those that this rule will control under ECCN 0A501.x, when the export,
reexport, or transfer (in-country) is to a Country Group A:5 country,
including affiliates. License Exception STA is more restrictive than
paragraph (a)(10) of License Exception TMP, but because of the
sensitivity of the items involved it is not appropriate to allow for
the paragraph (a)(10) authorization to be available. As for firearms
transshipped through the United States, Sec.  740.9 (b)(3), (4), and
(5) will be available to authorize the export and will be sufficient to
address concerns about such authorizations.
    BIS does not accept the suggested change to the time limitation in
Sec.  740.9(b)(5) to lengthen it from one year (as included in the
Commerce May 24

rule) to four years because one year will be sufficient for these types
of temporary end uses in the U.S. For the same reason, BIS also does
not accept the suggestion to allow for extensions of temporary imports
made under paragraph (b)(5) as suggested by one commenter.
    Comment 65: One commenter noted that the proposed additions to
Sec.  740.9 included an instruction directing temporary importers and
exporters to contact CBP at the port of temporary import or export, or
at the CBP website, for the proper procedures to provide any data or
documentation required by BIS. The commenter suggested that BIS and CBP
coordinate to create standardized instructions for all ports that can
be made available online, so that each shipment does not have to be
specially coordinated.
    BIS response: BIS agrees and will take steps, in coordination with
CBP, to create standardized instructions for all ports that can be
posted online prior to the effective date of this final rule.
    Comment 66: One trade association commenter asserted that ``new
paragraph (b)(5) in License Exception TMP and the related provisions in
Sec.  758.10 that detail the process for temporary import and
subsequent export of these items is fair and reasonable.'' This
commenter asserted ``it is common practice to cite the regulatory
exception for the temporarily imported commodities at the time of
import, then reference the import documents at time of return export of
the goods'' and does not believe the process in the Commerce May 24
rule will cause any additional burden to exporters.
    BIS response: BIS agrees and adopts these provisions in this final
rule as proposed.
    Comment 67: One commenter requests License Exception TMP be
expanded beyond paragraphs (a)(5) and (6) to also allow for use in film
production for subsequent permanent return to the United States.
Alternatively, one commenter requests that BIS should consider a
procedure or license, similar to a DSP-73, to allow for the temporary
export and re-importation of firearms. Another commenter asserted that
BIS should provide additional guidance on the return of temporary
exports under the new paragraph (b)(5) under License Exception TMP.
    BIS response: BIS confirms that License Exception TMP under
paragraphs (a)(5) and (6) will not be available in that type of a fact
pattern, but a Commerce license could be applied for to authorize these
types of exports. As noted above, Commerce licenses are flexible enough
to authorize temporary exports that are not otherwise eligible for
License Exception TMP. The importation into the United States after
temporary export will not require a separate EAR authorization. BIS
agrees providing guidance for the import of items temporarily exported
will be helpful and clarifies that the import of items temporarily
exported does not require an EAR authorization for import.

License Exception GOV

    Comment 68: One commenter asserted that the phrase ``or other
sensitive end-users'' is unclear and recommended deleting the phrase or
enumerating the specific types of ineligible entities.
    BIS response: BIS includes a parenthetical phrase in the final rule
under the new Note 2 to paragraph (b)(2) to include illustrative
examples of other sensitive end-users. This final rule adds the
parenthetical phrase ``(e.g., contractors or other governmental parties
performing functions on behalf of military, police, or intelligence
entities)'' after the phrase ``or other sensitive end-users'' to
provide greater clarity on the other end-users that are excluded.

License Exception BAG

    Comment 69: Several commenters expressed opposition to the
requirement for individuals to have to file in AES for personally owned
firearms and ammunition exported under License Exception BAG, that was
included in the Commerce May 24 rule. The commenters expressed concerns
that requiring individuals to file in AES is problematic and unduly
burdensome; that there is not a genuine need for this information and
would violate the spirit of congressional prohibitions against Federal
firearm registries; and that Department of State and CBP already tried
requiring AES filing for individuals under the ITAR and it was not
workable. Commenters identified a number of issues with the AES filing
system for individuals, including the cost to create accounts, the
compatibility of the hardware and software, concerns that IRS and
Census requirements are in conflict, and the mismatch of required
information for individuals with the fields that are currently in AES
that are oriented to commercial exports.
    For these reasons described above, several commenters requested use
of CBP Form 4457 as the permanent solution. Some commenters asserted
that CBP Form 4457 serves an important purpose for some foreign
governments, but could be improved by harmonizing CBP procedures for
Form 4457 between different CBP offices to ensure the forms are being
issued consistently. Some commenters asserted that they would support a
simplified system that would be based on U.S. passports, possibly
linked to an electronic version of the CBP Form 4457.
    BIS response: BIS was aware of these types of concerns, including
the recent history of this issue under the ITAR. The Commerce May 24
rule stated that whether and how BIS includes this requirement in a
final rule would be based on whether CBP is able to update its
processes, and other agencies as needed, to allow for individuals to
easily file EEI in AES by the time a final rule is published. The
Commerce May 24 rule also noted that if CBP is not able to do so, then
the final rule may direct exporters to continue to use CBP's existing
process, which is the use of the CBP Form 4457, until a workable
solution is developed or CBP suggests an alternative simplified
solution for gathering such information for temporary exports of
personally-owned firearms and ammunition.
    At this time, BIS notes that CBP and the U.S. Census Bureau have
not made changes to the AES system on the Automated Commercial
Environment (ACE) that would address the concerns expressed. Therefore,
taking that into account and the comments received on the Commerce May
24 rule, this final rule does not adopt the requirement for individuals
exporting their personally owned firearms and ammunition under License
Exception BAG to file in AES. Instead, this final rule incorporates the
requirement for individuals to file the CBP Form 4457. BIS notes that
if CBP and the U.S. Census Bureau later adopt changes that would
address the underlying issues, or if CBP adopts changes to the process
for submitting the CBP Form 4457, then BIS would make conforming
changes to the EAR.
    Comment 70: BIS also received comments expressing concern over the
availability of License Exception BAG for firearms. One commenter
requested that the provision authorizing license-free exports of semi-
automatic rifles by citizens and legal permanent residents should be
removed, because a sufficient justification was not provided in the
Commerce May 24 rule. Another commenter asserted that if a firearm is
stolen or lost that is exported under License Exception BAG, there will
be little that can be done to recover the weapon. The commenter also
asserted it will be easier for smugglers to take advantage of License
Exception BAG to facilitate trafficking. One commenter

expressed concern that foreigners temporarily in U.S. will abuse
License Exception BAG. One commenter asserted that the May 24 rule
would not stop non-resident aliens leaving the United States via
commercial airlines from taking firearms ``accessories,''
``attachments,'' ``components,'' ``parts,'' and ammunition with them.
    BIS response: BIS acknowledges these concerns but disagrees that
additional changes to this final rule are warranted. The availability
of License Exception BAG will be made to be consistent with 22 CFR
123.17(c), which authorizes U.S. persons to take up to three non-
automatic firearms and up to 1,000 cartridges therefor abroad for
personal use. As far as the potential for items to be lost or stolen,
License Exception BAG requires the exporter to maintain control of
their personal belongings and to return with those items unless
destroyed overseas and the requirements are more straightforward than a
commercial transaction in which there are multiple parties. BIS notes
that related to loss or theft the concern applies equally if a firearm
was exported under a Commerce license. Further, the U.S. Government
maintains oversight through the requirement in this final rule for the
CBP Form 4457 to be filed, along with the export requirements to
present the firearm to CBP prior to export under License Exception BAG.
In addition, this final rule requires the serial number, make, model,
and caliber of the firearm to be included on the CBP Form 4457. When
the U.S. citizen or permanent resident alien returns, the U.S.
Government expects and requires that the same firearm to be returned as
included on the CBP Form 4457. Failure to comply with these
requirements could subject a U.S. citizen or permanent resident alien
to administrative and/or criminal penalties depending on the specifics
of the potential violation. BIS notes that License Exception BAG for
non-resident aliens will be limited to allowing nonresident aliens
leaving the United States to take firearms, and ammunition controlled
by ECCN 0A501 or 0A505 that they lawfully brought into the United
States, under the provisions of Department of Justice regulations at 27
CFR part 478. This is an important safeguard to ensure that the items
being exported under License Exception BAG are limited to those that
were lawfully brought into the U.S. The availability of License
Exception BAG for these non-resident aliens will also be consistent
with 22 CFR 123.17(d), which authorizes foreign persons leaving the
United States to take firearms and ammunition controlled under Category
I(a) of the USML (both non-automatic and semi-automatic) that they
lawfully brought into the United States. The export of ``accessories,''
``attachments,'' ``components,'' and ``parts'' is not eligible for
License Exception BAG and would require a separate U.S. Government
authorization.
    Comment 71: One commenter noted that Sec.  740.14(c)(1) ``Limits on
eligibility'' currently states that the items must be ``owned by'' the
individuals rather than ITAR Sec.  123.17(c)(3)'s focus on the person's
``exclusive use'' and recommended conforming the EAR with the ITAR's
scope.
    BIS response: BIS does not agree. The requirements in Sec.
740.14(c)(1) apply to all items that subject to the EAR that are
eligible, so these requirements are intended to be broader than the
exclusive use limitation in paragraph (e) (Special provisions for
firearms and ammunition).

Reporting Requirements

    Comment 72: BIS received a number of comments related to reporting
requirements. One commenter asserted that it appears that requiring
conventional arms reporting for firearms to be controlled under ECCN
0A501.a and .b would add welcomed specificity to reports required by
the United Nations and the Wassenaar Arrangement while another
commenter was concerned that firearms are being singled out for
conventional arms reporting. One commenter asserted that exporters
should not have to submit reports under the conventional arms reporting
for the Wassenaar Arrangement and the United Nations because BIS
already has ways to obtain this information from other U.S. Government
sources.
    BIS response: BIS agrees that the conventional arms reporting
requirements will improve transparency and meet U.S. Government
multilateral commitments to the Wassenaar Arrangement and the United
Nations. BIS notes that other USML Categories that were revised that
moved items to the CCL under ``600 series'' and 9x515 ECCNs were not
identified under the Wassenaar Arrangement or United Nations List for
requiring reporting for conventional arms. Some of the USML Category I
items being moved to the CCL are identified under the Wassenaar
Arrangement or United Nations List for requiring conventional arms
reporting and thus were included to meet U.S. Government commitments.
    To ease reporting requirements on exporters as suggested by one
commenter and provide greater flexibility for industry, BIS clarifies
that for the reporting required in this final rule can be accomplished
in one of two ways. First, the exporter can follow the process outlined
in part 743 by sending in reports to BIS with the required information.
However, because of the EEI filing requirements in Sec.
758.1(g)(4)(ii) for the firearms that require conventional arms
reporting, all conventional arms reporting requirements for firearms
should be able to be met by using the alternative submission method
described below in the regulatory changes. Under the alternative
method, the U.S. Government will rely on the EEI record in AES for
firearms classified under 0A501.a and 0A501.b, by the exporter being
required to always include as the first text in the Commodity
Description field in AES the first six characters of the ECCN number,
i.e., ``0A501.a'' or ``0A501.b.''
    Comment 73: One commenter raised questions whether the requirements
of the Paperwork Reduction Act (PRA) were met for imposing a new
requirement and whether this information would be needed by BIS.
    BIS response: BIS had created this reporting requirement in the
April 16, 2013, initial implementation rule, including providing
estimates for the anticipated burden at that time in anticipation of
the full completion of the USML to CCL review process and these end
item firearms being moved to the CCL. BIS makes this clearer in this
final rule, as well as describing the alternative method that will
eliminate the need for any type of additional reporting and instead use
the data that will be reported in the EEI filing in AES.
    Comment 74: One commenter asserted that BIS reporting provides even
less data than the Department of State 665 report and requested that
BIS improve its reporting.
    BIS response: In the past, BIS has provided similar data that is
included in the Department of State 655 report in the BIS annual
foreign policy report and in reports on the BIS website detailing
exports by country and largest quantity of ECCNs being exported to the
respective countries. Going forward under ECRA, BIS will be required to
submit an annual report to Congress that will include the information
specified in Section 1765 of ECRA, including implementation of end-use
monitoring of military items on the EAR. BIS notes because this final
rule will require EEI filing in AES for the firearms moved to the CCL
and CBP Form 4457 for License Exception BAG, BIS will have data

available on exports of firearms moved from USML Category I to the CCL.

