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C e' C7 XXdXXd7  X XX9X̛` ` C(#0"8""7"/"03""27"/99  BillingCode:351033P7DEPARTMENTOFCOMMERCEBureauofExportAdministration15CFRparts734,738,740,and742[DocketNo.990709187918701]RIN:0694AB96RevisionofHighPerformanceComputerLicensingPolicyAGENCY:BureauofExportAdministration,CommerceACTION:Finalrule.SUMMARY:TheBureauofExportAdministration(BXA)isamendingtheExport -@), AdministrationRegulations(EAR)byraisingtheperformanceparametersforthosecomputerswhichcanbeexportedandreexportedunderLicenseExceptionCTP.TheupperthresholdoftheCompositeTheoreticalPerformance(CTP)parameterforComputerTier2countriesisraisedfrom10,000millionsoftheoreticaloperationspersecond(MTOPS)to20,000MTOPS.TheupperthresholdforComputerTier3countriesisraisedfrom7,000MTOPSto12,300MTOPSforcivilianendusersandenduses.FormilitaryendusersandendusesinComputerTier3destinationstheCTPparameterremainsat2,000MTOPSfortheimmediatefuture.TheupperparameterformilitaryendusersandendusestoComputerTier3countrieswillberaisedfrom2,000MTOPSto6,500MTOPSonthesamedatethethresholdforadvancenotificationforhighperformancecomputers(HPC)exportstoTier3countriesisraisedfrom2,000MTOPSto6,500MTOPS.ThethresholdforadvancenotificationforexportsofHPCstoTier3countriesis ,`'* raisedto6,500MTOPS,effectiveapproximately180daysfollowingthesubmissionofastatutorilymandatedreporttoCongress.ThePresidentsentthisreporttoCongressonJuly26,1999.Inaddition,thefollowingcountriesaremovedfromComputerTier2toComputerTier1:Brazil,theCzechRepublic,Hungary,andPoland.DATES:Thisruleiseffective"August3,1999.""[DATEOFPUBLICATION]."FORFURTHERINFORMATIONCONTACT:JamesA.Lewis,OfficeofStrategicTradeandForeignPolicyControls,BureauofExportAdministration,Telephone:(202)4824196.̛̜SUPPLEMENTARYINFORMATION:BackgroundOnJanuary25,1996,theBureauofExportAdministrationcreatedLicenseExceptionCTPforexportsandreexportsofHPCs.Thispolicytookintoaccountrapidtechnicaladvancesin ,`'* Їcomputingpower,aswellasnationalsecurityandnonproliferationconcerns.LicenseExceptionCTPdividedtheworldintotiersbasedonU.S.nationalsecurityandforeignpolicyinterests.ThesetiersrepresentthelevelofproliferationandsecurityriskacountryposestotheU.S.and,asaresult,thetechnicallevelofcomputerexportstiermemberscanreceivewithoutapplyingforanexportlicense.ComputerTier1consistsofcloseU.S.allies;ComputerTier2includescountriesrepresentingminimalsecurityconcernstotheU.S;countriesrepresentingapotentialproliferationorsecurityconcernarelistedinComputerTier3;andComputerTier4consistsofterroristsupportingstates.ThePresidenthasdecidedtoamendthesecountrytiersbytransferringBrazil,theCzechRepublic,Hungary,andPolandfromTier2toTier1.TheAdministrationwillconsidermovingadditionalcountriesbetweenComputerTiersinthefuture. ,`'* TherapidevolutionofcomputertechnologyhasalsomadeCTPparameterrevisionsnecessary.ThisrulechangestheupperthresholdoftheCTPparameterforComputerTier2from10,000MTOPSto20,000MTOPSandtheupperthresholdofComputerTier3countriesfrom7,000MTOPSto12,300MTOPSforcivilianendusersandenduses.LicenseExceptionCTPwillbemadeavailableformilitaryendusersandendusesinComputerTier3inapproximately180daysalongwiththeraisingoftheadvancenotificationlevelunderthe1998NationalDefenseAuthorizationAct(NDAA)from2,000MTOPSto6,500MTOPS.Revisionoftheadvancenotificationthresholdwillbeeffective180daysafterthesubmissionbythePresidentofarequiredreportnotifyingtheCongressofthischange.ThePresidentsentthisreporttoCongressonJuly26,1999.Followingthis180dayperiod,theupperparameterwillberaisedfrom2,000MTOPSto6,500MTOPSformilitaryendusersandendusesinComputerTier3.Thislevel ,`'* reflectstheAdministrationsdeterminationthatwidespreadcommercialavailabilitymakescomputerswithaperformanceof6,500MTOPSorlessuncontrollable.Notethattheadvancenotificationrequirementsofthe1998NDAAforexportsandreexportsofcomputerswithaCTPgreaterthan2,000MTOPStoComputerTier3destinationsremainsineffectuntilsuchchangesarereviewedbytheU.S.Congress.Thisruledoesnothaveanimmediateimpactonpostshipmentreportingandrecordkeepingrequirementscompelledbythe1998NDAAforHPCexports.AllHPCexportswithaCTPgreaterthan2,000MTOPStoTier3Countriesstillrequirepostshipmentreporting.However,BXAmay,priortoJanuary23,2000,publishanadditionalruleregardingfurtherreportingrequirementstomeetstipulationsunderthe1998NDAAtoprovidetheCongressanannualreportonallHPCexportstoComputerTier3destinations.Thispotentialrulewillmostlikely ,`'* requireHPCexporterstoreporttheintendedenduseofallHPCexportswithaCTPgreaterthan2,000MTOPSbutlessthanorequalto6,500MTOPStoComputerTier3destinations.ThisinformationiscurrentlyprovidedbyexportersintheiradvancenotificationrequestsforcomputerswithaCTPgreaterthan2,000MTOPStoComputerTier3destinations.̀InlightoftherapidtechnologicaladvancementinHPCs,theUnitedStateswillroutinelyreviewtheselicensinglevelstodetermineiffurtheradjustmentsarewarranted.Inparticular,forTier2,theUnitedStateswillreviewthelicensinglevelinsixmonthswiththeexpectationofraisingtheleveltothe32,000to36,000MTOPSrange.ChangestoTier3mayalsobemadeatthattime.X XXX This#X XXX #ԀrulespecificallyamendstheEARinthefollowingways: $" 1.  Insection740.7,Brazil,theCzechRepublic,Hungary,andPolandaremovedfrom P(#& ComputerTier2toComputerTier1,andtheupperthresholdoftheCTPparameterfor ,`'* ЇComputerTier2israisedfrom10,000MTOPSto20,000MTOPS.̜2.  Insection740.7,theupperthresholdoftheCTPparameterforComputerTier3israised p from7,000MTOPSto12,300MTOPSforcivilianendusersandenduses.Theupperparameterformilitaryendusersandusesisraisedfrom2,000MTOPSto6,500MTOPS,effectiveJanuary23,2000.̜3.  Insection740.7,theCTPlevelforcomputersrequiringadvancenotificationforexport p andreexporttoComputerTier3destinationsisraisedfrom2,000MTOPSto6,500MTOPS,effectiveJanuary23,2000.̜4.  Insection740.11andSupplementNo.1tosection740.11,theCTPlevelforcomputers "  noteligibleforLicenseExceptionGOVisraisedfrom10,000MTOPSto20,000MTOPS.̜5.  Insection742.12,theupperthresholdoftheCTPparameterasmeasuredinMTOPSfor 0*%(  ,`'* ComputerTier2israisedfrom10,000MTOPSto20,000MTOPS.  9X:XXX   #X XX9X:S#̜6.  