82 FR 50511 - Clarifications to the Export Administration Regulations for the Use of License Exceptions
DEPARTMENT OF COMMERCE
Bureau of Industry and Security Federal Register Volume 82, Issue 210 (November 1, 2017)
Bureau of Industry and Security
Federal Register Volume 82, Issue 210 (November 1, 2017)
| Page Range | 50511-50517 | |
| FR Document | 2017-23712 |
[Federal Register Volume 82, Number 210 (Wednesday, November 1, 2017)] [Rules and Regulations] [Pages 50511-50517] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-23712] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE Bureau of Industry and Security 15 CFR Part 740 [Docket No. 160303181-6181-01] RIN 0694-AG80 Clarifications to the Export Administration Regulations for the Use of License Exceptions AGENCY: Bureau of Industry and Security, Commerce. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: This final rule makes clarifications to the Export Administration Regulations (EAR) to provide guidance based on existing agency understanding and practice on the use of two license exceptions. Specifically, this final rule makes three clarifications to License Exception Governments, International Organizations, International Inspections under the Chemical Weapons Convention, and the International Space Station (GOV) and adds five notes, along with making other minor clarifications, to License Exception Strategic Trade Authorization (STA). These revisions respond to questions BIS has received about the use of these two EAR license exceptions and provide the general public answers to frequently asked questions based on existing agency interpretive practice. Therefore, the clarifications in this final rule do not change the EAR requirements for the use of the license exceptions but are intended to assist exporters new to the EAR. DATES: This rule is effective November 1, 2017. FOR FURTHER INFORMATION CONTACT: Timothy Mooney, Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-2440, Fax: (202) 482-3355, Email: [email protected]. SUPPLEMENTARY INFORMATION: Background This final rule revises part 740 of the Export Administration Regulations (EAR) by clarifying two license exceptions based on existing agency understanding and practice. To provide the general public with guidance on using these license exceptions, this final rule makes three clarifications to License Exception Governments, International Organizations, International Inspections under the Chemical Weapons Convention, and the International Space Station (GOV) and adds five notes, along with making other minor clarifications, to License Exception Strategic Trade Authorization (STA). These changes are described below under sections: (A) Clarifications for License Exception GOV and (B) Clarifications for License Exception STA. With these revisions, BIS is not changing the EAR requirements for the use of these license exceptions. Instead, the agency seeks to provide sufficient guidance within the EAR to answer questions the agency frequently receives from the public as to the application of the two license exceptions. These clarifications should be particularly helpful to exporters who are new to the EAR, including exporters of items that have recently moved to the EAR from the International Traffic in Arms Regulations (ITAR) as a result of the United States Munitions List to the Commerce Control List review process. (A) Clarifications for License Exception GOV This final rule revises License Exception GOV, Sec. 740.11, to make three clarifications. Specifically, this final rule revises paragraph (b)(2)(ii); adds a new note to paragraph (b)(2)(iii)(C); and adds a new note to paragraph (c)(1). These clarifications do not change the applicability or any other requirements of License Exception GOV and are limited to providing guidance on how BIS interprets these paragraphs of License Exception GOV in response to questions from the public. Paragraph (b)(2)(ii). The final rule revises paragraph (b)(2)(ii) of License Exception GOV to add two sentences to clarify the applicability of the term `contractor support personnel,' which is defined in paragraph (b)(2)(ii) of License Exception GOV. BIS has received questions regarding the locations where `contractor support personnel' must work and the level of U.S. Government supervision needed for personnel to be considered `contractor support personnel.' The first sentence that this final rule adds to paragraph (b)(2)(ii) clarifies that `contractor support personnel' is limited to those individuals who are providing such support within a U.S. Government owned or operated facility or under the direct supervision of a U.S. government employee. This final rule adds a parenthetical phrase to clarify that a U.S. government employee is an individual directly employed by the U.S. Government. As an example of persons directly employed who would meet the `contractor support personnel' definition, BIS provides the following: A U.S. Government agency plans to conduct a study of soy bean cultivation in Malaysia and the U.S. Government agency team will include three `contractor support personnel' providing scientific support to the U.S. Government agency's study. These three `contractor support personnel' will work at the U.S. Embassy in Malaysia to process and analyze agricultural field data being gathered by U.S. Government personnel as part of a study. These individuals meet the definition of contractor support personnel in paragraph (b)(2)(ii) because they will be working within a U.S. Government-owned and operated facility (a U.S embassy) and providing a form of support (scientific support) that is identified in the term's definition. For an example of persons not directly employed who would be outside the scope of the `contractor support personnel' definition, BIS provides the following: A U.S. Government agency is evaluating the possibility of providing a grant to a company in Kenya that seeks financing for building three windmills. To evaluate the feasibility of providing a grant, this U.S. Government agency has entered into a contract with a U.S. company that provides feasibility analysis for windmill locations. To conduct the feasibility analysis study, [[Page 50512]] the contractor will need to have certain items exported to it in Kenya. Under this example, the contractor, including personnel of the contractor, would not constitute `contractor support personnel' because it does not meet the definition of `contractor support personnel.' Although it is providing scientific analysis for this U.S. Government agency under a contract, the analysis is not being conducted at a U.S. Government facility or being conducted under the direct supervision of an individual directly employed by the U.S. Government agency. The second sentence this final rule adds to paragraph (b)(2)(ii) clarifies that private security contractors are not `contractor support personnel' for purposes of paragraph (b)(2)(ii). This new sentence clarifies that although in certain cases private security contractors may work within a U.S. Government owned or operated facility, such contractors do not provide administrative, managerial, scientific or technical support under contract to the U.S. Government, as required under the definition of `contractor support personnel.' Note 1 to paragraph (b)(2)(iii)(C). Paragraph (b)(2)(iii)(C) of License Exception GOV authorizes the temporary export, reexport, or transfer (in-country) of an item in support of any foreign assistance or sales program authorized by law and subject to the control of the President by other means, when the criteria specified in this paragraph are met. This final rule adds a new note to paragraph (b)(2)(iii)(C) of License Exception GOV to clarify how BIS interprets the meaning of the term `temporary' for purposes of this paragraph. The new note clarifies that within the context of the authorization available in paragraph (b)(2)(iii)(C), `temporary' means that within no more than four years from the date of an item's initial export, reexport, or transfer (in- country), it must be returned to the exporter, reexporter or transferor or its disposition otherwise authorized (e.g., pursuant to a license or another license exception) in accordance with the EAR. As a conforming change to this new note to paragraph (b)(2)(iii)(C), this final rule revises the introductory text of paragraph (b)(2)(iii)(C) to add single quotes around the term `temporary.' Note 1 to paragraph (c)(1). Paragraph (c) of License Exception GOV authorizes certain exports, reexports, and transfers (in-country) to agencies of cooperating governments or agencies of the North Atlantic Treaty Organization (NATO). Paragraph (c)(1) defines `Agency of a cooperating government' for purposes of this paragraph of License Exception GOV. This final rule adds a new note to paragraph (c)(1) of License Exception GOV to clarify that civil intergovernmental organizations in which the membership is limited to national governments that are `cooperating governments' are also considered `cooperating governments' for purposes of paragraph (c)(1). The new note provides an example of a civil intergovernmental organization, the European Space Agency (ESA), which BIS has determined to fall within the scope