[Federal Register Volume 78, Number 143 (Thursday, July 25, 2013)]
[Proposed Rules]
[Pages 45026-45049]
[FR Doc No: 2013-17559]

Federal Register / Vol. 78, No. 143 / Thursday, July 25, 2013 /
Proposed Rules

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 774

[Docket No. 120330233-3326-02]
RIN 0694-AF64

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

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

ACTION: Proposed rule.

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SUMMARY: This is the second proposed rule to describe how military
electronics and certain superconducting and cryogenic equipment and
related items the President determines no longer warrant control under
the United States Munitions List (USML) would be controlled on the
Commerce Control List (CCL). This proposed rule also would amend ECCNs
7A001 and 7A101 to apply the ``missile technology'' reason for control
only to items in those ECCNs on the Missile Technology Control Regime
(MTCR) Annex.
    This action is one in a planned series of proposed rules that would
implement the Administration's Export Control Reform Initiative by
describing how certain types of articles would be controlled on the CCL
after the President determines that the articles no longer warrant USML
control. This proposed rule is being published in conjunction with a
proposed rule from the Department of State, Directorate of Defense
Trade Controls, which would amend the list of articles controlled by
USML Category XI.
    The revisions proposed in this rule are part of Commerce's
retrospective plan under EO 13563 completed in August 2011. Commerce's
full plan can be accessed at: http://open.commerce.gov/news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules.

DATES: Comments must be received by September 9, 2013.

ADDRESSES: You may submit comments by any of the following methods:
     By the Federal eRulemaking Portal: http://www.regulations.gov. The identification number for this rulemaking is
BIS-2012-0045.
     By email directly to<EMAIL_ADDRESS>Include
RIN 0694-AF64 in the subject line.
     By mail or delivery to Regulatory Policy Division, Bureau
of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th
Street and Pennsylvania Avenue NW., Washington, DC 20230. Refer to RIN
0694-AF64.

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

Background

The Export Control Reform Initiative

    This proposed rule is part of the Administration's Export Control
Reform Initiative, the objective of which is to protect and enhance
U.S. national security interests. The Initiative began in August 2009
when President Obama directed the Administration to conduct a broad-
based review of the U.S. export control system to identify additional
ways to enhance national security. In April 2010, then-Secretary of
Defense Robert M. Gates, describing the initial results of that effort,
explained that fundamental reform of the U.S. export control system is
necessary to enhance national security. Once the Department of State's
International Traffic in Arms Regulations (ITAR) and its U.S. Munitions
List (USML) are amended so that they control only the items that
provide the United States with a critical military or intelligence
advantage or otherwise warrant such controls, and the Export
Administration Regulations (EAR) are amended to control military items
that do not warrant USML controls, the U.S. export control system will
enhance national security by (i) improving interoperability of U.S.
military forces with allied countries, (ii) strengthening the U.S.
industrial base by, among other things, reducing incentives for foreign
manufacturers to design out and avoid U.S.-origin content and services,
and (iii) allowing export control officials to focus government
resources on transactions that pose greater concern.
    Pursuant to section 38(f) of the Arms Export Control Act (AECA),
the President is obligated to review the USML ``to determine what
items, if any, no longer warrant export controls under'' the AECA. The
President must report the results of the review to Congress and wait 30
days before removing any such items from the USML. The report must
``describe the nature of any controls to be imposed on that item under
any other provision of law.'' 22 U.S.C. 2778(f)(1).
    BIS has published and will continue to publish additional Federal
Register notices containing proposed amendments to the CCL that
describe proposed controls for additional categories of articles the
President determines no longer warrant control under the USML. The
State Department will publish concurrently proposed amendments to the
USML that correspond to the BIS notices. BIS will also publish proposed
rules to further align the CCL with the Wassenaar Arrangement on Export
Controls for Conventional Arms and Dual-Use Goods and Technologies'
(Wassenaar Arrangement) Munitions List (Wassenaar Arrangement Munitions
List or WAML) and the Missile Technology Control Regime's (MTCR)
Equipment, Software and Technology Annex (MTCR Annex).

Overview of This Proposed Rule

    Following the structure set forth in the final rule entitled
``Revisions to the Export Administration Regulations: Initial
Implementation of Export Control Reform'' (78 FR 22660, April 16, 2013)
(``April 16 (initial implementation) rule''), this proposed rule
describes BIS's proposal for controlling under the EAR's CCL certain
military electronic equipment and related articles now controlled by
the ITAR's USML Category XI, and equipment and related items in
category ML20 of the WAML, which pertains to certain cryogenic and
superconductive equipment. These items are currently controlled by
``catch all'' provisions of the ITAR's USML Categories VI, VII, VIII,
and XV. Finally, this proposed rule would correct two ECCNs in CCL
Category 7 to apply the ``missile technology'' reason for control only
to items that are on the MTCR Annex.
    This action re-proposes moving export control of certain military
electronic equipment from the USML to the CCL. BIS originally proposed
transferring the control of these items to the EAR in 2012, in a rule
entitled, ``Revisions to the Export Administration Regulations (EAR):
Control of Military Electronic Equipment and Related Items the
President Determines No Longer Warrant Control under the United States
Munitions List (USML)'' (77 FR 70945, November 28, 2012) (``November 28
(military electronics) rule''). That action was issued simultaneously
with a proposed rule by the Department of State, entitled, ``Amendment
to the International Traffic in Arms Regulations: Revisions of US
Munitions List Category XI and Definition for `Equipment' '' (77 FR
70958, November 28, 2012) (``State's November 28, 2012 (military
electronics) rule'') (collectively, the ``November 28, 2012 (military
electronics) rules''). The

provisions in this second proposed rule by BIS are based on a review of
public comments to the November 28 (military electronics) rule, and on
a review of USML Category XI and WAML category ML20 by the Department
of Defense, which worked with the Departments of State and Commerce in
preparing these proposed amendments. BIS is proposing this action a
second time because the comments suggested changes from the original
proposed rule that are sufficiently distinct from the November 28
(military electronics) rule to warrant providing them to the public for
further review and to obtain public input on the feasibility of
implementing the rule as re-proposed. The criteria used in this review
are described in the November 28 (military electronics) rule. See 77 FR
70945.
    The revisions proposed in this rule are part of Commerce's
retrospective plan under EO 13563 completed in August 2011. Commerce's
full plan can be accessed at: http://open.commerce.gov/news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules.

Consistency of Controls

    This proposed rule would alter the scope of ECCNs 3B611, 3E611,
9B620 and 9E620 from what was proposed in the November 28 (military
electronics) rule. Upon review, BIS determined that standard elements
for test, inspection, and production equipment ECCNs and for technology
ECCNs would reduce the possibility of confusion. Accordingly, BIS
adopted the elements ``development, production, repair, overhaul, or
refurbishing'' for test, inspection, and production equipment ECCNs in
the 600 series and adopted ``development, production, operation,
installation, maintenance, repair, overhaul, or refurbishing'' for
technology ECCNs in the 600 series (see 78 FR 40892, 40894, July 8,
2013). This proposed rule would include those elements in 3B611, 3E611,
9B620 and 9E620 to conform with that decision.

Need to Avoid Ambiguous Classifications or Inadvertent License
Requirements

    BIS recognizes that because electronics frequently are installed in
some other commodity, they are particularly susceptible to ambiguous
classification or classification under multiple entries on the CCL. For
example, a given electronic device might also be viewed as a part for
an aircraft, radar, computer, laser, or some other article. How the
device is viewed might affect its classification on the CCL, which
could, in turn, affect license requirements or licensing policy. BIS's
intent is that the new ECCNs proposed here would not increase the
number of destinations to which a license is required, alter the policy
under which license application are reviewed, or create any apparent
instances of an item that is subject to the EAR being covered by more
than one ECCN. Parties who believe that they can identify instances
where the effect of the proposed rule would be contrary to this intent
are encouraged to identify those instances in a public comment on this
proposed rule.

Relationship to April 16, Initial Implementation Rule

    The April 16 (initial implementation) rule will become effective on
October 15, 2013. Because any final rule resulting from this proposed
rule would not become effective until after that date, this proposed
rule and BIS's responses to the public comments on the November 28
(military electronics) rule discussed below are written as if the April
16 (initial implementation) rule were already effective. Accordingly,
commenters on this proposed rule should become familiar with the April
16 (initial implementation) rule and take it into account in
formulating their comments on this proposed rule. Although BIS
encourages public understanding of the entire April 16 (initial
implementation) rule, the provisions listed below are likely to be
particularly useful because they provide background for understanding
terms and concepts that are used extensively in this proposed rule and
in the discussion of the public comments. The listed page numbers refer
to pages in the Federal Register published on April 16, 2013.
     ``600 series:'' preamble discussion, pages 22661-22663 and
22691; regulatory text, page 22727.
     Definition of ``component:'' regulatory text, page 22727.
     Definitions of ``end item'' and ``part:'' regulatory text,
page 22728.
     Definition of ``specially designed:'' preamble discussion,
pages 22682-22691; regulatory text, pages 22728-22729.
     ``Dual licensing:'' preamble discussion, page 22664-22665;
regulatory text, page 22707.
     License Exceptions TMP, RPL, GOV, TSU and STA: preamble
discussion, pages 22669-22674; regulatory text, pages 22709-22720 and
22726.
     ``Order of review'': preamble discussion, page 22704;
regulatory text, pages 22735-22736.

Public Comments on the November 28 (Military Electronics) Rule and BIS
Responses

    BIS received comments from 17 organizations and one individual,
proposing a number of ideas for revising the proposed rule.
    Comment: Several commenters expressed general approval of
transferring some military items from the USML. As part of their
comments, they noted that (i) electronic parts and components are
rarely almost exclusively available from the United States; (ii)
current USML requirements impose a heavy cost burden on low value parts
and US manufacturers may thus be more inclined to continue making the
parts if that burden is reduced; and (iii) the removal of a ``see-
through'' rule on electronic parts and components will reduce the
incentive for foreign customers in non-embargoed countries to refuse to
buy US-origin parts. One commenter approved of BIS's use of ``specially
designed'' in ``600 series'' ECCNs because it would help standardize
the identification of which items are and are not controlled. One
commenter noted that placing monolithic microware integrated circuit
power amplifiers in 3A611.c and discrete power transistors in 3A611.d
are positive moves that clearly define the articles covered.
    Response: BIS agrees and these comments are consistent with the
second proposed rule.
    Comment: Some commenters expressed concern that the rule did not
refer to a Department of Defense review process for low observable and
counter low observable related items moving from the USML to the CCL.
    Response: In accordance with Executive Order 12981, as amended, the
Department of Defense has authority to review license applications
submitted to the Department of Commerce. BIS expects that Department to
continue existing review policies for any items referred to by these
commenters that are added to the CCL. In any event, no change to the
regulations is necessary to implement this policy.
    Comment: A commenter recommended adding an interpretation to Part
770 clarifying that items subject to a parameter-based CCL entry will
be controlled by such entry if the item meets the parameter at the time
of export, and not by whether it has potential capability (e.g.,
dormant capability) to meet the control, so long as the additional
capability cannot be executed by the end-user without additional
activity by the exporters. Exporters would be required to obtain

any necessary authorizations to activate such a capability for a
customer.
    Response: Items with characteristics that are within the scope of
the parameters of a particular ECCN are classified under that ECCN. BIS
believes that no change is needed to the regulatory text from what was
published in the November 28 (military electronics) rule.
    Comment: Commenters stated that more information about the order of
precedence or order of review was needed for the public to be able to
classify items reliably. Many items might be reasonably classified
under a USML category or an ECCN, more than one ECCN, or more than one
ECCN paragraph.
    Response: BIS received comments along this line in response to
other proposed rules. The April 16 (initial implementation) rule
includes an order of review, which is intended to eliminate the
possible uncertainty noted by these commenters.
    Comment: Commenters expressed concern that moving items from the
USML to the CCL would increase the number of licenses that some
companies would need for two reasons.
    First, in many instances, the Directorate of Defense Trade Controls
(DDTC) in practice issues licenses covering items that are subject to
the EAR, when they are being exported in conjunction with defense
articles that are subject to the ITAR. The commenter suggested that
these circumstances might increase the time needed to gain approval for
transactions that require the export of both USML and CCL items,
because BIS licenses generally take longer to obtain than DDTC
licenses. The commenter proposed as a solution allowing DDTC to issue
licenses for items on the CCL in such transactions. This commenter
suggested that a formal process for DDTC to issue licenses for items
that are subject to the EAR be authorized.
    Second, license exceptions under the EAR do not apply to some
transactions that would be exempt from license requirements under the
ITAR. Two solutions were proposed. First, amend license exceptions
under the EAR to make sure that they cover transactions that would
qualify for an exemption under the ITAR. Second, create a new license
exemption that authorizes using ITAR exemptions for transactions that
are subject to the EAR.
    Response: The potential problem of needing both a DDTC and a BIS
license for a single transaction is sometimes referred to as the dual
licensing issue. BIS's and DDTC's April 16 (initial implementation)
rules address the dual licensing issue with a procedure for DDTC to
issue licenses for items that are subject to the EAR in situations
where a single transaction includes exports or reexports of items that
are subject the ITAR and items that are subject to the EAR. BIS
welcomes comments on whether these provisions effectively address the
issues identified in the comments.
    The April 16 (initial implementation) rule revises several EAR
license exceptions to make them comparable to ITAR license exemptions.
BIS believes that the second proposed solution--amending the EAR to
allow use of ITAR license exemptions for transactions that are subject
to the EAR--would create legal and policy complications that can be
avoided by simply amending existing EAR license exceptions. BIS
welcomes comments on whether the revisions to license exceptions in the
April 16 (initial implementation) rule effectively address the issues
identified in the comments with respect to military electronic items.
    Comment: A commenter recommended several steps to deal with the
expected increase in the number of license applications to be submitted
to BIS, such as: Increase staffing levels; ``enhance'' the DOC
licensing process to reduce cycle times; include reviewing agencies in
efforts to streamline the license application review process; and
leverage lessons learned and best practices from the Department of
State, which has reduced processing time in recent years.
    Response: BIS is taking these steps. No revision to the EAR is
needed to do so.

