Document ID: BIS-2012-0019-0001
Agency: bis
Document Type: Proposed Rule
Title: Export Administration Regulations: Control of Personal Protective Equipment, Shelters, and Related Items the President Determines No Longer Warrant Control Under the Munitions List
Posted Date: 2012-06-07T04:00Z

[Federal Register Volume 77, Number 110 (Thursday, June 7, 2012)]
[Proposed Rules]
[Pages 33688-33698]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-13745]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 740, 742, and 774

[Docket No. 120201082-2132-01]
RIN 0694-AF58

Revisions to the Export Administration Regulations (EAR): Control 
of Personal Protective Equipment, Shelters, and Related Items the 
President Determines No Longer Warrant Control Under the United States 
Munitions List (USML)

AGENCY: Bureau of Industry and Security, Department of Commerce.

ACTION: Proposed rule.

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SUMMARY: This proposed rule describes how articles the President 
determines no longer warrant export control under Category X 
(Protective Personnel Equipment and Shelters) of the United States 
Munitions List (USML), would be controlled under the Commerce Control 
List (CCL) in new Export Control Classification Numbers (ECCNs) 1A613, 
1B613, 1D613, and 1E613. In conjunction with establishing these new 
ECCNs, this proposed rule would control military helmets (currently 
controlled under ECCNs 0A018 and 0A988) under new ECCN 1A613 and amend 
ECCN 1A005 for body armor. This proposed rule also would remove 
machetes from ECCN 0A988. This is one in a planned series of proposed 
rules describing how various types of articles the President 
determines, as part of the Administration's Export Control Reform 
Initiative, no longer warrant USML control, would be controlled on the 
CCL and by the EAR. This proposed rule is being published in 
conjunction with a proposed rule of the Department of State, 
Directorate of Defense Trade Controls (DDTC), which would amend the 
list of articles controlled by USML Category X in the International 
Traffic In Arms Regulations (ITAR).

DATES: Comments must be received by July 23, 2012.

ADDRESSES: You may submit comments by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
The identification number for this rulemaking is BIS-2012-0019.
     By email directly to publiccomments@bis.doc.gov. Include 
RIN 0694-AF58 in the subject line.
     By mail or delivery to Regulatory Policy Division, Bureau 
of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th 
Street and Pennsylvania Avenue NW., Washington, DC 20230. Refer to RIN 
0694-AF58.

FOR FURTHER INFORMATION CONTACT: Michael Rithmire, Office of National 
Security and Technology Transfer Controls, Bureau of Industry and 
Security, U.S. Department of Commerce, Telephone: (202) 482-6105, 
Email: Michael.Rithmire@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

    On July 15, 2011, as part of the Administration's ongoing Export 
Control Reform Initiative, the Bureau of Industry and Security (BIS) 
published a proposed rule (76 FR 41958) (herein ``the July 15 proposed 
rule'') that set forth a framework for how articles, which the 
President determines in accordance with section 38(f) of the Arms 
Export Control Act (AECA) (22 U.S.C. 2778(f)) would no longer warrant 
export control on the United States Munitions List (USML) of the ITAR, 
would be controlled on the Commerce Control List (CCL) in Supplement 
No. 1 to Part 774 of the Export Administration Regulations (EAR). On 
November 7, 2011 (76 FR 68675) (herein ``the November 7 proposed 
rule''), BIS published a rule proposing several changes to the 
framework initially proposed in the July 15 rule.
    Following the structure of the July 15 proposed rule, this proposed 
rule describes BIS's proposal for controlling under the EAR and its CCL 
personal protective equipment, shelters, and related articles now 
controlled by the ITAR's USML Category X. The proposed changes 
described in this proposed rule and the State Department's proposed 
amendment to Category X of the USML are based on a review of Category X 
by the Defense Department, which worked with the Departments of State 
and Commerce in preparing the proposed amendments. The review was 
focused on identifying the types of articles that are now controlled by 
USML Category X in the ITAR that are either (i) inherently military and 
otherwise warrant export control on the USML or (ii) if it is a type 
common to non-military protective equipment, possessing parameters or 
characteristics that provide a critical military or intelligence 
advantage to the United States, and that are almost exclusively 
available from the United States. If an article satisfied one or both 
of those criteria, the article remained on the USML in the ITAR. If an 
article did not satisfy either standard but was nonetheless a type of 
article that is, as a result of differences in form and fit, 
``specially designed'' for military

[[Page 33689]]

applications, it was identified in the new ECCNs proposed in this 
notice. The licensing requirements and other EAR-specific controls for 
such items also described in this notice would enhance national 
security, permitting the U.S. Government to focus its resources on 
controlling, monitoring, investigating, analyzing, and, if need be, 
prohibiting exports and reexports of more significant items to 
destinations, end uses, and end users of greater concern than our NATO 
allies and other multi-regime partners.
    Pursuant to section 38(f) of the AECA, the President shall review 
the USML ``to determine what items, if any, no longer warrant export 
controls under'' the AECA. The President must report the results of the 
review to Congress and wait 30 days before removing any such items from 
the USML. The report must ``describe the nature of any controls to be 
imposed on that item under any other provision of law.'' 22 U.S.C. 
2778(f)(1). This proposed rule describes how certain protective 
equipment and related articles in USML Category X would be controlled 
by the EAR and its CCL if the President determines that the articles no 
longer warrant export control on the USML.
    In the July 15 proposed rule, BIS proposed creating a series of new 
ECCNs to control items that would be removed from the USML, or that are 
items from the Wassenaar Arrangement on Export Controls for 
Conventional Arms and Dual Use Goods and Technologies Munitions List 
(Wassenaar Arrangement Munitions List or WAML) that are already 
controlled elsewhere on the CCL. The proposed rule referred to this 
series as the ``600 series'' because the third character in each of the 
new ECCNs would be a ``6.'' The first two characters of the 600 series 
ECCNs serve the same function as any other ECCN as described in Sec.  
738.2 of the EAR. The first character is a digit in the range 0 through 
9 that identifies the Category on the CCL in which the ECCN is located. 
The second character is a letter in the range A through E that 
identifies the product group within a CCL Category. In the 600 series, 
the third character is the number 6. With few exceptions, the final two 
characters identify the WAML category that covers items that are the 
same or similar to items in a particular 600 series ECCN.
    This proposed rule would create four such ECCNs--1A613, to control 
armored and protective ``equipment,'' constructions, and 
``components;'' 1B613, to control test, inspection, and ``production'' 
equipment, and related commodities ``specially designed'' for the 
``development'' or ``production'' of commodities controlled by ECCN 
1A613 or USML Category X and not identified in USML Category X; 1D613, 
to control ``software'' for the ``development,'' ``production,'' 
operation, installation, maintenance, repair, overhaul, or refurbishing 
of items controlled by ECCNs 1A613 or 1B613; and 1E613, to control 
``technology'' for the ``development,'' ``production,'' operation, 
installation, maintenance, repair, overhaul, or refurbishing of items 
controlled by ECCNs 1A613, 1B613, or 1D613.
    This proposed rule also would revise three existing ECCNs--0A018, 
certain items on the Wassenaar Arrangement Munitions List; 0A988, 
conventional military steel helmets and machetes; and 1A005, body armor 
and specially designed components not manufactured to military 
standards or specifications. Further, this rule would revise License 
Exceptions Baggage (BAG) and Temporary Imports, Exports, and Reexports 
(TMP) to authorize exports of certain body armor classified under new 
ECCN 1A613.
    BIS will publish additional Federal Register notices containing 
proposed amendments to the CCL that will describe proposed controls for 
additional categories of articles the President determines no longer 
warrant export control under the USML. The State Department will 
publish concurrently proposed amendments to the USML that correspond to 
the BIS notices. BIS will also publish proposed rules to further align 
the CCL with the WAML and the Missile Technology Control Regime 
Equipment, Software and Technology Annex.

