[Federal Register Volume 79, Number 126 (Tuesday, July 1, 2014)]
[Rules and Regulations]
[Pages 37551-37575]
[FR Doc No: 2014-14683]

Federal Register / Vol. 79, No. 126 / Tuesday, July 1, 2014 / Rules
and Regulations

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 774

[Docket No. 120330233-4307-03]
RIN 0694-AF64

Revisions to the Export Administration Regulations (EAR): Control
of Military Electronic Equipment and Other Items the President
Determines No Longer Warrant Control Under the United States Munitions
List (USML)

AGENCY: Bureau of Industry and Security, Department of Commerce.

ACTION: Final rule.

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SUMMARY: This final rule adds to the Commerce Control List military
electronics, technology and software for certain wing folding systems,
certain superconducting and cryogenic equipment, and related items the
President determines no longer warrant control under the United States
Munitions List (USML). This also amends ECCNs 7A006 and 7A106 to apply
the ``missile technology'' reason for control only to items in those
ECCNs on the Missile Technology Control Regime (MTCR) Annex. This rule
is being published simultaneously with a Department of State rule that
amends the list of articles controlled by USML Category XI to control
only those articles the President has determined warrant control in
that category of the USML. Both rules are part of the President's
Export Control Reform Initiative. The revisions in this rule also are
part of the Department of Commerce's retrospective plan under EO 13563
completed in August 2011.

DATES: Effective dates--This rule is effective December 30, 2014,
except for the addition of software and technology for certain wing
folding systems to ECCNs 0D521 and 0E521 via Supplement No. 5 to part
774 of the EAR (amendatory instruction number 24), which is effective
July 1, 2014.

ADDRESSES: The Department of Commerce's full retrospective regulatory
review plan can be accessed at: http://open.commerce.gov/news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules.

FOR FURTHER INFORMATION CONTACT: Brian Baker, Director, Electronics and
Materials Division, Office of National Security and Technology Transfer
Controls,<PHONE_NUMBER><EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Background

The Export Control Reform Initiative

    This final rule is part of the Administration's Export Control
Reform Initiative, the objective of which is to protect and enhance
U.S. national security interests. The Initiative began in August 2009
when President Obama directed the Administration to conduct a broad-
based review of the U.S. export control system to identify additional
ways to enhance national security. In April 2010, then-Secretary of
Defense Robert M. Gates, describing the initial results of that effort,
explained that fundamental reform of the U.S. export control system is
necessary to enhance national security. Once the Department of State's
International Traffic in Arms Regulations (ITAR) and its U.S. Munitions
List (USML) are amended so that they control only the items that
provide the United States with a critical military or intelligence
advantage or otherwise warrant such controls, and the Export
Administration Regulations (EAR) are amended to control military items
that do not warrant USML controls, the U.S. export control system will
enhance national security by (i) improving interoperability of U.S.
military forces with allied countries, (ii) strengthening the U.S.
industrial base by, among other things, reducing incentives for foreign
manufacturers to design out and avoid U.S.-origin content and services,
and (iii) allowing export control officials to focus government
resources on transactions that pose greater concern.
    The changes described in this rule and the State Department's rule
amending USML Category XI are based on a review of that category by the
Defense Department, which worked with the Departments of State and
Commerce in preparing the amendments. The review was focused on
identifying the types of articles that are now controlled by the USML
that either (i) are inherently military and otherwise warrant control
on the USML, or (ii) if of a type common to civil applications, possess
parameters or characteristics that provide a critical military or
intelligence advantage to the United States and that are almost
exclusively available from the United States. If an article was found
to satisfy either or both of those criteria, the article remains on the
USML. If an article was found not to satisfy either criterion, but is
nonetheless a type of article that is ``specially designed'' for
military applications, then, generally, it is identified in one of the
new ``600 series'' ECCNs created by this rule.
    Section 38(f) of the Arms Export Control Act (AECA) obligates the
President to review the USML ``to determine what items, if any, no
longer warrant export controls under'' the AECA. The President must
report the results of the review to the Congress and wait 30 days
before removing any such items from the USML. The report must
``describe the nature of any controls to be imposed on that item under
any other provision of law.'' 22 U.S.C. Sec.  2778(f)(1). The
Department of State has delivered the required report to the Congress.

The Proposed Rules

    This final rule is the successor to two proposed rules, both
entitled Revisions to the Export Administration Regulations (EAR):
Control of Military Electronic Equipment and Related Items the
President Determines No Longer Warrant Control Under the United States
Munitions List (USML). The first proposed rule (herein the November 28
(military electronics) rule) published in the Federal Register on
November 28, 2012 (77 FR 70945). The second proposed rule (herein the
July 25 (military electronics) rule) was based on a review of the
public comments to the first proposed rule and published on July 25,
2013 (78 FR 45026). Simultaneously, the Department of State published
two proposed rules on November 28, 2012 (77 FR 70945) (herein the State
November 28 (military electronics) rule) and on July 25, 2013 (78 FR
45018) (herein the State July 25 (military electronics) rule). This
final rule is based on an evaluation of those comments by the
Departments of Defense, State and Commerce with additional input from
other Departments on various portions of the rules.
    In addition, this rule adds provisions controlling development
software and technology for certain wing folding systems to the EAR.
These provisions are related to prior proposed rules of the Departments
of State and Commerce: ``Amendments to the International Traffic in
Arms Regulations: Revisions of U.S. Munitions List Category VIII,''
November 7, 2011 (76 FR 68694) (herein the State November 7 (aircraft)
rule) and ``Revisions to the Export Administration Regulations (EAR):
Control of Aircraft and Related Items the President Determines No
Longer Warrant Control Under the United States Munitions List (USML),''
November 7, 2011 (76 FR 68675) (herein the November 7 (aircraft) rule).
Upon review of the current state of development of such software and
technology, the Department of Commerce, with the concurrence of the

Departments of Defense and State, concluded that they should be
controlled for export under the EAR rather than the ITAR. This is
because these items do not provide a critical military or intelligence
advantage to the United States or otherwise warrant ITAR controls but
they should be controlled because they provide at least a significant
military or intelligence advantage to the United States or foreign
policy reasons.

Overview of This Rule

    This rule adds to the EAR's CCL certain military electronic
equipment and related articles now controlled by the ITAR's USML
Category XI and certain cryogenic and superconductive equipment that
are now controlled by ``catch all'' provisions of the ITAR's USML
Categories VI, VII, VIII, and XV. This rule also corrects two ECCNs in
CCL Category 7 to apply the ``missile technology'' reason for control
only to items that are on the Missile Technology Control Regime (MTCR)
Annex. Finally, this rule controls under ECCNs 0D521 and 0E521 software
and technology for the ``development'' of certain wing folding systems
for aircraft powered by gas turbine engines while the United States
seeks to have such software and technology added to the Dual-Use List
of the Wassenaar Arrangement on Export Controls for Conventional Arms
and Dual-Use Goods and Technologies (Wassenaar Arrangement).
    This rule also adopts the changes to the structure of the ECCNs and
the elimination of the ``Units'' paragraphs from the ECCNs as set forth
in the rule entitled ``Revisions to the Export Administration
Regulations (EAR) To Make the Commerce Control List (CCL) Clearer''
published in the Federal Register on October 4, 2013 (78 FR 61874).

Alignment With the Wassenaar Arrangement Munitions List

    The Administration has stated since the beginning of the Export
Control Reform Initiative that the reforms are consistent with the
obligations of the United States to the multilateral export control
regimes. Accordingly, the Administration, in this and subsequent rules,
exercises its national discretion to implement, clarify, and, to the
extent feasible, align its control text with those of the regimes. This
rule maintains the alignment that exists between the USML, in which
military electronics are controlled under Category XI, and the
Wassenaar Arrangement Munitions List (herein WAML), in which military
electronic equipment is controlled under WAML category ML11, and by
ECCN 3A611 by this rule. Similarly, 3B611 aligns with WAML category
ML18, which, inter alia, controls ``specially designed or modified
`production' equipment for the `production' of products specified by
the Munitions List, and ``specially designed'' components therefor.''
    This rule aligns cryogenic and superconducting equipment currently
controlled in Categories VI, VII, VIII, and XV of the USML with WAML
category ML20 by controlling them under ECCN 9A620. As with other ``600
series'' ECCNs, this rule follows the existing CCL numbering pattern
for test, inspection and production equipment (3B611 and 9B620),
software (3D611 and 9D620) and technology (3E611 and 9E620), rather
than strictly following the Wassenaar Arrangement Munitions List
pattern of placing production equipment, software and technology for
munitions list items in WAML categories ML18, ML21 and ML22,
respectively. BIS believes that including the ECCNs for test,
inspection and production equipment, software, and technology in the
same category as the items to which they relate results in an easier to
understand CCL than would separate categories.

Public Comments on the July 25 (Military Electronics) Rule and BIS
Responses

Comments Concerning Manner of Listing Items Controlled Only for
Antiterrorism and China Military End-Use Reasons

    Previous rules creating new ``600 series'' ECCNs have included
paragraphs in some of those ECCNs, designated as .y paragraphs, which
list items that require a license only if going to countries that have
been designated as State Sponsors of Terrorism or to the People's
Republic of China. In the preamble to the July 25 (military
electronics) rule, BIS announced that it was considering four options
to address items of limited military significance for which a license
is required only if destined for a terrorist supporting destination or
the People's Republic of China. Those options are: (1) Creating
separate ECCN-specific .y paragraphs; (2) creating a single list of
``600 series'' items subject only to antiterrorism and China military
end-use license requirements; (3) establishing a classification request
procedure whereby a ``600 series'' item could be designated as subject
to only antiterrorism and China military end-use license requirements,
but eliminating the .y listings from the regulations; or (4) removing
all .y lists completely. BIS invited comments on these four options.

Comment 1

    Comments were divided between options 1 and 2--the options that
result in more complex, detailed, and tailored ECCNs. No commenter
supported options 3 or 4--the options that would have resulted in
significantly shorter and simpler ECCNs. One commenter stated of the
four listed options, it favored number 2, but also proposed combining
options 1 and 2 to form a fifth option. Under that fifth option, BIS
would compile a single .y list composed of basic hardware that is
common to many ECCNs and also would list .y items that are specific to
particular ECCNs in .y paragraphs within those ECCNs.

Response 1

    BIS has decided to accept the commenters' requests for a more
complex, tailored regulatory structure by creating a type of a single
.y list so that less significant controls are imposed on the less
significant items listed. In addition, BIS believes that most of the
items that would be appropriate for .y treatment are electronic in
nature. Therefore, rather than create a new ECCN to cover such items,
this final rule revises the .y paragraph in ECCN 3A611 to include
parts, components, accessories and attachments that are eligible for .y
treatment regardless of the ECCN of the ``600 series'' item that they
are used in or with. Thus, BIS has revised the heading of paragraph .y
to apply to ``Specific ``parts,'' ``components,'' ``accessories'' and
``attachments'' ``specially designed'' for a commodity subject to
control in a ``600 series'' ECCN and not elsewhere specified in any
``600 series'' ECCN . . . .'' This revision combines the benefits of
options 1 and 2. BIS did not adopt option 3 because it would create a
time consuming process and, although it would tailor .y classification
decisions closely to the characteristics of individual items, it would
not provide public notice of its results. BIS did not adopt option 4
because doing so would impose license requirements that apply to more
destinations and licensing policies that are more restrictive than are
warranted for the items that have been selected for .y treatment.

Comments Proposing Additional Items .y Paragraphs

Comment 2

    Commenters suggested over 100 items that they believed should be
included in .y paragraphs (or excluded from the

definition of ``specially designed''). The commenters favored, in
descending order of preference: exclusion from the definition of
``specially designed,'' then inclusion on a universal .y list, and
finally inclusion in ECCN 3A611.y. One commenter included in its list
some items that were already in ECCN 3A611.y or were already excluded
from the definition of specially designed.

Response 2

    Technical experts from the Department of Defense reviewed the items
suggested by the commenters. On the basis of that review, this final
rule includes 37 commodities in ECCN 3A611.y, but also gives that
paragraph the status of a universal .y list--i.e., the 3A611.y
commodities are those ``specially designed'' for any ``600 series''
item or defense article on the USML, not just those ``specially
designed'' for 3A611 items or USML Category XI defense articles. Export
license requirements allow the United States Government to see the
pattern of usage of military equipment. The knowledge of usage patterns
of even parts and components that are relatively unsophisticated or
that do not directly contribute to the military functions of a ``600
series'' commodity can provide valuable insights into military
capabilities and activities of other nations. Therefore, the .y
classification must be limited to those parts, components, accessories
and attachments for which knowledge of usage patterns are unlikely to
provide such insights. Based on the technical experts' review, this
final rule removes 11 paragraphs that were included in the July 25
(military electronics) rule because the commodities they listed were
redundant or problematic from a nomenclature standpoint. Those 11
commodities are: (1) Electric couplings; (2) cathode ray tubes; (3)
rotron fans; (4) electric fuses other than those ``specially designed''
for explosive detonation; (5) grid vacuum tubes; (6) audio headphones,
earphones, handsets, and headsets; (7) intercom systems; (8)
loudspeakers; (9) electric switches other than RF, pressure, diplexer,
duplexer, circulator or isolator switches; (10) vacuum tubes other than
TWTs, klystron tubes, or tubes ``specially designed'' for articles
enumerated in USML Category XII; and (11) waveguides. This final rule
adds 22 paragraphs for a total of 35.

