Billing Code 3510-33-P

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 738, 742 and 744

Docket No [ 050822227-5227-01]

RIN A694-AD44

Removal of License Requirements for Exports and Reexports to India of Items Controlled Unilaterally for Nuclear Nonproliferation Reasons and Removal of Certain Indian Entities from the Entity List

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

SUMMARY: On July 18, 2005, President George W. Bush and Indian Prime Minister Manmohan Singh announced the completion of the Next Steps in Strategic Partnership (NSSP) with India. The proposed cooperation outlined in the NSSP has progressed through a series of reciprocal steps that built on one another, including steps related to creating the appropriate environment for successful high-technology commerce. This rule implements two steps the United States has agreed to take as part of the final phase of NSSP, namely, the removal of license requirements for exports and reexports of items controlled unilaterally by the United States for nuclear nonproliferation reasons to India and the removal of six Indian entities from the Entity List.

DATES: This rule is effective August 30, 2005.

FOR FURTHER INFORMATION CONTACT: Eileen M. Albanese, Office of Exporter Services, Bureau of Industry and Security, Telephone: (202) 482-0436.

SUPPLEMENTARY INFORMATION:

Background

In November 2001, the Indian Prime Minister and the President of the United States committed India and the United States to a strategic partnership. Since then, the two countries have significantly strengthened bilateral cooperation and commerce in space, civil nuclear energy, and dual-use technology. On January 12, 2004, the two leaders announced the NSSP with the aim of implementing a shared vision to expand cooperation, deepening the ties of commerce and friendship between the two nations, and increasing stability in Asia and beyond.

The proposed cooperation has progressed through a series of reciprocal steps that built on one another. It included expanded engagement on nuclear regulatory and safety issues and missile defense, ways to enhance cooperation regarding peaceful uses of space technology, and steps to create the appropriate environment for successful high-technology commerce. In bringing the NSSP to completion, the United States and India resolve to transform their relationship by establishing a global partnership, with the mutual commitment to promoting stability, democracy, prosperity, and peace throughout the world. This rule implements revisions to the Export Administration Regulations (EAR) as part of the completion of the NSSP.

Effects of this rule.

This rule removes export and reexport license requirements for items controlled unilaterally by the United States for nuclear nonproliferation reasons (i.e., items that are not subject to the Nuclear Suppliers Group regime). The rule accomplishes this change by revising §742.3(a)(2) to except India from this license requirement and by removing the "X" from the box at the intersection of the row for India and the column labeled NP 2 of the Commerce Country Chart (Supplement No. 1 to Part 738 of the EAR). Removal of export license requirements for these items is expected to reduce the number of license applications for exports and reexports to India.

This rule also removes six Indian entities from the Entity List (Supplement No. 4 to Part 744 of the EAR). Three of these entities are Department of Atomic Energy entities, "Tarapur (TAPS 1 & 2)," "Rajasthan (RAPS 1& 2)," and "Kudankulam (1 & 2)." TAPS 1 & 2 and RAPS 1 & 2 are under International Atomic Energy Agency (IAEA) safeguards. Kudankulam 1 & 2 is under construction. The Government of India and the IAEA have agreed that this facility will be subject to IAEA safeguards upon completion. The other three entities are Indian Space Research Organization (ISRO) subordinate entities, specifically, "ISRO Telemetry, Tracking and Command Network (ISTRAC)," "ISRO Inertial Systems Unit (IISU), Thiruvananthapuram," and "Space Applications Center (SAC), Ahmadabad."

Neither the removal of the unilateral nuclear nonproliferation license requirement nor the

removal of the entities from the Entity List by this rule removes any other license requirements imposed by the EAR. Among others, the end use license requirements of part 744, including the license requirements for the nuclear end uses specified in §§ 744.2, 744.5 and 744.6, and missile end use license requirements specified in §§ 744.3 and 744.6, continue to apply. This rule also does not affect license requirements related to entities that remain on the Entity List. For certain of those entities, a license is required for all items subject to the EAR; for others, a license is required for items with a classification other than 1) EAR99 or 2) where the third through fifth digits of the ECCN are "999." BIS strongly urges parties to consult Supplement No. 3 to part 732 of the EAR, "BIS's 'Know Your Customer' Guidance and Red Flags," when exporting or reexporting items to India.