Detailed Description of Changes Proposed by This Rule

Proposed ECCN 1A613: Armored and Protective ``Equipment,'' 
Constructions, and Components

    Proposed ECCN 1A613 would impose national security (NS Column 1), 
regional stability (RS Column 1), and antiterrorism (AT Column 1) 
controls on commodities described herein. Paragraph .a of ECCN 1A613 
would control armored plate ``specially designed'' for military use and 
not controlled by the USML. Paragraph .b would control shelters 
``specially designed'' to provide ballistic protection or protect 
against nuclear, biological, or chemical contamination. Paragraph .c 
would control military helmets providing protection less than NIJ level 
IV (currently classified under ECCN 0A018.d) and helmet shells 
providing protection less than NIJ level IV. Paragraph .d would control 
soft body armor and protective garments manufactured to military 
standards or specifications that provide ballistic protection equal to 
or less than NIJ level III (NIJ 0101.06, July 2008) as well as hard 
body armor plate that provides NIJ level III protection. Body armor 
currently classified under ECCN 1A005 would not be reclassified under 
this ECCN, as discussed below. Paragraph .e would control other 
personal protective equipment, such as handheld ballistic shields, 
``specially designed'' for military applications not specified in the 
USML or CCL. Paragraphs .f through .w would be reserved for future use. 
Paragraph .x would control ``parts,'' ``components,'' ``accessories and 
attachments'' that are ``specially designed'' for a commodity 
controlled by proposed ECCN 1A613 and not specified elsewhere in the 
CCL or USML. Paragraph .y would control specific ``parts,'' 
``components,'' ``accessories and attachments'' ``specially designed'' 
for a commodity controlled under proposed ECCN 1A613 and not elsewhere 
specified in the CCL. This proposed rule would control conventional 
military steel helmets, currently classified under ECCN 0A988, under 
paragraph .y.1. Paragraphs .y.2 through .y.98 would be reserved for 
future classification of specific equipment.
    BIS proposed to move anti-gravity suits, pressure suits, and 
atmosphere diving suits, currently controlled in the USML under 
Category X(a)(3), (a)(4), and (a)(5), respectively, to ECCN 9A610 in 
the November 7 proposed rule.

Proposed ECCN 1B613: Test, Inspection, and ``Production'' ``Equipment'' 
and Related Commodities ``Specially Designed'' for the ``Development'' 
or ``Production'' of Commodities Controlled by ECCN 1A613 or USML 
Category X

    Proposed ECCN 1B613 would impose national security (NS Column 1), 
regional stability (RS Column 1), and antiterrorism (AT Column 1) 
controls on commodities described herein. Paragraph .a of ECCN 1B613 
would control test, inspection, and ``production'' ``equipment'' that 
is not specified in USML Category X(c) and is ``specially designed'' 
for the ``production'' or ``development'' of commodities specified in 
proposed ECCN 1A613 or USML Category X. Paragraph .b would control 
plasma pressure compaction (P2C) equipment ``specially designed'' for 
the ``production'' of ceramic or composite body armor plates controlled 
by ECCN 1A613 or USML Category X. Paragraphs .c through .x would be 
reserved for

[[Page 33690]]

future use. Paragraph .y would control specific test, inspection, and 
``production'' ``equipment'' ``specially designed'' for the 
``production'' or ``development'' of commodities controlled by ECCN 
1A613 or USML Category X. Paragraphs .y.1 through .y.98 would be 
reserved for future use.

Proposed ECCN 1D613: ``Software'' ``Specially Designed'' for the 
``Development,'' ``Production,'' Operation, Installation, Maintenance, 
Repair, Overhaul or Refurbishing of Commodities Controlled by ECCNs 
1A613 or 1B613

    Proposed ECCN 1D613 would impose national security (NS Column 1), 
regional stability (RS Column 1), and antiterrorism (AT Column 1) 
controls on ``software'' described herein. Paragraph .a would control 
``software'' (other than ``software'' controlled in paragraph .y of 
ECCN 1D613) ``specially designed'' for the ``development,'' 
``production,'' operation or maintenance of commodities controlled by 
ECCNs 1A613 (except 1A613.y) or 1B613 (except 1B613.y). Paragraphs .b 
through .x would be reserved for future use. Paragraph .y would control 
specific ``software'' ``specially designed'' for the ``production,'' 
``development,'' or operation or maintenance of commodities listed in 
proposed ECCNs 1A613 or 1B613. While paragraphs .y.2 through .y.98 
would be reserved, paragraph .y.1 would control specific ``software'' 
``specially designed'' for the ``production,'' ``development,'' or 
operation or maintenance of commodities listed in proposed ECCNs 
1A613.y or 1B613.y.

Proposed ECCN 1E613: ``Technology'' ``Required'' for the 
``Development,'' ``Production,'' Operation, Installation, Maintenance, 
Repair, Overhaul or Refurbishing of Commodities Controlled by ECCNs 
1A613 or 1B613, or ``Software'' Controlled by ECCN 1D613

    Proposed ECCN 1E613 would impose national security (NS Column 1), 
regional stability (RS Column 1), and antiterrorism (AT Column 1) 
controls on the ``technology'' described herein. Paragraph .a would 
control ``technology'' (other than ``technology'' controlled under 
paragraph .y) ``required'' for the ``development,'' ``production,'' 
operation, installation, maintenance, repair, overhaul, or refurbishing 
of commodities controlled by ECCNs 1A613 (except 1A613.y) or 1B613 
(except 1B613.y), or software controlled by ECCN 1D613 (except 
1D613.y). Paragraphs .b through .x would be reserved for future use. 
Paragraph .y would control specific ``technology'' ``required'' for the 
``production,'' ``development,'' operation, installation, maintenance, 
repair, or overhaul of commodities or software listed in ECCNs 1A613, 
1B613, or 1D613. While paragraphs .y.2 through .y.98 would be reserved, 
paragraph .y.1 would control specific ``technology'' ``required'' for 
the ``production,'' ``development,'' operation, installation, 
maintenance, repair, or overhaul of commodities or software listed in 
ECCNs 1A613.y, 1B613.y, or 1D613.y.

Inclusion of ``.y.99'' Paragraphs in 600 Series ECCNs

    Proposed new ECCNs 1A613, 1B613, 1D613 and 1E613 also would contain 
a paragraph ``.y.99'' that would control any item that meets all of the 
following criteria: (i) The item is not listed on the CCL; (ii) the 
item was previously determined to be subject to the EAR in an 
applicable commodity jurisdiction determination issued by the U.S. 
Department of State; and (iii) the item would otherwise be controlled 
under one of these 0x613 ECCNs because, for example, the item was 
``specially designed'' for a military use.

