[Federal Register Volume 69, Number 215 (Monday, November 8, 2004)]
[Rules and Regulations]
[Pages 64657-64659]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-24857]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 740 and 744

[Docket No. 040818241-4241-01]
RIN 0694-AC46


Revisions to the Export Administration Regulations: Removal of 
the List of Missile Projects and Expansion of Missile-Related End-Use 
and End-User Controls

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Interim rule.

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SUMMARY: This interim rule amends the Export Administration Regulations 
(EAR) by removing the list of missile projects of concern and expanding 
license requirements for missile-related end-users and end-uses. This 
rule expands the scope of end-uses to which a license requirement 
applies to include certain rocket and unmanned air vehicle activities 
in certain countries of concern for missile proliferation reasons. In 
addition, this rule implements a new license requirement for exports, 
reexports and transfers anywhere in the world that applies when you 
know or are informed that an item subject to the EAR will be used in 
rocket systems or unmanned air vehicles of any range for the delivery 
of chemical, biological or nuclear weapons. These changes to the end-
use and end-user controls are necessary to meet U.S. nonproliferation 
objectives and are consistent with the Missile Technology Control 
Regime (MTCR) Guidelines.

DATES: This rule is effective November 8, 2004.

ADDRESSES: You may submit comments, identified by RIN 0694-AC46, by any 
of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#f9949b95988a92968fb99b908ad79d969ad79e968f"><span class="__cf_email__" data-cfemail="b3ded1dfd2c0d8dcc5f3d1dac09dd7dcd09dd4dcc5">[email protected]</span></a>. Include ``RIN 0694-AC46'' in 
the subject line of the message.
    <bullet> Fax: (202) 482-3355.
    <bullet> Mail or Hand Delivery/Courier: Matthew Blaskovich, U.S. 
Department of Commerce, Bureau of Industry and Security, Regulatory 
Policy Division, 14th & Pennsylvania Avenue, NW., Room 2705, 
Washington, DC 20230, ATTN: RIN 0694-AC46.

FOR FURTHER INFORMATION CONTACT: Steven B. Clagett, Director, Nuclear 
and Missile Technology Controls Division, Bureau of Industry and 
Security, Telephone: (202) 482-1641.

SUPPLEMENTARY INFORMATION:

Background

    Current License Requirements for Missile-Related End-Uses/End-
Users. Section 742.5 of the Export Administration Regulations (EAR) 
requires a license for the export or reexport to all destinations 
(except Canada) of those dual-use items specifically identified on the 
Commerce Control List (CCL) as controlled for missile technology (MT) 
reasons. Section 744.3 of the EAR also requires a license for the 
export or reexport of any item subject to the EAR, when the exporter 
knows or has reason to know that the item (1) is destined for a missile 
project listed in the footnote to Country Group D:4 in Supplement 1 to 
part 740 of the EAR, or (2) will be used in the design, development, 
production, or use of missiles in or by a country listed in Country 
Group D:4, whether or not the use involves a project listed in the 
footnote. ``Missile'' is defined in the EAR as a rocket system or 
unmanned air vehicle system capable of delivering at least 500 
kilograms payload to a range of at least 300 kilometers. The list of 
missile projects set forth in the footnote to Supplement No. 1 to part 
740 includes only those projects meeting the ``missile'' payload and 
range criteria.
    Removal of List of Missile Projects in D:4 Countries. This rule 
removes the list of missile projects in D:4 countries set forth in the 
footnote in Supplement No. 1 to Part 740 of the EAR because the 
activities subject to the license requirement set forth in 744.3 are no 
longer limited to ``missile'' projects with a certain payload and range 
capability. The referenced activities are expanded, by this rule, to 
include any rocket system or unmanned air vehicle with a range of 300 
kilometers to be used in D:4 countries.
    Worldwide License Requirement for Delivery Systems for Chemical, 
Biological or Nuclear Weapons. This rule implements a new license 
requirement in section 744.3 for exports, reexports and transfers to 
anywhere in the world that applies when you know, or are informed, that 
an item subject to the EAR will be used in rocket systems or unmanned 
air vehicles of any range for the delivery of chemical, biological or 
nuclear weapons.
    Expansion of End-Use License Requirement for Country Group D:4 
Countries. This rule revises the license requirements under section 
744.3 of the EAR to provide that a license is required for the export, 
reexport or transfer of any item subject to the EAR if you know, or are 
informed, that the item will be used in the design, development, 
production or use of rocket systems or

