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SUBCHAPTER C—EXPORT ADMINISTRATION REGULATIONS

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					                                                                   SUBCHAPTER C—EXPORT ADMINISTRATION REGULATIONS

                                                                             PART 730—GENERAL                              references to 15 CFR chapter VII, sub-
                                                                               INFORMATION                                 chapter C. The EAR are issued by the
                                                                                                                           United States Department of Com-
                                                                 Sec.                                                      merce, Bureau of Industry and Secu-
                                                                 730.1 What these regulations cover.                       rity (BIS) under laws relating to the
                                                                 730.2 Statutory authority.                                control of certain exports, reexports,
                                                                 730.3 Dual use exports.                                   and activities. In addition, the EAR
                                                                 730.4 Other control agencies and depart-                  implement antiboycott law provisions
                                                                     ments.                                                requiring regulations to prohibit speci-
                                                                 730.5 Coverage of more than exports.                      fied conduct by United States persons
                                                                 730.6 Control purposes.
                                                                                                                           that has the effect of furthering or sup-
                                                                 730.7 License requirements and exceptions.
                                                                 730.8 How to proceed and where to get help.               porting boycotts fostered or imposed
                                                                 730.9 Organization of the Bureau of Industry              by a country against a country friendly
                                                                     and Security.                                         to United States. Supplement No. 1 to
                                                                 730.10 Advisory information.                              part 730 lists the control numbers as-
                                                                 SUPPLEMENT NO. 1 TO PART 730—INFORMATION                  signed to information collection re-
                                                                     COLLECTION REQUIREMENTS UNDER THE                     quirements under the EAR by the Of-
                                                                     PAPERWORK REDUCTION ACT: OMB CON-                     fice of Management and Budget pursu-
                                                                     TROL NUMBERS                                          ant to the Paperwork Reduction Act of
                                                                 SUPPLEMENT NO. 2 TO PART 730—TECHNICAL                    1995.
                                                                     ADVISORY COMMITTEES
                                                                 SUPPLEMENT NO. 3 TO PART 730—OTHER U.S.                   § 730.2 Statutory authority.
                                                                     GOVERNMENT DEPARTMENTS AND AGEN-
                                                                     CIES WITH EXPORT CONTROL RESPONSIBIL-                    The EAR have been designed pri-
                                                                     ITIES                                                 marily to implement the Export Ad-
                                                                                                                           ministration Act of 1979, as amended,
                                                                   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.
                                                                                                                           50 U.S.C. app. 2401–2420 (EAA). There
                                                                 7430(e); 22 U.S.C. 287c; 22 U.S.C. 2151 note; 22          are numerous other legal authorities
                                                                 U.S.C. 3201 et seq.; 22 U.S.C. 6004; 30 U.S.C.            underlying the EAR. These are listed
                                                                 185(s), 185(u); 42 U.S.C. 2139a; 42 U.S.C. 6212; 43       in the FEDERAL REGISTER documents
                                                                 U.S.C. 1354; 46 U.S.C. app. 466c; 50 U.S.C. app.          promulgating the EAR and at the be-
                                                                 5; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O.           ginning of each part of the EAR in the
                                                                 11912, 41 FR 15825, 3 CFR, 1976 Comp., p. 114;            Code of Federal Regulations (CFR).
                                                                 E.O. 12002, 42 FR 35623, 3 CFR, 1977 Comp., p.            From time to time, the President has
                                                                 133; E.O. 12058, 43 FR 20947, 3 CFR, 1978
                                                                                                                           exercised authority under the Inter-
                                                                 Comp., p. 179; E.O. 12214, 45 FR 29783, 3 CFR,
                                                                 1980 Comp., p. 256; E.O. 12851, 58 FR 33181, 3
                                                                                                                           national Emergency Economic Powers
                                                                 CFR, 1993 Comp., p. 608; E.O. 12854, 58 FR                Act with respect to the EAR (50 U.S.C.
                                                                 36587, 3 CFR, 1993 Comp., p. 179; E.O. 12918, 59          1701–1706 (IEEPA)). The EAA is not per-
                                                                 FR 28205, 3 CFR, 1994 Comp., p. 899; E.O.                 manent legislation, and when it has
                                                                 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950;            lapsed, Presidential executive orders
                                                                 E.O. 12947, 60 FR 5079, 3 CFR, 1995 Comp., p.             under IEEPA have directed and author-
                                                                 356; E.O. 12981, 60 FR 62981, 3 CFR, 1995                 ized the continuation in force of the
                                                                 Comp., p. 419; E.O. 13020, 61 FR 54079, 3 CFR,            EAR.
                                                                 1996 Comp., p. 219; E.O. 13026, 61 FR 58767, 3
                                                                 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR                § 730.3 Dual use exports.
                                                                 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 66
                                                                 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O.                    The convenient term dual use is
                                                                 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786;            sometimes used to distinguish the
                                                                 E.O. 13338, 69 FR 26751, May 13, 2004; Notice of          types of items covered by the EAR
                                                                 August 15, 2007, 72 FR 46137 (August 16, 2007);           from those that are covered by the reg-
                                                                 Notice of November 8, 2007, 72 FR 63963 (No-              ulations of certain other U.S. govern-
                                                                 vember 13, 2007).                                         ment departments and agencies with
                                                                   SOURCE: 61 FR 12734, Mar. 25, 1996, unless              export licensing responsibilities. In
                                                                 otherwise noted.                                          general, the term dual use serves to
                                                                                                                           distinguish EAR-controlled items that
                                                                 § 730.1 What these regulations cover.                     can be used both in military and other
                                                                    In this part, references to the Export                 strategic uses (e.g., nuclear) and com-
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                                                                 Administration Regulations (EAR) are                      mercial applications. In general, the

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                                                                 Bureau of Industry and Security, Commerce                                                           § 730.6

                                                                 term dual use serves to distinguish                       from the United States will be subject
                                                                 EAR-controlled items that can be used                     to assurances that items produced
                                                                 both in military and other strategic                      abroad that are the direct product of
                                                                 uses and in civil applications from                       that technology will not be exported to
                                                                 those that are weapons and military                       certain destinations without authoriza-
                                                                 related use or design and subject to the                  tion from BIS.
                                                                 controls of the Department of State or                      (c) Scope of ‘‘exports’’. Certain actions
                                                                 subject to the nuclear related controls                   that you might not regard as an ‘‘ex-
                                                                 of the Department of Energy or the Nu-                    port’’ in other contexts do constitute
                                                                 clear Regulatory Commission. Note,                        an export subject to the EAR. The re-
                                                                 however, that although the short-hand                     lease of technology to a foreign na-
                                                                 term dual use may be employed to                          tional in the United States through
                                                                 refer to the entire scope of the EAR,                     such means as demonstration or oral
                                                                 the EAR also apply to some items that                     briefing is deemed an export. Other ex-
                                                                 have solely civil uses.                                   amples of exports under the EAR in-
                                                                 § 730.4 Other control agencies and de-                    clude the return of foreign equipment
                                                                      partments.                                           to its country of origin after repair in
                                                                                                                           the United States, shipments from a
                                                                    In addition to the departments and
                                                                                                                           U.S. foreign trade zone, and the elec-
                                                                 agencies mentioned in § 730.3 of this
                                                                                                                           tronic transmission of non-public data
                                                                 part, other departments and agencies
                                                                                                                           that will be received abroad.
                                                                 have jurisdiction over certain narrower
                                                                 classes of exports and reexports. These                     (d) U.S. person activities. To counter
                                                                 include the Department of Treasury’s                      the proliferation of weapons of mass
                                                                 Office of Foreign Assets Control                          destruction, the EAR restrict the in-
                                                                 (OFAC), which administers controls                        volvement of ‘‘United States persons’’
                                                                 against certain countries that are the                    anywhere in the world in exports of
                                                                 object of sanctions affecting not only                    foreign-origin items, or in providing
                                                                 exports and reexports, but also imports                   services or support, that may con-
                                                                 and financial dealings. For your con-                     tribute to such proliferation. The EAR
                                                                 venience, Supplement No. 3 to part 730                    also restrict technical assistance by
                                                                 identifies other departments and agen-                    U.S. persons with respect to encryption
                                                                 cies with regulatory jurisdiction over                    commodities or software.
                                                                 certain types of exports and reexports.                   [61 FR 12734, Mar. 25, 1996, as amended at 61
                                                                 This is not a comprehensive list, and                     FR 68577, Dec. 30, 1996]
                                                                 the brief descriptions are only gen-
                                                                 erally indicative of the types of con-                    § 730.6     Control purposes.
                                                                 trols administered and/or enforced by
                                                                 each agency.                                                The export control provisions of the
                                                                                                                           EAR are intended to serve the national
                                                                 § 730.5 Coverage of more than exports.                    security, foreign policy, nonprolifera-
                                                                    The core of the export control provi-                  tion, and short supply interests of the
                                                                 sions of the EAR concerns exports from                    United States and, in some cases, to
                                                                 the United States. You will find, how-                    carry out its international obligations.
                                                                 ever, that some provisions give broad                     Some controls are designed to restrict
                                                                 meaning to the term ‘‘export’’, apply                     access to dual use items by countries
                                                                 to transactions outside of the United                     or persons that might apply such items
                                                                 States, or apply to activities other                      to uses inimical to U.S. interests.
                                                                 than exports.                                             These include controls designed to
                                                                    (a) Reexports. Commodities, software,                  stem the proliferation of weapons of
                                                                 and technology that have been ex-                         mass destruction and controls designed
                                                                 ported from the United States are gen-                    to limit the military and terrorism
                                                                 erally subject to the EAR with respect                    support capability of certain countries.
                                                                 to reexport. Many such reexports, how-                    The effectiveness of many of the con-
                                                                 ever, may go to many destinations                         trols under the EAR is enhanced by
                                                                 without a license or will qualify for an                  their being maintained as part of mul-
                                                                 exception from licensing requirements.                    tilateral control arrangements. Multi-
                                                                    (b) Foreign products. In some cases,                   lateral export control cooperation is
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                                                                 authorization to export technology                        sought through arrangements such as

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                                                                 § 730.7                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 the Nuclear Suppliers Group, the Aus-                     cated on the CCL, and others (General
                                                                 tralia Group, and the Missile Tech-                       Prohibitions Four through Ten) pro-
                                                                 nology Control Regime. The EAR also                       hibit certain activities and apply to all
                                                                 include some export controls to protect                   items subject to the EAR unless other-
                                                                 the United States from the adverse im-                    wise indicated.
                                                                 pact of the unrestricted export of com-                      (4) Do you need a license for your item
                                                                 modities in short supply.                                 or activity? What policies will BIS apply
                                                                                                                           if you do need to submit license applica-
                                                                 § 730.7 License requirements and ex-
                                                                     ceptions.                                             tion? The EAR have four principal ways
                                                                                                                           of describing license requirements:
                                                                    A relatively small percentage of ex-                      (i) The EAR may require a license to
                                                                 ports and reexports subject to the EAR
                                                                                                                           a country if your item is listed on the
                                                                 require an application to BIS for a li-
                                                                                                                           CCL and the Country Chart in part 738
                                                                 cense. Many items are not on the Com-
                                                                                                                           of the EAR tells that a license is re-
                                                                 merce Control List (CCL) (Supplement
                                                                 No. 1 to § 774.1 of the EAR), or, if on the               quired to that country. Virtually all
                                                                 CCL, require a license to only a limited                  Export Control Classification Numbers
                                                                 number of countries. Other trans-                         (ECCN) on the CCL are covered by the
                                                                 actions may be covered by one or more                     Country Chart in part 738 of the EAR.
                                                                 of the License Exceptions in the EAR.                     That part identifies the limited num-
                                                                 In such cases no application need be                      ber of entries that are not included on
                                                                 made to BIS.                                              the Chart. These ECCNs will state the
                                                                                                                           specific countries that require a license
                                                                 § 730.8 How to proceed and where to                       or refer you to a self-contained section,
                                                                      get help.                                            i.e., Short Supply in part 754 of the
                                                                    (a) How the EAR are organized. The                     EAR, or Embargoes in part 746 of the
                                                                 Export Administration Regulations                         EAR. If a license is required, you
                                                                 (EAR) are structured in a logical man-                    should consult part 740 of the EAR
                                                                 ner. In dealing with the EAR you may                      which describes the License Exception
                                                                 find it helpful to be aware of the over-                  that may be available for items on the
                                                                 all organization of these regulations.                    CCL. Part 742 of the EAR describes the
                                                                 In order to determine what the rules                      licensing policies that BIS will apply
                                                                 are and what you need to do, review                       in reviewing an application you file.
                                                                 the titles and the introductory sections                  Note that part 754 of the EAR on short
                                                                 of the parts of the EAR.                                  supply controls and part 746 on embar-
                                                                    (1) How do you go about determining                    goes are self-contained parts that in-
                                                                 your obligations under the EAR? Part 732                  clude the available exceptions and li-
                                                                 of the EAR provides steps you may fol-                    censing policy.
                                                                 low to determine your obligations                            (ii) A license requirement may be
                                                                 under the EAR. You will find guidance                     based on the end-use or end-user in a
                                                                 to enable you to tell whether or not
                                                                                                                           transaction, primarily for proliferation
                                                                 your transaction is subject to the EAR
                                                                                                                           reasons. Part 744 of the EAR describes
                                                                 and, if it is, whether it qualifies for a
                                                                                                                           such requirements and relevant licens-
                                                                 License Exception or must be author-
                                                                 ized through issuance of a license.                       ing policies and includes both restric-
                                                                    (2) Are your items or activities subject to            tions on items and restrictions on the
                                                                 the EAR at all? Part 734 of the EAR de-                   activities of U.S. persons.
                                                                 fines the items and activities that are                      (iii) A license is required for vir-
                                                                 subject to the EAR. Note that the defi-                   tually all exports to embargoed des-
                                                                 nition of ‘‘items subject to the EAR’’                    tinations, such as Cuba. Part 746 of the
                                                                 includes, but is not limited to, items                    EAR describes all the licensing re-
                                                                 listed on the Commerce Control List in                    quirements, license review policies and
                                                                 part 774 of the EAR.                                      License Exceptions that apply to such
                                                                    (3) If subject to the EAR, what do the                 destinations. If your transaction in-
                                                                 EAR require? Part 736 of the EAR lists                    volves one of these countries, you
                                                                 all the prohibitions that are contained                   should first look at this part. This part
                                                                 in the EAR. Note that certain prohibi-                    also describes controls that may be
                                                                 tions      (General    Prohibitions      One              maintained under the EAR to imple-
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                                                                 through Three) apply to items as indi-                    ment UN sanctions.

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                                                                 Bureau of Industry and Security, Commerce                                                           § 730.9

                                                                    (iv) In addition, under §§ 736.2(b)(9)                 detail in the CCL is derived from mul-
                                                                 and (10) of the EAR, you may not en-                      tilaterally adopted lists, and the speci-
                                                                 gage in a transaction knowing a viola-                    ficity serves to enhance the uniformity
                                                                 tion is about to occur or violate any                     and effectiveness of international con-
                                                                 orders, terms, and conditions under the                   trol practices and to promote a ‘‘level
                                                                 EAR. Part 764 of the EAR describes                        playing field’’. The detailed presen-
                                                                 prohibited transactions with a person                     tation of such elements as licensing
                                                                 denied export privileges or activity                      and export clearance procedures en-
                                                                 that violates the terms or conditions of                  ables you to find in one place what you
                                                                 a denial order.                                           need to know to comply with pertinent
                                                                    (5) How do you file a license application              requirements. Of special importance is
                                                                 and what will happen to the application                   the detailed listing of License Excep-
                                                                 once you do file it? What if you need au-                 tion criteria, as these will enable you
                                                                 thorization for multiple transactions?                    to determine quickly, and with con-
                                                                 Parts 748 and 750 of the EAR provide in-                  fidence, that you may proceed with a
                                                                 formation on license submission and                       transaction without delay. Finally,
                                                                 processing. Part 752 of the EAR pro-                      some of the detail results from the
                                                                 vides for a Special Comprehensive Li-                     need to draft the EAR with care in
                                                                 cense that authorizes multiple trans-                     order to avoid loop-holes and to permit
                                                                 actions. If your application is denied,                   effective enforcement.
                                                                 part 756 of the EAR provides rules for                      (c) Where to get help. Throughout the
                                                                 filing appeals.                                           EAR you will find information on of-
                                                                    (6) How do you clear shipments with the                fices you can contact for various pur-
                                                                 U.S. Customs Service? Part 758 of the                     poses and types of information. Gen-
                                                                 EAR describes the requirements for                        eral information including assistance
                                                                 clearance of exports.                                     in understanding the EAR, information
                                                                    (7) Where do you find the rules on re-                 on how to obtain forms, electronic
                                                                 strictive trade practices and boycotts?                   services, publications, and information
                                                                 Part 760 of the EAR deals with restric-                   on training programs offered by BIS, is
                                                                 tive trade practices and boycotts.                        available from the Office of Exporter
                                                                    (8) Where are the rules on record-                     Services at the following locations:
                                                                 keeping and enforcement? Part 762 of the                  Outreach and Educational Services Division,
                                                                 EAR sets out your recordkeeping re-                        U.S. Department of Commerce, 14th and
                                                                 quirements, and parts 764 and 766 of the                   Pennsylvania Avenue, NW., Room H1099D,
                                                                 EAR deal with violations and enforce-                      Washington, DC 20230, Tel: (202) 482–4811,
                                                                 ment proceedings.                                          Fax: (202) 482–2927, and
                                                                    (9) What is the effect of foreign avail-               Western Regional Office, U.S. Department of
                                                                 ability? Part 768 of the EAR provides                      Commerce, 3300 Irvine Avenue, Suite 345,
                                                                                                                            Newport Beach, California 92660, Tel: (949)
                                                                 rules for determining foreign avail-
                                                                                                                            660–0144, Fax: (949) 660–9347, and
                                                                 ability of items subject to controls.                     Bureau of Industry and Security, U.S. De-
                                                                    (10) Do the EAR provide definitions and                 partment of Commerce, 96 North 3rd
                                                                 interpretations? Part 770 of the EAR                       Street, Suite 250, San Jose, CA 95112, Tel:
                                                                 contains interpretations and part 772 of                   (408) 291–4212, Fax: (408) 291–4320.
                                                                 the EAR lists definitions used.                           [61 FR 12734, Mar. 25, 1996, as amended at 69
                                                                    (b) Why the EAR are so detailed. Some                  FR 5687, Feb. 6, 2004; 70 FR 14386, Mar. 22,
                                                                 people will find the great length of the                  2005; 70 FR 22249, Apr. 29, 2005; 72 FR 3945,
                                                                 EAR and their extensive use of tech-                      Jan. 29, 2007]
                                                                 nical terms intimidating. BIS believes,
                                                                 however, that such detail and precision                   § 730.9 Organization of the Bureau of
                                                                 can and does serve the interests of the                       Industry and Security.
                                                                 public. The detailed listing of technical                    The head of the Bureau of Industry
                                                                 parameters in the CCL establishes pre-                    and Security is the Under Secretary for
                                                                 cise, objective criteria. This should, in                 Industry and Security. The Under Sec-
                                                                 most cases, enable you to ascertain the                   retary is assisted by a Deputy Under
                                                                 appropriate control status. Broader,                      Secretary for Industry and Security,
                                                                 more subjective criteria would leave                      the Assistant Secretary for Export Ad-
                                                                 exporters and reexporters more depend-                    ministration, the Assistant Secretary
                                                                 ent upon interpretations and rulings by                   for Export Enforcement, the Director
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                                                                 BIS officials. Moreover, much of the                      of Administration, the Director of the

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                                                                 § 730.10                                                                15 CFR Ch. VII (1–1–08 Edition)

                                                                 Office of Congressional and Public Af-                    § 730.10      Advisory information.
                                                                 fairs, and the Chief Information Offi-
                                                                                                                             The general information in this part
                                                                 cer. The functions and authorities of
                                                                                                                           is just that—general. To achieve brev-
                                                                 the Under Secretary are described in
                                                                                                                           ity, so as to give you a quick overview,
                                                                 the Department’s Organizational Order
                                                                                                                           the information in this part is selec-
                                                                 10–16. The Department’s organizational
                                                                                                                           tive, incomplete, and not expressed
                                                                 and administrative orders are available
                                                                                                                           with regulatory precision. The control-
                                                                 via Office of Management and Organi-
                                                                                                                           ling language is the language of suc-
                                                                 zation’s Web page on the Department’s
                                                                                                                           ceeding parts of the EAR and of any
                                                                 Web site at http://www.osec.doc.gov/omo/
                                                                                                                           other laws or regulations referred to or
                                                                 DMPHome.htm. The principal functions
                                                                 of the Bureau that directly affect the                    applicable. The content of this part is
                                                                 public are carried out by two units: Ex-                  not to be construed as modifying or in-
                                                                 port Administration and Export En-                        terpreting any other language or as in
                                                                 forcement.                                                any way, limiting the authority of BIS,
                                                                                                                           any of its components or any other
                                                                   (a) Export Administration is headed
                                                                 by the Assistant Secretary for Export                     government department or agency.
                                                                 Administration, who is assisted by a                      You should not take any action based
                                                                 Deputy Assistant Secretary. Its sub-                      solely on what you read in this part.
                                                                 stantive work is carried out by six sub-
                                                                                                                           SUPPLEMENT NO. 1 TO PART 730—INFOR-
                                                                 units: the Office of Nonproliferation
                                                                                                                              MATION COLLECTION REQUIREMENTS
                                                                 and Treaty Compliance, the Office of
                                                                                                                              UNDER THE PAPERWORK REDUCTION
                                                                 National Security and Technology
                                                                                                                              ACT: OMB CONTROL NUMBERS
                                                                 Transfer Controls, the Office of Ex-
                                                                 porter Services, the Operating Com-                         This supplement lists the control numbers
                                                                 mittee, the Office of Strategic Indus-                    assigned to the information collection re-
                                                                 tries and Economic Security, and the                      quirements for the Bureau of Industry and
                                                                 Office of Technology Evaluation. The                      Security by the Office of Management and
                                                                 functions of the Operating Committee                      Budget (OMB), pursuant to the Paperwork
                                                                 are described in § 750.4(f)(1) of the EAR.                Reduction Act of 1995. This supplement com-
                                                                                                                           plies with the requirements of section
                                                                 The roles of the other units are de-
                                                                                                                           3506(c)(1)(B)(i) of the Paperwork Reduction
                                                                 scribed on BIS’s Web site at http://                      Act requiring agencies to display current
                                                                 www.bis.doc.gov/about/                                    control numbers assigned by the Director of
                                                                 programoffices.htm.                                       OMB for each agency information collection
                                                                   (b) Export Enforcement is headed by                     requirement.
                                                                 the Assistant Secretary for Export En-
                                                                 forcement who is assisted by a Deputy                      Collection            Title            Reference in the EAR
                                                                                                                             number
                                                                 Assistant Secretary. Its substantive
                                                                 work is carried out by three sub-units:                   0694–0004     Foreign Availability      part 768.
                                                                 the Office of Export Enforcement, the                                      Procedures and Cri-
                                                                                                                                            teria.
                                                                 Office of Enforcement Analysis and the                    0694–0009     Approval of Triangular    § 748.10(e).
                                                                 Office of Antiboycott Compliance. The                                      Transactions Involv-
                                                                 roles of these units are described on                                      ing Commodities
                                                                                                                                            Covered by a U.S.
                                                                 BIS’s Web site at http://www.bis.doc.gov/                                  Import Certificate.
                                                                 about/programoffices.htm.                                 0694–0012     Report of Requests for    part 760 and
                                                                   (c) BIS is also assisted in its work by                                  Restrictive Trade        § 762.2(b).
                                                                                                                                            Practice or Boy-
                                                                 six technical advisory committees. The                                     cott—Single or Mul-
                                                                 procedures and criteria for establishing                                   tiple Transactions.
                                                                 and operating the technical advisory                      0694–0013     Computers and Re-         part 774.
                                                                 committees is at supplement No. 2 to                                       lated Equipment
                                                                                                                                            EAR Supplement 2
                                                                 this part. Information about the spe-                                      to Part 748.
                                                                 cific roles of each committee, meeting                    0694–0016     Delivery Verification     §§ 748.13 and
                                                                 schedules, and membership selection is                                     Certificate.              762.2(b).
                                                                 available on BIS’s Web site at http://                    0694–0017     International Import      § 748.10
                                                                                                                                            Certificate.
                                                                 tac.bis.doc.gov/.                                         0694–0021     Statement by Ultimate     §§ 748.11 and
                                                                                                                                            Consignee and Pur-       762.2(b).
                                                                 [70 FR 8248, Feb. 18, 2005, as amended at 72
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                                                                                                                                            chaser.
                                                                 FR 25196, May 4, 2007]

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                                                                 Bureau of Industry and Security, Commerce                                                                         Pt. 730, Supp. 2

                                                                  Collection                                                                 Collection
                                                                                            Title            Reference in the EAR                                  Title            Reference in the EAR
                                                                   number                                                                     number

                                                                 0694–0023       Written Assurance Re-       §§ 740.3(d) and             0694–0106        Reporting and Record-     § 743.1.
                                                                                   quirement of Li-            740.4(c).                                    keeping Require-
                                                                                   cense Exception                                                          ments under the
                                                                                   TSR (Technology                                                          Wassenaar Ar-
                                                                                   and Software Under                                                       rangement.
                                                                                   Restriction).                                         0694–0107        National Defense Au-      §§ 740.7, 742.12.
                                                                 0694–0025       Short Supply Regula-        §§ 754.4 and 762.2(b).                         thorization Act
                                                                                   tions—Unprocessed                                                        (NDAA).
                                                                                   Western Red Cedar.                                    0694–0117        Chemical Weapons          Part 745.
                                                                 0694–0026       Short Supply Regula-        § 754.3.                                       Convention Provi-
                                                                                   tions—Petroleum                                                          sions of the Export
                                                                                   Products.                                                                Administration Reg-
                                                                 0694–0027       Short Supply Regula-        § 754.2.                                       ulations (Schedule 1
                                                                                   tions Petroleum                                                          Advance Notifica-
                                                                                   (Crude Oil).                                                             tions and Reports
                                                                 0694–0029       License Exception           § 740.9(a)(2)(viii)(B).                        and Schedule 3
                                                                                   TMP: Special Re-                                                         End-use Certifi-
                                                                                   quirements.                                                              cates).
                                                                 0694–0033       License Exception,          §§ 740.12(b)(7),            0694–0122        Licensing Responsibil-    Part 758, and § 748.4.
                                                                                   Humanitarian Dona-          762.2(b), Supp. No.                          ities and Enforce-
                                                                                   tions.                      2 to part 740.                               ment.
                                                                 0694–0047       Technology Letter of        Supplement No. 2 to         0694–0123        Prior Notification of     § 740.18.
                                                                                   Explanation.                part 748, paragraph                          Exports under Li-
                                                                                                               (o)(2).                                      cense Exception
                                                                 0694–0058       Procedure for Vol-          §§ 762.2(b) and 764.5.                         AGR.
                                                                                   untary Self-Disclo-                                   0694–0125        BIS Seminar Evalua-       N/A
                                                                                   sure of Violations.                                                      tion.
                                                                 0694–0073       Export Controls of          Supplement No. 2 to         0694–0126        Export License Serv-      § 750.9.
                                                                                   High Performance            part 748, paragraph                          ices—Transfer of Li-
                                                                                   Computers.                  (c)(2), and                                  cense Ownership,
                                                                                                               § 762.2(b).                                  Requests for a Du-
                                                                 0694–0086       Report of Sample            Supplement No. 1 to                            plicate License.
                                                                                   Shipments of Chem-          part 774.                 0694–0129        Export and Reexport       § 732.3, 738, 744.18,
                                                                                   ical Weapon Precur-                                                      Controls For Iraq.         746.3(b)(1), 747,
                                                                                   sors.                                                                                               750, 758, 762, 772,
                                                                 0694–0088       Simplified Network Ap-      parts 746, 748, and                                                       774.
                                                                                   plication                   752; § 762.2(b).          0694–0132        Voluntary Self-Disclo-    § 764.8.
                                                                                   Processing+ System                                                       sure of Antiboycott
                                                                                   (SNAP+) and the                                                          Violations.
                                                                                   Multipurpose Export                                   0607–0152        Shipper’s Export Dec-     §§ 740.1(d)
                                                                                   License Application.                                                     laration (SED)/Auto-      740.3(a)(3),
                                                                 0694–0089       Special Comprehen-          part 752 and                                   mated Export Sys-         752.7(b),
                                                                                   sive License Proce-         § 762.2(b).                                  tem (AES) Program         §§ 752.15(a).
                                                                                   dure.                                                                    FORMS: 7525–V           §§ 754.2(h) and
                                                                 0694–0093       Import Certificates         §§ 748.9, 748.10,                              AES.                      754.4(c), 758.1,
                                                                                   And End-User Cer-           762.5(d), 762.6                                                        §§ 758.2, and 758.3
                                                                                   tificates.                  764.2(g)(2).                                                           of the EAR.
                                                                 0694–0096       Five Year Records           part 760, § 762.6(a).
                                                                                   Retention Period.
                                                                 0694–0100       Requests for Appoint-       Supplement No. 1 to         [61 FR 12734, Mar. 25, 1996, as amended at 70
                                                                                   ment of Technical           part 730.                 FR 14386, Mar. 22, 2005; 71 FR 20883, Apr. 24,
                                                                                   Advisory Committee.
                                                                 0694–0101       One-Time Report For         § 734.4.
                                                                                                                                         2006; 72 FR 39004, July 17, 2007]
                                                                                   Foreign Software or
                                                                                   Technology Eligible                                          SUPPLEMENT NO. 2 TO PART 730—
                                                                                   For De Minimis Ex-                                           TECHNICAL ADVISORY COMMITTEES
                                                                                   clusion.
                                                                 0694–0102       Registration of U.S.        §§ 754.6 and 754.7.           (a) Purpose. The purpose of this supplement
                                                                                   Agricultural Com-                                     is to describe the procedures and criteria for
                                                                                   modities For Ex-                                      the establishment and operation of Tech-
                                                                                   emption From Short
                                                                                   Supply Limitations
                                                                                                                                         nical Advisory Committees.
                                                                                   on Export’’, and                                        (b) Technical advisory committees. Any pro-
                                                                                   ‘‘Petitions For The                                   ducer of articles, materials, or supplies, in-
                                                                                   Imposition of Moni-                                   cluding technology, software, and other in-
                                                                                   toring Or Controls                                    formation, that are subject to export con-
                                                                                   On Recyclable Me-                                     trols, or are being considered for such con-
                                                                                   tallic matrials; Public                               trols because of their significance to the na-
                                                                                   Hearings.
                                                                 0694–0104       Review, Reporting,          §§ 740.9(c), 740.13(e),     tional security of the United States, may re-
                                                                                   and Notification of         740.17 and                quest the Secretary of Commerce to estab-
                                                                                   Commercial                  742.15(b).                lish a technical advisory committee, under
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                                                                                   Encryption Items.                                     the provisions of section 5(h) of the Export

                                                                                                                                       193



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                                                                 Pt. 730, Supp. 2                                                      15 CFR Ch. VII (1–1–08 Edition)
                                                                 Administration Act of 1979, as amended                      (ii) The volume of annual production by
                                                                 (EAA) to advise and assist the Department of              such persons or firms of each item in the
                                                                 Commerce and other appropriate U.S. Gov-                  grouping in relation to the total U.S. produc-
                                                                 ernment agencies or officials with respect to             tion. Generally, a substantial segment of an
                                                                 questions    involving    technical    matters;           industry (for purposes of this supplement)
                                                                 worldwide availability and actual utilization             shall consist of:
                                                                 of production technology; licensing proce-                  (A) Not less than 30 percent of the total
                                                                 dures that affect the level of export controls            number of U.S. producers of the items con-
                                                                 applicable to a clearly defined grouping of               cerned; or
                                                                 articles, materials, or supplies, including                 (B) Three or more U.S. producers who
                                                                 technology, software, or other information;               produce a combined total of not less than 30
                                                                 and exports and reexports subject to all con-             percent of the total U.S. annual production,
                                                                 trols that the United States maintains in-                by dollar value of the items concerned; or
                                                                 cluding proposed revisions of any such con-                 (C) Not less than 20 percent of the total
                                                                 trols. If producers of articles, materials, or            number of U.S. producers of the items con-
                                                                 supplies, including technology, software, and             cerned, provided that the total of their an-
                                                                 other information, that are subject to export             nual production thereof is not less than 20
                                                                 controls because of their significance to the             percent of the total U.S. annual production,
                                                                 national security of the United States, wish              by dollar value.
                                                                 a trade association or other representative                 (iii) If it is determined that a substantial
                                                                 to submit a written request on their behalf               segment of the industry concerned has re-
                                                                 for the appointment to a TAC, such request                quested the establishment of a TAC con-
                                                                 shall be submitted in accordance with para-               cerning a specific grouping of items that the
                                                                 graph (b)(4) of this supplement.                          Department of Commerce determines dif-
                                                                   (1) Form and substance of requests. Each re-            ficult to evaluate for export control pur-
                                                                 quest for the appointment of a TAC shall be               poses, BIS will establish and use the TAC re-
                                                                 submitted in writing to: Assistant Secretary              quested.
                                                                 for Export Administration, P.O. Box 273,                    (4) Requests from trade associations or other
                                                                 Washington, DC 20044.                                     representatives. Requests from trade associa-
                                                                   The request shall include:                              tions or other representatives of U.S. pro-
                                                                   (i) A description of the articles, materials,           ducers for the establishment of a TAC must
                                                                 or supplies including technology and soft-                comply with the provisions of paragraphs (b)
                                                                 ware, in terms of a clear, cohesive grouping              (1) through (3) of this supplement. In addi-
                                                                 (citing the applicable Export Control Classi-             tion, in order to assist BIS in determining
                                                                 fication Numbers where practical);                        whether the criteria described in paragraph
                                                                   (ii) A statement of the reasons for request-            (b)(3) of this supplement have been met, a
                                                                 ing the appointment of a TAC; and                         trade association or other representative
                                                                   (iii) Any information in support of any                 submitting a request for the establishment
                                                                 contention that may be made that the re-                  of a TAC should include the following infor-
                                                                 quest meets the criteria described in para-               mation:
                                                                 graph (b)(2) of this supplement.                            (i) The total number of firms in the par-
                                                                   (2) Consideration of request for establishment          ticular industry;
                                                                 of a TAC. The Department of Commerce will                   (ii) The total number of firms in the indus-
                                                                 review all requests for the establishment of a            try that have authorized the trade associa-
                                                                 TAC to determine if the following criteria                tion or other representative to act in their
                                                                 are met:                                                  behalf in this matter;
                                                                   (i) That a substantial segment of the in-                 (iii) The approximate amount of total U.S.
                                                                 dustry producing the specified articles, ma-              annual production by dollar value of the
                                                                 terials, or supplies including technology de-             items concerned produced by those firms
                                                                 sires such a committee; and                               that have authorized the trade association or
                                                                   (ii) That the evaluation of such articles,              other representative to act in their behalf;
                                                                 materials, or supplies including technology               and
                                                                 and software for export control purposes is                 (iv) A description of the method by which
                                                                 difficult because of questions involving tech-            authorization to act on behalf of these pro-
                                                                 nical matters, worldwide availability and ac-             ducers was obtained.
                                                                 tual utilization of production and software                 (5) Nominations for membership on TACs.
                                                                 technology, or licensing procedures.                      When the Department of Commerce deter-
                                                                   (3) Requests by a substantial segment of an             mines that the establishment of a TAC is
                                                                 industry. In determining whether or not a                 warranted, it will request nominations for
                                                                 substantial segment of any industry has re-               membership on the committee among the
                                                                 quested the appointment of a TAC, the De-                 producers of the items and from any other
                                                                 partment of Commerce will consider:                       sources that may be able to suggest well-
                                                                   (i) The number of persons or firms request-             qualified nominees.
                                                                 ing the establishment of a TAC for a par-                   (6) Selection of industry members of com-
                                                                 ticular grouping of commodities, software                 mittee. Industry members of a TAC will be se-
                                                                 and technology in relation to the total num-              lected by the Department of Commerce from
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                                                                 ber of U.S. producers of such items; and                  a list of the nominees who have indicated

                                                                                                                      194



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                                                                 Bureau of Industry and Security, Commerce                                                  Pt. 730, Supp. 2
                                                                 their availability for service on the com-                proved by a designated Federal government
                                                                 mittee. To the extent feasible, the Depart-               employee.
                                                                 ment of Commerce will select a committee                    (4) No TAC shall conduct a meeting in the
                                                                 balanced to represent all significant facets of           absence of a designated Federal government
                                                                 the industry involved, taking into consider-              employee who shall be authorized to adjourn
                                                                 ation such factors as the size of the firms,              any advisory committee meeting, whenever
                                                                 their geographical distribution, and their                the Federal government employee deter-
                                                                 product lines. No industry representative                 mines adjournment to be in the public inter-
                                                                 shall serve on a TAC for more than four con-              est.
                                                                 secutive years. The membership of a member                  (e) Public notice. Notice to the public of
                                                                 who is absent from four consecutive meet-                 each meeting of a TAC will be issued at least
                                                                 ings shall be terminated.                                 20 days in advance and will be published in
                                                                   (7) Government members. Government mem-                 the FEDERAL REGISTER. The notice will in-
                                                                 bers of a TAC will be selected by the Depart-             clude the time and place of the meeting and
                                                                 ment of Commerce from the agencies having                 the agenda.
                                                                 an interest in the subject matter concerned.                (f) Public attendance and participation. (1)
                                                                   (8) Invitation to serve on committee. Invita-           Any member of the public who wishes to do
                                                                 tions to serve on a TAC will be sent by letter            so may file a written statement with any
                                                                 to the selected nominees.                                 TAC before or after any meeting of a com-
                                                                   (9) Election of Chair. The Chair of each TAC            mittee.
                                                                 shall be elected by a vote of the majority of               (2) A request for an opportunity to deliver
                                                                 the members of the committee present and                  an oral statement relevant to matters on the
                                                                 voting.                                                   agenda of a meeting of a TAC will be granted
                                                                   (c) Charter. (1) No TAC established pursu-
                                                                                                                           to the extent that the time available for the
                                                                 ant to this supplement shall meet or take
                                                                                                                           meeting permits. A committee may establish
                                                                 any action until an advisory committee
                                                                                                                           procedures requiring such persons to obtain
                                                                 charter has been filed with the Assistant
                                                                                                                           advance approval for such participation.
                                                                 Secretary for Export Administration of the
                                                                                                                             (3) Attendance at meetings of TACs will be
                                                                 Department of Commerce and with the
                                                                                                                           open to the public unless it is determined
                                                                 standing committees of the Senate and of
                                                                                                                           pursuant to section 10(d) of the Federal Advi-
                                                                 the House of Representatives having legisla-
                                                                                                                           sory Committee Act to be necessary to close
                                                                 tive jurisdiction over the Department. Such
                                                                                                                           all, or some portion, of the meeting to the
                                                                 charter shall contain the following informa-
                                                                                                                           public. A determination that a meeting or
                                                                 tion:
                                                                                                                           portion thereof be closed to the public may
                                                                   (i) The committee’s official designation;
                                                                                                                           be made if all or a specific portion of a meet-
                                                                   (ii) The committee’s objectives and the
                                                                                                                           ing of a TAC is concerned with matters de-
                                                                 scope of its activities;
                                                                                                                           scribed in section 552(b) of Title 5, U.S.C.
                                                                   (iii) The period of time necessary for the
                                                                 committee to carry out its purposes;                        (4) Participation by members of the public
                                                                   (iv) The agency or official to whom the                 in open TAC meetings or questioning of com-
                                                                 committee reports;                                        mittee members or other participants shall
                                                                   (v) The agency responsible for providing                not be permitted except in accordance with
                                                                 the necessary support for the committee;                  procedures established by the committee.
                                                                   (vi) A description of the duties for which                (5) Every effort will be made to accommo-
                                                                 the committee is responsible, and, if such du-            date all members of the public who wish to
                                                                 ties are not solely advisory, a specification             attend.
                                                                 of the authority for such functions;                        (g) Minutes. (1) Detailed minutes of each
                                                                   (vii) The estimated annual operating costs              meeting of each TAC will be kept and will
                                                                 in dollars and years for such committee;                  contain a record of the persons present, a
                                                                   (viii) The estimated number and frequency               complete and accurate description of the
                                                                 of committee meetings;                                    matters discussed and conclusions reached,
                                                                   (ix) The committee’s termination date, if               and copies of all reports received, issued, or
                                                                 less than two years from the date of the                  approved by the TAC.
                                                                 committee’s establishment; and                              (2) The accuracy of all the minutes will be
                                                                   (x) The date the charter is filed.                      certified to by the TAC Chair.
                                                                   (d) Meetings. (1) Each TAC established                    (h) Records. (1) Subject to section 552 of
                                                                 under the provisions of the EAA and para-                 Title 5, U.S.C. and Department of Commerce
                                                                 graph (b) of this supplement shall meet at                Administrative Order 205–12, ‘‘Public Infor-
                                                                 least once every three months at the call of              mation,’’ and ‘‘Public Information’’ regula-
                                                                 its Chair unless it is specifically determined            tions issued by the Department of Commerce
                                                                 by the Chair, in consultation with other                  that are contained in 15 CFR part 4, Subtitle
                                                                 members of the committee, that a particular               A, the records, reports, transcripts, minutes,
                                                                 meeting is not necessary.                                 appendices, working papers, draft, studies,
                                                                   (2) No TAC may meet except at the call of               agenda, or other documents that were made
                                                                 its Chair.                                                available to or prepared for or by each TAC
                                                                   (3) Each meeting of a TAC shall be con-                 will be available for public inspection and
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                                                                 ducted in accordance with an agenda ap-                   copying.

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                                                                 Pt. 730, Supp. 3                                                      15 CFR Ch. VII (1–1–08 Edition)
                                                                   (2) Each TAC will prepare once each year a              dures affecting the establishment or oper-
                                                                 report describing its membership, functions,              ation of advisory committees.
                                                                 activities, and such related matters as would               (3) Nothing in the provisions of this supple-
                                                                 be informative to the public consistent with              ment shall be construed to restrict in any
                                                                 the policy of section 552(b) of Title 5, U.S.C.           manner the right of any person or firm to
                                                                   (3)(i) Requests for records should be ad-               discuss any export control matter with the
                                                                 dressed to: Bureau of Industry and Security,              Department of Commerce or to offer advice
                                                                 Freedom of Information, Records Inspection                or information on export control matters.
                                                                 Facility, U.S. Department of Commerce,                    Similarly, nothing in these provisions shall
                                                                 Room 4513, Washington, DC 20230, Telephone
                                                                                                                           be construed to restrict the Department of
                                                                 (202) 482–2593.
                                                                                                                           Commerce in consulting any person or firm
                                                                   (ii) Rules concerning the use of the
                                                                                                                           relative to any export control matter.
                                                                 Records Inspection Facility are contained in
                                                                 15 CFR part 4, Subtitle A, or may be ob-
                                                                 tained from this facility.                                SUPPLEMENT NO. 3 TO PART 730—OTHER
                                                                   (i) Compensation. If the Department of                     U.S. GOVERNMENT DEPARTMENTS
                                                                 Commerce deems it appropriate, a member                      AND AGENCIES WITH EXPORT CON-
                                                                 of a TAC may be reimbursed for travel, sub-                  TROL RESPONSIBILITIES
                                                                 sistence, and other necessary expenses in-
                                                                 curred in connection with the member’s du-                  NOTE: The departments and agencies iden-
                                                                 ties.                                                     tified with an asterisk control exports for
                                                                   (j) Scope of advisory committee functions. All          foreign policy or national security reasons
                                                                 TACs are limited to the functions described               and, in certain cases, such controls may
                                                                 in their charters.                                        overlap with the controls described in the
                                                                   (k) Duration of committees. Each TAC will               EAR (see part 734 of the EAR).
                                                                 terminate at the end of two years from the
                                                                 date the committee was established or two                      Defense Services and Defense Articles
                                                                 years from the effective date of its most re-
                                                                                                                           * Department of State, Directorate of De-
                                                                 cent extension, whichever is later. Commit-
                                                                                                                             fense Trade Controls, Tel. (703) 875–6644,
                                                                 tees may be continued only for successive
                                                                 two-year periods by appropriate action taken                Fax: (703) 875–6647.
                                                                 by the authorized officer of the Department                 22 CFR parts 120 through 130.
                                                                 of Commerce prior to the date on which such
                                                                                                                                   Drugs, Chemicals and Precursors
                                                                 advisory committee would otherwise termi-
                                                                 nate. TACs may be extended or terminated                  Chemicals: Drug Enforcement Administra-
                                                                 only after consultation with the committee.                tion, Office of Diversion Control, Import-
                                                                   (l) Miscellaneous. (1) TACs established in               Export Unit, Tel. (202) 307–4916, Fax: 202–
                                                                 accordance with paragraph (b) of this supple-              307–4702,         Internet:          http://
                                                                 ment must conform to the provisions of the                 www.deadiversion.usdoj.gov/implexp/
                                                                 Federal Advisory Committee Act (Pub. L. 92–                index.html.
                                                                 463), Office of Management and Budget Cir-
                                                                 cular A–63 (Revision of March 1974), ‘‘Advi-                      21 CFR Parts 1311 Through 1313
                                                                 sory Committee Management,’’ Department
                                                                 of Commerce Administrative Order 205–12,                  Controlled Substances: Drug Enforcement
                                                                 ‘‘Public Information,’’ the applicable provi-               Administration, Office of Diversion Con-
                                                                 sions of the EAA, and any other applicable                  trol, Import-Export Unit, Tel. (202) 307–7182
                                                                 Department of Commerce regulations or pro-                  or (202) 307–7181, Fax: (202) 307–7503, Inter-
                                                                 cedures affecting the establishment or oper-                net:        http://www.deadiversion.usdoj.gov/
                                                                 ation of advisory committees.                               implexp/index.html.
                                                                   (2) Whenever the Department of Commerce                   21 CFR Parts 1311 Through 1313
                                                                 desires the advice or assistance of a par-                Drugs and Biologics: Food and Drug Admin-
                                                                 ticular segment of an industry with respect                 istration, Import/Export, Tel. (301) 594–3150,
                                                                 to any export control problem for which the                 Fax: (301) 594–0165.
                                                                 service of a TAC, as described in paragraph                 21 U.S.C. 301 et seq .
                                                                 (b) of this supplement is either unavailable
                                                                                                                           Investigational drugs permitted: Food and
                                                                 or impracticable, an advisory committee
                                                                                                                             Drug Administration, International Af-
                                                                 may be established pursuant to the provi-
                                                                 sions of section 9 of the Federal Advisory                  fairs, Tel. (301) 443–4480, Fax: (301) 443–0235.
                                                                 Committee Act. Such committees will be                      21 CFR 312.1106
                                                                 subject to the requirements of the Federal
                                                                                                                            Fish and Wildlife Controls; Endangered Species
                                                                 Advisory Committee Act, OMB Circular A–63
                                                                 (Revision of March 1974), ‘‘Advisory Com-                  Department of the Interior, Chief Office of
                                                                 mittee Management,’’ Department of Com-                   Management Authority, Tel. (703) 358–2093,
                                                                 merce Administrative Order 205–12, ‘‘Public               Fax: (703) 358–2280.
                                                                 Information,’’ and any other applicable De-                50 CFR 17.21, 17.22, 17.31, 17.32.
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                                                                 partment of Commerce regulations or proce-

                                                                                                                      196



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                                                                 Bureau of Industry and Security, Commerce                                                            § 732.1
                                                                    Foreign Assets and Transactions Controls                732.3 Steps regarding the ten general prohi-
                                                                                                                                bitions.
                                                                 * Department of Treasury, Office of Foreign
                                                                                                                            732.4 Steps regarding License Exceptions.
                                                                   Assets Control, Licensing, Tel. (202) 622–
                                                                   2480, Fax: (202) 622–1657.                               732.5 Steps regarding Shipper’s Export Dec-
                                                                   31 CFR parts 500 through 590.                                laration or Automated Export System
                                                                                                                                record, Destination Control Statements,
                                                                                    Medical Devices                             and recordkeeping.
                                                                                                                            732.6 Steps for other requirements.
                                                                 Food and Drug Administration, Office of
                                                                  Compliance, Tel. (301) 594–4699, Fax: (301)               SUPPLEMENT NO. 1 TO PART 732—DECISION
                                                                  594–4715.                                                     TREE
                                                                  21 U.S.C. 301 et seq.                                     SUPPLEMENT NO. 2 TO PART 732—AM I SUB-
                                                                                                                                JECT TO THE EAR?
                                                                            Natural Gas and Electric Power                  SUPPLEMENT NO. 3 TO PART 732—BIS’S ‘‘KNOW
                                                                                                                                YOUR CUSTOMER’’ GUIDANCE AND RED
                                                                 Department of Energy, Office of Fuels Pro-
                                                                                                                                FLAGS
                                                                  grams, Tel. (202) 586–9482, Fax: (202) 586–
                                                                  6050.                                                       AUTHORITY: 50 U.S.C. app. 2401 et seq.; 50
                                                                  10 CFR 205.300 through 205.379 and part 590.              U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767, 3
                                                                                                                            CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR
                                                                            Nuclear Materials and Equipment                 44025, 3 CFR, 2001 Comp., p. 783; Notice of Au-
                                                                 * Nuclear Regulatory Commission, Office of                 gust 15, 2007, 72 FR 46137 (August 16, 2007).
                                                                   International Programs, Tel. (301) 415–2344,               SOURCE: 61 FR 12740, Mar. 25, 1996, unless
                                                                   Fax: (301) 415–2395.                                     otherwise noted.
                                                                   10 CFR part 110.
                                                                 Nuclear Technologies and Services Which Con-               § 732.1     Steps overview.
                                                                  tribute to the Production of Special Nuclear                 (a)(1) Introduction. In this part, ref-
                                                                  Material (Snm). Technologies Covered Include              erences to the EAR are references to 15
                                                                  Nuclear Reactors, Enrichment, Reprocessing,               CFR chapter VII, subchapter C. This
                                                                  Fuel Fabrication, and Heavy Water Produc-
                                                                                                                            part is intended to help you determine
                                                                  tion.
                                                                                                                            your obligations under the EAR by
                                                                 Department of Energy Office of Export Con-                 listing logical steps in § 732.2 through
                                                                  trol Policy & Cooperation (NA–24) Tel. (202)              § 732.5 of this part that you can take in
                                                                  586–2331, Fax (202) 586–1348.
                                                                                                                            reviewing these regulations. A flow
                                                                  10 CFR part 810.
                                                                                                                            chart describing these steps is con-
                                                                               Ocean Freight Forwarders                     tained in Supplement No. 1 to part 732.
                                                                 Federal Maritime Commission, Office of                     By cross-references to the relevant pro-
                                                                  Freight Forwarders, Tel. (202) 523–5843,                  visions of the EAR, this part describes
                                                                  Fax: (202) 523–5830.                                      the suggested steps for you to deter-
                                                                  46 CFR part 510.                                          mine applicability of the following:
                                                                                                                               (i) The scope of the EAR (part 734 of
                                                                            Patent Filing Data Sent Abroad
                                                                                                                            the EAR);
                                                                 * Department of Commerce, Patent and                          (ii) Each of the general prohibitions
                                                                   Trademark Office, Licensing and Review;                  (part 736 of the EAR);
                                                                   Tel. (703) 308–1722, Fax: (703) 305–3603, 3604.
                                                                                                                               (iii) The License Exceptions (part 740
                                                                   37 CFR part 5.
                                                                                                                            of the EAR); and
                                                                    U.S. Flagged or U.S. Manufactured Vessels                  (iv) Other requirements such as
                                                                              Over 1,000 Gross Tons                         clearing your export with the U.S. Cus-
                                                                 U.S. Maritime Administration, Division of                  toms Service, keeping records, and
                                                                   Vessel Transfer and Disposal, Tel. (202) 366–            completing and documenting license
                                                                   5821, Fax: (202) 366–3889.                               applications.
                                                                   46 CFR part 221.                                            (2) These steps describe the organiza-
                                                                 [61 FR 12734, Mar. 25, 1996, as amended at 65              tion of the EAR, the relationship
                                                                 FR 38149, June 19, 2000; 69 FR 5687, Feb. 6,               among the provisions of the EAR, and
                                                                 2004; 72 FR 20222, Apr. 24, 2007]                          the appropriate order for you to con-
                                                                                                                            sider the various provisions of the
                                                                   PART 732—STEPS FOR USING THE                             EAR.
                                                                               EAR                                             (b) Facts about your transaction. The
                                                                                                                            following five types of facts determine
                                                                 Sec.                                                       your obligations under the EAR and
                                                                 732.1   Steps overview.                                    will be of help to you in reviewing
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                                                                 732.2   Steps regarding scope of the EAR.                  these steps:

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                                                                 § 732.1                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                    (1) What is it? What an item is, for ex-               and export from abroad of foreign-
                                                                 port control purposes, depends on its                     made items incorporating more than a
                                                                 classification, which is its place on the                 de minimis amount of controlled U.S.
                                                                 Commerce Control List (see part 774 of                    content.
                                                                 the EAR).                                                   (iii) General Prohibition Three (For-
                                                                    (2) Where is it going? The country of ul-              eign-produced Direct Product Reex-
                                                                 timate destination for an export or reex-                 ports): Reexport and export from
                                                                 port also determines licensing require-                   abroad of the foreign-produced direct
                                                                 ments (see parts 738 and 774 of the EAR                   product of U.S. technology and soft-
                                                                 concerning the Country Chart and the                      ware.
                                                                 Commerce Control List).                                     (iv) General Prohibition Four (Denial
                                                                    (3) Who will receive it? The ultimate
                                                                                                                           Orders): Engaging in actions prohibited
                                                                 end-user of your item cannot be a bad
                                                                                                                           by a denial order.
                                                                 end-user. See General Prohibition Four
                                                                 (Denial Orders) in § 736.2(b)(4) and parts                  (v) General Prohibition Five (End-
                                                                 744 and 764 of the EAR for a reference                    Use End-User): Export or reexport to
                                                                 to the list of persons you may not deal                   prohibited end-user or end-users.
                                                                 with.                                                       (vi) General Prohibition Six (Embar-
                                                                    (4) What will they do with it? The ulti-               go): Export or reexport to embargoed
                                                                 mate end-use of your item cannot be a                     destinations.
                                                                 bad end-use. See General Prohibition                        (vii) General Prohibition Seven (U.S.
                                                                 Five (End-Use End-User) in § 736.2(b)(5)                  Person Proliferation Activity): Support
                                                                 and part 744 of the EAR for general                       of proliferation activities.
                                                                 end-use and end-user restrictions.                          (viii) General Prohibition Eight (In-
                                                                    (5) What else do they do? Conduct such                 Transit): In-transit shipments and
                                                                 as contracting, financing, and freight                    items to be unladen from vessels and
                                                                 forwarding in support of a proliferation                  aircraft.
                                                                 project (as described in § 744.6 of the                     (ix) General Prohibition Nine (Or-
                                                                 EAR) may prevent you from dealing                         ders, Terms and Conditions): Violation
                                                                 with someone.                                             of any orders, terms, or conditions.
                                                                    (c) Are your items and activities subject                (x) General Prohibition Ten (Knowl-
                                                                 to the EAR? You should first determine                    edge Violation to Occur): Proceeding
                                                                 whether your commodity, software, or                      with transactions with knowledge that
                                                                 technology is subject to the EAR (see                     a violation has occurred or is about to
                                                                 part 734 of the EAR concerning scope),                    occur.
                                                                 and Steps 1 through 6 help you do that.
                                                                                                                             (2) Controls on items on the Commerce
                                                                 For exports from the United States,
                                                                                                                           Control List (CCL). If your item or ac-
                                                                 only Steps 1 and 2 are relevant. If you
                                                                                                                           tivity is subject to the EAR, you
                                                                 already know that your item or activ-
                                                                 ity is subject to the EAR, you should                     should determine whether any one or
                                                                 go on to consider the ten general prohi-                  more of the ten general prohibitions re-
                                                                 bitions in part 736 of the EAR. If your                   quire a license for your export, reex-
                                                                 item or activity is not subject to the                    port, or activity. Steps 7 through 11
                                                                 EAR, you have no obligations under                        refer to classification of your item on
                                                                 the EAR and may skip the remaining                        the Commerce Control List (CCL) (part
                                                                 steps.                                                    774 of the EAR) and how to use the
                                                                    (d) Does your item or activity require a               Country Chart (Supplement No. 1 to
                                                                 license under one or more of the ten gen-                 part 738 of the EAR) to determine
                                                                 eral prohibitions?—(1) Brief summary of                   whether a license is required based
                                                                 the ten general prohibitions. The general                 upon the classification of your item.
                                                                 prohibitions are found in part 736 of the                 These steps refer to General Prohibi-
                                                                 EAR and referred to in these steps.                       tions One (Exports and Reexports),
                                                                 They consist, very briefly, of the fol-                   Two (Parts and Components Reex-
                                                                 lowing:                                                   ports), and Three (Foreign-Produced
                                                                    (i) General Prohibition One (Exports                   Direct Product Reexports) for all coun-
                                                                 and Reexports): Export and reexport of                    tries except: Cuba, Iran, and North
                                                                 controlled items to listed countries.                     Korea. For these countries, you may
                                                                    (ii) General Prohibition Two (Parts                    skip Steps 7 through 11 and go directly
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                                                                 and Components Reexports): Reexport                       to Step 12.

