Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations 42565

§ 30.58 Exemption for shipments from the

United States to Canada.

* * * * *

(c) * * *

(6) For all exports of items subject to

the EAR (15 CFR Parts 730 through 799)

that will be transhipped through Canada

to a third destination, that would

require an SED, AES record, or

Commerce license if shipped directly to

the final destination from the United

States (see § 30.55(h)(2), including

exports of items subject to the EAR that

will be transhipped through Canada to

Cuba, Iran, Iraq, Libya, North Korea,

Serbia (excluding Kosovo), Sudan, and

Syria.

Subpart F—General Requirements—

Importers

10. Section 30.70 is amended by

redesignating footnote 9 as footnote 7

and adding a sentence before the last

sentence of the introductory text to read

as follows:

§ 30.70 Statistical information required on

import entries.

* * * Upon request, the importer or

import broker must provide the Census

Bureau with information or

documentation necessary to verify the

accuracy or resolve problems regarding

the reported import transaction received

by the Census Bureau.* * *

* * * * *

Dated: June 29, 2000.

Kenneth Prewitt,

Director, U.S. Census Bureau.

[FR Doc. 00–16895 Filed 7–6–00; 8:45 am]

BILLING CODE 3510–07–P

DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 732, 740, 743, 748, 750,

752, 758, 762, 772, and 774

[Docket No. 990709186–0128–02]

RIN 0694–AB88

Parties to a Transaction and Their

Responsibilities, Routed Export

Transactions, Shipper’s Export

Declarations, the Automated Export

System (AES), and Export Clearance

AGENCY: Bureau of Export

Administration, Commerce.

ACTION: Final rule.

SUMMARY: The Bureau of Export

Administration is revising the Export

Administration Regulations (EAR) to

clarify the responsibilities of parties to

export and reexport transactions, the

filing and use of Shipper’s Export

Declarations, Destination Control

Statement requirements, and other

export clearance issues. In addition, this

rule adds information about the scope

and requirements for the Automated

Export System (AES) Option 4

provision.

DATES: Effective Date: This rule is

effective July 10, 2000.

Grace Period: A 90 day grace period

will apply to the requirements set forth

in this rule. Until October 10, 2000,

Shipper’s Export Declarations will be

accepted with information that complies

with the rules prior to July 10, 2000.

FOR FURTHER INFORMATION CONTACT:

Sharron Cook, Regulatory Policy

Division, Bureau of Export

Administration, at (202) 482–2440.

For additional information on the

AES in general, please contact: C.

Harvey Monk, Chief Foreign Trade

Division, U.S. Census Bureau, (301)

457–2255, fax (301) 457–2645, e-mail:

c.harvey.monk.jr@census.gov

For information about obtaining BXA

approval to use AES Option 4 for items

subject to the EAR, contact: Tom

Andrukonis or Donald Lyles, Director,

Office of Enforcement Analysis, Bureau

of Export Administration, (202) 482–

4255, fax (202) 482–0971, e-mail:

tandruko@bxa.doc.gov

SUPPLEMENTARY INFORMATION:

Background

The Bureau of Export Administration

(BXA) is amending the Export

Administration Regulations (EAR) in

order to simplify and clarify the export

clearance process and facilitate

compliance. The amendment promotes

flexibility so that parties to transactions

subject to the EAR may structure their

transactions freely, consistent with

national security and foreign policy

objectives.

In this final rule, BXA defines new

terms, including ‘‘principal parties in

interest’’, ‘‘routed export transaction’’,

and ‘‘end-user’’, and clarifies existing

ones (notably the definition of

‘‘exporter’’). The amendments ensure

that for every transaction subject to the

EAR, some party to the transaction is

clearly responsible for determining

licensing authority (License, License

Exception, or NLR), and for obtaining

the appropriate license or other

authorization. The amendments also

encourage communication among all

parties to a transaction to ensure that

each party knows its responsibilities in

order to comply with the EAR.

For export control purposes the

exporter has generally been the seller.

An export transaction, however, has two

principal parties in interest: a U.S. party

and a foreign party—usually the seller

and the buyer. In a ‘‘routed export

transaction,’’ the foreign principal party

in interest agrees to terms of sale that

may include assuming responsibility for

export licensing. This rule provides that

when the foreign principal party

expressly assumes responsibility in

writing for determining license

requirements and obtaining necessary

authorization, that foreign party must

have a U.S. agent who becomes the

‘‘exporter’’ for export control purposes.

Without such a written undertaking by

the foreign principal, the U.S. principal

is the exporter, with all attendant

responsibilities.

In addition to clarifying export

licensing responsibilities, this rule

institutes a requirement that the export

licensee communicate license

conditions to those parties to whom

conditions apply and, when required by

the license, obtain written

acknowledgment of receipt of the

conditions. This new provision is part

of BXA’s License and Enforcement

Action Program (LEAP), which is

designed to enhance compliance with

the EAR.

In addition, these amendments

significantly revise the first six sections

of Part 758 of the EAR by reorganizing,

streamlining and clarifying necessary

provisions while deleting unnecessary

or redundant provisions. Section 758.1

consolidates into one section the export

control-related provisions pertaining to

the SED or AES record. In consolidating

these provisions into one section, BXA

has eliminated those that are already

contained in the FTSR, or that were

otherwise unrelated to export controls.

Section 758.2 provides new rules for

BXA’s AES Option 4 approval process.

Commenters asked that this be added to

the final regulation. Section 758.3

clarifies and consolidates provisions

relating to the responsibilities of the

parties, and § 758.4 consolidates, but

does not significantly change,

provisions concerning the use of an

export license. Section 758.4, which

contained very specific provisions

relating to conformity of documents, has

been greatly simplified in the interest of

flexibility, and moved to section 758.5.

Former sections 758.5 (general

destination control requirements) and

§ 758.6 (destination control statement)

have been combined and reduced to one

paragraph at § 758.6.

Lastly, section 762.7 is amended to

add language that clarifies that BXA has

legal authority to issue subpoenas

requiring individuals to appear and

testify during the investigatory phase of

an export case. The authority for this is

found in both the Export Administration

42566 Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations

Act of 1979 in section 12(a)(1), and in

the International Emergency Economic

Powers Act in section 1702(a)(2).

The Census Bureau initially

published a notice of proposed

rulemaking as to who goes in block 1(a)

of the SED in the Federal Register on

August 6, 1998 (63 FR 41979). As a

result of comments received on that

proposed rulemaking and subsequent

discussions with the Bureau of Export

Administration (BXA), the Census

Bureau decided to issue a

supplementary notice of proposed

rulemaking to address the issues raised

during the comment period and to

further clarify provisions contained in

that notice of proposed rulemaking. The

Census Bureau published a

supplementary notice of proposed

rulemaking in the Federal Register on

October 4, 1999 (64 FR 53861). BXA

also published a notice of proposed

rulemaking in the Federal Register on

October 4, 1999 (64 FR 53854) revising

the Export Administration Regulations

(EAR) regarding the responsibilities of

the parties to an export transaction,

routed export transactions, Shipper’s

Export Declarations, and export

clearance. Before and after the

publication of those notices in the

Federal Register, both the Census

Bureau and BXA participated in

numerous meetings, conferences, and

seminars with the trade community to

gain an understanding of business

issues, and to more clearly explain the

provisions of the proposed rules.

Response to Comments

BXA received twenty-eight (28)

comments on the notice of proposed

rulemaking published in the Federal

Register on October 4, 1999 (64 FR

53861). BXA revised certain provisions

in the final rule to address the concerns

of the respondents and to more clearly

explain the requirements. The major

concerns addressed in the comments

and BXA’s response are as follows:

1. Requirement to put the Export

Control Classification Number (ECCN)

on the SED or AES record whenever

exporting an item that is listed on the

Commerce Control List. Commenters

expressed concern this requirement

would be very burdensome. These

commenters explained the greater

administrative burden in terms of

having to report ECCNs subject only to

Anti-terrorism (AT) controls even when

the ultimate destination is a nonterrorism supporting country. BXA also

received comments supporting the

proposed ECCN requirement, because of

the vital importance of the ECCN both

to Government agencies such as the U.S.

