Document ID: BIS-2017-0017-0001
Agency: bis
Document Type: Rule
Title: Revision to an Entry on the Entity List
Posted Date: 2017-04-18T04:00Z

[Federal Register Volume 82, Number 73 (Tuesday, April 18, 2017)]
[Rules and Regulations]
[Pages 18217-18220]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-07833]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 744

[Docket No. 170207154-7253-01]
RIN 0694-AH32

Revision to an Entry on the Entity List

AGENCY: Bureau of Industry and Security, Commerce

ACTION: Final rule.

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SUMMARY: This rule amends the Export Administration Regulations (EAR) 
by revising one existing entry in the Entity List, under the 
destination of Russia. The license requirement for the entry is being 
revised to conform with a general license issued by the Department of 
the Treasury's Office of Foreign Assets Control on February 2, 2017.

DATES: This rule is effective April 18, 2017.

FOR FURTHER INFORMATION CONTACT: Chair, End-User Review Committee, 
Office of the Assistant Secretary, Export Administration, Bureau of 
Industry and Security, Department of Commerce, Phone: (202) 482-5991, 
Email: ERC@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

[[Page 18218]]

Background

    The Entity List (Supplement No. 4 to Part 744) identifies entities 
and other persons reasonably believed to be involved, or to pose a 
significant risk of being or becoming involved, in activities contrary 
to the national security or foreign policy interests of the United 
States. The EAR imposes additional license requirements on, and limits 
the availability of most license exceptions for, exports, reexports, 
and transfers (in-country) to those listed. The ``license review 
policy'' for each listed entity or other person is identified in the 
License Review Policy column on the Entity List and the impact on the 
availability of license exceptions is described in the Federal Register 
notice adding entities or other persons to the Entity List. BIS places 
entities and other persons on the Entity List pursuant to sections of 
part 744 (Control Policy: End-User and End-Use Based) and part 746 
(Embargoes and Other Special Controls) of the EAR.
    The ERC, composed of representatives of the Departments of Commerce 
(Chair), State, Defense, Energy and, where appropriate, the Treasury, 
makes all decisions regarding additions to, removals from, or other 
modifications to the Entity List. The ERC makes all decisions to add an 
entry to the Entity List by majority vote and all decisions to remove 
or modify an entry by unanimous vote.

Entity List Revision

    This rule implements the decision of the ERC to revise one existing 
entry in the Entity List, under the destination of Russia as described 
below.

Modification to License Requirements for an Entry on the Entity List

    On February 2, 2017, the Department of the Treasury's Office of 
Foreign Assets Control (OFAC) issued General License No. 1, Authorizing 
Certain Transactions with the Federal Security Service, an entity in 
the Russian Federation. This general license authorizes transactions 
and activities, otherwise prohibited pursuant to Executive Order 13694 
(E.O.) of April 1, 2015, as amended by E.O. 13757 of December 28, 2016, 
that are necessary and ordinarily incident to: Requesting, receiving, 
utilizing, paying for, or dealing in licenses, permits, certifications, 
or notifications issued or registered by the Federal Security Service 
(a.k.a. Federalnaya Sluzhba Bezopasnosti) (a.k.a. FSB) for the 
importation, distribution or use of information technology products in 
the Russian Federation, provided that (i) the exportation, 
reexportation, or provision of any goods or technology that are subject 
to the EAR, 15 CFR parts 730 through 774, are licensed or otherwise 
authorized by the Department of Commerce and (ii) the payment of any 
fees to the Federal Security Service for such licenses, permits, 
certifications, or notifications does not exceed $5,000 in any calendar 
year. The OFAC general license also authorizes transactions and 
activities ordinary and necessarily incident to complying with law 
enforcement or administrative actions or investigations involving the 
Federal Security Service and transactions and activities ordinary and 
necessarily incident to complying with rules and regulations 
administrated by the Federal Security Service. The general license does 
not authorize exportation, reexportation, or provision of any goods, 
technology, or services to the Crimea region of Ukraine or any 
transactions that otherwise violate E.O. 13757 of April 1, 2015. Any 
questions regarding to the scope of this general license should be 
directed to OFAC.
    In light of OFAC's General License No. 1, BIS makes a conforming 
change by modifying the listing for the Federal Security Service on the 
Entity List under the destination of Russia (the term used in the EAR 
for the Russian Federation). This final rule modifies the license 
requirement column for this entity to specify that the Entity List's 
license requirements do not apply to items subject to the EAR that are 
related to transactions authorized by OFAC pursuant to new General 
License No. 1 (i.e., transactions that are necessary and ordinarily 
incident to requesting, receiving, utilizing, paying for, or dealing in 
licenses, permits, certifications, or notifications issued or 
registered by the Federal Security Service (a.k.a. Federalnaya Sluzhba 
Bezopasnosti) (a.k.a. FSB) for the importation, distribution, or use of 
information technology products in the Russian Federation, so long as 
the transactions do not involve exportation, reexportation, or 
provision of any goods, technology, or services to the Crimea region of 
Ukraine and do not otherwise violate E.O. 13757). Except for the 
limited purposes described above, this conforming change does not 
authorize the exportation, reexportation, or provision of goods or 
technology to or on behalf of the Federal Security Service.
    This final rule makes the following revision to one entry on the 
Entity List:

Russia
    (1) Federal Security Service (FSB), a.k.a., the following one 
alias:

    --Federalnaya Sluzhba Bezopasnosti.
    Ulitsa Kuznetskiy Most, Dom 22, Moscow 107031, Russia; and 
Lubyanskaya Ploschad, Dom 2, Moscow 107031, Russia.

