[Federal Register Volume 69, Number 26 (Monday, February 9, 2004)]
[Rules and Regulations]
[Pages 5928-5930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2655]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 734, 740, and 774

[Docket No. 040202032-4032-01]
RIN 0694-AD03


Licensing Jurisdiction for QRS11 Micromachined Angular Rate 
Sensors

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: This final rule amends the Export Administration Regulations 
(EAR) to transfer, coincident with the State Department's written 
commodity jurisdiction determination of February 9, 2004, licensing 
jurisdiction for QRS11-00100-100/101 Micromachined Angular Rate Sensors 
from the Department of State to the Department of Commerce when those 
sensors are integrated into an instrument system (CSIS) of the type 
described in ECCN 7A994 or aircraft of the type described in ECCN 9A991 
that incorporates a CSIS that has such a sensor integrated, or are 
exported solely for integration into such a system. This rule also 
excludes systems or aircraft integrating QRS11-00100-100/101 sensors 
from eligibility for the de minimis provisions of the EAR, and excludes 
the sensors from license exception eligibility.

DATES: This rule is effective: February 9, 2004.

FOR FURTHER INFORMATION CONTACT: Gene Christiansen, Office of Strategic 
Trade, Bureau of Industry and Security, U.S. Department of Commerce at 
(202) 482-2984.

SUPPLEMENTARY INFORMATION:

Background

    On January 7, 2004, the Department of State published a rule 
amending the International Traffic in Arms Regulations (ITAR) to remove 
from United States Munitions List (USML) jurisdiction certain quartz 
rate sensors when the sensors are integrated into and included as an 
integral part of a commercial standby instrument system for use on 
civil aircraft or exported solely for integration into such commercial 
standby instrument systems. The State Department will review on a case-
by-case basis requests to determine whether a sensor is eligible for 
removal from the USML under the ITAR regulatory change, and must 
provide a written determination of commodity jurisdiction in order for 
the removal to take effect (69 FR 873).
    As of February 9, 2004, the State Department has determined that 
QRS11-00100-100/101 Micromachined Angular Rate Sensors integrated into 
and included as an integral part of a Commercial Standby Instrument 
System (CSIS) of the type described in the Export Administration 
Regulations (EAR) under ECCN 7A994 or an aircraft of the type described 
in ECCN 9A991 that incorporates a CSIS that has such a sensor 
integrated, or exported solely for integration into such a system are 
subject to the licensing jurisdiction of the Department of Commerce. In 
all other cases, the QRS-11 Micromachined Angular Rate Sensors, 
including the QRS11-00100-100/101 sensors, are subject to the licensing 
jurisdiction of the Department of State, Directorate of Defense Trade 
Controls.
    When exported solely for integration into a foreign-made CSIS, the 
QRS11-00100-100/101 is subject to Regional Stability controls under RS 
Column 1 in Part 738 of the EAR, requiring a license for export to all 
destinations except Canada. A CSIS integrating the sensor or an 
aircraft incorporating such a CSIS are subject to Anti-Terrorism 
controls under AT Column 1. No license exceptions are available for the 
QRS11-00100-100/101 sensor or the CSIS integrating the sensor. License 
Exception AVS is available only for certain aircraft on temporary 
sojourn, specifically those eligible under Sec. 740.15(a) of the EAR.
    There is no de minimis level for foreign-made CSISs that contain 
QRS11-00100-100/101 Micromachined Angular Rate Sensors, or for foreign-
made aircraft that incorporate CSISs that have QRS11-00100-100/101s 
integrated (see Sec. 734.4(a) of the EAR). Both the instruments and the 
aircraft remain subject to the EAR regardless of their percentage, by 
value, of U.S. content.
    This final rule involves no new curtailment of exports, because any 
transfer or removal of items from the licensing jurisdiction of the 
Department of State to the licensing jurisdiction of the Department of 
Commerce maintains a continuity of controls. Therefore, the provisions 
regarding the impact of new controls do not apply and contract sanctity 
also does not apply to this imposition of controls (50 app. U.S.C. Sec. 
2405(p)).
    Any violation of the International Traffic in Arms Regulations, 
including any violation of the terms and conditions of any Department 
of State issued export license, prior to the transfer of jurisdiction 
pursuant to this final rule, shall constitute a violation of the Arms 
Export Control Act. Items already exported under State jurisdiction, 
including pursuant to USML licenses, will remain subject to State 
jurisdiction until such time as the exporter requests and Commerce 
issues authorization to replace the State license. Upon notification by 
Commerce of such authorization, State will revoke any previously issued 
licenses. Such items exported under the ITAR, including pursuant to 
USML licenses, but made subject to the EAR by this rule and written 
determination of the Department of State may, thereafter, be integrated 
into CSISs or aircraft that incorporate CSISs that have such sensors 
integrated, or reexported in accordance with the provisions of this 
rule. Actions pending at the Department of State on February 9, 2004, 
including pending license applications, must be refiled with the 
Department of Commerce. In addition, items exported or reexported 
without a USML license prior to a change in jurisdiction in accordance 
with this rule must be disclosed to the Department of State pursuant to 
22 CFR 127.12 prior to requesting Commerce authorization.

