80282 Federal Register / Vol. 76, No. 247 / Friday, December 23, 2011 / Proposed Rules 

the acceptable sediment content 

classification (No. 1 or No. 2), it shall be 

rejected. 

Dated: December 14, 2011. 

David R. Shipman, 

Acting Administrator. 

[FR Doc. 2011–32925 Filed 12–22–11; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Parts 742 and 774 

[Docket No. 111020643–1642–01] 

RIN 0694–AF42 

Revisions to the Export Administration 

Regulations (EAR): Control of Vessels 

of War and Related Articles the 

President Determines No Longer 

Warrant Control Under the United 

States Munitions List (USML) 

AGENCY: Bureau of Industry and 

Security, Department of Commerce. 

ACTION: Proposed rule. 

SUMMARY: The Bureau of Industry and 

Security publishes a proposed rule that 

describes how surface vessels of war 

and related articles that the President 

determines no longer warrant control 

under Category VI (surface vessels of 

war and special naval equipment) of the 

United States Munitions List (USML) 

would be controlled under the 

Commerce Control List (CCL) in new 

Export Control Classification Numbers 

(ECCNs) 8A609, 8B609, 8C609, 8D609, 

and 8E609. 

This rule is one of a planned series of 

proposed rules that are part of the 

Administration’s Export Control Reform 

Initiative under which various types of 

articles presently controlled on the 

USML under the International Traffic in 

Arms Regulations (ITAR) would, 

instead, be controlled on the CCL in 

accordance with the requirements of the 

Export Administration Regulations 

(EAR), if and after the President 

determines that such articles no longer 

warrant control on the USML. 

BIS is publishing this proposed rule, 

on December 23, 2011, in conjunction 

with another proposed rule that 

describes how submersible vessels, 

oceanographic and associated 

equipment the President determines no 

longer warrant control under USML 

Category VI or Category XX would be 

controlled under the CCL in new Export 

Control Classification Numbers (ECCNs) 

8A620, 8B620, 8D620, and 8E620. This 

proposed rule also is being published in 

conjunction with two proposed rules of 

the Department of State, Directorate of 

Defense Trade Controls, that would 

amend the list of articles controlled by 

USML Categories VI and XX, 

respectively. 

DATES: Comments must be received by 

February 6, 2012. 

ADDRESSES: You may submit comments 

by any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. The identification 

number for this rulemaking is BIS– 

2011–0044. 

• By email directly to 

publiccomments@bis.doc.gov. Include 

RIN 0694–AF42 in the subject line. 

• By mail or delivery to Regulatory 

Policy Division, Bureau of Industry and 

Security, U.S. Department of Commerce, 

Room 2099B, 14th Street and 

Pennsylvania Avenue NW., Washington, 

DC 20230. Refer to RIN 0694–AF42. 

FOR FURTHER INFORMATION CONTACT: 

Alexander Lopes, Director, Office of 

Nonproliferation and Treaty 

Compliance, Bureau of Industry and 

Security, U.S. Department of Commerce, 

Telephone: (202) 482–4875, Email: 

Alexander.Lopes@bis.doc.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

On July 15, 2011, as part of the 

Administration’s ongoing Export 

Control Reform Initiative, the Bureau of 

Industry and Security (BIS) published a 

proposed rule (76 FR 41958) (‘‘the July 

15 proposed rule’’) that set forth a 

framework for how articles the 

President determines, in accordance 

with section 38(f) of the Arms Export 

Control Act (AECA) (22 U.S.C. 2778(f)), 

would no longer warrant control on the 

United States Munitions List (USML) 

and, instead, would be controlled on the 

Commerce Control List (CCL). The July 

15 proposed rule also contained a 

proposal by BIS describing how military 

vehicles and related articles in USML 

Category VII that no longer warrant 

control under the USML would be 

controlled on the CCL—the military 

vehicles proposal was the first in a 

series of such proposed rules to be 

published by BIS. 

On November 7, 2011 (76 FR 68675), 

and December 6, 2011 (76 FR 76072), 

BIS published proposed rules 

describing, respectively, how aircraft 

and related items, and gas turbine 

engines and related items, determined 

by the President to no longer warrant 

control under the USML would be 

controlled on the CCL. In the November 

7 proposed rule, BIS also made several 

changes and additions to the framework 

proposed in the July 15 proposed rule. 

BIS plans to publish additional 

proposed rules describing how certain 

articles that the President determines no 

longer warrant control on the USML 

(e.g., submersibles, submarines, and 

related articles now controlled by USML 

Category VI or XX) would be controlled 

on the CCL. 

BIS also plans to publish a proposed 

rule describing how the new controls 

described in this and similar notices 

would be implemented, such as through 

the use of ‘‘grandfather’’ clauses and 

additional exceptions. The goal of such 

amendments would be to give exporters 

sufficient time to implement the final 

versions of such changes and to avoid, 

to the extent possible, situations where 

transactions would require licenses 

from both the State Department and the 

Commerce Department. 

Following the structure of the July 15 

and November 7 proposed rules, which 

describe the ‘‘export control reform 

initiative framework’’ for controlling on 

the CCL articles that the President 

determines no longer warrant control on 

the USML, this proposed rule describes 

BIS’s proposal for how another group of 

items—various surface vessels of war 

and related articles that are controlled 

by USML Category VI—would be 

controlled on the CCL. The changes 

described in this proposed rule and the 

State Department’s proposed 

amendment to Category VI of the USML 

are based on a review of Category VI by 

the Defense Department, which worked 

with the Departments of State and 

Commerce in preparing the proposed 

amendments. The review was focused 

on identifying the types of articles that 

are now controlled by USML Category 

VI that are either: (i) Inherently military 

and otherwise warrant control on the 

USML, or (ii) if they are a type common 

to civil applications, possess parameters 

or characteristics that provide a critical 

military or intelligence advantage to the 

United States, and are almost 

exclusively available from the United 

States. If an article satisfies either or 

both of those criteria, the article would 

remain on the USML. If an article did 

not satisfy either criterion, but is 

nonetheless a type of article that is, as 

a result of differences in form and fit, 

‘‘specially designed’’ for military 

applications, then it is identified in one 

of the new ECCNs in this proposed rule. 

Finally, if an article does not satisfy 

either of the two criteria and is not 

found to be ‘‘specially designed’’ for 

military applications, the article is not 

affected by this rule because such items 

already are not on the USML. 

The licensing policies and other EARspecific controls for such items that are 

also described in this proposed rule 


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Federal Register / Vol. 76, No. 247 / Friday, December 23, 2011 / Proposed Rules 80283 

would enhance our national security by: 

(i) Allowing for greater interoperability 

with our NATO and other allies while 

maintaining and expanding robust 

controls that, in some instances, would 

include prohibitions on exports or 

reexports destined for other countries or 

intended for proscribed end-users and 

end-uses; (ii) enhancing our defense 

industrial base by, for example, 

reducing the current incentives for 

foreign companies to design out or 

avoid U.S.-origin ITAR-controlled 

content, particularly with respect to 

generic, unspecified parts and 

components; and (iii) permitting the 

U.S. Government to focus its resources 

on controlling, monitoring, 

investigating, analyzing, and, if need be, 

prohibiting exports and reexports of 

more significant items to destinations, 

end users, and end uses of greater 

concern than our NATO allies and other 

multi-regime partners. 

Pursuant to section 38(f) of the AECA, 

the President shall review the USML ‘‘to 

determine what items, if any, no longer 

warrant export controls under’’ the 

AECA. The President must report the 

results of the review to Congress and 

wait 30 days before removing any such 

items from the USML. The report must 

‘‘describe the nature of any controls to 

be imposed on that item under any 

other provision of law.’’ 22 U.S.C. 

2778(f)(1). This proposed rule describes 

how certain surface vessels of war and 

related articles in USML Category VI 

would be controlled by the EAR and 

identified on the CCL, if the President 

determines that the articles no longer 

warrant control on the USML. The 

Department of Commerce is publishing, 

in conjunction with this proposed rule 

on December 23, 2011, a proposed rule 

that will describe how submersible 

vessels, oceanographic and associated 

equipment that the President 

determines no longer warrant control on 

the USML Category VI or XX would be 

controlled on the CCL under new 

ECCNs 8A620, 8B620, 8D620, and 

8E620. 

