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[Federal Register Volume 80, Number 19 (Thursday, January 29, 2015)]
[Rules and Regulations]
[Pages 4776-4779]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-01638]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 738, 740, 746, and 772

[Docket No. 141218999-4999-01]
RIN 0694-AG43

Russian Sanctions: Licensing Policy for the Crimea Region of 
Ukraine

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: The Bureau of Industry and Security (BIS) issues this final 
rule to amend the Export Administration Regulations (EAR) to impose 
additional sanctions that implement U.S. policy toward Russia. 
Specifically, in this rule BIS amends the EAR by imposing a license 
requirement for the export and reexport to the Crimea region of 
Ukraine, and the transfer within the Crimea region of Ukraine, of all 
items subject to the EAR, other than food and medicine designated as 
EAR99. The rule establishes a presumption of denial for all such 
exports or reexports to the Crimea region of Ukraine and transfers 
within the Crimea region of Ukraine, except with respect to items 
authorized under the Department of the Treasury's Office of Foreign 
Assets Control (OFAC) General License No. 4, which BIS will review on a 
case-by-case basis. This action is consistent with the goals and 
objectives of Executive Order 13685 of December 19, 2014.

DATES: This rule is effective January 29, 2015.

FOR FURTHER INFORMATION CONTACT: Eileen Albanese, Director, Office of 
National Security and Technology Transfer Controls, Bureau of Industry 
and Security, Department of Commerce, Phone: (202) 482-0092, Fax: (202) 
482-482-3355, Email: rpd2@bis.doc.gov. For emails, include ``Russia'' 
in the subject line.

SUPPLEMENTARY INFORMATION: The Bureau of Industry and Security (BIS) 
issues this final rule to amend the Export Administration Regulations 
(EAR) to impose additional sanctions that implement U.S. policy toward 
Russia. Specifically, in this rule BIS amends the EAR by imposing a 
license requirement for the export and reexport to the Crimea region of 
Ukraine, and the transfer within the Crimea region of Ukraine, of all 
items subject to the EAR, other than food and medicine designated as 
EAR99. For purposes of this final rule, the term ``Crimea region of 
Ukraine'' includes the land territory in that region as well as any 
maritime area over which sovereignty, sovereign rights, or jurisdiction 
is claimed based on purported sovereignty over that land territory. The 
rule establishes a presumption of denial for all such exports and 
reexports to the Crimea region of Ukraine or transfers within the 
Crimea region of Ukraine, except with respect to items authorized under 
OFAC General License No. 4 which BIS will review on a case-by-case 
basis.

Licensing Requirements and Policy Consistent With Executive Order 
[Crimea E.O. 13685]

    BIS is imposing licensing requirements with respect to exports and 
reexports to the Crimea region of Ukraine and transfers within the 
Crimea region of Ukraine. BIS also is adopting a presumption of denial 
for the review of license applications for such transactions, with 
certain exceptions described below, consistent with the prohibitions 
described in Executive Order 13685 (79 FR 77357), Blocking Property of 
Certain Persons and Prohibiting Certain Transactions with Respect to 
the Crimea Region of Ukraine, issued by the President on December 19, 
2014. This Order took additional steps to address the national 
emergency declared in Executive Order 13660 of March 6, 2014 (as 
expanded by Executive Order 13661 of March 16, 2014 and Executive Order 
13662 of March 20, 2014), finding that the actions and policies of the 
Government of the Russian Federation with respect to Ukraine--including 
the deployment of Russian Federation military forces in the Crimea 
region of Ukraine--undermine democratic processes and institutions in 
Ukraine; threaten its peace, security, stability, sovereignty, and 
territorial integrity; and contribute to the misappropriation of its 
assets, and thereby constitute an unusual and extraordinary threat to 
the national security and foreign policy of the United States.
    Specifically, Executive Order 13685 blocks the property and 
interests in property of persons determined to meet the blocking 
criteria and prohibits specified transactions, including exports, 
reexports, sales or supply, directly or indirectly, from the United 
States, or by a United States person, of any goods, services or 
technology to the Crimea region of Ukraine. Under Section 10 of 
Executive Order 13685, all agencies of the United States Government are 
directed to take all appropriate measures within their authority to 
carry out the provisions of the Order.
    Consistent with the Executive Order's prohibitions, the Department 
of

