Archive for the ‘USML’ Category

U.S. Departments of State and Commerce Propose Rules to Transition Firearms and Ammunition from the USML to the CCL

2018/06/29

(Source: Reeves & Dola LLP Alert, 1 June 2018. Available via jreeves@reevesdola.com)

By: Johanna Reeves, Esq., jreeves@reevesdola.com, 202-715-994; and Katherine Heubert, Esq., 202-715-9940, kheubert@reevesdola.com. Both of Reeves & Dola LLP

On May 24, 2018, the U.S. Departments of State and Commerce officially published proposed rules to transition most firearms and ammunition away from the export controls of the Department of State’s International Traffic in Arms Regulations (ITAR) over to the controls of the Department of Commerce’s Export Administration Regulations (EAR). In this alert, the second of four installments, we will examine the proposed revisions to the ITAR control list, the U.S. Munitions List (USML) Category I, and the Department of Commerce’s proposed companion rule amending the Commerce Control List (CCL).

Both the State and Commerce Departments are seeking written comments on the proposed rules, which will be accepted until July 9, 2018.  We strongly encourage industry to take time to carefully review the revised categories and provide actionable commentary to the proposed rules. This is a critical opportunity for industry to provide comments that would assist the government in reducing jurisdictional ambiguities and clarifying the articles that will remain subject to the ITAR. The specific instructions for submitting comments are included in each proposed rule.

Proposed Transitions from USML Cat. I to CCL

Title for this category will change from “Firearms, Close Assault Weapons and Combat Shotguns” to “Firearms and Related Articles.”

Articles Removed from USML Cat. I – State’s rule proposes to transition away from the USML non-automatic and semi-automatic firearms up to and including .50 caliber currently controlled under paragraph (a), as well as all parts, components, accessories and attachments specially designed for those firearms. These items will be subject to the EAR under newly created “500 series” Export Control Classification Numbers (ECCNs).

Commerce originally created the “500 series” as part of “Export Control Reform” under the Obama Administration to control items that had been from the USML or certain items on the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies Munitions List (the “Wassenaar List” or WAML). Compared to the “600 series” ECCNs, which control items of a military nature removed from the USML, the “500 series” contain items not appropriate for the 600 series control because they have predominant civil, recreational, law enforcement, or other non-military applications.

To capture the firearms and ammunition in USML Cats. I-III that will transition to the CCL, Commerce proposes in its companion rule to create a total of 17 new ECCNs. For the firearms, parts, components, accessories and attachments that will transition from USML Cat. I, the proposed new ECCNs are:

– 0A501 (Firearms and related commodities)

– 0A502 (Shotguns and certain related commodities)

– 0A504 (Optical sighting devices and certain related commodities)

– 0E501 (Technology for firearms and certain related items)

– 0E502 (Technology for shotguns)

– 0E504 (Technology for certain optical sighting devices)

Articles Still Controlled Under USML Cat. I – items that would remain under Category I are positively listed as follows, including the corresponding paragraph (Significant Military Equipment (SME) is designated with an asterisk (*)):

*(a) Firearms using caseless ammunition.

*(b) Fully automatic firearms to .50 caliber (12.7 mm) inclusive.

*(c) Firearms specially designed [emphasis added] to integrate fire control, automatic tracking, or automatic firing (e.g., Precision Guided Firearms (PGFs)), and specially designed parts and components therefor.

Note to paragraph (c): Integration does not include only attaching to the firearm or rail.

*(d) Fully automatic shotguns regardless of gauge.

*(e) Silencers, mufflers, and sound suppressors, and specially designed [emphasis added] parts and components therefor (flash suppressors move to CCL).

(f) [Reserved]

(g) Barrels, receivers (frames), bolts, bolt carriers, slides, or sears specially designed [emphasis added] for the articles in paragraphs (a), (b), and (d) of this category.

(h) Parts, components, accessories, and attachments, as follows:

(1) Drum and other magazines for firearms to .50 caliber (12.7 mm) inclusive with a capacity greater than 50 rounds, regardless of jurisdiction of the firearm, and specially designed [emphasis added] parts and components therefor;

(2) Parts and components specially designed for conversion of a semiautomatic firearm to a fully automatic firearm[emphasis added].

(3) Accessories or attachments specially designed to automatically stabilize aim (other than gun rests) or for automatic targeting, and specially designed parts and components therefor [emphasis added].

Technical Data and Defense Services – paragraph (i) specifies “technical data,” as defined in ITAR §120.10, and “defense services,” as defined in ITAR §120.9, directly related to the defense articles described in paragraphs (a), (b), (d), (e), (g), and (h) of Cat. I, and classified technical data directly related to items controlled in ECCNs 0A501, 0B501, 0D501, and 0E501 and defense services using the classified technical data. Exemptions will continue to be covered in ITAR §125.4.

Revised USML Cat. I will also include several notes to explain what items are excluded by the category (non-automatic and semi-automatic firearms up to and including .50 caliber; non-automatic shotguns; BB, pellet, and muzzle loading (e.g., black powder) firearms; and parts, components, accessories, and attachments of firearms and shotguns in paragraphs (a), (b), (d), and (g) of Cat. I that are common to non-automatic firearms and shotguns) and what is meant by firearm, fully automatic firearm or shotgun, or caseless ammunition.

The proposed rule also adds a new paragraph (x) to Cats. I, II and III to allow for ITAR licensing of commodities, software and technology subject to the EAR, which paragraph has already been added to all of the other USML categories that have gone through the rewrite process.  It is important to note that paragraph (x) is only available if those items EAR items are to be used in or with defense articles controlled in USML Cat. I, and the items are described in the purchase documentation submitted with the ITAR license application. Further, it is important to understand that such EAR items, even if included on an ITAR export license under USML Cat. I(x), would remain subject to the controls of the EAR, despite the appearance of the ITAR license.  Use of paragraph(x) is a licensing convenience only; it does not change the jurisdictional status of an item. Consequently, it will be incumbent on the U.S. exporter to properly educate its customers on the proper licensing authority, especially for reexport and retransfer requests.

CCL Controls

A key fact in the proposed rules is that the transition from USML to CCL will NOT result in a decontrol of firearms or ammunition. Firearms transitioning from the USML to CCL will be subject to controls under National Security (NS), Regional Stability (RS), Crime Control and Detection (CC), Firearms Convention (FC), United Nations Sanctions (UN) and Anti-Terrorism (AT). Indeed, the proposed rules make it abundantly clear that BIS will require licenses to export or reexport to ANY country firearms or other weapons that transitions from the USML to the CCL.

License exceptions, such as limited value shipments (LVS), government (GOV), baggage (BAG) and strategic trade authorization (STA) will be very limited for small arms formerly on the USML, so industry should carefully review the ECCNs in the proposed rule to see what license exceptions are available for each ECCN and the limitations.

Each new ECCN will be made up of technically specific subparagraphs in an enumerated “List of Items Controlled.” For example, the list of items controlled under ECCN 0A501 is comprised of paragraphs .a – .w, which identify the items classified under the particular paragraph. The ECCN also includes .x and .y paragraphs for parts and components. The .x paragraph operates like a catch-all, as it lists specially designed parts and components that are not controlled elsewhere. Conversely, the .y paragraph lists only those parts, components, accessories, and attachments that are controlled only for UN and AT reasons. Such items may be exported to nearly all destinations without a license. The parts and components captured by the .x paragraph, on the other hand, are subject to NS, RS, FC, UN, and AT and will likely require a license for most destinations.

It will be incumbent on the exporter (or temporary importer) to review every firearm and firearm part, component, accessory, and attachment in which it deals so as to determine the new classification once the rules become final. The specific license requirements, and the applicability of license exceptions, as well as any end-use or end-user restrictions, will depend on the specific subparagraph classification of the governing ECCN.

Specially Designed

A critical concept in the proposed revisions to the control lists is the term “Specially Designed.” This term has been reviewed, criticized, discussed, and analyzed in depth since it was first incorporated into the ITAR and the EAR in the initial implementation rules for Export Control Reform, which DDTC and BIS published in the Federal Register on April 16, 2013.

This term is NOT up for public comment at the present time, but to understand the proposed revisions to the USML and CCL control lists for firearms and ammunition, it is imperative to comprehend the term. Both the ITAR and EAR use the term, “Specially Designed” to remove the catch-all controls currently present in the USML Cats. I-III and to designate what parts, components, accessories and attachments are subject to either the ITAR or the EAR. We have highlighted the proposed use of “specially designed” in USML Cat. I in the list above.

It is important to note that the “specially designed” analysis is not applicable to the entire USML Category, as it can be used only if it is specified within a particular paragraph. As the revisions to Cat. I are intended to make the list a positive list and include only those articles that warrant control under the ITAR for the reasons stated previously, there should be a bright line between those articles subject to the ITAR and those subject to the EAR. Industry therefore must carefully review the full definition of “Specially Designed” and the application to the proposed revisions of Cat. I and provide comments that would assist the government in reducing jurisdictional ambiguities and clarifying the articles subject to the ITAR.

Industry should also review the ITAR order of review outlined in 22 C.F.R. § 121.1(b)), and the Order of Review Decision Tool available on DDTC’s website. BIS also provides an Order of Review Decision Tool on its website.

Industry should be forewarned not to underestimate the time intensive process of classifying the parts, components, attachments and accessories for firearms under the proposed rules. A critical component is the specially designed analysis, which itself is complex and difficult to understand immediately. It would be foolish to skip over classification, as license requirements, applicability of license exceptions, and restrictions are dependent on the classification, down to the specific ECCN paragraph. Further, export license applications will require identification of the specific subparagraph of control as well.  The days of simply identifying “paragraph (h)” for any and all parts and components are quickly coming to an end.