In the July 15 proposed rule, BIS 

proposed creating a series of new 

ECCNs to control items that: (i) Would 

be moved from the USML to the CCL or 

(ii) are listed on the Wassenaar 

Arrangement on Export Controls for 

Conventional Arms and Dual-Use Goods 

and Technologies Munitions List 

(Wassenaar Arrangement Munitions List 

or WAML) and are already controlled 

elsewhere on the CCL. The proposed 

rule referred to this series as the ‘‘600 

series’’ because the third character in 

each of the new ECCNs would be a ‘‘6.’’ 

The first two characters of the 600 series 

ECCNs serve the same function as 

described for any other ECCN in § 738.2 

of the EAR. The first character is a digit 

in the range 0 through 9 that identifies 

the Category on the CCL in which the 

ECCN is located. The second character 

is a letter in the range A through E that 

identifies the product group within a 

CCL Category. In the 600 series, the 

third character is the number 6. With 

few exceptions, the final two characters 

identify the WAML category that covers 

items that are the same or similar to 

items in a particular 600 series ECCN. 

BIS will publish additional Federal 

Register notices containing proposed 

amendments to the CCL that will 

describe proposed controls for 

additional categories of articles the 

President determines no longer warrant 

control under the USML. The State 

Department will publish, concurrently, 

proposed amendments to the USML that 

correspond to the BIS notices. BIS will 

also publish proposed rules to further 

align the CCL with the WAML and the 

Missile Technology Control Regime 

Equipment, Software and Technology 

Annex. 

Modifications to Provisions in the July 

15 Proposed Rule 

In addition to the proposals 

mentioned above, this proposed rule 

would make the following modifications 

to the July 15 proposed rule: 

• Addition of the new Category 8 (600 

series) ECCNs to § 742.6(a)(1). 

These modifications are described in 

the section ‘‘Scope of this Proposed 

Rule.’’ 

The comment period for the July 15 

Proposed Rule closed on September 13, 

2011. BIS will consider comments on 

the July 15 proposals only for the 

specific paragraph, note, and ECCNs 

referenced above, and only within the 

context of this proposed rule’s 

modifications to them. 

Scope of This Proposed Rule 

This proposed rule would create five 

new 600 series ECCNs in CCL Category 

8—8A609, 8B609, 8C609, 8D609, and 

8E609—that would control articles the 

President determines no longer warrant 

control under USML Category VI. The 

proposed changes are discussed in more 

detail, below. 

New Category 8 (600 Series) ECCNs 

Certain surface vessels of war and 

related articles that the President 

determines no longer warrant control in 

USML Category VI would be controlled 

under proposed new ECCNs 8A609, 

8B609, 8C609, 8D609, and 8E609. These 

new ECCNs follow the 600 series 

construct identified in the July 15 

proposed rule. 

Paragraph .a of ECCN 8A609 would 

control surface vessels of war that are 

‘‘specially designed’’ for military use, 

but not enumerated in the USML or 

elsewhere on the CCL. Paragraphs .b 

through .w would be reserved for 

possible future use. Paragraph .x would 

consist of parts, components, 

accessories and attachments (including 

certain unfinished products that have 

reached a stage in manufacturing where 

they are clearly identifiable as 

commodities controlled by paragraph .x) 

that are ‘‘specially designed’’ for a 

commodity in paragraph .a or a defense 

article in USML Category VI. Paragraph 

.y would consist of specific types of 

commodities that, if specially designed 

for a commodity subject to control in 

ECCN 8A609 or a defense article in 

USML Category VI, warrant less strict 

controls because they have little or no 

military significance. Commodities 

listed in paragraph .y would be subject 

to antiterrorism (AT Column 1) controls, 

which currently impose a license 

requirement for five countries. A license 

also would be required, in accordance 

with the July 15 proposed rule, if 

commodities listed in paragraph .y were 

destined to the People’s Republic of 

China for a military end use as 

described in § 744.21 of the EAR. 

This proposed rule does not add gas 

turbine engines for military vessels of 

war to the proposed new ECCN 8A609. 

Instead, the Administration issued a 

separate proposed rule, on December 6, 

describing the U.S. Government’s 

controls on gas turbine engines and 

related items for military aircraft, ships, 

and vehicles that no longer warrant 

control under the USML or an existing 

018 ECCN on the CCL. Similarly, this 

proposed rule does not address military 

submersible vessels of war, submarines, 

and related articles that no longer 

warrant control under the USML—BIS 

will address controls on these items in 

a separate proposed rule. 

ECCN 8B609.a would control test, 

inspection, and production 

‘‘equipment’’ ‘‘specially designed’’ for 

the ‘‘development’’ or ‘‘production’’ of 

surface vessels of war and related 

commodities enumerated in ECCN 

8A609 (except for items in 8A609.y) or 

in USML Category VI. Paragraphs .b 

through .x and paragraphs .y.1 through 

.y.98 would be reserved for possible 

future use. 

ECCN 8C609.a would control 

materials ‘‘specially designed’’ for the 

‘‘development’’ or ‘‘production’’ of 

surface vessels of war and related 

commodities enumerated in ECCN 

8A609 that are not specified elsewhere 

on the CCL, such as in Category 1, or on 

the USML. Paragraphs .b through .x of 


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80284 Federal Register / Vol. 76, No. 247 / Friday, December 23, 2011 / Proposed Rules 

ECCN 8C609 would be reserved for 

possible future use. USML subcategory 

XIII(f) would continue to control 

structural materials ‘‘specifically 

designed, developed, configured, 

modified, or adapted for defense 

articles,’’ such as warships and vessels 

of war controlled by USML subcategory 

VI(a). The State Department plans to 

publish a proposed rule that would 

make USML Category XIII(f) a more 

positive list of controlled structural 

materials. Commerce will publish a 

corresponding proposed rule under 

which ECCN 8C609 would control any 

materials ‘‘specially designed’’ for 

USML Category VI or ECCN 8A609 that 

would no longer be controlled by the 

revised XIII(f). 

ECCN 8D609.a would control 

‘‘software’’ ‘‘required’’ for the 

‘‘development,’’ ‘‘production,’’ 

operation, or maintenance of 

commodities enumerated in 8A609, 

8B609, or 8C609. Paragraphs .b through 

.x of ECCN 8D609 would be reserved for 

possible future use. ECCN 8D609.y 

would control specific ‘‘software’’ 

‘‘specially designed’’ for the 

‘‘development,’’ ‘‘production,’’ 

operation, or maintenance of 

commodities enumerated in ECCN 

8A609.y, 8B609.y, or 8C609.y. 

ECCN 8E609.a would control 

‘‘technology’’ ‘‘required’’ for the 

‘‘development,’’ ‘‘production,’’ 

operation, installation, maintenance, 

repair, or overhaul of items enumerated 

in ECCN 8A609, 8B609, 8C609, or 

8D609, except for items enumerated in 

8A609.y, 8B609.y, 8C609.y, or 8D609.y. 

Paragraphs .b through .x of ECCN 8E609 

would be reserved for possible future 

use. ECCN 8E609.y would control 

specific ‘‘technology’’ ‘‘required’’ for the 

‘‘development,’’ ‘‘production,’’ 

operation, installation, maintenance, 

repair, or overhaul of items enumerated 

in ECCN 8A609.y, 8B609.y, 8C609.y, or 

8D609.y. 

In addition, ECCNs 8A609, 8B609, 

8C609, 8D609, and 8E609 would each 

contain a special paragraph designated 

‘‘.y.99.’’ Paragraph .y.99 would control 

any item that meets all of following 

criteria: (i) The item is not listed on the 

CCL; (ii) the item was previously 

determined to be subject to the EAR in 

an applicable commodity jurisdiction 

determination issued by the U.S. 

Department of State; and (iii) the item 

would otherwise be controlled under 

one of these Category 8, 600 series, 

ECCNs because, for example, the item 

was ‘‘specially designed’’ for a military 

use. Items in these .y.99 paragraphs 

would be subject to antiterrorism 

controls. 

Corresponding Amendments 

As discussed in further detail below, 

the July 15 proposed rule stated that one 

reason for control for items classified in 

the 600 series is Regional Stability 

(specifically, RS Column 1). Items 

classified under proposed ECCN 8A609, 

ECCN 8B609, or ECCN 8C609, other 

than ECCN 8A609.y, 8B609.y, or 

8C609.y items, as well as related 

technology and software classified 

under ECCNs 8D609 and 8E609, would 

be controlled for this reason, among 

others. Correspondingly, this proposed 

rule would revise § 742.6 of the EAR to 

apply the RS Column 1 licensing policy 

to commodities classified under ECCN 

8A609, 8B609, 8C609 (except 

paragraphs .y of those ECCNs), and to 

related software and technology 

classified under ECCNs 8D609 and 

8E609. Note that the proposed rule on 

military aircraft and related items that 

BIS published on November 7 would 

amend the RS Column 1 licensing 

policy to impose a general policy of 

denial for ‘‘600 series’’ items if the 

destination is subject to a United States 

arms embargo. 

