Document ID: BIS-2014-0041-0001
Agency: bis
Document Type: Rule
Title: Export Administration Regulations: Venezuela; Implementation of Certain Military End Uses and End Users License Requirements
Posted Date: 2014-11-07T05:00Z

[Federal Register Volume 79, Number 216 (Friday, November 7, 2014)]
[Rules and Regulations]
[Pages 66288-66290]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-26465]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 744

[Docket No. 141029906-4906-01]
RIN 0694-AG31

Venezuela: Implementation of Certain Military End Uses and End 
Users License Requirements Under the Export Administration Regulations

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: In response to the Venezuelan military's violent repression of 
the Venezuelan people, the Bureau of Industry and Security (BIS) amends 
the Export Administration Regulations (EAR) in this final rule to 
impose license requirements on the export, reexport, or transfer (in-
country) of certain items to or within Venezuela when intended for a 
military end use or end user. This change complements an existing U.S. 
arms embargo against Venezuela for its failure to cooperate in areas of 
counterterrorism.

DATES: Effective date: This rule is effective November 7, 2014

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

SUPPLEMENTARY INFORMATION:

Background

    Starting in February 2014, the Venezuelan military was instrumental 
in implementing a violent crackdown on anti-government protests. The 
government's repression included direct violence against protesters, 
detentions of protesters and political leaders, and acts of 
intimidation, resulting in numerous deaths and injuries. On July 30, 
2014, the Department of State imposed visa restrictions against 
Venezuelan government officials, including members of the Venezuelan 
military, who participated or were complicit in human rights violations 
and undermined democratic processes.
    The actions and policies of the Venezuelan military undermine 
democratic processes and institutions and thereby constitute an unusual 
and extraordinary threat to the national security and foreign policy of 
the United States.
    In response to abuses committed by the Venezuelan military on the 
Venezuelan people, the U.S. Government is imposing ``military end use'' 
and ``military end user'' license requirements on Venezuela.

Military End Use and End User Restrictions

    It is generally the policy of the United States Government to 
facilitate U.S. exports for civilian end uses, while preventing exports 
that would enhance the military capability of certain destinations and 
thereby threaten the national security and foreign policy of the United 
States and its allies. In furtherance of this policy, the Bureau of 
Industry and Security (BIS) established a license requirement for 
certain items intended for ``military end uses'' in a final rule 
published June 19, 2007 (72 FR 33646). Specifically, that final rule 
established a control, based on knowledge of a ``military end use,'' on 
exports and reexports of certain items on the Commerce Control List 
(CCL) that otherwise would not require a license to a specified 
destination. The ``military end use'' control initially applied to 
certain items exported, reexported or transferred (in country) to the 
People's Republic of China. Subsequently, BIS applied ``military end 
use'' and ``military end user'' controls to Russia in a final rule 
published September 17, 2014 (79 FR 55608).

Imposition of Military Restrictions on Venezuela

    To implement the U.S. Government's response to the abuses by the 
Venezuelan military, in this rule, BIS amends Sec.  744.21 of the EAR 
to apply ``military end use'' and ``military end user'' license 
requirements to Venezuela. Specifically, BIS amends Sec.  744.21 by 
adding ``or Venezuela'' after ``Russia,'' wherever that name appears, 
including in the heading of the section. Items subject to these license 
requirements are those listed in Supplement No. 2 to Part 744.
    This final rule also adds a paragraph (h) to address the effects of 
these new license requirements on transactions under contract prior to 
the effective date of this rule.

Saving Clause

    Shipments of items removed from eligibility for export or reexport 
under a license exception or without a license (i.e., under the 
designator ``NLR'') as a result of this regulatory action that were on 
dock for loading, on lighter, laden aboard an exporting carrier, or en 
route aboard a carrier to a port of export, on November 7, 2014, 
pursuant to actual orders for export or reexport to a foreign 
destination, may proceed to that destination under the previously 
applicable license exception or without

[[Page 66289]]

a license (NLR) so long as they are exported or reexported before 
December 8, 2014. Any such items not actually exported or reexported 
before midnight, on December 8, 2014, require a license in accordance 
with this regulation.

Foreign Policy Report

    The extension of the military end use and end user controls to 
Venezuela in this rule is the imposition of a foreign policy control. 
Section 6(f) of the Export Administration Act requires that a report be 
delivered to Congress before imposing such controls. The report was 
delivered to Congress on November 6, 2014.

