Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 50511 

Class E airspace designations are 

published in paragraph 6005, 

respectively, of FAA Order 7400.11B, 

dated August 2, 2017, and effective 

September 15, 2017, which is 

incorporated by reference in 14 CFR 

71.1. The Class E airspace designations 

listed in this document will be 

published subsequently in the Order. 

Correction to Final Rule 

Accordingly, pursuant to the 

authority delegated to me, in the 

Federal Register of August 3, 2017 (82 

FR 40692) FR Doc. 2017–18107, 

Amendment of Class E Airspace; 

Oskaloosa, IA, is corrected as follows: 

§ 71.1 [Amended] 

ACE IA E5 Oskaloosa, IA [Corrected] 

■ On page 40694 column 1, on lines 11 

and 12, remove the following text: 

‘‘excluding that airspace within the 

Ottumwa, IA Class E airspace area.’’ 

Issued in Fort Worth, Texas on October 17, 

2017. 

Christopher L. Southerland, 

Acting Manager, Operations Support Group, 

ATO Central Service Center. 

[FR Doc. 2017–23247 Filed 10–31–17; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Part 740 

[Docket No. 160303181–6181–01] 

RIN 0694–AG80 

Clarifications to the Export 

Administration Regulations for the Use 

of License Exceptions 

AGENCY: Bureau of Industry and 

Security, Commerce. 

ACTION: Final rule. 

SUMMARY: This final rule makes 

clarifications to the Export 

Administration Regulations (EAR) to 

provide guidance based on existing 

agency understanding and practice on 

the use of two license exceptions. 

Specifically, this final rule makes three 

clarifications to License Exception 

Governments, International 

Organizations, International Inspections 

under the Chemical Weapons 

Convention, and the International Space 

Station (GOV) and adds five notes, along 

with making other minor clarifications, 

to License Exception Strategic Trade 

Authorization (STA). These revisions 

respond to questions BIS has received 

about the use of these two EAR license 

exceptions and provide the general 

public answers to frequently asked 

questions based on existing agency 

interpretive practice. Therefore, the 

clarifications in this final rule do not 

change the EAR requirements for the 

use of the license exceptions but are 

intended to assist exporters new to the 

EAR. 

DATES: This rule is effective November 

1, 2017. 

FOR FURTHER INFORMATION CONTACT: 

Timothy Mooney, Regulatory Policy 

Division, Bureau of Industry and 

Security, Department of Commerce, 

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

3355, Email: rpd2@bis.doc.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

This final rule revises part 740 of the 

Export Administration Regulations 

(EAR) by clarifying two license 

exceptions based on existing agency 

understanding and practice. To provide 

the general public with guidance on 

using these license exceptions, this final 

rule makes three clarifications to 

License Exception Governments, 

International Organizations, 

International Inspections under the 

Chemical Weapons Convention, and the 

International Space Station (GOV) and 

adds five notes, along with making other 

minor clarifications, to License 

Exception Strategic Trade Authorization 

(STA). These changes are described 

below under sections: (A) Clarifications 

for License Exception GOV and (B) 

Clarifications for License Exception 

STA. 

With these revisions, BIS is not 

changing the EAR requirements for the 

use of these license exceptions. Instead, 

the agency seeks to provide sufficient 

guidance within the EAR to answer 

questions the agency frequently receives 

from the public as to the application of 

the two license exceptions. These 

clarifications should be particularly 

helpful to exporters who are new to the 

EAR, including exporters of items that 

have recently moved to the EAR from 

the International Traffic in Arms 

Regulations (ITAR) as a result of the 

United States Munitions List to the 

Commerce Control List review process. 

(A) Clarifications for License Exception 

GOV 

This final rule revises License 

Exception GOV, § 740.11, to make three 

clarifications. Specifically, this final 

rule revises paragraph (b)(2)(ii); adds a 

new note to paragraph (b)(2)(iii)(C); and 

adds a new note to paragraph (c)(1). 

These clarifications do not change the 

applicability or any other requirements 

of License Exception GOV and are 

limited to providing guidance on how 

BIS interprets these paragraphs of 

License Exception GOV in response to 

questions from the public. 

Paragraph (b)(2)(ii). The final rule 

revises paragraph (b)(2)(ii) of License 

Exception GOV to add two sentences to 

clarify the applicability of the term 

‘contractor support personnel,’ which is 

defined in paragraph (b)(2)(ii) of License 

Exception GOV. BIS has received 

questions regarding the locations where 

‘contractor support personnel’ must 

work and the level of U.S. Government 

supervision needed for personnel to be 

considered ‘contractor support 

personnel.’ The first sentence that this 

final rule adds to paragraph (b)(2)(ii) 

clarifies that ‘contractor support 

personnel’ is limited to those 

individuals who are providing such 

support within a U.S. Government 

owned or operated facility or under the 

direct supervision of a U.S. government 

employee. This final rule adds a 

parenthetical phrase to clarify that a 

U.S. government employee is an 

individual directly employed by the 

U.S. Government. 

As an example of persons directly 

employed who would meet the 

‘contractor support personnel’ 

definition, BIS provides the following: 

A U.S. Government agency plans to 

conduct a study of soy bean cultivation 

in Malaysia and the U.S. Government 

agency team will include three 

‘contractor support personnel’ providing 

scientific support to the U.S. 

Government agency’s study. These three 

‘contractor support personnel’ will work 

at the U.S. Embassy in Malaysia to 

process and analyze agricultural field 

data being gathered by U.S. Government 

personnel as part of a study. These 

individuals meet the definition of 

contractor support personnel in 

paragraph (b)(2)(ii) because they will be 

working within a U.S. Governmentowned and operated facility (a U.S 

embassy) and providing a form of 

support (scientific support) that is 

identified in the term’s definition. 

For an example of persons not 

directly employed who would be 

outside the scope of the ‘contractor 

support personnel’ definition, BIS 

provides the following: A U.S. 

