Federal Register / Vol. 69, No. 214 / Friday, November 5, 2004 / Rules and Regulations 64483

Applicability 

(c) This AD applies to certain Saab Model 

SAAB SF340A series airplanes, line numbers 

004 through 159 inclusive; and SAAB 340B 

series airplanes, line numbers 160 through 

459 inclusive; certificated in any category.

Unsafe Condition 

(d) This AD was prompted by reports of 

improperly installed rivets in the retainers 

located in the elevator trim-tab fittings. The 

retainers hold the trim-tab bearings. We are 

issuing this AD to prevent the elevator and 

aileron trim-tab bearings from coming loose, 

which could result in excessive play in the 

elevator and aileron trim systems, and 

reduced controllability of the airplane. 

Compliance 

(e) You are responsible for having the 

actions required by this AD performed within 

the compliance times specified, unless the 

actions have already been done. 

Inspection and Related Investigative/

Corrective Actions 

(f) Within 800 flight hours or 6 months 

after the effective date of this AD, whichever 

is first: Do a detailed inspection of the 

elevator and aileron trim-tab fittings, and all 

applicable related investigative and 

corrective actions, by accomplishing all of 

the actions in the Accomplishment 

Instructions of Saab Service Bulletin 340–51–

025, Revision 01, dated October 21, 2003. 

Any related investigative and corrective 

actions must be done before further flight.

Note 1: For the purposes of this AD, a 

detailed inspection is: ‘‘An intensive 

examination of a specific item, installation, 

or assembly to detect damage, failure, or 

irregularity. Available lighting is normally 

supplemented with a direct source of good 

lighting at an intensity deemed appropriate. 

Inspection aids such as mirror, magnifying 

lenses, etc., may be necessary. Surface 

cleaning and elaborate procedures may be 

required.’’

Parts Installation 

(g) As of the effective date of this AD, no 

person may install on any airplane an 

elevator or aileron trim-tab fitting unless it 

has been inspected, and any applicable 

corrective actions have been done, in 

accordance with paragraph (f) of this AD. 

Reporting Not Required 

(h) Although the service bulletin 

referenced in this AD specifies to submit 

certain information to the manufacturer, this 

AD does not include that requirement. 

Alternative Methods of Compliance 

(AMOCs) 

(i) The Manager, International Branch, 

ANM–116, Transport Airplane Directorate, 

FAA, has the authority to approve AMOCs 

for this AD, if requested using the procedures 

found in 14 CFR 39.19. 

Related Information 

(j) Swedish airworthiness directive 1–194, 

dated October 14, 2003, also addresses the 

subject of this AD. 

Material Incorporated by Reference 

(k) You must use Saab Service Bulletin 

340–51–025, Revision 01, dated October 21, 

2003, to perform the actions that are required 

by this AD, unless the AD specifies 

otherwise. The Director of the Federal 

Register approves the incorporation by 

reference of this document in accordance 

with 5 U.S.C. 552(a) and 1 CFR part 51. For 

copies of the service information, contact 

Saab Aircraft AB, SAAB Aircraft Product 

Support, S–581.88, Linko ̈ping, Sweden. For 

information on the availability of this 

material at the National Archives and 

Records Administration (NARA), call (202) 

741–6030, or go to http://www.archives.gov/

federal_register/code_of_federal_regulations/

ibr_locations.html. You may view the AD 

docket at the Docket Management Facility, 

U.S. Department of Transportation, 400 

Seventh Street, SW., room PL–401, Nassif 

Building, Washington, DC.

Issued in Renton, Washington, on October 

21, 2004. 

Kalene C. Yanamura, 

Acting Manager, Transport Airplane 

Directorate, Aircraft Certification Service.

[FR Doc. 04–24520 Filed 11–4–04; 8:45 am] 

BILLING CODE 4910–13–P

DEPARTMENT OF COMMERCE

Bureau of Industry and Security 

15 CFR Parts 740, 748, and 774

[Docket No. 041020285–4285–01] 

RIN 0694–AD18

Computer Technology and Software 

Eligible for Export Under License 

Exception; and Establishment of 

‘‘Foreign National Review’’

Requirement and Procedure

AGENCY: Bureau of Industry and 

Security, Commerce.

ACTION: Final rule.

SUMMARY: This final rule expands the 

availability of license exceptions for 

certain deemed exports of computer 

technology and source code under the 

Export Administration Regulations 

(EAR), partially implementing the 

expansion set forth in a proposed rule 

published on October 24, 2003. In 

addition, this final rule clarifies certain 

provisions of License Exception CTP. 

This rule also establishes a new 

‘‘Foreign National Review (FNR)’’

requirement for deemed exports of 

technology or source code under 

License Exception CTP.

DATES: This rule is effective on 

November 5, 2004.

FOR FURTHER INFORMATION CONTACT:

Sharron Cook, Senior Export Policy 

Analyst, Office of Exporter Services, 

Regulatory Policy Division, Bureau of 

Industry and Security, Telephone: (202) 

482–2440.

SUPPLEMENTARY INFORMATION: 

Background 

On June 4, 2002, BIS published a 

notice of inquiry (67 FR 39675), 

requesting information from industry to 

assist BIS in evaluating the license 

exception eligibility level of 33,000 

MTOPS for exports and reexports of 

computer technology and software 

controlled under ECCNs 4D001 and 

4E001. BIS received four comments in 

response to the notice of inquiry, all 

stating that the license exception 

threshold should be adjusted. 

On October 24, 2003, BIS published a 

proposed rule with request for 

comments from industry (68 FR 60891) 

to expand the availability of License 

Exception CTP for exports and reexports 

of computer technology and software on 

the Commerce Control List (CCL) of the 

Export Administration Regulations 

(EAR) under Export Classification 

Control Numbers (ECCNs) 4D001 and 

4E001. These ECCNs control technology 

and software that can be used for the 

development, production, or use of 

computers. The proposed rule also 

requested comments to assist BIS in 

evaluating microprocessor technology 

controlled under ECCN 3E002. BIS 

received eleven comments in response 

to the proposed rule and the questions 

posed in the preamble. BIS has decided 

to address computer technology and 

software and microprocessor technology 

in two different final rules. This final 

rule implements the license exception 

expansion for computer technology and 

software. The corresponding rule on 

license exception eligibility for 

microprocessor technology is published 

elsewhere in this issue of the Federal 

Register. 

Current Controls on Computer 

Technology and Software 

Export controls for computer 

technology and software are controlled 

multilaterally through the Wassenaar 

Arrangement. The current Wassenaar 

Arrangement (WA) control thresholds 

for computer technology and software 

are: 28,000 MTOPS for the Basic List 

(BL), 75,000 MTOPS for the Sensitive 

List (SL); and 150,000 MTOPS for the 

Very Sensitive List (VSL). (Note: the 

computer hardware level within WA 

(under the BL) and in the United States 

is currently at 190,000 MTOPS. 

Computer hardware is not controlled on 

WA’s SL and VSL.). 

