Document ID: BIS-2013-0012-0001
Agency: bis
Document Type: Proposed Rule
Title: Export Administration Regulations: Control of Spacecraft Systems and Related Items the President Determines No Longer Warrant Control Under the United States Munitions List
Posted Date: 2013-05-24T04:00Z

[Federal Register Volume 78, Number 101 (Friday, May 24, 2013)]
[Proposed Rules]
[Pages 31431-31443]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-11986]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 734, 736, 740, 742, 748, 758, 772, and 774

[Docket No. 130110030-3030-01]
RIN 0694-AF87

Export Administration Regulations (EAR): Control of Spacecraft 
Systems 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 certain articles the 
President determines no longer warrant control under United States 
Munitions List (USML) Category XV--spacecraft and related items--would 
be controlled on the Commerce Control List (CCL). Such items would be 
controlled by new Export Control Classification Numbers (ECCNs) 9A515, 
9B515, 9D515, and 9E515 proposed by this rule and existing ECCNs. 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 
from the Department of State, Directorate of Defense Trade Controls, 
which would amend the list of articles controlled by USML Category XV. 
The revisions proposed in this rule are part of Commerce's 
retrospective regulatory review plan under EO 13563 completed in August 
2011.

DATES: Comments must be received by July 8, 2013.

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-2013-0012.
     By email directly to publiccomments@bis.doc.gov. Include 
RIN 0694-AF87 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-AF87.
    Commerce's full plan can be accessed at: http://open.commerce.gov/
news/

[[Page 31432]]

2011/08/23/commerce-plan-retrospective-analysis-existing-rules.

FOR FURTHER INFORMATION CONTACT: For questions about the ECCNs included 
in this rule contact Dennis Krepp, Office of National Security and 
Technology Transfer Controls, Bureau of Industry and Security, U.S. 
Department of Commerce, Telephone: 202-482-1309, Email: 
Dennis.Krepp@bis.doc.gov. For general questions about the ``500 
series'' regulatory changes, contact Robert Monjay, Regulatory Policy 
Division, Office of Exporter Services, Bureau of Industry and Security, 
at 202-482-2440 or Robert.Monjay@bis.doc.gov.

SUPPLEMENTARY INFORMATION: 

Background

    On January 2, 2013, President Obama signed the National Defense 
Authorization Act for Fiscal Year 2013 (``2013 NDAA'') (Pub. L. 112-
239). Section 1261 of the 2013 NDAA amended Section 1513 of the Strom 
Thurmond National Defense Authorization Act for Fiscal Year 1999 
(``1999 NDAA'') by striking the requirement that all satellites and 
related items be subject to the export control jurisdiction of the 
International Traffic in Arms Regulations (ITAR) (22 CFR parts 120 
through 130). The President is now authorized and obligated, pursuant 
to section 38(f) of the Arms Export Control Act (AECA) (22 U.S.C. 
2778(f)), to review the USML ``to determine what items, if any, no 
longer warrant export controls under'' the AECA.
    This notice requests public comment on the changes described in 
this proposed rule and the corresponding State Department's proposed 
revisions to the ITAR. These rulemakings are the Administration's first 
step in implementing the authorities returned to the President by the 
2013 NDAA to determine the proper and more tailored controls over the 
export of satellites and related items as recommended by the 
Departments of Defense (DOD) and State. These two proposed rules are 
part of the Administration's larger Export Control Reform effort 
described, inter alia, in the Commerce Department's July 15, 2011 
proposed rule (76 FR 41958) (``July 15 (framework) rule'') setting up a 
structure to control in the EAR items that the President determines no 
longer warrant control under the ITAR in accordance with section 38(f) 
of the AECA. On November 7, 2011, BIS published a proposed rule (76 FR 
68675) (``November 7 (aircraft) rule'') that proposed several changes 
to the framework in the July 15 proposed rule. On June 19, 2012, BIS 
published a proposed rule to define the term ``specially designed'' (77 
FR 36409) (``the June 19 (specially designed) rule''). On June 21, 
2012, BIS published a rule entitled Proposed Revisions to the Export 
Administration Regulations: Implementation of Export Control Reform; 
Revisions to License Exceptions After Retrospective Regulatory Review, 
(77 FR 37524) (``the June 21 (transition) rule''). Readers may find it 
useful to review these four proposed rules when preparing their 
comments on this proposed rule. Generally following the structure of 
the July 15 (framework) and the November 7 (aircraft) rules, this 
proposed rule describes BIS's proposal for controlling under the EAR's 
CCL the ``spacecraft'' and related articles now controlled under 
Category XV of the ITAR's United States Munitions List (22 CFR part 
121) (USML) that would not be controlled under the revised USML 
Category XV.
    In March 2012, the Departments of Defense and State filed with 
Congress their ``Final Report'' required by section 1248 of the 
National Defense Authorization Act of Fiscal Year 2010. See http://www.defense.gov/home/features/2011/0111_nsss/docs/1248_Report_Space_Export_Control.pdf (the ``1248 Report''). The 1248 Report 
identified the types of satellites and related items that should not be 
designated as ``defense articles'' controlled under the ITAR. ``For the 
sake of national and economic security, the Departments recommend[ed] 
that authority to determine the appropriate export control status of 
satellites and space-related items be returned to the President.'' Id. 
The changes described in this proposed rule and in the State 
Department's companion proposed rule on Category XV of the USML are 
based on a review of Category XV by the Defense Department, which, as 
described in the 1248 Report, worked with the Departments of State and 
Commerce in preparing the proposed amendments.
    The Defense Department reviewed the articles in Category XV to 
determine which are either (i) inherently military and otherwise 
warrant control on the USML or (ii) if, common to non-military space 
applications, possess 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. All other satellites and related items are, pursuant to 
the State and Commerce Department notices, proposed to move to the 
export control jurisdiction of the EAR. The licensing requirements and 
other EAR-specific controls for such items described in this notice 
would enhance national security by 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 NATO allies and other multi-regime partners.
    In the July 15 (framework) rule, BIS proposed creating a ``600 
series'' for the new ECCNs to control the munitions items that would be 
removed from the USML and items currently on the CCL that are also on 
the Wassenaar Arrangement Munitions List (WAML). This rule proposes to 
create a new ``500 series'' of ECCNs to control ``spacecraft'' systems 
and associated equipment that would be removed from the USML. This new 
series would be created for ``spacecraft'' systems and associated 
equipment because, although these items are currently on the USML, many 
of them are commercial items with no military or intelligence 
applications, such as commercial communications satellites. It would be 
inappropriate to include these types of items in the ``600 series,'' 
which is, by definition, comprised of munitions items. Additionally, 
because many items proposed to be moved in this rule do have military 
or intelligence applications, it would be unnecessarily complicated and 
confusing to move certain ``spacecraft'' systems and associated 
equipment to new ``600 series'' ECCNs while moving the commercial items 
to existing ECCNs. The creation of a new series would provide a place 
for ``spacecraft'' systems and associated equipment transferred from 
the USML, and would allow BIS to apply the appropriate controls to 
these items. The new series would be identified as the ``500 series'' 
because the third character in each of the new ECCNs would be a ``5.'' 
The first two characters of the 500 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. In addition, it would 
be inappropriate to put these new controls in one of the multilateral 
controls of the CCL, such as the ``000 series'' for items controlled 
under the Wassenaar Arrangement, because none of the items described in 
proposed ECCN 9x515 in this notice are exclusively subject to 
multilateral United States controls.
    Although the items in the proposed new 9x515 ECCNs would not be 
listed in the 600 series, the order of review for

[[Page 31433]]

the new ECCNs is similar to that for 600 series ECCNs. That is, when 
determining whether an item that is now controlled under USML Category 
XV would be controlled on the EAR if it is not within the scope of the 
revised USML Category XV, one must first look to the 9x515 ECCNs. Only 
if it is not controlled in one of the new ECCNs would one then look to 
the remaining ECCNs in the CCL to determine whether the item is on the 
CCL or, if not, an EAR99 item. The order of review guidance in 
Supplement No. 4 to Part 774 is proposed to be amended accordingly.
    The ECCNs created in this rule would begin with ``9,'' because that 
is the corresponding CCL category for controls on ``spacecraft.'' The 
second character is a letter in the range A through E that identifies 
the product group within a CCL Category. In the ``500 series,'' the 
third character is the number 5. The final two characters of the ECCNs 
would be fifteen to identify the corresponding USML category that had 
covered the items in the new ECCN. The ECCNs that would be created or 
revised by this proposed rule are described more fully below.
    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 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.
    The revisions proposed in this rule are part of Commerce's 
retrospective regulatory review plan under EO 13563 completed in August 
2011. Commerce's full plan can be accessed at: http://open.commerce.gov/news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules.

Detailed Description of Changes Proposed by This Rule

    This rule proposes changes to the text of the EAR as modified by 
the Initial Implementation Rule of April 16, 2013 (78 FR 22660). BIS 
made changes to the EAR in the Initial Implementation Rule that provide 
the framework for the ``500 series.'' The changes made to the EAR in 
the Initial Implementation Rule will be effective on October 15, 2013.

