Temporary General License: Extension of Validity
| Published date | 18 February 2020 |
| Citation | 85 FR 8722 |
| Record Number | 2020-03144 |
| Section | Rules and Regulations |
| Court | Industry And Security Bureau |
Federal Register, Volume 85 Issue 32 (Tuesday, February 18, 2020)
[Federal Register Volume 85, Number 32 (Tuesday, February 18, 2020)]
[Rules and Regulations]
[Pages 8722-8725]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03144]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 744 and 762
[Docket No. 200211-0051]
RIN 0694-AH97
Temporary General License: Extension of Validity
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Final rule.
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SUMMARY: The U.S. Government has decided to extend through April 1,
2020, the temporary general license to Huawei Technologies Co., Ltd.
(Huawei) and one hundred and fourteen of its non-U.S. affiliates on the
Entity List. In order to implement this decision, this final rule
revises the temporary general license to remove the expiration date of
February 16, 2020, and substitute the date of April 1, 2020.
DATES: This rule is effective February 13, 2020, through April 1, 2020,
except for amendatory instructions 1 and 3, which are effective
February 13, 2020.
FOR FURTHER INFORMATION CONTACT: Director, Office of Exporter Services,
Bureau of Industry and Security, Department of Commerce, Phone: (949)
660-0144 or (408) 998-8806 or email your inquiry to:
[email protected].
SUPPLEMENTARY INFORMATION:
Background
As published on May 22, 2019 (84 FR 23468) and extended and amended
through a final rule published on August 21, 2019 (84 FR 43487), this
temporary general license authorizes certain activities, including
those necessary for the continued operations of existing networks and
equipment as well as the support of existing mobile services, including
cybersecurity research critical to maintaining the integrity and
reliability of existing and fully operational networks and equipment.
Exporters, reexporters, and transferors are required to maintain
certifications and other records, to be made available when requested
by BIS, regarding their use of the temporary general license. The
expiration date was again updated through February 16, 2020 (84 FR
64018, Nov. 20, 2019).
As published on May 22, 2019 (84 FR 22961), and as revised and
clarified by a final rule published on August 21, 2019 (84 FR 43493),
any exports, reexports, or in-country transfers of items subject to the
EAR to any of the listed Huawei entities as of the effective date they
were added to the Entity List continue to require a license, with the
exception of transactions explicitly authorized by the temporary
general license and eligible for export, reexport, or transfer (in-
country) prior to May 16, 2019 without a license or under a license
exception. License applications will continue to be reviewed under a
presumption of denial, as stated in the Entity List entries for the
listed Huawei
[[Page 8723]]
entities. No persons are relieved of other obligations under the EAR,
including but not limited to licensing requirements to the People's
Republic of China (PRC or China) or other destinations and the
requirements of part 744 of the EAR. The temporary general license also
does not authorize any activities or transactions involving Country
Group E countries (i.e., Cuba, Iran, North Korea, Sudan, and Syria) or
foreign nationals.
Extension of validity
At this time, the U.S. Government has decided to extend the
temporary general license until April 1, 2020. In order to implement
this U.S. Government decision, this final rule revises the temporary
general license to remove the date of February 16, 2020 and substitute
the date of April 1, 2020 in the introductory text in paragraph (b)(1)
of the temporary general license and in the introductory text of
paragraph (c) of Supplement No. 7 to part 744.
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). ECRA 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 were made, issued, conducted, or allowed to become
effective under the Export Administration Act of 1979 (previously, 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.)) or the Export Administration
Regulations, and were 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.
Rulemaking Requirements
1. 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, distributive 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 rule has been determined to be not significant for
purposes of Executive Order 12866. This rule is not an Executive Order
13771 regulatory action because this rule is not significant under
Executive Order 12866.
