BIS Final Rule Amends EAR to Implement Understandings Reached at Australia Group Meeting, Etc. (Part II - Final)

The Bureau of Industry and Security (BIS) has issued a final rule, effective November 24, 2006, which amends the Export Administration Regulations (EAR) to implement the understandings reached at the June 2006 plenary meeting of the Australia Group (AG). This final rule also updates the list of countries that currently are States Parties to the Chemical Weapons Convention (CWC), etc.

According to BIS, the AG is a multilateral forum, consisting of 39 participating countries, that maintains export controls on a list of chemicals, biological agents, and related equipment and technology that could be used in a chemical or biological weapons program.

BIS explains that the AG periodically reviews items on its control list to enhance the effectiveness of participating governments' national controls and to achieve greater harmonization among these controls.

This is Part II, the final part of a two-part summary of BIS' final rule, and covers technical and typographical corrections, the clarification of certain license application requirements, the addition of two countries as CWC States Parties, and the savings clause. (See ITT's Online Archives or 11/29/06 news, 06112930, for Part I of BP summary.)

Technical and Typographical CCL Corrections

BIS states that this final rule corrects errors contained in two Commerce Control List (CCL) entries that were amended by a final rule that BIS published on December 29, 2004. This rule corrects a typographical error involving a Chemical Abstracts Service (C.A.S.) registry number in ECCN 1C350, which controls AG-listed precursor chemicals. Specifically, the C.A.S. number for N,N-dimethylaminophosphoryl dichloride in 1C350.b.23 is revised to read "C.A.S. 677-43-0," instead of "C.A.S. 667-43-0." (See ITT's Online Archives or 01/05/05 news, 05010545, for BP summary of BIS' December 29, 2004 final rule.)

This rule also corrects an error in ECCN 1C355, which controls certain CWC Schedule 2 or Schedule 3 chemicals not included on any of the AG Common Control Lists. The December 29, 2004, final rule amended ECCN 1C350 by adding the CWC Schedule 3 chemical ethyldiethanolamine (C.A.S. 139-87-7) and eight other precursor chemicals to reflect an AG intersessional decision, which was adopted after the June 2004 annual plenary meeting, to add these precursor chemicals to the "Chemical Weapons Precursors" AG Common Control List. As part of this change, the rule also should have removed ethyldiethanolamine (C.A.S. 139-87-7) from ECCN 1C355.b.2.a, but inadvertently failed to do so. This final rule corrects that oversight.

Clarification of Certain License Application Requirements

According to BIS, this rule also amends 15 CFR 742.2, which describes AG-related license requirements and licensing policies, to clarify certain AG-related license application requirements. Specifically, this rule adds a new paragraph (e) to indicate that, even if an AG-related item is licensed by "$ value" (e.g., human and zoonotic pathogens and toxins, plant pathogens, genetic elements and genetically modified organisms, and select agents and toxins), the EAR still require that the unit of quantity commonly used in the trade also be shown on the license application.

BIS states that this new paragraph also contains a reference to paragraph (a) of Supplement No. 2 to 15 CFR Part 748, which describes unique application and submission requirements for chemicals, medicinals, and pharmaceuticals.

Addition of Central African Republic and Comoros as CWC States Parties

BIS states that this rule revises Supplement No. 2 to 15 CFR Part 745 (titled "States Parties to the Convention on the Prohibition of the Development, Production, Stockpiling, and Use of Chemical Weapons and on Their Destruction") by adding the Central African Republic and Comoros, which recently became States Parties to the CWC. As a result of this change, the license requirements and policies that apply to exports and reexports of items controlled for CW reasons to each of these countries now conform with those applicable to other CWC States Parties, as described in 15 CFR 742.18.

Savings Clause

BIS' final rule provides that shipments of items removed from eligibility for export or reexport under a license exception or without a license (i.e., under the designator "NLR") as a result of this final rule that were on dock for loading, on lighter, laden aboard an exporting carrier, or en route aboard a carrier to a port of export, on December 26, 2006, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previously applicable license exception or without a license (NLR) so long as they are exported or reexported before January 8, 2007. Any such items not actually exported or reexported before midnight, on January 8, 2007, require a license in accordance with this final rule.

BIS states that "deemed" exports of "technology" and "source code" removed from eligibility for export under a license exception or without a license (under the designator "NLR") as a result of this final rule may continue to be made under the previously available license exception or without a license (NLR) before January 8, 2007. Beginning at midnight on January 8, 2007, such "technology" and "source code" may no longer be released, without a license, to a foreign national subject to the "deemed" export controls in the EAR when a license would be required to the home country of the foreign national in accordance with this final rule.

-public comments are welcome on a continuing basis

BIS contact - Elizabeth Scott (202) 482-3343

BIS final rule (D/N 061027281-6281-01, FR Pub 11/24/06) available at http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/E6-19825.pdf