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

6791 

Vol. 81, No. 26 

Tuesday, February 9, 2016 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Parts 770 and 774 

[Docket No. 151030999–5999–01] 

RIN 0694–AG76 

Clarifications and Revisions to Military 

Aircraft, Gas Turbine Engines and 

Related Items License Requirements 

AGENCY: Bureau of Industry and 

Security, Department of Commerce. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

modify the Commerce Control List 

(CCL) entries for two types of items: 

Military aircraft and related items, and 

military gas turbine engines and related 

items. The rule would add clarifying 

text to the descriptions of the types of 

military aircraft controlled on the CCL. 

The lists of items that are subject only 

to the anti-terrorism reason for control 

would be clarified and expanded. This 

proposed rule is based on a review of 

the military aircraft and gas turbine 

engine related entries that were added 

to the CCL on October 15, 2013. That 

review was intended to ensure that the 

regulatory changes made by the October 

15, 2013 rule are clear, do not 

inadvertently control items in normal 

commercial use, account for 

technological developments, and 

properly implement the national 

security and foreign policy objectives of 

the export control reform effort. This 

proposed rule is being published 

simultaneously with a proposed rule by 

the Department of State, which is based 

on a review of Categories VIII and XIX 

of the United States Munitions List 

(USML). This document also furthers 

the retrospective regulatory review 

directed by the President in Executive 

Order 13563. 

DATES: Comments must be received by 

March 25, 2016. 

ADDRESSES: You may submit comments 

by any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Search for this 

rule using its regulations.gov docket 

number: BIS–2016–0009. 

• By email directly to 

publiccomments@bis.doc.gov. Include 

RIN 0694–AG76 in the subject line. 

• By mail or delivery to Regulatory 

Policy Division, Bureau of Industry and 

Security, U.S. Department of Commerce, 

Room 2099B, 14th Street and 

Pennsylvania Avenue NW., Washington, 

DC 20230. Refer to RIN 0694–AG76. 

All comments (including any personally 

identifying information) will be made 

available for public inspection and 

copying. Commerce’s full plan for 

retrospective regulatory review can be 

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

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

FOR FURTHER INFORMATION CONTACT: 

Thomas DeFee or Jeffrey Leitz in the 

Office of Strategic Industries and 

Economic Security, Munitions Control 

Division by telephone at (202) 482–4506 

or by email at Thomas.DeFee@

bis.doc.gov or Jeffrey.Leitz@bis.doc.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

The Bureau of Industry and Security 

(BIS), Department of Commerce 

maintains the Export Administration 

Regulations (EAR), including the 

Commerce Control List (CCL). The 

Export Control Reform (ECR) Initiative, 

a fundamental reform of the U.S. export 

control system announced by the 

President in 2010, has resulted in 

transfer to the CCL of items that the 

President has determined do not 

warrant control on the United States 

Munitions List (USML), including 

certain military aircraft, military gas 

turbine engines, and related items. The 

USML is part of the International Traffic 

in Arms Regulations (ITAR) maintained 

by the Department of State. 

All references to the USML in this 

rule are to the list of defense articles 

that are controlled for the purpose of 

export or temporary import pursuant to 

the ITAR, and not to the defense articles 

on the USML that are controlled by the 

Bureau of Alcohol, Tobacco, Firearms 

and Explosives (ATF) for the purpose of 

permanent import under its regulations 

(see 27 CFR part 447). Pursuant to 

§ 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. For the 

sake of clarity, the list of defense articles 

controlled by ATF for the purpose of 

permanent import is the United States 

Munitions Import List (USMIL). The 

transfer of defense articles from the 

ITAR’s USML to the EAR’s CCL for the 

purpose of export control does not affect 

the list of defense articles controlled on 

the USMIL under the AECA for the 

purpose of permanent import. 

A core element of the ECR Initiative 

has been the streamlining of categories 

on the USML and the control on the 

CCL of items that the President 

determines do not warrant USML 

control. On December 10, 2010, the 

Department of State provided notice to 

the public of its intent, pursuant to the 

ECR Initiative, to revise the USML to 

create a more ‘‘positive list’’ that 

describes controlled items using, to the 

extent possible, objective criteria rather 

than broad, open-ended, subjective, or 

design intent-based criteria (see 75 FR 

76935). As a practical matter, this meant 

revising USML categories so that, with 

some exceptions, the descriptions of 

defense articles that continued to 

warrant control under the USML did not 

use catch-all phrases, such as ‘‘specially 

designed’’ or ‘‘specifically designed or 

modified,’’ to control unspecified items. 

With limited exceptions, the defense 

articles that warranted control under the 

USML were those that provided the 

United States with a critical military or 

intelligence advantage. All other items 

were to become subject to the 

jurisdiction of the EAR. Since that time, 

the Departments of State and Commerce 

have jointly published final rules setting 

forth revisions for fifteen USML 

categories, each of which has been 

reorganized into a uniform and more 

‘‘positive list’’ structure, and 

corresponding revisions to the CCL. 

The advantage of revising the USML 

into a more positive list is that its 

controls can be tailored to satisfy the 

national security and foreign policy 

objectives of the ITAR by maintaining 

control over those defense articles that 

provide a critical military or intelligence 

advantage, or otherwise warrant control 

under the ITAR, without inadvertently 

controlling items in normal commercial 

use. This approach, however, requires 

that both the USML and the CCL be 

regularly revised and updated to 

account for technological developments, 

practical application issues identified 

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6792 Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Proposed Rules 

by exporters and reexporters, and 

changes in the military and commercial 

applications of items affected by the 

USML and the 600 series ECCNs. 

