Federal Register / Vol. 77, No. 141 / Monday, July 23, 2012 / Rules and Regulations 42973 

as shown in area E of figure 1 to paragraph 

(e) of this AD for pitting, corrosion, or a 

crack. Remove any surface rust with a wire 

brush or steel wool. 

(2) If there is a crack, pitting, or corrosion, 

before further flight, replace the mast with an 

airworthy mast. 

(3) Within 10 days, report any findings of 

a crack, pitting, or corrosion to the address 

listed in paragraph (g)(1) of this AD. Include 

the number of hours TIS and calendar time 

since the last overhaul and inspection of the 

mast and the restricted category type of the 

helicopter. 

(f) Paperwork Reduction Act Burden 

Statement 

A federal agency may not conduct or 

sponsor, and a person is not required to 

respond to, nor shall a person be subject to 

a penalty for failure to comply with a 

collection of information subject to the 

requirements of the Paperwork Reduction 

Act unless that collection of information 

displays a current valid OMB Control 

Number. The OMB Control Number for this 

information collection is 2120–0056. Public 

reporting for this collection of information is 

estimated to be approximately 5 minutes per 

response, including the time for reviewing 

instructions, completing and reviewing the 

collection of information. All responses to 

this collection of information are mandatory. 

Comments concerning the accuracy of this 

burden and suggestions for reducing the 

burden should be directed to the FAA at: 800 

Independence Ave. SW., Washington, DC 

20591, Attn: Information Collection 

Clearance Officer, AES–200. 

(g) Alternative Methods of Compliance 

(AMOCs) 

(1) The Manager, Los Angeles Aircraft 

Certification Office, FAA, may approve 

AMOCs for this AD. Send your proposal to: 

John Cecil, Aviation Safety Engineer, Los 

Angeles Aircraft Certification Office, 

Transport Airplane Directorate, FAA, 3960 

Paramount Blvd., Lakewood, CA 90712; 

telephone (562) 627–5228; email 

john.cecil@faa.gov. 

(2) For operations conducted under a 14 

CFR part 119 operating certificate or under 

14 CFR part 91, subpart K, we suggest that 

you notify your principal inspector, or 

lacking a principal inspector, the manager of 

the local flight standards district office or 

certificate holding district office before 

operating any aircraft complying with this 

AD through an AMOC. 

(h) Additional Information 

(1) Arrow Falcon Exporters, Inc., Alert 

Service Bulletin: 2012–58–01, Revision 1, 

dated February 20, 2012, which is not 

incorporated by reference, contains more 

information about the subject of this AD. 

(2) For service information identified in 

this AD, contact Arrow Falcon Exporters, 

Inc., 2081 South Wildcat Way, Porterville, 

CA 93257; telephone (559) 781–8604; fax 

(559) 781–9271; email afe@arrowfalcon.com. 

(2) You may review the service information 

at the FAA, Office of the Regional Counsel, 

Southwest Region, 2601 Meacham Blvd., 

Room 663, Fort Worth, Texas 76137. 

(i) Subject 

Joint Aircraft Service Component (JASC) 

Code: 6300: Main Rotor Drive. 

Issued in Fort Worth, Texas, on July 5, 

2012. 

Kim Smith, 

Manager, Rotorcraft Directorate, Aircraft 

Certification Service. 

[FR Doc. 2012–17279 Filed 7–20–12; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Parts 732, 738, 746, and 774 

[Docket No. 110725414–1480–01] 

RIN 0694–AF31 

Export and Reexport Controls to 

Rwanda and United Nations Sanctions 

Under the Export Administration 

Regulations 

AGENCY: Bureau of Industry and 

Security, Commerce. 

ACTION: Final rule. 

SUMMARY: In this final rule, the Bureau 

of Industry and Security (BIS) amends 

the Export Administration Regulations 

(EAR) to implement United Nations 

Security Council Resolution (UNSCR) 

1823 (2008), which, among other things, 

terminated sanctions against Rwanda 

concerning ‘‘arms and related materiel’’ 

imposed in 1994 pursuant to UNSCR 

918. This rule includes conforming 

changes in the EAR related to the 

termination of the United Nations 

embargo on ‘‘arms and related materiel’’ 

against Rwanda, including the removal 

of machetes from the Commerce Control 

List (CCL). Further, BIS amends Part 746 

(Embargoes and Other Special Controls) 

of the EAR to require a license to export 

or reexport certain items to countries 

subject to United Nations Security 

Council arms embargoes. A presumptive 

denial policy will apply to applications 

to export or reexport items that are 


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42974 Federal Register / Vol. 77, No. 141 / Monday, July 23, 2012 / Rules and Regulations 

controlled for UN reasons and that 

would contravene a United Nations 

Security Council arms embargo. 

DATES: This rule is effective July 23, 

2012. 

FOR FURTHER INFORMATION CONTACT: 

Susan Kramer, Foreign Policy Division, 

Office of Nonproliferation and Treaty 

Compliance, Bureau of Industry and 

Security, U.S. Department of Commerce, 

Telephone (202) 482–4252 or Email 

Susan.Kramer@bis.doc.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

The arms embargo against Rwanda 

was initially imposed through United 

Nations Security Council Resolution 

(UNSCR) 918 on May 17, 1994, and was 

continued through subsequent 

resolutions, including UNSCR 1011 on 

August 16, 1995. The embargo was 

implemented in the EAR on August 8, 

1994 (59 FR 40235), most recently in 

§ 746.8 of the EAR. The United Nations 

Security Council terminated the arms 

embargo against Rwanda on July 10, 

2008, via UNSCR 1823. Accordingly, 

this rule removes the United Nations 

Embargo (UN) controls on Rwanda by 

removing Rwanda from Part 746. BIS 

also makes conforming changes related 

to the removal of UN controls on 

Rwanda in § 732.3, Supplement No. 1 to 

Part 738 and Supplement No.1 to Part 

774 of the EAR. 

