```

[Federal Register Volume 79, Number 246 (Tuesday, December 23, 2014)]
[Rules and Regulations]
[Pages 76874-76878]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-29674]

-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 774

[Docket No. 141119982-4982-01]
RIN 0694-AG40

Clarification to Scope of Certain ``600 series'' Export Control 
Classification Numbers (ECCNs)

AGENCY: Bureau of Industry and Security, Department of Commerce.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule revises six Export Control Classification Numbers 
(ECCNs) to clarify that they do not control certain basic parts, 
components, accessories and attachments because those basic parts, 
components, accessories and attachments are controlled in a new ECCN 
created by a rule published on July 1, 2014 to be effective on December 
30, 2014. This rule also removes controls on certain monolithic 
microwave integrated circuit (MMIC) power amplifiers and discrete 
microwave transistors and related technology. These controls are no 
longer necessary because two other rules published after July 1, 2014, 
provide appropriate controls on those items. This rule also clarifies 
the application of ``specially designed'' to controls published on July 
1, 2014 that would apply to printed circuit boards, populated circuit 
card assemblies and multichip modules to reduce the possibility of 
confusion. Finally, this rule revises three of the amendatory 
instructions in the final rule published on July 1, to avoid negating 
changes to the Export Administration Regulations that became effective 
after that date.

DATES: This rule is effective December 30, 2014.

FOR FURTHER INFORMATION CONTACT: William Arvin, Regulatory Policy 
Division, Office of Exporter Services, Bureau of Industry and Security, 
william.arvin@bis.doc.gov, 202-482-2440.

SUPPLEMENTARY INFORMATION:

Background

Affirming Scope of Antiterrorism License Requirement in ECCN 3A611.y

    As part of the Administration's Export Control Reform Initiative, 
BIS has added to the Commerce Control List several ``600 series'' ECCNs 
to control items of a military nature that the President has determined 
no longer warrant control on the United State Munitions List. The ``600 
series'' ECCNs are identified by the numeral ``6'' as their third 
character. Many ``600 series'' ECCNs have a paragraph designated as 
paragraph .x that imposes license requirements on unspecified parts, 
components, accessories and attachments specially designed for a 
specified set of items, unless those parts, components, accessories or 
attachments are enumerated on the USML or specified in ECCNs listed in 
that .x paragraph. Many ``600 series'' ECCNs also have a paragraph 
designated as paragraph .y, which specifies items to which only the 
antiterrorism (AT) reason for control applies. Items covered by the .x 
paragraphs require a license for all destinations except Canada unless 
a license exception is available. Items covered by .y paragraphs 
require a license for only Cuba, Iran, North Korea, Sudan, Syria, the 
People's Republic of China, Russia, and Venezuela.
    In response to a proposed rule--Revisions to the Export 
Administration Regulations (EAR): Control of Military Electronic 
Equipment and Related Items the President Determines No Longer Warrant 
Control Under the United States Munitions List (77 FR 70945, November 
28, 2012)--one commenter expressed a belief that placing .y paragraphs 
in separate ECCNs would lead to inconsistent classifications; for 
example, in some ECCNs indicator lights appeared in the .y paragraph 
but not in other ECCNs. In response, BIS, inter alia, published a 
second proposed rule and solicited comments on three specific ideas for 
organizing the controls that had been set forth in the .y paragraphs 
(78 FR 45026, 45034, July 25, 2013). Those ideas were: (1) Creating 
separate ECCN-specific .y paragraphs; (2) creating a single list of 
``600 series'' items that would be subject only to the antiterrorism 
and China license requirements; and (3) establishing a classification 
request procedure whereby a ``600 series'' item could be designated as 
subject only to antiterrorism and China license requirements, but 
eliminate the .y listings from the regulations or remove all .y lists 
completely.
    After reviewing the comments on that proposal, BIS published a 
final rule (79

[[Page 76875]]

FR 37551, 37560, July 1, 2014) (hereinafter ``the Military Electronics 
Final Rule'') in which ECCN 3A611 contained a .y paragraph that imposes 
a license requirement to the eight destinations noted above (Cuba, 
Iran, North Korea, Sudan, Syria, the People's Republic of China, 
Russia, and Venezuela) for any of the 35 commodities listed therein, 
even in instances where the commodities are specially designed for 
something in a ``600 series'' ECCN other than 3A611. For example, a 
grounding strap that is specially designed for an ECCN 9A610 aircraft 
would be classified as ECCN 3A611.y and subject to the same license 
requirements as other .y items because grounding straps are specified 
in ECCN 3A611.y and are not specified in any paragraph of ECCN 9A610. 
