For Microprocessor Technology: BIS Expands License Exceptions for "Deemed Exports," Adds Foreign National Review for CIV "Deemed Exports," Etc

Among other things, this final rule also establishes a new "Foreign National Review" (FNR) for deemed exports of microprocessor technology to certain eligible foreign nationals.

(See ITT's Online Archives or 10/31/03 news, 03103115, for BP summary of the proposed rule. Note that the proposed rule covers the subject matter of this final rule, as well as the subject matter of another final rule also published on November 5, 2004. See ITT's Online Archives or 11/09/04 news, 04110915, for BP summary of this other final rule, which pertains to the expansion of license exceptions for deemed exports of computer technology and source code, etc.)

Highlights of the Final Rule

License Exception CIV expanded for deemed exports of microprocessor technology, etc. This final rule authorizes under License Exception CIV deemed exports of technology controlled under Export Classification Control Number (ECCN) 3E001 for the development and production of microprocessors controlled under ECCN 3A001.a.3.c. with a CTP less than or equal to 40,000 MTOPS (regardless of word length or access width) to Country Group D:1 nationals. License Exception CIV does not apply to ECCN 3E001 technology for ECCN 3A001.a.3.c required for the development or production of other items controlled under ECCNs beginning with 3A, 3B, or 3C, or to ECCN 3E001 technology also controlled under ECCN 3E003.

In addition, this final rule authorizes under License Exception CIV deemed exports of technology controlled under ECCN 3E002 for the development and production of microprocessors having a CTP less than or equal to 40,000 MTOPS (regardless of word length or access width) to Country Group D:1 nationals. License Exception CIV does not apply to ECCN 3E002 technology also required for the development or production

of items controlled under ECCNs beginning with 3A, 3B, or 3C, or to ECCN 3E002 technology also controlled under ECCN 3E003.

License Exception CIV not applicable for military end-users and uses. License Exception CIV may not be used for military end-users or to known military uses. In addition to conventional military activities, military uses include any proliferation activities described in 15 CFR part 744. Deemed exports under License Exception CIV are not authorized to foreign nationals in an expired visa status. It is the responsibility of the exporter to ensure that, in the case of deemed exports, the foreign national maintains a valid U.S. visa, if required to hold a visa from the U.S..

FNR requirements for certain deemed exports to Country Group D:1 foreign nationals. This final rule makes License Exception CIV available for deemed exports of eligible microprocessor technology to any Country Group D:1 foreign national once a FNR request has been submitted to BIS and confirmation of eligibility has been obtained from the System for Tracking Export License Applications (STELA) or the Simplified Network Application Procedure (SNAP).

Information and form required for FNR review. FNR requests must be submitted using Form BIS-748P (Multipurpose Application), or its electronic equivalent, and must include information about the foreign national who is to receive the microprocessor technology.

The information required for the FNR request is set forth in paragraphs (s) and (t) of Supplement No. 2 to 15 CFR part 748. BIS will refer the FNR request for interagency review within nine business days or, if necessary, return the FNR request without action to the applicant, e.g., if more information is necessary. The agencies have 30 days in which to return a recommendation to BIS.

Certain current deemed export license holders for Country Group D:1 foreign nationals no longer bound by license conditions. Exporters who have current licenses for deemed exports of such technology to Country Group D:1 foreign nationals that become eligible for License Exception CIV are no longer bound by conditions on their licenses, as provided under 15 CFR 750.7. Termination of license conditions does not relieve an exporter of its responsibility for violations that occurred prior to the availability of the License Exception.

License Exception CIV deemed exports alsoavailable for certain Country Group D:1 foreign national visitors and customers. Although most licenses for microprocessor technology have been issued to companies who employ Country Group D:1 foreign nationals in their U.S. facilities and who hold work visas issued by the U.S. Government, the availability of License Exception CIV for deemed exports is not confined to employer releases of technology to employees. It is alsoavailable for deemed exports of technology to Country Group D:1 foreign national visitors and customers, provided that their backgrounds have been checked under the procedures set forth in License Exception CIV.

(Although the Export Administration Act expired on August 20, 2001, Executive Order 13222 of August 17, 2001 (3 CFR, 2001 Comp., p. 783 (2002)), as extended by the Notice of August 6, 2004, published in the Federal Register on August 10, 2004 continues the Regulations in effect under the International Emergency Economic Powers Act.)

BIS contact - Sharron Cook (202) 482-2440

BIS final rule (D/N 041018284-4284-01, FR Pub 11/05/04) available athttp://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-24680.pdf