BIS Final Rule Implements Numerous Wassenaar Changes, Adds/Expands Certain Export Controls

The Bureau of Industry and Security has issued a final rule, effective October 14, 2008, which revises the Export Administration Regulations to implement changes to the Wassenaar Arrangement's List of Dual Use Goods and Technologies (Wassenaar List) as agreed upon in the December 2007 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.

The Wassenaar List is maintained and agreed to by governments participating in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies.)

This final rule revises the Commerce Control List (CCL) and definitions and terms used in the EAR, and adds and expands unilateral U.S. export controls and national security export controls on certain items to make them consistent with the amendments made to implement the Wassenaar Arrangement's decisions.

BIS' final rule implements the following new or expanded unilateral and national security export controls, as follows:

New/Expanded NS Column 1 Controls

This rule imposes a license requirement pursuant to 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 Number 9A012.b.4 (certain air breathing reciprocating or rotary internal combustion type engines).

This rule also imposes such a license requirement for certain software and technology controlled under ECCN 3D001 and 3E001 related to the development or production of certain solar cells, cell-interconnect-coverglass (CIC) assemblies, solar panels, and solar arrays.

(These destinations have an "X" indicated in NS column 1 on the Commerce Country Chart of Supplement No. 1 to 15 CFR Part 738.) BIS states that the purpose of the controls is to ensure that these items do not make a contribution to the military potential of any other country or combination of countries that would prove detrimental to the national security of the U.S. 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 Part 736 for Syria.

New/Expanded 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 ECCNs 1A006 (Equipment, specially designed or modified for the disposal of improvised explosive devices, and specially designed components and accessories therefor), 1A007 (Equipment and devices, specially designed to initiate charges and devices containing energetic materials, by electrical means), 3A001.e.4, solar cells, CIC assemblies, solar panels, and solar arrays which are "space qualified," having an average efficiency exceeding 20% at an operating temperature of 301 K (28C) under simulated "air mass zero" illumination with an irradiance of 1,367 watts per square meter, and 3C002.e (all resists designed or optimized for use with imprint lithography equipment specified by 3B001.f.2 that use either a thermal or photo-curable process) to destinations other than Country Group A:1, cooperating countries (see Supplement No. 1 to 15 CFR Part 740), Bulgaria, Czech Republic, Estonia, Hungary, Iceland, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia.

This NS column 2 license requirement applies to destinations that have an "X" indicated in NS column 2 on the Commerce Country Chart of Supplement No. 1 to 15 CFR Part 738. BIS states that the purpose of the controls is to ensure that these items do not make a contribution to the military potential of countries in Country Group D:1 that would prove detrimental to the national security of the U.S.

(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 Part 736 for Syria.)

The licensing policy for national security controlled items exported or reexported to any country except a country in Country Group D:1 (see Supplement No. 1 to 15 CFR Part 740) 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/Expanded Anti-Terrorism (AT) Controls

This rule imposes a unilateral U.S. license requirement to export and reexport commodities (and related software and technology) controlled under ECCNs 1A006 (Equipment, specially designed or modified for the disposal of improvised explosive devices, and specially designed components and accessories therefor), 1A007 (Equipment and devices, specially designed to initiate charges and devices containing energetic materials, by electrical means), 3A001.e.4 solar cells, CIC assemblies, solar panels, and solar arrays as described above, 3A991.o solar cells, CIC assemblies, solar panels, and solar arrays which are "space qualified" and not controlled by 3A001.e.4, 3C002.e (all resists designed or optimized for use with imprint lithography equipment specified by 3B001.f.2. that use either a thermal or photo-curable process), and 9A012.b.4 (certain air breathing reciprocating or rotary internal combustion type engines) for AT reasons to Cuba, Iran, North Korea, Sudan and Syria, in addition to the national security 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 export or reexport 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 Supplement No. 1 to Part 736 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.

BIS Makes Additions/Revisions to Certain CCL Categories/ECCNs

BIS has added or amended the following CCL Categories/ECCNs to implement certain Wassenaar Arrangement revisions and/or to provide a complete or more accurate description of controls:

Category 1 - Materials, Chemicals, "Microorganisms," and Toxins.BIS' final rule adds to Category 1: (i) ECCN 1A006 to control "equipment, specially designed or modified for the disposal of improvised explosive devices, and specially designed components and accessories therefor;" and (ii) ECCN 1A007 to control "equipment and devices, specially designed to initiate charges and devices containing energetic materials, by electrical means." BIS also amends ECCNS 1A004, 1E001, and 1E201 in Category 1.

Category 2 - Materials Processing. BIS' final rule amends ECCNs2B001, 2B002, 2B006, 2B007, and 2B008 in Category 2.

Category 3 - Electronics. BIS' final rule amends ECCNs 3A001, 3A002, 3A229, 3B001, 3C002, 3C005, 3C006, 3D001, and 3E001 in Category 3.

Category 5 Part 1 - Telecommunications. BIS' final rule amends ECCN 5A001 in Category 5 Part 2.

Category 5 Part 2 - Information Security. BIS' final rule amends ECCN 5A002 in Category 5 Part 2.

Category 6 - Sensors. BIS' final rule amends ECCNs 6A001, 6A005, and 6A995 in Category 6.

Category 7 - Navigation and Avionics. BIS' final rule amends ECCNs 7A002, 7A003, and 7A008 in Category 7.

Category 9 - Propulsion Systems, Space Vehicles and Related Equipment. BIS' final rule amends ECCNs 9A012 and 9E003 in Category 9.

(The Wassenaar Arrangement Task Force on Editorial Issues (TFEI) also made revisions, editorial in nature, to clarify or correct control text or remove extraneous text. This rule implements only those TFEI revisions that coincide with the revisions to ECCNs affected by the 2007 WA agreements. Other TFEI revisions will be implemented in a separate rule.)

Saving Clause

According to BIS, shipments of items removed from license exception eligibility or eligibility for export or reexport without a license as a result of this regulatory action that were on dock for loading, on lighter, laden aboard an exporting or reexporting carrier, or en route aboard a carrier to a port of export or reexport, on October 14, 2008, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous license exception eligibility or without a license so long as they have been exported from the U.S. or reexported before December 15, 2008.

Any such items not actually exported or reexported before midnight on December 15, 2008, require a license in accordance with this regulation.

BIS final rule (D/N 080215206-81243-01, FR Pub 10/14/08) available at http://edocket.access.gpo.gov/2008/pdf/E8-23278.pdf