BIS explained this policy in its response to Comment 26 set forth in 
the preamble of the Military Electronics Final Rule. That comment reads 
as follows:

One commenter stated that its connectors that currently are 
classified under USML Category XI(c) would transfer to 3A611.y.3. 
The commenter noted that the problem with the 3A611.y text is that 
it states that it is `for a commodity subject to control in this 
entry and not elsewhere specified in any ``600 series'' ECCN.' Thus, 
an electrical connector that is `specially designed' for military 
aircraft equipment currently under USML Category VIII, would be 
classified under ECCN 9A610.x.

    BIS' response stated:

In this final rule, ECCN 3A611.y applies to parts, components, 
accessories and attachments that are `specially designed' for a 
commodity subject to control in a `600 series' ECCN and not 
elsewhere specified in any `600 series' ECCN, and includes in its 
list of commodities electrical connectors. Thus, if the connectors 
in fact are moved from the USML to the CCL and are not `specified in 
another ``600 series'' ECCN,' they are controlled by ECCN 3A611.y.

See 79 FR at 37560 (emphasis added.)
    Nevertheless, since the Military Electronics Final Rule was 
published, BIS has received questions and comments indicating that, 
based on text in ECCN 9A610.x, some readers are confused about the 
scope of ECCN 3A611.y. ECCN 9A610.x reads as follows: ```Parts,' 
`components,' `accessories,' and `attachments' that are `specially 
designed' for a commodity subject to control in this ECCN or a defense 
article in USML Category VIII and not elsewhere specified on the USML 
or in ECCN 9A610.y.'' Readers noted that the text of paragraph .x 
explicitly excludes commodities specified in ECCN 9A610.y, but does not 
exclude commodities specified in ECCN 3A611.y. This omission led those 
readers to conclude incorrectly that, for example, a ground strap or 
electrical connector is controlled in ECCN 9A610.x (and subject to 
broad geographic license requirements that apply to .x paragraphs in 
the ``600 series'') if the item is specially designed for an aircraft 
that is controlled in ECCN 9A610 or on the USML. BIS does not construe 
the broad expression ```specially designed' for . . . and not elsewhere 
specified . . .'' found in ECCN 9A610.x, as specifying the parts, 
components, accessories and attachments to which ECCN 9A610.x applies. 
BIS also believes that properly applying the ``Order of Review'' 
procedure set forth in Supplement No. 4 to part 774 of the EAR to such 
transactions leads to the conclusion that commodities specified in ECCN 
3A611.y should be classified in that entry rather than in the broad and 
unspecific .x paragraphs. However, based on the questions it has 
received, BIS believes that clarification is desirable to reduce the 
possibility of confusion about the scope of ECCN 3A611.y.
    Accordingly, this rule revises ECCN 9A610 so that its .x paragraph 
will specifically exclude commodities specified in ECCN 3A611.y. This 
rule makes those same change to ECCNs 0A606, 1A613, 8A609, 8A620 and 
9A619, which have .x paragraphs similar to those in ECCN 9A610. This 
rule also makes non-substantive changes to the .x paragraphs in those 
ECCNs to add clarity through parallel construction.

Removing Unnecessary Text From ECCNs 3A611 and 3E611

    The Military Electronics Final Rule, which becomes effective 
December 30, 2014, added ECCN 3A611 to control, among other things, 
certain monolithic microwave integrated circuit (MMIC) power amplifiers 
(3A611.c) and discrete microwave transistors (3A611.d) based on 
performance parameters that distinguished them from the MMIC power 
amplifiers and discrete microwave transistors that are controlled under 
ECCN 3A001.b.2 and .b.3, respectively. This rule would remove and 
reserve paragraphs .c and .d. because BIS published two other rules, 
discussed below, imposing license requirements on these devices under 
ECCN 3A001 since publication of the Military Electronics Final Rule. As 
a result, the devices' inclusion in ECCN 3A611 is unnecessary.