The EAR control the export and 

reexport of technology and software for 

the development, production, or use of 

64484 Federal Register / Vol. 69, No. 214 / Friday, November 5, 2004 / Rules and Regulations 

computers with a CTP greater than 

28,000 Millions of Theoretical 

Operations per Second (MTOPS) under 

Export Control Classification Numbers 

(ECCNs) 4D001 and 4E001 of the 

Commerce Control List (CCL). Such 

technology and software requires a 

license, for national security (NS) 

reasons, to all destinations except 

Canada. Heretofore, ECCNs 4D001 and 

4E001 have provided that License 

Exception TSR (section 740.6 of the 

EAR) is available for exports and 

reexports of such technology and 

software: (1) For computers of unlimited 

CTP to 22 countries; and (2) for 

computers with a CTP less than or equal 

to 33,000 MTOPS to countries listed in 

Country Group B (Supplement No. 1 to 

part 740). License Exception TSR 

availability for computer software and 

technology differs from License 

Exception CTP availability for computer 

hardware in two ways: (1) The countries 

eligible; and (2) the MTOPS level. 

Deemed Export Revision 

While the original Federal Register

notice proposed the eligibility of exports 

and reexports of computer technology 

and software equal to or less than 

150,000 MTOPS to Computer Tier 1 

countries under License Exception CTP, 

this final rule raises the level to 190,000 

MTOPS, but expands License Exception 

availability for deemed exports of 

computer technology and source code 

only. 

Computer technology and software is 

listed by the Wassenaar Arrangement on 

both the Sensitive List (75,000 MTOPS) 

and the Very Sensitive List (150,000 

MTOPS). Accordingly, adjustments in 

control limits for actual exports and 

reexports of computer technology and 

software should be implemented based 

on agreement with the United States’

Wassenaar partners. Therefore, the 

United States may discuss raising the 

level of controls for actual exports and 

reexports of computer technology and 

software within the Wassenaar 

Arrangement. After a decision is made 

on the level of controls for exports and 

reexports of computer technology and 

software in the Wassenaar Arrangement, 

the EAR will be amended accordingly.

Generally, Wassenaar countries do not 

have in-country transfer controls 

(deemed export controls), with the 

exception of classified material. A 

deemed export is any release of 

technology or source code subject to the 

EAR to a foreign national within the 

United States. Such release is deemed to 

be an export to the home country or 

countries of the foreign national. The 

deemed export rule does not apply to 

persons lawfully admitted for 

permanent residence in the United 

States and does not apply to persons 

who are protected individuals under the 

Immigration and Naturalization Act (8 

U.S.C. 1324b(a)(3)). Deemed export 

license applications for foreign 

nationals with dual citizenship should 

be based on the most recently obtained 

country citizenship. Applications for 

foreign nationals with temporary or 

permanent residence status of a third 

country (i.e., non-U.S. and a temporary 

or permanent residence status other 

than a foreign national’s country of 

origin) should be based on the foreign 

national’s country of citizenship. 

Because the United States is one of 

the only WA country members to 

implement deemed export controls, U.S. 

industry has been required to obtain 

license authorization for these deemed 

exports when other WA member 

countries have not imposed such 

controls on their industries. Expanding 

the availability of a License Exception 

for deemed exports of computer 

technology and source code provides 

relief from licensing burdens for U.S. 

industry and levels the playing field in 

global competition. BIS has found that 

the expansion of license exception 

availability under the technology 

parameters set forth below will not have 

an adverse impact on the U.S. national 

security. 

Expansion of License Exception CTP for 

Certain Computer Technology and 

Software Controlled Under ECCNs 

4D001 and 4E001

This final rule provides that the 22 

countries previously eligible to receive 

technology and software for computers 

with unlimited CTP under License 

Exception TSR continue to be eligible 

for export and reexport of unlimited 

CTP level of technology and software, 

but this eligibility is now pursuant to 

License Exception CTP. All of these 22 

countries are in ‘‘Computer Tier 1’’ for 

purposes of License Exception CTP. 

This final rule provides that countries 

in Country Group B previously eligible 

to receive technology and software for 

computers and electronic assemblies 

classified under ECCN 4A003.b and 

ECCN 4A003.c, respectively, with a CTP 

less than or equal to 33,000 MTOPS 

under License Exception TSR continue 

to be eligible for export and reexport 

under License Exception TSR. In 

addition, technology and software for 

other equipment, i.e., not controlled 

under ECCN 4A003.b and ECCN 

4A003.c, controlled under ECCNs 4E001 

and 4D001 will also continue to be 

eligible for export and reexport under 

License Exception TSR. 

However, this final rule amends 

License Exception TSR eligibility 

paragraphs under ECCNs 4D001 and 

4E001 for certain controlled computer 

technology and software, so that 

technology and software with a CTP 

greater than 33,000 MTOPS to the 22 

countries previously listed in the TSR 

paragraph is no longer eligible for 

export and reexport under TSR. In 

addition, this rule adds License 

Exception CTP to the License Exception 

section of ECCNs 4D001 and 4E001. 

License Exception CTP formerly applied 

to only computer hardware classified 

under ECCN 4A003. 

Also, this final rule provides that for 

Computer Tier 1 destinations other than 

these 22 countries, technology and 

source code for computers with a CTP 

equal to or less than 190,000 MTOPS are 

eligible for deemed exports under 

License Exception CTP. Actual exports 

and reexports of computer technology 

and software will continue to be 

controlled for export and reexport under 

ECCNs 4D001 and 4E001 when the CTP 

exceeds 28,000 MTOPS, and eligible for 

License Exception TSR when the CTP is 

equal to or less than 33,000 MTOPS to 

Computer Tier 1 countries that are also 

Country Group B countries. 

Lastly, this final rule provides that 

technology and source code for 

computers with a CTP equal to or less 

than 75,000 MTOPS are eligible for 

deemed exports under License 

Exception CTP to foreign nationals of 

‘‘Computer Tier 3’’ destinations. Certain 

deemed exports to Computer Tier 3 

foreign nationals are subject to a Foreign 

National Review requirement. 

Exports and reexports to countries in 

Country Group E:1 (terrorist supporting 

countries) continue to be ineligible for 

License Exception CTP. The following 

chart shows the new eligibility 

thresholds under License Exception 

CTP.

Federal Register / Vol. 69, No. 214 / Friday, November 5, 2004 / Rules and Regulations 64485

COMPUTER TECHNOLOGY AND SOFTWARE ELIGIBILITY THRESHOLDS UNDER LICENSE EXCEPTION CTP 

Unlimited CTP (deemed exports and actual exports/

reexports).

22 ‘‘Tier 1’’ destinations: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, or the United Kingdom. 

190,000 MTOPS (deemed 

exports only).