of the definition of `cooperating governments.' ESA (and other civil intergovernmental organizations) are considered `cooperating governments' because their membership is limited to `cooperating governments'--meaning that if an export was made directly to any of organization's national government members, License Exception GOV would be available. On this basis, BIS does not exclude exports, reexports and transfers (in-country) made to ESA (and any other civil intergovernmental organization whose members are `cooperating governments') from License Exception GOV. The purpose of this paragraph (c)(1) is to clarify that the fact that two or more `cooperating governments' are working together does not change the policy rationale for why the United States Government intends to authorize such exports, reexports, and transfers (in-country). However, this final rule adds a second sentence to the note to paragraph (c)(1) to clarify that if the membership of the civil intergovernmental organization involves any national governments or other organizations that are not `cooperating governments,' such civil intergovernmental organizations are not considered cooperating governments for purposes of paragraph (c)(1), and a third sentence to provide three illustrative examples of civil intergovernmental organizations that are excluded based on this criteria. This third sentence also clarifies that this exclusion applies even when some or all of the `cooperating governments' are members of the civil intergovernmental organization. This final rule provides the European Aviation Safety Agency (EASA), the United Nations, and the World Bank as three examples of civil intergovernmental organizations that include members that are `cooperating governments' along with members that are not `cooperating governments,' with the inclusion of the latter group meaning that these civil intergovernmental organizations are not within the scope of paragraph (c)(1). (B) Clarifications for License Exception STA This final rule revises License Exception STA, Sec. 740.20, to add five new clarification notes, along with making other minor clarifications. Specifically, this final rule adds the following notes to License Exception STA: Note 1 to paragraph (a) for applicability of transfers (in-country) under STA; Note 1 to paragraphs (b)(2) and (b)(3) for staying within the scope of the original authorization; Note 1 to paragraph (d)(2) for multiple consignees on a single prior consignee statement and minor clarifications to the text of paragraph (d)(2); and Note 2 to paragraph (d)(2) for exclusion for government consignees from prior consignee statement; and Note 1 to paragraph (d)(3) for exclusion for intangible exports, reexports or transfers (in-country). These new notes, along with the other minor clarifications, do not change the applicability or any other requirements of License Exception STA and simply provide guidance on how BIS interprets these provisions of License Exception STA. These new notes are consistent with the agency's responses to questions at numerous outreach events and in the Frequently Asked Questions (FAQs) available on the agency's Web site. Note 1 to paragraph (a) for applicability of transfers (in-country) under STA. This final rule adds a new note to paragraph (a) to License Exception STA. This new note provides guidance on when License Exception STA may be used to authorize transfers (in-country) in response to questions from the public about its applicability. The purpose of this note to paragraph (a) is to explain why transfers (in- country) are included in License Exception STA and describe how this term is applied in the context of this license exception. Under the EAR, outside of prohibited end uses and end users and ``knowing'' violations, the transactions where most transferors will need an EAR authorization is when the original export, reexport, or transfer (in- country) was authorized under a BIS license and the consignee will make a transfer (in-country) that goes outside the scope of the license. License Exception STA would be available to authorize such transfers (in-country), provided all the applicable requirements of License Exception STA were met, such as obtaining a prior consignee statement from the consignee in-country. If the transfer (in-country) did not require an authorization, such as for exports received under License Exception STA, an authorization is not [[Page 50513]] required for subsequent transfers (in-country), provided no prohibited end uses, end-users or ``knowing'' violations were involved in the transfer (in-country). These nuances on the application of transfers (in-country) are sometimes not well understood because some people incorrectly assume that the way to determine license requirements for exports and reexports is the same way to determine license requirements for transfers (in-country). The note to paragraph (a) also specifies that when a transfer (in-country) is not being made under STA, then the STA requirements do not apply. The note to paragraph (a) includes a parenthetical phrase with a reference to see the note to paragraphs (b)(2) and (b)(3) of License Exception STA for requirements specific to staying within the scope of the original License Exception STA authorization, which is described in more detail below. Note 1 to paragraphs (b)(2) and (b)(3). This final rule adds a new Note 1 to paragraphs (b)(2) and (b)(3) to License Exception STA. This new note to paragraphs (b)(2) and (b)(3) clarifies that for ``600 series'' items authorized under License Exception STA, the items must be provided to an eligible ultimate end user, such as a Country Group A:5 military, to stay in compliance with the original authorization. The new note refers to this concept as `completing the chain,' which means that regardless of how many times the ``600 series'' item is transferred (in-country) or whether the ``600 series'' item is incorporated into higher level assemblies or other items or not, the ``600 series'' item must ultimately be provided to an eligible ultimate end user or be otherwise authorized under the EAR. Lastly, the new note to paragraphs (b)(2) and (b)(3) clarifies that because the other items eligible for authorization under License Exception STA (i.e., 9x515 and other non-600 series ECCNs) do not include the ``600 series'' requirements specific to ultimate end user, the `completing the chain' concept does not apply to 9x515 and other non-600 series Export Control Classification Numbers (ECCNs) authorized under License Exception STA. However, the original export, reexport, or transfer (in-country) must be completed within the terms and conditions of the original License Exception STA authorization. As noted above, this clarification is specific to existing EAR requirements; the new note to paragraphs (b)(2) and (b)(3) does not change any License Exception STA requirements but rather provides guidance on how these existing EAR requirements are applied in the context of License Exception STA, in particular as it relates to the ``600 series.'' Adding greater specificity to paragraph (d)(1). This final rule revises paragraph (d)(1) (Requirement to furnish Export Control Classification Number) of License Exception STA to remove the undefined terms ``shipment'' in four places and ``shipped'' in two places and add in their place the defined terms ``export'' in paragraph (d)(1)(i) and ``reexport or transfer (in-country)'' in paragraph (d)(1)(ii). In the context of paragraph (d)(1), the requirement to furnish the ECCN is intended to apply to all exports, reexports, or transfers (in-country) under License Exception STA, and is consistent with how the agency has interpreted this paragraph. This final rule clarifies the intent of this paragraph (d)(1) by removing the undefined term ``shipment'' and adding in its place defined terms that provide greater specificity on the intended scope of this paragraph (d)(1). This final rule makes similar clarifications as described below to paragraphs (d)(2) and (d)(3) to improve the clarity of these paragraphs. Paragraph (d)(2) for multiple consignees on a single prior consignee statement. This final rule revises paragraph (d)(2) (Prior Consignee Statement) of License Exception STA to make four clarifications to paragraph (d)(2): Adding greater specificity to the introductory text as it relates to the undefined term ``shipment;'' adding two new notes to paragraph (d)(2); clarifying the term `description'' in paragraph (d)(2)(i); and making certain terms plural in the text. Because of past issues with the incorporation of revisions to paragraph (d)(2), in particular some of the undesignated text included in that paragraph, in this final rule BIS is revising the entire paragraph to ensure the intended revisions are incorporated correctly. The clarifications to paragraph (d)(2) are described in the next four paragraphs. Similar to the changes described above for paragraph (d)(1), this final rule revises the introductory text of paragraph (d)(2) to remove the undefined term ``shipment'' in one place and the undefined term ``shipping'' in another, and add in their place the defined terms ``exports, reexports, or transfers (in-country).'' This final rule does not