    The first rule, entitled ``Wassenaar Arrangement 2013 Plenary 
Agreements Implementation: Commerce Control List, Definitions, and 
Reports; and Extension of Fly-by-Wire Technology and Software 
Controls'' (79 FR 45288, August 4, 2014), expanded the frequency ranges 
covered by ECCN 3A001.b.2 and .b.3 to match ECCN 3A611.c and .d. The 
second rule, entitled ``Revision to the Export Administration 
Regulations: Controls on Electronic Commodities; Exports and Reexports 
to Hong Kong,'' which is being published simultaneously with this rule, 
imposed license requirements on MMIC power amplifiers and discrete 
microwave transistors specified in ECCN 3A001 for all destinations 
except Canada unless the amplifier or transistor is being exported or 
reexported for civil telecommunications use. That rule also reduced the 
availability of license exceptions. Those actions will allow the U.S. 
Government to examine in advance the exports and reexports of MMIC 
power amplifiers and discrete microwave transistors that pose the 
greatest risk of diversion or enhancement of potential adversaries' 
military capabilities without imposing unnecessary licensing 
requirements on low risk transactions. With these changes, the 
inclusion of MMIC power amplifier and discrete microwave transistors in 
a ``600 series'' ECCN is unnecessary.
    In addition, this rule removes references to MMIC power amplifiers 
and discrete microwave transistors from ECCN 3E611 because, upon 
publication of this rule, MMIC power amplifiers and discrete microwave 
transistors will not be controlled in ECCN 3A611, and it is not 
necessary to control technology for their development or production in 
ECCN 3E611. Such technology will be controlled in ECCN 3E001 and will 
require a license to all destinations other than Canada.

Clarifying Application of the Definition of ``Specially Designed'' to 
Printed Circuit Boards, Populated Circuit Card Assemblies and Multichip 
Modules

    ECCN 3A611, as described in the Military Electronics Final Rule, 
includes printed circuit boards and populated circuit card assemblies 
for which the layouts are specially designed for ``600 series'' items. 
ECCN 3A611 also includes multichip modules for which the pattern or 
layout is specially designed for ``600 series'' items. Since the 
Military Electronics Final Rule was published, BIS has received 
questions regarding how to apply the specially designed definition to 
printed circuit boards, populated circuit card assemblies, and 
multichip modules. Specifically, BIS has been asked how to apply ECCN 
3A611, which ties the definition of ``specially designed'' to

[[Page 76876]]

one characteristic of printed circuit boards and populated circuit card 
assemblies (i.e., the layout) and two characteristics of multichip 
modules (i.e., the pattern or layout), given that the definition of 
``specially designed'' appears to require evaluation of a part, 
component, accessory or attachment as a whole. In specifying ``layout'' 
and ``pattern,'' BIS intended that only those characteristics of a 
printed circuit board, populated circuit card assembly or multichip 
module need be evaluated to determine whether those items are specially 
designed for purpose of applying the specially designed definition. The 
questions BIS has received since the publication of the Military 
Electronics Final Rule indicate that clarification of this point is 
needed to prevent confusion. Therefore, this rule adds a note to ECCN 
3A611 explicitly stating that, when evaluating printed circuit boards 
and populated circuit card assemblies, the layout of the board or 
assembly is the only characteristic that need be evaluated for purposes 
of specially designed. Similarly, when evaluating multichip modules, 
the pattern and layout of the module are the only characteristics that 
need be evaluated under the specially designed definition.

Revisions To Prevent Negation of EAR Amendments That Became Effective 
After July 1, 2014

    This rule revises three amendatory instructions that appeared in 
the Military Electronics Final Rule. Without these revised 
instructions, on its effective date of December 30, the Military 
Electronics Final Rule would negate EAR provisions that became 
effective after that rule's July 1, 2014 publication.
    First, this rule revises the amendatory instruction for Related 
Controls paragraph of ECCN 3A001. That instruction, made in the 
Military Electronics Final Rule at 79 FR 37569, must be revised to 
avoid negating the additions to that paragraph made effective on 
November 10, 2014 by the rule ``Revisions to the Export Administration 
Regulations (EAR): Control of Spacecraft Systems and Related Items the 
President Determines No Longer Warrant Control Under the United States 
Munitions List (USML)'' (79 FR 27418, 27438, May 13, 2014). 
Specifically, this rule adds references in the Related Controls 
paragraph of ECCN 3A001 to: Category XV of the USML for certain space 
qualified electronics; Category XI for certain application specific 
integrated circuits that are subject to the ITAR; and ECCNs 3A101, 
3A201, 3A611, 3A991 and 9A515.
