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The plan put forward and approved by President Obama in 2010:
•One Licensing Agency to process and adjudicate licenses currently processed by Dept. of State, Commerce and Treasury
•One tiered control list based on sensitivity of the items
•One system for submission, review and adjudication of all licenses– Based on DODs USXPORTS with Capability go lives:o State: August 2011o Commerce: September 2011o Treasury 2012
•One Export Enforcement Agency (Export Enforcement Coordination Center at DHS)
Final Rule Published June 16, 2011 (Federal Register Vol. 76 No.116)
License Exception STA
• 36 Ally Countries• Plus allows less sensitive items (NS Controls only) to additional 8 countries
• Must be destined for ultimate end use by the armed forces, police, paramilitary, law enforcement, customs and border protection, correctional, fire and search and rescue agencies of a government in one the designated countries.
• Not applicable for Encryption items
• Notification requirements – Exporter must notify consignee of ECCN
• Obtain Prior Consignee Statement
• Shipment Notification to Consignee of each shipment made under STA
• Can be used for Deemed Exports
• Keep a Log referencing applicable Consignee Statement
Published in Federal Register July 15, 2011 (Volume 76, No. 136)
Proposed Rule – USML to CCLControl of Items the President Determines No Longer Warrant
Control Under the U.S. Munitions List (USML)
Establishes framework to move less sensitive military items from the US Munitions List to the Commerce Control List
4 primary Categories of change– “600 Series” ECCNs
– Creation of ECCN 0Y521 (Equivalent to USML Cat XXI)
– Proposes single definition for “Specially Designed” and additional definitions
– Other Changes to Assist in the Structural Alignment of the USML and CCL
Replaces “Dual Use” with Items of Export to capture all items subject to EAR– Meant to include most dual use items, most commercial items and certain munitions items
listed on the WAML classified under “600 series, ECCN’s ending in “018 and ECCN 0A919
Note: “018” items will eventually consolidate into “600 Series” CML
• Restrictions on use of License Exceptions• For xA6zz End Items• LVS, TMP, RPL, GOV and STA only after submission of a License Exception STA eligibility
request
• For Parts, Components, Accessories and Attachments or xB6zz and xC6zz items• LVS, TMP, RPL, GOV and STA (no prior approval required)
• For xD6zz and xE6zz Software and Technology• GOV, TSU, STA
• In all these cases GOV applicable only to the STA – 36 countries
• New Part 743.4 adding semiannual reporting requirements for convention arms exports
• New Red Flags – one referring to STA and one referring to “600 Series” to alert exports of additional due diligence requirements
End items will generally be controlled for NS Column 1 (National Security), RS Col 1 (Regional Stability), AT Col 1 (Anti-terrorism and UN Embargo controls
• License required for export or reexport to all countries except Canada (excluding certain items also controlled for MT, CB1 & FC reasons)
• But can apply for STA through license application process• BIS will then publish those end items
• Items controlled for MT reasons not eligible for this procedure
• Items assigned to existing ECCNs retain Reasons for Control of that ECCN
Licensing Review Policy
•General policy of denial for any country under a U.S. Arms Embargo– BIS will publish the list of countries in proposed 740.2(a)(12)
• Proposed revision to the USML Positive List incorporated into this rule • Creates five new ECCN entries: 0A606, 0B606, 0C606, 0D606, and 0E606 along with
consolidation of 9A018.b into 0A606.b.4
• Clarifies which ground vehicles are subject to ITAR and which are EAR
(a) A ‘‘specially designed’’ item, other than a ‘‘part’’ or ‘‘component,’’ is an
item that is enumerated on the CCL and, as a result of ‘‘development,’’ has
properties peculiarly responsible for achieving or exceeding the controlled
performance levels, characteristics, or functions of the referenced item
identified in the CCL.
(b) A ‘‘specially designed’’ ‘‘part’’ or ‘‘component’’ is a ‘‘part’’ or
‘‘component’’ of an item ‘enumerated’ in a category of the CCL.