Insection742.12,theupperthresholdoftheCTPparameterforComputerTier3israised p from7,000MTOPSto12,300MTOPSforcivilendusersandenduses.EffectiveJanuary23,2000,theupperthresholdoftheCTPparameterforComputerTier3israisedfrom2,000MTOPSto6,500MTOPSformilitaryendusersandenduses.AlthoughtheExportAdministrationAct(EAA)expiredonAugust20,1994,thePresidentinvokedtheInternationalEmergencyEconomicPowersActandcontinuedineffecttheEAR,andtotheextentpermittedbylaw,theprovisionsoftheEAA,asamended,inExecutiveOrder12924ofAugust19,1994,asextendedbythePresident'snoticesofAugust15,1995(60FR42767),August14,1996(61FR42527)August13,1997(62FR43629)andAugust13,1998(63FR44121). ,`'* RuleMakingRequirements  1. ` ThisfinalrulehasbeendeterminedtobesignificantforpurposesofE.O.12866. p   2. ` Notwithstandinganyotherprovisionoflaw,nopersonisrequiredtorespondto 0  norbesubjecttoapenaltyforfailuretocomplywithacollectionofinformationsubjecttotherequirementsofthePaperworkReductionActunlessthatcollectionofinformationdisplaysacurrentvalidOMBControlNumber.ThisregulationinvolvescollectionspreviouslyapprovedbytheOfficeofManagementandBudgetundercontrolnumbers06940088, MultiPurposeApplication,whichcarriesaburdenhourestimateof45minutespermanualsubmissionand40minutesperelectronicsubmission.Miscellaneousandrecordkeepingactivitiesaccountfor12minutespersubmission.Inaddition,informationisalsocollectedunderOMBcontrolnumber06940107, NationalDefenseAuthorizationAct,AdvanceNotificationsandPostShipment ,`'* Verificationreports.  3. ` ThisruledoesnotcontainpolicieswithFederalismimplicationssufficientto p warrantpreparationofaFederalismassessmentunderExecutiveOrder12612.  4. ` TheprovisionsoftheAdministrativeProcedureActrequiringnoticeofproposed @  rulemaking,theopportunityforpublicparticipation,andadelayineffectivedate,areinapplicablebecausethisregulationinvolvesamilitaryorforeignaffairsfunctionoftheUnitedStates(see5U.S.C.553(a)(1)).Further,nootherlawrequiresthatanoticeofproposedrulemakingandanopportunityforpubliccommentbegivenforthisrule.Becauseanoticeofproposedrulemakingandopportunitiesforpubliccommentarenotrequiredtobegivenforthisruleby5U.S.C.553,orbyanyotherlaw,theanalyticalrequirementsoftheRegulatoryFlexibilityAct,5U.S.C.601etseq.,areinapplicable. 0*%(  ,`'* Therefore,thisregulationisissuedinfinalform.Althoughthereisnoformalcommentperiod,publiccommentsonthisregulationarewelcomeonacontinuingbasis.CommentsshouldbesubmittedtoFrankJ.Ruggiero,OfficeofExporterServices,BureauofExportAdministration,DepartmentofCommerce,P.O.Box273,Washington,D.C.20044.ListofSubjects15_CFR_ԀPart734  Administrativepracticeandprocedure,Exports,Foreigntrade.̜15CFRPart738  Administrativepracticeandprocedure,Exports,Foreigntrade.15CFRPart740  Administrativepracticeandprocedure,Exports,Foreigntrade,Reportingandrecord ,`'* keepingrequirements.15CFRPart742  Exports,ForeignTrade.  Accordingly,parts734,738,740,and742oftheExportAdministrationRegulations(15CFRParts730774)areamendedasfollows:  2 e  1  .3  Ԁ ` Theauthoritycitationfor15_CFR_Ԁpart734isrevisedtoreadasfollows: p М ̛  Authority:50U.S.C.app.2401etseq.,1701etseq.;E.O.12924,3_CFR_,1994Comp.,p. 0 917;E.O.12938,3_CFR_,1994Comp.,p.950;E.O.13020,3_CFR_,1996Comp.p.219;E.O.13026,3_CFR_,1996Comp.,p.228;NoticeofAugust13,1998,63FR44121,3CFR,1998comp.,p.294.  