Document ID: BIS-2017-0010-0001
Agency: bis
Document Type: Rule
Title: Revisions to Sudan Licensing Policy
Posted Date: 2017-01-17T05:00Z

[Federal Register Volume 82, Number 10 (Tuesday, January 17, 2017)]
[Rules and Regulations]
[Pages 4781-4783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00836]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 742

[Docket No. 160901810-6810-01]
RIN 0694-AH10

 Revisions to Sudan Licensing Policy

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: This rule revises the policy of review for applications for 
licenses to export or reexport to Sudan certain items that are intended 
to ensure the safety of civil aviation or the safe operation of fixed-
wing, commercial passenger aircraft. Such applications will now be 
reviewed under a general policy of approval rather than a general 
policy of denial.
    This rule also revises the review policy from a general policy of 
denial to a general policy of approval for applications for licenses to 
export or reexport to Sudan certain items for use to inspect, design, 
construct, operate, improve, maintain, repair, overhaul or refurbish 
railroads in Sudan. This rule does not create any new license 
requirements or remove any existing license requirements for exports or 
reexports to Sudan. BIS is making these licensing policy changes in 
connection with ongoing U.S.-Sudan bilateral engagement, and with the 
aim of enhancing the safety of Sudan's civil aviation and improving the 
country's railroads. This action takes into account the United States' 
goals to improve regional peace and security.
    This rule also removes two instances of ``contract sanctity dates'' 
pertaining to the export and reexport of certain items to Sudan from 
the EAR that currently serve no practical purpose.
    BIS is taking these actions in coordination with the Department of 
the Treasury's Office of Foreign Assets Control (OFAC), which is 
amending the Sudanese Sanctions Regulations.

DATES: Effective Date: January 17, 2017.

FOR FURTHER INFORMATION CONTACT: Foreign Policy Division, Bureau of 
Industry and Security, Phone: (202) 482-4252.

SUPPLEMENTARY INFORMATION: 

Background

    Pursuant to Sec.  742.10 of the Export Administration Regulations 
(EAR), in keeping with Sudan's designation as a state sponsor of 
terrorism, persons must obtain a license to export or reexport to Sudan 
all aircraft controlled on the Commerce Control List (Supp. No. 1 to 
part 774 of the EAR) (CCL) and to export related parts and components 
that are controlled on the CCL. Prior to the publication of this rule, 
the EAR imposed a general policy of denial on license applications for 
such exports or reexports to all end-users and for all end uses in 
Sudan. This rule revises the licensing policy to a general policy of 
approval for parts, components, materials, equipment, and technology 
that are controlled on the CCL only for anti-terrorism reasons and that 
are intended to ensure the safety of civil aviation or the safe 
operation of fixed-wing, commercial passenger aircraft.
    Applications to export or reexport to Sudan complete aircraft and 
applications to export or reexport to Sudan aircraft-related items that 
are controlled for anti-terrorism reasons and one or more additional 
reasons (for example, missile technology reasons) will continue to be 
reviewed under a general policy of denial to all end users.
    This rule also revises the general policy of denial to a general 
policy of approval for license applications to export or reexport to 
Sudan items controlled on the CCL only for anti-terrorism reasons that 
will be used to inspect, design, construct, operate, improve, maintain, 
repair, overhaul or refurbish railroads in Sudan.
    With respect to both aircraft related-items and railroad-related 
items, the general policies of approval set forth in this rule apply 
only to exports and reexports to Sudan for civil uses by non-sensitive 
end-users within Sudan. Sensitive end users, who are not eligible for 
these policies, include Sudan's military, police, and/or intelligence 
services and persons that are owned by or are part of or are operated 
or controlled by those services. Additionally, license applications for 
the export or reexport of items that would substantially benefit such 
sensitive end users will generally be denied. To implement these 
policies, this rule revises Sec.  742.10(b)(3) of the EAR, which sets 
forth exceptions to the general policies of denial that apply to most 
license applications to export or reexport to Sudan.
    In conjunction with this rule, the Department of the Treasury's 
Office of Foreign Assets Control (OFAC) is