(c) For the purposes of this definition, an item is not considered ‘‘specially
designed’’ if it is separately ‘enumerated’ in an USML subcategory
or an ECCN that does not have ‘‘specially designed’’ as a control criterion.
(d) Items that are not so separately ‘enumerated’ for purposes of this
definition, are also not considered
• Applicable to “600 Series”, Existing ECCNs that use the term and Revised USML Categories that use the term
• Peculiarly responsible to this definition (currently only applies to technology) ‘‘specially designed’’ in any category of the CCL if they are:
(1) A single, unassembled part used in multiple types of civil items, such as threaded fasteners (e.g., screws, bolts, nuts, nut plates, studs, inserts), other
fasteners (e.g., clips, rivets, pins), common hardware (e.g., washers, spacers, insulators, grommets, bushings), springs and wire; or
(2) An item specifically excluded from control on the USML or the CCL; or
(3) A ‘‘part’’ or ‘‘component’’ used as a ‘‘part’’ or ‘‘component’’ of an end item in ‘‘serial production’’ and not ‘enumerated’ on the USML or CCL (i.e.,
the end item is an EAR99 item), and the part’s or component’s form, fit, and function have not been altered for use in another end item enumerated on the USML or CCL after ‘‘serial production’’ of the end-item not enumerated on the USML or CCL has begun; or
(4) A ‘‘part’’ or ‘‘component’’ that can be exchanged with an EAR99 or AT only controlled ‘‘part’’ or ‘‘component’’ on a one-for-one replacement basis
without modification to the form, fit and function of the EAR99 or AT-only ‘‘part’’ or ‘‘component,’’ and the EAR99 or AT-only part’s or component’s
function is identical to the ‘‘part’’ or ‘‘component’’ at issue.
Requires Congressional Notification and Consent under Section 38(f) of AECA
2010 State Dept. Proposed rule on Military Vehicles (CAT VII) used as an example of the process. (Included in the Proposed Rule)
– Once Congressional approvals in place and both agencies publish final rules, any Military Vehicles, specially designed parts, components, accessories and attachments, and related technology and software, not on the USML positive list will move to CCL
Publicly Available Mass Market Encryption Software Published January 7, 2011 (76 FR 1059)
BIS removes two kinds of encryption software from the jurisdiction of the EAR:
(1) Publicly available encryption software in object code with a symmetric key length greater than 64-bits that has been determined to be mass market software under §742.15(b) of the EAR and has been reclassified under ECCN 5D992; and
(2) Publicly available encryption software in object code classified under ECCN 5D002 when the corresponding source code meets the criteria specified in §740.13(e) of the EAR (LE TSU).
Implementation rule published May 20, 2011 (76 FR 29610)
• This rule revised 53 ECCNs spanning all the Categories of the Commerce Control List, except Category 0.
• The biggest change in Category 3, where there was a total rewrite of the controls for analog to digital converter (ADC) and digital to analog converter (DAC).
New HPC NumbersWhat has changed? Old APP New APP EAR Citation
ECCN 4A003 0.75 WT 1.5 WT Supp No. 1 to part 774 (CCL) ECCN 4A003: - AT entry - Notes 1and 2 in the License Requirements section, and - 4A003.b
LE APP: deemed exports of ‘‘development’’ and ‘‘production’’ technology controlled by ECCN 4E001 and source code controlled by ECCN 4D001for foreign nationals
0.5 WT 1.5 WT § 740.7(c)(3)(ii)
LE APP: deemed exports of ‘‘development’’ and ‘‘production’’ technology controlled by ECCN 4E001 and source code controlled by ECCN 4D001 for foreign nationals of Computer Tier 3 countries
0.1 WT 0.5 WT 740.7(d)(3)(i)
De minimis for foreign-made computers when they contain U.S.-origin controlled semiconductors (other than memory circuits) classified under ECCN 3A001 and are destined to a country in Computer Tier 3 of Section 740.7 of the EAR
0.75 WT 1.5 WT § 734.4(a)(1)
Post shipment reporting requirement for high performance computer exports to destinations in Computer Tier 3, as well as exports of commodities used to enhance computers previously exported or reexported to Computer Tier 3 destinations