 1A613.d (which may include one helmet classified under ECCN 
1A613.c) or one set of chemical or biological agent protective

[[Page 49528]]

gear classified under ECCN 1A607.f (which may include one additional 
filter canister classified under ECCN 1A607.x) to countries in Country 
Group D:5 (except Iraq), for personal use, provided that the 
requirements in paragraph (a)(11)(i) of this section are met, and the 
U.S. person is affiliated with the U.S. Government traveling on 
official business or is traveling in support of a U.S. Government 
contract.
    (iii) Items exported, reexported, or transferred (in-country) under 
this paragraph (a)(11), if not consumed or destroyed in the normal 
course of authorized temporary use abroad, must be returned to the 
United States or other country from which the items were so transferred 
as soon as practicable but no later than four years after the date of 
export, reexport or transfer (in-country).
* * * * *

0
3. Section 740.14 is amended by revising paragraphs (h)(1) and (2) to 
read as follows:


Sec.  740.14  Baggage (BAG).

* * * * *
    (h) Special provisions: personal protective ``equipment'' 
classified under ECCN 1A613.c or .d and individual protection 
``equipment'' classified under ECCN 1A607.f--(1) Exports, reexports, or 
in-country transfers to countries not identified in Country Group D:5. 
U.S. persons may export, reexport, or transfer (in-country) one set of 
body armor classified under ECCN 1A613.d (which may include one helmet 
classified under ECCN 1A613.c) or one set of chemical or biological 
agent protective gear classified under ECCN 1A607.f (which may include 
one additional filter canister classified under ECCN 1A607.x) to 
countries not identified in Country Group D:5, provided that:
    (i) The items are with the U.S. person's baggage or effects, 
whether accompanied or unaccompanied (but not mailed); and
    (ii) The items are for that person's exclusive use and not for 
transfer of ownership unless reexported or transferred (in-country) to 
another U.S. person.
    (2) Exports, reexports, or in-country transfers to countries 
identified in Country Group D:5--(i) Iraq. U.S. persons may export, 
reexport, or transfer (in-country) one set of body armor classified 
under ECCN 1A613.d (which may include one helmet classified under ECCN 
1A613.c) or one set of chemical or biological agent protective gear 
classified under ECCN 1A607.f (which may include one additional filter 
canister classified under ECCN 1A607.x) to Iraq, for personal use, 
provided that the requirements in paragraph (h)(1) of this section are 
met. In addition, the U.S. person must be affiliated with the U.S. 
Government and traveling on official business or traveling in support 
of a U.S. Government contract, or the U.S. person must be traveling to 
Iraq under a direct authorization by the Government of Iraq and 
engaging in activities for, on behalf of, or at the request of, the 
Government of Iraq. Documentation regarding direct authorization from 
the Government of Iraq shall include an English translation.
    (ii) Other countries in Country Group D:5. U.S. persons may export, 
reexport, or transfer (in-country) one set of body armor classified 
under ECCN 1A613.d (which may include one helmet classified under ECCN 
1A613.c) or one set of chemical or biological agent protective gear 
classified under ECCN 1A607.f (which may include one additional filter 
canister classified under ECCN 1A607.x) to countries in Country Group 
D:5 (except Iraq), for personal use, provided that the requirements in 
paragraph (h)(1) of this section are met, and the U.S. person is 
affiliated with the U.S. Government traveling on official business or 
is traveling in support of a U.S. Government contract.
* * * * *

PART 774--[AMENDED]

0
4. The authority citation for part 774 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. 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
5. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Special Materials and Related Equipment, Chemicals, 
``Microorganisms,'' and ``Toxins,'' add ECCN 1A607 between ECCNs 1A290 
and 1A613 to read as follows:

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

* * * * *
1A607 Military dissemination ``equipment'' for riot control agents, 
military detection and protection ``equipment'' for toxicological 
agents (including chemical, biological, and riot control agents), 
and related commodities (see List of Items Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                Control(s)                       No. 1  to Part 738)
 
NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

LVS: N/A
GBS: N/A
CIV: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 1A607.

List of Items Controlled

Related Controls: (1) Vaccines identified in ECCN 1C991 are not 
controlled by this ECCN. (2) See 22 CFR 121.1 (USML), Category 
XIV(h), for vaccines that are subject to the ITAR. (3) Protection 
and detection equipment and related items identified in ECCN 1A004, 
1A995, or 2B351 are not controlled by this ECCN. (4) See 22 CFR 
121.1 (USML), Category XIV(f), for dissemination, detection and 
protection equipment that is subject to the ITAR. (5) See ECCN 0A919 
for ``military commodities'' located and produced outside the United 
States that incorporate more than a de minimis amount of US-origin 
``600 series'' controlled content.
Related Definitions: N/A
Items:

    a. through d. [Reserved]
    e. ``Equipment'' ``specially designed'' for military use and for 
the dissemination of any of the riot control agents controlled in 
ECCN 1C607.a.
    f. Protection ``equipment'' (including air conditioning units, 
protective coatings, and protective clothing):
    f.1. Not controlled by USML Category XIV(f); and
    f.2. ``Specially designed'' for military use and for defense 
against:
    f.2.1. Materials specified by USML Category XIV (a) or (b); or
    f.2.2. Riot control agents controlled in 1C607.a.
    g. Decontamination ``equipment'':
    g.1. Not controlled by USML Category XIV(f); and
    g.2. ``Specially designed'' for military use and for 
decontamination of objects contaminated with materials controlled by 
USML Category XIV(a) or (b).
    h. ``Equipment'':
    h.1. Not controlled by USML Category XIV(f); and
    h.2. ``Specially designed'' for military use and for the 
detection or identification of:
    h.2.1. Materials specified by USML Category XIV(a) or (b); or
    h.2.2. Riot control agents controlled by ECCN 1C607.a.

[[Page 49529]]

    i. [Reserved]
    j. ``Equipment'' ``specially designed'' to:
    j.1. Interface with a detector, shelter, vehicle, vessel, or 
aircraft controlled by the USML or a ``600 series'' ECCN; and
    j.2. Collect and process samples of articles controlled in USML 
Category XIV(a) or (b).
    k. Medical countermeasures that are ``specially designed'' for 
military use (including pre- and post-treatments, antidotes, and 
medical diagnostics) and ``specially designed'' to counter chemical 
agents controlled by the USML Category XIV(a).
    Note: Examples of ``equipment'' controlled by this entry are 
barrier and non-barrier creams and filled autoinjectors (e.g., 
combopens where one injector contains 2-PAM and the other atropine) 
if ``specially designed'' to counter such agents.
    l. through w. [Reserved]
    x. ``Parts,'' ``components,'' ``accessories,'' and 
``attachments'' that are ``specially designed'' for a commodity 
controlled by ECCN 1A607.e, .f, .g, .h, or .j or for a defense 
article controlled by USML Category XIV(f) and that are not 
enumerated or otherwise described elsewhere in the USML.


0
6. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Special Materials and Related Equipment, Chemicals, 
``Microorganisms,'' and ``Toxins,'' add ECCN 1B607 between ECCNs 1B234 
and 1B608 to read as follows:

1B607 Military test, inspection, and production ``equipment'' and 
related commodities ``specially designed'' for the ``development,'' 
``production,'' repair, overhaul, or refurbishing of commodities 
identified in ECCN 1A607 or 1C607, or defense articles enumerated or 
otherwise described in USML Category XIV (see List of Items 
Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                Control(s)                       No. 1  to Part 738)
 
NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

LVS: $1500
GBS: N/A
CIV: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 1B607.

List of Items Controlled

Related Controls: (1) See ECCN 2B350 for controls on certain 
incinerators. (2) See ECCN 0A919 for ``military commodities'' 
located and produced outside the United States that incorporate more 
than a de minimis amount of US-origin ``600 series'' controlled 
content.
Related Definitions: N/A
Items:

    a. ``Equipment'' ``specially designed'' for the destruction of 
the chemical agents controlled by USML Category XIV(a).
    Note to 1B607.a: ECCN 1B607.a includes controls over facilities 
``specially designed'' for destruction operations. This paragraph .a 
does not control incinerators and ``specially designed'' handling 
facilities or ``specially designed'' waste supply systems therefor.
    b. Test facilities and ``equipment'' ``specially designed'' for 
military certification, qualification, or testing of commodities 
controlled by ECCN 1A607.e, .f, .g, .h, or .j or by USML Category 
XIV(f), except for XIV(f)(1).
    c. Tooling and ``equipment'' ``specially designed'' for the 
``development,'' ``production,'' repair, overhaul, or refurbishing 
of commodities controlled by ECCN 1A607.e, .f .g, .h, or .j or USML 
Category XIV(f).
    d. through w. [RESERVED]
    x. ``Parts,'' ``components,'' ``accessories,'' and 
``attachments'' that are ``specially designed'' for a commodity 
controlled by ECCN 1B607.b or .c, or for a defense article 
controlled by USML Category XIV(f), and that are not enumerated or 
otherwise described elsewhere in the USML.


0
7. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Special Materials and Related Equipment, Chemicals, 
``Microorganisms,'' and ``Toxins,'' add a new ECCN 1C607 between ECCNs 
1C395 and 1C608 to read as follows:

1C607 Tear Gases, Riot Control Agents and materials for the 
detection and decontamination of chemical warfare agents (see List 
of Items Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                Control(s)                       No. 1  to Part 738)
 
NS applies to entire entry, except          NS Column 1
 1C607.a.10, .a.11, .a.12, and .a.14.
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

LVS: N/A
GBS: N/A
CIV: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 1C607.

List of Items Controlled

Related Controls: (1) See ECCN 1A984 for controls on other riot 
control agents. (2) See 22 CFR 121.1 (USML), Category XIV(b), for 
modified biological agents and biologically derived substances that 
are subject to the ITAR. (3) See 22 CFR 121.1 (USML), Category 
XIV(g), for ITAR controls on antibodies, recombinant protective 
antigens, polynucleotides, biopolymers or biocatalysts (including 
the expression vectors, viruses, plasmids, or cultures of specific 
cells used to produce them) that are ``specially designed'' for use 
with articles controlled under USML Category XIV(f). (4) See ECCN 
0A919 for ``military commodities'' located and produced outside the 
United States that incorporate more than a de minimis amount of US-
origin ``600 series'' controlled content.
Related Definitions: N/A
Items:

    a. Tear gases and riot control agents including:
    a.1. CA (Bromobenzyl cyanide) (CAS 5798-79-8);
    a.2. CS (o-Chlorobenzylidenemalononitrile or o-
Chlorobenzalmalononitrile) (CAS 2698-41-1);
    a.3. CN (Phenylacyl chloride or w-Chloroacetophenone) (CAS 532-
27-4);
    a.4. CR (Dibenz-(b,f)-1,4-oxazephine) (CAS 257-07-8);
    a.5. Adamsite (Diphenylamine chloroarsine or DM) (CAS 578-94-9);
    a.6. N-Nonanoylmorpholine, (MPA) (CAS 5299-64-9);
    a.7. Dibromodimethyl ether (CAS 4497-29-4);
    a.8. Dichlorodimethyl ether (ClCi) (CAS 542-88-1);
    a.9. Ethyldibromoarsine (CAS 683-43-2);
    a.10. Bromo acetone (CAS 598-31-2);
    a.11. Bromo methylethylketone (CAS 816-40-0);
    a.12. Iodo acetone (CAS 3019-04-3);
    a.13. Phenylcarbylamine chloride (CAS 622-44-6);
    a.14. Ethyl iodoacetate (CAS 623-48-3);
    Note to 1C607.a: ECCN 1C607.a. does not control the following: 
formulations containing 1% or less of CN or CS; individually 
packaged tear gases or riot control agents for personal self-defense 
purposes that are controlled by ECCN 1A984; or active constituent 
chemicals, and combinations thereof, identified and packaged for 
food production or medical purposes.
    b. ``Biopolymers,'' not controlled by USML Category XIV(g) 
``specially designed'' or processed for the detection or 
identification of chemical warfare agents specified by USML Category 
XIV(a), and the cultures of specific cells used to produce them.
    c. ``Biocatalysts,'' and biological systems therefor, not 
controlled by USML Category XIV(g) ``specially designed'' for the 
decontamination or degradation of chemical warfare agents controlled 
in USML Category XIV (a), as follows:

[[Page 49530]]

    c.1. ``Biocatalysts'' ``specially designed'' for the 
decontamination or degradation of chemical warfare agents controlled 
in USML Category XIV(a) resulting from directed laboratory selection 
or genetic manipulation of biological systems;
    c.2. Biological systems containing the genetic information 
specific to the production of ``biocatalysts'' specified by 
1C607.c.1, as follows:
    c.2.a. ``Expression vectors;''
    c.2.b. Viruses; or
    c.2.c. Cultures of cells.
    Note to 1C607.b and .c: The cultures of cells and biological 
systems are exclusive and these sub-items do not apply to cells or 
biological systems for civil purposes, such as agricultural, 
pharmaceutical, medical, veterinary, environmental, waste 
management, or in the food industry.
    d. Chemical mixtures not controlled by USML Category XIV(f) 
``specially designed'' for military use for the decontamination of 
objects contaminated with materials specified by USML Category 
XIV(a) or (b).


0
8. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Special Materials and Related Equipment, Chemicals, 
``Microorganisms,'' and ``Toxins,'' add ECCN 1D607 between ECCNs 1D390 
and 1D608 to read as follows:

1D607 ``Software'' ``specially designed'' for the ``development,'' 
``production,'' operation, or maintenance of items controlled by 
1A607, 1B607 or 1C607 (see List of Items Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                Control(s)                       No. 1  to Part 738)
 
NS applies to entire entry, except          NS Column 1
 ``software'' for 1C607.a.10, .a.11,
 .a.12, and .a.14.
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

CIV: N/A
TSR: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 1D607.

List of Items Controlled

Related Controls: (1) ``Software'' directly related to articles 
enumerated or otherwise described in USML Category XIV is subject to 
the ITAR (see 22 CFR Sec.  121.1, Category XIV(m)). ``Software'' 
controlled by USML Category XIV(m) includes ``software'' directly 
related to any equipment containing reagents, algorithms, 
coefficients, software, libraries, spectral databases, or alarm set 
point levels developed under U.S. Department of Defense contract or 
funding for the detection, identification, warning or monitoring of 
items controlled in paragraphs (a) or (b) of USML Category XIV, or 
for chemical or biological agents specified by U.S. Department of 
Defense funding or contract. (2) See ECCN 0A919 for ``military 
commodities'' located and produced outside the United States that 
incorporate more than a de minimis amount of US-origin ``600 
series'' controlled content.
Related Definitions: N/A
Items:

    a. ``Software'' ``specially designed'' for the ``development,'' 
``production,'' operation, or maintenance of commodities controlled 
by ECCN 1A607, 1B607, or 1C607.
    b. [RESERVED]


0
9. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 1--Special Materials and Related Equipment, Chemicals, 
``Microorganisms,'' and ``Toxins,'' add a new ECCN 1E607 between ECCNs 
1E355 and 1E608 to read as follows:

1E607 ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, 
overhaul, or refurbishing of items controlled by ECCN 1A607, 1B607, 
1C607, or 1D607 (see List of Items Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                Control(s)                       No. 1  to Part 738)
 
NS applies to entire entry, except          NS Column 1
 ``technology'' for 1C607.a.10, .a.11,
 .a.12, and .a.14 and for 1D607
 ``software'' therefor.
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

List Based License Exceptions (See Part 740 for a description of all 
license exceptions)

CIV: N/A
TSR: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 1E607.

List of Items Controlled

Related Controls: Technical data directly related to defense 
articles enumerated or otherwise described in USML Category XIV are 
subject to the ITAR (see 22 CFR Sec.  121.1, Category XIV(m)). 
Technical data controlled by USML Category XIV(m) include technical 
data directly related to any equipment containing reagents, 
algorithms, coefficients, software, libraries, spectral databases, 
or alarm set point levels developed under U.S. Department of Defense 
contract or funding for the detection, identification, warning or 
monitoring of items controlled in paragraphs (a) or (b) of USML 
Category XIV, or for chemical or biological agents specified by U.S. 
Department of Defense funding or contract.
Related Definitions: N/A
Items:

    a. ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, 
overhaul, or refurbishing of items controlled by ECCN 1A607, 1B607, 
1C607 or 1D607.
    Note to 1E607.a: ECCN 1E607.a includes ``technology'' 
``required'' exclusively for the incorporation of ``biocatalysts'' 
controlled by ECCN 1C607.c.1 into military carrier substances or 
military material.
    b. [RESERVED]


0
10. In Supplement No. 1 to Part 774 (the Commerce Control List), 
Category 6--Sensors and Lasers,'' add a new ECCN 6B619 between ECCNs 
6B108 and 6B995 to read as follows:

6B619 Test, inspection, and production ``equipment'' and related 
commodities ``specially designed'' for the ``development,'' 
``production,'' repair, overhaul, or refurbishing of commodities 
enumerated or otherwise described in USML Category XVIII (see List 
of Items Controlled)

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                 Control(s)                      No. 1  to Part 738)
 
NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

License Exceptions

LVS: $1500
GBS: N/A
CIV: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 6B619.

List of Items Controlled

Related Controls: ``Parts,'' ``components,'' ``accessories,'' 
``attachments,'' and associated systems or ``equipment'' ``specially 
designed'' for defense articles enumerated or otherwise described in 
paragraphs (a) or (b) of USML Category XVIII are subject to the ITAR 
(see 22 CFR 121.1, Category XVIII(e)).

