Control of Firearms, Guns, Ammunition and Related Articles the President Determines No Longer Warrant Control Under the United States Munitions List (USML)
| Published date | 23 January 2020 |
| Record Number | 2020-00573 |
| Section | Rules and Regulations |
| Court | Industry And Security Bureau |
Federal Register, Volume 85 Issue 15 (Thursday, January 23, 2020)
[Federal Register Volume 85, Number 15 (Thursday, January 23, 2020)]
[Rules and Regulations]
[Pages 4136-4188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00573]
[[Page 4135]]
Vol. 85
Thursday,
No. 15
January 23, 2020
Part IVDepartment of Commerce----------------------------------------------------------------------- Bureau of Industry and Security-----------------------------------------------------------------------15 CFR Parts 732, 734, 736, et al. Control of Firearms, Guns, Ammunition and Related Articles the
President Determines No Longer Warrant Control Under the United States
Munitions List (USML); Final Rule
Federal Register / Vol. 85 , No. 15 / Thursday, January 23, 2020 /
Rules and Regulations
[[Page 4136]]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 732, 734, 736, 740, 742, 743, 744, 746, 748, 758, 762,
772, and 774
[Docket No. 191107-0079]
RIN 0694-AF47
Control of Firearms, Guns, Ammunition and Related Articles the
President Determines No Longer Warrant Control Under the United States
Munitions List (USML)
AGENCY: Bureau of Industry and Security, Department of Commerce.
ACTION: Final rule.
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SUMMARY: On May 24, 2018, the Department of Commerce published a
proposed rule in conjunction with a Department of State proposed rule
to revise Categories I (firearms, close assault weapons and combat
shotguns), II (guns and armaments), and III (ammunition/ordnance) of
the USML and transfer items that no longer warrant control on the USML
to the Commerce Control List (CCL). This final rule responds to and
adopts changes based on the comments received on the Commerce proposed
rule and is being published simultaneously with a final rule by the
Department of State that will revise Categories I, II, and III of the
USML to describe more precisely the articles warranting continued
control on that list. These revisions complete the initial review of
the USML that the Department of State began in 2011 and the conforming
changes made to the EAR to control these items not warranting control
under the International Traffic in Arms Regulations (ITAR).
DATES: This rule is effective March 9, 2020.
FOR FURTHER INFORMATION CONTACT: Steven Clagett, Office of
Nonproliferation Controls and Treaty Compliance, Nuclear and Missile
Technology Controls Division, tel. (202) 482-1641 or email
[email protected].
SUPPLEMENTARY INFORMATION:
Background
On May 24, 2018, the Department of Commerce (referred to henceforth
as ``the Department'') published the proposed rule, Control of
Firearms, Guns, Ammunition and Related Articles the President
Determines No Longer Warrant Control Under the United States Munitions
List (USML) (83 FR 24166) (referred to henceforth as the ``Commerce May
24 rule'') in conjunction with a Department of State proposed rule to
revise Categories I, II, and III of the USML (referred to henceforth as
the ``State May 24 rule''). The Department of Commerce is issuing this
final rule that describes how articles the President determines no
longer warrant control under USML Category I--Firearms, Close Assault
Weapons and Combat Shotguns; Category II--Guns and Armament; and
Category III--Ammunition/Ordnance will be controlled on the CCL of the
Export Administration Regulations (EAR) and is being published in
conjunction with a final rule on Categories I, II, and III from the
Department of State, Directorate of Defense Trade Controls (DDTC),
completing the initial review of the USML that began in 2011 and making
conforming changes to the EAR to control these items on the Commerce
Control List (CCL).
The changes described in this final rule and in the State
Department's companion final rule on Categories I, II, and III of the
USML are based on a thorough interagency review of those categories,
after which the Department of State concluded that the items added to
the CCL in this final rule do not provide a critical military or
intelligence advantage to the United States and, in the case of
firearms, do not have an inherently military function. The Departments
of Defense, State, and Commerce have, therefore, determined that the
EAR is the appropriate source of authority to control these firearms,
ammunition, and other articles previously controlled under Categories
I-III of the USML. There is a significant worldwide market for items in
connection with civil and recreational activities such as hunting,
marksmanship, competitive shooting, and other non-military activities.
This final rule does not deregulate the transferred items. BIS will
require authorization to export or reexport to any country a firearm or
other weapon that is being moved from the USML to the CCL by this final
rule, including releases of related technology and software to foreign
persons in the United States. Rather than decontrolling firearms and
other items, in publishing this final rule, BIS, working with the
Departments of Defense and State, is continuing to ensure that
appropriate regulatory oversight will be exercised over exports,
reexports, and transfers (in- country) of these items while reducing
the procedural burdens and costs of export compliance on the U.S.
firearms industry and allowing the U.S. Government to make better use
of its export control resources.
Certain software and technology capable of producing firearms when
posted on the internet under specified circumstances is being
controlled under this final rule in order to protect important U.S.
national security and foreign policy interests; however, communication
of ideas regarding such software or technology is freely permitted.
Moreover, nothing in this final rule prohibits U.S. persons within the
United States from acquiring firearms of any type--there are other laws
and regulations that control the acquisition of firearms in the U.S.
Structure of 600 Series
BIS has created Export Control Classification Numbers (ECCNs),
referred to as the ``600 series,'' to control items that will be
removed from the USML and controlled under the CCL, or items from the
Wassenaar Arrangement on Export Controls for Conventional Arms and Dual
Use Goods and Technologies Munitions List (Wassenaar Arrangement
Munitions List or WAML) that are already controlled elsewhere on the
CCL.
These ECCNs are referred to as the ``600 series'' because the third
character in each of the new ECCNs is ``6.'' The first two characters
of the ``600 series'' ECCNs serve the same function as any other ECCN
as described in Sec. 738.2 of the EAR. The first character is a digit
in the range 0 through 9 that identifies the Category on the CCL in
which the ECCN is located. The second character is a letter in the
range A through E that identifies the product group within a CCL
Category. With few exceptions, the final two characters identify the
WAML category that covers items that are the same or similar to items
in a particular ``600 series'' ECCN. Category II of the USML and
category ML2 of the WAML cover large caliber guns and other military
weapons such as: Howitzers, cannon, mortars, anti-tank weapons,
projectile launchers, military flame throwers, and recoilless rifles.
Items that are currently controlled in Category II of the USML will
be controlled on the CCL under four new ``600 series'' ECCNs. Placement
of the items currently in USML Category II into the CCL's 600 series is
consistent with existing BIS practice of using 600 series ECCNs to
control items of a military nature.
Items currently controlled in Categories I and III of the USML will
be controlled in new ECCNs in which the third character is a ``5.''
These items are not appropriate for 600 series control because, for the
most part, they have
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civil, recreational, law enforcement, or other non-military
applications. As with 600 series ECCNs, the first character represents
the CCL category, the second character represents the product group,
and the final two characters represent the WAML category that covers
items that are the same or similar to items in the ECCN.
Relation to USMIL
Pursuant to section 38(a)(1) of the Arms Export Control Act (AECA),
all defense articles controlled for export or import, or that are
subject to brokering controls, are part of the USML under the AECA. All
references to the USML in this final rule are to the list of defense
articles that are controlled for purposes of export, temporary import,
or brokering pursuant to the ITAR, 22 CFR parts 120 through 130, and
not to the list of AECA defense articles on the United States Munitions
Import List (USMIL) that are controlled by the Bureau of Alcohol,
Tobacco, Firearms and Explosives (ATF) for purposes of permanent import
under its regulations at 27 CFR part 447. All defense articles
described in the USMIL or the USML are subject to the brokering
controls administered by the U.S. Department of State in part 129 of
the ITAR. The transfer of defense articles from the ITAR's USML to the
EAR's CCL for purposes of export controls does not affect the list of
defense articles controlled on the USMIL under section 38 of the AECA,
22 U.S.C. 2778, for purposes of permanent import or brokering controls.
Overview
For the Commerce May 24 rule, BIS received nearly 3,000 comments
and posted 1,540 unique comments and 135 bulk comments, which were
representative of issues raised by 1,256 commenters. BIS appreciates
the constructive comments it received to improve the Commerce May 24
rule and incorporated changes where appropriate. BIS also received many
comments that were outside the scope of the Commerce May 24 rule and
thus that are not addressed here. The Commerce May 24 rule and this
final rule address U.S. export controls. BIS does not regulate the
domestic sale or use of firearms in the United States, or the transfer
of firearms or related software or technology between U.S. persons
within the United States.
BIS reviews the comments it received in the preamble to this final
rule in three parts. First, BIS describes the comments of general
applicability. Then, it describes the comments received on specific
proposed provisions included in the Commerce May 24 rule. Finally, this
final rule describes the changes being adopted from the proposed rule
and revisions being made to what was proposed in the Commerce May 24
rule. As this final rule is being published in conjunction with the
companion Department of State rule, the preamble may also reference the
State Department's analysis related to these changes.
Comments of General Applicability
USML Review Criteria
Comment 1: Multiple commenters took issue with the proposed
transfer from the USML to the CCL of weapons that the Department of
State determined, in conjunction with its interagency partners
(including BIS), are not inherently for military end use, citing the
fact that military and law enforcement personnel regularly use them.
Many commenters asserted that being commercially available is not a
good indicator of whether these weapons merit the oversight of the
Department of State. In addition, several commenters disputed that the
U.S. market should be the basis for assessing the commercial
availability of firearms, as this is not the market to which the
proposed rule would be directed. Many commenters also asserted that
semi-automatic weapons should not be seen as just another product to be
promoted, bought, and sold like washing machines or any other consumer
product. Commenters supportive of the rule, however, agreed that export
controls of commercial firearms and ammunition which are not inherently
military, have no critical military or intelligence advantage, and have
predominant commercial applications correctly belong under the EAR.
BIS response: The fact that a military uses a specific piece of
hardware is not a dispositive factor when determining whether it has an
inherently military function. Given that the majority of the items
referenced in these comments that will transfer to the CCL through this
final rule are widely available in retail outlets in the United States
and abroad, and widely utilized by the general public in the United
States, it is reasonable for the Department of State to determine that
they do not serve an inherently military function, absent specific
characteristics that provide military users with significantly enhanced
utility, such as automatic weapons, sound suppressors, and high
capacity magazines.
With respect to revisions of Categories I-III, the review was
focused on identifying the defense articles that are now controlled on
the USML that are either (i) inherently military and otherwise warrant
control on the USML or (ii) if of a type common to non-military
firearms applications, possess parameters or characteristics that
provide a critical military or intelligence advantage to the United
States. If a defense article satisfies one or both of those criteria,
it remained on the USML. For example, while the U.S. military supplies
some of its service members with sidearms for military use, a sidearm
also has many uses outside of the military, such that its function is
not inherently military and therefore a sidearm does not warrant
control on the USML. Alternatively, squad automatic weapons do not
generally have such non-military uses and will remain controlled on the
USML. Any single non-military use, however, does not negate such a
weapon's inherently military function.
BIS notes that the scope of items ``subject to the EAR,'' includes
basic commercial items, dual-use items, and military items not
warranting ITAR control. The EAR control structure is well-suited to
control this range of items, and BIS has particular historical
expertise in controlling dual-use items. The Departments of State and
Commerce also recognize that there are variations in commercial
availability of firearms, but these variations do not overcome the
Department of State's assessment that the subject firearms do not
provide a critical military or intelligence advantage such that they
warrant control under the ITAR. In addition, all exports of firearms
are subject to the laws of the importing country, and the U.S.
Government does not issue licenses for exporters to ship firearms to
countries where the end use is illegal.
Comment 2: Many commenters asserted that many semi-automatic rifles
are easily converted to fully automatic firearms and for this reason
semi-automatic firearms and the parts and components needed to do this
should be retained on the USML.
BIS response: BIS agrees that certain components may be used to
convert a semi-automatic firearm into a fully automatic firearm. A
fully automatic weapon is subject to the ITAR. The component(s) needed
to turn a semi-automatic into a fully automatic are also retained on
the USML. Therefore, the export of the component needed to turn the
semi-automatic into a fully automatic would require an ITAR license or
other approval. In addition, if the ITAR component was incorporated
into the semi-automatic firearm, the now automatic weapon would be
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regulated by the ITAR as an automatic weapon and because of the
inclusion of the ITAR component within the firearm. To address exports
of semi-automatic firearms intended to be made automatic with a
foreign-origin component that was not subject to the ITAR, BIS as a
result of this comment has revised Sec. 740.2 in this final rule to
restrict the use of EAR license exceptions involving these components
or parts, as described below in the regulatory changes made in this
final rule.
Commerce's Mission and the Regulation of Firearms
Comment 3: Many commenters expressed concerns about the role and
function of BIS regarding the items that are transferred from the USML
to the CCL. Some commenters expressed concerns that BIS has neither the
appropriate resources nor the appropriate expertise or mission to
process associated applications for exports of firearms. Several
commenters asserted BIS is not set up for the proper vetting of those
parties in export transactions to ensure that they are not acting as
middlemen for terrorists or other subversive entities that will use
them against our troops or our allies or, even worse, civilian
populations. Several other commenters asserted that BIS's enforcement
office, with no staff in Latin America, Africa, or many other parts of
the world, is not equipped to take the same level of preventive
measures for end-use controls. Many commenters asserted that the
transfer of these firearms to Commerce control is inconsistent with the
statutory framework enacted by Congress to regulate the export of arms.
BIS response: The mission of BIS is to advance U.S. national
security, foreign policy, and economic objectives by ensuring an
effective export control and treaty compliance system and promoting
continued U.S. strategic technology leadership. BIS controls many items
on the CCL that implement U.S. commitments to the Wassenaar Arrangement
and other multilateral regimes related to national security. These
controls are supplemented by U.S. controls on additional items as well
as broad catch-all controls targeting end uses and end users of
concern.
BIS licenses are subject to an interagency review process that
includes review by the Departments of State, Defense, and Energy, which
allows BIS to supplement its technical expertise with that of its
interagency partners on matters of national security, foreign policy,
regional stability, and national defense. The interagency review
process for Commerce licenses is specified in Executive Order 12981 and
in part 750 of the EAR. The well-established and transparent
interagency review process (including specifying the timelines for each
step of the review process) ensures that a variety of perspectives and
expertise from these U.S. Government agencies are able to inform the
Commerce license review process to ensure only those exports that are
consistent with U.S. export control interests will be approved. BIS
also emphasizes that it has flexibility in how it approves licenses and
can include additional safeguards as may be warranted. The interagency
review process also helps to inform how licenses are approved.
BIS has decades of experience licensing firearms and related items
that has prepared it well for licensing these additional firearms and
related items that this final rule moves to the CCL. BIS is also
prepared because of its experiences with licensing other items that
have moved from the USML to the CCL, including such sensitive items as
components ``specially designed'' for use in military aircraft, and
certain ``spacecraft,'' including satellites, and space vehicles. In
addition, BIS estimates that existing staff will be able to manage the
anticipated increased workload of approximately 6,000 additional
license applications.
In addition to its experience in the licensing arena, BIS has
substantial law enforcement experience. BIS's Export Enforcement (EE)
is a dedicated law enforcement organization recognized for its
expertise, professionalism, integrity, and accomplishments. EE
accomplishes its mission through preventive and investigative
enforcement activities and then, pursuing appropriate criminal and
administrative sanctions against export violators. EE works with the
Department of Justice to impose criminal sanctions for violations,
including incarceration and fines, and with the Office of Chief Counsel
for Industry and Security to impose civil fines and denials of export
privileges. EE also works closely with other federal law enforcement
agencies, including the Federal Bureau of Investigation and the
Department of Homeland Security, when conducting investigations or
preventative actions.
EE has Export Control Officers (ECOs) in offices that cover
different regions of the world and are not limited to the specific
country in which the EE personnel are located. The ECOs are
supplemented by other personnel who engage in enforcement-related
activities. For example, BIS regularly sends BIS enforcement agents on
temporary duty assignments overseas under the Sentinel Program where
they go to areas not easily covered by existing ECOs. BIS also works
with certain foreign governments on enforcement as well as
transshipment issues. In conducting pre-license checks or post shipment
verifications, BIS also uses the resources the Department has with
various Foreign Commercial Service (FCS) officers that are located at
embassies and consulates around the world. Upon BIS's request,
Department of State Foreign Service Officers at embassies and
consulates often assist BIS with pre-license checks when the FCS is not
present.
BIS has resources it and the other agencies use to identify parties
of concern to transactions, not all of which are public. The
information BIS and other agencies use to vet licenses and transactions
is not static and is being continuously improved to better target and
exclude entities or individuals that should not be receiving items
subject to the EAR.
BIS also notes that this final rule imposes a requirement to file
Electronic Export Information (EEI) in Automated Export System (AES)
for nearly all exports of firearms being moved to the CCL. The EAR
includes robust recordkeeping requirements that have been enhanced
further for the firearms being moved to the CCL. BIS can and does on a
regular basis contact parties to a transaction to request all records
related to a particular export or reexport or series of exports or
reexports. These record requests may also involve in-person visits from
representatives of EE.
BIS does not agree that the controls will be inconsistent with the
statutory framework enacted by Congress to regulate the export of
firearms. The firearms that warrant ITAR control will continue to be
subject to the AECA and its requirements as applicable. The firearms
not warranting ITAR control that this final rule will control under the
EAR will be subject to the Export Control Reform Act of 2018 (ECRA) (50
U.S.C. 4801-4852). For example, BIS has regulated long barrel shotguns
(a type of firearm) under the statutory framework enacted by Congress
in the earlier Export Administration Act (EAA) and now under ECRA. The
same will be true for the firearms that this final rule adds to the
CCL. Congress stated that one of the purposes of ECRA is ``[t]o control
the release of items for use in--(i) the proliferation of . . .
conventional weapons; (ii) the acquisition of destabilizing numbers or
types of conventional weapons; (iii) acts of terrorism . . .'' 50
U.S.C. 4811(2)(A).
Comment 4: One commenter asserted that BIS does not have resources
to enforce export controls, even before the
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addition of 30,000 firearms export licenses as a result of this rule
predicted by the Commerce May 24 rule.
BIS response: BIS clarifies here that the reference to 30,000
licenses in the Commerce May 24 rule represented the increase as a
result of the total USML to CCL review process, not solely the USML
Categories I-III items. The estimate of 10,000 licenses is the number
of anticipated State licenses that will be impacted by the transfer to
Commerce in the Commerce May 24 rule. The larger 30,000 number was
included for context for the overall USML to CCL review process and its
implementation. As noted in the response to Comment 3 above, BIS
estimates the transfer resulting in approximately 6,000 license
applications. BIS has invested considerable effort in assessing the
increased licensing and enforcement responsibilities that will be
incurred following publication of this final rule and has determined
that it is within its means and resources to effectively administer the
subject export controls.
The Effect of the Shift in Regulatory Jurisdiction of Certain Firearms
Comment 5: Several commenters asserted that reducing regulations on
firearms and ammunition is dangerous. One commenter asserted that
moving firearms to the CCL where they would be subject to loosened
controls seems inconsistent with enhancing national security. Another
commenter asserted that as even the National Rifle Association (NRA)
has acknowledged, ``items on the USML controlled under ITAR are
generally treated more strictly, whereas regulation under the CCL is
more flexible.'' Many commenters asserted that the proposal weakens
controls over semi-automatic assault weapons including AR-15s and AK-
47s, 50 caliber sniper rifles, and high-capacity ammunition magazines.
BIS response: The EAR control structure is more flexible and will
reduce the burden on the regulated, but the items will still be
controlled. For example, the EAR is a more flexible control structure
because it does not require a purchase order for a license. This is
more efficient and flexible than the ITAR but does not undermine U.S.
national security. The applicant still needs to specify the parties to
the license, end use, and items to be authorized, but not having to
present a purchase order allows a more flexible licensing arrangement.
The ability under the EAR to create country-based license exceptions,
e.g., License Exception Strategic Trade Authorization (STA), is another
example. License Exception STA will only be available for the .x parts
and components under 0A501, but this is another example of the more
flexible EAR control structure. In other words, greater flexibility
under the EAR does not mean decontrol.
Further, having the ITAR control items that are in commercial use
and do not have an inherent military function does not help promote
U.S. national security, because it takes time and resources away from
the Department of State that could be better used to focus on items
that do warrant ITAR control. BIS has decades of experience in
regulating dual-use items, including long barreled shotguns controlled
under 0A984 and certain chemicals and toxins that have commercial
applications, but are controlled for chemical and biological weapons
reasons, e.g., ricin and sarin gas. See, e.g., 50 U.S.C. 4811(2)(A)(i)
(stating that one of the policies of ECRA is to control the
proliferation of weapons of mass destruction). BIS also has a proven
track record for licensing and enforcing the controls for other items
that have moved from USML to the CCL.
BIS further clarifies that the AK-47 automatic firearm and any
other automatic firearm are retained on the USML. The semi-automatic
firearms this rule adds to the CCL will require a U.S. Government
authorization for export.
Comment 6: One commenter noted that according to the State May 24
rule, ``The Department of Commerce estimates that 4,000 of the 10,000
licenses that were required by the [State] Department will be eligible
for license exceptions or otherwise not require a separate license
under the EAR.'' The commenter noted that the Commerce May 24 rule
clarifies, ``The other 4,000 applicants may use license exceptions
under the EAR or the ``no license required'' designation, so these
applicants would not be required to submit license applications under
the EAR.'' The commenter asserted that ``while it recognizes that other
forms of oversight may be available, this dramatic difference in the
number of licenses raises our concern.''
BIS response: This comment on the meaning of the 4,000 Department
of State licenses that will not require a license under the EAR creates
a good opportunity for BIS to clarify how the EAR controls are
structured. Under the EAR, an exporter does not have a right to export.
If the EAR does not impose a license requirement or some other
prohibition, the exporter may proceed under the No License Required
(NLR) designation. The NLR designation may be available for certain
0x5zz.y exports, but otherwise all other exports will require a U.S.
Government authorization. Therefore, the reference to 6,000 being
authorized under licenses and 4,000 under license exceptions and a
small subset as NLR, is not a dramatic change. When BIS imposes a
license requirement under the EAR, this means the exporter will need to
meet all of the applicable requirements of a license exception, or
obtain a license from BIS to proceed with the export. The license
exceptions or portions of license exceptions that will be available for
these items moved to the CCL, including some of the new requirements
and limitations added, will be sufficient to protect U.S. export
control interests.
3D Printing of Firearms
Comment 7: Three-dimensional (3D) printing is a type of additive
manufacturing based on the principle of combining numerous, extremely
thin layers of a physical material (including plastics, metals, and
even living cells) in a controlled build process and joining them to
gradually build up a physical, three-dimensional object. Computer
controlled manufacturing may be either subtractive or additive.
Subtractive manufacturing includes traditional manufacturing methods
such as turning, grinding or milling, where metal or other material is
removed from the base shape to form the final product. For example, you
take a steel block and remove material until it becomes the final item.
In additive manufacturing, which is often referred to as 3D printing,
material such as metal or plastic is laid down in very thin layers one
upon the other fusing together until the final net shape is achieved.
In both instances, the adding or removing of the material is controlled
by a computer without human intervention. 3D printers utilize
electronic digital files to process the materials into a physical
object, and these files can be distributed over the internet. A 3D
printer or computer numerically-controlled (CNC) equipment uses
Computer Aided Manufacturing (CAM) files in G-code or AMF format as
executable code to produce certain items. There are currently
technological limitations for the effectiveness of 3D printing of
firearms, but the concept has been demonstrated and the ability to
manufacture commercially viable firearms is inevitable given the
increasing improvements of 3D printing equipment and 3D printing
materials. Congress directed that the export control system under ECRA
is intended to have ``the flexibility to be adapted to address new
threats in the future,'' and this final rule implements that
instruction. 50 U.S.C. 4811(8).
[[Page 4140]]
Technology and software are required for 3D printing of firearms
and are critical for the 3D printing manufacturing process. Publicly
posting such technology and software online without restriction creates
the risk that foreign persons and countries, including countries of
concern, will be able to obtain technology and software for 3D printing
of firearms. In the absence of controls on the export, reexport, or in-
country transfer of such technology and software, such items could be
easily used in the proliferation of conventional weapons, the
acquisition of destabilizing numbers of such weapons, or for acts of
terrorism. As noted earlier, Congress expressly directed that ECRA
should be used to address these risks. 50 U.S.C. 4811(2)(A).
Like 3D printing, CNC milling or machining is an automated
manufacturing process controlled by technology and software. CNC
milling/turning/grinding are all subtractive manufacturing processes in
which the computerized equipment removes layers of material from a
base--known as the workpiece or the blank--to produce a manufactured
part or item. As with 3D printing, the posting online of CNC technology
and software needed to create working firearms creates export control
concerns.
Under the ITAR, the unrestricted public dissemination of technical
data (as defined in section 120.10 of the ITAR) in a manner that allows
access by foreign persons--including through the internet--is an export
requiring appropriate authorization. For purposes of the CCL, Commerce
has historically taken the approach (with limited exceptions) that
material is not subject to export control if it has been ``published''
within the meaning of 15 CFR 734.7, including through posting on the
internet. The proposed rules published by the Departments of State and
Commerce took these differences in the ITAR and EAR control structures
into account, and the Commerce proposed rule acknowledged these
differences to ensure commenters had an opportunity to fully take these
differences into account when submitting their comments on the Commerce
rule. See page 24167 of the Commerce May 24 rule and 15 CFR 734.7.
Comments on the Commerce proposed rule reflected the commenters'
understanding of these differences between the ITAR and EAR control
structures. BIS received many comments expressing concerns about 3D
printing of firearms and whether appropriate controls would be in place
under the EAR. It also received a small number of commenters that
supported the part 734 criteria. The commenters critical of the part
734 criteria provided the following input:
(1) Part 734 criteria should be changed to regulate 3D printing,
even if the information would otherwise be publicly available. These
commenters were concerned that the application of the part 734 criteria
appears to give rise to the possibility of widespread and openly
sanctioned circulation of open source, non-proprietary instructions for
using computer-aided design (CAD) files to produce operable firearms
via 3D-printing technology, or text files to produce such firearms via
CNC milling of the firearms. Commenters requested BIS to weigh the fact
that the part 734 criteria would make posting on the internet of ECCN
0E501 technology (e.g., 3D printer specs) for the production of an ECCN
0A501 firearm publicly available information that is no longer subject
to the EAR.
(2) Allowing 3D-printed gun technology and software to be posted
freely online for use with 3D printers will make it easier to obtain
firearms in the U.S. and abroad. These commenters were concerned that
the combination of internet dissemination and do-it-yourself 3D
production is problematic because the government would have no
oversight of the producer, the end use or the end user of the firearm.
Other commenters in this area were greatly concerned about the
perceived loss of controls on 3D gun-printing plans, which these
commenters asserted has increasingly assisted bad actors in enhancing
their capabilities to inflict atrocities around the world. Several
commenters cited Defense Distributed v. Department of State, a lawsuit
filed in the U.S. District Court for the Western District of Texas and
appealed to the U.S. Court of Appeals for the Fifth Circuit,, in
support of the State Department's decision to restrict the 3D printing
of firearms under the ITAR (i.e., requiring appropriate authorization
under the ITAR prior to allowing unrestricted posting on the internet).
(3) Unregulated 3D printing would undermine U.S. efforts, as well
as governments overseas, to vet parties obtaining firearms, and to
track 3D printed firearms. These commenters noted that with access to
3D printing machines and plans on how to build a gun, anyone could
circumvent U.S. laws that seek to prevent known criminals from
obtaining U.S. firearms. Other commenters in this area were
particularly concerned that these changes would result in an increase
in the number of untraceable firearms in circulation because as 3D
printing technology becomes more widely available, the likelihood that
it may be used to construct operable firearms that are exempt from
serialization requirements would increase.
(4) The transfer of control of these items to the CCL would
undermine longstanding U.S. efforts to counter proliferation of small
arms in the world. Commenters in this area noted that they couldn't
understand how allowing untraceable 3D printing of firearms would serve
U.S.-recognized goals to combat illicit trafficking of firearms.
Commenters in this area also noted that the United States is the
world's largest donor, as the commenter understands it, to helping
countries build their ability to trace weapons, secure weapons
stockpiles, and to destroy those stocks when warranted. However,
according to the commenter, this transfer of authority to Commerce
appears to open the door to unfettered 3D printing of firearms, which
threatens to undermine nearly all those efforts.
One commenter asserted that the proposed changes may result in
increased circulation of plans for non-automatic weapons produced by 3D
printing technology, and this may be at odds with the Wassenaar
Arrangement.
A small number of commenters supported the application of the
criteria in part 734 and emphasized that the information is so widely
available in various formats that trying to control it would not be
practical or warranted. One commenter noted that America boasts
hundreds of millions of privately-owned firearms and has produced
countless books, magazine articles, videos, websites, and online forums
that exhaustively detail firearm technology and use. Thus, this
commenter asserted it is difficult to imagine any information about the
design, development, production, manufacturing, and use of firearms
that is not already within the public domain and this same information
is commonly available overseas. Other commenters that supported the
part 734 criteria asserted that they had concerns generally over their
First Amendment rights being possibly violated unless the criteria in
part 734 applied equally to information posted online. These commenters
requested an end to any harassing or censorship of firearm instructors
within the U.S., as well as bloggers, writers, and those posting online
guides or tutorials discussing technology about defense items because
these activities seem to be a clear violation of the First Amendment
right to free speech. Given the foreign policy and national security
interests at stake, Commerce believes that the restrictions imposed by
this rule
[[Page 4141]]
are appropriately tailored. Commerce is also aware of, and has taken
into account, the constitutional and statutory concerns raised by the
plaintiffs in the Defense Distributed case and by the plaintiffs in
Washington v. Dep't of State, No. 2:18-cv-01115-RSL (W.D. Wash.).
Commerce also notes that it has received correspondence from members of
Congress concerning the issues raised in Defense Distributed.
BIS response: The Commerce May 24 proposed rule addressed the
application of part 734, including Sec. 734.7, for items (specifically
for certain information and software) proposed for transfer from USML
Categories I-III (see 83 FR 24167). These criteria support the free
exchange of public information and, as a general matter, do not warrant
being changed. However, the concerns commenters raised about the
specific application of part 734 criteria to 3D printing of firearms
suggests that modification to the proposed controls is warranted.
With the transfer of certain firearms from the USML to the CCL,
rifles, pistols, revolvers and related parts and components will fall
within ECCN 0A501, and BIS will be responsible for their licensing.
This transfer adds to Commerce's existing licensing jurisdiction over
most shotguns and shotgun shells as well as optical sighting devices.
The items that remain on the ITAR include fully automatic and selective
fire weapons, weapons for caseless ammunitions, silencers and certain
high capacity (50 rounds or greater) magazines, and certain military-
specific ammunition such as tracers.
BIS recognizes that several commenters, including a large number of
private citizens, expressed concern over global access to 3D printing
technology and software with the transfer of certain firearms to the
CCL. BIS also recognizes that several commenters and plaintiffs in
Washington v. Dep't of State raised concerns about risks to public
safety related to domestic access to 3D printing technology and
software. BIS shares the concerns raised over the possibility of
widespread and unchecked availability of the software and technology
internationally, the lack of government visibility into production and
use, and the potential damage to U.S. counter proliferation efforts. In
this final rule, BIS addresses the concerns raised about 3D printing of
firearms by making certain technology and software capable of producing
firearms subject to the EAR when posted on the internet under specified
circumstances. This control will help ensure that U.S. national
security and foreign policy interests are not undermined by foreign
persons' access to firearms production technology. Although the
Department of State determined that such technology and software do not
warrant continued control under the USML, maintaining controls over
such exports under the EAR remains in the national security and foreign
policy interests of the United States, as described below. As noted in
other places in the Commerce final rule, the movement of items from the
USML is not a decontrol, and appropriate controls must be in place to
protect U.S. national security and foreign policy interests, such as by
maintaining Commerce licensing authority over certain technology and
software capable of producing firearms subject to the EAR when posted
on the internet under specified circumstances as described in this
final rule. And although the domestic transfer of commodities is
outside the purview of BIS jurisdiction, the concerns related to the
unrestricted posting of CAD files on the internet, more accurately
described in this final rule as CAM files, have been addressed in this
final rule and nothing in this final rule affects existing federal or
state laws that pertain to the manufacture, possession, use, or
commercial sale of firearms.
BIS provides more information about the specific changes below
under the Description of Regulatory Changes under the heading Revision
of ``Published.''
BIS does not agree with the commenter that stated that the part 734
criteria are at odds with the Wassenaar Arrangement. As described both
in the proposed rule and this final rule, part 734 remains consistent
with the Wassenaar Arrangement. BIS's changes in this final rule,
however, ultimately addressed this commenter's concern.
In response to commenters who favored the part 734 criteria as
outlined in the proposed rule, BIS notes that information regarding
firearms, including information for production of firearms, is often
widely available, and nothing described below would restrict persons
from publishing books or magazines, such as those that could be found
in a local public library, and that the changes made to part 734
described below are limited to addressing a specific fact pattern
(posting on the internet of certain types of files) that warrants U.S.
Government oversight to ensure unrestricted releases are not being made
to persons of concern outside the United States or to foreign persons
in the United States. BIS also took into account these commenters'
support for the part 734 criteria and their First Amendment concerns
but did not adopt the approach that they advocated. Given concerns
regarding First Amendment restrictions the control is appropriately
tailored to only impact technology and software in an electronic
format, such as AMF or G-code, that is ready for direct insertion into
a computer numerically controlled machine tool, additive manufacturing
equipment to produce the firearm frame or receiver or complete firearm.
This technology and software are functional in nature, having the
capability to cause a machine to use physical materials to produce a
firearm frame or receiver or complete firearm. Limitations on the
dissemination of such functional technology and software do not violate
the right to free expression under the First Amendment. Nor does the
final rule violate the right to keep and bear arms under the Second
Amendment. The rule does not prohibit U.S. persons within the United
States from acquiring firearms of any type; indeed, nothing in this
rule prohibits persons within the United States from developing,
discussing, or transferring by hand or mail (e.g., by the U.S. Postal
Service or a common carrier) CAM files related to 3D-printing
technology and software. The domestic transfer of commodities is
outside of the scope of BIS jurisdiction and would be within the
purview of domestic law. The release of controlled technology in the
United States would only be regulated to the extent it would constitute
a deemed export (i.e., release to a foreign person). This means
transfers between U.S. persons within the United States are not
regulated under the EAR so long as there is no release to a foreign
national. The ITAR takes a similar approach. BIS's approach in using
targeted changes is not intended to otherwise change the other criteria
in part 734 that these commenters assert they strongly support.
In response to the comments received on the proposed rule, BIS has
reflected on the need to take into account various interests in
regulating technology and software for the 3D printing of firearms. At
the time of the proposed rule, BIS believed that its existing framework
struck the appropriate approach in providing for national security and
foreign policy control of firearms that would transfer to the CCL.
Since that time, BIS has had considerable time to review the comments
related to 3D printing of firearms. Although the military usefulness of
3D printed firearms is not significant, there are other U.S. national
security and foreign policy interests, as described by commenters, in
regulating the unlimited
[[Page 4142]]
access to certain files for the 3D printing of firearms that the
framework of BIS regulations as described in the proposed rule did not
adequately address. As the State Department noted in the Defense
Distributed litigation, unrestricted export of such files abroad could
have a potential detrimental effect on aspects of U.S national security
and foreign policy, including by undercutting efforts to combat the
illicit trafficking of firearms or possession of firearms by hostile
parties or dangerous organizations, as well as other efforts to assist
other countries in protecting domestic and international security. BIS
believes this potential detrimental effect on U.S. national security
and foreign policy warrants the control of the export of certain files
for the 3D printing of firearms set forth in this rule.
At the same time, BIS recognizes that there is a longstanding
tradition to encourage the free exchange of ideas as already
acknowledged in BIS regulations, such as in 15 CFR 734.7. The agency
takes seriously its responsibility to regulate judiciously, seeking to
assert jurisdiction only as needed and consistent with its statutory
authority. As set forth in the Export Control Reform Act of 2018, 50
U.S.C. 4801-4852, Commerce's policy is to use export control only to
the extent necessary to restrict the export of items that would make a
``significant contribution to the military potential of another country
. . . which would prove detrimental to the national security of the
United States'' or ``further significantly the foreign policy of the
United States or to fulfill its declared international obligations.''
50 U.S.C. 4811(1)(A)-(B). Further, Commerce must ensure that its
controls are ``tailored to focus on those core technologies and other
items that are capable of being used to pose a serious national
security threat to the United States.'' 50 U.S.C. 4811(2)(G).
Because of the national security and foreign policy risks
associated with the unlimited access and unrestricted production of 3D
printed firearms, BIS is offering a tailored approach, consistent with
its statutory obligations, that places restriction on the posting on
the internet of files for the printing of certain firearms and their
critical elements. As set forth in Sec. 734.7(c) in this final rule,
only technology or software for the complete firearm, its frame, or its
receiver are subject to BIS licensing requirements, aligning BIS
controls with existing statutory concepts set forth in the definition
of ``firearm'' under the Gun Control Act (GCA), 18 U.S.C. 921(a)(3).
Recognizing that libraries and academic institutions within the United
States may already carry books or other materials related to firearms
manufacturing, BIS does not seek to regulate this existing landscape of
activity for the items transferred from the USML to CCL, consistent
with its treatment of firearms it controlled on the CCL prior to this
final rule. Instead, since the harm identified with unrestricted
dissemination has been tied to the easy and untraceable distribution in
electronic format that the internet provides, BIS has crafted its rule
to regulate dissemination in this space as it poses a significant risk
to U.S. national security and foreign policy.
As a result, Commerce has reached the conclusion that U.S. national
security and foreign policy necessitate that BIS maintain controls over
the 3D printing of firearms when such software and technology is posted
on the internet. The potential for the ease of access to the software
and technology, undetectable means of production, and potential to
inflict harm on U.S. persons and allies abroad present a grave concern
for the United States. Without regulatory oversight, U.S. foreign
relations and national security interests could be seriously
compromised. For these reasons, this final rule provides that
technology and software ready for insertion into an automated
manufacturing tool that makes use of the software or technology to
produce a firearm frame, receiver, or complete firearm is subject to
the EAR, consistent with the regulation of such software and technology
when previously controlled under the USML.
Vetting Transaction Parties and Monitoring Exports
Comment 8: Many commenters were concerned about a possible
reduction in the monitoring of the end users of exported firearms and
publicly available information about this monitoring. These commenters
asserted that public reporting of Blue Lantern information is mandatory
and there are readily available statistics about the results. Some
commenters requested that if the proposed rules move forward, the BIS
program be strengthened to address the need to monitor the end users of
exported firearms.