All other ‘‘Tier 1’’ destinations: Antigua and Barbuda, Argentina, Aruba, Bahamas (The), Bangladesh, Barbados, 

Belize, Benin, Bhutan, Bolivia, Botswana, Brazil, Brunei, Burkina Faso, Burma, Burundi, Cameroon, Cape Verde, 

Central African Republic, Chad, Chile, Colombia, Congo (DemocraticRepublic of the), Congo (Republic of the), 

Costa Rica, Cote d’Ivoire, Cyprus, Czech Republic, Dominica, Dominican Republic, East Timor, Ecuador, El Salvador, Equatorial Guinea, Eritrea, Estonia, Ethiopia, Fiji, Gabon, Gambia (The), Ghana, Grenada, Guatemala, 

Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Hong Kong, Hungary, Iceland, Indonesia, Jamaica, Kenya, 

Kiribati, Korea (Republic of), Latvia, Lesotho, Liberia, Liechtenstein, Lithuania, Madagascar, Malawi, Malaysia, 

Maldives, Mali, Malta, Marshall Islands, Mauritius, Mexico, Micronesia (Federated States of), Monaco, Mozambique, Namibia, Nauru, Nepal, Netherlands Antilles, Nicaragua, Niger, Nigeria, Palau,Panama, Papua New Guinea, Paraguay, Peru, Philippines, Poland, Romania, Rwanda, St. Kitts & Nevis, St. Lucia, St. Vincent and the 

Grenadines, Sao Tome & Principe, Samoa, San Marino, Senegal, Seychelles, Sierra Leone, Singapore, Slovakia, Slovenia, Solomon Islands, Somalia, South Africa, Sri Lanka, Surinam, Swaziland, Taiwan, Tanzania, 

Togo, Tonga, Thailand, Trinidad and Tobago, Tuvalu, Uganda, Uruguay, Vatican City, Venezuela, Western Sahara, Zambia, and Zimbabwe. 

75,000 MTOPS (deemed 

exports only).

All ‘‘Tier 3’’ destinations: Afghanistan, Albania, Algeria, Andorra, Angola, Armenia, Azerbaijan, Bahrain, Belarus, 

Bosnia & Herzegovina, Bulgaria, Cambodia, China (People’s Republic of), Comoros, Croatia, Djibouti, Egypt, 

Georgia, India, Iraq, Israel, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Laos, Lebanon, Macau, Macedonia (The 

Former Yugoslav Republic of), Mauritania, Moldova, Mongolia, Morocco, Oman, Pakistan, Qatar, Russia, Serbia 

and Montenegro, Saudi Arabia, Tajikistan, Tunisia, Turkmenistan, Ukraine, United Arab Emirates, Uzbekistan, 

Vanuatu, Vietnam, and Yemen. 

Not eligible .......................... Cuba, Iran, Libya, North Korea, Sudan, and Syria. 

Foreign National Review Requirement 

for Deemed Exports 

This final rule imposes a foreign 

national review requirement for deemed 

exports of specified computer 

technology and source code under 

License Exception CTP and section 

748.8(s) and (t), and Supplement No. 2 

to part 748 of the EAR. Prior to 

disclosing eligible technology or source 

code to a foreign national under License 

Exception CTP, an exporter must submit 

a Foreign National Review (FNR) 

request to BIS. The FNR requirement 

only applies to foreign nationals from a 

country in Computer Tier 3 that is not 

also a country listed in Country Group 

B of Supplement No. 1 to part 740. The 

exporter must confirm eligibility from 

the System for Tracking Export License 

Applications (STELA) or the Simplified 

Network Application Procedure (SNAP) 

prior to using License Exception CTP. 

FNR requests must be submitted using 

Form BIS–748P (Multipurpose 

Application), or its electronic 

equivalent, and must include 

information about the foreign national 

who is to receive the computer 

technology and source code. The 

information required for the FNR 

request is set forth in paragraphs (s) and 

(t) of Supplement No 2 to part 748 of the 

EAR. BIS will electronically refer the 

FNR request for interagency review 

within nine business days or, if 

necessary, return the FNR request 

without action to the applicant, e.g., if 

more information is necessary. Upon 

receipt of the BIS referral, the agencies 

have 30 days in which to return a 

recommendation to BIS. License 

exception CTP may not be used until 

the exporter has received official 

notification from BIS. 

Use of License Exception CTP 

Exporters who have current licenses 

for deemed exports of computer 

technology or source code to Computer 

Tier 3 destination foreign nationals that 

become eligible for License Exception 

CTP are no longer bound by conditions 

on their licenses, as provided under 

section 750.7 of the EAR. Termination 

of license conditions does not relieve an 

exporter of its responsibility for 

violations that occurred prior to the 

availability of the License Exception. 

Although most licenses for computer 

technology and source code have been 

issued to companies who employ 

Computer Tier 3 destination foreign 

nationals in their U.S. facilities and who 

hold work visas issued by the U.S. 

Government, the availability of License 

Exception CTP for deemed exports is 

not confined to employer releases of 

technology to employees. It is also 

available for deemed exports of 

technology and source code to 

Computer Tier 3 destination foreign 

national visitors and customers, under 

the procedures set forth in License 

Exception CTP.

Unique Application and Submission 

Requirements 

This rule revises the heading of 

§ 748.8 and the title of Supplement No. 

2 to part 748, which currently addresses 

only unique license application 

requirements, to include other 

submission requirements as well. This 

rule also adds paragraphs (s) and (t) to 

Supplement No. 2 to part 748. 

Paragraph (s) sets forth the requirements 

for a Foreign National Review Request 

under License Exception CTP, using the 

BIS–748P ‘‘Multipurpose Application’’

form. Paragraph (t) lists the information 

that an applicant must submit about the 

foreign national to whom the technology 

or source code will be disclosed, either 

as part of a license application or under 

the Foreign National Review Request. 

Additional Amendments 

This final rule adds paragraph (r), 

‘‘Encryption Review Requests,’’ which 

was inadvertently omitted from a 

previous amendment to § 748.8 of the 

EAR. This final rule also removes a 

reference to ECCN 4A003.d in 

740.7(b)(1), because ECCN 4A003.d 

(graphic accelerators) were removed 

from ECCN 4A003. (They continue to be 

controlled for anti-terrorism reasons 

only under ECCN 4A994.g). Also, this 

rule restructures paragraph 740.7(a) 

‘‘Scope’’ to clarify that computers that 

are controlled under ECCN 4A003.e 

(equipment performing analog-to-digital 

conversion exceeding the limits in 

ECCN 3A001.a.5.a), and computers 

controlled for MT reasons are not 

eligible for License Exception CTP. In 

addition, this rule moves a restriction 

concerning proliferation end-users from 

paragraph 740.7(d)(3) to paragraph 

740.7(b)(5), because this restriction 

pertains to all exports and reexports

64486 Federal Register / Vol. 69, No. 214 / Friday, November 5, 2004 / Rules and Regulations 

under License Exception CTP, 

regardless of destination. Also, it 

clarifies within this restriction and 

within 740.7(b)(3) that ‘‘retransfer’’ is an 

in-country transfer. 