As part of the ECR Initiative, certain 

military aircraft and gas turbine engines 

along with related parts, components, 

accessories and attachments, materials, 

software and technology were added to 

the CCL on October 15, 2013 (see 78 FR 

22660, April 16, 2013). At the same 

time, the USML was amended by 

revising Category VIII (Aircraft and 

Related Articles) and by creating 

Category XIX (Gas Turbine Engines and 

Associated Equipment) to describe, for 

the most part, the defense articles in 

those categories that remained on the 

USML in positive, objective terms (see 

78 FR 22740, April 16, 2013). 

In 2015, the Departments of Defense, 

State and Commerce reviewed the 

implementation of these changes to 

ascertain the effectiveness and utility of 

the 2013 amendments. That review 

included soliciting public comments by 

the Department of Commerce (see 80 FR 

11315, March 2, 2015) and the 

Department of State (see 80 FR 11314, 

March 2, 2015). 

This notice also furthers the 

retrospective regulatory review directed 

by the President in Executive Order 

13563. 

Changes Proposed in This Rule 

Note Regarding Castings, Forgings and 

Other Unfinished Products 

A note stating that forgings, castings, 

and other unfinished products, such as 

extrusions and machined bodies, that 

have reached a stage in manufacturing 

where they are clearly identifiable by 

mechanical properties, material 

composition, geometry, or function as 

commodities controlled by the ECCN in 

which the note appears (or by specified 

paragraphs in that ECCN) are controlled 

by that ECCN. BIS intends that the 

policy set forth in these notes apply to 

all commodities that are controlled in 

all 600 series Product Group A ECCNs. 

Accordingly this rule would add the 

following text as a new interpretation in 

§ 770.2: 

Forgings, castings, and other unfinished 

products, such as extrusions and machined 

bodies, that have reached a stage in 

manufacturing where they are clearly 

identifiable by mechanical properties, 

material composition, geometry, or function 

as commodities controlled by any Product 

Group A (‘‘End Items,’’ ‘‘Equipment,’’ 

‘‘Accessories,’’ ‘‘Attachments,’’ ‘‘Parts,’’ 

‘‘Components’’ and ‘‘Systems’’) ‘‘600 series’’ 

ECCN are controlled in that ‘‘600 series’’ 

ECCN. 

As a conforming change, the 

individual notes would be removed 

from ECCNs 0A604, 0A614, 3A611, 

9A604 and 9A619. This change, which 

would merely eliminate the potential for 

redundancies in the EAR, is not a 

substantive change. 

Changes to ECCN 9A610 

This proposed rule would remove text 

currently in the ‘‘Control(s)’’ table that 

excludes paragraphs .t, .u, .v and .w 

from national security controls. 

Although the text of those paragraphs is 

taken from the Missile Technology 

Control Regime Annex, the commodities 

that they control are unmanned aerial 

vehicle parts, components or associated 

equipment that also are subject to 

category ML10 on the Munitions List of 

the Wassenaar Arrangement on Export 

Controls for Conventional Arms and 

Dual-Use Goods and Technologies. The 

addition of the national security 

controls would not increase the number 

of destinations to which a license is 

required for the commodities controlled 

by these paragraphs as those paragraphs 

already have missile technology and 

regional stability controls. 

This proposed rule also would revise 

the text of the ‘‘Controls’’ table so that 

the national security and regional 

stability reasons for control would not 

apply to L100 aircraft manufactured 

prior to 2013 or to specially designed 

parts and components for L100 aircraft 

controlled in paragraph .x. This change 

is to make the reasons for control that 

apply to pre 2013 L100 aircraft and 

parts consistent with the reasons for 

control that applied to them historically 

under ECCN 9A991. 

The ‘‘Related Controls’’ paragraph of 

ECCN 9A610 would be expanded to 

refer to USML Category XIX and ECCN 

9A619 for controls on military aircraft 

engines and related items. 

The ‘‘Items’’ paragraph of ECCN 

9A610 would be revised to clarify that 

the aircraft listed in Note 1 to paragraph 

.a are examples of aircraft types 

controlled in that paragraph whereas the 

substantive criteria for control in 

paragraph .a is that the aircraft be 

‘‘specially designed’’ for a military use 

and not enumerated in USML Category 

VIII(a). 

A new paragraph .b would be added 

to control L100 aircraft manufactured 

prior to 2013 to implement the limited 

applicability of national security and 

regional stability controls to these 

aircraft as described above. 

A new paragraph .e would be added 

to control mobile aircraft arresting and 

engagement systems for aircraft 

controlled in either USML Category 

VIII(a) or ECCN 9A610.a. 

Existing paragraph .f, which controls 

ground equipment specially designed 

for military aircraft, would be revised to 

incorporate into the paragraph text, the 

illustrative list currently in the technical 

note. 

BIS is not proposing any changes to 

paragraphs .g through .s. 

Paragraphs .t, .u, .v and .w would 

continue to control certain unmanned 

aerial vehicle parts, components and 

associated equipment. The text of these 

paragraphs is drawn from the Missile 

Technology Regime Annex and specifies 

range capability (paragraphs .t and .u) or 

range and payload capability 

(paragraphs .v and .w). This proposed 

rule would leave the control text of 

those paragraphs unchanged, but would 

add a note to each paragraph to make 

clear that commodities that do not meet 

the range or range and payload 

parameters specified are controlled in 

the ‘‘catch all’’ paragraph .x, which 

applies to parts, components, 

accessories and attachments specially 

designed for commodities in ECCN 

9A610 or USML Category VIII that are 

not elsewhere specified. The addition of 

these notes would not be a substantive 

change. 