[[Page 49531]]

Related Definitions: N/A
Items:

    a. Tooling, templates, jigs, mandrels, molds, dies, fixtures, 
alignment mechanisms, and test ``equipment'' not enumerated or 
otherwise described in USML Category XVIII and not elsewhere 
specified on the USML that are ``specially designed'' for the 
``development,'' ``production,'' repair, overhaul, or refurbishing 
of commodities controlled by USML Category XVIII.
    b. through w. [Reserved]
    x. ``Parts,'' ``components,'' ``accessories,'' and 
``attachments'' ``specially designed'' for a commodity subject to 
control under paragraph .a of this ECCN and not enumerated or 
otherwise described in USML Category XVIII and not elsewhere 
specified on the USML.


0
11. In Supplement No. 1 to Part 774 (the Commerce Control List), 
Category 6--Sensors and Lasers,'' add a new ECCN 6D619 between ECCNs 
6D201 and 6D991 to read as follows:

 6D619 ``Software'' ``specially designed'' for the ``development,'' 
``production,'' operation or maintenance of commodities controlled 
by 6B619.

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                Control(s)                       No. 1  to Part 738)
 
NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

License Exceptions

CIV: N/A
TSR: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 6D619.

List of Items Controlled

Related Controls: ``Software'' directly related to articles 
enumerated or otherwise described in USML Category XVIII is subject 
to the ITAR (See 22 CFR 121.1, Category XVIII(f)).
Related Definitions: N/A
Items:

    The list of items controlled is contained in the ECCN heading.


0
12. In Supplement No. 1 to Part 774 (the Commerce Control List), 
Category 6--Sensors and Lasers,'' add ECCN 6E619 between ECCNs 6E202 
and 6E990 to read as follows:

 6E619 ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, 
overhaul or refurbishing of commodities controlled by 6B619 or 
``software'' controlled by 6D619.

License Requirements

Reason for Control: NS, RS, AT, UN

 
                                              Country chart  (see Supp.
                 Control(s)                      No. 1  to Part 738)
 
NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls
 

License Exceptions

CIV: N/A
TSR: N/A

Special Conditions for STA

STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 6E619.

List of Items Controlled

Related Controls: Technical data directly related to articles 
enumerated or otherwise described in USML Category XVIII are subject 
to the ITAR (See 22 CFR 121.1, Category XVIII(f)).
Related Definitions: N/A
Items:

    The list of items controlled is contained in the ECCN heading.

Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2016-17506 Filed 7-27-16; 8:45 am]
 BILLING CODE 3510-33-P



                                                                                                                                                                                            49517

                                           Rules and Regulations                                                                                          Federal Register
                                                                                                                                                          Vol. 81, No. 145

                                                                                                                                                          Thursday, July 28, 2016



                                           This section of the FEDERAL REGISTER                       This final rule is one in a series of               Control Reform (ECR) Initiative, the
                                           contains regulatory documents having general             rules describing how various types of                 object of which is to protect and
                                           applicability and legal effect, most of which            articles that the President has                       enhance U.S. national security interests.
                                           are keyed to and codified in the Code of                 determined no longer warrant control                  The implementation of the ECR
                                           Federal Regulations, which is published under            on the USML, as part of the                           initiative includes amendment of the
                                           50 titles pursuant to 44 U.S.C. 1510.
                                                                                                    Administration’s Export Control Reform                International Traffic in Arms
                                           The Code of Federal Regulations is sold by               Initiative, are controlled on the CCL in              Regulations (ITAR) and its U.S.
                                           the Superintendent of Documents. Prices of               accordance with the requirements of the               Munitions List (USML), so that they
                                           new books are listed in the first FEDERAL                Export Administration Regulations                     control only those items that provide
                                           REGISTER issue of each week.                             (EAR).                                                the United States with a critical military
                                                                                                      This final rule is being published by               or intelligence advantage or otherwise
                                                                                                    BIS in conjunction with a final rule                  warrant such controls, and amendment
                                           DEPARTMENT OF COMMERCE                                   from the Department of State,                         of the Export Administration
                                                                                                    Directorate of Defense Trade Controls,                Regulations (EAR) to control military
                                           Bureau of Industry and Security                          which amends the list of articles                     items that do not warrant USML
                                                                                                    controlled by USML Categories XIV and                 controls. This series of amendments to
                                           15 CFR Parts 740 and 774                                 XVIII. The citations in this BIS rule to              the ITAR and the EAR will reform the
                                                                                                    USML Categories XIV and XVIII reflect                 U.S. export control system to enhance
                                           [Docket No. 120105019–5755–01]                           the amendments contained in the                       our national security by: (i) Improving
                                                                                                    Department of State’s rule. The                       the interoperability of U.S. military
                                           RIN 0694–AF52                                            revisions made by BIS in this rule are                forces with allied countries; (ii)
                                                                                                    part of Commerce’s retrospective                      strengthening the U.S. industrial base
                                           Commerce Control List: Addition of                       regulatory review plan under Executive                by, among other things, reducing
                                           Items Determined To No Longer                            Order 13563 completed in August 2011.                 incentives for foreign manufacturers to
                                           Warrant Control Under United States
                                                                                                    DATES: This rule is effective December                design out and avoid U.S.-origin content
                                           Munitions List Category XIV
                                                                                                    31, 2016.                                             and services; and (iii) allowing export
                                           (Toxicological Agents) or Category
                                                                                                    ADDRESSES: The Department of                          control officials to focus government
                                           XVIII (Directed Energy Weapons)
                                                                                                    Commerce’s full retrospective regulatory              resources on transactions that pose
                                           AGENCY:  Bureau of Industry and                          review plan can be accessed at: http://               greater national security, foreign policy,
                                           Security, Department of Commerce.                        open.commerce.gov/news/2011/08/23/                    or proliferation concerns than those
                                           ACTION: Final rule.                                      commerce-plan-retrospective-analysis-                 involving our NATO allies and other
                                                                                                    existing-rules.                                       multi-regime partners.
                                           SUMMARY:   This final rule implements                    FOR FURTHER INFORMATION CONTACT: For                     Following the structure set forth in
                                           changes described in a proposed rule                     questions regarding dissemination,                    the final rule titled ‘‘Revisions to the
                                           that the Bureau of Industry and Security                 detection and protection ‘‘equipment’’                Export Administration Regulations:
                                           (BIS) published on June 17, 2015.                        and related items that are controlled                 Initial Implementation of Export Control
                                           Specifically, this final rule describes                  under new ECCNs 1A607, 1B607,                         Reform’’ (78 FR 22660, April 16, 2013)
                                           how articles the President has                           1C607, 1D607, and 1E607, contact                      (hereinafter the ‘‘April 16 (initial
                                           determined no longer warrant control                     Richard P. Duncan, Ph.D., Director,                   implementation) rule’’), this final rule
                                           under Category XIV (Toxicological                        Chemical and Biological Controls                      describes BIS’s implementation of
                                           Agents, Including Chemical Agents,                       Division, Office of Nonproliferation and              controls, under the EAR’s CCL, on
                                           Biological Agents, and Associated                        Treaty Compliance, Bureau of Industry                 certain dissemination, detection and
                                           Equipment) or Category XVIII (Directed                   and Security, telephone: (202) 482–                   protection ‘‘equipment’’ and related
                                           Energy Weapons) of the United States                     3343, email: Richard.Duncan@                          articles previously controlled under
                                           Munitions List (USML) are now                            bis.doc.gov.                                          USML Category XIV in the ITAR and
                                           controlled under the Commerce Control                      For questions regarding tooling,                    certain tooling, production
                                           List (CCL). The affected Category XIV                    production ‘‘equipment,’’ test and                    ‘‘equipment,’’ test and evaluation
                                           articles consist primarily of                            evaluation ‘‘equipment,’’ test models,                ‘‘equipment,’’ test models and related
                                           dissemination, detection, and protection                 and related items that are controlled                 articles previously controlled under
                                           ‘‘equipment’’ and related articles, such                 under new ECCNs 6B619, 6D619 and                      USML Category XVIII of the ITAR.
                                           as production and test ‘‘equipment,’’                    6E619, contact Mark Jaso, Sensors and                    In the April 16 (initial
                                           and are controlled under new Export                      Aviation Division, Office of National                 implementation) rule, BIS created a
                                           Control Classification Numbers (ECCNs)                   Security & Technology Transfer                        series of new ECCNs to control items
                                           1A607, 1B607, 1C607, 1D607, and                          Controls, Bureau of Industry and                      that would be removed from the USML
                                           1E607, as added to the CCL by this final                 Security, telephone: (202) 482–0987,                  and similar items from the Wassenaar
                                           rule. The affected Category XVIII articles               email: Mark.Jaso@bis.doc.gov.                         Arrangement on Export Controls for
Lhorne on DSK30JT082PROD with RULES




                                           consist primarily of tooling, production                 SUPPLEMENTARY INFORMATION:                            Conventional Arms and Dual Use Goods
                                           ‘‘equipment,’’ test and evaluation                                                                             and Technologies Munitions List
                                           ‘‘equipment,’’ test models, and related                  Background                                            (Wassenaar Arrangement Munitions List
                                           articles and are controlled under new                      This final rule is published by the                 or WAML) that were already controlled
                                           ECCNs 6B619, 6D619 and 6E619, as                         Bureau of Industry and Security (BIS) as              elsewhere on the CCL. That final rule
                                           added to the CCL by this final rule.                     part of the Administration’s Export                   referred to this series of new ECCNs as


                                      VerDate Sep<11>2014   14:41 Jul 27, 2016   Jkt 238001   PO 00000   Frm 00001   Fmt 4700   Sfmt 4700   E:\FR\FM\28JYR1.SGM   28JYR1


                                           49518              Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations

                                           the ‘‘600 series,’’ because the third                    export, temporary import, or brokering                ECCN 1A607 (Military Dissemination,
                                           character in each of these new ECCNs is                  pursuant to the ITAR, and not to the list             Detection, and Protection ‘‘Equipment’’)
                                           the number ‘‘6.’’ The first two characters               of defense articles on the United States                Comment: One commenter noted that
                                           of the ‘‘600 series’’ ECCNs serve the                    Munitions Import List (USMIL) that are                tear gas and riot control agents were
                                           same function as any other ECCN as                       controlled by the Bureau of Alcohol,                  dropped from proposed USML Category
                                           described in § 738.2 of the EAR. The                     Tobacco, Firearms and Explosives (ATF)                XIV(d), but did not appear in proposed
                                           first character is a number, within the                  for purposes of permanent import under                ECCN 1A607.
                                           range of 0 through 9, that identifies the                its regulations at 27 CFR part 447.                     Response: The tear gas and riot
                                           Category on the CCL in which the ECCN                    Pursuant to section 38(a)(1) of the                   control agents removed from USML
                                           is located. The second character is a                    AECA, all defense articles controlled for             Category XIV(d) are now controlled
                                           letter, within the range of A through E,                 export or import, or that are subject to              under ECCN 1C607.a.1 through a.6, as
                                           that identifies the product group in a                   brokering controls, are part of the                   they were proposed to be controlled in
                                           CCL Category. As indicated above, the                    ‘‘USML’’ under the AECA. For the sake                 BIS’s June 17 (toxicological agents and
                                           third character in the ‘‘600 series’’                    of clarity, references to the USMIL are               directed energy weapons) rule.
                                           ECCNs is the number ‘‘6,’’ which                         to the list of defense articles controlled            Therefore, no further action is required.
                                           distinguishes the items controlled under                 by ATF for purposes of permanent
                                           this series of ECCNs from items                          import. All defense articles described in             ECCN 1A607.f     (Protection
                                           identified under other ECCNs on the                      the USMIL or the USML are subject to                  ‘‘Equipment’’)
                                           CCL. With few exceptions, the final two                  the brokering controls administered by                  Comment: One commenter noted that
                                           characters identify the WAML category                                                                          proposed ECCN 1A607.f included
                                                                                                    the U.S. Department of State in part 129
                                           that covers items that are the same or                                                                         protection ‘‘equipment,’’ but did not
                                                                                                    of the ITAR. The transfer of defense
                                           similar to items in a particular ‘‘600                                                                         specifically indicate that it controlled
                                                                                                    articles from the ITAR’s USML to the
                                           series’’ ECCN.                                                                                                 Chemical Agent Resistant Coatings
                                              Pursuant to section 38(f) of the Arms                 EAR’s CCL, for purposes of export
                                                                                                    controls, does not affect the list of                 (CARC). The commenter recommended
                                           Export Control Act (AECA), the
                                                                                                    defense articles that are controlled on               that CARC be specifically identified in
                                           President is obligated to review the
                                                                                                    the USMIL under the AECA for                          ECCN 1A607.f or that the word
                                           USML ‘‘to determine what items, if any,
                                                                                                    purposes of permanent import.                         ‘‘material’’ be added so that companies
                                           no longer warrant export controls
                                           under’’ the AECA. The President must                                                                           would be more likely to interpret ECCN
                                                                                                       On January 18, 2011, the President
                                           report the results of the review to                                                                            1A607.f to include coatings, such as
                                                                                                    issued Executive Order 13563, affirming
                                           Congress and wait 30 days before                                                                               CARC. In addition, the commenter
                                                                                                    general principles of regulation and
                                           removing any such items from the                                                                               recommended that the export controls
                                                                                                    directing government agencies to
                                           USML. The report must ‘‘describe the                                                                           on CARC be changed to align more
                                                                                                    conduct retrospective reviews of
                                           nature of any controls to be imposed on                                                                        closely with export controls maintained
                                                                                                    existing regulations. The revisions made
                                           that item under any other provision of                                                                         by U.S. allies, who do not require an
                                                                                                    by this rule are part of Commerce’s
                                           law.’’ 22 U.S.C. 2778(f)(1).                                                                                   export license for CARC to most
                                                                                                    retrospective regulatory review plan
                                              The changes made by this final rule                                                                         destinations. Specifically, the
                                                                                                    under Executive Order 13563.
                                           and in the State Department’s                                                                                  commenter felt that companies familiar
                                                                                                    Commerce’s full plan, completed in
                                           companion rule to Categories XIV and                                                                           with the European Union military list
                                                                                                    August 2011, can be accessed at: http://              could become confused, because the
                                           XVIII of the USML are based on a                         open.commerce.gov/news/2011/08/23/
                                           review of these USML Categories by the                                                                         controls in ECCN 1A607.f are similar to
                                                                                                    commerce-plan-retrospective-analysis-                 those described in ML.7.f, which does
                                           Defense Department, which worked                         existing-rules.
                                           with the Departments of State and                                                                              not control CARC. In the event that
                                           Commerce in preparing these                                 This final rule implements                         CARC continues to require a license to
                                           amendments. Other agencies with                          amendments to the EAR proposed in                     most destinations, the commenter
                                           expertise and equities in the items at                   BIS’s rule titled ‘‘Commerce Control                  recommended that all CARC be placed
                                           issue in these rules were consulted as                   List: Addition of Items Determined to                 under the export licensing jurisdiction
                                           well. The review focused on identifying                  No Longer Warrant Control under                       of a single U.S. Government agency to
                                           those types of articles that provide the                 United States Munitions List Category                 simplify jurisdictional and/or
                                           United States with a critical military or                XIV (Toxicological Agents) or Category                classification determinations.
                                           intelligence capability and that are not                 XVIII (Directed Energy Weapons),’’                      Response: ECCN 1A607.f indicates
                                           currently in normal commercial use.                      which was published in the Federal                    that it controls protection ‘‘equipment’’
                                           Such items remain on the USML. Other                     Register on June 17, 2015 (RIN 0694–                  not controlled by USML Category XIV(f)
                                           items with less than a critical military                 AF52) (80 FR 34562) (herein ‘‘the June                that is ‘‘specially designed’’ for military
                                           or intelligence capability not in normal                 17 (toxicological agents and directed                 use and for defense against materials
                                           commercial use will transition to the                    energy weapons) rule’’).                              specified by USML XIV(a) or (b) or riot
                                           ‘‘600 series’’ controls. It is the intent of                                                                   control agents controlled by ECCN
                                                                                                    Dissemination, Detection and                          1C607.a. BIS believes that this control
                                           the agencies that USML Categories XIV
                                                                                                    Protection ‘‘Equipment’’ and Related                  language, as revised in this final rule to
                                           and XVIII, and the corresponding ‘‘600
                                                                                                    Items                                                 specify ‘‘protective coatings’’ (as well as
                                           series’’ ECCNs on the CCL, not control
                                           items in normal commercial use. Such                     Public Comments and BIS Responses                     air conditioning units and protective
                                           items should be controlled under                                                                               clothing), is now sufficiently clear as to
                                           existing dual-use controls on the CCL,                      BIS received comments from eight                   leave no doubt that it applies to
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                                           consistent with the Wassenaar                            parties in response to the proposed                   paintings/coatings such as CARC.
                                           Arrangement List of Dual-Use Goods                       amendments in the June 17                             Consequently, the control language used
                                           and Technologies.                                        (toxicological agents and directed                    in the June 17 (toxicological agents and
                                              All references to the USML in this                    energy weapons) rule that addressed                   directed energy weapons) rule has been
                                           rule are to the list of defense articles                 dissemination, detection and protection               retained in this final rule with only the
                                           that are controlled for purposes of                      ‘‘equipment’’ and related items.                      above-referenced change (i.e., the


