Archive for the ‘License Exceptions’ Category

India is Movin’ On Up…from A:6 to A:1

2018/09/27

By: Danielle Hatch

Effective August 3, 2018, the Bureau of Industry and Security (BIS) has removed India from Country Group A:6 and placed it in Country Group A:1 (Supplement No. 1 to Part 740) and Country Group A:5. In a nutshell, this change is going to expand the number of US goods that can be exported/reexported to India using NLR and License Exceptions STA, GOV, and APR…which is good news. Fun Fact: India is the 37th country to join Country Group A:5 (make sure to share that one).

The biggest change exporters/reexporters will actually “see” is the ability to use paragraph (c)(1) of License Exception STA for exports/reexports and transfers within India. Exporters with also find that the move to Country Group A:5 now allows License Exception paragraph (c) to be used on exports and transfers of some 600-series goods (not all; dependent on end use/user and other exceptions specified elsewhere).

Now that India is in Country Group A:1, License Exception GOV can be used for exports/reexports of goods to the Indian government agencies. Related to this, License Exception GOV can be used to authorize some 600-series items now that India is in Country Group A:5.

It should be noted that License Exception APR (paragraphs (a), (b) and (j)) are now open for India too. The new ruling also removed the “X” for India in the NS column 2 of the Commerce Country Chart (Supplement No. 1 to Part 738) which allows a large number of items that previously required a license or license exception to be exported/reexported to India under No License Required (NLR).

Breakdown of EAR Changes:

  • Part 738: BIS amends Supplement No. 1 to Part 738, Commerce Country Chart, by removing the license requirements for National Security Column 2 (NS2) reasons. Accordingly, this rule removes the ‘‘X’’ in NS Column 2 for India.
  • Part 740: BIS amends Supplement No. 1 to Part 740 to add, in alphabetical order, India to Country Groups A:1 and A:5.
  • Conforming 738 Amendments
    • Removal of the first sentence of footnote 7 to the Commerce Country Chart in Supplement No. 1 to Part 738, related to India. This amendment removes the requirement that exporters file in the Automated Export System when items controlled for Crime Control Columns 1 and 3 reasons, and Regional Stability Column 2 reasons were destined to India. As a conforming change,
    • Removal of the word ‘‘Also’’ from the second sentence of footnote 7 and capitalizes the ‘‘n’’ in ‘‘note’’ since it begins the sentence.
    • Paragraph (b)(3) of§ 738.4 removes the name ‘‘India’’ and replace it with the name ‘‘Chad.’’ The sample analysis used India as an example of a country with NS Column 2 controls. That reason for control no longer applies to India but currently applies to Chad.
  • Conforming 740 Amendments
    • Removal of India from Country Group A:6 to avoid creating conflicting eligibility criteria for STA provisions.
  • Part 743: India now is subject to reporting requirements for items controlled under Wassenaar, as set forth in Part 743, Special Reporting and Notification. Specifically, India is added, in alphabetical order, to Supplement No. 1 to Part 743, Wassenaar Arrangement Participating States.
  • Part 758: Removal of the requirement that exporters file in AES when items controlled for CC Columns 1 and 3 reasons and RS Column 2 reasons are destined to India. This reporting requirement had been instituted when the license requirement for such items was removed (see U.S.-India Bilateral Understanding: Additional Revisions to the U.S. Export and Reexport Controls Under the Export Administration Regulations; January 23, 2015; 80 FR 3463).
  • Part 772: India added, in alphabetical order, to the list of countries under the term Australia Group in § 772.1, Definitions of terms as used in the Export Administration Regulations (EAR). This updates the definition consistent with formal recognition of India’s membership in the AG in a BIS final rule, entitled ‘‘Implementation of the February 2017 Australia Group (AG) Intersessional Decisions and June 2017 Plenary Understandings; Addition of India to the AG’’ (83 FR 13849, April 2, 2018).

Final Rule: https://www.gpo.gov/fdsys/pkg/FR-2018-08-03/pdf/2018-16691.pdf


BIS Publishes Clarifications to the Export Administration Regulations for the Use of License Exceptions

2018/02/08

Source: Federal Register

The goal of this final rule is to provide guidance based on existing agency understanding and practice on the use of License Exception GOV and STA. Specifically, this final rule makes three clarifications to License Exception Governments, International Organizations, International Inspections under the Chemical Weapons Convention, and the International Space Station (GOV) and adds five notes, along with making other minor clarifications, to License Exception Strategic Trade Authorization (STA).

