Document ID: BIS-2010-0031-0001
Agency: bis
Document Type: Rule
Title: Jurisdictional Scope of Commodity Classification Determinations and Advisory Opinions, etc.
Posted Date: 2010-08-02T04:00Z

[Federal Register: August 2, 2010 (Volume 75, Number 147)]
[Rules and Regulations]               
[Page 45052-45055]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02au10-3]                         

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 734 and 748

[Docket No. 100707291-0292-01]
RIN 0694-AE94

 
The Jurisdictional Scope of Commodity Classification 
Determinations and Advisory Opinions Issued by the Bureau of Industry 
and Security

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Interim final rule with request for comments.

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SUMMARY: In this interim final rule, the Bureau of Industry and 
Security (BIS) amends the Export Administration Regulations (EAR) to 
clarify that commodity classification determinations and advisory 
opinions BIS issues or has issued under the EAR are not and may not be 
relied upon as U.S. Government determinations that the items described 
therein are subject to the EAR, as opposed to the jurisdiction of 
another U.S. Government agency.

[[Page 45053]]

DATES: This rule is effective August 2, 2010. Comments must be received 
October 1, 2010.

ADDRESSES: You may submit comments, identified by RIN 0694-AE94, by any 
of the following methods:
     Federal e-Rulemaking Portal: www.Regulations.gov. Please 
follow the instructions for submitting comments.
     E-mail: publiccomments@bis.doc.gov Include ``RIN 0694-
AE94'' in the subject line of the message.
     Fax: (202) 482-3355. Please alert the Regulatory Policy 
Division, by calling (202) 482-2440, if you are faxing comments.
     Mail or Hand Delivery/Courier: Sheila Quarterman, U.S. 
Department of Commerce, Bureau of Industry and Security, Regulatory 
Policy Division, 14th Street & Pennsylvania Avenue, NW., Room 2705, 
Washington, DC 20230, Attn: RIN 0694-AE94.

Send comments regarding the collection of information associated with 
this rule, including suggestions for reducing the burden to Jasmeet 
Seehra, Office of Management and Budget (OMB), by e-mail to Jasmeet_
K._Seehra@omb.eop.gov or by fax to (202) 395-7285. Comments on this 
collection of information should be submitted separately from comments 
on the final rule (i.e., RIN 0694-AE94)--all comments on the latter 
should be submitted by one of the three methods outlined above.

FOR FURTHER INFORMATION CONTACT: Sheila Quarterman, Bureau of Industry 
and Security, Office of Exporter Services, Regulatory Policy Division, 
by phone at (202) 482-2440 or by fax (202) 482-3355.

SUPPLEMENTARY INFORMATION: 

Background

    BIS has jurisdiction over only those items and activities that are 
``subject to the EAR'' as described in Sec. Sec.  734.2(a) and 734.3(a) 
of the EAR. Items that are exclusively controlled for export or 
reexport by another agency of the U.S. Government are not ``subject to 
the EAR.'' 15 CFR 734.3(b)(1). If an item is exclusively subject to the 
jurisdiction of another agency, for example, the Department of State's 
Directorate of Defense Trade Controls (DDTC), the Department of the 
Treasury's Office of Foreign Assets Controls (OFAC), the U.S. Nuclear 
Regulatory Commission (NRC), the Department of Energy (DOE), or the 
Patent and Trademark Office (PTO), then one must comply with the 
regulations administered by that agency and need not consider the 
provisions of the EAR. 15 CFR 732.2(a)(1) and 734.3(b)(1). In order to 
determine whether an item is ``subject to the EAR'' or whether the item 
is subject to the exclusive export control jurisdiction of another U.S. 
government agency, a person is entitled to make jurisdictional 
determinations with respect to particular items based on a review of 
the relevant regulations. A person may also seek and receive official 
guidance from the other U.S. Government agencies regarding whether an 
item is subject to the exclusive export control jurisdiction of such 
agencies. In particular, DDTC has a process by which one may seek and 
receive a ``commodity jurisdiction'' (CJ) determination whether an item 
is subject to the International Traffic in Arms Regulations (ITAR). 22 
CFR 120.4.
    Unlike the ITAR, the EAR does not provide authority to make 
commodity jurisdiction determinations. Rather, as described in Sec.  
748.3(a) of the EAR, an exporter or other party may request that BIS 
provide (i) an official determination--called a ``commodity 
classification''--of which, if any, of the EAR's Export Control 
Classification Numbers (ECCNs) describe the items subject to the 
request and (ii) advisory opinions, which are official guidance 
regarding how BIS interprets the EAR. ECCNs are the numbers and letters 
that identify items on the EAR's list of items controlled for export 
and reexport, and are found in the Commerce Control List (CCL) in 
Supplement No. 1 to Part 774 of the EAR. No other agency of the U.S. 
Government has the authority to issue determinations about the ECCN 
that applies to an item. Because BIS assigns all commodity 
classifications a Commodity Classification Automated Tracking System 
(CCATS) number, classifications are sometimes called CCATS. Sections 
748.3(b) and 748.3(c) of the EAR describe the procedures for submitting 
commodity classification and advisory opinion requests, respectively.
    Because BIS does not have the authority to issue commodity 
jurisdiction determinations, a BIS commodity classification only 
reflects whether each item identified in the commodity classification 
request is described in the CCL. Thus, prior to seeking a commodity 
classification, the applicant should have already determined--through a 
self-determination or with the assistance of another U.S. Government 
agency--that the item is not subject to the exclusive export control 
jurisdiction of another U.S. Government agency. In issuing a commodity 
classification, BIS is not making a determination of whether the item 
is or is not subject to the EAR. Similarly, although advisory opinions 
(unlike commodity classifications) may opine on matters beyond the 
interpretation of CCL provisions, advisory opinions also may not be 
relied upon or cited as evidence of whether or not the pertinent items 
are subject to the EAR.
    The purpose of this interim final rule amending Sec.  748.3(a), 
(b), and (c) of the EAR is to remind the public of the long-standing 
principle that commodity classifications and advisory opinions are not 
and may not be relied upon as U.S. Government determinations that the 
items described therein are subject to the EAR as opposed to the 
jurisdiction of another U.S. Government agency.
    To further the educational and compliance objectives of this 
amendment, BIS will begin inserting the following reminder on all 
commodity classifications it issues:

