This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

36409 

Vol. 77, No. 118 

Tuesday, June 19, 2012 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Parts 772 and 774 

[Docket No. 120403245–1034–01] 

RIN 0694–AF66 

‘‘Specially Designed’’ Definition 

AGENCY: Bureau of Industry and 

Security, Commerce. 

ACTION: Proposed rule. 

SUMMARY: As part of the President’s 

Export Control Reform (ECR) Initiative, 

this proposed rule, and a separate 

proposed rule from the Department of 

State, Directorate of Defense Trade 

Controls, being published in 

conjunction with this document, sets 

forth, as much as possible, a common 

definition of the term ‘‘specially 

designed’’ for use in the Export 

Administration Regulations (EAR) and 

the International Traffic in Arms 

Regulations (ITAR). The term ‘‘specially 

designed’’ is used widely in the 

Commerce Control List (CCL) and 

would play an important role in the 

‘‘600 series’’ that the Bureau of Industry 

and Security (BIS) has proposed to 

create to control less sensitive defense 

articles transferred from the United 

States Munitions List (USML) to the 

Commerce Control List (CCL). The 

revisions in this rule are part of 

Commerce’s retrospective plan under 

EO 13563 completed in August 2011. 

Commerce’s full plan can be accessed 

at: http://open.commerce.gov/news/ 

2011/08/23/commerce-planretrospective-analysis-existing-rules. 

DATES: Comments must be received by 

BIS no later than August 3, 2012. 

ADDRESSES: Comments on this rule may 

be submitted to the Federal rulemaking 

portal (www.regulations.gov). The 

regulations.gov ID for this rule is: BIS– 

2012–0021. Comments may also be 

submitted via email to 

publiccomments@bis.doc.gov or on 

paper to Regulatory Policy Division, 

Bureau of Industry and Security, Room 

2099B, U.S. Department of Commerce, 

14th St. and Pennsylvania Ave. NW., 

Washington, DC 20230. Please refer to 

RIN 0694–AF66 in all comments and in 

the subject line of email comments. All 

comments must be in writing. All 

comments (including any personal 

identifiable information) will be 

available for public inspection and 

copying. Those wishing to comment 

anonymously may do so by submitting 

their comment via regulations.gov and 

leaving the fields for identifying 

information blank. 

FOR FURTHER INFORMATION CONTACT: 

Timothy Mooney, Regulatory Policy 

Division, Bureau of Industry and 

Security, Department of Commerce, 

Phone: (202) 482–2440, Fax: (202) 482– 

3355, Email: 

timothy.mooney@bis.doc.gov. 

SUPPLEMENTARY INFORMATION: The 

revisions in this proposed rule are part 

of Commerce’s retrospective plan under 

EO 13563 completed in August 2011. 

Elsewhere in this issue of the Federal 

Register, BIS publishes an advanced 

notice of proposed rulemaking, 

Feasibility of Enumerating ‘‘Specially 

Designed’’ Components, requesting 

comments on the feasibility of 

positively identifying ‘‘specially 

designed’’ components on the CCL. That 

proposal is a part of a longer term 

project the U.S. Government intends to 

undertake with the multilateral export 

control regimes. 

Background 

On July 15, 2011, BIS proposed a 

single definition of the term ‘‘specially 

designed’’ as it would be used in the 

proposed ‘‘600 series’’ and the rest of 

the Commerce Control List (CCL) (the 

‘‘July 15 proposed rule’’) (76 FR 41958). 

This action would revise that proposed 

definition. Additionally, the State 

Department is concurrently publishing a 

proposed rule to create, to the extent 

possible, a common definition of 

‘‘specially designed’’ in the 

International Traffic in Arms 

Regulations (ITAR). After reviewing 

comments received in response to both 

proposed rules, the Departments of 

Commerce and State plan to publish 

final rules amending the Export 

Administration Regulations (EAR) and 

ITAR so that they have, to the extent 

possible, common definitions of the 

term. The revisions in this rule are part 

of Commerce’s retrospective plan under 

EO 13563 completed in August 2011. 

Commerce’s full plan can be accessed 

at: http://open.commerce.gov/news/ 

2011/08/23/commerce-planretrospective-analysis-existing-rules. 

All references to the United States 

Munitions List (USML) in this rule are 

to the list of defense articles that are 

controlled for purposes of export 

pursuant to the ITAR, 22 CFR Parts 120 

et seq., and not to the list of defense 

articles on the United States Munitions 

Import List (USMIL) controlled by the 

Bureau of Alcohol, Tobacco, Firearms 

and Explosives (ATF) for purposes of 

import, under its regulations at 27 CFR 

Part 447. Pursuant to section 38(a)(1) of 

the Arms Export Control Act (AECA), all 

defense articles controlled for export or 

import are part of the USML under the 

AECA, but, for the sake of clarity, the 

list of defense articles controlled by 

ATF for purposes of import are on the 

USMIL. The transfer of defense articles 

from the ITAR’s USML to the EAR’s 

CCL for purposes of export controls 

does not affect the list of defense articles 

controlled on the USMIL under the 

AECA for purposes of import controls. 

A common definition of the term 

‘‘specially designed’’ that is as clear and 

objective as possible is vital to the 

Administration’s ECR Initiative. Many 

of the controls in the CCL use the term. 

Most of the new ‘‘600 series’’ ECCNs 

that have been proposed to control 

items the President determines no 

longer warrant control under the ITAR 

pursuant to AECA section 38(f) use the 

term. Several of the USML categories 

the State Department proposes to revise 

use the term as well. 

The State Department has decided to 

revise the USML to make it more 

‘‘positive.’’ A ‘‘positive’’ list uses more 

objective parameters to describe the 

items controlled. As described in the 

ANPR referenced in the summary of this 

rule, BIS plans to continue the process 

of revising the CCL so that it is more 

‘‘positive’’ as well. 

BIS cannot, however, immediately 

remove all references to the term in the 

CCL and replace them with lists of 

specific items that warrant control 

because the lists of items controlled by 

the multilateral export control regimes 

rely on the term extensively. Most of the 

CCL is based on and implements these 

regime lists. Moreover, BIS has not 

developed lists of which specific items 

would be ‘‘specially designed.’’ Such an 


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effort would take many years to 

complete and would require BIS to 

prepare and submit proposals to the 

regimes and then receive approval of 

those proposals to change the relevant 

control text. 

In addition, the new ‘‘600 series’’ 

ECCNs that have been proposed to 

control items that the President 

determines no longer warrant control on 

the USML must use a catch-all 

‘‘specially designed’’ term to avoid 

inadvertently de-controlling items other 

than common, single unassembled parts 

that are now ITAR-controlled as 

‘‘specifically designed, modified or 

configured’’ for a military application. 

As the State Department has described 

in its previous ANPR and proposed 

rules, much of the ITAR now relies 

upon catch-all controls. For example, 

the control for military electronic 

components, parts, components, 

accessories, and associated equipment is 

in USML Category XI(c), which controls 

‘‘[c]omponents, parts, accessories, 

attachments, and associated equipment 

specifically designed or modified for 

use with equipment in paragraphs (a) 

and (b) of this category, except for such 

items as are in normal commercial use.’’ 

No other detail is provided. USML (22 

CFR Part 121) Category XI(a) similarly 

uses a broad catch-all control phrase to 

control ‘‘[e]lectronic equipment not 

included in Category XII of the [USML] 

which is specifically designed, modified 

or configured for military applications.’’ 

The examples provided in the rule are 

not an exhaustive list of controlled 

items. USML Category VIII(h) similarly 

controls all ‘‘[c]omponents, parts, 

accessories, attachments and associated 

equipment (including ground support 

equipment) specifically designed or 

modified for the articles in paragraphs 

(a) through (d) of [Category VIII], 

excluding aircraft tires and propellers 

used with reciprocating engines,’’ other 

than the parts and components that are 

standard equipment in civil aircraft as 

described in the ‘‘Note’’ to USML 

Category VIII. Similarly, USML Category 

XII(e) controls ‘‘[c]omponents, parts, 

accessories, attachments and associated 

equipment specifically designed or 

modified for the [fire control, range 

finding, optical, night vision and other 

articles enumerated in] paragraphs (a) 

through (d) of this category, except for 

such items as are in normal commercial 

use.’’ 

The ‘‘specially designed’’ definition 

proposed here would capture the items 

currently captured under the ITAR 

‘‘specifically designed, modified or 

configured’’ for a military application 

catch-all. BIS understands that the 

issues associated with catch-all control 

text would largely be transferred from 

one set of regulations to another. 

However, the Administration believes 

that industry and government would 

benefit from adopting this new 

definition because doing so would 

confine the term’s use to a single set of 

regulations for a large volume of parts, 

components, and other items that do not 

warrant the worldwide and collateral 

controls of the ITAR. Moreover, this 

action would objectively define the 

catch-all term ‘‘specially designed’’ for 

such items, consistently apply the 

‘‘normal commercial use’’ carve-outs 

described above, and also implement 

the statement of policy in ITAR section 

120.3, consistent with the AECA. Under 

that policy, the ITAR, and by 

implication, the new ‘‘600 series’’ 

ECCNs, should not control items that (a) 

have predominant civil applications and 

performance equivalents to those used 

for civil applications and (b) do not 

have significant military or intelligence 

applicability such that control under the 

ITAR (or a new ‘‘600 series’’ ECCN) is 

warranted. 

This proposed definition would also 

provide the public with an as objective 

as possible basis for determining 

whether any other item on the CCL is 

‘‘specially designed,’’ thus responding 

to a common industry suggestion for 

improving the CCL. In addition, the 

proposed definition responds to a 

common industry request to clarify that 

‘‘specially designed’’ does not mean 

merely ‘‘capable of use in’’ or ‘‘capable 

of use for’’ another item. For example, 

non-application specific general 

purpose integrated circuits that are not 

designed for a particular application 

would not be ‘‘specially designed’’ 

items, even if they are used in 

controlled end items. Rather, the extent 

of the controls on such circuits would 

be described by the technical and other 

parameters in Category 3 of the CCL. 