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                                                              Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations                                        49519

                                           revision of the parenthetical phrase in                  in accordance with Section 740.14(h) of               in the transfer to the CCL of items that
                                           the introductory text of ECCN 1A607.f                    the EAR.                                              are inherently military, provide the
                                           to read, as follows: ‘‘including air                        Response: USML Category XIV(f)(4),                 United States with a critical military or
                                           conditioning units, protective coatings,                 as set forth in the State Department’s                intelligence advantage, or otherwise
                                           and protective clothing.’’                               companion rule to this final rule,                    warrant control on the USML).
                                              As for the scope of the license                       controls equipment or items that offer                  With respect to the commenter’s
                                           requirements that apply to CARC, all                     individual or collective protection                   recommendation that all individual
                                           items in ECCN 1A607, including CARC,                     against items specified in USML                       protection ‘‘equipment’’ and clothing
                                           are subject to NS Column 1 and RS                        Category XIV(a) or (b), as follows: (1)               controlled under new ECCN 1A607.f
                                           Column 1 license requirements, which                     M53 Chemical Biological Protective                    should be authorized for export under
                                           apply to all destinations, except Canada.                Mask or M50 Joint Service General                     License Exception BAG (under special
                                           While the scope of the EAR license                       Purpose Mask (JSGPM); (2) filter                      provisions similar to those currently
                                           requirements on CARC is considerably                     cartridges containing sorbents                        applicable to ‘‘personal protective
                                           broader than that maintained by some of                  controlled in USML Category                           equipment’’), this final rule amends the
                                           our allies, exports of CARC are                          XIV(f)(4)(iii); (3) ASZM–TEDA carbon;                 License Exception BAG provisions in
                                           authorized without a license, under                      and (4) ensembles, garments, suits,                   Section 740.14(h) of the EAR to
                                           License Exception STA, for destinations                  jackets, pants, boots or socks for                    authorize exports, reexports, or in-
                                           in, or nationals of, Country Group A:5                   individual protection, and liners for                 country transfers of chemical or
                                           in Supplement No. 1 to part 740 of the                   collective protection, that allow no more             biological agent protective gear
                                           EAR, which currently contains 36                         than 1% breakthrough of GD, or no                     consistent with the requirements and
                                           countries. Furthermore, the EAR                          more than 2% breakthrough of any other                restrictions described therein. In a
                                           requirements that apply to the CARC                      chemical specified in USML Category                   corresponding change, this final rule
                                           that were previously controlled under                    XIV(a), when evaluated by executing the               also amends the License Exception TMP
                                           USML Category XIV and are now                            applicable method(s) of testing                       provisions in Section 740.9(a)(11) of the
                                           controlled under new ECCN 1A607.f                        described in the current version of Test              EAR to authorize temporary exports,
                                           represent a significant easing of the                    Operations Procedure (TOP) 08–2–201                   reexports, or in-country transfers of
                                           regulatory burden on exporters of such                   (Collective Protection Novel Closures                 chemical or biological agent protective
                                           CARC through: (i) Elimination of some                    Testing) or 08–2–501 (Permeation                      gear consistent with the requirements
                                           license requirements; (ii) greater                       Testing of Materials with Chemical                    and restrictions described therein.
                                           availability of license exceptions; (iii)                Agents or Simulants—Swatch Testing)                   These changes are also intended to
                                           simpler license application procedures;                  and using the defined DoD-specific                    make the scope of these license
                                           and (iv) reduced or eliminated                           requirements described therein.                       exceptions, as they apply to chemical or
                                           registration fees. With respect to the                      The control criteria in USML Category              biological agent protective gear
                                           commenter’s recommendation that all                      XIV(f)(4), as described above, are the                controlled under new ECCN 1A607.f,
                                           CARC be placed under the export                          result of a review of USML Category                   conform with the scope of the ITAR
                                           licensing jurisdiction of a single U.S.                  XIV, as part of the Administration’s                  exemption for personal protective
                                           Government agency, BIS notes that the                    Export Control Reform (ECR) Initiative,               equipment in Section 123.17 of the
                                           only CARC that continue to be                            to ensure that it controls only those                 ITAR.
                                           controlled under USML Category XIV                       items that are inherently military,                     Comment: One commenter noted that
                                           (specifically, in paragraph (f)(7) of                    provide the United States with a critical             neither BIS’s June 17 (toxicological
                                           USML Category XIV) are those that have                   military or intelligence advantage, or                agents and directed energy weapons)
                                           been qualified to one of the following                   otherwise warrant control on the USML.                rule nor State’s companion proposed
                                           four military specifications: MIL–PRF–                   In the absence of any compelling                      rule clearly indicated whether filter
                                           32348, MIL–DTL–64159, MIL–C–46168,                       evidence contrary to the results of this              cartridges containing sorbents funded
                                           or MIL–DTL–53039. In light of the                        review, no change is contemplated, with               by the Department of Defense via
                                           anticipated benefits of moving certain                   respect to these USML Category XIV                    contract or other funding authorization,
                                           CARC from USML Category XIV to new                       criteria, at this time. New ECCN 1A607.f              as proposed to be controlled under
                                           ECCN 1A607 on the EAR’s CCL, as                          controls ‘‘equipment’’ previously                     USML Category XIV(n), would be
                                           described above, there would appear to                   controlled under USML Category                        controlled under new ECCN 1A607.f on
                                           be little practical upside to continuing                 XIV(f)(4) or (f)(5) that the President has            the CCL or under USML Category XIV(f)
                                           to control all CARC under the export                     determined no longer warrants control                 or (n). In addition, the commenter noted
                                           licensing jurisdiction of a single U.S.                  on the USML (i.e., protection                         that neither of these proposed rules
                                           Government agency.                                       ‘‘equipment,’’ including ‘‘equipment’’                clearly indicated whether filter
                                              Comment: One commenter                                for individual protection, not controlled             cartridges that meet the requirements of
                                           recommended that all items identified                    by USML Category XIV(f) that is                       specifications PRF–EA–2251 for the
                                           in USML Category XIV(f)(4) for                           ‘‘specially designed’’ for military use               M61 filter cartridge, but do not contain
                                           individual protection against chemical                   and for defense against materials                     ASZM–TEDA carbon, would be
                                           and biological agents specified in USML                  specified by USML XIV(a) or (b) or riot               controlled under new ECCN 1A605.f or
                                           Category XIV(a) or (b) should be                         control agents controlled by ECCN                     under USML Category XIV(f) or (n).
                                           controlled under new ECCN 1A607.f on                     1C607.a). This final rule does not                      Response: Neither of the observations
                                           the CCL. In addition, the commenter                      expand the scope of new ECCN 1A607.f                  made by the commenter requires any
                                           recommended that all individual                          to control all ‘‘equipment’’ for                      modification to new ECCN 1A607.f.
                                           protection ‘‘equipment’’ and clothing                    individual protection against chemical                Filter cartridges containing
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                                           controlled under new ECCN 1A607.f                        and biological agents specified in USML               developmental sorbents are controlled
                                           should be authorized for export under                    Category XIV(a) or (b), because this                  under USML Category XIV(f)(4)(ii) if the
                                           License Exception BAG under special                      change would be contrary to the                       sorbents were funded by the Department
                                           provisions similar to those currently                    President’s determination, based on the               of Defense via contract or other funding
                                           applicable to ‘‘personal protective                      results of the aforementioned review of               authorization, as specified in USML
                                           equipment’’ (i.e., ECCN 1A613.c or .d)                   USML Category XIV (i.e., it would result              Category XIV(n), and none of the


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                                           49520              Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations

                                           elements in Note 1 to paragraph (n)                      designed’’ for military use for the                      Response: The commenter is correct
                                           apply (i.e., the sorbents are determined                 detection of agents identified in                     in noting that ‘‘equipment’’ in new
                                           to be subject to the EAR via a                           proposed USML Category XIV(a) or (b),                 ECCN 1A607.k and related
                                           commodity jurisdiction determination                     except for: (1) Detection equipment that              ‘‘technology’’ in new ECCN 1E607.a are
                                           or they are identified in the relevant                   is classified or that relates to classified           not eligible for export under the License
                                           Department of Defense contract or other                  information; and (2) military detection               Exception GOV provisions in Section
                                           funding authorization as being                           equipment developed under a DoD                       740.11(d) of the EAR, except to
                                           developed for both civil and military                    contract or other funding authorization,              destinations located in Country Group
                                           applications). The commenter’s                           as described in proposed USML                         A:5. This restriction, which is described
                                           question concerning the export                           Category XIV(f)(2) and subject to the                 in Section 740.11(d)(2)(iii) of the EAR,
                                           licensing jurisdiction status of filter                  restriction in Note 3 thereto, which                  was implemented as part of BIS’s April
                                           cartridges reflects the fact that State’s                indicated that the controls in paragraph              16 (initial implementation) rule in
                                           companion Category XIV/XVIII                             (f)(2) would apply only to controls dated             which the License Exception GOV
                                           proposed rule did not specifically                       one year (or later) after the date of                 provisions in Section 740.11 of the EAR
                                           enumerate (in Category XIV) filter                       publication of State’s USML Category                  were revised. Among the License
                                           cartridges containing sorbents                           XIV final rule. Note 3 to paragraph (f)(2)            Exception GOV provisions that were
                                           controlled under USML Category                           was mistakenly included in USML                       affected by these revisions were those
                                           XIV(n). USML Category XIV(f)(ii), in                     Category XIV, as described in State’s                 authorizing exports and reexports to the
                                           State’s proposed rule, specified that it                 proposed rule; consequently, it does not              Organization for the Prohibition of
                                           controlled filter cartridges containing                  appear in State’s final rule.                         Chemical Weapons (OPCW) and exports
                                           sorbents controlled under USML                              Response: New ECCN 1A607.h
                                                                                                                                                          and reexports by the OPCW for official
                                           Category XIV(f)(iii), but the control                    controls ‘‘equipment’’ not controlled by
                                                                                                                                                          international inspection and verification
                                           status of filter cartridges containing                   USML Category XIV(f) that is ‘‘specially
                                                                                                                                                          use under the terms of the CWC. Under
                                           sorbents enumerated in proposed USML                     designed’’ for military use and for the
                                                                                                                                                          the OPCW authorization, as revised,
                                           Category XIV(n) was not specifically                     detection or identification of materials
                                                                                                                                                          Section 740.11(d)(2)(iii) of the EAR
                                           indicated. Consequently, State’s                         specified by USML Category XIV(a) or
                                                                                                                                                          prohibits exports and reexports of items
                                           companion Category XIV/XVIII final                       (b) or riot control agents controlled by
                                                                                                                                                          controlled under ‘‘600 series’’ ECCNs on
                                           rule corrects this oversight by clarifying               ECCN 1C607.a on the CCL. Because new
                                                                                                                                                          the CCL to countries not listed in
                                           USML Category XIV to indicate that it                    ECCN 1A607.h indicates that it does not
                                                                                                    include any detection equipment that is               Country Group A:5. Country Group A:5
                                           applies to filter cartridges that contain
                                                                                                    controlled by USML Category XIV(f), the               currently consists of 36 countries, as
                                           any of the sorbents specified under
                                                                                                    scope of the ECCN is necessarily                      established by BIS’s April 16 (initial
                                           USML Category XIV(f)(iii) or (n) and, in
                                                                                                    dependent upon the scope of Category                  implementation) rule, which became
                                           so doing, eliminates the possibility that
                                                                                                    XIV(f), which, in turn, is subject to                 effective on October 15, 2013. The scope
                                           such filter cartridges could be controlled
                                                                                                    interpretation by the U.S. Department of              of the OPCW authorization in License
                                           under new ECCN 1A607.f on the CCL
                                                                                                    State. Therefore, the Department of                   Exception GOV was the result of
                                           (except to the limited extent that
                                           sorbents funded by the Department of                     State, and not BIS, is the appropriate                extensive U.S. Government interagency
                                           Defense via contract or other funding                    U.S. Government agency to confirm                     review and discussion. Furthermore, the
                                           authorization are excluded from USML                     whether the commenter’s statement is                  scope of eligible countries for the OPCW
                                           Category XIV(n) for a specified period of                correct (in whole or in part), as it                  authorization (i.e., 36 countries), as
                                           time, as indicated in Note 3 thereto).                   applies to the scope of new ECCN                      established by BIS’s April 16 (initial
                                              In response to the commenter’s                        1A607.h and the ‘‘equipment’’                         implementation) rule, was initially
                                           request for clarification concerning                     previously controlled under USML                      broader than the country scope that was
                                           controls on filter cartridges that meet                  Category XIV(f)(2). Consequently, this                authorized under the License Exception
                                           the requirements of specifications PRF–                  question should be addressed, with                    GOV provisions for cooperating
                                           EA–2251 for the M61 filter cartridge, but                respect to specific detection                         governments, as described in Section
                                           do not contain ASZM–TEDA carbon,                         ‘‘equipment,’’ through the submission of              740.11(c) of the EAR, which then
                                           their control status also would depend                   one or more commodity jurisdiction (CJ)               authorized exports and reexports to 27
                                           upon the sorbents that they contain. As                  requests to the State Department’s                    cooperating governments and agencies
                                           indicated above, filter cartridges that                  Directorate of Defense Trade Controls                 of the North Atlantic Treaty
                                           contain any of the sorbents controlled                   (DDTC), consistent with the                           Organization (NATO). The country
                                           by USML Category XIV (i.e., sorbents                     requirements in the ITAR.                             scope of the cooperating governments
                                           specified under paragraph (f)(iii) or (n)                                                                      authorization under License Exception
                                                                                                    ECCN 1A607.k (Medical                                 GOV was subsequently expanded, by
                                           of Category XIV) are controlled under
                                                                                                    Countermeasures)                                      BIS’s Wassenaar Arrangement (WA)
                                           USML Category XIV. Otherwise, they
                                           are controlled under new ECCN                               Comment: One commenter noted that                  2014 Plenary final rule (98 FR 29432,
                                           1A607.f.                                                 items controlled under proposed new                   May 21, 2015), to include 41
                                                                                                    ECCN 1A607.k (military medical                        cooperating governments and agencies
                                           ECCN 1A607.h (Detection/                                 countermeasures ‘‘equipment’’), and                   of NATO. Currently, the country scope
                                           Identification ‘‘Equipment’’)                            related ‘‘technology’’ controlled under               of the cooperating governments and
                                              Comment: One commenter                                proposed new ECCN 1E607.a, would not                  OPCW authorizations under License
                                           interpreted BIS’s June 17 (toxicological                 be eligible for export/reexport under the             Exception GOV are roughly equivalent
                                           agents and directed energy weapons)                      License Exception GOV provisions in                   (i.e., the former applies to four more
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                                           rule and State’s companion USML                          Section 740.11(d), International                      countries than the latter—two of those
                                           Category XIV/XVIII proposed rule as                      Inspections under the Chemical                        countries are CWC States Parties and
                                           transferring to new ECCN 1A607.h on                      Weapons Convention (CWC), to                          one is a special administrative region of
                                           the CCL all detection equipment,                         destinations located outside of Country               a State Party). In light of the recent
                                           previously controlled under USML                         Group A:5 in Supplement No. 1 to part                 changes to the License Exception GOV
                                           Category XIV(f)(2), that is ‘‘specially                  740 of the EAR.                                       provisions described above, BIS does


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                                                              Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations                                           49521