Customs Service, and to the business

community as a foundation for making

correct license determinations. In fact,

one company suggested that BXA

expand the requirement to include

requiring the ECCN on the invoice and

bill of lading in order to provide

information to the foreign principal for

reexport purposes. In response to the

comments, BXA narrowed the scope of

the ECCN requirement in the final rule

so that exporters only have to report the

ECCN on the SED or AES record for

items exported under a license or

License Exception, and ‘‘No License

Required’’ (NLR) shipments of items

having a reason for control other than

anti-terrorism (AT). The only exception

to this requirement would be for items

temporarily in the United States

meeting the provisions of License

Exception TMP, under § 740.9(b)(3) of

the EAR.

2. Clarify the writing required from

the foreign principal party in interest in

routed transactions to permit its agent

to become the ‘‘exporter.’’ Some

commenters wanted clarification as to

what the writing should include. Others

wanted to know if the Incoterm ‘‘EXW’’

would be sufficient for the writing. One

commenter expressed support for an

express writing, as opposed to

Incoterms, because of the lack of

understanding of the Incoterms among

small and medium size exporters, who

typically hire clerks to comply with

export regulations. In response to these

concerns, BXA has included in this

preamble an example of an acceptable

writing. This example is similar to the

language that describes the buyer’s

responsibiltiy for export licenses in the

Incoterms 2000 publication. BXA’s

sample writing would be signed by the

foreign principal party in interest, and

reads, ‘‘I undertake to determine any

export license requirements, to obtain

any export license or other official

authorization, and to carry out any

customs formalities for the export of the

goods.’’ This is just an example of a

writing. No doubt the exporting

community will use good judgement in

determining the extensiveness of the

writing it chooses to use, by considering

the strategic applications and

capabilities of the item being exported,

its level of relationship with the foreign

principal party in interest, and the

foreign principal’s knowledge of U.S.

export laws. The format or language is

not the most important part of the

writing requirement. The most

important aspect of the writing is that it

reflects an agreement between the

principals concerning their specific

roles in determining the license

requirements and obtaining any license

that is required.

Some specific questions were

submitted by some commenters about

the writing.

1. Question: May one writing cover

multiple transactions between the same

principals?

Answer: Yes, and this has been

clarified in this final rule.

2. Question: In a routed transaction

that is supported by an assumption of

responsibility in writing, must the U.S.

principal party in interest also obtain a

writing from the U.S. agent of the

foreign principal party in interest stating

that the agent has assumed export

compliance responsibilities on behalf of

the foreign principal party in interest?

Answer: While the EAR do not require

the U.S. principal party in interest to

obtain a writing from the agent to

establish its export compliance role, it

would be a good business practice to

confirm the agent’s responsibilities.

3. The liability of the U.S. principal

party in interest when complying with

the information sharing requirement.

Several commenters were concerned

about the liability that may accrue to the

U.S. principal party in interest in a

routed transaction when it gives the

foreign principal party in interest or its

agent the Export Control Classification

Number (ECCN), technical

specifications of an item, or other

information related to license

determination. This final rule does not

change the current standards of liability

as they apply to provision of

information. The foreign principal party

in interest or its authorized agent is

responsible for ensuring that the export

complies with all applicable

requirements of the EAR, including, as

necessary, the accuracy of the product

classification. If the foreign principal

party in interest has reason to doubt the

accuracy of the ECCN provided, is

unclear about the classification of the

item based on the technical

specifications provided or has questions

about any other aspect of export control

requirements, the foreign principal

party in interest must make inquiries

and take appropriate action to ensure

compliance with the EAR.

Some companies expressed concern

about requests for information that is

readily available from other sources,

proprietary, not in the possession of the

U.S. principal party in interest, or not

available. In addition to the availability

concern, some companies were

concerned about the cost of complying

with information sharing requests. BXA

has not made any changes in the final

rule in this regard, as the U.S. principal

is generally in a better position to obtain

Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations 42567

the ECCN or technical specifications

than the foreign principal or its agent.

There is no requirement to go beyond

the information necessary to classify the

item according to the technical

parameters of the CCL. BXA believes

that all these concerns are better dealt

with in the business environment

among the principals, rather than by

regulation.

4. Requirement for the licensee to

obtain written acknowledgment of

license conditions, when it is required

per condition on the license. Some

companies are concerned that BXA

licensing officers will overuse this

condition. Several individuals suggested

a notification requirement instead of a

notification and acknowledgment

combination. The practice of including

a condition for the licensee to notify a

particular party or parties of the

conditions on a license or in some case

obtain an acknowledgment of this

notification has been in use for many

years by BXA. This rule simply adds the

practice to the regulations, for

transparency.

One individual expressed concern

that it would be unclear as to what

constitutes compliance if the licensee

were required to notify all end-users of

conditions in a situation where the

ultimate consignee was a distributor.

Applicants must remember that

conditions may be negotiated between

BXA and the applicant. Moreover, if an

applicant receives a license, but is not

comfortable with the conditions, the

applicant may choose not to proceed

with the transaction.

5. Effective date of publication. There

is some industry concern about the

effective date of these provisions, as it

may take some time to reprogram

automated processes, provide training to

personnel, and create new compliance

procedures within export management

systems. BXA believes that a 90 day

‘‘grace period’’ will give adequate time

to the exporting community to ensure

compliance with the rules set forth in

this regulation.

6. Clarify conformity of documents

provisions. Several commenters stated

their belief that BXA’s new definition of

‘‘exporter’’, coupled with the Bureau of

Census’’ new requirement for the U.S.

principal party in interest to be placed

in block 1(a) of the SED or in the

‘‘exporter’’ block of the AES record, was

confusing to some commenters. They

expressed concern over the fact the

‘‘exporter’’ for EAR purposes may not be

the person in the ‘‘exporter’’ block of the

SED or AES record. Some commenters

came to the conclusion that the different

definitions of ‘‘exporter’’ might impact

the conformity of documents

requirement contained in § 758.5(b) of

the EAR. To alleviate the confusion and

the conformity of document conflict

caused by BXA’s and Census’ different

definitions of the term ‘‘exporter,’’

Census will be revising the SED and

AES record to remove the term

‘‘exporter’’ from blocks 1a, 1b, and the

AES record, and replacing it with the

term ‘‘U.S. Principal Party in Interest.’’

Although the Export Administration

Act (EAA) expired on August 20, 1994,

the President invoked the International

Emergency Economic Powers Act and

continued in effect the EAR, and, to the

extent permitted by law, the provisions

of the EAA in Executive Order 12924 of

August 19, 1994, extended by

Presidential notice of August 10, 1999

(64 FR 44101) (August 13, 1999).

Rulemaking Requirements

1. This final rule has been determined

to be significant for purposes of E.O.

12866.

2. This rule involves collections that

have been approved by the Office of

Management and Budget under control

numbers 0694–0038, and 0694–0096.

This rule contains collections that have

been approved by the Office of

Management and Budget under control

numbers: 0607–0152, 0694–0040, 0694–

0094, 0694–0095, 0694–0097, 0694–

0088, and 0694–0120. Notwithstanding

any other provision of law, no person is

required to respond 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 OMB Control Number.

3. This rule does not contain policies

with Federalism implications sufficient

to warrant preparation of a Federalism

assessment under Executive Order

13132.

4. The provisions of the

Administrative Procedure Act (5 U.S.C.

553) requiring notice of proposed

rulemaking, the opportunity for public

participation, and a delay in effective

date, are inapplicable because this

regulation involves a military and

foreign affairs function of the United

States (see 5 U.S.C. 553(a)(1)). Further,

no other law requires that a notice of

proposed rulemaking and an

opportunity for public comment be

given for this final rule. Because a

notice of proposed rulemaking and an

opportunity for public comment are not

required to be given for this rule under

5 U.S.C. 553 or by any other law, the

analytical requirements of the

Regulatory Flexibility Act (5 U.S.C. 601

et seq.) are not applicable.