    Secondly, this rule revises the amendatory instruction for the 
License Requirements section of ECCN 4A003 that appeared in the 
Military Electronics Final Rule at 79 FR 37573 to avoid negating 
changes to that section that the rule ``Wassenaar Arrangement 2013 
Plenary Agreements Implementation: Commerce Control List, Definitions, 
and Reports; and Extension of Fly-by-Wire Technology and Software 
Controls'' (79 FR 45288, August 4, 2014) made effective on August 30, 
2104. Specifically, this rule replaces the term ``3.0 Weighted 
TeraFLOPS'' with the term ``8.0 Weighted TeraFLOPs,'' replaces the term 
``Note 1'' with the term ``Note'' and removes Note 2.
    Lastly, this rule revises the amendatory instruction for the 
Related Controls paragraph of ECCN 5A001 that appeared in the Military 
Electronics Final Rule at 79 FR 37573 to conform to the changes made 
effective on November 10, 2014 to that paragraph by the rule 
``Revisions to the Export Administration Regulations (EAR): Control of 
Spacecraft Systems and Related Items the President Determines No Longer 
Warrant Control Under the United States Munitions List (USML)'' (79 FR 
27438, May 13, 2014). Specifically, this rule removes text concerning 
telecommunication equipment used in satellites from Related Control 
Note 1.

Export Administration Act

    Although the Export Administration Act expired on August 20, 2001, 
the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 
2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March 
8, 2013, 78 FR 16129 (March 13, 2013) and as extended by the Notice of 
August 7, 2014, 79 FR 46959 (August 11, 2014), has continued the Export 
Administration Regulations in effect under the International Emergency 
Economic Powers Act. BIS continues to carry out the provisions of the 
Export Administration Act, as appropriate and to the extent permitted 
by law, pursuant to Executive Order 13222 as amended by Executive Order 
13637.

Regulatory Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distribute impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. Executive Orders 13563 and 12866 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distribute impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been determined not to be significant for 
purposes of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with a collection of information, subject to the 
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.) (PRA), unless that collection of information displays a currently 
valid OMB control number. This regulation relates to a collection 
approved by OMB under control number 0694-0088 Simplified Network 
Application Processing System (SNAP) and the Multipurpose Export 
License Application, which carries a current annual burden estimate of 
31,833 hours. BIS believes that this rule will not materially change 
the burden imposed by this collection.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under E.O. 13132.
    4. The Department of Commerce finds that there is good cause under 
5 U.S.C. 553(b)(B) to waive the provisions of the Administrative 
Procedure Act otherwise requiring prior notice and the opportunity for 
public comment because it is unnecessary and contrary to the public 
interest. This rule adds text to six ECCNs alerting readers to a change 
related to those ECCNs that will be implemented in a final rule 
published on July 1, 2014 that will become effective on December 30, 
2014. The change itself was included in a final rule for which two 
proposed rules solicited public comment. This rule also removes text 
from two ECCNs created by that same final rule because, in accordance 
with two recently published rules, the items covered by those ECCNs 
will be controlled elsewhere in the EAR. Retaining the paragraphs would 
result in inconsistent license requirements. This rule also adds a note 
to one ECCN clarifying how the specially designed definition applies to 
printed circuit boards, populated circuit card assemblies, and 
multichip modules

[[Page 76877]]

license requirements. This change is being made in response to 
questions from the public seeking clarifications. By making these 
changes, BIS is decreasing the likelihood of continued public confusion 
on the issue. Finally, this rule revises three amendatory instructions 
in a rule that was published on July 1, 2014 and that will become 
effective on December 30, to avoid negating provisions of the EAR that 
became effective after July 1, 2014. These three revised instructions 
merely preserve existing regulatory text without making substantive 
changes to the July 1, 2014 rule.
    The Department of Commerce finds that there is good cause under 5 
U.S.C. 553(d)(3) to waive the 30-day delay in effectiveness because the 
changes made by this would promote clarity in the regulations. The 
changes made by this rule would remove obsolete text, incorporate 
language to clarify certain provisions, and to implement housekeeping 
changes to prevent negating provisions of the EAR that became effective 
after July 1, 2014.
    Because neither the Administrative Procedure Act nor any other law 
requires that notice of proposed rulemaking and an opportunity for 
public comment be given for this rule, the analytical requirements of 
the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not 
applicable.