Relationship to the July 15 Proposed 

Rule 

As referenced above, the purpose of 

the July 15 proposed rule is to establish 

within the EAR the framework for 

controlling on the CCL articles that the 

President determines no longer warrant 

control on the USML. To facilitate that 

goal, the July 15 proposed rule contains 

definitions and concepts that are meant 

to be applied across Categories. 

However, as BIS undertakes 

rulemakings to move specific types of 

articles from the USML to the CCL, if 

and after the President determines that 

such articles no longer warrant control 

under the USML, there may be 

unforeseen issues or complications that 

require BIS to reexamine those 

definitions and concepts. The comment 

period for the July 15 proposed rule 

closed on September 13, 2011. In the 

November 7 proposed rule, BIS 

proposed several changes to those 

definitions and concepts. The comment 

period for the November 7 proposed 

rule closed on December 22, 2011. 

To the extent that this rule’s proposals 

affect any provision in the July 15 

proposed rule or the July 15 proposed 

rule’s provisions affect this proposed 

rule, BIS will consider comments on 

those provisions so long as they are 

within the context of the changes 

proposed in this rule. For example, BIS 

will consider comments on how the 

movement of Category VI items from the 

USML to the CCL affects a definition, 

restriction, or provision that was 

contained in the July 15 proposed rule. 

BIS will also consider comments on the 

impact of a definition of a term in the 

July 15 proposed rule when that term is 

used in this proposed rule. BIS will not 

consider comments of a general nature 

regarding the July 15 proposed rule that 

are submitted in response to this 

rulemaking. 

BIS believes that the following 

provisions of the July 15 proposed rule 

and the November 7 proposed rule on 

aircraft and related items are among 

those that could affect the items covered 

by this proposed rule: 

• De minimis provisions in § 734.4; 

• Restrictions on use of license 

exceptions in §§ 740.2, 740.10, 740.11, 

and 740.20; 

• Change to national security 

licensing policy in § 742.4; 

• Requirement to request 

authorization to use License Exception 

STA (strategic trade authorization) for 

end items in 600 series ECCNs and 

procedures for submitting such requests 

in §§ 740.2, 740.20, 748.8 and Supp. No. 

2 to part 748; 

• Addition of 600 series items to 

Supplement No. 2 to Part 744—List of 

Items Subject to the Military End-Use 

Requirement of § 744.21; and 

• Definitions of terms in § 772.1. 

BIS believes that the following 

provisions of this proposed rule are 

among those that could affect the 

provisions of the July 15 and November 

7 proposed rules: 

• Additional 600 series items 

identified in the RS Column licensing 

policy described in § 742.6. 

Effects of This Proposed Rule 

BIS believes that the principal effect 

of this rule will be to provide greater 

flexibility for exports and reexports to 

NATO member countries and other 

multiple-regime-member countries of 

items the President determines no 

longer warrant control on the United 

States Munitions List. This greater 

flexibility will be in the form of: 

application of the EAR’s de minimis 

threshold principle for items 

constituting less than a de minimis 

amount of controlled U.S.-origin content 

in foreign made items; availability of 

license exceptions, particularly License 

Exceptions RPL (servicing and 

replacement of parts and equipment) 

and STA (strategic trade authorization); 

elimination of the requirements for 

manufacturing license agreements and 

technical assistance agreements in 

connection with exports of technology; 

and a reduction in, or elimination of, 

exporter and manufacturer registration 

requirements and associated registration 


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fees. Some of these specific effects are 

discussed in more detail below. 

De minimis 

Section 734.3 of the EAR provides, 

inter alia, that under certain conditions 

items made outside the United States 

that incorporate items subject to the 

EAR are not subject to the EAR if they 

do not exceed a ‘‘de minimis’’ 

percentage of controlled U.S. origin 

content. Depending on the destination, 

the de minimis percentage can be either 

10 percent or 25 percent. If the July 15 

proposed rule’s amendments at § 734.4 

of the EAR are adopted, the new ECCNs 

8A609, 8B609, 8C609, 8D609 and 8E609 

proposed in this rule would be subject 

to the de minimis provisions set forth in 

the July 15 proposed rule, because they 

would be ‘‘600 series’’ ECCNs. Foreignmade items incorporating items 

controlled under the new ECCNs would 

become eligible for de minimis 

treatment at the 10 percent level (i.e., a 

foreign-made item is not subject to the 

EAR if the value of its U.S.-origin 

controlled content does not exceed 10 

percent of foreign-made item’s value). 

The AECA does not permit the ITAR to 

have a de minimis treatment for these 

USML-listed items, regardless of the 

significance or insignificance of the 

item, meaning that items subject to the 

ITAR remain subject to the ITAR when 

they are incorporated abroad into a 

foreign-made item, regardless of the 

percentage of U.S. origin content in the 

foreign-made item. In addition, foreignmade items that incorporate any items 

that are currently classified under an 

018 ECCN and that are moved to a new 

600 series ECCN would be subject to the 

EAR if those foreign-made items 

contained more than 10 percent U.S.- 

origin controlled content, regardless of 

the destination and regardless of the 

proportion of the U.S.-origin controlled 

content accounted for by the former 018 

ECCN items. 

Based on the July 15 rule’s proposals, 

foreign-made items that contain 

controlled U.S.-origin content classified 

under non-600 series ECCNs, as well as 

600 series ECCNs, would potentially 

have to be evaluated in two stages to 

determine whether they would qualify 

for de minimis treatment. First, the 

value of the 600 series ECCN content 

would have to be calculated. If the value 

of the 600 series ECCN content exceeds 

10 percent of the value of the foreignmade item, the item would not qualify 

for de minimis treatment and would be 

subject to the EAR. However, if the 

value of the 600 series ECCN content 

does not exceed 10 percent of the value 

of the foreign-made item, then the value 

of all of the controlled U.S. origin 

content (including both non-600 series 

and 600 series ECCN content) would 

have to be calculated to determine 

whether the foreign made item’s total 

U.S. origin controlled content exceeds 

the de minimis percentage (either 10 

percent or 25 percent) applicable to the 

country of destination. BIS is reviewing 

comments that the public submitted 

with respect to this proposal and plans 

to publish another proposed rule that 

addresses these comments and other 

related issues. 

Use of License Exceptions 

The July 15 proposed rule would 

impose certain restrictions on the use of 

license exceptions for items that would 

be controlled under the new 600 series 

ECCNs on the CCL. For example, 

proposed § 740.2(a)(12) would make 600 

series items that are destined for a 

country subject to a United States arms 

embargo ineligible for shipment under a 

license exception, except where 

authorized by License Exception GOV 

under § 740.11(b)(2)(ii) of the EAR. In 

addition, the use of License Exception 

GOV for 600 series commodities would 

be limited to situations in which the 

United States Government is the 

consignee and end user or to situations 

in which the consignee or end user is 

the government of a country listed in 

§ 740.20(c)(1). With respect to License 

Exception STA, the July 15 proposed 

rule would (i) limit eligibility for ‘‘end 

items’’ in 600 series ECCNs to those end 

items for which a specific request for 

License Exception STA eligibility (filed 

in conjunction with a license 

application) has been approved and (ii) 

require that the end item be for ultimate 

end use by a foreign government agency 

of a type specified in the July 15 

proposed rule. The July 15 proposed 

rule also would limit exports of 600 

series parts, components, accessories, 

and attachments under License 

Exception STA for ultimate end use by 

the same set of end users and limit the 

shipment of 600 series items under 

License Exception STA to destinations 

listed in § 740.20(c)(1). 

BIS believes that, even with the July 

15 and November 7 proposed 

restrictions on the use of license 

exceptions for 600 series items, the 

restrictions on those items currently on 

the USML would be reduced, 

particularly with respect to exports to 

NATO members and multiple-regime 

member countries, if those items are 

moved from the USML to proposed 

ECCN 8A609. 

Making U.S. Export Controls More 

Consistent with the Wassenaar 

Arrangement Munitions List Controls 

The Administration has stated, since 

the beginning of the Export Control 

Reform Initiative, that the reforms will 

be consistent with the obligations of the 

United States to the multilateral export 

control regimes. Accordingly, the 

Administration will, in this and 

subsequent proposed rules, exercise its 

national discretion to implement, 

clarify, and, to the extent feasible, align 

its controls with those of the regimes. 