[[Page 4782]]

amending the Sudanese Sanctions Regulations, 31 CFR part 538, to add a 
new general license that authorizes all transactions prohibited by 
those regulations and by Executive Orders 13067 and 13412. Under OFAC's 
new general license, newly-authorized transactions include the 
processing of transactions involving persons in Sudan; the importation 
of goods and services from Sudan; the exportation of goods, technology, 
and services to Sudan; and transactions involving property in which the 
Government of Sudan has an interest. Persons interested in exporting or 
reexporting to Sudan goods and technology that are subject to the EAR, 
including items related to railroads or the safety of civil aviation or 
safe operation of fixed-wing commercial passenger aircraft, pursuant to 
OFAC's new general license should consult BIS regarding any licensing 
obligations they may have under the EAR.
    BIS will continue to evaluate license applications in light of 
section 6(j) of the Export Administration Act of 1979 (EAA), as 
continued in effect under the International Emergency Economic Powers 
Act, and any other relevant legal requirements.
    This rule also removes and reserves paragraphs (c)(6)(iii) and 
(c)(10)(iii) of Supplement No. 2 to part 742, which state licensing 
policy and contract sanctity dates for aircraft, and cryptographic and 
cryptologic equipment, respectively. The licensing policies for these 
commodities are stated in paragraphs (b)(1)(iv) and (b)(1)(v) of Sec.  
742.10 and need not be repeated in Supplement No. 2. Moreover, as a 
consequence of this rule, which revises licensing policy for certain 
aircraft-related items and railroad-related items, the latter category 
potentially including cryptographic and cryptologic equipment, 
paragraphs (c)(6)(iii) and (c)(10)(iii)'s statements of a general 
policy of denial for all end-users in Sudan is no longer accurate. 
Additionally, the recitation of contract sanctity dates in Supplement 
No. 2 does not serve a practical purpose. The term ``contract sanctity 
date'' draws on section 6(p) of the EAA. That section constrains BIS's 
ability to limit exports and reexports in performance of contracts 
entered into prior to the date of imposition of export controls. The 
references to the contract sanctity dates in the supplement do not 
limit or otherwise affect the right of any license applicant to assert 
that the provisions of section 6(p) of the EAA apply to the license 
application that it is submitting. The identified dates are also long 
outdated, with March 21, 2003, the most recent contract sanctity date 
that this rule removes from Supplement No. 2 to part 742.

Export Administration Act of 1979

    Although the Export Administration Act of 1979 expired on August 
20, 2001, the President, through Executive Order 13222 of August 17, 
2001, 3 CFR, 2001 Comp., p. 783 (2002), as amended by Executive Order 
13637 of March 8, 2013, 78 FR 16129 (March 13, 2013), and as extended 
by the Notice of August 4, 2016, 81 FR 52587 (August 8, 2016), has 
continued the Export Administration Regulations in effect under the 
International Emergency Economic Powers Act. BIS continues to carry out 
the provisions of the Export Administration Act, as appropriate and to 
the extent permitted by law, pursuant to Executive Order 13222 as 
amended by Executive Order 13637.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive 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 determined not to be significant for 
purposes of Executive Order 12866.
    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 
involves a collection of information approved under OMB control number 
0694-0088--Simplified Network Application Processing+ System (SNAP+) 
and the Multipurpose Export License Application, which carries an 
annual estimated burden of 31,833 hours. BIS believes that this rule 
will have no material impact on that burden. To the extent that it has 
any impact, BIS believes that the benefits of this rule justify any 
additional burden it creates. This rule does not impose any new license 
requirements; in fact, it creates more favorable license application 
review policies for exports and reexports to Sudan. These more 
favorable policies might increase the number of license applications 
submitted to BIS because applicants might be more optimistic about 
obtaining approval. However, the benefit to license applicants in the 
form of greater likelihood of approval justifies any additional burden. 
Send comments regarding this burden estimate or any other aspect of 
this collection of information, including suggestions for reducing the 
burden, to Jasmeet K. Seehra, Office of Management and Budget, by email 
at jseehra@omb.eop.gov or by fax to (202) 395-7285 and to Sheila 
Quarterman at sheila.quarterman@bis.doc.gov.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under Executive Order 13132.
    4. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring notice of proposed rulemaking and the opportunity for 
public participation, and a delay in effective date, are inapplicable 
because this regulation involves a military or foreign affairs function 
of the United States (see 5 U.S.C. 553(a)(1)). BIS is making these 
licensing policy changes in connection with ongoing U.S.-Sudan 
bilateral engagement, and with the aim of enhancing the safety of 
Sudan's civil aviation and improving its railroads. This decision takes 
into account our goals to improve regional peace and security. A delay 
in effective date would undermine progress in that bilateral engagement 
adversely impacting the U.S. Government's foreign policy goals of 
improving regional peace and security.
    Further, no other law requires that a notice of proposed rulemaking 
and an opportunity for public comment be given for this rule. Because a 
notice of proposed rulemaking and an opportunity for public comment are 
not required to be given for this rule under 5 U.S.C. 553, or by any 
other law, the requirements of the Regulatory Flexibility Act (5 U.S.C. 
601 et seq.) are not applicable.