Government agency is evaluating the 

possibility of providing a grant to a 

company in Kenya that seeks financing 

for building three windmills. To 

evaluate the feasibility of providing a 

grant, this U.S. Government agency has 

entered into a contract with a U.S. 

company that provides feasibility 

analysis for windmill locations. To 

conduct the feasibility analysis study, 


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50512 Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 

the contractor will need to have certain 

items exported to it in Kenya. Under 

this example, the contractor, including 

personnel of the contractor, would not 

constitute ‘contractor support 

personnel’ because it does not meet the 

definition of ‘contractor support 

personnel.’ Although it is providing 

scientific analysis for this U.S. 

Government agency under a contract, 

the analysis is not being conducted at a 

U.S. Government facility or being 

conducted under the direct supervision 

of an individual directly employed by 

the U.S. Government agency. 

The second sentence this final rule 

adds to paragraph (b)(2)(ii) clarifies that 

private security contractors are not 

‘contractor support personnel’ for 

purposes of paragraph (b)(2)(ii). This 

new sentence clarifies that although in 

certain cases private security contractors 

may work within a U.S. Government 

owned or operated facility, such 

contractors do not provide 

administrative, managerial, scientific or 

technical support under contract to the 

U.S. Government, as required under the 

definition of ‘contractor support 

personnel.’ 

Note 1 to paragraph (b)(2)(iii)(C). 

Paragraph (b)(2)(iii)(C) of License 

Exception GOV authorizes the 

temporary export, reexport, or transfer 

(in-country) of an item in support of any 

foreign assistance or sales program 

authorized by law and subject to the 

control of the President by other means, 

when the criteria specified in this 

paragraph are met. This final rule adds 

a new note to paragraph (b)(2)(iii)(C) of 

License Exception GOV to clarify how 

BIS interprets the meaning of the term 

‘temporary’ for purposes of this 

paragraph. The new note clarifies that 

within the context of the authorization 

available in paragraph (b)(2)(iii)(C), 

‘temporary’ means that within no more 

than four years from the date of an 

item’s initial export, reexport, or 

transfer (in-country), it must be returned 

to the exporter, reexporter or transferor 

or its disposition otherwise authorized 

(e.g., pursuant to a license or another 

license exception) in accordance with 

the EAR. As a conforming change to this 

new note to paragraph (b)(2)(iii)(C), this 

final rule revises the introductory text of 

paragraph (b)(2)(iii)(C) to add single 

quotes around the term ‘temporary.’ 

Note 1 to paragraph (c)(1). Paragraph 

(c) of License Exception GOV authorizes 

certain exports, reexports, and transfers 

(in-country) to agencies of cooperating 

governments or agencies of the North 

Atlantic Treaty Organization (NATO). 

Paragraph (c)(1) defines ‘Agency of a 

cooperating government’ for purposes of 

this paragraph of License Exception 

GOV. This final rule adds a new note to 

paragraph (c)(1) of License Exception 

GOV to clarify that civil 

intergovernmental organizations in 

which the membership is limited to 

national governments that are 

‘cooperating governments’ are also 

considered ‘cooperating governments’ 

for purposes of paragraph (c)(1). The 

new note provides an example of a civil 

intergovernmental organization, the 

European Space Agency (ESA), which 

BIS has determined to fall within the 

scope of the definition of ‘cooperating 

governments.’ ESA (and other civil 

intergovernmental organizations) are 

considered ‘cooperating governments’ 

because their membership is limited to 

‘cooperating governments’—meaning 

that if an export was made directly to 

any of organization’s national 

government members, License 

Exception GOV would be available. On 

this basis, BIS does not exclude exports, 

reexports and transfers (in-country) 

made to ESA (and any other civil 

intergovernmental organization whose 

members are ‘cooperating governments’) 

from License Exception GOV. The 

purpose of this paragraph (c)(1) is to 

clarify that the fact that two or more 

‘cooperating governments’ are working 

together does not change the policy 

rationale for why the United States 

Government intends to authorize such 

exports, reexports, and transfers (incountry). However, this final rule adds 

a second sentence to the note to 

paragraph (c)(1) to clarify that if the 

membership of the civil 

intergovernmental organization involves 

any national governments or other 

organizations that are not ‘cooperating 

governments,’ such civil 

intergovernmental organizations are not 

considered cooperating governments for 

purposes of paragraph (c)(1), and a third 

sentence to provide three illustrative 

examples of civil intergovernmental 

organizations that are excluded based 

on this criteria. This third sentence also 

clarifies that this exclusion applies even 

when some or all of the ‘cooperating 

governments’ are members of the civil 

intergovernmental organization. This 

final rule provides the European 

Aviation Safety Agency (EASA), the 

United Nations, and the World Bank as 

three examples of civil 

intergovernmental organizations that 

include members that are ‘cooperating 

governments’ along with members that 

are not ‘cooperating governments,’ with 

the inclusion of the latter group 

meaning that these civil 

intergovernmental organizations are not 

within the scope of paragraph (c)(1). 

(B) Clarifications for License Exception 

STA 

This final rule revises License 

Exception STA, § 740.20, to add five 

new clarification notes, along with 

making other minor clarifications. 

Specifically, this final rule adds the 

following notes to License Exception 

STA: Note 1 to paragraph (a) for 

applicability of transfers (in-country) 

under STA; Note 1 to paragraphs (b)(2) 

and (b)(3) for staying within the scope 

of the original authorization; Note 1 to 

paragraph (d)(2) for multiple consignees 

on a single prior consignee statement 

and minor clarifications to the text of 

paragraph (d)(2); and Note 2 to 

paragraph (d)(2) for exclusion for 

government consignees from prior 

consignee statement; and Note 1 to 

paragraph (d)(3) for exclusion for 

intangible exports, reexports or transfers 

(in-country). These new notes, along 

with the other minor clarifications, do 

not change the applicability or any other 

requirements of License Exception STA 

and simply provide guidance on how 

BIS interprets these provisions of 

License Exception STA. These new 

notes are consistent with the agency’s 

responses to questions at numerous 

outreach events and in the Frequently 

Asked Questions (FAQs) available on 

the agency’s Web site. 

