[Federal Register Volume 83, Number 101 (Thursday, May 24, 2018)]
[Proposed Rules]
[Pages 24166-24195]
[FR Doc No: 2018-10367]

Vol. 83

Thursday,

No. 101

May 24, 2018

Part II

Department of Commerce

-----------------------------------------------------------------------

Bureau of Industry and Security

-----------------------------------------------------------------------

15 CFR Parts 736, 740, 742, et al.

Control of Firearms, Guns, Ammunition and Related Articles the
President Determines No Longer Warrant Control Under the United States
Munitions List (USML); Proposed Rule

Federal Register / Vol. 83 , No. 101 / Thursday, May 24, 2018 /
Proposed Rules

-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 736, 740, 742, 743, 744, 746, 748, 758, 762, 772, and
774

[Docket No. 111227796-5786-01]
RIN 0694-AF47

Control of Firearms, Guns, Ammunition and Related Articles 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.

-----------------------------------------------------------------------

SUMMARY: This proposed rule describes how articles the President
determines no longer warrant control under United States Munitions List
(USML) Category I--Firearms, Close Assault Weapons and Combat Shotguns;
Category II--Guns and Armament; and Category III--Ammunition/Ordnance
would be controlled under the Commerce Control List (CCL). This
proposed rule is being published simultaneously with a proposed rule by
the Department of State that would revise Categories I, II, and III of
the USML to describe more precisely the articles warranting continued
control on that list.

DATES: Comments must be received by July 9, 2018.

ADDRESSES: You may submit comments by any of the following methods:
     Submit comments via Federal eRulemaking Portal: http://www.regulations.gov. You can find this proposed rule by searching on
its regulations.gov docket number, which is BIS-2017-0004.
     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-AF47.

FOR FURTHER INFORMATION CONTACT: Steven Clagett, Office of
Nonproliferation Controls and Treaty Compliance, Nuclear and Missile
Technology Controls Division, tel.<PHONE_NUMBER> or email
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    This proposed rule describes how articles the President determines
no longer warrant control under United States Munitions List (USML)
Category I--Firearms, Close Assault Weapons and Combat Shotguns;
Category II--Guns and Armament; and Category III--Ammunition/Ordnance,
would be controlled on the Commerce Control List (CCL) and by the
Export Administration Regulations (EAR). 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 I (Firearms, Close Assault
Weapons and Combat Shotguns), Category II (Guns and Armament), and
Category III (Ammunition/Ordnance) of the USML to describe more
precisely items warranting continued control on that list.
    The changes described in this proposed rule and in the State
Department's companion proposed rule on Categories I, II, and III of
the USML are based on a review of those categories by the Department of
Defense, which worked with the Departments of State and Commerce in
preparing the amendments. The review was focused on identifying the
types of articles that are now controlled on the USML that are either
(i) inherently military and otherwise warrant control on the USML or
(ii) if of a type common to non-military firearms applications, possess
parameters or characteristics that provide a critical military or
intelligence advantage to the United States, and are almost exclusively
available from the United States. If an article satisfies one or both
of those criteria, the article remains on the USML. If an article does
not satisfy either criterion, it has been identified in the new Export
Control Classification Numbers (ECCNs) included in this proposed rule.
Thus, the scope of the items described in this proposed rule is
essentially commercial items widely available in retail outlets and
less sensitive military items.
    BIS has created ECCNs, referred to as the ``600 series,'' to
control items that would be removed from the USML and controlled under
the CCL, or items from the Wassenaar Arrangement on Export Controls for
Conventional Arms and Dual Use Goods and Technologies Munitions List
(Wassenaar Arrangement Munitions List or WAML) that are already
controlled elsewhere on the CCL.
    These ECCNs are referred to as the ``600 series'' because the third
character in each of the new ECCNs is ``6.'' The first two characters
of the ``600 series'' ECCNs serve the same function as any other ECCN
as described in Sec.  738.2 of the EAR. The first character is a digit
in the range 0 through 9 that identifies the Category on the CCL in
which the ECCN is located. The second character is a letter in the
range A through E that identifies the product group within a CCL
Category. With few exceptions, the final two characters identify the
WAML category that covers items that are the same or similar to items
in a particular ``600 series'' ECCN. Category II of the USML and
category ML2 of the WAML cover large caliber guns and other military
weapons such as: Howitzers, cannon, mortars, anti-tank weapons,
projectile launchers, military flame throwers and recoilless rifles.
    In this proposed rule, items that are currently controlled in
Category II of the USML would be controlled on the CCL under four new
``600 series'' ECCNs. Placement of the items currently in USML Category
II into the CCL's 600 series would be consistent with existing BIS
practice of using 600 series ECCNs to control items of a military
nature.
    Items currently controlled in Categories I and III of the USML
would be controlled in new ECCNs in which the third character is a
``5.'' These items are not appropriate for 600 series control because,
for the most part, they have civil, recreational, law enforcement, or
other non- military applications. As with 600 series ECCNs, the first
character would represent the CCL category, the second character would
represent the product group, and the final two characters would
represent the WAML category that covers items that are the same or
similar to items in the ECCN.
    This proposed rule does not deregulate the transferred items. BIS
would require licenses to export, or reexport to any country a firearm
or other weapon currently on the USML that would be added to the CCL by
this proposed rule. BIS would also require licenses for the export or
reexport of guns and armament that would be controlled under new ECCN
0A602, such as guns and armaments manufactured between 1890 and 1919 to
all destinations except Canada. As compared to decontrolling firearms
and other items, in publishing this proposed rule, BIS, working with
the Departments of Defense and State, is trying to reduce the
procedural burdens and costs of export compliance on the U.S. firearms
industry while allowing the U.S. Government to enforce export controls
for firearms appropriately and to make better use of its export control
resources. BIS encourages comments from the public on this aspect of
the proposed rule.
    All references to the USML in this rule are to the list of defense
articles that are controlled for purposes of export, temporary import,
or brokering pursuant to the International Traffic in

