Document ID: BIS-2020-0044-0001
Agency: bis
Document Type: Rule
Title: Expansion of Certain End-Use and End-User Controls and Controls on Specific Activities of U.S. Persons
Posted Date: 2021-01-15T05:00Z

[Federal Register Volume 86, Number 10 (Friday, January 15, 2021)]
[Rules and Regulations]
[Pages 4865-4873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00977]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 730, 734, 736, and 744

[Docket No. 210112-0007]
RIN 0694-AI38

Expansion of Certain End-Use and End-User Controls and Controls 
on Specific Activities of U.S. Persons

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Interim final rule.

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SUMMARY: The Bureau of Industry and Security (BIS), Department of 
Commerce, is issuing this interim final rule to implement the 
provisions of the Export Control Reform Act of 2018 by: imposing 
additional license requirements under the Export Administration 
Regulations (EAR) for exports, reexports, and transfers (in-country), 
as well as specific activities of U.S. persons, in connection with 
certain military-intelligence end uses and end users; clarifying that 
license requirements under the EAR for specific activities of U.S. 
persons apply even when the items at issue are not subject to the EAR; 
establishing restrictions on transactions intended to circumvent 
license requirements for listed entities; and expanding the scope of 
activities subject to chemical and biological weapons and rocket 
systems and unmanned aerial vehicles end-use controls.

DATES: Effective date: This rule is effective March 16, 2021. Comment 
date: Comments must be received by BIS no later than March 1, 2021.

ADDRESSES: Comments on this rule may be submitted to the Federal 
rulemaking portal (www.regulations.gov). The regulations.gov ID for 
this rule is: BIS-2020-0044 or RIN 0694-AI38. All relevant comments 
(including any personally identifying information) will be made 
available for public inspection and copying. Follow the instructions 
for submitting comments.
    All filers using the portal should use the name of the person or 
entity submitting the comments as the name of their files, in 
accordance with the instructions below. Anyone submitting business 
confidential information should clearly identify the business 
confidential portion at the time of submission, file a statement 
justifying nondisclosure and referring to the specific legal authority 
claimed, and also provide a non-confidential version of the submission.
    For comments submitted electronically containing business 
confidential information, the file name of the business confidential 
version should begin with the characters ``BC.'' Any page containing 
business confidential information must be clearly marked ``BUSINESS 
CONFIDENTIAL'' on the top of that page. The corresponding non-
confidential version of those comments must be clearly marked 
``PUBLIC.'' The file name of the non-confidential version should begin 
with the character ``P.'' The ``BC'' and ``P'' should be followed by 
the name of the person or entity submitting the comments or rebuttal 
comments. Any submissions with file names that do not begin with either 
a ``BC'' or a ``P'' will be assumed to be public and will be made 
publicly available through http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Philip Johnson, Senior Advisor, Export 
Enforcement, Bureau of Industry and Security, Phone: (202) 482-3685, 
Philip.Johnson@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

    On August 13, 2018, the President signed into law the John S. 
McCain National Defense Authorization Act for Fiscal Year 2019, which 
included the Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4801-
4852). ECRA directs the President to control exports, reexports, and 
transfers (in-country); as well as the activities of U.S. persons in 
connection with nuclear, chemical, and biological weapons; whole plants 
for chemical weapons precursors; missiles; foreign maritime nuclear 
projects; and foreign military intelligence services. Accordingly, BIS 
is amending parts 730, 734, 736, and 744 of the Export Administration 
Regulations (EAR) (15 CFR parts 730 through 774) to implement such 
controls. BIS is also making certain revisions to enhance existing end-
use and end-user controls under the EAR, including their 
enforceability.

Restrictions on Specific Activities of U.S. Persons

    Section 1753(a)(2) of ECRA (50 U.S.C. 4812(a)(2)) directs the 
President to impose controls on the activities of U.S. persons, 
wherever located, relating to specific nuclear explosive devices, 
missiles, chemical or biological weapons, whole plants for chemical 
weapons precursors, foreign maritime nuclear projects, and foreign 
military intelligence services. Additionally, section 1754(d) of ECRA 
(50 U.S.C. 4813(d)) directs the Secretary of Commerce to require U.S. 
persons to apply for and receive a license to engage in specific 
activities in connection with nuclear explosive devices, missiles, 
chemical or biological weapons, whole plants for chemical weapons 
precursors, and foreign maritime nuclear projects, regardless of 
whether such activities occur in connection with an export, reexport, 
or transfer (in-country) of items subject to the EAR. Although section 
1754(d)(2) of ECRA (50 U.S.C. 4813(d)(2)) does not specifically direct 
the Secretary of Commerce to impose a license requirement on the 
activities of U.S. persons in connection with foreign military 
intelligence services, section 1754(a)(16) of ECRA (50 U.S.C. 
4813(a)(16)) authorizes the Secretary to undertake any other action not 
otherwise prohibited by law to carry out the authorities granted to the 
President

[[Page 4866]]

