Export Licensing Jurisdiction for Certain Energetic Material and Chemicals Revised

The Bureau of Industry and Security (BIS) has issued a final rule which amends the Export Administration Regulations (EAR) at 15 CFR Parts 742, 748, 770, and 774, effective July 19, 2004, in order to implement decisions to move export licensing jurisdiction of certain types of energetic materials and other chemicals from the State Department's Directorate of Defense Trade Controls (DTC) to BIS, as well as to move such jurisdiction for other chemicals from BIS to DTC.

According to BIS, this final rule, along with a complementary final rule published by the State Department in November 2002, implements decisions reached in an ongoing review of the U.S. Munitions List (USML) that is part of the Defense Trade Security Initiative. BIS states that this Initiative includes annual review of portions of the USML with the objective of reviewing the entire list every four years. (See ITT's Online Archives or 12/03/02 news, 02120335, for BP summary of the State Department's November 2002 final rule.)

This is Part I of a two-part series of summaries of this final rule. Part I concerns those chemicals transferred from the USML to the Commerce Control List (CCL). See future issue of ITT for Part II of this summary.

Highlights of Final Rule's Transfers of Certain Chemicals from USML to CCL

The following are "highlights" of the changes concerning chemicals that are being transferred from the USML to the CCL (partial list):

ECCN 1C355:

Chloropicrin. BIS' final rule adds chloropicrin to Export Control Classification Number (ECCN) 1C355 by creating a new paragraph (b.1.d) in the List of Items Controlled section of that entry. This action imposes a reexport license requirement on chloropicrin that is subject to the EAR when reexported from one country that is not a party to the Chemical Weapons Convention (CWC) to another country not a party to the CWC, and when exported from the U.S. to a country not a party to the CWC if the exporter has not received an End Use Certificate issued by the importing country.

BIS states that this final rule also imposes a license requirement for antiterrorism reasons for exports and reexports of chloropicrin to a limited number of destinations.

According to BIS, this final rule removes a reference to chloropicrin as being under the export license jurisdiction of DTC in the Related Controls paragraph of the List of Items controlled section of ECCN 1C355.

ECCN 1C018:

Propyleneimine. BIS' final rule adds propyleneimine (2-methylaziridine) (CAS 75-55-8) to ECCN 1C018 by adding a new paragraph (l) to the List of Items Controlled section of ECCN 1C018.

Certain oxidizers and mixtures thereof that are compounds of fluorine. The final rule also adds oxidizers and mixtures thereof that are compounds composed of fluorine and one or more of the following: other halogens, oxygen, or nitrogen to ECCN 1C018 by adding a new paragraph (m) to that entry and by adding "MT column 1'' as a reason for control applicable only to the items covered by the new paragraph (m) because these oxidizers are listed on both the Missile Technology Control Regime (MTCR) Annex and the Munitions List maintained by the Wasssenaar Arrangement. BIS notes that the addition of the oxidizers and mixtures to new paragraph ECCN 1C018.m is a new foreign policy control.

However,a note to new paragraph ECCN 1C018.m excludes nitrogen trifluoride (NF3) in a gaseous state and refers readers to ECCN 1C992 (see below). In addition, another note to that paragraph excludes chlorine triflouride (ClF3) from national security controls. BIS states that cross references are added to the "Related Controls'' paragraphs of ECCN 1C018 and ECCN 1C238 to alert readers that both entries impose controls on ClF3.

The final rule adds a sentence to the Related Controls paragraph of ECCN 1C018 to alert readers to the fact that chemicals being added to those ECCNs by this final rule are subject to the EAR unless they are incorporated into an item on the USML.

This final rule also imposes a license requirement on the chemicals that it adds to ECCN 1C018 for antiterrorism reasons to some destinations.

In addition, a note is added to ECCN 1C018 providing that when a chemical in paragraphs .1 or .m of ECCN 1C018 is incorporated into a commercial charge or device described in paragraphs .a through .k of ECCN 1C018 or of ECCN 1C992, the item is classified as the commercial charge or device.

ECCN 1A984:

Liquid Pepper. The State Department's November 2002 final rule also removed liquid pepper from the USML. BIS states that this final rule adds liquid pepper, except when in individual containers with net weight of 3 ounces (85.05 grams) or less, to ECCN 1A984. BIS states that this addition is a new foreign policy control.

ECCN 1C992:

Nitrogen trifluoride in a gaseous state. According to BIS, this final rule also revises the heading and list of items controlled paragraph in ECCN 1C992 to add nitrogen trifluoride in a gaseous state. It also adds a reference to 1C018 to the related controls paragraph of 1C992 alerting readers to the fact that nitrogen trifluoride when not in a gaseous state is controlled by 1C018

Limited "Grace Period" for Licensing

According to BIS, items that this final rule transfers to BIS export licensing jurisdiction, and that have been authorized for export or reexport pursuant to a license issued by DTC, may be exported or reexported in accordance with the terms of that license until that license expires.

Items that will require an export or reexport license from BIS upon publication of this final rule and that, prior to publication of this final rule, were eligible for export or reexport under a License Exception or with no license required (NLR) may be exported or reexported under those conditions if they are on dock for loading, on lighter, laden aboard an exporting carrier or en route aboard a carrier to a port of export on August 2, 2004, pursuant to actual orders for export to a specific destination, and actually are exported from the United States or reexported from another country before August 16, 2004. Any such items not actually exported or reexported before midnight August 16, 2004 may be exported or reexported only if authorized by BIS.

BIS Contacts -

BIS Final Rule (D/N 031202303-3303-01, FR Pub 07/19/04) available at http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-16351.pdf