Document ID: BIS-2014-0009-0010
Agency: bis
Document Type: Rule
Title: Revisions to Support Document Requirements for License Applications
Posted Date: 2015-03-13T04:00Z

[Federal Register Volume 80, Number 49 (Friday, March 13, 2015)]
[Rules and Regulations]
[Pages 13210-13222]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-05784]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 742, 748 and 762

[Docket No. 131018874-5199-02]
RIN 0694-AG00

Revisions To Support Document Requirements for License 
Applications Under the Export Administration Regulations

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

ACTION: Final rule.

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SUMMARY: This rule finalizes changes to the support document 
requirements for license applications submitted to the Bureau of 
Industry and Security (BIS) and is part of BIS's retrospective 
regulatory review under Executive Order 13563. In addition to 
clarifying and streamlining the support document requirements for 
license applications in part 748 of the Export Administration 
Regulations (EAR), this final rule removes the requirement to obtain an 
International Import Certificate or Delivery Verification in connection 
with a license application and limits the requirement to obtain a 
Statement by Ultimate Consignee and Purchaser to exports, reexports, 
and transfers (in-country) of 600 Series Major Defense Equipment. 
Revisions to the EAR affecting BIS's participation in issuing documents 
for the Import Certificate and Delivery Verification system for imports 
into the United States will be addressed in a future final rule, as 
will potential substantive changes to information collections under the 
Paperwork Reduction Act.

DATES: This rule is effective March 13, 2015.

FOR FURTHER INFORMATION CONTACT: Patricia Muldonian, Office of National 
Security and Technology Transfer Controls, 202-482-4479, 
patricia.muldonian@bis.doc.gov, or Steven Emme, Office of the Assistant 
Secretary for Export Administration, 202-482-5491, 
steven.emme@bis.doc.gov.

SUPPLEMENTARY INFORMATION: 

Background

    On April 9, 2014, the Bureau of Industry and Security (BIS) 
published a proposed rule (79 FR 19552) (hereinafter, the ``April 9 
rule'') to revise the support document requirements of the Export 
Administration Regulations (EAR). This proposed rule was part of BIS's 
retrospective regulatory review being undertaken under Executive

[[Page 13211]]

Order 13563, which requires each agency to ``periodically review its 
existing significant regulations to determine whether any such 
regulations should be modified, streamlined, expanded, or repealed so 
as to make the agency's regulatory program more effective or less 
burdensome in achieving the regulatory objectives.'' The EAR's support 
document requirements are largely premised on the Import Certificate/
Delivery Verification (IC/DV) system. As described in the proposed 
rule, the IC/DV system, while intended to prevent diversion and 
increase awareness among participating countries of potential 
enforcement concerns, has limited utility today and imposes unnecessary 
burdens on license applicants and BIS.
    To further the aims of Executive Order 13563, BIS proposed to 
streamline and clarify the support document requirements as well as 
reduce unnecessary burdens for license applicants by removing the 
requirement to obtain International Import Certificates (ICs) for 
applications and by increasing the value threshold for requiring a 
Statement by Ultimate Consignee and Purchaser for an application. In 
addition, BIS proposed to eliminate the agency's participation in 
issuing United States ICs, ICs with triangular transaction stamp, and 
DV certificates. The proposals to change BIS's participation in issuing 
U.S. ICs and DVs will be addressed in a subsequent final rule. In 
addition, any other changes that substantively affect information 
collection burden hour estimates under the Paperwork Reduction Act will 
also be addressed in the subsequent, final rule.
    In response to the proposed rule, BIS received eight public 
comments. Generally, commenters believed that the proposed rule 
provided greater clarity and flexibility, streamlined requirements, and 
ended outdated and ineffective requirements under the IC/DV system. 
However, to address public comments and to further the aims of 
Executive Order 13563, BIS is making additional changes to the proposed 
rule, as described herein. This final rule changes the implementation 
of the IC/DV system. That system is not addressed in the Wassenaar 
Arrangement Initial Elements nor is there an applicable U.S. statutory 
requirement for the system. A summary of the public comments and 
changes made to the proposed rule are addressed below.

Support Document Requirements for License Applications Submitted to BIS

Elimination of Import Certificate Requirement and Changes to 
Requirement to Obtain Statement by Ultimate Consignee and Purchaser

    The April 9 rule would have eliminated the requirement to obtain an 
IC in conjunction with a BIS license application, and instead proposed 
the imposition of a requirement to obtain a Statement by Ultimate 
Consignee and Purchaser for certain license applications for 
commodities destined for countries (other than the People's Republic of 
China (PRC)) or territories not in the ``Americas'' (as proposed to be 
defined in Sec.  772.1). This final rule maintains the elimination of 
Import Certificates but also limits the scope of applications requiring 
a Statement by Ultimate Consignee and Purchaser.
    Commenters largely supported the proposal to eliminate the 
requirement to obtain ICs. They stated that the proposal would 
eliminate an outdated, burdensome requirement that creates red tape and 
obstacles for U.S. exporters that are not faced by exporters in other 
countries. One commenter, however, disagreed and stated that some U.S. 
exporters and their foreign affiliates have established timely 
procedures for obtaining ICs. Further, the commenter stated that the IC 
notifies the government that items controlled for national security 
reasons are being imported and that the government commits to take 
responsibility for any subsequent exports of the items. While some U.S. 
exporters may have developed efficient procedures for handling the IC 
requirement, such procedures do not justify the imposition of a 
burdensome requirement that provides little utility. In addition, BIS 
believes that the commenter overstates the purpose of the IC 
requirement. The IC only notifies the government of the importing 
country that the national security controlled items are planned to be 
imported into the country. Also, it is not the role of the government 
to take responsibility for subsequent exports; under U.S. law, the 
exporter must comply with any applicable requirements for the 
subsequent export of items subject to the EAR or other applicable 
regulations.
    While commenters largely supported the elimination of the IC 
requirement, some commenters expressed concerns about requiring a 
Statement by Ultimate Consignee and Purchaser for commodities 
controlled for national security reasons valued over $50,000 and 
destined for a location not in the PRC or the ``Americas.'' Three 
commenters stated that the proposed requirement would still be more 
restrictive than the International Traffic in Arms Regulations (ITAR), 
22 CFR parts 120-130. The commenters stated that under the ITAR, the 
DSP-83 Nontransfer and Use Certificate is the equivalent support 
document for license applications to the Department of State's 
Directorate of Defense Trade Controls (DDTC), and the DSP-83 is only 
required for significant military equipment (SME), as defined in Sec.  
120.7 of the ITAR. Thus, for 600 series items and 9x515 spacecraft 
items transitioning from the USML to the CCL, the proposed support 
document requirements would actually be more burdensome under the EAR 
than the ITAR. Further, one commenter also stated that requiring a 
Statement by Ultimate Consignee and Purchaser would prevent industry in 
allied countries from optimizing procurement of U.S. equipment for 
``long lead items or bulk procurement'' in advance of identifying a 
customer. The commenter stated that such capability is necessary for 
affordability and timeliness of space and military assets for U.S. 
allies and that imposing a more strict support document requirement 
than the ITAR is inconsistent for items that have been deemed to not 
require the strictest controls of the ITAR.
    In order to address these concerns, commenters provided different 
suggestions. Two commenters suggested requiring a Statement by Ultimate 
Consignee and Purchaser for items on the Wassenaar Very Sensitive List. 
One commenter suggested the requirement be tied to countries in Country 
Group D:5 and that the value threshold be raised to $1 million. Also, 
one commenter suggested amending the scope of locations subject to the 
requirement by pointing out that many allied countries, such as those 
in NATO, would be subject to the requirement as they are not part of 
the exclusion for the ``Americas.''
    BIS agrees that the EAR should not impose additional or more 
burdensome requirements than the ITAR, and has repeated this assertion 
in many Federal Register publications pertaining to Export Control 
Reform (see e.g., Proposed Revisions to the Export Administration 
Regulations: Implementation of Export Control Reform; Revisions to 
License Exceptions After Retrospective Regulatory Review, 77 FR 37524 
(June 21, 2012); Revisions to the Export Administration Regulations: 
Initial Implementation of Export Control Reform, 78 FR 22660 (Apr. 16, 
2013)).