Therefore, this regulation is issued in

final form. Although there is no formal

comment period, public comments on

this regulation are welcome on a

continuing basis. Comments should be

submitted to Sharron Cook, Regulatory

Policy Division, Bureau of Export

Administration, Department of

Commerce, P.O. Box 273, Washington,

DC 20044.

List of Subjects

15 CFR Part 732

Administrative practice and

procedure, Advisory committees,

Exports, Foreign trade, Reporting and

recordkeeping requirements, Strategic

and critical materials.

15 CFR Parts 740, 743, 748, 750, 752,

758, and 772

Administrative practice and

procedure, Exports, Foreign trade,

Reporting and Recordkeeping

requirements.

15 CFR Part 762

Administrative practice and

procedure, Business and industry,

Confidential business information,

Exports, Foreign trade, Reporting and

recordkeeping requirements.

15 CFR Part 774

Exports, Foreign trade.

Accordingly, parts 732, 740, 743, 748,

750, 752, 758, 762, 772, and 774 of the

Export Administration Regulations (15

CFR Parts 730–799) are amended as

follows:

1. The authority citation for 15 CFR

parts 758 and 762 continues to read as

follows:

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

U.S.C. 1701 et seq.; E.O. 12924, 59 FR 43437,

3 CFR, 1994 Comp., p. 917; Notice of August

10, 1999, 3 CFR, 1999 Comp., p. 302.

2. The authority citation for 15 CFR

parts 732, 748, 752, and 772 continues

to read as follows:

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

U.S.C. 1701 et seq.; E.O. 12924, 59 FR 43437,

3 CFR, 1994 Comp., p. 917; E.O. 13026, 61

FR 58767, 3 CFR, 1996 Comp., p. 228; Notice

of August 10, 1999, 3 CFR, 1999 Comp., p.

302.

3. 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.; E.O. 12924, 59 FR 43437,

3 CFR, 1994 Comp., p. 917; E.O. 13026, 61

FR 58767, 3 CFR, 1996 Comp., p. 228; Notice

of August 10, 1999, 3 CFR, 1999 Comp., p.

302.

4. The authority citation for 15 CFR

part 743 continues to read as follows:

42568 Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations

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

U.S.C. 1701 et seq; E.O. 12924, 59 FR 43437,

3 CFR, 1994 Comp., p. 917; Notice of August

10, 1999, 3 CFR, 1999 Comp., p. 302.

5. The authority citation for 15 CFR

part 750 is revised to read as follows:

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

U.S.C. 1701 et seq.; E.O. 12924, 59 FR 43437,

3 CFR, 1994 Comp., p. 917; E.O. 12981, 60

FR 62980, 3 CFR, 1997 Comp., p. 60; E.O.

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

228; Notice of August 10, 1999, 3 CFR, 1999

Comp., p. 302.

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; E.O. 12924, 59 FR

43437, 3 CFR, 1994 Comp., p. 917; E.O.

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

228; Notice of August 10, 1999, 3 CFR, 1999

Comp., p. 302.

7. Parts 740 through 772 are amended

by revising the phrase ‘‘U.S. exporter’’

to read ‘‘exporter’’ in the following

places:

a. § 740.9(a)(2)(iii) last sentence;

b. § 740.10(b)(3)(ii)(C);

c. § 743.1(b);

d. § 748.11(e)(4)(ii)(1);

e. Supplement No. 3 to part 748,

‘‘BXA–711, Statement By ultimate

consignee and Purchaser Instructions’’,

Block 8; and

f. Supplement No. 3 to part 752,

‘‘Instructions on Completing Form

BXA–752 ‘Statement by Consignee in

Support of Special Comprehensive

License’–A’’, Block 5.

PART 732—[AMENDED]

8. Section 732.5 is revised to read as

follows:

§ 732.5 Steps regarding Shipper’s Export

Declaration, Destination Control

Statements, and recordkeeping.

(a) Step 27: Shipper’s Export

Declaration (SED) or Automated Export

System (AES) record. Exporters or

agents authorized to complete the

Shipper’s Export Declaration (SED), or

to file SED information electronically

using the Automated Export System

(AES), should review § 758.1 of the EAR

to determine when an SED is required

and what export control information

should be entered on the SED or AES

record. More detailed information about

how to complete an SED or file the SED

information electronically using AES

may be found in the Bureau of Census

Foreign Trade Statistics Regulations

(FTSR) at 15 CFR part 30. Reexporters

and firms exporting from abroad may

skip Steps 27 through 29 and proceed

directly to § 732.6.

(1) Entering license authority. You

must enter the correct license authority

for your export on the SED or AES

record (License number, License

Exception symbol, or No License

Required designator ‘‘NLR’’) as

appropriate. See § 758.1(g) of the EAR

and 15 CFR 30.7(m) of the FTSR.

(i) License number and expiration

date. If you are exporting under the

authority of a license, you must enter

the license number on the SED or AES

record. The expiration date must be

entered on paper versions of the SED

only.

(ii) License Exception. If you are

exporting under the authority of a

License Exception, you must enter the

correct License Exception symbol (e.g.,

LVS, GBS, CIV) on the SED or AES

record. See § 740.1 and § 740.2 of the

EAR.

(iii) NLR. If you are exporting items

for which no license is required, you

must enter the designator NLR. You

should use the NLR designator in two

circumstances: first, when the items to

be exported are subject to the EAR but

not listed on the Commerce Control List

(CCL) (i.e., items that are classified as

EAR99), and second, when the items to

be exported are listed on the CCL but do

not require a license. Use of the NLR

designator is also a representation that

no license is required under any of the

General Prohibitions set forth in part

736 of the EAR.

(2) Item description. You must enter

an item description identical to the item

description on the license when a

license is required, or enter an item

description sufficient in detail to permit

review by the U.S. Government and

verification of the Schedule B Number

(or Harmonized Tariff Schedule

number) for License Exception

shipments or shipments for which No

License is Required (NLR). See

§ 758.1(g) of the EAR; and 15 CFR

30.7(l) of the FTSR.

(3) Entering the ECCN. You must enter

the correct Export Control Classification

Number (ECCN) on the SED or AES

record for all licensed and License

Exception shipments, and ‘‘No License

Required’’ (NLR) shipments of items

having a reason for control other than

anti-terrorism (AT). The only exception

to this requirement would be the return

of unwanted foreign origin items,

meeting the provisions of License

Exception TMP, under § 740.9(b)(3). See

§ 758.1(g) of the EAR.

(b) Step 28: Destination Control

Statement. The Destination Control

Statement (DCS) must be entered on the

invoice and on the bill of lading, air

waybill, or other export control

document that accompanies the

shipment from its point of origin in the

United States to the ultimate consignee

or end-user abroad. The person

responsible for preparation of those

documents is responsible for entry of

the DCS. The DCS is required for all

exports from the United States of items

on the Commerce Control List and is not

required for items classified as EAR99,

unless the export may be made under

License Exception BAG or GFT (see part

740 of the EAR). Reexporters should

review § 752.15 of the EAR for DCS

requirements when using a Special

Comprehensive License; otherwise, DCS

requirements do not apply to reexports.

See § 758.6 of the EAR.

(c) Step 29: Recordkeeping. Records of

transactions subject to the EAR must be

maintained for five years in accordance

with the recordkeeping provisions of

part 762 of the EAR.

§ 732.6 [Amended]

9. Section 732.6 is amended by:

a. Revising the citation ‘‘§ 758.2’’ to

read ‘‘§ 758.4’’ in paragraph (a); and

b. Revising the citation ‘‘§ 758.4’’ to

read ‘‘§ 758.1’’ in paragraph (b).

PART 740—[AMENDED]

§ 740.1 [Amended]

10. Section 740.1 is amended by

revising:

a. The phrase ‘‘requirements of

§ 758.5 and § 758.6 of the EAR.’’ in

paragraph (e) to read ‘‘requirements of

§ 758.6 of the EAR.’’; and

b. Paragraph (d) to read as follows:

§ 740.1 Introduction.