This rule would make several changes 

to paragraph .y of ECCN 9A610. 

Paragraph .y.2, which currently applies 

to cockpit analog gauges and indicators, 

would apply to such gauges and 

indicators wherever they are located on 

the aircraft. Paragraph .y.8 would apply 

to all types of fluid filters and filter 

assemblies—not just hydraulic, oil and 

fuel system filters and filter assemblies. 

Paragraph .y.10 would be expanded to 

apply to fluid hoses, straight and unbent 

lines, fittings, couplings, clamps and 

brackets. Paragraph .y.15 would be 

expanded to cover mirrors whether 

located in the cockpit or cabin instead 

of just the cockpit as is now the case. 

Paragraph .y.20 would be made more 

precise to cover underwater locator 

beacons instead of underwater beacons 

as the text reads now. There are many 

types of underwater beacons. However, 

the underwater beacons installed on 

aircraft generally are designed to 

facilitate locating the aircraft if it 

crashes in the water. BIS’s intent is to 

cover only the latter types of beacons. 

The word ‘‘cockpit’’ would be removed 

from paragraph .y.23, making filtered 

and unfiltered panel knobs, indicators, 

switches, buttons, and dials controlled 

by paragraph .y.23 wherever on the 

aircraft they are located. 

Paragraphs .y.31 and .y.32 would be 

added to cover identification plates and 

fluid manifolds, respectively. 

Changes to ECCN 9A619 

This rule would make three additions 

to the ‘‘Related Controls’’ paragraph. 

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The first would state explicitly the 

historical practice of controlling 501– 

D22 gas turbine engines in ECCN 

9A991.d, which is the classification that 

has been used for many years. The 

second would add a reference to USML 

Category XIX(f) to alert readers that 

some aircraft parts and components are 

enumerated in that paragraph. Finally, a 

note would be added reminding readers 

that the commodities enumerated in 

paragraph .y are subject to the controls 

in that paragraph rather than the 

broader controls elsewhere in this 

ECCN. 

Paragraph .y.3 would be expanded to 

apply to fluid hoses, straight and unbent 

lines, fittings, couplings, clamps and 

brackets, instead of only fuel lines and 

hoses, as is now the case. 

Paragraph .y.4 would be expanded to 

cover fluid filters and filter assemblies, 

instead of only fuel and oil filters, as is 

now the case. 

Paragraph .y.5 would be revised to 

remove ‘‘V-band, cushion, broomstick, 

hinged, and loop clamps’’ from 

paragraph .y.5, because they would be 

subsumed in the reference to ‘‘clamps’’ 

in paragraph .y.3, and add check valves 

for hydraulic and pneumatic systems in 

its place. Such valves for aircraft are 

covered in ECCN 9A610.y.4. Controlling 

them under a .y paragraph when used 

in gas turbine engines adds consistency, 

particularly with respect to check valves 

used in aircraft gas turbine engines. 

The existing text of paragraph .y.8— 

air, fuel and oil manifolds—would be 

changed to ‘‘fluid manifolds.’’ 

Changes to ECCN 9C610 

ECCN 9C610 would be revised by 

adding references to USML Category 

VIII in both the heading and in 

paragraph .a, to make clear that 

materials specially designed for 

commodities enumerated or otherwise 

described in that category are controlled 

in ECCN 9C610. 

Changes to ECCN 9C619 

ECCN 9C619 would be revised by 

adding references to USML Category 

XIX in both the heading and in 

paragraph .a, to make clear that 

materials specially designed for 

commodities enumerated or otherwise 

described in that category are controlled 

in ECCN 9C619. 

Change to ECCN 9E619 

The related controls paragraph in 

ECCN 9E619 would be amended by 

removing the sentence that reads 

‘‘Technology described in ECCN 9E003 

is controlled by that ECCN.’’ Although 

true, the placement of the sentence in a 

600 series ECCN could mislead readers 

into thinking that the order of review 

does not apply in this instance. 

Export Administration Act 

Since August 21, 2001, the Export 

Administration Act of 1979, as 

amended, has been in lapse. However, 

the President, through Executive Order 

13222 of August 17, 2001, 3 CFR, 2001 

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

Executive Order 13637 of March 8, 

2013, 78 FR 16129 (March 13, 2013), 

and as extended by the Notice of August 

7, 2015, 80 FR 48233 (August 11, 2015) 

has continued the EAR in effect under 

the International Emergency Economic 

Powers Act. BIS continues to carry out 

the provisions of the Export 

Administration Act, as appropriate and 

to the extent permitted by law, pursuant 

to Executive Order 13222 as amended 

by Executive Order 13637. 

Rulemaking Requirements 

1. Executive Orders 13563 and 12866 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

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,’’ although 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 one approved 

collection: Simplified Network 

Application Processing + System 

(control number 0694–0088), which 

includes, among other things, license 

applications. This collection carries an 

annual burden hour estimate of 31,833 

hours. BIS believes that this proposed 

rule, if enacted in final form, will not 

materially affect the total number of 

burden hours. This proposed rule would 

make certain aircraft and parts, 

components, accessories and 

attachments that currently are subject to 

the ITAR subject to the EAR. To the 

extent that this change results in an 

increase in the number of export license 

applications submitted to BIS, there is 

likely to be a corresponding reduction 

in the number of license applications 

submitted to the Department of State, 

Directorate of Defense Trade Controls. 