Changes are as follows:

PART 740

Section 740.11 is amended:

  1. By revising paragraph (b)(2)(ii);
  2. By revising the introductory text of paragraph (b)(2)(iii)(C);
  3. By adding Note 1 to paragraph (b)(2)(iii)(C); and
  4. By adding Note 1 to paragraph (c)(1) to read as follows:
  • 740.11 Governments, International Organizations, International Inspections under the Chemical Weapons Convention, and the International Space Station (GOV).

* * * * *

(b) * * *

(2) * * *

(ii) Exports, reexports, and transfers (in-country) made by or consigned to a department or agency of the U.S. Government. This paragraph authorizes exports, reexports, and transfers of items when made by or consigned to a department or agency of the U.S. Government solely for its official use or for carrying out any U.S. Government program with foreign governments or international organizations 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 make any export, reexport, or transfer 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 purpose of this provision means those persons who provide administrative, managerial, scientific or technical support under contract to a U.S. Government department or agency (e.g., contractor employees of Federally Funded Research Facilities or Systems Engineering and Technical Assistance contractors). The term ‘contractor support personnel’ for purposes of this paragraph (b)(2)(ii) is limited to those individuals who are providing such support within a U.S. Government owned or operated facility or under the direct supervision of a U.S. government employee (i.e., an individual directly employed by the U.S. Government). Private security contractors are not ‘contractor support personnel’ for purposes of this paragraph (b)(2)(ii) because although they may work within a U.S. Government owned or operated facility, such contractors do not provide administrative, managerial, scientific or technical support under contract to the U.S. Government. This authorization is not available when a department or agency of the U.S. Government acts as a transmittal agent on behalf of a non- U.S. Government person, either as a convenience or in satisfaction of security requirements.

(iii) * * *

(C) This paragraph authorizes the ‘temporary’ export, reexport, or transfer (in-country) of an item in support of any foreign assistance or sales program authorized by law and subject to the control of the President by other means, when:

* * * * *

Note 1 to paragraph (b)(2)(iii)(C): ‘Temporary,’ for purposes of paragraph (b)(2)(iii)(C) of this section, means that four years from the date of an item’s initial export, reexport, or transfer (in-country), it must be returned to the exporter, reexporter, or transferor or its disposition otherwise authorized (e.g., pursuant to a license or another license exception) in accordance with the EAR.

* * * * *

(c) * * *

(1) * * *

Note 1 to paragraph (c)(1):

Civil intergovernmental organizations (such as the European Space Agency (ESA)) where the membership is limited to national governments that are ‘cooperating governments’ are also considered ‘cooperating governments’ for purposes of paragraph (c)(1) of this section. If the membership of the civil intergovernmental organization includes any national governments or other organizations that are not ‘cooperating governments,’ such civil intergovernmental organizations are not considered ‘cooperating governments’ for purposes of paragraph (c)(1) of this section. For example, civil intergovernmental organizations such as the European Aviation Safety Agency (EASA), the United Nations, and the World Bank do not fall within paragraph (c)(1) of this section because their membership includes governments that are not ‘cooperating governments.’

* * * * *

Section 740.20 is amended:

  1. By adding Note 1 to paragraph (a);
  2. By adding Note 1 to paragraphs (b)(2) and (b)(3) at the end of paragraph (b)(3);
  3. By revising paragraphs (d)(1)(i) and (d)(1)(ii);
  4. By revising paragraph (d)(2); and
  5. By adding Note 1 to paragraph (d)(3) to read as follows:
  • 740.20 License Exception Strategic Trade Authorization (STA).

* * * * *

(a) * * *

Note 1 to paragraph (a): License Exception STA authorizes transfers (in-country) but is only needed to authorize a transfer (in- country) when an EAR authorization is required. If a transfer (in-country) is not being made under STA, the requirements specified in this section do not apply (see Note 1 to paragraphs (b)(2) and (b)(3) of this section for requirements specific to staying within the scope of the original License Exception STA authorization and the concept of ‘completing the chain’ for purposes of ‘‘600 series’’ items originally authorized under License Exception STA).

