BIS Final Rule Amends EAR to Reflect Changes to the MTCR Annex, Etc.
The Bureau of Industry and Security (BIS) has issued a final rule, effective July 31, 2006, which amends the Export Administration Regulations (EAR) to reflect changes to the Missile Technology Control Regime (MTCR) Annex agreed to at the September 2005 Plenary in Madrid, Spain. In addition, this final rule's amendments also reflect a change to make one additional missile technology (MT) controlled item available for certain license exceptions.
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The following are highlights of the EAR revisions made by BIS' final rule:
New ECCN 2A001 Available for License Exceptions TMP and RPL under certain conditions. This final rule amends paragraph (a)(5) of 15 CFR 740.2 (Restrictions on all License Exceptions) by adding an additional Export Control Classification Number (ECCN) 2A001 as one of the ECCNs for which certain license exceptions are available. Paragraph (a)(5) prohibits the use of license exceptions for items controlled for MT reasons, but exempts certain listed ECCNs from this prohibition.
This final rule makes the MT controlled commodities of ECCN 2A001 available for license exceptions TMP and RPL when those commodities are being exported or reexported as one-for-one replacement for equipment previously legally exported or reexported.
Because the scope of availability of this exception to the general restriction on MT controlled items is more broadly defined for License Exceptions TMP and RPL for ECCN 2A001 than for the other ECCNs listed in the first sentence of paragraph (a)(5), BIS states that a new subparagraph (ii) is added to paragraph (a)(5) to clarify the scope of availability of License Exception TMP and RPL for ECCN 2A001. This new subparagraph (ii) creates an additional ECCN exception to the general restriction on using license exceptions for MT controlled items.
New definitions for "repeatability" and "production facilities" added to 15 CFR 772.1. In 15 CFR 772.1 (Definitions of Terms as Used in the Export Administration Regulations), this rule adds a new definition to define the term "repeatability" as used in the context of MTCR controls on accelerometers. BIS states that this new definition will aid the public in understanding the two new parameters known as "scale factor repeatability" and "bias repeatability" that are added to ECCN 7A101 with this rule. In addition, this rule adds a new definition to define the term "production facilities."
Amendments to certain ECCNs in the CCL. BIS states that the Commerce Control List (CCL) (Supplement No. 1 to 15 CFR Part 774) is amended to reflect changes to the MTCR Annex agreed to at the September 2005 Plenary in Madrid, Spain. Specifically the following ECCNs are affected (see final rule for discussion of the amendments):
ECCNs 1C101, 7A102 and 7A103.b and c are amended to remove the quotation marks around the word missile.
ECCN 1C107 is amended by adding the phrase "which can be machined to any of the following products" to the heading text (MTCR Annex Category II: Item 6(C)(3)). ECCN 1C107 is also amended by deleting the word "recrystallized" from 1C107.a (MTCR Annex Category II: Item 6(C)(3)).
ECCN 7A101 is amended by revising the control parameter in this ECCN, which is expected to result in a decrease in license applications.
A new MT controlled ECCN 9A103 is added to control liquid propellant tanks specially designed for the propellants controlled in ECCNs 1C011 or 1C111, or other liquid propellants used in "missiles." This addition is not expected to result in an increase in license applications submitted to BIS, because these commodities will be controlled by the Department of State under the International Traffic in Arms Regulations (ITAR).
ECCN 9A120 is amended to clarify that the control captures only those unmanned aerial vehicles incorporating, or designed or modified to incorporate, aerosol dispensing systems/mechanisms, to add specific Technical Notes to describe what is meant by an aerosol dispensing system/mechanism, and to note that 9A120 does not control model aircraft specially designed for recreational or competition purposes.
ECCN 9B106 is amended by deleting the imperial measurements of 223 K and 398 K in subparagraphs a.2.b. and b.2.b in favor of only listing the control parameters in terms of metric measurements.
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 July 31, 2006, 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 August 30, 2006. Any such items not actually exported or reexported before midnight, on August 30, 2006, require a license in accordance with this rule.
BIS contact - Michael Rithmire (202) 482-6105
BIS final rule (D/N 060714193-6193-01, FR Pub 07/31/06, available at http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/E6-12072.pdf.