[Federal Register Volume 74, Number 172 (Tuesday, September 8, 2009)]
[Rules and Regulations]
[Pages 45990-45993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-21367]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Part 744
[Docket No. 090126062-91139-01]
RIN 0694-AE54
Revisions to Certain End-User Controls Under the Export
Administration Regulations; Clarification Regarding License
Requirements for Transfers (in-country) to Persons Listed on the Entity
List
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Final rule.
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SUMMARY: The Bureau of Industry and Security (BIS) is amending the
Export Administration Regulations (EAR) to make revisions to three
sections that are used by the United States Government as the basis for
placing persons onto the Entity List. These three sections specified
license requirements for exports and reexports to persons listed on the
Entity List, however; the sections were silent regarding whether or not
the scope of the licensing requirements included transfers (in-
country). This rule adds transfers (in-country) to the scope of the
license requirements under each of the three sections. As a result of
adding transfers (in-country) to these three end-user controls, all of
the end-use and end-user controls that are used as a regulatory basis
for placing persons on the Entity List now specify that the scope of
the license requirements includes exports, reexports, and transfers
(in-country).
The Entity List provides notice to the public that certain exports,
reexports, and transfers (in-country) to parties identified on the
Entity List require a license from the Bureau of Industry and Security
(BIS) and that availability of License Exceptions in such transactions
is limited.
DATES: Effective Date: This rule is effective September 8, 2009.
Although there is no formal comment period, public comments on this
regulation are welcome on a continuing basis.
ADDRESSES: You may submit comments, identified by RIN 0694-AE54, by any
of the following methods:
E-mail: [email protected]. Include ``RIN 0694-AE54'' 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: Timothy Mooney, U.S. Department of
Commerce, Bureau of Industry and Security, Regulatory Policy Division,
14th St. & Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230,
Attn: RIN 0694-AE54.
Send comments regarding the collection of information associated
with this rule, including suggestions for reducing the burden, to
Jasmeet K. Seehra, Office of Management and Budget (OMB), by e-mail to
[email protected] or by fax to (202) 395-7285; and to the
Regulatory Policy Division, Bureau of Industry and Security, Department
of Commerce, 14th St. & Pennsylvania Avenue, NW., Room 2705,
Washington, DC 20230. Comments on this collection of information should
be submitted separately from comments on the final rule (i.e., RIN
0694-AE54)--all comments on the latter should be submitted by one of
the three methods outlined above.
FOR FURTHER INFORMATION CONTACT: Elizabeth Scott Sangine, End-User
Review Committee, Office of the Assistant Secretary, Export
Administration, Bureau of Industry and Security, Department of
Commerce, Phone: (202) 482-3343, Fax: (202) 482-3911, E-mail:
[email protected].
SUPPLEMENTARY INFORMATION:
Background
The Entity List provides notice to the public that certain exports,
reexports, and transfers (in-country) to parties identified on the
Entity List require a license from the Bureau of Industry and Security
(BIS) and that availability of license exceptions in such transactions
is limited. Persons are placed on the Entity List on the basis of
certain sections of part 744 (Control Policy: End-User and End-Use
Based) of the EAR.
The End-User Review Committee (ERC), composed of representatives of
the Departments of Commerce (Chair), State, Defense, Energy and, where
appropriate, the Treasury, makes all decisions regarding additions to,
removals from or changes to the Entity
[[Page 45991]]
List. The ERC makes all decisions to add an entry to the Entity List by
majority vote and all decisions to remove or modify an entry by
unanimous vote.
There are six sections in part 744 of the EAR that provide the
regulatory basis for putting persons on the Entity List: Sec. Sec.
744.2, 744.3, 744.4, 744.10, 744.11, and 744.20. Sections 744.2, 744.3,
and 744.4 are foreign policy end-use controls under the EAR that
prohibit transactions destined for certain nuclear, missile or chemical
and biological end-uses. Sections 744.10, 744.11, and 744.20 are
foreign policy end-user controls that prohibit transactions destined
for certain individuals. Prior to the publication of this rule, the
three end-user controls each specified that they applied to exports and
reexports, but were silent on whether these end-user controls also
applied to transfers (in-country). The United States Government intends
the license requirements for Sec. Sec. 744.10, 744.11, and 744.20 to
apply to transfers (in-country) as well as to exports and reexports.
Therefore, this rule extends the scope of these three sections to
include transfers (in-country).
The rationale for the extension of this license requirement to
include transfers (in-country) is that the United States Government's
objective in placing a person on the Entity List on the basis of one of
the end-user controls in part 744 of the EAR is to have an opportunity
to review any transaction involving items subject to the EAR prior to
shipment or transfer (in-country) to a listed person. Regardless of the
form of the transaction (export, reexport, or transfer (in-country)),
the United States Government believes it is important to review all
transactions involving persons listed on the Entity List prior to the
initiation of a transaction with a listed person and/or receipt by the
listed person of an item in a transaction.