This proposed rule also would require 

a license to only eight destinations for 

some aircraft and engine parts and 

components that currently require a 

license to all destinations other than 

Canada. To the extent that this affects 

the annual burden hours associated 

with this collection, the effect is likely 

to be a reduction in burden hours. Send 

comments regarding this burden 

estimate or any other aspect of this 

collections of information, including 

suggestions for reducing the burden, to 

Jasmeet K. Seehra, Office of 

Management and Budget, by email at 

jseehra@omb.eop.gov or by fax to (202) 

395–7285 and to William Arvin, BIS, at 

william.arvin@bis.doc.gov. 

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 

(or his or her designee) 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 Regulation, 

Department of Commerce submitted a 

memorandum to the Chief Counsel for 

Advocacy, Small Business 

Administration certifying that this 

proposed rule will not have a significant 

impact on a substantial number of small 

entities. 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 

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6794 Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Proposed Rules 

rule, it acknowledges that this rule 

would affect some unknown number. 

Economic Impact 

This proposed rule is part of a review 

of rules promulgated as part of the 

Export Control Reform Initiative to 

assess whether rules for transferring 

items from the United States are clear, 

workable and do not inadvertently 

control on the USML or in 600 series 

ECCNs items in normal commercial use. 

Consistent with the goals of that review, 

this proposed rule would reduce the 

level of control on some items and 

clarify the control status of other items. 

It does not impose any new export or 

reexport license requirements. 

Several proposed changes would 

reduce the level of control on some 

minor parts and components such as 

check valves, fluid manifolds, 

identification plates, analog gauges and 

mirrors used on aircraft so that they will 

require a license only to eight countries 

rather than all destinations other than 

Canada as they do currently. 

Other proposed changes would clarify 

that certain aircraft and parts, 

components, accessories and 

attachments that historically have been 

subject to the EAR, but that, under rules 

published by BIS and the Department of 

State as part of the Export Control 

Reform Initiative, were added to the 

International Traffic in Arms 

Regulations would again be subject to 

the EAR. 

The remaining changes would 

provide clarifying text or additional 

cross references that would not change 

any requirements that apply to any 

person under the regulations. 

Changing the jurisdictional status of 

an item from the USML to the CCL 

would reduce the burden on small 

entities (and other entities as well) 

through simpler license application 

procedures, and reduced (or eliminated) 

registration fees. In addition, small 

entities would be able to take advantage 

of de minimis treatment under the EAR 

for all items that this rule would transfer 

from the USML to the CCL, provided 

those items meet the applicable de 

minimis threshold level. In practice, the 

greatest impact of this rule on small 

entities would likely be reduced 

administrative costs and reduced delay 

for exports of items that are now on the 

USML but would become subject to the 

EAR. 

Under the USML licensing procedure, 

an applicant must include a purchase 

order or contract with its application. 

There is no such requirement under the 

CCL licensing procedure. This 

difference gives the CCL applicant at 

least two advantages. First, the 

applicant has a way of determining 

whether the U.S. Government will 

authorize the transaction before it enters 

into potentially lengthy, complex and 

expensive sales presentations or 

contract negotiations. Under the USML 

licensing procedure, the applicant will 

need to caveat all sales presentations 

with a reference to the need for 

government approval and will more 

likely have to engage in substantial 

effort and expense with the risk that the 

government might reject the application. 

Second, a CCL license applicant need 

not limit its application to the quantity 

or value of one purchase order or 

contract. It may apply for a license to 

cover all of its expected exports or 

reexports to a particular consignee over 

the life of a license, reducing the total 

number of licenses for which the 

applicant must apply. 

In addition, many applicants 

exporting or reexporting items that this 

rule would transfer from the USML to 

the CCL would realize cost savings 

through the elimination of some or all 

registration fees currently assessed 

under the ITAR. Registration fees for 

manufacturers and exporters of articles 

on the USML start at $2,250 per year, 

increase to $2,750 for organizations 

applying for one to ten licenses per year 

and further increase to $2,750 plus $250 

per license application (subject to a 

maximum of three percent of total 

application value) for those who need to 

apply for more than ten licenses per 

year. There are no registration or 

application processing fees for 

applications to export items currently 

listed on the CCL. Once the items that 

are the subject to this rulemaking are 

removed from the USML and added to 

the CCL, entities currently applying for 

licenses from the Department of State 

would find their registration fees 

reduced if the number of USML licenses 

those entities need declines. If an 

entity’s entire product line is moved to 

the CCL, then its ITAR registration and 

registration fee requirement would be 

eliminated. 

Finally, de minimis treatment under 

the EAR would become available for all 

items that this rule would transfer from 

the USML to the CCL. Items subject to 

the ITAR remain subject to the ITAR 

when they are incorporated abroad into 

a foreign-made product regardless of the 

percentage of U.S. content in that 

foreign-made product. This proposed 

rule would apply that same principle to 

‘‘600 series’’ items only if the foreign 

made item is being exported to a 

country that is subject to a United States 

arms embargo. In all other cases, 

foreign-made products that incorporate 

items that this rule would move to the 

CCL would be subject to the EAR only 

if their total controlled U.S.-origin 

content exceeded 25 percent. Because 

including small amounts of U.S.-origin 

content would not subject foreign-made 

products to the EAR, foreign 

manufacturers would have less 

incentive to avoid such U.S.-origin parts 

and components, a development that 

potentially would mean greater sales for 

U.S. suppliers, including small entities. 

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 

reduction in the number of transactions 

that would require a license, simpler 

export license applications, reduced or 

eliminated registration fees, and 

application of a de minimis threshold 

for foreign-made items incorporating 

U.S.-origin parts and components, 

which would reduce the incentive for 

foreign buyers to design out or avoid 

U.S.-origin content. 