One of the conforming changes is the 

removal of machetes from Export 

Control Classification Number (ECCN) 

0A988. Machetes were added to the CCL 

when BIS in 1994 (then called the 

Bureau of Export Administration) 

implemented the United Nations 

Security Council arms embargo against 

Rwanda by way of Executive Order 

12918 (59 FR 40235 (Aug. 8, 1994)). 

Because this rule removes the UN 

controls imposed against Rwanda and 

because machetes were added to the 

CCL to address concerns with their use 

in Rwanda in particular, BIS is 

removing machetes from the CCL. 

In this final rule, BIS also amends 

§ 746.1(b) to require a license for the 

export or reexport of items controlled 

for ‘‘UN’’ reasons to countries subject to 

United Nations Security Council arms 

embargoes. Paragraph (b)(2) lists all the 

countries subject to United Nations 

Security Council arms embargoes. 

Paragraph (b)(3) states that, to the extent 

consistent with United States national 

security and foreign policy interests, 

and pursuant to revised paragraph (b) of 

§ 746.1, BIS will not approve 

applications to export or reexport items 

with a UN reason for control to 

countries subject to United Nations 

Security Council arms embargoes if 

such authorizations would be contrary 

to the relevant United Nations Security 

Council Resolutions. Paragraph (b)(4) 

provides that the availability of license 

exceptions to countries listed in 

§ 746.1(b)(2) is restricted to License 

Exception GOV § 740.11(b)(2)(i) and (ii). 

The rule also clarifies the UN embargo 

provisions for Iraq and North Korea 

under the EAR by including crossreferences to § 746.3 (Iraq) and § 746.4 

(North Korea). 

Export Administration Act 

Since August 21, 2001, the Export 

Administration Act of 1979, as 

amended, has been in lapse. However, 

the President has continued the EAR in 

effect under the International 

Emergency Economic Powers Act (50 

U.S.C. 1701 et seq.) through Executive 

Order 13222 of August 17, 2001 (3 CFR, 

2001 Comp. 783 (2002)), which has been 

extended by successive Presidential 

Notices, the most recent being that of 

August 12, 2011 (76 Fed. Reg. 50661 

(Aug. 16, 2011)). BIS continues to carry 

out the provisions of the Act, as 

appropriate and to the extent permitted 

by law, pursuant to Executive Order 

13222. 

This action is taken after consultation 

with the Secretary of State. BIS 

submitted a foreign policy report to the 

Congress indicating the imposition of 

new foreign policy controls on June 28, 

2012. 

Rulemaking Requirements 

1. Executive Orders 13563 and 12866 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. This rule 

has been determined to be not 

significant for purposes of Executive 

Order 12866. 

2. Notwithstanding any other 

provisions of law, no person is required 

to respond to nor be subject to a penalty 

for failure to comply with a collection 

of information, subject to the 

requirements of the Paperwork 

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

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

information displays a currently valid 

Office of Management and Budget 

(OMB) Control Number. This rule 

involves a collection of information 

subject to the PRA. This collection has 

been approved by the Office of 

Management and Budget under control 

number 0694–0088, ‘‘Multi-Purpose 

Application,’’ which carries a burden 

hour estimate of 58 minutes to prepare 

and submit form BIS–748. Total burden 

hours associated with the PRA and 

OMB control number 0694–0088 are not 

expected to increase as a result of this 

rule. 

3. This rule does not contain policies 

with Federalism implications as that 

term is defined under Executive Order 

13132. 

4. Pursuant to 5 U.S.C. 553(a)(1), the 

provisions of the Administrative 

Procedure Act requiring notice of 

proposed rulemaking, the opportunity 

for public participation, and a delay in 

effective date, are inapplicable because 

this regulation involves a military or 

foreign affairs function of the United 

States. (See 5 U.S.C. 553(a)(1)). This 

final rule implements U.S. multilateral 

commitments concerning United 

Nations Security Council arms 

embargoes. The sanctions against 

Rwanda were initially implemented in 

part to fulfill U.S. obligations to 

implement the United Nations Security 

Council’s arms embargo against 

Rwanda. Consistent with the United 

Nations Security Council’s actions 

lifting the arms embargo and U.S. 

obligations thereunder, BIS is removing 

the sanctions imposed against Rwanda 

under the EAR. In addition, in this rule, 

BIS amends the EAR to require a license 

to export or reexport certain items to 

countries subject to United Nations 

arms embargoes. To the extent 

consistent with United States national 

security and foreign policy interests, BIS 

will not approve such license 

applications if such authorizations 

would be contrary to relevant United 

Nations Security Council Resolutions. 

In light of United States commitments, 

BIS implements this approach pursuant 

to the existing licensing provisions and 

policies set out in Part 742 of the EAR 

and pursuant to revised § 746.1(b), 

which sets out countries subject to 

United Nations Security Council arms 

embargoes. No other law requires that a 

notice of proposed rulemaking and an 

opportunity for public comment be 

given for this rule. Because a notice of 

proposed rulemaking and an 

opportunity for public comment are not 

required to be given for this rule by 5 

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

analytical requirements of the 

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

et seq., are not applicable. Therefore, 

this regulation is issued in final form 

and is made effective immediately upon 

publication. 

