[Federal Register: March 7, 2005 (Volume 70, Number 43)]
[Rules and Regulations]
[Page 10865-10868]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07mr05-5]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Part 744
[Docket No. 041222360-4360-01]
RIN 0694-AD24
Licensing Policy for Entities Sanctioned Under Specified
Statutes; License Requirement for Certain Sanctioned Entities; and
Imposition of License Requirement for Tula Instrument Design Bureau
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule states BIS's licensing policy regarding transactions
involving entities sanctioned by the State Department under three
specified statutes, imposes a new license requirement for certain
entities sanctioned by the State Department, and identifies one
specific entity subject to this new license requirement, Tula
Instrument Design Bureau of Russia.
DATES: This rule is effective March 7, 2005. Comments must be received
by May 6, 2005.
ADDRESSES: Comments may be submitted by e-mail to rpd2@bis.doc.gov, by
fax at (202) 482-3355, or on paper to Regulatory Policy Division,
Office of Exporter Services, Bureau of Industry and Security, Room
H2705, U.S. Department of Commerce, 14th Street and Pennsylvania
Avenue, NW., Washington, DC 20230. Refer to Regulatory Identification
Number (RIN) 0694-AD24 in all comments. Comments on the information
collection should also be sent to David Rostker, Office of Management
and Budget Desk Officer, by e-mail at david_rostker@omb.eop.gov, or by
fax to (202) 395-7285. Refer to Regulatory Identification Number (RIN)
0694-AD24 in all comments.
FOR FURTHER INFORMATION CONTACT: William Arvin, Regulatory Policy
Division, Office of Exporter Services at warvin@bis.doc.gov or (202)
482-2440.
SUPPLEMENTARY INFORMATION: Several statutes authorize or require the
United States Government to impose export sanctions on entities if such
entities have engaged in activities that contribute to the
proliferation of weapons of mass destruction or are otherwise contrary
to the foreign policy interests of the United States. This rule sets
forth BIS's licensing policy for entities subject to sanctions imposed
by the State Department under the Iran-Iraq Arms Nonproliferation Act
of 1992 (Pub. L. 102-484), the Iran Nonproliferation Act of 2000 (Pub.
L. 107-178) and section 11B(b)(1) of the Export Administration Act of
1979 (also known as the Missile Technology Control Act of 1990). This
rule also imposes a new license requirement for certain entities
sanctioned by the State Department, and identifies one specific entity,
Tula Instrument Design Bureau of Russia, subject to this new license
requirement.
Licensing Policy for Transactions Involving Sanctioned Entities
This rule amends the Export Administration Regulations (EAR) by
adding new Sec. 744.19 to set forth explicitly BIS's licensing policy
regarding entities sanctioned by the State Department under the
authority of three statutes. Specifically, new Sec. 744.19 provides
that BIS's policy is to deny any export or reexport license application
if the applicant, other party authorized to receive the license,
purchaser, intermediate consignee, ultimate consignee, or end-user is
subject to: (1) A sanction issued pursuant to the Iran-Iraq Arms
Nonproliferation Act of 1992 (Pub. L. 102-484) that prohibits the
issuance of any license for any export by or to the sanctioned person
or, (2) a sanction issued pursuant to the Iran Nonproliferation Act of
2000 (Pub. L. 107-178) that prohibits the granting of a license for the
transfer to foreign persons of items, the export of which is controlled
under the Export Administration Regulations, or (3) a sanction issued
pursuant to section 11B(b)(1)(B)(ii) of the Export Administration Act
of 1979, as amended (also known as the Missile Technology Control Act
of 1990), that prohibits the issuance of new licenses for exports to
the sanctioned entity of items controlled pursuant to the Export
Administration Act of 1979. In addition, Sec. 744.19 sets forth BIS's
policy to deny any export or reexport application for items listed on
the Commerce Control List with missile technology (MT) listed as a
reason for control if any entity subject to a sanction issued pursuant
to section 11B(b)(1)(B)(i) of the Export Administration Act of 1979, as
amended, is a party to the transaction. Section 11B(b)(1)(B)(i)
prohibits the issuance of new individual licenses for exports to the
sanctioned entity of MTCR annex equipment or technology controlled
pursuant to the Export Administration Act of 1979.