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                                                                 Bureau of Industry and Security, Commerce                                                           § 732.2

                                                                    (3) Controls on activities. Steps 12                     (f) How do you apply for a license? If
                                                                 through 18 refer to General Prohibi-                      you must file a license application, you
                                                                 tions Four through Ten. Those general                     should review the requirements of part
                                                                 prohibitions apply to all items subject                   748 of the EAR as suggested by Step 26.
                                                                 to the EAR, not merely those items                        Then you should review Steps 27
                                                                 listed on the CCL in part 774 of the                      through 29 concerning Shipper’s Export
                                                                 EAR. For example, they refer to the                       Declarations to be filed with the U.S.
                                                                 general prohibitions for persons denied                   Customs Service, Destination Control
                                                                 export privileges, prohibited end-uses                    Statements for export control docu-
                                                                 and end-users, countries subject to a                     ments, and recordkeeping require-
                                                                 comprehensive embargoed (e.g., Cuba,                      ments.
                                                                 Iran, and North Korea), prohibited ac-                    [61 FR 12740, Mar. 25, 1996, as amended at 62
                                                                 tivities of U.S. persons in support of                    FR 25453, May 9, 1997; 65 FR 38150, June 19,
                                                                 proliferation of weapons of mass de-                      2000; 69 FR 23628, Apr. 29, 2004; 69 FR 46074,
                                                                 struction, prohibited unlading of ship-                   July 30, 2004; 72 FR 3724, Jan. 26, 2007]
                                                                 ments, compliance with orders, terms
                                                                                                                           § 732.2 Steps regarding scope of the
                                                                 and conditions, and activities when a                          EAR.
                                                                 violation has occurred or is about to
                                                                 occur.                                                       Steps 1 though 6 are designed to aid
                                                                    (4) General prohibitions. If none of the               you in determining the scope of the
                                                                                                                           EAR. A flow chart describing these
                                                                 ten general prohibitions applies, you
                                                                                                                           steps is contained in Supplement No. 2
                                                                 should skip the steps concerning Li-
                                                                                                                           to part 732.
                                                                 cense Exceptions and for exports from
                                                                                                                              (a) Step 1: Items subject to the exclusive
                                                                 the United States, review Steps 27
                                                                                                                           jurisdiction of another Federal agency.
                                                                 through 29 concerning Shipper’s Export
                                                                                                                           This step is relevant for both exports
                                                                 Declarations to be filed with the U.S.
                                                                                                                           and reexports. Determine whether your
                                                                 Customs Service, Destination Control
                                                                                                                           item is subject to the exclusive juris-
                                                                 Statements for export control docu-
                                                                                                                           diction of another Federal Agency as
                                                                 ments, and recordkeeping require-                         provided in § 734.3 of the EAR.
                                                                 ments.                                                       (1) If your item is subject to the ex-
                                                                    (e) Is a License Exception available to                clusive jurisdiction of another Federal
                                                                 overcome the license requirement? If you                  agency, comply with the regulations of
                                                                 decide by reviewing the CCL in com-                       that agency. You need not comply with
                                                                 bination with the Country Chart that a                    the EAR and may skip the remaining
                                                                 license is required for your destination,                 steps.
                                                                 you should determine whether a Li-                           (2) If your item is not subject to the
                                                                 cense Exception will except you from                      exclusive jurisdiction of another fed-
                                                                 that requirement. Steps 20 through 24                     eral agency, then proceed to Step 2 in
                                                                 help you determine whether a License                      paragraph (b) of this section.
                                                                 Exception is available. Note that gen-                       (b) Step 2: Publicly available technology
                                                                 erally License Exceptions are not                         and software. This step is relevant for
                                                                 available to overcome General Prohibi-                    both exports and reexports. Determine
                                                                 tions Four through Ten. However, se-                      if your technology or software is pub-
                                                                 lected License Exceptions for embar-                      licly available as defined and explained
                                                                 goed destinations are specified in part                   at part 734 of the EAR. Supplement No.
                                                                 746 of the EAR and License Exceptions                     1 to part 734 of the EAR contains sev-
                                                                 for short supply controls are specified                   eral practical examples describing pub-
                                                                 in part 754 of the EAR. If a License Ex-                  licly available technology and software
                                                                 ception is available and the export is                    that is outside the scope of the EAR.
                                                                 from the United States, you should re-                    The examples are illustrative, not com-
                                                                 view Steps 26 through 28 concerning                       prehensive. Note that encryption soft-
                                                                 Shipper’s Export Declarations to be                       ware controlled for EI reasons under
                                                                 filed with the U.S. Customs Service,                      ECCN 5D002 on the Commerce Control
                                                                 Destination Control Statements for ex-                    List (refer to Supplement No.1 to part
                                                                 port control documents and record-                        774 of the EAR) shall be subject to the
                                                                 keeping requirements. If a License Ex-                    EAR even if publicly available. Accord-
                                                                 ception is not available, go on to Steps                  ingly, the provisions of the EAR con-
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                                                                 25 through 29.                                            cerning the public availability of items

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                                                                 § 732.2                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 are not applicable to encryption items                    on the CCL, determine those items
                                                                 controlled for ‘‘EI’’ reasons under                       that would require a license from BIS
                                                                 ECCN 5D002.                                               for reexport to the ultimate destina-
                                                                   (1) If your technology or software is                   tion of the foreign-made product if
                                                                 publicly available, and therefore out-                    such parts, components, or materials
                                                                 side the scope of the EAR, you may                        were reexported to that destination in
                                                                 proceed with the export or reexport if                    the form received, and divide the total
                                                                 you are not a U.S. person subject to                      value of the controlled U.S. parts, com-
                                                                 General Prohibition Seven. If you are a                   ponents, and materials incorporated
                                                                 U.S. person, go to Step 15 at § 732.3(j) of               into the foreign-made item by the sale
                                                                 this part. If you are a U.S. person and                   price of the foreign-made item.
                                                                 General Prohibition Seven concerning                         (3) If no U.S. parts, components, or
                                                                 proliferation activity of U.S. persons                    materials are incorporated or if the in-
                                                                 does not apply, then you may proceed                      corporated U.S. parts, components, and
                                                                 with the export or reexport of your                       materials are below the de minimis level
                                                                 publicly available technology or soft-                    described in § 734.4 of the EAR, then the
                                                                 ware. Note that all U.S. persons are                      foreign-made item is not subject to the
                                                                 subject to the provisions of General                      EAR by reason of the parts and compo-
                                                                 Prohibition Seven.                                        nents rule, the classification of a for-
                                                                   (2) If your technology or software is                   eign-made item is irrelevant in deter-
                                                                 not publicly available and you are ex-                    mining the scope of the EAR, and you
                                                                 porting from the United States, skip to                   should skip Step 4 and go on to con-
                                                                 Step 7 in § 732.3(b) of this part con-                    sider Step 6 regarding the foreign-pro-
                                                                 cerning the general prohibitions.                         duced direct product rule.
                                                                   (3) If you are exporting items from a                      (4) If controlled parts, components,
                                                                 foreign country, you should then pro-                     or materials are incorporated and are
                                                                 ceed to Step 3 in paragraph (c) of this                   above the de minimis level, then you
                                                                 section and the other steps concerning                    should go on to Step 5.
                                                                 the scope of the EAR.                                        (e) Step 5: Foreign-made items incor-
                                                                   (c) Step 3: Reexport of U.S.-origin items.              porating more than the de minimis level of
                                                                 This step is appropriate only for re-                     U.S. parts, components, or materials. This
                                                                 exporters. For an item in a foreign                       step is appropriate only for foreign-
                                                                 country, you should determine whether                     made items incorporating certain U.S.
                                                                 the item is of U.S. origin. If it is of                   parts. If the incorporated U.S. parts ex-
                                                                 U.S.-origin, skip to Step 7 in § 732.3(b)                 ceed the relevant de minimis level, then
                                                                 of this part. If it is not of U.S. origin,                your export from abroad is subject to
                                                                 then proceed to Step 4 in paragraph (d)                   the EAR. You then should skip to Step
                                                                 of this section.                                          7 at § 732.3 of this part and consider the
                                                                   (d) Step 4: Foreign-made items incor-                   steps regarding all other general prohi-
                                                                 porating less than the de minimis level of                bitions, License Exceptions, and other
                                                                 U.S. parts, components, and materials.                    requirements.
                                                                 This step is appropriate only for items                      (f) Step 6: Foreign-made items produced
                                                                 that are made outside the United                          with certain U.S. technology for export to
                                                                 States and not currently in the United                    specified destinations. This step is appro-
                                                                 States. Special requirements and re-                      priate for foreign-made items in for-
                                                                 strictions apply to items that incor-                     eign countries.
                                                                 porate U.S. origin encryption items                          (1) If your foreign-produced item is
                                                                 (see § 734.4(a)(2) and (b) of the EAR).                   described in an entry on the CCL and
                                                                   (1) For an item made in a foreign                       the Country Chart requires a license to
                                                                 country, you should determine whether                     your export or reexport destination for
                                                                 controlled U.S.-origin parts, compo-                      national security reasons, you should
                                                                 nents, or materials are incorporated as                   determine whether your item is subject
                                                                 provided in § 734.4 of the EAR. Also, de-                 to General Prohibition Three (Foreign-
                                                                 termine the value of the U.S.-origin                      Produced Direct Product Reexports)
                                                                 controlled content as provided in Sup-                    (§ 736.2(b)(3) of the EAR). Your item is
                                                                 plement No. 2 to part 734 of the EAR.                     subject to the EAR if it is captured by
                                                                   (2) To determine the value of the                       General Prohibition Three (Foreign-
                                                                 U.S.-origin controlled content, you                       Produced Direct Product Reexports),
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                                                                 should classify the U.S.-origin content                   and that prohibition applies if your

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                                                                 Bureau of Industry and Security, Commerce                                                           § 732.3

                                                                 transaction meets each of the following                     (i) U.S.-origin commodities, software
                                                                 conditions:                                               and technology unless controlled for
                                                                   (i) Country scope of prohibition. Your                  export exclusively by another Federal
                                                                 export or reexport destination for the                    agency or unless publicly available;
                                                                 direct product is Cuba or a destination                     (ii) Foreign-origin commodities, soft-
                                                                 in Country Group D:1 (see Supplement                      ware, and technology that are within
                                                                 No. 1 to part 740 of the EAR) (reexports                  the scope of General Prohibition Two
                                                                 of foreign-produced direct products ex-                   (Parts and Components Reexports), or
                                                                 ported to other destinations are not                      General Prohibition Three (Foreign-
                                                                 subject to General Prohibition Three);                    Produced Direct Product Reexports).
                                                                   (ii) Scope of technology or software                    (However, such foreign-made items are
                                                                 used to create direct products subject to                 also outside the scope of the EAR if
                                                                 the prohibition. Technology or software                   they are controlled for export exclu-
                                                                 that was used to create the foreign-pro-                  sively by another Federal agency or
                                                                 duced direct product, and such tech-                      publicly available.)
                                                                 nology or software that was subject to
                                                                 the EAR and required a written assur-                     [61 FR 12740, Mar. 25, 1996, as amended at 61
                                                                 ance as a supporting document for a li-                   FR 64274, Dec. 4, 1996; 61 FR 68577, Dec. 30,
                                                                                                                           1996; 62 FR 25453, May 9, 1997; 63 FR 50520,
                                                                 cense or as a precondition for the use
                                                                                                                           Sept. 22, 1998; 65 FR 38150, June 19, 2000; 65 FR
                                                                 of License Exception TSR in § 740.6 of                    62604, Oct. 19, 2000; 67 FR 38860, June 6, 2002;
                                                                 the EAR (reexports of foreign-produced                    69 FR 23628, Apr. 29, 2004; 69 FR 71359, Dec. 9,
                                                                 direct products created with other                        2004]
                                                                 technology and software are not sub-
                                                                 ject to General Prohibition Three); and                   § 732.3 Steps regarding the ten general
                                                                   (iii) Scope of direct products subject to                   prohibitions.
                                                                 the prohibition. The foreign-produced                       (a) Introduction. If your item or activ-
                                                                 direct products are subject to national                   ity is subject to the scope of the EAR,
                                                                 security controls as designated on the                    you should then consider each of the
                                                                 proper ECCN of the Commerce Control                       ten general prohibitions listed in part
                                                                 List in part 774 of the EAR (reexports                    736 of the EAR. General Prohibitions
                                                                 of foreign-produced direct products not
                                                                                                                           One ((Exports and Reexports), Two
                                                                 subject to national security controls
                                                                                                                           (Parts and Components Reexports), and
                                                                 are not subject to General Prohibition
                                                                                                                           Three (Foreign-Produced Direct Prod-
                                                                 Three).
                                                                                                                           uct Reexports) (§ 736.2(b) (1), (2), and (3)
                                                                   (2) License Exceptions. Each License
                                                                                                                           of the EAR) are product controls that
                                                                 Exception described in part 740 of the
                                                                                                                           are shaped and limited by parameters
                                                                 EAR overcomes this General Prohibi-
                                                                                                                           specified on the CCL and Country
                                                                 tion Three if all terms and conditions
                                                                                                                           Chart. General Prohibitions Four
                                                                 of a given License Exception are met
                                                                                                                           through Ten are prohibitions on cer-
                                                                 by the exporter or reexporter.
                                                                                                                           tain activities that are not allowed
                                                                   (3) Subject to the EAR. If your item is
                                                                                                                           without authorization from BIS, and
                                                                 captured by the foreign-produced di-
                                                                                                                           these prohibitions apply to all items
                                                                 rect product control at General Prohi-
                                                                                                                           subject to the EAR unless otherwise
                                                                 bition Three, then your export from
                                                                 abroad is subject to the EAR. You                         specified (§ 736.2(b) (4) through (10) of
                                                                 should next consider the steps regard-                    the EAR).
                                                                 ing all other general prohibitions, Li-                     (b) Step 7: Classification. (1) You
                                                                 cense Exceptions, and other require-                      should classify your items in the rel-
                                                                 ments. If your item is not captured by                    evant entry on the CCL, and you may
                                                                 General Prohibition Three, then your                      do so on your own without the assist-
                                                                 export from abroad is not subject to                      ance of BIS. You are responsible for
                                                                 the EAR. You have completed the steps                     doing so correctly, and your failure to
                                                                 necessary to determine whether your                       correctly classify your items does not
                                                                 transaction is subject to the EAR, and                    relieve you of the obligation to obtain
                                                                 you may skip the remaining steps.                         a license when one is required by the
                                                                 Note that in summary, items in foreign                    EAR.
                                                                 countries are subject to the EAR when                       (2) You have a right to request the
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                                                                 they are:                                                 applicable classification of your item

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                                                                 § 732.3                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 from BIS, and BIS has a duty to pro-                      required for General Prohibitions One
                                                                 vide that classification to you. For fur-                 (Exports and Reexports in the Form
                                                                 ther information on how to obtain clas-                   Received), Two (Parts and Components
                                                                 sification assistance from BIS, see part                  Reexports), and Three (Foreign-Pro-
                                                                 748 of the EAR.                                           duced Direct Product Reexports). (See
                                                                    (3) For items subject to the EAR but                   § 736.2 (b)(1), (b)(2), and (b)(3) of the
                                                                 not listed on the CCL, the proper clas-                   EAR).
                                                                 sification is EAR99. This number is a                        (ii) If one or more cells have an ‘‘X’’
                                                                 ‘‘basket’’ for items not specified under                  in the relevant column, a license is re-
                                                                 any CCL entry and appears at the end                      quired unless you qualify for a License
                                                                 of each Category on the CCL.                              Exception described in part 740 of the
                                                                    (c) Step 8: Country of ultimate destina-               EAR. If a cell does not contain an ‘‘X’’
                                                                 tion. You should determine the country                    for your destination in one or more rel-
                                                                 of ultimate destination. The country of                   evant columns, a license is not re-
                                                                 destination determines the applica-                       quired under the CCL and the Country
                                                                 bility of several general prohibitions,                   Chart.
                                                                 License Exceptions, and other require-                       (iii) Additional controls may apply to
                                                                 ments. Note that part 754 of the EAR                      your export. You must go on to steps 12
                                                                 concerning short supply controls is                       through 18 described in paragraphs (g)
                                                                 self-contained and is the only location                   to (m) of this section to determine
                                                                 in the EAR that contains both the pro-                    whether additional limits described in
                                                                 hibitions and exceptions applicable to                    General Prohibition Two (Parts and
                                                                 short supply controls.
                                                                                                                           Components Reexports) and General
                                                                    (d) Step 9: Reason for control and the
                                                                                                                           Prohibition Three (Foreign-Produced
                                                                 Country Chart—(1) Reason for control
                                                                                                                           Direct Product Reexports ) apply to
                                                                 and column identifier within the Export
                                                                                                                           your proposed transaction. If you are
                                                                 Control Classification Number (ECCN).
                                                                                                                           exporting an item from the United
                                                                 Once you have determined that your
                                                                                                                           States, you should skip Step 10 and
                                                                 item is controlled by a specific ECCN,
                                                                                                                           Step 11. Proceed directly to Step 12 in
                                                                 you must use information contained in
                                                                                                                           paragraph (g) of this section.
                                                                 the ‘‘License Requirements’’ section of
                                                                 that ECCN in combination with the                            (3) License requirements not on the
                                                                 Country Chart to decide whether a li-                     Country Chart. There are two instances
                                                                 cense is required under General Prohi-                    where the Country Chart cannot be
                                                                 bitions One, Two, or Three to a par-                      used to determine if a license is re-
                                                                 ticular destination. The CCL and the                      quired. Items controlled for short sup-
                                                                 Country Chart are taken together to                       ply reasons are not governed by the
                                                                 define these license requirements. The                    Country Chart. Part 754 of the EAR
                                                                 applicable ECCN will indicate the rea-                    contains license requirements and Li-
                                                                 son or reasons for control for items                      cense Exceptions for items subject to
                                                                 within that ECCN. For example, ECCN                       short supply controls. A limited num-
                                                                 6A007 is controlled for national secu-                    ber of ECCNs contained on the CCL do
                                                                 rity, missile technology, and anti-ter-                   not identify a Country Chart column
                                                                 rorism reasons.                                           identifier. In these instances, the ECCN
                                                                    (2) Reason for control within the Coun-                states whether a license is required and
                                                                 try Chart. With each of the applicable                    for which destinations. See § 738.3(a) of
                                                                 Country Chart column identifiers                          the EAR for a list of the ECCNs for
                                                                 noted in the correct ECCN, turn to the                    which you do not need to consult the
                                                                 Country Chart. Locate the correct                         Country Chart to determine licensing
                                                                 Country Chart column identifier on the                    requirements.
                                                                 horizontal axis, and determine whether                       (4) Destinations subject to embargo pro-
                                                                 an ‘‘X’’ is marked in the cell next to                    visions. The Country Chart does not
                                                                 the destination in question. Consult                      apply to Cuba, Iran, and North Korea;
                                                                 § 738.4 of the EAR for comprehensive in-                  and for those countries you should re-
                                                                 structions on using the Country Chart                     view the embargo provisions at part 746
                                                                 and a detailed example.                                   of the EAR and may skip this step con-
                                                                    (i) An ‘‘X’’ in the cell or cells for the              cerning the Country Chart. For Iraq
                                                                 relevant country and reason(s) for con-                   and Rwanda, the Country Chart pro-
ebenthall on PRODPC61 with CFR




                                                                 trol column indicates that a license is                   vides for certain license requirements,

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                                                                 Bureau of Industry and Security, Commerce                                                           § 732.3

                                                                 and part 746 of the EAR provides addi-                    request, ask that certain 5A002 and
                                                                 tional requirements.                                      5D002 parts, components and software
                                                                   (5) Items subject to the EAR but not on                 also be made eligible for de minimis
                                                                 the CCL. Items subject to the EAR that                    treatment (see § 734.4(b) of the EAR).
                                                                 are not on the CCL are properly classi-                      (f) Step 11: Foreign-produced direct
                                                                 fied EAR99. For such items, you may                       product. The following considerations
                                                                 skip this step and proceed directly with                  are appropriate for items abroad and
                                                                 Step 12 in paragraph (g) of this section.                 are the same considerations necessary
                                                                   (e) Step 10: Foreign-made items incor-                  to determine whether a foreign-pro-
                                                                 porating U.S.-origin items and the de                     duced direct product is subject to the
                                                                 minimis rule—(1) Parts and components                     EAR under Step 6 in § 732.2(f) of this
                                                                 rule. The following considerations are                    part.
                                                                 appropriate for items abroad and are                         (1) If your foreign-produced item is
                                                                 the same steps necessary to determine                     described in an entry on the CCL and
                                                                 whether a foreign-made item incor-                        the Country Chart requires a license to
                                                                 porating U.S. parts, components, or                       your export or reexport destination for
                                                                 materials is subject to the EAR. If                       national security reasons, you must de-
                                                                 your foreign-made item is described in                    termine whether your item is subject
                                                                 an entry on the CCL and the Country                       to General Prohibition Three (Foreign-
                                                                 Chart requires a license to your export                   Produced Direct Product Reexports)
                                                                 or reexport destination, you should de-                   (§ 736.2(b)(3) of the EAR). Your item is
                                                                 termine whether the controlled U.S.-                      subject to this general prohibition if
                                                                 origin commodities, software, or tech-                    your transaction meets each of the fol-
                                                                 nology incorporated into the foreign-                     lowing conditions:
                                                                 made item exceeds the de minimis level
                                                                                                                              (i) Country scope of prohibition. Your
                                                                 applicable to the ultimate destination
                                                                                                                           export or reexport destination for the
                                                                 of the foreign-made item, as follows:
                                                                                                                           direct product is Cuba or a destination
                                                                   (i) A 10% de minimis level to embar-
                                                                                                                           in Country Group D:1 (see Supplement
                                                                 goed and terrorist-supporting coun-
                                                                                                                           No. 1 to part 740 of the EAR) (reexports
                                                                 tries; or
                                                                                                                           of foreign-produced direct products ex-
                                                                   (ii) A 25% de minimis level to all other
                                                                 countries.                                                ported to other destinations are not
                                                                   (2) Guidance for calculations. For guid-                subject to General Prohibition Three
                                                                 ance on how to calculate the U.S.-con-                    described in § 736.2(b)(3) of the EAR);
                                                                 trolled content, refer to Supplement                         (ii) Scope of technology or software
                                                                 No. 2 to part 734 of the EAR. Note that                   used to create direct products subject to
                                                                 under certain rules issued by the Office                  the prohibition. Technology or software
                                                                 of Foreign Assets Control, certain ex-                    that was used to create the foreign-pro-
                                                                 ports from abroad by U.S.-owned or                        duced direct product, and such tech-
                                                                 controlled entities may be prohibited                     nology or software that was subject to
                                                                 notwithstanding the de minimis provi-                     the EAR and required a written assur-
                                                                 sions of the EAR. In addition, the de                     ance as a supporting document for a li-
                                                                 minimis exclusions from the parts and                     cense or as a precondition for the use
                                                                 components rule do not relieve U.S.                       of License Exception TSR in § 740.6 of
                                                                 persons of the obligation to refrain                      the EAR (reexports of foreign-produced
                                                                 from supporting the proliferation of                      direct products created with other
                                                                 weapons of mass-destruction and mis-                      technology and software are not sub-
                                                                 siles as provided in General Prohibition                  ject to General Prohibition Three); and
                                                                 Seven (U.S. Person Proliferation Activ-                      (iii) Scope of direct products subject to
                                                                 ity) described in § 736.2(b)(7) of the                    the prohibition. The foreign-produced
                                                                 EAR. Note that foreign-made items                         direct products are controlled for na-
                                                                 that incorporate U.S.-origin items con-                   tional security reasons indicated in an
                                                                 trolled for ‘‘EI’’ reasons under ECCN                     ECCN on the CCL (reexports of foreign-
                                                                 5A002, 5D002 or 5E002 on the Commerce                     produced direct products not subject to
                                                                 Control List (Supplement No.1 to Part                     national security controls are not sub-
                                                                 774 of the EAR) are subject to the EAR                    ject to General Prohibition Three).
                                                                 even if they incorporate less than the                       (2) License Exceptions. Each License
                                                                 de minimis level of U.S. content. How-                    Exception described in part 740 of the
ebenthall on PRODPC61 with CFR




                                                                 ever, exporters may, as part of a review                  EAR overcomes General Prohibition

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                                                                 § 732.3                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 Three (Foreign-Produced Direct Prod-                      for any item is Cuba, Iran, Iraq, North
                                                                 uct Reexports) if all terms and condi-                    Korea, or Rwanda you must consider
                                                                 tions of a given License Exception are                    the requirements of parts 742 and 746 of
                                                                 met by the exporter or reexporter.                        the EAR. Unless otherwise indicated,
                                                                    (g) Step 12: Persons denied export privi-              General Prohibition Six (Embargo) ap-
                                                                 leges. (1) Determine whether your                         plies to all items subject to the EAR,
                                                                 transferee, ultimate end-user, any in-                    i.e. both items on the CCL and within
                                                                 termediate consignee, or any other                        EAR99. You may not make an export or
                                                                 party to a transaction is a person de-                    reexport contrary to the provisions of
                                                                 nied export privileges (see part 764 of                   part 746 of the EAR without a license
                                                                 the EAR). It is a violation of the EAR                    unless:
                                                                 to engage in any activity that violates                     (1) You are exporting or reexporting
                                                                 the terms or conditions of a denial                       only publicly available technology or
                                                                 order. General Prohibition Four (De-                      software or other items outside the
                                                                 nial Orders) applies to all items subject                 scope of the EAR, or
                                                                 to the EAR, i.e., both items on the CCL                     (2) You qualify for a License Excep-
                                                                 and within EAR99.                                         tion referenced in part 746 of the EAR
                                                                    (2) There are no License Exceptions                    concerning embargoed destinations.
                                                                 to General Prohibition Four (Denial                       You may not use a License Exception
                                                                 Orders). The prohibition concerning                       described in part 740 of the EAR to
                                                                 persons denied export privileges may                      overcome General Prohibition Six (Em-
                                                                 be overcome only by a specific author-                    bargo) (§ 736.2(b)(6) of the EAR) unless
                                                                 ization from BIS, something that is                       it is specifically authorized in part 746
                                                                 rarely granted.                                           of the EAR. Note that part 754 of the
                                                                    (h) STEP 13: Prohibited end-uses and                   EAR concerning short supply controls
                                                                 end-users. (1) Review the end-uses and                    is self-contained and is the only loca-
                                                                 end-users prohibited under General                        tion in the EAR for both the prohibi-
                                                                 Prohibition Five (End-Use and End-                        tions and exceptions applicable to
                                                                 User) (§ 736.2(b)(5) of the EAR) described                short supply controls.
                                                                 in part 744 of the EAR. Part 744 of the                     (j) Step 15: Proliferation activity of U.S.
                                                                 EAR contains all the end-use and end-                     persons unrelated to exports and reex-
                                                                 user license requirements, and those                      ports. (1) Review the scope of activity
                                                                 are in addition to the license require-                   prohibited by General Prohibition
                                                                 ments under General Prohibitions One                      Seven (U.S. Person Proliferation Activ-
                                                                 (Exports and Reexports), Two (Parts                       ity) (§ 736.2(b)(7) of the EAR) as that ac-
                                                                 and Components Reexports), and Three                      tivity is described in § 744.6 of the EAR.
                                                                 (Foreign-produced Direct Product Re-                      Keep in mind that such activity is not
                                                                 exports). Unless otherwise indicated,                     limited to exports and reexports and is
                                                                 the license requirements of General                       not limited to items subject to General
                                                                 Prohibition Five (End-Use and End-                        Prohibition One (Exports and Reex-
                                                                 User) described in part 744 of the EAR                    ports), Two (Parts and Components Re-
                                                                 apply to all items subject to the EAR,                    exports), and Three (Foreign-Produced
                                                                 i.e. both items on the CCL and within                     Direct Product Reexports). Moreover,
                                                                 EAR99. Moreover, the requirements of                      such activity extends to services and
                                                                 General Prohibition Five (End-Use and                     dealing in wholly foreign-origin items
                                                                 End-User) are in addition to various                      in support of the specified proliferation
                                                                 end-use     and     end-user   limitations                activity and is not limited to items
                                                                 placed on certain License Exceptions.                     listed on the CCL or included in EAR99.
                                                                    (2) Under License Exception TSU                          (2) Review the definition of U.S. Per-
                                                                 (§ 740.13 of the EAR), operation tech-                    son in part 744 of the EAR.
                                                                 nology and software, sales technology,                      (k) Step 16: In-transit. Shippers and
                                                                 and software updates overcome General                     operators of vessels or aircraft should
                                                                 Prohibition Five (End-Use and End-                        review General Prohibition Eight (In-
                                                                 User) (§ 736.2(b)(5) of the EAR) if all                   Transit) to determine the countries in
                                                                 terms and conditions of these provi-                      which you may not unladen or ship cer-
                                                                 sions are met by the exporter or re-                      tain items in-transit. General Prohibi-
                                                                 exporter.                                                 tion Eight applies to all items subject
                                                                    (i) Step 14: Embargoed countries and                   to the EAR, i.e. both items on the CCL
ebenthall on PRODPC61 with CFR




                                                                 special destinations. If your destination                 and within EAR99.

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                                                                 Bureau of Industry and Security, Commerce                                                           § 732.4

                                                                   (l) Step 17: Review orders, terms, and                  recordkeeping, clearing the Bureau of
                                                                 conditions. Review the orders, terms,                     Customs and Border Protection with
                                                                 and conditions applicable to your                         the appropriate Shipper’s Export Dec-
                                                                 transaction. General Prohibition Nine                     laration or Automated Export System
                                                                 (Orders, Terms, and Conditions) pro-                      record, and using the required Destina-
                                                                 hibits the violation of any orders,                       tion Control Statement.
                                                                 terms, and conditions imposed under                         (2) If none of the ten general prohibi-
                                                                 the EAR. Terms and conditions are fre-                    tions is applicable to your reexport or
                                                                 quently contained in licenses. In addi-                   export from abroad, no license is re-
                                                                 tion, the ten general prohibitions (part                  quired and you should skip all remain-
                                                                 736 of the EAR) and the License Excep-                    ing Steps.
                                                                 tions (part 740 of the EAR) impose                          (3) If one or more of the ten general
                                                                 terms and conditions or limitations on                    prohibitions are applicable, continue
                                                                 your proposed transactions and use of                     with the remaining steps.
                                                                 License Exceptions. A given license or                    [61 FR 12740, Mar. 25, 1996, as amended at 61
                                                                 License Exception may not be used un-                     FR 64274, Dec. 4, 1996; 61 FR 68577, Dec. 30,
                                                                 less each relevant term or condition is                   1996; 62 FR 25453, May 9, 1997; 63 FR 50520,
                                                                 met.                                                      Sept. 22, 1998; 65 FR 38150, June 19, 2000; 65 FR
                                                                   (m) Step 18: Review the ‘‘Know Your                     62604, Oct. 19, 2000; 67 FR 38860, June 6, 2002;
                                                                 Customer’’ Guidance and General Prohi-                    67 FR 54952, Aug. 27, 2002; 67 FR 70546, Nov. 25,
                                                                                                                           2002; 68 FR 50472, Aug. 21, 2003; 69 FR 3005,
                                                                 bition Ten (Knowledge Violation to                        Jan. 22, 2004; 69 FR 5687, Feb. 6, 2004; 69 FR
                                                                 Occur). License requirements under the                    23628, Apr. 29, 2004; 69 FR 46074, July 30, 2004;
                                                                 EAR are determined solely by the clas-                    72 FR 3724, Jan. 26, 2007; 72 FR 20222, Apr. 24,
                                                                 sification, end-use, end-user, ultimate                   2007]
                                                                 destination, and conduct of U.S. per-
                                                                 sons. Supplement No. 1 to part 732 of                     § 732.4 Steps regarding License Excep-
                                                                 the EAR is intended to provide helpful                         tions.
                                                                 guidance regarding the process for the                       (a) Introduction to Steps for License Ex-
                                                                 evaluation of information about cus-                      ceptions. If your export or reexport is
                                                                 tomers, end-uses, and end-users. Gen-                     subject to the EAR and is subject to
                                                                 eral Prohibition Ten (Knowledge Viola-                    General Prohibitions One (Exports and
                                                                 tion to Occur) prohibits anyone from                      Reexports), Two (Parts and Compo-
                                                                 proceeding with a transaction with                        nents Reexports), or Three (Foreign-
                                                                 knowledge that a violation of the EAR                     Produced Direct Product Reexports),
                                                                 has occurred or is about to occur. It                     consider the steps listed in paragraph
                                                                 also prohibits related shipping, financ-                  (b) of this section. If your export or re-
                                                                 ing, and other services. General Prohi-                   export is subject to General Prohibi-
                                                                 bition Ten applies to all items subject                   tions Four (Denial Orders), Seven (U.S.
                                                                 to the EAR, i.e. both items on the CCL                    Person Proliferation Activity), Eight
                                                                 and within EAR99.                                         (In-Transit), Nine (Orders, Terms, and
                                                                   (n) Step 19: Complete the review of the                 Conditions), or Ten (Knowledge Viola-
                                                                 general prohibitions. After completion of                 tion to Occur), there are no License Ex-
                                                                 Steps described in this section and re-                   ceptions available for your export or
                                                                 view of all ten general prohibitions in                   reexport. If your export is subject to
                                                                 part 736 of the EAR, including cross-                     General Prohibition Five (End-Use
                                                                 referenced regulations in the EAR, you                    End-User), consult part 744 of the EAR.
                                                                 will know which, if any, of the ten gen-                  If your export or reexport is subject to
                                                                 eral prohibitions of the EAR apply to                     General Prohibition Six (Embargo),
                                                                 you and your contemplated transaction                     consult part 746 of the EAR for applica-
                                                                 or activity.                                              ble License Exceptions.
                                                                   (1) If none of the ten general prohibi-                    (b) Steps for License Exceptions—(1)
                                                                 tions is applicable to your export from                   Step 20: Applicability of General Prohibi-
                                                                 the United States, no license from BIS                    tions. Determine whether any one or
                                                                 is required, you do not need to qualify                   more of the general prohibitions de-
                                                                 for a License Exception under part 740                    scribed in § 736.2(b) of the EAR apply to
                                                                 of the EAR. You should skip the Steps                     your export or reexport. If no general
                                                                 in § 732.4 of this part regarding License                 prohibition applies to your export or
                                                                 Exceptions and proceed directly to the                    reexport, then you may proceed with
ebenthall on PRODPC61 with CFR




                                                                 Steps in § 732.5 of this part regarding                   your export or reexport and need not

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                                                                 § 732.4                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 review part 740 of the EAR regarding                      bility of certain reporting require-
                                                                 License Exceptions. You are reminded                      ments.
                                                                 of your recordkeeping obligations re-                       (4) Step 23: Scope of License Exceptions.
                                                                 lated to the clearance of the U.S. Cus-                   Some License Exceptions are limited
                                                                 toms Service provided in parts 762 and                    by country or by type of item.
                                                                 758 of the EAR.                                             (i) Countries are arranged in country
                                                                   (2) Step 21: Applicability of restrictions              groups for ease of reference. For a list-
                                                                 on all License Exceptions. Determine                      ing of country groups, please refer to
                                                                 whether any one or more of the restric-                   Supplement No. 1 to part 740 of the
                                                                 tions in § 740.2 of the EAR applies to                    EAR. Unless otherwise indicated in a
                                                                 your export or reexport. If any one or                    License Exception, License Exceptions
                                                                 more of these restrictions apply, there                   do not apply to any exports or reex-
                                                                 are no License Exceptions available to
                                                                                                                           ports to embargoed destinations. If
                                                                 you, and you must either obtain a li-
                                                                                                                           your export or reexport is subject to
                                                                 cense or refrain from the export or re-
                                                                                                                           General Prohibition Six (Embargo) for
                                                                 export.
                                                                                                                           embargoed destinations, License Ex-
                                                                   (3) Step 22: Terms and conditions of the
                                                                                                                           ceptions are only available to the ex-
                                                                 License Exceptions. (i) If none of the re-
                                                                 strictions in § 740.2 of the EAR applies,                 tent specifically provided in part 746 of
                                                                 then review each of the License Excep-                    the EAR concerning embargoed des-
                                                                 tions to determine whether any one of                     tinations.
                                                                 them authorizes your export or reex-                        (ii) Special commodity controls
                                                                 port. Eligibility for License Exceptions                  apply to short supply items. No Li-
                                                                 is based on the item, the country of ul-                  cense Exceptions described in part 740
                                                                 timate destination, the end-use, and                      of the EAR may be used for items list-
                                                                 the end-user, along with any special                      ed on the CCL as controlled for Short
                                                                 conditions imposed within a specific                      Supply reasons. License Exceptions for
                                                                 License Exception.                                        short supply items are found in part 754
                                                                   (ii) You may meet the conditions for                    of the EAR.
                                                                 more than one License Exception.                            (5) Step 24: Compliance with all terms
                                                                 Moreover, although you may not qual-                      and conditions. If a License Exception is
                                                                 ify for some License Exceptions you                       available, you may proceed with your
                                                                 may qualify for others. Review the                        export or reexport. However, you must
                                                                 broadest License Exceptions first, and                    meet all the terms and conditions re-
                                                                 use any License Exception available to                    quired by the License Exception that
                                                                 you. You are not required to use the                      you determined authorized your export
                                                                 most restrictive applicable License Ex-                   or reexport. You must also consult part
                                                                 ception. If you fail to qualify for the                   758 and 762 of the EAR to determine
                                                                 License Exception that you first con-                     your recordkeeping and documentation
                                                                 sider, you may consider any other Li-                     requirements.
                                                                 cense Exception until you have deter-                       (6) Step 25: License requirements. If no
                                                                 mined that no License Exception is                        License Exception is available, then
                                                                 available.                                                you must either obtain a license before
                                                                   (iii) License Exceptions TMP, RPL,                      proceeding with your export or reex-
                                                                 BAG, AVS, GOV, and TSU authorize                          port or you must refrain from the pro-
                                                                 exports notwithstanding the provisions                    posed export or reexport.
                                                                 of the CCL. List-based License Excep-
                                                                                                                             (7) Step 26: License applications. If you
                                                                 tions (LVS, GBS, CIV, TSR, and APP)
                                                                                                                           are going to file a license application
                                                                 are available only to the extent speci-
                                                                                                                           with BIS, you should first review the
                                                                 fied on the CCL. Part 740 of the EAR
                                                                                                                           requirements at part 748 of the EAR.
                                                                 provides authorization for reexports
                                                                                                                           Exporters, reexporters, and exporters
                                                                 only to the extent each License Excep-
                                                                 tion expressly authorizes reexports. Li-                  from abroad should review the instruc-
                                                                 cense Exception APR authorizes reex-                      tions concerning applications and re-
                                                                 ports only.                                               quired support documents prior to sub-
                                                                   (iv) If you are exporting under Li-                     mitting an application for a license.
                                                                 cense Exceptions GBS, CIV, LVS, APP,                      [61 FR 12740, Mar. 25, 1996, as amended at 61
                                                                 TSR, or GOV, you should review § 743.1                    FR 64274, Dec. 4, 1996; 63 FR 2456, Jan. 15,
ebenthall on PRODPC61 with CFR




                                                                 of the EAR to determine the applica-                      1998; 71 FR 20883, Apr. 24, 2006]

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                                                                 Bureau of Industry and Security, Commerce                                                           § 732.5

                                                                 § 732.5 Steps regarding Shipper’s Ex-                     tation that no license is required under
                                                                       port Declaration or Automated Ex-                   any of the General Prohibitions set
                                                                       port System record, Destination                     forth in part 736 of the EAR.
                                                                       Control Statements, and record-                        (2) Item description. You must enter
                                                                       keeping.
                                                                                                                           an item description identical to the
                                                                    (a) Step 27: Shipper’s Export Declara-                 item description on the license when a
                                                                 tion (SED) or Automated Export System                     license is required, or enter an item de-
                                                                 (AES) record. Exporters or agents au-                     scription sufficient in detail to permit
                                                                 thorized to complete the Shipper’s Ex-                    review by the U.S. Government and
                                                                 port Declaration (SED), or to file SED                    verification of the Schedule B Number
                                                                 information electronically using the                      (or Harmonized Tariff Schedule num-
                                                                 Automated Export System (AES),                            ber) for License Exception shipments
                                                                 should review § 758.1 of the EAR to de-                   or shipments for which No License is
                                                                 termine when an SED is required and                       Required (NLR). See § 758.1(g) of the
                                                                 what      export   control    information                 EAR; and 15 CFR 30.7(l) of the FTSR.
                                                                 should be entered on the SED or AES
                                                                                                                              (3) Entering the ECCN. You must
                                                                 record. More detailed information
                                                                                                                           enter the correct Export Control Clas-
                                                                 about how to complete an SED or file
                                                                                                                           sification Number (ECCN) on the SED
                                                                 the SED information electronically
                                                                                                                           or AES record for all licensed and Li-
                                                                 using AES may be found in the Bureau
                                                                                                                           cense Exception shipments, and ‘‘No
                                                                 of Census Foreign Trade Statistics
                                                                 Regulations (FTSR) at 15 CFR part 30.                     License Required’’ (NLR) shipments of
                                                                 Reexporters and firms exporting from                      items having a reason for control other
                                                                 abroad may skip Steps 27 through 29                       than anti-terrorism (AT). The only ex-
                                                                 and proceed directly to § 732.6.                          ception to this requirement would be
                                                                    (1) Entering license authority. You                    the return of unwanted foreign origin
                                                                 must enter the correct license author-                    items, meeting the provisions of Li-
                                                                 ity for your export on the SED or AES                     cense       Exception        TMP,      under
                                                                 record (License number, License Ex-                       § 740.9(b)(3). See § 758.1(g) of the EAR.
                                                                 ception symbol, or No License Re-                            (b) Step 28: Destination Control State-
                                                                 quired designator ‘‘NLR’’) as appro-                      ment. The Destination Control State-
                                                                 priate. See § 758.1(g) of the EAR and 15                  ment (DCS) must be entered on the in-
                                                                 CFR 30.7(m) of the FTSR.                                  voice and on the bill of lading, air way-
                                                                    (i) License number and expiration date.                bill, or other export control document
                                                                 If you are exporting under the author-                    that accompanies the shipment from
                                                                 ity of a license, you must enter the li-                  its point of origin in the United States
                                                                 cense number on the SED or AES                            to the ultimate consignee or end-user
                                                                 record. The expiration date must be en-                   abroad. The person responsible for
                                                                 tered on paper versions of the SED                        preparation of those documents is re-
                                                                 only.                                                     sponsible for entry of the DCS. The
                                                                    (ii) License Exception. If you are ex-                 DCS is required for all exports from the
                                                                 porting under the authority of a Li-                      United States of items on the Com-
                                                                 cense Exception, you must enter the                       merce Control List and is not required
                                                                 correct License Exception symbol (e.g.,                   for items classified as EAR99, unless
                                                                 LVS, GBS, CIV) on the SED or AES                          the export may be made under License
                                                                 record. See § 740.1 and § 740.2 of the                    Exception BAG or GFT (see part 740 of
                                                                 EAR.                                                      the EAR). Reexporters should review
                                                                    (iii) NLR. If you are exporting items                  § 752.15 of the EAR for DCS require-
                                                                 for which no license is required, you                     ments when using a Special Com-
                                                                 must enter the designator NLR. You                        prehensive License; otherwise, DCS re-
                                                                 should use the NLR designator in two                      quirements do not apply to reexports.
                                                                 circumstances: first, when the items to                   See § 758.6 of the EAR.
                                                                 be exported are subject to the EAR but                       (c) Step 29: Recordkeeping. Records of
                                                                 not listed on the Commerce Control                        transactions subject to the EAR must
                                                                 List (CCL) (i.e., items that are classi-                  be maintained for five years in accord-
                                                                 fied as EAR99), and second, when the
                                                                                                                           ance with the recordkeeping provisions
                                                                 items to be exported are listed on the
                                                                                                                           of part 762 of the EAR.
                                                                 CCL but do not require a license. Use of
ebenthall on PRODPC61 with CFR




                                                                 the NLR designator is also a represen-                    [65 FR 42568, July 10, 2000]

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                                                                 § 732.6                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 § 732.6 Steps for other requirements.                     Government officials (see § 758.8 of the
                                                                                                                           EAR).
                                                                    Sections 732.1 through 732.4 of this
                                                                 part are useful in determining the li-                      (d) Specific obligations imposed on
                                                                 cense requirements that apply to you.                     parties to Special Comprehensive li-
                                                                 Other portions of the EAR impose                          censes in part 752 of the EAR.
                                                                 other obligations and requirements.                         (e) Recordkeeping requirements im-
                                                                 Some of them are:                                         posed in part 762 of the EAR.
                                                                    (a) Requirements relating to the use                     (f) Requirements of part 764 of the
                                                                 of a license in § 758.4 of the EAR.                       EAR to disclose facts that may come
                                                                    (b) Obligations of carriers, for-                      to your attention after you file a li-
                                                                 warders, exporters and others to take                     cense application or make other state-
                                                                 specific steps and prepare and deliver                    ments to the government concerning a
                                                                 certain documents to assure that items                    transaction or proposed transaction
                                                                 subject to the EAR are delivered to the                   that is subject to the EAR.
                                                                 destination to which they are licensed                      (g) Certain obligations imposed by
                                                                 or authorized by a License Exception                      part 760 of the EAR on parties who re-
                                                                 or some other provision of the regula-                    ceive requests to take actions related
                                                                 tions in § 758.1 through § 758.6 of the                   to foreign boycotts and prohibits cer-
                                                                 EAR.                                                      tain actions relating to those boycotts.
                                                                    (c) Duty of carriers to return or un-                  [61 FR 12740, Mar. 25, 1996, as amended at 65
                                                                 load shipments at the direction of U.S.                   FR 42568, July 10, 2000]
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                                                                 Bureau of Industry and Security, Commerce                                                  Pt. 732, Supp. 1




                                                                 [69 FR 5687, Feb. 6, 2004]
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                                                                 Pt. 732, Supp. 2                                                      15 CFR Ch. VII (1–1–08 Edition)




                                                                 [69 FR 5687, Feb. 6, 2004]
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                                                                 Bureau of Industry and Security, Commerce                                                  Pt. 732, Supp. 3

                                                                 SUPPLEMENT NO. 3 TO PART 732—BIS’S                           (3) Do not self-blind. Do not cut off the flow
                                                                    ‘‘KNOW YOUR CUSTOMER’’ GUIDANCE                        of information that comes to your firm in
                                                                    AND RED FLAGS                                          the normal course of business. For example,
                                                                                                                           do not instruct the sales force to tell poten-
                                                                       ‘‘Know Your Customer’’ Guidance                     tial customers to refrain from discussing the
                                                                                                                           actual end-use, end-user, and ultimate coun-
                                                                    Various requirements of the EAR are de-
                                                                                                                           try of destination for the product your firm
                                                                 pendent upon a person’s knowledge of the
                                                                                                                           is seeking to sell. Do not put on blinders that
                                                                 end-use, end-user, ultimate destination, or
                                                                                                                           prevent the learning of relevant information.
                                                                 other facts relating to a transaction or ac-
                                                                                                                           An affirmative policy of steps to avoid ‘‘bad’’
                                                                 tivity. These provisions include the non-
                                                                                                                           information would not insulate a company
                                                                 proliferation-related ‘‘catch-all’’ sections
                                                                                                                           from liability, and it would usually be con-
                                                                 and the prohibition against proceeding with
                                                                                                                           sidered an aggravating factor in an enforce-
                                                                 a transaction with knowledge that a viola-
                                                                                                                           ment proceeding.
                                                                 tion of the EAR has occurred or is about to
                                                                 occur.                                                       (4) Employees need to know how to handle
                                                                    (a) BIS provides the following guidance on             ‘‘red flags’’. Knowledge possessed by an em-
                                                                 how individuals and firms should act under                ployee of a company can be imputed to a
                                                                 this knowledge standard. This guidance does               firm so as to make it liable for a violation.
                                                                 not change or interpret the EAR.                          This makes it important for firms to estab-
                                                                    (1) Decide whether there are ‘‘red flags’’.            lish clear policies and effective compliance
                                                                 Take into account any abnormal cir-                       procedures to ensure that such knowledge
                                                                 cumstances in a transaction that indicate                 about transactions can be evaluated by re-
                                                                 that the export may be destined for an inap-              sponsible senior officials. Failure to do so
                                                                 propriate end-use, end-user, or destination.              could be regarded as a form of self-blinding.
                                                                 Such circumstances are referred to as ‘‘red                  (5) Reevaluate all the information after the
                                                                 flags’’. Included among examples of red flags             inquiry. The purpose of this inquiry and re-
                                                                 are orders for items that are inconsistent                evaluation is to determine whether the ‘‘red
                                                                 with the needs of the purchaser, a customer               flags’’ can be explained or justified. If they
                                                                 declining installation and testing when in-               can, you may proceed with the transaction.
                                                                 cluded in the sales price or when normally                If the ‘‘red flags’’ cannot be explained or jus-
                                                                 requested, or requests for equipment configu-             tified and you proceed, you run the risk of
                                                                 rations that are incompatible with the stat-              having had ‘‘knowledge’’ that would make
                                                                 ed destination (e.g., 120 volts in a country              your action a violation of the EAR.
                                                                 with 220 volts). Commerce has developed                      (6) Refrain from the transaction or advise BIS
                                                                 lists of such red flags that are not all-inclu-           and wait. If you continue to have reasons for
                                                                 sive but are intended to illustrate the types             concern after your inquiry, then you should
                                                                 of circumstances that should cause reason-                either refrain from the transaction or submit
                                                                 able suspicion that a transaction will violate            all the relevant information to BIS in the
                                                                 the EAR.                                                  form of an application for a license or in
                                                                    (2) If there are ‘‘red flags’’, inquire. If there      such other form as BIS may specify.
                                                                 are no ‘‘red flags’’ in the information that                 (b) Industry has an important role to play
                                                                 comes to your firm, you should be able to                 in preventing exports and reexports contrary
                                                                 proceed with a transaction in reliance on in-             to the national security and foreign policy
                                                                 formation you have received. That is, absent              interests of the United States. BIS will con-
                                                                 ‘‘red flags’’ (or an express requirement in the           tinue to work in partnership with industry
                                                                 EAR), there is no affirmative duty upon ex-               to make this front line of defense effective,
                                                                 porters to inquire, verify, or otherwise ‘‘go             while minimizing the regulatory burden on
                                                                 behind’’ the customer’s representations.                  exporters. If you have any question about
                                                                 However, when ‘‘red flags’’ are raised in in-             whether you have encountered a ‘‘red flag’’,
                                                                 formation that comes to your firm, you have               you may contact the Office of Export En-
                                                                 a duty to check out the suspicious cir-                   forcement at 1–800–424–2980 or the Office of
                                                                 cumstances and inquire about the end-use,                 Exporter Services at (202) 482–4532.
                                                                 end-user, or ultimate country of destination.
                                                                                                                                              RED FLAGS
                                                                 The duty to check out ‘‘red flags’’ is not con-
                                                                 fined to the use of License Exceptions af-                  Possible indicators that an unlawful diver-
                                                                 fected by the ‘‘know’’ or ‘‘reason to know’’              sion might be planned by your customer in-
                                                                 language in the EAR. Applicants for licenses              clude the following:
                                                                 are required by part 748 of the EAR to obtain               1. The customer or purchasing agent is re-
                                                                 documentary evidence concerning the trans-                luctant to offer information about the end-
                                                                 action, and misrepresentation or conceal-                 use of a product.
                                                                 ment of material facts is prohibited, both in               2. The product’s capabilities do not fit the
                                                                 the licensing process and in all export con-              buyer’s line of business; for example, a small
                                                                 trol documents. You can rely upon represen-               bakery places an order for several sophisti-
                                                                 tations from your customer and repeat them                cated lasers.
                                                                 in the documents you file unless red flags                  3. The product ordered is incompatible
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                                                                 oblige you to take verification steps.                    with the technical level of the country to

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                                                                 Pt. 734                                                               15 CFR Ch. VII (1–1–08 Edition)
                                                                 which the product is being shipped. For ex-                 SOURCE: 61 FR 12746, Mar. 25, 1996, unless
                                                                 ample, semiconductor manufacturing equip-                 otherwise noted.
                                                                 ment would be of little use in a country
                                                                 without an electronics industry.                          § 734.1 Introduction.
                                                                   4. The customer has little or no business
                                                                 background.
                                                                                                                              (a) In this part, references to the Ex-
                                                                   5. The customer is willing to pay cash for              port      Administration      Regulations
                                                                 a very expensive item when the terms of the               (EAR) are references to 15 CFR chapter
                                                                 sale call for financing.                                  VII, subchapter C. This part describes
                                                                   6. The customer is unfamiliar with the                  the scope of the Export Administration
                                                                 product’s performance characteristics but                 Regulations (EAR) and explains certain
                                                                 still wants the product.                                  key terms and principles used in the
                                                                   7. Routine installation, training or mainte-
                                                                                                                           EAR. This part provides the rules you
                                                                 nance services are declined by the customer.
                                                                   8. Delivery dates are vague, or deliveries              need to use to determine whether items
                                                                 are planned for out-of-the-way destinations.              and activities are subject to the EAR.
                                                                   9. A freight forwarding firm is listed as the           This part is the first step in deter-
                                                                 product’s final destination.                              mining your obligations under the
                                                                   10. The shipping route is abnormal for the              EAR. If neither your item nor your ac-
                                                                 product and destination.                                  tivity is subject to the EAR, then you
                                                                   11. Packaging is inconsistent with the stat-
                                                                                                                           do not have any obligations under the
                                                                 ed method of shipment or destination.
                                                                   12. When questioned, the buyer is evasive               EAR and you do not need to review
                                                                 or unclear about whether the purchased                    other parts of the EAR. If you already
                                                                 product is for domestic use, export or reex-              know that your item or activity is sub-
                                                                 port.                                                     ject to the EAR, you do not need to re-
                                                                 [61 FR 12740, Mar. 25, 1996. Redesignated and             view this part and you can go on to re-
                                                                 amended at 62 FR 25453, 25456, May 9, 1997]               view other parts of the EAR to deter-
                                                                                                                           mine your obligations. This part also
                                                                  PART 734—SCOPE OF THE EXPORT                             describes certain key terms and prin-
                                                                                                                           ciples used in the EAR. Specifically, it
                                                                   ADMINISTRATION REGULATIONS                              includes the following terms: ‘‘subject
                                                                 Sec.
                                                                                                                           to the EAR,’’ ‘‘items subject to the
                                                                 734.1 Introduction.                                       EAR,’’ ‘‘export,’’ and ‘‘reexport.’’ These
                                                                 734.2 Important EAR terms and principles.                 and other terms are also included in
                                                                 734.3 Items subject to the EAR.                           part 772 of the EAR, Definitions of
                                                                 734.4 De minimis U.S. content.                            Terms, and you should consult part 772
                                                                 734.5 Activities of U.S. and foreign persons              of the EAR for the meaning of terms
                                                                     subject to the EAR.                                   used in the EAR. Finally, this part
                                                                 734.6 Assistance available from BIS for de-
                                                                     termining licensing and other require-
                                                                                                                           makes clear that compliance with the
                                                                     ments.                                                EAR does not relieve any obligations
                                                                 734.7 Published information and software.                 imposed under foreign laws.
                                                                 734.8 Information resulting from funda-                      (b) This part does not address any of
                                                                     mental research.                                      the provisions set forth in part 760 of
                                                                 734.9 Educational information.                            the EAR, Restrictive Trade Practices
                                                                 734.10 Patent applications.                               or Boycotts.
                                                                 734.11 Government-sponsored research cov-
                                                                                                                              (c) This part does not define the
                                                                     ered by contract controls.
                                                                 734.12 Effect on foreign laws and regula-                 scope of legal authority to regulate ex-
                                                                     tions.                                                ports, including reexports, or activities
                                                                 SUPPLEMENT NO. 1 TO PART 734—QUESTIONS                    found in the Export Administration
                                                                     AND ANSWERS—TECHNOLOGY AND SOFT-                      Act and other statutes. What this part
                                                                     WARE SUBJECT TO THE EAR                               does do is set forth the extent to which
                                                                 SUPPLEMENT NO. 2 TO PART 734—CALCULATION                  such legal authority has been exercised
                                                                     OF VALUES FOR De Minimus RULES                        through the EAR.
                                                                   AUTHORITY: 50 U.S.C. app. 2401 et seq.; 50              [61 FR 12746, Mar. 25, 1996, as amended at 69
                                                                 U.S.C. 1701 et seq.; E.O. 12938, 59 FR 59099, 3           FR 5690, Feb. 6, 2004]
                                                                 CFR, 1994 Comp., p. 950; E.O. 13020, 61 FR
                                                                 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 61          § 734.2 Important EAR terms and prin-
                                                                 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O.                      ciples.
                                                                 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783;
                                                                 Notice of August 15, 2007, 72 FR 46137 (August               (a) Subject to the EAR—Definition. (1)
                                                                 16, 2007); Notice of November 8, 2007, 72 FR              ‘‘Subject to the EAR’’ is a term used in
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                                                                 63963 (November 13, 2007).                                the EAR to describe those items and

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                                                                 Bureau of Industry and Security, Commerce                                                           § 734.2

                                                                 activities over which BIS exercises reg-                     (2) Export of technology or software.
                                                                 ulatory jurisdiction under the EAR.                       (See paragraph (b)(9) for provisions
                                                                 Conversely, items and activities that                     that apply to encryption source code
                                                                 are not subject to the EAR are outside                    and object code software.) ‘‘Export’’ of
                                                                 the regulatory jurisdiction of the EAR                    technology or software, excluding
                                                                 and are not affected by these regula-                     encryption software subject to ‘‘EI’’
                                                                 tions. The items and activities subject                   controls, includes:
                                                                 to the EAR are described in § 734.2                          (i) Any release of technology or soft-
                                                                 through § 734.5 of this part. You should                  ware subject to the EAR in a foreign
                                                                 review the Commerce Control List                          country; or
                                                                 (CCL) and any applicable parts of the                        (ii) Any release of technology or
                                                                 EAR to determine whether an item or                       source code subject to the EAR to a
                                                                 activity is subject to the EAR. How-                      foreign national. Such release is
                                                                 ever, if you need help in determining                     deemed to be an export to the home
                                                                 whether an item or activity is subject                    country or countries of the foreign na-
                                                                 to the EAR, see § 734.6 of this part. Pub-                tional. This deemed export rule does
                                                                 licly available technology and software                   not apply to persons lawfully admitted
                                                                 not subject to the EAR are described in                   for permanent residence in the United
                                                                 § 734.7 through § 734.11 and Supplement                   States and does not apply to persons
                                                                 No. 1 to this part.                                       who are protected individuals under
                                                                    (2) Items and activities subject to the                the Immigration and Naturalization
                                                                 EAR may also be controlled under ex-                      Act (8 U.S.C. 1324b(a)(3)). Note that the
                                                                 port-related programs administered by                     release of any item to any party with
                                                                 other agencies. Items and activities                      knowledge a violation is about to occur
                                                                 subject to the EAR are not necessarily                    is prohibited by § 736.2(b)(10) of the
                                                                 exempted from the control programs of                     EAR.
                                                                 other agencies. Although BIS and other                       (3) Definition of ‘‘release’’ of technology
                                                                 agencies that maintain controls for na-                   or software. Technology or software is
                                                                 tional security and foreign policy rea-                   ‘‘released’’ for export through:
                                                                 sons try to minimize overlapping juris-                      (i) Visual inspection by foreign na-
                                                                 diction, you should be aware that in                      tionals of U.S.-origin equipment and
                                                                 some instances you may have to com-                       facilities;
                                                                 ply with more than one regulatory pro-                       (ii) Oral exchanges of information in
                                                                 gram.                                                     the United States or abroad; or
                                                                    (3) The term ‘‘subject to the EAR’’                       (iii) The application to situations
                                                                 should not be confused with licensing                     abroad of personal knowledge or tech-
                                                                 or other requirements imposed in other                    nical experience acquired in the United
                                                                 parts of the EAR. Just because an item                    States.
                                                                 or activity is subject to the EAR does                       (4) Definition of reexport. ‘‘Reexport’’
                                                                 not mean that a license or other re-                      means an actual shipment or trans-
                                                                 quirement automatically applies. A li-                    mission of items subject to the EAR
                                                                 cense or other requirement applies                        from one foreign country to another
                                                                 only in those cases where other parts                     foreign country; or release of tech-
                                                                 of the EAR impose a licensing or other                    nology or software subject to the EAR
                                                                 requirement on such items or activi-                      to a foreign national outside the
                                                                 ties.                                                     United States, as described in para-
                                                                    (b) Export and reexport—(1) Definition                 graph (b)(5) of this section.
                                                                 of export. ‘‘Export’’ means an actual                        (5) Reexport of technology or software.
                                                                 shipment or transmission of items sub-                    Any release of technology or source
                                                                 ject to the EAR out of the United                         code subject to the EAR to a foreign
                                                                 States, or release of technology or soft-                 national of another country is a
                                                                 ware subject to the EAR to a foreign                      deemed reexport to the home country
                                                                 national in the United States, as de-                     or countries of the foreign national.
                                                                 scribed in paragraph (b)(2)(ii) of this                   However, this deemed reexport defini-
                                                                 section. See paragraph (b)(9) of this                     tion does not apply to persons lawfully
                                                                 section for the definition that applies                   admitted for permanent residence. The
                                                                 to exports of encryption source code                      term ‘‘release’’ is defined in paragraph
                                                                 and object code software subject to the                   (b)(3) of this section. Note that the re-
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                                                                 EAR.                                                      lease of any item to any party with