Arms Regulations (ITAR), 22 CFR parts 120 through 130, and not to the
list of defense articles on the United States Munitions Import List
(USMIL) that are controlled by the Bureau of Alcohol, Tobacco, Firearms
and Explosives (ATF) for purposes of permanent import under its
regulations at 27 CFR part 447. Pursuant to section 38(a)(1) of the
Arms Export Control Act (AECA), all defense articles controlled for
export or import, or that are subject to brokering controls, are part
of the USML under the AECA. All defense articles described in the USMIL
or the USML are subject to the brokering controls administered by the
U.S. Department of State in part 129 of the ITAR. The transfer of
defense articles from the ITAR's USML to the EAR's CCL for purposes of
export controls does not affect the list of defense articles controlled
on the USMIL under the AECA, 22 U.S.C. 2778 et seq., for purposes of
permanent import or brokering controls.
    BIS believes the control of these firearms under the EAR is
justified because the firearms described in this proposed rule are
either not inherently military or do not warrant the obligations that
are imposed under the ITAR pertaining to such items. After review, the
Defense Department, in conjunction with the Departments of State and
Commerce, concluded that the firearms in this proposed rule also do not
provide a critical military or intelligence advantage to the United
States, are not the types of weapons that are almost exclusively
available from the United States, and are manufactured from
``technology'' that is widely available. Moreover, the firearms have
commercial and other non-military characteristics that distinguish them
from other articles controlled under the ITAR. There is a significant
worldwide market for firearms in connection with civil and recreational
activities such as hunting, marksmanship, competitive shooting, and
other non-military activities. Because of the popularity of shooting
sports in the United States, for example, many large chain retailers
carry a wide inventory of the firearms described in the new ECCNs for
sale to the general public. Firearms available through U.S. retail
outlets include rim fire rifles, pistols, modern sporting rifles,
shotguns, and large caliber bolt action rifles, as well as their
``parts,'' ``components,'' ``accessories'' and ``attachments.''
    An additional justification for the change in the jurisdictional
status of the items described in this rule is that the current ITAR
controls burden U.S. industry without any proportionate benefits to
United States national security or foreign policy objectives. Similar
to the challenges faced by other industries, the firearms trade has
been negatively affected by the incentives the ITAR creates for foreign
manufacturers to avoid U.S.-origin content. Currently, under the ITAR,
any part, component, accessory, or attachment for any of the firearms
described in this proposed rule remains ITAR controlled, regardless of
its significance, when incorporated into foreign-made items or
reexported to any third country. Under the EAR, the de minimis
provisions may, in certain cases, mean a foreign item that incorporates
U.S.-origin content may not be subject to the EAR, provided the U.S.-
origin items meet the applicable de minimis level for the country of
reexport. Similarly, a technical drawing of such part, component,
accessory or attachment is ITAR controlled, as is the provision of a
``defense service'' to a foreign person concerning those items, such as
the application of protective coatings. Moreover, a U.S. person engaged
in manufacturing or exporting these items or providing related defense
services must register with the State Department under the ITAR. Thus,
even if a U.S. company can manufacture or service these items at a
lower cost in the United States as compared to the cost for a U.S. or
foreign company to manufacture or service the items outside of the
United States, the ITAR's restrictions may render the items
unattractive or uncompetitive for foreign manufacturers. The EAR does
not include a concept of ``defense services,'' and the ``technology''
related controls are more narrowly focused and apply in limited
contexts as compared to the ITAR.
    The EAR also includes well-established and well understood criteria
for excluding certain information from the scope of what is ``subject
to the EAR.'' (See part 734 of the EAR.) Items that would move to the
CCL would be subject to existing EAR concepts of jurisdiction and
controls related to ``development'' and ``production,'' as well
operation, installation, and maintenance ``technology.'' While
controlling such ``technology,'' as well as other ``technology'' is
important, the EAR includes criteria in part 734 that would exclude
certain information and software from control. For example, if a gun
manufacturer posts a firearm's operation and maintenance manual on the
internet, making it publicly available to anyone interested in
accessing it and without restrictions on further dissemination (i.e.,
unlimited distribution), the operation and maintenance information
included in that published operation and maintenance manual would no
longer be ``subject to the EAR.'' (See Sec. Sec.  734.3(b) and
734.7(a).) Non-proprietary system descriptions, including for firearms
and related items, are another example of information that would not be
subject to the EAR. (See Sec.  734.3(b)(3)(v).)
    Pursuant to section 38(f) of the AECA, the President shall 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).
    This Commerce proposed rule is being published simultaneously with
a Department of State proposed rule. Collectively, the rules address
defense articles currently controlled under Categories I (Firearms,
Close Assault Weapons and Combat Shotguns), II (Guns and Armament), and
III (Ammunition/Ordnance) of the USML. The Department of State proposed
rule would revise Categories I (Firearms, Close Assault Weapons and
Combat Shotguns), II (Guns and Armament), and III (Ammunition/Ordnance)
of the USML so that they describe in positive terms the defense
articles that should remain on the USML. The Department of Commerce
rule would add to the CCL items that the President determines no longer
warrant control under the USML.
    In addition, this rule would clarify the scope of some ECCNs
currently on the CCL. This rule would also renumber these ECCNs to
place certain firearms-related items currently on the CCL in closer
proximity to the firearms-related items that would be removed from the
USML and added to the CCL to make it easier to identify and classify
such items.
    BIS is interested in comments in response to this proposed rule as
to whether the public find this reorganization helpful. In some
instances, the juxtapositions resulting from this reorganization
highlight different license requirements and licensing policies for
various firearms and related items. The public is invited to comment on
the appropriateness of these license requirements and licensing
policies. The public is also encouraged to comment on whether or not
the proposed rule describes items that are not widely available in
commercial outlets.

Detailed Description of Changes Proposed by This Rule

Creation of New ECCNs

    This proposed rule would create 17 new ECCNs to control items
proposed for removal from the USML. A discussion of each new ECCN and
the controls that would apply to items under that ECCN follows below.

New ECCN 0A501: Firearms and Related Commodities

    New ECCN 0A501 would apply national security (NS Column 1),
regional stability (RS Column 1), Firearms Convention (FC Column 1),
United Nations (UN), and anti-terrorism (AT Column 1) reasons for
control to the following firearms, the following enumerated parts and
components and to ``specially designed'' ``parts,'' ``components,''
``accessories'' and ``attachments'' for those firearms and ``parts''
and ``components:''

--Non-automatic and semi-automatic firearms (other than shotguns) with
a caliber of less than or equal to .50 inches (12.7 mm);
--Non-automatic and non-semi-automatic rifles, carbines, revolvers or
pistols with a caliber greater than .50 inches (12.7 mm) but not
greater than .72 inches (18.0 mm);
--Detachable magazines with a capacity of greater than 16 rounds but
less than 50 rounds that are ``specially designed'' for the firearms
listed above;
--Receivers (frames) and complete breech mechanisms, including
castings, forgings, or stampings thereof, ``specially designed'' for
the firearms listed above; and
--Barrels, cylinders, barrel extensions, mounting blocks (trunnions),
bolts, bolt carriers, operating rods, gas pistons, trigger housings,
triggers, hammers, sears, disconnectors, pistol grips that contain fire
control ``parts'' or ``components,'' and buttstocks that contain fire
control ``parts'' or ``components'' (e.g., triggers, hammers, sears, or
disconnectors) if ``specially designed'' for the firearms listed above
or for firearms listed in USML Category I (unless the part or component
itself is listed in USML Category I(g) or (h) as specified in the
Department of State proposed rule entitled ``Amendment to the
International Traffic in Arms Regulations: Revision of U.S. Munitions
List Categories I, II, and III,'' also published in this issue).

    ECCN 0A501.y would be subject only to anti-terrorism (AT Column 1)
and United Nations (UN) reasons for control and would cover such items
as scope mounts or accessory rails, iron sights, sling swivels, butt
plates, recoil pads, bayonets, and stocks or grips that do not contain
any fire control ``parts'' or ``components.''
    This proposed rule would add a technical note to ECCN 0A501 stating
that ``parts'' and ``components'' include ``parts'' and ``components''
that are common to firearms described in ECCN 0A501 and to firearms
``subject to the ITAR.''
    It also would add a second note to ECCN 0A501 to state that certain
firearms and similar items are EAR99, i.e., subject to the EAR but not
on the CCL. Those items are: Antique firearms (i.e., those manufactured
before 1890) and reproductions thereof, muzzle loading black powder
firearms except those designs based on centerfire weapons of a post
1937 design, BB guns, pellet rifles, paint ball, and all other air
rifles.
    In addition, for purposes of new ECCN 0A501 and the rest of the new
ECCNs described below, items previously determined to be ``subject to
the EAR'' under a commodity jurisdiction determination issued by the
U.S. Department of State that were designated as EAR99 would generally
not be classified in any of the new ECCNs that would be created with
this proposed rule. This would be consistent with Supplement No. 1 to
Part 736, General Order No. 5, paragraph (e)(3) (Prior commodity
jurisdiction determination) and the paragraph (b)(1) release from
``specially designed.'' As a conforming change, this proposed rule
would revise paragraph (e)(3) of General Order No. 5 to add a reference
to ``0x5zz'' (to account for new ECCNs 0A501, 0A502, 0A503, 0A504,
0A505, 0B501, 0B505, 0D501, 0D505, 0E501, and 0E502 described below).
The ``600 series'' and 9x515 (spacecraft and related items) are already
included in paragraph (e)(3), and those references remain unchanged.