In publishing this rule, the United States Government is achieving
the export control objective of allowing the United States Government
to have prior review of any transaction involving items subject to the
EAR and persons included on the Entity List. This prior review is
important because the United States Government does not want these end-
users of concern (i.e., persons listed on the Entity List) to receive
items subject to the EAR that might allow them to continue their
activities of concern without specific United States Government
authorization.
This rule also clarifies that prior to the publication of this
rule, persons added to the Entity List on the basis of their
involvement in the activities described in sections 744.2, 744.3 and
744.4, as described above, were subject to licensing requirements
applicable to exports, reexports, and transfers (in-country).
This rule makes the following revisions to the Export
Administration Regulations:
In Section 744.10 (Restrictions on Certain Entities in Russia),
this rule expands the scope of this end-user control by adding transfer
(in-country) to the license requirements of this end-user control. With
the publication of this rule, the license requirements for this end-
user control apply to exports, reexports, and transfers (in-country).
Specifically, this rule revises the second sentence of paragraph (a) to
specify that a license is required, to the extent specified on the
Entity List, to transfer (in-country) any item subject to the EAR to
such entities (i.e., persons added to the Entity List on the basis of
Sec. 744.10). This rule also revises paragraph (c) to specify that
license applications to transfer (in-country) items subject to the EAR
to these entities will be reviewed with a presumption of denial.
In Section 744.11 (License Requirements that Apply to Entities
Acting Contrary to the National Security or Foreign Policy Interests of
the United States), this rule expands the scope of this end-user
control by adding transfer (in-country) to the license requirements of
this end-user control. With the publication of this rule, the license
requirements for this end-user control apply to exports, reexports, and
transfers (in-country). To broaden the scope of this end-user control,
this rule makes three changes to this section. First, this rule revises
the first sentence of the introductory text of this section to specify
that transfers (in-country) are within the scope of the foreign policy
controls that BIS may impose under this section. Second, this rule
revises the first sentence of paragraph (a) to specify that for the
license requirements of this section, a license is required, to the
extent specified on the Entity List, to transfer (in-country) any item
subject to the EAR to an entity that is listed on the Entity List in an
entry that contains a reference to this section (i.e., persons added to
the Entity List on the basis of Sec. 744.11). Third, under paragraph
(b)(5), this rule adds transfer (in-country) to the scope of this
illustrative example provided for the criteria used for revising the
Entity List in paragraph (b) of this section.
In Section 744.20 (License Requirements that Apply to Certain
Sanctioned Entities), this rule expands the scope of this end-user
control by adding transfer (in-country) to the license requirements of
this end-user control. With the publication of this rule, the license
requirements for this end-user control apply to exports, reexports and
transfers (in-country). Specifically, this rule revises the
introductory text of paragraph (a) to specify that a license is
required, to the extent specified on the Entity List, to transfer (in-
country) any item subject to the EAR to such entities (i.e., persons
added to the Entity List on the basis of Sec. 744.20). This rule also
revises paragraph (b) to add transfer (in-country) to the general
restriction on using license exceptions in paragraph (b) of this
section. Lastly, this rule revises paragraph (c) to specify that
license applications to transfer (in-country) items subject to the EAR
to these entities will be reviewed with a presumption of denial.
In Supplement No. 4 to part 744 (The Entity List) of the EAR, this
rule revises the introductory text of the Entity List to specify that
the license requirements for these entities includes exports, reexports
and transfers (in-country), unless otherwise stated. This clarification
is needed because now all of the sections of part 744 that provide the
regulatory basis for adding a person to the Entity List include license
requirements for exports, reexports and transfers (in-country), unless
otherwise specifically stated in an entry on the Entity List for a
listed person.
Consistent with the provisions of section 6 of the Export
Administration Act of 1979, as amended (EAA), a foreign policy report
was submitted to Congress on August 11, 2009, notifying Congress of the
imposition of foreign policy-based licensing requirements reflected in
this rule.
Although the Export Administration Act expired on August 20, 2001,
the President, through Executive Order 13222 of August 17, 2001, 3 CFR,
2001 Comp., p. 783 (2002), as extended by the Notice of August 13,
2009, 74 FR 41325 (August 14, 2009), has continued the Export
Administration Regulations in effect under the International Emergency
Economic Powers Act.
Rulemaking Requirements
1. This rule has been determined to be not significant for purposes
of Executive Order 12866.