For example, the proposed ECCN 8A609 

tracks, to the extent possible, the 

numbering structure and text of WAML 

category 9 pertaining to surface vessels 

of war not subject to the ITAR. It also 

implements in 8A609.x the controls in 

WAML category 16 for forgings, 

castings, and other unfinished products; 

in 8B609.a the controls in WAML 

category 18 for production equipment; 

in 8D609 the applicable controls in 

WAML category 21 for software; and in 

8E609 the applicable controls in WAML 

category 22 for technology. 

Other Effects 

Pursuant to the framework identified 

in the July 15 proposed rule, 

commodities classified under ECCN 

8A609 (other than ECCN 8A609.y), 

along with related test inspection and 

production equipment, materials, 

software, and technology classified 

under ECCN 8B609, 8C609, 8D609 or 

8E609 (except items classified under the 

.y paragraphs of these ECCNs) would be 

subject to the licensing policies that 

apply to items controlled for national 

security reasons, as described in 

§ 742.4(b)(1)—specifically, NS Column 1 

controls. All commodities in ECCN 

8A609 (other than those identified in 

8A609.y, which are controlled for AT 

Column 1 anti-terrorism reasons only 

and may also be subject to the 

prohibitions described in Part 744), 

along with related test, inspection and 

production equipment, materials, 

software and technology classified 

under ECCN 8B609, 8C609, 8D609 or 

8E609 (except items classified under the 

.y paragraphs of these ECCNs), would be 

subject to the regional stability licensing 

policies set forth in § 742.6(a)(1)— 

specifically, RS Column 1. 

The July 15 proposed rule would 

change § 742.4 to apply a general policy 

of denial to 600 series items for 

destinations that are subject to a United 

States arms embargo. That policy would 

apply to all items controlled for national 

security (NS) reasons under this 

proposed rule. The November 7 

proposed rule would expand that 


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80286 Federal Register / Vol. 76, No. 247 / Friday, December 23, 2011 / Proposed Rules 

general policy of denial to include 600 

series items subject to the licensing 

policies that apply to items controlled 

for regional stability reasons, as 

described in § 742.6(b)(1)—specifically, 

RS Column 1. While this change might 

seem redundant for the items affected 

by this proposed rule, it ensures that a 

general denial policy would apply to 

any 600 series items that are controlled 

for missile technology (MT) and 

regional stability (RS) reasons, but not 

for national security (NS) reasons (as 

would be the case for certain items 

affected by the aircraft rule). 

Jurisdictional and Classification Status 

of Items Subject to Previous Commodity 

Jurisdiction Determinations 

The Administration recognizes that 

some items that would fall within the 

scope of the proposed new ECCNs will 

have been subject to commodity 

jurisdiction (CJ) determinations issued 

by the United States Department of 

State. The State Department will have 

either determined that the item was 

subject to the jurisdiction of the ITAR or 

that it was not. (See 22 CFR §§ 120.3 

and 120.4). Under this proposed rule, 

items that the State Department 

determined to be not subject to the ITAR 

and that are not described on the CCL 

would be subject to the AT-only 

controls of the ‘‘.y.99’’ paragraph of a 

600 series ECCN if they would 

otherwise be within the scope of the 

ECCN. Thus, for example, ECCN 

8A609.x would control any part, 

component, accessory, or attachment 

not specifically identified in the USML 

or elsewhere in the ECCN if it was 

‘‘specially designed’’ for a surface vessel 

of war. However, any part, component, 

accessory or attachment, which is 

determined by CJ not to be subject to the 

ITAR and is (as defined) ‘‘specially 

designed’’ for a surface vessel of war, 

would be controlled under 8A609.y.99 

if it is not identified elsewhere on the 

CCL. If the item is controlled, either as 

a matter of law or as the result of a 

subsequent commodity classification 

(‘‘CCATS’’) determination by 

Commerce, under an ECCN that is 

currently on the CCL (e.g., ECCN 

8A992.f), that ECCN would continue to 

apply to the item. This general approach 

will, pending public comment, be 

repeated in subsequent proposed rules 

pertaining to other categories of items. 

If, however, the State Department had 

made a CJ determination that a 

particular item was subject to the 

jurisdiction of ITAR but that item is not 

described on the final, implemented 

version of a revised USML category, a 

new CJ determination would not be 

required unless there is doubt about the 

application of the new USML category 

to the item. (See 22 CFR 120.4). Thus, 

unless there are doubts about the 

jurisdictional status of a particular item, 

exporters and reexporters would be 

entitled to rely on the revised USML 

categories when making jurisdictional 

determinations, notwithstanding past CJ 

determinations that, under the previous 

version of the USML, the item was ITAR 

controlled. 

Finally, if the State Department had 

made a CJ determination that a 

particular item was subject to the 

jurisdiction of the ITAR and that item 

remains in the revised USML, the item 

would remain subject to the jurisdiction 

of the ITAR. 

Section-by-Section Description of the 

Proposed Changes 

• Section 742.6—ECCNs 8A609, 

8B609, 8C609, 8D609 and 8E609 are 

added to § 742.6(a)(1) to impose an RS 

Column 1 license requirement and 

licensing policy, including a general 

policy of denial in Section 742.6(b)(1) 

for applications to export or reexport 

‘‘600 series’’ items to destinations that 

are subject to a United States arms 

embargo. 

• Supplement No. 1 to part 774— 

Adds ECCNs 8A609, 8B609, 8C609, 

8D609 and 8E609. 

Request for Comments 

BIS seeks comments on this proposed 

rule. BIS will consider all comments 

received on or before February 6, 2012. 

All comments (including any personally 

identifying information or information 

for which a claim of confidentially is 

asserted either in those comments or 

their transmittal emails) will be made 

available for public inspection and 

copying. Parties who wish to comment 

anonymously may do so by submitting 

their comments via Regulations.gov, 

leaving the fields that would identify 

the commenter blank and including no 

identifying information in the comment 

itself. 

Although the Export Administration 

Act expired on August 20, 2001, the 

President, through Executive Order 

13222 of August 17, 2001, 3 CFR, 2001 

Comp., p. 783 (2002), as extended by the 

Notice of August 12, 2011, 76 FR 50661 

(August 16, 2011), has continued the 

Export Administration Regulations in 

effect under the International 

Emergency Economic Powers Act. BIS 

continues to carry out the provisions of 

the Act, as appropriate and to the extent 

permitted by law, pursuant to Executive 

Order 13222. 

Regulatory Requirements 

1. Executive Orders 13563 and 12866 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distribute impacts, and equity). 

Executive Order 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This rule has been 

designated a ‘‘significant regulatory 

action,’’ although not economically 

significant, under section 3(f) of 

Executive Order 12866. Accordingly, 

the rule has been reviewed by the Office 

of Management and Budget (OMB). 

2. Notwithstanding any other 

provision of law, no person is required 

to respond to, nor is subject to a penalty 

for failure to comply with, a collection 

of information, subject to the 

requirements of the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.) (PRA), unless that collection of 

information displays a currently valid 

OMB control number. This proposed 

rule would affect two approved 

collections: Simplified Network 

Application Processing + System 

(control number 0694–0088), which 

includes, among other things, license 

applications, and License Exceptions 

and Exclusions (0694–0137). 

As stated in the proposed rules 

published at 76 FR 41958 (July 15, 

2011), 76 FR 68675 (November 7, 2011), 

76 FR 76072 (December 6, 2011), and 76 

FR 76085 (December 6, 2011) and in the 

proposed rule on submersible vessels, 

oceanographic and associated 

equipment that is being published in 

conjunction with this proposed rule on 

December 23, 2011, BIS believes that the 

combined effect of all rules to be 

published adding items to EAR that 

would be removed from the ITAR as 

part of the administration’s Export 

Control Reform Initiative would 

increase the number of license 

applications to be submitted by 

approximately 16,000 annually, 

resulting in an increase in burden hours 

of 5,067 (16,000 transactions at 17 

minutes each) under control number 

0694–0088. 

Some items formerly on the USML 

would become eligible for License 

Exception STA under this rule. Other 

such items may become eligible for 

License Exception STA upon approval 

of a request submitted in conjunction 

with a license application. As stated in 

the July 15 and November 7 proposed 


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rules published by BIS, in the two 

proposed rules that BIS published on 

December 6, and in the proposed rule 

on submersible vessels, oceanographic 

and associated equipment that BIS is 

publishing in conjunction with this 

proposed rule on December 23, 2011, 

BIS believes that the increased use of 

License Exception STA resulting from 

the combined effect of all rules to be 

published adding items to EAR that 

would be removed from the ITAR as 

part of the administration’s Export 

Control Reform Initiative would 

increase the burden associated with 

control number 0694–0137 by about 

23,858 hours (20,450 transactions @ 1 

hour and 10 minutes each). 