[[Page 13212]]

    The support document requirements should not hinder the benefits 
articulated under ECR by imposing more strict requirements for items 
moving to the EAR that do not warrant the controls of the ITAR. In 
addition, non-munitions items subject to the EAR should not have more 
onerous support document requirements than those items providing a 
critical military or intelligence capability that are listed on the 
USML. Consequently, in addition to removing the IC requirement, BIS is 
amending Sec.  748.11(a)(1) to limit the requirement to obtain a 
Statement by Ultimate Consignee and Purchaser to commodities that are 
``600 Series Major Defense Equipment.'' BIS agrees with the approach 
stated by one commenter that the requirement should match the ITAR in 
focusing on the type of item rather than situational parameters, such 
as value. BIS believes that using ``600 Series Major Defense 
Equipment'' best follows this approach and avoids requiring greater 
support document requirements for items subject to the EAR than items 
subject to the ITAR.
    With this change to the requirement for providing a Statement by 
Ultimate Consignee and Purchaser, BIS is also eliminating the proposed 
$50,000 value threshold and the exclusion for locations in the 
``Americas.'' All commodities that are ``600 Series Major Defense 
Equipment,'' as defined in Sec.  772.1, will require a Statement by 
Ultimate Consignee and Purchaser to any destination other than the PRC, 
regardless of value. However, BIS will maintain discretion to require 
applicants to obtain a Statement by Ultimate Consignee and Purchaser 
for a license application that would not otherwise require one. Also, 
BIS may add, as a condition on a license, a requirement to obtain a 
Statement by Ultimate Consignee and Purchaser or a purchase order prior 
to shipment. Such requests may be common for license applications 
involving items controlled for Nuclear Nonproliferation, Chemical and 
Biological Weapons, or Missile Technology reasons to countries in 
Country Group D:2, D:3, or D:4, respectively. Additional changes to the 
proposed rule on the requirement to obtain a Statement by Ultimate 
Consignee and Purchaser are reflected below under changes to Sec.  
748.11.
    Because this final rule removes the requirement to obtain an IC in 
conjunction with a license application submitted to BIS, this final 
rule also removes the requirement to obtain a DV in conjunction with a 
license application. This is reflected in the removal of text in prior 
Sec.  748.13 and Supplement No. 4 to part 748. BIS did not receive any 
public comments on this topic.

Section 748.6--General Instructions for License Applications

    The April 9 rule proposed to revise Sec.  748.6(a) to provide 
greater clarity on general instructions for license applications and 
support documents, reference the specific requirements for support 
documents in proposed Sec. Sec.  748.9 through 748.13, and refer to a 
new chart in Supplement No. 4 to part 748. BIS did not receive any 
public comments on Sec.  748.6, and this final rule adopts that 
language with one exception. Because this final rule removes the 
proposed chart in Supplement No. 4 (as further explained herein), the 
sentence referencing the chart has been deleted.

Section 748.9--General Instructions for Support Documents

    In the proposed rule, Sec.  748.9 described the scope of support 
document requirements for license applications; the type of 
applications requiring a support document (i.e., PRC End-User 
Statement, Statement by Ultimate Consignee and Purchaser, or Firearms 
Convention (FC) Import Certificate); exceptions to such requirements; 
content requirements; recordkeeping requirements; and other general 
requirements. This final rule largely adopts the description set forth 
in Sec.  748.9 with additional modifications based on public comments 
and other changes, as described below.
    Two commenters requested that BIS insert a clarifying note that 
applicants are not required to obtain support documents from end users. 
BIS did not accept this recommendation because the proposed rule did 
not include a requirement that applicants must obtain a support 
document from end users. However, if an end user is also an ultimate 
consignee on the license application, then that end user would be 
subject to applicable support document requirements. In addition, BIS 
notes that the agency may request additional information from any party 
listed on the license application, including end users.
    Two commenters recommended that BIS delete the phrase, ``for 
certain transactions'' from proposed Sec.  748.9(b)(1), which described 
the support document requirements for license applications involving 
the PRC. BIS does not accept this recommendation as not all license 
applications involving the PRC require a PRC End-User Statement. Thus, 
the qualifying phrase is needed. With respect to the scope of the 
requirements for a Statement by Ultimate Consignee and Purchaser and 
for an FC Import Certificate, two commenters recommended that the 
Organization of American States (OAS) be made new Country Group A:7 and 
that ``Americas'' be replaced with ``destinations not identified in 
Country Group A:7.'' BIS rejects these recommendations as the term 
``Americas'' is removed under this final rule due to the changes to 
requirements for the Statement by Ultimate Consignee and Purchaser, as 
described above. Further, since the OAS is only used in conjunction 
with one requirement under the EAR, BIS believes it is inappropriate to 
make it a Country Group so this final rule continues to list the 
countries in Sec.  748.12.
    One commenter pointed out that proposed Sec.  748.9(b)(1)-(b)(3) 
used the term ``ultimately destined'' with respect to the PRC End-User 
Statement and Statement by Ultimate Consignee and Purchaser, but only 
used ``destined'' for the FC Import Certificate. Under this final rule, 
this wording no longer appears in new Sec.  748.9(b) because the 
description for the requirements to obtain a support document has been 
further streamlined. However, this final rule only uses ``destined'' in 
Sec. Sec.  748.10(a), 748.11(a), and 748.12(a) when describing the 
requirements for the three support documents.
    One commenter stated that the final rule should remove any 
ambiguity over whether support documents must be submitted as part of 
the license application, and the commenter cited to differing 
requirements in Sec.  748.9(f), (g), and (i). Additionally, with 
respect to PRC End-User Statements, two commenters recommended that 
proposed Sec.  748.10(d)(1) be revised to allow for applications 
requiring a PRC End-User Statement to be submitted to BIS prior to the 
PRC's issuance of the statement, and condition the license such that no 
items may be shipped under the license until the statement is obtained 
by the applicant.
    BIS agrees that the final rule should remove ambiguity on this 
topic, but BIS only partially accepts the recommendation regarding the 
PRC End-User Statement. This final rule adds new Sec.  748.9(e)(1), 
which applies to all support documents required under the EAR. Unless 
BIS informs an applicant that a support document must be submitted with 
a specific application, the applicant may submit an application prior 
to receipt of a copy of the support document. However, rather than 
conditioning the license, new Sec.  748.9(e)(1) provides that the 
license holder may not ship items authorized on the license until

[[Page 13213]]

obtaining a copy of the support document. Thus, for those applications 
BIS believes require support documentation in addition to that 
specified in part 748, BIS will have discretion to consider a support 
document contemporaneous with the license application. For all other 
applications, applicants may obtain the support document after 
submitting the application. However, applicants may not ship prior to 
receipt of a copy of the support document, and they must retain the 
original or a copy of the document in conformance with the 
recordkeeping requirements of the EAR (see further below for a 
discussion on allowing retention of copies).
    One commenter noted that there was no exception to the support 
document requirements when the U.S. Government is an end user in a 
foreign country in proposed Sec.  748.9(d)(1). BIS agrees that for 
transactions for which License Exception GOV is not available, the U.S. 
Government should not have to supply a support document. Therefore, 
this final rule adds a new exception in new Sec.  748.9(c)(1) for when 
the purchaser or ultimate consignee is an ``Agency of the United States 
Government,'' as defined in Sec.  740.11(b)(1). If another party listed 
on the license application is an ultimate consignee or purchaser and 
does not qualify for an exception listed under new Sec.  748.9(c)(1), 
then such party is still subject to any applicable support document 
requirements.
    One commenter requested guidance on a situation where a support 
document may be required under proposed Sec.  748.9(d)(1)(i), which 
described the exception to support document requirements for foreign 
governments excluding the PRC. Under this final rule, if a license 
application involving the export of 600 series MDE lists a non-
governmental entity as a purchaser and a foreign government agency 
(excluding an agency of the PRC) as an ultimate consignee and end user, 
then a Statement by Ultimate Consignee and Purchaser would be required 
from the purchaser but not the ultimate consignee. One commenter 
questioned whether the English translation requirement for proposed 
Sec.  748.9(e)(1), should be included in that section. BIS confirms 
that the English translation requirement should be in Sec.  748.9 as 
the requirement applies to all support documents.
    For proposed Sec.  748.9(f)(1), two commenters stated that 
obtaining an electronic copy of a support document should suffice and 
thus the requirement to obtain an original support document should be 
removed. BIS agrees and has removed references to obtaining an original 
version of the support document throughout this final rule. Two 
commenters recommended striking the reference to ``import certificate'' 
in proposed Sec.  748.9(h). Proposed Sec.  748.9(h) applied to the 
grace period for complying with the support document requirements 
following a regulatory change. Given that this final rule removes the 
requirement to obtain an IC for any license application, BIS is 
changing the reference from ``import certificate'' to ``FC Import 
Certificate'' since future regulatory changes may affect the 
requirements for that support document.
    To further streamline and clarify the support document 
requirements, BIS is making additional changes to this section. First, 
since the final rule further simplifies the support document 
requirements, BIS eliminated much of the text in new Sec.  748.9(b) to 
eliminate redundancy. The specific requirements triggering a support 
document requirement are now fully described in the applicable section 
applying to the specific support document. Also, this final rule adds a 
new note to Sec.  748.9(b) to make more clear that BIS may request that 
an applicant obtain a support document for any application.
    This final rule also removes the distinction for support document 
requirements applying to reexport and in-country transfer license 
applications. This change simplifies the requirements, and given the 
changes for ICs and Statements by Ultimate Consignee and Purchaser 
described above, the only impact would be to require a Statement by 
Ultimate Consignee and Purchaser for 600 series MDE destined for a 
country not in Country Group D:1 or E:1. New Sec.  748.9(d)(2)(i), 
which addresses responsibility for full disclosure, has been revised 
from the proposed rule. As proposed, that provision indicated that 
support documents do not have to be submitted to BIS as part of the 
application unless the applicant is informed by BIS to do so. In 
addition to the revisions described above, that section has also been 
updated to provide that information contained in a support document 
obtained after submission of a license application and not submitted to 
BIS as part of the application cannot be construed as modifying the 
specific information supplied in a license application or a license. 
This change is made in accordance with BIS's policy on license 
conditions, which began on December 8, 2014. New Sec.  748.9(h)(2) has 
been revised to indicate BIS retains discretion to require additional 
information for applications filed during the 45-day grace period for 
complying with the support document requirements.
    As part of the simplification effort, this final rule also 
harmonizes certain support document requirements that varied slightly 
among the documents. New Sec.  748.9(e)(2) describes the requirements 
to follow in SNAP-R for license applications requiring a support 
document, regardless of whether BIS has informed the applicant that the 
document must be submitted as part of the application. Further, new 
Sec.  748.9(f) describes the recordkeeping requirements for all support 
documents, and this final rule removes references to original document 
requirements, random sampling of documents (which is redundant of other 
sections of the EAR that apply to BIS's ability to request documents), 
and returning support documents to foreign importers (which is now 
obsolete due to the ability to retain copies).