                                           not have any immediate plans to                          and animals, degrade equipment, or                    and were added to these new ECCNs on
                                           address possible revisions to the                        damage crops or the environment).                     the CCL only after the President
                                           country scope of the OPCW                                   Response: The items noted by the                   determined that these items no longer
                                           authorization. BIS also considers any                    commenter are not identified in any of                warrant control on the USML for the
                                           such action to be outside the scope of                   the new ‘‘600 series’’ ECCNs described                reasons set forth above.
                                           this rulemaking, which does not                          in BIS’s June 17 (toxicological agents
                                           specifically address EAR requirements                    and directed energy weapons) rule, but                Changes Made by This Rule to Controls
                                           involving the CWC and the OPCW.                          they are clearly enumerated under                     on Certain Dissemination, Detection
                                                                                                    USML Category XIV in State’s                          and Protection ‘‘Equipment’’ and
                                           ECCN 1A607.x (‘‘Parts,’’                                 companion proposed rule. Proposed                     Related Items Previously Controlled
                                           ‘‘Components,’’ ‘‘Accessories,’’ and                     USML Category XIV(b)(1)(ii) identifies                Under USML Category XIV
                                           ‘‘Attachments’’)                                         specific biological agents that have been                This final rule creates five new ‘‘600
                                              Comment: One commenter noted that                     militarized, as described in USML                     series’’ ECCNs in CCL Category 1
                                           proposed new ECCN 1A607.x indicated                      Category XIV(b)(1)(i), and proposed                   (ECCNs 1A607, 1B607, 1C607, 1D607,
                                           that it controlled ‘‘parts,’’                            USML Category XIV(b)(2) describes                     and 1E607) that clarify the EAR controls
                                           ‘‘components,’’ ‘‘accessories,’’ and                     biological agents identified under ECCN               applicable to certain dissemination,
                                           ‘‘attachments’’ ‘‘specially designed’’ for               1C351, 1C353, or 1C354 on the EAR’s                   detection and protection ‘‘equipment’’
                                           the ‘‘equipment’’ described in proposed                  CCL that have been militarized, as                    and related items that the President has
                                           ECCN 1A607.e, .f, .g, or .j. However, the                described in USML Category XIV(b)(2)(i)               determined no longer warrant control
                                           commenter also noted that ‘‘parts,’’                     and (b)(2)(ii). These defense articles are            under USML Category XIV. Terms such
                                           ‘‘components,’’ ‘‘accessories,’’ and                     identified in the USML Category XIV                   as ‘‘part,’’ ‘‘component’’ ‘‘accessories,’’
                                           ‘‘attachments’’ ‘‘specially designed’’ for               amendments contained in State’s                       ‘‘attachments,’’ and ‘‘specially
                                           the detection/identification                             companion rule to this final rule.                    designed’’ are applied in the same
                                           ‘‘equipment’’ described in proposed                         Comment: One commenter noted that                  manner in this rule as those terms are
                                           ECCN 1A607.h were not included in                        the following two Australia Group (AG)                defined in Section 772.1 of the EAR. In
                                           proposed ECCN 1A607.x. As a result,                      controlled items were not identified in               addition, to assist exporters in
                                           the commenter questioned whether any                     either the BIS or State Category XIV/                 determining the control status of their
                                           ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’              XVIII proposed rules:                                 items, a ‘‘Specially Designed’’ Decision
                                           and ‘‘attachments’’ ‘‘specially designed’’                  (1) Valves with a closure element                  Tool and a CCL Order of Review
                                           for detection/identification                             designed to be interchangeable, as listed             Decision Tool are available on the BIS
                                           ‘‘equipment’’ that might be removed                      under 6.b on the AG Control List of
                                                                                                                                                          Web site at: http://www.bis.doc.gov/
                                           from the USML, as a result of the                        Dual-Use Chemical Manufacturing
                                                                                                                                                          index.php/decision-tree-tools.
                                           proposed revisions to USML Category                      Facilities and Equipment); and (2) nose-
                                           XIV(f), would be controlled under                        only exposure apparatus, as listed under              New ECCN 1A607 Military dissemination
                                           proposed new ECCN 1A607 on the CCL                       8.b on the AG Control List of Dual-Use                   ‘‘equipment’’ for riot control agents,
                                                                                                    Biological Equipment.                                    military detection and protection
                                           (e.g., under proposed ECCN 1A607.x).
                                                                                                                                                             ‘‘equipment’’ for toxicological agents
                                              Response: The commenter is correct                       Response: The commenter accurately
                                                                                                                                                             (including chemical, biological, and riot
                                           in noting that proposed new ECCN                         noted that neither of the two items were                 control agents), and related commodities.
                                           1A607.x specified only those ‘‘parts,’’                  identified in the BIS and State Category
                                           ‘‘components,’’ ‘‘accessories,’’ and                     XIV/XVIII proposed rules. However,                       In new ECCN 1A607, paragraphs .a
                                           ‘‘attachments’’ ‘‘specially designed’’ for               because these items are identified as                 through .d, paragraph .i, and paragraphs
                                           the ‘‘equipment’’ described in ECCN                      dual-use items on the AG common                       .l through .w are reserved. Paragraph .e
                                           1A607.e, .f, .g, or .j, and not those                    control lists indicated above, neither                of ECCN 1A607 controls ‘‘equipment’’
                                           ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’              item is within the scope of this                      ‘‘specially designed’’ for military use
                                           and ‘‘attachments’’ ‘‘specially designed’’               rulemaking. The valves, described                     and for the dissemination of any of the
                                           for detection/identification                             under 6.b on the AG chemical                          riot control agents controlled in ECCN
                                           ‘‘equipment’’ described in ECCN                          manufacturing facilities and equipment                1C607.a. Paragraph .f of ECCN 1A607
                                           1A607.h. This final rule corrects that                   control list, are currently controlled                controls protection ‘‘equipment’’
                                           oversight. New ECCN 1A607.x, as added                    under ECCN 2B350.g.2 on the CCL. The                  ‘‘specially designed’’ for military use
                                           to the CCL by this final rule, indicates                 nose-only exposure apparatus,                         and for defense against either materials
                                           that it controls ‘‘parts,’’ ‘‘components,’’              described under 8.b on the AG                         controlled by USML Category XIV(a) or
                                           ‘‘accessories,’’ and ‘‘attachments’’ that                biological equipment common control                   (b) or any of the riot control agents in
                                           are ‘‘specially designed’’ for a                         list, was recently added to this AG                   new ECCN 1C607.a. Paragraph .g of
                                           commodity controlled by ECCN                             control list and is currently controlled              ECCN 1A607 controls decontamination
                                           1A607.e, .f, .g, .h, or .j or for a defense              under ECCN 2B352.h based on a recent                  ‘‘equipment’’ not controlled by USML
                                           article controlled by USML Category                      update of AG listed items on the CCL                  Category XIV(f) that is ‘‘specially
                                           XIV(f) and that are not enumerated or                    (see 81 FR 36458, June 7, 2016).                      designed’’ for military use and for the
                                           otherwise described elsewhere in the                        Comment: One commenter indicated                   decontamination of objects
                                           USML.                                                    that some of the proposed new ‘‘600                   contaminated with materials controlled
                                                                                                    series’’ ECCNs in BIS’s June 17                       by USML Category XIV(a) or (b).
                                           General Comments on Dissemination,                       (toxicological agents and directed                    Paragraph .h controls ‘‘equipment’’ not
                                           Detection and Protection ‘‘Equipment’’                   energy weapons) rule maintained                       controlled by USML Category XIV(f)
                                              Comment: One commenter noted that                     unilateral controls on certain items that             that is ‘‘specially designed’’ for military
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                                           the BIS and State Category XIV/XVIII                     were proposed to be transferred to the                use and for the detection or
                                           proposed rules omitted coverage of the                   CCL from USML Category XIV.                           identification of either materials
                                           Wassenaar Munitions List (WAML)                             Response: All the items described in               specified by USML Category XIV(a) or
                                           items in WAML 7.a (Biological agents or                  the new ‘‘600 series’’ ECCNs created by               (b) or riot control agents controlled by
                                           radioactive materials adapted for use in                 this final rule were previously                       new ECCN 1C607.a. Paragraph .j
                                           war to produce casualties in humans                      controlled on the USML under the ITAR                 controls ‘‘equipment’’ ‘‘specially


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                                           49522              Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations

                                           designed’’ to: (i) Interface with a                      ‘‘specially designed’’ for testing the                   New ECCN 1E607.a controls
                                           detector, shelter, vehicle, vessel, or                   articles controlled in paragraph (a), (b),            ‘‘technology’’ ‘‘required’’ for the
                                           aircraft controlled by the USML or a                     (c), (e), or (f)(4) of USML Category XIV).            ‘‘development,’’ ‘‘production,’’
                                           ‘‘600 series’’ ECCN; and (ii) collect and                In addition to the test facilities and                operation, installation, maintenance,
                                           process samples of articles controlled in                ‘‘equipment’’ controlled by ECCN                      repair, overhaul, or refurbishing of items
                                           USML Category XIV(a) or (b). Paragraph                   1B607.b, see the tooling and                          controlled by ECCN 1A607, 1B607,
                                           .k controls medical countermeasures                      ‘‘equipment’’ classified under ECCN                   1C607, or 1D607. Paragraph .b of ECCN
                                           that are ‘‘specially designed’’ for                      2B350 or 2B352 for producing the                      1E607 is reserved.
                                           military use (including pre- and post-                   chemical/biological agents, precursors,                  Amendments to License Exceptions
                                           treatments, antidotes, and medical                       or defoliants described in USML                       BAG and TMP related to Individual
                                           diagnostics) and ‘‘specially designed’’ to               Category XIV(a), (b), (c), or (e). The EAR            Protection ‘‘Equipment’’ in ECCN
                                           counter chemical agents controlled by                    also control tooling and ‘‘equipment’’ to             1A607.f.
                                           USML Category XIV(a). Paragraph .x                       produce the antibodies/polynucleotides
                                           controls ‘‘parts,’’ ‘‘components,’’                      and vaccines described in USML                           In response to public comments
                                           ‘‘accessories,’’ and ‘‘attachments’’ that                Category XIV(g) and (h), respectively, as             recommending that all individual
                                           are ‘‘specially designed’’ for a                         follows: lab ‘‘equipment’’ designated as              protection ‘‘equipment’’ and clothing
                                           commodity controlled under ECCN                          EAR99 under the EAR; biological dual-                 controlled under new ECCN 1A607.f
                                           1A607.e, .f, .g, .h, or .j or a defense                  use ‘‘equipment’’ (including protective               should be authorized for export under
                                           article controlled in USML Category                      ‘‘equipment’’) classified under ECCN                  License Exception BAG (under special
                                           XIV(f) and that are not enumerated or                    2B352; and EAR-controlled biological                  provisions similar to those currently
                                           otherwise described elsewhere in the                     systems for making vaccines (involving                applicable to ‘‘personal protective
                                           USML.                                                    the use of mice, rabbits, etc.).                      equipment’’), this final rule amends the
                                           New ECCN 1B607 Military test, inspection,                                                                      License Exception BAG provisions in
                                                                                                    New ECCN 1C607 Tear gases, riot control
                                              and production ‘‘equipment’’ and related                 agents and materials for the detection             Section 740.14(h) of the EAR to
                                              commodities ‘‘specially designed’’ for                   and decontamination of chemical                    authorize exports, reexports, or in-
                                              the ‘‘development,’’ ‘‘production,’’                     warfare agents.                                    country transfers of chemical or
                                              repair, overhaul, or refurbishing of                                                                        biological agent protective gear
                                              commodities identified in ECCN 1A607                     New ECCN 1C607.a controls specified
                                                                                                    tear gases and riot control agents.                   consistent with the requirements and
                                              or 1C607, or defense articles enumerated
                                              or otherwise described in USML                        Paragraph .b of ECCN 1C607 controls                   restrictions described therein. In a
                                              Category XIV.                                         ‘‘biopolymers’’ not controlled by USML                corresponding change, this final rule
                                                                                                    Category XIV(g) that are ‘‘specially                  also amends the License Exception TMP
                                              In new ECCN 1B607, paragraph .a
                                                                                                    designed’’ or processed for the detection             provisions in Section 740.9(a)(11) of the
                                           controls ‘‘equipment,’’ not including
                                                                                                    or identification of chemical warfare                 EAR to authorize temporary exports,
                                           incinerators, that is ‘‘specially
                                                                                                    (CW) agents specified by USML                         reexports, or in-country transfers of
                                           designed’’ for the destruction of
                                           chemical agents controlled by USML                       Category XIV(a) and the cultures of                   chemical or biological agent protective
                                           Category XIV(a). Paragraph .b of ECCN                    specific cells used to produce them.                  gear consistent with the requirements
                                           1B607 controls test facilities and                       Paragraph .c controls specified                       and restrictions described therein. The
                                           ‘‘equipment’’ that are ‘‘specially                       ‘‘biocatalysts’’ and biological systems               amendments to License Exceptions BAG
                                           designed’’ for military certification,                   that are not controlled by USML                       and TMP also change the requirements
                                           qualification, or testing of commodities                 Category XIV(g) and are ‘‘specially                   for Afghanistan to be consistent with
                                           controlled by new ECCN 1A607.e, .f, .g,                  designed’’ for the decontamination or                 those of the majority of other Country
                                           .h, or .j or by USML Category XIV(f),                    degradation of CW agents specified by                 Group D:5 destinations (i.e., the U.S.
                                           except for XIV(f)(1). Paragraph .c of                    USML Category XIV(a). Paragraph .d                    person authorized to use the license
                                           ECCN 1B607 controls tooling and                          controls chemical mixtures not                        exception must be affiliated with the
                                           ‘‘equipment’’ ‘‘specially designed’’ for                 controlled by USML Category XIV(f)                    U.S. Government and be traveling on
                                           the ‘‘development,’’ ‘‘production,’’                     that are ‘‘specially designed’’ for                   official business or traveling in support
                                           repair, overhaul, or refurbishing of                     military use for the decontamination of               of a U.S. Government contract). The
                                           commodities controlled under new                         objects contaminated with materials                   same requirement applies to the use of
                                           ECCN 1A607.e, .f, .g, .h, or .j or USML                  specified by USML Category XIV(a) or                  these license exception provisions for
                                           Category XIV(f). Paragraphs .d through                   (b).                                                  Iraq, also a D:5 country, with the
                                           .w are reserved. Paragraph .x controls                                                                         additional option that the U.S. person
                                                                                                    New ECCN 1D607 ‘‘Software’’ ‘‘specially
                                           ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’                 designed’’ for the ‘‘development,’’                must be traveling to Iraq under a direct
                                           and ‘‘attachments,’’ not enumerated or                      ‘‘production,’’ operation, or maintenance          authorization by the Government of Iraq
                                           otherwise described elsewhere in the                        of items controlled by 1A607, 1B607 or             and engaging in activities for, on behalf
                                           USML, that are ‘‘specially designed’’ for                   1C607.                                             of, or at the request of, the Government
                                           a commodity controlled by ECCN                              New ECCN 1D607.a controls                          of Iraq. These amendments are also
                                           1B607.b or .c or for a defense article                   ‘‘software’’ ‘‘specially designed’’ for the           intended to ensure that the scope of
                                           controlled by USML Category XIV(f).                      ‘‘development,’’ ‘‘production,’’                      these license exceptions, as they apply
                                              As indicated above, ECCN 1B607.b                      operation, or maintenance of items                    to chemical or biological agent
                                           does not control test facilities and                     controlled by ECCN 1A607, 1B607 or                    protective gear controlled under new
                                           ‘‘equipment’’ that are ‘‘specially                       1C607. Paragraph .b of ECCN 1D607 is                  ECCN 1A607.f, conforms with the scope
                                           designed’’ for military certification,                   reserved.                                             of the ITAR exemption for personal
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                                           qualification, or testing of commodities                                                                       protective equipment in Section 123.17
                                                                                                    New ECCN 1E607 ‘‘Technology’’ ‘‘required’’
                                           and are enumerated or otherwise                             for the ‘‘development,’’ ‘‘production,’’
                                                                                                                                                          of the ITAR (e.g., by correcting the
                                           described in USML Category XIV(f)(1),                       operation, installation, maintenance,              provisions for Afghanistan, as described
                                           as set forth in State’s companion rule to                   repair, overhaul, or refurbishing of items         above, to be consistent with those of the
                                           this final rule (e.g., see the equipment in                 controlled by ECCN 1A607, 1B607,                   majority of other Country Group D:5
                                           USML Category XIV(f)(1)(ii) that is                         1C607, or 1D607.                                   destinations).


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                                                              Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations                                          49523

