Document ID: BIS-2020-0024-0001
Agency: bis
Document Type: Proposed Rule
Title: Commerce Control List: Proposed Controls on ‘Software' for the Operation of Certain Automated Nucleic Acid Assemblers and Synthesizers
Posted Date: 2020-11-06T05:00Z

[Federal Register Volume 85, Number 216 (Friday, November 6, 2020)]
[Proposed Rules]
[Pages 71012-71016]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-24322]

[[Page 71012]]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 774

[Docket No. 200930-0261]
RIN 0694-AI08

Commerce Control List: Proposed Controls on ``Software'' for the 
Operation of Certain Automated Nucleic Acid Assemblers and 
Synthesizers; Request for Comments

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Proposed rule.

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SUMMARY: The Bureau of Industry and Security (BIS), Department of 
Commerce, maintains controls on the export, reexport and transfer (in-
country) of dual-use items and less sensitive military items through 
the Export Administration Regulations, including the Commerce Control 
List (CCL). Certain items that could be of potential concern for export 
control purposes are not yet listed on the CCL or controlled 
multilaterally, because they represent emerging technologies. Among 
these items is ``software'' for the operation of nucleic acid 
assemblers and synthesizers controlled under Export Control 
Classification Number (ECCN) 2B352 that is capable of designing and 
building functional genetic elements from digital sequence data.
    BIS has determined that this ``software'' is capable of being used 
to operate nucleic acid assemblers and synthesizers controlled under 
ECCN 2B352 for the purpose of generating pathogens and toxins without 
the need to acquire controlled genetic elements and organisms. 
Consequently, the absence of export controls on this ``software'' could 
be exploited for biological weapons purposes. In an effort to address 
this concern, this rule proposes to amend the CCL by adding a new ECCN 
2D352 to control such ``software.'' This rule also requests public 
comments to ensure that the scope of these proposed controls will be 
effective and appropriate (with respect to their potential impact on 
legitimate commercial or scientific applications).

DATES: Comments must be received by BIS no later than December 21, 
2020.

ADDRESSES: You may submit comments, identified by docket number BIS-
2020-0024 or RIN 0694-AI08, through any of the following:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. You can find this 
proposed rule by searching for its regulations.gov docket number, which 
is BIS-2020-0024.
     Email: PublicComments@bis.doc.gov. Include RIN 0694-AI08 
in the subject line of the message.
    All filers using the portal or email should use the name of the 
person or entity submitting the comments as the name of their files, in 
accordance with the instructions below. Anyone submitting business 
confidential information should clearly identify the business 
confidential portion at the time of submission, file a statement 
justifying nondisclosure and referring to the specific legal authority 
claimed, and provide a non-confidential submission.
    For comments submitted electronically containing business 
confidential information, the file name of the business confidential 
version should begin with the characters ``BC.'' Any page containing 
business confidential information must be clearly marked ``BUSINESS 
CONFIDENTIAL'' on the top of that page. The corresponding non-
confidential version of those comments must be clearly marked 
``PUBLIC.'' The file name of the non-confidential version should begin 
with the character ``P.'' The ``BC'' and ``P'' should be followed by 
the name of the person or entity submitting the comments or rebuttal 
comments. Any submissions with file names that do not begin with a 
``P'' or ``BC'' will be assumed to be public and will be made publicly 
available through http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For questions on the chemical and 
biological weapons (CB) controls that would apply to the ``software'' 
proposed for control under ECCN 2D352, contact Dr. Wesley Johnson, 
Chemical and Biological Controls Division, Office of Nonproliferation 
and Treaty Compliance, Bureau of Industry and Security, Telephone: 
(202) 482-0091, Email: Wesley.Johnson@bis.doc.gov. For questions on the 
submission of comments in response to this proposed rule, contact 
Willard Fisher, Regulatory Policy Division, Office of Exporter 
Services, Bureau of Industry and Security, U.S. Department of Commerce, 
Phone: (202) 482-2440.