* * * * *

(d) Shipper’s Export Declaration or

Automated Export System (AES) record.

You must enter on any required

Shipper’s Export Declaration (SED) or

Automated Export System (AES) record

the correct License Exception symbol

(e.g., LVS, GBS, CIV) and the correct

Export Control Classification Number

(ECCN) (e.g., 4A003, 5A002) for all

shipments of items exported under a

License Exception. Items temporarily in

the United States meeting the provisions

of License Exception TMP, under

§ 740.9(b)(3), are excepted from this

requirement. See § 758.1 of the EAR for

Shipper’s Export Declaration

requirements or § 758.2 of the EAR for

Automated Export System (AES)

requirements.

* * * * *

Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations 42569

§ 740.7 [Amended]

11. Section 740.7 is amended by

revising the citation ‘‘758.6(a)(ii)’’ to

read ‘‘758.6’’ in paragraph (e)(2).

PART 748—[AMENDED]

12. Section 748.4 is amended by

revising paragraphs (a) and (b) to read

as follows:

§ 748.4 Basic guidance related to applying

for a license.

(a) License applicant. (1) Export

transactions. Only a person in the

United States may apply for a license to

export items from the United States. The

applicant must be the exporter, who is

the U.S. principal party in interest with

the authority to determine and control

the sending of items out of the United

States, except for Encryption License

Arrangements (ELA) (see § 750.7(d) of

the EAR). See definition of ‘‘exporter’’

in part 772 of the EAR.

(2) Routed export transactions. The

U.S. principal party in interest or the

duly authorized U.S. agent of the foreign

principal party in interest may apply for

a license to export items from the

United States. Prior to submitting an

application, the agent that applies for a

license on behalf of the foreign principal

party in interest must obtain a power of

attorney or other written authorization

from the foreign principal party in

interest. See § 758.3(b) and (d) of the

EAR.

(3) Reexport transactions. The U.S. or

foreign principal party in interest, or the

duly authorized U.S. agent of the foreign

principal party in interest, may apply

for a license to reexport controlled items

from one country to another. Prior to

submitting an application, an agent that

applies for a license on behalf of a

foreign principal party in interest must

obtain a power-of-attorney or other

written authorization from the foreign

principal party in interest, unless there

is a preexisting relationship by

ownership, control, position of

responsibility or affiliation. See powerof-attorney requirements in paragraph

(b)(2) of this section.

(b) Disclosure of parties on license

applications and the power of attorney.

(1) Disclosure of parties. License

applicants must disclose the names and

addresses of all parties to a transaction.

When the applicant is the U.S. agent of

the foreign principal party in interest,

the applicant must disclose the fact of

the agency relationship, and the name

and address of the agent’s principal. If

there is any doubt about which persons

should be named as parties to the

transaction, the applicant should

disclose the names of all such persons

and the functions to be performed by

each in Block 24 (Additional

Information) of the BXA–748P

Multipurpose Application form. Note

that when the foreign principal party in

interest is the ultimate consignee or

end-user, the name and address need

not be repeated in Block 24. See ‘‘Parties

to the transaction’’ in § 748.5.

(2) Power of attorney or other written

authorization. (i) Requirement. An agent

must obtain a power of attorney or other

written authorization from the principal

party in interest, unless there is a

preexisting relationship by ownership,

control, position of responsibility or

affiliation, prior to preparing or

submitting an application for a license,

when acting as either:

(A) An agent, applicant, licensee and

exporter for a foreign principal party in

interest in a routed transaction; or

(B) An agent who prepares an

application for export on behalf of a

U.S. principal party in interest who is

the actual applicant, licensee and

exporter in an export transaction.

(ii) Application. When completing the

BXA–748P Multipurpose Application

Form, Block 7 (documents on file with

applicant) must be marked ‘‘other’’ and

Block 24 (Additional information) must

be marked ‘‘748.4(b)(2)’’ to indicate that

the power of attorney or other written

authorization is on file with the agent.

See § 758.3(d) for power of attorney

requirement, and see also part 762 of the

EAR for recordkeeping requirements.

* * * * *

13. Section 748.5 is revised to read as

follows:

§ 748.5 Parties to the transaction.

The following parties may be entered

on the BXA–748P Multipurpose

Application Form or electronic

equivalent. The definitions, which also

appear in part 772 of the EAR, are set

out here for your convenience to assist

you in filling out your application

correctly.

(a) Applicant. The person who applies

for an export or reexport license, and

who has the authority of a principal

party in interest to determine and

control the export or reexport of items.

See § 748.4(a) and definition of

‘‘exporter’’ in part 772 of the EAR.

(b) Other party authorized to receive

license. The person authorized by the

applicant to receive the license. If a

person and address is listed in Block 15

of the BXA–748P Multipurpose

Application Form or the electronic

equivalent, the Bureau of Export

Administration will send the license to

that person instead of the applicant.

Designation of another party to receive

the license does not alter the

responsibilities of the applicant,

licensee or exporter.

(c) Purchaser. The person abroad who

has entered into the transaction to

purchase an item for delivery to the

ultimate consignee. In most cases, the

purchaser is not a bank, forwarding

agent, or intermediary. The purchaser

and ultimate consignee may be the same

entity.

(d) Intermediate consignee. The

person that acts as an agent for a

principal party in interest and takes

possession of the items for the purpose

of effecting delivery of the items to the

ultimate consignee. The intermediate

consignee may be a bank, forwarding

agent, or other person who acts as an

agent for a principal party in interest.

(e) Ultimate consignee. The principal

party in interest located abroad who

receives the exported or reexported

items. The ultimate consignee is not a

forwarding agent or other intermediary,

but may be the end-user.

(f) End-user. The person abroad that

receives and ultimately uses the

exported or reexported items. The enduser is not a forwarding agent or

intermediary, but may be the purchaser

or ultimate consignee.

PART 750—[AMENDED]

14. Section 750.7 is amended by

revising paragraph (d) to read as

follows:

§ 750.7 Issuance of licenses.

* * * * *

(d) Responsibility of the licensee. The

person to whom a license is issued is

the licensee. In export transactions, the

exporter must be the licensee, and the

exporter-licensee is responsible for the

proper use of the license, and for all

terms and conditions of the license,

except to the extent that certain terms

and conditions are directed toward

some other party to the transaction. In

the case of Encryption License

Agreements (ELA), the licensee may not

necessarily be the exporter or

reexporter. In this case, the authorized

user of the ELA is responsible for proper

use of the license, and for all terms and

conditions of the license, except to the

extent that certain terms and conditions

are directed toward some other party to

the transaction. In reexport or routed

export transactions, a U.S. agent acting

on behalf of a foreign principal party in

interest may be the licensee; in these

cases, both the agent and the foreign

principal party in interest, on whose

behalf the agent has acted, are

responsible for the use of the license,

and for all terms and conditions of the

42570 Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations

license, except to the extent that certain

terms and conditions are directed

toward some other party to the

transaction. It is the licensee’s

responsibility to communicate the

specific license conditions to the parties

to whom those conditions apply. In

addition, when required by the license,

the licensee is responsible for obtaining

written acknowledgment(s) of receipt of

the conditions from the party(ies) to

whom those conditions apply.

* * * * *

PART 752—[AMENDED]

§ 752.15 [Amended]

15. Section 752.15 is amended by

revising the citation ‘‘§ 758.3’’ to read

‘‘§ 758.1’’ in paragraph (a) introductory

text.

PART 758—[AMENDED]

16. Part 758 is amended by revising

sections 758.1 through 758.6, to read as

follows:

PART 758—EXPORT CLEARANCE

REQUIREMENTS

§ 758.1 The Shipper’s Export Declaration

(SED) or Automated Export System (AES)

record.

