2012 REPORT ON FOREIGN POLICY-BASED EXPORT CONTROLS 

 

U.S. Department of Commerce 

Bureau of Industry and Security 

 Table of Contents 

Number Page 

Chapter 1 Introduction 1 

Chapter 2 Crime Control/Human Rights 13 

Chapter 3 Regional Stability 24 

Chapter 4 Anti-Terrorism Controls 36 

Chapter 5 Embargoes, Sanctions, and Other Special Controls 43 

Chapter 6 Toxic Chemicals, Chemical Precursors and Associated 

 Equipment, Technology, and Software 67 

Chapter 7 Biological Agents and Associated Equipment and Technology 76 

Chapter 8 Missile Technology Controls 83 

Chapter 9 Encryption 90 

Chapter 10 Significant It 94 

Chapter 11 Nuclear Nonproliferation 98 

Chapter 12 Surreptitious Listening 102 

Chapter 13 Entity List 106 

Appendix I Summary of Public Comments on Foreign Policy Export Controls 114 

Appendix II Multilateral Export Control Regimes in 2011 116 

Appendix III Selected Rules Published by the Department of Commerce in 2011 118 
CHAPTER 1 

Introduction 

Export controls maintained for foreign policy purposes require annual extension according to the 

provisions of Section 6 of the Export Administration Act of 1979, as amended1 (the EAA). 

Section 6(f) of the EAA requires the President to submit a report to Congress to extend the 

controls. Authority to submit the report has been delegated to the Secretary of Commerce.2 

Section 6(f) of the EAA requires the report to specify the determinations or considerations of the 

Secretary (as delegated by the President) with respect to the criteria set forth in Section 6(b) of 

the EAA established for imposing, extending, or expanding foreign policy controls. This report 

complies with all of the requirements set out in the EAA for extending, amending, or imposing 

foreign policy controls. 

The Department of Commerce is acting under the authority conferred by Executive Order 13222 

of August 17, 2001 (Executive Order), as extended most recently by the Notice of August 12, 

2011 (76 FR 50661 (August 16, 2011)). In that Executive Order, the President, by reason of the 

expiration of the EAA, invoked his authority, including authority under the International 

Emergency Economic Powers Act (IEEPA), to continue in effect the system of controls that had 

been maintained under the EAA. Under a policy of conforming actions under the Executive 

Order to those under the EAA, the Department of Commerce, insofar as appropriate, is following 

the provisions of Section 6 of the EAA with regard to extending foreign policy controls. 

With this report, all foreign policy export controls discussed herein are hereby extended for the 

period from January 21, 2012, to January 20, 2013. The Bureau of Industry and Security (BIS) 

of the Department of Commerce is taking this action pursuant to the recommendation of the 

Secretary of State. As further authorized by the EAA, foreign policy export controls remain in 

effect for replacement parts and for parts contained in goods subject to such controls. The 

controls administered in accordance with procedures established pursuant to Section 309(c) of 

the Nuclear Nonproliferation Act of 1978 similarly remain in effect. 

Each Chapter of this report describes a particular category of foreign policy controls and 

delineates modifications that have taken place over the past year. Although this report covers the 

2011 calendar year, most of the statistical data presented in the report are based on fiscal year 

2011 export licensing statistics, unless otherwise noted. BIS generates this data from the 

computer system it uses to process and track export license activity. Due to the tabulating 

procedures used by the system in accounting for occasional license applications that list more 

1

 50 U.S.C. app. §§ 2401-2420 (2000). 

2

 Executive Order 12002 (July 7, 1977) (as amended). 
than one country or destination, the system has certain limitations as a means of gathering data. 

In addition, BIS bases the data in this report on values contained in issued export licenses. Such 

values may not represent the values of actual shipments made against those licenses, because in 

some cases an exporter may ship only a portion of the value of an approved license or may not 

ship at all. 

Certain goods, technology, and software described in this report also may require a license for 

national security purposes for export to certain destinations in accordance with Section 5 of the 

EAA. 

Part I: Highlights in the 2011 Report 

Crime Control/Human Rights 

On April 29, 2011, the Under Secretary of Commerce for Industry and Security, pursuant to the 

authority delegated to him under section 6(n)(2) of the EAA, designated Argentina, 

Austria, Finland, Ireland, South Korea, Sweden, and Switzerland as eligible destinations for 

export and reexport of certain items controlled for crime control (CC), without a license under 

License Exception Strategic Trade Authorization. Eligible items do not include equipment for 

the execution of human beings, law enforcement restraint devices, specially designed 

implements of torture, discharge type arms (stun guns, shock batons, etc.), or the technology to 

make law enforcement restraint devices and discharge type arms (ECCNs 0A981, 0A982, 

0A983, 0A985 or 0E982). 

Regional Stability 

The Export Control Reform (ECR) initiative that was begun during the reporting period 

proposes a new regulatory construct for the transfer of items on the United States Munitions List 

(USML) to the Commerce Control List (CCL) that, in accordance with section 38(f) of the Arms 

Export Control Act (AECA)(22 U.S.C. 2778(f)(1)), the President determines no longer warrant 

control under the AECA. These items would then be controlled under the EAR once the 

congressional notification requirements of section 38(f) and corresponding amendments to the 

International Traffic in Arms Regulations (ITAR) (22 CFR parts 120-130) and its USML and the 

EAR and its CCL are completed. On July 15, 2011, the Department of Commerce published a 

proposed rule in the Federal Register (76 FR 41958) that would implement these structural 

changes to the EAR for the items that are moved from the United States Munitions List (USML) 

to the Commerce Control List (CCL) and which will be subject to Department of Commerce 

licensing authority. Items under new ECCNs will be subject to control for Regional Stability 

(RS) and Anti-Terrorism (AT) reasons in addition to other control reasons that will be specified 

in subsequent rules. 
In addition, the following is a list of proposed rules published by BIS that propose the transfer 

certain categories of items from the USML to the CCL: 

On November 7, 2011, the Department of Commerce published a proposed rule in the Federal 

Register (76 FR 68675 Revisions to the Export Administration Regulations (EAR): 

Control of Aircraft and Related Items the President Determines No Longer Warrant Control 

would add a number of items 

formerly controlled on the USML to the CCL and control them for Regional Security (RS) and 

Anti-Terrorism (AT) reasons in addition to National Security (NS) reasons. Some items would 

also be controlled for Missile Technology (MT) reasons. NS controls are not the subject of this 

report. Please refer to Chapter 4 for a description of AT controls and Chapter 8 for a description 

of MT controls. 

On December 6, 2011, the Department of Commerce published a proposed rule in the Federal 

Register (76 FR 76072 Revisions to the Export Administration Regulations (EAR): 

Control of Gas Turbine Engines and Related Items the President Determines No Longer Warrant 

would add a number of 

items formerly controlled on the USML to the CCL. These items would be controlled for RS, 

NS and AT. NS controls are not the subject of this report. Please refer to Chapter 4 for a 

discussion of AT controls. 

On December 6, 2011, the Department of Commerce published a proposed rule in the Federal 

Register (76 FR 76085 Revisions to the Export Administration Regulations (EAR): 

Control of Military Vehicles and Related Items that the President Determines No Longer 

would add a number of items 

formerly controlled on the USML to the CCL. These items would be controlled for RS, NS and 

AT. NS controls are not the subject of this report. Please refer to Chapter 4 for a discussion of 

AT controls. 

On December 23, 2011, the Department of Commerce published a proposed rule in the Federal 

Register (76 FR 80282) entitled 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) This rule would add a number of 

items formerly controlled on the USML to the CCL. These items would be controlled for RS, 

NS and AT. NS controls are not the subject of this report. Please refer to Chapter 4 for a 

discussion of AT controls. 

On December 23, 2011, the Department of Commerce published a proposed rule in the Federal 

Register (76 FR 80291) entitled Revisions to the Export Administration Regulations (EAR): 

Controls Applicable to Submersible Vessels, Oceanographic Equipment and Related Articles 

that the President Determines No Longer Warrant Control under the United States Munitions 

List This rule would add a number of items formerly controlled on the USML to the CCL. 
These items would be controlled for RS, NS and AT. NS controls are not the subject of this 

report. Please refer to Chapter 4 for a discussion of AT controls. 

In addition to the ECR related proposed rules listed above, the Department of Commerce 

published, a proposed rule in the Federal Register (77 FR 1017) on January 9, 2012 entitled 

Export and Reexport License Requirements for Certain Microwave and Millimeter Wave 

electron mobility transistors and monolithic microwave integrated circuits. 

Anti-Terrorism Controls 

On July 13, 2011, the Department of Commerce published a final rule in the Federal Register

recognition of the 

Sudan to the Commerce Country Chart and included it in Country Group B, which rendered the 

destination eligible for certain export and reexport License Exceptions. The AT controls that 

Sudan. A license is required for the export or reexport to South Sudan of items subject to the 

EAR that are controlled unilaterally for Regional Stability and Crime Control reasons, and items 

controlled by the multilateral export control regimes (Australia Group, Wassenaar Arrangement, 

Chemical/Biological Weapons Conventions, Nuclear Suppliers Group, and Missile Technology 

Control Regime). 

Embargoes, Sanctions, and Other Special Controls 

On December 12, 2011, the Department of Commerce published a final rule in the Federal 

Register (76 FR 77115) amending the EAR to move the substantive provisions of the 

comprehensive sanctions against Syria from General Order No. 2 in Supplement No. 1 to Part 

736 to a revised Section 746.9. Part 746 of the EAR addresses comprehensive sanctions and 

other special controls and is an appropriate place to include these Syria sanctions provisions. 

This move will enhance public awareness and understanding of comprehensive U.S. sanctions 

against Syria under the EAR. Existing licensing requirements and policies remain unchanged. 

Toxic Chemicals, Chemical Precursors, and Associated Equipment, Technology, and 

Software 

On April 20, 2011, the Department of Commerce published a final rule in the Federal Register

(76 FR 22017) to implement the understandings reached at the June 2010 plenary meeting of the 

Australia Group (AG). This final rule amended Export Control Classification Number (ECCN) 

2B350 (Chemical manufacturing facilities and equipment) on the CCL to clarify the meaning of 
which certain chemical manufacturing equipment is made.

Biological Agents and Associated Equipment and Technology 

On April 20, 2011, 

76 FR 22017) the understandings reached at the June 2010 

plenary meeting of the Australia Group (AG). Specifically, this rule revised the listing for 

so revised the 

Missile Technology Controls 

The annual plenary for the Missile Technology Control Regime (MTCR) was held in April 2011 

in Buenos Aires, Argentina. At the Plenary, the MTCR partners discussed the direct relevance of 

UN Security Council Resolutions (UNSCRs) 1874 (North Korea) and 1929 (Iran) to MTCR 

export controls. The MTCR partners discussed the importance for all States to take all necessary 

steps at a national level to fully and effectively implement the missile-relevant provisions of 

these resolutions. The growing interest by many states in cooperating with or possibly adhering 

to the MTCR was discussed, and the Plenary supported the 

non-members. 

The MTCR also held a Technical Experts Meeting (TEM) in conjunction with the Plenary to 

discuss proposed changes to the MTCR control list. Changes adopted at the plenary included 

adding controls for the production facilities specially designed for rocket systems and unmanned 
aerial vehicle systems capable of a range equal to or greater than 300 km; and clarifying the 

coverage of control in the General Technology Note. No changes in the EAR resulted from this 

update to the MTCR Annex. 

The MTCR held an intercessional Technical Experts Meeting (TEM) in Paris on November 14-

18, 2011, to discuss additional changes to the MTCR control list. 

The annual Reinforced Points of Contact (RPOC) meeting for the MTCR was held on December 

6-7, 2011 in Paris. 

Entity List 

On January 25, 2011, BIS published a final rule in the Federal Register (76 FR 4228) that 

implemented changes to the Entity List based on the November 2010 bilateral understanding 

between the United States and India. Under the agreement, the President and Indian Prime 

Minister Singh agreed to take mutual steps related to export controls, which included the 

-related entities from the Entity List. In the rule, nine 

Indian entities were removed from the Entity List. 

On April 18, 2011, BIS published a final rule in the Federal Register (76 FR 21628) that 

implemented changes to the Entity List based on the End-u ERC) 

annual review of listed entities in Iran and the United Arab Emirates (UAE). The rule removed 

one person, located in the UAE, and modified four entries by clarifying names, adding addresses, 

and/or adding aliases for one Iranian person and three UAE persons. This rule also removed one 

person located in the United Kingdom (UK

for removal, and a review of information provided in the removal request by the ERC. In 

addition, the rule clarified an existing 

China (PRC) to accurately reflect the relationship between two aliases listed under the entry. 

parts 730 and 744 of the EAR. 

On May 24, 2011, BIS published a final rule in the Federal Register (76 FR 29998) that 

implemented changes to the Entity List based on a policy decision in recognition of the bilateral 

partnership between the United States and Russia. The rule implemented a decision by the 

Departments represented on the ERC to remove the listing of the Federal Atomic Power of 

Russia (Rusatom), now known as the Russian State Corporation of Atomic Energy (Rosatom), 

from the Entity List. The ERC also modified two entries to clarify that two Rosatom 

components -- the All-Russian Scientific Research Institute of Technical Physics (VNIITF) and 

the All-Russian Scientific Research Institute of Experimental Physics (VNIIEF) -- remained on 

the Entity List. 
On June 28, 2011, BIS published a final rule in the Federal Register (76 FR 37632) that added 

eight persons to the Entity List under Section 744.11 of the EAR. The ERC added these persons 

based on evidence that they engaged in actions that could enhance the military capability of Iran, 

a country designated by the U.S. Secretary of State as having repeatedly provided support for 

acts of international terrorism, and because their overall conduct posed a risk of ongoing EAR 

violations. For all eight persons, the ERC specified a license requirement for all items subject to 

the EAR and established a license application review policy of a presumption of denial. The 

persons added are located in France (three entries), Iran (three entries), and the UAE (two 

entries). 

On July 25, 2011, BIS published a final rule in the Federal Register (76 FR 44259) that added 

six persons to the Entity List under Section 744.11 of the EAR. The ERC added these persons 

based on evidence that they engaged in actions that could enhance the military capability of Iran, 

and because their overall conduct posed a risk of ongoing EAR violations. The ERC determined 

that six persons purchased electronic components from U.S. firms and then resold the 

components to companies in Iran without the required U.S. export license. These same 

components were later found in Iraq in unexploded improvised explosive devices. For all six 

entities, the ERC specified a license requirement for all items subject to the EAR and established 

a license application review policy of a presumption of denial. The persons added are located in 

Hong Kong (two entries) and Lebanon (four entries). 

On August 15, 2011, BIS published a final rule in the Federal Register (76 FR 50407) that added 

fifteen persons under twenty entries to the Entity List, based on Section 744.11 of the EAR.3

 

The ERC added these fifteen persons to the Entity List based on evidence that they were 

involved in activities contrary to U.S. national security or foreign policy interests, specifically 

the leasing, transfer, and operation of commercial aircraft subject to the EAR to Syria and Iran 

without the requisite licenses. 

the license requirements for exports and reexports to Syria pursuant to General Order No. 2 of 

Supplement No. 1 to part 736 of the EAR and violated the sanctions against Iran pursuant to the 

Iran Transactions Regulations (31 CFR Part 560). Both Syria and Iran have been designated by 

the Secretary of State as countries that have repeatedly provided support for acts of international 

terrorism. For all fifteen persons, the ERC specified a license requirement for all items subject to 

the EAR and established a license application review policy of a presumption of denial. The 

persons added are located in Cyprus (one entry), Greece (three entries), Iran (four entries), Syria 

(two entries), Ukraine (five entries), and the United Kingdom (five entries). 

The August 

annual review of the Entity List for listed entities in Syria. The rule modified seven entries by 

clarifying names, adding addresses, and/or adding aliases to the entries of seven Syrian persons. 

3

 The five additional entries account for the five alternate addresses of persons in multiple destinations. 
Lastly, the rule modified an existing entry located in the PRC in order to clarify the relationship 

of a listed alias to the existing entry and to provide additional information on the alias. 

On October 12, 2011, BIS published a final rule in the Federal Register (76 FR 63184) that 

added two persons to the Entity List based on evidence that they were involved in activities 

contrary to U.S. national security and foreign policy interests (Section 744.11 of the EAR). The 

ERC added the two persons based on evidence that they were complicit in violations of the EAR 

and Hong Kong export control requirements for shipments to the PRC. For both entities, the 

ERC specified a license requirement for all items subject to the EAR and established a license 

review policy of a presumption of denial. The persons added are both located in Hong Kong. 

The October 12, 2011 rule also removed one Hong Kong person from the Entity List on the basis 

ted entities in Hong Kong. The rule also 

removed three persons, located in Hong Kong and New Zealand, from the Entity List. These 

persons were removed as a result of their submitted requests for removal submitted and a review 

of information provided by the ERC. 

On October 31, 2011, BIS published a final rule in the Federal Register (76 FR 67059) that 

added fifteen persons under twenty-five entries to the Entity List, based on section 744.11 of the 

EAR. 4 The ERC added eight of the persons based on evidence that they engaged in actions that 

could enhance the military capability of Iran, a country designated by the U.S. Secretary of State 

as having repeatedly provided support for acts of international terrorism, and of militant 

insurgents operating in Iraq against the U.S. military, and because their overall conduct posed a 

risk of ongoing EAR violations. Specifically, these persons participated in a complex and 

layered network to procure items subject to the EAR and/or the International Traffic in Arms 

Regulations (ITAR) for shipment to Iran and/or the PRC without the requisite licenses. The 

remaining seven persons were added based on evidence that they engaged in actions facilitating 

the activities of the procurement network described above. For all fifteen persons, the ERC 

specified a license requirement for all items subject to the EAR and established a license 

application review policy of a presumption of denial. The persons added are located in Hong 

Kong (seven entries), Iran (three entries), the PRC (five entries), and Singapore (ten entries). 

On November 21, 2011, BIS published a final rule in the Federal Register (76 FR 71867) that 

added fourteen persons under twenty-one entries to the Entity List, based on evidence that they 

were involved in activities contrary to U.S. national security and foreign policy interests (section 

744.11 of the EAR). 5

 The ERC added thirteen persons in Afghanistan and Pakistan based on 

evidence that they provided material support to persons engaged against U.S. and Coalition 

4 The ten additional entries account for the ten alternate addresses of persons in multiple destinations. 5 The seven additional entries account for the seven alternate addresses of persons in multiple 

destinations. 
forces in Afghanistan. In addition, the ERC added one person in the PRC (with an alternate 

address in Hong Kong) based on evidence that it sought to obtain items subject to the EAR 

without the required authorizations. For all fourteen persons, the ERC specified a license 

requirement for all items subject to the EAR and established a license application review policy 

of a presumption of denial. The persons added are located in Afghanistan (eleven entries), Hong 

Kong (one entry), Pakistan (eight entries), and the PRC (one entry). 

The November 21, 2011 rule also implemented changes to the Entity List on the basis of the 

modified two 

entries by adding addresses to the entries of two Canadian persons. 

On December 16, 2011, BIS published a final rule in the Federal Register (76 FR 78146) that 

added two persons to the Entity List, based on section 744.11 of the EAR. The ERC added these 

persons based on evidence that they were involved in the unauthorized transfer of U.S.-origin 

internet filtering equipment to Syria without the licenses required under the EAR, for possible 

use by the Syrian Telecommunications Establishment to -

democracy activists. For both persons, the ERC specified a license requirement for all items 

subject to the EAR and established a license application review policy of a presumption of 

denial. The persons added are located in the United Arab Emirates. 

The December 16, 2011 rule also implemented changes to the Entity List on the basis of the 

The rule removed four persons (two located in Singapore and two located in Taiwan), and 

modified one entry by adding an address to the entry of one Malaysian person. 

Part II: Format of Analysis Used in Chapters 2-13 of this Report 

Chapters 2-13 of this report describe the various export control programs maintained by the 

Department of Commerce for foreign policy reasons. Each of these programs is extended for 

another year. The analysis required for such an extension is provided in each Chapter in the 

format described below. 

Export Control Program Description and Licensing Policy 

This section defines the export controls maintained for a particular foreign policy purpose that 

were imposed or extended for the year 2011. Each of the following Chapters describes the 

licensing requirements and policy applicable to a particular control. 
Analysis of Controls as Required by Section 6(f) of the Act 

Section 6(f)(2) of the EAA requires that the Secretary of Commerce describe the purpose of the 

controls and consider or determine whether to impose, expand, or extend foreign policy controls 

based on specified criteria, including consultation efforts, economic impact, alternative means, 

are based on the following required criteria: 

A. The Purpose of the Controls 

This section provides the foreign policy purpose and rationale for each particular control. 

B. Considerations and/or Determinations of the Secretary of Commerce 

following criteria: 

1. Probability of Achieving the Intended Foreign Policy Purpose. Whether such controls 

are likely to achieve the intended foreign policy purpose in light of other factors, including the 

availability from other countries of the goods or technology subject to control, and whether the 

foreign policy purpose can be achieved through negotiations or other alternative means. 

2. Compatibility with Foreign Policy Objectives. Whether the controls are compatible with 

the foreign policy objectives of the United States and with overall U.S. policy toward the country 

or the proscribed end use subject to the controls. 

3. Reaction of Other Countries. Whether the reaction of other countries to the extension of 

such export controls by the United States is likely to render the controls ineffective in achieving 

the intended foreign policy purpose or to be counterproductive to other U.S. foreign policy 

interests. 

4. Economic Impact on United States Industry. Whether the effect of the controls on the 

export performance of the United States, its competitive position in the international economy, 

the international reputation of the United States as a reliable supplier of goods and technology, or 

the economic well-being of individual U.S. companies exceeds the benefit to U.S. foreign policy 

objectives.6

 

6

 Limitations exist when assessing the economic impact of certain controls because of the unavailability of data or 

because of the influence of other factors, e.g., currency values, foreign economic activity, or foreign political 

regimes, which may restrict imports of U.S. products more stringently than the United States restricts exports. 
5. Effective Enforcement of Controls. Whether the United States has the ability to enforce 

the controls. Some enforcement issues are common to all foreign policy controls.7 Other 

enforcement issues are associated with only one or a few controls. Each control has been 

assessed to determine if it has presented, or is expected to present, an uncharacteristic 

enforcement problem. 

C. Consultation with Industry 

This section discusses the results of consultations with industry leading to the extension or 

imposition of controls. In a September 1, 2011, Federal Register notice (76 FR 54426), the 

Department of Commerce solicited comments from industry on the effectiveness of U.S. foreign 

policy-based export controls. In addition, comments were solicited from the public via the BIS 

website. 

on an ongoing basis and are not specific to this report. The comment period closed on October 3, 

2011, and two comments were received. A detailed review of public comments can be found in 

Appendix I. 

D. Consultation with Other Countries 

This section reflects consultations on the controls with countries that cooperate with the United 

States on multilateral controls and with other countries as appropriate. 

E. Alternative Means

This section specifies the nature and results of any alternative means attempted to accomplish the 

foreign policy purpose, or the reasons for extending the controls without attempting any such 

alternative means. 

F. Foreign Availability 

This section considers the availability from other countries of goods or technology comparable to 

those subject to the proposed export control. It also describes the nature and results of the efforts 

made pursuant to Section 6(h) of the EAA to secure the cooperation of foreign governments in 

controlling the foreign availability of such comparable goods or technology. In accordance with 

the EAA, foreign availability considerations do not apply to export controls in effect prior to 

7

 When the United States implements controls without the imposition of corresponding restrictions by other 

countries, it can be difficult to prevent reexports from third countries to the target country, to secure third-country 

cooperation in enforcement efforts, and to detect violations abroad and initiate proper enforcement action. 
June 12, 1985, to export controls maintained for human rights and Anti-Terrorism reasons, or to 

export controls in support of the international obligations of the United States. 
CHAPTER 2 

Crime Control/Human Rights 

(Sections 742.7, 742.11, 742.17)8

Export Control Program Description and Licensing Policy 

As required by Section 6(n) of the Export Administration Act of 1979, as amended (EAA), the 

United States controls the exports of crime control and detection items because of human rights 

concerns in various countries. As set forth in the EAR, the U.S. Government requires a license 

to export most crime control and detection instruments, equipment, related technology, and 

software to all destinations, except Australia, Japan, New Zealand, and members of the North 

Atlantic Treaty Organization (NATO). A license is required to export certain crime control 

items, including restraint type devices (such as handcuffs) and discharge type arms (such as stun 

guns), to all destinations except Canada. Specially designed implements of torture and 

thumbscrews, which are included in the crime control category, require a license for export to all 

destinations. In addition, the U.S. Government maintains concurrent export license requirements 

for certain crime control items in furtherance of the Inter-American Convention Against the 

Illicit Manufacturing of and Trafficking in Firearms, Ammunition, Explosives, and Other 

Related Materials. 

Summary of 2011 Changes 

On April 29, 2011, the Under Secretary of Commerce for Industry and Security, pursuant to the 

authority delegated to him under section 6(n)(2) of the EAA, designated Argentina, 

Austria, Finland, Ireland, South Korea, Sweden, and Switzerland as eligible destinations for 

export and re-export of items controlled for crime control (CC), not including equipment for the 

execution of human beings, law enforcement restraint devices, specially designed implements of 

torture, discharge type arms (stun guns, shock batons, etc.), or the technology to make law 

enforcement restraint devices and discharge type arms (ECCNs 0A981, 0A982, 0A983, 0A985 

or 0E982) without a license under License Exception Strategic Trade Authorization. 

8

 Citations following each of the foreign policy control programs refer to sections of the Export Administration 

Regulations (EAR), 15 CFR Parts 730-774, that describe the control program. 
Licensing Policy 

The U.S. Government has a general policy of denial for license applications to export crime 

control items to a country in which the government engages in a consistent pattern of gross 

violations of internationally recognized human rights. For other countries, the U.S. Government 

will consider applications for crime control items favorably, on a case-by-case basis unless there 

is civil disorder in the country or region of concern, or there is evidence that the government may 

have violated human rights and that the judicious use of export controls would be helpful in 

minimizing regional instability, deterring the development of a consistent pattern of such 

violations, or in demonstrating U.S. Government opposition to such violations. 

Crime Control/Implements of Torture 

The U.S. Government has a policy of denial for any license application to export specially 

designed implements of torture and thumbscrews. 

Following the 1989 military assault on demonstrators by the PRC government in Tiananmen 

Square, the U.S. Government imposed constraints on the export to the PRC of certain items on 

the CCL. Section 902(a)(4) of the Foreign Relations Authorization Act for Fiscal Year 1990-

1991, Public Law 101-246, suspends the issuance of licenses under Section 6(n) of the EAA for 

the export of any crime control or detection instruments or equipment to the PRC. The President 

may terminate the suspension by reporting to Congress that the PRC has made progress on 

political reform or that it is in the national interest of the United States to terminate the 

suspension. The President has not exercised his authority to terminate this suspension. 

NATO 

Certain crime control and detection instruments, equipment, related technology, and software 

may be exported to Australia, Japan, New Zealand, and members of NATO without a specific 

license, consistent with Section 6(n) of the EAA. 