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Federal Register / Vol. 77, No. 141 / Monday, July 23, 2012 / Rules and Regulations 42975 

List of Subjects 

15 CFR Part 732 

Administrative practice and 

procedure, Exports, Reporting and 

recordkeeping requirements. 

15 CFR Part 738 

Exports. 

15 CFR Parts 746 and 774 

Exports, Reporting and recordkeeping 

requirements. 

Accordingly, parts 732, 738, 746 and 

774 of the Export Administration 

Regulations (15 CFR parts 730–774) are 

amended as follows: 

PART 732—[AMENDED] 

■ 1. The authority citation for 15 CFR 

part 732 continues to read as follows: 

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

U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767, 

3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 

FR 44025, 3 CFR, 2001 Comp., p. 783; Notice 

of August 12, 2011, 76 Fed. Reg. 50661 (Aug. 

16, 2011). 

■ 2. Section 732.3 is amended 

■ a. By removing the phrase ‘‘and 

Rwanda’’ from paragraph (d)(4); and 

■ c. By revising paragraph (i) 

introductory text to read as follows: 

§ 732.3 Steps regarding the ten general 

prohibitions. 

* * * * * 

(i) Step 14: Embargoed countries and 

special destinations. If your destination 

for any item is Cuba, Iran, Iraq, North 

Korea, or Syria, you must consider the 

requirements of parts 742 and 746 of the 

EAR. Unless otherwise indicated, 

General Prohibition Six (Embargo) 

applies to all items subject to the EAR, 

i.e. both items on the CCL and within 

EAR99. See § 746.1(b) for destinations 

subject to limited sanctions under 

United Nations Security Council arms 

embargoes. You may not make an export 

or reexport contrary to the provisions of 

part 746 of the EAR without a license 

unless: 

* * * * * 

PART 738—[AMENDED] 

■ 3. The authority citation for 15 CFR 

Part 738 continues to read as follows: 

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

U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C. 

7430(e); 22 U.S.C. 287c; 22 U.S.C. 3201 et 

seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 

42 U.S.C. 2139a; 42 U.S.C. 6212; 43 U.S.C. 

1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22 

U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 

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

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

Comp., p. 783; Notice of August 12, 2011, 76 

Fed. Reg. 50661 (Aug. 16, 2011). 

■ 4. Supplement No. 1 to Part 738 is 

amended 

■ a. By removing the footnote 

designation ‘‘1’’ from the country 

‘‘Rwanda’’; 

■ b. By adding the footnote designation 

‘‘1’’ to ‘‘Cote d’Ivoire,’’ ‘‘Congo 

(Democratic Republic of),’’ ‘‘Eritrea,’’ 

‘‘Iran,’’ ‘‘Lebanon,’’ ‘‘Liberia,’’ ‘‘Libya,’’ 

‘‘Korea, North,’’ ‘‘Somalia,’’ and 

‘‘Sudan’’; and 

■ c. By revising footnote 1 to the 

Supplement to read as follows: 

Supplement No. 1 To Part 738 

[Reason for Control] 

* * * * * 1 See § 746.1(b) for United Nations Security 

Council Sanctions under the EAR. See 

§ 746.3 for United Nations Security Councilrelated license requirements for exports and 

reexports to Iraq or transfer within Iraq under 

the EAR, as well as regional stability 

licensing requirements not included in the 

Country Chart. 

* * * * * 

PART 746—[AMENDED] 

■ 5. The authority citation for 15 CFR 

Part 746 continues to read as follows: 

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

U.S.C. 1701 et seq.; 22 U.S.C. 287c; Sec 1503, 

Pub. L. 108–11, 117 Stat. 559; 22 U.S.C. 6004; 

22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 

12854, 58 FR 36587, 3 CFR, 1993 Comp., p. 

614; E.O. 12918, 59 FR 28205, 3 CFR, 1994 

Comp., p. 899; E.O. 13222, 3 CFR, 2001 

Comp., p. 783; Presidential Determination 

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

16, 2003; Presidential Determination 2007–7 

of December 7, 2006, 72 FR 1899 (January 16, 

2007); Notice of August 12, 2011, 76 FR 

50661 (August 16, 2011). 

■ 6. Revise § 746.1(b) to read as follows: 

§ 746.1 Introduction 

* * * * * 

(b) Sanctions on selected categories of 

items to specific destinations. (1) BIS 

controls the export and reexport of 

selected categories of items to countries 

under United Nations Security Council 

arms embargoes. See the Commerce 

Control List in Supplement No. 1 to Part 

774. See also §§ 746.3 (Iraq) and 746.4 

(North Korea). 

(2) The countries subject to United 

Nations Security Council arms 

embargoes are: Cote d’Ivoire (Ivory 

Coast), Democratic Republic of the 

Congo, Eritrea, Iran, Iraq, Lebanon, 

Liberia, Libya, North Korea, Somalia, 

and Sudan. 

(3) A license is required to export or 

reexport items identified in Part 774 as 

having a ‘‘UN’’ reason for control to 

countries identified in paragraph (b)(2) 

of this section. To the extent consistent 

with United States national security and 

foreign policy interests, BIS will not 

approve applications for such licenses if 

the authorization would be contrary to 

the relevant United Nations Security 

Council Resolution. 

