75044 Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Rules and Regulations 

Respondents are not required to respond 

to any collection of information unless 

it displays a current valid OMB control 

number. OPM is not proposing any 

additional collections in this rule. 

List of Subjects in 5 CFR Part 890 

Administrative practice and 

procedure; Government employees; 

Health facilities; Health insurance; 

Health professions; Hostages; Iraq; 

Kuwait; Lebanon; Military personnel; 

Reporting and recordkeeping 

requirements; Retirement. 

U.S. Office of Personnel Management. 

Kathleen Archuleta, 

Director. 

Accordingly, OPM is amending 5 CFR 

part 890 as follows: 

PART 890—FEDERAL EMPLOYEES 

HEALTH BENEFITS PROGRAM 

■ 1. The authority citation for part 890 

continues to read as follows: 

Authority: 5 U.S.C. 8913; Sec. 890.301 also 

issued under sec. 311 of Pub. L. 111–03, 123 

Stat. 64; Sec. 890.111 also issued under 

section 1622(b) of Pub. L. 104–106, 110 Stat. 

521; Sec. 890.112 also issued under section 

1 of Pub. L. 110–279, 122 Stat. 2604; 5 U.S.C. 

8913; Sec. 890.803 also issued under 50 

U.S.C. 403p, 22 U.S.C. 4069c and 4069c–1; 

subpart L also issued under sec. 599C of Pub. 

L. 101–513, 104 Stat. 2064, as amended; Sec. 

890.102 also issued under sections 11202(f), 

11232(e), 11246 (b) and (c) of Pub. L. 105– 

33, 111 Stat. 251; and section 721 of Pub. L. 

105–261, 112 Stat. 2061; Pub. L. 111–148, as 

amended by Pub. L. 111–152. 

Subpart G—[Removed and Reserved] 

■ 1. Remove and Reserve subpart G, 

consisting of §§ 890.701 and 890.702. 

[FR Doc. 2014–29554 Filed 12–16–14; 8:45 am] 

BILLING CODE 6325–63–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Parts 744 and 774 

[Docket No. 140813667–4667–01] 

RIN 0694–AG27 

Expansion of the Microprocessor 

Military End-Use and End-User Control 

AGENCY: Bureau of Industry and 

Security, Commerce. 

ACTION: Final rule. 

SUMMARY: The Bureau of Industry and 

Security (BIS) is amending the 

microprocessor military end-use and 

end-user control in the Export 

Administration Regulations by 

expanding the scope of microprocessors 

subject to the restriction to harmonize 

with technological advances to 

microprocessor chips and expand the 

scope to include related software and 

technology for the development and 

production of these chips. In addition, 

this rule adds a prohibition on the use 

of license exceptions (including License 

Exception ENC) and otherwise expands 

license requirements for exports, 

reexports, or transfers (in-country) of 

microprocessors subject to the military 

end-use and end-user restriction. This 

expansion is consistent with the foreign 

policy objectives of the United States of 

preventing U.S. exports that might 

contribute to destabilizing military 

capabilities against the United States 

and its citizens. The foreign policy 

report explaining the expansion was 

sent to Congress on December 1, 2014. 

This rule also expands the scope of 

controls to cover in-country transfers, in 

order to control in-country transfers to 

prohibited military end users or end 

uses. BIS is also making editorial and 

format revisions to this section to 

improve clarity. 

DATES: Effective date: This rule is 

effective December 17, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Sharron Cook, Office of Exporter 

Services, Bureau of Industry and 

Security, Department of Commerce, 

Phone: (202) 482–2440 or by email at 

Sharron.cook@bis.doc.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

On January 14, 2003 (68 FR 1796), the 

Bureau of Industry and Security (BIS) 

published a rule to implement the 

microprocessor military end-user and 

end-use control in § 744.17 of the Export 

Administration Regulations (EAR). That 

rule imposed an end-use and end-user 

based license requirement on the export 

of certain microprocessors to military 

end uses and end users in countries in 

Country Group D:1 (see Supplement No. 

1 to part 740 of the EAR). 

End-use and end-user based controls 

are in addition to any controls based on 

the technical parameters of the item. 

Thus, the end-use and end-user based 

license requirements set forth in 

§ 744.17 may apply to a transaction, 

even if the Commerce Country Chart 

indicates there are no license 

requirements, i.e., no ‘‘X’’ in the box. 

