Archive for the ‘State Dept’ Category

House Budget Committee Proposes Moving BIS to State

Thursday, August 3rd, 2017 by Danielle McClellan

(Source: U.S. House Budget Committee Report)

The following is an excerpt (pages 49-50) from the U.S. House Budget Committee, Building a Better America: A Plan for Fiscal Responsibility.

Building a Better America recommends a different path for the Department of Commerce.

Our budget supports the recent Presidential directives established by the Trump Administration to combat the regulatory burden placed on manufacturers and streamline the permitting review and approval processes. The Memorandum on Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing (“Memorandum on Manufacturing”) provides for stakeholder engagement and feedback from the nation’s domestic manufacturers, in an effort to highlight unnecessary regulatory burdens and other administrative policies, practices, and procedures that inhibit economic growth and job creation. Our budget makes the following recommendations:

* Eliminate Corporate Welfare Programs in the Department of Commerce. Subsidies to businesses distort the economy, impose unfair burdens on taxpayers, and are especially problematic given the federal government’s fiscal situation. Programs under consideration for elimination could include the following:

  • The Hollings Manufacturing Extension Program. This program subsidizes a network of nonprofit extension centers that provide technical, financial, and marketing services for small and medium-size businesses. The private market generally provides these services. The program, which was supposed to be self-supporting, derives two-thirds of its funding from non-Federal sources.
  • The International Trade Administration [ITA]. This Department of Commerce agency provides trade-promotion services for U.S. companies. The fees it charges for its services do not cover the costs. Businesses can obtain similar services from state and local governments and the private market. Congress should eliminate the ITA or require it to charge for the full cost of these “Trade Promotion Authority” services.
  • The National Network for Manufacturing Innovation. This program, previously known as the Advanced Manufacturing Technology Consortia, provides federal grants to support research for commercial technology and manufacturing. As stated in the Heritage Foundation’s The Budget Book: “Businesses should not receive taxpayer subsidies; these long-lived and unnecessary subsidies increase federal spending and distort the marketplace. Corporate welfare to politically connected corporations should end.”

 

* Eliminate Overlap and Consolidate Necessary Department of Commerce Functions Into Other Departments. Since its establishment in 1903, the Commerce Department has expanded in size and scope to include many activities better suited at other agencies. The Department of Commerce and its various agencies and programs are rife with waste, abuse, and duplication. This budget recommends the following dissolution, delegation of authority, and consolidation measures:

  • Consolidate National Oceanic and Atmospheric Administration functions into the Department of the Interior;
  • Establish the U.S. Patent and Trademark Office as an independent agency;
  • Eliminate the International Trade Administration; o Delegate trade enforcement activities to the International Trade Commission;
  • Consolidate the Bureau of Industry and Security into the Department of State;
  • Eliminate the Economic Development Administration;
  • Consolidate trade adjustment activities within the Department of Labor, which has a duplicate program;
  • Consolidate the Minority Business Development Agency into the Small Business Administration;
  • Consolidate the National Institute of Standards and Technology and the National Technical Information Services within the National Science Foundation; o Consolidate the National Telecommunication and Information Administration into the Federal Communications Commission as an independent agency; and
  • Consolidate the United States Census Bureau and the Bureau of Economic Analysis into the Department of Labor’s Bureau of Labor Statistics.

U.S. Administration Exempts DDTC from Limit on New Regulations

Thursday, May 11th, 2017 by Danielle McClellan

Mr. Brian Nilsson, Deputy Assistant Secretary of State for Defense Trade Controls, stated at the public meeting of the Defense Trade Advisory Group (DTAG) today in Washington, DC, that DDTC is exempt from the Administration’s limit on new regulations, so plans are continuing to issue new or revised regulations this year for the following subjects:

  • Defense services
  • Public domain
  • Technical data
  • Fundamental research
  • ITAR 126.4 exemption
  • US persons abroad – registration and licensing requirements

DDTC welcomes public suggestions for amendments of the International Traffic in Arms Regulations, and for DDTC operations such as the website format, and agency training and outreach. Submit them to DDTCResponseTeam@state.gov.

DHS/CBP Posts Clarification on DDTC Implementation Guide V1.5

Thursday, March 30th, 2017 by Danielle McClellan

(Source: CSMS# 17-000091, 22 February 2017.)

New ACE Programming

[Reference CSMS# 16-000993 Updated DDTC Implementation Guide V1.6, October 2016]

“Updated DDTC Implementation Guide V1.6, October 2016” was issued on December 5, 2016 announcing the posting of DDTC Implementation Guide V1.6, dated October 2016. However, V1.6 included the PG25 line value which was determined to be Post Core work and is not yet implemented. The schedule for this implementation has not yet been determined. Therefore the current and accurate version of the DDTC Implementation Guide is V1.5, dated May 2016. It can be found at here.

Related CSMS No. 16-000993

ITAR Corrected and Additions to Parts 120, 121, 122, 124, 126 and 127

Tuesday, January 31st, 2017 by Danielle McClellan

Effective December 5, 2016, the Department of State has amended the International Traffic in Arms Regulations (ITAR) to clarify recent revisions due to Export Control Reform (ECR), the scope of disclosure of information submitted to the Directorate of Defense Trade Controls (DDTC), the policies and procedures regarding statutory debarments, as well as correcting administration and typographical errors.