Although the Export Administration 

Act expired on August 20, 2001, 

Executive Order 13222 of August 17, 

2001 (3 CFR, 2001 Comp., p. 783 

(2002)), as extended by the Notice of 

August 6, 2004, 69 FR 48763 (August 

10, 2004) continues the Regulations in 

effect under the International 

Emergency Economic Powers Act. 

Comments 

The comments to the proposed rule 

that were received by BIS may be found 

at http://efoia.bis.doc.gov/pubcomm/

Computer%20Tech%20and

%20Software/Final.pdf. Set forth below 

are the questions that were posed to 

industry in the proposed rule, a 

summary of the comments BIS received 

and, where applicable, BIS’s response. 

BIS’s responses to questions on 

microprocessor technology export 

controls are published in the final rule 

on microprocessor technology exports 

under license exceptions. 

1. What impact would the proposed 

revision of computer technology and 

software controls have on your 

company? 

The majority of respondents 

considered the proposed changes a 

‘‘significant improvement to the current 

system’’ and requested that BIS publish 

a final rule as soon as possible. Many 

respondents suggested revisions to 

improve the proposal. One of the 

recommendations was to make 

computer technology and software 

eligible to all of Computer Tier 1 

countries with an unlimited Composite 

Theoretical Performance (CTP), instead 

of just the 22 countries that already have 

that authorization under License 

Exception TSR. BIS has determined that 

U.S. national security interests warrant 

continuing to control computer 

technology and software exports to Tier 

1 countries other than these 22 

countries. The 22 countries that were 

eligible to receive technology and 

software for computers with unlimited 

CTP under License Exception TSR will 

continue to be eligible to receive this 

technology and software; however, this 

eligibility will be under a different 

License Exception—License Exception 

CTP. 

In addition, respondents 

recommended that BIS harmonize the 

CTP level for technology and software 

(150,000 Millions of Theoretical 

Operations per Second (MTOPS)), with 

that for hardware (190,000 MTOPS) 

under License Exception CTP for 

Computer Tier 3 countries. The reasons 

given for this recommendation were 

ease of enforcement and compliance, 

and that there seemed to be no national 

security reason for having the 

technology and software controls at a 

lower level, because the hardware was 

already available at these levels to these 

countries. This final rule does not 

implement such a harmonization, 

because computer technology and 

software is commonly treated as more 

sensitive in nature than hardware by the 

Wassenaar Arrangement. Computer 

technology and software is listed on 

both the Sensitive (75,000 MTOPS) and 

Very Sensitive (150,000 MTOPS) lists of 

the Wassenaar Arrangement, while 

computer hardware is only listed on 

Wassenaar’s Basic List. While BIS agrees 

with the exporting community that 

using the CTP of 190,000 MTOPS 

instead of 150,000 MTOPS is easier for 

enforcement/compliance purposes and 

the difference between the CTPs is 

minimal, BIS has decided that 

adjustments in control limits concerning 

actual exports and reexports should be 

negotiated at the Wassenaar 

Arrangement meetings.

However, Wassenaar countries 

generally do not have in-country 

transfer controls (deemed export 

controls), with the exception of 

classified material. Therefore, this rule 

makes eligible, under License Exception 

CTP, deemed exports of computer 

technology and source code equal to or 

less than 75,000 MTOPS to foreign 

nationals of Computer Tier 3 countries 

and deemed exports of computer 

technology and source code equal to or 

less than 190,000 MTOPS to foreign 

nationals of Computer Tier 1 countries 

(other than the 22 countries that were 

previously listed in the License 

Exception TSR eligibility paragraphs of 

ECCNs 4D001 and 4E001). A decision to 

raise the level of controls for actual 

exports and reexports of computer 

technology and software should be 

negotiated in the Wassenaar 

Arrangement. After a decision is made 

on the level of controls for exports and 

reexports of computer technology and 

software in the Wassenaar Arrangement, 

the EAR will be amended accordingly. 

2. Is there another proposal regarding 

computer technology and software, and 

microprocessor technology controls that 

you would like Commerce to consider? 

If so, describe your proposal in detail 

and please give technical and other 

justifications for your proposal. 

Many comments received suggested 

creation of a technology license. In 

response to these comments and those 

received in the past, BIS has discussed 

with other agencies the possibility of 

allowing certain exports and reexports 

of this technology using a ‘‘Special 

Intra-company License (SIL).’’ The goal 

is to create a license that will ease the 

flow of certain authorized technology 

and source code within the global 

corporate structure, based on an 

approved Technology Control Plan, i.e., 

an internal control program. 

A number of respondents suggested 

that BIS do away with the CTP metric 

for control and use end-user and enduse based controls. However, computers 

are listed on the Dual-use and 

Technologies List of the Wassenaar 

Arrangement under 4.A.3. The agreed 

controlling parameter for computers is 

Composite Theoretical Performance 

(CTP) in Millions of Operations per 

Second (MTOPS). Therefore, in keeping 

with our agreements to the Wassenaar 

Arrangement, BIS will continue to 

control computers using the CTP metric 

for control. 

3. What is the highest CTP level for 

microprocessors currently being 

manufactured by your company? 

Comments in response to this 

question are addressed in the final rule 

for microprocessor technology export 

controls. 

4. What should be the CTP MTOPS 

limitation for microprocessor 

technology under the proposed License 

Exception CIV? Please provide detailed 

technical and other justification for your 

proposal. 

Comments in response to this 

question are addressed in the final rule 

for microprocessor technology export 

controls. 

5. How do other countries license the 

transfer of computer technology and 

software, and microprocessor 

technology? Have there been instances 

where your company has been placed at 

a competitive disadvantage based on 

current U.S. license requirements? 

The majority of respondents did not 

have enough information to comment 

on procedures or regulations of other 

countries’ export policies with regard to 

computer technology and software, and 

microprocessor technology. None of the 

respondents felt they had enough 

information to definitively claim that 

the current export control levels put 

them at a competitive disadvantage. 

Federal Register / Vol. 69, No. 214 / Friday, November 5, 2004 / Rules and Regulations 64487

6. What are your predictions for the CTP 

level of microprocessors that will be in 

production 3 and 5 years from now? On 

what basis did you make your 

predictions? 

Comments in response to these 

questions are addressed in the final rule 

for microprocessor technology export 

controls. 

7. What percentage of your research and 

development is accomplished: (1) 

Outside of the United States; and (2) 

with the assistance of foreign nationals 

within the United States? 

Some respondents said they had 

already provided such information to 

BIS. None of the respondents addressed 

this specifically, but one respondent 

noted that in the physical sciences and 

engineering, nearly 50 per cent of all 

Masters and PhD degrees awarded by 

U.S. schools are earned by foreign 

nationals. 

8. Is there an alternative method or 

parameter for controlling exports of 

computers and microprocessors and the 

technology and software therefore that 

industry believes would be more in-line 

with the way industry produces, 

develops, or measures these items? 

