Document ID: BIS-2014-0010-0001
Agency: bis
Document Type: Rule
Title: Entity List: Addition of Person
Posted Date: 2014-04-16T04:00Z

[Federal Register Volume 79, Number 73 (Wednesday, April 16, 2014)]
[Rules and Regulations]
[Pages 21394-21397]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-08701]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 744

[Docket No. 140331295-4324-01]
RIN 0694-AG14

Addition of Person to the Entity List

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: This rule amends the Export Administration Regulations (EAR) 
by adding one person under two entries to the Entity List. The person 
who is added to the Entity List has been determined by the U.S. 
Government to be acting contrary to the national security or foreign 
policy interests of the United States. This person will be listed on 
the Entity List under the destination of Crimea (Occupied) with a cross 
reference added under Ukraine.

DATES: Effective Date: This rule is effective April 16, 2014.

FOR FURTHER INFORMATION CONTACT: Karen Nies-Vogel, Chair, End-User 
Review Committee, Office of the Assistant Secretary, Export 
Administration, Bureau of Industry and Security, Department of 
Commerce, Phone: (202) 482-5991, Fax: (202) 482-3911, Email: 
ERC@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

    The Entity List (Supplement No. 4 to Part 744) notifies the public 
about entities that have engaged in activities that could result in an 
increased risk of the diversion of exported, reexported or transferred 
(in-country) items to weapons of mass destruction (WMD) programs. Since 
its initial publication, grounds for inclusion on the Entity List have 
expanded to include activities sanctioned by the State Department and 
activities contrary to U.S. national security or foreign policy 
interests, including terrorism and export control violations involving 
abuse of human rights. Certain exports, reexports, and transfers (in-
country) to entities identified on the Entity List require licenses 
from BIS and are usually subject to a policy of denial. The 
availability of license exceptions in such transactions is very 
limited. The license review policy for each entity is identified in the 
license review policy column on the Entity List and the availability of 
license exceptions is noted in the Federal Register notices adding 
persons to the Entity List. BIS places entities on the Entity List 
based on certain sections of part 744 (Control Policy: End-User and 
End-Use Based) of the EAR.
    The End-User Review Committee (ERC), composed of representatives of 
the Departments of Commerce (Chair), State, Defense, Energy and, where 
appropriate, the Treasury, makes all decisions regarding additions to, 
removals from, or other modifications to the Entity List. The ERC makes 
all decisions to add an entry to the Entity List by majority vote and 
all decisions to remove or modify an entry by unanimous vote. The 
Departments represented on the ERC approved these changes to the Entity 
List.

ERC Entity List Decisions

Addition to the Entity List

    This rule implements the decision of the ERC to add one person 
under two entries to the Entity List on the basis of Sec.  744.11 
(License requirements that apply to entities acting contrary to the 
national security or foreign policy interests of the United States) of 
the EAR. The two entries added to the Entity List consist of one entry 
in Crimea (Occupied) with an additional entry added to provide a cross 
reference from Ukraine. The ERC's decision to add `Crimea (Occupied)' 
to the Country column of the Entity List results from the U.S. 
government's decision to use `Crimea (Occupied)' to describe the 
purported annexation of Crimea by the Russian Federation.
    The ERC reviewed Sec.  744.11(b) (Criteria for revising the Entity 
List) in making the determination to add this one person under two 
entities to the Entity List. Under that paragraph, persons for whom 
there is reasonable cause to believe, based on specific and articulable 
facts, have been involved, are involved, or pose a significant risk of 
being or becoming involved in, activities that are contrary to the 
national security or foreign policy interests of the United States and 
those acting on behalf of such persons may be added to the Entity List.
    The one person under two entries being added to the entity list is 
a regional oil and gas company in Crimea, Chernomorneftegaz, a.k.a. 
Chornomornaftogaz and NJSC Chornomornaftogaz, which is a subsidiary of 
Naftogaz. Chernomorneftegaz, a.k.a. Chornomornaftogaz and NJSC 
Chornomornaftogaz, has been determined by the ERC to be involved in 
activities that are contrary to the national security or foreign policy 
interests of the United States. The U.S. Government has determined that 
the