Section 748.10--PRC End-User Statement

    The proposed rule described the requirements for obtaining a PRC 
End-User Statement under Sec.  748.10. This final rule largely adopts 
the requirements under the proposed rule, with the following changes 
described below.
    Two commenters stated that it was unclear whether the value 
threshold requirement for any commodity requiring a license for any 
reason on the Commerce Control List (CCL) applies to one unit, line 
item value, or total license value in proposed Sec.  748.10(a)(3). That 
value threshold requirement applies to the aggregate value for all 
commodities listed in the application that require a license to the PRC 
based on any reason on the CCL. To make this requirement clearer, BIS 
is revising that description, under new Sec.  748.10(a)(3), to indicate 
that the license application includes ``any commodity(ies) requiring a 
license to the PRC for any reason on the Commerce Control List, and the 
total value of such commodity(ies) requiring a license exceeds 
$50,000.''
    One commenter recommended removing the last sentence in proposed 
Sec.  748.10(b)(1) that required obtaining an original PRC End-User 
Statement. As described above, BIS accepts this comment throughout this 
final rule and has revised the text accordingly. Two commenters 
suggested putting the contact information for the PRC's Ministry of 
Commerce (MOFCOM) on the BIS Web site, which would be referred to by 
the EAR. BIS has added a reference to the BIS Web site in new

[[Page 13214]]

Sec.  748.10(b)(2) to obtain the current contact information for 
MOFCOM.
    Two commenters stated that proposed Sec.  748.10(d)(5), which 
required that the first application used in conjunction with a PRC End-
User Statement be submitted within six months from the date the 
statement was signed does not take into account the impact of multi-
year programs and MOFCOM's reluctance to issue new statements until all 
items identified in the original statement have been shipped. In place 
of the six-month validity period, the commenters requested that BIS use 
a validity period based on whether the quantities identified on the 
statement have been shipped. BIS accepts this recommendation, which is 
addressed in new Sec.  748.10(d)(3). To reflect this change, BIS has 
also amended new Sec.  748.10(d)(1), which describes the requirements 
for using a PRC End-User Statement for multiple applications.
    One commenter recommended removing the requirement under proposed 
Sec.  748.10(e)(1) to obtain an original support document, and two 
commenters suggested eliminating the requirement under proposed Sec.  
748.10(e)(2), which described the requirements for returning a PRC End-
User Statement to the foreign importer. As previously addressed, BIS is 
removing the requirement to obtain an original support document, which 
makes the text in proposed Sec. Sec.  748.10(e)(1)-(e)(2) and 
748.9(f)(2) obsolete. Thus, this final rule removes those paragraphs. 
All recordkeeping requirements for PRC End-User Statements, as well as 
the other support documents, are now reflected in new Sec.  748.9(f).
    To further streamline and clarify the support document 
requirements, BIS is making additional changes to this section. First, 
all information regarding corrections, additions, or alterations has 
been moved to new Sec.  748.10(d)(2), including a revised requirement 
that if the PRC End-User Statement contains any inaccuracies, then the 
applicant should note any necessary corrections in a statement on file 
with the applicant rather than submitting such a statement with the 
application. In addition, the requirement to provide a certification on 
quantities of items in Block 24 of the application when using a PRC 
End-User Statement with multiple applications has been removed. This 
requirement is redundant and unnecessary. Also, this rule revises the 
wording in new Sec.  748.10(a)(1) and (a)(2) to clarify that the 
requirement for a PRC End-User Statement applies to 6A003 cameras and 
computers if there are any license requirements under the EAR for those 
commodities to the PRC, not just for reasons on the Commerce Control 
List. This revised text conforms to the prior requirements for PRC End-
User Statements. Other changes to new Sec.  748.10, including to 
recordkeeping and retention of original documents, are addressed above 
under new Sec.  748.9.

Section 748.11--Statement by Ultimate Consignee and Purchaser

    The proposed rule put forward new requirements for obtaining a 
Statement by Ultimate Consignee and Purchaser. The proposed rule 
increased the value threshold for requiring a Statement by Ultimate 
Consignee and Purchaser from $5,000 to $50,000, and it proposed to 
require the statement in place of an IC for most license applications 
that currently require an IC. As addressed above, commenters expressed 
concerns that these changes would make the support document 
requirements of the EAR more burdensome than the ITAR. Consequently, 
this final rule limits the requirement to obtain a Statement by 
Ultimate Consignee and Purchaser to exports, reexports, or in-country 
transfers of ``600 Series Major Defense Equipment,'' regardless of 
value and destination (excluding the PRC). In addition to the 
comparison to the ITAR's support document requirements, commenters also 
raised additional concerns.
    One commenter suggested that the permissive use of a Statement by 
Ultimate Consignee and Purchaser for the PRC, as described in proposed 
Sec.  748.11(a)(2), be moved to Sec.  748.10 so that all support 
document requirements pertaining to the PRC reside in one section. 
While BIS understands the concern, the agency did not accept this 
recommendation because the support document requirements are organized 
by document rather than by destination. However, this final rule adds a 
new note to new Sec.  748.10(a) to provide a cross-reference to new 
Sec.  748.11(a)(2).
    Two commenters requested clarification or examples on proposed Note 
2 to Sec.  748.11(a). That proposed note, which is retained in this 
final rule, states that BIS has discretion to require a Statement by 
Ultimate Consignee and Purchaser for an application even though the EAR 
would not normally require one. For example, under this final rule, BIS 
may require a statement for an application not involving the PRC for 
items that are not ``600 Series Major Defense Equipment.'' BIS may make 
this request when additional information is needed to help verify the 
bona fides of a party involved in the transaction.
    One commenter expressed concerns regarding proposed Sec.  
748.11(b)(5)(iii), which, inter alia, requires that the consignee and/
or purchaser ``promptly send a new statement to the applicant if 
changes in the facts or intentions contained in the statement(s) occur 
after the statement(s) have been forwarded to the applicant.'' The 
commenter stated it was unclear which party is responsible for 
reporting changes to the license applicant, especially if the changes 
are a result of the actions of a different party involved in the 
transaction. BIS notes that an individual party is responsible for 
ensuring that its representations are true and correct to the best of 
the party's knowledge. Further, all parties participating in a 
transaction subject to the EAR must comply with the EAR, including the 
requirement that a party not proceed with a transaction with knowledge 
that a violation has occurred or is about to occur as a result of 
actions by another party.
    Two commenters recommended moving proposed Sec.  748.11(c), which 
describes the content requirements of the statement, to a new 
supplement to make Sec.  748.11 easier to read. BIS accepts this 
recommendation and moved the information that was in proposed Sec.  
748.11(c) to newly revised Supplement No. 3 to part 748.
    One commenter stated that the Form BIS-711 and the information 
required for a letter on company letterhead vary in the following ways: 
The letter allows for naming any country while the BIS-711 limits 
action to a single country (the country of residence of the ultimate 
consignee); the letter requires indicating whether the Statement by 
Ultimate Consignee and Purchaser is for a single transaction or 
multiple transactions while the BIS-711 does not require this; the 
letter requires identifying the name of the license applicant while the 
BIS-711 does not; and the letter does not require naming a party that 
assisted in preparing the letter while the BIS-711 does so in block 5. 
With respect to the country scope of the letter versus the BIS-711, BIS 
notes that the BIS-711 is not limited to a single country in that boxes 
B and D under block 2 allow for the identification of other countries, 
so BIS believes no changes are necessary to either the letter or BIS-
711 requirements. The additional issues identified by the commenter 
will be addressed in a different rule. BIS will evaluate these concerns 
as part of the agency's separate review of Information Collection 0694-
0021 under the Paperwork Reduction Act, which authorizes BIS to collect 
the information described in Sec.  748.11. Any substantive changes to 
Information Collection 0694-0021 will be finalized under an additional 
rule.