[[Page 4777]]

Commerce imposes a license requirement for exports or reexports to the 
Crimea region of Ukraine, or transfers within the Crimea region of 
Ukraine, of all items subject to the EAR, other than food and medicine 
designated as EAR99. The rule establishes a presumption of denial for 
all such exports or reexports to the Crimea region of Ukraine and 
transfers within the Crimea region of Ukraine, except with respect to 
items not exempt from the license requirement but authorized under the 
Department of the Treasury's Office of Foreign Assets Control (OFAC) 
General License No. 4 (discussed in greater detail in the next 
paragraph) which BIS will review on a case-by-case basis. This license 
requirement implements an appropriate measure within the authority of 
BIS consistent with the provisions of Executive Order 13685. Certain 
license exceptions are available for exports or reexports to the Crimea 
region of Ukraine or transfers within the Crimea region of Ukraine.
    The Department of Commerce's new license requirement does not apply 
to exports and reexports to the Crimea region of Ukraine or to 
transfers within the Crimea region of Ukraine of food and medicine 
designated as EAR99. On December 19, 2014, in conjunction with the 
issuance of Executive Order 13685, OFAC issued General License No. 4, 
Authorizing the Exportation or Reexportation of Agricultural 
Commodities, Medicine, Medical Supplies, and Replacement Parts and on 
December 30, 2014, it issued General License No. 5, Authorizing Certain 
Activities Necessary to Wind Down Operations Involving the Crimea 
Region of Ukraine. See http://www.treasury.gov/resource-center/sanctions/Programs/Documents/ukraine_gl4.pdf and http://www.treasury.gov/resource-center/sanctions/Programs/Documents/ukraine_gl5.pdf.
    This final rule includes a savings clause as described below. If an 
export, reexport or transfer (in-country) does not qualify for the 
savings clause described below but falls within the scope of OFAC's 
General License No. 5, an applicant may note this fact in its BIS 
license application either under block 24 or in a separate attachment. 
BIS will consider this fact as part of the license review process.

Revisions to the Export Administration Regulations

    To implement the changes described above, this final rule adds a 
new Sec.  746.6 (Crimea region of Ukraine) to part 746 (Embargoes and 
Other Special Controls) of the EAR. The new Sec.  746.6 consists of 
three paragraphs. Paragraph (a) imposes a license requirement for 
exports and reexports to the Crimea region of Ukraine, and the transfer 
within the Crimea region of Ukraine, of all items subject to the EAR, 
other than food and medicine designated as EAR99. Paragraph (a) also 
includes a definition of the term `Crimea region of Ukraine,' which 
specifies that `Crimea region of Ukraine' includes the land territory 
in that region as well as any maritime area over which sovereignty, 
sovereign rights, or jurisdiction is claimed based on purported 
sovereignty over that land territory. Paragraph (b) of the new section 
specifies that the license review policy is a presumption of denial, 
except for items authorized under OFAC General License No. 4 which will 
be reviewed on a case-by-case basis. Paragraph (c) includes an 
exhaustive listing of the license exceptions that are available to 
overcome the license requirements in this new section. No license 
exceptions other than those license exceptions or paragraphs of license 
exceptions specified in paragraph (c), are available to overcome the 
license requirements of this new Sec.  746.6.
    The license requirements imposed under part 746 of the EAR are 
independent of the Commerce Control List (CCL)-based license 
requirements. However, this rule adds a new cross reference to Sec.  
746.6 by adding new footnote 8 to the Commerce Country Chart in 
Supplement No. 1 to part 738. This footnote 8 makes persons aware of 
the additional part 746 license requirements under Sec.  746.6 that 
apply for the `Crimea region of Ukraine.' The new footnote also 
includes the same definition of `Crimea region of Ukraine' that this 
rule adds to Sec.  746.6. When applying for a license to the Crimea 
region of Ukraine, applicants should select `Crimea region' in the drop 
down menu option under the country of Ukraine in the Simplified Network 
Application Processing System (SNAP-R).
    This final rule, as a conforming change to the addition of Sec.  
746.6 and the restrictions under paragraph (c), adds `Crimea region of 
Ukraine' to the general restriction on the use of license exceptions in 
Sec.  740.2 of the EAR for sanctioned countries by revising the 
parenthetical phrase ``(Cuba, Iran, North Korea, and Syria).'' This 
final rule adds `Crimea region of Ukraine' to this parenthetical phrase 
because the license requirements under Sec.  746.6 apply to all items 
subject to the EAR and the only license exceptions available to 
overcome the license requirement are those specified in Sec.  746.6.
    Lastly, this final rule revises the definition of ``food'' in Sec.  
772.1 to include a reference to `Crimea region of Ukraine' along with 
North Korea and Syria, the two countries that are referenced in the 
definition.