(4) You may not use any License 

Exception to export items subject to UN 

arms embargo controls to countries 

listed in 746.1(b)(2), except License 

Exception GOV § 740.11(b)(2)(i) and (ii). 

* * * * * 

§ 746.8 [Removed and Reserved] 

■ 7. Remove and reserve § 746.8. 

PART 774—[AMENDED] 

■ 8. The authority citation for 15 CFR 

Part 774 continues to read as follows: 

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

U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C. 

7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et 

seq., 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 

42 U.S.C. 2139a; 42 U.S.C. 6212; 43 U.S.C. 

1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22 

U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 

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

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

Comp., p. 783; Notice of August 12, 2011, 76 

FR 50661 (August 16, 2011). 

■ 8. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

0—Nuclear Materials, Facilities, and 

Equipment [and Miscellaneous Items]— 

Export Control Classification Number 

(ECCN) 0A018 is amended: 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; 

■ b. By revising the ‘‘LVS’’ paragraph in 

the ‘‘License Exceptions’’ section; and 

■ c. By removing paragraph (1) from the 

‘‘Related Controls’’ paragraph in the 

‘‘List of Items Controlled’’ section. 

The revisions read as follows: 

Supplement No. 1 To Part 774—The 

Commerce Control List 

* * * * * 

0A018 Items on the Wassenaar Munitions 

List. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

License Exceptions 

LVS: $5,000 for 0A018.a 

$3,000 for 0A018.b 

$1,500 for 0A018.c and .d 

* * * * * 

List of Items Controlled 

Unit: * * * 

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42976 Federal Register / Vol. 77, No. 141 / Monday, July 23, 2012 / Rules and Regulations 

Related Controls: See 0A979, 0A988, and 

22 CFR 121.1 Categories I(a), III(b–d), and 

X(a). 

* * * * * 

■ 9. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

0—Nuclear Materials, Facilities, and 

Equipment [and Miscellaneous Items]— 

Export Control Classification Number 

(ECCN) 0A918 is amended: 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; and 

■ b. By revising the ‘‘LVS’’ paragraph in 

the ‘‘License Exceptions’’ section to read 

as follows: 

Supplement No. 1 To Part 774—The 

Commerce Control List 

* * * * * 

0A918 Miscellaneous Military Equipment 

Not on the Wassenaar Munitions List. 

License Requirements 

Reasons for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

License Exceptions 

LVS: $5,000 for 0A918.a 

$1,500 for 0A918.b 

* * * * * 

■ 10. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

0—Nuclear Materials, Facilities, and 

Equipment [and Miscellaneous Items]— 

Export Control Classification Number 

(ECCN) 0A919 is amended by removing 

the UN ‘‘Control(s)’’ paragraph from the 

License Requirements section. 

■ 11. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

0—Nuclear Materials, Facilities, and 

Equipment [and Miscellaneous Items]— 

Export Control Classification Number 

(ECCN) 0A984 is amended by revising 

the UN ‘‘Control(s)’’ paragraph in the 

License Requirements section to read as 

follows: 

0A984 Shotguns with barrel length 18 

inches (45.72 cm) or over; receivers; 

barrels of 18 inches (45.72 cm) or longer 

but not longer than 24 inches (60.96 cm); 

complete trigger mechanisms; 

magazines and magazine extension 

tubes; complete breech mechanisms; 

buckshot shotgun shells; except 

equipment used exclusively to treat or 

tranquilize animals, and except arms 

designed solely for signal, flare, or 

saluting use. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

* * * * * 

■ 12. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

0—Nuclear Materials, Facilities, and 

Equipment [and Miscellaneous Items]— 

Export Control Classification Number 

(ECCN) 0A985 is amended by revising 

the UN ‘‘Control(s)’’ paragraph in the 

‘‘License Requirements’’ section to read 

as follows: 

0A985 Discharge type arms and devices to 

administer electric shock for example, 

stun guns, shock batons, shock shields, 

electric cattle prods, immobilization 

guns and projectiles; except equipment 

used exclusively to treat or tranquilize 

animals, and except arms designed 

solely for signal, flare, or saluting use; 

and parts, n.e.s. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

* * * * * 

■ 13. In Supplement No. 1 to Part 774 

(the Commerce Control list), Category 

0—Nuclear Materials, Facilities, and 

Equipment [and Miscellaneous Items]— 

Export Control Classification Number 

(ECCN) 0A986 is amended by revising 

the UN ‘‘Control(s)’’ paragraph in the 

‘‘License Requirements’’ section to read 

as follows: 

0A986 Shotgun shells except buckshot 

shotgun shells, and parts. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

* * * * * 

■ 14. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 0 

Nuclear Materials, Facilities and 

Equipment [and Miscellaneous Items]— 

Export Control Classification Number 

(ECCN) 0A987 is amended by revising 

the UN ‘‘Control(s)’’ paragraph in the 

‘‘License Requirements’’ to read as 

follows: 

0A987 Optical sighting devices for firearms 

(including shotguns controlled by 

0A984); and parts (See list of items 

controlled). 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

* * * * * 

■ 15. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 0 

Nuclear Materials, Facilities and 

Equipment [and Miscellaneous Items]— 

Export Control Classification Number 

(ECCN) 0A988 is amended by revising 

the Heading and the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ to read as follows: 

0A988 Conventional military steel helmets 

as described by 0A018.d.1. 