For these reasons, the Chief Counsel 

for Regulation 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 770 

Exports. 

15 CFR Part 774 

Exports, Reporting and recordkeeping 

requirements. 

Accordingly, the Export 

Administration Regulations, 15 CFR 

parts 730—774 are proposed to be 

amended as follows: 

PART 770—[AMENDED] 

■ 1. The authority citation for 15 CFR 

part 770 continues to read as follows: 

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

U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 

3 CFR, 2001 Comp., p. 783; Notice of August 

7, 2015, 80 FR 48233 (August 11, 2015). 

■ 2. Section 770.2 is amended by adding 

paragraph (n) to read as follows: 

§ 770.2 Item interpretations. 

* * * * * 

(n) Interpretation 14: Unfinished ‘‘600 

series’’ commodities. Forgings, castings, 

and other unfinished products, such as 

extrusions and machined bodies, that 

have reached a stage in manufacturing 

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where they are clearly identifiable by 

mechanical properties, material 

composition, geometry, or function as 

commodities controlled by any Product 

Group A (‘‘End Items,’’ ‘‘Equipment,’’ 

‘‘Accessories,’’ ‘‘Attachments,’’ ‘‘Parts,’’ 

‘‘Components’’ and ‘‘Systems’’) ‘‘600 

series’’ ECCN are controlled in that ‘‘600 

series’’ ECCN. 

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 7, 2015, 80 

FR 48233 (August 11, 2015). 

Supplement No. 1 to Part 774—The 

Commerce Control List 

* * * * * 

ECCN 0A604 [Amended] 

■ 4. In ECCN 0A604, remove Note 1 to 

0A604.x and redesignate Note 2 to 

0A604.x as Note to 0A604.x. 

ECCN 0A614 [Amended] 

■ 5. In ECCN 0A614, remove Note 3 to 

0A614. 

ECCN 3A611 [Amended] 

■ 6. In ECCN 3A611, remove Note 3 to 

0A611.x. 

ECCN 9A604 [Amended] 

■ 7. In ECCN 9A604, remove Note 1 to 

9A604.x and redesignate Note 2 to 

9A604.x as Note to 9A604.x. 

■ 8. In ECCN 9A610, revise the 

‘‘Control(s)’’ table in the ‘‘License 

Requirements’’ section and the ‘‘List of 

Items Controlled’’ section to read as 

follows: 

9A610 Military aircraft and related 

commodities, other than those 

enumerated in 9A991.a (see List of Items 

Controlled) 

License Requirements 

* * * * * 

Control(s) 

Country Chart (See 

Supp. No. 1 to part 

738) 

NS applies to entire 

entry except: 

9A610.b; parts and 

components controlled in 9A610.x if 

being exported or reexported for use in 

an aircraft controlled 

in 9A610.b; and 

9A610.y.

NS Column 1 

RS applies to entire 

entry except: 

9A610.b; parts and 

components controlled in 9A610.x if 

being exported or reexported for use in 

an aircraft controlled 

in 9A610.b; and 

9A610.y.

RS Column 1 

MT applies to 9A610.t, 

.u, .v, and .w.

MT Column 1 

AT applies to entire 

entry.

AT Column 1 

UN applies to entire 

entry except 9A610.y.

See § 746.1(b) for 

UN controls 

* * * * * 

List of Items Controlled 

Related Controls: (1) Military aircraft and 

related articles that are enumerated in 

USML Category VIII, and technical data 

(including software) directly related 

thereto, are subject to the ITAR. (2) See 

ECCN 0A919 for controls on foreign-made 

‘‘military commodities’’ that incorporate 

more than a de minimis amount of U.S.- 

origin ‘‘600 series’’ controlled content. (3) 

See USML Category XIX and ECCN 9A619 

for controls on military aircraft engines and 

related items. 

Related Definitions: N/A 

Items: a. ‘Military Aircraft’ ‘‘specially 

designed’’ for a military use that are not 

enumerated in USML paragraph VIII(a). 

Note 1: For purposes of paragraph .a the 

term ‘military aircraft’ means any aircraft 

‘‘specially designed’’ for a military use that 

are not enumerated in USML paragraph 

VIII(a). The term includes: trainer aircraft; 

cargo aircraft; utility fixed wing aircraft; 

military helicopters; observation aircraft; 

military non-expansive balloons and other 

lighter than air aircraft; and unarmed military 

aircraft, regardless of origin or designation. 

Aircraft with modifications made to 

incorporate safety of flight features or other 

FAA or NTSB modifications such as 

transponders and air data recorders are 

‘‘unmodified’’ for the purposes of this 

paragraph .a. 

Note 2: 9A610.a does not control ‘military 

aircraft’ that: 

a. Were first manufactured before 1946; 

b. Do not incorporate defense articles 

enumerated or otherwise described on the 

U.S. Munitions List, unless the items are 

required to meet safety or airworthiness 

standards of a Wassenaar Arrangement 

Participating State; and 

c. Do not incorporate weapons enumerated 

or otherwise described on the U.S. Munitions 

List, unless inoperable and incapable of 

being returned to operation. 

b. L100 aircraft manufactured prior to 

2013. 

c.–d. [Reserved] 

e. Mobile aircraft arresting and engagement 

systems for aircraft controlled by either 

USML Category VIII(a) or ECCN 9A610.a 

f. Pressure refueling equipment and other 

ground equipment designed to facilitate 

operations in confined areas, where such 

equipment is ‘‘specially designed’’ for aircraft 

controlled by either USML paragraph VIII(a) 

or ECCN 9A610.a. 