Although BIS does not propose to 

remove references to ‘‘specially 

designed’’ that are part of multilateral 

control texts, it does have the discretion 

to define the term so long as the 

definition is not inconsistent with how 

the regimes define the term. The Missile 

Technology Control Regime (MTCR) is 

the only one of the four multilateral 

export control regimes to define the 

term. BIS believes that the proposed 

definition is not inconsistent with the 

MTCR definition, which is in EAR 

§ 772.1. BIS asks the public to comment 

in particular on whether this proposed 

definition would result in specific items 

that are not now controlled for Missile 

Technology (MT) reasons on the CCL to 

become controlled for MT reasons. We 

also ask for public comments on 

whether this definition would remove 

from control items that are now 

controlled for MT reasons on the CCL as 

a result of the application of the MTCR 

definition. Additionally, as in the July 

15 proposed rule, BIS asks the public to 

test this proposed definition to 

determine its ease of use, whether it 

meets the nine objectives identified for 

the term, and how it corresponds to 

what the public considers ‘‘specially 

designed’’ items. 

Objectives for the ‘‘Specially Designed’’ 

Definition 

The July 15 proposed rule included 

nine objectives for the revised 

‘‘specially designed’’ definition. These 

objectives have not changed. The U.S. 

Government is committed to adopting a 

‘‘specially designed’’ definition under 

the EAR and ITAR that would achieve 

these objectives. The nine objectives are 

to: 

(i) Preclude multiple or overlapping 

controls of similar items within and 

across the two control lists; 

(ii) Be easily understood and applied 

by exporters, prosecutors, juries, and the 

U.S. Government—e.g., by using 

objective, knowable, and clear 

requirements that do not rely upon a 

need to investigate and divine the 

intentions of the original designer of a 

part or the predominant market 

applications for such items; 

(iii) Be consistent with definitions 

used by the multilateral export control 

regimes; 

(iv) Not include any item specifically 

enumerated on either the USML or the 

CCL and, in order to avoid a definitional 

loop, do not use ‘‘specially designed’’ as 

a control criterion; 

(v) Be capable of excluding from 

control simple or multi-use parts such 

as springs, bolts, and rivets, and other 

types of items the U.S. Government 

determines do not warrant significant 

export controls; 

(vi) Apply to both descriptions of end 

items that are ‘‘specially designed’’ to 

have particular characteristics and to 

parts and components that were 

‘‘specially designed’’ for particular end 

items; 

(vii) Apply to materials and software 

because they are ‘‘specially designed’’ to 

have a particular characteristic or for a 

particular type of end item; 

(viii) Not increase the current control 

level to ‘‘600 series’’ control or other 

higher end controls of items (i.e., not 

move items currently subject to a lower 

control status to a higher level control 

status), particularly current EAR99 

items, which are now controlled at 

lower levels; and 


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(ix) Not, merely as a result of the 

definition, cause historically EARcontrolled items to become ITAR 

controlled. 

BIS believes that this proposed 

definition, and its counterpart 

published by the State Department, 

achieves these nine objectives. 

However, we invite public comments 

and ideas for how to define the term to 

meet or exceed all these objectives, and 

to provide additional objectives for such 

a term. 

BIS received many responses to the 

proposed ‘‘specially designed’’ 

definition in the July 15 proposed rule. 

The comments, along with the 

additional review of this issue the U.S. 

Government conducted in conjunction 

with BIS’s Technical Advisory 

Committees (TACs) and State’s Defense 

Trade Advisory Group (DTAG), 

identified additional changes necessary 

to achieve the nine objectives for 

‘‘specially designed.’’ This rule 

proposes a revised definition of 

‘‘specially designed’’ to allow this term 

to play the key role envisioned for it 

under the ECR Initiative. 

Similar to the July 15 proposed 

definition, this proposed definition 

adopts a ‘‘catch and release’’ approach. 

Paragraph (a) of the definition contains 

broad bases for items to be ‘‘specially 

designed’’—the ‘‘catch’’—and paragraph 

(b) contains various exceptions to an 

item’s being ‘‘specially designed’’—the 

‘‘release.’’ BIS believes that this 

structure creates an objective and 

common definition for both the EAR 

and ITAR, which nonetheless can be 

tailored and refined over time as 

necessary. This definition also 

simultaneously meets the nine 

objectives defined above while, with 

respect to the ‘‘600 series’’ items, also 

remains consistent with the policy 

standards set out in ITAR section 120.3 

and the carve-outs in various USML 

categories that do not control items ‘‘in 

normal commercial use.’’ BIS believes 

that this approach more readily lends 

itself to analysis in a decision tree 

format, i.e., with a series of ‘‘yes’’ and 

‘‘no’’ questions leading to a conclusion 

about whether an item is ‘‘specially 

designed.’’ BIS further believes that this 

format will contribute to a more orderly 

and efficient determination about 

whether an item is ‘‘specially 

designed.’’ This change would, then, 

eventually facilitate enhanced public 

understanding of the definition of the 

term. 

Summary of Public Comments on 

‘‘Specially Designed’’ 

Generally, public comments on the 

July 15 proposed rule supported the 

overall ECR Initiative and the proposed 

rule. In particular, commenters 

supported creating the ‘‘600 series,’’ 

which most commenters characterized 

as a sensible approach to addressing a 

fairly complicated problem. However, 

most commenters expressed concerns 

about the proposed ‘‘specially 

designed’’ definition, along with 

transition-related concerns that are 

being addressed in a separate proposed 

rule to be published in the Federal 

Register. For example, commenters felt 

that the new definition was difficult to 

understand and would capture items 

that should not be considered ‘‘specially 

designed.’’ The comments are discussed 

in greater detail below in regards to the 

specific concerns with the July 15 

proposed rule. The comments can be 

reviewed at: http://efoia.bis.doc.gov/ 

pubcomm/records-of-comments/ 

record_of_comments_usml.pdf. 

BIS took into account the comments 

from the July 15 proposed rule when 

developing the revised definition of 

‘‘specially designed’’ proposed here. BIS 

intends this revised definition to be 

evaluated on its own merits, and the 

public need not review the July 15 

proposed rule to understand this action. 

Once the public comments on this rule 

are reviewed and responded to, BIS 

intends to publish a final ‘‘specially 

designed’’ definition. 

However, a general summary of the 

July 15 definition and the responses to 

it provides context for this proposed 

definition. In the July 15 proposed rule, 

BIS suggested defining ‘‘specially 

designed’’ in four paragraphs. Paragraph 

(a) would have identified what items 

would be ‘‘specially designed’’ except 

for ‘‘parts’’ and ‘‘components.’’ 

Paragraph (b) would have identified 

which ‘‘parts’’ and ‘‘components’’ 

would be ‘‘specially designed.’’ The 

paragraph (c) and (d) exclusion 

paragraphs would have identified 

certain items that would not be 

‘‘specially designed.’’ Most commenters 

supported paragraph (a) of the proposed 

definition. The majority of commenters 

suggested also adopting paragraph (a) 

for ‘‘parts’’ and ‘‘components.’’ 

Additionally, the majority of comments 

received indicated the public could 

understand and apply the paragraph (a) 

criteria, so BIS decided to include the 

same type of criteria as part of the 

proposed paragraph (a)(1) criteria 

included in this rule’s proposed 

definition of ‘‘specially designed.’’ 

However, a small number of 

commenters indicated that the proposed 

paragraph (a) could result in confusion 

over whether an item was ‘‘specially 

designed,’’ because the definition still 

relied on design intent. This proposed 

‘‘specially designed’’ definition 

addresses that concern by adopting a 

single paragraph (a) for determining 

what items are ‘‘specially designed.’’ 

Under the proposed structure, an item 

meeting one of the three listed criteria 

would be considered ‘‘specially 

designed.’’ 

Most of the concerns with the 

definition related to paragraphs (b), (c), 

and (d), which defined non-specific 

‘‘parts’’ or ‘‘components’’ could be 

considered ‘‘specially designed.’’ Of the 

commenters criticizing these 

paragraphs, most believed the 

exclusions in paragraphs (c) and (d) 

were difficult to understand and, once 

understood, would have resulted in 

items that they had not historically 

considered to be ‘‘specially designed’’ to 

become controlled as a result of the 

definition. In particular, the definition 

would have caused non-specific ‘‘parts’’ 

and ‘‘components’’ designed for 

controlled and uncontrolled 

applications or no particular application 

to become ‘‘specially designed,’’ and 

therefore subject to control. Thus, the 

definition would have resulted in some 

items’ control status being undefined 

until the items first were used in a 

controlled, or uncontrolled item. BIS 

believes the paragraphs (b)(4) and (b)(5) 

proposed here address those concerns. 

I. Proposed Adoption of a Revised 

‘‘Specially Designed’’ Definition 

A. Discussion of Each Element of the 

Proposed Definition and Its Notes 

The definition begins with 

introductory text to provide guidance on 

the proper steps for analyzing the 

definiton. This brief introductory text 

would assist the public in 

understanding that they must follow the 

sequential analysis set forth below. 

Specifically, the public is to begin with 

paragraph (a)(1) and proceed through 

each subsequent paragraph. This 

introductory text would also specify 

that commodities subject to the EAR 

described in any paragraph (b) 

subparagraph are not ‘‘specially 

designed’’ under this definition. 