License Requirements 

Reason for Control: * * * 

UN applies to entire 

entry. 

See § 746.1(b) for UN 

controls. 

* * * * * 

■ 16. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

0—Nuclear Materials, Facilities, and 

Equipment [and Miscellaneous Items]— 

Export Control Classification Number 

(ECCN) 0B986 is amended by revising 

the UN ‘‘Control(s)’’ paragraph in the 

‘‘License Requirements’’ section to read 

as follows: 

0B986 Equipment specially designed for 

manufacturing shotgun shells; and 

ammunition hand-loading equipment 

for both cartridges and shotgun shells. 

License Requirements 

Reason for Control: * * * 

Control(s) * * * 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

* * * * * 

■ 17. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

0—Nuclear Materials, Facilities, and 

Equipment [and Miscellaneous Items]— 

Export Control Classification Number 

(ECCN) 0E018 is amended: 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; and 

■ b. By revising the ‘‘TSR’’ paragraph in 

the ‘‘License Exceptions’’ section to read 

as follows: 

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Federal Register / Vol. 77, No. 141 / Monday, July 23, 2012 / Rules and Regulations 42977 

0E018 ‘‘Technology’’ for the 

‘‘Development,’’ ‘‘Production,’’ or ‘‘Use’’ 

of Items Controlled by 0A018.a Through 

0A018.c. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

* * * * * 

License Exceptions 

* * * * * 

TSR: Yes. 

* * * * * 

■ 18. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

0—Nuclear Materials, Facilities, and 

Equipment [and Miscellaneous Items]— 

Export Control Classification Number 

(ECCN) 0E918 is amended by revising 

the UN ‘‘Control(s)’’ paragraph in the 

‘‘License Requirements’’ section to read 

as follows: 

0E918 ‘‘Technology’’ for the 

’’Development,’’ ‘‘Production,’’ or ‘‘Use’’ 

of Bayonets. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

* * * * * 

■ 19. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

0—Nuclear Materials, Facilities, and 

Equipment [and Miscellaneous Items]— 

Export Control Classification Number 

(ECCN) 0E984 is amended by revising 

the UN ‘‘Control(s)’’ paragraph in the 

‘‘License Requirements’’ section to read 

as follows: 

0E984 ‘‘Technology’’ for the 

‘‘development’’ or ‘‘production’’ of 

shotguns controlled by 0A984 and 

buckshot shotgun shells. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

* * * * * 

■ 20. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

1—Special Materials and Related 

Equipment, Chemicals, ‘‘Micro 

Organisms,’’ and ‘‘Toxins’’—Export 

Control Classification Number (ECCN) 

1A005 is amended: 

■ a. By removing paragraph (3) of the 

‘‘Related Controls’’ section; and 

■ b. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section to read as 

follows: 

1A005 Body armor, and specially designed 

components therefor, not manufactured 

to military standards or specifications, 

nor to their equivalents in performance. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

*****

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

* * * * * 

■ 21. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

1—Special Materials and Related 

Equipment, Chemicals, ‘‘Micro 

Organisms,’’ and ‘‘Toxins’’—Export 

Control Classification Number (ECCN) 

1A008 is amended: 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; and 

■ b. By revising the ‘‘LVS’’ paragraph in 

the ‘‘License Exceptions’’ section to read 

as follows: 

1A008 Charges, devices and components, 

as follows (see List of Items Controlled). 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

License Exceptions 

LVS: $3000 for .a through .c; 

$6000 for .d. 

* * * * * 

■ 22. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 1 

Special Materials and Related 

Equipment, Chemicals, ‘‘Micro 

Organisms,’’ and ‘‘Toxins’’—Export 

Control Classification Number (ECCN) 

1B018 is amended: 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; and 

■ b. By revising the ‘‘LVS’’ paragraph in 

the ‘‘License Exceptions’’ section to read 

as follows: 

1B018 Equipment on the Wassenaar 

Arrangement Munitions List. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

*****

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

License Exceptions 

LVS: $3000 for 1B018.a for countries 

WITHOUT an ‘‘X’’ in RS Column 2 on the 

Country Chart contained in Supplement 

No. 1 to part 738 of the EAR; 

$5000 for 1B018.b. 

■ 23. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 1

Special Materials and Related 

Equipment, Chemicals, ‘‘Micro 

Organisms,’’ and ’’Toxins’’—Export 

Control Classification Number (ECCN) 

1C018 is amended: 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; and 

■ b. By revising the ‘‘LVS’’ paragraph in 

the ‘‘License Exceptions’’ section to read 

as follows: 

1C018 Commercial Charges and Devices 

Containing Energetic Materials on the 

Wassenaar Arrangement Munitions List 

and Certain Chemicals as Follows (see 

List of Items Controlled). 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

*****

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

License Exceptions 

LVS: $3000 

* * * * * 

■ 24. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

1—Special Materials and Related 

Equipment, Chemicals, ‘‘Micro 

Organisms,’’ and ‘‘Toxins’’—Export 

Control Classification Number (ECCN) 

1D018 is amended: 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; and 

■ b. By revising the ‘‘Related Controls’’ 

section to read as follows: 

1D018 ‘‘Software’’ specially designed or 

modified for the ‘‘development,’’ 

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42978 Federal Register / Vol. 77, No. 141 / Monday, July 23, 2012 / Rules and Regulations 

‘‘production,’’ or ‘‘use’’ of items 

controlled by 1B018. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

*****

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

* * * * * 

Related Controls: N/A 

* * * * * 

■ 25. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

2—Materials Processing—Export 

Control Classification Number (ECCN) 

2B018 is amended: 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; and 

■ b. By revising the ‘‘LVS’’ and ‘‘GBS’’ 

paragraphs in the ‘‘License Exceptions’’ 

section to read as follows: 

2B018 Equipment on the Wassenaar 

Arrangement Munitions List. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

License Exceptions 

LVS: $3000. 