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                                                                 § 734.2                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 knowledge or reason to know a viola-                      States, over wire, cable, radio, electro-
                                                                 tion is about to occur is prohibited by                   magnetic, photo optical, photoelectric
                                                                 § 736.2(b)(10) of the EAR.                                or other comparable communications
                                                                    (6) For purposes of the EAR, the ex-                   facilities accessible to persons outside
                                                                 port or reexport of items subject to the                  the United States, including transfers
                                                                 EAR that will transit through a coun-                     from electronic bulletin boards, Inter-
                                                                 try or countries or be transshipped in a                  net file transfer protocol and World
                                                                 country or countries to a new country                     Wide Web sites, unless the person mak-
                                                                 or are intended for reexport to the new                   ing the software available takes pre-
                                                                 country, are deemed to be exports to                      cautions adequate to prevent unau-
                                                                 the new country.                                          thorized transfer of such code. See
                                                                    (7) If a territory, possession, or de-                 § 740.13(e) of the EAR for notification
                                                                 partment of a foreign country is not                      requirements for exports or reexports
                                                                 listed on the Country Chart in Supple-                    of encryption source code and object
                                                                 ment No. 1 to part 738 of the EAR, the                    code software considered to be publicly
                                                                 export or reexport of items subject to                    available consistent with the provi-
                                                                 the EAR to such destination is deemed                     sions of § 734.3(b)(3) of the EAR.
                                                                 under the EAR to be an export to the                         (iii) Subject to the General Prohibi-
                                                                 foreign country. For example, a ship-                     tions described in part 736 of the EAR,
                                                                 ment to the Cayman Islands, a depend-                     such precautions for Internet transfers
                                                                 ent territory of the United Kingdom, is                   of products eligible for export under
                                                                 deemed to be a shipment to the United                     § 740.17 (b)(2) of the EAR (encryption
                                                                 Kingdom.                                                  software products, certain encryption
                                                                    (8) Export or reexport of items sub-                   source code and general purpose
                                                                 ject to the EAR does not include ship-                    encryption toolkits) shall include such
                                                                 ments among any of the states of the                      measures as:
                                                                 United States, the Commonwealth of                           (A) The access control system, either
                                                                 Puerto Rico, or the Commonwealth of                       through automated means or human
                                                                 the Northern Mariana Islands or any                       intervention, checks the address of
                                                                 territory, dependency, or possession of                   every system outside of the U.S. or
                                                                 the United States. These destinations                     Canada requesting or receiving a trans-
                                                                 are listed in Schedule C, Classification                  fer and verifies such systems do not
                                                                 Codes and Descriptions for U.S. Export                    have a domain name or Internet ad-
                                                                 Statistics, issued by the Bureau of the                   dress of a foreign government end-user
                                                                 Census.                                                   (e.g., ‘‘.gov,’’ ‘‘.gouv,’’ ‘‘.mil’’ or similar
                                                                    (9) Export of encryption source code                   addresses);
                                                                 and object code software. (i) For pur-                       (B) The access control system pro-
                                                                 poses of the EAR, the export of                           vides every requesting or receiving
                                                                 encryption source code and object code                    party with notice that the transfer in-
                                                                 software means:                                           cludes or would include cryptographic
                                                                    (A) An actual shipment, transfer, or                   software subject to export controls
                                                                 transmission out of the United States                     under the Export Administration Regu-
                                                                 (see also paragraph (b)(9)(ii) of this sec-               lations, and anyone receiving such a
                                                                 tion); or                                                 transfer cannot export the software
                                                                    (B) A transfer of such software in the                 without a license or other authoriza-
                                                                 United States to an embassy or affil-                     tion; and
                                                                 iate of a foreign country.                                   (C) Every party requesting or receiv-
                                                                    (ii) The export of encryption source                   ing a transfer of such software must
                                                                 code and object code software con-                        acknowledge affirmatively that the
                                                                 trolled for ‘‘EI’’ reasons under ECCN                     software is not intended for use by a
                                                                 5D002 on the Commerce Control List                        government end-user, as defined in part
                                                                 (see Supplement No. 1 to part 774 of the                  772, and he or she understands the cryp-
                                                                 EAR) includes downloading, or causing                     tographic software is subject to export
                                                                 the downloading of, such software to                      controls under the Export Administra-
                                                                 locations (including electronic bulletin                  tion Regulations and anyone receiving
                                                                 boards, Internet file transfer protocol,                  the transfer cannot export the software
                                                                 and World Wide Web sites) outside the                     without a license or other authoriza-
                                                                 U.S., or making such software avail-                      tion. BIS will consider acknowledg-
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                                                                 able for transfer outside the United                      ments in electronic form provided they

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                                                                 Bureau of Industry and Security, Commerce                                                           § 734.3

                                                                 are adequate to assure legal under-                       Section 38 of the Arms Export Control
                                                                 takings similar to written acknowledg-                    Act (22 U.S.C. 2778).
                                                                 ments.                                                      (ii) Treasury Department, Office of For-
                                                                 [61 FR 12746, Mar. 25, 1996, as amended at 61
                                                                                                                           eign Assets Control (OFAC). Regulations
                                                                 FR 68578, Dec. 30, 1996; 63 FR 50520, Sept. 22,           administered by OFAC implement
                                                                 1998; 64 FR 13339, Mar. 18, 1999; 65 FR 2496,             broad controls and embargo trans-
                                                                 Jan. 14, 2000; 67 FR 38860, June 6, 2002; 72 FR           actions with certain foreign countries.
                                                                 3945, Jan. 29, 2007]                                      These regulations include controls on
                                                                                                                           exports and reexports to certain coun-
                                                                 § 734.3 Items subject to the EAR.                         tries (31 CFR chapter V). Trading with
                                                                    (a) Except for items excluded in para-                 the Enemy Act (50 U.S.C. app. section 1
                                                                 graph (b) of this section, the following                  et seq.), and International Emergency
                                                                 items are subject to the EAR:                             Economic Powers Act (50 U.S.C. 1701, et
                                                                    (1) All items in the United States, in-                seq.)
                                                                 cluding in a U.S. Foreign Trade Zone                        (iii) U.S. Nuclear Regulatory Commis-
                                                                 or moving intransit through the United                    sion (NRC). Regulations administered
                                                                 States from one foreign country to an-                    by NRC control the export and reex-
                                                                 other;                                                    port of commodities related to nuclear
                                                                    (2) All U.S. origin items wherever lo-                 reactor vessels (10 CFR part 110).
                                                                 cated;                                                    Atomic Energy Act of 1954, as amended
                                                                    (3) U.S. origin parts, components,                     (42 U.S.C. part 2011 et seq.).
                                                                 materials or other commodities inte-                        (iv) Department of Energy (DOE). Reg-
                                                                 grated abroad into foreign-made prod-                     ulations administered by DOE control
                                                                 ucts, U.S. origin software commingled                     the export and reexport of technology
                                                                 with foreign software, and U.S. origin                    related to the production of special nu-
                                                                 technology commingled with foreign                        clear materials (10 CFR part 810).
                                                                 technology:                                               Atomic Energy Act of 1954, as amended
                                                                    (i) In any quantity, as described in                   (42 U.S.C. section 2011 et seq.).
                                                                 section 734.4(a) of this part; or                           (v) Patent and Trademark Office
                                                                    (ii) In quantities exceeding de minimis                (PTO). Regulations administered by
                                                                 levels as described in section 734.4(c)                   PTO provide for the export to a foreign
                                                                 and Supplement No. 2 of this part;                        country of unclassified technology in
                                                                    (4) Certain foreign-made direct prod-                  the form of a patent application or an
                                                                 ucts of U.S. origin technology or soft-                   amendment, modification, or supple-
                                                                 ware, as described in § 736.2(b)(3) of the                ment thereto or division thereof (37
                                                                 EAR. The term ‘‘direct product’’ means                    CFR part 5). BIS has delegated author-
                                                                 the immediate product (including proc-                    ity under the Export Administration
                                                                 esses and services) produced directly by                  Act to the PTO to approve exports and
                                                                 the use of technology or software; and                    reexports of such technology which is
                                                                    (5) Certain commodities produced by                    subject to the EAR. Exports and reex-
                                                                 any plant or major component of a                         ports of such technology not approved
                                                                 plant located outside the United States                   under PTO regulations must comply
                                                                 that is a direct product of U.S.-origin                   with the EAR.
                                                                 technology or software, as described in                     (2) Prerecorded phonograph records
                                                                 § 736.2(b)(3) of the EAR.                                 reproducing in whole or in part, the
                                                                    (b) The following items are not sub-                   content of printed books, pamphlets,
                                                                 ject to the EAR:                                          and miscellaneous publications, includ-
                                                                    (1) Items that are exclusively con-                    ing newspapers and periodicals; printed
                                                                 trolled for export or reexport by the                     books, pamphlets, and miscellaneous
                                                                 following departments and agencies of                     publications including bound news-
                                                                 the U.S. Government which regulate                        papers and periodicals; children’s pic-
                                                                 exports or reexports for national secu-                   ture and painting books; newspaper
                                                                 rity or foreign policy purposes:                          and periodicals, unbound, excluding
                                                                    (i) Department of State. The Inter-                    waste; music books; sheet music; cal-
                                                                 national Traffic in Arms Regulations                      endars and calendar blocks, paper;
                                                                 (22 CFR part 121) administered by the                     maps, hydrographical charts, atlases,
                                                                 Directorate of Defense Trade Controls                     gazetteers, globe covers, and globes
                                                                 relate to defense articles and defense                    (terrestrial and celestial); exposed and
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                                                                 services on the U.S. Munitions List.                      developed microfilm reproducing, in

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                                                                 § 734.4                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 whole or in part, the content of any of                   conductors (other than memory cir-
                                                                 the above; exposed and developed mo-                      cuits) classified under ECCN 3A001 to
                                                                 tion picture film and soundtrack; and                     Computer Tier 3; or exceeding an APP
                                                                 advertising printed matter exclusively                    of 0.002 WT containing U.S.-origin con-
                                                                 related thereto.                                          trolled semiconductors (other than
                                                                    (3) Publicly available technology and                  memory circuits) classified under
                                                                 software, except software controlled                      ECCN 3A001 or high speed interconnect
                                                                 for ‘‘EI’’ reasons under ECCN 5D002 on                    devices (ECCN 4A994.j) to Cuba, Iran,
                                                                 the Commerce Control List and mass                        North Korea, Sudan, and Syria.
                                                                 market encryption software with sym-                         (2) Foreign produced encryption tech-
                                                                 metric key length exceeding 64-bits                       nology that incorporates U.S. origin
                                                                 controlled under ECCN 5D992, that:                        encryption technology controlled by
                                                                    (i) Are already published or will be                   ECCN 5E002 is subject to the EAR re-
                                                                 published as described in § 734.7 of this                 gardless of the amount of U.S. origin
                                                                 part;                                                     content.
                                                                    (ii) Arise during, or result from, fun-                   (3) There is no de minimis level for
                                                                 damental research, as described in                        foreign-made:
                                                                 § 734.8 of this part;                                        (i) Commercial primary or standby
                                                                    (iii) Are educational, as described in                 instrument systems of the type de-
                                                                 § 734.9 of this part;                                     scribed in ECCN 7A994 on the Com-
                                                                    (iv) Are included in certain patent                    merce Control List (Supplement No. 1
                                                                 applications, as described in § 734.10 of                 to part 774 the EAR) when the systems
                                                                 this part.                                                integrate QRS11–00100–100/101 Micro-
                                                                                                                           machined Angular Rate Sensors;
                                                                   NOTE TO PARAGRAPHS (b)(2) AND (b)(3) OF                    (ii) Commercial automatic flight con-
                                                                 THIS SECTION: A printed book or other printed
                                                                                                                           trol systems when the systems inte-
                                                                 material setting forth encryption source
                                                                 code is not itself subject to the EAR (see                grate       QRS11–00050–443/569     Micro-
                                                                 § 734.3(b)(2)).    However,   notwithstanding             machined Angular Rate Sensors; and
                                                                 § 734.3(b)(2), encryption source code in elec-               (iii) Aircraft of the type described in
                                                                 tronic form or media (e.g., computer disk-                ECCN 9A991 when such aircraft incor-
                                                                 ette or CD ROM) remains subject to the EAR                porate a primary or standby instru-
                                                                 (see § 734.3(b)(3)).                                      ment system integrating a QRS11–
                                                                   (4) Foreign made items that have less                   00100–100/101 sensor or an automatic
                                                                 than the de minimis percentage of con-                    flight control system integrating a
                                                                 trolled U.S. content based on the prin-                   QRS11–00050–443/569 sensor.
                                                                 ciples described in § 734.4 of this part.                   NOTE TO PARAGRAPH (a)(3): QRS11 Micro-
                                                                   (c) ‘‘Items subject to the EAR’’ con-                   machined Angular Rate Sensors are subject
                                                                 sist of the items listed on the Com-                      to the export licensing jurisdiction of the
                                                                 merce Control List (CCL) in part 774 of                   U.S. Department of State, Directorate of De-
                                                                                                                           fense Trade Controls, except when the
                                                                 the EAR and all other items which
                                                                                                                           QRS11–00100–100/101 version of the sensor is
                                                                 meet the definition of that term. For                     integrated into and included as an integral
                                                                 ease of reference and classification pur-                 part of a commercial primary or standby in-
                                                                 poses, items subject to the EAR which                     strument system of the type described in
                                                                 are not listed on the CCL are des-                        ECCN 7A994, or aircraft of the type described
                                                                 ignated as ‘‘EAR99.’’                                     in ECCN 9A991 that incorporates a commer-
                                                                                                                           cial primary or standby instrument that has
                                                                 [61 FR 12746, Mar. 25, 1996, as amended at 61             such a sensor integrated, or is exported sole-
                                                                 FR 65464, Dec. 13, 1996; 61 FR 68578, Dec. 30,            ly for integration into such systems; or when
                                                                 1996; 62 FR 25456, May 9, 1997; 67 FR 38860,              the QRS11–00050–443/569 is integrated into a
                                                                 June 6, 2002; 69 FR 5690, Feb. 6, 2004; 69 FR             commercial automatic flight control system
                                                                 5929, Feb. 9, 2004]                                       of the type described in ECCN 7A994, or air-
                                                                                                                           craft of the type described in ECCN 9A991
                                                                 § 734.4 De minimis U.S. content.                          that incorporates an automatic flight con-
                                                                    (a) Items for which there is no de mini-               trol system that has such a sensor inte-
                                                                 mis level. (1) There is no de minimis level               grated, or is exported solely for integration
                                                                                                                           into such a system.
                                                                 for the export from a foreign country
                                                                 of a foreign-made computer with an                          (b) Special requirements for certain
                                                                 Adjusted Peak Performance (APP) ex-                       encryption items. Foreign made items
                                                                 ceeding 0.75 Weighted TeraFLOPS (WT)                      that incorporate U.S. origin items that
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                                                                 containing U.S.-origin controlled semi-                   are listed in this paragraph are subject

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                                                                 Bureau of Industry and Security, Commerce                                                           § 734.4

                                                                 to the EAR unless they meet the de                          (3) Reexports of foreign technology
                                                                 minimis level and destination require-                    commingled with or drawn from con-
                                                                 ments of paragraph (c) or (d) of this                     trolled U.S.-origin technology valued
                                                                 section and the requirements of this                      at 10% or less of the total value of the
                                                                 paragraph.                                                foreign technology.
                                                                    (1) The U.S. origin commodities or                       (d) Except as provided in paragraph
                                                                 software, if controlled under ECCNs                       (a) of this section and subject to the
                                                                 5A002.a.1, .a.2, .a.5, or .a.6, or 5D002,                 provisions of paragraph (b) of this sec-
                                                                 must have been:                                           tion, the following reexports are not
                                                                    (i) Authorized for license exception                   subject to the EAR when made to coun-
                                                                 TSU because of having met the notifi-                     tries other than those described in
                                                                 cation requirements of § 740.13(e) of the                 paragraph (c) of this section.
                                                                 EAR (ECCN 5D002 only);                                      (1) Reexports of a foreign-made com-
                                                                    (ii) Authorized for License Exception                  modity incorporating controlled U.S.-
                                                                 ENC by BIS after a review pursuant to                     origin commodities valued at 25% or
                                                                 § 740.17(b)(3) of the EAR; or                             less of the total value of the foreign-
                                                                    (iii) Authorized for License Excep-                    made commodity;
                                                                 tion ENC by BIS after a review pursu-                       (2) Reexports of foreign-made soft-
                                                                 ant to § 740.17(b)(2), and the foreign                    ware incorporating controlled U.S.-ori-
                                                                 made product will not be sent to any                      gin software valued at 25% or less of
                                                                 destination in Country Group E:1 in                       the total value of the foreign-made
                                                                 Supplement No. 1 to part 740 of the                       software; or
                                                                 EAR.                                                        (3) Reexports of foreign technology
                                                                    (2) The U.S. origin encryption items,                  commingled with or drawn from con-
                                                                 if controlled under ECCNs 5A992, 5D992,                   trolled U.S.-origin technology valued
                                                                 or 5E992 must:                                            at 25% or less of the total value of the
                                                                    (i) Have met the notification require-                 foreign technology.
                                                                 ments of § 742.15(b)(1) of the EAR; or                      (e) For purposes of determining de
                                                                    (ii) Have been determined by BIS to                    minimis levels, technology and source
                                                                 be ‘‘mass market’’ commodities or                         code used to design or produce foreign-
                                                                 software after a review in accordance                     made commodities or software are not
                                                                 with § 742.15(b)(2) of the EAR (ECCNs                     considered to be incorporated into such
                                                                 5A992 and 5D992 only); or                                 foreign-made commodities or software.
                                                                    (iii) Be an item described in                          Commodities subject only to short sup-
                                                                 § 742.15(b)(3)(ii) or § 742.15(b)(3)(iii) of              ply controls are not included in calcu-
                                                                 the EAR.                                                  lating U.S. content.
                                                                                                                             (f) You are responsible for making
                                                                   NOTE TO PARAGRAPH (b): See supplement                   the necessary calculations to deter-
                                                                 No. 2 to this part for de minimis calculation
                                                                                                                           mine whether the de minimis provisions
                                                                 procedures and reporting requirements.
                                                                                                                           apply to your situation. See Supple-
                                                                   (c) Except as provided in para-                         ment No. 2 to part 734 for guidance re-
                                                                 graphs(a) and (b)(1)(iii) and subject to                  garding calculation of U.S. controlled
                                                                 the provisions of paragraphs (b)(1)(i),                   content.
                                                                 (b)(1)(ii) and (b)(2) of this section, the                  (g) See § 770.3 of the EAR for prin-
                                                                 following reexports are not subject to                    ciples that apply to commingled U.S.-
                                                                 the EAR when made to a terrorist-sup-                     origin technology and software.
                                                                 porting country listed in Country                           (h) Notwithstanding the provisions of
                                                                 Group E:1 (see Supplement No. 1 to                        paragraphs (c) and (d) of this section,
                                                                 part 740 of the EAR).                                     U.S.-origin technology controlled by
                                                                   (1) Reexports of a foreign-made com-                    ECCN 9E003a.1 through a.12, and .f, and
                                                                 modity incorporating controlled U.S.-                     related controls, and encryption soft-
                                                                 origin commodities valued at 10% or                       ware controlled for ‘‘EI’’ reasons under
                                                                 less of the total value of the foreign-                   ECCN 5D002 or encryption technology
                                                                 made commodity;                                           controlled for ‘‘EI’’ reasons under
                                                                   (2) Reexports of foreign-made soft-                     ECCN 5E002 do not lose their U.S.-ori-
                                                                 ware incorporating controlled U.S.-ori-                   gin when redrawn, used, consulted, or
                                                                 gin software valued at 10% or less of                     otherwise commingled abroad in any
                                                                 the total value of the foreign-made                       respect with other software or tech-
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                                                                 software; or                                              nology of any other origin. Therefore,

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                                                                 § 734.5                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 any subsequent or similar software or                     (ITAR). In order to determine if the
                                                                 technology prepared or engineered                         Department of State has licensing ju-
                                                                 abroad for the design, construction, op-                  risdiction over an item, you should
                                                                 eration, or maintenance of any plant or                   submit a request for a commodity ju-
                                                                 equipment, or part thereof, which is                      risdiction determination to the Depart-
                                                                 based on or uses any such U.S.-origin                     ment of State, Directorate of Defense
                                                                 software or technology is subject to                      Trade Controls. Exporters should note
                                                                 the EAR.                                                  that in a very limited number of cases,
                                                                 [61 FR 12746, Mar. 25, 1996]                              the categories of items may be subject
                                                                                                                           to both the ITAR and the EAR. The
                                                                   EDITORIAL NOTE: For FEDERAL REGISTER ci-                relevant departments are working to
                                                                 tations affecting § 734.4, see the List of CFR
                                                                 Sections Affected, which appears in the
                                                                                                                           eliminate any unnecessary overlaps
                                                                 Finding Aids section of the printed volume                that may exist.
                                                                 and on GPO Access.                                          (b) As the agency responsible for ad-
                                                                                                                           ministering the EAR, BIS is the only
                                                                 § 734.5 Activities of U.S. and foreign                    agency that has the responsibility for
                                                                      persons subject to the EAR.                          determining whether an item or activ-
                                                                    The following kinds of activities are                  ity is subject to the EAR and, if so,
                                                                 subject to the EAR:                                       what licensing or other requirements
                                                                    (a) Certain activities of U.S. persons                 apply under the EAR. Such a deter-
                                                                 related to the proliferation of nuclear                   mination only affects EAR require-
                                                                 explosive devices, chemical or biologi-                   ments, and does not affect the applica-
                                                                 cal weapons, missile technology as de-                    bility of any other regulatory pro-
                                                                 scribed in § 744.6 of the EAR, and the                    grams.
                                                                 proliferation of chemical weapons as                        (c) If you need help in determining
                                                                 described in part 745 of the EAR.                         BIS licensing or other requirements
                                                                    (b) Activities of U.S. or foreign per-                 you may ask BIS for help by following
                                                                 sons prohibited by any order issued                       the procedures described in § 748.3 of
                                                                 under the EAR, including a Denial                         the EAR.
                                                                 Order issued pursuant to part 766 of the
                                                                 EAR.                                                      § 734.7 Published information and soft-
                                                                    (c) Technical assistance by U.S. per-                        ware.
                                                                 sons with respect to encryption com-                         (a) Information is ‘‘published’’ when
                                                                 modities or software as described in                      it becomes generally accessible to the
                                                                 § 744.9 of the EAR.                                       interested public in any form, includ-
                                                                 [61 FR 12746, Mar. 25, 1996, as amended at 61             ing:
                                                                 FR 68578, Dec. 30, 1996; 64 FR 27141, May 18,                (1) Publication in periodicals, books,
                                                                 1999; 64 FR 47105, Aug. 30, 1999]                         print, electronic, or any other media
                                                                                                                           available for general distribution to
                                                                 § 734.6 Assistance available from BIS                     any member of the public or to a com-
                                                                      for determining licensing and other                  munity of persons interested in the
                                                                      requirements.                                        subject matter, such as those in a sci-
                                                                    (a) If you are not sure whether a                      entific or engineering discipline, either
                                                                 commodity, software, technology, or                       free or at a price that does not exceed
                                                                 activity is subject to the EAR, or is                     the cost of reproduction and distribu-
                                                                 subject to licensing or other require-                    tion (See Supplement No. 1 to this
                                                                 ments under the EAR, you may ask                          part, Questions A(1) through A(6));
                                                                 BIS for an advisory opinion, classifica-                     (2) Ready availability at libraries
                                                                 tion, or a determination whether a par-                   open to the public or at university li-
                                                                 ticular item or activity is subject to                    braries (See Supplement No. 1 to this
                                                                 the EAR. In many instances, including                     part, Question A(6));
                                                                 those where the item is specially de-                        (3) Patents and open (published) pat-
                                                                 signed, developed, configured, adapted,                   ent applications available at any pat-
                                                                 or modified for military application,                     ent office; and
                                                                 the item may fall under the licensing                        (4) Release at an open conference,
                                                                 jurisdiction of the Department of State                   meeting, seminar, trade show, or other
                                                                 and may be subject to the controls of                     open gathering.
                                                                 the International Traffic in Arms Reg-                       (i) A conference or gathering is
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                                                                 ulations (22 CFR parts 120 through 130)                   ‘‘open’’ if all technically qualified

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                                                                 Bureau of Industry and Security, Commerce                                                           § 734.8

                                                                 members of the public are eligible to                     whether research in particular institu-
                                                                 attend and attendees are permitted to                     tional contexts qualifies as ‘‘funda-
                                                                 take notes or otherwise make a per-                       mental research’’. The intent behind
                                                                 sonal record (not necessarily a record-                   these rules is to identify as ‘‘funda-
                                                                 ing) of the proceedings and presen-                       mental research’’ basic and applied re-
                                                                 tations.                                                  search in science and engineering,
                                                                   (ii) All technically qualified members                  where the resulting information is or-
                                                                 of the public may be considered eligible                  dinarily published and shared broadly
                                                                 to attend a conference or other gath-                     within the scientific community. Such
                                                                 ering notwithstanding a registration                      research can be distinguished from pro-
                                                                 fee reasonably related to cost and re-                    prietary research and from industrial
                                                                 flecting an intention that all inter-                     development, design, production, and
                                                                 ested and technically qualified persons                   product utilization, the results of
                                                                 be able to attend, or a limitation on ac-                 which ordinarily are restricted for pro-
                                                                 tual attendance, as long as attendees                     prietary reasons or specific national se-
                                                                 either are the first who have applied or                  curity reasons as defined in § 734.11(b)
                                                                 are selected on the basis of relevant                     of this part. (See Supplement No. 1 to
                                                                 scientific or technical competence, ex-                   this part, Question D(8)). Note that the
                                                                 perience, or responsibility (See Supple-                  provisions of this section do not apply
                                                                 ment No. 1 to this part, Questions B(1)                   to encryption software controlled
                                                                 through B(6)).                                            under ECCN 5D002 for ‘‘EI’’ reasons on
                                                                   (iii) ‘‘Publication’’ includes submis-                  the Commerce Control List (Supple-
                                                                 sion of papers to domestic or foreign                     ment No. 1 to Part 774 of the EAR) or
                                                                 editors or reviewers of journals, or to                   to mass market encryption software
                                                                 organizers of open conferences or other
                                                                                                                           with symmetric key length exceeding
                                                                 open gatherings, with the under-
                                                                                                                           64-bits controlled under ECCN 5D992.
                                                                 standing that the papers will be made
                                                                                                                           See § 740.13(e) of the EAR for certain ex-
                                                                 publicly available if favorably received.
                                                                                                                           ports and reexports under license ex-
                                                                 (See Supplement No. 1 to this part,
                                                                                                                           ception.
                                                                 Questions A(1) and A(3)).
                                                                   (b) Software and information is pub-                      (b) University based research. (1) Re-
                                                                 lished when it is available for general                   search conducted by scientists, engi-
                                                                 distribution either for free or at a price                neers, or students at a university nor-
                                                                 that does not exceed the cost of repro-                   mally will be considered fundamental
                                                                 duction and distribution. See Supple-                     research, as described in paragraphs (b)
                                                                 ment No. 1 to this part, Questions G(1)                   (2) through (6) of this section. (‘‘Uni-
                                                                 through G(3).                                             versity’’ means any accredited institu-
                                                                   (c) Notwithstanding paragraphs (a)                      tion of higher education located in the
                                                                 and (b) of this section, note that                        United States.)
                                                                 encryption software controlled under                        (2) Prepublication review by a spon-
                                                                 ECCN 5D002 for ‘‘EI’’ reasons on the                      sor of university research solely to in-
                                                                 Commerce Control List and mass mar-                       sure that the publication would not in-
                                                                 ket encryption software with sym-                         advertently divulge proprietary infor-
                                                                 metric key length exceeding 64-bits                       mation that the sponsor has furnished
                                                                 controlled under ECCN 5D992 remain                        to the researchers does not change the
                                                                 subject to the EAR. See § 740.13(e) of the                status of the research as fundamental
                                                                 EAR for certain exports and reexports                     research. However, release of informa-
                                                                 under license exception.                                  tion from a corporate sponsor to uni-
                                                                                                                           versity researchers where the research
                                                                 [61 FR 12746, Mar. 25, 1996, as amended at 61
                                                                 FR 65464, Dec. 13, 1996; 61 FR 68578, Dec. 30,
                                                                                                                           results are subject to prepublication
                                                                 1996; 65 FR 2496, Jan. 14, 2000; 67 FR 38861,             review, is subject to the EAR. (See
                                                                 June 6, 2002]                                             Supplement No. 1 to this part, Ques-
                                                                                                                           tions D(7), D(9), and D(10).)
                                                                 § 734.8 Information resulting from fun-                     (3) Prepublication review by a spon-
                                                                      damental research.                                   sor of university research solely to en-
                                                                    (a) Fundamental research. Paragraphs                   sure that publication would not com-
                                                                 (b) through (d) of this section and                       promise patent rights does not change
                                                                 § 734.11 of this part provide specific                    the status of fundamental research, so
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                                                                 rules that will be used to determine                      long as the review causes no more than

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                                                                 § 734.9                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 a temporary delay in publication of the                   information provided by the company
                                                                 research results.                                         to the researchers is not considered to
                                                                    (4) The initial transfer of information                be a proprietary restriction under para-
                                                                 from an industry sponsor to university                    graph (d)(1) of this section. However,
                                                                 researchers is subject to the EAR                         paragraph (d)(1) of this section does not
                                                                 where the parties have agreed that the                    authorize the release of information to
                                                                 sponsor may withhold from publication                     university researchers where the re-
                                                                 some or all of the information so pro-                    search results are subject to pre-
                                                                 vided. (See Supplement No. 1 to this                      publication review. (See Supplement
                                                                 part, Question D(2).)                                     No. 1 to this part, Questions D(8), D(9),
                                                                    (5) University based research is not                   and D(10).)
                                                                 considered ‘‘fundamental research’’ if                       (3) Prepublication review by the com-
                                                                 the university or its researchers accept                  pany solely to ensure that prepublica-
                                                                 (at the request, for example, of an in-                   tion would compromise no patent
                                                                 dustrial sponsor) other restrictions on                   rights will not be considered a propri-
                                                                 publication of scientific and technical                   etary restriction for this purpose, so
                                                                 information resulting from the project                    long as the review causes no more than
                                                                 or activity. Scientific and technical in-                 a temporary delay in publication of the
                                                                 formation resulting from the research                     research results.
                                                                 will nonetheless qualify as funda-                           (4) However, the initial transfer of in-
                                                                 mental research once all such restric-                    formation from a business entity to re-
                                                                 tions have expired or have been re-                       searchers is not authorized under the
                                                                 moved. (See Supplement No. 1 to this                      ‘‘fundamental      research’’    provision
                                                                 part, Question D(7) and D(9).)                            where the parties have agreed that the
                                                                    (6) The provisions of § 734.11 of this                 business entity may withhold from
                                                                 part will apply if a university or its re-                publication some or all of the informa-
                                                                 searchers accept specific national secu-                  tion so provided.
                                                                 rity controls (as defined in § 734.11 of
                                                                                                                              (e) Research based elsewhere. Research
                                                                 this part) on a research project or ac-
                                                                                                                           conducted by scientists or engineers
                                                                 tivity sponsored by the U.S. Govern-
                                                                                                                           who are not working for any of the in-
                                                                 ment. (See Supplement No. 1 to this
                                                                                                                           stitutions described in paragraphs (b)
                                                                 part, Questions E(1) and E(2).)
                                                                                                                           through (d) of this section will be
                                                                    (c) Research based at Federal agencies
                                                                                                                           treated as corporate research, as de-
                                                                 or FFRDCs. Research conducted by sci-
                                                                                                                           scribed in paragraph (d) of this section.
                                                                 entists or engineers working for a Fed-
                                                                                                                           (See Supplement No. 1 to this part,
                                                                 eral agency or a Federally Funded Re-
                                                                                                                           Question D(8).)
                                                                 search      and     Development     Center
                                                                 (FFRDC) may be designated as ‘‘funda-                     [61 FR 12746, Mar. 25, 1996, as amended at 61
                                                                 mental research’’ within any appro-                       FR 68579, Dec. 30, 1996; 62 FR 25456, May 9,
                                                                 priate system devised by the agency or                    1997; 65 FR 2496, Jan. 14, 2000; 67 FR 38861,
                                                                 the FFRDC to control the release of in-                   June 6, 2002]
                                                                 formation by such scientists and engi-
                                                                 neers. (See Supplement No. 1 to this                      § 734.9     Educational information.
                                                                 part, Questions D(8) and D(11).)                            ‘‘Educational information’’ referred
                                                                    (d) Corporate research. (1) Research                   to in § 734.3(b)(3)(iii) of this part is not
                                                                 conducted by scientists or engineers                      subject to the EAR if it is released by
                                                                 working for a business entity will be                     instruction in catalog courses and as-
                                                                 considered ‘‘fundamental research’’ at                    sociated teaching laboratories of aca-
                                                                 such time and to the extent that the                      demic institutions. Dissertation re-
                                                                 researchers are free to make scientific                   search is discussed in § 734.8(b) of this
                                                                 and technical information resulting                       part. (Refer to Supplement No. 1 to
                                                                 from the research publicly available                      this part, Question C(1) through C(6)).
                                                                 without restriction or delay based on                     Note that the provisions of this section
                                                                 proprietary concerns or specific na-                      do not apply to encryption software
                                                                 tional security controls as defined in                    controlled under ECCN 5D002 for ‘‘EI’’
                                                                 § 734.11(b) of this part.                                 reasons on the Commerce Control List
                                                                    (2) Prepublication review by the com-                  or to mass market encryption software
                                                                 pany solely to ensure that the publica-                   with symmetric key length exceeding
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                                                                 tion would compromise no proprietary                      64-bits controlled under ECCN 5D992.

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                                                                 Bureau of Industry and Security, Commerce                                                  Pt. 734, Supp. 1

                                                                 See § 740.13(e) of the EAR for certain ex-                ernment, with right to withhold per-
                                                                 ports and reexports under license ex-                     mission for publication; restrictions on
                                                                 ception.                                                  prepublication dissemination of infor-
                                                                                                                           mation to non-U.S. citizens or other
                                                                 [67 FR 38861, June 6, 2002]
                                                                                                                           categories of persons; or restrictions on
                                                                 § 734.10 Patent applications.                             participation of non-U.S. citizens or
                                                                                                                           other categories of persons in the re-
                                                                    The information referred to in                         search. A general reference to one or
                                                                 § 734.3(b)(3)(iv) of this part is:                        more export control laws or regula-
                                                                    (a) Information contained in a patent                  tions or a general reminder that the
                                                                 application prepared wholly from for-                     Government retains the right to clas-
                                                                 eign-origin technical data where the                      sify is not a ‘‘specific national security
                                                                 application is being sent to the foreign                  control’’. (See Supplement No. 1 to this
                                                                 inventor to be executed and returned                      part, Questions E(1) and E(2).)
                                                                 to the United States for subsequent fil-
                                                                 ing in the U.S. Patent and Trademark                      § 734.12 Effect on foreign laws and reg-
                                                                 Office;                                                       ulations.
                                                                    (b) Information contained in a patent                     Any person who complies with any of
                                                                 application, or an amendment, modi-                       the license or other requirements of
                                                                 fication, supplement or division of an                    the EAR is not relieved of the responsi-
                                                                 application, and authorized for filing in                 bility of complying with applicable for-
                                                                 a foreign country in accordance with                      eign laws and regulations. Conversely,
                                                                 the regulations of the Patent and                         any person who complies with the li-
                                                                 Trademark Office, 37 CFR part 5; 1 or                     cense or other requirements of a for-
                                                                    (c) Information contained in a patent                  eign law or regulation is not relieved of
                                                                 application when sent to a foreign                        the responsibility of complying with
                                                                 country before or within six months                       U.S. laws and regulations, including
                                                                 after the filing of a United States pat-                  the EAR.
                                                                 ent application for the purpose of ob-
                                                                 taining the signature of an inventor                      SUPPLEMENT NO. 1 TO PART 734—QUES-
                                                                 who was in the United States when the                        TIONS AND ANSWERS—TECHNOLOGY
                                                                 invention was made or who is a co-in-                        AND SOFTWARE SUBJECT TO THE
                                                                 ventor with a person residing in the                         EAR
                                                                 United States.
                                                                                                                              This Supplement No. 1 contains explana-
                                                                 § 734.11 Government-sponsored            re-              tory questions and answers relating to tech-
                                                                      search covered by contract con-                      nology and software that is subject to the
                                                                      trols.                                               EAR. It is intended to give the public guid-
                                                                                                                           ance in understanding how BIS interprets
                                                                    (a) If research is funded by the U.S.                  this part, but is only illustrative, not com-
                                                                 Government, and specific national se-                     prehensive. In addition, facts or cir-
                                                                 curity controls are agreed on to pro-                     cumstances that differ in any material way
                                                                 tect information resulting from the re-                   from those set forth in the questions or an-
                                                                 search, § 734.3(b)(3) of this part will not               swers will be considered under the applicable
                                                                 apply to any export or reexport of such                   provisions of the EAR. Exporters should note
                                                                                                                           that the provisions of this supplement do not
                                                                 information in violation of such con-                     apply to encryption software (including
                                                                 trols. However, any export or reexport                    source code) transferred from the U.S. Muni-
                                                                 of information resulting from the re-                     tions List to the Commerce Control List con-
                                                                 search that is consistent with the spe-                   sistent with E.O. 13026 of November 15, 1996
                                                                 cific controls may nonetheless be made                    (61 FR 58767) and pursuant to the Presi-
                                                                 under this provision.                                     dential Memorandum of that date. See
                                                                    (b) Examples of ‘‘specific national se-                § 742.15 of the EAR. This supplement is di-
                                                                 curity controls’’ include requirements                    vided into nine sections according to topic as
                                                                                                                           follows:
                                                                 for prepublication review by the Gov-                        Section A: Publication of technology and
                                                                                                                           exports and reexports of technology that has
                                                                   1 Regulations issued by the Patent and
                                                                                                                           been or will be published.
                                                                 Trademark Office in 37 CFR part 5 provide                    Section B: Release of technology at con-
                                                                 for the export to a foreign country of unclas-            ferences.
                                                                 sified technical data in the form of a patent                Section C: Educational instruction.
                                                                 application or an amendment, modification,                   Section D: Research, correspondence, and
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                                                                 or supplement thereto or division thereof.                informal scientific exchanges.

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                                                                 Pt. 734, Supp. 1                                                      15 CFR Ch. VII (1–1–08 Edition)
                                                                   Section   E: Federal contract controls.                 fore you could export or reexport any of
                                                                   Section   F: Commercial consulting.                     these handbooks or manuals.
                                                                   Section   G: Software.                                     Question A(6): My Ph.D. thesis is on tech-
                                                                   Section   H: Availability in a public library.          nology, listed in the EAR as requiring a li-
                                                                   Section   I: Miscellaneous.                             cense to all destinations except Canada,
                                                                                                                           which has never been published for general
                                                                                Section A: Publication
                                                                                                                           distribution. However, the thesis is available
                                                                   Question A(1): I plan to publish in a foreign           at the institution from which I took the de-
                                                                 journal a scientific paper describing the re-             gree. Do I need a license to send another
                                                                 sults of my research, which is in an area list-           copy to a colleague overseas?
                                                                 ed in the EAR as requiring a license to all                  Answer: That may depend on where in the
                                                                 countries except Canada. Do I need a license              institution it is available. If it is not readily
                                                                 to send a copy to my publisher abroad?                    available in the university library (e.g., by
                                                                   Answer: No. This export transaction is not              filing in open stacks with a reference in the
                                                                 subject to the EAR. The EAR do not cover                  catalog), it is not ‘‘publicly available’’ and
                                                                 technology that is already publicly avail-                the export or reexport would be subject to
                                                                 able, as well as technology that is made pub-             the EAR on that ground. The export or reex-
                                                                 lic by the transaction in question (§§ 734.3              port would not be subject to the EAR if your
                                                                 and 734.7 of this part). Your research results            Ph.D. research qualified as ‘‘fundamental re-
                                                                 would be made public by the planned publi-                search’’ under § 734.8 of this part. If not, how-
                                                                 cation. You would not need a license.                     ever, you will need to obtain a license or
                                                                   Question A(2): Would the answer differ de-              qualify for a License Exception before you
                                                                 pending on where I work or where I per-                   can send a copy out of the country.
                                                                 formed the research?
                                                                                                                              Question A(7): We sell electronically re-
                                                                   Answer: No. Of course, the result would be
                                                                                                                           corded information, including software and
                                                                 different if your employer or another sponsor
                                                                                                                           databases, at wholesale and retail. Our prod-
                                                                 of your research imposed restrictions on its
                                                                 publication (§ 734.8 of this part).                       ucts are available by mail order to any mem-
                                                                   Question (A)3: Would I need a license to                ber of the public, though intended for spe-
                                                                 send the paper to the editors of a foreign                cialists in various fields. They are priced to
                                                                 journal for review to determine whether it                maximize sales to persons in those fields. Do
                                                                 will be accepted for publication?                         we need a license to sell our products to for-
                                                                   Answer: No. This export transaction is not              eign customers?
                                                                 subject to the EAR because you are submit-                   Answer: You would not need a license for
                                                                 ting the paper to the editors with the inten-             otherwise controlled technology or software
                                                                 tion that the paper will be published if favor-           if the technology and software are made pub-
                                                                 ably received (§ 734.7(a)(4)(iii) of this part).          licly available at a price that does not ex-
                                                                   Question A(4): The research on which I will             ceed the cost of production and distribution
                                                                 be reporting in my paper is supported by a                to the technical community. Even if priced
                                                                 grant from the Department of Energy (DOE).                at a higher level, the export or reexport of
                                                                 The grant requires prepublication clearance               the technology or software source code in a
                                                                 by DOE. Does that make any difference                     library accessible to the public is not subject
                                                                 under the Export Administration Regula-                   to the EAR (§ 734.7(a) of this part).
                                                                 tions?
                                                                   Answer: No, the transaction is not subject                            Section B: Conferences
                                                                 to the EAR. But if you published in violation
                                                                                                                             Question B(1): I have been invited to give a
                                                                 of any Department of Energy controls you
                                                                                                                           paper at a prestigious international sci-
                                                                 have accepted in the grant, you may be sub-
                                                                                                                           entific conference on a subject listed as re-
                                                                 ject to appropriate administrative, civil, or
                                                                                                                           quiring a license under the EAR to all coun-
                                                                 criminal sanctions under other laws.
                                                                                                                           tries, except Canada. Scientists in the field
                                                                   Question A(5): We provide consulting serv-
                                                                 ices on the design, layout, and construction              are given an opportunity to submit applica-
                                                                 of integrated circuit plants and production               tions to attend. Invitations are given to
                                                                 lines. A major part of our business is the                those judged to be the leading researchers in
                                                                 publication for sale to clients of detailed               the field, and attendance is by invitation
                                                                 handbooks and reference manuals on key as-                only. Attendees will be free to take notes,
                                                                 pects on the design and manufacturing proc-               but not make electronic or verbatim record-
                                                                 esses. A typical cost of publishing such a                ings of the presentations or discussions.
                                                                 handbook and manual might be $500; the typ-               Some of the attendees will be foreigners. Do
                                                                 ical sales price is about $15,000. Is the publi-          I need a license to give my paper?
                                                                 cation and sale of such handbooks or manu-                  Answer: No. Release of information at an
                                                                 als subject to the EAR?                                   open conference and information that has
                                                                   Answer: Yes. The price is above the cost of             been released at an open conference is not
                                                                 reproduction and distribution (§ 734.7(a)(1) of           subject to the EAR. The conference you de-
                                                                 this part). Thus, you would need to obtain a              scribe fits the definition of an open con-
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                                                                 license or qualify for a License Exception be-            ference (§ 734.7(a) of this part).

                                                                                                                      222



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                                                                 Bureau of Industry and Security, Commerce                                                  Pt. 734, Supp. 1
                                                                   Question B(2): Would it make any dif-                      Answer: No.
                                                                 ference if there were a prohibition on mak-                  Question C(4): Even if that research is fund-
                                                                 ing any notes or other personal record of                 ed by the Government?
                                                                 what transpires at the conference?                           Answer: Even then, but you would not be
                                                                   Answer: Yes. To qualify as an ‘‘open’’ con-             released from any separate obligations you
                                                                 ference, attendees must be permitted to take              have accepted in your grant or contract.
                                                                 notes or otherwise make a personal record                    Question C(5): Would it make any dif-
                                                                 (although not necessarily a recording). If                ference if I were teaching at a foreign uni-
                                                                 note taking or the making of personal
                                                                                                                           versity?
                                                                 records is altogether prohibited, the con-
                                                                 ference would not be considered ‘‘open’’.                    Answer: No.
                                                                   Question B(3): Would it make any dif-                      Question C(6): We teach proprietary courses
                                                                 ference if there were also a registration fee?            on design and manufacture of high-perform-
                                                                   Answer: That would depend on whether the                ance machine tools. Is the instruction in our
                                                                 fee is reasonably related to costs and reflects           classes subject to the EAR?
                                                                 an intention that all interested and tech-                   Answer: Yes. That instruction would not
                                                                 nically qualified persons should be able to               qualify as ‘‘release of educational informa-
                                                                 attend (§ 734.7(a)(4)(ii) of this part).                  tion’’ under § 734.9 of this part because your
                                                                   Question B(4): Would it make any dif-                   proprietary business does not qualify as an
                                                                 ference if the conference were to take place              ‘‘academic institution’’ within the meaning
                                                                 in another country?                                       of § 734.9 of this part. Conceivably, however,
                                                                   Answer: No.                                             the instruction might qualify as ‘‘release at
                                                                   Question B(5): Must I have a license to send            an open * * * seminar, * * * or other open
                                                                 the paper I propose to present at such a for-             gathering’’ under § 734.7(a) of this part. The
                                                                 eign conference to the conference organizer               conditions for qualification of such a sem-
                                                                 for review?                                               inar or gathering as ‘‘open’’, including a fee
                                                                   Answer: No. A license is not required under             ‘‘reasonably related to costs (of the con-
                                                                 the EAR to submit papers to foreign orga-                 ference, not of producing the data) and re-
                                                                 nizers of open conferences or other open                  flecting an intention that all interested and
                                                                 gatherings with the intention that the pa-                technically qualified persons be able to at-
                                                                 pers will be delivered at the conference, and             tend,’’ would have to be satisfied.
                                                                 so made publicly available, if favorably re-
                                                                 ceived. The submission of the papers is not                  Section D: Research, Correspondence, and
                                                                 subject to the EAR (§ 734.7(a)(4)(iii) of this                     Informal Scientific Exchanges
                                                                 part).
                                                                   Question B(6): Would the answers to any of                Question D(1): Do I need a license in order
                                                                 the foregoing questions be different if my                for a foreign graduate student to work in my
                                                                 work were supported by the Federal Govern-                laboratory?
                                                                 ment?                                                       Answer: Not if the research on which the
                                                                   Answer: No. You may export and reexport                 foreign student is working qualifies as ‘‘fun-
                                                                 the papers, even if the release of the paper              damental research’’ under § 734.8 of this part.
                                                                 violates any agreements you have made with                In that case, the research is not subject to
                                                                 your government sponsor. However, nothing                 the EAR.
                                                                 in the EAR relieves you of responsibility for               Question D(2): Our company has entered
                                                                 conforming to any controls you have agreed                into a cooperative research arrangement
                                                                 to in your Federal grant or contract.                     with a research group at a university. One of
                                                                                                                           the researchers in that group is a PRC na-
                                                                        Section C: Educational Instruction                 tional. We would like to share some of our
                                                                   Question C(1): I teach a university graduate            proprietary information with the university
                                                                 course on design and manufacture of very                  research group. We have no way of guaran-
                                                                 high-speed integrated circuitry. Many of the              teeing that this information will not get into
                                                                 students are foreigners. Do I need a license              the hands of the PRC scientist. Do we need
                                                                 to teach this course?                                     to obtain a license to protect against that
                                                                   Answer: No. Release of information by in-               possibility?
                                                                 struction in catalog courses and associated                 Answer: No. The EAR do not cover the dis-
                                                                 teaching laboratories of academic institu-                closure of information to any scientists, en-
                                                                 tions is not subject to the EAR (§ 734.9 of this          gineers, or students at a U.S. university in
                                                                 part).                                                    the course of industry-university research
                                                                   Question C(2): Would it make any dif-                   collaboration under specific arrangements
                                                                 ference if some of the students were from                 between the firm and the university, pro-
                                                                 countries to which export licenses are re-                vided these arrangements do not permit the
                                                                 quired?                                                   sponsor to withhold from publication any of
                                                                   Answer: No.                                             the information that he provides to the re-
                                                                   Question C(3): Would it make any dif-                   searchers. However, if your company and the
                                                                 ference if I talk about recent and as yet un-             researchers have agreed to a prohibition on
                                                                 published results from my laboratory re-                  publication, then you must obtain a license
ebenthall on PRODPC61 with CFR




                                                                 search?                                                   or qualify for a License Exception before

                                                                                                                      223



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                                                                 Pt. 734, Supp. 1                                                      15 CFR Ch. VII (1–1–08 Edition)
                                                                 transferring the information to the univer-               and I had agreed to prepublication review of
                                                                 sity. It is important that you as the cor-                any paper arising from the research?
                                                                 porate sponsor and the university get to-                    Answer: Whether your research would still
                                                                 gether to discuss whether foreign nationals               qualify as ‘‘fundamental’’ would depend on
                                                                 will have access to the information, so that              the nature and purpose of the prepublication
                                                                 you may obtain any necessary authorization                review. If the review is intended solely to en-
                                                                 prior to transferring the information to the              sure that your publications will neither com-
                                                                 research team.                                            promise patent rights nor inadvertently di-
                                                                    Question D(3): My university will host a               vulge proprietary information that the spon-
                                                                 prominent scientist from the PRC who is an                sor has furnished to you, the research could
                                                                 expert on research in engineered ceramics                 still qualify as ‘‘fundamental.’’ But if the
                                                                 and composite materials. Do I require a li-               sponsor will consider as part of its pre-
                                                                 cense before telling our visitor about my lat-            publication review whether it wants to hold
                                                                 est, as yet unpublished, research results in              your new research results as trade secrets or
                                                                 those fields?                                             otherwise proprietary information (even if
                                                                    Answer: Probably not. If you performed                 your voluntary cooperation would be needed
                                                                 your research at the university, and you                  for it to do so), your research would no
                                                                 were subject to no contract controls on re-               longer qualify as ‘‘fundamental.’’ As used in
                                                                 lease of the research, your research would                these regulations it is the actual and in-
                                                                 qualify as ‘‘fundamental research’’ (§ 734.8(a)           tended openness of research results that pri-
                                                                 of this part). Information arising during or              marily determines whether the research
                                                                 resulting from such research is not subject               counts as ‘‘fundamental’’ and so is not sub-
                                                                 to the EAR (§ 734.3(b)(3) of this part).                  ject to the EAR.
                                                                    You should probably assume, however,                      Question D(8): In determining whether re-
                                                                 that your visitor will be debriefed later                 search is thus open and therefore counts as
                                                                                                                           ‘‘fundamental,’’ does it matter where or in
                                                                 about anything of potential military value
                                                                                                                           what sort of institution the research is per-
                                                                 he learns from you. If you are concerned that
                                                                                                                           formed?
                                                                 giving such information to him, even though
                                                                                                                              Answer: In principle, no. ‘‘Fundamental re-
                                                                 permitted, could jeopardize U.S. security in-
                                                                                                                           search’’ is performed in industry, Federal
                                                                 terests, the Commerce Department can put
                                                                                                                           laboratories, or other types of institutions,
                                                                 you in touch with appropriate Government
                                                                                                                           as well as in universities. The regulations in-
                                                                 scientists who can advise you. Write to De-
                                                                                                                           troduce some operational presumptions and
                                                                 partment of Commerce, Bureau of Industry
                                                                                                                           procedures that can be used both by those
                                                                 and Security, P.O. Box 273, Washington, DC                subject to the regulations and by those who
                                                                 20044.                                                    administer them to determine with some
                                                                    Question D(4): Would it make any dif-                  precision whether a particular research ac-
                                                                 ference if I were proposing to talk with a                tivity is covered. Recognizing that common
                                                                 PRC expert in China?                                      and predictable norms operate in different
                                                                    Answer: No, if the information in question             types of institutions, the regulations use the
                                                                 arose during or resulted from the same                    institutional locus of the research as a start-
                                                                 ‘‘fundamental research.’’                                 ing point for these presumptions and proce-
                                                                    Question D(5): Could I properly do some                dures. Nonetheless, it remains the type of re-
                                                                 work with him in his research laboratory in-              search, and particularly the intent and free-
                                                                 side China?                                               dom to publish, that identifies ‘‘fundamental
                                                                    Answer: Application abroad of personal                 research,’’ not the institutional locus
                                                                 knowledge or technical experience acquired                (§ 734.8(a) of this part).
                                                                 in the United States constitutes an export of                Question D(9): I am doing research on high-
                                                                 that knowledge and experience, and such an                powered lasers in the central basic-research
                                                                 export may be subject to the EAR. If any of               laboratory of an industrial corporation. I am
                                                                 the knowledge or experience you export in                 required to submit the results of my re-
                                                                 this way requires a license under the EAR,                search for prepublication review before I can
                                                                 you must obtain such a license or qualify for             publish them or otherwise make them pub-
                                                                 a License Exception.                                      lic. I would like to compare research results
                                                                    Question D(6): I would like to correspond              with a scientific colleague from Vietnam and
                                                                 and share research results with an Iranian                discuss the results of the research with her
                                                                 expert in my field, which deals with tech-                when she visits the United States. Do I need
                                                                 nology that requires a license to all destina-            a license to do so?
                                                                 tions except Canada. Do I need a license to                  Answer: You probably do need a license
                                                                 do so?                                                    (§ 734.8(d) of this part). However, if the only
                                                                    Answer: Not as long as we are still talking            restriction on your publishing any of that in-
                                                                 about information that arose during or re-                formation is a prepublication review solely
                                                                 sulted from research that qualifies as ‘‘fun-             to ensure that publication would com-
                                                                 damental’’ under the rules spelled out in                 promise no patent rights or proprietary in-
                                                                 § 734.8(a) of this part.                                  formation provided by the company to the
                                                                    Question D(7): Suppose the research in                 researcher your research may be considered
ebenthall on PRODPC61 with CFR




                                                                 question were funded by a corporate sponsor               ‘‘fundamental research,’’ in which case you

                                                                                                                      224



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                                                                 Bureau of Industry and Security, Commerce                                                  Pt. 734, Supp. 1
                                                                 may be able to share information because it               the EAR, including criminal sanctions, in
                                                                 is not subject to the EAR. Note that the in-              addition to administrative and civil pen-
                                                                 formation will be subject to the EAR if the               alties for breach of contract under other law.
                                                                 prepublication review is intended to with-                  Question E(2): Do the Export Administra-
                                                                 hold the results of the research from publica-            tion Regulations restrict my ability to pub-
                                                                 tion.                                                     lish the results of my research?
                                                                   Question D(10): Suppose I have already                    Answer: The Export Administration Regu-
                                                                 cleared my company’s review process and am                lations are not the means for enforcing the
                                                                 free to publish all the information I intend              national security controls you have agreed
                                                                 to share with my colleague, though I have                 to. If such a publication violates the con-
                                                                 not yet published?                                        tract, you would be subject to administra-
                                                                   Answer: If the clearance from your com-                 tive, civil, and possible criminal penalties
                                                                 pany means that you are free to make all the              under other law.
                                                                 information publicly available without re-
                                                                 striction or delay, the information is not                       Section F: Commercial Consulting
                                                                 subject to the EAR. (§ 734.8(d) of this part)
                                                                   Question D(11): I work as a researcher at a               Question F(1): I am a professor at a U.S.
                                                                 Government-owned, contractor-operated re-                 university, with expertise in design and cre-
                                                                 search center. May I share the results of my              ation of submicron devices. I have been
                                                                 unpublished research with foreign nationals               asked to be a consultant for a ‘‘third-world’’
                                                                 without concern for export controls under                 company that wishes to manufacture such
                                                                 the EAR?                                                  devices. Do I need a license to do so?
                                                                   Answer: That is up to the sponsoring agen-                Answer: Quite possibly you do. Application
                                                                 cy and the center’s management. If your re-               abroad of personal knowledge or technical
                                                                 search is designated ‘‘fundamental research’’             experience acquired in the United States
                                                                 within any appropriate system devised by                  constitutes an export of that knowledge and
                                                                 them to control release of information by                 experience that is subject to the Export Ad-
                                                                 scientists and engineers at the center, it will           ministration Regulations. If any part of the
                                                                 be treated as such by the Commerce Depart-                knowledge or experience your export or reex-
                                                                 ment, and the research will not be subject to             port deals with technology that requires a li-
                                                                 the EAR. Otherwise, you would need to ob-                 cense under the EAR, you will need to obtain
                                                                 tain a license or qualify for a License Excep-            a license or qualify for a License Exception.
                                                                 tion, except to publish or otherwise make
                                                                 the information public (§ 734.8(c) of this                               Section G: Software 2
                                                                 part).                                                      Question G(1): Is the export or reexport of
                                                                                                                           software in machine readable code subject to
                                                                       Section E: Federal Contract Controls                the EAR when the source code for such soft-
                                                                   Question E(1): In a contract for perform-               ware is publicly available?
                                                                 ance of research entered into with the De-                  Answer: If the source code of a software
                                                                 partment of Defense (DOD), we have agreed                 program is publicly available, then the ma-
                                                                 to certain national security controls. DOD is             chine readable code compiled from the
                                                                 to have ninety days to review any papers we               source code is software that is publicly avail-
                                                                 proposed before they are published and must               able and therefore not subject to the EAR.
                                                                 approve assignment of any foreign nationals                 Question G(2): Is the export or reexport of
                                                                 to the project. The work in question would                software sold at a price that does not exceed
                                                                 otherwise qualify as ‘‘fundamental research’’             the cost of reproduction and distribution
                                                                 section under § 734.8 of this part. Is the infor-         subject to the EAR?
                                                                 mation arising during or resulting from this                Answer: Software in machine readable code
                                                                 sponsored research subject to the EAR?                    is publicly available if it is available to a
                                                                   Answer: Under § 734.11 of this part, any ex-            community at a price that does not exceed
                                                                 port or reexport of information resulting                 the cost of reproduction and distribution.
                                                                 from government-sponsored research that is                Such reproduction and distribution costs
                                                                 inconsistent with contract controls you have              may include variable and fixed allocations of
                                                                 agreed to will not qualify as ‘‘fundamental               overhead and normal profit for the reproduc-
                                                                 research’’ and any such export or reexport                tion and distribution functions either in
                                                                 would be subject to the EAR. Any such ex-                 your company or in a third party distribu-
                                                                 port or reexport that is consistent with the              tion system. In your company, such costs
                                                                 controls will continue to be eligible for ex-             may not include recovery for development,
                                                                 port and reexport under the ‘‘fundamental                 design, or acquisition. In this case, the pro-
                                                                 research’’ rule set forth in § 734.8(a) of this           vider of the software does not receive a fee
                                                                 part. Thus, if you abide by the specific con-             for the inherent value of the software.
                                                                 trols you have agreed to, you need not be
                                                                 concerned about violating the EAR. If you
                                                                 violate those controls and export or reexport               2 Exporters should note that these provi-

                                                                 information as ‘‘fundamental research’’                   sions do not apply to software controlled
                                                                 under § 734.8(a) of this part, you may subject            under the International Traffic in Arms Reg-
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                                                                 yourself to the sanctions provided for under              ulations (e.g., certain encryption software).