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 2, 2005, 70 FR 45273 (August 5, 2005), continues the EAR

in effect under the International Emergency Economic Powers Act (IEEPA).

Rulemaking requirements

1. This rule has been determined to be not 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. Total burden hours associated with the Paperwork Reduction Act and Office and Management and Budget control number 0694-0088 are expected to decrease because of this regulation. BIS anticipates that this rule will reduce the number of license applications for exports and reexports to India by about 150 to 200 annually.

Send comments regarding these burden estimates or any other aspect of this collection 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.

List of Subjects

15 CFR Part 738

Exports, Foreign Trade.

15 CFR Part 742

Exports, Terrorism.

15 CFR Part 744

Exports, Reporting and recordkeeping requirements, Terrorism.

Accordingly, parts 738, 742 and 744 of the Export Administration Regulations (15 CFR Parts 730-799) are amended as follows:

PART 738 - [AMENDED]

1.	The authority citation for 15 CFR Part 738 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C. 7430(e); 18 U.S.C. 2510 et seq.; 22 U.S.C. 287c; 22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42 U.S.C. 6212; 43 U.S.C. 1354; 46 U.S.C. app. 466c; 50 U.S.C. app. 5; Sec. 901-911, Pub. L. 106-387; Sec. 221, Pub. L. 107-56; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 2, 2005, 70 FR 45273 (August 5, 2005).

2.	Supplement No. 1 to Part 738 - (Commerce Country Chart) is amended by removing the "X" from the column heading NP 2 in the row for India.

PART 742 – [AMENDED]

3.	The authority citation for Part 742 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 18 U.S.C. 2510 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; Sec 1503, Pub.L. 108-11,117 Stat. 559; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Presidential Determination 2003-23 of May 7, 2003, 68 FR 26459, May 16, 2003; Notice of November 4, 2004, 69 FR 64637 (November 8, 2004); Notice of August 2, 2005, 70 FR 45273 (August 5, 2005).

4.	Section 742.3 is amended by revising paragraph (a)(2) to read as follows:

§742.3 Nuclear Nonproliferation.

(a) * * *

(2) If NP Column 2 of the Country Chart (Supplement No. 1 to part 738 of the EAR) is indicated in the applicable ECCN, a license is required to Country Group D:2 (see Supplement No. 1 to part 740 of the EAR) except India.

* * * * *

PART 744 - [AMENDED]

5.	The authority citation for 15 CFR Part 744 is revised to read as follows:

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 November 4, 2004, 69 FR 64637 (November 8, 2004); Notice of August 2, 2005, 70 FR 45273 (August 5, 2005).

Supplement No. 4 to Part 744

[Amended]

6. Supplement No. 4 to Part 744, under the country of India is amended by:

a. removing the following subordinate entities from the entry for the Indian Space Research Organization (ISRO): ISRO Telemetry, Tracking and Command Network (ISTRAC), ISRO Inertial Systems Unit (IISU), Thiruvananthapuram, and Space Applications Center (SAC), Ahmadabad;

b. adding to the entry for "Nuclear reactors (including power plants) not under International Atomic Energy Agency (IAEA) safeguards, fuel processing and enrichment facilities, heavy water production facilities and their collocated ammonia plants," immediately following the word "safeguards," the phrase "(excluding Kundankulam 1 and 2)"; and

c. removing, in its entirety, the second entry for the Department of Atomic Energy which reads: "The following Department of Atomic Energy entities: Nuclear reactors (including power plants) subject to International Atomic Energy Agency (IAEA) safeguards: Tarapur (TAPS 1 & 2), and "Rajasthan (RAPS 1 & 2)."

Dated:

Matthew S. Borman

Deputy Assistant Secretary for Export Administration