20 April 2010

[Federal Register: April 20, 2010 (Volume 75, Number 75)]
[Rules and Regulations]               
[Page 20520-20522]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20ap10-5]                         

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 772 and 774

[Docket No. 0912031426-0047-01]
RIN 0694-AE79

 
Revisions to the Export Administration Regulations Based on the 
2009 Missile Technology Control Regime Plenary Agreements

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: The Bureau of Industry and Security (BIS) is amending the 
Export Administration Regulations (EAR) to reflect changes to the 
Missile Technology Control Regime (MTCR) Annex that were agreed to by 
MTCR member countries at the November 2009 Plenary in Rio de Janeiro, 
Brazil. In addition, this rule corrects an error published in a final 
rule on December 10, 2009 (74 FR 65662).

DATES: Effective Date: This rule is effective: April 20, 2010. Although 
there is no formal comment period, public comments on this regulation 
are welcome on a continuing basis.

ADDRESSES: You may submit comments, identified by RIN 0694-AE79, by any 
of the following methods:
    E-mail: publiccomments@bis.doc.gov Include ``RIN 0694-AE79'' in the 
subject line of the message.
    Fax: (202) 482-3355. Please alert the Regulatory Policy Division, 
by calling (202) 482-2440, if you are faxing comments.
    Mail or Hand Delivery/Courier: Timothy Mooney, U.S. Department of 
Commerce, Bureau of Industry and Security, Regulatory Policy Division, 
14th St. & Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230, 
Attn: RIN 0694-AE79.
    Send comments regarding the collection of information associated 
with this rule, including suggestions for reducing the burden, to 
Jasmeet Seehra, Office of Management and Budget (OMB), by e-mail to 
Jasmeet_K._Seehra@omb.eop.gov, or by fax to (202) 395-7285; and to 
the U.S. Department of Commerce, Bureau of Industry and Security, 
Regulatory Policy Division, 14th St. & Pennsylvania Avenue, NW., Room 
2705, Washington, DC 20230. Comments on this collection of information 
should be submitted separately from comments on the final rule (i.e. 
RIN 0694-AE79)--all comments on the latter should be submitted by one 
of the three methods outlined above.

FOR FURTHER INFORMATION CONTACT: Dennis L. Krepp, Nuclear and Missile 
Technology Controls Division, Bureau of Industry and Security, 
Telephone: (202) 482-1309.

SUPPLEMENTARY INFORMATION:

Background

    The Missile Technology Control Regime (MTCR) is an export control 
arrangement among 34 nations, including most of the world's advanced 
suppliers of ballistic missiles and missile-related materials and 
equipment. The regime establishes a common export control policy based 
on a list of controlled items (the Annex) and on guidelines (the 
Guidelines) that member countries implement in accordance with their 
national export controls. The goal of maintaining the Annex and the 
Guidelines is to stem the flow into the global marketplace of missile 
systems capable of delivering weapons of mass destruction.
    While the MTCR was originally created to prevent the spread of 
missiles capable of carrying a nuclear warhead, it was expanded in 
January 1992 to also address threats associated with delivery systems 
for chemical and biological weapons. MTCR members voluntarily pledge to 
adopt the regime's export Guidelines and to restrict the export of 
items contained in the regime's Annex. The implementation of the 
regime's Guidelines is effectuated through the national export control 
laws and policies of the regime members.