ECCNs 0A018 and 0A988 Amended

    This proposed rule would remove the references to military helmets 
in ECCN 0A018.d. Conventional steel helmets described in paragraph 
.d.1, which are currently controlled under ECCN 0A988, would be moved 
to proposed ECCN 1A613.y.1. Military helmets described in paragraph 
.d.2 are currently subject to the ITAR, and that jurisdiction would not 
change under this proposed rule. Military helmets classified under ECCN 
0A018.d (i.e., that are not described in paragraphs .d.1 or .d.2) would 
be moved to proposed ECCN 1A613.c under this proposed rule. 
Consequently, this proposed rule would amend the Related Controls 
paragraph to provide references to ECCNs 1A613.c and 1A613.y.1 and the 
USML for military helmets currently described in paragraph .d, and 
would remove the Note referencing paragraph .d.
    In addition, this proposed rule would remove references to 
conventional military steel helmets from the heading and the control 
paragraph of ECCN 0A988. As a result of this move, these helmets would 
be subject to the de minimis limits applicable to ``600 series'' items 
that were proposed in the July 15 and November 7 proposed rules, as 
well as the restrictions on License Exception availability for ``600 
series'' items. ECCN 0A988 would be amended to cross reference ECCN 
1A613.y.1.
    Under ECCN 0A018.d, military helmets are currently controlled for 
national security, antiterrorism, and United Nations (UN) reasons. 
Under proposed ECCN 1A613.c, they would be controlled for national 
security, regional stability, and antiterrorism reasons and no longer 
controlled for UN reasons. Controlling these items for UN reasons is 
unnecessary in light of the November 7 proposed rule's amendment to the 
RS Column 1 licensing policy, which stated that there would be a 
general policy of denial for ``600 series'' items if the destination is 
subject to a United States arms embargo or a United Nations Security 
Council arms embargo. A list of such destinations is identified in 
proposed section 740.2(a)(12), published in the November 7 proposed 
rule (and amended with this proposed rule, as discussed below).
    Under ECCN 0A988, conventional steel military steel helmets are 
controlled for UN reasons only; under ECCN 1A613.y.1, they would be 
controlled for antiterrorism reasons only. This change would remove the 
CCL-based license requirement for exports or reexports of the helmets 
to Rwanda and Iraq since Rwanda is no longer subject to a UN arms 
embargo and since ECCN 0A988 helmets do not fit the scope of the arms 
and related materiel that are subject to the current UN arms embargo on 
Iraq. This change would also impose a new CCL-based license requirement 
for exports or reexports of 0A988 helmets to Cuba, Iran, Sudan, and 
Syria for foreign policy reasons.
    Removing conventional military steel helmets from ECCN 0A988 would 
leave machetes as the only items controlled under that ECCN. Machetes 
do not meet the criteria of any proposed 600 series ECCN. Consequently, 
BIS reviewed machetes to determine whether such items should remain in 
ECCN 0A988, move to a different ECCN, or be removed from the CCL. 
Currently, ECCN 0A988 imposes a CCL-based license requirement for 
exports and reexports of machetes to Iraq, North Korea, and Rwanda due 
to UN arms embargoes. However, machetes do not fit the scope of arms 
and related materiel that are subject to UN arms embargoes. Further, 
machetes do not fit the scope of any ECCNs currently controlling items 
for anti-terrorism reasons. Therefore, this proposed rule would remove 
machetes from the CCL and designate them as EAR99 items. This proposal 
would help streamline the CCL and remove an item for which BIS believes 
no national security or foreign policy concern exists to merit control 
under the CCL. As EAR99 items, machetes would continue

[[Page 33691]]

to require licenses for certain countries subject to comprehensive 
embargoes and sanctions under part 746 and certain end uses and end 
users described in part 744 of the EAR.

ECCN 1A005 Amended

    This proposed rule would revise the List of Items Controlled 
section in ECCN 1A005 to more positively identify soft body armor and 
hard body armor plates that are controlled under this ECCN. In 
addition, this proposed rule would amend the Related Controls paragraph 
of ECCN 1A005 to reference body armor controlled under ECCN 1A613 and 
police helmets and shields controlled under ECCN 0A979.

License Exception BAG Amended for Body Armor Controlled Under ECCN 
1A613.d

    In the July 15 proposed rule, BIS proposed adding new section 
740.2(a)(13) to the EAR to identify when items classified under the 
``600 series'' would be eligible for license exceptions. This proposed 
rule would amend proposed Sec.  740.2(a)(13)(i) and current Sec.  
740.14 to authorize, under License Exception BAG, exports of body armor 
classified under newly proposed ECCN 1A613.d. License Exception BAG, in 
Sec.  740.14, would be amended by adding a new paragraph (h), which 
generally is modeled on the exemptions in Sec. Sec.  123.17(f) and (g) 
of the ITAR. In addition, to parallel Sec.  123.17(g) of the ITAR, 
which authorizes exports without a license under certain circumstances 
to Afghanistan and Iraq, both of which are subject to arms embargoes 
under Sec.  126.1 of the ITAR, this proposed rule would revise the July 
15 rule's proposed restrictions on all license exceptions set forth in 
Sec.  740.2(a)(12) to authorize exports of ECCN 1A613.d body armor to 
those two countries, as long as the specified conditions of license 
condition availability are met. Under this proposal for License 
Exception BAG, only exports, and not reexports, would be authorized for 
body armor controlled under ECCN 1A613.d. BIS encourages public 
comments on whether BAG should also authorize reexports of such body 
armor and, if so, whether conditions should apply to such reexports.
    Concurrently, this proposed rule would revise the July 15 rule's 
proposed amendment to Sec.  740.2(a)(12) by updating the list of 
countries currently subject to a United States or UN arms embargo by 
including Fiji and removing Sierra Leone.

License Exception TMP Amended for Body Armor Controlled Under ECCN 
1A613.d

    As with License Exception BAG, this proposed rule would amend 
License Exception TMP to authorize the export of ECCN 1A613.d body 
armor as a tool of trade. Specifically, this proposed rule would add 
new paragraph (a)(3)(v) to Sec.  740.9, which generally would be 
modelled on the exemptions in Sec. Sec.  123.17(f) and (g) of the ITAR. 
In order to authorize exports of ECCN 1A613.d body armor through TMP to 
countries that are in Country Group D:1 but not subject to a United 
States arms embargo, this proposed rule would add an exception in 
paragraph (a)(3)(i)(B)(6) of Sec.  740.9 to the restriction on the use 
of TMP for destinations in Country Group D:1. To enable exports of ECCN 
1A613.d body armor under TMP to Iraq, which is in Country Group D:1 and 
currently subject to a United States arms embargo, this proposed rule 
would add paragraph (a)(3)(i)(B)(7), which would authorize exports of 
ECCN 1A613.d body armor to Iraq under proposed paragraph (a)(3)(v)(B).
    To ensure that body armor controlled under ECCN 1A005 may be 
exported to the same destinations as more sensitive body armor 
controlled under ECCN 1A613.d, this proposed rule would also add 
paragraph (a)(3)(i)(B)(5) to Sec.  740.9 to authorize the export of 
ECCN 1A005 body armor to countries in Country Group D:1. In addition, 
to parallel existing License Exception TMP provisions for ECCN 1A005 
body armor, reexports of such items would be permitted in addition to 
exports.
    Because the proposed changes to License Exception TMP for body 
armor controlled under ECCN 1A613.d are modelled on the exemptions in 
Sec. Sec.  123.17(f) and (g) of the ITAR, they would authorize only 
exports, and not reexports. BIS encourages comments on whether TMP 
should also authorize reexports of such body armor and, if so, what 
conditions should apply to such reexports.

Proposed New ECCNs and License Exception STA

    The July 15 proposed rule would impose certain restrictions on the 
use of license exceptions for items that would be controlled under the 
new ``600 series'' ECCNs on the CCL. For instance, proposed Sec.  
740.20(g) describes the process for requesting License Exception STA 
eligibility for ``600 series'' end items classified in an ECCN 
``xA6zz'' entry. This proposed rule differs from the July 15 proposed 
rule in that items described in proposed ECCN 1A613 would be eligible 
for Sec.  740.20(c)(1) of License Exception STA without need for a 
determination described in Sec.  740.2(g). Likewise, items described in 
ECCN 1B613 would also be eligible for Sec.  740.20(c)(1) of License 
Exception STA without need for a determination. No items described in 
ECCNs 1A613, 1B613, 1D613, or 1E613 would be eligible for Sec.  
740.20(c)(2) of License Exception STA.

Relationship to the July 15 and November 7 Proposed Rules

    As referenced above, the purpose of the July 15 proposed rule was 
to set up the framework to support the transfer of items from the USML 
to the CCL. To facilitate that goal, the July 15 proposed rule 
contained definitions and concepts that were meant to be applied across 
categories. However, as BIS undertakes rulemakings to move specific 
categories of items from the USML to the CCL, there may be unforeseen 
issues or complications that may require BIS to reexamine those 
definitions and concepts. The comment period for the July 15 proposed 
rule closed on September 13, 2011. In the November 7 proposed rule, BIS 
proposed several changes to those definitions and concepts. The comment 
period for the November 7 proposed rule closed on December 22, 2011.
    To the extent that this rule's proposals affect any provision in 
either of those proposed rules or any provision in either of those 
proposed rules affect this proposed rule, BIS will consider comments on 
those provisions so long as they are in the context of the changes 
proposed in this rule.
    BIS believes that the following aspects of the July 15 and November 
7 proposed rules are among those that could affect this proposed rule:
     De minimis provisions in Sec.  734.4;
     Restrictions on use of license exceptions in Sec. Sec.  
740.2, 740.10, 740.11, and 740.20 (including restrictions proposed by 
the November 7, 2011, proposed rule that would apply to items outside 
the scope of that rule);
     Change to national security licensing policy in Sec.  
742.4;
     Licensing policy in Sec.  742.4(b)(1)(ii);
     Addition of 600 series items to Supplement No. 2 to Part 
744--List of Items Subject to the Military End-Use Requirement of Sec.  
744.21;
     Addition of U.S. arms embargo policy regarding 600 series 
items set forth in Sec.  742.4(b)(1)(ii) (national security) of the 
July 15 proposed rule to Sec.  742.6(b)(1) (regional stability) of the 
November 7 proposed rule; and
     Definitions of terms in Sec.  772.1.