                                           Tooling, Production ‘‘Equipment,’’ Test                  clarify the EAR controls applicable to                New ECCN 6D619 ‘‘Software’’ ‘‘specially
                                           and Evaluation ‘‘Equipment,’’ Test                       certain tooling, production                              designed’’ for the ‘‘development,’’
                                           Models and Other Articles Related to                     ‘‘equipment,’’ test and evaluation                       ‘‘production,’’ operation or maintenance
                                                                                                                                                             of commodities controlled by 6B619.
                                           Directed Energy Weapons                                  ‘‘equipment,’’ test models, and related
                                                                                                    articles for Directed Energy Weapons                     New ECCN 6D619 controls ‘‘software’’
                                           Public Comments and BIS Responses                                                                              ‘‘specially designed’’ for the
                                                                                                    (DEWs) that the President has
                                              BIS received comments from two                        determined no longer warrant control                  ‘‘development,’’ ‘‘production,’’
                                           parties in response to the proposed                      under USML Category XVIII. Terms                      operation or maintenance of
                                           amendments in the June 17                                such as ‘‘part,’’ ‘‘component’’                       commodities controlled by ECCN
                                           (toxicological agents and directed                       ‘‘accessories,’’ ‘‘attachments,’’ and                 6B619. Inclusion of this ‘‘software’’ on
                                           energy weapons) rule related to tooling,                 ‘‘specially designed’’ are applied in the             the CCL is appropriate, because it is
                                           production ‘‘equipment,’’ test, and                      same manner in this rule as those terms               limited to ‘‘software’’ ‘‘specially
                                           evaluation ‘‘equipment,’’ test models                    are defined in Section 772.1 of the EAR.              designed’’ for ECCN 6B619 commodities
                                           and other articles related to directed                   In addition, to assist exporters in                   and does not include any ‘‘software’’ for
                                           energy weapons.                                          determining the control status of their               items specifically enumerated or
                                                                                                    items, a ‘‘Specially Designed’’ Decision              otherwise described on the USML.
                                           General Comments on Items Related to
                                           Directed Energy Weapons                                  Tool and a CCL Order of Review                        New ECCN 6E619 ‘‘Technology’’ ‘‘required’’
                                                                                                    Decision Tool are available on the BIS                   for the ‘‘development,’’ ‘‘production,’’
                                              Comment: One commenter noted that                     Web site at: http://www.bis.doc.gov/                     operation, installation, maintenance,
                                           the BIS and State Category XIV/XVIII                     index.php/decision-tree-tools.                           repair, overhaul or refurbishing of
                                           proposed rules omitted coverage of the                                                                            commodities controlled by 6B619 or
                                           Wassenaar Munitions List (WAML)                          New ECCN 6B619 Test, inspection and                      ‘‘software’’ controlled by 6D619.
                                                                                                       production ‘‘equipment,’’ and related
                                           items in WAML 19.f (‘‘Laser’’ systems                                                                             New ECCN 6E619 controls
                                                                                                       commodities, ‘‘specially designed’’ for
                                           ‘‘specially designed’’ to cause                             the ‘‘development,’’ ‘‘production,’’               ‘‘technology’’ ‘‘required’’ for the
                                           permanent blindness to unenhanced                           repair, overhaul, or refurbishing of               ‘‘development,’’ ‘‘production,’’
                                           vision).                                                    commodities enumerated or otherwise                operation, installation, maintenance,
                                              Response: The items noted by the                         described in USML Category XVIII.                  repair, overhaul or refurbishing of
                                           commenter are not identified in any of                                                                         commodities controlled by ECCN
                                           the new ‘‘600 series’’ ECCNs described                      New ECCN 6B619.a controls tooling,
                                                                                                                                                          6B619, or ‘‘software’’ controlled by
                                           in BIS’s June 17 (toxicological agents                   templates, jigs, mandrels, molds, dies,
                                                                                                                                                          6D619. Inclusion of this ‘‘technology’’
                                           and directed energy weapons) rule, but                   fixtures, alignment mechanisms, and
                                                                                                                                                          on the CCL is appropriate, because it is
                                           they are clearly enumerated under                        test ‘‘equipment’’ not enumerated or
                                                                                                                                                          limited to ‘‘technology’’ ‘‘required’’ for
                                           USML Category XVIII in State’s                           otherwise described in USML Category
                                                                                                                                                          ECCN 6B619 commodities and does not
                                           companion proposed rule. Proposed                        XVIII and not elsewhere specified on
                                                                                                                                                          include any ‘‘technology’’ for items
                                           USML Category XVIII(a) identifies                        the USML that are ‘‘specially designed’’
                                                                                                                                                          specifically enumerated or otherwise
                                           directed energy weapons (DEW) systems                    for the ‘‘development,’’ ‘‘production,’’
                                                                                                                                                          described on the USML.
                                           or ‘‘equipment’’ that, as their sole or                  repair, overhaul, or refurbishing of
                                           primary purpose, cause permanent or                      commodities controlled by USML                        Applicable Controls for the New ‘‘600
                                           flash blindness. These articles are                      Category XVIII. The commodities that                  Series’’ ECCNs Created by This Rule
                                           identified in the USML Category XVIII                    are controlled under new ECCN 6B619.a                    Pursuant to the framework established
                                           amendments contained in State’s                          are used to produce directed energy                   in the April 16 (initial implementation)
                                           companion rule to this final rule.                       weapons (including non-lethal directed                rule, detection and protection
                                              Comment: One commenter indicated                      energy weapons, such as active denial                 ‘‘equipment’’ and related commodities
                                           that some of the proposed new ‘‘600                      systems) and are similar to commodities               classified under ECCN 1A607; related
                                           series’’ ECCNs in BIS’s June 17                          that are in operation in a number of                  test, inspection and production
                                           (toxicological agents and directed                       other countries, some of which are not                ‘‘equipment’’ classified under ECCN
                                           energy weapons) rule maintained                          allies of the United States or members                1B607; tear gases, riot control agents
                                           unilateral controls on certain items that                of multinational export control regimes.              and related commodities classified
                                           were proposed to be transferred to the                   Research and development is currently                 under ECCN 1C607 (except for items
                                           CCL from the USML Category XVIII.                        underway to determine the possible                    listed in ECCN 1C607.a.10, .a.11, .a.12,
                                              Response: All the items described in                  uses of such commodities (e.g., to                    or a.14, all of which are specifically
                                           the new ‘‘600 series’’ ECCNs created by                  protect the Earth from asteroids, or for              excluded from WAML Category 7 by
                                           this final rule were previously                          perimeter security and crowd control).                Note 1 thereto); related ‘‘software’’
                                           controlled on the USML under the ITAR                    Possession of such commodities does                   classified under ECCN 1D607 (except
                                           and were added to these new ECCNs on                     not confer a significant military                     ‘‘software’’ for items listed in ECCN
                                           the CCL only after the President                         advantage on the United States and,                   1C607.a.10, .a.11, .a.12, or a.14); and
                                           determined that these items no longer                    therefore, the inclusion of such                      related ‘‘technology’’ classified under
                                           warrant control on the USML for the                      commodities on the CCL would be                       ECCN 1E607 (except ‘‘technology’’ for
                                           reasons set forth above.                                 appropriate.                                          items listed in ECCN 1C607.a.10, .a.11,
                                                                                                       Paragraphs .b through .w of ECCN                   .a.12, or a.14 and 1D607 ‘‘software’’
                                           Changes Made by This Rule to Controls                    6B619 are reserved. Paragraph .x                      therefor) are subject to the licensing
                                           on Certain Tooling, Production                           controls ‘‘parts,’’ ‘‘components,’’                   policies that apply to items controlled
                                           ‘‘Equipment,’’ Test and Evaluation                       ‘‘accessories,’’ and ‘‘attachments’’                  for national security (NS) reasons, as
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                                           ‘‘Equipment’’ and Test Models                            ‘‘specially designed’’ for a commodity                described in § 742.4(b)(1)—specifically,
                                           Previously Controlled Under USML                         subject to control under paragraph .a of              NS Column 1 controls. The same level
                                           Category XVIII                                           this ECCN and not enumerated or                       of NS controls and licensing policies
                                              This rule creates three new ‘‘600                     otherwise described in USML Category                  also apply to the directed energy
                                           series’’ ECCNs in CCL Category 6                         XVIII and not elsewhere specified on                  weapons items that are controlled under
                                           (ECCNs 6B619, 6D619 and 6E619) that                      the USML.                                             the three new ECCNs (i.e., test,


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                                           49524              Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations

                                           inspection, and production                               exceed a ‘‘de minimis’’ percentage of                 repair, overhaul, or refurbishing of an
                                           ‘‘equipment’’ classified under ECCN                      controlled U.S. origin content. Under                 item, in one of the countries listed in
                                           6B619; related ‘‘software’’ classified                   Section 734.4 of the EAR, as amended                  Country Group A:5 or the United States,
                                           under ECCN 6D619; and related                            by the April 16 (initial implementation)              that will ultimately be used by any such
                                           ‘‘technology’’ classified under ECCN                     rule, there is no eligibility for de                  government agencies, the United States
                                           6E619) that this rule adds to Category 6                 minimis treatment for a foreign-made                  Government, or by a person in the
                                           of the CCL. In addition, all the items                   item that incorporates U.S.-origin ‘‘600              United States. The use of License
                                           that are controlled under the new                        series’’ items when the foreign-made                  Exception STA also may be authorized,
                                           ECCNs created by this rule are subject                   item is destined for a country that is                under certain circumstances described
                                           to the regional stability (RS) licensing                 subject to a U.S. arms embargo, i.e., a               in § 740.20(b)(3)(ii)(C), where the U.S.
                                           policies set forth in § 742.6(a)(1), i.e., RS            country listed in Country Group D:5 of                Government has otherwise authorized
                                           Column 1, as well as antiterrorism (AT                   Supplement No. 1 to part 740 of the                   the ultimate end-use under a license.
                                           Column 1) and United Nations (UN)                        EAR. Items controlled under the new                      None of the items controlled under
                                           controls.                                                ‘‘600 series’’ ECCNs created by this rule             the new ‘‘600 series’’ ECCNs created by
                                              Also, in accordance with                              are eligible for de minimis treatment                 this rule are treated as ‘‘end items’’ for
                                           §§ 742.4(b)(1) and 742.6(b)(1) of the                    under the EAR, provided that the                      purposes of License Exception STA and,
                                           EAR, exports and reexports of ‘‘600                      foreign-made items into which they are                therefore, such items are not subject to
                                           series’’ items controlled for NS or RS                   incorporated are not destined for a                   the License Exception STA eligibility
                                           reasons will be reviewed consistent                      country listed in Country Group D:5. In               request requirements in § 740.20(g) of
                                           with United States arms embargo                          contrast, the AECA does not permit the                the EAR.
                                           policies in § 126.1 of the ITAR, if                      ITAR to have a de minimis treatment for                  Items controlled under new ECCN
                                           destined to a country listed in Country                  USML-listed items, regardless of the                  1B607 or 6B619 are also eligible for
                                           Group D:5 of Supplement No. 1 to part                    significance or insignificance of the                 License Exception LVS (limited value
                                           740 of the EAR. All items controlled for                 U.S.-origin content or the percentage of              shipments) up to a value of $1,500, TMP
                                           NS or RS reasons, as set forth in this                   U.S.-origin content in the foreign-made               (temporary exports), and RPL (servicing
                                           final rule, are subject to this licensing                item (i.e., USML-listed items remain                  and replacement parts). License
                                           policy.                                                  subject to the ITAR when they are                     Exceptions TMP and RPL also are
                                                                                                    incorporated abroad into a foreign-made               available for items controlled under new
                                           Effects of This Final Rule                                                                                     ECCN 1A607. In addition, special
                                                                                                    item, regardless of either of these
                                              BIS believes that the principal effect                factors).                                             provisions in License Exception TMP
                                           of this final rule, when considered in                                                                         (see § 740.9(a)(11) of the EAR) and
                                           the context of similar rules being                       Use of License Exceptions                             License Exception BAG (baggage) (see
                                           published as part of the ECR, will be to                    The April 16 (initial implementation)              § 740.14(h) of the EAR), as amended by
                                           provide greater flexibility for exports                  rule imposed certain restrictions on the              this final rule, authorize exports,
                                           and reexports to NATO member                             use of license exceptions for items                   reexports, or in-country transfers of
                                           countries and other multiple-regime-                     controlled under ‘‘600 series’’ ECCNs on              certain protection ‘‘equipment’’
                                           member countries of items the President                  the CCL. The general restrictions that                described in ECCN 1A607.f.
                                           determines no longer warrant control on                  apply to the use of license exceptions                   BIS believes that the restrictions that
                                           the USML. This greater flexibility is in                 for such items are described in                       apply to the use of license exceptions
                                           the form of: the application of the EAR’s                § 740.2(a)(13) of the EAR. The EAR                    for the items in the new ‘‘600 series’’
                                           de minimis threshold principle for items                 provisions that describe the                          ECCNs represents an overall reduction
                                           constituting less than a de minimis                      requirements specific to individual                   from the level of restrictions that
                                           amount of controlled U.S.-origin content                 license exceptions contain additional                 previously applied to such items on the
                                           in foreign made items; the availability of               restrictions on the use of license                    USML. This is particularly true with
                                           license exceptions, particularly License                 exceptions for such items.                            respect to exports of such items to
                                           Exceptions ‘‘Servicing and Replacement                      For example, this rule authorizes                  NATO members and multiple-regime
                                           of Parts and Equipment’’ (RPL) and                       limited License Exception STA                         member countries.
                                           ‘‘Strategic Trade Authorization’’ (STA);                 availability for the new ‘‘600 series’’
                                                                                                    ECCNs contained herein. None of the                   Alignment With the Wassenaar
                                           the elimination of requirements for
                                                                                                    items controlled under these new                      Arrangement Munitions List
                                           manufacturing license agreements and
                                           technical assistance agreements in                       ECCNs are eligible for the STA ‘‘controls                Since the beginning of ECR, the
                                           connection with exports of technology;                   of lesser sensitivity’’ described in                  Administration has stated that the
                                           and a reduction in, or the elimination                   § 740.20(c)(2) of the EAR. Instead, STA               reforms will be consistent with the
                                           of, exporter and manufacturer                            eligibility for all such items is limited to          United States’ obligations to the
                                           registration requirements and associated                 the destinations listed in § 740.20(c)(1)             multilateral export control regimes.
                                           registration fees. Some of these specific                of the EAR (i.e., Country Group A:5                   Accordingly, the Administration has, in
                                           effects are discussed in more detail,                    destinations indicated in Supplement                  this final rule, exercised its national
                                           below.                                                   No. 1 to part 740 of the EAR). In                     discretion to implement, clarify, and, to
                                                                                                    addition, such items must be for: (1)                 the extent feasible, align its controls
                                           De Minimis                                               ultimate end-use by a person of a type                with those of the regimes. In this rule,
                                             The April 16 (initial implementation)                  specified in § 740.20(b)(3)(ii) of the EAR            new ECCNs 1A607 and 1C607
                                           rule imposed certain unique de minimis                   (i.e., the armed forces, police,                      implement, to the extent possible, the
                                           requirements on items controlled under                   paramilitary, law enforcement, customs,               controls in WAML Category 7; new
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                                           the new ‘‘600 series’’ ECCNs. Section                    correctional, fire, or a search and rescue            ECCNs 1B607 and 6B619 implement, to
                                           734.3 of the EAR provides, inter alia,                   agency of a government of one of the                  the extent possible, the controls in
                                           that, under certain conditions, items                    countries listed in Country Group A:5 or              WAML Category 18 for production
                                           made outside the United States that                      the United States Government); or (2)                 ‘‘equipment;’’ new ECCNs 1D607 and
                                           incorporate items subject to the EAR are                 the ‘‘development,’’ ‘‘production,’’                  6D619 implement, to the extent
                                           not subject to the EAR if they do not                    operation installation, maintenance,                  possible, the controls in WAML


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                                                              Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations                                         49525

                                           Category 21 for ‘‘software;’’ and new                    a result of all the ECR rules published               eligibility as described in § 740.20(g) of
                                           ECCNs 1E607 and 6E619 implement, to                      by BIS, and not just this final rule,                 the EAR. BIS believes that the increased
                                           the extent possible, the controls in                     which affects items previously                        use of License Exception STA resulting
                                           WAML Category 22 for ‘‘technology.’’                     controlled under USML Category XIV or                 from the combined effect of all rules to
                                                                                                    XVIII. No changes in burden for any of                be published, adding items to the EAR
                                           Export Administration Act
                                                                                                    these collections is anticipated at this              that would be removed from the ITAR
                                              Although the Export Administration                    time, other than as indicated in the                  as part of the Administration’s Export
                                           Act expired on August 20, 2001, the                      discussion, below.                                    Control Reform Initiative, would
                                           President, through Executive Order                          As stated in the proposed rule                     increase the burden associated with
                                           13222 of August 17, 2001, 3 CFR, 2001                    published on July 15, 2011 (76 FR                     control number 0694–0137 by about
                                           Comp., p. 783 (2002), as amended by                      41958) (the ‘‘July 15 proposed rule’’),               23,858 hours (20,450 transactions at 1
                                           Executive Order 13637 of March 8,                        BIS initially estimated that the                      hour and 10 minutes each).
                                           2013, 78 FR 16129 (March 13, 2013),                      combined effect of all rules to be                       BIS expects that this increase in
                                           and as extended by the Notice of August                  published, adding items to the EAR that               burden hours under the EAR will be
                                           7, 2015 (80 FR 48233 (Aug. 11, 2015),                    would be removed from the ITAR as                     more than offset by a reduction in the
                                           has continued the Export                                 part of the Administration’s Export                   burden hours associated with currently
                                           Administration Regulations in effect                     Control Reform Initiative, would                      approved collections related to the
                                           under the International Emergency                        increase the number of license                        ITAR. With few exceptions, most
                                           Economic Powers Act (50 U.S.C. 1701 et                   applications to be submitted to BIS by                exports of the dissemination, detection
                                           seq.). BIS continues to carry out the                    approximately 16,000 annually,                        and protection ‘‘equipment’’ and related
                                           provisions of the Export Administration                  resulting in an increase in burden hours              articles and the tooling, production
                                           Act, as appropriate and to the extent                    of 5,067 (16,000 transactions at 17                   ‘‘equipment,’’ test and evaluation
                                           permitted by law, pursuant to Executive                  minutes each) under control number                    ‘‘equipment,’’ test models and related
                                           Order 13222 as amended by Executive                      0694–0088. As the review of the USML                  articles that this rule adds to the CCL
                                           Order 13637.                                             has progressed, the interagency group                 previously required State Department
                                           Rulemaking Requirements                                  has gained more specific information                  authorization, even when destined to
                                                                                                    about the number of items that would                  NATO member states and other close
                                              1. Executive Orders 13563 and 12866                   come under BIS jurisdiction and                       allies. In addition, the exports of
                                           direct agencies to assess all costs and                  whether those items would be eligible                 ‘‘technology’’ necessary to produce such
                                           benefits of available regulatory                         for export under license exception. As                items in the inventories of the United
                                           alternatives and, if regulation is                       of June 21, 2012, BIS revised its estimate            States and its NATO and other close
                                           necessary, to select regulatory                          to reflect an increase in license                     allies previously required State
                                           approaches that maximize net benefits                    applications of 30,000 annually,                      Department authorization. Under the
                                           (including potential economic,                           resulting in an increase in burden hours              EAR, as implemented by this rule, such
                                           environmental, public health and safety                  of 8,500 (30,000 transactions at 17                   ‘‘technology’’ is now eligible for export
                                           effects, distribute impacts, and equity).                minutes each) under control number                    to NATO member states and other close
                                           Executive Order 13563 emphasizes the                     0694–0088. BIS continues to believe                   allies under License Exception STA,
                                           importance of quantifying both costs                     that its revised estimate is accurate.                unless otherwise specifically excluded.
                                           and benefits, of reducing costs, of                      Notwithstanding this increase in license                 The anticipated reduction in burden
                                           harmonizing rules, and of promoting                      applications under the EAR, the net                   hours will particularly impact exporters
                                           flexibility. This rule has been                          burden that U.S. export controls impose               of ‘‘parts’’ and ‘‘components’’ that are
                                           designated a ‘‘significant regulatory                    on U.S. exporters is expected to go                   no longer be subject to the ITAR,
                                           action,’’ although not economically                      down, as described below, as a result of              because, with few exceptions, the ITAR
                                           significant, under Executive Order                       the transfer of less sensitive military               exempt from license requirements only
                                           12866. Accordingly, the rule has been                    items to the jurisdiction of the                      exports to Canada. Most exports of such
                                           reviewed by the Office of Management                     Department of Commerce, under the                     ‘‘parts’’ and ‘‘components,’’ even when
                                           and Budget (OMB).                                        EAR, and the application of the license               destined to NATO and other close allies,
                                              2. Notwithstanding any other                          exceptions and other provisions in the                previously required State Department
                                           provision of law, no person is required                  EAR that are described in this final rule.            authorization. Under the EAR, as
                                           to respond to, nor is any person subject                    As implemented by this rule, certain               implemented by this rule, a small
                                           to a penalty for failure to comply with,                 dissemination, detection and protection               number of low-level ‘‘parts’’ and
                                           a collection of information, subject to                  ‘‘equipment’’ and related articles                    ‘‘components’’ do not require a license
                                           the requirements of the Paperwork                        currently controlled under USML                       to most destinations, while most other
                                           Reduction Act of 1995 (44 U.S.C. 3501                    Category XIV in the ITAR and certain                  ‘‘parts’’ and ‘‘components’’ identified
                                           et seq.) (PRA), unless that collection of                tooling, production ‘‘equipment,’’ test               under the new ‘‘600 series’’ ECCNs are
                                           information displays a currently valid                   and evaluation ‘‘equipment,’’ test                    eligible for export to NATO and other
                                           OMB control number. This final rule                      models and related articles currently                 close allies under License Exception
                                           affects the following approved                           controlled under USML Category XVIII                  STA.
                                           collections: Simplified Network                          of the ITAR are now subject to the                       Use of License Exception STA
                                           Application Processing System (control                   licensing jurisdiction of the Department              imposes a paperwork and compliance
                                           number 0694–0088), which includes,                       of Commerce under the EAR and its                     burden because, for example, exporters
                                           among other things, license                              CCL, and also are eligible for certain                must furnish information about the item
                                           applications; License Exceptions and                     license exceptions, including License                 that is being exported to the consignee
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                                           Exclusions (0694–0137); recordkeeping                    Exception STA. For example, items                     and obtain from the consignee an
                                           (0694–0096); export clearance (0694–                     controlled under new ECCN 1A607,                      acknowledgement and commitment to
                                           0122); and the Automated Export                          1B607, 1C607, 1D607, 1E607, 6B619,                    comply with the requirements of the
                                           System (0607–0152). The discussion,                      6D619, or 6E619 are now eligible under                EAR. However, the Administration
                                           below, is intended to provide a general                  certain provisions of License Exception               believes that complying with the
                                           overview of possible burden changes as                   STA and do not need a determination of                requirements of STA is likely to be less


