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, (Ref:02120335), for BP summary of the State Department's November 2002 final rule.)

This is Part II of a two-part series of summaries of this final rule. Part II concerns those chemicals transferred from the CCL to the USML and conforming changes to Export Control Classification Number (ECCN) 1C350.

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

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

ECCN 1C350:

Six chemicals. According to BIS, this final rule removes 0-ethyl-2-diisopropyl aminoethyl methylphosphonite (QL), ethyl phosphonyl difluoride, and methyl phosphonyl difluoride (DF), from the CCL by removing and reserving paragraph (a) in the List of Items Controlled'' section of ECCN 1C350.

This final rule also removes methylphosphonous dichloride, methylphosphonous difluoride, and methylphosphonyl dichloride from the CCL by removing and reserving subparagraphs (b.15) (b.16) and (b.17) in the List of Items Controlled section of ECCN 1C350. These six chemicals are now on the USML.

In addition, BIS states that this final rule removes references to ECCN 1C350.a from the following: paragraph (a)(2)(i)(A) of 15 CFR 742.2; paragraphs (a)(1), (b)(1)(i), (b)(1)(ii), and (b)(1)(iii) of 15 CFR 742.18; paragraph (q) of 15 CFR part 748, Supplement No. 2; the Reason for Control and License Requirements Notes paragraphs of the License Requirements section of ECCN 1C350; the Related Controls paragraph of the License Requirements section of 1C395; and the Related Controls Paragraph of the List of Items Controlled section of ECCN 1C995.

Similarly, this final rule removes the following references to chemicals that are now subject to the licensing jurisdiction of DTC and no longer subject to the licensing control of BIS. References to methylphosphonyl difluoride are removed from paragraphs (1), (4) and (8) and methylphosphonyl dichloride is removed from paragraph (8) of 15 CFR Part 742, Supplement No. 1, which deals with contract sanctity dates.

In addition, references to 0-ethyl-2-diisopropyl aminoethyl methylphosphonite (QL), ethyl phosphonyl difluoride, methyl phosphonyl difluoride (DF), methylphosphonous dichloride, methylphosphonous difluoride, and methylphosphonyl dichloride and their synonyms are removed from paragraph (k) of 15 CFR 770.2, which provides alternative names for chemicals subject to ECCN 1C350.

Antiterrorism controls. According to BIS, in the "License Requirements'' section of ECCN 1C350, this final rule also replaces the reference to 15 CFR Part 742 of the EAR as the source of information about antiterrorism controls that apply to Syria with a reference to Supplement No. 1 to 15 CFR Part 736.

The final rule also replaces the reference to 15 CFR Part 746 as the source of information about antiterrorism controls that apply to Libya with a reference to 15 CFR Part 742. BIS explains that these changes are being made to make this ECCN conform to a recently published interim rule about Libya as well as a final rule about the general order implementing the Syria Accountability and Lebanese Sovereignty Act.

(See ITT's Online Archives or 04/30/04 news, 04043015, for BP summary of BIS' interim rule on exports/reexports to Libya. See ITT's Online Archives or 05/18/04 news, 04051815, for BP summary of BIS' final rule implementing sanctions against Syria.)

Limited "Grace Period" for Licensing

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

BIS states that items that will require an export or reexport license from BIS upon publication of this rule and that, prior to publication of this 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.

(See ITT's Online Archives or 07/27/04 news, 04072725, for Part I of BP's summary of this final rule.)

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