9 December 2010

Commerce Control List Revisions RFC

[Federal Register: December 9, 2010 (Volume 75, Number 236)]
[Proposed Rules]               
[Page 76664-76666]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09de10-20]                         

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 774

[Docket No. 101112562-0577-01]

 
Commerce Control List: Revising Descriptions of Items and Foreign 
Availability

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Advance notice proposed rulemaking.

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SUMMARY: As part of the President's export control reform initiative, 
the Bureau of Industry and Security (BIS) seeks public comments on how 
the descriptions of items controlled on the Commerce Control List (CCL) 
of the Export Administration Regulations (EAR) could be more clear and 
positive and ``tiered'' in a manner consistent with the control 
criteria the Administration has developed as part of the reform effort. 
The request for comments on how items on the CCL could be tiered 
includes a request for comments on the degree to which a controlled 
item provides the United States with a critical, substantial, or 
significant military or intelligence advantage; and the availability of 
the item outside certain groups of countries.

DATES: Comments must be received by February 7, 2011.

ADDRESSES: Written comments on this notice of inquiry may be sent by e-
mail to publiccomments@bis.doc.gov. Include ``Notice of Inquiry--CCL'' 
in the subject line of the message. Comments may also be submitted by 
mail or hand delivery to Timothy Mooney, Office of Exporter Services, 
Regulatory Policy Division, Bureau of Industry and Security, Department 
of Commerce, 1401 Constitution Avenue, NW., Room 2705, Washington, DC 
20230, ATTN: Notice of Inquiry--CCL.

FOR FURTHER INFORMATION CONTACT: Timothy Mooney, Regulatory Policy 
Division, Bureau of Industry and Security, Telephone: (202) 482-2440 begin_of_the_skype_highlighting            (202) 482-2440      end_of_the_skype_highlighting, 
E-mail: tmooney@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

    A core task of the Administration's Export Control Reform 
Initiative is to enhance national security by reviewing and revising, 
as necessary and to the extent permitted by law and regime obligations, 
the lists of items (i.e., commodities, software, and technology) 
controlled for export and reexport so that they (1) are clearer and 
more ``positive'' in nature and (2) can more easily be screened into 
three tiers based upon a set of criteria. The Administration has 
developed a three-tiered set of criteria to help determine whether a 
license should be required or a license exception should be available 
to allow license-free export, reexport, or transfer (in-country) of a 
given item, with appropriate conditions, to various destinations. The 
three-tiered set of criteria has two primary elements--(a) the degree 
to which an item provides the United States with a military or 
intelligence advantage and (b) the availability of the item outside the 
United States, its close allies and multilateral export control regime 
partners.

1. Request for Comments on How To Make the CCL More Clear and 
``Positive''

a. Background--The Current Commerce Control List and the Reform Effort
    The Commerce Control List (CCL), which is in Supplement No. 1 to 
part 774 of the Export Administration Regulations (EAR) (15 CFR part 
774), is the list of items for which BIS controls the export, reexport, 
and transfer (in-country). The CCL's ten categories identify controlled 
items by five-character Export Control Classification Numbers (ECCNs). 
Items that are not listed on the CCL but are still ``subject to the 
EAR'' are designated as ``EAR99'' items.
    Most items on the CCL are controlled in accordance with the United 
States' commitments to the four multilateral export control regimes, 
i.e., the Wassenaar Arrangement on Export Controls for Conventional 
Arms and Dual-Use Goods and Technologies, the Missile Technology 
Control Regime, the Australia Group, and the Nuclear Suppliers Group. 
Members of the regimes have the discretion to clarify the descriptions 
of regime-controlled items on their domestic control lists.
    BIS also has items on the CCL that are controlled unilaterally by 
the United States, and thus generally has the authority to clarify the 
descriptions of those items. For purposes of this notice, a 
unilaterally controlled item is any item listed on the CCL that is not 
listed on a control list of one of the four multilateral export control 
regimes. These unilaterally controlled items are typically listed in 
the ``900'' series on the CCL, such as ECCNs 1C998 or 9A980, but many 
multilaterally controlled items (i.e., items listed in the ECCNs in the 
``000'', ``100'', ``200'' and ``300'' series) also include reasons for 
control that are unilateral, such as an item in the ``000'' series that 
is controlled for national