2. Notwithstanding any other provision of law, no person is
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 Office of
Management and Budget (OMB) Control Number. This regulation involves
collections previously approved by OMB under control number 0694-0088,
Simplified Network Application Processing System, which includes, among
other things, license applications, and carries a burden estimate of
42.5 minutes for a manual or electronic submission. Total burden hours
associated with the PRA and OMB control number 0694-0088 are not
expected to increase as a result of this rule. You may send comments
regarding the collection of information associated with this rule,
including suggestions for reducing the burden, to Jasmeet K. Seehra,
Office of Management and Budget (OMB), by email to
[email protected], or by fax to (202) 395-7285.
3. This rule does not contain policies with federalism implications
as that term is defined in Executive Order 13132.
4. Pursuant to section 1762 of ECRA, this action is exempt from the
Administrative Procedure Act (5 U.S.C. 553) requirements for notice of
proposed rulemaking, opportunity for public participation, and delay in
effective date.
5. Because a notice of proposed rulemaking and an opportunity for
public comment are not required to be given for this rule by 5 U.S.C.
553, or by 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 Part 744
Exports, Reporting and recordkeeping requirements, Terrorism.
15 CFR Part 762
Administrative practice and procedure, Business and industry,
Confidential business information, Exports, Reporting and recordkeeping
requirements.
Accordingly, parts 744 and 762 of the Export Administration
Regulations (15 CFR parts 730 through 774) is amended as follows:
PART 744--[AMENDED]
0
1. 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).
0
2. Supplement No. 7 to part 744 is added to read as follows:
Supplement No. 7 to Part 744--Temporary General License
Notwithstanding the requirements and other provisions of Supplement
No. 4 to this part, which became effective as to Huawei Technologies
Co., Ltd. (Huawei), Shenzhen, Guangdong, China on May 16, 2019, and its
non-U.S. affiliates listed in Supplement No. 4 to this part on, as
applicable, May 16, 2019 or August 19, 2019, the licensing and other
requirements in the EAR as of May 15, 2019, are restored in part as of
May 20, 2019, and through April 1, 2020, pertaining to exports,
reexports, and transfers (in-country) of items subject to the EAR to
any of the listed Huawei entities. The licensing and other policies of
the EAR that were in effect as of May 15, 2019, are available to
export, reexport, or transfer (in-country) such items to the listed
Huawei entities if the transaction meets the conditions of paragraph
(b) of this supplement, is limited in scope to one or more of the
activities described in paragraphs (c)(1) through (3) of this
supplement, and if the transaction parties satisfy the requirements of
paragraph (d)(1) of this supplement and, if applicable, paragraph
(d)(2) of this supplement. Thus, for example, the authority of NLR or a
License Exception that was available as of May 15, 2019, may be used in
connection with a transaction as per this temporary general license.
(a) Identification of non-U.S. affiliates. The non-U.S. affiliates
to whom the licensing and other
[[Page 8724]]
requirements of the EAR are restored as described herein are those
Huawei entities and affiliates added to the Entity List through the
Federal Register documents listed in paragraphs (a)(1) and (2) of this
supplement:
(1) Addition of Entities to the Entity List, published on 5/21/19.
(2) Non-U.S. affiliates of Huawei added to the Entity List on
August 19, 2019.
(b) Conditions for use of temporary general license. Use of this
temporary general license is subject to the following conditions:
(1) This temporary general license is effective from May 20, 2019,
through April 1, 2020.
(2) This temporary general license does not resolve persons of
other obligations under the EAR, including but not limited to licensing
requirements to the People's Republic of China or elsewhere and/or the
requirements of part 744 of the EAR. This authorization does not
authorize any activities or transactions involving Country Group E
countries (i.e., Cuba, Iran, North Korea, Sudan and Syria) or persons.
(3) With the exception of those explicitly authorized in this
temporary general license, exports, reexports, transfers (in-country)
continue to require a license pursuant to the licensing policy
described on the Entity List and license applications will be reviewed
under the license review policy for that entry.