Comments Concerning Proposed ECCNs 4A611, 5A611 and 6A611

    Proposed ECCNs 4A611, 5A611 and 6A611 refer readers to ECCN 3A611.
They are included to alert readers that military computers, military
telecommunications equipment and military radars would be controlled by
ECCN 3A611, a structure more similar to that of the USML, which
controls all three in Category XI, than that of the CCL, which controls
computers in Category 4, telecommunications equipment in Category 5,
and radars in Category 6.
    Comment: Commenters expressed a belief that following the USML
pattern would make classification more difficult than would following
the CCL pattern.
    Response: This proposed rule republishes those three cross-
reference ECCNs along with a fourth one: ECCN 7A613, which refers
readers to 3A611 for military avionics and navigation items. BIS
continues to seek comments on which pattern would be easier to
understand and comply with. One pattern would create substantive ECCNs
in five CCL Categories--Category 4 (computers), Category 5
(telecommunications), Category 6 (sensors and lasers), Category 7
(avionics), and Category 3 (all other military electronics not
described on the USML). The other pattern would place all substantive
control text for military electronics in Category 3 with cross
references to Category 3 in Categories 4, 5, 6 and 7. The advantage of
breaking the different types out among the categories is that they
would be described in more detail and in the CCL categories that
control similar dual-use items. The disadvantage would be that 20 new
substantive 600 series ECCNs would need to be created that all contain
essentially contain the same descriptions as compared to 4 new
substantive and four cross reference ECCNs that would be required by
the second alternative.
    Comment: A commenter requested a six-month grace period to
implement the changes that would be required by the proposed rule.
    Response: BIS plans to make the final rule adding to the CCL
military electronic systems the President determines no longer warrant
control under the USML effective 180 days after publication.
    Comment: One commenter noted that the EAR contain no definition of
``avionics,'' making the decision to classify an item under Category
7--Navigation and Avionics or Category 9--Aerospace and Propulsion,
difficult. The commenter stated as an example that a control panel for
anti-ice bleed air valves might belong under either Category 7 or
Category 9, depending on whether it contains a digital circuit even
though the function performed is the same.
    Response: BIS is making no changes to this proposed rule in
response to this comment, because it is outside the scope of the
November 28 (military electronics) rule. However, BIS will look into
ways to address elsewhere the issues raised by this commenter.
    Comment: One commenter stated the policy implications of the
phrase, ``parts and components n.e.s. in ECCNs 7A994 and 9A991.d,'' are
unclear with the addition of the proposed definition of ``specially
designed.'' The commenter noted that neither ECCN uses the term
``specially designed,'' and stated that the ECCNs have never been
understood to control EAR99 items common to non-aircraft applications.
    Response: BIS is making no changes to this proposed rule in
response to this

comment because it is outside the scope of the November 28 (military
electronics) rule. BIS does not intend that anything in this proposed
rule or in the April 16 (initial implementation) rule make a currently
EAR99 item controlled under either ECCN 7A994 or 9A991. BIS will look
into ways to address elsewhere the issues raised by this commenter.
    Comment: Several commenters expressed concern over use of the term
``specially designed'' in the November 28 (military electronics) rule
when the final rule defining that term had not been published. The
commenters noted that they could not analyze the impact of the term
without knowing its precise language.
    Response: The April 16 (initial implementation) rule included the
definition of ``specially designed'' that will apply to this proposed
rule has now been published. See 78 FR 22682-91, 22728-29.
    Comment: Several commenters proposed features that they thought the
definition of ``specially designed'' should have. These recommendations
were:
     Include in subsection (a)(1) of the definition
application-specific components of end items for which the control
parameters or character can be ascertained;
     Restrict the ``necessary'' standard for components set
forth in subsection (a)(2) to components for which there is no basis to
assess the controlled parameters or character of the end item in which
the component is incorporated;
     Create a note that provides an appropriate industry
definition of ASICs;
     Capture the natural meaning of the term ``specially
designed,'' and avoid overarching exclusions and exceptions; and
     Eliminate reference in subsection (b)(3) to ``form and
fit'' for components of equivalent performance.
    It is logical and feasible to tie the control of ``specially
designed'' components to the related end-item, but only to the extent
that the ``specially designed'' component is peculiarly responsible for
the controlled parameters of the controlled character as a whole of the
end item.
    Form and fit adapted to a particular end item or special protective
packaging adapted to the environment in which that end-item functions
should not make a part or component specially designed for a particular
end item if the function that the part or component performs is the
same as that it would perform in some other end-item where a different
form or fit is required, or such special protective packaging or
housing is not needed.
    Consider modifications to basic hardware as minor and, therefore
not ``specially designed'' if they: (a) Are unclassified; (b) are not
for the purpose of improving the item's resistance or hardness to
nuclear radiation, nuclear electromagnetic pulse, or resistance to
chemicals or biological agents controlled under the ITAR; and c) are
not made to achieve special designated military properties (e.g.,
special low observable, acoustic, electromagnetic properties, hot
section technology for military gas turbine engines, or characteristics
identified in the proposed Supplement No. 4 to Part 740 of the EAR).
    Response: Following the closing comment period date for the
November 28 (military electronics) rule, the April 16 (initial
implementation) rule set forth the definition of ``specially
designed.'' This definition provides that modifications to a part or
component made solely to fit a particular commodity do not make the
part or component specially designed. The definition also states that
certain specific parts are not specially designed. The definition is
not limited to parts or components that are peculiarly responsible for
achieving the control parameters of the end item, nor does it exclude
modifications or packaging applied to a part or component adapted to
the environment in which the end-item performs. Although the notion of
a short ``natural meaning'' definition is interesting, experience has
indicated that determining the actual purpose for which something was
designed is often difficult and can lead different readers to different
conclusions based on the same sets of facts. BIS believes that the
definition set forth in April 16 (initial implementation) rule provides
a reasonable, repeatable, verifiable, and as certain as possible
framework for determining which parts and components are and are not
``specially designed.'' However, BIS welcomes comments regarding the
impact the term ``specially designed'' has on the ECCNs in this
proposed rule.
    Comment: One commenter recommended removing minor parts and
components in normal commercial use to which minor modifications have
been made from the catch-all paragraphs for the 600 series ECCNs,
arguing that such common hardware does not warrant this level of
control.
    Response: BIS is not adopting this recommendation. License
requirements on parts and components that are specially designed for
military equipment, even if they do not give the military equipment its
military character, can serve the U.S. government's national security
and foreign policy interests in being able to monitor, control, and
otherwise have visibility into the supply chain of the parts and
components that are necessary to keep military equipment functioning.
The U.S. government has made a determination that such parts and
components, which are now ITAR controlled, do not warrant all the
controls of the ITAR. The government has not made, and does not intend
to make, a determination that such items do not warrant control at all.
    Comment: One commenter stated that BIS should respect prior
commodity jurisdiction rulings. The U.S. government has already
determined that these items do not warrant control on the ITAR as it
currently exists. Therefore, they should not warrant control under 600
series ECCNs.
    Response: Items not currently on the USML, in an ECCN that ends
with ``018,'' or in ECCN 0A918, have been determined not to be military
items. BIS confirmed in General Order No. 5 in the April 16 (initial
implementation rule) that one may conclude that such items within the
scope of a Commodity Jurisdiction (``CJ'') determination are not 600
series items (See 78 FR 22660, 22708, April 16, 2013). If readers
believe that this proposed rule would do so, they should submit a
comment indicating specifically what items in ECCNs other than those
described above or what EAR99 items they believe would be moved to the
600 series by this proposed rule.

Comments on ECCN 3A101

    Comment: One commenter recommended replacing the phrase ``usable in
missiles'' with ``specially designed for use in missiles,'' stating
that the former language could lead to controlling almost any analog to
digital converter because it would be impossible to prove that it could
not be used in some capacity in anything considered a missile. This
same commenter recommended removing paragraph .a.1 from ECCN 3A101,
which applies to analog to digital converters that are `` `Specially
designed' to meet military specifications for ruggedized equipment,''
because published military specifications for ruggedized equipment
address a number of characteristics that are not uniquely military.
    Response: The phrases ``usable in missiles'' and `` `[s]pecially
designed' to meet military specifications for ruggedized equipment''
are close paraphrases that accurately convey the

meaning of the corresponding language in Category II, Item 14, 14.A.1
of the MTCR Annex. The ECCNs at issue implement the controls described
in the MTCR Annex. The changes that this commenter proposes would alter
ECCN 3A101 sufficiently that it would no longer accurately convey the
meaning of the Annex. Therefore, BIS is not making this change. BIS
notes that the control phrase ``usable in missiles'' is indeed
substantially broader in scope than the control phrase ``specially
designed.'' BIS encourages the public to review the definition of the
term in EAR section 772 for purposes of making classification
determinations of items that are potentially within the scope of ECCNs
that use the phrase ``usable in missiles.''
    Comment: One commenter stated that adding analog-to-digital
converters to ECCN 3A101.a is a positive change, but thought that doing
so was inconsistent with the other changes that were adding electronic
items from the USML to ECCN 3A611. The commenter thought the departure
from the standard pattern would cause confusion.
    Response: BIS proposed adding these analog-to-digital converters to
ECCN 3A101.a because that paragraph currently addresses those analog-
to-digital converters by referring readers to the USML. BIS believes
that implementing the EAR control in the paragraph that currently
refers readers to the USML for controls on the same commodities would
be less confusing than adding these analog-to-digital converters to a
new 600 series ECCN. This proposed rule slightly revises the November
28 (military electronics) rule language to conform more closely to the
MTCR text, but continues to control these analog-to-digital converters
under ECCN 3A101.a. BIS invites further comment on whether controlling
these analog-to-digital converters in ECCN 3A101 or in ECCN 3A611 would
be easier for readers of the EAR.

Comments on ECCN 3A611

    Comment: One commenter recommended changing the LVS paragraph in
ECCN 3A611 to read $1500, N/A for 3A611.c, to be consistent with other
ECCN entries that contain similar paragraph restrictions.
    Response: BIS agrees that the proposed rule phrasing was not
consistent with the pattern used in most ECCNs. To improve consistency
and clarity, this proposed phrases the LVS limit as $1500 for 3A611.a,
.d through .h and .x; N/A for 3A611.c and .y
    Comment: BIS received several comments concerning related controls
note number (2) in the November 28 (military electronics) rule (related
control note number 6 in this proposed rule), which reads:

    Electronic items ``specially designed'' for military use that
are not controlled in any USML category but are within the scope of
another ``600 series'' ECCN are controlled by that ``600 series''
ECCN. Thus, ECCN 3A611 controls only electronic items ``specially
designed'' for a military use that are not otherwise within the
scope of a USML category or ``600 series'' ECCN other than ECCN
3A611. For example, electronic components not enumerated on the USML
or another 600 series entry that are ``specially designed'' for a
military aircraft controlled by USML Category VIII or ECCN 9A610 are
controlled by the catch-all control in ECCN 9A610.x. Electronic
components not enumerated on the USML or another 600 series entry
that are ``specially designed'' for a military vehicle controlled by
USML Category VII or ECCN 0A606 are controlled by ECCN 0A606.x.
Electronic components not enumerated on the USML that are
``specially designed'' for a missile controlled by USML Category IV
are controlled by ECCN 0A604.