New ECCN 0A502: Shotguns and Certain Related Commodities

    New ECCN 0A502 would control both the shotguns currently on the
USML that are to be added to the CCL (barrel length less than 18
inches) and the shotguns and the enumerated ``parts'' and
``components'' currently controlled in ECCN 0A984 (barrel length 18
inches or greater). Shotguns currently controlled in ECCN 0A984 would
retain their current reasons for control of Firearms Convention (FC),
crime control (CC Column 1, 2 or 3 depending on barrel length and end
user) and United Nations (UN) reasons. Shotguns with a barrel length
less than 18 inches would be controlled under NS Column 1, CC Column 1,
FC, UN and AT Column 1 plus regional stability (RS Column 1),
consistent with their current control on the USML. The shotguns
controlled in 0A502 currently controlled in ECCN 0A984 would not be
controlled for national security reasons because they are not on the
WAML.

New ECCN 0A503: Discharge Type Arms, and Certain Other Commodities

    This rule would replace existing ECCN 0A985 with a new ECCN 0A503.
The rule would add ``non-lethal or less-lethal grenades and projectiles
and `specially designed' `parts' and `components' of those
projectiles'' to the description of controlled items in the header of
ECCN 0A985 to make clear that such projectiles are classified in that
ECCN 0A503 and not classified under ECCN 0A602 or on the USML.
Renumbering this ECCN would cause entries controlling firearms and
related items to be placed in close proximity to each other, which
would make it easier for readers to identify items on the CCL.

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

    New ECCN 0A504 would replace existing ECCN 0A987, which controls
optical sighting devices for firearms. The reasons for control table,
which currently states, inter alia, that the Firearms Convention (FC)
reason for control applies to ``optical sights for firearms,'' would be
revised to state specifically that the FC reason for control applies to
all paragraphs in the ECCN except the one that controls laser pointing
devices. In addition, BIS would add an RS control for certain
riflescopes. These riflescopes would be identified in their own
paragraph in the ECCN under 0A504.i. The riflescopes in this paragraph
would be limited to those ``specially designed'' for use in firearms
that are ``subject to the ITAR.'' An exclusion would be included in the
criteria of this paragraph to ensure less sensitive riflescopes that
would be moved from ECCN 0A987 to 0A504 on the effective date of a
final rule, that currently are not RS controlled under the EAR, would
not be controlled under this paragraph. This rule would also add a note
to this paragraph (i) to specify that paragraph (a)(1) of the
definition of ``specially designed'' is what would be used to determine
whether a riflescope is ``specially designed'' for purposes of this
paragraph.
    This change would make clear, consistent with BIS's existing
interpretation, that such devices are not optical sights and are not
subject to the

FC reason for control. The new number is intended to make identifying
items on the CCL easier by grouping similar or related items closer to
each other.

New ECCN 0A505: Ammunition and Certain Related Commodities

    New ECCN 0A505 would impose national security (NS Column 1),
regional stability (RS Column 1), Firearms Convention (FC), United
Nations (UN), and anti-terrorism (AT Column 1) controls on ammunition
not enumerated on the USML, for firearms that would be classified under
proposed ECCN 0A501, and for most ``parts'' and ``components'' of such
ammunition. Such ammunition would be for small arms, in most cases,
firearms of caliber not exceeding 0.50 inches, although some ammunition
for firearms of caliber up to 0.72 inches would be included. This
proposed rule would retain the CCL reasons for control currently found
in ECCNs 0A984 and 0A986 for shotgun shells. Buckshot shotgun shells
would be subject to the CC Column 1, FC Column 1 and UN reasons for
control. Other shotgun shells would be subject to the FC, UN and AT
(North Korea only) reasons for control. Only ``parts'' and
``components'' would be eligible for License Exception LVS. Ammunition
for larger caliber weapons such as howitzers, artillery, cannon,
mortars, and recoilless rifles would remain in USML Category III.
Ammunition that has little or no civil use or that is inherently
military such as ammunition that is preassembled into links or belts,
caseless ammunition, tracer ammunition, ammunition with a depleted
uranium projectile or a projectile with a hardened tip or core and
ammunition with an explosive projectile also would remain in USML
Category III. Possession of the ammunition that would be added to the
CCL by this rule does not provide a critical military advantage to the
United States. Blank ammunition for firearms controlled by ECCN 0A501
and not enumerated in Category III of the USML would be controlled for
United Nations and anti-terrorism reasons only. Consolidating all
ammunition on the CCL into one ECCN would simplify use of the CCL.
    Inclusion of this ammunition on the CCL is appropriate because such
ammunition is available from a number of countries, some of which are
not close allies of the United States or members of multilateral export
control regimes. Possession of this ammunition does not confer a
military advantage on the United States. This rule proposes adding
three notes to clarify the scope of ``parts'' and ``components'' for
ammunition classified under ECCN 0A505. Note 1 to 0A505.c would clarify
the relationship between ECCNs 0A505 and 1A984 for shotgun shells,
stating that shotgun shells that contain only chemical irritants would
be controlled under 1A984 and not 0A505. Separately, Note 2 to 0A505.x
would include an illustrative list of the controls on ``parts'' and
``components'' in this entry, such as Berdan and boxer primers. Note 3
to 0A505.x would clarify that the controls in ECCN 0A505 include
``parts'' and ``components'' that are common to ammunition and ordnance
described in this entry and to those enumerated in USML Category III.

New ECCN 0A602: Guns and Armament

    New ECCN 0A602 would impose national security (NS Column 1),
regional stability (RS Column 1), United Nations (UN) and anti-
terrorism (AT Column 1) controls on guns and armament manufactured
between 1890 and 1919 and for military flame throwers with an effective
range less than 20 meters. It would impose those same reasons for
control on parts and components for those commodities and for defense
articles in USML Category II if such parts or components are not
specified elsewhere on the CCL or USML. Note 2 to 0A602 confirms that
black powder guns and armament manufactured in or prior to 1890 and
replicas thereof designed for use with black powder propellants are
designated EAR99. Inclusion of these guns and armament on the CCL is
appropriate because they do not confer a significant military or
intelligence advantage on the United States. The guns controlled in
this ECCN are between 98 and 127 years old. The parts, components,
accessories and attachments controlled in this ECCN include some that
are for modern artillery. Modern artillery will remain on the USML,
along with the most sensitive ``parts,'' ``components,''
``accessories'' and ``attachments'' for these USML items. This proposed
rule adds a note to clarify that ``parts,'' ``components,''
``accessories'' and ``attachments'' specified in USML subcategory II(j)
are not subject to the EAR. The USML Order of Review and CCL Order of
Review already provide guidance for making such a jurisdictional and
classification determination, but to highlight that these ``parts,''
``components,'' ``accessories'' and ``attachments'' are not classified
under paragraph (x) of 0A602, this rule proposes adding a note.

