EAR Amendment: India Eligible for STA, License Requirements Revised
On August 3, 2018 (83 FR 38018), the Department of Commerce amended the Export Administration Regulations (EAR) to reflect India’s membership in the Wassenaar Arrangement and status as a Major Defense Partner. Under this amendment, India moves from Country Group A:6 to Country Group A:1 and A:5. Country Group A:5 “provides the benefit of greater availability of License Exception Strategic Trade Authorization (STA) for exports and reexports to, and transfers within India under the EAR.”
The Commerce Country Chart was also amended, removing the license requirement for National Security Column 2 (NS2) for India. The amendment also makes conforming changes related to footnotes and AES filings. This follows updates earlier this year to reflect India’s admission to the Australia Group.
Click here for the revised Commerce Country Chart (Supplement No. 1 to Part 738).
Click here for the Strategic Trade Authorization (STA) Exception (EAR §740.20, currently starting on page 59 of the pdf).
EAR Amendment: South Sudan Arms Embargo
Also on August 3, 2018 (83 FR 38021), the Department of Commerce amended the EAR to reflect the addition of South Sudan as a prohibited destination under ITAR §126.1(w). South Sudan is now listed in Country Group D:5: Countries subject to U.S. arms embargoes. Because the State Department list controls, the addition of South Sudan to ITAR §126.1 in February already had this affect. The Commerce Department amendment conforms Country Group D:5 to the current ITAR §126.1.
EAR Amendment: MTCR Conforming Changes
On August 30, 2018 (83 FR 44216), the Department of Commerce amended the EAR to conform to changes to the Missile Technology Control Regime (MTCR), a voluntary multilateral anti-proliferation arrangement. The following seventeen ECCNs have been revised to align CCL controls with changes made to the MTCR Annex in 2017 (ECCN headings summarized for readability may include additional specifications and related commodities):
1B117 – Batch mixers
1B118 – Continuous mixers
1C111 – Propellants and constituent chemicals
1C118 – Titanium-stabilized duplex stainless steel
2B109 – Flow-forming machines
2B120 – Motion simulators or rate tables
2B121 – Positioning tables
2B122 – Centrifuges
6A107 – Gravity meters or gravity gradiometers
7A105 – Airborne receiving equipment for ‘navigation satellite systems’
7A107 – Three axis magnetic heading sensors
7A116 – Flight control systems
9A012 – Non-military UAVs
9A101 – Turbojet and turbofan engines
9A115 – Apparatus, devices and vehicles for transport, handling, control, activation and launching of rockets, missiles, and UAVs
9A515 – Spacecraft
9A610 – Military aircraft
Additional details of changes can be found in the Federal Register Notice and the revised CCL.
Commerce Requests Comments on Spraying and Fogging Systems
On August 13, 2018 (83 FR 39921), the Department of Commerce published a request for comments on the effectiveness of its controls on spraying or fogging systems controlled under Commerce Control List (CCL) Category 2, ECCN 2B352.i. The items are subject to Chemical & Biological Weapons Controls (CB column 2) because they are identified on the Australia Group’s “Control List of Dual-Use Biological Equipment and Related Technology and Software.” The notice proposes alternative control criteria, particularly to aid classification and avoid controls of commercial (e.g., agricultural) systems.
Comments are due by October 12, 2018 and may be submitted via regulations.gov (docket number BIS–2018–0013), by email, or by paper submission. Please see the Federal Register Notice for more details.
State Requests Comments on Part 130 Statements
On August 15, 2018 (83 FR 40618), the Department of State published a request for comments on the ITAR Part 130 “Statement of Political Contributions, Fees, and Commissions Relating to Sales of Defense Articles and Defense Services.” Part 130 statements require information about fees, commissions, and political contributions from
“any person who applies to the Directorate of Defense Trade Controls for any license or approval… for the export, reexport, or retransfer of defense articles or defense services valued in an amount of $500,000 or more which are being sold commercially to or for the use of the armed forces of a foreign country or international organization.”
Comments may be submitted until September 14, 2018. Please see the Federal Register Notice for additional details.
USML Category XI(b) Amended (Again) to Continue Current Text
On August 30, 2018 (83 FR 44228), the Department of State published an amendment to USML Category XI(b) that continues the current text which was scheduled to be replaced on August 30, 2018. XI(b) currently controls:
*(b) Electronic systems, equipment or software, not elsewhere enumerated in this subchapter, specially designed for intelligence purposes that collect, survey, monitor, or exploit, or analyze and produce information from, the electromagnetic spectrum (regardless of transmission medium), or for counteracting such activities.
This text was scheduled to be replaced on August 30, 2018, but with the amendment the replacement will be delayed until August 30, 2019. At that time, unless otherwise amended, Category XI(b) will read:
*(b) Electronic systems or equipment, not elsewhere enumerated in this subchapter, specially designed for intelligence purposes that collect, survey, monitor, or exploit the electromagnetic spectrum (regardless of transmission medium), or for counteracting such activities.
The change now scheduled for 2019 removes “software” as well as the capability to analyze and produce information from the electromagnetic spectrum.
The current language is meant to maintain control of “certain intelligence-analytics software” until a long-term solution is developed. The rule gives the government additional time “to finalize its review of USML Category XI, with rulemaking to follow, to include any further modifications to the USML Category XI paragraph (b) as may be warranted.”
DDTC published a similar amendment last year.
DTAG to Meet in October
The Defense Trade Advisory Group (DTAG) will meet on October 25, 2018 to discuss the following topics:
- Oversight of technical data under the ITAR and NISPOM;
- Challenges regulated entities face in advising the Department of ownership changes that implicate existing licenses and foreign persons, and processes the Department may implement to facilitate the provisions of this information;
- Possible schedule for future ongoing periodic review of USML categories;
- Developing a definition for common carrier; and
- Issues that exist with licensing of defense articles, including intelligence related products, related technical data, and defense services to the ‘‘Five Eyes’’ countries of the U.S., UK, Australia, Canada and New Zealand.
The DTAG meeting is open to the public, with seating limited to 125 persons. For meeting and registration information, click here for the meeting notice.
Click here for more information about DTAG.
Finally, watch for our next blog post on the NDAA and big changes coming to the Committee on Foreign Investment in the United States (CFIUS)!
(None of the information is intended to be authoritative official or professional legal advice. Consult your own legal counsel or compliance specialists before taking actions based upon this blog or other unofficial sources.)