SUPPLEMENTARY INFORMATION:

Background

    As part of the National Defense Authorization Act (NDAA) for Fiscal 
Year 2019, Public Law 115-232, Congress enacted the Export Control 
Reform Act of 2018 (ECRA), 50 U.S.C. 4801-4852. Section 1758 of ECRA 
(as codified under 50 U.S.C. 4817) authorizes BIS to establish 
appropriate controls on the export, reexport or transfer (in-country) 
of emerging and foundational technologies. Pursuant to ECRA, on 
November 19, 2018, the Bureau of Industry and Security (BIS) published 
an advance notice of public rulemaking (November 19 ANPRM) (83 FR 
58201). That ANPRM identified biotechnology as part of a representative 
list of technology categories concerning which BIS, through an 
interagency process, sought public comment to determine whether there 
are specific emerging technologies that are important to U.S. national 
security for which effective controls can be implemented. As indicated 
by the May 23, 2019 (84 FR 23886), final rule that imposed multilateral 
controls on a number of items, consistent with the 2018 Plenary changes 
to the Wassenaar Arrangement List of Dual-Use Goods and Technologies, 
emerging technologies can include ``software'' and commodities. (See, 
e.g., Export Control Classification Number 3D005, 84 FR 23894.)

Comments to the November 19 ANPRM on Biotechnology

    The biotechnology-related comments submitted to BIS in response to 
its November 19 ANPRM did not specifically address the question of 
export controls on ``software'' for the operation of nucleic acid 
assemblers and synthesizers controlled under Export Control 
Classification Number (ECCN) 2B352.

Process To Identify and Control Emerging Technology

    Under ECRA, emerging and foundational technologies are those 
essential to the national security of the United States, but not 
described in Section 721(a)(6)(A)(i)-(v) of the Defense Production Act 
of 1950 (50 U.S.C. 4565(a)), as amended. Section 1758(a) of ECRA (50 
U.S.C. 4817(a)) outlines an interagency process for identifying 
emerging and foundational technologies that considers both public and 
classified information, as well as information from the Emerging 
Technology Technical Advisory Committee and the Committee on Foreign 
Investment in the United States. In identifying specific emerging 
technologies, the process also takes into account:
     The development of the emerging technologies in foreign 
countries;
     The effect export controls might have on the development 
of the emerging technologies in the United States; and

[[Page 71013]]

     The effectiveness of export controls on limiting the 
proliferation of the emerging technologies in foreign countries.
    In addition, Section 1758(a)(2)(C) of ECRA (50 U.S.C. 
4817(a)(2)(C)) requires that the interagency process for identifying 
emerging technologies include a notice and comment period.
    The Secretary of Commerce must establish appropriate controls on 
the export, reexport or transfer (in-country) of technology identified 
pursuant to the Section 1758 process, and in doing so, must consider 
the potential end-uses and end-users of emerging and foundational 
technologies, and the countries to which exports from the United States 
are restricted (e.g., embargoed countries). While the Secretary has 
discretion to set the level of export controls, at a minimum he must 
require a license for the export of such technologies to countries 
subject to a U.S. embargo, including those countries subject to an arms 
embargo.
    ``Software'' for the operation of nucleic acid assemblers and 
synthesizers controlled under ECCN 2B352.j on the Commerce Control List 
(CCL), in Supplement No. 1 to part 774 of the Export Administration 
Regulations (EAR) (15 CFR parts 730-774), has been identified as a 
technology to be evaluated as an emerging technology, consistent with 
the process described in Section 1758 of ECRA. This identification is 
based on a finding that such ``software'' is capable of being utilized 
in the production of pathogens and toxins and, consequently, the 
absence of export controls on such ``software'' could be exploited for 
biological weapons purposes.
    Consistent with BIS's authority to evaluate the level of controls 
that would be appropriate for the export, reexport or transfer (in-
country) of emerging technologies, this rule proposes to amend the CCL 
by adding a new ECCN 2D352 to control such ``software.'' This 
``software'' is not currently included on any of the Australia Group 
(AG) common control lists--consequently, the controls on this 
``software,'' as proposed by this rule, would be unilateral in nature, 
absent the adoption of comparable controls by the Australia Group.
    In addition, although this rule does not propose to amend ECCN 
2E001 (which controls, inter alia, ``technology'' for the 
``development'' of the nucleic acid assemblers and synthesizers 
described in ECCN 2B352.j), the heading of ECCN 2E001 indicates that, 
with limited exceptions, ECCN 2E001 controls ``technology for the 
``development'' of ``software'' listed under Category 2D of the CCL. 
Consequently, if the changes proposed in this rule were to go into 
effect, ECCN 2E001 would control ``technology'' for the ``development'' 
of the ``software'' that would be controlled under new ECCN 2D352. This 
expansion in the scope of ECCN 2E001 would be unilateral in nature.
    Public comments submitted to BIS in response to this proposed rule 
will help BIS and other U.S. Government agencies to apply the criteria 
set forth in Section 1758 of ECRA and identify and assess the 
appropriate level of controls that should apply to the ``software'' 
proposed for control under ECCN 2D352 and ``technology'' for the 
``development'' of such ``software,'' as proposed to be controlled 
under ECCN 2E001.