    One commenter stated that many types of electronic equipment are
used in military vehicles or other military equipment and have no
functional or technical difference from similar equipment used in
civilian vehicles or equipment. Unless the definition of ``specially
designed'' allows for minor modifications to be made without an item
being considered ``specially designed,'' the proposed rule would have
the potential to impose significant controls on automotive electronic
items that are in normal commercial use throughout the world. The
proposed rule should be clarified to address this issue by including a
note reading, ``Automotive electronic parts, components, accessories
and attachments, controlled by 0A606.y are not subject to 3A611.y
simply because they contain electronics, rather they are controlled by
0A606.y.''
    Response: The definition of ``specially designed'' as published in
the April 16, (initial implementation) rule excludes parts that
otherwise would be specially designed if the only modification is to
make the part fit a particular commodity. Even for electronic parts and
components that, according to the definition, are specially designed
for military ground vehicles, BIS believes that the commenter's
proposed language is unnecessary. The first sentence of the related
control note in ECCN 3A611 states that electronic items that are not on
the USML and are within the scope of another 600 series ECCN are
controlled by that 600 series ECCN. BIS believes that neither
modification to this text nor an additional note in paragraph .x is
necessary to make the point. A note should not be necessary for the .y
paragraphs because the .y paragraphs list specific commodities.
    Comment: One commenter recommended that the sentence reading:
``Thus, ECCN 3A611 controls only electronic items `specially designed'
for a military use that are not otherwise within the scope of a USML
category or `600 series' ECCN other than ECCN 3A611'' be revised by
replacing the phrase or ```600 series' ECCN other than ECCN 3A611''
with ``another 600 series ECCN,'' because the note is within ECCN
3A611, and therefore the reference to 3A611 is unnecessary.
    Response: BIS acknowledges the reference to ECCN 3A611 is, as a
matter of syntax, unnecessary. However, experience indicates that in
the EAR, explicit references, even at the risk of sounding pedantic,
often result in fewer misunderstandings. Therefore, BIS is not adopting
this change.
    Comment: One commenter stated that the text in the related control
note to 3A611 that reads ``. . . that are not controlled in any USML
category but are within the scope of another `600 series' ECCN are
controlled by that `600 series' ECCN'' appears contrary to the
reasoning used to include military computers, telecommunications
devices and radars in 3A611, and further clouds exactly where
electronic components should be classified.
    Response: ECCNs 4A611, 5A611 and 6A611 in the November 28 (military
electronics) rule are merely ECCN headers that indicate that specially
designed military computers, telecommunications equipment and radars,
respectively, if not on the USML are controlled under ECCN 3A611. They
do not contain any ``List of Items Controlled'' or other text
indicating that they are used to impose license requirements. BIS
thinks it unlikely that readers, on the basis of the related control
note in ECCN 3A611, will look for license requirements in ECCNs 4A611,
5A611 or 6A611; even if they do so, they would be directed back to ECCN
3A611. Accordingly, this proposed rule does not change the text of the
first sentence of related control note (6). However, readers are
encouraged to submit further comments on this point. As described
above, BIS is specifically seeking comments about whether it would be
easier to understand and make compliance determinations if separate 600
series ECCNs sets were created for military computers, military
telecommunications, and military lasers and radar in CCL Categories 4,
5, and 6, respectively or if all such items are

controlled within the scope of a general military electronics 600
series ECCN, i.e., 3x611.
    Comment: One commenter noted that the second sentence of this
related control note (number 6 in this proposed rule) refers to ECCN
3A611, whereas the corresponding explanatory text in the preamble
refers to ECCN 3A611.x. The commenter believes that the regulatory text
is correct and that the explanatory text should be modified
accordingly.
    Response: BIS agrees and the explanatory text has been modified
accordingly in this proposed rule.
    Comment: One commenter recommended changing ``directly related'' to
``specially designed'' in the first related controls note, which states
technical data that are directly related to electronic items controlled
in USML Category XI or other USML categories are subject to the ITAR.
    Response: BIS is not adopting this recommendation. The purpose of
the related controls note is to call readers' attention to regulatory
provisions that apply to items related to or similar to the items in
the ECCN in which the note appears. In this instance, the relevant
regulatory provision is Category XI of the USML, which uses the phrase
``directly related to . . .'' in describing the technical data that it
controls. Comments or questions regarding the meaning of ``directly
related'' should be directed to the Department of State's Directorate
of Defense Trade Controls.
    Comment: BIS received several comments about the terms used in ECCN
3A611.a. Commenters thought certain terms were imprecise and should be
eliminated or replaced with more specific listings of items controlled.
The criticized terms were ``equipment,'' ``end items,'' ``systems,''
``specially designed'' and ``military use.''
    Response: This proposed rule does not eliminate any of those
criticized terms. The definitions of the terms ``end item,''
``equipment,'' ``specially designed'' and ``system'' that will apply to
this proposed rule were published in the April 16 (initial
implementation) rule. BIS believes that, with these definitions, the
terms will be sufficiently precise to be widely understood by readers
of the EAR. If, after reviewing the new definitions, readers are
uncertain about their meanings, BIS encourages them to describe the
basis for the uncertainty in their comments to this or any other
relevant proposed rule BIS publishes.
    Although the term ``military use'' was not defined in April 16
(initial implementation) rule, that term is used in the WAML category
ML11 to describe the types of electronics subject to that category.
Additionally, the term ``military application'' is currently used in
USML Category XI to describe the electronics subject to that category.
BIS believes that in practical usage, the phrase ``military use'' is
synonymous with ``military application.'' This proposed rule retains
the term ``military use'' to avoid inadvertent decontrol of items
currently in WAML category ML11 or USML Category XI.
    Comment: One commenter focused on the portion of the note to ECCN
3A611.a that reads: ``3A611.a includes any radar, telecommunications or
computer equipment, end items or systems `specially designed' for
military use that are not enumerated in any USML category or controlled
by a `600 series' ECCN.'' The commenter suggested that this note could
create confusion as to, for example, license requirements for items
controlled under ECCNs 5A002, 5A991 or EAR99. This commenter also
stated that a manufacturer typically will develop a standard prototype
and offer the system in whatever frequency range the customer
specifies. Such systems perform identical functions using identical
technology regardless of whether they are set to operate in a
traditional military or civilian frequency band. Communications systems
for military customers are often assembled with commercial-off-the-
shelf equipment. ECCN 3A611.a should be clarified to enumerate specific
categories of items with particular threshold parameters. This
commenter suggested that ECCN 3A611.a should be modified to exclude
explicitly items that are composed of commercially available
components--similar to the exclusion in USML Category XI(c). This
commenter proposed adding a note to 3A611 that would implement both of
its proposals: ``Note: This ECCN does not control equipment or systems
that are comprised of parts, components, or accessories in normal
commercial use, which operate in a frequency range allocated for
military use.''
    Response: BIS is making no changes to the proposed rule in response
to this comment. Items specially designed for military applications and
that are not described on the USML warrant the degree of control and
government visibility set forth in the 600 series ECCNs. That such
items may be technologically similar to items not specially designed
for military applications misses the point of 600 series controls,
which is to have U.S. government visibility and control over their
export and reexport to various destinations, end users, and end uses of
concern. It is because such items are technologically similar to items
used in commercial applications that their jurisdictional status is
being changed from an ITAR-controlled item to an EAR-controlled item.
BIS also rejects that suggestion that items specially designed for
military applications not be controlled by a military export control if
they are composed of commercially available parts and components.
Regulations that fail to control the export of items with military
applications solely because they can be built from commercially
available components would risk strengthening adversaries' military
capability. Moreover, such a decontrol note would likely lead to
inconsistent interpretations of the EAR as each individual exporter
applies its own interpretation of the term ``commercially available.''
Finally, BIS believes that this commenter is misinterpreting USML
Category XI(c), which first controls components of equipment that is
controlled by Category XI(a) and (b), and then excludes from that
control only those otherwise ITAR controlled parts, components,
accessories, and attachments that are ``in normal commercial use.'' The
State Department has confirmed for BIS that Category XI does not
exclude items specifically designed or modified for military
applications from ITAR control merely because they are made from
components in normal commercial use. Rather, USML Category XI(c)
excludes from control the part, component, accessory, or attachment
itself that is ``in normal commercial use.''
    Comment: One commenter recommended removing the technical
parameters for microwave monolithic integrated circuits (MMIC) and
discrete microwave transistors from ECCN 3A611.c and .d. The commenter
recommended that ECCN 3A611.c and .d should cover microwave monolithic
integrated circuits and discrete microwave transistors specially
designed for military applications and not found in commercial
applications instead.
    Response: BIS is not adopting this recommendation. One of the goals
of the Export Control Reform Initiative is to describe the controlled
items using specific parameters whenever feasible. The text of ECCN
3A611.c and .d in this proposed rule reflects the efforts of the
Departments of Defense, State, and Commerce to tailor the control text
so that it describes the MMIC power amplifiers and discrete microwave
transistors that have significant military application. If we have
described in the proposed text items that are or are likely

to be in normal commercial use, then please provide a comment regarding
such uses and the evidence to support the comment.
    Comment: One commenter noted that MMIC power amplifiers in ECCN
3A001.b.2 have a higher threshold floor operating frequency than MMIC
power amplifier in 3A611.c. The commenter recommended that the 3A611.c
operating frequency threshold floor be raised to at least 3.2 GHz.
    Response: BIS is not adopting this proposal to raise the threshold
floor frequency for MMIC power amplifiers. Although the current
threshold floor frequency for MMIC power amplifiers listed in ECCN
3A001.b.2 is 3.2 GHz, the frequency threshold floor for MMIC power
amplifiers listed in in ECCN 3A982 is 2.7 GHz. The U.S. government has
presented a proposal to the Wassenaar Arrangement to make 2.7 GHz the
threshold floor on the Wassenaar Arrangement Dual-Use List. In this
proposed rule, ECCN 3A611.c and .d are based on that proposal with the
addition of power added efficiency, higher peak saturated power,
increased fractional bandwidth, or some combination of these factors to
limit ECCN 3A611.c and .d. to those MMIC power amplifiers and discrete
microwave transistors that have significant military applications. BIS
encourages comments on the parameters set forth in this proposed rule.
    Comment: One commenter stated that MMICs and discrete microware
transistors with significant military applications operate at
frequencies that fall within the gaps between the operating frequency
ranges listed in paragraph .c and .d of ECCN 3A611 in the November 28
(military electronics) rule.
    Response: There are no gaps between the operating frequency ranges
in ECCN 3A611.c and .d in this proposed rule.
    Comment: One commenter provided extensive comments on the MMIC
amplifiers and discrete microwave transistors in ECCN 3A611.c and .d of
the November 28 (military electronics) rule. Those comments are
summarized below.
     Wireless broadband and mobile carriers operate in the 2.5-
2.7 GHz segment of the S-band frequency range.
     Descriptions of operating frequency thresholds should be
consistent among ECCNs, and recommend the pattern currently in ECCN
3A001 (frequencies exceeding X up to and including Y) as being better
than the pattern in the November 28 (military electronics) rule
(frequencies of X up to and including Y). The commenter stated that the
bottom threshold creates a problem because standard cell phone carrier
equipment typically operates in the range of 2.5 to 2.7 GHz, with a
performance roll off slightly above that frequency. Using ``exceeding''
would prevent 3A611 from capturing a large segment of commercial
products that are currently EAR99.
     A total overlap exists between the frequency ranges for
both MMIC amplifier and transistors in proposed ECCN 3A611 and existing
ECCN 3A982. ECCN 3A611 would add a power added efficiency metric of 30%
and a third unit of measure for power thresholds to the two already
implemented under ECCN 3A982. The result would make ECCN 3A982 entirely
redundant, and make these products ineligible for License Exception
STA, i.e., tightening export controls in these products.
     ECCNs 3A611.c and .d--For tiers exceeding 3.2 GHz,
proposed ECCN 3A611 would encompass the same frequencies currently
covered by ECCN 3A001 (with carve outs in the 31.8 GHz range and for
frequencies exceeding 75 GHz). However, by changing the unit of measure
for the wattage cut-off points from average power to peak power, the
power thresholds would become more restrictive.
     The proposed power thresholds for transistors and MMICs in
ECCN 3A611 bear no direct correlation to military-specific applications
in accordance with the stated intention. By taking the existing
frequency and power thresholds under ECCNs 3A001 and 3A982 and
converting the power unit of measure to a tighter metric, this rule
would have the opposite effect.
     The addition of a power-added efficiency metric to the
transistor and MMIC controls does not lessen the impact of overly
restrictive power thresholds. Most Gallium Nitride (GaN) transistors
and MMICs perform at levels that exceed the proposed power added
efficiency thresholds for 3A611. Accordingly, it does not help to focus
the ECCN on high performance parts, which instead would capture most of
the GaN transistors and MMICs presently used in telecom, backhaul,
point-to-point, and satellite applications.
     Telecom infrastructure providers use wide band gap
products, such as with a frequency range of DC-18 GHz for backhaul
services (telecom providers can take the traffic at a local cell phone
tower back to the switchboard by aggregating the calls).
     The proposed power added efficiency thresholds, as a
function of bandwidth, bear no logical correlation to the way that
discrete microwave transistors and MMIC technologies actually work. The
lower frequencies should correspond with higher power-added efficiency;
as the frequency goes higher, the power-added efficiency should
decrease.
     The proposed power-added efficiency values start at 30%
for the lowest frequency tier, go up to 40%, then go back down to 35%
before hitting 30% again. The commenter believes that these thresholds
are arbitrary and impractical, and proposes alternatives of 60%, 53%,
45%, 30%, 15%, & 10% for HEMTs and 65%, 57%, 50%, 30%, & 15% for MMICs.
     Saturated peak output power is the most appropriate
measure. A peak output power metric would most accurately address
potential concern relating to military importance for parts. This unit
also would eliminate many of the close-to-the-threshold concerns by
providing a more precise measure of power. BIS should adopt peak output
power for all ECCNs that apply to discrete microwave transistors and
MMICs. In particular, the average power metric should be eliminated
from proposed 3A611, 3A001 and 3A982, or at least that term should be
clearly defined in a way that corresponds to peak power.
     The commenter expects a surge in demand for discrete
microwave transistors with a rated peak power of 120 W in the 3.55-3.65
GHz band (currently used by naval radar systems) because of an FCC
proposal to allow small cells/citizens band radio to operate in that
range (78 FR 1188, January 8, 2013).
     The commenter recommended that 3A611 exclude discrete
microwave transistors and MMICs that are specifically designed for
communications in a frequency band allocated by the International
Telecommunications Union, stating that similar language is used in ECCN
3A001.
     Proposed 3A611 would expand controls on several commercial
parts that are, and should continue to be, 3A001 or EAR99. Similar
parts are available without license restrictions from UMS (Germany),
Mitsubishi (Japan), Toshiba (Japan), and Sumitomo (Japan).
     Increasing controls on parts that currently are available
without restriction, and creating ambiguity among proposed ECCN 3A611
and existing ECCNs 3A001 and 3A982, would create an unlevel playing
field for U.S. manufacturers and jeopardize thousands of high paying
jobs.
     This commenter urged removal of discrete microwave
transistors and MMICs from proposed 3A611