List of Subjects in 15 CFR Part 742

    Exports, Terrorism.

    For the reasons set forth in the preamble, part 742 of the Export 
Administration Regulations (15 CFR parts 730-774) is amended as 
follows:

PART 742--[AMENDED]

0
1. The authority citation for 15 CFR part 742 continues to read as 
follows:

    Authority:  50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22 
U.S.C. 3201 et seq.;

[[Page 4783]]

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, 68 FR 26459, 
3 CFR, 2004 Comp., p. 320; Notice of August 4, 2016, 81 FR 52587 
(August 8, 2016); Notice of November 8, 2016, 81 FR 79379 (November 
10, 2016).

0
2. Section 742.10 is amended by:
0
a. Adding a paragraph heading to paragraph (b)(1) introductory text;
0
b. Revising the first sentence of paragraph (b)(1)(iv);
0
c. Adding a paragraph heading to paragraph (b)(2); and
0
d. Revising paragraph (b)(3).
    The additions and revisions read as follows:

Sec.  742.10   Anti-terrorism: Sudan.

* * * * *
    (b) * * *
    (1) General policy of denial. * * *
* * * * *
    (iv) Except as provided in paragraph (b)(3)(ii) of this section, 
all aircraft (powered and unpowered), helicopters, engines and related 
spare parts and components. * * *
* * * * *
    (2) Military end-user and end-use policy. * * *
    (3) Other licensing policies. The licensing policies set forth in 
this paragraph apply notwithstanding the provisions of paragraphs 
(b)(1) and (b)(2) of this section.
    (i) Case-by-case review policy. Applications to export or reexport 
to Sudan will be considered on a case-by-case basis in the four 
situations described in paragraphs (b)(3)(i)(A) through (D) of this 
section.
    (A) The transaction involves the reexport to Sudan of items where 
Sudan was not the intended ultimate destination at the time of original 
export from the United States, provided that the export from the United 
States occurred prior to the applicable contract sanctity date.
    (B) The U.S. content of foreign-produced commodities is 20% or less 
by value.
    (C) The commodities are medical items.
    (D) The items are telecommunications equipment and associated 
computers, software and technology for civil end use, including items 
useful for the development of civil telecommunications network 
infrastructure.
    Note to paragraph (b)(3)(i). Applicants seeking approval of their 
license applications pursuant to this paragraph must include with their 
applications documentation demonstrating how their proposed transaction 
is consistent with one or more of the four situations described in this 
paragraph.
    (ii) General policy of approval. Applications to export or reexport 
to Sudan the following for civil uses by non-sensitive end-users within 
Sudan will be reviewed with a general policy of approval.
    (A) Parts, components, materials, equipment, and technology that 
are controlled on the Commerce Control List (Supp. No. 1 to part 774 of 
the EAR) only for anti-terrorism reasons that are intended to ensure 
the safety of civil aviation or the safe operation of fixed-wing 
commercial passenger aircraft.
    (B) Items controlled on the Commerce Control List (Supp. No. 1 to 
part 774 of the EAR) only for anti-terrorism reasons that will be used 
to inspect, design, construct, operate, improve, maintain, repair, 
overhaul or refurbish railroads in Sudan.
    Note to paragraph (b)(3)(ii). Applications will generally be denied 
for exports or reexports that would substantially benefit a sensitive 
end user. Sensitive end users include Sudan's military, police, and 
intelligence services and persons that are owned by or are part of or 
operated or controlled by those services.
* * * * *

Supplement No. 2 to Part 742 [Amended]

0
 3. In Supplement No. 2 to part 742, remove and reserve paragraphs 
(c)(6)(iii) and (c)(10)(iii).

    Dated: January 4, 2017.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2017-00836 Filed 1-13-17; 8:45 am]
 BILLING CODE 3510-33-P