    This commodity classification sets forth the classification of 
the above-listed items if they are subject to the EAR. This 
commodity classification is not a determination by BIS as to whether 
the above-listed items are ``subject to the EAR.'' As defined and 
described in sections 734.2 through 734.4 of the EAR, the term 
``subject to the EAR'' means, among other things, that the item(s) 
are not exclusively controlled for export or reexport by another 
agency of the U.S. Government. See 15 CFR 734.3(b)(1). Thus, this 
document is not, and may not be relied upon as, a U.S. Government 
determination that the above-listed items are not, for example, 
subject to the export control jurisdiction of the International 
Traffic in Arms Regulations (ITAR) (22 CFR Parts 120-130), which are 
administered by the U.S. Department of State.

    BIS reminds the public of the availability of a webpage where 
sources of publicly available information on commodity classification 
may be found. The public may go to the following webpages for more 
information: http://www.bis.doc.gov/commodityclassificationpage.htm, or 
the main BIS webpage at http://www.bis.doc.gov and click on the link 
``Commodity Classifications.''
    Since August 21, 2001, the Export Administration Act has been in 
lapse and the President, through Executive Order 13222 of August 17, 
2001 (3 CFR, 2001 Comp., p. 783 (2002)), as extended most recently by 
the Notice of August 13, 2009 (74 FR 41325 (August 14, 2009)), has 
continued the EAR in effect under the International Emergency Economic 
Powers Act.

Rulemaking Requirement

    1. This rule has been determined to be not significant for the 
purposes of Executive Order 12866 of September 30, 1993 (58 FR 1735 
(October 4, 1993)).

[[Page 45054]]