g. Aircrew life support equipment, aircrew 

safety equipment and other devices for 

emergency escape from aircraft controlled by 

either USML paragraph VIII(a) or ECCN 

9A610.a. 

h. Parachutes, paragliders, complete 

parachute canopies, harnesses, platforms, 

electronic release mechanisms ‘‘specially 

designed’’ for use with aircraft controlled by 

either USML paragraph VIII(a) or ECCN 

9A610.a, and ‘‘equipment’’ ‘‘specially 

designed’’ for military high altitude 

parachutists, such as suits, special helmets, 

breathing systems, and navigation 

equipment. 

i. Controlled opening equipment or 

automatic piloting systems, designed for 

parachuted loads. 

j. Ground effect machines (GEMS), 

including surface effect machines and air 

cushion vehicles, ‘‘specially designed’’ for 

use by a military. 

k. through s. [Reserved] 

t. Composite structures, laminates and 

manufactures thereof ‘‘specially designed’’ 

for unmanned aerial vehicles controlled 

under USML Category VIII(a) with a range 

equal to or greater than 300 km. 

Note to paragraph .t. Composite structures, 

laminates and manufactures thereof 

‘‘specially designed’’ for unmanned aerial 

vehicles controlled under USML Category 

VIII(a) with a maximum range less than 300 

km are controlled in paragraph .x of this 

entry. 

u. Apparatus and devices ‘‘specially 

designed’’ for the handling, control, 

activation and non-ship-based launching of 

UAVs or drones controlled by either USML 

paragraph VIII(a) or ECCN 9A610.a, and 

capable of a range equal to or greater than 

300 km. 

Note to paragraph .u. Apparatus and 

devices ‘‘specially designed’’ for the 

handling, control, activation and non-shipbased launching of UAVs or drones 

controlled by either USML paragraph VIII(a) 

or ECCN 9A610.a with a maximum range less 

than 300 km are controlled in paragraph .x 

of this entry. 

v. Radar altimeters designed or modified 

for use in UAVs or drones controlled by 

either USML paragraph VIII(a) or ECCN 

9A610.a., and capable of delivering at least 

500 kilograms payload to a range of at least 

300 km. 

Note to paragraph .v. Radar altimeters 

designed or modified for use in UAVs or 

drones controlled by either USML paragraph 

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6796 Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Proposed Rules 

VIII(a) or ECCN 9A610.a. that are not capable 

of delivering at least 500 kilograms payload 

to a range of at least 300 km are controlled 

in paragraph .x of this entry. 

w. Hydraulic, mechanical, electro-optical, 

or electromechanical flight control systems 

(including fly-by-wire systems) and attitude 

control equipment designed or modified for 

UAVs or drones controlled by either USML 

paragraph VIII(a) or ECCN 9A610.a., and 

capable of delivering at least 500 kilograms 

payload to a range of at least 300 km. 

Note to paragraph .w. Hydraulic, 

mechanical, electro-optical, or 

electromechanical flight control systems 

(including fly-by-wire systems) and attitude 

control equipment designed or modified for 

UAVs or drones controlled by either USML 

paragraph VIII(a) or ECCN 9A610.a., not 

capable of delivering at least 500 kilograms 

payload to a range of at least 300 km are 

controlled in paragraph .x of this entry. 

x. ‘‘Parts,’’ ‘‘components,’’ ‘‘accessories,’’ 

and ‘‘attachments’’ that are ‘‘specially 

designed’’ for a commodity enumerated or 

otherwise described in ECCN 9A610 (except 

for 9A610.y) or a defense article enumerated 

or otherwise described in USML Category 

VIII and not elsewhere specified on the 

USML, in 9A610.y, or 3A611.y. 

y. Specific ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ ‘‘specially 

designed’’ for a commodity subject to control 

in this entry, ECCN 9A619, or for a defense 

article in USML Category VIII and not 

elsewhere specified in the USML or the CCL, 

and other aircraft commodities ‘‘specially 

designed’’ for a military use, as follows, and 

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

‘‘attachments’’ ‘‘specially designed’’ therefor: 

y.1. Aircraft tires; 

y.2. Analog gauges and indicators; 

y.3. Audio selector panels; 

y.4. Check valves for hydraulic and 

pneumatic systems; 

y.5. Crew rest equipment; 

y.6. Ejection seat mounted survival aids; 

y.7. Energy dissipating pads for cargo (for 

pads made from paper or cardboard); 

y.8. Fluid filters and filter assemblies; 

y.9. Galleys; 

y.10. Fluid hoses, straight and unbent 

lines, fittings, couplings, clamps and 

brackets; 

y.11. Lavatories; 

y.12. Life rafts; 

y.13. Magnetic compass, magnetic azimuth 

detector; 

y.14. Medical litter provisions; 

y.15. Cockpit or cabin mirrors; 

y.16. Passenger seats including palletized 

seats; 

y.17. Potable water storage systems; 

y.18. Public address (PA) systems; 

y.19. Steel brake wear pads (does not 

include sintered mix or carbon/carbon 

materials); 

y.20. Underwater locator beacons; 

y.21. Urine collection bags/pads/cups/

pumps; 

y.22. Windshield washer and wiper 

systems; 

y.23. Filtered and unfiltered panel knobs, 

indicators, switches, buttons, and dials; 

y.24. Lead-acid and Nickel-Cadmium 

batteries; 

y.25. Propellers, propeller systems, and 

propeller blades used with reciprocating 

engines; 

y.26. Fire extinguishers; 

y.27. Flame and smoke/CO2 detectors; 

y.28. Map cases; 

y.29. ‘Military Aircraft’ that were first 

manufactured from 1946 to 1955 that do not 

incorporate defense articles enumerated or 

otherwise described on the U.S. Munitions 

List, unless the items are required to meet 

safety or airworthiness standards of a 

Wassenaar Arrangement Participating State; 

and do not incorporate weapons enumerated 

or otherwise described on the U.S. Munitions 

List, unless inoperable and incapable of 

being returned to operation; 

y.30. ‘‘Parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments,’’ other than 

electronic items or navigation equipment, for 

use in or with a commodity controlled by 

ECCN 9A610.h; 

y.31. Identification plates; and 

y.32. Fluid manifolds. 