Brokering

In addition to the proposed revisions to the USML Cats. I-III, DDTC’s proposed rule identifies several “conforming changes” in other parts of the ITAR to remove references to firearms that will be controlled on the CCL. One such revision is to section 129.1 to clarify that regulations on brokering activities apply to defense articles and defense services designated on the USML as well as items described on the U.S. Munitions Import List (USMIL) for permanent import controls. The USMIL is promulgated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) pursuant to the permanent import provisions of the Arms Export Control Act. ATF’s regulations are in 27 C.F.R. Pt. 447, and the USMIL is in 27 C.F.R. § 447.21.

According to DDTC, “the items that will move to the CCL for export control purposes, yet are on the USMIL for permanent import purposes, remain subject to the brokering requirements of [ITAR] part 129 with respect to all brokering activities, including facilitation in their manufacture, export, permanent import, transfer, reexport, or retransfer.” 83 Fed. Reg. at 24199 (May 24, 2018). Approaching this from the catch and release analysis that has permeated export control reform, this is the “catch.” The proposed revision in section 129.2, however, adds the following release in a new paragraph (vii) for activities that are NOT considered brokering activities:

“Activities by persons to facilitate the export, reexport, or transfer of an item subject to the EAR that has been approved pursuant to a license or license exception under the EAR or a license or other approval under this subchapter.”

As written, this language is very broad because the clause “that has been approved” does not limit past approvals to the person engaging in the subject activities. Further, the past approvals may be from either an EAR or an ITAR authorization.

Electronic Export Information Filings to Automated Export System

A critical change in the proposed rules lies within the Department of Commerce proposed rule relating to the Electronic Export Information (EEI) filings to Automated Export System (AES). According to the proposed rule, AES filings would be required for exports of all firearms transitioned to the CCL from the USML, regardless of value or destination. This requirement would also extend to temporary exports under license exceptions TMP or BAG.

In addition, the rule proposes to expand the required data elements of AES filings to include serial numbers, make, model, and caliber for such firearms. Industry should carefully evaluate the impact this requirement will have on operations and include in comments to the proposed rules.

Temporary Imports

The proposed Commerce rules set out a new process in 15 C.F.R. 758.10 for temporary imports of items subject to both the EAR and the USMIL. The process would impose entry clearance requirements for firearms temporarily imported into the United States for a period not to exceed 1 year, and then would require the use of the TMP license exception for the return export.

For the inbound transaction, U.S. Customs and Border Protection would be charged with collecting identifying information necessary to track the items temporarily imported, such as the list of firearms with serial numbers, model, make, quantity, and value, as well as other import and supporting documents. For the export, a license would not be required, but CBP would match the export to the information received upon entry. Firearms may not be imported from or ultimately destined to certain proscribed or restricted countries, and the proposed rule includes language that would instruct importers to contact CBP at the port of import or export for the proper procedures to provide any data or documentation required by BIS. Commerce is seeking comment from industry on this proposed new process.

This brings to a close this second installment of our four-part series on the proposed rules transitioning firearms and ammunition from the USML to the CCL. In our next two alerts we will examine the proposed revisions to USML Cats. II and III and the new EAR controls.


A Primer on the Export Administration Regulations

2018/06/29

(Source: Reeves & Dola LLP Alert, 1 June 2018. Available via jreeves@reevesdola.com)

By: Johanna Reeves, Esq., jreeves@reevesdola.com, 202-715-994; and Katherine Heubert, Esq., 202-715-9940, kheubert@reevesdola.com. Both of Reeves & Dola LLP

 

On May 14, 2018, the U.S. Department of State posted on its website proposed rules to transition most firearms and ammunition off the International Traffic in Arms Regulations (ITAR) control list, known as the U.S. Munitions List (USML), over to the U.S. Department of Commerce’s export control list, known as the Commerce Control List (CCL). The reason for the change is to revise the scope of the ITAR to control only those articles that provide the United States with a critical military or intelligence advantage or, in the case of weapons, are inherently for military end use. Such items will remain on the USML, while items no longer warranting control under the ITAR will be transitioned to the CCL and be subject to the licensing provisions of the Export Administration Act (EAR), administered and enforced by the U.S. Department of Commerce, Bureau of Industry and Security (BIS).

In anticipation of the official publication of the proposed rules, scheduled for May 24, 2018, we thought it advisable to offer an overview of the EAR. Once the rules publish on May 24, we will circulate an in-depth 3-part review of the proposed amendments to the ITAR and to the EAR and the potential impacts on industry.

The following overview of the EAR is intentionally broad, and is intended to serve only as a backdrop to the proposed rules to transition most firearms and ammunition, along with certain parts, components, attachments and accessories, from ITAR controls to EAR controls.

Scope of Controls – Subject to the EAR

Items – the Commerce Control List

While the Department of State controls over exports, reexports, and temporary imports are confined to “defense articles” and “defense services” listed on the USML, the Department of Commerce controls over exports and reexports are much broader. The EAR, found in 15 C.F.R. Pts. 730-780, control the export and reexport of “items” (commodities, software, and technology, each term separately defined in the EAR) and certain activities that are NOT exclusively controlled for export or reexport by another agency of the U.S. government which regulates exports or reexports for national security or foreign policy purposes, such as the U.S. Department of State.

Items subject to the EAR consist of the items listed on the CCL in Part 774 of the EAR, and all other items that meet the definition of “subject to the EAR” in section 734.3. The CCL is made up of ten Categories that are further broken into Export Control Classification Numbers (ECCNs). An ECCN is an alpha-numeric code that describes an item or types of items and shows the controls on that item and available license exceptions. The ECCN is not a Harmonized Tariff Schedule (HTS) number, and is not a Schedule B number. To determine whether an item requires an export license from BIS, the exporter must know how the item is classified on the CCL.

As noted above, the CCL is divided into 10 categories, with each category subdivided into five groups, designated by the letters A through E as follows: (A) Equipment, assemblies and components; (B) Test, inspection and production equipment; (C) Materials; (D) Software; and (E) Technology. Within each group is where you will find the ECCNs that enumerate the items that are controlled on the CCL. The firearms and ammunition currently classified on the USML in Categories I, II and III that have been selected to transition to the EAR will be enumerated in new ECCNs created under Category 0 (nuclear materials, facilities and equipment, and miscellaneous items) and product groups A, B, D and E. We will review the proposed rules and the new ECCNs in detail in our forthcoming alerts.

Items subject to the EAR which are not listed on the CCL are generally designated as “EAR99.” Often, items classified as EAR99 do not require an export license, but EAR99 is a classification, not a license exemption! Further, EAR99 does not automatically mean that no license is required. If the export violates any of the general prohibitions listed in EAR section 736.2, such as prohibited end-user, end-use, or sanctioned or embargoed country, a license is required.

The above discussion relates only to the question of what is subject to the EAR. Being subject to the EAR does not automatically mean a license is required for an export or reexport. This is a separate analysis that we will examine below.

Parts and Components – De Minimis

Foreign-made commodities that incorporate controlled U.S.-origin commodities may also be subject to the EAR if they have de minimis level of U.S. content. What constitutes the de minimis level depends on the commodity and the destination country for the reexport, and may range from no de minimis levels (for items subject to higher controls), to 10% or 25% de minimis.  The rules for calculating de minimis levels are found in section 734.4 of the EAR.

Technology

The EAR defines “technology” as “information necessary for the “development,” “production,” “use,” operation, installation, maintenance, repair, overhaul, or refurbishing (or other terms specified in ECCNs on the CCL that control “technology”) of an item. Each of the quoted terms are defined in Part 772 of the EAR.

EAR controls over “technology” are more narrowly focused than the ITAR controls over technical data, and apply in limited contexts. To determine whether the technology for an ECCN is also enumerated on the CCL, the corresponding “E” ECCN for the platform should be reviewed. For example, in the proposed rules for firearms currently in USML CAt. I, there will be a new ECCN 0E501 that controls technology for firearms and certain related items. However, the technology controlled would be that which is required for the “development” and “production” of firearms other than shotguns. This new ECCN also would apply the anti-terrorism and United Nations reasons for control (see below) to “technology” “required” for the operation, installation, maintenance, repair, or overhaul of such firearms. As the proposed Commerce rule explains, “controlling this “technology” under the EAR rather than the ITAR is appropriate because the “technology” for the “development,” “production,” operation, installation, maintenance, repair, and overhaul of the firearms to be described in 0A501 is widely available throughout the world and its possession does not confer a significant military or intelligence advantage on the United States.”

It is important to point out that the EAR’s carve-out from controls for published works or information in the public domain is much broader in scope compared to the ITAR carve-out for public domain. In section 734.7, “published” technology or software is carved out from EAR controls “when it has been made available to the public without restrictions upon its further dissemination….” For example, subscriptions available without restriction, libraries or other public collections open to the public and from which the public can obtain tangible or intangible documents, unlimited distributions at a conference, seminar, trade, show, or exhibition generally accessible to the public, public/unlimited distribution in any form, including posting on the Internet on sites available to the public. Many may rejoice over this, as the ITAR still does not recognize the Internet as being in the “public domain.”

As further illustration of technology not controlled under the EAR, the BIS proposed rule cites the example of a gun manufacturer posting a firearm’s operation and maintenance manual on the Internet, making it publicly available to anyone interested in accessing it and without restrictions on further dissemination. According to the proposed rule explanation, such operation and maintenance information included in that published manual would no longer be “subject to the EAR.” Nonproprietary system descriptions, including for firearms and related items, are another example of information that would not be subject to the EAR.

Reasons for Control

The reasons for control for exports under the EAR include the following:

– CB (Chemical & Biological Weapons)

– NP (Nuclear Proliferation)

– NS (National Security)

– MT (Missile Technology)

– RS (Regional Stability)

– CC (Crime Control)

– AT (Anti-Terrorism)

– UN (United Nations)

– EI (Encryption Item)

– CW (Chemical Weapons Convention)

The specific reasons for control for a particular item is identified within each specific ECCN. Unlike the blanket ITAR requirement for a license to anywhere in the world, BIS license requirements are unique to each individual ECCN. Whether a license is required for a particular export will depend on the destination country.