[[Page 13215]]

    Two commenters stated that the validity period for a Statement by 
Ultimate Consignee and Purchaser to be used for multiple license 
applications should be increased from two years to four years, which 
would correlate with the new license validity period in the EAR. BIS 
accepts this recommendation, which is reflected in new Sec.  
748.11(d)(1)(ii) and Supplement No. 3 to part 748. One commenter also 
suggested that the name ``Statement by Ultimate Consignee and 
Purchaser'' be changed to ``Recipient Statement'' to better identify 
the appropriate parties to make the relevant representations on the 
document. BIS does not accept this recommendation as part of this final 
rule. While using the term ``recipient'' would provide greater 
flexibility, it may also increase ambiguity since ``recipient'' is not 
a defined term, unlike both ``ultimate consignee'' and ``purchaser.'' 
BIS will, however, monitor the effects this final rule will have on 
support document requirements and will re-evaluate if further 
clarifications or changes are warranted.
    To further streamline and clarify the support document 
requirements, BIS is making additional changes to this section. First, 
the term ``sub-assemblies'' has been replaced with ``components'' under 
new Sec.  748.11(a)(2) since ``components'' is a defined term in part 
772 and reflects the intent of the scope of ``sub-assemblies.'' Also, 
new Sec.  748.11(d) has been revised to extend the validity period by 
allowing an applicant to submit the first license application within 
one year from the date the statement was signed rather than the prior 
six months. This change reflects the increased license validity period 
for BIS licenses and DDTC's practice of allowing purchase orders for 
DSP-5 licenses to be used within one year.

Section 748.12--Firearms Convention Import Certificate

    The proposed rule made no substantive changes to the scope of the 
support document requirements for firearms and related commodities, but 
it did propose changing certain submission requirements to 
recordkeeping requirements and clarifying the name of the support 
document as a Firearms Convention (FC) Import Certificate. BIS did not 
receive any public comments specific to the FC Import Certificate 
requirements, and this final rule largely adopts the proposed 
requirements in Sec.  748.12, as well as references to the revised name 
in Sec.  742.17. However, to further clarify and streamline the 
proposed rule, BIS is making additional changes in this final rule.
    This final rule revises new Sec.  748.12(b)(1) to reflect that 
obtaining a copy of the FC Import Certificate or equivalent official 
document is permissible and that the application may be submitted prior 
to receipt of the original or copy. New Sec.  748.12(b)(2) has been 
revised to incorporate text on the procedure to follow if the 
government of the importing country will not issue a document; this 
information was previously in proposed Sec.  748.12(d)(1)(ii). New 
Sec.  748.12(d)(2) has been revised to incorporate similar wording in 
prior sections addressing alterations, and new Sec.  748.12(d)(3) has 
been revised to more closely harmonize, to the extent possible, the 
validity period on an FC Import Certificate (or equivalent official 
document) to that of a Statement by Ultimate Consignee and Purchaser. 
Unless the Certificate or equivalent official document has an 
expiration date, the new validity period will be four years rather than 
the prior limit of one year. Multiple license applications may be 
submitted using the same Certificate or equivalent official document so 
long as the document is still valid.

Section 748.13--Granting of Exceptions to the Support Document 
Requirements

    The proposed rule suggested moving the information on granting 
exceptions to the support document requirements into Sec.  748.13 and 
made no substantive changes to the existing text, which was previously 
in Sec.  748.12(c) and (d). One commenter believed that the EAR's 
requirements for granting an exception are too onerous, and two 
commenters suggested replacing the process with a requirement for the 
applicant to keep a letter on file or provide such letter with the 
application describing why a required support document could not be 
obtained. BIS believes that a recordkeeping requirement would not be 
sufficient for utilizing an exception. However, this final rule revises 
new Sec.  748.13 to streamline the process by requiring that 
information supporting the request be in or referred to in Block 24 of 
the application. Thus, a separate letter is not required. Additionally, 
this final rule revises new Sec.  748.13 to give the agency greater 
discretion on adjudicating such requests.

Additional Public Comments on Support Document Requirements for License 
Applications and Additional Conforming Changes

    Two commenters believed that the table in proposed Supplement No. 4 
to part 744, which provided informal guidance on support document 
requirements, was confusing; one commenter believed that the proposed 
table was helpful. Because of changes described above to the 
requirements for obtaining a Statement by Ultimate Consignee and 
Purchaser, BIS believes that the support document requirements are 
sufficiently clear without the need for the table. Thus, this final 
rule removes the proposed table.
    One commenter requested that BIS clarify the definition of 
``ultimate consignee'' since it affects which party must fill out the 
Statement by Ultimate Consignee and Purchaser. The commenter further 
proposed a new definition for the term. BIS does not accept this 
comment as it is outside the scope of the proposed rule. The proposed 
changes to the support document requirements were premised on the 
existing definition of ``ultimate consignee.'' Moreover, any changes to 
the definition of that term should go through the proposed rulemaking 
process. Accordingly, at this time, BIS does not believe that such a 
proposal is warranted.
    One commenter recommended that BIS add and define the term 
``support document'' in part 772 to avoid inconsistency with the 
existing definition of ``export control document.'' BIS does not accept 
this recommendation. Support documents already fall under the 
definition of ``export control document,'' and BIS believes that new 
Sec. Sec.  748.6(a)(3) and 748.9(a) provide sufficient guidance to 
applicants on the use of the term ``support documents.''
    Finally, due to the removal of Import Certificate and Delivery 
Verification requirements, as well as the revised name for FC Import 
Certificates, this rule finalizes the references to support document 
names in Sec.  762.2.

Export Administration Act

    Since August 21, 2001, the Export Administration Act of 1979, as 
amended, has been in lapse. However, 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 7, 2014, 79 FR 46959 
(August 11, 2014) has continued the EAR in effect under the 
International Emergency Economic Powers Act. BIS continues to carry out 
the provisions of the Export Administration Act, as appropriate and to 
the extent permitted by law, pursuant to Executive Order 13222 as 
amended by Executive Order 13637.

[[Page 13216]]