(a) The Shipper’s Export Declaration

(SED) or Automated Export System

(AES) record. The SED (Form 7525–V,

Form 7525–V–Alt, or Automated Export

System record) is used by the Bureau of

Census to collect trade statistics and by

the Bureau of Export Administration for

export control purposes. The SED or

AES record collects basic information

such as the names and addresses of the

parties to a transaction; the Export

Control Classification Number (ECCN)

(when required), the Schedule B

number or Harmonized Tariff Schedule

number, the description, quantity and

value of the items exported; and the

license authority for the export. The

SED or the AES electronic equivalent is

a statement to the United States

Government that the transaction

occurred as described.

(b) When an SED or AES record is

required. Except when the export of

items subject to the EAR is to take place

electronically or in an otherwise

intangible form, you must file an SED or

AES record with the United States

Government for items subject to the

EAR, including exports by U.S. mail, in

the following situations:

(1) For all exports of items subject to

the EAR that are destined to Cuba, Iran,

Iraq, Libya, North Korea, Serbia (except

Kosovo), Sudan, or Syria, regardless of

value (see 15 CFR 30.55(h) of the FTSR);

and

(2) For all exports of items subject to

the EAR that are authorized under a

license, regardless of value, or

destination;

(3) For all exports of commodities and

mass market software subject to the EAR

that are authorized under a License

Exception or under NLR, when the

value of the commodities or mass

market software classified under a

single Schedule B Number (or

Harmonized Tariff Schedule number) is

over $2,500, except as exempted by the

Foreign Trade Statistics Regulations

(FTSR) in 15 CFR part 30 and referenced

in paragraph (c) of this section;

(4) For all exports of items subject to

the EAR that will be transshipped

through Canada to a third destination,

where the export would require an SED

or AES record or license if shipped

directly to the final destination from the

United States (see 15 CFR 30.58(c) of the

FTSR).

Note to paragraph (b): In addition to the

Shipper’s Export Declaration for exports, the

Bureau of Census Foreign Trade Statistics

Regulations provide for a specific Shipper’s

Export Declaration for In-Transit Goods

(Form 7513). See 15 CFR 30.3 and 30.8 of the

FTSR.

(c) Exemptions. A complete list of

exemptions from the SED or AES filing

requirement is set forth in the FTSR.

Some of these FTSR exemptions have

elements in common with certain EAR

License Exceptions. An FTSR

exemption may be narrower than a

License Exception. The following

references are provided in order to

direct you to the FTSR exemptions that

relate to EAR License Exceptions:

(1) License Exception Baggage (BAG),

as set forth in § 740.14 of the EAR. See

15 CFR 30.56 of the FTSR;

(2) License Exception Gift Parcels and

Humanitarian Donations (GFT), as set

forth in § 740.12 of the EAR. See 15 CFR

30.55(g) of the FTSR;

(3) License Exception Aircraft and

Vessels (AVS), as set forth in § 740.15 of

the EAR. See 15 CFR 30.55(l) of the

FTSR;

(4) License Exception Governments

and International Organizations (GOV),

as set forth in § 740.11 of the EAR. See

15 CFR 30.53 of the FTSR;

(5) License Exception Technology and

Software Under Restriction (TSR), as set

forth in § 740.6 of the EAR. See 15 CFR

30.55(n) of the FTSR; or

(6) License Exception Temporary

Imports, Exports, and Reexports (TMP)

‘‘tools of trade’’, as set forth in

§ 740.9(a)(2)(i) of the EAR. See 15 CFR

30.56(b) of the FTSR.

(d) Notation on export documents for

exports exempt from SED or AES record

requirements. When an exemption from

filing the Shipper’s Export Declaration

or Automated Export System record

applies, the export authority (License

Exception or NLR) of all the items must

be entered on the loading document

(e.g., Cargo Declaration, manifest, bill of

lading, (master) air waybill) by the

person responsible for preparing the

document. This requirement is intended

to parallel the Bureau of Census

requirement, so that notations as to the

basis for the SED exemption and the

license authority are entered in the same

place and manner (see 15 CFR 30.21 of

the FTSR for detailed requirements).

The loading document must be available

for inspection by government officials,

along with the items, prior to lading on

the carrier.

(e) Signing the Shipper’s Export

Declaration or transmitting data via

AES. The person who signs the SED

must be in the United States at the time

of signing. The person who transmits

data via AES must be a certified AES

participant in accordance with 15 CFR

30.60 of the FTSR. The person that signs

the SED or transmits data via AES,

whether exporter or agent, is

responsible for the truth, accuracy, and

completeness of the SED or AES record,

except insofar as that person can

demonstrate that he or she reasonably

relied on information furnished by

others.

(f) The SED or AES record is an export

control document. The SED or AES

record is a statement to the U.S.

Government. The SED or AES record is

an export control document as defined

in part 772 of the EAR. False statements

made thereon may be a violation of

§ 764.2(g) of the EAR. When an SED or

AES record is presented to the U.S.

Government, the signer or filer of the

SED or AES record represents the

following:

(1) Export of the items described on

the SED or AES record is authorized

under the terms and conditions of a

license issued by BXA; is in accordance

with the terms and conditions of a

License Exception; is authorized under

‘‘NLR’’ as no license is required for the

shipment; or is not subject to the EAR;

(2) Statements on the SED or AES

record are in conformity with the

contents of any license issued by BXA,

with the possible exception of the

exporter block in routed transactions;

and

(3) All information shown on the SED

or AES record is true, accurate, and

complete.

(g) Export control information on the

SED or AES record. For each item on the

SED or AES record, you must show the

license authority (License number,

License Exception, or No License

Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations 42571

Required (NLR)), the Export Control

Classification Number (ECCN) (when

required), and the item description in

the designated blocks. The item

description must be stated in Commerce

Control List terms. If those terms are

inadequate to meet Census Bureau

requirements, the FTSR requires that

you give enough additional detail to

permit verification of the Schedule B

Number (or Harmonized Tariff Schedule

number). The FTSR also requires

separate descriptions of items for each

Schedule B classification (or

Harmonized Tariff Schedule number).

See 15 CFR 30.6 (separate SED or AES

records), § 30.7(l) (description of items)

and § 30.9 (separation of items on the

SED) of the FTSR.

(1) Exports under a license. When

exporting under the authority of a

license, you must enter on the SED or

AES record the license number and

expiration date (the expiration date is

only required on paper versions of the

SED), the ECCN, and an item

description identical to the item

description on the license.

(2) Exports under a License Exception.

You must enter on any required SED or

AES record the ECCN and the correct

License Exception symbol (e.g., LVS,

GBS, CIV) for the License Exception(s)

under which you are exporting. Items

temporarily in the United States

meeting the provisions of License

Exception TMP, under § 740.9(b)(3), are

excepted from this requirement. See

also § 740.1(d) of the EAR.

(3) No License Required (NLR)

exports. You must enter on any required

SED or AES record the ‘‘NLR’’

designation when the items to be

exported are subject to the EAR but not

listed on the Commerce Control List

(i.e., items are classified as EAR99), and

when the items to be exported are listed

on the CCL but do not require a license.

In addition, you must enter the correct

ECCN on any required SED or AES

record for all items being exported

under the NLR provisions that have a

reason for control other than antiterrorism (AT). The designator ‘‘TSPA’’

may be used, but is not required, when

the export consists of technology or

software outside the scope of the EAR.

See § 734.7 through § 734.11 of the EAR

for TSPA information.

(h) Power of attorney or other written

authorization. In a ‘‘power of attorney’’

or other written authorization, authority

is conferred upon an agent to perform

certain specified acts or kinds of acts on

behalf of a principal.

(1) An agent must obtain a power of

attorney or other written authorization

in the following circumstances:

(i) An agent that represents a foreign

principal party in interest in a routed

transaction must obtain a power of

attorney or other written authorization

that sets forth his authority; and

(ii) An agent that applies for a license

on behalf of a principal party in interest

must obtain a power of attorney or other

written authorization that sets forth the

agent’s authority to apply for the license

on behalf of the principal.

Note to paragraph (h)(1): The Bureau of

Census Foreign Trade Statistics Regulations

impose additional requirements for a power

of attorney or other written authorization.