altogether, because proposed control thresholds overlap with existing
controls on the CCL. Alternatively, if they are to remain in 3A611, the
commenter stated that BIS should tailor the provisions narrowly so that
they apply only to a limited range of products that truly are specially
designed for military use, with no potential commercial applications in
the designated power, frequency, and efficiency ranges. There should be
a logical progression from ECCNs 3A001 to 3A983 to 3A611. Additionally,
the units of measure should be harmonized for all three ECCNs.
    Response: BIS has substantially revamped the criteria for proposed
ECCNs 3A611.c and .d in this proposed rule compared to the November 28
(military electronics) rule, in an effort to tailor these paragraphs to
apply to MMIC power amplifiers and discrete microwave transistors that
have significant military applications. These changes are also intended
to avoid controlling MMIC power amplifiers and discrete microwave
transistors that have significant civil applications, which will remain
in ECCNs 3A001 and 3A982. Furthermore, The U.S. government has
presented a proposal to the Wassenaar Arrangement to modify the
Wassenaar Arrangement Dual List parameters for MMIC power amplifiers
and discrete transistors. These proposed modifications are being
evaluated and would align controls among ECCNs 3A001, 3A982, and 3A611
and prevent overlap.
    In this proposed rule, paragraph .c would control MMIC power
amplifiers and paragraph .d would control discrete microwave
transistors, as was the case in the November 28 (military electronics)
rule. As recommended by this commenter, frequency ranges are expressed
in the form ``frequencies exceeding X up to and including Y'' for all
subparagraphs of both paragraphs .c and .d.
    The MMIC power amplifiers subject to paragraph .c would be
described in 13 subparagraphs. Each subparagraph would apply to a
specified operating frequency range, starting with subparagraph .c.1,
which would apply to MMIC power amplifiers with operating frequencies
exceeding 2.7 GHz up to and including 2.9 GHz, and increasing with each
paragraph to paragraph c.13, which applies to MMIC power amplifiers
with operating frequencies exceeding 110 GHz. Each subparagraph would
be further defined by the peak saturated power output value that the
MMIC power amplifiers must exceed to be included within that paragraph.
Fractional bandwidth and power added efficiency would further define
the MMIC power amplifiers controlled by some of the subparagraphs. The
terms ``average power output,'' ``pulse power output,'' and ``duty
cycle,'' would not be used to describe the MMIC power amplifiers in
paragraph .c.
    The Departments of Defense, State and Commerce identified these
parameters as describing the MMIC power amplifiers that are
sufficiently important to military applications to justify control
under a 600 series ECCN. BIS believes that when the EAR are read
according to the order of review published in the April 16 (initial
implementation) rule, any apparent overlap between the MMIC power
amplifiers listed in proposed ECCN 3A611 and those listed in ECCNs
3A001 or 3A982 would be unambiguously resolved, and that only those
MMIC power amplifiers with significant military application would be in
ECCN 3A611.c. BIS welcomes comments on whether such is, in fact, the
case.
    The discrete microwave transistors subject to paragraph .d are
described in 12 subparagraphs. Each subparagraph applies to a specified
operating frequency range starting with subparagraph .d.1, which
applies to discrete microwave transistors with operating frequencies
exceeding 2.7 GHz up to and including 2.9 GHz, increasing with each
paragraph to paragraph c.12, which applies to discrete microwave
transistors with operating frequencies exceeding 75 GHz. Within each of
the first 11 subparagraphs peak saturated power output and power added
efficiency further define the discrete microwave transistors to which
paragraph .d would apply. In the twelfth and final subparagraph, only
peak saturated power output further defines the controlled discrete
microwave transistors. BIS and the Departments Defense, State and
Commerce identified these parameters as describing the discrete
microwave transistors that are sufficiently important to military
applications to justify control under a 600 series ECCN. BIS believes
that when the EAR are read according to the order of review published
in the April 16 (initial implementation) rule, any apparent overlap
between the transistors listed in proposed ECCN 3A611 and those listed
in ECCNs 3A001.b.3 or 3A982 can be unambiguously resolved and that only
those discrete microwave transistors with significant military
application would be in ECCN 3A611.d. BIS welcomes comments on whether
such is, in fact, the case.
    Comment: One commenter stated that the description in 3A611.d
``discrete radio frequency transistors'' should be the same as ECCN
3A001.b.3 ``discrete microwave transistors.''
    Response: The preamble to the November 28 (military electronics)
rule used the phrase ``discrete radio frequency transistors,'' whereas
the regulatory text used the phrase ``discrete microwave transistors.''
This proposed rule uses the latter phrase in the preamble.
    Comment: One commenter stated that discrete microwave transistors
in 3A611.d have a higher operating frequency than those in 3A001.b.3.
This commenter recommended that threshold floor operating frequency in
3A611.d be raised to at least 3.2 GHz.
    Response: This second proposed rule would not raise the operating
frequency threshold floor for discrete microwave transistors as
compared to the November 28 (military electronics) rule. Although the
current threshold floor frequency for power transistors listed in ECCN
3A001.b.3 is 3.2 GHz, the frequency threshold floor for transistors
listed in in ECCN 3A982 is 2.7 GHz. The U.S. government has presented a
proposal to the Wassenaar Arrangement to make 2.7 GHz the threshold for
coverage on the Wassenaar Arrangement Dual Use List. In this proposed
rule, ECCN 3A611.d is based on that proposal with the added factor of
power added efficiency, or peak saturated power, or some combination
thereof, to identify discrete microwave transistors that have
sufficient military significance to warrant inclusion in a 600 series
ECCN. BIS encourages comments on the parameters in this proposed rule.
    Comment: One commenter stated that proposed ECCN 3A611.e duplicates
equipment proposed to be classified under Category XI(a)(2)(v) and
(vi). The commenter urged the Departments of State and Commerce to
specify exactly what is proposed for each list either by name or
discrete technical parameters.
    Response: BIS believes that the commenter was referring to proposed
Category XI(a)(3)(v) and (vi), which address radars, as does ECCN
3A611.e. (The Department of State's November 28 (military electronics)
rule did not contain a Category XI(a)(2)(v) or (vi)). This second
proposed rule and the proposed rule being published simultaneously by
the Department of State include revisions to proposed Category
XI(a)(3)(v) and ECCN 3A611.e to more precisely describe each than was
done in BIS's and State's November 28 (military electronics) rules.
Under the order of review published in the April 16 (initial
implementation) rule, if

an item meets the specific parameters of a USML category, it is
classified under that category, and one need not refer to the CCL. BIS
believes that the revised text in this second proposed rule, combined
with the order of review, removes any ambiguity that may have existed
in the November 28 (military electronics) rule.
    Comment: Several commenters addressed the originally proposed ECCN
3A611.f, which applied to microelectronic devices or printed circuit
boards produced at a trusted foundry, trusted source or trusted
supplier accredited by the Defense Microelectronics Activity (DEMA).
One commenter stated that this paragraph would be a positive move that
would clearly define the articles covered. Other commenters perceived
problems with the paragraph. Those perceived problems were: the
paragraph appeared to be a delegation by BIS of a Department of State
classification authority to the DEMA; the rule provided no guidance as
to how to validate a supplier's accreditation; the paragraph would
control items not necessarily made for military use if they were
trusted devices; and DEMA accredits various facilities for a variety of
functions relating to production and testing--the rule needs clarifying
language on this point.
    Response: Upon review, the Department of Defense concluded that all
of the items in proposed 3A611.f that would be appropriate for ``600
series'' ECCN classification can be fully covered elsewhere in 3A611 or
other ``600 series'' ECCNs. Therefore, this re-proposed rule does not
mention microelectronic devices or printed circuit boards produced at a
trusted foundry, trusted source or trusted supplier accredited by DEMA.
    Comments: One commenter stated that the .x concept in the 600
series is confusing and would frustrate users attempting to classify
parts correctly. This commenter also stated that the .x control did not
clearly align jurisdictional status of software and technology with the
items to which they relate. This commenter suggested that confusion
could be reduced by revising the first two related control notes in
ECCN 3A611 to read, ``(1) Electronic items that are BY THEMSELVES
enumerated . . . .'' and ``(2) Electronic items `specially designed'
for military end us that are not BY THEMSELVES controlled within any
USML category but are within the scope of another `600 series' ECCN . .
. .''
    Another commenter stated that 3A611.x includes parts, components,
accessories and attachments ``specially designed'' for military end use
that are neither enumerated in any USML category nor another ``600
series'' ECCN. The commenter stated that it is not clear that there are
any such parts, components, accessories and attachments. The commenter
noted that electronics are often found in other end-items, and as such
would be controlled under the ECCN for the end-item, and that the
proposed language is not required and needlessly complicates the CCL.
    Response: This proposed rule would continue to use the ``.x''
concept. The April 16 (initial implementation) rule specifies an order
of review and provides a definition of the term ``specially designed.''
BIS believes that these provisions, read together, would make clear
that a part, software, or technology for a commodity, unless
specifically enumerated elsewhere on the USML or CCL, is treated for
purposes of EAR license requirements as a part of that component rather
than as a part of an end-item into which the component will be
installed. The specially designed definition provides greater clarity
as to which parts and components are specially designed for commodities
on the CCL.
    Moreover, listing in ECCN 3A611 every single specially designed
part or component of every piece of military electronic equipment found
on the USML or in ECCN 3A611 would make the ECCN long and cumbersome.
Some catch-all license requirements, as currently exist on the USML,
are needed to provide the United States Government with visibility into
the disposition and use of military equipment around the world.
Finally, there are many types of electronic components specially
designed for military items that would not be controlled under other
600 series items.
    BIS welcomes further comments on whether the definition of
``specially designed'' and the order of review add clarity and
certainty to the process of classifying parts for military electronics.