Many of the respondents pointed out 

that performance-based controls are 

‘‘unsuited’’ for general purpose and 

rapidly advancing technologies such as 

semiconductors and computers. Many 

respondents would like to see end-use 

and end-user based controls. It has been 

determined by Wassenaar Arrangement 

members that technology and software 

to develop or produce computers 

warrants placement on the Sensitive 

and Very Sensitive Lists. The control 

parameter on these lists are based on 

their performance capabilities, and at 

this time the only metric that the regime 

members have agreed upon is CTP. In 

keeping with the Wassenaar 

Arrangement agreements, BIS will not 

adopt a unilateral end-use/user based 

control for computer technology or 

software. 

However, BIS and industry via the 

High-Performance Computer (HPC) 

Working Group of the Information 

Systems Technical Advisory Committee 

are jointing investigating a new metric 

to replace the Millions of Theoretical 

Operations per Second (MTOPS) 

parameter, it is called ‘‘Weighted 

Teraflop (WT)’’. Industry 

representatives noted that timely 

implementation of the new metric is 

important because HPC technology and 

computer performance levels are 

advancing at a rapid pace.

Rulemaking Requirements 

1. This final rule has been determined 

to be not significant for purposes of E.O. 

12866. 

2. Notwithstanding any other 

provision of law, no person is required 

to respond to, nor shall any person be 

subject to a penalty for failure to comply 

with a collection of information, subject 

to the requirements of the Paperwork 

Reduction Act (44 U.S.C. 3501 et seq.) 

(PRA), unless that collection of 

information displays a currently valid 

Office of Management and Budget 

(OMB) Control Number. This rule 

contains a collection of information 

subject to the requirements of the PRA. 

This collection has been approved by 

OMB under Control Number 0694–0088 

(Multi-Purpose Application), which 

carries a burden hour estimate of 58 

minutes to prepare and submit form 

BIS–748. Send comments regarding this 

burden estimate or any other aspect of 

this collection of information, including 

suggestions for reducing the burden, to 

David Rostker, Office of Management 

and Budget (OMB), by e-mail to 

David_Rostker@omb.eop.gov, or by fax 

to (202) 395–7285; and to the Regulatory 

Policy Division, Bureau of Industry and 

Security, Department of Commerce, P.O. 

Box 273, Washington, DC 20044. 

3. This rule does not contain policies 

with Federalism implications as that 

term is defined under E.O. 13132. 

4. The provisions of the 

Administrative Procedure Act (5 U.S.C. 

553) requiring notice of proposed 

rulemaking, the opportunity for public 

participation, and a delay in effective 

date, are inapplicable because this 

regulation involves a military and 

foreign affairs function of the 

UnitedStates (5 U.S.C. 553(a)(1)). 

Further, no other law requires that a 

notice of proposed rulemaking and an 

opportunity for public comment be 

given for this final rule. Because a 

notice of proposed rulemaking and an 

opportunity for public comment are not 

required to be given for this rule under 

the Administrative Procedure Act or by 

any other law, the analytical 

requirements of the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.) are 

not applicable. Therefore, this 

regulation is issued in final form. 

Although there is no formal comment 

period, public comments on this 

regulation are welcome on a continuing 

basis. Comments should be submitted to 

Sharron Cook, Office of Exporter 

Services, Bureau of Industry and 

Security, Department of Commerce, P.O. 

Box 273, Washington, DC 20044.

List of Subjects 

15 CFR Part 740

Administrative practice and 

procedure, Exports, Reporting and 

recordkeeping requirements. 

15 CFR Part 748

Administrative practice and 

procedure, Exports, Reporting and 

recordkeeping requirements. 

15 CFR Part 774

Exports, Reporting and recordkeeping 

requirements.

■ Accordingly, parts 740, 748, and 774 of 

the Export Administration Regulations 

(15 CFR parts 730–799) are amended as 

follows:

PART 740—[AMENDED]

■ 1. The authority citation for part 740 is 

revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; Sec. 901–911, Pub. L. 

106–387; E.O. 13026, 61 FR 58767, 3 CFR, 

1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 

3 CFR, 2001 Comp., p. 783; Notice of August 

6, 2004, 69 FR 48763 (August 10, 2004).

■ 2. Section 740.7 is revised to read as 

follows:

§ 740.7 Computers (CTP). 

(a) Scope. (1) Commodities. License 

Exception CTP authorizes exports and 

reexports of computers, including 

‘‘electronic assemblies’’ and specially 

designed components therefor 

controlled by ECCN 4A003, except

ECCN 4A003.e (equipment performing 

analog-to-digital conversions exceeding 

the limits in ECCN 3A001.a.5.a), 

exported or reexported separately or as 

part of a system for consumption in 

Computer Tier countries as provided by 

this section. When evaluating your 

computer to determine License 

Exception CTP eligibility, use the CTP 

parameter to the exclusion of other 

technical parameters in ECCN 4A003. 

Computers controlled for missile 

technology (MT) reasons are not eligible 

for License Exception CTP. 

(2) Technology and software. License 

Exception CTP authorizes exports of 

technology and software controlled by 

ECCNs 4D001 and 4E001 specially 

designed or modified for the 

‘‘development’’, ‘‘production’’, or ‘‘use’’

of computers, including ‘‘electronic 

assemblies’’ and specially designed 

components therefor classified in ECCN 

4A003, except ECCN 4A003.e 

(equipment performing analog-to-digital 

conversions exceeding the limits in 

ECCN 3A001.a.5.a), to Computer Tier 

countries as provided by this section. 

Technology and software for computers 

64488 Federal Register / Vol. 69, No. 214 / Friday, November 5, 2004 / Rules and Regulations 

controlled for missile technology (MT) 

reasons are not eligible for License 

Exception CTP. 

(b) Restrictions. (1) Related equipment 

controlled under ECCN 4A003.g may 

not be exported or reexported under this 

License Exception when exported or 

reexported separately from eligible 

computers authorized under this 

License Exception. 

(2) Access and release restrictions. (i) 

Computers and software. Computers 

and software eligible for License 

Exception CTP may not be accessed 

either physically or computationally by 

nationals of Cuba, Iran, Libya, North 

Korea, Sudan, or Syria, except that 

commercial consignees described in 

Supplement No. 3 to part 742 of the 

EAR are prohibited only from giving 

such nationals user-accessible 

programmability. 

(ii) Technology and source code.

Technology and source code eligible for 

License Exception CTP may not be 

released to nationals of Cuba, Iran, 

Libya, North Korea, Sudan, or Syria.

(3) Computers and software eligible 

for License Exception CTP may not be 

reexported or transferred (in country) 

without prior authorization from BIS, 

i.e., a license, a permissive reexport, 

another License Exception, or ‘‘No 

License Required’’. This restriction must 

be conveyed to the consignee, via the 

Destination Control Statement, see 

§ 758.6 of the EAR. Additionally, the 

end-use and end-user restrictions in 

paragraph (b)(5) of this section must be 

conveyed to any consignee in Computer 

Tier 3. 