Serial Numbers, Make, Model, and Caliber in AES (Sec.  758.1(g)(4))

    Comment 75: Several commenters asserted they were opposed to the
expanded data elements (i.e., serial numbers, make, model, and caliber)
required as part of the EEI filing to AES for firearms that would be
transferred from the USML to the CCL, suggesting that the expanded data
elements would exacerbate the problems for private travelers forced to
use the system and violate the spirit of congressional prohibitions
against Federal firearm registries. BIS also received comments
asserting that filing in AES poses an undue burden on exporters to file
information that is otherwise available to U.S. Government, such as
through the Gun Control Act and ATF regulations, and that it may
violate the PRA because the burden is redundant. Another commenter
asserted that because of AES character limitations it may be difficult
or impossible to include the serial number, make, model, and caliber
information. In addition, one commenter asserted that the manufacturer,
model number, and caliber does not assist law enforcement verify the
export because the Foreign Trade Regulations (FTR) and EAR already
require that the item description entered in the EEI filing in AES
conform to that shown on the license. One commenter asserted it
generally supports strong oversight measures for arms transfers and
from that perspective, it welcomes detailed digital record-keeping
requirements. Another commenter recommended using the term ``model'' or
``model designation'' rather than ``model number,'' consistent with ATF
regulations.
    BIS response: BIS has included filing requirements only when
necessary to ensure that export control concerns will be protected,
including export enforcement and transparency concerns. As noted above,
BIS in this final rule addresses the concerns about exports under
License Exception BAG by not requiring an EEI filing in AES for such
exports, though CBP Form 4457 will require information on the serial
numbers, make, model, and caliber for the firearms being exported. This
much more focused requirement will also be responsive to assertions
that the information proposed to be collected was an undue paperwork
burden on exporters.
    While other Federal regulations may require similar information,
BIS would not have the legal authority to subpoena or otherwise request
the same information unless the records are required to be kept under
the EAR. If different regulations require the same information, then
there should be no additional burden on exporters or other relevant
parties for maintaining this information to meet their various
regulatory requirements. Typically, the EAR is flexible in how specific
records are maintained since it regulates a variety of industries with
different norms.
    For items that are exported under a U.S. Government authorization
for temporary export, it is still warranted to require that information
to be filed as EEI in AES. This final rule adopts a revised requirement
in Sec.  758.1(g)(4) to limit it to temporary exports from the United
States or when the license or other approval contains a condition
requiring all or some of this information to be filed as EEI in AES.
This final rule clarifies that a temporary export for purposes of Sec.
758.1(g)(4) is any export whereby the EAR authorization requires
subsequent return to the United States (e.g., License Exception TMP or
a license authorizing a temporary export). BIS notes that this revised
approach scales back the reporting requirement significantly, focuses
it on exports of the primary concern for ensuring the U.S. Government
can confirm what was temporarily exported is what will be returned, and
importantly still retains the ability of BIS to impose this condition
when warranted on a case-by-case for any particular license where BIS
and the other license review agencies believe requiring the filing of
this information as EEI in AES is warranted. BIS is aware that the
Department of State sometimes includes such a requirement as a proviso
on some of its licenses or approvals for firearms, so the requirement
that is included in this final rule that retains the ability of BIS to
impose such a condition on Commerce licenses is consistent with
licensing practices under the ITAR.
    BIS has confirmed with CBP and the U.S. Census Bureau that AES on
the ACE platform can accommodate EEI filers to submit the serial
number, make, model, and caliber information. Under the current ITAR
licensing practices, sometimes provisos are included on a State license
or other approval that requires this information to be entered as EEI
in AES, and BIS is not aware of the current system not permitting the
proper filing of this information as EEI in AES.
    BIS generally supports strong oversight. It also accepts the
recommendation to adopt the term ``model'' instead of the proposed
``model number.''
    Comment 76: Two commenters asserted that the only place where the
reporting requirement of serial numbers, make, model, and caliber may
be warranted was for License Exception TMP. One of these commenters
noted that ``such a requirement of mandatory serial number reporting in
AES might make sense only for temporary exports and imports under TMP
in particular, to allow re-import procedures to be followed and
verified.'' However, the requirements proposed in new Sec. Sec.
758.10(b)(1)(ii) and 740.9(b)(5)(iv)(B) already cover this by requiring
serial numbers as part of a complete list to be submitted to CBP at the
time of import and/or export.
    BIS response: BIS clarifies that the reference in License Exception
TMP in new Sec. Sec.  758.10(b)(1)(ii) and 740.9(b)(5)(iv)(B) are for
information to be provided at the time of temporary import and export
of firearms temporarily in the United States. The proposed requirements
in Sec.  758.10(b)(1)(ii) in the phrase ``or other appropriate import
documentation (or electronic equivalents)'' and the reference to ``or
electronic equivalents'' was referring to the possibility that such
information could be provided to CBP in person or electronically by
using the ACE portal at the time of temporary import and subsequent
export, so BIS does not see an inconsistency with the proposed
requirement and therefore will include the requirement in this final
rule as originally proposed. BIS agrees with the commenter's assertion
that for firearms temporarily exported under License Exception TMP
under paragraph (a)(6), there is a possibility that in certain cases
the returned firearm may not be the same. This final rule includes a
Note 3 to paragraph (g)(4) in Sec.  758.1 to provide guidance on that
issue.

Entry Clearance Requirements for Temporary Imports

    Comment 77: BIS received comments asserting that foreign visitors
exporting personal firearms after temporary import should not have to
file in AES for many of the same reasons why filing in AES for exports
authorized under License Exception BAG is not appropriate. Another
commenter asserted that such AES declaration requirement would
discourage foreign participants from coming to the U.S. for hunting and
competitive shooting.
    BIS response: BIS does not agree with these assertions. As noted
above, one of the permissible identifiers in filing in AES is a foreign
passport, so the most substantive concern for individuals filing in AES
does not apply for these

filings. In addition, those using License Exception TMP will generally
be companies, so the concerns expressed about AES being more oriented
to companies compared to individuals also does not apply. For these
reasons, BIS in this final rule publishes the changes as proposed. In
addition, as noted above, each country, including the United States,
imposes requirements that it believes are warranted to regulate the
importation and use of firearms in its country. U.S. hunters and
competitive shooters that travel overseas and foreign hunters and
competitive shooters who come to the United States understand that
firearms are regulated.
    Comment 78: One commenter asserted that the ATF Form 6NIA can
confirm that the individual is returning with the same firearm that was
brought to the U.S., so there is no need to require EEI filing in AES.
    BIS response: BIS does not accept this change. To properly
administer and enforce export controls, BIS must have access to basic
information about an item and cannot solely rely on information
collected by another agency, though this information, as appropriate,
could supplement information collected by BIS.
    Comment 79: One commenter asserted that the ITAR does not have the
same type of EEI filing in AES requirement, so including this under the
EAR would be more restrictive.
    BIS response: BIS clarifies here that under the ITAR, the
Department of State is licensing the temporary import and export, which
required much of the same information requirements. The Commerce May 24
rule did not change the basic construct for how the EAR regulates
imports, but BIS needed a means to track firearms temporarily entering
the U.S. for subsequent export.
    Comment 80: One commenter requested text be added to Sec.
758.10(a)(2) to exempt from the entry clearance requirements temporary
imports by nonresident aliens who temporarily import firearms under the
provisions of 27 CFR 478.115(d).
    BIS response: BIS clarifies here the purpose of Sec.  758.10.
Because a nonresident alien, e.g., a foreign hunter, will need an
approved Form 6NIA (ATF Form 5330.3D Application/Permit for Temporary
Importation of Firearms and Ammunition by Nonimmigrant Aliens) from ATF
prior to bringing the USMIL firearm or ammunition into the U.S., the
ATF controls will account for the temporary import. Therefore, License
Exception BAG does not need to be referenced in Sec.  758.10. The
subsequent export out of the U.S. will require an EAR authorization and
would need to be done in accordance with License Exception BAG, or some
other U.S. Government authorization if License Exception BAG was not
available.
    Comment 81: One commenter asserted that the new Sec.  758.10
``Entry clearance requirements for temporary imports'' appears to apply
to all temporary imports at the time of temporary import. This
commenter asserted that as the requirements of Sec.  758.10 should not
apply to nonresident aliens temporarily importing firearms under the
separate provisions of the ATF, and recommended clarifying this in the
final rule.
    BIS response: BIS agrees. This final rule clarifies that the
requirements of Sec.  758.10 do not apply to temporary imports for
nonimmigrant aliens under the provisions of the Gun Control Act of 1968
and administered in part with the ATF Form 6NIA.
    Comment 82: One commenter was concerned that the new Sec.  758.10
``Entry clearance requirements for temporary imports'' does not address
the potential use of License Exception RPL. Specifically, proposed
Sec.  758.10(b)(1)(i) requires a statement to CBP certifying ``. . .
This shipment will be exported in accordance with and under the
authority of License Exception TMP,'' which would be a false
certification if RPL were being used.
    BIS response: BIS agrees and accepts adding License Exception RPL
as a valid purpose for a temporary import under Sec.  758.10. For the
same reason, this final rule adds BIS licenses as a valid purpose for a
temporary import under Sec.  758.10. In addition, this final rule
clarifies that a temporary import for repair or servicing in the United
States does not require an EAR authorization, but the subsequent export
must be authorized either as eligible for License Exception RPL or
authorized under a BIS license at the time of entry. For example, a BIS
license would be required at the time of entry if the repair or
servicing of a temporarily imported firearm would result in enhanced
capability of the item because License Exception RPL is not available
for such enhancements. Instead, under this final rule, the exporter
could obtain a BIS license to authorize such an export that was brought
into the United States as a temporary import. Section 758.10(a)(1)
addresses these types of imports for repair and servicing. For
additional information, please see section Entry clearance requirements
for temporary imports (Sec.  758.10) below that details the
requirements for use of these authorizations.

Relationship Between EAR and ATF Regulations

    Comment 83: One commenter requested the ATF Ruling 2004-2 be
amended to account for this USML to CCL transition, in order to not be
more restrictive under the EAR compared to the ITAR. The commenter
asserted that the ITAR draws a clear distinction between permanent and
temporary import jurisdiction in 22 CFR 120.18, although certain items
regulated under the Gun Control Act or National Firearms Act, if
authorized for import under those laws, continue to require
transactional import approval from ATF for temporary imports unless ATF
Ruling 2004-2 (April 7, 2004) permits the DSP-61 or ITAR exemption to
substitute for this approval.
    BIS response: The changes included in the Commerce May 24 rule
under Sec. Sec.  740.9 and 758.10 were intended to address issues
related to temporary importation under the EAR. As noted above, this
final rule adds License Exception RPL and BIS licenses to Sec.  758.10
to further address issues related to temporary imports under the EAR.
Other agencies will review, and if necessary, address, any effects of
these final rules.
    Comment 84: One commenter recommended coordinating proposed changes
with ATF so that the corresponding changes are made to the USMIL at the
same time, which would prevent businesses from having to consult both
the USML and USMIL when deciding whether a transaction involves
brokering.
    BIS response: The USML and the USMIL are separate lists of AECA
defense articles with both shared as well as different AECA objectives,
and as such warrant the retention as separate lists.
    Comment 85: One commenter was concerned that removing license
requirements for temporary imports of the items removed from the USML
would create another channel for criminal elements to obtain weapons in
the U.S.
    BIS response: BIS disagrees. Temporary imports will be addressed by
BIS, and the same type of U.S. Government authorization requirement
will apply for exports of items temporarily imported as other exports
under the EAR.
    Comment 86: One commenter was concerned that the Commerce May 24
rule did not provide a mechanism, such as a DSP-73, for certain
firearms to be temporarily exported and subsequently returned to the
U.S., given the firearm importation prohibitions under 18

U.S.C. 922(l) and 925(d)(3). This commenter asserted that unlike many
other items that have transitioned from the USML to the CCL, firearms
are subject to unique restrictions on the permanent import side under
the jurisdiction of the ATF. This commenter asserted that the
Department of State's jurisdiction over temporary exports and temporary
imports has played an important role by providing companies with a
viable method of bringing their guns back into the U.S. without running
afoul of ATF's strict importation prohibitions and similar treatment
should be retained under the EAR.
    BIS response: BIS clarifies that BIS will require a U.S. Government
authorization for temporary exports. The EAR authorizations most likely
to be used to authorize temporary exports include License Exceptions
BAG and TMP, as well as Commerce licenses. Therefore, BIS does have
similar authorization requirements and approval mechanisms as under the
ITAR. BIS notes that the import back into the U.S. will not require an
EAR authorization.
    Comment 87: One commenter asserted that a DSP-73 license is vital
because it covers both the U.S. export and U.S. import requirements and
the commenter is concerned without adding a similar type of
authorization under the EAR that certain temporary exports for use in
filming will not be possible because the return of the exported
firearms would be subject to ATF's permanent import process which
restricts many types of firearms pursuant to Federal law, e.g., short
barreled shotguns. This commenter asserted that because most firearms
temporarily exported for the movie industry are either military
surplus, non-sporting, or National Firearms Act weapons, of which
importation is prohibited under the ATF regulations, that this is an
importation issue to be addressed to ensure these types of temporary
exports can still proceed under the EAR and ATF construct, similar to
the ITAR and ATF construct.
    BIS response: A Commerce license to authorize a temporary export
would authorize the temporary export and require the item's return. A
separate EAR authorization is not required for the import back into the
United States after the temporary export since this would be covered
under the scope of the authorizing export license.
    Comment 88: One commenter requested clarification for permanent
import after temporary export for repair or servicing under License
Exception TMP under paragraph (a)(6). This commenter asserted it agreed
with the proposed changes but requested that the subject of temporary
export of firearms, specifically vintage shotguns with barrel lengths
over 18 to Canada, be clearly addressed.
    BIS response: BIS notes that the long barrel shotguns this final
rule will move from ECCN 0A984 to 0A502 may require a U.S. Government
authorization depending on the specifics of the export, in particular
the destination for the export. Regardless of the EAR authorization
used to authorize the export, a separate EAR authorization will not be
required for the subsequent import into the United States.
    Comment 89: One commenter asserted that ATF 27 CFR 478.92 includes
a requirement to mark firearms being imported with the importer's name
and address. This commenter was concerned that this destroys the
originality and affects the value of the firearm that was temporarily
exported. This commenter asserts because these long barreled shotguns
fall under the EAR, the ATF will not clarify the requirement on
shotguns and it creates confusion. This commenter requests the final
rule to clarify this issue regarding markings for shotguns being moved
from ECCN 0A984 to ECCN 0A502, as well as for the other firearms being
moved from the USML to the CCL.
    BIS response: BIS clarifies here that the EAR does not require any
types of physical markings to be made on a firearm or any other
commodity being temporarily exported for repair or servicing for return
to the United States. For a licensed transaction in an exceptional
case, a condition could potentially be placed on a Commerce license
that required the exporter to make some type of physical marking on the
commodity, but this would be extremely rare under BIS licensing. If
additional safeguards were needed, BIS licenses would typically require
additional documentation to confirm delivery verification or to require
the exporter to get other written affirmations from the other parties
to the transaction.