BIS expects that this increase in 

burden would be more than offset by a 

reduction in burden hours associated 

with approved collections related to the 

ITAR. This proposed rule addresses 

controls on surface vessels of war and 

related parts, components, production 

equipment, materials, software, and 

technology. The largest impact of the 

proposed rule would be with respect to 

exporters of parts and components 

because, under the proposed rule, most 

U.S. and foreign military vessels of war 

currently in service would continue to 

be subject to the ITAR. Because, with 

few exceptions, the ITAR allows 

exemptions from license requirements 

only for exports to Canada, most exports 

to integrators for U.S government 

equipment and most exports of routine 

maintenance parts and components for 

our NATO and other close allies require 

State Department authorization. In 

addition, the exports necessary to 

produce parts and components for 

defense articles in the inventories of the 

United States and its NATO and other 

close allies require State Department 

authorizations. Under the EAR, as 

proposed, a small number of low level 

parts would not require a license to 

most destinations. Most other parts, 

components, accessories, and 

attachments would become eligible for 

export to NATO and other close allies 

under License Exception STA. Use of 

License Exception STA imposes a 

paperwork and compliance burden 

because, for example, exporters must 

furnish information about the item 

being exported to the consignee and 

obtain from the consignee an 

acknowledgement and commitment to 

comply with the EAR. It is, however, the 

Administration’s understanding that 

complying with the requirements of 

STA is likely to be less burdensome 

than applying for licenses. For example, 

under License Exception STA, a single 

consignee statement can apply to an 

unlimited number of products, need not 

have an expiration date and need not be 

submitted to the government in advance 

for approval. Suppliers with regular 

customers can tailor a single statement 

and assurance to match their business 

relationship rather than applying 

repeatedly for licenses with every 

purchase order to supply allied and, in 

some cases, U.S forces with routine 

replacement parts and components. 

Even in situations in which a license 

would be required under the EAR, the 

burden likely will be reduced compared 

to the license requirement of the ITAR. 

In particular, license applications for 

exports of technology controlled by 

ECCN 8E609 are likely to be less 

complex and burdensome than the 

authorizations required to export ITARcontrolled technology, i.e., 

Manufacturing License Agreements and 

Technical Assistance Agreements. 

3. This rule does not contain policies 

with Federalism implications as that 

term is defined under E.O. 13132. 

4. The Regulatory Flexibility Act 

(RFA), as amended by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA), 5 U.S.C. 

601 et seq., generally requires an agency 

to prepare a regulatory flexibility 

analysis of any rule subject to the notice 

and comment rulemaking requirements 

under the Administrative Procedure Act 

(5 U.S.C. 553) or any other statute, 

unless the agency certifies that the rule 

will not have a significant economic 

impact on a substantial number of small 

entities. Under section 605(b) of the 

RFA, however, if the head of an agency 

certifies that a rule will not have a 

significant impact on a substantial 

number of small entities, the statute 

does not require the agency to prepare 

a regulatory flexibility analysis. 

Pursuant to section 605(b), the Chief 

Counsel for Regulation, Department of 

Commerce, certifiedto the Chief Counsel 

for Advocacy, Small Business 

Administration that this proposed rule, 

if promulgated, will not have a 

significant impact on a substantial 

number of small entities for the reasons 

explained below. Consequently, BIS has 

not prepared a regulatory flexibility 

analysis. A summary of the factual basis 

for the certification is provided below. 

Number of Small Entities 

The Bureau of Industry and Security 

(BIS) does not collect data on the size 

of entities that apply for and are issued 

export licenses. Although BIS is unable 

to estimate the exact number of small 

entities that would be affected by this 

rule, it acknowledges that this rule 

would affect some unknown number. 

Economic Impact 

This proposed rule is part of the 

Administration’s Export Control Reform 

Initiative. Under that initiative, the 

United States Munitions List (22 CFR 

part 121) (USML) would be revised to be 

a ‘‘positive’’ list, i.e., a list that does not 

use generic, catch-all controls on any 

part, component, accessory, attachment, 

or end item that was in any way 

specifically modified for a defense 

article, regardless of the article’s 

military or intelligence significance or 

non-military applications. At the same 

time, articles that are determined to no 

longer warrant control on the USML 

would become controlled on the 

Commerce Control List (CCL). Such 

items, along with certain military items 

that currently are on the CCL, will be 

identified in specific Export Control 

Classification Numbers (ECCNs) known 

as the ‘‘600 series’’ ECCNs. In addition, 

some items currently on the Commerce 

Control List would move from existing 

ECCNs to the new 600 series ECCNs. In 

practice, the greatest impact of this rule 

on small entities would likely be 

reduced administrative costs and 

reduced delay for exports of items that 

are now on the USML but would 

become subject to the EAR. This rule 

focuses on Category VI articles, which 

are surface vessels of war and related 

parts, components, production 

equipment, software, and technology. 

Most operational military vessels of war 

currently in active inventory would 

remain on the USML. However, parts 

and components, which are more likely 

to be produced by small businesses than 

are complete military vessels of war, 

would in many cases become subject to 

the EAR. In addition, officials of the 

Department of State have informed BIS 

that license applications for such parts 

and components are a high percentage 

of the license applications for USML 

articles review by that department. 

Changing the jurisdictional status of 

Category VI items would reduce the 

burden on small entities (and other 

entities as well) through: (i) Elimination 

of some license requirements, (ii) greater 

availability of license exceptions, (iii) 

simpler license application procedures, 

and (iv) reduced, or eliminated, 

registration fees. 

In addition, parts and components 

controlled under the ITAR remain under 

ITAR control when incorporated into 

foreign-made items, regardless of the 

significance or insignificance of the 

item. This discourages foreign buyers 

from incorporating such U.S. content. 

The availability of de minimis treatment 

under the EAR may reduce the incentive 

for foreign manufacturers to refrain from 


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purchasing U.S.-origin parts and 

components. 

Parts and components identified in 

ECCN 8A609.y would be designated 

immediately as parts and components 

that, even if specially designed for a 

military use, have little or no military 

significance. These parts and 

components, which under the ITAR 

require a license to nearly all 

destinations, would, under the EAR, 

require a license to only five 

destinations and, if destined for a 

military end use, to the People’s 

Republic of China. 

Many exports and reexports of the 

Category VI articles that would be 

placed on the CCL by this rule, 

particularly parts and components, 

would become eligible for license 

exceptions that apply to shipments to 

United States Government agencies, 

shipments valued at less than $1,500, 

parts and components being exported 

for use as replacement parts, temporary 

exports, and License Exception Strategic 

Trade Authorization (STA), reducing 

the number of licenses that exporters of 

these items would need. License 

Exceptions under the EAR would allow 

suppliers to send routine replacement 

parts and low level parts to NATO and 

other close allies and export control 

regime partners for use by those 

governments and for use by contractors 

building equipment for those 

governments or for the United States 

government without having to obtain 

export licenses. Under License 

Exception STA, the exporter would 

need to furnish information about the 

item being exported to the consignee 

and obtain a statement from the 

consignee that, among other things, 

would commit the consignee to comply 

with the EAR and other applicable U.S. 

laws. Because such statements and 

obligations can apply to an unlimited 

number of transactions and have no 

expiration date, they would impose a 

net reduction in burden on transactions 

that the government routinely approves 

through the license application process 

that the License Exception STA 

statements would replace. 

Even for exports and reexports for 

which a license would be required, the 

process would be simpler and less 

costly under the EAR. When a USML 

Category VI article is moved to the CCL, 

the number of destinations for which a 

license is required would remain 

unchanged. However, the burden on the 

license applicant would decrease 

because the licensing procedure for CCL 

items is simpler and more flexible than 

the license procedure for UMSL articles. 

Under the USML licensing procedure, 

an applicant must include a purchase 

order or contract with its application. 

There is no such requirement under the 

CCL licensing procedure. This 

difference gives the CCL applicant at 

least two advantages. First, the 

applicant has a way of determining 

whether the U.S. government will 

authorize the transaction before it enters 

into potentially lengthy, complex and 

expensive sales presentations or 

contract negotiations. Under the USML 

procedure, the applicant must caveat all 

sales presentations with a reference to 

the need for government approval and is 

more likely to engage in substantial 

effort and expense only to find that the 

government will reject the application. 