1. Paragraph (a) Identifies ‘‘Specially 

Designed’’ Items 

Paragraph (a) begins with the phrase 

‘‘Except for items described in (b), an 

‘item’ is ‘specially designed’ if, as a 

result of ‘development,’ it [is within the 

scope of any one of three subparagraphs 

discussed below].’’ It is the beginning of 

the ‘‘catch’’ in the ‘‘catch and release’’ 

structure of the definition. With respect 

to ECCNs containing the term ‘‘specially 

designed,’’ an item is ‘‘caught’’ as 

‘‘specially designed’’ if any of the three 


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elements of paragraph (a) apply and 

none of the elements of paragraph (b) 

apply. The word ‘‘items’’ refers to how 

the term is defined in the EAR, i.e., any 

‘‘commodity,’’ ‘‘software,’’ or 

‘‘technology.’’ 

Paragraph (a) is limited by the phrase 

‘‘if, as a result of ‘development.’’’ The 

EAR defines ‘‘development’’ as ‘‘related 

to all stages prior to serial production, 

such as: design, design research, design 

analyses, design concepts, assembly and 

testing of prototypes, pilot production 

schemes, design data, process of 

transforming design data into a product, 

configuration design, integration design, 

layouts.’’ Determining whether an item 

is ‘‘a result of development’’ is a 

threshold question for whether an item 

is ‘‘specially designed;’’ an item is 

considered to be ‘‘specially designed’’ 

under this paragraph only if someone 

engaged in any of these ‘‘development’’ 

activities with respect to that item. 

Thus, there are three questions an 

exporter, reexporter or transferor must 

ask to determine if an item is within the 

scope of paragraph (a): 

1. Does the item, as a result of 

‘‘development,’’ have properties 

‘‘peculiarly responsible for’’ achieving 

or exceeding the performance levels, 

characteristics, or functions described in 

the relevant ECCN or USML paragraph? 

2. If the item is a part or component, 

is it, as a result of ‘‘development,’’ 

necessary for an enumerated or 

referenced commodity or defense article 

to function as designed? 

3. If the item is an accessory or 

attachment, is it, as a result of 

‘‘development,’’ used with an 

enumerated or referenced commodity or 

defense article to enhance its usefulness 

or effectiveness? 

If the answer to all three questions is 

‘‘no,’’ then the item is not ‘‘specially 

designed’’ and no further analysis of 

paragraph (b) is necessary. If the answer 

to any one of the questions is ‘‘yes,’’ 

then the exporter, reexporter or 

transferor must determine whether any 

one of the five paragraph (b) exclusions 

applies. If any one of the five paragraph 

(b) exclusions apply, then the item is 

not ‘‘specially designed.’’ If none do, 

then the item is ‘‘specially designed.’’ 

Paragraph (a)(1). Paragraph (a)(1) 

would capture an item if, as a result of 

‘‘development,’’ it ‘‘has properties 

peculiarly responsible for achieving or 

exceeding the performance levels, 

characteristics, or functions described in 

the relevant ECCN or U.S. Munitions 

List (USML) paragraph.’’ This criterion 

is essentially the same as the one that 

was proposed in the July 15 rule. Based 

on the comments, the public found this 

part of the definition clear. The positive 

response was, perhaps, due to the fact 

that it is taken from the EAR’s current 

definition of ‘‘required’’ at § 772.1. 

Although that definition, by its terms, 

applies only to technology and software, 

BIS believes that the principle of that 

definition—which is that items are not 

controlled merely because they are 

somehow capable of use with a 

controlled item—equally applies to 

commodities for purposes of the 

proposed definition. Therefore, even if 

something is capable of being used with 

a controlled item, it is not captured by 

this part of paragraph (a) unless 

someone did something during the 

item’s development so that it would 

achieve or exceed the performance 

levels, characteristics, or functions 

described in a referenced ECCN or 

USML paragraph. 

Example for paragraph (a)(1): ECCN 1A007 

controls equipment and devices specially 

designed to initiate charges and devices 

containing energetic materials, by electrical 

means. If a piece of equipment or device, as 

a result of ‘‘development,’’ has properties 

peculiarly responsible for initiating energetic 

materials by electrical means, such 

equipment or device would be ‘‘specially 

designed’’ under paragraph (a)(1) of the 

proposed definition. For example, if the 

equipment was designed to communicate 

electronically with devices containing 

energetic materials, such as sending a 

detonation signal and having safety features 

to ensure other electronic equipment could 

not detonate the device containing the 

energetic material, such equipment or device 

would be ‘‘specially designed’’ under this 

proposal. 

Note to paragraph (a)(1). This rule would 

add a note to paragraph (a)(1) to provide an 

example of an item that would, as a result of 

‘‘development,’’ meet the paragraph (a)(1) 

criterion. This note would also include an 

example of an item that would not, as a result 

of ‘‘development,’’ meeting the paragraph 

(a)(1) criterion. In addition to providing two 

concrete examples under ECCN 2B007, this 

note would also specify that similar to the 

definition of ‘‘required’’ the peculiarly 

responsible for criterion in paragraph (a)(1) 

would not be limited to exclusive use. 

Paragraph (a)(2). Paragraph (a) would 

capture a part or component if, as a 

result of ‘‘development,’’ it ‘‘is 

necessary for an enumerated or 

referenced commodity or defense article 

to function as designed.’’ This element 

is similar to (a)(1), but it must be listed 

separately because not all descriptions 

of commodities on the USML and the 

CCL include performance levels, 

characteristics, or functions as a basis 

for control. Paragraph (a)(2) would 

capture parts and components that are 

necessary for another item on the CCL 

or the USML to function ‘‘as designed.’’ 

If an item would function ‘‘as designed’’ 

without the part or component at issue, 

then that part or component is not 

captured by paragraph (a)(2). 

BIS has deliberately separated the 

terms ‘enumerated’ and ‘referenced’ in 

paragraph (a)(2), which are unique to 

the EAR’s definition of the term. As 

described below, an ‘enumerated’ item 

is one that is controlled on the USML 

or the CCL (except for AT-only items) 

for reasons other than being ‘‘specially 

designed.’’ The CCL, however, contains 

notes that exclude from control parts 

and components ‘‘specially designed’’ 

for uncontrolled items. Such 

uncontrolled items are merely 

‘referenced’ but not ‘enumerated.’ Note 

2 to ECCN 1A002 provides an example 

of items excluded from control based on 

being ‘‘specially designed’’ for a 

referenced item. Under Note 2 to 1A002, 

if the semi-finished item was ‘‘specially 

designed’’ for a referenced sporting 

goods item, such as a golf club 

designated as EAR99, such a semifinished item is excluded from 1A002. 

Example for paragraph (a)(2): ECCN 

7A001.b controls angular or rotational 

accelerometers specified to function at linear 

acceleration levels exceeding 100 g and, 

according to the heading, specially designed 

components therefor. The heading of 7A001 

is an example of a catch-all control for 

‘‘specially designed’’ components for the 

accelerometers subject to control in 7A001.b. 

In this case, if a component, as a result of 

‘‘development,’’ is necessary for an 

accelerometer enumerated in 7A001.b to 

function as designed, such component would 

be considered ‘‘specially designed’’ as a 

result of paragraph (a)(2), unless the 

component was excluded from ‘‘specially 

designed’’ on the basis of paragraph (b) of the 

proposed definition. 

Paragraph (a)(3). Paragraph (a)(3) 

would capture an accessory or 

attachment if, as a result of 

‘‘development,’’ it ‘‘is used with an 

enumerated or referenced commodity or 

defense article to enhance its usefulness 

or effectiveness.’’ BIS takes this phrase 

from the ITAR’s current and the EAR’s 

proposed definition of ‘‘accessory’’ and 

‘‘attachment.’’ 

Example for paragraph (a)(3): ECCN 3B001 

controls specific types of equipment for 

manufacturing semiconductor devices or 

materials, and specially designed 

components and accessories therefor. ECCN 

3B001.i controls imprint lithography 

templates designed for integrated circuits by 

3A001. If, as a result of ‘‘development,’’ an 

accessory is used with equipment 

enumerated in 3B001.i to enhance its 

usefulness or effectiveness, such an accessory 

would be ‘‘specially designed’’ under the 

catch-all control for ‘‘specially designed’’ 

accessory included in the heading of 3B001, 

unless the accessory was excluded from 

‘‘specially designed’’ on the basis of 

paragraph (b) of the proposed definition. 


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2. Paragraph (b) Identifies Exclusions 

From ‘‘Specially Designed’’ 

BIS proposes adopting a simplified, 

single paragraph structure for excluding 

certain parts, components, accessories 

and attachments from the ‘‘specially 

designed’’ definition. Under this 

proposal, any ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ or ‘‘attachment’’ described 

in an exclusion paragraph under (b)(1), 

(b)(2), (b)(3), (b)(4) or (b)(5), would not 

be controlled by a ‘catch-all’ provision 

of an ECCN. 

The five exclusions under paragraph 

(b) would refine the set of ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories’’ and 

‘‘attachments’’ that would be subject to 

the ‘catch-all’ controls on the CCL. In 

this way, paragraph (a) and (b) are 

inextricably linked and together identify 

the ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ that 

are ‘‘specially designed’’ for purposes of 

the ‘catch-all’ controls on the CCL. 

Paragraph (a), described above, would 

create objective tests for what ‘‘items,’’ 

as a result of ‘‘development,’’ would be 

‘‘specially designed’’ based on the 

criteria identified in (a)(1), (a)(2) or 

(a)(3). Paragraph (b) would create 

objective tests for what ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ are excluded from 

‘‘specially designed’’ under the 

exclusion criteria identified in (b)(1), 

(b)(2), (b)(3), (b)(4) or (b)(5). Together, 

the objective criteria identified in 

paragraph (a) and the objective 

exclusion criteria identified in 

paragraph (b) allow the proposed 

‘‘specially designed’’ definition to 

achieve the nine objectives identified 

above for the definition. 