EAR Recordkeeping Requirements

    Comment 90: One commenter asserted that the GCA requires all
Federal Firearm Licensees to maintain firearm records for 20 years
after the date of disposition and that the proposed change requiring
records under the EAR is redundant and may cause confusion because of
the different record retention periods. This commenter asserted in
complying with the EAR, companies may inadvertently violate the GCA.
    BIS response: BIS does not agree. The EAR does not require records
to be destroyed after five years, just that the records be kept for at
least that long. Nothing in the EAR prohibits maintaining the records
for longer periods.
    Comment 91: One commenter asserted that the recordkeeping
requirement for warranty certificates for people outside the U.S. would
be more restrictive than the ITAR. The commenter asserted that BIS has
not provided a coherent explanation for why the new recordkeeping
burden makes sense, is related to exports, or would be of benefit to
the enforcement of the export control laws.
    BIS response: BIS does not agree with the requested change to
remove the warranty certificate requirement as a recordkeeping
requirement. As noted above by many commenters, BIS has an interest in
ensuring the firearms and related items on the CCL are used by the
intended end user for the intended end use, and BIS needs any
information that may be relevant to the ultimate disposition of those
firearms to safeguard U.S. national security. The recordkeeping
requirements for the warranty certificates included in the Commerce May
24 rule and in this final rule will be an additional safeguard for EE
to have further insights into where a firearm exported under a U.S.
Government authorization may have ultimately ended up after export. A
warranty certificate that is submitted by a person located outside the
United States to a U.S. exporter is relevant to the U.S. Government for
export control enforcement purposes. The ITAR and EAR control
structures are not the same, so in certain cases a restriction may be
more restrictive under the EAR compared to the ITAR and this is an
example of where the EAR will be more restrictive, but it is still
warranted in the context of the EAR.
    Comment 92: One commenter asserted that warranties are issued by
the manufacturer, not the exporter and that many manufacturers do not
always issue specific ``warranty certificates'' to individuals. This
commenter asserted that most manufacturers provide warranty statements
in a broad boilerplate statement included in an instruction manual, or
on their website. This commenter also asserted that there is thus no
way to know when that information is accessed by a foreign person or
sent to an address outside the U.S. One commenter asserted that a
potential issue is with the recordkeeping requirement of warranty
certificates is that an exporter may not have a manufacturer's (or any
other)

warranty certificate as part of the transaction. This commenter
requested some clarification on the requirements.
    BIS response: BIS clarifies here that the EAR recordkeeping
requirements generally do not impose an affirmative duty to create a
record. The recordkeeping requirements typically apply if in the normal
course of your business activities related to an export, reexport, or
transfer (in-country) a record is created or received that is within
the scope of records that must be retained for purposes of the EAR
recordkeeping requirements.
    BIS confirms here that if the manufacturer is not the exporter, it
is not required to keep the warranty certificate for purposes of part
762. Section 762.1(b) (Persons subject to the part) identifies the
persons that are required to keep records for purposes of part 762 of
the EAR.
    Comment 93: One commenter asserted that there is the possibility
that retaining such information that would be contained in a warranty
certificate may violate the privacy laws of other countries, such as
the General Data Protection Regulation (GDPR) (European Union (EU)).
    BIS response: BIS is not in a position to opine on the
applicability of the GDPR here but notes that parties transacting in
items subject to the EAR are subject to U.S. laws and regulations,
including recordkeeping requirements.

Alignment With the Wassenaar Arrangement Munitions List

    Comment 94: One commenter asserted that the proposed changes do not
appear to be in line with established WAML I-III, suggesting that the
inclusion of semi-automatic weapons in WAML1 explicitly as munitions
demonstrates an intentional differentiation between military and
security items, on one hand, and dual-use items on the other.
    BIS response: On the general question of whether the changes
included in the Commerce May 24 rule align with the WAML, BIS notes
that Wassenaar Arrangement member countries implement the WA control
lists in accordance with their own national export controls. The items
being moved from USML Category II are controlled under four new ``600
series'' ECCNs. The items moved from USML Categories I and III are not
controlled in the ``600 series,'' but importantly are still subject to
the same NS 1 license requirement that would apply if these WAML items
were added to the ``600 series.'' In addition, although not derived
from the Wassenaar Arrangement, the end item firearms are subject to a
license requirement for the Firearms Convention (FC)--meaning that the
end item firearms are subject to an even more restrictive license
requirement under the EAR compared to the ``600 series,'' 9x515 items,
and other items controlled for NS reasons on the CCL. In addition, the
final rule also includes other provisions, such as requiring
conventional arms reporting, that reflects U.S. Government commitments
to the Wassenaar Arrangement and to the United Nations. Thus, the
changes are consistent with the U.S. Government's commitments to the
Wassenaar Arrangement.
    Comment 95: One commenter asserted semi-automatic weapons used by
peacekeepers, military, and police are intended to be controlled as
munitions. The proposal to move semi-automatic firearms and large
caliber rifles to ECCN 0A501 on the CCL does not appear to be in line
with this designation.
    BIS response: For the reasons noted above in the BIS response to
Comment 1, BIS does not agree. BIS notes that the export of semi-
automatic weapons used by peacekeepers, military, and police will still
require U.S. Government authorization and in most cases will require an
approved license under the EAR, except when destined to the U.S.
Government or it is a semi-automatic weapon that was legally exported
or reexported under U.S. export controls that is being returned after
servicing or repair under License Exception RPL.
    Comment 96: One commenter provided several comments related to the
combined ITAR and EAR amendments to U.S. Government commitments to
multilateral controls, that included 33 numbered topics listed in the
order that topic appears in the WAML and then subdivided into three
parts, with the following number of examples: 27 U.S. and multilateral
texts are either identical or substantially equivalent; 74 US controls
omit what WAML controls (or WAML omits U.S. decontrols); and 165 WAML
omits what U.S. controls (or U.S. omits WAML decontrols).
    BIS response: BIS notes that this one commenter submitted a large
number of comments regarding the alignment with the WAML. For the
comments where BIS does not believe any changes are needed to align
with the WAML, BIS has not summarized each of those comments in this
final rule because of the length of the comments, but does confirm that
BIS did review each of the comments. For many of these comments, the
items were already controlled prior to the effective date of this final
rule or will be controlled for NS reasons on the CCL on the effective
date of this final rule, and for certain comments the ITAR retains
control of the items that the commenter thought would not be adequately
controlled under the USML. For the alignment with the WAML comments
where the commenter has raised an issue that BIS believes warranted a
change to ensure the changes in the final rule align with the WAML,
those suggested changes, e.g., the revisions described above to ECCN
0A018 and 0A505, are described above in greater detail, along with the
BIS responses.

Delayed Effective Date for a Final Rule

    Comment 97: BIS received a number of recommendations on the
appropriate length for the delayed effective date for the final rule,
ranging from 90 to 180 days for delayed effective dates. The rationale
for the shorter length was to allow small businesses to immediately
benefit while those recommending longer or split effective dates
suggested the time period would allow time for updates to IT systems,
policies, and processes. Other commenters asserted that they supported
a split implementation period (180 days for certain provisions,
effective immediately or short as possible for other provisions).
    BIS response: BIS has determined that a 45-day delayed effective
date is appropriate. To address concerns that a longer delayed
effective date and transition period may be warranted, BIS highlights
here the importance of the various grandfathering provisions included
in General Order No. 5 in Supplement No. 1 to part 736 of the EAR and
in the previously published State transition guidance, that is
supplemented with information on the DDTC website.
    Comment 98: One commenter requested that BIS delay publishing a
final rule until the Government Accounting Office (GAO) or the Library
of Congress has publicly reported to the Congress their impact on
numerous statutes referring to ``defense articles,'' because of the
potential loss of so many U.S. arms export controls and likely negative
impact on curbing irresponsible and illegal arms transfers.
    BIS response: BIS welcomes the publication of the GAO report.
However, the timing of the publication of a final rule and its
effective date are not contingent on the publication of the GAO report.

Description of Regulatory Changes

    This final rule creates 17 new ECCNs on the CCL to control items
that are being removed from the USML as

described in a final rule issued concurrently by the Department of
State. BIS did not receive any comments on the proposed addition of
ECCNs 0A503, 0B602, 0D501, 0D505, 0D602, 0E502, 0E504, 0E505, and 0E602
in the Commerce May 24 rule, so this final rule adopts these ECCNs as
proposed, except for one clarification made to ECCN 0B602.a.8 and minor
clarifications to the Related Controls paragraphs to ECCNs 0D501,
0D505, 0D602, 0E502, and 0E505. In ECCN 0B602, this final rule replaces
``gun straightening presses'' with the more specific control parameter
``barrel straightening presses.'' This change is made to clarify that
the straightening presses controlled under ECCN 0B602.a.8 are those for
barrels. In the Related Controls paragraphs for ECCNs 0D501, 0D505,
0D602, and 0E505, this final rule removes the parenthetical phrase that
references 22 CFR 121.1 and the related USML category because this
information is duplicative of existing text in these Related Controls
paragraphs. This final rule also revises the Related Controls paragraph
in ECCN 0E502 by removing ``N/A'' and adding that ``[t]echnical data
required for and directly related to articles enumerated in USML
Category I are `subject to the ITAR.' '' This clarification does not
change the scope of ECCN 0E502 and simply alerts the public to review
the ITAR for such technical data. BIS does not make any additional
changes to proposed ECCN 0E501 and adopts it as proposed. See the
Commerce May 24 rule for additional background on these provisions. BIS
received comments on seven proposed ECCNs for which the agency is
adopting additional changes: 0A501, 0A502, 0A504, 0A505, 0A602, 0B501,
and 0B505. The summary below describes each of these ECCNs and the
controls that apply to them.