The following changes have been made following this final rule:

  • A definition of ‘‘classified’’ is moved from § 121.1(e) to § 120.46;
  • The structure of § 121.1(a)–(e) is realigned, with paragraphs (a) and (b) revised to clarify the existing requirements for United States Munitions List (USML) controls, and paragraphs (c), (d) and (e) removed;
  • Thirteen USML categories are amended to clarify that commodities, software, and technology subject to the Export Administration Regulations (EAR) and related to defense articles in a USML category may be exported or temporarily imported on the same license with defense articles from any category, provided they are to be used in or with that defense article;
  • In three places within the USML, the word ‘‘enumerated’’ is replaced with the word ‘‘described’’ to make the language consistent with changes directed in the Final Rule published at 79 FR 61226, Oct. 10, 2014;
  • Section 122.4(c)(4) is revised to permit the Directorate of Defense Trade Controls (DDTC) to approve an alternative timeframe, not less than 60 days, to the current 60-day requirement for registrants to provide a signed amended agreement;
  • Section 124.2(c)(5)(v) is revised to correct errors to the USML category references for gas turbine engine hot sections, from VI(f) and VIII(b) to Category XIX;
  • Section 124.12 is amended in paragraph (a)(9) to update the name of the Defense Investigative Service to Defense Security Service;
  • Section 126.9 on Advisory Opinions and Related Authorizations is amended to correct paragraph (a);
  • Paragraph (b) of § 126.10 is amended to clarify the scope of control and disclosure of information, however, notwithstanding the changes to paragraph (b) it is the Department’s policy not to publicly release information relating to activities regulated by the ITAR except as required by law or when doing so is otherwise in the interest of the United States Government; and;
  • Section 127.7(b) is amended to clarify the policies and procedures regarding statutory debarments (addressing inadvertent omissions resulting from a prior amendment to that section), and § 127.11 is amended to make conforming revisions to paragraph (c) omitted from prior amendment to that section.

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2016-12-05/pdf/2016-28406.pdf

Man Pleads Guilty to Stealing Sensitive Military Documents from United Technologies and Exporting Them to China

Tuesday, January 31st, 2017 by Danielle McClellan

By: Danielle McClellan

Yu Long, 38, a citizen of China and permanent resident of the US, plead guilty on December 19, 2016 to one count of conspiracy to engage in the theft of trade secrets as well as one count of unlawful export and attempted export of defense articles from the US. Long worked as a Senior Engineer/Scientist at United Technologies Research Center (UTRC) from May 2008 to May 2014 where he worked on F119 and F135 engines. During this time Long always intended to return to China to work on research projects at state-run universities in China using the knowledge and materials he was acquiring at UTRC. During 2013 and 2014, Long was recruited by Shenyang Institute of automation (SIA), of China, where he substantiated claims that he could provide documents from his work at UTRC and examples of projects on which he worked.

On May 30, 2014, Long left URTC and began travelling back and forth between the US and China with a UTRC external hard drive that he unlawfully retained after his employment ended. On November 7, 2014, Long was arrested, two days after he attempted to board a plane to China with sensitive, proprietary and export controlled documents from Rolls Royce, not URTC. His checked baggage was inspected by CBP officer in Newark, NJ, where the hard drive was found with all of the proprietary, export controlled information.

After his digital media was seized it was found that he had voluminous files protected by the ITAR and EAR, as well as files proprietary to UTRC, Pratt, and Rolls Royce. UTRC confirmed that the hard drive that he stole and accessed in China contained not only documents and data from projects long worked on, but also from projects that he did not work on. It was found that he obtained Pratt and Rolls Royce proprietary information from a project that the US Air Force had convened a consortium of major defense contractors to work together to see if they could collectively lower the costs of specific metals used.

A sentencing date has not been set but Long faces a maximum term of imprisonment for 15 years for the theft of trade secrets charge and 20 years of imprisonment for violated the Arms Export Act.

More Information: https://www.justice.gov/opa/pr/chinese-national-admits-stealing-sensitive-military-program-documents-united-technologies

New Portal for Declaring Imports and Exports to CBP

Tuesday, January 31st, 2017 by Danielle McClellan

The Department of State issued a final rule which has amended the International Traffic in Arms Regulations (ITAR) to enable US Customs and Border Protection (CBP) to implement the International Trade Data System (ITDS). This system will allow importers and exporters to create only a single set of data for each import and export and they will have access the system thru an integrated web portal that will be hosted by CBP. Users may visit https:// www.cbp.gov/trade/automated for more information on the single portal. The final rule was published January 3, 2017, but was effective on December 31, 2016.