(4) You may not use this License 

Exception to export or reexport items 

that you know will be used to enhance 

the CTP beyond the eligibility limit 

allowed to your country of destination. 

(5) License Exception CTP does not 

authorize exports and reexports for 

nuclear, chemical, biological, or missile 

end-users and end-uses subject to 

license requirements under § 744.2, 

§ 744.3, § 744.4, and § 744.5 of the EAR. 

Such exports and reexports will 

continue to require a license and will be 

considered on a case-by-case basis. 

Reexports and transfers (in country) to 

these end-users and end-uses in eligible 

countries are strictly prohibited without 

prior authorization. 

(6) Foreign nationals in an expired 

visa status are not eligible to receive 

deemed exports of technology or source 

code under this License Exception. It is 

the responsibility of the exporter to 

ensure that, in the case of deemed 

exports, the foreign national maintains a 

valid U.S. visa, if required to hold a visa 

from the United States. 

(c) Computer Tier 1 destinations. (1) 

Eligible destinations. The destinations 

that are eligible to receive exports and 

reexports under paragraph (c) of this 

section include: Antigua and Barbuda, 

Argentina, Aruba, Australia, Austria, 

Bahamas (The), Bangladesh, Barbados, 

Belgium, Belize, Benin, Bhutan, Bolivia, 

Botswana, Brazil, Brunei, Burkina Faso, 

Burma, Burundi, Cameroon, Cape 

Verde, Central African Republic, Chad, 

Chile, Colombia, Congo (Democratic 

Republic of the), Congo (Republic of 

the), Costa Rica, Cote d’Ivoire, Cyprus, 

Czech Republic, Denmark, Dominica, 

Dominican Republic, East Timor, 

Ecuador, El Salvador, Equatorial 

Guinea, Eritrea, Estonia, Ethiopia, Fiji, 

Finland, France, Gabon, Gambia (The), 

Germany, Ghana, Greece, Grenada, 

Guatemala, Guinea, Guinea-Bissau, 

Guyana, Haiti, Honduras, Hong Kong, 

Hungary, Iceland, Indonesia, Ireland, 

Italy, Jamaica, Japan, Kenya, Kiribati, 

Korea (Republic of), Latvia, Lesotho, 

Liberia, Liechtenstein, Lithuania, 

Luxembourg, Madagascar, Malawi, 

Malaysia, Maldives, Mali, Malta, 

Marshall Islands, Mauritius, Mexico, 

Micronesia (Federated States of), 

Monaco, Mozambique, Namibia, Nauru, 

Nepal, Netherlands, Netherlands 

Antilles, New Zealand, Nicaragua, 

Niger, Nigeria, Norway, Palau, Panama, 

Papua New Guinea, Paraguay, Peru, 

Philippines, Poland, Portugal, Romania, 

Rwanda, St. Kitts & Nevis, St. Lucia, St. 

Vincent and the Grenadines, Sao Tome 

& Principe, Samoa, San Marino, 

Senegal, Seychelles, Sierra Leone, 

Singapore, Slovakia, Slovenia, Solomon 

Islands, Somalia, South Africa, Spain, 

Sri Lanka, Surinam, Swaziland, 

Sweden, Switzerland, Taiwan, 

Tanzania, Togo, Tonga, Thailand, 

Trinidad and Tobago, Turkey, Tuvalu, 

Uganda, United Kingdom, Uruguay, 

Vatican City, Venezuela, Western 

Sahara, Zambia, and Zimbabwe. 

(2) Eligible commodities. All 

computers, including electronic 

assemblies and specially designed 

components therefor are eligible for 

export or reexport under License 

Exception CTP to Tier 1 destinations, 

subject to the restrictions in paragraph 

(b) of this section. 

(3) Eligible technology and software.

(i) Technology and software described 

in paragraph (a)(2) of this section for 

computers of unlimited CTP are eligible 

for export or reexport under License 

Exception CTP to: Australia, Austria, 

Belgium, Canada, Denmark, Finland, 

France, Germany, Greece, Ireland, Italy, 

Japan, Luxembourg, Netherlands, New 

Zealand, Norway, Portugal, Spain, 

Sweden, Switzerland, Turkey, or the 

United Kingdom; and 

(ii) Technology and source code 

described in paragraph (a)(2) of this 

section for computers with a CTP less 

than or equal to 190,000 MTOPS are 

eligible for deemed exports under 

License Exception CTP to foreign 

nationals of Tier 1 destinations, other 

than the destinations that are listed in 

paragraph (c)(3)(i) of this section, 

subject to the restrictions in paragraph 

(b) of this section. 

(d) Computer Tier 3 destinations. (1) 

Eligible destinations. Eligible 

destinations under paragraph (d) of this 

section are: Afghanistan, Albania, 

Algeria, Andorra, Angola, Armenia, 

Azerbaijan, Bahrain, Belarus, Bosnia & 

Herzegovina, Bulgaria, Cambodia, China 

(People’s Republic of), Comoros, 

Croatia, Djibouti, Egypt, Georgia, India, 

Iraq, Israel, Jordan, Kazakhstan, Kuwait, 

Kyrgyzstan, Laos, Lebanon, Macau, 

Macedonia (The Former Yugoslav 

Republic of), Mauritania, Moldova, 

Mongolia, Morocco, Oman, Pakistan, 

Qatar, Russia, Serbia and Montenegro, 

Saudi Arabia, Tajikistan, Tunisia, 

Turkmenistan, Ukraine, United Arab 

Emirates, Uzbekistan, Vanuatu, 

Vietnam, and Yemen.

(2) Eligible commodities. None. 

(3) Eligible technology and source 

code. Technology and source code 

described in paragraph (a)(2) of this 

section for computers with a CTP less 

than or equal to 75,000 MTOPS are 

eligible for deemed exports under 

License Exception CTP to foreign 

nationals of Tier 3 destinations as 

described in paragraph (d)(1) of this 

section, subject to the restrictions in 

paragraph (b) and the provisions of 

paragraph (d)(4) of this section. 

(4) Foreign National Review (FNR) 

requirement for deemed exports. (i) 

Submission requirement. Prior to 

disclosing eligible technology or source 

code to a foreign national of a Computer 

Tier 3 country that is not also a country 

listed in Country Group B in 

Supplement No. 1 to part 740 of the 

EAR under this License Exception, you 

must submit a Foreign National Review 

(FNR) request to BIS, as required under 

§ 748.8(s) of the EAR. Your FNR request 

must include information about the 

foreign national required under 

§ 748.8(t) of the EAR and set forth in 

Supplement No. 2 of part 748 of the 

EAR. 

(ii) Confirmation of eligibility. You 

may not use License Exception CTP, 

until you have obtained confirmation of 

eligibility by calling the System for 

Tracking Export License Applications 

(STELA), see § 750.5 for how to use 

STELA, or electronically from the 

Simplified Network Application 

Procedure (SNAP), see http://

Federal Register / Vol. 69, No. 214 / Friday, November 5, 2004 / Rules and Regulations 64489

www.bis.doc.gov/SNAP/index.htm for 

more information about SNAP. 