New ECCN 0A501: Firearms and Related Commodities

    This final rule adds new ECCN 0A501 and applies national security
(NS Column 1), regional stability (RS Column 1), Firearms Convention
(FC Column 1), United Nations (UN), and anti-terrorism (AT Column 1)
reasons for control to the non-automatic and semi-automatic firearms,
including rifles, carbines, revolvers or pistols listed in the ECCN
entry in the regulatory text to this final rule, enumerated parts and
components and to ``specially designed'' ``parts,'' ``components,''
``accessories'' and ``attachments'' for those firearms and ``parts''
and ``components.''
    This final rule adds ECCN 0A501.y and only imposes an anti-
terrorism (AT Column 1) and United Nations (UN) reasons for control and
covers such items as scope mounts or accessory rails, iron sights,
sling swivels, butt plates, recoil pads, bayonets, and stocks or grips
that do not contain any fire control ``parts'' or ``components.''
    This final rule adds a technical note to ECCN 0A501 stating that
``parts'' and ``components'' include ``parts'' and ``components'' that
are common to firearms described in ECCN 0A501 and to firearms
``subject to the ITAR.''
    It also adds another note to ECCN 0A501 to state that certain
firearms and similar items are EAR99. Those items are: Antique firearms
(i.e., those manufactured before 1890) and reproductions thereof,
muzzle loading black powder firearms except those designs based on
centerfire weapons of a post 1937 design, BB guns, pellet rifles, paint
ball, and all other air rifles.
    In addition, for purposes of new ECCN 0A501 and the rest of the new
ECCNs described below, items previously determined to be ``subject to
the EAR'' under a commodity jurisdiction determination issued by the
U.S. Department of State that were designated as EAR99 will generally
not be classified in any of the new ECCNs that are being created with
this final rule. As a conforming change, this final rule revises
paragraph (e)(3) of General Order No. 5 to add a reference to the
``0x5zz'' ECCNs this final rule adds to the CCL.
    This final rule adopts the following additional changes to ECCN
0A501 to respond to the comments received on the Commerce May 24 rule:
    This final rule revises Related Controls paragraph (1) to clarify
that the magazines that are ``subject to the ITAR'' are those with a
capacity ``greater than 50 rounds.'' The Commerce May 24 rule used
terminology in the control parameter that created ambiguity because it
was slightly different than as proposed in the State May 24 rule, so
this final rule revises the EAR text based on the comments received to
align with the terminology used on the ITAR.
    This final rule revises ``items'' paragraph (a) to remove the
phrase ``of caliber less than or equal to .50 inches (12.7 mm)'' and
add in its place the phrase ``equal to .50 caliber (12.7 mm) or less.''
In making this change, BIS uses the same control text of ``.50 caliber
(12.7 mm)'' as used in the Department of State companion rule.
    This final rule adds a Note 1 to paragraph 0A501.a. This note
clarifies that combination pistols are controlled under items paragraph
.a. The note also defines the term `combination pistol' for purposes of
this ECCN. A combination pistol has at least one rifled barrel and at
least one smoothbore barrel. Because of the hybrid nature of these
firearms, commenters requested that this type of clarifying note be
added.
    This final rule adds a Note 2 to 0A501.d to address a question,
raised by the commenters, whether magazines with a capacity of 16
rounds or less are controlled under 0A501.x or designated EAR99. The
new note specifies that magazines with a capacity of 16 rounds or less
are controlled under 0A501.x. BIS notes this was the intent of the
Commerce May 24 rule, but because commenters were not sure, this rule
specifies where these magazines are controlled.
    This final rule revises ``items'' paragraph (e) to add the phrase
``or machined items'' to specify that ECCN 0A501.e includes those
machined items even if they are not casted, forged, or stamped.
    This final rule revises the introductory text of 0A501.y to add the
phrase ``as follows, and ``parts,'' ``components,'' ``accessories,''
and ``attachments'' ``specially designed'' therefor'' to clarify,
consistent with the other .y paragraphs on the CCL, that the
``specially designed'' ``parts,'' ``components,'' ``accessories,'' and
``attachments'' for .y items will also be controlled under this .y
paragraph and not controlled under 0A501.x.
    This final rule adds a new paragraph y.7 to control firearms
manufactured from 1890 to 1898 and reproductions thereof. This final
rule makes this change to address commenters that asserted that the
year 1890 should be changed to 1898 in Note 3 to 0A501 for defining
antique firearms. BIS did not accept the change because the year 1890
is based on the Wassenaar Arrangement, but does address this concern by
controlling these firearms under a new .y paragraph. As a conforming
change, this final rule adds a new License Requirement Note to ECCN
0A501 to specify that a license is required for exports and reexports
to China of 0A501.y.7 firearms.
    This final rule adds a new Note 4 to 0A501, to clarify the
classification of certain muzzle loading (black powder) firearms. This
is a conforming change as part of the removal of the control text of
ECCN 0A018 in this final rule.

New ECCN 0A502: Shotguns and Certain Related Commodities

    This final rule adds new ECCN 0A502 to control both the shotguns
being moved from the USML that are being added to the CCL (barrel
length less than 18 inches) and the shotguns and the enumerated
``parts'' and

``components'' controlled in ECCN 0A984 (barrel length 18 inches or
greater) prior to this final rule. This final rule controls shotguns
with a barrel length less than 18 inches under NS Column 1, CC Column
1, FC, UN, and AT Column 1 plus regional stability (RS Column 1).
Shotguns controlled in ECCN 0A984 that are transferred to ECCN 0A502 by
this final rule will retain Firearms Convention (FC), crime control (CC
Column 1, 2, or 3 depending on barrel length and end user), and United
Nations (UN) reasons for control. Such shotguns will not be controlled
for national security reasons because they are not on the WAML.
    This final rule adopts the following additional changes to ECCN
0A502 to respond to the comments received on the Commerce May 24 rule:
    This final rule revises the heading of ECCN 0A502 to add the phrase
``shotguns ``parts'' and ``components,'' consisting of'' to clarify
that the parts and components controlled under 0A502 are for shotguns
in response to one commenter's request.
    This final rule revises the LVS paragraph in the License Exception
section to add License Exception LVS eligibility of $500 for certain
parts and components under ECCN 0A502. The Commerce May 24 rule
proposed N/A for LVS for ECCN 0A502. This final rule makes this change
to create equivalent treatment for License Exception LVS for purposes
of ECCNs 0A501 and 0A502. Similar to LVS eligibility in ECCN 0A501, the
LVS eligibility will include all Country Group B countries and an
additional paragraph that identifies other parts and components that
are eligible for LVS if the ultimate destination is Canada.
    This final rule revises the Related Controls paragraph to remove
the phrase ``combat shotguns and'' because it is not needed as a
modifier of fully automatic shotguns and the phrase is not used on the
USML. This final rule also simplifies the Related Controls paragraph to
use a single sentence to identify shotguns that are fully automatic as
``subject to the ITAR.''
    This final rule adds a Note 1 to 0A502 to clarify that shotguns
made in or before 1898 are considered antique shotguns. This note
clarifies that these antique shotguns are designated as EAR99.
    Lastly, in ECCN 0A502, this final rule adds a Technical Note to
specify the classification of shot pistols or shotguns that have had
the shoulder stock removed and a pistol grip attached. The technical
note specifies these are controlled by ECCN 0A502. The technical note
also specifies that slug guns are controlled under ECCN 0A502.

New ECCN 0A504: Optical Sighting Devices and Certain Related
Commodities

    This final rule adds new ECCN 0A504 to replace ECCN 0A987, which
controlled optical sighting devices for firearms. This final rule
revises the reasons for control table to state specifically that the
Firearms Convention (FC) reason for control applies to all paragraphs
in the ECCN except 0A504.f, which controls laser pointing devices. In
addition, BIS adds an RS control for certain riflescopes, which are
identified in their own paragraph in the ECCN under 0A504.i in this
final rule. The riflescopes in this paragraph are limited to those
``specially designed'' for use in firearms that are ``subject to the
ITAR.'' This final rule includes an exclusion in the criteria of this
paragraph to ensure less sensitive riflescopes that are being moved
from ECCN 0A987 to 0A504 on the effective date of this final rule, that
currently are not RS controlled under the EAR, will not be controlled
under this paragraph. This final rule also adds a note to this
paragraph (i) to specify that paragraph (a)(1) of the definition of
``specially designed'' in Sec.  772.1 of the EAR is what is used to
determine whether a riflescope is ``specially designed'' for purposes
of this paragraph of ECCN 0A504.i--meaning paragraph (a)(2) and the
paragraph (b) releases are not reviewed to make the ``specially
designed'' determination.
    This change makes clear, consistent with BIS's existing
interpretation, that such devices are not optical sights and are not
subject to the FC reason for control. The new number is intended to
make identifying items on the CCL easier by grouping similar or related
items closer to each other.
    This final rule adopts the following additional changes to ECCN
0A504 to respond to the comments received on the Commerce May 24 rule:
    This final rule revises the LVS paragraph in the License Exceptions
section of ECCN 0A504 to add LVS eligibility of $500 for 0A504.g.
Commenters requested that LVS eligibility be added for these less
sensitive lenses and other optical elements controlled under 0A504.g.
These commenters also requested adding LVS eligibility for consistency
with the types of parts and components eligible for LVS under ECCN
0A501 in the Commerce May 24 rule. BIS agrees and adds LVS eligibility
of $500 for 0A504.g in this final rule.

New ECCN 0A505: Ammunition and Certain Related Commodities

    This final rule adds new ECCN 0A505 and imposes national security
(NS Column 1), regional stability (RS Column 1), Firearms Convention
(FC), United Nations (UN), and anti-terrorism (AT Column 1) controls on
ammunition not enumerated on the USML, for firearms that will be
classified under ECCN 0A501, and for most ``parts'' and ``components''
of such ammunition. Such ammunition included in this final rule are for
small arms, in most cases, firearms of caliber not exceeding 0.50
inches, although some ammunition for firearms of caliber up to 0.72
inches is included. This final rule retains the CCL reasons for control
currently found in ECCNs 0A984 and 0A986 for shotgun shells. Buckshot
shotgun shells will be subject to the CC Column 1, FC Column 1, and UN
reasons for control under this final rule. Other shotgun shells are
subject to the FC, UN, and AT (North Korea only) reasons for control in
this final rule. Only ``parts'' and ``components'' will be eligible for
License Exception LVS. Ammunition for larger caliber weapons such as
howitzers, artillery, cannon, mortars, and recoilless rifles will
remain in USML Category III in this final rule. Ammunition that has
little or no civil use or that is inherently military such as
ammunition that is preassembled into links or belts, caseless
ammunition, tracer ammunition, ammunition with a depleted uranium
projectile or a projectile with a hardened tip or core and ammunition
with an explosive projectile also remains in USML Category III. Blank
ammunition for firearms controlled by ECCN 0A501 and not enumerated in
Category III of the USML will be controlled for United Nations and
anti-terrorism reasons only in this final rule.
    This final rule adds three notes to clarify the scope of ``parts''
and ``components'' for ammunition classified under ECCN 0A505. Note 1
to 0A505.c clarifies the relationship between ECCNs 0A505 and 1A984 for
shotgun shells, stating that shotgun shells that contain only chemical
irritants are controlled under 1A984 and not 0A505. Separately, Note 2
to 0A505.x includes an illustrative list of the controls on ``parts''
and ``components'' in this entry, such as Berdan and boxer primers.
Note 3 to 0A505.x clarifies that the controls in ECCN 0A505 include
``parts'' and ``components'' that are common to ammunition and ordnance
described in this entry and to those enumerated in USML Category III.

    This final rule adopts the following additional changes to ECCN
0A505 to respond to the comments received on the Commerce May 24 rule:
    This final rule revises the LVS paragraph in the License Exceptions
section of ECCN 0A505 to increase the LVS eligibility from $100 to
$500. The Commerce May 24 rule had proposed $100, but commenters noted
that the cost of these parts and components would undermine the
usefulness of LVS eligibility if the $100 limitation was maintained.
Some commenters provided detailed price lists to support their position
that $100 of LVS eligibility would be of limited usefulness. BIS took
this into account and in this final rule increases the LVS eligibility
to $500 for ECCN 0A505.x. As a conforming change, because this final
rule moves ECCN 0A018.b to 0A505, this final rule adds grandfathering
provisions to retain LVS eligibility of $3,000 for any commodity that
was classified under 0A018.b prior the effective date of this final
rule.
    This final rule revises ECCN 0A505.a to add the phrase ``or USML
Category I'' to clarify that ammunition for firearms controlled under
USML Category I is also controlled under 0A501.a, provided the
ammunition is not otherwise excluded by the control parameters in
0A501.a, i.e., being enumerated in 0A505.b, .c, .d, or in USML Category
III.
    This final rule adds a Note 4 to 0A505 to specify that certain
types of ammunition (i.e., Lead shot smaller than No. 4 Buckshot, empty
and unprimed shotgun shells, shotgun wads, smokeless gunpowder, `Dummy
rounds' and blank rounds (unless linked or belted)), not incorporating
a lethal or non-lethal projectile(s) are designated EAR99. This final
rule also defines the terms `dummy round or drill round.' The new note
clarifies that these rounds are completely inert--meaning they contain
no primer, propellant, or explosive charge. The note specifies that
these types of rounds are typically used to check weapon function and
for crew training.

New ECCN 0A602: Guns and Armament

    This final rule adds new ECCN 0A602 and imposes national security
(NS Column 1), regional stability (RS Column 1), United Nations (UN)
and anti-terrorism (AT Column 1) controls on guns and armament
manufactured between 1890 and 1919 and for military flame throwers with
an effective range less than 20 meters. It imposes those same reasons
for control on parts and components for those commodities and for
defense articles in USML Category II if such parts or components are
not specified elsewhere on the CCL or USML. Note 3 to 0A602 confirms
that black powder guns and armament manufactured in or prior to 1890
and replicas thereof designed for use with black powder propellants are
designated EAR99. The guns controlled in this ECCN are between 99 and
128 years old. The parts, components, accessories, and attachments
controlled in this ECCN include some that are for modern artillery.
Modern artillery remains on the USML, along with the most sensitive
``parts,'' ``components,'' ``accessories,'' and ``attachments'' for
these USML items. This final rule adds a note to clarify that
``parts,'' ``components,'' ``accessories,'' and ``attachments''
specified in USML subcategory II(j) are not subject to the EAR. The
USML Order of Review and CCL Order of Review already provide guidance
for making such a jurisdictional and classification determination, but
to highlight that these ``parts,'' ``components,'' ``accessories,'' and
``attachments'' are not classified under paragraph .x of 0A602, this
final rule adds a note.
    This final rule adopts the following additional changes to ECCN
0A602 to respond to the comments received on the Commerce May 24 rule:
    This final rule revises the Related Controls paragraph of ECCN
0A602 to add a Related Controls paragraph (3). This new Related
Controls paragraph provides a cross reference to ECCN 0A606 for engines
that are ``specially designed'' for a self-propelled gun or howitzer
subject to control under 0A606.a or USML Category VII. The Department
of State final rule includes a similar cross reference for purposes of
the USML and commenters requested the same type of note or related
control pointer be added to the EAR. The Department agrees and adds
Related Controls paragraph (3). As a conforming change, this final rule
redesignates Note 1 to 0A602 and Note 2 to 0A602 as Notes 2 and 3,
respectively.