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

    New ECCN 0B501 would cover ``Test, inspection and production
`equipment' and related commodities for the `development' or
`production' of commodities enumerated in ECCN 0A501 or USML Category
I.'' This new ECCN would apply the national security (NS Column 1),
regional stability (RS Column 1), United Nations (UN) and anti-
terrorism (AT Column 1) reasons for control to four specific types of
machinery and to one class of items. The four specific types of
machinery are: Small arms chambering machines, small arms deep hole
drilling machines and drills therefor, small arms rifling machines, and
small arms spill boring machines. The class of items covers dies,
fixtures and other tooling ``specially designed'' for the
``production'' of items in the State Department proposed rule for USML
Category I or ECCN 0A501.
    The NS and RS reasons for control do not apply to equipment for the
``development'' or ``production'' of commodities in ECCN 0A501.y
because those reasons for control do not apply to the commodities in
ECCN 0A501.y themselves.
    The first four specific items noted above currently are listed in
ECCN 2B018, paragraphs .o, .p, .q, and .r and would be listed in
paragraphs .a, .b, .c and .d of ECCN 0B501. In addition, the class of
items in new 0B501 that is currently included within ECCN 2B018,
paragraph .n (jigs and fixtures and other metal-working implements or
``accessories'' of the kinds exclusively designed for use in the
manufacture of firearms, ordnance, and other stores and appliances for
land, sea or aerial warfare) would, if applicable to firearms
controlled in 0A501, be subsumed in paragraph .e. Jigs, fixtures and
metal working implements currently in 2B018 that are applicable to
larger guns would be controlled in ECCN 0B602 and are discussed below.
    Moving these items from 2B018 to 0B501 would retain the national
security (NS Column 1), anti-terrorism (AT Column 1) and United Nations
(UN) reasons for control and would raise the regional stability (RS)
reason for control from RS Column 2 to RS Column 1. This would cause no
change in destination-based license requirements, but would allow
consideration of whether the export or reexport could contribute to
instability in any region, not just the region to which the item is
exported or reexported in considering whether to approve a license.

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

    New ECCN 0B505 would impose national security (NS Column 1),
regional stability (RS Column 1), United Nations (UN), and anti-
terrorism (AT Column 1) controls on tooling, templates, jigs, mandrels,
molds, dies, fixtures, alignment mechanisms, and test equipment, not
enumerated in USML Category III, and ``specially designed'' ``parts''
and ``components'' therefor, that are ``specially designed'' for the
``production'' of ammunition other than for the ammunition specified in
0A505.b, .c or .d (certain shotgun shells with buckshot and without
buckshot and certain blank ammunition). Equipment for manufacturing
shotgun shells that do not contain buckshot would be controlled for the
AT (North Korea only) and UN reasons for control, which are the reasons
for control that currently apply to this equipment in ECCN 0B986. ECCN
0B505 would not include equipment for the hand loading of cartridges
and shotgun shells, so this rule specifies this in the heading.
    The equipment controlled in ECCN 0B505 is used to produce
conventional ammunition and is similar to equipment that is in
operation in a number of countries, some of which are not allies of the
United States or members of multinational export control regimes.
Possession of such equipment does not confer a significant military
advantage on the United States, and thus its inclusion on the CCL is
appropriate.

New ECCN 0B602: Test, Inspection and Production Equipment for Certain
Guns and Armament

    New ECCN 0B602 would impose national security (NS Column 1),
regional stability (RS Column 1), United Nations (UN), and anti-
terrorism (AT Column 1) controls on test, inspection and production
equipment enumerated for commodities enumerated or otherwise described
in ECCN 0A602.a or USML Category II. ECCN 0B602 would control eight
specific types of equipment that currently are listed in paragraphs .e
through .l of ECCN 2B018. Those eight specific types of equipment are:
Gun barrel rifling and broaching machines and tools therefor; Gun
barrel rifling machines; Gun barrel trepanning machines; Gun boring and
turning machines; Gun honing machines of 6 feet (183 cm) stroke or
more; Gun jump screw lathes; Gun rifling machines; and Gun
straightening presses. ECCN 0B602 also would control one class of
equipment that is included within ECCN 2B018 paragraph .n (jigs and
fixtures and other metal-working implements or accessories of the kinds
exclusively designed for use in the manufacture of items in ECCN 0A602
or USML Category II). Moving these items from 2B018 to 0B501 would
retain the national security (NS Column 1), anti-terrorism (AT Column
1) and United Nations (UN) reasons for control and would raise the
regional stability reason for control from RS Column 2 to RS Column 1.
This would cause no change in destination-based license requirements,
but would allow consideration of whether the export or reexport could
contribute to instability in any region, not just the region to which
the items is exported or reexported in considering whether to approve
or reject a license application.
    Additionally, ECCN 0B602 would control any other tooling and
equipment that is ``specially designed'' for the production of items in
ECCN 0A602 or USML Category II along with test and evaluation equipment
and test models, including diagnostic instrumentation and physical test
models, ``specially designed'' for items in ECCN 0A602 or USML Category
II.

New ECCN 0D501: Software for Firearms and Certain Related Commodities

    New ECCN 0D501 would apply national security (NS Column 1),
regional stability (RS Column 1), United Nations (UN), and anti-
terrorism (AT Column 1) controls to ``software'' ``specially designed''
for the ``development,'' ``production,'' operation or maintenance of
all commodities classified under ECCNs 0A501 or equipment under 0B501
except those commodities classified under 0A501.y. ``Software'' for
ECCN 0A501.y would be controlled only for United Nations and anti-
terrorism reasons to match the reason for control that applies to
commodities classified under that paragraph.

New ECCN 0D505: Software for Ammunition and Certain Related Commodities

    New ECCN 0D505 would impose national security (NS Column 1),
regional stability (RS Column 1), United Nations (UN), and anti-
terrorism (AT Column 1) controls on ``software'' ``specially designed''
for the ``development,'' ``production,'' operation or maintenance of
commodities controlled by ECCNs 0A505.a and .x (rifle, pistol, carbine
and revolver ammunition and ``specially designed'' parts and components
therefor) or 0B505.a and .x. However, only United Nations and anti-
terrorism controls would apply to ``software'' for the blank ammunition
in ECCN 0A505.d.

New ECCN 0D602: Software for Guns and Armament and Certain Related
Items

    New ECCN 0D602 would impose national security (NS Column 1),
regional stability (RS Column 1), United Nations (UN), and anti-
terrorism (AT Column 1) controls on ``software'' ``specially designed''
for the ``development,'' ``production,'' operation or maintenance of
commodities controlled by ECCNs 0A602 or 0B602.