    2. Notwithstanding any other provisions 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 rule involves 
collections previously approved by OMB under control number 0694-0088, 
``Multi-Purpose Application,'' which carries a burden hour estimate of 
58 minutes to prepare and submit form BIS-748. This rule is expected to 
result in a decrease in license applications submitted to BIS. Total 
burden hours associated with the PRA and OMB control number 0694-0088 
are not expected to increase significantly as a result of this rule.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under Executive Order 13132.
    4. The Department finds that there is good cause under 5 U.S.C. 
553(b)(B) to waive the provisions of the Administrative Procedure Act 
requiring prior notice and the opportunity for public comment as 
unnecessary. This rule only clarifies existing provisions of the EAR 
regarding commodity classification determinations and advisory 
opinions, with respect to commodity jurisdiction decisions; such 
decisions, in turn, are governed by existing statute. Because this rule 
does not implement substantive changes, but merely clarifies the 
agency's long-held interpretation, it is unnecessary to provide prior 
notice and opportunity for public comment. The 30-delay in 
effectiveness required by 5 U.S.C. 553(d) is not applicable because 
this rule is not a substantive rule. In addition, 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. However, to obtain the benefit 
of a variety of viewpoints, BIS is issuing this rule as an interim 
final rule with a request for comments.
    The period for submission of comments will close October 1, 2010. 
The Department will consider all comments received before the close of 
the comment period in developing final regulations. Comments received 
after the end of the comment period will be considered if possible, but 
their consideration cannot be assured. The Department will not accept 
public comments accompanied by a request that a part or all of the 
material be treated confidentially because of its business proprietary 
nature or for any other reason. The Department will return such 
comments and materials to the persons submitting the comments and will 
not consider them in the development of final regulations. All public 
comments on these regulations will be a matter of public record and 
will be available for public inspection and copying. In the interest of 
accuracy and completeness, the Department requires comments in written 
form (including fax or e-mail).
    Oral comments must be followed by written memoranda, which will 
also be a matter of public record and will be available for public 
review and copying. Communications from agencies of the United States 
Government or foreign governments will not be available for public 
inspection.
    The Office of Administration, Bureau of Industry and Security, U.S. 
Department of Commerce, displays these public comments on the Federal 
e-Rulemaking portal at www.Regulations.gov and on BIS's Freedom of 
Information Act (FOIA) Web site at http://www.bos.doc.gov/foia. This 
office does not maintain a separate public inspection facility. If you 
have technical difficulties accessing BIS's Web site, please call the 
Office of Administration at (202) 482-0637 for assistance.

List of Subjects

15 CFR Part 734

    Administrative practice and procedure, Exports, Inventions and 
patents, Research Science and technology.

15 CFR Part 748

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

0
Accordingly, parts 734 and 748 of the Export Administration Regulations 
(15 CFR Parts 730-774) are amended as follows:

PART 734--[AMENDED]

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

    Authority:  50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13020, 61 
FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 61 FR 58767, 3 CFR, 
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783; Notice of August 13, 2009, 74 FR 41325 (August 14, 2009); 
Notice of November 6, 2009, 74 FR 58187 (November 10, 2009).

0
2. Section 734.3 is amended by adding paragraph (d) to read as follows:

Sec.  734.3  Items subject to EAR.

* * * * *
    (d) Commodity classification determinations and advisory opinions 
issued by BIS are not, and may not be relied upon as, determinations 
that the items in question are ``subject to the EAR,'' as described in 
Sec.  748.3 of the EAR.

PART 748--[AMENDED]

0
3. The authority citation for 15 CFR Part 748 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 
FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 13, 2009, 74 
FR 41325 (August 14, 2009).

0
4. Section 748.3 is amended:
0
a. By revising the second and third sentences in paragraph (a) 
introductory text;
0
b. By adding a new sentence after the third sentence in paragraph (a) 
introductory text;
0
b. By adding paragraph (b)(3); and
0
c. By adding paragraph (c)(4), to read as follows:

Sec.  748.3  Classification requests, advisory opinions, and encryption 
registrations.

    (a) Introduction. You may ask BIS to provide you with the correct 
Export Control Classification Number (ECCN) down to the paragraph (or 
subparagraph) level, if appropriate. BIS will issue you a determination 
that each item identified in your classification request is either 
described by an ECCN in the Commerce Control List (CCL) in Supplement 
No. 1 to Part 774 of the EAR or not described by an ECCN and, 
therefore, an ``EAR99'' item. These classification determinations 
issued by BIS are not U.S. Government determinations that the items 
described therein are ``subject to the EAR,'' as this term is defined 
in Sec.  734.3 of the EAR. Those who request commodity classifications 
and advisory opinions should have determined that the items at issue 
are not subject to the exclusive export control jurisdiction of one of 
the other U.S. Government agencies listed in Sec.  734.3(b) of the EAR. 
* * *
    (b) * * *
    (3) BIS assigns each of its commodity classifications a Commodity 
Classification Automated Tracking System (CCATS) number. Neither the 
BIS classification nor the CCATS number may be relied upon or cited as 
evidence that the U.S. Government has determined that the items 
described in the commodity classification

[[Page 45055]]

determination are subject to the EAR (See 15 CFR 734.3).
    (c) * * *
    (4) Advisory opinions are limited in scope to BIS's interpretation 
of EAR provisions. Advisory opinions differ from commodity 
classifications in that advisory opinions are not limited to the 
interpretation of provisions contained in the Commerce Control List. 
Advisory opinions may not be relied upon or cited as evidence that the 
U.S. Government has determined that the items described in the advisory 
opinion are not subject to the export control jurisdiction of another 
agency of the U.S. Government (See 15 CFR 734.3).
* * * * *

    Dated: July 23, 2010.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2010-18735 Filed 7-30-10; 8:45 am]
BILLING CODE 3510-33-P