New ECCN 0B501: Test, Inspection, and Production Equipment for Firearms

    This final rule adds new ECCN 0B501 to cover ``Test, inspection,
and production `equipment' and related commodities for the
`development' or `production' of commodities enumerated or otherwise
described in ECCN 0A501 or USML Category I.'' This new ECCN applies the
national security (NS Column 1), regional stability (RS Column 1),
United Nations (UN), and anti-terrorism (AT Column 1) reasons for
control to four specific types of machinery and to one class of items
as proposed in the Commerce May 24 rule. The four specific types of
machinery are: small arms chambering machines, small arms deep hole
drilling machines and drills therefor, small arms rifling machines, and
small arms spill boring machines. The class of items covers dies,
fixtures, and other tooling ``specially designed'' for the
``production'' of items in the State Department final rule for USML
Category I or ECCN 0A501. In addition, as described below, this final
rule also expands the scope of 0B501.e to include all production
equipment ``specially designed'' for USML Category I items.
    The NS and RS reasons for control do not apply to equipment for the
``development'' or ``production'' of commodities in ECCN 0A501.y
because those reasons for control do not apply to the commodities in
ECCN 0A501.y themselves.
    The first four specific items noted above were listed in paragraphs
.o, .p, .q, and .r of ECCN 2B018 prior to the effective date of this
final rule, and are being listed in paragraphs .a, .b, .c, and .d of
ECCN 0B501 in this final rule. In addition, the class of items in new
0B501 that was included within ECCN 2B018, paragraph .n (jigs and
fixtures and other metal-working implements or ``accessories'' of the
kinds exclusively designed for use in the manufacture of firearms,
ordnance, and other stores and appliances for land, sea or aerial
warfare) prior to the effective date of this final rule, will, if
applicable to firearms controlled in 0A501, be subsumed in paragraph
.e. Jigs, fixtures, and metal working implements currently in 2B018
that are applicable to larger guns will be controlled in ECCN 0B602 in
this final rule and are discussed below.
    Moving these items from 2B018 to 0B501 in this final rule retains
the national security (NS Column 1), anti-terrorism (AT Column 1), and
United Nations (UN) reasons for control and raises the regional
stability (RS) reason for control from RS Column 2 to RS Column 1. This
causes no change in destination-based license requirements, but allows
consideration of whether the export or reexport could contribute to
instability in any region, not just the region to which the item is
exported or reexported in considering whether to approve a license.
    This final rule adopts the following additional changes to ECCN
0B501 to respond to the comments received on the Commerce May 24 rule:
    This final rule expands ECCN 0B501.e to include all production
equipment ``specially designed'' for USML Category I items. This final
rule adds the term production equipment to the beginning

of the control text of ECCN 0B501.e and revises the phrase ``dies,
fixtures, and other tooling'' included in the Commerce May 24 rule to
``including dies, fixtures, and other tooling'' to indicate that these
items are illustrative and that other types of production equipment
that meet the control parameters are also controlled under ECCN 0B501.

New ECCN 0B505: Test, Inspection, and Production Equipment for
Ammunition

    This final rule adds new ECCN 0B505 to impose national security (NS
Column 1), regional stability (RS Column 1), United Nations (UN), and
anti-terrorism (AT Column 1) controls on tooling, templates, jigs,
mandrels, molds, dies, fixtures, alignment mechanisms, and test
equipment, not enumerated in USML Category III, and ``specially
designed'' ``parts'' and ``components'' therefor, that are ``specially
designed'' for the ``production'' of ammunition other than for the
ammunition specified in 0A505.b, .c, or .d (certain shotgun shells with
buckshot and without buckshot and certain blank ammunition). In
addition, as described below, this final rule also expands the scope of
0B505.a to include all production equipment ``specially designed'' for
USML Category III items. Equipment for manufacturing shotgun shells
that do not contain buckshot will be controlled for the AT (North Korea
only) and UN reasons for control, which are the reasons for control
that applied to this equipment in ECCN 0B986 prior to this final rule.
ECCN 0B505 in this final rule does not include equipment for the hand
loading of cartridges and shotgun shells, so this final rule specifies
this in the heading.
    This final rule adopts the following additional changes to ECCN
0B505 to respond to the comments received on the Commerce May 24 rule:
    This final rule expands ECCN 0B505.a to include all production
equipment ``specially designed'' for USML Category III items. This
final rule adds the term production equipment to the beginning of the
control text of ECCN 0B505.a and revises the phrase ``tooling,
templates, jigs, mandrels, molds, dies, fixtures, alignment mechanisms,
and test equipment'' included in the Commerce May 24 rule to
``including tooling, templates, jigs, mandrels, molds, dies, fixtures,
alignment mechanisms, and test equipment'' to indicate that these items
are illustrative and other types of production equipment that meet the
control parameters are also controlled under ECCN 0B505.

Revisions to Eight ECCNs

    To conform to new Federal Register Drafting Handbook requirements,
the amendatory instructions in this final rule sets forth the entire
text of eight ECCNs to be revised. BIS did not receive any comments on
the proposed revisions to the following six ECCNs 0E982, 1A984, 2B004,
2B018, 2D018, and 7A611 in the Commerce May 24 rule, so this final rule
revises those ECCNs as proposed. See the Commerce May 24 rule for
additional background on these revisions.
    To help the public understand what specific parts of ECCN 0A018
will be different as a result of the changes in this final rule, the
narrative below describes the amendment in detail, including a
conforming change made to ECCN 0A988.

Revision to ECCN 0A018, and Conforming Change to ECCN 0A988

    With the removal of ECCN 0A984 and the addition of 0A502 described
above, the Commerce May 24 rule proposed to make the conforming change
of removing and reserving 0A018.c since all the items classified in
0A018.c would be classified under other entries on the CCL once a final
rule was published.
    This final rule adopts the following additional changes to ECCN
0A018 to respond to the comments received on the Commerce May 24 rule:
    This final rule still revises ECCN 0A018, but instead of retaining
the commodities under 0A018.b as was proposed in the Commerce May 24
rule, these commodities are being moved to ECCN 0A505. As a conforming
change, this final rule replaces the control text of ECCN 0A018 with a
statement referring readers to ECCN 0A505.
    This final rule adopts the following additional changes to ECCN
0A988 to respond to the comments received on the Commerce May 24 rule:
    This final rule as a conforming change revises the heading of ECCN
0A988 to remove an outdated reference to 0A018.d. ECCN 0A018.d had been
previously removed and reserved, but the cross reference in 0A988 was
not updated. This final rule makes that correction.

Removal of Nine ECCNs

    The Commerce May 24 rule proposed removing nine ECCNs. BIS did not
receive any comments on proposed removals of ECCNs 0A918, 0A984, 0A985,
0A986, 0A987, 0B986, 0E918, 0E984, and 0E987 in the Commerce May 24
rule, so this final rule removes those ECCNs as proposed. See the
Commerce May 24 rule for additional background on these removals.

Revision of ``Published''

    This final rule adopts the following changes to part 734, and one
conforming change to part 732, to respond to the comments received on
the Commerce May 24 rule:
    Specifically, this final rule adds a paragraph (c) to Sec.  734.7
stating that ``software'' or ``technology'' for the production of a
firearm, or firearm frame or receiver, controlled under ECCN 0A501,
that is made available by posting on the internet in an electronic
format and that may be directly loaded without further modification by
the machine operator into a computer numerically controlled machine
tool, additive manufacturing equipment, or any other equipment that
makes use of the ``software'' or ``technology'' to produce the firearm
frame or receiver or complete firearm, remains ``subject to the EAR.''
Also in Sec.  734.7, this final rule as a conforming change revises the
paragraph (a) introductory text to add a reference to new paragraph (c)
for the exclusions that apply to paragraph (a) for what is considered
``published.'' In Sec.  732.2 (Steps regarding scope of the EAR), under
the paragraph (b) introductory text for step 2 for publicly available
technology and software, this final rule also adds a reference to Sec.
734.7(c) to specify such ``software'' or ``technology'' for the
production of a firearm, or firearm frame or receiver, controlled under
ECCN 0A501, as referenced in Sec.  734.7(c)), is ``subject to the
EAR.''

Conforming Change to General Order No. 5

    BIS does not make any additional changes in this final rule to what
was proposed in the Commerce May 24 rule as a result of the comments
received, so these changes are adopted as proposed. This final rule
amends General Order No. 5, paragraph (e)(3) (Prior commodity
jurisdiction determinations), in Supplement No. 1 to part 736, to add a
reference in two places to the new 0x5zz ECCNs that are being created
by this rule. This change to paragraph (e)(3) is a conforming change
and is needed because paragraph (e)(3) now only references the ``600
series'' and 9x515 ECCNs. 0x5zz ECCNs will include new ECCNs 0A501,
0A502, 0A504, 0A505, 0B501, 0B505, 0D501, 0D505, 0E501, 0E502, and
0E505.

Revisions to Regional Stability Licensing Policy for Firearms and
Ammunition

    BIS does not make any additional changes in this final rule to what
was proposed in the Commerce May 24 rule as a result of the comments
received, so these changes are adopted as proposed. This final rule
applies the regional stability licensing policy set forth in Sec.
742.6(b)(1)(i) of the EAR to the items controlled for regional
stability reasons in ECCNs 0A501, 0A504, 0A505, 0B501, 0B505, 0D501,
0D505, 0E501, 0E504, and 0E505. That policy, which also applies to
``600 series'' and 9x515 items is case-by-case review ``to determine
whether the transaction is contrary to the national security or foreign
policy interests of the United States, including the foreign policy
interest of promoting the observance of human rights throughout the
world.'' This final rule also revises the regional stability licensing
policy set forth in paragraph (b)(1)(i) that is specific to the
People's Republic of China for 9x515 items. This final rule adds ECCNs
0A501, 0A505, 0B501, 0B505, 0D501, 0D505, 0E501, 0E504, and 0E505 to
this sentence to specify that these firearms and related items are to
be subject to a policy of denial when destined to the People's Republic
of China or a country listed in Country Group E:1. Lastly, this final
rule adds a sentence to the end of paragraph (b)(1)(i) to make it
explicit that applications for exports and reexports of ECCN 0A501,
0A505, 0B501, 0B505, 0D501, 0D505, 0E501, 0E504, and 0E505 items are
subject to a policy of denial when there is reason to believe the
transaction involves certain parties of concern, such as criminal
organizations, rebel groups, street gangs, or other similar groups or
individuals, that may be disruptive to regional stability.

Availability of License Exceptions

    Many of the items in the new ``600 series'' ECCNs generally will be
eligible for the same license exceptions and subject to the same
restrictions on use of license exceptions as other ``600 series'' ECCNs
in this final rule. For the ECCNs on the CCL prior to the effective
date of this final rule that are being renumbered and placed in closer
proximity to the firearms-related items that are being removed from the
USML and added to the CCL, these existing firearms-related items will
continue to be eligible for the same EAR license exceptions as they
were prior to the effective date of this final rule, unless otherwise
restricted under Sec.  740.2, if the requirements of the license
exceptions are met.

Restrictions on All License Exceptions

    This final rule also makes the following additional changes to part
740 to respond to the comments received on the Commerce May 24 rule by
adding two new general restrictions.
    In Sec.  740.2 (Restriction on all license exceptions), this final
rule adds two additional restrictions for when license exceptions may
not be used. This final rule adds new paragraph (a)(21) to restrict the
use of license exceptions, except for License Exception GOV under Sec.
740.11(b)(2)(ii) for the reexport or transfer (in-country) of certain
firearms classified under ECCNs 0A501 or 0A502. The restriction on the
use of license exceptions applies if a part or component that is not
``subject to the ITAR,'' but would otherwise meet the criteria in USML
Category I(h)(2) is incorporated into the firearm or is to be
reexported or transferred (in-country) with the firearm with
``knowledge'' the part or component will be subsequently incorporated
into the firearm. Because these parts or components that would
otherwise meet the criteria in USML Category I(h)(2) could be used for
conversion of a semi-automatic firearm to a fully automatic firearm,
this final rule excludes those firearms from license exception
eligibility.
    In Sec.  740.2 this final rule also adds a new paragraph (a)(22) to
restrict the use of license exceptions for the export, reexport, or
transfer (in-country) of any item classified under a 0x5zz ECCN when a
party to the transaction is designated on the Department of the
Treasury, Office of Foreign Assets Control (OFAC), Specially Designated
Nationals and Blocked Persons (SDN) list under the designation [SDNT],
or under the designation [SDNTK]. OFAC makes SDNT designations pursuant
to the Narcotics Trafficking Sanctions Regulations, 31 CFR part 536,
and SDNTK designations are made, pursuant to the Foreign Narcotics
Kingpin Sanctions Regulations, 31 CFR part 598. This restriction on the
use of license exceptions for these 0x5zz items will ensure that such
parties designated on the SDN list will not be able to receive these
0x5zz items without a BIS license.