Comments on ECCN 3A611.y and .y Paragraphs Generally

    Comment: One commenter expressed a belief that placing the .y
paragraphs in separate ECCNs would lead to inconsistent
classifications. That commenter offered several examples from various
BIS proposed rules, e.g., indicator lights for commodities in some
ECCNs would be in the .y paragraph, but not in other ECCNs that apply
to items that have indicator lights. This commenter asserted that the
multiple .y paragraphs would create an unnecessary classification
burden. This commenter recommended a single list of all .y items. (The
only CCL reason for control that applies to items in the .y paragraphs
of 600 series ECCNs is antiterrorism. Such items are also subject to
the China military end-use requirement.)
    Response: Although this second proposed rule continues to list
separate ECCN-specific .y paragraphs, BIS is considering four options
to address items of limited military significance, and would like
additional public comments on the desirability of each alternative.
Those options are: (1) Creating separate ECCN-specific .y paragraphs;
(2) creating a single list of 600 series items subject only to
antiterrorism and China military end-use license requirements; (3)
establishing a classification request procedure whereby a 600 series
item could be designated as subject to only antiterrorism and China
military end-use license requirements, but eliminating the .y listings
from the regulations; or removing all .y lists completely. In
evaluating the desirability of each option, commenters should bear in
mind that the .y designation indicates that the Departments of Defense,
State and Commerce have agreed that a specified item is of such limited
military significance, for almost all destinations, that the U.S.
government need not attempt to control access to items or monitor their
distribution to obtain visibility into supply chains necessary to keep
military equipment functioning. Each option presents different
advantages and disadvantages.
    Creating separate ECCN specific .y paragraphs would allow BIS to
tailor the controls most precisely, but would also produce the most
complex and lengthy regulations. Control over a commodity designed for
a military ground vehicle might provide less visibility into relevant
supply chains than would control over that same type of commodity for a
submarine or surface vessel of war. A single .y list would make the
regulation of insignificant military items shorter and less complex,
but likely would contain fewer items than separate .y paragraphs. Such
a list would need to be a lowest common denominator list equally
relevant to all parts for all types of military end items, from
military trucks to advanced submarines. Only those items that do not
provide useful visibility into the relevant supply chain for any 600
series ECCN or USML category could be included in such a list. A case-
by-case classification process would likely produce the simplest and
shortest regulations; it could also tailor .y status

to very specific items. However, the classification process likely
would be time consuming and, because classifications are not published
by BIS, the results would not be as widely distributed as would a list
or lists in the EAR. Removing all .y lists completely. This would have
the benefit of substantially simplifying and shortening the relevant
ECCNs and leaving to one paragraph--the .x paragraphs--the controls
over non-enumerated parts, components, accessories, and attachments.
The downside to this option would be substantial over-control on
insignificant items.
    Comment: Some commenters expressed concern about controlling
commodities of little or no military significance in 3A611.y. One
commenter thought that such items could be controlled in existing
ECCNs. Another commenter suggested that paragraph .y might cause
confusion with items controlled under other categories, and might
increase controls on items already classified as EAR99. One commenter
recommended that three specific commodities: Electrical connectors,
electrical connector backshells, and waveguides, would be more
appropriately controlled in a non-600 series ECCN because of their
commercial applications.
    Response: Commodities proposed for ECCN 3A611.y are currently
controlled in the catch-all paragraph XI(c) on the USML. BIS has not
proposed moving any EAR99 items and is proposing to move only items
controlled by other than -018 ECCNs or ECCN 0A918 into the 600 series
ECCNs. Although commodities with the same or a similar name, e.g.,
``electric fans,'' may be controlled under other ECCNs or may be EAR99,
the distinguishing factor that makes a commodity subject to 3A611.y is
that it is both ```specially designed' for a commodity in ECCN 3A611
and not elsewhere specified in the CCL (revised to read ``not elsewhere
specified in a 600 series ECCN'' in this proposed rule--see explanation
below). Items that are specified in a non- 600 series ECCN (other than
those ending in ``018,'' all of which are expected to be subsumed into
the 600 series in the course of the Export Control Reform Initiative)
would not be specifically designed for the military electronic
equipment in 3A611. Items that are specially designed need some measure
of control and for consistency that control should be in a 600 series.
Readers should review the final definition of ``specially designed''
(cited above) in evaluating paragraph .y in this proposed rule.
    Comment: Some commenters recommended adding some commodities to
3A611.y because they believed that the commodities have commercial
application or perform the same function in military equipment as they
do in commercial applications. The items proposed for addition were:

 Crystals and crystal oscillators used a components in articles
enumerated under USML Category XI
 Cross-field amplifiers, inductive output tubes
 Optical and electrical cables, and harnesses
 Capacitors, crystals oscillators, diodes
 Electrical sockets, optical connectors
 Inductors
 Relays, resistors
 Optical connector backshells
 Optical switches
 Laser and optical terminals
 Digital signal processors
 Power supply
 Passive microwave components
 Telecom receivers and transmitters

    Response: This proposed rule does not add any items to the .y
paragraphs that did not appear in the November 28 (military
electronics) rule. Based on the responses to the question whether to
modify or even maintain the .y list as proposed. BIS will consider
whether to add more items to a .y structure. The public is encouraged
to provide justification why particular types of items, regardless of
how they would be modified for any military item, are nonetheless so
insignificant as to not warrant more than AT-only controls.

Comment on ECCN 3B611

    Comment: One commenter noted that BIS originally stated that ECCN
3B611 is intended to align with WAML category ML18. This commenter
recommended including the WAML category ML18 note listing the equipment
subject to this control in ECCN 3B611.
    Response: BIS is not adopting this recommendation. ECCN 3B611
applies to test, inspection and production equipment for military
electronics. WAML category ML18 applies to such equipment for items on
the WAML in general. Note 2 to WAML category ML18 lists examples of
production and test equipment for a wide range of items on the WAML,
but none of the examples relates specifically to production or testing
of military electronics. Therefore, BIS believes that adding that list
to ECCN 3B611 would be less helpful than suggested.

Comment on ECCN 3D611

    Comment: One commenter recommended that ECCN 3D611 be revised for
consistency with the EAR interpretation of ``use,'' i.e., all six
elements of the term use must be present for the software to be
controlled as ``use'' software. Alternatively, the commenter
recommended limiting ECCN 3D611 to software for development and
production. The commenter thought the proposed rule language may cause
confusion and result in a ``roll-back'' from BIS's prior
interpretation. See 71 FR 30840, 30843 (May 31, 2006).
    Response: BIS is not adopting either of these recommendations. The
Federal Register notice to which the commenter referred interpreted the
adjective ``use'' as it applied to software and technology on the CCL
prior to the creation of the 600 series ECCNs. Nearly all of the
software and technology in existing and proposed 600 series ECCNs comes
from USML categories. One goal of the US government in the Export
Control Reform Initiative is not to decontrol completely and
inadvertently items the President determines no longer warrant control
on the USML. BIS believes that the formulation in ECCN 3D611 in the
November 28 (military electronics) rule, controlling ``software
`specially designed' for the `production,' `development,' operation or
maintenance . . .'' achieves this objective.

Comments on ECCN 3E611

    Comment: One commenter stated that the following phrase in ECCN
3E611.a ``Technology'' (other than that described in ECCN 3E611.b or
3E611.y) not otherwise enumerated in this ECCN . . .'' was redundant.
    Response: BIS agrees. The phrase ``not otherwise enumerated in this
ECCN'' . . .'' does not appear in ECCN 3E611.a of this proposed rule.
    Comment: One commenter noted that paragraph .b of ECCN 3E611 in the
November 28 (military electronics) rule lists technology for helix
traveling wave tubes, transmit/receive modules, MMICs and discrete
radio frequency transistors. However, nothing in this paragraph would
limit its scope to technology for commodities and software in ECCNs
3A611, 3B611 or 3D611. This omission gives the impression that 3E611
controls technology for commodities and software in non-600 series
ECCNs, which is inconsistent with the wording in the preamble. See 77
FR 70947 (November 28, 2012). The commenter suggests removing paragraph
.b and the reference to paragraph .b that was in the parenthetical in
paragraph .a as a way to eliminate the problem.
    Response: BIS agrees that the technology in ECCN 3E611.b should not
apply beyond helix traveling wave tubes, transmit/receive modules,
MMICs

and discrete microwave transistors covered by ECCN 3A611, and this
proposed rule modifies ECCN 3E611.b to that effect. This proposed rule
does not adopt the commenter's suggestion to eliminate paragraph .b.
Paragraph .b is needed because use of License Exception STA is limited
to ``build-to-print'' technology with respect to the items listed in
paragraph .b. No such limitation applies to paragraph .a.
    Comment: One commenter noted that proposed ECCN 3E611 applied to ``
`technology' `required' for the `development,' `production,' operation,
installation, maintenance, repair, or overhaul of . . . .'' and
proposed replacing that phrase with the phrase `` `technology'
`required' for the `development,' `production,' operation,
installation, maintenance, repair, and overhaul of . . .'' or with the
word ``use.'' The commenter noted that its recommended change would
make ECCN 3E611 consistent with other technology ECCNs in which the
word use indicates that the software must perform all six functions to
be covered.
    Response: BIS is not making this change. As described above, BIS is
revising 3E611 to include all six elements.
    Comment: One commenter noted BIS's December 6 (military vehicles)
rule (See 76 FR 76085 (December 6, 2011)), which stated that BIS was
considering recommendations to ``limit the controls on form, fit, and
function data needed to provide military insignificant items for
military vehicles to the antiterrorism reason.'' This commenter
recommended that the rule make clear that ECCN 3E611 does not control
information about automotive electronics that is outside the scope of
ECCN 0E606, nor does it control information about automotive
electronics that is controlled by ECCN 0E606, because that information
relates to an item controlled by ECCN 0A606.y. This commenter also
noted that manufacturers of commercially available automotive
electronics may employ people from a number of countries. If
information about minor adaptations to widely commercially available
components must be kept from foreign employees, or licenses are
required to share such information with foreign employees, compliance
costs would be significant, resulting in higher costs for the U.S.
military. The commenter reiterated the definition of specially designed
that it provided in response to the proposed rule entitled ```Specially
Designed' Definition'' (77 FR 36409, June 19, 2012) as an alternative
to its specific proposal that ECCN 3E611 should not control information
controlled by ECCN 0E606.
    Response: The Related Controls paragraph of ECCN 3A611 in this
second proposed rule contains the following statement ``Electronic
components not enumerated on the USML or another 600 series entry that
are `specially designed' for a military vehicle controlled by USML
Category VII or ECCN 0A606 are controlled by ECCN 0A606.x.''
Additionally, the final definition of ``specially designed,'' in the
April 16 (initial implementation) rule, excludes certain named parts
and components, parts and components that are identical to parts and
components used in civil items that are in production or that differ
from items only with respect to fit. It also excludes parts and
components where documentation contemporaneous with development
indicates the part or component was designed for a civil item or for no
specific item. BIS welcomes comments on the impact of that definition
on the provisions of this proposed rule.
    Comment: One commenter expressed approval of using the word
``required'' in ECCN 3E611, because it serves to focus the controls on
critical technology and is well understood by exporters.
    Response: BIS agrees. The term ``required'' is based on the
Wassenaar Arrangement general technology note and is used in technology
ECCNs throughout the EAR to focus the scope of the control.
    Comment: One commenter questioned whether the reference to ``Sec.
746.3 (Iraq)'' is needed in note 1 in ECCN 4A003.
    Response: The reference to Sec.  746.3 (Iraq) is currently in note
1 in ECCN 4A003. The note indicates that certain transactions that do
not require a license for many destinations do, however, require a
license pursuant to Sec.  746.3 of the EAR for destinations in Iraq. It
is unrelated to the purpose of the proposed revisions to ECCN 4A003 in
the November 28 (military electronics) rule, which was to impose the
missile technology (MT Column 1) reason for control on analog-to-
digital converters in 4A003.e that meet or exceed the parameters of
ECCN 3A101.a.4. Therefore, BIS is not making any changes to the text of
proposed ECCN 4A003 as a result of this comment.
    Comment: One commenter stated that ECCN 5A001.f and .h duplicate
items found in proposed USML Category XI(a)(4)(iii), and recommended
that the overlap be resolved before releasing a final rule.
    Response: The proposed Department of State rule being published
simultaneously with this proposed rule contains a note to USML Category
XI(a)(4)(iii) stating that ``Paragraph XI(a)(4)(iii) does not control
mobile telecommunications jamming equipment determined to be subject to
the EAR via a commodity jurisdiction determination . . . .'' BIS
believes that the commodity jurisdiction process will effectively
resolve the overlap that this commenter perceived and is, therefore,
not making any changes to the text of ECCN 5A001.f and .h in this
proposed rule.
    Comment: One commenter stated that changes proposed to USML
Category XI(b) would complicate the classification of equipment
currently classified in 5A001.i and 5A980, and recommended that both
rules be revised to create jurisdictional ``bright lines'' and
``positive lists'' of the equipment controlled in each list as intended
by the Export Control Reform Initiative.
    Response: BIS believes that the USML Category XI(b) as set forth in
the proposed Department of State rule being published simultaneously
with this proposed rule, along with the order of review in the April 16
(initial implementation) final rule published by BIS (See 78 FR 22735,
April 16, 2013), will provide certainty as to which agency has
jurisdiction over which articles. Under the order of review, items
enumerated on the USML are subject to the ITAR, even if they are within
the parameters of an ECCN. Accordingly, BIS is making no changes to
ECCNs 5A001.i or 5A980 as a result of this comment. However, if upon
review of the Department of State text in light of the ``order of
review,'' readers believe uncertainty still exists, BIS will consider
comments to that effect. In addition, BIS invites recommendations from
the public regarding text that would provide a clear distinction
between the items controlled by USML Category XI(b) and items
controlled by ECCN 5A001.i or 5A980.
    Comment: One commenter stated that the ``Reason for Control'' table
in ECCN 7A006 indicates that MT controls apply to commodities that meet
or exceed the parameters of 7A106. It appears that, by definition, all
items in 7A006 meet or exceed the parameters of 7A106; therefore this
language should be removed.
    Response: BIS believes that this language is needed because of the
longstanding order of review of non-600 series ECCNs, wherein one
reviews ECCNs within a category in order. ECCNs with a 0 as the third
character follow the Wassenaar Arrangement Dual Use List text. ECCNs
with a 1 as the third character generally follow the MTCR text. When
the two regimes have

identical text about a particular item, the MT reason for control is
included in an ECCN with the 0 as the third character. However, when
the MTCR text differs from the Wassenaar Arrangement Dual Use List
text, the reference to the parameters of the MTCR based ECCN are used
to identify items in the text of the ECCN with the 0 as the third
character to be precise. This system is used throughout the EAR.
Therefore, BIS is making no changes in response to this comment.