[[Page 5929]]

    Consistent with the provisions of section 6 of the Export 
Administration Act, a foreign policy report was submitted to Congress 
on February 3, 2004, notifying the Congress of the change in licensing 
jurisdiction reflected in this rule.
    Although the Export Administration Act expired on August 20, 2001, 
the President, through Executive Order 13222 of August 17, 2001 (66 FR 
44025, 3 CFR, 2001 Comp., p. 783), as extended by the Notice of August 
7, 2003 (68 FR 47833, August 11, 2003), has continued the Export 
Administration Regulations in effect under the International Emergency 
Economic Powers Act.

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, 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 OMB Desk Officer, New Executive Office 
Building, Washington, DC 20503; 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 under E.O. 13132.
    4. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring prior notice, the opportunity for public comment, and a 
delay in effective date, are inapplicable because this regulation 
involves a military and foreign affairs function of the United States 
(5 U.S.C. 553(a)(1)). Further, no other law requires that prior notice 
and an opportunity for public comment be given for this final rule. 
Because prior notice 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 Hillary Hess, Office 
of Exporter Services, Bureau of Export Administration, Department of 
Commerce, P.O. Box 273, Washington, DC 20044.

List of Subjects

15 CFR Part 734

    Administrative practice and procedure, Exports, Foreign trade.

15 CFR Part 740

    Administrative practice and procedure, Exports, Foreign trade, 
Reporting and recordkeeping requirements.

15 CFR Part 774

    Exports, Foreign trade.

0
Accordingly, parts 734, 740, and 774 of the Export Administration 
Regulations (15 CFR parts 730-799) are amended as follows:

PART 734--[AMENDED]

0
1. The authority citation for 15 CFR part 734 is revised to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13020, 61 
FR 54079, 3 CFR, 1996 Comp. p. 219; 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 October 29, 2003, 68 FR 62209, October 31, 2003; 
Notice of August 7, 2003, 68 FR 47833, August 11, 2003.


0
2. Section 734.3, paragraph (a)(3) is revised to read as follows:


Sec. 734.3  Items subject to the EAR.

    (a) * * *
    (3) U.S. origin parts, components, materials or other commodities 
integrated abroad into foreign-made products, U.S. origin software 
commingled with foreign software, and U.S. origin technology commingled 
with foreign technology:
    (i) In any quantity, as described in section 734.4(a) of this part; 
or
    (ii) In quantities exceeding de minimis levels as described in 
section 734.4(c) and Supplement No. 2 of this part;
* * * * *

0
3. Section 734.4 is amended by:
0
(a) Revising paragraph (a), as set forth below;
0
(b) Removing and reserving paragraph (b); and
0
(c) Revising the introductory text for paragraph (c), to read as 
follows:


Sec. 734.4  De minimis U.S. content.