License Exception: Shipments of Limited Value (LVS)

    Under this final rule, complete firearms controlled under ECCN
0A501 are not eligible for License Exception LVS, 15 CFR 740.3.
Firearms ``parts,'' ``components,'' ``accessories,'' and
``attachments'' controlled under ECCN 0A501, other than receivers
(frames), and ``complete breech mechanisms,'' including castings,
forgings or stampings thereof, are eligible for License Exception LVS,
with a limit of $500 on net value per shipment. In addition, receivers
(frames), and ``complete breech mechanisms,'' including castings,
forgings or stampings thereof, are eligible for License Exception LVS
if the ultimate destination is Canada. This final rule states these
limits in the License Exceptions paragraph of ECCN 0A501, and no
revisions to the text of the license exception itself are needed to
implement them. BIS believes that this provision is generally
consistent with the license exemption for limited value shipments of
firearms formerly found in ITAR (22 CFR 123.17(a)) (removed and
reserved by the companion rule). This LVS eligibility included in this
final rule is less restrictive than the former ITAR provision in two
respects. First, the value limit per shipment will be $500 compared to
$100 in the ITAR. Second, the LVS eligibility in the final rule allows
exports of receivers and ``complete breech mechanisms'' to Canada
whereas Sec.  123.17(a) did not. However, the $500 LVS limit is based
on the actual selling price or fair market value, whereas the ITAR $100
limit is based on ``wholesale'' value. In addition, with respect to
Canada, an LVS limit of $500 per shipment is needed to comply with the
Section 517 of the Commerce, Justice, Science, and Related Agencies
Appropriations Act of 2015, which prohibits expending any appropriated
funds to require licenses for the export of certain non-automatic
firearms parts, components, accessories and attachments to Canada when
valued at under $500.
    Guns and armament and related items controlled under ECCN 0A602 are
eligible for License Exception LVS, with a limit of $500 net value per
shipment in this final rule.
    Ammunition controlled under ECCN 0A505 are eligible for License
Exception LVS; however, ammunition parts and components will be
eligible with a limit of $500 (Commerce May 24 rule proposed $100, but
as described below in the changes to ECCN 0A505, this final rule
increases the limit of $500) net value per shipment in this final rule.
    Test, inspection, and production equipment controlled under ECCNs
0B501, 0B505, and 0B602 for firearms, guns and armament, and
ammunition/ordnance are eligible for License Exception LVS with a limit
of $3,000 net value per shipment, which is consistent with LVS
eligibility for most 600 series ECCNs in this final rule.

License Exception: Temporary Imports, Exports, Reexports, and Transfers
(In-Country) (TMP)

    This final rule amends Sec.  740.9 to state that License Exception
TMP is not available to export or reexport the items that are the
subject of this rule to destinations in Country Group D:5 (See
Supplement No. 1 to part 740), or to Russia (Russian Federation).
License Exception TMP is also not available to export or reexport some
firearms and ammunition shipped from or manufactured in Russia (Russian
Federation), Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan,
Ukraine, or Uzbekistan. In addition, this final rule will prohibit the
use of License Exception TMP to export or reexport any item controlled
by ECCN 0A501 and any shotgun with a barrel length less than 18 inches
controlled under ECCN 0A502 that was shipped from or manufactured in
Country Group D:5. This final rule also prohibits use of License
Exception TMP to export or reexport any item controlled by ECCN 0A501
that is shipped from or manufactured in Russia, Georgia, Kazakhstan,
Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or Uzbekistan, except for
any firearm model controlled by 0A501 that is also excluded under Annex
A in Supplement No. 4 to part 740 (the prohibition will not apply to
such firearms;); and any shotgun with a barrel length less than 18
inches controlled under 0A502 that was shipped from or manufactured in
Russia, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan,
Ukraine, or Uzbekistan. These prohibitions will apply to temporary
exports of firearms from the United States, and the export of firearms
temporarily in the United States. This final rule for consistency with
the ITAR requirements for exports of firearms to Georgia, Kazakhstan,
Kyrgyzstan, Moldova, Turkmenistan, Ukraine, and Uzbekistan, removes the
restriction included in the Commerce May 24 rule in paragraph
(b)(5)(iii) that the firearms may not ultimately be destined to one of
these seven countries from the restriction in paragraph (b)(5)(iii),
but retains the restriction for Russia. This final rule makes one
correction in Annex A in Supplement No. 4 to part 740 for the rifle
``VEPR Pioner'' under paragraph (b)(90) to correctly spell it as ``VEPR
Pioneer.''
    This final rule limits temporary exports of firearms controlled
under ECCN 0A501 and any shotgun with a barrel length less than 18
inches controlled under ECCN 0A502 pursuant to License Exception TMP to
exhibition and demonstration (Sec.  740.9(a)(5) of the EAR) and
inspection, test, calibration, and repair (Sec.  740.9(a)(6) of the
EAR). Consistent with the ITAR requirements previously applicable to
temporary exports of the firearms covered by this rule (see 22 CFR
123.17(c), 123.22), exporters will continue to be required to file EEI
in AES for transactions involving such firearms that are authorized
pursuant to License Exception TMP (See Sec.  758.1(a)(10) of the EAR).
    This final rule authorizes the use of License Exception TMP for the
export of ECCN 0A501 firearms temporarily in the United States for a
period of not more than one year subject to the requirement that the
firearms not be imported from or ultimately destined for certain
proscribed or restricted countries. Certain information as described in
the regulatory text will also be collected by CBP on behalf of BIS
under existing or new Commerce paperwork collections. This final rule
also makes eligibility to export under License Exception TMP for ECCN
0A501.a or .b or shotguns with a barrel length less than 18 inches
controlled in ECCN 0A502 subject to the following conditions:
    At the time of entry for a temporary import, the temporary importer
is required to provide the required statement to CBP, as specified in
paragraph (b)(5)(iv)(A).
    The temporary importer is required to include on the invoice or
other appropriate import-related documentation (or electronic
equivalents) provided to CBP a complete list and description of the
0A501 firearms being imported, including their serial numbers, model,
make, caliber, quantity, and U.S. dollar value, as specified in
paragraph (b)(5)(iv)(B).
    If the firearms are temporarily imported for a trade show,
exhibition, demonstration, or testing, the temporary importer must
provide to CBP the relevant invitation or registration documentation
for the event and an accompanying letter that details the arrangements
to maintain effective control of the firearms while they are in the
United States, as specified in paragraph (b)(5)(iv)(C).
    At the time of export, the temporary importer or its agent as
specified in paragraph (b)(5)(v) are required to provide the temporary
import documentation (i.e., the invoice used at the time of entry for
the temporary importation or other appropriate temporary import-related
documentation (or electronic equivalents)) related to paragraph
(b)(5)(iv)(B) to CBP. This information will be used by CBP to confirm
that such firearms were in fact temporarily imported under the EAR for
subsequent export under License Exception TMP.
    This final rule adds a note to License Exception TMP to direct
temporary importers and exporters to contact CBP at the port of import
or export for the proper procedures to provide any data or
documentation required by BIS.

License Exception: Governments, International Organizations,
International Inspections Under the Chemical Weapons Convention, and
the International Space Station (GOV)

    This final rule revises Sec.  740.11 to limit the applicability of
License Exception GOV for firearms, ``parts'' and ``components''
controlled by ECCN 0A501 and ammunition controlled by 0A505 to exports,
reexports, and transfers for official use by U.S government agencies
and official and personal use by U.S. Government employees (and the
immediate families and household employees of those government
employees) (Sec.  740.11(b)(2)(i) and (ii) of the EAR). This
authorization under License Exception GOV treats 0A501 firearms in the
same manner that other items that are subject to the EAR may be
exported to U.S. Government employees under License Exception GOV. It
does not impose certain restrictions that are imposed by the former
ITAR license exemption (22 CFR 123.18) (removed and reserved by
companion rule) that authorized shipments consigned to and for the use
of servicemen's clubs, and for service members or civilian employees if
the firearms are for personal use and the shipment is accompanied by a
written authorization from the commanding officer concerned. See the
Commerce May 24 rule for additional background. License Exception GOV
authorizes non-automatic and semi-automatic firearms and related
``parts'' and ``components.''
    All other items that are the subject of this final rule will be
subject to the limits on use of License Exception GOV that apply to 600
series items generally, i.e., Sec.  740.11(b)--to, for, or on behalf of
the U.S. Government (including contractors, government employees, their
families and household employees) or Sec.  740.11(c) to a government in
Country Group A:1 cooperating governments or an agency of NATO.
However, this rule will add some additional restrictions for E:1 and
E:2 countries. This final rule will exclude the use of License
Exception GOV for any item listed in a 0x5zz ECCN for E:1 countries,
unless authorized under paragraph (b)(2)(i) or

(ii) when the items are solely for U.S. Government official use. In
addition, to better ensure compliance with section 1754(c) of the ECRA
and address concerns with certain end users and uses in Country Group
E:1 and E:2 countries, this final rule adds a new Note 2 to paragraph
(b)(2), which restricts the use of License Exception GOV for E:1 and
E:2 countries for multilaterally controlled items and anti-terrorism
(AT) controlled items when destined to certain end users or end uses of
concern.
    This final rule also makes the following additional change to
License Exception GOV to respond to the comments received on the
Commerce May 24 rule:
    In Sec.  740.11 of License Exception GOV, this final rule revises
Note 2 to paragraph (b)(2) to include illustrative examples of other
sensitive end-users. This final rule adds the parenthetical phrase
``(e.g., contractors or other governmental parties performing functions
on behalf of military, police, or intelligence entities)'' after the
phrase ``or other sensitive end-users'' to provide greater clarity on
the other end-users that are excluded.

License Exception: Baggage (BAG)

    This final rule revises License Exception BAG, Sec.  740.14, to
allow United States citizens and permanent resident aliens leaving the
United States temporarily to take up to three firearms controlled by
proposed ECCN 0A501 and up to 1,000 rounds of ammunition for such
firearms controlled under ECCN 0A505.a for personal use while abroad.
This change to License Exception BAG is made to be consistent with
former 22 CFR 123.17(c) (removed and reserved by companion rule), which
authorized U.S. persons to take up to three non-automatic firearms and
up to 1,000 cartridges therefor abroad for personal use. This amendment
to License Exception BAG applies to both non-automatic and semi-
automatic firearms.
    Travelers leaving the United States temporarily are required to
declare the 0A501 and 0A505 items to a CBP officer prior to departure
from the United States and present the firearms, ``parts,''
``components,'' ``accessories,'' ``attachments,'' and ammunition they
are exporting to the CBP officer for inspection, confirming that the
authority for the export is License Exception BAG, that the exporter is
compliant with its terms. Should exporters desire to contact CBP prior
to departure, contact information and a list of U.S. air, land and sea
ports of entry can be found at: https://www.cbp.gov/contact/ports.
    This final rule also revises License Exception BAG to allow
nonresident aliens leaving the United States to take firearms,
``accessories,'' ``attachments,'' ``components,'' ``parts,'' and
ammunition controlled by ECCN 0A501 or 0A505 that they lawfully brought
into the United States. This change is consistent with former 22 CFR
123.17(d) (removed and reserved by companion rule), which authorized
foreign persons leaving the United States to take firearms and
ammunition controlled under Category I(a) of the USML (both non-
automatic and semi-automatic) that they lawfully brought into the
United States. This final rule does not adopt any changes to the
availability of License Exception BAG for shotguns and shotgun shells
authorized under paragraph (e)(1) or (2).
    As a clarification to License Exception BAG, this final rule adds
one sentence to the introductory text of paragraph (b)(4) to highlight
the special provisions that apply in paragraph (e) for firearms and
ammunition and in paragraph (h) for personal protective equipment under
ECCN 1A613.c or .d. This one sentence does not change the existing
requirement and has been included to assist the public in better
identifying these special provisions.
    Consistent with the ITAR requirements previously applicable to
temporary exports of the firearms and associated ammunition covered by
the May 24 proposed rule, BIS proposed in the Commerce May 24 rule to
modify Sec.  758.1 of the EAR to make clear that exporters would
continue to be required to file EEI in AES for transactions involving
such firearms and associated ammunition that are otherwise authorized
pursuant to License Exception BAG. However, for the reasons described
above in the description of the comments and BIS responses, this final
rule adopts an alternative approach with the addition of the new Sec.
758.11 described immediately below.
    This final rule makes the following additional changes in response
to the public comments received on the Commerce May 24 rule:
    As described above, this final rule removes the EEI filing
requirement in AES as set forth in Sec.  758.1(b)(9) for firearms
authorized under License Exception BAG.
    In response to public comments as described above, this final rule
instead adds a new Sec.  758.11 (Export clearance requirements for
firearms and related items) and incorporates a requirement to use the
Department of Homeland Security, CBP Form 4457, Certificate of
Registration for Personal Effects Taken Abroad) (OMB Control Number
1651-0010) for all exports of commodities controlled under ECCNs
0A501.a or .b, shotguns with a barrel length less than 18 inches
controlled under ECCN 0A502, or ammunition controlled under ECCN 0A505
except for .c, regardless of value or destination, including exports to
Canada, that are authorized under License Exception BAG, as set forth
in Sec.  740.14. Section 758.11 includes four paragraphs: Paragraph (a)
(Scope) specifies when these export clearance requirements apply;
paragraph (b) (Required form) identifies the required form that needs
to be used in connection with these exports authorized under License
Exception BAG, including paragraph (b)(1) that includes a website for
where to find the form, and paragraph (b)(2) that specifies the
``description of articles'' for firearms to be included on the CBP Form
4457; paragraph (c) provides a link for where to find additional
information on the CBP Form 4457; and paragraph (d) (Return of items
exported pursuant to this section) specifies the requirements for the
return of items exported under License Exception BAG when the export
clearance requirements in Sec.  758.11 apply.