BIS response: BIS does not publish end-user monitoring information
in the same format as the Department of State, but the same type of
information is available publicly from BIS. The new ECRA maintains an
annual reporting requirement to Congress that provides an additional
layer of transparency. Specifically, under Section 1765(a)(6) of ECRA,
the Secretary of Commerce shall submit a report to Congress that
includes a summary of export enforcement actions, including of actions
taken to implement end-use monitoring of dual-use, military, and other
items subject to the EAR. BIS already has practices in place to
continuously evaluate its end-use monitoring program and to improve it
as opportunities to do so are identified. BIS intends to continue those
efforts for the firearms that are moved to the CCL with this final
rule.
Registration Requirement for Screening
Comment 9: Several commenters expressed concerns that BIS will not
have access to the same databases and background information that the
Department of State uses to evaluate license applications since the EAR
does not require registration. These commenters asserted that not
including a registration requirement will deprive regulators of an
important source of information and decrease transparency and reporting
regarding gun exports. Some commenters recommended removing or limiting
the registration fee for manufacturers but keeping the requirement for
registration. Another commenter suggested waiving the fee for
manufacturers who do not, in reality, export these items.
BIS response: BIS, along with the Department of State, considered
these concerns and determined that the interagency license review
process maintains appropriate oversight of the items at issue. BIS's
export licensing requirements and process are calibrated both to the
sensitivity of the item and the proposed destination. Additionally, all
requests for export licenses for firearms remain subject to interagency
review, including by the Department of State.
BIS does not need the information included in the ITAR registration
requirement to regulate those items under the EAR. To apply for a
license under the EAR, the applicant is required to create a free
account in BIS's online submission system called SNAP-R. The SNAP-R
account includes basic information about the exporter. In addition,
each party identified on the license application is reviewed. The
requirements to file EEI in AES is another important way that BIS
obtains information needed to effectively track exports.
BIS agrees that if there were a registration requirement, removing
or limiting the fee for registration would ease the burden on small
businesses and individuals. However, as noted above, BIS does not
believe that the information included in the registration requirements
is necessary for BIS to
[[Page 4143]]
effectively license and enforce the EAR. Therefore, registration
requirements, even if they are free, would impose an unnecessary burden
on individuals, small companies, and manufacturers.
Brokering
Comment 10: Many commenters asserted that the proposed changes to
USML Categories I-III would mean that brokers of semi-automatic weapons
and related ammunition will be exempt from registration and licensing
that is currently triggered by their inclusion as defense articles on
the USML. Other commenters correctly understood that State would
continue to impose brokering controls for items which moved to the CCL
that are also listed on the USMIL. One of these commenters asserted
that they are pleased to see that the State May 24 rule attempts to
maintain effective oversight of arms brokers by ensuring that brokers
must register with the Department of State and seek a license. This
commenter asserted that these provisions are critical in helping
mitigate illegal arms trafficking to major conflict zones and
transnational criminal organizations.
BIS response: BIS clarifies that the Department of State in its May
24 rule and its final rule retains brokering controls for items which
are now listed on the CCL that are also listed on USMIL. BIS directs
the public to review the State final rule for information on the
brokering controls under the ITAR. The Department of State in its
companion rule noted it does not intend to impose a double licensing
requirement for individuals undertaking activities on behalf of another
to facilitate a transaction that will require licensing by the
Department of Commerce. In practical terms, this means the vast
majority of exporters who only export firearms on the CCL directly from
the U.S. or reexport U.S.-origin firearms on the CCL are not
``brokers'' and will not have to register with DDTC.
Congressional Oversight
Comment 11: Multiple commenters expressed concerns that this final
rule would reduce congressional oversight of arms transfers because BIS
does not have to notify Congress of firearms sales in excess of $1
million, as the Department of State does. These commenters asserted
that: (1) Congress needs to be able to review these types of firearms
sales to ensure large risky exports do not proceed; (2) Congress has
played an important role in stopping several risky firearms sales
because of the congressional notification requirement (commenters
provided examples of sales from 2017 to Turkey and the Philippines that
they asserted were blocked by Congress); (3) congressional
notifications are a valuable tool for the public to be able to see when
large firearms sales are being proposed; and (4) certain members of
Congress have asserted their concern that not including a congressional
notification requirement under the EAR would be counter to
congressional intent.
BIS response: The Department of State in its companion rule also
acknowledges those concerns and notes that those firearms that the U.S.
Government deemed through the interagency review process to warrant
continued control under the ITAR as defense articles will remain
subject to congressional notification requirements in conformity with
section 36 of the AECA and Executive Order 13637. In this response, BIS
also puts the congressional notification issue into context under the
EAR and the statutes that the regulations implement for items ``subject
to the EAR.''
BIS notes that at the time of publication of the Commerce May 24
rule, the Export Administration Act (EAA) did not include a
congressional notification requirement for firearms, nor did any other
statute that the EAR implements for firearms. Therefore, BIS did not
include a congressional notification requirement because it did not
want to prejudge congressional intent in this area. On August 13, 2018,
the President signed the National Defense Authorization Act for Fiscal
Year 2018, which included ECRA. Congress did not include in ECRA any
requirements for congressional notification for firearms and related
items exports. Therefore, BIS is not including a congressional
notification requirement in the final rule.
Overseas Trafficking, Proliferation, and Diversion of Firearms
Comment 12: Multiple commenters expressed a general concern that
the transfer to the CCL increases the risk of overseas trafficking,
proliferation, or diversion. Multiple commenters also expressed
concerns about the BIS end-use monitoring (EUM) capabilities and the
impact the companion Department of State rule has on the Department of
State's EUM programs. Many commenters asserted that the decision to
relax controls on the export of firearms will make it easier for
terrorists to obtain the same dangerous firearms that have been used in
mass shootings in the United States. Many commenters also asserted that
these firearms are weapons of choice for criminal organizations,
narcotics traffickers, and gun traffickers, and making it easier for
them to get firearms will make their activities worse and further fuel
armed conflict abroad.
BIS response: This final rule does not deregulate the export of
firearms. All firearms and major components being transferred to the
CCL will continue to require a U.S. Government authorization. Further,
BIS has both a robust EUM program and a law enforcement division
sufficiently capable of monitoring foreign recipients' compliance with
their obligations regarding the transfer, use, and protection of items
on the CCL. Additionally, the Federal Bureau of Investigation and the
Department of Homeland Security will continue to investigate and
enforce civil and criminal violations of the export control laws as
appropriate.
BIS does not agree that moving these firearms to the CCL will mean
less oversight to prevent gun trafficking. Exporting these firearms
will require a U.S. Government authorization. The EAR also includes a
robust set of end-use and end-user controls that will supplement the
CCL based license requirements. Similar to the ITAR, BIS will impose
appropriate conditions as needed on authorizations or not approve
certain transactions if there is a concern over risk of diversion. BIS
also will maintain a robust end-use verification program for the
firearms and other items moved to the CCL from USML Categories I-III.
In addition, most firearms will require submission of a license, and
the license review policies would lead to a denial for exports to
terrorists. The EAR also includes sections in part 744, e.g., Sec.
744.14 for Foreign Terrorist Organizations (FTO), that impose
additional restrictive license requirements and license review policies
for terrorists identified under certain designations on the Department
of Treasury's Specially Designated Nationals (SDN) list. This is
significant because it excludes the use of any EAR license exceptions;
imposes a license requirement for all items subject to the EAR,
including the firearms being moved to the CCL; and acts as an
additional safeguard for transactions involving EAR items located
outside the U.S. that the Department of Treasury controls are not able
to reach.
BIS included provisions in the Commerce May 24 rule and in this
final rule to address this issue by including a presumption of denial
license review policy under the regional stability reason for control
for these types of end users. Specifically, in this final rule, the
license review policy in Sec. 742.6(b)(1)(ii)
[[Page 4144]]
is a policy of denial when there is reason to believe the transaction
involves criminal organizations, rebel groups, street gangs, or other
similar groups or individuals, that may be disruptive to regional
stability, including within individual countries.
Comment 13: One commenter, a human rights organization, asserted
that ``it has for many years called attention to the risks associated
with untrammeled export of small arms and light weapons around the
world.'' This commenter asserted that ``these arms have been associated
with the deployment of child soldiers and the rise of insurgent
groups.'' This commenter also asserted that ``these firearms are easier
to divert than larger weapons and often end up in the illicit market.''
BIS response: BIS does not agree that there is anything in the EAR
that will make the possibility of diversion any greater than it was
under the ITAR. These concerns of diversion are taken into
consideration by the export control system and underlie the basis for
some of the agency's controls. BIS also notes that the U.S. Government
continuously monitors the export control system to determine where the
most likely points of diversion are and takes actions to prevent
potential diversion points by using existing license review policies,
rescinding or revoking prior authorizations, or imposing new license
requirements or other prohibitions.
Impact on Foreign Law Enforcement
Comment 14: One commenter expressed concern that foreign law
enforcement personnel in particular are at risk of having the firearms
and ammunition that would be transferred to the CCL used against them.
Another commenter asserted that moving these firearms to the CCL will
make it hard for foreign law enforcement to counter gun trafficking.
BIS response: These assertions are mitigated by the fact that, as
stated previously: (1) These articles remain subject to BIS's EUM
programs that vet potential end users of concern, and (2) applications
for firearms and ammunition licenses will be approved only if the end
use is permitted under the laws and supervision of the importing
country.
BIS notes that this final rule is consistent with U.S. multilateral
commitments, e.g., to the Wassenaar Arrangement and the United Nations
for conventional arms reporting. The support documentation requirements
are consistent with Organization of American States (OAS) requirements
to require an import certificate issued by the importing country. This
support document requirement applies to other countries that also
impose a requirement for an import certificate prior to allowing an
import of a firearm, permitting these other countries to better control
the flow of firearms coming into their countries. In addition, U.S. law
enforcement agencies, including BIS's Office of Export Enforcement,
also coordinate with law enforcement agencies outside the U.S., as was
referenced above in the BIS response to Comment 3. The area of
preventing illegal transshipments is a good example of where various
countries have worked together, including law enforcement agencies,
regulators, and policy makers, to come up with standards and protocols
to reduce illegal transshipments, and this work will continue.
Human Rights Issues
Comment 15: A number of commenters suggested the proposed rule, if
made final, may have a negative impact on human rights in foreign
countries. BIS also received many comments asserting ``it is now
recognized that rape and sexual assault are systematically used as
weapons of war in conflicts around the world.'' One of these commenters
asserted that ``in interviews with women and girls who have survived
sexual violence during conflict, a very high number of their stories
include descriptions of the torture they endured at the point of a gun.
Although the particular models of firearms involved are seldom
identified, there is no doubt that a military-style weapon contributed
to gross violations of their human rights.'' Many commenters asserted
that even after a conflict has officially ended, the weapons left
behind are used all too often by perpetrators of domestic violence.
BIS response: BIS will use its resources and expertise in this area
to vet parties involved in transactions subject to the EAR for human
rights concerns. Similarly, as part of the aforementioned continuing
interagency review of export licenses for firearms, the Departments of
State and Defense will remain active in the interagency review process
of determining how an item is controlled and will review export license
applications on a case-by-case basis for national security and foreign
policy reasons, including the prevention of human rights abuses. As
stated previously in this final rule and in the companion rule
published by the Department of State, the Department of State will
continue vetting potential end users when reviewing Commerce licenses,
to help prevent human rights abuses.
BIS does not anticipate authorizing exports of firearms to regions
involved in active conflicts because of the presumption of denial
license review policy for regional stability. Commerce on its licenses
as well as in its license exceptions includes certain requirements and
conditions to ensure subsequent disposition or use of the item will
continue to be in accordance with U.S. export control interests. These
requirements are enhanced by the EAR end-use controls in part 744,
which in many cases apply to transfers (in-country). Ultimately, the
issue raised by this commenter is one of the reasons why the license
review process is done in a careful and deliberative way to ensure as
much as possible that the items authorized for export will not
subsequently be used in ways not in accordance with the regulations, as
well as larger U.S. national security and foreign policy interests.
Effect on Other Countries
Comment 16: Some commenters asserted moving these firearms to the
CCL would increase the likelihood for greater destabilization and
conflict worldwide as well as for these weapons to be trafficked back
into the U.S. for nefarious uses here. Some commenters asserted that
``military-style semi-automatic rifles and their ammunition, are
weapons of choice for criminal organizations in Mexico and other Latin
American countries that are responsible for most of the increasing and
record levels of homicides in those countries.'' These commenters
asserted that this will only send more asylum seekers fleeing to U.S.
borders.
BIS response: BIS does not agree that the transfer of items to the
CCL would increase the likelihood of greater destabilization and
conflict worldwide, or specifically in Mexico or other Latin American
countries. As described above, each foreign government decides what
firearms may be imported into its country. In addition, as noted above,
these items will be controlled for regional stability, so each license
application will be reviewed to evaluate whether the export of these
firearms may contribute to destabilizing that foreign country or other
regional stability concerns.
U.S. Nationals and Interests Overseas
Comment 17: Some commenters asserted that this change in licensing
jurisdiction could lead to an unfortunate future situation where our
own combat troops face troublemakers armed with American-made weaponry.
[[Page 4145]]
BIS response: The U.S. export control system, whether that is the
export controls implemented under the EAR or the ITAR, is focused on
protecting U.S. national security and foreign policy interests.
Effective controls are in place under the EAR to ensure as much as
possible that items subject to EAR do not endanger U.S. troops, U.S.
nationals, or other U.S. interests is one of the key objectives of EAR
controls. This final rule is intended to ensure that items being moved
to the EAR will not endanger U.S. interests. BIS, as well as the
Department of State, works to ensure that diversions do not occur, but
it is a concern not unique to firearms moved to the CCL, and something
the U.S. export control system is designed to counter.
Consistency With U.S. Multilateral Commitments
Comment 18: Other commenters suggested that this rule contravenes
international commitments the United States has made through mechanisms
such as the Wassenaar Arrangement. One commenter asserted that the U.S.
has already alienated many of our allies, and this rule change will
further aggravate relations by pushing more firearms into their
countries.
BIS response: The transfer of the concerned items to the CCL does
not contravene U.S. international commitments, as the U.S. Government
will continue to apply a high level of control to these items and
require U.S. Government authorization for all exports of firearms and
major components. Further, the controls being implemented under the EAR
with this final rule are consistent with U.S. multilateral commitments,
e.g., to the Wassenaar Arrangement, the United Nations, and the OAS.
BIS notes that foreign governments decide what items may be imported
into their countries and how such items will be regulated within that
country. Regardless of the U.S. export control system, an exporter must
still meet the requirements of an importing country and if the
importing country does not allow the importation of these items or
requires certain requirements to be met, those foreign regulatory or
other legal parameters set the parameters and scope for what may be
imported, who may use such items, and for what end uses.
Reporting Requirement for Political Contributions and Fees to the EAR
To Prevent Corruption in the Arms Trade
Comment 19: One commenter asserted that the transfer of certain
Categories I-III items from ITAR to EAR control will mean the loss of
the reporting requirements outlined in 22 CFR part 130. This commenter
asserted that part 130 requires exporters to report payment of certain
political contributions, fees, and commissions related to the sale of
defense articles and services to the armed forces of a foreign country
or international organization to the DDTC and because the EAR does not
have the same type of reporting requirement, this may result in
increased corruption in arms sales. The same commenter asserted that
``in many countries around the world, corruption is rampant within
their arms procurement systems, as foreign officials seek to steal
funds from their national budgets for their personal gain,'' so not
including a reporting requirement in the EAR may make the corruption
worse. The same commenter asserted that under the Commerce May 24 rule,
BIS would limit its ability to obtain useful information on U.S.
defense companies and prosecute bribery.
BIS response: BIS does not agree with these assertions. The Foreign
Corrupt Practices Act (FCPA) already prohibits this type of corruption
activity and provides a robust regulatory scheme. FCPA applies to all
items subject to the EAR, including items that will be moved from the
USML to the CCL. Therefore, imposing a separate reporting requirement
is not needed under the EAR to prevent this type of illegal activity.
BIS highlights here in the preamble of this final rule that any party
involved in a transaction ``subject to the EAR'' must also follow any
other applicable U.S. laws, including the FCPA. Questions on the FCPA
should be directed to the Department of Justice and the U.S. Securities
and Exchange Commission (SEC).
Commenters Asserting Burdens Will Be Reduced (for Purposes of E.O.
13771)
Comment 20: A firearms trade association commenter asserted that
``it has reviewed the proposed rule thoroughly with its membership . .
. and most members have told it that the final versions of the rules
would eventually be beneficial because they would significantly reduce
the overall burden and cost of complying with controls on the export of
commercial firearms and ammunition.'' This trade association noted that
``[a]ll who responded told us that there would be an initial short-term
increase in burden and cost because of the need to re-classify
thousands of commodity, software, and technology line items and SKUs
affected by the new rules, but that the long-term regulatory burden
reduction would significantly outweigh the short-term need to adjust
internal compliance programs and practices.'' One firearms industry
trade association commenter noted that most of ``its members,
particularly the small- and medium-sized companies, believe that the
changes will be economically beneficial for them because the eventual
regulatory simplification and cost reductions will allow them to
consider exporting when they might not have otherwise.'' Additionally,
many small independent gunsmiths commented about the disproportionate
negative impact the costs of ITAR compliance had on their businesses.
Several commenters asserted that by moving such items to the EAR, many
domestic manufacturers who do not export would be relieved of the
significant financial burden of registering under the ITAR. One trade
association commenter asserted that the costs for their members would
be reduced because under the Commerce system, there are no fees to
apply for licenses. This commenter also asserted that their burdens
would be reduced because the Commerce license application forms are
vastly simpler compared to the Department of State license application
forms.
One commenter asserted that ``one of the benefits under the EAR
will be that controls on less sensitive and widely available basic
parts, components, and technology are more tailored and allow for less
burdensome trade with close allies through license exceptions.'' This
same commenter also asserted that ``sales with regular customers can be
combined in to fewer license applications, thus reducing overall
paperwork to achieve the same policy objectives.''
One trade association commenter asserted that these changes ``will
lead to growth for U.S. companies, more jobs in the United States, and
related economic benefits for the cities and states where the members
reside while accomplishing the same national security and foreign
policy objectives they have always had.'' One commenter asserted that
the items being moved to the CCL are manufactured in many parts of the
world and that by engaging more with the world, U.S. firearms
manufacturers will improve their knowledge and capability. One
commenter that identified himself as a U.K. citizen, who often travels
to the U.S. and visits sporting goods stores, asserted that the price
of certain items, e.g., cartridge cases and bullets, are less than half
the price charged in the U.K. The commenter asserted, ``fix this and
U.S. manufacturers will see a significant increase in demand from U.K.
based firearms owners.''
[[Page 4146]]
BIS response: BIS agrees that the Commerce May 24 rule would reduce
the overall regulatory burden of complying with U.S. export controls,
including through regulatory simplification and cost reductions that
may allow certain persons, e.g., small independent gunsmiths, to
consider exporting when they might not have otherwise because of the
economic burden of complying with the ITAR. One of the strengths of the
EAR control structure is its focused approach on exports without unduly
burdening persons that are not a party to an export transaction. Not
requiring domestic manufacturers to register with BIS is a good example
of the more focused EAR controls. The fact that BIS does not charge a
registration fee to be able to apply for a Commerce license is another
financial benefit.
The EAR is a more tailored control structure, and this more
flexible control structure will reduce burdens and create more
opportunities to export. One of the key benefits of the more flexible
Commerce licensing processes is the ability for applicants to combine
multiple transactions on license applications for sales to regular
customers. Because BIS does not require a purchase order, the overall
number of licenses an exporter may need to submit is reduced.
The changes included in this final rule may lead to increased sales
opportunities for U.S. exporters and related economic benefits for the
United States, while also accomplishing the same national security and
foreign policy objectives of the U.S. export control system. Because of
the more flexible EAR control structure, parties outside the U.S. may
want to purchase more items, such as ECCN 0A501.x parts or components
that were previously avoided because of no de minimis eligibility under
the ITAR. This rule might also lead to increased export activity
because parties outside the U.S. may import more U.S. origin firearms
because of the more flexible Commerce licenses that do not require a
purchase order. Importantly, any additional exports that may occur are
the same types of exports that would have been otherwise approved under
the ITAR.
As asserted by some of the commenters, the changes made by this
final rule may help to foster innovation in the United States by
encouraging collaboration with companies outside the United States, and
this may lead to better U.S. products. They may also encourage more
people to be interested in purchasing items from the United States.
Commenters Asserting Burdens Will Not Be Reduced (for Purposes of E.O.
13771)
Comment 21: One anonymous commenter asserted that moving these
items to the CCL would create a small cost-savings for its company in
registration and licensing fees, but the commenter did not see a
demonstrated equivalent in terms of paperwork reduction or real time
savings. This commenter asserted that the issue for small companies
having to pay the registration fees due to their manufacturing
activities is better resolved by changing the definition of
manufacturer to add a minimum size requirement. The same commenter
asserted that the EAR does not include a concept of defense services
and the technology controls are more narrowly focused and apply in
limited contexts as compared to the ITAR, and this change represents an
improvement in terms of the commenter's ability to share information
needed for marketing firearms and for repairing them internationally.
However, this commenter asserted that the same result could be achieved
via amendment to the ITAR. The same commenter asserted that ``the
improvements and savings are quantified using the 43.8 minutes for BIS
application vs. the 60 minutes for DDTC application and that this
metric provides no meaningful data from which to extrapolate total
process savings or if any is really generated.'' This commenter also
asserted that other additional burdens proposed in the Commerce May 24
rule also need to be accounted for, e.g., increasing the quantity and
type of data elements which will be required for AES filing. The same
commenter asserted that there will be burdens and expenses of
transition related to reclassification of all products, re-training of
all employees, and advanced training needed for compliance personnel.
The commenter acknowledged that it understands this burden is
considered short term; however, the commenter asserted that the
benefits of moving these items to the CCL still has not been adequately
explained to justify these short-term burdens. This same commenter
asserted that other than utilizing a different application form and the
change in the agency receiving applications, it has not been
demonstrated exactly what, if any, process improvement this represents.
BIS response: While this commenter did not anticipate significant
cost or burden reduction from the transition to the EAR, most other
commenters addressing these issues anticipated more significant
benefits. The reform effort is not intended to make the ITAR the same
as the EAR; this would not be warranted because the more restrictive
ITAR controls are needed to regulate items such as fighter aircraft,
submarines, and intercontinental ballistic missiles. BIS agrees that
the more focused EAR technology controls will ease burdens, but still
appropriately control technology for these items.
BIS does not agree with the assertion that the way the cost savings
were calculated in the Commerce May 24 rule provided no meaningful data
to extrapolate total process savings. Many commenters asserted that
they believed their burden would be reduced by moving these items to
the CCL. This commenter is correct that other commenters expressed
concerns about individuals being required to file EEI in AES for
exports under License Exception BAG of their personally owned firearms,
and concerns about including the serial number, make, model number, and
caliber of firearms in the EEI in AES. However, this final rule
significantly reduces these burdens. For example, this final rule
requires the U.S. Customs and Border Protection (CBP) Certification of
Registration Form 4457, a form already being used by exporters.
Therefore, there will be no additional burden because BIS will be
requiring information already submitted by exporters to CBP for other
reasons. For licensed exports, BIS also eliminated the requirement to
file those additional data elements, except for temporary exports or
when the Commerce license includes a condition requiring it, similar to
the approach Department of State takes with provisos on its licenses.
BIS acknowledges that there will be some short-term adjustment
costs. BIS also acknowledges that the EAR is a more complex control
structure because with greater flexibility there is a need for
additional nuances in the control structure. BIS disagrees that the
rationale for the transition was not clearly demonstrated in the
Commerce May 24 rule.
BIS appreciates this same commenter highlighting a key point of
commonality. The commenter is correct that the Commerce license
applications will continue to be reviewed by the Departments of State
and Defense. This well-established interagency review process specified
in both Executive Order 12981 and in the EAR helps to protect U.S.
export control interests and ensures that a diversity of interests and
agency expertise is being used to review license applications. BIS
disagrees that the only difference is a different application. For
example, the fact that
[[Page 4147]]
an applicant does not require a purchase order under the EAR to apply
for a license allows for more companies to compete for business
opportunities.
Licensing Costs
Comment 22: Many commenters asserted that the Commerce May 24 rule
would transfer the cost of reviewing applications and processing
licenses from gun manufacturers to taxpayers. Many commenters also
asserted that with respect to firearms exports, taxpayers and the
public at large should be concerned about pressures to cut corners that
could result in authorization of irresponsible transfers of firearms,
because BIS will not be charging fees for licensing.
BIS response: By statute, Congress prohibits BIS from imposing fees
for any license application, authorization or other requests. This
prohibition applies for submissions in connections with all items
subject the EAR and is not specific to the firearms industry. BIS has
effectively licensed items for several decades based on the fee free
license construct that was included in the Commerce May 24 rule and in
this final rule.
Comments Specific to the Regulatory Text
Inclusion in the ``600 Series''
Comment 23: One commenter requested BIS include semi-automatic
firearms and related items in the ``600 series'' instead of in 0x5zz
ECCNs.
BIS response: BIS does not agree. As was stated in the Commerce May
24 rule and discussed above in response to the comments, the semi-
automatic firearms this final rule adds to ECCN 0A501.a have a
significant worldwide market in connection with civil and recreational
activities such as hunting, marksmanship, competitive shooting, and
other non-military activities. For these reasons, the movement of
firearms and ammunition from USML Category I and III, similar to the
civilian spacecraft and related items moved from the USML and
controlled on the CCL under 0x515 ECCNs, do not warrant being
controlled under the ``600 series.''
New ECCN 0A501: Firearms and Related Commodities
Comment 24: One commenter identified an inconsistency between the
Commerce May 24 rule in the ``Related Controls'' paragraph that stated
magazines with a ``capacity of 50 rounds or greater'' are ``subject to
the ITAR.'' However, the proposed USML Category I(h)(1) referenced only
magazines and drums with a ``capacity greater than 50 rounds.''
BIS response: This final rule corrects the EAR text to make it
clear that magazines with a ``capacity of greater than 50 rounds'' are
subject to the ITAR.
Comment 25: One commenter asserted there had been past issues of
interpretation under the ITAR for what was meant by ``complete breech
mechanism'' and therefore the commenter recommended defining the term
under the EAR.
BIS response: BIS accepts the change to include a definition of
``complete breech mechanisms.'' This final rule will add a definition
for ``complete breech mechanisms'' to part 772 and will add double
quotation marks around the term where it is used in ECCNs 0A501 and
0A502.
Comment 26: One commenter took issue with the use of the term
``assault weapons'' or ``close assault weapons.'' This commenter
asserted that the terms should be defined, or not used. This commenter
requested the term ``semi-automatic'' rifles, pistols, or other firearm
be used instead.
BIS response: BIS agrees and has removed the term ``assault
weapons'' in this final rule and instead uses the term ``semi-
automatic,'' which better aligns with the terms used in the control
parameters.
Comment 27: One commenter recommended BIS define ``firearm'' in
harmonization with the USML.
BIS response: BIS does not agree the term ``firearm'' needs to be
defined in the EAR. The term ``firearms'' is used in this final rule
with additional technical parameters or ECCN identifiers, e.g.,
0A501.a, that will enable identification of these firearms. BIS does
not believe the use of the term ``firearms'' will create confusion with
the USML or the USMIL.
Comment 28: One commenter noted an inconsistency in the way
calibers are described in the control lists under the Commerce May 24
rule. In USML Categories I and II, firearms and guns are described as
``caliber .50 inclusive (12.7 mm)'' and ``greater than .50 caliber
(12.7 mm),'' respectively. In new ECCN 0A501, firearms are described in
``items'' paragraph .a and .b as ``of caliber less than or equal to .50
inches (12.7 mm)'' and ``with a caliber greater than .50 inches (12.7
mm) but less than or equal to .72 inches (18.0 mm),'' respectively.
This commenter asserted that the caliber terms not being aligned
between the control lists could cause confusion and misinterpretation
of the controls between the USML and CCL, particularly in regard to the
ammunition controls which follow the respective firearm controls.
BIS response: BIS notes that the intent of this final rule is to
transfer those items previously controlled under Categories I-III that
no longer warrant ITAR control, to the respective ECCNs as created
under this rule to the CCL by using long-accepted industry standards of
``caliber'' as the defining delineation between ammunition types. BIS
made changes in this final rule to use the appropriate text in this
final rule to be consistent with the text used in the USML, so that .50
caliber ammunition and .50 caliber firearms will transition into their
proper 0x5zz ECCNs. For example ECCN 0A501, includes all non-automatic
and semi-automatic ``.50 caliber (12.7mm) and less'' firearms under
``items'' paragraph .a.
Comment 29: One commenter was concerned that with the proposed
description of caliber in inches in ECCN 0A501, ammunition for .50
caliber Browning Machine Guns (``50 BMG'') would be controlled under
both 0A505 and USML Category III creating overlapping controls.
BIS response: BIS clarifies in this final rule that ECCN 0A501
includes all non-automatic and semi-automatic ``equal to .50 caliber
(12.7mm) and less'' firearms under ``items'' paragraph .a. Therefore,
this final rule also would not control the 50 BMG under ECCN 0A501.a.
However, the corresponding ammunition which is used in a number of non-
automatic and semi-automatic firearms will be controlled under 0A505.a,
when not linked or belted.
Comment 30: Some commenters requested BIS revise Note 3 to 0A501 so
that the definition of antique firearms is aligned with the Wassenaar
Arrangement controls or alternatively that the date threshold in the
definition of antique firearm in Note 3 be changed from 1890 to 1898 to
align with the ITAR's exemption.
BIS response: BIS does not agree. Because this rule focuses on the
export of firearms, it uses the year 1890 so that the United States
remains consistent with its international export control commitments
under the Wassenaar Arrangement, which uses 1890 as the cutoff year to
identify many firearms and armaments that are not on the control list.
Comment 31: One commenter requested that BIS clarify where
combination firearms would be controlled, noting that neither ECCN
0A501 (firearms) nor ECCN 0A502 (shotguns) refer to firearms that are a
combination of shotgun and rifle, i.e., that have two barrels.
BIS response: BIS agrees, and in this final rule adds a note to
clarify that combination firearms are controlled
[[Page 4148]]
under ECCN 0A501.a. This final rule also adds a note under ECCN 0A502
to specify that all shotguns and ``shot-pistols'' are controlled
identically.
Comment 32: One commenter sought clarification on the
classification of detachable magazines for ECCN 0A501 firearms with a
capacity of less than or equal to 16 rounds. The commenter asserted
that ECCN 0A501.d explicitly lists magazines with a capacity of greater
than 16 rounds, but it was not clear whether magazines with a lesser
capacity are designated as EAR99 or controlled under 0A501.x.
BIS response: BIS agrees, and this final rule adds a new note to
paragraph .d to clarify that magazines with a capacity of 16 rounds or
less are classified under ECCN 0A501.x.
Comment 33: One commenter asserted that as currently proposed,
paragraph .x would apply to parts and components specially designed for
a commodity classified anywhere on the USML. This commenter recommended
revising as follows: ``Parts'' and ``components'' that are ``specially
designed'' for a commodity classified under paragraphs .a through .c of
this entry or USML Category I and not elsewhere specified on the USML
or CCL.
BIS response: BIS does not agree that a change is needed. Because
some of the parts and components controlled under ECCN 0A501.x may be
for firearms incorporated into a fully automatic firearm that is
incorporated into a military vehicle (a USML Category VII commodity),
the broader reference to the USML is more appropriate. The USML Order
of Review and CCL Order of Review will ensure that only those parts and
components intended to be classified under ECCN 0A501.x will be
classified under this ``items'' paragraph.
Comment 34: One commenter requested revising paragraph 0A501.y by
replacing the period at the end of the paragraph with the phrase
``including'' or ``as follows:'' In order to clarify whether .y is
limited to the enumerated .y paragraphs, or itself is a control
paragraph in which items can be controlled.
BIS response: BIS clarifies that the .y listings are exhaustive,
and to be classified in a .y paragraph, the item needs to meet the
identified description and the definition of ``specially designed.''
Comment 35: One commenter requested clarification of whether the .y
paragraph itself serves as a catch-all for ``parts,'' ``components,''
``accessories,'' and ``attachments.'' For example, a set of fiber-optic
sights for a pistol are not ``iron sights'' as listed in .y.3, but may
be a ``specially designed'' ``attachment.''
BIS response: BIS agrees that the introductory text of ECCN 0A501.y
needs to be revised to clarify that the ``parts,'' ``components,''
``accessories,'' and ``attachments'' ``specially designed'' therefor
for the .y items are also controlled in the .y paragraphs. This final
rule makes this change. BIS had previously made this same correction to
the other .y paragraphs on the CCL to ensure, for example, that
``specially designed'' parts used in ``specially designed'' galleys
classified under ECCN 9A610.y for military aircraft, would not be
controlled in 9A610.x.
Comment 36: One commenter asserted that ECCN 0A501.y contains three
types of commodities that have been officially determined to be EAR99
for many years: (i) .y.2--scope mounts and accessory rails; (ii) .y.3--
iron sights; and (iii) .y.4--sling swivels. This commenter requested
that the parts in .y paragraphs .y.2, .y.3, and .y.4 be removed from
ECCN 0A501 and a note be added to confirm that they remain EAR99 items.
BIS response: BIS does not accept this change because it only works
if the past CJs covered those items and all variants. Paragraph (b)(1)
of ``specially designed'' and General Order No. 5 would not be
applicable to those items not included within the scope of a CJ--
meaning an item may get pulled up into .x. Therefore, to address this
issue definitively this final rule keeps these items as .y items.
License Exception LVS
Comment 37: BIS received a number of comments on License Exception
LVS eligibility. Some commenters supported its availability, though one
commenter suggested that wholesale value rather than actual value
should be used while another commenter requested higher value shipments
should be authorized to Canada. One commenter recommended pegging the
LVS dollar value to inflation to allow for incremental increases to
match price increases over time. One commenter requested that Canada
should have all of its LVS eligibility specified in its own LVS
paragraph in the ECCN, distinguishing Canada's eligibility from other
Country Group B countries. Some commenters raised concerns related to
License Exception LVS availability, asserting that it would not curb
risky exports of pistol grips and magazine clips valued at $500, that
it is possible for companies or individuals to export many low-value
items in one shipment without a U.S. license, and that it could fuel
gun violence in Mexico and Central America. One commenter requested
reducing the LVS eligibility under ECCN 0A501 from $500 to $100, and
reducing further the commodities that would be eligible.
BIS response: BIS agrees that License Exception LVS will be
particularly useful for the firearms industry for low value shipments
and believes that the license exception is properly scoped in the
dollar value used and the scope of availability for the reasons
outlined in the Commerce May 24 rule. BIS emphasizes as specified in
the name of the license exception itself, this license exception is
limited to low value shipments. This includes the total quantity for
consolidated shipments, even if a shipper was consolidating several
shipments. BIS also notes that an exporter is limited to twelve orders
per year to the same consignee. The terms of License Exception LVS also
strictly prohibit the splitting of orders to try to evade the
applicable LVS dollar value. In addition, if there are questions
whether an exporter has stayed within the required scope of LVS, EE can
require exporters to hand over all the required recordkeeping documents
related to a transaction under License Exception LVS to identify
whether there has been a violation of the EAR. LVS is not currently
linked to inflation, but the public may at any time make
recommendations for changes to the regulations, including suggestions
for revising the LVS dollar values in an ECCN.
BIS notes that only countries identified in Country Group B are
eligible to receive commodities under License Exception LVS. These are
countries that the U.S. Government does not have export control
concerns with for purposes of the commodities that are eligible to be
authorized under License Exception LVS. More sensitive commodities,
such as firearms and some key components, are excluded from License
Exception LVS. As noted in the Commerce May 24 rule, the ITAR has a
similar type of exemption. Relatedly, BIS does not believe Canada-
specific provisions are necessary in the License Exception LVS
paragraph of ECCN 0A501 to specify all LVS eligibility for Canada in
one stand-alone paragraph. First, it would deviate from how LVS is
described in other ECCNs. Second, there is the potential that an
exporter may get confused and believe LVS is available for other
Country Group B countries because the same commodities were identified
in more than one LVS paragraph.
Finally, it is important to note that the importing country will
also have its own requirements for imports and
[[Page 4149]]
domestic sale and use, including for commodities such as pistol grips.
While someone like a jeweler or other craftsman in the U.S. (e.g., a
hobbyist who enjoys engraving pistol grips with western cowboy motifs)
could use License Exception LVS, it would not be available for larger
transactions, such as someone wanting to export to a retail store in a
foreign country.
New ECCN 0A502: Shotguns and Certain Related Commodities
Comment 38: One commenter requested revising the heading of ECCN
0A502 to specify the parts and components enumerated in the heading are
shotgun parts and components.
BIS response: BIS agrees, and this final rule revises the heading
to specify that parts and components enumerated in the heading of ECCN
0A502 are shotgun ``parts'' and ``components.'' BIS also makes one
other change to address the issue of clarity raised by this commenter.
This final rule adds a note to ECCN 0A501 to specify that ``shot-
pistols'' will be controlled as shotguns.
Comment 39: One commenter requested that rather than having the
items controlled contained in the ECCN heading, BIS should enumerate
the shotguns in separate ``items'' paragraphs that track with the
different reasons for control for the different size shotguns in the
``items'' paragraph to ease the compliance burden for exporting these
shotguns.
BIS response: BIS does not agree. The license requirement section
in this final rule is already consistent with the current control text,
applying CC Column 2 and CC Column 3 as appropriate depending on the
destination. BIS already uses this structure for long barreled
shotguns, which this final rule moves to ECCN 0A502.
Comment 40: One commenter requested that the final rule define
antique shotguns in ECCN 0A502 to capture those guns made ``in or
before 1898,'' consistent with the definition of antique rifles and
handguns in the Gun Control Act of 1968.
BIS response: BIS agrees, and this final rule adds a new Note 1 to
0A502 specifying that shotguns made in or before 1898 are considered
antique shotguns and designated as EAR99.
Comment 41: One commenter requested BIS clarify the control status
of accessories of optics, e.g., sunshades or other anti[hyphen]glare
devices.
BIS response: BIS clarifies that sunshades or other anti-glare
devices if not enumerated or otherwise described in ECCN 0A502 or any
other ECCN are designated as EAR99.
Comment 42: One commenter requested that the description in the
``Related Controls'' paragraph of ECCN 0A502 be made consistent with
how such shotguns are referred to in the revised USML Category I.
BIS response: BIS agrees, and this final rule removes the phrase
``combat shotguns'' wherever it appears in ECCN 0A502, including in the
``Related Controls'' paragraph. BIS in this final rule also removes
references to ``combat shotguns'' in ECCN 0A505.