When controls set forth under more 

than one section of the EAR apply to a 

transaction, the license requirements for 

such a transaction will be determined 

based on the requirements of all 

applicable sections of the EAR, and 

license applications will be reviewed 

under all applicable licensing policies. 

To determine license requirements, 

one should follow the decision tree 

flowchart in Supplement No. 1 to part 

732. An ECCN may have multiple 

license requirements, e.g., CCL-based, 

end-use based, or end-user based. Also 

note that to use a license exception, 

each license requirement on an ECCN 

must be overcome. 

Revisions to § 744.17 ‘‘Restrictions on 

Certain Exports, Reexports and 

Transfers (in-country) of 

Microprocessors and Associated 

‘‘Software’’ and ‘‘Technology’’ for 

‘Military End Uses’ and to ‘Military End 

Users’’’ 

Since 744.17 was established, BIS’s 

administration of export controls has 

increasingly focused on end uses and 

end users. Consistent with this change, 

BIS is adding in-country transfer 

controls to this section of the EAR to 

incorporate restrictions that would 

apply even if a transaction is licensed 

for a particular destination. 

BIS is also expanding the scope of 

microprocessors requiring a license 

under § 744.17 by removing the specific 

ECCN (3A991.a.1) from the text, so that 

the prohibition applies to any 

microprocessor meeting the specified 

performance criteria, and associated 

‘‘software’’ and ‘‘technology.’’ As 

encryption and other ‘‘information 

security’’ functionality has become more 

commonplace in hardware, BIS has 

concluded that microprocessors 

classified under any ECCN in Category 

5—Part 2 of the EAR (including ECCN 

5A992.c for ‘mass market’ encryption 

chips and ECCN 5A002 for a variety of 

non-‘mass market’ microprocessors) 

warrant the same license requirement as 

BIS currently requires under § 744.17 

for the microprocessors classified 

outside of Category 5—Part 2, even if no 

license would be required (NLR) or 

License Exception ENC would 

otherwise be available. Because of this 

scope revision, the first sentence of 

paragraph (a) is revised to clarify that 

this license requirement is in addition 

to all license requirements set forth in 

the EAR and not just anti-terrorism 

reasons for control. Furthermore, BIS is 

expanding the scope of the license 

requirement in § 744.17 to include 

‘‘technology’’ and ‘‘software’’ for the 

‘‘development’’ and ‘‘production’’ of the 

microprocessors described in 

§ 744.17(a). 

In relation to § 744.17(f) 

‘‘Exceptions,’’ BIS is also moving, from 

paragraph (a) to paragraph (f), text that 

exempted from § 744.17 personnel and 

agencies of the U.S. Government or 

agencies of a cooperating government 

under License Exception GOV. In 


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Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Rules and Regulations 75045 

addition to harmonizing § 744.17(f) with 

recent changes in License Exception 

GOV, BIS is expanding paragraph (f) to 

include exports, reexports and transfers 

(in-country) ‘‘on behalf of’’ the U.S. 

Government or agencies of a cooperating 

government and updating and 

incorporating the related citation 

references. 

BIS is also fixing the use of double 

and single quotes around the terms in 

this section to increase clarity. Single 

quotes are used for terms that are 

defined in a section where it appears, 

whereas double quotes indicate a term 

defined in § 772.1 of the EAR. 

Revisions to the Supplement No. 1 to 

Part 774 ‘‘Commerce Control List’’ 

This rule adds a reference to the 

license requirements in § 744.17 in the 

affected ECCNs of the Commerce 

Control List. Specifically, ECCNs 

3A001, 3D002, 3D991, 3E001, 3E002, 

3E991, 5A002, 5A992, 5D002, 5D992, 

5E002 and 5E992 are amended by 

adding a License Requirement Note after 

the Control Table in the License 

Requirements section. This reference in 

the ECCN may help prevent exporters 

from missing this combination item/

end-use based license requirement. 

ECCN 3A991 already had a license 

requirement note pointing to the license 

requirements in § 744.17. This rule 

replaces the existing note with the same 

one being added to the other twelve 

ECCNs in 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 46957 (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. 

