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

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 V of a multi-part series of summaries on this BIS final rule. Part V focuses on the remaining amendments affecting CCL Category 3 (Electronics), as well as the amendments affecting CCL Category 5 - Part I (Telecommunications). See Part IV for other changes to CCL Category 3. See future issues of ITT for additional summaries.

Amendments to Category 3 - Electronics (Continued)

ECCN 3E001. BIS' final rule amends Export Control Classification Number (ECCN) 3E001 by:

(a) Removing the text in the CIV paragraph of the License Exception section and replacing it with "N/A", as it is no longer necessary because of the agreed upon deletions in 3A001 by the Wassenaar Arrangement; and

(b) Revising the heading to add exceptions from this technology control over commodities in ECCN 3C992, because this technology is not controlled on the Wassenaar List of Dual-Use Goods and Technologies.

BIS notes that this rule adds ECCN 3C992 to the heading of ECCN 3E991 to maintain antiterrorism (AT:1) controls on the technology for the development, production or use of commodities described in ECCN 3C992.

BIS also notes that the equipment no longer controlled under ECCNs 3A001.a.3.c and 3B001.a.1.a, related software under ECCNs 3D001 and 3D002, and related technology under ECCNs 3E001 continues to be controlled for antiterrorism reasons under ECCNs 3A991.a.3, 3B991.b.1.d.1, 3D991, and 3E991 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. BIS notes that technology for the development and production of microprocessor microcircuits, micro computer microcircuits and microcontroller microcircuits having a composite theoretical performance (CTP) of 530 MTOPS or more and an arithmetic logic unit with an access width of 32 bits or more continue to be controlled for national security reasons under ECCN 3E002.

ECCN 3E991. The final rule amends ECCN 3E991 by revising the heading to add technology controls for development, production, or use of specific processing equipment described in 3A991, and materials controlled by 3C992 (positive resists designed for semiconductor lithography * * *), because this technology warrants anti-terrorism (AT) controls.

Amendments to Category 5 - Part I - Telecommunications

ECCN 5A001. The final rule amends ECCN 5A001 by:

(a) Adding the phrase ", as follows (see List of Items Controlled)" to the heading.

(b) Revising the License Requirements section to reflect that there is a license requirement for jamming equipment described in newly added paragraph 5A001.f to countries that have an "X" in NS Column 2 of the Commerce Country Chart in Supplement No.1 of 15 CFR Part 738.

BIS notes that 5A001.f is eligible for License Exceptions LVS, GBS, and CIV, if the criteria in 15 CFR Part 740 for the license exception authorizing the export or reexport has been met and none of the license exception restrictions of 15 CFR 740.2 apply to the transaction.

BIS notes that related software for the development, production, or use of this equipment is controlled for national security reasons (NS:1) and antiterrorism reasons (AT:1) under ECCN 5D001, and related technology for the development, production, or use of this equipment is controlled for national security reasons (NS:1) and antiterrorism reasons (AT:1) under ECCN 5E001.

(c) Adding "or antennae" to the Unit paragraph of the List of Items Controlled section.

(d) Revising the second note following 5A001.a.3 to add the phrase "designed or modified for use" to conform with the corresponding entry in the Wassenaar Arrangement's List of Dual-Use Goods and Technologies.

(e) Adding the phrase "not controlled in 5A001.b.4" to 5A001.b.3 to avoid overlapping controls with the new parameters in 5A001.b.4.

(f) Revising 5A001.b.4 (radio equipment employing ultra-wideband modulation techniques) so that it would be independent of the modulation technique employed in ultra-wideband (UWB) (i.e., not limited to "time modulation" (TM)). Today, in addition to TM-UWB, Direct Sequence-Spread Spectrum (DS-SS) and Multi-Band Orthogonal Frequency Division Multiplex (MB-OFDM) have appeared as different modulation techniques for UWB. Because of the emergence of DS-SS and MB-OFDM, the previously standing text of 5A001.b.4 and 5A002.a.6, were limited to TM-UWB, which created a loophole.

(g) Adding a Technical Note 2 for 5A001.b.6, because the bandwidth of audio-coding (20-22,000 Hz) overlaps the bandwidth of voice-coding (300-3,400 Hz), and the scope of control in the context of 5A001.b.6 is only adopted to "voice coding." It is necessary to clearly indicate that "voice coding" controlled in 5A001.b.6 is a voice-coding technique that uses voice-coding algorithms that are based on peculiar human voice characteristics.

(h) Adding a descriptor "Radio" to make it "Radio direction finding equipment" in 5A001.e; changing the "Instantaneous bandwidth" from "1 MHz or more" to "10 MHz or more" in 5A001.e.1; and replacing the parallel processing parameter with the capability to find a line of bearing (LOB) to non-cooperating radio transmitters with a signal duration of less than 1 ms in 5A001.e.3.

BIS notes that in 2004, the Wassenaar Expert's Group determined that ECCN 7A007 was not navigation or avionics equipment and belonged instead in Category 5 Part 1; it was determined that the equipment controlled by that ECCN should be placed in a revised paragraph 5A001.e. In the course of the discussion, it was also found that the level of the ECCN 7A007 control was set so high as to not control systems of potential concern. In addition, the ECCN 7A007 control text is technology-specific.

BIS notes that previously, the text in 5A001.e was found to only control one specific, highly-advanced system. The revised text of ECCN 5A001.e is written in an effort to set forth provisions that control systems of concern and support a level playing field in the global marketplace. Advanced DF systems, which can direction-find against short-duration signals and frequency-hopping radios are of particular concern because they can be used by military forces of countries of concern to locate and target advanced tactical communications equipment. BIS states that because the system accuracy of a direction finder is directly related to the antenna geometry of the direction finder, and thus does not imply a high degree of know-how, this revision is based on the control parameter "Instantaneous bandwidth", which is the decisive factor for direction finding against frequency-hopping radios and signals of the short duration type.

(i) Adding paragraph 5A001.f to control sophisticated cellular phone jamming equipment. Equipment of this type is capable of selectively jamming cellular phone communications, which can pose a national security threat.

ECCN 5A991. The final rule amends ECCN 5A991 by:

(a) Adding the definition of 'Asynchronous transfer mode' ('ATM') to the related definitions paragraph of the List of Items Controlled section; and

(b) Replacing the double quotes with single quotes around the term 'Asynchronous transfer mode' ('ATM') in paragraph 5A991.c.12, to signify that the definition is found in the related definitions section of 5A991 and no longer in 15 CFR Part 772.

ECCN 5D001. The final rule amends ECCN 5D001 by:

(a) Moving 5D001.c.1 into 5D001.c;

(b) Deleting the reserved paragraph 5D001.c.2; and

(c) Removing 5D001.c.3, because consensus was reached to delete 5D001c3 controlling the source code specially designed for dynamic adaptive routing. This technology has become widely available due to the recent expansion of packet telecommunication networks, such as the internet.

BIS notes that the software removed from ECCN 5D001.c.3, and related technology under ECCN 5E001 continue to be controlled for antiterrorism (AT:1) reasons under ECCNs 5D991 and 5E991 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.

ECCN 5D991. The final rule amends ECCN 5D991 by revising the heading and the "items" paragraph in the List of Items Controlled section to add reference to the software removed from 5D001.c.3 ("Software", other than in machine-executable form, specially designed for "dynamic adaptive routing").

(See ITT's Online Archives or 09/19/06, 09/21/06, 09/22/06 and 09/25/06 news, 06091915, 06092120, 06092230, and 06092530 for Parts I, II, III and IV 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