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 final rule is part of BIS's retrospective regulatory 
review being undertaken under Executive Order 13563. 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 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 final rule affects two collection numbers: 
Statement by Ultimate Consignee and Purchaser (0694-0021) and Import 
Certificates And End-User Certificates (0694-0093).
    This final rule amends the requirements for support documents 
required in conjunction with a license application. Collection number 
0694-0093 addresses Import Certificates and End-User Certificates, 
changes to Import Certificates and End-User Certificates, exception 
requests to Import Certificates and End-User Certificates, Delivery 
Verifications, exception requests to Delivery Verifications, and 
related recordkeeping. This final rule eliminates the requirement for 
obtaining a Delivery Verification in conjunction with a license 
application submitted to BIS. This results in an annual reduction in 
burden of 361 hours for Delivery Verifications and 0.5 hours for 
Delivery Verification exception requests. Also, this rule eliminates 
the requirement to obtain an Import Certificate in conjunction with a 
license application. This change results in the reduction of the 
following annual burden hour estimates: 354.5 hours for preparing the 
Import Certificate, 23.6 hours for recordkeeping related to the Import 
Certificate, 99 hours for changes to Import Certificates, and 7 hours 
for Import Certificate exception requests.
    The changes to support documents required in conjunction with a 
license application also impact collection number 0694-0021, which 
addresses the Statement by Ultimate Consignee and Purchaser. This final 
rule limits the requirement to obtain a Statement by Ultimate Consignee 
and Purchaser to license applications involving ``600 Series Major 
Defense Equipment,'' as defined in part 772 of the EAR. Since Export 
Control Reform was initially implemented in October 2013, BIS has not 
received an application to export, reexport, or transfer (in-country) 
``600 Series Major Defense Equipment.'' Therefore, BIS estimates this 
final rule will result in one application per year requiring a 
Statement by Ultimate Consignee and Purchaser. Based on the aggregate 
number of license applications in SNAP-R that have the entry for 
``Statement by Ultimate Consignee and Purchaser/BIS 711'' checked, and 
those applications BIS believes were mistakenly checked as ``Import 
Certificate or End User Certificate'' but in fact were also Statements 
by Ultimate Consignee and Purchaser due to the destination of the 
application, BIS believes the changes in this final rule will decrease 
the burden hours measured under collection number 0694-0021 by 
approximately 1160.5 hours.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under E.O. 13132.
    4. The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 
601 et seq., generally requires an agency to prepare an initial 
regulatory flexibility analysis (IRFA) for any rule subject to the 
notice and comment rulemaking requirements under the Administrative 
Procedure Act (5 U.S.C. 553) or any other statute. However, under 
section 605(b) of the RFA, if the head of an agency certifies that a 
rule will not have a significant impact on a substantial number of 
small entities, the RFA does not require the agency to prepare a 
regulatory flexibility analysis. 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 by reducing the burden of having to obtain certain 
support documents for certain license applications. Therefore, the 
impact on any affected small entities will be wholly positive. 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 final rule, will 
not have a significant impact on a substantial number of small 
entities. No comments were received on the certification and therefore 
no regulatory flexibility analysis is required. Pursuant to 5 U.S.C. 
553(d)(1) good cause exists to waive the otherwise applicable 30 day 
delay in effectiveness. Because the information obtained through the 
pertinent support documents is collected elsewhere, there is no need 
for regulated entities to come into compliance with any regulatory 
requirements. Furthermore, there is a strong public interest in making 
these changes. The information contained in the support documents is 
collected in the license applications themselves, so there is no 
government or public interest in a duplicative collection. In addition, 
this rule decreases the burden on the regulated parties. A primary goal 
of the President's Export Control Reform Initiative is that the 
transition to jurisdiction under BIS should be no more burdensome under 
the EAR than the ITAR. However, under the existing regulations, the 
EAR's support document requirements are more restrictive than the ITAR, 
which control articles that provide the United States with a critical 
military or intelligence advantage or otherwise warrant more 
restrictive controls. There is no need for items subject to the EAR to 
have more restrictive requirements than defense articles under the 
ITAR. Indeed, any ongoing requirement that these documents be collected 
would undermine public policy goals.
    There is also a public interest in moving this process along to 
ensure that entities that are transitioning from being regulated by the 
ITAR to being regulated by the EAR are not temporarily burdened by 
having to comply with a requirement that they did not previously have 
to comply with under the ITAR. For all these reasons, BIS finds good 
cause to waive the 30 day delay in effective date and implement this 
rule upon publication in the Federal Register.

List of Subjects

15 CFR Part 742

    Exports, Terrorism.

15 CFR Part 748

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

15 CFR Part 762

    Administrative practice and procedure, Business and industry, 
Confidential business information,

[[Page 13217]]

Exports, Reporting and recordkeeping requirements.

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

PART 742--[AMENDED]

0
1. The authority citation for 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 7, 2014, 79 FR 46959 (August 11, 2014); Notice of 
November 7, 2014, 79 FR 67035 (November 12, 2014).

0
2. Section 742.17 is amended by:
0
a. Revising the last sentence of paragraph (a);
0
b. Removing ``Import Certificate'' and adding in its place ``FC Import 
Certificate'' in paragraph (b); and
0
c. Revising paragraph (g), to read as follows:

Sec.  742.17  Exports of firearms to OAS member countries.

* * * * *
    (a) * * * Licenses will generally be issued on a Firearms 
Convention (FC) Import Certificate or equivalent official document, 
satisfactory to BIS, issued by the government of the importing OAS 
member country.
* * * * *
    (g) Validity period for licenses. Although licenses generally will 
be valid for a period of four years, your ability to ship items that 
require an FC Import Certificate or equivalent official document under 
this section may be affected by the validity of the FC Import 
Certificate or equivalent official document (see Sec.  748.12(d)(4) of 
the EAR).

PART 748--[AMENDED]

0
3. The authority citation for 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 7, 2014, 79 FR 
46959 (August 11, 2014).

0
4. Section 748.6 is amended by revising paragraph (a) to read as 
follows:

Sec.  748.6  General instructions for license applications.

    (a) Instructions. (1) General instructions for filling out license 
applications are in Supplement No. 1 to this part.
    (2) License applications may require additional information due to 
the type of items requested in the application or the characteristics 
of the transaction. Special instructions for applications requiring 
such additional information are listed in Sec.  748.8 and described 
fully in Supplement No. 2 to this part.
    (3) License applications may also require additional information 
for evaluation of the parties in the transaction. Special instructions 
for applications requiring such additional information are listed in 
Sec. Sec.  748.9 through 748.13.
* * * * *

0
5. Section 748.9 is revised to read as follows:

Sec.  748.9  Support documents for evaluation of foreign parties in 
license applications.

    (a) Scope. License applicants may be required to obtain support 
documents concerning the foreign parties and the disposition of the 
items intended for export, reexport, or transfer (in-country). Some 
support documents are issued by foreign governments, while other 
support documents are signed and issued by the purchaser and/or 
ultimate consignee. For support documents issued by foreign 
governments, any foreign legal restrictions or obligations exercised by 
the government issuing the support document are in addition to the 
conditions and restrictions placed on the transaction by BIS. However, 
the laws and regulations of the United States are in no way modified, 
changed, or superseded by the issuance of a support document by a 
foreign government.
    (b) Requirements to obtain support documents for license 
applications. Unless an exception in paragraph (c) of this section 
applies, a support document is required for certain license 
applications for the People's Republic of China (PRC) (see Sec. Sec.  
748.10 and 748.11(a)(2)), ``600 Series Major Defense Equipment'' (see 
Sec.  748.11), and firearms and related commodities to member countries 
of the Organization of American States (see Sec.  748.12).

    Note 1 to paragraph (b): On a case-by-case basis, BIS may 
require license applicants to obtain a support document for any 
license application.

    Note 2 to paragraph (b): For End-Use Certificate requirements 
under the Chemical Weapons Convention, see Sec.  745.2 of the EAR.

    (c) Exceptions to requirements to obtain support documents. (1) 
Even if a support document requirement is imposed by paragraph (b) of 
this section, no support document is required for any of the following 
situations:
    (i) The ultimate consignee or purchaser is an ``Agency of the 
United States Government'' (see Sec.  740.11(b)(1) for definition). If 
either the ultimate consignee or purchaser is not an agency of the 
United States government, however, a support document may still be 
required from the non-U.S. governmental party;
    (ii) The ultimate consignee or purchaser is a foreign government(s) 
or foreign government agency(ies), other than the government of the 
People's Republic of China. To determine whether the parties in a 
transaction meet the definition of ``foreign government agency,'' refer 
to the definition contained in part 772 of the EAR. If either the 
ultimate consignee or purchaser is not a foreign government or foreign 
government agency, however, a support document may still be required 
from the nongovernmental party;
    (iii) The license application is filed by, or on behalf of, a 
relief agency registered with the Advisory Committee on Voluntary 
Foreign Aid, U.S. Agency for International Development, for export to a 
member agency in the foreign country;
    (iv) The license application is submitted for commodities for 
temporary exhibit, demonstration, or testing purposes;
    (v) The license application is submitted for commodities controlled 
for short supply reasons (see part 754 of the EAR);
    (vi) The license application is submitted under the Special 
Comprehensive License procedure described in part 752 of the EAR;
    (vii) The license application is submitted for software or 
technology; or
    (viii) The license application is submitted for encryption 
commodities controlled under ECCN 5A002 or 5B002.
    (2) BIS will consider granting an exception to the requirement for 
obtaining a support document where the requirements cannot be met due 
to circumstances beyond the applicant's control. An exception will not 
be granted contrary to the objectives of the U.S. export control laws 
and regulations. Refer to Sec.  748.13 of this part for specific 
instructions on procedures for requesting an exception.
    (d) Content of support documents. In addition to specific 
requirements described for each support document in Sec. Sec.  748.10, 
748.11, and 748.12, the use