GBS: Yes, as follows, except N/A for MTcontrolled items or destinations for which a 

license is required for RS reasons: Equipment 

used to determine the safety data of 

explosives as required by the International 

Convention on the Transport of Dangerous 

Goods (C.I.M.) Articles 3 and 4 in Annex 1 

RID, provided that such equipment will be 

used only by the railway authorities of 

current C.I.M. members, or by the 

Government-accredited testing facilities in 

those countries, for the testing of explosives 

to transport safety standards, of the following 

description: 

a. Equipment for determining the ignition 

and deflagration temperatures; 

b. Equipment for steel-shell tests; 

c. Drophammers not exceeding 20 kg in 

weight for determining the sensitivity of 

explosives to shock; 

d. Equipment for determining the friction 

sensitivity of explosives when exposed to 

charges not exceeding 36 kg in weight. 

* * * * * 

■ 26. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

2—Materials Processing—Export 

Control Classification Number (ECCN) 

2D018 is amended: 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; and 

■ b. By revising the ’’TSR’’ paragraph in 

the ‘‘License Exceptions’’ section to read 

as follows: 

2D018 ‘‘Software’’ for the ‘‘development,’’ 

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

controlled 2B018. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

UN applies to entire 

entry. 

See § 746.1(b) for UN 

controls. 

License Exceptions 

* * * * * 

TSR: Yes. 

* * * * * 

■ 27. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

2—Materials Processing—Export 

Control Classification Number (ECCN) 

2E018 is amended: 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; and 

■ b. By revising the ‘‘TSR’’ paragraph in 

the ‘‘License Exceptions’’ section to read 

as follows: 

2E018 ‘‘Technology’’ for the ‘‘use’’ of 

equipment controlled by 2B018. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry. 

See § 746.1(b) for UN 

controls. 

License Exceptions 

* * * * * 

TSR: Yes. 

* * * * * 

■ 28. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

5—Telecommunications and 

‘‘Information Security’’ (Part 1. 

Telecommunications) Export Control 

Classification Number (ECCN) 5A980 

(Devices primarily useful for the 

surreptitious interception of wire, oral, 

or electronic communications; and parts 

and accessories therefor) is amended by 

removing the second NOTE, which 

refers to Rwanda, in the ‘‘License 

Requirements’’ section. 

* * * * * 

■ 29. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

5—Telecommunications and 

‘‘Information Security’’ (Part I. 

Telecommunications) Export Control 

Classification Number (ECCN) 5D980 

(Other ‘‘Software,’’ as Follows (see List 

of Items Controlled) is amended by 

removing the second NOTE, which 

refers to Rwanda, in the ‘‘License 

Requirements’’ section. 

* * * * * 

■ 30. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

5—Telecommunications and 

‘‘Information Security’’ (Part I. 

Telecommunications)—Export Control 

Classification Number (ECCN) 5E980 

(‘‘Technology’’ primarily useful for the 

‘‘development,’’ ‘‘production,’’ or ‘‘use’’ 

of equipment controlled by 5A980) is 

amended by removing the NOTE, which 

refers to Rwanda, in the ‘‘License 

Requirements’’ section. 

* * * * * 

■ 31. In Supplement No. 1 to Part 774 

(the Commerce Control list), Category 6 

Sensors and Lasers—Export Control 

Classification Number (ECCN) 6A002 is 

amended by revising the UN 

‘‘Control(s)’’ paragraph in the ‘‘License 

Requirements’’ section to read as 

follows: 

6A002 Optical Sensors. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to 

6A002.a.1, a.2, a.3 

and c.

See § 746.1(b) for UN 

controls. 

* * * * * 

■ 32. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 6 

—Sensors and Lasers—Export Control 

Classification Number (ECCN) 6A003 is 

amended by revising the UN 

‘‘Control(s)’’ paragraph in the ‘‘License 

Requirements’’ section to read as 

follows: 

6A003 Cameras. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to items 

controlled in 

6A003.b.3 and b.4. 

See § 746.1(b) for UN 

controls. 

* * * * * 

■ 33. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

6—Sensors and Lasers—Export Control 

Classification Number (ECCN) 6E001 is 

amended: 

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Federal Register / Vol. 77, No. 141 / Monday, July 23, 2012 / Rules and Regulations 42979 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; and 

■ b. By removing paragraph ‘‘(5)’’ in the 

‘‘TSR’’ paragraph in the ‘‘License 

Exceptions’’ section to read as follows: 

6E001 ‘‘Technology’’ according to the 

general technology note for the 

‘‘development’’ of equipment, materials 

or ‘‘software’’ controlled by 6A (except 

6A991, 6A992, 6A994, 6A995, 6A996, 

6A997, or 6A998), 6B (except 6B995), 6C 

(except 6C992 or 6C994), or 6D (except 

6D991, 60992, or 6D993). 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to ‘‘technology’’ for equipment Controlled by 

6A002 or 6A003 for 

UN reasons.