Organization of American States Member Countries 

In April 1999, the Department of Commerce published a rule implementing the provisions of the 

Organization of American States (OAS) Model Regulations for the Control of the International 

Movement of Firearms. The Department of Commerce designed these regulations to harmonize 

import and export controls on the legal international movement of firearms among OAS member 

states and to establish procedures to prevent the illegal trafficking of firearms among these 

countries. 
Under these provisions, the Department of Commerce maintains foreign policy controls on 

exports of Commerce-controlled firearms, including shotguns with a barrel length of 18 inches or 

over and parts, buckshot shells, shotgun shells and parts, and optical sighting devices to all OAS 

OAS Model Regulations for the Control of the International Movement of Firearms, the U.S. 

Government requires an Import Certificate (IC) for the export to all OAS member countries of 

those items affected by the regulations. In general, the Department approves license applications 

for the export of firearms to OAS member countries if the application is supported by an IC. The 

Department has a policy of denying applications that involve end uses linked to drug trafficking, 

terrorism, international organized crime, and other criminal activities. 

Other Licensing Considerations 

The Department of State annually compiles the Country Reports on Human Rights Practices. 

The Department of State prepares these reports in accordance with Sections 116(d) and 502B(b) 

of the Foreign Assistance Act of 1961, as amended, for submission to Congress. The factual 

information presented in these reports is a significant element in dual use export licensing 

recommendations made by the Department of State. In accordance with the Foreign Assistance 

Act, there is a policy of denial for license applications to export crime control items to any 

country in which the government engages in a consistent pattern of gross violations of human 

rights. 

Applications to export crime control items to countries that are not otherwise subject to 

economic sanctions or comprehensive embargoes, but that are identified by the Department of 

State as violators of human rights, are flagged for additional scrutiny in the review process. The 

Department of State reviews all license applications for these countries on a case-by-case basis 

and makes recommendations to Commerce as it considers appropriate. Additionally, targeted 

(OFAC) are currently imposed against certain countries and individuals. 

The International Religious Freedom Act of 1998 (IRFA) calls for the President to take 

diplomatic or other appropriate action with respect to any country that engages in or tolerates 

violations of religious freedom. IRFA also provides for the imposition of economic measures or 

commensurate actions when a country has engaged in systematic, ongoing, egregious violations 

of religious freedom accompanied by flagrant denials of the rights to life, liberty, or the security 

of persons, such as torture, enforced and arbitrary disappearances, or arbitrary prolonged 

detention. For such countries, IRFA provides that the Department of Commerce, with the 

Department of State concurrence, shall restrict exports of items on the CCL for reasons of 

crime control or detection, and require export licenses for items that are being used, or are 
intended for use, directly and in significant measure, to carry out particularly severe violations of 

religious freedom. In addition, IRFA requires that countries engaging in particularly severe 

violations of religious freedom be designated as Countries of Particular Concern. On September 

13, 2011, the Secretary of State re-designated eight countries as Countries of Particular Concern: 

Burma, the PRC, Eritrea, Iran, North Korea, Saudi Arabia, Sudan, and Uzbekistan. These are 

countries where governments have engaged in or tolerated particularly severe violations of 

religious freedom over the past year. Some of these countries are already subject to economic 

sanctions or comprehensive embargoes. Applications to export crime control items to countries 

that are not otherwise subject to economic sanctions or comprehensive embargoes are flagged for 

additional scrutiny in the review process. The Department of State reviews all license 

applications for those countries on a case-by-case basis and makes recommendations to 

Commerce as appropriate. 

Analysis of Controls as Required by Section 6(f) of the Export Administration Act 

A. The Purpose of the Controls 

These controls seek to ensure that U.S.-origin crime control equipment is not exported to 

countries where governments fail to respect internationally recognized human rights or where 

civil disorder is prevalent. Denial of export license applications to such countries helps to 

prevent human rights violations and clearly signals U.S. concerns about human rights in these 

countries. The license requirements for most destinations allow for close monitoring of exports 

of certain crime control items that could be misused to commit human rights violations. Controls 

on implements of torture similarly help to ensure that such items are not exported from the 

United States. 

B. Considerations and/or Determinations of the Secretary of Commerce 

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has 

determined that these controls are likely to achieve the intended foreign policy purpose, in light 

of other factors, including availability of relevant items from other countries, and that the foreign 

policy purpose cannot fully be achieved through negotiations or other alternative means. The 

lack of complementary controls over all of these items by other producer nations limits the 

effectiveness of these controls in preventing human rights violations, though some countries 

notably those of the European Union (EU) control exports of implements of torture or of lethal 

-origin goods 

and provide important evidence of U.S. support for the principles of human rights. In addition, 

the imposition of stringent licensing requirements for crime control items enables the U.S. 

Government to monitor closely items that could be used in human rights violations. 
2. Compatibility with Foreign Policy Objectives. The Secretary has determined that these 

controls are compatible with U.S. foreign policy objectives and that the extension of this control 

program will not have any significant adverse foreign policy consequences. This control 

program is fully consistent with U.S. policy in support of internationally recognized human 

rights, as expressed by successive Administrations and by Congress. 

3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to 

these controls is not likely to render the controls ineffective, nor will any adverse reaction by 

other countries be counterproductive to U.S. foreign policy interests. These controls are unique, 

serve a distinct foreign policy purpose, and arise out of deeply held convictions of the U.S. 

Government. Currently, other countries do not have completely equivalent regulations, but 

many have restrictions on exports of lethal products to areas of civil unrest. 

4. Economic Impact on U.S. Industry. The Secretary has determined that any adverse 

effect of these controls on the economy of the United States, including on the competitive 

position of the United States in the international economy, does not exceed the benefit to U.S. 

foreign policy objectives. In fiscal year 2011, the Department of Commerce approved 6,860 

export license applications valued at $2.5 billion for crime control items while the total value of 

all exports from the United States in calendar year 2010 was $1.3 trillion. Table 1 lists the total 

number and value (by ECCN) of export licenses that the U.S. Government issued for crime 

control items during fiscal year 2011. 
Table 1: Crime Control Applications Approved, Fiscal Year 2011

ECCN Items Controlled Applications 

Approved

$ Value

0A978 Law enforcement striking 

weapons 

181 $26,758,207 

0A979 Police helmets and shields 205 $105,098,085 

0A982 Restraint devices, e.g., leg irons, 

shackles, handcuffs 

464 $103,699,757 

0A984 Shotguns and buckshot shotgun 

shells 

1,160 $74,793,490 

0A985 Discharge type arms (stun guns, 

shock batons, etc.) 

347 $159,835,285 

0A987 Optical sighting devices for 

firearms 

2,457 $241,155,482 

0E984 Technology for items under 

0A984 

8 $22 

1A984 Chemical agents including tear 

gas containing 1% or less of CS 

or CN 

108 $12,355,410 

1A985 Fingerprinting powders, dyes, 

and inks 

203 $74,261,001 

3A980 Voice print identification and 

analysis equipment 

5 $154,565 

3A981 Polygraphs, fingerprint 

analyzers, cameras, and 

equipment 

579 $1,263,167,850 

3D980 Software for items under 3A980 

and 3A981 

440 $168,210,285 

3E980 Technology for items under 

3A980 and 3A981 

25 $234,773 

4A003* Digital computers for 

computerized fingerprint 

equipment only 

11 $56,846,659 

4A980 Computers for fingerprint 

equipment 

19 $38,340,757 
ECCN Items Controlled Applications 

Approved

$ Value

4D001* Software for items under 4A003 

only 

299 $299 

4D980 Software for items under 4A980 17 $66,223,440 

4E001* Technology for items under 

4A003 and 4D001 only 

329 $54,718,991 

5A980 Communications intercepting 

devices and parts/accessories 

1 $480 

9A980 Non-military mobile crime 

science laboratories 

2 $1,280,000 

TOTAL 6,860 $2,447,134,838 

NOTES: (1) Those ECCNs marked with an asterisk (*) list items that are controlled for 

crime control reasons and for other reasons, but the corresponding statistics represent 

only the crime control items within the ECCN. (2) BIS did not approve any applications 

during the relevant period for crime-controlled items under ECCNs 0A983 specially 

designed implements of torture, 0E982 technology for restraint devices/discharge type 

arms, 4E980 technology for computers for fingerprint equipment or 6A002.c police 

infrared viewers and related technology. 

 
In fiscal year 2011, the Department of Commerce denied 20 applications for crime control items 

with a total value of $4.9 million. 

Table 2: Crime Control Applications Denied, Fiscal Year 2011 

ECCN Description Applications 

Denied

$ Value

0A979 Police helmets and shields 1 $1,000,000 

0A982 Restraint devices, e.g., leg irons, shackles, 

handcuffs 

1 $54,000 

0A984 Shotguns and buckshot shotgun shells 9 $690,450 

0A985 Discharge type arms (stun guns, shock batons, 

etc.) 

2 $1,881,000 

0A987 Optical sighting devices for firearms 4 $847,900 

1A985 Fingerprinting powders, dyes, and inks 1 $400,680 

3D980 Software for items under 3A980 and 3A981 1 $3 

3E980 Technology for items under 3A980 and 3A981 1 $1 

TOTAL 20 $4,874,034 

In fiscal year 2011, the Department of Commerce approved 3,917 export license applications 

valued at $343.2 million for items affected by the foreign policy controls on firearms and 

ammunition instituted in 1999 in support of the OAS Model Regulations. 
Table 3: Applications for Firearms, Ammunition and Sights to OAS Countries Approved, 

Fiscal Year 2011 

ECCN Items Controlled Applications 

Approved

$ Value 

0A984 Shotguns and buckshot 

shotgun shells 

1,160 $74,793,490

0A986 Other shotgun shells 300 $27,288,166

0A987 Optical sighting devices 

for firearms 

2,457 $241,155,482

TOTAL9 3,917 $343,237,138

5. Effective Enforcement of Controls. The Secretary has determined that the United States 

has the ability to enforce these controls effectively. Crime control items and implements of 

torture are easily recognizable and do not present special enforcement problems related to 

detecting violations or verifying use. However, enforcement cooperation with other countries 

generally is difficult in cases involving unilaterally controlled items such as these, and often 

depends on the type and quantity of goods in question. In addition, enforcement of controls on 

reexports is challenging and rests in large part on the willingness of the recipient to abide by the 

terms of the export license. The U.S. Government conducts post-shipment verifications to 

ensure that the listed end-user has received the exports and to confirm that the end-user is using 

the controlled items in a way consistent with the license conditions. 

BIS conducted a number of recent enforcement actions regarding noncompliance with these 

export controls. For example: 

Firearms and Ammunition to Nigeria 

On July 11, 2011, Boniface Ibe was sentenced to five months in prison followed by 10 months of 

supervised release for exporting arms and controlled goods to Nigeria without a license, and for 

delivering a firearm to a common carrier without written notice. 

9

 Items in ECCN 0A986 are controlled only for Firearms Convention reasons. Items in ECCNs 0A984 and 0A987, 

however, are controlled both for Firearms Convention and Crime Control reasons. The statistics in this table for 

ECCNs 0A984 and 0A987 are a subset of the Crime Control statistics provided in Table 1 of this Chapter. 
Riflescopes to the Philippines 

On February 7, 2011, Mike Cabatingan pled guilty in U.S. District Court in the Central District 

of Los Angeles to charges of conspiracy. The charges relate to the export of rifle scopes to the 

Philippines without the required export license. 

Shotguns to Nigeria 

On January 3, 2011, in U.S. District Court in the District of Maryland, Emenike Charles 

Nwankwoala, a Maryland State Probation Officer in Upper Marlboro, MD, was sentenced to 37 

months in prison and two years of supervised release. On April 28, 2010, Nwankwoala, pled 

guilty to exporting arms without a license, exporting Commerce controlled goods without a 

license, and the willful delivery of a firearm to a common carrier without written notice. 

Nwankwoala exported firearms, including 24 Commerce controlled shotguns, to Nigeria without 

the required licenses. 

C. Consultation with Industry

In a September 1, 2011 Federal Register notice (76 FR 54426), the Department of Commerce 

solicited comments from industry and the public on the effectiveness of U.S. foreign policybased export controls. In addition, comments were solicited from the public via the BIS website. 

The comment period closed on October 3, 2011. A detailed review of all public comments 

received can be found in Appendix I. 

The Department of Commerce consults with the Regulations and Procedures Technical Advisory 

Committee, one of seven technical advisory committees that advise BIS, in preparation for 

publication of major regulatory changes affecting crime controls. In addition, the Department of 

Commerce has consulted with exporters of crime control items and with human rights groups 

concerned about the potential for misuse of such items in various parts of the world. BIS has 

frequent consultations with exporters about specific items proposed for export to specific end 

users and for specific end uses. 

D. Consultation with Other Countries 

Most other countries that supply crime control and detection items have not imposed similar 

export controls. The United Kingdom and Canada maintain controls similar to U.S. controls on 

certain crime control commodities. Certain European Union member states prohibit or impose 

an authorization requirement on the export of dual-use items not covered by the multilateral 

export control regimes for reasons of public security or human rights considerations. 
E. Alternative Means 

Section 6(n) of the EAA requires the Department of Commerce to maintain export controls on 

crime control and detection equipment. Attempting to achieve the purposes of the crime control 

restrictions through negotiations or other alternative means would not meet this requirement. 

The U.S. Government does, however, use diplomatic efforts, sanctions, and other means to 

convey its concerns about the human rights situation in various countries. 

F. Foreign Availability 

The foreign availability provision does not apply to Section 6(n) of the EAA.10 Congress has 

recognized the usefulness and symbolic value of these controls in supporting U.S. Government 

policy on human rights issues, foreign availability notwithstanding.

10 Provisions pertaining to foreign availability do not apply to export controls in effect before July 12, 1985, under 

Sections 6(i) (International Obligations), 6(j) (Countries Supporting International Terrorism), and 6(n) (Crime 

Control Instruments). See the Export Administration Amendments Act of 1985, Public Law No. 99-64, Section 

108(g)(2), 99 Stat. 120, 134-35. Moreover, Sections 6(i), 6(j), and 6(n) require that controls be implemented under 

certain conditions without consideration of foreign availability. 
CHAPTER 3 

Regional Stability 

(Section 742.6) 

Export Control Program Description and Licensing Policy 

Regional Stability (RS) controls ensure that exports and reexports of controlled items do not 

contribute to the destabilization of the region to which the items are destined. These controls 

traditionally cover items specially designed or modified for military purposes and certain dualuse commodities that can be used to manufacture military equipment. 

License Requirements and Licensing Policy 

RS Column 1 

Section 742.6 of the Export Administration Regulations (EAR) requires a license for RS reasons 

(RS Column 1 on the CCL) to export certain image-intensifier tubes, infrared focal plane arrays, 

certain imaging cameras incorporating image-intensifier tubes and infrared focal plane arrays, 

certain software and technology for inertial navigation systems, gyroscopes, and accelerometers, 

to all destinations except Canada. These items are included in Export Control Classification 

Numbers (ECCNs) 0A919, 6A002, 6A003, 6A008, 6A998, 6D001, 6D002, 6D003, 6D991, 

6D994, 6E001, 6E002, 6E991, 7A994, 7D001, 7E001, 7E002, and 7E101. 

The U.S. Government reviews all license applications for these items on a case-by-case basis to 

determine whether the export could contribute

U.S. foreign policy interests. 

RS Column 2 

In addition, Section 742.6 of the EAR imposes a license requirement for RS reasons (RS Column 

2 on the CCL) to export explosives detection equipment and related software and technology, 

military-related items (e.g., searchlights, bayonets, certain vehicles and trainer aircraft), 

concealed object detection equipment, and certain commodities used to manufacture military 

equipment to all destinations except member nations of the North Atlantic Treaty Organization 

(NATO), Australia, Japan, and New Zealand. These items are described on the CCL under 

ECCNs 0A918, 0E918, 1A004.d, 1B018.a, 1D003, 1E001, 2A983, 2A984, 2B018, 2D983, 

2D984, 2E983, 2E984, 8A918, and 9A018.a and .b, 9D018, and 9E018. The U.S. Government 
will generally consider applications for such licenses favorably, on a case-by-case basis, unless 

the export would significantly affect regional stability. For explosives detection equipment and 

related technology classified under ECCNs 2A984, 2D984 and 2E984, license applications are 

reviewed with a presumption of approval when exported to Austria, Cyprus, Finland, Ireland, 

Israel, Malta, Mexico, Singapore or Sweden if the items are destined for a government end-user. 

RS Controls for Certain Exports to Iraq 

In addition, there are RS controls in place for certain items when exported to Iraq (or transferred 

within Iraq). These items are covered under the following ECCNs: 0B999 (specific processing 

equipment such as hot cells and glove boxes suitable for use with radioactive materials); 0D999 

(specific software for neutronic calculations, radiation transport calculations, and hydrodynamic 

calculations/modeling); 1B999 (specific processing equipment, such as electrolytic cells for 

fluorine production and particle accelerators); 1C992 (commercial charges containing energetic 

materials, n.e.s.); 1C995 (certain mixtures and testing kits); 1C997 (ammonium nitrate); 1C999 

(specific materials, n.e.s.); and 6A992 (optical sensors not controlled under ECCN 6A002). The 

licensing policy for these items is set forth in Section 746.3 of the EAR, and is consistent with 

the broader controls maintained on Iraq. These controls are discussed in more detail in Chapter 5 

of this report. 

RS Controls for Certain Thermal Imaging Cameras 

Special RS Column 1 requirements apply to certain thermal imaging cameras classified under 

ECCN 6A003b.4.b. Export and reexport license requirements and license review policies for 

these products vary depending on certain technical specifications of the cameras as well as the 

proposed end uses. Almost all cameras controlled by ECCN 6A003.b.4.b are controlled under 

Regional Stability Column 1 (RS1) and require an export or reexport license for all destinations 

other than Canada. Cameras classified under ECCN 6A003.b.4.b can be subject to a more 

favorable licensing policy, however, if they are packaged for civil use and destined only for 

Albania, Australia, Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, 

Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, 

Lithuania, Luxembourg, Malta, the Netherlands, New Zealand, Norway, Poland, Portugal, 

Romania, Slovakia, Slovenia, South Africa, South Korea, Spain, Sweden, Switzerland, Turkey, 

or the United Kingdom. A license is required to export or reexport to Hong Kong any item 

classified under ECCN 6A003.b.4.b. 

Cameras controlled by ECCN 6A003.b.4.b that fall below certain technical thresholds are 

controlled at the lower Regional Stability control level (RS2) when fully packaged for use as a 

consumer-ready civil product. Applications to export or reexport these cameras will be 
considered favorably unless there is evidence the export or reexport would contribute 

significantly to the destabilization of the region to which the camera is destined. 

There is also a license requirement on reexports of military commodities produced outside of the 

United States that incorporate one or more cameras controlled under ECCN 6A003.b.4.b. These 

products are controlled in ECCN 0A919 and are subject to RS Column 1 controls. Reexports of 

these military commodities require a license to all destinations except Canada, unless the military 

commodities are being reexported as part of a military deployment by a unit of the governments 

of Albania, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, the Czech Republic, 

Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, 

Latvia, Lithuania, Luxembourg, Malta, the Netherlands, New Zealand, Norway, Poland, 

Portugal, Romania, Slovakia, Slovenia, South Africa, South Korea, Spain, Sweden, Switzerland, 

Turkey, the United Kingdom, or the United States. Applications for reexports of these military 

commodities will be reviewed applying policies for similar commodities that are subject to the 

International Traffic in Arms Regulations. 

Summary of 2011 Changes 

The Export Control Reform (ECR) initiative that was begun during the reporting period 

proposes a new regulatory construct for the transfer of items on the United States Munitions List 

(USML) to the Commerce Control List (CCL) that, in accordance with section 38(f) of the Arms 

Export Control Act (AECA)(22 U.S.C. 2778(f)(1)), the President determines no longer warrant 

control under the AECA. These items would then be controlled under the EAR once the 

congressional notification requirements of section 38(f) and corresponding amendments to the 

International Traffic in Arms Regulations (ITAR) (22 CFR parts 120-130) and its USML and the 

EAR and its CCL are completed. On July 15, 2011, the Department of Commerce published a 

proposed rule in the Federal Register (76 FR 41958) implementing these structural changes to 

the EAR for the items that are moved from the United States Munitions List (USML) to the 

Commerce Control List (CCL) and which will be subject to Department of Commerce licensing 

authority. The rule proposes that these items under new ECCNs will controlled for Regional 

Stability (RS) and Anti-Terrorism (AT) reasons in addition to other control reasons that will be 

specified in subsequent rules. 

In addition, the following is a list of proposed rules published by BIS that propose the transfer 

certain categories of items from the USML to the CCL: 

On November 7, 2011, the Department of Commerce published a proposed rule in the Federal 

Register (76 FR 68675 Revisions to the Export Administration Regulations (EAR): 

Control of Aircraft and Related Items the President Determines No Longer Warrant Control 

would add a number of items 

formerly controlled on the USML to the CCL. These items would be controlled for RS, National 
Security (NS), Anti-Terrorism (AT), and in certain cases, Missile Technology (MT) reasons. NS 

controls are not the subject of this report. Please refer to Chapter 4 for a description of AT 

controls. Please refer to Chapter 8 for a description of MT controls. 

On December 6, 2011 the Department of Commerce published a proposed rule in the Federal 

Register (76 FR 76072 Revisions to the Export Administration Regulations (EAR): 

Control of Gas Turbine Engines and Related Items the President Determines No Longer Warrant 

would add a number of 

items formerly controlled on the USML to the CCL. These items would be controlled for RS, 

NS and AT reasons. NS controls are not the subject of this report. Please refer to Chapter 4 for 

a discussion of AT controls. 

On December 6, 2011, the Department of Commerce published a proposed rule in the Federal 

Register (76 FR 76085 Revisions to the Export Administration Regulations (EAR): 

Control of Military Vehicles and Related Items that the President Determines No Longer 

Warrant Control on the United States Mun would add a number of items 

formerly controlled on the USML to the CCL. These items would be for RS, NS and AT 

reasons. NS controls are not the subject of this report. Please refer to Chapter 4 for a discussion 

of AT controls. 

On December 23, 2011, the Department of Commerce published a proposed rule in the Federal 

Register (76 FR 80282) entitled 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) This rule would add a number of 

items formerly controlled on the USML to the CCL. These items would be controlled for RS, 

NS and AT. NS controls are not the subject of this report. Please refer to Chapter 4 for a 

discussion of AT controls. Please refer to Chapter 4 for a discussion of AT controls. 

On December 23, 2011, the Department of Commerce published a proposed rule in the Federal 

Register (76 FR 80291 Revisions to the Export Administration Regulations (EAR): 

Controls Applicable to Submersible Vessels, Oceanographic Equipment and Related Articles 

that the President Determines No Longer Warrant Control under the United States Munitions 

List This rule would add a number of items formerly controlled on the USML to the CCL. 

These items would be controlled for RS, NS and AT. NS controls are not the subject of this 

report. Please refer to Chapter 4 for a discussion of AT controls. Please refer to Chapter 4 for a 

discussion of AT controls. 

In addition to the ECR related proposed rules listed above, the Department of Commerce 

published on January 9, 2012, a proposed rule in the Federal Register (77 FR 1017) entitled 

Export and Reexport License Requirements for Certain Microwave and Millimeter Wave 
electron mobility transistors and monolithic microwave integrated circuits. 

Analysis of Controls as Required by Section 6(f) of the Export Administration Act 

A. The Purpose of the Controls 

Regional Stability controls provide a mechanism for the U.S. Government to monitor the export 

of controlled items, to restrict their use in instances that would adversely affect regional stability 

or the military balance within a region, and to protect the national security and foreign policy 

interests of the United States. 

B. Considerations and/or Determinations of the Secretary of Commerce

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has 

determined that these controls are likely to achieve the intended foreign policy purpose, although 

most of these items are increasingly available from abroad. The Secretary has also determined 

that the foreign policy purpose cannot fully be achieved through negotiations or other alternative 

means, and that some of the items subject to these controls are also controlled, as a result of 

international negotiations, by U.S. partners in the Wassenaar Arrangement and the Missile 

Technology Control Regime (MTCR). Regional stability controls contribute to U.S. national 

security and foreign policy objectives by enabling the United States to restrict the use or 

availability of certain sensitive U.S.-origin goods and technologies that would adversely affect 

regional stability or the military balance in certain areas. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that these 

controls are compatible with U.S. foreign policy objectives and that the extension of these 

controls will not have any significant adverse foreign policy consequences. Regional stability 

controls are consistent with U.S. foreign policy goals to promote peace and stability and prevent 

U.S. exports that might contribute to weapons production, destabilizing military capabilities, or 

acts of terrorism. 

3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to 

these controls is not likely to render the controls ineffective, nor will any adverse reaction by 

other countries be counterproductive to U.S. foreign policy interests. A number of other 

countries limit exports of items and technologies with military applications to areas of concern, 

recognizing that such items and technologies could adversely affect regional stability and 

military balances. For example, the United States and other member countries of the Wassenaar 

Arrangement each have their own national controls on the export of certain night vision devices. 

All members of the MTCR maintain controls on software and technology related to missile 
guidance and control devices. Although other countries may object to new unilateral RS 

controls, allies and partners of the United States support U.S. efforts against regional conflict and 

terrorism and appreciate the need to keep certain equipment and technologies from those who 

could misuse the items to destabilize countries or regions. 

4. Economic Impact on U.S. Industry. Although the Secretary has determined that the 

adverse effect of these controls on the economy of the United States, including on the 

competitive position of the United States in the international economy, does not exceed the 

benefit to U.S. foreign policy objectives, the controls on cameras controlled by ECCN 6A003, 

which exceed the controls on similar products imposed by other producing countries, have 

significantly and adversely affected the competitiveness of this industry sector. Items controlled 

for RS reasons generally require licenses for export to all destinations except NATO countries, 

Australia, Japan, and New Zealand. However, certain RS-controlled items, including those 

controlled concurrently for missile technology reasons as well as cameras controlled under 

ECCN 6A003, require licenses for export to all destinations except Canada. Cameras controlled 

by ECCN 6A003 account for a large percentage of RS-controlled exports. 

RS Column 1 Controls 

In fiscal year 2011, the Department of Commerce approved 701 license applications for items 

controlled for RS1 reasons, with a total value of $259 million. One license application was 

denied, for an ECCN 6A003 item, with a value of $239,000.

Most of this licensing volume and value is accounted for by exports of thermal imaging cameras 

in ECCN 6A003 (491 licenses valued at $205 million). However, the licensing activity for this 

ECCN is significantly less than in past years. Last year, BIS approved 622 licenses for 6A003 

items, and in FY 2009 BIS approved 1,094 licenses. This decrease in license volume is due at 

least in part to the revision of controls on certain thermal imaging cameras that took effect in 

May 2009 in recognition of the emerging availability of these cameras around the world, the 

export licensing practices of other governments, and the potential use of these cameras in 

military applications. 