    (a) Items for which there is no de minimis level. (1) There is no 
de minimis level for the export from a foreign country of a foreign-
made computer exceeding 190,000 MTOPS containing U.S.-origin controlled 
semiconductors (other than memory circuits) classified under ECCN 3A001 
to Computer Tier 3; or exceeding 28,000 MTOPS containing U.S.-origin 
controlled semiconductors (other than memory circuits) classified under 
ECCN 3A001 or high speed interconnect devices (ECCN 4A994.j) to 
Computer Tier 4 countries described in Sec. 742.12 of the EAR.
    (2) There is no de minimis level for foreign-made items that 
incorporate U.S.-origin items controlled for ``EI'' reasons under ECCN 
5A002, 5D002 or 5E002 on the Commerce Control List (Supplement No. 1 to 
part 774 the EAR). However, exporters may, as part of an encryption 
review request, ask that software controlled for EI reasons under ECCN 
5D002 and eligible for export under the ``retail'' or ``source code'' 
provisions of license exception ENC, and parts and components 
controlled under ECCN 5A002, be made eligible for de minimis treatment. 
The review of de minimis eligibility will take U.S. national security 
interests into account. Other encryption items controlled for NS or AT 
reasons under ECCNs 5D002, 5A992, 5D992, and 5E992 are not eligible for 
de minimis treatment, unless exporters have complied with the 
applicable notification or review requirements described in Sec. 
740.13(e), Sec. 742.15(b)(1), and Sec. 742.15(b)(2) of the EAR. 
Encryption items controlled by ECCN 5A992, 5D992, or 5E992 and 
described in Sec. 742.15(b)(3) of the EAR are not subject to these 
notification or review requirements.
    (3) There is no de minimis level for foreign-made:
    (i) Commercial Standby Instrument Systems (CSIS) of the type 
described in ECCN 7A994 on the Commerce Control List (Supplement No. 1 
to part 774 the EAR) when the CSISs integrate QRS11-00100-100/101 
Micromachined Angular Rate Sensors; and
    (ii) Aircraft of the type described in ECCN 9A991 when such 
aircraft incorporate a CSIS integrating a QRS11-00100-100/101 sensor.


    Note to paragraph (a)(3): QRS11 Micromachined Angular Rate 
Sensors are subject to the export licensing jurisdiction of the U.S. 
Department of State, Directorate of

[[Page 5930]]

Defense Trade Controls, except when the QRS11-00100-100/101 version 
of the sensor is integrated into and included as an integral part of 
a CSIS of the type described in ECCN 7A994 or aircraft of the type 
described in ECCN 9A991 that incorporates a CSIS that has such a 
sensor integrated, or is exported solely for integration into such a 
system.


    (b) [Reserved]
    (c) Except as provided in paragraph (a) of this section for certain 
computers, items controlled for EI reasons, and certain aircraft and 
instrument systems, the following reexports are not subject to the EAR 
when made to a terrorist-supporting country listed in Country Group E:1 
(see Supplement No. 1 to part 740 of the EAR):
* * * * *

PART 740--[AMENDED]

0
4. The authority citation for 15 CFR part 740 continues 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 7, 2003, 68 FR 47833, August 11, 2003.


0
5. Section 740.2 is amended by adding paragraph (a)(9) to read as 
follows:


Sec. 740.2  Restrictions on all License Exceptions.

* * * * *
    (9) The item is a QRS11-00100-100/101 Micromachined Angular Rate 
Sensor controlled for RS reasons under ECCN 7A994.
* * * * *

SUPPLEMENT NO. 1 TO PART 774--[AMENDED]

0
6. The authority citation for 15 CFR 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 7, 2003, 68 FR 47833, August 11, 2003.


0
7. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 7--Navigation and Avionics, ECCN 7A994 is amended by revising 
the License Requirements section, and the ``Related Controls'' 
paragraph in the List of Items Controlled section, to read as follows:

7A994 Other navigation direction finding equipment, airborne 
communication equipment, all aircraft inertial navigation systems 
not controlled under 7A003 or 7A103, and other avionic equipment, 
including parts and components, n.e.s.

