BIS Final Rule Revises Interim Libya Regulations

The Bureau of Industry and Security (BIS) has issued a final rule, effective March 22, 2005, which amends the Export Administration Regulations (EAR) to implement further changes to export and reexport controls with respect to Libya. The majority of changes are based on comments submitted to BIS in response to an April 2004 interim rule that implemented new policies for exports and re-exports to Libya.

(In April 2004, in response to Libya's continued effort to dismantle its weapons of mass destruction and missile programs, and adhere to its renunciation of terrorism, the President announced the termination of the application of the Iran and Libya Sanctions Act with respect to Libya. The Treasury Department also modified certain sanctions imposed on U.S. firms and individuals to allow the resumption of most commercial activities, financial transactions, and investments.

BIS issued an April 2004 interim rule to set forth the new export control policy for exports and reexports to Libya under the licensing responsibility of the BIS. See ITT's Online Archives or 04/28/04 and 04/30/04 news, 04042805 and 04043015, for BP summaries of the President's April 23, 2004 decision and details of BIS' interim rule, respectively.)

Highlights of Changes and Clarifications Made to April 2004 Interim Rule

The following are highlights of BIS' discussion of the changes made by this final rule to the licensing policy set forth in the April 2004 interim rule (partial list):

Review policy & licensing procedure established for "installed base" items. BIS states that it is establishing a review policy and licensing procedure for activities involving items subject to the EAR that may have been illegally exported or reexported to Libya before the comprehensive embargo on Libya ended (such items are referred to as "installed base" items).

BIS has added 15 CFR 764.7 to address activities involving installed base items. BIS explains that the following activities involving installed base items will generally only require a report to BIS: items that are subject to the EAR but are not on the Commerce Control List (CCL); items on the CCL that are now authorized for export and re-export to Libya under a License Exception; and items on the CCL that are controlled only for national security (NS) and anti-terrorism (AT) or AT reasons only and are not on the Wassenaar Arrangement's Sensitive List or Very Sensitive List. However, activities involving all other installed base items listed on the CCL will require a BIS license to overcome the prohibition.

Case-by-case review of exports of certain oil well perforators. BIS is modifying the licensing policy for certain oil well perforators, a type of commercial charge controlled under Export Control Classification Number (ECCN) 1C992.

BIS has amended 15 CFR 742.20(b) to permit a case-by-case review of exports of perforators. BIS explains that rather than maintaining a general policy of denial, it is appropriate to take into account not only the end-use and end-user, but also the ability of the exporter and consignee to ensure the safety of the charges during transport to and within Libya, and while in storage in Libya.

Vessels may make temporary sojourns to Libya without BIS License. BIS is revising License Exception Aircraft and Vessels (AVS) to permit vessels to make temporary sojourns, as set forth in 15 CFR 740.15(d), to Libya without a license. BIS explains that most vessels are classified on the CCL under ECCN 8A992. Prior to this final rule, all vessels subject to the EAR bound for Libya required a license from BIS.

License Exception TMP available for software controlled under ECCN 5D992. BIS is modifying the language in License Exception Temporary Imports, Exports, and Re-exports (TMP) (15 CFR 740.9(a)(2)(i)) to make clear that this license exception is available for software controlled under ECCN 5D992.

Case-by-case review of applications to export/re-export aircraft and helicopters. BIS is modifying the licensing policy for application to export or re-export aircraft or helicopters to Libya, as set forth in 15 CFR 742.20(b). According to BIS, the U.S. government will now review applications for export or re-export of civil aircraft or helicopters on a case-by-case basis rather than under a general policy of denial.

Portable electric power generators and related software/technology require license. BIS' final rule also clarifies in 15 CFR 742.20 and Supplement No. 2 to 15 CFR Part 742 that portable electric power generators, controlled under ECCN 2A994, and related software and technology, controlled under ECCNs 2D994 and 2E994, require a license for export or re-export to Libya for anti-terrorism reasons.

ECCNs 8A992 & 8A992.f. address vessels as well as submersible items. BIS is amending 15 CFR Part 774 by adding the word "vessels" to the heading of ECCN 8A992 and to ECCN 8A992.f. in order to clarify that these headings address vessels in addition to submersible items.

BIS Contact - Joan Roberts (202) 482-4252

BIS Final Rule (D/N 040422128-5024-02, FR Pub 03/22/05) available athttp://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-5537.pdf