The rule makes the following changes to the ITAR (22 CRF parts 120-130):

  • Section 120.28—Listing of Forms Referred to in This Subchapter
    • Section 120.28 is revised to strike the reference to the Automated Export System and add, in its place, ‘‘U.S. Customs and Border Protection’s electronic system(s)’’.
  • Section 120.30—The Automated Export System (AES)
    • Section 120.30 is removed and reserved.
  • Section 123.4—Temporary Import License Exemptions
    • Section 123.4(d)(2) is revised to strike the reference to the Automated Export System (AES) and add, in its place, instructions to electronically file information with CBP.
  • Section 123.5—Temporary Export Licenses
    • Section 123.5(b) is revised to update certain reporting procedures and to clarify that license information will be submitted to CBP electronically.
  • Section 123.16—Exemptions of General Applicability
    • Sections 123.16(b)(4) and (5) are revised to clarify that certifications will be sent to CBP electronically and not via hard copy.
  • Section 123.17—Exports of Firearms, Ammunition, and Personal Protective Gear
    • All references to AES in § 123.17 are struck and, in their place, instructions to electronically file with CBP are inserted. Additionally, § 123.17(g)(2) and (h) are revised to update certain documentation procedures.
  • Section 123.22—Filing, Retention, and Return of Export Licenses and Filing of Export Information
    • Section 123.22 of the ITAR is revised by making certain grammatical changes and to clarify procedures for the electronic reporting of exports and temporary imports of defense articles, services, and technical data pursuant to a license or other approval. All references to AES in § 123.22 are struck and, in their place, instructions to electronically file with CBP are inserted.
    • Section 123.22(a) is revised to clarify electronic reporting procedures for exports. Paragraphs (a)(1) and (a)(2) are also revised for clarification of certain procedures.
    • Section 123.22(b)(2) is revised to clarify that emergency shipment data shall no longer be required to be sent directly to DDTC, but rather be electronically declared to CBP, which will make the data available to DDTC via an electronic data exchange.
    • Section 123.22(b)(3)(iii) is revised to update electronic reporting procedures for technical data and defense service exemptions.
    • Section 123.22(c) is revised to strike a provision relating to the return of licenses and to reorder the sub- paragraphs.
  • Section 123.24—Shipments by U.S. Postal Service
    • Section 123.24 is revised to strike references to AES and insert, in their place, instructions to electronically file with CBP. The underlying content of this section is not affected by this change.
  • Section 126.4—Shipments by or for United States Government Agencies
    • Section 126.4(d) is amended by revising the first sentence to account for electronic reporting, and by striking the second sentence.
  • Section 126.6—Foreign-Owned Military Aircraft and Naval Vessels, and the Foreign Military Sales Program
    • Section 126.6(c) is revised to clarify certain procedures relating to the declaration of information to CBP, and to remove references to form DSP–94.
    • Section 126.6(c)(5)(iii) is revised to require that the exporter provide CBP with a copy of the transportation plan under the Department of Defense National Industrial Security Program Operating Manual for shipments of classified defense articles exported pursuant to a Foreign Military Sale Letter of Offer and Acceptance. Section 126.6(c)(6)(iii) is revised to correct a punctuation error made in a previous rulemaking.
  • Section 126.16—Exemption Pursuant to the Defense Trade Cooperation Treaty Between the United States and Australia
    • Section 126.16(l) is revised to strike references to the Automated Export System and insert, in their place, instructions to electronically file with CBP. The underlying content of this section will not be affected by this change.
  • Section 126.17—Exemption Pursuant to the Defense Trade Cooperation Treaty Between the United States and the United Kingdom
    • Section 126.17(l) is revised to strike references to the Automated Export System and insert, in their place, instructions to electronically file with CBP. The underlying content of this section will not be affected by this change.

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2017-01-03/pdf/2016-31655.pdf

Final ECR Revisions for Spacecraft Published

Tuesday, January 31st, 2017 by Danielle McClellan

The Bureau of Industry and Security (BIS) has published a final rule that will be effective January 15, 2017, and will complete the administration’s goal of moving spacecraft and related items that no longer warrant control under the United states Munitions List (USML) Category XV to the Commerce Control List (CCL). This final rule addresses issues raised in, and public comments, on the interim final rule that was published on May 13, 2014 and groups the changes into four types of changes:

  1. Changes to address the movement of additional spacecraft and related items from the USML to the Commerce Control List (CCL), as a result of changes in aperture size for spacecraft that warrant ITAR control, in response to public comments and further U.S. Government review;
  2. Changes to address the movement of the James Webb Space Telescope (JWST) from the USML to the CCL;
  3. Other corrections and clarifications to the spacecraft interim final rule; and
  4. Addition of .y items to Export Control Classification Number 9A515

The first type of changes (Changes To Address the Movement of Additional Spacecraft and Related Items From the USML to the CCL) are:

  • In § 740.20, paragraph (g) (License Exception STA eligibility requests for 9×515 and ‘‘600 series’’ end items), this final rule revises paragraph (g)(1) as a conforming change to the changes made to ECCN 9A515.a, described below.
    • To maintain the same scope of paragraph (g)(1), this final rule removes the text that referred to ECCN 9A515.a and adds in its place text referencing ‘‘spacecraft’’ in 9A515.a.1, .a.2, .a.3, or .a.4, or items in 9A515.g.
    • The spacecraft in ECCN 9A515.a.5 are eligible for License Exception STA without a § 740.20(g) request. As a conforming change, this final rule adds ECCN 9E515.b, .d, .e, or .f as eligible for § 740.20(g) License Exception STA eligibility requests.
    • Because the scope of revised paragraph (g) includes items other than end items, this final rule also revises the heading of paragraph (g) to remove the term ‘‘end items’’ and add in its place the term ‘‘items.’’ However, the items eligible to be submitted under the § 740.20(g) process are still limited to those specific ECCNs and ‘‘items’’ paragraphs identified in paragraph (g).
  • The spacecraft transferred to the CCL in this final rule are subject to special regional stability license requirements. Therefore, in § 742.6 (Regional stability), this final rule makes revisions to five paragraphs.
  • The final rule revises paragraph (a)(1), adds a new paragraph (a)(8), revises paragraph (b)(1)(i), and adds paragraphs (b)(5) and (b)(6). These changes are described below.
    • In § 742.6, paragraph (a)(1) (RS Column 1 license requirements in general), this final rule adds a reference to new paragraph (a)(8).
    • New paragraph (a)(8) (Special RS Column 1 license requirement applicable to certain spacecraft and related items) is an RS Column 1 license requirement, which is specific to certain spacecraft and related items. This paragraph specifies that a license is required for all destinations, including Canada, for spacecraft and related items classified under ECCN 9A515.a.1, .a.2., .a.3., .a.4., .g, and ECCN 9E515.f.
    • Although the license requirement for these specified ECCN 9×515 items is more restrictive than for those 9×515 items on the CCL prior to publication of this rule, the license review policy is the same as those for other 9×515 items. As a conforming change, this final rule revises the fourth sentence of paragraph (b)(1)(i) to add a reference to paragraph (a)(8), because that sentence references the ECCN 9×515 license requirements, which now include those special RS license requirements in paragraph (a)(8).
  • This final rule adds two new paragraphs, paragraph (b)(5) (Spacecraft for launch) and paragraph (b)(6) (Remote sensing spacecraft) to specify the requirements that apply for license applications involving spacecraft and remote sensing spacecraft.
    • Consistent with the requirements in paragraph (y) in Supplement No. 2 to part 748 Unique Application and Submission Requirements, this final rule adds paragraphs (b)(5)(i) and (b)(5)(ii) to specify when applications to export or reexport a ‘‘spacecraft’’ controlled under ECCN 9A515.a for launch in or by a country will or may require a technology transfer control plan (DoD), an encryption technology control plan approved by the National Security Agency (NSA), and DoD monitoring of all launch activities. Paragraph (b)(5)(i) specifies that this is a requirement for all such applications for countries that are not a member of the North Atlantic Treaty Organization (NATO) or a major non-NATO ally of the United States. This final rule adds a similar requirement under paragraph (b)(5)(ii), but with the key distinction that it may require for countries that are a member of NATO or a major non-NATO ally of the United States.  (TCP) approved by the Department of Defense
  • Also in § 742.6, this final rule adds a new paragraph (b)(6) (Remote sensing spacecraft) to make applicants aware that any application for ‘‘spacecraft’’ described in ECCN 9A515.a.1,.a.2, a.3, or .a.4, for sensitive remote sensing components described in 9A515.g, or for ‘‘technology’’ described in ECCN 9E515.f, may require a government-to- government agreement at the discretion of the U.S. Government. A government- to-government agreement may be required for any destination at the sole discretion of the U.S. Government.
  • In § 750.4 (Procedures for processing license applications), as conforming changes to the changes described above to § 742.6, this final rule makes the following two changes: adds a new paragraph (b)(8), and adds a new paragraph (d)(2)(iv). These changes are described in the next two paragraphs.
  • In § 750.4, consistent with the requirements in paragraph (y) in Supplement No. 2 to part 748 Unique Application and Submission Requirements, this final rule adds a new paragraph (b)(8) (Satellites for launch) to include a requirement for license applications involving a satellite for launch.
    • Applicants must obtain approval by the DoD of a technology transfer control plan and the approval of the NSA of an encryption technology control plan.
    • In addition, the applicant will also be required to make arrangements with the DoD for monitoring of all launch activities.