Comment 43: One commenter requested in order to have consistent
controls and exceptions for similar commodities, that BIS allow the use
of License Exception LVS for ECCN 0A502 parts and components to the
same extent proposed for 0A501, e.g., for shotgun trigger mechanisms,
magazines, and magazine extensions.
BIS response: BIS agrees, and in this final rule revises the LVS
paragraph in the License Exceptions section of ECCN 0A502 to add LVS
eligibility of $500 for the same types of parts and components for ECCN
0A502 shotguns that are available for LVS under 0A501. Complete
shotguns will continue to be excluded.
Comment 44: One commenter asserted that to facilitate the use of
License Exception LVS, the ECCN 0A502 heading should be changed to
``Shotguns and related commodities (See List of Items controlled) . .
.'' and then under the ``List of Items Controlled'' parts and
components should be enumerated to include ``complete trigger
mechanisms,'' ``magazines,'' and ``magazine extension tubes.''
BIS response: BIS does not agree. BIS in this final rule continues
to enumerate ``parts'' and ``components'' in the heading, but in the
interest of clarity it also includes the specific eligible commodities
in the LVS paragraph.
New ECCN 0A504: Optical Sighting Devices and Certain Related
Commodities
Comment 45: One commenter asserted that the proposed Note 1 to
0A504.f states that ``0A504.f does not control laser boresighting
devices that must be placed in the bore or chamber to provide a
reference for aligning the firearms sights.'' This commenter asserted
there are a variety of boresighting devices that are placed over the
muzzle of the barrel instead of inside the bore or chamber and perform
the same function as those described in the note. For these reasons,
the commenter requested that this Note be revised to read as follows:
``0A504.f does not control laser boresighting devices that provide a
reference for aligning the firearms sights. This includes any laser
boresighting device, regardless of how it attaches to the firearm
(e.g., boresights that fit over the muzzle of the barrel), which
performs the same function.''
BIS response: BIS does not agree. Revising Note 1 to 0A504.f would
make it difficult to distinguish between what the commenter is
proposing and a laser pointer. The note included in this final rule
makes it clear that those commodities that are placed inside a bore or
chamber would preclude its subsequent use as or with a firearm.
Comment 46: One commenter requested License Exception LVS should be
made available for ECCN 0A504.g commodities that are similarly
insignificant as those commodities eligible in ECCN 0A501.
BIS response: BIS agrees, and this final rule includes License
Exception LVS eligibility for ``parts'' and ``components'' classified
under ECCN 0A504.g.
New ECCN 0A505: Ammunition and Certain Related Commodities
Comment 47: One commenter recommended revising ECCN 0A505.a to
include ammunition for firearms controlled in USML Category I that may
not otherwise be captured by adding the phrase ``or USML Category I''
to clarify that ammunition for these type of firearms is also
controlled under ECCN 0A505.a.
BIS response: BIS agrees, and this final rule incorporates the
suggested text to clarify that ammunition for firearms in both ECCN
0A501 and USML Category I will be controlled under 0A505.a, provided it
is not enumerated elsewhere in 0A505 or in USML Category III.
Comment 48: One commenter requested BIS revise ECCN 0A505 to
include a note similar to the Note to 0A018.b to specify that dummy
ammunition is designated EAR99.
BIS response: BIS agrees, and this final rule adds a Note 4 to
0A505 to specify that all dummy and blank (unless linked or belted)
ammunition, not incorporating a lethal or non-lethal projectile(s) is
designated EAR99.
Comment 49: One commenter asserted that there are several magazine
manufacturers in the U.S. producing magazines of greater than 50 rounds
that would benefit from also having their magazine moved to the CCL.
This commenter asserted that limiting this magazine capacity to 50
rounds or less does not protect any special U.S. or allied military
advantage, but magazines
[[Page 4150]]
of greater than 50 rounds are commonly found and manufactured
worldwide.
BIS response: BIS does not agree. Magazines with a capacity of 50
rounds or less are appropriate on the CCL, and magazines greater than
50 rounds warrant ITAR control.
Comment 50: One trade association commenter noted that proposed
ECCN 0A505 included an allowance for License Exception LVS of $100 for
0A505.x ``parts'' and ``components,'' but that firearm parts and
components under 0A501 have an LVS allowance of $500. This commenter
asserted that its members feel this is an inconsistency in the
treatment of related commodities. The commenter asserted that in recent
years, costs related to ammunition components have been increasing,
with the largest increases affecting larger caliber cartridges. This
commenter asserted that the ``$100 limit on LVS will be quickly met
with small amounts of components, making this exception not as useful
as intended.'' Another commenter asserted that the ITAR allows for $500
per shipment, so $100 net under EAR would be more restrictive than ITAR
exemption.
BIS response: While the ITAR does not have an exemption for exports
of ammunition parts and components, BIS agrees, and this final rule
raises the LVS dollar value from $100 to $500 for ECCN 0A505.
New ECCN 0A602: Guns and Armament
Comment 51: One commenter suggested revising ECCN 0A606 to clearly
identify engines for self-propelled guns and howitzers as controlled
therein rather than in 0A602.
BIS response: BIS notes that the USML Order of Review and CCL Order
of Review would likely already address this. However, this final rule
adds a Related Controls paragraph (3) and a new note to ECCN 0A602.x to
clarify the appropriate classification, but it does not add such a note
to ECCN 0A606.
New ECCN 0B501: Test, Inspection and Production Equipment for Firearms
Comment 52: One commenter requested guidance on what is the
definition of production equipment under ECCN 0B501.e. This commenter
asserted that it has ``many hobbyist customers who would not qualify as
a gunsmith let alone as a manufacturer and tools and equipment designed
for hobbyists are quite different than manufacturing equipment . . .
yet we have a concern these tools will be included in 0B501.e because
even the hobbyist is `producing' a firearms part.''
BIS response: The term ``production'' is a defined term in part
772. ``Production'' means all production stages, such as: Product
engineering, manufacture, integration, assembly (mounting), inspection,
testing, and quality assurance. Part 772 also includes a definition of
``production equipment'' that includes tooling, templates, jigs,
mandrels, moulds, dies, fixtures, alignment mechanisms, test equipment,
other machinery and components therefor, limited to those specially
designed or modified for ``development'' or for one or more phases of
``production.'' The definition of ``production equipment'' in part 772
applies only in the Missile Technology Control Regime context, but for
purposes of this comment, the definition of ``production'' and the
definition of ``production equipment'' provides the needed guidance.
BIS also emphasizes that the person using the production equipment does
not change the classification of the production equipment. Importantly,
domestic use--that is use of production equipment in the United
States--does not implicate export controls.
Comment 53: One commenter requested BIS ensure there were no gaps
for the production equipment controls on the CCL for USML Category I
items as well as Category III items.
BIS response: BIS agrees. To ensure there are no gaps in production
equipment for USML Category I, this final rule expands ECCN 0B501.e to
include all production equipment ``specially designed'' for USML
Category I items. It also expands ECCN 0B505.a to include all
production equipment ``specially designed'' for USML Category III
items.
New ECCN 0B602: Test, Inspection and Production Equipment for Certain
Guns and Armament
Comment 54: One commenter requested adding examples of specific
tooling that would be controlled under ECCN 0B602, such as a note
including ECCN 0B602 boresights and units made specifically for testing
purposes.
BIS response: BIS does not agree to this addition. As described
above, part 772 defines ``production'' and ``production equipment,'' so
these existing definitions already address this comment.
New ECCN 0E501: Technology for Firearms and Certain Related Items
Comment 55: One commenter requested BIS clarify how ``technology''
is defined for 0E501 and whether shooting chronographs or empty brass
cartridge annealing machines are included in the definition of
``technology.''
BIS response: BIS clarifies that the definition of ``technology''
in part 772 applies to ECCN 0E501 and any other Product Group E ECCNs
on the CCL, including the other Product Group E ECCNs this final rule
adds, e.g., 0E505. In addition, BIS clarifies that shooting
chronographs or empty brass cartridge annealing machines are end items
and generally designated EAR99. Therefore, the examples given fall
outside the Commerce definition of ``technology.''
Comment 56: BIS received a number of comments on the concept of
``defense services,'' including concerns about the lack of defense
services controls under the EAR, the potential loss of U.S. Government
oversight on many types of defense services, and concerns about
firearms training being provided to foreign security forces without
U.S. Government approval. There were also concerns raised about the
ability of U.S. companies to provide a wide range of assistance and
training to foreign persons without sufficient U.S. oversight and a
suggestion that the definition of ``technology'' be expanded to capture
these defense-service type activities, such as private security
contractor training of foreign police with firearms. One commenter
asserted that ``the proposed rule could also create an unfortunate
scenario where U.S. private security contractors are able to provide
services to foreign security units or militias that are otherwise
prohibited from receiving training through U.S. foreign security aid.''
BIS response: BIS clarifies that defense services is specific to
the ITAR, but the EAR maintains controls related to exports, reexports,
and in-country transfers of commodities, software, and technology in a
number of ways. For example, a U.S. person is prohibited from engaging
in exports, reexports, or in-country transfers related to certain end
uses (as specified in Sec. 744.6) or a ``knowing'' violation (as
specified in Sec. Sec. 764.2(e) and 736.2(b)(10)). In addition, as
part of providing a service, a person must determine whether there will
be an export, reexport, or in-country transfer of any commodities,
software, or technology requiring an EAR authorization. Accordingly,
although the EAR generally does not control services directly, the EAR
is still highly effective at protecting U.S. export control interests
implicated by the supply of services in connection with exports,
reexports, or in-country transfers. The effectiveness comes by
controlling the technology--e.g., ``technology'' for how to produce a
firearm. The release of technology is the key nexus where providing a
service crosses over into a transaction that is
[[Page 4151]]
subject to the EAR and that merits control. In most cases, the analysis
will focus on whether any technology that is subject to the EAR will be
released as part of providing the service. The release of technology
moved from USML Categories I-III will require a U.S. Government
authorization, except for 0E602 technology being exported to Canada
which may be exported No Licensed Required (``NLR'').
For example, providing design and development assistance, testing,
and production assistance on firearms and ammunition to foreign persons
would be a release of ``technology'' subject to the EAR and require an
EAR authorization, unless the information being released fully met the
criteria in part 734 for exclusion from the EAR. The EAR requirements
would apply if the technology was being exported. The EAR requirements
would also apply if the technology was being released in the United
States to a foreign national as a deemed export, including technology
released through training.
BIS cautions against assuming that no U.S. Government authorization
is required to provide training to foreign security forces. Providing
military training of foreign units and forces would still be a defense
service regulated by the ITAR. Questions on whether a specific service
may be a defense service should be directed to the Department of State.
For purposes of the EAR, as described above, the question centers on
whether any items that are subject to the EAR are provided as part of
that service, and if such items are related to firearms, then U.S.
Government authorization will be required.
BIS notes that if an item, such as the firearms moved to the CCL in
this final rule, is being exported under the Foreign Military Sales
(FMS) program, those items are not ``subject to the EAR''--meaning the
EAR would not apply and for purposes of the AECA those items being
exported under an FMS letter of offer and acceptance are defense
articles subject to State Department controls under 22 U.S.C. 2794(3)
for the specific transaction. BIS also notes that for non-FMS U.S.
foreign security aid, the granting U.S. organization can include
provisos as needed as part of the aid agreement that imposes any
necessary restrictions the aid granting U.S. agency believes is
warranted. In addition, BIS through the licensing process can impose
conditions as warranted on licenses to ensure consistency with other
requirements as needed. As noted above, the Department of State is a
licensing review agency for Commerce licenses and can advise on
Commerce export licenses as warranted if additional conditions may be
needed in furtherance of a direct commercial sale as part of U.S.
foreign security aid.
Comment 57: One commenter asserted that because of the narrowness
of the definition of ``required,'' it ``means companies may be able to
provide a wide range of training activities, design and development
assistance, testing, and production assistance on firearms and
ammunition to foreign persons without sufficient scrutiny and
oversight.''
BIS response: BIS does not agree. The term ``required'' is an EAR
defined term and is a well understood concept used on the control lists
of the multilateral export control regimes. The EAR has effectively
controlled ``technology'' for various other sensitive and sometimes
lethal items using the existing definition and concept of ``required.''
Comment 58: One commenter asserted that ``in 2016, U.S.
registration for firearms manufacturing activities was deemed so
important that DDTC issued specific guidance providing that a broad
range of activities (e.g., use of any special tooling or equipment
upgrading in order to improve the capability of assembled or repaired
firearms, and rechambering firearms through machining, cutting, or
drilling) constitute ``manufacturing'' and required registration.''
This commenter asserted it was concerned because this 2016 guidance
will not apply to Category I-III items moving to the CCL.
BIS response: BIS clarifies that individuals have been able to
lawfully make their own firearms in the United States, but not for
reselling. ATF licenses domestic manufacturers. The types of
gunsmithing services described by this commenter are not considered
``production'' under the EAR.
Revision to ECCN 0A018
Comment 59: Some commenters requested removing ECCN 0A018 and
transferring those commodities to 0A505, so all commercial firearms,
ammunition, and related items could be in one of the series of new
0x5zz ECCNs and not be left behind in legacy xY018 entries. The
commenter suggested that once the items in the proposed ECCN 0A018.b
are moved to 0A505, and controlled in the same manner, then 0A018 could
be removed. Another commenter requested the commodities classified in
ECCN 0A018.b for ``specially designed'' components should be controlled
under 0A505.x. The commenter also requested that the decontrol note in
ECCNs 0A018.b be transferred to 0A505 so that the current EAR99 status
of such items is maintained.
BIS response: BIS agrees with these requested changes. This final
rule removes the items controlled under ECCN 0A018 and adds these
commodities to 0A505 but retains the heading of ECCN 0A018 and adds a
cross reference to ECCN 0A505. This final rule removes the commodities
controlled under ECCN 0A018, because this final rule controls these
commodities under 0A505.d or .x. As conforming changes, this final rule
removes ECCN 0E018, because 0E505 is broad enough to control this
technology and revises the heading of ECCN 0A988 to remove an outdated
reference to ECCN 0A018.d.1. ECCN 0A018.d paragraph is reserved in
0A018, so this reference in 0A988 should have been updated in an
earlier rule.
BIS clarifies that the control parameters of ECCN 0A505.x in this
final rule are broad enough to control commodities classified in ECCN
0A018.b for ``specially designed'' components controlled under 0A505.x.
without further revisions. This final rule adds a Note 4 to ECCN 0A505
to address the commenters' request related to the decontrol note in
0A018.
Conforming Change to General Order No. 5
Comment 60: One commenter requested that licenses already granted
under the ITAR should be grandfathered for all outstanding
transactions.
BIS response: BIS clarifies here that this was already addressed
with the revisions proposed in the Commerce May 24 rule for General
Order No. 5, which adds 0x5zz ECCNs to General Order No. 5 and will be
adopted in this final rule. The current General Order No. 5 includes
grandfathering provisions and allows for applying for Commerce licenses
once a final rule is published, but not yet effective.
Revisions to Regional Stability Licensing Policy for Firearms and
Ammunition
Comment 61: Several commenters raised concerns that laws against
the provision of arms where certain human rights abuses are of concern
may not apply to the 0x5zz ECCNs and that the role of the Bureau of
Democracy, Human Rights, and Labor (DRL) at the Department of State
would be diminished. One commenter asserted that the Department of
State would no longer have a statutory basis for vetoing a proposed
sale on human rights grounds for firearms, guns, ammunition, and
related parts that move to the CCL.
BIS response: As described above, BIS disagrees with the assertion
that there
[[Page 4152]]
will be less focus on protecting human rights under the EAR. This final
rule will control these items for Regional Stability and the license
review policy specifies that human rights concerns are considered as
part of the license review process. As referenced above, the Department
of State is a license review agency for Commerce licenses, and the
existing E.O. 12981 and EAR provide that other license review agencies
have 30 days for review of Commerce license applications. E.O. 12981
does not specify what parts of those other agencies must review a
Commerce license application, but the Department of State has
discretion to ensure that DRL receives and reviews Commerce licenses.
This final rule includes a license review policy for regional
stability to indicate license applications will also take into
consideration human rights concerns, which can be a basis for denial.
BIS also notes that there is a presumption of denial policy for license
applications involving narcotics traffickers, criminal organizations,
and terrorists because of their frequent involvement in human rights
abuses, as well as other regional stability concerns.
Crime Control and Detection License Review Policy
The Commerce May 24 rule did not propose changes to the crime
control and detection license review policy in part 742, but commenters
made recommendations in this area that are described and responded to
below.
Comment 62: One commenter recommended that ``in order to bring the
proposed regulations into alignment with provisions of the Foreign
Assistance Act [22 U.S.C. 2304(a)(2), which makes explicit reference to
crime control equipment under the aegis of the (expired) Export
Administration Act], ECCN 0A501.a should be controlled for crime
control.''
One commenter requested that BIS provide the police profession a
greater, better-defined role in the evaluation of firearm export
license applications and possibly form a technical advisory committee
(TAC). Another commenter requested that licensing officials should
consider the effect of proposed exports on local communities, public
safety, peace officer safety, crime control, and control of civil
disturbances to assure that the rule of law is not impaired by firearm
exports.
One commenter asserted that highly destructive weapons should not
be exported to civilians. This commenter recommended ``a maximum limit
on firepower exported to civilians. Firearms with a muzzle energy
higher than 5,000 Joules should be barred from export to non-government
end-users.''
BIS response: BIS notes that the NS 1 and FC 1 license requirement
included in this final rule for ECCN 0A501.a, as well as ECCN 0A501.b,
will ensure U.S. multilateral commitments are met. In addition, the RS
1 license requirement and license review policies is revised in this
final rule to further address the types of human rights concerns, as
well as imposing a presumption of denial license review policies for
certain types of end users of concern, such as narcotics traffickers,
will ensure U.S. export control interests are protected and that
exports are not approved that would otherwise not be consistent with
the Foreign Assistance Act. As was discussed above, the U.S. Government
agency granting aid to a foreign country will also have the ability to
impose certain provisos as part of that foreign assistance agreement,
and all exports made under the FMS programs are authorized by the
Department of State. As warranted, there is nothing that will preclude
BIS from consulting with other agencies of the U.S. Government
regarding a particular license application.
BIS agrees that getting regular input from the police profession
and those with expertise from the private sector will be beneficial but
notes that this can be accomplished through BIS's existing TACs rather
than through the creation of a new TAC. BIS notes that agency rules are
regularly reviewed by BIS's EE as well as other agencies with law
enforcement components.
BIS does not agree that an outright prohibition is needed to
protect U.S. national security and foreign policy interests under the
EAR. Imposing such a worldwide prohibition would be more restrictive
than how these firearms were regulated under the ITAR and would impose
significant burdens on the U.S. firearms industry that may result in
significant U.S. job losses in the firearms and related industries. BIS
appreciates the time and thought that went into the detailed suggested
change, but an outright prohibition was not contemplated in the
Commerce May 24 rule, would arbitrarily single out one industry for
more restrictive control and is not needed to protect U.S. export
control interests, as those interests can be served through the
regulatory regime set forth in the EAR.
License Exception TMP
Comment 63: One commenter requested increasing the number of items
allowed for temporary export under Sec. 740.9(a)(5) to 100 per
shipment to more closely align with commercial expectations and
practices. Another commenter asserted that larger film productions such
as war movies, will oftentimes require well beyond 75 firearms.
BIS response: BIS does not agree with expanding Sec. 740.9(a)(5)
of TMP to allow for 100 firearms per shipment or to address a
particular type of export. The exhibition and demonstration
authorization under paragraph (a)(5) of License Exception TMP is
intended to provide for a sufficient quantity of firearms, and if an
exporter needs a larger quantity, e.g., 100 or even 1,000 firearms for
exhibition or demonstration, that the exporter may apply for a license
to authorize the export. BIS maintains the status quo for how large
temporary shipments of firearms are handled under the ITAR, which is
through a licensing process that allows BIS to include any additional
conditions to ensure the export will not be diverted.
Comment 64: BIS received comments requesting modifications to
License Exception TMP, including to allow for the use of License
Exception TMP (Sec. 740.9) under paragraph (a)(10) to transfer
firearms to affiliates, such as a foreign parent or subsidiary; to
allow TMP paragraph (b)(1) to be used to authorize temporary import and
subsequent export of items moving in transit through the United States;
and to allow for temporary importation for a period of one year. BIS
also received a comment requesting extensions of temporary imports
imported under paragraph (b)(5) to not be more restrictive than the
ITAR.
BIS response: BIS does not accept these changes. Under this final
rule, an exporter may apply for a license to authorize these same types
of exports of firearms to affiliates. In addition, BIS notes that
License Exception STA is available for parts and components, e.g.,
those that this rule will control under ECCN 0A501.x, when the export,
reexport, or transfer (in-country) is to a Country Group A:5 country,
including affiliates. License Exception STA is more restrictive than
paragraph (a)(10) of License Exception TMP, but because of the
sensitivity of the items involved it is not appropriate to allow for
the paragraph (a)(10) authorization to be available. As for firearms
transshipped through the United States, Sec. 740.9 (b)(3), (4), and
(5) will be available to authorize the export and will be sufficient to
address concerns about such authorizations.
BIS does not accept the suggested change to the time limitation in
Sec. 740.9(b)(5) to lengthen it from one year (as included in the
Commerce May 24
[[Page 4153]]
rule) to four years because one year will be sufficient for these types
of temporary end uses in the U.S. For the same reason, BIS also does
not accept the suggestion to allow for extensions of temporary imports
made under paragraph (b)(5) as suggested by one commenter.
Comment 65: One commenter noted that the proposed additions to
Sec. 740.9 included an instruction directing temporary importers and
exporters to contact CBP at the port of temporary import or export, or
at the CBP website, for the proper procedures to provide any data or
documentation required by BIS. The commenter suggested that BIS and CBP
coordinate to create standardized instructions for all ports that can
be made available online, so that each shipment does not have to be
specially coordinated.
BIS response: BIS agrees and will take steps, in coordination with
CBP, to create standardized instructions for all ports that can be
posted online prior to the effective date of this final rule.
Comment 66: One trade association commenter asserted that ``new
paragraph (b)(5) in License Exception TMP and the related provisions in
Sec. 758.10 that detail the process for temporary import and
subsequent export of these items is fair and reasonable.'' This
commenter asserted ``it is common practice to cite the regulatory
exception for the temporarily imported commodities at the time of
import, then reference the import documents at time of return export of
the goods'' and does not believe the process in the Commerce May 24
rule will cause any additional burden to exporters.
BIS response: BIS agrees and adopts these provisions in this final
rule as proposed.
Comment 67: One commenter requests License Exception TMP be
expanded beyond paragraphs (a)(5) and (6) to also allow for use in film
production for subsequent permanent return to the United States.
Alternatively, one commenter requests that BIS should consider a
procedure or license, similar to a DSP-73, to allow for the temporary
export and re-importation of firearms. Another commenter asserted that
BIS should provide additional guidance on the return of temporary
exports under the new paragraph (b)(5) under License Exception TMP.
BIS response: BIS confirms that License Exception TMP under
paragraphs (a)(5) and (6) will not be available in that type of a fact
pattern, but a Commerce license could be applied for to authorize these
types of exports. As noted above, Commerce licenses are flexible enough
to authorize temporary exports that are not otherwise eligible for
License Exception TMP. The importation into the United States after
temporary export will not require a separate EAR authorization. BIS
agrees providing guidance for the import of items temporarily exported
will be helpful and clarifies that the import of items temporarily
exported does not require an EAR authorization for import.
License Exception GOV
Comment 68: One commenter asserted that the phrase ``or other
sensitive end-users'' is unclear and recommended deleting the phrase or
enumerating the specific types of ineligible entities.
BIS response: BIS includes a parenthetical phrase in the final rule
under the new Note 2 to paragraph (b)(2) to include illustrative
examples of other sensitive end-users. This final rule adds the
parenthetical phrase ``(e.g., contractors or other governmental parties
performing functions on behalf of military, police, or intelligence
entities)'' after the phrase ``or other sensitive end-users'' to
provide greater clarity on the other end-users that are excluded.
License Exception BAG
Comment 69: Several commenters expressed opposition to the
requirement for individuals to have to file in AES for personally owned
firearms and ammunition exported under License Exception BAG, that was
included in the Commerce May 24 rule. The commenters expressed concerns
that requiring individuals to file in AES is problematic and unduly
burdensome; that there is not a genuine need for this information and
would violate the spirit of congressional prohibitions against Federal
firearm registries; and that Department of State and CBP already tried
requiring AES filing for individuals under the ITAR and it was not
workable. Commenters identified a number of issues with the AES filing
system for individuals, including the cost to create accounts, the
compatibility of the hardware and software, concerns that IRS and
Census requirements are in conflict, and the mismatch of required
information for individuals with the fields that are currently in AES
that are oriented to commercial exports.
For these reasons described above, several commenters requested use
of CBP Form 4457 as the permanent solution. Some commenters asserted
that CBP Form 4457 serves an important purpose for some foreign
governments, but could be improved by harmonizing CBP procedures for
Form 4457 between different CBP offices to ensure the forms are being
issued consistently. Some commenters asserted that they would support a
simplified system that would be based on U.S. passports, possibly
linked to an electronic version of the CBP Form 4457.
BIS response: BIS was aware of these types of concerns, including
the recent history of this issue under the ITAR. The Commerce May 24
rule stated that whether and how BIS includes this requirement in a
final rule would be based on whether CBP is able to update its
processes, and other agencies as needed, to allow for individuals to
easily file EEI in AES by the time a final rule is published. The
Commerce May 24 rule also noted that if CBP is not able to do so, then
the final rule may direct exporters to continue to use CBP's existing
process, which is the use of the CBP Form 4457, until a workable
solution is developed or CBP suggests an alternative simplified
solution for gathering such information for temporary exports of
personally-owned firearms and ammunition.
At this time, BIS notes that CBP and the U.S. Census Bureau have
not made changes to the AES system on the Automated Commercial
Environment (ACE) that would address the concerns expressed. Therefore,
taking that into account and the comments received on the Commerce May
24 rule, this final rule does not adopt the requirement for individuals
exporting their personally owned firearms and ammunition under License
Exception BAG to file in AES. Instead, this final rule incorporates the
requirement for individuals to file the CBP Form 4457. BIS notes that
if CBP and the U.S. Census Bureau later adopt changes that would
address the underlying issues, or if CBP adopts changes to the process
for submitting the CBP Form 4457, then BIS would make conforming
changes to the EAR.
Comment 70: BIS also received comments expressing concern over the
availability of License Exception BAG for firearms. One commenter
requested that the provision authorizing license-free exports of semi-
automatic rifles by citizens and legal permanent residents should be
removed, because a sufficient justification was not provided in the
Commerce May 24 rule. Another commenter asserted that if a firearm is
stolen or lost that is exported under License Exception BAG, there will
be little that can be done to recover the weapon. The commenter also
asserted it will be easier for smugglers to take advantage of License
Exception BAG to facilitate trafficking. One commenter
[[Page 4154]]
expressed concern that foreigners temporarily in U.S. will abuse
License Exception BAG. One commenter asserted that the May 24 rule
would not stop non-resident aliens leaving the United States via
commercial airlines from taking firearms ``accessories,''
``attachments,'' ``components,'' ``parts,'' and ammunition with them.
BIS response: BIS acknowledges these concerns but disagrees that
additional changes to this final rule are warranted. The availability
of License Exception BAG will be made to be consistent with 22 CFR
123.17(c), which authorizes U.S. persons to take up to three non-
automatic firearms and up to 1,000 cartridges therefor abroad for
personal use. As far as the potential for items to be lost or stolen,
License Exception BAG requires the exporter to maintain control of
their personal belongings and to return with those items unless
destroyed overseas and the requirements are more straightforward than a
commercial transaction in which there are multiple parties. BIS notes
that related to loss or theft the concern applies equally if a firearm
was exported under a Commerce license. Further, the U.S. Government
maintains oversight through the requirement in this final rule for the
CBP Form 4457 to be filed, along with the export requirements to
present the firearm to CBP prior to export under License Exception BAG.
In addition, this final rule requires the serial number, make, model,
and caliber of the firearm to be included on the CBP Form 4457. When
the U.S. citizen or permanent resident alien returns, the U.S.
Government expects and requires that the same firearm to be returned as
included on the CBP Form 4457. Failure to comply with these
requirements could subject a U.S. citizen or permanent resident alien
to administrative and/or criminal penalties depending on the specifics
of the potential violation. BIS notes that License Exception BAG for
non-resident aliens will be limited to allowing nonresident aliens
leaving the United States to take firearms, and ammunition controlled
by ECCN 0A501 or 0A505 that they lawfully brought into the United
States, under the provisions of Department of Justice regulations at 27
CFR part 478. This is an important safeguard to ensure that the items
being exported under License Exception BAG are limited to those that
were lawfully brought into the U.S. The availability of License
Exception BAG for these non-resident aliens will also be consistent
with 22 CFR 123.17(d), which authorizes foreign persons leaving the
United States to take firearms and ammunition controlled under Category
I(a) of the USML (both non-automatic and semi-automatic) that they
lawfully brought into the United States. The export of ``accessories,''
``attachments,'' ``components,'' and ``parts'' is not eligible for
License Exception BAG and would require a separate U.S. Government
authorization.
Comment 71: One commenter noted that Sec. 740.14(c)(1) ``Limits on
eligibility'' currently states that the items must be ``owned by'' the
individuals rather than ITAR Sec. 123.17(c)(3)'s focus on the person's
``exclusive use'' and recommended conforming the EAR with the ITAR's
scope.
BIS response: BIS does not agree. The requirements in Sec.
740.14(c)(1) apply to all items that subject to the EAR that are
eligible, so these requirements are intended to be broader than the
exclusive use limitation in paragraph (e) (Special provisions for
firearms and ammunition).
Reporting Requirements
Comment 72: BIS received a number of comments related to reporting
requirements. One commenter asserted that it appears that requiring
conventional arms reporting for firearms to be controlled under ECCN
0A501.a and .b would add welcomed specificity to reports required by
the United Nations and the Wassenaar Arrangement while another
commenter was concerned that firearms are being singled out for
conventional arms reporting. One commenter asserted that exporters
should not have to submit reports under the conventional arms reporting
for the Wassenaar Arrangement and the United Nations because BIS
already has ways to obtain this information from other U.S. Government
sources.
BIS response: BIS agrees that the conventional arms reporting
requirements will improve transparency and meet U.S. Government
multilateral commitments to the Wassenaar Arrangement and the United
Nations. BIS notes that other USML Categories that were revised that
moved items to the CCL under ``600 series'' and 9x515 ECCNs were not
identified under the Wassenaar Arrangement or United Nations List for
requiring reporting for conventional arms. Some of the USML Category I
items being moved to the CCL are identified under the Wassenaar
Arrangement or United Nations List for requiring conventional arms
reporting and thus were included to meet U.S. Government commitments.
To ease reporting requirements on exporters as suggested by one
commenter and provide greater flexibility for industry, BIS clarifies
that for the reporting required in this final rule can be accomplished
in one of two ways. First, the exporter can follow the process outlined
in part 743 by sending in reports to BIS with the required information.
However, because of the EEI filing requirements in Sec.
758.1(g)(4)(ii) for the firearms that require conventional arms
reporting, all conventional arms reporting requirements for firearms
should be able to be met by using the alternative submission method
described below in the regulatory changes. Under the alternative
method, the U.S. Government will rely on the EEI record in AES for
firearms classified under 0A501.a and 0A501.b, by the exporter being
required to always include as the first text in the Commodity
Description field in AES the first six characters of the ECCN number,
i.e., ``0A501.a'' or ``0A501.b.''
Comment 73: One commenter raised questions whether the requirements
of the Paperwork Reduction Act (PRA) were met for imposing a new
requirement and whether this information would be needed by BIS.
BIS response: BIS had created this reporting requirement in the
April 16, 2013, initial implementation rule, including providing
estimates for the anticipated burden at that time in anticipation of
the full completion of the USML to CCL review process and these end
item firearms being moved to the CCL. BIS makes this clearer in this
final rule, as well as describing the alternative method that will
eliminate the need for any type of additional reporting and instead use
the data that will be reported in the EEI filing in AES.
Comment 74: One commenter asserted that BIS reporting provides even
less data than the Department of State 665 report and requested that
BIS improve its reporting.
BIS response: In the past, BIS has provided similar data that is
included in the Department of State 655 report in the BIS annual
foreign policy report and in reports on the BIS website detailing
exports by country and largest quantity of ECCNs being exported to the
respective countries. Going forward under ECRA, BIS will be required to
submit an annual report to Congress that will include the information
specified in Section 1765 of ECRA, including implementation of end-use
monitoring of military items on the EAR. BIS notes because this final
rule will require EEI filing in AES for the firearms moved to the CCL
and CBP Form 4457 for License Exception BAG, BIS will have data
[[Page 4155]]
available on exports of firearms moved from USML Category I to the CCL.
Serial Numbers, Make, Model, and Caliber in AES (Sec. 758.1(g)(4))
Comment 75: Several commenters asserted they were opposed to the
expanded data elements (i.e., serial numbers, make, model, and caliber)
required as part of the EEI filing to AES for firearms that would be
transferred from the USML to the CCL, suggesting that the expanded data
elements would exacerbate the problems for private travelers forced to
use the system and violate the spirit of congressional prohibitions
against Federal firearm registries. BIS also received comments
asserting that filing in AES poses an undue burden on exporters to file
information that is otherwise available to U.S. Government, such as
through the Gun Control Act and ATF regulations, and that it may
violate the PRA because the burden is redundant. Another commenter
asserted that because of AES character limitations it may be difficult
or impossible to include the serial number, make, model, and caliber
information. In addition, one commenter asserted that the manufacturer,
model number, and caliber does not assist law enforcement verify the
export because the Foreign Trade Regulations (FTR) and EAR already
require that the item description entered in the EEI filing in AES
conform to that shown on the license. One commenter asserted it
generally supports strong oversight measures for arms transfers and
from that perspective, it welcomes detailed digital record-keeping
requirements. Another commenter recommended using the term ``model'' or
``model designation'' rather than ``model number,'' consistent with ATF
regulations.
BIS response: BIS has included filing requirements only when
necessary to ensure that export control concerns will be protected,
including export enforcement and transparency concerns. As noted above,
BIS in this final rule addresses the concerns about exports under
License Exception BAG by not requiring an EEI filing in AES for such
exports, though CBP Form 4457 will require information on the serial
numbers, make, model, and caliber for the firearms being exported. This
much more focused requirement will also be responsive to assertions
that the information proposed to be collected was an undue paperwork
burden on exporters.
While other Federal regulations may require similar information,
BIS would not have the legal authority to subpoena or otherwise request
the same information unless the records are required to be kept under
the EAR. If different regulations require the same information, then
there should be no additional burden on exporters or other relevant
parties for maintaining this information to meet their various
regulatory requirements. Typically, the EAR is flexible in how specific
records are maintained since it regulates a variety of industries with
different norms.
For items that are exported under a U.S. Government authorization
for temporary export, it is still warranted to require that information
to be filed as EEI in AES. This final rule adopts a revised requirement
in Sec. 758.1(g)(4) to limit it to temporary exports from the United
States or when the license or other approval contains a condition
requiring all or some of this information to be filed as EEI in AES.
This final rule clarifies that a temporary export for purposes of Sec.
758.1(g)(4) is any export whereby the EAR authorization requires
subsequent return to the United States (e.g., License Exception TMP or
a license authorizing a temporary export). BIS notes that this revised
approach scales back the reporting requirement significantly, focuses
it on exports of the primary concern for ensuring the U.S. Government
can confirm what was temporarily exported is what will be returned, and
importantly still retains the ability of BIS to impose this condition
when warranted on a case-by-case for any particular license where BIS
and the other license review agencies believe requiring the filing of
this information as EEI in AES is warranted. BIS is aware that the
Department of State sometimes includes such a requirement as a proviso
on some of its licenses or approvals for firearms, so the requirement
that is included in this final rule that retains the ability of BIS to
impose such a condition on Commerce licenses is consistent with
licensing practices under the ITAR.
BIS has confirmed with CBP and the U.S. Census Bureau that AES on
the ACE platform can accommodate EEI filers to submit the serial
number, make, model, and caliber information. Under the current ITAR
licensing practices, sometimes provisos are included on a State license
or other approval that requires this information to be entered as EEI
in AES, and BIS is not aware of the current system not permitting the
proper filing of this information as EEI in AES.
BIS generally supports strong oversight. It also accepts the
recommendation to adopt the term ``model'' instead of the proposed
``model number.''
Comment 76: Two commenters asserted that the only place where the
reporting requirement of serial numbers, make, model, and caliber may
be warranted was for License Exception TMP. One of these commenters
noted that ``such a requirement of mandatory serial number reporting in
AES might make sense only for temporary exports and imports under TMP
in particular, to allow re-import procedures to be followed and
verified.'' However, the requirements proposed in new Sec. Sec.
758.10(b)(1)(ii) and 740.9(b)(5)(iv)(B) already cover this by requiring
serial numbers as part of a complete list to be submitted to CBP at the
time of import and/or export.
BIS response: BIS clarifies that the reference in License Exception
TMP in new Sec. Sec. 758.10(b)(1)(ii) and 740.9(b)(5)(iv)(B) are for
information to be provided at the time of temporary import and export
of firearms temporarily in the United States. The proposed requirements
in Sec. 758.10(b)(1)(ii) in the phrase ``or other appropriate import
documentation (or electronic equivalents)'' and the reference to ``or
electronic equivalents'' was referring to the possibility that such
information could be provided to CBP in person or electronically by
using the ACE portal at the time of temporary import and subsequent
export, so BIS does not see an inconsistency with the proposed
requirement and therefore will include the requirement in this final
rule as originally proposed. BIS agrees with the commenter's assertion
that for firearms temporarily exported under License Exception TMP
under paragraph (a)(6), there is a possibility that in certain cases
the returned firearm may not be the same. This final rule includes a
Note 3 to paragraph (g)(4) in Sec. 758.1 to provide guidance on that
issue.
Entry Clearance Requirements for Temporary Imports
Comment 77: BIS received comments asserting that foreign visitors
exporting personal firearms after temporary import should not have to
file in AES for many of the same reasons why filing in AES for exports
authorized under License Exception BAG is not appropriate. Another
commenter asserted that such AES declaration requirement would
discourage foreign participants from coming to the U.S. for hunting and
competitive shooting.
BIS response: BIS does not agree with these assertions. As noted
above, one of the permissible identifiers in filing in AES is a foreign
passport, so the most substantive concern for individuals filing in AES
does not apply for these
[[Page 4156]]
filings. In addition, those using License Exception TMP will generally
be companies, so the concerns expressed about AES being more oriented
to companies compared to individuals also does not apply. For these
reasons, BIS in this final rule publishes the changes as proposed. In
addition, as noted above, each country, including the United States,
imposes requirements that it believes are warranted to regulate the
importation and use of firearms in its country. U.S. hunters and
competitive shooters that travel overseas and foreign hunters and
competitive shooters who come to the United States understand that
firearms are regulated.