Paragraph (b) codifies the principle in 

ITAR section 120.3 that, in general, a 

commodity should not be ITAR 

controlled if it has a predominant civil 

application or has performance 

equivalent (defined by form, fit, and 

function) to articles used for civil 

applications. If such an article 

nonetheless warrants control under the 

ITAR because it provides the U.S. with 

a critical military or intelligence 

advantage or for another reason, then it 

is or should be enumerated on the 

USML, as described in the ‘‘bright line,’’ 

‘‘positive list’’ objectives listed in the 

Department of State’s December 10, 

2010 Federal Register notice, Revisions 

to the United States Munitions List (75 

FR 76935). 

Another purpose of paragraph (b) is to 

apply the ITAR concept of ‘‘in normal 

commercial use’’ equally and 

consistently to all non-specific, catch-all 

controls with respect to the ‘‘600 

series.’’ Under the current USML, this 

concept of exclusions for certain items 

‘‘in normal commercial use’’ is 

variously worded in multiple catch-all 

paragraphs in the current USML. For 

example, Category XI(c), by its terms, 

does not control electronic components, 

parts, accessories, attachments or 

associated equipment specifically 

designed or modified for military 

electronics if they are ‘‘in normal 

commercial use.’’ Similarly, Category 

XII(e) does not control components, 

parts, accessories, attachments or 

associated equipment specifically 

designed or modified for fire control 

systems, military lasers, ITARcontrolled night vision equipment, 

military inertial navigation equipment, 

and other items controlled by Category 

XII(a) through (d) that are ‘‘in normal 

commercial use.’’ Categories XVI(b) and 

XIV(n)(2) have similar carve-outs for 

items in normal commercial use. In 

addition, Category VIII(h), by virtue of a 

note, does not control parts, 

components, accessories, or attachments 

specifically designed or modified for 

military aircraft or engines if they are, 

among other things, standard equipment 

in certain civil aircraft. 

These five exclusions under 

paragraph (b) play an important role in 

the proposed ‘‘specially designed’’ 

definition and are described below in 

greater detail. The description below 

includes examples of parts, 

components, accessories and 

attachments that would be excluded 

from ‘‘specially designed’’ under each of 

the respective paragraph (b) exclusions. 

Exclusion paragraph (b)(1). Paragraph 

(b)(1) would exclude any ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ or 

‘‘attachment’’ from a ‘catch-all’ 

provision of an ECCN if the ‘‘part,’’ 

‘‘component,’’ ‘‘accessory’’ or 

‘‘attachment’’ is enumerated in a USML 

paragraph. This exclusion also 

addresses an important concept 

regarding how the USML and CCL relate 

to each other, and the correct order in 

which the public should review the two 

control lists. When determining an 

item’s proper jurisdiction and 

classification, before reviewing the CCL, 

a person must examine the ITAR to 

determine that the item is not subject to 

the ITAR, or to the exclusive 

jurisdiction of any of the other 

departments or agencies of the U.S. 

Government identified in § 734.3(b)(1)(i) 

of the EAR. 

Paragraph (b)(1) would clarify that 

any ‘‘part,’’ ‘‘component,’’ ‘‘accessory,’’ 

or ‘‘attachment’’ enumerated on the 

USML, is excluded from the definition 

of ‘‘specially designed,’’ because it 

would remain subject to the ITAR and 

would not be controlled under a catchall provision of an ECCN. Under the 

current USML, most of its categories 

end with a broad catch-all control on 

‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ 

and ‘‘attachments’’ that were 

specifically designed or modified for the 

particular USML category. Under the 

USML categories being proposed under 

the USML-to-CCL process, in most cases 

these broad catch-all controls would no 

longer be used. Instead, these items 

would be enumerated on the revised 

USML’s ‘‘positive’’ control list. This 

change will make the paragraph (b)(1) 

exclusion more useful by more clearly 

defining the line between control under 

the USML and CCL. The items in former 

‘catch-all’ controls found at the end of 

most of the USML categories would be 

added to the CCL under the ‘‘600 series’’ 

.x paragraphs that are being created 

under the USML-to-CCL process and 

would include ‘‘specially designed’’ 

criteria. 

Example of a ‘‘component’’ excluded 

under paragraph (b)(1): On December 6, 

2011, the Department of State proposed a 

rule, Amendment to the International Traffic 

in Arms Regulations: Revision of U.S. 

Munitions List Category VII (76 FR 76100) 

that, among other things, would control 

ground vehicle components, parts, 

accessories, attachments, and associated 

equipment identified in paragraphs (g)(1)– 

(14) of the rule. Under proposed paragraph 

(g)(5), reactive armor parts and components 

would be controlled under USML Category 

VII. If a company uses reactive armor 

components enumerated on the USML in 

producing the EAR item, such a component 

would not be captured under a ‘catch-all’ 

control on the CCL, because the reactive 

armor components would be enumerated on 

the USML and would therefore be subject to 

the ITAR, not the EAR. Paragraph (b)(1) of 

this proposed rule would make this existing 

policy explicit by excluding such USML 

enumerated ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ or ‘‘attachments’’ from the 

definition of ‘‘specially designed.’’ 

Exclusion paragraph (b)(2). Paragraph 

(b)(2) would exclude any single 

unassembled ‘‘part’’ that is of a type 

commonly used in multiple types of 

commodities not enumerated on the 

USML or the CCL. The paragraph (b)(2) 

exclusion would include an illustrative 

list of the types of ‘‘parts’’ excluded 

under this paragraph. These ‘‘parts’’ 

include threaded fasteners (e.g., screws, 

bolts, nuts, nut plates, studs, inserts), 

other fasteners (e.g., clips, rivets, pins), 

basic hardware (e.g., washers, spacers, 

insulators, grommets, bushings, 

springs), wire, and solder. 

In preparing this proposed rule, BIS 

evaluated the merits of expanding the 

scope of this exclusion to cover minor 

components, but ultimately determined 

that the expansion would not be 


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warranted, particularly in light of the 

other exclusions and the proposed 

criterion in paragraph (a)(2). However, 

BIS determined it should clarify the 

illustrative list of single unassembled 

‘‘parts’’ that would be excluded from the 

definition of ‘‘specially designed’’ on 

the basis of the exclusion paragraph 

(b)(2). 

Paragraph (b)(2) would adopt the 

phrase ‘‘used in multiple types of 

commodities not enumerated on the 

CCL or the USML’’ instead of the phrase 

‘‘used in multiple types of civil items.’’ 

BIS believes the former phrase is more 

specific than the latter, and would 

clarify this exclusion. BIS also proposes 

to change the illustrative list of single 

unassembled ‘‘parts’’ that may be 

excluded from ‘‘specially designed’’ on 

the basis of paragraph (b)(2). BIS further 

proposes using the term ‘‘basic 

hardware’’ instead of the term ‘‘common 

hardware,’’ and to include the term 

‘‘springs’’ in the parenthetical examples 

of basic hardware. Finally, BIS proposes 

to add the term ‘‘solder’’ as another type 

of ‘‘part’’ that would be within the scope 

of this exclusion paragraph (b)(2). 

Example of a ‘‘part’’ excluded under 

paragraph (b)(2): ECCN 8A992 controls 

vessels, marine systems or equipment, not 

controlled by 8A001, 8A002 or 8A018, and 

specially designed parts therefor. A company 

developing a new vessel that would be 

controlled under 8A992 needs to modify nut 

plates for use in it. The modified nut plate 

is an example of a single unassembled ‘‘part’’ 

that meets the necessary criteria in paragraph 

(a)(2). However, if the modified nut plate is 

of a type commonly used in multiple types 

of commodities not enumerated on the USML 

or the CCL, it would not be ‘‘specially 

designed’’ on the basis of paragraph (b)(2). 

Although, as a result of ‘‘development’’ the 

‘‘part’’ may have some unique characteristic, 

such as being a cut-to-length nut plate, 

substantively the ‘‘part’’ is common to 

multiple types of commodities not 

enumerated on the USML or the CCL. For 

example, a similar type of nut plate may also 

be used for assembling self-assembled 

furniture designated as EAR99. 

Exclusion paragraph (b)(3). Under 

paragraph (b)(3), a ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ or 

‘‘attachment’’ that would otherwise be 

controlled by a ‘catch-all’ provision of 

an ECCN would not be controlled if it 

has the same performance capabilities 

as a ‘‘part,’’ ‘‘component,’’ ‘‘accessory,’’ 

or ‘‘attachment’’ used in or with a 

commodity that (i) is or was in 

‘‘production’’ (i.e., not in 

‘‘development’’) and (ii) is either not 

enumerated on the CCL or USML, or is 

enumerated in an ECCN controlled only 

for Anti-Terrorism (AT) reasons. In the 

context of paragraph (b)(3), an item in 

an ECCN controlled only for AT reasons 

is considered enumerated provided it is 

not controlled in a ‘catch-all’ paragraph. 

Proposed paragraph (b)(3) would use 

the phrase ‘‘performance capabilities’’ 

instead of the term ‘‘function,’’ which 

was in the July 15 proposal. Several 

comments to the July 15 proposed rule 

suggested using this alternative term 

because performance capabilities is a 

well understood concept under the 

EAR, and is easier to understand than 

function. BIS agrees. 

In addition, paragraph (b)(3)(i) would 

simplify the exclusion by removing the 

term ‘‘serial production,’’ and 

substituting the EAR-defined term 

‘‘production,’’ along with a 

parenthetical explanation that if an item 

is in ‘‘production’’ it is no longer in 

‘‘development.’’ Some of the comments 

in response to the July 15 proposed rule 

did not see a sufficient distinction 

between serial production and 

‘‘production’’ to warrant adding a new 

EAR definition and creating another 

concept the public would need to 

understand to apply the ‘‘specially 

designed’’ definition. After further 

consideration, BIS agrees that this 

suggested change would clarify the 

intent of exclusion paragraph (b)(3) and 

further simplify the definition. 