The State Department publishes notices of the imposition of
sanctions under these three statutes in the Federal Register. Because
they do not involve the imposition of any new license requirements, the
sanctions do not require amendment of the EAR and, prior to publication
of this rule, were not incorporated into or otherwise referenced in the
EAR. The sanctions imposed under the three statutes, however, prescribe
the licensing policy that BIS must apply to applications that involve
the transfer of certain items to, and in the case of the Iran-Iraq Arms
Nonproliferation Act of 1992 by, the sanctioned entity. New Sec.
744.19 provides a reference to these sanctions in the EAR and also sets
forth BIS's policy that a license application is subject to a general
policy of denial if a sanctioned entity is listed as any party to the
transaction, including the purchaser or intermediate consignee, on the
license application.
New License Requirement
This rule adds new Sec. 744.20 to the EAR to provide that BIS may
impose, as new foreign policy controls, license requirements on exports
and reexports of items subject to the EAR to entities sanctioned by the
State Department. Such license requirements are in addition to those
imposed by other provisions of the EAR. Decisions to impose such
license requirements will be made on a case-by-case basis. In
determining whether to impose license requirements pursuant to Sec.
744.20, BIS will consider the nature of the action that led to the
State Department sanction and whether, because of that action, such
sanctioned parties would not be reliable parties to export or reexport
transactions subject to the EAR.
[[Page 10866]]
License requirements imposed pursuant to Sec. 744.20 are foreign
policy controls imposed pursuant to the provisions of Sec. 6 of the
Export Administration Act of 1979. License requirements pursuant to
Sec. 744.20 will be imposed by adding the sanctioned entity to the
Entity List (Supplement No. 4 to part 744). The Entity List entry will
also refer to Sec. 744.20, state the license requirements that apply
to the entity, what license exceptions, if any, are available, and the
licensing policy that applies to the entity.
Addition of an Entity to the Entity List Pursuant to New Sec. 744.20
This rule imposes a license requirement under new Sec. 744.20 for
exports or reexports to Tula Instrument Design Bureau (all locations
including at Tula 300001, Russia) of the government of the Russian
Federation (Tula) for all items subject to the EAR having a
classification other than EAR99, prohibits use of any License Exception
for such exports or reexports, and imposes a general policy of denial
for all license applications to export or reexport to Tula. The rule
adds Tula to the Entity List (Supplement No. 4 to part 744 of the EAR).
On April 21, 1999, the State Department found, inter alia, that
Tula was a Government of Russia entity that was specifically involved
in the transfer of lethal military equipment to a country determined by
the Secretary of State to be a state sponsor of terrorism. Because of
that finding, the State Department determined that ``the policy of the
United States Government [is] to deny U.S. Government Assistance to
[Tula]'' (see 64 FR 23148, April 29, 1999). BIS is imposing this
license requirement, prohibition on use of license exceptions, and
policy of denial, to further the foreign policy interest of the United
States in deterring the transfer of lethal military equipment to state
sponsors of terrorism.
This action is a new foreign policy control imposed pursuant to the
requirements of Sec. 6 of the Export Administration Act and requires a
report to Congress. The report was delivered to Congress on February
25, 2005.
Although the Export Administration Act of 1979 (EAA), as amended,
expired on August 20, 2001, Executive Order 13222 of August 17, 2001 (3
CFR, 2001 Comp., p. 783 (2002)) as extended by the Notice of August 6,
2004, 69 FR 48763 (August 10, 2004), continues the EAR in effect under
the International Emergency Economic Powers Act (IEEPA).
Savings Clause
Exports and reexports that did not require a license or that were
eligible for a License Exception prior to publication of this rule and
for which this rule imposes a new license requirement or removes that
License Exception availability may be made without a license or under
that License Exception if the items being exported or reexported were
on dock for loading, on lighter, laden aboard an exporting carrier, or
en route aboard a carrier to a port of export pursuant to actual orders
for export or reexport on or before March 22, 2005, and exported or
reexported on or before April 6, 2005. Any such exports or reexports
not meeting those deadlines require a license in accordance with this
rule.