Comment 78: One commenter asserted that the ATF Form 6NIA can
confirm that the individual is returning with the same firearm that was
brought to the U.S., so there is no need to require EEI filing in AES.
BIS response: BIS does not accept this change. To properly
administer and enforce export controls, BIS must have access to basic
information about an item and cannot solely rely on information
collected by another agency, though this information, as appropriate,
could supplement information collected by BIS.
Comment 79: One commenter asserted that the ITAR does not have the
same type of EEI filing in AES requirement, so including this under the
EAR would be more restrictive.
BIS response: BIS clarifies here that under the ITAR, the
Department of State is licensing the temporary import and export, which
required much of the same information requirements. The Commerce May 24
rule did not change the basic construct for how the EAR regulates
imports, but BIS needed a means to track firearms temporarily entering
the U.S. for subsequent export.
Comment 80: One commenter requested text be added to Sec.
758.10(a)(2) to exempt from the entry clearance requirements temporary
imports by nonresident aliens who temporarily import firearms under the
provisions of 27 CFR 478.115(d).
BIS response: BIS clarifies here the purpose of Sec. 758.10.
Because a nonresident alien, e.g., a foreign hunter, will need an
approved Form 6NIA (ATF Form 5330.3D Application/Permit for Temporary
Importation of Firearms and Ammunition by Nonimmigrant Aliens) from ATF
prior to bringing the USMIL firearm or ammunition into the U.S., the
ATF controls will account for the temporary import. Therefore, License
Exception BAG does not need to be referenced in Sec. 758.10. The
subsequent export out of the U.S. will require an EAR authorization and
would need to be done in accordance with License Exception BAG, or some
other U.S. Government authorization if License Exception BAG was not
available.
Comment 81: One commenter asserted that the new Sec. 758.10
``Entry clearance requirements for temporary imports'' appears to apply
to all temporary imports at the time of temporary import. This
commenter asserted that as the requirements of Sec. 758.10 should not
apply to nonresident aliens temporarily importing firearms under the
separate provisions of the ATF, and recommended clarifying this in the
final rule.
BIS response: BIS agrees. This final rule clarifies that the
requirements of Sec. 758.10 do not apply to temporary imports for
nonimmigrant aliens under the provisions of the Gun Control Act of 1968
and administered in part with the ATF Form 6NIA.
Comment 82: One commenter was concerned that the new Sec. 758.10
``Entry clearance requirements for temporary imports'' does not address
the potential use of License Exception RPL. Specifically, proposed
Sec. 758.10(b)(1)(i) requires a statement to CBP certifying ``. . .
This shipment will be exported in accordance with and under the
authority of License Exception TMP,'' which would be a false
certification if RPL were being used.
BIS response: BIS agrees and accepts adding License Exception RPL
as a valid purpose for a temporary import under Sec. 758.10. For the
same reason, this final rule adds BIS licenses as a valid purpose for a
temporary import under Sec. 758.10. In addition, this final rule
clarifies that a temporary import for repair or servicing in the United
States does not require an EAR authorization, but the subsequent export
must be authorized either as eligible for License Exception RPL or
authorized under a BIS license at the time of entry. For example, a BIS
license would be required at the time of entry if the repair or
servicing of a temporarily imported firearm would result in enhanced
capability of the item because License Exception RPL is not available
for such enhancements. Instead, under this final rule, the exporter
could obtain a BIS license to authorize such an export that was brought
into the United States as a temporary import. Section 758.10(a)(1)
addresses these types of imports for repair and servicing. For
additional information, please see section Entry clearance requirements
for temporary imports (Sec. 758.10) below that details the
requirements for use of these authorizations.
Relationship Between EAR and ATF Regulations
Comment 83: One commenter requested the ATF Ruling 2004-2 be
amended to account for this USML to CCL transition, in order to not be
more restrictive under the EAR compared to the ITAR. The commenter
asserted that the ITAR draws a clear distinction between permanent and
temporary import jurisdiction in 22 CFR 120.18, although certain items
regulated under the Gun Control Act or National Firearms Act, if
authorized for import under those laws, continue to require
transactional import approval from ATF for temporary imports unless ATF
Ruling 2004-2 (April 7, 2004) permits the DSP-61 or ITAR exemption to
substitute for this approval.
BIS response: The changes included in the Commerce May 24 rule
under Sec. Sec. 740.9 and 758.10 were intended to address issues
related to temporary importation under the EAR. As noted above, this
final rule adds License Exception RPL and BIS licenses to Sec. 758.10
to further address issues related to temporary imports under the EAR.
Other agencies will review, and if necessary, address, any effects of
these final rules.
Comment 84: One commenter recommended coordinating proposed changes
with ATF so that the corresponding changes are made to the USMIL at the
same time, which would prevent businesses from having to consult both
the USML and USMIL when deciding whether a transaction involves
brokering.
BIS response: The USML and the USMIL are separate lists of AECA
defense articles with both shared as well as different AECA objectives,
and as such warrant the retention as separate lists.
Comment 85: One commenter was concerned that removing license
requirements for temporary imports of the items removed from the USML
would create another channel for criminal elements to obtain weapons in
the U.S.
BIS response: BIS disagrees. Temporary imports will be addressed by
BIS, and the same type of U.S. Government authorization requirement
will apply for exports of items temporarily imported as other exports
under the EAR.
Comment 86: One commenter was concerned that the Commerce May 24
rule did not provide a mechanism, such as a DSP-73, for certain
firearms to be temporarily exported and subsequently returned to the
U.S., given the firearm importation prohibitions under 18
[[Page 4157]]
U.S.C. 922(l) and 925(d)(3). This commenter asserted that unlike many
other items that have transitioned from the USML to the CCL, firearms
are subject to unique restrictions on the permanent import side under
the jurisdiction of the ATF. This commenter asserted that the
Department of State's jurisdiction over temporary exports and temporary
imports has played an important role by providing companies with a
viable method of bringing their guns back into the U.S. without running
afoul of ATF's strict importation prohibitions and similar treatment
should be retained under the EAR.
BIS response: BIS clarifies that BIS will require a U.S. Government
authorization for temporary exports. The EAR authorizations most likely
to be used to authorize temporary exports include License Exceptions
BAG and TMP, as well as Commerce licenses. Therefore, BIS does have
similar authorization requirements and approval mechanisms as under the
ITAR. BIS notes that the import back into the U.S. will not require an
EAR authorization.
Comment 87: One commenter asserted that a DSP-73 license is vital
because it covers both the U.S. export and U.S. import requirements and
the commenter is concerned without adding a similar type of
authorization under the EAR that certain temporary exports for use in
filming will not be possible because the return of the exported
firearms would be subject to ATF's permanent import process which
restricts many types of firearms pursuant to Federal law, e.g., short
barreled shotguns. This commenter asserted that because most firearms
temporarily exported for the movie industry are either military
surplus, non-sporting, or National Firearms Act weapons, of which
importation is prohibited under the ATF regulations, that this is an
importation issue to be addressed to ensure these types of temporary
exports can still proceed under the EAR and ATF construct, similar to
the ITAR and ATF construct.
BIS response: A Commerce license to authorize a temporary export
would authorize the temporary export and require the item's return. A
separate EAR authorization is not required for the import back into the
United States after the temporary export since this would be covered
under the scope of the authorizing export license.
Comment 88: One commenter requested clarification for permanent
import after temporary export for repair or servicing under License
Exception TMP under paragraph (a)(6). This commenter asserted it agreed
with the proposed changes but requested that the subject of temporary
export of firearms, specifically vintage shotguns with barrel lengths
over 18 to Canada, be clearly addressed.
BIS response: BIS notes that the long barrel shotguns this final
rule will move from ECCN 0A984 to 0A502 may require a U.S. Government
authorization depending on the specifics of the export, in particular
the destination for the export. Regardless of the EAR authorization
used to authorize the export, a separate EAR authorization will not be
required for the subsequent import into the United States.
Comment 89: One commenter asserted that ATF 27 CFR 478.92 includes
a requirement to mark firearms being imported with the importer's name
and address. This commenter was concerned that this destroys the
originality and affects the value of the firearm that was temporarily
exported. This commenter asserts because these long barreled shotguns
fall under the EAR, the ATF will not clarify the requirement on
shotguns and it creates confusion. This commenter requests the final
rule to clarify this issue regarding markings for shotguns being moved
from ECCN 0A984 to ECCN 0A502, as well as for the other firearms being
moved from the USML to the CCL.
BIS response: BIS clarifies here that the EAR does not require any
types of physical markings to be made on a firearm or any other
commodity being temporarily exported for repair or servicing for return
to the United States. For a licensed transaction in an exceptional
case, a condition could potentially be placed on a Commerce license
that required the exporter to make some type of physical marking on the
commodity, but this would be extremely rare under BIS licensing. If
additional safeguards were needed, BIS licenses would typically require
additional documentation to confirm delivery verification or to require
the exporter to get other written affirmations from the other parties
to the transaction.
EAR Recordkeeping Requirements
Comment 90: One commenter asserted that the GCA requires all
Federal Firearm Licensees to maintain firearm records for 20 years
after the date of disposition and that the proposed change requiring
records under the EAR is redundant and may cause confusion because of
the different record retention periods. This commenter asserted in
complying with the EAR, companies may inadvertently violate the GCA.
BIS response: BIS does not agree. The EAR does not require records
to be destroyed after five years, just that the records be kept for at
least that long. Nothing in the EAR prohibits maintaining the records
for longer periods.
Comment 91: One commenter asserted that the recordkeeping
requirement for warranty certificates for people outside the U.S. would
be more restrictive than the ITAR. The commenter asserted that BIS has
not provided a coherent explanation for why the new recordkeeping
burden makes sense, is related to exports, or would be of benefit to
the enforcement of the export control laws.
BIS response: BIS does not agree with the requested change to
remove the warranty certificate requirement as a recordkeeping
requirement. As noted above by many commenters, BIS has an interest in
ensuring the firearms and related items on the CCL are used by the
intended end user for the intended end use, and BIS needs any
information that may be relevant to the ultimate disposition of those
firearms to safeguard U.S. national security. The recordkeeping
requirements for the warranty certificates included in the Commerce May
24 rule and in this final rule will be an additional safeguard for EE
to have further insights into where a firearm exported under a U.S.
Government authorization may have ultimately ended up after export. A
warranty certificate that is submitted by a person located outside the
United States to a U.S. exporter is relevant to the U.S. Government for
export control enforcement purposes. The ITAR and EAR control
structures are not the same, so in certain cases a restriction may be
more restrictive under the EAR compared to the ITAR and this is an
example of where the EAR will be more restrictive, but it is still
warranted in the context of the EAR.
Comment 92: One commenter asserted that warranties are issued by
the manufacturer, not the exporter and that many manufacturers do not
always issue specific ``warranty certificates'' to individuals. This
commenter asserted that most manufacturers provide warranty statements
in a broad boilerplate statement included in an instruction manual, or
on their website. This commenter also asserted that there is thus no
way to know when that information is accessed by a foreign person or
sent to an address outside the U.S. One commenter asserted that a
potential issue is with the recordkeeping requirement of warranty
certificates is that an exporter may not have a manufacturer's (or any
other)
[[Page 4158]]
warranty certificate as part of the transaction. This commenter
requested some clarification on the requirements.
BIS response: BIS clarifies here that the EAR recordkeeping
requirements generally do not impose an affirmative duty to create a
record. The recordkeeping requirements typically apply if in the normal
course of your business activities related to an export, reexport, or
transfer (in-country) a record is created or received that is within
the scope of records that must be retained for purposes of the EAR
recordkeeping requirements.
BIS confirms here that if the manufacturer is not the exporter, it
is not required to keep the warranty certificate for purposes of part
762. Section 762.1(b) (Persons subject to the part) identifies the
persons that are required to keep records for purposes of part 762 of
the EAR.
Comment 93: One commenter asserted that there is the possibility
that retaining such information that would be contained in a warranty
certificate may violate the privacy laws of other countries, such as
the General Data Protection Regulation (GDPR) (European Union (EU)).
BIS response: BIS is not in a position to opine on the
applicability of the GDPR here but notes that parties transacting in
items subject to the EAR are subject to U.S. laws and regulations,
including recordkeeping requirements.
Alignment With the Wassenaar Arrangement Munitions List
Comment 94: One commenter asserted that the proposed changes do not
appear to be in line with established WAML I-III, suggesting that the
inclusion of semi-automatic weapons in WAML1 explicitly as munitions
demonstrates an intentional differentiation between military and
security items, on one hand, and dual-use items on the other.
BIS response: On the general question of whether the changes
included in the Commerce May 24 rule align with the WAML, BIS notes
that Wassenaar Arrangement member countries implement the WA control
lists in accordance with their own national export controls. The items
being moved from USML Category II are controlled under four new ``600
series'' ECCNs. The items moved from USML Categories I and III are not
controlled in the ``600 series,'' but importantly are still subject to
the same NS 1 license requirement that would apply if these WAML items
were added to the ``600 series.'' In addition, although not derived
from the Wassenaar Arrangement, the end item firearms are subject to a
license requirement for the Firearms Convention (FC)--meaning that the
end item firearms are subject to an even more restrictive license
requirement under the EAR compared to the ``600 series,'' 9x515 items,
and other items controlled for NS reasons on the CCL. In addition, the
final rule also includes other provisions, such as requiring
conventional arms reporting, that reflects U.S. Government commitments
to the Wassenaar Arrangement and to the United Nations. Thus, the
changes are consistent with the U.S. Government's commitments to the
Wassenaar Arrangement.
Comment 95: One commenter asserted semi-automatic weapons used by
peacekeepers, military, and police are intended to be controlled as
munitions. The proposal to move semi-automatic firearms and large
caliber rifles to ECCN 0A501 on the CCL does not appear to be in line
with this designation.
BIS response: For the reasons noted above in the BIS response to
Comment 1, BIS does not agree. BIS notes that the export of semi-
automatic weapons used by peacekeepers, military, and police will still
require U.S. Government authorization and in most cases will require an
approved license under the EAR, except when destined to the U.S.
Government or it is a semi-automatic weapon that was legally exported
or reexported under U.S. export controls that is being returned after
servicing or repair under License Exception RPL.
Comment 96: One commenter provided several comments related to the
combined ITAR and EAR amendments to U.S. Government commitments to
multilateral controls, that included 33 numbered topics listed in the
order that topic appears in the WAML and then subdivided into three
parts, with the following number of examples: 27 U.S. and multilateral
texts are either identical or substantially equivalent; 74 US controls
omit what WAML controls (or WAML omits U.S. decontrols); and 165 WAML
omits what U.S. controls (or U.S. omits WAML decontrols).
BIS response: BIS notes that this one commenter submitted a large
number of comments regarding the alignment with the WAML. For the
comments where BIS does not believe any changes are needed to align
with the WAML, BIS has not summarized each of those comments in this
final rule because of the length of the comments, but does confirm that
BIS did review each of the comments. For many of these comments, the
items were already controlled prior to the effective date of this final
rule or will be controlled for NS reasons on the CCL on the effective
date of this final rule, and for certain comments the ITAR retains
control of the items that the commenter thought would not be adequately
controlled under the USML. For the alignment with the WAML comments
where the commenter has raised an issue that BIS believes warranted a
change to ensure the changes in the final rule align with the WAML,
those suggested changes, e.g., the revisions described above to ECCN
0A018 and 0A505, are described above in greater detail, along with the
BIS responses.
Delayed Effective Date for a Final Rule
Comment 97: BIS received a number of recommendations on the
appropriate length for the delayed effective date for the final rule,
ranging from 90 to 180 days for delayed effective dates. The rationale
for the shorter length was to allow small businesses to immediately
benefit while those recommending longer or split effective dates
suggested the time period would allow time for updates to IT systems,
policies, and processes. Other commenters asserted that they supported
a split implementation period (180 days for certain provisions,
effective immediately or short as possible for other provisions).
BIS response: BIS has determined that a 45-day delayed effective
date is appropriate. To address concerns that a longer delayed
effective date and transition period may be warranted, BIS highlights
here the importance of the various grandfathering provisions included
in General Order No. 5 in Supplement No. 1 to part 736 of the EAR and
in the previously published State transition guidance, that is
supplemented with information on the DDTC website.
Comment 98: One commenter requested that BIS delay publishing a
final rule until the Government Accounting Office (GAO) or the Library
of Congress has publicly reported to the Congress their impact on
numerous statutes referring to ``defense articles,'' because of the
potential loss of so many U.S. arms export controls and likely negative
impact on curbing irresponsible and illegal arms transfers.
BIS response: BIS welcomes the publication of the GAO report.
However, the timing of the publication of a final rule and its
effective date are not contingent on the publication of the GAO report.
Description of Regulatory Changes
This final rule creates 17 new ECCNs on the CCL to control items
that are being removed from the USML as
[[Page 4159]]
described in a final rule issued concurrently by the Department of
State. BIS did not receive any comments on the proposed addition of
ECCNs 0A503, 0B602, 0D501, 0D505, 0D602, 0E502, 0E504, 0E505, and 0E602
in the Commerce May 24 rule, so this final rule adopts these ECCNs as
proposed, except for one clarification made to ECCN 0B602.a.8 and minor
clarifications to the Related Controls paragraphs to ECCNs 0D501,
0D505, 0D602, 0E502, and 0E505. In ECCN 0B602, this final rule replaces
``gun straightening presses'' with the more specific control parameter
``barrel straightening presses.'' This change is made to clarify that
the straightening presses controlled under ECCN 0B602.a.8 are those for
barrels. In the Related Controls paragraphs for ECCNs 0D501, 0D505,
0D602, and 0E505, this final rule removes the parenthetical phrase that
references 22 CFR 121.1 and the related USML category because this
information is duplicative of existing text in these Related Controls
paragraphs. This final rule also revises the Related Controls paragraph
in ECCN 0E502 by removing ``N/A'' and adding that ``[t]echnical data
required for and directly related to articles enumerated in USML
Category I are `subject to the ITAR.' '' This clarification does not
change the scope of ECCN 0E502 and simply alerts the public to review
the ITAR for such technical data. BIS does not make any additional
changes to proposed ECCN 0E501 and adopts it as proposed. See the
Commerce May 24 rule for additional background on these provisions. BIS
received comments on seven proposed ECCNs for which the agency is
adopting additional changes: 0A501, 0A502, 0A504, 0A505, 0A602, 0B501,
and 0B505. The summary below describes each of these ECCNs and the
controls that apply to them.
New ECCN 0A501: Firearms and Related Commodities
This final rule adds new ECCN 0A501 and applies national security
(NS Column 1), regional stability (RS Column 1), Firearms Convention
(FC Column 1), United Nations (UN), and anti-terrorism (AT Column 1)
reasons for control to the non-automatic and semi-automatic firearms,
including rifles, carbines, revolvers or pistols listed in the ECCN
entry in the regulatory text to this final rule, enumerated parts and
components and to ``specially designed'' ``parts,'' ``components,''
``accessories'' and ``attachments'' for those firearms and ``parts''
and ``components.''
This final rule adds ECCN 0A501.y and only imposes an anti-
terrorism (AT Column 1) and United Nations (UN) reasons for control and
covers such items as scope mounts or accessory rails, iron sights,
sling swivels, butt plates, recoil pads, bayonets, and stocks or grips
that do not contain any fire control ``parts'' or ``components.''
This final rule adds a technical note to ECCN 0A501 stating that
``parts'' and ``components'' include ``parts'' and ``components'' that
are common to firearms described in ECCN 0A501 and to firearms
``subject to the ITAR.''
It also adds another note to ECCN 0A501 to state that certain
firearms and similar items are EAR99. Those items are: Antique firearms
(i.e., those manufactured before 1890) and reproductions thereof,
muzzle loading black powder firearms except those designs based on
centerfire weapons of a post 1937 design, BB guns, pellet rifles, paint
ball, and all other air rifles.
In addition, for purposes of new ECCN 0A501 and the rest of the new
ECCNs described below, items previously determined to be ``subject to
the EAR'' under a commodity jurisdiction determination issued by the
U.S. Department of State that were designated as EAR99 will generally
not be classified in any of the new ECCNs that are being created with
this final rule. As a conforming change, this final rule revises
paragraph (e)(3) of General Order No. 5 to add a reference to the
``0x5zz'' ECCNs this final rule adds to the CCL.
This final rule adopts the following additional changes to ECCN
0A501 to respond to the comments received on the Commerce May 24 rule:
This final rule revises Related Controls paragraph (1) to clarify
that the magazines that are ``subject to the ITAR'' are those with a
capacity ``greater than 50 rounds.'' The Commerce May 24 rule used
terminology in the control parameter that created ambiguity because it
was slightly different than as proposed in the State May 24 rule, so
this final rule revises the EAR text based on the comments received to
align with the terminology used on the ITAR.
This final rule revises ``items'' paragraph (a) to remove the
phrase ``of caliber less than or equal to .50 inches (12.7 mm)'' and
add in its place the phrase ``equal to .50 caliber (12.7 mm) or less.''
In making this change, BIS uses the same control text of ``.50 caliber
(12.7 mm)'' as used in the Department of State companion rule.
This final rule adds a Note 1 to paragraph 0A501.a. This note
clarifies that combination pistols are controlled under items paragraph
.a. The note also defines the term `combination pistol' for purposes of
this ECCN. A combination pistol has at least one rifled barrel and at
least one smoothbore barrel. Because of the hybrid nature of these
firearms, commenters requested that this type of clarifying note be
added.
This final rule adds a Note 2 to 0A501.d to address a question,
raised by the commenters, whether magazines with a capacity of 16
rounds or less are controlled under 0A501.x or designated EAR99. The
new note specifies that magazines with a capacity of 16 rounds or less
are controlled under 0A501.x. BIS notes this was the intent of the
Commerce May 24 rule, but because commenters were not sure, this rule
specifies where these magazines are controlled.
This final rule revises ``items'' paragraph (e) to add the phrase
``or machined items'' to specify that ECCN 0A501.e includes those
machined items even if they are not casted, forged, or stamped.
This final rule revises the introductory text of 0A501.y to add the
phrase ``as follows, and ``parts,'' ``components,'' ``accessories,''
and ``attachments'' ``specially designed'' therefor'' to clarify,
consistent with the other .y paragraphs on the CCL, that the
``specially designed'' ``parts,'' ``components,'' ``accessories,'' and
``attachments'' for .y items will also be controlled under this .y
paragraph and not controlled under 0A501.x.
This final rule adds a new paragraph y.7 to control firearms
manufactured from 1890 to 1898 and reproductions thereof. This final
rule makes this change to address commenters that asserted that the
year 1890 should be changed to 1898 in Note 3 to 0A501 for defining
antique firearms. BIS did not accept the change because the year 1890
is based on the Wassenaar Arrangement, but does address this concern by
controlling these firearms under a new .y paragraph. As a conforming
change, this final rule adds a new License Requirement Note to ECCN
0A501 to specify that a license is required for exports and reexports
to China of 0A501.y.7 firearms.
This final rule adds a new Note 4 to 0A501, to clarify the
classification of certain muzzle loading (black powder) firearms. This
is a conforming change as part of the removal of the control text of
ECCN 0A018 in this final rule.
New ECCN 0A502: Shotguns and Certain Related Commodities
This final rule adds new ECCN 0A502 to control both the shotguns
being moved from the USML that are being added to the CCL (barrel
length less than 18 inches) and the shotguns and the enumerated
``parts'' and
[[Page 4160]]
``components'' controlled in ECCN 0A984 (barrel length 18 inches or
greater) prior to this final rule. This final rule controls shotguns
with a barrel length less than 18 inches under NS Column 1, CC Column
1, FC, UN, and AT Column 1 plus regional stability (RS Column 1).
Shotguns controlled in ECCN 0A984 that are transferred to ECCN 0A502 by
this final rule will retain Firearms Convention (FC), crime control (CC
Column 1, 2, or 3 depending on barrel length and end user), and United
Nations (UN) reasons for control. Such shotguns will not be controlled
for national security reasons because they are not on the WAML.
This final rule adopts the following additional changes to ECCN
0A502 to respond to the comments received on the Commerce May 24 rule:
This final rule revises the heading of ECCN 0A502 to add the phrase
``shotguns ``parts'' and ``components,'' consisting of'' to clarify
that the parts and components controlled under 0A502 are for shotguns
in response to one commenter's request.
This final rule revises the LVS paragraph in the License Exception
section to add License Exception LVS eligibility of $500 for certain
parts and components under ECCN 0A502. The Commerce May 24 rule
proposed N/A for LVS for ECCN 0A502. This final rule makes this change
to create equivalent treatment for License Exception LVS for purposes
of ECCNs 0A501 and 0A502. Similar to LVS eligibility in ECCN 0A501, the
LVS eligibility will include all Country Group B countries and an
additional paragraph that identifies other parts and components that
are eligible for LVS if the ultimate destination is Canada.
This final rule revises the Related Controls paragraph to remove
the phrase ``combat shotguns and'' because it is not needed as a
modifier of fully automatic shotguns and the phrase is not used on the
USML. This final rule also simplifies the Related Controls paragraph to
use a single sentence to identify shotguns that are fully automatic as
``subject to the ITAR.''
This final rule adds a Note 1 to 0A502 to clarify that shotguns
made in or before 1898 are considered antique shotguns. This note
clarifies that these antique shotguns are designated as EAR99.
Lastly, in ECCN 0A502, this final rule adds a Technical Note to
specify the classification of shot pistols or shotguns that have had
the shoulder stock removed and a pistol grip attached. The technical
note specifies these are controlled by ECCN 0A502. The technical note
also specifies that slug guns are controlled under ECCN 0A502.
New ECCN 0A504: Optical Sighting Devices and Certain Related
Commodities
This final rule adds new ECCN 0A504 to replace ECCN 0A987, which
controlled optical sighting devices for firearms. This final rule
revises the reasons for control table to state specifically that the
Firearms Convention (FC) reason for control applies to all paragraphs
in the ECCN except 0A504.f, which controls laser pointing devices. In
addition, BIS adds an RS control for certain riflescopes, which are
identified in their own paragraph in the ECCN under 0A504.i in this
final rule. The riflescopes in this paragraph are limited to those
``specially designed'' for use in firearms that are ``subject to the
ITAR.'' This final rule includes an exclusion in the criteria of this
paragraph to ensure less sensitive riflescopes that are being moved
from ECCN 0A987 to 0A504 on the effective date of this final rule, that
currently are not RS controlled under the EAR, will not be controlled
under this paragraph. This final rule also adds a note to this
paragraph (i) to specify that paragraph (a)(1) of the definition of
``specially designed'' in Sec. 772.1 of the EAR is what is used to
determine whether a riflescope is ``specially designed'' for purposes
of this paragraph of ECCN 0A504.i--meaning paragraph (a)(2) and the
paragraph (b) releases are not reviewed to make the ``specially
designed'' determination.
This change makes clear, consistent with BIS's existing
interpretation, that such devices are not optical sights and are not
subject to the FC reason for control. The new number is intended to
make identifying items on the CCL easier by grouping similar or related
items closer to each other.
This final rule adopts the following additional changes to ECCN
0A504 to respond to the comments received on the Commerce May 24 rule:
This final rule revises the LVS paragraph in the License Exceptions
section of ECCN 0A504 to add LVS eligibility of $500 for 0A504.g.
Commenters requested that LVS eligibility be added for these less
sensitive lenses and other optical elements controlled under 0A504.g.
These commenters also requested adding LVS eligibility for consistency
with the types of parts and components eligible for LVS under ECCN
0A501 in the Commerce May 24 rule. BIS agrees and adds LVS eligibility
of $500 for 0A504.g in this final rule.
New ECCN 0A505: Ammunition and Certain Related Commodities
This final rule adds new ECCN 0A505 and imposes national security
(NS Column 1), regional stability (RS Column 1), Firearms Convention
(FC), United Nations (UN), and anti-terrorism (AT Column 1) controls on
ammunition not enumerated on the USML, for firearms that will be
classified under ECCN 0A501, and for most ``parts'' and ``components''
of such ammunition. Such ammunition included in this final rule are for
small arms, in most cases, firearms of caliber not exceeding 0.50
inches, although some ammunition for firearms of caliber up to 0.72
inches is included. This final rule retains the CCL reasons for control
currently found in ECCNs 0A984 and 0A986 for shotgun shells. Buckshot
shotgun shells will be subject to the CC Column 1, FC Column 1, and UN
reasons for control under this final rule. Other shotgun shells are
subject to the FC, UN, and AT (North Korea only) reasons for control in
this final rule. Only ``parts'' and ``components'' will be eligible for
License Exception LVS. Ammunition for larger caliber weapons such as
howitzers, artillery, cannon, mortars, and recoilless rifles will
remain in USML Category III in this final rule. Ammunition that has
little or no civil use or that is inherently military such as
ammunition that is preassembled into links or belts, caseless
ammunition, tracer ammunition, ammunition with a depleted uranium
projectile or a projectile with a hardened tip or core and ammunition
with an explosive projectile also remains in USML Category III. Blank
ammunition for firearms controlled by ECCN 0A501 and not enumerated in
Category III of the USML will be controlled for United Nations and
anti-terrorism reasons only in this final rule.
This final rule adds three notes to clarify the scope of ``parts''
and ``components'' for ammunition classified under ECCN 0A505. Note 1
to 0A505.c clarifies the relationship between ECCNs 0A505 and 1A984 for
shotgun shells, stating that shotgun shells that contain only chemical
irritants are controlled under 1A984 and not 0A505. Separately, Note 2
to 0A505.x includes an illustrative list of the controls on ``parts''
and ``components'' in this entry, such as Berdan and boxer primers.
Note 3 to 0A505.x clarifies that the controls in ECCN 0A505 include
``parts'' and ``components'' that are common to ammunition and ordnance
described in this entry and to those enumerated in USML Category III.
[[Page 4161]]
This final rule adopts the following additional changes to ECCN
0A505 to respond to the comments received on the Commerce May 24 rule:
This final rule revises the LVS paragraph in the License Exceptions
section of ECCN 0A505 to increase the LVS eligibility from $100 to
$500. The Commerce May 24 rule had proposed $100, but commenters noted
that the cost of these parts and components would undermine the
usefulness of LVS eligibility if the $100 limitation was maintained.
Some commenters provided detailed price lists to support their position
that $100 of LVS eligibility would be of limited usefulness. BIS took
this into account and in this final rule increases the LVS eligibility
to $500 for ECCN 0A505.x. As a conforming change, because this final
rule moves ECCN 0A018.b to 0A505, this final rule adds grandfathering
provisions to retain LVS eligibility of $3,000 for any commodity that
was classified under 0A018.b prior the effective date of this final
rule.
This final rule revises ECCN 0A505.a to add the phrase ``or USML
Category I'' to clarify that ammunition for firearms controlled under
USML Category I is also controlled under 0A501.a, provided the
ammunition is not otherwise excluded by the control parameters in
0A501.a, i.e., being enumerated in 0A505.b, .c, .d, or in USML Category
III.
This final rule adds a Note 4 to 0A505 to specify that certain
types of ammunition (i.e., Lead shot smaller than No. 4 Buckshot, empty
and unprimed shotgun shells, shotgun wads, smokeless gunpowder, `Dummy
rounds' and blank rounds (unless linked or belted)), not incorporating
a lethal or non-lethal projectile(s) are designated EAR99. This final
rule also defines the terms `dummy round or drill round.' The new note
clarifies that these rounds are completely inert--meaning they contain
no primer, propellant, or explosive charge. The note specifies that
these types of rounds are typically used to check weapon function and
for crew training.
New ECCN 0A602: Guns and Armament
This final rule adds new ECCN 0A602 and imposes national security
(NS Column 1), regional stability (RS Column 1), United Nations (UN)
and anti-terrorism (AT Column 1) controls on guns and armament
manufactured between 1890 and 1919 and for military flame throwers with
an effective range less than 20 meters. It imposes those same reasons
for control on parts and components for those commodities and for
defense articles in USML Category II if such parts or components are
not specified elsewhere on the CCL or USML. Note 3 to 0A602 confirms
that black powder guns and armament manufactured in or prior to 1890
and replicas thereof designed for use with black powder propellants are
designated EAR99. The guns controlled in this ECCN are between 99 and
128 years old. The parts, components, accessories, and attachments
controlled in this ECCN include some that are for modern artillery.
Modern artillery remains on the USML, along with the most sensitive
``parts,'' ``components,'' ``accessories,'' and ``attachments'' for
these USML items. This final rule adds a note to clarify that
``parts,'' ``components,'' ``accessories,'' and ``attachments''
specified in USML subcategory II(j) are not subject to the EAR. The
USML Order of Review and CCL Order of Review already provide guidance
for making such a jurisdictional and classification determination, but
to highlight that these ``parts,'' ``components,'' ``accessories,'' and
``attachments'' are not classified under paragraph .x of 0A602, this
final rule adds a note.
This final rule adopts the following additional changes to ECCN
0A602 to respond to the comments received on the Commerce May 24 rule:
This final rule revises the Related Controls paragraph of ECCN
0A602 to add a Related Controls paragraph (3). This new Related
Controls paragraph provides a cross reference to ECCN 0A606 for engines
that are ``specially designed'' for a self-propelled gun or howitzer
subject to control under 0A606.a or USML Category VII. The Department
of State final rule includes a similar cross reference for purposes of
the USML and commenters requested the same type of note or related
control pointer be added to the EAR. The Department agrees and adds
Related Controls paragraph (3). As a conforming change, this final rule
redesignates Note 1 to 0A602 and Note 2 to 0A602 as Notes 2 and 3,
respectively.
New ECCN 0B501: Test, Inspection, and Production Equipment for Firearms
This final rule adds new ECCN 0B501 to cover ``Test, inspection,
and production `equipment' and related commodities for the
`development' or `production' of commodities enumerated or otherwise
described in ECCN 0A501 or USML Category I.'' This new ECCN applies the
national security (NS Column 1), regional stability (RS Column 1),
United Nations (UN), and anti-terrorism (AT Column 1) reasons for
control to four specific types of machinery and to one class of items
as proposed in the Commerce May 24 rule. The four specific types of
machinery are: small arms chambering machines, small arms deep hole
drilling machines and drills therefor, small arms rifling machines, and
small arms spill boring machines. The class of items covers dies,
fixtures, and other tooling ``specially designed'' for the
``production'' of items in the State Department final rule for USML
Category I or ECCN 0A501. In addition, as described below, this final
rule also expands the scope of 0B501.e to include all production
equipment ``specially designed'' for USML Category I items.
The NS and RS reasons for control do not apply to equipment for the
``development'' or ``production'' of commodities in ECCN 0A501.y
because those reasons for control do not apply to the commodities in
ECCN 0A501.y themselves.
The first four specific items noted above were listed in paragraphs
.o, .p, .q, and .r of ECCN 2B018 prior to the effective date of this
final rule, and are being listed in paragraphs .a, .b, .c, and .d of
ECCN 0B501 in this final rule. In addition, the class of items in new
0B501 that was included within ECCN 2B018, paragraph .n (jigs and
fixtures and other metal-working implements or ``accessories'' of the
kinds exclusively designed for use in the manufacture of firearms,
ordnance, and other stores and appliances for land, sea or aerial
warfare) prior to the effective date of this final rule, will, if
applicable to firearms controlled in 0A501, be subsumed in paragraph
.e. Jigs, fixtures, and metal working implements currently in 2B018
that are applicable to larger guns will be controlled in ECCN 0B602 in
this final rule and are discussed below.
Moving these items from 2B018 to 0B501 in this final rule retains
the national security (NS Column 1), anti-terrorism (AT Column 1), and
United Nations (UN) reasons for control and raises the regional
stability (RS) reason for control from RS Column 2 to RS Column 1. This
causes no change in destination-based license requirements, but allows
consideration of whether the export or reexport could contribute to
instability in any region, not just the region to which the item is
exported or reexported in considering whether to approve a license.
This final rule adopts the following additional changes to ECCN
0B501 to respond to the comments received on the Commerce May 24 rule:
This final rule expands ECCN 0B501.e to include all production
equipment ``specially designed'' for USML Category I items. This final
rule adds the term production equipment to the beginning
[[Page 4162]]
of the control text of ECCN 0B501.e and revises the phrase ``dies,
fixtures, and other tooling'' included in the Commerce May 24 rule to
``including dies, fixtures, and other tooling'' to indicate that these
items are illustrative and that other types of production equipment
that meet the control parameters are also controlled under ECCN 0B501.
New ECCN 0B505: Test, Inspection, and Production Equipment for
Ammunition
This final rule adds new ECCN 0B505 to impose national security (NS
Column 1), regional stability (RS Column 1), United Nations (UN), and
anti-terrorism (AT Column 1) controls on tooling, templates, jigs,
mandrels, molds, dies, fixtures, alignment mechanisms, and test
equipment, not enumerated in USML Category III, and ``specially
designed'' ``parts'' and ``components'' therefor, that are ``specially
designed'' for the ``production'' of ammunition other than for the
ammunition specified in 0A505.b, .c, or .d (certain shotgun shells with
buckshot and without buckshot and certain blank ammunition). In
addition, as described below, this final rule also expands the scope of
0B505.a to include all production equipment ``specially designed'' for
USML Category III items. Equipment for manufacturing shotgun shells
that do not contain buckshot will be controlled for the AT (North Korea
only) and UN reasons for control, which are the reasons for control
that applied to this equipment in ECCN 0B986 prior to this final rule.
ECCN 0B505 in this final rule does not include equipment for the hand
loading of cartridges and shotgun shells, so this final rule specifies
this in the heading.
This final rule adopts the following additional changes to ECCN
0B505 to respond to the comments received on the Commerce May 24 rule:
This final rule expands ECCN 0B505.a to include all production
equipment ``specially designed'' for USML Category III items. This
final rule adds the term production equipment to the beginning of the
control text of ECCN 0B505.a and revises the phrase ``tooling,
templates, jigs, mandrels, molds, dies, fixtures, alignment mechanisms,
and test equipment'' included in the Commerce May 24 rule to
``including tooling, templates, jigs, mandrels, molds, dies, fixtures,
alignment mechanisms, and test equipment'' to indicate that these items
are illustrative and other types of production equipment that meet the
control parameters are also controlled under ECCN 0B505.
Revisions to Eight ECCNs
To conform to new Federal Register Drafting Handbook requirements,
the amendatory instructions in this final rule sets forth the entire
text of eight ECCNs to be revised. BIS did not receive any comments on
the proposed revisions to the following six ECCNs 0E982, 1A984, 2B004,
2B018, 2D018, and 7A611 in the Commerce May 24 rule, so this final rule
revises those ECCNs as proposed. See the Commerce May 24 rule for
additional background on these revisions.