Request for Comments

    BIS is publishing this proposed rule to obtain public comments on 
the proposed application of CB controls to ``software'' for the 
operation of nucleic acid assemblers and synthesizers described in ECCN 
2B352.j. and to ``technology'' related to such ``software'' that would 
satisfy the controls described in ECCN 2E001. Consistent with Section 
1758(a)(2)(C) of ECRA (50 U.S.C. 4817(a)(2)(C)), this proposed rule 
provides the public with notice and the opportunity to comment on 
controlling this technology as described herein. Specifically, BIS 
welcomes any comments on this proposed rule relevant to the following:
    (1) Whether the proposed controls are clear and adequately address 
``emerging and foundational technologies'' within the context of 
biological weapons related capabilities and developments (to the extent 
that this is not the case, comments should identify specific control 
text that would be more appropriate to these ends);
    (2) The current capability for the ``development'' of such 
``software'' in the United States and other countries, including the 
extent to which the proposed controls would affect ``software'' that is 
currently being produced and/or sold, either within or outside the 
United States (e.g., whether the proposed controls would inadvertently 
control any ``software'' that is suitable almost exclusively for 
legitimate commercial or scientific applications);
    (3) The effect that implementation of the proposed controls would 
have on the future ``development'' of such ``software'' and related 
``technology'' in the United States; and
    (4) The effectiveness of the proposed controls in terms of limiting 
the availability of such ``software'' and related ``technology'' 
abroad.
    BIS also welcomes comments concerning whether these controls should 
be implemented multilaterally (rather than unilaterally), in the 
interest of increasing their effectiveness and minimizing their impact 
on U.S. industry (multilateral export controls are preferable to 
unilateral controls, because the former typically place U.S. industry 
on a more level playing field versus producers/suppliers in other 
countries). In this regard, note that Section 1758(c) of ECRA (as 
codified under 50 U.S.C. 4817(c)) provides that ``the Secretary of 
State, in consultation with the Secretary [of Commerce] and the 
Secretary of Defense, and the heads of other Federal agencies, as 
appropriate, shall propose that any technology identified pursuant to 
subsection (a) [of ECRA] be added to the list of technologies 
controlled by the relevant multilateral export control regimes''. 
Subsection (a) of section 1758 (as codified under 50 U.S.C. 4817(a)) 
addresses the interagency process for identifying emerging 
technologies.
    The public comments submitted in response to this proposed rule 
should address specific aspects of the proposed addition of ECCN 2D352 
to the CCL in relation to the criteria described above (e.g., identify 
the specific aspects in which the proposed controls would satisfy these 
criteria or fail to do so).