(iii) Action by BIS. Within nine 

business days of the registration of the 

FNR request, BIS will electronically 

refer the FNR request for interagency 

review, or if necessary return the FNR 

request without action (e.g., if the 

information provided is incomplete). 

Processing time starts at the point at 

which the notification is registered into 

BIS’s electronic system. 

(iv) Review by other departments or 

agencies. The Departments of Defense, 

State, Energy, and other agencies, as 

appropriate, may review the FNR 

request. Within 30 calendar days of 

receipt of the BIS referral, the reviewing 

agency will provide BIS with a 

recommendation either to approve or 

deny the FNR request. A reviewing 

agency that fails to provide a 

recommendation within 30 days shall 

be deemed to have no objection to the 

final decision of BIS. 

(v) Action on the FNR Request. After 

the interagency review period, BIS will 

promptly notify the applicant regarding 

the FNR request, i.e., whether the FNR 

request is approved, denied, or more 

time is needed to consider the request. 

(e) Reporting requirements. See 

§ 743.1 of the EAR for reporting 

requirements of certain items under 

License Exception CTP.

PART 748—[AMENDED]

■ 3. The authority citation for part 748 is 

revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767, 

3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 

FR 44025, 3 CFR, 2001 Comp., p. 783; Notice 

of August 6, 2004, 69 FR 48763 (August 10, 

2004).

■ 4. Section 748.8 is amended by 

revising the heading, and adding 

paragraphs (r), (s), and (t), to read as 

follows:

§ 748.8 Unique application and 

submission requirements.

* * * * *

(r) Encryption review requests. 

(s) Foreign National Review Request. 

(t) Foreign National Support 

Statement for deemed exports.

■ 5. Supplement No. 2 to part 748 is 

amended by revising the heading and 

adding paragraphs (s) and (t), to read as 

follows:

Supplement No. 2 to Part 748—Unique 

Application and Submission Requirements

* * * * *

(s) Foreign National Review Request. (1) 

BIS–748P ‘‘Multipurpose Application’’ form.

If you are submitting a Foreign National 

Review (FNR) request for the deemed export 

of technology or source code, you must 

include the following information on the 

BIS–748P ‘‘Multipurpose Application’’ form:

(i) In Block 1 through 3, insert name, 

telephone, and facsimile of the person that is 

most knowledgeable about the foreign 

national; 

(ii) In Block 4 (Date of Application), enter 

the date; 

(iii) In Block 5 (Type of Application), place 

an ‘‘X’’ in the box marked ‘‘Other’’; 

(iv) In Block 6 (Documents Submitted with 

Application), place an ‘‘X’’ in ‘‘Other’’ to 

signify that you are submitting the Foreign 

National Review Support Statement(s) with 

the BIS–748P, and place an ‘‘X’’ in ‘‘BIS–

748P–B’’ if you are submitting this FNR for 

multiple foreign nationals; 

(v) In Block 9 (Special Purpose), insert the 

phrase ‘‘Foreign National Review (FNR)’’; 

(vi) In Block 14 (Applicant), insert the 

name of the applicant; 

(vii) In Block 18 (Ultimate Consignee), 

insert the name and address of the Foreign 

National; 

(viii) In Block 21 (Specific End-Use), insert 

any information which may be of interest 

regarding the export of the technology or 

source code; 

(ix) In Block 24 (Additional Information), 

insert contact email information; 

(x) In Block 25 (Signature), sign the BIS–

748P, and insert the name and title of the 

signer; and 

(xi) All other Blocks on the application 

may be left blank. 

(2) Multiple Foreign Nationals. If you are 

submitting a Foreign National Review 

Request for more than one individual, you 

may add other foreign nationals by 

completing and attaching form BIS–748P–B 

‘‘End-User Appendix.’’

(t) Foreign National Review Support 

Statement. To request review of your FNR, 

you must submit to BIS a FNR support 

statement as set forth below on company 

letterhead, along with Form BIS–748P 

(Multipurpose Application), or its electronic 

equivalent. For FNRs that include multiple 

foreign nationals, an FNR support statement 

must be submitted for each foreign national. 

(1) Case number (Z number): Zxxxxxx; 

(2) Name, and all other names ever used; 

(3) Date of birth: dd/mm/yyyy; 

(4) Place of birth: city, state/province, and 

country; 

(5) U.S. Address: street address, city, state, 

zip; 

(6) Overseas Address: street address, city, 

province, country; 

(7) Visa type (with expiration date and 

place issued, if available): type, dd/mm/yyyy, 

city, country; 

(8) I–94 No. xxxxxxx, dd/mm/yyyy; 

(9) Passport and Country of Issue: 

xxxxxxxx, country; 

(10) U.S. Education (schools, degrees, and 

dates received) (if any): degree, subject, 

university, city, state, country, month/year–

month/year; 

(11) Foreign Education: degree, subject, 

university, city, state, country, month/year–

month/year; 

(12) Employer (applicant) and address: 

company, street address, city, state, zip; 

(13) Detailed explanation of position 

requirements and individual’s qualifications 

related to the position; and 

(14) Prior Employment Record, (including 

overseas employment) addresses and dates; 

explain any periods of unemployment.

PART 774—[AMENDED]

■ 6. The authority citation for part 774 

continues to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C. 

7430(e); 18 U.S.C. 2510 et seq.; 22 U.S.C. 

287c, 22 U.S.C. 3201 et seq., 22 U.S.C. 6004; 

30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42 

U.S.C. 6212; 43 U.S.C. 1354; 46 U.S.C. app. 

466c; 50 U.S.C. app. 5; Sec. 901–911, Pub. L. 

106–387; Sec. 221, Pub. L. 107–56; E.O. 

13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 

228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 

Comp., p. 783; Notice of August 6, 2004, 69 

FR 48763 (August 10, 2004).

Supplement No. 1 to Part 774 

[Amended]

■ 7. In Supplement No. 1 to part 774 (the 

Commerce Control List), Category 4—

Computers, Export Control Classification 

Number (ECCN) 4D001 is amended by 

revising the License Exception section, 

to read as follows:

4D001 ‘‘Software’’ specially designed or 

modified for the ‘‘development’’, 

‘‘production’’ or ‘‘use’’ of equipment or 

‘‘software’’ controlled by 4A001 to 4A004, or 

4D (except 4D980, 4D993 or 4D994), and 

other specified software, see List of Items 

Controlled.

* * * * *

License Exceptions 

CIV: N/A 

TSR: Yes, except software for commodities 

controlled by ECCN 4A003.b or ECCN 

4A003.c is limited to software for computers 

or electronic assemblies with a CTP equal to 

or less than 33,000 MTOPS. 