Licensing Under the EAR

Each ECCN is made up of four sections: a heading(description of the items controlled), the license requirements(including all possible reasons for control, such as AT, UN, NS, CC, and RS) the available license exceptions, and list of items controlled.

To determine the export and reexport license requirements for most items on the CCL, you must identify the reasons for control in the relevant ECCN and consult the Commerce Country Chart in Supp. No. 1 to Part 738 to see whether the applicable reasons for control are checked for the specific country. If so, then a license is required unless a license exception applies. Whether a license exception is available will depend on the ECCN and the Country Groups in Supplement No. 1 to Pt. 740.

Unlike the ITAR, the EAR does not require registration of exporters (so no registration fee), and there are no fees to apply for licenses through the SNAP-R. In addition, unlike the ITAR, the EAR does not include a concept of “defense services,” so there is no registration or licensing for the provision of defense services like there is under the ITAR.

The process for establishing a SNAP-R account is relatively easy, and no digital signature certificate is required. Further, unlike the ITAR, which contains several license forms depending on the transaction, the EAR prescribes one single form for each type of export (permanent, retransfer, reexport).

Covering Items Subject to the EAR on DDTC Licenses

With the rewrite of Categories I, II, and III, DDTC will add a “Paragraph (x)” to each of the revised categories. This paragraph has been added to all other USML Categories as they have gone through the rewrite process, and allows for the export of items subject to the EAR under ITAR licenses so long as the conditions of paragraph (x) are met (see ITAR §§ 120.5(b) and 126.6(c)). These conditions include:

(1) An ITAR license may only include items subject to the EAR that are for use in or with the listed defense articles;

(2) The purchase documentation must specify both the defense articles with the items subject to the EAR (no separate purchase orders breaking out the defense articles from the EAR items);

(3) The exporter must ship the EAR items together with the ITAR articles; and

(4) Items subject to the EAR that are included on an ITAR license do not lose their jurisdictional status as EAR-controlled items and remain subject to the EAR for any subsequent transactions.

In light of the last requirement, it is incumbent on the U.S. exporter to properly educate its customers and end-users when using an ITAR license for both defense articles and EAR items to be used in or with the defense articles. In the event the end-user need reexport approval, the approval must come from BIS for items subject to the EAR, not DDTC.

Below is a reference chart comparing some aspects of the EAR to the ITAR.

ITAR EAR
Statutory Authority Arms Export Control Act Export Administration Act of 1979 50 USC 4601-4623 [lapsed]
Federal Agency U.S. Department of State, Directorate of Defense Trade Controls U.S. Department of Commerce, Bureau of Industry and Security
Citation 22 C.F.R. Pts. 120-130 15 C.F.R. Pts. 730 – 774
What is Covered Export, reexport, and temporary import of “defense articles” and “defense services” Items subject to the EAR
Control List U.S. Munitions List
22 C.F.R. 121.1
Commerce Control List
15 C.F.R. Pt. 774
Registration Required? Yes – manufacturers, exporters, temporary importers, and brokers of defense articles and defense services. Annual fees apply. Manufacturers of defense articles must register regardless of export activity. No
License Portal D-Trade SNAP-R
Fee for Licenses Yes – rolled into registration fee No
Types of Licenses/ Authorization Several types/forms – permanent export, temporary export, temporary import, agreements, brokering One form for export, Reexport, In-Country Transfer
Brokering? Yes – 22 C.F.R. Pt. 129 No – but see proposed rules for Cats. I-III
Technology Controls Yes – “technical data” licensing and “defense services” licensing Yes, but not as broad as ITAR; EAR controls only transmission
of technology, so no EAR concept of defense service

This overview of the EAR is the first installment of a four-part series on the proposed rules to transition firearms and ammunition from the USML to the CCL. Our next alert will examine the transition of certain firearms and their parts, components, accessories and attachments from USML Cat. I items to the CCL. Please stay tuned.


Smoking Hot: Proposed Changes to USML Categories I, II, and III

2018/05/30

By: Rick Phipp

On top of the background buzz regarding the ZTE zigzag, the latest shoe has dropped in the ongoing export control reforms. Three shoes actually, since we can now read about the proposed move of certain items controlled in Categories I, II, and III on the U.S. Munitions List (USML) over to the Commerce Control List (CCL). Long awaited by U.S. gun and ammunition manufacturers and exporters, these proposed rules describe how articles the President determines no longer warrant control under USML would be controlled on the CCL and by the Export Administration Regulations (EAR) and describe more precisely articles warranting export and temporary import control on the USML.

As part of export control reforms under the Obama administration, the executive branch completed transfers of items in the following categories from the USML to the CCL and created Category XIX (gas turbine engines):

  • Category IV (launch vehicles, guided and ballistic missiles, rockets, torpedoes, bombs, and mines);
  • Category V (explosives and energetic materials, propellants, incendiary agents, and their constituents);
  • Category VI (surface vessels of war and special naval equipment);
  • Category VII (ground vehicles);
  • Category VIII (aircraft and related articles);
  • Category IX (military training equipment and training);
  • Category X (personal protective equipment);
  • Category XI (military electronics);
  • Category XII (fire control, laser, imaging, and guidance equipment);
  • Category XIII (materials and miscellaneous articles);
  • Category XIV (toxicological agents, including chemical agents, biological agents, and associated equipment);
  • Category XV (spacecraft and related articles);
  • Category XVI (nuclear weapons related articles);
  • Category XVIII (directed energy weapons); and
  • Category XX (submersible vessels and related articles).

Left remaining were changes to Categories I-III (firearms, close assault weapons and combat shotguns, guns and armament, and ammunition/ordnance).

Under the proposed rules published by BIS and the State Department, a number of new ECCNs are created to address transferred items and the relevant USML categories are revised to describe more precisely the articles warranting continued control on the USML. The interagency review process focused on identifying items that were either (i) inherently military and otherwise warranted control on the USML, or (ii) if of a type common to non-military firearms applications, possessed parameters or characteristics that provide a critical military or intelligence advantage to the U.S., and are almost exclusively available from the U.S. If one or both points were met, the article remained on the USML.  Essentially, commercial items widely available for purchase and less sensitive military items were transferred in the proposed rules. Links to the proposed rules are as follows: State Department and Commerce Department.

There will be a 45-day period following publication in the Federal Register in which the agencies will accept comments regarding the proposed rules. Exporters and manufacturers of articles currently controlled under USML Categories I-III should review the proposed rules to consider how they may be impacted. Comments may be submitted via the Federal eRulemaking Portal: http://www.regulations.gov or via email to DDTCPublicComments@state.gov with the subject line, “ITAR Amendment – Categories I, II, and III.”

Source


ITAR Corrected and Additions to Parts 120, 121, 122, 124, 126 and 127

2017/01/31

Effective December 5, 2016, the Department of State has amended the International Traffic in Arms Regulations (ITAR) to clarify recent revisions due to Export Control Reform (ECR), the scope of disclosure of information submitted to the Directorate of Defense Trade Controls (DDTC), the policies and procedures regarding statutory debarments, as well as correcting administration and typographical errors.

The following changes have been made following this final rule:

  • A definition of ‘‘classified’’ is moved from § 121.1(e) to § 120.46;
  • The structure of § 121.1(a)–(e) is realigned, with paragraphs (a) and (b) revised to clarify the existing requirements for United States Munitions List (USML) controls, and paragraphs (c), (d) and (e) removed;
  • Thirteen USML categories are amended to clarify that commodities, software, and technology subject to the Export Administration Regulations (EAR) and related to defense articles in a USML category may be exported or temporarily imported on the same license with defense articles from any category, provided they are to be used in or with that defense article;
  • In three places within the USML, the word ‘‘enumerated’’ is replaced with the word ‘‘described’’ to make the language consistent with changes directed in the Final Rule published at 79 FR 61226, Oct. 10, 2014;
  • Section 122.4(c)(4) is revised to permit the Directorate of Defense Trade Controls (DDTC) to approve an alternative timeframe, not less than 60 days, to the current 60-day requirement for registrants to provide a signed amended agreement;
  • Section 124.2(c)(5)(v) is revised to correct errors to the USML category references for gas turbine engine hot sections, from VI(f) and VIII(b) to Category XIX;
  • Section 124.12 is amended in paragraph (a)(9) to update the name of the Defense Investigative Service to Defense Security Service;
  • Section 126.9 on Advisory Opinions and Related Authorizations is amended to correct paragraph (a);
  • Paragraph (b) of § 126.10 is amended to clarify the scope of control and disclosure of information, however, notwithstanding the changes to paragraph (b) it is the Department’s policy not to publicly release information relating to activities regulated by the ITAR except as required by law or when doing so is otherwise in the interest of the United States Government; and;
  • Section 127.7(b) is amended to clarify the policies and procedures regarding statutory debarments (addressing inadvertent omissions resulting from a prior amendment to that section), and § 127.11 is amended to make conforming revisions to paragraph (c) omitted from prior amendment to that section.