The table that follows lists the total number and value by ECCN of export licenses that the 

Department of Commerce issued for regional stability (RS1) during fiscal year 2011: 

Table 1a: Regional Stability Applications Approved, Fiscal Year 2011 

RS Column 1 Controls
ECCN Description Number of 

Applications 

Dollar Value 

0A919 Military commodities produced outside the 

U.S. incorporating 6A003b.4.b cameras 

55 $28,204,800 

+6A002.a.1, 

a.2., a.3, c, e 

Optical detectors and direct view imaging 

equipment incorporating image intensifier 

tube or focal plane arrays 

28 $9,185,377 

+6A003.b.3, 

b.4 

Imaging cameras incorporating image 

intensifiers or focal plan arrays 

491 $205,087,777 

6A008.j.1 Space-qualified LIDAR equipment 0 0 

6A998.b Space-qualified LIDAR equipment for 

meteorological observation 

0 0 

6D001 Software for development/ production of 

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

6A03.b.3 and 6A008.j 

0 0 

6D002 Software for the use of 6A002.a.1, a.2, a.3, 

c; 6A03.b.3 and 6A008.j 

0 0 

+

6D003.c Software for cameras with focal plane arrays 4 $41,000 

6D991 Software for development/ production/use of 

6A002.e or 6A998.b 

0 0 

6D994 Software for cameras with focal plane arrays 0 0 

+

6E001 Technology for the development of RScontrolled items in 6A002, 6A003, and 

6A008 

21 $1,376,326 

+

6E002 Technology for the production of RScontrolled items in 6A002, 6A003, and 

6A008 

16 $2,041 

6E991 Technology for development/production/ 

use of 6A998b 

0 0 

7A994 QRS-11 Sensors 0 0 

+

7D001 Software for the development or production 

inertial navigation systems 

2 $1,001 
ECCN Description Number of 

Applications 

Dollar Value 

+

7E001 Technology for the development of inertial 

navigation systems, inertial equipment and 

specially designed components for civil 

aircraft 

44 $65,573 

+

7E002 Technology for the production of inertial 

navigation systems, inertial equipment and 

specially designed components for civil 

aircraft 

5 $6,500 

+

7E101 Technology for the use of inertial navigation 

systems 

35 $15,048,330 

TOTAL 701 $259,018,725 

NOTES: +

number of licenses and dollar value for the complete ECCN are given. In most cases, the subcategories under these 

ECCNs that are not controlled for regional stability reasons are minimal. 

RS Column 2 Controls 

Explosives detection equipment in ECCN 2A983 and military trainer aircraft and vehicles in 

ECCN 9A018 account for the bulk of licenses controlled for RS2 reasons. There were 759 total 

approved licenses for RS2 controlled items with a total value of $388 million. 12 licenses were 

denied for RS2 controlled items in FY11 11 for ECCN 9A018 items with a total value of 

$44,617,674 and one for technology in ECCN 9E018 with a value of $1,000.000.11

11Only a portion of the ECCN 9A018 is subject to RS controls, but the total number of licenses 

and dollar value for the complete ECCN are given. In most cases, the subcategories under these 

ECCNs that are not controlled for regional stability reasons are minimal.
The table that follows lists the total number and value by ECCN of export licenses that the 

Department of Commerce issued for regional stability (RS2) during fiscal year 2011: 

Table 1b: Regional Stability Applications Approved, Fiscal Year 2011 

RS Column 2 Controls

ECCN Description Number of 

Applications 

Dollar Value 

0A918 Military Equipment not on the Wassenaar 

Munitions List 

13 $38,988 

0E918 Technology for the development, production 

or use of bayonets 

0 0 

*1A004.d Explosives detection equipment 0 0 

1B018.a Equipment for production of military 

explosives 

6 $819,409 

+1D003 Software for equipment for production of 

military explosives 

26 $786,352 

*1E001 Technology for equipment for production of 

military explosives 

0 0 

2A983 Explosives detection equipment 111 $110,365,630 

2A984 Concealed object detection equipment 0 0 

2B018 Equipment on the Wassenaar Munitions List 21 $5,825,332 

2D983 Software for equipment in 2A983 86 $6,517,029 

2D984 Software for equipment in 2A984 0 0 
ECCN Description Number of 

Applications 

Dollar Value 

2E983 Technology for equipment in 2A983 62 $1,742,061 

2E984 Technology for equipment in 2A984 0 0 

8A918 Marine boilers 0 0 

+

9A018.a, 

b 

Military trainer aircraft and vehicles 

designed or modified for military use 

390 $261,197,219 

+

9D018 Software for the use of items in 9A018.a.,b 1 $0 

+

9E018 Technology for the development or 

production of items in 9A018.a.,b 

43 $1,099,680 

TOTAL 759 $388,391,700 

NOTES: +

number of licenses and dollar value for the complete ECCN are given. In most cases, the subcategories under these 

licensing volume is accounted for by items not controlled for RS reasons; it is not possible to separate the RScontrolled portion only for statistical purposes. 

With regard to the special regional stability controls in place for Iraq, BIS licensed a total of 

29 applications valued at $525,559,289. The majority of these applications (18 with a value 

of $523,470,112) were for oil well perforators under ECCN 1C992. Other applications were 

for 1B999 (8 licenses) and 1C999 (3 licenses) items. There were no denials for RS 

controlled items for Iraq in FY 2011. 

5. Effective Enforcement of Controls. The Secretary has determined that the United States 

has the ability to enforce these controls effectively. Image intensifier tubes, infrared focal plane 

arrays, certain software and technology for inertial navigation systems, gyroscopes, and 

accelerometers, and other items controlled for RS purposes are almost all subject to multilateral 

controls for either national security (NS) or missile technology (MT) reasons, though in these 
instances the RS control is redundant. The multilateral nature of these controls aids in 

enforcement only for these redundant controls. 

Other RS controls cover items of lower level technologies that have been de-controlled by the 

multilateral regimes, and are widely available from other exporting countries. The Department 

of Commerce effectively enforces RS controls by focusing on preventive enforcement, using 

regular outreach efforts to keep businesses informed of U.S. concerns, and gathering leads on 

activities of concern. Additionally, exporters are required to report to BIS on exports of thermal 

imaging cameras decontrolled by the May 2009 regulatory change, enabling BIS to verify that 

the cameras continue to be sold to appropriate end-users and that the changes in controls are not 

jeopardizing U.S. national security or foreign policy interests. Given the enhanced anti-terrorism 

efforts of the U.S. Government, it is expected that industry will continue to support enforcement 

efforts. 

C. Consultation with Industry 

On September 1, 2011, the Department of Commerce solicited public comment in the Federal 

Register (76 FR 54426) on the effectiveness of U.S. foreign policy-based export controls, 

including controls on RS items. The comment period on the Federal Register notice closed on 

October 3, 2011. A detailed review of all public comments received can be found in Appendix I. 

In addition, comments were solicited from the public via the BIS website. Comments from the 

detailed in this report. In particular, the Department holds quarterly consultations with the 

Sensors and Instrumentation Technical Advisory Committee (SITAC). The SITAC frequently 

addresses the RS controls on thermal imaging cameras and related items and technology. 

D. Consultation with Other Countries 

The United States imposes RS controls on items that either are controlled, or were at one time 

controlled, by the Wassenaar Arrangement. Wassenaar Arrangement member countries hold 

extensive consultations, and certain member countries hold bilateral discussions regarding items 

on the Wassenaar control list. During 2011, the U.S. Government engaged in extensive 

consultations with its Wassenaar partners. Wassenaar participating states incorporate the 

Wassenaar Dual-Use Control List into their own national export controls to prevent exports that 

could contribute to destabilizing buildups of conventional arms. 

E. Alternative Means 

The United States has undertaken a wide range of actions to support and encourage regional 

stability and has specifically encouraged efforts to limit the flow of arms and militarily useful 
goods and other special equipment to regions of conflict and tension. U.S. regional stability 

export controls remain an important element in U.S. efforts to enhance regional stability. The 

United States opposes the use of U.S.-origin items to destabilize legitimate political regimes or 

fuel regional conflicts, notwithstanding the availability of such items from other sources. 

Accordingly, there are no alternative means to achieve this policy objective. 

F. Foreign Availability 

Some military vehicles and other military-type equipment that are controlled for RS purposes 

may be obtained from foreign sources. Software, technology, chemicals, low capability sensors, 

and other items controlled for RS purposes are widely available. However, in some cases there 

are overlapping multilateral NS controls on many RS-controlled items. Some of the 

commodities, related software, and technology controlled for RS purposes are also subject to 

multilateral controls for either NS or Missile Technology (MT) reasons under multilateral 

regimes. In these cases, the RS controls are redundant. Therefore, controls imposed by 

multilateral regime members restrict foreign availability of these items. 

Manufacturers of imaging cameras controlled in ECCN 6A003 have voiced concern to the 

Department of Commerce that there is considerable foreign availability of these items from 

Europe, Japan, and China. This foreign availability and differences in licensing practices were 

major factors that led to the decision to revise RS controls on certain thermal imaging cameras in 

the regulation published on May 22, 2009 (74 FR 23941). This regulation reduced licensing 

requirements for certain cameras when exported to 37 countries and has reduced the licensing 

volume significantly. 
CHAPTER 4 

Anti-Terrorism Controls 

(Sections 742.8, 742.9, 742.10, 746.2) 

Export Control Program Description and Licensing Policy 

The U.S. Government controls exports of items subject to the Export Administration Regulations 

(EAR) for Anti-Terrorism reasons under Sections 6(a) and 6(j) of the Export Administration Act 

of 1979, as amended (EAA). Pursuant to Section 6(j) of the EAA, the Secretary of State has 

designated four countries Cuba, Iran, Sudan, and Syria as nations with governments that have 

repeatedly provided support for acts of international terrorism and has designated these countries 

as state sponsors of terrorism.12 Controls imposed for Anti-Terrorism reasons are identified in 

the EAR as Anti-Terrorism (AT) controls. Additionally, the United States maintains broad 

controls, and in some cases comprehensive sanctions, on exports and reexports to Cuba, Iran, 

Sudan, and Syria. The broader controls applicable to such countries are discussed in Chapter 5 

of this report. 

Since December 1993, the U.S. Government has reviewed license applications involving the 

export or reexport of the following five categories of dual-use items to military, police, 

intelligence, and other sensitive end-users within countries designated as terrorist-supporting 

countries in accordance with the criteria set forth in Section 6(j)(1)(B) of the EAA: 

all items on the CCL subject to national security controls; 

all items on the CCL subject to chemical and biological weapons proliferation controls; 

all items on the CCL subject to missile proliferation controls; 

all items on the CCL subject to nuclear weapons proliferation controls; and 

all military-related items on the CCL (items controlled by CCL entries ending with the 

number 18). 

Specifically, on December 28, 1993, the Acting Secretary of State determined that items in these 

categories, if exported or reexported to military, police, intelligence organizations, or to other 

sensitive end-users in a designated terrorist-supporting country, could make a significant 

12Although the designation of North Korea was rescinded on October 11, 2008, the EAR have not been revised to 

remove the AT controls. Moreover, additional export control requirements under the EAR apply to exports and 

reexports to that country on the basis of other laws and regulations, and in accordance with United Nations Security 

Council Resolution 1718 (UNSCR 1718). 
contributi

international terrorism. As a result, any export or reexport of an item in these categories is 

subject to a 30-day congressional notification period prior to approval. 

The United States controls exports and reexports of such items to other, non-sensitive end-users, 

as well as exports and reexports of certain other CCL items to all end-users, in designated state 

sponsors of terrorism for foreign policy purposes under Section 6(a) of the EAA, which provides 

the general authority for foreign policy controls. Such transactions are also reviewed against the 

Section 6(j) standard on a case-by-case basis. 

License Requirements and Licensing Policy 

Pursuant to the 1993 determination of the Acting Secretary of State and subsequent action 

consistent with it, exports and reexports of items in the five categories described above to certain 

sensitive end-users in terrorist-supporting countries are controlled for AT reasons pursuant to 

Section 6(j) of the EAA. In accordance with Section 6(a) of the EAA, the Department of 

Commerce requires a license for the export and/or reexport of items in these five categories to 

non-sensitive end-users and certain items on the CCL to all end-users in designated terroristsupporting countries for AT reasons. The applicable controls are contained in the relevant EAR 

sections pertinent to each country. 

The Department of Commerce refers all license applications for items controlled for AT reasons 

to the Department of State for review. With respect to items controlled pursuant to Section 6(a) 

(including exports or reexports of items on the CCL to non-sensitive end-users), an initial 

determination is made regarding whether the requirements of Section 6(j) apply. If the Secretary 

make a significant contribution to the military potential of the destination country, including its 

military logistics capability, or could enhance the ability of such country to support acts of 

Departments of Commerce and State must notify the appropriate congressional committees 30 

days before issuing one, consistent with the provisions of Section 6(j)(2) of the EAA. 

Transactions that do not rise to the Section 6(j)(1)(B) standard are generally reviewed on a caseby-case basis. 

 

Pursuant to Section 6(a) of the EAA, the Department of Commerce requires a license for the 

export and/or reexport of certain items on the CCL to all end-users in all designated terroristsupporting countries for AT reasons. The applicable controls are contained in the relevant EAR 

sections pertinent to each country. All applicable controls currently maintained for AT reasons 

pursuant to either Section 6(j) or Section 6(a) of the EAA continues in force. 
Moreover, as described further in Chapter 5, the United States maintains additional controls on 

exports and reexports to Cuba, Iran, North Korea, Sudan, and Syria. As a result, the U.S. 

Government reviews license applications for exports and reexports of most AT-controlled items 

to these countries under a general policy of denial, with limited exceptions. 

Summary of 2011 Changes 

On July 13, 2011, the Department of Commerce published a final rule in the Federal Register

(76 FR 41046) amending the EAR consisten

Sudan to the Commerce Country Chart. South Sudan is in Country Group B and thus exports to 

South Sudan are eligible for certain License Exceptions. The AT controls that continue to apply 

A license is 

required for the export or reexport to South Sudan of items subject to the EAR that are controlled 

unilaterally for Regional Stability and Crime Control reasons, and items controlled by the 

multilateral export control regimes (Australia Group, Wassenaar Arrangement, 

Chemical/Biological Weapons Conventions, Nuclear Suppliers Group, and Missile Technology 

Control Regime). 

On July 15, 2011, the Department of Commerce published a proposed rule in the Federal 

Register (76 FR 41958) implementing structural changes to the EAR for the items that are 

moved from the United States Munitions List (USML) to the Commerce Control List (CCL) and 

which will be subject to Department of Commerce licensing authority. The rule establishes that 

these items under new ECCNs will be subject to control for Regional Stability (RS) and AntiTerrorism (AT) reasons in addition to other control reasons that will be specified in subsequent 

rules. 

Analysis of Controls as Required by Section 6(f) of the Export Administration Act 

A. The Purpose of the Controls 

Anti-Terrorism controls are intended to prevent acts of terrorism and to distance the United 

States from nations that have repeatedly supported acts of international terrorism and from 

individuals and organizations that commit terrorist acts. The controls demonstrate U.S. resolve 

not to trade with nations or entities that fail to adhere to acceptable norms of international 

behavior. The policy provides the United States with the means to control U.S. goods or services 

that might contribute to the military potential of designated countries and to limit the availability 

of such goods or services for use in support of international terrorism. U.S. foreign policy 

objectives are also furthered by ensuring that items removed from multilateral regime lists 

continue to be controlled to designated terrorist-supporting countries. With respect to exports 
and reexports to Cuba, Iran, North Korea, Sudan, and Syria, AT controls are maintained as part 

of broader U.S. sanctions discussed in Chapter 5. 

B. Considerations and/or Determinations of the Secretary of Commerce 

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has 

determined that these controls are likely to achieve the intended foreign policy purpose, in light 

of other factors, including the availability of AT-controlled items from other countries. The 

Secretary has also determined that the foreign policy purpose cannot be achieved through 

negotiations or other alternative means. Although widespread availability of comparable goods 

from foreign sources limits the effectiveness of these controls, the controls restrict access to 

U.S.-origin commodities, technology, and software, and demonstrate U.S. determination to 

oppose and distance the United States from international terrorism. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that these 

controls are compatible with U.S. foreign policy objectives and specifically, with U.S. policy 

toward the designated terrorist-supporting countries. The Secretary has also determined that the 

extension of these controls will not have any significant adverse foreign policy consequences. 

These controls affirm the U.S. commitment to restrict the flow of items and other forms of 

material support to countries, individuals, or groups for terrorist purposes. 

3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to 

these controls is not likely to render the controls ineffective, nor will any adverse reaction by 

other countries be counterproductive to U.S. foreign policy interests. Most countries are 

generally supportive of U.S. efforts to fight terrorism and to stop the proliferation of weapons of 

mass destruction and the export and reexport of sensitive items to governments that have 

repeatedly provided support for acts of international terrorism. 

4. Economic Impact on United States Industry. The Secretary has determined that the 

adverse effect of these controls on the economy of the United States, including on the 

competitive position of the United States in the international economy, does not exceed the 

benefit to United States foreign policy objectives. While U.S. industry has reported that AT 

controls have had a negative impact, the Secretary has determined that the detrimental impact on 

U.S. industry has been modest, while stopping state sponsorship of terrorism remains a very high 

priority of the U.S. Government. 

5. Effective Enforcement of Controls. The Secretary has determined the United States has 

the ability to enforce these controls effectively. Because of the well-publicized involvement of 

these countries in acts of international terrorism, there is public knowledge of and support for 

U.S. controls, which facilitates enforcement. However, the large number of items exported in 
normal trade to other countries, including some aircraft items and consumer goods that have 

many producers and end-users around the world, creates numerous procurement opportunities for 

brokers, agents, and front companies working for these countries. In addition, differences in 

export laws and standards of evidence for violations complicate law enforcement cooperation 

among countries. 

Notwithstanding these challenges, the Department of Commerce has developed effective 

mechanisms to enforce these controls, which serve vital U.S. foreign policy objectives. The 

Department of Commerce views these controls as a key enforcement priority, and uses outreach 

efforts and other programs to keep businesses informed of concerns and their obligations. BIS 

gathers leads on activities of concern and conducts end-use checks and Sentinel visits to verify 

end use and end-users of U.S.-origin licensed goods and technology. Sentinel teams assess the 

suitability of foreign end-users to receive U.S.-origin licensed goods and technology, assess 

prospective end-users on pending license applications for diversion risk, and conduct educational 

outreach to foreign trade groups. The Department is also developing a strong program to address 

procurement by or for designated terrorist-supporting countries. This program includes 

enhanced agent training, creation of a targeted outreach program to familiarize U.S. businesses 

with concerns, and close cooperation with lead agencies working on terrorism issues. 

BIS conducted a number of recent enforcement actions regarding noncompliance with these 

export controls. For example: 

 

Networking Equipment to Libya 

On July 1, 2011, Mohammed El-Gamal, also known as Moe Zayed El-Gamal, President and 

CEO of Applied Technology Inc. (ATI), located in Kenansville, NC, agreed to pay a civil 

penalty of $340,000 to settle allegations that he committed four violations of the Export 

Administration Regulations (EAR) related to the export of networking equipment controlled for 

Anti-Terrorism reasons, to the General Electric Company of Libya, without the required 

Department of Commerce licenses.13 

Electrical Components to Iran 

On August 27, 2010, Yi-Lan Chen, a.k.a. Kevin Chen, a Taiwanese national, was sentenced in 

U.S. District Court in Southern District of Florida to 42 months in prison, followed by 24 months 

ny, Landstar Tech 

Company, Inc. (Landstar), was also sentenced to 12 months of probation and a $400 special 

assessment. On May 13, 2010, both Chen and Landstar pled guilty to conspiracy to violate the 

13 Although BIS does not currently maintain AT controls to Libya, the violations occurred at a time when BIS 

maintained AT controls for Libya under the EAR. 
International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions 

Regulations (ITR). Chen also pled guilty to attempting to violate the IEEPA and the ITR. In 

February 2010, Chen met with undercover agents in the U.S. Territory of Guam to take 

possession of U.S.-origin electrical connectors and glass to metal pin seals for his customers in 

Iran. 

C. Consultation with Industry 

In a September 1, 2011 Federal Register notice (76 FR 54426), the Department of Commerce 

solicited comments from industry and the public on the effectiveness of U.S. foreign policybased export controls. The comment period closed on October 3, 2011. A detailed review of all 

public comments received may be found in Appendix I. 

The Department continues to engage in an ongoing dialogue with the Regulations and Policy 

Technical Advisory Committee (RPTAC) concerning items controlled only for AT reasons. The 

RPTAC has asserted that many such items are widely available from foreign sources, and 

therefore has questioned the effectiveness of the controls. The RPTAC also has stated that every 

country currently subject to AT controls is also subject to comprehensive sanctions or embargo. 

The RPTAC, however, has not disputed either the importance of the controls to United States 

foreign policy or the effectiveness of the particular enforcement mechanisms used by the 

Department. 

D. Consultation with Other Countries 

The United States continues to consult with a number of countries, both on a bilateral and a 

multilateral basis, about activities of designated terrorist-supporting countries. In general, most 

countries are supportive of U.S. anti-terrorism efforts but do not implement export control 

programs comparable to that of the United States. However, the continued maintenance of 

sanctions by many other countries limits foreign availability for some destinations. 

E. Alternative Means 

The United States has taken a wide range of diplomatic, political, and security-related steps, in 

addition to economic measures such as export controls, to persuade certain countries to 

discontinue their support for terrorist activities. The methods that the United States uses against 

a country, terrorist organization, or individual vary and are dictated by the circumstances 

prevailing at any given time. In general, the United States believes that maintenance of AT 

controls is an appropriate method to encourage the designated terrorism-supporting countries to 

act against terrorist elements within their jurisdiction or control. See also Chapter 13 for a 
discussion of the Entity List, a list set forth in the EAR of persons to which license requirements 

apply based on criteria that include support for terrorism. 

F. Foreign Availability 

The foreign availability provision does not apply to items determined by the Secretary of State to 

require control under Section 6(j) of the EAA.14 Congress specifically excluded AT controls 

from foreign availability assessments otherwise required by the EAA, due to the value of such 

controls in emphasizing the U.S. position on countries whose governments support international 

terrorism. However, the Department of Commerce has considered the foreign availability of 

items controlled to designated terrorist-supporting countries under Section 6(a) of the EAA. 

Although there are numerous foreign sources for items similar to those subject to control, the 

continued maintenance of sanctions by many other countries limits foreign availability for some 

interests. 

14 Provisions pertaining to foreign availability do not apply to export controls in effect before July 12, 1985, under 

sections 6(i) (International Obligations), 6(j) (Countries Supporting International Terrorism), and 6(n) (Crime 

Control Instruments). See the Export Administration Amendments Act of 1985, Public Law 99-64, section 

108(g)(2), Stat. 120, 134-35. Moreover, Sections 6(i), 6(j), and 6(n) of the EAA require that controls be 

implemented under certain conditions without consideration of foreign availability. 
Chapter 5 

Embargoes, Sanctions, and Other Special Controls 

(Sections 744.8, 744.12, 744.13, 744.14, 744.18, 744.20, 744.22, 746.2, 

746.3, 746.4, 746.7, 746.9, and General Order No. 2 (Supplement No. 1 to 

Part 736) 

Export Control Program Description and Licensing Policy 

partial embargoes and sanctions programs, and other special controls maintained by the U.S. 

Government pursuant to the Export Administration Regulations (EAR), either unilaterally or to 

implement United Nations (UN) Security Council Resolutions. Specifically, the U.S. 

Government maintains either partial or comprehensive economic and trade sanctions on Cuba, 

Iran, Sudan, Syria, and certain designated terrorist persons. The U.S. Government also maintains 

certain special export control programs, including programs relating to Iraq, North Korea, and 

certain other countries, consistent with international obligations. Finally, the U.S. Government 

maintains special controls on certain persons, including those engaged in the proliferation of 

weapons of mass destruction. See also Chapter 13 for a discussion of the Entity List. 

License Requirements and Licensing Policy 

Certain Designated Persons 

The Department of Commerce requires a license for the export or reexport of all items subject to 

the EAR to Specially Designated Global Terrorists (SDGTs), Specially Designated Terrorists 

(SDTs), and Foreign Terrorist Organizations (FTOs), and a general policy of denial applies to all 

applications for such exports or reexports. SDGTs, SDTs, and FTOs are identified with the 

bracketed suffixes [SDGT], [SDT], and [FTO], respectively, on a list of designated persons 

maintained by the Office of Foreign Assets Control (OFAC), U.S. Department of the Treasury, 

in Appendix A to 31 CFR Chapter V. Exports and reexports to SDGTs and SDTs that are 

authorized by OFAC generally do not require additional Bureau of Industry and Security (BIS) 

authorization (this rule does not apply to FTOs). 

Furthermore, the Department of Commerce requires a license for exports and reexports of all 

items subject to the EAR to persons designated in or pursuant to Executive Order 13382 of June 

28, 2005 (Weapons of Mass Destruction Proliferators and their Supporters), and a general policy 

of denial applies to all applications. The persons whose property or interests in property are 

blocked pursuant to Executive Order 13382 (74 FR 2355) are identified by OFAC in Appendix 
A to 31 CFR Chapter V with the bracketed suffix [NPWMD]. Exports and reexports to 

NPWMDs that are authorized by OFAC generally do not require additional BIS authorization. 

In addition, the Department of Commerce requires licenses for exports, reexports, and transfers 

to persons whose property and interests in property related to Burma are blocked pursuant to 

Executive Order 13310 of July 28, 2003, Executive Order 13448 of October 18, 2007, and 

Executive Order 13464 of April 30, 2008, and a general policy of denial applies to all 

applications. These license requirements apply to all items subject to the EAR other than 

agricultural commodities, medicine, or medical devices designated as EAR99 that are destined 

for persons whose property and interests in property are blocked pursuant to any of the Executive 

Orders. All persons listed in or designated pursuant to Executive Orders 13310, 13448, or 13464 

are identified by OFAC in Appendix A to 31 CFR Chapter V with the bracketed suffix 

[BURMA]. Exports, reexports, or transfers to persons designated in or pursuant to these 

Executive Orders that are authorized by OFAC generally do not require additional BIS 

authorization. 

Cuba 

The Department of Commerce requires a license for export or reexport to Cuba of virtually all 

commodities, technology, and software subject to the EAR, with a few narrow exceptions for 

items generally authorized by a License Exception such as: 

food, and certain items to meet basic human needs; 

certain types of personal baggage; 

certain foreign-origin items in transit from Canada through the United States; 

items for U.S. Government personnel and agencies, and agencies of cooperating 

governments; 

certain donated consumer communications devices; and 

gift parcels containing items normally exchanged as gifts between individuals, including 

food, medicine, clothing, and certain consumer communications devices, provided that 

the value of non-food items does not exceed $800.15 

The Department of Commerce generally denies license applications for exports or reexports to 

Cuba. However, the Department considers applications for a few categories of exports, 

including the following, on a case-by-case basis when the exports are intended to provide 

15 An individual donor does not require a license to send a gift parcel addressed to an individual recipient. A gift 

parcel consolidator who exports multiple parcels in a single shipment for delivery to Cuba does require a license. 

(See note to Section 740.12(a) of the EAR.) 
support for the Cuban people or the transactions would be consistent with the foreign policy 

interests of the United States: 

exports from third countries of non-strategic, foreign-made products containing 

20 percent or less U.S.-origin parts, components, or materials, provided the exporter is 

not a U.S.-owned or controlled foreign firm in a third country; 

exports and reexports of items necessary to provide efficient and adequate 

telecommunications links between the United States and Cuba, including links 

established through third countries, and including the provision of satellite radio or 

satellite television services to Cuba; 

exports of certain commodities destined to human rights organizations or to individuals 

and non-governmental organizations that promote independent activity; 

exports of certain commodities and software for U.S. news bureaus in Cuba; 

exports of certain agricultural items not eligible for License Exception Agricultural 

Commodities (AGR); and 

exports of certain vessels and aircraft on temporary sojourn to Cuba. 