[[Page 21395]]

Russian Federation's actions--including the recent deployment of 
Russian Federation military forces in the Crimea area of Ukraine 
(Occupied Crimea)--are in clear violation of Ukrainian sovereignty and 
territorial integrity and a breach of international law, including 
Russia's obligations under the United Nations Charter and under its 
1997 military basing agreement with Ukraine. They are also inconsistent 
with the 1994 Budapest Memorandum, under which, in response to certain 
commitments by Ukraine, Russia, the United States and the United 
Kingdom, the signatories consecrated the sovereignty and territorial 
integrity of Ukraine as an independent state by applying the principles 
of territorial integrity and nonintervention found in Helsinki Final 
Act, the accords signed by the Conference on Security and Cooperation 
in Europe of 1975. The Russian Federation's actions also conflict with 
the Vienna Document of 1979, as adopted by the members of the 
Organization for Security and Cooperation in Europe (of which the 
Russian Federation is a member), which includes a provision for 
exchange and verification of military information among membership, 
including but not limited to prior notification of military activities 
such as major troop exercises.
    On March 6, 2014, the President of the United States issued 
Executive Order 13660 (79 FR 13491), Blocking Property of Certain 
Persons Contributing to the Situation in Ukraine, finding that the 
actions and policies of persons including persons who have asserted 
governmental authority in the Crimean region (Occupied Crimea) without 
the authorization of the Government of Ukraine undermine democratic 
processes and institutions in Ukraine; threaten its peace, security, 
stability, sovereignty, and territorial integrity; and contribute to 
the misappropriation of its assets, constitute an unusual and 
extraordinary threat to the national security and foreign policy of the 
United States, and declaring a national emergency to deal with that 
threat.
    Specifically, Executive Order 13660 blocks all property and 
interests in property that are in the United States, that come within 
the United States, or that are or come within the possession or control 
of any United States person (including any foreign branch) of any 
person determined by the Secretary of the Treasury, in consultation 
with the Secretary of State, to be responsible for or complicit in, or 
to have engaged in, directly or indirectly, misappropriation of state 
assets of Ukraine or of an economically significant entity in Ukraine, 
among other activities. In conjunction with the Department of the 
Treasury's designation of Chernomorneftegaz, a.k.a. Chornomornaftogaz 
and NJSC Chornomornaftogaz, under Executive Order 13660, the Department 
of Commerce is imposing a license requirement for exports, reexports 
and transfers (in-country) to Chernomorneftegaz, a.k.a. 
Chornomornaftogaz and NJSC Chornomornaftogaz. Imposition of this 
license requirement implements an appropriate measure within the 
authority of the EAR to carry out the provisions of Executive Order 
13660. The entity being added to the Entity List under this rule, 
Chernomorneftegaz, a.k.a. Chornomornaftogaz and NJSC Chornomornaftogaz, 
and its assets, were misappropriated. Pursuant to Sec.  744.11 of the 
EAR, the ERC determined that the conduct of this person raises 
sufficient concern that prior review of exports, reexports, or 
transfers (in-country) of items subject to the EAR involving this 
person, and the possible imposition of license conditions or license 
denials on shipments to this person, will enhance BIS's ability to 
protect the foreign policy and national security interests of the 
United States.
    For the one person under two entries added to the Entity List, the 
ERC specified a license requirement for all items subject to the EAR 
and a license review policy of presumption of denial. The license 
requirements apply to any transaction in which items are to be 
exported, reexported, or transferred (in-country) to this person or in 
which this person acts as purchaser, intermediate consignee, ultimate 
consignee, or end-user. In addition, no license exceptions are 
available for exports, reexports, or transfers (in-country) to this 
person being added to the Entity List in this rule.
    This final rule adds the following one person under two entries to 
the Entity List:
Crimea (Occupied)
    (1) Chernomorneftegaz, a.k.a., the following two aliases:

--Chornomornaftogaz, and
--NJSC Chornomornaftogaz.
    Kirova/per. Sovnarkomovskaya, 52/1, Simferopol, Crimea, 95000, 
Ukraine. (See Ukraine)
Ukraine
    (1) Chernomorneftegaz, a.k.a., the following two aliases:

--Chornomornaftogaz, and
--NJSC Chornomornaftogaz.
    Kirova/per. Sovnarkomovskaya, 52/1, Simferopol, Crimea, 95000, 
Ukraine. (See also Crimea (Occupied)).