Foreign Policy Report

    The expansion of license requirements for exports, reexports or 
transfers within the Crimea region of Ukraine in this rule is the 
imposition of a foreign policy control. Section 6(f) of the Export 
Administration Act requires that a report be delivered to Congress 
before imposing such controls. The report was delivered to Congress on 
January 26, 2015.

Savings Clause

    Shipments of items removed from eligibility for a License Exception 
or export, or reexport without a license (NLR) as a result of this 
regulatory action that were on dock for loading, on lighter, laden 
aboard an exporting or reexporting carrier, or en route aboard a 
carrier to a port of export or reexport, on January 29, 2015, pursuant 
to actual orders for export or reexport to a foreign destination, may 
proceed to that destination under the previous eligibility for a 
License Exception or export or reexport without a license (NLR) so long 
as they are exported or reexported before February 1, 2015. Any such 
items not actually exported or reexported before midnight, on February 
1, 2015, require a license in accordance with this rule.

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.

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

[[Page 4778]]

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 significant for purposes of Executive Order 12866.
    2. Notwithstanding any other provision 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 regulation involves 
collections previously approved by OMB under control number 0694-0088, 
Simplified Network Application Processing System, which includes, among 
other things, license applications and carries a burden estimate of 
43.8 minutes for a manual or electronic submission. Total burden hours 
associated with the PRA and OMB control number 0694-0088 are not 
expected to significantly increase as a result of this rule. You may 
send comments regarding the collection of information associated with 
this rule, including suggestions for reducing the burden, to Jasmeet K. 
Seehra, Office of Management and Budget (OMB), by email to 
Jasmeet_K._Seehra@omb.eop.gov, or by fax to (202) 395-7285.
    3. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 13132.
    4. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring notice of proposed rulemaking, the opportunity for 
public comment 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)). BIS implements this rule to 
advance U.S. policy toward Russia and therefore promote U.S. national 
security or foreign policy objectives by immediately preventing items 
from being exported, reexported, or transferred within the Crimea 
region of Ukraine. Delay in publication and the rule's effective date 
to allow for notice and comment would frustrate those objectives. For 
example, prior to publication of this final rule, items controlled on 
the Commerce Control List for Chemical & Biological Weapons (CB2 and 
CB3) reasons that required a BIS license to be exported or reexported 
to Russia could have been exported to the Crimea region of Ukraine 
under the no license required (NLR) designation. BIS also imposes end 
use and end user controls under part 744 and part 746 of the EAR on 
certain exports and reexports to Russia. A delay in publishing this 
final rule to obtain public comments would create an incentive for 
persons to export CB2 and CB3 items to the Crimea region of Ukraine to 
circumvent license requirements for the export of such items to Russia 
and for persons to use the Crimea region of Ukraine to circumvent part 
744 and part 746 end use and end user license requirements that apply 
to Russia. Further, 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. Accordingly, 
no regulatory flexibility analysis is required and none has been 
prepared.

List of Subjects

15 CFR Parts 738 and 772

    Exports.

15 CFR Part 740

    Administrative practice and procedure, Exports, Reporting and 
recordkeeping requirements.

15 CFR Part 746

    Exports, Reporting and recordkeeping requirements.

    Accordingly, parts 738, 740, 746, and 772 of the Export 
Administration Regulations (15 CFR parts 730-774) are amended as 
follows:

PART 738--[AMENDED]

0
1. 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 7, 2014, 79 FR 46959 (August 11, 2014).

0
2. Supplement No. 1 to part 738 is amended by:
0
a. Adding footnote designation ``8'' to ``Ukraine''; and
0
b. Adding footnote 8.
    The addition reads as follows:

Supplement No. 1 to Part 738--Commerce Country Chart

* * * * *
    \8\ See Sec.  746.6 for additional license requirements for all 
items subject to the EAR, other than food and medicine designated as 
EAR99, for the Crimea region of Ukraine. The Crimea region of Ukraine 
includes the land territory in that region as well as any maritime area 
over which sovereignty, sovereign rights, or jurisdiction is claimed 
based on purported sovereignty over that land territory.