License Exception: Servicing and Replacement of Parts and Equipment
(RPL)

    This final rule also adopts the following changes to License
Exception RPL to respond to the comments received on the Commerce May
24 rule, that requested License Exception RPL be included as a valid
purpose for a temporary import under Sec.  758.10. As described above,
BIS agreed to include License Exception RPL in Sec.  758.10, and these
changes are described below.
    In Sec.  740.10(b) (Servicing and replacement of parts and
equipment), this final rule makes needed conforming changes for the
addition of License Exception RPL to Sec.  758.10 and to include
similar changes as were made to License Exception TMP under Sec.
740.9(b)(5) in the Commerce May 24 rule. This final rule adds one
sentence to the end of the introductory text of Sec.  740.10(b)(1) to
specify that that additional requirements in new paragraph (b)(4) must
be met in order to use License Exception RPL to authorize under
paragraph (b)(2) or (3) the export of firearms controlled by ECCN
0A501.a or .b, or shotguns with a barrel length less than 18 inches
controlled in ECCN 0A502 temporarily in the United State for servicing
and replacement. This final rule adds new paragraph (b)(4) (Exports

of firearms and certain shotguns temporarily in the United States for
servicing and replacement). Under the introductory text of paragraph
(b)(4), this final rule imposes a requirement that the firearms and
certain shotguns must be temporarily in the United States for servicing
or replacement for a period not exceeding one year or the time it takes
to service or replace the commodity, whichever is shorter in order to
use License Exception RPL to authorize the export. This final rule adds
paragraphs (b)(4)(i) and (ii) to impose restrictions for firearms
shipped from or manufactured in Russia, Georgia, Kazakhstan,
Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or Uzbekistan, except for
any firearm model controlled by 0A501 that is specified under Annex A
in Supplement No. 4 to part 740, to impose the same types of
restrictions and impose the same type of information requirements for
providing information to CBP as this final rule includes for License
Exception TMP under paragraph (b)(5).

License Exception: Additional Permissive Reexports (APR)

    This final rule also adopts the following change to License
Exception APR to respond to the comments received on the Commerce May
24 rule:
    In Sec.  740.16 of License Exception APR, this final rule adds
commodities classified under a 0x5zz ECCN to the list of commodities
excluded under paragraph (a) of License Exception APR. This final rule
also adds a new paragraph (b)(2)(vi) to exclude commodities classified
under a 0x5zz ECCN under paragraph (b) of License Exception APR. The
Commerce May 24 rule did not propose these exclusions from License
Exception APR, but BIS identified these two paragraphs of License
Exception APR as two authorizations that were not intended to be
available under the Commerce May 24 rule, but based on the stated
criteria prior to the effective date of this final rule would have been
available. Therefore, this final rule makes these changes to ensure the
authorizations available for reexports and transfers (in-country) will
be equivalent to those available for exports.

License Exception STA

    BIS did not receive any comments on the proposed changes to License
Exception STA, Sec.  740.20, in the Commerce May 24 rule, so this final
rule adopts those changes as proposed. This final rule revises the
regulations at Sec.  740.20 to make firearms controlled under ECCN
0A501 and most ``parts,'' ``components,'' ``accessories,'' and
``attachments'' controlled under ECCN 0A501 ineligible for License
Exception STA. Only those ``parts,'' ``components,'' ``accessories,''
and ``attachments'' that are controlled under paragraph .x are eligible
for export under License Exception STA. Items controlled under ECCNs
0A502 and 0A503 are also excluded from STA eligibility.

Support Documentation for Firearms, Parts, Components, Accessories, and
Attachments Controlled by ECCN 0A501

    BIS did not receive any comments on this proposed change to Sec.
748.12 in the Commerce May 24 rule, so the change is published in this
final rule as proposed. This final rule requires that for commodities
controlled by ECCN 0A501 that are the subject of export or reexport
transactions for which a license is required, the exporter or
reexporter must obtain, prior to submitting an application, an import
permit (or copy thereof) if the importing country requires such permits
for import of firearms. That import permit is a record that must be
kept by the exporter or reexporter as required by part 762 of the EAR.
The purpose of this requirement is to assure foreign governments that
their regulations concerning the importation of firearms are not
circumvented. To implement this change, this final rule revises Sec.
748.12 to include the commodities controlled under ECCNs 0A501 (except
0A501.y), 0A502, 0A504 (except 0A504.f), and 0A505 (except 0A505.d)
within the list of commodities that are subject to the requirement and
adds a new paragraph (e) requiring that import certificates or permits
be obtained from countries other than OAS member states if those states
require such a certificate or permit.

Licenses for Firearms and Ammunition Will Be Limited to the Authorized
End Use and End Users

    BIS did not receive any comments on these statements of EAR
licensing policy in the Commerce May 24 rule but restates them here to
assist the public. Consistent with other BIS licenses, including ``600
series'' and 9x515 items, licenses for firearms and ammunition that
move from the USML to the CCL are limited to the authorized end use and
end users specified on the license and supporting documentation
submitted as part of the license application. This means any change in
the authorized end use or end user for a licensed transaction will
require a BIS authorization. This existing requirement of BIS licenses
is specified in Sec.  750.7(a) and on the boiler plate text included on
all BIS licenses. These requirements are also applied to firearms and
ammunition licenses. A change in end use or end user, including a
change of authorized end use or end user within a single foreign
country for a firearm or ammunition authorized under a BIS license,
requires a BIS authorization. BIS does not adopt any changes in this
final rule to these well-established and understood requirements on
using BIS licenses. Applicants for firearms and ammunition licenses are
also advised that BIS continues to exercise its authority, as specified
in Sec.  748.11 in the Note 2 to paragraph (a), on a case-by-case basis
to require a Statement by Ultimate Consignee and Purchaser as
warranted.
    The exporter, reexporter, or transferor using a BIS license,
including for firearms and ammunition licenses, is also required,
pursuant to Sec.  750.7(a), to inform the other parties identified on
the license, such as the ultimate consignees and end users of the
license's scope and of the specific conditions applicable to them. As
an additional safeguard for firearms and ammunition licenses, BIS will
include, when warranted, a license condition requiring the exporter,
reexporter, or transferor to obtain from the other parties identified
on the license a written confirmation that those other parties have
received and agree to the terms and conditions of the license. For
example, the condition may state ``Prior to using this license, the
exporter (reexporter or transferor) and other parties to the license
must agree to the conditions in writing and the exporter (reexporter or
transferor) must keep this on file with their other records.'' The
documents described in this paragraph are required to be kept for EAR
recordkeeping purposes under part 762 of the EAR.

Conventional Arms Reporting for Certain Exports of ECCN 0A501.a and .b
Commodities

    In Sec.  743.4 (Conventional arms reporting), this final rule
revises paragraphs (c)(1)(i) and (c)(2)(i) to add ECCN 0A501.a and .b
as commodities that require Wassenaar Arrangement reporting and United
Nations reporting under this conventional arms reporting section of the
EAR. This requirement assists the U.S. Government to meet its
multilateral commitments for the special reporting requirements for
exports of certain items listed on the WAML and the United Nations
Register of Conventional Arms when these items are authorized for
export under License Exceptions LVS, TMP, RPL, STA, or GOV (see part
740 of the EAR) or the

Validated End-User authorization (see Sec.  748.15 of the EAR) and for
United Nations reporting. License Exceptions LVS and STA are identified
in Sec.  743.4(b)(1), but because ECCN 0A501.a and .b commodities are
not eligible for those two license exceptions, the reporting
requirements under Sec.  743.4(c)(1)(i) and (c)(2)(i) are limited to
exports authorized License Exceptions TMP, GOV, and RPL or the
Validated End-User authorization. This final rule also adds contact
information for these reports.
    This final rule also makes the following additional change to Sec.
743.4 to respond to the comments received on the Commerce May 24 rule:
    Commenters requested that BIS use information required to be
submitted in the EEI filing in AES to pull the conventional arms
reporting data directly in order to eliminate the need for exporters to
submit separate reports to BIS. BIS agreed and this final rule revises
three paragraphs in Sec.  743.4 to adopt an alternative method for BIS
to receive the information that is required for conventional arms
reporting. This rule revises paragraph (a) to add four sentences at the
end of the paragraph. These four sentences specify that if the exporter
follows the requirements specified in this section for the alternative
submission method described in new paragraph (h) (Alternative
submission method), that separate reporting does not need to be made to
BIS for purposes of Sec.  743.4. Because of the EEI filing requirements
in AES in new Sec.  758.1(g)(4)(ii) for the firearms that require
conventional arms reporting, all conventional arms reporting
requirements for firearms should be able to be met by using the
alternative submission method. Under paragraph (b) (Requirements), this
final rule adds a reference to meeting the reporting requirement by
using the alternative submission method in new paragraph (h).
    This final rule adds paragraph (h) that describes the requirements
for the alternative submission method. To use the alternative reporting
method, each time the exporter files an EEI record in AES, the exporter
must include as the first text in the Commodity Description field in
AES the first six characters of the ECCN number, i.e., ``0A501.a'' or
``0A501.b.'' In addition, the exporter must document for recordkeeping
requirements under the EAR that for purposes of the conventional arms
reporting requirements under part 743, it has decided to use the
alternate submission method by taking steps to identify the end item
firearms in the EEI filing in AES that will enable the U.S. Government
to pull the data and meet national reporting commitments to the
Wassenaar Arrangement and the United Nations.
    As a conforming change, in Sec.  758.1 (The Electronic Export
Enforcement (EEI) filing to the Automated Export System (AES)), this
final rule adds a new paragraph (g)(4)(ii) (Identifying end item
firearms by ``items'' level classification or other control descriptor
in the EEI filing in AES). Exporters must include the six character
ECCN classification (i.e., 0A501.a or 0A501.b), as the first text to
appear in the Commodity description block in the EEI filing in AES.
Exporters for shotguns controlled under 0A502 must include the phrase
``0A502 barrel length less than 18 inches'' as the first text to appear
in the Commodity description block in the EEI filing in AES. This
information will be used by BIS as referenced in Sec.  743.4(h) for
conventional arms reporting.

Changes to Export Clearance Requirements for Firearms Being Moved to
the CCL (Part 758)

    In Sec.  758.1, this final rule adopts changes to clarify that a
filing of EEI in AES will be required for exports of the firearms
transferred from the USML pursuant to this rule regardless of value or
destination, including exports to Canada. As noted above, this
requirement applies, as was the case under the ITAR prior to the
effective date of this final rule, for temporary exports of such items
pursuant to License Exception TMP, but not for License Exception BAG.
    In addition, this final rule expands the data elements required as
part of an EEI filing to AES filing for these firearms to include
serial numbers, make, model and caliber. This requirement will ensure
law enforcement officials are able to effectively verify that firearms
exports are properly authorized and in conformance with all applicable
regulations, including those associated with the temporary export and
subsequent return of controlled firearms and unused ammunition.
    This final rule also makes the following additional changes to
Sec.  758.1(b)(10) and (c)(1) to respond to the comments received on
the Commerce May 24 rule regarding the concerns for individuals having
to file EEI in AES:
    In Sec.  758.1, this final rule revises new paragraph (b)(10) that
was included in the Commerce May 24 rule, but adds it as new paragraph
(b)(9). This final rule excludes exports authorized under License
Exception BAG from the EEI filing requirement in AES. As a conforming
change, this final rule revises paragraph (c)(1) to eliminate the
restriction from the exemption for License Exception BAG. This final
rule makes this change because of excluding License Exception BAG from
paragraph (b)(9) means the general exemption for not filing EEI in AES
for these firearms authorized under License Exception BAG, should be
available, so this final rule makes this conforming change. This final
rule adds a new Note to paragraph (c)(1) to add a cross reference to
the export clearance requirements that are specific to firearms
exported under License Exception BAG.
    This final rule also makes the following additional changes to
Sec.  758.1(g)(4) to respond to the comments received on the Commerce
May 24 rule regarding concerns for having to include the manufacture,
model, caliber, and serial number in the EEI filing in AES:
    In Sec.  758.1(g)(4) (Exports of Firearms and Related Items), this
final rule adds a new paragraph (g)(4)(i) (Identifying end item
firearms by manufacturer, model, caliber, and serial number in the EEI
filing in AES) to narrow the requirement for when firearms must be
identified by manufacture, model, caliber, and serial number in the EEI
filing in AES to License Exception TMP or a BIS license that contains a
condition requiring all or some of this information to be filed as EEI
in AES.