See 15 CFR 30.4(e) of the FTSR.

(2) This requirement for a power of

attorney or other written authorization

is a legal requirement aimed at ensuring

that the parties to a transaction negotiate

and understand their responsibilities.

The absence of a power of attorney or

other written authorization does not

prevent BXA from using other evidence

to establish the existence of an agency

relationship for purposes of imposing

liability.

(i) Submission of the SED or AES

record. The SED or AES record must be

submitted to the U.S. Government in the

manner prescribed by the Bureau of

Census Foreign Trade Statistics

Regulations (15 CFR part 30).

§ 758.2 Automated Export System (AES).

The Census Bureau’s Foreign Trade

Statistics Regulations (FTSR) (15 CFR

30) contain provisions for filing

Shipper’s Export Declarations (SEDs)

electronically using the Automated

Export System (AES). In order to use

AES, you must apply directly to the

Census Bureau for certification and

approval through a Letter of Intent (see

15 CFR 30.60(b) and Appendix A to part

30 of the FTSR). Four AES filing options

are available for transmitting shipper’s

export data. Option 1 is the standard

paper filing of the SED, while the other

three options are electronic. Option 2

requires the electronic filing of all

information required for export prior to

export (15 CFR 30.61(a) and 30.63 of the

FTSR); Option 3 requires the electronic

filing of only specified data elements

prior to export, with complete

information transmitted within 5

working days of exportation (15 CFR

30.61(b) and Appendix B of the FTSR);

Option 4 is only available for approved

filers (approval by Census Bureau, U.S.

Customs Service, BXA and other

agencies) and requires no information to

be transmitted prior to export, with

complete information transmitted

within 10 working days of exportation

(15 CFR 30.61(c) and 30.62(c) of the

FTSR).

(a) Census’ Option 4 application

process. Exporters, or agents applying

on behalf of an exporter, may apply for

Option 4 filing privileges by submitting

a Letter of Intent to the Census Bureau

in accordance with 15 CFR 30.60(b) and

30.62 of the FTSR. The Census Bureau

will distribute the Letter of Intent to

BXA and other agencies participating in

the Option 4 approval process. Any

agency may notify Census that an

applicant has failed to meet its

acceptance standards, and the Census

Bureau will provide a denial letter to

the applicant naming the denying

agency. If no agency denies the

application within 30 days, nor requests

an extension of time within 30 days, the

Census Bureau will provide the

applicant with an approval letter. See 15

CFR 30.62(b) of the FTSR.

(b) BXA Option 4 application process.

When AES filers wish to use Option 4

for exports of items that require a BXA

license, those filers must seek separate

approval directly from BXA by

completing a questionnaire and

certification. (Separate BXA approval is

not required for the use of Option 4 in

connection with exports that do not

require a BXA license.) The

questionnaire and certification should

be mailed to: U.S. Department of

Commerce, Bureau of Export

Administration, The Office of

Enforcement Analysis, 14th &

Pennsylvania Avenue, N.W., Room

4065, Washington, D.C. 20230.

(1) Questionnaire. The following

questions must be answered based on

your experiences over the past five

years. If the answer to either of the

questions is ‘‘yes’’, it must be followed

with a full explanation. Answering

‘‘yes’’ to either of the questions will not

automatically prevent your participation

in Option 4. BXA will consider the facts

of each case and any remedial action

you have taken to determine whether

your reliability is sufficient to

participate in this program.

(i) Have you been charged with,

convicted of, or penalized for, any

violation of the EAR or any statute

described in § 766.25 of the EAR?

(ii) Have you been notified by any

government official of competent

authority that you are under

investigation for any violation of the

EAR or any statute described in § 766.25

of the EAR?

(2) Certification. Each applicant must

submit a signed certification as set forth

in this paragraph. The certification will

be subject to verification by BXA.

I (We) certify that I (we) have established

adequate internal procedures and safeguards

to comply with the requirements set forth in

the U.S. Department of Commerce Export

42572 Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations

Administration Regulations (EAR) and

Foreign Trade Statistics Regulations (FTSR).

These procedures and safeguards include

means for:

(i) Making a proper determination as to

whether a license is required for a particular

export;

(ii) Receipt of notification of approval of

the export license, if required, before the

export is made;

(iii) Compliance with all the terms and

conditions of the license, License Exception,

or NLR provisions of the EAR as applicable;

(iv) Return of revoked or suspended

licenses to BXA in accordance with

§ 750.8(b) of the EAR, if requested;

(v) Compliance with the destination

control statement provisions of § 758.6 of the

EAR;

(vi) Compliance with the prohibition

against export transactions that involve

persons who have been denied U.S. export

privileges; and

(vii) Compliance with the recordkeeping

requirements of part 762 of the EAR.

I (we) agree that my (our) office records

and physical space will be made available for

inspection by the Bureau of the Census, BXA,

or the U.S. Customs Service, upon request.

(c) BXA Option 4 evaluation criteria.

BXA will consider the grounds for

denial of Option 4 filing status set forth

in 15 CFR 30.62(b)(2) of the FTSR, as

well as the additional grounds for denial

set forth in this paragraph. (1) Applicants have not been

approved for Option 4 filing privileges

by the Census Bureau or other agency; (2) Applicants are denied persons (i.e.,

persons listed on the Denied Persons

List in Supplement No. 2 to Part 764 of

the EAR); or

(3) Exports are destined to the

countries designated by the Secretary of

State as supporters of international

terrorism under Section 6(j) of the

Export Administration Act of 1979, as

amended. These ‘‘T–7’’ countries

currently include Iran, Iraq, Libya,

North Korea, Cuba, Sudan, and Syria. (d) Contacts for assistance. (1) For

additional information on the AES in

general, please contact: Chief Foreign

Trade Division, U.S. Census Bureau,

(301) 457–2255, facsimile: (301) 457–

2645.

(2) For information about BXA’s

Option 4 approval process to use AES

Option 4 for items subject to the EAR,

contact: Director, Office of Enforcement

Analysis, Bureau of Export

Administration, (202) 482–4255,

facsimile: (202) 482–0971.

§ 758.3 Responsibilities of parties to the

transaction.

All parties that participate in

transactions subject to the EAR must

comply with the EAR. Parties are free to

structure transactions as they wish, and

to delegate functions and tasks as they

deem necessary, as long as the

transaction complies with the EAR.

However, acting through a forwarding or

other agent, or delegating or

redelegating authority, does not in and

of itself relieve anyone of responsibility

for compliance with the EAR.

(a) Export transactions. The U.S.

principal party in interest is the

exporter, except in certain routed

transactions. The exporter must

determine licensing authority (License,

License Exception, or NLR), and obtain

the appropriate license or other

authorization. The exporter may hire

forwarding or other agents to perform

various tasks, but doing so does not

necessarily relieve the exporter of

compliance responsibilities.

(b) Routed export transactions. All

provisions of the EAR, including the

end-use and end-user controls found in

part 744 of the EAR, and the General

Prohibitions found in part 736 of the

EAR, apply to routed export

transactions. The U.S. principal party in

interest is the exporter and must

determine licensing authority (License,

License Exception, or NLR), and obtain

the appropriate license or other

authorization, unless the U.S. principal

party in interest obtains from the foreign

principal party in interest a writing

wherein the foreign principal party in

interest expressly assumes

responsibility for determining licensing

requirements and obtaining license

authority, making the U.S. agent of the

foreign principal party in interest the

exporter for EAR purposes. One writing

may cover multiple transactions

between the same principals. See

§ 748.4(a)(3) of the EAR.

Note to paragraph (b): For statistical

purposes, the Foreign Trade Statistics

Regulations (15 CFR part 30) have a different

definition of ‘‘exporter’’ from the Export

Administration Regulations. Under the FTSR

the ‘‘exporter’’ will always be the U.S.

principal party in interest. For purposes of

licensing responsibility under the EAR, the

U.S. agent of the foreign principal party in

interest may be the ‘‘exporter’’ in a routed

transaction.