New ECCN 0E501: Technology for Firearms and Certain Related Items

    New ECCN 0E501 would apply the national security (NS Column 1),
regional stability (RS Column 1), United Nations (UN) and anti-
terrorism (AT Column 1) reasons for control to ``technology''
``required'' for the ``development'' and ``production'' of firearms
other than shotguns. This new ECCN also would apply the anti-terrorism
and United Nations reasons for control to ``technology'' ``required''
for the operation, installation, maintenance, repair, or overhaul of
such firearms. Controlling this ``technology'' under the EAR rather
than the ITAR is appropriate because the ``technology'' for the
``development,'' ``production,'' operation, installation, maintenance,
repair, and overhaul of the firearms to be described in 0A501 is widely
available throughout the world and its possession does not confer a
significant military or intelligence advantage on the United States.

New ECCN 0E502: Technology for Shotguns

    New ECCN 0E502 would apply the crime control (CC Column 1) and
United Nations (UN) reasons for control to ``technology'' required for
the development or production of shotguns that would be controlled in
new ECCN 0A502. Crime control and United Nations are the reasons for
control currently imposed on ``technology'' required for the
``development'' or ``production'' of shotguns in ECCN 0E984. The only
difference between shotguns currently on the CCL and those that would
be added by this proposed rule is barrel length. BIS believes that
``technology'' related to shotguns does not vary significantly based on
the barrel length of the shotgun. Attempts to apply different reasons
for control or to control different types of technology based

solely on the barrel length of the shotgun would likely be ineffective.

New ECCN 0E504: Technology for Certain Optical Sighting Devices

    New ECCN 0E504 would replace existing ECCN 0E987, which controls
``technology'' ``required'' for the ``development,'' or ``production''
of certain commodities controlled by 0A504. The new ECCN number is
intended to make identifying items on the CCL easier by grouping
similar or related items closer to each other. New ECCN 0E504 would
also impose a United Nations (UN) control on the entire entry.

New ECCN 0E505: Technology for Ammunition and Related Items

    New ECCN 0E505 would impose national security (NS Column 1),
regional stability (RS Column 1), United Nations (UN), and anti-
terrorism (AT Column 1) controls on ``technology'' ``required'' for the
``development,'' ``production,'' operation, installation, maintenance,
repair, overhaul or refurbishing of commodities controlled by 0A505.a
and .x (rifle and pistol ammunition and ``parts'' and ``components);
0B505 equipment for those commodities; and ``software'' for that
equipment and those commodities controlled by 0D505. ``Technology'' for
the ``development'' or ``production'' of buckshot shotgun shells would
be controlled for crime control (CC Column 1) and UN reasons. United
Nations and anti-terrorism (AT Column 1) controls would apply to
``technology'' for the blank ammunition (controlled in 0A505.d) for
firearms controlled in ECCN 0A501 and to ``technology'' for that
ammunition and ``technology'' for ``software'' for that ammunition.
Inclusion of this ``technology'' on the CCL is appropriate because,
like the ammunition and production equipment addressed by this rule, it
is widely available, including in countries that are not allies of the
United States or members of multilateral export control regimes and
thus confers no military advantage on the United States.

New ECCN 0E602: Technology for Guns and Armament, Including Technology
for Test, Inspection and Production Equipment and Software for Guns and
Armament

    New ECCN 0E602 would impose national security (NS Column 1),
regional stability (RS Column 1), United Nations (UN), and anti-
terrorism (AT Column 1) controls on ``technology'' ``required'' for the
``development,'' ``production,'' operation, installation, maintenance,
repair, overhaul or refurbishing of commodities controlled by ECCNs
0A602 or 0B602, or ``software'' controlled by 0D602.

Revisions to Seven ECCNs

    To conform to new Federal Register Drafting Handbook requirements,
the amendatory instructions in this proposed rule would set forth the
entire text of the seven ECCNs to be revised. To help the public
understand what specific parts of the ECCNs would be different, the
narrative below describes the amendments in detail.

Revision to ECCN 0A018

    With the proposed removal of ECCN 0A984 and the addition of 0A502
described above, this proposed rule would make the conforming change of
removing and reserving 0A018.c since all the items classified in
0A018.c would be classified under other entries on the CCL. This change
includes the removal of the note to 0A018.c.

Revision to ECCN 0E982

    ECCN 0E982 controls ``technology'' exclusively for the
``development'' or ``production'' of equipment controlled by ECCN 0A982
or 0A985. This rule would replace ``0A985,'' which applies to discharge
type arms and some other crime control equipment, with 0A503 to conform
to the replacement of ECCN 0A985 with new ECCN 0A503 proposed elsewhere
in this rule.

Revision to ECCN 1A984

    To clarify an existing agency practice of controlling shotguns
shells that contain only chemical irritants under 1A984, this proposed
rule would revise the heading of 1A984. As described above, the same
type of clarification would be made to ECCN 0A505.c under new Note 1 to
paragraph (c). BIS considers these to be conforming changes to the
removal of ECCN 0A986 and the addition of ECCN 0A505.c in this proposed
rule.

Revisions to ECCN 2B004

    As a conforming change, this rule would replace the reference to
ECCN 2B018 in the related controls paragraph of ECCN 2B004 with
references to ECCNs 0B501, 0B602 and 0B606. This rule would make no
substantive changes to ECCN 2B004.

Revisions to ECCN 2B018

    This proposed rule would remove and reserve paragraphs .e, .f, .g,
.h, .i, .j, and .l from ECCN 2B018 because the commodities listed in
those paragraphs would be listed in ECCN 0B602. It would remove
paragraph .n, because the commodities listed in that paragraph would be
controlled under either ECCNs 0B501 or 0B602 or under existing ECCN
0B606 in this proposed rule. It would remove paragraphs .a through .d,
.m and .s, because the commodities listed in those paragraphs would be
controlled in ECCN 0B606. It would remove paragraphs .o, .p, .q, and .r
because the commodities listed in those paragraphs would be controlled
in ECCN 0B501. The commodities described in the MT control in ECCN
2B018 currently listed as MT are controlled elsewhere in the EAR, so no
additional changes are needed to add these commodities to other ECCNs.

Revisions to ECCN 2D018

    Currently ECCN 2D018 controls software for the ``development,''
``production'' or ``use'' of equipment controlled by ECCN 2B018. As a
conforming change, this rule would replace the control text of ECCN
2D018 with a statement referring readers to ECCNs 0D501, 0D602 and
0D606.

Revisions to ECCN 7A611

    As a conforming change, this rule would remove the reference to
0A987 in the Related Controls paragraph (2) and add in its place 0A504.

Removal of Nine ECCNs

Removal of ECCN 0A918

    ECCN 0A918 controls ``bayonets'' for regional stability, anti-
terrorism, and United Nations reasons. This proposed rule would remove
bayonets from ECCN 0A918 and add them to the .y paragraph of proposed
ECCN 0A501, where they would be subject to United Nations and anti-
terrorism (AT column 1) reasons for control. Bayonets and the
``technology'' to produce them are available in many countries.
Possession of bayonets does not confer a significant military advantage
on the United States and attempting to restrict their availability by
requiring a license for export to most destinations is unlikely to be
effective. Therefore, for these reasons, this proposed rule does not
retain a regional stability (RS column 2) control on bayonets because
it is no longer warranted.

Removal of ECCN 0A984

    This proposed rule would remove ECCN 0A984 because all of the
commodities that it currently controls would be controlled by either
proposed ECCN 0A502 or 0A505. As conforming changes, references to ECCN
0A984 would be replaced with references to ECCN 0A502 or 0A505 or both,
as appropriate in Sec. Sec.  742.7(a)(1), (2) and (3); 742.17(f) and
748.12(a)(1) and in ECCN 0A018.