Export Administration Act

    Although the Export Administration Act expired on August 20, 2001, 
the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 
2001 Comp., p.783 (2002), as amended by Executive Order 13637 of March 
8, 2013, 78 FR 16129 (March 13, 2013) and as extended by the Notice of 
August 7, 2014, 79 FR 46959 (August11, 2014), has continued the Export 
Administration Regulations in effect under the International Emergency 
Economic Powers Act. BIS continues to carry out the provisions of the 
Export Administration Act, as appropriate and to the extent permitted 
by law, pursuant to Executive Order 13222 as amended by Executive Order 
13637.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been determined 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 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 significantly 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. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring notice of proposed rulemaking, the opportunity for 
public comment and a delay in effective date are inapplicable because 
this regulation involves a military or foreign affairs function of the 
United States. (See 5 U.S.C. 553(a)(1)). BIS also implements this rule 
to protect U.S. national security or foreign policy objectives from 
being undermined by immediately restricting the export, reexport or 
transfer (in-country) of certain items to Venezuela for a military end 
use or end-user. Further, no other law requires that a notice of 
proposed rulemaking and an opportunity for public comment be given for 
this rule. Because a notice of proposed rulemaking and an opportunity 
for public comment are not required to be given for this rule by 5 
U.S.C. 553, or by any other law, the analytical requirements of the 
Regulatory Flexibility Act, 5 U.S.C. 601 et seq., are not applicable. 
Accordingly, no 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 is amended 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; 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 7, 2014, 79 FR 46959 
(August 11, 2014); Notice of September 17, 2014, 79 FR 56475 
(September 19, 2014); Notice of November 7, 2013, 78 FR 67289 
(November 12, 2013); Notice of January 21, 2014, 79 FR 3721 (January 
22, 2014).

0
2. Section 744.21 is revised to read as follows:

Sec.  744.21  Restrictions on Certain `Military end uses' in the 
People's Republic of China (PRC) or for a `Military end use' or 
`Military end user' in Russia or Venezuela.

    (a)(1) General prohibition. In addition to the license requirements 
for items specified on the Commerce Control List (CCL), you may not 
export, reexport, or transfer (in-country) any item subject to the EAR 
listed in Supplement No. 2 to Part 744 to the PRC, Russia or Venezuela 
without a license if, at the time of the export, reexport, or transfer 
(in-country), either:
    (i) You have ``knowledge,'' as defined in Sec.  772.1 of the EAR, 
that the item is intended, entirely or in part, for a `military end 
use,' as defined in paragraph (f) of this section, in the PRC or for a 
`military end use' or `military end user' in Russia or Venezuela; or
    (ii) You have been informed by BIS, as described in paragraph (b) 
of this section, that the item is or may be intended, entirely or in 
part, for a `military end use' in the PRC or for a `military end use' 
or `military end-user' in Russia or Venezuela.
    (2) General prohibition. In addition to the license requirements 
for 9x515 and ``600 series'' items specified on the Commerce Control 
List (CCL), you may not export, reexport, or transfer (in-country) any 
9x515 or ``600 series'' item, including items described in a .y 
paragraph of a 9x515 or ``600 series'' ECCN, to the PRC, Russia or 
Venezuela without a license.
    (b) Additional prohibition on those informed by BIS. BIS may inform 
you either individually by specific notice, through amendment to the 
EAR published in the Federal Register, or through a separate notice 
published in the Federal Register, that a license is required for 
specific exports, reexports, or transfers (in-country) of any item 
because there is an unacceptable risk of use in or diversion to 
`military end use' activities in the PRC or for a `military end use' or 
`military end user' in Russia or Venezuela. Specific notice will be 
given only by, or at the direction of, the Deputy Assistant Secretary 
for Export Administration. When such notice is