■ 9. In ECCN 9A619, the List of Items 

Controlled section is amended by: 

■ a. Revising the ‘‘Related Controls’’ 

paragraph; 

■ b. Removing the note that 

immediately follows paragraph .e in the 

‘‘Items’’ paragraph; and 

■ c. Revising paragraph .y in the 

‘‘Items’’ paragraph. The revisions read 

as follows: 

9A619 Military gas turbine engines 

and related commodities (see List 

of Items Controlled) 

* * * * * 

List of Items Controlled 

Related Controls: (1) Military gas 

turbine engines and related articles that 

are enumerated or otherwise described 

in USML Category XIX, and technical 

data (including software) directly 

related thereto, are subject to the 

jurisdiction of the International Traffic 

in Arms Regulations (ITAR). (2) Gas 

turbine engines designated 501–D22 are 

controlled in ECCN 9A991.d regardless 

of the aircraft type into which they will 

be installed. (3) See ECCN 0A919 for 

foreign-made ‘‘military commodities’’ 

that incorporate more than a de minimis 

amount of U.S.-origin ‘‘600 series’’ 

controlled content. (4) ‘‘Parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ specified in USML 

Category XIX(f) are subject to the 

controls of that paragraph. (5) ‘‘Parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ specified in ECCN 

9A619.y are subject to the controls of 

that paragraph. 

* * * * * 

Items: 

* * * * * 

y. Specific ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ 

‘‘specially designed’’ for a commodity 

subject to control in this entry, ECCN 

9A610, or for a defense article in USML 

Category XIX and not elsewhere 

specified on the USML or in the CCL, 

and other commodities, as follows, and 

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

and ‘‘attachments’’ ‘‘specially designed’’ 

therefor: 

y.1. Oil tank and reservoirs; 

y.2. Oil lines and tubes; 

y.3. Fluid hoses, straight and unbent 

lines, fittings, couplings, clamps and 

brackets; 

y.4. Fluid filters and filter assemblies; 

y.5. Check valves for hydraulic and 

pneumatic systems; 

y.6. Shims; 

y.7. Identification plates; 

y.8. Fluid manifolds. 

ECCN 9A620 [Amended] 

■ 10. In ECCN 9A620, remove the note 

to 9A920.b that immediately follows 

paragraph .x. 

■ 11. In ECCN 9C610, revise the header 

and the ‘‘Items’’ paragraph of the ‘‘List 

of Items Controlled’’ section to read as 

follows: 

9C610 Materials ‘‘specially designed’’ 

for commodities controlled by 

USML Category VIII or ECCN 

9A610 and not elsewhere specified 

in the CCL or the USML (see List of 

Items Controlled) 

* * * * * 

List of Items Controlled 

* * * * * 

Items: a. Materials not elsewhere 

specified in the USML or the CCL and 

‘‘specially designed’’ for commodities 

enumerated or otherwise described in 

USML Category VIII or ECCN 9A610 

(except 9A610.y). 

Note 1: Materials enumerated elsewhere in 

the CCL, such as in a CCL Category 1 ECCN, 

are controlled pursuant to controls of the 

applicable ECCN. 

Note 2: Materials ‘‘specially designed’’ for 

both aircraft enumerated in USML Category 

VIII and aircraft enumerated in ECCN 9A610 

are subject to the controls of this ECCN. 

b. [RESERVED] 

■ 12. In ECCN 9C619 revise the header 

and the ‘‘Items’’ paragraph of the ‘‘List 

of Items Controlled’’ section to read as 

follows: 

9C619 Materials ‘‘specially designed’’ 

for commodities controlled by 

USML Category XIX or ECCN 

9A619 and not elsewhere specified 

in the CCL or on the USML (see List 

of Items Controlled) 

* * * * * 

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Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Proposed Rules 6797 

List of Items Controlled 

* * * * * 

Items: 

a. Materials not elsewhere specified in 

the CCL or on the USML and ‘‘specially 

designed’’ for commodities enumerated 

or otherwise described in USML 

Category XIX or ECCN 9A619 (except 

9A619.y). 

Note 1: Materials enumerated elsewhere in 

the CCL, such as in a CCL Category 1 ECCN, 

are controlled pursuant to the controls of the 

applicable ECCN. 

Note 2: Materials ‘‘specially designed’’ for 

both an engine enumerated in USML 

Category XIX and an engine enumerated in 

ECCN 9A619 are subject to the controls of 

this ECCN 9C619. 

b. [Reserved] 

■ 13. In ECCN 9E619, revise the 

‘‘Related Controls’’ paragraph in the 

‘‘List of Items Controlled’’ section to 

read as follows: 

9E619 ‘‘Technology’’ ‘‘required’’ for 

the ‘‘development,’’ ‘‘production,’’ 

operation, installation, 

maintenance, repair, overhaul, or 

refurbishing of military gas turbine 

engines and related commodities 

controlled by 9A619, equipment 

controlled by 9B619, materials 

controlled by 9C619, or software 

controlled by 9D619 (see List of 

Items Controlled) 

* * * * * 

List of Items Controlled 

Related Controls: Technical data 

directly related to articles enumerated 

or otherwise described in USML 

Category XIX are subject to the control 

of USML Category XIX(g). 