2. Notwithstanding any other provision of law, no person is
required to respond to nor be subject to a penalty for failure to
comply with a collection of information, subject to the requirements of
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA),
unless that collection of information displays a currently valid Office
of Management and Budget
[[Page 45992]]
(OMB) Control Number. This regulation involves collections previously
approved by the OMB under control numbers 0694-0088, ``Multi-Purpose
Application,'' which carries a burden hour estimate of 58 minutes to
prepare and submit form BIS-748. Miscellaneous and recordkeeping
activities account for 12 minutes per submission. Total burden hours
associated with the Paperwork Reduction Act and Office of Management
and Budget control number 0694-0088 are expected to increase slightly
as a result of this rule.
3. This rule does not contain policies with Federalism implications
as that term is defined in Executive Order 13132.
4. The provisions of the Administrative Procedure Act (5 U.S.C.
553) requiring notice of proposed rulemaking, the opportunity for
public participation, and a delay in effective date, are inapplicable
because this regulation involves a military or foreign affairs function
of the United States. (See 5 U.S.C. 553(a)(1)). Further, no other law
requires that a notice of proposed rulemaking and an opportunity for
public comment be given for this rule. Because a notice of proposed
rulemaking and an opportunity for public comment are not required to be
given for this rule by 5 U.S.C. 553, or by any other law, the
analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601
et seq., are not applicable.
List of Subjects in 15 CFR Part 744
Exports, Reporting and recordkeeping requirements, Terrorism.
0
Accordingly, part 744 of the Export Administration Regulations (15 CFR
parts 730-774) is amended as follows:
PART 744--[AMENDED]
0
1. The authority citation for 15 CFR part 744 is revised to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22
U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179;
E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59
FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 12947, 60 FR 5079, 3 CFR,
1995 Comp., p. 356; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p.
228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222,
66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3
CFR, 2001 Comp., p. 786; Notice of August 13, 2009, 74 FR 41325
(August 14, 2009); Notice of November 10, 2008, 73 FR 67097
(November 12, 2008).
0
2. Section 744.10 is amended:
0
a. By revising the second sentence of paragraph (a); and
0
b. By revising paragraph (c), to read as follows:
Sec. 744.10 Restrictions on certain entities in Russia.
(a) * * * A license is required, to the extent specified on the
Entity List, to export, reexport, or transfer (in-country) any item
subject to the EAR to such entities.
* * * * *
(c) License review standard. Applications to export, reexport, or
transfer (in-country) items subject to the EAR to these entities will
be reviewed with a presumption of denial.
0
3. Section 744.11 is amended:
0
a. By revising the first sentence of the introductory text of the
section;
0
b. By revising the first sentence of paragraph (a); and
0
c. By revising paragraph (b)(5), 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.
BIS may impose foreign policy export, reexport, and transfer (in-
country) license requirements, limitations on availability of license
exceptions, and set license application review policy based on the
criteria in this section. * * *
(a) * * *A license is required, to the extent specified on the
Entity List, to export, reexport, or transfer (in-country) any item
subject to the EAR to an entity that is listed on the Entity List in an
entry that contains a reference to this section. * * *
(b) * * *
(5) Engaging in conduct that poses a risk of violating the EAR when
such conduct raises sufficient concern that the End-User Review
committee believes that prior review of exports, reexports, or
transfers (in-country) involving the party and the possible imposition
of license conditions or license denial enhances BIS's ability to
prevent violations of the EAR.
0
4. Section 744.20 is amended:
0
a. By revising the first sentence of the introductory text of the
section;
0
b. By revising the second sentence of paragraph (a); and
0
c. By revising paragraphs (b) and (c), to read as follows:
Sec. 744.20 License requirements that apply to certain sanctioned
entities.
BIS may impose, as foreign policy controls, export, reexport, and
transfer (in-country) license requirements and set licensing policy
with respect to certain entities that have been sanctioned by the State
Department. * * *
(a) * * * A license is required, to the extent specified on the
Entity List, to export, reexport, or transfer (in-country) any item to
such entities.
(b) License Exceptions. No license exception may be used to export,
reexport, or transfer (in-country) to such entities unless specifically
authorized on the Entity List.
(c) Licensing policy. Applications to export, reexport, or transfer
(in-country) to such entities will be reviewed according to the
licensing policy set forth on the Entity List.
0
5. Supplement No. 4 to part 744 is amended by revising the introductory
text, to read as follows:
Supplement No. 4 to Part 744--Entity List
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License License review Federal Register
Country Entity requirement policy citation
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This Supplement lists certain entities subject to license requirements for specified items under this part 744
of the EAR. License requirements for these entities include exports, reexports, and transfers (in-country)
unless otherwise stated. This list of entities is revised and updated on a periodic basis in this Supplement by
adding new or amended notifications and deleting notifications no longer in effect.
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[[Page 45993]]
Dated: August 31, 2009.
Matthew S. Borman,
Acting Assistant Secretary for Export Administration.
[FR Doc. E9-21367 Filed 9-4-09; 8:45 am]
BILLING CODE 3510-33-P