[[Page 13218]]

and submission of support documents must comply with the following 
requirements.
    (1) English translation. All abbreviations, coded terms, or other 
expressions on support documents having special significance in the 
trade or to the parties to the transaction must be explained on an 
attachment to the document. Documents in a language other than English 
must be accompanied by an attachment giving an accurate English 
translation, either made by a translating service or certified by the 
applicant to be correct. Explanations or translations should be 
provided on a separate piece of paper, and not entered on the support 
documents themselves.
    (2) Responsibility for full disclosure. (i) The license application 
covering the transaction discloses all facts pertaining to the 
transaction. Information contained in a support document obtained after 
submission of a license application and not submitted to BIS as part of 
the application cannot be construed as extending or expanding or 
otherwise modifying the specific information supplied in a license 
application or license issued by BIS. The authorizations contained in 
the resulting license are not extended by information contained in the 
support document regarding reexport from the country of destination, 
transfer (in-country), or any other facts relative to the transaction 
that are not reported on the license application.
    (ii) Misrepresentations, either through failure to disclose facts, 
concealing a material fact, or furnishing false information, may 
subject responsible parties to administrative or criminal action by 
BIS.
    (iii) In obtaining the required support document, the applicant is 
not relieved of the responsibility for full disclosure of any other 
information concerning the ultimate destination, end use, or end user 
of which the applicant knows, even if inconsistent with the 
representations made in the applicable support document. The applicant 
is responsible for promptly notifying BIS of any change in the facts 
contained in the support document that comes to the applicant's 
attention.
    (e) Procedures for using support document with license 
application.--(1) Timing for obtaining support document. When a support 
document is required for a license application in Sec. Sec.  748.10, 
748.11, and 748.12, license applicants may submit the application prior 
to receipt of a copy of the support document, unless BIS informs the 
applicant that the support document must be submitted with the 
application. However, if the license is granted, items authorized on 
the license may not be exported, reexported, or transferred (in-
country) until the license holder obtains a copy of the support 
document.
    (2) Information necessary for license application. When a support 
document is required for a license application, applicants should mark 
the appropriate box in Block 7, regardless of whether a copy of the 
support document is on file with the applicant at the time of 
submission.
    (f) Recordkeeping provisions. License applicants must retain on 
file the original or a copy of any support document issued in support 
of a license application submitted to BIS. All recordkeeping provisions 
in part 762 of the EAR apply to this requirement.
    (g) Effect on license application review. BIS reserves the right in 
all respects to determine to what extent any license will be issued 
covering items for which a support document has been issued. If a 
support document was issued by a foreign government, BIS will not seek 
or undertake to give consideration to recommendations from the foreign 
government as to the action to be taken on a license application. A 
support document will be only one of the factors upon which BIS will 
base its licensing action, since end uses and other considerations are 
important factors in the decision making process.
    (h) Grace period for complying with requirements following 
regulatory change. (1) Whenever the requirement for a PRC End-User 
Statement, Statement by Ultimate Consignee or Purchaser, or Firearms 
Convention Import Certificate is imposed or extended by a change in the 
regulations, the license application need not conform to the new 
support documentation requirements for a period of 45 days after the 
effective date of the regulatory change published in the Federal 
Register.
    (2) License applications filed during the 45-day grace period may 
require the submission of evidence available to the applicant that will 
support representations concerning the ultimate consignee, ultimate 
destination, and end use, such as copies of the order, letters of 
credit, correspondence between the applicant and ultimate consignee, or 
other documents received from the ultimate consignee. If such evidence 
is required, applicants must also identify the regulatory change 
(including its effective date) that justifies exercise of the 45-day 
grace period.

0
6. Section 748.10 is revised to read as follows:

Sec.  748.10  People's Republic of China (PRC) End-User Statement.

    (a) Requirement to obtain document. Unless the provisions of 
Sec. Sec.  748.9(c) or 748.11(a)(2) apply, a PRC End-User Statement is 
required for license applications including any of the following 
commodities destined for the PRC:
    (1) Cameras classified under ECCN 6A003 requiring a license to the 
PRC for any reason, and the value of such cameras exceeds $5,000;
    (2) Computers requiring a license to the PRC for any reason, 
regardless of the value of the computers; or
    (3) Any commodity(ies) requiring a license to the PRC for any 
reason on the Commerce Control List, and the total value of such 
commodity(ies) requiring a license exceeds $50,000.

    Note 1 to paragraph (a):  If an order meets the commodity(ies) 
and value requirements listed above, then a PRC End-User Statement 
is required. An order may not be split into multiple license 
applications solely to avoid a requirement to obtain a PRC End-User 
Statement.

    Note 2 to paragraph (a):  If an order includes both items that 
do require a license to the PRC and items that do not require a 
license to the PRC, the value of the latter items should not be 
factored into the value thresholds described above. Also, if a 
license application includes 6A003 cameras and other items requiring 
a license to the PRC, then the value of the 6A003 cameras should be 
factored into the value threshold described in paragraph (a)(3).

    Note 3 to paragraph (a): See Sec.  748.11(a)(2) for permissive 
use of a Statement by Ultimate Consignee and Purchaser in place of a 
PRC End-User Statement.

    Note 4 to paragraph (a):  On a case-by-case basis, BIS may 
require license applicants to obtain a PRC End-User Statement for a 
license application that would not otherwise require a PRC End-User 
Statement under the requirements of paragraph (a) of this section.

    (b) Obtaining the document. (1) If a PRC End-User Statement is 
required for any reason under paragraph (a) of this section, then 
applicants must request that the importer obtain a PRC End-User 
Statement for all items on a license application that require a license 
to the PRC for any reason listed on the CCL.
    (2) PRC End-User Statements are issued and administered by the 
Ministry of Commerce; Department of Mechanic, Electronic and High 
Technology Industries; Export Control Division I; Chang An Jie No. 2; 
Beijing 100731 China; Phone: (86)(10) 6519 7366 or 6519 7390; Fax: 
(86)(10) 6519 7543; http://zzyhzm.mofcom.gov.cn/. See the BIS Web site 
(www.bis.doc.gov) for the current contact information.

[[Page 13219]]

    (c) Content of the document. (1) The license applicant's name must 
appear on the PRC End-User Statement submitted to BIS as the applicant, 
supplier, or order party.
    (2) License applicants must ensure that the following information 
is included on the PRC End-User Statement signed by an official of the 
Department of Mechanic, Electronic and High Technology Industries, 
Export Control Division I, of the PRC Ministry of Commerce (MOFCOM), 
with MOFCOM's seal affixed to it:
    (i) Title of contract and contract number (optional);
    (ii) Names of importer and exporter;
    (iii) End user and end use;
    (iv) Description of the commodity, quantity and dollar value; and
    (v) Signature of the importer and date.

    Note to paragraph (c): The license applicant should furnish the 
consignee with the commodity description contained in the CCL to be 
used in applying for the PRC End-User Statement. It is also 
advisable to furnish a manufacturer's catalog, brochure, or 
technical specifications if the commodity is new.

    (d) Procedures for using document with license application. (1) 
Using a PRC End-User Statement for multiple applications. A PRC End-
User Statement may cover more than one purchase order and more than one 
item. Where the Statement includes items for which more than one 
license application will be submitted, the applicant should ensure that 
the total quantities on the license application(s) do not exceed the 
total quantities shown on the PRC End-User Statement.
    (2) Alterations. After a PRC End-User Statement is issued by the 
Government of the People's Republic of China, no corrections, 
additions, or alterations may be made on the certificate by any person. 
Any necessary corrections, additions, or alterations should be noted by 
the applicant in a separate statement on file with the applicant.
    (3) Validity period. A PRC End-User Statement is valid until the 
quantities of items identified on the Statement have been shipped.

0
7. Section 748.11 is revised to read as follows:

Sec.  748.11  Statement by Ultimate Consignee and Purchaser.

    (a) Requirement to obtain document. (1) General requirement for all 
countries excluding the People's Republic of China (PRC). Unless an 
exception in Sec.  748.9(c) or paragraph (a)(3) of this section 
applies, a Statement by Ultimate Consignee and Purchaser is required if 
the license application includes ``600 Series Major Defense Equipment'' 
(600 series MDE) requiring a license for any reason on the Commerce 
Control List and such items are destined for a country other than the 
PRC.
    (2) Permissive substitute of Statement by Ultimate Consignee and 
Purchaser in place of PRC End-User Statement. The requirement to obtain 
a support document for license applications involving the PRC is 
generally determined by Sec.  748.10(a) of the EAR. However, a 
Statement by Ultimate Consignee and Purchaser may be substituted in 
place of a PRC End-User Statement when the commodities to be exported 
(i.e., replacement parts and components) are valued at $75,000 or less 
and are for servicing previously exported commodities.
    (3) Exception to general requirement. The general requirement 
described in paragraph (a)(1) of this section does not apply if the 
applicant is the same person as the ultimate consignee, provided the 
required statements are contained in Block 24 on the license 
application. This exemption does not apply, however, where the 
applicant and consignee are separate entities, such as parent and 
subsidiary, or affiliated or associated firms.

