82 FR 6218 - Amendments to the Export Administration Regulations Implementing an Additional Phase of India-U.S. Export Control Cooperation

DEPARTMENT OF COMMERCE
Bureau of Industry and Security

Federal Register Volume 82, Issue 12 (January 19, 2017)

In this final rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to implement the India-U.S. Joint Statement of June 7, 2016 (June Statement), which recognized the United States and India as Major Defense Partners. This rule amends the EAR by establishing a licensing policy of general approval for exports or reexports to or transfers within India of items subject to the EAR and controlled only for National Security or Regional Stability reasons. In addition, BIS amends the end use and end user provisions of the Validated End User (VEU) authorization to state that items obtained under authorization VEU in India may be used for either civil or military end uses other than those that are for use in nuclear, ``missile,'' or chemical or biological weapons activities.

[Federal Register Volume 82, Number 12 (Thursday, January 19, 2017)]
[Rules and Regulations]
[Pages 6218-6221]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-00439]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 742 and 748

[Docket No. 170104015-7015-01]
RIN 0694-AH26


Amendments to the Export Administration Regulations Implementing 
an Additional Phase of India-U.S. Export Control Cooperation

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: In this final rule, the Bureau of Industry and Security (BIS) 
amends the Export Administration Regulations (EAR) to implement the 
India-U.S. Joint Statement of June 7, 2016 (June Statement), which 
recognized the United States and India as Major Defense Partners. This 
rule amends the EAR by establishing a licensing policy of general 
approval for exports or

[[Page 6219]]

reexports to or transfers within India of items subject to the EAR and 
controlled only for National Security or Regional Stability reasons. In 
addition, BIS amends the end use and end user provisions of the 
Validated End User (VEU) authorization to state that items obtained 
under authorization VEU in India may be used for either civil or 
military end uses other than those that are for use in nuclear, 
``missile,'' or chemical or biological weapons activities.

DATES: This rule is effective January 19, 2017.

FOR FURTHER INFORMATION CONTACT: Alexander Lopes, Director, Office of 
Nonproliferation Controls and Treaty Compliance, Bureau of Industry and 
Security, Phone: (202) 482-3825.

SUPPLEMENTARY INFORMATION: 

Background

    As announced by President Obama and India's Prime Minister Singh in 
a U.S.-India Joint Statement on November 8, 2010, the United States and 
India formally committed to work together to strengthen the global 
nonproliferation and export control framework and further transform 
bilateral export control cooperation to realize the full potential of 
the global strategic partnership between the two countries. The leaders 
agreed to take mutual steps to expand cooperation in civil space, 
defense, and other high-technology sectors. The steps agreed to by the 
United States included the removal of Indian defense and space-related 
entities from the Entity List (Supplement No. 4 to part 744 of the EAR) 
and the realignment of India in U.S. export control regulations. 
Additionally, the 2010 Joint Statement announced that the United States 
``intend[ed] to support India's full membership in the four 
multilateral export control regimes (Nuclear Suppliers Group, Missile 
Technology Control Regime, Australia Group, and Wassenaar Arrangement) 
in a phased manner, and to consult with regime members to encourage the 
evolution of regime membership criteria,'' while maintaining these 
regimes' core principles, ``as the Government of India took steps 
towards the full adoption of the regimes' export control requirements 
to reflect its prospective membership, with both processes moving 
forward together.''
    To date, BIS has published two rules implementing the President's 
and Prime Minister's commitments. The first rule, published on January 
25, 2011 (76 FR 4228), revised certain export and reexport controls for 
India, including the removal of nine Indian entities from the Entity 
List. In addition, BIS amended the EAR to remove India from Country 
Groups D:2, D:3 and D:4, and added India to Country Group A:2.
    In the second rule, published January 23, 2015 (80 FR 3463), BIS 
amended the EAR, in furtherance of the United States' commitment to the 
bilateral understanding, by removing India from Crime Control (CC) 
columns 1 and 3 and from Regional Stability (RS) column 2 on the 
Commerce Country Chart in Supplement No. 1 to Part 738 of the EAR, 
because the Government of India had taken appropriate steps to ensure 
that U.S.-origin items controlled for CC and RS reasons are not 
reexported from India without a license. Although the second rule 
removed the license requirement for the majority of items controlled 
for CC or RS reasons and destined for India, a license requirement 
remained for items controlled under export control classification 
numbers (ECCNs) 6A003.b.4.b and 9A515.e for RS column 2 reasons when 
destined to India.
    In addition, BIS published on August 17, 2016, a third rule (81 FR 
54721) that was not specific to the bilateral understanding but 
nonetheless removed a related requirement to include a destination 
control statement on shipping documents for items controlled for CC 
columns 1 and 3, and RS column 2 reasons when the items are exported to 
India.