Amendments to the Export Administration Regulations

    This final rule revises the Export Administration Regulations (EAR) 
to reflect changes to the MTCR Annex agreed to at the November 2009 
Plenary in Rio de Janeiro, Brazil. Corresponding MTCR Annex references 
are provided below for the MTCR Annex changes agreed to at the November 
2009 Plenary.
    MTCR member countries agreed to clarify the meaning of ``production 
facilities'', the export of which is prohibited by the MTCR Guidelines 
for Category I. This clarification is reflected in the changes set 
forth in section 772.1 (Definitions of Terms as Used in the Export 
Administration Regulations), which amend the definition of the term 
``production facilities'' to add the word production before the word 
equipment. The definition will therefore state that ``production 
facilities'' means ``production equipment'' and specially designed 
``software'' therefor integrated into installations for ``development'' 
or for one or more phases of ``production'' (MTCR Annex Change 
Definitions: ``Production Facilities''). This clarification more 
specifically describes the type of equipment that is included under the 
definition of ``production facilities''. BIS expects this change to 
have no impact on license applications.
    In addition, this rule amends the Commerce Control List (CCL) 
(Supplement No. 1 to Part 774 of the EAR) to reflect changes to the 
MTCR Annex. Specifically, the following Export Control Classification 
Numbers (ECCNs) are affected:
    ECCN 1C117 is amended by revising the heading and the ``items'' 
paragraph in the List of Items Controlled section (MTCR Annex Change 
Category II: Item 6.C.7). A significant agreement was reached by MTCR 
member countries on the control of tungsten and molybdenum on the MTCR 
Annex. New controls were added for copper infiltrated tungsten, silver 
infiltrated tungsten, and tungsten alloys in solid

[[Page 20521]]

form (including dimensional aspects). These controls are applied when 
these materials are used for fabrication of missile components for 
rockets or missiles capable of achieving a ``range'' equal to or 
greater than 300 km. This change addresses the issue of a proliferation 
concern identified by MTCR member countries related to refractory 
metals used for missile components. Specifically, the control text for 
tungsten and molybdenum on the MTCR Annex was modified to include new 
controls for solid tungsten and tungsten alloy billets for the 
fabrication of missile components. This revision to ECCN 1C117 
implements this expansion of controls.
    The heading of ECCN 9A101 is amended by removing the phrase 
``(including turbocompound engines)'' because agreement was reached by 
MTCR member countries on the deletion of this term. This term is 
deleted from this ECCN heading because the international community does 
not refer to turbojet or turbofan engines as turbo-compound engines. 
Accordingly, turbo-compound engines are not meant to be included within 
the scope of this ECCN entry. The missile proliferation concern for 
these types of engines is on turbojet and turbofan engines, so it is 
appropriate to remove engines that are not those types of engines from 
this ECCN, especially in this case where this term is not used by the 
international community to describe these engines. Additionally, turbo-
compound engines are not a missile proliferation concern. This change 
is expected to have a minimal impact on license applications.

Correction and Clarification to EAR Final Rule

    The 2008 MTCR Plenary implementation rule published on November 9, 
2009 (74 FR 57581) clarified ECCN 1C011 by revising the License 
Requirements and ``items'' paragraph of ECCN 1C011 by deleting the 
reference to boron carbide and replacing it with boron alloys in the MT 
control section of this ECCN, and by making conforming changes to the 
MT and NS License Requirements for this ECCN. To effect this change, 
reference to boron alloys was included in the November 2009 final rule 
in a new ``items'' paragraph in ECCN 1C011.e, but reference to boron 
carbide was retained in the NS controlled section of this ECCN because 
boron carbide is listed on the Wassenaar control list and therefore is 
still controlled under this ECCN. Subsequently, an EAR final rule 
published on December 10, 2009 (74 FR 65662) inadvertently removed the 
new paragraph 1C011.e that was added in the November 2009 MTCR Plenary 
rule.
    When drafting this rule, BIS considered reinserting paragraph 
1C011.e into the ECCN entry. Upon consideration, BIS determined that 
rather than replacing the removed paragraph 1C011.e, it would be better 
to add boron alloys to ECCN 1C111. This addition is an improved means 
of controlling boron alloys as metal fuels on the CCL because grouping 
the boron alloys with other propellants and constituent chemicals for 
propellants will assist the regulated community in classifying these 
items on the CCL. This rule effects this change by revising ECCNs 1C011 
and 1C111. Specifically, ECCN 1C111 is amended by creating two sub-sets 
of metal fuels with a particle size of less than 60 [mu]m controlled 
under ``items'' paragraph a.2 of this ECCN entry: metal fuels 
consisting 97% by weight or more of any of the following: Zirconium, 
Beryllium, Magnesium or Alloys of the these three metals (controlled 
under paragraphs a.2.a.1, a.2.a.2, a.2.a.3 or a.2.a.4); and metal fuels 
consisting of boron alloys with a purity of 85% by weight or more 
(controlled under paragraph a.2.b). The boron alloys that are being 
added to a.2.b are the boron alloys that were controlled under 1C011.e 
prior to their inadvertent removal in the December 10, 2009 final rule. 
Lastly, ECCN 1C011 is amended by revising the NS and MT control 
sections of this ECCN to remove the references to paragraph 1C011.e. 
This is a conforming change associated with the shift of boron alloys 
from 1C011.e to 1C111.a.2.b. These changes to ECCN 1C011 and 1C111 are 
expected to have no impact on license applications.