remove the undefined term ``shipment'' in the two additional instances where the term is used in the introductory text of paragraph (d)(2), which specifies the requirement to maintain a log or other record. This is because the requirement to maintain a log or other record is not intended to apply to intangible (i.e., electronic or in an otherwise intangible form) exports, reexports, or transfers (in- country). BIS adds a sentence clarifying this for purposes of License Exception STA in this final rule. BIS has based this existing agency practice and interpretation on the use of the term ``shipment'' when referring to a log or other record to mean that the original intent of this License Exception STA requirement was not to apply the requirement to intangible exports, reexports, or transfers (in-country). Because of the frequency at which intangible exports, reexports, or transfers (in- country) often occur, it would have been impractical to impose a log or other record requirement for such exports, reexports or transfers (in- country). For example, for a technical work team located at a U.S. parent company that is collaborating with a technical work team in the United Kingdom (a Country Group A:5 Country), there may be dozens or hundreds of intangible exports that occur during a teleconference or telephone call that are authorized under License Exception STA. Although the party making the intangible export, reexport, or transfer (in-country) and the party receiving the technology or software are responsible for complying with the other requirements of License Exception STA, which are suitable for keeping an intangible export, reexport, or transfer (in-country) within the scope of License Exception STA, the party making the intangible export, reexport, or transfer (in-country) is not burdened with trying to keep a log or other record, the requirement for which was appropriate and intended for a tangible shipment but was not intended for intangible exports, reexports, or transfers (in-country). The changes included in this rule will make this interpretation clearer to the public. This new sentence also specifies that an exporter, reexporter, or transferor is required, prior to making any export, reexport or transfer (in-country), including those that are intangible, to ensure that a prior consignee statement has been obtained pursuant to the requirements of paragraph (d)(2). This final rule also adds a parenthetical phrase to include a cross reference to Note 1 to paragraph (d)(3), which provides additional guidance on intangible exports, reexports and transfers (in- country) under License Exception STA. BIS also has posted on the BIS Web site best practices for managing intangible exports, reexports, and transfers (in-country) under the EAR. BIS encourages any party involved in intangible exports, reexports, or [[Page 50514]] transfers (in-country) to review this guidance. This final rule adds a new Note 1 to paragraph (d)(2) to clarify an existing BIS policy that allows for multiple consignees to be listed on a single prior consignee statement, provided certain requirements are met. This new Note 1 to paragraph (d)(2) addresses scenarios when multiple consignees who form a network engaged in a production process (or other type of collaborative activity, such as joint development) will be receiving items under License Exception STA. In such cases, it is existing BIS policy to allow the use of a single consignee statement identifying multiple consignees, provided all the applicable requirements of License Exception STA are met, including those specified in paragraph (d)(2). This final rule revises paragraph (d)(2)(i) by adding the term ``GENERAL'' before the term ``DESCRIPTION'' and adding the parenthetical phrase, ``aircraft parts and components classified under ECCN 9A610,'' to provide an example of the level of specificity that BIS intends for the description on the prior consignee statement. BIS has received questions from the public asking whether the term ``description'' used in paragraph (d)(2)(i) is intended to mean that the prior consignee must include the make and model number of each part or component that the consignee would receive under License Exception STA. The term ``DESCRIPTION,'' as used in paragraph (d)(2)(i), does not require that level of specificity, as clarified by the changes in this final rule. Lastly, specific to the clarifications to paragraph (d)(2), this final rule adds an ``(s)'' to the end of the term ``CONSIGNEE'' in the introductory text of paragraph (d)(2) and adds an ``(S)'' to the end of the terms ``TITLE,'' ``NAME,'' and ``PERSON'' in the undesignated text at the end of paragraph (d)(2)(viii). These changes, along with the new Note 1 to paragraph (d)(2), make explicit that it is permissible to list multiple consignees on a single consignee statement. Note 2 to paragraph (d)(2) for exclusion for government consignees from prior consignee statement. This final rule adds Note 2 to paragraph (d)(2) to exclude Country Group A:5 and A:6 government consignees from the requirement to sign or provide a prior consignee statement to an exporter, reexporter, or transferor under License Exception STA. In particular, for ``600 series'' items authorized under License Exception STA for Country Group A:5 governments, requiring government end users to provide a prior consignee statement makes little sense, given that the goal of License Exception STA is to get these ``600 series'' items to Country Group A:5 governments for their ultimate end use (one of the three permissible ultimate end uses for ``600 series'' items authorized under License Exception STA). In addition, this existing interpretation of agency practice takes into account that under the other likely license exception under which such governments may receive items, License Exception GOV, such a signature on a prior consignee statement is not required. This is an existing interpretation of agency practice that BIS is making explicit in the regulatory text. BIS has provided similar guidance to the public, including to Country Group A:5 and A:6 governments. Note 1 to paragraph (d)(3) for exclusion for intangible exports, reexports or transfers (in-country). This final rule adds a new Note 1 to paragraph (d)(3) to specify that intangible exports, reexports, and transfers (in-country) made under License Exception STA are not subject to the notification requirements of paragraph (d)(3). The new note to paragraph (d)(3) also specifies that the requirements of paragraph (d)(1) and (d)(2) still apply, including to intangible exports, reexports, or transfers (in-country) made under License Exception STA. The specification in the new note to paragraph (d)(3) is consistent with the requirement discussed above for the new Note 1 to paragraphs (b)(2) and (b)(3) that any export, reexport or transfer (in-country) made under STA must stay within the scope of the authorization. As noted above in the explanation of the changes to paragraph (d)(2), BIS has posted on the BIS Web site best practices for managing intangible exports, reexports, and transfers (in-country) under the EAR. BIS encourages any party involved in intangible exports, reexports, or transfers (in-country) to review this guidance. Export Administration Act of 1979 Although the Export Administration Act of 1979 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 15, 2017, 82 FR 39005 (August 16, 2017), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act. BIS continues to carry out the provisions of the Export Administration Act of 1979, 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 final rule has been determined to be not significant for purposes of Executive Order 12866. This rule is not an Executive Order 13771 regulatory action because this rule is not significant under Executive Order 12866. 2. Notwithstanding any other provision of law, no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves collections previously approved by OMB under control number 0694-0088, Simplified Network Application Processing System, which includes, among other things, license applications and carries a burden estimate of 43.8 minutes for a manual or electronic submission. Total burden hours associated with the PRA and OMB control number 0694-0088 are not expected to increase as a result of this rule. You may send comments regarding the collection of information associated with this rule, including suggestions for reducing the burden, to Jasmeet K. Seehra, Office of Management and Budget (OMB), by email to [email protected], or by fax to (202) 395-7285. 3. This rule does not contain policies with Federalism implications as that term is defined under E.O. 13132. 