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2016-12-05/pdf/2016-28406.pdf


Final ECR Revisions for Spacecraft Published

2017/01/31

The Bureau of Industry and Security (BIS) has published a final rule that will be effective January 15, 2017, and will complete the administration’s goal of moving spacecraft and related items that no longer warrant control under the United states Munitions List (USML) Category XV to the Commerce Control List (CCL). This final rule addresses issues raised in, and public comments, on the interim final rule that was published on May 13, 2014 and groups the changes into four types of changes:

  1. Changes to address the movement of additional spacecraft and related items from the USML to the Commerce Control List (CCL), as a result of changes in aperture size for spacecraft that warrant ITAR control, in response to public comments and further U.S. Government review;
  2. Changes to address the movement of the James Webb Space Telescope (JWST) from the USML to the CCL;
  3. Other corrections and clarifications to the spacecraft interim final rule; and
  4. Addition of .y items to Export Control Classification Number 9A515

The first type of changes (Changes To Address the Movement of Additional Spacecraft and Related Items From the USML to the CCL) are:

  • In § 740.20, paragraph (g) (License Exception STA eligibility requests for 9×515 and ‘‘600 series’’ end items), this final rule revises paragraph (g)(1) as a conforming change to the changes made to ECCN 9A515.a, described below.
    • To maintain the same scope of paragraph (g)(1), this final rule removes the text that referred to ECCN 9A515.a and adds in its place text referencing ‘‘spacecraft’’ in 9A515.a.1, .a.2, .a.3, or .a.4, or items in 9A515.g.
    • The spacecraft in ECCN 9A515.a.5 are eligible for License Exception STA without a § 740.20(g) request. As a conforming change, this final rule adds ECCN 9E515.b, .d, .e, or .f as eligible for § 740.20(g) License Exception STA eligibility requests.
    • Because the scope of revised paragraph (g) includes items other than end items, this final rule also revises the heading of paragraph (g) to remove the term ‘‘end items’’ and add in its place the term ‘‘items.’’ However, the items eligible to be submitted under the § 740.20(g) process are still limited to those specific ECCNs and ‘‘items’’ paragraphs identified in paragraph (g).
  • The spacecraft transferred to the CCL in this final rule are subject to special regional stability license requirements. Therefore, in § 742.6 (Regional stability), this final rule makes revisions to five paragraphs.
  • The final rule revises paragraph (a)(1), adds a new paragraph (a)(8), revises paragraph (b)(1)(i), and adds paragraphs (b)(5) and (b)(6). These changes are described below.
    • In § 742.6, paragraph (a)(1) (RS Column 1 license requirements in general), this final rule adds a reference to new paragraph (a)(8).
    • New paragraph (a)(8) (Special RS Column 1 license requirement applicable to certain spacecraft and related items) is an RS Column 1 license requirement, which is specific to certain spacecraft and related items. This paragraph specifies that a license is required for all destinations, including Canada, for spacecraft and related items classified under ECCN 9A515.a.1, .a.2., .a.3., .a.4., .g, and ECCN 9E515.f.
    • Although the license requirement for these specified ECCN 9×515 items is more restrictive than for those 9×515 items on the CCL prior to publication of this rule, the license review policy is the same as those for other 9×515 items. As a conforming change, this final rule revises the fourth sentence of paragraph (b)(1)(i) to add a reference to paragraph (a)(8), because that sentence references the ECCN 9×515 license requirements, which now include those special RS license requirements in paragraph (a)(8).
  • This final rule adds two new paragraphs, paragraph (b)(5) (Spacecraft for launch) and paragraph (b)(6) (Remote sensing spacecraft) to specify the requirements that apply for license applications involving spacecraft and remote sensing spacecraft.
    • Consistent with the requirements in paragraph (y) in Supplement No. 2 to part 748 Unique Application and Submission Requirements, this final rule adds paragraphs (b)(5)(i) and (b)(5)(ii) to specify when applications to export or reexport a ‘‘spacecraft’’ controlled under ECCN 9A515.a for launch in or by a country will or may require a technology transfer control plan (DoD), an encryption technology control plan approved by the National Security Agency (NSA), and DoD monitoring of all launch activities. Paragraph (b)(5)(i) specifies that this is a requirement for all such applications for countries that are not a member of the North Atlantic Treaty Organization (NATO) or a major non-NATO ally of the United States. This final rule adds a similar requirement under paragraph (b)(5)(ii), but with the key distinction that it may require for countries that are a member of NATO or a major non-NATO ally of the United States.  (TCP) approved by the Department of Defense
  • Also in § 742.6, this final rule adds a new paragraph (b)(6) (Remote sensing spacecraft) to make applicants aware that any application for ‘‘spacecraft’’ described in ECCN 9A515.a.1,.a.2, a.3, or .a.4, for sensitive remote sensing components described in 9A515.g, or for ‘‘technology’’ described in ECCN 9E515.f, may require a government-to- government agreement at the discretion of the U.S. Government. A government- to-government agreement may be required for any destination at the sole discretion of the U.S. Government.
  • In § 750.4 (Procedures for processing license applications), as conforming changes to the changes described above to § 742.6, this final rule makes the following two changes: adds a new paragraph (b)(8), and adds a new paragraph (d)(2)(iv). These changes are described in the next two paragraphs.
  • In § 750.4, consistent with the requirements in paragraph (y) in Supplement No. 2 to part 748 Unique Application and Submission Requirements, this final rule adds a new paragraph (b)(8) (Satellites for launch) to include a requirement for license applications involving a satellite for launch.
    • Applicants must obtain approval by the DoD of a technology transfer control plan and the approval of the NSA of an encryption technology control plan.
    • In addition, the applicant will also be required to make arrangements with the DoD for monitoring of all launch activities.
    • These existing DoD and NSA requirements in regards to satellites for launch are in addition to the EAR licensing requirements, but any license authorized under the EAR for satellites for launch must also be done in accordance with those DoD and NSA requirements to be authorized under an EAR license. Therefore, this final rule adds this requirement to § 750.4(b)(8), which will eliminate the need to add this requirement as a license condition for any license for satellites for launch.
    • These DoD and NSA TCP approval requirements existed under the ITAR and are added to the EAR to preserve the status quo. Therefore, although this paragraph adds three new requirements to the EAR for license applications for spacecraft for launch, the requirements are the same as when these spacecraft were formerly under the ITAR, so there will be no increased burden on exporters, reexporters or transferors.
  • In § 750.4, this final rule adds a new paragraph (d)(2)(iv) (Remote Sensing Interagency Working Group (RSIWG)) to make applicants aware that the RSIWG, chaired by the State Department, will review license applications involving remote sensing spacecraft. These will be any items described in ECCN 9A515.a.1, .a.2, .a.3, or .a.4, sensitive remote sensing components described in 9A515.g, or ‘‘technology’’ described in 9E515.f.
  • ECCN 9A515: This final rule adds a new License Requirement Note, revises the Special Conditions for STA section, revises ‘‘items’’ paragraph (a), and adds paragraph (g) in the List of ‘‘items’’ controlled section of ECCN 9E515. These changes are described in the next five paragraphs.
  • Addition of License Requirement Note to 9A515. As a conforming change to the addition of § 742.6(a)(8), described above, this final rule adds a License Requirement Note to the end of the License Requirements section of ECCN 9A515 to specify that the Commerce Country Chart is not used for determining license requirements for commodities classified as 9A515.a.1, .a.2., .a.3., .a.4, and .g. The new License Requirement also includes a cross reference to § 742.6(a)(8) and alerts exporters and reexporters that these commodities are subject to a worldwide license requirement.
  • In ECCN 9A515, Special Conditions for STA section, this final rule revises paragraph (1). This final rule adds references to the new ‘‘items’’ paragraphs of ECCN 9A515.a (9A515.a.1, .a.2, .a.3 and .a.4) and 9A515.g, which would not be eligible for License Exception STA, unless determined by BIS to be eligible for License Exception STA in accordance with § 740.20(g) (License Exception STA eligibility requests for certain 9×515 and ‘‘600 series’’ end items). Because these items are commodities that are more sensitive, additional U.S. Government review of the specific commodity is warranted prior to allowing exporters, reexporters or transferors to use License Exception STA. The imposition of this requirement is consistent with the use of the paragraph (g) process for other sensitive items in the 9×515 ECCNs and the ‘‘600 series’’ that have been moved to the CCL. Also in the Special Conditions for STA section, this final rule redesignates paragraph (2) as paragraph (3) and adds a new paragraph (2). This final rule adds new paragraph (2) in the Special Conditions for STA section to exclude the use of License Exception if the ‘‘spacecraft’’ controlled in ECCN 9A515.a.1, .a.2, .a.3, or .a.4 contains a separable or removable propulsion system enumerated in USML Category IV(d)(2) or USML Category XV(e)(12) and designated MT. This exclusion is being added because the MTCR Category I components identified in this paragraph are separable or removable and therefore for consistency with the intent to exclude MT items from License Exception STA eligibility, this final rule adds this as an additional restriction on the use of License Exception STA.
  • In ECCN 9A515.a, this final rule revises ‘‘items’’ paragraph (a) to add control parameters for the additional spacecraft being moved from the USML to the CCL. Spacecraft moved from the USML to the CCL and classified under ECCN 9A515.a prior to publication of this rule are being moved to new ‘‘items’’ paragraph (a)(5). This final rule adds ‘‘items’’ paragraphs (a)(1), (a)(2), (a)(3) and (a)(4) to ECCN 9A515 to control the additional spacecraft items being moved to the CCL. The identification of these more sensitive spacecraft items in their own ‘‘items’’ level paragraph in ECCN 9A515 (9A515.a.1, .a.2, .a.3., .a.4) will allow for the imposition of more restrictive controls that are needed, while not impacting other spacecraft and related items that do not warrant the more restrictive controls (e.g., 9A515.a.5). These more restrictively controlled items consist of the following: ‘‘spacecraft,’’ including satellites, and space vehicles, whether designated developmental, experimental, research or scientific, not enumerated in USML Category XV or described in ECCN 9A004 that have electro-optical remote sensing capabilities and having a clear aperture greater than 0.35 meters, but less than or equal to 0.50 meters (under ECCN 9A515.a.1). It includes those having remote sensing capabilities beyond NIR (under ECCN 9A515.a.2), those having radar remote sensing capabilities (e.g., AESA, SAR, or ISAR) having a center frequency equal to or greater than 1.0 GHz, but less than 10.0 GHz and having a bandwidth equal to or greater than 100 MHz, but less than 300 MHz (under 9A515.a.3). These more sensitive items being moved from the USML to the CCL also include those providing space-based logistics, assembly, or servicing of another ‘‘spacecraft’’ (under ECCN 9A515.a.4).
  • In ECCN 9A515.g, this final rule also adds ‘‘items’’ paragraph (g) to 9A515, as related to the changes described above to 9A515.a. Paragraph (g) is added to control remote sensing components that are ‘‘specially designed’’ for ‘‘spacecraft’’ described in ECCN 9A515.a.1 though 9A515.a.4, which were described above. Similar to the reason for identifying the items in ECCN 9A515.a.1 through .a.4., specifying that these remote sensing components are the ‘‘items’’ paragraphs (g)(1) through (g)(3) will allow the imposition of more restrictive controls on these components, without needing to impose the same level of restrictions on 9A515.x items, which is the paragraph under which these components would have been controlled if this new 9A515.g paragraph were not being added. Paragraph (g) controls remote sensing components for space-qualified optics with the largest lateral clear aperture dimension equal to or less than 0.35 meters; or with the largest clear aperture dimension greater than 0.35 meters but less than or equal to 0.50 meters (under ECCN 9A515.g.1). In addition, paragraph (g) controls optical bench assemblies ‘‘specially designed’’ for the spacecraft added to ECCN 9A515.a.1 through .a.4 (under ECCN 9A515.g.2), and primary, secondary, or hosted payloads that perform a function of spacecraft added to 9A515.a.1. through .a.4. (under 9A515.g.3).
  • ECCN 9E515: This final rule adds a new License Requirement Note, revises the Special Conditions for STA section and ‘‘items’’ paragraph (a), and adds ‘‘items’’ paragraph (f) in the List of ‘‘items’’ controlled section of ECCN 9E515. These changes are described in the next five paragraphs:
    • Addition of License Requirement Note to 9E515. As a conforming change to the addition of § 742.6(a)(8), described above, this final rule adds a License Requirement Note to the end of the License Requirements section of ECCN 9E515 to specify that the Commerce Country Chart is not used for determining license requirements for ‘‘technology’’ classified 9E515.f. The new License Requirement also includes a cross reference to § 742.6(a)(8) and alerts exporters and reexporters that this ‘‘technology’’ is subject to a worldwide license requirement.
    • In ECCN 9E515, Special Conditions for STA section, this final rule revises paragraph (1) to add a reference to 9E515.f. This final rule specifies that such technology is not eligible for STA, unless the specific technology has been approved under the § 740.20(g) process by the U.S. Government. This change is made to conform to the addition described below of ‘‘technology’’ under ECCN 9E515.f for the additional spacecraft and related components added to 9A515.a and .g described above. In addition, this final rule also specifies that the ‘‘technology’’ controlled under ECCN 9E515.b, .d and .e are not eligible for License Exception STA, unless the specific ‘‘technology’’ has been approved under the § 740.20(g) process by the U.S. Government. Prior to publication of this final rule, ECCN 9E515.b, .d and .e ‘‘technology’’ was excluded from License Exception STA in all cases, which based on public comments and interagency discussions was a more restrictive policy than was needed to protect U.S. national security and foreign policy interests for this ‘‘technology’’ classified under ECCN 9E515. Therefore, this final rule makes the other ‘‘technology’’ (9E515.b, .d and .e) also eligible for the requests under § 740.20(g), as described above in the changes this final rule makes to paragraph (g) of License Exception STA.
    • In ECCN 9E515.a, this final rule revises ‘‘items’’ paragraph (a) to exclude the ‘‘technology’’ for the new commodities added to 9A515.a (.a.1 through .a.4) and .g. ‘‘Required’’ ‘‘technology’’ for these new commodities added to ECCN 9A515.a and .g will be controlled under ECCN 9E515, but in order to impose more restrictive controls on those ‘‘technologies’’ without impacting other 9E515 ‘‘technology,’’ this final rule adds this ‘‘technology’’ being moved to the CCL to a new ‘‘items’’ paragraph (f) to 9E515, as described below.
    • In ECCN 9E515.f, this final rule adds a new ‘‘items’’ paragraph (f) in the List of Items Controlled section to control ‘‘technology’’ ‘‘required’’ for the ‘‘development,’’ ‘‘production,’’ installation, repair, overhaul, or refurbishing of commodities that this final rule adds to ECCN 9A515 under ‘‘items’’ paragraphs .a.1 through .a.4, or .g. As described above, this final rule is identifying these ‘‘technologies’’ in their own ‘‘items’’ paragraph in order to allow more restrictive controls to be placed on these items without impacting other ECCN 9E515 ‘‘technology.’’