    • These existing DoD and NSA requirements in regards to satellites for launch are in addition to the EAR licensing requirements, but any license authorized under the EAR for satellites for launch must also be done in accordance with those DoD and NSA requirements to be authorized under an EAR license. Therefore, this final rule adds this requirement to § 750.4(b)(8), which will eliminate the need to add this requirement as a license condition for any license for satellites for launch.
    • These DoD and NSA TCP approval requirements existed under the ITAR and are added to the EAR to preserve the status quo. Therefore, although this paragraph adds three new requirements to the EAR for license applications for spacecraft for launch, the requirements are the same as when these spacecraft were formerly under the ITAR, so there will be no increased burden on exporters, reexporters or transferors.
  • In § 750.4, this final rule adds a new paragraph (d)(2)(iv) (Remote Sensing Interagency Working Group (RSIWG)) to make applicants aware that the RSIWG, chaired by the State Department, will review license applications involving remote sensing spacecraft. These will be any items described in ECCN 9A515.a.1, .a.2, .a.3, or .a.4, sensitive remote sensing components described in 9A515.g, or ‘‘technology’’ described in 9E515.f.
  • ECCN 9A515: This final rule adds a new License Requirement Note, revises the Special Conditions for STA section, revises ‘‘items’’ paragraph (a), and adds paragraph (g) in the List of ‘‘items’’ controlled section of ECCN 9E515. These changes are described in the next five paragraphs.
  • Addition of License Requirement Note to 9A515. As a conforming change to the addition of § 742.6(a)(8), described above, this final rule adds a License Requirement Note to the end of the License Requirements section of ECCN 9A515 to specify that the Commerce Country Chart is not used for determining license requirements for commodities classified as 9A515.a.1, .a.2., .a.3., .a.4, and .g. The new License Requirement also includes a cross reference to § 742.6(a)(8) and alerts exporters and reexporters that these commodities are subject to a worldwide license requirement.
  • In ECCN 9A515, Special Conditions for STA section, this final rule revises paragraph (1). This final rule adds references to the new ‘‘items’’ paragraphs of ECCN 9A515.a (9A515.a.1, .a.2, .a.3 and .a.4) and 9A515.g, which would not be eligible for License Exception STA, unless determined by BIS to be eligible for License Exception STA in accordance with § 740.20(g) (License Exception STA eligibility requests for certain 9×515 and ‘‘600 series’’ end items). Because these items are commodities that are more sensitive, additional U.S. Government review of the specific commodity is warranted prior to allowing exporters, reexporters or transferors to use License Exception STA. The imposition of this requirement is consistent with the use of the paragraph (g) process for other sensitive items in the 9×515 ECCNs and the ‘‘600 series’’ that have been moved to the CCL. Also in the Special Conditions for STA section, this final rule redesignates paragraph (2) as paragraph (3) and adds a new paragraph (2). This final rule adds new paragraph (2) in the Special Conditions for STA section to exclude the use of License Exception if the ‘‘spacecraft’’ controlled in ECCN 9A515.a.1, .a.2, .a.3, or .a.4 contains a separable or removable propulsion system enumerated in USML Category IV(d)(2) or USML Category XV(e)(12) and designated MT. This exclusion is being added because the MTCR Category I components identified in this paragraph are separable or removable and therefore for consistency with the intent to exclude MT items from License Exception STA eligibility, this final rule adds this as an additional restriction on the use of License Exception STA.
  • In ECCN 9A515.a, this final rule revises ‘‘items’’ paragraph (a) to add control parameters for the additional spacecraft being moved from the USML to the CCL. Spacecraft moved from the USML to the CCL and classified under ECCN 9A515.a prior to publication of this rule are being moved to new ‘‘items’’ paragraph (a)(5). This final rule adds ‘‘items’’ paragraphs (a)(1), (a)(2), (a)(3) and (a)(4) to ECCN 9A515 to control the additional spacecraft items being moved to the CCL. The identification of these more sensitive spacecraft items in their own ‘‘items’’ level paragraph in ECCN 9A515 (9A515.a.1, .a.2, .a.3., .a.4) will allow for the imposition of more restrictive controls that are needed, while not impacting other spacecraft and related items that do not warrant the more restrictive controls (e.g., 9A515.a.5). These more restrictively controlled items consist of the following: ‘‘spacecraft,’’ including satellites, and space vehicles, whether designated developmental, experimental, research or scientific, not enumerated in USML Category XV or described in ECCN 9A004 that have electro-optical remote sensing capabilities and having a clear aperture greater than 0.35 meters, but less than or equal to 0.50 meters (under ECCN 9A515.a.1). It includes those having remote sensing capabilities beyond NIR (under ECCN 9A515.a.2), those having radar remote sensing capabilities (e.g., AESA, SAR, or ISAR) having a center frequency equal to or greater than 1.0 GHz, but less than 10.0 GHz and having a bandwidth equal to or greater than 100 MHz, but less than 300 MHz (under 9A515.a.3). These more sensitive items being moved from the USML to the CCL also include those providing space-based logistics, assembly, or servicing of another ‘‘spacecraft’’ (under ECCN 9A515.a.4).