Comments Concerning License Exception STA

    Comment: Some commenters noted that exports under STA are likely to
be in support of foreign defense programs. One commenter recommended
the proposed language for the License Exception STA consignee statement
set forth in the June 21 (transition) rule (See 77 FR 37541, June 21,
2013) be revised to include the following underscored language: ``(vi)
For `600 series' items, confirms that unless otherwise authorized by
the U.S. government, the items are for end use by a government of a
country listed in Sec.  740.20(c) . . . .'' The Commenter cited the
example of a European-built military transport aircraft that contains
some US-origin parts and components. Some of the aircraft would be sold
to governments eligible to receive items under STA, while others would
be sold elsewhere. Neither the U.S. supplier nor the foreign
manufacturer would have any way of knowing which parts would go into
aircraft for eligible governments and which would not and, thus, under
BIS's proposed language, could not use STA. This commenter appeared to
contemplate a situation in which the consignee could apply for a
license to use parts already received under License Exception STA in
connection with an activity or end-user not authorized by License
Exception STA.
    One commenter proposed allowing use of STA based on the consignee's
assurance that the appropriate U.S. government authorization would be
obtained before sending the item outside the STA eligible countries.
Another commenter proposed allowing some kind of use of STA on a
program basis.
    Response: BIS intends that the U.S. government will have authority
to license shipments under STA that will not be limited to the end
users specified in Sec.  740.20(c). Under the April 16 (initial
implementation) rule, the U.S. government could issue a license
authorizing the use of License Exception STA to ship to a consignee
parts that would ultimately be incorporated into items that will be
used by end-users not otherwise be eligible to receive 600 series end
items. BIS did not intend to require that the license explicitly
mention License Exception STA. BIS intends to publish a correction rule
so that any license issued to the STA consignee authorized the end use,
could be a basis for authorizing an export, reexport or transfer to
that consignee under License Exception STA of items otherwise eligible
for transfer under License Exception STA.
    The consignee would have to obtain the license prior to any
shipment of parts to it under License Exception STA because the
consignee would have to furnish a copy of the license to the exporter
before the exporter could ship under License Exception STA. If after
the consignee received parts under License Exception STA, the consignee
learned that those already received parts are needed for an item being
produced for an end user other than one authorized under STA, that
consignee could still apply to the U.S. government for a license to use
those parts in such production, notwithstanding the language about end
use in the consignee's prior statement. BIS does not intend to preclude
STA consignees from requesting a new or expanded authorization based on
facts of which the consignee was unaware at the time it made the
original statement. BIS does not believe that a change in the
regulatory text is needed to make this point. BIS is interested in
comments on whether the approach described in the initial
implementation rule is feasible and addresses the point of the comment.
    Comment: One commenter expressed general approval of License
Exception STA and recommended more outreach to increase understanding
and use of it.
    Response: BIS is developing outreach programs to address this need.
    Comment: One commenter recommended that, provided security needs
are adequately addressed, the number of eligible STA destinations
should be increased.
    Response: Although the number of License Exception STA eligible
destinations may grow or shrink over time, expanding the geographic
scope of License Exception STA is not a part of this rulemaking
exercise, which is concerned with adding to the CCL items that the
President determines no longer warrant control under the USML.
    Comment: One commenter recommended that BIS eliminate the STA
consignee statement entirely (or at least to NATO countries) to
significantly ease the administrative burden on industry when using
this exception. The commenter asserted that this statement is similar
to the DSP-83 ``Nontransfer and Use Certificate'' form, which is
required currently for Significant Military Equipment (SME) but not for
the non-SME articles in Category XI(c). Most of the items would be
moved to the CCL 600 series under the proposed rule are not SME.
    Response: BIS is not adopting this recommendation. Use of the STA
consignee statement can readily be distinguished from use of the DSP-
83. The consignee must send the STA consignee statement to the exporter
as one of the requirements that the parties to the transaction must
meet in order to be able to execute the transaction without prior US
government approval. The DSP-83 is a document that must be submitted to
the US government in support of an application for a government
authorization to proceed with the transaction. The STA consignee
statement is required for all transactions under License Exception STA.
Although statements for 600 series items have more elements than
statements for non-600 series items, those additional elements reflect
the limitations on use of License Exception STA that are appropriate
given the military nature of the 600 series items. This STA consignee
statement is necessary to provide reasonable assurance that the
consignee is aware of the requirements and limitations of License
Exception STA, and has agreed to abide by them before the parties are
permitted to proceed with a license-free transaction. The alternative
is to apply for a license, which parties are free to do.
    Comment: One commenter stated that making ECCN 3A611.c and d. high
electron mobility transistors (HEMT)s and microwave monolithic
integrated circuits (MMIC)s ineligible for License Exception STA would,
when combined with the NS1 and RS1, impose a license requirement for
all destinations other than Canada, making these commodities controlled
as if they were subject to the ITAR. The commenter noted that
commodities in ECCN 3A001 and HEMTs in ECCN 3A982 are both eligible for
STA.
    Response: The November 28 (military electronics) rule and this
second proposed rule would make all commodities controlled in ECCN
3A611 ineligible for paragraph (c)(2) of License Exception STA (which
authorizes shipments to eight countries), but would not preclude use of
paragraph (c)(1) of STA (which authorizes shipments to 36 countries).
    Comment: One commenter stated that two of BIS's prior proposed
Export Control Reform Initiative rules (the

November 7 (aircraft) and the December 6 (gas turbine engine) rules)
would preclude use of License Exception STA for electrical equipment,
parts, and components specially designed for electro-magnetic
interference (EMI) that conform to the requirements of MIL-STD-461. The
commenter stated that this preclusion raises two difficulties. First,
the distinction between electric and electronic parts and components is
often unclear and that they may be ambiguously classified. The
commenter also stated that this difficulty made it appropriate to raise
the issue in a comment on the November 28 (military electronics) rule.
Second, the commenter stated that standard MIL-STD-461 is a poor
criterion for determining when items designed for EMI compatibility
should be restricted from STA eligibility or subject to any reasons for
control other than anti-terrorism because: (1) There are several
historical versions of MIL-STD-461 that remain in effect for existing
programs; (2) A number of civil requirements offer performance equal to
or superior to MIL-STD-461; and (3) Military programs outside the
United States may use multinational or foreign standards. The commenter
states that a better criterion would be a degree of EMI protection
exceeding the equivalent civil requirements for the item.
    Response: BIS believes that the commenter misunderstood the scope
of the rules. The rules cited by the commenter proposed restricting
from STA software and technology for the development or production of
aircraft electrical equipment, parts and components electrical
equipment, parts, and components specially designed for electro-
magnetic interference (EMI) that conform to the requirements of MIL-
STD-461. They did not propose restricting from STA the equipment, parts
and components themselves. The April 16 (initial implementation) rule
published these restrictions in ECCNs 9D610 and 9E610 (See 78 FR 22733-
22734, April 16, 2013).
    Comment: One commenter provided two sets of comments. The first set
provided detailed proposals for rewording USML Category XI and a number
of ECCNs as they appeared in the November 28 (military electronics)
rules of the Departments of State and Commerce. The second set proposed
detailed rewording of a number of ECCNs and the creation of some new
ECCNs in Category 9 of the CCL.

First Set of Comments

    The commenter divided the proposals in his first set of comments
into three topics, which he characterized as edits to remove: Overlaps
in BIS's and State's November 28 (military electronics) rules that
would move items from the CCL to the USML; ambiguities in the November
28 [Commerce] rule; and other CCL ambiguities that the commenter
perceived to be relevant.

Instances in Which the Commenter Expressed a Belief That the Rule Would
Transfer Items From the CCL to the USML

    The commenter identified 18 instances in which he asserted that
overlapping text would have the effect of transferring items from the
CCL to the USML. BIS is not adopting any of the specific changes
proposed by the commenter under this topic. In some instances, the
commenter proposed only changes to the USML and not to the CCL. In
other instances, the comment appeared to reflect an incomplete reading
of either the USML or CCL entries such that detailed technical
specifications were interpreted without consideration of introductory
text that limited the overall range of the items to which the technical
specifications applied. BIS does not believe that the November 28
(military electronics) rule or this proposed rule would transfer any
items from the CCL to the USML. BIS invites comments that describe
specific examples of actual items that are today subject to the EAR
that would become subject to the ITAR were this and the corresponding
State proposed rule to become final.

Instances in Which the Commenter Expressed a Belief That the Rule
November 28 (Military Electronics) Rule Was Ambiguous

    The commenter cited about 50 situations in which he thought the
rule was ambiguous and needed changes for precision. In most instances,
BIS either does not agree that the proposed text cited by the commenter
was ambiguous or believes that the comment addressed text that is
outside the scope of the proposal. However, in four instances, this
proposed rule adopts changes recommended by this commenter.
    The four instances in which this second proposed rule adopts
changes from the November 28 (military electronics) rule in response to
the comments proposed by this commenter are:
     Adding the phrase ``or software'' to paragraph .y of ECCN
3E611. Paragraph .y of ECCN 3E611 applies to technology for 3A611.y and
3D611.y. ECCN 3A611 applies to commodities and ECCN 3D611 applies to
software. Use of the term ``commodities'' to apply to technology for
both ECCNs in the November 28 (military electronics) rule was in error.
     Adding the word ``acoustic'' to the list of items in the
note to ECCN 3A611.a and note 1 to 3A611.x. These notes describe in
general terms the items that if not enumerated on the USML or another
600 series ECCN, are controlled by ECCN 3A611. Adding the word
``acoustic'' makes the listing more comprehensive.
     Adding the phrase ``Acoustic systems and equipment'' to
the header of ECCN 6A611. In the November 28 (military electronics)
rule, ECCN 6A611 referred readers to ECCN 3A611 for radar and related
items specially designed for military use. The reference was included
because CCL Category 6 controls a number of other radars. ECCN 3A611
would control acoustic systems and equipment specially designed for
military use that are not on the USML or any other 600 series ECCN and
other acoustic systems and equipment also in Category 6 of the CCL.
Including the additional phrase will make ECCN 6A611 more descriptive
and comprehensive.
     Adding a new ECCN 7A611 that only refers readers to ECCN
3A611 for navigation and avionics, parts, components, accessories and
attachments ``specially designed'' for military use that are not
enumerated in any USML category or other ``600 series'' ECCN. ECCN
3A611 applies to military electronic avionic and navigation devices not
enumerated on the USML or in another 600 series ECCN. Because CCL
Category 7 applies to such devices not specially designed for military
use, the cross-reference will be helpful to alerting readers to check
ECCN 3A611.
    This proposed rule did not adopt the following proposals of this
commenter.
    Comment: Indicate in the foregoing cross-reference ECCNs that ECCN
3A611 does not control radar, acoustic systems and equipment,
computers, telecommunication equipment or navigation and avionics and
related items if controlled by any other ECCN, including non-600 series
ECCNs. Apply ECCN 3A611 to commodities that are specially designed for
military use.
    Response: Commodities in non-600 series ECCNs (other than ECCNs
ending in ``018'' and ECCN 0A918) are not specially designed for
military use, so there should be no overlap between ECCN 3A611 and non-
600 series ECCNs. Moreover, the April 16 (initial implementation) rule
created an order of review that gives 600 series ECCNs preferences over
non-600 series ECCNs. Adopting the commenter's proposal