in section 1753 of ECRA (50 U.S.C. 4812), which includes restrictions 
on U.S. person activities in connection with foreign military 
intelligence services (section 1753(a)(2)(F) of ECRA (50 U.S.C. 
4812(a)(2)(F))).
    The EAR already restrict specific activities of U.S. persons in 
connection with nuclear explosive devices, missiles, chemical and 
biological weapons, and whole plants for chemical weapons precursors. 
In accordance with ECRA, BIS is expanding these existing restrictions 
to encompass activities of U.S. persons in connection with certain 
military-intelligence end uses and end users. Specifically, BIS is 
revising Sec. Sec.  730.5 and 734.5(a) of the EAR to reflect the 
expanded scope of U.S. person activities subject to the EAR, as 
described below, which include activities supporting certain military-
intelligence end uses and end users.
    The general categories of exports, reexports, and transfers (in-
country), as well as activities of U.S. persons, which are prohibited 
absent a license from BIS are summarized in the ``General 
Prohibitions'' found in Sec.  736.2 of the EAR. Specifically, Sec.  
736.2(b)(7) of the EAR describes the types of U.S. person WMD 
proliferation activity subject to a license requirement under the EAR. 
In this rule, BIS is revising Sec.  736.2(b)(7) by harmonizing the 
definition of ``U.S. person'' in that section with the definition of 
that term as set forth in Sec.  772.1 of the EAR. Furthermore, BIS is 
revising Sec.  736.2(b)(7) to broaden the prohibition, absent a license 
from BIS, to include specific activities of U.S. persons in support of 
certain military-intelligence end uses and end users pursuant to 
sections 1753(a)(2)(F) and 1754(a)(16) of ECRA (50 U.S.C. 4812(a)(2)(F) 
and 4813(a)(16)).
    The license requirements that apply to specific activities of U.S. 
persons are described in Sec.  744.6 of the EAR. Section 744.6 
currently contains restrictions on exports, reexports, and transfers 
(in-country), as well as activities unrelated to exports (e.g., 
contracts, services, and employment), when connected with certain 
nuclear explosive, missile, or chemical or biological weapons-related 
activities, or whole plants for chemical weapons precursors. Section 
1754(d)(1)(A) of ECRA (50 U.S.C. 4813(d)(1)(A)) specifies that controls 
on the activities of U.S. persons apply even when the items at issue 
``are not subject to control under this subchapter,'' (i.e., are not 
``subject to the EAR''). Therefore, BIS is revising Sec.  744.6 to 
replace the terms ``export'' and ``reexport'' with the acts of shipping 
or transmitting to ensure that the controls set forth in that section 
apply to foreign-origin items not subject to the EAR, as set forth in 
ECRA.
    Furthermore, BIS is revising Sec.  744.6 to provide an illustrative 
list of the types of activities unrelated to the shipment, 
transmission, or transfer (in-country) of items that are subject to a 
license requirement when undertaken by U.S. persons in connection with 
the end uses or end users enumerated in that section. This list is 
derived from the list of ``Specific Unlawful Acts'' set forth in 
section 1760(a)(2)(E) of ECRA (50 U.S.C. 4819(a)(2)(E)). BIS is also 
revising Sec.  744.6 to impose a license requirement on such activities 
when a U.S. person knows the activity(ies) ``will support,'' as opposed 
to ``will directly assist,'' any of the end uses or end users listed in 
that section of the EAR. BIS is making this change in accordance with 
section 1754(d)(1)(B) of ECRA (50 U.S.C. 4813(d)(1)(B)), which 
authorizes the Secretary to implement controls on ``activities that may 
support'' the end uses described in section 1754(d)(2) of ECRA (50 
U.S.C. 4813(d)(2)); and in accordance with section 1754(a)(16) of ECRA 
(50 U.S.C. 4813(a)(16)), which authorizes the Secretary to ``undertake 
any other action as necessary to carry out this subchapter that is not 
otherwise prohibited by law,'' which includes implementing controls on 
the end uses and end users described in section 1753(a)(2) of ECRA (50 
U.S.C. 4812(a)(2)).
    In accordance with section s 1753(a)(2)(F) and 1754(a)(16) of ECRA 
(50 U.S.C. 4812(a)(2)(F) and 4813(a)(16)), BIS is also adding to Sec.  
744.6 of the EAR a new restriction on the activities of U.S. persons in 
support of certain military-intelligence end uses and end users. The 
scope of military-intelligence end uses and end users subject to 
control is defined in Sec.  744.22, as explained below. In addition, 
BIS is expanding the destinations with respect to which the activities 
of U.S. persons are restricted in connection with nuclear explosive 
devices to include any country not listed in supplement no. 3 to part 
744, for consistency with the restrictions on exports, reexports, and 
transfers (in-country) of items for use in nuclear explosive 
activities, as set forth in Sec.  744.2(a)(1) of the EAR. Likewise, BIS 
is expanding the destinations with respect to which the activities of 
U.S. persons are restricted in connection with certain ``missile'' end 
uses pursuant to Sec.  744.6 to include Cuba, a unilaterally-embargoed 
country listed in Country Group E:2 (see supplement no. 1 to part 740 
of the EAR), but not also listed in Country Group D:4.
    ECRA directs the Secretary of Commerce to impose a license 
requirement on specific activities of U.S. persons, ``except to the 
extent authorized by a statute or regulation administered by a Federal 
department or agency other than the Department of Commerce'' (50 U.S.C. 
4813(d)(1)). To avoid overlapping license requirements across U.S. 
government agencies, BIS is adding to Sec.  744.6 of the EAR a 
provision defining the scope of U.S. person activities requiring a 
license from BIS pursuant to that section to exclude any activity 
subject to a license requirement or general prohibition administered by 
another federal department or agency, to include the Departments of 
Energy, State, or the Treasury.
    The Department of Energy administers controls on the transfer of 
unclassified nuclear technology and assistance to foreign atomic energy 
activities within the United States or abroad. Pursuant to Department 
of Energy regulations at 10 CFR part 810, implementing section 57.b(2) 
of the Atomic Energy Act of 1954, as amended (42 U.S.C. 2077(b)), 
persons may engage, directly or indirectly, in the production or 
development of special nuclear material outside the United States upon 
authorization by the Secretary of Energy.
    The Department of State administers the International Traffic in 
Arms Regulations (ITAR) (22 CFR parts 120 through 130) pursuant to the 
Arms Export Control Act (AECA) (22 U.S.C. 2778). The ITAR include 
controls on defense articles (22 CFR 120.6), which are described on the 
U.S. Munitions List (USML) (22 CFR 121.1). In addition, the ITAR 
control the performance of defense services (22 CFR 120.9), which may 
include the furnishing of military training to foreign units and 
forces, as well as the furnishing of assistance pertaining to defense 
articles to foreign persons, or the furnishing to foreign persons of 
any controlled technical data (22 CFR 120.10). The ITAR also regulate 
brokering activities (see 22 CFR part 129), which include any action 
undertaken on behalf of another to facilitate the manufacture, export, 
permanent import, transfer, reexport, or retransfer of a U.S. or 
foreign defense article or defense service enumerated on the USML and 
those items designated in the U.S. Munitions Import List (USMIL) (27 
CFR 447.21). The USML includes, inter alia, nuclear weapons-related 
articles (Category XVI), missiles (Category IV), unmanned aerial 
vehicles (Category VIII), and toxicological agents and associated 
equipment (Category XIV). The USMIL includes, inter alia, nuclear 
weapons design and test

[[Page 4867]]

equipment (Category XVI), missiles (Category IV), and toxicological 
agents and equipment (Category XIV).
    The Department of the Treasury, through the Office of Foreign 
Assets Control (OFAC), administers economic sanctions programs 
governing transactions involving U.S. persons in connection with 
certain sanctioned countries or entities pursuant to a number of 
statutes and executive orders (see, inter alia, 31 CFR parts 500 
through 599).
    Section 744.6 of the EAR does not, and is not intended to, control 
the activities of U.S. persons subject to the regulatory controls 
administered by other federal departments and agencies, to include the 
Department of Energy, the Department of State, and the Department of 
the Treasury. The purpose of Sec.  744.6 is to control those activities 
of U.S. persons in connection with the end uses and end users 
enumerated in that section, only if those activities are not already 
subject to other federal regulatory controls.
    Finally, other U.S. laws, including criminal statutes, may prohibit 
the performance of certain activities by a person subject to the 
jurisdiction of the United States in connection with the end uses and 
end users described in Sec.  744.6 even if that person has obtained a 
BIS license. The issuance of a BIS license does not authorize ``U.S. 
persons'' to engage in any conduct that is otherwise prohibited by U.S. 
law, including any criminal statute.
    While Sec.  744.6 of the EAR imposes license requirements on 
certain transactions of items not subject to the EAR, and certain 
support activities, where a U.S. person is involved, BIS also notes 
that controls on exports, reexports, and transfers (in-country) of 
items subject to the EAR to nuclear-, missile-, chemical and biological 
weapons-, and military-intelligence-related end uses and end users are 
set forth in other sections of part 744, to include Sec. Sec.  744.2, 
744.3, 744.4, and 744.22. Certain activities of U.S. or foreign persons 
that facilitate exports, reexports, and transfers (in-country) that 
require a license pursuant to those sections, where no such license has 
been issued, are prohibited pursuant to Sec.  764.2 of the EAR.