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; distributive impacts; and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits and of reducing costs, harmonizing rules, and 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).
    The cost-benefit analysis required pursuant to Executive Orders 
13563 and 12866 indicates that this rule is intended to improve 
national security as its primary direct benefit. Specifically, 
implementation, in a timely manner, of the proposed changes described 
herein would enhance the national security of the United States by 
reducing the risk

[[Page 71014]]

that global international trade involving dual-use chemical/biological 
items would contribute to the proliferation of chemical and biological 
weapons (CBW) of mass destruction. These controls are essential given 
that the international chemical and biotechnology industries are a 
target for proliferators as a source of materials for CBW programs. In 
calculating the costs that would be imposed by this rule, BIS estimates 
that no more than 15 additional license applications would have to be 
submitted to BIS, annually, as a result of the implementation of the 
amendments described in this rule (see Rulemaking Requirements #2, 
below). Application of the cost-benefit analysis required under 
Executive Orders 13563 and 12866 to this rule, as described above, 
indicates that this rule is intended to improve the national security 
of the United States as its primary direct benefit. Accordingly, 
consistent with the stated purpose of the proposed addition of ECCN 
2D352 to the Commerce Control List (CCL), the changes proposed by this 
rule meet the requirements set forth in the April 5, 2017, OMB guidance 
implementing Executive Order 13771 (82 FR 9339, February 3, 2017), 
regarding what constitutes a regulation issued ``with respect to a 
national security function of the United States,'' and this rule is, 
therefore, exempt from the requirements of E.O. 13771.
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor shall any person 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 rule 
contains the following collections of information subject to the 
requirements of the PRA. These collections have been approved by OMB 
under control numbers 0694-0088 (Simplified Network Application 
Processing System) and 0694-0096 (Five Year Records Retention Period). 
The approved information collection under OMB control number 0694-0088 
includes license applications, among other things, and carries a burden 
estimate of 29.6 minutes per manual or electronic submission for a 
total burden estimate of 31,833 hours. The approved information 
collection under OMB control number 0694-0096 includes recordkeeping 
requirements and carries a burden estimate of less than 1 minute per 
response for a total burden estimate of 248 hours.
    Although this proposed rule would make important changes to the EAR 
for items controlled for chemical/biological (CB) reasons, BIS believes 
the overall increase in costs and burdens due to this rule would be 
minimal if implemented in a final rule. Specifically, BIS expects the 
burden hours associated with these collections would increase, 
slightly, by 7 hours and 39 minutes (i.e., 15 applications x 30.6 
minutes per response) for a total estimated cost increase of $230 
(i.e., 7 hours and 39 minutes x $30 per hour). The $30 per hour cost 
estimate for OMB control number 0694-0088 is consistent with the salary 
data for export compliance specialists currently available through 
glassdoor.com (glassdoor.com estimates that an export compliance 
specialist makes $55,280 annually, which computes to roughly $26.58 per 
hour). This increase is not expected to exceed the existing estimates 
currently associated with OMB control numbers 0694-0088 and 0694-0096. 
Send comments regarding this burden estimate or any other aspect of 
this collection of information, including suggestions for reducing the 
burden, to Jasmeet Seehra, Office of Management and Budget, by email to 
Jasmeet_K._Seehra@omb.eop.gov or by fax to (202) 395-7285; and to the 
Regulatory Policy Division, Bureau of Industry and Security, Department 
of Commerce, 14th Street & Pennsylvania Avenue NW, Room 2705, 
Washington, DC 20230 or by email to RPD2@bis.doc.gov.
    3. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 13132.
    4. Pursuant to Section 1762 of the Export Control Reform Act of 
2018 (ECRA) (50 U.S.C. 4821), this action is exempt from the 
Administrative Procedure Act (APA) (5 U.S.C. 553) requirements for 
notice of proposed rulemaking, opportunity for public participation and 
delay in effective date. Notwithstanding, BIS believes this rule would 
benefit from public comment prior to issuance. Consistent with the 
Regulatory Flexibility Act, as amended by the Small Business Regulatory 
Enforcement Fairness Act of 1996 (SBREFA) (5 U.S.C. 601 et seq.), BIS 
has prepared the following initial regulatory flexibility analysis 
(IRFA) of the impact that this proposed rule, if adopted, would have on 
small businesses.