New 9X515 Series of ECCNs

    This proposed rule would create four new ``500 series'' ECCNs in 
CCL Category 9 (ECCNs 9A515, 9B515, 9D515, and 9E515) to describe the 
EAR controls over the items the President determines no longer warrant 
control under the USML Category XV and that are not otherwise within 
the scope of an existing ECCN. Terms such as ``part'' and ``component'' 
and ``accessories'' and ``attachments'' are applied in the same manner 
in this rule as those terms are defined in the Initial Implementation 
Rule of April 16, 2013 (78 FR 22660). This rule would also add a new 
definition for the ``500 series'' to Sec.  772.1. The new ``500 
series'' would not include the International Space Station, which 
remains under ECCN 9A004.
    This rule also proposes to amend the related controls paragraph of 
eighteen ECCNs--i.e., 3A001, 3A002, 3A611, 3D001, 3E001, 3E003, 5A001, 
5A991, 5E001, 6A002, 6A004, 6D001, 6D002, 6E001, 6E002, 7A004, 7A104 
and 9A004. The cross references to the USML for items listed in the 
proposed USML Category XV would be revised. The cross references to the 
USML for items that are proposed to transition from Category XV of the 
USML would be removed. This rule additionally proposes to remove 
paragraph .b from the List of Items Controlled in ECCN 9A004. Paragraph 
.b was added to the CCL on March 15, 1999, when all satellites, 
including commercial communications satellites, and related items were 
transferred to the USML pursuant to the 1999 NDAA. Paragraph .b 
provided a space on the CCL to control specific ``spacecraft'' related 
items that were determined to be not subject to the ITAR through the 
commodity jurisdiction procedure administered by the Department of 
State. The new ``500 series'' ECCNs, specifically 9A515, would control 
all ``spacecraft'' and related items that are not otherwise enumerated 
on the USML or CCL. Therefore, it is appropriate to delete 9A004.b and 
bring these ``spacecraft'' related items into the orbit of 9A515.

New ECCN 9X515

    Proposed ECCN 9A515 paragraph .a would control ``spacecraft,'' 
including satellites, manned or unmanned space vehicles, whether 
designated developmental, experimental, research or scientific, not 
enumerated in USML Category XV. Paragraph 9A515.b would control ground 
control systems and training simulators ``specially designed'' for 
telemetry, tracking, and control of the ``spacecraft'' in paragraph 
9A515.a. Paragraph .c would be reserved.
    Paragraph .d would control certain radiation hardened 
microelectronic circuits that are ``specially designed'' for defense 
articles on the USML, ``600 series'' items, or items controlled by 
9A515 that meet or exceed five specific characteristics. A reminder 
note is proposed for ECCN 9A515.d to state that application specific 
integrated circuits (ASICs) ``specially designed'' for defense articles 
are controlled by Category XI(c) of the USML, regardless of 
characteristics. A second note is proposed for ECCN 9A515.d that 
``space qualified'' microelectronic circuits that do not meet the 
radiation-hardening or other criterion of 9A515.d are controlled by 
ECCN 9A515.x. A third note is proposed for ECCN 9A515.d to refer to 
controls in 3A001.a for microelectronic circuits that are ``subject to 
the EAR'' and not controlled by 9A515. A fourth note is proposed for 
ECCN 9A515.d to state that microelectronic circuits ``specially 
designed'' for defense articles on the USML (other than Category XV) or 
``600 series'' items that do not meet the radiation hardening criteria 
of paragraph .d would be controlled by the proposed ``600 series'' ECCN 
3A611.
    Paragraphs .e through .w would be reserved.
    Paragraph .x would control ``parts,'' ``components,'' 
``accessories,'' and ``attachments'' that are ``space qualified'' and 
not controlled on the USML, elsewhere within ECCN 9A515, or in one of 
the existing ECCNs that has ``space qualified'' as a control criterion. 
A note is proposed for ECCN 9A515.x to remind readers that ``parts,'' 
``components,'' and ``accessories'' and ``attachments'' specified in 
USML subcategory XV(e) or enumerated in other USML categories are 
subject to the controls of the USML.

New ECCN 9B515

    Proposed ECCN 9B515 paragraph .a would control test, inspection, 
and production ``equipment'' ``specially designed'' for the 
``production'' or ``development'' of commodities enumerated in ECCN 
9A515 or USML Category XV.
    Paragraph .b would control ``equipment,'' cells, and stands 
``specially designed'' for testing, analysis and fault isolation of 
commodities enumerated in ECCN 9A515, 9A004 or USML Category XV.
    Paragraph .c would control environmental test chambers capable of 
pressures below (10-4) Torr, and ``specially designed'' 
``components'' therefor.

[[Page 31434]]

New ECCN 9D515

    Proposed ECCN 9D515 would control ``software'' ``specially 
designed'' for the ``development,'' ``production,'' operation, 
installation, maintenance, repair, overhaul, or refurbishing of 
commodities controlled by ECCNs 9A515 and 9B515.

New ECCN 9E515

    Proposed ECCN 9E515 paragraph .a would control ``technology'' 
``required'' for the ``development,'' ``production,'' operation, 
installation, maintenance, repair, overhaul or refurbishing of items 
controlled by ECCN 9A515, 9B515, or 9D515.
    The appendix to the 1248 Report referred to a possible need to 
control technology required for passenger participation in space travel 
(e.g., sub-orbital, orbital, lunar, interplanetary or habitat) for 
space tourism, research or scientific endeavors, or transportation from 
one point to another for commercial purposes. The Departments of 
Defense and State have since reviewed such technology and concluded 
that it is not per se now subject to USML Category XV. There is thus no 
proposed inclusion of such technology as a general matter in either the 
proposed USML Category XV or the proposed 9E515. To the extent other 
technology described in either the proposed USML XV or 9E515 would be 
released to a foreign person during such activities, then it would be 
controlled according to the requirements of the relevant paragraph.
    Applicable controls for new ``500 series'' ECCNs.
    All items in the 9X515 ECCNs, as proposed in this rule, would be 
subject to national security (NS Column 1) and regional stability (RS 
Column 1) controls, as well as antiterrorism (AT Column 1) controls. 
Some of the items would be subject to missile technology (MT) controls 
in some cases. The licensing policy would be a case-by-case review to 
determine whether the transaction is contrary to the national security 
or foreign policy interests of the United States. However, applications 
for ``500 series'' items destined to a country listed in Country Group 
D:5 (Supplement No. 1 to Part 740) as a country subject to a U.S. arms 
embargo will be reviewed consistent with United States arms embargo 
policies. Country Group D:5 (Supplement No. 1 to Part 740) is set out 
in the Initial Implementation Rule of April 16, 2013 (78 FR 22660). The 
U.S. Government has long considered U.S. arms embargo policies when 
reviewing license applications to export items subject to the EAR. BIS 
has now explicitly stated that the review policy for all ``600 series'' 
items will be consistent with U.S. arms embargos. DOD and the State 
Department recommended in the 1248 Report to Congress that BIS 
explicitly adopt this review policy for items transitioning from the 
USML to ensure that exporters are aware that all items subject to 
embargo remain so on the CCL. BIS agrees with this recommendation and 
would amend Sec. Sec.  742.4(b)(1)(ii) and 742.6(b)(1) to add the term 
``500 series.'' Additionally, as required by Section 1261 of the 2013 
NDAA, applications for ``500 series'' items destined to the People's 
Republic of China, North Korea, or any country that is a state sponsor 
of terrorism, would be subject to a policy of denial.
``Space-Qualified''
    In December 2012, the Wassenaar Arrangement on Export Controls for 
Conventional Arms and Dual-Use Goods and Technologies (``Wassenaar 
Arrangement'') amended its definition of ``space-qualified'' to be 
``[d]esigned, manufactured, or qualified through successful testing, 
for operation at altitudes greater than 100 km above the surface of the 
Earth. Note: A determination that a specific item is ``space 
qualified'' by virtue of testing does not mean that other items in the 
same production run or model series are ``space qualified'' if not 
individually tested.'' BIS plans to adopt this definition in the EAR 
when it publishes its amendments to the EAR to implement the amendments 
agreed to by the Wassenaar Arrangement. To comment on the proposed 
changes to the EAR in this notice that pertain to the meaning of 
``space-qualified,'' the public should use the above definition.
    The Wassenaar Arrangement adopted the revised definition after the 
Departments of State and Defense submitted to Congress the 1248 Report, 
describing the proposed controls on ``space qualified'' items not 
controlled elsewhere. In addition, the revised definition was adopted 
after the U.S. Government had received and considered public comments 
on its proposed definition of ``specially designed,'' which would be 
the control parameter in its other ``.x'' catch-all controls. In order 
to (i) maintain the ``space qualified'' control scope described in the 
1248 Report, (ii) maintain consistency between this catch-all control 
and the other ``space qualified'' controls in the CCL, and (iii) limit 
the ambiguity between the scope of this catch-all approach and the 
other new ``.x'' catch-alls that use ``specially designed,'' BIS is 
proposing the addition of a note to the new ``space qualified'' 
definition. The note would state that, for purposes of these controls, 
the terms `designed' and `manufactured' in the Wassenaar's definition 
of ``space qualified'' are synonymous with the EAR's new definition of 
``specially designed.'' Thus, for example, an item that is ``specially 
designed'' for a spacecraft is deemed to be `designed' or 
`manufactured' for operation at altitudes greater than 100 km and an 
item that is not ``specially designed'' for a spacecraft is not deemed 
to have been so `designed' or `manufactured.' An implication of this 
note would be that an item that becomes ``space qualified'' by virtue 
of successful testing would be ``space qualified'' regardless of 
whether it would be considered ``specially designed.'' This note does 
not constitute a modification of the Wassenaar definition of the term, 
only a comment about how it is relates to the EAR's definition of 
``specially designed.''