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                                                                 Pt. 734, Supp. 1                                                      15 CFR Ch. VII (1–1–08 Edition)
                                                                   Question G(3): Is the export or reexport of             foreign nationals. Would such a tour con-
                                                                 software subject to the EAR if it is sold at a            stitute an export? If so, is the export subject
                                                                 price BIS concludes in a classification letter            to the EAR?
                                                                 to be sufficiently low so as not to subject it               Answer: The EAR define exports and reex-
                                                                 to the EAR?                                               ports of technology to include release
                                                                   Answer: In response to classification re-               through visual inspection by foreign nation-
                                                                 quests, BIS may choose to classify certain                als of U.S.-origin equipment and facilities.
                                                                 software as not subject to the EAR even                   Such an export or reexport qualifies under
                                                                 though it is sold at a price above the costs of           the ‘‘publicly available’’ provision and would
                                                                 reproduction and distribution as long as the              not be subject to the EAR so long as the tour
                                                                 price is nonetheless sufficiently low to qual-            is truly open to all members of the public,
                                                                 ify for such a classification in the judgment             including your competitors, and you do not
                                                                 of BIS.                                                   charge a fee that is not reasonably related to
                                                                                                                           the cost of conducting the tours. Otherwise,
                                                                     Section H: Available in a Public Library
                                                                                                                           you will have to obtain a license, or qualify
                                                                   Question H(1): Is the export or reexport of             for a License Exception, prior to permitting
                                                                 information subject to the EAR if it is avail-            foreign nationals to tour your facilities
                                                                 able in a library and sold through an elec-               (§ 734.7 of this part).
                                                                 tronic or print service?                                     Question I(2): Is the export or reexport of
                                                                   Answer: Electronic and print services for               information subject to the EAR if the infor-
                                                                 the distribution of information may be rel-               mation is not in a library or published, but
                                                                 atively expensive in the marketplace be-                  sold at a price that does not exceed the cost
                                                                 cause of the value vendors add in retrieving              of reproduction and distribution?
                                                                 and organizing information in a useful way.                  Answer: Information that is not in a li-
                                                                 If such information is also available in a li-            brary accessible to the public and that has
                                                                 brary—itself accessible to the public—or has              not been published in any way, may nonethe-
                                                                 been published in any way, that information               less become ‘‘publicly available’’ if you make
                                                                 is ‘‘publicly available’’ for those reasons, and          it both available to a community of persons
                                                                 the information itself continues not to be                and if you sell it at no more than the cost of
                                                                 subject to the EAR even though you access                 reproduction and distribution. Such repro-
                                                                 the information through an electronic or                  duction and distribution costs may include
                                                                 print service for which you or your employer
                                                                                                                           variable and fixed cost allocations of over-
                                                                 pay a substantial fee.
                                                                                                                           head and normal profit for the reproduction
                                                                   Question H(2): Is the export or reexport of
                                                                                                                           and distribution functions either in your
                                                                 information subject to the EAR if the infor-
                                                                                                                           company or in a third party distribution sys-
                                                                 mation is available in an electronic form in
                                                                                                                           tem. In your company, such costs may not
                                                                 a library at no charge to the library patron?
                                                                                                                           include recovery for development, design, or
                                                                   Answer: Information available in an elec-
                                                                                                                           acquisition costs of the technology or soft-
                                                                 tronic form at no charge to the library pa-
                                                                                                                           ware. The reason for this conclusion is that
                                                                 tron in a library accessible to the public is
                                                                 information publicly available even though                the provider of the information receives
                                                                 the library pays a substantial subscription               nothing for the inherent value of the infor-
                                                                 fee for the electronic retrieval service.                 mation.
                                                                   Question H(3): Is the export or reexport of                Question I(3): Is the export or reexport of
                                                                 information subject to the EAR if the infor-              information contributed to an electronic
                                                                 mation is available in a library and sold for             bulletin board subject to the EAR?
                                                                 more than the cost of reproduction and dis-                  Answer: Assume each of the following:
                                                                 tribution?                                                   1. Information is uploaded to an electronic
                                                                   Answer: Information from books, maga-                   bulletin board by a person that is the owner
                                                                 zines, dissertations, papers, electronic data             or originator of the information;
                                                                 bases, and other information available in a                  2. That person does not charge a fee to the
                                                                 library that is accessible to the public is not           bulletin board administrator or the sub-
                                                                 subject to the EAR. This is true even if you              scribers of the bulletin board; and
                                                                 purchase such a book at more than the cost                   3. The bulletin board is available for sub-
                                                                 of reproduction and distribution. In other                scription to any subscriber in a given com-
                                                                 words, such information is ‘‘publicly avail-              munity regardless of the cost of subscrip-
                                                                 able’’ even though the author makes a profit              tion.
                                                                 on your particular purchase for the inherent                 Such information is ‘‘publicly available’’
                                                                 value of the information.                                 and therefore not subject to the EAR even if
                                                                                                                           it is not elsewhere published and is not in a
                                                                               Section I: Miscellaneous
                                                                                                                           library. The reason for this conclusion is
                                                                   Question I(1): The manufacturing plant                  that the bulletin board subscription charges
                                                                 that I work at is planning to begin admitting             or line charges are for distribution exclu-
                                                                 groups of the general public to tour the plant            sively, and the provider of the information
                                                                 facilities. We are concerned that a license               receives nothing for the inherent value of
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                                                                 might be required if the tour groups include              the information.

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                                                                 Bureau of Industry and Security, Commerce                                                  Pt. 734, Supp. 2
                                                                   Question I(4): Is the export or reexport of             made item is not subject to the EAR by rea-
                                                                 patented information fully disclosed on the               son of § 734.4 of this part, the classification of
                                                                 public record subject to the EAR?                         a foreign-made item is irrelevant in deter-
                                                                   Answer: Information to the extent it is dis-            mining the scope of the EAR, and you should
                                                                 closed on the patent record open to the pub-              skip Step 4 in § 732.2(d) and go on to consider
                                                                 lic is not subject to the EAR even though                 Step 6 in § 732.2(f) of the EAR regarding the
                                                                 you may use such information only after                   foreign-produced direct product rule.
                                                                 paying a fee in excess of the costs of repro-               NOTE TO PARAGRAPH (a)—U.S. origin pe-
                                                                 duction and distribution. In this case the                ripheral or accessory devices that are merely
                                                                 seller does receive a fee for the inherent                rack mounted with or cable connected into
                                                                 value of the technical data; however, the ex-             foreign equipment are not deemed to be in-
                                                                 port or reexport of the information is none-              corporated components even though in-
                                                                 theless not subject to the EAR because any                tended for use with products made abroad.
                                                                 person can obtain the technology from the                 Rather, such items are treated as U.S. items
                                                                 public record and further disclose or publish             that retain their identity and remain subject
                                                                 the information. For that reason, it is im-               to the EAR.
                                                                 possible to impose export controls that deny
                                                                 access to the information.                                  (b) One-time report prior to reliance upon
                                                                                                                           the de minimis exclusion. Report requirement.
                                                                 [61 FR 12746, Mar. 25, 1996, as amended at 61             Before you may rely upon the de minimis ex-
                                                                 FR 68579, Dec. 30, 1996; 62 FR 25456, May 9,              clusion for foreign software and technology
                                                                 1997]                                                     commingled with U.S. software or tech-
                                                                                                                           nology, you must file a one-time report for
                                                                 SUPPLEMENT NO. 2 TO PART 734—CAL-                         the foreign software or technology. The re-
                                                                    CULATION OF VALUES FOR DE MINI-                        port must include the percentage of U.S.-
                                                                    MIS RULES                                              content by value and a description of your
                                                                                                                           calculations including relevant values, as-
                                                                    (a) Use the following guidelines in deter-             sumptions, and the basis or methodologies
                                                                 mining values for establishing exemptions or              for making the percentage calculation. The
                                                                 for submission of a request for authorization:            three criteria important to BIS in its review
                                                                    (1) U.S. content value.                                of your report will be the export price of the
                                                                    (i) U.S. content value is the delivered cost           U.S.-content, the assumption regarding fu-
                                                                 to the foreign manufacturer of the U.S. ori-              ture sales of software, and the choice of the
                                                                 gin parts, components, or materials. (When                scope of foreign technology. Your meth-
                                                                 affiliated firms have special arrangements                odologies must be based upon the accounting
                                                                 that result in lower than normal pricing, the             standards used in the operation of your busi-
                                                                 cost should reflect ‘‘fair market’’ prices that           ness, and you must specify that standard in
                                                                 would normally be charged to similar, unaf-               your report. Regardless of the accounting
                                                                 filiated customers.)                                      systems, standard, or conventions you use in
                                                                    (ii) In calculating the U.S. content value,            the operation of your business, you may not
                                                                 do not include parts, components, or mate-                depreciate the fair market values reported or
                                                                 rials that could be exported from the United              otherwise reduce the fair market values by
                                                                 States to the new country of destination                  other accounting conventions such as depre-
                                                                 without a license (designated as ‘‘NLR’’) or              ciation. You may rely upon the de minimis ex-
                                                                 under License Exception GBS (see part 740 of              clusion from the commingled rule only to
                                                                 the EAR) or under NLR for items classified                the extent you have reported the relevant
                                                                 as EAR99.                                                 calculations, values, assumptions, and the
                                                                    (2) The foreign-made product value is the              basis or methodologies for the calculations.
                                                                 normal selling price f.o.b. factory (excluding            These values may be historic or projected.
                                                                 value added taxes or excise taxes).                       You may rely on projected values only to the
                                                                    (3) To determine the value of the U.S.-ori-            extent that and for so long as they remain
                                                                 gin controlled content, you should classify               consistent with your report or future values
                                                                 the U.S.-origin content on the Commerce                   reduce the U.S.-content under your reported
                                                                 Control List, determine those items that                  assumptions, basis, and methodologies. You
                                                                 would require a license from BIS for reexport             are not required to file the above report if
                                                                 to the ultimate destination of the foreign-               you do not choose to take advantage of the
                                                                 made product if such parts, components, or                de minimis exclusion from the commingled
                                                                 materials were reexported to that destina-                rule.
                                                                 tion in the form received, and divide the                   (2) Export price. The report must include a
                                                                 total value of the controlled U.S. parts, com-            description of the U.S.-content including its
                                                                 ponents, and materials incorporated into the              classification on the Commerce Control List,
                                                                 foreign-made item by the sale price of the                its performance characteristics and features,
                                                                 foreign-made item.                                        and the method of calculating its fair mar-
                                                                    (4) If no U.S. parts, components or mate-              ket value. The fair market value shall be the
                                                                 rials are incorporated or if the incorporated             arms-length transaction price, if it is avail-
                                                                 U.S. parts, components, and materials are                 able. If an arms-length transaction price is
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                                                                 below the de minimis level, then the foreign-             unavailable, then the report will describe the

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                                                                 Pt. 736                                                               15 CFR Ch. VII (1–1–08 Edition)
                                                                 valuation method chosen to calculate or de-               does not accept the assumptions or rationale
                                                                 rive the fair market value. Such methods                  for your calculations. If you receive such a
                                                                 may include comparable market prices or                   contact or communication from BIS, you
                                                                 costs of production and distribution. This                may not rely upon the de minimis exclusions
                                                                 rule does not require calculations based upon             for software and technology in § 734.4 of this
                                                                 any one accounting system or U.S. account-                part until BIS has indicated whether or not
                                                                 ing standards. However, you must specify                  you may do so in the future. You must in-
                                                                 the accepted accounting standards you have                clude in your report the name, title, address,
                                                                 chosen, and cost-based methods of valuation               telephone number, and facsimile number of
                                                                 must be based upon records you maintain in                the person BIS may contact concerning your
                                                                 the normal course of business. You should                 report. Please submit your report to:
                                                                 also indicate whether reported values are ac-               (i) E-mail: rpd2@bis.doc.gov;
                                                                 tual arms-length market prices or derived                   (ii) Fax: (202) 482–3355; or
                                                                 from comparable transactions or costs of                    (iii) Mail or Hand Delivery/Courier: Regu-
                                                                 production, overhead, and profit. For exam-               latory Policy Division, U.S. Department of
                                                                 ple, if you chose to make calculations under              Commerce, Bureau of Industry and Security,
                                                                 the transfer pricing rules of the United                  Regulatory Policy Division, 14th and Penn-
                                                                 States Internal Revenue Code at section 482,              sylvania Avenue, NW., Room 2705, Wash-
                                                                 your report should indicate that this is the              ington, DC 20230.
                                                                 source for your methodology, and you should
                                                                 also indicate which of the several meth-                  [61 FR 12746, Mar. 25, 1996, as amended at 62
                                                                 odologies in these transfer pricing rules you             FR 25456, May 9, 1997; 72 FR 3945, Jan. 29,
                                                                 have chosen.                                              2007]
                                                                   (3) Future software sales. For calculations of
                                                                 U.S.-content in foreign software, you shall               PART 736—GENERAL PROHIBITIONS
                                                                 include your historic and estimated future
                                                                 software sales in units and value along with
                                                                                                                           Sec.
                                                                 the rationale and basis for those estimates in
                                                                                                                           736.1 Introduction.
                                                                 the report. Unlike parts incorporated into
                                                                                                                           736.2 General prohibitions and determina-
                                                                 commodities, the cost of U.S. software code
                                                                                                                               tion of applicability.
                                                                 will be attributed or allocated to the future
                                                                 sales of foreign-made software incorporating              SUPPLEMENT NO. 1 TO PART 736—GENERAL OR-
                                                                 the U.S. code, to determine the percentage of                 DERS
                                                                 U.S. controlled content. In making this cal-              SUPPLEMENT NO. 2 TO PART 736—ADMINISTRA-
                                                                 culation for foreign-made software, you must                 TIVE ORDERS
                                                                 make an estimate of future software sales of                AUTHORITY: 50 U.S.C. app. 2401 et seq.; 50
                                                                 that foreign software if it is commingled                 U.S.C. 1701 et seq.; 22 U.S.C. 2151 note; E.O.
                                                                 with or incorporated with the U.S. code. The              12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950;
                                                                 value of the U.S. code commingled with or                 E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p.
                                                                 incorporated into the foreign made software               219; E.O. 13026, 61 FR 58767, 3 CFR, 1996
                                                                 shall be divided by the total selling price of            Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR,
                                                                 all foreign-made software units already sold,             2001 Comp., p. 783; E.O. 13338, 69 FR 26751,
                                                                 plus the total selling price of all foreign-              May 13, 2004; Notice of August 15, 2007, 72 FR
                                                                 made software units estimated for future                  46137 (August 16, 2007); Notice of November 8,
                                                                 sales.                                                    2007, 72 FR 63963 (November 13, 2007).
                                                                   (4) Foreign technology and software. For cal-
                                                                 culations of U.S.-content in foreign tech-
                                                                                                                           § 736.1 Introduction.
                                                                 nology and software, you shall include in the
                                                                 report a description of the foreign tech-                    In this part, references to the EAR
                                                                 nology or software and a description of its               are references to 15 CFR chapter VII,
                                                                 fair market value along with the rationale                subchapter C. A person may undertake
                                                                 and basis for the selection and valuation of              transactions subject to the EAR with-
                                                                 such foreign software or technology. The re-
                                                                                                                           out a license or other authorization,
                                                                 port does not require information regarding
                                                                 destinations and end users for reexport. The              unless the regulations affirmatively
                                                                 purpose of the report is solely to permit the             state such a requirement. As such, if
                                                                 U.S. Government to evaluate the reasonable-               an export, reexport, or activity is sub-
                                                                 ness of U.S.-content calculations.                        ject to the EAR, the general prohibi-
                                                                   (5) Report and wait. If you have not been               tions contained in this part and the Li-
                                                                 contacted by BIS concerning your report                   cense Exceptions specified in part 740
                                                                 within thirty days after filing the report                of the EAR must be reviewed to deter-
                                                                 with BIS, you may rely upon the calcula-
                                                                                                                           mine if a license is necessary. In the
                                                                 tions in your report and the de minimis exclu-
                                                                 sions for software and technology for so long             case of all exports from the United
                                                                 as you are not contacted by BIS. BIS may                  States, you must document your ex-
                                                                 contact you concerning your report to in-                 port as described in part 762 of the EAR
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                                                                 quire of you further or to indicate that BIS              regarding recordkeeping and clear your

                                                                                                                      228



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                                                                 Bureau of Industry and Security, Commerce                                                           § 736.2

                                                                 export through the U.S. Customs Serv-                     General Prohibition Five (Paragraph
                                                                 ice as described in part 758 of the EAR                   (b)(5) of this section) and part 744 for
                                                                 regarding export clearance require-                       references to end-users for whom you
                                                                 ments. Also note that for short supply                    may need an export or reexport li-
                                                                 controls all prohibitions and License                     cense).
                                                                 Exceptions are in part 754 of the EAR.                       (4) End-use. The ultimate end-use (see
                                                                    (a) In this part we tell you:                          General Prohibition Five (paragraph
                                                                    (1) The facts that make your pro-                      (b)(5) of this section) and part 744 of the
                                                                 posed export, reexport, or conduct sub-                   EAR for general end-use restrictions);
                                                                 ject to these general prohibitions, and                   and
                                                                    (2) The ten general prohibitions.
                                                                                                                              (5) Conduct. Conduct such as con-
                                                                    (b) Your obligations under the ten
                                                                 general prohibitions and under the                        tracting, financing, and freight for-
                                                                 EAR depend in large part upon the five                    warding in support of a proliferation
                                                                 types of information described in                         project as described in part 744 of the
                                                                 § 736.2(a) of this part and upon the gen-                 EAR.
                                                                 eral prohibitions described in § 736.2(b)                    (b) General prohibitions. The following
                                                                 of this part. The ten general prohibi-                    ten general prohibitions describe cer-
                                                                 tions contain cross-references to other                   tain exports, reexports, and other con-
                                                                 parts of the EAR that further define                      duct, subject to the scope of the EAR,
                                                                 the breadth of the general prohibitions.                  in which you may not engage unless
                                                                 For that reason, this part is not free-                   you either have a license from the Bu-
                                                                 standing. In part 732, we provide cer-                    reau of Industry and Security (BIS) or
                                                                 tain steps you may follow in proper                       qualify under part 740 of the EAR for a
                                                                 order to help you understand the gen-                     License Exception from each applicable
                                                                 eral prohibitions and their relationship                  general prohibition in this paragraph.
                                                                 to other parts of the EAR.                                The License Exceptions at part 740 of
                                                                    (c) If you violate any of these ten                    the EAR apply only to General Prohi-
                                                                 general prohibitions, or engage in                        bitions One (Exports and Reexports in
                                                                 other conduct contrary to the Export                      the Form Received), Two (Parts and
                                                                 Administration Act, the EAR, or any                       Components Reexports), and Three
                                                                 order, license, License Exception, or
                                                                                                                           (Foreign-Produced Direct Product Re-
                                                                 authorization issued thereunder, as de-
                                                                                                                           exports); however, selected License Ex-
                                                                 scribed in part 764 of the EAR regard-
                                                                                                                           ceptions are specifically referenced and
                                                                 ing enforcement, you will be subject to
                                                                 the sanctions described in that part.                     authorized in part 746 of the EAR con-
                                                                                                                           cerning embargo destinations and in
                                                                 § 736.2 General prohibitions and deter-                   § 744.2(c) of the EAR regarding nuclear
                                                                      mination of applicability.                           end-uses.
                                                                    (a) Information or facts that determine                   (1) General Prohibition One—Export
                                                                 the applicability of the general prohibi-                 and reexport of controlled items to listed
                                                                 tions. The following five types of facts                  countries (Exports and Reexports). You
                                                                 determine your obligations under the                      may not, without a license or License
                                                                 ten general prohibitions and the EAR                      Exception, export any item subject to
                                                                 generally:                                                the EAR to another country or reex-
                                                                    (1) Classification of the item. The clas-              port any item of U.S.-origin if each of
                                                                 sification of the item on the Commerce                    the following is true:
                                                                 Control List (see part 774 of the EAR);                      (i) The item is controlled for a reason
                                                                    (2) Destination. The country of ulti-                  indicated in the applicable Export Con-
                                                                 mate destination for an export or reex-                   trol Classification Number (ECCN), and
                                                                 port (see parts 738 and 774 of the EAR                       (ii) Export to the country of destina-
                                                                 concerning the Country Chart and the                      tion requires a license for the control
                                                                 Commerce Control List);
                                                                                                                           reason as indicated on the Country
                                                                    (3) End-user. The ultimate end user
                                                                                                                           Chart at part 738 of the EAR. (The
                                                                 (see General Prohibition Four (para-
                                                                 graph (b)(4) of this section) and Supple-                 scope of this prohibition is determined
                                                                 ment No. 1 to part 764 of the EAR for                     by the correct classification of your
                                                                 references to persons with whom your                      item and the ultimate destination as
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                                                                 transaction may not be permitted; see                     that combination is reflected on the

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                                                                 § 736.2                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 Country Chart.) 1 Note that each Li-                      hibition 3 applies if an item meets ei-
                                                                 cense Exception described at part 740 of                  ther the Conditions defining the direct
                                                                 the EAR supersedes General Prohibi-                       product of technology or the Condi-
                                                                 tion One if all terms and conditions of                   tions defining the direct product of a
                                                                 a given License Exception are met by                      plant in paragraph (b)(3)(ii)(A) of this
                                                                 the exporter or reexporter.                               section:
                                                                    (2) General Prohibition Two—Reexport                     (A) Conditions defining direct product
                                                                 and export from abroad of foreign-made                    of technology. Foreign-made items are
                                                                 items incorporating more than a de mini-                  subject to this General Prohibition 3 if
                                                                 mis amount of controlled U.S. content                     they meet both of the following condi-
                                                                 (Parts and Components Reexports). (i)                     tions:
                                                                 You may not, without a license or Li-                       (1) They are the direct product of
                                                                 cense Exception, export, reexport or                      technology or software that requires a
                                                                 export from abroad any foreign-made                       written assurance as a supporting doc-
                                                                 commodity, software, or technology in-                    ument for a license, as defined in para-
                                                                 corporating U.S.-origin commodities,                      graph (o)(3)(i) of Supplement No. 2 to
                                                                 software, or technology respectively                      part 748 of the EAR, or as a pre-
                                                                 that is controlled to the country of ul-                  condition for the use of License Excep-
                                                                 timate destination if the foreign-made                    tion TSR at § 740.6 of the EAR, and
                                                                 item meets all three of the following                       (2) They are subject to national secu-
                                                                 conditions:                                               rity controls as designated on the ap-
                                                                    (A) It incorporates more than the de                   plicable ECCN of the Commerce Con-
                                                                 minimis amount of controlled U.S. con-                    trol List at part 774 of the EAR.
                                                                 tent, as defined in § 734.4 of the EAR                      (B) Conditions defining direct product
                                                                 concerning the scope of the EAR;                          of a plant. Foreign-made items are also
                                                                    (B) It is controlled for a reason indi-                subject to this General Prohibition 3 if
                                                                 cated in the applicable ECCN; and                         they are the direct product of a com-
                                                                    (C) Its export to the country of des-                  plete plant or any major component of
                                                                 tination requires a license for that con-                 a plant if both of the following condi-
                                                                 trol reason as indicated on the Country                   tions are met:
                                                                 Chart. (The scope of this prohibition is                    (1) Such plant or component is the di-
                                                                 determined by the correct classifica-                     rect product of technology that re-
                                                                 tion of your foreign-made item and the                    quires a written assurance as a sup-
                                                                 ultimate destination, as that combina-                    porting document for a license or as a
                                                                 tion is reflected on the Country Chart.)                  precondition for the use of License Ex-
                                                                    (ii) Each License Exception described                  ception TSR in § 740.6 of the EAR, and
                                                                 in part 740 of the EAR supersedes Gen-                      (2) Such foreign-made direct products
                                                                 eral Prohibition Two if all terms and                     of the plant or component are subject
                                                                 conditions of a given License Excep-                      to national security controls as des-
                                                                 tion are met by the exporter or re-                       ignated on the applicable ECCN of the
                                                                 exporter.                                                 Commerce Control List at part 774 of
                                                                    (3) General Prohibition Three—Reexport                 the EAR.
                                                                 and export from abroad of the foreign-                      (iii) License Exceptions. Each License
                                                                 produced direct product of U.S. tech-                     Exception described at part 740 of the
                                                                 nology and software (Foreign-Produced                     EAR supersedes this General Prohibi-
                                                                 Direct Product Reexports). (i) Country                    tion Three if all terms and conditions
                                                                 scope of prohibition. You may not, with-                  of a given exception are met by the ex-
                                                                 out a license or License Exception, re-                   porter or reexporter.
                                                                 export or export from abroad items                          (4) General Prohibition Four (Denial
                                                                 subject to the scope of this General                      Orders)—Engaging in actions prohibited
                                                                 Prohibition Three to Cuba or a destina-                   by a denial order. (i) You may not take
                                                                 tion in Country Group D:1 (See Supple-                    any action that is prohibited by a de-
                                                                 ment No. 1 to part 740 of the EAR).                       nial order issued under part 766 of the
                                                                    (ii) Product scope of foreign-made items               EAR, Administrative Enforcement Pro-
                                                                 subject to prohibition. This General Pro-                 ceedings. These orders prohibit many
                                                                                                                           actions in addition to direct exports by
                                                                   1 See part 738 of the EAR for selected con-             the person denied export privileges, in-
                                                                 trols that are not specified on the Country               cluding some transfers within a single
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                                                                 Chart.                                                    country, either in the United States or

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                                                                 Bureau of Industry and Security, Commerce                                                           § 736.2

                                                                 abroad, by other persons. You are re-                     know will assist in certain prolifera-
                                                                 sponsible for ensuring that any of your                   tion activities described further in part
                                                                 transactions in which a person who is                     744 of the EAR. There are no License
                                                                 denied export privileges is involved do                   Exceptions to this General Prohibition
                                                                 not violate the terms of the order. Or-                   Seven in part 740 of the EAR unless
                                                                 ders denying export privileges are pub-                   specifically authorized in that part.
                                                                 lished in the FEDERAL REGISTER when                          (B) If you are a U.S. person as that
                                                                 they are issued and are the legally con-                  term is defined in § 744.6(c) of the EAR,
                                                                 trolling documents in accordance with                     you may not export a Schedule 1 chem-
                                                                 their terms. BIS also maintains com-                      ical listed in Supplement No. 1 to Part
                                                                 pilations of persons denied export                        745 without first complying with the
                                                                 privileges on its Web site at http://                     provisions of §§ 742.18 and 745.1 of the
                                                                 www.bis.doc.gov. BIS may, on an excep-                    EAR.
                                                                 tional basis, authorize activity other-                      (C) If you are a U.S. person as that
                                                                 wise prohibited by a denial order. See                    term is defined in § 744.6(c) of the EAR,
                                                                 § 764.3(a)(2) of the EAR.                                 you may not export a Schedule 3 chem-
                                                                    (ii) There are no License Exceptions                   ical listed in Supplement No. 1 to Part
                                                                 described in part 740 of the EAR that                     745 to a destination not listed in Sup-
                                                                 authorize conduct prohibited by this                      plement No. 2 to Part 745 without com-
                                                                 General Prohibition Four.                                 plying with the End-Use Certificate re-
                                                                    (5) General Prohibition Five—Export or                 quirements in § 745.2 of the EAR that
                                                                 reexport to prohibited end-uses or end-                   apply to Schedule 3 chemicals con-
                                                                 users (End-Use End-User). You may not,                    trolled for CW reasons in ECCN 1C350,
                                                                 without a license, knowingly export or                    ECCN 1C355, or ECCN 1C395.
                                                                 reexport any item subject to the EAR
                                                                                                                              (8) General Prohibition Eight—In tran-
                                                                 to an end-user or end-use that is pro-
                                                                                                                           sit shipments and items to be unladen
                                                                 hibited by part 744 of the EAR.
                                                                                                                           from vessels or aircraft (Intransit). (i) Un-
                                                                    (6) General Prohibition Six—Export or
                                                                                                                           lading and shipping in transit. You may
                                                                 reexport to embargoed destinations (Em-
                                                                                                                           not export or reexport an item through
                                                                 bargo). (i) You may not, without a li-
                                                                                                                           or transit through a country listed in
                                                                 cense or License Exception authorized
                                                                 under part 746, export or reexport any                    paragraph (b)(8)(ii) of this section un-
                                                                 item subject to the EAR to a country                      less a License Exception or license au-
                                                                 that is embargoed by the United States                    thorizes such an export or reexport di-
                                                                 or otherwise made subject to controls                     rectly to such a country of transit, or
                                                                 as both are described at part 746 of the                  unless such an export or reexport is eli-
                                                                 EAR.                                                      gible to such a country of transit with-
                                                                    (ii) License Exceptions to General                     out a license.
                                                                 Prohibition Six are described in part                        (ii) Country scope. This General Pro-
                                                                 746 of the EAR, on Embargoes and                          hibition Eight applies to Albania, Ar-
                                                                 Other Special Controls. Unless a Li-                      menia, Azerbaijan, Belarus, Cambodia,
                                                                 cense Exception or other authorization                    Cuba,         Georgia,         Kazakhstan,
                                                                 is authorized in part 746 of the EAR,                     Kyrgyzstan, Laos, Mongolia, North
                                                                 the License Exceptions described in                       Korea,         Russia,          Tajikistan,
                                                                 part 740 of the EAR are not available to                  Turkmenistan, Ukraine, Uzbekistan,
                                                                 overcome this general prohibition.                        Vietnam.
                                                                    (7) General Prohibition Seven—Support                     (9) General Prohibition Nine—Violation
                                                                 of proliferation activities (U.S. person                  of any order, terms, and conditions (Or-
                                                                 proliferation activity)—(i) Support of pro-               ders, Terms, and Conditions). You may
                                                                 liferation activities (U.S. person prolifera-             not violate terms or conditions of a li-
                                                                 tion activity). (A) If you are a U.S. per-                cense or of a License Exception issued
                                                                 son as that term is defined in § 744.6(c)                 under or made a part of the EAR, and
                                                                 of the EAR, you may not engage in any                     you may not violate any order issued
                                                                 activities prohibited by § 744.6(a) or (b)                under or made a part of the EAR.
                                                                 of the EAR, which prohibits the per-                      There are no License Exceptions to
                                                                 formance, without a license from BIS,                     this General Prohibition Nine in part
                                                                 of certain financing, contracting, serv-                  740 of the EAR. Supplements Nos. 1 and
                                                                 ice, support, transportation, freight                     2 to this part provide for certain Gen-
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                                                                 forwarding, or employment that you                        eral Orders and Administrative Orders.

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                                                                 Pt. 736, Supp. 1                                                      15 CFR Ch. VII (1–1–08 Edition)

                                                                   (10) General Prohibition Ten—Pro-                          (c) Extensions. If necessary, you may re-
                                                                 ceeding with transactions with knowledge                  quest extensions of such authorizations ac-
                                                                 that a violation has occurred or is about                 cording to procedures set forth in § 750.7(g) of
                                                                 to occur (Knowledge Violation to Occur).                  the EAR.
                                                                                                                              (d) Specific Notice from BIS. If you have re-
                                                                 You may not sell, transfer, export, re-
                                                                                                                           ceived, or should you receive, specific notice
                                                                 export, finance, order, buy, remove,                      from BIS with regard to a reexport author-
                                                                 conceal, store, use, loan, dispose of,                    ization covered by this General Order, in-
                                                                 transfer, transport, forward, or other-                   forming you of a revocation, suspension, or
                                                                 wise service, in whole or in part, any                    revision (including validity period) of any
                                                                 item subject to the EAR and exported                      such reexport authorization, then the terms
                                                                 or to be exported with knowledge that                     of that specific notice will be controlling.
                                                                 a violation of the Export Administra-                        (e) Definition of ‘‘authorization’’. The term
                                                                 tion Regulations, the Export Adminis-                     ‘‘authorization’’ as used in this General
                                                                 tration Act or any order, license, Li-                    Order encompasses the range of reexport au-
                                                                                                                           thorizations granted by BIS, which includes
                                                                 cense Exception, or other authoriza-
                                                                                                                           licenses, individual letters, and other types
                                                                 tion issued thereunder has occurred, is                   of notifications.
                                                                 about to occur, or is intended to occur                      General Order No. 2 of May 14, 2004; sec-
                                                                 in connection with the item. Nor may                      tions 5(a)(1) and 5(a)(2)(A) of the Syria Ac-
                                                                 you rely upon any license or License                      countability and Lebanese Sovereignty Act
                                                                 Exception after notice to you of the                      of 2003 (Public Law 108–175, codified as a note
                                                                 suspension or revocation of that li-                      to 22 U.S.C. 2151) (the SAA), require (1) a pro-
                                                                 cense or exception. There are no Li-                      hibition on the export to Syria of all items
                                                                 cense Exceptions to this General Prohi-                   on the Commerce Control List (in 15 CFR
                                                                 bition Ten in part 740 of the EAR.                        part 774)(CCL) and (2) a prohibition on the
                                                                                                                           export to Syria of products of the United
                                                                 [61 FR 12754, Mar. 25, 1996, as amended at 61             States, other than food and medicine. The
                                                                 FR 64274, Dec. 4, 1996; 61 FR 68579, Dec. 30,             President has also exercised national secu-
                                                                 1996; 62 FR 25456, May 9, 1997; 64 FR 27141,              rity waiver authority pursuant to Section
                                                                 May 18, 1999; 64 FR 47105, Aug. 30, 1999; 65 FR           5(b) of the SAA for certain transactions. This
                                                                 14859, Mar. 20, 2000; 65 FR 38150, June 19, 2000;         Order is issued consistent with Executive
                                                                 66 FR 49523, Sept. 28, 2001; 67 FR 37981, May             Order 13338 of May 11, 2004, which imple-
                                                                 31, 2002; 67 FR 54953, Aug. 27, 2002; 69 FR 5690,         ments the SAA.
                                                                 Feb. 6, 2004; 69 FR 23628, Apr. 29, 2004; 70 FR              (a) License requirements. Effective May 14,
                                                                 8719, Feb. 23, 2005; 70 FR 67348, Nov. 7, 2005]           2004, a license is required for export or reex-
                                                                                                                           port to Syria of all items subject to the
                                                                      SUPPLEMENT NO. 1 TO PART 736—                        EAR, except food and medicine classified as
                                                                            GENERAL ORDERS                                 EAR99 (medicine is defined in part 772 of the
                                                                                                                           EAR). A license is required for the ‘‘deemed
                                                                   General Order No. 1 of September 16, 1998;
                                                                                                                           export’’ and ‘‘deemed reexport,’’ as described
                                                                 Establishing a 24-month validity period on
                                                                                                                           in § 734.2(b) of the EAR, of any technology or
                                                                 reexport authorizations issued without a va-
                                                                                                                           source code on the Commerce Control List
                                                                 lidity period and revoking those exceeding
                                                                                                                           (CCL) to a Syrian foreign national. ‘‘Deemed
                                                                 that period.
                                                                                                                           exports’’ and ‘‘deemed reexports’’ involving
                                                                   (a) Reexport authorizations issued within 24-
                                                                                                                           technology or source code subject to the
                                                                 months of the General Order. All reexport au-
                                                                                                                           EAR but not listed on the CCL do not require
                                                                 thorizations issued with no validity period
                                                                 within the 24-months preceding September                  a license to Syrian foreign nationals.
                                                                 16, 1998 shall be deemed to have an expiration               (b) Revocation of Authority to Export under
                                                                 date which shall be the date 24-months from               Existing Licenses. Effective May 14, 2004, the
                                                                 the date of issuance of the reexport author-              authority to export or reexport to Syria
                                                                 ization or November 16, 1998, whichever is                under existing licenses is hereby revoked
                                                                 longer.                                                   (see savings clause in paragraph (e) of this
                                                                   (b) Reexport authorizations issued before the           General Order). License conditions requiring
                                                                 24-month period preceding the General Order.              written U.S. Government authorization for
                                                                 For reexport authorizations issued with no                the reexport, transfer, or resale of items al-
                                                                 validity period before the 24-month period                ready exported or reexported remain in ef-
                                                                 preceding September 16, 1998:                             fect, and requests for BIS authorization to
                                                                   (1) Effective September 16, 1998, all such              reexport, transfer, or sell such items will re-
                                                                 outstanding reexport authorizations for ter-              quire interagency approval.
                                                                 rorist-supporting countries (see parts 742 and               (c) License Exceptions. Effective May 14,
                                                                 746 of the EAR) are revoked.                              2004, no License Exceptions to the license re-
                                                                   (2) Effective November 16, 1998, all other              quirements set forth in paragraph (a) of this
                                                                 such outstanding reexport authorizations are              General Order are available for exports or re-
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                                                                 revoked.                                                  exports to Syria, except the following:

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                                                                 Bureau of Industry and Security, Commerce                                                  Pt. 736, Supp. 1
                                                                   (1) TMP for items for use by the news                     (e) Savings Clause. Items that are on dock
                                                                 media as set forth in § 740.9(a)(2)(viii) of the          for loading, on lighter, laden aboard an ex-
                                                                 EAR,                                                      porting carrier or en route aboard a carrier
                                                                   (2) GOV for items for personal or official              to a port of export on May 14, 2004, shall be
                                                                 use by personnel and agencies of the U.S.                 subject to the licensing rules applicable to
                                                                 Government as set forth in § 740.11(b)(2)(i)              such items as of May 13, 2004. Any such items
                                                                 and (ii) of the EAR,                                      not actually exported or reexported before
                                                                   (3) TSU for operation technology and soft-              midnight May 28, 2004, may be exported or
                                                                 ware, sales technology and software updates               reexported only if authorized pursuant to
                                                                 pursuant to the terms of § 740.13(a), (b), or (c)         this General Order.
                                                                 of the EAR,                                                 General Order No. 3 of June 5, 2006, as
                                                                   (4) BAG for exports of items by individuals             amended on September 6, 2006 and June 8,
                                                                 leaving the United States as personal bag-                2007; Imposition of license requirement for
                                                                 gage pursuant to the terms of § 740.14 (a)                exports and reexports of items subject to the
                                                                 through (d) only of the EAR, and                          EAR to persons, including persons affiliated
                                                                                                                           with or related to such persons, as des-
                                                                   (5) AVS for the temporary sojourn of civil
                                                                                                                           ignated in paragraph (a) of this general
                                                                 aircraft reexported to Syria pursuant to the
                                                                                                                           order.
                                                                 terms of § 740.15(a)(4) of the EAR.
                                                                                                                             (a) License requirements. A license is re-
                                                                   (d) Licensing policy. All license applications          quired to export or reexport any item subject
                                                                 for export or reexport to Syria are subject to            to the EAR to the persons listed in para-
                                                                 a general policy of denial. License applica-              graph (a) of this general order. This license
                                                                 tions for ‘‘deemed exports’’ and ‘‘deemed re-             requirement also applies to specifically list-
                                                                 exports’’ of technology and source code will              ed affiliated and related persons. This license
                                                                 be reviewed on a case-by-case basis. BIS may              requirement is effective for each listed per-
                                                                 consider, on a case-by-case basis, license ap-            son on the date that person was added to the
                                                                 plications for exports and reexports of items             general order, as specified in paragraph (a).
                                                                 necessary to carry out the President’s con-                 (1) A license is required to export or reex-
                                                                 stitutional authority to conduct U.S. foreign             port any item subject to the EAR to these
                                                                 affairs and as Commander-in-Chief, including              persons as follows: A.H. Shamnad (added on
                                                                 those exports and reexports of items nec-                 September 6, 2006); Akbar Ashraf Vaghefi
                                                                 essary for the performance of official func-              (added on September 6, 2006); Al-Faris (added
                                                                 tions by the United States Government per-                on June 8, 2007); Ali Akbar Yahya (added on
                                                                 sonnel abroad. BIS may also consider the fol-             June 8, 2007); Amir Mohammad Zahedi (added
                                                                 lowing license applications on a case-by-case             on June 8, 2007); Atlinx Electronics (added on
                                                                 basis: items in support of activities, diplo-             June 5, 2006); EKT Electronics (added on
                                                                 matic or otherwise, of the United States                  June 8, 2007); Encyclopedia Electronics Cen-
                                                                 Government (to the extent that regulation of              ter (added on June 8, 2007); Farrokh Nia
                                                                 such exportation or reexportation would not               Yaghmaei, a.k.a., Farrokh Nia Yaghmayi
                                                                 fall within the President’s constitutional au-            (added on June 5, 2006); Frank Lam (added on
                                                                 thority to conduct the nation’s foreign af-               June 8, 2007); GBNTT (added on June 8, 2007);
                                                                 fairs); medicine (on the CCL) and medical de-             H. Ghasir (added on June 5, 2006); Hamed
                                                                 vices (both as defined in part 772 of the                 Athari (added on September 6, 2006); IKCO
                                                                 EAR); parts and components intended to en-                Trading GmbH (added on September 6, 2006);
                                                                 sure the safety of civil aviation and the safe            Majid Seif (added on June 8, 2007); Majidco
                                                                 operation of commercial passenger aircraft;               Micro Electronics (added on June 5, 2006);
                                                                 aircraft chartered by the Syrian Government               Mayrow General Trading (added on June 5,
                                                                 for the transport of Syrian Government offi-              2006); Mayrow Technics Co. (added on Sep-
                                                                 cials on official Syrian Government busi-                 tember 6, 2006); Micatic General Trading
                                                                 ness; telecommunications equipment and as-                (added on June 5, 2006); Micro Middle East
                                                                 sociated computers, software and tech-                    Electronics (added on June 5, 2006); Moham-
                                                                 nology; and items in support of United Na-                med Katranji (added on June 8, 2007);
                                                                 tions operations in Syria. The total dollar               Mostafa Salehi (added on September 6, 2006);
                                                                 value of each approved license for aircraft               Narinco (added on June 5, 2006); Neda Indus-
                                                                 parts for flight safety normally will be lim-             trial Group (added on June 8, 2007); Neda
                                                                 ited to no more than $2 million over the 24-              Overseas Electronics L.L.C. (added on Sep-
                                                                 month standard license term, except in the                tember 6, 2006); Nedayeh Micron Electronics
                                                                 case of complete overhauls. In addition, con-             (added on June 8, 2007); Pyramid Tech-
                                                                 sistent with part 734 of the EAR, the fol-                nologies (added on September 6, 2006); S.
                                                                 lowing are not subject to this General Order:             Basheer (added on September 6, 2006); Sayed-
                                                                 informational materials in the form of books              Ali Hosseini (added on June 8, 2007); Speedy
                                                                 and other media; publicly available software              Electronics Ltd. (added on June 8, 2007);
                                                                 and technology; and technology exported in                United Sources Industrial Enterprises (added
                                                                 the form of a patent application or an                    on June 8, 2007); Vast Solution Sdn Bhd.
                                                                 amendment, modification, or supplement                    (added on June 8, 2007); and Y-Sing Compo-
                                                                 thereto or a division thereof (see 15 CFR                 nents Limited (added on June 8, 2007). This
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                                                                 734.3(b)(1)(v), (b)(2) and (b)(3)).                       license requirement applies with respect to

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                                                                 Pt. 736, Supp. 2                                                      15 CFR Ch. VII (1–1–08 Edition)
                                                                 any transaction in which any of the above-                be excluded from (denied) export privileges
                                                                 named persons will act as purchaser, inter-               on his own behalf, or may be excluded from
                                                                 mediate consignee, ultimate consignee, or                 practice before BIS on behalf of another, in
                                                                 end-user of the items.                                    connection with any export control matter,
                                                                   (2) All persons described in paragraph (a)              or both, as provided in part 764 of the EAR.
                                                                 are located in Dubai, United Arab Emirates,                 (2) Grounds for exclusion. Among the
                                                                 except for Akbar Ashraf Vaghefi (located in               grounds for exclusion are the following:
                                                                 Germany and Dubai, United Arab Emirates);                   (i) Inducing or attempting to induce by
                                                                 EKT Electronics (located in Syria and Leb-                gifts, promises, bribes, or otherwise, any offi-
                                                                 anon); Encyclopedia Electronics Center (lo-               cer or employee of BIS or any customs or
                                                                 cated in Syria); Frank Lam (located in Hong               post office official, to take any action with
                                                                 Kong); GBNTT (located in Iran); IKCO Trad-                respect to the issuance of licenses or any
                                                                 ing GmbH (located in Germany); Majid Seif                 other aspects of the administration of the
                                                                 (located in Malaysia); Mohammed Katranji                  Export Administration Act, whether or not
                                                                 (located in Syria and Lebanon); Neda Indus-               in violation of any regulation;
                                                                 trial Group (located in Iran); Nedayeh Mi-                  (ii) Offering or making gifts or promises
                                                                 cron Electronics (located in Iran); Speedy                thereof to any such officer or employee for
                                                                 Electronics Ltd. (located in Hong Kong);                  any other reason;
                                                                 United Sources Industrial Enterprises (lo-                  (iii) Soliciting by advertisement or other-
                                                                 cated in Hong Kong); Vast Solution Sdn Bhd.               wise the handling of business before BIS on
                                                                 (located in Malaysia); and Y-Sing Compo-                  the representation, express or implied, that
                                                                 nents Limited (located in Hong Kong).                     such person, through personal acquaintance
                                                                   (b) License Exceptions. No License Excep-               or otherwise, possesses special influence over
                                                                 tions are available for exports or reexports              any officer or employee of BIS;
                                                                 involving the persons described in paragraph                (iv) Charging, or proposing to charge, for
                                                                 (a) of this General Order.                                any service performed in connection with the
                                                                   (c) Licensing Policy. License applications              issuance of any license, any fee wholly con-
                                                                 involving the persons described in paragraph              tingent upon the granting of such license
                                                                 (a) of the General Order will be subject to a             and the amount or value thereof. This provi-
                                                                 general policy of denial.                                 sion will not be construed to prohibit the
                                                                 [63 FR 49426, Sept. 16, 1998, as amended at 65            charge of any fee agreed to by the parties;
                                                                 FR 76562, Dec. 7, 2000; 69 FR 26768, May 14,              provided that the out-of-pocket expenditures
                                                                 2004; 69 FR 42333, July 15, 2004; 69 FR 76843,            and the reasonable value of the services per-
                                                                 Dec. 23, 2004; 71 FR 32273, June 5, 2006; 71 FR           formed, whether or not the license is issued
                                                                 52427, Sept. 6, 2006; 71 FR 53965, Sept. 13, 2006;        and regardless of the amount thereof, are
                                                                 72 FR 31718, June 8, 2007]                                fairly compensated; and
                                                                                                                             (v) Knowingly violating or participating in
                                                                      SUPPLEMENT NO. 2 TO PART 736—                        the violation of, or an attempt to violate,
                                                                         ADMINISTRATIVE ORDERS                             any regulation with respect to the export of
                                                                                                                           commodities or technical data, including the
                                                                    Administrative Order One: Disclosure of Li-            making of or inducing another to make any
                                                                 cense Issuance and Other Information. Con-                false representations to facilitate any export
                                                                 sistent with section 12(c) of the Export Ad-              in violation of the Export Administration
                                                                 ministration Act of 1979, as amended, infor-              Act or any order or regulation issued there-
                                                                 mation obtained by the U.S. Department of                 under.
                                                                 Commerce for the purpose of consideration                   (3) Definition. As used in this Administra-
                                                                 of or concerning license applications, as well            tion Order, the terms ‘‘practice before BIS’’
                                                                 as related information, will not be publicly              and ‘‘appear before BIS’’ include:
                                                                 disclosed without the approval of the Sec-                  (i) The submission on behalf of another of
                                                                 retary of Commerce. Shipper’s Export Dec-                 applications for export licenses or other doc-
                                                                 larations also are exempt from public disclo-             uments required to be filed with BIS, or the
                                                                 sure, except with the approval of the Sec-                execution of the same;
                                                                 retary of Commerce, in accordance with                      (ii) Conferences or other communications
                                                                 § 301(g) of Title 13, United States Code.                 on behalf of another with officers or employ-
                                                                    Administrative Order Two: Conduct of Busi-             ees of BIS for the purpose of soliciting or ex-
                                                                 ness and Practice in Connection with Export               pediting approval by BIS of applications for
                                                                 Control Matters.                                          export licenses or other documents, or with
                                                                    (a) Exclusion of persons guilty of unethical           respect to quotas, allocations, requirements
                                                                 conduct or not possessing required integrity              or other export control actions, pertaining
                                                                 and ethical standards.                                    to matters within the jurisdiction of BIS;
                                                                    (1) Who may be excluded. Any person,                     (iii) Participating on behalf of another in
                                                                 whether acting on his own behalf or on be-                any proceeding pending before BIS; and
                                                                 half of another, who shall be found guilty of               (iv) Submission to a customs official on be-
                                                                 engaging in any unethical activity or who                 half of another of a license or Shipper’s Ex-
                                                                 shall be demonstrated not to possess the re-              port Declaration or other export control doc-
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                                                                 quired integrity and ethical standards, may               ument.