Entry Clearance Requirements for Temporary Imports (Sec.  758.10)

    Temporary imports are transactions that involve both the temporary
entry of an item into the U.S. from a foreign country and the
subsequent export of that item from the U.S. To preserve the treatment
of temporary import transactions for items in this rule that will
transfer from the USML in the ITAR to become subject to the EAR, BIS
imposes a temporary imports entry clearance requirement in this final
rule by adding new Sec.  758.10. This new section is limited to items
in this rule that are both ``subject to the EAR'' and on the USMIL in
27 CFR 447.21. To allow such items to temporarily enter the U.S., this
final rule imposes a process to collect identifying information for the
sole purpose of tracking items being temporarily imported for
subsequent export. BIS does not impose a license requirement for such
imports, but this information is necessary to facilitate the export
after a temporary import. The entry clearance requirement is an EAR
requirement and any false representation made under the new Sec.
758.10 will be a violation of the EAR.

    This final rule also makes the following additional change to Sec.
758.10 to respond to the comments received on the Commerce May 24 rule:
    In Sec.  758.10, this final rule adds an exclusion to the entry
clearance requirements proposed in the Commerce May 24 rule to clarify
that firearms ``subject to the EAR'' brought into the United States by
nonimmigrant aliens under the provisions of Department of Justice
regulations at 27 CFR part 478 are not subject to these same entry
clearance requirements for temporary imports. This final rule makes
this change for consistency with License Exception BAG under paragraph
(e) and because ATF regulations address nonimmigrant aliens temporarily
bringing these types of firearms into the United States, so the
requirements in Sec.  758.10 do not need to apply.
    In Sec.  758.10, this final rule clarifies the penultimate sentence
and the last sentence of paragraph (a) by removing references to
``permanent return'' and ``permanent import'' after items are
temporarily exported under an EAR authorization, e.g., License
Exception TMP or a Commerce license. This clarification is made because
the inbound portion of a temporary export is covered by the temporary
export authorization, so it not accurate to describe those as a
``permanent return'' or as a ``permanent import.''
    Also in Sec.  758.10, this final rule clarifies the introductory
text of paragraph (b) by deleting the title ``the Port Directors''
before U.S. Customs and Border Protection. This change is made because
U.S. Customs and Border Protection Center Directors may also have an
enforcement role in addition to Port Directors, so referencing U.S.
Customs and Border Protection is sufficient. In paragraph (b)(2), this
final rule revises the phrase ``as requested by CBP'' with the phrase
``upon request by CBP.'' In the last sentence of paragraph (b)(2), this
final rule removes the word ``inspection'' after the phrase
``additional requirements,'' because the word was not intended to be
included in the cross reference to Sec.  758.1(g)(4).
    This final rule also revises Sec.  758.10 to add references to
License Exception RPL and BIS licenses as two additional EAR
authorizations as valid purposes for a temporary import under this
section. This final rule does this by revising paragraph (b)(1)(i) to
broaden the number of permissible statements to allow for three
statements (instead of the single statement that was included in the
Commerce May 24 rule). This final rule adds new paragraphs (b)(1)(i)(A)
(to account for License Exception TMP under 15 CFR 740.9(b)(5)),
(b)(1)(i)(B) (to account for the addition of License Exception RPL
under 15 CFR 740.10(b)), and (b)(1)(i)(C) (to account for BIS licenses)
to add the three statements. The three statements are substantively the
same, and the only difference is the EAR authorization being referenced
in the statement. As a conforming change, this final rule adds a new
paragraph (b)(1)(iv) that applies if the item being temporarily
imported under Sec.  758.10 is for servicing or replacement. Under this
new paragraph (b)(1)(iv) at the time of temporary import, the name,
address and contact information of the organization or individual in
the U.S. that will be receiving the item for servicing or replacement
must be provided to CBP. Lastly, as an additional conforming change,
this final rule adds a new Note 2 to paragraph (b)(1) to impose
exclusions, similar to those imposed on License Exception TMP that
limit the availability of License Exception RPL for temporary imports
of certain firearms shipped from or manufactured in listed countries.

Unique Application and Submission Requirements for Licenses

    This final rule also adopts the following changes for BIS license
applications in response to comments received. As described above, BIS
agreed to include changes in Sec.  758.10 to account for temporary
imports that would require a BIS license for subsequent export.
    In Supplement No. 2 to part 748--Unique Application and Submission
Requirements, this final rule adds a new paragraph (z) (Exports of
firearms and certain shotguns temporarily in the United States)
describing a certification requirement for applicants to include in
Block 24 of the BIS license application. The certification requirement
is an acknowledgement by the applicant that the firearms in the
application will not be shipped from or manufactured in Russia,
Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or
Uzbekistan, except for any firearm model controlled by 0A501 that is
specified under Annex A in Supplement No. 4 to part 740. The
certification also requires that the applicant and other parties to the
transaction will comply with the requirements in paragraphs (z)(2)(i)
and (ii) of Supplement No. 2 to part 748. This final rule adds
paragraph (z)(2) (Requirements) to describe the requirements that will
be applicable for any license for the export of firearms controlled by
ECCN 0A501.a or .b, or shotguns with a barrel length less than 18
inches controlled in ECCN 0A502 that will be temporarily imported to
the United States. These requirements impose the same type of
requirements as this final rule includes for License Exception TMP
under paragraph (b)(5) and License Exception RPL under paragraph
(b)(4), but does so by imposing the certification requirement in
paragraph (z)(1). BIS will include a standard condition that will
require compliance with the requirements in paragraphs (z)(2)(i) and
(ii).

Changes to EAR Recordkeeping Requirements for Firearms Being Moved to
the CCL (Part 762)

    BIS does not make any additional changes in this final rule to what
was proposed in the Commerce May 24 rule as a result of the comments
received, so these changes are adopted as proposed. In part 762
(Recordkeeping), this final rule adopts two changes to the
recordkeeping requirements under the EAR. These changes specify that
certain records, that are already created and kept in the normal course
of business, must be kept by the ``exporter'' or any other party to the
transaction (see Sec.  758.3 of the EAR), that creates or receives such
records.
    Specifically, in Sec.  762.2 (Records to be retained), this final
rule redesignates paragraph (a)(11) as (a)(12) and adds a new paragraph
(a)(11) to specify the following information must be kept as an EAR
record: Serial number, make, model, and caliber for any firearm
controlled in ECCN 0A501.a and for shotguns with barrel length less
than 18 inches controlled in 0A502. The ``exporter'' or any other
``party to the transaction'' that creates or receives such records is
the person responsible for retaining this record.
    In Sec.  762.3 (Records exempt from recordkeeping requirements),
this final rule narrows the scope of an exemption from the EAR
recordkeeping requirements for warranty certificates. This final rule
narrows this exclusion to specify the exclusion from the recordkeeping
requirements does not apply (meaning the record will need to be kept
under the recordkeeping requirements) for warranty certificates for any
firearm controlled in ECCN 0A501.a and for shotguns with barrel length
less than 18 inches controlled in 0A502, when the certificate issued is
for an address located outside the United States. This is an expansion
of the EAR recordkeeping requirements, but because warranty
certificates are already created and kept as part of normal business
recordkeeping purposes, this expansion is not anticipated to create any
new or increased burden under the

EAR, because it is a document that is created in the normal course of
business and should be easily accessible. These recordkeeping
requirements will assist the United States Government because it is
important for law enforcement to have access to this information.

Conforming Change To Add a New Definition for Use in ECCNs 0A501 and
0A502 (Sec.  772.1)

    This final rule also adds a new definition to the definition part
of the EAR to respond to the comments received on the Commerce May 24
rule:
    In Sec.  772.1 (Definitions of terms as used in the Export
Administration Regulations), this final rule adds a definition of
``complete breech mechanisms.'' The new definition specifies that this
is a mechanism for opening and closing the breech of a breech-loading
firearm, especially of a heavy-caliber weapon. As a conforming change,
this final rule also adds double quotation marks around the term where
it is used in ECCNs 0A501 and 0A502.

Export Control Reform Act of 2018

    On August 13, 2018, the President signed into law the John S.
McCain National Defense Authorization Act for Fiscal Year 2019, which
included the Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4801-
4852) that provides the legal basis for BIS's principal authorities and
serves as the authority under which BIS issues this rule. As set forth
in Section 1768 of ECRA, all delegations, rules, regulations, orders,
determinations, licenses, or other forms of administrative action that
have been made, issued, conducted, or allowed to become effective under
the Export Administration Act of 1979 (50 U.S.C. 4601 et seq.) (as in
effect prior to August 13, 2018 and as continued in effect pursuant to
the International Emergency Economic Powers Act (50 U.S.C. 1701 et
seq.) and 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,
2018, 83 FR 39871 (August 13, 2018)), or the Export Administration
Regulations, and are in effect as of August 13, 2018, shall continue in
effect according to their terms until modified, superseded, set aside,
or revoked under the authority of ECRA.

Executive Order Requirements

    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 final rule has been designated a ``significant
regulatory action,'' although not economically significant, under
section 3(f) of Executive Order 12866. Although the items identified in
this final rule have been determined to no longer warrant ITAR control
by the President, the proliferation of such items has been identified
as a threat to domestic and international security if not classified
and controlled at the appropriate level under the EAR. Commerce
estimates that the combined effect of all rules to be published adding
items removed from the ITAR to the EAR will increase the number of
license applications to be submitted to BIS by approximately 30,000
annually.
    This final rule does not contain policies with Federalism
implications as that term is defined under E.O. 13132.
    To control these items under the EAR that no longer warrant ITAR
control, appropriate controls on the CCL needed to be included in the
Department of Commerce final rule. This includes creating new ECCNs and
revising certain existing ECCNs, as well as making other changes to the
EAR to control items that will be moved from these three USML
categories to the CCL once the section 38(f) notification process is
completed and a final rule is published and becomes effective. Adding
new controls and other requirements to the EAR imposes regulatory
burdens on exporters and some other parties involved with those items,
but compared to the burdens these exporters and other parties faced
under the ITAR, these regulatory burdens, including financial costs,
will be reduced significantly. The EAR is a more flexible regulatory
structure whereby the items can still be controlled appropriately, but
in a much more efficient way that will significantly reduce the burdens
on exporters and other parties compared to the regulatory burdens they
faced when the items were ``subject to the ITAR.'' Deregulatory does
not mean a decontrol of these items.
    For those items in USML Categories I, II, and III that will move by
this rule to the CCL, BIS will be collecting the necessary information
using the form associated with OMB Control No. 0694-0088. BIS estimates
that this form takes approximately 43.8 minutes for a manual or
electronic submission. Using the State Department's estimate that
10,000 license applications annually will move from the USML to the CCL
and BIS's estimate in this final rule that 6,000 of the 10,000 license
applications will require licenses under the EAR, that constitutes a
burden of 4,380 hours for this collection under the EAR. Those
companies are currently using the State Department's forms associated
with OMB Control No. 1405-0003 for which the burden estimate is 1 hour
per submission, which for 10,000 applications results in a burden of
10,000 hours. Thus, subtracting the BIS burden hours of 4,380 from the
State Department burden hours of 10,000, the burden is reduced by 5,620
hours. The other 4,000 applicants may use license exceptions under the
EAR or the ``no license required'' designation, so these applicants
will not be required to submit license applications under the EAR.
    In addition to the reduced burden hours of 5,620 hours, there will
also be direct cost savings to the State Department that will result
from the 10,000 license applications no longer being required under the
ITAR once these items are moved to the EAR. The Department of State
charges a registration fee to apply for a license under the ITAR.
Pursuant to the AECA, ITAR, and associated delegations of authority,
every person who engages in the business of brokering activities,
manufacturing, exporting, or temporarily importing any defense articles
or defense services must register with the Department of State and pay
a registration fee. The Department of State adopted the current fee
schedule to align the registration fees with the cost of licensing,
compliance, and other related activities. The Department of Commerce
will incur additional costs to administer these controls and process
license applications. However, the Department of Commerce does not
charge a registration fee to apply for a license under the EAR, and we
are unable to estimate the increase in costs to the Department of
Commerce to process the new license applications. Therefore, we are
unable to provide an estimate of the net change in resource costs to
the government from moving these items from the ITAR to the EAR. It is
the case, however, that the movement of these items from the ITAR will
result in a permanent and recurring direct transfer of $2,500,000 per