Comment 3

    In commenting on the items to be included in the .y paragraphs, one
commenter suggested that certain items should be excluded from the
specially designed definition based on paragraph (b)(2) of that
definition. Those items are not expressly mentioned in paragraph (b)(2)
but the commenter implied that they are included within the scope of
the items that are expressly mentioned. Spacers, fasteners and grommets
are expressly mentioned in paragraph (b)(2). This commenter listed
circuit board and enclosure hardware and standoffs as examples of
spacers. It listed ``rods, thumbscrews, standoffs, and turnbuckles,
etc.'' as examples of fasteners. It listed grommet strips as grommets.

Response 3

    The July 25 (military electronics) rule did not propose changes to
nor did it request comments on paragraph (b)(2) of ``specially
designed.'' As with all provisions of the EAR, BIS is reviewing ways to
make them current and directly relevant to the objectives of the EAR.
Thus, BIS will consider at another time whether paragraph (b)(2)
warrants revision. BIS reminds the commenter that Sec.  748.3(e)
invites the submissions of classification requests for consideration by
the Departments of Defense, State, and Commerce regarding whether,
under paragraph (b)(1) of ``specially designed,'' extraordinarily
insignificant items not listed in paragraph (b)(2) warrant treatment as
``specially designed'' items.

Comments Concerning Whether To Move Certain ``600 Series'' Electronic
Items From CCL Category 3 to CCL Categories Containing Similar Non-
``600 Series'' Items

    The July 25 (military electronics) rule included radars, acoustic
systems, computers, telecommunications equipment, and navigation and
avionics equipment ``specially designed'' for a military use in a
single CCL category (Category 3--Electronics). Doing so is consistent
with the USML, which also covers such commodities in a single category
(Category XI--Military Electronics). However, the CCL divides those
same types of items not ``specially designed'' for a military use into
four categories. Computers are in Category 4--Computers.
Telecommunication equipment is in Category 5, Part 1--
Telecommunications. Radars and acoustic systems are in Category 6--
Sensors and Lasers. Navigation and avionics equipment are in Category
7--Navigation and Avionics. The July 25 (military electronics) rule
proposed to place in Categories 4, 5, 6 and 7 ECCNs that contain no
substantive text but merely advised readers that proposed ECCN 3A611 in
Category 3 controlled radars, acoustic systems, computers and
telecommunications equipment ``specially designed'' for a military use.
The rule invited comment on which approach to take, 1) the July 25
(military electronics) rule approach of placing the items in a single
category with cross references or 2) placing each type of item in the
category that includes similar items that already are on the CCL.

Comment 4

    Comments were divided on this topic. Two reasons were provided in
support of placing these ``600 series'' items in the categories that
control similar items currently on the CCL. First, having similar items
(e.g., military radar and civil radar) in different categories is
likely to lead to confusion and misclassification or even incorrect
ECCNs on licenses. Second, moving military computers,
telecommunications devices and radars to separate categories that are
aligned with the current CCL is likely to be necessary as the
government moves towards its stated goal of a single control list for
both military and commercial items.
    Four reasons were provided in support of placing these ``600
series'' items in a single CCL category. (1) Such placement would
better align such items with the order of review (Supplement No. 4 to
Part 774 of the EAR). (2) The Department of State Export Control Reform
rules tend to classify components according to the end item for which
they are designed. (3) The items in CCL Category 3 in the proposed rule
often are installed into other items. (4) The existing CCL approach,
which follows the pattern of the Wassenaar Arrangement Dual Use List
(although the lack of a definition for ``avionics'' sometimes causes
uncertainty as to whether a component in CCL Category 7 or Category 9).
    One commenter also noted that BIS does not appear to have
contemplated creating specialized electronics ECCNs related to end
items (e.g., 0Y611 for vehicle electronics or 8Y611 for surface vessel
and submersible electronics).

Response 4

    On balance, BIS has concluded that the approach proposed in the
July 25 (military electronics) rule is the better of the two. The
alternative would have resulted in the creation of 20 new ECCNs with no
change in the scope of controls. Accordingly, this final rule makes no
changes to the July 25 (military electronics) rule on this point. As
noted above, commenters made valid points for both approaches. However,
BIS has concluded that attempting to spread the contents of proposed
ECCN

3A611 over five CCL categories (one each for radar, acoustic sensors,
telecommunications equipment, computers and electronic parts and
component that are common to multiple categories) would unnecessarily
complicate and lengthen the EAR.
    As noticed by one commenter, BIS did not propose creating new ECCNs
in categories 0 and 8 for electronic items that are specially designed
for ground vehicles, surface vessels and submersibles. BIS believes
that such ECCNs are not necessary because as noted in the related
controls paragraph of ECCN 3A611 in the July 25 (military electronics)
rule and in this final rule ``Electronic items `specially designed' for
military application that are not controlled in any USML category but
are within the scope of another `600 series' ECCN are controlled by
that `600 series' ECCN.'' This sentence would resolve any ambiguity
concerning whether a particular device is to be treated as a specially
designed part of a land vehicle, surface vessel or submersible vessel
or as a military electronic item controlled under 3A611.
    Three of the four types of items about which BIS sought comments on
possible movement from CCL Category 3 to CCL categories containing
similar non-``600 series'' are computers, telecommunication, and radar.
Each of these three was expressly mentioned in ECCN 3A611 in the July
25 (military electronics) rule and each is expressly mentioned in a
category other than Category 3 on the CCL. The fourth, avionics, was
added to the proposal in response to a comment on the November 28
(military electronics) rule. Land vehicles, surface vessels and
submersible vessels are not expressly mentioned in ECCN 3A611 and were
not suggested by any commenters. Therefore, less likelihood of
confusion existed in the case of these items than in the case of the
items about which BIS sought comments on this topic.

Comments Concerning Defining Elements Used in ``600 Series'' Software
and Technology ECCNs

Comment 5

    Two commenters objected to the use of the word ``or'' in software
and technology ``600 series'' ECCNs, which apply, respectively, to
software for the ``development,'' ``production,'' operation or
maintenance of specified items and to technology for the
``development,'' ``production,'' operation, installation, maintenance,
repair, overhaul or refurbishing of specified items. The commenters
noted that BIS interprets the elements of ``use'' software and
technology elsewhere in the EAR as operation, installation,
maintenance, repair, overhaul and refurbishing.'' The commenters stated
that use of the disjunctive in the ``600 series'' ECCNs would force
academic institutions to screen foreign students and visitors before
even showing them how to operate ``600 series'' or other ECCN
equipment. The commenters expressed the opinion that such screening
would require expensive, complex security programs with no clear
national security benefit.
    One commenter noted that in response to similar comments in other
rules creating ``600 series'' ECCNs, BIS stated that``[n]early all the
software and technology in existing and proposed ``600 series'' ECCNs
comes from USML categories. One goal of the U.S. government in the
Export Control Reform Initiative is not to decontrol completely and
inadvertently items the President determines no longer warrant control
on the USML.'' The commenter noted that ``BIS believes the `or'
formulation achieves this objective.'' The commenter found this reason
``unpersuasive'' because ``[i]t essentially states that even though the
items are being transferred to the CCL they still will be subject to
USML type controls. In our opinion, this contradicts the objectives of
the Export Control Reform Initiative to create `bright lines' between
the two control lists. We worry that by creating inconsistencies within
the EAR this will lead to confusion and misunderstanding. Moreover,
this outcome appears inconsistent with the goal of the Export Control
Reform Initiative to reduce unnecessary and burdensome controls and to
allow the government and regulated community to focus resources on
transactions that pose the greatest concern.''

Response 5

    BIS continues to believe in identifying in the new software and
technology controls the types of software and technology that warrant
control. The controls are not increasing or decreasing the scope of
what is controlled under the ITAR's definition of ``technical data.''
(See 22 CFR Sec.  120.10). Thus, BIS is not increasing the regulatory
compliance burden with respect to such technology. To the contrary, it
is reducing the regulatory compliance burden with respect to such
software and technology to the extent their release would be within the
scope of one of the license exceptions (such as License Exception STA)
that is available in the EAR but not in the ITAR.
    The commenters' proposal would result in a significant decontrol of
technology that is now ITAR controlled, which is not the objective of
the reform effort or this final rule. BIS recognizes that it is
treating software and technology for ``600 series'' items more strictly
than software and technology for similar dual-use items. However, this
stricter treatment is warranted because of the military nature of the
``600 series'' items to which the software and technology relate.
    BIS also recognizes that its decision requires academic
institutions to be aware of the nationalities of students and
researchers for whom they provide instruction on how to operate these
items that are ``specially designed'' for military applications and, in
some instances, obtain authorization before providing such instruction
even if the recipient of the instruction uses the item for a civil or
commercial purpose. Again, BIS believes that this requirement is
justified by the military nature of the items enumerated in the ``600
series'' ECCNs. Moreover, these requirements are no stricter or more
burdensome than the requirements currently imposed for these items by
the ITAR.

Recommendations for Removal of Certain EAR Provisions as Erroneous or
Obsolete

Comment 6

    One commenter recommended removing text describing certain helix
tubes, microwave solid state amplifiers and traveling wave tube
amplifiers from the related control notes ECCNs 3A001, 3D001, and 3E001
that direct the reader to regulations of the Department of State,
Directorate of Defense Trade Controls (DDTC). This same commenter
recommended removing similar references to technology for certain
electron vacuum tubes from the related control notes of ECCN 3E003. The
commenter recommended these changes because under proposed rules
published by the Department of State these items would not be
``positively controlled under Category XI or XV of the USML.''

Response 6

    BIS agrees with the commenter's assessment and concludes that
changes made to USML Category XV by the rule entitled ``Amendments to
the International Traffic in Arms Regulations: Revision of U.S.
Munitions List Category XV (79 FR 27180, May 13, 2014) and by the
revisions to USML Category XI being published simultaneously with this
rule make obsolete all of the references in the ``Related Controls''
paragraphs of ECCNs 3A001 and 3D001, all of the references

in the ``Related Controls'' paragraph of ECCN 3E001 except those to
ECCN 3E101 and 3E201 and all of the references in the ``Related
Controls'' paragraph of 3E003 except that to 3E001. Accordingly, this
final rule revises ``Related Controls'' paragraphs in ECCNs 3A001,
3D001, 3E001 and 3E003 to remove the obsolete references. This rule
also adds general references to USML Categories XI and XV and ECCNs
9A515 and 3A611 to the related controls paragraph of ECCN 3A001.

Comments Concerning ECCN 3A611, in General

Comment 7

    One commenter recommended adding the phrase ``not enumerated in
either a USML category or another ECCN'' to the heading of ECCN 3A611
and removing similar text from paragraph .a of that ECCN. The commenter
said that the statement applies to the entire ECCN not just paragraph
.a.

Response 7

    BIS is making no changes to the rule in response to this comment.
As noted in Supplement No. 4 to Part 774 of the EAR--the Commerce
Control List Order of Review, the USML takes precedence over the CCL.
That precedence applies to all ECCNs, and BIS believes that it is not
necessary to reiterate this concept in the heading of the ``600
series'' ECCNs.

Comment 8

    One commenter recommended that in the ``Reasons for Control,'' the
phrase ``NS applies to entire entry except 3A611.y'' be revised to read
``NS applies to entire entry except 3x611.y or other portions of 3x611
not controlled by Wassenaar Munitions List or Wassenaar Dual-Use List''
to comply with Section 5(c)(6) of the Export Administration Act, which
prescribes certain limits on unilateral national security export
controls, and that such unilateral controls should be identified on the
CCL. This commenter also recommended that the missile technology (MT)
reason for control be added to ECCN 3A611 with the phrase ``MT applies
to portion of 3x611 controlled by MTCR--MT Column 1'' because items
covered on the Missile Technology Control Regime (MTCR) Annex (the
basis for imposing the MT reason for control in the EAR) should be
identified. The commenter indicated that his reasoning for this
proposal was that it might not be possible to identify all items in
3A611 that are covered on the MTCR Annex at this time because
continuing transfers ``make this a moving target,'' suggesting that
once the Export Control Reform Initiative was complete a comprehensive
review would be in order.

Response 8

    BIS is making no changes to the rule in response to this comment.
BIS believes that all of the items covered by ECCN 3A611 (including
those listed in 3A611.y) and all of the items covered by ECCNs 3B611,
3D611 and 3E611 are within the scope of the Wassenaar Arrangement
Munitions List. BIS also believes that none of the items in ECCN 3A611
as published in this final rule are listed on the MTCR Annex.