(c) Authorized transactions. This temporary general license allows,
from May 20, 2019, through April 1, 2020, the following:
(1) Continued operation of existing networks and equipment. BIS
authorizes, subject to other provisions of the EAR, engagement in
transactions necessary to maintain and support existing and currently
'fully operational network' and equipment, including software for bug
fixes, security vulnerability patches, and other changes to existing
versions of the software, subject to legally binding contracts and
agreements executed between Huawei, or one of its listed non-U.S.
affiliates, and 'third parties' on or before May 16, 2019. Such
transactions may not enhance the functional capacities of the original
software or equipment.
(i) Exclusions. (A) The authorization under paragraph (c)(1) of
this supplement extends only to activities such as patching networks
and network infrastructure equipment, not end-devices such as general-
purpose computing devices that would not be considered to be part of an
existing and 'fully operational network.' Paragraph (c)(1) of this
supplement does not authorize support for equipment that is not
directly related to the support and maintenance of the network.
(B) The provision of the temporary general license under paragraph
(c)(1) of this supplement does not authorize transfers of equipment for
general business purposes or for activities that are not in direct
support of an existing and `fully operational network' (e.g.,
semiconductor production equipment).
(ii) [Reserved]
Note 1 to paragraph (c)(1): The term `third parties' in paragraph
(c)(1) of this supplement and the term 'third party' in Notes 2 and 3
to paragraph (c)(1) refer to a party that is not Huawei, one of its
listed non-U.S. affiliates, or the exporter, reexporter, or transferor,
but rather an organization such as a telecommunications service
provider.
Note 2 to paragraph (c)(1): The term `fully operational network' in
paragraph (c)(1) of this supplement, as well as in paragraph (c)(3) of
the supplement, refers to a `third party' network providing services to
the `third party's' customers.
(2) Support to existing `personal consumer electronic devices' and
`Customer Premises Equipment (CPE)'. BIS authorizes, subject to other
provisions of the EAR, engagement in transactions necessary to provide
service and support, including software for bug fixes, security
vulnerability patches, and other changes to existing versions of the
software, to existing Huawei `personal consumer electronic devices.'
Such transactions may not enhance the functional capacities of the
original software or equipment. For the purposes of this paragraph
(c)(2), the term `personal consumer electronic devices' is defined as
including phones and other personally-owned equipment, such as a
tablets, smart watches, and mobile hotspots such as MiFi devices. The
authorized transactions under this paragraph (c)(2) include support for
personal use of telecommunications hardware known as `Customer Premises
Equipment (CPE),' such as network switches, residential internet
gateways, set-top boxes, home networking adapters and other personally-
owned equipment that enables consumers to access network communications
services and distribute them within their residence or small business.
The authorization conferred by this paragraph (c)(2) is limited to
models of Huawei `personal consumer electronic devices' and `CPE' that
were available to the public on or before May 16, 2019.
(3) Cybersecurity research and vulnerability disclosure. BIS
authorizes, subject to other provisions of the EAR, the disclosure to
Huawei and/or to its listed non-U.S. affiliates of information
regarding security vulnerabilities in items owned, possessed, or
controlled by Huawei or any of its non-U.S. affiliates when related to
the process of providing ongoing security research critical to
maintaining the integrity and reliability of existing and currently
`fully operational network' and equipment.
(d) Certification statement. Prior to making an export, reexport,
or transfer (in-country) pursuant to the temporary general license, the
exporter, reexporter, or transferor must obtain a certification
statement and any additional support documentation needed to
substantiate the certification statement from the listed Huawei entity
that will receive the item(s), as specified in paragraph (d)(1) of this
supplement.
(1) Certification statement required from Huawei or one of its
listed non-U.S. affiliates. Prior to any export, reexport, or transfer
(in-country) under the temporary general license to Huawei or any of
its listed non-U.S. affiliates identified in paragraph (a) of this
supplement, the exporter, reexporter, or transferor must obtain a
certification statement from the entity that will receive the item(s).