Savings Clause

    Shipments of items removed from eligibility for a License Exception 
or export or reexport without a license (NLR) as a result of this 
regulatory action that were on dock for loading, on lighter, laden 
aboard an exporting or reexporting carrier, or en route aboard a 
carrier to a port of export or reexport, on April 20, 2010, pursuant to 
actual orders for export or reexport to a foreign destination, may 
proceed to that destination under the previous eligibility for a 
License Exception or export or reexport without a license (NLR) so long 
as they are exported or reexported before May 20, 2010. Any such items 
not actually exported or reexported before midnight, on May 20, 2010, 
require a license in accordance with this rule.
    Although the Export Administration Act expired on August 20, 2001, 
the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 
2001 Comp., p. 783 (2002), as extended by the Notice of August 13, 2009 
(74 FR 41325 (August 14, 2009)), has continued the Export 
Administration Regulations in effect under the International Emergency 
Economic Powers Act.

Rulemaking Requirements

    1. This final rule has been determined to be significant for 
purposes of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with a collection of information, subject to the 
requirements of the Paperwork Reduction Act, unless that collection of 
information displays a currently valid Office of Management and Budget 
Control Number. This rule contains a collection of information subject 
to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). This 
collection has been approved by the Office of Management and Budget 
under control number 0694-0088, ``Multi-Purpose Application,'' which 
carries a burden hour estimate of 58 minutes for a manual or electronic 
submission.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under E.O. 13132.
    4. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring notice of proposed rulemaking, the opportunity for 
public participation, and a delay in effective date, are inapplicable 
because this regulation involves a military and foreign affairs 
function of the United States (5 U.S.C. 553(a)(1)). Further, no other 
law requires that a notice of proposed rulemaking and an opportunity 
for public comment be given for this final rule. Because a notice of 
proposed rulemaking and an opportunity for public comment are not 
required to be given for this rule under the Administrative Procedure 
Act or by any other law, the analytical requirements of the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.) are not applicable. Therefore, 
this regulation is issued in final form.

List of Subjects

15 CFR Part 772

    Exports.

15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

0
Accordingly, parts 772 and 774 of the Export Administration Regulations 
(15

[[Page 20522]]

CFR parts 730-774) are amended as follows:

PART 772--[AMENDED]

0
1. The authority citation for 15 CFR part 772 continues to read as 
follows:

    Authority:  50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 
13, 2009, 74 FR 41325 (August 14, 2009).

0
2. Section 772.1 is amended by revising the definition of ``production 
facilities'', as set forth below:


Sec.  772.1  Definitions of terms as used in the Export Administration 
Regulations (EAR).

* * * * *
    Production Facilities. (MTCR Context only). (Cat 7 and 9)--Means 
``production equipment'' and specially designed ``software'' therefor 
integrated into installations for ``development'' or for one or more 
phases of ``production''.
* * * * *

PART 774--[AMENDED]

0
3. The authority citation for 15 CFR part 774 continues to read as 
follows:

    Authority:  50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
10 U.S.C. 7420; 10 U.S.C. 7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et 
seq., 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42 
U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22 
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 13026, 61 FR 58767, 3 CFR, 
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783; Notice of August 13, 2009, 74 FR 41325 (August 14, 2009).