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                                           49526              Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations

                                           burdensome than applying for licenses.                   regulations implementing the RFA—BIS                  of some license requirements; (ii) greater
                                           For example, under License Exception                     acknowledges that some small entities                 availability of license exceptions; (iii)
                                           STA, a single consignee statement can                    may be affected by this proposed rule.                simpler license application procedures;
                                           apply to an unlimited number of                                                                                and (iv) reduced or eliminated
                                                                                                    Economic Impact
                                           products, need not have an expiration                                                                          registration fees.
                                           date and need not be submitted to the                       The amendments set forth in this rule                 Moreover, ‘‘parts’’ and ‘‘components’’
                                           government in advance for approval.                      are part of the Administration’s ECR                  that are controlled under the ITAR
                                           Suppliers with regular customers can                     initiative, which seeks to revise the                 remain under ITAR control when
                                           tailor a single statement and assurance                  USML to be a positive control list—one                incorporated into foreign-made items,
                                           to match their business relationship,                    that does not use generic, catch-all                  regardless of the significance or
                                           rather than applying repeatedly for                      control text to describe items subject to             insignificance of the item. This
                                           licenses with every purchase order, to                   the ITAR—and to move some items that                  discourages foreign buyers from
                                           supply allied and, in some cases, U.S.                   the President has determined no longer                incorporating such U.S. content. The
                                           forces with routine replacement parts                    warrant control under the ITAR to                     availability of de minimis treatment
                                           and components.                                          control under the EAR and its CCL.                    under the EAR, for those items that are
                                              Even in situations in which a license                 Such items, along with certain military               no longer controlled under the ITAR,
                                           is required under the EAR, the burden                    items currently identified on the CCL                 may reduce the disincentive for foreign
                                           likely will be reduced, compared to the                  (most of which are identified on the                  manufacturers to purchase U.S.-origin
                                           previous license requirement under the                   WAML), will be controlled under new                   ‘‘parts’’ and ‘‘components,’’ a
                                           ITAR. In particular, license applications                ‘‘600 series’’ ECCNs on the CCL. In                   development that potentially would
                                           for exports of ‘‘technology’’ controlled                 addition, certain other items currently               mean greater sales for U.S. suppliers,
                                           by ECCN 1E607 or 6E619 are likely to                     on the CCL will move from existing                    including small entities.
                                           be less complex and burdensome than                      ECCNs to the new ‘‘600 series’’ ECCNs.                   Many exports and reexports of the
                                           the authorizations required to export                       This rule addresses certain                        Category XIV or Category XVIII articles
                                           ITAR-controlled ‘‘technology,’’ i.e.,                    dissemination, detection and protection               that are added to the CCL by this rule
                                           Manufacturing License Agreements and                     ‘‘equipment’’ and related articles                    (particularly, the ‘‘parts’’ and
                                           Technical Assistance Agreements.                         previously enumerated or otherwise                    ‘‘components’’ that are controlled under
                                              3. This rule does not contain policies                described in USML Category XIV                        new ECCN 1A607.x, 1B607.x, or
                                           with Federalism implications as that                     (Toxicological Agents, Including                      6B619.x) are now eligible for license
                                           term is defined under E.O. 13132.                        Chemical Agents, Biological Agents, and               exceptions that apply to exports to U.S.
                                              4. The Regulatory Flexibility Act                     Associated Equipment) and certain                     Government agencies, exports of ‘‘parts’’
                                           (RFA), as amended by the Small                           tooling, production ‘‘equipment,’’ test               and ‘‘components’’ for use as
                                           Business Regulatory Enforcement                          and evaluation ‘‘equipment,’’ test                    replacement parts, temporary exports
                                           Fairness Act of 1996 (SBREFA), 5 U.S.C.                  models and related articles previously                and limited value exports (for ECCN
                                           601 et seq., generally requires an agency                enumerated or otherwise described in                  1B607 and 6B619 items, only), as well
                                           to prepare an initial regulatory                         USML Category XVIII (Directed Energy                  as License Exception STA, thereby
                                           flexibility analysis (IRFA) for any rule                 Weapons). Most toxicological agents                   reducing the number of licenses that
                                           subject to the notice and comment                        (i.e., chemical and biological agents)                exporters will need to obtain for these
                                           rulemaking requirements under the                        and associated equipment and all                      items. License exceptions under the
                                           Administrative Procedure Act (5 U.S.C.                   Directed Energy Weapons (DEWs)                        EAR allow suppliers to send routine
                                           553) or any other statute, unless the                    systems ‘‘specially designed’’ or                     replacement parts and low level parts to
                                           agency certifies that the rule will not                  modified for military applications,                   NATO and other close allies and export
                                           have a significant economic impact on                    equipment ‘‘specially designed’’ or                   control regime partners for use by those
                                           a substantial number of small entities.                  modified to detect, identify or defend                governments and for use by contractors
                                           Under section 605(b) of the RFA,                         against such systems, and ‘‘specially                 building equipment for those
                                           however, if the head of an agency                        designed’’ ‘‘parts,’’ ‘‘components,’’                 governments or for the U.S. Government
                                           certifies that a rule will not have a                    ‘‘accessories’’ and ‘‘attachments’’ for               without having to obtain export
                                           significant impact on a substantial                      such systems or equipment remain on                   licenses. Under License Exception STA,
                                           number of small entities, the RFA does                   the USML. However, many other                         the exporter needs to furnish
                                           not require the agency to prepare a                      ‘‘parts’’ and ‘‘components’’ are now                  information about the item being
                                           regulatory flexibility analysis.                         subject to the EAR (as items described                exported to the consignee and obtain a
                                           Accordingly, pursuant to section 605(b),                 in ECCN 1A607.x, 1B607.x, or 6B619.x),                statement from the consignee that,
                                           the Chief Counsel for Regulation,                        unless specifically enumerated or                     among other things, will commit the
                                           Department of Commerce, has certified                    otherwise described on the USML.                      consignee to comply with the EAR and
                                           to the Chief Counsel for Advocacy,                       Many of these ‘‘parts’’ and                           other applicable U.S. laws. Because
                                           Small Business Administration, that this                 ‘‘components’’ are more likely, than the              such statements and obligations can
                                           proposed rule, if promulgated, will not                  USML articles described above, to be                  apply to an unlimited number of
                                           have a significant impact on a                           produced by small businesses. In                      transactions and have no expiration
                                           substantial number of small entities.                    addition, officials of the Department of              date, they will result in a net reduction
                                           The rationale for this certification is as               State have informed BIS that license                  in burden on transactions routinely
                                           follows.                                                 applications for such ‘‘parts’’ and                   approved by the government through
                                                                                                    ‘‘components’’ represent a high                       the license application process that the
                                           Number of Small Entities                                 percentage of the license applications                License Exception STA statements
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                                             Although BIS does not collect data on                  for USML articles reviewed by that                    would replace.
                                           the size of entities that apply for, and                 department. Changing the jurisdictional                  Even for exports and reexports for
                                           are issued, export licenses and is,                      status of certain Category XIV and                    which a license will be required, the
                                           therefore, unable to estimate the exact                  Category XVIII items will reduce the                  process for obtaining a license is
                                           number of small entities—as defined by                   burden on small entities (and other                   simpler and less costly under the EAR.
                                           the Small Business Administration’s                      entities as well) through: (i) Elimination            When a USML Category XIV or Category


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                                                              Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations                                           49527

                                           XVIII article is moved to the CCL, the                   line moves to the CCL, its ITAR                       ■ 2. Section 740.9 is amended by
                                           number of destinations for which a                       registration and registration fee                     revising paragraph (a)(11) to read as
                                           license is required remains unchanged.                   requirement will be eliminated.                       follows:
                                           However, the burden on the license
                                                                                                    Conclusion                                            § 740.9 Temporary imports, exports,
                                           applicant decreases because the
                                                                                                                                                          reexports, and transfers (in-country) (TMP).
                                           licensing procedure for CCL items is                        BIS expects that the changes to the
                                           simpler and more flexible than the                                                                             *       *    *     *    *
                                                                                                    EAR implemented by this rule will have                   (a) * * *
                                           licensing procedure for USML articles.                   a positive effect on all affected entities,
                                              Under the USML licensing procedure,                                                                            (11) Personal protective ‘‘equipment’’
                                                                                                    including small entities. While BIS                   classified under ECCN 1A613.c or .d
                                           an applicant must include a purchase                     acknowledges that this rule may have
                                           order or contract with its application.                                                                        and individual protection ‘‘equipment’’
                                                                                                    some cost impacts on small (and other)                classified under ECCN 1A607.f—(i)
                                           There is no such requirement under the                   entities, those costs are more than offset
                                           CCL licensing procedure. This                                                                                  Temporary exports, reexports, or in-
                                                                                                    by the benefits to the entities from the              country transfers to countries not
                                           difference gives the CCL applicant at                    licensing procedures under the EAR,
                                           least two advantages. First, the                                                                               identified in Country Group D:5. U.S.
                                                                                                    which are much less costly and less                   persons may temporarily export or
                                           applicant has a way to determine                         time consuming than the procedures
                                           whether the U.S. Government will                                                                               reexport one set of body armor classified
                                                                                                    under the ITAR. As noted above, any                   under ECCN 1A613.d (which may
                                           authorize the transaction before it enters               new burdens created by this rule will be
                                           into potentially lengthy, complex and                                                                          include one helmet classified under
                                                                                                    offset by a reduction in the number of                ECCN 1A613.c) or one set of chemical
                                           expensive sales presentations or                         items that will require a license,
                                           contract negotiations. Under the USML                                                                          or biological agent protective gear
                                                                                                    increased opportunities for use of                    classified under ECCN 1A607.f (which
                                           procedure, the applicant must caveat all
                                                                                                    license exceptions for exports to certain             may include one additional filter
                                           sales presentations with a reference to
                                                                                                    countries, simpler export license                     canister classified under ECCN 1A607.x)
                                           the need for government approval, and
                                                                                                    applications, reduced or eliminated                   to countries not identified in Country
                                           is more likely to engage in substantial
                                                                                                    registration fees and application of a de             Group D:5, provided that:
                                           effort and expense only to find that the
                                                                                                    minimis threshold for foreign-made                       (A) The items are with the U.S.
                                           government will reject the application.
                                                                                                    items incorporating U.S.-origin parts                 person’s baggage or effects, whether
                                           Second, a CCL license applicant need
                                                                                                    and components, all of which will                     accompanied or unaccompanied (but
                                           not limit its application to the quantity
                                                                                                    reduce the incentive for foreign buyers               not mailed); and
                                           or value of one purchase order or
                                                                                                    to design out or avoid U.S.-origin                       (B) The items are for that U.S.
                                           contract. It may apply for a license to
                                           cover all of its expected exports or                     content. Accordingly, the Chief Counsel               person’s exclusive use and not for
                                           reexports to a specified consignee over                  for Regulation, Department of                         transfer of ownership unless reexported
                                           the life of a license (normally four years,              Commerce, has certified to the Chief                  or transferred (in-country) to another
                                           but maybe longer if circumstances                        Counsel for Advocacy, Small Business                  U.S. person.
                                           warrant a longer period), thus reducing                  Administration, that this rule, if                       (ii) Temporary exports, reexports, or
                                           the total number of licenses for which                   implemented, would not have a                         transfers (in-country) to countries
                                           the applicant must apply.                                significant economic impact on a                      identified in Country Group D:5—(A)
                                              In addition, many applicants                          substantial number of small entities.                 Iraq. U.S. persons may temporarily
                                           exporting or reexporting items that this                 Accordingly, an initial regulatory                    export or reexport one set of body armor
                                           rule transfers from the USML to the CCL                  flexibility analysis is not required, and             classified under ECCN 1A613.d (which
                                           will realize cost savings through the                    none has been prepared.                               may include one helmet classified
                                           elimination of some or all registration                  List of Subjects                                      under ECCN 1A613.c) or one set of
                                           fees assessed under the USML’s                                                                                 chemical or biological agent protective
                                           licensing procedure. Currently, USML                     15 CFR Part 740                                       gear classified under ECCN 1A607.f
                                           applicants must pay to use the USML                                                                            (which may include one additional filter
                                                                                                      Administrative practice and                         canister classified under ECCN 1A607.x)
                                           licensing procedure even if they never
                                                                                                    procedure, Exports, Reporting and                     to Iraq, for personal use, provided that
                                           actually are authorized to export.
                                                                                                    recordkeeping requirements.                           the requirements in paragraph (a)(11)(i)
                                           Registration fees for manufacturers and
                                           exporters of articles on the USML start                  15 CFR Part 774                                       of this section are met. In addition, the
                                           at $2,250 per year, increase to $2,750 for                                                                     U.S. person must be affiliated with the
                                           organizations applying for one to ten                      Exports, Reporting and recordkeeping                U.S. Government and traveling on
                                           licenses per year and further increase to                requirements.                                         official business or traveling in support
                                           $2,750 plus $250 per license application                   For the reasons stated in the                       of a U.S. Government contract, or the
                                           (subject to a maximum of three percent                   preamble, parts 740 and 774 of the                    U.S. person must be traveling to Iraq
                                           of total application value) for those who                Export Administration Regulations (15                 under a direct authorization by the
                                           need to apply for more than ten licenses                 CFR parts 730–774) are amended as                     Government of Iraq and engaging in
                                           per year. Conversely, there are no                       follows:                                              activities for, on behalf of, or at the
                                           registration or application processing                                                                         request of, the Government of Iraq.
                                           fees for applications to export items                    PART 740—[AMENDED]                                    Documentation regarding direct
                                           listed on the CCL. Entities who applied                                                                        authorization from the Government of
                                           for licenses from the Department of                      ■ 1. The authority citation for 15 CFR                Iraq shall include an English translation.
                                           State, for the Category XIV or Category                  part 740 continues to read as follows:                   (B) Other countries in Country Group
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                                           XVIII items subject to this rulemaking                                                                         D:5. U.S. persons may temporarily
                                                                                                      Authority: 50 U.S.C. app. 2401 et seq.; 50
                                           that are removed from the USML and                       U.S.C. 1701 et seq.; 22 U.S.C. 7201 et seq.;
                                                                                                                                                          export or reexport one set of body armor
                                           added to the CCL, will find their                        E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp.,           classified under ECCN 1A613.d (which
                                           registration fees reduced if the number                  p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001          may include one helmet classified
                                           of USML licenses those entities need                     Comp., p. 783; Notice of August 7, 2015, 80           under ECCN 1A613.c) or one set of
                                           declines. If an entity’s entire product                  FR 48233 (August 11, 2015).                           chemical or biological agent protective