would appear to undermine that order of review.
    Comment: Replace the term ``specially designed'' with ``required''
in several ECCNs covering software. The term ``required'' as a well-
defined meaning in the EAR that is based on a Wassenaar Arrangement
definition. That term is defined in relation to technology rather than
software.
    Response: BIS believes that the term ``specially designed'' as
defined on the April 16 (initial implementation) rule provides
reasonable, practical and objective criteria for classifying products,
the term ``required'' as currently defined would exclude many parts and
components that are in fact designed for military items and that have
no other practical use.
    Comment: Do not use the term ``specially designed'' in instances
where the Missile Technology Control Regime uses the word ``designed.''
Generally, the commenter recommended that no word replace the phrase
``specially designed,'' on the ground that the specifications in the
ECCN are sufficiently precise that no qualifier is needed.
    Response: BIS believes that the term specially designed as defined
in the April 16 (initial implementation) rule is adequate to meet its
MTCR obligations.
    Comment: Replace the term ``operation or maintenance'' with the
term ``use'' in several software ECCNs.
    Response: BIS has adopted the phrase `` `development,'
`production,' operation or maintenance'' as a standard practice in 600
series ECCNs. The commenter suggested no persuasive reason to change
this policy.
    Comment: Remove the term ``directly related'' and, in some
instances, replace it with the word ``required'' in the several
``Related controls'' notes of software and technology ECCNs.
    Response: The related control notes at issue refer readers to the
USML for controls on ``technical data'' (which, on the USML, includes
both software and technology) that is similar to the software or
technology covered by that ECCN. The USML uses the term ``related to''
in describing the objects to which those technical data apply. In these
cross-references to the USML, using the USML terminology is
appropriate.
    Comment: Do not use the phrase ``technical data,'' except in its
meaning as defined in part 772 of the EAR.
    Response: The specific uses of the term ``technical data'' to which
this commenter objected are references to the USML. In that context,
the term is used in a way that is consistent with its meaning in the
USML. The term is not surrounded by quotation marks, which would
signify that it is defined in part 772.
    Comment: Replace the word ``and'' with the word ``or'' in the
definition of ``use'' in the EAR.
    Response: This proposal would affect every software ECCN in the
entire CCL and is outside the scope of the November 28 (military
electronics) rule.
    Comment: The commenter recommended a number of changes to ECCNs or
ECCN paragraphs for which modifications are not needed to accomplish
the purpose of the November 28 (military electronics) rule and this
proposed rule, which is to control on the CCL items that the President
determines no longer warrant control on the USML.
    Response: Without commenting on the merit of each of those proposed
changes, BIS is not including them in this proposed rule because they
are outside the scope of what BIS proposed in the November 28 (military
electronics) rule. Including them in this proposed rule would distract
readers and potential commenters, possibly depriving BIS of the benefit
of informed analysis and comments on the rule's efficacy in achieving
its purpose as stated above.
    In addition to the changes discussed above, this commenter
recommended several changes to the proposed ECCNs in CCL Category 9
concerning cryogenic and superconductive equipment and related items.
    Comment:
     Add the phrase ``not controlled by 1C005, 3A001.d,
3A001.e.3, 3A201.b, 6A002.d.1, 6A006.a.1 or 8A002.o.2.c'' to the header
of ECCN 9A620
     Add a related control note referring to ECCNs 1C005,
3A001.d, 3A001.e.3, 3A201.b, 6A002.d.1, 6A006.a.1 or 8A002.o.2.c.
     Remove the phrase ```specially designed' to be installed''
and the phrase ``and capable of'' from paragraphs .a and .b of 9A620
     Remove the words ``Parts'' and ``attachments'' from
9A620.x
     Change the word ``and'' to ``or'' everywhere it appears in
the following phrase in ECCN 9B620: ``Test, inspection and production
end items and equipment . . .''
     In ECCN 9A620.x, replace the phrase ``specially designed
for a commodity controlled by ECCN 9A620'' with ``for a commodity
controlled by ECCN 9A620.a or 9A620.b having any of the characteristics
described in the texts of those sub-items.''
     In ECCN 9B620, replace the phrase: `` `Specially designed'
for items controlled in ECCN 9A620'' with the phrase ``having any of
the characteristics described in 9A620.a or 9A620.b.''
    Response: The ECCNs that this commenter proposes adding to the
header of ECCN 9A620 and to a related control note in that ECCN apply,
inter alia, to a number of commodities that have cryogenic or
superconducting properties. None of them has the qualifier ``
`specially designed' to be installed in a vehicle for military . . .
applications,'' which appears in paragraphs .a and .b of proposed ECCN
9A620. In fact, only one ECCN, 8A002.o.2.c, relates to a vehicle of any
kind. In addition, the order of review in the April 16 (initial
implementation) rule makes clear that items with characteristics that
meet the parameters of a 600 series ECCN are controlled by that 600
series ECCN and not by a non-600 series ECCN.
    The phrases `` `specially designed' to be installed'' and the
phrase ``and capable of'' are drawn from WAML category ML20, on which
ECCN 9A620 is based. The commenter offered no specific reason to depart
from the regime text. WAML category ML20 also uses the phrase
``components and attachments.'' The Wassenaar Arrangement does not
define either ``components'' or ``attachments.'' However, BIS believes
that as used in the Wassenaar Arrangement's control lists, the term
``components'' would encompass ``parts'' and ``components'' as defined
in the April 16 (initial implementation) rule and the term
``attachments'' would encompass ``accessories'' and ``attachments'' as
defined in the April 16 (initial implementation) rule. The phrase
``Test, inspection and production equipment'' is also used widely in
describing product group B in all nine categories of the EAR. BIS
believes that it is widely understood to encompass each of those three
types of equipment, and that changing the formula for one ECCN would be
more likely to increase than to decrease any misunderstandings that may
exist. The suggested alternative phrases for ECCNs 9A620.x and 9B620
(replacing ``specially designed'' with ``having any of the
characteristics of'') would distort the meaning of these ECCNs in ways
that would in some instances extend the control beyond what BIS
intends, and in other instances fail to control things that BIS intends
to control. BIS believes that with the publication of the definition of
the term ``specially designed'' in the April 16 (initial
implementation) rule, these ECCNs will be best understood and
appropriately tailored by retaining that term.

Comments That Commenter Characterized as ``Other'' Military Electronics
Ambiguities

    Comment: This commenter cited ten instances of alleged military
electronics ambiguities, i.e., instances in which the applicable ECCN
for an item was uncertain.
    Response: BIS is not adopting any of this commenter's recommended
changes in this category. Two of the comments in essence repeated the
view that ECCNs 3A001.d and .e.3 should be cross referenced in ECCN
9A620 because they apply to superconducting commodities. The remaining
eight comments do not address any text on the CCL that is related to or
affected by the decision to control on the CCL items that the President
determines no longer warrant control on the USML and are thus outside
the scope of the November 28 (military electronics) rule.

Second Set of Comments Submitted by This Commenter

    Comment: The commenter proposed changes to 57 of the 63 ECCNs
currently in CCL Category 9, and the creation of five new ECCNs for
that category. The commenter did not propose any changes to the four
new ECCNs proposed for that category by the November 28 (military
electronics) rule.
    Response: All these proposed changes are outside the scope of the
November 28 (military electronics) rule, and are extraneous to the
purpose of that or this second proposed rule. Therefore, BIS is not
making any changes to this proposed rule in response to these comments.

Detailed Description of Changes Proposed by This Rule

Revisions to ECCN 3A101

    Currently, ECCN 3A101 refers readers to the ITAR for analog-to-
digital converters described in paragraph .a. These converters would
move to the CCL and continue to be controlled for MT reasons because
they are identified on the MTCR Annex. Placing such items in this ECCN,
rather than the new ECCN 3A611, will make it easier to identify,
classify, and control such items. Consequently, this proposed rule adds
analog-to-digital converters usable in ``missiles'' and having any of
the characteristics described in proposed 3A101.a.1 or a.2. This
proposed rule modifies the text of ECCN 3A101.a.1 compared to what was
published in the November 28 (military electronics) rule to more
closely follow the format and text of Category II, Item 14, 14.A.1 of
the MTCR Annex. This is not a substantive change from what was
previously proposed.
New 3Y611 Series of ECCNs
    Proposed new ECCNs 3A611, 3B611, 3D611, and 3E611 would control
military electronics and related test, inspection, and production
equipment and software and technology currently controlled by USML
Category XI that the President determines no longer warrant control on
the USML. To the extent that they are not enumerated on the proposed
revisions to Category XI, these proposed new ECCNs would also control
computers, telecommunications equipment, radar ``specially designed''
for military use, parts, components, accessories, and attachments
``specially designed'' therefor, and related software and technology.
This structure aligns with the current USML Category XI and ML11, which
include within the scope of ``electronics'' such items as computers,
telecommunications equipment, and radar. BIS believes that it will be
easier to include such items within the scope of the proposed new 600
series that corresponds to USML Category XI, rather than creating new
600 series ECCNs in CCL Categories 4 (computers), 5
(telecommunications), 6 (radar) and 7(avionics). BIS, however, proposes
including cross references in CCL Categories 4, 5, 6 and 7 to alert
readers that ECCN 3A611 may control such items. As described above, BIS
nonetheless solicits comments regarding whether it would be easier to
understand and comply with controls on military electronics that move
to the CCL from the USML if they were divided among 600 series entries
in CCL Categories 4, 5, 6, and 7.
    The proposed ECCN 3X611 series, except for ECCN 3X611.y, would be
controlled for national security (NS Column 1 or NS1), regional
stability (RS Column 1 or RS1), antiterrorism (AT Column 1 or AT1), and
United Nations embargo (UN) reasons. ECCNs 3X611.y would only be
controlled for AT1 reasons (ECCN 3B611 would not have a .y paragraph).
Each ECCN in this 3X611 series is described more specifically below.
New ECCN 3A611
    Proposed ECCN 3A611 paragraph .a would control electronic
``equipment,'' ``end items,'' and ``systems'' ``specially designed''
for military use that are not enumerated in either a USML category or
another ``600 series'' ECCN.
    Paragraph .b would be reserved. The corresponding USML Category is
XI(b), which, in the Department of State proposed rule being published
concurrently with this rule, would continue to be a catch-all control
and would contain the following clarified version of the current
Category XI(b): ``Electronic systems or equipment specially designed
for intelligence purposes that collects, surveys, monitors, or exploits
the electromagnetic spectrum (regardless of transmission medium), or
for counteracting such activities.'' In the Department of State's
proposed rule being published simultaneously with this proposed rule,
Category XI(b) references certain types of equipment and systems that
are per se within the scope of the revised Category XI(b). BIS
encourages the public to comment on whether this approach creates any
confusion regarding the jurisdictional status of any items that are
commonly used in normal commercial, non-intelligence, or non-security
use, including those controlled under ECCN 5A980 (``Devices primarily
useful for the surreptitious interception of wire, oral, or electronic
communications.'')
    Paragraphs .c and .d would control MMIC power amplifiers and
discrete microwave transistors, respectively. These two paragraphs have
been extensively revised from what was proposed in the November 28
(military electronics) rule in an effort to tailor them to control MMIC
power amplifiers and discrete microwave transistors that have military
end use and little or no civilian application. The new parameters are
discussed under the heading ``Public Comments on the November 28
(military electronics) rule'' below. Additionally, a note has been
added stating that paragraph .d includes bare dice, dice mounted on
carriers or dice mounted in packages. The note also recognizes discrete
transistors may also be referred to as power amplifiers but that doing
so does not change the classification, whether under ECCN 3A001.b.3 or
3A611.d.
    Paragraph .e would control high frequency (HF) surface wave radar
capable of ``tracking'' surface targets on oceans.
    In this proposed rule, microelectronic devices and printed circuit
boards that are certified to be a `trusted device' from a DMEA
accredited supplier that were listed in paragraph .f in the November 28
(military electronics) rule are not listed because, upon review, all
such devices and printed circuit boards that needed to be controlled
were covered by other paragraphs of 3A611.
    Paragraphs .f, .g, and .h in this proposed rule apply respectively
to: (1) Application specific integrated circuits (ASICs) and
programmable logic devices (PLD) programmed for 600 series items; (2)
printed circuit boards and populated