 

The second types of changes (Changes To Address the Movement of the James Webb Space Telescope (JWST) From the USML to the CCL) are:

  • ECCN 9A004: This final rule revises ECCN 9A004 to add a specific telescope, which was ‘‘subject to the ITAR’’ prior to the effective date of this final rule. A determination was made based on the public comments received by the Department of State and the space interagency working group (a group of U.S. Government agencies involved in the export control system and that deal with space related issues) that this specific telescope was within the scope of spacecraft and related items that did not warrant being subject to the ITAR. Therefore, consistent with the stated purpose of the May 13 rule, as well as section 38(f) of the Arms Export Control Act (AECA), the Department of State has moved this telescope, the James Webb Space Telescope (JWST), which is being developed, launched, and operated under the supervision of the U.S. National Aeronautics and Space Administration (NASA), to the CCL. The ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ that are ‘‘specially designed’’ for use in or with the JWST are also being moved from the ITAR and will be subject to the EAR, as of the effective date of the State and Commerce final rules.
  • To control the JWST and the ‘‘specially designed’’ ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ for the JWST, this final rule adds two new ‘‘items’’ paragraph to ECCN 9A004. First, this final rule adds a new ‘‘items’’ paragraph (u) to 9A004 to control the JWST (the specific telescope) that is being moved to the CCL from the USML. Second, this final rule adds a new ‘‘items’’ paragraph (v) to control the ‘‘specially designed’’ ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ or ‘‘attachments’’ for use in or with the JWST. The commodities this final rule adds to ECCN 9A004.v include the primary and secondary payloads of the JWST.
  • This final rule also specifies in the control parameters in the new paragraph (v)(1) to (v)(4) that the ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ specified in paragraph (v) do not include items that are ‘‘subject to the ITAR,’’ microelectronic circuits, items in ECCNs 7A004 and 7A104, or in any ECCN containing ‘‘space qualified’’ as a control criterion (See ECCN 9A515.x.4). As a conforming change, this final rule revises the phrase ‘‘ECCN 9A004.x’’ in paragraph (y) to add a reference to the ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ in paragraph (v) that this final rule adds. This final rule revises the phrase, so it now specifies ‘‘ECCN 9A004.v or .x,’’ which is being done to account for the fact that paragraphs (v) and (x) will contain certain ‘‘specially designed’’ ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ for items enumerated in ECCN 9A004 and that the new items being added to paragraph (v) and (x) could be reclassified under 9A004.y, if subsequently the specific item is identified in an interagency-cleared commodity classification (CCATS) pursuant to § 748.3(e) as warranting control in 9A004.y. BIS anticipates an increase of approximately 20 license applications per year as a result of these changes to the EAR.
  • In addition to the change to ECCN 9A004, this final rule makes changes to three 9×515 ECCNs to reflect that the JWST and the ‘‘specially designed’’ ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ for the JWST are being added to 9A004. This final rule makes these conforming changes to ECCNs 9A515, 9B515 and 9E515. These are not substantive changes. These changes are described in the next three paragraphs.
  • ECCN 9A515. This final rule revises the third sentence of the Related Controls paragraph in the List of Items Controlled section of ECCN 9A515 to add a reference to the JWST. This final rule also revises the Note to ECCN 9A515.a to specify items in ECCN 9A004 are not within the scope of 9A515.a. A reference to ECCN 9A004 needs to be added because the description of this Note to ECCN 9A515.a would otherwise include the JWST. This final rule revises ‘‘items’’ paragraph (b) in ECCN 9A515, to add a reference to ECCN 9A004.u for the JWST. This conforming change is needed to specify that ground control systems and training simulators ‘‘specially designed’’ for telemetry, tracking and control of the JWST are also within the scope of ECCN 9A515.b. For similar reasons, this final rule revises ‘‘items’’ paragraph (e) to add a reference to ECCN 9A004.u. This conforming change is made to specify that the microelectronic circuits and discrete electronic components described in ECCN 9A515.e include those ‘‘specially designed’’ for the JWST. This final rule also makes some changes to the .y paragraph in ECCN 9A515, which are discussed further below.
  • ECCN 9B515. This final rule revises ‘‘items’’ paragraph (a) in the List of Items Controlled section to add a reference to ECCN 9A004.u. This conforming change is needed to specify that the test, inspection, and production ‘‘equipment’’ ‘‘specially designed’’ for the ‘‘production’’ or ‘‘development’’ of the JWST are also classified under ECCN 9B515.a. For similar reasons, this final rule revises the Note to ECCN 9B515.a to add a reference to ECCN 9A004.u. This conforming change is intended to specify that ECCN 9B515.a includes equipment, cells, and stands ‘‘specially designed’’ for the analysis or isolation of faults in the JWST, in addition to the other commodities enumerated in the Note to ECCN 9A515.a.
  • ECCN 9E515: This final rule also revises the third sentence in the ‘‘Related Controls’’ paragraph in the List of Items Controlled section in ECCN 9E515 to add a reference to the JWST. This sentence will alert persons classifying technology for the JWST to see ECCNs 9E001 and 9E002.

