[Federal Register: May 19, 2008 (Volume 73, Number 97)]
[Notices]
[Page 28795-28797]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19my08-24]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
[Docket No. 080512652-8653-01]
Request for Public Comments on Deemed Export Advisory Committee
Recommendations: Narrowing the Scope of Technologies on the Commerce
Control List Subject to Deemed Export Licensing Requirements and
Implementing a More Comprehensive Set of Criteria for Assessing
Probable Country Affiliation for Foreign Nationals
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Notice of Inquiry.
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SUMMARY: The Bureau of Industry and Security (BIS) is publishing a
notice of inquiry in order to elicit comments regarding two specific
recommendations made by the Deemed Export Advisory Committee (DEAC)
with respect to BIS's deemed export licensing policy. BIS is requesting
comments on whether the scope of technologies on the Commerce Control
List that are subject to deemed export licensing requirements should be
narrowed, and if so, which technologies should be subject to deemed
export licensing requirements. Additionally, BIS is seeking comments on
whether a more comprehensive set of criteria should be used to assess
country affiliation for foreign nationals with respect to deemed
exports.
DATES: Comments must be received no later August 18, 2008.
FOR FURTHER INFORMATION CONTACT: Alex Lopes, Director, Deemed Exports
and Electronics Division, 202-482-4875, alopes@bis.doc.gov. Ilona
Shtrom, Senior Export Policy Analyst, Deemed Exports and Electronics
Division, 202-482-3235, ishtrom@bis.doc.gov. The DEAC report may be
accessed at http://tac.bis.doc.gov/2007/deacreport.pdf.
ADDRESSES: You may submit comments, identified by ``DEAC Report
comments,'' by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: rpd2@bis.doc.gov. Include ``DEAC Report comments''
in the subject line of the message.
[[Page 28796]]
Fax: 202-482-3355
Hand Delivery/Courier: Steven Emme, U.S. Department of
Commerce, Bureau of Industry and Security, Regulatory Policy Division,
14th & Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230, ATTN:
DEAC Report comments.
SUPPLEMENTARY INFORMATION:
Background
Under the Export Administration Regulations (EAR), 15 CFR parts
730-774 (2008), which implement the Export Administration Act of 1979,
as amended, 50 U.S.C. app. 2401-2420 (2000), and the International
Emergency Economic Powers Act (50 U.S.C. 1701-1706 (2000)), the Bureau
of Industry and Security (BIS) administers licensing for deemed
exports, which are the ``release of technology or source code subject
to the EAR to a foreign national'' (Sec. 734.2(b)(ii) of the EAR).
When technology or source code is released to a foreign national, it is
deemed to be an export to the home country or home countries of the
foreign national. For purposes of the EAR's deemed export rule, foreign
nationals do not include U.S. citizens, U.S. permanent residents, and
protected individuals under the Immigration and Naturalization Act ((8
U.S.C. 1324b(a)(3)).
To determine a foreign national's home country for purposes of
deemed export licensing, BIS uses a foreign national's most recently
established legal permanent residency or most recently established
citizenship. For example, in the deemed exports context, an Iranian
foreign national who establishes legal permanent residency in Canada
and subsequently immigrates to the United States would be treated as a
Canadian. Similarly, an Iranian foreign national who establishes
citizenship in the United Kingdom (U.K.) and subsequently immigrates to
the United States would be treated as a U.K. citizen for deemed export
licensing purposes. In implementing this policy, BIS relies on
exporters to self-determine a foreign national's home country with
additional guidance provided on the BIS Web site at http://
www.bis.doc.gov.
The existing guidance provided on the BIS Web site emphasizes that
there will be deemed export licensing scenarios where an exporter will
have difficulty determining where a foreign national's ties lie. Some
of these difficulties may include the following scenarios: prior or
current employment at a prohibited end-user (such as employment at an
entity on the Entity List in Supplement No. 4 to part 744), expiration
of the foreign national's permanent residency status while that foreign
national continues to receive technology or source code subject to
deemed export licensing requirements, and the possibility of a foreign
national not being able to comply with a country's permanent residency
requirements. In these instances, exporters are advised to submit a
license application or to seek guidance from BIS before proceeding with
the release of controlled technology or source code subject to the EAR
to the foreign national.