    Note: As described above, the changes this final rule makes to 
this Russian entity are limited to the License requirement column 
for this entry.

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 of 1979, as appropriate 
and to the extent permitted by law, pursuant to Executive Order 13222, 
as amended by Executive Order 13637.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, 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 to be not significant for 
purposes of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to nor be subject to a penalty for failure to 
comply with a collection of information, subject to the requirements of 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), 
unless that collection of information displays a currently valid Office 
of Management and Budget (OMB) Control Number. This regulation involves 
collections previously approved by OMB under control number 0694-0088, 
Simplified Network Application Processing System, which includes, among 
other things, license

[[Page 18219]]

applications and carries a burden estimate of 43.8 minutes for a manual 
or electronic submission. Total burden hours associated with the PRA 
and OMB control number 0694-0088 are not expected to increase as a 
result of this rule. You may send comments regarding the collection of 
information associated with this rule, including suggestions for 
reducing the burden, to Jasmeet K. Seehra, Office of Management and 
Budget (OMB), by email to Jasmeet_K._Seehra@omb.eop.gov, or by fax to 
(202) 395-7285.
    3. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 13132.
    4. Section 553(d) of the Administrative Procedure Act (APA) 
generally provides that rules may not take effect earlier than thirty 
(30) days after they are published in the Federal Register. BIS finds 
good cause to waive the 30-day delay in effectiveness under 5 U.S.C. 
553(d)(1) because this rule is a substantive rule which relieves a 
restriction. This rule's revision of the license requirement for the 
Federal Security Service (FSB) reduces the compliance burden that may 
be imposed on exporters due to the inconsistent sanctions. The revision 
also reduces the parties that are affected by the license requirements, 
addressing an unintended consequence of listing this entity on the 
Entity List.
    In addition, the Department finds that there is good cause under 5 
U.S.C. 553(b)(3)(B) to waive the provisions of the Administrative 
Procedure Act (APA) requiring prior notice and the opportunity for 
public comment for the revision included in this rule because they are 
either unnecessary or contrary to the public interest. The revision is 
limited to ensure consistency with OFAC's General License No. 1, and 
thus prior notice and the opportunity for public comment are 
unnecessary. The conforming change to the listing for Federal Security 
Service (FSB) is intended to ensure consistent treatment of this entity 
under both the EAR and OFAC's sanctions regime. Narrowing the scope of 
the license requirements addresses unintended consequences and 
unnecessary economic losses that U.S. exporters may face as they turn 
away potential sales due to this entity being listed on the Entity 
List. By publishing without prior notice and comment, U.S. exporters 
will be able to submit licenses, permits, certifications and 
notifications that are required under Russian law for information 
technology products imported into, distributed or used in Russia 
immediately, an action which was approved under OFAC's General License 
No. 1 since February 2, 2017. A prolonging of the inconsistent 
treatment for the sanctioned entity would create unnecessary compliance 
burden on exporters who are complying with OFAC and BIS regulations as 
well as additional delay and loss of potential sales for U.S. 
exporters.
    No other law requires that a notice of proposed rulemaking and an 
opportunity for public comment be given for this final rule. Because a 
notice of proposed rulemaking and an opportunity for public comment are 
not required under the APA or by any other law, the analytical 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) 
are not applicable. As a result, no final regulatory flexibility 
analysis is required and none has been prepared.

List of Subjects in 15 CFR Part 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

    Accordingly, part 744 of the Export Administration Regulations (15 
CFR parts 730-774) is amended as follows:

PART 744--[AMENDED]

0
1. The authority citation for 15 CFR part 744 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.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 
U.S.C. 7210; 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. 12947, 60 FR 5079, 3 CFR, 
1995 Comp., p. 356; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 
228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 
66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 
CFR, 2001 Comp., p. 786; Notice of August 4, 2016, 81 FR 52587 
(August 8, 2016); Notice of September 15, 2016, 81 FR 64343 
(September 19, 2016); Notice of November 8, 2016, 81 FR 79379 
(November 10, 2016); Notice of January 13, 2017, 82 FR 6165 (January 
18, 2017).

0
2. Supplement No. 4 to part 744 is amended by revising, under Russia, 
one Russian entity ``Federal Security Service (FSB), a.k.a., the 
following one alias:

Federalnaya Sluzhba Bezopasnosti. Ulitsa Kuznetskiy Most, Dom 22, 
Moscow 107031, Russia; and Lubyanskaya Ploschad, Dom 2, Moscow 107031, 
Russia'' to read as follows:

Supplement No. 4 to Part 744--Entity List

* * * * *

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                                                                              License review    Federal Register
        Country                     Entity             License requirement        policy            citation
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
RUSSIA.................                                         * * * * * *
                         Federal Security Service      For all items        Presumption of     82 FR 724, 1/4/
                          (FSB), a.k.a., the            subject to the EAR   denial.            17. 82 FR
                          following one alias:          (see Sec.   744.11                      [INSERT FR PAGE
                         --Federalnaya Sluzhba          of the EAR), apart                      NUMBER AND 4/18/
                          Bezopasnosti.                 from items that                         17].
                         Ulitsa Kuznetskiy Most, Dom    are related to
                          22, Moscow 107031, Russia;    transactions that
                          and Lubyanskaya Ploschad,     are authorized by
                          Dom 2, Moscow 107031,         the Department of
                          Russia.                       the Treasury's
                                                        Office of Foreign
                                                        Assets Control
                                                        pursuant to
                                                        General License
                                                        No. 1 of February
                                                        2, 2017.
                                                                * * * * * *
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[[Page 18220]]

    Dated: April 13, 2017.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2017-07833 Filed 4-17-17; 8:45 am]
BILLING CODE 3510-33-P