BIS Final Rule Revises CCL, Adds/Expands Unilateral U.S. Controls, Etc. to Conform to Wassenaar Changes (Part III)

The Bureau of Industry and Security (BIS) has issued a final rule, effective September 7, 2006, which amends the Export Administration Regulations (EAR) at 15 CFR Parts 740, 743, 772, and 774 to implement changes made to the Wassenaar Arrangement's List of Dual-Use Goods and Technologies (Wassenaar List), and Statements of Understanding maintained and agreed to by the governments participating in the Wassenaar Arrangement.

Specifically, this final rule revises certain entries on the Commerce Control List (CCL) that are controlled for national security reasons in Categories 1, 2, 3, 5 Part I (Telecommunications), 5 Part II (Information Security), 6, 8, and 9, and definitions to conform with changes in the Wassenaar List.

This is Part III of a multi-part series of summaries on this BIS final rule. Part III focuses on the amendments to CCL Category 1 (Materials, Chemicals, "Microorganisms," and Toxins) as well as CCL Category 2 (Materials Processing). See future issues of ITT for additional summaries.

The Export Control Classification Numbers (ECCNS) affected, as described below, are 1C008, 1C998, 1E001, 1E998, 2B002, 2B006, 2E201, 3A001, 3B001, 3B991, 3E001, 5A001, 5A002, 5A991, 5D001, 5D991, 6A006, 6D003, 6E003, 8A002, 9A001, 9A012, 9B010 (New), 9D001, 9D002, 9D004, 9E001, 9E002, and 9E003.

Amendments to Category 1 - Materials, Chemicals, "Microorganisms," and Toxins

BIS' final rule amends ECCN 1C008 by removing and reserving 1C008.c.1, because foreign availability has been proven, and continued national security control cannot be justified any longer.

The final rule adds ECCN 1C998 to continue antiterrorism (AT) controls on polyether ether ketone (PEEK), which was removed from 1C008.c.1. Therefore, BIS states that the materials no longer controlled under ECCN 1C008 continue to be controlled for AT reasons under ECCN 1C998 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 in Supplement No. 1 to 15 CFR Part 738.

The final rule amends ECCN 1E001 by revising the heading to exclude control of development and production technology for ECCNs 1B999, 1C995, 1C996, 1C997, 1C998, and 1C999, because none of these technologies are controlled on the Wassenaar List of Dual-Use Goods and Technologies.

BIS notes that this rule adds technology for commodities controlled by ECCNs 1B999, 1C995, 1C996, 1C997, and 1C999 to ECCN 1E998, which is controlled for antiterrorism reasons (AT:1).

The final rule adds ECCN 1E998 to maintain AT controls on technology for the development or production of materials that were controlled under 1C008.c.1 and are now controlled by ECCN 1C998. In addition, references to ECCNs 1B999, 1C995, 1C996, 1C997, and 1C999 have been moved from ECCN 1E001 to ECCN 1E998 to maintain AT controls on technology for the development or production of processing equipment and materials described in these ECCNs.

Amendments to Category 2 - Materials Processing

The final rule amends ECCN 2B002 by adding to the heading "(see List of Items Controlled)," and adding parameters for control of numerically controlled machine tools using a Magnetorheological finishing (MRF) process.

BIS notes that MRF tools are mostly used for optical components; therefore optical parameters were selected to describe the capability of the machines. One set of such parameters are form and finish; form referring to the shape of the optic and finish to the surface roughness. A form value describes how close the actual shape of the optic is to the design and finish value describes how smooth the surface is. MRF tools, such as interferometers and profilers are typically used to measure form, while profilometers and

scatterometers are used to measure finish.

The final rule amends ECCN 2B006 by:

a) Revising the NP paragraph in the License Requirements section, to except 2B006.b.1.d from NP controls because electronic assemblies do not appear under the Nuclear Suppliers Group Annex item 1.B.3;

b) Adding paragraph 2B006.b.1.d to control electronic assemblies specially designed to provide feedback capability in systems controlled by 2B006.b.1.c; and

c) Revising the Note to 2B006.b.1.

BIS notes that the combination of control and decontrol lead to the possibility of an ineffective control. These revisions together will enhance the effectiveness of control by explicitly controlling certain specially designed components. Equipment under 2B006 is controlled for national security reasons (NS:2), nuclear nonproliferation reasons (NP:1), and antiterrorism reasons (AT:1); Related software for the development, production, or use of 2B006 commodities is controlled for national security reasons (NS:1) and antiterrorism reasons (AT:1) under ECCN 2D001; related technology for the development or production of 2B006 commodities is controlled for national security reasons (NS:1) and antiterrorism reasons (AT:1) under ECCNs 2E001 and 2E002 respectively; related technology for the use of 2B006 commodities is controlled for nuclear proliferation reasons (NP:1) and antiterrorism reasons (AT:1) under ECCN 2E201.

The final rule amends ECCN 2E201 by:

a) Revising the heading to remove ECCN 2B008, because no international export control regime has controlled "use" technology for this ECCN;

b) Adding to the end of the heading the phrase "for NP reasons" to assure that ECCN 2E201 only controls use technology for NP controlled portions of the ECCNs listed in the heading; and

c) Revising the NP paragraph in the License Requirements section to remove the reference to 2B008.

(See ITT's Online Archives or 09/19/06 and 09/21/06 news, 06091915 and 06092120, for Parts I and II of BP summary.)

BIS final rule (D/N 060807211-6211-01, FR Pub 09/07/06) available at http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/06-7385.pdf