Second, a CCL license applicant need 

not limit its application to the quantity 

or value of one purchase order or 

contract. It may apply for a license to 

cover all of its expected exports or 

reexports to a specified consignee over 

the life of a license (normally two years, 

but may be longer if circumstances 

warrant a longer period), thus reducing 

the total number of licenses for which 

the applicant must apply. 

In addition, many applicants 

exporting or reexporting items that this 

rule would transfer from the USML to 

the CCL would realize cost savings 

through the elimination of some or all 

registration fees currently assessed 

under the USML’s licensing procedure. 

Currently, USML applicants must pay to 

use the USML licensing procedure even 

if they never actually are authorized to 

export. Registration fees for 

manufacturers and exporters of articles 

on the USML start at $2,500 per year, 

increase to $2,750 for organizations 

applying for one to ten licenses per year 

and further increases to $2,750 plus 

$250 per license application (subject to 

a maximum of three percent of total 

application value) for those who need to 

apply for more than ten licenses per 

year. There are no registration or 

application processing fees for 

applications to export items listed on 

the CCL. Once the Category VI items 

that are the subject to this rulemaking 

are moved from the USML to the CCL, 

entities currently applying for licenses 

from the Department of State would find 

their registration fees reduced if the 

number of USML licenses those entities 

need declines. If an entity’s entire 

product line is moved to the CCL, its 

ITAR registration and registration fee 

requirement would be eliminated 

entirely. 

De minimis treatment under the EAR 

would become available for all items 

that this rule would transfer from the 

USML to the CCL. Items subject to the 

ITAR remain subject to the ITAR when 

they are incorporated abroad into a 

foreign-made product regardless of the 

percentage of U.S content in that foreign 

made product. Foreign-made products 

incorporating items that this rule would 

move to the CCL would be subject to the 

EAR only if their total controlled U.S.- 

origin content exceeds 10 percent. 

Because including small amounts of 

U.S.-origin content would not subject 

foreign-made products to the EAR, 

foreign manufacturers would have less 

incentive to refrain from purchasing 

such U.S.-origin parts and components, 

a development that potentially would 

mean greater sales for U.S. suppliers, 

including small entities. 

For items currently on the CCL that 

would be moved from existing ECCNs to 

the new 600 series, license exception 

availability would be narrowed 

somewhat and the applicable de 

minimis threshold for foreign-made 

products containing those items would 

in some cases be reduced from 25 

percent to 10 percent. However, BIS 

believes that increased burden imposed 

by those actions will be offset 

substantially by the reduction in burden 

attributable to the moving of items from 

the USML to CCL and the compliance 

benefits associated with the 

consolidation of all WAML items 

subject to the EAR in one series of 

ECCNs. 

Conclusion 

BIS is unable to determine the precise 

number of small entities that would be 

affected by this rule. Based on the facts 

and conclusions set forth above, BIS 

believes that any burdens imposed by 

this rule would be offset by a reduction 

in the number of items that would 

require a license, increased 

opportunities for use of license 

exceptions for exports to certain 

countries, simpler export license 

applications, reduced or eliminated 

registration fees and application of a de 

minimis threshold for foreign-made 

items incorporating U.S.-origin parts 

and components, which would reduce 

the incentive for foreign buyers to 

design out or avoid U.S.-origin content. 

For these reasons, the Chief Counsel for 

Regulation of the Department of 

Commerce certified to the Chief Counsel 

for Advocacy of the Small Business 

Administration that this rule, if adopted 

in final form, would not have a 

significant economic impact on a 

substantial number of small entities. 

List of Subjects 

15 CFR Part 742 

Exports, Terrorism. 


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Federal Register / Vol. 76, No. 247 / Friday, December 23, 2011 / Proposed Rules 80289 

15 CFR Part 774 

Exports, Reporting and recordkeeping 

requirements. 

For the reasons stated in the 

preamble, parts 742 and 774 of the 

Export Administration Regulations (15 

CFR parts 730–774) are proposed to be 

amended as follows: 

PART 742—[AMENDED] 

1. The authority citation for 15 CFR 

part 742 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; 22 U.S.C. 7201 et seq.; 22 

U.S.C. 7210; Sec. 1503, Pub. L. 108–11, 117 

Stat. 559; 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. 

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

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

Comp., p. 783; Presidential Determination 

2003–23 of May 7, 2003, 68 FR 26459, May 

16, 2003; Notice of August 12, 2011, 76 FR 

50661 (August 16, 2011); Notice of November 

9, 2011, 76 FR 70319 (November 10, 2011). 

2. Section 742.6 is amended by 

revising paragraph (a)(1) to read as 

follows: 

§ 742.6 Regional stability. 

(a) * * * 

(1) RS Column 1 License 

Requirements in General. As indicated 

in the CCL and in RS column 1 of the 

Commerce Country Chart (see 

Supplement No. 1 to part 738 of the 

EAR), a license is required to all 

destinations, except Canada, for items 

described on the CCL under ECCNs 

0A521; 0A606 (except 0A606.b and .y); 

0B521; 0B606 (except 0B606.y); 0C521; 

0C606 (except 0C606.y); 0D521; 0D606 

(except 0D606.y); 0E521; 0E606 (except 

0E606.y); 6A002.a.1, a.2, a.3, .c, or .e; 

6A003.b.3, and b.4.a; 6A008.j.1; 

6A998.b; 6D001 (only ‘‘software’’ for the 

‘‘development’’ or ‘‘production’’ of 

items in 6A002.a.1, a.2, a.3, .c; 

6A003.b.3 and .b.4; or 6A008.j.1); 6D002 

(only ‘‘software’’ for the ‘‘use’’ of items 

in 6A002.a.1, a.2, a.3, .c; 6A003.b.3 and 

.b.4; or 6A008.j.1); 6D003.c; 6D991 (only 

‘‘software’’ for the ‘‘development,’’ 

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

classified under 6A002.e or 6A998.b); 

6E001 (only ‘‘technology’’ for 

‘‘development’’ of items in 6A002.a.1, 

a.2, a.3 (except 6A002.a.3.d.2.a and 

6A002.a.3.e for lead selenide focal plane 

arrays), and .c or .e, 6A003.b.3 and b.4, 

or 6A008.j.1); 6E002 (only ‘‘technology’’ 

for ‘‘production’’ of items in 6A002.a.1, 

a.2, a.3, .c, or .e, 6A003.b.3 or b.4, or 

6A008.j.1); 6E991 (only ‘‘technology’’ 

for the ‘‘development,’’ ‘‘production,’’ or 

‘‘use’’ of equipment classified under 

6A998.b); 6D994; 7A994 (only QRS11– 

00100–100/101 and QRS11–0050–443/ 

569 Micromachined Angular Rate 

Sensors); 7D001 (only ‘‘software’’ for 

‘‘development’’ or ‘‘production’’ of 

items in 7A001, 7A002, or 7A003); 

7E001 (only ‘‘technology’’ for the 

‘‘development’’ of inertial navigation 

systems, inertial equipment, and 

specially designed components therefor 

for civil aircraft); 7E002 (only 

‘‘technology’’ for the ‘‘production’’ of 

inertial navigation systems, inertial 

equipment, and specially designed 

components therefor for civil aircraft); 

7E101 (only ‘‘technology’’ for the ‘‘use’’ 

of inertial navigation systems, inertial 

equipment, and specially designed 

components for civil aircraft); 8A609 

(except 8A609.y); 8B609 (except 

8B609.y); 8C609 (except 8C609.y); 

8D609 (except software for the 

‘‘development,’’ ‘‘production,’’ 

operation, or maintenance of 

commodities controlled by 8A609.y, 

8B609.y, or 8C609.y); 8E609 (except 

‘‘technology’’ for the ‘‘development,’’ 

‘‘production,’’ operation, installation, 

maintenance, repair, or overhaul of 

commodities controlled by 8A609.y, 

8B609.y, or 8C609.y); 9A610 (except 

9A610.y); 9A619 (except 9A619.y); 

9B610 (except 9B610.y); 9B619 (except 

9B619.y); 9C610 (except 9C610.y); 

9C619 (except 9C619.y); 9D610 (except 

software for the ‘‘development,’’ 

‘‘production,’’ operation, installation, 

maintenance, repair, or overhaul of 

commodities controlled by 9A610.y, 

9B610.y, or 9C610.y); 9D619 (except 

software for the ‘‘development,’’ 

‘‘production,’’ operation, or 

maintenance of commodities controlled 

by 9A619.y, 9B619.y, or 9C619.y); 

9E610 (except ‘‘technology’’ for the 

‘‘development,’’ ‘‘production,’’ 

operation, installation, maintenance, 

repair, or overhaul of commodities 

controlled by ECCN 9A610.y, 9B610.y, 

or 9C610.y); and 9E619 (except 

‘‘technology’’ for the ‘‘development,’’ 

‘‘production’’ operation, installation, 

maintenance, repair, or overhaul of 

commodities controlled by ECCN 

9A619.y, 9B619.y, or 9C619.y). 