(b) * * *

(3) * * *

Note 1 to paragraphs (b)(2) and (b)(3): Any export, reexport, or transfer (in-country) originally authorized under License Exception STA must stay within the scope of the original authorization. For example, for ‘‘600 series’’ items authorized under License Exception STA, such items must be provided to an eligible ultimate end user, such as a Country Group A:5 military, to stay in compliance with the original authorization. This requirement for the ‘‘600 series’’ is referred to as ‘completing the chain,’ meaning regardless of how many times the ‘‘600 series’’ item is transferred (in-country) or whether the ‘‘600 series’’ item is incorporated into higher level assemblies or other items, the ‘‘600 series’’ item must ultimately be provided to an eligible ultimate end user, or be otherwise authorized under the EAR. This applies regardless of whether the ‘‘600 series’’ item has been incorporated into a foreign-made item that may no longer be ‘‘subject to the EAR.’’ Because the other items eligible for authorization under License Exception STA (9×515 and other non-600 series ECCNs) do not include the ‘‘600 series’’ requirements specific to ultimate end user, this ‘completing the chain’ concept does not apply to 9×515 and other non-600 series ECCNs authorized under License Exception STA. However, the original export, reexport, or transfer (in-country) made under License Exception STA for 9×515 and other non-600 series ECCNs still must comply with the original authorization—meaning the terms and conditions of License Exception STA.

* * * * *

(d) Conditions—(1) Requirement to furnish Export Control Classification Number.

(i) The exporter must furnish to the consignee the ECCN of each item to be exported pursuant to this section. Once furnished to a particular consignee, the ECCN that applies to any item need not be refurnished to that consignee at the time the same exporter makes an additional export of the same item, if the information remains accurate at the time of the additional export.

(ii) A reexporter or transferor must furnish to subsequent consignees the ECCN, provided by the exporter or a prior reexporter or transferor, of each item to be reexported or transferred (in- country) pursuant to this section. Once furnished to a particular consignee, the ECCN that applies to any item need not be refurnished to that consignee at the time the same reexporter or transferor makes an additional reexport or transfer (in-country) of the same item, if the information remains accurate at the time of the additional reexport or transfer (in- country).

* * * * *

(2) Prior Consignee Statement. The requirements in this paragraph (d)(2) apply to each party using License Exception STA to export, reexport, or transfer (in-country), including reexporters and transferors of items previously received under License Exception STA. The exporter, reexporter, or transferor must obtain the following statement in writing from its consignee(s) prior to exporting, reexporting, or transferring (in-country) the item and must retain the statement in accordance with part 762 of the EAR. One statement may be used for multiple exports, reexports, or transfers (in- country) of the same items between the same parties so long as the party names, the description(s) of the item(s) and the ECCNs are correct. The exporter, reexporter, or transferor must maintain a log or other record (such as documents created in the ordinary course of business) that identifies each shipment made pursuant to this section and the specific consignee statement that is associated with each shipment. For purposes of this paragraph (d)(2), a log or other record is not required for intangible (i.e., electronic or in an otherwise intangible form) exports, reexports, or transfers (in-country) made under License Exception STA, but an exporter, reexporter, or transferor is required, prior to making any export, reexport, or transfer (in-country), to ensure that a prior consignee statement has been obtained pursuant to the requirements of this paragraph (d)(2). (See Note 1 to paragraph (d)(3) of this section for additional guidance on intangible exports, reexports, and transfers (in-country), including best practices). Paragraphs (d)(2)(i) through (vi) of this section are required for all transactions. In addition, paragraph (d)(2)(vii) is required for all transactions in ‘‘600 series’’ items and paragraph (viii) of this section is required for transactions in ‘‘600 series’’ items if the consignee is not the government of a country listed in Country Group A:5 (See supplement no. 1 to part 740 of the EAR). Paragraph (d)(2)(viii) is also required for transactions including 9×515 items.

[INSERT NAME(S) OF CONSIGNEE(S)]:

(i) Is aware that [INSERT GENERAL DESCRIPTION AND APPLICABLE ECCN(S) OF ITEMS TO BE SHIPPED (e.g., aircraft parts and components classified under ECCN 9A610)] will be shipped pursuant to License Exception Strategic Trade Authorization (STA) in § 740.20 of the United States Export Administration Regulations (15 CFR 740.20);

(ii) Has been informed of the ECCN(s) noted above by [INSERT NAME OF EXPORTER, REEXPORTER OR TRANSFEROR];

(iii) Understands that items shipped pursuant to License Exception STA may not subsequently be reexported pursuant to paragraphs (a) or (b) of License Exception APR (15 CFR 740.16(a) or (b)); (iv) Agrees to obtain a prior consignee statement when using License Exception STA for any reexport or transfer (in-country) of items previously received under License Exception STA; (v) Agrees not to export, reexport, or transfer these items to any destination, use or user prohibited by the United States’ Export Administration Regulations;

(vi) Agrees to provide copies of this document and all other export, reexport, or transfer records (i.e., the documents described in 15 CFR part 762) relevant to the items referenced in this statement to the U.S. Government as set forth in 15 CFR 762.7;