* * * * * 

Dated: January 29, 2016. 

Kevin J. Wolf, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2016–02591 Filed 2–8–16; 8:45 am] 

BILLING CODE 3510–33–P 

DEPARTMENT OF STATE 

22 CFR Part 121 

[Public Notice: 9395] 

RIN 1400–AD89 

Amendment to the International Traffic 

in Arms Regulations: U.S. Munitions 

List Categories VIII and XIX 

AGENCY: Department of State. 

ACTION: Proposed rule. 

SUMMARY: As part of the President’s 

Export Control Reform (ECR) effort, the 

Department of State proposes to amend 

the International Traffic in Arms 

Regulations (ITAR) to revise Categories 

VIII (aircraft and related articles) and 

XIX (gas turbine engines and associated 

equipment) of the U.S. Munitions List 

(USML) to describe more precisely the 

articles warranting control on the 

USML. The revisions contained in this 

rule are part of the Department of State’s 

retrospective plan under E.O. 13563. 

DATES: The Department of State will 

accept comments on this proposed rule 

until March 25, 2016. 

ADDRESSES: Interested parties may 

submit comments within 45 days of the 

date of publication by one of the 

following methods: 

• Email: 

DDTCPublicComments@state.gov with 

the subject line, ‘‘ITAR Amendment— 

Categories VIII and XIX.’’ 

• Internet: At www.regulations.gov, 

search for this notice by using this rule’s 

RIN (1400–AD89). 

Comments received after that date 

will be considered if feasible, but 

consideration cannot be assured. Those 

submitting comments should not 

include any personally identifying 

information they do not wish to be 

made public or information for which a 

claim of confidentiality is asserted, 

because those comments and/or 

transmittal emails will be made 

available for public inspection and 

copying after the close of the comment 

period via the Directorate of Defense 

Trade Controls Web site at 

www.pmddtc.state.gov. Parties who 

wish to comment anonymously may do 

so by submitting their comments via 

www.regulations.gov, leaving the fields 

that would identify the commenter 

blank and including no identifying 

information in the comment itself. 

Comments submitted via 

www.regulations.gov are immediately 

available for public inspection. 

FOR FURTHER INFORMATION CONTACT: Mr. 

C. Edward Peartree, Director, Office of 

Defense Trade Controls Policy, 

Department of State, telephone (202) 

663–2792; email 

DDTCPublicComments@state.gov. 

ATTN: ITAR Amendment—USML 

Categories VIII and XIX. 

SUPPLEMENTARY INFORMATION: The 

Directorate of Defense Trade Controls 

(DDTC), U.S. Department of State, 

administers the International Traffic in 

Arms Regulations (ITAR) (22 CFR parts 

120–130). The items subject to the 

jurisdiction of the ITAR, i.e., ‘‘defense 

articles,’’ are identified on the ITAR’s 

U.S. Munitions List (USML) (22 CFR 

121.1). With few exceptions, items not 

subject to the export control jurisdiction 

of the ITAR are subject to the 

jurisdiction of the Export 

Administration Regulations (‘‘EAR,’’ 15 

CFR parts 730–774, which includes the 

Commerce Control List (CCL) in 

Supplement No. 1 to Part 774), 

administered by the Bureau of Industry 

and Security (BIS), U.S. Department of 

Commerce. Both the ITAR and the EAR 

impose license requirements on exports 

and reexports. Items not subject to the 

ITAR or to the exclusive licensing 

jurisdiction of any other set of 

regulations are subject to the EAR. 

USML List Review 

On March 2, 2015, the Department 

published a Notice of Inquiry requesting 

public comment on USML Categories 

VIII and XIX (see 80 FR 11314). This 

Notice of Inquiry initiated a review of 

these categories to ensure that they are 

clear, do not inadvertently control items 

in normal commercial use, account for 

technological developments, and 

properly implement the national 

security and foreign policy objectives of 

the reform effort. The Department will 

similarly review each of the various 

USML categories that have been revised 

in the context of the ECR initiative. 

In response to this Notice of Inquiry, 

the Department received 25 comments 

from the public. These comments 

offered proposals for modifications to 

the phrasing of regulatory text in USML 

Category VIII and Category XIX. The 

public comments were reviewed and 

considered by the Department and other 

agencies. Where the recommended 

changes added to the clarity of the 

regulation and were consistent with 

ECR objectives, the Department 

accepted them. 

All references to the USML in this 

rule are to the list of defense articles 

that are controlled for the purpose of 

export or temporary import pursuant to 

the ITAR, and not to the defense articles 

on the USML that are controlled by the 

Bureau of Alcohol, Tobacco, Firearms 

and Explosives (ATF) for the purpose of 

permanent import under its regulations 

(see 27 CFR part 447). Pursuant to 

§ 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. For the 

sake of clarity, the list of defense articles 

controlled by ATF for the purpose of 

permanent import is the United States 

Munitions Import List (USMIL). The 

transfer of defense articles from the 

ITAR’s USML to the EAR’s CCL for the 

purpose of export control does not affect 

the list of defense articles controlled on 

the USMIL under the AECA for the 

purpose of permanent import. 

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