Restrictions on Military-Intelligence End Uses and End Users

    This rule adds a new Sec.  744.22 to the EAR, which imposes 
supplemental license requirements on the export, reexport, or transfer 
(in-country) of all items subject to the EAR to military-intelligence 
end uses and end users in China, Russia, or Venezuela; and countries 
listed in Country Groups E:1 and E:2 (see supplement no. 1 to part 740 
of the EAR). As previously discussed, section 1753(a)(2)(F) of ECRA (50 
U.S.C. 4812(a)(2)(F)) directs the President to establish controls on 
the activities of U.S. persons with respect to foreign military 
intelligence services. This rule implements such controls by revising 
Sec.  744.6 of the EAR as described above. Consistent with these 
restrictions on the activities of U.S. persons, and in accordance with 
the authority granted to the President in section 1753(a)(1) of ECRA 
(50 U.S.C. 4812(a)(1)) and exercised by the Secretary of Commerce 
pursuant to section 1754(a)(2) and (a)(16) of ECRA (50 U.S.C. 
4813(a)(2) and (a)(16)), BIS believes it is appropriate to impose a 
license requirement on exports, reexports, and transfers (in-country) 
of all items subject to the EAR to the same military-intelligence end 
uses and end users. Specifically, BIS believes controls on U.S. person 
activities related to military-intelligence end uses and end users 
described in Sec.  744.6 of the EAR would be of limited effect if not 
implemented in tandem with a corresponding license requirement for 
exports, reexports, and transfers (in-country). Although Sec.  744.21 
of the EAR already imposes a license requirement on certain exports, 
reexports, and transfers (in-country) to military end uses and military 
end users, to include government intelligence and reconnaissance 
organizations, in China, Russia, or Venezuela, the restrictions in 
Sec.  744.21(a) of the EAR apply only to items identified in supplement 
no. 2 to part 744 of the EAR, not to all items subject to the EAR. 
Accordingly, the addition of Sec.  744.22 is warranted.
    Paragraphs (a) and (b) of Sec.  744.22 set forth license 
requirements applicable to certain military-intelligence end uses and 
end users, paragraph (c) of that section provides for the use of 
License Exception GOV (Sec.  740.11(b)(2)(ii) of the EAR), and 
paragraphs (d) and (e) outline the application procedures and review 
policy that apply to license applications submitted pursuant to that 
section. Section 744.22(f)(1) defines a ``military-intelligence end 
use'' and Sec.  744.22(f)(2) defines a ``military-intelligence end 
user'' and sets forth an illustrative list of military-intelligence end 
users subject to the license requirements outlined in Sec.  744.22. The 
imposition of a license requirement on exports, reexports, and 
transfers (in-country) for a military-intelligence end use or end user 
in the specified countries enhances U.S. national security by allowing 
prior U.S. government review of transactions involving military 
intelligence or reconnaissance organizations in countries subject to 
existing military end-use and end-user controls, sanctions, or 
embargoes.

Corresponding Change to Existing `Military End Use' and `Military End 
User' Controls

    `Military-intelligence end users,' as defined in new Sec.  
744.22(f)(2) of the EAR are a subset of the ``government intelligence 
and reconnaissance organizations'' already included in the definition 
of `military end user' in Sec.  744.21(g) of the EAR. However, the 
license requirement in Sec.  744.21(a) only applies with respect to 
items listed in supplement no. 2 to part 744 of the EAR, as opposed to 
all items subject to the EAR, as set forth in Sec.  744.22(a). 
Accordingly, Sec.  744.22 establishes a broader license requirement for 
this subset of `military end users' already subject to license 
requirements under Sec.  744.21. To avoid duplicate license 
requirements and facilitate compliance, BIS is amending the definition 
of `military end user' in Sec.  744.21(g) to exclude intelligence or 
reconnaissance organizations of the armed forces or national guard. 
Such intelligence or reconnaissance organizations will be subject to 
the broader license requirements of Sec.  744.22; however, other 
government intelligence or reconnaissance organizations, which are not 
part of the armed services or national guard, will remain subject to 
the license requirements of Sec.  744.21 of the EAR.

Restrictions on Certain Chemical and Biological Weapons End Uses

    Section 744.4 of the EAR sets forth restrictions on exports, 
reexports, and transfers (in-country) to chemical and biological 
weapons end uses anywhere in the world. BIS is revising Sec.  744.4 of 
the EAR, consistent with sections 1753(a)(2)(D) and 1754(d)(2)(D) of 
ECRA (50 U.S.C. 4812(a)(2)(D) and 4813(d)(2)(D)), to include 
restrictions on exports, reexports, and transfers (in-country) of any 
item subject to the EAR for use in the design, ``development,'' 
``production,'' operation, installation (including on-site 
installation), maintenance (checking), repair, overhaul, or 
refurbishing of a whole plant for chemical weapons precursors specified 
in export control classification number (ECCN) 1C350, which controls 
certain precursor chemicals listed in Schedules 2 and 3 of the Chemical 
Weapons Convention and/or subject to control by the Australia Group. 
The terms ``development'' and ``production'' are defined in Sec.  772.1 
of the EAR. This

[[Page 4868]]

expansion of controls advances U.S. WMD nonproliferation policy, as set 
forth in ECRA.