The Department of Commerce reviews applications for exports of donated and commercially 

supplied medicine or medical devices to Cuba on a case-by-case basis, pursuant to the provisions 

of Section 6004 of the Cuban Democracy Act of 1992. The United States will generally approve 

such exports, except in the following cases: 

to the extent Section 5(m) of the Export Administration Act of 1979, as amended (EAA) 

or Section 203(b)(2) of the International Emergency Economic Powers Act (IEEPA) 

would permit such restrictions; 

when there is a reasonable likelihood the item to be exported will be used for purposes of 

torture or other human rights abuses; 

when there is a reasonable likelihood the item to be exported will be reexported; 

when the item to be exported could be used in the production of any biotechnological 

product; or 

if it is determined that the U.S. Government is unable to verify, by on-site inspection and 

other appropriate means, that the item to be exported will be only for the use and benefit 

of the Cuban people. This exception does not apply to donations of medicine for 

humanitarian purposes to non-governmental organizations in Cuba. 

The Department authorizes exports and certain reexports of agricultural commodities to Cuba 

under License Exception AGR, pursuant to section 906(a)(1) of the Trade Sanctions Reform and 

Export Enhancement Act of 2000 (TSRA). Under License Exception AGR, an exporter must 

submit prior notification of a proposed transaction to the Department of Commerce. The 
exporter may proceed with the shipment when the Department confirms that no reviewing 

agency has raised an objection (generally within 12 business days), provided the transaction 

meets all of the other requirements of the License Exception. This expedited review includes the 

screening of the ultimate recipient of the commodities to ensure that it is not involved in 

promoting international terrorism. 

Iran 

On July 1, 2010, the President signed into law the Comprehensive Iran Sanctions, 

Accountability, and Divestment Act of 2010 (CISADA). CISADA Title I expands sanctions on 

Iran predominantly through amendments to the Iran Sanctions Act of 1996 (ISA). Title I does 

not require changes to BIS regulations or practice because BIS does not currently process license 

applications for exports and reexports to Iran other than for deemed exports and reexports (see 

below). Title III requires the President to designate countries as Destinations of Diversion 

Concern if he determines that the government of the country allows 

certain goods, services, or technologies through the country to Iranian end-users or Iranian 

intermediaries. Further, the President must impose a license requirement under the International 

Traffic in Arms Regulations or under the EAR, as applicable, pertaining to those goods, services, 

or technologies within 45 days of submitting to Congress a report notifying it of the designation 

of a country as a Destination of Diversion Concern. 

Iran. No person may export or reexport items subject to the EAR if such transaction is 

OFAC. Virtually 

all trade and investment activities with Iran by U.S. persons, wherever located, are prohibited by 

the Iranian Transactions Regulations. Certain trade activities by non-U.S. persons, including 

some reexports, are also prohibited by OFAC under these regulations. 

The Department of Commerce imposes license requirements for exports and reexports to Iran of 

most items on the CCL. The Iran-Iraq Arms Non-Proliferation Act of October 23, 1992 

(IIANPA) requires BIS to deny licenses for items controlled to Iran for national security 

(Section 5 of the EAA) or foreign policy (Section 6 of the EAA) reasons. License applications 

for exports or reexports of these items are subject to a general policy of denial, absent contract 

sanctity or a Presidential waiver of restrictions under IIANPA. In some cases, the EAR impose 

license requirements on items designated as EAR99 that are (1) destined to end-users listed in 

of the EAR. Because they are not specific to Iran, the license requirements for items designated 
Notwithstanding Department of Commerce license requirements and licensing policies, OFAC is 

the primary licensing agency for exports and reexports to Iran, and BIS does not, in practice, 

receive or process license applications for transactions involving Iran except under the following 

circumstances: (1) the license is for the deemed export of technology or source code subject to 

the EAR to Iranian nationals in the United States or of the deemed reexport of such technology 

or source code to Iranian nationals located abroad; or (2) the license is for the export or reexport 

of items to certain end-users or for certain end uses in Iran that are prohibited pursuant to 

provisions of the EAR that are not specific to Iran (e.g., Part 744 end-use/end-user controls). 

BIS takes enforcement action against violations of the Iran-related provisions of the EAR. It is a 

violation of the EAR to export or reexport to Iran any item that is subject to the EAR including 

items designated as EAR99 if such transaction requires authorization by OFAC pursuant to the 

Department of the Tre

been obtained. 

Iraq

The Department of Commerce requires a license for the export or reexport to Iraq, or transfer 

within Iraq, of the following: 

any item controlled on the CCL for National Security (NS), Missile Technology (MT), 

Nuclear Nonproliferation (NP), Chemical Weapons Convention (CW), Chemical & 

Biological Weapons (CB), Regional Stability (RS), Crime Control (CC), Encryption 

Information (EI), Significant Items (SI), or Surreptitious Listening (SL) reasons; 

any item controlled on the CCL for United Nations Embargo (UN) reasons; 

items on the CCL controlled for RS reasons under the following ECCNs: 0B999, 0D999, 

1B999, 1C992, 1C995, 1C997, 1C999 and 6A992; 

any item subject to the EAR if, at the time of the export, reexport or transfer, it is known 

the item will be, or is intended to be, used for a military end use or by a military end-user. 

As defined specifically for Iraq, a military end-user is any person or entity whose actions or 

functions are intended to support military end uses and who is not recognized as a legitimate 

into a military item described on the U.S. Munitions List (USML) (22 CFR Part 121, 

International Traffic in Arms Regulations (ITAR)), or the Wassenaar Arrangement Munitions 

List (WAML); or use, development, or deployment of military items described on the USML or 

the WAML. The Department reviews license applications destined to such end-users under a 

policy of denial. 
The Department of Commerce also reviews license applications for the following items under a 

general policy of denial: 

items destined for use in Iraqi civil nuclear or military nuclear activity (except for use of 

isotopes for medical, industrial, or agricultural purposes); 

machine tools controlled for NS reasons, machine tools controlled for NP reasons, any 

item controlled for CC or UN reasons, or any item controlled under an ECCN ending in 

research, design, development, support, maintenance, or manufacture of Iraqi weapons of 

mass destruction, ballistic missiles, or arms and related materiel; and 

items controlled for RS reasons under ECCNs 0B999, 0D999, 1B999, 1C992, 1C995, 

1C997, 1C999 or 6A992 that will not contribute to the building of Iraqi civil 

infrastructure. 

The Department of Commerce additionally requires a license for exports, reexports, or transfers 

of any item subject to the EAR to persons listed in the Annex to Executive Order 13315, as 

ficials and Their Family 

the Secretary of the Treasury pursuant to that executive order. U.S. persons are not required to 

seek separate BIS authorization for an export, reexport, or transfer to a designated person that 

has already been authorized by the Department of the Treasury; however, license applications for 

such transactions are subject to a general policy of denial by the Department of Commerce. 

North Korea 

North Korea is subject to sanctions based on its nuclear and ballistic missile tests, engagement in 

proliferation and other illicit activities and human rights violations. Consistent with UN Security 

Council Resolutions 1718 and 1874, and as set forth in Section 746.4 of the EAR, BIS requires a 

license for the export or reexport to North Korea of all items subject to the EAR, except food and 

medicines designated as EAR99. Other controls on North Korea are located in Section 742.19 of 

the EAR.16 

Pursuant to Section 746.4 of the EAR, applications for items requiring a license for export or 

reexport to North Korea are subject to case-by-case review, except as follows: 

Applications to export or reexport luxury goods are subject to a general policy of denial. 

16

Section 742.19 of the EAR has not been amended to reflect the rescission. 
Applications to export or reexport arms and related materiel; items specified by UN 

documents S/2006/814, S/2006/815 and S/2006/853; and other items that the UN 

Security Council, or the Sanctions Committee established pursuant to UN Security 

Council Resolution 1718, has determined could contribute to North Korea's nuclearrelated, ballistic missile-related or other weapons of mass destruction-related programs, 

are subject to a general policy of denial. 

Applications to export or reexport items controlled for NP and MT reasons (except 

ECCN 7A103 items) are subject to a general policy of denial. 

Applications to export or reexport items controlled for chemical and biological weapons 

and NS reasons, as well as applications to export or reexport many items only controlled 

for Anti-Terrorism reasons, are subject to a general policy of denial. 

Applications to export or reexport humanitarian items (e.g., blankets, basic footwear, 

heating oil, and other items meeting subsistence needs) intended for the benefit of the 

North Korean people; items in support of UN humanitarian efforts; and agricultural 

commodities or medical device items that are determined by BIS, in consultation with the 

interagency license review community, not to be luxury goods are subject to a general 

policy of approval. 

Persons Sanctioned by the State Department 

Pursuant to Section 744.20 of the EAR, the Department of Commerce may impose, as foreign 

policy controls, export and reexport license requirements and set licensing policy with respect to 

certain entities that have been sanctioned by the State Department. Entities upon which export 

and reexport license requirements have been imposed under Section 744.20 of the EAR are 

included on the Entity List, Supplement No. 4 to Section 744 of the EAR. Not all entities 

sanctioned by the State Department are incorporated into the Entity List. 

Sudan 

On July 13, 2011, the Department of Commerce published a final rule in the Federal Register

 9, 2011 formal 

Sudan to the Commerce Country Chart. South Sudan is in Country Group B and exports to South 

Sudan are thus eligible for certain License Exceptions. The Anti-Terrorism controls that 

Sudan. 

The U.S. Government requires a license for the export and reexport of nearly all items on the 

CCL to Sudan. Many items controlled on the CCL to Sudan may require a license from both the 

Departments of Commerce and the Treasury. License applications may be submitted to both 

agencies concurrently. 
The Department of Commerce reviews, under a general policy of denial, applications for the 

export and reexport of all items controlled for chemical, biological, missile, and nuclear 

proliferation reasons, military-related items controlled for national security or regional stability 

reasons (CCL entries ending in the number 018), and certain items controlled for national 

security or foreign policy reasons, such as aircraft, cryptologic items, and explosive device 

detectors, for all end-users in Sudan. Other non-military-related items that are controlled to 

Sudan for national security or foreign policy reasons are subject to a general policy of denial for 

military end-users or end uses, and case-by-case review for non-military end-users or end uses. 

Syria

On May 11, 2004, the President issued Executive Order 13338 to implement Sections 5(a)(1) and 

5(a)(2)(A) of the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003 

(SAA). In compliance with th

license requirements and licensing policy for Syria to restrict all exports or reexports to Syria of 

items subject to the EAR (with the limited exceptions described below), as specified in General 

Order No. 2, which was published in the Federal Register on May 14, 2004 (69 FR 26766). 

The Department of Commerce requires a license for the export or reexport to Syria of all 

commodities, technology, and software subject to the EAR, except food and medicine designated 

source code designated as EAR99. Additionally, certain categories of items are authorized for 

export or reexport to Syria under License Exceptions: 

personal baggage for individuals leaving the United States; 

items for the use of the news media under certain conditions; 

exports for U.S. Government personnel and agencies; 

certain operation technology and software, sales technology, and software updates; and 

temporary sojourn of certain civil aircraft reexported to Syria. 

The Department of Commerce generally denies license applications for exports or reexports to 

Syria

Executive Order 13338, the Department considers applications for the following on a case-bycase basis: 

items in support of U.S. Government activities; 

medicine on the CCL and medical devices; 

parts and components intended to ensure the safety of civil aviation and safe operation of 

commercial passenger aircraft; 
aircraft chartered by the Syrian Government for the transport of Syrian Government 

officials on official Syrian Government business; 

telecommunications equipment and associated computers, software, and technology to 

enhance the free flow of information, including items for general academic, 

administrative, business, and personal use; and 

items in support of UN operations in Syria. 

United Nations Security Council Arms Embargoes 

arms and related materiel to several countries, geographic regions, or persons within certain 

countries. UN embargoes of this kind are currently in place for the Democratic Republic of the 

 Libya, North Korea, Somalia, and 

Sudan. The Department of Commerce expects to publish a regulation in the Federal Register

that would implement these embargoes in the EAR and would also reflect the United Nations 

-related 

materiel to Rwanda and Sierra Leone, pursuant to United Nations Security Council Resolutions 

1823 and 1940 respectively. 

Summary of 2011 Changes 

On December 12, 2011, the Department of Commerce published a final rule in the Federal 

Register (76 FR 77115) amending the EAR to move the substantive provisions of the 

comprehensive sanctions against Syria from General Order No. 2 in Supplement No. 1 to Part 

736 to a revised Section 746.9, while also retaining certain of these provisions in the General 

Order. Part 746 of the EAR addresses comprehensive sanctions and other special controls and is 

an appropriate place to include these Syria sanctions provisions. This move will enhance public 

awareness and understanding of comprehensive U.S. sanctions against Syria under the EAR. 

Existing licensing requirements and policies remain unchanged. 

Analysis of Controls as Required by Section 6(f) of the Export Administration Act 

A. The Purpose of the Controls 

Certain Designated Persons 

The purpose of controls on designated terrorist persons (natural persons, entities, and groups) 

and proliferators of weapons of mass destruction and their supporters is to restrict exports of 

items that would be useful in enhancing the capability of these persons to undertake activities 

that support terrorism or contribute to the development of WMD. 
The purpose of controls on political and military leaders and other persons in Burma that 

contribute to civil unrest and suppression of basic rights and freedoms in that country is to 

prevent these persons from acquiring items that could be used to carry out activities that are 

detrimental to U.S. foreign policy interests. 

Cuba 

The United States imposed an embargo on Cuba nearly five decades ago because Cuban 

Government actions posed a serious threat to the stability of the Western Hemisphere and the 

Cuban Government expropriated property of U.S. citizens without compensation. In March 

1982, the Secretary of State designated Cuba as a state sponsor of terrorism under Section 6(j) of 

the EAA. The purpose of the controls is to restrict exports that would allow Cuba to act as a 

resolve to maintain stability in the region and to actively work against the threat of terrorism and 

other humanitarian items, such as medicines and medical devices, ensures that the Cuban 

population is not deprived of basic human supplies. 

Iran 

-

supporting capabilities and to address other U.S. and international foreign policy concerns, 

including nonproliferation, human rights, and regional stability. By restricting the export of 

items that could have a military use, the controls demonstrate the resolve of the United States not 

to provide any direct or indirect military support for Iran and to support other U.S. foreign policy 

and medical equipment is designed to ensure that U.S. export controls on Iran do not prevent the 

Iranian population from receiving what it needs for humanitarian purposes. 

Iraq 

The purpose of the controls is to restrict exports to insurgents within Iraq and other inappropriate 

military end-users in Iraq, including the former Iraqi leadership, thereby limiting their ability to 

enhance or expand their activities. 

North Korea 

The purpose of the controls is to restrict certain exports and reexports to North Korea to comply 

United States

weapons, missiles and missile technology, and other weapons of mass destruction. 

Persons Sanctioned by the State Department 
The purpose of the controls is to restrict exports to persons engaged in activities that are contrary 

to the foreign policy interests of the United States or have violated U.S. export control laws. 

to activities of concern as well as its 

resolve to actively work against the diversion of sensitive items to unauthorized end-users or end 

uses. 

Sudan 

The U.S. sanctions and export controls remain in place against Sudan to restrict access to items 

maintained by BIS pursuant to the EAR support the broader sanctions maintained by OFAC 

pursuant to several executive orders and consistent with other applicable laws. 

Syria 

The Syrian Government continues to host Palestinian terrorist organizations in Syria and to 

provide political and material support to Hezbollah and other terrorist organizations in Lebanon. 

Moreover, the Syrian Government allows Iran to re-supply Hezbollah through Syrian territory. 

affairs, the flow of foreign fighters through Syria destined for Iraq, and Syrian nuclear, missile, 

and chemical/biological programs. Additionally, the Government of Syria engages in 

widespread and routine abuses of human rights, including the use of violence and torture, 

arbitrary arrests, and detention of peaceful protesters. U.S. export controls reflect U.S. 

opposition to these activities. The controls also promote other U.S. foreign policy interests, 

including the protection of human rights and the encouragement of regional stability. 

United Nations Security Council Arms Embargoes 

BIS expects to implement controls in the EAR on arms-related items to the Democratic Republic 

 Libya, North Korea, Somalia, 

and Sudan to prevent any U.S. contribution to potential conflict within these countries and to 

conform to United Nations-mandated sanctions. 

B. Considerations and/or Determinations of the Secretary of Commerce 

1. Probability of Achieving Intended Foreign Policy Purpose. The Secretary has 

determined that the controls described in this Chapter are likely to achieve the intended foreign 

policy purpose, in light of other factors, including foreign availability from other countries. He 

has further determined that the foreign policy purpose cannot be achieved through negotiations 

or other alternative means. For each of the controls described in this Chapter, the Secretary has 

determined that such restrictions have denied the targeted countries and persons access to 

resources for use in activities that are contrary to the foreign policy of the United States. The 
controls described in this Chapter seek to have the targeted entities or governments modify their 

actions. In addition, the applicable controls may reduce the potential for conflict. 

Certain Designated Persons 

The Secretary has determined that foreign policy controls will thwart the access that these 

persons have had to U.S.-origin items that could support terrorist operations, WMD proliferation, 

or other restricted activities. 

Cuba 

The Secretary has determined that the sanctions will help to bring about a peaceful and stable 

transition toward democracy and a free market economy in Cuba while providing for the basic 

human needs of the Cuban people. 

Iran 

U.S.-origin items that could contribute to Iranian support of terrorism and promotion of regional 

threats to U.S. interests. 

Iraq 

The Secretary has determined that foreign policy controls will restrict the ability of terrorists and 

insurgent groups to obtain and use U.S.-origin items to attack U.S. forces or to destabilize the 

current Government of Iraq. 

North Korea 

The Secretary has determined that the foreign policy controls will meet U.S. obligations under 

proliferation of nuclear weapons and other WMDs. 

Persons Sanctioned by the State Department 

The Secretary has determined that foreign policy controls will thwart the access that these 

persons have to U.S.-origin items and their ability to divert such items to unauthorized end-users 

or end uses. 

Sudan 

The Secretary has determined that foreign policy controls will restrict the Government of 

-origin items in support of military activities in Darfur. 

The controls are also likely to impede terrorist activities in Sudan and support international 

efforts to end the humanitarian crisis in Darfur. 
Syria 

The Secretary has determined that foreign policy controls will contribute to the Government of 

Syria ending its support of terrorist groups in Lebanon and elsewhere and its abuse of the human 

rights of its citizens. 

United Nations Security Council Arms Embargoes 

The Secretary expects that embargoes and partial embargoes on exports of arms-related items to 

ebanon, Liberia, 

Libya, North Korea, Somalia, and Sudan will meet U.S. obligations under relevant UN Security 

Council resolutions. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that these 

controls are compatible with U.S. foreign policy objectives, and that the extension of these 

controls will not have any significant adverse foreign policy consequences. The controls 

complement U.S. foreign policy and other aspects of U.S. relations with these persons and 

countries. They encourage these persons and governments to modify their actions with the goal 

of improving conditions in their region. These controls are consistent with U.S. foreign policy 

goals of promoting peace and stability, and preventing weapons proliferation and human rights 

abuses. 

3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to 

these controls is not likely to render the controls ineffective and that any adverse reaction by 

other countries would not be counterproductive to U.S. foreign policy interests. Notwithstanding 

the fact that most countries have not imposed embargoes as comprehensive as those of the 

United States, and that some countries have challenged certain U.S. controls as unwarranted 

extraterritorial measures, the overriding foreign policy objective of maintaining these controls 

outweighs negative foreign reactions. Opposition to U.S. foreign policy-based controls by many 

of our major trading partners, including some close allies, continues to be a point of contention. 

This reaction has led some foreign firms to design-out U.S. components or to cite the lack of 

their own national sanctions as a marketing tool to secure business contracts that might have 

gone to U.S. companies. In some instances, foreign governments have instructed foreign firms 

to ignore U.S. reexport controls. However, in certain areas, such as the nuclear threat posed by 

Iran and North Korea and the genocide in the Darfur region of Sudan, the United States has 

received broader international support for its sanctions policies from other countries. 

Certain Designated Persons 

Many countries support U.S. efforts to ensure that exports and reexports of U.S.-origin items are 

not used in terrorist activities, the development of WMD, or by entities or foreign governments 

that are perpetrating or promoting civil unrest in their own or other countries. The Department 

of Commerce promotes these shared objectives by blocking designated groups and individuals 
from acquiring commodities that could aid or assist these groups in committing future acts 

deemed to support these activities. Although some countries are considering restrictive 

legislation, very few maintain export controls similar to those implemented by the United States. 

Many countries have imposed controls on entities specifically designated in UNSCRs. 

Cuba 

Although most countries recognize the right of the United States to determine its own foreign 

policy and security concerns and share U.S. concerns regarding Cuba, many countries continue 

to oppose controls on trade between the United States and Cuba, and an annual United Nations 

General Assembly resolution condemning the embargo passes each year with overwhelming 

support, with only the United States and Israel voting against it. Many nations support greater 

freedoms and economic reforms in Cuba, but refrain from overt criticism of the Cuban 

Government. 

Iran 

and attempts to acquire WMD. This is especially the case in the nuclear context, where 

-à-vis its nuclear program have led to the 

unanimous adoption of UN Security Council resolutions imposing sanctions on Iran pursuant to 

Chapter VII of the UN Charter. The member states of the Group of Eight, the European Union, 

the members of the Nuclear Suppliers Group, and other multilateral bodies have joined the 

have called on Iran to cooperate fully and transparently with the International Atomic Energy 

Agency (IAEA). In general, however, U.S. controls on commercial goods to Iran are more 

Iraq 

The United States continues to impose an arms embargo on military end-users and end uses that 

are not affiliated with the Multinational Force in Iraq or the Iraqi Government in accordance with 

its obligations as a member of the United Nations. Many other member states also comply with 

these obligations and impose an arms embargo on Iraq. Other nations also share U.S. concerns 

about insurgent activities in Iraq. 

North Korea 

The United States maintained a comprehensive trade embargo against North Korea for almost 50 

years, until 1994. In general, during that time period, U.S. allies largely acted in concert with the 

United States to deny North Korea strategic equipment and technology. Similarly, the easing of 

U.S. sanctions toward North Korea and the removal of some U.S. controls in June 2000 were 

2006 and 2009, the United Nations Security Council adopted UN Security Council Resolutions 
1718 and 1874 imposing additional sanctions on North Korea and demonstrating international 

-related activities. Pursuant to these 

UN sanctions, and on the basis of other relevant laws and regulations, the Department of 

Commerce continues to apply sanctions on North Korea which other countries generally support. 

Persons Sanctioned by the State Department 

Although other countries share U.S. concerns regarding the diversion of goods to unauthorized 

end-users or end uses, few countries maintain controls similar to those implemented by the 

United States. 

Sudan 

The United States maintains sanctions on Sudan because of its continued support for 

international terrorism, ongoing efforts to destabilize neighboring governments, and because of 

the prevalence of human rights violations, including slavery and the denial of religious freedom 

to the population of the country. Sanctions against Sudan have not been modified because Sudan 

has not taken sufficient steps to resolve the conflict in Darfur. The United States continues to 

consult with other countries regarding the humanitarian crisis in Darfur bilaterally and 

multilaterally, including through the United Nations. 

Syria 

support for terrorist groups, interdict the flow of foreign fighters destined for Iraq, refrain from 

he human rights of its citizens. 

countries maintain controls similar to those implemented by the United States. 

United Nations Security Council Arms Embargoes 

Expected amendments to the EAR implementing UN arms embargoes and partial embargoes on 

Libya, North Korea, Somalia, and Sudan will be consistent with UN objectives. The U.S. 

Government has received no significant objections to these UN Security Council-mandated 

controls. 

4. Economic Impact on United States Industry. The Secretary has determined that any 

adverse effect of these controls on the economy of the United States, including on the 

competitive position of the United States in the international economy, does not exceed the 

benefit to U.S. foreign policy objectives. 
Certain Designated Persons 

The Department of Commerce did not review any license applications for the particular persons 

designated by the Treasury Department in fiscal year 2011. The economic impact of these 

controls is presumably minimal. The Department of the Treasury maintains restrictions on 

activities of U.S. persons involving designated terrorist entities, proliferators, and those involved 

in civil unrest and suppression of basic rights and freedoms in Burma, which the Department of 

Cuba 

The U.S. Government requires authorization in the form of either a license or an Agricultural 

License Exception notice for the export or reexport to Cuba of most U.S.-origin commodities, 

technology, and software subject to the EAR. The number of licenses and notices that the 

Department of Commerce issued for exports or reexports to Cuba increased significantly from 

1998 through 2002, due to changes in U.S. export policies made during the late 1990s. There 

has been a general decline in the number of licenses and notices issued since that time. U.S. 

export sanctions on Cuba have had some impact on U.S. industry. However, the authorized 

export of large volumes of agricultural commodities has somewhat reduced this impact. 

In fiscal year 2011, the Department of Commerce approved 334 license applications, valued at 

over $1.7 billion, for Cuba. There was an increase in the number and a decrease in the value of 

license applications approved in fiscal year 2011 in comparison to fiscal year 2010. Also during 

fiscal year 2011, the Department issued 108 notices of authorization valued at approximately 

$2.6 billion under License Exception AGR. The Department of Commerce and reviewing 

agencies had no objections to these notices. The number of approved licenses and notices totaled 

442, valued at over $4.3 billion. 

In fiscal year 2011, the Department returned without action 114 license applications, valued at 

over $1.1 billion, and rejected 7 license applications, valued at over $145,449. Errors and 

deficiencies were the primary reasons for the number of returned applications. The Department 

did not revoke any previously validated licenses during this period. 

Other countries have not imposed restrictions on exports to Cuba comparable to those imposed 

pursuant to U.S. sanctions. World 

Factbook 2011, Cuba imported an estimated $10.45 billion in commodities in 2010 (the most 

recent year for which statistics are available), up from $9 billion the year before. Leading Cuban 

import

China (11.7 percent), Spain 

(8.5 percent), and Brazil (4.6 percent). Imports from the United States decreased from 6.9 

percent in 2009 to 4.1 percent in 2010. 
Iran 

The U.S. Government maintains a policy of denial for license applications for exports and 

reexports of items on the CCL to Iran, consistent with the provisions of the Iran-Iraq Arms NonProliferation Act of 1992 and the U.S. trade and investment embargo of 1995. 

Consistent with Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), the U.S. 

Government authorizes exports and reexports of food, agricultural equipment, medicine, and 

medical supplies and equipment to Iran. According to the U.S. Census Bureau statistics, total 

U.S. exports to Iran were valued at $208 million in calendar year 2010, a decrease from 

$280 million in 2009. The top U.S. commodities exported to Iran in 2010 were agricultural 

commodities, medical equipment, and pharmaceutical preparations. 