To help the public understand what specific parts of ECCN 0A018
will be different as a result of the changes in this final rule, the
narrative below describes the amendment in detail, including a
conforming change made to ECCN 0A988.
Revision to ECCN 0A018, and Conforming Change to ECCN 0A988
With the removal of ECCN 0A984 and the addition of 0A502 described
above, the Commerce May 24 rule proposed to make the conforming change
of removing and reserving 0A018.c since all the items classified in
0A018.c would be classified under other entries on the CCL once a final
rule was published.
This final rule adopts the following additional changes to ECCN
0A018 to respond to the comments received on the Commerce May 24 rule:
This final rule still revises ECCN 0A018, but instead of retaining
the commodities under 0A018.b as was proposed in the Commerce May 24
rule, these commodities are being moved to ECCN 0A505. As a conforming
change, this final rule replaces the control text of ECCN 0A018 with a
statement referring readers to ECCN 0A505.
This final rule adopts the following additional changes to ECCN
0A988 to respond to the comments received on the Commerce May 24 rule:
This final rule as a conforming change revises the heading of ECCN
0A988 to remove an outdated reference to 0A018.d. ECCN 0A018.d had been
previously removed and reserved, but the cross reference in 0A988 was
not updated. This final rule makes that correction.
Removal of Nine ECCNs
The Commerce May 24 rule proposed removing nine ECCNs. BIS did not
receive any comments on proposed removals of ECCNs 0A918, 0A984, 0A985,
0A986, 0A987, 0B986, 0E918, 0E984, and 0E987 in the Commerce May 24
rule, so this final rule removes those ECCNs as proposed. See the
Commerce May 24 rule for additional background on these removals.
Revision of ``Published''
This final rule adopts the following changes to part 734, and one
conforming change to part 732, to respond to the comments received on
the Commerce May 24 rule:
Specifically, this final rule adds a paragraph (c) to Sec. 734.7
stating that ``software'' or ``technology'' for the production of a
firearm, or firearm frame or receiver, controlled under ECCN 0A501,
that is made available by posting on the internet in an electronic
format and that may be directly loaded without further modification by
the machine operator into a computer numerically controlled machine
tool, additive manufacturing equipment, or any other equipment that
makes use of the ``software'' or ``technology'' to produce the firearm
frame or receiver or complete firearm, remains ``subject to the EAR.''
Also in Sec. 734.7, this final rule as a conforming change revises the
paragraph (a) introductory text to add a reference to new paragraph (c)
for the exclusions that apply to paragraph (a) for what is considered
``published.'' In Sec. 732.2 (Steps regarding scope of the EAR), under
the paragraph (b) introductory text for step 2 for publicly available
technology and software, this final rule also adds a reference to Sec.
734.7(c) to specify such ``software'' or ``technology'' for the
production of a firearm, or firearm frame or receiver, controlled under
ECCN 0A501, as referenced in Sec. 734.7(c)), is ``subject to the
EAR.''
Conforming Change to General Order No. 5
BIS does not make any additional changes in this final rule to what
was proposed in the Commerce May 24 rule as a result of the comments
received, so these changes are adopted as proposed. This final rule
amends General Order No. 5, paragraph (e)(3) (Prior commodity
jurisdiction determinations), in Supplement No. 1 to part 736, to add a
reference in two places to the new 0x5zz ECCNs that are being created
by this rule. This change to paragraph (e)(3) is a conforming change
and is needed because paragraph (e)(3) now only references the ``600
series'' and 9x515 ECCNs. 0x5zz ECCNs will include new ECCNs 0A501,
0A502, 0A504, 0A505, 0B501, 0B505, 0D501, 0D505, 0E501, 0E502, and
0E505.
[[Page 4163]]
Revisions to Regional Stability Licensing Policy for Firearms and
Ammunition
BIS does not make any additional changes in this final rule to what
was proposed in the Commerce May 24 rule as a result of the comments
received, so these changes are adopted as proposed. This final rule
applies the regional stability licensing policy set forth in Sec.
742.6(b)(1)(i) of the EAR to the items controlled for regional
stability reasons in ECCNs 0A501, 0A504, 0A505, 0B501, 0B505, 0D501,
0D505, 0E501, 0E504, and 0E505. That policy, which also applies to
``600 series'' and 9x515 items is case-by-case review ``to determine
whether the transaction is contrary to the national security or foreign
policy interests of the United States, including the foreign policy
interest of promoting the observance of human rights throughout the
world.'' This final rule also revises the regional stability licensing
policy set forth in paragraph (b)(1)(i) that is specific to the
People's Republic of China for 9x515 items. This final rule adds ECCNs
0A501, 0A505, 0B501, 0B505, 0D501, 0D505, 0E501, 0E504, and 0E505 to
this sentence to specify that these firearms and related items are to
be subject to a policy of denial when destined to the People's Republic
of China or a country listed in Country Group E:1. Lastly, this final
rule adds a sentence to the end of paragraph (b)(1)(i) to make it
explicit that applications for exports and reexports of ECCN 0A501,
0A505, 0B501, 0B505, 0D501, 0D505, 0E501, 0E504, and 0E505 items are
subject to a policy of denial when there is reason to believe the
transaction involves certain parties of concern, such as criminal
organizations, rebel groups, street gangs, or other similar groups or
individuals, that may be disruptive to regional stability.
Availability of License Exceptions
Many of the items in the new ``600 series'' ECCNs generally will be
eligible for the same license exceptions and subject to the same
restrictions on use of license exceptions as other ``600 series'' ECCNs
in this final rule. For the ECCNs on the CCL prior to the effective
date of this final rule that are being renumbered and placed in closer
proximity to the firearms-related items that are being removed from the
USML and added to the CCL, these existing firearms-related items will
continue to be eligible for the same EAR license exceptions as they
were prior to the effective date of this final rule, unless otherwise
restricted under Sec. 740.2, if the requirements of the license
exceptions are met.
Restrictions on All License Exceptions
This final rule also makes the following additional changes to part
740 to respond to the comments received on the Commerce May 24 rule by
adding two new general restrictions.
In Sec. 740.2 (Restriction on all license exceptions), this final
rule adds two additional restrictions for when license exceptions may
not be used. This final rule adds new paragraph (a)(21) to restrict the
use of license exceptions, except for License Exception GOV under Sec.
740.11(b)(2)(ii) for the reexport or transfer (in-country) of certain
firearms classified under ECCNs 0A501 or 0A502. The restriction on the
use of license exceptions applies if a part or component that is not
``subject to the ITAR,'' but would otherwise meet the criteria in USML
Category I(h)(2) is incorporated into the firearm or is to be
reexported or transferred (in-country) with the firearm with
``knowledge'' the part or component will be subsequently incorporated
into the firearm. Because these parts or components that would
otherwise meet the criteria in USML Category I(h)(2) could be used for
conversion of a semi-automatic firearm to a fully automatic firearm,
this final rule excludes those firearms from license exception
eligibility.
In Sec. 740.2 this final rule also adds a new paragraph (a)(22) to
restrict the use of license exceptions for the export, reexport, or
transfer (in-country) of any item classified under a 0x5zz ECCN when a
party to the transaction is designated on the Department of the
Treasury, Office of Foreign Assets Control (OFAC), Specially Designated
Nationals and Blocked Persons (SDN) list under the designation [SDNT],
or under the designation [SDNTK]. OFAC makes SDNT designations pursuant
to the Narcotics Trafficking Sanctions Regulations, 31 CFR part 536,
and SDNTK designations are made, pursuant to the Foreign Narcotics
Kingpin Sanctions Regulations, 31 CFR part 598. This restriction on the
use of license exceptions for these 0x5zz items will ensure that such
parties designated on the SDN list will not be able to receive these
0x5zz items without a BIS license.
License Exception: Shipments of Limited Value (LVS)
Under this final rule, complete firearms controlled under ECCN
0A501 are not eligible for License Exception LVS, 15 CFR 740.3.
Firearms ``parts,'' ``components,'' ``accessories,'' and
``attachments'' controlled under ECCN 0A501, other than receivers
(frames), and ``complete breech mechanisms,'' including castings,
forgings or stampings thereof, are eligible for License Exception LVS,
with a limit of $500 on net value per shipment. In addition, receivers
(frames), and ``complete breech mechanisms,'' including castings,
forgings or stampings thereof, are eligible for License Exception LVS
if the ultimate destination is Canada. This final rule states these
limits in the License Exceptions paragraph of ECCN 0A501, and no
revisions to the text of the license exception itself are needed to
implement them. BIS believes that this provision is generally
consistent with the license exemption for limited value shipments of
firearms formerly found in ITAR (22 CFR 123.17(a)) (removed and
reserved by the companion rule). This LVS eligibility included in this
final rule is less restrictive than the former ITAR provision in two
respects. First, the value limit per shipment will be $500 compared to
$100 in the ITAR. Second, the LVS eligibility in the final rule allows
exports of receivers and ``complete breech mechanisms'' to Canada
whereas Sec. 123.17(a) did not. However, the $500 LVS limit is based
on the actual selling price or fair market value, whereas the ITAR $100
limit is based on ``wholesale'' value. In addition, with respect to
Canada, an LVS limit of $500 per shipment is needed to comply with the
Section 517 of the Commerce, Justice, Science, and Related Agencies
Appropriations Act of 2015, which prohibits expending any appropriated
funds to require licenses for the export of certain non-automatic
firearms parts, components, accessories and attachments to Canada when
valued at under $500.
Guns and armament and related items controlled under ECCN 0A602 are
eligible for License Exception LVS, with a limit of $500 net value per
shipment in this final rule.
Ammunition controlled under ECCN 0A505 are eligible for License
Exception LVS; however, ammunition parts and components will be
eligible with a limit of $500 (Commerce May 24 rule proposed $100, but
as described below in the changes to ECCN 0A505, this final rule
increases the limit of $500) net value per shipment in this final rule.
Test, inspection, and production equipment controlled under ECCNs
0B501, 0B505, and 0B602 for firearms, guns and armament, and
ammunition/ordnance are eligible for License Exception LVS with a limit
of $3,000 net value per shipment, which is consistent with LVS
eligibility for most 600 series ECCNs in this final rule.
[[Page 4164]]
License Exception: Temporary Imports, Exports, Reexports, and Transfers
(In-Country) (TMP)
This final rule amends Sec. 740.9 to state that License Exception
TMP is not available to export or reexport the items that are the
subject of this rule to destinations in Country Group D:5 (See
Supplement No. 1 to part 740), or to Russia (Russian Federation).
License Exception TMP is also not available to export or reexport some
firearms and ammunition shipped from or manufactured in Russia (Russian
Federation), Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan,
Ukraine, or Uzbekistan. In addition, this final rule will prohibit the
use of License Exception TMP to export or reexport any item controlled
by ECCN 0A501 and any shotgun with a barrel length less than 18 inches
controlled under ECCN 0A502 that was shipped from or manufactured in
Country Group D:5. This final rule also prohibits use of License
Exception TMP to export or reexport any item controlled by ECCN 0A501
that is shipped from or manufactured in Russia, Georgia, Kazakhstan,
Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or Uzbekistan, except for
any firearm model controlled by 0A501 that is also excluded under Annex
A in Supplement No. 4 to part 740 (the prohibition will not apply to
such firearms;); and any shotgun with a barrel length less than 18
inches controlled under 0A502 that was shipped from or manufactured in
Russia, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan,
Ukraine, or Uzbekistan. These prohibitions will apply to temporary
exports of firearms from the United States, and the export of firearms
temporarily in the United States. This final rule for consistency with
the ITAR requirements for exports of firearms to Georgia, Kazakhstan,
Kyrgyzstan, Moldova, Turkmenistan, Ukraine, and Uzbekistan, removes the
restriction included in the Commerce May 24 rule in paragraph
(b)(5)(iii) that the firearms may not ultimately be destined to one of
these seven countries from the restriction in paragraph (b)(5)(iii),
but retains the restriction for Russia. This final rule makes one
correction in Annex A in Supplement No. 4 to part 740 for the rifle
``VEPR Pioner'' under paragraph (b)(90) to correctly spell it as ``VEPR
Pioneer.''
This final rule limits temporary exports of firearms controlled
under ECCN 0A501 and any shotgun with a barrel length less than 18
inches controlled under ECCN 0A502 pursuant to License Exception TMP to
exhibition and demonstration (Sec. 740.9(a)(5) of the EAR) and
inspection, test, calibration, and repair (Sec. 740.9(a)(6) of the
EAR). Consistent with the ITAR requirements previously applicable to
temporary exports of the firearms covered by this rule (see 22 CFR
123.17(c), 123.22), exporters will continue to be required to file EEI
in AES for transactions involving such firearms that are authorized
pursuant to License Exception TMP (See Sec. 758.1(a)(10) of the EAR).
This final rule authorizes the use of License Exception TMP for the
export of ECCN 0A501 firearms temporarily in the United States for a
period of not more than one year subject to the requirement that the
firearms not be imported from or ultimately destined for certain
proscribed or restricted countries. Certain information as described in
the regulatory text will also be collected by CBP on behalf of BIS
under existing or new Commerce paperwork collections. This final rule
also makes eligibility to export under License Exception TMP for ECCN
0A501.a or .b or shotguns with a barrel length less than 18 inches
controlled in ECCN 0A502 subject to the following conditions:
At the time of entry for a temporary import, the temporary importer
is required to provide the required statement to CBP, as specified in
paragraph (b)(5)(iv)(A).
The temporary importer is required to include on the invoice or
other appropriate import-related documentation (or electronic
equivalents) provided to CBP a complete list and description of the
0A501 firearms being imported, including their serial numbers, model,
make, caliber, quantity, and U.S. dollar value, as specified in
paragraph (b)(5)(iv)(B).
If the firearms are temporarily imported for a trade show,
exhibition, demonstration, or testing, the temporary importer must
provide to CBP the relevant invitation or registration documentation
for the event and an accompanying letter that details the arrangements
to maintain effective control of the firearms while they are in the
United States, as specified in paragraph (b)(5)(iv)(C).
At the time of export, the temporary importer or its agent as
specified in paragraph (b)(5)(v) are required to provide the temporary
import documentation (i.e., the invoice used at the time of entry for
the temporary importation or other appropriate temporary import-related
documentation (or electronic equivalents)) related to paragraph
(b)(5)(iv)(B) to CBP. This information will be used by CBP to confirm
that such firearms were in fact temporarily imported under the EAR for
subsequent export under License Exception TMP.
This final rule adds a note to License Exception TMP to direct
temporary importers and exporters to contact CBP at the port of import
or export for the proper procedures to provide any data or
documentation required by BIS.
License Exception: Governments, International Organizations,
International Inspections Under the Chemical Weapons Convention, and
the International Space Station (GOV)
This final rule revises Sec. 740.11 to limit the applicability of
License Exception GOV for firearms, ``parts'' and ``components''
controlled by ECCN 0A501 and ammunition controlled by 0A505 to exports,
reexports, and transfers for official use by U.S government agencies
and official and personal use by U.S. Government employees (and the
immediate families and household employees of those government
employees) (Sec. 740.11(b)(2)(i) and (ii) of the EAR). This
authorization under License Exception GOV treats 0A501 firearms in the
same manner that other items that are subject to the EAR may be
exported to U.S. Government employees under License Exception GOV. It
does not impose certain restrictions that are imposed by the former
ITAR license exemption (22 CFR 123.18) (removed and reserved by
companion rule) that authorized shipments consigned to and for the use
of servicemen's clubs, and for service members or civilian employees if
the firearms are for personal use and the shipment is accompanied by a
written authorization from the commanding officer concerned. See the
Commerce May 24 rule for additional background. License Exception GOV
authorizes non-automatic and semi-automatic firearms and related
``parts'' and ``components.''
All other items that are the subject of this final rule will be
subject to the limits on use of License Exception GOV that apply to 600
series items generally, i.e., Sec. 740.11(b)--to, for, or on behalf of
the U.S. Government (including contractors, government employees, their
families and household employees) or Sec. 740.11(c) to a government in
Country Group A:1 cooperating governments or an agency of NATO.
However, this rule will add some additional restrictions for E:1 and
E:2 countries. This final rule will exclude the use of License
Exception GOV for any item listed in a 0x5zz ECCN for E:1 countries,
unless authorized under paragraph (b)(2)(i) or
[[Page 4165]]
(ii) when the items are solely for U.S. Government official use. In
addition, to better ensure compliance with section 1754(c) of the ECRA
and address concerns with certain end users and uses in Country Group
E:1 and E:2 countries, this final rule adds a new Note 2 to paragraph
(b)(2), which restricts the use of License Exception GOV for E:1 and
E:2 countries for multilaterally controlled items and anti-terrorism
(AT) controlled items when destined to certain end users or end uses of
concern.
This final rule also makes the following additional change to
License Exception GOV to respond to the comments received on the
Commerce May 24 rule:
In Sec. 740.11 of License Exception GOV, this final rule revises
Note 2 to paragraph (b)(2) to include illustrative examples of other
sensitive end-users. This final rule adds the parenthetical phrase
``(e.g., contractors or other governmental parties performing functions
on behalf of military, police, or intelligence entities)'' after the
phrase ``or other sensitive end-users'' to provide greater clarity on
the other end-users that are excluded.
License Exception: Baggage (BAG)
This final rule revises License Exception BAG, Sec. 740.14, to
allow United States citizens and permanent resident aliens leaving the
United States temporarily to take up to three firearms controlled by
proposed ECCN 0A501 and up to 1,000 rounds of ammunition for such
firearms controlled under ECCN 0A505.a for personal use while abroad.
This change to License Exception BAG is made to be consistent with
former 22 CFR 123.17(c) (removed and reserved by companion rule), which
authorized U.S. persons to take up to three non-automatic firearms and
up to 1,000 cartridges therefor abroad for personal use. This amendment
to License Exception BAG applies to both non-automatic and semi-
automatic firearms.
Travelers leaving the United States temporarily are required to
declare the 0A501 and 0A505 items to a CBP officer prior to departure
from the United States and present the firearms, ``parts,''
``components,'' ``accessories,'' ``attachments,'' and ammunition they
are exporting to the CBP officer for inspection, confirming that the
authority for the export is License Exception BAG, that the exporter is
compliant with its terms. Should exporters desire to contact CBP prior
to departure, contact information and a list of U.S. air, land and sea
ports of entry can be found at: https://www.cbp.gov/contact/ports.
This final rule also revises License Exception BAG to allow
nonresident aliens leaving the United States to take firearms,
``accessories,'' ``attachments,'' ``components,'' ``parts,'' and
ammunition controlled by ECCN 0A501 or 0A505 that they lawfully brought
into the United States. This change is consistent with former 22 CFR
123.17(d) (removed and reserved by companion rule), which authorized
foreign persons leaving the United States to take firearms and
ammunition controlled under Category I(a) of the USML (both non-
automatic and semi-automatic) that they lawfully brought into the
United States. This final rule does not adopt any changes to the
availability of License Exception BAG for shotguns and shotgun shells
authorized under paragraph (e)(1) or (2).
As a clarification to License Exception BAG, this final rule adds
one sentence to the introductory text of paragraph (b)(4) to highlight
the special provisions that apply in paragraph (e) for firearms and
ammunition and in paragraph (h) for personal protective equipment under
ECCN 1A613.c or .d. This one sentence does not change the existing
requirement and has been included to assist the public in better
identifying these special provisions.
Consistent with the ITAR requirements previously applicable to
temporary exports of the firearms and associated ammunition covered by
the May 24 proposed rule, BIS proposed in the Commerce May 24 rule to
modify Sec. 758.1 of the EAR to make clear that exporters would
continue to be required to file EEI in AES for transactions involving
such firearms and associated ammunition that are otherwise authorized
pursuant to License Exception BAG. However, for the reasons described
above in the description of the comments and BIS responses, this final
rule adopts an alternative approach with the addition of the new Sec.
758.11 described immediately below.
This final rule makes the following additional changes in response
to the public comments received on the Commerce May 24 rule:
As described above, this final rule removes the EEI filing
requirement in AES as set forth in Sec. 758.1(b)(9) for firearms
authorized under License Exception BAG.
In response to public comments as described above, this final rule
instead adds a new Sec. 758.11 (Export clearance requirements for
firearms and related items) and incorporates a requirement to use the
Department of Homeland Security, CBP Form 4457, Certificate of
Registration for Personal Effects Taken Abroad) (OMB Control Number
1651-0010) for all exports of commodities controlled under ECCNs
0A501.a or .b, shotguns with a barrel length less than 18 inches
controlled under ECCN 0A502, or ammunition controlled under ECCN 0A505
except for .c, regardless of value or destination, including exports to
Canada, that are authorized under License Exception BAG, as set forth
in Sec. 740.14. Section 758.11 includes four paragraphs: Paragraph (a)
(Scope) specifies when these export clearance requirements apply;
paragraph (b) (Required form) identifies the required form that needs
to be used in connection with these exports authorized under License
Exception BAG, including paragraph (b)(1) that includes a website for
where to find the form, and paragraph (b)(2) that specifies the
``description of articles'' for firearms to be included on the CBP Form
4457; paragraph (c) provides a link for where to find additional
information on the CBP Form 4457; and paragraph (d) (Return of items
exported pursuant to this section) specifies the requirements for the
return of items exported under License Exception BAG when the export
clearance requirements in Sec. 758.11 apply.
License Exception: Servicing and Replacement of Parts and Equipment
(RPL)
This final rule also adopts the following changes to License
Exception RPL to respond to the comments received on the Commerce May
24 rule, that requested License Exception RPL be included as a valid
purpose for a temporary import under Sec. 758.10. As described above,
BIS agreed to include License Exception RPL in Sec. 758.10, and these
changes are described below.
In Sec. 740.10(b) (Servicing and replacement of parts and
equipment), this final rule makes needed conforming changes for the
addition of License Exception RPL to Sec. 758.10 and to include
similar changes as were made to License Exception TMP under Sec.
740.9(b)(5) in the Commerce May 24 rule. This final rule adds one
sentence to the end of the introductory text of Sec. 740.10(b)(1) to
specify that that additional requirements in new paragraph (b)(4) must
be met in order to use License Exception RPL to authorize under
paragraph (b)(2) or (3) the export of firearms controlled by ECCN
0A501.a or .b, or shotguns with a barrel length less than 18 inches
controlled in ECCN 0A502 temporarily in the United State for servicing
and replacement. This final rule adds new paragraph (b)(4) (Exports
[[Page 4166]]
of firearms and certain shotguns temporarily in the United States for
servicing and replacement). Under the introductory text of paragraph
(b)(4), this final rule imposes a requirement that the firearms and
certain shotguns must be temporarily in the United States for servicing
or replacement for a period not exceeding one year or the time it takes
to service or replace the commodity, whichever is shorter in order to
use License Exception RPL to authorize the export. This final rule adds
paragraphs (b)(4)(i) and (ii) to impose restrictions for firearms
shipped from or manufactured in Russia, Georgia, Kazakhstan,
Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or Uzbekistan, except for
any firearm model controlled by 0A501 that is specified under Annex A
in Supplement No. 4 to part 740, to impose the same types of
restrictions and impose the same type of information requirements for
providing information to CBP as this final rule includes for License
Exception TMP under paragraph (b)(5).
License Exception: Additional Permissive Reexports (APR)
This final rule also adopts the following change to License
Exception APR to respond to the comments received on the Commerce May
24 rule:
In Sec. 740.16 of License Exception APR, this final rule adds
commodities classified under a 0x5zz ECCN to the list of commodities
excluded under paragraph (a) of License Exception APR. This final rule
also adds a new paragraph (b)(2)(vi) to exclude commodities classified
under a 0x5zz ECCN under paragraph (b) of License Exception APR. The
Commerce May 24 rule did not propose these exclusions from License
Exception APR, but BIS identified these two paragraphs of License
Exception APR as two authorizations that were not intended to be
available under the Commerce May 24 rule, but based on the stated
criteria prior to the effective date of this final rule would have been
available. Therefore, this final rule makes these changes to ensure the
authorizations available for reexports and transfers (in-country) will
be equivalent to those available for exports.
License Exception STA
BIS did not receive any comments on the proposed changes to License
Exception STA, Sec. 740.20, in the Commerce May 24 rule, so this final
rule adopts those changes as proposed. This final rule revises the
regulations at Sec. 740.20 to make firearms controlled under ECCN
0A501 and most ``parts,'' ``components,'' ``accessories,'' and
``attachments'' controlled under ECCN 0A501 ineligible for License
Exception STA. Only those ``parts,'' ``components,'' ``accessories,''
and ``attachments'' that are controlled under paragraph .x are eligible
for export under License Exception STA. Items controlled under ECCNs
0A502 and 0A503 are also excluded from STA eligibility.
Support Documentation for Firearms, Parts, Components, Accessories, and
Attachments Controlled by ECCN 0A501
BIS did not receive any comments on this proposed change to Sec.
748.12 in the Commerce May 24 rule, so the change is published in this
final rule as proposed. This final rule requires that for commodities
controlled by ECCN 0A501 that are the subject of export or reexport
transactions for which a license is required, the exporter or
reexporter must obtain, prior to submitting an application, an import
permit (or copy thereof) if the importing country requires such permits
for import of firearms. That import permit is a record that must be
kept by the exporter or reexporter as required by part 762 of the EAR.
The purpose of this requirement is to assure foreign governments that
their regulations concerning the importation of firearms are not
circumvented. To implement this change, this final rule revises Sec.
748.12 to include the commodities controlled under ECCNs 0A501 (except
0A501.y), 0A502, 0A504 (except 0A504.f), and 0A505 (except 0A505.d)
within the list of commodities that are subject to the requirement and
adds a new paragraph (e) requiring that import certificates or permits
be obtained from countries other than OAS member states if those states
require such a certificate or permit.
Licenses for Firearms and Ammunition Will Be Limited to the Authorized
End Use and End Users
BIS did not receive any comments on these statements of EAR
licensing policy in the Commerce May 24 rule but restates them here to
assist the public. Consistent with other BIS licenses, including ``600
series'' and 9x515 items, licenses for firearms and ammunition that
move from the USML to the CCL are limited to the authorized end use and
end users specified on the license and supporting documentation
submitted as part of the license application. This means any change in
the authorized end use or end user for a licensed transaction will
require a BIS authorization. This existing requirement of BIS licenses
is specified in Sec. 750.7(a) and on the boiler plate text included on
all BIS licenses. These requirements are also applied to firearms and
ammunition licenses. A change in end use or end user, including a
change of authorized end use or end user within a single foreign
country for a firearm or ammunition authorized under a BIS license,
requires a BIS authorization. BIS does not adopt any changes in this
final rule to these well-established and understood requirements on
using BIS licenses. Applicants for firearms and ammunition licenses are
also advised that BIS continues to exercise its authority, as specified
in Sec. 748.11 in the Note 2 to paragraph (a), on a case-by-case basis
to require a Statement by Ultimate Consignee and Purchaser as
warranted.
The exporter, reexporter, or transferor using a BIS license,
including for firearms and ammunition licenses, is also required,
pursuant to Sec. 750.7(a), to inform the other parties identified on
the license, such as the ultimate consignees and end users of the
license's scope and of the specific conditions applicable to them. As
an additional safeguard for firearms and ammunition licenses, BIS will
include, when warranted, a license condition requiring the exporter,
reexporter, or transferor to obtain from the other parties identified
on the license a written confirmation that those other parties have
received and agree to the terms and conditions of the license. For
example, the condition may state ``Prior to using this license, the
exporter (reexporter or transferor) and other parties to the license
must agree to the conditions in writing and the exporter (reexporter or
transferor) must keep this on file with their other records.'' The
documents described in this paragraph are required to be kept for EAR
recordkeeping purposes under part 762 of the EAR.
Conventional Arms Reporting for Certain Exports of ECCN 0A501.a and .b
Commodities
In Sec. 743.4 (Conventional arms reporting), this final rule
revises paragraphs (c)(1)(i) and (c)(2)(i) to add ECCN 0A501.a and .b
as commodities that require Wassenaar Arrangement reporting and United
Nations reporting under this conventional arms reporting section of the
EAR. This requirement assists the U.S. Government to meet its
multilateral commitments for the special reporting requirements for
exports of certain items listed on the WAML and the United Nations
Register of Conventional Arms when these items are authorized for
export under License Exceptions LVS, TMP, RPL, STA, or GOV (see part
740 of the EAR) or the
[[Page 4167]]
Validated End-User authorization (see Sec. 748.15 of the EAR) and for
United Nations reporting. License Exceptions LVS and STA are identified
in Sec. 743.4(b)(1), but because ECCN 0A501.a and .b commodities are
not eligible for those two license exceptions, the reporting
requirements under Sec. 743.4(c)(1)(i) and (c)(2)(i) are limited to
exports authorized License Exceptions TMP, GOV, and RPL or the
Validated End-User authorization. This final rule also adds contact
information for these reports.
This final rule also makes the following additional change to Sec.
743.4 to respond to the comments received on the Commerce May 24 rule:
Commenters requested that BIS use information required to be
submitted in the EEI filing in AES to pull the conventional arms
reporting data directly in order to eliminate the need for exporters to
submit separate reports to BIS. BIS agreed and this final rule revises
three paragraphs in Sec. 743.4 to adopt an alternative method for BIS
to receive the information that is required for conventional arms
reporting. This rule revises paragraph (a) to add four sentences at the
end of the paragraph. These four sentences specify that if the exporter
follows the requirements specified in this section for the alternative
submission method described in new paragraph (h) (Alternative
submission method), that separate reporting does not need to be made to
BIS for purposes of Sec. 743.4. Because of the EEI filing requirements
in AES in new Sec. 758.1(g)(4)(ii) for the firearms that require
conventional arms reporting, all conventional arms reporting
requirements for firearms should be able to be met by using the
alternative submission method. Under paragraph (b) (Requirements), this
final rule adds a reference to meeting the reporting requirement by
using the alternative submission method in new paragraph (h).
This final rule adds paragraph (h) that describes the requirements
for the alternative submission method. To use the alternative reporting
method, each time the exporter files an EEI record in AES, the exporter
must include as the first text in the Commodity Description field in
AES the first six characters of the ECCN number, i.e., ``0A501.a'' or
``0A501.b.'' In addition, the exporter must document for recordkeeping
requirements under the EAR that for purposes of the conventional arms
reporting requirements under part 743, it has decided to use the
alternate submission method by taking steps to identify the end item
firearms in the EEI filing in AES that will enable the U.S. Government
to pull the data and meet national reporting commitments to the
Wassenaar Arrangement and the United Nations.
As a conforming change, in Sec. 758.1 (The Electronic Export
Enforcement (EEI) filing to the Automated Export System (AES)), this
final rule adds a new paragraph (g)(4)(ii) (Identifying end item
firearms by ``items'' level classification or other control descriptor
in the EEI filing in AES). Exporters must include the six character
ECCN classification (i.e., 0A501.a or 0A501.b), as the first text to
appear in the Commodity description block in the EEI filing in AES.
Exporters for shotguns controlled under 0A502 must include the phrase
``0A502 barrel length less than 18 inches'' as the first text to appear
in the Commodity description block in the EEI filing in AES. This
information will be used by BIS as referenced in Sec. 743.4(h) for
conventional arms reporting.
Changes to Export Clearance Requirements for Firearms Being Moved to
the CCL (Part 758)
In Sec. 758.1, this final rule adopts changes to clarify that a
filing of EEI in AES will be required for exports of the firearms
transferred from the USML pursuant to this rule regardless of value or
destination, including exports to Canada. As noted above, this
requirement applies, as was the case under the ITAR prior to the
effective date of this final rule, for temporary exports of such items
pursuant to License Exception TMP, but not for License Exception BAG.
In addition, this final rule expands the data elements required as
part of an EEI filing to AES filing for these firearms to include
serial numbers, make, model and caliber. This requirement will ensure
law enforcement officials are able to effectively verify that firearms
exports are properly authorized and in conformance with all applicable
regulations, including those associated with the temporary export and
subsequent return of controlled firearms and unused ammunition.
This final rule also makes the following additional changes to
Sec. 758.1(b)(10) and (c)(1) to respond to the comments received on
the Commerce May 24 rule regarding the concerns for individuals having
to file EEI in AES:
In Sec. 758.1, this final rule revises new paragraph (b)(10) that
was included in the Commerce May 24 rule, but adds it as new paragraph
(b)(9). This final rule excludes exports authorized under License
Exception BAG from the EEI filing requirement in AES. As a conforming
change, this final rule revises paragraph (c)(1) to eliminate the
restriction from the exemption for License Exception BAG. This final
rule makes this change because of excluding License Exception BAG from
paragraph (b)(9) means the general exemption for not filing EEI in AES
for these firearms authorized under License Exception BAG, should be
available, so this final rule makes this conforming change. This final
rule adds a new Note to paragraph (c)(1) to add a cross reference to
the export clearance requirements that are specific to firearms
exported under License Exception BAG.
This final rule also makes the following additional changes to
Sec. 758.1(g)(4) to respond to the comments received on the Commerce
May 24 rule regarding concerns for having to include the manufacture,
model, caliber, and serial number in the EEI filing in AES:
In Sec. 758.1(g)(4) (Exports of Firearms and Related Items), this
final rule adds a new paragraph (g)(4)(i) (Identifying end item
firearms by manufacturer, model, caliber, and serial number in the EEI
filing in AES) to narrow the requirement for when firearms must be
identified by manufacture, model, caliber, and serial number in the EEI
filing in AES to License Exception TMP or a BIS license that contains a
condition requiring all or some of this information to be filed as EEI
in AES.
Entry Clearance Requirements for Temporary Imports (Sec. 758.10)
Temporary imports are transactions that involve both the temporary
entry of an item into the U.S. from a foreign country and the
subsequent export of that item from the U.S. To preserve the treatment
of temporary import transactions for items in this rule that will
transfer from the USML in the ITAR to become subject to the EAR, BIS
imposes a temporary imports entry clearance requirement in this final
rule by adding new Sec. 758.10. This new section is limited to items
in this rule that are both ``subject to the EAR'' and on the USMIL in
27 CFR 447.21. To allow such items to temporarily enter the U.S., this
final rule imposes a process to collect identifying information for the
sole purpose of tracking items being temporarily imported for
subsequent export. BIS does not impose a license requirement for such
imports, but this information is necessary to facilitate the export
after a temporary import. The entry clearance requirement is an EAR
requirement and any false representation made under the new Sec.
758.10 will be a violation of the EAR.
[[Page 4168]]
This final rule also makes the following additional change to Sec.
758.10 to respond to the comments received on the Commerce May 24 rule:
In Sec. 758.10, this final rule adds an exclusion to the entry
clearance requirements proposed in the Commerce May 24 rule to clarify
that firearms ``subject to the EAR'' brought into the United States by
nonimmigrant aliens under the provisions of Department of Justice
regulations at 27 CFR part 478 are not subject to these same entry
clearance requirements for temporary imports. This final rule makes
this change for consistency with License Exception BAG under paragraph
(e) and because ATF regulations address nonimmigrant aliens temporarily
bringing these types of firearms into the United States, so the
requirements in Sec. 758.10 do not need to apply.
In Sec. 758.10, this final rule clarifies the penultimate sentence
and the last sentence of paragraph (a) by removing references to
``permanent return'' and ``permanent import'' after items are
temporarily exported under an EAR authorization, e.g., License
Exception TMP or a Commerce license. This clarification is made because
the inbound portion of a temporary export is covered by the temporary
export authorization, so it not accurate to describe those as a
``permanent return'' or as a ``permanent import.''
Also in Sec. 758.10, this final rule clarifies the introductory
text of paragraph (b) by deleting the title ``the Port Directors''
before U.S. Customs and Border Protection. This change is made because
U.S. Customs and Border Protection Center Directors may also have an
enforcement role in addition to Port Directors, so referencing U.S.
Customs and Border Protection is sufficient. In paragraph (b)(2), this
final rule revises the phrase ``as requested by CBP'' with the phrase
``upon request by CBP.'' In the last sentence of paragraph (b)(2), this
final rule removes the word ``inspection'' after the phrase
``additional requirements,'' because the word was not intended to be
included in the cross reference to Sec. 758.1(g)(4).
This final rule also revises Sec. 758.10 to add references to
License Exception RPL and BIS licenses as two additional EAR
authorizations as valid purposes for a temporary import under this
section. This final rule does this by revising paragraph (b)(1)(i) to
broaden the number of permissible statements to allow for three
statements (instead of the single statement that was included in the
Commerce May 24 rule). This final rule adds new paragraphs (b)(1)(i)(A)
(to account for License Exception TMP under 15 CFR 740.9(b)(5)),
(b)(1)(i)(B) (to account for the addition of License Exception RPL
under 15 CFR 740.10(b)), and (b)(1)(i)(C) (to account for BIS licenses)
to add the three statements. The three statements are substantively the
same, and the only difference is the EAR authorization being referenced
in the statement. As a conforming change, this final rule adds a new
paragraph (b)(1)(iv) that applies if the item being temporarily
imported under Sec. 758.10 is for servicing or replacement. Under this
new paragraph (b)(1)(iv) at the time of temporary import, the name,
address and contact information of the organization or individual in
the U.S. that will be receiving the item for servicing or replacement
must be provided to CBP. Lastly, as an additional conforming change,
this final rule adds a new Note 2 to paragraph (b)(1) to impose
exclusions, similar to those imposed on License Exception TMP that
limit the availability of License Exception RPL for temporary imports
of certain firearms shipped from or manufactured in listed countries.
Unique Application and Submission Requirements for Licenses
This final rule also adopts the following changes for BIS license
applications in response to comments received. As described above, BIS
agreed to include changes in Sec. 758.10 to account for temporary
imports that would require a BIS license for subsequent export.
In Supplement No. 2 to part 748--Unique Application and Submission
Requirements, this final rule adds a new paragraph (z) (Exports of
firearms and certain shotguns temporarily in the United States)
describing a certification requirement for applicants to include in
Block 24 of the BIS license application. The certification requirement
is an acknowledgement by the applicant that the firearms in the
application will not be shipped from or manufactured in Russia,
Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or
Uzbekistan, except for any firearm model controlled by 0A501 that is
specified under Annex A in Supplement No. 4 to part 740. The
certification also requires that the applicant and other parties to the
transaction will comply with the requirements in paragraphs (z)(2)(i)
and (ii) of Supplement No. 2 to part 748. This final rule adds
paragraph (z)(2) (Requirements) to describe the requirements that will
be applicable for any license for the export of firearms controlled by
ECCN 0A501.a or .b, or shotguns with a barrel length less than 18
inches controlled in ECCN 0A502 that will be temporarily imported to
the United States. These requirements impose the same type of
requirements as this final rule includes for License Exception TMP
under paragraph (b)(5) and License Exception RPL under paragraph
(b)(4), but does so by imposing the certification requirement in
paragraph (z)(1). BIS will include a standard condition that will
require compliance with the requirements in paragraphs (z)(2)(i) and
(ii).