[[Page 33692]]

Effects of This Proposed Rule

De minimis

    The July 15 proposed rule would impose certain unique de minimis 
requirements on items controlled under the new 600 series ECCNs. 
Section 734.3 of the EAR provides, inter alia, that under certain 
conditions, items made outside the United States that incorporate items 
subject to the EAR are not subject to the EAR if they do not exceed a 
de minimis percentage of controlled U.S.-origin content. Depending on 
the destination, the de minimis percentage can be either 10 percent or 
25 percent. The personal protective equipment, shelters, and related 
items that would be subject to the EAR as a result of this proposed 
rule would become eligible for de minimis treatment.

Use of License Exceptions

    Personal protective equipment, shelters, and related items 
currently on the USML that would be classified under proposed ECCNs 
1A613 and 1B613 would become eligible for several license exceptions, 
including STA, which would be available for exports to certain 
government agencies of NATO and other multi-regime close allies. The 
exchange of information and statements required under STA is 
substantially less burdensome than the license application requirements 
currently required under the ITAR, as discussed in more detail in the 
``Regulatory Requirements'' section of this proposed rule. None of the 
personal protective equipment, shelters, or related items that would be 
controlled by ECCNs 1A613 or 1B613 would be subject to the provision in 
the July 15 proposed rule that proposes to preclude the use of License 
Exception STA for ``600 series'' end items unless approval for such use 
is sought from and granted by BIS. The items covered by this rule also 
would be eligible for the following license exceptions: LVS (limited 
value shipments), up to $1500 and RPL (servicing and parts 
replacement). In addition, body armor classified under ECCN 1A613.d 
would be eligible for License Exceptions BAG (baggage) and TMP 
(temporary imports, exports, and reexports).

Alignment With the Wassenaar Arrangement Munitions List

    The Administration has stated since the beginning of the Export 
Control Reform Initiative that the reforms will be consistent with U.S. 
obligations to the multilateral export control regimes. Accordingly, 
the Administration will, in this and subsequent proposed rules, 
exercise its national discretion to implement, clarify, and, to the 
extent feasible, align its controls with those of the regimes. This 
proposed rule would align controls on the items that it adds to the CCL 
by placing them in new 600 series ECCNs ending in ``13'' to parallel 
Category ML13 on the Wassenaar Arrangement Munitions List (``[Armored] 
or protective equipment, constructions and components''). Items in 
proposed ECCN 1A613 are covered by WAML Category ML 13.

Request for Comments

    BIS seeks comments on this proposed rule. BIS will consider all 
comments received on or before July 23, 2012. All comments must be in 
writing and submitted via one or more of the methods listed under the 
ADDRESSES caption to this notice. All comments (including any personal 
identifiable information or information for which a claim of 
confidentially is asserted either in those comments or their 
transmittal emails) will be available for public inspection and 
copying. Parties who wish to comment anonymously may do so by 
submitting their comments via www.regulations.gov and, leaving the 
fields for information that would identify the commenter blank, and 
including no identifying information in the comment itself.
    Although the Export Administration Act expired on August 20, 2001, 
the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 
2001 Comp., p. 783 (2002), as extended by the Notice of August 12, 
2011, 76 FR 50661 (August 16, 2011), has continued the Export 
Administration Regulations in effect under the International Emergency 
Economic Powers Act. BIS continues to carry out the provisions of the 
Act, as appropriate and to the extent permitted by law, pursuant to 
Executive Order 13222.

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 two approved 
collections: Simplified Network Application Processing + System 
(control number 0694-0088), which includes, among other things, license 
applications, and License Exceptions and Exclusions (0694-0137).
    As stated in the July 15 proposed rule, BIS believes that the 
combined effect of all rules to be published adding items to the EAR 
that would be removed from the ITAR as part of the Administration's 
Export Control Reform Initiative would increase the number of license 
applications submitted by approximately 16,000 annually, resulting in 
an increase in burden hours of 5,067 (16,000 transactions at 17 minutes 
each) under control number 0694-0088.
    Some items formerly on the USML will become eligible for License 
Exception STA under this rule. As specified in the STA eligibility 
paragraphs for 1A613 and 1B613, such items would not need a 
determination of eligibility per Sec.  740.20(g) of the EAR. As stated 
in the July 15 proposed rule, BIS believes that the increased use of 
License Exception STA resulting from the combined effect of all rules 
to be published adding items to the EAR that would be removed from the 
ITAR as part of the Administration's Export Control Reform Initiative 
would increase the burden associated with control number 0694-0137 by 
about 23,858 hours (20,450 transactions at 1 hour and 10 minutes each).
    BIS expects that this increase in burden would be more than offset 
by a reduction in burden hours associated with approved collections 
related to the ITAR. This proposed rule addresses controls on personal 
protective equipment and related parts, components, production 
equipment, software, and technology. Because, with few exceptions, the 
ITAR allows exemptions from license requirements only for exports to 
Canada, most exports of such items, even when destined to NATO member 
states and other close allies, require State Department authorization. 
In addition, the exports of technology necessary to produce such items 
in the inventories of the United

[[Page 33693]]

States and its NATO and other close allies require State Department 
authorizations. Under the EAR, as proposed, such technology would 
become eligible for export to NATO member states and other close allies 
under License Exception STA. Use of License Exception STA imposes a 
paperwork and compliance burden because, for example, exporters must 
furnish information about the item being exported to the consignee and 
obtain from the consignee an acknowledgement and commitment to comply 
with the EAR. However, the Administration understands that complying 
with the requirements of STA is likely less burdensome than applying 
for licenses. For example, under License Exception STA, a single 
consignee statement can apply to an unlimited number of products, need 
not have an expiration date and need not be submitted to the government 
in advance for approval. Suppliers with regular customers can tailor a 
single statement and assurance to match their business relationship 
rather than applying repeatedly for licenses with every purchase order 
to supply reliable customers in countries that are close allies or 
members of export control regimes or both.
    Even in situations in which a license would be required under the 
EAR, the burden likely will be reduced compared to the license 
requirement of the ITAR. In particular, license applications for 
exports of technology controlled by ECCN 1E613 are likely to be less 
complex and burdensome than the authorizations required to export ITAR-
controlled technology, i.e., Manufacturing License Agreements and 
Technical Assistance Agreements.
    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 an initial 
regulatory flexibility analysis (IRFA) for any rule subject to the 
notice and comment rulemaking requirements under the Administrative 
Procedure Act (5 U.S.C. 553) or any other statute. However, under 
section 605(b) of the RFA, if the head of an agency certifies that a 
rule will not have a significant impact on a substantial number of 
small entities, the RFA 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, if promulgated, will not have a 
significant impact on a substantial number of small entities.
    The changes proposed in this rule do not impact the original 
certification for these rules in the July 15 proposed rule. 
Consequently, BIS has not prepared a regulatory flexibility analysis. A 
summary of the factual basis for the certification, which also takes 
into consideration the changes proposed by this proposed rule, 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 rule, it acknowledges that this rule 
would affect some unknown number of them.