Description of the Reasons Why Action Is Being Considered

    The policy reasons for issuing this proposed rule are discussed in 
the background section of the preamble of this document and, 
consequently, are not repeated here.

Statement of the Objectives of, and Legal Basis for, the Proposed Rule; 
Identification of All Relevant Federal Rules Which May Duplicate, 
Overlap or Conflict With the Proposed Rule

    The objective of this proposed rule, and any other emerging 
technology proposed rules published by BIS, is to control emerging and 
foundational technologies identified by BIS and its interagency 
partners as being essential to U.S. national security. The legal basis 
for this proposed rule is as follows: 50 U.S.C. 4801-4852.
    No other federal rules duplicate, overlap, or conflict with this 
proposed rule.

Number and Description of Small Entities Regulated by the Proposed 
Action

    This proposed rule would apply to all persons engaged in the 
export, reexport or transfer (in-country) of the ``software'' proposed 
for control under ECCN 2D352 and related ``technology'' subject to the 
EAR. Presently, this ``software'' and related ``technology'' is used in 
research and development activities in many U.S. university and 
military laboratories. Therefore, BIS anticipates that the proposed 
controls would result in ``deemed'' export license applications (for 
exports to foreign nationals located within the United States) to allow 
access to this ``technology'' by foreign students and faculty at U.S. 
universities, as well as by non-U.S. employees of U.S. biochemical 
firms. There would most likely also be ``deemed'' reexport license 
applications for the release of this ``technology'' to third-country 
foreign nationals located in foreign countries who are engaged in 
research and development activities involving this ``technology.''
    BIS does not collect or maintain the data necessary to determine 
how many of the affected persons are small entities as that term is 
used by the Small Business Administration. Prior to issuing this 
proposed rule, BIS received 36 comments on biotechnology in response to 
the November 19 ANPRM. None of these commenters specifically identified 
themselves as small businesses, but small businesses may have chosen to 
provide input through larger entities, such as trade associations.

[[Page 71015]]

    However, BIS was able to estimate the number of license 
applications that the agency anticipates receiving as a result of this 
proposed rule and is using that estimate as a means of assessing the 
impact on small businesses. Using the North American Industry 
Classification System Codes (NAICS) 325414 (Biological Product (except 
Diagnostic) Manufacturing), BIS determined that the standard small 
business size in this industry is 1,250 employees. Using Table 1a of 
the Census Bureau's 2016 Exports by Company Type and Employment Size 
and extrapolating to 1,250 employees, BIS then estimated that 41% of 
all identified companies that export in this industry are small 
businesses. BIS also estimates that it will receive 15 license 
applications per year for the items described in this proposed rule 
(see the PRA estimates described in Rulemaking Requirements #2, above). 
Based on that information, BIS estimates that the agency will receive 
approximately 6 license applications per year from small businesses, or 
roughly 41% of the 15 estimated license applications.
    In addition, based on the burden estimate for OMB under control 
numbers 0694-0088 (Simplified Network Application Processing System) 
and 0694-0096 (Five Year Records Retention Period), BIS expects that 
the total burden hours for small businesses associated with these EAR-
related collections would increase only slightly, by just under 3 hours 
and 4 minutes (i.e., 6 applications x 30.6 minutes per response), for a 
total estimated cost increase of just under $92 (i.e., 3 hours and 4 
minutes x $30 per hour).
    The amendments proposed in this rule, if implemented, also would 
trigger a small information collection burden under the U.S. Census 
Bureau's Foreign Trade Regulations (FTR) (15 CFR part 30), which 
contain the Electronic Export Information (EEI) filing requirements 
under the Automated Export System (AES). This FTR-related information 
collection has been approved by OMB under control number 0607-0152 
(Automated Export System (AES) Program) and carries a burden hour 
estimate of 3 minutes per electronic submission. This collection, 
together with the aforementioned EAR-related information collections, 
would result in a total estimated cost increase to small businesses of 
just under $94 (i.e., 3 hours and 7 minutes x $30 per hour). Note that, 
for purposes of consistency, the $30 per hour cost estimate used for 
the EAR-related information collections described above is also applied 
to this FTR-related information collection (which also would involve 
work performed by export compliance specialists).
    Based on the analysis provided above, the amendments proposed in 
this rule would not impose a significant economic impact on a 
substantial number of small businesses.