Changes to EAR Recordkeeping Requirements for Firearms Being Moved to
the CCL (Part 762)
BIS does not make any additional changes in this final rule to what
was proposed in the Commerce May 24 rule as a result of the comments
received, so these changes are adopted as proposed. In part 762
(Recordkeeping), this final rule adopts two changes to the
recordkeeping requirements under the EAR. These changes specify that
certain records, that are already created and kept in the normal course
of business, must be kept by the ``exporter'' or any other party to the
transaction (see Sec. 758.3 of the EAR), that creates or receives such
records.
Specifically, in Sec. 762.2 (Records to be retained), this final
rule redesignates paragraph (a)(11) as (a)(12) and adds a new paragraph
(a)(11) to specify the following information must be kept as an EAR
record: Serial number, make, model, and caliber for any firearm
controlled in ECCN 0A501.a and for shotguns with barrel length less
than 18 inches controlled in 0A502. The ``exporter'' or any other
``party to the transaction'' that creates or receives such records is
the person responsible for retaining this record.
In Sec. 762.3 (Records exempt from recordkeeping requirements),
this final rule narrows the scope of an exemption from the EAR
recordkeeping requirements for warranty certificates. This final rule
narrows this exclusion to specify the exclusion from the recordkeeping
requirements does not apply (meaning the record will need to be kept
under the recordkeeping requirements) for warranty certificates for any
firearm controlled in ECCN 0A501.a and for shotguns with barrel length
less than 18 inches controlled in 0A502, when the certificate issued is
for an address located outside the United States. This is an expansion
of the EAR recordkeeping requirements, but because warranty
certificates are already created and kept as part of normal business
recordkeeping purposes, this expansion is not anticipated to create any
new or increased burden under the
[[Page 4169]]
EAR, because it is a document that is created in the normal course of
business and should be easily accessible. These recordkeeping
requirements will assist the United States Government because it is
important for law enforcement to have access to this information.
Conforming Change To Add a New Definition for Use in ECCNs 0A501 and
0A502 (Sec. 772.1)
This final rule also adds a new definition to the definition part
of the EAR to respond to the comments received on the Commerce May 24
rule:
In Sec. 772.1 (Definitions of terms as used in the Export
Administration Regulations), this final rule adds a definition of
``complete breech mechanisms.'' The new definition specifies that this
is a mechanism for opening and closing the breech of a breech-loading
firearm, especially of a heavy-caliber weapon. As a conforming change,
this final rule also adds double quotation marks around the term where
it is used in ECCNs 0A501 and 0A502.
Export Control Reform Act of 2018
On August 13, 2018, the President signed into law the John S.
McCain National Defense Authorization Act for Fiscal Year 2019, which
included the Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4801-
4852) that provides the legal basis for BIS's principal authorities and
serves as the authority under which BIS issues this rule. As set forth
in Section 1768 of ECRA, all delegations, rules, regulations, orders,
determinations, licenses, or other forms of administrative action that
have been made, issued, conducted, or allowed to become effective under
the Export Administration Act of 1979 (50 U.S.C. 4601 et seq.) (as in
effect prior to August 13, 2018 and as continued in effect pursuant to
the International Emergency Economic Powers Act (50 U.S.C. 1701 et
seq.) and Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp.,
p. 783 (2002), as amended by Executive Order 13637 of March 8, 2013, 78
FR 16129 (March 13, 2013), and as extended by the Notice of August 8,
2018, 83 FR 39871 (August 13, 2018)), or the Export Administration
Regulations, and are in effect as of August 13, 2018, shall continue in
effect according to their terms until modified, superseded, set aside,
or revoked under the authority of ECRA.
Executive Order Requirements
Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distribute impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This final rule has been designated a ``significant
regulatory action,'' although not economically significant, under
section 3(f) of Executive Order 12866. Although the items identified in
this final rule have been determined to no longer warrant ITAR control
by the President, the proliferation of such items has been identified
as a threat to domestic and international security if not classified
and controlled at the appropriate level under the EAR. Commerce
estimates that the combined effect of all rules to be published adding
items removed from the ITAR to the EAR will increase the number of
license applications to be submitted to BIS by approximately 30,000
annually.
This final rule does not contain policies with Federalism
implications as that term is defined under E.O. 13132.
To control these items under the EAR that no longer warrant ITAR
control, appropriate controls on the CCL needed to be included in the
Department of Commerce final rule. This includes creating new ECCNs and
revising certain existing ECCNs, as well as making other changes to the
EAR to control items that will be moved from these three USML
categories to the CCL once the section 38(f) notification process is
completed and a final rule is published and becomes effective. Adding
new controls and other requirements to the EAR imposes regulatory
burdens on exporters and some other parties involved with those items,
but compared to the burdens these exporters and other parties faced
under the ITAR, these regulatory burdens, including financial costs,
will be reduced significantly. The EAR is a more flexible regulatory
structure whereby the items can still be controlled appropriately, but
in a much more efficient way that will significantly reduce the burdens
on exporters and other parties compared to the regulatory burdens they
faced when the items were ``subject to the ITAR.'' Deregulatory does
not mean a decontrol of these items.
For those items in USML Categories I, II, and III that will move by
this rule to the CCL, BIS will be collecting the necessary information
using the form associated with OMB Control No. 0694-0088. BIS estimates
that this form takes approximately 43.8 minutes for a manual or
electronic submission. Using the State Department's estimate that
10,000 license applications annually will move from the USML to the CCL
and BIS's estimate in this final rule that 6,000 of the 10,000 license
applications will require licenses under the EAR, that constitutes a
burden of 4,380 hours for this collection under the EAR. Those
companies are currently using the State Department's forms associated
with OMB Control No. 1405-0003 for which the burden estimate is 1 hour
per submission, which for 10,000 applications results in a burden of
10,000 hours. Thus, subtracting the BIS burden hours of 4,380 from the
State Department burden hours of 10,000, the burden is reduced by 5,620
hours. The other 4,000 applicants may use license exceptions under the
EAR or the ``no license required'' designation, so these applicants
will not be required to submit license applications under the EAR.
In addition to the reduced burden hours of 5,620 hours, there will
also be direct cost savings to the State Department that will result
from the 10,000 license applications no longer being required under the
ITAR once these items are moved to the EAR. The Department of State
charges a registration fee to apply for a license under the ITAR.
Pursuant to the AECA, ITAR, and associated delegations of authority,
every person who engages in the business of brokering activities,
manufacturing, exporting, or temporarily importing any defense articles
or defense services must register with the Department of State and pay
a registration fee. The Department of State adopted the current fee
schedule to align the registration fees with the cost of licensing,
compliance, and other related activities. The Department of Commerce
will incur additional costs to administer these controls and process
license applications. However, the Department of Commerce does not
charge a registration fee to apply for a license under the EAR, and we
are unable to estimate the increase in costs to the Department of
Commerce to process the new license applications. Therefore, we are
unable to provide an estimate of the net change in resource costs to
the government from moving these items from the ITAR to the EAR. It is
the case, however, that the movement of these items from the ITAR will
result in a permanent and recurring direct transfer of $2,500,000 per
year from the government to the exporting public, less the increased
cost to taxpayers, because they will no longer
[[Page 4170]]
pay fees to the State Department for licenses and there is no fee
charged by the Department of Commerce to apply for a license.
Estimated Cost Savings
For purposes of E.O. 13771 of January 30, 2017 (82 FR 9339), the
Department of State and Department of Commerce final rules are expected
to be ``net deregulatory actions.'' The Department of Commerce has
conducted this analysis in close consultation with the Department of
State, because of how closely linked the two final rules are for the
regulated public and the burdens imposed under the U.S. export control
system.
E.O. 13771 and guidance provided to the agencies on interpreting
the intended scope of the E.O. do not use the term ``net deregulatory
action,'' but rather refer to deregulatory actions. As outlined above,
the Departments of State and Commerce final rules are closely linked
and are best viewed as a consolidated deregulatory action although
being implemented by two different agencies. Also, as noted above,
items may not be subject to both sets of regulations. Therefore, the
movement of a substantial number of items from the USML determined to
no longer warrant ITAR control to the CCL will result in a significant
reduction of regulatory burden for exporters and other persons involved
with such items that were previously ``subject to the ITAR.''
For purposes of E.O. 13771, the Departments of State and Commerce
have agreed to equally share the cost burden reductions that will
result from the publication of these two integral deregulatory actions.
The Department of State will receive 50% and the Department of Commerce
will receive 50% for purposes of calculating the deregulatory benefit
of these two integral actions.
Under this agreed formulation, the burden reductions will be
calculated as follows:
For purposes of the Department of Commerce, the ``net deregulatory
actions'' will result in a permanent and recurring cost savings of
$1,250,000 per year, and a reduction in burden hours by 2,810 hours.
The reduction in burden hours by 2,810 will result in an additional
cost savings of \1\ $126,281 to the exporting public. The total cost
savings will be $1,376,281 in present (2017) dollars. To allow for cost
comparisons under E.O. 13771, the value of these costs savings in 2016
dollars is $1,353,574. Assuming a 7% discount rate, the present value
of these cost savings in perpetuity is $19,336,771. Since the costs
savings of this rule are expected to be permanent and recurring, the
annualized value of these cost savings is also $1,353,574 in 2016
dollars.
---------------------------------------------------------------------------
\1\ The Department of Commerce used the Department of State's
estimate that the burden hour cost for completing a license
application is $44.94 per hour. Multiplied by the estimated burden
hour savings of 2,810 equals a cost savings to the public of
$126,281.
---------------------------------------------------------------------------
For purposes of the Department of State, the ``net deregulatory
actions'' will result in a permanent and recurring cost savings of
$1,250,000 per year, and a reduction in burden hours by 2,810 hours.
The reduction in burden hours by 2,810 will result in an additional
cost savings of $126,281 to the exporting public. The total cost
savings will be $1,376,281 in present (2017) dollars. To allow for cost
comparisons under E.O. 13771, the value of these costs savings in 2016
dollars is $1,353,574. Assuming a 7% discount rate, the present value
of these cost savings in perpetuity is $19,336,771. Since the costs
savings of this rule are expected to be permanent and recurring, the
annualized value of these cost savings is also $1,353,574 in 2016
dollars.
The Department of Commerce in the Commerce May 24 rule welcomed
comments from the public on the analysis under E.O. 13771 described
here. The Commerce May 24 rule noted that it would be helpful to
receive comments from companies that will no longer need to register
with the Department of State because the company only deals with items
under USML Category I, II, and/or III that will move to the CCL.
Comments were also encouraged on any of the other collections that may
be relevant for the items that will move from the USML to the CCL. The
Commerce May 24 rule also noted that it would be helpful to receive
data on Department of State forms that will no longer need to be
submitted.
Paperwork Reduction Act Requirements
Notwithstanding any other provision of law, no person may be
required to respond to or be subject to a penalty for failure to comply
with a collection of information, subject to the requirements of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless
that collection of information displays a currently valid OMB control
number.
This final regulation involves four collections currently approved
by OMB under these BIS collections and control numbers: Simplified
Network Application Processing System (control number 0694-0088), which
includes, among other things, license applications; License Exceptions
and Exclusions (control number 0694-0137); Import Certificates and End-
User Certificates (control number 0694-0093); Five Year Records
Retention Period (control number 0694-0096); and the U.S. Census Bureau
collection for the Automated Export System (AES) Program (control
number 0607-0152).
This final rule will affect the information collection, under
control number 0694-0088, associated with the multi-purpose application
for export licenses. This collection carries a burden estimate of 43.8
minutes for a manual or electronic submission for a burden of 31,833
hours. BIS believes that the combined effect of all rules to be
published adding items removed from the ITAR to the EAR will be an
increase in the number of license applications to be submitted by
approximately 30,000 annually, resulting in an increase in burden hours
of 21,900 (30,000 transactions at 43.8 minutes each) under this control
number. For those items in USML Categories I, II, and III that will
move by this rule to the CCL, the State Department estimates that
10,000 applicants annually will move from the USML to the CCL. BIS
estimates that 6,000 of the 10,000 applicants will require licenses
under the EAR, resulting in a burden of 4,380 hours under this control
number. Those companies are currently using the State Department's
forms associated with OMB Control No. 1405-0003 for which the burden
estimate is 1 hour per submission, which for 10,000 applications
results in a burden of 10,000 hours. Thus, subtracting the BIS burden
hours of 4,380 from the State Department burden hours of 10,000, the
burden will be reduced by 5,620 hours. (See the description above for
the E.O. 13771 analysis for additional information on the cost benefit
savings and designation of the two rules as ``net deregulatory
actions''.)
This final rule will also affect the information collection under
control number 0694-0137, addressing the use of license exceptions and
exclusions. Some parts and components formerly on the USML, and
``software'' and ``technology'' for firearms and their parts and
components formerly on the USML, will become eligible for License
Exception STA under this final rule. Additionally, test, inspection and
production equipment, and ``software'' and ``technology'' related to
those firearms and ``parts'' may become eligible for License Exception
STA. BIS believes that the increased use of License Exception STA
resulting from the combined effect of all rules to be
[[Page 4171]]
published adding items removed from the ITAR to the EAR will increase
the burden associated with control number 0694-0137 by about 23,858
hours (20,450 transactions at 1 hour and 10 minutes each).
BIS expects that this increase in burden as a result of the
increased use of License Exception STA will be more than offset by a
reduction in burden hours associated with approved collections related
to the ITAR. This final rule addresses controls on firearms and
``parts,'' production equipment and ``parts'' and related ``software''
and ``technology'' and specifically non-automatic and semi-automatic
firearms and their ``parts'' and ``parts,'' ``components,''
``attachments,'' and ``accessories'' that are used in both semi-
automatic and fully automatic firearms. BIS has made this determination
on the basis that with few exceptions, the ITAR allows exemptions from
license requirements only for exports to Canada, and requires a
specific State Department authorization for most exports of firearms
used for hunting and recreational purposes and exports of ``parts,''
``components,'' ``attachments,'' and ``accessories'' that are common to
military fully automatic firearms and their semi-automatic civilian
counterparts, even when destined to NATO and other close allies and
also requires State Department authorization for the exports necessary
to produce ``parts'' and ``components'' for defense articles in the
inventories of the United States and its NATO and other close allies.
However, under the EAR, as specified in this final rule, a number of
low-level parts will be eligible for export under License Exception STA
and will therefore not require a license to such destinations.
This final rule will also affect the information collection under
control number 0694-0096, for the five-year recordkeeping retention
because of two changes this rule will make to part 762 of the EAR. This
rule adds a new paragraph (a)(11) to Sec. 762.2 to specify the
following information must be kept as an EAR record: Serial number,
make, model, and caliber for any firearm controlled in ECCN 0A501.a and
for shotguns with barrel length less than 18 inches controlled in
0A502. This rule will also require warranty certificates for these
items to be retained for EAR recordkeeping. However, because these
records are already created and kept as part of normal business
recordkeeping, this expansion is not anticipated to create any new or
increased burden under the EAR.
Even in situations in which a license will be required under the
EAR, the burden will likely be reduced compared to a license
requirement under the ITAR. In particular, license applications for
exports of ``technology'' controlled by ECCN 0E501 will likely be less
complex and burdensome than the authorizations required to export ITAR-
controlled technology, i.e., Manufacturing License Agreements and
Technical Assistance Agreements (as a result of the differences in the
scope of the ITAR's and the EAR's technology controls).
This final rule will affect the information collection under
control number 0694-0093, import certificates and end-user certificates
because of the changes included in this final rule. First, this
regulation will require that for shipments requiring a license of
firearms, ``parts,'' ``components,'' ``accessories,'' and
``attachments'' controlled under ECCN 0A501, the exporter must obtain a
copy of the import certificate or permit if the importing country
requires one for importing firearms. License applications for which an
import or end-user certificate is already required under Sec. 748.12
of the EAR will not be subject to this new requirement. BIS expects
that this requirement will result in no change in the burden under
control number 0694-0093. Second, this final rule also will require
that prior to departure, travelers leaving the United States and
intending to temporarily export firearms, parts, and components
controlled under ECCN 0A501 under License Exception BAG declare the
firearms and parts to a CBP officer and present the firearms and parts
to the CBP officer for inspection. As the State Department also
requires that persons temporarily exporting firearms, parts, and
components declare the items to CBP, BIS does not expect that the
requirement in this final rule will result in a change in burden under
control number 0694-0093.
Third, this final rule will affect the information collection under
control number 0694-0093 by creating a new temporary import entry
clearance requirement by adding Sec. 758.10. This new section will be
limited to items in this rule that are both ``subject to the EAR'' and
on the United States Munitions Import List (USMIL) in 27 CFR 447.21. To
allow such items to temporarily enter the U.S., this rule implements a
process to collect identifying information for the sole purpose of
tracking items being temporarily imported for subsequent export under
License Exceptions TMP, RPL, and BIS licenses. BIS will not impose a
license requirement for such imports, but collecting this information
will be necessary to facilitate the export after a temporary import.
The temporary import entry clearance requirement in Sec. 758.10 will
also conform to the requirements in License Exception TMP under Sec.
740.9(b)(5), License Exception RPL under Sec. 740.9(b)(4), and for BIS
licenses under paragraph (z) in Supplement No. 2 to part 748, so
providing this information to CBP at entry after a temporary import
will facilitate the export phase of a temporary import under License
Exceptions TMP, RPL and BIS licenses. At the time of entry for a
temporary import, the importer will need to provide a statement to CBP
indicating that this shipment was being temporarily imported in
accordance with the EAR for subsequent export in accordance with and
under the authority of License Exceptions TMP, RPL, or a BIS license.
The entry clearance requirement will be an EAR requirement and any
false representation made under the new Sec. 758.10 will be a
violation of the EAR. The importer will also need to provide CBP an
invoice or other appropriate import-related documentation (or
electronic equivalents) that includes a complete list and description
of the items being imported, including their model, make, caliber,
serial numbers, quantity, and U.S. dollar value. If imported for a
trade show, exhibition, demonstration, or testing, the temporary
importer will need to provide CBP with the relevant invitation or
registration documentation for the event and an accompanying letter
that details the arrangements to maintain effective control of the
firearms while they are temporarily in the United States. If imported
for servicing or replacement, the temporary importer will need to
provide CBP with the name, address and contact information (telephone
number and/or email) of the organization or individual in the U.S. that
will be receiving the item for servicing or replacement. Lastly, at the
time of exportation, upon request by CBP, the exporter, or an agent
acting on his or her behalf, will have to provide the entry document
number or a copy of the CBP document under which the ``item'' ``subject
to the EAR'' on the USMIL was temporarily imported under this entry
clearance requirement. As the State Department also requires that
persons temporarily importing items in this rule provide the same type
of information to CBP, BIS expects that the requirement in this final
rule will result in a change in burden under control number 0694-0093,
but because of the decrease under the burden imposed
[[Page 4172]]
under the State collection, the burden on the public will not change.
This final rule will also affect the information collection under
control number 0607-0152, for filing EEI in AES because of one change
this final rule makes to part 758 of the EAR. Under new Sec.
758.1(b)(9), EEI will be required for all exports of items controlled
under ECCNs 0A501.a or .b, shotguns with a barrel length less than 18
inches controlled under ECCN 0A502, or ammunition controlled under ECCN
0A505 except for .c, regardless of value or destination, including
exports to Canada. Exports of these USML firearms and ammunition prior
to moving to the CCL required filing EEI in AES for all items ``subject
to the ITAR,'' so the burden in this collection will not change for the
exporter.
This final rule includes a requirement that, for all exports of
temporary exports from the United States or when the license or other
approval contains a condition requiring all or some of this information
to be filed as EEI in AES of items controlled under ECCNs 0A501.a or
.b, or shotguns with a barrel length less than 18 inches controlled
under ECCN 0A502, in addition to any other required data for the
associated EEI filing requirements, the exporter must provide to CBP
the serial number, make, model, and caliber for each firearm being
exported. The Department of Commerce is carrying over the existing CBP
filing requirements for items transferred from the USML to the CCL. The
Department of Homeland Security currently is collecting these data
elements for firearms ``subject to the ITAR'' under OMB Control Number
1651-0010 (CBP Form 4457, Certificate of Registration for Personal
Effects Taken Abroad). There is no change to the information being
collected or to the burden hours as a result of this rule. Separate
from this rule, CBP will update the information collection to reflect
the use of AES or some other simplified electronic alternative to CBP
Form 4457.
Any comments regarding the collection of information associated
with this final rule, including suggestions for reducing the burden,
may be sent to Jasmeet K. Seehra, Office of Management and Budget
(OMB), by email to [email protected], or by fax to (202)
395-7285.
Administrative Procedure Act and Regulatory Flexibility Act
Requirements
Pursuant to section 1762 of the Export Control Reform Act of 2018
(Title XVII, Subtitle B of Pub. L. 115-232), which was included in the
John S. McCain National Defense Authorization Act for Fiscal Year 2019,
this action is exempt from the Administrative Procedure Act (APA) (5
U.S.C. 553) requirements for notice of proposed rulemaking, opportunity
for public participation, and delay in effective date.
Because a notice of proposed rulemaking and an opportunity for
public comment are not required to be given for this rule by the APA or
any other law, the analytical requirements of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq., are not applicable.
Accordingly, no regulatory flexibility analysis is required and none
has been prepared.
List of Subjects
15 CFR Parts 732, 740, and 748
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
15 CFR Part 734
Administrative practice and procedure, Exports, Inventions and
patents, Research, Science and technology.
15 CFR Parts 736 and 772
Exports.
15 CFR Part 742
Exports, Terrorism.
15 CFR Part 743
Administrative practice and procedure, Reporting and recordkeeping
requirements.
15 CFR Part 744
Exports, Reporting and recordkeeping requirements, Terrorism.
15 CFR Parts 746 and 774
Exports, Reporting and recordkeeping requirements.
15 CFR Part 758
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
15 CFR Part 762
Administrative practice and procedure, Business and industry,
Confidential business information, Exports, Reporting and recordkeeping
requirements.
For the reasons stated in the preamble, parts 732, 734, 736, 740,
742, 743, 744, 746, 748, 758, 762, 772, and 774 of the Export
Administration Regulations (15 CFR parts 730-774) are amended as
follows:
PART 732--STEPS FOR USING THE EAR
0
1. The authority citation for 15 CFR part 732 is revised to read as
follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p.
228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783.
0
2. Section 732.2 is amended by adding one sentence to the end of
paragraph (b) introductory text to read as follows:
Sec. 732.2 Steps regarding scope of the EAR.
* * * * *
(b) * * * The following also remains subject to the EAR:
``Software'' or ``technology'' for the production of a firearm, or
firearm frame or receiver, controlled under ECCN 0A501, as referenced
in Sec. 734.7(c) of the EAR).
* * * * *
PART 734--SCOPE OF THE EXPORT ADMINISTRATION REGULATIONS
0
3. The authority citation for 15 CFR part 734 is revised to read as
follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p.
950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026,
61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3
CFR, 2001 Comp., p. 783; E.O. 13637, 78 FR 16129, 3 CFR, 2014 Comp.,
p. 223; Notice of November 12, 2019, 84 FR 61817 (November 13,
2019).
0
4. Section 734.7 is amended by revising paragraph (a) introductory text
and adding paragraph (c) to read as follows:
Sec. 734.7 Published.
(a) Except as set forth in paragraphs (b) and (c) of this section,
unclassified ``technology'' or ``software'' is ``published,'' and is
thus not ``technology'' or ``software'' subject to the EAR, when it has
been made available to the public without restrictions upon its further
dissemination such as through any of the following:
* * * * *
(c) The following remains subject to the EAR: ``software'' or
``technology'' for the production of a firearm, or firearm frame or
receiver, controlled under ECCN 0A501, that is made available by
posting on the internet in an electronic format, such as AMF or G-code,
and is ready for insertion into a computer numerically controlled
machine tool, additive manufacturing equipment, or any other equipment
that makes use of the ``software'' or ``technology'' to
[[Page 4173]]
produce the firearm frame or receiver or complete firearm.
PART 736--GENERAL PROHIBITIONS
0
5. The authority citation for 15 CFR part 736 is revised to read as
follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p.
950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026,
61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3
CFR, 2001 Comp., p. 783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp.,
p. 168; Notice of May 8, 2019, 84 FR 20537 (May 10, 2019); Notice of
November 12, 2019, 84 FR 61817 (November 13, 2019).
0
6. Supplement No. 1 to part 736 is amended by revising paragraph (e)(3)
to read as follows:
Supplement No. 1 to Part 736--General Orders
* * * * *
(e) * * *
(3) Prior commodity jurisdiction determinations. If the U.S.
State Department has previously determined that an item is not
subject to the jurisdiction of the ITAR and the item was not listed
in a then existing ``018'' series ECCN (for purposes of the ``600
series'' ECCNs, or the 0x5zz ECCNs) or in a then existing ECCN
9A004.b or related software or technology ECCN (for purposes of the
9x515 ECCNs), then the item is per se not within the scope of a
``600 series'' ECCN, a 0x5zz ECCN, or a 9x515 ECCN. If the item was
not listed elsewhere on the CCL at the time of such determination
(i.e., the item was designated EAR99), the item shall remain
designated as EAR99 unless specifically enumerated by BIS or DDTC in
an amendment to the CCL or to the USML, respectively.
* * * * *
PART 740--LICENSE EXCEPTIONS
0
7. The authority citation for 15 CFR part 740 continues to read as
follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; 22 U.S.C. 7201 et seq.; E.O. 13026, 61 FR
58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR,
2001 Comp., p. 783.
0
8. Section 740.2 is amended by adding paragraphs (a)(21) and (22) to
read as follows:
Sec. 740.2 Restrictions on all License Exceptions.
(a) * * *
(21) The reexport or transfer (in-country) of firearms classified
under ECCNs 0A501 or 0A502 if a part or component that is not ``subject
to the ITAR,'' but would otherwise meet the criteria in USML Category
I(h)(2) (i.e., parts and components specially designed for conversion
of a semiautomatic firearm to a fully automatic firearm) is
incorporated into the firearm or is to be reexported or transferred
(in-country) with the firearm with ``knowledge'' the part or component
will be subsequently incorporated into the firearm. (See USML Category
I(h)(2)). In such instances, no license exceptions are available except
for License Exception GOV (Sec. 740.11(b)(2)(ii)).
(22) The export, reexport, or transfer (in-country) of any item
classified under a 0x5zz ECCN when a party to the transaction is
designated on the Department of the Treasury, Office of Foreign Assets
Control (OFAC), Specially Designated Nationals and Blocked Persons
(SDN) list under the designation [SDNT], pursuant to the Narcotics
Trafficking Sanctions Regulations, 31 CFR part 536, or under the
designation [SDNTK], pursuant to the Foreign Narcotics Kingpin
Sanctions Regulations, 31 CFR part 598.
* * * * *
0
9. Section 740.9 is amended by:
0
a. Adding five sentences at the end of paragraph (a) introductory text;
0
b. Adding one sentence at the end of paragraph (b)(1) introductory
text;
0
c. Adding paragraph (b)(5); and
0
d. Redesignating notes 1 through 3 to paragraph (b) as notes 2 through
4 to paragraph (b).
The additions read as follows:
Sec. 740.9 Temporary imports, exports, reexports, and transfers (in-
country) (TMP).
* * * * *
(a) * * * This paragraph (a) does not authorize any export of a
commodity controlled under ECCNs 0A501.a or .b, or shotguns with a
barrel length less than 18 inches controlled under ECCN 0A502 to, or
any export of such an item that was imported into the United States
from, a country in Country Group D:5 (Supplement No. 1 to this part),
or from Russia, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan,
Ukraine, or Uzbekistan. The only provisions of this paragraph (a) that
are eligible for use to export such items are paragraph (a)(5) of this
section (``Exhibition and demonstration'') and paragraph (a)(6) of this
section (``Inspection, test, calibration, and repair''). In addition,
this paragraph (a) may not be used to export more than 75 firearms per
shipment. In accordance with the requirements in Sec. 758.1(b)(9) and
(g)(4) of the EAR, the exporter or its agent must provide documentation
that includes the serial number, make, model, and caliber of each
firearm being exported by filing these data elements in an EEI filing
in AES. In accordance with the exclusions in License Exception TMP
under paragraph (b)(5) of this section, the entry clearance
requirements in Sec. 758.1(b)(9) do not permit the temporary import
of: Firearms controlled in ECCN 0A501.a or .b that are shipped from or
manufactured in a Country Group D:5 country, or that are shipped from
or manufactured in Russia, Georgia, Kazakhstan, Kyrgyzstan, Moldova,
Turkmenistan, Ukraine, or Uzbekistan (except for any firearm model
designation (if assigned) controlled by 0A501 that is specified under
Annex A in Supplement No. 4 to this part); or shotguns with a barrel
length less than 18 inches controlled in ECCN 0A502 that are shipped
from or manufactured in a Country Group D:5 country, or from Russia,
Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or
Uzbekistan, because of the exclusions in License Exception TMP under
paragraph (b)(5) of this section.
* * * * *
(b) * * *
(1) * * * No provision of paragraph (b) of this section, other than
paragraph (b)(3), (4), or (5), may be used to export firearms
controlled by ECCN 0A501.a, .b, or shotguns with a barrel length less
than 18 inches controlled in ECCN 0A502.
* * * * *
(5) Exports of firearms and certain shotguns temporarily in the
United States. This paragraph (b)(5) authorizes the export of no more
than 75 end item firearms per shipment controlled by ECCN 0A501.a or
.b, or shotguns with a barrel length less than 18 inches controlled in
ECCN 0A502 that are temporarily in the United States for a period not
exceeding one year, provided that:
(i) The firearms were not shipped from or manufactured in a U.S.
arms embargoed country, i.e., destination listed in Country Group D:5
in Supplement No. 1 to this part;
(ii) The firearms were not shipped from or manufactured in Russia,
Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or
Uzbekistan, except for any firearm model controlled by 0A501 that is
specified under Annex A in Supplement No. 4 to this part; and
(iii) The firearms are not ultimately destined to a U.S. arms
embargoed country, i.e., destination listed in Country Group D:5 in
Supplement No. 1 to this part, or to Russia;
(iv) When the firearms entered the U.S. as a temporary import, the
temporary importer or its agent:
(A) Provided the following statement to U.S. Customs and Border
Protection: ``This shipment will be exported in
[[Page 4174]]
accordance with and under the authority of License Exception TMP (15
CFR 740.9(b)(5))'';
(B) Provided to U.S. Customs and Border Protection an invoice or
other appropriate import-related documentation (or electronic
equivalents) that includes a complete list and description of the
firearms being temporarily imported, including their model, make,
caliber, serial numbers, quantity, and U.S. dollar value; and
(C) Provided (if temporarily imported for a trade show, exhibition,
demonstration, or testing) to U.S. Customs and Border Protection the
relevant invitation or registration documentation for the event and an
accompanying letter that details the arrangements to maintain effective
control of the firearms while they are in the United States; and
(v) In addition to the export clearance requirements of part 758 of
the EAR, the exporter or its agent must provide the import
documentation related to paragraph (b)(5)(iv)(B) of this section to
U.S. Customs and Border Protection at the time of export.
Note 1 to paragraph (b)(5): In addition to complying with all
applicable EAR requirements for the export of commodities described
in paragraph (b)(5) of this section, exporters and temporary
importers should contact U.S. Customs and Border Protection (CBP) at
the port of temporary import or export, or at the CBP website, for
the proper procedures for temporarily importing or exporting
firearms controlled in ECCN 0A501.a or .b or shotguns with a barrel
length less than 18 inches controlled in ECCN 0A502, including
regarding how to provide any data or documentation required by BIS.
* * * * *
0
10. Section 740.10 is amended by:
0
a. Adding one sentence at the end of paragraph (b)(1); and
0
b. Adding paragraph (b)(4).
The additions read as follows:
Sec. 740.10 License Exception Servicing and replacement of parts and
equipment (RPL).
* * * * *
(b) * * *
(1) * * * The export of firearms controlled by ECCN 0A501.a or .b,
or shotguns with a barrel length less than 18 inches controlled in ECCN
0A502 temporarily in the United States for servicing and replacement
may be exported under paragraph (b)(2) or (3) of this section only if
the additional requirements in paragraph (b)(4) of this section are
also met.
* * * * *
(4) This paragraph (b)(4) authorizes the export of firearms
controlled by ECCN 0A501.a or .b, or shotguns with a barrel length less
than 18 inches controlled in ECCN 0A502 that are temporarily in the
United States for servicing or replacement for a period not exceeding
one year or the time it takes to service or replace the commodity,
whichever is shorter, provided that the requirements of paragraph
(b)(2) or (3) of this section are met and:
(i) The firearms were not shipped from or manufactured in Russia,
Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or
Uzbekistan, except for any firearm model controlled by 0A501 that is
specified under Annex A in Supplement No. 4 to this part;
(ii) When the firearms entered the U.S. as a temporary import, the
temporary importer or its agent:
(A) Provided the following statement to U.S. Customs and Border
Protection: ``This shipment will be exported in accordance with and
under the authority of License Exception RPL (15 CFR 740.10(b))'';
(B) Provided to U.S. Customs and Border Protection an invoice or
other appropriate import-related documentation (or electronic
equivalents) that includes a complete list and description of the
firearms being temporarily imported, including their model, make,
caliber, serial numbers, quantity, and U.S. dollar value; and
(C) Provided (if temporarily imported for servicing or replacement)
to U.S. Customs and Border Protection the name, address and contact
information (telephone number and/or email) of the organization or
individual in the U.S. that will be receiving the item for servicing or
replacement; and
(iii) In addition to the export clearance requirements of part 758
of the EAR, the exporter or its agent must provide the import
documentation related to paragraph (b)(4)(iii)(B) of this section to
U.S. Customs and Border Protection at the time of export.
Note 1 to paragraph (b)(4): In addition to complying with all
applicable EAR requirements for the export of commodities described
in paragraph (b)(4) of this section, exporters and temporary
importers should contact U.S. Customs and Border Protection (CBP) at
the port of temporary import or export, or at the CBP website, for
the proper procedures for temporarily importing or exporting
firearms controlled in ECCN 0A501.a or .b or shotguns with a barrel
length less than 18 inches controlled in ECCN 0A502, including
regarding how to provide any data or documentation required by BIS.
* * * * *
0
11. Section 740.11 is amended by:
0
a. Adding two sentences at the end of the introductory text;
0
b. Adding note 2 to paragraph (b)(2); and
0
c. Redesignating note 1 to paragraph (c)(1) as note 3 to paragraph
(c)(1) and notes 1 and 2 to paragraph (e) as notes 4 and 5 to paragraph
(e).
The additions read as follows:
Sec. 740.11 Governments, international organizations, international
inspections under the Chemical Weapons Convention, and the
International Space Station (GOV).
* * * Commodities listed in ECCN 0A501 are eligible only for
transactions described in paragraphs (b)(2)(i) and (ii) of this
section. Any item listed in a 0x5zz ECCN for export, reexport, or
transfer (in-country) to an E:1 country is eligible only for
transactions described in paragraphs (b)(2)(i) and (ii) solely for U.S.
Government official use of this section.
* * * * *
Note 2 to paragraph (b)(2): Items controlled for NS, MT, CB, NP,
FC, or AT reasons may not be exported, reexported, or transferred
(in-country) to, or for the use of military, police, intelligence
entities, or other sensitive end users (e.g., contractors or other
governmental parties performing functions on behalf of military,
police, or intelligence entities) of a government in a Country Group
E:1 or E:2 country.
* * * * *
0
12. Section 740.14 is amended by revising paragraph (b)(4) introductory
text and paragraph (e) heading and adding paragraphs (e)(3) and (4) to
read as follows:
Sec. 740.14 Baggage (BAG).
* * * * *
(b) * * *
(4) Tools of trade. Usual and reasonable kinds and quantities of
tools, instruments, or equipment and their containers and also
technology for use in the trade, occupation, employment, vocation, or
hobby of the traveler or members of the household who are traveling or
moving. For special provisions regarding firearms and ammunition, see
paragraph (e) of this section. For special provisions regarding
encryption commodities and software subject to EI controls, see
paragraph (f) of this section. For a special provision that specifies
restrictions regarding the export or reexport of technology under this
paragraph (b)(4), see paragraph (g) of this section. For special
provisions regarding personal protective equipment under ECCN 1A613.c
or .d, see paragraph (h) of this section.
* * * * *
(e) Special provisions for firearms and ammunition. * * *
(3) A United States citizen or a permanent resident alien leaving
the
[[Page 4175]]
United States may export under this License Exception firearms,
``parts,'' ``components,'' ``accessories,'' or ``attachments''
controlled under ECCN 0A501 and ammunition controlled under ECCN
0A505.a, subject to the following limitations:
(i) Not more than three firearms and 1,000 rounds of ammunition may
be taken on any one trip.
(ii) ``Parts,'' ``components,'' ``accessories,'' and
``attachments'' exported pursuant to this paragraph (e)(3) must be of a
kind and limited to quantities that are reasonable for the activities
described in paragraph (e)(3)(iv) of this section or that are necessary
for routine maintenance of the firearms being exported.
(iii) The commodities must be with the person's baggage.
(iv) The commodities must be for the person's exclusive use and not
for resale or other transfer of ownership or control. Accordingly,
except as provided in paragraph (e)(4) of this section, firearms,
``parts,'' ``components,'' ``accessories,'' ``attachments,'' and
ammunition, may not be exported permanently under this License
Exception. All firearms, ``parts,'' ``components,'' ``accessories,'' or
``attachments'' controlled under ECCN 0A501 and all unused ammunition
controlled under ECCN 0A505.a exported under this License Exception
must be returned to the United States.
(v) Travelers leaving the United States temporarily are required to
declare the firearms, ``parts,'' ``components,'' ``accessories,''
``attachments,'' and ammunition being exported under this License
Exception to a Customs and Border Protection (CBP) officer prior to
departure from the United States and present such items to the CBP
officer for inspection, confirming that the authority for the export is
License Exception BAG and that the exporter is compliant with its
terms.
(4) A nonimmigrant alien leaving the United States may export or
reexport under this License Exception only such firearms controlled
under ECCN 0A501 and ammunition controlled under ECCN 0A505 as he or
she brought into the United States under the relevant provisions of
Department of Justice regulations at 27 CFR part 478.
* * * * *
0
13. Section 740.16 is amended by revising paragraphs (a)(2) and
(b)(2)(iv) and (v) and adding paragraph (b)(2)(vi) to read as follows:
Sec. 740.16 Additional permissive reexports (APR).