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                                                                 Bureau of Industry and Security, Commerce                                                           § 738.2
                                                                   (4) Proceedings. All proceedings under this               (2) The CCL is contained in Supple-
                                                                 Administrative Order shall be conducted in                ment No. 1 to part 774 of the EAR. Sup-
                                                                 the same manner as provided in part 766 of                plement No. 2 to part 774 of the EAR
                                                                 the EAR.
                                                                   (b) Employees and former employees. Persons
                                                                                                                           contains the General Technology and
                                                                 who are or at any time have been employed                 Software Notes relevant to entries con-
                                                                 on a full-time or part-time, compensated or               tained in the CCL.
                                                                 uncompensated, basis by the U.S. Govern-                    (b) Commerce Country Chart scope. BIS
                                                                 ment are subject to the provisions of 18                  also maintains the Commerce Country
                                                                 U.S.C. 203, 205, and 207 (Pub. L. 87–849, 87th            Chart. The Commerce Country Chart,
                                                                 Congress) in connection with representing a               located in Supplement No. 1 to part
                                                                 private party or interest before the U.S. De-
                                                                 partment of Commerce in connection with
                                                                                                                           738, contains licensing requirements
                                                                 any export control matter.                                based on destination and Reason for
                                                                                                                           Control. In combination with the CCL,
                                                                 [61 FR 12754, Mar. 25. 1996, as amended at 70
                                                                                                                           the Commerce Country Chart allows
                                                                 FR 54628, Sept. 16, 2005; 70 FR 62238, Oct. 31,
                                                                 2005]                                                     you to determine whether a license is
                                                                                                                           required for items on the CCL to any
                                                                                                                           country in the world.
                                                                 PART 738—COMMERCE CONTROL
                                                                   LIST OVERVIEW AND THE COUN-                             § 738.2 Commerce Control List (CCL)
                                                                   TRY CHART                                                   structure.
                                                                                                                             (a) Categories. The CCL is divided into
                                                                 Sec.                                                      10 categories, numbered as follows:
                                                                 738.1 Introduction.
                                                                 738.2 Commerce Control List (CCL) struc-                  0—Nuclear Materials, Facilities and Equip-
                                                                     ture.                                                   ment and Miscellaneous
                                                                 738.3 Commerce Country Chart structure.                   1—Materials, Chemicals, ‘‘Microorganisms,’’
                                                                 738.4 Determining whether a license is re-                  and Toxins
                                                                     quired.                                               2—Materials Processing
                                                                 SUPPLEMENT NO. 1 TO PART 738—COMMERCE                     3—Electronics
                                                                     COUNTRY CHART                                         4—Computers
                                                                                                                           5—Telecommunications and Information Se-
                                                                   AUTHORITY: 50 U.S.C. app. 2401 et seq.; 50
                                                                                                                             curity
                                                                 U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C.
                                                                                                                           6—Lasers and Sensors
                                                                 7430(e); 22 U.S.C. 287c; 22 U.S.C. 3201 et seq.; 22
                                                                                                                           7—Navigation and Avionics
                                                                 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C.
                                                                                                                           8—Marine
                                                                 2139a; 42 U.S.C. 6212; 43 U.S.C. 1354; 46 U.S.C.
                                                                 app. 466c; 50 U.S.C. app. 5; 22 U.S.C. 7201 et            9—Propulsion Systems, Space Vehicles and
                                                                 seq.; 22 U.S.C. 7210; E.O. 13026, 61 FR 58767, 3            Related Equipment
                                                                 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR                  (b) Groups. Within each category,
                                                                 44025, 3 CFR, 2001 Comp., p. 783; Notice of Au-           items are arranged by group. Each cat-
                                                                 gust 15, 2007, 72 FR 46137 (August 16, 2007).
                                                                                                                           egory contains the same five groups.
                                                                 § 738.1 Introduction.                                     Each Group is identified by the letters
                                                                                                                           A through E, as follows:
                                                                    (a) Commerce Control List scope. (1) In
                                                                 this part, references to the EAR are                      A—Equipment, Assemblies and Components
                                                                 references to 15 CFR chapter VII, sub-                    B—Test, Inspection and Production Equip-
                                                                 chapter C. The Bureau of Industry and                      ment
                                                                                                                           C—Materials
                                                                 Security (BIS) maintains the Com-
                                                                                                                           D—Software
                                                                 merce Control List (CCL) within the                       E—Technology
                                                                 Export Administration Regulations
                                                                 (EAR), which includes items (i.e., com-                     (c) Order of review. In order to clas-
                                                                 modities, software, and technology)                       sify your item against the CCL, you
                                                                 subject to the export licensing author-                   should begin with a review of the gen-
                                                                 ity of BIS. The CCL does not include                      eral characteristics of your item. This
                                                                 those items exclusively controlled for                    will usually guide you to the appro-
                                                                 export or reexport by another depart-                     priate category on the CCL. Once the
                                                                 ment or agency of the U.S. Govern-                        appropriate category is identified, you
                                                                 ment. In instances where agencies                         should match the particular character-
                                                                 other than the Department of Com-                         istics and functions of your item to a
                                                                 merce administer controls over related                    specific ECCN. If the ECCN contains a
                                                                 items, entries in the CCL contain a ref-                  list under the Items heading, you
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                                                                 erence to these controls.                                 should review the list to determine

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                                                                 § 738.2                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 within which subparagraph(s) your                         entry containing ‘‘License Require-
                                                                 items are identified.                                     ments,’’ ‘‘License Exceptions,’’ and
                                                                   (d) Entries—(1) Composition of an                       ‘‘List of Items Controlled’’ sections. A
                                                                 entry. Within each group, individual                      brief description of each section and its
                                                                 items are identified by an Export Con-                    use follows:
                                                                 trol Classification Number (ECCN).                          (i) License Requirements. This section
                                                                 Each number consists of a set of digits                   contains a separate line identifying all
                                                                 and a letter. The first digit identifies                  possible Reasons for Control in order of
                                                                 the general category within which the                     precedence, and two columns entitled
                                                                 entry falls (e.g., 3A001). The letter im-                 ‘‘Control(s)’’ and ‘‘Country Chart’’.
                                                                 mediately following this first digit                        (A) The ‘‘Controls’’ header identifies
                                                                 identifies under which of the five                        all applicable Reasons for Control, in
                                                                 groups the item is listed (e.g., 3 A001).                 order of restrictiveness, and to what
                                                                 The second digit differentiates indi-                     extent each applies (e.g., to the entire
                                                                 vidual entries by identifying the type                    entry or only to certain subpara-
                                                                 of controls associated with the items                     graphs). Those requiring licenses for a
                                                                 contained in the entry (e.g., 3A001).                     larger number of countries and/or
                                                                 Listed below are the Reasons for Con-                     items are listed first. As you read down
                                                                 trol associated with this second digit.                   the list the number of countries and/or
                                                                                                                           items requiring a license declines.
                                                                 0: National Security reasons (including Dual
                                                                                                                           Since Reasons for Control are not mu-
                                                                    Use and Wassenaar Arrangement Muni-
                                                                    tions List) and Items on the NSG Dual Use              tually exclusive, items controlled with-
                                                                    Annex and Trigger List                                 in a particular ECCN may be controlled
                                                                 1: Missile Technology reasons                             for more than one reason. The fol-
                                                                 2: Nuclear Nonproliferation reasons                       lowing is a list of all possible Reasons
                                                                 3: Chemical & Biological Weapons reasons                  for Control:
                                                                 9: Anti-terrorism, Crime Control, Regional
                                                                    Stability, Short Supply, UN Sanctions,                 AT Anti-Terrorism
                                                                    etc.                                                   CB Chemical & Biological Weapons
                                                                                                                           CC Crime Control
                                                                   (i) Since Reasons for Control are not                   CW Chemical Weapons Convention
                                                                 mutually exclusive, numbers are as-                       EI Encryption Items
                                                                 signed in order of precedence. As an ex-                  FC Firearms Convention
                                                                                                                           MT Missile Technology
                                                                 ample, if an item is controlled for both                  NS National Security
                                                                 National Security and Missile Tech-                       NP Nuclear Nonproliferation
                                                                 nology reasons, the entry’s third digit                   RS Regional Stability
                                                                 will be a ‘‘0’’. If the item is controlled                SS Short Supply
                                                                 only for Missile Technology the third                     UN United Nations Embargo
                                                                 digit will be ‘‘1’’.                                      SI Significant Items
                                                                   (ii) The numbers in either the second                   SL Surreptitious Listening
                                                                 or third digit (e.g., 3A001) serve to dif-                  (B) The ‘‘Country Chart’’ header
                                                                 ferentiate between multilateral and                       identifies, for each applicable Reason
                                                                 unilateral entries. An entry with the                     for Control, a column name and num-
                                                                 number ‘‘9’’ as the second digit, identi-                 ber (e.g., CB Column 1). These column
                                                                 fies the entire entry as controlled for a                 identifiers are used to direct you from
                                                                 unilateral concern (e.g., 2B991 for anti-                 the CCL to the appropriate column
                                                                 terrorism reasons). If the number ‘‘9’’                   identifying the countries requiring a li-
                                                                 appears as the third digit, the item is                   cense. Consult part 742 of the EAR for
                                                                 controlled for unilateral purposes                        an indepth discussion of the licensing
                                                                 based on a proliferation concern (e.g.,                   requirements and policies applicable to
                                                                 2A292 is controlled for unilateral pur-                   each Country Chart column.
                                                                 poses based on nuclear nonproliferation                     (ii) License Exceptions. This section
                                                                 concerns).                                                provides a brief eligibility statement
                                                                   (iii) The last digit within each entry                  for each ECCN-driven License Excep-
                                                                 (e.g., 3A001) is used for the sequential                  tion that may be applicable to your
                                                                 numbering of ECCNs to differentiate                       transaction, and should be consulted
                                                                 between entries on the CCL.                               only AFTER you have determined a li-
                                                                   (2) Reading an ECCN. A brief descrip-                   cense is required based on an analysis
                                                                 tion is provided next to each ECCN.                       of the entry and the Country Chart.
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                                                                 Following this description is the actual                  The brief eligibility statement in this

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                                                                 Bureau of Industry and Security, Commerce                                                           § 738.3

                                                                 section is provided to assist you in de-                  tained by the European Union. This in-
                                                                 ciding which ECCN-driven License Ex-                      formation is provided to assist readers
                                                                 ception related to your particular item                   who use both lists.
                                                                 and destination you should explore                          (D) Items. This header contains a
                                                                 prior to submitting an application. The                   positive list of all items controlled by
                                                                 term ‘‘Yes’’ (followed in some instances                  a particular entry and must be re-
                                                                 by the scope of Yes) appears next to                      viewed to determine whether your item
                                                                 each available ECCN-driven License                        is controlled by that entry. In some en-
                                                                 Exception. The term ‘‘N/A’’ will be                       tries, the list is contained within the
                                                                 noted for License Exceptions that are                     entry heading. In these entries a note
                                                                 not available within a particular entry.                  is included to direct you to the entry
                                                                 If one or more License Exceptions ap-                     heading.
                                                                 pear to apply to your transaction, you
                                                                 must consult part 740 of the EAR to re-                   [61 FR 112756, Mar. 25, 1996, as amended at 61
                                                                 view the conditions and restrictions                      FR 68579, Dec. 30, 1996; 62 FR 25456, May 9,
                                                                 applicable to each available License                      1997; 64 FR 17970, Apr. 13, 1999; 27141, May 18,
                                                                 Exception. The list of License Excep-                     1999; 70 FR 54628, Sept. 16, 2005; 71 FR 20883,
                                                                 tions contained within each ECCN is                       Apr. 24, 2006; 71 FR 67035, Nov. 20, 2006; 72 FR
                                                                                                                           43531, Aug. 6, 2007]
                                                                 not an all-exclusive list. Other License
                                                                 Exceptions, not based on particular                       § 738.3 Commerce            Country        Chart
                                                                 ECCNs, may be available. Consult part                         structure.
                                                                 740 of the EAR to determine eligibility
                                                                 for non-ECCN-driven License Excep-                          (a) Scope. The Commerce Country
                                                                 tions.                                                    Chart allows you to determine the
                                                                   (iii) List of Items Controlled—(A) Units.               Commerce Control List (CCL) export
                                                                 The unit of measure applicable to each                    and reexport license requirements for
                                                                 entry is identified in the ‘‘Units’’ head-                most items listed on the CCL. Such li-
                                                                 er. Most measurements used in the                         cense requirements are based on the
                                                                 CCL are expressed in metric units with                    Reasons for Control listed in the Ex-
                                                                 an inch-pound conversion where appro-                     port Control Classification Number
                                                                 priate. Note that in some ECCNs the                       (ECCN) that applies to the item. Some
                                                                 inch-pound unit will be listed first. In                  ECCNs, however, impose license re-
                                                                 instances where other units are in gen-                   quirements either without reference to
                                                                 eral usage or specified by law, these                     a reason for control code that is listed
                                                                 will be used instead of metric. Gen-                      on the Commerce Country Chart, or in
                                                                 erally, when there is a difference be-                    addition to such a reference. Those
                                                                 tween the metric and inch-pound fig-                      ECCNs may state their license require-
                                                                 ures, the metric standard will be used                    ments in full in their ‘‘Reasons for
                                                                 for classification and licensing pur-                     Control’’ sections or they may refer
                                                                 poses.                                                    the reader to another provision of the
                                                                   (B) Related definitions. This header                    EAR for license requirement informa-
                                                                 identifies, where appropriate, defini-                    tion. In addition, some ECCNs do not
                                                                 tions or parameters that apply to all                     impose license requirements, but refer
                                                                 items controlled by the entry. The in-
                                                                                                                           the reader to the regulations of an-
                                                                 formation provided in this section is
                                                                                                                           other government agency that may im-
                                                                 unique to the entry, and hence not list-
                                                                                                                           pose license requirements on the items
                                                                 ed in the definitions contained in part
                                                                 772 of the EAR.                                           described in that ECCN.
                                                                   (C) Related controls. If another U.S.                     (1) ECCNs 0A983, 5A980, 5D980, and
                                                                 government agency or department has                       5E980. A license is required for all des-
                                                                 export licensing authority over items                     tinations for items controlled under
                                                                 related to those controlled by an entry,                  these entries. For items controlled by
                                                                 a statement is included identifying the                   0A983 and 5E980, no License Exceptions
                                                                 agency or department along with the                       apply. For items controlled by 5A980
                                                                 applicable regulatory cite. An addi-                      and 5D980, License Exception GOV may
                                                                 tional cross-reference may be included                    apply if your item is consigned to and
                                                                 in instances where the scope of con-                      for the official use of an agency of the
                                                                 trols differs between a CCL entry and                     U.S. Government (see § 740.2(a)(3)). If
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                                                                 its corresponding entry on list main-                     your item is controlled by 0A983, 5A980,

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                                                                 § 738.4                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 5D980, or 5E980 you should proceed di-                    termined that your item is controlled
                                                                 rectly to part 748 of the EAR for li-                     by a specific ECCN, you must use infor-
                                                                 cense application instructions and                        mation contained in the ‘‘License Re-
                                                                 § 742.11 or § 742.13 of the EAR for infor-                quirements’’ section of that ECCN in
                                                                 mation on the licensing policy relevant                   combination with the Country Chart to
                                                                 to these types of applications.                           decide whether a license is required.
                                                                    (2) [Reserved]                                           (2) License decision making process.
                                                                    (b) Countries. The first column of the                 The following decision making process
                                                                 Country Chart lists all countries in al-                  must be followed in order to determine
                                                                 phabetical order. There are a number                      whether a license is required to export
                                                                 of destinations that are not listed in                    or reexport a particular item to a spe-
                                                                 the Country Chart contained in Supple-                    cific destination:
                                                                 ment No. 1 to part 738. If your destina-                    (i) Examine the appropriate ECCN in
                                                                 tion is not listed on the Country Chart                   the CCL. Is the item you intend to ex-
                                                                 and such destination is a territory,                      port or reexport controlled for a single
                                                                 possession, or department of a country                    Reason for Control?
                                                                 included on the Country Chart, the
                                                                                                                             (A) If yes, identify the single Reason
                                                                 EAR accords your destination the same
                                                                                                                           for Control and the relevant Country
                                                                 licensing treatment as the country of
                                                                                                                           Chart column identifier (e.g., CB Col-
                                                                 which it is a territory, possession, or
                                                                                                                           umn 1).
                                                                 department. For example, if your des-
                                                                 tination is the Cayman Islands, a de-                       (B) If no, identify the Country Chart
                                                                 pendent territory of the United King-                     column identifier for each applicable
                                                                 dom, consult the United Kingdom on                        Reason for Control (e.g., NS Column 1,
                                                                 the Country Chart for licensing re-                       NP Column 1, etc.).
                                                                 quirements.                                                 (ii) Review the Country Chart. With
                                                                    (c) Columns. Stretching out to the                     each of the applicable Country Chart
                                                                 right are horizontal headers identi-                      Column identifiers noted, turn to the
                                                                 fying the various Reasons for Control.                    Country Chart (Supplement No. 1 to
                                                                 Under each Reason for Control header                      part 738). Locate the correct Country
                                                                 are diagonal column identifiers cap-                      Chart column identifier on the diago-
                                                                 ping individual columns. Each column                      nal headings, and determine whether
                                                                 identifier consists of the two letter                     an ‘‘X’’ is marked in the cell next to
                                                                 Reason for Control and a column num-                      the country in question for each Coun-
                                                                 ber. (e.g., CB Column 1). The column                      try Chart column identified in the ap-
                                                                 identifiers correspond to those listed in                 plicable ECCN. If your item is subject
                                                                 the ‘‘Country Chart’’ header within the                   to more than one reason for control,
                                                                 ‘‘License Requirements’’ section of                       repeat this step using each unique
                                                                 each ECCN.                                                Country Chart column identifier.
                                                                    (d) Cells. The symbol ‘‘X’’ is used to                   (A) If yes, a license application must
                                                                 denote licensing requirements on the                      be submitted based on the particular
                                                                 Country Chart. If an ‘‘X’’ appears in a                   reason for control and destination, un-
                                                                 particular cell, transactions subject to                  less a License Exception applies. If
                                                                 that particular Reason for Control/Des-                   ‘‘Yes’’ is noted next to any of the listed
                                                                 tination combination require a license.                   License Exceptions, you should consult
                                                                 There is a direct correlation between                     part 740 of the EAR to determine
                                                                 the number of ‘‘X’’s applicable to your                   whether you can use any of the avail-
                                                                 transaction and the number of licens-                     able ECCN-drvien License Exceptions
                                                                 ing reviews your application will un-                     to effect your shipment, rather than
                                                                 dergo.                                                    applying for a license. Each affirmative
                                                                 [61 FR 12756, Mar. 25, 1996, as amended at 63             license requirement must be overcome
                                                                 FR 42228, Aug. 7, 1998; 65 FR 55178, Sept. 13,            by a License Exception. If you are un-
                                                                 2000; 70 FR 8249, Feb. 18, 2005; 71 FR 67035,             able to qualify for a License Exception
                                                                 Nov. 20, 2006]                                            based on each license requirement
                                                                                                                           noted on the Country Chart, you must
                                                                 § 738.4 Determining whether a license                     apply for a license. Note that other Li-
                                                                      is required.                                         cense Exceptions, not related to the
                                                                    (a) Using the CCL and the Country                      CCL, may also apply to your trans-
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                                                                 Chart—(1) Overview. Once you have de-                     action (See part 740 of the EAR).

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                                                                 Bureau of Industry and Security, Commerce                                                                                                  § 738.4

                                                                   (B) If no, a license is not required                                                            Control(s)                            Country Chart
                                                                 based on the particular Reason for Con-
                                                                                                                                             NP applies to 2A000.b ..................................    NP Column 1
                                                                 trol and destination. Provided that                                         AT applies to entire entry ..............................   AT Column 1
                                                                 General Prohibitions Four through Ten
                                                                 do not apply to your proposed trans-                                        LICENSE EXCEPTIONS
                                                                 action and that any applicable notifi-                                      LVS: $5,000
                                                                 cation or review requirements de-                                           GBS: Yes
                                                                 scribed in § 742.15(b)(1) and (b)(2) of the                                 CIV: N/A
                                                                 EAR have been met for certain                                               LIST OF ITEMS CONTROLLED
                                                                 encryption items controlled under                                           Unit: Number
                                                                 ECCNs 5A992, 5D992 and 5E992, you may                                       Related Definition: N/A
                                                                 effect your shipment using the symbol                                       Related Controls: N/A
                                                                                                                                             Items: a. Having x.
                                                                 ‘‘NLR’’. Proceed to parts 758 and 762 of                                      b. Having z.
                                                                 the EAR for information on export
                                                                 clearance     procedures    and     record-                                   (3) Sample analysis. After consulting
                                                                 keeping requirements. Note that al-                                         the CCL, I determine my item, valued
                                                                 though you may stop after determining                                       at $10,000, is classified under ECCN
                                                                 a license is required based on the first                                    2A000.a. I read that the entire entry is
                                                                 Reason for Control, it is best to work                                      controlled for national security, and
                                                                 through each applicable Reason for                                          anti-terrorism reasons. Since my item
                                                                 Control. A full analysis of every pos-                                      is classified under paragraph .a, and
                                                                 sible licensing requirement based on                                        not .b, I understand that though nu-
                                                                 each applicable Reason for Control is                                       clear nonproliferation controls apply
                                                                 required to determine the most advan-                                       to a portion of the entry, they do not
                                                                 tageous License Exception available                                         apply to my item. I note that the ap-
                                                                 for your particular transaction and, if                                     propriate Country Chart column iden-
                                                                 a license is required, ascertain the                                        tifiers are NS Column 2 and AT Column
                                                                 scope of review conducted by BIS on                                         1. Turning to the Country Chart, I lo-
                                                                 your license application.                                                   cate my specific destination, India, and
                                                                   (b) Sample analysis using the CCL and                                     see that an ‘‘X’’ appears in the NS Col-
                                                                 Country Chart—(1) Scope. The following                                      umn 2 cell for India, but not in the AT
                                                                 sample entry and related analysis is                                        Column 1 cell. I understand that a li-
                                                                 provided to illustrate the type of                                          cense is required, unless my trans-
                                                                 thought process you must complete in                                        action qualifies for a License Excep-
                                                                 order to determine whether a license is                                     tion or Special Comprehensive License.
                                                                 required to export or reexport a par-                                       From the License Exception LVS value
                                                                 ticular item to a specific destination                                      listed in the entry, I know immediately
                                                                 using the CCL in combination with the                                       that my proposed transaction exceeds
                                                                 Country Chart.                                                              the value limitation associated with
                                                                   (2) Sample CCL entry.                                                     LVS. Noting that License Exception
                                                                 2A000: Entry heading.                                                       GBS is ‘‘Yes’’ for this entry, I turn to
                                                                 LICENSE REQUIREMENTS                                                        part 740 of the EAR to review the pro-
                                                                 Reason for Control: NS, NP, AT                                              visions related to use of GBS.
                                                                                       Control(s)                            Country Chart   [61 FR 12756, Mar. 25, 1996, as amended at 67
                                                                                                                                             FR 38861, June 6, 2002; 70 FR 54628, Sept. 16,
                                                                 NS applies to entire entry ..............................   NS Column 2     2005]
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                                                                                                                                                                                                                            Pt. 738, Supp. 1
                                                                                          SUPPLEMENT NO. 1 TO PART 738—COMMERCE COUNTRY CHART
                                                                                                                       [Reason for control]

                                                                            Chemical and biological   Nuclear non-         National       Missile     Regional      Fire-           Crime control          Anti-terrorism
Jkt 214049




                                                                                  weapons             proliferation        security        tech       stability     arms
                                                                                                                                                                    con-
                                           Countries                                                                                                               vention   CC 1      CC 2         CC 3   AT 1      AT 2
                                                                            CB 1     CB 2     CB 3    NP 1    NP 2    NS 1       NS 2     MT 1      RS 1    RS 2
                                                                                                                                                                    FC 1

                            Afghanistan ............................         X        X         X      X               X              X       X      X        X               X                      X
PO 00000




                            Albania ...................................      X        X                X               X              X       X      X        X               X          X
                            Algeria ....................................     X        X                X               X              X       X      X        X               X                      X
                            Andorra ..................................       X        X                X               X              X       X      X        X               X                      X
                            Angola ...................................       X        X                X               X              X       X      X        X               X                      X
                            Antigua and Barbuda .............                X        X                X               X              X       X      X        X      X        X                      X
Frm 00250




                            Argentina ...............................        X                                         X              X       X      X        X      X        X                      X
                            Armenia .................................        X        X         X      X               X              X       X      X        X               X          X
                            Aruba .....................................      X        X                X               X              X       X      X        X               X                      X
                            Australia .................................      X                                         X                      X      X
                            Austria ....................................     X                                         X                      X      X        X               X                      X
Fmt 8010




                            Azerbaijan ..............................        X        X         X      X               X              X       X      X        X               X          X
                            Bahamas, The .......................             X        X                X               X              X       X      X        X      X        X                      X
                            Bahrain ..................................       X        X         X      X               X              X       X      X        X               X                      X
                      240




                            Bangladesh ............................          X        X                X               X              X       X      X        X               X                      X
                            Barbados ...............................         X        X                X               X              X       X      X        X      X        X                      X
Sfmt 8002




                            Belarus ...................................      X        X         X                      X              X       X      X        X               X          X
                            Belgium ..................................       X                                         X                      X      X
                            Belize .....................................     X        X                X               X              X       X      X        X      X        X                      X
                            Benin ......................................     X        X                X               X              X       X      X        X               X                      X
                            Bhutan ...................................       X        X                X               X              X       X      X        X               X                      X




                                                                                                                                                                                                                            15 CFR Ch. VII (1–1–08 Edition)
Y:\SGML\214049.XXX




                            Bolivia ....................................     X        X                X               X              X       X      X        X      X        X                      X
                            Bosnia and Herzegovina .......                   X        X                X               X              X       X      X        X               X                      X
                            Botswana ...............................         X        X                X               X              X       X      X        X               X                      X
                            Brazil ......................................    X        X                                X              X       X      X        X      X        X                      X
                            Brunei ....................................      X        X                X               X              X       X      X        X               X                      X
                            Bulgaria ..................................      X                                         X                      X      X
                            Burkina Faso .........................           X        X                X               X              X       X      X        X               X                      X
                            Burma ....................................       X        X         X      X               X              X       X      X        X               X                      X
                            Burundi ..................................       X        X                X               X              X       X      X        X               X                      X
                            Cambodia ..............................          X        X                X               X              X       X      X        X               X          X
                            Cameroon ..............................          X        X                X               X              X       X      X        X               X                      X
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                            Canada ..................................        X                                                                                       X
                            Cape Verde ...........................           X        X                X               X              X       X      X        X               X                      X
                            Central African Republic ........                X        X                X               X              X       X      X        X               X                      X
                            Chad ......................................      X        X                X               X              X       X      X        X               X                      X
                            Chile .......................................    X        X                X               X              X       X      X        X      X        X                      X
                            China .....................................      X        X         X      X               X              X       X      X        X               X                      X
                            Colombia ................................        X        X                X               X              X       X      X        X      X        X                      X
                            Comoros ................................         X        X                X               X              X       X      X        X               X                      X
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                                                                                                                                                                                                                                   Bureau of Industry and Security, Commerce
                            Congo (Democratic Republic
                               of the) .................................      X        X                X                  X          X         X          X          X                   X                     X
                            Congo (Republic of the) ........                  X        X                X                  X          X         X          X          X                   X                     X
                            Costa Rica .............................          X        X                X                  X          X         X          X          X          X        X                     X
                            Cote d’Ivoire ..........................          X        X                X                  X          X         X          X          X                   X                     X
Jkt 214049




                            Croatia ...................................       X                         X
                                                                                  ............ ............   ............ X          X         X          X          X     ............  X       ............  X   ............
                            Cuba ......................................                                the EAR to determine whether
                                                                                          See part 746 of                             a license is required in order to export or reexport to this destination.
                            Cyprus ...................................        X                                            X          X         X          X          X                   X                     X
                            Czech Republic .....................              X                                            X                    X          X
                            Denmark ................................          X                                            X                    X          X
PO 00000




                            Djibouti ...................................      X      X                  X                  X          X         X          X          X                   X                     X
                            Dominica ................................         X      X                  X                  X          X         X          X          X          X        X                     X
                            Dominican Republic ...............                X      X                  X                  X          X         X          X          X          X        X                     X
                            East Timor .............................          X      X                  X                  X          X         X          X          X                   X                     X
                            Ecuador .................................         X      X                  X                  X          X         X          X          X          X        X                     X
                            Egypt ......................................      X      X        X         X                  X          X         X          X          X                   X                     X
Frm 00251




                            El Salvador ............................          X      X                  X                  X          X         X          X          X          X        X                     X
                            Equatorial Guinea ..................              X      X                  X                  X          X         X          X          X                   X                     X
                            Eritrea ....................................      X      X                  X                  X          X         X          X          X                   X                     X
                            Estonia ...................................       X                         X                  X                    X          X
                            Ethiopia ..................................       X      X                  X                  X          X         X          X          X                   X                     X
Fmt 8010




                            Fiji ..........................................   X      X                  X                  X          X         X          X          X                   X            X        X
                            Finland ...................................       X                                            X                    X          X          X                   X                     X
                            France ....................................       X                                            X                    X          X
                      241




                            Gabon ....................................        X      X                  X                  X          X         X          X          X                   X                     X
                            Gambia, The ..........................            X      X                  X                  X          X         X          X          X                   X                     X
Sfmt 8002




                            Georgia ..................................        X      X        X         X                  X          X         X          X          X                   X            X
                            Germany ................................          X                                            X                    X          X
                            Ghana ....................................        X      X                  X                  X          X         X          X          X                   X                     X
                            Greece ...................................        X                                            X                    X          X
                            Grenada .................................         X      X                  X                  X          X         X          X          X          X        X                     X
Y:\SGML\214049.XXX




                            Guatemala .............................           X      X                  X                  X          X         X          X          X          X        X                     X
                            Guinea ...................................        X      X                  X                  X          X         X          X          X                   X                     X
                            Guinea-Bissau .......................             X      X                  X                  X          X         X          X          X                   X                     X
                            Guyana ..................................         X      X                  X                  X          X         X          X          X          X        X                     X
                            Haiti ........................................    X      X                  X                  X          X         X          X          X          X        X                     X
                            Honduras ...............................          X      X                  X                  X          X         X          X          X          X        X                     X
                            Hong Kong .............................           X      X                  X                  X                    X          X          X                   X                     X
                            Hungary .................................         X                                            X                    X          X
                            Iceland ...................................       X                         X                  X                    X          X
                            India .......................................     X      X        X         X                  X          X         X          X          X                   X                     X




                                                                                                                                                                                                                                   Pt. 738, Supp. 1
                            Indonesia ...............................         X      X                  X                  X          X         X          X          X                   X                     X
214049




                            Iran .........................................             See part 746 of the EAR to determine whether   a license is required in order to export or reexport to this destination.
                            Iraq 1 ......................................     X      X        X         X          X       X          X         X          X          X                   X            X
                            Ireland ....................................      X                                            X                    X          X          X                   X                     X
                            Israel ......................................     X      X        X         X          X       X          X         X          X          X                   X                     X
                            Italy ........................................    X                                            X                    X          X
                            Jamaica .................................         X      X                  X                  X          X         X          X          X          X        X                     X
                            Japan .....................................       X                                            X                    X          X
                            Jordan ....................................       X      X        X         X                  X          X         X          X          X                   X                     X
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                                                                                                                                                                                                                                            Pt. 738, Supp. 1
                                                                                                                                     [Reason for control]

                                                                              Chemical and biological        Nuclear non-                National       Missile     Regional       Fire-            Crime control          Anti-terrorism
                                                                                    weapons                  proliferation               security        tech       stability      arms
                                                                                                                                                                                   con-
                                           Countries
Jkt 214049




                                                                                                                                                                                  vention    CC 1      CC 2         CC 3   AT 1      AT 2
                                                                              CB 1     CB 2        CB 3     NP 1      NP 2          NS 1       NS 2     MT 1      RS 1    RS 2
                                                                                                                                                                                   FC 1

                            Kazakhstan ............................            X         X          X                            X        X         X         X          X                   X           X
                            Kenya .....................................        X         X                   X                   X        X         X         X          X                   X                      X
PO 00000




                            Kiribati ....................................      X         X                   X                   X        X         X         X          X                   X                      X
                            Korea, North ..........................          See Sections 742.19   and 746.4 of the EAR to determine whether a license is required in order to export or reexport to this destination.
                            Korea, South ..........................            X                                                 X                  X         X          X                   X                      X
                            Kuwait ....................................        X         X          X        X                   X        X         X         X          X                   X                      X
                            Kyrgyzstan .............................           X         X          X        X                   X        X         X         X          X                   X           X
Frm 00252




                            Laos .......................................       X         X                   X                   X        X         X         X          X                   X           X
                            Latvia .....................................       X                                                 X                  X         X
                            Lebanon .................................          X         X          X        X                   X        X         X         X          X                   X                      X
                            Lesotho ..................................         X         X                   X                   X        X         X         X          X                   X                      X
                            Liberia ....................................       X         X                   X                   X        X         X         X          X                   X                      X
                            Libya ......................................       X         X          X        X         X         X        X         X         X          X                   X                      X
Fmt 8010




                            Liechtenstein ..........................           X         X                   X                   X        X         X         X          X                   X                      X
                            Lithuania ................................         X                             X                   X                  X         X
                            Luxembourg ...........................             X                                                 X                  X         X
                      242




                            Macau ....................................         X         X          X        X                   X        X         X         X          X                   X                      X
                            Macedonia (The Former
Sfmt 8002




                               Yugoslav Republic of) ........                  X        X                     X                      X              X       X      X        X                  X                     X
                            Madagascar ...........................             X        X                     X                      X              X       X      X        X                  X                     X
                            Malawi ....................................        X        X                     X                      X              X       X      X        X                  X                     X
                            Malaysia .................................         X        X                     X                      X              X       X      X        X                  X                     X
                            Maldives .................................         X        X                     X                      X              X       X      X        X                  X                     X




                                                                                                                                                                                                                                            15 CFR Ch. VII (1–1–08 Edition)
Y:\SGML\214049.XXX




                            Mali ........................................      X        X                     X                      X              X       X      X        X                  X                     X
                            Malta ......................................       X                              X                      X              X       X      X        X                  X                     X
                            Marshall Islands .....................             X        X                     X                      X              X       X      X        X                  X                     X
                            Mauritania ..............................          X        X                     X                      X              X       X      X        X                  X                     X
                            Mauritius ................................         X        X                     X                      X              X       X      X        X                  X                     X
                            Mexico ...................................         X        X                     X                      X              X       X      X        X        X         X                     X
                            Micronesia (Federated State
                               of) .......................................     X        X                     X                      X              X       X      X        X                  X                     X
                            Moldova .................................          X        X           X         X                      X              X       X      X        X                  X         X
                            Monaco ..................................          X        X                     X                      X              X       X      X        X                  X                     X
                            Mongolia ................................          X        X           X         X                      X              X       X      X        X                  X         X
214049




                            Montenegro ............................            X        X                     X      ............    X              X       X      X        X                  X         X           X
                            Morocco .................................          X        X                     X                      X              X       X      X        X                  X                     X
                            Mozambique ..........................              X        X                     X                      X              X       X      X        X                  X                     X
                            Namibia ..................................         X        X                     X                      X              X       X      X        X                  X                     X
                            Nauru .....................................        X        X                     X                      X              X       X      X        X                  X                     X
                            Nepal .....................................        X        X                     X                      X              X       X      X        X                  X                     X
                            Netherlands Antilles ...............               X        X                     X                      X              X       X      X        X                  X                     X
                            Netherlands ...........................            X                                                     X                      X      X
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                                                                                                                                                                  Bureau of Industry and Security, Commerce
                            New Zealand .........................           X                                         X       X   X
                            Nicaragua ..............................        X   X                  X                  X   X   X   X   X   X   X       X
                            Niger ......................................    X   X                  X                  X   X   X   X   X       X       X
                            Nigeria ...................................     X   X                  X                  X   X   X   X   X       X       X
                            Norway ...................................      X                                         X       X   X
Jkt 214049




                            Oman .....................................      X   X       X          X                  X   X   X   X   X       X       X
                            Pakistan .................................      X   X       X          X       X          X   X   X   X   X       X       X
                            Palau ......................................    X   X                  X                  X   X   X   X   X       X       X
                            Panama .................................        X   X                  X                  X   X   X   X   X   X   X       X
                            Papua New Guinea ...............                X   X                  X                  X   X   X   X   X       X       X
PO 00000




                            Paraguay ...............................        X   X                  X                  X   X   X   X   X   X   X       X
                            Peru .......................................    X   X                  X                  X   X   X   X   X   X   X       X
                            Philippines .............................       X   X                  X                  X   X   X   X   X       X       X
                            Poland ....................................     X                                         X       X   X
                            Portugal .................................      X                                         X       X   X
                            Qatar ......................................    X   X       X          X                  X   X   X   X   X       X       X
Frm 00253




                            Romania ................................        X                                         X       X   X
                            Russia ....................................     X   X       X                             X   X   X   X   X       X   X
                            Rwanda 1 ...............................        X   X                  X                  X   X   X   X   X       X   X   X
                            St. Kitts and Nevis .................           X   X                  X                  X   X   X   X   X   X   X       X
                            St. Lucia .................................     X   X                  X                  X   X   X   X   X   X   X       X
Fmt 8010




                            St. Vincent and the Grena-
                              dines ...................................     X   X                  X                  X   X   X   X   X   X   X       X
                            Samoa ...................................       X   X                  X                  X   X   X   X   X       X       X
                      243




                            San Marino ............................         X   X                  X                  X   X   X   X   X       X       X
                            Sao Tome and Principe .........                 X   X                  X                  X   X   X   X   X       X       X
Sfmt 8002




                            Saudi Arabia ..........................         X   X       X          X                  X   X   X   X   X       X       X
                            Senegal ..................................      X   X                  X                  X   X   X   X   X       X       X
                            Serbia ....................................     X   X   ............   X   ............   X   X   X   X   X       X   X   X
                            Seycheles ..............................        X   X                  X                  X   X   X   X   X       X       X
                            Sierra Leone ..........................         X   X                  X                  X   X   X   X   X       X       X
Y:\SGML\214049.XXX




                            Singapore ..............................        X   X                  X                  X   X   X   X   X       X       X
                            Slovakia .................................      X                                         X       X   X
                            Slovenia .................................      X                                         X       X   X
                            Solomon Islands ....................            X   X                  X                  X   X   X   X   X       X       X
                            Somalia ..................................      X   X                  X                  X   X   X   X   X       X       X
                            South Africa ...........................        X   X                                     X   X   X   X   X       X       X
                            Spain ......................................    X                                         X       X   X
                            Sri Lanka ...............................       X   X                  X                  X   X   X   X   X       X       X
                            Sudan ....................................      X   X                  X                  X   X   X   X   X       X       X   X   X
                            Suriname ...............................        X   X                  X                  X   X   X   X   X   X   X       X




                                                                                                                                                                  Pt. 738, Supp. 1
                            Swaziland ..............................        X   X                  X                  X   X   X   X   X       X       X
214049




                            Sweden ..................................       X                                         X       X   X   X       X       X
                            Switzerland ............................        X                                         X       X   X   X       X       X
                            Syria .......................................   X   X       X          X                  X   X   X   X   X       X       X   X
                            Taiwan ...................................      X   X       X          X                  X   X   X   X   X       X       X
                            Tajikistan ................................     X   X       X          X                  X   X   X   X   X       X   X
                            Tanzania ................................       X   X                  X                  X   X   X   X   X       X       X
                            Thailand .................................      X   X                  X                  X   X   X   X   X       X       X
                            Togo .......................................    X   X                  X                  X   X   X   X   X       X       X
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                                                                                                                                                                                                                             Pt. 738, Supp. 1
                                                                                                                     [Reason for control]

                                                                          Chemical and biological   Nuclear non-         National       Missile     Regional      Fire-           Crime control          Anti-terrorism
                                                                                weapons             proliferation        security        tech       stability     arms
                                                                                                                                                                  con-
                                          Countries
Jkt 214049




                                                                                                                                                                 vention   CC 1      CC 2         CC 3   AT 1      AT 2
                                                                          CB 1     CB 2     CB 3    NP 1    NP 2    NS 1       NS 2     MT 1      RS 1    RS 2
                                                                                                                                                                  FC 1

                            Tonga .....................................    X        X                X               X              X       X      X        X                X
                            Trinidad and Tobago .............              X        X                X               X              X       X      X        X      X         X                     X
PO 00000




                            Tunisia ...................................    X        X                X               X              X       X      X        X                X                     X
                            Turkey ....................................    X                                         X                      X      X
                            Turkmenistan .........................         X        X         X      X               X              X       X      X        X                X         X
                            Tuvalu ....................................    X        X                X               X              X       X      X        X                X                     X
                            Uganda ..................................      X        X                X               X              X       X      X        X                X                     X
Frm 00254




                            Ukraine ..................................     X                                         X              X       X      X        X                X         X
                            United Arab Emirates ............              X        X         X      X               X              X       X      X        X                X                     X
                            United Kingdom .....................           X                                         X                      X      X
                            Uruguay .................................      X        X                X               X              X       X      X        X      X         X                     X
                            Uzbekistan .............................       X        X         X      X               X              X       X      X        X                X         X
                            Vanuatu .................................      X        X                X               X              X       X      X        X                X                     X
Fmt 8010




                            Vatican City ...........................       X        X                X               X              X       X      X        X                X                     X
                            Venezuela ..............................       X        X                X               X              X       X      X        X      X         X                     X
                            Vietnam ..................................     X        X         X      X               X              X       X      X        X                X         X
                      244




                            Western Sahara .....................           X        X                X               X              X       X      X        X                X                     X
                            Yemen ...................................      X        X         X      X               X              X       X      X        X                X                     X
Sfmt 8027




                            Zambia ...................................     X        X                X               X              X       X      X        X                X                     X
                            Zimbabwe ..............................        X        X                X               X              X       X      X        X                X                     X
                             1 This country is subject to sanctions implemented by the United Nations Security Council. See § 746.3 for license requirements for exports and reexports to Iraq or transfer within Iraq, as
                            well as regional stability licensing requirements not included in the Country Chart. See § 746.8 for license requirements for exports and reexports to Rwanda.




                                                                                                                                                                                                                             15 CFR Ch. VII (1–1–08 Edition)
Y:\SGML\214049.XXX




                            [64 FR 17970, Apr. 13, 1999, as amended at 64 FR 28908, May 28, 1999; 64 FR 42011, Aug. 3, 1999; 64 FR 60340, Nov. 5, 1999; 65 FR 38150, June
                            19, 2000; 65 FR 60854, Oct. 13, 2000; 66 FR 12846, Mar. 1, 2001; 66 FR 18402, Apr. 9, 2001; 66 FR 49523, Sept. 28, 2001; 67 FR 10613, Mar. 8, 2002;
                            67 FR 11897, Mar. 18, 2002; 67 FR 37981, May 31, 2002; 67 FR 55596, Aug. 29, 2002; 67 FR 70546, Nov. 25, 2002; 68 FR 60289, Oct. 22, 2003; 69
                            FR 3005, Jan. 22, 2004; 69 FR 21056, Apr. 20, 2004; 69 FR 23628, Apr. 29, 2004; 69 FR 36010, June 28, 2004; 69 FR 41879, July 12, 2004; 69 FR
                            46074, July 30, 2004; 69 FR 77892, Dec. 29, 2004; 70 FR 14389, Mar. 22, 2005; 70 FR 45278, Aug. 5, 2005; 70 FR 51252, Aug. 30, 2005; 70 FR 67348,
                            Nov. 7, 2005; 71 FR 33618, June 12, 2006; 71 FR 51717, Aug. 31, 2006; 71 FR 68439, Nov. 27, 2006; 72 FR 3724, Jan. 26, 2007; 72 FR 52002, Sept.
                            12, 2007]
214049
                                                                 Bureau of Industry and Security, Commerce                                                           § 740.1

                                                                   PART 740—LICENSE EXCEPTIONS                             (ECCNs) in the Commerce Control List
                                                                                                                           (CCL) in Supplement No. 1 to part 774
                                                                 Sec.                                                      of the EAR and items subject to the
                                                                 740.1 Introduction.                                       EAR that would require a license based
                                                                 740.2 Restrictions on all License Excep-                  on the embargo policies described in
                                                                     tions.
                                                                                                                           part 746 of the EAR. If your export or
                                                                 740.3 Shipments of limited value (LVS).
                                                                 740.4 Shipments to Country Group B coun-                  reexport is subject to General Prohibi-
                                                                     tries (GBS).                                          tion Six for embargoed destinations,
                                                                 740.5 Civil end-users (CIV).                              refer to part 746 of the EAR to deter-
                                                                 740.6 Technology and software under re-                   mine the availability of any License
                                                                     striction (TSR).
                                                                                                                           Exceptions. Special commodity con-
                                                                 740.7 Computers (APP).
                                                                 740.8 Key       management     infrastructure             trols apply to short supply items. Li-
                                                                     (KMI).                                                cense Exceptions for items listed on
                                                                 740.9 Temporary imports, exports, and reex-               the CCL as controlled for Short Supply
                                                                     ports (TMP).                                          reasons are found in part 754 of the
                                                                 740.10 Servicing and replacement of parts
                                                                                                                           EAR. If your export or reexport is sub-
                                                                     and equipment (RPL).
                                                                 740.11 Governments, international organiza-               ject to General Prohibition Five, con-
                                                                     tions, and international inspections                  sult part 744 of the EAR. If your export
                                                                     under the Chemical Weapons Convention                 or reexport is subject to General Prohi-
                                                                     (GOV).                                                bitions Four, Seven, Nine, or Ten, then
                                                                 740.12 Gift parcels and humanitarian dona-                no License Exceptions apply.
                                                                     tions (GFT).
                                                                 740.13 Technology      and    software—unre-                 (b) Certification. By using any of the
                                                                     stricted (TSU).                                       License Exceptions you are certifying
                                                                 740.14 Baggage (BAG).                                     that the terms, provisions, and condi-
                                                                 740.15 Aircraft and vessels (AVS).                        tions for the use of the License Excep-
                                                                 740.16 Additional     permissive    reexports
                                                                                                                           tion described in the EAR have been
                                                                     (APR).
                                                                 740.17 Encryption commodities and software                met. Please refer to part 758 of the
                                                                     (ENC).                                                EAR for clearance of shipments and
                                                                 740.18 Agricultural commodities (AGR).                    documenting the use of License Excep-
                                                                 SUPPLEMENT NO. 1 TO PART 740—COUNTRY                      tions.
                                                                     GROUPS                                                   (c) License Exception symbols. Each Li-
                                                                 SUPPLEMENT NO. 2 TO PART 740—ITEMS THAT
                                                                                                                           cense Exception bears a three letter
                                                                     MAY BE DONATED TO MEET BASIC HUMAN
                                                                     NEEDS UNDER THE HUMANITARIAN LICENSE                  symbol that will be used for export
                                                                     EXCEPTION                                             clearance purposes (see paragraph (d)
                                                                 SUPPLEMENT NO. 3 TO PART 740—COUNTRIES                    of this section).
                                                                     ELIGIBLE     FOR   THE   PROVISIONS    OF                (d) Shipper’s Export Declaration or
                                                                     § 740.17(A)
                                                                                                                           Automated Export System (AES) record.
                                                                   AUTHORITY: 50 U.S.C. app. 2401 et seq.; 50              You must enter on any required Ship-
                                                                 U.S.C. 1701 et seq.; 22 U.S.C. 7201 et seq.; E.O.         per’s Export Declaration (SED) or
                                                                 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228;
                                                                 E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.            Automated Export System (AES)
                                                                 783; Notice of August 15, 2007, 72 FR 46137               record the correct License Exception
                                                                 (August 16, 2007).                                        symbol (e.g., LVS, GBS, CIV) and the
                                                                                                                           correct Export Control Classification
                                                                 § 740.1 Introduction.                                     Number (ECCN) (e.g., 4A003, 5A002) for
                                                                    In this part, references to the EAR                    all shipments of items exported under a
                                                                 are references to 15 CFR chapter VII,                     License Exception. Items temporarily
                                                                 subchapter C.                                             in the United States meeting the provi-
                                                                    (a) Scope. A ‘‘License Exception’’ is                  sions of License Exception TMP, under
                                                                 an authorization contained in this part                   § 740.9(b)(3), are excepted from this re-
                                                                 that allows you to export or reexport                     quirement. See § 758.1 of the EAR for
                                                                 under stated conditions, items subject                    Shipper’s Export Declaration or Auto-
                                                                 to the Export Administration Regula-                      mated Export System (AES) require-
                                                                 tions (EAR) that would otherwise re-                      ments.
                                                                 quire a license under General Prohibi-
                                                                                                                              (e) Destination Control Statement. You
                                                                 tion One, Two, Three, or Eight, as indi-
                                                                 cated under one or more of the Export                     may be required to enter an appro-
ebenthall on PRODPC61 with CFR




                                                                 Control       Classification   Numbers                    priate Destination Control Statement

                                                                                                                      245



                                 VerDate Aug<31>2005   13:14 Feb 07, 2008   Jkt 214049   PO 00000   Frm 00255   Fmt 8010   Sfmt 8010   Y:\SGML\214049.XXX   214049
                                                                 § 740.2                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 on commercial documents in accord-                        exported as part of a manned aircraft,
                                                                 ance with Destination Control State-                      land vehicle or marine vehicle or in
                                                                 ment requirements of § 758.6 of the                       quantities appropriate for replacement
                                                                 EAR.                                                      parts for such applications under
                                                                   (f) Recordkeeping. Records of trans-                    § 740.9(a)(2)(ii) (License Exception TMP
                                                                 actions involving exports under any of                    for kits consisting of replacement
                                                                 the License Exceptions must be main-                      parts), § 740.10 (License Exception
                                                                 tained in accordance with the record-                     RPL), § 740.13 (License Exception TSU),
                                                                 keeping requirements of part 762 of the                   or § 740.15(c) (License Exception AVS
                                                                 EAR.                                                      for equipment and spare parts for per-
                                                                 [61 FR 12768, Mar. 25, 1996, as amended at 61             manent use on a vessel or aircraft).
                                                                 FR 64274, Dec. 4, 1996; 62 FR 25457, May 9,                  (ii) MT controlled commodities de-
                                                                 1997; 65 FR 42568, July 10, 2000; 66 FR 36680,            scribed in ECCN 2A001 may be exported
                                                                 July 12, 2001; 66 FR 42109, Aug. 10, 2001; 68 FR          or reexported under § 740.9(a)(2)(ii) (Li-
                                                                 50472, Aug. 21, 2003]                                     cense Exception TMP) or § 740.10 (Li-
                                                                                                                           cense Exception RPL) as one-for-one
                                                                 § 740.2 Restrictions on all License Ex-
                                                                       ceptions.                                           replacement for equipment previously
                                                                                                                           legally exported or reexported.
                                                                    (a) You may not use any License Ex-                       (6) The export or reexport is to a
                                                                 ception if any one or more of the fol-                    comprehensively embargoed destina-
                                                                 lowing apply:                                             tion (Cuba, Iran, and North Korea), un-
                                                                    (1) Your authorization to use a Li-                    less a license exception or portion
                                                                 cense Exception has been suspended or                     thereof is specifically listed in the li-
                                                                 revoked, or your intended export does                     cense exceptions paragraph pertaining
                                                                 not qualify for a License Exception.                      to a particular embargoed country in
                                                                    (2) The export or reexport is subject                  part 746 of the EAR.
                                                                 to one of the ten General Prohibitions,
                                                                                                                              (7) ‘‘Space qualified’’ items. Commod-
                                                                 is not eligible for a License Exception,
                                                                                                                           ities defined in ECCNs 3A001.b.8 (Trav-
                                                                 and has not been authorized by BIS.
                                                                                                                           eling Wave Tube Amplifiers (TWTAs)
                                                                    (3) The item is primarily useful for
                                                                                                                           exceeding 18 GHz), 6A002.e, 6A008.j.1, or
                                                                 surreptitious interception of wire, oral,
                                                                 or electronic communications, or re-                      6A998.b; ‘‘software’’ for commodities
                                                                 lated software, controlled under ECCNs                    defined in ECCNs 3A001.b.8 (Traveling
                                                                 5A980 or 5D980, unless the item is con-                   Wave Tube Amplifiers (TWTAs) exceed-
                                                                 signed to and for the official use of an                  ing 18 GHz), 6A002.e, 6A008.j.1, or
                                                                 agency of the U.S. Government (see                        6A998.b and controlled under ECCNs
                                                                 § 740.11(b)(2)(ii) of this part, Govern-                  3D001 (Traveling Wave Tube Amplifiers
                                                                 ments (GOV)).                                             (TWTAs) exceeding 18 GHz), 6D001,
                                                                    (4) The item being exported or reex-                   6D002, 6D991; and ‘‘technology’’ for
                                                                 ported is subject to the license require-                 commodities         defined    in     ECCNs
                                                                 ments described in § 742.7 of the EAR                     3A001.b.8 (Traveling Wave Tube Ampli-
                                                                 and the export or reexport is not:                        fiers (TWTAs) exceeding 18 GHz),
                                                                    (i) Being made to Australia, Japan,                    6A002.e, 6A008.j.1, or 6A998.b and con-
                                                                 New Zealand, or a NATO (North Atlan-                      trolled under ECCNs 3E001, 6E001,
                                                                 tic Treaty Organization) member state                     6E002, 6E101, 6E991.
                                                                 (see NATO membership listing in § 772.1                      (8) The item is controlled under
                                                                 of the EAR);                                              ECCNs 2A983, 2D983 or 2E983 and the Li-
                                                                    (ii) Authorized by § 740.11(b)(2)(ii) (of-             cense Exception is other than:
                                                                 ficial use by personnel and agencies of                      (i) RPL, under the provisions of
                                                                 the U.S. government); or                                  § 740.10, including § 740.10(a)(3)(v), which
                                                                    (iii) Authorized by § 740.14(e) of the                 prohibits exports and reexports of re-
                                                                 EAR (certain shotguns and shotgun                         placement parts to countries in Coun-
                                                                 shells for personal use).                                 try Group E:1 (see Supplement 1 to
                                                                    (5)(i) The item is controlled for mis-                 part 740));
                                                                 sile technology (MT) reasons, except                         (ii) GOV, restricted to eligibility
                                                                 that the items described in ECCNs                         under the provisions of § 740.11(b)(2)(ii)
                                                                 6A008, 7A001, 7A002, 7A004, 7A101, 7A102,                 or (v); or
                                                                 7A103, 7A104, 7B001, 7D001, 7D002, 7D003,                    (iii) TSU, under the provisions of
ebenthall on PRODPC61 with CFR




                                                                 7D101, 7D102, 7E003, or 7E101, may be                     § 740.13(a) and (c).

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.3

                                                                   (9) The item is a QRS11–00100–100/101                   communication from a person in a for-
                                                                 Micromachined Angular Rate Sensor                         eign country, or that person’s rep-
                                                                 controlled for RS reasons under ECCN                      resentative, expressing an intent to im-
                                                                 7A994.                                                    port commodities from the exporter.
                                                                   (10) The commodity being exported or                    Although all of the details of the order
                                                                 reexported is subject to the license re-                  need not be finally determined at the
                                                                 quirements of § 742.11 of the EAR.                        time of export, terms relating to the
                                                                   (b) All License Exceptions are sub-                     kinds and quantities of the commod-
                                                                 ject to revision, suspension, or revoca-                  ities to be exported, as well as the sell-
                                                                 tion, in whole or in part, without no-                    ing prices of these commodities, must
                                                                 tice. It may be necessary for BIS to                      be finalized before the goods can be ex-
                                                                 stop a shipment or an export trans-                       ported under License Exception LVS.
                                                                 action at any stage of its progress, e.g.,                  (2) Net value: for LVS shipments. The
                                                                 in order to prevent an unauthorized ex-                   actual selling price of the commodities
                                                                 port or reexport. If a shipment is al-                    that are included in the same order and
                                                                 ready en route, it may be further nec-                    are controlled under the same entry on
                                                                 essary to order the return or unloading                   the CCL, less shipping charges, or the
                                                                 of the shipment at any port of call.                      current market price of the commod-
                                                                   (c) BIS may by informing the ex-                        ities to the same type of purchaser in
                                                                 porter, suspend or revoke any License                     the United States, whichever is the
                                                                 Exception in order to comply with U.S.                    larger. In determining the actual sell-
                                                                 Wassenaar obligations. In addition, BIS                   ing price or the current market price of
                                                                 may inform an exporter, that before                       the commodity, the value of containers
                                                                 using any License Exception, a notice                     in which the commodity is being ex-
                                                                 be submitted with BIS concerning the                      ported may be excluded. The value for
                                                                 proposed export.                                          LVS purposes is that of the controlled
                                                                   (d) See § 746.3 for restrictions on cer-                commodity that is being exported, and
                                                                 tain transfers within Iraq of items ex-                   may not be reduced by subtracting the
                                                                 ported or reexported to Iraq pursuant                     value of any content that would not, if
                                                                 to a License Exception.                                   shipped separately, be subject to li-
                                                                 [61 FR 12768, Mar. 25, 1996, as amended at 61             censing. Where the total value of the
                                                                 FR 64274, Dec. 4, 1996; 62 FR 25457, May 9,               containers and their contents must be
                                                                 1997; 63 FR 2456, Jan. 15, 1998; 64 FR 13339,             shown on Shipper’s Export Declara-
                                                                 Mar. 18, 1999; 66 FR 36680, July 12, 2001; 67 FR          tions under one Schedule B Number,
                                                                 59725, Sept. 23, 2002; 68 FR 16211, Apr. 3, 2003;         the exporter, in effecting a shipment
                                                                 69 FR 5930, Feb. 9, 2004; 69 FR 23628, Apr. 29,           under this License Exception, must in-
                                                                 2004; 69 FR 46074, July 30, 2004; 70 FR 67348,
                                                                 Nov. 7, 2005; 71 FR 43046, July 31, 2006; 71 FR
                                                                                                                           dicate the ‘‘net value’’ of the contained
                                                                 67036, Nov. 20, 2006; 72 FR 3725, Jan. 26, 2007;          commodity immediately below the de-
                                                                 72 FR 9849, Mar. 6, 2007; 72 FR 43531, Aug. 6,            scription of the commodity.
                                                                 2007]                                                       (3) Single shipment. All commodities
                                                                                                                           moving at the same time from one ex-
                                                                 § 740.3 Shipments of limited value                        porter to one consignee or inter-
                                                                      (LVS).                                               mediate consignee on the same export-
                                                                    (a) Scope. License Exception LVS au-                   ing carrier even though these commod-
                                                                 thorizes the export and reexport in a                     ities will be forwarded to one or more
                                                                 single shipment of eligible commod-                       ultimate      consignees.     Commodities
                                                                 ities as identified by ‘‘LVS - $(value                    being transported in this manner will
                                                                 limit)’’ on the CCL.                                      be treated as a single shipment even if
                                                                    (b) Eligible Destinations. This License                the commodities represent more than
                                                                 Exception is available for all destina-                   one order or are in separate containers.
                                                                 tions in Country Group B (see Supple-                       (d) Additional eligibility requirements
                                                                 ment No. 1 to part 740), provided that                    and restrictions—(1) Eligible orders. To be
                                                                 the net value of the commodities in-                      eligible for this License Exception, or-
                                                                 cluded in the same order and controlled                   ders must meet the following criteria:
                                                                 under the same ECCN entry on the CCL                        (i) orders must not exceed the applicable
                                                                 does not exceed the amount specified                      ‘‘LVS’’ dollar value limits. An order is el-
                                                                 in the LVS paragraph for that entry.                      igible for shipment under LVS when
                                                                    (c) Definitions—(1) order. The term                    the ‘‘net value’’ of the commodities
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                                                                 order as used in this § 740.3 means a                     controlled under the same entry on the

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                                                                 § 740.4                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 CCL does not exceed the amount speci-                     value limits applicable to that entry, the
                                                                 fied in the ‘‘LVS’’ paragraph for that                    order may be shipped under this License Ex-
                                                                 entry. An LVS shipment may include                        ception.
                                                                 more than one eligible order.                               (4) Prohibition against evasion of li-
                                                                   (ii) orders may not be split to meet the                cense requirements. Any activity involv-
                                                                 applicable LVS dollar limits. An order                    ing the use of this License Exception to
                                                                 that exceeds the applicable LVS dollar                    evade license requirements is prohib-
                                                                 value limit may not be misrepresented                     ited. Such devices include, but are not
                                                                 as two or more orders, or split among                     limited to, the splitting or structuring
                                                                 two or more shipments, to give the ap-                    of orders to meet applicable LVS dollar
                                                                 pearance of meeting the applicable                        value limits, as prohibited by para-
                                                                 LVS dollar value limit. However an                        graphs (d)(1) (ii) and (iii) of this sec-
                                                                 order that meets all the LVS eligibility
                                                                                                                           tion.
                                                                 requirements, including the applicable
                                                                 LVS dollar value limit, may be split                        (5) Exports of encryption items. For
                                                                 among two or more shipments.                              components or spare parts controlled
                                                                   (iii) orders must be legitimate. Export-                for ‘‘EI’’ reasons under ECCN 5A002, ex-
                                                                 ers and consignees may not, either col-                   ports under this License Exception
                                                                 lectively or individually, structure or                   must be destined to support an item
                                                                 adjust orders to meet the applicable                      previously authorized for export.
                                                                 LVS dollar value limits.                                    (e) Reexports. Commodities may be
                                                                   (2) Restriction on annual value of LVS                  reexported under this License Excep-
                                                                 orders. The total value of exports per                    tion, provided that they could be ex-
                                                                 calendar year to the same ultimate or                     ported from the United States to the
                                                                 intermediate consignee of commodities                     new country of destination under LVS.
                                                                 classified under a single ECCN may not                      (f) Reporting requirements. See § 743.1 of
                                                                 exceed 12 times the LVS value limit for                   the EAR for reporting requirements for
                                                                 that ECCN; however, there is no re-                       exports of certain commodities under
                                                                 striction on the number of shipments                      License Exception LVS.
                                                                 provided that value is not exceeded.
                                                                 This annual value limit applies to ship-                  [61 FR 64274, Dec. 4, 1996, as amended at 63
                                                                                                                           FR 2456, Jan. 15, 1998; 63 FR 50520, Sept. 22,
                                                                 ments to the same ultimate consignee                      1998]
                                                                 even though the shipments are made
                                                                 through more than one intermediate                        § 740.4 Shipments to Country Group B
                                                                 consignee. There is no restriction on                         countries (GBS).
                                                                 the number of orders that may be in-
                                                                 cluded in a shipment, except that the                       License Exception GBS authorizes
                                                                 annual value limit per ECCN must not                      exports and reexports to Country
                                                                 be exceeded.                                              Group B (see Supplement No. 1 to part
                                                                   (3) orders where two or more LVS dollar                 740) of those commodities where the
                                                                 value limits apply. An order may include                  Commerce Country Chart (Supplement
                                                                 commodities that are controlled under                     No. 1 to part 738 of the EAR) indicates
                                                                 more than one entry on the CCL. In                        a license requirement to the ultimate
                                                                 this case, the net value of the entire                    destination for national security rea-
                                                                 order may exceed the LVS dollar value                     sons only and identified by ‘‘GBS—
                                                                 for any single entry on the CCL. How-                     Yes’’ on the CCL. See § 743.1 of the EAR
                                                                 ever, the net value of the commodities                    for reporting requirements for exports
                                                                 controlled under each ECCN entry                          of certain commodities under License
                                                                 shall not exceed the LVS dollar value                     Exception GBS.
                                                                 limit specified for that entry.                           [63 FR 2456, Jan. 15, 1998, as amended at 69
                                                                   Example to paragraph (d)(3): An order in-               FR 5690, Feb. 6, 2004]
                                                                 cludes commodities valued at $8,000. The
                                                                 order consists of commodities controlled                  § 740.5     Civil End-users (CIV).
                                                                 under two ECCN entries, each having an LVS                  (a) Scope. License Exception CIV au-
                                                                 value limit of $5000. Commodities in the
                                                                                                                           thorizes exports and reexports of items
                                                                 order controlled under one ECCN are valued
                                                                 at $3,500 while those controlled under the                on the Commerce Control List (CCL)
                                                                 other ECCN are valued at $4,500. Since the                (Supplement No. 1 to part 774 of the
                                                                 net value of the commodities controlled                   EAR) that have a license requirement
ebenthall on PRODPC61 with CFR




                                                                 under each entry falls within the LVS dollar              to the ultimate destination pursuant