2. ` Theauthoritycitationfor15_CFR_ԀPart738isrevisedtoreadasfollows: 0*%(  ,`'*   Authority:50U.S.C.app.2401etseq.;50U.S.C.1701etseq.;10U.S.C.7420;10  U.S.C.7430(e);18U.S.C.2510etseq.;22U.S.C.287c;22U.S.C.3201etseq.;22U.S.C.6004; p 30U.S.C.185(s),185(u);42U.S.C.2139a;42U.S.C.6212;43U.S.C.1354;46U.S.C.app.466c;50U.S.C.app.5;E.O.12924,59FR43437,3_CFR_,1994Comp.,p.917;E.O.13026,61FR58767,3_CFR_,1996Comp.,p.228andNoticeofAugust13,199863FR44121,3_CFR_Ԁ1998Comp.,pg.294.  3. ` Theauthoritycitationfor15_CFR_ԀPart740isrevisedtoreadasfollows: 0   Authority:50U.S.C.app.2401etseq.;50U.S.C.1701etseq.;E.O.12924,59FR43437, @ 3_CFR_,1994Comp.,p.917;E.O.13026,61FR58767,3_CFR_,1996Comp.,p.228andNoticeofAugust13,199863FR44121,3_CFR_Ԁ1998Comp.,p.294.  4. ` Theauthoritycitationfor15_CFR_ԀPart742isrevisedtoreadasfollows: 0*%(  ,`'*   Authority:50U.S.C.app.2401etseq.;50U.S.C.1701etseq.;18U.S.C.2510etseq.;22  U.S.C.3201etseq.;42U.S.C.2139a;E.O.12058,43FR20947,3_CFR_,1978Comp.,p.179; p E.O.12851,3_CFR_,1993Comp.,p.608;E.O.12924,59FR43437,3_CFR_,1994Comp.,p.917;E.O.12938,59FR59099,3_CFR_,1994Comp.,p.950;E.O.13026,61FR58767,3_CFR_,1996Comp.,p.228;andNoticeofAugust13,1998,63FR44121,3_CFR_Ԁ1998Comp.,p.294. PART734[AMENDED]  0    5.Section734.4isamendedbyrevisingthephrase 7,000MTOPS"inparagraph(a)to @ read 12,300MTOPS. PART738[AMENDED]  p&!$   6.SupplementNo.1toPart738isamendedbyrevisingthethephrase greaterthan ,`'* 10,000MTOPSinthesecondfootnotetoread greaterthan20,000MTOPS PART740[AMENDED]  p   7.Section740.7isamendedby:   ` a.Revisingparagraphs(b)(1)and(c);   ` b.Revisingparagraphs(d)(2)and(d)(3);and   ` c.Revisingparagraphs(d)(5)(i)and(d)(5)(v)introductorytexttoreadasfollows:740.7Computers(CTP)   `    * h *  *  * p * @ (a)  * ` * * "  (b)ComputerTier1 p&!$   (1)Eligiblecountries.Thecountriesthatareeligibletoreceiveexportsandreexports 0*%(  ,`'* underthisLicenseExceptionareAustralia,Austria,Belgium,Brazil,CzechRepublic,Denmark,Finland,France,Germany,Greece,theHolySee,Hungary,Iceland,Ireland,Italy,Japan,Liechtenstein,Luxembourg,Mexico,Monaco,Netherlands,NewZealand,Norway,Poland,Portugal,SanMarino,Spain,Sweden,Switzerland,Turkey,andtheUnitedKingdom.  (2)%i%XX  ` #X X%%i@#* *  *  М(c)ComputerTier2 p   (1)Eligiblecountries.Thecountriesthatareeligibletoreceiveexportsunderthis 0 LicenseExceptioninclude AntiguaandBarbuda,Argentina,Bahamas,Barbados,Bangladesh,Belize,Benin,Bhutan,Bolivia,Botswana,Brunei,BurkinaFaso,Burma,Burundi,Cameroon,CapeVerde,CentralAfrica,Chad,Chile,Colombia,Congo,CostaRica,Coted'Ivoire,Cyprus,Dominica,DominicanRepublic,Ecuador,ElSalvador,EquatorialGuinea,Eritrea,Ethiopia,Fiji, ,`'* Gabon,Gambia(The),Ghana,Grenada,Guatemala,Guinea,GuineaBissau,Guyana,Haiti,Honduras,HongKong,Indonesia,Jamaica,Kenya,Kiribati,Korea(Republicof),Lesotho,Liberia,Madagascar,Malawi,Malaysia,Maldives,Mali,Malta,MarshallIslands,Mauritius,Micronesia(FederatedStatesof),Mozambique,Namibia,Nauru,Nepal,Nicaragua,Niger,Nigeria,Palau,Panama,PapuaNewGuinea,Paraguay,Peru,Philippines,Rwanda,St.Kitts&Nevis,St.Lucia,St.VincentandGrenadines,SaoTome&Principe,Senegal,Seychelles,SierraLeone,Singapore,SlovakRepublic,Slovenia,SolomonIslands,Somalia,SouthAfrica,SriLanka,Surinam,Swaziland,Taiwan,Tanzania,Togo,Tonga,Thailand,TrinidadandTobago,Tuvalu,Uganda,Uruguay,Venezuela,WesternSahara,WesternSamoa,Zaire,Zambia,andZimbabwe.  (2)Eligiblecomputers.ThecomputerseligibleforLicenseExceptionCTPtoTier2 0*%(  ,`'* destinationsarethosehavingaCTPgreaterthan2,000MTOPS,butlessthanorequalto20,000MTOPS.(d)ComputerTier3 0    (1) ` * *  * @    (2)Eligiblecomputers.ThecomputerseligibleforLicenseExceptionCTPtoTier3  destinationsarethosehavingaCTPgreaterthan2,000MTOPS,butlessthanorequalto12,300MTOPSforcivilendusersandenduses.BeginningonJanuary23,2000,computershavingaCTPgreaterthan2,000MTOPSbutlessthanorequalto6,500MTOPSareeligibleforLicenseExceptionCTPtomilitaryendusersandendusessubjecttotherestrictionsinparagraph(d)(3)ofthissection.  (3)Eligibleexports.Onlyexportsandreexportstopermittedendusersandenduses 0*%(  ,`'* locatedincountriesinComputerTier3.LicenseExceptionCTPdoesnotauthorizeexportsandreexportstoComputerTier3fornuclear,chemical,biological,ormissileendusersandendusesandmilitaryendusersandendusessubjecttolicenserequirementsunder744.2,744.3,744.4,744.5,and744.12oftheEAR.Suchexportsandreexportswillcontinuetorequirealicenseandwillbeconsideredonacasebycasebasis.Retransferstodefinedproliferationendusersandendusesineligiblecountriesisstrictlyprohibitedwithoutpriorauthorization.  X XXX (4) ` #X XXX dM#* *  * 0   (5)NDAAnotification. @    ` (i)Generalrequirement.TheNationalDefenseAuthorizationAct(NDAA)of "  FY98enactedonNovember18,1997requiresadvancenotificationofcertainexportsandreexportsofcomputerstoComputerTier3countries.PriortoJanuary23,2000,advance ,`'* notificationisrequiredforallexportsandreexportsofcomputerswithaCTPbetween2,000and12,300MTOPStoComputerTier3destinations.BeginningonJanuary23,2000,advancenotificationisrequiredforallexportsandreexportsofcomputerswithaCTPbetween6,500and12,300MTOPStoComputerTier3destinations.ForeachsuchtransactiondestinedtoComputerTier3,priortousingLicenseExceptionCTP,youmustfirstnotifyBXAbysubmittingacompletedMultipurposeApplicationForm(BXA748P).TheMultipurposeApplicationFormmustbecompletedincludingallinformationrequiredforalicenseapplicationaccordingtotheinstructionsdescribedinSupplementNo.1topart748oftheEAR,withtwoexceptions.You(theapplicantaslistedinBlock14)shallinBlock5(TypeofApplication)markthebox"Other."ThisdesignatorwillpermitBXAtoroutetheNDAAnoticeintoaspecialprocessingprocedure.(Blocks6and7,regardingsupportdocumentation,maybeleftblank.) ,`'* Youmustalsoprovideanoticeusingthisprocedurepriortoexportingorreexportingitemsthatyouknowwillbeusedtoenhancebeyond2,000MTOPStheCTPofapreviouslyexportedorreexportedcomputer.BeginningonJanuary23,2000,youmustprovideanoticeusingthisprocedurepriortoexportingorreexportingitemsthatyouknowwillbeusedtoenhancebeyond6,500MTOPStheCTPofapreviouslyexportedorreexportedcomputer.BXAwillnotinitiatetheregistrationofanNDAAnoticeunlessallinformationontheMultipurposeApplicationformiscomplete.