Description of the Projected Reporting, Recordkeeping, and Other 
Compliance Requirements of the Proposed Rule

    The changes proposed in this rule, if adopted, would mean that 
certain items currently eligible for export, reexport or transfer (in-
country) to most destinations under the No License Required (NLR) 
designation would require an EAR authorization (i.e., in accordance 
with the terms and conditions of an EAR license exception or a license 
issued by BIS). Adding these items to the CCL, to be controlled under a 
new ECCN 2D352, may also change the export clearance requirements under 
the FTR for certain exports of these items by triggering an EEI filing 
requirement in AES--this requirement generally does not apply to items 
below a certain value that are classified as EAR99.
    To the extent that compliance with the changes proposed in this 
rule would impose a burden on persons, including small businesses, BIS 
believes the burden would be minimal. The reclassification process 
would need to be done only once per license applicant for exports, 
reexports or transfers (in-country) of these emerging technology items 
and, consequently, would constitute a one-time burden for each 
applicant. Similarly, assessing the availability of license exceptions 
and/or applying for and using BIS licenses would impose some minimal 
burden on persons, including small businesses.
    However, it should be noted that these EAR requirements would 
likely have less impact than might otherwise be the case, because of 
the resources that BIS makes available to all exporters, including 
small businesses. Specifically, BIS's website has free on-line training 
explaining export basics, including instructions on how to register for 
and use BIS's online license application tool. BIS also provides free 
export counseling by telephone and email via both its Washington, DC 
and Western Regional offices. In addition, BIS accepts requests for 
commodity classifications and processes them without charge to assist 
those exporters who need assistance in classifying their items for the 
purpose of determining whether any CCL-based license requirements would 
apply.

Significant Alternatives and Underlying Analysis

    As noted above, BIS does not believe that the amendments proposed 
in this rule, if published in a final rule, would have a significant 
economic impact on small businesses. Nevertheless, consistent with 5 
U.S.C. 603(c), BIS considered significant alternatives to these 
proposed amendments to assess whether the alternatives would: (1) 
Accomplish the stated objectives of this rule (consistent with the 
emerging technology requirements in ECRA); and (2) minimize any 
significant economic impact of this rule on small entities. BIS could 
have proposed a much broader control on ``software'' capable of 
operating nucleic acid assemblers and synthesizers controlled under 
ECCN 2B352 that would have captured a greater amount of such 
``software'' and related ``technology.'' That in turn would have had a 
greater impact not only on small businesses, but also on research and 
development laboratories (both academic and corporate), which are 
involved in advancing biological technology. BIS has determined that 
proposing focused controls on specific ``software'' and related 
``technology'' (i.e., the ``software'' proposed for control under new 
ECCN 2D352 and corresponding ``development'' ``technology'' in ECCN 
2E001) is the least disruptive alternative for implementing export 
controls in a manner consistent with controlling technology that has 
been determined, through the emerging technology interagency process 
authorized under ECRA, to be essential to U.S. national security.
    BIS is not proposing different compliance or reporting requirements 
for small businesses. If a small business is subject to a compliance 
requirement for the export, reexport or transfer (in-country) of this 
``software'' and related ``technology,'' then it would submit a license 
application using the same process as any other company (i.e., 
electronically via SNAP-R). The license application process is free of 
charge to all entities, including small businesses. In addition, as 
noted above, the resources and other compliance tools made available by 
BIS typically serve to lessen the impact of any EAR license 
requirements on small businesses.
    Lastly, consistent with 5 U.S.C. 603(c), BIS assessed the use of 
performance standards rather than design standards and also considered 
whether an exemption for small businesses was practical under the 
circumstances (i.e., within the context of the changes proposed in this 
rule).