Since 1997, the Department of the Treasury has had primary jurisdiction for the export and 

reexport of items subject to the EAR to Iran, and the Department of Commerce has sole 

jurisdiction for deemed exports or deemed reexports (releases of controlled U.S. technology or 

source code to Iranian nationals in the United States or abroad). The Department of Commerce 

approved 95 deemed export licenses for Iranian nationals during fiscal year 2011. Deemed 

export and reexport licenses reflect a nominal value of technology and source code released to 

Iranian national employees or students. 

xports of 

industrial machinery, motor vehicles and auto parts, power generating machinery, measuring and 

controlling devices, computers, plastics and resins, and industrial organic chemicals. According 

to the CIA World Factbook 2011, Iran imported an estimated $59 billion worth of industrial 

supplies, capital goods, foodstuffs and other consumer goods, and technical services in 2010. 

China (17.4 percent), United Arab 

Emirates (UAE) (16.7 percent), Germany (7.6 percent), South Korea (6.3 percent), Russia (5.7 

percent), Turkey (4.8 percent), and Italy (4.2 percent). 

The U.S. sanctions on Iran, while necessary to add pressure for Iran to comply with its nuclear 

nonproliferation obligations, have adversely affected U.S. industry. Immediately prior to the 

sanctions, U.S. exports to Iran totaled close to $2.2 billion. However, the sanctions resulted in a 

substantial decline in U.S. exports to the country. 

Iraq 

Although the security situation and the presence of foreign fighters supporting the insurgency in 

Iraq, among other issues, continue to be of concern to the United States, the United States also 

y and 

requirements reflect the complexity and challenges of doing business in Iraq. 
U.S. export controls specific to Iraq have had little impact on U.S. industry, because the primary 

focus of those controls is on arms sales to non-coalition forces. In 2010, according to the most 

recent U.S. Census Bureau statistics available, U.S. exports to Iraq were worth $1.6 billion. In 

addition to agricultural commodities, other strong categories of U.S. exports to Iraq included 

military-related items, industrial engines and machines, vehicles and parts, and 

telecommunications equipment. Since licensing jurisdiction for Iraq was returned to the 

Department of Commerce in 2004, the majority of license applications received have been for 

equipment in support of or for use in reconstruction of Iraq and training activities for its police 

and military. 

In fiscal year 2011, the Department approved 125 license applications for Iraq, valued at over 

$620 million. The number and value of approvals in 2011 increased significantly from 

97 approvals, valued at $303 million, in 2010, likely due to additional reconstruction activities. 

The Department returned 30 license applications without action in 2011, valued at nearly 

$7.6 million, primarily due to exporters submitting applications for transactions that did not 

require licenses. In 2011, the Department did not deny any license applications for Iraq. 

According to the CIA World Factbook 2011, Iraq imported an estimated $41.1 billion in 

commodities in 2010 (the most recent year for which statistics are available), down from an 

estimated $55.4 billion in 2009. Leading Iraqi imports included food, medicine, and 

), Syria (18.6 percent), the 

North Korea 

Consistent with United Nations Security Council Resolution 1718, a BIS license is required for 

the export or reexport to North Korea of all items subject to the EAR, with the exception of food 

and medicines designated as EAR99 (i.e., medicines subject to the EAR but not controlled on the 

CCL). As a result of the small size of the North Korean economy, U.S. export sanctions on 

North Korea have had a minimal impact on U.S. industry. Agricultural products and 

humanitarian goods are the primary U.S. exports to North Korea. 

In fiscal year 2011, the Department approved 23 license applications, valued at $38.4 million. 

The total license value in 2011 was much higher than in 2010 ($3.1 million), primarily due to a 

small number of high-value humanitarian exports in 2009 and 2011. The Department of 

Commerce returned without action 14 license applications in 2011, valued at $8.4 million. 

Applications were returned without action most often because the applicants accidentally 

selected North Korea instead of South Korea in the application system. The Department did not 

deny any license applications or revoke any previously validated licenses. 
The CIA World Factbook 2011 estimates that North Korean imports totaled $3.1 billion in 2009 

(the most recent year for which figures are available) with primary imports including petroleum, 

nd 

India (8.9 percent). 

Persons Sanctioned by the State Department 

The impact on U.S. industry of these controls is minimal as they target only certain persons listed 

on the Entity List (Supplement No. 4 to Part 744 of the EAR). 

Sudan 

The United States imposed sanctions on Sudan in 1997 in response to the Government of 

the prevalence of human rights violations. Both the Departments of Commerce and the Treasury 

maintain license requirements for certain exports and reexports to Sudan of items subject to the 

EAR. The Department of the Treasury is solely responsible for licensing the export of 

agricultural commodities, medicines, and medical items not listed on the CCL under the 

provisions of TSRA, and is also responsible for licensing other items not listed on the CCL. 

U.S. unilateral export sanctions on Sudan have had a minor impact on U.S. industry. Sudan was 

not a significant export market for the United States before sanctions were imposed in 1997. 

Moreover, a large proportion of exports to Sudan prior to the imposition of sanctions involved 

items designated as EAR99, which do not require a Department of Commerce license for export 

to Sudan. 

On July 13, 2011, the Department of Commerce published a final rule in the Federal Register

recognition of the Republic of South Sudan (South Sudan) as a new country. BIS added South 

Sudan to the Commerce Country Chart. South Sudan is included in Country Group B, thus 

making exports to South Sudan eligible for certain License Exceptions. U.S. trade volumes with 

Sudan and with new South Sudan are both relatively small. BIS does not expect that the creation 

of South Sudan will significantly affect the limited impact that trade with Sudan currently has on 

U.S. industry. 

Licensing volume and dollar value for exports to Sudan have fallen since the January 2011 

referendum on self-determination for the region of southern Sudan, from 162 licenses valued at 

$66.6 million in fiscal year 2010 to 123 licenses valued at $49.0 million in 2011. In fiscal year 

2011, the Department of Commerce approved 123 license applications for Sudan, valued at 

$49.0 million. During the same period, 64 applications valued at $37.5 million were returned 

without action. Most of the returned applications contained errors and deficiencies or were for 
EAR99 items that did not require a BIS license for export to Sudan. During fiscal year 2011, the 

Department of Commerce denied one license application valued at approximately $18,000. No 

licenses issued by the Department for export or reexport to Sudan were revoked during fiscal 

year 2011. 

U.S. Census Bureau statistics show that in 2011, U.S. exports to Sudan were valued at $115.6 

million, and consisted primarily of agricultural exports. The CIA World Factbook 2011

estimates that Sudan

(7.7 percent), India (6.1 percent), and the UAE (5.7 percent). Leading imports were foodstuffs, 

manufactured goods, refinery and transport equipment, medicines and chemicals, textiles, and 

wheat. 

Syria

The U.S. Government requires a license for the export and reexport to Syria of all U.S.-origin 

commodities, technology, and software subject to the EAR except for food and certain medicine 

designated as EAR99. Certain categories of items, particularly medical devices, 

telecommunications equipment, and parts and components intended to ensure the safety of civil 

aviation and the safe operation of commercial passenger aircraft are subject to case-by-case 

review based on the Presidential waiver exercised when the SAA was implemented. U.S. export 

sanctions on Syria have had a minimal impact on U.S. industry. 

In fiscal year 2010, there was an increase in the number and in the dollar value of approved 

license applications related to the safety of civil aviation in Syria. The increase primarily 

resulted from an exceptional number of high dollar value license approvals for the overhaul or 

replacement 

licenses represent a number of potential bidders seeking the same contract to do service work. 

Additionally, there was a sevenfold increase in the dollar value of approved license applications 

for telecommunications items, the majority of which were in support of the expansion and 

potential bidders seeking the same contract. 

FY 2011 continued the generally upward trend in licensing volume and dollar values, with 432 

approved licenses valued at $1.55 billion. Also during fiscal year 2011, the Department returned 

without action 108 license applications, valued at over $256 million, and denied 9 license 

applications, valued at over $6.3 million. The Department revoked four licenses related to 

servicing of VIP aircraft, and suspended nine licenses and a portion of a tenth in support of the 

overhaul of two long-range, high capacity comm

national carrier Syrian Arab Airlines. These suspensions and revocations were in response to the 
including the use of violence and torture, arbitrary arrests, and detentions of peaceful protesters. 

Other countries have imposed limited sanctions against certain Syrian entities, but have not 

imposed comprehensive trade sanctions on Syria similar to those of the United States. 

According to the CIA World Factbook 2011, Syria imported an estimated $15.4 billion in 

commodities in 2010. Leading Syrian imports include machinery and transport equipment, 

electric power machinery, food and livestock, metal and metal products, chemicals and chemical 

(5.5 percent), Russia (4.6 percent), Lebanon (4.4 percent), Egypt (4.3 percent), Iran (4.0 percent), 

and South Korea (4.0 percent). 

United Nations Security Council Arms Embargoes 

The UN currently maintains embargoes, or partial embargoes, on the export of certain arms and 

related materiel to 

Lebanon, Liberia, Libya, North Korea, Somalia, and Sudan. The Department of Commerce 

expects to implement these arms embargoes for purposes of the EAR through a regulation to be 

published in the Federal Register. The amendment is also expected to reflect the United Nations 

-related 

materiel to Rwanda and Sierra Leone, pursuant to United Nations Security Council Resolutions 

1823 and 1940 respectively. 

5. Effective Enforcement of Controls. The Secretary has determined that the United States 

has the ability to effectively enforce these controls. Controls on exports to embargoed and 

sanctioned countries and persons, including those discussed in this Chapter, raise a number of 

challenges. These include the need to concentrate limited resources on priority areas, develop 

new strategies to limit reexport violations, strengthen the cooperative relationship with other law 

enforcement agencies in the United States and overseas, and maintain a consistent outreach effort 

to help limit U.S. business vulnerability. Overall, the sanctions are generally understood and 

supported by the U.S. public. Voluntary cooperation from most U.S. exporters is common. 

The Department conducted a number of enforcement actions regarding noncompliance with 

these export controls during fiscal year 2011. For example: 

Transshipment of Oncology System to Iran 

On September 23, 2011, Bahram Maghazehe was denied export privileges under the EAR for six 

years based on his actions to evade the EAR by working with a U.S. company to arrange for the 

export without a license through the United Arab Emirates to Iran of a Varian Ximatron 
oncology system, a medical simulator for treatment planning of radiotherapy, which was subject 

to the EAR. 

Export of Electronics to a Specially Designated National 

On January 21, 2011, in U.S. District Court in the Southern District of Florida, Ulises Talavera 

TransAmerica Express, was sentenced to three years of probation and ordered to forfeit 

$100,000; Khalid Safadi was sentenced to six months of home detention, one year of probation 

three years of probation. On January 4, 2011, also in U.S. District Court in the Southern District 

of Florida, Emilio Gonzalez Niera was sentenced to six months of home detention and one year 

 The 

sentences were related to guilty pleas entered into on September 15, October 1, and October 20, 

2010, by the defendants. Niera, Jumbo Cargo, Safadi, Cedar Distributors, Talavera, and 

TransAmerica Express each pled guilty to conspiracy to illegally supply electronics valued at 

over $500,000 to companies located at the Galeria Page shopping center in Ciudad del Este, 

Paraguay. According to OFAC, Galeria Page serves as a source of fundraising for Hezbollah 

and is managed and owned by Hezbollah members. Galeria Page is on the OFAC list of 

Specially Designated Nationals, prohibiting any transactions or dealings with U.S. persons. The 

documents to conceal the final destination of the shipments. On February 23, 2010, Niera, 

Safadi, and Talavera were arrested by Special Agents from OEE and U.S. Immigration and 

Customs Enforcement. 

C. Consultation with Industry 

In a September 1, 2011 Federal Register notice (76 FR 54426), the Department of Commerce 

solicited comments from industry and the public on the effectiveness of U.S. foreign policybased export controls. The comment period closed on October 3, 2011. A detailed review of all 

public comments received 

seven Technical Advisory Committees are solicited on a regular basis and are not specific to this 

report. 

D. Consultation with Other Countries 

The U.S. Government has made reasonable efforts to achieve the purposes of the U.S. embargoes 

and sanctions through negotiations with other countries, through international fora, and through 

the United Nations, as outlined in the specific country descriptions that follow. 
Certain Designated Persons 

The United States cooperates with allies and partners and shares information on the activities of 

designated terrorist entities. It is expected that strong international support for the U.S. fight 

against terrorism will further facilitate dialogue on foreign export control expansion. 

Cuba 

The U.S. Government has worked diligently with other nations, especially countries in Europe 

and Latin America, to resolve disputes that arise as a result of the U.S. embargo. Differences 

remain between the United States and other countries concerning the best method to encourage 

democracy and human rights. However, many nations share with the United States the ultimate 

goal of a free, peaceful, democratic, and market-oriented Cuba. 

Iran 

The United Stat

particularly the permanent members of the United Nations Security Council and Germany 

(P5+1), as well as other members of the United Nations Security Council, the IAEA Board of 

Governors, and like-minded countries. The United States continues to work with other states to 

includes pressure on Iran to comply with its international obligations and offers of engagement. 

The United States is also working with the IAEA to ensure that the agency has the capabilities it 

outstanding questions and is

Council requests that Iran suspend its proliferation-sensitive nuclear activities as required in UN 

Security Council Resolutions 1737, 1747, 1803, and 1929. The IAEA Director General released 

a very detailed report on the possible military dimensions (PMD) of Iranian nuclear program in 

November 2011, which prompted the IAEA Board of Governors to overwhelmingly adopt a 

ration with the 

IAEA and failure to comply with its international nuclear obligations. 

Iraq 

Prior to Operation Iraqi Freedom and the lifting of the embargo on Iraq, the United States 

maintained an ongoing dialogue on Iraq with other United Nations member states, as well as 

separately, with its allies and partners. Since the lifting of the embargo, the United States has 

continued discussions with many other countries on both a bilateral and multilateral basis. 

North Korea 

The United States continues multilateral and bilateral discussions with various countries, 

Russia on the ongoing issues concerning the nuclear and ballistic missile-related activities of 

North Korea. The United States is working with these and other countries to ensure effective 
implementation of sanctions under UN Security Council Resolutions 1718 and 1874, and will 

continue to work with these countries to achieve the verifiable denuclearization of the Korean 

Peninsula. 

Persons Sanctioned by the State Department 

The United States consults on a regular basis with other countries on proliferation and 

trafficking-related issues. Although other countries share U.S. concerns regarding the diversion 

of goods to unauthorized end-users or end uses, few countries maintain controls similar to those 

implemented by the United States, beyond those entities included in UNSCRs. 

Sudan 

The United States continues to consult with the United Nations, in addition to other countries and 

entities in both bilateral and multilateral forums, regarding the internal conflict in Sudan and to 

address the humanitarian needs of the population. 

Syria 

The United States is in constant communication with other countries regarding the Syrian 

through Syria destined for Iraq, Syrian nuclear, missile, and chemical/biological programs, and 

its abuse of its own citizens. Additionally, the United States has communicated its concerns to 

the Government of Syria directly and forcefully through the U.S. Embassy in Syria and the 

Syrian Ambassador in Washington. 

United Nations Security Council Arms Embargoes 

Most countries support international efforts to stabilize affected countries in order to prevent 

further ethnic conflict and regional instability, including through compliance with the United 

Nations arms embargoes.
CHAPTER 6 

Toxic Chemicals, Chemical Precursors, and Associated Equipment, 

Technology, and Software 

(Sections 742.2, 742.18, 744.4, 744.6, and 745)17

Export Control Program Description and Licensing Policy 

The U.S. Government maintains export controls on certain chemicals, equipment, materials, 

software, technology, and entire plants to further U.S. foreign policy and prevent the 

proliferation and use of chemical weapons. The U.S. Government implements these controls in 

coordination with the Australia Group (AG), an informal forum of 40 nations and the European 

Commission that is dedicated to halting the proliferation of chemical and biological weapons. 

(See Appendix II for a complete list of AG members.) Also, the United States fulfills its 

obligations under the Chemical Weapons Convention (CWC or the Convention) by maintaining 

controls on certain chemicals.18 

Australia Group Controls 

The AG was formed in 1985 when the United States and 14 other nations agreed to enhance and 

harmonize controls on chemicals that could be used to produce chemical weapons. Since then, 

the AG has expanded its membership and has expanded its export control list to cover toxic 

biological agents and dual-use chemical and biological production related equipment and 

technologies. Member countries use the AG common control list and guidelines as a basis for 

-

which requires consultation with another AG partner that had previously denied an AGcontrolled item if a proposed transaction is essentially identical. 

17 Chapter 7 of this report addresses U.S. biological controls. 

18 The Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons 

as ratified by the United States on April 

25, 1997, and entered into force on April 29, 1997. 
License Requirements and Licensing Policy for AG Controls 

The licensing requirements for chemicals, equipment, materials, software, technology, and entire 

plants imposed in accordance with AG commitments are noted below. There are 20 entries on 

the CCL that are subject to chemical controls. 

The U.S. Government requires a license for the export to all destinations other than AG member 

countries of chemical weapons precursor and intermediate chemicals, as identified on the AG 

common control list, technology for the development, production, and disposal of such items, 

relevant process control software, and the facilities designed to produce such chemicals. 

The U.S. Government also requires a license for the export to all destinations, other than AG 

member countries, of certain chemical manufacturing facilities and equipment, toxic gas 

monitoring systems and detectors that can be used in the production of chemical warfare agents, 

and the technology for the development, production, and disposal of such items. The countries 

to which these licensing requirements apply are listed in Column CB2 of the Commerce Country 

Chart, Part 738, Supplement No. 1 of the Export Administration Regulations (EAR). These 

licensing requirements also apply to the export of these items to designated terrorist-supporting 

countries. 

In addition, the U.S. Government also controls all items subject to the EAR because of chemical 

or biological end use or end-user concerns as part of the Enhanced Proliferation Control 

Initiative (EPCI). 

The U.S. Government requires a license for the export of any commodity, technology, or 

software to all destinations, worldwide, including to AG member countries, when the 

exporter knows that it will be used in the design, development, production, stockpiling, or 

use of chemical weapons. In addition, the U.S. Government may inform an exporter or 

reexporter that a license is required due to an unacceptable risk that the items will be used 

in, or diverted to, chemical weapons proliferation activities anywhere in the world. 

No U.S. person may knowingly support such an export, reexport, or transfer without a 

forwarding that facilitates the export, reexport, or transfer of these items. 

In addition, no U.S. person may, without a license, perform any contract, service, or 

employment knowing that it will directly assist the design, development, production, 

stockpiling, or use of chemical weapons in, or by, any country or destination worldwide. 
The Department of Commerce, in coordination with the Departments of Defense, Energy, and 

State, reviews applications for licenses to export AG-controlled items on a case-by-case basis to 

determine whether the export would make a material contribution to the design, development, 

production, stockpiling, or use of chemical weapons. For licenses to export AG-controlled items 

standard whether 

capabilities. When the Department of Commerce determines, after interagency review, that an 

export will make a contribution meeting these criteria, the Department will deny the license. 

Trade Restrictions under the Chemical Weapons Convention 

The CWC, which entered into force in April 1997, bans the development, production, 

acquisition, stockpiling, retention, use, or transfer of chemical weapons, and establishes an 

extensive verification regime. The CWC Annex on Chemicals groups specified chemicals, 

in a schedule based on factors specified in the Convention, such as the level of toxicity and other 

properties that enable their use in chemical weapons applications. 

The toxic chemicals and precursors on Schedule 1 were previously developed, produced, 

stockpiled or used as chemical weapons, or pose a high risk to the object and purpose of the 

CWC based on the dangers identified in the Convention and have little, if any, use in legitimate 

commercial applications. The toxic chemicals and precursors on Schedule 2 pose a significant 

risk to the object and purpose of the CWC, in light of the dangers identified in the Convention, 

and are not produced in large commercial quantities for legitimate purposes. The toxic 

chemicals and precursors on Schedule 3 have been produced or used as chemical weapons or 

pose a risk to the object and purpose of the CWC, based on the dangers identified in the CWC, 

and are produced in large commercial quantities for legitimate purposes. 

The Department of State, under the International Traffic in Arms Regulations (ITAR), controls 

exports of the chemical warfare agents deemed to have military application, which by their 

ordinary and direct chemical action produce a powerful physiological effect. The Department of 

State controls all CWC Schedule 1 chemicals except ricin and saxitoxin, which are under the 

control of the Department of Commerce. The Department of Commerce controls all Schedule 2 

chemicals except six chemical precursors that are controlled through the ITAR and therefore fall 

under the jurisdiction of the Department of State. All Schedule 3 chemicals are controlled by the 

Department of Commerce. 
License Requirements and Licensing Policy for CWC Controls 

The following is a summary of the export restrictions and licensing requirements for chemicals 

subject to the EAR that are imposed to fulfill CWC treaty obligations: 

A. CWC Schedule 1 chemicals may only be exported or reexported to CWC States Parties, 

and a license is required. Additionally, there are advance notification and annual reporting 

requirements for such exports. A license is also required for the export or reexport of Schedule 2 

chemicals to countries that are not States Parties to the CWC. Exports of Schedule 3 chemicals 

destined to States not Party to the CWC require a license unless the exporter obtains from the 

consignee an End-Use Certificate (issued by the government of the importing country) prior to 

exporting the Schedule 3 chemicals and submits it to BIS. Reexports of Schedule 3 chemicals 

require a license when they are reexported from a State not Party to the CWC to any other State 

not Party to the CWC. 

B. Export license applications for Schedule 1 chemicals to CWC States Parties are reviewed 

on a case-by-case basis. The Department of Commerce approves exports of Schedule 1 and 

Schedule 2 chemicals to CWC States Parties only for purposes not prohibited by the Convention. 

This is the underlying basis for the policy of denial for applications to export Schedule 1 and 

Schedule 2 chemicals to States not Party to the CWC. Additionally, there is a policy to deny 

applications to export Schedule 3 chemicals to States not Party to the CWC unless the importing 

country provides an End-Use Certificate. In addition, the U.S. Government reviews exports and 

reexports of technology related to the development and production of mixtures containing PFIB, 

phosgene, cyanogen chloride, and hydrogen cyanide on a case-by-case basis. 

Summary of 2011 Changes 

On April 20, 2011, the Department of Commerce published a final rule in the Federal Register

(76 FR 22017) to implement the understandings reached at the June 2010 plenary meeting of the 

Australia Group (AG). This final rule amended Export Control Classification Number (ECCN) 

2B350 (Chemical manufacturing facilities and equipment) on the CCL to clarify the meaning of 

which certain chemical manufacturing equipment is made.

Analysis of Control as Required by Section 6(f) of the Export Administration Act

A. The Purpose of the Controls 

The purpose of these controls is to support the efforts of the AG to halt the development and 

production of chemical weapons and to comply with international obligations under the CWC. 
In addition, these controls implement certain measures specified in Executive Order 12735 of 

November 16, 1990, its successor, Executive Order 12938 of November 14, 1994, and the EPCI 

announced on December 13, 1990. In so doing, the controls provide the U.S. Government with 

the authority to regulate the export or reexport of any item from the United States when there is a 

significant risk that it will be used for chemical weapons proliferation purposes. 

The AG works to further nonproliferation objectives through harmonizing export controls, 

exchanging information, and through other diplomatic means. In addition to furthering the 

objectives of the AG, these controls support U.S. compliance efforts with the CWC. To ensure 

that States Parties to the Convention do not transfer chemicals that could assist other states to 

acquire chemical weapons, the CWC requires that States Parties restrict the export of certain 

chemicals listed in 

1925 Geneva Protocol for the Prohibition of the Use in War of Asphyxiating, Poisonous, or other 

Gases, and of Bacteriological Methods of Warfare. 

B. Considerations and/or Determinations of the Secretary of Commerce 

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has 

determined that these controls are likely to achieve the intended foreign policy purpose, in light 

of other factors, including availability of relevant items from other countries, and that the foreign 

policy purpose cannot fully be achieved through negotiations or other alternative means. Many 

of the items covered by these controls have commercial uses and are widely available from 

foreign sources. Some of the major sources of these items are located in industrialized countries 

that are members of the AG and States Parties to the CWC. Although it is not expected that 

export controls alone can prevent the proliferation of chemical weapons, these controls 

strengthen U.S. and liketo be a significant part of the overall nonproliferation strategy of the United States. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that these 

controls are compatible with U.S. foreign policy objectives and that the extension of these 

controls will not have any significant adverse foreign policy consequences. The U.S. 

Government has a strong interest in remaining at the forefront of international efforts to stem the 

proliferation of chemical weapons. These controls are compatible with the multilateral export 

controls for chemicals and related equipment and technology agreed to by the AG. Moreover, 

the U.S. Government has binding international obligations under the CWC: to refrain from 

developing, producing, acquiring, stockpiling, retaining, using or engaging in military 

preparations for the use of chemical weapons; to refrain from assisting, encouraging or inducing 

anyone to engage in prohibited activity; preventing anyone from engaging or assisting in 

prohibited chemical weapons activities; and implementing national legislation to penalize 

prohibited activities and to control certain chemical exports. 
3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to 

these controls is not likely to render the controls ineffective, nor will any adverse reaction by 

other countries be counterproductive to U.S. foreign policy interests. The U.S. Government 

continues to discuss chemical export controls with countries outside of the AG to advance the 

goals of nonproliferation. The governments of some developing countries claim that AG export 

controls discriminate against less industrialized nations by depriving them of goods and 

assistance in the field of chemical technology. The United States considers that these assertions 

are incorrect. In fact, in international forums, the U.S. Government has sought to dispel this 

perception by clarifying the purpose of the controls and by demonstrating that the U.S. 

Government denies few export license requests for shipment to developing countries. 

4. Economic Impact on United States Industry. The Secretary has determined that any 

adverse effect of these controls on the economy of the United States, including on the 

competitive position of the United States in the international economy, does not exceed the 

benefit to U.S. foreign policy objectives. 

In fiscal year 2011, the Department of Commerce approved 3,387 license applications, valued at 

$1,361,463,658 for the export or reexport of chemical precursors, equipment, and related 

technology. The majority of the value of these approvals (71 percent) was for precursor 

chemicals controlled under ECCN 1C350, which are chemicals that have many commercial uses. 

The remaining value of these approvals (29 percent) was for chemical processing equipment 

controlled under ECCN 2B350 and monitoring equipment controlled under ECCN 2B351, which 

covers equipment with many commercial uses. The Department denied 3 license applications 

valued at $89,501, and returned without action 192 license applications valued at $103,132,936. 

The primary reason for returning applications was for insufficient information about the 

transaction. The actual trade in these controlled commodities is significantly greater than the 

value of the license applications submitted because exporters may export many of these 

commodities to AG member countries without a license. 

5. Effective Enforcement of Controls. The Secretary has determined that the United States 

has the ability to enforce these controls effectively. The size, dispersion, diversity, and 

specialized nature of the dual-use chemical industry make detecting and investigating potential 

violations difficult for enforcement personnel. Challenges include distinguishing commercial 

procurement from chemical weapons-related transactions, and establishing appropriate 

commodity thresholds for targeting and tracking exports and reexports for verification of end 

uses and end-user

-

- law enforcement cooperation. In addition, enforcement officers 

may be exposed to personal safety risks when seizing and inspecting chemical materials. 
To meet the challenge of effective enforcement of these controls, the Department of Commerce 

has directed resources toward preventive enforcement, in addition to continued efforts to pursue 

all leads provided by intelligence, industry, and other sources on activities of concern. Also, the 

es about export 

controls related to chemical products and helps prevent the illegal export of dual-use products 

that can be used to make chemical weapons. In cases where unlicensed shipments of chemical 

materials have already taken place, the Department of Commerce has found that, as in other 

export control enforcement cases, analysis of commercial shipping documentation can lead to 

successful investigations and prosecutions. 