* * * * *
(a) * * *
(2) The commodities being reexported are not controlled for NP, CB,
MT, SI, or CC reasons or described in ECCNs 0A919, 3A001.b.2 or b.3
(except those that are being reexported for use in civil
telecommunications applications), 6A002, 6A003; or commodities
classified under a 0x5zz ECCN; and
* * * * *
(b) * * *
(2) * * *
(iv) Commodities described in ECCN 0A504 that incorporate an image
intensifier tube;
(v) Commodities described in ECCN 6A002; or
(vi) Commodities classified under a 0x5zz ECCN.
* * * * *
0
14. Section 740.20 is amended by revising paragraph (b)(2)(ii) to read
as follows:
Sec. 740.20 License Exception Strategic Trade Authorization (STA).
* * * * *
(b) * * *
(2) * * *
(ii) License Exception STA may not be used for:
(A) Any item controlled in ECCNs 0A501.a, .b, .c, .d, or .e; 0A981;
0A982; 0A983; 0A503; 0E504; 0E982; or
(B) Shotguns with barrel length less than 18 inches controlled in
0A502.
* * * * *
0
15. Add Supplement No. 4 to part 740 to read as follows:
Supplement No. 4 to Part 740--Annex A Firearm Models
(a) Pistols/revolvers.
(1) German Model P08 Pistol = SMCR.
(2) IZH 34M, .22 Target pistol.
(3) IZH 35M, .22 caliber Target pistol.
(4) Mauser Model 1896 pistol = SMCR.
(5) MC-57-1 pistol.
(6) MC-1-5 pistol.
(7) Polish Vis Model 35 pistol = SMCR.
(8) Soviet Nagant revolver = SMCR.
(9) TOZ 35, .22 caliber Target pistol.
(10) MTs 440.
(11) MTs 57-1.
(12) MTs 59-1.
(13) MTs 1-5.
(14) TOZ-35M (starter pistol).
(15) Biathlon-7K.
(b) Rifles.
(1) BARS-4 Bolt Action carbine.
(2) Biathlon target rifle, .22.
(3) British Enfield rifle = SMCR.
(4) CM2, .22 target rifle (also known as SM2, .22).
(5) German model 98K = SMCR.
(6) German model G41 = SMCR.
(7) German model G43 = SMCR.
(8) IZH-94.
(9) LOS-7, bolt action.
(10) MC-7-07.
(11) MC-18-3.
(12) MC-19-07.
(13) MC-105-01.
(14) MC-112-02.
(15) MC-113-02.
(16) MC-115-1.
(17) MC-125/127.
(18) MC-126.
(19) MC-128.
(20) Saiga.
(21) Soviet Model 38 carbine = SMCR.
(22) Soviet Model 44 carbine = SMCR.
(23) Soviet Model 91/30 rifle = SMCR.
(24) TOZ 18, .22 bolt action.
(25) TOZ 55.
(26) TOZ 78.
(27) Ural Target, .22lr.
(28) VEPR rifle.
(29) Winchester Model 1895, Russian Model rifle = SMCR.
(30) Sever--double barrel.
(31) IZH18MH single barrel break action.
(32) MP-251 over/under rifle.
(33) MP-221 double barrel rifle.
(34) MP-141K.
(35) MP-161K.
(36) MTs 116-1.
(37) MTs 116M.
(38) MTs 112-02.
(39) MTs 115-1.
(40) MTs 113-02.
(41) MTs 105-01.
(42) MTs 105-05.
(43) MTs 7-17 combination gun.
(44) MTs 7-12-07 rifle/shotgun.
(45) MTs 7-07.
(46) MTs 109-12-07 rifle.
(47) MTs 109-07 rifle.
(48) MTs 106-07 combination.
(49) MTs 19-97.
(50) MTs 19-09.
(51) MTs 18-3M.
(52) MTs 125.
(53) MTs 126.
(54) MTs 127.
(55) Berkut-2.
(56) Berkut-2M1.
(57) Berkut-3.
(58) Berkut-2-1.
(59) Berkut-2M2.
(60) Berkut-3-1.
(61) Ots-25.
(62) MTs 20-07.
(63) LOS-7-1.
(64) LOS-7-2.
(65) LOS-9-1.
(66) Sobol (Sable).
(67) Rekord.
(68) Bars-4-1.
(69) Saiga.
(70) Saiga-M.
(71) Saiga 308.
(72) Saiga-308-1.
(73) Saiga 308-2.
(74) Saiga-9.
(75) Korshun.
(76) Ural-5-1.
(77) Ural 6-1.
(78) Ural-6-2.
(79) SM-2.
(80) Biatlon-7-3.
(81) Biatlon-7-4.
(82) Rekord-1.
(83) Rekord-2.
(84) Rekord-CISM.
(85) Rekord-1-308.
(86) Rekord-2-308.
(87) Rekord-1-308-CISM.
[[Page 4176]]
(88) VEPR.
(89) VEPR Super.
(90) VEPR Pioneer.
(91) VEPR Safari.
(92) TOZ 109.
(93) KO 44-1.
(94) TOZ 78-01.
(95) KO 44.
(96) TOZ 99.
(97) TOZ 99-01.
(98) TOZ 55-01 Zubr.
(99) TOZ 55-2 Zubr.
(100) TOZ 120 Zubr.
(101) MTs 111.
(102) MTs 109.
(103) TOZ 122.
(104) TOZ 125.
(105) TOZ 28.
(106) TOZ 300.
PART 742--CONTROL POLICY--CCL BASED CONTROLS
0
16. The authority citation for part 742 is revised to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22
U.S.C. 7201 et seq.; 22 U.S.C. 7210; Sec. 1503, Pub. L. 108-11, 117
Stat. 559; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O.
12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR
59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR,
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783; Presidential Determination 2003-23, 68 FR 26459, 3 CFR, 2004
Comp., p. 320; Notice of November 12, 2019, 84 FR 61817 (November
13, 2019).
0
17. Section 742.6 is amended by revising the first and sixth sentences
of paragraph (b)(1)(i) and adding a seventh sentence at the end of
paragraph (b)(1)(i) to read as follows:
Sec. 742.6 Regional stability.
* * * * *
(b) * * *
(1) * * *
(i) Applications for exports and reexports of ECCN 0A501, 0A504,
0A505, 0B501, 0B505, 0D501, 0D505, 0E501, 0E504, and 0E505 items; 9x515
items and ``600 series'' items and will be reviewed on a case-by-case
basis to determine whether the transaction is contrary to the national
security or foreign policy interests of the United States, including
the foreign policy interest of promoting the observance of human rights
throughout the world. * * * When destined to the People's Republic of
China or a country listed in Country Group E:1 in Supplement No. 1 to
part 740 of the EAR, items classified under ECCN 0A501, 0A505, 0B501,
0B505, 0D501, 0D505, 0E501, 0E504, and 0E505 or any 9x515 ECCN will be
subject to a policy of denial. In addition, applications for exports
and reexports of ECCN 0A501, 0A505, 0B501, 0B505, 0D501, 0D505, 0E501,
0E504, and 0E505 items when there is reason to believe the transaction
involves criminal organizations, rebel groups, street gangs, or other
similar groups or individuals, that may be disruptive to regional
stability, including within individual countries, will be subject to a
policy of denial.
* * * * *
0
18. Section 742.7 is amended by revising paragraphs (a)(1) through (4)
and (c) to read as follows:
Sec. 742.7 Crime control and detection.
(a) * * *
(1) Crime control and detection instruments and equipment and
related ``technology'' and ``software'' identified in the appropriate
ECCNs on the CCL under CC Column 1 in the Country Chart column of the
``License Requirements'' section. A license is required to countries
listed in CC Column 1 (Supplement No. 1 to part 738 of the EAR). Items
affected by this requirement are identified on the CCL under the
following ECCNs: 0A502, 0A504, 0A505.b, 0A978, 0A979 0E502, 0E505
(``technology'' for ``development'' or for ``production'' of buckshot
shotgun shells controlled under ECCN 0A505.b), 1A984, 1A985, 3A980,
3A981, 3D980, 3E980, 4A003 (for fingerprint computers only), 4A980,
4D001 (for fingerprint computers only), 4D980, 4E001 (for fingerprint
computers only), 4E980, 6A002 (for police-model infrared viewers only),
6E001 (for police-model infrared viewers only), 6E002 (for police-model
infrared viewers only), and 9A980.
(2) Shotguns with a barrel length greater than or equal to 24
inches, identified in ECCN 0A502 on the CCL under CC Column 2 in the
Country Chart column of the ``License Requirements'' section regardless
of end user to countries listed in CC Column 2 (Supplement No. 1 to
part 738 of the EAR).
(3) Shotguns with barrel length greater than or equal to 24 inches,
identified in ECCN 0A502 on the CCL under CC Column 3 in the Country
Chart column of the ``License Requirements'' section only if for sale
or resale to police or law enforcement entities in countries listed in
CC Column 3 (Supplement No. 1 to part 738 of the EAR).
(4) Certain crime control items require a license to all
destinations, except Canada. These items are identified under ECCNs
0A982, 0A503, and 0E982. Controls for these items appear in each ECCN;
a column specific to these controls does not appear in the Country
Chart (Supplement No. 1 to part 738 of the EAR).
* * * * *
(c) Contract sanctity. Contract sanctity date: August 22, 2000.
Contract sanctity applies only to items controlled under ECCNs 0A982,
0A503, and 0E982 destined for countries not listed in CC Column 1 of
the Country Chart (Supplement No. 1 to part 738 of the EAR).
* * * * *
0
19. Section 742.17 is amended by revising the first sentence of
paragraph (a) and paragraph (f) to read as follows:
Sec. 742.17 Exports of firearms to OAS member countries.
(a) License requirements. BIS maintains a licensing system for the
export of firearms and related items to all OAS member countries. * * *
* * * * *
(f) Items/Commodities. Items requiring a license under this section
are ECCNs 0A501 (except 0A501.y), 0A502, 0A504 (except 0A504.f), and
0A505 (except 0A505.d). (See Supplement No. 1 to part 774 of the EAR).
* * * * *
Sec. 742.19 [Amended]
0
20. Section 742.19(a)(1) is amended by:
0
a. Removing ``0A986'' and adding in its place ``0A505.c''; and
0
b. Removing ``0B986'' and adding in its place ``0B505.c''.
PART 743--SPECIAL REPORTING AND NOTIFICATION
0
21. The authority citation for 15 CFR part 743 is revised to read as
follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783; E.O. 13637, 78 FR 16129, 3 CFR, 2014 Comp., p. 223.
0
22. Section 743.4 is amended by:
0
a. In paragraph (a):
0
i. Removing ``(c)(1)'' and ``(c)(2)'' and adding in their places
``(c)(1) of this section'' and ``(c)(2) of this section,''
respectively; and
0
ii. Adding four sentences to the end of the paragraph;
0
b. Redesignating the note to paragraph (a) as note 1 to paragraph (a)
and removing ``Sec. 743.4'' in newly redesignated note 1 and adding
``this section'' in its place;
0
c. Revising paragraph (b) introductory text;
0
d. Adding paragraphs (c)(1)(i) and (c)(2)(i);
0
e. Redesignating the note to paragraph (e)(1)(ii) as note 2 to
paragraph (e)(1)(ii);
[[Page 4177]]
0
e. Revising paragraph (h); and
0
f. Adding paragraph (i).
The additions and revisions read as follows:
Sec. 743.4 Conventional arms reporting.
(a) * * * This section does not require reports when the exporter
uses the alternative submission method described under paragraph (h) of
this section. The alternative submission method under paragraph (h)
requires the exporter to submit the information required for
conventional arms reporting in this section as part of the required EEI
submission in AES, pursuant to Sec. 758.1(b)(9) of the EAR. Because of
the requirements in Sec. 758.1(g)(4)(ii) of the EAR for the firearms
that require conventional arms reporting of all conventional arms, the
Department of Commerce believes all conventional arms reporting
requirements for firearms will be met by using the alternative
submission method. The Department of Commerce leaves standard method
for submitting reports in place in case any additional items are moved
from the USML to the CCL, that may require conventional arms reporting.
* * * * *
(b) Requirements. You must submit one electronic copy of each
report required under the provisions of this section, or submit this
information using the alternative submission method specified in
paragraph (h) of this section, and maintain accurate supporting records
(see Sec. 762.2(b) of the EAR) for all exports of items specified in
paragraph (c) of this section for the following:
* * * * *
(c) * * *
(1) * * *
(i) ECCN 0A501.a and .b.
* * * * *
(2) * * *
(i) ECCN 0A501.a and .b.
* * * * *
(h) Alternative submission method. This paragraph (h) describes an
alternative submission method for meeting the conventional arms
reporting requirements of this section. The alternative submission
method requires the exporter, when filing the required EEI submission
in AES, pursuant to Sec. 758.1(b)(9) of the EAR, to include the six
character ECCN classification (i.e., 0A501.a or 0A501.b) as the first
text to appear in the Commodity description block. If the exporter
properly includes this information in the EEI filing in AES, the
Department of Commerce will be able to obtain that export information
directly from AES to meet the U.S. Government's commitments to the
Wassenaar Arrangement and United Nations for conventional arms
reporting. An exporter that complies with the requirements in Sec.
758.1(g)(4)(ii) of the EAR does not have to submit separate annual and
semi-annual reports to the Department of Commerce pursuant to this
section.
(i) Contacts. General information concerning the Wassenaar
Arrangement and reporting obligations thereof is available from the
Office of National Security and Technology Transfer Controls, Tel.:
(202) 482-0092, Fax: (202) 482-4094. Information concerning the
reporting requirements for items identified in paragraphs (c)(1) and
(2) of this section is available from the Office of Nonproliferation
and Treaty Compliance (NPTC), Tel.: (202) 482-4188, Fax: (202) 482-
4145.
PART 744--CONTROL POLICY: END-USER AND END-USE BASED
0
23. The authority citation for 15 CFR part 744 is revised to read as
follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR,
1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p.
608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026,
61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3
CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp.,
p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice
of September 19, 2019, 83 FR 49633 (September 20, 2019); Notice of
November 12, 2019, 84 FR 61817 (November 13, 2019).
Sec. 744.9 [Amended]
0
24. Section 744.9 is amended by removing ``0A987'' from paragraphs
(a)(1) introductory text and (b) and adding in its place ``0A504''.
PART 746--EMBARGOES AND OTHER SPECIAL CONTROLS
0
25. The authority citation for 15 CFR part 746 continues to read as
follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; 22 U.S.C. 287c; Sec 1503, Pub. L. 108-11, 117
Stat. 559; 22 U.S.C. 2151 note; 22 U.S.C. 6004; 22 U.S.C. 7201 et
seq.; 22 U.S.C. 7210; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., p.
614; E.O. 12918, 59 FR 28205, 3 CFR, 1994 Comp., p. 899; E.O. 13222,
66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13338, 69 FR 26751, 3
CFR, 2004 Comp., p 168; Presidential Determination 2003-23, 68 FR
26459, 3 CFR, 2004 Comp., p. 320; Presidential Determination 2007-7,
72 FR 1899, 3 CFR, 2006 Comp., p. 325; Notice of May 8, 2019, 84 FR
20537 (May 10, 2019).
Sec. 746.3 [Amended]
0
26. Section 746.3 is amended by removing ``0A986'' from paragraph
(b)(2) and adding in its place ``0A505.c''.
Sec. 746.7 [Amended]
0
27. Section 746.7(a)(1) is amended by:
0
a. Adding ``0A503,'' immediately before ``0A980''; and
0
b. Removing ``0A985,''.
PART 748--APPLICATIONS (CLASSIFICATION, ADVISORY, AND LICENSE) AND
DOCUMENTATION
0
28. The authority citation for 15 CFR part 748 is revised to read as
follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p.
228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783.
0
29. Section 748.12 is amended by:
0
a. Revising the section heading;
0
b. Adding introductory text;
0
c. Revising paragraphs (a) introductory text and (a)(1);
0
d. Redesignating the note to paragraph (c)(8) as note 1 to paragraph
(c)(8); and
0
e. Adding paragraph (e).
The revisions and additions read as follows.
Sec. 748.12 Firearms import certificate or import permit.
License applications for certain firearms and related commodities
require support documents in accordance with this section. For
destinations that are members of the Organization of American States
(OAS), an FC Import Certificate or equivalent official document is
required in accordance with paragraphs (a) through (d) of this section.
For other destinations that require a firearms import or permit, the
firearms import certificate or permit is required in accordance with
paragraph (e) of this section.
(a) Requirement to obtain document for OAS member states. Unless an
exception in Sec. 748.9(c) applies, an FC Import Certificate is
required for license applications for firearms and related commodities,
regardless of value, that are destined for member countries of the OAS.
This requirement is consistent with the OAS Model Regulations described
in Sec. 742.17 of the EAR.
(1) Items subject to requirement. Firearms and related commodities
are those commodities controlled for ``FC Column 1'' reasons under
ECCNs 0A501 (except 0A501.y), 0A502, 0A504 (except 0A504.f), or 0A505
(except 0A505.d).
* * * * *
(e) Requirement to obtain an import certificate or permit for other
than OAS member states. If the country to which
[[Page 4178]]
firearms, parts, components, accessories, and attachments controlled
under ECCN 0A501, or ammunition controlled under ECCN 0A505, are being
exported or reexported requires that a government-issued certificate or
permit be obtained prior to importing the commodity, the exporter or
reexporter must obtain and retain on file the original or a copy of
that certificate or permit before applying for an export or reexport
license unless:
(1) A license is not required for the export or reexport; or
(2) The exporter is required to obtain an import or end-user
certificate or other equivalent official document pursuant to
paragraphs (a) thorough (d) of this section and has, in fact, complied
with that requirement.
(3)(i) The number or other identifying information of the import
certificate or permit must be stated on the license application.
(ii) If the country to which the commodities are being exported
does not require an import certificate or permit for firearms imports,
that fact must be noted on any license application for ECCN 0A501 or
0A505 commodities.
Note 2 to paragraph (e). Obtaining a BIS Statement by Ultimate
Consignee and Purchaser pursuant to Sec. 748.11 does not exempt the
exporter or reexporter from the requirement to obtain a
certification pursuant to paragraph (a) of this section because that
statement is not issued by a government.
0
30. Supplement No. 2 to part 748 is amended by adding paragraph (z) to
read as follows:
Supplement No. 2 to Part 748--Unique Application and Submission
Requirements
* * * * *
(z) Exports of firearms and certain shotguns temporarily in the
United States--(1) Certification. If you are submitting a license
application for the export of firearms controlled by ECCN 0A501.a or
.b, or shotguns with a barrel length less than 18 inches controlled
in ECCN 0A502 that will be temporarily in the United States, e.g.,
for servicing and repair or for intransit shipments, you must
include the following certification in Block 24:
The firearms in this license application will not be shipped
from or manufactured in Russia, Georgia, Kazakhstan, Kyrgyzstan,
Moldova, Turkmenistan, Ukraine, or Uzbekistan, except for any
firearm model controlled by 0A501 that is specified under Annex A in
Supplement No. 4 to part 740. I and the parties to this transaction
will comply with the requirements specified in paragraphs (z)(2)(i)
and (ii) of Supplement No. 2 to part 748.
(2) Requirements. Each approved license for commodities
described under this paragraph (z) must comply with the requirements
specified in paragraphs (z)(2)(i) and (ii) of this supplement.
(i) When the firearms enter the U.S. as a temporary import, the
temporary importer or its agent must:
(A) Provide the following statement to U.S. Customs and Border
Protection: ``This shipment is being temporarily imported in
accordance with the EAR. This shipment will be exported in
accordance with and under the authority of BIS license number
(provide the license number) (15 CFR 750.7(a) and 758.4);''
(B) Provide to U.S. Customs and Border Protection an invoice or
other appropriate import-related documentation (or electronic
equivalents) that includes a complete list and description of the
firearms being temporarily imported, including their model, make,
caliber, serial numbers, quantity, and U.S. dollar value; and
(C) Provide (if temporarily imported for servicing or
replacement) to U.S. Customs and Border Protection the name,
address, and contact information (telephone number and/or email) of
the organization or individual in the U.S. that will be receiving
the item for servicing or replacement); and
(ii) In addition to the export clearance requirements of part
758 of the EAR, the exporter or its agent must provide the import
documentation related to paragraph (z)(2)(i)(B) of this supplement
to U.S. Customs and Border Protection at the time of export.
Note 1 to paragraph (z): In addition to complying with all
applicable EAR requirements for the export of commodities described
in paragraph (z) of this supplement, exporters and temporary
importers should contact U.S. Customs and Border Protection (CBP) at
the port of temporary import or export, or at the CBP website, for
the proper procedures for temporarily importing or exporting
firearms controlled in ECCN 0A501.a or .b or shotguns with a barrel
length less than 18 inches controlled in ECCN 0A502, including
regarding how to provide any data or documentation required by BIS.
PART 758--EXPORT CLEARANCE REQUIREMENTS
0
31. The authority citation for part 758 is revised to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783.
0
32. Section 758.1 is amended by:
0
a. Revising paragraphs (b)(7) and (8);
0
b. Adding paragraph (b)(9);
0
c. Revising paragraph (c)(1);
0
d. Adding paragraph (g)(4); and
0
e. Redesignating note to paragraph (h)(1) as note 3 to paragraph
(h)(1).
The revisions and additions read as follows:
Sec. 758.1 The Electronic Export Enforcement (EEI) filing to the
Automated Export System (AES).
* * * * *
(b) * * *
(7) For all items exported under authorization Validated End-User
(VEU);
(8) For all exports of tangible items subject to the EAR where
parties to the transaction, as described in Sec. 748.5(d) through (f)
of the EAR, are listed on the Unverified List (Supplement No. 6 to part
744 of the EAR), regardless of value or destination; or
(9) For all exports, except for exports authorized under License
Exception BAG, as set forth in Sec. 740.14 of the EAR, of items
controlled under ECCNs 0A501.a or .b, shotguns with a barrel length
less than 18 inches controlled under ECCN 0A502, or ammunition
controlled under ECCN 0A505 except for .c, regardless of value or
destination, including exports to Canada.
(c) * * *
(1) License Exception Baggage (BAG), as set forth in Sec. 740.14
of the EAR. See 15 CFR 30.37(x) of the FTR;
Note 1 to paragraph (c)(1): See the export clearance
requirements for exports of firearms controlled under ECCNs 0A501.a
or .b, shotguns with a barrel length less than 18 inches controlled
under ECCN 0A502, or ammunition controlled under ECCN 0A505,
authorized under License Exception BAG, as set forth in Sec. 740.14
of the EAR.
* * * * *
(g) * * *
(4) Exports of firearms and related items. This paragraph (g)(4)
includes two separate requirements under paragraphs (g)(4)(i) and (ii)
of this section that are used to better identify exports of certain end
item firearms under the EAR. Paragraph (g)(4)(i) of this section is
limited to certain EAR authorizations. Paragraph (g)(4)(ii) of this
section applies to all EAR authorizations that require EEI filing in
AES.
(i) Identifying end item firearms by manufacturer, model, caliber,
and serial number in the EEI filing in AES. For any export authorized
under License Exception TMP or a BIS license authorizing a temporary
export of items controlled under ECCNs 0A501.a or .b, or shotguns with
a barrel length less than 18 inches controlled under ECCN 0A502, in
addition to any other required data for the associated EEI filing, you
must report the manufacturer, model, caliber, and serial number of the
exported items. The requirements of this paragraph (g)(4)(i) also apply
to any other export authorized under a BIS license that includes a
condition or proviso on the license requiring the submission of this
information specified in paragraph (g) of this section when the EEI is
filed in AES.
[[Page 4179]]
(ii) Identifying end item firearms by ``items'' level
classification or other control descriptor in the EEI filing in AES.
For any export of items controlled under ECCNs 0A501.a or .b, or
shotguns with a barrel length less than 18 inches controlled under ECCN
0A502, in addition to any other required data for the associated EEI
filing, you must include the six character ECCN classification (i.e.,
0A501.a, or 0A501.b), or for shotguns controlled under 0A502 the phrase
``0A501 barrel length less than 18 inches'' as the first text to appear
in the Commodity description block in the EEI filing in AES. (See Sec.
743.4(h) of the EAR for the use of this information for conventional
arms reporting).
Note 2 to paragraph (g)(4): If a commodity described in
paragraph (g)(4) of this section is exported under License Exception
TMP under Sec. 740.9(a)(6) of the EAR for inspection, test,
calibration, or repair is not consumed or destroyed in the normal
course of authorized temporary use abroad, the commodity must be
disposed of or retained in one of the ways specified in Sec.
740.9(a)(14)(i), (ii), or (iii) of the EAR. For example, if a
commodity described in paragraph (g)(4) was destroyed while being
repaired after being exported under Sec. 740.9(a)(6), the commodity
described in paragraph (g)(4) would not be required to be returned.
If the entity doing the repair returned a replacement of the
commodity to the exporter from the United States, the import would
not require an EAR authorization. The entity that exported the
commodity described in paragraph (g)(4) and the entity that received
the commodity would need to document this as part of their
recordkeeping related to this export and subsequent import to the
United States.
* * * * *
0
33. Add Sec. 758.10 to read as follows:
Sec. 758.10 Entry clearance requirements for temporary imports.
(a) Scope. This section specifies the temporary import entry
clearance requirements for firearms ``subject to the EAR'' that are on
the United States Munitions Import List (USMIL, 27 CFR 447.21), except
for firearms ``subject to the EAR'' that are temporarily brought into
the United States by nonimmigrant aliens under the provisions of
Department of Justice regulations at 27 CFR part 478 (See Sec.
740.14(e) of the EAR for information on the export of these firearms
``subject to the EAR''). These firearms are controlled in ECCN 0A501.a
or .b or shotguns with a barrel length less than 18 inches controlled
in ECCN 0A502. Items that are temporarily exported under the EAR must
have met the export clearance requirements specified in Sec. 758.1.
(1) An authorization under the EAR is not required for the
temporary import of ``items'' that are ``subject to the EAR,''
including for ``items'' ``subject to the EAR'' that are on the USMIL.
Temporary imports of firearms described in this section must meet the
entry clearance requirements specified in paragraph (b) of this
section.
(2) Permanent imports are regulated by the Attorney General under
the direction of the Department of Justice's Bureau of Alcohol,
Tobacco, Firearms and Explosives (see 27 CFR parts 447, 478, 479, and
555).
(b) EAR procedures for temporary imports and subsequent exports. To
the satisfaction of U.S. Customs and Border Protection, the temporary
importer must comply with the following procedures:
(1) At the time of entry into the U.S. of the temporary import:
(i) Provide one of the following statements specified in paragraph
(b)(1)(i)(A), (B), or (C) of this section to U.S. Customs and Border
Protection:
(A) ``This shipment is being temporarily imported in accordance
with the EAR. This shipment will be exported in accordance with and
under the authority of License Exception TMP (15 CFR 740.9(b)(5));''
(B) ``This shipment is being temporarily imported in accordance
with the EAR. This shipment will be exported in accordance with and
under the authority of License Exception RPL (15 CFR 740.10(b));'' or
(C) ``This shipment is being temporarily imported in accordance
with the EAR. This shipment will be exported in accordance with and
under the authority of BIS license number (provide the license number)
(15 CFR 750.7(a) and 758.4);''
(ii) Provide to U.S. Customs and Border Protection an invoice or
other appropriate import-related documentation (or electronic
equivalents) that includes a complete list and description of the
firearms being temporarily imported, including their model, make,
caliber, serial numbers, quantity, and U.S. dollar value;
(iii) Provide (if temporarily imported for a trade show,
exhibition, demonstration, or testing) to U.S. Customs and Border
Protection the relevant invitation or registration documentation for
the event and an accompanying letter that details the arrangements to
maintain effective control of the firearms while they are in the United
States; or
(iv) Provide (if temporarily imported for servicing or replacement)
to U.S. Customs and Border Protection the name, address and contact
information (telephone number and/or email) of the organization or
individual in the U.S. that will be receiving the item for servicing or
replacement).
Note 1 to paragraph (b)(1): In accordance with the exclusions in
License Exception TMP under Sec. 740.9(b)(5) of the EAR, the entry
clearance requirements in Sec. 758.1(b)(9) do not permit the
temporary import of: Firearms controlled in ECCN 0A501.a or .b that
are shipped from or manufactured in a Country Group D:5 country; or
that are shipped from or manufactured in Russia, Georgia,
Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or
Uzbekistan (except for any firearm model controlled by 0A501 that is
specified under Annex A in Supplement No. 4 to part 740 of the EAR);
or shotguns with a barrel length less than 18 inches controlled in
ECCN 0A502 that are shipped from or manufactured in a Country Group
D:5 country, or from Russia, Georgia, Kazakhstan, Kyrgyzstan,
Moldova, Turkmenistan, Ukraine, or Uzbekistan, because of the
exclusions in License Exception TMP under Sec. 740.9(b)(5).
Note 2 to paragraph (b)(1): In accordance with the exclusions
in License Exception RPL under Sec. 740.10(b)(4) and Supplement No.
2 to part 748, paragraph (z), of the EAR, the entry clearance
requirements in Sec. 758.1(b)(9) do not permit the temporary import
of: Firearms controlled in ECCN 0A501.a or .b that are shipped from
or manufactured in Russia, Georgia, Kazakhstan, Kyrgyzstan, Moldova,
Turkmenistan, Ukraine, or Uzbekistan (except for any firearm model
controlled by 0A501 that is specified under Annex A in Supplement
No. 4 to part 740 of the EAR); or shotguns with a barrel length less
than 18 inches controlled in ECCN 0A502 that are shipped from or
manufactured in Russia, Georgia, Kazakhstan, Kyrgyzstan, Moldova,
Turkmenistan, Ukraine, or Uzbekistan, because of the exclusions in
License Exception RPL under Sec. 740.10(b)(4) and Supplement No. 2
to part 748, paragraph (z), of the EAR.
(2) At the time of export, in accordance with the U.S. Customs and
Border Protection procedures, the eligible exporter, or an agent acting
on the filer's behalf, must as required under Sec. 758.1(b)(9) file
the export information with CBP by filing EEI in AES, noting the
applicable EAR authorization as the authority for the export, and
provide, upon request by CBP, the entry document number or a copy of
the CBP document under which the ``item'' subject to the EAR'' on the
USMIL was temporarily imported. See also the additional requirements in
Sec. 758.1(g)(4).
0
34. Add Sec. 758.11 to read as follows:
Sec. 758.11 Export clearance requirements for firearms and related
items.
(a) Scope. The export clearance requirements of this section apply
to all exports of commodities controlled under ECCNs 0A501.a or .b,
shotguns with a barrel length less than 18 inches controlled under ECCN
0A502, or
[[Page 4180]]
ammunition controlled under ECCN 0A505 except for .c, regardless of
value or destination, including exports to Canada, that are authorized
under License Exception BAG, as set forth in Sec. 740.14 of the EAR.
(b) Required form. Prior to making any export described in
paragraph (a) of this section, the exporter is required to submit a
properly completed Department of Homeland Security, CBP Form 4457,
(Certificate of Registration for Personal Effects Taken Abroad) (OMB
Control Number 1651-0010), to the U.S. Customs and Border Protection
(CBP), pursuant to 19 CFR 148.1, and as required by this section.
(1) Where to obtain the form? The CBP Certification of Registration
Form 4457 can be found on the following CBP website: https://www.cbp.gov/document/forms/form-4457-certificate-registration-personal-effects-taken-abroad.
(2) Required ``description of articles'' for firearms to be
included on the CBP Form 4457. For all exports of firearms controlled
under ECCNs 0A501.a or .b, or shotguns with a barrel length less than
18 inches controlled under ECCN 0A502, the exporter must provide to CBP
the serial number, make, model, and caliber for each firearm being
exported by entering this information under the ``Description of
Articles'' field of the CBP Form 4457, Certificate of Registration for
Personal Effects Taken Abroad.
(c) Where to find additional information on the CBP Form 4457? See
the following CBP website page for additional information: https://
help.cbp.gov/app/answers/detail/a_id/323/~/traveling-outside-of-the-
u.s.-temporarily-taking-a-firearm%2C-rifle%2C-gun%2C.
(d) Return of items exported pursuant to this section. The exporter
when returning with a commodity authorized under License Exception BAG
and exported pursuant this section, is required to present a copy of
the CBP Form 4457, Certificate of Registration for Personal Effects
Taken Abroad) (OMB Control Number 1651-0010), to CBP, pursuant to 19
CFR 148.1, and as required by this section.
PART 762--RECORDKEEPING
0
35. The authority citation for part 762 is revised to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783.
0
36. Section 762.2 is amended by removing ``and,'' at the end of
paragraph (a)(10), redesignating paragraph (a)(11) as paragraph
(a)(12), and adding a new paragraph (a)(11) to read as follows:
Sec. 762.2 Records to be retained.
(a) * * *
(11) The serial number, make, model, and caliber for any firearm
controlled in ECCN 0A501.a and for shotguns with barrel length less
than 18 inches controlled in 0A502 that have been exported. The
``exporter'' or any other party to the transaction (see Sec. 758.3 of
the EAR), that creates or receives such records is a person responsible
for retaining this record; and
* * * * *
0
37. Section 762.3 is amended by revising paragraph (a)(5) to read as
follows:
Sec. 762.3 Records exempt from recordkeeping requirements.
(a) * * *
(5) Warranty certificate, except for a warranty certificate issued
for an address located outside the United States for any firearm
controlled in ECCN 0A501.a and for shotguns with barrel length less
than 18 inches controlled in 0A502;
* * * * *
PART 772--DEFINITIONS OF TERMS
0
38. The authority citation for part 772 is revised to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783.
0
39. In Sec. 772.1:
0
a. The definition of ``Complete breech mechanisms'' is added in
alphabetical order; and
0
b. In the definition of ``Specially designed,'' note 1 is amended by
removing ``0B986'' and adding in its place ``0B505.c''.
The addition reads as follows:
Sec. 772.1 Definitions of terms as used in the Export Administration
Regulations (EAR).
* * * * *
Complete breech mechanisms. The mechanism for opening and closing
the breech of a breech-loading firearm, especially of a heavy-caliber
weapon.
* * * * *
PART 774--THE COMMERCE CONTROL LIST
0
40. The authority citation for 15 CFR part 774 is revised to read as
follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; 10 U.S.C. 8720; 10 U.S.C. 8730(e); 22 U.S.C.
287c, 22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; 42 U.S.C. 2139a; 15
U.S.C. 1824; 50 U.S.C. 4305; 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.
0
41. In Supplement No. 1 to part 774, Category 0, revise Export Control
Classification Number (ECCN) 0A018 to read as follows:
Supplement No. 1 to Part 774--The Commerce Control List
* * * * *
0A018 Items on the Wassenaar Munitions List (see List of Items
Controlled)
No items currently are in this ECCN. See ECCN 0A505 for
``parts'' and ``components'' for ammunition that, immediately prior
to March 9, 2020, were classified under 0A018.b.
0
42. In Supplement No. 1 to part 774, Category 0, add, between entries
for ECCNs 0A018 and 0A521, entries for ECCNs 0A501, 0A502, 0A503,
0A504, and 0A505 to read as follows:
0A501 Firearms (except 0A502 shotguns) and related commodities as
follows (see List of Items Controlled)
License Requirements
Reason for Control: NS, RS, FC, UN, AT
Country chart (see supp.
Control(s) No. 1 to part 738)
NS applies to entire entry except 0A501.y. NS Column 1
RS applies to entire entry except 0A501.y. RS Column 1
FC applies to entire entry except 0A501.y. FC Column 1
UN applies to entire entry................ See Sec. 746.1 of the EAR
for UN controls.
AT applies to entire entry................ AT Column 1
License Requirement Note: In addition to using the Commerce Country
Chart to determine license requirements, a license is required for
exports and reexports of ECCN 0A501.y.7 firearms to the People's
Republic of China.
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
LVS: $500 for 0A501.c, .d, and .x.
$500 for 0A501.c, .d, .e, and .x if the ultimate destination is
Canada.
GBS: N/A
CIV: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2)
of the EAR) may not be used for any item in this entry.
List of Items Controlled
Related Controls: (1) Firearms that are fully automatic, and
magazines with a capacity of greater than 50 rounds, are ``subject
to the ITAR.'' (2) See ECCN 0A502 for
[[Page 4181]]
shotguns and their ``parts'' and ``components'' that are subject to
the EAR. Also see ECCN 0A502 for shot-pistols. (3) See ECCN 0A504
and USML Category XII for controls on optical sighting devices.
Related Definitions: N/A.
Items:
a. Non-automatic and semi-automatic firearms equal to .50
caliber (12.7 mm) or less.
Note 1 to paragraph 0A501.a: `Combination pistols' are
controlled under ECCN 0A501.a. A `combination pistol' (a.k.a., a
combination gun) has at least one rifled barrel and at least one
smoothbore barrel (generally a shotgun style barrel).
b. Non-automatic and non-semi-automatic rifles, carbines,
revolvers or pistols with a caliber greater than .50 inches (12.7
mm) but less than or equal to .72 inches (18.0 mm).
c. The following types of ``parts'' and ``components'' if
``specially designed'' for a commodity controlled by paragraph .a or
.b of this entry, or USML Category I (unless listed in USML Category
I(g) or (h)): Barrels, cylinders, barrel extensions, mounting blocks
(trunnions), bolts, bolt carriers, operating rods, gas pistons,
trigger housings, triggers, hammers, sears, disconnectors, pistol
grips that contain fire control ``parts'' or ``components'' (e.g.,
triggers, hammers, sears, disconnectors) and buttstocks that contain
fire control ``parts'' or ``components.''
d. Detachable magazines with a capacity of greater than 16
rounds ``specially designed'' for a commodity controlled by
paragraph .a or .b of this entry.
Note 2 to paragraph 0A501.d: Magazines with a capacity of 16
rounds or less are controlled under 0A501.x.
e. Receivers (frames) and ``complete breech mechanisms,''
including castings, forgings stampings, or machined items thereof,
``specially designed'' for a commodity controlled by paragraph .a or
.b of this entry.
f. through w. [Reserved]
x. ``Parts'' and ``components'' that are ``specially designed''
for a commodity classified under paragraphs .a through .c of this
entry or the USML and not elsewhere specified on the USML or CCL.
y. Specific ``parts,'' ``components,'' ``accessories'' and
``attachments'' ``specially designed'' for a commodity subject to
control in this ECCN or common to a defense article in USML Category
I and not elsewhere specified in the USML or CCL as follows, and
``parts,'' ``components,'' ``accessories,'' and ``attachments''
``specially designed'' therefor.
y.1. Stocks or grips, that do not contain any fire control
``parts'' or ``components'' (e.g., triggers, hammers, sears,
disconnectors);''
y.2. Scope mounts or accessory rails;
y.3. Iron sights;
y.4. Sling swivels;
y.5. Butt plates or recoil pads;
y.6. Bayonets; and
y.7. Firearms manufactured from 1890 to 1898 and reproductions
thereof.
