67346 Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Rules and Regulations 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Parts 736, 738, 740, 742, 744, 

and 772 

[Docket No. 051020273–5273–01] 

RIN [0694–AD61] 

Revision of License Requirements and 

Licensing Policy, and Increased 

Availability of License Exceptions for 

Certain North Atlantic Treaty 

Organization (NATO) Member States 

AGENCY: Bureau of Industry and 

Security, Commerce. 

ACTION: Final rule. 

SUMMARY: This final rule amends certain 

provisions of the Export Administration 

Regulations (EAR) that affect Bulgaria, 

Czech Republic, Estonia, Hungary, 

Iceland, Latvia, Lithuania, Poland, 

Romania, Slovakia and Slovenia. These 

amendments provide consistent 

treatment to all NATO member states 

with respect to national security-based 

license requirements, national security 

licensing policy, availability of certain 

License Exceptions, and certain intransit transactions. 

DATES: Effective date: November 7, 

2005. 

ADDRESSES: Comments concerning this 

rule may be sent by e-mail to 

rpd2@bis.doc.gov, by fax to 202 482 

3355 or to the Regulatory Policy 

Division, Bureau of Industry and 

Security, Room H2017, U.S. Department 

of Commerce, Washington, DC 20230. 

Please refer to RIN 0694–AD47 in all 

comments. Comments regarding the 

Paperwork Reduction Act burden 

estimates or any other aspect of the 

collection of information affected by 

this rule may be sent to David Rostker, 

OMB Desk Officer, by e-mail at 

david_rostker@omb.eop.gov or by fax to 

202 395 7285; with a copy to the 

Regulatory Policy Division, Bureau of 

Industry and Security at one of the 

addresses above. 

FOR FURTHER INFORMATION CONTACT: 

William Arvin, Regulatory Policy 

Division, Office of Exporter Services at 

warvin@bis.doc.gov or 202 482 2440. 

SUPPLEMENTARY INFORMATION: 

Background 

On June 28, 2004, the Bureau of 

Industry and Security (BIS) published 

an amendment to the EAR to remove 

certain regional stability and crime 

control license requirements to new 

NATO member countries. Seven 

countries acceded to NATO on March 

29, 2004: Bulgaria, Estonia, Latvia, 

Lithuania, Romania, Slovakia and 

Slovenia. This final rule amends the 

EAR to provide for these newer NATO 

member states and for three other NATO 

member states, Hungary, Iceland, and 

Poland, treatment consistent with all 

other NATO member states respect to 

national security license requirements 

(§ 742.2(a)) and Supplement No. 1 to 

part 738 (Country Chart)). This final rule 

also removes Bulgaria, Estonia, Latvia 

and Lithuania from General Prohibition 

Eight, which concerns certain in-transit 

transactions, (§ 736.2(b)(8)), and 

removes restrictions on License 

Exceptions related to crime control from 

Bulgaria, Czech Republic, Estonia, 

Hungary, Latvia, Poland, Romania, 

Slovakia, and Slovenia (§ 740.2). This 

final rules adds Bulgaria, Estonia, 

Latvia, Lithuania and Romania to 

Country Group B, and removes them 

from Country Group D:1 (Supplement 

No. 1 to part 740). Exports to these 

countries are now eligible for certain 

license exceptions set forth in part 740, 

and the national security licensing 

policy set forth in § 742.2(b) for Country 

Group D:1 countries no longer applies. 

The Czech Republic, Iceland, Poland, 

Slovakia and Slovenia have been 

included in Country Group B since it 

was created in 1996. Finally, this final 

rule makes certain technical and 

conforming amendments to other 

provisions of the EAR that refer to 

NATO member states or to individual 

countries that are now NATO member 

states. Specific amendments made by 

this final rule are described below. 

Amendments to General Prohibition 

Eight 

General Prohibition Eight 

(§ 736.2(b)(8) of the EAR) requires a 

license for items that transit listed 

countries if the items would require a 

license to be exported or reexported to 

those countries and no license 

exception would authorize the export or 

reexport. This rule removes NATO 

member states Bulgaria, Estonia, Latvia, 

and Lithuania from the list of countries 

in General Prohibition Eight. 