4. The Department finds that there is good cause under 5 U.S.C. 553(b)(B) to waive the provisions of the Administrative Procedure Act requiring prior notice and the opportunity for public comment because they are either unnecessary or contrary to the public interest. BIS is making the changes to its regulations described above to provide guidance on existing interpretations of [[Page 50515]] current EAR provisions, and thus prior notice and the opportunity for public comment is contrary to the public interest. The guidance included in this final rule has been provided to many members of the public in the past (e.g., those persons that have attended BIS outreach events, asked these types of application questions to BIS by phone, email or in writing, or read certain FAQs posted on the BIS Web site dealing with these EAR provisions). Importantly, this is also the same guidance that would be provided to any other member of the public that asked the same questions to BIS dealing these EAR provisions. BIS's purpose with publishing this final rule is not to change the application of these provisions but to more efficiently communicate the existing agency guidance and interpretation of these provisions by clarifying the regulations. This will benefit members of the public because they will be able to more easily understand and apply these provisions, which are consistent with past agency guidance and interpretations provided to other members of the public. BIS finds good cause to waive the 30-day delay in effectiveness under 5 U.S.C. 553(d)(3). This rule does not change the requirements or obligations of persons under the EAR, so a 30-day delay in effectiveness is not needed. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for these amendments by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., are not applicable. List of Subjects in 15 CFR Part 740 Administrative practice and procedure, Exports, Reporting and recordkeeping requirements. Accordingly, part 740 of the Export Administration Regulations (15 CFR parts 730-774) is 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. 4601 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 15, 2017, 82 FR 39005 (August 16, 2017). 0 2. Section 740.11 is amended: 0 a. By revising paragraph (b)(2)(ii); 0 b. By revising the introductory text of paragraph (b)(2)(iii)(C); 0 c. By adding Note 1 to paragraph (b)(2)(iii)(C); and 0 d. By adding Note 1 to paragraph (c)(1) to read as follows: Sec. 740.11 Governments, International Organizations, International Inspections under the Chemical Weapons Convention, and the International Space Station (GOV). * * * * * (b) * * * (2) * * * (ii) Exports, reexports, and transfers (in-country) made by or consigned to a department or agency of the U.S. Government. This paragraph authorizes exports, reexports, and transfers of items when made by or consigned to a department or agency of the U.S. Government solely for its official use or for carrying out any U.S. Government program with foreign governments or international organizations that is authorized by law and subject to control by the President by other means. This paragraph does not authorize a department or agency of the U.S. Government to make any export, reexport, or transfer that is otherwise prohibited by other administrative provisions or by statute. Contractor support personnel of a department or agency of the U.S. Government are eligible for this authorization when in the performance of their duties pursuant to the applicable contract or other official duties. `Contractor support personnel' for the purpose of this provision means those persons who provide administrative, managerial, scientific or technical support under contract to a U.S. Government department or agency (e.g., contractor employees of Federally Funded Research Facilities or Systems Engineering and Technical Assistance contractors). The term `contractor support personnel' for purposes of this paragraph (b)(2)(ii) is limited to those individuals who are providing such support within a U.S. Government owned or operated facility or under the direct supervision of a U.S. government employee (i.e., an individual directly employed by the U.S. Government). Private security contractors are not `contractor support personnel' for purposes of this paragraph (b)(2)(ii) because although they may work within a U.S. Government owned or operated facility, such contractors do not provide administrative, managerial, scientific or technical support under contract to the U.S. Government. This authorization is not available when a department or agency of the U.S. Government acts as a transmittal agent on behalf of a non-U.S. Government person, either as a convenience or in satisfaction of security requirements. (iii) * * * (C) This paragraph authorizes the `temporary' export, reexport, or transfer (in-country) of an item in support of any foreign assistance or sales program authorized by law and subject to the control of the President by other means, when: * * * * * Note 1 to paragraph (b)(2)(iii)(C): `Temporary,' for purposes of paragraph (b)(2)(iii)(C) of this section, means that four years from the date of an item's initial export, reexport, or transfer (in- country), it must be returned to the exporter, reexporter, or transferor or its disposition otherwise authorized (e.g., pursuant to a license or another license exception) in accordance with the EAR. * * * * * (c) * * * (1) * * * Note 1 to paragraph (c)(1): Civil intergovernmental organizations (such as the European Space Agency (ESA)) where the membership is limited to national governments that are `cooperating governments' are also considered `cooperating governments' for purposes of paragraph (c)(1) of this section. If the membership of the civil intergovernmental organization includes any national governments or other organizations that are not `cooperating governments,' such civil intergovernmental organizations are not considered `cooperating governments' for purposes of paragraph (c)(1) of this section. For example, civil intergovernmental organizations such as the European Aviation Safety Agency (EASA), the United Nations, and the World Bank do not fall within paragraph (c)(1) of this section because their membership includes governments that are not `cooperating governments.' * * * * * 0 3. Section 740.20 is amended: 0 a. By adding Note 1 to paragraph (a); 0 b. By adding Note 1 to paragraphs (b)(2) and (b)(3) at the end of paragraph (b)(3); 0 c. By revising paragraphs (d)(1)(i) and (d)(1)(ii); 0 d. By revising paragraph (d)(2); and 0 e. By adding Note 1 to paragraph (d)(3) to read as follows: Sec. 740.20 License Exception Strategic Trade Authorization (STA). * * * * * (a) * * * Note 1 to paragraph (a): License Exception STA authorizes transfers (in-country) but is only needed to authorize a transfer (in-country) when an EAR authorization is required. If a transfer (in-country) is not being made under STA, the requirements specified in this section do not apply (see Note 1 to paragraphs (b)(2) and (b)(3) of this section for requirements specific to staying within the scope of the original License Exception STA authorization and the concept of `completing the chain' for purposes of ``600 series'' items originally authorized under License Exception STA). (b) * * * [[Page 50516]] (3) * * * Note 1 to paragraphs (b)(2) and (b)(3): Any export, reexport, or transfer (in-country) originally authorized under License Exception STA must stay within the scope of the original authorization. For example, for ``600 series'' items authorized under License Exception STA, such items must be provided to an eligible ultimate end user, such as a Country Group A:5 military, to stay in compliance with the original authorization. This requirement for the ``600 series'' is referred to as `completing the chain,' meaning regardless of how many times the ``600 series'' item is transferred (in-country) or whether the ``600 series'' item is incorporated into higher level assemblies or other items, the ``600 series'' item must ultimately be provided to an eligible ultimate end user, or be otherwise authorized under the EAR. This applies regardless of whether the ``600 series'' item has been incorporated into a foreign-made item that may no longer be ``subject to the EAR.'' Because the other items eligible for authorization under License Exception STA (9x515 and other non-600 series ECCNs) do not include the ``600 series'' requirements specific to ultimate end user, this `completing the chain' concept does not apply to 9x515 and other non-600 series ECCNs authorized under License Exception STA. However, the original export, reexport, or transfer (in-country) made under License Exception STA for 9x515 and other non-600 series ECCNs still must comply with the original authorization--meaning the terms and conditions of License Exception STA. * * * * * (d) Conditions--(1) Requirement to furnish Export Control Classification Number. (i) The exporter must furnish to the consignee the ECCN of each item to be exported pursuant to this section. Once furnished to a particular consignee, the ECCN that applies to any item need not be refurnished to that consignee at the time the same exporter makes an additional export of the same item, if the information remains accurate at the time of the additional export. (ii) A reexporter or transferor must furnish to subsequent consignees the ECCN, provided by the exporter or a prior reexporter or transferor, of each item to be reexported or transferred (in-country) pursuant to this section. Once furnished to a particular consignee, the ECCN that applies to any item need not be refurnished to that consignee at the time the same reexporter or transferor makes an additional reexport or transfer (in-country) of