The Department conducted a number of enforcement actions regarding noncompliance with 

these export controls, including the recent example summarized below: 

Violations of the Chemical Weapons Convention Regulations (CWCR) - On March 24, 2011, 

Geomet Technologies, L.L.C. was ordered to pay a civil penalty of $35,000 to settle allegations 

that the company failed to declare storage and consumption of scheduled chemicals, and failed to 

establish and maintain records related to the declared consumption and subsequent storage of 

scheduled chemicals, as required by the CWCR. 

C. Consultation with Industry 

In a September 1, 2011 Federal Register notice (76 FR 54426), the Department of Commerce 

solicited comments from the public on the effectiveness of U.S. foreign policy-based export 

controls. The comment period closed on October 3, 2011. A detailed review of all public 

comments received may be found in Appendix I. 

The Department of Commerce interacts with the chemical industry in a number of ways, 

including with individual companies seeking export licenses, through technical advisory 

committees (TACs), and through trade associations. BIS consults regularly with exporting firms 

on proposed export transactions and marketing plans to facilitate the thorough, yet prompt, 

review of export license applications. Through the TACs, the Department of Commerce keeps 

industry representatives abreast of proposals for the review of items on the CCL and gives them 

the opportunity to provide technical input. Comments f

solicited on an ongoing basis and are not specific to this report. 

The Department of Commerce works with chemical industry associations including the 

American Chemistry Council and the Society of Chemical Manufacturers and Affiliates, and 

with government agencies such as the Departments of State, Defense, Energy and the Federal 
Bureau of Investigation, to gain valuable input regarding CWC implementation and to meet the 

D. Consultation with Other Countries 

These controls are consistent with the multilateral export control criteria of the AG, which 

been agreed through negotiations with the member countries of the AG. In addition, a number of 

non-AG countries, including Russia and China, have taken steps to adopt AG-type controls. An 

contacting non-members to encourage them to observe similar export controls. The U.S. 

Government continues to encourage harmonization of export control provisions among AG 

participants to ensure a level playing field for U.S. exporters. 

E. Alternative Means 

The U.S. Government continues to address the problem of the proliferation of chemical weapons 

on a number of fronts. Direct negotiations with countries intent on acquiring chemical weapons 

are not likely to prevent the use of controlled materials in such activities, nor are such 

negotiations likely to affect the behavior of these countries. 

Alternative means to curtail the acquisition and development of chemical warfare capabilities, 

such as diplomatic negotiations, do not obviate the need for controls. Examples of additional 

means that the U.S. Government has used and will continue to use, in an attempt to curb the use 

and spread of weapons of mass destruction, include: 

Sanctions: U.S. laws such as the Chemical and Biological Weapons Control and Warfare 

Elimination Act of 1991 (Pub. L. 102-182, Title III, Dec. 4, 1991, 105 Stat. 1245), the IranIraq Arms Non-Proliferation Act of 1992 (Pub. L. 102-484) (Title XVI), the Iran 

Nonproliferation Act of 2000 (Pub. L. 106-178), the Iran Nonproliferation Amendments 

Act of 2005 (Pub. L. 109-112), and the North Korea Nonproliferation Act of 2006 (Pub. L. 

109-353) provide for the imposition of sanctions on foreign entities and countries for 

certain kinds of chemical and biological weapons-related activity. The U.S. Government 

has imposed sanctions under these authorities on certain entities for chemical weaponsrelated activities. 

Universality of the CWC: The CWC imposes a global ban on the development, 

production, stockpiling, retention, and use of chemical weapons by States Parties and 

prohibits States Parties from assisting, encouraging, or inducing a non-State Party to 

engage in such activities. The CWC also prohibits the direct or indirect transfer of 
chemical weapons, restricts trade in certain chemicals to States not a State Party to the 

CWC, and has created an international organization to monitor the destruction of chemical 

weapons and the production, use, and trade of toxic chemicals and chemical precursors in 

and among States Parties to the CWC. 

As part of its CWC implementation activities, the Department of Commerce also collects 

industry reports regarding the production, processing, consumption, import, and export of toxic 

chemicals and chemical precursors for purposes not prohibited by the CWC (e.g., industrial, 

agricultural, and other peaceful purposes), which are forwarded to the Organization for the 

Prohibition of Chemical Weapons (OPCW) as part of the U.S. declaration. The Department of 

Commerce also acts as the lead, host, and escort for OPCW inspection teams as they inspect 

certain U.S. chemical facilities to verify that activities are consistent with the information 

provided in the U.S. declaration. 

F. Foreign Availability 

Past reviews conducted by the Department of Commerce revealed that a wide range of AG 

chemical precursors and production equipment are available from non-AG countries. Non-AG 

suppliers of precursors and related production equipment include Brazil, Chile, Colombia, India, 

Mexico, China, South Africa, countries of the former Soviet Union, Taiwan, and Thailand. 

However, almost all non-AG suppliers have become States Parties to the CWC and will take 

steps under this treaty to prevent chemical weapons development and production. Moreover, 

successful outreach by AG countries has led to most non-AG suppliers adopting export controls 

membership in both the AG and CWC to secure the cooperation of foreign governments to 

control the foreign availability of chemical precursors and production equipment. 
CHAPTER 7 

Biological Agents and Associated Equipment and Technology 

(Sections 742.2, 744.4 and 744.6)19

Export Control Program Description and Licensing Policy 

The U.S. Government controls the export of certain microorganisms, toxins, biological 

equipment, and related technology to further U.S. foreign policy interests in opposing the 

proliferation and use of biological weapons. The U.S. Government implements these export 

controls multilaterally in coordination with the Australia Group (AG), a forum of 40 nations and 

the European Commission, cooperating to halt the proliferation of chemical and biological 

weapons. The U.S. Government also supports international efforts to secure a total ban on 

biological weapons in compliance with the Convention on the Prohibition of the Development, 

Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on Their 

Destruction (BWC).20 

Australia Group Controls 

The AG was formed in 1985 when the United States and 14 other nations agreed to enhance and 

harmonize controls on chemicals that could be used to produce chemical weapons. Since then, 

the AG has expanded its membership and has expanded its export control list to cover toxic 

biological agents and dual-use chemical and biological production related equipment and 

technologies. AG member countries use the AG common control list and guidelines as a basis 

for developing and imposing -

which requires consultation with another AG partner that had previously denied an AGcontrolled item if a proposed transaction is essentially identical. 

19 Chapter 6 of this report addresses U.S. chemical controls. 

20 The Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological 

(Biological) and Toxin Weapons and on Their Destruction (BWC) was signed in 1972 and ratified by the United 

States in 1975. 
License Requirements and Licensing Policy 

The licensing requirements for biological agents, related equipment, and technology, imposed in 

accordance with AG commitments, are noted below. There are 12 entries on the CCL that are 

subject to biological controls. 

A. The U.S. Government requires a license for the export to all destinations of certain human 

pathogens, zoonoses, toxins, animal pathogens, genetically modified microorganisms and plant 

pathogens, and the technology for their production and disposal. 

 

The U.S. Government requires a license for export to all destinations, other than AG member 

countries, of certain dual-use equipment and materials that can be used to produce biological 

agents and related technology. The countries for which this licensing requirement applies are 

those indicated in Column CB2 (Chemical and Biological Weapons, Column 2) of the 

Commerce Country Chart, Supplement No. 1 to Part 738 of the Export Administration 

Regulations (EAR), as well as the sanctioned destinations identified in Part 746 of the EAR. 

The U.S. Government requires a license for the export to countries listed in Country Group D:3 

of the EAR for medical products identified in Export Control Classification Number (ECCN) 

1C991.d. 

The U.S. Government also controls items subject to the EAR because of biological end-use or 

end-user concerns. These controls are part of the Enhanced Proliferation Control Initiative 

(EPCI), announced by President George H.W. Bush on December 13, 1990. 

The U.S. Government requires a license for the export of any commodity, technology, or 

software when the exporter knows that it will be used in the design, development, 

production, stockpiling, or use of biological weapons in, or by, any country anywhere in 

the world, including AG member countries. In addition, the U.S. Government may 

inform an exporter or reexporter that a license is required due to an unacceptable risk that 

the items will be used in, or diverted to, biological weapons proliferation activities 

anywhere in the world. 

No U.S. person may knowingly support such an export, reexport, or transfer without a 

forwarding that facilitates the export, reexport, or transfer of these items. 

In addition, no U.S. person may perform, without a license, any contract, service, or 

employment knowing that it will directly assist the design, development, production, 

stockpiling, or use of biological weapons in, or by, any destination or country anywhere 

in the world. 
B. The Department of Commerce, in coordination with the Departments of Defense, Energy, 

and State, reviews applications for licenses on a case-by-case basis to determine whether the 

export would make a material contribution to the design, development, production, stockpiling, 

or use of biological weapons. When the Department of Commerce determines as a result of an 

interagency review that an export will make such a contribution, it will deny the application. For 

licenses to export AGEAR imposes an additional review standard whether the items will make a direct and 

hen the Department of Commerce 

determines, after interagency review, that an export will make a contribution meeting these 

criteria, the Department will deny the license. 

Summary of 2011 Changes 

On April 20, 2011, 

76 FR 22017) the understandings reached at the June 2010 

plenary meeting of the Australia Group (AG). Specifically, this rule revised the listing for 

 This rule also revised the 

in ECCN 1C352.a.8 by adding a parenthetical phrase to indicate that 
Analysis of Controls as Required by Section 6(f) of the Export Administration Act 

A. The Purpose of the Controls 

The controls described above are intended to prevent a U.S. contribution to the proliferation and 

illegal use of biological weapons and to U.S. foreign policy objectives that seek to inhibit the 

proliferation of biological weapons. The controls also provide the regulatory authority to stop 

the export of any item from the United States when there is a significant risk that it will be used 

for biological weapons purposes. In addition, the controls implement certain measures directed 

in Executive Order 12735 of November 16, 1990; its successor, Executive Order 12938 of 

November 14, 1994; and the EPCI, announced on December 13, 1990. 

The U.S. Government implements these controls in coordination with the AG. The AG works to 

accomplish multilateral objectives through harmonizing export controls, exchanging information, 

and other diplomatic means. In addition, these controls demonstrate the commitment of the 

United States to its obligation under the BWC not to develop, produce, stockpile, acquire, or 

retain biological agents, weapons, equipment, or the means of delivery for warfare purposes, or 

to assist others in such activities. The controls also advance the goals of the 1925 Geneva 

Protocol for the Prohibition of the Use in War of Asphyxiating, Poisonous, or other Gases and of 

Bacteriological Methods of Warfare (Geneva Protocol). 

B. Considerations and/or Determinations of the Secretary of Commerce 

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has 

determined that these controls are likely to achieve the intended foreign policy purpose, in light 

of other factors, including availability of relevant items from other countries, and that the foreign 

policy purpose cannot fully be achieved through negotiations with its partners in the AG and in 

the BWC. The Secretary has made this determination despite the existence of certain factors, 

including availability of these items from other sources, which challenge the full achievement of 

foreign policy goals. These controls affirm U.S. opposition to the development, proliferation, 

and use of biological weapons and serve to distance the United States from such activities. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that these 

controls are compatible with U.S. foreign policy objectives and that the extension of these 

controls will not have any significant adverse foreign policy consequences. The U.S. 

Government has a strong interest in remaining at the forefront of international efforts to stem the 

proliferation of biological weapons. Also, these controls are compatible with the multilateral 

export controls for biological materials agreed to by the AG. 
3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to 

these controls is not likely to render the controls ineffective, nor will any adverse reaction by 

other countries be counterproductive to U.S. foreign policy interests. The U.S. Government 

continues to discuss biological export controls with countries outside of the AG to advance the 

goals of nonproliferation. 

4. Economic Impact on U.S. Industry. The Secretary has determined that any adverse 

effect of these controls on the economy of the United States, including on the competitive 

position of the United States in the international economy, does not exceed the benefit to United 

States foreign policy objectives. 

In fiscal year 2011, the Department of Commerce approved 1,184 license applications, valued at 

$73,031,460 for the export or reexport of biological agents, vaccines and equipment. The 

majority of the value of these approvals (57 percent) was for biological processing and handling 

equipment controlled under ECCN 2B352. The Department denied two license applications 

valued at $4,160 and returned without action 68 license applications valued at $ 5,058,415. The 

primary reason for returning applications was for insufficient information about the transactions. 

5. Effective Enforcement of Controls. The Secretary has determined the United States has 

the ability to enforce these controls effectively. Enforcing controls on biological weaponsrelated materials poses problems similar to the enforcement of chemical controls, but with 

additional difficulties. Biological materials are microscopic organisms that require technical 

expertise and specialized facilities to identify and to handle. Because of their size, biological 

agents can often be concealed and transported with ease. 

To meet the challenge of effectively enforcing these proliferation controls, the Department of 

Commerce focused resources toward preventive enforcement. Commerce personnel conduct an 

extensive, ongoing outreach program to educate industry about export controls. The program is 

or products or equipment that could 

be used for biological weapons proliferation. In cases where unlicensed shipments of biological 

materials have already taken place, the Department of Commerce has found that, as in other 

export control enforcement cases, analysis of commercial shipping documentation can lead to 

successful investigations and prosecutions. 

C. Consultation with Industry 

In a September 1, 2011 Federal Register notice (76 FR 54426), the Department of Commerce 

solicited comments from the public on the effectiveness of U.S. foreign policy-based export 
controls. The comment period closed on October 3, 2011. A detailed review of all public 

comments received may be found in Appendix I. 

Biological products exporters include commercial firms as well as academic and government 

entities. The Department of Commerce maintains ongoing interaction with individual exporters, 

TACs, and trade associations to discuss proposed export transactions and marketing plans to 

facilitate the thorough, yet prompt, review of export license applications. Through the TACs, the 

Department keeps industry representatives abreast of licensing proposals for items on the control 

list and give

seven TACs are solicited on an ongoing basis and are not specific to this report. 

D. Consultation with Other Countries 

Recognizing that multilateral coordination of export controls and enforcement actions is the most 

effective means of restricting proliferation activities, the U.S. Government coordinates its 

controls on biological items with other countries in the AG. 

The U.S. Government continues to address the problem of biological weapons proliferation 

through a variety of international forums and urges other AG members to pursue export control 

cooperation with non-members on a bilateral or regional basis. 

E. Alternative Means 

The U.S. Government continues to address the problem of biological weapons proliferation on a 

number of fronts. Direct negotiations with countries intent on acquiring biological weapons are 

not likely to prevent the use of U.S.-origin materials for such activities and negotiations are 

unlikely to affect the behavior of these countries. 

Alternative means to curtail the acquisition and development of biological warfare capabilities, 

such as diplomatic negotiations, do not obviate the need for controls. The following examples 

demonstrate additional means that have been, and will continue to be, used in an attempt to curb 

the use and spread of weapons of mass destruction: 

Regulations issued by the Public Health Service (42 CFR Part 72) pursuant to the 

Antiterrorism and Effective Death Penalty Act of 1996 (Sec. 511 of Pub. L.104-132, 

April 24, 1996, 110 Stat. 1214) place additional shipping and handling requirements on 

laboratory facilities that transfer or receive select infectious agents capable of causing 

substantial harm to human health. 
The Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 

(Pub. L.102-182, Title III, December 4, 1991, 105 Stat. 1245), the Iran-Iraq Arms NonProliferation Act of 1992 (Pub. L. 102-484) (Title XVI), the Iran Nonproliferation Act of 

2000 (Pub. L. 106-178), the Iran Nonproliferation Amendments Act of 2005 (Pub. L. 

109-112), and the North Korea Nonproliferation Act of 2006 (Pub. L. 109-353) provide 

for the imposition of sanctions on foreign persons or countries for certain kinds of 

chemical and biological weapons-related activity. The U.S. Government has imposed 

sanctions under these authorities on certain entities for chemical and biological weaponsrelated activities. 

The negotiations and alternative means undertaken by the U.S. Government demonstrate that it 

has made reasonable efforts to achieve the purposes of the controls; however, these actions have 

not had results that are as effective as the maintenance and renewal of the controls. 

F. Foreign Availability 

Most of the AG-controlled biological agents, and related equipment to produce them, are 

available from many sources (biological agents are, in fact, endemic). Notwithstanding the 

difficulties related to controlling these items effectively, the United States and its AG partners 

consider it necessary to maintain controls in order to stem shipments to potential weapons 

developers. Foreign availability is a factor considered by the AG member countries in their 

coordination of controls, though many non-AG suppliers model their own export controls on the 
CHAPTER 8

Missile Technology Controls 

(Sections 742.5 and 744.3)

Export Control Program Description and Licensing Policy 

The U.S. Government maintains export controls on certain equipment, materials, software, and 

technology to further the U.S. foreign policy of stemming the proliferation of missiles capable of 

delivering weapons of mass destruction (WMD). The U.S. Government implements these 

controls in coordination with the members of the Missile Technology Control Regime (MTCR), 

an informal political arrangement of 34 nations that cooperate to halt the proliferation of such 

missiles. (See Appendix II for a complete list of MTCR members.) Of note, several other 

countries, including India, Israel, Macedonia, Romania, and Slovakia, unilaterally adhere to the 

MTCR Guidelines. 

Section 1512 of the National Defense Authorization Act for Fiscal Year 1999 permits the export 

-

defined in Section 74 of the Arms Export Control Act, only if the President certifies to Congress 

that (1) the export is not detrimental to the United States space launch industry and (2) the 

equipment or technology to be exported, including any indirect technical benefit that could be 

derived from the export of the items, will not measurably improve the missile or space launch 

capabilities of the PRC. In 2009, the President delegated the authority to make such 

certifications to the Secretary of Commerce. See Presidential Determination No. 2009 31 of 

September 29, 2009 (74 FR 50913 (Oct. 2, 2009)). Decisions whether to make such 

certifications, however, continue to be made by means of an interagency process. 

Missile Technology Control Regime Controls 

On April 16, 1987, the United States, Canada, France, Germany, Italy, Japan, and the United 

Kingdom created the MTCR to limit the proliferation of missiles capable of delivering nuclear 

weapons. Since that time, the number of MTCR Partners has increased to 34 countries. Member 

countries agreed to further expand the MTCR controls in 1993 to include missile delivery 

systems for all types of WMD. The MTCR Equipment, Software, and Technology Annex lists 

missile-related items controlled pursuant to the MTCR Guidelines. It is divided into two 

categories. Category I items include complete missile systems, complete subsystems, production 

facilities, production equipment, and associated software and technology for missile systems 

capable of delivering at least a 500 kilogram (kg) payload to at least a 300 kilometer (km) range. 
Category II items include materials, components, and production and test equipment associated 

with Category I items, as well as missile systems, major subsystems, production facilities, and 

production equipment for missile systems with a range equal to or greater than 300 km, 

regardless of payload. 

License Requirements for MTCR Controls 

The Department of Commerce is responsible for administering controls on manufacturing 

equipment for Category I items and all dual-use items in Category II. The MTCR Guidelines 

and the Equipment, Software, and Technology Annex form the basis for U.S. missile technology 

controls, providing guidance for licensing policy, procedures, review factors, and standard 

assurances on missile technology exports. 

Approximately 120 entries on the CCL are subject to missile technology controls. License 

applications for Category I items are subject to a strong presumption of denial regardless of 

purpose, and license applications for the export, reexport or transfer (in-country) of production 

facilities for Category I items will be denied. The Department will approve the export of 

Category II items only after a case-by-case review consistent with U.S. law, policy, regulations, 

and international nonproliferation commitments. The United States observes the multilateral 

commitment to honor the denial of licenses for MTCR Annex items by other MTCR members 

prevent missile proliferation and helps to establish a level commercial playing field within the 

regime. 

In summary, the licensing requirements and policy for missile technology controls described in 

Sections 742.5 and 744.3 of the Export Administration Regulations (EAR) are as follows: 

The U.S. Government requires a license for the export or reexport to all destinations 

except Canada of dual-use items specifically identified on the CCL as controlled for 

missile technology reasons. 

The U.S. Government also controls items subject to the EAR due to end-use or end-user 

concerns related to the proliferation of certain rocket systems and unmanned aerial 

vehicles (UAVs). The U.S. missile catch-all policy meets U.S. nonproliferation 

objectives and is consistent with the MTCR Guidelines. The Department of Commerce 

reviews applications for licenses on a case-by-case basis to determine whether the export 

would make a material contribution to the proliferation of certain rocket systems or 

UAVs. If the Department of Commerce determines that an export will make such a 

contribution, the application will be denied. 
Summary of 2011 Changes 

The annual plenary for the Missile Technology Control Regime (MTCR) was held in April 2011 

in Buenos Aires, Argentina. At the Plenary, the MTCR partners discussed the direct relevance of 

UN Security Council Resolutions (UNSCRs) 1874 (North Korea) and 1929 (Iran) to MTCR 

export controls. The MTCR partners discussed the importance for all States to take all necessary 

steps at a national level to fully and effectively implement the missile-relevant provisions of 

these resolutions. The growing interest by many states in cooperating with or possibly adhering 

non-members. 

The MTCR also held a Technical Experts Meeting (TEM) in conjunction with the Plenary to 

discuss proposed changes to the MTCR control list. Changes adopted at the plenary included 

adding controls for the production facilities specially designed for rocket systems and unmanned 

aerial vehicle systems capable of a range equal to or greater than 300 km; and clarifying the 

coverage of control in the General Technology Note. No changes in the EAR resulted from this 

update to the MTCR Annex. 

The MTCR held an intercessional Technical Experts Meeting (TEM) in Paris on November 14-

18, 2011 to discuss additional changes to the MTCR control list. 

The annual Reinforced Points of Contact (RPOC) meeting for the MTCR was held on December 

6-7, 2011 in Paris. 

Analysis of Controls as Required by Section 6(f) of the Export Administration Act 

A. The Purpose of the Controls 

These controls curtail the availability of goods and technology and other support that could 

contribute to missile proliferation. U.S. export controls on specific types of missile-related 

equipment and technology, in coordination with other supplier countries, limit the proliferation 

of missile systems and related technology. These controls complement U.S. and international 

nuclear, chemical, and biological nonproliferation efforts by blocking the development of 

unmanned delivery systems for WMD. Also, these controls provide U.S. support to the 

collective effort of the MTCR to address mounting international concern regarding missile 

proliferation. 
B. Considerations and/or Determinations of the Secretary of Commerce 

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has 

determined that these controls are likely to achieve the intended foreign policy purpose, in light 

of other factors, including the limited foreign availability of items controlled for Missile 

Technology (MT) reasons, and that the foreign policy purpose cannot fully be achieved through 

negotiations or other alternative means. The controls at issue have been in part achieved through 

international or multilateral negotiations. Although some controlled items are available from 

other countries, cooperation among the United States, its MTCR Partners, and other like-minded 

countries, many of which are major producers of the items under control, has hindered the efforts 

of proliferators to develop or acquire militarily effective missiles. The Secretary has determined 

that extending these controls is likely to limit the spread of missile delivery systems. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that these 

controls are compatible with U.S. foreign policy objectives and that the extension of these 

controls will not have any significant adverse foreign policy consequences. Halting the spread of 

missiles and related equipment and technology worldwide is a key U.S. national security and 

nonproliferation objective. Missile technology export controls are consistent with, and 

contribute to, achieving this objective. U.S. membership in the MTCR complements existing 

nuclear, chemical, and biological nonproliferation policies by curbing the spread of missile 

technology and equipment for the delivery of WMD. 

3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to 

these controls is not likely to render the controls ineffective, nor will any adverse reaction by 

other countries be counterproductive to U.S. foreign policy interests. The United States is 

confident that other members of, and unilateral adherents to, the MTCR, many of which are also 

the leading suppliers of missile-related technology, will continue to support and strengthen this 

control regime. MTCR Partners share information regarding denials of Annex items and are 

activities of missile technology proliferation concern and have cooperated to interdict specific 

shipments. The number of non-MTCR countries willing to cooperate with the regime has 

increased over the past several years. Finally, the United States and its MTCR Partners are 

actively engaged in an outreach program to encourage additional countries to adhere to the 

Guidelines and implement effective export controls on MTCR items. 

4. Economic Impact on U.S. Industry. The Secretary has determined that any adverse 

effect of these controls on the U.S. economy, including on the competitive position of the United 

States in the international economy, does not exceed the benefits to U.S. foreign policy 

objectives. Only a narrow list of items is subject to missile controls, and the effect on overall 
member obtains an unfair commercial advantage in the international marketplace. 

In fiscal year 2011, the Department of Commerce approved 818 applications, valued at 

$2.6 billion dollars, for the export or reexport of missile technology-controlled items. In 

addition, the Department rejected 9 applications valued at $3.2 million and returned without 

action 37 applications valued at $15.6 million. Comparatively few licenses for missile 

technology items are denied because: (1) exporters do not generally pursue transactions they 

understand will be rejected (based on the applicable licensing policy); and (2) most of the 

applications involve exports to destinations, and for end uses, that do not pose missile 

proliferation concerns. 

Under the Enhanced Proliferation Control Initiative (EPCI) control related to missile technology 

(15 C.F.R. § 744.3), the Department of Commerce approved 13 applications, valued at $7.7 

million, denied 5 licenses valued at $318,000, and returned without action 1 application, valued 

at $137,000. In these applications, EPCI missile concerns were the basis for the license 

requirement. 

5. Effective Enforcement of Controls. The Secretary has determined that the United States 

has the ability to enforce these controls effectively. Multilateral controls on missile technology 

provide a strong framework for cooperative enforcement efforts overseas. However, there are 

challenges for the enforcement of controls on dual-use goods related to missile development. 

 standard set forth in the 

- -

which complicates law enforcement cooperation. Third, identifying illegal exports and reexports 

of missile-related goods requires significant investigative resources. 

To enforce these controls effectively, the Department of Commerce continues to focus on 

preventive enforcement, including an outreach program to educate companies about export 

companies from illegally exporting dual-use products or equipment that could be used to make 

missiles. 

BIS conducted a number of recent enforcement actions regarding noncompliance with these 

export controls. For example: 
Missile Components and Radio Test Sets to Iran 

On August 15, 2011, Davoud Baniameri was sentenced in U.S. District Court in the Northern 

District of Illinois to 51 months in federal prison after pleading guilty in May to two felony 

charges stemming from his efforts to illegally export missile components (connector adaptors) 

and radio test sets from the United States to Iran, via the United Arab Emirates. At no time did 

Baniameri obtain or attempt to obtain a license from the U.S. government for the export of the 

radio test sets or the connector adaptors. 

C. Consultation with Industry 

In a September 1, 2011 Federal Register notice (76 FR 54427), the Department of Commerce 

solicited comments from industry and the public on the effectiveness of U.S. foreign policybased export controls. The comment period closed on October 3, 2011. A detailed review of all 

public comments received may be found in Appendix I. In addition, comments were solicited 

from the public via the BIS website. 

The Department of Commerce holds discussions with industry representatives on issues related 

to the MTCR Annex through the Transportation Technical Advisory Committee and other 

relevant technical advisory committees (TACs) as appropriate. Comments from the 

e not specific to this report. 

