[Federal Register Volume 81, Number 26 (Tuesday, February 9, 2016)]
[Proposed Rules]
[Pages 6791-6797]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-02591]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

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.

========================================================================


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

[[Page 6791]]



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:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Search for this rule using its regulations.gov docket number: BIS-2016-
0009.
    <bullet> By email directly to <a href="/cdn-cgi/l/email-protection#730306111f1a10101c1e1e161d070033111a005d171c105d141c05"><span class="__cf_email__" data-cfemail="b3c3c6d1dfdad0d0dcdeded6ddc7c0f3d1dac09dd7dcd09dd4dcc5">[email protected]</span></a>. Include 
RIN 0694-AG76 in the subject line.
    <bullet> 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-plan-retrospective-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 
<a href="/cdn-cgi/l/email-protection#b0e4d8dfddd1c39ef4d5f6d5d5f0d2d9c39ed4dfd39ed7dfc6"><span class="__cf_email__" data-cfemail="36625e595b574518725370535376545f451852595518515940">[email protected]</span></a> or <a href="/cdn-cgi/l/email-protection#440e21222236213d6a08212d303e04262d376a202b276a232b32"><span class="__cf_email__" data-cfemail="0e446b68687c6b7720426b677a744e6c677d206a616d20696178">[email protected]</span></a>.

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 Sec.  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

[[Page 6792]]

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 Sec.  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.

[[Page 6793]]

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 <a href="/cdn-cgi/l/email-protection#d1bba2b4b4b9a3b091bebcb3ffb4bea1ffb6bea7"><span class="__cf_email__" data-cfemail="cea4bdababa6bcaf8ea1a3ace0aba1bee0a9a1b8">[email protected]</span></a> or by fax to 
(202) 395-7285 and to William Arvin, BIS, at <a href="/cdn-cgi/l/email-protection#04736d68686d65692a6576726d6a44666d772a606b672a636b72"><span class="__cf_email__" data-cfemail="56213f3a3a3f373b783724203f3816343f257832393578313920">[email protected]</span></a>.
    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

[[Page 6794]]

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]

0
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).

0
2. Section 770.2 is amended by adding paragraph (n) to read as follows:


Sec.  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

[[Page 6795]]

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]

0
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]

0
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]

0
5. In ECCN 0A614, remove Note 3 to 0A614.


ECCN  3A611 [Amended]

0
6. In ECCN 3A611, remove Note 3 to 0A611.x.


ECCN  9A604 [Amended]

0
7. In ECCN 9A604, remove Note 1 to 9A604.x and redesignate Note 2 to 
9A604.x as Note to 9A604.x.
0
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

* * * * *

 
                                            Country Chart (See Supp. No.
                Control(s)                         1 to part 738)
 
NS applies to entire entry except:          NS Column 1
 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 applies to entire entry except:          RS Column 1
 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.
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 Sec.   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-ship-based 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

[[Page 6796]]

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/CO<INF>2</INF> 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.

0
9. In ECCN 9A619, the List of Items Controlled section is amended by:
0
a. Revising the ``Related Controls'' paragraph;
0
b. Removing the note that immediately follows paragraph .e in the 
``Items'' paragraph; and
0
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]

0
10. In ECCN 9A620, remove the note to 9A920.b that immediately follows 
paragraph .x.
0
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]

0
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)
* * * * *

[[Page 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]

0
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


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