PART 740--[AMENDED]

0
3. The authority citation for 15 CFR part 740 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
22 U.S.C. 7201 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 7, 2014, 79 FR 46959 (August 11, 2014).

0
4. Section 740.2 is amended by revising paragraph (a)(6) to read as 
follows:

Sec.  740.2  Restrictions on all license exceptions.

    (a) * * *
    (6) The export or reexport is to a sanctioned destination (Cuba, 
Iran, North Korea, Syria, and Crimea region of Ukraine) or a license is 
required based on a limited sanction (Russia) unless a license 
exception or portion thereof is specifically listed in the license 
exceptions paragraph pertaining to a particular sanctioned country in 
part 746 of the EAR.
* * * * *

PART 746--[AMENDED]

0
5. 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.; 
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, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., p 168; 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 May 7, 2014, 79 FR 26589 (May 9, 
2014); Notice of August 7, 2014, 79 FR 46959 (August 11, 2014).

0
6. Add Sec.  746.6 to read as follows:

[[Page 4779]]

Sec.  746.6  Crimea region of Ukraine.

    (a) License requirements--(1) General prohibition. As authorized by 
Section 6 of the Export Administration Act of 1979, a license is 
required to export or reexport any item subject to the EAR, other than 
food and medicine designated as EAR99, to the Crimea region of Ukraine. 
The `Crimea region of Ukraine' includes the land territory in that 
region as well as any maritime area over which sovereignty, sovereign 
rights, or jurisdiction is claimed based on purported sovereignty over 
that land territory. This license requirement includes transfers within 
the Crimea region.
    (b) License review policy. Applications will be reviewed with a 
presumption of denial, except for items authorized under OFAC Ukraine-
Related General License No. 4 which will be reviewed on a case-by-case 
basis.
    (c) License exceptions. You may export, reexport or transfer (in-
country) without a license if your transaction meets all the applicable 
terms and conditions of any of the license exception paragraphs 
specified in this paragraph (c). To determine scope and eligibility 
requirements, you will need to refer to the sections or specific 
paragraphs of part 740 (License Exceptions). Read each license 
exception carefully, as the provisions available for countries subject 
to sanctions are generally narrow.
    (1) TMP for items for use by the news media as set forth in Sec.  
740.9(a)(9) of the EAR.
    (2) GOV for items for personal or official use by personnel and 
agencies of the U.S. Government, the International Atomic Energy Agency 
(IAEA), or the European Atomic Energy Community (Euratom) as set forth 
in Sec.  740.11(a) and (b)(2) of the EAR.
    (3) GFT for gift parcels and humanitarian donations as set forth in 
Sec.  740.12.
    (4) TSU for operation technology and software for lawfully exported 
commodities as set forth in Sec.  740.13(a) and sales technology as set 
forth in Sec.  740.13 (b) of the EAR.
    (5) BAG for exports of items by individuals leaving the United 
States as personal baggage as set forth in Sec.  740.14(a) through (d) 
of the EAR.
    (6) AVS for civil aircraft and vessels as set forth in Sec.  
740.15(a)(4) and (d) of the EAR.

PART 772--[AMENDED]

0
7. 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.; 
E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 
7, 2014, 79 FR 46959 (August 11, 2014).

0
8. Section 772.1 is amended by revising the definition for the term 
``Food'' to read as follows:

Sec.  772.1  Definitions of terms as used in the Export Administration 
Regulations (EAR).

* * * * *
    Food. Specific to exports and reexports to North Korea, Syria and 
Crimea region of Ukraine, food means items that are consumed by and 
provide nutrition to humans and animals, and seeds, with the exception 
of castor bean seeds, that germinate into items that will be consumed 
by and provide nutrition to humans and animals. (Food does not include 
alcoholic beverages.)
* * * * *

    Dated: January 23, 2015.
Eric L. Hirschhorn,
Under Secretary of Commerce for Industry and Security.
[FR Doc. 2015-01638 Filed 1-28-15; 8:45 am]
BILLING CODE 3510-33-P
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