Rulemaking Requirements
1. This rule has been determined not to be significant for purposes
of Executive Order 12866.
2. Notwithstanding any other provision of law, no person is
required to respond to nor 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 the OMB under control numbers 0694-
0088, ``Multi-Purpose Application,'' which carries a burden hour
estimate of 58 minutes to prepare and submit form BIS-748.
Miscellaneous and recordkeeping activities account for 12 minutes per
submission. Burden hours associated with the Paperwork Reduction Act
and Office and Management and Budget control number 0694-0088 are not
impacted by this regulation. Send comments regarding these burden
estimates or any other aspect of these collections of information,
including suggestions for reducing the burden, to David Rostker, OMB
Desk Officer, by e-mail at david_rostker@omb.eop.gov or by fax to
(202) 395-7285; and to the Regulatory Policy Division, Bureau of
Industry and Security, Department of Commerce, P.O. Box 273,
Washington, DC 20044.
3. This rule does not contain policies with federalism implications
as that term is defined in Executive Order 13132.
4. The provisions of the Administrative Procedure Act (5 U.S.C.
553) requiring notice of proposed rulemaking, the opportunity for
public participation, and a delay in effective date, are inapplicable
because this regulation involves a military or foreign affairs function
of the United States (see 5 U.S.C. 553(a)(1)). Further, no other law
requires that a notice of proposed rulemaking and an opportunity for
public comment be given for this rule. 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. However, BIS is issuing this rule in
interim final form with a request for comments.
Request for Comments
BIS is seeking public comments on this interim final rule. The
period for submission of comments will close May 6, 2005. BIS will
consider all comments received on or before that date in developing any
final rule. Comments received after that date will be considered if
possible, but their consideration cannot be assured. BIS will not
accept public comments accompanied by a request that a part or all of
the material be treated confidentially because of its business
proprietary nature or for any other reason. BIS will return such
comments and materials to the persons submitting the comments and will
not consider them in the development of the final rule. All public
comments on this proposed rule must be in writing (including fax or e-
mail) and will be a matter of public record, available for public
inspection and copying. The Office of Administration, Bureau of
Industry and Security, U.S. Department of Commerce, displays these
public comments on BIS's Freedom of Information Act (FOIA) Web site at
http://www.bis.doc.gov/foia. This office does not maintain a separate
public inspection facility. If you have technical difficulties
accessing this Web site, please call BIS's Office of Administration at
(202) 482-0637 for assistance.
List of Subjects in 15 CFR Part 744
Exports, Reporting and recordkeeping requirements, Terrorism.
0
For the reasons set forth in the preamble, part 744 of the Export
Administration Regulations (15 CFR parts 730-799) is amended as
follows:
PART 744--[AMENDED]
0
1. The authority citation for part 744 continues to read as follows:
[[Page 10867]]
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; Sec. 901-911, Pub. L. 106-
387; Sec. 221, Pub. L. 107-56; 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. 12947, 60
FR 5079, 3 CFR, 1995 Comp., p. 356; 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 August 6, 2004, 69
FR 48763 (August 10, 2004); Notice of November 4, 2004, 69 FR 64637
(November 8, 2004).
0
2. In Sec. 744.1, add two sentences immediately following the eighth
sentence in paragraph (a)(1) and revise the third sentence of paragraph
(c) to read as follows:
Sec. 744.1 General provisions.
(a)(1) Introduction. * * * Section 744.19 sets forth BIS's
licensing policy for applications for exports or reexports when a party
to the transaction is an entity that has been sanctioned pursuant to
any of three specified statutes that require certain license
applications to be denied. Section 744.20 requires a license, to the
extent specified in Supplement No. 4 to this part, for exports and
reexports of items subject to the EAR destined to certain sanctioned
entities listed in Supplement No. 4 to this part. * * *
* * * * *
(c) * * * No License Exceptions are available for exports and
reexports to listed entities of specified items, except License
Exceptions for items listed in Sec. 740.2(a)(5) of the EAR destined to
listed Indian or Pakistani entities to ensure the safety of civil
aviation and safe operation of commercial passenger aircraft, and in
the case of entities added to the Entity List pursuant to Sec. 744.20,
to the extent specified on the Entity List.