̜*  * ` * *  * h  @    ` (v)Postshipmentverification.Thissectionoutlinesspecialpostshipment "  reportingrequirementsforexportersofcomputerswithaCTPover2,000MTOPStodestinationsinComputerTier3undertheNDAA.Thesereportingrequirementsalsoapplywhenyouknow ,`'* thattheitemsbeingexportedwillbeusedtoenhancebeyond2,000MTOPStheCTPofapreviouslyexportedorreexportedcomputer.Suchreportsmustbesubmittedinaccordancewiththeprovisionsofthisparagraph(d)(5)(v),andrecordsofsuchexportssubjecttothepostshipmentreportingrequirementsofthissection,mustbekeptinaccordancewithpart762oftheEAR.̜"%i%XX "  "#XX%%əY#"X XXX ԛ   `    * h *  *  * p *#X XXX Y# p   8.Section740.11isamendedbyrevisingthephrase 10,000MTOPS"inparagraphs(a)(2)(ii)and(iii)andinparagraph(c)(2)(i)toread 20,000MTOPS.  9.SupplementNo.1tosection740.11isamendedbyrevisingthephrase 10,000""MTOPS"inparagraphs(a)(1)(ii),(a)(1)(iii),(b)(1)(ii),and(b)(1)(iii)toread 20,000MTOPS. PART742[AMENDED]  0*%(  ,`'*   10.Section742.12isamendedbyrevisingthephrase greaterthan10,000"inparagraph(b)(2)(i)toread greaterthan20,000;byrevisingthephrase &&XX tomilitaryendusersandenduses p andtonuclear,chemical,biological,ormissileendusersandendusesdefinedinpart744oftheEAR#X X&&\#  T inparagraph(b)(3)(i)(A)toread tonuclear,chemical,biological,ormissileendusersandendusesandmilitaryendusersandendusessubjecttolicenserequirementsunder744.2,744.3,744.4,744.5,and744.12oftheEAR;byrevisingthephrase tomilitaryendusersandendusesandnuclear,chemical,biological,ormissileendusersandendusesdefinedinpart744oftheEARinparagraph(b)(3)(ii)toread tonuclear,chemical,biological,ormissileendusersandendusesandmilitaryendusersandendusessubjecttolicenserequirementsunder744.2,744.3,744.4,744.5,and744.12oftheEAR;andbyrevisingparagraphs(b)(3)(i)(B)and(C)toreadasfollows: +4'*    `    * h *  *  * p *  742.12HighPerformanceComputers   `    * h *  *  * p * 0  (b)  * ` * * @    (3) ` * *  *     ` (i) *  * h * p    `  (B)AlicenseisrequiredtoexportorreexportcomputerswithaCTPgreaterthan12,300MTOPSforcivilianendusersandendusesincountriesinComputerTier3.PriortoJanuary23,2000,alicenseisrequiredtoexportorreexportcomputershavingaCTPgreaterthan2,000MTOPStomilitaryendusersandendusesinComputerTier3."Beginningon""Effecti""""ve"""January23,2000,alicenseisrequiredtoexportorreexportcomputershavingaCTPgreaterthan ,`'* 6,500MTOPStomilitaryendusersandendusesinComputerTier3.   `  (C)"Priorto""Beginningon"January23,2000,aX XXX licensemayberequiredtoexportor p reexportcomputerswithaCTPgreaterthan2,000MTOPStocountriesinComputerTier3pursuanttotheNDAA(see740.7(d)(5)oftheEAR).#X XXX f#ԀBeginningonJanuary23,2000,aX XXX ԛlicense @  mayberequiredtoexportorreexportcomputerswithaCTPgreaterthan6,500MTOPStocountriesinComputerTier3pursuanttotheNDAA(see740.7(d)(5)oftheEAR).#X XXX 9g#   `    * h *  *  * p *     0 Dated:̜IainS.BairdDeputyAssistantSecretaryfor̜ExportAdministration3