BIS Final Rule Implements Revised Formula for Calculating Computer Performance (APP Replaces MTOPS) (Part II)

This is Part II of a multi-part series of summaries on BIS' final rule and highlights the adoption of APP to calculate computer performance and the movement of Bulgaria to Computer Tier 1. See future issues of ITT for additional summaries. (See ITT's Online Archives or 04/25/06 news, 06042515, for Part I.)

BIS notes that its final rule is effective on April 24, 2006, with the exception of the movement of Bulgaria from Computer Tier 3 to Computer Tier 1 in 15 CFR 740.7, which will be effective June 3, 2006.

Benefits of Replacing CTP Measured in MTOPS with APP Measured in WT

This final rule implements a new control formula, Adjusted Peak Performance (APP) measured in Weighted TeraFLOPS (WT). According to BIS, a U.S. government interagency group concluded that CTP measured in MTOPS has been unable to keep up with advances in computer architecture technology and no longer meets national security objectives. BIS states that the APP formula allows for much more targeted control of the high-end, special order high performance computers (HPCs), such as vector systems and proprietary cluster systems, which are of the greatest national security significance. The APP formula is derived from existing industry standards and is easier to calculate than the CTP formula. The APP formula will maintain controls on HPCs capable of computationally intensive national security operations. APP provides more consistent treatment for all comparable systems than CTP.

Control Thresholds for Computers Under the APP Formula

BIS states that the Administration's assessment determined that the appropriate control level for computers using the APP formula is 0.75 WT. The 0.75 WT level continues to control high-end proprietary HPCs, such as those used by the Department of Defense and the Department of Energy for advanced research, development, and simulation, while removing controls on the lower-end, more widely available systems.

(According to BIS, the new licensing threshold provides a relaxation of HPC export controls because all computers that are equal to or below 190,000 MTOPS are also below 0.75 WT, while certain computers with performance currently measured as exceeding 190,000 MTOPS do not exceed 0.75 WT. The amount of relaxation that may occur for any particular family of computers will depend on the technical specifics of the system architecture and the processor used in the family.)

BIS sources state that the U.S. is implementing both the Wassenaar Arrangement's agreement to set the Basic List control level for computer software and technology at 0.04 WT and the Wassenaar Sensitive List threshold for computer development and production technology and software which was set at 0.1 WT to limit the production of multi-board computer vector systems.

The EAR also set forth several other computer control levels, for purposes of unilateral anti-terrorism controls and License Exception eligibility, that do not have Wassenaar Arrangement equivalents. BIS' final rule makes conforming changes in these provisions by establishing control levels expressed in WT using the APP formula.

Bulgaria Moved to Computer Tier 1 Effective June 3, 2006

BIS' final rule removes Bulgaria from Computer Tier 3 and places it in Computer Tier 1. However, due to the requirements in the 1998 National Defense Authorization Act (NDAA), removing Bulgaria from Computer Tier 3 is not effective until 120 days after Congress receives a report justifying such a removal. As the report was sent to Congress on February 3, 2006, the movement of Bulgaria from Computer Tier 3 to Computer Tier 1 will become effective on June 3, 2006.

BIS states that this revision will result in fewer license applications, because Bulgaria will be eligible for License Exception APP. In addition, the EAR will no longer require NDAA-based recordkeeping and post shipment verification reporting of exports of HPCs to Bulgaria.

BIS final rule (FR Pub 04/24/06, D/N 0604047096-6096-01) available at http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/06-3647.pdf.