the same item, if the information remains accurate at the time of the additional reexport or transfer (in-country). * * * * * (2) Prior Consignee Statement. The requirements in this paragraph (d)(2) apply to each party using License Exception STA to export, reexport, or transfer (in-country), including reexporters and transferors of items previously received under License Exception STA. The exporter, reexporter, or transferor must obtain the following statement in writing from its consignee(s) prior to exporting, reexporting, or transferring (in-country) the item and must retain the statement in accordance with part 762 of the EAR. One statement may be used for multiple exports, reexports, or transfers (in-country) of the same items between the same parties so long as the party names, the description(s) of the item(s) and the ECCNs are correct. The exporter, reexporter, or transferor must maintain a log or other record (such as documents created in the ordinary course of business) that identifies each shipment made pursuant to this section and the specific consignee statement that is associated with each shipment. For purposes of this paragraph (d)(2), a log or other record is not required for intangible (i.e., electronic or in an otherwise intangible form) exports, reexports, or transfers (in-country) made under License Exception STA, but an exporter, reexporter, or transferor is required, prior to making any export, reexport, or transfer (in-country), to ensure that a prior consignee statement has been obtained pursuant to the requirements of this paragraph (d)(2). (See Note 1 to paragraph (d)(3) of this section for additional guidance on intangible exports, reexports, and transfers (in-country), including best practices). Paragraphs (d)(2)(i) through (vi) of this section are required for all transactions. In addition, paragraph (d)(2)(vii) is required for all transactions in ``600 series'' items and paragraph (viii) of this section is required for transactions in ``600 series'' items if the consignee is not the government of a country listed in Country Group A:5 (See supplement no. 1 to part 740 of the EAR). Paragraph (d)(2)(viii) is also required for transactions including 9x515 items. [INSERT NAME(S) OF CONSIGNEE(S)]: (i) Is aware that [INSERT GENERAL DESCRIPTION AND APPLICABLE ECCN(S) OF ITEMS TO BE SHIPPED (e.g., aircraft parts and components classified under ECCN 9A610)] will be shipped pursuant to License Exception Strategic Trade Authorization (STA) in Sec. 740.20 of the United States Export Administration Regulations (15 CFR 740.20); (ii) Has been informed of the ECCN(s) noted above by [INSERT NAME OF EXPORTER, REEXPORTER OR TRANSFEROR]; (iii) Understands that items shipped pursuant to License Exception STA may not subsequently be reexported pursuant to paragraphs (a) or (b) of License Exception APR (15 CFR 740.16(a) or (b)); (iv) Agrees to obtain a prior consignee statement when using License Exception STA for any reexport or transfer (in-country) of items previously received under License Exception STA; (v) Agrees not to export, reexport, or transfer these items to any destination, use or user prohibited by the United States' Export Administration Regulations; (vi) Agrees to provide copies of this document and all other export, reexport, or transfer records (i.e., the documents described in 15 CFR part 762) relevant to the items referenced in this statement to the U.S. Government as set forth in 15 CFR 762.7; (vii) Understands that License Exception STA may be used to export, reexport, and transfer (in-country) ``600 series'' items to persons, whether non-governmental or governmental, only if they are in and, for natural persons, nationals of a country listed in Country Group A:5 (See supplement no. 1 to part 740 of the EAR) or the United States and if: (A) The ultimate end user for such items is 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; (B) For 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 be for one, or more, of the following purposes: (1) Ultimately to be used by any such government agencies in one of the countries listed in Country Group A:5 or the United States Government; or (2) Sent to a person in the United States and not for subsequent export under Sec. 740.9(b)(1) (License Exception TMP for items moving in transit through the United States); or (C) The United States Government has otherwise authorized the ultimate end use, the license or other authorization is in effect, and the consignee verifies in writing that such authorization exists and has provided the license or other approval identifier to the exporter, reexporter or transferor (as applicable). (viii) Agrees to permit a U.S. Government end-use check with respect to the items. [INSERT NAME(S) AND TITLE(S) OF PERSON(S) SIGNING THIS [[Page 50517]] DOCUMENT, AND DATE(S) DOCUMENT IS SIGNED]. Note 1 to paragraph (d)(2): When multiple consignees who form a network engaged in a production process (or other type of collaborative activity, such as joint development) will be receiving items under License Exception STA, a single prior consignee statement for multiple consignees may be used for any item eligible for export, reexport, or transfer (in-country) under License Exception STA, provided all of the applicable requirements of License Exception STA are met, including those specified in paragraph (d)(2). Note 2 to paragraph (d)(2): Country Group A:5 and A:6 government consignees are not required to sign or provide a prior consignee statement. (3) * * * Note 1 to paragraph (d)(3): While the exporter, reexporter, and transferor must furnish the applicable ECCN and obtain a consignee statement prior to export, reexport or transfer (in-country) made under License Exception STA in accordance with the requirements of paragraphs (d)(1) and (d)(2) of this section, intangible (i.e., electronic or in an otherwise intangible form) exports, reexports, and transfers (in-country) made under License Exception STA are not subject to the notification requirements of paragraph (d)(3) of this section. However, any export, reexport, or transfer (in-country) made under STA must stay within the scope of the original authorization. * * * * * Dated: October 26, 2017. Richard E. Ashooh, Assistant Secretary for Export Administration. [FR Doc. 2017-23712 Filed 10-31-17; 8:45 am] BILLING CODE 3510-33-P
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Class E airspace designations are exceptions and provide the general of License Exception GOV and are
published in paragraph 6005, public answers to frequently asked limited to providing guidance on how
respectively, of FAA Order 7400.11B, questions based on existing agency BIS interprets these paragraphs of
dated August 2, 2017, and effective interpretive practice. Therefore, the License Exception GOV in response to
September 15, 2017, which is clarifications in this final rule do not questions from the public.
incorporated by reference in 14 CFR change the EAR requirements for the Paragraph (b)(2)(ii). The final rule
71.1. The Class E airspace designations use of the license exceptions but are revises paragraph (b)(2)(ii) of License
listed in this document will be intended to assist exporters new to the Exception GOV to add two sentences to
published subsequently in the Order. EAR. clarify the applicability of the term
DATES: This rule is effective November ‘contractor support personnel,’ which is
Correction to Final Rule defined in paragraph (b)(2)(ii) of License
1, 2017.
Accordingly, pursuant to the Exception GOV. BIS has received
FOR FURTHER INFORMATION CONTACT:
authority delegated to me, in the questions regarding the locations where
Timothy Mooney, Regulatory Policy
Federal Register of August 3, 2017 (82 ‘contractor support personnel’ must
Division, Bureau of Industry and
FR 40692) FR Doc. 2017–18107, work and the level of U.S. Government
Security, Department of Commerce,
Amendment of Class E Airspace; supervision needed for personnel to be
Phone: (202) 482–2440, Fax: (202) 482– considered ‘contractor support
Oskaloosa, IA, is corrected as follows:
3355, Email: rpd2@bis.doc.gov. personnel.’ The first sentence that this
§ 71.1 [Amended] SUPPLEMENTARY INFORMATION: final rule adds to paragraph (b)(2)(ii)
ACE IA E5 Oskaloosa, IA [Corrected] Background clarifies that ‘contractor support
personnel’ is limited to those
■ On page 40694 column 1, on lines 11 This final rule revises part 740 of the individuals who are providing such
and 12, remove the following text: Export Administration Regulations support within a U.S. Government
‘‘excluding that airspace within the (EAR) by clarifying two license owned or operated facility or under the
Ottumwa, IA Class E airspace area.’’ exceptions based on existing agency direct supervision of a U.S. government
understanding and practice. To provide employee. This final rule adds a
Issued in Fort Worth, Texas on October 17, the general public with guidance on
2017. parenthetical phrase to clarify that a
using these license exceptions, this final U.S. government employee is an
Christopher L. Southerland, rule makes three clarifications to
Acting Manager, Operations Support Group,
individual directly employed by the
License Exception Governments, U.S. Government.
