BIS Issues Final Rule Implementing Numerous Wassenaar Changes (Part X - Final - CFR Revisions)

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.

This is Part X, the final partof a multipart series of summaries of this final rule, and focuses on the revisions to 15 CFR Parts 742, 743, 744, and 772, as well as general revisions to the EAR. See footnote for savings clause.

15 CFR Part 742 - Control Policy-CCL Based Controls

This rule amends 15 CFR 742.19 (Antiterrorism: North Korea) by revising paragraph (b)(1)(xix) from stating "Microprocessors with a CTP of 550 or above" to read "Microprocessors with a processing speed of 0.5 GFLOPS or above." In addition, this rule amends Supplement No. 2, "Anti-terrorism Controls: Iran, North Korea, Syria and Sudan Contract Sanctity Dates and Related Policies," by revising paragraph (26)(ii) from stating "With a CTP of 550 MTOPS or above" to read "With a processing speed of 0.5 GFLOPS or above."

15 CFR 743.1 - Wassenaar Arrangement

1. CFR 743.1 is amended by:

a. Inserting "6A001" before "a.2.d" for clarification in paragraph (c)(1)(vi);

b. Adding ECCN 6A006.a.1 to paragraph (c)(1)(vi);

c. Adding clarification notes in parentheticals after: 6A002.c, 6A003.b.3, and 6A003.b.4 in paragraph (c)(1)(vi);

d. Replacing the text in the parentheticals after 6A006.d in paragraph (c)(1)(vi) with the reference "certain items only; see Note to this paragraph"; and

e. Revising the Notes to paragraph (c)(1)(vi) to add another type of focal plane array excluded from reporting under 6A002.a.3, namely, microbolometer focal plane arrays having less than 8,000 elements. Also, adding a new Note 2 to describe which items in 6A006.d are subject to the Wassenaar special reporting requirement.

Rationale: All of the revisions to 743.1(c)(1)(vi) are made to conform to the Wassenaar Sensitive List and will also affect Wassenaar reporting requirements for ECCNS 6E001 and 6E002.

15 CFR 744.17 - Restrictions on Certain Exports & Reexports of General Purpose Microprocessors for Military End-Uses/Users

1. CFR 744.17 is amended by revising the parameter in the first sentence of paragraph (a) that stated "a composite theoretical performance" ("CTP") of 6,500 million theoretical operations per second (MTOPS)" to read "a processing speed of 5 GFLOPS."

Definitions in 15 CFR Part 772

1. CFR 772.1 is amended by:

a. Removing the terms "Composite theoretical performance (CTP)" and "CTP;"

b. Revising the definition of the terms "Drift rate" and "Peak power;" and

c. Adding in alphabetical order the definitions for "Angle random walk," "Average Output Power," "Compensation Systems," "CW Laser," "Pulsed Laser," and "Repeatability."

Supplement No. 3 to 15 CFR Part 774 - Statements of Understanding

This rule adds a Statement of Understanding (SOU) addressing source code. The SOU explains that source code may be controlled in either a software or technology entry. The rationale for adding this SOU was to allow flexibility to control source code in either a software or a technology entry, where the definitions for "software" and "technology" didn't seem to allow for such flexibility. This SOU only applies to national security controlled items, as no such SOU has been agreed to in other multinational regimes. However, this does not preclude other regimes or BIS from controlling source code in whatever manner is best suited for the situation. For the purposes of applying this SOU to source code subject to the EAR, source code should be considered "software," unless otherwise stated.

(In its final rule, BIS also explains several general changes to the EAR, including the discontinued use of CTP/MTOPS in the EAR with this implementation of the results of the WA 2006 list review, and the GFLOPS standardization of the measurement on 64-bit floating-point multiply and add. (The WA previously controlled microprocessors with a wide range of operand lengths (8-bit, 16-bit, 32-bit, 64-bit). Today, the WA is only interested in processors with 32- and 64-bit operands.))

Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, as extended by the Notice of August 15, 2007, has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act.

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, 11/09/07, 11/13/07, 11/14/07, 11/15/07, 11/19/07, 11/20/07, 11/26/07, and 11/27/07 news, 07110825, 07110915, 07111330, 07111420, 07111535, 07111935, 07112030, 07112620, and 07112735, for Parts I-IX, respectively.)

(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