Note 1 to paragraph (a) for 

applicability of transfers (in-country) 

under STA. This final rule adds a new 

note to paragraph (a) to License 

Exception STA. This new note provides 

guidance on when License Exception 

STA may be used to authorize transfers 

(in-country) in response to questions 

from the public about its applicability. 

The purpose of this note to paragraph 

(a) is to explain why transfers (incountry) are included in License 

Exception STA and describe how this 

term is applied in the context of this 

license exception. Under the EAR, 

outside of prohibited end uses and end 

users and ‘‘knowing’’ violations, the 

transactions where most transferors will 

need an EAR authorization is when the 

original export, reexport, or transfer (incountry) was authorized under a BIS 

license and the consignee will make a 

transfer (in-country) that goes outside 

the scope of the license. License 

Exception STA would be available to 

authorize such transfers (in-country), 

provided all the applicable 

requirements of License Exception STA 

were met, such as obtaining a prior 

consignee statement from the consignee 

in-country. If the transfer (in-country) 

did not require an authorization, such as 

for exports received under License 

Exception STA, an authorization is not 


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Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 50513 

required for subsequent transfers (incountry), provided no prohibited end 

uses, end-users or ‘‘knowing’’ violations 

were involved in the transfer (incountry). These nuances on the 

application of transfers (in-country) are 

sometimes not well understood because 

some people incorrectly assume that the 

way to determine license requirements 

for exports and reexports is the same 

way to determine license requirements 

for transfers (in-country). The note to 

paragraph (a) also specifies that when a 

transfer (in-country) is not being made 

under STA, then the STA requirements 

do not apply. The note to paragraph (a) 

includes a parenthetical phrase with a 

reference to see the note to paragraphs 

(b)(2) and (b)(3) of License Exception 

STA for requirements specific to staying 

within the scope of the original License 

Exception STA authorization, which is 

described in more detail below. 

Note 1 to paragraphs (b)(2) and (b)(3). 

This final rule adds a new Note 1 to 

paragraphs (b)(2) and (b)(3) to License 

Exception STA. This new note to 

paragraphs (b)(2) and (b)(3) clarifies that 

for ‘‘600 series’’ items authorized under 

License Exception STA, the items must 

be provided to an eligible ultimate end 

user, such as a Country Group A:5 

military, to stay in compliance with the 

original authorization. The new note 

refers to this concept as ‘completing the 

chain,’ which means that regardless of 

how many times the ‘‘600 series’’ item 

is transferred (in-country) or whether 

the ‘‘600 series’’ item is incorporated 

into higher level assemblies or other 

items or not, the ‘‘600 series’’ item must 

ultimately be provided to an eligible 

ultimate end user or be otherwise 

authorized under the EAR. Lastly, the 

new note to paragraphs (b)(2) and (b)(3) 

clarifies that because the other items 

eligible for authorization under License 

Exception STA (i.e., 9x515 and other 

non-600 series ECCNs) do not include 

the ‘‘600 series’’ requirements specific 

to ultimate end user, the ‘completing the 

chain’ concept does not apply to 9x515 

and other non-600 series Export Control 

Classification Numbers (ECCNs) 

authorized under License Exception 

STA. However, the original export, 

reexport, or transfer (in-country) must 

be completed within the terms and 

conditions of the original License 

Exception STA authorization. As noted 

above, this clarification is specific to 

existing EAR requirements; the new 

note to paragraphs (b)(2) and (b)(3) does 

not change any License Exception STA 

requirements but rather provides 

guidance on how these existing EAR 

requirements are applied in the context 

of License Exception STA, in particular 

as it relates to the ‘‘600 series.’’ 

Adding greater specificity to 

paragraph (d)(1). This final rule revises 

paragraph (d)(1) (Requirement to furnish 

Export Control Classification Number) 

of License Exception STA to remove the 

undefined terms ‘‘shipment’’ in four 

places and ‘‘shipped’’ in two places and 

add in their place the defined terms 

‘‘export’’ in paragraph (d)(1)(i) and 

‘‘reexport or transfer (in-country)’’ in 

paragraph (d)(1)(ii). In the context of 

paragraph (d)(1), the requirement to 

furnish the ECCN is intended to apply 

to all exports, reexports, or transfers (incountry) under License Exception STA, 

and is consistent with how the agency 

has interpreted this paragraph. This 

final rule clarifies the intent of this 

paragraph (d)(1) by removing the 

undefined term ‘‘shipment’’ and adding 

in its place defined terms that provide 

greater specificity on the intended scope 

of this paragraph (d)(1). This final rule 

makes similar clarifications as described 

below to paragraphs (d)(2) and (d)(3) to 

improve the clarity of these paragraphs. 

Paragraph (d)(2) for multiple 

consignees on a single prior consignee 

statement. This final rule revises 

paragraph (d)(2) (Prior Consignee 

Statement) of License Exception STA to 

make four clarifications to paragraph 

(d)(2): Adding greater specificity to the 

introductory text as it relates to the 

undefined term ‘‘shipment;’’ adding two 

new notes to paragraph (d)(2); clarifying 

the term ‘description’’ in paragraph 

(d)(2)(i); and making certain terms 

plural in the text. Because of past issues 

with the incorporation of revisions to 

paragraph (d)(2), in particular some of 

the undesignated text included in that 

paragraph, in this final rule BIS is 

revising the entire paragraph to ensure 

the intended revisions are incorporated 

correctly. The clarifications to 

paragraph (d)(2) are described in the 

next four paragraphs. 

Similar to the changes described 

above for paragraph (d)(1), this final rule 

revises the introductory text of 

paragraph (d)(2) to remove the 

undefined term ‘‘shipment’’ in one 

place and the undefined term 

‘‘shipping’’ in another, and add in their 

place the defined terms ‘‘exports, 

reexports, or transfers (in-country).’’ 