See § 746.1(b) for UN 

controls. 

* * * * * 

License Exceptions 

CIV: * * * 

TSR: Yes, except for the following: 

(1) Items controlled for MT reasons; 

(2) ‘‘Technology’’ for commodities 

controlled by 6A002.e, 6A004.e, or 6A008.j.1; 

(3) ‘‘Technology’’ for ‘‘software’’ specially 

designed for ‘‘space qualified’’ ‘‘laser’’ radar 

or Light Detection and Ranging (LIDAR) 

equipment defined in 6A008.j.1 and 

controlled by 6D001 or 6D002; or 

(4) Exports or reexports to destinations 

outside of Austria, Belgium, Canada, 

Denmark, Finland, France, Germany, Greece, 

Ireland, Italy, Japan, Luxembourg, the 

Netherlands, Portugal, Spain, Sweden, or the 

United Kingdom of ‘‘technology’’ for the 

‘‘development’’ of the following: (a) Items 

controlled by 6A001.a.1.b, 6A001.a.1.e, 

6A001.a.2.a.1, 6A001.a.2.a.2, 6A001.a.2.a.3, 

6A001.a.2.a.5, 6A001.a.2.a.6, 6A001.a.2.b, 

6A001.a.2.d, 6A001.a.2.e., 6A002.a.1.a, 

6A002.a.1.b, 6A002.a.1.c, 6A002.a.2.a, 

6A002.a.2.b, 6A002.a.3, 6A002.b, 6A002.c, 

6A003.b.3, 6A003.b.4, 6A004.c, 6A004.d, 

6A006.a.2, 6A006.c.1, 6A006.d, 6A006.e, 

6A008.d, 6A008.h, 6A008.k, 6B008, 6D003.a; 

(b) Equipment controlled by 6A001.a.2.c or 

6A001.a.2.f when specially designed for real 

time applications; or (c) ‘‘Software’’ 

controlled by 6D001 and specially designed 

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

equipment controlled by 6B008, or 6D003.a. 

STA: * * * 

* * * * * 

■ 34. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

6—Sensors and Lasers—Export Control 

Classification Number (ECCN) 6E002 is 

amended: 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; and 

■ b. By removing paragraph ‘‘(4)’’ in the 

‘‘TSR’’ paragraph in the ‘‘License 

Exceptions’’ section to read as follows: 

6E002 ‘‘Technology’’ according to the 

general technology note for the 

‘‘production’’ of equipment or materials 

controlled by 6A (except 6A991, 6A992, 

6A994, 6A995, 6A996, 6A997 or 6A998) 

6B (except 6B995) or 6C (except 6C992 

or 6C994). 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to ‘‘technology’’ for equipment controlled by 

6A002 or 6A003 for 

UN reasons. 

See § 746.1(b) for UN 

controls. 

* * * * * 

License Exceptions 

CIV: * * * 

TSR: Yes, except for the following: 

(1) Items controlled for MT reasons; 

(2) ‘‘Technology’’ for commodities 

controlled by 6A002.e, 6A004.e, 6A008.j.1; or 

(3) Exports or reexports to destinations 

outside of Austria, Belgium, Canada, 

Denmark, Finland, France, Germany, Greece, 

Ireland, Italy, Japan, Luxembourg, the 

Netherlands, Portugal, Spain, Sweden, or the 

United Kingdom of ‘‘technology’’ for the 

‘‘production’’ of the following: (a) Items 

controlled by 6A001.a.1.b, 6A001.a.1.e, 

6A001.a.2.a.1, 6A001.a.2.a.2, 6A001.a.2.a.3, 

6A001.a.2.a.5, 6A001.a.2.a.6, 6A001.a.2.b, 

6A002.a.3, 6A002.b, 6A002.c, 6A003.b.3, 

6A003.b.4, 6A004.c, 6A004.d, 6A006.a.2, 

6A006.c.1, 6A006.d, 6A006.e, 6A008.d, 

6A008.h, 6A008.k, 6B008; and (b) Equipment 

controlled by 6A001.a.2.c and 6A001.a.2.f 

when specially designed for real time 

applications. 

STA: * * * 

* * * * * 

■ 35. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

8—Marine—Export Control 

Classification Number (ECCN) 8A018 is 

amended: 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; and 

■ b. By revising the ‘‘LVS’’ paragraph in 

the ‘‘License Exceptions’’ section to read 

as follows: 

8A018 Items on the Wassenaar 

Arrangement Munitions List. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

License Exceptions 

LVS: $5000. 

* * * * * 

■ 36. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

8—Marine—Export Control 

Classification Number (ECCN) 8A918 is 

amended: 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; and 

■ b. By revising the ‘‘LVS’’ paragraph in 

the ‘‘License Exceptions’’ section to read 

as follows: 

8A918 Marine Boilers. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry. 

See § 746.1(b) for UN 

controls. 

License Exceptions 

LVS: $5000. 

* * * * * 

■ 37. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

9—Propulsion Systems, Space Vehicles 

and Related Equipment—Export Control 

Classification Number (ECCN) 9A018 is 

amended: 

■ a. By revising the UN ‘‘Control(s)’’ 

paragraph in the ‘‘License 

Requirements’’ section; and 

■ b. By revising the ‘‘LVS’’ paragraph in 

the ‘‘License Exceptions’’ section to read 

as follows: 

9A018 Equipment on the Wassenaar 

Arrangement Munitions List. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry. 