Activities Associated With Use

    The term ``use'' is defined in Sec.  772.1 of the EAR as 
``operation, installation (including on-site installation, maintenance 
(checking), repair, overhaul, and refurbishing.'' Sections 744.3 and 
744.4 of the EAR, respectively, impose license requirements on all 
items subject to the EAR when an exporter, reexporter, or transferor 
(in-country) knows such items will be used in the ``design, 
`development,' `production,' or use'' of certain rocket systems or 
unmanned aerial vehicles; or in the ``design, `development,' 
`production,' stockpiling, or use'' of chemical or biological weapons. 
Likewise, Sec.  744.6 imposes a license requirement on specific 
activities of U.S. persons in support of the ``design, `development,' 
`production,' or use'' of nuclear explosive devices and rocket systems 
or unmanned aerial vehicles; or the ``design, `development,' 
`production,' stockpiling, or use'' of chemical or biological weapons. 
The definition of ``use'' in Sec.  772.1 of the EAR, which appears in 
general technology notes on the Commerce Control List (CCL) (supplement 
no. 1 to part 774 of the EAR), resulted in a requirement for a WMD end 
use to involve all of the activities listed in that definition in order 
to trigger a ``use''-based license requirement under Sec. Sec.  744.3, 
744.4, or 744.6 of the EAR. This is inconsistent with section 
1754(d)(1)(B) of ECRA (50 U.S.C. 4813(d)(1)(B)), which lists the 
component activities of the EAR definition of ``use'' as separate and 
individually-sufficient activities for end-use control purposes. 
Accordingly, BIS is revising each of those sections of the EAR to 
replace the word ``use'' with a list of its component activities, i.e., 
``operation, installation (including on-site installation), maintenance 
(checking), repair, overhaul, or refurbishing,'' to ensure that any one 
of those activities individually triggers a license requirement under 
the relevant sections of the EAR, when connected with certain WMD end 
uses.

Additional Prohibition on Persons Informed by BIS of Transactions 
Intended To Circumvent Entity List License Requirements

    The Entity List (supplement no. 4 to part 744 of the EAR) imposes a 
supplemental license requirement, to the extent specified in each entry 
on the Entity List, for exports, reexports, or transfers (in-country) 
in which a listed entity is a party to the transaction as described in 
Sec.  748.5(c) through (f) of the EAR. Entities may be added to the 
Entity List in accordance with the procedures set forth in supplement 
no. 5 to part 744 of the EAR if there is reasonable cause to believe 
the entity has been involved, is involved, or poses a significant risk 
of being or becoming involved in activities contrary to U.S. national 
security or foreign policy interests.
    Although Entity List license requirements generally only apply to 
listed entities, BIS has posted guidance on its website in the form of 
frequently asked questions (FAQs) advising increased due diligence when 
proceeding with transactions involving parties co-located with, or 
which are subsidiaries, parent companies, or sister companies of, 
listed entities. In such cases, exporters, reexporters, and transferors 
should assess whether such entities are acting as an agent, front, or a 
shell company for a listed entity in order to facilitate transactions 
that would otherwise not be permissible, and whether the items intended 
for export, reexport, or transfer (in-country) may ultimately be 
destined to a listed entity.
    In certain cases, BIS may have information indicating that a 
specific transaction, although not directly involving a listed entity, 
nevertheless poses an unacceptable risk of diversion to a listed 
entity. Likewise, BIS may have information that a specific entity, 
although not itself listed on the Entity List, is acting on behalf of a 
listed entity, or otherwise assisting a listed entity, in circumventing 
Entity List license requirements. In such cases, BIS may wish to inform 
an exporter, reexporter, or transferor that a license is required based 
on an unacceptable risk that the items in question will ultimately be 
used by, or diverted to, a listed entity. This is consistent with other 
provisions of part 744 of the EAR (i.e., Sec. Sec.  744.2(b), 744.3(b), 
744.4(b), 744.9(b), 744.17(b), 744.21(b), and 744.22(b)), which 
authorize BIS to inform exporters, reexporters, or transferors of a 
license requirement based on an unacceptable risk of use in, or 
diversion to, specified end uses or end users.
    Furthermore, section 1754(a)(2) and (a)(15) of ECRA (50 U.S.C. 
4813(a)(2) and (a)(15)) specifically authorize the Secretary of 
Commerce to not only establish and maintain lists of foreign persons 
determined to be a threat to the national security and foreign policy 
of the United States, but also to inform persons, either individually 
by specific notice, or through amendment to the EAR, that a license is 
required for specific transactions. Accordingly, BIS is adding a new 
paragraph (c) to Sec.  744.11 of the EAR, which authorizes BIS to 
inform persons that a license is required for specified transactions, 
or for transactions with specific parties, based on an unacceptable 
risk that the items in question will be ultimately used by, or diverted 
to, a listed entity.

Conforming Changes

    BIS is also making conforming changes to Sec.  744.1(a)(1) of the 
EAR to reflect the expanded scope of U.S. person controls in Sec.  
744.6, as well as new military-intelligence end-use and end-user 
controls in Sec.  744.22, as implemented in this rule. In addition, BIS 
is adding to Sec.  744.1(a)(1) a description of existing end-use and 
end-user controls in Sec. Sec.  744.9, 744.17, and 744.18 of the EAR. 
Finally, BIS is revising Sec.  744.1(b)(2) of the EAR to reference all 
provisions of part 744 that set forth ``additional prohibitions on 
persons informed by BIS,'' to include new Sec. Sec.  744.6(c), 
744.11(c), and 744.22(b), as well as existing Sec. Sec.  744.9(b), 
744.17(b), and 744.21(b), which were not previously listed in that 
section.

Request for Comments

    BIS welcomes comments on the impact of this interim final rule. 
Instructions for the submission of comments, including comments that 
contain business confidential information, are found in the `Addresses' 
section of this interim final rule.
Export Control Reform Act of 2018
    On August 13, 2018, the President signed into law the John S. 
McCain National Defense Authorization Act for Fiscal Year 2019, which 
included the Export Control Reform Act of 2018 (ECRA), 50 U.S.C. 4801-
4852. ECRA provides the legal basis for BIS's principal authorities and 
serves as the authority under which BIS issues this rule.
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 interim final rule has

[[Page 4869]]

been designated a ``significant regulatory action,'' although not 
economically significant under section 3(f) of Executive Order 12866. 
Although this rule is a significant regulatory action, it is a 
regulation where the analysis demonstrates that the primary, direct 
benefit is national security and is, thus, exempt from the provisions 
of Executive Order 13771. This interim final rule will support the 
national security and foreign policy objectives of the United States by 
implementing controls on exports, reexports, and transfers (in-country) 
related to whole plants for chemical weapons precursors and certain 
military-intelligence end uses and end users, as well as the activities 
of U.S. persons, with respect to such military-intelligence end uses 
and end users. These controls are consistent with ECRA and allow the 
U.S. government prior review of such transactions and activities to 
determine whether they would be contrary to U.S. national security and 
foreign policy interests. Furthermore, this rule advances U.S. national 
security and foreign policy by expanding existing controls on U.S. 
person activities in support of certain nuclear explosive devices, 
missiles, and chemical and biological weapons to apply to items not 
subject to the EAR, as directed in ECRA. This rule also supports U.S. 
national security and foreign policy by allowing prior U.S. government 
review of a broader range of transactions that may be destined to 
various activities related to the use of rocket systems or unmanned 
aerial vehicles, or chemical or biological weapons. Finally, this rule 
allows the U.S. government to review transactions that post an 
unacceptable risk of use by, or diversion to, entities acting contrary 
to U.S. national security and foreign policy interests.
    2. Notwithstanding any other provision of law, no person may be 
required to respond to or 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 a 
collection of information 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 42.5 minutes for a manual or electronic submission. 
BIS expects this rule will increase the number of license applications 
required to be submitted to BIS each year by imposing licensing 
requirements on certain exports, reexports, and transfers (in-country), 
as well as activities of U.S. persons not previously subject to a 
licensing requirement. BIS estimates the total number of additional 
license applications will not exceed 40 per year, for a total increase 
in public burden under OMB control number 0694-0088 of no more than 29 
hours per year.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under Executive Order 13132.
Administrative Procedure Act and Regulatory Flexibility Act 
Requirements
    Pursuant to section 4821 of ECRA (50 U.S.C. 4821), this action is 
exempt from the Administrative Procedure Act (5 U.S.C. 553) 
requirements for notice of proposed rulemaking, opportunity for public 
participation and delay in effective date.
    Further, no other law requires that a notice of proposed rulemaking 
and an opportunity for public comment be given for this interim final 
rule. Because a notice of proposed rulemaking and an opportunity for 
public comment are not required to be given for this rule under the 
Administrative Procedure Act 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