Comment 9

    One commenter recommended removing related controls (1), (2), (4)
and (5), which identify items that are subject to the ITAR, from the
``Related Controls'' paragraph of ECCN 3A611 because the ``ITAR, rather
than the EAR, should define what is controlled on the ITAR.'' The
commenter stated specifically that part (1) is redundant, especially if
the commenter's recommendation to put ``not enumerated in . . . a USML
category'' in the heading of 3A611 is accepted. The commenter
recommended that if ``Part (2)'' is retained, it should be revised to
change ``defense articles'' to ``a characteristic in the text of a U.S.
Munitions List description of a defense article.'' Without that change,
the commenter asserted the specific application could concern a trivial
functionality having no connection to the reason for the control of the
defense article. Parts (4) and (5), if retained, should similarly be
revised to change ``is `specially designed' for defense articles'' to
``furthers a characteristic in the text of a U.S. Munitions List
description of a defense article.''

Response 9

    BIS is making no changes to the rule based on this comment. One
purpose of related control notes is to alert readers to regulations
published by other government agencies that control items related to
those controlled on the CCL (see 15 CFR 738.2(d)(2)(iii)(B)). The four
paragraphs that the commenter recommended be removed provide such
alerts with respect to commodities controlled by the ITAR that are
related to items controlled in ECCN 3A611. The EAR cannot define what
is controlled on the ITAR, and BIS does not intend that they do so.
That which is subject to the jurisdiction of the ITAR is that which is
described in the ITAR's U.S. Munitions List. See 22 CFR 120.6 and
121.1. However, BIS believes that such cross references help readers
who need to understand the relationship between the ITAR and the EAR--
two separate bodies of rules that regulate exports and reexports--and
encourage readers to read the relevant USML categories when determining
the jurisdictional and classification status of items.

Comment 10

    One commenter recommended either deleting ECCN 3A611.a (and 3A611.x
Note 1, 4A611, 5A611, 6A611, 7A611) or changing the phrase ``
`specially designed' for military use'' to either ``having a
predominant military use'' or ``having a critical military or
intelligence advantage.'' This commenter stated that as defined in the
EAR, the term ``specially designed'' does not make sense when applied
to end items. Paragraph (a)(1) of the ``specially designed'' definition
applies to end items. Under that paragraph, an item is ``specially
designed'' if it is peculiarly responsible for achieving or exceeding
controlled performance levels, characteristics, or functions. The
commenter stated that ``military use'' is not a performance level or a
characteristic. The function of ``military use'' is achieved by any
military use. Therefore, under this definition, there is no difference
between ``specially designed for military use'' and just ``military
use.'' The commenter stated that removal of 3A611.a would be consistent
with the goals of the Export Control Reform Initiative to avoid
controls based simply on military use. Additionally, the commenter
asserted that ```Military use' with no further modification is far
broader than existing [Sec.  ] 120.3(a) [of the ITAR].''

Response 10

    This final rule replaces the term ``military use'' in ECCN 3A611
with the phrase ``military application'' to clarify that mere use by a
military organization does not bring something within the ambit of ECCN
3A611. One of the goals of the current phase of export control reform
is to control on the CCL items the President determines no longer
warrant control on the USML without inadvertently decontrolling items
currently on the USML. To do so, some standards must be expressed in
broad terms. BIS believes that the phrase ```specially designed' for a
military application'' provides adequate specificity and clarity to
distinguish items that are developed in ways that enable them to
perform a military role or function from items that, although used by
the military, are indistinguishable from items that are widely used in
civil activities. Thus, contrary to the assertion of the commenter,
paragraph (a)(1) of the

definition is relevant to such controls because ``military
application'' is the referenced ``characteristic.'' If someone does
something to an item during its development to achieve the
characteristic of being for a military application, then the item would
be within the scope of paragraph (a)(1). The term ``characteristic''
was never limited to technical control thresholds, such as heat, speed,
size, power, or strength.

Comment 11

    One commenter recommended changing the phrase ``nor controlled in
another ``600 series'' ECCN'' to ``nor controlled in another ECCN'' in
ECCNs 3A611.a, 3A611.a Note 1, 3A611.x Note 1, 3B611.a, 3B611.x, and
7A611. This same commenter recommended inserting ``or another ECCN''
following the phrase ``not enumerated in any USML category'' in ECCNs
4A611 and 5A611. The commenter asserted that many existing ECCNs, after
years of intense negotiations, have technical descriptions designed to
be more precise than ``military use'' or ``specially designed.'' The
commenter argued that this ``progress toward these major objectives of
the ECR would be undone in these areas unless this recommendation is
accepted.''

Response 11

    The changes proposed by the commenter are inconsistent with the
order of review in Supplement No. 4 to Part 774 of the EAR. That order
specifies that ``600 series'' ECCNs take precedence over non-600 series
ECCNs. Therefore, this final rule does not adopt the changes proposed
in this comment. This means that if an item were ``specially designed''
for a military application or a military item not described on the
USML, then it would be within the scope of a 600 series ECCN, even if
the same type of item were described in an ECCN elsewhere on the CCL.
This is not a change from the long-standing rule under the ITAR that if
a part or component were specifically designed or modified for a
defense article, then the part or component would be ITAR controlled,
even if the CCL described the same item or type of item.

Comments Concerning ECCN 3A611.a--Electronic ``Equipment,'' ``End
Items'' and ``Systems'' ``Specially Designed'' for Military End Use
That Are Not Enumerated in Any USML Category or Controlled by Another
``600 Series'' ECCN

Comment 12

    One commenter stated that electronically steerable airborne weather
radar should not be controlled by USML Category XI because its use is
for civil aviation. The State July 25 (military electronics) rule would
have included all ``[r]adar incorporating pulsed operation with
electronics steering of transmit beam in elevation and azimuth'' in
USML Category XI. This commenter proposed eight characteristics that it
believed should exclude such radars from the USML. The commenter
believes that if electronically steerable radar that it manufactures
were not controlled in Category XI of the USML, it would be subject to
the EAR and controlled in ECCN 6A998.a. The commenter pointed out the
necessity of rapidly shipping replacement radar units or parts to
replace or repair broken radar units in aircraft that may be on the
ground in any of a large number of countries. The commenter noted that
if a radar unit were classified in a ``600 series'' ECCN, the ability
to use License Exception STA would be sharply curtailed. The commenter
stated that a radar designed for a civil aircraft application should be
eligible for License Exceptions STA and RPL.

Response 12

    BIS is making no changes to the rule based on this comment.
    A similar comment on the State July 25 (military electronics) rule
was submitted to that department. After considering that comment, the
Department of State has added a note to Category XI(a)(3)(xii)
excluding radars, not otherwise controlled in the ITAR, operating with
a peak transmit power less than or equal to 250 watts, and employing a
design determined to be subject to the EAR via a commodity jurisdiction
determination. Please see the Department of State's companion to this
rule for its full response to the comment.
    If an airborne radar unit has been determined to be subject to the
EAR pursuant to such a commodity jurisdiction, it would be subject to
the EAR. If the radar were given a CCL classification as part of that
commodity jurisdiction process, the ECCN so given would govern. If the
classification were not given as part of the commodity jurisdiction
process, the order of review in Supplement No. 4 to Part 774 of the EAR
would govern its treatment under the EAR. Following the order of
review, one would proceed to the ``600 series.'' If the radar were a
``specially designed'' part for an aircraft controlled under ECCN
9A610--Military aircraft and related items, paragraph .x of that ECCN
would control the radar. If it were not so ``specially designed,'' one
would check 3A611.a (electronics ``specially designed'' for a military
application) and 3A611.x ``specially designed'' for a commodity
controlled in USML Category XI. If the radar were not so specially
designed, one would look outside the ``600 series'' to CCL Category 6.
BIS notes that most radars used in civil aircraft are controlled by
ECCN 6A998.a.

Comment 13

    One commenter recommended that proposed ECCN 3A611.a be revised to
clarify that it does not control routine telecommunications or computer
networks used by a military end-user for administrative functions,
where such networks utilize only equipment and software that are not
enumerated in a USML Category or controlled by a ``600 series'' ECCN
and where such networks that do not contain, and are not designed or
configured to contain, types of security as described in USML Category
XIII(b).
    This commenter noted that military organizations use communications
networks for command and control purposes and for routine
administrative matters or, in some instances, to facilitate
communications home by troops stationed abroad. The commenter stated
that even though operated by the military, communication networks for
administrative purposes typically have no higher level of security than
similar networks used by a business or even a residential end-user--
whereas command and control networks typically use special encryption
devices controlled under USML Category XIII(b) to maintain a higher
level of security. This commenter suggested that, based on the
definition of ``system'' in the EAR, and the phrase ``specially
designed for military use,'' as it appears in ECCN 3A611.a and in the
note immediately following that paragraph, could be read to include
administrative communications networks that do not contain, and were
not designed or configured, to contain USML Category XIII(b) levels of
security that would be considered ``specially designed'' for military
use. The commenter recommended adding a note stating:

    ECCN 3A611.a does not include a routine telecommunications or
computer network that utilizes only equipment and software that are
not enumerated in a USML Category or controlled by a ``600 series''
ECCN where the network does not contain, and is not designed or
configured to contain, types of security as described in USML
Category XIII(b).

Response 13

    BIS does not intend that ECCN 3A611.a apply to communication
networks that, although owned, leased, or operated by military
organizations, have no security or technical features other than those
found in ordinary commercial communications networks. However, BIS
believes that the information security assurance systems described in
USML Category XIII(b) are not the only features that distinguish a
network that performs military functions from one that performs only
routine administrative or civilian communications functions. To draw
the proper distinction, this final rule replaces the term ``specially
designed for military use'' in ECCN 3A611 with the phrase ``specially
designed for military application.'' BIS believes that the latter
phrase addresses the commenter's concerns by emphasizing that ECCN
3A611.a does not apply to electronic ``equipment,'' ``end items'' and
``systems'' merely because the military uses them. Rather, the
commodity must be ``specially designed'' to perform a military function
or activity. This change is consistent with the long-standing policy in
the ITAR that the mere use of an item should not determine its
jurisdictional or control status. See 22 CFR 120.3.

Comment 14

    One commenter recommended changing ``a'' to ``another'' in the
phrase ``not enumerated in any USML category or controlled by a `600
series' ECCN'' that appears in the note immediately following ECCN
3A611.a.

Response 14

    BIS agrees that the recommended change more precisely states the
scope of ECCN 3A611.a; therefore, this final rule adopts that change.

Comments Applicable to ECCN 3A611.c or .d.

Comment 15

    One commenter stated that the definition of output power is
inconsistent among ECCNs that control microwave transistors. ECCN 3A001
uses ``average output power;'' 3A982 uses both ``average output power''
and ``pulsed output power;'' and 3A611 uses ``saturated power.'' The
commenter asserted that this variation will create confusion and
inconsistent results.

Response 15

    After the comment period for the July 25 (military electronics)
rule closed, changes to the Wassenaar Arrangement's Dual Use List,
Category 3 were adopted at its December 2013 plenary meeting. Those
changes included new criteria for paragraphs 3.A.1.b.2 (MMIC power
amplifiers) and 3.A.1.b.3 (discrete microwave transistors). The changes
eliminated the need for ECCN 3A982 by expanding the operating frequency
ranges in paragraphs 3.A.1.b.2 and 3.A.1.b.3 to include the operating
frequency ranges currently found in the ECCN 3A982. This change made
the MMIC power amplifiers and discrete microwave transistors currently
controlled under ECCN 3A982 eligible for inclusion in ECCN 3A001, which
is based on Wassenaar Arrangement Dual Use List paragraph 3.A.1. The
Wassenaar Arrangement Dual Use List changes also revised the criteria
for inclusion of MMIC power amplifiers and discrete microwave
transistors in 3.A.1.b.2 and 3.A.1.b.3. Those changes, which will
eliminate inconsistencies in the definitions of output power, will be
incorporated into ECCN 3A001.b.2 and .b.3 by the rule implementing the
Wassenaar Arrangement 2013 plenary meeting decisions, which BIS expects
will be published and become effective before this final rule becomes
effective. This final rule will then build on the changes made by the
Wassenaar 2013 plenary meeting rule by creating ECCN 3A611 and moving
some MMIC power amplifiers and discrete microwave transistors from
3A001.b.2 and .b.3 to 3A611.c and .d based on the values for power
added efficiency, fractional bandwidth, or peak saturated power output
(or some combination thereof).

Comment 16

    One commenter noted that the frequency range from 2.7 GHz-2.9 GHz
is internationally recognized as a standard band for civilian air
traffic control (ATC) systems. Regulating devices in this band has the
effect of limiting U.S. participation in the global civil ATC market,
and providing an unfair advantage to our worldwide competitors, as well
as an incentive for our foreign competitors to invest in developing
their own amplifier technology. This particular frequency band is
predominantly used for civil ATC rather than military applications. In
addition, the international ATC band is under consideration to be
expanded upwards to 3.2 GHz, due to conflicts with civil communications
in the lower end of the band.