Economic Impact

    This proposed rule is part of the Administration's Export Control 
Reform Initiative. Under that initiative, the USML would be revised to 
be a ``positive'' list, i.e., a list that does not use generic, catch-
all controls on any part, component, accessory, attachment, or end item 
that was in any way specifically modified for a defense article, 
regardless of the article's military or intelligence significance or 
non-military applications. At the same time, articles that the 
President determines to no longer warrant export control on the USML 
would become controlled on the CCL. Such items, along with certain 
military items that currently are on the CCL, will be identified in 
specific ECCNs known as the ``600 series'' ECCNs. In addition, some 
items currently on the CCL will move from existing ECCNs to the new 600 
series ECCNs.
    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. As part of this proposal, parts and components that are 
``specially designed'' for commodities proposed to be controlled under 
ECCN 1A613 and are not controlled under proposed USML Category X(d) 
would be included on the CCL. Such parts and components are more likely 
to be produced by small businesses, which would benefit from this 
proposed change.
    Changing the jurisdictional status of the items described in this 
notice from the USML to the CCL would reduce the burden on small 
entities (and other entities as well) through: (i) Eliminating some 
license requirements; (ii) increasing availability of license 
exceptions; (iii) simplifying license application procedures; and (iv) 
reducing or eliminating registration fees.
    These amendments are part of the Administration's effort to make 
the USML the U.S. Government's list of critical military and 
intelligence items that warrant the stringent worldwide export controls 
of the ITAR, while controlling all other military and intelligence 
items, particularly generic parts and components, through the CCL. BIS 
believes that the economic benefits for the proposed amendments include 
the significant reduction in the time spent determining and addressing 
issues associated with determining the jurisdictional status of such 
items now.
    In addition, parts and components currently controlled under the 
ITAR remain under ITAR control when incorporated into foreign-made 
items, regardless of the significance or insignificance of the item. 
This discourages foreign buyers from incorporating such U.S. content. 
The availability of de minimis treatment under the EAR, for those items 
that would no longer be controlled under the ITAR, may reduce the 
disincentive for foreign manufacturers to purchase U.S.-origin parts 
and components.
    Many exports and reexports of Category X protective equipment and 
related items that would be placed on the CCL, as proposed in this 
rule, would become eligible for license exceptions that apply to 
shipments to U.S. Government agencies, shipments valued at less than 
$1,500 (equipment, components, and production equipment only), parts 
and components being exported for use as replacement parts, temporary 
exports, and License Exception Strategic Trade Authorization (STA), 
reducing the number of licenses that exporters of these items would 
need. License Exceptions under the EAR would allow suppliers to send 
routine replacement parts and low level parts to NATO member states and 
other close allies and export control regime partners for use by those 
governments and for use by contractors building equipment for those 
governments or for the U.S. Government without having to obtain export 
licenses. Under License Exception STA, the exporter would need to 
furnish information about the item being exported to the consignee and 
obtain a statement from the consignee that, among other things, would 
commit the consignee to comply with the EAR and other applicable U.S. 
laws. Because such statements and

[[Page 33694]]

obligations can apply to an unlimited number of transactions and have 
no expiration date, they would create a net reduction in burden on 
transactions that the government routinely approves through the license 
application process that the License Exception STA statements would 
replace.
    Even for exports and reexports for which a license would be 
required under the proposed rule, the process would be simpler and less 
costly under the EAR. When a USML Category X article is moved to the 
CCL, the number of destinations for which a license is required would 
remain unchanged. However, the burden on the license applicant would 
decrease because the licensing procedure for CCL items is simpler and 
more flexible than the license procedure for USML articles.
    Under the ITAR 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 to determine 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 ITAR 
procedure, the applicant must caveat all sales presentations with a 
reference to the need for government approval, and is more likely to 
engage in substantial effort and expense only to find that the 
government will 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 specified consignee over the life of 
a license (normally two years, but may be longer if circumstances 
warrant a longer period), thus reducing the total number of licenses 
for which the applicant must apply.
    In addition, many applicants exporting or reexporting items that 
this rule proposes to transfer from the USML to the CCL would realize 
cost savings by eliminating some or all registration fees currently 
assessed under the ITAR's licensing procedure. Currently, USML 
applicants must pay to use DDTC's licensing procedure even if they 
never actually are authorized to export. 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 increases 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. 
Conversely, there are no registration or application processing fees 
for applications to export items listed on the CCL. Once the Category X 
items that are the subject to this rulemaking are moved from the USML 
to the CCL, entities currently applying for licenses from the 
Department of State will find their registration fees reduced if the 
number of ITAR licenses those entities need declines. If an entity's 
entire product line is moved to the CCL, its ITAR registration and 
registration fee requirements will be eliminated.
    De minimis treatment under the EAR would also become available for 
all items that this rule proposes to transfer from the USML to the CCL. 
Items subject to the ITAR will 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. However, 
foreign-made products incorporating items that this rule would move to 
the CCL would be subject to the EAR only if their total controlled 
U.S.-origin content exceeds 10 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 refrain from 
purchasing such U.S.-origin parts and components, a development that 
potentially would mean greater sales for U.S. suppliers, including 
small entities.
    For items currently on the CCL that would be moved from existing 
ECCNs to the new 600 series, license exception availability would be 
narrowed somewhat and the applicable de minimis threshold for foreign-
made products containing those items would in some cases be reduced 
from 25 percent to 10 percent. BIS is still considering comments made 
in response to the July 15 rule pertaining to these proposed de minimis 
levels and, as noted above, will consider de minimis-related comments 
to this proposed rule provided they are in the context of this proposed 
rule. However, BIS believes that any increased burden imposed by those 
actions will be offset substantially by the reduction in burden 
attributable to the moving of items from the USML to CCL and the 
compliance benefits associated with the consolidation of all WAML items 
subject to the EAR in one series of ECCNs.

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 a reduction in the number of items that would 
require a license, increased opportunities for use of license 
exceptions for exports to certain countries, 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. Accordingly, no IRFA is required, and none has been prepared.

List of Subjects

15 CFR Part 740

    Administrative practice and procedure, Exports, Reporting and 
recordkeeping requirements.

15 CFR Part 742

    Exports, Terrorism.

15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

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

PART 740--[AMENDED]

    1. The authority citation for part 740 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 12, 2011, 76 FR 50661 (August 16, 2011).

    2. As proposed to be amended July 15, 2011, at 76 FR 41958, and 
November 7, 2011, at 76 FR 65675, Sec.  740.2 is further amended by:
    a. Revising paragraph (a)(12) introductory text;
    b. Revising the last sentence of paragraph (a)(13)(i)(E); and
    c. Adding paragraph (a)(13)(i)(F).
    The revision and additions read as follows:

[[Page 33695]]

Sec.  740.2  Restrictions on all License Exceptions.

    (a) * * *
    (12) Items classified under the ``600 series'' that are destined to 
a country subject to a United States arms embargo or a United Nations 
Security Council arms embargo (Afghanistan, Belarus, Burma, China, Cote 
d'Ivoire, Cuba, Cyprus, Democratic Republic of Congo, Eritrea, Fiji, 
Haiti, Iraq, Iran, Lebanon, Liberia, Libya, North Korea, Somalia, Sri 
Lanka, Sudan, Syria, Venezuela, Vietnam, Yemen, and Zimbabwe) may not 
be authorized under any license exception except by License Exception 
GOV under Sec.  740.11(b)(2)(ii), License Exception TMP under Sec.  
740.9(a)(3)(v) for exports to Afghanistan and Iraq, and License 
Exception BAG under Sec.  740.14(h)(2) for exports to Afghanistan and 
Iraq.
* * * * *
    (13) * * *
    (i) * * *
    (E) * * * Except for MT-controlled items, exports and reexports to 
non-governmental end users in a country listed in Sec.  740.20(c)(1) 
are authorized through License Exception STA under Sec.  740.20(c)(1) 
so long as the item at issue at the time of export, reexport, or 
transfer (in-country) is ultimately destined for end use by the armed 
forces, police, paramilitary, law enforcement, customs, correctional, 
fire, and search and rescue agencies of a government of one of the 
Sec.  740.20(c)(1) countries or by the United States Government, or is 
for the ``development'' or ``production'' of an item for use by one of 
those agencies of those governments or a person in the United States; 
or
    (F) License Exception BAG (Sec.  740.14).
* * * * *
    3. Amend section 740.9 by adding paragraphs (a)(3)(i)(B)(5) through 
(7) and (a)(3)(v) to read as follows:

Sec.  740.9  Temporary imports, exports, and reexports (TMP).