[[Page 71016]]

    The ``software'' proposed for control under new ECCN 2D352 and 
related ``technology'' that warrant control under this proposed rule 
are capable of being used to operate nucleic acid assemblers and 
synthesizers controlled under ECCN 2B352 for the purpose of generating 
pathogens and toxins without the need to acquire controlled genetic 
elements and organisms (i.e., they are capable of being used in the 
production of biological agents). However, because this ``software'' 
and related ``technology'' are dual-use items, they also have 
legitimate commercial and scientific applications. Consequently, 
controlling this ``software'' and related ``technology'' based on 
design standards is the most appropriate way to control these items. In 
the absence of such controls, there may be an unacceptable risk of 
diversion of these items to biological weapons end-uses.
    This proposed rule does not contain an exemption for small 
businesses from this license requirement, because BIS and its 
interagency partners are assessing whether these controls are essential 
to U.S. national security. Specifically, this ``software'' and related 
``technology'' could be used for biological weapons purposes and, as 
such, controlling these items on the CCL is essential to U.S. national 
security. An exemption for small businesses would undermine the 
effectiveness of these proposed controls.

Conclusion

    BIS has identified the ``software'' and related ``technology'' 
addressed in this proposed rule as an emerging technology that warrants 
public notice and comment. Consequently, consistent with the Regulatory 
Flexibility Act, BIS has prepared this IRFA addressing the impact that 
this proposed rule, if adopted, would have on small entities. BIS's 
assessment indicates that the amendments proposed in this rule would 
not have a significant economic impact on a substantial number of small 
entities.
    Please submit any comments concerning this IRFA in accordance with 
the instructions provided in the ADDRESSES section of this proposed 
rule.

List of Subjects in 15 CFR Part 774

    Exports, Reporting and recordkeeping requirements, Terrorism.

    For the reasons stated in the preamble, part 774 of the Export 
Administration Regulations (15 CFR parts 730-774) is proposed to be 
amended as follows:

PART 774--[AMENDED]

0
1. The authority citation for 15 CFR part 774 continues to read as 
follows:

    Authority:  50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 
U.S.C. 1701 et seq.; 10 U.S.C. 8720; 10 U.S.C. 8730(e); 22 U.S.C. 
287c, 22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; 42 U.S.C. 2139a; 15 
U.S.C. 1824; 50 U.S.C. 4305; 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.

Supplement No. 1 to Part 774--[Amended]

0
2. In Supplement No. 1 to Part 774 (the Commerce Control List), 
Category 2 -Materials Processing,'' ECCN 2D352 is added, immediately 
following ECCN 2D351, to read as follows:

Supplement No. 1 to Part 774--The Commerce Control List

* * * * *

2D352 ``Software'' for the operation of nucleic acid assemblers and 
synthesizers controlled by 2B352.j that is capable of designing and 
building functional genetic elements from digital sequence data.

License Requirements

Reason for Control: CB, AT

------------------------------------------------------------------------
                                            Country chart (see supp. No.
                Control(s)                         1 to part 738)
------------------------------------------------------------------------
CB applies to entire entry................  CB Column 2.
AT applies to entire entry................  AT Column 1.
------------------------------------------------------------------------

List Based License Exceptions (See Part 740 for a Description of All 
License Exceptions)

TSR: N/A

List of Items Controlled

    Related Controls: See ECCN 1E001 for ``development'' or 
``production ``technology'' for genetic elements controlled by ECCN 
1C353.
    Related Definitions: See Section 772.1 of the EAR for the 
definitions of ``software,'' ``program,'' and ``microprogram.''
    Items: The list of items controlled is contained in the ECCN 
heading.
* * * * *

Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2020-24322 Filed 11-5-20; 8:45 am]
BILLING CODE 3510-33-P