BIS Issues Final Rule Implementing Numerous Wassenaar Changes (Part II - New/Expanded Export Controls)

The Bureau of Industry and Security has issued a final rule, effective November 5, 2007¹, which revises the Export Administration Regulations to implement changes to the (1) Wassenaar Arrangement's List of Dual Use Goods and Technologies (Wassenaar List), and (2) 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, or WA), as agreed upon in the December 2006 Wassenaar Arrangement Plenary Meeting.

(The Wassenaar Arrangement advocates implementation of effective export controls on strategic items with the objective of improving regional and international security and stability.)

This is Part II of a multipart series of summaries of this final rule, and focuses on the new and expanded national security and antiterrorism export controls imposed by the final rule. See footnote for savings clause. See future issues of ITT for additional summaries.

New and Expanded National Security (NS) Export Controls

BIS' final rule imposes new controls and expands NS (National Security) Column 1 and 2 controls.

NS Column 1 controls. The final rule imposes a license requirement under 15 CFR 742.4(a) for exports and reexports to all destinations, except Canada, of certain commodities (and related software and technology) described in Export Control Classification Numbers (ECCNs) 1E002.g, 3E001, 7A001, 7A002.a and .c, 7A003.d, 7D001, 7D003, 7E001, 7E002, 7E004.a.7, 9D004.f and .g. (These destinations have an "X" indicated in NS column 1 on the Commerce Country Chart of 15 CFR Part 738, Supplement No. 1.)

For designated terrorism supporting countries or embargoed countries, the applicable licensing policies are found in 15 CFR Parts 742 and 746, and Supplement No. 1 to 15 CFR Part 736 for Syria.

NS Column 2 controls. This rule imposes a license requirement under 15 CFR 742.4(a) for exports and reexports of commodities (and related software and technology) described in 1C005.a, 1C005.b.1, 1C005.b.2, 1C005.c, 1D003, 2B002.c, 2B002.d, 3A001.b.9, 3A001.e.4, 3A001.g, 3B001.f.2, 3B001.i, 3C005, 5A001.g, 6A008.a, 7A008, 8A002.a, 8A002.a.4 (components) to destinations that are not Country Group A:1 destinations, or that are not cooperating countries (see 15 CFR Part 740, Supplement No. 1). (These destinations have an "X" indicated in NS column 2 on the Commerce Country Chart of 15 CFR Part 738, Supplement No. 1.)

For designated terrorism supporting countries or embargoed countries, the applicable licensing policies are found in 15 CFR Parts 742 and 746, and 15 CFR Part 736, Supplement No. 1 for Syria.

Licensing policy for NS controlled exports/reexports. BIS states that the licensing policy for NS controlled items exported or reexported to any country except a country in Country Group D:1 (see 15 CFR Part 740, Supplement No. 1) is to approve license applications unless there is a significant risk that the items will be diverted to a country in Country Group D:1.

The general policy for exports and reexports of items to Country Group D:1 is to approve license applications when BIS determines, on a case by case basis, that the items are for civilian use or would otherwise not make a significant contribution to the military potential of the country of destination that would prove detrimental to the national security of the U.S.

New and Expanded Antiterrorism (AT) Export Controls

This rule imposes new controls and expands antiterrorism (AT) controls.

This rule imposes a unilateral U.S. license requirement to export and reexport commodities (and related software and technology) controlled under 1C005.a, 1C005.b.1, 1C005.b.2, 1C005.c, 1D003, 1E002.g, 2B002.d.2, 2B002.d.3, 3A001.b.9, 3A001.e.4, 3A001.g, 3B001.f.2, 3B001.i, 3C005, 3E001, 5A001.g, 6A008.a, 7A001, 7A002.a and .c, 7A003.d, 7A008, 7D001, 7D003.a and .b, 7E001, 7E002, 7E004.a.7, A002.a, 8A002.a.4 (components), and 9D004.f and .g for AT reasons to Cuba, Iran, North Korea, Sudan and Syria, in addition to the NS controls imposed to implement the Wassenaar Arrangement's decisions.

BIS states that these unilateral export controls are necessary because under Section 6(j) of the Export Administration Act of 1979, a license is required for items that could make a significant contribution to the military potential of such country or that could enhance the ability of such country to support acts of international terrorism.

There is a general policy of denial for applications to terrorism supporting countries, as set forth in 15 CFR Part 742. In addition, certain of these countries are also subject to embargoes, as set forth in 15 CFR Part 746 and 15 CFR Part 736, Supplement No. 1 for Syria. A license is also required for the export and reexport of these items to specially designated terrorists and foreign terrorist organizations, as set forth in 15 CFR Part 744; license applications to these parties are reviewed under a general policy of denial.

¹See Part I of BP's series of summaries for details on the final rule's "savings clause" for exports on dock for loading, on lighter, or laden aboard an exporting carrier, or en route aboard a carrier to a port of export.

(See ITT's Online Archives or 11/08/07 news, 07110825, for Part I.)

(Comments regarding the collections of information associated with this rule, including suggestions for reducing the burden, should be sent to OMB Desk Officer, New Executive Office Building, Washington, DC 20503. Attention: David Rostker; and to the Office of Administration, Bureau of Industry and Security, Department of Commerce, 14th St. and Pennsylvania Avenue, NW., Room 6883, Washington, DC 20230.)

BIS Final Rule (D/N 070105004-7050-01, FR Pub 11/05/07) available at http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-21247.pdf