0
4. In Supplement No. 1 to part 774, under Category 1, Export Control 
Classification Number (ECCN) 1C011 is amended by revising the first two 
entries in the table under the ``Reason for Control'' heading in the 
License Requirements section, to read as follows:

Supplement No. 1 to Part 774--The Commerce Control List

* * * * *

1C011 Metals and Compounds, as Follows (see List of Items Controlled)

License Requirements

    Reason for Control: * * *

------------------------------------------------------------------------
               Control(s)                         Country chart
------------------------------------------------------------------------
NS applies to entire entry.............  NS Column 1
MT applies to 1C011.a and .b (for        MT Column 1
 boron).
------------------------------------------------------------------------

* * * * *

0
5. In Supplement No. 1 to part 774, under Category 1, ECCN 1C111 is 
amended by revising paragraph a.2 of the ``items'' paragraph in the 
List of Items Controlled section, to read as follows:

1C111 Propellants and Constituent Chemicals for Propellants, Other Than 
Those Specified in 1C011, as Follows (see List of Items Controlled)

* * * * *

List of Items Controlled

* * * * *
    Items:
* * * * *
    a.2. Metal fuels, other than that controlled by the U.S. 
Munitions List, in particle sizes of less than 60 x 10-6 
m (60 micrometers), whether spherical, atomized, spheroidal, flaked 
or ground, as follows:
    a.2.a. Consisting of 97% by weight or more of any of the 
following:
    a.2.a.1. Zirconium;
    a.2.a.2. Beryllium;
    a.2.a.3. Magnesium; or
    a.2.a.4. Alloys of the metals specified by a.2.a.1 to a.2.a.3 
above.
    Technical Note: The natural content of hafnium in the zirconium 
(typically 2% to 7%) is counted with the zirconium.
    a.2.b. Boron alloys with a purity of 85% by weight or more.
* * * * *

0
6. In Supplement No. 1 to part 774, under Category 1, ECCN 1C117 is 
amended:
0
a. By revising the heading; and
0
b. By revising the ``items'' paragraph in the List of Items Controlled 
section, to read as follows:

1C117 Materials for the Fabrication of Missile Components for Rockets 
or Missiles Capable of Achieving a ``Range'' Equal to or Greater Than 
300 km, as Follows (See List of Items Controlled)

* * * * *

List of Items Controlled

* * * * *
    Items:
    a. Tungsten and alloys in particulate form with a tungsten 
content of 97% by weight or more and a particle size of 50 x 
10-6 m (50 [mu]m) or less;
    b. Molybdenum and alloys in particulate form with a molybdenum 
content of 97% by weight or more and a particle size of 50 x 
10-6 m (50 [mu]m) or less;
    c. Tungsten materials in the solid form having all of the 
following:
    c.1. Any of the following material compositions:
    c.1.a. Tungsten and alloys containing 97% by weight or more of 
tungsten;
    c.1.b. Copper infiltrated tungsten containing 80% by weight or 
more of tungsten; or
    c.1.c. Silver infiltrated tungsten containing 80% by weight or 
more of tungsten; and
    c.2. Able to be machined to any of the following products:
    c.2.a. Cylinders having a diameter of 120 mm or greater and a 
length of 50 mm or greater;
    c.2.b. Tubes having an inner diameter of 65 mm or greater and a 
wall thickness of 25 mm or greater and a length of 50 mm or greater; 
or
    c.2.c. Blocks having a size of 120 mm x 120 mm x 50 mm or 
greater.


0
7. In Supplement No. 1 to part 774, under Category 9, ECCN 9A101 is 
amended by revising the heading, to read as follows:

9A101 Turbojet and Turbofan Engines, Other Than Those Controlled by 
9A001, as Follows (See List of Items Controlled)

* * * * *

    Dated: April 9, 2010.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2010-8919 Filed 4-19-10; 8:45 am]
BILLING CODE 3510-33-P