BIS Final Rule Makes Nuclear Grade Graphite Intended for Non-Nuclear End Uses Subject to EAR & Imposes License Requirements for Exports/ Reexports

The Bureau of Industry and Security (BIS) has issued a final rule, effective July 21, 2005, which makes nuclear grade graphite intended for non-nuclear end uses subject to the Export Administration Regulations' (EAR) licensing jurisdiction, and imposes a license requirement for exports and reexports of such material to destinations of concern for nuclear proliferation (NP) reasons.

In addition, the Nuclear Regulatory Commission (NRC) issued a corresponding final rule, effective July 21, 2005, that discontinues NRC licensing jurisdiction of nuclear grade graphite intended for non-nuclear uses, among other things. BIS states that the transfer of jurisdiction from the NRC to BIS and the imposition of license requirements only to destinations of concern for NP reasons are intended to remove the licensing burden on exporters of nuclear grade graphite intended for non-nuclear end uses to most destinations.

BIS notes that although the NRC's final rule removes the density parameter from its definition of nuclear grade graphite, this final rule retains the density parameter for nuclear grade graphite for non-nuclear end use in conformance with a Nuclear Suppliers Group's (NSG's) definition of "nuclear grade graphite."

(According to BIS, most U.S. bulk, non-fabricated graphite is now nuclear grade and the NRC has determined that the majority of nuclear grade graphite exports are intended for non-nuclear commercial end uses. The NRC has also determined, in consultation with other agencies, that, consistent with certain multilateral definitions of controlled items, exports of nuclear grade graphite intended for uses other than in a nuclear reactor are not significant from an NP perspective.)

Highlights of Final Rule Concerning Nuclear Grade Graphite for Non-Nuclear Use

In this final rule, BIS makes the following amendments and additions to the EAR in order to incorporate nuclear grade graphite intended for non-nuclear end uses (see final rule for complete details):

NRC jurisdiction is amended, nuclear grade graphite to be defined on basis of purity. BIS is revising Export Control Classification Number (ECCN) 0C005 on the Commerce Control List, which describes graphite that is subject to NRC jurisdiction, by removing the density parameter for nuclear grade graphite, so that nuclear grade graphite is defined only on the basis of its purity, consistent with the NRC definition in its corresponding rule. This final rule also revises ECCN 0C005 to reflect the NRC scope of jurisdiction for graphite intended for use in a nuclear reactor.

Control of nuclear grade graphite exports to certain countries.This final rule also adds a new ECCN 1C298 to control the export of nuclear grade graphite with a purity level of less than 5 parts per million "boron equivalent'' and a density greater than 1.5 grams per cubic centimeter to countries indicated under NP column 2 on the Commerce Country Chart.

Related controls for other graphite-controlling ECCNs. This final rule adds "related controls'' notes to ECCNs 0C005, 1C107 and 1C298 to provide cross-references among all ECCNs that control any type of graphite. ECCN 1C107 controls graphite that meets certain density parameters for missile technology and antiterrorism reasons.

Certain nuclear grade graphite classified as EAR99. In light of NRC's discontinued jurisdiction over graphite exports not intended for nuclear end use, nuclear grade graphite that is not described in ECCNs 1C107 or 1C298 is classified as EAR99 when intended for a use other than in a nuclear reactor. However, such graphite may require a license for reasons specified elsewhere in the EAR, for example, the end-user/end-use restrictions described in 15 CFR part 744 or the restrictions described in 15 CFR part 746.

(Although the Export Administration Act expired on August 20, 2001, BIS states that Executive Order 13222, as extended, continues the EAR in effect under the International Emergency Economic Powers Act.)

BIS states that "nuclear grade" indicates a purity level of less than 5 parts per million "boron equivalent" as measured according to American Society for Testing and Materials (ASTM) standard C-1233-98.

-although there is no formal comment period, BIS welcomes public comments on a continuing basis

BIS Contact - Jeffery Lynch (202) 482-2440

BIS Final Rule (D/N 050707179-5179-01, FR Pub 07/21/05) available athttp://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-14412.pdf

NRC Final Rule (FR Pub 07/21/05, available at http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-14208.pdf