Effects of This Proposed Rule

De minimis

    Items made outside the United States that incorporate items subject 
to the EAR are subject to the EAR if they exceed a de minimis 
percentage of controlled U.S.-origin content, as described in Sec.  
734.3 of the EAR. The Initial Implementation Rule of April 16, 2013 (78 
FR 22660) established the de minimis threshold for a foreign-made item 
that incorporates U.S.-origin ``600 series'' items at zero percent when 
the foreign-made item is destined for a country subject to a U.S. arms 
embargo and 25 percent for destinations that are not subject to a U.S. 
arms embargo. This rule proposes to adopt the same de minimis 
thresholds for the ``500 series'' as is proposed for the ``600 
series.'' Foreign-made items that incorporate any amount of U.S.-origin 
``500 series'' items would be subject to the EAR when destined to a 
country that is subject to a U.S. arms embargo (i.e., 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, and 
Zimbabwe). A foreign-made item that incorporates U.S.-origin ``500 
series'' items, destined to a country that is not subject to a U.S. 
arms embargo, would be eligible for de minimis treatment and would not 
be subject to the EAR if the value of all of its U.S.-origin controlled 
content does not exceed 25 percent of foreign-made item's value.

[[Page 31435]]

Foreign-Produced Direct Product

    The Initial Implementation Rule of April 16, 2013 (78 FR 22660) 
expanded the foreign-produced direct products of U.S. ``technology'' 
that are subject to the EAR. Foreign-produced direct products of U.S.-
origin ``600 series'' ``technology,'' or of a plant or major component 
of a plant that is a direct product of U.S.-origin ``600 series'' 
``technology,'' that are ``600 series'' items are proposed to be 
subject to the EAR when reexported or exported from abroad to countries 
listed in Country Groups D:1 (national security countries of concern), 
D:3 (chemical and biological countries of concern), D:4 (missile 
technology countries of concern), or E:1 (countries that support 
terrorism) in Supplement No. 1 to part 740 or countries subject to a 
U.S. arms embargo. Foreign-made items subject to the EAR because of 
this rule are subject to the same license requirements to the new 
country of destination as if they were of U.S. origin. This rule 
proposes to extend the ``600 series'' direct product rule to items in 
the ``500 series'' as well.

Use of License Exceptions

    Most ``500 series'' items would be eligible for several license 
exceptions, including STA, which would be available for exports to 
certain countries that are NATO members or multi-regime close allies. 
Certain items described in ECCNs 9D515 and 9E515, however, would not be 
eligible for export under STA, as described in those ECCNs. 
Additionally, the MT controlled commodities in 9A515 and some types of 
technology in 9E515 would not be eligible for any license exceptions, 
including STA. The use of STA for ``500 series'' items would require 
the consignee to consent to an end-user check by the U.S. Government in 
addition to the standard consignee statement required for all STA 
transactions. ``600 series'' items are subject to additional criteria 
for the use of License Exception STA. Specifically, the Ultimate 
Consignee must be in an A:5 country and either (a) the ultimate end 
user must be the government of an A:5 country or the United States 
Government, or (b) the items must be for the ``development'' or 
``production'' of an item in that will ultimately be used by any such 
government agencies, the United States Government, or a person in the 
United States. BIS is not proposing to make this ``600 series'' 
specific STA requirement applicable to the ``500 series.'' ``500 
series'' items are not munitions items and are generally not intended 
for ultimate end use by governmental end users. The majority of the 
items in the ``500 series'' are commercial items, and while many of the 
``parts'' and ``components'' have military or intelligence 
applications, they are dual-use items that have commercial 
applications. Therefore, the application of this requirement to the 
``500 series'' would be inappropriate.
    Items controlled under proposed ECCNs 9A515 and 9B515 would also be 
eligible for License Exception LVS (limited value shipments) up to a 
value of $1,500 ($5,000 for 9B515.c), TMP (temporary exports), GOV 
(U.S. Government), and RPL (servicing and replacement parts). The use 
of license exceptions for ``500 series'' items generally would be 
prohibited to any destination subject to a U.S. arms embargo, except to 
the U.S. Government under License Exception GOV.

License Applications

    In a license application for a transaction involving ``500 series'' 
items that is equivalent to a transaction that was previously approved 
by the State Department under the ITAR, the applicant may report the 
ITAR license or other approval number to BIS in Block 24 of the license 
application. Only those license applications where the particulars 
(e.g., the function, performance capabilities, form and fit of the 
item, the purchaser, ultimate consignee and end user(s)) are the same 
in both the EAR license application and the previously issued ITAR 
authorization would receive full consideration under this paragraph. 
For example, if a U.S. company had an ITAR authorization to export 
certain radiation hardened microchips that will be controlled under 
9A515.d to a governmental end user in Japan, the company may list that 
authorization in Block 24 if it plans to export more of the same chips 
to the same end user in Japan. However, if the company wishes to export 
the same chip to a commercial end user or the next generation of chip 
to the same government end user, it may not list the prior 
authorization as precedent. Block 24 would alert BIS and the other U.S. 
Government agencies reviewing a particular ``500 series'' license 
application that this new application to BIS concerns a transaction 
that is equivalent to a previously approved transaction. This 
information may be relevant to review of the transaction and may result 
in an expedited determination.

Export Clearance

    This rule proposes to adopt the ``600 series'' export clearance 
requirements proposed in the June 21 (transition) rule. This rule would 
revise Sec.  758.1 to require that information on all exports of ``500 
series'' items be filed in AES regardless of value or destination. BIS 
is required to report to Congress on all ``500 series'' exports and 
would only be able to obtain information on low value unlicensed 
shipments if an AES filing is made. This rule would also revise Sec.  
758.2 to preclude the option of post-departure filing for exports of 
``500 series'' items. This revision would maintain the current status 
of these items under the ITAR as ineligible for post-departure filing. 
Finally, this rule would revise Sec.  758.6 to require that the ECCN 
for each ``500 series'' item being shipped be provided on the same 
documents on which the Destination Control Statement is required. This 
would require that the ECCN for each ``500 series'' item be entered on 
the invoice and on the bill of lading, air waybill, or another export 
control document that accompanies the shipment from its point of origin 
in the United States to the ultimate consignee or end user abroad.
Order of Review
    Supplement No. 4 to Part 774 would be amended to include a 
reference to the new 9x515 ECCNs so that those engaging in 
classification analyses of items formerly in USML Category XV but no 
longer controlled under the amended USML Category XV know to review the 
new 9X515 ECCNs before reviewing other potentially applicable ECCNs in 
the CCL.

Request for Comments

    BIS seeks comments on this proposed rule. BIS will consider all 
comments received on or before July 8, 2013. All comments (including 
any personally identifying information or information for which a claim 
of confidentially is asserted either in those comments or their 
transmittal emails) will be made available for public inspection and 
copying. Parties who wish to comment anonymously may do so by 
submitting their comments via Regulations.gov, leaving the fields 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 amended by Executive Order 13637 of March 
8, 2013, 78 FR 16129 (March 13, 2013), and as extended by the Notice of 
August 15, 2012, 77 FR 49699 (August 16, 2012), has continued the 
Export Administration Regulations in effect

[[Page 31436]]

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.