Paragraph (b)(3)(ii) would expand the 

scope of what was included in the July 

15 proposed rule with the second 

criterion extending to ECCNs controlled 

only for Anti-Terrorism (AT) reasons. 

The July 15 exclusion was limited to 

EAR99 items. BIS made this change 

because such a ‘‘part,’’ ‘‘component,’’ 

accessory’’ or ‘‘attachment’’ crosses over 

into broader commercial applicability 

and thus does not warrant being treated 

as ‘‘specially designed.’’ This crossing 

over into broader commercial 

applicability occurs when a ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ or 

‘‘attachment’’ has the same form, fit and 

performance capabilities as a ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ or 

‘‘attachment’’ used in or with an item 

that is either not enumerated on the CCL 

or USML or is only controlled for AT 

reasons. If such an item nonetheless 

warranted control because of certain 

capabilities or potential uses of concern 

for national security, foreign policy, or 

other reasons, then the item would be 

enumerated on either the USML or the 

CCL. 

Note to paragraph (b)(3). This proposed 

rule would add a note to clarify the 

applicability of paragraph (b)(3). This note 

would specify that commodities in 

‘‘production’’ that are subsequently subject to 

‘‘development’’ activities, such as those 

pertaining to quality improvements, cost 

reductions, or feature enhancements, remain 

in ‘‘production.’’ However, any new models 

or versions of such commodities developed 

from such efforts that change the basic 

performance or capability of the commodity 

are in ‘‘development’’ until and unless they 

enter into ‘‘production.’’ This proposed rule 

would use the term ‘‘production’’ instead of 

‘‘serial production’’ to conform to the use of 

‘‘production’’ in paragraph (b)(3). 

This Note to paragraph (b)(3) further 

clarifies the relationship between 

‘‘production’’ and ‘‘development’’ in the 

context of this exclusion. When an item 

enters ‘‘production,’’ there may still be 

some peripheral ‘‘development’’ 

activities for the next generation of the 

item in which the ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ or ‘‘attachment’’ is used. 

This note would provide guidance on 

when the exclusion would no longer 

apply and when a separate 

determination would need to be made 

regarding whether a particular ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ or 

‘‘attachment’’ would no longer be 

excluded. 

Example of excluded component under 

paragraph (b)(3): A company manufactures a 

fire truck designated as EAR99. The 

manufacturer uses a radiator originally 

designed in the 1980s for use in large 

military transport vehicles. The cost of the 

original 1980s radiator has now dropped 

significantly, so the company incorporates 

that same radiator into a fire truck that went 

into ‘‘production’’ in 2010. Under this 

example, although the radiator is not a 

‘‘specially designed’’ ‘‘component’’ because it 

is necessary for large military transport 

vehicles to function as designed, it might 

nonetheless be caught by the criteria in 

paragraph (a)(2). However, because the 

‘‘component’’ with the same form, fit and 

performance capabilities is used in the 

‘‘production’’ of an EAR99 fire truck, it 

would be excluded from the ‘‘specially 

designed’’ definition by paragraph (b)(3). If, 

for some reason, such radiators warranted 

control for national security, foreign policy, 

or other reasons, then it would be 

enumerated on either the USML or the CCL. 

It would thus be controlled regardless of its 

use in a civil or military end item. 

Exclusion paragraph (b)(4) and (b)(5). 

This proposed rule would add 

paragraphs (b)(4) and (b)(5) to address 

aspects of unintended overreaching 

identified in the definition of ‘‘specially 

designed’’ in the July 15 proposed rule. 

The comments identified one 

unintended result of eliminating design 

intent from the criteria used to identify 

a ‘‘specially designed’’ ‘‘component’’ or 

‘‘part’’ is that the first use of a part or 

component could result in a part or 

component being considered ‘‘specially 

designed’’ under the rule. This result 

could occur even if the ‘‘part’’ or 

‘‘component’’ had been originally 

developed for a general purpose that 

was not specific to the ‘enumerated’ 

item for which the ‘‘part’’ or 


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‘‘component’’ would have been 

‘‘specially designed’’ under the July 15 

definition. 

To address this unintended overreach, 

BIS decided that some element of design 

intent should be included in the 

proposed ‘‘specially designed’’ 

definition. Through paragraph (b)(4), 

this rule proposes excluding ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories’’ and 

‘‘attachments’’ if they were or are being 

developed with a reasonable 

expectation of (i) use in or with 

commodities described on the CCL and 

commodities not enumerated on the 

CCL or the USML, or (ii) use in or with 

commodities not enumerated on the 

CCL or the USML. As discussed below, 

through paragraph (b)(5), this rule 

proposes excluding ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ if they were or are being 

developed for no particular application. 

Although these exclusion concepts 

under paragraphs (b)(4) and (b)(5) are 

new to the proposed definition of 

‘‘specially designed,’’ they are little 

more than a restatement of BIS’s 

application of the term ‘‘specially 

designed’’ now. BIS had not included 

these two exclusions in the July 15 

proposed rule in an effort to avoid 

overtly design-intent based aspects of 

the definition. The public comments, 

however, as noted above made it clear 

that without such carve-outs proposed 

in this rule under (b)(4) and (b)(5), the 

EAR would likely over-control items 

based on their first uses. Thus, the 

proposed paragraphs (b)(4) and (b)(5) 

are intended to allow people who know 

or who can determine the design intent 

of their ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ or ‘‘attachment’’ to exclude 

it from the definition of ‘‘specially 

designed’’ when it was or is being 

developed for the items identified in 

(b)(4)(i), or (ii), or (b)(5). These 

exclusion paragraphs (b)(4) and (b)(5) 

would not create a burden to know the 

original design intent, but they would 

allow those who know the original 

design intent to exclude those ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ or 

‘‘attachments’’ from being controlled as 

‘‘specially designed.’’ This change is not 

a departure from the current BIS 

position on the subject. It is, however, 

a specific, precise written articulation of 

the practice that would become part of 

the EAR. 

Example of a ‘‘component’’ excluded 

under paragraph (b)(4)(i): An example of a 

component that would not be ‘‘specially 

designed’’ and excluded under (b)(4)(i) is one 

that was or is being developed to be 

interchangeable between a military vehicle 

enumerated in ECCN 0A606.a and also a 

vehicle that is not described on the USML or 

the CCL, such as an EAR99 civilian vehicle. 

One example would be a component that a 

company designs that is used in both military 

vehicles as well as in firetrucks. Another 

example of a component that would not be 

‘‘specially designed’’ as a result of (b)(4)(i) is 

one that was or is being developed to be 

interchangeable between a military aircraft 

enumerated in ECCN 9A610.a and also a 

civilian aircraft that is controlled for AT-only 

reasons in ECCN 9A991.b, such as an aircraft 

actuator developed for use in military aircraft 

in ECCN 9A610.a and civil transport aircraft 

in 9A991.b. 

Even though a component may be 

used interchangeably and meet the 

paragraph (b)(4) exclusion and thus not 

be ‘‘specially designed,’’ it does not 

necessarily mean that the component is 

exempt from export controls. The 

component may, for example, be 

positively identified on the USML and 

ITAR controlled, regardless of whether 

it is common to a vehicle or aircraft not 

enumerated on the CCL. The 

jurisdictional and classification status of 

any particular component must be 

determined by reviewing the full scope 

of the control lists to determine the 

appropriate jurisdiction and 

classification. Paragraph (b)(4)(i) merely 

states that such a component would not 

be within the scope of a ‘catch-all’ 

paragraph of an ECCN (i.e., would not 

be ‘‘specially designed)’’ based on its 

commonality with components not 

identified on the CCL or controlled for 

AT-only reasons. 

Example of a ‘‘part’’ excluded under 

paragraph (b)(4)(ii): An example of a ‘‘part’’ 

that would not be ‘‘specially designed’’ as a 

result of (b)(4)(ii) is one that was or is being 

developed for use in or with commodities not 

enumerated on the CCL or the USML, such 

as a ‘‘part’’ being developed for use in a 

mining truck designated as EAR99. Again, 

the application of (b)(4)(ii) does not 

necessarily mean that such a part is 

uncontrolled. As a result of its characteristics 

or capabilities it may be positively listed on 

the USML or CCL and, as such, controlled by 

the applicable provisions. The jurisdictional 

and classification status of any particular 

component must be determined by reviewing 

the full scope of the control lists to determine 

the appropriate jurisdiction and 

classification. Paragraph (b)(4)(ii) merely 

states that such a part would not be within 

the scope of a ‘catch-all’ paragraph of an 

ECCN (i.e., would not be ‘‘specially 

designed)’’ based on its development for use 

in or with commodities not enumerated on 

the CCL or the USML. 

Exclusion paragraph (b)(5). As noted 

above, this rule would also add a 

paragraph (b)(5) to address another 

aspect of the unintended overreach 

identified in the definition of ‘‘specially 

designed’’ in the July 15 proposed rule. 

This paragraph (b)(5) exclusion is 

intended to address potential overreach 

that could occur even if the ‘‘part’’ or 

‘‘component’’ had been originally 

developed for a general purpose that 

was not specific to the ‘enumerated’ 

item for which the ‘‘part’’ or 

‘‘component’’ would have been 

‘‘specially designed’’ under the July 15 

definition. BIS would address this by 

excluding from ‘‘specially designed’’ on 

the basis of paragraph (b)(5) ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories’’ and 

‘‘attachments’’ if they were or are being 

developed with no reasonable 

expectation of use for a particular 

application. 