Amendments to National Security 

License Requirements 

Section 742.4(a) of the EAR sets forth 

the license requirements for items listed 

on the Commerce Control List (CCL) 

with ‘‘National Security’’ indicated as a 

reason for control. Prior to publication 

of this rule, § 742.4(a) required a license 

for export or reexport ‘‘to all 

destinations except Country Group A:1 

and cooperating countries’’ of any item 

in an Export Control Classification 

Number (ECCN) that included ‘‘NS 

Column 2’’ in its ‘‘License 

Requirements’’ section. This rule adds 

Bulgaria, Czech Republic, Estonia, 

Hungary, Iceland, Latvia, Lithuania, 

Poland, Romania, Slovakia and Slovenia 

to the destinations excepted from the 

‘‘NS Column 2’’ license requirement in 

§ 742.4(a). All other NATO member 

states other than the United States are 

already exempt from this license 

requirement because they are listed in 

Country Group A:1. Country Group A:1 

is at Supp. No. 1 to Part 740 of the EAR. 

To reflect the changes made to 

§ 742.4(a), this rule also amends 

Supplement No. 1 to part 738 of the 

EAR by removing the ‘‘X’’ from the 

column labeled ‘‘NS 2’’ on the Country 

Chart in the rows for Bulgaria, Czech 

Republic, Estonia, Hungary, Iceland, 

Latvia, Poland, Romania, Slovakia and 

Slovenia. 

Amendments to Restrictions on Use of 

License Exceptions 

Section 740.2 of the EAR imposes 

certain restrictions on the use of License 

Exceptions. Paragraph (a)(4) of that 

section imposes restrictions on the use 

of License Exceptions when exporting 

or reexporting commodities controlled 

for crime control reasons. This rule 

replaces the phrase ‘‘Iceland, New 

Zealand or countries listed in Country 

Group A:1’’ in paragraph (a)(4) of 

§ 740.2, with the phrase ‘‘Australia, 

Japan, New Zealand or a NATO member 

state.’’ The effect of this change is to 

eliminate the restrictions imposed by 

paragraph (a)(4) on exports and 

reexports to Bulgaria, Czech Republic, 

Estonia, Hungary, Latvia, Poland, 

Romania, Slovakia and Slovenia. 

Although Iceland is no longer 

mentioned by name in paragraph (a)(4), 

it will continue to be exempt from the 

restrictions imposed by paragraph (a)(4) 

because it is a NATO member state. 

Although Country Group A:1 is no 

longer mentioned by name, all of its 

members will continue be exempt, 

either because they are NATO member 

states or because they are now 

mentioned by name in paragraph (a)(4). 

Amendments to Country Groups B and 

D:1 Affecting License Exception 

Eligibility and Licensing Policy 

Supplement No. 1 to Part 740 

contains several tables of ‘‘Country 

Groups’’ that are used to identify, 

among other things, License Exception 

eligibility and licensing policy. This 

rule adds Bulgaria, Estonia, Latvia, 

Lithuania, and Romania to Country 

Group B and removes them from 

Country Group D:1. 

Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Rules and Regulations 67347 

Effects of the Amendments to Country 

Group B 

License Exceptions found in § 740.3, 

Shipments of limited value (LVS); 

§ 740.4, Shipments to Country Group B 

countries (GBS); and § 740.6, 

Technology and software under 

restriction (TSR) are available only if the 

destination is in Country Group B. This 

change makes Bulgaria, Estonia, Latvia, 

Lithuania, and Romania eligible 

destinations for exports and reexports 

that are authorized by License 

Exceptions LVS, GBS and TSR. All 

other NATO member states other than 

the United States continue to be eligible 

destinations for these License 

Exceptions because they are already in 

Country Group B. 