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).
    BIS believes that the effect of adding items to the EAR that would 
be removed from the ITAR as a result of this rule as part of the 
administration's Export Control Reform Initiative would increase the 
number of license applications to be submitted to BIS by approximately 
1,500 annually, resulting in an increase in burden hours of 425 (1,500 
transactions at 17 minutes each) under control number 0694-0088.
    Most ``spacecraft'' and ground control systems, ``space qualified'' 
``parts,'' ``components,'' ``accessories'' and ``attachments,'' and 
related ``software'' and ``technology'' formerly on the USML would 
become eligible for License Exception STA under this rule. BIS believes 
that the increased use of License Exception STA resulting from the 
effect of adding items to the EAR that would be removed from the ITAR 
as a result of this rule as part of the administration's Export Control 
Reform Initiative would increase the burden associated with control 
number 0694-0137 by about 2,258 hours (1,935 transactions @ 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. The largest impact of the proposed rule would 
likely apply to exporters of parts, components, accessories, and 
attachments specifically designed or modified for satellite and other 
``spacecraft'' items that would have been approved for export under the 
ITAR pursuant to a license for export to NATO allies and regime 
partners. Because, with few exceptions, the ITAR allows exemptions from 
license requirements only for certain exports to Canada, most exports 
of such parts, even when destined to NATO and other allied countries, 
require specific State Department authorization. Under the EAR, as 
proposed in this notice, such ``parts'' and ``components'' would become 
eligible for export to NATO and other multi-regime 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 
burdens of STA is likely less burdensome than applying for licenses or 
other approval from the State Department. 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 is likely to be reduced compared to the license 
requirement of the ITAR. In particular, license applications for 
exports of ``technology'' controlled by ECCN 9E515 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 a regulatory 
flexibility analysis of any rule subject to the notice and comment 
rulemaking requirements under the Administrative Procedure Act (5 
U.S.C. 553) or any other statute, unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Under section 605(b) of the RFA, however, if 
the head of an agency certifies that a rule will not have a significant 
impact on a substantial number of small entities, the statute does not 
require the agency to prepare a regulatory flexibility analysis. 
Pursuant to section 605(b), the Chief Counsel for Regulation, 
Department of Commerce, submitted a memorandum to the Chief Counsel for 
Advocacy, Small Business Administration, certifying that this proposed 
rule will not have a significant impact on a substantial number of 
small entities. A summary of the factual basis for this certification 
follows.

Number of Small Entities

    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.

Economic Impact

    This proposed rule is part of the Administration's Export Control 
Reform Initiative. Under that initiative, the USML (22 CFR part 121) 
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 are determined to no longer warrant control on the USML would 
become controlled on the CCL. ``Spacecraft'' and related items so 
designated will be identified in specific ECCNs known as the ``500 
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

[[Page 31437]]

USML but would become subject to the EAR.
    Many ``spacecraft'' and specific parts and components would remain 
on the USML. However, ``parts,'' ``components,'' ``accessories,'' and 
``attachments'' for such ``equipment'' would be included on the CCL 
unless expressly enumerated on the USML. Such ``parts'' and 
``components'' are more likely to be produced by small businesses than 
complete ``spacecraft,'' which would in many cases become subject to 
the EAR. Moreover, officials at the Department of State have informed 
BIS that license applications for such ``parts'' and ``components'' are 
a high percentage of the license applications for USML articles 
reviewed by that department. The proposed changes in this rule will not 
result in the decontrol of such items, but will reduce administrative 
and collateral regulatory burdens by, for example, allowing for the use 
of License Exception STA for exports to NATO and other multi-regime 
allied countries.
    Thus, changing the jurisdictional status of certain Category XV 
articles would reduce the burden on small entities (and other entities 
as well) through: Elimination of some license requirements, greater 
availability of license exceptions, simplification of license 
application procedures, and reduction (or elimination) of registration 
fees. In addition, parts and components controlled under the ITAR 
remain under ITAR control when incorporated into foreign-made items, 
regardless of the significance or insignificance of the item, 
discouraging foreign buyers from incorporating such U.S. content.
    Exporters and reexporters of the Category XV articles, particularly 
``parts'' and ``components,'' that would be placed on the CCL by this 
rule would need fewer licenses because their transactions would become 
eligible for license exceptions that apply to shipments to United 
States Government agencies, shipments valued at less than $1,500, 
``parts'' and ``components'' being exported for use as replacement 
parts, temporary exports, and License Exception Strategic Trade 
Authorization (STA). License Exceptions under the EAR would allow 
suppliers to send routine parts and low level parts to NATO and other 
export control regime partner countries 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 obligations can apply to an unlimited 
number of transactions and have no expiration date, they would impose 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 in which a license would be 
required, the process would be simpler and less costly under the EAR 
than under the USML. When a USML Category XV article moves 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 USML licensing procedure, an applicant must include a 
purchase order or contract with its application. There is no such 
requirement under the CCL licensing procedure. This difference gives 
the CCL applicant at least two advantages. First, the applicant has a 
way of determining whether the U.S. Government will authorize the 
transaction before it enters into potentially lengthy, complex, and 
expensive sales presentations or contract negotiations. Under the USML 
procedure, the applicant will need to caveat all sales presentations 
with a reference to the need for government approval, and is more 
likely to have 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 particular consignee over the 
life of a license (normally four years, but may be longer if 
circumstances warrant a longer period), reducing the total number of 
licenses for which the applicant must apply.
    In addition, many applicants, who are exporting or reexporting 
items that this rule would transfer from the USML to the CCL, would 
realize cost savings through the elimination of some or all 
registration fees currently assessed under the USML's licensing 
procedure. Currently, USML applicants must pay to use the USML 
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.
    There are no registration costs or application processing fees for 
applications to export items listed on the CCL. Once the Category XV 
articles that are the subject to this rulemaking are added to the CCL 
and removed from the USML, entities currently applying for licenses 
from the Department of State would find their registration fees reduced 
if the number of USML licenses those entities need declines. If an 
entity's entire product line is moved to the CCL, then its ITAR 
registration and registration fee requirement would be eliminated and 
it would no longer incur that expense.
    De minimis treatment under the EAR would also become available for 
all items that this rule would transfer from the USML to the CCL. Items 
subject to the ITAR remain subject to the ITAR when they are 
incorporated abroad into a foreign-made product, regardless of the 
percentage of U.S. content in that foreign-made product. Foreign-made 
products that incorporate items that this rule would move to the CCL 
would be subject to the EAR only if their total controlled U.S.-origin 
content exceeds 25 percent for most destinations. Because including 
small amounts of U.S.-origin content would not subject foreign-made 
products to the EAR, foreign manufacturers would have less incentive to 
avoid such U.S.-origin ``parts'' and ``components,'' a development that 
potentially would mean greater sales for U.S. suppliers, including 
small entities.

Conclusion

    BIS is unable to determine the precise number of small entities 
that would be affected by this rule. Based on the facts and conclusions 
set forth above, BIS believes that any burdens imposed by this rule 
would be offset by the reduction in the number of 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

[[Page 31438]]

the Chief Counsel for Advocacy of the Small Business Administration 
that this rule, if adopted in final form, would not have a significant 
economic impact on a substantial number of small entities.

List of Subjects

15 CFR Parts 734, 740, 748 and 758

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

15 CFR Parts 736 and 772

    Exports.

15 CFR Parts 742 and 774

    Exports, Reporting and recordkeeping requirements.
    Accordingly, the Export Administration Regulations (15 CFR Parts 
730-774), as amended by the final rule published April 16, 2013 (78 FR 
22660), effective October 15, 2013, are proposed to be further amended 
as follows:

PART 734--[AMENDED]

0
1. The authority citation for 15 CFR part 734 continues to read as 
follows:

    Authority:  50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13020, 61 
FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 61 FR 58767, 3 CFR, 
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783; Notice of August 15, 2012, 77 FR 49699 (August 16, 2012); 
Notice of November 1, 2012, 77 FR 66513 (November 5, 2012).

0
2. Section 734.4 is amended by revising paragraph (a)(6) to read as 
follows:

Sec.  734.4  De minimis U.S. content.

    (a) * * *
    (6) There is no de minimis level for foreign-made items that 
incorporate U.S.-origin ``500 series'' or ``600 series'' items when 
destined to a country listed in Country Group D:5 of Supplement No. 1 
to part 740 of the EAR.
* * * * *

PART 736--[AMENDED]

0
3. The authority citation for 15 CFR part 736 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. 2151 note; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 
950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 
61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 
CFR, 2001 Comp., p. 783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., 
p. 168; Notice of May 9, 2012, 77 FR 27559 (May 10, 2012); Notice of 
August 15, 2012, 77 FR 49699 (August 16, 2012); Notice of November 
1, 2012, 77 FR 66513 (November 5, 2012).

0
4. Section 736.2 is amended by revising paragraph (b)(3)(iii) through 
(v) to read as follows:

Sec.  736.2  General prohibitions and determination of applicability.