Response 16

    BIS' implementation of the decisions of the Wassenaar Arrangement
December 2013 plenary meeting, noted in Response 15, will, when
published in the EAR revise ECCN 3A001.b.2 (MMIC power amplifiers) and
b.3 (discrete microwave transistors) to encompass the frequency range
noted in this comment. The additional technical parameters of power
added efficiency, fractional bandwidth and peak saturated power output
determine whether MMIC power amplifiers are controlled in ECCN 3A611.c.
The additional technical parameters of power added efficiency and peak
saturated power output determine whether discrete microwave transistors
are controlled in ECCN 3A611.d. The EAR control over these devices are
based on the multinational Wassenaar Arrangement, under which other
member states should implement similar export controls, reducing any
disadvantage faced by U.S. companies.

Comment 17

    Several commenters stated that the parameters in ECCN 3A611.c and
.d would cover MMIC power amplifiers and discrete microwave transistors
that have civil applications now, or that are likely to have important
civil applications in the near future. The civil applications mentioned
were Wi Fi, Wi Max, point-to-point radios for cellular backhaul,
Commercial Ka-band used in commercial satellite based wireless internet
ground stations and V-Band radios used in small commercial cellular
networks. The specific points raised by these are as follows.
    The differences between devices that would be controlled by ECCN
3A611.c or .d and those that are controlled by ECCN 3A001.b.2 or .b.3
in many instances are only a matter of efficiency. Because increasing
efficiency is driving development in both civil and military
applications, higher efficiency is not a good criterion for
distinguishing military from civil applications. Increasing efficiency,
saturated power and bandwidth are common objectives in both military
and civil applications. In commercial cellular base stations, high
power efficient devices enable achieving necessary power levels without
combining multiple lower power devices, thereby simplifying
manufacturing, lowering costs and producing more efficient transmitter
design. Increasing bandwidth is needed to handle greater data volume in
commercial networks, and OEMs are requiring vendors of semiconductor

power devices to supply it for increased system capability and
inventory management reasons. The performance levels in proposed ECCN
3A611.c and .d do not lead to a valid conclusion that a device is
inherently military or that it is unlikely to be used in a commercial
application.
    The frequency range from 3.1-3.5 GHz is not restricted to military
use. The International Telecommunication Union (ITU) designates this
band for radio location, and the band is also in active use
internationally as an additional civilian air traffic control (ATC)
band. Today's transistors for air traffic control can exhibit
efficiencies, which commonly exceed 60%. The commenter cited one
example of a transistor that it stated achieved such efficiency
exceeding 60%.
    One commenter stated that proposed ECCN 3A611.c.9, .c.10 and .c.11
overlap with ECCN 3A001.b.2.e, .b.2.f and .b.2.g as set forth in the
Wassenaar Arrangement implementation rule published in June 2013. The
commenter noted that the three 3A611 paragraphs differ from the
corresponding 3A001 paragraphs in that the former specify values for
peak saturated output power whereas the latter specify values for
average output power instead and only the former specify a value for
power added efficiency. In addition, proposed 3A611.c.9 specifies a
value of fractional bandwidth whereas 3A001.b.2.e does not. This
commenter stated that, although its current products do not meet the
threshold values for inclusion in 3A611, only a small amount of
advancement would be needed for its products to do so. The commenter
recommended the following changes to ECCN 3A611 to provide a reasonable
allowance for improvements of commercial amplifiers. In paragraph .c.9,
increase the peak saturated output power from 1 W to 3 W and the power
added efficiency from 15% to 35%. In paragraph .c.10, increase the peak
saturated output power form 31.62 mW to 100 mW and the power added
efficiency from 25% to 35%. In paragraph .c.11, increase the peak
saturated output power from 10 mW to 100 mW and the power added
efficiency from 10% to 20%.
    One commenter reiterated its comment made in response to the
November 28 (military electronics) rule that most gallium nitride
(``GaN'') MMICs and discrete transistors currently available on the
commercial market (and classified as ECCN 3A982 or 3A001 or designated
EAR99) perform at levels that exceed even the revised proposed power
added efficiency thresholds for ECCN 3A611. Accordingly, that metric,
as currently proposed, still does not sufficiently focus the proposed
regulation on high performance parts. Rather, most GaN MMICs and
discrete transistors that presently are used in commercial
telecommunications, backhaul, point-to-point and satellite applications
would still meet the proposed thresholds under ECCN 3A611.
    The commenter reiterated its request for BIS to consider the power
added efficiency thresholds set forth in its earlier comment, which it
stated reflect the realities of the commercial market.
    One commenter recommended adding the phrase ``specially designed
for military use'' to paragraphs .c and .d. The commenter stated that
without this change, the paragraphs would cover MMICs and transistors
that currently are classified in ECCNs 3A001 and 3A982 or those that
currently designated EAR99. The order of review in Supplement No. 4 to
Part 774 would cause ECCN 3A611 to prevail over the others. The
commenter states that it is aware of a large number of circuits and
transistors that have been classified under ECCN 3A001 that would be
classified under 3A611.c or .d causing a large number of commercial
products that have already been exported on the global market to be
controlled by ECCN 3A611.

Response 18

    Experts in this area from the Departments of Defense, State, and
Commerce reviewed the parameters proposed in ECCN 3A611.c (MMIC power
amplifiers) and .d (discrete microwave transistors). The conclusion of
that review was that, in most instances, the civil market for these
devices at the parameters set forth in the proposed rule is minimal to
non-existent. However, the reviewers concluded existing civil
applications justify raising the power added efficiency in four
instances. Accordingly, in this final rule, for the operating frequency
range exceeding 2.7 GHz up to and including 2.9 GHz, the power added
efficiency threshold has been raised to 55% for MMIC power amplifiers
and to 60% for discrete microwave transistors from a proposed threshold
of 50% for both. In the operating frequency range exceeding 2.9 GHz up
to and including 3.2 GHz, the power added efficiency threshold has been
raised to 55% for MMIC power amplifiers and to 60% for discrete
microwave transistors from proposed thresholds of 45% for MMIC power
amplifiers and 50% for discrete microwave transistors. Although more
efficient and powerful MMIC power amplifiers and discrete microwave
transistors may have widespread use in civil communications in the
future, this rule is based on conditions as they exist at the time the
rule is being written. Like any other aspect of the EAR, ECCN 3A611
paragraphs .c and .d may be modified in the future if changes in civil
and military applications and concerns warrant a change.
    As noted in Response 15, BIS intends to publish a rule implementing
the decisions of the Wassenaar Arrangement December 2013 plenary
meeting. That rule will revise ECCN 3A001.b.2 (MMIC power amplifiers)
and b.3 (discrete microwave transistors) to encompass the frequency
ranges used in ECCN 3A611.c and .d. The additional technical parameters
of power added efficiency, fractional bandwidth and peak saturated
power output will determine whether MMIC power amplifiers are
controlled in ECCN 3A611.c. The additional technical parameters of
power added efficiency and peak saturated power output determine
whether discrete microwave transistors are controlled in ECCN 3A611.d.
That rule also will remove ECCN 3A982. Thus, none of the MMIC power
amplifiers or discrete microwave transistors that this final rule
controls under ECCN 3A611 will be EAR99 at the time this final rule
becomes effective, and therefore, no changes are being made to this
rule. The EAR control over these devices is based on the multinational
Wassenaar Arrangement, under which other member states should implement
similar export controls, reducing any disadvantage faced by U.S.-based
producers of these products.

Comment 19

    One commenter stated that the broadband proposed language for each
frequency range, in the definition of the broadband behavior, regulates
devices that operate far below that range and whose center frequency is
below the performance limits of 3A001 and 3A982 (<2.7 GHz). For
example, a MMIC with a 60% bandwidth which operates to 2.7 GHz would
have a center frequency of ~2 GHz and a lower operating frequency of
1.45 GHz.

Response 19

    The commenter's observation is correct. However, the ability of a
MMIC power amplifier or discrete transistor to operate within a
frequency band specified in, and meet the other control parameters of,
a particular ECCN items paragraph give it the capabilities that warrant
export license requirements, even if it can also operate outside that

frequency band or at lower performance parameters.

Comment 20

    One commenter stated that cycle times for commercial technology
innovation can be shorter than that for military technology innovation.
The development of state-of-the-art power amplifier devices for civil
communications systems is driven by the ever increasing quantity of
information transmitted over wireless networks. Higher quality network
data links coupled with longer distances between cellular backhaul
radios is yet an additional driver for increasing power requirements.
Operation across broader frequency ranges coupled with OEMs' demand to
stock fewer parts generates an industry demand for broadband power
amplifiers.

Response 20

    BIS recognizes that performance of civil communications networks
increases over time and that the increased performance requires more
capable components. However, the technical personnel from the
Departments of Defense, State, and Commerce attempted to set the
parameters for the MMIC power amplifiers and discrete microwave
transistors controlled by ECCN 3A611 to cover those with important
military applications and few or no current civil applications. BIS is
willing regularly to accept and consider information from interested
persons about developments that would result in such items being used
in non-military, commercial applications.

Comment 21

    One commenter recommended deleting ECCN 3A611.c and .d, stating
that there is no publicly available evidence that either MMIC power
amplifiers or discrete microwave transistors are now subject to DDTC
licensing authority. The commenter recapitulated text currently in USML
Category XI(a) and (b) and the ``Related Controls'' paragraph of ECCN
3A001 in support of this contention. The commenter noted the
description of both MMIC power amplifiers and discrete microwave
transistors in ECCN 3A001 and noted that the preamble to the July 25
(military electronics) rule referred to a United States proposal to
modify language related to such amplifiers and transistors in the
Wassenaar Arrangement Dual Use List. The commenter noted that ECCN
3A001 license requirements applicable to MMIC power amplifiers and
discrete microwave transistors apply to fewer destinations than would
the requirements in proposed ECCN 3A611.c and .d. The commenter also
noted a broader range of license exceptions available under ECCN 3A001
than under 3A611, especially for MMIC power amplifiers. The commenter
asserted that, to include these two items in 3A611, BIS would first
need to transfer licensing jurisdiction to the Directorate of Defense
Trade Controls.

Response 21

    BIS is making no changes to the rule in response to this comment.
The parameters for MMIC power amplifiers and discrete microwave
transistors included in 3A611 will differ from those in ECCN 3A001.b.2
and .b.3 (as to be revised by the yet-to-be published final rule
implementing the decisions of the Wassenaar Arrangement December 2013
plenary meeting) based on their power added efficiency, peak saturated
power output, fractional bandwidth or some combination of those
parameters. BIS believes that the values selected in this final rule
are adequate for readers to readily distinguish the MMIC power
amplifiers and discrete transistors in ECCN 3A611.c and .d from those
in ECCN 3A001.b.2 and .b.3. BIS is unaware of any commodity
jurisdiction determinations issued by the State Department that the
MMICs described in the new ``600 series'' controls were not previously
subject to the jurisdiction of the ITAR.

Comment 22

    One commenter noted that ECCN 3A982 controls packaged transistors
and packaged MMICs but does not control unpackaged devices or bare die.
Therefore, unpackaged devices and bare die that meet the frequency and
power parameters of ECCN 3A982 but not that of ECCN 3A001.b.2 or .b.3
are designated EAR99. Thus, as proposed, 3A611 would impose controls on
devices that are currently designated EAR99.

Response 22

    BIS notes that this comment was made prior to the Wassenaar
Arrangement December 2013 plenary meeting that, inter alia, revised the
Wassenaar Arrangement Dual Use List Category 3.A.1 to include coverage
of MMIC power amplifiers and discrete microwave transistors with
operating frequencies exceeding 2.7 GHz. When published, the rule
implementing that change on the CCL will provide the same frequency
thresholds for ECCN 3A001.b.2 and .b.3. It will also remove ECCN 3A982
from the CCL because the devices listed therein will then be within the
scope of ECCN 3A001.b.2 and .b.3. Neither the Wassenaar Arrangement
Dual Use List Category 3.A.1.b.2 and .3 nor ECCN 3A001.b.2 and .b.3 are
currently limited to packaged devices. ECCN 3A611.c and .d are based on
the parameters of Wassenaar Arrangement Dual Use List Category
3.A.1.b.2 and .3 that BIS intends to add to ECCN 3A001.b.2 and .b.3
with additional parameters of power added efficiency, peak saturated
power output and fractional bandwidth to differentiate the devices in
ECCN 3A001.b.2 and .b.3 from those in ECCN 3A611.c and .d. Thus,
although some of the devices covered in ECCN 3A611 may have been
designated EAR99 at the time the comment was made, by the time this
final rule is effective, they will be on the CCL in conformance with
the United States' Wassenaar Arrangement commitment. Therefore BIS is
making no changes to the rule in response to this comment.

Comments Concerning ECCN 3A611.e--Certain High Frequency Surface Wave
Radar

Comment 23

    One commenter stated that the seemingly technical descriptions in
proposed USML Category XI(a)(3)(i) and proposed ECCN 3A611.e cover
virtually all airborne and maritime radar. A primary purpose of ship-
borne radar is traffic control. The commenter cited his experience as a
U.S. Navy-trained radar officer from 1943 to 1946 in which he ``learned
that the fundamental purpose of both military and civil radar is as
described in [proposed USML Category] XI(a)(3)(i) and [proposed ECCN]
3A611.e.''
    The commenter also stated that the Note to 3A611.e would
unintentionally decontrol much of what 3A611.e would control.
``Specially designed'' in that Note does not effectively narrow the
scope of its decontrol. The words ``achieve or exceed'' in (a)(1) of
the definition of ``specially designed'' logically narrow only
controls, not decontrols. The lack of any such Note to XI(a)(3)(i)
would not only transfer much of 6A008 and 6A108 to the USML but also
would transfer from EAR99 to the USML much of what is excluded from
6A008 in technical decontrol Notes.