15 CFR Part 730

    Administrative practice and procedure, Advisory committees, 
Exports, General information, Reporting and recordkeeping requirements, 
Strategic and critical materials.

15 CFR Part 734

    Administrative practice and procedure, Exports, Inventions and 
patents, Research, Science and technology, Scope of the Export 
Administration Regulations.

15 CFR Part 736

    Exports, General prohibitions.

15 CFR Part 744

    End-user and end-use based control policy, Exports, Reporting and 
recordkeeping requirements, Terrorism.

    Accordingly, parts 730, 734, 736, and 744 of the EAR (15 CFR parts 
730 through 774) are amended as follows:

PART 730--GENERAL INFORMATION

0
1. The authority citation for part 730 is revised to read as follows:

    Authority:  50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 
U.S.C. 1701 et seq.; 10 U.S.C. 8720; 10 U.S.C. 8730(e); 22 U.S.C. 
287c; 22 U.S.C. 2151 note; 22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; 
42 U.S.C. 2139a; 15 U.S.C. 1824; 50 U.S.C. 4305; 22 U.S.C. 7201 et 
seq.; 22 U.S.C. 7210; E.O. 11912, 41 FR 15825, 3 CFR, 1976 Comp., p. 
114; E.O. 12002, 42 FR 35623, 3 CFR, 1977 Comp., p. 133; E.O. 12058, 
43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12214, 45 FR 29783, 3 
CFR, 1980 Comp., p. 256; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., 
p. 608; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., p. 179; E.O. 
12918, 59 FR 28205, 3 CFR, 1994 Comp., p. 899; E.O. 12938, 59 FR 
59099, 3 CFR, 1994 Comp., p. 950; E.O. 12981, 60 FR 62981, 3 CFR, 
1995 Comp., p. 419; 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; E.O. 13224, 66 FR 49079, 3 
CFR, 2001 Comp., p. 786; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., 
p 168; E.O. 13637, 78 FR 16129, 3 CFR, 2014 Comp., p. 223; Notice of 
September 18, 2020, 85 FR 59641 (September 22, 2020); Notice of 
November 12, 2020, 85 FR 72897 (November 13, 2020); Notice of May 7, 
2020, 85 FR 27639.

0
2. Section 730.5 is amended by revising paragraph (d) to read as 
follows:

Sec.  730.5   Coverage of more than exports.

* * * * *
    (d) ``U.S. person'' activities. The EAR restrict specific 
activities of ``U.S. persons,'' wherever located, related to the 
proliferation of nuclear explosive devices, ``missiles,'' chemical or 
biological weapons, whole plants for chemical weapons precursors, and 
certain military-intelligence end uses and end users, as described in 
Sec.  744.6 of the EAR.

PART 734--SCOPE OF THE EXPORT ADMINISTRATION REGULATIONS

0
3. The authority citation for part 734 is revised to read as follows:

    Authority:  50 U.S.C. 4801-4852; 50 U.S.C. 4601 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; E.O. 13637, 78 FR 16129, 3 CFR, 2014 Comp., 
p. 223; Notice of November 12, 2020, 85 FR 72897 (November 13, 
2020).

0
4. Section 734.5 is amended by revising paragraph (a) to read as 
follows:

Sec.  734.5  Activities of U.S. and foreign persons subject to the EAR.

* * * * *
    (a) Specific activities of ``U.S. persons,'' wherever located, 
related to

[[Page 4870]]

the proliferation of nuclear explosive devices, ``missiles,'' chemical 
or biological weapons, whole plants for chemical weapons precursors, 
and certain military-intelligence end uses and end users as described 
in Sec.  744.6 of the EAR.
* * * * *

PART 736--GENERAL PROHIBITIONS

0
5. The authority citation for part 736 is revised to read as follows:

    Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 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; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., 
p. 168; Notice of November 12, 2020, 85 FR 72897 (November 13, 
2020); Notice of May 7, 2020, 85 FR 27639.

0
6. Section 736.2 is amended by revising paragraphs (b)(7) introductory 
text and (7)(i) and (ii) to read as follows:

Sec.  736.2  General prohibitions and determination of applicability.

* * * * *
    (b) * * *
    (7) General Prohibition Seven--Support of proliferation activities 
and certain military-intelligence end uses and end users (``U.S. 
person'' activities)-
    (i) Support of proliferation activities and certain military-
intelligence end uses and end users (``U.S. person'' activities).
    (A) If you are a ``U.S. person,'' as that term is defined in Sec.  
772.1 of the EAR, you may not engage in any activities prohibited by 
Sec.  744.6(b) or (c) of the EAR, which prohibit, without a license 
from BIS, the shipment, transmission, or transfer (in-country) of items 
not subject to the EAR; facilitating such shipment, transmission, or 
transfer (in-country); or the performance of any contract, service, or 
employment (including, but not limited to: ordering, buying, removing, 
concealing, storing, using, selling, loaning, disposing, servicing, 
financing, or transporting, freight forwarding, or conducting 
negotiations in furtherance of) that you know or are informed by BIS 
will support:
    (1) The design, ``development,'' ``production,'' operation, 
installation (including on-site installation), maintenance (checking), 
repair, overhaul, or refurbishing of nuclear explosive devices in or by 
any country not listed in supplement no. 3 to part 744 of the EAR;
    (2) The design, ``development,'' ``production,'' operation, 
installation (including on-site installation), maintenance (checking), 
repair, overhaul, or refurbishing of ``missiles'' in or by a country 
listed in Country Groups D:4 or E:2;
    (3) The design, ``development,'' ``production,'' operation, 
installation (including on-site installation), maintenance (checking), 
repair, overhaul, or refurbishing of chemical or biological weapons in 
or by any country or destination worldwide;
    (4) The design, ``development,'' ``production,'' operation, 
installation (including on-site installation), maintenance (checking), 
repair, overhaul, refurbishing, shipment, or transfer (in-country) of a 
whole plant to make chemical weapons precursors identified in ECCN 
1C350, in or by countries other than those listed in Country Group A:3 
(Australia Group); or
    (5) A `military-intelligence end use' or a `military-intelligence 
end user,' as defined in Sec.  744.22(f) of the EAR, in the People's 
Republic of China, Russia, or Venezuela; or a country listed in Country 
Groups E:1 or E:2.
    (ii) [Reserved]
* * * * *