Savings Clause

    Shipments of items removed from eligibility for a License Exception 
or export or reexport without a license (NLR) as a result of this 
regulatory action that were en route aboard a carrier to a port of 
export or reexport, on April 16, 2014, pursuant to actual orders for 
export or reexport to a foreign destination, may proceed to that 
destination under the previous eligibility for a License Exception or 
export or reexport without a license (NLR).

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 8, 2013, 78 FR 49107 (August 12, 2013), 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

[[Page 21396]]

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 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 implements this rule to 
protect U.S. national security or foreign policy interests by 
preventing items from being exported, reexported, or transferred (in 
country) to the persons being added to the Entity List. If this rule 
were delayed to allow for notice and comment and a delay in effective 
date, then entities being added to the Entity List by this action would 
continue to be able to receive items without a license and to conduct 
activities contrary to the national security or foreign policy 
interests of the United States. In addition, publishing a proposed rule 
would give these parties notice of the U.S. Government's intention to 
place them on the Entity and would create an incentive for these 
persons to either accelerate receiving items subject to the EAR to 
conduct activities that are contrary to the national security or 
foreign policy interests of the United States, and/or to take steps to 
set up additional aliases, change addresses, and other measures to try 
to limit the impact of the listing on the Entity List once a final rule 
was published. 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 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; 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 8, 2013, 78 FR 49107 (August 12, 2013); Notice of 
September 18, 2013, 78 FR 58151 (September 20, 2013); Notice of 
November 7, 2013, 78 FR 67289 (November 12, 2013); Notice of January 
21, 2014, 79 FR 3721 (January 22, 2014).

0
2. Supplement No. 4 to part 744 is amended:
0
a. By adding, in alphabetical order, an entry for Crimea (Occupied); 
and
0
b. By adding under Ukraine, in alphabetical order, one Ukrainian 
entity.
    The addition reads as follows:

                                    Supplement No. 4 to Part 744--Entity List
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                                                                          License review       Federal Register
         Country                  Entity          License requirement         policy               citation
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
CRIMEA (OCCUPIED)........  Chernomorneftegaz,    For all items         Presumption of        79 FR [INSERT FR
                            a.k.a., the           subject to the EAR    denial.               PAGE NUMBER IN THE
                            following two         (See Sec.   744.11                          Federal Register],
                            aliases:              of the EAR).                                April 16, 2014.
                           --Chornomornaftogaz,
                            and.
                           --NJSC
                            Chornomornaftogaz..
                           Kirova/per.
                            Sovnarkomovskaya,
                            52/1, Simferopol,
                            Crimea, 95000,
                            Ukraine. (See
                            Ukraine).
 
                                                  * * * * * * *
UKRAINE..................  Chernomorneftegaz,    For all items         Presumption of        79 FR [INSERT FR
                            a.k.a., the           subject to the EAR.   denial.               PAGE NUMBER IN THE
                            following two         (See Sec.   744.11                          Federal Register],
                            aliases:              of the EAR).                                April 16, 2014.
                           --Chornomornaftogaz,
                            and.
                           --NJSC
                            Chornomornaftogaz..
                           Kirova/per.
                            Sovnarkomovskaya,
                            52/1, Simferopol,
                            Crimea, 95000,
                            Ukraine. (See also
                            Crimea (Occupied)).
                                                                 * * * * *
 
                                                  * * * * * * *
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[[Page 21397]]

    Dated: April 11, 2014.
Eric L. Hirschhorn,
Under Secretary of Commerce for Industry and Security (BIS).
[FR Doc. 2014-08701 Filed 4-14-14; 11:15 am]
BILLING CODE 3510-33-P