New Amendments

    In this rule, BIS implements an additional step in furtherance of 
the U.S.-India bilateral understanding and global strategic 
partnership. On June 7, 2016, the United States and India issued a 
Joint Statement entitled, ``The United States and India: Enduring 
Global Partners in the 21st Century.'' Specifically, in this rule, BIS 
implements the understanding between the United States and India 
expressed in the June Statement regarding U.S. export control policy 
toward India by establishing a new paragraph (b)(8) in Sec.  742.4 
(National Security) and a new paragraph (b)(5) in Sec.  742.6 (Regional 
Stability). These new provisions establish licensing policies of 
general approval for exports or reexports to or transfers within India 
of items subject to the EAR, including ``600 series'' military items, 
for civil or military end uses in India or for the ultimate end use by 
the Government of India, for reexport to a Country Group A:5 country, 
or for return to the United States, so long as such items are not for 
use in nuclear, ``missile,'' or chemical or biological weapons 
activities. This rule does not amend any other licensing policies in 
part 742 such as those with respect to Missile Technology items. The 
rule also does not amend any licensing policies pertaining to naval 
nuclear propulsion. The Country Group A:5 countries are listed in 
Supplement Number 1 to part 740 and are often informally referred to as 
the ``STA-36'' countries because they are the list of countries to 
which exports under License Exception Strategic Trade Authorization are 
authorized pursuant to the conditions and limitations of section 
740.20(b)(3).
    In addition, BIS amends the end user and end use provisions of the 
Validated End User (VEU) authorization in Sec.  748.15 (Authorization 
Validated End-User (VEU)), paragraphs (a) (eligible end user provision) 
and (d) (end-use restrictions), to allow that items obtained under 
authorization VEU in India may be used for civil or military end uses 
other than those that involve items controlled for MT reasons, or if 
for use in nuclear, ``missile,'' or chemical or biological weapons 
activities. Section 748.15(c) does not change the January 23, 2015 (80 
FR 3463), amendment to the EAR regarding the export and reexport of 
Crime Control (CC) columns 1 and 3 items to India. Conforming changes 
are made to paragraph (7)(ii) in Supplement No. 8 to Part 748 
(Information Required in Requests for Validated End-User (VEU) 
Authorization). No other material changes are made in this rule to the 
VEU program, such as the process for approving a VEU, VEU compliance 
obligations, the rules pertaining to VEUs in China, or the process of 
identifying approved VEUs and eligible items and facilities in 
Supplement No. 7 to Part 748.

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 most recently by 
the Notice of August 4, 2016, 81 FR 52587 (August 8, 2016), has 
continued the EAR in effect under the International Emergency Economic 
Powers Act. BIS continues to carry out the provisions of the Export 
Administration Act, as appropriate and to the extent permitted by law, 
pursuant to Executive Order 13222 as amended by Executive Order 13637.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and

[[Page 6220]]

benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. 
This rule has been determined to be not significant for purposes of 
Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor shall any person 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 rule 
involves a collection of information approved under OMB control number 
0694-0088--Simplified Network Application Process--Redesign System 
(SNAP-R) and the Multipurpose Export License Application, which carries 
an annual estimated burden of 31,833 hours. BIS believes that this rule 
will not have a material impact on that burden because this rule does 
not increase or decrease BIS's existing licensing requirements. To the 
extent that it has any impact, BIS believes that the benefits of this 
rule justify any additional (and likely minimal) additional burden it 
might create. Send comments regarding this burden estimate or any other 
aspect of this collection of information, including suggestions for 
reducing the burden, to Jasmeet K. Seehra, Office of Management and 
Budget, by email at [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 Executive Order 13132.
    4. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring notice of proposed rulemaking and the opportunity for 
public participation, and a delay in effective date, are inapplicable 
because this regulation involves a military or foreign affairs function 
of the United States (see 5 U.S.C. 553(a)(1)). This rule advances 
essential foreign policy, national security, and nonproliferation goals 
of the United States and a critical strategic partner, India. 
Subsequent agency deliberations following the June Statement culminated 
in this framework for regulatory implementation of the Statement. Delay 
in implementing this rule to obtain public comment or for any other 
reason would undermine the good faith timeliness in which the United 
States signed, and now implements, the Statement and, therefore, would 
undermine the foreign policy objectives that the rule is intended to 
serve. Further, no other law requires that a notice of proposed 
rulemaking or an opportunity for public comment be given for this rule. 
Because a notice of proposed rulemaking and an opportunity for public 
comment are not required for this rule under 5 U.S.C. 553, or by any 
other law, the requirements of the Regulatory Flexibility Act (5 U.S.C. 
601 et seq.) are not applicable.