Effects of the Amendments to Country 

Group D:1 

License Exceptions found in § 740.9, 

Temporary imports, exports and 

reexport (TMP); § 740.10, Servicing and 

replacement of parts and equipment 

(RPL); § 740.12, Gift parcels and 

humanitarian donations (GFT); § 740.14, 

Baggage (BAG); and § 740.15, Aircraft 

and vessels (AVS) all contain 

limitations or restrictions on their use 

for exports or reexports to destinations 

in Country Group D:1. Those limitations 

and restrictions no longer apply to 

exports and reexports authorized by 

License Exceptions TMP, GFT, BAG and 

AVS to Bulgaria, Estonia, Latvia, 

Lithuania, or Romania. Other NATO 

member states continue to be exempt 

from those limitations and restriction 

because they are not in Country Group 

D:1. 

Section 742.4(b)(1) of the EAR states 

the licensing policy for export and 

reexport of national security controlled 

items to destinations outside Country 

Group D:1. That licensing policy ‘‘is to 

approve * * * unless there a significant 

risk that the items will be diverted to a 

country in Country Group D:1.’’

Applications to export national security 

controlled items to Bulgaria, Estonia, 

Latvia, Lithuania, or Romania are now 

subject to this licensing policy. 

Applications to export or reexport 

national security controlled items to 

other NATO member states continue to 

be subject to this policy because they 

are not in Country Group D:1. 

Section 742.4(b)(2) of the EAR states 

the licensing policy for export and 

reexport of national security controlled 

items to destinations in Country Group 

D:1. That licensing policy is ‘‘to approve 

applications when BIS determines, on a 

case-by-case basis, that the items are for 

civilian use or otherwise would not 

make a significant contribution to the 

military potential of the country of 

destination that would prove 

detrimental to the national security of 

the United States.’’ Applications to 

export or reexport national security 

controlled items to Bulgaria, Estonia, 

Latvia, Lithuania, or Romania are no 

longer subject to this licensing policy. 

Applications to export or reexport 

national security controlled items to 

other NATO member states continue not 

to be subject to this policy because they 

are not in Country Group D:1. 

Technical and Conforming Changes 

Sections 740.15(c)(1), 740.15(c)(2), 

744.7(b)(1) and 744.7(b)(2) each contain 

reference to conditions that apply to 

most countries in Country Group D:1. 

Section 740.15(c) deals with the use of 

License Exception AVS to supply U.S. 

or Canadian vessels, airplane or airline 

installations or agents. Section 744.7 

requires a license for exports and 

reexports to service aircraft if the item 

being exported or reexported would 

require a license the country where the 

vessel or aircraft is located, in which it 

is registered or by which it is controlled, 

leased or chartered. Paragraph (b) 

provides certain exceptions for U.S. or 

Canadian carriers. Prior to publication 

of this rule, each of those references 

excluded Romania by name from the 

conditions that apply to most Country 

Group D:1 countries. By removing 

Romania from Country Group D:1, this 

rule eliminates the need to exclude 

Romania by name. Therefore, this rule 

also eliminates the references to 

Romania from §§ 740.15(c)(1), 

740.15(c)(2), 744.7(b)(1) and 744.7(b)(2). 

Section 742.4(b)(5) lists certain 

Country Group D:1 countries that, 

because of their efforts to adopt 

safeguard measures for exports and 

reexports, are ‘‘accorded enhanced 

favorable consideration licensing 

treatment.’’ Three of the countries that 

were listed in § 742.4(b)(5) prior to 

publication of this rule, Bulgaria, Latvia 

and Lithuania, are removed from 

Country Group D:1 by this rule. The 

removal of those countries from Country 

Group D:1 eliminates the need to list 

them in § 742.4(b)(5). Therefore this rule 

removes those three countries from 

§ 742.4(b)(5). 

This rule also removes Bulgaria, 

Estonia, Latvia, Lithuania and Romania 

from the definition of ‘‘Controlled 

Country’’ in § 772.1 to make that 

definition consistent with the removal 

of those countries from Country Group 

D:1. 

Although the Export Administration 

Act of 1979 (EAA), as amended, expired 

on August 20, 2001, Executive Order 

13222 of August 17, 2001 (3 CFR, 2001 

Comp., p. 783 (2002)) as extended by 

the Notice of August 2, 2005, 70 FR 

45273 (August 5, 2005), continues the 

EAR in effect under the International 

Emergency Economic Powers Act 

(IEEPA). 