The third types of changes are (Other Corrections and Clarifications to Interim Spacecraft Final Rule):

  • ECCN 9A515: This final rule adds two sentences at the end of the introductory text in the ‘‘items’’ paragraph in the List of Items Controlled section of ECCN 9A515, consistent with the notes to USML Category XV. The introductory paragraph clarifies when ‘‘spacecraft’’ and other items described in ECCN 9A515 remain subject to the EAR even if exported, reexported, or transferred (in-country) with defense articles ‘‘subject to the ITAR’’ integrated into and included therein as integral parts of the item. This introductory paragraph includes some application examples and some qualifiers for when the ITAR jurisdiction would reapply to such defense articles. This final rule adds two new sentences to clarify two additional instances where the jurisdiction of the ITAR would be applicable in such scenarios. The first new sentence is being added to clarify that the removal of a defense article subject to the ITAR from the spacecraft is a retransfer under the ITAR—meaning the removal of a defense article would require an ITAR authorization. The ITAR authorization requirement would apply regardless of which CCL authorization the spacecraft is exported under the EAR. The second sentence clarifies that transfer of technical data regarding the defense article subject to the ITAR integrated into the spacecraft would require an ITAR authorization.
  • ECCN 9B515: This final rule revises the License Requirements section of ECCN 9B515 to add a missile technology (MT) control. The MT control is being added to impose a license requirement on equipment in ECCN 9B515.a that is for the ‘‘development’’ or ‘‘production’’ of commodities in USML Category XV(e)(12) and XV(e)(19) that are MT controlled. This change is made to conform to the Missile Technology Control Regime (MTCR) Annex and the corresponding MT controls in USML Category XV (MTCR Annex, Category I: Item 2.B.2.). BIS anticipates an increase of approximately 10 license applications per year as a result of this change to the EAR, along with the conforming MT change made to ECCN 9E515 described in the next paragraph.
  • ECCN 9E515: This final rule, as a conforming change to the change to ECCN 9B515, revises the MT Control paragraph in the License Requirements section on ECCN 9E515. This final rule revises the MT Control paragraph in ECCN 9E515 to add technology for items in 9B515.a that are controlled for MT reasons. This change is made to conform to the MTCR Annex and the corresponding MT controls in USML Category XV (MTCR Annex, Category I: Item 2.E.1.).

The fourth type (Addition of .y Items to ECCN 9A515) of changes:

  • This final rule adds five .y paragraphs (ECCN 9A515.y.2, .y.3., .y.4, .y.5, and .y.6) as additional commodities specified under paragraph (y) in this ECCN. As noted in the introductory text of paragraph (y), the U.S. Government through the § 748.3(e) process will identify the items that warrant being classified under 9×515.y, such as the commodities being specified under ECCN 9A515.y.2 to .y.6 in this final rule. Specifically, the following space grade or for spacecraft applications commodities: thermistors (ECCN 9A515.y.2); RF microwave bandpass ceramic filters (dielectric resonator bandpass filters) (9A515.y.3); space grade or for spacecraft applications hall effect sensors (9A515.y.4); subminiature (SMA and SMP) plugs and connectors, TNC plugs and cable and connector assemblies with SMA plugs and connectors (9A515.y.5); and flight cable assemblies (9A515.y.6) have been identified in interagency-cleared commodity classifications (CCATS) pursuant to § 748.3(e) as warranting control in 9A515.y.2 to .y.6. The additions described above for ECCN 9A515.y.2 to y.6 are the second set of approved populations of .y controls being added to 9A515. As stated in the May 13 rule, as well as the July 13 rule (which added ECCN 9A515.y.1), BIS (along with State and Defense) will continue to populate the 9A515.y with additional entries as additional classification determinations are made in response to requests from the public under § 748.3(e).

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2017-01-10/pdf/2016-31755.pdf


USML Categories VIII, XII, and XV Amended and Some Items Shifting to CCL

2016/11/15

The Department of State has published a final rule that will be effective December 31, 2016 that will revise Category XII (fire control, laser, imaging, and guidance equipment) of the U.S. Munitions List (USML) to remove certain items from control on the USML and to describe more precisely the articles continuing to warrant control on the USML. The Department of State also amends USML Categories VIII, XIII, and XV to reflect that items previously described in those Categories are now controlled under the revised Category XII or Commerce Control List. Further, the Department revises USML Category XI to move items to the CCL as a result of changes to related control in USML Category XII. The Export Administration Regulations (EAR) amends Export Control Classification Number (ECCN) 7A611 and creates a new ‘‘600 series’’ ECCNs 7B611, 7D611, and 7E611. In addition, for certain dual-use infrared detection items, this final rule expands controls for certain software and technology, eliminates the use of some license exceptions, revises licensing policy, and expands license requirements for certain transactions involving military end users or foreign military commodities. This final rule also harmonizes provisions within the EAR by revising controls related to certain quartz rate sensors.

ITAR Changes Below:

Section 121.1 is amended by:

  • Removing and reserving paragraph (e) in U.S. Munitions List Category VIII;
  • Revising paragraphs (a)(3)(ii) and (a)(10) of U.S. Munitions List Category XI;
  • Revising U.S. Munitions List Category XII; Removing and reserving paragraph (a) in U.S. Munitions List Category XIII; and
  • Removing and reserving paragraph (c) in U.S. Munitions List Category XV

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2016-10-12/pdf/2016-24225.pdf

 

EAR Changes Below:

  • Part 734
    • Section 734.4 is amended by removing and reserving paragraph (a)(3) and revising paragraph (a)(5).
  • Part 740
    • Section 740.2 is amended by adding paragraph (a)(7) and removing and reserving paragraph (a)(9).
    • Section 740.16 is amended by revising paragraphs (a)(2) and (b)(1) through (3)
    • Section 740.20 is amended by revising paragraphs (b)(2)(ii) and (b)(2)(x)
  • Part 742
    • Section 742.6 is amended by revising paragraph (b)(1)
  • Part 744
    • Section 744.9 is amended by revising the section heading and paragraphs (a) and (b)
  • Part 772
    • Section 772.1 is amended by revising the last sentence in Note 1 to the definition of ‘‘specially designed’’
  • Part 774
    • In Supplement No. 1 to part 774, Category 0, ECCN 0A919 is amended by revising the Items paragraph of the List of Items Controlled section
    • In Supplement No. 1 to part 774, Category 0, ECCN 0A987 is amended by:
      • Revising the Related Controls paragraph in the List of Items Controlled section;
      • Revising paragraph f. in the Items paragraph in the List of Items Controlled section; and
      • Adding a note to 0A987.f
    • In Supplement No. 1 to part 774, Category 2, ECCN 2A984 is amended by revising the heading and Note 1 of the Related Controls paragraph in the List of Items Controlled section
    • In Supplement No. 1 to part 774, Category 6, ECCN 6A002 is amended by:
    • Removing the ‘‘Special Conditions for STA’’ section; and
    • Revising the Related Controls paragraph in the List of Items Controlled section.
    • In Supplement No. 1 to part 774, Category 6, ECCN 6A003 is amended by:
      • Adding a License Requirement Note in the License Requirements section;
      • Revising notes 3 and 4 in the Related Controls paragraph in the List of Items Controlled section; and
      • Adding note 5 to the Related Controls paragraph in the List of Items Controlled section
    • In Supplement No. 1 to part 774, Category 6, ECCN 6A004 is amended by revising the Related Controls paragraph in the List of Items Controlled section
    • In Supplement No. 1 to part 774, Category 6, ECCN 6A005 is amended by revising the last two sentences in the Related Controls paragraph in the List of Items Controlled section
    • In Supplement No. 1 to part 774, Category 6, ECCN 6A007 is amended by revising the Related Controls paragraph in the List of Items Controlled section
    • In Supplement No. 1 to part 774, Category 6, ECCN 6A008 is amended by revising the Related Controls paragraph in the List of Items Controlled section
    • In Supplement No. 1 to part 774, Category 6, ECCN 6A107 is amended by revising the Related Controls paragraph in the List of Items Controlled section
    • In Supplement No. 1 to part 774, Category 6, ECCN 6A611 is revised
    • In Supplement No. 1 to part 774, Category 6, ECCN 6A990 is revised
    • In Supplement No. 1 to part 774, Category 6, ECCN 6A993 is amended by revising the Related Controls paragraph in the List of Items Controlled sectionn Supplement No. 1 to part 774, Category 6, ECCN 6D002 is amended by revising the TSR paragraph in the List Based License Exceptions section and the Related Controls paragraph in the List of Items Controlled section
    • In Supplement No. 1 to part 774, Category 6, ECCN 6D003 is amended by revising the TSR paragraph in the List Based License Exceptions section and the Related Controls paragraph in the List of Items Controlled section
    • In Supplement No. 1 to part 774, Category 6, ECCN 6D991 is revised
    • In Supplement No. 1 to part 774, Category 6, ECCN 6E001 is amended by revising the TSR paragraph in the List Based License Exceptions section and the Related Controls paragraph in the List of Items Controlled section
    • In Supplement No. 1 to part 774, Category 6, ECCN 6E002 is amended by revising the TSR paragraph in the List Based License Exceptions section and the Related Controls paragraph in the List of Items Controlled section
    • In Supplement No. 1 to part 774, Category 6, The following ECCNs will be amended by revising the Related Controls paragraph in the List of Items Controlled section
      • ECCN 6E990
      • ECCN 7A001
      • ECCN 7A002
      • ECCN 7A003
      • ECCN 7A005
      • ECCN 7A101
      • ECCN 7A102
    • In Supplement No. 1 to part 774, Category 7, ECCN 7A611 is revised
    • In Supplement No. 1 to part 774, Category 7, ECCN 7A994 is revised
    • In Supplement No. 1 to part 774, Category 7, add ECCN 7B611 between ECCNs 7B103 and 7B994
    • In Supplement No. 1 to part 774, Category 7, add ECCN 7D611 between ECCNs 7D103 and 7D994
    • In Supplement No. 1 to part 774, Category 7, add ECCN 7E611 between ECCNs 7E104 and 7E994
    • In Supplement No. 1 to part 774, Category 7, ECCN 7E994 is amended by revising the Related Controls paragraphin the List of Items Controlled section
    • In Supplement No. 1 to part 774, Category 8, ECCN 8A002 is amended by adding a sentence to the end of the Related Controls paragraph in the List of Items Controlled section
    • In Supplement No. 1 to part 774, Category 9, ECCN 9A991 is amended by:
      • Removing the License Requirement Notes paragraph in the License Requirements section, and
      • Revising the Related Controls paragraph in the List of Items Controlled section.