[[Page 76665]]

security (NS) reasons but is also controlled for antiterrorism (AT) 
reasons.
    The CCL is mostly a ``positive'' control list that describes items 
using objective criteria, such as qualities to be measured (e.g., 
accuracy, speed, and wavelength), units of measure (e.g., hertz, 
horsepower, and microns), or other precise descriptions, rather than 
broad, open-ended, subjective, catch-all, or design intent-based 
criteria. However, not all ECCNs contain ``positive'' descriptions and 
some descriptions could be clearer and more specific. The 
Administration wants the lists of items controlled pursuant to export 
control laws and regulations (i.e., the CCL and the United States 
Munitions List (USML) (22 CFR part 121) of the International Traffic in 
Arms Regulations (ITAR) (22 CFR parts 120 through 130)) to be 
sufficiently ``positive,'' clear, and precise so that persons, 
including persons who are not knowledgeable about U.S. export controls, 
who understand the technical parameters, characteristics, and 
capabilities of an item ordinarily will be able to determine its export 
control classification and jurisdictional status without needing to 
consult the government for an interpretation. For these reasons, BIS 
seeks public comment on how to improve the descriptions of items on the 
CCL that are unclear or that use vague, open-ended, or subjective 
criteria.
b. The Types of Comments BIS Seeks Pertaining to the Text of the ECCNs
    If possible, suggestions on ways to improve the descriptions of 
items on the CCL should reflect internationally accepted standards and 
use industry-standard terms and references. Where objective criteria 
are missing from ECCNs, BIS seeks specific suggestions on what 
technical parameters, characteristics, thresholds, and capabilities 
should be used to describe the item. All suggestions should include 
proposed revisions to the text of ECCNs or proposed Technical Notes to 
ECCNs that explain terms or phrases used in the ECCN. Suggestions may 
include proposed revisions to the text of ECCNs to rearrange the order 
of words or technical parameters to make the entries more clear. All 
suggestions should contain an explanation, with supporting materials if 
available, of why the proposed change is needed to the ECCN and why the 
proposed changes would make the ECCN more clear and positive than the 
current ECCN.

2. Request for Comments on the ``Tiering'' of Items on the CCL

a. Background--The Criteria Used in the Reform Effort for Evaluating 
Controlled Items
    The Administration is considering whether to amend, to the extent 
permitted by law and U.S. regime obligations, the lists of export 
controlled items--the CCL and the USML--and related licensing policies 
to accord with new criteria that focus controls on the most sensitive 
items. These criteria would place items listed on these two control 
lists into three tiers. Tier 1 items are (a) weapons of mass 
destruction (WMD); (b) WMD-capable unmanned delivery system; (c) 
plants, facilities, or items specially designed for producing, 
processing, or using WMDs, special nuclear materials, or WMD-capable 
unmanned delivery systems; or (d) items almost exclusively available 
from the United States and which provide a critical military or 
intelligence advantage to the United States. Tier 2 items are almost 
exclusively available from regime partners or adherents and provide a 
substantial military or intelligence advantage to the United States, or 
make a substantial contribution to the indigenous development, 
production, use, or enhancement of a Tier 1 or Tier 2 item. Tier 3 
items are more broadly available and provide a significant military or 
intelligence advantage to the United States or make a significant 
contribution to the indigenous development, production, use, or 
enhancement of a Tier 1, 2, or 3 item, or are otherwise controlled for 
national security, foreign policy, or human rights reasons. Thus, an 
aspect of the criteria the Administration has developed is the degree 
to which a controlled item is available outside of different groups of 
countries.
    The following are definitions of several of the key terms and 
phrases used in the tiered criteria set forth above. The term ``almost 
exclusively available'' means that the item is only available from a 
very small number of other countries that have in place effective 
export controls on the item. The term ``critical'' means providing a 
capability with respect to which the United States cannot afford to 
fall to parity and that would pose a grave threat to U.S. national 
security if not controlled (i.e., a ``crown jewel''). Examples of 
``grave threat to U.S. national security'' include: Armed hostilities 
against the United States or its allies; disruption of foreign 
relations vitally affecting the national security; the compromise of 
vital national defense plans or complex crypto-logic and communications 
intelligence systems; the revelation of sensitive intelligence 
operations; the disclosure of scientific or technological developments 
vital to national security; or critical assistance to foreign 
development or acquisition of WMD.
    The term ``substantial'' means providing a capability with respect 
to which the United States must maintain parity and that would pose a 
serious threat to U.S. national security if not controlled. Examples of 
a ``serious threat to the U.S. national security'' include: Disruption 
of foreign relations significantly affecting the national security; 
substantial impairment of a program or policy directly related to the 
national security; revelation of significant military plans or 
intelligence operations; compromise of scientific or technological 
developments important to national security; or substantial assistance 
to foreign development or acquisition of a WMD.
    The term ``significant'' means providing a capability that could be 
reasonably expected to cause damage to U.S. national security if not 
controlled. Examples of ``damage to U.S. national security'' include: 
Disruption of foreign relations affecting the national security; 
impairment of a program or policy directly related to the national 
security; revelation of military plans or intelligence operations; 
compromise of scientific or technological developments relating to 
national security; or assistance to foreign development or acquisition 
of a WMD.
    The basic premise of this aspect of the Export Control Reform 
effort is that if an item type falls within the scope of one of the 
criteria's three tiers, the item should be controlled for export, 
reexport, and in-country transfer at the level set forth in the 
licensing policy the U.S. Government is developing for that tier. The 
licensing policies to be assigned to each tier are still under 
development but generally, the highest tier of control will carry the 
most comprehensive license and compliance requirements. If an item is 
determined not to be within the scope of any of the three tiers, it 
should not be on a control list. Items that do not meet one of the 
primary elements of the tiered criteria, such as being significant for 
maintaining a military or intelligence advantage, that must nonetheless 
be controlled for a separate foreign policy, statutory, or multilateral 
obligation, will be identified as Tier 3 items with the required 
licensing policy.