This final rule does not remove the 

undefined term ‘‘shipment’’ in the two 

additional instances where the term is 

used in the introductory text of 

paragraph (d)(2), which specifies the 

requirement to maintain a log or other 

record. This is because the requirement 

to maintain a log or other record is not 

intended to apply to intangible (i.e., 

electronic or in an otherwise intangible 

form) exports, reexports, or transfers (incountry). BIS adds a sentence clarifying 

this for purposes of License Exception 

STA in this final rule. BIS has based this 

existing agency practice and 

interpretation on the use of the term 

‘‘shipment’’ when referring to a log or 

other record to mean that the original 

intent of this License Exception STA 

requirement was not to apply the 

requirement to intangible exports, 

reexports, or transfers (in-country). 

Because of the frequency at which 

intangible exports, reexports, or 

transfers (in-country) often occur, it 

would have been impractical to impose 

a log or other record requirement for 

such exports, reexports or transfers (incountry). For example, for a technical 

work team located at a U.S. parent 

company that is collaborating with a 

technical work team in the United 

Kingdom (a Country Group A:5 

Country), there may be dozens or 

hundreds of intangible exports that 

occur during a teleconference or 

telephone call that are authorized under 

License Exception STA. Although the 

party making the intangible export, 

reexport, or transfer (in-country) and the 

party receiving the technology or 

software are responsible for complying 

with the other requirements of License 

Exception STA, which are suitable for 

keeping an intangible export, reexport, 

or transfer (in-country) within the scope 

of License Exception STA, the party 

making the intangible export, reexport, 

or transfer (in-country) is not burdened 

with trying to keep a log or other record, 

the requirement for which was 

appropriate and intended for a tangible 

shipment but was not intended for 

intangible exports, reexports, or 

transfers (in-country). The changes 

included in this rule will make this 

interpretation clearer to the public. This 

new sentence also specifies that an 

exporter, reexporter, or transferor is 

required, prior to making any export, 

reexport or transfer (in-country), 

including those that are intangible, to 

ensure that a prior consignee statement 

has been obtained pursuant to the 

requirements of paragraph (d)(2). This 

final rule also adds a parenthetical 

phrase to include a cross reference to 

Note 1 to paragraph (d)(3), which 

provides additional guidance on 

intangible exports, reexports and 

transfers (in-country) under License 

Exception STA. BIS also has posted on 

the BIS Web site best practices for 

managing intangible exports, reexports, 

and transfers (in-country) under the 

EAR. BIS encourages any party involved 

in intangible exports, reexports, or 


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50514 Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 

transfers (in-country) to review this 

guidance. 

This final rule adds a new Note 1 to 

paragraph (d)(2) to clarify an existing 

BIS policy that allows for multiple 

consignees to be listed on a single prior 

consignee statement, provided certain 

requirements are met. This new Note 1 

to paragraph (d)(2) addresses scenarios 

when multiple consignees who form a 

network engaged in a production 

process (or other type of collaborative 

activity, such as joint development) will 

be receiving items under License 

Exception STA. In such cases, it is 

existing BIS policy to allow the use of 

a single consignee statement identifying 

multiple consignees, provided all the 

applicable requirements of License 

Exception STA are met, including those 

specified in paragraph (d)(2). 

This final rule revises paragraph 

(d)(2)(i) by adding the term ‘‘GENERAL’’ 

before the term ‘‘DESCRIPTION’’ and 

adding the parenthetical phrase, 

‘‘aircraft parts and components 

classified under ECCN 9A610,’’ to 

provide an example of the level of 

specificity that BIS intends for the 

description on the prior consignee 

statement. BIS has received questions 

from the public asking whether the term 

‘‘description’’ used in paragraph (d)(2)(i) 

is intended to mean that the prior 

consignee must include the make and 

model number of each part or 

component that the consignee would 

receive under License Exception STA. 

The term ‘‘DESCRIPTION,’’ as used in 

paragraph (d)(2)(i), does not require that 

level of specificity, as clarified by the 

changes in this final rule. 

Lastly, specific to the clarifications to 

paragraph (d)(2), this final rule adds an 

‘‘(s)’’ to the end of the term 

‘‘CONSIGNEE’’ in the introductory text 

of paragraph (d)(2) and adds an ‘‘(S)’’ to 

the end of the terms ‘‘TITLE,’’ ‘‘NAME,’’ 

and ‘‘PERSON’’ in the undesignated text 

at the end of paragraph (d)(2)(viii). 

These changes, along with the new Note 

1 to paragraph (d)(2), make explicit that 

it is permissible to list multiple 

consignees on a single consignee 

statement. 

Note 2 to paragraph (d)(2) for 

exclusion for government consignees 

from prior consignee statement. This 

final rule adds Note 2 to paragraph 

(d)(2) to exclude Country Group A:5 and 

A:6 government consignees from the 

requirement to sign or provide a prior 

consignee statement to an exporter, 

reexporter, or transferor under License 

Exception STA. In particular, for ‘‘600 

series’’ items authorized under License 

Exception STA for Country Group A:5 

governments, requiring government end 

users to provide a prior consignee 

statement makes little sense, given that 

the goal of License Exception STA is to 

get these ‘‘600 series’’ items to Country 

Group A:5 governments for their 

ultimate end use (one of the three 

permissible ultimate end uses for ‘‘600 

series’’ items authorized under License 

Exception STA). In addition, this 

existing interpretation of agency 

practice takes into account that under 

the other likely license exception under 

which such governments may receive 

items, License Exception GOV, such a 

signature on a prior consignee statement 

is not required. This is an existing 

interpretation of agency practice that 

BIS is making explicit in the regulatory 

text. BIS has provided similar guidance 

to the public, including to Country 

Group A:5 and A:6 governments. 