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2016-10-12/pdf/2016-24220.pdf

Want a more detailed overview of these regulation changes? Our Export Control Reform for USML Category XII: Fire Control, Laser, Imaging, and Guidance Webinar will cover the following:

  • Significant changes to USML Category XII and corresponding revisions to Categories VIII, XI, XIII, and XV, which will result in some items moving off the USML
  • What the definition of “specially designed” really means for classification purposes, and how Category XII has introduced a new concept of “specially designed for a military end-user”
  • How to classify formerly ITAR-controlled items on the Commerce Control List, especially the new and revised “600 series” Export Control Classification Numbers (ECCNs) (7A611, 7B611, 7D611, and 7E611)
  • Adjustments to several related non-600 series ECCNs is CCL Categories 0, 2, 6, 7, 8, and 9
  • License exception eligibility for these items, including important changes to License Exceptions APR, GOV, and STA
  • Revisions to unique EAR military end use and end user controls
  • The actions exporters should take now to prepare for the rapidly approaching effective date of these changes

Learn More at: http://www.learnexportcompliance.com/Webinars/Export-Control-Reform-for-USML-Category-XII-Fire-C.aspx


The Last Hoorah for Reform?

2016/09/06

By: Danielle McClellan

Over three years ago (April 2013) the first set of Export Control Reform regulations were published in the Federal Register, they were over 100 pages long and made the regulations more complex but also significantly relaxed controls on some items. Over the last few years reform has come in the form of waves and moved items from the USML onto the CCL in batches. Now, as the Obama Administration is moving out it looks as though we are about to see the last list shift for a while.

The final rule, which will be effective December 31, 2016, will move specific items controlled under Category XIV and Category XVIII. Basically, items that have been determined to no longer warrant ITAR control (toxicological agents, including chemical agents, biological agents, and associated equipment, along with directed energy weapons) will be controlled under the Commerce Control List (CCL). The affected Category XIV items consist of dissemination, detection, and protection “equipment” and related articles, such as production and test “equipment,” and will be controlled under new ECCNs 1A607, 1B607, 1C607, 1D607 and 1E607. The affected Category XVIII articles will follow in suit with being primarily tooling, production “equipment,” test and evaluation “equipment,” test models, and related articles and will be controlled under new ECCNs 6B619, 6D619, and 6E619.

Specific Regulation Changes:

ITAR:

  • This final rule adopts for those pathogens and toxins that meet specific capabilities listed in paragraph (b) the ‘‘Tier 1’’ pathogens and toxins established in the Department of Health and Human Services and the United States Department of Agriculture select agents and toxins regulations (42 CFR part 73 and 9 CFR part 121). The Tier 1 pathogens and toxins that do not meet these capabilities remain controlled in Export Control Classification Number (ECCN) 1C351 on the CCL.
  • Additionally, this rule, in concert with the analogous rule published by the Department of Commerce, moves riot control agents to the export jurisdiction of the Department of Commerce, as well as the articles covered previously in paragraphs (j), (k), and (l), which include test facilities, equipment for the destruction of chemical and biological agents, and tooling for production of articles in paragraph (f), respectively.
  • Other changes include the addition of paragraph (a)(5) to control chemical warfare agents ‘‘adapted for use in war’’ and not elsewhere enumerated, as well as the removal of paragraphs (f)(3) and (f)(6) and movement to the CCL of equipment for the sample collection and decontamination or remediation of chemical agents and biological agents.
  • Paragraph (f)(5) for collective protection was removed and partially combined in paragraph (f)(4) or the CCL.
  • Paragraph (g) enumerates antibodies, recombinant protective antigens, polynucleotides, biopolymers, or biocatalysts exclusively funded by a Department of Defense contract for detection of the biological agents listed in paragraph (b)(1)(ii).
  • The Department notes that the controls in paragraph (f)(2) that include the phrase ‘‘developed under a Department of Defense contract or other funding authorization’’ do not apply when the Department of Defense acts solely as a servicing agency for a contract on behalf of another agency of the U.S. government. Moreover, ‘‘other funding authorization’’ refers to other funding authorization from the Department of Defense.
  • The Department notes that the controls in paragraphs (g)(1) and (h) that include the phrase ‘‘exclusively funded by a Department of Defense contract’’ do not apply when the Department of Defense acts solely as a servicing agency for a contract on behalf of another agency of the U.S. government, or, for example, in cases where the Department of Defense provides initial funding for the development of an item but another agency of the U.S. government provides funding to further develop or adapt the item.
  • Paragraph (h) enumerates certain vaccines funded exclusively by the Department of Defense, as well as certain vaccines controlled in (h)(4) that are specially designed for the sole purpose of protecting against biological agents and biologically derived substances identified in (b). Thus, the scope of vaccines controlled in (h)(4) is circumscribed by the nature of funding and the satisfaction of the term ‘‘specially designed’’ as that term is defined in ITAR § 120.41. In evaluating the scope of this control, please note that the Department offers a decision tool to aid exporters in determining whether a defense article meets the definition of ‘‘specially designed.’’ This tool is available at http://www.pmddtc.state.gov/licensing/dtSpeciallyDesigned.htm.
  • Paragraph (i) is updated to provide better clarity on the scope of the control by including examples of Department of Defense tools that are used to determine or estimate potential effects of chemical or biological weapons strikes and incidents in order to plan to mitigate their impacts.
  • A new paragraph (x) has been added to USML Category XIV, allowing ITAR licensing on behalf of the Department of Commerce for commodities, software, and technology subject to the EAR, provided those commodities, software, and technology are to be used in or with defense articles controlled in USML Category XIV and are described in the purchase documentation submitted with the application. The intent of paragraph (x) is not to impose ITAR jurisdiction on commodities, software, and technology subject to EAR controls. Items described in paragraph (x) remain subject to the jurisdiction of the EAR. The Department added the paragraph as a regulatory reference point in response to industry requests to be able to use a Department of State license to export shipments that have a mix of ITAR controlled items and EAR controlled items for use in or with items described in that category.
  • Finally, this rule establishes USML control in subparagraph (f)(2) of certain chemical or biological agent equipment only when it contains reagents, algorithms, coefficients, software, libraries, spectral databases, or alarm set point levels developed under a Department of Defense contract or other funding authorization.

EAR:

This final rule creates five new “600 series” ECCNs in CCL Category 1 (ECCNs 1A607, 1B607, 1C607, 1D607, and 1E607) that clarify the EAR controls applicable to certain dissemination, detection and protection “equipment” and related items that the President has determined no longer warrant control under USML Category XIV. Terms such as “part,” “component” “accessories,” “attachments,” and “specially designed” are applied in the same manner in this rule as those terms are defined in Section 772.1 of the EAR. In addition, to assist exporters in determining the control status of their items, a “Specially Designed” Decision Tool and a CCL Order of Review Decision Tool are available on the BIS Web site at: http://www.bis.doc.gov/index.php/decision-tree-tools.