Response 23

    BIS does not agree with the commenter that the technical
description in 3A611.e would cover virtually all airborne or maritime
radar. Paragraph .e--``High frequency (HF) surface wave radar that
maintains the positional state of maritime surface or

low altitude airborne objects of interest in a received radar signal
through time''--describes specific radar capabilities that have
distinct military applications and that are not found in most civil
radars. HF radar manufactured for only maritime traffic control would
be designed with performance limitations that would limit the military
utility.
    BIS also does not agree that the note, which makes clear that
paragraph .a does not apply to radars that are ``specially designed''
for marine traffic control, would exclude all radars that would
otherwise be covered by paragraph .e. The text of paragraph .e
describes capabilities that would not likely be needed in a maritime
traffic control system. BIS also disagrees with the commenter's opinion
that ``specially designed'' cannot apply to a decontrol. In this
instance, the note excludes radars that as a result of ``development''
have properties that are peculiarly responsible for achieving a
maritime traffic control system performance, a very different thing
than the kinds of radars controlled by 3A611.e. BIS does not agree with
the commenter's assertion that a note to proposed USML Category
XI(a)(3)(i) is needed to prevent transfer of some radars from the CCL
to the USML.

Comments Concerning ECCN 3A611.f--Application Specific Integrated
Circuits And Programmable Logic Devices Programmed for ``600 series''
Items

Comment 24

    One commenter recommended changing the phrase ``600 series'' in
ECCN 3A611.f, .g, and .h to read ``a characteristic in the text of a
description of a ``600 series'' ECCN'' and deleting the phrase
``specially designed'' from ECCN 3A611.g and .h.

Response 24

    BIS is not making the changes suggested by the commenter. ECCN
3A611 paragraphs .f, .g and .h control, respectively, application
specific integrated circuits and programmable logic devices programmed
for ``600 series'' items, printed circuit boards and populated circuit
cards with layouts ``specially designed'' for ``600 series'' items, and
multichip modules with a pattern that is ``specially designed'' for
``600 series'' items. Changing the phrase ``600 series'' to ``a
characteristic in the text of a description of a ``600 series ECCN''
would add to the text length and complexity, but neither accuracy nor
clarity. The phrase ``specially designed'' is needed in paragraphs .g
and .h so that those paragraphs do not inadvertently apply to printed
circuit boards and populated circuit cards with layouts and to
multichip modules with patterns that are common to ``600 series'' items
and items in other ECCNs or to EAR99 items.

Comments Concerning ECCN 3A611.g--Multichip Modules for Which the
Pattern or Layout is ``Specially Designed'' for ``600 Series'' Items

Comment 25

    One commenter noted that the July 25 (military electronics) rule
proposed to regulate printed circuit boards and populated circuit card
assemblies ``specially designed'' for ``600 series'' items under ECCN
3A611.g, and multichip modules similarly under ECCN 3A611.h.
    The commenter stated that when these items are used in items
controlled by a ``.y'' paragraph, they are inherently non-significant
and should either be released by paragraph (b)(3)(ii) of the
``specially designed'' definition, or themselves controlled by the
``.y'' paragraph. A similar approach may be suitable for application-
specific integrated circuits and programmable logic devices proposed
for ECCN 3A611.f.

Response 25

    To the extent that the layout or pattern of a device listed in ECCN
3A611.f, .g or .h is ``specially designed'' for an item listed in the
.y paragraph of a ``600 series'' ECCN, BIS agrees with the commenter
that the device should be controlled to the same extent as the device
of which it is a ``specially designed'' part or component. Accordingly,
this final rule addresses the commenter's concerns by adding text to
paragraphs .f, .g and .h referring reader to paragraph .y of ECCN 3A611
for such devices and adds text controlling such devices to ECCN
3A611.y.

Comments Concerning ECCN 3A611.y

Comment 26

    One commenter stated that its connectors that currently are
classified under USML Category XI(c) would transfer to 3A611.y.3. The
commenter noted that the problem with the 3A611.y text is that it
states that it is ``for a commodity subject to control in this entry
and not elsewhere specified in any ``600 series'' ECCN.'' Thus, an
electrical connector that is ``specially designed'' for military
aircraft equipment currently under USML Category VIII, would be
classified under ECCN 9A610.x.

Response 26

    In this final rule, ECCN 3A611.y applies to parts, components,
accessories and attachments that are ``specially designed'' for a
commodity subject to control in a ``600 series'' ECCN and not elsewhere
specified in any ``600 series'' ECCN, and includes in its list of
commodities electrical connectors. Thus, if the connectors in fact are
moved from the USML to the CCL and are not ``specified in another ``600
series'' ECCN,'' they are controlled by ECCN 3A611.y.

Comment 27

    One commenter stated that under the current wording, [of 3A611.y
and .x] 3A611.y items would be restricted exclusively to items
``specially designed for a commodity subject to control in this entry
and not elsewhere specified in any ``600 series'' ECCN.'' This means,
by way of example, the commenter asserted that a ``speaker'' (y.19)
``specially designed'' for a USML item would necessarily be classified
as a 3A611.x item, despite the positive enumeration of ``speakers''
within 3A611.y and the clear intent that .y items are intended to
constitute a positive list of ``specially designed'' items which
warrant no more than AT-only controls, whether ``specially designed''
for ECCN 3X600 series items or USML items.
    The commenter recommends fixing this by revising paragraphs .x and
.y to exclude items elsewhere specified on the USML or CCL and by
revising paragraph .y to apply to specific ``parts,'' ``components,''
``accessories'' and ``attachments'' ``specially designed'' for a
commodity subject to control in this entry or for an article controlled
by USML Category XI.

Response 27

    BIS believes that no ambiguity exists between the scope of
paragraphs .x and .y. The commenter's proposed solution would undermine
the order of review set forth in Supplement No. 4 to part 774 of the
EAR. However, BIS makes changes to this final rule to address the
concern of the commenter. In this final rule, BIS makes paragraph .y
applicable to commodities listed therein if they are ``specially
designed'' for a commodity in any ``600 series'' ECCN or USML defense
article and adds text to paragraph .x that explicitly excludes
commodities in paragraph .y from the control of .x.

Comment Concerning ECCN 3B611

Comment 28

    One commenter expressed support for the proposal in the State and
Commerce July 25 (military electronics) rules to transfer to the CCL
under ECCN 3B611 all ``Test, Inspection and Production Equipment for
Military Electronics'' that is not explicitly enumerated in the revised
USML Category XI. The commenter expressed a belief that this proposal
recognizes an important technical difference and implements an equally
important policy differentiation between test equipment and operational
military equipment.

Response 28

    BIS acknowledges the comment.

Comments Concerning ECCN 3D611

Comment 29

    One commenter recommended changing ``specially designed'' to
``required'' in the heading and in paragraphs .a, .b, .y of ECCN 3D611
for consistency with EAR definition of ``required.'' This commenter
also recommended changing ``commodities'' to ``items'' 3D611.a and
adding ``or 3D611'' to comply with WAML category 21.a. Finally, this
commenter recommended adding new 3D611.c ``software'' not enumerated in
the USML or otherwise enumerated in the CCL performing the military
functions of equipment enumerated in USML Category XI or 3A611 to
comply with WAML category 21.c.

Response 29

    BIS is making no changes to the rule in response to this comment.
Although the definition of ``required'' in the EAR can apply to
software, nothing in that definition requires that the word be used in
all ECCNs that control software. The definition is very similar to
paragraph (a)(1) of the definition of specially designed. In this
instance the term ``specially designed'' tailors the ECCN text more
closely to BIS's objective of not including dual-use software in a
``600 series'' ECCN.
    BIS does not agree with this commenter's interpretation of WAML
category ML21. BIS believes that the phrase ``specified by the
Munitions List'' in category ML21 refers to categories on the WAML that
cover equipment, materials or related software, not to WAML category
ML21 itself, which applies to software generally. WAML category ML11
applies to military electronic equipment not specified elsewhere on the
WAML, which, in this rule, is covered by ECCN 3A611. ECCN 3D611 applies
to software for that equipment, thereby implementing the scope of WAML
category ML21 as it applies to software for military electronics.
Because ECCN 3A611 controls commodities as that term is defined in the
EAR, describing the software controlled by ECCN 3D611 as being for
commodities controlled by ECCN 3A611 is appropriate.

Comment Concerning ECCN 3E611

Comment 30

    One commenter noted that discrete items on a network that are
classified as 4x994, 5x001, 5x002, 5x991 and EAR99 sometimes require
maintenance, repair or replacement. Proposed 3E611 would control
``operation, installation, maintenance, and repair of `commodities'
controlled by ECCN 3A611.'' In the case of a system classified as ECCN
3A611, the proposed ECCN is ambiguous as to whether, for example, the
maintenance and repair of an end-item such as a switch classified as
ECCN 5A002 would be controlled by ECCN 3E611.
    The commenter recommended eliminating the ambiguity by adding a
note to ECCN 3E611 to read as follows: ``ECCN 3E611.a does not control
the operation, installation, maintenance, or repair of non-`600 series'
items that are or are intended to be included in `systems' controlled
by ECCN 3A611.a.''

Response 30

    ECCN 3E611.a controls ``technology'' (other than that described in
3E611.b or 3E611.y) ``required'' for the ``development,''
``production,'' operation, installation, maintenance, repair, overhaul,
or refurbishing of commodities or software controlled by ECCN 3A611,
3B611 or 3D611. It does not control other technology that is not so
``required,'' even if that other technology is being used to service a
network that contains devices or software controlled by ECCN 3A611,
3B611 or 3D611, nor does it control such other technology that is used
to service the commodities or software controlled by 3A611, 3B611 or
3D611. However, ECCN 3E611 does control technology that is so
``required,'' even if that technology is being used to service
something else. Given the military nature of ``600 series'' technology,
BIS believes that this level of control must be maintained.
Accordingly, BIS is making no changes to the final rule in response to
this comment.

Comment 31

    One commenter recommended changing the phrase found in 3E611.a
``other than that described in 3E611.b or 3E611.y'' to read ``not
controlled by 3E611.b or 3E611.y.'' This same commenter also
recommended deleting 3E611.b because, he asserted, with the above
change in 3E611.a, 3E611.b would be covered by 3E611.a.

Response 31

    This final rule adopts the commenter's recommendation in part. The
proposed rule text ``other than that described in 3E611.b or 3E611.y''
is revised to read ``other than that controlled by 3E611.b or
3E611.y.'' The revised text for 3E611.a more closely follows the text
generally used in ECCNs and, being a familiar phrasing, is less likely
to be misunderstood. However, BIS does not agree that the change brings
ECCN 3E611.b within the scope of 3E611.a. Paragraph .b controls
technology for four specific commodities. Without the specific listing
in paragraph .b and a related exclusion in paragraph .a, that
technology would be controlled under the broader general language of
paragraph .a. The purpose of paragraph .b in ECCN 3E611 is to delineate
technology types for which License Exception STA may be used only for
``build-to-print'' technology, a limitation that does not apply to
paragraph .a. Placing these items in a separate paragraph allows for
simpler language in paragraph .a and, BIS believes, will make the scope
of the STA limitation more readily discernible to readers.

Comment 32

    One commenter recommended that BIS add a new 3E611.c:
``Technology'' ``required'' for the design of, the assembly of
components into, and the operation, maintenance, and repair of complete
production installations for items specified by the U.S. Munitions List
or ``600 series'' ECCNs. The commenter's proposed paragraph .c would
apply even if the components of such production installations are not
specified. The commenter stated that this proposal is necessary to
comply with WAML category 22.b.1.

Response 32

    The product group ``E'' ``600 series'' ECCNs provide controls
consistent with the United States commitment as a Wassenaar Arrangement
member state for the commodities and software that are in the related
``600 series'' ECCNs (e.g., 3E611 controls technology for commodities
and software in other ECCNs that end in 611). An additional control on
all such technology is not needed and could cause confusion about where
on the CCL a particular technology is controlled. Therefore this

final rule does not adopt the changes recommended in this comment.

Comments Concerning Definitions

Comment 33

    One commenter recommended adding definitions for ``form,'' ``fit''
and ``function'' to Sec.  772.1 of the EAR.

Response 33

    These three terms are defined for purposes of the definition of the
term ``specially designed'' within the text of that definition in Sec.
772.1 of the EAR. That definition became effective on October 15, 2013,
after the comment period on the July 25 (military electronics) rule
closed on September 9, 2013. Therefore, BIS makes no changes to the EAR
in response to this comment.

Comment 34

    One commenter stated that the ``Digital Computer'' definition
currently applies to Categories 4 and 5 and that BIS now needs to add
Category 3 to that definition.