CTP: Yes to specific countries (see § 740.7 

of the EAR for eligibility criteria)

* * * * *

■ 8. In Supplement No. 1 to part 774 (the 

Commerce Control List), Category 4—

Computers, Export Control Classification 

Number (ECCN) 4E001 is amended by 

revising the License Exception section, 

to read as follows:

4E001 ‘‘Technology’’ according to the 

General Technology Note, for the 

‘‘development’’, ‘‘production’’ or ‘‘use’’ of 

equipment or ‘‘software’’ controlled by 4A 

(except 4A980, 4A993 or 4A994) or 4D 

(except 4D980, 4D993, 4D994), and other 

specified technology, see List of Items 

Controlled.

* * * * *

License Exceptions 

CIV: N/A 

TSR: Yes, except technology for 

commodities controlled by ECCN 4A003.b or 

ECCN 4A003.c is limited to technology for 

64490 Federal Register / Vol. 69, No. 214 / Friday, November 5, 2004 / Rules and Regulations 

computers or electronic assemblies with a 

CTP equal to or less than 33,000 MTOPS. 

CTP: Yes to specific countries (see § 740.7 

of the EAR for eligibility criteria)

* * * * *

Dated: October 28, 2004. 

Peter Lichtenbaum, 

Assistant Secretary for Export 

Administration.

[FR Doc. 04–24679 Filed 11–4–04; 8:45 am] 

BILLING CODE 3510–33–P

DEPARTMENT OF COMMERCE

Bureau of Industry and Security 

15 CFR Parts 740 and 774

Docket No. 041018284–4284–01

RIN 0694–AD04

Microprocessor Technology Eligible 

for Export Under License Exception

AGENCY: Bureau of Industry and 

Security, Commerce.

ACTION: Final rule.

SUMMARY: The Bureau of Industry and 

Security (BIS) is expanding the 

availability of License Exception CIV for 

certain deemed exports of 

microprocessor technology on the 

Commerce Control List (CCL) of the 

Export Administration Regulations 

(EAR) under Export Classification 

Control Numbers (ECCN) 3E001 and 

3E002. These ECCNs control technology 

that can be used for the development 

and production of microprocessors. This 

final rule partially implements a 

proposed rule published on October 24, 

2003. The proposed rule included the 

export and reexport of general purpose 

microprocessor technology under 

License Exception CIV, while this final 

rule limits License Exception CIV 

eligibility to deemed exports for certain 

microprocessor technology. BIS has 

determined that further liberalization of 

controls on exports of microprocessor 

technology must await agreement in the 

Wassenaar Arrangement. This rule also 

establishes a ‘‘Foreign National Review 

(FNR)’’ requirement under License 

Exception CIV for deemed exports of 

microprocessor technology to certain 

eligible foreign nationals.

DATES: This rule is effective on 

November 5, 2004.

FOR FURTHER INFORMATION CONTACT:

Sharron Cook, Senior Export Policy 

Analyst, Office of Exporter Services, 

Regulatory Policy Division, Bureau of 

Industry and Security, Telephone: (202) 

482–2440.

SUPPLEMENTARY INFORMATION: 

Background 

On October 24, 2003, BIS published a 

proposed rule with request for 

comments (68 FR 60891) from industry 

to assist BIS in evaluating 

microprocessor technology controlled 

under ECCN 3E002, as well as computer 

technology and software controls. BIS 

received eleven comments in response 

to this request. While the proposed rule 

covered both microprocessor technology 

and computer technology and software, 

BIS has decided to address computer 

technology and software and 

microprocessor technology in two 

different rules. This final rule 

implements the license exception 

expansion for microprocessor 

technology. The corresponding rule on 

license exception eligibility for 

computer technology is published 

elsewhere in this issue of the Federal 

Register. 

Current Controls on Microprocessor 

Technology 

Technology for the development and 

production of microprocessors that have 

a CTP exceeding 530 MTOPS and an 

arithmetic logic unit with an access 

width of 32 bits or more are controlled 

by ECCN 3E002, pursuant to agreement 

by members of the Wassenaar 

Arrangement (WA). License Exception 

TSR is available for the export and 

reexport of technology for 

microprocessors of unlimited CTP to all 

Country Group B countries (see

Supplement No. 1 to part 740 of the 

EAR), if all the criteria of License 

Exception TSR are met (see section 

740.6 of the EAR for License Exception 

TSR requirements). 

In addition, technology for the 

development or production of 

microprocessors that have more than 

one data or instruction bus or serial 

communication port that provides a 

direct external interconnection between 

parallel ‘‘microprocessor microcircuits’’

with a transfer rate exceeding 150 

Megabytes per second are controlled by 

ECCN 3E001, because ‘‘microprocessor 

microcircuits’’, ‘‘micro-computer 

microcircuits’’ and microcontroller 

microcircuits having this characteristic 

are controlled under ECCN 3A001.a.3.c. 

License Exception TSR is available for 

the export and reexport of technology 

for microprocessors of unlimited 

transfer rate to all Country Group B 

countries (see Supplement No. 1 to part 

740 of the EAR), if all the criteria of 

License Exception TSR are met (see

section 740.6 of the EAR for License 

Exception TSR requirements).

Deemed Export Revisions 

While the original Federal Register

notice proposed expanding License 

Exception availability for actual exports 

and reexports of microprocessor 

technology, this final rule expands 

License Exception CIV availability for 

deemed exports only. Generally, 

Wassenaar countries do not have incountry transfer controls (deemed 

export controls), with the exception of 

classified material. 

Microprocessor technology is listed 

by the Wassenaar Arrangement on the 

Basic List (530 MTOPS). Accordingly 

adjustments in control limits for actual 

exports and reexport of microprocessor 

technology should be implemented 

based on agreement with the United 

States’ Wassenaar partners. Therefore, 

the United States may discuss raising 

the level of controls for actual export 

and reexport of microprocessor 

technology in the Wassenaar 

Arrangement. 

The EAR defines ‘‘export’’ to include, 

among other things, the release of 

technology or source code subject to the 

EAR to a foreign national within the 

United States. Such release is ‘‘deemed’’

to be an export to the home country or 

countries of the foreign national. The 

deemed export rule does not apply to 

persons lawfully admitted for 

permanent residence in the United 

States and does not apply to persons 

who are protected individuals under the 

Immigration and Naturalization Act (8 

U.S.C. 1324b(a)(3)). Deemed export 

license applications for foreign 

nationals with dual citizenship should 

be based on the most recently obtained 

country citizenship. Applications for 

foreign nationals with temporary or 

permanent residence status of a third 

country (i.e., non-U.S. and a temporary 

or permanent residence status other 

than a foreign national’s country of 

origin) should be based on the foreign 

national’s country of citizenship. 

Because the United States is one of 

the only WA country members to 

implement deemed export controls, U.S. 

industry has been required to obtain 

license authorization for these deemed 

exports when other WA member 

countries have not imposed such 

controls on their industries. Expanding 

the availability of a License Exception 

for general purpose microprocessor 

technology provides relief from 

licensing burdens for U.S. industry and 

levels the playing field in global 

competition. BIS has found that the 

expansion of license exception 

availability under the technology 

parameters set forth below will not have