Rulemaking Requirements 

1. 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 

contains a collection approved by the 

OMB under control number 0694–0088, 

‘‘Multi-Purpose Application,’’ which 

carries a burden hour estimate of 58 

minutes to prepare and submit form 

BIS–748. Miscellaneous and 

recordkeeping activities account for 12 

minutes per submission. BIS expects 

that this rule will eliminate the need for 

approximate 56 BIS–748 submissions 

per year. 

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 

participation, and a delay in effective 

date, are inapplicable because this 

regulation involves a military or foreign 

affairs function of the United States (see 

5 U.S.C. 553(a)(1)). Further, no other 

law requires that a notice of proposed 

rulemaking and an opportunity for 

public comment be given for this rule. 

Because a notice of proposed 

rulemaking and an opportunity for 

public comment are not required to be 

given for this rule by 5 U.S.C. 553, or 

by any other law, the analytical 

requirements of the Regulatory 

Flexibility Act, 5 U.S.C. 601 et. seq., are 

not applicable. 

List of Subjects 

15 CFR Parts 736, 738 and 772 

Exports. 

15 CFR Part 740 

Administrative practice and 

procedure, Exports, Reporting and 

recordkeeping requirements. 

15 CFR Part 742 

Export, Terrorism. 

67348 Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Rules and Regulations 

15 CFR Part 744 

Exports, Reporting and recordkeeping 

requirements, Terrorism. 

■ Accordingly the Export 

Administration Regulations (15 CFR 

parts 730–799) are amended as follows: 

PART 736—[AMENDED] 

■ 1. The authority citation for part 736 

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. 2151 (note), 

Pub. L. 108–175; E.O. 12938, 59 FR 59099, 

3 CFR, 1994 Comp., p. 950; E.O. 13020, 61 

FR 54079, 3 CFR, 1996 Comp. p. 219; E.O. 

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

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

Comp., p. 783; E.O. 13338, 69 FR 26751, May 

13, 2004; Notice of November 4, 2004, 69 FR 

64637, 3 CFR, 2004 Comp., p. 303; Notice of 

August 2, 2005, 70 FR 45273 (August 5, 

2005). 

■ 2. In § 736.2, revise paragraph 

(b)(8)(ii) to read as follows: 

§ 736.2 General prohibitions and 

determination of applicability. 

* * * * * 

(b) * * * 

(8) * * * 

(ii) Country scope. This General 

Prohibition Eight applies to Albania, 

Armenia, Azerbaijan, Belarus, 

Cambodia, Cuba, Georgia, Kazakhstan, 

Kyrgyzstan, Laos, Mongolia, North 

Korea, Russia, Tajikistan, Turkmenistan, 

Ukraine, Uzbekistan, Vietnam. 

* * * * * 

PART 738—[AMENDED] 

■ 3. The authority citation for part 738 

continues to read as follows: 

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

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

7430(e); 18 U.S.C. 2510 et seq.; 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; 46 U.S.C. app. 

466c; 50 U.S.C. app. 5; Sec. 901–911, Pub. L. 

106–387; Sec. 221, Pub. L. 107–56; 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 2, 2005, 70 

FR 45273 (August 5, 2005). 

Supplement No. 1 to Part 738— 

[Amended] 

■ 4. In Supplement No. 1 to part 738, 

the Country Chart, remove the ‘‘X’’ from 

the NS 2 column for Bulgaria, Czech 

Republic, Estonia, Hungary, Iceland, 

Latvia, Lithuania, Poland Romania, 

Slovakia, and Slovenia. 

PART 740—[AMENDED] 

■ 5. The authority citation for part 740 

is revised to read as follows: 

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

U.S.C. 1701 et seq.; Sec. 901–911, Pub. L. 

106–387; 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 

2, 2005, 70 FR 45273 (August 5, 2005). 

■ 6. In § 740.2 revise paragraph (a)(4) to 

read as follows: 

§ 740.2 Restrictions on all License 

Exceptions. 