(vii) Understands that License Exception STA may be used to export, reexport, and transfer (in-country) ‘‘600 series’’ items to persons, whether non- governmental or governmental, only if they are in and, for natural persons, nationals of a country listed in Country Group A:5 (See supplement no. 1 to part 740 of the EAR) or the United States and if:

(A) The ultimate end user for such items is the armed forces, police, paramilitary, law enforcement, customs, correctional, fire, or a search and rescue agency of a government of one of the countries listed in Country Group A:5 or the United States Government;

(B) For the ‘‘development,’’ ‘‘production,’’ operation, installation, maintenance, repair, overhaul, or refurbishing of an item in one of the countries listed in Country Group A:5 or the United States that will be for one, or more, of the following purposes:

(1) Ultimately to be used by any such government agencies in one of the countries listed in Country Group A:5 or the United States Government; or

(2) Sent to a person in the United States and not for subsequent export under § 740.9(b)(1) (License Exception TMP for items moving in transit through the United States); or

(C) The United States Government has otherwise authorized the ultimate end use, the license or other authorization is in effect, and the consignee verifies in writing that such authorization exists and has provided the license or other approval identifier to the exporter, reexporter or transferor (as applicable).

(viii) Agrees to permit a U.S. Government end-use check with respect to the items.

[INSERT NAME(S) AND TITLE(S) OF PERSON(S) SIGNING THIS DOCUMENT, AND DATE(S) DOCUMENT IS SIGNED].

Note 1 to paragraph (d)(2): When multiple consignees who form a network engaged in a production process (or other type of collaborative activity, such as joint development) will be receiving items under License Exception STA, a single prior consignee statement for multiple consignees may be used for any item eligible for export, reexport, or transfer (in-country) under License Exception STA, provided all of the applicable requirements of License Exception STA are met, including those specified in paragraph (d)(2).

Note 2 to paragraph (d)(2): Country Group A:5 and A:6 government consignees are not required to sign or provide a prior consignee statement.

(3) * * *

Note 1 to paragraph (d)(3): While the exporter, reexporter, and transferor must furnish the applicable ECCN and obtain a consignee statement prior to export, reexport or transfer (in-country) made under License Exception STA in accordance with the requirements of paragraphs (d)(1) and (d)(2) of this section, intangible (i.e., electronic or in an otherwise intangible form) exports, reexports, and transfers (in-country) made under License Exception STA are not subject to the notification requirements of paragraph (d)(3) of this section. However, any export, reexport, or transfer (in-country) made under STA must stay within the scope of the original authorization.

* * * * *

Federal Register: https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2017/2163-82-fr-50511/file


Amendments to Implement United States Policy Toward Cuba

2018/02/08

Source: Federal Register

Effective November 9, 2017, The Bureau of Industry and Security (BIS) has amends the licensing policy for Cuba and portions of three license exceptions available for exports and reexports to Cuba: License Exceptions Gift Parcels and Humanitarian Donations (“GFT”), Consumer Communications Devices (“CCD”), and Support for the Cuban People (“SCP”).

Changes are as follows:

PART 740

Section 740.12 is amended by revising paragraph (a)(2)(v)(A) to read as follows:

Gift parcels and humanitarian donations (GFT).

(a) * * *

(2) * * *

(v) * * * (A) No gift parcel may be sent to any of the following officials of the Cuban government: Ministers and Vice-Ministers; members of the Council of State; members of the Council of Ministers; members and employees of the National Assembly of People’s Power; members of any provincial assembly; local sector chiefs of the Committees for the Defense of the Revolution; Director Generals and sub-Director Generals and higher of all Cuban ministries and state agencies; employees of the Ministry of the Interior (MININT); employees of the Ministry of Defense (MINFAR); secretaries and first secretaries of the Confederation of Labor of Cuba (CTC) and its component unions; chief editors, editors and deputy editors of Cuban state-run media organizations and programs, including newspapers, television, and radio; or members and employees of the Supreme Court (Tribuno Supremo Nacional).

* * * * *

Section 740.19 is amended by revising paragraph (c)(2)(i) to read as follows:

Consumer  Communications  Devices (CCD).

* * * * *

(c) * * *

(2) * * *

(i) Ineligible Cuban Government Officials. Ministers and Vice-Ministers; members of the Council of State; members of the Council of Ministers; members and employees of the National Assembly of People’s Power; members of any provincial assembly; local sector chiefs of the Committees for the Defense of the Revolution; Director Generals and sub-Director Generals and higher of all Cuban ministries and state agencies; employees of the Ministry of the Interior (MININT); employees of the Ministry of Defense (MINFAR); secretaries and first secretaries of the Confederation of Labor of Cuba (CTC) and its component unions; chief editors, editors and deputy editors of Cuban state-run media organizations and programs, including newspapers, television, and radio; or members and employees of the Supreme Court (Tribuno Supremo Nacional).