Removal of ECCN 0A985

    This proposed rule would remove ECCN 0A985 because all of the
commodities that it currently controls would be controlled by proposed
ECCN 0A503. As conforming changes, references to ECCN 0A985 would be
replaced with references to ECCN 0A503 in Sec. Sec.  740.20(b)(2);
742.7(a)(4) and (c); 746.7(a) and ECCN 0E982.

Removal of ECCN 0A986

    This proposed rule would remove ECCN 0A986 because all of the
commodities that it currently controls would be controlled by proposed
0A505.c, including less than lethal rounds. As conforming changes,
references to ECCN 0A986 would be replaced with references to ECCN
0A505, as appropriate in Sec. Sec.  742.17(f); 742.19(a)(1);
746.3(b)(2) and 748.12(a)(1).

Removal of ECCN 0A987

    This proposed rule would remove ECCN 0A987 because proposed ECCN
0A504 would control all commodities currently controlled by ECCN 0A987.
As conforming changes, references to ECCN 0A987 would be replaced with
references to ECCN 0A504, as appropriate in Sec. Sec.
740.16(b)(2)(iv); 742.7(a)(1); 742.17(f); 744.9(a)(1) and (b); and
748.12(a)(1); and in ECCN 7A611.

Removal of ECCN 0B986

    This proposed rule would remove ECCN 0B986 because all of the
commodities that it controls would be controlled in proposed ECCN
0B505.c. As conforming changes, references to ECCN 0B986 would be
replaced with references to 0B505.c in Sec. Sec.  742.19(a) and 772.1,
definition of specially designed Note 1.

Removal of ECCN 0E918

    This proposed rule would remove ECCN 0E918, which controls
``technology'' for the ``development,'' ``production,'' or ``use'' of
bayonets for regional stability, United Nations, and anti-terrorism
reasons. Because ``technology'' for the ``development,''
``production,'' or ``use'' of bayonets is widely known, any attempt to
limit its dissemination through export license requirements is unlikely
to be effective.

Removal of ECCN 0E984

    This proposed rule would remove ECCN 0E984, which controls
``technology'' for the development of shotguns and buckshot shotgun
shells, because such ``technology'' would be controlled under proposed
ECCN 0E502 (shotguns) or 0E505 (buckshot shotgun shells). As a
conforming change, this proposed rule would replace a reference to ECCN
0E984 in Sec.  742.7(a) with references to ECCNs 0E502 and 0E505.

Removal of ECCN 0E987

    This proposed rule would remove ECCN 0E987 because proposed ECCN
0E504 would control all ``technology'' currently controlled by ECCN
0E987. As conforming change, references to ECCN 0E987 would be replaced
with references to ECCN 0E504, as appropriate in Sec. Sec.
740.20(b)(2)(ii) and 742.7(a)(1).

Conforming Change to General Order No. 5

    This proposed rule would amend General Order No. 5, paragraph
(e)(3) (Prior commodity jurisdiction determinations), in Supplement No.
1 to part 736, to add a reference in two places to the new 0x5zz ECCNs
that would be created by this rule. This change to paragraph (e)(3) is
a conforming change and is needed because paragraph (e)(3) now only
references the ``600 series'' and 9x515 ECCNs. 0x5zz ECCNs would
include new ECCN 0A501, 0A502, 0A505, 0B501, 0B505, 0D501, 0D505,
0E501, 0E502, 0E505. Paragraph (e)(2) is important because, for
example, it ensures that items previously determined to be ``subject to
the EAR'' and designated EAR99, would not be classified in a new ECCN
being created to control items moved from the USML to the CCL, unless
specifically enumerated by BIS in an amendment to the CCL. For example,
most swivels and scope mounts for firearms have previously been
determined through the CJ and classification process to not be
``subject to the ITAR'' and designated as EAR99. The classification of
such ``parts'' would not be changed, provided the ``part'' was not
subsequently changed, which would require a separate jurisdiction and
classification analysis.

Revisions to Regional Stability Licensing Policy for Firearms and
Ammunition That Would Be Added to the EAR

    This proposed rule would apply the regional stability licensing
policy set forth in Sec.  742.6(b)(1)(i) of the EAR to the items
controlled for regional stability reasons in ECCNs 0A501, 0A505, 0B501,
0B505, 0A504, 0D501, 0D505, 0E501, 0E504 and 0E505. That policy, which
also applies to ``600 series'' and 9x515 items is case-by-case review
``to determine whether the transaction is contrary to the national
security or foreign policy interests of the United States, including
the foreign policy interest of promoting the observance of human rights
throughout the world.'' This proposed rule would also revise the
regional stability licensing policy set forth in the last sentence of
paragraph (b)(1)(i) that is specific to the People's Republic of China
for 9x515 items. This proposed rule would add ECCNs 0A501, 0A504,
0A505, 0B501, 0B505, 0D501, 0D505, 0E501, 0E504, and 0E505 to this
sentence to specify that these firearms and related items will be
subject to a policy of denial when destined to the People's Republic of
China or a country listed in Country Group E:1. Lastly, this proposed
rule would add a sentence to the end of paragraph (b)(1)(i) to make it
explicit that applications for exports and reexports of ECCN 0A501,
0A504, 0A505, 0B501, 0B505, 0D501, 0D505, 0E501, 0E504, and 0E505 items
would be subject to a policy of denial when there is reason to believe
the transaction involves certain parties of concern. In addition,
transactions involving criminal organizations, rebel groups, street
gangs, or other similar groups or individuals, that may be disruptive
to regional stability, including within individual countries would be
subject to a policy of denial.

Availability of License Exceptions

    Many of the items in the new ``600 series'' ECCNs generally would
be eligible for the same license exceptions and subject to the same
restrictions on use of license exceptions as other ``600 series''
ECCNs. BIS intends that those restrictions be no more restrictive than
the ITAR license exemption restrictions that currently apply to those
items.
    For the ECCNs currently on the CCL that would be renumbered and
placed in closer proximity to the firearms-related items that would be
removed from the USML and added to the CCL, these existing firearms-
related items would continue to be eligible for the same EAR license
exceptions, as they were prior to publication of this rule, unless
otherwise restricted under Sec.  740.2, if the requirements of the
license exceptions are met.

License Exception: Shipments of Limited Value (LVS)