License Requirements

Reason for Control: RS, AT

 
                Control(s)                          Country chart
 
RS applies to QRS11-00100-100/101           RS Column 1
 Micromachined Angular Rate Sensors when
 exported solely for integration into a
 CSIS controlled in this entry.
AT applies to entire entry................  AT Column 1
 

License Requirement Notes: There is no de minimis level for foreign-
made Commercial Standby Instrument Systems (CSIS) that integrate 
QRS11-00100-100/101 Micromachined Angular Rate Sensors (see Sec. 
734.4(a) of the EAR).
* * * * *

List of Items Controlled

Unit: * * *
Related Controls: QRS11 Micromachined Angular Rate Sensors are 
subject to the export licensing jurisdiction of the U.S. Department 
of State, Directorate of Defense Trade Controls, unless the QRS11-
00100-100/101 is integrated into and included as an integral part of 
a CSIS of the type described in ECCN 7A994 or aircraft of the type 
described in ECCN 9A991 that incorporates a CSIS that has such a 
sensor integrated, or is exported solely for integration into such a 
system (See 22 CFR Part 121). In the latter case, such items are 
subject to the licensing jurisdiction of the Department of Commerce. 
Technology specific to the development and production of QRS11 
sensors remains subject to the licensing jurisdiction of the 
Department of State.
Related Definitions: * * *
Items: * * *


0
8. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 7--Navigation and Avionics, ECCN 7E994 is amended by revising 
the License Requirements section, and the ``Related Controls'' 
paragraph in the List of Items Controlled section, to read as follows:

7E994 ``Technology'', n.e.s., for the ``development'', 
``production'', or ``use'' of navigation, airborne communication, 
and other avionics equipment.
* * * * *

List of Items Controlled

Unit: * * *
Related Controls: Technology specific to the development and 
production of QRS11 sensors remains subject to the licensing 
jurisdiction of the Department of State (see ECCN 7A994, Related 
Controls).
Related Definitions: * * *
Items: * * *

0
9. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 9--Propulsion Systems, Space Vehicles and Related Equipment, 
ECCN 9A991 is amended by adding a ``License Requirements Note'' to the 
License Requirements section, and revising the ``Related Controls'' 
paragraph in the List of Items Controlled section, to read as follows:

9A991 ``Aircraft'', n.e.s., and gas turbine engines not controlled 
by 9A001 or 9A101 and parts and components, n.e.s.

License Requirements

Reason for Control: AT, UN

 
                Control(s)                          Country chart
 
AT applies to entire entry................  AT Column 1.
UN applies to 9A991.a.....................  Rwanda.
 

License Requirement Notes: There is no de minimis level for foreign-
made aircraft described by this entry that incorporate Commercial 
Standby Instrument Systems (CSIS) that integrate QRS11-00100-100/101 
Micromachined Angular Rate Sensors (see Sec. 734.4(a) of the EAR).
* * * * *

List of Items Controlled

Unit: * * *
Related Controls: QRS11 Micromachined Angular Rate Sensors are 
subject to the export licensing jurisdiction of the U.S. Department 
of State, Directorate of Defense Trade Controls, unless the QRS11-
00100-100/101 is integrated into and included as an integral part of 
a CSIS of the type described in ECCN 7A994 or aircraft of the type 
described in ECCN 9A991 that incorporates a CSIS that has such a 
sensor integrated, or is exported solely for integration into such a 
system (See 22 CFR part 121). In the latter case, such items are 
subject to the licensing jurisdiction of the Department of Commerce. 
Technology specific to the development and production of QRS11 
sensors remains subject to the licensing jurisdiction of the 
Department of State.
Related Definitions: * * *
Items: * * *

    Dated: February 3, 2004.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 04-2655 Filed 2-6-04; 8:45 am]
BILLING CODE 3510-33-P