* * * * * 

PART 774—[AMENDED] 

3. 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); 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; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22 

U.S.C. 7201 et seq.; 22 U.S.C. 7210; 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 12, 2011, 76 

FR 50661 (August 16, 2011). 

4. In Supplement No. 1 to part 774 

(the Commerce Control List), Category 

8—Marine, add a new ECCN 8A609 

between ECCNs 8A018 and 8A992 to 

read as follows: 

Supplement No. 1 to Part 774—The 

Commerce Control List 

* * * * * 

8A609 Surface vessels of war and 

related commodities. 

License Requirements 

Reason for Control: NS, RS, AT. 

Control(s) Country chart 

NS applies to entire 

entry except 

8A609.y.

NS Column 1. 

RS applies to entire 

entry except 

8A609.y.

RS Column 1. 

AT applies to entire 

entry.

AT Column 1. 

License Exceptions 

LVS: $1,500. 

GBS: N/A. 

CIV: N/A. 

STA: Paragraph (c)(2) of License 

Exception STA (§ 740.20(c)(2)) of the 

EAR may not be used for any item in 

8A609. Paragraph (c)(1) of License 

Exception STA (§ 740.20(c)(1)) may not 

be used for any ‘‘end item’’ in 8A609, 

unless determined by BIS to be eligible 

for License Exception STA in 

accordance with § 740.20(g) (License 

Exception STA eligibility requests for 

‘‘600 series’’ end items). See § 740.20(g) 

for the procedures to follow if you wish 

to request new STA eligibility for ‘‘end 

items’’ under this ECCN 8A609 as part 

of an export, reexport, or transfer (incountry) license application. ‘‘End 

items’’ under this entry that have 

already been determined to be eligible 

for License Exception STA are listed in 

Supplement No. 4 to part 774 and on 

the BIS Web site at www.bis.doc.gov. 

Paragraph (c)(1) of License Exception 

STA (§ 740.20(c)(1)) may be used for 

items in 8A609.x without the need for 

a determination described in 

§ 740.20(g). 

List of Items Controlled 

Unit: Items in number; parts, 

components, accessories and 

attachments in $ value. 

Related Controls: (1) Surface vessels 

of war and special naval equipment, and 

technical data (including software), and 

services directly related thereto, 

described in 22 CFR part 121, Category 

VI, Surface Vessels of War and Special 

Naval Equipment are subject to the 


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80290 Federal Register / Vol. 76, No. 247 / Friday, December 23, 2011 / Proposed Rules 

jurisdiction of the International Traffic 

in Arms Regulations. (2) See ECCN 

0A919 for foreign-made ‘‘military 

commodities’’ that incorporate more 

than 10% U.S.-origin ‘‘600 series’’ 

items. (3) For controls on diesel engines 

and electric motors for surface vessels of 

war subject to the EAR, see ECCN 

8A992.g. (4) For controls on military gas 

turbine engines and related items for 

vessels of war, see ECCN 9A619 (as 

published on December 6, 2011, at 76 

FR 76072, in a separate proposed rule 

that addresses gas turbine engines for 

military vehicles, vessels of war, and 

aircraft). 

Related Definitions: N/A. 

Items: 

a. Surface Vessels of war ‘‘specially 

designed’’ for a military use and not 

enumerated in the USML. 

Note: 8A609.a includes: (i) underway 

replenishment ships, (ii) surface vessel and 

submarine tender and repair ships, (iii) nonsubmersible submarine rescue ships, (iv) 

other auxiliaries (e.g., AGDS, AGF, AGM, 

AGOR, AGOS, AH, AP, ARL, AVB, AVM, 

and AVT), (v) amphibious warfare craft 

except those that are armed; or (vi) 

unarmored, and unarmed coastal, patrol, 

roadstead, and Coast Guard and other patrol 

craft with mounts or hard points for firearms 

of .50 caliber or less. 

b. through w. [RESERVED] 

x. ‘‘Parts,’’ ‘‘components,’’ 

‘‘accessories and attachments’’ that are 

‘‘specially designed’’ for a commodity 

enumerated in ECCN 8A609 or a 

defense article enumerated in USML 

Category VI and not specified elsewhere 

in the CCL or the USML. 

Note 1: Forgings, castings, and other 

unfinished products, such as extrusions and 

machined bodies, that have reached a stage 

in manufacturing where they are clearly 

identifiable by material composition, 

geometry, or function as commodities 

controlled by ECCN 8A609.x are controlled 

by ECCN 8A609.x. 

Note 2: ‘‘Parts,’’ ‘‘components,’’ 

‘‘accessories and attachments’’ specified in 

USML subcategory VI(g) are subject to the 

controls of that paragraph. ‘‘Parts,’’ 

‘‘components,’’ ‘‘accessories and 

attachments’’ specified in ECCN 8A609.y are 

subject to the controls of that paragraph. 

y. Specific ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories and attachments’’ 

‘‘specially designed’’ for a commodity 

subject to control in this ECCN or for a 

defense article in USML Category VI 

and not elsewhere specified in the 

USML or the CCL, as follows: 

y.1. Ship service hydraulic and 

pneumatic systems; 

y.2. Internal communications systems; 

y.3. Filters and filter assemblies for 

hydraulic, oil and fuel systems; 

y.4. Galleys and related equipment; 

y.5. Hydraulic and fuel hoses, straight 

and unbent lines, fittings, clips, 

couplings, and brackets; 

y.6. Lavatories and sanitary systems; 

y.7. Magnetic compass, magnetic 

azimuth detector; 

y.8. Medical facilities and related 

equipment; 

y.9. Potable water storage systems; 

y.10. Filtered and unfiltered panel 

knobs, indicators, switches, buttons, 

and dials; 

y.11. Emergency lighting; 

y.12. Analog gauges and indicators; 

y.13. Audio selector panels. 

y.14. to y.98 [RESERVED] 

y.99. Commodities not identified on 

the CCL that (i) have been determined, 

in an applicable commodity jurisdiction 

determination issued by the U.S. 

Department of State, to be subject to the 

EAR and (ii) would otherwise be 

controlled elsewhere in ECCN 8A609. 

5. In Supplement No. 1 to part 774 

(the Commerce Control List), Category 

8—Marine, add a new ECCN 8B609 

immediately following ECCN 8B001 to 

read as follows: 

8B609 Test, inspection, and 

production ‘‘equipment’’ and 

related commodities ‘‘specially 

designed’’ for the ‘‘development’’ or 

‘‘production’’ of commodities 

enumerated in ECCN 8A609 or 

USML Category VI, as follows. 

License Requirements 

Reason for Control: NS, RS, AT. 

Control(s) Country chart 

NS applies to entire 

entry except 

8B609.y.

NS Column 1. 

RS applies to entire 

entry except 

8B609.y.

RS Column 1. 

AT applies to entire 

entry.

AT Column 1. 

License Exceptions 

LVS: $1,500. 

GBS: N/A. 

CIV: N/A. 

STA: Paragraph (c)(2) of License 

Exception STA (§ 740.20(c)(2)) of the 

EAR may not be used for any item in 

8B609. 

List of Items Controlled 

Unit: N/A. 

Related Controls: N/A. 

Related Definitions: N/A. 

Items: 

a. Test, inspection, and production 

‘‘equipment’’ ‘‘specially designed’’ for 

the ‘‘production’’ or ‘‘development’’ of 

commodities enumerated in ECCN 

8A609 (except for 8A609.y) or in USML 

Category VI, and ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories and 

attachments’’ ‘‘specially designed’’ 

therefor. 

b. through x. [RESERVED] 

y. Specific test, inspection, and 

production ‘‘equipment’’ ‘‘specially 

designed’’ for the ‘‘production’’ or 

‘‘development’’ of commodities 

enumerated in ECCN 8A609 (except for 

8A609.y) or USML Category VI and 

‘‘parts,’’ ‘‘components,’’ ‘‘accessories 

and attachments’’ ‘‘specially designed’’ 

therefor, as follows: 

y.1. through y.98 [RESERVED] 

y.99. Commodities not identified on 

the CCL that (i) have been determined, 

in an applicable commodity jurisdiction 

determination issued by the U.S. 