PART 744--CONTROL POLICY; END-USER AND END-USE BASED

0
7. The authority citation for part 744 continues to read as follows:

    Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 
U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 
1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 
608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 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 September 18, 2020, 85 FR 59641 (September 22, 2020); Notice of 
November 12, 2020, 85 FR 72897 (November 13, 2020).

0
8. Section 744.1 is amended by revising paragraphs (a)(1) and (b)(2) to 
read as follows:

Sec.  744.1  General provisions.

    (a) * * *
    (1) Introduction. In this part, references to the EAR are 
references to 15 CFR chapter VII, subchapter C. This part contains 
prohibitions against exports, reexports, and selected transfers to 
certain end users and end uses as introduced under General Prohibitions 
Five (End use/End users) and Nine (Orders, Terms, and Conditions), 
unless authorized by BIS. Sections 744.2, 744.3, and 744.4 prohibit 
exports, reexports, and transfers (in-country) of items subject to the 
EAR to defined nuclear, missile, and chemical and biological weapons 
proliferation activities. Section 744.5 prohibits exports, reexports, 
and transfers (in-country) of items subject to the EAR to defined 
nuclear maritime end-uses. Consistent with General Prohibition Seven 
(Support of Proliferation Activities and certain Military-Intelligence 
End Uses and End Users (``U.S. person'' activities)), Sec.  744.6 
prohibits specific activities by U.S. persons in support of certain 
nuclear, missile, chemical and biological weapons end uses, and whole 
plants for chemical weapons precursors, as well as certain military-
intelligence end uses and military-intelligence end users. Section 
744.7 prohibits exports and reexports of certain items for certain 
aircraft and vessels. Section 744.8 prohibits exports and reexports 
without authorization to certain parties who have been designated as 
proliferators of weapons of mass destruction or as supporters of such 
proliferators pursuant to Executive Order 13382. Section 744.9 sets 
forth restrictions on exports, reexports, and transfers (in-country) of 
certain cameras, systems, or related components. Section 744.10 
prohibits exports and reexports of any item subject to the EAR to 
Russian entities, included in supplement no. 4 of this part. Section 
744.11 imposes license requirements, to the extent specified in 
supplement no. 4 to this part on entities listed in supplement no. 4 to 
this part for activities contrary to the national security or foreign 
policy interests of the United States. Sections 744.12, 744.13, and 
744.14 prohibit exports and reexports of any item subject to the EAR to 
persons designated as Specially Designated Global Terrorists, Specially 
Designated Terrorists, or Foreign Terrorist Organizations, 
respectively. Section 744.15 sets forth the conditions for exports, 
reexports, and transfers (in-country) to persons listed on the 
Unverified List (UVL) in supplement no. 6 to this part, the criteria 
for revising the UVL, as well as procedures for requesting removal or 
modification of a listing on the UVL. Section 744.16 sets forth the 
license requirements, policies and procedures for the Entity List. 
Section 744.17 sets forth restrictions on exports, reexports, and 
transfers (in-country) of microprocessors and associated ``software'' 
and ``technology'' for military end uses and to military end users. 
Section 744.18 sets forth restrictions on exports, reexports, and 
transfers to persons designated in or pursuant to Executive Order 
13315. Section 744.19 sets forth BIS's licensing

[[Page 4871]]

policy for applications for exports or reexports when a party to the 
transaction is an entity that has been sanctioned pursuant to any of 
three specified statutes that require certain license applications to 
be denied. Section 744.20 requires a license, to the extent specified 
in supplement no. 4 to this part, for exports and reexports of items 
subject to the EAR destined to certain sanctioned entities listed in 
supplement no. 4 to this part. In addition, these sections include 
license review standards for export license applications submitted as 
required by these sections. It should also be noted that part 764 of 
the EAR prohibits exports, reexports and certain transfers of items 
subject to the EAR to denied parties. Section 744.21 imposes 
restrictions for exports, reexports and transfers (in-country) of items 
on the CCL for a military end use or military end user in the People's 
Republic of China (PRC or China), Russia, or Venezuela. Section 744.22 
imposes restrictions on exports, reexports, and transfers (in-country) 
for a military-intelligence end use or military-intelligence end user 
in China, Russia, or Venezuela; or a country listed in Country Groups 
E:1 or E:2 (see supplement no. 1 to part 740 of the EAR).
* * * * *
    (b) * * *
    (2) Determine Applicability. Second, determine whether any of the 
end-use and end-user prohibitions described in this part are applicable 
to your planned export, reexport, shipment, transmission, transfer (in-
country) or other activity. See supplement no. 1 to part 732 for 
guidance. For exports, reexports, shipments, transmissions, or 
transfers (in-country) that are in transit at the time you are informed 
by BIS that a license is required in accordance with Sec. Sec.  
744.2(b), 744.3(b), 744.4(b), 744.6(c), 744.9(b), 744.11(c), 744.17(b), 
744.21(b), or 744.22(b) of the EAR, you may not proceed any further 
with the transaction unless you first obtain a license from BIS (see 
part 748 of the EAR for instructions on how to apply for a license). 
The provisions of Sec.  748.4(d)(2) of the EAR shall not apply to 
license applications submitted pursuant to a notification from BIS that 
occurs while an export, reexport, or transfer (in-country) is in 
transit.

0
9. Section 744.3 is amended by revising paragraphs (a)(1), (a)(2), 
(a)(3), (d)(2)(ii), and (d)(2)(v) to read as follows:

Sec.  744.3   Restrictions on certain rocket systems (including 
ballistic missiles, space launch vehicles and sounding rockets) and 
unmanned aerial vehicles (including cruise missiles, target drones and 
reconnaissance drones) end-uses.