The issue of home country determinations was highlighted in a
report issued by the Office of the Inspector General (OIG) of the
Department of Commerce in March of 2004. The OIG report concluded that
BIS policies could enable foreign nationals from countries and entities
of concern to access controlled technology and source code without a
license. Among its findings, the OIG recommended that the foreign
national's country of birth should be used to determine deemed export
license requirements rather than the foreign national's most recent
citizenship or legal permanent residency.
In response to this and other recommendations made by the OIG, BIS
published an advance notice of proposed rulemaking on March 28, 2005
(70 FR 15607), seeking comments on how the OIG's recommendations would
affect industry, the academic community, and government agencies
involved in research. On May 22, 2006, BIS published a notice (71 FR
29301) that announced the creation of the Deemed Export Advisory
Committee (DEAC), a federal advisory committee established under the
terms of the Federal Advisory Committee Act (FACA), 5 U.S.C., app. 2
(2005), the EAA, and IEEPA to provide recommendations to the Secretary
on BIS's deemed export policy. The DEAC was formed to help ensure that
the deemed export licensing policy most effectively protects U.S.
national security while ensuring U.S. technological innovation.
After reviewing comments submitted in response to the advance
notice of proposed rulemaking, BIS published a withdrawal of advance
notice of proposed rulemaking on May 31, 2006 (71 FR 30840). In that
notice, BIS stated that it would maintain the current policy of using a
foreign national's most recent country of citizenship or legal
permanent residency when determining licensing requirements. BIS
reasoned that a declarative assertion of affiliation was more
significant than the geographical circumstances of birth when
determining the home country of the foreign national.
Comments submitted in response to the advanced notice of proposed
rulemaking were reviewed by the DEAC. Following six public meetings
held in Washington, DC and in cities around the country at which the
committee heard from interested stakeholders in academia, industry, and
government, the DEAC submitted its final report, ``The Deemed Export
Rule in the Era of Globalization,'' to the Secretary of Commerce on
December 20, 2007. The report contained several recommendations to
improve and streamline BIS's deemed export rule. This notice of inquiry
focuses on two of those recommendations.
DEAC Recommendations
Narrowing the Scope of Technologies on the Commerce Control List
Subject to Deemed Export Licensing Requirements and Conducting an
Outside Review of Technologies
Among its recommendations, the DEAC urged that BIS narrow the scope
of technologies on the Commerce Control List (CCL) and involve an
outside panel of experts to conduct an annual ``zero-based'' review of
which technologies should be on the CCL, with an eye toward determining
which technologies should be subject to deemed export licensing
requirements. In its report, the DEAC recommended narrowing the scope
of technologies on the CCL because it believed that BIS should
concentrate on those technologies having the greatest national security
concerns and should eliminate from the CCL those technologies having
little national security concerns. By building higher walls around
fewer technologies, the DEAC believed that BIS could more effectively
protect U.S. national security interests while maintaining U.S.
innovation.
Partly in response to the DEAC's recommendation regarding the scope
of technologies on the CCL, BIS announced the formation of the Emerging
Technologies and Research Advisory Committee (ETRAC), a technical
advisory committee that will be established under the terms of the EAA,
IEEPA, and FACA, and will comprise representatives from research
universities, government research labs, and industry. The ETRAC will
make recommendations to BIS regarding emerging technologies on a
regular basis as well as advise BIS on the conduct of a ``zero-based''
technology review envisioned by the DEAC. A zero-based review means
determining what should
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be controlled without reference to what is currently controlled, rather
than reviewing current controls and identifying what should be
decontrolled. While BIS is already conducting a systematic review of
the CCL to assess what controls should be retained or revised, many
technologies on the CCL are subject to multilateral controls and thus
cannot be changed unilaterally by the United States. However, deemed
export licensing requirements are not multilateral and thus may be
changed by the United States without agreement by other countries.
Therefore, BIS is focusing this recommendation for a zero-based review
only on those technologies that should be subject to deemed export
licensing requirements.
With this notice of inquiry, BIS is seeking comments from the
public on the DEAC's recommendation to narrow the scope of technologies
on the CCL in the specific context of BIS's deemed export licensing
requirements.