* * * * *
    (a) * * *
    (3) * * *
    (i) * * *
    (B) * * *
    (5) Body armor classified under ECCN 1A005 exported or reexported 
in accordance with paragraph (a)(2)(i) of this section;
    (6) Body armor classified under ECCN 1A613.d exported in accordance 
with paragraph (a)(3)(v)(A) of this section, so long as the final 
destination is not a country listed in Sec.  740.2(a)(12); and
    (7) Body armor classified under ECCN 1A613.d exported to Iraq in 
accordance with paragraph (a)(3)(v)(B) of this section.
* * * * *
    (v) Restrictions specific to the export of body armor classified 
under ECCN 1A613.d. (A) Exports to countries not identified in Sec.  
740.2(a)(12). U.S. persons may temporarily export one set of body armor 
classified under ECCN 1A613.d to countries not identified in Sec.  
740.2(a)(12), provided that:
    (1) A declaration by the U.S. person and an inspection by a customs 
officer are made;
    (2) The body armor is with the U.S. person's baggage or effects, 
whether accompanied or unaccompanied (but not mailed); and
    (3) The body armor is for that person's exclusive use and not for 
reexport or other transfer of ownership.
    (B) Exports to Afghanistan or Iraq. U.S. persons may temporarily 
export one set of body armor classified under ECCN 1A613.d to 
Afghanistan or Iraq, provided that:
    (1) A declaration by the U.S. person and an inspection by a customs 
officer are made;
    (2) The body armor is with the U.S. person's baggage or effects, 
whether accompanied or unaccompanied (but not mailed);
    (3) The body armor is for that person's exclusive use and not for 
reexport or other transfer of ownership; and
    (4) For temporary exports to Iraq, the U.S. person utilizing the 
license exception is either a person affiliated with the U.S. 
Government traveling on official business or is a person not affiliated 
with the U.S. Government but traveling to Iraq under a direct 
authorization by the Government of Iraq and engaging in humanitarian 
activities for, on behalf of, or at the request of the Government of 
Iraq.
* * * * *
    4. Amend section 740.14 by adding paragraph (h) to read as follows:

Sec.  740.14  Baggage (BAG).

* * * * *
    (h) Special provisions: body armor controlled under ECCN 1A613.d. 
(1) Exports to countries not identified in Sec.  740.2(a)(12). U.S. 
persons may temporarily export one set of body armor classified under 
ECCN 1A613.d to countries not identified in Sec.  740.2(a)(12) provided 
that:
    (i) A declaration by the U.S. person and an inspection by a customs 
officer are made;
    (ii) The body armor is with the U.S. person's baggage or effects, 
whether accompanied or unaccompanied (but not mailed); and
    (iii) The body armor is for that person's exclusive use and not for 
reexport or other transfer of ownership.
    (2) Exports to Afghanistan or Iraq. U.S. persons may temporarily 
export one set of body armor classified under ECCN 1A613.d to 
Afghanistan or Iraq provided that:
    (i) A declaration by the U.S. person and an inspection by a customs 
officer are made;
    (ii) The body armor is with the U.S. person's baggage or effects, 
whether accompanied or unaccompanied (but not mailed);
    (iii) The body armor is for that person's exclusive use and not for 
reexport or other transfer of ownership; and
    (iv) For temporary exports to Iraq only, the U.S. person utilizing 
this license exception is either a person employed by or under contract 
to the U.S. Government traveling on official business or is a person 
not employed by or under contract to the U.S. Government but traveling 
to Iraq under a direct authorization by the Government of Iraq and 
engaging in humanitarian activities for, on behalf of, or at the 
request of the Government of Iraq.

    Note to paragraph (h): Body armor controlled under ECCN 1A005 is 
eligible for this License Exception under paragraph (b) of this 
section.

PART 742--[AMENDED]

    5. The authority citation for 15 CFR part 742 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 
U.S.C. 7210; Sec 1503, Pub. L. 108-11, 117 Stat. 559; E.O. 12058, 43 
FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 
1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 
950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 
66 FR 44025, 3 CFR, 2001 Comp., p. 783; Presidential Determination 
2003-23 of May 7, 2003, 68 FR 26459, May 16, 2003; Notice of August 
12, 2011, 76 FR 50661 (August 16, 2011); Notice of November 9, 2011, 
76 FR 70319 (November 10, 2011).

    6. Amend section 742.6 by revising paragraph (a)(1) to read as 
follows:

Sec.  742.6  Regional stability.

    (a) * * *
    (1) RS Column 1 License Requirements in General. As indicated in 
the CCL and in RS column 1 of the Commerce Country Chart (see 
Supplement No. 1 to part 738 of the EAR), a license is required to all 
destinations, except Canada, for items described on the CCL under ECCNs 
0A606 (except 0A606.b and .y); 0A614

[[Page 33696]]

(except 0A614.y); 0A617 (except 0A617.y); 0B606 (except 0B606.y); 0B614 
(except 0B614.y); 0B617 (except 0B617.y); 0C606 (except 0C606.y); 0C617 
(except 0C617.y); 0D606 (except 0D606.y); 0D614 (except 0D614.y); 0D617 
(except 0D617.y); 0E606 (except 0E606.y); 0E614 (except 0E614.y); 0E617 
(except 0E617.y); 1A613 (except 1A613.y); 1B608 (except 1B608.y); 1B613 
(except 1B613.y); 1C608; 1D608 (except 1D608.y); 1D613 (except 
1D613.y); 1E608 (except 1E608.y); 1E613 (except 1E613.y); 3A982; 3D982; 
3E982; 6A002.a.1, a.2, a.3, .c, or .e; 6A003.b.3, and b.4.a; 6A008.j.1; 
6A998.b; 6D001 (only ``software'' for the ``development'' or 
``production'' of items in 6A002.a.1, a.2, a.3, .c; 6A003.b.3 and .b.4; 
or 6A008.j.1); 6D002 (only ``software'' for the ``use'' of items in 
6A002.a.1, a.2, a.3, .c; 6A003.b.3 and .b.4; or 6A008.j.1); 6D003.c; 
6D991 (only ``software'' for the ``development,'' ``production,'' or 
``use'' of equipment classified under 6A002.e or 6A998.b); 6E001 (only 
``technology'' for ``development'' of items in 6A002.a.1, a.2, a.3 
(except 6A002.a.3.d.2.a and 6A002.a.3.e for lead selenide focal plane 
arrays), and .c or .e, 6A003.b.3 and b.4, or 6A008.j.1); 6E002 (only 
``technology'' for ``production'' of items in 6A002.a.1, a.2, a.3, .c, 
or .e, 6A003.b.3 or b.4, or 6A008.j.1); 6E991 (only ``technology'' for 
the ``development,'' ``production,'' or ``use'' of equipment classified 
under 6A998.b); 6D994; 7A994 (only QRS11-00100-100/101 and QRS11-0050-
443/569 Micromachined Angular Rate Sensors); 7D001 (only ``software'' 
for ``development'' or ``production'' of items in 7A001, 7A002, or 
7A003); 7E001 (only ``technology'' for the ``development'' of inertial 
navigation systems, inertial equipment, and specially designed 
components therefor for civil aircraft); 7E002 (only ``technology'' for 
the ``production'' of inertial navigation systems, inertial equipment, 
and specially designed components therefor for civil aircraft); 7E101 
(only ``technology'' for the ``use'' of inertial navigation systems, 
inertial equipment, and specially designed components for civil 
aircraft); 8A609 (except 8A609.y); 8A620 (except 8A620.y); 8B609 
(except 8B609.y); 8B620 (except 8B620.y); 8C609 (except 8C609.y); 8D609 
(except software for the ``development,'' ``production,'' operation, or 
maintenance of commodities controlled by 8A609.y, 8B609.y, or 8C609.y); 
8D620 (except software for the ``development,'' ``production,'' 
operation, or maintenance of commodities controlled by 8A620.y or 
8B620.y); 8E609 (except ``technology'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, overhaul, 
or refurbishment of commodities controlled by 8A609.y, 8B609.y, or 
8C609.y); 8E620 (except ``technology'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, overhaul, 
or refurbishment of commodities controlled by 8A620.y or 8B620.y); 
9A610 (except 9A610.y); 9A619 (except 9A619.y); 9B610 (except 9B610.y); 
9B619 (except 9B619.y); 9C610 (except 9C610.y); 9C619 (except 9C619.y); 
9D610 (except software for the ``development,'' ``production,'' 
operation, installation, maintenance, repair, or overhaul of 
commodities controlled by 9A610.y, 9B610.y, or 9C610.y); 9D619 (except 
software for the ``development,'' ``production,'' operation, or 
maintenance of commodities controlled by 9A619.y, 9B619.y, or 9C619.y); 
9E610 (except ``technology'' for the ``development,'' ``production,'' 
operation, installation, maintenance, repair, overhaul, or 
refurbishment of commodities controlled by ECCN 9A610.y, 9B610.y, or 
9C610.y); and 9E619 (except ``technology'' for the ``development,'' 
``production'' operation, installation, maintenance, repair, overhaul, 
or refurbishment of commodities controlled by ECCN 9A619.y, 9B619.y, or 
9C619.y).
* * * * *