    (a) * * *
    (1) Will be used in the design, ``development,'' ``production,'' 
operation, installation (including on-site installation), maintenance 
(checking), repair, overhaul, or refurbishing of rocket systems or 
unmanned aerial vehicles capable of a range of at least 300 kilometers 
in or by a country listed in Country Group D:4 of supplement no. 1 to 
part 740 of the EAR.
    (2) Will be used anywhere in the world except by governmental 
programs for nuclear weapons delivery of NPT Nuclear Weapons States 
that are also members of NATO, in the design, ``development,'' 
``production,'' operation, installation (including on-site 
installation), maintenance (checking), repair, overhaul, or 
refurbishing of rocket systems or unmanned aerial vehicles, regardless 
of range capabilities, for the delivery of chemical, biological, or 
nuclear weapons; or
    (3) Will be used in the design, ``development,'' ``production,'' 
operation, installation (including on-site installation), maintenance 
(checking), repair, overhaul, or refurbishing of any rocket systems or 
unmanned aerial vehicles in or by a country listed in Country Group 
D:4, but you are unable to determine:
* * * * *
    (d) * * *
    (2) * * *
    (ii) The significance of the export, reexport or transfer in terms 
of its contribution to the design, ``development,'' ``production,'' 
operation, installation (including on-site installation), maintenance 
(checking), repair, overhaul, or refurbishing of certain rocket systems 
or unmanned aerial vehicles;
* * * * *
    (v) The types of assurances or guarantees against design, 
``development,'' ``production,'' operation, installation (including on-
site installation), maintenance (checking), repair, overhaul, or 
refurbishing for certain rocket system or unmanned aerial vehicle 
delivery purposes that are given in a particular case; and
* * * * *

0
10. Section 744.4 is amended by revising paragraphs (a), (d)(1), 
(d)(2)(ii), and (d)(2)(iv) to read as follows:

Sec.  744.4  Restrictions on certain chemical and biological weapons 
end-uses.

    (a) General prohibition. In addition to the license requirements 
for items specified on the CCL, you may not export, reexport, or 
transfer (in-country) an item subject to the EAR without a license if, 
at the time of export, reexport, or transfer (in-country) you know that 
the item will be used in the design, ``development,'' ``production,'' 
stockpiling, operation, installation (including on-site installation), 
maintenance (checking), repair, overhaul, or refurbishing of chemical 
or biological weapons in or by any country or destination, worldwide; 
or in the design, ``development,'' ``production,'' operation, 
installation (including on-site installation), maintenance (checking), 
repair, overhaul, or refurbishing of a whole plant to make chemical 
weapons precursors specified in ECCN 1C350 in or by countries other 
than those listed in Country Group A:3 (Australia Group) (see 
supplement no. 1 to part 740 of the EAR).
* * * * *
    (d) * * *
    (1) Applications to export, reexport, or transfer (in-country) 
items subject to this section will be considered on a case-by-case 
basis to determine whether the export, reexport, or transfer (in-
country) would make a material contribution to the design, 
``development,'' ``production,'' stockpiling, operation, installation 
(including on-site installation), maintenance (checking), repair, 
overhaul, or refurbishing of chemical or biological weapons. When an 
export, reexport, or transfer (in-country) is deemed to make such a 
contribution, the license will be denied.
    (2) * * *
    (ii) The significance of the export, reexport, or transfer in terms 
of its contribution to the design, ``development,'' ``production,'' 
stockpiling, operation, installation (including on-site installation), 
maintenance (checking), repair, overhaul, or refurbishing of chemical 
or biological weapons;
* * * * *
    (iv) The types of assurances or guarantees against the design, 
``development,'' ``production,'' stockpiling, operation, installation 
(including on-site installation), maintenance (checking), repair, 
overhaul, or refurbishing of chemical or biological weapons; and
* * * * *

0
11. Section 744.6 is revised to read as follows:

[[Page 4872]]

Sec.  744.6  Restrictions on specific activities of ``U.S. persons.''

    (a) Scope. The general prohibitions in this section apply only to 
the extent that the underlying activities are not subject to a license 
requirement or general prohibition administered by another federal 
department or agency, see, for example, Assistance to Foreign Atomic 
Energy Activities regulations (10 CFR part 810), administered by the 
Department of Energy; International Traffic in Arms Regulations (ITAR) 
(22 CFR parts 120 through 130), administered by the Department of 
State; and certain sanctions regulations (to include, but not limited 
to, 31 CFR parts 500 through 599), administered by the Department of 
the Treasury. Accordingly, ``U.S. persons'' are required to seek a 
license from BIS only for the activities described in this section that 
are not subject to a license requirement or general prohibition 
administered by the Department of Energy, Department of State, 
Department of the Treasury, or other federal department or agency. The 
issuance of a license by BIS, or any other federal department or 
agency, does not authorize ``U.S. persons'' to engage in any activity 
that is otherwise prohibited by law, including criminal statutes.
    (b) General prohibitions. No ``U.S. person'' may, without a license 
from BIS, `support':
    (1) The design, ``development,'' ``production,'' operation, 
installation (including on-site installation), maintenance (checking), 
repair, overhaul, or refurbishing of nuclear explosive devices in or by 
any country not listed in supplement no. 3 to this part;
    (2) The design, ``development,'' ``production,'' operation, 
installation (including on-site installation), maintenance (checking), 
repair, overhaul, or refurbishing of ``missiles'' in or by a country 
listed in Country Groups D:4 or E:2;
    (3) The design, ``development,'' ``production,'' operation, 
installation (including on-site installation), maintenance (checking), 
repair, overhaul, or refurbishing of chemical or biological weapons in 
or by any country or destination worldwide;
    (4) The design, ``development,'' ``production,'' operation, 
installation (including on-site installation), maintenance (checking), 
repair, overhaul, refurbishing, shipment, or transfer (in-country) of a 
whole plant to make chemical weapons precursors identified in ECCN 
1C350, in or by countries other than those listed in Country Group A:3 
(Australia Group); or
    (5) A `military-intelligence end use' or a `military-intelligence 
end user,' as defined in Sec.  744.22(f) of the EAR, in the People's 
Republic of China, Russia, or Venezuela; or a country listed in Country 
Groups E:1 or E:2.
    (b)(6) `Support' means:
    (i) Shipping or transmitting from one foreign country to another 
foreign country any item not subject to the EAR you know will be used 
in or by any of the end uses or end users described in paragraphs 
(b)(1) through (5) of this section, including the sending or taking of 
such item to or from foreign countries in any manner;
    (ii) Transferring (in-country) any item not subject to the EAR you 
know will be used in or by any of the end uses or end users described 
in paragraphs (b)(1) through (5) of this section;
    (iii) Facilitating such shipment, transmission, or transfer (in-
country); or
    (iv) Performing any contract, service, or employment you know may 
assist or benefit any of the end uses or end users described in 
paragraphs (b)(1) through (5) of this section, including, but not 
limited to: Ordering, buying, removing, concealing, storing, using, 
selling, loaning, disposing, servicing, financing, transporting, 
freight forwarding, or conducting negotiations in furtherance of.
    (c) Additional prohibitions on ``U.S. persons'' informed by BIS. 
BIS may inform ``U.S. persons,'' 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 because an activity could involve the types of 
`support' (as defined in paragraph (b)(6) of this section) to the end 
uses or end users described in paragraphs (b)(1) through (5) of this 
section. Specific notice is to be given only by, or at the direction 
of, the Deputy Assistant Secretary for Export Administration. When such 
notice is provided orally, it will be followed by a written notice 
within two working days signed by the Deputy Assistant Secretary for 
Export Administration. However, the absence of any such notification 
does not excuse the ``U.S. person'' from compliance with the license 
requirements of paragraph (b) of this section.
    (d) Exceptions. (1) No License Exceptions apply to the prohibitions 
described in paragraphs (b)(1) through (4) of this section.
    (2) Notwithstanding the prohibitions in paragraph (b)(5) of this 
section, U.S. persons who are employees of a department or agency of 
the U.S. Government may `support' a `military-intelligence end use' or 
a `military-intelligence end user,' as described in paragraph (b)(5), 
if the `support' is provided in the performance of official duties in 
furtherance of a U.S. Government program that is authorized by law and 
subject to control by the President by other means. This paragraph does 
not authorize a department or agency of the U.S. Government to provide 
`support' that is otherwise prohibited by other administrative 
provisions or by statute. `Contractor support personnel' of a 
department or agency of the U.S. Government are eligible for this 
authorization when in the performance of their duties pursuant to the 
applicable contract or other official duties. `Contractor support 
personnel' for the purposes of this paragraph (d)(2) has the same 
meaning given to that term in Sec.  740.11(b)(2)(ii) of the EAR. This 
authorization is not available when a department or agency of the U.S. 
Government acts as an agent on behalf of a non-U.S. Government person.
    (e) License review standards. (1) Applications for a U.S. person to 
`support' (as defined in paragraph (b)(6) of this section) any of the 
end uses or end users described in paragraphs (b)(1) through (4) of 
this section will be denied if such support would make a material 
contribution to the end uses and end users described in paragraphs 
(b)(1) through (4) of this section.
    (2) Applications for a U.S. person to `support' (as defined in 
paragraph (b)(6) of this section) a `military-intelligence end use' or 
a `military-intelligence end user' as described in paragraph (b)(5) of 
this section will be reviewed with a presumption of denial.