circuit card assemblies whose layout is ``specially designed'' for 600
series items; and (3) multichip modules for which the pattern or layout
is ``specially designed'' for 600 series items. These commodities were
not explicitly included in the November 28 (military electronics) rule,
but would have been covered by the ``catch all'' paragraph 3A611.x in
that rule. However, these same types of devices, if for defense
articles on the USML, were explicitly identified in Category XI.c.1, .2
and .3 of the Department of State rule of November 28. A comment on
that Department of State proposal stated that greater clarity was
needed to prevent classifying ASICs, PLDs, and printed circuit boards
for 600 series items as defense articles subject to the ITAR.
Identifying ASICs, PLDs and printed circuit boards for 600 series items
explicitly in ECCN 3A611 contributes to this clarity. These additions
are not substantive changes from what was proposed in the November 28
(military electronics) rule.
    Each of the foregoing ECCN 3A611 paragraphs describes electronic
items that BIS understands to be inherently military or otherwise
exclusively designed and manufactured for military use. BIS encourages
the public to test this understanding and identify items, if any, that
fall within the scope of these new ECCNs that are in normal commercial
use. If so, the comments should provide details on such commercial
applications. In particular, BIS asks the public to comment on whether
the controls in proposed new paragraphs 3A611.c (MMIC power amplifiers)
and 3A611.d (discrete microwave transistors) are sufficiently limited
to those not now or likely to be in normal commercial use by US or
foreign telecommunications or other non-military applications. The
basis for this request is that the current USML Category XI(c) does not
now control any electronic parts, components, accessories, attachments,
or associated equipment ``in normal commercial use'' even if they were
``specifically designed or modified for use with the equipment''
controlled in USML categories XI(a) or XI(b), which are, in essence,
electronic equipment ``specifically designed, modified, or configured
for military application.'' One of the goals of the reform effort is to
ensure that items that are currently EAR controlled are not, through
the creation of the more positive lists, unintentionally made ITAR or
``600 series'' controlled. This objective, however, does not preclude
the possibility of the Administration intentionally making ITAR or
``600 series'' controlled items that are today subject to the other
parts of the EAR.
    Paragraphs .i through .w would be reserved.
    Paragraph .x would control ``parts,'' ``components,''
``accessories'' and ``attachments'' that are ``specially designed'' for
a commodity controlled by ECCN 3A611 or for an article controlled by
USML Category XI, and not enumerated in a USML category.
    A related control note is proposed for ECCN 3A611 clarifying that
electronic parts, components, accessories, and attachments that are
``specially designed'' for military use that are not enumerated in any
USML Category, but are within the scope of a ``600 series'' ECCN, are
controlled by that ``600 series'' ECCN. For example, electronic
components not enumerated on the USML that are ``specially designed''
for a military aircraft controlled by USML Category VIII or ECCN 9A610
would be controlled by ECCN 9A610.x. Similarly, electronic components
not enumerated on the USML that are ``specially designed'' for a
military vehicle controlled by USML Category VII or ECCN 0A606 would be
controlled by ECCN 0A606.x. The purpose of this note and the
limitations in ECCN 3A611.x is to prevent any overlap of controls over
electronics specially designed for particular types of items described
in other 600 series ECCNs (which would not be controlled by 3A611.x),
on one hand, and other electronic parts, components, accessories, and
attachments specially designed for military electronics that are not
enumerated on the USML (which would be controlled by ECCN 3A611.x), on
the other.
    Additional proposed related control notes address: Electronic items
that are enumerated in USML categories, application specific integrated
circuits, unprogrammed programmable logic devices, printed circuit
boards and populated circuit cards, and multichip modules. Finally, a
related control note informs readers that certain radiation hardened
microelectronic circuits would be controlled by proposed ECCN 9A515.d.
See 78 FR 31431, 31442 (May 24, 2013) for the proposed text of ECCN
9A515.
    A note proposed for ECCN 3A611.x specifies that ECCN 3A611.x
controls parts and components ``specially designed'' for underwater
sensors or projectors controlled by proposed USML Category XI(c)(12)
containing single-crystal lead magnesium niobate lead titanate (PMN-PT)
based piezoelectrics.
    ECCN 3A611 also would contain a paragraph .y for items of little or
no military significance that would be controlled only for AT1 reasons.
New ECCN 3B611
    Proposed ECCN 3B611 would impose, under paragraph .a, controls on
test, inspection, and production end items and equipment ``specially
designed'' for the ``development,'' ``production,'' repair, overhaul,
or refurbishing of items controlled in ECCN 3A611 or USML Category XI
that are not enumerated in USML XI or controlled by a ``600 series''
ECCN and, under paragraph .x, for ``parts,'' ``components,''
``accessories'' and ``attachments'' that are ``specially designed'' for
such test, inspection and production end items and equipment that are
not enumerated on the USML or controlled by another ``600 series''
ECCN. Paragraphs .b through .w would be reserved.
New ECCN 3D611
    Proposed ECCN 3D611 paragraph .a would impose controls on software
``specially designed'' for the ``development,'' ``production,''
operation, or maintenance of commodities controlled by 3A611 or 3B611
other than software for 3A611.y. Paragraph .b would impose controls on
software specially designed for the ``development,'' ``production,''
operation or maintenance of technology in ECCN 3E611.b; i.e., software
(other than build-to-print software) for technology for helix traveling
wave tubes (TWTs), transmit/receive or transmit modules, MMICs; and
discrete microwave circuits controlled under ECCN 3A611 would not be
eligible for License Exception STA. Paragraphs .c through .x would be
reserved. Paragraph .y would control specific ``software'' ``specially
designed'' for the ``production,'' ``development,'' operation or
maintenance of commodities enumerated in ECCNs 3A611.y.
New ECCN 3E611
    Proposed ECCN 3E611 would impose controls on ``technology''
``required'' for the ``development,'' ``production,'' operation,
installation, maintenance, repair, overhaul, or refurbishing of
commodities or software controlled by ECCN 3A611, 3B611 or 3D611
(except technology for 3A611.y and 3D611.y, which would be controlled
for AT1 reasons only). Technology (other than ``build-to-print''
technology for helix traveling wave tubes (TWTs), transmit/receive or
transmit modules, MMICs; and discrete microwave circuits controlled
under ECCN 3A611 would not be eligible for License Exception STA.

Revisions to ECCN 4A003
    As noted above, the analog-to-digital converters described in the
proposed revision to 3A101.a would become subject to the EAR. Adding
the text in 3A101.a.2.b for electrical input type analog-to-digital
converter printed circuit boards or modules requires that this proposed
rule amend ECCN 4A003 to add an MT control for items classified under
ECCN 4A003.e when meeting or exceeding the parameters described in ECCN
3A101.a.2.b. This amendment is necessary because the MT items in new
paragraph 3A101.a.2.b are a subset of the items in paragraph 4A003.e.
Revisions to ECCN 5A001
    This proposed rule revises the Related Controls paragraph in ECCN
5A001 to provide more detailed references to telecommunications
equipment subject to the ITAR under USML Categories XI and XV, while
maintaining references to ECCNs 5A101, 5A980, and 5A991.
New Cross Reference ECCNs
    Four new cross reference ECCNs would be created to alert readers
that computers, telecommunications equipment, radar and avionics--and
parts, components, accessories and attachments ``specially designed''
therefor--are controlled by ECCN 3A611 if they are specially designed
for military use. These cross references are intended to reduce the
likelihood of confusion that might otherwise arise because computers,
telecommunications equipment, radar and avionics generally are in CCL
Categories 4, 5 (Part 1), 6 and 7, respectively. The new cross
reference ECCNs and the Categories in which they would appear are:
4A611, Category 4; 5A611, Category 5, Part 1; 6A611, Category 6; 7A611,
Category 7. The avionics cross reference ECCN was not in the November
28 (military electronics) rule. As discussed below, BIS received public
comments expressing a preference for controlling 600 series computers,
telecommunications and radar in the CCL Categories under which other
computers, telecommunications and radar are controlled rather than in a
single ECCN in Category 3. The latter approach more closely follows the
USML pattern. BIS encourages further comment on this issue.
Corrections to ECCNs 7A006 and 7D101
    This proposed rule would correct the reasons for control paragraph
of ECCN 7A006 to state that the MT reason for control applies to those
items covered by ECCN 7A006 that also meet or exceed the parameters of
ECCN 7A106. ECCN 7A006 now applies the missile technology reason for
control to a range of airborne altimeters that extends beyond the range
of altimeters that are on the MTCR Annex. BIS's practice is to apply
the MT reason for control only to items on that Annex. This proposed
change would conform ECCN 7A006 to that practice. Similarly, this
proposed rule would add the phrase ``for missile technology reasons''
to the heading of ECCN 7D101. ECCN 7D101 applies the missile technology
reason for control to software for a range of commodity ECCNs. Not all
of those commodities are controlled for MT reasons. The text proposed
here would limit the scope of missile technology controls in ECCN 7A106
to commodities on the MTCR Annex, and that of ECCN 7D101 to software
for commodities on the MTCR Annex.
New 9X620 Series of ECCNs
    Proposed ECCNs 9A620, 9B620, 9D620, and 9E620 would apply NS1, RS1,
AT1 and UN reasons for control to cryogenic and superconducting
equipment described in category ML20 of the WAML, and to test,
inspection and production equipment, software and technology therefor.
Category ML20 covers cryogenic and superconducting equipment that is
``specially designed'' to be installed in a vehicle for military
ground, marine, airborne, or space applications. BIS believes that such
equipment is used in experimental or developmental vehicle propulsion
systems that employ superconducting components and cryogenic equipment
to cool those components. BIS has not identified evidence of trade in
such items. To the extent that exports do exist, the items would be
subject to the license requirements of the USML category that controls
the vehicle into which the equipment would be installed, i.e., Category
VI, surface vessels; Category VII, ground vehicles; Category VIII,
aircraft; and Category XV, spacecraft. BIS proposes to place this
cryogenic and superconducting equipment, its related test, inspection
and production equipment, and its related software and technology into
a single set of 600 series ECCNs ending with the digits ``20'' to
correspond to the relevant WAML category. This approach would further
the administration's Export Control Reform Initiative goal of aligning
US controls with multilateral controls wherever feasible. Each ECCN in
this series is described more specifically below.
New ECCN 9A620
    Proposed ECCN 9A620.a would control equipment ``specially
designed'' to be installed in a vehicle for military ground, marine,
airborne, or space applications, capable of operating while in motion
and of producing or maintaining temperatures below 103 K (-170 [deg]C).
Paragraph .b would control ``superconductive'' electrical equipment
(rotating machinery and transformers) ``specially designed'' to be
installed in a vehicle for military ground, marine, airborne, or space
applications, and capable of operating while in motion. Paragraphs .c
through .w would be reserved. Paragraph .x would control parts,
components, accessories and attachments ``specially designed'' for a
commodity controlled by ECCN 9A620.
New ECCN 9B620
    Proposed ECCN 9B620 would control test, inspection, and production
end items and equipment ``specially designed'' for the ``development,''
``production,'' repair, overhaul or refurbishing of items controlled in
proposed ECCN 9A620.
New ECCN 9D620
    Proposed ECCN 9D620 would control software ``specially designed''
for the ``development,'' ``production,'' operation, or maintenance of
commodities controlled by ECCNs 9A620 or 9B620.
New ECCN 9E620
    Proposed ECCN 9E620 would control a ``technology'' ``required'' for
the ``development,'' ``production,'' operation, installation,
maintenance, repair, overhaul, or refurbishing of commodities or
software controlled by ECCNs 9A620, 9B620 or 9D620.
Proposed New ECCNs and License Exception STA
    One of the objectives of the Export Control Reform Initiative is to
align the jurisdictional status of technology and software with the
items to which they relate. Thus, for example, as a general matter, all
technical data and software directly related to a defense article,
i.e., an item identified on the ITAR's USML, will also be ITAR
controlled. All technology, including technical data (other than
classified technical data directly related to items controlled under
ECCNs 3A611, 3B611, 3C611, or 3D611), and software for the production,
development, or other aspects of an item on the EAR's CCL, will be
subject to the EAR. Nevertheless, some types of software and technology
are more significant than the commodities that are developed or
produced from or that utilize such software or technology. In
recognition of that fact, this proposed rule would preclude in the
ECCNs the use of License Exception STA for

software and technology (other than build-to-print software and
technology) for the following types of items if controlled by ECCN
3A611: (1) Helix traveling wave tubes (TWTs); (2) Transmit/receive or
transmit modules; (3) Microwave monolithic integrated circuits (MMIC)s;
and (4) Discrete microwave transistors. This fact is noted in the
License Exception STA paragraphs for ECCNs 3D611 and 3E611.

Request for Comments

    All comments must be in writing and submitted via one or more of
the methods listed under the ADDRESSES caption to this notice. All
comments (including any personal identifiable information) will be
available for public inspection and copying. Those wishing to comment
anonymously may do so by submitting their comment via regulations.gov
and leaving the fields for identifying information blank.

Effects of This Proposed Rule

Use of License Exceptions

    Military electronic equipment, certain cryogenic and
superconducting equipment, and parts, components, and test, inspection,
and production equipment therefor currently on the USML that this rule
would place on the CCL would become eligible for several license
exceptions, including STA, which would be available for exports to
certain agencies of NATO governments and other multi-regime close
allies. The exchange of information and statements required under STA
are substantially less burdensome than the license application
requirements under the ITAR, as discussed in more detail in the
``Regulatory Requirements'' section of this proposed rule. BIS does not
intend with this proposed rule to move any items currently subject to
the EAR to a 600 series ECCN; therefore, it would not narrow the scope
of license exception eligibility for any items currently on the CCL.

Alignment With the Wassenaar Arrangement Munitions List

    The Administration has stated since the beginning of the Export
Control Reform Initiative that the reforms will be consistent with the
obligations of the United States to the multilateral export control
regimes. Accordingly, the Administration will, in this and subsequent
proposed rules, exercise its national discretion to implement, clarify,