PART 774--[AMENDED]

    7. The authority citation for 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 12, 2011, 76 FR 50661 (August 16, 2011).

    8. In Supplement No. 1 to part 774, Category 0, amend Export 
Control Classification Number 0A018 by:
    a. Revising the ``Related Controls'' paragraph in the List of Items 
Controlled section to read below;
    b. Removing and reserving ``Items'' paragraph (d) in the List of 
Items Controlled section; and
    c. Removing the ``Note'' to ``Items'' paragraph (d) in the List of 
Items Controlled section.

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

* * * * *

0A018 Items on the Wassenaar Munitions List.

* * * * *

List of Items Controlled

    Unit: * * *
    Related Controls: (1) See also 0A979, 0A988, and 22 CFR 121.1 
Categories I(a), III(b-d), and X(a). (2) See 0A617.a for items formerly 
controlled by ECCN 0A018.a. (3) See 1A613.c for military helmets 
providing less than NIJ Type IV protection and 1A613.y.1 for 
conventional military steel helmets that, immediately prior to [Insert 
effective date of final rule], were classified under 0A018.d and 0A988. 
(4) See 22 CFR 121.1 Category X(a)(5) and (a)(6) for controls on other 
military helmets.
* * * * *
    9. In Supplement No. 1 to part 774, Category 0, amend Export 
Control Classification Number 0A988 by revising to read as follows:

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

* * * * *

0A988 Conventional military steel helmets as described by 0A018.d.1.; 
and machetes.

    No items currently are in this ECCN. See ECCN 1A613.y.1 for 
conventional steel helmets that, immediately prior to [Insert effective 
date of final rule], were classified under 0A988. Machetes, which were 
classified under ECCN 0A988 prior to [Insert effective date of final 
rule], are designated as EAR99 items.
    10. In Supplement No. 1 to part 774, Category 1, amend Export 
Control Classification Number 1A005 by:
    a. Revising the Related Controls paragraph; and
    b. Revising paragraphs a. and b. in the Items paragraph of the List 
of Items Controlled section, to read as follows:

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

* * * * *

1A005 Body armor and components therefor, as follows (see List of Items 
Controlled).

* * * * *

List of Items Controlled

    Unit: * * *
    Related Controls: (1) Bulletproof and bullet resistant vests (body 
armor) providing NIJ Type IV protection or greater are subject to the 
ITAR (see 22 CFR 121.1 Category X(a)). (2) Soft body armor and 
protective garments manufactured to military standards or 
specifications that provide protection

[[Page 33697]]

equal to NIJ level III or less are classified under ECCN 1A613.d.1. (3) 
Hard armor plates providing NIJ level III ballistic protection are 
classified under ECCN 1A613.d.2. (4) Police helmets and shields are 
classified under ECCN 0A979. (5) Other personal protective 
``equipment'' ``specially designed'' for military applications not 
controlled by the USML or elsewhere in the CCL are classified under 
ECCN 1A613.e. (6) For ``fibrous or filamentary materials'' used in the 
manufacture of body armor, see ECCN 1C010. (7) See Sec.  746.8(b)(1) 
for additional licensing requirements concerning this entry.
* * * * *
    Items:
    a. Soft body armor not manufactured to military standards or 
specifications that provide ballistic protection equal to or less than 
NIJ level III (NIJ 0101.06, July 2008).
    b. Hard body armor plates that provide ballistic protection less 
than NIJ level III (NIJ 0101.06, July 2008).
* * * * *
    11. In Supplement No. 1 to part 774, Category 1, add a new Export 
Control Classification Number 1A613 between ECCNs 1A290 and 1A984 to 
read as follows:

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

* * * * *

1A613 Armored and protective ``equipment'' and related commodities, as 
follows:

License Requirements

    Reason for Control: NS, RS, AT

------------------------------------------------------------------------
               Control(s)                         Country chart
------------------------------------------------------------------------
NS applies to entire entry except        NS Column 1.
 1A613.y.
RS applies to entire entry except        RS Column 1.
 1A613.y.
AT applies to entire entry.............  AT Column 1.
------------------------------------------------------------------------

License Exceptions

    LVS: $1500.
    GBS: N/A.
    CIV: N/A.
    STA: Paragraph (c)(1) of License Exception STA (Sec.  740.20(c)(1)) 
may be used for items in 1A613 without the need for a determination 
described in Sec.  740.20(g). Paragraph (c)(2) of License Exception STA 
(Sec.  740.20(c)(2)) of the EAR may not be used for any item in 1A613.

List of Items Controlled

    Unit: End items in number; parts, component, accessories and 
attachments in $ value
    Related Controls: (1) Defense articles, such as materials made from 
classified information, that are controlled by USML Category X or XIII 
of the ITAR, and technical data (including software) directly related 
thereto, are subject to the ITAR. (2) See ECCN 0A919 for foreign-made 
``military commodities'' that incorporate more than 10% U.S.-origin 
``600 series'' items.
    Related Definitions: References to ``NIJ Type'' protection are to 
the National Institute of Justice Classification guide at NIJ Standard-
0101.06, Ballistic Resistance of Body Armor, and NIJ Standard 0108.01, 
Ballistic Resistant Protective Materials.
    Items:
    a. Armored plate ``specially designed'' for military use and not 
controlled by the USML.

    Note: For controls on body armor plates, see ECCN 1A613.d.2 and 
USML Category X(a)(1).

    b. Shelters ``specially designed'' to:
    b.1. Provide ballistic protection for military systems, or
    b.2. Protect against nuclear, biological, or chemical 
contamination.
    c. Military helmets and helmet shells providing less than NIJ Type 
IV protection.

    Note 1: See ECCN 0A979 for controls on police helmets and ECCN 
1A613.y.1 for military steel helmets.

    Note 2: See USML Category X(a)(5) and (a)(6) for controls on 
other military helmets.

    d. Body armor and protective garments, as follows:
    d.1. Soft body armor and protective garments manufactured to 
military standards or specifications that provide ballistic protection 
equal to or less than NIJ level III (NIJ 0101.06, July 2008); or
    d.2. Hard body armor plates that provide ballistic protection equal 
to NIJ level III (NIJ 0101.06, July 2008).