0
3. In part 744, add Sec. 744.19 to read as follows:
Sec. 744.19 Licensing policy regarding persons sanctioned pursuant to
specified statutes.
Notwithstanding any other licensing policy elsewhere in the EAR,
BIS will deny any export or reexport license application if the
applicant, other party authorized to receive a license, purchaser,
intermediate consignee, ultimate consignee, or end-user is subject to
one or more of the sanctions described in paragraphs (a), (b), and (c)
of this section and will deny any export or reexport license
application for an item listed on the Commerce Control List with a
reason for control of MT if such party is subject to a sanction
described in paragraph (d) of this section.
(a) A sanction issued pursuant to the Iran-Iraq Arms
Nonproliferation Act of 1992 (Public Law 102-484) that prohibits the
issuance of any license to or by the sanctioned entity.
(b) A sanction issued pursuant to the Iran Nonproliferation Act of
2000 (Public Law 106-178) that prohibits the granting of a license for
the transfer to foreign entities of items, the export of which is
controlled under the Export Administration Act of 1979 or the Export
Administration Regulations.
(c) A sanction issued pursuant to section 11B(b)(1)(B)(i) of the
Export Administration Act of 1979, as amended, and as carried out by
Executive Order 13222 of August 17, 2001, that prohibits the issuance
of new licenses for exports to the sanctioned entity of items
controlled pursuant to the Export Administration Act of 1979.
(d) A sanction issued pursuant to section 11B(b)(1)(B)(ii) of the
Export Administration Act of 1979, as amended (Missile Technology
Control Act of 1990), and as carried out by an Executive Order 13222 of
August 17, 2001, that prohibits the issuance of new licenses for
exports to the sanctioned entity of MTCR Annex equipment or technology
controlled pursuant to the Export Administration Act of 1979.
0
4. In part 744, add Sec. 744.20 to read as follows:
Sec. 744.20 License requirements that apply to certain sanctioned
entities.
BIS may impose, as foreign policy controls, export and reexport
license requirements and set licensing policy with respect to certain
entities that have been sanctioned by the State Department. Such
license requirements and policy are in addition to those imposed
elsewhere in the EAR. License requirements and licensing policy may be
imposed pursuant to this section even when the sanction and the legal
authority under which the State Department imposed the sanction do not
require or authorize the imposition of any license requirement or
licensing policy. License requirements and licensing policy will be
imposed pursuant to this section by adding an entity to the Entity List
in accordance with paragraphs (a), (b), and (c) of this section.
(a) General requirement. Certain entities that have been sanctioned
by the State Department are listed in Supplement No. 4 to this part
(the Entity List) with a reference to this section. A license is
required, to the extent specified on the Entity List, to export or
reexport any item to such entities.
(b) License exceptions. No license exception may be used to export
or reexport to such entities unless specifically authorized on the
Entity List.
(c) Licensing policy. Applications to export or reexport to such
entities will be reviewed according to the licensing policy set forth
on the Entity List.
0
5. In Supplement No. 4 to part 744 add a new entry for the Tula
Instrument Design Bureau under Russia, immediately following the entry
for Moscow Aviation Institute as follows:
Supplement No. 4 to Part 744.--Entity List
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License License review Federal Register
Country Entity requirement policy citation
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* * * * * * *
Tula Instrument All items subject Presumption of [F. Reg.
Design Bureau to the EAR having Denial. Citation], 03/07/
(all locations, a classification 05.
including at Tula other than EAR99;
300001, Russia) no License
(Sec. 744.20 of Exceptions
the EAR). available.
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[[Page 10868]]
Dated: March 2, 2005.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 05-4325 Filed 3-4-05; 8:45 am]
BILLING CODE 3510-33-P