List of Subjects in 15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

    Accordingly, part 774 of the Export Administration Regulations (15 
CFR parts 730-774) is amended as follows:

PART 774--[AMENDED]

0
1. The authority citation for 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 7, 2014, 79 FR 46959 (August 11, 2014).

0
2. In Supplement No. 1 to part 774, Category 0, ECCN 0A606, ``List of 
Items Controlled Section,'' the ``Items'' paragraph is amended by 
revising paragraph x. to read as follows:

Supplement No. 1 to Part 774--The Commerce Control List

* * * * *
0A606 Ground vehicles and related commodities, as follows (see List 
of Items Controlled).
* * * * *

List of Items Controlled

* * * * *
Items: * * *
    x. ``Parts,'' ``components,'' ``accessories,'' and 
``attachments'' that are ``specially designed'' for a commodity 
enumerated or otherwise described in ECCN 0A606 (except for 0A606.b 
or 0A606.y) or a defense article enumerated or otherwise described 
in USML Category VII and not elsewhere specified on the USML, in 
0A606.y or 3A611.y.
* * * * *

0
3. In Supplement No. 1 to part 774, Category 1, ECCN 1A613, ``List of 
Items Controlled Section,'' the ``Items'' paragraph is amended by 
revising paragraph x. to read as follows:

1A613 Armored and protective ``equipment'' and related commodities, 
as follows (see List of Items Controlled).
* * * * *

List of Items Controlled

* * * * *
Items: * * *
    x. ``Parts,'' ``components,'' ``accessories,'' and 
``attachments'' that are ``specially designed'' for a commodity 
enumerated or otherwise described in ECCN 1A613 (except for 1A613.y) 
or a defense article enumerated or otherwise described in USML 
Category X, and not elsewhere specified on the USML or in 3A611.y.
* * * * *

0
4. In supplement No. 1 to part 774, revise the Related Controls in the 
``List of Items Controlled'' section of ECCN 3A001 to read as follows:

3A001 Electronic components and ``specially designed'' 
``components'' therefor, as follows (see List of Items Controlled).
* * * * *

List of Items Controlled

Related Controls: (1) See Category XV of the USML for certain 
``space-qualified'' electronics and Category XI of the USML for 
certain ASICs ``subject to the ITAR'' (see 22 CFR parts 120 through 
130). (2) See also 3A101, 3A201, 3A611, 3A991, and 9A515.
* * * * *

0
5. In Supplement No. 1 to part 774, Category 3, ECCN 3A611 is amended 
by:
0
a. Removing and reserving paragraphs c. and d. from the ``Items'' 
paragraph in the ``List of Items Controlled'' section.
0
b. Adding at the end of the entry a note.
    The addition to read as follows:

3A611 Military electronics, as follows (see List of Items 
Controlled).
* * * * *

    Note to ECCN 3A611: When applying the ``specially designed'' 
definition to determine whether a printed circuit board, populated 
circuit card assembly or multichip module is controlled by paragraph 
.g, .h, .y.15 or .y.16 of this entry, the layout of the board or 
assembly and the pattern and layout of the module are the only 
characteristics that need be evaluated under the ``specially 
designed'' definition.

0
6. In Supplement No. 1 to part 774, Category 3, ECCN 3E611, ``List of 
Items Controlled Section,'' the ``Items'' paragraph is amended by 
removing paragraphs b.3. and b.4.

0
7. In supplement No. 1 to part 774, amend ECCN 4A003 by revising the 
``License Requirements'' section to read as follows:

4A003 ``Digital computers'', ``electronic assemblies'', and related 
equipment therefor, as follows (see List of Items Controlled) and 
``specially designed'' ``components'' therefor.

License Requirements

Reason for Control: NS, MT, CC, AT

 
                                            Country chart (See Supp. No.
                Control(s)                         1 to part 738)
 
NS applies to 4A003.b and .c..............  NS Column 1
NS applies to 4A003.e and .g..............  NS Column 2
MT applies to 4A003.e when the parameters   MT Column 1
 in 3A101.a.2.b are met or exceeded.
CC applies to ``digital computers'' for     CC Column 1
 computerized finger-print equipment.
AT applies to entire entry (refer to 4A994  AT Column 1
 for controls on ``digital computers''
 with a APP >0.0128 but pre>
```