See § 746.1(b) for UN 

controls. 

License Exceptions 

LVS: $1500 

* * * * * 

■ 38. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

9—Propulsion Systems, Space Vehicles 

and Related Equipment—Export Control 

Classification Number (ECCN) 9A991 is 

amended by revising the UN 

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42980 Federal Register / Vol. 77, No. 141 / Monday, July 23, 2012 / Rules and Regulations 

1See 15 U.S.C. 78c(a)(41). 

2See 15 U.S.C. 78c(a)(53)(A). 

‘‘Control(s)’’ paragraph in the ‘‘License 

Requirements’’ section to read as 

follows: 

9A991 ‘‘Aircraft,’’ n.e.s., and gas turbine 

engines not controlled by 9A001 or 

9A101 and parts and components, n.e.s. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to 

9A991.a.

See § 746.1(b) for UN 

controls. 

* * * * * 

■ 39. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

9—Propulsion Systems, Space Vehicles 

and Related Equipment—Export Control 

Classification Number (ECCN) 9D018 is 

amended by revising the UN 

‘‘Control(s)’’ paragraph in the ‘‘License 

Requirements’’ section to read as 

follows: 

9D018 ‘‘Software’’ for the ‘‘use’’ of 

equipment controlled by 9A018. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

* * * * * 

■ 40. In Supplement No. 1 to Part 774 

(the Commerce Control List), Category 

9—Propulsion Systems, Space Vehicles 

and Related Equipment—Export Control 

Classification Number (ECCN) 9E018 is 

amended by revising the UN 

‘‘Control(s)’’ paragraph in the ‘‘License 

Requirements’’ section to read as 

follows: 

9E018 ‘‘Technology’’ for the 

‘‘development,’’ ‘‘production,’’ or ‘‘use’’ 

of equipment controlled by 9A018. 

License Requirements 

Reason for Control: * * * 

Control(s) Country chart 

* * * * * 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls. 

* * * * * 

Dated: July 13, 2012. 

Kevin J. Wolf, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2012–17757 Filed 7–20–12; 8:45 am] 

BILLING CODE 3510–33–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Part 241 

[Release No. 34–67448; File No. S7–06–12] 

Commission Guidance Regarding 

Definitions of Mortgage Related 

Security and Small Business Related 

Security 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Interpretation; solicitation of 

comment. 

SUMMARY: The Securities and Exchange 

Commission (the ‘‘Commission’’) is 

publishing interpretive guidance with 

respect to sections 3(a)(41) (the 

definition of ‘‘mortgage related 

security’’) and 3(a)(53)(A) (the definition 

of ‘‘small business related security’’) of 

the Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’), in light of section 

939(e) of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act 

(the ‘‘Dodd-Frank Act’’). Section 939(e) 

strikes provisions in sections 3(a)(41) 

and 3(a)(53)(A) of the Exchange Act that 

reference credit ratings issued by 

nationally recognized statistical rating 

organizations (‘‘NRSROs’’), and inserts 

new text that provides that in order to 

satisfy these definitions a security must 

meet ‘‘standards of credit-worthiness as 

established by the Commission.’’ 

Because more time is needed to develop 

and establish standards of 

creditworthiness for purposes of these 

definitions, the Commission is 

providing a transitional interpretation 

that will be applicable on and after July 

20, 2012, and until such time as final 

Commission rules establishing new 

standards of creditworthiness become 

effective. The Commission also is 

seeking comment on potential standards 

of creditworthiness that could be 

established to replace the use of NRSRO 

credit ratings in the definitions of the 

terms ‘‘mortgage related security’’ and 

‘‘small business related security.’’ 

DATES: Effective Date: July 20, 2012. 

Comments: Comments should be 

received on or before August 22, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Michael A. Macchiaroli, Associate 

Director, at (202) 551–5525; Thomas K. 

McGowan, Deputy Associate Director, at 

(202) 551–5521; Randall W. Roy, 

Assistant Director, at (202) 551–5522; 

Mark M. Attar, Branch Chief, at (202) 

551–5889; Carrie A. O’Brien, Special 

Counsel, at (202) 551–5640; and Rachel 

B. Yura, Attorney-Adviser, at (202) 551– 

5729, Office of Financial Responsibility, 

Division of Trading and Markets, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–7010. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/interp.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number S7– 

06–12 on the subject line; or 

• Use the Federal eRulemaking Portal 

(http://www.regulations.gov). Follow the 

instructions for submitting comments. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number S7–06–12. This file number 

should be included on the subject line 

if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/interp.shtml). Comments also are 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. All comments 

received will be posted without change; 

we do not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make publicly available. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

Section 3(a)(41) of the Exchange Act 

defines the term ‘‘mortgage related 

security’’ as, among other things, a 

security that is rated in one of the two 

highest rating categories by at least one 

NRSRO.1 Section 3(a)(53)(A) of the 

Exchange Act defines the term ‘‘small 

business related security’’ as, among 

other things, a security that is rated in 

one of the four highest rating categories 

by at least one NRSRO.2 A ‘‘rating 

category’’ refers to a distinct level in an 

NRSRO’s rating scale represented by a 

unique symbol, number, or score. For 

example, a rating scale consisting of 

AAA, AA, A, BBB, BB, B, CCC, CC, C, 

and D has ten rating categories, with the 

AAA and AA categories being the two 

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