Note 1 to paragraph (d)(3) for 

exclusion for intangible exports, 

reexports or transfers (in-country). This 

final rule adds a new Note 1 to 

paragraph (d)(3) to specify that 

intangible exports, reexports, and 

transfers (in-country) made under 

License Exception STA are not subject 

to the notification requirements of 

paragraph (d)(3). The new note to 

paragraph (d)(3) also specifies that the 

requirements of paragraph (d)(1) and 

(d)(2) still apply, including to intangible 

exports, reexports, or transfers (incountry) made under License Exception 

STA. The specification in the new note 

to paragraph (d)(3) is consistent with the 

requirement discussed above for the 

new Note 1 to paragraphs (b)(2) and 

(b)(3) that any export, reexport or 

transfer (in-country) made under STA 

must stay within the scope of the 

authorization. As noted above in the 

explanation of the changes to paragraph 

(d)(2), BIS has posted on the BIS Web 

site best practices for managing 

intangible exports, reexports, and 

transfers (in-country) under the EAR. 

BIS encourages any party involved in 

intangible exports, reexports, or 

transfers (in-country) to review this 

guidance. 

Export Administration Act of 1979 

Although the Export Administration 

Act of 1979 expired on August 20, 2001, 

the President, through Executive Order 

13222 of August 17, 2001, 3 CFR, 2001 

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

Executive Order 13637 of March 8, 

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

and as extended by the Notice of August 

15, 2017, 82 FR 39005 (August 16, 

2017), has continued the Export 

Administration Regulations in effect 

under the International Emergency 

Economic Powers Act. BIS continues to 

carry out the provisions of the Export 

Administration Act of 1979, 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 final rule has been 

determined to be not significant for 

purposes of Executive Order 12866. 

This rule is not an Executive Order 

13771 regulatory action because this 

rule is not significant under Executive 

Order 12866. 

2. Notwithstanding any other 

provision of law, no person is required 

to respond to nor be subject to a penalty 

for failure to comply with a collection 

of information, subject to the 

requirements of the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.) (PRA), unless that collection of 

information displays a currently valid 

Office of Management and Budget 

(OMB) Control Number. This regulation 

involves collections previously 

approved by OMB under control 

number 0694–0088, Simplified Network 

Application Processing System, which 

includes, among other things, license 

applications and carries a burden 

estimate of 43.8 minutes for a manual or 

electronic submission. Total burden 

hours associated with the PRA and 

OMB control number 0694–0088 are not 

expected to increase as a result of this 

rule. You may send comments regarding 

the collection of information associated 

with this rule, including suggestions for 

reducing the burden, to Jasmeet K. 

Seehra, Office of Management and 

Budget (OMB), by email to Jasmeet_K._

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

395–7285. 

3. This rule does not contain policies 

with Federalism implications as that 

term is defined under E.O. 13132. 

4. The Department finds that there is 

good cause under 5 U.S.C. 553(b)(B) to 

waive the provisions of the 

Administrative Procedure Act requiring 

prior notice and the opportunity for 

public comment because they are either 

unnecessary or contrary to the public 

interest. BIS is making the changes to its 

regulations described above to provide 

guidance on existing interpretations of 


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Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 50515 

current EAR provisions, and thus prior 

notice and the opportunity for public 

comment is contrary to the public 

interest. The guidance included in this 

final rule has been provided to many 

members of the public in the past (e.g., 

those persons that have attended BIS 

outreach events, asked these types of 

application questions to BIS by phone, 

email or in writing, or read certain 

FAQs posted on the BIS Web site 

dealing with these EAR provisions). 

Importantly, this is also the same 

guidance that would be provided to any 

other member of the public that asked 

the same questions to BIS dealing these 

EAR provisions. BIS’s purpose with 

publishing this final rule is not to 

change the application of these 

provisions but to more efficiently 

communicate the existing agency 

guidance and interpretation of these 

provisions by clarifying the regulations. 

This will benefit members of the public 

because they will be able to more easily 

understand and apply these provisions, 

which are consistent with past agency 

guidance and interpretations provided 

to other members of the public. BIS 

finds good cause to waive the 30-day 

delay in effectiveness under 5 U.S.C. 

553(d)(3). This rule does not change the 

requirements or obligations of persons 

under the EAR, so a 30-day delay in 

effectiveness is not needed. Because a 

notice of proposed rulemaking and an 

opportunity for public comment are not 

required to be given for these 

amendments by 5 U.S.C. 553, or by any 

other law, the analytical requirements of 

the Regulatory Flexibility Act, 5 U.S.C. 

601 et seq., are not applicable. 

List of Subjects in 15 CFR Part 740 

Administrative practice and 

procedure, Exports, Reporting and 

recordkeeping requirements. 

Accordingly, part 740 of the Export 

Administration Regulations (15 CFR 

parts 730–774) is amended as follows: 

PART 740—[AMENDED] 

■ 1. The authority citation for 15 CFR 

part 740 continues to read as follows: 

Authority: 50 U.S.C. 4601 et seq.; 50 

U.S.C. 1701 et seq.; 22 U.S.C. 7201 et seq.; 

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 15, 2017, 82 

FR 39005 (August 16, 2017). 

■ 2. Section 740.11 is amended: 

■ a. By revising paragraph (b)(2)(ii); 

■ b. By revising the introductory text of 

paragraph (b)(2)(iii)(C); 

■ c. By adding Note 1 to paragraph 

(b)(2)(iii)(C); and 

■ d. By adding Note 1 to paragraph 

(c)(1) to read as follows: 

§ 740.11 Governments, International 

Organizations, International Inspections 

under the Chemical Weapons Convention, 

and the International Space Station (GOV). 

* * * * * 

(b) * * * 

(2) * * * 

(ii) Exports, reexports, and transfers 

(in-country) made by or consigned to a 

department or agency of the U.S. 

Government. This paragraph authorizes 

exports, reexports, and transfers of items 

when made by or consigned to a 

department or agency of the U.S. 

Government solely for its official use or 

for carrying out any U.S. Government 

program with foreign governments or 

international organizations that is 

authorized by law and subject to control 

by the President by other means. This 

paragraph does not authorize a 

department or agency of the U.S. 