    Note: See ECCN 1A005 for controls on soft body armor and 
protective garments not manufactured to military standards or 
specifications and hard body armor plates providing less than NIJ 
level III protection. For body armor providing NIJ Type IV 
protection or greater, see USML Category X(a)(1).

    e. Other personal protective ``equipment'' ``specially designed'' 
for military applications not controlled by the USML or elsewhere in 
the CCL.
    f. to w. [RESERVED]
    x. ``Parts,'' ``components,'' ``accessories and attachments'' that 
are ``specially designed'' for a commodity controlled by ECCN 1A613 and 
not controlled elsewhere in the USML or CCL.

    Note: 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 material 
composition, geometry, or function as commodities controlled by ECCN 
1A613.x are controlled by ECCN 1A613.x.

    y. Specific ``parts,'' ``components,'' ``accessories and 
attachments'' ``specially designed'' for a commodity subject to control 
in this ECCN and not elsewhere specified in the CCL, as follows:
    y.1 Conventional military steel helmets.
    y.2 to y.98 [RESERVED]
    y.99. Commodities not identified on the CCL that (i) have been 
determined, in an applicable commodity jurisdiction determination 
issued by the U.S. Department of State, to be subject to the EAR and 
(ii) would otherwise be controlled elsewhere in ECCN 1A613.
    12. In Supplement No. 1 to part 774, Category 1, add a new Export 
Control Classification Number 1B613 between ECCN 1B233 and 1B999 to 
read as follows:

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

* * * * *

1B613 Test, inspection, and ``production'' ``equipment'' and related 
commodities ``specially designed'' for the ``development'' or 
``production'' of commodities controlled by ECCN 1A613 or USML Category 
X.

License Requirements

    Reason for Control: NS, RS, AT

------------------------------------------------------------------------
               Control(s)                         Country chart
------------------------------------------------------------------------
NS applies to entire entry except        NS Column 1.
 1B613.y.
RS applies to entire entry except        RS Column 1.
 1B613.y.
AT applies to entire entry.............  AT Column 1.
------------------------------------------------------------------------

License Exceptions

    LVS: $1500.
    GBS: N/A.
    CIV: N/A.
    STA: Paragraph (c)(1) of License Exception STA (Sec.  740.20(c)(1)) 
may be used for items in 1B613 without the need for a determination 
described in Sec.  740.20(g). Paragraph (c)(2) of License Exception STA 
(Sec.  740.20(c)(2)) of the EAR may not be used for any item in 1B613.

List of Items Controlled

    Unit: N/A.
    Related Controls:
    Related Definitions: N/A.
    Items:
    a. Test, inspection, and ``production'' ``equipment,'' not 
controlled by USML

[[Page 33698]]

Category X(c), that is ``specially designed'' for the ``production'' or 
``development'' of commodities controlled by ECCN 1A613 or USML 
Category X.
    b. Plasma pressure compaction (P2C) equipment ``specially 
designed'' for the production of ceramic or composite body armor plates 
controlled by ECCN 1A613 or USML Category X.
    c. to x. [RESERVED]
    y. Specific test, inspection, and ``production'' ``equipment'' 
``specially designed'' for the ``production'' or ``development'' of 
commodities controlled by ECCN 1A613 or USML Category X, as follows:
    y.1 to y.98 [RESERVED]
    y.99 Commodities not identified on the CCL that (i) have been 
determined, in an applicable commodity jurisdiction determination 
issued by the U.S. Department of State, to be subject to the EAR and 
(ii) would otherwise be controlled elsewhere in ECCN 1B613.
    13. In Supplement No. 1 to part 774, Category 1, add a new Export 
Control Classification Number 1D613 between ECCN 1D390 and 1D993 to 
read as follows:

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

* * * * *

1D613 ``Software'' ``specially designed'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, overhaul 
or refurbishing of commodities controlled by 1A613 or 1B613, as follows 
(see list of items controlled).

License Requirements

    Reason for Control: NS, RS, AT

------------------------------------------------------------------------
               Control(s)                         Country chart
------------------------------------------------------------------------
NS applies to entire entry except        NS Column 1.
 1D613.y.
RS applies to entire entry except        RS Column 1.
 1D613.y.
AT applies to entire entry.............  AT Column 1.
------------------------------------------------------------------------

License Exceptions

    CIV: N/A.
    TSR: N/A.
    STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2)) 
of the EAR may not be used for any ``software'' in 1D613.

List of Items Controlled

    Unit: $ value.
    Related Controls: ``Software'' directly related to articles 
controlled by USML Category X is subject to the control of USML 
paragraph X(e) of the ITAR. See ECCN 0A919 for foreign made ``military 
commodities'' that incorporate more than 10% U.S.-origin ``600 series'' 
items.
    Related Definitions: N/A.
    Items:
    a. ``Software'' (other than ``software'' controlled in paragraph .y 
of this entry) ``specially designed'' for the ``development,'' 
``production,'' operation or maintenance of commodities controlled by 
ECCNs 1A613 (except 1A613.y) or 1B613 (except 1B613.y).
    b. to x. [RESERVED]
    y. Specific ``software'' ``specially designed'' for the 
``production,'' ``development,'' or operation or maintenance of 
commodities controlled by ECCNs 1A613 or 1B613, as follows:
    y.1. Specific ``software'' ``specially designed'' for the 
``production,'' ``development,'' operation or maintenance of 
commodities controlled by ECCNs 1A613.y or 1B613.y.
    y.2 through y.98 [RESERVED]
    y.99 ``Software'' not identified on the CCL that (i) has been 
determined to be subject to the EAR in a commodity jurisdiction 
determination issued by the U.S. Department of State and (ii) would 
otherwise be controlled elsewhere in ECCN 1D613.
    14. In Supplement No. 1 to part 774, Category 1, add a new Export 
Control Classification Number 1E613 between ECCN 1E355 and 1E994 to 
read as follows:

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

* * * * *

1E613 ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, overhaul 
or refurbishing of commodities controlled by 1A613 or 1B613 or 
``software'' controlled by 1D613, as follows (see list of items 
controlled).

License Requirements

    Reason for Control: NS, RS, AT

------------------------------------------------------------------------
               Control(s)                         Country chart
------------------------------------------------------------------------
NS applies to entire entry except        NS Column 1.
 1E613.y.
RS applies to entire entry except        RS Column 1.
 1E613.y.
AT applies to entire entry.............  AT Column 1.
------------------------------------------------------------------------

License Exceptions

    CIV: N/A.
    TSR: N/A.
    STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2)) 
of the EAR may not be used for any ``technology'' in 1E613.

List of Items Controlled

    Unit: $ value.
    Related Controls: Technical data directly related to articles 
controlled by USML Category X is subject to the control of USML 
paragraph X(e) of the ITAR. See ECCN 0A919 for foreign made ``military 
commodities'' that incorporate more than 10% U.S.-origin ``600 series'' 
items.
    Related Definitions: N/A
    Items:
    a. ``Technology'' (other than ``technology'' controlled by 
paragraph .y of this entry) ``required'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, overhaul, 
or refurbishing of commodities or ``software'' controlled by ECCNs 
1A613 (except 1A613.y), 1B613 (except 1B613.y), or 1D613 (except 
1D613.y).
    b. through x. [RESERVED]
    y. Specific ``technology'' ``required'' for the ``production,'' 
``development,'' operation, installation, maintenance, repair, or 
overhaul of commodities or software controlled by ECCNs 1A613, 1B613, 
or 1D613, as follows:
    y.1. Specific ``technology'' ``required'' for the ``production,'' 
``development,'' operation, installation, maintenance, repair or 
overhaul of commodities or software controlled by ECCNs 1A613.y, 
1B613.y, or 1D613.y.
    y.2. through y.98 [RESERVED]
    y.99. ``Technology'' that would otherwise be controlled elsewhere 
in this entry but that (i) has been determined to be subject to the EAR 
in a commodity jurisdiction determination issued by the U.S. Department 
of State and (ii) is not otherwise identified elsewhere on the CCL.

    Dated: May 30, 2012.
Kevin J. Wolf,
Assistant Secretary of Commerce for Export Administration.
[FR Doc. 2012-13745 Filed 6-6-12; 8:45 am]
BILLING CODE 3510-33-P