Example of a ‘‘component’’ excluded 

under paragraph (b)(5): An example of a 

component that would not be ‘‘specially 

designed’’ as a result of (b)(5) is one that was 

developed for general or multi-purpose 

applications. For example, many catalog 

electronic components are designed as basic 

building blocks for other equipment, 

regardless of whether the equipment is 

military or civilian, controlled or 

uncontrolled. Again, application of (b)(5) 

does not necessarily mean that such a 

component is uncontrolled, and as result of 

its characteristics or capabilities it may be 

positively listed on the USML or CCL and, 

as such, controlled by the applicable 

provisions. The jurisdictional and 

classification status of any particular 

component must be determined by reviewing 

the full scope of the control lists to determine 

the appropriate jurisdiction and 

classification. Paragraph (b)(5) merely states 

that such a component would not be within 

the scope of a ‘catch-all’ paragraph of an 

ECCN (i.e., would not be ‘‘specially 

designed)’’ based on its not having been 

designed for a particular application. 

Note to paragraph (b)(4) and (b)(5): This 

proposed rule would also add a note to 

paragraph (b)(4) and (b)(5) to specify for a 

commodity not to be ‘‘specially designed’’ on 

the basis of paragraph (b)(4) or (b)(5), 

documents contemporaneous with its 

‘‘development,’’ in their totality, must 

establish the elements of paragraph (b)(4) or 

(b)(5). The proposed note would also provide 

an illustrative list of documents that may be 

pointed to to demonstrate the applicability of 

the exclusions under (b)(4) or (b)(5). Such 

documents may include concept design 

information, marketing plans, declarations in 

patent applications, or contracts. Lastly, the 

note would specify that absent such 

documents, the ‘‘commodity’’ may not be 

determined to be excluded from the 

definition of ‘‘specially design’’ by virtue of 

paragraphs (b)(4) or (b)(5). 

Proposed paragraphs (b)(4) and (b)(5) 

would create an incentive for parties 

responsible for making jurisdictional 

and classification determinations to 

maintain such documents for the life of 

the product in order to be able to 

demonstrate without ambiguity that it 

was or was not ‘‘specially designed’’ for 

a controlled item or application. The 


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creation of such incentives would help 

national security by emphasizing the 

need for those responsible for making 

jurisdictional and classification selfdeterminations to do so in a reliable, 

consistent, documented way that is 

consistent with the relevant export 

control regulations. The creation of such 

incentives would also help make U.S. 

exporters more reliable and predictable 

because they would be able to make and 

demonstrate with more certainty 

determinations regarding whether a 

commodity is or is not controlled by 

virtue of a ‘‘specially designed’’ catchall in the regulations. 

Note to paragraph (b)(5): This rule would 

also add another note to paragraph (b)(5) to 

specify that if one has ‘‘knowledge’’ that the 

commodity was or is being developed for a 

particular application, one cannot rely on 

paragraph (b)(5) to determine that a 

commodity was not ‘‘specially designed.’’ 

BIS would use the EAR defined term 

‘‘knowledge’’ in this note to paragraph (b)(5) 

to establish a clear standard for when the 

commodity would not be eligible for being 

excluded from ‘‘specially designed’’ on the 

basis of paragraph (b)(5). 

Note 1: This proposed rule would also add 

a new Note 1 to define ‘enumerated’ for 

purposes of the proposed ‘‘specially 

designed’’ definition. This note would read: 

‘Enumerated’ means any item (i) on either the 

USML or CCL not controlled in a ‘catch-all’ 

paragraph and (ii) when on the CCL, 

controlled for more than AT-only reasons, 

except in the context of paragraph (b)(3), 

where an item in an ECCN controlled only 

for AT reasons is considered enumerated 

when it is not controlled in a ‘catch-all’ 

paragraph. 

Examples of enumerated items: The law 

enforcement end items controlled in the 

heading of ECCN 0A978 are examples of 

enumerated commodities on the CCL. ECCN 

0A978 specifies that it controls law 

enforcement striking weapons and includes 

six examples for the types of law 

enforcement striking weapons that are 

subject to control under 0A978. The fiber 

optic hull penetrators and connectors 

controlled in ECCN 8A002.c are additional 

examples of enumerated commodities on the 

CCL. The ECCN specifies the hull penetrators 

controlled are limited to fiber optic hull 

penetrators or connectors. 

Note 2: This proposed rule would also add 

a Note 2 to define ‘catch-all’ for purposes of 

the proposed ‘‘specially designed’’ definition. 

This note would read as follows: A ‘catch-all’ 

paragraph is one that does not refer to 

specific types of parts, components, 

accessories, or attachments but rather 

controls non-specific ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ or ‘‘attachments’’ because they 

were ‘‘specially designed’’ for an enumerated 

item. BIS is aware that the term ‘catch-all’ 

has also been used informally by the public 

to refer to the part 744 end-use and end-user 

controls that impose a license requirement on 

all items subject to the EAR. In preparing this 

proposed rule, BIS considered adding a new 

part 772 definition to clarify the two different 

contexts under which the term ‘catch-all’ 

would be used, but decided simply noting 

this in the preamble of this proposed rule 

would be sufficient. 

Examples of catch-all controls: The phrase 

‘‘and specially designed components 

therefor’’ in the heading of ECCN 1A005 is 

an example of a catch-all control on the CCL; 

it reaches all components that have been 

‘‘specially designed’’ for the body armor 

enumerated in 1A005. The phrase ‘‘and 

specially designed components therefor’’ 

used in ECCN 3A001.c is another example of 

a catch-all control on the CCL. That catch-all 

control reaches all components that have 

been ‘‘specially designed’’ for the acoustic 

wave devices enumerated in 3A001.c. 

3. Guidance for ‘‘Specially Designed’’ in 

the Context of De-Control Notes 

Some ECCNs, such as 1A002, state 

that an item is not controlled if it is 

‘‘specially designed’’ for a particular 

type of item, purpose, or application. As 

indicated by the introduction to 

paragraph (b) explained above, an item 

that would be ‘‘specially designed’’ 

under paragraph (a) and would not be 

controlled as a result of such a decontrol provision in an ECCN 

nonetheless remains ‘‘specially 

designed’’ and, thus, uncontrolled 

regardless of whether any aspect of 

paragraph (b) would apply to it. The 

basis for this conclusion is that 

paragraph (b) states that it only applies 

to items that ‘‘would be controlled by a 

catch-all provision of an ECCN.’’ 

II. Other Definition To Assist Public’s 

Review of the ‘‘Specially Designed’’ 

definition 

This rule proposes to revise the 

definition of ‘‘end item’’ included in the 

July 15 proposed rule by proposing a 

definition that would more closely 

correspond with the ITAR definition of 

end item, although be EAR specific. BIS 

made this change because several 

commenters indicated that the July 15 

definition, with the inclusion of the 

term ‘stand-alone,’ would cause 

confusion over whether an item was an 

‘‘end item’’ or a ‘‘component.’’ BIS 

determined the best and simplest 

approach would be to revise the 

definition to more closely correspond to 

the ‘‘end item’’ definition used in the 

ITAR. This rule proposes defining ‘‘end 

item’’ as follows: 

End item. This is an assembled 

commodity ready for its intended use. 

Only ammunition, fuel or other energy 

source is required to place it in an 

operating state. Examples of end items 

include ships, aircraft, firearms, and 

milling machines. 

This rule also proposes splitting the 

proposed definition of ‘‘accessories and 

attachments’’ included in the July 15 

proposed rule into separate but identical 

definitions for the terms ‘‘accessories’’ 

and ‘‘attachments.’’ As there will be 

locations in the EAR where either 

‘‘accessories’’ or ‘‘attachments’’ but not 

both will be used, this change would 

avoid any potential confusion as to 

whether the definition applies to the 

terms when used separately. While 

‘‘accessories’’ and ‘‘attachments’’ would 

have the same definitions, both would 

include a note at the end of each 

definition to indicate that the definition 

of ‘‘accessories’’ and ‘‘attachments’’ are 

the same. This rule proposes defining 

‘‘accessories’’ and ‘‘attachments’’ as 

follows: 

Accessories. These are associated 

items for any ‘‘component,’’ ‘‘end item,’’ 

or ‘‘system,’’ and which are not 

necessary for their operation, but which 

enhance their usefulness or 

effectiveness. For example, for a riding 

lawnmower, accessories and 

attachments will include the bag to 

capture the cut grass, and a canopy to 

protect the operator from the sun and 

rain. For purposes of this definition, 

accessories and attachments are the 

same. 

Attachments. These are associated 

items for any ‘‘component,’’ ‘‘end item,’’ 

or ‘‘system,’’ and which are not 

necessary for their operation, but which 

enhance their usefulness or 

effectiveness. For example, for a riding 

lawnmower, accessories and 

attachments will include the bag to 

capture the cut grass, and a canopy to 

protect the operator from the sun and 

rain. For purposes of this definition, 

attachments and accessories are the 

same. 

As with the proposed ‘‘specially 

designed’’ definition, BIS requests 

comments on the proposed definitions 

of ‘‘end item,’’ ‘‘accessories,’’ and 

‘‘attachments.’’ Any comments received 

on these three proposed definitions will 

be considered and addressed in the final 

rule adding these three definitions to 

the EAR. 

BIS does not propose here to re-define 

the terms ‘‘part,’’ and ‘‘component,’’ that 

were included in the July 15 proposed 

rule. 

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 extended by the 

Notice of August 12, 2011, 76 FR 50661 

(August 16, 2011), 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 


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appropriate and to the extent permitted 

by law, pursuant to Executive Order 

13222. 