Government to make any export, 

reexport, or transfer that is otherwise 

prohibited by other administrative 

provisions or by statute. Contractor 

support personnel of a department or 

agency of the U.S. Government are 

eligible for this authorization when in 

the performance of their duties pursuant 

to the applicable contract or other 

official duties. ‘Contractor support 

personnel’ for the purpose of this 

provision means those persons who 

provide administrative, managerial, 

scientific or technical support under 

contract to a U.S. Government 

department or agency (e.g., contractor 

employees of Federally Funded 

Research Facilities or Systems 

Engineering and Technical Assistance 

contractors). The term ‘contractor 

support personnel’ for purposes of this 

paragraph (b)(2)(ii) is limited to those 

individuals who are providing such 

support within a U.S. Government 

owned or operated facility or under the 

direct supervision of a U.S. government 

employee (i.e., an individual directly 

employed by the U.S. Government). 

Private security contractors are not 

‘contractor support personnel’ for 

purposes of this paragraph (b)(2)(ii) 

because although they may work within 

a U.S. Government owned or operated 

facility, such contractors do not provide 

administrative, managerial, scientific or 

technical support under contract to the 

U.S. Government. This authorization is 

not available when a department or 

agency of the U.S. Government acts as 

a transmittal agent on behalf of a nonU.S. Government person, either as a 

convenience or in satisfaction of 

security requirements. 

(iii) * * * 

(C) This paragraph authorizes the 

‘temporary’ export, reexport, or transfer 

(in-country) of an item in support of any 

foreign assistance or sales program 

authorized by law and subject to the 

control of the President by other means, 

when: 

* * * * * 

Note 1 to paragraph (b)(2)(iii)(C): 

‘Temporary,’ for purposes of paragraph 

(b)(2)(iii)(C) of this section, means that four 

years from the date of an item’s initial export, 

reexport, or transfer (in-country), it must be 

returned to the exporter, reexporter, or 

transferor or its disposition otherwise 

authorized (e.g., pursuant to a license or 

another license exception) in accordance 

with the EAR. 

* * * * * 

(c) * * * 

(1) * * * 

Note 1 to paragraph (c)(1): Civil 

intergovernmental organizations (such as the 

European Space Agency (ESA)) where the 

membership is limited to national 

governments that are ‘cooperating 

governments’ are also considered 

‘cooperating governments’ for purposes of 

paragraph (c)(1) of this section. If the 

membership of the civil intergovernmental 

organization includes any national 

governments or other organizations that are 

not ‘cooperating governments,’ such civil 

intergovernmental organizations are not 

considered ‘cooperating governments’ for 

purposes of paragraph (c)(1) of this section. 

For example, civil intergovernmental 

organizations such as the European Aviation 

Safety Agency (EASA), the United Nations, 

and the World Bank do not fall within 

paragraph (c)(1) of this section because their 

membership includes governments that are 

not ‘cooperating governments.’ 

* * * * * 

■ 3. Section 740.20 is amended: 

■ a. By adding Note 1 to paragraph (a); 

■ b. By adding Note 1 to paragraphs 

(b)(2) and (b)(3) at the end of paragraph 

(b)(3); 

■ c. By revising paragraphs (d)(1)(i) and 

(d)(1)(ii); 

■ d. By revising paragraph (d)(2); and 

■ e. By adding Note 1 to paragraph 

(d)(3) to read as follows: 

§ 740.20 License Exception Strategic 

Trade Authorization (STA). 

* * * * * 

(a) * * * 

Note 1 to paragraph (a): License Exception 

STA authorizes transfers (in-country) but is 

only needed to authorize a transfer (incountry) when an EAR authorization is 

required. If a transfer (in-country) is not 

being made under STA, the requirements 

specified in this section do not apply (see 

Note 1 to paragraphs (b)(2) and (b)(3) of this 

section for requirements specific to staying 

within the scope of the original License 

Exception STA authorization and the concept 

of ‘completing the chain’ for purposes of 

‘‘600 series’’ items originally authorized 

under License Exception STA). 

(b) * * * 


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50516 Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 

(3) * * * 

Note 1 to paragraphs (b)(2) and (b)(3): Any 

export, reexport, or transfer (in-country) 

originally authorized under License 

Exception STA must stay within the scope of 

the original authorization. For example, for 

‘‘600 series’’ items authorized under License 

Exception STA, such items must be provided 

to an eligible ultimate end user, such as a 

Country Group A:5 military, to stay in 

compliance with the original authorization. 

This requirement for the ‘‘600 series’’ is 

referred to as ‘completing the chain,’ 

meaning regardless of how many times the 

‘‘600 series’’ item is transferred (in-country) 

or whether the ‘‘600 series’’ item is 

incorporated into higher level assemblies or 

other items, the ‘‘600 series’’ item must 

ultimately be provided to an eligible ultimate 

end user, or be otherwise authorized under 

the EAR. This applies regardless of whether 

the ‘‘600 series’’ item has been incorporated 

into a foreign-made item that may no longer 

be ‘‘subject to the EAR.’’ Because the other 

items eligible for authorization under License 

Exception STA (9x515 and other non-600 

series ECCNs) do not include the ‘‘600 

series’’ requirements specific to ultimate end 

user, this ‘completing the chain’ concept 

does not apply to 9x515 and other non-600 

series ECCNs authorized under License 

Exception STA. However, the original export, 

reexport, or transfer (in-country) made under 

License Exception STA for 9x515 and other 

non-600 series ECCNs still must comply with 

the original authorization—meaning the 

terms and conditions of License Exception 

STA. 

* * * * * 

(d) Conditions—(1) Requirement to 

furnish Export Control Classification 

Number. (i) The exporter must furnish 

to the consignee the ECCN of each item 

to be exported pursuant to this section. 

Once furnished to a particular 

consignee, the ECCN that applies to any 

item need not be refurnished to that 

consignee at the time the same exporter 

makes an additional export of the same 

item, if the information remains 

accurate at the time of the additional 

export. 

(ii) A reexporter or transferor must 

furnish to subsequent consignees the 

ECCN, provided by the exporter or a 

prior reexporter or transferor, of each 

item to be reexported or transferred (incountry) pursuant to this section. Once 

furnished to a particular consignee, the 

ECCN that applies to any item need not 

be refurnished to that consignee at the 

time the same reexporter or transferor 

makes an additional reexport or transfer 

(in-country) of the same item, if the 

information remains accurate at the time 

of the additional reexport or transfer (incountry). 