    Under this proposed rule, complete firearms controlled under ECCN
0A501 would not be eligible for License Exception LVS, 15 CFR 740.3.
Firearms ``parts,'' ``components,'' ``accessories,'' and
``attachments'' controlled under ECCN 0A501, other than receivers
(frames), and complete breech mechanisms, including castings, forgings
or stampings thereof, would be eligible for License Exception LVS, with

a limit of $500 on net value per shipment. In addition, receivers
(frames), and complete breech mechanisms, including castings, forgings
or stampings thereof, would be eligible for License Exception LVS if
the ultimate destination is Canada. These limits would be stated in the
License Exceptions paragraph of ECCN 0A501, and no revisions to the
text of the license exception itself would be needed to implement them.
BIS believes that this provision is generally consistent with the
license exemption for limited value shipments of firearms in the ITAR
(22 CFR 123.17(a)). This LVS proposal would be less restrictive than
the current ITAR provision in two respects. First, the value limit per
shipment would be $500 compared to $100 in the ITAR. Second, the LVS
proposal would allow exports of receivers and complete breech
mechanisms to Canada whereas Sec.  123.17(a) does not. However, the
$500 LVS limit is based on the actual selling price or fair market
value, whereas the ITAR $100 limit is based on ``wholesale'' value. BIS
believes that the LVS value standard is more precise and easier to
apply than the ITAR standard and is more in keeping with current
prices. In addition, with respect to Canada, an LVS limit of $500 per
shipment is needed to comply with the Section 517 of the Commerce,
Justice, Science, and Related Agencies Appropriations Act of 2015,
which prohibits expending any appropriated funds to require licenses
for the export of certain non-automatic firearms parts, components,
accessories and attachments to Canada when valued at under $500.
    Guns and armament and related items controlled under ECCN 0A602
would be eligible for License Exception LVS, with a limit of $500 net
value per shipment.
    Ammunition controlled under ECCN 0A505 would not be eligible for
License Exception LVS; however, ammunition parts and components would
be eligible with a limit of $100 net value per shipment.
    Test, inspection and production equipment controlled under ECCNs
0B501, 0B602 and 0B505 for firearms, guns and armament and ammunition/
ordnance would be eligible for License Exception LVS with a limit of
$3,000 net value per shipment, which is consistent with LVS eligibility
for most 600 series ECCNs.

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

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

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

    This proposed rule would revise the regulations at Sec.  740.11 to
limit the applicability of License Exception GOV for firearms,
``parts'' and ``components'' controlled by ECCN 0A501 and ammunition
controlled by 0A505 to exports, reexports and transfers for official
use by U.S. government agencies and official and personal use by U.S.
government employees (and the immediate families and household
employees of those government employees) (Sec.  740.11(b)(2)(i) and
(ii) of the EAR). This proposed authorization under License Exception
GOV would treat 0A501 firearms in the same manner that other items that
are subject to the EAR may be exported to U.S. government employees
under License Exception GOV. It would not impose certain restrictions
that are imposed by the current ITAR license exemption. The ITAR
exemption authorizes exports of only non-automatic firearms and
``parts'' and ``components.'' License Exception GOV would authorize
non-automatic and semi-automatic firearms and ``parts'' and
``components.''
    The ITAR exemption (22 CFR 123.18) authorizes shipments consigned
to and for the use of servicemen's clubs, and for service members or
civilian employees if the firearms are for personal use and the
shipment is accompanied by a written authorization from the commanding
officer concerned. The ITAR exemption also authorizes exports to other
U.S. government employees for personal use if the chief of the U.S.
diplomatic mission in the country of destination has approved in
writing to the Department of State the specific types and qualities of
firearms into that country. The exporter must present a copy of the
written statement to the CBP Port Director. License Exception GOV would
impose none of the foregoing limitations. BIS believes that the
limitations are unnecessary. The EAR control exports for national
security and foreign policy reasons. BIS believes that the restrictions
imposed in the ITAR exemption primarily pertain to concerns over the
security of U.S. government personnel and property located outside the
United States. Those concerns may be addressed more appropriately
through policies and procedures implemented by the U.S. government
agencies whose personnel and properties are located outside the United
States. Export license requirements are not needed to implement such
policies.
    All other items that are the subject of this rule would be subject
to the limits on use of License Exception GOV that apply to 600 series
items generally, i.e., Sec.  740.11(b)--to, for or on behalf of the
U.S. Government (including contractors, government employees, their
families and household employees) or Sec.  740.11(c) to a government in
Country Group A:1 cooperating governments or an agency of NATO.
However, this rule would add some additional restrictions for E:1 and
E:2 countries. This proposed rule would exclude the use of License
Exception GOV for any item listed in a 0x5zz ECCN for E:1 countries,
unless authorized under paragraph (b)(2)(i) or (ii) when the items are
solely for U.S. government official use. In addition, to better ensure
compliance with section 6(j) of the EAA and address concerns with
certain end users and uses in Country Group E:1 and E:2 countries, this
proposed rule would add a new Note 1 to paragraph (b)(2), which would
restrict the use of License Exception GOV for E:1 and E:2 countries for
multilaterally controlled items and anti-terrorism (AT) controlled
items when destined to certain end users or end uses of concern.

License Exception: Baggage (BAG)

    This proposed rule would revise License Exception BAG, Sec.
740.14, to allow United States citizens and permanent resident aliens
leaving the United States temporarily to take up to three firearms
controlled by proposed ECCN 0A501 and up to 1,000 rounds of ammunition
for such firearms controlled under ECCN 0A505.a for personal use while
abroad. This proposed change to License Exception BAG would be made to
be consistent with 22 CFR 123.17(c), which authorizes U.S. persons to
take up to three non-automatic firearms and up to 1,000 cartridges
therefor abroad for personal use. This proposed amendment to License
Exception BAG would apply to both non-automatic and semi-automatic
firearms. Consistent with the ITAR requirements previously applicable
to temporary exports of the firearms and associated ammunition covered
by this rule, BIS is proposing to modify Sec.  758.1 of the EAR to make
clear that exporters would continue to be required to file Electronic
Export Enforcement (EEI) to the Automated Export System (AES) for
transactions involving such firearms and associated ammunition that are
otherwise authorized pursuant to License Exception BAG. BIS is aware
that U.S. Customs and Border Protection (CBP) has temporarily suspended
the requirement to file EEI to the AES for personally-owned firearms
and ammunition that are ``subject to the ITAR'' being exported under 22
CFR 123.17(c), due to operational challenges related to implementation.
See the following CBP website page for additional information: https://
help.cbp.gov/app/answers/detail/a_id/323/~/traveling-outside-of-the-
u.s.---temporarily-taking-a-firearm%2C-rifle%2C-gun%2C. BIS is
proposing in this rule to ensure consistency with the current ITAR
filing requirements and any measures that are being used at this time
to track such temporary exports of personally-owned firearms and
ammunition. Whether and how BIS includes this requirement in a final
rule would be based on whether CBP is able to update its processes, and
other agencies as needed, to allow for individuals to easily file EEI
in AES by the time a final rule is published. If CBP is not able to do
so, then the final rule may direct exporters to continue to use CBP's
existing process, which is the use of the CBP Certification of
Registration Form 4457, until a workable solution is developed or CBP
suggests an alternative simplified solution for gathering such
information for temporary exports of personally-owned firearms and
ammunition. BIS will also take into consideration any public comments
submitted on this aspect of the proposed rule regarding imposing an EEI
filing requirement in AES, as well as comments on the current practice
of using the CBP Form 4457, as well as any other suggestions on
alternative approaches for tracking such information.
    Though BIS does not require prior authorization to use License
Exception BAG, in order to facilitate the physical movement and
subsequent importation of firearms authorized under this license
exception, this information would need to be collected by CBP by
requiring EEI filing in AES.
    Travelers leaving the United States temporarily would be required
to declare the 0A501 and 0A505 items to a CBP officer prior to
departure from the United States and present the firearms, ``parts,''
``components,'' ``accessories,'' ``attachments,'' and ammunition they
are exporting to the CBP officer for inspection, confirming that the
authority for the export is License Exception BAG, that the exporter is
compliant with its terms. Should exporters desire to contact CBP prior
to departure, contact information and a list of U.S. air, land and sea
ports of entry can be found at: http://www.cbp.gov/xp/cgov/toolbox/ports/.