    Note 1 to paragraph (a): An order may not be split into multiple 
license applications solely to avoid a requirement to obtain a 
Statement by Ultimate Consignee and Purchaser.

    Note 2 to paragraph (a): On a case-by-case basis, BIS may 
require license applicants to obtain a Statement by Ultimate 
Consignee and Purchaser for a license application that would not 
otherwise require a Statement by Ultimate Consignee and Purchaser 
under the requirements of paragraph (a) of this section.

    (b) Obtaining the document. (1) The ultimate consignee and 
purchaser must complete either a statement on company letterhead, or 
Form BIS-711, Statement by Ultimate Consignee and Purchaser, as 
described in paragraph (c) of this section. Unless otherwise specified, 
any reference in this section to ``Statement by Ultimate Consignee and 
Purchaser'' applies to both the statement on company letterhead and to 
Form BIS-711.
    (2) If the consignee and purchaser elect to complete the statement 
on letterhead and both the ultimate consignee and purchaser are the 
same entity, only one statement is necessary.
    (3) If the ultimate consignee and purchaser are separate entities, 
separate statements must be prepared and signed.
    (4) If the ultimate consignee and purchaser elect to complete Form 
BIS-711, only one Form BIS-711 (containing the signatures of the 
ultimate consignee and purchaser) need be completed.
    (5) Whether the ultimate consignee and purchaser sign a written 
statement or complete Form BIS-711, the following constraints apply:
    (i) Responsible officials representing the ultimate consignee or 
purchaser must sign the statement. ``Responsible official'' is defined 
as someone with personal knowledge of the information included in the 
statement, and authority to bind the ultimate consignee or purchaser 
for whom they sign, and who has the power and authority to control the 
use and disposition of the licensed items.
    (ii) The authority to sign the statement may not be delegated to 
any person (agent, employee, or other) whose authority to sign is not 
inherent in his or her official position with the ultimate consignee or 
purchaser for whom he or she signs. The signing official may be located 
in the United States or in a foreign country. The official title of the 
person signing the statement must also be included.
    (iii) The consignee and/or purchaser must submit information that 
is true and correct to the best of their knowledge and must promptly 
send a new statement to the applicant if changes in the facts or 
intentions contained in their statement(s) occur after the statement(s) 
have been forwarded to the applicant. Once a statement has been signed, 
no corrections, additions, or alterations may be made. If a signed 
statement is incomplete or incorrect in any respect, a new statement 
must be prepared, signed and forwarded to the applicant.
    (c) Content of the document. See Supplement No. 3 to this part for 
the information necessary to complete a statement on company letterhead 
or on Form BIS-711.
    (d) Procedures for using document with license application.--(1) 
Validity period. (i) If a Statement by Ultimate Consignee and Purchaser 
is obtained prior to submission of the license application and the 
Statement is required to support one or more license applications, an 
applicant must submit the first license application within one year 
from the date the statement was signed.
    (ii) All subsequent license applications supported by the same 
Statement by Ultimate Consignee and Purchaser must be submitted within 
four years of signature by the consignee or purchaser, whichever was 
last.
    (2) [Reserved]

0
8. Section 748.12 is revised to read as follows:

[[Page 13220]]

Sec.  748.12  Firearms Convention (FC) Import Certificate.

    (a) Requirement to obtain document. Unless an exception in Sec.  
748.9(c) applies, an FC Import Certificate is required for license 
applications for firearms and related commodities, regardless of value, 
that are destined for member countries of the Organization of American 
States (OAS). This requirement is consistent with the OAS Model 
Regulations described in Sec.  742.17 of the EAR.
    (1) Items subject to requirement. Firearms and related commodities 
are those commodities controlled for ``FC Column 1'' reasons under 
ECCNs 0A984, 0A986, or 0A987.
    (2) Countries subject to requirement. (i) OAS member countries 
include: Antigua and Barbuda, Argentina, Bahamas, Barbados, Belize, 
Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Dominica, 
Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, 
Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, 
Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, 
Suriname, Trinidad and Tobago, Uruguay, and Venezuela.
    (ii) [Reserved]
    (3) Equivalent official document in place of FC Import Certificate. 
For those OAS member countries that have not yet established or 
implemented an FC Import Certificate procedure, BIS will accept an 
equivalent official document (e.g., import license or letter of 
authorization) issued by the government of the importing country as 
supporting documentation for the export of firearms.
    (b) Obtaining the document. (1) Applicants must request that the 
importer (e.g., ultimate consignee or purchaser) obtain the FC Import 
Certificate or an equivalent official document from the government of 
the importing country, and that it be issued covering the quantities 
and types of firearms and related items that the applicant intends to 
export. (See Supplement No. 6 to this part for a list of the OAS member 
countries' authorities administering the FC Import Certificate System.) 
Upon receipt of the FC Import Certificate, its official equivalent, or 
a copy, the importer must provide the original or a certified copy of 
the FC Import Certificate or the original or a certified copy of the 
equivalent official document to the license applicant.
    (2) If the government of the importing country will not issue an FC 
Import Certificate or its official equivalent, the applicant must 
supply the information described in paragraphs (c)(1) and (c)(6) 
through (c)(8) of this section on company letterhead.
    (c) Content of the document. The FC Import Certificate or its 
official equivalent must contain the following information:
    (1) Applicant's name and address. The applicant may be either the 
exporter, supplier, or order party.
    (2) FC Import Certificate Identifier/Number.
    (3) Name of the country issuing the certificate or unique country 
code.
    (4) Date the FC Import Certificate was issued, in international 
date format (e.g., 24/12/12 for 24 December 2012, or 3/1/99 for 3 
January 1999).
    (5) Name of the agency issuing the certificate, address, telephone 
and facsimile numbers, signing officer name, and signature.
    (6) Name of the importer, address, telephone and facsimile numbers, 
country of residence, representative's name if commercial or government 
body, citizenship, and signature.
    (7) Name of the end user(s), if known and different from the 
importer, address, telephone and facsimile numbers, country of 
residence, representative's name if commercial (authorized distributor 
or reseller) or government body, citizenship, and signature. Note that 
BIS does not require the identification of each end user when the 
firearms and related commodities will be resold by a distributor or 
reseller if unknown at the time of export.
    (8) Description of the commodities approved for import including a 
technical description and total quantity of firearms, parts and 
components, ammunition and parts.

    Note to paragraph (c)(8): You must furnish the consignee with a 
detailed technical description of each commodity to be given to the 
government for its use in issuing the FC Import Certificate. For 
example, for shotguns, provide the type, barrel length, overall 
length, number of shots, the manufacturer's name, the country of 
manufacture, and the serial number for each shotgun. For ammunition, 
provide the caliber, velocity and force, type of bullet, 
manufacturer's name and country of manufacture.

    (9) Expiration date of the FC Import Certificate in international 
date format (e.g., 24/12/12) or the date the items must be imported, 
whichever is earlier.
    (10) Name of the country of export (i.e., United States).
    (11) Additional information. Certain countries may require the 
tariff classification number, by class, under the Brussels Convention 
(Harmonized Tariff Code) or the specific technical description of a 
commodity. For example, shotguns may need to be described in barrel 
length, overall length, number of shots, manufacturer's name and 
country of manufacture. The technical description is not the Export 
Control Classification Number (ECCN).
    (d) Procedures for using document with license application.--(1) 
Information necessary for license application. The license application 
must include the same commodities as those listed on the FC Import 
Certificate or the equivalent official document.
    (2) Alterations. After an FC Import Certificate or equivalent 
official document is used to support the issuance of a license, no 
corrections, additions, or alterations may be made on the FC Import 
Certificate by any person. Any necessary corrections, additions, or 
alterations should be noted by the applicant in a separate statement on 
file with the applicant.
    (3) Validity period. FC Import Certificates or equivalent official 
documents issued by an OAS member country will be valid until the 
expiration date on the Certificate or for a period of four years, 
whichever is shorter.

0
9. Section 748.13 is revised to read as follows:

Sec.  748.13  Granting of exceptions to the support documentation 
requirements.