* * * * *
    (b) * * *
    (3) * * *
    (iii) Additional country scope of prohibition for ``500 series'' or 
``600 series'' items. You may not, except as provided in paragraphs 
(b)(3)(v) or (vi) of this section, reexport or export from abroad 
without a license any ``500 series'' or ``600 series'' item subject to 
the scope of this General Prohibition Three to a destination in Country 
Groups D:1, D:3, D:4, D:5 or E:1 (See Supplement No.1 to part 740 of 
the EAR).
    (iv) Product scope of ``500 series'' and ``600 series'' items 
subject to this prohibition. This General Prohibition Three applies if 
a ``500 series'' or ``600 series'' item meets either of the following 
conditions:
    (A) Conditions defining direct product of ``technology'' or 
``software'' for ``500 series'' and ``600 series'' items. Foreign-made 
``500 series'' and ``600 series'' items are subject to this General 
Prohibition Three if the foreign-made items meet both of the following 
conditions:
    (1) They are the direct product of ``technology'' or ``software'' 
that is in the ``500 series'' or ``600 series'' as designated on the 
applicable ECCN of the Commerce Control List in Supplement No. 1 to 
part 774 of the EAR; and
    (2) They are in the ``500 series'' or ``600 series'' as designated 
on the applicable ECCN of the Commerce Control List in part 774 of the 
EAR.
    (B) Conditions defining direct product of a plant for ``500 
series'' and ``600 series'' items. Foreign-made ``500 series'' and 
``600 series'' items are also subject to this General Prohibition Three 
if they are the direct product of a complete plant or any major 
component of a plant if both of the following conditions are met:
    (1) Such plant or major component is the direct product of ``500 
series'' or ``600 series'' ``technology'' as designated on the 
applicable ECCN of the Commerce Control List in part 774 of the EAR, 
and
    (2) Such foreign-made direct products of the plant or major 
component are in the ``500 series'' or ``600 series'' as designated on 
the applicable ECCN of the Commerce Control List in part 774 of the 
EAR.
    (v) ``500 series'' and ``600 series'' foreign-produced direct 
products of U.S. ``technology'' or ``software'' subject to this General 
Prohibition Three do not require a license for reexport or export from 
abroad to the new destination unless the same item, if exported from 
the U.S. to the new destination would have been prohibited or made 
subject to a license requirement by part 742, 744, 746, or 764 of the 
EAR.
* * * * *

PART 740--[AMENDED]

0
5. The authority citation for 15 CFR part 740 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. 7201 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., 
p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice 
of August 15, 2012, 77 FR 49699 (August 16, 2012).

0
6. Section 740.2 is amended by revising paragraph (a)(12) and adding 
paragraph (a)(17) to read as follows:

Sec.  740.2  Restrictions on all License Exceptions.

    (a) * * *
    (12) The item is described in a ``500 series'' or ``600 series'' 
ECCN and is destined to, shipped from, or was manufactured in a 
destination listed in Country Group D:5 (see Supplement No.1 to part 
740 of the EAR), except that such items are eligible for License 
Exception GOV (Sec.  740.11(b)(2) of the EAR) unless otherwise 
restricted by that paragraph.
* * * * *
    (17) ``500 series'' items that are controlled for missile 
technology (MT) reasons may not be exported, reexported, or transferred 
(in-country) under License Exception STA (Sec.  740.20 of the EAR). 
Items controlled under ECCNs 9D515.b through .g and 9E515.b are not 
eligible for license exceptions except for License Exception GOV (Sec.  
740.11(b)(2) of the EAR).
* * * * *
0
7. Section 740.9 is amended by revising the last sentence of paragraph 
(a) introductory text to read as follows:

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

* * * * *
    (a) * * * The references to various countries and country groups in 
these TMP-specific provisions do not limit or amend the prohibitions in 
Sec.  740.2 of the EAR on the use of license exceptions generally, such 
as for exports of ``500 series'' or ``600 series'' items to 
destinations in Country Group D:5.
* * * * *
0
8. Section 740.10 is amended by revising paragraphs (a)(3)(viii), 
(a)(4)(ii), (b)(3)(i)(F) to read as follows:

[[Page 31439]]

Sec.  740.10  License Exception Servicing and replacement of parts and 
equipment (RPL).

    (a) * * *
    (3) * * *
    (viii) ``Parts,'' ``components,'' ``accessories,'' and 
``attachments'' classified in ``500 series'' or ``600 series'' ECCNs 
may not be exported or reexported to a destination listed in Country 
Group D:5 (see Supplement No. 1 to this part).
    (4) * * *
    (ii) The conditions described in paragraph (a)(3) relating to 
replacement of ``parts,'' ``components,'' ``accessories,'' or 
``attachments'' (excluding ``500 series'' and ``600 series'' ECCNs) do 
not apply to reexports to a foreign country of ``parts,'' 
``components,'' ``accessories,'' or ``attachments'' as replacements in 
foreign-origin products, if at the time the replacements are furnished, 
the foreign-origin product is eligible for export to such country under 
any of the License Exceptions in this part or the foreign-origin 
product is not subject to the EAR pursuant to Sec.  734.4.
* * * * *
    (b) * * *
    (3) * * *
    (i) * * *
    (F) Commodities or ``software'' ``subject to the EAR'' and 
classified in ``500 series'' or ``600 Series'' ECCNs may not be 
exported or reexported to a destination identified in Country Group D:5 
(see Supplement No. 1 to this part).
* * * * *
0
9. Section 740.20 is amended by adding a sentence to the end of 
paragraph (d)(2) introductory text to read as follows:

Sec.  740.20  License Exception Strategic Trade Authorization (STA).

    (d) * * *
    (2) * * * Paragraph (d)(2)(vii) is also required for transactions 
including ``500 series'' items.

PART 742--[AMENDED]

0
10. 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 15, 2012, 77 FR 49699 (August 16, 2012); Notice of 
November 1, 2012, 77 FR 66513 (November 5, 2012).

0
11. Section 742.4 is amended by revising paragraph (b)(1)(ii) and 
adding paragraph (b)(1)(iii) to read as follows:

Sec.  742.4  National security.

* * * * *
    (b) * * *
    (1) * * *
    (ii) When destined to a country listed in Country Group D:5 in 
Supplement No. 1 to Part 740 of the EAR, however, items classified 
under ``500 series'' or ``600 series'' ECCNs will be reviewed 
consistent with United States arms embargo policies (Sec.  126.1 of the 
ITAR).
    (iii) When destined to the People's Republic of China or a country 
listed in Country Group E:1 in Supplement No. 1 to Part 740 of the EAR, 
items classified under any ``500 series'' ECCN will be subject to a 
policy of denial.
* * * * *
0
12. Section 742.6 is amended by revising the first and fourth sentence 
and adding a sentence to the end of paragraph (b)(1) to read as 
follows:

Sec.  742.6  Regional stability.

* * * * *
    (b) * * *
    (1) Applications for exports and reexports of ``500 series'' and 
``600 series'' items will be reviewed on a case-by-case basis to 
determine whether the transaction is contrary to the national security 
or foreign policy interests of the United States. * * * Applications 
for export or reexport of items classified under any ``500 series'' or 
``600 series'' ECCN requiring a license in accordance with paragraph 
(a)(1) of this section will also be reviewed consistent with United 
States arms embargo policies (Sec.  126.1 of the ITAR) if destined to a 
country set forth in Country Group D:5 in Supplement No. 1 to part 740 
of the EAR. * * * When destined to the People's Republic of China or a 
country listed in Country Group E:1 in Supplement No. 1 to Part 740 of 
the EAR, items classified under any ``500 series'' ECCN will be subject 
to a policy of denial.
* * * * *

PART 748--[AMENDED]

0
13. The authority citation for 15 CFR part 748 continues to read as 
follows:

    Authority:  50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 
FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 15, 2012, 77 
FR 49699 (August 16, 2012).

0
14. Section 748.8 is amended by revising paragraph (x) to read as 
follows:

Sec.  748.8  Unique application and submission requirements.

* * * * *
    (x) License application for a transaction involving a ``500 
series'' and ``600 series'' item that is equivalent to a transaction 
previously approved under an ITAR license or other approval.
0
15. Supplement No. 1 to part 748 (BIS-748P, BIS-748P-A: Item Appendix, 
and BIS-748P-B: End-User Appendix; Multipurpose Application 
Instructions) is amended by revising the first and fifth sentences of 
Block 24 to read as follows:

Supplement No. 1 to Part 748--Item Appendix, and Bis-748P-B: End-User 
Appendix; Multipurpose Application Instructions

* * * * *

Block 24: Additional Information

    This Block should be completed if your application includes a 
``500 series'' or ``600 series'' item that is equivalent to a 
transaction previously approved under an ITAR license or other 
approval. * * * The classification of the ``500 series'' or ``600 
series'' item in question will no longer be the same because the 
item would no longer be ``subject to the ITAR,'' but all other 
aspects of the description of the item must be the same in order to 
be reviewed under this expedited process under paragraph (x) of 
Supplement No. 2 to part 748 of the EAR.
* * * * *
0
16. Supplement No. 2 to part 748 (Unique Application and Submission 
Requirements) is amended by revising paragraph (x) to read as follows:

Supplement No. 2 to Part 748--Unique Application and Submission 
Requirements

* * * * *
    (x) License application for a transaction involving a``500 
series'' or ``600 series'' item that is equivalent to a transaction 
previously approved under an ITAR license or other approval. To 
request that the U.S. Government review of a license application for 
a ``500 series'' or ``600 series'' item also take into consideration 
a previously approved ITAR license or other approval, applicants 
must also include the State license number or other approval 
identifier in Block 24 of the BIS license application (see the 
instructions in Supplement No. 1 to part 748 under Block 24).
* * * * *

PART 758--[AMENDED]

0
17. The authority citation for 15 CFR part 758 continues to read as 
follows:

    Authority:  50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 
15, 2012, 77 FR 49699 (August 16, 2012).