Technical Note 1 to 0A501: The controls on ``parts'' and
``components'' in ECCN 0A501 include those ``parts'' and
``components'' that are common to firearms described in ECCN 0A501
and to those firearms ``subject to the ITAR.''
Note 3 to 0A501: Antique firearms (i.e., those manufactured
before 1890) and reproductions thereof, muzzle loading black powder
firearms except those designs based on centerfire weapons of a post
1937 design, BB guns, pellet rifles, paint ball, and all other air
rifles are EAR99 commodities.
Note 4 to 0A501: Muzzle loading (black powder) firearms with a
caliber less than 20 mm that were manufactured later than 1937 that
are used for hunting or sporting purposes that were not ``specially
designed'' for military use and are not ``subject to the ITAR'' nor
controlled as shotguns under ECCN 0A502 are EAR99 commodities.
0A502 Shotguns; shotguns ``parts'' and ``components,'' consisting of
complete trigger mechanisms; magazines and magazine extension tubes;
``complete breech mechanisms;'' except equipment used exclusively to
treat or tranquilize animals, and except arms designed solely for
signal, flare, or saluting use.
License Requirements
Reason for Control: RS, CC, FC, UN, AT, NS
Country chart (see Supp.
Control(s) No. 1 to part 738)
NS applies to shotguns with a barrel NS Column 1
length less than 18 inches (45.72 cm).
RS applies to shotguns with a barrel RS Column 1
length less than 18 inches (45.72 cm).
FC applies to entire entry................ FC Column 1
CC applies to shotguns with a barrel CC Column 1
length less than 24 in. (60.96 cm) and
shotgun ``components'' controlled by this
entry regardless of end user.
CC applies to shotguns with a barrel CC Column 2
length greater than or equal to 24 in.
(60.96 cm), regardless of end user.
CC applies to shotguns with a barrel CC Column 3
length greater than or equal to 24 in..
(60.96 cm) if for sale or resale to police
or law enforcement.
UN applies to entire entry................ See Sec. 746.1(b) of the
EAR for UN controls
AT applies to shotguns with a barrel AT Column 1
length less than 18 inches (45.72 cm).
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
LVS: $500 for 0A502 shotgun ``parts'' and ``components,'' consisting
of complete trigger mechanisms; magazines and magazine extension
tubes.
$500 for 0A502 shotgun ``parts'' and ``components,'' consisting of
complete trigger mechanisms; magazines and magazine extension tubes,
``complete breech mechanisms'' if the ultimate destination is
Canada.
GBS: N/A
CIV: N/A
List of Items Controlled
Related Controls: Shotguns that are fully automatic are ``subject to
the ITAR.''
Related Definitions: N/A
Items: The list of items controlled is contained in the ECCN
heading.
Note 1 to 0A502: Shotguns made in or before 1898 are considered
antique shotguns and designated as EAR99.
Technical Note: Shot pistols or shotguns that have had the
shoulder stock removed and a pistol grip attached are controlled by
ECCN 0A502. Slug guns are also controlled under ECCN 0A502.
0A503 Discharge type arms; non-lethal or less-lethal grenades and
projectiles, and ``specially designed'' ``parts'' and ``components''
of those projectiles; and devices to administer electric shock, for
example, stun guns, shock batons, shock shields, electric cattle
prods, immobilization guns and projectiles; except equipment used
exclusively to treat or tranquilize animals, and except arms
designed solely for signal, flare, or saluting use; and ``specially
designed'' ``parts'' and ``components,'' n.e.s.
License Requirements
Reason for Control: CC, UN
Country chart (see Supp.
Control(s) No. 1 to part 738)
CC applies to entire entry................ A license is required for
ALL destinations, except
Canada, regardless of end
use. Accordingly, a column
specific to this control
does not appear on the
Commerce Country Chart.
(See part 742 of the EAR
for additional information)
UN applies to entire entry................ See Sec. 746.1(b) of the
EAR for UN controls
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
LVS: N/A
GBS: N/A
CIV: N/A
List of Items Controlled
Related Controls: Law enforcement restraint devices that administer
an electric shock are controlled under ECCN 0A982. Electronic
devices that monitor and report a person's location to enforce
restrictions on movement for law enforcement or penal reasons are
controlled under ECCN 3A981.
[[Page 4182]]
Related Definitions: N/A
Items: The list of items controlled is contained in the ECCN
heading.
0A504 Optical sighting devices for firearms (including shotguns
controlled by 0A502); and ``components'' as follows (see List of
Items Controlled).
License Requirements
Reason for Control: FC, RS, CC, UN
Country chart (see Supp. No.
Control(s) 1 to part 738)
RS applies to paragraph .i................ RS Column 1
FC applies to paragraphs .a, .b, .c, .d, FC Column 1
.e, .g, and .i of this entry.
CC applies to entire entry................ CC Column 1
UN applies to entire entry................ See Sec. 746.1(b) of the
EAR for UN controls
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
LVS: $500 for 0A504.g.
GBS: N/A
CIV: N/A
List of Items Controlled
Related Controls: (1) See USML Category XII(c) for sighting devices
using second generation image intensifier tubes having luminous
sensitivity greater than 350 [micro]A/lm, or third generation or
higher image intensifier tubes, that are ``subject to the ITAR.''
(2) See USML Category XII(b) for laser aiming or laser illumination
systems ``subject to the ITAR.'' (3) Section 744.9 of the EAR
imposes a license requirement on certain commodities described in
0A504 if being exported, reexported, or transferred (in-country) for
use by a military end-user or for incorporation into an item
controlled by ECCN 0A919.
Related Definitions: N/A
Items:
a. Telescopic sights.
b. Holographic sights.
c. Reflex or ``red dot'' sights.
d. Reticle sights.
e. Other sighting devices that contain optical elements.
f. Laser aiming devices or laser illuminators ``specially
designed'' for use on firearms, and having an operational wavelength
exceeding 400 nm but not exceeding 710 nm.
Note 1 to 0A504.f: 0A504.f does not control laser boresighting
devices that must be placed in the bore or chamber to provide a
reference for aligning the firearms sights.
g. Lenses, other optical elements and adjustment mechanisms for
articles in paragraphs .a, .b, .c, .d, .e, or .i.
h. [Reserved]
i. Riflescopes that were not ``subject to the EAR'' as of March
8, 2020 and are ``specially designed'' for use in firearms that are
``subject to the ITAR.''
Note 2 to paragraph i: For purpose of the application of
``specially designed'' for the riflescopes controlled under 0A504.i,
paragraph (a)(1) of the definition of ``specially designed'' in
Sec. 772.1 of the EAR is what is used to determine whether the
riflescope is ``specially designed.''
0A505 Ammunition as follows (see List of Items Controlled).
License Requirements
Reason for Control: NS, RS, CC, FC, UN, AT
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to 0A505.a and .x.............. NS Column 1
RS applies to 0A505.a and .x.............. RS Column 1
CC applies to 0A505.b..................... CC Column 1
FC applies to entire entry except 0A505.d. FC Column 1
UN applies to entire entry................ See Sec. 746.1 of the EAR
for UN controls
AT applies to 0A505.a, .d, and .x......... AT Column 1
AT applies to 0A505.c..................... A license is required for
items controlled by
paragraph .c of this entry
to North Korea for anti-
terrorism reasons. The
Commerce Country Chart is
not designed to determine
AT licensing requirements
for this entry. See Sec.
742.19 of the EAR for
additional information.
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
LVS: $500 for items in 0A505.x, except $3,000 for items in 0A505.x
that, immediately prior to March 9, 2020, were classified under
0A018.b. (i.e., ``Specially designed'' components and parts for
ammunition, except cartridge cases, powder bags, bullets, jackets,
cores, shells, projectiles, boosters, fuses and components, primers,
and other detonating devices and ammunition belting and linking
machines (all of which are ``subject to the ITAR''). (See 22 CFR
parts 120 through 130))
GBS: N/A
CIV: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2)
of the EAR) may not be used for any item in 0A505.
List of Items Controlled
Related Controls: (1) Ammunition for modern heavy weapons such as
howitzers, artillery, cannon, mortars and recoilless rifles as well
as inherently military ammunition types such as ammunition
preassembled into links or belts, caseless ammunition, tracer
ammunition, ammunition with a depleted uranium projectile or a
projectile with a hardened tip or core and ammunition with an
explosive projectile are ``subject to the ITAR.'' (2) Percussion
caps, and lead balls and bullets, for use with muzzle-loading
firearms are EAR99 items.
Related Definitions: N/A
Items:
a. Ammunition for firearms controlled by ECCN 0A501 or USML
Category I and not enumerated in paragraph .b, .c, or .d of this
entry or in USML Category III.
b. Buckshot (No. 4 .24'' diameter and larger) shotgun shells.
c. Shotgun shells (including less than lethal rounds) that do
not contain buckshot; and ``specially designed'' ``parts'' and
``components'' of shotgun shells.
Note 1 to 0A505.c: Shotgun shells that contain only chemical
irritants are controlled under ECCN 1A984.
d. Blank ammunition for firearms controlled by ECCN 0A501 and
not enumerated in USML Category III.
e. through w. [Reserved]
x. ``Parts'' and ``components'' that are ``specially designed''
for a commodity subject to control in this ECCN or a defense article
in USML Category III and not elsewhere specified on the USML, the
CCL or paragraph .d of this entry.
Note 2 to 0A505.x: The controls on ``parts'' and
``components'' in this entry include Berdan and boxer primers,
metallic cartridge cases, and standard metallic projectiles such as
full metal jacket, lead core, and copper projectiles.
Note 3 to 0A505.x: The controls on ``parts'' and ``components''
in this entry include those ``parts'' and ``components'' that are
common to ammunition and ordnance described in this entry and to
those enumerated in USML Category III.
Note 4 to 0A505: Lead shot smaller than No. 4 Buckshot, empty
and unprimed shotgun shells, shotgun wads, smokeless gunpowder,
`Dummy rounds' and blank rounds (unless linked or belted), not
incorporating a lethal or non-lethal projectile(s) are designated
EAR99. A `dummy round or drill round' is a round that is completely
inert, i.e., contains no primer, propellant, or explosive charge. It
is typically used to check weapon function and for crew training.
0
43. In Supplement No. 1 to part 774, Category 0, add, between entries
for ECCNs 0A521 and 0A604, an entry for ECCN 0A602 to read as follows:
0A602 Guns and Armament as follows (see List of Items Controlled).
License Requirements
Reason for Control: NS, RS, UN, AT
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to entire entry................ NS Column 1
RS applies to entire entry................ RS Column 1
[[Page 4183]]
UN applies to entire entry................ See Sec. 746.1 of the EAR
for UN controls
AT applies to entire entry................ AT Column 1
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
LVS: $500
GBS: N/A
CIV: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2)
of the EAR) may not be used for any item in 0A602.
List of Items Controlled
Related Controls: (1) Modern heavy weapons such as howitzers,
artillery, cannon, mortars, and recoilless rifles are ``subject to
the ITAR.'' (2) See ECCN 0A919 for foreign-made ``military
commodities'' that incorporate more than a de minimis amount of
U.S.-origin ``600 series'' items. (3) See ECCN 0A606 for engines
that are ``specially designed'' for a self-propelled gun or howitzer
subject to control under paragraph .a of this ECCN or USML Category
VII.
Related Definitions: N/A
Items:
a. Guns and armament manufactured between 1890 and 1919.
b. Military flame throwers with an effective range less than 20
meters.
c. through w. [Reserved]
x. ``Parts'' and ``components'' that are ``specially designed''
for a commodity subject to control in paragraphs .a or .b of this
ECCN or a defense article in USML Category II and not elsewhere
specified on the USML or the CCL.
Note 1 to 0A602.x: Engines that are ``specially designed'' for a
self-propelled gun or howitzer subject to control under paragraph .a
of this ECCN or a defense article in USML Category VII are
controlled under ECCN 0A606.x.
Note 2 to 0A602: ``Parts,'' ``components,'' ``accessories,'' and
``attachments'' specified in USML subcategory II(j) are subject to
the controls of that paragraph.
Note 3 to 0A602: Black powder guns and armament manufactured in
or prior to 1890 and replicas thereof designed for use with black
powder propellants are designated EAR99.
Supplement No. 1 to Part 774--[Amended]
0
44. In Supplement No. 1 to part 774, Category 0, remove ECCNs 0A918,
0A984, 0A985, 0A986, and 0A987.
0
45. In Supplement No. 1 to part 774, Category 0, revise ECCN 0A988 to
read as follows:
0A988 Conventional military steel helmets.
No items currently are in this ECCN. See ECCN 1A613.y.1 for
conventional steel helmets that, immediately prior to July 1, 2014,
were classified under 0A988.
0
46. In Supplement No. 1 to part 774, Category 0, add, before the entry
for ECCN 0B521, entries for ECCNs 0B501 and 0B505 to read as follows:
0B501 Test, inspection, and production ``equipment'' and related
commodities for the ``development'' or ``production'' of commodities
enumerated or otherwise described in ECCN 0A501 or USML Category I
as follows (see List of Items Controlled).
License Requirements
Reason for Control: NS, RS, UN, AT
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to entire entry except NS Column 1
equipment for ECCN 0A501.y.
RS applies to entire entry except RS Column 1
equipment for ECCN 0A501.y.
UN applies to entire entry................ See Sec. 746.1 of the EAR
for UN controls
AT applies to entire entry................ AT Column 1
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
LVS: $3000
GBS: N/A
CIV: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2)
of the EAR) may not be used to ship any item in this entry.
List of Items Controlled
Related Controls: N/A
Related Definitions: N/A
Items:
a. Small arms chambering machines.
b. Small arms deep hole drilling machines and drills therefor.
c. Small arms rifling machines.
d. Small arms spill boring machines.
e. Production equipment (including dies, fixtures, and other
tooling) ``specially designed'' for the ``production'' of the items
controlled in 0A501.a through .x. or USML Category I.
0B505 Test, inspection, and production ``equipment'' and related
commodities ``specially designed'' for the ``development'' or
``production'' of commodities enumerated or otherwise described in
ECCN 0A505 or USML Category III, except equipment for the hand
loading of cartridges and shotgun shells, as follows (see List of
Items Controlled).
License Requirements
Reason for Control: NS, RS, UN, AT
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to paragraphs .a and .x........ NS Column 1
RS applies to paragraphs .a and .x........ RS Column 1
UN applies to entire entry................ See Sec. 746.1 of the EAR
for UN controls
AT applies to paragraphs .a, .d, and .x... AT Column 1
AT applies to paragraph .c................ A license is required for
export or reexport of these
items to North Korea for
anti-terrorism reasons
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
LVS: $3000
GBS: N/A
CIV: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2)
of the EAR) may not be used for any item in 0B505.
List of Items Controlled
Related Controls: N/A
Related Definitions: N/A
Items:
a. Production equipment (including tooling, templates, jigs,
mandrels, molds, dies, fixtures, alignment mechanisms, and test
equipment), not enumerated in USML Category III that are ``specially
designed'' for the ``production'' of commodities controlled by ECCN
0A505.a or .x or USML Category III.
b. Equipment ``specially designed'' for the ``production'' of
commodities in ECCN 0A505.b.
c. Equipment ``specially designed'' for the ``production'' of
commodities in ECCN 0A505.c.
d. Equipment ``specially designed'' for the ``production'' of
commodities in ECCN 0A505.d.
e. through .w [Reserved]
x. ``Parts'' and ``components'' ``specially designed'' for a
commodity subject to control in paragraph .a of this entry.
0
47. In Supplement No. 1 to part 774, Category 0, add, between entries
for ECCNs 0B521 and 0B604, an entry for ECCN 0B602 to read as follows:
0B602 Test, inspection, and production ``equipment'' and related
commodities ``specially designed'' for the ``development'' or
``production'' of commodities enumerated or otherwise described in
ECCN 0A602 or USML Category II as follows (see List of Items
Controlled).
License Requirements
Reason for Control: NS, RS, UN, AT
[[Page 4184]]
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to entire entry................ NS Column 1
RS applies to entire entry................ RS Column 1
UN applies to entire entry................ See Sec. 746.1 of the EAR
for UN controls
AT applies to entire entry................ AT Column 1
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
LVS: $3000
GBS: N/A
CIV: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2)
of the EAR) may not be used for any item in 0B602.
List of Items Controlled
Related Controls: N/A
Related Definitions: N/A
Items:
a. The following commodities if ``specially designed'' for the
``development'' or ``production'' of commodities enumerated in ECCN
0A602.a or USML Category II:
a.1. Gun barrel rifling and broaching machines and tools
therefor;
a.2. Gun barrel rifling machines;
a.3. Gun barrel trepanning machines;
a.4. Gun boring and turning machines;
a.5. Gun honing machines of 6 feet (183 cm) stroke or more;
a.6. Gun jump screw lathes;
a.7. Gun rifling machines; and
a.8. Barrel straightening presses.
b. Jigs and fixtures and other metal-working implements or
accessories of the kinds exclusively designed for use in the
manufacture of items in ECCN 0A602 or USML Category II.
c. Other tooling and equipment, ``specially designed'' for the
``production'' of items in ECCN 0A602 or USML Category II.
d. Test and evaluation equipment and test models, including
diagnostic instrumentation and physical test models, ``specially
designed'' for items in ECCN 0A602 or USML Category II.
Supplement No. 1 to Part 774--[Amended]
0
48. In Supplement No. 1 to part 774, Category 0, remove ECCN 0B986.
0
49. In Supplement No. 1 to part 774, Category 0, add, between the
entries for ECCNs 0D001 and 0D521, entries for ECCNs 0D501 and 0D505 to
read as follows:
0D501 ``Software'' ``specially designed'' for the ``development,''
``production,'' operation, or maintenance of commodities controlled
by 0A501 or 0B501.
License Requirements
Reason for Control: NS, RS, UN, AT
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to entire entry except NS Column 1
``software'' for commodities in ECCN
0A501.y or equipment in ECCN 0B501 for
commodities in ECCN 0A501.y.
RS applies to entire entry except RS Column 1
``software'' for commodities in ECCN
0A501.y or equipment in ECCN 0B501 for
commodities in ECCN 0A501.y.
UN applies to entire entry................ See Sec. 746.1 of the EAR
for UN controls
AT applies to entire entry................ AT Column 1
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
CIV: N/A
TSR: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2)
of the EAR) may not be used for any ``software'' in 0D501.
List of Items Controlled
Related Controls: ``Software'' required for and directly related to
articles enumerated in USML Category I is ``subject to the ITAR''.
Related Definitions: N/A
Items: The list of items controlled is contained in this ECCN
heading.
0D505 ``Software'' ``specially designed'' for the ``development,''
``production,'' operation, or maintenance of commodities controlled
by 0A505 or 0B505.
License Requirements
Reason for Control: NS, RS, UN, AT
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to ``software'' for commodities NS Column 1
in ECCN 0A505.a and .x and equipment in
ECCN 0B505.a .and .x.
RS applies to ``software'' for commodities RS Column 1
in ECCN 0A505.a and .x and equipment in
ECCN 0B505.a and .x.
UN applies to entire entry................ See Sec. 746.1 of the EAR
for UN controls
AT applies to ``software'' for commodities AT Column 1
in ECCN 0A505.a, .d, or .x and equipment
in ECCN 0B505.a, .d, or .x.
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
CIV: N/A
TSR: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2)
of the EAR) may not be used for any ``software'' in 0D505.
List of Items Controlled
Related Controls: ``Software'' required for and directly related to
articles enumerated in USML Category III is ``subject to the ITAR''.
Related Definitions: N/A
Items: The list of items controlled is contained in this ECCN
heading.
0
50. In Supplement No. 1 to part 774, Category 0, add, between the
entries for ECCNs 0D521 and 0D604, an entry for ECCN 0D602 to read as
follows:
0D602 ``Software'' ``specially designed'' for the ``development,''
``production,'' operation or maintenance of commodities controlled
by 0A602 or 0B602 as follows (see List of Items Controlled).
License Requirements
Reason for Control: NS, RS, UN, AT
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to entire entry................ NS Column 1
RS applies to entire entry................ RS Column 1
UN applies to entire entry................ See Sec. 746.1 of the EAR
for UN controls
AT applies to entire entry................ AT Column 1
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
CIV: N/A
TSR: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2)
of the EAR) may not be used for any item in 0D602.
List of Items Controlled
Related Controls: (1) ``Software'' required for and directly related
to articles enumerated in USML Category II is ``subject to the
ITAR''. (2) See ECCN 0A919 for foreign-made ``military commodities''
that incorporate more than a de minimis amount of U.S.-origin ``600
series'' items.
[[Page 4185]]
Related Definitions: N/A
Items: ``Software'' ``specially designed'' for the ``development,''
``production,'' operation, or maintenance of commodities controlled
by ECCN 0A602 and ECCN 0B602.
Supplement No. 1 to Part 774--[Amended]
0
51. In Supplement No. 1 to part 774, Category 0, remove ECCN 0E018.
0
52. In Supplement No. 1 to part 774, Category 0, add, between the
entries for ECCNs 0E001 and 0E521, entries for ECCNs 0E501, 0E502,
0E504, and 0E505 to read as follows:
0E501 ``Technology'' ``required'' for the ``development,''
``production,'' operation, installation, maintenance, repair, or
overhaul of commodities controlled by 0A501 or 0B501 as follows (see
List of Items Controlled).
License Requirements
Reason for Control: NS, RS, UN, AT
Country
Chart
(See
Control(s) Country chart (see Supp. Supp.
No. 1 to part 738) No.
to part
738)
NS applies to entire entry............ NS Column 1
RS applies to entire entry............ RS Column 1
UN applies to entire entry............ See Sec. 746.1 of the
EAR for UN controls
AT applies to entire entry............ AT Column 1
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
CIV: N/A
TSR: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2)
of the EAR) may not be used for any ``technology'' in ECCN 0E501.
List of Items Controlled
Related Controls: Technical data required for and directly related
to articles enumerated in USML Category I are ``subject to the
ITAR.''
Related Definitions: N/A
Items:
a. ``Technology'' ``required'' for the ``development'' or
``production'' of commodities controlled by ECCN 0A501 (other than
0A501.y) or 0B501.
b. ``Technology'' ``required'' for the operation, installation,
maintenance, repair, or overhaul of commodities controlled by ECCN
0A501 (other than 0A501.y) or 0B501.
0E502 ``Technology'' ``required'' for the ``development'' or
``production'' of commodities controlled by 0A502.
License Requirements
Reason for Control: CC, UN
Country chart (see Supp. No.
Control(s) 1 to part 738)
CC applies to entire entry................ CC Column 1
UN applies to entire entry................ See Sec. 746.1(b) of the
EAR for UN controls
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
CIV: N/A
TSR: N/A
List of Items Controlled
Related Controls: Technical data required for and directly related
to articles enumerated in USML Category I are ``subject to the
ITAR''.
Related Definitions: N/A
Items: The list of items controlled is contained in the ECCN
heading.
0E504 ``Technology'' ``required'' for the ``development'' or
``production'' of commodities controlled by 0A504 that incorporate a
focal plane array or image intensifier tube.
License Requirements
Reason for Control: RS, UN, AT
Country chart (see Supp. No.
Control(s) 1 to part 738)
RS applies to entire entry................ RS Column 1
UN applies to entire entry................ See Sec. 746.1(b) of the
EAR for UN controls
AT applies to entire entry................ AT Column 1
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
CIV: N/A
TSR: N/A
List of Items Controlled
Related Controls: N/A
Related Definitions: N/A
Items: The list of items controlled is contained in the ECCN
heading.
0E505 ``Technology'' ``required'' for the ``development,''
``production,'' operation, installation, maintenance, repair,
overhaul, or refurbishing of commodities controlled by 0A505.
License Requirements
Reason for Control: NS, RS, UN, CC, AT
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to ``technology'' for NS Column 1
``development,'' ``production,''
operation, installation, maintenance,
repair, overhaul, or refurbishing
commodities in 0A505.a and .x; for
equipment for those commodities in 0B505;
and for ``software'' for that equipment
and those commodities in 0D505.
RS applies to entire entry except RS Column 1
``technology'' for ``development,''
``production,'' operation, installation,
maintenance, repair, overhaul, or
refurbishing commodities in 0A505.a and
.x; for equipment for those commodities
in 0B505 and for ``software'' for those
commodities and that equipment in 0D505.
UN applies to entire entry................ See Sec. 746.1 of the EAR
for UN controls
CC applies to ``technology'' for the CC Column 1
``development'' or ``production'' of
commodities in 0A505.b.
AT applies to ``technology'' for AT Column 1
``development,'' ``production,''
operation, installation, maintenance,
repair, overhaul, or refurbishing
commodities in 0A505.a, .d, and .x.
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
CIV: N/A
TSR: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2)
of the EAR) may not be used for any ``technology'' in 0E505.
List of Items Controlled
Related Controls: Technical data required for and directly related
to articles enumerated in USML Category III are ``subject to the
ITAR''.
Related Definitions: N/A
Items: The list of items controlled is contained in this ECCN
heading.
0
53. In Supplement No. 1 to part 774, Category 0, add, between the
entries for
[[Page 4186]]
ECCNs 0E521 and 0E604, an entry for ECCN 0E602:
0E602 ``Technology'' ``required'' for the ``development,''
``production,'' operation, installation, maintenance, repair,
overhaul, or refurbishing of commodities controlled by 0A602 or
0B602, or ``software'' controlled by 0D602 as follows (see List of
Items Controlled).
License Requirements
Reason for Control: NS, RS, UN, AT
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to entire entry................ NS Column 1
RS applies to entire entry................ RS Column 1
UN applies to entire entry................ See Sec. 746.1 of the EAR
for UN controls
AT applies to entire entry................ AT Column 1
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
CIV: N/A
TSR: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2)
of the EAR) may not be used for any item in 0E602.
List of Items Controlled
Related Controls: Technical data directly related to articles
enumerated in USML Category II are ``subject to the ITAR.''
Related Definitions: N/A
Items: ``Technology'' ``required'' for the ``development,''
``production,'' operation, installation, maintenance, repair, or
overhaul of commodities controlled by ECCN 0A602 or 0B602, or
``software'' controlled by ECCN 0D602.
Supplement No. 1 to Part 774--[Amended]
0
54. In Supplement No. 1 to part 774, Category 0, remove ECCN 0E918.
0
55. In Supplement No. 1 to part 774, Category 0, revise ECCN 0E982 to
read as follows.
0E982 ``Technology'' exclusively for the ``development'' or
``production'' of equipment controlled by 0A982 or 0A503.
License Requirements
Reason for Control: CC
Control(s)
CC applies to ``technology'' for items controlled by 0A982 or 0A503. A
license is required for ALL destinations, except Canada, regardless of
end use. Accordingly, a column specific to this control does not appear
on the Commerce Country Chart. (See part 742 of the EAR for additional
information.)
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
CIV: N/A
TSR: N/A
List of Items Controlled
Related Controls: N/A
Related Definitions: N/A
Items:
The list of items controlled is contained in the ECCN heading.
Supplement No. 1 to Part 774--[Amended]
0
56. In Supplement No. 1 to part 774, Category 0, remove ECCNs 0E984 and
0E987.
0
57. In Supplement No. 1 to part 774, Category 1, revise ECCN 1A984 to
read as follows:
1A984 Chemical agents, including tear gas formulation containing 1
percent or less of orthochlorobenzalmalononitrile (CS), or 1 percent
or less of chloroacetophenone (CN), except in individual containers
with a net weight of 20 grams or less; liquid pepper except when
packaged in individual containers with a net weight of 3 ounces
(85.05 grams) or less; smoke bombs; non-irritant smoke flares,
canisters, grenades and charges; and other pyrotechnic articles
(excluding shotgun shells, unless the shotgun shells contain only
chemical irritants) having dual military and commercial use, and
``parts'' and ``components'' ``specially designed'' therefor, n.e.s.
License Requirements
Reason for Control: CC
Country chart (see Supp. No.
Control(s) 1 to part 738)
CC applies to entire entry................ CC Column 1
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
LVS: N/A
GBS: N/A
CIV: N/A
List of Items Controlled
Related Controls: N/A
Related Definitions: N/A
Items:
The list of items controlled is contained in the ECCN heading.
0
58. In Supplement No. 1 to part 774, Category 2, revise ECCN 2B004 to
read as follows:
2B004 Hot ``isostatic presses'' having all of the characteristics
described in the list of items controlled, and ``specially
designed'' ``components'' and ``accessories'' therefor.
License Requirements
Reason for Control: NS, MT NP, AT
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to entire entry................ NS Column 2
MT applies to entire entry................ MT Column 1
NP applies to entire entry, except NP Column 1
2B004.b.3 and presses with maximum
working pressures below 69 MPa.
AT applies to entire entry................ AT Column 1
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
LVS: N/A
GBS: N/A
CIV: N/A
List of Items Controlled
Related Controls: (1) See ECCN 2D001 for software for items
controlled under this entry. (2) See ECCNs 2E001 (``development''),
2E002 (``production''), and 2E101 (``use'') for technology for items
controlled under this entry. (3) For ``specially designed'' dies,
molds and tooling, see ECCNs 0B501, 0B602, 0B606, 1B003, 9B004, and
9B009. (4) For additional controls on dies, molds and tooling, see
ECCNs 1B101.d, 2B104, and 2B204. (5) Also see ECCNs 2B117 and
2B999.a.
Related Definitions: N/A
Items:
a. A controlled thermal environment within the closed cavity and
possessing a chamber cavity with an inside diameter of 406 mm or
more; and
b. Having any of the following:
b.1. A maximum working pressure exceeding 207 MPa;
b.2. A controlled thermal environment exceeding 1,773 K (1,500
[deg]C); or
b.3. A facility for hydrocarbon impregnation and removal of
resultant gaseous degradation products.
Technical Note: The inside chamber dimension is that of the
chamber in which both the working temperature and the working
pressure are achieved and does not include fixtures. That dimension
will be the smaller of either the inside diameter of the pressure
chamber or the inside diameter of the insulated furnace chamber,
depending on which of the two chambers is located inside the other.
0
59. In Supplement No. 1 to part 774, Category 2, revise ECCN 2B018 to
read as follows:
2B018 Equipment on the Wassenaar Arrangement Munitions List.
No commodities currently are controlled by this entry.
Commodities formerly controlled by paragraphs .a through .d, .m, and
.s of this entry are controlled in ECCN 0B606. Commodities formerly
controlled by paragraphs .e through .l of this entry are controlled
by ECCN 0B602. Commodities formerly controlled by paragraphs .o
through
[[Page 4187]]
.r of this entry are controlled by ECCN 0B501. Commodities formerly
controlled by paragraph .n of this entry are controlled in ECCN
0B501 if they are ``specially designed'' for the ``production'' of
the items controlled in ECCN 0A501.a through .x or USML Category I
and controlled in ECCN 0B602 if they are of the kind exclusively
designed for use in the manufacture of items in ECCN 0A602 or USML
Category II.
0
60. In Supplement No. 1 to part 774, Category 2, revise ECCN 2D018 to
read as follows:
2D018 ``Software'' for the ``development,'' ``production,'' or
``use'' of equipment controlled by 2B018.
No software is currently controlled under this entry. See ECCNs
0D501, 0D602, and 0D606 for software formerly controlled under this
entry.
0
61. In Supplement No. 1 to part 774, Category 2, revise ECCN 2E001 to
read as follows:
2E001 ``Technology'' according to the General Technology Note for
the ``development'' of equipment or ``software'' controlled by 2A
(except 2A983, 2A984, 2A991, or 2A994), 2B (except 2B991, 2B993,
2B996, 2B997, 2B998, or 2B999), or 2D (except 2D983, 2D984, 2D991,
2D992, or 2D994).
License Requirements
Reason for Control: NS, MT, NP, CB, AT
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to ``technology'' for items NS Column 1
controlled by 2A001, 2B001 to 2B009,
2D001 or 2D002.
MT applies to ``technology'' for items MT Column 1
controlled by 2B004, 2B009, 2B104, 2B105,
2B109, 2B116, 2B117, 2B119 to 2B122,
2D001, or 2D101 for MT reasons.
NP applies to ``technology'' for items NP Column 1
controlled by 2A225, 2A226, 2B001, 2B004,
2B006, 2B007, 2B009, 2B104, 2B109, 2B116,
2B201, 2B204, 2B206, 2B207, 2B209, 2B225
to 2B233, 2D001, 2D002, 2D101, 2D201, or
2D202 for NP reasons.
NP applies to ``technology'' for items NP Column 2
controlled by 2A290, 2A291, or 2D290 for
NP reasons.
CB applies to ``technology'' for equipment CB Column 2
controlled by 2B350 to 2B352, valves
controlled by 2A226 having the
characteristics of those controlled by
2B350.g, and software controlled by 2D351.
AT applies to entire entry................ AT Column 1
Reporting Requirements
See Sec. 743.1 of the EAR for reporting requirements for
exports under License Exceptions, and Validated End-User
authorizations.
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
CIV: N/A
TSR: Yes, except N/A for MT
Special Conditions for STA
STA: License Exception STA may not be used to ship or transmit
``technology'' according to the General Technology Note for the
``development'' of ``software'' specified in the License Exception
STA paragraph in the License Exception section of ECCN 2D001 or for
the ``development'' of equipment as follows: ECCN 2B001 entire
entry; or ``Numerically controlled'' or manual machine tools as
specified in 2B003 to any of the destinations listed in Country
Group A:6 (See Supplement No. 1 to part 740 of the EAR).
List of Items Controlled
Related Controls: See also 2E101, 2E201, and 2E301
Related Definitions: N/A
Items:
The list of items controlled is contained in the ECCN heading.
Note 1 to 2E001: ECCN 2E001 includes ``technology'' for the
integration of probe systems into coordinate measurement machines
specified by 2B006.a.
0
62. In Supplement No. 1 to part 774, Category 2, revise ECCN 2E002 to
read as follows:
2E002 ``Technology'' according to the General Technology Note for
the ``production'' of equipment controlled by 2A (except 2A983,
2A984, 2A991, or 2A994), or 2B (except 2B991, 2B993, 2B996, 2B997,
2B998, or 2B999).
License Requirements
Reason for Control: NS, MT, NP, CB, AT
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to ``technology'' for equipment NS Column 1
controlled by 2A001, 2B001 to 2B009.
MT applies to ``technology'' for equipment MT Column 1
controlled by 2B004, 2B009, 2B104, 2B105,
2B109, 2B116, 2B117, or 2B119 to 2B122
for MT reasons.
NP applies to ``technology'' for equipment NP Column 1
controlled by 2A225, 2A226, 2B001, 2B004,
2B006, 2B007, 2B009, 2B104, 2B109, 2B116,
2B201, 2B204, 2B206, 2B207, 2B209, 2B225
to 2B233 for NP reasons.
NP applies to ``technology'' for equipment NP Column 2
controlled by 2A290 or 2A291 for NP
reasons.
CB applies to ``technology'' for equipment CB Column 2
Controlled by 2B350 to 2B352 and for
valves controlled by 2A226 having the
characteristics of those controlled by
2B350.g.
AT applies to entire entry................ AT Column 1
Reporting Requirements
See Sec. 743.1 of the EAR for reporting requirements for
exports under License Exceptions, and Validated End-User
authorizations.
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
CIV: N/A
TSR: Yes, except N/A for MT
Special Conditions for STA
STA: License Exception STA may not be used to ship or transmit
``technology'' according to the General Technology Note for the
``production'' of equipment as follows: ECCN 2B001 entire entry; or
``Numerically controlled'' or manual machine tools as specified in
2B003 to any of the destinations listed in Country Group A:6 (See
Supplement No. 1 to part 740 of the EAR).
List of Items Controlled
Related Controls: N/A
Related Definitions: N/A
Items:
[[Page 4188]]
The list of items controlled is contained in the ECCN heading.
0
63. In Supplement No. 1 to part 774, Category 7, revise ECCN 7A611 to
read as follows:
7A611 Military fire control, laser, imaging, and guidance equipment,
as follows (see List of Items Controlled).
License Requirements
Reason for Control: NS, MT, RS, AT, UN
Country chart (see Supp. No.
Control(s) 1 to part 738)
NS applies to entire entry except 7A611.y. NS Column 1
MT applies to commodities in 7A611.a that MT Column 1
meet or exceed the parameters in 7A103.b
or .c.
RS applies to entire entry except 7A611.y. RS Column 1
AT applies to entire entry................ AT Column 1
UN applies to entire entry except 7A611.y. See Sec. 746.1(b) of the
EAR for UN controls
List Based License Exceptions (See Part 740 for a Description of All
License Exceptions)
LVS: $1500
GBS: N/A
CIV: N/A
Special Conditions for STA
STA: Paragraph (c)(2) of License Exception STA (Sec. 740.20(c)(2)
of the EAR) may not be used for any item in 7A611.
List of Items Controlled
Related Controls: (1) Military fire control, laser, imaging, and
guidance equipment that are enumerated in USML Category XII, and
technical data (including software) directly related thereto, are
subject to the ITAR. (2) See Related Controls in ECCNs 0A504, 2A984,
6A002, 6A003, 6A004, 6A005, 6A007, 6A008, 6A107, 7A001, 7A002,
7A003, 7A005, 7A101, 7A102, and 7A103. (3) See ECCN 3A611 and USML
Category XI for controls on countermeasure equipment. (4) See ECCN
0A919 for foreign-made ``military commodities'' that incorporate
more than a de minimis amount of U.S. origin ``600 series''
controlled content.
Related Definitions: N/A
Items:
a. Guidance or navigation systems, not elsewhere specified on
the USML, that are ``specially designed'' for a defense article on
the USML or for a 600 series item.
b. to w. [RESERVED]
x. ``Parts,'' ``components,'' ``accessories,'' and
``attachments,'' including accelerometers, gyros, angular rate
sensors, gravity meters (gravimeters), and inertial measurement
units (IMUs), that are ``specially designed'' for defense articles
controlled by USML Category XII or items controlled by 7A611, and
that are NOT:
1. Enumerated or controlled in the USML or elsewhere within ECCN
7A611;
2. Described in ECCNs 6A007, 6A107, 7A001, 7A002, 7A003, 7A101,
7A102, or 7A103; or
3. Elsewhere specified in ECCN 7A611.y or 3A611.y.
y. Specific ``parts,'' ``components,'' ``accessories,'' and
``attachments'' ``specially designed'' for a commodity subject to
control in this ECCN or a defense article in Category XII and not
elsewhere specified on the USML or in the CCL, as follows, and
``parts,'' ``components,'' ``accessories,'' and ``attachments''
``specially designed'' therefor:
y.1 [RESERVED]
Dated: January 10, 2020.
Richard E. Ashooh,
Assistant Secretary for Export Administration.
[FR Doc. 2020-00573 Filed 1-17-20; 11:15 am]
BILLING CODE 3510-33-P