    (a) Overview. A request for an exception to obtaining the required 
support documentation will be considered by BIS; however, an exception 
will not be granted contrary to the objectives of the U.S. export 
control program. A request for exception may involve either a single 
transaction or, where the reason necessitating the request is 
continuing in nature, multiple transactions. If satisfied by the 
evidence presented, BIS may waive the support document requirement and 
accept the license application for processing.
    (b) Procedure for requesting an exception. The request for an 
exception must be submitted with the license application to which the 
request relates, and the reason(s) for requesting the exception must be 
described in Block 24 or referred to in Block 24. Where the request 
relates to more than one license application, it should be submitted 
with the first license application and referred to in Block 24 on any 
subsequent license application.
    (c) Action by BIS.--(1) Single transaction request. Where a single 
transaction is involved, BIS will act on the request for exception at 
the same time as the license application with which the request is 
submitted. In those instances where the related license application is 
approved, the issuance of the license will serve as an automatic notice 
to the applicant that the

[[Page 13221]]

exception was approved. If any restrictions are placed on granting of 
the exception, these will appear on the approval. If the request for 
exception is not approved, BIS will advise the applicant.
    (2) Multiple transactions request. Where multiple transactions are 
involved, BIS will advise the applicant of the action taken on the 
exception request. The response from BIS will contain any conditions or 
restrictions that BIS finds necessary to impose (including an exception 
termination date if appropriate). In addition, a written acceptance of 
these conditions or restrictions may be required from the parties to 
the transaction.

Sec.  748.14  [Removed and reserved]

0
10. Section 748.14 is removed and reserved.

0
11. Supplement No. 3 to part 748 is revised to read as follows:

SUPPLEMENT NO. 3 TO PART 748--STATEMENT BY ULTIMATE CONSIGNEE AND 
PURCHASER CONTENT REQUIREMENTS

    If a statement on company letterhead will be used to meet the 
requirement to obtain a Statement by Ultimate Consignee and 
Purchaser, as described in Sec.  748.11(a), follow the requirements 
described in paragraph (a) of this appendix. If Form BIS-711 will be 
used to meet the requirement, follow the requirements described in 
paragraph (b) of this appendix.
    (a) Statement on company letterhead. Information in response to 
each of the following criteria must be included in the statement. If 
any information is unknown, that fact should be disclosed in the 
statement. Preprinted information supplied on the statement, 
including the name, address, or nature of business of the ultimate 
consignee or purchaser appearing on the letterhead or order form is 
acceptable but will not constitute evidence of either the signer's 
identity, the country of ultimate destination, or end use of the 
items described in the license application.
    (1) Paragraph 1. One of the following certifications must be 
included depending on whether the statement is proffered in support 
of a single license application or multiple license applications:
    (i) Single. This statement is to be considered part of a license 
application submitted by [name and address of applicant].
    (ii) Multiple. This statement is to be considered a part of 
every license application submitted by [name and address of 
applicant] until four years from the date this statement is signed.
    (2) Paragraph 2. One or more of the following certifications 
must be included. Note that if any of the facts related to the 
following statements are unknown, this must be clearly stated.
    (i) The items for which a license application will be filed by 
[name of applicant] will be used by us as capital equipment in the 
form in which received in a manufacturing process in [name of 
country] and will not be reexported or incorporated into an end 
product.
    (ii) The items for which a license application will be filed by 
[name of applicant] will be processed or incorporated by us into the 
following product(s) [list products] to be manufactured in [name of 
country] for distribution in [list name of country or countries].
    (iii) The items for which a license application will be filed by 
[name of applicant] will be resold by us in the form in which 
received for use or consumption in [name of country].
    (iv) The items for which a license application will be filed by 
[name of applicant] will be reexported by us in the form in which 
received to [name of country or countries].
    (v) The items received from [name of applicant] will be 
[describe use of the items fully].
    (3) Paragraph 3. The following two certifications must be 
included:
    (i) The nature of our business is [possible choices include: 
broker, distributor, fabricator, manufacturer, wholesaler, retailer, 
value added reseller, original equipment manufacturer, etc.].
    (ii) Our business relationship with [name of applicant] is 
[possible choices include; contractual, franchise, distributor, 
wholesaler, continuing and regular individual business, etc.] and we 
have had this business relationship for [number of years].
    (4) Paragraph 4. The final paragraph must include all of the 
following certifications:
    (i) We certify that all of the facts contained in this statement 
are true and correct to the best of our knowledge and we do not know 
of any additional facts that are inconsistent with the above 
statements. We shall promptly send a replacement statement to [name 
of the applicant] disclosing any material change of facts or 
intentions described in this statement that occur after this 
statement has been prepared and forwarded to [name of applicant]. We 
acknowledge that the making of any false statement or concealment of 
any material fact in connection with this statement may result in 
imprisonment or fine, or both, and denial, in whole or in part, of 
participation in U.S. exports or reexports.
    (ii) Except as specifically authorized by the U.S. Export 
Administration Regulations, or by written approval from the Bureau 
of Industry and Security, we will not reexport, resell, or otherwise 
dispose of any items approved on a license supported by this 
statement:
    (A) To any country not approved for export as brought to our 
attention by the exporter; or
    (B) To any person if there is reason to believe that it will 
result directly or indirectly in disposition of the items contrary 
to the representations made in this statement or contrary to the 
U.S. Export Administration Regulations.
    (iii) We understand that acceptance of this statement as a 
support document cannot be construed as an authorization by BIS to 
reexport or transfer (in country) the items in the form in which 
received even though we may have indicated the intention to reexport 
or transfer (in country), and that authorization to reexport (or 
transfer in country) is not granted in an export license on the 
basis of information provided in the statement, but as a result of a 
specific request in a license application.
    (b) Form BIS-711. Form BIS-711 is available at http://www.bis.doc.gov/index.php/component/rsform/form/21-request-bis-forms?task=forms.edit. Instructions on completing Form BIS-711 are 
described below. The ultimate consignee and purchaser may sign a 
legible copy of Form BIS-711. It is not necessary to require the 
ultimate consignee and purchaser to sign an original Form BIS-711, 
provided all information contained on the copy is legible. All 
information must be typed or legibly printed in each appropriate 
Block or Box.
    (1) Block 1: Ultimate Consignee. The Ultimate Consignee must be 
the person abroad who is actually to receive the material for the 
disposition stated in Block 2. A bank, freight forwarder, forwarding 
agent, or other intermediary is not acceptable as the Ultimate 
Consignee.
    (2) Block 2: Disposition or Use of Items by Ultimate Consignee 
named in Block 1. Place an (X) in ``A.,'' ``B.,'' ``C.,'' ``D.,'' 
and ``E.,'' as appropriate, and fill in the required information.
    (3) Block 3: Nature of Business of Ultimate Consignee named in 
Block 1. Complete both ``A'' and ``B''. Possible choices for ``A'' 
include: broker, distributor, fabricator, manufacturer, wholesaler, 
retailer, value added reseller, original equipment manufacturer, 
etc. Possible choices for ``B'' include: contractual, franchise, 
distributor, wholesaler, continuing and regular individual business, 
etc.
    (4) Block 4: Additional Information. Provide any other 
information not appearing elsewhere on the form such as other 
parties to the transaction, and any other material facts that may be 
of value in considering license applications supported by this 
statement.
    (5) Block 5: Assistance in Preparing Statement. Name all 
persons, other than employees of the ultimate consignee or 
purchaser, who assisted in the preparation of this form.
    (6) Block 6: Ultimate Consignee. Enter the requested information 
and sign the statement in ink. (For a definition of ultimate 
consignee, see Sec.  748.5(e) of this part.)
    (7) Block 7: Purchaser. This form must be signed in ink by the 
Purchaser, if the Purchaser is not the same as the Ultimate 
Consignee identified in Block 1. (For a definition of purchaser, see 
Sec.  748.5(c) of this part.)
    (8) Block 8: Certification for Exporter. This Block must be 
completed to certify that no correction, addition, or alteration on 
this form was made subsequent to the signing by the Ultimate 
Consignee in Block 6 and Purchaser in Block 7.

[[Page 13222]]

Supplement No. 4 to part 748 [Removed and reserved]

0
12. Supplement No. 4 to part 748 is removed and reserved.

PART 762--[AMENDED]

0
13. The authority citation for part 762 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 
7, 2014, 79 FR 46959 (August 11, 2014).

0
14. Section 762.2 is amended by:
0
a. Revising paragraphs (b)(22) and (b)(24); and
0
b. Removing and reserving paragraph (b)(25), to read as follows:

Sec.  762.2  Records to be retained.

* * * * *
    (b) * * *
    (22) Sec.  748.10, PRC End-User Statement;
* * * * *
    (24) Sec.  748.12, Firearms Convention (FC) Import Certificate;
    (25) [Reserved]
* * * * *

    Dated: March 5, 2015.
Kevin J. Wolf,
Assistant Secretary of Commerce for Export Administration.
[FR Doc. 2015-05784 Filed 3-12-15; 8:45 am]
 BILLING CODE 3510-33- P