(c) Information sharing requirements.

In routed export transactions where the

foreign principal party in interest

assumes responsibility for determining

and obtaining licensing authority, the

U.S. principal party in interest must,

upon request, provide the foreign

principal party in interest and its

forwarding or other agent with the

correct Export Control Classification

Number (ECCN), or with sufficient

technical information to determine

classification. In addition, the U.S.

principal party in interest must provide

the foreign principal party in interest or

the foreign principal’s agent any

information that it knows will affect the

determination of license authority, see

§ 758.1(g) of the EAR.

(d) Power of attorney or other written

authorization. In routed export

transactions, a forwarding or other agent

that represents the foreign principal

party in interest, or who applies for a

license on behalf of the foreign principal

party in interest, must obtain a power of

attorney or other written authorization

from the foreign principal party in

interest to act on its behalf. See

§ 748.4(b)(2) and § 758.1(h) of the EAR.

§ 758.4 Use of export license.

(a) License valid for shipment from

any port. An export license issued by

BXA authorizes exports from any port of

export in the United States unless the

license states otherwise. Items that leave

the United States at one port, cross

adjacent foreign territory, and reenter

the United States at another port before

being exported to a foreign country, are

treated as exports from the last U.S. port

of export.

(b) Shipments against expiring

license. Any item requiring a license

that has not departed from the final U.S.

port of export by midnight of the

expiration date on an export license

may not be exported under that license

unless the shipment meets the

requirements of paragraphs (b)(1) or (2)

of this section.

(1) BXA grants an extension; or

(2) Prior to midnight on the date of

expiration on the license, the items:

(i) Were laden aboard the vessel;

(ii) Were located on a pier ready for

loading and not for storage, and were

booked for a vessel that was at the pier

ready for loading; or

(iii) The vessel was expected to be at

the pier for loading before the license

expired, but exceptional and unforseen

circumstances delayed it, and BXA or

the U.S. Customs Service makes a

judgment that undue hardship would

result if a license extension were

required.

(c) Reshipment of undelivered items.

If the consignee does not receive an

export made under a license because the

carrier failed to deliver it, the exporter

may reship the same or an identical

item, subject to the same limitations as

to quantity and value as described on

the license, to the same consignee and

destination under the same license. If an

item is to be reshipped to any person

other than the original consignee, the

shipment is considered a new export

and requires a new license. Before

reshipping, satisfactory evidence of the

original export and of the delivery

failure, together with a satisfactory

explanation of the delivery failure, must

be submitted by the exporter to the

Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations 42573

following address: Operations Division,

Bureau of Export Administration, U.S.

Department of Commerce, Room 2705,

14th Street & Pennsylvania Avenue,

NW., Washington, DC 20230.

§ 758.5 Conformity of documents and

unloading of items.

(a) Purpose. The purpose of this

section is to prevent items licensed for

export from being diverted while in

transit or thereafter. It also sets forth the

duties of the parties when the items are

unloaded in a country other than that of

the ultimate consignee as stated on the

export license.

(b) Conformity of documents. When a

license is issued by BXA, the

information entered on related export

control documents (e.g., the SED or AES

record, bill of lading or air waybill)

must be consistent with the license.

(c) Issuance of the bill of lading or air

waybill. (1) Ports in the country of the

ultimate consignee. No person may

issue a bill of lading or air waybill that

provides for delivery of licensed items

to any foreign port located outside the

country of the intermediate or the

ultimate consignee named on the BXA

license and Shipper’s Export

Declaration (SED) or AES electronic

equivalent.

(2) Optional ports of unloading. (i)

Licensed items. No person may issue a

bill of lading or air waybill that provides

for delivery of licensed items to optional

ports of unloading unless all the

optional ports are within the country of

ultimate destination or are included on

the BXA license and SED or AES

electronic equivalent.

(ii) Unlicensed items. For shipments

of items that do not require a license,

the exporter may designate optional

ports of unloading on the SED or AES

electronic equivalent and other export

control documents, so long as the

optional ports are in countries to which

the items could also have been exported

without a license. See also 15 CFR

30.7(h) of the FTSR.

(d) Delivery of items. No person may

deliver items to any country other than

the country of the intermediate or

ultimate consignee named on the BXA

license and SED or AES record without

prior written authorization from BXA,

except for reasons beyond the control of

the carrier (such as acts of God, perils

of the sea, damage to the carrier, strikes,

war, political disturbances or

insurrection).

(e) Procedures for unscheduled

unloading. (1) Unloading in country

where no license is required. When

items are unloaded in a country to

which the items could be exported

without a license issued by BXA, no

notification to BXA is required.

However, any persons disposing of the

items must continue to comply with the

terms and conditions of any License

Exception, and with any other relevant

provisions of the EAR.

(2) Unloading in a country where a

license is required. (i) When items are

unloaded in a country to which the

items would require a BXA license, no

person may effect delivery or entry of

the items into the commerce of the

country where unloaded without prior

written approval from BXA. The carrier,

in ensuring that the items do not enter

the commerce of the country, may have

to place the items in custody, or under

bond or other guaranty. In addition, the

carrier must inform the exporter and

BXA of the unscheduled unloading in a

time frame that will enable the exporter

to submit its report within 10 days from

the date of unscheduled unloading. The

exporter must within 10 days of the

unscheduled unloading report the facts

to and request authorization for

disposition from BXA using either: mail,

fax, or E-mail. The report to BXA must

include:

(A) A copy of the manifest of the

diverted cargo;

(B) Identification of the place of

unloading;

(C) Statement that explains why the

unloading was necessary; and

(D) A proposal for disposition of the

items and a request for authorization for

such disposition from BXA.

(ii) Contact information. U.S.

Department of Commerce, Bureau of

Export Administration, Office of

Exporter Services, Room 1093, 14th and

Pennsylvania Avenue, NW, Washington,

DC 20230; phone number 202–482–

0436; facsimile number 202–482–3322;

and E-Mail address:

RPD@BXA.DOC.GOV.

§ 758.6 Destination control statement.

The Destination Control Statement

(DCS) must be entered on the invoice

and on the bill of lading, air waybill, or

other export control document that

accompanies the shipment from its

point of origin in the United States to

the ultimate consignee or end-user

abroad. The person responsible for

preparation of those documents is

responsible for entry of the DCS. The

DCS is required for all exports from the

United States of items on the Commerce

Control List that are not classified as

EAR99, unless the export may be made

under License Exception BAG or GFT

(see part 740 of the EAR). At a

minimum, the DCS must state: ‘‘These

commodities, technology or software

were exported from the United States in

accordance with the Export

Administration Regulations. Diversion

contrary to U.S. law is prohibited.’’

PART 762—[AMENDED]

17. Section 762.2 is amended by:

a. Revising the citation ‘‘§ 758.1(b)(3)’’

to read ‘‘§ 758.1(h)’’ in paragraph

(b)(29);

b. Revising paragraphs (b)(15), (b)(30),

(b)(39), and (b)(40); and

c. Adding a new paragraph (b)(41) to

read as follows:

§ 762.2 Records to be retained.

* * * * *

(b) * * *

(15) § 750.7, Issuance of license and

acknowledgment of conditions;

* * * * *

(30) § 758.1 and § 758.2, Shipper’s

Export Declaration or Automated Export

System record;

* * * * *

(39) § 745.1, Annual reports;

(40) § 745.2, End-use certificates; and

(41) § 758.2(c), Assumption writing.

§ 762.7 [Amended]

18. Section 762.7 is amended by

revising the phrase in paragraph (a)

‘‘subpoenas for books, records, and

other writings.’’ to read ‘‘subpoenas

requiring persons to appear and testify,

or produce books, records, and other

writings.’’.