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, 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 

designated a ‘‘significant regulatory 

action,’’ but not economically 

significant, under section 3(f) of 

Executive Order 12866. Accordingly, 

the rule has been reviewed by the Office 

of Management and Budget (OMB). 

2. Notwithstanding any other 

provision of law, no person is required 

to respond to, nor is 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 proposed 

rule would affect two approved 

collections: Simplified Network 

Application Processing + System 

(control number 0694–0088), which 

includes, among other things, license 

applications, and License Exceptions 

and Exclusions (0694–0137). Total 

burden hours associated with the PRA 

and OMB control numbers 0694–0088 

and 0694–0137 are not expected to 

increase as a result of this rule. As part 

of the President’s Export Control Reform 

(ECR) Initiative, this proposed rule, and 

a separate proposed rule from the 

Department of State, Directorate of 

Defense Trade Controls being published 

in conjunction with this rule, sets forth, 

as much as possible, a common 

definition of ‘‘specially designed’’ for 

use in the EAR and the ITAR. This 

proposed rule would not move any 

items from the USML to the CCL, 

although the revised definition included 

here would play an important role in 

the ‘‘600 series’’ that would be used to 

control items transitioned from the 

USML to the CCL. 

As stated in the July 15 proposed rule 

(76 FR 41958), BIS believed that the 

combined effect of all rules to be 

published adding items to the EAR that 

would be removed from the ITAR as 

part of the administration’s Export 

Control Reform Initiative would 

increase the number of license 

applications submitted by 

approximately 16,000 annually. As the 

review of the USML has progressed, the 

interagency group has gained more 

specific information about the number 

of items that would come under BIS 

jurisdiction whether those items would 

be eligible for export under license 

exception. As of June 19, 2012, BIS 

believes the increase in license 

applications may be 30,000 annually, 

resulting in an increase in burden hours 

of 8,500 (30,000 transactions at 17 

minutes each) under control number 

0694–0088. 

3. This rule does not contain policies 

with Federalism implications as that 

term is defined under E.O. 13132. 

4. The Regulatory Flexibility Act 

(RFA), as amended by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA), 5 U.S.C. 

601 et seq., generally requires an agency 

to prepare a regulatory flexibility 

analysis of any rule subject to the notice 

and comment rulemaking requirements 

under the Administrative Procedure Act 

(5 U.S.C. 553) or any other statute, 

unless the agency certifies that the rule 

will not have a significant economic 

impact on a substantial number of small 

entities. Under section 605(b) of the 

RFA, however, if the head of an agency 

certifies that a rule will not have a 

significant impact on a substantial 

number of small entities, the statute 

does not require the agency to prepare 

a regulatory flexibility analysis. 

Pursuant to section 605(b), the Chief 

Counsel for Regulations, Department of 

Commerce, submitted a memorandum 

to the Chief Counsel for Advocacy, 

Small Business Administration, 

certifying that proposed rule published 

on July 15, 2011, will not have a 

significant impact on a substantial 

number of small entities. 

This proposed rule re-proposes, with 

certain changes, the definitions of 

‘‘specially designed,’’ of ‘‘end item,’’ 

and of ‘‘accessories and attachments’’ 

that BIS originally proposed in the July 

15 proposed rule. The changes proposed 

here do not impact the original 

certification. Consequently, BIS has not 

prepared a regulatory flexibility 

analysis. A summary of the factual basis 

for the certification is provided below. 

Number of Small Entities 

The Bureau of Industry and Security 

(BIS) does not collect data on the size 

of entities that apply for and are issued 

export licenses. Although BIS is unable 

to estimate the exact number of small 

entities that would be affected by this 

rule, it acknowledges that this rule 

would affect some unknown number. 

Economic Impact 

This rule will not have a significant 

impact on a small number of entities, 

and in fact will reduce the burden on 

small entities by facilitating enhanced 

public understanding of a key term used 

extensively on the Commerce Control 

List (CCL). This rule proposes a single 

definition for the term ‘‘special 

designed’’ and slightly revised 

definitions for the terms ‘‘end item,’’ 

‘‘accessories,’’ and ‘‘attachments’’ BIS 

proposed in the July 15 proposed rule. 

The proposed definition of ‘‘specially 

designed’’ would provide clear guidance 

to small entities, and all other entities, 

on the meaning of this term wherever it 

is used on the CCL. The term ‘‘specially 

designed’’ is used extensively 

throughout the CCL, but up to this point 

the only definition included in the EAR 

has been under the Missile Technology 

Control Regime (MTCR) context. 

Outside of the MTCR context, the First 

Circuit’s ruling in United States v. 

Lachman, 387 F.3d 42, 52–53 (2004) 

provides a definition of the term 

‘‘specially designed,’’ but for small 

entities, and all other entities, this 

requires reviewing the Lachman 

decision to understand the courtprovided definition outside the MTCR 

context. 

BIS is aware that some small entities, 

and other entities, instead of relying on 

the Lachman definition for the term 

‘‘specially designed’’ outside the MTCR 

context have simply decided to submit 

classification requests to BIS for ECCNs 

where the term ‘‘specially designed’’ is 

used. Others have made subjective 

determinations of which types of items 

are ‘‘special’’ to or for a controlled end 

item. The CCL is intended to allow 

exporters to self-classify their items. If 

the status quo, where the term is not 

defined in the regulations, creates an 

incentive for the public to submit 

additional classification requests or 

make self-determinations that expose 

exporters to compliance risks, then the 

rule places a burden on all entities, large 

and small. All entities should be able to 

confidently self-classify their items on 

the CCL. BIS believes it should take 

steps to alleviate any concerns the 

public may have with self-classifying 

their items, including providing 

definitions for key terms used on the 

CCL, which is being done in this 

proposed rule and not making small 

entities and other entities to consult 

outside legal decisions in order to 

determine the meaning of a key term 

used under the EAR. 

This proposed rule would reduce 

burdens on small entities and all other 

entities by proposing a single definition 


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36418 Federal Register / Vol. 77, No. 118 / Tuesday, June 19, 2012 / Proposed Rules 

of the term ‘‘specially designed’’ to part 

772 that would apply wherever the term 

is used. In the past, small entities, and 

other entities, have urged BIS to add a 

single definition of the term ‘‘specially 

designed’’ to the EAR. This proposed 

definition is consistent with the scope 

of the other two definitions of the term 

‘‘specially designed’’ that are currently 

in use. Specifically, this rule’s proposed 

definition is consistent with the 

‘‘specially designed’’ MTCR definition 

defined at § 772.1 of the EAR, and with 

the Lachman decision. BIS believes this 

rule’s proposed ‘‘specially designed’’ 

definition comes closest to 

encompassing the scope and intent of 

both the Lachman and the MTCR 

definitions, while also allowing this 

term to play the key role envisioned for 

it under the larger Export Control 

Reform (ECR) Initiative. This proposed 

rule identifies nine objectives for the 

term ‘‘specially designed’’ and 

encourages the public to submit 

comments on whether they agree with 

BIS that this proposed definition best 

achieves the nine objectives and 

whether the public may have any 

alternative that would better achieve the 

nine stated objectives. 

The ECR Initiative is making 

fundamental changes to the U.S. export 

control system. These fundamental 

changes will protect and enhance U.S. 

national security interests, while at the 

same time also easing the burdens on 

small entities and all other entities. One 

of the key objectives of the ECR 

Initiative is to draw a bright-line 

between the USML and the CCL, 

including transitioning items that no 

longer warrant ITAR control to the CCL. 

A bright-line between the two control 

lists will be a key benefit to small 

entities and all other entities. When 

small entities, and other entities, have 

difficulty in determining the 

jurisdiction and/or classification of their 

item, it creates a burden on such 

entities. The proposed definition of 

‘‘specially designed’’ included in this 

rule is a key term being used to develop 

the bright-line between the USML and 

the CCL. Using this proposed ‘‘specially 

designed’’ definition in the ‘‘600 series’’ 

.x and .y paragraphs is a key structural 

element that will create a more 

‘‘positive’’ USML and ensure that 

munitions items transitioned from the 

USML to the CCL are appropriately 

controlled in the applicable ‘‘600 series’’ 

ECCNs. 

This rule is based on a simple catchand-release concept. The proposed 

definition would allow for small 

entities, and all other entities, to use a 

simple set of ‘‘yes/no’’ questions to 

make determinations whether an item is 

or is not ‘‘specially designed.’’ The 

‘‘release’’ portion of the proposed 

definition will also allow for items that 

no longer warrant being considered 

‘‘specially designed’’ to be removed 

from ‘‘specially designed’’ once they 

have crossed over into broader 

commercial applicability. The five 

proposed paragraph (b) exclusions 

included in the proposed rule would 

allow the public to objectively know 

when an item would no longer be 

‘‘specially designed.’’ 

Conclusion 

BIS is unable to determine the precise 

number of small entities that would be 

affected by this rule. Based on the facts 

and conclusions set forth above, BIS 

believes that any burdens imposed by 

this rule would be offset by the benefits 

that will occur with the fundamental 

changes being made to the U.S. export 

control system under the Export Control 

Reform Initiative and the USML-to-CCL 

process, which the definition of 

‘‘specially designed’’ will be an 

important role. In addition, any burdens 

would be offset by the benefits of 

defining this key term used extensively 

on the CCL. For these reasons, the Chief 

Counsel for Regulations of the 

Department of Commerce certified to 

the Chief Counsel for Advocacy of the 

Small Business Administration that this 

rule, if adopted in final form, would not 

have a significant economic impact on 

a substantial number of small entities. 

List of Subjects 

15 CFR Part 772 

Exports. 

15 CFR Part 774 

Exports, Reporting and recordkeeping 

requirements. 