Department of State, to be subject to the 

EAR and (ii) would otherwise be 

controlled elsewhere in ECCN 8B609. 

6. In Supplement No. 1 to part 774 

(the Commerce Control List), Category 

8—Marine, add a new ECCN 8C609 

immediately following ECCN 8C001 to 

read as follows: 

8C609 Materials ‘‘specially designed’’ 

for the ‘‘development’’ or 

‘‘production’’ of commodities 

controlled by 8A609 not elsewhere 

specified in the CCL or in the 

USML. 

License Requirements 

Reason for Control: NS, RS, AT. 

Control(s) Country chart 

NS applies to entire 

entry except 

8C609.y.

NS Column 1. 

RS applies to entire 

entry except 

8C609.y.

RS Column 1. 

AT applies to entire 

entry.

AT Column 1. 

License Exceptions 

LVS: $1,500. 

GBS: N/A. 

CIV: N/A. 

STA: Paragraph (c)(2) of License 

Exception STA (§ 740.20(c)(2)) of the 

EAR may not be used for any item in 

8C609. 

List of Items Controlled 

Unit: N/A. 

Related Controls: (1) See USML 

Categories VI and XIII(f) for controls on 

materials specially designed for vessels 

of war enumerated in USML Category 

VI. (2) See ECCN 0A919 for foreign 

made ‘‘military commodities’’ that 

incorporate more than 10% U.S.-origin 

‘‘600 series’’ items. 

Related Definitions: N/A. 

Items: 


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Federal Register / Vol. 76, No. 247 / Friday, December 23, 2011 / Proposed Rules 80291 

a. Materials ‘‘specially designed’’ for 

commodities enumerated in ECCN 

8A609 (except for 8A609.y) not 

elsewhere specified in the USML or the 

CCL. 

Note 1: Materials enumerated elsewhere in 

the CCL, such as in a CCL Category 1 ECCN, 

are controlled pursuant to the controls of the 

applicable ECCN. 

b. to .x. [RESERVED] 

y. Specific materials ‘‘specially 

designed’’ for the ‘‘development’’ or 

‘‘production’’ of commodities 

enumerated in ECCN 8A609 (except for 

8A609.y), and ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories and attachments’’ 

‘‘specially designed’’ therefor, as 

follows: 

y.1. through y.98 [RESERVED] 

y.99. Materials not identified on the 

CCL that (i) have been determined, in an 

applicable commodity jurisdiction 

determination issued by the U.S. 

Department of State, to be subject to the 

EAR and (ii) would otherwise be 

controlled elsewhere in ECCN 8C609. 

7. In Supplement No. 1 to part 774 

(the Commerce Control List), Category 

8—Marine, add a new ECCN 8D609 

between ECCN 8D002 and 8D992 to 

read as follows: 

8D609 Software ‘‘specially designed’’ 

for the ‘‘development,’’ 

‘‘production,’’ operation or 

maintenance of surface vessels of 

war and related commodities 

controlled by 8A609, equipment 

controlled by 8B609, or materials 

controlled by 8C609. 

License Requirements 

Reason for Control: NS, RS, AT. 

Control(s) Country chart 

NS applies to entire 

entry except 

8D609.y.

NS Column 1. 

RS applies to entire 

entry except 

8D609.y.

RS Column 1. 

AT applies to entire 

entry.

AT Column 1. 

License Exceptions 

CIV: N/A. 

TSR: N/A. 

STA: Paragraph (c)(2) of License 

Exception STA (§ 740.20(c)(2)) of the 

EAR may not be used for any software 

in 8D609. 

List of Items Controlled 

Unit: $ value. 

Related Controls: (1) Software directly 

related to articles enumerated in USML 

Category VI is controlled under USML 

Category VI(g). (2) See ECCN 0A919 for 

foreign made ‘‘military commodities’’ 

that incorporate more than 10% U.S.- 

origin ‘‘600 series’’ items. 

Related Definitions: N/A. 

Items: 

a. ‘‘Software’’ ‘‘specially designed’’ for 

the ‘‘development,’’ ‘‘production,’’ 

operation, or maintenance of 

commodities controlled by ECCN 

8A609, ECCN 8B609, or ECCN 8C609 

(except for ECCN 8A609.y, 8B609.y, or 

8C609.y). 

b. to x. [RESERVED] 

y. Specific ‘‘software’’ ‘‘specially 

designed’’ for the ‘‘development,’’ 

‘‘production,’’ operation, or 

maintenance of commodities 

enumerated in ECCN 8A609.y, 8B609.y, 

or 8C609.y, as follows: 

y.1. through y.98 [RESERVED] 

y.99. Software not identified on the 

CCL that (i) has been determined, in an 

applicable commodity jurisdiction 

determination issued by the U.S. 

Department of State, to be subject to the 

EAR and (ii) would otherwise be 

controlled elsewhere in ECCN 8D609. 

8. In Supplement No. 1 to part 774 

(the Commerce Control List), Category 

8—Marine, add a new ECCN 8E609 

between ECCN 8E002 and 8E992 to read 

as follows: 

8E609 ‘‘Technology’’ ‘‘required’’ for 

the ‘‘development,’’ ‘‘production,’’ 

operation, installation, 

maintenance, repair, or overhaul of 

surface vessels of war and related 

commodities controlled by 8A609, 

equipment controlled by 8B609, 

materials controlled by 8C609, or 

software controlled by 8D609. 

License Requirements 

Reason for Control: NS, RS, AT. 

Control(s) Country chart 

NS applies to entire 

entry except 

8E609.y.

NS Column 1. 

RS applies to entire 

entry except 

8E609.y.

RS Column 1. 

AT applies to entire 

entry.

AT Column 1. 

License Exceptions 

CIV: N/A. 

TSR: N/A. 

STA: Paragraph (c)(2) of License 

Exception STA (§ 740.20(c)(2)) of the 

EAR may not be used for any technology 

in 8E609. 

List of Items Controlled 

Unit: N/A. 

Related Controls: (1) Technical data 

directly related to articles enumerated 

in USML Category VI are controlled 

under USML Category VI(g). (2) See 

ECCN 0A919 for foreign made ‘‘military 

commodities’’ that incorporate more 

than 10% U.S.-origin ‘‘600 series’’ 

items. 

Related Definitions: N/A. 

Items: 

a. ‘‘Technology’’ ‘‘required’’ for the 

‘‘development,’’ ‘‘production,’’ 

operation, installation, maintenance, 

repair, or overhaul of commodities 

controlled by ECCN 8A609, 8B609, or 

8C609, or ‘‘software’’ controlled by 

ECCN 8D609, except for ECCN 8A609.y, 

8B609.y, 8C609.y, or 8D609.y. 

b. through x. [RESERVED] 

y. Specific ‘‘technology’’ ‘‘required’’ 

for the ‘‘development,’’ ‘‘production,’’ 

operation, installation, maintenance, 

repair, or overhaul of commodities 

controlled by ECCN 8A609.y, 8B609.y 

or 8C609.y, or ‘‘software’’ controlled by 

ECCN 8D609.y, as follows: 

y.1. through y.98 [RESERVED] 

y.99. ‘‘Technology’’ not identified on 

the CCL that (i) has been determined, in 

an applicable commodity jurisdiction 

determination issued by the U.S. 

Department of State, to be subject to the 

EAR and (ii) would otherwise be 

controlled elsewhere in ECCN 8E609. 

Dated: December 16, 2011. 

Kevin J. Wolf, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2011–32867 Filed 12–22–11; 8:45 am] 

BILLING CODE 3510–33–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Parts 742 and 774 

[Docket No. 110928603–1605–02] 

RIN 0694–AF39 

Revisions to the Export Administration 

Regulations (EAR): Control of 

Submersible Vessels, Oceanographic 

Equipment and Related Articles That 

the President Determines No Longer 

Warrant Control Under the United 

States Munitions List (USML) 

AGENCY: Bureau of Industry and 

Security, Department of Commerce. 

ACTION: Proposed rule. 

SUMMARY: The Bureau of Industry and 

Security (BIS) publishes this proposed 

rule that describes how submersible 

vessels, oceanographic equipment and 

related articles that the President 

determines no longer warrant control 

under Category VI (Vessels of War and 

Special Naval Equipment) or Category 

XX (Submersible Vessels, 

Oceanographic and Associated 


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