0
18. Section 758.1 is amended by revising paragraph (b)(3) to read as 
follows:

[[Page 31440]]

Sec.  758.1  The Automated Export System (AES) record.

* * * * *
    (b) * * *
    (3) For all exports of ``500 series'' or ``600 series'' items 
enumerated in paragraphs .a through .x of a ``500 series'' or ``600 
series'' ECCN regardless of value or destination, including exports to 
Canada;
* * * * *
0
19. Section 758.2, as amended April 16, 2013, at 78 FR 22726, is 
further amended by revising paragraph (c)(4) to read as follows:

Sec.  758.2  Automated Export System (AES).

* * * * *
    (c) * * *
    (4) Exports are made under License Exception Strategic Trade 
Authorization (STA); are made under Authorization Validated End User 
(VEU); or are of ``500 series'' or ``600 series'' items.
* * * * *
0
20. Section 758.6, as amended April 16, 2013, at 78 FR 22726, is 
further amended by revising paragraph (b) to read as follows:

Sec.  758.6  Destination control statement and other information 
furnished to consignees.

* * * * *
    (b) Additional Requirement for ``500 series'' and ``600 series'' 
items. In addition to the DCS as required in paragraph (a) of this 
section, the ECCN for each ``500 series'' or ``600 series'' item being 
exported must be printed on the invoice and on the bill of lading, air 
waybill, or other export control document that accompanies the shipment 
from its point of origin in the United States to the ultimate consignee 
or end user abroad.
0
21. The authority citation for 15 CFR part 772 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 
15, 2012, 77 FR 49699 (August 16, 2012).

0
22. Section 772.1 is amended by adding, in alphanumerical order, a 
definition for the term ``500 series'' and revising the definition for 
the term ``space-qualified'' as set forth below:

Sec.  772.1  Definitions of terms as used in the Export Administration 
Regulations (EAR).

* * * * *
    500 series. ECCNs in the ``xY5zz'' format on the Commerce Control 
List (CCL) that control ``dual use'' ``spacecraft'' and related items 
on the CCL that were previously controlled on the United States 
Munitions List. The ``5'' indicates the entry is a ``spacecraft'' entry 
on the CCL. The ``x'' represents the CCL category and ``Y'' the CCL 
product group. The ``500 series'' constitutes the ``spacecraft'' ECCNs 
within the larger CCL. The ``500 series'' does not include items 
designated in ECCNs 0A521, 0B521, 0C521, 0D521, or 0E521.
* * * * *
    ``Space-qualified''. (Cat 3, 6, and 9) Designed, manufactured, or 
qualified through successful testing, for operation at altitudes 
greater than 100 km above the surface of the Earth.

    Note: A determination that a specific item is ``space 
qualified'' by virtue of testing does not mean that other items in 
the same production run or model series are ``space qualified'' if 
not individually tested.

    Note: The terms `designed' and `manufactured' in this definition 
are synonymous with ``specially designed.'' Thus, for example, an 
item that is ``specially designed'' for a spacecraft is deemed to be 
`designed' or `manufactured' for operation at altitudes greater than 
100 km and an item that is not ``specially designed'' for a 
spacecraft is not deemed to have been so `designed' or 
`manufactured.'

* * * * *

PART 774--[AMENDED]

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

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
10 U.S.C. 7420; 10 U.S.C. 7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et 
seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42 
U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22 
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 13026, 61 FR 58767, 3 CFR, 
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783; Notice of August 15, 2012, 77 FR 49699 (August 16, 2012).

0
24. In Supplement No. 1 to Part 774, Category 3, revise the MT 
paragraph of the License Requirements section and the Related Controls 
paragraphs (1) and (2) and add a new sentence to the beginning of the 
Related Definitions paragraph of Export Control Classification Number 
(ECCN) 3A001 to read as follows:

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

* * * * *
3A001 Electronic ``components'' and ``specially designed'' ``parts'' 
and ``components'' therefor, as follows (see List of Items 
Controlled).

License Requirements

* * * * *

 
 
 
MT applies to 3A001.a.1.a for              MT Column 1
 `microcircuits' ``usable in''
 ``missiles'' for protecting ``missiles''
 against nuclear effects (e.g.
 Electromagnetic Pulse (EMP), X-rays,
 combined blast and thermal effects) and
 to 3A001.a.5.a when ``designed or
 modified'' for military use,
 hermetically sealed and rated for
 operation in the temperature range from
 below -54 [deg]C to above +125 [deg]C.
 

* * * * *

List of Items Controlled

* * * * *
Related Controls: (1) See Category XV of the USML for certain 
``space qualified'' electronics ``subject to the ITAR'' (see 22 CFR 
parts 120 through 130). (2) See also 3A101, 3A201, 3A991, and 9A515. 
* * *
* * * * *
Related Definitions: `Microcircuit' means a device in which a number 
of passive or active elements are considered as indivisibly 
associated on or within a continuous structure to perform the 
function of a circuit. * * *

0
25. In Supplement No. 1 to Part 774, Category 3, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 3A002 
to read as follows:

3A002 General purpose electronic ``equipment'' and ``accessories'' 
therefor, as follows (see List of Items Controlled).
* * * * *

List of Items Controlled

* * * * *
Related Controls: See Category XV(e)(9) of the USML for certain 
``space qualified'' atomic frequency standards ``subject to the 
ITAR'' (see 22 CFR parts 120 through 130). See also 3A292 and 3A992.
* * * * *
0
26. In Supplement No. 1 to Part 774, Category 3, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 3D001 
to read as follows:

3D001 ``Software'' ``specially designed'' for the ``development'' or 
``production'' of ``equipment'' controlled by 3A001.b to 3A002.g or 
3B (except 3B991 and 3B992).
* * * * *

List of Items Controlled

* * * * *
Related Controls: ``Software'' ``specially designed'' for the 
``development'' or ``production'' of certain ``space qualified'' 
atomic frequency standards described in Category XV(e)(9) of the 
USML is ``subject to the ITAR'' (see 22 CFR parts 120 through 130). 
See also 3D101.
* * * * *
0
27. In Supplement No. 1 to Part 774, Category 3, revise the License 
Exception TSR and Related Controls paragraphs of

[[Page 31441]]

Export Control Classification Number (ECCN) 3E001 to read as follows:

3E001 ``Technology'' according to the General Technology Note for 
the ``development'' or ``production'' of ``equipment'' or 
``materials'' controlled by 3A (except 3A292, 3A980, 3A981, 3A991, 
3A992, or 3A999), 3B (except 3B991 or 3B992) or 3C (except 3C992).
* * * * *

License Exceptions

* * * * *
TSR: Yes, except N/A for MT, and ``technology'' specially designed 
for the ``development'' or ``production'' of: (a) Traveling Wave 
Tube Amplifiers described in 3A001.b.8, having operating frequencies 
exceeding 19 GHz; and (b) solar cells, coverglass-interconnect-cells 
or covered-interconnect-cells (CIC) ``assemblies,'' solar arrays 
and/or solar panels described in 3A001.e.4.

List of Items Controlled

* * * * *
Related Controls: ``Technology'' according to the General Technology 
Note for the ``development'' or ``production'' of certain ``space 
qualified'' atomic frequency standards described in Category 
XV(e)(9) of the USML is ``subject to the ITAR'' (see 22 CFR parts 
120 through 130). See also 3E101 and 3E201.
* * * * *
0
28. In Supplement No. 1 to Part 774, Category 3, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 3E003 
to read as follows:

3E003 Other ``technology'' for the ``development'' or ``production'' 
of the following (see List of Items Controlled).
* * * * *

List of Items Controlled

* * * * *
Related Controls: See 3E001 for the ``development'' or 
``production'' related to radiation hardening of integrated 
circuits, including silicon-on-insulation (SOI) ``technology.''
* * * * *
0
29. In Supplement No. 1 to Part 774, Category 5, revise the Related 
Controls paragraph and remove the second note to Items paragraph (a.3) 
of Export Control Classification Number (ECCN) 5A001 to read as 
follows:

5A001 Telecommunications ``systems,'' ``equipment,'' ``parts,'' 
``components'' and ``accessories,'' as follows (see List of Items 
Controlled).
* * * * *

List of Items Controlled

* * * * *
Related Controls: (1) See USML Category XI for direction finding 
``equipment'' defined in 5A001.e that are ``subject to the ITAR'' 
(see 22 CFR parts 120 through 130). (2) See also 5A101 and 5A991.
* * * * *
0
30. In Supplement No. 1 to Part 774, Category 5, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 5A991 
to read as follows:

5A991 Telecommunication ``equipment,'' not controlled by 5A001 (see 
List of Items Controlled).
* * * * *