PART 772—[AMENDED]

19. Part 772 is amended by:

a. Revising the definitions of

‘‘Applicant’’ , ‘‘Exporter’’, ‘‘Forwarding

agent’’, ‘‘Intermediate consignee’’,

‘‘Purchaser’’, and ‘‘Ultimate Consignee’’;

b. Revising the phrase ‘‘Shipper’s

Export Declaration (SED)’’ in the

definition for ‘‘Export control

document’’ to read ‘‘Shipper’s Export

Declaration (SED) or Automated Export

System (AES) record’’;

c. Removing the definition for ‘‘U.S.

exporter’’; and

d. Adding definitions for ‘‘AES’’,

‘‘Automated Export System (AES)’’,

‘‘End-user’’, ‘‘Order Party’’, ‘‘Other party

authorized to receive license’’,

‘‘Principal parties in interest’’, and

‘‘Routed export transaction’’ in

alphabetic order, to read as follows:

PART 772—DEFINITION OF TERMS

* * * * *

AES. See ‘‘Automated Export

System.’’

* * * * *

Applicant. The person who applies

for an export or reexport license, and

who has the authority of a principal

party in interest to determine and

42574 Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations

control the export or reexport of items.

See § 748.4 of the EAR and definition

for ‘‘exporter’’ in this part of the EAR.

* * * * *

Automated Export System (AES). AES

is a nationwide system operational at all

ports and for all methods of

transportation through which export

shipment data required by multiple

agencies is filed electronically to

Customs, using the efficiencies of

Electronic Data Interchange (EDI). AES

provides an alternative to filing paper

Shipper’s Export Declarations (SEDs), so

that export information is collected

electronically and edited immediately.

For more information about AES, visit

the Bureau of Census website at: http:/

/www.customs.ustreas.gov/impoexpo/

abaesint.htm

* * * * *

End-user. The person abroad that

receives and ultimately uses the

exported or reexported items. The enduser is not a forwarding agent or

intermediary, but may be the purchaser

or ultimate consignee.

* * * * *

Exporter. The person in the United

States who has the authority of a

principal party in interest to determine

and control the sending of items out of

the United States. Note that the Foreign

Trade Statistics Regulations have a

different definition for the term

‘‘exporter’’. Under the FTSR, the

‘‘exporter’’ is the U.S. principal party in

interest (see Foreign Trade Statistics

Regulations title 15 part 30).

* * * * *

Forwarding agent. The person in the

United States who is authorized by a

principal party in interest to perform the

services required to facilitate the export

of the items from the United States. This

may include air couriers or carriers. In

routed export transactions, the

forwarding agent and the exporter may

be the same for compliance purposes

under the EAR.

* * * * *

Intermediate consignee. The person

that acts as an agent for a principal party

in interest for the purpose of effecting

delivery of items to the ultimate

consignee. The intermediate consignee

may be a bank, forwarding agent, or

other person who acts as an agent for a

principal party in interest.

* * * * *

Order Party. The person in the United

States who conducted the direct

negotiations or correspondence with the

foreign purchaser or ultimate consignee

and who, as a result of these

negotiations, received the order from the

foreign purchaser or ultimate consignee.

* * * * *

Other party authorized to receive

license. The person authorized by the

applicant to receive the license. If a

person and address is listed in Block 15

of the BXA–748P Multipurpose

Application Form, the Bureau of Export

Administration will send the license to

that person instead of the applicant.

Designation of another party to receive

the license does not alter the

responsibilities of the applicant,

licensee or exporter.

* * * * *

Principal parties in interest. Those

persons in a transaction that receive the

primary benefit, monetary or otherwise,

of the transaction. Generally, the

principals in a transaction are the seller

and the buyer. In most cases, the

forwarding or other agent is not a

principal party in interest.

* * * * *

Purchaser. The person abroad who

has entered into a transaction to

purchase an item for delivery to the

ultimate consignee. In most cases, the

purchaser is not a bank, forwarding

agent, or intermediary. The purchaser

and ultimate consignee may be the same

entity.

* * * * *

Routed export transaction. A

transaction where the foreign principal

party in interest authorizes a U.S.

forwarding or other agent to facilitate

export of items from the United States.

* * * * *

Ultimate consignee. The principal

party in interest located abroad who

receives the exported or reexported

items. The ultimate consignee is not a

forwarding agent or other intermediary,

but may be the end-user.

* * * * *

PART 774—[AMENDED]

Supplement No. 1 to Part 774—The

Commerce Control List

20. Supplement No. 1 to part 774 (the

Commerce Control List), Category 1—

Materials, Chemicals,

‘‘Microorganisms,’’ and ‘‘Toxins’’, is

amended by revising the License

Requirements section of ECCN 1C355, to

read as follows:

1C355 Chemical Weapons Convention

(CWC) Schedule 2 and 3 Chemicals and

Families of Chemicals, Not Controlled

by ECCN 1C350 or by the Department

of State Under the ITAR

License Requirements

Reason for Control: CW

Control(s) 

CW applies to entire entry. A license

is required for CW reasons only to CWC

non-States Parties (destinations not

listed in Supplement No. 2 to part 745),

unless an End-Use Certificate is

obtained by the exporter (see § 742.18 of

the EAR). See § 745.2 of the EAR for

End-Use Certificate requirements, and

the License Requirements Notes of this

entry. The Commerce Country Chart is

not designed to determine licensing

requirements for items controlled for

CW reasons.

License Requirements Notes:

1. Chemicals listed in this entry may

be shipped NLR (No License Required)

when destined to most CWC States

Parties (countries listed in Supplement

No. 2 to part 745). Also see License

Requirement Note 3.

2. Chemicals listed in this entry may

be shipped NLR when destined to most

non-States Parties (destinations not

listed in Supplement No. 2 to part 745)

if supported by an End-Use Certificate

described by § 745.2 of the EAR and if

the ECCN is indicated on the Shipper’s

Export Declaration in the appropriate

space as provided in § 758.1 of the EAR.

Chemicals listed in this entry require a

license when exported to non-States

Parties if the export is not supported by

an End-Use Certificate described by

§ 745.2 of the EAR.

3. Chemicals listed in this entry may

not be shipped NLR if restrictions of

other sections of the EAR apply (e.g., see

the end-use and end-user restrictions of

part 744 of the EAR and the restrictions

that apply to embargoed countries in

part 746 of the EAR).

4. MIXTURES: Mixtures controlled by

this entry that contain certain

concentrations of precursor and

intermediate chemicals are subject to

the following requirements:

a. Mixtures are controlled under this

entry when containing at least one of

the chemicals controlled under 1C355.a

when the chemical constitutes more

than 10 percent of the weight of the

mixture.

b. Mixtures are controlled under this

entry when containing at least one of

the chemicals controlled under 1C355.b

when the chemical constitutes more

than 25 percent of the weight of the

mixture.

c. Mixtures containing chemicals

identified in this entry are not

controlled by ECCN 1C355 when the

controlled chemical is a normal

ingredient in consumer goods packaged

for retail sale for personal use. Such

consumer goods are classified as EAR99.

Note to mixtures: Calculation of

concentrations.

Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations 42575

a. Exclusion. No chemical may be

added to the mixture (solution) for the

sole purpose of circumventing the

Export Administration Regulations;

b. Absolute Weight Calculation. When

calculating the percentage, by weight, of

components in a chemical mixture,

include all components of the mixture,

including those that act as solvents;

c. Example.

11% chemical listed in 1C355.a

39% chemical not listed in 1C355.a

50% Solvent

100% Mixture

11/100 = 11% chemical listed in

1C355.a

In this example, the mixture is

controlled under this entry because a

chemical listed in 1C355.a. constitutes

more than 10 percent of the weight of

the mixture.

5. COMPOUNDS. Compounds created

with any chemicals identified in this

ECCN 1C355 may be shipped NLR,

unless those compounds are also

identified in this entry.

Technical Notes: For purposes of this

entry, a ‘‘mixture’’ is defined as a solid,

liquid or gaseous product made up of two or

more components that do not react together

under normal storage conditions.

* * * * *

Dated: June 28, 2000.

R. Roger Majak,

Assistant Secretary for Export

Administration.

[FR Doc. 00–16894 Filed 7–6–00; 8:45 am]

BILLING CODE 3510–33–P