Response 34

    ECCN 3A611.a, which is being created by this rule, includes, inter
alia, the phrase ``. . . computer equipment, end items, or systems
``specially designed'' for military use. . . .'' However, the term
``digital computer'' is not used in 3A611, nor does it appear in the
text of this final rule or elsewhere in CCL Category 3. Therefore, this
final rule does not add a reference to Category 3 to the definition of
digital computer in Sec.  772.1 of the EAR.

Comment 35

    One commenter recommended harmonizing the definition of ``export''
in the ITAR and EAR. This commenter expressed the opinion that the EAR
is less restrictive than the ITAR with respect to sending equipment
into international waters temporarily because it defines ``export''
differently than does the ITAR.

Response 35

    The change suggested in this comment is outside the scope of the
July 25 (military electronics) rule and is, therefore, not adopted in
this final rule. Nevertheless, harmonizing definitions in the ITAR and
the EAR remains one of the Administration's goals in the Export Control
Reform Initiative. BIS and the other government bodies involved in that
initiative continue to review the possibility of harmonizing this
definition.

Comment 36

    One commenter asked that BIS clarify whether paragraph (b)(3)(ii)
of the ``specially designed'' definition releases .y items. Paragraph
(b)(3)(iii) releases items used in or with an item that is either not
enumerated on the CCL or USML or in an ECCN controlled only for AT
reasons. The commenter stated that the .y paragraphs are controlled for
AT and China military end use (744.21) and the de minimis restriction
for foreign articles containing items that are in ``600 series'' ECCNs.

Response 36

    To be excluded from the definition of ``specially designed'' under
paragraph, (b)(3)(ii), the item either must be controlled in an ECCN in
which the only reason for control is antiterrorism or must be
controlled in an ECCN that Note 1 to the definition of ``specially
designed'' identifies as an ECCN that is treated as such for the
purposes of the definition. The .y paragraphs do not meet either of
those standards and, thus, are not excluded from the definition of
``specially designed.''

Comment 37

    One commenter requested that BIS clarify use of the phrase ``for
use in or with a commodity or defense article enumerated or otherwise
described on the CCL or the USML'' in paragraph (a)(2) of the
``specially designed'' definition. The commenter stated that BIS and
DDTC personnel have described this phrase as meaning ``one level up''
in a hierarchical design structure. For example, a part might be
incorporated into a component, which is further incorporated into an
end item. The commenter indicated that in determining whether the part
was within the scope of specially designed, one would need to look only
at the component into which the part would be incorporated, not the end
item into which the component would be incorporated. The commenter
suggested that this practice would not be appropriate for sensitive
military items because (in this example) the part might be peculiarly
responsible for achieving the performance levels of the end item.
Moreover, the commenter stated that unscrupulous manufacturers could
insert artificial non-enumerated levels into a hierarchal design for
the purpose of decontrolling a sensitive item.

Response 37

    After some review, BIS concludes that no change to this final rule
is needed in response to this comment. A part that is ``peculiarly
responsible for achieving or exceeding the performance levels,
characteristics or functions in the . . . ECCN or the U.S. Munitions
List (USML) paragraph'' that controls the end item would, according to
paragraph (a)(1) of the definition, be ``specially designed'' for that
end item unless released by paragraph (b). Paragraphs (b)(1) and
(b)(2), if applicable, would release the part regardless of the level
of the component into which it was installed. Paragraph (b)(3) releases
parts because they are in fact used in or with an item that is in
production and is either EAR99 or in an ECCN controlled only for
antiterrorism reasons. Release of parts that are in fact so used is
appropriate regardless of whether the item in production is an end item
or an intermediate part or component because of the actual use in a
civil product or the actual intent at the design stage not to design
the item for a military application. Paragraphs (b)(4), (b)(5) and
(b)(6) release items based on documented design intent. Release of a
part from the definition is appropriate if the actual documented design
intent applicable to that part meets the criteria set forth in one of
those paragraphs regardless of the nature of the end item that the part
is used in or with. Merely creating an artificial non-enumerated [on
the CCL] level in design documents in an attempt to decontrol a part or
component would not satisfy the criteria for release from the
definition of ``specially designed'' because such documents would not
reflect actual use or actual design intent. Moreover, such an attempt
would likely be an attempt to evade a requirement of the EAR and
possibly a violation of other laws as well.

Comment 38

    One commenter recommended that both the ITAR and the EAR adopt the
JEDEC [Joint Electron Device Engineering Council] definition of the
term ``application specific integrated circuit (ASIC),'' i.e., ``an
integrated circuit developed and produced for a specific application or
function and for a single customer.'' The commenter stated that
``[d]oing so will utilize existing industry terminology and,
accordingly, will provide exporters with a clear basis upon which to
classify an integrated circuit.''

Response 38

    Although BIS believes that a definition would add clarity, it is
concerned that the definition that the commenter recommends could
result in the unwarranted removal of ASICs from ECCN 3A611 that are
specific to a ``600 series'' commodity merely because a second customer
purchases the circuit.

Because of these concerns, BIS is not adopting the commenter's
definition for the term ``application specific integrated circuit
(ASIC).'' However, to enhance clarity, this final rule includes text in
ECCN 3A611 describing application specific integrated circuits as
``integrated circuits developed and produced for a specific application
or function regardless of the number of customers.''

Comments Concerning Commodity Jurisdiction Decisions

Comment 39

    Three commenters addressed the effect of the Department of State
commodity jurisdiction determinations (CJs) that designated an item as
subject to the EAR prior to the effective date of this rule. One
commenter recommended that the definition of ``specially designed'' be
revised to state either that CJs take precedence over the new rules or
that a CJ request needs to be resubmitted if it does not explicitly
address parameters in the new rules. One commenter stated that the text
of paragraph (b)(1) of the ``specially designed'' definition differs
from the text of General Order No. 5. The commenter pointed out that
some CJs did not provide an ECCN, but simply stated that an item was
not subject to the USML. This commenter asserted that an item with such
a CJ and not listed in an ``018'' ECCN would not be in the ``600
series'' by General Order No. 5, but would not be released by paragraph
(b)(1) in the ``specially designed'' definition. A third commenter
recommended adding a note to General Order No. 5 to read ``Note 1:
`Enumerated' refers to any item (i) on either the USML or CCL not
controlled in a `catch-all' paragraph and (ii) when on the CCL,
controlled by an ECCN for more than Anti-Terrorism (AT) reasons only.''
This commenter stated that ``with the implementation of 3A611.x, a
series 600 ``specially designed'' catch-all paragraph, commodities
previously self-determined to be EAR99 may be controlled under 3A611.x
as a result of the product's original design intent.'' The commenter
stated that it had received ``a class commodity jurisdiction that
determined a product is subject to the EAR when the commodity fails to
meet or exceed the minimum performance levels for control under the
ITAR.'' The commenter then classified the commodities as EAR99
``because the commodities are not positively controlled in the CCL.''

Response 39

    BIS believes that no change to the wording of either General Order
No. 5 or the ``specially designed'' definition is needed to address the
concerns of these commenters. Paragraph (c) of General Order No. 5
reads:

    Prior commodity jurisdiction determinations. If the U.S. State
Department has previously determined that an item is not subject to
the jurisdiction of the ITAR and the item was not listed in a then
existing ``018'' series ECCN, then the item is per se not within the
scope of a ``600 series'' ECCN. If the item was not listed elsewhere
on the CCL at the time of such determination (i.e., the item was
designated EAR99), the item shall remain designated as EAR99 unless
specifically enumerated by BIS or DDTC in an amendment to the CCL or
to the USML, respectively. (Emphasis added.)

    The question of whether the item was listed in a ``018'' series
ECCN that existed at the time of the determination or whether it was
listed on the CCL at all at the time of the determination is a question
of fact. It is not a question of whether CJs take precedence over
recent amendments to the EAR. Paragraph (c) applies to determinations
by the State Department ``that an item is not subject to the
jurisdiction of the ITAR.'' It does not require that the State
Department determine that the item is EAR99 for the paragraph to be
applicable. The phrase ``such determination'' in the second sentence
refers to the State Department's determination that the item was not
subject to the ITAR. Items subject to such determinations that were not
in a ``018'' series at the time of that State Department determination
do not become ``600 series'' items as a result of this rule. Items
subject to such determinations that became EAR99 because they were not
on the CCL at all at the time of the State Department determination do
not lose their EAR99 status unless subsequently ``specifically
enumerated'' in an amendment to the CCL or USML. The .x paragraphs of
the ECCNs in this rule are ``catch all'' paragraphs that do not
specifically enumerate the items that they control. There is no need to
resubmit CJ requests to determine whether the criteria in paragraph (c)
of General Order No. 5 are met.

Comment Concerning License Exceptions

Comment 40

    One commenter expressed concern about what it termed ``the proposed
prohibition on the use of the STA Exception for this Category [ECCN
3A611].'' The commenter suggested a modification to the STA paragraph
in 3A611 that it said would allow for control by DOC of the
applicability of the exception. Under the commenter's suggested
language, the STA paragraph in ECCN 3A611 would read as follows:
``Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2) of the
EAR) may not be used for any item in 3A611, unless determined by BIS to
be eligible for License Exception STA in accordance with Sec.
740.20(g) (License Exception STA eligibility requests for ``600
series'' end items).''

Response 40

    BIS believes that the commenter is misreading the STA paragraph in
ECCN 3A611. That paragraph precludes use of paragraph (c)(2) of License
Exception STA; it does not preclude the use of paragraph (c)(1).
Paragraph (c)(1) authorizes the use of License Exception STA to the 36
destinations in Country Group A:5. Paragraph (c)(2) authorizes limited
use of License Exception STA to send certain items to the eight
destinations listed in Country Group A:6 if the only reason for control
that applies to the transaction is national security. No ``600 series''
items are eligible to be exported to destinations in Country Group A:6
under License Exception STA, a policy that has been followed
consistently in all rules creating ``600 series'' ECCNs. Accordingly,
BIS is making no changes to the rule in response to this comment.

Comment Concerning Recordkeeping

Comment 41

    One commenter stated that BIS takes the view that EAR recordkeeping
requirements apply to all transactions described in Sec.  762.1 of the
EAR, including those transactions that are completed without a license,
under a License Exception, or pursuant to an individual license issued
by BIS. The commenter stated that recording intangible technology
transfers that do not require a license may have made sense when fewer
methods of making such transfers existed. However, the commenter
asserts that the same recordkeeping requirement for intangible
transfers of NLR technology now applies to email, individual phones,
VOIP and teleconferences. Large companies with multinational operations
can generate thousands of records annually. The benefit of not
requiring a license is largely negated by this recordkeeping
requirement, with no obvious corresponding benefit to national
security. This also seems to contradict the goals of Export Control
Reform--previously licensed technology will become NLR, but records of

unlicensed, intangible transfers still need to be kept.
    The commenter suggested that BIS review the value of industry
maintaining records of transfers of technologies for which no license
is required. BIS might be guided by its approach to EAR Sec.  732.5(b),
which states that exports from the United States of items on the CCL
that are designated EAR99 generally do not require a Destination
Control Statement, even though such items are ``subject to the EAR.''
Similar flexibility in interpreting what is subject to the EAR could be
usefully applied to NLR recordkeeping.

Response 41

    BIS is not making any changes to the EAR recordkeeping requirements
in response to this comment because such changes would be outside the
scope of the changes proposed in the July 25 (military electronics)
rule. However, BIS is planning to undertake a comprehensive review of
its recordkeeping requirements, including seeking public comment on
those requirements in the near future.

Comment Concerning Conflict Between the EAR and the ITAR

Comment 42

    One commenter recommended that BIS ``revise [ECCN] 2A984 parameters
to de-conflict with the parameters included in the [USML] Category
XI(a)(10). As written [in the July 25 Department of State Military
Electronics Rule], Category XI(a)(10) identifies electronic sensor
systems or equipment for detection of concealed weapons having a
standoff detection range of greater than 45 meters this conflicts with
[current ECCN] 2A984 entry for concealed object detection equipment
which includes a standoff distance of 100 meters.'' (Emphasis in
original).

Response 42

    This comment was also made in connection with the State July 25
(military electronics) rule. The Department of State's final rule
includes language in Category XI(a)(10) that excludes sensor systems
that meet the technical parameters set forth in ECCN 2A984, effectively
eliminating any overlap in coverage. Therefore, this final rule makes
no change to ECCN 2A984 in response to this comment.

Comments Not Related to the Proposed Rule

Comment 43

    One commenter recommended changes to 37 ECCNs and several changes
to the USML to address instances where the commenter believed the
regulations are inconsistent with the Missile Technology Control Regime
or where the commenter believed that ITAR and the EAR are inconsistent
or overlap.

Response 43

    BIS is taking no action on this comment because it is not relevant
to the July 25 (military electronics) rule.

Comment 44

    Two commenters recommended that certain items be removed from the
USML.

Response 44

    BIS is taking no action on these comments because the USML is
administered by the Department of State.