The Department of Commerce also participates in interagency working groups that review 

proposed changes to the Annex, and engages in discussions of the proposals with companies that 

have relevant expertise. 

D. Consultation with Other Countries 

Consultation with other MTCR members is a fundamental element of U.S. missile technology 

control policy. Consultations with non-MTCR countries also are essential to U.S. missile 

nonproliferation policy. The U.S. Government exchanges information with other countries about 

activities of missile proliferation concern and seeks to cooperate with them to prevent or stop 

certain transactions. The United States also shares denial information with its MTCR Partners, 

who are committed t -

MTCR member countries cooperate with non-member countries to limit the spread of WMD 

delivery systems by encouraging all countries to apply the MTCR Guidelines on a national basis. 

ncluded workshops and seminars, at which MTCR members 

and invited non-members share experiences in an effort to improve prevention of missile 

proliferation. 
E. Alternative Means 

The missile sanction provisions in Section 73 of the Arms Export Control Act and Section 11B 

of the Export Administration Act of 1979, as amended (EAA), provide for the imposition of 

export, import, and procurement sanctions on foreign entities engaged in certain kinds of 

activities relating to the transfer of MTCR Annex items to non-MTCR adherent countries. In the 

past, the United States has imposed missile sanctions on entities in Egypt, India, Iran, 

Macedonia, Moldova, North Korea, Pakistan, China, Russia, South Africa, and Syria. Missile 

sanctions are used to encourage the governments of the sanctioned entities to adopt responsible 

commitment to missile nonproliferation. 

The United States and its MTCR Partners are continuing their diplomatic efforts to encourage 

additional countries to adhere unilaterally to the MTCR Guidelines. Such efforts are aimed at 

encouraging non-MTCR members to implement and enforce effective missile technology export 

controls. Although the United States has an obligation to maintain and renew its export controls 

based on its membership in the MTCR, it also has pursued alternative means to achieve the 

purposes of the controls through its consultations with non-MTCR countries. 

F. Foreign Availability 

Possible suppliers of missile technology that are not MTCR members include, but are not limited 

to, China, North Korea, Egypt, India, Iran, Israel, and Taiwan. Some of these countries, such as 

India and Israel, adhere unilaterally to the MTCR Guidelines. The United States continues to 

approach other nations, including those that produce MTCR Annex-controlled items, to urge 

their vigilance in applying MTCR Guidelines to help prevent missile proliferation. 
CHAPTER 9 

Encryption 

(Section 742.15)

Export Control Program Description and Licensing Policy 

The U.S. maintains export controls on encryption items to protect and preserve national security 

and foreign policy interests. Encryption items may be used to maintain the secrecy of 

information, and therefore may be used by persons abroad to bring harm to U.S. national security 

and foreign policy interests. The U.S. Government has a critical interest in ensuring that the 

legitimate needs for protecting important and sensitive information of the public and private 

sectors are met, and that persons seeking to damage U.S. national security and foreign policy 

interests are not able to conceal hostile or criminal activities. 

When dual-use encryption items were transferred from the USML to the CCL in 1996, a foreign 

policy reason for control was imposed on these items. A license is required to export or reexport 

Encryption Items (EI) (classified under Export Control Classification Numbers (ECCNs) 5A002, 

5D002 and 5E002 on the CCL) to all destinations except Canada. All items controlled for EI 

reasons are also controlled for National Security (NS) reasons. 

License Requirements and Licensing Policy for Encryption Controls 

Most EI-controlled items are eligible for export and reexport to non-government end-users under 

the terms and conditions of License Exception Encryption Commodities, Software and 

Technology (ENC) after self-classification by the exporter or classification by the Bureau of 

Industry and Security (BIS) and the National Security Agency, and many items are also eligible 

for export and reexport to government end-users under this License Exception. On January 7, 

2011, BIS published amendments to the encryption provision of the EAR that released from 

control publicly available mass market software after an encryption registration and selfclassification. Also released was publicly available object code when the corresponding source 

code is publicly available under License Exception Technology and Software Unrestricted 

(TSU). 

License applications to export or reexport EI-controlled items are subject to case-by-case review 

for consistency with U.S. national security and foreign policy interests. EI-controlled items are 

also eligible for Encryption Licensing Arrangements (ELAs), which authorize exports and 

reexports of unlimited quantities of encryption commodities or software to foreign national 
state, provincial and local governments for civil use, in all destinations, except countries listed in 

Country Group E:1. 

Analysis of Controls as Required by Section 6(f) of the Export Administration Act 

A. The Purpose of the Controls 

Encryption products can be used to conceal the communications of terrorists, drug smugglers, 

and others intent on harming U.S. interests. Cryptographic products and software also have 

military and intelligence applications that, in the hands of hostile nations, could pose a threat to 

U.S. national security. The national security, foreign policy, and law enforcement interests of 

the United States are protected by export controls on encryption items. 

B. Considerations and/or Determinations of the Secretary of Commerce 

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has 

determined that U.S. export controls on encryption items restrict the export of encryption items 

in situations that would be contrary to U.S. national security or foreign policy interests. The 

Secretary has determined that these controls are likely to achieve the intended foreign policy 

purpose in light of other factors, including the availability of encryption items from other 

countries, and that the foreign policy purpose cannot be achieved solely through agreements with 

the participating states of the Wassenaar Arrangement or through alternative means. This 

determination with due consideration for the continuing growth of electronic commerce and 

Internet use, as the emergence of new security protocols for, among other things, short-range 

wireless communications, and the growth in the number of countries with the technology to 

produce highly sophisticated, dual-use encryption products. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that these 

controls are compatible with U.S. foreign policy objectives, and that the extension of these 

controls will not have significant adverse foreign policy consequences. The controls are 

consistent with the U.S. foreign policy goal of preventing U.S. exports (and subsequent 

reexports) that might contribute to the capabilities of international terrorists or criminals. 

3. Reaction of Other Countries. The Secretary has determined that the continued 

implementation of U.S. encryption export controls is generally accepted in the international 

community, and that any adverse reaction to these controls is not likely to render the controls 

ineffective, nor are they counterproductive to the foreign policy interests of the United States. 

Other countries, particularly the Wassenaar participating states, recognize the need to control 

exports of such products for national security reasons. 
4. Economic Impact on U.S. Industry. The Secretary has determined that the continued 

implementation of encryption regulations that are periodically updated will allow U.S. industry 

to maintain a leadership position in the global market for encryption products and that the effect 

of encryption controls on export performance do not exceed the benefit to U.S. foreign policy 

objectives. 

In fiscal year 2011, 922 companies filed encryption registrations. This activity continues to 

reflect the expanding trade in encryption items, and the wide commercial applicability of such 

items. The Department of Commerce processed 1,311 classification requests for controlled 

encryption products, components, toolkits, and source code items classified under ECCNs 

5A002, 5D002, 5E002, 5B002, 5A992, 5D992, and 5E992. This is a 37% decrease in the 

number of classification requests processed for encryption products from fiscal year 2010, due, 

-classify encryption products after an 

encryption registration. Of these classification requests, 319 were for mass market encryption 

items. Mass market encryption items typically include handheld devices, commodities and 

software for home networking use, and software applications for smartphones, tablets, and 

personal computers classified under ECCNs 5A992.c, 5D992.c and 5E992.b. 

 

Additionally, during fiscal year 2011, the Department of Commerce approved 1,700 license 

-end routers and other network 

infrastructure equipment, and technology. In fiscal year 2011, there were no denials of 

encryption items based on issues specific to encryption-related licensing policy. 

5. Effective Enforcement of Controls. The Secretary has determined that the United States 

has the ability to enforce these controls effectively. Detection of some encryption transactions is 

difficult because encryption components are often incorporated into other products and 

encryption software can be transferred over the Internet. 

C. Consultation with Industry 

In a September 1, 2011 Federal Register notice (76 FR 54426), the Department of Commerce 

solicited comments from industry and the public on the effectiveness of U.S. foreign policybased export controls. In addition, comments were solicited from the public via the BIS website. 

The comment period closed on October 3, 2011. A detailed review of all public comments 

received can be found in Appendix I. 

Systems Technical Advisory Committee and other technical advisory committees as appropriate, 

regarding encryption policy. The objective of these consultations is to develop policies that 

assist law enforcement, protect U.S. national security, ensure continued U.S. technological 
leadership, and promote the privacy and security of U.S. firms and citizens. Such consultations 

have proven successful, as evidenced by the increasing number of encryption items submitted for 

technical review and constructive industry input on matters of regulations and policy. 

D. Consultation with Other Countries 

The U.S. Government participates in global efforts to prevent international criminals, terrorists, 

and designated state sponsors of terrorism from acquiring sophisticated encryption products. 

One such effort is the Wassenaar Arrangement. The Wassenaar Arrangement was established to 

enhance regional and international security by developing standards and norms for conventional 

arms and dual-use goods and technology transfers. Participating states seek, through their 

national policies, to ensure that transfers of these items do not contribute to the development or 

enhancement of military capabilities which undermine these goals, and are not diverted to 

support such capabilities. Encryption items are included under the Wa

Basic List of dual-use goods and technologies, with controls based on the encryption strength 

(e.g., key length) and use of specified dualCryptography Note provides for release fro

encryption items otherwise covered by the Wassenaar control list. U.S. encryption policy 

reflects this consultation with other participating states of the Wassenaar Arrangement. Also, the 

United States government encourages major industrial and trading partners to adopt and maintain 

export controls on encryption equipment and technology in bilateral meetings. 

E. Alternative Means 

EI foreign policy controls are coextensive with national security controls placed on encryption 

items. Therefore, if EI controls on encryption items were removed, national security controls 

would remain in place. National security controls are also maintained cooperatively with the 

other members of the Wassenaar Arrangement. 

F. Foreign Availability 

The United States recognizes the ongoing adoption and widespread use of encryption worldwide, 

and the continued development of foreign-made encryption hardware and software. The U.S. 

Government continues to monitor global IT marketplace and encryption policy developments so 

that updated U.S. regulations will enable American companies to maintain their technological 

leadership in a manner that safeguards U.S. national security and public safety interests. The 

U.S. Government consults with other governments to secure cooperation in controlling the 

availability of encryption items. 
CHAPTER 10 

(Section 742.14)

Export Control Program Description and Licensing Policy

Certain technology transferred from the USML to the CCL 

technology controlled 

production, or overhaul of commercial aircraft engines, components, and systems. Technology 

controlled for SI reasons is classified under various paragraphs of Export Control Classification 

Number (ECCN) 9E003 (specifically ECCN 9E003.a.1 through a.8, 9E003.a.10, and 9E003.h 

and i). The SI controls supplement the national security controls that also apply to this 

technology. 

License Requirements and Licensing Policy for Significant Items 

A license is required for exports and reexports to all destinations, except Canada. 

-bycase basis to determine whether the proposed export or reexport is consistent with U.S. 

national security and foreign policy interests. 

Analysis of Control as Required by Section 6(f) of the Export Administration Act 

A. The Purpose of the Control 

This control provides a mechanism for the United States to monitor closely the export of this 

technology to prevent its use in a manner that would adversely affect U.S. nonproliferation goals 

or the military balance within a region. 

B. Considerations and/or Determinations of the Secretary of Commerce 

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has 

determined that this control is likely to achieve the intended foreign policy purpose, 
notwithstanding various factors, including the availability of these SI-controlled items from other 

countries, and that the foreign policy purpose has only been partially achieved through 

negotiations on export controls with the participating states of the Wassenaar Arrangement. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that this 

control is compatible with U.S. foreign policy objectives, and that the extension of this control 

will not have any significant adverse foreign policy consequences. The control is consistent with 

U.S. foreign policy goals to promote peace and stability and to prevent U.S. exports that would 

contribute to inappropriate military capabilities abroad. 

3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to 

this control is not likely to render the control ineffective, nor will any adverse reaction by other 

commercial jet engines is subject to dual-use export controls by other allied countries through the 

Wassenaar Arrangement. These countries also recognize the desirability of restricting goods that 

could compromise shared security and foreign policy interests. 

4. Economic Impact. The Secretary has determined that any adverse effect of this control 

on the economy of the United States, and on the competitive position of the United States in the 

international economy, does not exceed the benefit to U.S. foreign policy objectives. In fiscal 

year 2011, the Department of Commerce approved 167 licenses for technology controlled under 

 technology 

to a foreign national in the United States). The total dollar value of the items subject to the 

licenses approved was $12,817,614 in fiscal year 2011. No license applications involving engine 

ear 2011. In addition, 15 applications involving 

items valued at a total of $106,228 were returned without action. 

5. Effective Enforcement of Controls. The Secretary has determined that the United States 

has the ability to enforce this control effectively. The U.S. Government does not experience any 

unusual problems in enforcing this control. Manufacturers and intermediary companies are 

familiar with U.S. controls on these products and technologies. Wi

USML (ECCN 9E003.i), all of these items also are subject to multilateral controls. Therefore, 

cooperation from foreign government enforcement agencies is useful in preventing and 

punishing violators. 
C. Consultation with Industry 

In a September 1, 2011 Federal Register notice (76 FR 54426), the Department of Commerce 

solicited comments from industry and the public on the effectiveness of U.S. foreign policybased export controls. The comment period closed on October 3, 2011. A detailed review of all 

public comments received may be found in Appendix I. 

The Department of Commerce consults with the Transportation Technical Advisory Committee 

(TransTAC) about SI controls. Although there are no major changes anticipated regarding this 

control on the CCL, comments from t

basis and are not specific to this report. 

D. Consultation with Other Countries 

The United States leads international efforts to stem the proliferation of sensitive items, urging 

other supplier nations to adopt and apply export controls comparable to those of the United 

States. The major industrial partners of the United States maintain export controls on almost all 

of this equipment and technology and control them as dual-use commodities. Pursuant to their 

agreement to establish a regime for the control of conventional arms and sensitive dual-use 

goods and technologies, the participants in the Wassenaar Arrangement have agreed to control 

these items (with the exception of items subject to ECCN 9E003.i noted above, which the United 

States has not sought to control in Wassenaar) and to ensure that transfers of such items are 

carried out responsibly and in furtherance of international peace and security. 

E. Alternative Means 

The U.S. Government has undertaken a wide range of diplomatic endeavors, both bilateral and 

multilateral, to encourage proper control over these items, and has been successful in reaching 

multilateral agreement in the Wassenaar Arrangement to control most of these items. The 

United States has specifically encouraged efforts to prevent the unauthorized use or diversion of 

these items to activities contrary to U.S. national security and foreign policy concerns. However, 

these efforts do not replace the continued need for the additional control. 

F. Foreign Availability 

Although the United States has been the world leader in this technology, other countries produce 

participants in the Wassenaar Arrangement and control these items (with the exception of items 

controlled under ECCN 9E003.i noted above) as dual-use items in accordance with their national 
licensing policies. The commitment of the U.S. Government and its Wassenaar partners to 

maintain controls reflects the cooperation among governments to reduce foreign availability. 
CHAPTER 11

Nuclear Nonproliferation 

(Sections 742.3 and 744.2)

Export Control Program Description and Licensing Policy 

The U.S. Government maintains controls on exports of nuclear-related items under the authority 

of the Nuclear Nonproliferation Act of 1978 

nonproliferation policy. Because these controls are primarily based on the NNPA and not the 

Export Administration Act (EAA), they are not subject to this report. However, BIS has 

included information on nuclear nonproliferation controls because they usually are grouped with 

other nonproliferation controls that are subject to this report. In addition, controls based on 

nuclear end uses and end-users are maintained under the authority of Section 6 of the EAA as 

part of the Enhanced Proliferation Control Initiative (EPCI). EPCI controls for other 

proliferation end uses are described in detail in Chapters 6, 7, and 8 of this report. The Entity 

List, maintained in Supplement No. 4 to Part 744 of the Export Administration Regulations 

(EAR) and discussed in Chapter 13 of this report, also prohibits certain transactions involving 

end-users and end uses involved in nuclear activities described in section 744.2 of the EAR. 

Nuclear Nonproliferation Regime Controls 

The Nuclear Nonproliferation Regime controls support U.S. international nuclear 

nonproliferation obligations, particularly with relation to its membership in the Nuclear Suppliers 

Group (NSG) and the Zangger Committee (ZC). The United States is a member of the 46-

member NSG, which sets forth guidelines for the export of items that are either specially 

designed or prepared for the processing, use, or production of special nuclear material or are 

nuclear-related dual-use items and technologies (see Appendix II for a complete list of regime 

members). These controls also reflect U.S. membership in the ZC, a multilateral nuclear export 

control group that was formed to interpret Article III, paragraph 2, of the Nuclear 

Nonproliferation Treaty. Like the NSG, the ZC establishes and maintains a Trigger List of 

nuclear-related equipment and materials subject to export controls along with guidelines 

concerning the export of nuclear equipment and material. 

Licensing Requirements and Licensing Policy 

The Department of Commerce requires a license for the export of the following items: 
commodities, related technology, and software that could be of significance for nuclear 

explosive purposes (i.e., the Nuclear Referral List (NRL) included in the CCL); and 

any commodity, related technology, or software that the exporter knows, or has reason to 

know, will be used directly or indirectly in any of the following activities: 

 nuclear explosive activities including research on, or the development, design, 

manufacture, construction, testing or maintenance of nuclear weapons or nuclear 

explosive devices; 

 unsafeguarded nuclear activities, including research on, or the development, 

design, manufacture, construction, operation or maintenance of any nuclear 

reactor, critical facility, facility for the fabrication of nuclear fuel, facility for the 

conversion of nuclear material from one chemical form to another, or separate 

storage installation where there is no obligation to accept International Atomic 

Energy Agency (IAEA) safeguards at the facility or installation, when it contains 

any source of special fissionable material, or where any such obligation is not 

met; or 

 safeguarded and unsafeguarded nuclear activities, including research on, or the 

development, design, manufacture, construction, operation or maintenance of the 

following facilities, or components for such facilities: (i) facilities for the 

chemical processing of irradiated special nuclear or source materials; (ii) facilities 

for the production of heavy water; (iii) facilities for the separation of isotopes of 

source and special nuclear material; or (iv) facilities for the fabrication of nuclear 

reactor fuel containing plutonium. 

The Department of Commerce may inform the exporter that a license is required for any item 

subject to the EAR when there is an unacceptable risk of use in, or diversion to, any of the 

activities described above. 

Factors considered in reviewing applications for licenses include: 

the stated end use of the item; 

the significance for nuclear purposes of the particular item, including whether the item is 

to be used in research on or for the development, design, manufacture, construction, 

operation, or maintenance of any reprocessing or enrichment facility; 

the types of nuclear nonproliferation assurances or guarantees given in a particular case; 

and 

the nonproliferation credentials of the recipient country. 
In a September 1, 2011 Federal Register notice (76 FR 54426), the Department of Commerce 

solicited comments from industry and the public on the effectiveness of U.S. foreign policybased export controls, including controls on nuclear-related items. The comment period closed 

on October 3, 2011. A detailed review of all public comments received can be found in 

Appendix I. In addition, comments were solicited from the public via the BIS website. 

echnical Advisory Committees (TACs) are 

solicited on a regular basis, but are not detailed in this report. 

Analysis of Controls as Required by Law21 

Section 17(d) of the EAA and Section 309(c) of the NNPA provide that: (1) nuclear 

nonproliferation controls do not expire annually and determinations to extend them are thus not 

required; and (2) the criteria and other factors set forth in Sections 6(b) through 6(f) of the Act 

are not applicable to these controls. The Department of Commerce is, therefore, notifying 

Congress that these controls continue in effect. These controls further the nuclear 

nonproliferation policy of the United States and have made it more difficult for nations to 

acquire sensitive nuclear technology or equipment. 

The Departments of Commerce and Energy, in consultation with the Departments of State and 

Defense and the Nuclear Regulatory Commission, regularly review and revise the NRL 

pertaining to U.S. dual-use items controlled for nuclear nonproliferation reasons. The NRL is 

-use items. 

During fiscal year 2011, there were no additions or updates to the NRL. The NSG has begun a 

complete review of the Trigger Lists and Dual Use Annex, meaning changes to the NRL can be 

expected in the upcoming years. 

BIS conducted a number of recent enforcement actions regarding these controls. For example: 

Carbon Fiber to China 

On August 10, 2011, Jianwei Ding, of Singapore, who currently is incarcerated in federal prison, 

agreed to pay a $100,000 civil penalty and have his export privileges denied for a period of 25 

years, to settle allegations that he conspired to violate the EAR by knowingly and willfully 

attempting to export carbon fiber to China for use by the China Academy of Space Technology 

(CAST) without the required U.S. Government authorization. The carbon fiber is controlled for 

reasons of nuclear nonproliferation. 

21 The analysis, required by law, differs for nuclear nonproliferation controls. It is governed by the Nuclear 

Nonproliferation Act of 1978 (NNPA). Therefore, the headings under this section differ from the rest of the report. 
Metals to China and Israel 

On March 15, 2011, TW Metals, Inc. of Exton, Pennsylvania, agreed to pay a $575,000 civil 

penalty to settle allegations that, on 49 occasions, it violated the EAR by exporting titanium alloy 

and aluminum bar to China and Israel without the required export licenses. Titanium alloy and 

aluminum bar are both controlled for reasons of nuclear nonproliferation. 

High Performance Paints to a listed entity in Pakistan 

On December 21, 2010, PPG Paints Trading (Shanghai) Co., Ltd., a wholly-owned Chinese 

subsidiary of United States-based PPG Industries, Inc., pled guilty and was sentenced in U.S. 

District Court for the District of Columbia for violating the International Emergency Economic 

Powers Act and the EAR. PPG Paints Trading conspired to export high-performance PPG 

third- without first obtaining the required 

export license. PPG Paints Trading paid $2 million in criminal fines and $32,319 in forfeiture. 

PPG and PPG Paints Trading also paid $1.75 million in civil penalties to settle BIS 

administrative charges.
CHAPTER 12 

Surreptitious Listening 

(Section 742.13)

Export Control Program Description and Licensing Policy 

The United States maintains controls on surreptitious listening items to prevent the unlawful 

interception of oral, wire, or electronic communications by terrorists and others who may use the 

information for unlawful purposes or in ways contrary to the national security and foreign policy 

of the United States. Surreptitious Listening (SL) items are devices used for the surreptitious 

interception of wire, oral, or electronic communications and are controlled under Export Control 

Classification Number (ECCN) 5A980. Export controls extend to related software and 

technology through ECCNs 5D980 (software) and 5E980 (technology). 

License Requirements and Licensing Policy 

A license is required for the export or reexport to any destination of any electronic, mechanical, 

or other device primarily useful for surreptitious interception of wire, oral, or electronic 

communications. The Department of Commerce will generally approve applications for the 

export and reexport of items controlled for SL reasons other than to destinations for which a 

license is also required for AT reasons, and where the end-users are providers of wire or 

electronic communication service acting in the normal course of business; or to officers, agents, 

or employees of, or persons under contract with, the United States, a State, or a political 

subdivision thereof, when engaged in the normal course of government activities. License 

applications from other parties will generally be denied. 

The license requirements set forth in the EAR are independent of the requirements of section 802 

of the Omnibus Crime Control and Safe Streets Act of 1968, as amended (18 U.S.C. 2512). 

These controls do not supersede, nor do they implement, construe, or limit the scope of any of 

the statutory restrictions of section 18 U.S.C. 2512 (section 802 of the Omnibus Crime Control 

and Safe Streets Act of 1968, as amended) that are enforced by the U.S. Department of Justice. 

Analysis of Control as Required by Section 6(f) of the Export Administration Act 

A. The Purpose of the Control 

The purpose of surreptitious listening controls is to: prevent the unlawful interception of oral, 

wire, or electronic communications by terrorists and others who may put the information gained 
through intercepted communications to an unlawful use; promote the protection of privacy of 

oral, wire, or electronic communications; and protect against threats of terrorism around the 

world. The controls also distance the United States from nations that have repeatedly supported 

acts of terrorism and from individuals and organizations that commit terrorist acts. 

B. Considerations and/or Determinations of the Secretary of Commerce 

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has 

determined that the surreptitious listening controls are likely to achieve the intended foreign 

policy purpose, notwithstanding the availability of these controlled items from other countries, 

and that the foreign policy purpose cannot be achieved through negotiations or other alternative 

means. 

Sending or carrying the devices in foreign commerce is already subject to independent criminal 

sanction.22 Nevertheless, the imposition of foreign policy-based controls on these devices and 

related software and technology will enhance the probability of achieving the intended foreign 

policy purposes. 

Although the availability of comparable goods from foreign sources limits the effectiveness of 

the surreptitious listening controls, these controls restrict access to U.S.-origin commodities, 

technology, and software, and demonstrate U.S. determination to prevent the unlawful 

interception of communications, to promote privacy protection, and to oppose and distance itself 

from international terrorism. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that the 

imposition of these controls is consistent with the foreign policy objectives of the United States 

and will not have any significant adverse foreign policy consequences. The imposition of 

surreptitious listening controls will 

U.S.-origin items to persons engaged in, or supportive of, unlawful uses of intercepted 

communications, privacy violations, and acts of terrorism. The imposition of these controls is 

also compatible with overall U.S. policy towards Cuba, Iran, North Korea, Sudan, and Syria. 

The U.S. Government intends to promote privacy protection and aid in deterring criminal 

activities, including terrorism, through these foreign policy-based controls. 

3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to 

the imposition of surreptitious listening controls is not likely to render the controls ineffective, 

nor will any adverse reaction by other countries be counterproductive to U.S. foreign policy 

22 Omnibus Crime Control and Safe Streets Act of 1968, as amended (18 U.S.C. 2512). 
interests. Most countries are generally supportive of U.S. efforts to prevent unlawful uses of 

intercepted communications, including uses of intercepted communications by terrorists or states 

that support international terrorism. 

4. Economic Impact on U.S. Industry. The Secretary has determined that any adverse 

effect of these controls on the economy of the United States, including the competitive position 

of the United States in the international economy, does not exceed the benefit to U.S. foreign 

policy objectives. Because sending or carrying the devices in foreign commerce is already 

subject to independent criminal sanction, the imposition of foreign policy-based controls on the 

devices and related software and technology will not have a discernible economic impact. 

In fiscal year 2011, the Department of Commerce approved two applications for the export or 

reexport of SL controlled items valued at a total of $3.2 million. In addition, the Department 

returned without action four applications for items valued at $1.2 million. No applications were 

rejected. During the same time period, the Department completed five commodity classification 

determinations classifying items under ECCNs 5A980, 5D980, or 5E980. 

5. Effective Enforcement of Controls. The Secretary has determined that the United States 

has the ability to enforce these controls effectively. The U.S. Government can effectively 

enforce these controls by focusing on preventive enforcement, using regular outreach efforts to 

keep industry informed of the license requirements and prevent inadvertent exports, and 

gathering leads on activities of concern. 

C. Consultation with Industry 

In a September 1, 2011 Federal Register notice (76 FR 54426), the Department of Commerce 

solicited comments from industry and the public on the effectiveness of U.S. foreign policybased export controls. In addition, comments were solicited from the public via the BIS website. 

The comment period closed on October 3, 2011. A detailed review of all public comments 

received can be found in Appendix I. 