[[Page 76666]]

b. The Types of Information BIS Seeks Regarding the How Items on the 
CCL Could Be Tiered
    As described above, there are two primary aspects to determining 
how an item on the CCL should be tiered--(i) the degree to which the 
item provides a military or intelligence advantage to the United States 
and (ii) its availability outside of certain groups of countries.
i. Request for Comments on How Items on the CCL Could Be Described 
Based on the Tier Criteria
    BIS seeks public comments on whether items on the CCL that are 
controlled for other than solely Anti-Terrorism (AT) or Crime Control 
(CC) reasons provide a ``critical,'' ``substantial,'' or 
``significant'' military or intelligence advantage to the United 
States, as these terms are defined above. This includes a request for 
comments on how existing ECCNs, down to the subparagraph level, could 
be further divided so that their descriptions are divided by technical 
or other objective characteristics consistent with the ``critical,'' 
``substantial,'' and ``significant'' criteria. The U.S. Government will 
make the final decisions on what types of CCL-listed items are within 
the scope of any of the three tiers and, thus, may or may not accept 
suggestions regarding how items should be tiered. Nonetheless, BIS is 
interested in the public's comments on the issue of how CCL-listed 
items can be described so that they are distinguished even within ECCNs 
by tier.
ii. Request for Comments on the Availability of Items on the CCL
    BIS also seeks public comments on whether items with the 
capabilities and characteristics described on the CCL, and controlled 
for other than solely anti-terrorism (AT) reasons or Crime Control (CC) 
reasons, are indigenously developed, produced, or enhanced (a) almost 
exclusively in the United States or (b) in destinations other than 
Argentina, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, the 
Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, 
Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, 
Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovakia, 
Slovenia, South Korea, Spain, Sweden, Switzerland, Turkey, Ukraine, or 
the United Kingdom. For purposes of this notice, ``enhanced'' means 
that (a) the basic characteristics, such as accuracy, capability, 
performance, or productivity of the item listed on the CCL are improved 
to provide greater functionality, and (b) the enhancement is effected 
in destinations outside the above-listed destinations. Information 
about the availability of these CCL-listed items will help BIS and the 
other relevant U.S. Government agencies determine the appropriate tier 
for these items.
    Public comments should do more than merely state that specific 
items are available outside the United States or this group of 
countries. Rather, they should include specific, objectively verifiable 
information regarding the availability--that is, the indigenous 
development, production, or enhancement of the CCL-listed items. The 
types of availability information that will be most useful to BIS 
include, for example, those set out in EAR section 768.6, which are 
evidence that the item is (i) available-in-fact, (ii) from a non-U.S. 
source, (iii) in sufficient quantity, and (iv) of comparable quality.
    For example, a public comment identifying a CCL-listed item as 
being manufactured outside the above-listed countries should ideally 
include (a) information about its foreign manufacturer(s), (b) relevant 
company catalogues or print-outs from company websites that describe 
the item's technical capabilities and parameters, and (c) a detailed, 
documented explanation of why these parameters equal or exceed those 
contained in the relevant ECCN entry. Company claims that are made in 
catalogues or Web sites that are based on accepted international 
standards or other internationally recognized certification authorities 
are more likely to be useful to BIS than claims that are more difficult 
to objectively verify.

3. Comments That Are Outside the Scope of This Notice

    As a separate regulatory initiative, BIS and the State Department 
are planning to coordinate on the parallel publishing of proposed rules 
in the Federal Register that would create a definition of the term 
``specially designed'' that would be common within the CCL and that 
would replace the definition of ``specifically designed'' in the ITAR. 
Accordingly, this notice of inquiry does not solicit comments 
pertaining to the use of this term. In addition, this notice does not 
seek public comment on whether an item should or should not be 
controlled on the CCL, whether the United States should ask any of the 
four export control regimes to change the controls on an item, or 
whether an item should be controlled differently for export and 
reexport to different countries. General comments on the overall reform 
process or the other aspects of current export controls are similarly 
outside the scope of this inquiry.
    Comments should be submitted to BIS as described in the ADDRESSES 
section of this notice by February 7, 2011.

    Dated: December 6, 2010.
Kevin J. Wolf,
Assistant Secretary of Commerce for Export Administration.
[FR Doc. 2010-30966 Filed 12-8-10; 8:45 am]
BILLING CODE 3510-33-P