Savings Clause 

Shipments of items removed from 

license exception eligibility or eligibility 

for export, reexport, or transfer (incountry) without a license as a result of 

this regulatory action that were on dock 

for loading, on lighter, laden aboard a 

carrier, or en route aboard a carrier to 

a port, on December 17, 2014, pursuant 

to actual orders to a destination, may 

proceed to that destination under the 

previous license exception eligibility or 

without a license so long as they have 

been exported, reexported, or 

transferred (in-country) before February 

17, 2015. Any such items not actually 

exported, reexported, or transferred (incountry) before midnight, on February 

17, 2015, require a license in accordance 

with this regulation. 

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 

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 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)). If this rule were 

delayed to allow for notice and 

comment and a delay in effective date, 

these high performance 

microprocessors, as well as associated 

development and production 

technology and software would 

continue to be exported, reexported and 

transferred (in-country) to military end 

uses or military end users to the 

detriment of the national security or 

foreign policy interests of the United 

States. In addition, publishing a 

proposed rule would give notice of the 

U.S. Government’s intention to restrict 

the export, reexport and transfer of these 

items and would create an incentive to 

either accelerate exports, reexports and 

transfers of these items to conduct 

activities that are contrary to the 

national security or foreign policy 

interests of the United States, and/or to 

take steps to try to limit the impact of 

the this expanded control once a final 

rule was published. 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 Part 744 

Exports, Reporting and recordkeeping 

requirements, Terrorism. 

15 CFR Part 774 

Exports, Reporting and recordkeeping 

requirements. 

Accordingly, parts 744 and 774 of the 

Export Administration Regulations (15 

CFR parts 730–774) are amended as 

follows: 

PART 744—[AMENDED] 

■ 1. The authority citation for 15 CFR 

part 744 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. 3201 et seq.; 

42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 

U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 

1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 

3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 

FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 

12947, 60 FR 5079, 3 CFR, 1995 Comp., p. 

356; E.O. 13026, 61 FR 58767, 3 CFR, 1996 

Comp., p. 228; E.O. 13099, 63 FR 45167, 3 

CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 


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75046 Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Rules and Regulations 

44025, 3 CFR, 2001 Comp., p. 783; E.O. 

13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 

786; Notice of January 21, 2014, 79 FR 3721 

(January 22, 2014); Notice of August 7, 2014, 

79 FR 46959 (August 11, 2014); Notice of 

September 17, 2014, 79 FR 56475 (September 

19, 2014); Notice of November 7, 2014, 78 FR 

67035 (November 12, 2014). 

■ 2. Revise § 744.17 to read as follows: 

§ 744.17 Restrictions on certain exports, 

reexports and transfers (in-country) of 

microprocessors and associated 

‘‘software’’ and ‘‘technology’’ for ‘‘military 

end uses’’ and to ‘‘military end users.’’ 

(a) General prohibition. In addition to 

the license requirements set forth 

elsewhere in the EAR, you may not 

export, reexport or transfer (in-country) 

microprocessors (‘‘microprocessor 

microcircuits,’’ ‘‘microcomputer 

microcircuits,’’ and microcontroller 

microcircuits having a processing speed 

of 5 GFLOPS or more and an arithmetic 

logic unit with an access width of 32 bit 

or more, including those incorporating 

‘‘information security’’ functionality), or 

associated ‘‘software’’ and ‘‘technology’’ 

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

of such microprocessors without a 

license if, at the time of the export, 

reexport or transfer (in-country), you 

know, have reason to know, or are 

informed by BIS that the item will be or 

is intended to be used for a ‘military end 

use,’ as defined in paragraph (d) of this 

section, in a destination listed in 

Country Group D:1 (see Supplement No. 

1 to part 740 of the EAR); or by a 

‘military end user,’ as defined in 

paragraph (e) of this section, in a 

destination listed in Country Group D:1. 

(b) Additional prohibition on 

exporters or reexporters informed by 

BIS. BIS may inform an exporter, 

reexporter or transferor, either 

individually by specific notice or 

through amendment to the EAR, that a 

license is required for export, reexport 

or transfer (in-country) of items 

described in paragraph (a) of this 

section to specified end users, because 

BIS has determined that there is an 

unacceptable risk of diversion to the 

end uses or end users described in 

paragraph (a) of this section. Specific 

notice is to be given only by, or at the 

direction of, the Deputy Assistant 

Secretary for Export Administration. 