[[Page 64658]]

unmanned air vehicles capable of a range of at least 300 kilometers in 
or by a country listed in Country Group D:4. This rule also provides 
that a license is required if you know that the item will be used in 
the design, development, production or use of rocket systems or 
unmanned air vehicles in or by a country listed in Country Group D:4, 
but are unable to determine the characteristics (i.e., range 
capabilities) of the rocket systems or unmanned air vehicles, or 
whether the rocket systems or unmanned air vehicles, regardless of 
range capabilities, are used for the delivery of chemical, biological, 
or nuclear weapons.
    For purposes of this rule, ``rocket systems'' include, but are not 
limited to, ballistic missile systems, space launch vehicles, and 
sounding rockets. ``Unmanned air vehicles'' include, but are not 
limited to, cruise missile systems, target drones and reconnaissance 
drones. This rule adds these definitions in a note to section 744.3 of 
the EAR.
    This rule imposes new export controls for foreign policy reasons. 
As required by section 6 of the Export Administration Act of 1979, as 
amended (the Act), a report on the imposition of these controls was 
delivered to Congress on September 20, 2004.
    Although the 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 EAR in effect under the International Emergency Economic Powers 
Act.

Savings Clause

    Shipments of items that are subject to a license requirement as a 
result of this regulatory action 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 November 8, 2004, pursuant to actual 
orders for export to a foreign destination, may proceed to that 
destination without a license so long as they have been exported from 
the United States before December 8, 2004. Any such items not actually 
exported before midnight, on December 8, 2004, require a license in 
accordance with this regulation.

Rulemaking Requirements

    1. This rule has been determined to be not significant for purposes 
of Executive Order 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, unless that collection of 
information displays a currently valid Office of Management and Budget 
Control Number. This rule involves a collection of information subject 
to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). This 
collection has been approved by the Office of Management and Budget 
under control number 0694-0088, ``Multi-Purpose Application,'' which 
carries a burden hour estimate of 58 minutes for a manual or electronic 
submission. Send comments regarding these burden estimates or any other 
aspect of these collections of information, including suggestions for 
reducing the burden, to David Rostker, Office of Management and Budget 
(OMB), by e-mail to <a href="/cdn-cgi/l/email-protection#5a1e3b2c333e050835292e313f281a353738743f352a743d352c"><span class="__cf_email__" data-cfemail="a9edc8dfc0cdf6fbc6daddc2ccdbe9c6c4cb87ccc6d987cec6df">[email protected]</span></a>, or by fax to (202) 395-
7285; and to the Office of Administration, Bureau of Industry and 
Security, Department of Commerce, 14th and Pennsylvania Avenue, NW., 
Room 6883, Washington, DC 20230.
    3. This rule does not contain policies with federalism implications 
as that term is defined in Executive Order 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 United States (Sec. 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 interim rule. Because 
a notice of proposed rulemaking and an opportunity for public comment 
are not required to be given for this rule under 5 U.S.C. 553 or by any 
other law, the analytical requirements of the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.) are not applicable.
    However, because of the importance of the issues raised by these 
regulations, this rule is being issued in interim form and BIS will 
consider comments in the development of the final regulations. 
Accordingly, BIS encourages interested persons who wish to comment to 
do so at the earliest possible time to permit the fullest consideration 
of their views.
    The period for submission of comments will close December 23, 2004. 
BIS will consider all comments received before the close of the comment 
period in developing final regulations. Comments received after the end 
of the comment period will be considered if possible, but their 
consideration cannot be assured. BIS will not accept public comments 
accompanied by a request that a part or all of the material be treated 
confidentially because of its business proprietary nature or for any 
other reason. BIS will return such comments and materials to the 
persons submitting the comments and will not consider them in the 
development of final regulations. All public comments on these 
regulations will be a matter of public record and will be available for 
public inspection and copying. In the interest of accuracy and 
completeness, BIS requires comments in written form.
    Oral comments must be followed by written memoranda, which will 
also be a matter of public record and will be available for public 
review and copying. Communications from agencies of the United States 
Government or foreign governments will not be available for public 
inspection.
    The public record concerning these comments will be maintained in 
the Bureau of Industry and Security, Office of Administration, U.S. 
Department of Commerce, Room 6883, 14th Street and Constitution Avenue, 
NW., Washington, DC 20230; (202) 482-2165. This component does not 
maintain a separate public inspection facility. Requesters should first 
view BIS's FOIA Web site (which can be reached through http://www.bis.doc.gov/foia). If the records sought cannot be located at this 
site, or if the requester does not have access to a computer, please 
call the phone number above for assistance.
    Please refer to the ADDRESSES section cited above for comment 
submission.

List of Subjects

15 CFR Part 740

    Exports, Foreign trade, Reporting and Recordkeeping requirements.

15 CFR Part 744

    Exports, Foreign trade, Reporting and Recordkeeping requirements.

