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The Bureau of Industry and Security (“BIS”) begins a roll out of new regulations on emerging technologies agreed to by Wassenaar member states. Each year, BIS publishes final rules (without the usual notice of proposed rulemaking) of changes to US national security controls. While all of the changes made by Wassenaar in 2018 have not yet been published, on May 23, 2019 BIS has published a final rule on “emerging technologies”.

This rule puts new controls on “emerging technology” items found in the Commerce Control List (“CCL”) Category 3, Category 5 Part II, Category 6 and Category 9. Specifically, this rule adds discrete microwave transistors (a major component of wideband semiconductors), continuity of operation software, post-quantum cryptography, underwater transducers designed to operate as hydrophones, and air-launch platforms.

Breakdown of Changes:

3A001

ECCN 3A001 is amended by adding paragraph b.3.f to control discrete microwave transistors ‘‘rated for operation with a peak saturated power output greater than 5 W (37.0 dBm) at all frequencies exceeding 8.5 GHz up to and including 31.8 GHz’’. While older devices specified limited frequency ranges, new microwave transistors cover wider frequency bands at higher power levels, opening up new possibilities for radar and other transmitting applications. Note 1 that appears after paragraph b.3.f is revised, so that it does not apply to new paragraph b.3.f, meaning that the control status of a transistor in b.3.f is not determined by the lowest peak saturated power output control threshold.

These discrete microwave transistors are subject to National Security (NS Column 1), Regional Stability (RS Column 1) and Anti-terrorism (AT Column 1) license requirements, except those being exported or reexported for use in civil telecommunications applications, as indicated on the Commerce Country Chart in Supplement No. 1 to part 738 of the EAR. List-based license exceptions (Limited Value Shipment (LVS) and Group B Shipments (GBS) and Strategic Trade Authorization (STA), see part 740 of the EAR), are available for those discrete microwave transistors that are being exported or reexported for use in civil telecommunications applications that meet the criteria of the license exception and where none of the license exception restrictions of § 740.2 apply. Transaction-based license exceptions may be available depending on the transaction meeting the license exception criteria; see part 740 of the EAR.

3D005

ECCN 3D005 is added to the CCL in order to control software that ensures continuity of operation when electronics are exposed to Electromagnetic Pulse (EMP) or Electrostatic Discharge (ESD). The software is controlled for national security and anti-terrorism reasons and a license is required worldwide, except for Canada, under national security (NS Column 1) and Anti-terrorism (AT Column 1) license requirements as indicated on the Commerce Country Chart, Supplement no. 1 to part 738 of the EAR. No list-based license exceptions are applicable; however, License Exception Strategic Trade Authorization (STA) is available for countries listed in Country Group A:5, see Supplement No. 1 to part 740 of the EAR.

Research and development activities related to integrated circuit software that provides electromagnetic pulse (EMP) protective function to electronic devices is currently underway, and it is predicted that these products will be in the commercial marketplace in a few years. Because continuity of operation software would also be beneficial to military applications, it is being added to the CCL in this final rule.

5A002

ECCN 5A002 is amended in order to add a control on certain types of postquantum cryptographic algorithms. This rule adds paragraph 2.c of the Technical Notes that follow paragraph 5A002.a.4 to include a new paragraph addressing certain post-quantum asymmetric algorithms. This rule also revises paragraphs 5A002.a, a.4, paragraph 2 of the Technical Notes that follow paragraph 5A002.a.4, paragraph a.1.a.1.b in Note 2 to 5A002.a, and paragraph (4)(a) of Related Controls to 5A002, to replace the term ‘in excess of 56 bits of symmetric key length, or equivalent’ with ‘described security algorithm’. These changes are being made for technical accuracy since methods for establishing equivalence between modern classical and postquantum cryptography (PQC) are not settled. In addition, this rule revises the Nota Bene to Note 3 (the Cryptography Note) to specify that items that include post-quantum asymmetric algorithms described by paragraph 2.c of the Technical Notes are subject to the classification or self-classification reporting requirements for mass market items.

5A002.a is subject to national security (NS Column 1), anti-terrorism (AT Column 1) and encryption items (EI) license requirements, as indicated on the Commerce Country Chart in Supplement no. 1 to part 738 of the EAR. Because this new control is added to 5A002.a with corresponding applicability to EI-controlled ECCNs 5D002.a.1, 5D002.c.1 and 5E002.a, BIS has determined that no changes to License Exception ENC are required to accommodate this change. Items with post-quantum algorithms described by the technical note are treated the same under License Exception ENC as products using classical algorithms.

6A001

ECCN 6A001 is amended by moving the Note previously located below Item paragraph a.2.g.4 to below the introductory Item paragraph a.2 for better readability. This Note informs the public that Item paragraph a.2 ‘‘applies to receiving equipment, whether or not related in normal application to separate active equipment, and ‘‘specially designed’’ components therefor’’. This rule also adds a Technical Note 2 after paragraph a.2.a to alert the public that underwater acoustic transducers designed to operate as passive receivers are hydrophones. This rule revises paragraph a.2.a.6 to add the parameter ‘‘and having a ‘hydrophone sensitivity’ better than ¥230 dB below 4 kHz’’, to remove any transducers or hydrophones that are not of strategic concern.

This rule also corrects a License Exception LVS paragraph for 6A001.a.1.b.1 by reversing the frequency band range for the equipment from ‘‘30 kHz to 2 kHz’’ to read ‘‘2 kHz to 30 kHz’’. All items in ECCN 6A001 are subject to national security (NS Column 2) and anti-terrorism (AT Column 1) license requirements as indicated in the Commerce Country Chart in Supplement no. 1 to part 738 of the EAR. License Exception Low Value Shipment (LVS) may be available depending on the operating frequency. License Exception Strategic Trade Authorization (STA) and transaction-based license exceptions may also be available depending on the circumstances of the transaction and the destination; see part 740 of the EAR.

9A004

ECCN 9A004 is amended by revising the Heading to add air-launch platforms. This rule adds new Item paragraph 9A004.g, which controls ‘‘aircraft’’ ‘‘specially designed’’ or modified to be air-launch platforms for space launch vehicles (SLV). The license requirements table is revised to add 9A004.g to the NS and AT license requirements paragraphs.

Items specified in 9A004.g require a license for national security (NS Column 1) and anti-terrorism reasons (AT Column 1) as indicated on the Commerce Country Chart in Supplement no. 1 to part 738 of the EAR. There are no list-based license exceptions, but transaction-based license exceptions may be available; see part 740 of the EAR.

Federal Register: https://www.govinfo.gov/content/pkg/FR-2019-05-23/pdf/2019-10778.pdf