  • In ECCN 9A515.g, this final rule also adds ‘‘items’’ paragraph (g) to 9A515, as related to the changes described above to 9A515.a. Paragraph (g) is added to control remote sensing components that are ‘‘specially designed’’ for ‘‘spacecraft’’ described in ECCN 9A515.a.1 though 9A515.a.4, which were described above. Similar to the reason for identifying the items in ECCN 9A515.a.1 through .a.4., specifying that these remote sensing components are the ‘‘items’’ paragraphs (g)(1) through (g)(3) will allow the imposition of more restrictive controls on these components, without needing to impose the same level of restrictions on 9A515.x items, which is the paragraph under which these components would have been controlled if this new 9A515.g paragraph were not being added. Paragraph (g) controls remote sensing components for space-qualified optics with the largest lateral clear aperture dimension equal to or less than 0.35 meters; or with the largest clear aperture dimension greater than 0.35 meters but less than or equal to 0.50 meters (under ECCN 9A515.g.1). In addition, paragraph (g) controls optical bench assemblies ‘‘specially designed’’ for the spacecraft added to ECCN 9A515.a.1 through .a.4 (under ECCN 9A515.g.2), and primary, secondary, or hosted payloads that perform a function of spacecraft added to 9A515.a.1. through .a.4. (under 9A515.g.3).
  • ECCN 9E515: This final rule adds a new License Requirement Note, revises the Special Conditions for STA section and ‘‘items’’ paragraph (a), and adds ‘‘items’’ paragraph (f) in the List of ‘‘items’’ controlled section of ECCN 9E515. These changes are described in the next five paragraphs:
    • Addition of License Requirement Note to 9E515. As a conforming change to the addition of § 742.6(a)(8), described above, this final rule adds a License Requirement Note to the end of the License Requirements section of ECCN 9E515 to specify that the Commerce Country Chart is not used for determining license requirements for ‘‘technology’’ classified 9E515.f. The new License Requirement also includes a cross reference to § 742.6(a)(8) and alerts exporters and reexporters that this ‘‘technology’’ is subject to a worldwide license requirement.
    • In ECCN 9E515, Special Conditions for STA section, this final rule revises paragraph (1) to add a reference to 9E515.f. This final rule specifies that such technology is not eligible for STA, unless the specific technology has been approved under the § 740.20(g) process by the U.S. Government. This change is made to conform to the addition described below of ‘‘technology’’ under ECCN 9E515.f for the additional spacecraft and related components added to 9A515.a and .g described above. In addition, this final rule also specifies that the ‘‘technology’’ controlled under ECCN 9E515.b, .d and .e are not eligible for License Exception STA, unless the specific ‘‘technology’’ has been approved under the § 740.20(g) process by the U.S. Government. Prior to publication of this final rule, ECCN 9E515.b, .d and .e ‘‘technology’’ was excluded from License Exception STA in all cases, which based on public comments and interagency discussions was a more restrictive policy than was needed to protect U.S. national security and foreign policy interests for this ‘‘technology’’ classified under ECCN 9E515. Therefore, this final rule makes the other ‘‘technology’’ (9E515.b, .d and .e) also eligible for the requests under § 740.20(g), as described above in the changes this final rule makes to paragraph (g) of License Exception STA.
    • In ECCN 9E515.a, this final rule revises ‘‘items’’ paragraph (a) to exclude the ‘‘technology’’ for the new commodities added to 9A515.a (.a.1 through .a.4) and .g. ‘‘Required’’ ‘‘technology’’ for these new commodities added to ECCN 9A515.a and .g will be controlled under ECCN 9E515, but in order to impose more restrictive controls on those ‘‘technologies’’ without impacting other 9E515 ‘‘technology,’’ this final rule adds this ‘‘technology’’ being moved to the CCL to a new ‘‘items’’ paragraph (f) to 9E515, as described below.
    • In ECCN 9E515.f, this final rule adds a new ‘‘items’’ paragraph (f) in the List of Items Controlled section to control ‘‘technology’’ ‘‘required’’ for the ‘‘development,’’ ‘‘production,’’ installation, repair, overhaul, or refurbishing of commodities that this final rule adds to ECCN 9A515 under ‘‘items’’ paragraphs .a.1 through .a.4, or .g. As described above, this final rule is identifying these ‘‘technologies’’ in their own ‘‘items’’ paragraph in order to allow more restrictive controls to be placed on these items without impacting other ECCN 9E515 ‘‘technology.’’