* * * * *

Section 740.21 is amended by:

  1. Revising paragraph (b)(1);
  2. Removing paragraphs (b)(2) and (3);
  3. Redesignating paragraph (b)(4) as new paragraph (b)(2); and
  4. Revising paragraph (d)(4)(ii) to read as follows:

Support for the Cuban People (SCP).

* * * * *

Start Printed Page 51986

(b) * * *

(1) Items for use by the Cuban private sector for private sector economic activities, except for items that would be used to:

(i) Primarily generate revenue for the state; or

(ii) Contribute to the operation of the state, including through the construction or renovation of state-owned buildings.

(2) Items sold directly to individuals in Cuba for their personal use or their immediate family’s personal use, other than officials identified in paragraphs (d)(4)(ii) or (iii) of this section.

* * * * *

(d) * * *

(4) * * *

(ii) Ministers and Vice-Ministers; members of the Council of State; members of the Council of Ministers; members and employees of the National Assembly of People’s Power; members of any provincial assembly; local sector chiefs of the Committees for the Defense of the Revolution; Director Generals and sub-Director Generals and higher of all Cuban ministries and state agencies; employees of the Ministry of the Interior (MININT); employees of the Ministry of Defense (MINFAR); secretaries and first secretaries of the Confederation of Labor of Cuba (CTC) and its component unions; chief editors, editors and deputy editors of Cuban state-run media organizations and programs, including newspapers, television, and radio; or members and employees of the Supreme Court (Tribuno Supremo Nacional); and

* * * * *

PART 746

Section 746.2 is amended by revising Note 2 to Paragraph (b)(3)(i) to read as follows:

Cuba.

* * * * *

(b) * * *

(3) * * *

(i) * * *

Note 2 to paragraph (b)(3)(i):

The policy of case-by-case review in this paragraph is intended to facilitate exports and reexports to meet the needs of the Cuban people. Accordingly, BIS generally will deny applications to export or reexport items for use by state-owned enterprises, agencies, and other organizations that primarily generate revenue for the state, including those engaged in tourism and those engaged in the extraction or production of minerals or other raw materials. Applications for export or reexport of items destined to the Cuban military, police, intelligence or security services also generally will be denied. Additionally, pursuant to section 3(a) of the National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba (NSPM), dated June 16, 2017, BIS generally will deny applications to export or reexport items for use by entities or subentities identified by the Department of State in the Federal Register or at https://www.state.gov/​e/​eb/​tfs/​spi/​cuba/​cubarestrictedlist/​index.htm, unless such transactions are determined to be consistent with sections 2 and 3(a)(iii) of the NSPM.

Federal Register: https://www.federalregister.gov/documents/2017/11/09/2017-24448/amendments-to-implement-united-states-policy-toward-cuba


BIS Corrects ECCNs 0D606, 0E606, and 8A609

2018/02/08

Source: Federal Register

On December 27, 2017 BIS published a final rule (82 FR 61153) which made corrections to certain provisions of the EAR, including the CCL. The corrections were editorial in nature and did not affect any license requirements. In a nutshell, the original text in 0D606 and 0E606 was erroneously replaced with the text for 0D614 and 0E614. This rule fixes the issue and reinstates paragraph (2) of the Special Conditions for STA in 8A609.

ECCNs 0D606 and 0E606: The December 27 rule amended ECCN subparagraphs 0D606.a and 0E606.a to include references to ECCNs 0B606 and 0C606. During drafting, the License Requirements section and the text following the revised subparagraphs for both ECCNs was exchanged with the text for ECCNs 0D614 and 0E614, respectively. In order to follow the guidelines of the original preamble, this correction to the December 27 rule restores the original License Requirements section and the text of ECCNs 0D606 and 0E606 following subparagraph a in both ECCNs. In addition, this rule replaces the incorrect reference to 0D606 with 0E606 in the Special Conditions for STA of ECCN 0E606.

ECCN 8A609: The December 27 rule amended ECCN 8A609 by revising the title reference in these ECCNs to match the current title of § 740.20(g) and in doing so inadvertently removed paragraph (2) of the Special Conditions for STA. This rule restores paragraph (2) of the Special Conditions for STA in ECCN 8A609.

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2018-01-08/pdf/2018-00059.pdf