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.6

                                                                 to the Commerce Country Chart (Sup-                         (3) Action by BIS. Within nine busi-
                                                                 plement No. 1 to part 738 of the EAR)                     ness days of the registration of the
                                                                 for NS reasons only; and identified by                    FNR request, BIS will refer the FNR
                                                                 ‘‘CIV—Yes’’ in the License Exception                      request electronically, along with all
                                                                 section of the Export Control Classi-                     necessary documentation for inter-
                                                                 fication Number (ECCN), provided the                      agency review, or if necessary return
                                                                 items are destined to civil end-users                     the FNR request without action (e.g., if
                                                                 for civil end-uses in Country Group D:1,                  the information provided is incom-
                                                                 except North Korea (Supplement No. 1                      plete). Processing time starts at the
                                                                 to part 740 of this part).                                point at which the notification is reg-
                                                                    (b) Restrictions. (1) Restricted end-                  istered into BIS’s electronic system.
                                                                 users and end-uses. You may not use                         (4) Review by other departments or
                                                                 CIV if you ‘‘know’’ the item will be or                   agencies. The Departments of Defense,
                                                                 is intended to be exported, reexported,                   State, Energy, and other agencies, as
                                                                 or transferred within country to mili-                    appropriate, may review the FNR re-
                                                                 tary uses or military end-users. Such                     quest. Within 30 calendar days of re-
                                                                 exports, reexports, and transfers will                    ceipt of the BIS referral, the reviewing
                                                                 continue to require a license. In addi-                   agency will provide BIS with a rec-
                                                                 tion to conventional military activi-                     ommendation either to approve or deny
                                                                 ties, military uses include any pro-                      the FNR request. A reviewing agency
                                                                 liferation activities described and pro-                  that fails to provide a recommendation
                                                                 hibited by part 744 of the EAR.                           within 30 days shall be deemed to have
                                                                    (2) Visa Status. Deemed exports under                  no objection to the final decision of
                                                                 License Exception CIV are not author-                     BIS.
                                                                 ized to foreign nationals in an expired                     (5) Action on the FNR Request. After
                                                                 visa status. It is the responsibility of                  the interagency review period, BIS will
                                                                 the exporter to ensure that, in the case                  promptly notify the applicant regard-
                                                                 of deemed exports, the foreign national                   ing the FNR request, i.e., whether the
                                                                 maintains a valid U.S. visa, if required                  FNR request is approved, denied, or
                                                                 to hold a visa from the United States.                    more time is needed to consider the re-
                                                                    (c) Reporting Requirement. See § 743.1                 quest.
                                                                 of the EAR for reporting requirements
                                                                 for exports of certain items under this                   [69 FR 64493, Nov. 5, 2004]
                                                                 License Exception.
                                                                                                                           § 740.6 Technology and software under
                                                                    (d) Foreign National Review (FNR) re-                      restriction (TSR).
                                                                 quirement for deemed exports. (1) Submis-
                                                                 sion requirement. Prior to disclosing                       (a) Scope. License Exception TSR per-
                                                                 eligible technology to a foreign na-                      mits exports and reexports of tech-
                                                                 tional under this License Exception,                      nology and software where the Com-
                                                                 you must submit a Foreign National                        merce Country Chart (Supplement No.
                                                                 Review (FNR) request to BIS, as re-                       1 to part 738 of the EAR) indicates a li-
                                                                 quired under § 748.8(s) of the EAR. Your                  cense requirement to the ultimate des-
                                                                 FNR request must include information                      tination for national security reasons
                                                                 about the foreign national required                       only and identified by ‘‘TSR—Yes’’ in
                                                                 under § 748.8(t) of the EAR and set forth                 entries on the CCL, provided the soft-
                                                                 in Supplement No. 2 of part 748 of the                    ware or technology is destined to Coun-
                                                                 EAR.                                                      try Group B. (See Supplement No. 1 to
                                                                    (2) Confirmation of eligibility. You may               part 740.) A written assurance is re-
                                                                 not use License Exception CIV until                       quired from the consignee before ex-
                                                                 you have obtained confirmation of eli-                    porting or reexporting under this Li-
                                                                 gibility by calling the System for                        cense Exception.
                                                                 Tracking Export License Applications                        (1) Required assurance for export of
                                                                 (STELA), see § 750.5 for how to use                       technology. You may not export or re-
                                                                 STELA, or electronically from the                         export technology under this License
                                                                 Simplified Network Application Proce-                     Exception until you have received from
                                                                 dure (SNAP), see http://www.bis.doc.gov/                  the importer a written assurance that,
                                                                 SNAP/index.htm for more information                       without a BIS license or License Ex-
ebenthall on PRODPC61 with CFR




                                                                 about SNAP.                                               ception, the importer will not:

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                                                                 § 740.7                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                   (i) Reexport or release the tech-                         (4) Other License Exceptions. The re-
                                                                 nology to a national of a country in                      quirements in this License Exception
                                                                 Country Groups D:1 or E:2; or                             do not apply to the export of tech-
                                                                   (ii) Export to Country Groups D:1 or                    nology or software under other License
                                                                 E:2 the direct product of the tech-                       Exceptions, or to the export of tech-
                                                                 nology, if such foreign produced direct                   nology or software included in an ap-
                                                                 product is subject to national security                   plication for the foreign filing of a pat-
                                                                 controls as identified on the CCL (See                    ent, provided the filing is in accord-
                                                                 General Prohibition Three, § 736.2(b)(3)                  ance with the regulations of the U.S.
                                                                 of the EAR); or                                           Patent Office.
                                                                   (iii) If the direct product of the tech-                  (b) Reporting requirements. See § 743.1
                                                                 nology is a complete plant or any                         of the EAR for reporting requirements
                                                                 major component of a plant, export to                     for exports of certain items under Li-
                                                                                                                           cense Exception TSR. Note that re-
                                                                 Country Groups D:1 or E:2 the direct
                                                                                                                           ports are not required for release of
                                                                 product of the plant or major compo-
                                                                                                                           technology or source code subject to
                                                                 nent thereof, if such foreign produced
                                                                                                                           the EAR to foreign nationals in the
                                                                 direct product is subject to national se-
                                                                                                                           U.S. under the provisions of License
                                                                 curity controls as identified on the
                                                                                                                           Exception TSR.
                                                                 CCL or is subject to State Department
                                                                 controls under the U.S. Munitions List                    [61 FR 64275, Dec. 4, 1996, as amended at 63
                                                                 (22 CFR part 121).                                        FR 50520, Sept. 22, 1998; 63 FR 55019, Oct. 14,
                                                                                                                           1998; 69 FR 5690, Feb. 6, 2004]
                                                                   (2) Required assurance for export of
                                                                 software. You may not export or reex-                     § 740.7 Computers (APP).
                                                                 port software under this License Ex-
                                                                                                                              (a) Scope. (1) Commodities. License
                                                                 ception until you have received from
                                                                                                                           Exception APP authorizes exports and
                                                                 the importer a written assurance that,
                                                                                                                           reexports of computers, including
                                                                 without a BIS license or License Ex-
                                                                                                                           ‘‘electronic assemblies’’ and specially
                                                                 ception, the importer will neither:
                                                                                                                           designed components therefor con-
                                                                   (i) Reexport or release the software                    trolled by ECCN 4A003, except ECCN
                                                                 or the source code for the software to a                  4A003.e (equipment performing analog-
                                                                 national of a country in Country                          to-digital conversions exceeding the
                                                                 Groups D:1 or E:2; nor                                    limits in ECCN 3A001.a.5.a), exported or
                                                                   (ii) Export to Country Groups D:1 or                    reexported separately or as part of a
                                                                 E:2 the direct product of the software,                   system for consumption in Computer
                                                                 if such foreign produced direct product                   Tier countries as provided by this sec-
                                                                 is subject to national security controls                  tion. When evaluating your computer
                                                                 as identified on the CCL. (See General                    to determine License Exception APP
                                                                 Prohibition Three, § 736.2(b)(3) of the                   eligibility, use the APP parameter to
                                                                 EAR).                                                     the exclusion of other technical param-
                                                                   (3) Form of written assurance. The re-                  eters in ECCN 4A003.
                                                                 quired assurance may be made in the                          (2) Technology and software. License
                                                                 form of a letter or any other written                     Exception APP authorizes exports of
                                                                 communication from the importer, in-                      technology and software controlled by
                                                                 cluding communications via facsimile,                     ECCNs 4D001 and 4E001 specially de-
                                                                 or the assurance may be incorporated                      signed or modified for the ‘‘develop-
                                                                 into a licensing agreement that specifi-                  ment’’, ‘‘production’’, or ‘‘use’’ of com-
                                                                 cally includes the assurances. An as-                     puters, including ‘‘electronic assem-
                                                                 surance included in a licensing agree-                    blies’’ and specially designed compo-
                                                                 ment is acceptable only if the agree-                     nents therefor classified in ECCN
                                                                 ment specifies that the assurance will                    4A003, except ECCN 4A003.e (equipment
                                                                 be honored even after the expiration                      performing analog-to-digital conver-
                                                                 date of the licensing agreement. If such                  sions exceeding the limits in ECCN
                                                                 a written assurance is not received, Li-                  3A001.a.5.a), to Computer Tier coun-
                                                                 cense Exception TSR is not applicable                     tries as provided by this section.
                                                                 and a license is required. The license                       (b) Restrictions. (1) Related equipment
                                                                 application must include a statement                      controlled under ECCN 4A003.g may
                                                                 explaining why assurances could not be                    not be exported or reexported under
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                                                                 obtained.                                                 this License Exception when exported

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.7

                                                                 or reexported separately from eligible                    valid U.S. visa, if required to hold a
                                                                 computers authorized under this Li-                       visa from the United States.
                                                                 cense Exception.                                            (c) Computer Tier 1 destinations. (1) El-
                                                                    (2) Access and release restrictions. (i)               igible destinations. The destinations
                                                                 Computers and software. Computers and                     that are eligible to receive exports and
                                                                 software eligible for License Exception                   reexports under paragraph (c) of this
                                                                 APP may not be accessed either phys-                      section include: Antigua and Barbuda,
                                                                 ically or computationally by nationals                    Argentina, Aruba, Australia, Austria,
                                                                 of Cuba, Iran, North Korea, Sudan, or                     Bahamas (The), Bangladesh, Barbados,
                                                                 Syria, except that commercial con-                        Belgium, Belize, Benin, Bhutan, Bo-
                                                                 signees described in Supplement No. 3                     livia, Botswana, Brazil, Brunei, Bul-
                                                                 to part 742 of the EAR are prohibited                     garia, Burkina Faso, Burundi, Cam-
                                                                 only from giving such nationals user-                     eroon, Cape Verde, Central African Re-
                                                                 accessible programmability.                               public, Chad, Chile, Colombia, Congo
                                                                    (ii) Technology and source code. Tech-                 (Democratic Republic of the), Congo
                                                                 nology and source code eligible for Li-                   (Republic of the), Costa Rica, Cote
                                                                 cense Exception APP may not be re-                        d’Ivoire, Cyprus, Czech Republic, Den-
                                                                 leased to nationals of Cuba, Iran, North                  mark, Dominica, Dominican Republic,
                                                                 Korea, Sudan, or Syria.                                   East Timor, Ecuador, El Salvador,
                                                                    (3) Computers and software eligible                    Equatorial Guinea, Eritrea, Estonia,
                                                                 for License Exception APP may not be                      Ethiopia, Fiji, Finland, France, Gabon,
                                                                 reexported or transferred (in country)                    Gambia      (The),   Germany,      Ghana,
                                                                 without prior authorization from BIS,                     Greece, Grenada, Guatemala, Guinea,
                                                                 i.e., a license, a permissive reexport,                   Guinea-Bissau, Guyana, Haiti, Hon-
                                                                 another License Exception, or ‘‘No Li-                    duras, Hong Kong, Hungary, Iceland,
                                                                 cense Required’’. This restriction must                   Indonesia, Ireland, Italy, Jamaica,
                                                                 be conveyed to the consignee, via the                     Japan, Kenya, Kiribati, Korea (Repub-
                                                                 Destination Control Statement, see
                                                                                                                           lic of), Latvia, Lesotho, Liberia, Liech-
                                                                 § 758.6 of the EAR. Additionally, the
                                                                                                                           tenstein,     Lithuania,    Luxembourg,
                                                                 end-use and end-user restrictions in
                                                                                                                           Madagascar,        Malawi,      Malaysia,
                                                                 paragraph (b)(5) of this section must be
                                                                                                                           Maldives, Mali, Malta, Marshall Is-
                                                                 conveyed to any consignee in Computer
                                                                                                                           lands, Mauritius, Mexico, Micronesia
                                                                 Tier 3.
                                                                                                                           (Federated States of), Monaco, Mozam-
                                                                    (4) You may not use this License Ex-
                                                                                                                           bique, Namibia, Nauru, Nepal, Nether-
                                                                 ception to export or reexport items
                                                                                                                           lands, Netherlands Antilles, New Zea-
                                                                 that you know will be used to enhance
                                                                                                                           land, Nicaragua, Niger, Nigeria, Nor-
                                                                 the APP beyond the eligibility limit
                                                                 allowed to your country of destination.                   way, Palau, Panama, Papua New Guin-
                                                                                                                           ea, Paraguay, Peru, Philippines, Po-
                                                                    (5) License Exception APP does not
                                                                                                                           land, Portugal, Romania, Rwanda, St.
                                                                 authorize exports and reexports for nu-
                                                                                                                           Kitts & Nevis, St. Lucia, St. Vincent
                                                                 clear, chemical, biological, or missile
                                                                 end-users and end-uses subject to li-                     and the Grenadines, Sao Tome & Prin-
                                                                 cense requirements under § 744.2, § 744.3,                cipe, Samoa, San Marino, Senegal,
                                                                 § 744.4, and § 744.5 of the EAR. Such ex-                 Seychelles, Sierra Leone, Singapore,
                                                                 ports and reexports will continue to re-                  Slovakia, Slovenia, Solomon Islands,
                                                                 quire a license and will be considered                    Somalia, South Africa, Spain, Sri
                                                                 on a case-by-case basis. Reexports and                    Lanka, Surinam, Swaziland, Sweden,
                                                                 transfers (in country) to these end-                      Switzerland, Taiwan, Tanzania, Togo,
                                                                 users and end-uses in eligible countries                  Tonga, Thailand, Trinidad and Tobago,
                                                                 are strictly prohibited without prior                     Turkey, Tuvalu, Uganda, United King-
                                                                 authorization.                                            dom, Uruguay, Vatican City, Ven-
                                                                    (6) Foreign nationals in an expired                    ezuela, Western Sahara, Zambia, and
                                                                 visa status are not eligible to receive                   Zimbabwe.
                                                                 deemed exports of technology or source                      (2) Eligible commodities. All com-
                                                                 code under this License Exception. It is                  puters, including electronic assemblies
                                                                 the responsibility of the exporter to en-                 and specially designed components
                                                                 sure that, in the case of deemed ex-                      therefore are eligible for export or re-
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                                                                 ports, the foreign national maintains a                   export under License Exception APP to

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                                                                 § 740.7                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 Tier 1 destinations, subject to the re-                     (3) Eligible technology and source
                                                                 strictions in paragraph (b) of this sec-                  code. (i) ‘‘Development,’’ and ‘‘produc-
                                                                 tion.                                                     tion’’ technology and source code de-
                                                                    (3) Eligible technology and software.                  scribed in paragraph (a)(2) of this sec-
                                                                 (i) Technology and software described                     tion for computers with a APP less
                                                                 in paragraph (a)(2) of this section for                   than or equal to 0.1 Weighted
                                                                 computers of unlimited APP are eligi-                     TeraFLOPS (WT) are eligible for
                                                                 ble for export or reexport under Li-                      deemed exports under License Excep-
                                                                 cense Exception APP to: Australia,                        tion APP to foreign nationals of Tier 3
                                                                 Austria, Belgium, Canada, Denmark,                        destinations as described in paragraph
                                                                 Finland, France, Germany, Greece, Ire-                    (d)(1) of this section, subject to the re-
                                                                 land, Italy, Japan, Luxembourg, Neth-                     strictions in paragraph (b) and the pro-
                                                                 erlands, New Zealand, Norway, Por-                        visions of paragraph (d)(4) of this sec-
                                                                 tugal, Spain, Sweden, Switzerland,                        tion.
                                                                 Turkey, or the United Kingdom; and                          (ii) ‘‘Use’’ technology and source code
                                                                    (ii) ‘‘Development’’ and ‘‘production’’                described in paragraph (a)(2) of this
                                                                 technology and source code described                      section for computers with an APP less
                                                                 in paragraph (a)(2) of this section for                   than or equal to 0.75 WT are eligible for
                                                                 computers with a APP less than or                         deemed exports under License Excep-
                                                                 equal to 0.1 Weighted TeraFLOPS (WT)                      tion APP to foreign nationals of Tier 3
                                                                 are eligible for deemed exports under                     destinations as described in paragraph
                                                                 License Exception APP to foreign na-                      (d)(1) of this section, subject to the re-
                                                                 tionals of Tier 1 destinations, other                     strictions in paragraph (b) and the pro-
                                                                 than the destinations that are listed in                  visions of paragraph (d)(4) of this sec-
                                                                 paragraph (c)(3)(i) of this section, sub-                 tion.
                                                                 ject to the restrictions in paragraph (b)                   (4) Foreign National Review (FNR)
                                                                 of this section.                                          requirement for deemed exports. (i)
                                                                    (iii) ‘‘Use’’ technology and source                    Submission requirement. Prior to dis-
                                                                 code described in paragraph (a)(2) of                     closing eligible technology or source
                                                                 this section for computers with a APP                     code to a foreign national of a Com-
                                                                 less than or equal to 0.75 WT are eligi-                  puter Tier 3 country that is not also a
                                                                 ble for deemed exports under License                      country listed in Country Group B in
                                                                 Exception APP to foreign nationals of                     Supplement No. 1 to part 740 of the
                                                                 Tier 1 destinations, other than the des-                  EAR under this License Exception, you
                                                                 tinations that are listed in paragraph                    must submit a Foreign National Re-
                                                                 (c)(3)(i) of this section, subject to the                 view (FNR) request to BIS, as required
                                                                 restrictions in paragraph (b) of this                     under § 748.8(s) of the EAR. Your FNR
                                                                 section.                                                  request must include information
                                                                    (d) Computer Tier 3 destinations. (1) El-              about the foreign national required
                                                                 igible destinations. Eligible destinations                under § 748.8(t) of the EAR and set forth
                                                                 under paragraph (d) of this section are:                  in Supplement No. 2 of part 748 of the
                                                                 Afghanistan, Albania, Algeria, An-                        EAR.
                                                                 dorra, Angola, Armenia, Azerbaijan,                         (ii) Confirmation of eligibility. You
                                                                 Bahrain,        Belarus,     Bosnia       &               may not use License Exception APP,
                                                                 Herzegovina, Burma, Cambodia, China                       until you have obtained confirmation
                                                                 (People’s Republic of), Comoros, Cro-                     of eligibility by calling the System for
                                                                 atia, Djibouti, Egypt, Georgia, India,                    Tracking Export License Applications
                                                                 Iraq, Israel, Jordan, Kazakhstan, Ku-                     (STELA), see § 750.5 for how to use
                                                                 wait, Kyrgyzstan, Laos, Lebanon,                          STELA, or electronically from the
                                                                 Libya, Macau, Macedonia (The Former                       Simplified Network Application Proce-
                                                                 Yugoslav Republic of), Mauritania,                        dure (SNAP), see http://www.bis.doc.gov/
                                                                 Moldova, Mongolia, Montenegro, Mo-                        SNAP/index.htm for more information
                                                                 rocco, Oman, Pakistan, Qatar, Russia,                     about SNAP.
                                                                 Saudi Arabia, Serbia, Tajikistan, Tuni-                     (iii) Action by BIS. Within nine busi-
                                                                 sia, Turkmenistan, Ukraine, United                        ness days of the registration of the
                                                                 Arab Emirates, Uzbekistan, Vanuatu,                       FNR request, BIS will electronically
                                                                 Vietnam, and Yemen.                                       refer the FNR request for interagency
ebenthall on PRODPC61 with CFR




                                                                    (2) Eligible commodities. None.                        review, or if necessary return the FNR

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.9

                                                                 request without action (e.g., if the in-                    (c) Eligible destinations. License Ex-
                                                                 formation provided is incomplete).                        ception KMI is available for all des-
                                                                 Processing time starts at the point at                    tinations, except destinations in Coun-
                                                                 which the notification is registered                      try Group E:1 (see Supplement No. 1 to
                                                                 into BIS’s electronic system.                             this part).
                                                                   (iv) Review by other departments or                       (d) Reporting requirements. (1) You
                                                                 agencies. The Departments of Defense,                     must provide semiannual reports to
                                                                 State, Energy, and other agencies, as                     BIS identifying:
                                                                 appropriate, may review the FNR re-                         (i) Ultimate consignee; specific end-
                                                                 quest. Within 30 calendar days of re-                     user name and address, if available;
                                                                 ceipt of the BIS referral, the reviewing                  and country of ultimate destination;
                                                                 agency will provide BIS with a rec-                       and
                                                                 ommendation either to approve or deny                       (ii) Quantities of each encryption
                                                                 the FNR request. A reviewing agency                       item shipped.
                                                                 that fails to provide a recommendation                      (2) You must submit reports no later
                                                                 within 30 days shall be deemed to have                    than February 1 and no later than Au-
                                                                 no objection to the final decision of                     gust 1 of any given year.
                                                                 BIS.
                                                                                                                           [61 FR 68579, Dec. 30, 1996, as amended at 63
                                                                   (v) Action on the FNR Request. After                    FR 50520, Sept. 22, 1998; 63 FR 72159, Dec. 31,
                                                                 the interagency review period, BIS will                   1998; 65 FR 2496, Jan. 14, 2000; 66 FR 42109,
                                                                 promptly notify the applicant regard-                     Aug. 10, 2001; 70 FR 22249, Apr. 29, 2005]
                                                                 ing the FNR request, i.e., whether the
                                                                 FNR request is approved, denied, or                       § 740.9 Temporary imports, exports,
                                                                 more time is needed to consider the re-                        and reexports (TMP).
                                                                 quest.                                                       This License Exception authorizes
                                                                   (e) Reporting requirements. See § 743.1                 various temporary exports and reex-
                                                                 of the EAR for reporting requirements                     ports; exports and reexports of items
                                                                 of certain items under License Excep-                     temporarily in the United States; and
                                                                 tion APP.                                                 exports and reexports of beta test soft-
                                                                 [71 FR 20883, Apr. 24, 2006, as amended at 71             ware.
                                                                 FR 51717, Aug. 31, 2006; 71 FR 68439, Nov. 27,               (a) Temporary exports and reexports—
                                                                 2006; 72 FR 13441, Mar. 22, 2007; 72 FR 60249,            (1) Scope. You may export and reexport
                                                                 Oct. 24, 2007]                                            commodities and software for tem-
                                                                                                                           porary use abroad (including use in
                                                                 § 740.8 Key management infrastruc-                        international waters) subject to the
                                                                      ture (KMI).
                                                                                                                           conditions and restrictions described in
                                                                    (a) Scope. License Exception KMI au-                   paragraphs (a)(2) through (a)(5) of this
                                                                 thorizes the export and reexport of cer-                  section. U.S. persons, as defined in
                                                                 tain encryption software and equip-                       paragraph (a)(2)(i)(C), may export and
                                                                 ment.                                                     reexport technology for temporary use
                                                                    (b) Eligible commodities and software.                 abroad under paragraph (a)(2)(i) of this
                                                                 (1) Recovery encryption commodities                       section to U.S. persons or their em-
                                                                 and software of any key length con-                       ployees traveling or temporarily as-
                                                                 trolled under ECCNs 5A002 and 5D002                       signed abroad (including use in inter-
                                                                 that have been classified after a tech-                   national waters) subject to the condi-
                                                                 nical review through a classification                     tions and restrictions described in
                                                                 request. Key escrow and key recovery                      paragraphs (a)(2) through (a)(5) of this
                                                                 commodities and software must meet                        section. Paragraph (a) does not author-
                                                                 the criteria identified in Supplement                     ize any new release of technology. Per-
                                                                 No. 4 to part 742 of the EAR.                             sons receiving technology exported or
                                                                    (2) For such classification requests,                  reexported under paragraph (a)(2)(i)
                                                                 indicate ‘‘License Exception KMI’’ in                     must already be authorized to receive
                                                                 block 9 on Form BIS-748P. Submit the                      the same technology in accordance
                                                                 original request to BIS in accordance                     with the EAR (e.g., through a license
                                                                 with § 748.3 of the EAR and send a copy                   or license exception), or, alternatively,
                                                                 of the request to:                                        not require such authorization on ac-
                                                                 Attn: ENC Encryption Request Coordinator,                 count of the technology’s NLR status.
                                                                  9800 Savage Road, Suite 6940, Fort Meade,                Technology exports and reexports au-
ebenthall on PRODPC61 with CFR




                                                                  MD 20755–6000.                                           thorized under this paragraph (a) may

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                                                                 § 740.9                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 be made as actual shipments, trans-                       ports of tools of trade for use by the ex-
                                                                 missions, or releases. Exports and reex-                  porter or employees of the exporter
                                                                 ports of encryption items controlled                      may be made only to destinations
                                                                 under ECCN 5E002 are not permitted                        other than Country Group E:2 or
                                                                 pursuant to this paragraph (a). Items                     Sudan. The tools of trade must remain
                                                                 shipped as temporary exports and reex-                    under the ‘‘effective control’’ (see
                                                                 ports under the provisions of this para-                  § 772.1 of the EAR) of the exporter or
                                                                 graph (a) must be returned to the coun-                   the exporter’s employee. Eligible tools
                                                                 try from which they were exported or                      of trade may include, but are not lim-
                                                                 reexported as soon as practicable but,                    ited to, equipment and software as is
                                                                 except in circumstances described in                      necessary to commission or service
                                                                 this section, no later than one year                      items, provided that the equipment or
                                                                 from the date of export or reexport.                      software is appropriate for this purpose
                                                                 This requirement does not apply if the                    and that all items to be commissioned
                                                                 items are consumed or destroyed in the                    or serviced are of foreign origin, or if
                                                                 normal course of authorized temporary                     subject to the EAR, have been lawfully
                                                                 use abroad or an extension or other dis-                  exported or reexported. For exports
                                                                 position is permitted by the EAR or in                    and reexports by U.S. persons to U.S.
                                                                 writing by BIS.                                           persons or their employees traveling or
                                                                   (i) Additional requirement for return or                temporarily assigned abroad, eligible
                                                                 disposal of technology. Technology                        tools of trade may also include, but are
                                                                 shipped or transmitted as a temporary                     not limited to, technology as is nec-
                                                                 export or reexport under the provisions                   essary to commission or service items,
                                                                 of this paragraph (a)(2)(i)(A) that exists                provided that all items to be commis-
                                                                 in a format that could facilitate a sub-                  sioned or serviced either are of foreign
                                                                 sequent release of the technology must                    origin and not subject to the EAR, or,
                                                                 be returned or disposed of in accord-                     if subject to the EAR, have been law-
                                                                 ance with paragraph (a)(4) of this sec-                   fully exported or reexported. Tools of
                                                                 tion. Examples of technology that ex-                     trade may accompany the individual
                                                                 ists in a format that could facilitate a                  departing from the United States or
                                                                 subsequent release of technology in-                      may be shipped unaccompanied within
                                                                 clude the following: technology in a                      one month before the individual’s de-
                                                                 hard copy format (e.g. blue prints,                       parture from the United States, or at
                                                                 manuals); technology in an electronic                     any time after departure.
                                                                 format stored on an electronic device                        (B) Sudan. Exports, but not reex-
                                                                 (e.g. laptop, PDA); or technology                         ports, of tools of trade may be made to
                                                                 stored on removable storage media and                     Sudan by: A non-governmental organi-
                                                                 devices (e.g. CD-ROMS, flash drives,                      zation engaged in activities to relieve
                                                                 video cassettes).                                         human suffering in Sudan and reg-
                                                                   (ii) [RESERVED]                                         istered by the Department of the
                                                                   (2) Eligible items. The following items                 Treasury, Office of Foreign Assets Con-
                                                                 are eligible to be shipped under this                     trol (OFAC) pursuant to 31 CFR 538.521;
                                                                 paragraph (a):                                            or by an organization authorized by
                                                                   (i) Tools of trade. Usual and reason-                   OFAC to take actions, for humani-
                                                                 able kinds and quantities of tools of                     tarian purposes, that otherwise would
                                                                 trade (commodities, software, and                         be prohibited by the Sudanese Sanc-
                                                                 technology) for use in a lawful enter-                    tions Regulations (31 CFR part 538); or
                                                                 prise or undertaking of the exporter.                     by staff or employees of either such
                                                                 For the export or reexport of commod-                     type of organization. The tools of trade
                                                                 ities or software, the transaction must                   must remain under the ‘‘effective con-
                                                                 meet the requirements of paragraph                        trol’’ (see § 772.1 of the EAR) of the ex-
                                                                 (a)(2)(i)(A) or paragraph (a)(2)(i)(B) of                 porter or its employee or staff. The
                                                                 this section. For the export or reexport                  tools of trade must be used in activi-
                                                                 by U.S. persons of technology author-                     ties to relieve human suffering and,
                                                                 ized under this paragraph, the trans-                     when exported, must accompany (ei-
                                                                 action must meet the requirements of                      ther hand carried or as checked bag-
                                                                 paragraph (a)(2)(i)(A) of this section.                   gage) a member of the staff or an em-
                                                                   (A) Destinations other than Country                     ployee of such an organization to
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                                                                 Group E:2 or Sudan. Exports and reex-                     Sudan. In this paragraph (a)(2)(i)(B),

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.9

                                                                 the term ‘‘staff’’ means a person trav-                   that is incorporated to do business in
                                                                 eling to Sudan, at the direction of, or                   the United States).
                                                                 with the knowledge of an organization                       (ii) Kits consisting of replacement parts.
                                                                 registered pursuant to 31 CFR 538.521 or                  Kits consisting of replacement parts
                                                                 an organization authorized by OFAC to                     may be exported or reexported to all
                                                                 take actions, for humanitarian pur-                       destinations, except Country Group E:2
                                                                 poses, that otherwise would be prohib-                    (see Supplement No. 1 to part 740), pro-
                                                                 ited by the Sudanese Sanctions Regula-                    vided that:
                                                                 tions (31 CFR part 538), to assist in the                   (A) The parts would qualify for ship-
                                                                 work of such organization in Sudan                        ment under paragraph (a)(2)(ii)(C) of
                                                                 even if such person is not an employee                    this section if exported as one-for-one
                                                                 of such organization. The only tools of
                                                                                                                           replacements;
                                                                 trade that may be exported to Sudan
                                                                 under this paragraph (a)(2)(i) are:                         (B) The kits remain under effective
                                                                    (1) Personal computers (including                      control of the exporter or an employee
                                                                 laptops) controlled under ECCN 4A994                      of the exporter; and
                                                                 that do not an exceed Adjusted Peak                         (C) All parts in the kit are returned,
                                                                 Performance (APP) of 0.0015 Weighted                      except that one-for-one replacements
                                                                 TeraFLOPS (WT) and ‘‘software’’ con-                      may be made in accordance with the
                                                                 trolled under ECCNs 4D994 or 5D992                        requirements of License Exception
                                                                 that is for the ‘‘use’’ of such computers                 RPL and the defective parts returned
                                                                 and that was loaded onto such com-                        (see ‘‘parts’’, § 740.10(a) of this part).
                                                                 puters prior to export and remains                          (iii) Exhibition and demonstration. You
                                                                 loaded on such computers while in                         may export or reexport under this pro-
                                                                 Sudan;                                                    vision commodities and software for
                                                                    (2) Telecommunications equipment                       exhibition or demonstration in all
                                                                 controlled under ECCN 5A991 and                           countries except countries listed in
                                                                 ‘‘software’’ controlled under ECCN                        Country Group E:1 (see Supplement No.
                                                                 5D992 that is for the ‘‘use’’ of such                     1 to this part) provided that the ex-
                                                                 equipment and that was loaded onto                        porter maintains ownership of the com-
                                                                 that equipment prior to export and                        modities and software while they are
                                                                 that remains loaded on such equipment                     abroad and provided that the exporter,
                                                                 while in Sudan;                                           an employee of the exporter, or the ex-
                                                                    (3) Global positioning system (GPS)                    porter’s designated sales representative
                                                                 or similar satellite receivers controlled                 retains ‘‘effective control’’ over the
                                                                 under ECCN 7A994; and                                     commodities and software while they
                                                                    (4) Parts and components that are
                                                                                                                           are abroad (see part 772 of the EAR for
                                                                 controlled under ECCN 5A992, that are
                                                                                                                           a definition of ‘‘effective control’’). The
                                                                 installed with, or contained in, com-
                                                                                                                           commodities and software may not be
                                                                 puters or telecommunications equip-
                                                                                                                           used for their intended purpose while
                                                                 ment listed in paragraphs (a)(2)(i)(B)(1)
                                                                 and (2) of this section and that remain                   abroad, except to the minimum extent
                                                                 installed with or contained in such                       required for effective demonstration.
                                                                 computers or equipment while in                           The commodities and software may not
                                                                 Sudan.                                                    be exhibited or demonstrated at any
                                                                    (C) For purposes of this paragraph                     one site more than 120 days after in-
                                                                 (a)(2)(i), U.S. person is defined as fol-                 stallation and debugging, unless au-
                                                                 lows: an individual who is a citizen of                   thorized by BIS. However, before or
                                                                 the United States, an individual who is                   after an exhibition or demonstration,
                                                                 a lawful permanent resident as defined                    pending movement to another site, re-
                                                                 by 8 U.S.C. 1101(a)(2) or an individual                   turn to the United States or the for-
                                                                 who is a protected individual as defined                  eign reexporter, or BIS approval for
                                                                 by 8 U.S.C. 1324b(a)(3). U.S. person also                 other disposition, the commodities and
                                                                 means any juridical person organized                      software may be placed in a bonded
                                                                 under the laws of the United States, or                   warehouse or a storage facility pro-
                                                                 any jurisdiction within the United                        vided that the exporter retains effec-
                                                                 States (e.g., corporation, business asso-                 tive control over their disposition. The
                                                                 ciation, partnership, society, trust, or                  export documentation for this type of
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                                                                 any other entity, organization or group                   transaction must show the exporter as

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                                                                 § 740.9                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 ultimate consignee, in care of the per-                      (3) Are removed with the news media
                                                                 son who will have control over the                        personnel at the end of the trip.
                                                                 commodities and software abroad.                             (B) When exporting under this para-
                                                                   (iv) Inspection and calibration. Com-                   graph (a)(2)(viii) from the United
                                                                 modities to be inspected, tested, cali-                   States, the exporter must send a copy
                                                                 brated or repaired abroad may be ex-                      of the packing list or similar identi-
                                                                 ported or reexported to all destinations                  fication of the exported commodities,
                                                                 under this section, except Country                        to: U.S. Department of Commerce, Bu-
                                                                 Group E:2, Sudan or Syria.                                reau of Industry and Security, Office of
                                                                   (v) Containers. Containers for which                    Export Enforcement, Room H4616, 14th
                                                                 another License Exception is not avail-                   Street and Constitution Avenue, N.W.,
                                                                 able and that are necessary for export                    Washington, DC 20230, or any of its
                                                                 of commodities. However, this ‘‘con-                      field offices, specifying the destination
                                                                 tainers’’ provision does not authorize                    and estimated dates of departure and
                                                                 the export of the container’s contents,                   return. The Office of Export Enforce-
                                                                 which, if not exempt from licensing,                      ment (OEE) may spot check returns to
                                                                 must be separately authorized for ex-                     assure that the temporary exports and
                                                                 port under either a License Exception                     reexports provisions of this License Ex-
                                                                 or a license.                                             ception are being used properly.
                                                                   (vi) Broadcast material. (A) Video tape
                                                                                                                              (C) Commodities or software nec-
                                                                 containing program material recorded
                                                                                                                           essary for news-gathering purposes
                                                                 in the country of export to be publicly
                                                                                                                           that accompany news media personnel
                                                                 broadcast in another country.
                                                                                                                           to all other destinations shall be ex-
                                                                   (B) Blank video tape (raw stock) for
                                                                                                                           ported or reexported under paragraph
                                                                 use in recording program material
                                                                                                                           (a)(2)(i), tools of trade, of this section if
                                                                 abroad.
                                                                   (vii) Assembly in Mexico. Commodities                   owned by the news gathering firm, or if
                                                                 to be exported to Mexico under Cus-                       they are personal property of the indi-
                                                                 toms entries that require return to the                   vidual news media personnel. Note that
                                                                 United States after processing, assem-                    paragraphs (a)(2)(i), tools of trade and
                                                                 bly, or incorporation into end products                   (a)(2)(viii), news media, of this section
                                                                 by companies, factories, or facilities                    do not preclude independent ‘‘accred-
                                                                 participating in Mexico’s in-bond in-                     ited’’ contract personnel, who are
                                                                 dustrialization program (Maquiladora),                    under control of news gathering firms
                                                                 provided that all resulting end-prod-                     while on assignment, from utilizing
                                                                 ucts (or the commodities themselves)                      these provisions, provided that the
                                                                 are returned to the United States.                        news gathering firm designate an em-
                                                                   (viii) News media. (A) Commodities                      ployee of the contract firm to be re-
                                                                 necessary for news-gathering purposes                     sponsible for the equipment.)
                                                                 (and software necessary to use such                          (ix) Temporary exports to a U.S. sub-
                                                                 commodities) may accompany ‘‘ac-                          sidiary, affiliate or facility in Country
                                                                 credited’’ news media personnel (i.e.,                    Group B. (A) Components, parts, tools
                                                                 persons with credentials from a news                      or test equipment exported by a U.S.
                                                                 gathering or reporting firm) to Coun-                     person to its subsidiary, affiliate or fa-
                                                                 try Groups D:1 or E:2, or Sudan (see                      cility in a country listed in Country
                                                                 Supplement No. 1 to part 740) if the                      Group B (see Supplement No. 1 to this
                                                                 commodities:                                              part) that is owned or controlled by the
                                                                   (1) Are retained under ‘‘effective con-                 U.S. person, if the components, part,
                                                                 trol’’ of the exporting news gathering                    tool or test equipment is to be used for
                                                                 firm;                                                     manufacture, assembly, testing, pro-
                                                                   (2) Remain in the physical possession                   duction or modification, provided that
                                                                 of the news media personnel. The term                     no components, parts, tools or test
                                                                 physical possession for purposes of this                  equipment or the direct product of
                                                                 paragraph (a)(2)(viii), news media, is                    such components, parts, tools or test
                                                                 defined as maintaining effective meas-                    equipment are transferred or reex-
                                                                 ures to prevent unauthorized access                       ported to a country other than the
                                                                 (e.g., securing equipment in locked fa-                   United States from such subsidiary, af-
                                                                 cilities or hiring security guards to                     filiate or facility without prior author-
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                                                                 protect the equipment); and                               ization by BIS.

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.9

                                                                   (B) For purposes of this paragraph                      indirectly, in any sensitive nuclear ac-
                                                                 (a)(2)(ix), U.S. person is defined as fol-                tivity as described in § 744.2 of the EAR
                                                                 lows: an individual who is a citizen of                   may not be exported or reexported to
                                                                 the United States, an individual who is                   any destination under the temporary
                                                                 a lawful permanent resident as defined                    exports and reexports provisions of this
                                                                 by 8 U.S.C. 1101(a)(2) or an individual                   License Exception.
                                                                 who is a protected individual as defined                    (B)     Exports    and     reexports     of
                                                                 by 8 U.S.C. 1324b(a)(3). U.S. person also                 encryption items controlled under
                                                                 means any juridical person organized                      ECCN 5E002 are not permitted pursuant
                                                                 under the laws of the United States, or                   to this paragraph (a).
                                                                 any jurisdiction within the United
                                                                                                                             (iii) Use or disposition. No item may
                                                                 States (e.g., corporation, business asso-
                                                                 ciation, partnership, society, trust, or                  be exported or reexported under this
                                                                 any other entity, organization or group                   paragraph (a) if:
                                                                 that is incorporated to do business in                      (A) An order to acquire the item has
                                                                 the United States).                                       been received before shipment;
                                                                   (3) Special restrictions. (i) Destinations.               (B) The exporter has prior knowledge
                                                                   (A) No item may be exported or reex-                    that the item will stay abroad beyond
                                                                 ported under paragraph (a) of this sec-                   the terms of this License Exception; or
                                                                 tion to Country Group E:2 (see Supple-                      (C) The item is for lease or rental
                                                                 ment No. 1 to this part) except as per-                   abroad.
                                                                 mitted by paragraph (a)(2)(viii) of this                    (iv) Restrictions specific to the export or
                                                                 section (news media). These destina-                      reexport of technology. The authoriza-
                                                                 tion restrictions apply to temporary                      tion for the export or reexport of tech-
                                                                 exports to and for use on any vessel,                     nology under the tools of trade provi-
                                                                 aircraft or territory under the owner-                    sions of paragraph (a)(2)(i)(A) is subject
                                                                 ship, control, lease, or charter by any                   to the restrictions in this paragraph
                                                                 country in Country Group E:2, or any                      (a)(3)(iv), as described in paragraphs
                                                                 national thereof;
                                                                                                                           (a)(3)(iv)(A),       (a)(3)(iv)(B)       and
                                                                   (B) No item may be exported under
                                                                                                                           (a)(3)(iv)(C).
                                                                 this License Exception to Country
                                                                 Group D:1 (see Supplement No. 1 to                          (A) The authorization for the export
                                                                 part 740) except:                                         or reexport of technology under the
                                                                   (1) Commodities and software ex-                        tools of trade provisions of paragraph
                                                                 ported under paragraph (a)(2)(viii),                      (a)(2)(i)(A) of this section may be used
                                                                 news media, of this section;                              only by U.S. persons, as defined in
                                                                   (2) Items exported under paragraph                      (a)(2)(i)(C), or their employees trav-
                                                                 (a)(2)(i), tools of trade, of this section;               eling or on temporary assignment
                                                                   (3) Commodities exported or reex-                       abroad. The restrictions under this
                                                                 ported as kits consisting of replacement                  paragraph (a)(3)(iv)(A) include the fol-
                                                                 parts, consistent with the requirements                   lowing three additional restrictions:
                                                                 of paragraph (a)(2)(ii) of this section;                    (1) Employees who are not U.S. per-
                                                                 and                                                       sons, as defined in (a)(2)(i)(C), may be
                                                                   (4) Commodities and software ex-                        authorized to receive exports or reex-
                                                                 ported or reexported for exhibition and                   ports of the technology eligible for ex-
                                                                 demonstration in accordance with the                      port or reexport under the tools of
                                                                 requirements of paragraph (a)(2)(iii) of                  trade      provisions      of     paragraph
                                                                 this section.                                             (a)(2)(i)(A), only if such employees are
                                                                   (C) These destination restrictions                      already eligible to receive such tech-
                                                                 apply to temporary exports to and for                     nology through a current license or a
                                                                 use on any vessel, aircraft or territory
                                                                                                                           license exception or on account of NLR
                                                                 under ownership, control, lease, or
                                                                                                                           status;
                                                                 charter by any country in Country
                                                                 Group D:1 or E:2, or any national there-                    (2) A U.S. employer of individuals
                                                                 of. (See Supplement No. 1 to part 740.)                   who are not U.S. persons, as defined in
                                                                   (ii) Ineligible items. (A) Items that will              (a)(2)(i)(C), must demonstrate and doc-
                                                                 be used outside of Country Group A:1                      ument for recordkeeping purposes the
                                                                 (see Supplement No. 1 to part 740), Ice-                  reason that the technology to be au-
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                                                                 land, or New Zealand, either directly or                  thorized for export or reexport under

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                                                                 § 740.9                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                 the tools of trade provisions of para-                    abroad, except as permitted by this or
                                                                 graph (a)(2)(i)(A) is needed by such em-                  other applicable provision of the EAR,
                                                                 ployees in their temporary business ac-                   the exporter must request authoriza-
                                                                 tivities abroad on behalf of the U.S.                     tion by submitting a license applica-
                                                                 person employer, prior to using the                       tion to BIS at the address listed in part
                                                                 tools of trade provisions of paragraph                    748 of the EAR. (See part 748 of the
                                                                 (a)(2)(i)(A) of this section. This docu-                  EAR for more information on license
                                                                 mentation must be created and main-                       applications.) The request should com-
                                                                 tained in accordance with the record-                     ply with all applicable provisions of
                                                                 keeping requirements of part 762 of the                   the EAR covering export directly from
                                                                 EAR; and                                                  the United States to the proposed des-
                                                                   (3) The U.S. person must retain su-                     tination. The request must also be sup-
                                                                 pervision over the technology that has                    ported by any documents that would be
                                                                 been authorized for export or reexport                    required in support of an application
                                                                 under these or other provisions.                          for export license for shipment of the
                                                                   (B) The exporting or reexporting                        same items directly from the United
                                                                 party and the recipient of the tech-                      States to the proposed destination. BIS
                                                                 nology must take security precautions                     will advise the exporter of its decision.
                                                                 to protect against unauthorized release                     (ii) Use of a license. An outstanding li-
                                                                 of the technology while the technology                    cense may also be used to dispose of
                                                                 is being shipped or transmitted and                       items covered by the provisions of this
                                                                 used overseas. Examples of security                       paragraph (a), provided that the out-
                                                                 precautions to help prevent unauthor-                     standing license authorizes direct ship-
                                                                 ized access include the following:                        ment of the same items to the same
                                                                   (1) Use of secure connections, such as                  new ultimate consignee in the new
                                                                 Virtual Private Network connections,                      country of destination.
                                                                 when accessing IT networks for e-mail                       (iii) Authorization to retain item abroad
                                                                 and other business activities that in-                    beyond one year. If the exporter wishes
                                                                 volve the transmission and use of the                     to retain an item abroad beyond the 12
                                                                 technology authorized under this li-                      months authorized by paragraph (a) of
                                                                 cense exception;                                          this section, the exporter must request
                                                                   (2) Use of password systems on elec-                    authorization by submitting Form
                                                                 tronic devices that will store the tech-                  BIS–748P, Multipurpose Application, 90
                                                                 nology authorized under this license                      days prior to the expiration of the 12
                                                                 exception; and                                            month period. The request must be
                                                                   (3) Use of personal firewalls on elec-                  sent to BIS at the address listed in part
                                                                 tronic devices that will store the tech-                  748 of the EAR and should include the
                                                                 nology authorized under this license                      name and address of the exporter, the
                                                                 exception.                                                date the items were exported, a brief
                                                                   (C) Technology authorized under                         product description, and the justifica-
                                                                 these provisions may not be used for                      tion for the extension. If BIS approves
                                                                 foreign production purposes or for                        the extension request, the exporter will
                                                                 technical assistance unless authorized                    receive authorization for a one-time
                                                                 by BIS.                                                   extension not to exceed six months.
                                                                   (4) Return or disposal of items. All                    BIS normally will not allow an exten-
                                                                 items exported or reexported under                        sion for items that have been abroad
                                                                 these provisions must, if not consumed                    more than 12 months, nor will a second
                                                                 or destroyed in the normal course of                      six month extension be authorized.
                                                                 authorized temporary use abroad, be                       Any request for retaining the items
                                                                 returned as soon as practicable but no                    abroad for a period exceeding 18
                                                                 later than one year after the date of                     months must be made in accordance
                                                                 export or reexport, to the United                         with the requirements of paragraph
                                                                 States or other country from which the                    (a)(4)(i) of this section.
                                                                 items were so exported or reexported,                       (5) Reexports. (i) Commodities and
                                                                 or shall be disposed of or retained in                    software lawfully exported from the
                                                                 one of the following ways:                                United States may be reexported to a
                                                                   (i) Permanent export or reexport. If the                new country or countries of destina-
                                                                 exporter or the reexporter wishes to                      tion other than Sudan or Country
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                                                                 sell or otherwise dispose of the items                    Group E:2 under provisions of this

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.9

                                                                 paragraph (a) provided its terms and                      ons reasons or missile technology rea-
                                                                 conditions are met and the commod-                        sons may not be exported to Country
                                                                 ities and software are returned to the                    Group D:1, 2, 3, or 4 (see Supplement
                                                                 country from which the reexport oc-                       No. 1 to part 740), respectively, under
                                                                 curred.                                                   this paragraph (b)(1).
                                                                   (ii) Technology legally exported from                     (ii) Items may not be exported to
                                                                 the United States may be reexported                       Country Group E:2 or Sudan under this
                                                                 by a U.S. person to U.S. persons and                      section.
                                                                 their employees in a new country or                         (iii) The following may not be ex-
                                                                 countries of destination other than                       ported in transit from the United
                                                                 Sudan or Country Group E:2 under pro-                     States under this paragraph (b)(1):
                                                                 visions of this paragraph (a)(2)(i)(A)                      (A) Commodities shipped to the
                                                                 provided its terms and conditions are                     United States under an International
                                                                 met and the technology is returned to                     Import Certificate, Form BIS–645P;
                                                                 the country from which the reexport                         (B) Chemicals controlled under ECCN
                                                                 occurred.                                                 1C350; or
                                                                   (b) Exports of items temporarily in the                   (C) Horses for export by sea (refer to
                                                                 United States: Scope. The provisions of                   short supply controls in part 754 of the
                                                                 this paragraph (b) describe the condi-                    EAR).
                                                                 tions for exporting foreign-origin items                    (iv) The provisions of paragraph (b)(1)
                                                                 temporarily in the United States. The                     apply to all shipments from Canada
                                                                 provisions include the export of items                    moving in transit through the United
                                                                 moving in transit through the United                      States to any foreign destination, re-
                                                                 States, imported for display at a U.S.                    gardless of the nature of the commod-
                                                                 exhibition or trade fair, returned be-                    ities or software or their origin. For
                                                                 cause unwanted, or returned because                       such shipments the customs office at
                                                                 refused entry.                                            the U.S. port of export will require a
                                                                   NOTE 1 TO PARAGRAPH (b) OF THIS SECTION:                copy of Form B–13, Canadian Customs
                                                                 A commodity withdrawn from a bonded                       Entry, certified or stamped by Cana-
                                                                 warehouse in the United States under a                    dian customs authorities, except where
                                                                 ‘‘withdrawal for export’’ customs entry is                the shipment is valued at less than
                                                                 considered as ‘‘moving in transit’’. It is not            $50.00. (In transit shipments origi-
                                                                 considered as ‘‘moving in transit’’ if it is
                                                                 withdrawn from a bonded warehouse under                   nating in Canada that are exempt from
                                                                 any other type of customs entry or if its                 U.S. licensing, or made under a U.S. li-
                                                                 transit has been broken for a processing op-              cense or other applicable U.S. License
                                                                 eration, regardless of the type of customs                Exception do not require this form.)
                                                                 entry.                                                    The commodity or software descrip-
                                                                   NOTE 2 TO PARAGRAPH (b) OF THIS SECTION:                tion, quantity, ultimate consignee,
                                                                 Items shipped on board a vessel or aircraft               country of ultimate destination, and
                                                                 and passing through the United States from
                                                                 one foreign country to another may be ex-
                                                                                                                           all other pertinent details of the ship-
                                                                 ported without a license provided that (a)                ment must be the same on a required
                                                                 while passing in transit through the United               Form B–13, as on Commerce Form 7513,
                                                                 States, they have not been unladen from the               or when Form 7513 is not required,
                                                                 vessel or aircraft on which they entered, and             must be the same as on Customs Form
                                                                 (b) they are not originally manifested to the             7512. When there is a material dif-
                                                                 United States.)                                           ference, a corrected Form B–13 author-
                                                                   (1) Items moving in transit through the                 izing the shipment is required.
                                                                 United States. Subject to the following                     (2) Items imported for display at U.S.
                                                                 conditions, the provisions of paragraph                   exhibitions or trade fairs. Subject to the
                                                                 (b)(1) of this section authorize export of                following conditions, the provisions of
                                                                 items moving in transit through the                       this paragraph (b)(2) authorize the ex-
                                                                 United States under a Transportation                      port of items that were imported into
                                                                 and Exportation (T.& E.) customs                          the United States for display at an ex-
                                                                 entry or an Immediate Exportation                         hibition or trade fair and were either
                                                                 (I.E.) customs entry made at a U.S.                       entered under bond or permitted tem-
                                                                 Customs Office.                                           porary free import under bond pro-
                                                                   (i) Items controlled for national secu-                 viding for their export and are being
                                                                 rity reasons, nuclear nonproliferation                    exported in accordance with the terms
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                                                                 reasons, chemical and biological weap-                    of that bond.

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                                                                 § 740.9                                                               15 CFR Ch. VII (1–1–08 Edition)

                                                                   (i) Items may be exported to the                        except Cuba, Iran, and Sudan under the
                                                                 country from which imported into the                      provisions of this paragraph (c).
                                                                 United States. However, items origi-                        (3) Eligible software. All software that
                                                                 nally imported from Cuba may not be                       is controlled by the Commerce Control
                                                                 exported unless the U.S. Government                       List (Supplement No.1 to part 774 of
                                                                 had licensed the import from that                         the EAR), and under Commerce licens-
                                                                 country.                                                  ing jurisdiction, is eligible for export
                                                                   (ii) Items may be exported to any                       and reexport, subject to the restric-
                                                                 destination other than the country                        tions of this paragraph (c). Encryption
                                                                 from which imported except:                               software controlled for ‘‘EI’’ reasons
                                                                   (A) Items imported into the United                      under ECCN 5D002 is eligible for export
                                                                 States under an International Import                      and reexport under this paragraph (c),
                                                                 Certificate;                                              provided that the exporter has sub-
                                                                   (B) Exports to Country Group E:2 or                     mitted the information described in
                                                                 Sudan (see Supplement No. 1 to part                       paragraph (c)(8) of this section by the
                                                                 740); or                                                  time of export. Final encryption prod-
                                                                                                                           ucts produced by the testing consignee
                                                                   (C) Exports to Country Group D:1, 2,
                                                                                                                           are subject to any applicable provisions
                                                                 3, or 4 (see Supplement No. 1 to part
                                                                                                                           in § 742.15(b)(2) of the EAR (for mass
                                                                 740) of items controlled for national se-
                                                                                                                           market encryption commodities and
                                                                 curity reasons, nuclear nonprolifera-
                                                                                                                           software with symmetric key length
                                                                 tion reasons, chemical and biological
                                                                                                                           exceeding 64-bits) or § 740.17 of the EAR
                                                                 weapons reasons or missile technology
                                                                                                                           (License Exception ENC), including re-
                                                                 reasons, respectively.
                                                                                                                           view and reporting requirements.
                                                                   (3) Return of unwanted shipments. A                       (4) Conditions for use. Exports or reex-
                                                                 foreign-origin item may be returned to                    ports of beta test software programs
                                                                 the country from which it was im-                         under the provisions of this paragraph
                                                                 ported if its characteristics and capa-                   (c) must meet all of the following con-
                                                                 bilities have not been enhanced while                     ditions:
                                                                 in the United States. No foreign-origin                     (i) The software producer intends to
                                                                 items may be returned to Cuba.                            market the software to the general
                                                                   (4) Return of shipments refused entry.                  public after completion of the beta
                                                                 Shipments of items refused entry by                       testing, as described in the General
                                                                 the U.S. Customs Service, the Food and                    Software Note (see Supplement 2 to
                                                                 Drug Administration, or other U.S.                        part 774 of the EAR) or the Cryptog-
                                                                 Government agency may be returned                         raphy Note in Category 5, Part 2 (‘‘In-
                                                                 to the country of origin, except to:                      formation Security’’) of the Commerce
                                                                   (i) A destination in Cuba; or                           Control List (see Supplement No.1 to
                                                                   (ii) A destination from which the                       part 774 of the EAR);
                                                                 shipment has been refused entry be-                         (ii) The software producer provides
                                                                 cause of the Foreign Assets Control                       the software to the testing consignee
                                                                 Regulations of the Treasury Depart-                       free-of-charge or at a price that does
                                                                 ment, unless such return is licensed or                   not exceed the cost of reproduction and
                                                                 otherwise authorized by the Treasury                      distribution; and
                                                                 Department, Office of Foreign Assets                        (iii) The software is designed for in-
                                                                 Control (31 CFR part 500).                                stallation by the end-user without fur-
                                                                   (c) Exports of beta test software—(1)                   ther substantial support from the sup-
                                                                 Scope. The provisions of this paragraph                   plier.
                                                                 (c) authorize exports and reexports to                      (5) Importer Statement. Prior to ex-
                                                                 eligible countries of beta test software                  porting or reexporting any eligible
                                                                 intended for distribution to the general                  software under this paragraph (c), the
                                                                 public.                                                   exporter or reexporter must obtain the
                                                                   (2) Eligible countries. Encryption                      following statement from the testing
                                                                 software controlled under ECCN 5D002                      consignee, which may be included in a
                                                                 is not eligible for export or reexport to                 contract, non-disclosure agreement, or
                                                                 a country in Country Group E:1 under                      other document that identifies the im-
                                                                 the provisions of this paragraph (c). All                 porter, the software to be exported, the
                                                                 other beta test software is eligible for                  country of destination, and the testing
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                                                                 export or reexport to all destinations,                   consignee.

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.10
                                                                   ‘‘We certify that this beta test software                 (a) Parts—(1) Scope. The provisions of
                                                                 will only be used for beta testing purposes,              this paragraph (a) authorize the export
                                                                 and will not be rented, leased, sold, sub-
                                                                                                                           and reexport of one-for-one replace-
                                                                 licensed, assigned, or otherwise transferred.
                                                                 Further, we certify that we will not transfer             ment parts for previously exported
                                                                 or export any product, process, or service                equipment.
                                                                 that is the direct product of the beta test                 (2) One-for-one replacement of parts. (i)
                                                                 software.’’                                               The term replacement parts as used in
                                                                   (6) Use limitations. Only testing con-                  this section means parts needed for the
                                                                 signees that provide the importer                         immediate repair of equipment, includ-
                                                                 statement required by paragraph (c)(5)                    ing replacement of defective or worn
                                                                 of this section may execute any beta                      parts. (It includes subassemblies but
                                                                 test software that was exported or re-                    does not include test instruments or
                                                                 exported to them under the provisions                     operating supplies). (The term sub-
                                                                 of this paragraph (c).                                    assembly means a number of compo-
                                                                   (7) Return or disposal of software. All                 nents assembled to perform a specific
                                                                 beta test software exported must be de-                   function or functions within a com-
                                                                 stroyed abroad or returned to the ex-                     modity. One example would be printed
                                                                 porter within 30 days of the end of the                   circuit boards with components mount-
                                                                 beta test period as defined by the soft-                  ed thereon. This definition does not in-
                                                                 ware producer or, if the software pro-                    clude major subsystems such as those
                                                                 ducer does not define a test period,                      composed of a number of subassem-
                                                                 within 30 days of completion of the                       blies.) Items that improve or change
                                                                 consignee’s role in the test. Among                       the basic design characteristics, e.g., as
                                                                 other methods, this requirement may                       to accuracy, capability, performance or
                                                                 be satisfied by a software module that                    productivity, of the equipment upon
                                                                 will destroy the software and all its                     which they are installed, are not
                                                                 copies at or before the end of the beta                   deemed to be replacement parts. For
                                                                 test period.                                              kits consisting of replacement parts,
                                                                   (8) Notification of beta test encryption                consult § 740.9(a)(2)(ii) of this part.
                                                                 software. For beta test encryption soft-                    (ii) Parts may be exported only to re-
                                                                 ware eligible under this license excep-                   place, on a one-for-one basis, parts con-
                                                                 tion you must, by the time of export or                   tained in commodities that were: le-
                                                                 reexport, submit the information de-                      gally exported from the United States;
                                                                 scribed in paragraphs (a) through (e) of                  legally reexported; or made in a foreign
                                                                 Supplement No. 6 to part 742 of the
                                                                                                                           country incorporating authorized U.S.-
                                                                 EAR      by     e-mail    to     BIS    at
                                                                                                                           origin parts. (For exports or reexports
                                                                 crypt@bis.doc.gov and to the ENC
                                                                                                                           to the installed base in Libya see § 764.7
                                                                 Encryption Request Coordinator at
                                                                                                                           of the EAR). The conditions of the
                                                                 enc@nsa.gov.
                                                                                                                           original U.S. authorization must not
                                                                 [61 FR 64277, Dec. 4, 1996. Redesignated at 61            have been violated. Accordingly, the
                                                                 FR 68579, Dec. 30, 1996, as amended at 61 FR              export of replacement parts may be
                                                                 68580, Dec. 30, 1996; 62 FR 25457, May 9, 1997;
                                                                                                                           made only by the party who originally
                                                                 63 FR 50521, Sept. 22, 1998; 65 FR 38150, June
                                                                 19, 2000; 65 FR 42568, July 10, 2000; 65 FR 62604,        exported or reexported the commodity
                                                                 Oct. 19, 2000; 66 FR 42109, Aug. 10, 2001; 67 FR          to be repaired, or by a party that has
                                                                 38861, June 6, 2002; 68 FR 35784, June 17, 2003;          confirmed the appropriate authority
                                                                 69 FR 5690, Feb. 6, 2004; 69 FR 23628, Apr. 29,           for the original transaction.
                                                                 2004; 69 FR 46075, July 30, 2004; 69 FR 71359,              (iii) The parts to be replaced must ei-
                                                                 Dec. 9, 2004; 70 FR 8249, 8252, Feb. 18, 2005; 70
                                                                                                                           ther be destroyed abroad or returned
                                                                 FR 9703, Feb. 28, 2005; 70 FR 14390, Mar. 22,
                                                                 2005; 71 FR 14098, Mar. 21, 2006; 71 FR 20885,            promptly to the person who supplied
                                                                 Apr. 24, 2006; 72 FR 70510, Dec. 12, 2007]                the replacement parts, or to a foreign
                                                                                                                           firm that is under the effective control
                                                                 § 740.10 Servicing and replacement of                     of that person.
                                                                     parts and equipment (RPL).                              (3) Exclusions. (i) No replacement
                                                                    This License Exception authorizes                      parts may be exported to repair a com-
                                                                 exports and reexports associated with                     modity exported under a license if that
                                                                 one-for-one replacement of parts or                       license included a condition that any
                                                                 servicing and replacement of equip-                       subsequent replacement parts must be
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                                                                 ment.                                                     exported only under a license.