The temporary general license also requires the party exporting,
reexporting, or transferring (in-country) an item ``subject to the
EAR'' to obtain, from the listed Huawei entity receiving the item, a
certification statement under paragraph (d) of this supplement
specifying how the export, reexport, or in-country transfer satisfies
the provisions of the temporary general license, including specifying
whether the activity or activities that will be supported by the
transaction fall within paragraph (c)(1), (2), or (3) of this
supplement. In order to substantiate the certification statement for
transactions that fall within paragraph (c)(1), the exporter,
reexporter, or transferor must obtain documentation from Huawei or one
of its listed non-U.S. affiliates showing that there was a legally
binding contract or agreement executed between the listed Huawei entity
and a 'third party' on or before May 16, 2019. The exporter,
reexporter, or transferor and the listed Huawei entity are each
responsible for retaining the certification statement and any
additional support documentation needed to substantiate the
certification statement under paragraph (d). See part 762 of the EAR
for record retention requirements. The certification statement must be
in writing (which may be conveyed by email), be signed and dated by an
individual of sufficient authority to legally bind the listed
[[Page 8725]]
entity, and shall provide the information required in paragraphs
(d)(1)(i) and (ii) of this supplement and the certifications specified
in paragraphs (d)(1)(iii) through (v) of this supplement.
(i) Name of the entity; complete physical address, to include
shipping, corporate, and end user addresses, if different (simply
listing a post office box is insufficient); telephone number; email
address; website (if available); and name and title of individual
signing the certification statement;
(ii) A complete list of the item(s), including the applicable
Export Control Classification Number(s) or designation (if EAR99) for
the item(s) under the EAR, and (for tangible shipments of commodities
and software) the quantity or quantities of the item(s) that will be
exported, reexported, or transferred under the authority of the
temporary general license (this inclusive list may cover multiple
exports, reexports, or transfers (in-country) under the temporary
general license of the same item(s); see paragraph (d)(2) of this
supplement);
(iii) The end-use of the item(s) to be received as an export,
reexport, or transfer (in-country) falls within the scope of a
specified authorizing paragraph under paragraph (c) of this supplement
(a general statement or declaration that the item falls within the
scope of paragraph (c) or the scope of the temporary general license
will not be sufficient, as the specific authorizing paragraph under
paragraph (c) must be identified);
(iv) The entity will comply with the recordkeeping requirements in
part 762 of the EAR, including by providing copies of the certification
statement and all other export, reexport, or transfer (in-country)
records required to be retained in part 762 to any authorized agent,
official, or employee of BIS, the U.S. Customs Service, or any other
agency of the U.S. Government as required in Sec. 762.7 of the EAR;
and
(v) The individual signing the certification statement, on behalf
of the consignee identified in paragraph (a) of this supplement, has
sufficient authority to legally bind the entity.
(2) Certification statements may be used for multiple exports,
reexports, and transfers (in-country). Exporters, reexporters, and
transferors may rely on the certification statements obtained under
paragraph (d)(1) of this supplement for multiple exports, reexports,
and transfers (in-country) involving the same item(s) to the same
consignee/end-user, provided the information included remains accurate
for those additional exports, reexports, and transfers (in-country). If
one certification statement is used for multiple exports, reexports, or
transfers (in-country) made pursuant to the temporary general license,
the exporter, reexporter, and transferor must maintain a log or other
similar record that identifies each such export, reexport, and transfer
(in-country) against that specific certification statement. The log or
other similar record must be retained in accordance with part 762 of
the EAR.
PART 762--[AMENDED]
0
3. 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
4. Section 762.2 is amended by adding paragraph (b)(55) to read as
follows:
Sec. 762.2 Records to be retained.
* * * * *
(b) * * *
(55) Supplement No. 7 to part 744, Temporary General License
Certification Statements and logs or other records required, including
any additional support documentation needed to substantiate the
certification statement, under paragraph (d) of Supplement 7 to part
744 of this chapter.
* * * * *
Dated: February 12, 2020.
Richard E. Ashooh,
Assistant Secretary for Export Administration.
[FR Doc. 2020-03144 Filed 2-13-20; 4:15 pm]
BILLING CODE 3510-33-P