Comprehensive Assessment of Foreign National Affiliation
Within the recommended environment of narrowing technologies
subject to deemed export licensing requirements, the DEAC also
recommended that BIS expand its analysis of determining the home
country of the foreign national, for deemed export licensing purposes,
in favor of a more comprehensive assessment of a foreign national's
country of affiliation. Specifically, the DEAC recommended expanding
the determination of national affiliation to include country of birth,
prior countries of residence, current citizenship, and character of
individual's prior and present activities to provide an increased level
of assurance that technology subject to deemed export licensing
requirements would not be diverted to unauthorized end-users or
activities. The DEAC reasoned that using the most recent citizenship or
legal permanent residency may not take into account the actual risk of
diversion of export-controlled technology by the foreign national. For
instance, the DEAC noted that most criminal cases of export control
violations of which it had been made aware involve U.S. citizens and
U.S. legal permanent residents, who are not even subject to deemed
export licensing requirements under current BIS policy. Further, the
DEAC stated that an adequate distinction has not been made for a
foreign national residing in a specific country for the majority of his
or her lifetime. For example, the risk of diversion posed by an
individual recently attaining U.K. citizenship who was born and raised
in Iran may be different from that of a native Iranian who became a
citizen of the U.K. shortly after birth.
BIS intends to consider the DEAC's recommendation of an expanded
set of criteria in determining home country/national affiliation in the
context of the DEAC's other recommendation that BIS narrow the scope of
technologies on the CCL, in the context of deemed exports, to a few
critical technologies. With this notice of inquiry, BIS is seeking
comments on the DEAC's recommendation to expand the criteria for
determining national affiliation of foreign nationals for deemed export
licensing purposes.
Requests for Comments
To assist in developing a response to these two recommendations
made by the DEAC, BIS is interested in comments from the public. BIS
encourages all interested parties to submit comments in response to
this notice of inquiry.
With respect to the first recommendation for an outside, zero-based
review of technologies, BIS is seeking comments on whether technologies
on the CCL that are subject to deemed export licensing requirements
should be narrowed to a few critical technologies (i.e., a narrower set
of technologies than those on the current CCL). If so, BIS would like
comments to address which technologies the commenter believes should be
subject to deemed export licensing requirements and what criteria
should be used to make that determination. Comments providing a
description of the technology as well as the use of the technology
would be particularly helpful. Moreover, comments identifying the
Export Control Classification Number (ECCN) of the technology would aid
BIS in assessing whether the technology would rise to a level
warranting deemed export control under the ``higher walls, fewer
fences'' construct outlined by the DEAC. Comments made in response to
this first DEAC recommendation will also be shared with the ETRAC for
its analysis.
Additionally, BIS is seeking comments with respect to the DEAC
recommendation that a more comprehensive assessment of foreign national
affiliation should be used in the context of making home country
determinations in the deemed export licensing process. BIS is
interested in public comments addressing the issue of making foreign
national affiliation determinations in situations where a foreign
national's ties may be easily established and in situations where it
may be difficult to determine where a foreign national's ties lie (such
as for a foreign national employed at a prohibited entity). Comments
submitted in favor of a more comprehensive assessment will be
particularly helpful if they address what information should be taken
into account for such a comprehensive assessment. Comments submitted in
opposition to a more comprehensive assessment will be particularly
helpful if they suggest what parameter(s) should be used in determining
the home country for foreign nationals.
Parties submitting comments are asked to be as specific as
possible. Comments including detailed statements of support will likely
be more useful than comments that state a position without providing
any support. BIS encourages interested persons who wish to comment to
do so at the earliest possible date. The period for submission of
comments will close August 18, 2008. BIS will consider all comments
received before the close of the comment period in responding to the
DEAC recommendations. Comments received after the end of the comment
period will be considered if possible, but their consideration cannot
be assured. BIS 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. BIS
will return such comments and materials to the persons submitting the
comments and will not consider them in the development of a response.
All public comments on this notice of inquiry must be in writing
(including fax or e-mail) and will be a matter of public record,
available for public inspection and copying. The Office of
Administration, Bureau of Industry and Security, U.S. Department of
Commerce, displays these public comments on BIS's Freedom of
Information Act (FOIA) Web site at http://www.bis.doc.gov/foia. This
office does not maintain a separate public inspection facility. If you
have technical difficulties accessing this Web site, please call BIS's
Office of Administration at (202) 482-0953 for assistance.
Dated: May 14, 2008.
Matthew S. Borman,
Acting Assistant Secretary for Export Administration.
[FR Doc. E8-11169 Filed 5-16-08; 8:45 am]
BILLING CODE 3510-33-P