ATO Central Service Center. International Organizations, As an example of persons directly
[FR Doc. 2017–23247 Filed 10–31–17; 8:45 am] International Inspections under the employed who would meet the
BILLING CODE 4910–13–P Chemical Weapons Convention, and the ‘contractor support personnel’
International Space Station (GOV) and definition, BIS provides the following:
adds five notes, along with making other A U.S. Government agency plans to
DEPARTMENT OF COMMERCE minor clarifications, to License conduct a study of soy bean cultivation
Exception Strategic Trade Authorization in Malaysia and the U.S. Government
Bureau of Industry and Security (STA). These changes are described agency team will include three
below under sections: (A) Clarifications ‘contractor support personnel’ providing
15 CFR Part 740 for License Exception GOV and (B) scientific support to the U.S.
[Docket No. 160303181–6181–01] Clarifications for License Exception Government agency’s study. These three
STA. ‘contractor support personnel’ will work
RIN 0694–AG80 With these revisions, BIS is not at the U.S. Embassy in Malaysia to
Clarifications to the Export changing the EAR requirements for the process and analyze agricultural field
Administration Regulations for the Use use of these license exceptions. Instead, data being gathered by U.S. Government
of License Exceptions the agency seeks to provide sufficient personnel as part of a study. These
guidance within the EAR to answer individuals meet the definition of
AGENCY: Bureau of Industry and questions the agency frequently receives contractor support personnel in
Security, Commerce. from the public as to the application of paragraph (b)(2)(ii) because they will be
ACTION: Final rule. the two license exceptions. These working within a U.S. Government-
clarifications should be particularly owned and operated facility (a U.S
SUMMARY: This final rule makes helpful to exporters who are new to the embassy) and providing a form of
clarifications to the Export EAR, including exporters of items that support (scientific support) that is
Administration Regulations (EAR) to have recently moved to the EAR from identified in the term’s definition.
provide guidance based on existing the International Traffic in Arms For an example of persons not
agency understanding and practice on Regulations (ITAR) as a result of the directly employed who would be
the use of two license exceptions. United States Munitions List to the outside the scope of the ‘contractor
Specifically, this final rule makes three Commerce Control List review process. support personnel’ definition, BIS
clarifications to License Exception provides the following: A U.S.
Governments, International (A) Clarifications for License Exception Government agency is evaluating the
Organizations, International Inspections GOV possibility of providing a grant to a
under the Chemical Weapons This final rule revises License company in Kenya that seeks financing
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Convention, and the International Space Exception GOV, § 740.11, to make three for building three windmills. To
Station (GOV) and adds five notes, along clarifications. Specifically, this final evaluate the feasibility of providing a
with making other minor clarifications, rule revises paragraph (b)(2)(ii); adds a grant, this U.S. Government agency has
to License Exception Strategic Trade new note to paragraph (b)(2)(iii)(C); and entered into a contract with a U.S.
Authorization (STA). These revisions adds a new note to paragraph (c)(1). company that provides feasibility
respond to questions BIS has received These clarifications do not change the analysis for windmill locations. To
about the use of these two EAR license applicability or any other requirements conduct the feasibility analysis study,
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![Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 50515
current EAR provisions, and thus prior § 740.11 Governments, International foreign assistance or sales program
notice and the opportunity for public Organizations, International Inspections authorized by law and subject to the
comment is contrary to the public under the Chemical Weapons Convention, control of the President by other means,
and the International Space Station (GOV).
interest. The guidance included in this when:
final rule has been provided to many * * * * * * * * * *
members of the public in the past (e.g., (b) * * *
(2) * * * Note 1 to paragraph (b)(2)(iii)(C):
those persons that have attended BIS ‘Temporary,’ for purposes of paragraph
(ii) Exports, reexports, and transfers
outreach events, asked these types of (b)(2)(iii)(C) of this section, means that four
(in-country) made by or consigned to a
application questions to BIS by phone, years from the date of an item’s initial export,
department or agency of the U.S.
email or in writing, or read certain reexport, or transfer (in-country), it must be
Government. This paragraph authorizes
FAQs posted on the BIS Web site returned to the exporter, reexporter, or
exports, reexports, and transfers of items transferor or its disposition otherwise
dealing with these EAR provisions).
when made by or consigned to a authorized (e.g., pursuant to a license or
Importantly, this is also the same
department or agency of the U.S. another license exception) in accordance
guidance that would be provided to any Government solely for its official use or with the EAR.
other member of the public that asked for carrying out any U.S. Government
the same questions to BIS dealing these program with foreign governments or * * * * *
EAR provisions. BIS’s purpose with international organizations that is (c) * * *
publishing this final rule is not to (1) * * *
authorized by law and subject to control
change the application of these by the President by other means. This Note 1 to paragraph (c)(1): Civil
provisions but to more efficiently paragraph does not authorize a intergovernmental organizations (such as the
communicate the existing agency department or agency of the U.S. European Space Agency (ESA)) where the
guidance and interpretation of these membership is limited to national
Government to make any export, governments that are ‘cooperating
provisions by clarifying the regulations. reexport, or transfer that is otherwise
This will benefit members of the public governments’ are also considered
prohibited by other administrative ‘cooperating governments’ for purposes of
because they will be able to more easily provisions or by statute. Contractor paragraph (c)(1) of this section. If the
understand and apply these provisions, support personnel of a department or membership of the civil intergovernmental
which are consistent with past agency agency of the U.S. Government are organization includes any national
guidance and interpretations provided eligible for this authorization when in governments or other organizations that are
to other members of the public. BIS the performance of their duties pursuant not ‘cooperating governments,’ such civil
finds good cause to waive the 30-day intergovernmental organizations are not
to the applicable contract or other considered ‘cooperating governments’ for
delay in effectiveness under 5 U.S.C. official duties. ‘Contractor support
553(d)(3). This rule does not change the purposes of paragraph (c)(1) of this section.
personnel’ for the purpose of this For example, civil intergovernmental
requirements or obligations of persons provision means those persons who organizations such as the European Aviation
under the EAR, so a 30-day delay in provide administrative, managerial, Safety Agency (EASA), the United Nations,
effectiveness is not needed. Because a scientific or technical support under and the World Bank do not fall within
notice of proposed rulemaking and an contract to a U.S. Government paragraph (c)(1) of this section because their
opportunity for public comment are not department or agency (e.g., contractor membership includes governments that are
required to be given for these not ‘cooperating governments.’
employees of Federally Funded
amendments by 5 U.S.C. 553, or by any Research Facilities or Systems * * * * *
other law, the analytical requirements of Engineering and Technical Assistance
the Regulatory Flexibility Act, 5 U.S.C. ■ 3. Section 740.20 is amended:
contractors). The term ‘contractor ■ a. By adding Note 1 to paragraph (a);
601 et seq., are not applicable. support personnel’ for purposes of this ■ b. By adding Note 1 to paragraphs
List of Subjects in 15 CFR Part 740 paragraph (b)(2)(ii) is limited to those (b)(2) and (b)(3) at the end of paragraph
Administrative practice and individuals who are providing such (b)(3);
procedure, Exports, Reporting and support within a U.S. Government ■ c. By revising paragraphs (d)(1)(i) and
recordkeeping requirements. owned or operated facility or under the (d)(1)(ii);
direct supervision of a U.S. government ■ d. By revising paragraph (d)(2); and
Accordingly, part 740 of the Export employee (i.e., an individual directly ■ e. By adding Note 1 to paragraph
Administration Regulations (15 CFR employed by the U.S. Government). (d)(3) to read as follows:
parts 730–774) is amended as follows: Private security contractors are not
‘contractor support personnel’ for § 740.20 License Exception Strategic
PART 740—[AMENDED] Trade Authorization (STA).
