U.S. Government Implements Changes to Iraq Export, Reexport, Licensing Policies, Etc
In the July 30, 2004 Federal Register, an Executive Order (EO), an interim rule, and a final rule were published in order to, among other things, set forth changes to the U.S. government's export, reexport, and licensing policies with respect to Iraq.
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This is Part III of a multipart series of summaries of the order and rules, and focuses on license exceptions and special licenses, as discussed in the preamble of the Bureau of Industry and Security's (BIS') interim rule. See future issues of ITT for summaries of the Office of Foreign Assets Control's (OFAC's) final rule.
(See ITT's Online Archives or 08/04/04 news, 04080420, for Part I of BP summary, which contains a brief overview of the EO, BIS interim rule, and OFAC final rule. See ITT's Online Archives or 08/09/04 news, (Ref:04080930), for Part II of BP summary, which highlights license requirements for exports, reexports, and transfers, provides guidance on the transition of licensing responsibility from OFAC to BIS, etc.)
License Exceptions
The following are highlights of the preamble to BIS' interim rule with respect to license exceptions (the BIS interim rule is effective July 30, 2004):
License exceptions generally available to Group D countries. BIS states that the interim rule removes Iraq from Country Group E:1, found in Supplement 1 to 15 CFR part 740. BIS explains that Iraq has been added to Country Group D:1 and remains in Country Groups D:2, D:3 and D:4. BIS adds that although Iraq currently remains on the list of designated terrorist-supporting countries, the anti-terrorism (AT) controls that apply to such countries under section 6(j) of the EAA will not apply to Iraq pursuant to Presidential Determination 2003-23.
According to BIS, countries in Country Group D:1 are of concern for national security reasons, while countries in Country Groups D:2, D:3 and D:4 are of concern for weapons proliferation reasons. As a result of Iraq's inclusion in Country Groups D:1 to D:4, the following License Exceptions may be available: CIV, CTP, TMP, RPL, GOV, GFT, TSU, BAG, AVS, ENC and KMI.
However, BIS notes that a specific transaction is eligible for a License Exception only if it satisfies all of the terms and conditions of the relevant License Exception and is not excluded by any of the restrictions that apply to all License Exceptions, as set forth in the EAR (including, specifically, 15 CFR 740.2).
Expanded license exception availability. BIS states that the interim rule adds Iraq to Computer Tier 3 for exports or reexports of high performance computers under License Exception CTP (15 CFR 740.7). BIS notes that countries in Tier 3 are eligible to receive computers up to and including 190,000 millions of theoretical operations per second (MTOPS) under License Exception CTP.
According to BIS, certain transfers within Iraq of computers up to and including 190,000 MTOPS will now require a license. The export or reexport to Iraq of high performance computers exceeding 190,000 MTOPS continues to require a license. In addition, transfers within Iraq of computers exceeding 190,000 MTOPS will now also require a license.
Special Iraq Reconstruction License (SIRL)
According to the preamble, this interim rule further establishes a new 15 CFR part 747 of the EAR entitled Special Iraq Reconstruction License (SIRL), highlights of which include:
SIRL covers exports, reexports, & transfers in furtherance of civil reconstruction, etc. 15 CFR part 747 authorizes exports or reexports to Iraq, or transfers within Iraq, of items in furtherance of civil reconstruction and other projects funded by specified entities including the U.S. Government.
Also included for purposes of the SIRL are projects funded by the United Nations, the World Bank, and the International Monetary Fund, and their affiliated entities (i.e., International Bank for Reconstruction and Development, International Finance Corporation, and United Nations Development Programme) as well as any other entities the U.S. Government may designate.
EAR items except those controlled for MT, NP, or CB reasons are eligible for SIRL. BIS states that all items subject to the EAR except items controlled for missile technology (MT), nuclear nonproliferation (NP), or chemical and biological weapons (CB) reasons are eligible for export or reexport under a SIRL.
SIRL application process. Applicants may apply for a SIRL by submitting a completed BIS Multipurpose Application form (BIS-748P), Item Appendix (BIS-748P-A), and End-User Appendix (BIS-748P-B), plus narrative statements, as described in 15 CFR 747.4. BIS states that it will process SIRL applications expeditiously.
To approve a SIRL, BIS must be satisfied that the parties to the license will adhere to the conditions of the license and the EAR and that approval of the application will not be detrimental to U.S. national security, nonproliferation, or other foreign policy interests. A license is required to transfer within Iraq any item exported or reexported pursuant to a SIRL to an end-user not identified on the end-user appendix.
-written comments on BIS' interim rule are due by August 30, 2004
BIS Contact - Joan Roberts (202) 482-4252
BIS Interim Rule (D/N 040302078-4078-01, FR Pub 07/30/04) available at http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-17532.pdf
OFAC Final Rule (FR Pub 07/30/04) available athttp://a257.g.akamaitech.net/7/257/2422/30jul20040900/edocket.access.gpo.gov/2004/pdf/04-17636.pdf
EO 13350 (FR Pub 07/30/04) available at http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-17615.pdf