Accordingly, parts 772 and 774 of the 

Export Administration Regulations (15 

CFR parts 730–774) are proposed to be 

amended as follows: 

PART 772—[AMENDED] 

1. The authority citation for 15 CFR 

part 772 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 

12, 2011, 76 FR 50661 (August 16, 2011). 

2. Section 772.1 is amended: 

a. By revising the definition of 

‘‘specially designed;’’ and 

b. By adding definitions for the terms 

‘‘accessories,’’ ‘‘attachments,’’ and ‘‘end 

item’’. 

The revision and additions read as 

follows: 

§ 772.1 Definitions of terms as used in the 

Export Administration Regulations (EAR). 

* * * * * 

Accessories. These are associated 

items for any ‘‘component,’’ ‘‘end item,’’ 

or ‘‘system,’’ and which are not 

necessary for their operation, but which 

enhance their usefulness or 

effectiveness. For example, for a riding 

lawnmower, accessories and 

attachments will include the bag to 

capture the cut grass, and a canopy to 

protect the operator from the sun and 

rain. For purposes of this definition, 

accessories and attachments are the 

same. 

* * * * * 

Attachments. These are associated 

items for any ‘‘component,’’ ‘‘end item,’’ 

or ‘‘system,’’ and which are not 

necessary for their operation, but which 

enhance their usefulness or 

effectiveness. For example, for a riding 

lawnmower, accessories and 

attachments will include the bag to 

capture the cut grass, and a canopy to 

protect the operator from the sun and 

rain. For purposes of this definition, 

attachments and accessories are the 

same. 

* * * * * 

End item. This is an assembled 

commodity ready for its intended use. 

Only ammunition, fuel or other energy 

source is required to place it in an 

operating state. Examples of end items 

include ships, aircraft, firearms, and 

milling machines. 

* * * * * 

Specially designed. When applying 

this definition, follow this sequential 

analysis: Begin with paragraph (a)(1) of 

this definition and proceed through 

each subsequent paragraph. If an item 

would not be controlled as a result of 

the application of the standards in 

paragraph (a) of this definition, then it 

is not necessary to work through 

paragraph (b) of this definition. If an 

item would be controlled as a result of 

paragraph (a), then it is necessary to 

work through each of the elements of 

paragraph (b). Items subject to the EAR 

described in any of paragraphs (b)(1) 

through (5) of this definition are not 

‘‘specially designed’’ items subject to 

the EAR. 

(a) Except for items described in (b) of 

this definition, an ‘‘item’’ is ‘‘specially 

designed’’ if, as a result of 

‘‘development,’’ it: 

(1) Has properties peculiarly 

responsible for achieving or exceeding 

the performance levels, characteristics, 

or functions in the relevant ECCN or 

U.S. Munitions List (USML) paragraph; 

(2) Is a part or component necessary 

for an enumerated or referenced 


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commodity or defense article to 

function as designed; or 

(3) Is an accessory or attachment used 

with an enumerated or referenced 

commodity or defense article to enhance 

its usefulness or effectiveness. 

(b) A ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ or ‘‘attachment’’ that 

would be controlled by paragraph (a) of 

this paragraph is not ‘‘specially 

designed’’ if it: 

(1) Is enumerated in a USML 

paragraph; 

(2) Is a single unassembled ‘‘part’’ that 

is of a type commonly used in multiple 

types of commodities not enumerated 

on the CCL or the USML, such as 

threaded fasteners (e.g., screws, bolts, 

nuts, nut plates, studs, inserts), other 

fasteners (e.g., clips, rivets, pins), basic 

hardware (e.g., washers, spacers, 

insulators, grommets, bushings, 

springs), wire, and solder; 

(3) Has the same form, fit, and 

performance capabilities as a part, 

component, accessory, or attachment 

used in or with a commodity that: 

(i) Is or was in ‘‘production’’ (i.e., not 

in ‘‘development’’); and 

(ii) Is either not enumerated on the 

CCL or USML, or is enumerated in an 

ECCN controlled only for AntiTerrorism (AT) reasons; 

(4) Was or is being developed with a 

reasonable expectation of: 

(i) Use in or with commodities 

described on the CCL and commodities 

not enumerated on the CCL or the 

USML; or 

(ii) Use in or with commodities not 

enumerated on the CCL or the USML; or 

(5) Was or is being developed with no 

reasonable expectation of use for a 

particular application. 

Note 1: ‘Enumerated’ means any item (i) on 

either the USML or CCL not controlled in a 

‘catch-all’ paragraph and (ii) when on the 

CCL, controlled by an ECCN for more than 

AT-only reasons, except in the context of 

paragraph (b)(3), where an item in an ECCN 

controlled only for AT reasons is considered 

enumerated when it is not controlled in a 

‘catch-all’ paragraph. An example of an 

‘enumerated’ ECCN is 2A226, which controls 

valves with the following three 

characteristics: a ‘‘nominal size’’ of 5 mm or 

greater; having a bellows seal; and wholly 

made of or lined with aluminum, aluminum 

alloy, nickel, or nickel alloy containing more 

than 60% nickel by weight. The CCL also 

contains notes excluding from control parts 

and components ‘‘specially designed’’ for 

uncontrolled items. Such uncontrolled items 

are merely ‘referenced’ and are not 

‘enumerated.’ Note 2 to ECCN 1A002 is an 

example of items excluded from control 

based on being ‘‘specially designed’’ for a 

referenced item. 

Note 2: A ‘catch-all’ paragraph is one that 

does not refer to specific types of parts, 

components, accessories, or attachments but 

rather controls non-specific ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ or 

‘‘attachments’’ because they were ‘‘specially 

designed’’ for an enumerated item. For 

example, ECCN paragraph 9A610.x is a 

catch-all, because it controls ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ ‘‘specially designed’’ for 

military aircraft, but does not identify 

specific types of parts, components, 

accessories, or attachments within its control. 

Another example of a ‘catch-all’ is the 

heading of 7A102, which controls ‘‘specially 

designed’’ components for the gyros 

enumerated in 7A102, but does not identify 

the specific types of components within its 

control. 

Note to paragraph (a)(1): Items that as a 

result of ‘‘development’’ have properties 

peculiarly responsible for achieving or 

exceeding the performance levels, functions 

or characteristics in a relevant ECCN 

paragraph may have properties shared by 

different products. For example, ECCN 

2B007.a controls ‘‘robots’’ capable in real 

time of full three-dimensional image 

processing or full-three dimensional ‘scene 

analysis’ to generate or modify ‘‘programs’’ or 

to generate or modify numerical program 

data [and specially designed controllers and 

‘‘end effectors’’ therefor]. An example of a 

component not meeting the peculiarly 

responsible standard under paragraph (a)(1) 

is a component that as a result of 

‘‘development’’ has properties that allow the 

component to conduct 2D image processing 

for use in a ‘‘robot.’’ This component is not 

‘‘specially designed’’ for purposes of 2B007.a 

because the component even if used in a 

‘‘robot’’ does not have properties peculiarly 

responsible for a ‘‘robot’’ achieving or 

exceeding the performance levels, functions 

or characteristics in 2B207.a. Conversely, 

another component that as a result of 

‘‘development,’’ has properties that allow the 

component to perform in real time of full 

three-dimensional image processing for use 

in a ‘‘robot,’’ is an example of a component 

that is peculiarly responsible because as a 

result of ‘‘development’’ the component has 

a direct and proximate causal relationship in 

the ‘‘robot’’ that is central or special for 

achieving or exceeding the performance 

levels, functions or characteristics identified 

in 2B207.a. 

Note to paragraph (b)(3): Commodities in 

‘‘production’’ that are subsequently subject to 

‘‘development’’ activities, such as those 

pertaining to quality improvements, cost 

reductions, or feature enhancements, remain 

in ‘‘production.’’ However, any new models 

or versions of such commodities developed 

from such efforts that change the basic 

performance or capability of the commodity 

are in ‘‘development’’ until and unless they 

enter into ‘‘production.’’ 

Note to paragraph (b)(4) and (b)(5): For a 

commodity not to be ‘‘specially designed’’ on 

the basis of paragraphs (b)(4) or (b)(5), 

documents contemporaneous with its 

‘‘development,’’ in their totality, must 

establish the elements of paragraphs (b)(4) or 

(b)(5). Such documents may include concept 

design information, marketing plans, 

declarations in patent applications, or 

contracts. Absent such documents, the 

‘‘commodity’’ may not be excluded from 

being ‘‘specially designed’’ by either 

paragraph (b)(4) or (b)(5). 

Note to paragraph (b)(5): If you have 

‘‘knowledge’’ that the commodity was or is 

being developed for a particular application, 

you may not rely on paragraph (b)(5) to 

conclude that the commodity was or is not 

‘‘specially designed.’’ 

* * * * * 

PART 774—[AMENDED] 

3. 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). 

Supplement No. 1 to Part 774 

[Amended] 

4. In Supplement No. 1 to part 774 

(the Commerce Control List) wherever 

the term ‘‘specially designed’’ occurs, 

add quotation marks around the term 

‘‘specially designed.’’ 

Dated: June 6, 2012. 

Kevin J. Wolf, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2012–14475 Filed 6–15–12; 11:15 am] 

BILLING CODE 3510–33–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Part 774 

[Docket No. 120426028–1028–01] 

RIN 0694–AF68 

Feasibility of Enumerating ‘‘Specially 

Designed’’ Components 

AGENCY: Bureau of Industry and 

Security, Commerce. 

ACTION: Advanced notice of proposed 

rulemaking (ANPRM). 

SUMMARY: As part of the President’s 

Export Control Reform (ECR) Initiative, 

this ANPRM requests comments on the 

feasibility of positively identifying 

‘‘specially designed’’ ‘‘components’’ on 

the Commerce Control List (CCL) so as 

to decrease the use of the term, which 

appears extensively throughout the CCL, 


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