purposes of this paragraph (b)(2)(ii)
■ 1. The authority citation for 15 CFR because although they may work within * * * * *
part 740 continues to read as follows: a U.S. Government owned or operated (a) * * *
Authority: 50 U.S.C. 4601 et seq.; 50 facility, such contractors do not provide Note 1 to paragraph (a): License Exception
administrative, managerial, scientific or STA authorizes transfers (in-country) but is
U.S.C. 1701 et seq.; 22 U.S.C. 7201 et seq.;
technical support under contract to the only needed to authorize a transfer (in-
E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp.,
U.S. Government. This authorization is country) when an EAR authorization is
p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001
required. If a transfer (in-country) is not
Comp., p. 783; Notice of August 15, 2017, 82 not available when a department or being made under STA, the requirements
FR 39005 (August 16, 2017). agency of the U.S. Government acts as specified in this section do not apply (see
■ 2. Section 740.11 is amended: a transmittal agent on behalf of a non- Note 1 to paragraphs (b)(2) and (b)(3) of this
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■ a. By revising paragraph (b)(2)(ii); U.S. Government person, either as a section for requirements specific to staying
■ b. By revising the introductory text of convenience or in satisfaction of within the scope of the original License
paragraph (b)(2)(iii)(C); security requirements. Exception STA authorization and the concept
■ c. By adding Note 1 to paragraph (iii) * * * of ‘completing the chain’ for purposes of
(b)(2)(iii)(C); and (C) This paragraph authorizes the ‘‘600 series’’ items originally authorized
■ d. By adding Note 1 to paragraph ‘temporary’ export, reexport, or transfer under License Exception STA).
(c)(1) to read as follows: (in-country) of an item in support of any (b) * * *
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![50516 Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations
(3) * * * Exception STA to export, reexport, or (iii) Understands that items shipped
Note 1 to paragraphs (b)(2) and (b)(3): Any transfer (in-country), including pursuant to License Exception STA may
export, reexport, or transfer (in-country) reexporters and transferors of items not subsequently be reexported
originally authorized under License previously received under License pursuant to paragraphs (a) or (b) of
Exception STA must stay within the scope of Exception STA. The exporter, License Exception APR (15 CFR
the original authorization. For example, for reexporter, or transferor must obtain the 740.16(a) or (b));
‘‘600 series’’ items authorized under License following statement in writing from its (iv) Agrees to obtain a prior consignee
Exception STA, such items must be provided consignee(s) prior to exporting, statement when using License
to an eligible ultimate end user, such as a Exception STA for any reexport or
Country Group A:5 military, to stay in
reexporting, or transferring (in-country)
the item and must retain the statement transfer (in-country) of items previously
compliance with the original authorization.
This requirement for the ‘‘600 series’’ is in accordance with part 762 of the EAR. received under License Exception STA;
referred to as ‘completing the chain,’ One statement may be used for multiple (v) Agrees not to export, reexport, or
meaning regardless of how many times the exports, reexports, or transfers (in- transfer these items to any destination,
‘‘600 series’’ item is transferred (in-country) country) of the same items between the use or user prohibited by the United
or whether the ‘‘600 series’’ item is same parties so long as the party names, States’ Export Administration
incorporated into higher level assemblies or the description(s) of the item(s) and the Regulations;
other items, the ‘‘600 series’’ item must ECCNs are correct. The exporter, (vi) Agrees to provide copies of this
ultimately be provided to an eligible ultimate document and all other export, reexport,
end user, or be otherwise authorized under
reexporter, or transferor must maintain
a log or other record (such as documents or transfer records (i.e., the documents
the EAR. This applies regardless of whether described in 15 CFR part 762) relevant
the ‘‘600 series’’ item has been incorporated created in the ordinary course of
business) that identifies each shipment to the items referenced in this statement
into a foreign-made item that may no longer
be ‘‘subject to the EAR.’’ Because the other made pursuant to this section and the to the U.S. Government as set forth in
items eligible for authorization under License specific consignee statement that is 15 CFR 762.7;
Exception STA (9x515 and other non-600 associated with each shipment. For (vii) Understands that License
series ECCNs) do not include the ‘‘600 purposes of this paragraph (d)(2), a log Exception STA may be used to export,
series’’ requirements specific to ultimate end or other record is not required for reexport, and transfer (in-country) ‘‘600
user, this ‘completing the chain’ concept
intangible (i.e., electronic or in an series’’ items to persons, whether non-
does not apply to 9x515 and other non-600 governmental or governmental, only if
series ECCNs authorized under License otherwise intangible form) exports,
reexports, or transfers (in-country) made they are in and, for natural persons,
Exception STA. However, the original export, nationals of a country listed in Country
reexport, or transfer (in-country) made under under License Exception STA, but an
exporter, reexporter, or transferor is Group A:5 (See supplement no. 1 to part
License Exception STA for 9x515 and other
non-600 series ECCNs still must comply with required, prior to making any export, 740 of the EAR) or the United States and
the original authorization—meaning the reexport, or transfer (in-country), to if:
terms and conditions of License Exception (A) The ultimate end user for such
ensure that a prior consignee statement
STA. items is the armed forces, police,
has been obtained pursuant to the
paramilitary, law enforcement, customs,
* * * * * requirements of this paragraph (d)(2).
correctional, fire, or a search and rescue
(d) Conditions—(1) Requirement to (See Note 1 to paragraph (d)(3) of this
agency of a government of one of the
furnish Export Control Classification section for additional guidance on
countries listed in Country Group A:5 or
Number. (i) The exporter must furnish intangible exports, reexports, and
the United States Government;
to the consignee the ECCN of each item transfers (in-country), including best (B) For the ‘‘development,’’
to be exported pursuant to this section. practices). Paragraphs (d)(2)(i) through ‘‘production,’’ operation, installation,
Once furnished to a particular (vi) of this section are required for all maintenance, repair, overhaul, or
consignee, the ECCN that applies to any transactions. In addition, paragraph refurbishing of an item in one of the
item need not be refurnished to that (d)(2)(vii) is required for all transactions countries listed in Country Group A:5 or
consignee at the time the same exporter in ‘‘600 series’’ items and paragraph the United States that will be for one, or
makes an additional export of the same (viii) of this section is required for more, of the following purposes:
item, if the information remains transactions in ‘‘600 series’’ items if the (1) Ultimately to be used by any such
accurate at the time of the additional consignee is not the government of a government agencies in one of the
export. country listed in Country Group A:5 countries listed in Country Group A:5 or
(ii) A reexporter or transferor must (See supplement no. 1 to part 740 of the the United States Government; or
furnish to subsequent consignees the EAR). Paragraph (d)(2)(viii) is also (2) Sent to a person in the United
ECCN, provided by the exporter or a required for transactions including States and not for subsequent export
prior reexporter or transferor, of each 9x515 items. under § 740.9(b)(1) (License Exception
item to be reexported or transferred (in- [INSERT NAME(S) OF CONSIGNEE(S)]: TMP for items moving in transit through
country) pursuant to this section. Once (i) Is aware that [INSERT GENERAL the United States); or
furnished to a particular consignee, the DESCRIPTION AND APPLICABLE (C) The United States Government has
ECCN that applies to any item need not ECCN(S) OF ITEMS TO BE SHIPPED otherwise authorized the ultimate end
be refurnished to that consignee at the (e.g., aircraft parts and components use, the license or other authorization is
time the same reexporter or transferor classified under ECCN 9A610)] will be in effect, and the consignee verifies in
makes an additional reexport or transfer shipped pursuant to License Exception writing that such authorization exists
(in-country) of the same item, if the Strategic Trade Authorization (STA) in and has provided the license or other
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information remains accurate at the time § 740.20 of the United States Export approval identifier to the exporter,
of the additional reexport or transfer (in- Administration Regulations (15 CFR reexporter or transferor (as applicable).
country). 740.20); (viii) Agrees to permit a U.S.