Detailed Description of Changes Made by This Rule

Revision to Note 1 to ECCN 0A614

    This rule adds the phrase ``radar trainers for radars classified
under ECCN 3A611'' to Note 1 to (ECCN) 0A614, which is an illustrative
list of items controlled by that entry. BIS proposed including that
phrase in its initial proposal to create ECCN 0A614 (see 77 FR 35310,
35316, June 13, 2012). When the final rule creating ECCN 0A614 was
published, ECCN 3A611, although proposed, did not yet exist so BIS
omitted that phrase from ECCN 0A614 and stated its intent to add the
phrase to ECCN 0A614 once ECCN 3A611 was created (see 79 FR 264, 267,
January 2, 2014). Because this final rule creates ECCN 3A611, it also
adds the phrase to ECCN 0A614.

Removal of Obsolete Cross References From the ``Related Controls''
Paragraphs of ECCNs 3A001, 3D001, 3E001 and 3E003

    This rule removes from the ``Related Controls'' paragraphs of ECCNs
3A001, 3D001, 3E001 and 3E003 references to certain specific provisions
of the USML because the Department of State rule that is being
published concurrently with this rule makes those references obsolete.
This rule also adds to ECCN 3A001 a general reference to USML
Categories XI and XV and ECCNs 9A515 and 3A611.

Revisions to ECCN 3A101

    Currently, ECCN 3A101 refers readers to the ITAR for analog-to-
digital converters described in paragraph .a. These converters are
being moved to the CCL and continue to be controlled for MT reasons
because they are identified on the MTCR Annex. Placing such items in
this ECCN, rather than the new ECCN 3A611, makes it easier to identify,
classify, and control such items. Consequently, this rule revises ECCN
3A101.a to control analog-to-digital converters usable in ``missiles''
and having any of the characteristics described in 3A101.a.1 or a.2.
This rule also makes a conforming revision to the ``Related Controls''
paragraph of that ECCN.

New 3Y611 Series of ECCNs

    This rule adds new ECCNs 3A611, 3B611, 3D611, and 3E611 to control
military electronics and related test, inspection, and production
equipment and software and technology currently controlled by USML
Category XI that the President determined no longer warrant control on
the USML. These new ECCNs also control computers, telecommunications
equipment, radar and avionics ``specially designed'' for military use,
and parts, components, accessories, and attachments ``specially
designed'' therefor, and related software and technology to the extent
that they are not enumerated on the proposed revisions to Category XI.
This structure aligns with the current USML Category XI and ML11, which
include within the scope of ``electronics'' such items as computers,
telecommunications equipment, and radar. BIS believes that it is easier
to include such items within the scope of the proposed new ``600
series'' that corresponds to USML Category XI, rather than creating new
``600 series'' ECCNs in CCL Categories 4 (computers), 5
(telecommunications), 6 (radar) and 7 (avionics). BIS, however,
includes cross references in CCL Categories 4, 5, 6 and 7 to alert
readers that ECCN 3A611 may control such items.
    The ECCN 3Y611 series, except for ECCN 3Y611.y, is controlled for
national security (NS Column 1 or NS1), regional stability (RS Column 1
or RS1), antiterrorism (AT Column 1 or AT1), and United Nations embargo
(UN) reasons. ECCNs 3Y611.y will only be controlled for AT1 reasons
(with this final rule, ECCN 3B611 does not have a .y paragraph). Each
ECCN in this 3Y611 series is described more specifically below.

New ECCN 3A611

    ECCN 3A611 paragraph .a controls electronic ``equipment,'' ``end
items,'' and ``systems'' ``specially designed'' for military
application that are not enumerated in either a USML category or
another ``600 series'' ECCN.
    Paragraph .b is being reserved. The corresponding USML Category is
XI(b),

which, in the Department of State rule being published concurrently
with this rule, continues to be a catch-all control for ``Electronic
systems or equipment, not elsewhere enumerated in . . . [the ITAR],
specially designed for intelligence purposes that collects, surveys,
monitors, or exploits the electromagnetic spectrum (regardless of
transmission medium), or for counteracting such activities.''
    Paragraphs .c and .d control MMIC power amplifiers and discrete
microwave transistors, respectively.
    Paragraph .c controls MMIC power amplifiers in 13 frequency ranges
and paragraph .d controls discrete microwave transistors in 12 distinct
frequency ranges. Each range has additional control parameters of peak
saturated power output, power added efficiency or fractional bandwidth
or some combination of the three. These three parameters also
distinguish ECCN 3A611.c and .d from ECCN 3A001.b.2 and .b.3, which
also control MMIC power amplifiers and discrete microwave transistors.
    A note states that paragraph .d includes bare dice, dice mounted on
carriers or dice mounted in packages. The note also recognizes discrete
transistors may also be referred to as power amplifiers but that doing
so does not change the classification, whether under ECCN 3A001.b.3 or
3A611.d.
    Paragraph .e controls high frequency (HF) surface wave radar that
maintains the positional state of maritime surface or low altitude
airborne objects of interest in a received radar signal through time.
    Paragraphs .f, .g, and .h apply respectively to: (1) Application
specific integrated circuits (ASICs) and programmable logic devices
(PLD) programmed for ``600 series'' items other than .y items; (2)
printed circuit boards and populated circuit card assemblies whose
layout is ``specially designed'' for ``600 series'' items other than .y
items; and (3) multichip modules for which the pattern or layout is
``specially designed'' for ``600 series'' items other than .y items. In
the Note to paragraph .f, ASIC is defined as ``an integrated circuit
developed and produced for a specific application or function
regardless of number of customers for which the integrated circuit is
developed or produced.'' ASICs, printed circuit boards and populated
circuit card assemblies and multichip modules for .y items are
controlled in paragraph .y.
    Paragraphs .i through .w are reserved.
    Paragraph .x controls ``parts,'' ``components,'' ``accessories''
and ``attachments'' that are ``specially designed'' for a commodity
controlled by ECCN 3A611 or for an article controlled by USML Category
XI, and not enumerated or described in a USML category.
    A related control note in ECCN 3A611 clarifies that electronic
parts, components, accessories, and attachments that are ``specially
designed'' for military applications that are not enumerated in any
USML Category, but are within the scope of a ``600 series'' ECCN, are
controlled by that ``600 series'' ECCN. For example, electronic
components not enumerated on the USML that are ``specially designed''
for a military aircraft controlled by USML Category VIII or ECCN 9A610
are controlled by ECCN 9A610.x by this final rule. Similarly,
electronic components not enumerated on the USML that are ``specially
designed'' for a military vehicle controlled by USML Category VII or
ECCN 0A606 are controlled by ECCN 0A606.x. The purpose of this note and
the limitations in ECCN 3A611.x is to prevent any overlap of controls
over electronics ``specially designed'' for particular types of items
described in other ``600 series'' ECCNs (which is not be controlled by
3A611.x), on one hand, and other electronic parts, components,
accessories, and attachments ``specially designed'' for military
electronics that are not enumerated on the USML (which is controlled by
ECCN 3A611.x), on the other.
    Additional related control notes address: Electronic items that are
enumerated in USML categories, application specific integrated
circuits, unprogrammed programmable logic devices, printed circuit
boards and populated circuit cards, and multichip modules. Finally, a
related control note informs readers that certain radiation-hardened
microelectronic circuits are controlled by ECCN 9A515.d.
    Notes to ECCN 3A611.x specify that it controls: (1) Parts,
components, accessories, and attachments ``specially designed'' for a
radar, telecommunications, acoustic system or equipment or computer
``specially designed'' for military application that are neither
controlled in any USML category nor controlled in another ``600
series'' ECCN; and (2) parts and components ``specially designed'' for
underwater sensors or projectors controlled by proposed USML Category
XI(c)(12) containing single-crystal lead magnesium niobate lead
titanate (PMN-PT) based piezoelectrics.
    This rule includes an additional note to ECCN 3A611.x stating that
``Forgings, castings, and other unfinished products, such as extrusions
and machined bodies, that have reached a stage in manufacture where
they are clearly identifiable by mechanical properties, material
composition, geometry, or function as commodities controlled by ECCN
3A611.x are controlled by ECCN 3A611.x.'' This note, which did not
appear in the November 28 (military electronics) rule or the July 25
(military electronics) rule, clarifies BIS' intent to define the parts,
components, accessories and attachments controlled by paragraph .x in
an manner that makes the controls under paragraph .x consistent with
the controls currently imposed on such parts, components, accessories
and attachments by the ITAR (22 C.F.R. Sec.  121.10).
    ECCN 3A611 also contains a paragraph .y with 35 subparagraphs that
control specified parts, components, accessories and attachments for
commodities in any ``600 series'' ECCNs. Antiterrorism (AT Column 1) is
the only reason for control that applies to paragraph .y. However, as
with other ``600 series'' .y ECCN paragraphs, Sec.  744.21 of the EAR
imposes a license requirement for the People's Republic of China.

New ECCN 3B611

    ECCN 3B611 imposes, under paragraph .a, controls on test,
inspection, and production end items and equipment ``specially
designed'' for the ``development,'' ``production,'' repair, overhaul,
or refurbishing of items controlled in ECCN 3A611 or USML Category XI
that are not enumerated in USML Category XI or controlled by another
``600 series'' ECCN and, under paragraph .x, for ``parts,''
``components,'' ``accessories'' and ``attachments'' that are
``specially designed'' for such test, inspection and production end
items and equipment that are not enumerated on the USML or controlled
by another ``600 series'' ECCN. Paragraphs .b through .w are reserved.

New ECCN 3D611

    ECCN 3D611 paragraph .a imposes controls on software ``specially
designed'' for the ``development,'' ``production,'' operation, or
maintenance of commodities controlled by 3A611 or 3B611 other than
software for 3A611.y. Paragraph .b imposes controls on software
``specially designed'' for the ``development,'' ``production,''
operation or maintenance of technology in ECCN 3E611.b; i.e., software
(other than build-to-print software) for technology for helix traveling
wave tubes (TWTs), transmit/receive or transmit modules, MMICs, and
discrete microwave transistors

controlled under ECCN 3A611 is not eligible for License Exception STA.
Paragraphs .c through .x is reserved. Paragraph .y controls specific
``software'' ``specially designed'' for the ``production,''
``development,'' operation or maintenance of commodities enumerated in
ECCNs 3A611.y.

New ECCN 3E611

    ECCN 3E611 imposes controls on ``technology'' ``required'' for the
``development,'' ``production,'' operation, installation, maintenance,
repair, overhaul, or refurbishing of commodities or software controlled
by ECCN 3A611, 3B611 or 3D611. Technology other than ``build-to-print''
technology for helix traveling wave tubes (TWTs), transmit/receive or
transmit modules, MMICs, and discrete microwave transistors controlled
under ECCN 3A611 is not eligible for License Exception STA.

Revisions to ECCN 4A003

    As noted above, the analog-to-digital converters described in ECCN
3A101.a are now subject to the EAR and controlled under that ECCN.
Adding the text in 3A101.a.2.b for electrical input type analog-to-
digital converter printed circuit boards or modules requires this rule
to amend ECCN 4A003 to add an MT control for items classified under
ECCN 4A003.e when meeting or exceeding the parameters described in ECCN
3A101.a.2.b. This amendment is necessary because the MT items in new
paragraph 3A101.a.2.b are a subset of the items in paragraph 4A003.e.
As a technical correction, this rule removes from the ``Reasons for
Control'' section of ECCN 4A003 the phrase ``NP applies, unless a
license exception is available. See Sec.  742.3(b) of the EAR for
information on applicable licensing review policies.'' That text does
not articulate any license requirement, and no nuclear nonproliferation
license requirement for digital computers is set forth elsewhere in the
EAR. BIS's regular practice is to impose a license requirement for
nuclear nonproliferation reasons on items that are controlled by the
Nuclear Suppliers Group. Digital computers are not so controlled.

Revisions to ECCN 5A001

    This rule revises the ``Related Controls'' paragraph in ECCN 5A001
to provide more detailed references to telecommunications equipment
subject to the ITAR under USML Categories XI and XV, while adding a
reference to 5A980 and maintaining references to ECCNs 5A101, and
5A991.

New Cross Reference ECCNs

    This final rule creates four new cross reference ECCNs to alert
readers that computers, telecommunications equipment, radar and
avionics--and parts, components, accessories and attachments
``specially designed'' therefor--are controlled by ECCN 3A611 if they
are ``specially designed'' for military application. These cross
references are intended to reduce the likelihood of confusion that
might otherwise arise because computers, telecommunications equipment,
radar and avionics generally are in CCL Categories 4, 5 (Part 1), 6 and
7, respectively. The new cross reference ECCNs and the Categories in
which they appear are: 4A611, Category 4; 5A611, Category 5, Part 1;
6A611, Category 6; 7A611, Category 7. The avionics cross reference ECCN
was not in the November 28 (military electronics) rule.