* * * * * 

(2) Prior Consignee Statement. The 

requirements in this paragraph (d)(2) 

apply to each party using License 

Exception STA to export, reexport, or 

transfer (in-country), including 

reexporters and transferors of items 

previously received under License 

Exception STA. The exporter, 

reexporter, or transferor must obtain the 

following statement in writing from its 

consignee(s) prior to exporting, 

reexporting, or transferring (in-country) 

the item and must retain the statement 

in accordance with part 762 of the EAR. 

One statement may be used for multiple 

exports, reexports, or transfers (incountry) of the same items between the 

same parties so long as the party names, 

the description(s) of the item(s) and the 

ECCNs are correct. The exporter, 

reexporter, or transferor must maintain 

a log or other record (such as documents 

created in the ordinary course of 

business) that identifies each shipment 

made pursuant to this section and the 

specific consignee statement that is 

associated with each shipment. For 

purposes of this paragraph (d)(2), a log 

or other record is not required for 

intangible (i.e., electronic or in an 

otherwise intangible form) exports, 

reexports, or transfers (in-country) made 

under License Exception STA, but an 

exporter, reexporter, or transferor is 

required, prior to making any export, 

reexport, or transfer (in-country), to 

ensure that a prior consignee statement 

has been obtained pursuant to the 

requirements of this paragraph (d)(2). 

(See Note 1 to paragraph (d)(3) of this 

section for additional guidance on 

intangible exports, reexports, and 

transfers (in-country), including best 

practices). Paragraphs (d)(2)(i) through 

(vi) of this section are required for all 

transactions. In addition, paragraph 

(d)(2)(vii) is required for all transactions 

in ‘‘600 series’’ items and paragraph 

(viii) of this section is required for 

transactions in ‘‘600 series’’ items if the 

consignee is not the government of a 

country listed in Country Group A:5 

(See supplement no. 1 to part 740 of the 

EAR). Paragraph (d)(2)(viii) is also 

required for transactions including 

9x515 items. 

[INSERT NAME(S) OF CONSIGNEE(S)]: 

(i) Is aware that [INSERT GENERAL 

DESCRIPTION AND APPLICABLE 

ECCN(S) OF ITEMS TO BE SHIPPED 

(e.g., aircraft parts and components 

classified under ECCN 9A610)] will be 

shipped pursuant to License Exception 

Strategic Trade Authorization (STA) in 

§ 740.20 of the United States Export 

Administration Regulations (15 CFR 

740.20); 

(ii) Has been informed of the ECCN(s) 

noted above by [INSERT NAME OF 

EXPORTER, REEXPORTER OR 

TRANSFEROR]; 

(iii) Understands that items shipped 

pursuant to License Exception STA may 

not subsequently be reexported 

pursuant to paragraphs (a) or (b) of 

License Exception APR (15 CFR 

740.16(a) or (b)); 

(iv) Agrees to obtain a prior consignee 

statement when using License 

Exception STA for any reexport or 

transfer (in-country) of items previously 

received under License Exception STA; 

(v) Agrees not to export, reexport, or 

transfer these items to any destination, 

use or user prohibited by the United 

States’ Export Administration 

Regulations; 

(vi) Agrees to provide copies of this 

document and all other export, reexport, 

or transfer records (i.e., the documents 

described in 15 CFR part 762) relevant 

to the items referenced in this statement 

to the U.S. Government as set forth in 

15 CFR 762.7; 

(vii) Understands that License 

Exception STA may be used to export, 

reexport, and transfer (in-country) ‘‘600 

series’’ items to persons, whether nongovernmental or governmental, only if 

they are in and, for natural persons, 

nationals of a country listed in Country 

Group A:5 (See supplement no. 1 to part 

740 of the EAR) or the United States and 

if: 

(A) The ultimate end user for such 

items is the armed forces, police, 

paramilitary, law enforcement, customs, 

correctional, fire, or a search and rescue 

agency of a government of one of the 

countries listed in Country Group A:5 or 

the United States Government; 

(B) For the ‘‘development,’’ 

‘‘production,’’ operation, installation, 

maintenance, repair, overhaul, or 

refurbishing of an item in one of the 

countries listed in Country Group A:5 or 

the United States that will be for one, or 

more, of the following purposes: 

(1) Ultimately to be used by any such 

government agencies in one of the 

countries listed in Country Group A:5 or 

the United States Government; or 

(2) Sent to a person in the United 

States and not for subsequent export 

under § 740.9(b)(1) (License Exception 

TMP for items moving in transit through 

the United States); or 

(C) The United States Government has 

otherwise authorized the ultimate end 

use, the license or other authorization is 

in effect, and the consignee verifies in 

writing that such authorization exists 

and has provided the license or other 

approval identifier to the exporter, 

reexporter or transferor (as applicable). 

(viii) Agrees to permit a U.S. 

Government end-use check with respect 

to the items. 

[INSERT NAME(S) AND TITLE(S) OF 

PERSON(S) SIGNING THIS 


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Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 50517 

1Executive Order 13783, Promoting Energy 

Independence and Economic Growth, 82 Fed. Reg. 

16093 (Mar. 28, 2017). 

2The Commission is a multi-member, 

independent regulatory agency that must follow 

applicable federal laws to change its rules, 

regulations and orders. Because the Commission 

must ultimately decide what action, if any, to take 

in response to the Executive Order, this report is a 

Commission staff analysis of the issues identified 

for review in the Executive Order and does not 

specifically recommend actions nor indicate the 

timing of any potential action. 

3Memo from Dominic J. Mancini, Acting 

Administrator, Office of Information and Regulatory 

Affairs to Regulatory Reform Officers and 

Regulatory Policy Officers at Executive Departments 

and Agencies regarding Guidance for Section 2 of 

Executive Order 13783, titled ‘‘Promoting Energy 

Independence and Economic Growth.’’ 

DOCUMENT, AND DATE(S) 

DOCUMENT IS SIGNED]. 