 

The second types of changes (Changes To Address the Movement of the James Webb Space Telescope (JWST) From the USML to the CCL) are:

  • ECCN 9A004: This final rule revises ECCN 9A004 to add a specific telescope, which was ‘‘subject to the ITAR’’ prior to the effective date of this final rule. A determination was made based on the public comments received by the Department of State and the space interagency working group (a group of U.S. Government agencies involved in the export control system and that deal with space related issues) that this specific telescope was within the scope of spacecraft and related items that did not warrant being subject to the ITAR. Therefore, consistent with the stated purpose of the May 13 rule, as well as section 38(f) of the Arms Export Control Act (AECA), the Department of State has moved this telescope, the James Webb Space Telescope (JWST), which is being developed, launched, and operated under the supervision of the U.S. National Aeronautics and Space Administration (NASA), to the CCL. The ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ that are ‘‘specially designed’’ for use in or with the JWST are also being moved from the ITAR and will be subject to the EAR, as of the effective date of the State and Commerce final rules.
  • To control the JWST and the ‘‘specially designed’’ ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ for the JWST, this final rule adds two new ‘‘items’’ paragraph to ECCN 9A004. First, this final rule adds a new ‘‘items’’ paragraph (u) to 9A004 to control the JWST (the specific telescope) that is being moved to the CCL from the USML. Second, this final rule adds a new ‘‘items’’ paragraph (v) to control the ‘‘specially designed’’ ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ or ‘‘attachments’’ for use in or with the JWST. The commodities this final rule adds to ECCN 9A004.v include the primary and secondary payloads of the JWST.
  • This final rule also specifies in the control parameters in the new paragraph (v)(1) to (v)(4) that the ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ specified in paragraph (v) do not include items that are ‘‘subject to the ITAR,’’ microelectronic circuits, items in ECCNs 7A004 and 7A104, or in any ECCN containing ‘‘space qualified’’ as a control criterion (See ECCN 9A515.x.4). As a conforming change, this final rule revises the phrase ‘‘ECCN 9A004.x’’ in paragraph (y) to add a reference to the ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ in paragraph (v) that this final rule adds. This final rule revises the phrase, so it now specifies ‘‘ECCN 9A004.v or .x,’’ which is being done to account for the fact that paragraphs (v) and (x) will contain certain ‘‘specially designed’’ ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ for items enumerated in ECCN 9A004 and that the new items being added to paragraph (v) and (x) could be reclassified under 9A004.y, if subsequently the specific item is identified in an interagency-cleared commodity classification (CCATS) pursuant to § 748.3(e) as warranting control in 9A004.y. BIS anticipates an increase of approximately 20 license applications per year as a result of these changes to the EAR.
  • In addition to the change to ECCN 9A004, this final rule makes changes to three 9×515 ECCNs to reflect that the JWST and the ‘‘specially designed’’ ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ for the JWST are being added to 9A004. This final rule makes these conforming changes to ECCNs 9A515, 9B515 and 9E515. These are not substantive changes. These changes are described in the next three paragraphs.
  • ECCN 9A515. This final rule revises the third sentence of the Related Controls paragraph in the List of Items Controlled section of ECCN 9A515 to add a reference to the JWST. This final rule also revises the Note to ECCN 9A515.a to specify items in ECCN 9A004 are not within the scope of 9A515.a. A reference to ECCN 9A004 needs to be added because the description of this Note to ECCN 9A515.a would otherwise include the JWST. This final rule revises ‘‘items’’ paragraph (b) in ECCN 9A515, to add a reference to ECCN 9A004.u for the JWST. This conforming change is needed to specify that ground control systems and training simulators ‘‘specially designed’’ for telemetry, tracking and control of the JWST are also within the scope of ECCN 9A515.b. For similar reasons, this final rule revises ‘‘items’’ paragraph (e) to add a reference to ECCN 9A004.u. This conforming change is made to specify that the microelectronic circuits and discrete electronic components described in ECCN 9A515.e include those ‘‘specially designed’’ for the JWST. This final rule also makes some changes to the .y paragraph in ECCN 9A515, which are discussed further below.
  • ECCN 9B515. This final rule revises ‘‘items’’ paragraph (a) in the List of Items Controlled section to add a reference to ECCN 9A004.u. This conforming change is needed to specify that the test, inspection, and production ‘‘equipment’’ ‘‘specially designed’’ for the ‘‘production’’ or ‘‘development’’ of the JWST are also classified under ECCN 9B515.a. For similar reasons, this final rule revises the Note to ECCN 9B515.a to add a reference to ECCN 9A004.u. This conforming change is intended to specify that ECCN 9B515.a includes equipment, cells, and stands ‘‘specially designed’’ for the analysis or isolation of faults in the JWST, in addition to the other commodities enumerated in the Note to ECCN 9A515.a.
  • ECCN 9E515: This final rule also revises the third sentence in the ‘‘Related Controls’’ paragraph in the List of Items Controlled section in ECCN 9E515 to add a reference to the JWST. This sentence will alert persons classifying technology for the JWST to see ECCNs 9E001 and 9E002.

The third types of changes are (Other Corrections and Clarifications to Interim Spacecraft Final Rule):

  • ECCN 9A515: This final rule adds two sentences at the end of the introductory text in the ‘‘items’’ paragraph in the List of Items Controlled section of ECCN 9A515, consistent with the notes to USML Category XV. The introductory paragraph clarifies when ‘‘spacecraft’’ and other items described in ECCN 9A515 remain subject to the EAR even if exported, reexported, or transferred (in-country) with defense articles ‘‘subject to the ITAR’’ integrated into and included therein as integral parts of the item. This introductory paragraph includes some application examples and some qualifiers for when the ITAR jurisdiction would reapply to such defense articles. This final rule adds two new sentences to clarify two additional instances where the jurisdiction of the ITAR would be applicable in such scenarios. The first new sentence is being added to clarify that the removal of a defense article subject to the ITAR from the spacecraft is a retransfer under the ITAR—meaning the removal of a defense article would require an ITAR authorization. The ITAR authorization requirement would apply regardless of which CCL authorization the spacecraft is exported under the EAR. The second sentence clarifies that transfer of technical data regarding the defense article subject to the ITAR integrated into the spacecraft would require an ITAR authorization.
  • ECCN 9B515: This final rule revises the License Requirements section of ECCN 9B515 to add a missile technology (MT) control. The MT control is being added to impose a license requirement on equipment in ECCN 9B515.a that is for the ‘‘development’’ or ‘‘production’’ of commodities in USML Category XV(e)(12) and XV(e)(19) that are MT controlled. This change is made to conform to the Missile Technology Control Regime (MTCR) Annex and the corresponding MT controls in USML Category XV (MTCR Annex, Category I: Item 2.B.2.). BIS anticipates an increase of approximately 10 license applications per year as a result of this change to the EAR, along with the conforming MT change made to ECCN 9E515 described in the next paragraph.
  • ECCN 9E515: This final rule, as a conforming change to the change to ECCN 9B515, revises the MT Control paragraph in the License Requirements section on ECCN 9E515. This final rule revises the MT Control paragraph in ECCN 9E515 to add technology for items in 9B515.a that are controlled for MT reasons. This change is made to conform to the MTCR Annex and the corresponding MT controls in USML Category XV (MTCR Annex, Category I: Item 2.E.1.).