  • New ECCN 1A607 Military dissemination “equipment” for riot control agents, military detection and protection “equipment” for toxicological agents (including chemical, biological, and riot control agents), and related commodities. In new ECCN 1A607, paragraphs .a through .d, paragraph .i, and paragraphs .l through .w are reserved. Paragraph .e of ECCN 1A607 controls “equipment” “specially designed” for military use and for the dissemination of any of the riot control agents controlled in ECCN 1C607.a. Paragraph .f of ECCN 1A607 controls protection “equipment” “specially designed” for military use and for defense against either materials controlled by USML Category XIV(a) or (b) or any of the riot control agents in new ECCN 1C607.a. Paragraph .g of ECCN 1A607 controls decontamination “equipment” not controlled by USML Category XIV(f) that is “specially designed” for military use and for the decontamination of objects contaminated with materials controlled by USML Category XIV(a) or (b). Paragraph .h controls “equipment” not controlled by USML Category XIV(f) that is “specially designed” for military use and for the detection or identification of either materials specified by USML Category XIV(a) or (b) or riot control agents controlled by new ECCN 1C607.a. Paragraph .j controls “equipment” “specially designed” to: (i) Interface with a detector, shelter, vehicle, vessel, or aircraft controlled by the USML or a “600 series” ECCN; and (ii) collect and process samples of articles controlled in USML Category XIV(a) or (b). Paragraph .k controls medical countermeasures that are “specially designed” for military use (including pre- and post- treatments, antidotes, and medical diagnostics) and “specially designed” to counter chemical agents controlled by USML Category XIV(a). Paragraph .x controls “parts,” “components,” “accessories,” and “attachments” that are “specially designed” for a commodity controlled under ECCN 1A607.e, .f, .g, .h, or .j or a defense article controlled in USML Category XIV(f) and that are not enumerated or otherwise described elsewhere in the USML.
  • New ECCN 1B607 Military test, inspection, and production “equipment” and related commodities “specially designed” for the “development,” “production,” repair, overhaul, or refurbishing of commodities identified in ECCN 1A607 or 1C607, or defense articles enumerated or otherwise described in USML Category XIV.
  • In new ECCN 1B607, paragraph .a controls “equipment,” not including incinerators, that is “specially designed” for the destruction of chemical agents controlled by USML Category XIV(a). Paragraph .b of ECCN 1B607 controls test facilities and “equipment” that are “specially designed” for military certification, qualification, or testing of commodities controlled by new ECCN 1A607.e, .f, .g, .h, or .j or by USML Category XIV(f), except for XIV(f)(1). Paragraph .c of ECCN 1B607 controls tooling and “equipment” “specially designed” for the “development,” “production,” repair, overhaul, or refurbishing of commodities controlled under new ECCN 1A607.e, .f, .g, .h, or .j or USML Category XIV(f). Paragraphs .d through .w are reserved. Paragraph .x controls “parts,” “components,” “accessories,” and “attachments,” not enumerated or otherwise described elsewhere in the USML, that are “specially designed” for a commodity controlled by ECCN 1B607.b or .c or for a defense article controlled by USML Category XIV(f). As indicated above, ECCN 1B607.b does not control test facilities and “equipment” that are “specially designed” for military certification, qualification, or testing of commodities and are enumerated or otherwise described in USML Category XIV(f)(1), as set forth in State’s companion rule to this final rule (e.g., see the equipment in USML Category XIV(f)(1)(ii) that is “specially designed” for testing the articles controlled in paragraph (a), (b), (c), (e), or (f)(4) of USML Category XIV). In addition to the test facilities and “equipment” controlled by ECCN 1B607.b, see the tooling and “equipment” classified under ECCN 2B350 or 2B352 for producing the chemical/biological agents, precursors, or defoliants described in USML Category XIV(a), (b), (c), or (e). The EAR also control tooling and “equipment” to produce the antibodies/polynucleotides and vaccines described in USML Category XIV(g) and (h), respectively, as follows: lab “equipment” designated as EAR99 under the EAR; biological dual-use “equipment” (including protective “equipment”) classified under ECCN 2B352; and EAR-controlled biological systems for making vaccines (involving the use of mice, rabbits, etc.).
  • New ECCN 1C607?Tear gases, riot control agents and materials for the detection and decontamination of chemical warfare agents. New ECCN 1C607.a controls specified tear gases and riot control agents. Paragraph .b of ECCN 1C607 controls “biopolymers” not controlled by USML Category XIV(g) that are “specially designed” or processed for the detection or identification of chemical warfare (CW) agents specified by USML Category XIV(a) and the cultures of specific cells used to produce them. Paragraph .c controls specified “biocatalysts” and biological systems that are not controlled by USML Category XIV(g) and are “specially designed” for the decontamination or degradation of CW agents specified by USML Category XIV(a). Paragraph .d controls chemical mixtures not controlled by USML Category XIV(f) that are “specially designed” for military use for the decontamination of objects contaminated with materials specified by USML Category XIV(a) or (b).
  • New ECCN 1D607?“Software” “specially designed” for the “development,” “production,” operation, or maintenance of items controlled by 1A607, 1B607 or 1C607. New ECCN 1D607.a controls “software” “specially designed” for the “development,” “production,” operation, or maintenance of items controlled by ECCN 1A607, 1B607 or 1C607. Paragraph .b of ECCN 1D607 is reserved.
  • New ECCN 1E607?“Technology” “required” for the “development,” “production,” operation, installation, maintenance, repair, overhaul, or refurbishing of items controlled by ECCN 1A607, 1B607, 1C607, or 1D607. New ECCN 1E607.a controls “technology” “required” for the “development,” “production,” operation, installation, maintenance, repair, overhaul, or refurbishing of items controlled by ECCN 1A607, 1B607, 1C607, or 1D607. Paragraph .b of ECCN 1E607 is reserved.
  • Amendments to License Exceptions BAG and TMP related to Individual Protection “Equipment” in ECCN 1A607.f. This final rule amends the License Exception BAG provisions in Section 740.14(h) of the EAR to authorize exports, reexports, or in-country transfers of chemical or biological agent protective gear consistent with the requirements and restrictions described therein. In a corresponding change, this final rule also amends the License Exception TMP provisions in Section 740.9(a)(11) of the EAR to authorize temporary exports, reexports, or in-country transfers of chemical or biological agent protective gear consistent with the requirements and restrictions described therein. The amendments to License Exceptions BAG and TMP also change the requirements for Afghanistan to be consistent with those of the majority of other Country Group D:5 destinations (i.e., the U.S. person authorized to use the license exception must be affiliated with the U.S. Government and be traveling on official business or traveling in support of a U.S. Government contract). The same requirement applies to the use of these license exception provisions for Iraq, also a D:5 country, with the additional option that the U.S. person must be traveling to Iraq under a direct authorization by the Government of Iraq and engaging in activities for, on behalf of, or at the request of, the Government of Iraq. These amendments are also intended to ensure that the scope of these license exceptions, as they apply to chemical or biological agent protective gear controlled under new ECCN 1A607.f, conforms with the scope of the ITAR exemption for personal protective equipment in Section 123.17 of the ITAR (e.g., by correcting the provisions for Afghanistan, as described above, to be consistent with those of the majority of other Country Group D:5 destinations).

Military Importers and Exporters Beware: State Department Modifies Sanctions against Rosoboronexport

2016/01/19

By: Danielle McClellan

It is the significance of the target, Rosoboronexport, that makes this a noteworthy development.   According to its own website:

The Joint Stock Company Rosoboronexport, part of the Russian Technologies State Corporation, is the sole Russian state intermediary agency responsible for import/export of the full range of defense and dual-use end products, technologies and services.

Rosoboronexport was set up by RF President’s Decree 1834 of 4 November 2000 as a federal state unitary enterprise tasked to implement the national policy in the area of military-technical cooperation between Russia and foreign countries. Since 1 July 2011 Rosoboronexport has been operating as an open joint stock company.
Rosoboronexport operates under the strict supervision of the Russian President, the Russian Government, and in full conformity with the UN arms control treaties and the relevant international agreements.
Only Rosoboronexport has the right to supply the world market with a full range of arms and military equipment manufactured by Russia’s defense industrial complex and approved to be exported. Rosoboronexport accounts for more than 85% of Russia’s arms exports.
Rosoboronexport is among the major operators in the world market for arms and military equipment. Rosoboronexport cooperates with more than 70 countries.

The official status of the exclusive state intermediary agency gives Rosoboronexport unique opportunities to expand long-term mutually beneficial cooperation with foreign partners, provide guaranteed state support of all export-import operations, and strengthen Russia’s leadership in the world arms market.

On September 2, 2015 the US Government  released the following notice: ‘No department or agency of the United States Government may procure or enter into any contract for the procurement of any goods, technology, or services from [Rosoboronexport (ROE) (Russia) and any successor, sub-unit, or subsidiary thereof], except to the extent that the Secretary of State otherwise may determine .  .  .  .’’

The Department of State has now released (November 19, 2015) the following modification to the September notice: “The United States Government has decided to modify the measure described above against ROE and any successor, sub-unit, or subsidiary thereof as follows. The measure described above shall not apply to subcontracts at any tier with ROE and any successor, sub-unit, or subsidiary thereof made on behalf of the United States Government for goods, technology, and services for the maintenance, repair, overhaul, or sustainment of Mi-17 helicopters for the purpose of providing assistance to the security forces of Afghanistan, as well as for the purpose of combating terrorism and violent extremism globally.”

This modification includes subcontracts for the purchase of spare parts, supplies, and related services for these purposes and can be applied retroactively as of the effective dates of the sanctions (they will remain in place for 2 years unless otherwise determined by the US Government).

This change does not apply to any other measures imposed pursuant to INKSNA.

Federal Register Notice: https://www.gpo.gov/fdsys/pkg/FR-2015-11-25/pdf/2015-30058.pdf


Intelligence Analytics Software is on the USML…In Case You Read it Wrong

2016/01/19

By: Danielle McClellan

This notice, while it impacts few exporters, should be clear reminder that as DDTC starts the results of the wide ranging changing changes to the US Munitions List over the past few years, we are bound to see adjustments.   DDTC tends to call these changes to the USML something like clarifications of current policy, instead of changes to the USML.  Regardless of what they are called, exporters should be constantly on the lookout for clarifications or changes to various aspects of the USML and CCL changes made during Export Control Reform.

In this case, the State Department revised paragraph (b) of Category XI after determining that the current language may lead exporters to determine that certain intelligence analytics software is no longer controlled on the USML, when in fact it still is.

On July 1, 2014 DDTC published a final rule amending Category XI of the USML (effective December 30, 2014). This temporary revision clarifies that the scope of control is in existence prior to December 30, 2014 for USML paragraph (b) and directly related software in paragraph (d) remains in effect. This rule inserts the words, “analyze and produce information from” and by adding software description of items controlled.

On July 2, 2015 a final rule was published that temporarily modified Category XI(b) until December 29, 2015. This rule extends the July 2, 2015 modification to August 30, 2017 to allow DDTC more time to consider the controls in Category XI(b).

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2015-12-16/pdf/2015-31528.pdf


Don’t Exclude Software from Category XI Just Yet!

2015/09/11

By: Danielle McClellan

The Department of State has found that after the final rule revising Category XI of the USML (79 FR 70958) was published the revision of paragraph (b) may have caused exporters to believe that certain intelligence analytics software was excluded, this is not true. Due to this confusing language State Department is temporary revising USML Category XI paragraph (b) until a long term solution is developed.

The temporary revision will simply clarify that the scope of control in paragraph (d) remains the same. The changes can be seen below:

(2) In Sec. 121.1, under Category XI, revise paragraph (b), effective July 2, 2015 to read as follows:

Sec. 121.1 The United States Munitions List.

Category XI–Military Electronics

*(b) Electronic systems, equipment or software, not elsewhere enumerated in this sub-chapter, specially designed for intelligence purposes that collect, survey, monitor, or exploit, or analyze and produce information from, the electromagnetic spectrum (regardless of transmission medium), or for counteracting such activities.

 

(3) In Sec. 121.1, under Category XI, revise paragraph (b), effective December 29, 2015, to read as follows:

Sec. 121.1 The United States Munitions List.

Category XI–Military Electronics

*(b) Electronic systems or equipment, not elsewhere enumerated in this sub-chapter, specially designed for intelligence purposes that collect, survey, monitor, or exploit the electromagnetic spectrum (regardless of transmission medium), or for counteracting such activities.

Federal Register Notice: http://www.gpo.gov/fdsys/pkg/FR-2015-07-02/pdf/2015-16489.pdf