The Department of Commerce consults with the Regulations and Procedures Technical Advisory 

Committee (RPTAC), one of seven such committees that advise the Bureau of Industry and 

Security (BIS), in preparation for publication of major regulatory changes affecting foreign 

policy controls. 

D. Consultation with Other Countries 

The United States continues to consult with a number of countries, both on a bilateral and a 

multilateral basis. In general, most countries are supportive of measures designed to prevent the 
unlawful use of intercepted communications, protect privacy, and combat terrorism, but do not 

implement strict export controls on these items similar to those imposed by the United States. 

The United States will consult with other countries as necessary regarding these changes in order 

to ensure compliance and encourage other countri

activity through controlling surreptitious listening devices. 

E. Alternative Means 

The U.S. Government continually reviews the means by which it can curtail privacy violations 

and terrorism and has taken a wide range of diplomatic, political, and security-related steps to 

support this effort. Imposing these foreign policy-based controls enhances these efforts in order 

to prevent terrorist-supporting countries from acquiring items subject to U.S. export control 

criminal activity worldwide. 

F. Foreign Availability 

The commodities subject to these controls are likely available from foreign suppliers. The 

Department of Commerce is aware that these controls will not prevent the shipment of such 

foreign-origin items from other countries, but the regulation minimizes the risk of diversion of 

U.S.-origin devices and related software and technology primarily useful for surreptitious 

interception of wire, oral, or electronic communications to end-users without a legitimate 

commercial need for such devices. 
CHAPTER 13 

Entity List 

(Supplement No. 4 to Part 744) 

Export Control Program Description and Licensing Policy 

To protect and advance the national security and foreign policy interests of the United States, the 

Bureau of Industry and Security (BIS) has adopted foreign policy-based end-use and end-user 

controls that focus on entities that pose a threat to U.S. national security or foreign policy 

interests, and BIS has taken steps to provide additional information to the public about these 

entities of concern. The Entity List (Supplement No. 4 to Part 744 of the Export Administration 

Regulations (EAR)) provides notice to the public that certain exports, reexports, and transfers 

(in-country) to the foreign persons identified on the Entity List (including businesses, research 

institutions, government and private organizations, individuals, and other types of legal persons) 

require a license from BIS and that the availability of License Exceptions in such transactions is 

limited. 

Established in 1997, the Entity List prohibits unlicensed exports, reexports and transfers (incountry) of items subject to the EAR for use in or by a party involved in defined nuclear, missile, 

chemical and biological weapons activities (see Sections 744.2, 744.3, and 744.4 of the EAR). 

The Entity List also prohibits unlicensed exports, reexports and transfers (in-country) of items 

subject to the EAR to certain persons in Russia, persons acting contrary to the national security 

or foreign policy interests of the United States, and persons sanctioned by the Department of 

State (see Sections 744.10, 744.11 and 744.20 of the EAR). Entity List entries specify the 

license requirement and license review policy imposed on each listed entity. These license 

requirements are supplemental to any license requirements imposed on the transaction elsewhere 

in the EAR. 

The End-user Review Committee (ERC) implements revisions to the Entity List; entities are 

added to the List by majority vote, while removals or other changes to the List are implemented 

by unanimous vote. The ERC conducts an annual review of all persons on the Entity List and 

revises and updates the list as necessary. Persons on the Entity List may request removal from 

the List or a modification of their status on the List under Section 744.16 of the EAR. The ERC 

is chaired by the Department of Commerce and is composed of representatives of the 

Departments of Commerce, State, Defense, Energy, and where appropriate the Treasury. 
Summary of 2011 Changes 

On January 25, 2011, BIS published a final rule in the Federal Register (76 FR 4228) that 

implemented changes to the Entity List based on the November 2010 bilateral understanding 

between the United States and India. Under the agreement, the President and Indian Prime 

Minister Singh agreed to take mutual steps related to export controls, which included the 

-related entities from the Entity List. In the rule, nine 

Indian entities were removed from the Entity List. 

On April 18, 2011, BIS published a final rule in the Federal Register (76 FR 21628) that 

Iran and the United Arab Emirates (UAE). The rule removed one person, located in the UAE, 

and modified four entries by clarifying names, adding addresses, and/or adding aliases for one 

Iranian person and three UAE persons. This rule also removed one person located in the United 

Kingdom (UK and a review of 

information provided in the removal request by the ERC. In addition, the rule clarified an 

PRC) to accurately reflect 

the relationship between two aliases listed under the entry. Lastly, the rule updated the Code of 

On May 24, 2011, BIS published a final rule in the Federal Register (76 FR 29998) that 

implemented changes to the Entity List based on a policy decision in recognition of the bilateral 

partnership between the United States and Russia. The rule implemented a decision by the 

Departments represented on the ERC to remove the entry for the Federal Atomic Power of 

Russia (Rusatom), now known as the Russian State Corporation of Atomic Energy (Rosatom), 

from the Entity List. The ERC also modified two entries to clarify that two Rosatom 

components -- the All-Russian Scientific Research Institute of Technical Physics (VNIITF) and 

the All-Russian Scientific Research Institute of Experimental Physics (VNIIEF) -- remained on 

the Entity List. 

On June 28, 2011, BIS published a final rule in the Federal Register (76 FR 37632) that added 

eight persons to the Entity List under Section 744.11 of the EAR. The ERC added these persons 

based on evidence that they engaged in actions that could enhance the military capability of Iran, 

a country designated by the U.S. Secretary of State as having repeatedly provided support for 

acts of international terrorism, and because their overall conduct posed a risk of ongoing EAR 

violations. For all eight persons, the ERC specified a license requirement for all items subject to 

the EAR and established a license application review policy of a presumption of denial. The 

persons added are located in France (three entries), Iran (three entries), and the UAE (two 

entries). 
On July 25, 2011, BIS published a final rule in the Federal Register (76 FR 44259) that added 

six persons to the Entity List under Section 744.11 of the EAR. The ERC added these persons 

based on evidence that they engaged in actions that could enhance the military capability of Iran, 

and because their overall conduct posed a risk of ongoing EAR violations. The ERC determined 

that six persons purchased electronic components from U.S. firms and then resold the 

components to companies in Iran without the required U.S. export license. These same 

components were later found in Iraq in unexploded improvised explosive devices. For all six 

entities, the ERC specified a license requirement for all items subject to the EAR and established 

a license application review policy of a presumption of denial. The persons added are located in 

Hong Kong (two entries) and Lebanon (four entries). 

On August 15, 2011, BIS published a final rule in the Federal Register (76 FR 50407) that added 

fifteen persons under twenty entries to the Entity List, based on Section 744.11 of the EAR.23 

The ERC added these fifteen persons to the Entity List based on evidence that they were 

involved in activities contrary to U.S. national security or foreign policy interests, specifically 

the leasing, transfer, and operation of commercial aircraft subject to the EAR to Syria and Iran 

without the requisite licenses. 

the license requirements for exports and reexports to Syria pursuant to General Order No. 2 of 

Supplement No. 1 to part 736 of the EAR and violated the sanctions against Iran pursuant to the 

Iran Transactions Regulations (31 CFR Part 560). Both Syria and Iran have been designated by 

the Secretary of State as countries that have repeatedly provided support for acts of international 

terrorism. For all fifteen persons, the ERC specified a license requirement for all items subject to 

the EAR and established a license application review policy of a presumption of denial. The 

persons added are located in Cyprus (one entry), Greece (three entries), Iran (four entries), Syria 

(two entries), Ukraine (five entries), and the United Kingdom (five entries). 

The August 15, 2011 rule also implemented changes to the Entity List on 

annual review of the Entity List for listed entities in Syria. The rule modified seven entries by 

clarifying names, adding addresses, and/or adding aliases to the entries of seven Syrian persons. 

Lastly, the rule modified an existing entry located in the PRC in order to clarify the relationship 

of a listed alias to the existing entry and to provide additional information on the alias. 

On October 12, 2011, BIS published a final rule in the Federal Register (76 FR 63184) that 

added two persons to the Entity List based on evidence that they were involved in activities 

contrary to U.S. national security and foreign policy interests (Section 744.11 of the EAR). The 

ERC added the two persons based on evidence that they were complicit in violations of the EAR 

and Hong Kong export control requirements for shipments to the PRC. For both entities, the 

23 The five additional entries account for the five alternate addresses of persons in multiple destinations. 
ERC specified a license requirement for all items subject to the EAR and established a license 

review policy of a presumption of denial. The persons added are both located in Hong Kong. 

The October 12, 2011 rule also removed one Hong Kong person from the Entity List on the basis 

In addition, the 

rule removed three persons, located in Hong Kong and New Zealand, from the Entity List. 

These persons were removed as a result of their submitted requests for removal submitted and a 

review of information provided by the ERC. 

On October 31, 2011, BIS published a final rule in the Federal Register (76 FR 67059) that 

added fifteen persons under twenty-five entries to the Entity List, based on section 744.11 of the 

EAR. 24 The ERC added eight of the persons based on evidence that they engaged in actions that 

could enhance the military capability of Iran, a country designated by the U.S. Secretary of State 

as having repeatedly provided support for acts of international terrorism, and of militant 

insurgents operating in Iraq against the U.S. military, and because their overall conduct posed a 

risk of ongoing EAR violations. Specifically, these persons participated in a complex and 

layered network to procure items subject to the EAR and/or the International Traffic in Arms 

Regulations (ITAR) for shipment to Iran and/or the PRC without the requisite licenses. The 

remaining seven persons were added based on evidence that they engaged in actions facilitating 

the activities of the procurement network described above. For all fifteen persons, the ERC 

specified a license requirement for all items subject to the EAR and established a license 

application review policy of a presumption of denial. The persons added are located in Hong 

Kong (seven entries), Iran (three entries), the PRC (five entries), and Singapore (ten entries). 

On November 21, 2011, BIS published a final rule in the Federal Register (76 FR 71867) that 

added fourteen persons under twenty-one entries to the Entity List, based on evidence that they 

were involved in activities contrary to U.S. national security and foreign policy interests (section 

744.11 of the EAR). 25 The ERC added thirteen persons in Afghanistan and Pakistan based on 

evidence that they provided material support to persons engaged against U.S. and Coalition 

forces in Afghanistan. In addition, the ERC added one person in the PRC (with an alternate 

address in Hong Kong) based on evidence that it sought to obtain items subject to the EAR 

without the required authorizations. For all fourteen persons, the ERC specified a license 

requirement for all items subject to the EAR and established a license application review policy 

of a presumption of denial. The persons added are located in Afghanistan (eleven entries), Hong 

Kong (one entry), Pakistan (eight entries), and the PRC (one entry). 

24 The ten additional entries account for the ten alternate addresses of persons in multiple destinations. 25 The seven additional entries account for the seven alternate addresses of persons in multiple 

destinations. 
The November 21, 2011 rule also implemented changes to the Entity List on the basis of the 

entries by adding addresses to the entries of two Canadian persons. 

On December 16, 2011, BIS published a final rule in the Federal Register (76 FR 78146) that 

added two persons to the Entity List, based on section 744.11 of the EAR. The ERC added these 

persons based on evidence that they were involved in the unauthorized transfer of U.S.-origin 

internet filtering equipment to Syria without the licenses required under the EAR, for possible 

-

democracy activists. For both persons, the ERC specified a license requirement for all items 

subject to the EAR and established a license application review policy of a presumption of 

denial. The persons added are located in the United Arab Emirates. 

The December 16, 2011 rule also implemented changes to the Entity List on the basis of the 

The rule removed four persons (two located in Singapore and two located in Taiwan), and 

modified one entry by adding an address to the entry of one Malaysian person. 

Licensing Policy 

For each person placed on the Entity List, the ERC specifies a license requirement and a license 

review policy. The requirement and review policy vary from person to person and are described 

Analysis of Controls as Required by Section 6(f) of the Export Administration Act 

A. The Purpose of the Controls 

national security and foreign policy interests by demonstrating U.S. resolve to restrict trade with 

persons that fail to comply with U.S. export control laws and regulations, fail to adhere to 

acceptable norms of international behavior, or whose conduct threatens U.S. interests. The 

purpose of the Entity List is to inform the public of entities that have engaged in activities that 

could result in an increased risk of diversion of items for use in weapons of mass destruction 

programs or in other activities contrary to U.S. national security and foreign policy interests. 
B. Considerations and/or Determinations of the Secretary of Commerce 

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has 

determined that imposing foreign policy-based controls as part of the licensing requirements 

imposed on persons added to the Entity List is likely to achieve the intended national security 

and foreign policy purposes. 

Although the United States regularly negotiates with other countries on how best to achieve 

export control goals, these negotiations may not achieve those U.S. export control objectives that 

are focused on individual persons. In cases where U.S. interests are at stake, the United States 

retains the authority to impose controls that reflect unilateral foreign policy objectives. 

The United States seeks to prevent the use of U.S.-origin items in connection with actions that 

are detrimental to U.S. foreign policy goals. To that end, the license requirements that apply to 

entities placed on the Entity List are intended to prevent the acquisition of certain items by 

persons who might engage in activities contrary to U.S. interests. The Entity List enables BIS to 

target specific persons with export license requirements, thereby avoiding the imposition of 

overly broad license requirements on numerous items destined for many destinations. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that 

imposing these controls is compatible and consistent with the national security and foreign 

policy objectives of the United States. Specifically, these controls are consistent with the U.S. 

policy of prohibiting exports, reexports, and transfers (in-country) when specific and articulable 

facts provide reasonable cause to believe that the parties to whom the items will be provided are 

involved in activities contrary to the national security or foreign policy interests of the United 

States, or pose a significant risk of becoming involved in such activities. Additionally, the 

will be compatible with U.S. foreign policy interests. The Secretary has further determined that 

these expanded controls will not have significant adverse foreign policy consequences. 

3. Reaction of Other Countries. The Secretary has determined that although other 

countries may raise objections to the Entity List, any adverse reaction to the expansion of the 

Entity List is not likely to render the Entity List ineffective, nor will any adverse reaction by 

other countries be counterproductive to U.S. foreign policy interests. Further, the Department of 

Commerce coordinates with the Department of State to consult with countries impacted by 

changes to the Entity List. These consultations are completed in advance of any changes to the 

List. 

4. Economic Impact on United States Industry. The Secretary has determined that the cost 

to industry resulting from the maintenance of these controls does not exceed the benefit to U.S. 
foreign policy. These controls provide an effective alternative to imposing additional and overly 

broad end use or geographic license export control requirements. The identification of persons 

through publication in the Entity List also reduces uncertainty for U.S. industry. Thus, these 

controls minimize the economic impact on industry while allowing BIS to achieve U.S. foreign 

policy objectives through strengthened U.S. export controls. Additionally, interagency 

representation on the ERC provides reasonable assurance that additions to the Entity List will 

reflect significant U.S. foreign policy concerns. 

5. Effective Enforcement of Controls. The Secretary has determined that the United States 

has the ability to enforce these controls effectively. By imposing license requirements on clearly 

identified persons via the Entity List, the U.S. Government facilitates the identification of actual 

and potential violations of the EAR. Publication of the Entity List helps U.S. industry and 

foreign companies to identify restricted parties, thereby reducing inadvertent violations of the 

EAR and increasing compliance with the export controls. 

C. Consultation with Industry 

In a September 1, 2011 Federal Register notice (76 FR 54426), the Department of Commerce 

solicited comments from industry and the public on the effectiveness of U.S. foreign policybased export controls. The comment period closed on October 3, 2011. A detailed review of all 

public comments received can be found in Appendix I. In addition, comments were solicited 

committees are solicited on an ongoing basis and are not specific to this report. 

D. Consultation with Other Countries 

The United States continues to consult with a number of countries, on both a bilateral and 

multilateral basis, regarding the persons on the Entity List. These consultations are based on 

specific and articulable facts that provide reasonable cause to believe that the parties pose a 

significant risk of becoming involved in activities contrary to the national security or foreign 

policy interests of the United States and other countries. Most countries are supportive of U.S. 

export and reexport controls and enforcement. 

E. Alternative Means 

The United States continually reviews its means to curtail activities that are contrary to U.S. 

interests. The United States has taken a wide range of diplomatic, political, and security-related 

steps to support this effort. 
F. Foreign Availability 

The Department of Commerce is aware that these controls will not necessarily prevent the 

acquisition of sensitive commodities, software, or technologies by persons listed on the Entity 

List. However, by publishing the Entity List and imposing penalties for violations of the 

licensing requirements on the Entity List, the United States is sending a strong message that may 

deter suppliers from participating in transactions with persons known or suspected of violating 

the EAR or acting contrary to U.S. interests. Additionally, the United States cooperates with 

other governments to curtail transactions by other (third-country) suppliers. 
APPENDIX I

Summary of Public Comments 

on Foreign Policy-Based Export Controls

The 

comments on existing foreign policy-based export controls maintained under Section 6 of the 

Export Administration Act of 1979, as amended (EAA), and on the Entity List (Supplement 

No. 4 to Part 744 of the Export Administration Regulations (EAR)) through a Federal Register

notice published September 1, 2011 (76 FR 54426). In addition, comments were solicited from 

the public through the BIS Web page. Comments from the Department

Advisory Committees are solicited on an ongoing basis and are not specific to this report. 

BIS requested comments on how existing foreign policy controls have affected exporters and the 

overall public. The notice invited public comments about issues such as: the effectiveness of 

controls when foreign availability exists; whether the goals of the controls can be achieved 

through other means such as negotiations; the compatibility of the controls with the overall U.S. 

policy toward a country in question; the effect of controls on U.S. economic performance; and 

the ability to enforce the controls. 

The comment period closed on October 3, 2011. BIS received two comments, one from an 

individual and one from a university. BIS has made these comments available for review in the 

BIS Freedom of Information Act Reading Room available on the BIS Web page. BIS also 

makes comments available for public review upon request. This Appendix summarizes the 

comments received. 

Industry Comments 

BIS reviewed and considered the two comments received, one from Mr. William Root and 

another from the Massachusetts Institute of Technology. 

Mr. Root, in his individual capacity, submitted comments on current U.S. embargoes, special 

controls on certain countries in Country Group D, and the availability of certain License 

imposed and that restrictions should be limited to controls on luxury goods destined to leaders 

per international agreement. Mr. Root further asserted that the embargo of Cuba has been 

ineffective in furthering its original foreign policy objective of obtaining compensation for 

nationalized property. Mr. Root questioned the continuing special controls on Rwanda, 

indicating that they should be removed. 
Mr. Root questioned the inclusion of certain countries in Country Group D1, D2, D3 or D4 and 

the limitations on license exceptions that derive from the country being in the category. These 

countries include Iraq, Libya, Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Moldova, 

Mongolia, Russia, Tajikistan, Turkmenistan and Ukraine. Mr. Root also suggested removing the 

assurance prerequisite for License Exception Technology Software Restricted (TSR), indicating 

le was that recent events no longer merited keeping these 

countries in these categories. Finally, Mr. Root questioned the reasonableness of License 

Exception Civilian (CIV) as it applies to D1 countries and to software items which are not 

eligible for TSR arguing that the rationale for TSR is outdated. Mr. Root also suggested that 

License Exception Additional Permissive Reexports (APR) in 740.16(a) be removed, stating his 

belief that the exception applied to a COCOM procedure that is no longer in place. 

Claude R. Canizares, Vice President for Research and Associate Provost of the Massachusetts 

Institute of Technology (MIT), commented that U.S. encryption controls should be more 

focused. According to Mr. Canizares, encryption controls should focus on devices and source 

code that specifically embody and deliver state-of-the-art encryption, and controls should be 

reduced on devices and software that are only peripherally involved with encryption or that can 

be easily purchased from foreign sources. Mr. Canizares asserted that more focused controls 

would be equally likely to achieve the foreign policy purposes as existing controls and would 

also be compatible with U.S. foreign policy objectives. He also argued that other countries 

would likely welcome more focused controls and that more focused controls would enhance the 

pace of research, leading to future economic growth and exports. 
APPENDIX II 

Multilateral Export Control Regimes in 2011

WASSENAAR AG MTCR NSG

Argentina Argentina Argentina Argentina 

Australia Australia Australia Australia 

Austria Austria Austria Austria 

 Belarus 

Belgium Belgium Belgium Belgium 

 Brazil Brazil 

Bulgaria Bulgaria Bulgaria Bulgaria 

Canada Canada Canada Canada 

Croatia Croatia Croatia 

 Cyprus Cyprus 

Czech Republic Czech Republic Czech Republic Czech Republic 

Denmark Denmark Denmark Denmark 

Estonia Estonia Estonia 

 European Commission European Union (Observer) 

Finland Finland Finland Finland 

France France France France 

Germany Germany Germany Germany 

Greece Greece Greece Greece 

Hungary Hungary Hungary Hungary 

 Iceland Iceland Iceland 

Ireland Ireland Ireland Ireland 

Italy Italy Italy Italy 

Japan Japan Japan Japan 

 Kazakhstan 

Latvia Latvia Latvia 

Lithuania Lithuania Lithuania 

Luxembourg Luxembourg Luxembourg Luxembourg 

Malta Malta Malta 

Netherlands Netherlands Netherlands Netherlands 

New Zealand New Zealand New Zealand New Zealand 

Norway Norway Norway Norway 

 

Poland Poland Poland Poland 

Portugal Portugal Portugal Portugal 

Rep. of Korea (South Korea) Rep. of Korea (South Korea) Rep. of Korea (South Korea) Rep. of Korea (South Korea) 

Romania Romania Romania 

Russian Federation Russia Federation Russian Federation 

Slovak Republic Slovak Republic Slovak Republic 

Slovenia Slovenia Slovenia 
WASSENAAR AG MTCR NSG

South Africa South Africa South Africa 

Spain Spain Spain Spain 

Sweden Sweden Sweden Sweden 

Switzerland Switzerland Switzerland Switzerland 

Turkey Turkey Turkey Turkey 

Ukraine Ukraine Ukraine Ukraine 

United Kingdom United Kingdom United Kingdom United Kingdom 

United States United States United States United States 

AG: Australia Group; MTCR: Missile Technology Control Regime; NSG: Nuclear Suppliers Group 
Appendix III Selected Rules Published by the Department of Commerce in 2011 

118 

2012 Report on Foreign Policy-Based Export Controls 

APPENDIX III 

Selected Rules Published by the Department of Commerce in 2011 

Publication 

Date 

Federal 

Register 

Citation 

Rule 

01/09/12 77 FR 1017 Export and Reexport License Requirements for Certain Microwave and 

Millimeter Wave Electronic Components 

12/23/11 76 FR 80282 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) 

12/23/11 76 FR 80291 Revisions to the Export Administration Regulations (EAR): Controls 

Applicable to Submersible Vessels, Oceanographic Equipment and Related 

Articles that the President Determines No Longer Warrant Control under the 

United States Munitions List 

12/16/11 76 FR 78146 Addition of Certain Persons on the Entity List; and Implementation of Entity 

List Annual Pension Changes 

12/12/11 76 FR 77115 Amendments to the Export Administration Regulations Facilitating Enhanced 

Public Understanding of the Provisions That Implement the Comprehensive 

U.S. Sanction on Syria 

12/06/11 76 FR 76072 Revisions to the Export Administration Regulations (EAR): Control of Gas 

Turbine Engines and Related Items the President Determines No Longer 

Warrant Control Under the United States Munitions List (USML). (Proposed 

Rule) 

12/06/11 76 FR 76085 Revisions to the Export Administration Regulations (EAR): Control of 

Military Vehicles and Related Items that the President Determines No Longer 

Warrant Control on the United States Munitions List. (Proposed Rule) 

11/21/2011 76 FR 71867 Addition of Certain Persons to the Entity List; and Implementation of Entity 

List Annual Review Changes 

11/14/11 76 FR 70337 Exports and Reexports to the Principality of Liechtenstein 

11/09/11 76 FR 69609 Amendment to Existing Validated EndRepublic of China: National Semiconductor Corporation and Semiconductor 

Manufacturing International Corporation 

11/07/2011 76 FR 68675 Revisions to the Export Administration Regulations (EAR): Control of 

Aircraft and Related Items the President Determines No Longer Warrant 

Control Under the United States Munitions List (USML). (Proposed Rule) 

10/12/2011 76 FR 63184 Addition of Certain Persons on the Entity List; Implementation of Entity List 

Annual Review Change; and Removal of Persons from the Entity List Based 

on Removal Requests 

09/12/2011 76 FR 56099 Implementation of a Decision Adopted under the Australia Group (AG) 

Intersessional Silent Approval Procedures in 2010 and Related Editorial 

Amendments 

09/06/2011 76 FR 54928 Export Administration Regulations: Netherlands Antilles, Curaçao, Sint 
Appendix III Selected Rules Published by the Department of Commerce in 2011 

119 

2012 Report on Foreign Policy-Based Export Controls 

Publication 

Date 

Federal 

Register 

Citation 

Rule 

Maarten and Timor-Leste 

08/15/2011 76 FR 50407 Addition of Persons Acting Contrary to the National Security or Foreign 

Policy Interests of the United States to the Entity List; and Implementation of 

Additional Changes from the Annual Review of the Entity List 

07/25/2011 76 FR 44259 Addition of Certain Persons on the Entity List: Addition of Persons Acting 

Contrary to the National Security or Foreign Policy Interests of the United 

States 

07/15/2011 76 FR 41958 Proposed Revisions to the Export Administration Regulations (EAR): Control 

of Items the President Determines No Longer Warrant Control Under the 

United States Munitions List (USML) 

07/13/2011 76 FR 41046 Addition of the New State of the Republic of South Sudan to the Export 

Administration Regulations 

07/12/2011 76 FR 40804 Technical Amendment to the Authorization Validated End-User Regulations 

of the Export Administration Regulations 

06/28/2011 76 FR 37632 Addition of Certain Persons on the Entity List: Addition of Persons Acting 

Contrary to the National Security or Foreign Policy Interests of the United 

States 

06/24/2011 76 FR 36986 Export Controls for High Performance Computers: Wassenaar Arrangement 

Agreement Implementation for ECCN 4A003 and Revisions to License 

Exception APP 

06/16/2011 76 FR 35276 Export Control Reform Initiative: Strategic Trade Authorization License 

Exception 

05/24/2011 76 FR 29998 Removal and Modifications for Persons Listed Under Russia on the Entity 

List 

05/20/2011 76 FR 29610 Wassenaar Arrangement 2010 Plenary Agreements Implementation: 

Commerce Control List, Definitions, Reports 

04/29/2011 76 FR 23872 Editorial Corrections to the Export Administration Regulations 

04/20/2011 76 FR 22017 Implementation of the Understandings Reached at the 2010 Australia Group 

(AG) Plenary Meeting and Other AG-Related Clarifications and Corrections 

to the EAR 

04/18/2011 76 FR 21628 Implementation of Additional Changes From the Annual Review of the Entity 

List; Removal of Person Based on Removal Request 

01/25/2011 76 FR 4228 U.S.-India Bilateral Understanding: Revisions to U.S. Export and Reexport 

Controls Under the Export Administration Regulations 

01/18/2011 76 FR 2802 Additions and Revisions to the List of Validated End-Users in the People's 

Republic of China: CSMC Technologies Corporation and Advanced Micro 

Devices China, Inc. 

01/07/2011 76 FR 1059 Publicly Available Mass Market Encryption Software and Other Specified 

Publicly Available Encryption Software in Object Code