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                                           49528              Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations

                                           gear classified under ECCN 1A607.f                       the requirements in paragraph (h)(1) of                   License Requirements
                                           (which may include one additional filter                 this section are met. In addition, the                    Reason for Control: NS, RS, AT, UN
                                           canister classified under ECCN 1A607.x)                  U.S. person must be affiliated with the
                                           to countries in Country Group D:5                        U.S. Government and traveling on                                                       Country chart
                                           (except Iraq), for personal use, provided                official business or traveling in support                         Control(s)         (see Supp. No. 1
                                                                                                                                                                                            to Part 738)
                                           that the requirements in paragraph                       of a U.S. Government contract, or the
                                           (a)(11)(i) of this section are met, and the              U.S. person must be traveling to Iraq                     NS applies to entire    NS Column 1
                                           U.S. person is affiliated with the U.S.                  under a direct authorization by the                         entry.
                                           Government traveling on official                         Government of Iraq and engaging in                        RS applies to entire    RS Column 1
                                           business or is traveling in support of a                 activities for, on behalf of, or at the                     entry.
                                           U.S. Government contract.                                request of, the Government of Iraq.                       AT applies to entire    AT Column 1
                                              (iii) Items exported, reexported, or                  Documentation regarding direct                              entry.
                                                                                                                                                              UN applies to entire    See § 746.1(b) for UN
                                           transferred (in-country) under this                      authorization from the Government of                        entry.                  controls
                                           paragraph (a)(11), if not consumed or                    Iraq shall include an English translation.
                                           destroyed in the normal course of                                                                                  List Based License Exceptions (See Part 740
                                                                                                       (ii) Other countries in Country Group                  for a description of all license exceptions)
                                           authorized temporary use abroad, must                    D:5. U.S. persons may export, reexport,
                                           be returned to the United States or other                                                                          LVS: N/A
                                                                                                    or transfer (in-country) one set of body                  GBS: N/A
                                           country from which the items were so                     armor classified under ECCN 1A613.d
                                           transferred as soon as practicable but no                                                                          CIV: N/A
                                                                                                    (which may include one helmet                             Special Conditions for STA
                                           later than four years after the date of                  classified under ECCN 1A613.c) or one                     STA: Paragraph (c)(2) of License Exception
                                           export, reexport or transfer (in-country).               set of chemical or biological agent                         STA (§ 740.20(c)(2) of the EAR) may not be
                                           *       *    *      *    *                               protective gear classified under ECCN                       used for any item in 1A607.
                                           ■ 3. Section 740.14 is amended by                        1A607.f (which may include one                            List of Items Controlled
                                           revising paragraphs (h)(1) and (2) to                    additional filter canister classified                     Related Controls: (1) Vaccines identified in
                                           read as follows:                                         under ECCN 1A607.x) to countries in                          ECCN 1C991 are not controlled by this
                                                                                                    Country Group D:5 (except Iraq), for                         ECCN. (2) See 22 CFR 121.1 (USML),
                                           § 740.14   Baggage (BAG).                                personal use, provided that the                              Category XIV(h), for vaccines that are
                                           *       *    *    *     *                                requirements in paragraph (h)(1) of this                     subject to the ITAR. (3) Protection and
                                              (h) Special provisions: personal                      section are met, and the U.S. person is                      detection equipment and related items
                                           protective ‘‘equipment’’ classified under                affiliated with the U.S. Government                          identified in ECCN 1A004, 1A995, or
                                           ECCN 1A613.c or .d and individual                                                                                     2B351 are not controlled by this ECCN. (4)
                                                                                                    traveling on official business or is                         See 22 CFR 121.1 (USML), Category XIV(f),
                                           protection ‘‘equipment’’ classified under                traveling in support of a U.S.                               for dissemination, detection and protection
                                           ECCN 1A607.f—(1) Exports, reexports,                     Government contract.                                         equipment that is subject to the ITAR. (5)
                                           or in-country transfers to countries not                 *       *    *     *    *                                    See ECCN 0A919 for ‘‘military
                                           identified in Country Group D:5. U.S.                                                                                 commodities’’ located and produced
                                           persons may export, reexport, or transfer                PART 774—[AMENDED]                                           outside the United States that incorporate
                                           (in-country) one set of body armor                                                                                    more than a de minimis amount of US-
                                           classified under ECCN 1A613.d (which                                                                                  origin ‘‘600 series’’ controlled content.
                                                                                                    ■ 4. The authority citation for part 774                  Related Definitions: N/A
                                           may include one helmet classified                        continues to read as follows:                             Items:
                                           under ECCN 1A613.c) or one set of
                                                                                                      Authority: 50 U.S.C. app. 2401 et seq.; 50                 a. through d. [Reserved]
                                           chemical or biological agent protective                                                                               e. ‘‘Equipment’’ ‘‘specially designed’’ for
                                                                                                    U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C.
                                           gear classified under ECCN 1A607.f                       7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et                military use and for the dissemination of any
                                           (which may include one additional filter                 seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u);           of the riot control agents controlled in ECCN
                                           canister classified under ECCN 1A607.x)                  42 U.S.C. 2139a; 42 U.S.C. 6212; 43 U.S.C.                1C607.a.
                                           to countries not identified in Country                   1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22                  f. Protection ‘‘equipment’’ (including air
                                           Group D:5, provided that:                                U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O.                 conditioning units, protective coatings, and
                                              (i) The items are with the U.S.                       13026, 61 FR 58767, 3 CFR, 1996 Comp., p.                 protective clothing):
                                                                                                                                                                 f.1. Not controlled by USML Category
                                           person’s baggage or effects, whether                     228; E.O. 13222, 66 FR 44025, 3 CFR, 2001
                                                                                                                                                              XIV(f); and
                                           accompanied or unaccompanied (but                        Comp., p. 783; Notice of August 7, 2015, 80
                                                                                                                                                                 f.2. ‘‘Specially designed’’ for military use
                                           not mailed); and                                         FR 48233 (August 11, 2015).
                                                                                                                                                              and for defense against:
                                              (ii) The items are for that person’s                                                                               f.2.1. Materials specified by USML
                                           exclusive use and not for transfer of                    ■ 5. In Supplement No. 1 to part 774                      Category XIV (a) or (b); or
                                           ownership unless reexported or                           (the Commerce Control List), Category                        f.2.2. Riot control agents controlled in
                                           transferred (in-country) to another U.S.                 1—Special Materials and Related                           1C607.a.
                                           person.                                                  Equipment, Chemicals,                                        g. Decontamination ‘‘equipment’’:
                                                                                                    ‘‘Microorganisms,’’ and ‘‘Toxins,’’ add                      g.1. Not controlled by USML Category
                                              (2) Exports, reexports, or in-country                                                                           XIV(f); and
                                           transfers to countries identified in                     ECCN 1A607 between ECCNs 1A290
                                                                                                    and 1A613 to read as follows:                                g.2. ‘‘Specially designed’’ for military use
                                           Country Group D:5—(i) Iraq. U.S.                                                                                   and for decontamination of objects
                                           persons may export, reexport, or transfer                Supplement No. 1 to Part 774—the                          contaminated with materials controlled by
                                           (in-country) one set of body armor                       Commerce Control List                                     USML Category XIV(a) or (b).
                                           classified under ECCN 1A613.d (which                                                                                  h. ‘‘Equipment’’:
                                           may include one helmet classified                        *      *         *       *       *                           h.1. Not controlled by USML Category
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                                                                                                    1A607 Military dissemination ‘‘equipment’’                XIV(f); and
                                           under ECCN 1A613.c) or one set of
                                                                                                       for riot control agents, military detection               h.2. ‘‘Specially designed’’ for military use
                                           chemical or biological agent protective                     and protection ‘‘equipment’’ for                       and for the detection or identification of:
                                           gear classified under ECCN 1A607.f                          toxicological agents (including chemical,                 h.2.1. Materials specified by USML
                                           (which may include one additional filter                    biological, and riot control agents), and              Category XIV(a) or (b); or
                                           canister classified under ECCN 1A607.x)                     related commodities (see List of Items                    h.2.2. Riot control agents controlled by
                                           to Iraq, for personal use, provided that                    Controlled).                                           ECCN 1C607.a.



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                                                               Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations                                           49529

                                              i. [Reserved]                                            ECCN 0A919 for ‘‘military commodities’’            Special Conditions for STA
                                              j. ‘‘Equipment’’ ‘‘specially designed’’ to:              located and produced outside the United            STA: Paragraph (c)(2) of License Exception
                                              j.1. Interface with a detector, shelter,                 States that incorporate more than a de               STA (§ 740.20(c)(2) of the EAR) may not be
                                           vehicle, vessel, or aircraft controlled by the              minimis amount of US-origin ‘‘600 series’’           used for any item in 1C607.
                                           USML or a ‘‘600 series’’ ECCN; and                          controlled content.
                                              j.2. Collect and process samples of articles                                                                List of Items Controlled
                                                                                                    Related Definitions: N/A
                                           controlled in USML Category XIV(a) or (b).                                                                     Related Controls: (1) See ECCN 1A984 for
                                                                                                    Items:
                                              k. Medical countermeasures that are                                                                            controls on other riot control agents. (2)
                                           ‘‘specially designed’’ for military use                     a. ‘‘Equipment’’ ‘‘specially designed’’ for
                                                                                                                                                             See 22 CFR 121.1 (USML), Category XIV(b),
                                           (including pre- and post-treatments,                     the destruction of the chemical agents                   for modified biological agents and
                                           antidotes, and medical diagnostics) and                  controlled by USML Category XIV(a).                      biologically derived substances that are
                                           ‘‘specially designed’’ to counter chemical                  Note to 1B607.a: ECCN 1B607.a includes                subject to the ITAR. (3) See 22 CFR 121.1
                                           agents controlled by the USML Category                   controls over facilities ‘‘specially designed’’          (USML), Category XIV(g), for ITAR controls
                                           XIV(a).                                                  for destruction operations. This paragraph .a            on antibodies, recombinant protective
                                              Note: Examples of ‘‘equipment’’ controlled            does not control incinerators and ‘‘specially            antigens, polynucleotides, biopolymers or
                                           by this entry are barrier and non-barrier                designed’’ handling facilities or ‘‘specially            biocatalysts (including the expression
                                           creams and filled autoinjectors (e.g.,                                                                            vectors, viruses, plasmids, or cultures of
                                                                                                    designed’’ waste supply systems therefor.
                                           combopens where one injector contains 2–                                                                          specific cells used to produce them) that
                                                                                                       b. Test facilities and ‘‘equipment’’
                                           PAM and the other atropine) if ‘‘specially                                                                        are ‘‘specially designed’’ for use with
                                           designed’’ to counter such agents.                       ‘‘specially designed’’ for military
                                                                                                    certification, qualification, or testing of              articles controlled under USML Category
                                              l. through w. [Reserved]                                                                                       XIV(f). (4) See ECCN 0A919 for ‘‘military
                                              x. ‘‘Parts,’’ ‘‘components,’’ ‘‘accessories,’’        commodities controlled by ECCN 1A607.e, .f,
                                                                                                    .g, .h, or .j or by USML Category XIV(f),                commodities’’ located and produced
                                           and ‘‘attachments’’ that are ‘‘specially
                                                                                                                                                             outside the United States that incorporate
                                           designed’’ for a commodity controlled by                 except for XIV(f)(1).
                                                                                                                                                             more than a de minimis amount of US-
                                           ECCN 1A607.e, .f, .g, .h, or .j or for a defense            c. Tooling and ‘‘equipment’’ ‘‘specially
                                                                                                                                                             origin ‘‘600 series’’ controlled content.
                                           article controlled by USML Category XIV(f)               designed’’ for the ‘‘development,’’                   Related Definitions: N/A
                                           and that are not enumerated or otherwise                 ‘‘production,’’ repair, overhaul, or                  Items:
                                           described elsewhere in the USML.                         refurbishing of commodities controlled by
                                                                                                                                                             a. Tear gases and riot control agents
                                           ■ 6. In Supplement No. 1 to part 774                     ECCN 1A607.e, .f .g, .h, or .j or USML                including:
                                           (the Commerce Control List), Category                    Category XIV(f).                                         a.1. CA (Bromobenzyl cyanide) (CAS 5798–
                                                                                                       d. through w. [RESERVED]                           79–8);
                                           1—Special Materials and Related
                                                                                                       x. ‘‘Parts,’’ ‘‘components,’’ ‘‘accessories,’’        a.2. CS (o-Chlorobenzylidenemalononitrile
                                           Equipment, Chemicals,
                                                                                                    and ‘‘attachments’’ that are ‘‘specially              or o-Chlorobenzalmalononitrile) (CAS 2698–
                                           ‘‘Microorganisms,’’ and ‘‘Toxins,’’ add                  designed’’ for a commodity controlled by              41–1);
                                           ECCN 1B607 between ECCNs 1B234 and                       ECCN 1B607.b or .c, or for a defense article             a.3. CN (Phenylacyl chloride or w-
                                           1B608 to read as follows:                                controlled by USML Category XIV(f), and that          Chloroacetophenone) (CAS 532–27–4);
                                           1B607 Military test, inspection, and                     are not enumerated or otherwise described                a.4. CR (Dibenz-(b,f)-1,4-oxazephine) (CAS
                                              production ‘‘equipment’’ and related                  elsewhere in the USML.                                257–07–8);
                                              commodities ‘‘specially designed’’ for                                                                         a.5. Adamsite (Diphenylamine chloroarsine
                                              the ‘‘development,’’ ‘‘production,’’                  ■ 7. In Supplement No. 1 to part 774                  or DM) (CAS 578–94–9);
                                              repair, overhaul, or refurbishing of                                                                           a.6. N-Nonanoylmorpholine, (MPA) (CAS
                                                                                                    (the Commerce Control List), Category
                                              commodities identified in ECCN 1A607                                                                        5299–64–9);
                                              or 1C607, or defense articles                         1—Special Materials and Related                          a.7. Dibromodimethyl ether (CAS 4497–
                                              enumerated or otherwise described in                  Equipment, Chemicals,                                 29–4);
                                              USML Category XIV (see List of Items                  ‘‘Microorganisms,’’ and ‘‘Toxins,’’ add a                a.8. Dichlorodimethyl ether (ClCi) (CAS
                                              Controlled).                                          new ECCN 1C607 between ECCNs                          542–88–1);
                                                                                                    1C395 and 1C608 to read as follows:                      a.9. Ethyldibromoarsine (CAS 683–43–2);
                                           License Requirements
                                                                                                                                                             a.10. Bromo acetone (CAS 598–31–2);
                                           Reason for Control: NS, RS, AT, UN                       1C607 Tear Gases, Riot Control Agents and                a.11. Bromo methylethylketone (CAS 816–
                                                                                                       materials for the detection and                    40–0);
                                                                            Country chart              decontamination of chemical warfare                   a.12. Iodo acetone (CAS 3019–04–3);
                                                  Control(s)              (see Supp. No. 1             agents (see List of Items Controlled).                a.13. Phenylcarbylamine chloride (CAS
                                                                             to Part 738)                                                                 622–44–6);
                                                                                                    License Requirements
                                                                                                                                                             a.14. Ethyl iodoacetate (CAS 623–48–3);
                                           NS applies to entire       NS Column 1                   Reason for Control: NS, RS, AT, UN                       Note to 1C607.a: ECCN 1C607.a. does not
                                             entry.                                                                                                       control the following: formulations
                                           RS applies to entire       RS Column 1                                                    Country chart        containing 1% or less of CN or CS;
                                             entry.                                                        Control(s)              (see Supp. No. 1       individually packaged tear gases or riot
                                           AT applies to entire       AT Column 1                                                     to Part 738)        control agents for personal self-defense
                                             entry.                                                                                                       purposes that are controlled by ECCN 1A984;
                                           UN applies to entire       See § 746.1(b) for UN         NS applies to entire        NS Column 1               or active constituent chemicals, and
                                             entry.                     controls                      entry, except                                       combinations thereof, identified and
                                           List Based License Exceptions (See Part 740                1C607.a.10, .a.11,                                  packaged for food production or medical
                                           for a description of all license exceptions)               .a.12, and .a.14.                                   purposes.
                                                                                                    RS applies to entire        RS Column 1                  b. ‘‘Biopolymers,’’ not controlled by USML
                                           LVS: $1500                                                 entry.
                                           GBS: N/A                                                                                                       Category XIV(g) ‘‘specially designed’’ or
                                                                                                    AT applies to entire        AT Column 1               processed for the detection or identification
                                           CIV: N/A
                                                                                                      entry.                                              of chemical warfare agents specified by
                                           Special Conditions for STA                               UN applies to entire        See § 746.1(b) for UN     USML Category XIV(a), and the cultures of
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                                           STA: Paragraph (c)(2) of License Exception                 entry.                      controls                specific cells used to produce them.
                                             STA (§ 740.20(c)(2) of the EAR) may not be                                                                      c. ‘‘Biocatalysts,’’ and biological systems
                                                                                                    List Based License Exceptions (See Part 740
                                             used for any item in 1B607.                                                                                  therefor, not controlled by USML Category
                                                                                                    for a description of all license exceptions)
                                                                                                                                                          XIV(g) ‘‘specially designed’’ for the
                                           List of Items Controlled                                 LVS: N/A                                              decontamination or degradation of chemical
                                           Related Controls: (1) See ECCN 2B350 for                 GBS: N/A                                              warfare agents controlled in USML Category
                                             controls on certain incinerators. (2) See              CIV: N/A                                              XIV (a), as follows:



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                                           49530               Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations

                                             c.1. ‘‘Biocatalysts’’ ‘‘specially designed’’ for          containing reagents, algorithms,                      controlled by USML Category XIV(m)
                                           the decontamination or degradation of                       coefficients, software, libraries, spectral           include technical data directly related to
                                           chemical warfare agents controlled in USML                  databases, or alarm set point levels                  any equipment containing reagents,
                                           Category XIV(a) resulting from directed                     developed under U.S. Department of                    algorithms, coefficients, software, libraries,
                                           laboratory selection or genetic manipulation                Defense contract or funding for the                   spectral databases, or alarm set point levels
                                           of biological systems;                                      detection, identification, warning or                 developed under U.S. Department of
                                             c.2. Biological systems containing the                    monitoring of items controlled in                     Defense contract or funding for the
                                           genetic information specific to the                         paragraphs (a) or (b) of USML Category                detection, identification, warning or
                                           production of ‘‘biocatalysts’’ specified by                 XIV, or for chemical or biological agents             monitoring of items controlled in
                                           1C607.c.1, as follows:                                      specified by U.S. Department of Defense               paragraphs (a) or (b) of USML Category
                                             c.2.a. ‘‘Expression vectors;’’                            funding or contract. (2) See ECCN 0A919               XIV, or for chemical or biological agents
                                             c.2.b. Viruses; or                                        for ‘‘military commodities’’ located and              specified by U.S. Department of Defense
                                             c.2.c. Cultures of cells.                                 produced outside the United States that               funding or contract.
                                             Note to 1C607.b and .c: The cultures of                   incorporate more than a de minimis                 Related Definitions: N/A
                                           cells and biological systems are exclusive                  amount of US-origin ‘‘600 series’’                 Items:
                                           and these sub-items do not apply to cells or                controlled content.                                   a. ‘‘Technology’’ ‘‘required’’ for the
                                           biological systems for civil purposes, such as           Related Definitions: N/A                              ‘‘development,’’ ‘‘production,’’ operation,
                                           agricultural, pharmaceutical, medical,                   Items:                                                installation, maintenance, repair, overhaul,
                                           veterinary, environmental, waste                            a. ‘‘Software’’ ‘‘specially designed’’ for the     or refurbishing of items controlled by ECCN
                                           management, or in the food industry.                     ‘‘development,’’ ‘‘production,’’ operation, or        1A607, 1B607, 1C607 or 1D607.
                                             d. Chemical mixtures not controlled by                 maintenance of commodities controlled by                 Note to 1E607.a: ECCN 1E607.a includes
                                           USML Category XIV(f) ‘‘specially designed’’              ECCN 1A607, 1B607, or 1C607.                          ‘‘technology’’ ‘‘required’’ exclusively for the
                                           for military use for the decontamination of                 b. [RESERVED]                                      incorporation of ‘‘biocatalysts’’ controlled by
                                           objects contaminated with materials                                                                            ECCN 1C607.c.1 into military carrier
                                           specified by USML Category XIV(a) or (b).                ■ 9. In Supplement No. 1 to part 774                  substances or military material.
                                                                                                    (the Commerce Control List), Category                    b. [RESERVED]
                                           ■ 8. In Supplement No. 1 to part 774                     1—Special Materials and Related
                                           (the Commerce Control List), Category                    Equipment, Chemicals,                                 ■ 10. In Supplement No. 1 to Part 774
                                           1—Special Materials and Related                          ‘‘Microorganisms,’’ and ‘‘Toxins,’’ add a             (the Commerce Control List), Category
                                           Equipment, Chemicals,                                    new ECCN 1E607 between ECCNs                          6—Sensors and Lasers,’’ add a new
                                           ‘‘Microorganisms,’’ and ‘‘Toxins,’’ add                  1E355 and 1E608 to read as follows:                   ECCN 6B619 between ECCNs 6B108 and
                                           ECCN 1D607 between ECCNs 1D390                                                                                 6B995 to read as follows:
                                           and 1D608 to read as follows:                            1E607 ‘‘Technology’’ ‘‘required’’ for the
                                                                                                       ‘‘development,’’ ‘‘production,’’                   6B619 Test, inspection, and production
                                           1D607 ‘‘Software’’ ‘‘specially designed’’ for               operation, installation, maintenance,                 ‘‘equipment’’ and related commodities
                                              the ‘‘development,’’ ‘‘production,’’                     repair, overhaul, or refurbishing of                  ‘‘specially designed’’ for the
                                              operation, or maintenance of items                       items controlled by ECCN 1A607, 1B607,                ‘‘development,’’ ‘‘production,’’ repair,
                                              controlled by 1A607, 1B607 or 1C607                      1C607, or 1D607 (see List of Items                    overhaul, or refurbishing of
                                              (see List of Items Controlled).                          Controlled).                                          commodities enumerated or otherwise
                                                                                                                                                             described in USML Category XVIII (see
                                           License Requirements                                     License Requirements                                     List of Items Controlled)
                                           Reason for Control: NS, RS, AT, UN                       Reason for Control: NS, RS, AT, UN
                                                                                                                                                          License Requirements
                                                                            Country chart                                            Country chart        Reason for Control: NS, RS, AT, UN
                                                  Control(s)              (see Supp. No. 1                 Control(s)              (see Supp. No. 1
                                                                             to Part 738)                                             to Part 738)                                      Country chart
                                                                                                                                                                  Control(s)          (see Supp. No. 1
                                           NS applies to entire       NS Column 1                   NS applies to entire        NS Column 1                                              to Part 738)
                                             entry, except ‘‘soft-                                    entry, except
                                             ware’’ for                                               ‘‘technology’’ for                                  NS applies to entire     NS Column 1
                                             1C607.a.10, .a.11,                                       1C607.a.10, .a.11,                                    entry.
                                             .a.12, and .a.14.                                        .a.12, and .a.14                                    RS applies to entire     RS Column 1
                                           RS applies to entire       RS Column 1                     and for 1D607                                         entry.
                                             entry.                                                   ‘‘software’’ therefor.                              AT applies to entire     AT Column 1
                                           AT applies to entire       AT Column 1                   RS applies to entire        RS Column 1                 entry.
                                             entry.                                                   entry.                                              UN applies to entire     See § 746.1(b) for UN
                                           UN applies to entire       See § 746.1(b) for UN         AT applies to entire        AT Column 1                 entry.                   controls
                                             entry.                     controls                      entry.                                              License Exceptions
                                                                                                    UN applies to entire        See § 746.1(b) for UN
                                           List Based License Exceptions (See Part 740                                                                    LVS: $1500
                                                                                                      entry.                      controls
                                           for a description of all license exceptions)                                                                   GBS: N/A
                                           CIV: N/A                                                 List Based License Exceptions (See Part 740           CIV: N/A
                                           TSR: N/A                                                 for a description of all license exceptions)
                                                                                                                                                          Special Conditions for STA
                                                                                                    CIV: N/A
                                           Special Conditions for STA                                                                                     STA: Paragraph (c)(2) of License Exception
                                                                                                    TSR: N/A
                                           STA: Paragraph (c)(2) of License Exception                                                                       STA (§ 740.20(c)(2) of the EAR) may not be
                                             STA (§ 740.20(c)(2) of the EAR) may not be             Special Conditions for STA                              used for any item in 6B619.
                                             used for any item in 1D607.                            STA: Paragraph (c)(2) of License Exception
                                                                                                                                                          List of Items Controlled
                                                                                                      STA (§ 740.20(c)(2) of the EAR) may not be
                                           List of Items Controlled                                                                                       Related Controls: ‘‘Parts,’’ ‘‘components,’’
                                                                                                      used for any item in 1E607.
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                                           Related Controls: (1) ‘‘Software’’ directly                                                                      ‘‘accessories,’’ ‘‘attachments,’’ and
                                             related to articles enumerated or otherwise            List of Items Controlled                                associated systems or ‘‘equipment’’
                                             described in USML Category XIV is subject              Related Controls: Technical data directly               ‘‘specially designed’’ for defense articles
                                             to the ITAR (see 22 CFR § 121.1, Category                related to defense articles enumerated or             enumerated or otherwise described in
                                             XIV(m)). ‘‘Software’’ controlled by USML                 otherwise described in USML Category XIV              paragraphs (a) or (b) of USML Category
                                             Category XIV(m) includes ‘‘software’’                    are subject to the ITAR (see 22 CFR § 121.1,          XVIII are subject to the ITAR (see 22 CFR
                                             directly related to any equipment                        Category XIV(m)). Technical data                      121.1, Category XVIII(e)).



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                                                               Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Rules and Regulations                                        49531

                                           Related Definitions: N/A                                      commodities controlled by 6B619 or               13563, completed on August 17, 2011.
                                           Items:                                                        ‘‘software’’ controlled by 6D619.                The Department of State’s full plan can
                                              a. Tooling, templates, jigs, mandrels,                License Requirements                                  be accessed at http://www.state.gov/
                                           molds, dies, fixtures, alignment mechanisms,                                                                   documents/organization/181028.pdf.
                                           and test ‘‘equipment’’ not enumerated or                 Reason for Control: NS, RS, AT, UN
                                                                                                                                                          DATES: This Final rule is effective on
                                           otherwise described in USML Category XVIII
                                           and not elsewhere specified on the USML                                                   Country chart        December 31, 2016.
                                           that are ‘‘specially designed’’ for the                         Control(s)              (see Supp. No. 1       FOR FURTHER INFORMATION CONTACT: Mr.
                                                                                                                                      to Part 738)
                                           ‘‘development,’’ ‘‘production,’’ repair,                                                                       C. Edward Peartree, Director, Office of
                                           overhaul, or refurbishing of commodities                 NS applies to entire        NS Column 1               Defense Trade Controls Policy,
                                           controlled by USML Category XVIII.                         entry.                                              Department of State, telephone (202)
                                              b. through w. [Reserved]                              RS applies to entire        RS Column 1               663–2792; email
                                              x. ‘‘Parts,’’ ‘‘components,’’ ‘‘accessories,’’          entry.
                                           and ‘‘attachments’’ ‘‘specially designed’’ for a
                                                                                                                                                          DDTCPublicComments@state.gov.
                                                                                                    AT applies to entire        AT Column 1               ATTN: ITAR Amendment—USML
                                           commodity subject to control under                         entry.
                                           paragraph .a of this ECCN and not                                                                              Categories XIV and XVIII.
                                                                                                    UN applies to entire        See § 746.1(b) for UN
                                           enumerated or otherwise described in USML                  entry.                      controls                SUPPLEMENTARY INFORMATION: The
                                           Category XVIII and not elsewhere specified                                                                     Directorate of Defense Trade Controls
                                           on the USML.                                             License Exceptions                                    (DDTC), U.S. Department of State,
                                                                                                    CIV: N/A                                              administers the International Traffic in
                                           ■ 11. In Supplement No. 1 to Part 774
                                                                                                    TSR: N/A                                              Arms Regulations (ITAR) (22 CFR parts
                                           (the Commerce Control List), Category
                                           6—Sensors and Lasers,’’ add a new                        Special Conditions for STA                            120–130). The items subject to the
                                           ECCN 6D619 between ECCNs 6D201                           STA: Paragraph (c)(2) of License Exception
                                                                                                                                                          jurisdiction of the ITAR, i.e., ‘‘defense
                                           and 6D991 to read as follows:                              STA (§ 740.20(c)(2) of the EAR) may not be          articles,’’ are identified on the ITAR’s
                                                                                                      used for any item in 6E619.                         U.S. Munitions List (USML) (22 CFR
                                           6D619 ‘‘Software’’ ‘‘specially designed’’ for                                                                  121.1). With few exceptions, items not
                                              the ‘‘development,’’ ‘‘production,’’                  List of Items Controlled
                                              operation or maintenance of
                                                                                                                                                          subject to the export control jurisdiction
                                                                                                    Related Controls: Technical data directly             of the ITAR are subject to the
                                              commodities controlled by 6B619.                         related to articles enumerated or otherwise        jurisdiction of the Export
                                           License Requirements                                        described in USML Category XVIII are               Administration Regulations (‘‘EAR,’’ 15
                                                                                                       subject to the ITAR (See 22 CFR 121.1,
                                           Reason for Control: NS, RS, AT, UN                                                                             CFR parts 730–774, which includes the
                                                                                                       Category XVIII(f)).
                                                                                                    Related Definitions: N/A                              Commerce Control List (CCL) in
                                                                            Country chart                                                                 Supplement No. 1 to Part 774),
                                                  Control(s)              (see Supp. No. 1          Items:
                                                                             to Part 738)              The list of items controlled is contained in       administered by the Bureau of Industry
                                                                                                    the ECCN heading.                                     and Security (BIS), U.S. Department of
                                           NS applies to entire       NS Column 1                                                                         Commerce. Both the ITAR and the EAR
                                             entry.                                                 Kevin J. Wolf,                                        impose license requirements on exports
                                           RS applies to entire       RS Column 1                   Assistant Secretary for Export                        and reexports. Items not subject to the
                                             entry.                                                 Administration.                                       ITAR or to the exclusive licensing
                                           AT applies to entire       AT Column 1                   [FR Doc. 2016–17506 Filed 7–27–16; 8:45 am]           jurisdiction of any other set of
                                             entry.                                                 BILLING CODE 3510–33–P                                regulations are subject to the EAR.
                                           UN applies to entire       See § 746.1(b) for UN
                                             entry.                     controls
                                                                                                                                                            All references to the USML in this
                                                                                                                                                          rule are to the list of defense articles
                                           License Exceptions                                       DEPARTMENT OF STATE                                   controlled for the purpose of export or
                                           CIV: N/A                                                                                                       temporary import pursuant to the ITAR,
                                           TSR: N/A                                                 22 CFR Part 121                                       and not to the defense articles on the
                                           Special Conditions for STA                               [Public Notice: 9466]                                 USML that are controlled by the Bureau
                                                                                                                                                          of Alcohol, Tobacco, Firearms and
                                           STA: Paragraph (c)(2) of License Exception               RIN 1400–AD03
                                             STA (§ 740.20(c)(2) of the EAR) may not be
                                                                                                                                                          Explosives (ATFE) for the purpose of
                                             used for any item in 6D619.                                                                                  permanent import under its regulations.
                                                                                                    Amendment to the International Traffic                See 27 CFR part 447. Pursuant to section
                                           List of Items Controlled                                 in Arms Regulations: Revision of U.S.                 38(a)(1) of the Arms Export Control Act
                                           Related Controls: ‘‘Software’’ directly related          Munitions List Categories XIV and XVIII               (AECA), all defense articles controlled
                                              to articles enumerated or otherwise                   AGENCY:    Department of State.                       for export or import are part of the
                                              described in USML Category XVIII is                                                                         USML under the AECA. The list of
                                              subject to the ITAR (See 22 CFR 121.1,
                                                                                                    ACTION:   Final rule.
                                                                                                                                                          defense articles controlled by ATFE for
                                              Category XVIII(f)).                                   SUMMARY:    As part of the President’s
                                           Related Definitions: N/A
                                                                                                                                                          the purpose of permanent import is the
                                                                                                    Export Control Reform effort, the                     U.S. Munitions Import List (USMIL).
                                           Items:
                                                                                                    Department of State amends the                        The transfer of defense articles from the
                                              The list of items controlled is contained in
                                                                                                    International Traffic in Arms                         ITAR’s USML to the EAR’s CCL does
                                           the ECCN heading.
                                                                                                    Regulations (ITAR) to revise Categories               not affect the list of defense articles
                                           ■ 12. In Supplement No. 1 to Part 774                    XIV (toxicological agents, including                  controlled on the USMIL.
                                           (the Commerce Control List), Category                    chemical agents, biological agents, and
                                           6—Sensors and Lasers,’’ add ECCN                         associated equipment) and XVIII                       Revision of Category XIV
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                                           6E619 between ECCNs 6E202 and 6E990                      (directed energy weapons) of the U.S.                   This final rule revises USML Category
                                           to read as follows:                                      Munitions List (USML) to describe more                XIV, covering toxicological agents,
                                           6E619 ‘‘Technology’’ ‘‘required’’ for the                precisely the articles warranting control             including chemical agents, biological
                                              ‘‘development,’’ ‘‘production,’’                      on the USML. The revisions contained                  agents, and associated equipment. The
                                              operation, installation, maintenance,                 in this rule are part of the Department               revisions are undertaken in order to
                                              repair, overhaul or refurbishing of                   of State’s retrospective plan under E.O.              more accurately describe the articles


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Document Created: 2016-07-28 01:47:48
Document Modified: 2016-07-28 01:47:48
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesThis rule is effective December 31, 2016.
ContactFor questions regarding dissemination, detection and protection ``equipment'' and related items that are controlled under new ECCNs 1A607, 1B607, 1C607, 1D607, and 1E607, contact Richard P. Duncan, Ph.D., Director, Chemical and Biological Controls Division, Office of Nonproliferation and Treaty Compliance, Bureau of Industry and Security, telephone: (202) 482-3343, email: [email protected]
FR Citation81 FR 49517 
RIN Number0694-AF52
CFR Citation15 CFR 740
15 CFR 774
CFR AssociatedAdministrative Practice and Procedure; Exports and Reporting and Recordkeeping Requirements

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