Corrections to ECCNs 7A006 and 7D101

    This rule corrects the reasons for control paragraph of ECCN 7A006
to state that the MT reason for control applies to those items covered
by ECCN 7A006 that also meet or exceed the parameters of ECCN 7A106.
ECCN 7A006 now applies the missile technology reason for control to a
range of airborne altimeters that extends beyond the range of
altimeters that are on the MTCR Annex. BIS's practice is to apply the
MT reason for control only to items on that Annex. This change conforms
ECCN 7A006 to that practice. Similarly, this rule adds the phrase ``for
missile technology (MT) reasons'' to the heading of ECCN 7D101.
Currently, ECCN 7D101 applies the MT reason for control to software for
a range of commodity ECCNs. Not all of those commodities are controlled
for MT reasons. The new text limits the scope of MT controls in ECCN
7A106 to commodities on the MTCR Annex, and that of ECCN 7D101 to
software for commodities on the MTCR Annex.

New 9Y620 Series of ECCNs

    This rule creates ECCNs 9A620, 9B620, 9D620, and 9E620 to apply
NS1, RS1, AT1 and UN reasons for control to cryogenic and
superconducting equipment described in category ML20 of the WAML, and
to test, inspection and production equipment, software and technology
therefor. Category ML20 covers cryogenic and superconducting equipment
that is ``specially designed'' to be installed in a vehicle for
military ground, marine, airborne, or space applications. BIS believes
that such equipment is used in experimental or developmental vehicle
propulsion systems that employ superconducting components and cryogenic
equipment to cool those components. BIS has not identified evidence of
trade in such items. To the extent that exports do exist, the items
currently are subject to the license requirements of the USML category
that controls the vehicle into which the equipment will be installed,
i.e., Category VI, surface vessels; Category VII, ground vehicles;
Category VIII, aircraft; and Category XV, spacecraft. This rule places
this cryogenic and superconducting equipment, its related test,
inspection and production equipment, and its related software and
technology into a single set of ``600 series'' ECCNs ending with the
digits ``20'' to correspond to the relevant WAML category. This
approach furthers the administration's Export Control Reform Initiative
goal of aligning U.S. controls with multilateral controls wherever
feasible. Each ECCN in this series is described more specifically
below.

New ECCN 9A620

    ECCN 9A620.a controls equipment ``specially designed'' to be
installed in a vehicle for military ground, marine, airborne, or space
applications, capable of operating while in motion and of producing or
maintaining temperatures below 103 K (-170 [deg]C). Paragraph .b
controls ``superconductive'' electrical equipment (rotating machinery
and transformers) ``specially designed'' to be installed in a vehicle
for military ground, marine, airborne, or space applications, and
capable of operating while in motion. Paragraphs .c through .w are
reserved. Paragraph .x controls parts, components, accessories and
attachments ``specially designed'' for a commodity controlled by ECCN
9A620.
    This rule adds a note to ECCN 9A620.x stating that ``Forgings,
castings, and other unfinished products, such as extrusions and
machined bodies, that have reached a stage in manufacture where they
are clearly identifiable by mechanical properties, material
composition, geometry, or function as commodities controlled by ECCN
9A620.x are controlled by ECCN 9A620.x.'' This note, which did not
appear in the November 28 (military electronics) rule or the July 25
(military electronics) rule, clarifies BIS' intent to define the parts,
components, accessories and attachments controlled by paragraph .x in
an manner that makes the controls under paragraph .x consistent with
the controls currently imposed on such parts components, accessories
and attachments by the ITAR (22 CFR Sec.  121.10).

New ECCN 9B620

    ECCN 9B620 controls test, inspection, and production end items and
equipment ``specially designed'' for the ``development,''
``production,'' repair, overhaul or refurbishing of items controlled in
ECCN 9A620.

New ECCN 9D620

    ECCN 9D620 controls software ``specially designed'' for the
``development,'' ``production,'' operation, or maintenance of
commodities controlled by ECCNs 9A620 or 9B620.

New ECCN 9E620

    ECCN 9E620 controls ``technology'' ``required'' for the
``development,'' ``production,'' operation, installation, maintenance,
repair, overhaul, or refurbishing of commodities or software controlled
by ECCNs 9A620, 9B620 or 9D620.

New Controls on Software and Technology for Certain Wing Folding
Systems

    The Department of State rule being published simultaneously with
this final rule revises USML Category VIII, paragraph (h)(4) by adding
criteria to ensure that certain wing folding systems for commercial
aircraft, and the related software and technology, are not controlled
as defense articles on the USML. As a result, the Department of
Commerce implements in this final rule provisions to control software
and technology for the development of certain wing folding systems for
aircraft with gas turbine engines.
    A wing folding system for military aircraft, other than one
described in the revised USML Category VIII(h)(4), is controlled in the
catch-all paragraph .x and related software and technology controls in
the 600 Series ECCNs 9A610, 9D610 and 9E610. A wing folding system for
commercial and other civilian aircraft is controlled under ECCN 9A991,
which controls, for antiterrorism reasons, aircraft and parts and
components that are not elsewhere specified on the CCL. Production and
use software and technology for such systems can be adequately
controlled under the related ECCNs 9D991 and 9E991, respectively.
However, software and technology controlled by these two ECCNs require
a license to only five destinations. License requirements for a greater
number of destinations are needed for development software and
technology for wing folding systems to be used on large commercial
aircraft because the software and technology required to develop a
robust civil system would confer insights that would be useful to the
development of a military wing folding system. Ability to develop or
acquire aircraft with robust wing folding systems greatly increases the
number and types of military aircraft that can be deployed from an
aircraft carrier because of the limited space available for storage and
maintenance activities on such vessels as compared to a land based
airport.
    No multilateral export controls on this development software and
technology currently exist. Moreover, this software and technology does
not meet the parameters of any current ECCN that would provide a
license requirement for the appropriate number of destinations,
creating a risk that the civil development software and technology will
be exported without the U.S. Government prior review that such
transactions merit.
    Based on the foregoing, the Department of Commerce, with the
concurrence of the Departments of Defense and State, has determined
that software and technology for the development of wing folding
systems for aircraft with gas turbine engines should be controlled on
the CCL for export due to the growth in civil application for wing
folding systems. The software and technology for the development of
these systems still provide at least a significant military or
intelligence advantage to the United States such that control at the
AT-only level in ECCNs 9D991 and 9E991 would not sufficiently limit the
proliferation of this technology contrary to U.S. national security and
foreign policy interest. Therefore, this final rule adds such software
and technology to Supplement No. 5 to part 774, thereby controlling
them under ECCNs 0D521 and 0E521, respectively. In accordance with
Sec.  742.6(a)(7)(iii) of the EAR, this software and technology will
remain so-classified for one year from the date they are listed in
Supplement No. 5 to part 774 of the EAR unless the software or
technology is re-classified under a different ECCN, the 0Y521
classification is extended, or the software or technology is designated
as EAR99. The U.S. Government intends to submit a proposal to control
this software and technology on the Wassenaar Arrangement Dual-Use
List. An ECCN 0Y521 classification may be extended for two one-year
periods to provide time for the U.S. Government and multilateral
regime(s) to reach agreement on controls for the item, and provided
that the U.S. Government has submitted a proposal to obtain
multilateral controls over the item. Further extension beyond three
years may occur only if the Under Secretary for Industry and Security
makes a determination that such an extension is in the national
security or foreign policy interests of the United States. An extension
or re-extension, including a determination by the Under Secretary for
Industry and Security, will be published in the Federal Register.

Export Administration Act

    Although the Export Administration Act expired on August 20, 2001,
the President, through Executive Order 13222 of August 17, 2001, 3 CFR,
2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March
8, 2013, 78 FR 16129 (March 13, 2013) and as extended by the Notice of
August 8, 2013, 78 FR 49107 (August 12, 2013), has continued the Export
Administration Regulations in effect under the International Emergency
Economic Powers Act. BIS continues to carry out the provisions of the
Export Administration Act, as appropriate and to the extent permitted
by law, pursuant to Executive Order 13222 as amended by Executive Order
13637.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distribute impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been designated a ``significant regulatory
action,'' although not economically significant, under section 3(f) of
Executive Order 12866. Accordingly, the rule has been reviewed by the
Office of Management and Budget (OMB).
    2. Notwithstanding any other provision of law, no person is
required to respond to, nor is subject to a penalty for failure to
comply with, a collection of information, subject to the requirements
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA),
unless that collection of information displays a currently valid OMB
control number. This final rule affects two approved collections:
Simplified Network Application Processing System (control number 0694-
0088), which includes, among other things, license applications, and
License Exceptions and Exclusions (0694-0137).
    As stated in the proposed rule published on July 15, 2011 (76 FR

41958), BIS initially believed that the combined effect of all rules to
be published adding items to the EAR that will be removed from the ITAR
as part of the administration's Export Control Reform Initiative will
increase the number of license applications to be submitted by
approximately 16,000 annually. As the review of the USML has
progressed, the interagency group has gained more specific information
about the number of items that will come under BIS jurisdiction and
whether those items would be eligible for export under license
exception. As of June 21, 2012, BIS revised that estimate to an
increase in license applications of 30,000 annually, resulting in an
increase in burden hours of 8,500 (30,000 transactions at 17 minutes
each) under control number 0694-0088. BIS continues to believe that its
revised estimate is accurate.
    Military electronic equipment, certain cryogenic and
superconducting equipment, related test, inspection and production
equipment, ``parts,'' ``components,'' ``accessories'' and
``attachments,'' ``software'' and ``technology'' formerly on the USML
become eligible for License Exception STA under this rule. BIS believes
that the increased use of License Exception STA resulting from the
combined effect of all rules to be published adding items to the EAR
that would be removed from the ITAR as part of the Administration's
Export Control Reform Initiative would increase the burden associated
with control number 0694-0137 by about 23,858 hours (20,450
transactions @ 1 hour and 10 minutes each).
    BIS expects that this increase in burden will be more than offset
by a reduction in burden hours associated with approved collections
related to the ITAR. The largest impact of the proposed rule would
likely apply to exporters of replacement parts for military electronic
equipment that has been approved under the ITAR for export to allies
and regime partners. Because, with few exceptions, the ITAR allows
exemptions from license requirements only for exports to Canada, most
exports of such parts, even when destined to NATO and other close
allies, require specific State Department authorization. Under the EAR,
as proposed here, such parts would become eligible for export to NATO
and other multi-regime allies under License Exception STA. Use of
License Exception STA imposes a paperwork and compliance burden
because, for example, exporters must furnish information about the item
being exported to the consignee and obtain from the consignee an
acknowledgement and commitment to comply with the EAR. However, the
Administration understands that complying with the burdens of STA is
likely less burdensome than applying for licenses. For example, under
License Exception STA, a single consignee statement can apply to an
unlimited number of products, need not have an expiration date, and
need not be submitted to the government in advance for approval.
Suppliers with regular customers can tailor a single statement and
assurance to match their business relationship rather than applying
repeatedly for licenses with every purchase order to supply reliable
customers in countries that are close allies or members of export
control regimes or both.
    Even in situations in which a license would be required under the
EAR, the burden is likely to be reduced compared to the license
requirement of the ITAR. In particular, license applications for
exports of technology controlled by ECCN 3E611 are likely to be less
complex and burdensome than the authorizations required to export ITAR-
controlled technology, i.e., Manufacturing License Agreements and
Technical Assistance Agreements.
    3. This rule does not contain policies with Federalism implications
as that term is defined under E.O. 13132.
    4. BIS finds good cause under 5 U.S.C. 553(b)(B) to waive prior
notice, the opportunity for public comment for the provisions of this
final rule imposing controls on software and technology for the
development and production of wing folding systems for civil aircraft
with gas turbine engines to ECCN 0D521 and 0E521 via Supplement No. 5
to part 774 of the EAR. BIS, with the concurrence of the U.S.
Departments of Defense and State, is implementing this rule because the
software and technology for those wing folding systems provide a
significant military or intelligence advantage to the United States and
that expedited control on the CCL is needed to prevent diversion of
such software and technology to governments or parties that could use
the knowledge conveyed by such software and technology to acquire
insights that would be useful in developing military aircraft wing
folding systems and that likely would use such insights to the
detriment of United States national security and foreign policy
interests.
    Immediate implementation will allow BIS to prevent exports of these
items to users and for uses that pose a national security threat to the
United States or its allies. If BIS delayed this rule to allow for
prior notice and opportunity for public comment, the resulting delay in
implementation would afford an opportunity for the export of these
items to users and uses that pose such a national security threat,
thereby undermining the purpose of the rule. In addition, if parties
receive notice of the U.S. Government's intention to control these
items under 0Y521 once a final rule was published, they would have an
incentive to either accelerate orders of these items or attempt to have
the items exported prior to the imposition of the control.
    Further, BIS finds good cause to waive the 30-day delay in
effectiveness under 5 U.S.C. 553(d)(3). Immediate implementation will
allow BIS to prevent exports of these items to users and for uses that
pose a national security threat to the United States or its allies. If
BIS delayed this rule to allow for a 30-day delay in effectiveness, the
resulting delay in implementation would afford an opportunity for the
export of these items to users and uses that pose such a national
security threat, thereby undermining the purpose of the rule.
    Although notice and opportunity for comment are not required, BIS
welcomes comments on the addition of wing folding technology or any
other aspects of this rule at any time.