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                                                                 § 740.10                                                              15 CFR Ch. VII (1–1–08 Edition)

                                                                    (ii) No parts may be exported to be                    one-for-one replacement parts shall en-
                                                                 held abroad as spare parts or equip-                      sure that the commodities being re-
                                                                 ment for future use. Replacement parts                    paired were shipped to their present lo-
                                                                 may be exported to replace spare parts                    cation in accordance with U.S. law and
                                                                 that were authorized to accompany the                     continue to be legally used, and that
                                                                 export of equipment, as those spare                       either before or promptly after reex-
                                                                 parts are utilized in the repair of the                   port of the replacement parts, the re-
                                                                 equipment. This will allow mainte-                        placed parts are either destroyed or re-
                                                                 nance of the stock of spares at a con-                    turned to the United States, or to the
                                                                 sistent level as parts are used.                          foreign firm in Country Group B (see
                                                                    (iii) No parts may be exported to any                  Supplement No. 1 to part 740) that
                                                                 destination, except the countries listed                  shipped the replacement parts.
                                                                 in Supplement No. 3 to Part 744 of the                      (b) Servicing and replacement—(1)
                                                                 EAR (Countries Not Subject to Certain                     Scope. The provisions of this paragraph
                                                                 Nuclear      End-Use      Restrictions in                 (b) authorize the export and reexport of
                                                                 § 744.2(a)) if the item is to be incor-                   items that were returned to the United
                                                                 porated into or used in nuclear weap-                     States for servicing and the replace-
                                                                 ons, nuclear explosive devices, nuclear                   ment of defective or unacceptable U.S.-
                                                                 testing related to activities described                   origin commodities and software.
                                                                 in § 744.2(a) of the EAR, the chemical                      (2) Commodities and software sent to
                                                                 processing of irradiated special nuclear                  a United States or foreign party for
                                                                 or source material, the production of                     servicing.
                                                                 heavy water, the separation of isotopes
                                                                                                                             (i) Definition. Servicing as used in this
                                                                 of source and special nuclear mate-
                                                                                                                           section means inspection, testing, cali-
                                                                 rials, or the fabrication of nuclear re-
                                                                                                                           bration or repair, including overhaul
                                                                 actor fuel containing plutonium, as de-
                                                                                                                           and reconditioning. The servicing shall
                                                                 scribed in § 744.2(a) of the EAR.
                                                                                                                           not have improved or changed the basic
                                                                    (iv) No replacement parts may be ex-
                                                                                                                           characteristics, e.g., as to accuracy, ca-
                                                                 ported to countries in Country Group
                                                                                                                           pability, performance, or productivity
                                                                 E:1 (see Supplement No. 1 to this part)
                                                                                                                           of the commodity or software as origi-
                                                                 (countries designated by the Secretary
                                                                 of State as supporting acts of inter-                     nally authorized for export or reexport.
                                                                 national terrorism) if the commodity                        (ii) Return of serviced commodities and
                                                                 to be repaired is an ‘‘aircraft’’ (as de-                 software. When the serviced commodity
                                                                 fined in part 772 of the EAR) or na-                      or software is returned, it may include
                                                                 tional security controlled commodity.                     any replacement or rebuilt parts nec-
                                                                    (v) No replacement parts may be ex-                    essary to its repair and may be accom-
                                                                 ported to countries in Country Group                      panied by any spare part, tool, acces-
                                                                 E:1 if the commodity to be repaired is                    sory, or other item that was sent with
                                                                 explosives detection equipment con-                       it for servicing.
                                                                 trolled under ECCN 2A983 or related                         (iii) Commodities and software imported
                                                                 software controlled under ECCN 2D983.                     from Country Group D:1 except the Peo-
                                                                    (vi) The conditions described in this                  ple’s Republic of China (PRC). Commod-
                                                                 paragraph (a)(3) relating to replace-                     ities and software legally exported or
                                                                 ment of parts do not apply to reexports                   reexported to a consignee in Country
                                                                 to a foreign country of parts as re-                      Group D:1 (except the People’s Repub-
                                                                 placements in foreign-origin products,                    lic of China (PRC)) (see Supplement
                                                                 if at the time the replacements are fur-                  No. 1 to part 740) that are sent to the
                                                                 nished, the foreign-origin product is el-                 United States or a foreign party for
                                                                 igible for export to such country under                   servicing may be returned to the coun-
                                                                 any of the License Exceptions in this                     try from which it was sent, provided
                                                                 part or the exceptions in § 734.4 of the                  that both of the following conditions
                                                                 EAR.                                                      are met:
                                                                    (4) Reexports. Parts exported from the                   (A) The exporter making the ship-
                                                                 United States may be reexported to a                      ment is the same person or firm to
                                                                 new country of destination, provided                      whom the original license was issued;
                                                                 that the restrictions described in para-                  and
                                                                 graphs (a)(2) and (3) of this section are                   (B) The end-use and the end-user of
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                                                                 met. A party reexporting U.S.-origin                      the serviced commodities or software

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.10

                                                                 and other particulars of the trans-                       provided in paragraph (b)(3)(ii)(C) of
                                                                 action, as set forth in the application                   this section.
                                                                 and supporting documentation that                           (B) The defective or otherwise unus-
                                                                 formed the basis for issuance of the li-                  able equipment must be replaced free
                                                                 cense have not changed.                                   of charge, except for transportation
                                                                   (iv) Terrorist supporting countries. No                 and labor charges. If exporting to the
                                                                 repaired commodity or software may                        countries listed in Country Group D:1
                                                                 be exported or reexported to countries                    (except the PRC), the exporter shall re-
                                                                 in Country Group E:1 (see Supplement                      place the commodity or software with-
                                                                 No. 1 to this part).                                      in the warranty period or within 12
                                                                   (3) Replacements for defective or unac-                 months of its shipment to the ultimate
                                                                 ceptable U.S.-origin equipment. (i) Sub-                  consignee in the country of destina-
                                                                 ject to the following conditions, com-                    tion, whichever is shorter.
                                                                 modities or software may be exported                        (C) The commodity or software to be
                                                                 or reexported to replace defective or                     replaced must either be destroyed
                                                                 otherwise unusable (e.g., erroneously                     abroad or returned to the United
                                                                 supplied) items.                                          States, or to a foreign firm in Country
                                                                   (A) The commodity or software to be                     Group B that is under the effective
                                                                 replaced must have been previously ex-                    control of the exporter, or to the for-
                                                                 ported or reexported in its present                       eign firm that is providing the replace-
                                                                 form under a license or authorization                     ment part or equipment. The destruc-
                                                                 granted by BIS.                                           tion or return must be effected before,
                                                                   (B) No commodity or software may                        or promptly after, the replacement
                                                                 be exported or reexported to replace                      item is exported from the United
                                                                 equipment that is worn out from nor-                      States.
                                                                 mal use, nor may any commodity or                           (D) A party reexporting replacements
                                                                 software be exported to be held in                        for defective or unacceptable U.S.-ori-
                                                                 stock abroad as spare equipment for fu-                   gin equipment must ensure that the
                                                                 ture use.                                                 commodities or software being re-
                                                                   (C) The replacement item may not                        placed were shipped to their present lo-
                                                                 improve the basic characteristic, e.g.,                   cation in accordance with U.S. law and
                                                                 as to accuracy, capability, perform-                      continue to be legally used. See § 764.7
                                                                 ance, or productivity, of the equipment                   of the EAR for exports or reexports to
                                                                 as originally approved for export or re-                  the installed base in Libya.
                                                                 export under a license issued by BIS.                       (c) Special recordkeeping requirements:
                                                                   (D) No shipment may be made to                          ECCNs 2A983 and 2D983. (1) In addition
                                                                 countries in Country Group E:1 (see                       to any other recordkeeping require-
                                                                 Supplement No. 1 to this part), or to                     ments set forth elsewhere in the EAR,
                                                                 any other destination to replace defec-                   exporters are required to maintain
                                                                 tive or otherwise unusable equipment                      records, as specified in this section, for
                                                                 owned or controlled by, or leased or                      any items exported or reexported pur-
                                                                 chartered to, a national of any of those                  suant to License Exception RPL to re-
                                                                 countries.                                                pair or service previously legally ex-
                                                                   (ii) Special conditions applicable to ex-               ported or reexported items controlled
                                                                 ports to Country Group B and Country                      under ECCNs 2A983 and 2D983. The fol-
                                                                 Group D:1. (See Supplement No. 1 to                       lowing information must be specially
                                                                 part 740.) In addition to the general                     maintained for each such export or re-
                                                                 conditions in paragraph (b)(3)(i) of this                 export transaction:
                                                                 section, the following conditions apply                     (i) A description of the equipment re-
                                                                 to exports or reexports of replacements                   placed, repaired or serviced;
                                                                 for defective or unacceptable U.S.-ori-                     (ii) The type of repair or service;
                                                                 gin commodities or software to a des-                       (iii) Certification of the destruction
                                                                 tination in Country Group B or Coun-                      or return of equipment replaced;
                                                                 try Group D:1:                                              (iv) Location of the equipment re-
                                                                   (A) By making such an export or re-                     placed, repaired or serviced;
                                                                 export, the exporter represents that all                    (v) The name and address of who re-
                                                                 the requirements of this paragraph (b)                    ceived the items for replacement, re-
                                                                 have been met and undertakes to de-                       pair or service;
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                                                                 stroy or return the replaced parts as                       (vi) Quantity of items shipped; and

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                                                                 § 740.11                                                              15 CFR Ch. VII (1–1–08 Edition)

                                                                   (vii) Country of ultimate destination.                  country for IAEA or Euratom inter-
                                                                   (2) Records maintained pursuant to                      national safeguards use provided that
                                                                 this section may be requested at any                      IAEA or Euratom maintains control of
                                                                 time by an appropriate BIS official as                    or otherwise safeguards the commod-
                                                                 set forth in § 762.7 of the EAR.                          ities and returns the commodities to
                                                                 [61 FR 64279, Dec. 4, 1996. Redesignated at 61            the locations described in paragraphs
                                                                 FR 68579, Dec. 30, 1996, and amended at 63 FR             (a)(1)(i) and (a)(1)(ii) of this section
                                                                 50522, Sept. 22, 1998; 65 FR 38150, June 19, 2000;        when they become obsolete, are no
                                                                 65 FR 42568, July 10, 2000; 66 FR 42110, Aug. 10,         longer required, or are replaced.
                                                                 2001; 67 FR 55598, Aug. 29, 2002; 68 FR 16211,               (iv) Commodity or software ship-
                                                                 Apr. 3, 2003; 70 FR 14390, Mar. 22, 2005; 72 FR
                                                                                                                           ments may be made by commercial
                                                                 3725, Jan. 26, 2007]
                                                                                                                           companies under direct contract with
                                                                 § 740.11 Governments,        international                IAEA or Euratom, or by Department of
                                                                       organizations, and international in-                Energy National Laboratories as di-
                                                                       spections under the Chemical                        rected by the Department of State or
                                                                       Weapons Convention (GOV).                           the Department of Energy.
                                                                    This License Exception authorizes                         (v) The monitoring functions of IAEA
                                                                 exports and reexports for international                   and Euratom are not subject to the re-
                                                                 nuclear safeguards; U.S. government                       strictions on prohibited safeguarded
                                                                 agencies or personnel, and agencies of                    nuclear        activities  described     in
                                                                 cooperating governments; and inter-                       § 744.2(a)(3) of the EAR.
                                                                 national inspections under the Chem-                         (vi) When commodities or software
                                                                 ical Weapons Convention.                                  originally consigned to IAEA or
                                                                    (a) International safeguards—(1) Scope.                Euratom are no longer in IAEA or
                                                                 You may export and reexport commod-                       Euratom official safeguards use, such
                                                                 ities or software to the International                    commodities may only be disposed of
                                                                 Atomic Energy Agency (IAEA) and the                       in accordance with the regulations in
                                                                 European Atomic Energy Community                          the EAR.
                                                                 (Euratom), and reexports by IAEA and                         (2) The following items controlled for
                                                                 Euratom for official international safe-
                                                                                                                           national security (NS) reasons under
                                                                 guard use, as follows:
                                                                                                                           Export Control Classification Numbers
                                                                    (i) Commodities or software con-
                                                                                                                           (ECCNs) identified on the Commerce
                                                                 signed to the IAEA at its headquarters
                                                                                                                           Control List may not be exported or re-
                                                                 in Vienna, Austria, or field offices in
                                                                 Toronto, Ontario, Canada or Tokyo,                        exported under this License Exception
                                                                 Japan for official international safe-                    to destinations other than Austria,
                                                                 guards use. The IAEA is an inter-                         Belgium, Canada, Denmark, Finland,
                                                                 national organization that establishes                    France, Germany, Greece, Ireland,
                                                                 and administers safeguards designed to                    Italy, Luxembourg, the Netherlands,
                                                                 ensure that special nuclear materials                     Portugal, Spain, Sweden, and the
                                                                 and other related nuclear facilities,                     United Kingdom: 1C001, 5A001.b.5,
                                                                 equipment, and material are not di-                       6A001.a.1.b.1 object detection and loca-
                                                                 verted from peaceful purposes to non-                     tion systems having a sound pressure
                                                                 peaceful purposes.                                        level exceeding 210 dB (reference 1 µPa
                                                                    (ii) Commodities or software con-                      at 1 m) for equipment with an oper-
                                                                 signed to the Euratom Safeguards Di-                      ating frequency in the band from 30 Hz
                                                                 rectorate in Luxembourg, Luxembourg                       to 2 kHz inclusive, 6A001.a.2.a.1,
                                                                 for official international safeguards                     6A001.a.2.a.2, 6A001.a.2.a.3, 6A001.a.2.a.5,
                                                                 use. Euratom is an international orga-                    6A001.a.2.a.6, 6A001.a.2.b, 6A001.a.2.e,
                                                                 nization of European countries with                       6A002.a.1.c, 6A008.l.3, 6B008, 8A001.b,
                                                                 headquarters in Luxembourg. Euratom                       8A001.d, 8A002.o.3.b; and
                                                                 establishes and administers safeguards                       (i) ‘‘Composite’’ structures or lami-
                                                                 designed to ensure that special nuclear                   nates controlled by 1A002.a, having an
                                                                 materials and other related nuclear fa-                   organic ‘‘matrix’’ and made from mate-
                                                                 cilities, equipment, and material are                     rials listed under 1C010.c or 1C010.d;
                                                                 not diverted from peaceful purposes to                    and
                                                                 non-peaceful purposes.                                       (ii)–(iii) [Reserved]
                                                                    (iii) Commodities consigned to IAEA                       (iv) Processing equipment controlled
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                                                                 or Euratom may be reexported to any                       by 6A001.a.2.c and specially designed

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.11

                                                                 for real time application with towed                      for the personal use of members of the
                                                                 acoustic hydrophone arrays; and                           U.S. Armed Forces or civilian per-
                                                                    (v) Processing equipment, specially                    sonnel of the U.S. Government (includ-
                                                                 designed for real time application bot-                   ing U.S. representatives to public
                                                                 tom or bay cable systems controlled;                      international organizations), and their
                                                                 by 6A001.a.2.f; and                                       immediate families and servants. Items
                                                                    (vi) ‘‘Software’’, as follows:                         for personal use include household ef-
                                                                    (A) [Reserved]                                         fects, food, beverages, and other daily
                                                                    (B) Controlled by 5D001.a, specially                   necessities.
                                                                 designed for the ‘‘development’’ or                         (ii) Items for official use by personnel
                                                                 ‘‘production’’ of equipment, functions                    and agencies of the U.S. Government.
                                                                 or features controlled by 5A001.b.5; and                  This provision is available for items
                                                                    (C) Controlled by 6D001 for items con-                 consigned to and for the official use of
                                                                 trolled by 6A008.l.3 or 6B008; and                        any agency of the U.S. Government.
                                                                    (D) Controlled by 6D003.a; and                           (iii) (A) Items for official use within na-
                                                                    (E) Controlled by 7D003.a or 7D003.b;                  tional territory by agencies of cooperating
                                                                 and                                                       governments. This License Exception is
                                                                    (F) Controlled by 8D001, specially de-                 available for all items consigned to and
                                                                 signed for the ‘‘development’’ or ‘‘pro-                  for the official use of any agency of a
                                                                 duction’’ of equipment controlled by                      cooperating government within the
                                                                 8A001.b, 8A001.d, or 8A002.o.3.b; and                     territory of any cooperating govern-
                                                                    (G) Controlled by 9D001, specially de-                 ment, except items described in para-
                                                                 signed or modified for the ‘‘develop-                     graph (a) to Supplement No. 1 of this
                                                                 ment’’ of equipment or ‘‘technology’’                     section:
                                                                 controlled by 9A011, 9E003.a.1, or
                                                                                                                             (B) Reporting requirements. See § 743.1
                                                                 9E003.a.3.a; and
                                                                                                                           of the EAR for reporting requirements
                                                                    (H) Controlled by 9D002, specially de-
                                                                                                                           for exports of certain items under this
                                                                 signed or modified for the ‘‘produc-
                                                                                                                           paragraph (b)(2)(iii).
                                                                 tion’’ of equipment controlled by 9A011.
                                                                    (3) No encryption items controlled                       (iv) (A) Diplomatic and consular mis-
                                                                 for EI reasons under ECCNs 5A002,                         sions of a cooperating government. This
                                                                 5D002, or 5E002 may be exported under                     License Exception is available for all
                                                                 the provisions of this paragraph (a).                     items consigned to and for the official
                                                                    (4) Restrictions. Nationals of countries               use of a diplomatic or consular mission
                                                                 in Country Group E:1 may not phys-                        of a cooperating government located in
                                                                 ically or computationally access com-                     any country in Country Group B (see
                                                                 puters that have been enhanced by                         Supplement No. 1 to part 740), except
                                                                 ‘‘electronic assemblies’’, which have                     items described in paragraph (b) of
                                                                 been exported or reexported under Li-                     Supplement No. 1 of this section.
                                                                 cense Exception GOV and have been                           (B) Reporting requirements. See § 743.1
                                                                 used to enhance such computers by ag-                     of the EAR for reporting requirements
                                                                 gregation of processors so that the                       for exports of certain items under this
                                                                 APP of the aggregation exceeds the                        paragraph (b)(2)(iv).
                                                                 APP parameter set forth in ECCN                             (3) Definitions. (i) Agency of the U.S.
                                                                 4A003.b. of the Commerce Control List                     Government includes all civilian and
                                                                 in Supplement No. 1 to part 774 of the                    military departments, branches, mis-
                                                                 EAR, without prior authorization from                     sions, government-owned corporations,
                                                                 the Bureau of Industry and Security.                      and other agencies of the U.S. Govern-
                                                                    (b) Governments—(1) Scope. The provi-                  ment, but does not include such na-
                                                                 sions of paragraph (b) authorize ex-                      tional agencies as the American Red
                                                                 ports and reexports of the items listed                   Cross or international organizations in
                                                                 in paragraph (b)(2) of this section to                    which the United States participates
                                                                 personnel and agencies of the U.S. Gov-                   such as the Organization of American
                                                                 ernment or agencies of cooperating                        States. Therefore, shipments may not
                                                                 governments.                                              be made to these non-government na-
                                                                    (2) Eligibility—(i) Items for personal use             tional or international agencies, except
                                                                 by personnel and agencies of the U.S.                     as provided in paragraph (b)(2)(i) of
                                                                 Government. This provision is available                   this section for U.S. representatives to
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                                                                 for items in quantities sufficient only                   these organizations.

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                                                                 § 740.11                                                              15 CFR Ch. VII (1–1–08 Edition)

                                                                   (ii) Agency of a cooperating government                    (2) Exclusions. The following items
                                                                 includes all civilian and military de-                    may not be exported or reexported
                                                                 partments, branches, missions, and                        under the provisions of this paragraph
                                                                 other governmental agencies of a co-                      (c):
                                                                 operating national government. Co-                           (i) [Reserved]
                                                                 operating governments are the na-                            (ii) Inspection samples collected in
                                                                 tional governments of countries listed                    the U.S. pursuant to the Convention;
                                                                 in Country Group A:1 (see Supplement                      and
                                                                 No. 1 to part 740) and the national gov-                     (iii) Commodities and software that
                                                                 ernments of Argentina, Austria, Fin-                      are no longer in OPCW official use.
                                                                 land, Hong Kong, Ireland, Korea (Re-                      Such items must be disposed of in ac-
                                                                 public of), New Zealand, Singapore,                       cordance with the EAR.
                                                                 Sweden, Switzerland, and Taiwan.                             (3) Confidentiality. The application of
                                                                   (c) International inspections under the                 the provisions of this paragraph (c) is
                                                                 Chemical Weapons Convention (CWC or                       subject to the condition that the con-
                                                                 Convention). (1) The provisions of this                   fidentiality of business information is
                                                                 paragraph (c) authorize exports and re-                   strictly protected in accordance with
                                                                 exports to the Organization for the                       applicable provisions of the EAR and
                                                                 Prohibition of Chemical Weapons                           other U.S. laws regarding the use and
                                                                 (OPCW) and exports and reexports by                       retransfer of U.S. goods and services.
                                                                                                                              (4) Restrictions. Nationals of countries
                                                                 the OPCW for official international in-
                                                                                                                           in Country Group E:1 may not phys-
                                                                 spection and verification use under the
                                                                                                                           ically or computationally access com-
                                                                 terms of the Convention. The OPCW is
                                                                                                                           puters that have been enhanced by
                                                                 an international organization that es-
                                                                                                                           ‘‘electronic assemblies’’, which have
                                                                 tablishes and administers an inspection
                                                                                                                           been exported or reexported under Li-
                                                                 and verification regime under the Con-
                                                                                                                           cense Exception GOV and have been
                                                                 vention designed to ensure that certain
                                                                                                                           used to enhance such computers by ag-
                                                                 chemicals and related facilities are not
                                                                                                                           gregation of processors so that the
                                                                 diverted from peaceful purposes to non-
                                                                                                                           APP of the aggregation exceeds the
                                                                 peaceful purposes. These provisions au-
                                                                                                                           APP parameter set forth in ECCN
                                                                 thorize exports and reexports for offi-                   4A003.b. of the Commerce Control List
                                                                 cial OPCW use of the following:                           in Supplement No. 1 to part 774 of the
                                                                   (i) Commodities and software con-                       EAR, without prior authorization from
                                                                 signed to the OPCW at its headquarters                    the Bureau of Industry and Security.
                                                                 in The Hague for official international
                                                                 OPCW use for the monitoring and in-                       SUPPLEMENT NO. 1 TO § 740.11—ADDITIONAL
                                                                 spection functions set forth in the Con-                   RESTRICTIONS ON USE OF LICENSE EXCEP-
                                                                                                                            TION GOV
                                                                 vention, and technology relating to the
                                                                 maintenance, repair, and operation of                       (a) Items for official use within national terri-
                                                                 such commodities and software. The                        tory by agencies of a Cooperating Government.
                                                                 OPCW must maintain effective control                      License Exception GOV is available for all
                                                                                                                           items consigned to and for the official use of
                                                                 of such commodities, software and
                                                                                                                           any agency of a cooperating government
                                                                 technology.                                               within the territory of any cooperating gov-
                                                                   (ii) Controlled technology relating to                  ernment, except:
                                                                 the training of the OPCW inspectorate.                      (1) Items identified on the Commerce Con-
                                                                   (iii) Controlled technology relating                    trol List as controlled for national security
                                                                 to a CWC inspection site, including                       (NS) reasons under Export Control Classi-
                                                                                                                           fication Numbers (ECCNs) as follows for ex-
                                                                 technology released as a result of:
                                                                                                                           port or reexport to destinations other than
                                                                   (A) Visual inspection of U.S.-origin                    Austria, Belgium, Canada, Denmark, Fin-
                                                                 equipment or facilities by foreign na-                    land, France, Germany, Greece, Ireland,
                                                                 tionals of the inspection team;                           Italy, Luxembourg, the Netherlands, Por-
                                                                   (B) Oral communication of controlled                    tugal, Spain, Sweden, or the United King-
                                                                 technology to foreign nationals of the                    dom: 1C001, 5A001.b.5, 6A001.a.1.b.1 object de-
                                                                 inspection team in the U.S. or abroad;                    tection and location systems having a sound
                                                                                                                           pressure level exceeding 210 dB (reference 1
                                                                 and                                                       µPa at 1 m) for equipment with an operating
                                                                   (C) The application to situations                       frequency in the band from 30 Hz to 2 kHz in-
                                                                 abroad of personal knowledge or tech-                     clusive,       6A001.a.2.a.1,        6A001.a.2.a.2,
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                                                                 nical experience acquired in the U.S.                     6A001.a.2.a.3,    6A001.a.2.a.5,     6A001.a.2.a.6,

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.11
                                                                 6A001.a.2.b, 6A001.a.2.e, 6A002.a.1.c, 6A008.1.3,            (F) Controlled by 8E001 for items con-
                                                                 6B008, 8A001.b, 8A001.d, 8A002.o.3.b; and                 trolled by 8A001.b, 8A002.o.3.b, or 8A001.d; and
                                                                    (i) ‘‘Composite’’ structures or laminates                 (G) Controlled by 9E001 for the ‘‘develop-
                                                                 controlled by 1A002.a, having an organic                  ment’’ of equipment or ‘‘software’’ in 9A011,
                                                                 ‘‘matrix’’ and made from materials listed                 9D001 for the ‘‘development’’ of 9A011, or
                                                                 under 1C010.c or 1C010.d; and                             9D002 for the ‘‘production’’ of 9A011; and
                                                                    (ii)–(iii) [Reserved]                                     (H) Controlled by 9E002 for the ‘‘produc-
                                                                    (iv) Processing equipment controlled by                tion’’ of equipment in 9A011; and
                                                                 6A001.a.2.c and specially designed for real                  (I) Controlled by 9E003.a.1; and
                                                                 time application with towed acoustic hydro-                  (J) Controlled by 9E003.a.3.a;
                                                                 phone arrays; and                                            (2) Items identified on the Commerce Con-
                                                                    (v) Processing equipment, specially de-                trol List as controlled for missile technology
                                                                 signed for real time application bottom or                (MT), chemical and biological warfare (CB),
                                                                 bay cable systems controlled by 6A001.a.2.f;              or nuclear nonproliferation (NP) reasons;
                                                                 and
                                                                                                                              (3) Regional stability items controlled
                                                                    (vi) ‘‘Software’’, as follows:
                                                                                                                           under Export Control Classification Numbers
                                                                    (A) [Reserved]                                         (ECCNs) 6A002.a.1.c, 6E001 technology ac-
                                                                    (B) Controlled by 5D001.a, specially de-               cording to the General Technology Note for
                                                                 signed for the ‘‘development’’ or ‘‘produc-               the      ‘‘development’’     of    equipment     in
                                                                 tion’’ of equipment, functions or features                6A002.a.1.c, and 6E002 technology according
                                                                 controlled by 5A001.b.5; and                              to the General Technology Note for the
                                                                    (C) Controlled by 6D001 for items con-                 ‘‘production’’ of equipment in 6A002.a.1.c; or
                                                                 trolled by 6A008.l.3 or 6B008; and
                                                                                                                              (4) Encryption items controlled for EI rea-
                                                                    (D) Controlled by 6D003.a; and                         sons as described in the Commerce Control
                                                                    (E) Controlled by 7D003.a or 7D003.b; and              List.
                                                                    (F) Controlled by 8D001, specially designed
                                                                                                                              (b) Diplomatic and consular missions of a co-
                                                                 for the ‘‘development’’ or ‘‘production’’ of
                                                                                                                           operating government. License Exception GOV
                                                                 equipment controlled by 8A001.b, 8A001.d, or
                                                                                                                           is available for all items consigned to and for
                                                                 8A002.o.3.b;
                                                                                                                           the official use of a diplomatic or consular
                                                                    (G) Controlled by 9D001, specially designed
                                                                                                                           mission of a cooperating government located
                                                                 or modified for the ‘‘development’’ of equip-
                                                                                                                           in any country in Country Group B (see Sup-
                                                                 ment or ‘‘technology’’ controlled by 9A011,
                                                                                                                           plement No. 1 to part 740), except:
                                                                 9E003.a.1, or 9E003.a.3.a; and
                                                                                                                              (1) Items identified on the Commerce Con-
                                                                    (H) Controlled by 9D002,specially designed
                                                                                                                           trol List as controlled for national security
                                                                 or modified for the ‘‘production’’ of equip-
                                                                                                                           (NS) reasons under Export Control Classi-
                                                                 ment controlled by 9A011;
                                                                                                                           fication Numbers (ECCNs) as follows for ex-
                                                                    (vii) ‘‘Technology’’, as follows:
                                                                                                                           port or reexport to destinations other than
                                                                    (A) Controlled by 1E001 for items con-
                                                                                                                           Austria, Belgium, Canada, Denmark, Fin-
                                                                 trolled by 1A002.a as described by paragraph
                                                                                                                           land, France, Germany, Greece, Ireland,
                                                                 (a)(1)(i) of this Supplement, or 1C001; and
                                                                                                                           Italy, Luxembourg, the Netherlands, Por-
                                                                    (B) [Reserved]
                                                                                                                           tugal, Spain, Sweden, or the United King-
                                                                    (C) Controlled by 5E001.a for the ‘‘develop-
                                                                                                                           dom: 1C001, 5A001.b.5, 6A001.a.1.b.1 object de-
                                                                 ment’’ or ‘‘production’’ of digitally con-
                                                                                                                           tection and location systems having a sound
                                                                 trolled      radio    receivers    controlled    by
                                                                                                                           pressure level exceeding 210 dB (reference 1
                                                                 5A001.b.5; or 5D001.a for ‘‘software’’ specially
                                                                                                                           µPa at 1 m) for equipment with an operating
                                                                 designed for the ‘‘development’’ or ‘‘produc-
                                                                                                                           frequency in the band from 30 Hz to 2 kHz in-
                                                                 tion’’ of digitally controlled radio receivers
                                                                                                                           clusive,         6A001.a.2.a.1,       6A001.a.2.a.2,
                                                                 controlled by 5A001.b.5; and
                                                                                                                           6A001.a.2.a.3,      6A001.a.2.a.5,    6A001.a.2.a.6,
                                                                    (D) Controlled by 6E001 for the ‘‘develop-
                                                                                                                           6A001.a.2.b, 6A001.a.2.e, 6A002.a.1.c, 6A008.1.3,
                                                                 ment’’ of equipment or ‘‘software’’ in
                                                                                                                           6B008, 8A001.b, 8A001.d, 8A002.o.3.b; and
                                                                 6A001.a.1.b.1,      6A001.a.2.a.1,    6A001.a.2.a.2,
                                                                 6A001.a.2.a.3,      6A001.a.2.a.5,    6A001.a.2.a.6,         (i) ‘‘Composite’’ structures or laminates
                                                                 6A001.a.2.b,         6A001.a.2.c,      6A001.a.2.e,       controlled by 1A002.a, having an organic
                                                                 6A001.a.2.f, 6A002.a.1.c, 6A008.1.3, 6B008, 6D001         ‘‘matrix’’ and made from materials listed
                                                                 (specially designed for the ‘‘production’’ or             under 1C010.c or 1C010.d; and
                                                                 ‘‘development’’ of equipment in 6A008.1.3 or                 (ii)–(iii) [Reserved]
                                                                 6B008), or 6D003.a as described in paragraph                 (iv) Processing equipment controlled by
                                                                 (a)(1) of this Supplement; and                            6A001.a.2.c and specially designed for real
                                                                    (E) Controlled by 6E002 for the ‘‘produc-              time application with towed acoustic hydro-
                                                                 tion’’      of    equipment       controlled     by       phone arrays; and
                                                                 6A001.a.1.b.1,      6A001.a.2.a.1,    6A001.a.2.a.2,         (v) Processing equipment, specially de-
                                                                 6A001.a.2.a.3,      6A001.a.2.a.5,    6A001.a.2.a.6,      signed for real time application bottom or
                                                                 6A001.a.2.b,         6A001.a.2.c,      6A001.a.2.e,       bay cable systems controlled by 6A001.a.2.f;
                                                                 6A001.a.2.f, 6A002.a.1.c, 6A008.1.3, or 6B008, as         and
                                                                 described in paragraph (a)(1) of this Supple-                (vi) ‘‘Software’’, as follows:
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                                                                 ment; and                                                    (A) [Reserved]

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                                                                 § 740.12                                                              15 CFR Ch. VII (1–1–08 Edition)
                                                                    (B) Controlled by 5D001.a, specially de-               to the General Technology Note for the
                                                                 signed for the ‘‘development’’ or ‘‘produc-               ‘‘production’’ of equipment in 6A002.a.1.c; or
                                                                 tion’’ of equipment, functions or features                   (4) Encryption items controlled for EI rea-
                                                                 controlled by 5A001.b.5; and                              sons as described in the Commerce Control
                                                                    (C) Controlled by 6D001 for items con-                 List.
                                                                 trolled by 6A008.l.3 or 6B008; and
                                                                                                                           [61 FR 64281, Dec. 4, 1996. Redesignated at 61
                                                                    (D) Controlled by 6D003.a; and
                                                                                                                           FR 68579, Dec. 30, 1996.]
                                                                    (E) Controlled by 7D003.a or 7D003.b; and
                                                                    (F) Controlled by 8D001, specially designed              EDITORIAL NOTE: For FEDERAL REGISTER ci-
                                                                 for the ‘‘development’’ or ‘‘production’’ of              tations affecting § 740.11, see the List of CFR
                                                                 equipment controlled by 8A001.b, 8A001.d, or              Sections Affected, which appears in the
                                                                 8A002.o.3.b;                                              Finding Aids section of the printed volume
                                                                    (G) Controlled by 9D001, specially designed            and on GPO Access.
                                                                 or modified for the ‘‘development’’ of equip-
                                                                 ment or ‘‘technology’’ controlled by 9A011,               § 740.12 Gift parcels and humanitarian
                                                                 9E003.a.1, or 9E003.a.3.a; and                                 donations (GFT).
                                                                    (H) Controlled by 9D002, specially designed
                                                                 or modified for the ‘‘production’’ of equip-
                                                                                                                              (a) Gift parcels—(1) Scope. The provi-
                                                                 ment controlled by 9A011;                                 sions of paragraph (a) authorize ex-
                                                                    (vii) ‘‘Technology’’, as follows:                      ports and reexports of gift parcels by
                                                                    (A) Controlled by 1E001 for items con-                 an individual (donor) addressed to an
                                                                 trolled by 1A002.a as described by paragraph              individual, or a religious, charitable or
                                                                 (a)(1)(i) of this Supplement, or 1C001; and               educational organization (donee) lo-
                                                                    (B) [Reserved]                                         cated in any destination for the use of
                                                                    (C) Controlled by 5E001.a for the ‘‘develop-
                                                                 ment’’ or ‘‘production’’ of digitally con-
                                                                                                                           the donee or the donee’s immediate
                                                                 trolled      radio   receivers    controlled    by        family (and not for resale). The gift
                                                                 5A001.b.5; or 5D001.a for ‘‘software’’ specially          parcel must be provided free of charge
                                                                 designed for the ‘‘development’’ or ‘‘produc-             to the donee. However, payment by the
                                                                 tion’’ of digitally controlled radio receivers            donee of any handling charges or of
                                                                 controlled by 5A001.b.5; and                              any fees levied by the importing coun-
                                                                    (D) Controlled by 6E001 for the ‘‘develop-             try (e.g., import duties, taxes, etc.) is
                                                                 ment’’ of equipment or ‘‘software’’ in
                                                                                                                           not considered to be a cost to the donee
                                                                 6A001.a.1.b.1,     6A001.a.2.a.1,    6A001.a.2.a.2,
                                                                 6A001.a.2.a.3,     6A001.a.2.a.5,    6A001.a.2.a.6,       for purposes of this definition of ‘‘gift
                                                                 6A001.a.2.b,        6A001.a.2.c,      6A001.a.2.e,        parcel.’’
                                                                 6A001.a.2.f, 6A002.a.1.c, 6A008.1.3, 6B008, 6D001            NOTE TO PARAGRAPH (a) OF THIS SECTION: A
                                                                 (specially designed for the ‘‘production’’ or             gift parcel, within the context of this para-
                                                                 ‘‘development’’ of equipment in 6A008.1.3 or              graph (a), does not include multiple parcels
                                                                 6B008), or 6D003.a as described in paragraph              exported in a single shipment for delivery to
                                                                 (a)(1) of this Supplement; and                            individuals residing in a foreign country.
                                                                    (E) Controlled by 6E002 for the ‘‘produc-              Such multiple gift parcels, if subject to the
                                                                 tion’’      of    equipment      controlled     by        General Prohibitions described in § 736.2(b) of
                                                                 6A001.a.1.b.1,     6A001.a.2.a.1,    6A001.a.2.a.2,       the EAR, must be licensed by BIS. (See
                                                                 6A001.a.2.a.3,     6A001.a.2.a.5,    6A001.a.2.a.6,       § 748.8(d) and Supplement No. 2 to Part 748
                                                                 6A001.a.2.b,        6A001.a.2.c,      6A001.a.2.e,        paragraph (d) of the EAR for licensing of
                                                                 6A001.a.2.f, 6A002.a.1.c, 6A008.l.3, or 6B008, as         multiple gift parcels).
                                                                 described in paragraph (a)(1) of this Supple-
                                                                 ment; and                                                   (2) Commodity, value and other limita-
                                                                    (F) Controlled by 8E001 for items con-                 tions—(i) Commodity limitations.
                                                                 trolled by 8A001.b, 8A002.o.3.b, or 8A001.d; and            (A) Prohibited commodities.
                                                                    (G) Controlled by 9E001 for items con-                   (1) For Cuba, no commodity listed on
                                                                 trolled by 9D001; and                                     the Commerce Control List may be in-
                                                                    (H) Controlled by 9E002 for the production
                                                                 of 9A011; and                                             cluded in a gift parcel.
                                                                    (I) Controlled by 9E003.a.1; and                         (2) For all other destinations, no
                                                                    (J) Controlled by 9E003.a.3.a;                         commodity controlled for chemical and
                                                                    (2) Items identified on the Commerce Con-              biological weapons (CB), missile tech-
                                                                 trol List as controlled for missile technology            nology (MT), national security (NS), or
                                                                 (MT), chemical and biological warfare (CB),               nuclear proliferation (NP) reasons on
                                                                 or nuclear nonproliferation (NP) reasons;                 the Commerce Control List (Supple-
                                                                    (3) Regional stability items controlled
                                                                 under Export Control Classification Numbers
                                                                                                                           ment no. 1 to part 774 of the EAR) may
                                                                 (ECCNs) 6A002.a.1.c, 6E001 technology ac-                 be included in a gift parcel.
                                                                 cording to the General Technology Note for                  (B) Eligible commodities. The com-
                                                                 the      ‘‘development’’    of    equipment     in        modity must be of a type and in quan-
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                                                                 6A002.a.1.c, and 6E002 technology according               tities normally given as gifts between

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.12

                                                                 individuals. In addition, eligible com-                   household is defined as all individuals
                                                                 modities are as follows:                                  living in common at a unique address.
                                                                   (1) For Cuba, the only eligible com-                    There is no frequency limit on gift par-
                                                                 modities are food (including vitamins),                   cels of food to Cuba.
                                                                 medicines, medical supplies and de-                         (B) For all destinations other than
                                                                 vices (including hospital supplies and                    Cuba, not more than one gift parcel
                                                                 equipment and equipment for the                           may be sent from the same donor to
                                                                 handicapped), receive-only radio equip-                   the same donee in any one calendar
                                                                 ment for reception of commercial/civil                    month.
                                                                 AM/FM and short wave publicly avail-                        (C) Parties seeking authorization to
                                                                 able frequency bands, and batteries for                   exceed these frequency limits due to
                                                                 such equipment.                                           compelling     humanitarian      concerns
                                                                   (2) For all other destinations, eligible                (e.g., for certain gifts of medicine)
                                                                 commodities include all items de-                         should submit a license application
                                                                 scribed in paragraph (a)(2)(i)(B)(1) of                   (BIS-748P) with complete justification.
                                                                 this section, clothing, personal hygiene                    (iv) Value. The combined total do-
                                                                 items, seeds, veterinary medicines and                    mestic retail value of all commodities
                                                                 supplies, fishing equipment and sup-                      included in a gift parcel may not ex-
                                                                 plies, and soap-making equipment; as                      ceed $400, except for gift parcels to
                                                                 well as all other items normally sent                     Cuba where the value of non-food items
                                                                 as gifts. Gold bullion, gold taels, and
                                                                                                                           may not exceed $200. There is no dollar
                                                                 gold bars are prohibited as are items
                                                                                                                           value limit on food contained in a gift
                                                                 intended for resale or reexport.
                                                                                                                           parcel to Cuba.
                                                                   Example to paragraphs (a)(2)(i)(B)(1)
                                                                 and (2) of this section. A watch or piece                   (v) Additional restrictions on Cuba. (A)
                                                                 of jewelry is normally sent as a gift.                    Limits on gift parcel recipients. A gift
                                                                 However, multiple watches, either in                      parcel may be sent only to a grand-
                                                                 one package or in subsequent ship-                        parent, grandchild, parent, sibling,
                                                                 ments, would not qualify for such gift                    spouse, or child of the donor. (B) Gov-
                                                                 parcels because the quantity exceeds                      ernment and Communist Party offi-
                                                                 that normally given between individ-                      cials to whom gift parcels may not be
                                                                 uals. Similarly, a sewing machine or                      sent under this license exception.
                                                                 bicycle, within the dollar limits of this                   (1) No gift parcel may be sent to any
                                                                 License Exception, may be an appro-                       of the following officials of the Cuban
                                                                 priate gift. However, subsequent ship-                    Government: Ministers and vice-min-
                                                                 ments of the same item to the same                        isters; members of the Council of
                                                                 donee would not be a gift normally                        State; members of the Council of Min-
                                                                 given between individuals.                                isters; members and employees of the
                                                                   (3) For purposes of paragraph                           National Assembly of People’s Power;
                                                                 (a)(2)(i)(B)(2) of this section, clothing is              members of any provincial assembly;
                                                                 appropriate, except that export of mili-                  local sector chiefs of the Committees
                                                                 tary wearing apparel to Country                           for the Defense of the Revolution; Di-
                                                                 Groups D:1 or E:2 under this License                      rector Generals and sub-Director Gen-
                                                                 Exception is specifically prohibited, re-                 erals and higher of all Cuban ministries
                                                                 gardless of whether all distinctive U.S.                  and state agencies; employees of the
                                                                 military insignia, buttons, and other                     Ministry of the Interior (MININT); em-
                                                                 markings are removed.                                     ployees of the Ministry of Defense
                                                                   (ii) Import requirements. The commod-                   (MINFAR); secretaries and first secre-
                                                                 ities must be acceptable in type and                      taries of the Confederation of Labor of
                                                                 quantity by the recipient country for                     Cuba (CTC) and its component unions;
                                                                 import as gifts. Commodities exceeding                    chief editors, editors and deputy edi-
                                                                 the import limits may not be included                     tors of Cuban state-run media organi-
                                                                 in gift parcels.                                          zations and programs, including news-
                                                                   (iii) Frequency. (A) Cuba. Except for                   papers, television, and radio; or mem-
                                                                 gift parcels of food, not more than one                   bers and employees of the Supreme
                                                                 gift parcel may be sent from the same                     Court (Tribuno Supremo Nacional).
                                                                 donor to the same household in any                          (2) No gift parcel may be sent to any
                                                                 one calendar month. For purposes of                       of the following officials or Members of
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                                                                 paragraph (a) of this section, the term                   the Cuban Communist Party: members

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                                                                 § 740.12                                                              15 CFR Ch. VII (1–1–08 Edition)

                                                                 of the Politburo; the Central Com-                          (iii) An agreement to utilize the serv-
                                                                 mittee; Department Heads of the Cen-                      ices of a charitable organization that
                                                                 tral Committee; employees of the Cen-                     has a monitoring system in place.
                                                                 tral Committee; and the secretaries                         (4) Donations. To qualify for export
                                                                 and first secretaries of provincial                       under the provisions of this paragraph
                                                                 Party central committees.                                 (b), the items must be provided free of
                                                                   (3) How to export gift parcels. (i) A gift              charge to the beneficiary. The payment
                                                                 parcel must be sent directly to the                       by the beneficiary, however, of normal
                                                                 donee by the individual donor, or for                     handling charges or fees levied by the
                                                                 such donor by a commercial or other                       importing country (e.g., import duties,
                                                                 gift-forwarding service or organization.                  taxes, etc.) is not considered to be a
                                                                 Each gift parcel must show, on the out-                   cost to the beneficiary for purposes of
                                                                 side wrapper, the name and address of                     this paragraph (b).
                                                                 the donor, as well as the name and ad-                      (5) Ineligible commodities and software.
                                                                 dress of the donee, regardless of wheth-                  The following commodities and soft-
                                                                 er sent by the donor or by a forwarding                   ware are not eligible:
                                                                 service.                                                    (i) Commodities and software con-
                                                                   (ii) Each parcel must have the nota-                    trolled for national security, chemical
                                                                 tion ‘‘GIFT—Export License Not Re-                        or biological weapons, and nuclear non-
                                                                 quired’’ written on the addressee side                    proliferation, missile technology or
                                                                 of the package and the symbol ‘‘GFT’’                     crime control reasons (see Supplement
                                                                 written on any required customs dec-                      No. 1 to part 774 of the EAR);
                                                                 laration.                                                   (ii) Exports for large-scale projects of
                                                                   (b) Humanitarian donations—(1) Scope.                   the kind associated with comprehen-
                                                                 The provisions of paragraph (b) author-                   sive economic growth, such as dams
                                                                 ize exports or reexports by groups or                     and hydroelectric plants; or
                                                                 organizations of donations to meet                          (iii) Exports to Cuba of medical items
                                                                 basic human needs when those groups                       excluded by § 746.2(b)(1) of the EAR.
                                                                 or organizations have experience in                         (6) Eligible items. Eligible commod-
                                                                 maintaining a verifiable system of dis-                   ities and software are those listed in
                                                                 tribution that ensures delivery to the                    Supplement No. 2 to part 740.
                                                                 intended beneficiaries.
                                                                                                                             (7) Additional recordkeeping require-
                                                                   (2) Basic human needs. Basic human
                                                                                                                           ments. In addition to the recordkeeping
                                                                 needs are defined as those require-
                                                                                                                           requirements in part 762 of the EAR,
                                                                 ments essential to individual well-
                                                                                                                           donors must keep records containing
                                                                 being: health, food, clothing, shelter,
                                                                                                                           the following information:
                                                                 and education. These needs are consid-
                                                                 ered to extend beyond those of an                           (i) The donor organization’s identity
                                                                 emergency nature and those that meet                      and past experience as an exporter of
                                                                 direct needs for mere subsistence.                        goods to meet basic human needs;
                                                                   (3) Eligible donors. Eligible donors are                  (ii) Past and current countries to
                                                                 U.S. charitable organizations that have                   which the donative programs have been
                                                                 an established record of involvement in                   and are being directed, with particular
                                                                 donative programs and experience in                       reference to donative programs in em-
                                                                 maintaining and verifying a system of                     bargoed destinations;
                                                                 distribution to ensure delivery of com-                     (iii) Types of projects and commod-
                                                                 modities and software to the intended                     ities involved in the donative pro-
                                                                 beneficiaries. Eligible distribution ar-                  grams;
                                                                 rangements may consist of any one or                        (iv) Specific class(es) of beneficiaries
                                                                 more of the following:                                    of particular donated goods intended to
                                                                   (i) A permanent staff maintained in                     be exported under this License Excep-
                                                                 the recipient country to monitor the                      tion; and
                                                                 receipt and distribution of the dona-
                                                                 tions to the intended beneficiaries;
                                                                   (ii) Periodic spot-checks in the re-
                                                                 cipient country by members of the ex-
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                                                                 porter’s staff; or

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.13

                                                                   (v)  Information    concerning    the                     (ii) Destinations. Operation software
                                                                 source of funding for the donative pro-                   and technology may be exported or re-
                                                                 grams and the projected annual value                      exported to any destination to which
                                                                 of exports of humanitarian donations.                     the equipment for which it is required
                                                                                                                           has been or is being legally exported or
                                                                 [61 FR 64282, Dec. 4, 1996. Redesignated at 61
                                                                 FR 68579, Dec. 30, 1996; 62 FR 25458, May 9,              reexported.
                                                                 1997; 69 FR 5690, Feb. 6, 2004; 69 FR 34566,                (b) Sales technology—(1) Scope. The
                                                                 June 22, 2004; 72 FR 3945, Jan. 29, 2007; 72 FR           provisions of paragraph (b) authorize
                                                                 43531, Aug. 6, 2007]                                      exports and reexports of sales tech-
                                                                                                                           nology. ‘‘Sales technology’’ is data sup-
                                                                 § 740.13 Technology and software—un-                      porting a prospective or actual
                                                                     restricted (TSU).                                     quotation, bid, or offer to sell, lease, or
                                                                    This license exception authorizes ex-                  otherwise supply any item.
                                                                 ports and reexports of operation tech-                      (2) Provisions and destinations—(i) Pro-
                                                                 nology and software; sales technology                     visions. Sales technology may be ex-
                                                                 and software; software updates (bug                       ported or reexported provided that:
                                                                 fixes); ‘‘mass market’’ software subject                    (A) The technology is a type custom-
                                                                 to the General Software Note; and                         arily transmitted with a prospective or
                                                                 encryption source code (and cor-                          actual quotation, bid, or offer in ac-
                                                                 responding object code) that would be                     cordance with established business
                                                                 considered publicly available under                       practice; and
                                                                 § 734.3(b)(3) of the EAR. Note that                         (B) Neither the export nor the reex-
                                                                 encryption software subject to the                        port will disclose the detailed design,
                                                                 EAR is not subject to the General Soft-                   production, or manufacture tech-
                                                                 ware Note (see paragraph (d)(2) of this                   nology, or the means of reconstruction,
                                                                 section).                                                 of either the quoted item or its prod-
                                                                    (a) Operation technology and soft-                     uct. The purpose of this limitation is
                                                                 ware—(1) Scope. The provisions of para-                   to prevent disclosure of technology so
                                                                 graph (a) permit exports and reexports                    detailed that the consignee could re-
                                                                 of operation technology and software.                     duce the technology to production.
                                                                 ‘‘Operation technology’’ is the min-                        (ii) Destinations. Sales technology
                                                                 imum technology necessary for the in-                     may be exported or reexported to any
                                                                 stallation,     operation,    maintenance                 destination.
                                                                 (checking), and repair of those com-
                                                                 modities or software that are lawfully                      NOTE: Neither this section nor its use
                                                                 exported or reexported under a license,                   means that the U.S. Government intends, or
                                                                 a License Exception, or NLR. The                          is committed, to approve a license applica-
                                                                                                                           tion for any commodity, plant, software, or
                                                                 ‘‘minimum necessary’’ operation tech-
                                                                                                                           technology that may be the subject of the
                                                                 nology does not include technology for                    transaction to which such quotation, bid, or
                                                                 development or production and in-                         offer relates. Exporters are advised to in-
                                                                 cludes use technology only to the ex-                     clude in any quotations, bids, or offers, and
                                                                 tent required to ensure safe and effi-                    in any contracts entered into pursuant to
                                                                 cient use of the commodity or soft-                       such quotations, bids, or offers, a provision
                                                                 ware. Individual entries in the software                  relieving themselves of liability in the event
                                                                 and technology subcategories of the                       that a license (when required) is not ap-
                                                                 CCL may further restrict the export or                    proved by the Bureau of Industry and Secu-
                                                                 reexport of operation technology.                         rity.
                                                                    (2) Provisions and destinations—(i) Pro-                 (c) Software updates. The provisions of
                                                                 visions. Operation software may be ex-                    paragraph (c) authorize exports and re-
                                                                 ported or reexported provided that                        exports of software updates that are in-
                                                                 both of the following conditions are                      tended for and are limited to correc-
                                                                 met:                                                      tion of errors (‘‘fixes’’ to ‘‘bugs’’) in
                                                                    (A) The operation software is the                      software lawfully exported or reex-
                                                                 minimum necessary to operate equip-                       ported (original software). Such soft-
                                                                 ment authorized for export or reexport;                   ware updates may be exported or reex-
                                                                 and                                                       ported only to the same consignee to
                                                                    (B) The operation software is in ob-                   whom the original software was ex-
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                                                                 ject code.                                                ported or reexported, and such software

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                                                                 § 740.13                                                              15 CFR Ch. VII (1–1–08 Edition)

                                                                 updates may not enhance the func-                            (e) Encryption source code (and cor-
                                                                 tional capacities of the original soft-                   responding object code)—(1) Scope and
                                                                 ware. Such software updates may be                        eligibility. This paragraph (e) authorizes
                                                                 exported or reexported to any destina-                    exports and reexports, without review,
                                                                 tion to which the software for which                      of encryption source code controlled by
                                                                 they are required has been legally ex-                    ECCN 5D002 that, if not controlled by
                                                                 ported or reexported.                                     ECCN 5D002, would be considered pub-
                                                                   (d) General Software Note: ‘‘mass mar-                  licly available under § 734.3(b)(3) of the
                                                                 ket’’ software—(1) Scope. The provisions                  EAR. Such source code is eligible for
                                                                 of paragraph (d) authorize exports and                    License Exception TSU under this
                                                                 reexports of ‘‘mass market’’ software                     paragraph (e) even if it is subject to an
                                                                 subject to the General Software Note                      express agreement for the payment of a
                                                                 (see Supplement No. 2 to part 774 of the                  licensing fee or royalty for commercial
                                                                 EAR; also referenced in this section).1                   production or sale of any product de-
                                                                   (2) Exclusions. The provisions of this                  veloped using the source code. This
                                                                 paragraph (d) are not available for                       paragraph also authorizes the export
                                                                 encryption software controlled for                        and reexport of the corresponding ob-
                                                                 ‘‘EI’’ reasons under ECCN 5D002 or for                    ject code (i.e., that which is compiled
                                                                 encryption software with symmetric                        from source code that is authorized for
                                                                 key length exceeding 64-bits that quali-                  export and reexport under this para-
                                                                 fies as mass market encryption soft-                      graph) if both the object code and the
                                                                 ware under the criteria in the Cryptog-                   source code from which it is compiled
                                                                 raphy Note (Note 3) of Category 5, Part                   would be considered publicly available
                                                                 2, of the Commerce Control List (Sup-                     under § 734.3(b)(3) of the EAR, if they
                                                                 plement No. 1 to Part 774 of the EAR).                    were not controlled under ECCN 5D002.
                                                                 (Once such mass market encryption                            (2) Restrictions. This paragraph (e)
                                                                 software has been reviewed by BIS and                     does not authorize:
                                                                 released from ‘‘EI’’ and ‘‘NS’’ controls
                                                                                                                              (i) Export or reexport of any
                                                                 pursuant to § 742.15(b)(2) of the EAR, it
                                                                                                                           encryption software controlled under
                                                                 is controlled under ECCN 5D992 and is
                                                                                                                           ECCN 5D002 that does not meet the re-
                                                                 thus outside the scope of License Ex-
                                                                                                                           quirements of paragraph (e)(1), even if
                                                                 ception TSU.) See § 742.15(b)(2) of the
                                                                                                                           the software incorporates or is spe-
                                                                 EAR for exports and reexports of mass
                                                                                                                           cially designed to use other encryption
                                                                 market encryption products controlled
                                                                                                                           software that meets the requirements
                                                                 under ECCN 5D992.
                                                                                                                           of paragraph (e)(1) of this section; or
                                                                   (3) Provisions and destinations—(i) Des-
                                                                 tinations. ‘‘Mass market’’ software is                       (ii) Any knowing export or reexport
                                                                 available to all destinations except                      to a country listed in Country Group
                                                                 destinations in Country Group E:1 (see                    E:1 in Supplement No. 1 to part 740 of
                                                                 Supplement No. 1 to this part).                           the EAR.
                                                                   (ii) Provisions. ‘‘Mass market’’ treat-                    (3) Notification requirement. You must
                                                                 ment is available for software that is                    notify BIS and the ENC Encryption Re-
                                                                 generally available to the public by                      quest Coordinator via e-mail of the
                                                                 being:                                                    Internet location (e.g., URL or Internet
                                                                   (A) Sold from stock at retail selling                   address) of the source code or provide
                                                                 points, without restriction, by means                     each of them a copy of the source code
                                                                 of:                                                       at or before the time you take action
                                                                   (1) Over the counter transactions;                      to make the software publicly avail-
                                                                   (2) Mail order transactions; or                         able as that term is described in
                                                                   (3) Telephone call transactions; and                    § 734.3(b)(3) of the EAR. If you elect to
                                                                   (B) Designed for installation by the                    meet this requirement by providing
                                                                 user without further substantial sup-                     copies of the source code to BIS and
                                                                 port by the supplier.                                     the ENC Encryption Request Coordi-
                                                                                                                           nator, you must provide additional
                                                                   1 ‘‘Mass market’’ software may fall under
                                                                                                                           copies to each of them each time the
                                                                 the classification of ‘‘general use’’ software            cryptographic functionality of the soft-
                                                                 for export clearance purposes. Exporters                  ware is updated or modified. If you
                                                                 should consult the Census Bureau FTSR for                 elect to provide the Internet location
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                                                                 possible SED or AES requirements.                         of the source code, you must notify BIS