0
Accordingly, parts 740 and 744 of the Export Administration Regulations 
(15 CFR Parts 730-799) are amended as follows:

PART 740--[AMENDED]

0
1. The authority citation for 15 CFR 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).

0
2. Supplement No. 1 to part 740 is amended by removing the footnote to 
Country Group D:4, and all footnote references in the table.

[[Page 64659]]

PART 744--[AMENDED]

0
3. The authority citation for 15 CFR part 744 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; Sec. 901-911, Pub. L. 106-
387; Sec. 221, Pub. L. 107-56; E.O. 12058, 43 FR 20947, 3 CFR, 1978 
Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; 
E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 12947, 60 
FR 5079, 3 CFR, 1995 Comp., p. 356; E.O. 13026, 61 FR 58767, 3 CFR, 
1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 
208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 
66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice of October 29, 2003, 
68 FR 62209, 3 CFR, 2003 Comp., p. 347; Notice of August 6, 2004, 69 
FR 48763 (August 10, 2004).

0
4. Section 744.3 is amended by revising the section heading and 
paragraphs (a), (b) and (d) to read as follows:


Sec.  744.3  Restrictions on Certain Rocket Systems (including 
ballistic missile systems and space launch vehicles and sounding 
rockets) and Unmanned Air Vehicles (including cruise missile systems, 
target drones and reconnaissance drones) End-Uses.

    (a) General prohibition. In addition to the license requirements 
for items specified on the CCL, you may not export, reexport, or 
transfer (in-country) an item subject to the EAR, without a license if 
at the time of the export, reexport or transfer you know the item:
    (1) Will be used in the design, development, production or use of 
rocket systems or unmanned air vehicles capable of a range of at least 
300 kilometers in or by a country listed in Country Group D:4 of 
Supplement No. 1 to part 740 of the EAR.
    (2) Will be used, anywhere in the world, in rocket systems or 
unmanned air vehicles, regardless of range capabilities, for the 
delivery of chemical, biological, or nuclear weapons; or
    (3) Will be used in the design, development, production or use of 
any rocket systems or unmanned air vehicles in or by a country listed 
in Country Group D:4, but you are unable to determine:
    (i) The characteristics (i.e., range capabilities) of the rocket 
systems or unmanned air vehicles, or
    (ii) Whether the rocket systems or unmanned air vehicles, 
regardless of range capabilities, will be used in a manner prohibited 
under paragraph (a)(2) of this section.


    Note to paragraph (a) of this section: For the purposes of this 
section, ``Rocket Systems'' include, but are not limited to, 
ballistic missile systems, space launch vehicles, and sounding 
rockets. Also, for the purposes of this section, ``unmanned air 
vehicles'' include, but are not limited to, cruise missile systems, 
target drones and reconnaissance drones.


    (b) Additional prohibition. BIS may inform, either individually, by 
specific notice, or generally through amendment to the EAR, that a 
license is required for a specific export, reexport or transfer of 
specified items to a certain end-user, anywhere in the world, because 
there is an unacceptable risk of use in or diversion to activities 
described in paragraphs (a)(1) or (a)(2) of this section. Specific 
notice is to be given only by, or at the direction of, the Deputy 
Assistant Secretary for Export Administration. When such notice is 
provided orally, it will be followed by a written notice within two 
working days signed by the Deputy Assistant Secretary for Export 
Administration. However, the absence of any such notification does not 
excuse non-compliance with the license requirements of paragraphs 
(a)(1), (a)(2), or (a)(3) of this section.
* * * * *
    (d) License Review Standards. (1) Applications to export, reexport 
or transfer the items subject to this section will be considered on a 
case-by-case basis to determine whether the export, reexport or 
transfer would make a material contribution to the proliferation of 
certain rocket systems, or unmanned air vehicles. When an export, 
reexport or transfer is deemed to make a material contribution, the 
license will be denied.
    (2) The following factors are among those that will be considered 
to determine what action should be taken on an application required by 
this section:
    (i) The specific nature of the end use;
    (ii) The significance of the export, reexport or transfer in terms 
of its contribution to the design, development, production or use of 
certain rocket systems or unmanned air vehicles;
    (iii) The capabilities and objectives of the rocket systems or 
unmanned air vehicles of the recipient country;
    (iv) The nonproliferation credentials of the importing country;
    (v) The types of assurances or guarantees against design, 
development, production, or use for certain rocket system or unmanned 
air vehicle delivery purposes that are given in a particular case; and
    (vi) The existence of a pre-existing contract.

    Dated: October 27, 2004.
Peter Lichtenbaum,
Assistant Secretary for Export Administration.
[FR Doc. 04-24857 Filed 11-5-04; 8:45 am]
BILLING CODE 3510-33-P


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