0
12. Section 744.11 is amended by adding a new paragraph (c) to read as 
follows:

Sec.  744.11   License requirements that apply to entities acting 
contrary to the national security or foreign policy interests of the 
United States.

* * * * *
    (c) Additional prohibition on persons informed by BIS. BIS may 
inform persons, either individually by specific notice or through 
amendment to the EAR, that a license is required for:
    (1) A specific export, reexport, or transfer (in-country) because 
there is an unacceptable risk that the export, reexport, or transfer 
(in-country) is intended to circumvent the license requirement imposed 
on an entity listed in supplement no. 4 to this part; or
    (2) The export, reexport, or transfer (in-country) of specified 
items to a certain party because there is an unacceptable risk that the 
party is acting

[[Page 4873]]

as an agent, front, or shell company for an entity listed in supplement 
no. 4 to this part, or is otherwise assisting that listed entity in 
circumventing the license requirement set forth in that entity's entry 
in supplement no. 4 to this part.

0
13. Section 744.21 is amended by revising paragraph (g) to read as 
follows:

Sec.  744.21  Restrictions on certain `military end use' or `military 
end user' in the People's Republic of China, Russia, or Venezuela.

* * * * *
    (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 (excluding 
those described in Sec.  744.22(f)(2) of the EAR), or any person or 
entity whose actions or functions are intended to support `military end 
uses' as defined in paragraph (f) of this section.
* * * * *

0
14. Section 744.22 is added to read as follows:

Sec.  744.22  Restrictions on exports, reexports, and transfers (in-
country) to certain military-intelligence end uses or end users.

    (a) 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 
without a license from BIS if, at the time of the export, reexport, or 
transfer (in-country), you have ``knowledge'' that the item is 
intended, entirely or in part, for a `military-intelligence end use' or 
a `military-intelligence end user' in the People's Republic of China, 
Russia, or Venezuela; or a country listed in Country Groups E:1 or E:2 
(see supplement no. 1 to part 740 of the EAR).
    (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 
subject to the EAR because there is an unacceptable risk of use in, or 
diversion to, a `military-intelligence end use' or a `military-
intelligence end user' in the People's Republic of China, Russia, or 
Venezuela; or a country listed in Country Group E:1 or E:2 (see 
supplement no. 1 to part 740 of the EAR).
    (c) License exception. Notwithstanding 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 provision of 
License Exception GOV set forth in Sec.  740.11(b)(2)(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.  
744.22 of the EAR (Restrictions on exports, reexports, and transfers 
(in-country) to certain military-intelligence end uses or end users). 
In addition, either in the additional information block of the 
application or in an attachment to the application, you must include 
all known information concerning the military-intelligence end use(s) 
or end user(s) 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 policy. Applications to export, reexport, or 
transfer (in-country) items requiring a license pursuant to paragraphs 
(a) or (b) of this section will be reviewed with a presumption of 
denial.
    (f) Definitions. (1) `Military-intelligence end use' means the 
design, ``development,'' ``production,'' use, operation, installation 
(including on-site installation), maintenance (checking), repair, 
overhaul, or refurbishing of, or incorporation into, items described on 
the U.S. Munitions List (USML) (22 CFR part 121, International Traffic 
in Arms Regulations), or classified under ECCNs ending in ``A018'' or 
under ``600 series'' ECCNs, which are intended to support the actions 
or functions of a `military-intelligence end user,' as defined in this 
section.
    (2) `Military-intelligence end user' means any intelligence or 
reconnaissance organization of the armed services (army, navy, marine, 
air force, or coast guard); or national guard. For license requirements 
applicable to other government intelligence or reconnaissance 
organizations in China, Russia, or Venezuela, see Sec.  744.21 of the 
EAR. Military-intelligence end users subject to the license 
requirements set forth in this Sec.  744.22 include, but are not 
limited to, the following:
    (i) Cuba. Directorate of Military Intelligence (DIM) and 
Directorate of Military Counterintelligence (CIM).
    (ii) China, People's Republic of. Intelligence Bureau of the Joint 
Staff Department.
    (iii) Iran. Islamic Revolutionary Guard Corps Intelligence 
Organization (IRGC-IO) and Artesh Directorate for Intelligence (J2).
    (iv) Korea, North. Reconnaissance General Bureau (RGB).
    (v) Russia. Main Intelligence Directorate (GRU).
    (vi) Syria. Military Intelligence Service.
    (vii) Venezuela. General Directorate of Military 
Counterintelligence (DGCIM).

Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2021-00977 Filed 1-14-21; 8:45 am]
BILLING CODE 3510-33-P