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.14

                                                                 and the ENC Encryption Request Coor-                        EDITORIAL NOTE: For FEDERAL REGISTER ci-
                                                                 dinator each time the Internet location                   tations affecting § 740.13, see the List of CFR
                                                                 is changed, but you are not required to                   Sections Affected, which appears in the
                                                                 notify them of updates or modifica-                       Finding Aids section of the printed volume
                                                                 tions made to the encryption software                     and on GPO Access.
                                                                 at the previously notified location. In
                                                                                                                           § 740.14    Baggage (BAG).
                                                                 all instances, submit the notification
                                                                 or copy to crypt@bis.doc.gov and to                         (a) Scope. This License Exception au-
                                                                 enc@nsa.gov.                                              thorizes individuals leaving the United
                                                                   NOTE     TO   PARAGRAPH       (e).  Posting
                                                                                                                           States either temporarily (i.e., trav-
                                                                 encryption source code and corresponding                  eling) or longer-term (i.e., moving) and
                                                                 object code on the Internet (e.g., FTP or                 crew members of exporting or reex-
                                                                 World Wide Web site) where it may be                      porting carriers to take to any destina-
                                                                 downloaded by anyone neither establishes                  tion, as personal baggage, the classes
                                                                 ‘‘knowledge’’ of a prohibited export or reex-             of commodities, software and tech-
                                                                 port for purposes of this paragraph, nor trig-
                                                                 gers any ‘‘red flags’’ necessitating the af-              nology described in this section.
                                                                 firmative duty to inquire under the ‘‘Know                  (b) Eligibility. Individuals leaving the
                                                                 Your Customer’’ guidance provided in Sup-                 United States may export or reexport
                                                                 plement No. 3 to part 732 of the EAR.                     any of the following commodities or
                                                                   (f) Special recordkeeping requirements:                 software for personal use of the indi-
                                                                 ECCNs 2D983 and 2E983. In addition to                     viduals or members of their immediate
                                                                 any other recordkeeping requirements                      families traveling with them to any
                                                                 set forth elsewhere in the EAR, export-                   destination or series of destinations.
                                                                 ers are required to maintain records, as                  Individuals leaving the United States
                                                                 specified in this paragraph, when ex-                     who are U.S. persons, as defined in
                                                                 porting operation software or tech-                       paragraph (b)(4)(i), may export or reex-
                                                                 nology controlled under ECCNs 2D983                       port technology as a tool of trade
                                                                 and 2E983, respectively, under License                    under paragraph (b)(4) for their per-
                                                                 Exception TSU. Records maintained                         sonal use or for the personal use of
                                                                 pursuant to this section may be re-                       members of their immediate families
                                                                 quested at any time by an appropriate                     who are traveling or moving with
                                                                 BIS official as set forth in § 762.7 of the               them, provided they are also U.S. per-
                                                                 EAR. The following information must                       sons, as defined in paragraph (b)(4)(i),
                                                                 be specially maintained for each export                   to any destination or series of destina-
                                                                 or reexport transaction, under License                    tions. Technology exports and reex-
                                                                 Exception TSU, of operation software
                                                                                                                           ports authorized under paragraph (b)(4)
                                                                 and technology controlled by ECCNs
                                                                                                                           of this section may be made as actual
                                                                 2D983 and 2E983:
                                                                   (1) A description of the software or                    shipments, transmissions, or releases.
                                                                 technology exported or reexported, in-                    Individuals leaving the United States
                                                                 cluding the ECCN, as identified on the                    temporarily (i.e., traveling) must bring
                                                                 CCL;                                                      back items exported and reexported
                                                                   (2) A description of the equipment for                  under this License Exception unless
                                                                 which the software or technology is in-                   they consume the items abroad or are
                                                                 tended to be used, including the ECCN,                    otherwise authorized to dispose of
                                                                 as indentified on the CCL;                                them under the EAR. Crew members
                                                                   (3) The intended end-use of the soft-                   may export or reexport only commod-
                                                                 ware or technology;                                       ities and software described in para-
                                                                   (4) The name and address of the end-                    graphs (b)(1) and (b)(2) of this section
                                                                 user;                                                     to any destination.
                                                                   (5) The quantity of software shipped;                     (1) Personal effects. Usual and reason-
                                                                 and                                                       able kinds and quantities for personal
                                                                   (6) The location of the equipment for                   use of wearing apparel, articles of per-
                                                                 which the software or technology is in-                   sonal adornment, toilet articles, me-
                                                                 tended to be used, including the coun-                    dicinal    supplies,    food,    souvenirs,
                                                                 try of destination.                                       games, and similar personal effects,
                                                                 [61 FR 64283, Dec. 4, 1996. Redesignated at 61            and their containers.
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                                                                 FR 68579, Dec. 30, 1996]

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                                                                 § 740.14                                                              15 CFR Ch. VII (1–1–08 Edition)

                                                                   (2) Household effects. Usual and rea-                   than that on which an individual de-
                                                                 sonable kinds and quantities for per-                     parts. Crew members of exporting car-
                                                                 sonal use of furniture, household ef-                     riers may not ship unaccompanied bag-
                                                                 fects, household furnishings, and their                   gage. Unaccompanied shipments under
                                                                 containers.                                               this License Exception shall be clearly
                                                                   (3) Vehicles. Usual and reasonable                      marked ‘‘BAGGAGE.’’ Shipments of
                                                                 kinds and quantities of vehicles, such                    unaccompanied baggage may be made
                                                                 as passenger cars, station wagons,                        at the time of, or within a reasonable
                                                                 trucks, trailers, motorcycles, bicycles,                  time before or after departure of the
                                                                 tricycles, perambulators, and their                       consignee or owner from the United
                                                                 containers.                                               States. Personal baggage controlled for
                                                                   (4) Tools of trade. Usual and reason-                   chemical and biological weapons (CB),
                                                                 able kinds and quantities of tools, in-                   missile technology (MT), national se-
                                                                 struments, or equipment and their con-                    curity (NS), encryption items (EI) or
                                                                 tainers and also technology for use in                    nuclear nonproliferation (NP) must be
                                                                 the trade, occupation, employment, vo-                    shipped within 3 months before or after
                                                                 cation, or hobby of the traveler or                       the month in which the consignee or
                                                                 members of the household who are                          owner departs the United States. How-
                                                                 traveling or moving. For special provi-                   ever, commodities controlled for CB,
                                                                 sions regarding encryption commod-                        MT, NS, EI or NP may not be exported
                                                                 ities and software subject to EI con-                     under this License Exception as unac-
                                                                 trols, see paragraph (f) of this section.                 companied baggage to Country Groups
                                                                 For a special provision that specifies                    D:1, D:2, D:3, D:4, or E:1. (See Supple-
                                                                 restrictions regarding the export or re-                  ment No. 1 of this part).
                                                                 export of technology under this para-                       (e) Special provisions: shotguns and
                                                                 graph, see paragraph (h).                                 shotgun shells. (1) A United States cit-
                                                                   (i) For purposes of this paragraph (b),                 izen or a permanent resident alien
                                                                 U.S. person is defined as follows: an in-                 leaving the United States may export
                                                                 dividual who is a citizen of the United                   or reexport shotguns with a barrel
                                                                 States, an individual who is a lawful                     length of 18 inches or over and shotgun
                                                                 permanent resident as defined by 8                        shells under this License Exception,
                                                                 U.S.C. 1101(a)(2) or an individual who is                 subject to the following limitations:
                                                                 a protected individual as defined by 8                      (i) Not more than three shotguns
                                                                 U.S.C. 1324b(a)(3).                                       may be taken on any one trip.
                                                                   (ii) [RESERVED]                                           (ii) The shotguns and shotgun shells
                                                                   (c) Limits on eligibility. The export of                must be with the person’s baggage but
                                                                 any item is limited or prohibited, if the                 they may not be mailed.
                                                                 kind or quantity is in excess of the lim-                   (iii) The shotguns and shotgun shells
                                                                 its described in this section. In addi-                   must be for the person’s exclusive use
                                                                 tion, the items must be:                                  for legitimate hunting or lawful sport-
                                                                   (1) Owned by the individuals (or by                     ing purposes, scientific purposes, or
                                                                 members of their immediate families)                      personal protection, and not for resale
                                                                 or by crew members of exporting car-                      or other transfer of ownership or con-
                                                                 riers on the dates they depart from the                   trol. Accordingly, except as provided in
                                                                 United States;                                            (e)(2) of this section, shotguns may not
                                                                   (2) Intended for and necessary and ap-                  be exported permanently under this Li-
                                                                 propriate for the use of the individuals                  cense Exception. All shotguns and un-
                                                                 or members of their immediate fami-                       used shotgun shells must be returned
                                                                 lies traveling with them, or by the                       to the United States. Note that since
                                                                 crew members of exporting carriers;                       certain countries may require an Im-
                                                                   (3) Not intended for sale or other dis-                 port Certificate or a U.S. export license
                                                                 posal; and                                                before allowing the import of a shot-
                                                                   (4) Not exported under a bill of lading                 gun, you should determine the import
                                                                 as cargo if exported by crew members.                     requirements of your country of des-
                                                                   (d) Special provision: unaccompanied                    tination in advance.
                                                                 baggage. Individuals departing the                          (2) A nonresident alien leaving the
                                                                 United States may ship unaccompanied                      United States may export or reexport
                                                                 baggage, which is baggage sent from                       under this License Exception only such
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                                                                 the United States on a carrier other                      shotguns and shotgun shells as he or

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.14

                                                                 she brought into the United States                          NOTE: Other travelers seeking to take
                                                                 under the provisions of the Department                    more than 44 lbs of baggage would require a
                                                                 of    Justice   Regulations    (27   CFR                  license from BIS pursuant to § 746.2 of the
                                                                 478.115(d)).                                              EAR.
                                                                   (f) Special provisions: encryption com-                   (h) Special provision: restrictions for
                                                                 modities and software subject to EI con-                  Export or Reexport of Technology. This
                                                                 trols on the Commerce Control List. (1) A                 authorization for the export or reex-
                                                                 U.S. citizen or permanent resident                        port of technology under the tools of
                                                                 alien of the United States as defined by                  trade provisions of paragraph (b)(4) of
                                                                 8 U.S.C. 1101(a)(20) may use this license                 this section may be used only if:
                                                                 exception to export or reexport                             (1) The technology is to be used over-
                                                                 encryption commodities and software                       seas solely by individuals or members
                                                                 to any destination not in Country                         of their immediate families traveling
                                                                 Group E:1 of Supplement No. 1 of this                     with them provided they are U.S. per-
                                                                 part.                                                     sons as defined in paragraph (b)(4)(i).
                                                                   (2) A person other than a U.S. citizen                    (2) The exporting or reexporting
                                                                 or permanent resident alien of the                        party and the recipient take adequate
                                                                 United States as defined by 8 U.S.C.                      security precautions to protect against
                                                                 1101(a)(20) (except a national of a coun-
                                                                                                                           unauthorized access to the technology
                                                                 try listed in Country Group E:1 of Sup-
                                                                                                                           while the technology is being trans-
                                                                 plement No. 1 of this part who is not a
                                                                 U.S. citizen or permanent resident                        mitted and used overseas. Examples of
                                                                 alien of the United States) may also                      security precautions to help prevent
                                                                 use this license exception to export or                   unauthorized access include the fol-
                                                                 reexport encryption commodities and                       lowing:
                                                                 software to any destination not in                          (i) Use of secure connections, such as
                                                                 Country Group E:1 of Supplement No. 1                     Virtual Private Network connections
                                                                 of this part.                                             when accessing IT networks for e-mail
                                                                   (g) Special provision: Cuba. Baggage                    and other business activities that in-
                                                                 taken by individuals leaving the                          volve the transmission and use of the
                                                                 United States for travel to Cuba pursu-                   technology authorized under this li-
                                                                 ant to this License Exception is lim-                     cense exception;
                                                                 ited to 44 pounds per traveler, except if                   (ii) Use of password systems on elec-
                                                                 authorized by the Office of Foreign As-                   tronic devices that will store the tech-
                                                                 sets Control of the Department of the                     nology authorized under this license
                                                                 Treasury to engage in travel-related                      exception; and
                                                                 transactions pursuant to a general or                       (iii) Use of personal firewalls on elec-
                                                                 specific license in one of the following                  tronic devices that will store the tech-
                                                                 categories: 31 CFR 515.562 (official busi-
                                                                                                                           nology authorized under this license
                                                                 ness of the U.S. government, foreign
                                                                                                                           exception.
                                                                 governments, and certain intergovern-
                                                                 mental organizations), 31 CFR 515.563                       (3) The technology authorized under
                                                                 (journalistic activity), 31 CFR 515.566                   these provisions may not be used for
                                                                 (religious activities), 31 CFR 515.574                    foreign production purposes or for
                                                                 (support for the Cuban people), 31 CFR                    technical assistance unless authorized
                                                                 515.575 (humanitarian projects), or 31                    by BIS;
                                                                 CFR 515.545 (exportation, importation,                      (4) Any encryption item controlled
                                                                 or transmission of informational mate-                    under ECCN 5E002 is not exported or
                                                                 rial). In calculating the 44 pound limit,                 reexported to any destination listed in
                                                                 the following commodities shall be ex-                    Country Group E:1 of Supplement No. 1
                                                                 cluded: wearing apparel and articles of                   of this part.
                                                                 personal adornment worn by the trav-
                                                                                                                           [61 FR 12768, Mar. 25, 1996. Redesignated at 61
                                                                 eler while traveling to Cuba, personal
                                                                                                                           FR 64274, Dec. 4, 1996. Redesignated at 61 FR
                                                                 safety and medical commodities for use                    68579, Dec. 30, 1996, and amended at 62 FR
                                                                 by the traveler including wheelchairs,                    25458, May 9, 1997; 63 FR 50522, Sept. 22, 1998;
                                                                 walkers, canes, crutches, portable med-                   64 FR 17973, Apr. 13, 1999; 68 FR 35784, June
                                                                 ical devices (e.g., oxygen tanks), and                    17, 2003; 69 FR 34567, June 22, 2004; 71 FR
                                                                 child safety seats and strollers for use                  30284, May 26, 2006; 72 FR 3945, Jan. 29, 2007;
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                                                                 by a child traveler.                                      72 FR 70512, Dec. 12, 2007]

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                                                                 § 740.15                                                              15 CFR Ch. VII (1–1–08 Edition)

                                                                 § 740.15 Aircraft and vessels (AVS).                         (C) The aircraft is not to be used in
                                                                    This License Exception authorizes                      any foreign military activity while
                                                                 departure from the United States of                       abroad; and
                                                                 foreign registry civil aircraft on tem-                      (D) The aircraft does not carry from
                                                                 porary sojourn in the United States                       the United States any item for which a
                                                                 and of U.S. civil aircraft for temporary                  license is required and has not been
                                                                 sojourn abroad; the export of equip-                      granted by the U.S. Government.
                                                                 ment and spare parts for permanent                           (ii) Any other operating civil aircraft
                                                                 use on a vessel or aircraft; and exports                  of U.S. registry may depart from the
                                                                 to vessels or planes of U.S. or Canadian                  United States under its own power for
                                                                 registry and U.S. or Canadian Airlines’                   any destination, except to a destina-
                                                                 installations or agents. Generally, no                    tion in Country Group E:1 (see Supple-
                                                                 License Exception symbol is necessary                     ment No. 1 to this part) (flights to
                                                                 for export clearance purposes; however,                   these destinations require a license),
                                                                 when necessary, the symbol ‘‘AVS’’                        provided that:
                                                                 may be used.
                                                                    (a) Aircraft on temporary sojourn—(1)                     (A) The aircraft does not depart for
                                                                 Foreign registered aircraft. An operating                 the purpose of sale, lease or other dis-
                                                                 civil aircraft of foreign registry that                   position of operational control of the
                                                                 has been in the United States on a tem-                   aircraft, or its equipment, parts, acces-
                                                                 porary sojourn may depart from the                        sories, or components to a foreign
                                                                 United States under its own power for                     country or any national thereof;
                                                                 any destination, provided that:                              (B) The aircraft’s U.S. registration
                                                                    (i) No sale or transfer of operational                 will not be changed while abroad;
                                                                 control of the aircraft to nationals of a                    (C) The aircraft is not to be used in
                                                                 destination in Country Group E:1 (see                     any foreign military activity while
                                                                 Supplement No. 1 to this part) has oc-                    abroad;
                                                                 curred while in the United States;                           (D) The aircraft does not carry from
                                                                    (ii) The aircraft is not departing for                 the United States any item for which
                                                                 the purpose of sale or transfer of oper-                  an export license is required and has
                                                                 ational control to nationals of a des-
                                                                                                                           not been granted by the U.S. Govern-
                                                                 tination in Country Group E:1 (see
                                                                                                                           ment; and
                                                                 Supplement No. 1 to this part); and
                                                                    (iii) It does not carry from the United                   (E) The aircraft will be operated
                                                                 States any item for which an export li-                   while abroad by a U.S. licensed pilot,
                                                                 cense is required and has not been                        except that during domestic flights
                                                                 granted by the U.S. Government.                           within a foreign country, the aircraft
                                                                    (2) U.S. registered aircraft. (i) A civil              may be operated by a pilot currently li-
                                                                 aircraft of U.S. registry operating                       censed by that foreign country.
                                                                 under an Air Carrier Operating Certifi-                      (3) Criteria. The following nine cri-
                                                                 cate, Commercial Operating Certifi-                       teria each must be met if the flight is
                                                                 cate, or Air Taxi Operating Certificate                   to qualify as a temporary sojourn. To
                                                                 issued by the Federal Aviation Admin-                     be considered a temporary sojourn, the
                                                                 istration or conducting flights under                     flight must not be for the purpose of
                                                                 operating specifications approved by                      sale or transfer of operational control.
                                                                 the Federal Aviation Administration                       An export is for the transfer of oper-
                                                                 pursuant to 14 CFR part 129 of the reg-                   ational control unless the exporter re-
                                                                 ulations of the Federal Aviation Ad-                      tains each of the following indicia of
                                                                 ministration, may depart from the                         control:
                                                                 United States under its own power for                        (i) Hiring of cockpit crew. Right to
                                                                 any destination, provided that:
                                                                                                                           hire and fire the cockpit crew.
                                                                    (A) The aircraft does not depart for
                                                                 the purpose of sale, lease or other dis-                     (ii) Dispatch of aircraft. Right to dis-
                                                                 position of operational control of the                    patch the aircraft.
                                                                 aircraft, or its equipment, parts, acces-                    (iii) Selection of routes. Right to deter-
                                                                 sories, or components to a foreign                        mine the aircraft’s routes (except for
                                                                 country or any national thereof;                          contractual commitments entered into
                                                                    (B) The aircraft’s U.S. registration                   by the exporter for specifically des-
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                                                                 will not be changed while abroad;                         ignated routes).

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.15

                                                                   (iv) Place of maintenance. Right to                     when admitted into the United States
                                                                 perform or obtain the principal main-                     under governing international fishery
                                                                 tenance on the aircraft, which prin-                      agreements.
                                                                 cipal maintenance is conducted outside                      (2) Aircraft. Equipment and spare
                                                                 a destination in Country Group E:1 (see                   parts for permanent use on an aircraft,
                                                                 Supplement No. 1 to this part), under                     when necessary for the proper oper-
                                                                 the control of a party who is not a na-                   ation of such aircraft, may be exported
                                                                 tional of any of these countries. (The                    or reexported for use on board an air-
                                                                 minimum necessary in-transit mainte-                      craft of any registry, except an aircraft
                                                                 nance may be performed in any coun-                       registered in, owned or controlled by,
                                                                 try).                                                     or under charter or lease to a country
                                                                   (v) Location of spares. Spares are not                  included in Country Group D:1, Cuba,
                                                                 located in a destination in Country                       or a national of any of these countries.
                                                                 Group E:1 (see Supplement No. 1 to this                     (3) Ship and plane stores. Usual and
                                                                 part).                                                    reasonable kinds and quantities of the
                                                                   (vi) Place of registration. The place of                following commodities may be ex-
                                                                 registration is not changed to a des-                     ported for use or consumption on board
                                                                 tination in Country Group E:1 (see                        an aircraft or vessel of any registry
                                                                 Supplement No. 1 to this part).                           during the outgoing and immediate re-
                                                                   (vii) No transfer of technology. No                     turn flight or voyage. (Note that fuel
                                                                 technology is transferred to a national                   and related commodities that qualify
                                                                 of a destination in Country Group E:1                     as ship or plane stores as described in
                                                                 (see Supplement No. 1 to this part), ex-                  this License Exception must be ex-
                                                                 cept the minimum necessary in transit                     ported under the short supply License
                                                                 maintenance to perform flight line                        Exception SPR (see § 754.2(h) of the
                                                                 servicing required to depart safely.                      EAR.)
                                                                   (viii) Color and logos. The aircraft                      (i) Deck, engine, and steward depart-
                                                                 does not bear the livery, colors, or                      ment stores, provisions, and supplies
                                                                 logos of a national of a destination in                   for both port and voyage requirements;
                                                                 Country Group E:1 (see Supplement No.                       (ii) Medical and surgical supplies;
                                                                 1 to this part).                                            (iii) Food stores;
                                                                   (ix) Flight number. The aircraft does                     (iv) Slop chest articles;
                                                                 not fly under a flight number issued to                     (v) Saloon stores or supplies.
                                                                 a national of a destination in Country                      (c) Shipments to U.S. or Canadian ves-
                                                                 Group E:1 (see Supplement No. 1 to this                   sels, planes and airline installations or
                                                                 part) as such a number appears in the                     agents—(1) Exports to vessels or planes of
                                                                 Official Airline Guide.                                   U.S. or Canadian registry. Export may
                                                                   (4) Reexports. Civil aircraft legally ex-               be made of the commodities set forth
                                                                 ported from the United States may be                      in paragraph (c)(3) of this section, for
                                                                 reexported under this section, provided                   use by or on a specific vessel or plane
                                                                 the restrictions described in this para-                  of U.S. or Canadian registry located at
                                                                 graph (a) are met.                                        any seaport or airport outside the
                                                                   (b) Equipment and spare parts for per-                  United States or Canada except a port
                                                                 manent use on a vessel or aircraft, and                   in Cuba or Country Group D:1 (exclud-
                                                                 ship and plane stores—(1) Vessel. Equip-                  ing the PRC), (see Supplement No. 1 to
                                                                 ment and spare parts for permanent                        part 740) provided that such commod-
                                                                 use on a vessel, when necessary for the                   ities are all of the following: 6
                                                                 proper operation of such vessel, may be                     (i) Ordered by the person in command
                                                                 exported or reexported for use on board                   or the owner or agent of the vessel or
                                                                 a vessel of any registry, except a vessel                 plane to which they are consigned;
                                                                 registered in Country Group D:1 (see                        (ii) Intended to be used or consumed
                                                                 Supplement No. 1 to part 740), Cuba, or                   on board such vessel or plane and nec-
                                                                 owned or controlled by, or under char-                    essary for its proper operation;
                                                                 ter or lease to any of these countries or                   (iii) In usual and reasonable kinds
                                                                 their nationals. In addition, other                       and quantities during times of extreme
                                                                 equipment and services for necessary                      need; and
                                                                 repair to fishing and fishery support
                                                                 vessels of Country Group D:1 may be                          6 Where a validated license is required, see
ebenthall on PRODPC61 with CFR




                                                                 exported for use on board such vessels                    §§ 748.2 and 748.4(g) of the EAR.

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                                                                 § 740.15                                                              15 CFR Ch. VII (1–1–08 Edition)

                                                                   (iv) Shipped as cargo for which a                       to vessels or planes of U.S. or Canadian reg-
                                                                 Shipper’s Export Declaration (SED) or                     istry as described in this License Exception
                                                                 Automated Export System (AES)                             must be shipped under the short supply Li-
                                                                                                                           cense Exception SPR (see § 754.2(h) of the
                                                                 record is filed in accordance with the
                                                                                                                           EAR);
                                                                 requirements of the Foreign Trade Sta-
                                                                 tistics Regulations (15 CFR part 30), ex-                   (i) Deck, engine, and steward depart-
                                                                 cept that an SED or AES record is not                     ment stores, provisions, and supplies
                                                                 required when any of the commodities,                     for both port and voyage requirements;
                                                                 other than fuel, is exported by U.S. air-                   (ii) Medical and surgical supplies;
                                                                 lines to their own aircraft abroad for                      (iii) Food stores;
                                                                 their own use.                                              (iv) Slop chest articles;
                                                                   (2) Exports to U.S. or Canadian airline’s                 (v) Saloon stores or supplies; and
                                                                 installation or agent. Exports of the                       (vi) Equipment and spare parts.
                                                                 commodities set forth in paragraph                          (d) Vessels on temporary sojourn. (1)
                                                                 (c)(3) of this section, except fuel, may                  Foreign flagged vessels. A foreign
                                                                 be made to a U.S. or Canadian air-                        flagged vessel in the United States may
                                                                 line’s 7 installation or agent in any for-                depart from the United States under
                                                                 eign destination except Cuba or Coun-                     its own power for any destination, pro-
                                                                 try Group D:1 (excluding the PRC), (see                   vided that:
                                                                 Supplement No. 1 to part 740) provided                      (i) No sale or transfer of operational
                                                                 such commodities are all of the fol-                      control of the vessel to nationals of a
                                                                 lowing:                                                   destination in Country Group E:1 (see
                                                                   (i) Ordered by a U.S. or Canadian air-                  Supplement No.1 to this part) has oc-
                                                                 line and consigned to its own installa-                   curred while in the United States;
                                                                 tion or agent abroad;                                       (ii) The vessel is not departing for
                                                                   (ii) Intended for maintenance, repair,                  the purpose of sale or transfer of oper-
                                                                 or operation of aircraft registered in                    ational control to nationals of a des-
                                                                 either the United States or Canada,                       tination in Country Group E:1 (see Sup-
                                                                 and necessary for the aircraft’s proper                   plement No. 1 to this part); and
                                                                 operation, except where such aircraft is                    (iii) The vessel does not carry from
                                                                 located in, or owned, operated or con-                    the United States any item for which a
                                                                 trolled by, or leased or chartered to,                    license is required and has not been
                                                                 Cuba or Country Group D:1 (excluding                      granted by the U.S. Government.
                                                                 the PRC) (see Supplement No. 1 to part                      (2) U.S. flagged vessels. A U.S. flagged
                                                                 740) or a national of such country;                       vessel may depart from the United
                                                                   (iii) In usual and reasonable kinds                     States under its own power for any des-
                                                                 and quantities; and                                       tination, provided that:
                                                                   (iv) Shipped as cargo for which a                         (i) The vessel does not depart for the
                                                                 Shipper’s Export Declaration (SED) or                     purpose of sale, lease, or transfer of
                                                                 Automated Export System (AES)                             operational control of the vessel, or its
                                                                 record is filed in accordance with the                    equipment, parts, accessories, or com-
                                                                 requirements of the Foreign Trade Sta-                    ponents, to a foreign country or any
                                                                 tistics Regulations (15 CFR part 30), ex-                 national thereof;
                                                                 cept that an SED or AES record is not                       (ii) The vessel’s U.S. flag will not be
                                                                 required when any of these commod-                        changed while abroad;
                                                                 ities is exported by U.S. airlines to                       (iii) The vessel will not be used in
                                                                 their own installations and agents                        any foreign military activity while
                                                                 abroad for use in their aircraft oper-                    abroad;
                                                                 ations.                                                     (iv) The vessel will not carry from
                                                                   (3) Applicable commodities. This para-                  the United States any item for which a
                                                                 graph (c) applies to the following com-                   license is required and has not been
                                                                 modities, subject to the provisions in                    granted by the U.S. Government;
                                                                 paragraph (c)(1) and (c)(2) of this sec-                    (v) Spares for the vessel are not lo-
                                                                 tion:                                                     cated in a destination in Country
                                                                  NOTE TO PARAGRAPH (c)(3) OF THIS SECTION:                Group E:1 (see Supplement No. 1 to this
                                                                 Fuel and related commodities for shipment                 part);
                                                                                                                             (vi) Technology is not transferred to
                                                                  7 See Part 772 of the EAR for definitions of             a national of a destination in Country
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                                                                 United States and Canadian airlines.                      Group E:1 (see Supplement No. 1 to this

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.16

                                                                 part), except the minimum necessary                         (v) Spares for the vessel are not lo-
                                                                 in-transit maintenance to perform                         cated in a destination in Country
                                                                 servicing required to depart and enter                    Group E:1 (see Supplement No. 1 to this
                                                                 a port safely; and                                        part);
                                                                   (vii) The vessel does not bear the liv-                   (vi) Technology is not transferred to
                                                                 ery, colors, or logos of a national of a                  a national of a destination in Country
                                                                 destination in Country Group E:1 (see                     Group E:1 (see Supplement No. 1 to this
                                                                 Supplement No. 1 to this part).                           part), except the minimum necessary
                                                                   (3) Criteria for temporary sojourn of                   in-transit maintenance to perform
                                                                 vessels. The following criteria must be                   servicing required to depart and enter
                                                                 met if a voyage is to be considered a                     a port safely; and
                                                                 temporary sojourn under this para-                          (vii) The vessel does not bear the liv-
                                                                 graph (d). To be considered a tem-                        ery, colors, or logos of a national of a
                                                                 porary sojourn, the voyage must not be                    destination in Country Group E:1 (see
                                                                 for the purpose of sale or transfer of                    Supplement No. 1 to this part).
                                                                 operational control. A transfer of oper-                    (5) No vessels may be exported or re-
                                                                 ational control occurs unless the ex-                     exported under this License Exception
                                                                 porter or reexporter retains each of the                  to a country in Country Group E:1.
                                                                 following indicia of control:                             [61 FR 12678, Mar. 25, 1996. Redesignated and
                                                                   (i) Hiring of crew. Right to hire and                   amended at 61 FR 64274, 64283, Dec. 4, 1996.
                                                                 fire the crew.                                            Redesignated at 61 FR 68579, Dec. 30, 1996; 65
                                                                                                                           FR 38150, June 19, 2000; 66 FR 42110, Aug. 10,
                                                                   (ii) Dispatch of vessel. Right to dis-                  2001; 68 FR 50472, Aug. 21, 2003; 69 FR 23628,
                                                                 patch the vessel.                                         Apr. 29, 2004; 70 FR 14390, Mar. 22, 2005; 70 FR
                                                                   (iii) Selection of routes. Right to deter-              67348, Nov. 7, 2005; 71 FR 51717, Aug. 31, 2006]
                                                                 mine the vessel’s routes (except for
                                                                 contractual commitments entered into                      § 740.16 Additional permissive reex-
                                                                 by the exporter for specifically des-                           ports (APR).
                                                                 ignated routes).                                             This License Exception allows the
                                                                   (iv) Place of maintenance. Right to                     following reexports:
                                                                 perform or obtain the principal main-                        (a) Reexports from Country Group A:1
                                                                 tenance on the vessel, which principal                    and cooperating countries. Reexports
                                                                 maintenance is conducted outside a                        may be made from Country Group A:1
                                                                 destination in Country Group E:1 (see                     or from cooperating countries, pro-
                                                                 Supplement No. 1 to this part), under                     vided that:
                                                                 the control of a party who is not a na-                      (1) The reexport is made in accord-
                                                                 tional of any of these countries. (The                    ance with the conditions of an export
                                                                 minimum necessary in-transit mainte-                      authorization from the government of
                                                                 nance may be performed in any coun-                       the reexporting country;
                                                                 try).                                                        (2) The commodities being reexported
                                                                   (4) Reexports. Vessels subject to the                   are not controlled for NP, CB, MT, SI,
                                                                 EAR may be reexported under this sec-                     or CC reasons; and
                                                                 tion on temporary sojourn, provided                          (3) The reexport is destined to either:
                                                                                                                              (i) A country in Country Group B that
                                                                 that:
                                                                                                                           is not also included in Country Group
                                                                   (i) The vessel does not depart for the                  D:2, D:3, or D:4; Cambodia; or Laos; and
                                                                 purpose of sale, lease, or transfer of                    the commodity being reexported is
                                                                 operational control of the vessel, or its                 both controlled for national security
                                                                 equipment, parts, accessories, or com-                    reasons and not controlled for export
                                                                 ponents, to a foreign country or any                      to Country Group A:1; or
                                                                 national thereof;                                            (ii) A country in Country Group D:1
                                                                   (ii) The vessel’s flag will not be                      (National Security) (see Supplement
                                                                 changed while abroad;                                     No. 1 to part 740), other than Cambodia,
                                                                   (iii) The vessel will not be used in                    Laos, or North Korea and the com-
                                                                 any foreign military activity while                       modity being reexported is controlled
                                                                 abroad;                                                   for national security reasons.
                                                                   (iv) The vessel will not carry any                         (b) Reexports to and among Country
                                                                 item for which a license is required and                  Group A:1 and cooperating countries. Re-
                                                                 has not been granted by the U.S. Gov-                     exports may be made to and among
ebenthall on PRODPC61 with CFR




                                                                 ernment;                                                  Country Group A:1 and cooperating

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                                                                 § 740.17                                                              15 CFR Ch. VII (1–1–08 Edition)

                                                                 countries, provided that eligible com-                    States to any destination with knowl-
                                                                 modities are for use or consumption                       edge that they will be reexported di-
                                                                 within a Country Group A:1 (see Sup-                      rectly or indirectly, in whole or in part
                                                                 plement No. 1 to part 740) or cooper-                     to Sudan is prohibited without a li-
                                                                 ating country, or for reexport from                       cense.
                                                                 such country in accordance with other                       (j) Reexports of items controlled by
                                                                 provisions of the EAR. All commodities                    NP Column 1 (see Supplement No. 1 to
                                                                 are eligible except those controlled for                  part 774 of the EAR) to, among, and
                                                                 nuclear nonproliferation reasons or                       from countries described in Country
                                                                 missile technology reasons.                               Group A:4 (see Supplement No. 1 to
                                                                   (c) Reexports to a destination to                       part 740), except:
                                                                 which direct shipment from the United                       (1) Reexports from countries that are
                                                                 States is authorized under an unused                      not identified in Country Group A:1 of
                                                                 outstanding license may be made under                     items that are controlled for NS rea-
                                                                 the terms of that license. Such reex-                     sons to destinations in Country Group
                                                                 ports shall be recorded in the same
                                                                                                                           D:1; and
                                                                 manner as exports are recorded, re-
                                                                                                                             (2) Reexports to destinations in
                                                                 gardless of whether the license is par-
                                                                                                                           Country Group E:2 and Country Group
                                                                 tially or wholly used for reexport pur-
                                                                 poses. (See part 762 of the EAR for rec-                  D:2.
                                                                 ordkeeping requirements.)                                 [61 FR 12768, Mar. 25, 1996. Redesignated at 61
                                                                   (d) Reexports of any item from Can-                     FR 64274, Dec. 4, 1996. Redesignated at 61 FR
                                                                 ada that, at the time of reexport, may                    68579, Dec. 30, 1996, and amended at 62 FR
                                                                 be exported directly from the United                      25458, May 9, 1997; 63 FR 42228, Aug. 7, 1998; 65
                                                                 States to the new country of destina-                     FR 38150, June 19, 2000; 65 FR 60855, Oct. 13,
                                                                                                                           2000; 67 FR 10614, Mar. 8, 2002; 72 FR 43531,
                                                                 tion under any License Exception.
                                                                                                                           Aug. 6, 2007]
                                                                   (e) Reexports (return) to the United
                                                                 States of any item. If the reexporting                    § 740.17 Encryption commodities and
                                                                 party requests written authorization                          software (ENC).
                                                                 because the government of the country
                                                                 from which the reexport will take place                      Subject to the eligibility criteria and
                                                                 requires formal U.S. Government ap-                       restrictions described in paragraphs
                                                                 proval, such authorization will gen-                      (a), (b) and (f) of this section, License
                                                                 erally be given.                                          Exception ENC is available for the ex-
                                                                   (f) Reexports from a foreign destina-                   port and reexport of: commodities and
                                                                 tion to Canada of any item if the item                    software      controlled       by     ECCNs
                                                                 could be exported to Canada without a                     5A002.a.1, .a.2, .a.5, .a.6, and .a.9, 5B002,
                                                                 license.                                                  and 5D002 that do not meet the ‘‘mass
                                                                   (g) Reexports between Switzerland                       market’’ criteria of the Cryptography
                                                                 and Liechtenstein.                                        Note (Note 3) of Category 5, part 2
                                                                   (h) Shipments of foreign-made prod-                     (‘‘Information Security’’) of the Com-
                                                                 ucts that incorporate U.S.-origin com-                    merce Control List (Supplement No. 1
                                                                 ponents may be accompanied by U.S.-                       to part 774 of the EAR); technology
                                                                 origin controlled spare parts, provided                   controlled by ECCN 5E002; and certain
                                                                 that they do not exceed 10 percent of                     technical assistance as described in
                                                                 the value of the foreign-made product,                    § 744.9 of the EAR. The initial export or
                                                                 subject to the restrictions in § 734.4 of                 reexport of an encryption commodity
                                                                 the EAR.                                                  or software under paragraphs (b)(2) or
                                                                   (i) Reexports to Sudan of items con-                    (b)(3) of this section is subject to a 30
                                                                 trolled by ECCNs 2A994; 3A992.a;                          day waiting period, as described in
                                                                 5A991.g; 5A992; 6A991; 6A998; 7A994;                      paragraph (d)(2) of this section. In addi-
                                                                 8A992.d, .e, .f, and .g; 9A990.a and .b;                  tion, persons exporting or reexporting
                                                                 and 9A991.d and .e. In addition, items                    under paragraphs (a), (b)(2) or (b)(3) of
                                                                 in these ECCNs are not counted as con-                    this section must file the semi-annual
                                                                 trolled U.S. content for purposes of de-                  reports required by paragraph (e) of
                                                                 termining license requirements for                        this section. Review request procedures
                                                                 U.S. parts, components, and materials                     for encryption items eligible for Li-
                                                                 incorporated in foreign-made products.                    cense Exception ENC are described in
ebenthall on PRODPC61 with CFR




                                                                 However, the export from the United                       paragraph (d) of this section (e.g., for

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.17

                                                                 items that have not previously been re-                   that, prior to October 19, 2000, were au-
                                                                 viewed, or for items that have been re-                   thorized for export or reexport under a
                                                                 viewed but for which the cryptographic                    license or Encryption Licensing Ar-
                                                                 functionality has been changed). See                      rangement, or were reviewed and au-
                                                                 § 742.15(b)(2) of the EAR for similar re-                 thorized for export and reexport to en-
                                                                 view procedures for ‘‘mass market’’                       tities other than U.S. subsidiaries
                                                                 encryption commodities and software.                      under License Exception ENC. No addi-
                                                                    (a) Exports, reexports, and technical as-              tional U.S. Government review is re-
                                                                 sistance to countries listed in Supplement                quired under this paragraph for export
                                                                 No. 3 to this part. This paragraph (a) au-                or reexport of encryption technology
                                                                 thorizes export or reexport of items                      that, prior to October 19, 2000, was ap-
                                                                 controlled under ECCNs 5A002.a.1, .a.2,                   proved for export or reexport under a
                                                                 .a.5, .a.6, or .a.9, 5B002, 5D002, or 5E002,              license or Encryption Licensing Ar-
                                                                 and provision of technical assistance                     rangement.
                                                                 described in § 744.9 of the EAR, to end-                    (3) Other transactions. For any use not
                                                                 users in countries listed in Supplement                   described in paragraph (a)(1) of this
                                                                 No. 3 to part 740 of the EAR. This para-                  section, before you export or reexport
                                                                 graph also authorizes exports or reex-                    any item or related technical assist-
                                                                 ports to foreign subsidiaries and offices                 ance that has not been previously re-
                                                                 of end-users headquartered in Canada                      viewed by the U.S. Government and au-
                                                                 or in countries listed in Supplement                      thorized under this paragraph (a), you
                                                                 No. 3 to part 740. In addition, the trans-                must submit a review request in ac-
                                                                 action must meet the terms of para-                       cordance with paragraph (d) of this sec-
                                                                 graphs (a)(1), (a)(2), or (a)(3) of this sec-             tion.
                                                                 tion.                                                       (b) Exports and reexports for U.S. sub-
                                                                    (1) Internal development of new prod-                  sidiaries and to countries not listed in
                                                                 ucts. No prior review is required for ex-                 Supplement No. 3 to this part—(1)
                                                                 ports or reexports of U.S. origin                         Encryption items for U.S. subsidiaries.
                                                                 encryption items or related technical                     This paragraph (b)(1) authorizes export,
                                                                 assistance under this paragraph (a) to                    or reexport or items controlled under
                                                                 private sector end-users that are                         ECCNs 5A002.a.1, .a.2, .a.5, .a.6, or .a.9,
                                                                 headquartered in Canada or in coun-                       5B002, 5D002 or 5E002:
                                                                 tries listed in Supplement No. 3 to part                    (i) To any ‘‘U.S. subsidiary’’; and
                                                                 740, for internal use for the develop-                      (ii) By a U.S. company and its sub-
                                                                 ment of new products by those end-                        sidiaries to foreign nationals who are
                                                                 users and their offices or subsidiaries.                  employees, contractors or interns of a
                                                                 Any encryption item produced or de-                       U.S. company or its subsidiaries if the
                                                                 veloped with an item exported or reex-                    items are for internal company use, in-
                                                                 ported under this paragraph (a)(1) is                     cluding the development of new prod-
                                                                 subject to the EAR and requires review                    ucts.
                                                                 and authorization before any sale or re-                    (iii) General restriction. All items pro-
                                                                 transfer outside of the private sector                    duced or developed with commodities,
                                                                 end-user that developed it. In this                       software or technology exported under
                                                                 paragraph (a)(1), private sector end-                     this paragraph (b)(1) are subject to the
                                                                 user means:                                               EAR and require review and authoriza-
                                                                    (i) An individual who is not acting on                 tion before sale or transfer outside the
                                                                 behalf of any foreign government; or                      U.S. company and its subsidiaries.
                                                                    (ii) A commercial firm (including its                    (2) Encryption commodities and soft-
                                                                 subsidiary and parent firms, and other                    ware restricted to non-‘‘government end-
                                                                 subsidiaries of the same parent) that is                  users.’’ This paragraph (b)(2) authorizes
                                                                 not wholly owned by, or otherwise con-                    the export and reexport of items de-
                                                                 trolled by or acting on behalf of, any                    scribed in § 740.17(b)(2)(iii) of the EAR
                                                                 foreign government.                                       that do not provide an ‘‘open cryp-
                                                                    (2) Items previously reviewed by the                   tographic interface’’ and that are con-
                                                                 U.S. Government. No additional U.S.                       trolled by ECCNs 5A002.a.1, .a.2, .a.5,
                                                                 Government review is required under                       .a.6, or .a.9, or 5D002 to individuals,
                                                                 this paragraph (a) for export or reex-                    commercial firms, and other entities
                                                                 port of encryption commodities or soft-                   that are not ‘‘government end-users’’
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                                                                 ware or parts or components thereof                       and that are not located in a country

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                                                                 § 740.17                                                              15 CFR Ch. VII (1–1–08 Edition)

                                                                 listed in Supplement No. 3 to this part.                     (2) Wire (line), cable or fiber-optic
                                                                 In addition, the transaction must meet                    WAN, MAN or VPN single-channel
                                                                 the provisions of either § 740.17(b)(2)(i)                input data rate exceeding 44 Mbps; or
                                                                 or (ii) of the EAR.                                          (3) Maximum number of concurrent
                                                                    (i) Commodities and software previously                encrypted data tunnels or channels ex-
                                                                 reviewed by the U.S. Government. No ad-                   ceeding 250; or
                                                                 ditional U.S. Government review is re-                       (4)    Air-interface    coverage    (e.g.,
                                                                 quired under this paragraph (b)(2) for                    through base stations, access points to
                                                                 export or reexports of encryption com-                    mesh networks, bridges, etc.) exceeding
                                                                 modities or software or parts or compo-                   1,000 meters, where any of the fol-
                                                                 nents thereof that, prior to October 19,                  lowing applies:
                                                                 2000, were authorized for export or re-                      (i) Maximum data rates exceeding 5
                                                                 export under a license or Encryption                      Mbps (at operating ranges beyond 1,000
                                                                 Licensing Arrangement, or were re-                        meters); or
                                                                 viewed and authorized for export and                         (ii) Maximum number of concurrent
                                                                 reexport to entities other than U.S.                      full-duplex voice channels exceeding 30;
                                                                 subsidiaries under License Exception                      or
                                                                 ENC.                                                         (iii) Substantial support is required
                                                                    (ii) Other commodities and software not                for installation or use.
                                                                 previously reviewed. Before exporting or                     (B) Encryption source code that
                                                                 reexporting any item that has not been                    would not be eligible for export or reex-
                                                                 reviewed by the U.S. Government and                       port under License Exception TSU be-
                                                                 authorized under this paragraph (b)(2),                   cause it is not publicly available as
                                                                 you must submit a review request in                       that term is used in § 740.13(e)(1) of the
                                                                 accordance with paragraph (d) of this                     EAR.
                                                                 section and wait until 30 days after                         (C) Encryption commodities or soft-
                                                                 that request is registered (as defined in                 ware that do not provide an ‘‘open
                                                                 § 750.4(a)(2) of the EAR) with BIS. Days                  cryptographic interface’’, but that
                                                                 during which the review request is on                     have:
                                                                 ‘‘hold without action’’ status are not                       (1) Been modified or customized for
                                                                 counted towards fulfilling the 30 day                     government end-user(s) or government
                                                                 waiting period.                                           end-use (e.g. to secure departmental,
                                                                    (iii) The encryption commodities,                      police, state security, or emergency re-
                                                                 software and components eligible for                      sponse communications); or
                                                                 export or reexport under this para-                          (2) Cryptographic functionality that
                                                                 graph (b)(2) (see paragraph (b)(3) of this                has been modified or customized to
                                                                 section for commodities, software and                     customer specification; or
                                                                 components not listed in this para-                          (3) Cryptographic functionality or
                                                                 graph (b)(2)(iii)) are:                                   ‘‘encryption       component’’      (except
                                                                    (A) Network infrastructure commod-                     encryption software that would be con-
                                                                 ities and software, and parts and com-                    sidered publicly available, as that term
                                                                 ponents thereof (including commod-                        is used in § 740.13(e)(1) of the EAR) that
                                                                 ities and software necessary to acti-                     is user-accessible and can be easily
                                                                 vate       or     enable    cryptographic                 changed by the user.
                                                                 functionality in network infrastruc-                         (D) ‘‘Cryptanalytic items’’; or
                                                                 ture products) providing secure Wide                         (E) Encryption commodities and soft-
                                                                 Area Network (WAN), Metropolitan                          ware that provide functions necessary
                                                                 Area Network (MAN), Virtual Private                       for quantum cryptography; or
                                                                 Network (VPN), satellite, cellular or                        (F) Encryption commodities and soft-
                                                                 trunked communications meeting any                        ware that have been modified or cus-
                                                                 of the following with key lengths ex-                     tomized for computers controlled by
                                                                 ceeding 64-bits for symmetric algo-                       ECCN 4A003.
                                                                 rithms:                                                      (3) Encryption commodities, software
                                                                    (1) Aggregate encrypted WAN, MAN,                      and components available to both ‘‘gov-
                                                                 VPN or backhaul throughput (includes                      ernment end-users’’ and to non-‘‘govern-
                                                                 communications through wireless net-                      ment end-users’’. This paragraph au-
                                                                 work elements such as gateways, mo-                       thorizes export and reexport of com-
                                                                 bile switches, controllers, etc.) greater                 modities, software and components
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                                                                 than 44 Mbps.; or                                         controlled by ECCNs 5A002.a.1, .a.2,

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.17

                                                                 .a.5, or .a.6, 5B002, or 5D002. To be eligi-              the review request to BIS and the ENC
                                                                 ble under this paragraph (b)(3) the re-                   Encryption Request Coordinator.
                                                                 quirements of paragraphs (b)(3)(i) and                      (ii) Exemptions from the review require-
                                                                 (b)(3)(ii) must be met.                                   ment. The following products do not re-
                                                                    (i) The commodities or software must                   quire review under this license excep-
                                                                 not:                                                      tion, but remain subject to the EAR
                                                                    (A) Provide an ‘‘open cryptographic                    (including all terms and provisions of
                                                                 interface’’; or                                           this license exception, and all licensing
                                                                    (B) Be listed in paragraph (b)(2) of                   requirements that may apply to a par-
                                                                 this section.                                             ticular item or transaction for reasons
                                                                    (ii) Review and authorization require-                 other than encryption):
                                                                 ment. (A) Commodities and software pre-                     (A) Commodities and software that
                                                                 viously reviewed by the U.S. Government.                  would not otherwise be controlled
                                                                 Encryption commodities, software and                      under Category 5 (telecommunications
                                                                 components reviewed and authorized                        and ‘‘information security’’) of the
                                                                 by BIS for export and reexport as ‘‘re-                   Commerce Control List, but that are
                                                                 tail’’ commodities or software under                      controlled under ECCN 5A002 or 5D002
                                                                 this paragraph (b)(3) prior to December                   only because they incorporate compo-
                                                                 9, 2004 do not require additional review                  nents or software that provide short-
                                                                 or authorization for export or reexport                   range wireless encryption functions
                                                                 under this paragraph.                                     (e.g., with an operating range typically
                                                                    (B) Other commodities and software not                 not exceeding 100 meters);
                                                                 previously reviewed. Before exporting or                    (B) Foreign products developed with
                                                                 reexporting any item that has not been                    or incorporating U.S.-origin encryption
                                                                 reviewed by the U.S. Government and                       source code, components or toolkits (or
                                                                 authorized under this paragraph (b)(3),                   otherwise designed to operate with
                                                                 you must submit a review request in                       U.S. products, e.g., via signing), pro-
                                                                 accordance with paragraph (d) of this                     vided that the U.S.-origin encryption
                                                                 section and wait until 30 days after                      items (and related technical assist-
                                                                 that request is registered (as defined in                 ance, as described in § 744.9 of the EAR)
                                                                 § 750.4(a)(2) of the EAR) with BIS. Days                  have previously been reviewed and au-
                                                                 during which the review request is on                     thorized by BIS and the cryptographic
                                                                 ‘‘hold without action’’ are not counted                   functionality has not been changed.
                                                                 towards fulfilling the 30 day waiting                       (c) Reexports and transfers. U.S. or for-
                                                                 period.                                                   eign distributors, resellers or other en-
                                                                    (4) Exemptions from the 30 day waiting                 tities who are not original manufactur-
                                                                 period and review requirements. (i) Ex-                   ers of encryption commodities and
                                                                 emptions from the 30 day waiting period.                  software are permitted to use License
                                                                 Items listed in this paragraph (b)(4)(i)                  Exception ENC only in instances where
                                                                 may be exported or reexported under                       the export or reexport meets the appli-
                                                                 authority of paragraphs (b)(2) or (b)(3)                  cable terms and conditions of this sec-
                                                                 immediately upon filing the review re-                    tion. Transfers of encryption items
                                                                 quests required by those paragraphs                       listed in paragraph (b) of this section
                                                                 provided all other requirements for ex-                   to government end-users, or for govern-
                                                                 port or reexport under the paragraph                      ment end-uses, within the same coun-
                                                                 being relied upon are met.                                try are prohibited, unless otherwise au-
                                                                    (A) Encryption commodities and soft-                   thorized by license or license excep-
                                                                 ware (including key management prod-                      tion. Foreign products developed with
                                                                 ucts) with key lengths not exceeding 64                   or incorporating U.S.-origin encryption
                                                                 bits for symmetric algorithms, 1024                       source code, components or toolkits re-
                                                                 bits for asymmetric key exchange algo-                    main subject to the EAR, but do not re-
                                                                 rithms, and 160 bits for elliptic curve                   quire review (for encryption reasons)
                                                                 algorithms;                                               by BIS. These products can be exported
                                                                    (B) Encryption source code that                        or reexported under License Exception
                                                                 would not be considered publicly avail-                   ENC without notification and without
                                                                 able for export or reexport under Li-                     further authorization (for encryption
                                                                 cense Exception TSU, provided that a                      reasons) from BIS. Such products in-
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                                                                 copy of your source code is included in                   clude foreign-developed products that

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                                                                 § 740.17                                                              15 CFR Ch. VII (1–1–08 Edition)

                                                                 are designed to operate with U.S. prod-                   to ENC eligibility. Time on such ‘‘hold
                                                                 ucts through a cryptographic interface.                   without action’’ status shall not be
                                                                   (d) Review request procedures. To re-                   counted towards fulfilling the 30 day
                                                                 quest review of your encryption items                     waiting period specified in this para-
                                                                 under License Exception ENC (e.g., for                    graph and in paragraphs (b)(2) and
                                                                 items that have not previously been re-                   (b)(3) of this section. BIS may require
                                                                 viewed, or for items that have been re-                   you to supply additional relevant tech-
                                                                 viewed but for which the cryptographic                    nical     information      about     your
                                                                 functionality has been changed), you                      encryption item(s) or information that
                                                                 must submit to BIS and to the ENC                         pertains to their eligibility for License
                                                                 Encryption Request Coordinator the                        Exception ENC at any time, before or
                                                                 information described in paragraph                        after the expiration of the 30 day wait-
                                                                 (d)(1) of this section and in paragraphs                  ing period specified in this paragraph
                                                                 (a) through (e) of Supplement No. 6 to                    and in paragraphs (b)(2) and (b)(3) of
                                                                 part 742 of the EAR (Guidelines for                       this section. If you do not supply such
                                                                 Submitting      Review    Requests      for               information within 14 days after re-
                                                                 Encryption Items).                                        ceiving a request for it from BIS, BIS
                                                                   (1) Instructions for requesting review.                 may return your review request(s)
                                                                 Review requests must be submitted on                      without action or otherwise suspend or
                                                                 Form BIS–748P (Multipurpose Applica-                      revoke your eligibility to use License
                                                                 tion), or its electronic equivalent, as                   Exception ENC for that item(s). At
                                                                 described in § 748.3 of the EAR. To en-                   your request, BIS may grant you up to
                                                                 sure that your review request is prop-                    an additional 14 days to provide the re-
                                                                 erly routed, insert the phrase ‘‘License                  quested information. Any request for
                                                                 Exception ENC’’ in Block 9 (Special                       such an additional number of days
                                                                 Purpose) of the paper or electronic ap-                   must be made prior to the date by
                                                                 plication. Also, place an ‘‘X’’ in the box                which the information was otherwise
                                                                 marked ‘‘Classification Request’’ in                      due to be provided to BIS, and may be
                                                                 Block 5 (Type of Application) of Form                     approved if BIS concludes that addi-
                                                                 BIS–748P or select ‘‘Commodity Classi-                    tional time is necessary.
                                                                 fication’’ if filing electronically. Nei-                   (3) Key length increases. Commodities
                                                                 ther the electronic nor paper forms                       and software that are modified only to
                                                                 provide a separate Block to check for                     upgrade the key length used for con-
                                                                 the submission of encryption review re-                   fidentiality or key exchange algo-
                                                                 quests. Failure to properly complete                      rithms (after having been reviewed and
                                                                 these items may delay consideration of                    authorized for License Exception ENC
                                                                 your review request. Review requests                      by BIS) may be exported or reexported
                                                                 that are not submitted electronically                     under the previously authorized provi-
                                                                 to BIS should be mailed to the address                    sion of License Exception ENC without
                                                                 indicated on the BIS–748P form. See                       further review, provided:
                                                                 paragraph (e)(5)(ii) of this section for                    (i) The exporter or reexporter cer-
                                                                 the mailing address for the ENC                           tifies to BIS and the ENC Encryption
                                                                 Encryption Request Coordinator.                           Request Coordinator that no change to
                                                                   (2) Action by BIS. Upon completion of                   the encryption functionality has been
                                                                 its review, BIS will send you written                     made other than to upgrade the key
                                                                 notice of the provisions, if any, of this                 length for confidentiality or key ex-
                                                                 section under which your items may be                     change algorithms;
                                                                 exported or reexported. If BIS has not,                     (ii) The certification includes the
                                                                 within 30 days of registration of a com-                  original authorization number issued
                                                                 plete review request from you, in-                        by BIS and the date of issuance;
                                                                 formed you that your item is not au-                        (iii) The certification is received by
                                                                 thorized for License Exception ENC,                       BIS and the ENC Encryption Request
                                                                 you may export or reexport under the                      Coordinator before the export or reex-
                                                                 applicable provisions of License Excep-                   port of the upgraded product; and
                                                                 tion ENC. BIS may hold your review                          (iv) The certification is e-mailed to
                                                                 request without action if necessary to                    crypt@bis.doc.gov and enc@nsa.gov.
                                                                 obtain additional information or for                        (e) Reporting requirements—(1) Semi-
                                                                 any other reason necessary to ensure                      annual reporting requirement. Semi-an-
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                                                                 an accurate determination with respect                    nual reporting is required for exports

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                                                                 Bureau of Industry and Security, Commerce                                                           § 740.17

                                                                 to all destinations other than Canada,                    of the final foreign product; the algo-
                                                                 and for reexports from Canada, under                      rithm and key lengths used; general
                                                                 this      license   exception.    Certain                 programming interfaces to the product,
                                                                 encryption items and transactions are                     if known; any standards or protocols
                                                                 excluded from this reporting require-                     that the foreign product adheres to;
                                                                 ment (see paragraph (e)(4) of this sec-                   and source code, if available).
                                                                 tion). For instructions on how to sub-                      (4) Exclusions from reporting require-
                                                                 mit your reports, see paragraph (e)(5)                    ments. Reporting is not required for the
                                                                 of this section.                                          following items and transactions:
                                                                    (2) General information required. Ex-                    (i) Any encryption item exported or
                                                                 porters must include all of the fol-                      reexported under paragraph (a)(1) or
                                                                 lowing applicable information in their                    (b)(1) of this section;
                                                                 reports:                                                    (ii) Encryption commodities or soft-
                                                                    (i) For items exported (or reexported                  ware with a symmetric key length not
                                                                 from Canada) to a distributor or other                    exceeding 64 bits;
                                                                 reseller, including subsidiaries of U.S.                    (iii) Encryption commodities and
                                                                 firms, the name and address of the dis-                   software authorized under paragraph
                                                                 tributor or reseller, the item and the                    (b)(3) of this section, exported (or reex-
                                                                 quantity exported or reexported and, if                   ported from Canada) to individual con-
                                                                 collected by the exporter as part of the                  sumers;
                                                                 distribution process, the end-user’s                        (iv) Encryption items exported (or re-
                                                                 name and address;                                         exported from Canada) via free and
                                                                    (ii) For items exported (or reexported                 anonymous download;
                                                                 from Canada) to individual consumers                        (v) Encryption items from or to a
                                                                 through direct sale (provided the trans-                  U.S. bank, financial institution or its
                                                                 action is not exempted from reporting                     subsidiaries, affiliates, customers or
                                                                 under paragraph (e)(4)(iii) or (e)(4)(iv)                 contractors for banking or financial
                                                                 of this section), the name and address                    operations;