The fourth type (Addition of .y Items to ECCN 9A515) of changes:

  • This final rule adds five .y paragraphs (ECCN 9A515.y.2, .y.3., .y.4, .y.5, and .y.6) as additional commodities specified under paragraph (y) in this ECCN. As noted in the introductory text of paragraph (y), the U.S. Government through the § 748.3(e) process will identify the items that warrant being classified under 9×515.y, such as the commodities being specified under ECCN 9A515.y.2 to .y.6 in this final rule. Specifically, the following space grade or for spacecraft applications commodities: thermistors (ECCN 9A515.y.2); RF microwave bandpass ceramic filters (dielectric resonator bandpass filters) (9A515.y.3); space grade or for spacecraft applications hall effect sensors (9A515.y.4); subminiature (SMA and SMP) plugs and connectors, TNC plugs and cable and connector assemblies with SMA plugs and connectors (9A515.y.5); and flight cable assemblies (9A515.y.6) have been identified in interagency-cleared commodity classifications (CCATS) pursuant to § 748.3(e) as warranting control in 9A515.y.2 to .y.6. The additions described above for ECCN 9A515.y.2 to y.6 are the second set of approved populations of .y controls being added to 9A515. As stated in the May 13 rule, as well as the July 13 rule (which added ECCN 9A515.y.1), BIS (along with State and Defense) will continue to populate the 9A515.y with additional entries as additional classification determinations are made in response to requests from the public under § 748.3(e).

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2017-01-10/pdf/2016-31755.pdf

State/DDTC Posts Revision 4.4b of Guidelines for Preparing Agreements

Tuesday, November 15th, 2016 by Danielle McClellan

(Source: State/DDTC)

Summary of Changes:

This revision reflects conforming changes to the latest ITAR updates from 81 FR 66804 and 81 FR 54732. It also adds administrative clarifications for some of the changes made in Revision 4.4. The changes from 81 FR 54732 will go into effect on 15 November 2016.

Conforming Changes Resulting from the latest ITAR Revisions:

  • Updates the DCS references to reflect the changes to § 123.9(b)(iv), § 124.9(a)(6) and §124.14(c)(7)
  • Adds a statement listing the sales territory to the § 124.7(a)(4) paragraph of MLAs
    • Sec 5.2.c.4, Appendix A – Tabs 3 and 7
  • Updates references to § 126.1 countries
  • Updates references from § 124.7 to § 124.7(a) to reflect the new ITAR designations*
  • Updates references from § 124.8 to § 124.8(a) to reflect the new ITAR designations*#

As there were over 100 instances of § 124.7 and § 124.8 in the Agreements Guidelines, and since the changes were purely administrative in nature, the updated references have not been highlighted in all instances.

This change affects all the required Option 2 DN/TCN request statements in Section 3.5.

Clarifications:

  • Clarifies that conforming statement changes should be updated at the next amendment, whether major or minor
  • Clarifies that § 126.18(c) and § 126.18(d) are separate vetting options (Sec 3.5.b, Fig 3.1)
  • Clarifies how to update Space Insurance amendments when adding the conforming changes
  • Clarifies that Section 20.4.g applies to reexports and retransfers
  • Adds Appendix G – Summary of Changes from Revisions 4.4 and 4.4a

Applicants are not required to submit an amendment for the sole purpose of updating the revised statements in Revisions 4.4 and 4.4b, or to reflect other conforming changes. However, the conforming changes should be made at the next amendment, whether major or minor. All new agreement/amendment applications submitted after November 15, 2016, should conform to all the changes in Revision 4.4b. If the changes have not been made, provisos will be added instructing the applicant to make the changes prior to execution. Applicants may submit agreements that conform to the changes in Revision 4.4b prior to November 15.

Notes: The ITAR updates in 81 FR 54732 go into effect on November 15, 2016. Applicants are responsible for notifying their foreign signatories of these changes.

Existing NDAs remain valid. Sublicensees and DN/TCNs are not required to re-execute NDAs.

DDTC Posts IT Modernization Webinar: Commodity Jurisdiction

Tuesday, November 15th, 2016 by Danielle McClellan

(Source: State/DDTC)

The webinar presented October 14, 2016 regarding the upcoming deployment of Defense Export Control and Compliance System (DECCS) Release 1 is available for review. The webinar provided a brief overview of the status of the IT Modernization effort and a demonstration of the new Commodity Jurisdiction (CJ) (DS-4076) interface.

Click here to read
Recorded webinar
Presentation slides

State/DDTC No Longer Accepts CJ Submission through EFS

Tuesday, November 15th, 2016 by Danielle McClellan

(Source: State/DDTC)

Effective Wednesday, November 16th at 5PM EST, The Department of State will no longer use the Electronic Form Submission (EFS) application to accept Commodity Jurisdiction (CJ) (DS-4076) applications. Beginning Monday, November 21st at 8AM EST users will submit CJ applications via the Defense Export Control and Compliance (DECCS) CJ application.