List of Items Controlled

* * * * *
Related Controls: See also 5E101, 5E980 and 5E991.
* * * * *
0
31. In Supplement No. 1 to Part 774, Category 5, revise the Related 
Controls paragraph of Export Control Classification Number 5E001 (ECCN) 
to read as follows:

5E001 ``Technology'' as follows (see List of Items Controlled).
* * * * *

List of Items Controlled

* * * * *
Related Controls: See also 5E101, 5E980, and 5E991.
* * * * *
0
32. In Supplement No. 1 to Part 774, Category 6, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 6A002 
to read as follows:

6A002 Optical sensors and ``equipment,'' ``parts'' and 
``components'' therefor, as follows (see List of Items Controlled).
* * * * *

List of Items Controlled

* * * * *
Related Controls: (1) See USML Categories XII and XV for controls on 
``image intensifiers'' defined in 6A002.a.2 and ``focal plane 
arrays'' defined in 6A002.a.3 that are ``subject to the ITAR'' (see 
22 CFR parts 120 through 130). (2) See also 6A102, 6A202, and 6A992.
* * * * *
0
33. In Supplement No. 1 to Part 774, Category 6, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 6A004 
to read as follows:

6A004 Optical ``equipment,'' ``parts'' and ``components,'' as 
follows (see List of Items Controlled).
* * * * *

List of Items Controlled

* * * * *
Related Controls: (1) For optical mirrors or `aspheric optical 
elements' ``specially designed'' for lithography ``equipment,'' see 
ECCN 3B001. (2) See also 6A994.
* * * * *
0
34. In Supplement No. 1 to Part 774, Category 6, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 6D001 
to read as follows:

6D001 ``Software'' ``specially designed'' for the ``development'' or 
``production'' of ``equipment'' controlled by 6A004, 6A005, 6A008 or 
6B008.
* * * * *

List of Items Controlled

* * * * *
Related Controls: See also 6D991, and ECCN 6E001 (``development'') 
for ``technology'' for items controlled under this entry.
* * * * *
0
35. In Supplement No. 1 to Part 774, Category 6, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 6D002 
to read as follows:

6D002 ``Software'' ``specially designed'' for the ``use'' of 
``equipment'' controlled by 6A002.b, 6A008 or 6B008.
* * * * *

List of Items Controlled

* * * * *
Related Controls: ``Software'' ``specially designed'' for the 
``use'' of ``space qualified'' LIDAR ``equipment'' ``specially 
designed'' for surveying or for meteorological observation, released 
from control under the note in 6A008.j, is controlled in 6D991. See 
also 6D102, 6D991, and 6D992.
* * * * *
0
36. In Supplement No. 1 to Part 774, Category 6, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 6E001 
to read as follows:

6E001 ``Technology'' according to the General Technology Note for 
the ``development'' of ``equipment,'' ``materials'' or ``software'' 
controlled by 6A (except 6A991, 6A992, 6A994, 6A995, 6A996, 6A997, 
or 6A998), 6B (except 6B995), 6C (except 6C992 or 6C994), or 6D 
(except 6D991, 6D992, or 6D993).
* * * * *

List of Items Controlled

* * * * *
Related Controls: See also 6E101, 6E201, and 6E991.
* * * * *
0
37. In Supplement No. 1 to Part 774, Category 6, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 6E002 
to read as follows:

6E002 ``Technology'' according to the General Technology Note for 
the ``production'' of ``equipment'' or ``materials'' controlled by 
6A (except 6A991, 6A992, 6A994, 6A995, 6A996, 6A997 or 6A998), 6B 
(except 6B995) or 6C (except 6C992 or 6C994).
* * * * *

[[Page 31442]]

List of Items Controlled

* * * * *
Related Controls: See also 6E992.
* * * * *

0
38. In Supplement No. 1 to Part 774, Category 7, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 7A004 
to read as follows:

7A004 `Star trackers' and components therefor, as follows (see List 
of Items Controlled).
* * * * *

List of Items Controlled

* * * * *
Related Controls: 1) See USML Category XV for certain `Star 
trackers' that are ``subject to the ITAR'' (see 22 CFR parts 120 
through 130).
* * * * *

0
39. In Supplement No. 1 to Part 774, Category 7, revise the Related 
Controls paragraph of Export Control Classification Number (ECCN) 7A104 
to read as follows:

7A104 Gyro-astro compasses and other devices, other than those 
controlled by 7A004, which derive position or orientation by means 
of automatically tracking celestial bodies or satellites and 
specially designed components therefor.
* * * * *

List of Items Controlled

* * * * *
Related Controls: (1) See USML Categories IV and XV for certain 
`Star trackers' that are ``subject to the ITAR'' (see 22 CFR parts 
120 through 130). (2). * * *
* * * * *
0
40. In Supplement No. 1 to Part 774, Category 9, revise the Related 
Controls paragraphs (1) and (3) through (5), and remove items paragraph 
(b) from the Items paragraph in the List of Items Controlled of Export 
Control Classification Number (ECCN) 9A004 to read as follows:

9A004 Space launch vehicles and ``spacecraft''.
* * * * *

List of Items Controlled

* * * * *
Related Controls:

    (1) See also 9A104, 9A515, and 9B515.
    (2) * * *
    (3) Spacecraft, launch vehicles and related articles that are 
enumerated in the USML are ``subject to the ITAR'' (see 22 CFR parts 
120 through 130).
    (4) All other ``spacecraft'' and related commodities not 
controlled under 9A004 or enumerated in the USML are controlled 
under ECCN 9A515 and 9B515.
    (5) Technical data required for the detailed design, 
development, manufacturing, or production of the international space 
station remains ``subject to the ITAR'' (see 22 CFR parts 120 
through 130). All technical data and all defense services, including 
all technical assistance, for launch of the international space 
station, including launch vehicle compatibility, integration, or 
processing data, are ``subject to the ITAR'' (see 22 CFR parts 120 
through 130).
* * * * *

0
41. In Supplement No. 1 to Part 774, between the entries for ECCNs 
9A120 and 9A980, add new entry for ECCN 9A515 to read as follows:

9A515 ``Spacecraft'' and related commodities, as follows (see List 
of Items Controlled).

License Requirements

Reason for Control: NS, MT, RS, AT

------------------------------------------------------------------------
                Control(s)                         Country chart
------------------------------------------------------------------------
NS applies to entire entry...............  NS Column 1
RS applies to entire entry...............  RS Column 1
MT applies to 9A515.d when ``usable in''   MT Column 1
 ``missiles'' for protecting ``missiles''
 against nuclear effects (e.g.
 Electromagnetic Pulse (EMP), X-rays,
 combined blast and thermal effects).
AT applies to entire entry...............  AT Column 1
------------------------------------------------------------------------

License Exceptions

LVS: $1500
GBS: N/A
CIV: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 9A515.

List of Items Controlled

Unit: End items in number; ``parts,'' ``components,'' 
``accessories,'' and ``attachments'' in $ value
Related Controls: Spacecraft, launch vehicles and related articles 
that are enumerated in the USML, and technical data (including 
``software'') directly related thereto, launch services, and launch 
failure analysis for items in 9A515.a, are ``subject to the ITAR.'' 
A license is required under the ITAR for a ``U.S. person'' to 
provide ``defense services'' to a foreign person for a 
``spacecraft'' to be launched from outside the United States, even 
if that ``spacecraft'' may be exported under License Exception STA. 
See 22 CFR 120.9. All other ``spacecraft,'' as enumerated below and 
defined in section 772.1, are subject to the controls of this ECCN. 
See also ECCNs 3A001, 3A002, 3A991, 3A992, 6A002, 6A004, 6A008, and 
6A998 for specific ``space-qualified'' items and 9A004 for the 
International Space Station.
Related Definitions: N/A.
Items:

    a. ``Spacecraft,'' including satellites, manned or unmanned 
space vehicles, whether designated developmental, experimental, 
research or scientific, not enumerated in USML Category XV.
    Note: ECCN 9A515.a includes commercial communications 
satellites, remote sensing satellites not identified in USML 
Category XV, planetary rovers, and planetary and interplanetary 
probes.
    b. Ground control systems and training simulators ``specially 
designed'' for telemetry, tracking, and control of the 
``spacecraft'' in paragraph 9A515.a.
    c. [Reserved]
    d. Microelectronic circuits rated, certified, or otherwise 
specified or described as meeting or exceeding all the following 
characteristics and that are ``specially designed'' for defense 
articles, ``600 series'' items, or items controlled by 9A515:
    (1) A total dose of 5 x 10\5\ Rads (Si) (5 x 10\3\ Gy (Si));
    (2) A dose rate upset threshold of 5 x 10\8\ Rads (Si)/sec (5 x 
10\6\ Gy (Si)/sec);
    (3) A neutron dose of 1 x 10\14\ n/cm\2\ (1 MeV equivalent);
    (4) An uncorrected single event upset sensitivity of 1 x 
10-\10\ errors/bit/day or less, for the CR[Egrave]ME-MC 
geosynchronous orbit, Solar Minimum Environment for heavy ion flux; 
and
    (5) An uncorrected single event upset sensitivity of 1 x 
10-\3\ errors/part or less for a fluence of 1 x 10\7\ 
protons/cm\2\ for proton energy greater than 50 MeV.
    Note 1: Application specific integrated circuits (ASICs) 
``specially designed'' for defense articles are controlled by 
Category XI(c) of the USML regardless of characteristics.
    Note 2:  See 9A515.x for controls on ``space qualified'' 
microelectronic circuits that are not rated certified, or otherwise 
specified or described as meeting or exceeding the characteristics 
in paragraph .d.
    Note 3: See 3A001.a for controls radiation-hardened 
microelectronic circuits ``subject to the EAR'' that are not 
controlled by 9A515.d or 9A515.x.
    Note 4: Microelectronic circuits that are ``specially designed'' 
for defense articles on the USML or for ``600 series'' items are 
controlled under 3A611.x.
    e. through w. [Reserved]
    x. ``Parts,'' ``components,'' ``accessories'' and 
``attachments'' that are ``space qualified'' and not enumerated or 
controlled in the USML, elsewhere within ECCN 9A515, or an ECCN 
containing ``space-qualified'' as a control criterion, i.e., 
3A001.b.1, 3A001.e.4, 3A002.a.3, 3A002.g.1, 3A991.o, 3A992.b.3, 
6A002.a.1, 6A002.b.2, 6A002.d.1, 6A002.e, 6A004.c and .d, 6A008.j.1, 
or 6A998.b.

    Note 1: ``Parts,'' ``components,'' ``accessories,'' and 
``attachments'' specified in USML subcategory XV(e) or enumerated in 
other USML categories are subject to the controls of that paragraph 
or category.

0
42. In Supplement No. 1 to Part 774, between the entries for ECCNs 
9B117 and 9B990, add new entry for ECCN 9B515 to read as follows:

9B515 Test, inspection, and production ``equipment'' ``specially 
designed'' for ``spacecraft'' and related commodities, as follows 
(see List of Items Controlled).

License Requirements

Reason for Control: NS, RS, AT

[[Page 31443]]

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

License Exceptions

LVS: $1500; $5000 for 9B515.c.
GBS: N/A.
CIV: N/A.
STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) 
of the EAR) may not be used for any item in 9B515.

List of Items Controlled

    Unit: N/A.
    Related Controls: N/A.
    Related Definitions: N/A.
    Items:
    a. Test, inspection, and production ``equipment'' ``specially 
designed'' for the ``production'' or ``development'' of commodities 
enumerated in ECCN 9A515 or USML Category XV.
    b. ``Equipment,'' cells, and stands ``specially designed'' for 
testing, analysis and fault isolation of commodities enumerated in 
ECCN 9A515, 9A004 or USML Category XV.
    c. Environmental test chambers capable of pressures below 
(10-4) Torr, and ``specially designed'' ``components'' 
therefor.

0
43. In Supplement No. 1 to Part 774, between the entries for ECCNs 
9D105 and 9D990, add a new entry for ECCN 9D515 to read as follows:

9D515 ``Software'' ``specially designed'' for the ``development,'' 
``production'' operation, installation, maintenance, repair, 
overhaul, or refurbishing of ``spacecraft'' and related commodities, 
as follows (see List of Items Controlled).

License Requirements

Reason for Control: NS, RS, AT.

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

License Exceptions

CIV: N/A.
TSR: N/A.
STA: (1) Paragraph (c)(1) of License Exception STA (Sec.  
740.20(c)(1) of the EAR) may not be used for 9D515.b through .g. (2) 
Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) of the 
EAR) may not be used for any ``software'' in 9D515.

List of Items Controlled

Unit: $ value.
Related Controls: ``Software'' directly related to articles 
enumerated in USML Category XV is subject to the control of USML 
paragraph XV(f). See also ECCNs 3D001, 6D001, 6D002, and 6D991 for 
controls of specific software ``specially designed'' for certain 
``space qualified'' items.
Related Definitions: N/A.
Items:

    a. ``Software'' (other than ``software'' controlled in 
paragraphs .b through .g of this entry) ``specially designed'' for 
the ``development,'' ``production,'' operation, installation, 
maintenance, repair, overhaul, or refurbishing of commodities 
controlled by ECCN 9A515 or ``equipment'' controlled by 9B515.
    b. ``Source code'' that contains the algorithms or control 
principles (e.g., clock management), precise orbit determination 
(e.g., ephemeris, pseudo range), signal construct (e.g., pseudo-
random noise (PRN) anti-spoofing) ``specially designed'' for items 
controlled by ECCN 9A515.
    c. ``Source code'' ``specially designed'' for the integration, 
operation, or control (i.e., use) of items controlled by ECCN 9A515.
    d. ``Source code'' that contains algorithms or modules 
``specially designed'' for system, subsystem, component, part, or 
accessory calibration, manipulation, or control of items controlled 
by ECCN 9A515.
    e. ``Source code'' ``specially designed'' for data assemblage, 
extrapolation, or manipulation of items controlled by ECCN 9A515.
    f. ``Source code'' that contains the algorithms or control laws 
``specially designed'' for attitude, position, or flight control of 
items controlled in ECCN 9A515.
    g. ``Source code'' ``specially designed'' for built-in test and 
diagnostics for items controlled by ECCN 9A515.
0
44. In Supplement No. 1 to Part 774, between the entries for ECCNs 
9E102 and 9E990, add new entry for ECCN 9E515 to read as follows:

9E515 ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, 
overhaul, or refurbishing of ``spacecraft'' and related commodities, 
as follows (see List of Items Controlled).

License Requirements

Reason for Control: NS, MT, RS, AT

------------------------------------------------------------------------
                Control(s)                         Country chart
------------------------------------------------------------------------
NS applies to entire entry...............  NS Column 1
MT applies to technology for items in      MT Column 1
 9A515.d controlled for MT reasons.
RS applies to entire entry...............  RS Column 1
AT applies to entire entry...............  AT Column 1
------------------------------------------------------------------------

License Exceptions

CIV: N/A.
TSR: N/A.
STA: (1) Paragraph (c)(1) of License Exception STA (Sec.  
740.20(c)(1) of the EAR) may not be used for 9E515.b. (2) Paragraph 
(c)(2) of License Exception STA (Sec.  740.20(c)(2) of the EAR) may 
not be used for any ``technology'' in 9E515.

List of Items Controlled

Unit: $ value.
Related Controls: Technical data directly related to articles 
enumerated in USML Category XV are subject to the control of USML 
paragraph XV(f). See also ECCNs 3E001, 3E003, 6E001, and 6E002 for 
specific ``space-qualified'' items.
Related Definitions: N/A.
Items:
a. ``Technology'' ``required'' for the ``development,'' 
``production,'' operation, installation, maintenance, repair, 
overhaul or refurbishing of commodities controlled by ECCN 9A515, 
``equipment'' controlled by 9B515, or ``software'' controlled by 
9D515.
    Note: ``Build-to-print technology'' excluded from paragraph b. 
is classified under 9E515.a.
    b. ``Technology'' (other than ``build-to-print technology'') 
``required'' for the ``development,'' ``production,'' design 
verification, manufacturability, or quality control for items in 
ECCN 9A515, except items in ECCN 9A515.b.

0
45. In Supplement No. 4 to Part 774, add three sentences to the 
conclusion of paragraph (a)(3) and one sentence to the conclusion of 
paragraph (a)(4) and revise the first sentence of paragraph (a)(5), to 
read as follows:

Supplement No. 3 to Part 774--Commerce Control List Order of Review

* * * * *
    (a) * * *
    (3) Step 3. * * * The 9x515 ECCNs describe satellites, related 
items, and some types of radiation-hardened microelectronic circuits 
that were once subject to the ITAR under USML Category XV. 
Similarly, the first step when determining the classification status 
of such items that are no longer listed on USML Category XV is to 
determine whether they are controlled in a 9x515 ECCN. If so, the 
item is classified under that 9x515 ECCN paragraph. If not, then one 
needs to review the rest of the CCL to determine whether the item is 
within the scope of another ECCN.
    (4) Step 4. * * * Similarly, if a satellite, related item, or 
radiation-hardened microelectric circuit are not described in 9A515, 
then review 9A515.x to determine if it is controlled there as a 
result of being ``space qualified.''
* * * * *
    (5) Step 5. If an item is not classified by a ``600 series'' or 
``500 series'' ECCN, then starting from the beginning of the product 
group analyze each ECCN to determine whether any other ECCN in that 
product group describes the item. * * *
* * * * *

    Dated: May 14, 2013.
Kevin J. Wolf,
Assistant Secretary of Commerce for Export Administration.
[FR Doc. 2013-11986 Filed 5-23-13; 8:45 am]
BILLING CODE 3510-33-P