[[Page 66290]]

provided orally, it will be followed by written notice within two 
working days signed by the Deputy Assistant Secretary for Export 
Administration or the Deputy Assistant Secretary's designee. The 
absence of BIS notification does not excuse the exporter from 
compliance with the license requirements of paragraph (a) of this 
section.
    (c) License exception. Despite the prohibitions described in 
paragraphs (a) and (b) of this section, you may export, reexport, or 
transfer (in-country) items subject to the EAR under the provisions of 
License Exception GOV set forth in Sec.  740.11(b)(2)(i) and (ii) of 
the EAR.
    (d) License application procedure. When submitting a license 
application pursuant to this section, you must state in the 
``additional information'' block of the application that ``this 
application is submitted because of the license requirement in Sec.  
744.21 of the EAR (Restrictions on Certain Military End Uses in the 
People's Republic of China or for a `Military End Use' or `Military End 
User' in Russia or Venezuela).'' In addition, either in the additional 
information block of the application or in an attachment to the 
application, you must include for the PRC all known information 
concerning the military end use of the item(s) and for Russia or 
Venezuela, all known information concerning the `military end use' and 
`military end users' of the item(s). If you submit an attachment with 
your license application, you must reference the attachment in the 
``additional information'' block of the application.
    (e) License review standards. (1) Applications to export, reexport, 
or transfer items described in paragraph (a) of this section will be 
reviewed on a case-by-case basis to determine whether the export, 
reexport, or transfer would make a material contribution to the 
military capabilities of the PRC, Russia, or Venezuela, and would 
result in advancing the country's military activities contrary to the 
national security interests of the United States. When it is determined 
that an export, reexport, or transfer would make such a contribution, 
the license will be denied.
    (2) Applications may be reviewed under chemical and biological 
weapons, nuclear nonproliferation, or missile technology review 
policies, as set forth in Sec. Sec.  742.2(b)(4), 742.3(b)(4) and 
742.5(b)(4) of the EAR, if the end use may involve certain 
proliferation activities.
    (3) Applications for items requiring a license for other reasons 
that are destined to the PRC for a `military end use' or that are 
destined to Russia or Venezuela for a `military end use' or `military 
end user' also will be subject to the review policy stated in paragraph 
(e)(1) of this section.
    (f) Military end use. In this section, `military end use' means: 
incorporation into a military item described on the U.S. Munitions List 
(USML) (22 CFR part 121, International Traffic in Arms Regulations); 
incorporation into a military item described on the Wassenaar 
Arrangement Munitions List (as set out on the Wassenaar Arrangement Web 
site at http://www.wassenaar.org); incorporation into items classified 
under ECCNs ending in ``A018'' or under ``600 series'' ECCNs; or for 
the ``use,'' ``development,'' or ``production'' of military items 
described on the USML or the Wassenaar Arrangement Munitions List, or 
items classified under ECCNs ending in ``A018'' or under ``600 series'' 
ECCNs.

    Note to paragraph (f) of this section:  (1) As defined in Part 
772 of the EAR, ``use'' means operation, installation (including on-
site installation), maintenance (checking), repair, overhaul and 
refurbishing; ``development'' is related to all stages prior to 
serial production, such as: design, design research, design 
analyses, design concepts, assembly and testing of prototypes, pilot 
production schemes, design data, process of transforming design data 
into a product, configuration design, integration design, layouts; 
and ``production'' means all production stages, such as: product 
engineering, manufacturing, integration, assembly (mounting), 
inspection, testing, quality assurance.
    (2) For purposes of this section, ``operation'' means to cause 
to function as intended; ``installation'' means to make ready for 
use, and includes connecting, integrating, incorporating, loading 
software, and testing; ``maintenance'' means performing work to 
bring an item to its original or designed capacity and efficiency 
for its intended purpose, and includes testing, measuring, 
adjusting, inspecting, replacing parts, restoring, calibrating, 
overhauling; and ``deployment'' means placing in battle formation or 
appropriate strategic position.

    (g) Military end user. In this section, the term `military end 
user' means the national armed services (army, navy, marine, air force, 
or coast guard), as well as the national guard and national police, 
government intelligence or reconnaissance organizations, or any person 
or entity whose actions or functions are intended to support `military 
end uses' as defined in paragraph (f) of this section.
    (h) Effects on contracts. Venezuela: Transactions involving the 
export, reexport or transfer (in country) of items to or within 
Venezuela are not subject to the provisions of Sec.  744.21 if the 
contracts for such transactions were signed prior to November 7, 2014.

    Dated: November 3, 2014.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2014-26465 Filed 11-6-14; 8:45 am]
BILLING CODE 3510-33-P