BIS Final Rule Revises CCL to Conform With Wassenaar Changes, Addition/Expansion of Unilateral U.S. Controls, Etc. (Part VI)

The Bureau of Industry and Security (BIS) has issued a final rule, effective July 15, 2005, which revises certain entries on the Commerce Control List (CCL) that are controlled for national security reasons in Categories 1, 2, 3, 4, 5 Part I (telecommunications), 6, 7, 8, and 9, and definitions to conform with changes in the Wassenaar Arrangement's List of Dual-Use Goods and Technologies and Statements of Understanding maintained and agreed to by governments participating in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (Wassenaar Arrangement).

In addition, this final rule adds Slovenia to the list of Wassenaar member countries in the EAR. This final rule also adds or expands unilateral U.S. controls on certain items consistent with the amendments made to implement the Wassenaar Arrangement's decisions.

This is Part VI of a multi-part series of summaries on this BIS final rule. Part VI covers CCL Categories 4 (Computers) and 5 (Part I - Telecommunications). See future issues of ITT for additional summaries.

Amendments to Category 4 - Computers

ECCN 4A003. In this final rule, ECCN 4A003 is amended by making an editorial correction, removing a reference to "4A003.d'' in Note 1 to 4A003.c.

ECCN 4A994. ECCN 4A994 is amended in this final rule by making an editorial correction, clarifying the reference to "4A994'' to read "4A994.g and 4A994.k'' in Note 1 to 4A994.c.

ECCN 4D001 & ECCN 4E001. This final rule amends ECCN 4D001 by:

(a) Removing the License Requirement Note that provided a reference to Wassenaar reporting requirements for computer software under ECCN 4D001, because this rule removed this Wassenaar reporting requirement.

(b) Raising the Composite Theoretical Performance (CTP) limit from "33,000 MTOPS'' to "190,000 MTOPS'' in the License Exception Technology and Software under Restrictions (TSR) eligibility paragraph under the License Exception section of ECCN 4D001.

(c) Raising the CTP control threshold for software for the production, development, or use of computers from "28,000 MTOPS'' to "75,000 MTOPS'' in 4D001.b.1.

BIS explains that ECCN 4E001 is amended by:

(a) Removing the License Requirement Note that provided a reference to Wassenaar reporting requirements for computer technology under ECCN 4E001, because this rule removed this Wassenaar reporting requirement.

(b) Raising the CTP limit from "33,000 MTOPS'' to "190,000 MTOPS'' in the License Exception TSR eligibility paragraph under the License Exception section of 4E001.

(c) Raising the CTP control threshold for technology for the production, development, or use of computers from "28,000 MTOPS'' to "75,000 MTOPS'' in 4E001.b.1.

According to BIS, these amendments to 4D001 and 4E001 were agreed to in the Wassenaar Arrangement because digital computers capable of either 75,000 or 190,000 MTOPS are becoming more common. The Wassenaar Arrangement recognized this with its decontrol of hardware to 190,000 MTOPS.

BIS explains that most of the multi-processor computer servers sold in this range are for commercial applications. It is for these reasons that the Wassenaar Arrangement removed computer technology and software from the Annex 2 (Very Sensitive List), raised the Annex 1 (Sensitive List) threshold from "150,000 MTOPS'' to "190,000 MTOPS,'' and raised the control threshold from "33,000 MTOPS'' to "75,000 MTOPS.'' Therefore, this rule revises to the CTP limit for License Exception TSR eligibility in ECCNs 4D001 and 4E001 accordingly.

BIS expects that the raising of the threshold for computer software and technology in 4D001 and 4E001, along with raising the eligibility limit for License Exceptions TSR and CTP will decrease the number of Category 4 license applications received by BIS by about 15 percent (i.e., 150 applications) over the next 6 months.

BIS notes that software and technology no longer controlled under ECCNs 4D001 and 4E001 continue to be controlled for antiterrorism (AT) reasons under ECCN 4D994 and 4E992, respectively, for exports and reexports to designated terrorism-supporting countries, as set forth in 15 CFR parts 742 and 746 and as indicated in AT Column 1 of the Commerce Country Chart.

Amendments to Category 5 (Part I - Telecommunications)

ECCN 5A001. According to BIS, ECCN 5A001 is amended by:

(a) Raising the operating frequency for electronically steerable phased array antennae from "31 GHz'' to "31.8 GHz'' in paragraph 5A001.d.

According to BIS, in 2003, all frequency control units in Categories 3 and 5 were changed from 31 GHz to 31.8 GHz, except 5.A.1.d. This revision is a technical correction to implement a change that was inadvertently overlooked in 2003.

(b) Moving ECCN 7A007 to 5A001.e - direction-finding equipment operating at frequencies above 30 MHz, and having other characteristics set forth in 5A001.e.1 through e.3, and specially designed components therefor.

This final rule adds a note to the Related Controls paragraph in the List of Items Controlled section that states, "Direction finding equipment defined in 5A001.e is subject to the export licensing authority of the Department of State, Directorate of Defense Trade Controls (22 CFR part 121).'' Direction finding equipment defined in 5A001.e is specifically excluded from eligibility for License Exceptions LVS, GBS, and CIV, because this equipment will remain under the jurisdiction of the Department of State, Directorate of Defense Trade Controls.

BIS also states that in this final rule, ECCN 7A007 is moved to 5A001.e to ensure that direction-finding equipment for navigation is not confused with direction-finding equipment for surveillance. Direction finding equipment defined in 5A001.e is subject to the export licensing authority of the Department of State, Directorate of Defense Trade Controls (22 CFR part 121), because radio surveillance equipment and systems capable of finding the line-of-bearing (LOB) to a radio transmitter are used in tactical applications for locating and targeting hostile emitters. Historically, direction finding equipment for surveillance equipment has been controlled under International Munitions List (IML) Category 11.

However, the International Telecommunications Union Spectrum Monitoring Handbook recommends that civil spectrum authorities employ radio-surveillance direction finding systems (DF) capable of finding the LOB to emitters with signals with a duration of less than 10 milliseconds. Systems which meet and exceed this threshold are marketed for this purpose, indicating that surveillance equipment and systems for locating non-cooperating emitters may be becoming more dual-use in nature, even though it is still of tactical interest.

(See ITT's Online Archives or 07/19/05, 07/22/05, 07/25/05, 07/26/05, and 07/27/05 news, 05071930, 05072215, 05072515, 05072620, and 05072725, for Parts I-V of BP's summary.)

BIS final rule (D/N 050607153-5153-01, FR Pub 07/15/05) available at http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-13581.pdf.