When such notice is provided orally, it 

will be followed by a written notice 

within two working days signed by the 

Deputy Assistant Secretary for Export 

Administration. The absence of any 

such notification does not excuse the 

exporter, reexporter or transferor from 

compliance with the license 

requirements of paragraph (a) of this 

section. 

(c) License review standards. There is 

a presumption of denial for applications 

to export, reexport or transfer (incountry) items subject to this section. 

(d) Military end-use. In this section, 

the phrase ‘military end use’ means 

incorporation into: a military item 

described on the U.S. Munitions List 

(USML) (22 CFR part 121, International 

Traffic in Arms Regulations) or the 

Wassenaar Arrangement Munitions List 

(as set out on the Wassenaar 

Arrangement Web site at http://

www.wassenaar.org); commodities 

classified under ECCNs ending in 

‘‘A018’’ or under ‘‘600 series’’ ECCNs; or 

any commodity that is designed for the 

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

deployment of military items described 

on the USML, the Wassenaar 

Arrangement Munitions List or 

classified under ECCNs ending in 

‘‘A018’’ or under ‘‘600 series’’ ECCNs. 

Supplement No. 1 of this part lists 

examples of ‘military end use.’ 

(e) Military end user. In this section, 

the term ‘military end user’ means the 

national armed services (army, navy, 

marine, air force, or coast guard), as well 

as the national guard and national 

police, government intelligence or 

reconnaissance organizations, or any 

person or entity whose actions or 

functions are intended to support 

‘military end uses’ as defined in 

paragraph (d) of this section. 

(f) Exceptions. The prohibitions 

described in paragraphs (a) and (b) of 

this section supersede any license 

exception or No License Required (NLR) 

designation that would otherwise apply 

to a transaction subject to the EAR, 

except that this license requirement 

does not apply to exports, reexports or 

transfers (in-country) of items for or on 

behalf of the official use by personnel 

and agencies of the U.S. Government or 

to agencies of a cooperating government 

authorized by License Exception GOV 

pursuant to § 740.11 of the EAR. See 

§ 740.11(b)(1) of the EAR for the 

definition of ‘agency of the U.S. 

Government’ and § 740.11(c)(1) for the 

definition of ‘agency of a cooperating 

government.’ 

PART 774—[AMENDED] 

■ 3. 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). 

Supplement No. 1 to Part 774— 

[Amended] 

■ 4. In Supplement No. 1 to part 774 

(the Commerce Control List), ECCNs 

3A001, 3D002, 3D991, 3E001, 3E002, 

3E991, 5A002, 5A992, 5D002, 5D992, 

5E002 and 5E992 are amended by 

adding a License Requirement Note after 

the Control Table in the License 

Requirements section to read as follows: 

Supplement No. 1 to Part 774— 

Commerce Control List 

* * * * * 

License Requirements 

* * * * * 

License Requirements Note: See 

§ 744.17 of the EAR for additional 

license requirements for 

microprocessors having a processing 

speed of 5 GFLOPS or more and an 

arithmetic logic unit with an access 

width of 32 bit or more, including those 

incorporating ‘‘information security’’ 

functionality, and associated ‘‘software’’ 

and ‘‘technology’’ for the ‘‘production’’ 

or ‘‘development’’ of such 

microprocessors. 

* * * * * 

■ 5. In Supplement No. 1 to part 774 

(the Commerce Control List), Category 3, 

ECCN 3A991 is amended by revising the 

License Requirements Notes to read as 

follows: 

3A991 Electronic Devices, and 

‘‘Components’’ Not Controlled by 

3A001. 

License Requirements 

* * * * * 

License Requirements Note: See 

§ 744.17 of the EAR for additional 

license requirements for 

microprocessors having a processing 

speed of 5 GFLOPS or more and an 

arithmetic logic unit with an access 

width of 32 bit or more, including those 

incorporating ‘‘information security’’ 

functionality, and associated ‘‘software’’ 

and ‘‘technology’’ for the ‘‘production’’ 

or ‘‘development’’ of such 

microprocessors. 

* * * * * 

Dated: December 11, 2014. 

Kevin J. Wolf, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2014–29450 Filed 12–16–14; 8:45 am] 

BILLING CODE 3510–33–P 


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