* * * * * (ii) Has been informed of the ECCN(s) Government end-use check with respect
(2) Prior Consignee Statement. The noted above by [INSERT NAME OF to the items.
requirements in this paragraph (d)(2) EXPORTER, REEXPORTER OR [INSERT NAME(S) AND TITLE(S) OF
apply to each party using License TRANSFEROR]; PERSON(S) SIGNING THIS
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![Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 50517
DOCUMENT, AND DATE(S) ADDRESSES: Report available through and clarified by OMB’s May 8, 2017
DOCUMENT IS SIGNED]. http://www.ferc.gov. Guidance Memo.3 In addition, these
Note 1 to paragraph (d)(2): When multiple FOR FURTHER INFORMATION CONTACT: identified agency actions may be
consignees who form a network engaged in Nicholas Tackett, Office of Energy addressed in conjunction with the
a production process (or other type of Projects, Branch Chief, Division of Commission’s ongoing efforts pursuant
collaborative activity, such as joint Hydropower Licensing, Federal to Executive Order 13777.
development) will be receiving items under
Energy Regulatory Commission, 888 II. Background
License Exception STA, a single prior
consignee statement for multiple consignees First Street NE., Washington, DC Section 2 of the Executive Order
may be used for any item eligible for export, 20426, 202–502–6783 requires the heads of federal agencies to
reexport, or transfer (in-country) under Karin L. Larson, Office of General immediately ‘‘review all existing
License Exception STA, provided all of the Counsel, Energy Projects, Federal regulations, orders, guidance
applicable requirements of License Exception Energy Regulatory Commission, 888 documents, policies, and any other
STA are met, including those specified in First Street NE., Washington, DC
paragraph (d)(2).
similar agency actions (collectively,
20426, 202–502–8236 agency actions) that potentially burden
Note 2 to paragraph (d)(2): Country Group SUPPLEMENTARY INFORMATION: the development or use of domestically
A:5 and A:6 government consignees are not FEDERAL ENERGY REGULATORY produced energy resources, with
required to sign or provide a prior consignee COMMISSION particular attention to oil, natural gas,
statement. coal, and nuclear energy resources.
Final Report Such review shall not include agency
(3) * * *
Review of Federal Energy Regulatory actions that are mandated by law,
Note 1 to paragraph (d)(3): While the
Commission Agency Actions Pursuant necessary for the public interest, and
exporter, reexporter, and transferor must
furnish the applicable ECCN and obtain a to Executive Order 13783, Promoting consistent with the policy set forth in
consignee statement prior to export, reexport Energy Independence and Economic section 1 of this order.’’
or transfer (in-country) made under License Growth On May 8, 2017, OMB issued a
Exception STA in accordance with the Guidance Memo providing additional
requirements of paragraphs (d)(1) and (d)(2) I. Executive Summary information regarding compliance with
of this section, intangible (i.e., electronic or On March 28, 2017, the President the Executive Order, in particular
in an otherwise intangible form) exports, signed Executive Order 13783, titled section 2. The Guidance Memo noted
reexports, and transfers (in-country) made Promoting Energy Independence and that the Executive Order does not apply
under License Exception STA are not subject to independent agencies as defined in
Economic Growth (Executive Order).1
to the notification requirements of paragraph
(d)(3) of this section. However, any export,
Pursuant to section 2(c) of the Executive 44 U.S.C. 3502(5), but encouraged
reexport, or transfer (in-country) made under Order, on May 12, 2017, the Federal independent regulatory agencies,
STA must stay within the scope of the Energy Regulatory Commission (FERC, especially those that directly regulate
original authorization. or the Commission) submitted to the the development or use of domestically
Office of Management and Budget produced energy resources, to provide
* * * * * (OMB) its plan (Plan) for reviewing its the plan and report that are called for in
Dated: October 26, 2017. existing regulations, orders, guidance section 2 of the Executive Order. The
Richard E. Ashooh, documents, policies, and any other Guidance Memo further encourages
Assistant Secretary for Export similar agency action (agency actions) agencies to coordinate their compliance
Administration. that potentially burden the development with Section 2 of Executive Order 13783
[FR Doc. 2017–23712 Filed 10–31–17; 8:45 am] or use of domestically produced energy with their compliance with Executive
BILLING CODE 3510–33–P
resources. On July 26, 2017, pursuant to Order 13777, which directs agencies to
section 2(d) of the Executive Order, the establish Regulatory Reform Task Forces
head of the Commission submitted a to evaluate existing regulations
DEPARTMENT OF ENERGY draft final report detailing the review generally and make recommendations to
undertaken and the results of the the agency head regarding their repeal,
Federal Energy Regulatory review. Given the Commission’s status replacement and modification,
Commission as an independent regulatory agency, consistent with applicable law.
this final report is being submitted on a In the Plan, the Commission
18 CFR Chapter I voluntary basis.2 explained that it intended to review
Of the agency actions reviewed, this agency actions it has taken pursuant to
Final Report: Review of Federal Energy final report identifies nine agency legislative authority under: (1) the
Regulatory Commission Agency actions that potentially materially Natural Gas Act (NGA), 15 U.S.C. 717,
Actions Pursuant to Executive Order burden the development or use of et seq.; (2) the Federal Power Act (FPA),
13783, Promoting Energy domestic energy resources as 16 U.S.C. 791a, et seq.; (3) the Interstate
Independence and Economic Growth contemplated by the Executive Order Commerce Act, 49 App. U.S.C. 1 et seq.;
(4) the Public Utility Regulatory Policies
AGENCY: Federal Energy Regulatory 1 Executive Order 13783, Promoting Energy Act of 1978 (PURPA), 16 U.S.C. 2601 et
Commission, DOE. Independence and Economic Growth, 82 Fed. Reg. seq., and (5) other statutes for which the
ACTION: Availability of Final Report. 16093 (Mar. 28, 2017).
2 The Commission is a multi-member,
Commission’s actions on LNG, natural
gas pipeline, and hydropower projects
sradovich on DSK3GMQ082PROD with RULES
SUMMARY: This Final Report on the independent regulatory agency that must follow
applicable federal laws to change its rules,
Review of Federal Energy Regulatory regulations and orders. Because the Commission 3 Memo from Dominic J. Mancini, Acting
Commission Agency Actions is must ultimately decide what action, if any, to take Administrator, Office of Information and Regulatory
provided pursuant to Executive Order in response to the Executive Order, this report is a Affairs to Regulatory Reform Officers and
13783, Promoting Energy Independence Commission staff analysis of the issues identified Regulatory Policy Officers at Executive Departments
for review in the Executive Order and does not and Agencies regarding Guidance for Section 2 of
and Economic Growth. specifically recommend actions nor indicate the Executive Order 13783, titled ‘‘Promoting Energy
DATES: November 1, 2017. timing of any potential action. Independence and Economic Growth.’’
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Document Created: 2017-11-01 02:03:03
Document Modified: 2017-11-01 02:03:03
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | This rule is effective November 1, 2017. | |
| Contact | Timothy Mooney, Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-2440, Fax: (202) 482-3355, Email: [email protected] | |
| FR Citation | 82 FR 50511 | |
| RIN Number | 0694-AG80 | |
| CFR Associated | Administrative Practice and Procedure; Exports and Reporting and Recordkeeping Requirements |
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