Note 1 to paragraph (d)(2): When multiple 

consignees who form a network engaged in 

a production process (or other type of 

collaborative activity, such as joint 

development) will be receiving items under 

License Exception STA, a single prior 

consignee statement for multiple consignees 

may be used for any item eligible for export, 

reexport, or transfer (in-country) under 

License Exception STA, provided all of the 

applicable requirements of License Exception 

STA are met, including those specified in 

paragraph (d)(2). 

Note 2 to paragraph (d)(2): Country Group 

A:5 and A:6 government consignees are not 

required to sign or provide a prior consignee 

statement. 

(3) * * * 

Note 1 to paragraph (d)(3): While the 

exporter, reexporter, and transferor must 

furnish the applicable ECCN and obtain a 

consignee statement prior to export, reexport 

or transfer (in-country) made under License 

Exception STA in accordance with the 

requirements of paragraphs (d)(1) and (d)(2) 

of this section, intangible (i.e., electronic or 

in an otherwise intangible form) exports, 

reexports, and transfers (in-country) made 

under License Exception STA are not subject 

to the notification requirements of paragraph 

(d)(3) of this section. However, any export, 

reexport, or transfer (in-country) made under 

STA must stay within the scope of the 

original authorization. 

* * * * * 

Dated: October 26, 2017. 

Richard E. Ashooh, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2017–23712 Filed 10–31–17; 8:45 am] 

BILLING CODE 3510–33–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Chapter I 

Final Report: Review of Federal Energy 

Regulatory Commission Agency 

Actions Pursuant to Executive Order 

13783, Promoting Energy 

Independence and Economic Growth 

AGENCY: Federal Energy Regulatory 

Commission, DOE. 

ACTION: Availability of Final Report. 

SUMMARY: This Final Report on the 

Review of Federal Energy Regulatory 

Commission Agency Actions is 

provided pursuant to Executive Order 

13783, Promoting Energy Independence 

and Economic Growth. 

DATES: November 1, 2017. 

ADDRESSES: Report available through 

http://www.ferc.gov. 

FOR FURTHER INFORMATION CONTACT: 

Nicholas Tackett, Office of Energy 

Projects, Branch Chief, Division of 

Hydropower Licensing, Federal 

Energy Regulatory Commission, 888 

First Street NE., Washington, DC 

20426, 202–502–6783 

Karin L. Larson, Office of General 

Counsel, Energy Projects, Federal 

Energy Regulatory Commission, 888 

First Street NE., Washington, DC 

20426, 202–502–8236 

SUPPLEMENTARY INFORMATION: 

FEDERAL ENERGY REGULATORY 

COMMISSION 

Final Report 

Review of Federal Energy Regulatory 

Commission Agency Actions Pursuant 

to Executive Order 13783, Promoting 

Energy Independence and Economic 

Growth 

I. Executive Summary 

On March 28, 2017, the President 

signed Executive Order 13783, titled 

Promoting Energy Independence and 

Economic Growth (Executive Order).1

Pursuant to section 2(c) of the Executive 

Order, on May 12, 2017, the Federal 

Energy Regulatory Commission (FERC, 

or the Commission) submitted to the 

Office of Management and Budget 

(OMB) its plan (Plan) for reviewing its 

existing regulations, orders, guidance 

documents, policies, and any other 

similar agency action (agency actions) 

that potentially burden the development 

or use of domestically produced energy 

resources. On July 26, 2017, pursuant to 

section 2(d) of the Executive Order, the 

head of the Commission submitted a 

draft final report detailing the review 

undertaken and the results of the 

review. Given the Commission’s status 

as an independent regulatory agency, 

this final report is being submitted on a 

voluntary basis.2

Of the agency actions reviewed, this 

final report identifies nine agency 

actions that potentially materially 

burden the development or use of 

domestic energy resources as 

contemplated by the Executive Order 

and clarified by OMB’s May 8, 2017 

Guidance Memo.3 In addition, these 

identified agency actions may be 

addressed in conjunction with the 

Commission’s ongoing efforts pursuant 

to Executive Order 13777. 

II. Background 

Section 2 of the Executive Order 

requires the heads of federal agencies to 

immediately ‘‘review all existing 

regulations, orders, guidance 

documents, policies, and any other 

similar agency actions (collectively, 

agency actions) that potentially burden 

the development or use of domestically 

produced energy resources, with 

particular attention to oil, natural gas, 

coal, and nuclear energy resources. 

Such review shall not include agency 

actions that are mandated by law, 

necessary for the public interest, and 

consistent with the policy set forth in 

section 1 of this order.’’ 

On May 8, 2017, OMB issued a 

Guidance Memo providing additional 

information regarding compliance with 

the Executive Order, in particular 

section 2. The Guidance Memo noted 

that the Executive Order does not apply 

to independent agencies as defined in 

44 U.S.C. 3502(5), but encouraged 

independent regulatory agencies, 

especially those that directly regulate 

the development or use of domestically 

produced energy resources, to provide 

the plan and report that are called for in 

section 2 of the Executive Order. The 

Guidance Memo further encourages 

agencies to coordinate their compliance 

with Section 2 of Executive Order 13783 

with their compliance with Executive 

Order 13777, which directs agencies to 

establish Regulatory Reform Task Forces 

to evaluate existing regulations 

generally and make recommendations to 

the agency head regarding their repeal, 

replacement and modification, 

consistent with applicable law. 

In the Plan, the Commission 

explained that it intended to review 

agency actions it has taken pursuant to 

legislative authority under: (1) the 

Natural Gas Act (NGA), 15 U.S.C. 717, 

et seq.; (2) the Federal Power Act (FPA), 

16 U.S.C. 791a, et seq.; (3) the Interstate 

Commerce Act, 49 App. U.S.C. 1 et seq.; 

(4) the Public Utility Regulatory Policies 

Act of 1978 (PURPA), 16 U.S.C. 2601 et 

seq., and (5) other statutes for which the 

Commission’s actions on LNG, natural 

gas pipeline, and hydropower projects 


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