(a) * * * 

(4) The commodity you are shipping 

is a specially designed crime control 

and detection instrument or equipment 

described in § 742.7 of the EAR and you 

are not shipping to Australia, Japan, 

New Zealand, or a NATO member state 

(see definition of NATO in § 772.1 of the 

EAR), unless the shipment is authorized 

under License Exception BAG, 

§ 740.14(e) of this part (shotguns and 

shotgun shells). 

* * * * * 

§ 740.15 [Amended] 

■ 7. In § 740.15, remove the phrase ‘‘and 

Romania’’ from paragraph (c)(1), 

introductory text and from paragraph 

(c)(2), introductory text. 

Supplement No. 1 to Part 740— 

[Amended] 

■ 8. In Supplement No. 1 to Part 740: 

■ Add to the table labeled ‘‘Country 

Group B—Countries’’ in alphabetical 

order Bulgaria, Estonia, Latvia, 

Lithuania, and Romania; and 

■ Remove Bulgaria, Estonia, Latvia, 

Lithuania, and Romania from the table 

labeled ‘‘Country Group D.’’

PART 742—[AMENDED] 

■ 9. The authority citation for part 742 

continues to read as follows: 

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

U.S.C. 1701 et seq.; 18 U.S.C. 2510 et seq.; 

22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; Sec. 

901–911, Pub. L. 106–387; Sec. 221, Pub. L. 

107–56; Sec 1503, Pub.L. 108–11,117 Stat. 

559; 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. 

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

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

Comp., p. 783; Presidential Determination 

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

16, 2003; Notice of November 4, 2004, 69 FR 

64637, 3 CFR, 2004 Comp., p. 303; Notice of 

August 2, 2005, 70 FR 45273 (August 5, 

2005). 

■ 10. In § 742.4, revise the third 

sentence of paragraph (a) and revise 

paragraph (b)(5) to read as follows: 

§ 742.4 National security. 

(a) License requirements. * * * A 

license is required to all destinations 

except Country Group A:1 and 

cooperating countries (see Supplement 

No. 1 to part 740), Bulgaria, Czech 

Republic, Estonia, Hungary, Iceland, 

Latvia, Lithuania, Poland, Romania, 

Slovakia, and Slovenia for all items in 

ECCNs on the CCL that include NS 

Column 2 in the Country Chart column 

of the ‘‘License Requirements’’ section. 

* * * 

(b) * * * 

(5) In recognition of efforts made to 

adopt safeguard measures for exports 

and reexports, Kazakhstan, Mongolia, 

and Russia are accorded enhanced 

favorable consideration licensing 

treatment. 

* * * * * 

PART 744—[AMENDED] 

■ 11. The authority citation for 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; Sec. 901–911, Pub. L. 106–

387; Sec. 221, Pub. L. 107–56; 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 44025, 3 CFR, 2001 

Comp., p. 783; E.O. 13224, 66 FR 49079, 3 

CFR, 2001 Comp., p. 786; Notice of 

November 4, 2004, 69 FR 64637, 3 CFR, 2004 

Comp., p. 303; Notice of August 2, 2005, 70 

FR 45273 (August 5, 2005). 

§ 744.7 [Amended] 

■ 12. In § 744.7, remove the phrase ‘‘and 

Romania’’ from paragraph (b)(1) 

introductory text and paragraph (b)(2) 

introductory text. 

PART 772—[AMENDED] 

■ 13. The authority citation for part 772 

is revised 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 

2, 2005, 70 FR 45273 (August 5, 2005). 

§ 772.1 [Amended] 

■ 14. In § 772.1, remove ‘‘Bulgaria,’’, 

‘‘Estonia,’’, ‘‘Latvia,’’, Lithuania,’’, and 

‘‘Romania,’’ from the second sentence of 

the definition of ‘‘Controlled Country.’’

Dated: November 1, 2005. 

Matthew S. Borman, 

Deputy Assistant Secretary for Export 

Administration. 

[FR Doc. 05–22079 Filed 11–4–05; 8:45 am] 

BILLING CODE 3510–33–P