List of Subjects

15 CFR Part 742

    Exports, Terrorism.

15 CFR Part 748

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

    Accordingly, 15 CFR parts 742 and 748 of the EAR (15 CFR parts 730 
through 774) are amended as follows:

PART 742--CONTROL POLICY--CCL BASED CONTROLS

0
1. The authority citation for 15 CFR part 742 continues to read as 
follows:

    Authority: 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22 
U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 
U.S.C. 7210; Sec. 1503, Pub. L. 108-11, 117 Stat. 559; E.O. 12058, 
43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 
CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., 
p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 
13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Presidential 
Determination 2003-23, 68 FR 26459, 3 CFR, 2004 Comp., p. 320; 
Notice of November 12, 2015, 80 FR 70667 (November 13, 2015); Notice 
of August 4, 2016, 81 FR 52587 (August 8, 2016).


0
2. Section 742.4 is amended by adding paragraph (b)(8) to read as 
follows:


Sec.  742.4  National security.

* * * * *
    (b) * * *
    (8) For India, there is a general policy of approval for license 
applications to export, reexport, or transfer items, including ``600 
series'' items, for civil or military end uses in India, for ultimate 
end use by the Government of India, for reexport to countries in 
Country Group A:5, or for return to the United States, so long as such 
items are not for use in nuclear, ``missile,'' or chemical or 
biological weapons activities.
* * * * *

0
3. Section 742.6 is amended by adding paragraph (b)(7) to read as 
follows:


Sec.  742.6   Regional Stability.

* * * * *
    (b) * * *
    (7) For India, there is a general policy of approval for license 
applications to export, reexport, or transfer items, including ``600 
series'' items, for civil or military end uses in India, for ultimate 
end use by the Government of India, for reexport to countries in 
Country Group A:5, or for return to the United States, so long as such 
items are not for use in nuclear, ``missile,'' or chemical or 
biological weapons activities.
* * * * *

PART 748--APPLICATIONS (CLASSIFICATION, ADVISORY, AND LICENSE) AND 
DOCUMENTATION

0
4. The authority citation for 15 CFR part 748 continues to read as 
follows:

    Authority: 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22 
U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 
U.S.C. 7210; Sec. 1503, Pub. L. 108-11, 117 Stat. 559; E.O. 12058, 
43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 
CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., 
p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 
13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Presidential 
Determination 2003-23, 68 FR 26459, 3 CFR, 2004 Comp., p. 320; 
Notice of November 12, 2015, 80 FR 70667 (November 13, 2015); Notice 
of August 4, 2016, 81 FR 52587 (August 8, 2016).


0
5. Section 748.15 is amended by revising paragraphs (a)(2) and (d) 
introductory text to read as follows:


Sec.  748.15   Authorization Validated End-User (VEU).

* * * * *
    (a) * * *
    (2) In evaluating an end user for eligibility under authorization 
VEU, the ERC will consider a range of information, including such 
factors as: The entity's record of exclusive engagement in appropriate 
end-use activities; the entity's compliance with U.S. export controls; 
the need for an on-site review prior to approval; the entity's 
capability of complying with the requirements of authorization VEU; the 
entity's agreement to on-site reviews by representatives of the U.S. 
Government to ensure adherence to the conditions of the VEU 
authorization; and the entity's relationships with U.S. and foreign 
companies. In addition, when evaluating the eligibility of an end user, 
the ERC will consider the status of

[[Page 6221]]

export controls and the support and adherence to multilateral export 
control regimes of the government of the eligible destination.
* * * * *
    (d) End-use restrictions. Items obtained under authorization VEU in 
China may be used only for civil end uses and may not be used for any 
activities described in part 744 of the EAR. Items obtained under 
authorization VEU in India may be used for either civil or military end 
uses and may not be used for any activities described in part 744 of 
the EAR. Exports, reexports, or transfers made under authorization VEU 
may be made to an end user listed in Supplement No. 7 to this part only 
if the items will be consigned to and for use by the validated end 
user. Eligible end-users who obtain items under VEU may only:
* * * * *

0
6. Paragraph (7)(ii) of the section titled Required Information for 
Validated End-User Authorization Requests in Supplement No. 8 to part 
748 is revised to read as follows:

Supplement No. 8 to Part 748--Information Required in Requests for 
Validated End-User (VEU) Authorization

* * * * *

Required Information for Validated End-User Authorization Requests

* * * * *
    (7) * * *
    (ii) Understands and will abide by all authorization VEU end-use 
restrictions, including the requirement that items received under 
authorization VEU will only be used for authorized end-uses and may 
not be used for any activities described in part 744 of the EAR;
* * * * *

    Dated: January 6, 2017.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2017-00439 Filed 1-18-17; 8:45 am]
 BILLING CODE 3510-33-P