    This proposed rule also would revise License Exception BAG to allow
nonresident aliens leaving the United States to take firearms,
``accessories,'' ``attachments,'' ``components,'' ``parts,'' and
ammunition controlled by ECCN 0A501 or 0A505 that they lawfully brought
into the United States. This change would be consistent with 22 CFR
123.17(d), which authorizes foreign persons leaving the United States
to take firearms and ammunition controlled under Category I(a) of the
USML (both non-automatic and semi-automatic) that they lawfully brought
into the United States. This proposed rule would not make changes to
the availability of License Exception BAG for shotguns and shotgun
shells authorized under paragraph (e)(1) or (2).
    As a clarification to License Exception BAG, this proposed rule
would add two sentences to the introductory text of paragraph (b)(4) to
highlight the special provisions that apply in paragraph (e) for
firearms and ammunition and in paragraph (h) for personal protective
equipment under ECCN 1A613.c or .d. These two sentences would not
change the existing requirement and have been included to assist the
public in better identifying these special provisions.

License Exception STA

    This proposed rule would revise the regulations at Sec.  740.20 to
make firearms controlled under ECCN 0A501 and most ``parts,''
``components,'' ``accessories,'' and ``attachments'' controlled under
ECCN 0A501 ineligible for License Exception STA. Only those ``parts,''
``components,'' ``accessories,'' and ``attachments'' that are
controlled under paragraph .x (i.e., those ``specially designed'' for
0A501 or ITAR-controlled firearms that are not specifically listed
either on the CCL or USML) are eligible for export under License
Exception STA. Items controlled under ECCNs 0A502 and 0A503 are also
excluded from STA eligibility.
    This proposed rule would exempt gun ``parts,'' ``components,''
``accessories'' and ``attachments'' controlled under ECCN 0A501.x;
test, inspection and production equipment and ``parts,''
``components,'' ``accessories'' and ``attachments'' in ECCN 0B501;
``software'' in 0D501; and ``technology'' in ECCN 0E501 from the
License Exception STA end-use limitation set forth in Sec.
740.20(b)(3)(ii) that applies to ``600 series'' items. That end-use
limitation is intended to ensure that the military-related items
controlled by most 600 series ECCNs are ultimately used by appropriate
agencies of the governments of certain U.S allies or multilateral
export control regime members. Because the aforementioned exempted
items are not of a military nature, the limitation is not necessary. As
a conforming change, this proposed rule also would remove ECCNs 0A985
and 0E987 in paragraph (b)(2)(ii) and add in their place 0A503 and
0E504. This change does not change the availability of License
Exception STA, but simply reflects the fact that these items would now
be controlled under ECCNs 0A503 and 0E504 and the License Exception STA
exclusion would continue to apply to them.

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

    This proposed rule would require that for commodities controlled by
ECCN 0A501 exported or reexported transactions for which a license
would be required, the exporter or reexporter must obtain, prior to
submitting an application, an import permit (or copy thereof) if the
importing country requires such permits for import of firearms. That
import permit would be a record that must be kept by the exporter or
reexporter as required by part 762 of the EAR. The purpose of this
requirement is to assure foreign governments that their regulations
concerning the importation of firearms are not circumvented. Obtaining
an import certificate or equivalent official document issued by member
states of the Organization of American States meets this requirement.
To implement this change, this proposed rule would revise Sec.  748.12
to include the commodities controlled under ECCNs 0A501 (except
0A501.y), 0A502, 0A504 (except 0A504.f) and 0A505 (except 0A505.d)
within the list of commodities that are subject to the requirement and
would add a new paragraph (e) requiring that import certificates or
permits be obtained from countries other than OAS member states if
those states require such a certificate or permit.

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

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

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

    In Sec.  743.4 (Conventional arms reporting), this rule would
revise paragraphs (c)(1)(i) and (c)(2)(i) to add ECCN 0A501.a and .b as
commodities that would require Wassenaar Arrangement reporting and
United Nations reporting under this conventional arms reporting section
of the EAR. This requirement would assist the United States Government
to meet its multilateral commitments for the special reporting
requirements for exports of certain items listed on the Wassenaar
Arrangement Munitions List and the UN Register of Conventional

Arms when these items are authorized for export under License
Exceptions LVS, TMP, RPL, STA, or GOV (see part 740 of the EAR) or the
Validated End User authorization (see Sec.  748.15 of the EAR) and for
United Nations reporting. License Exceptions LVS and STA are identified
in Sec.  743.4(b)(1), but because ECCN 0A501.a and .b commodities are
not eligible for those two license exceptions, the reporting
requirements under Sec.  743.4(c)(1)(i) and (c)(2)(i) would be limited
to exports authorized License Exceptions TMP, GOV and RPL or the
Validated End User authorization. This rule also adds contact
information for these reports.

Changes to Export Clearance Requirements for Firearms Being Moved to
the CCL

    In part 758 (Export Clearance Requirements), this rule would make
certain changes to clarify that a filing of Electronic Export
Information (EEI) to the Automated Export System (AES) would be
required for exports of the firearms transferred from the USML pursuant
to this rule regardless of value or destination, including exports to
Canada. As noted above, this requirement will also apply, as is
presently the case under the ITAR, for temporary exports of such items
pursuant to License Exception TMP or BAG.
    In addition, this rule proposes to expand the data elements
required as part of an AES filing for these items to include serial
numbers, make, model and caliber. This requirement would ensure law
enforcement officials are able to effectively verify that firearms
exports are properly authorized and in conformance with all applicable
regulations, including those associated with the temporary export and
subsequent return of controlled firearms and unused ammunition. Similar
to the description above regarding whether BIS would publish an EEI
filing requirement in AES for personally-owned firearms and ammunition
exported under License Exception BAG in the final rule, these expanded
data elements required as part of an AES filing would be included in
the final rule if CBP has made such data easily enterable in AES. If
the necessary changes were not made by the time the final rule was to
be published, CBP may continue to rely on CBP Form 4457 as described
above.

Entry Clearance Requirements for Temporary Imports

    Temporary imports are transactions that involve both the temporary
entry of an item into the U.S. from a foreign country and the
subsequent export of that item from the U.S. To preserve the treatment
of temporary import transactions for items in this rule that transfer
from the USML in the ITAR to become subject to the EAR, BIS would need
to create a process under the EAR to impose entry clearance
requirements for temporary imports of such items based on BIS's
authorities over U.S. exports.
    Therefore, BIS proposes a temporary imports entry clearance
requirement by adding new Sec.  758.10. This new section would be
limited to items in this rule that are both ``subject to the EAR'' and
on the USMIL in 27 CFR 447.21. To allow such items to temporarily enter
the U.S., this rule proposes a process to collect identifying
information for the sole purpose of tracking items being temporarily
imported for subsequent export. BIS would not impose a license
requirement for such imports, but this information would be necessary
to facilitate the export after a temporary import. The entry clearance
requirement would be an EAR requirement and any false representation
made under the new Sec.  758.10 would be a violation of the EAR.
    BIS is particularly interested in receiving comments on these
temporary import provisions in Sec.  758.10 and the subsequent export
under paragraph (b)(5) of License Exception TMP. A license requirement
is not being proposed for these temporary imports, but BIS is proposing
an entry clearance requirement whereby, as described above, the
exporter at the time of import would need to make a legal
representation to the U.S. Government under the EAR that the item was
being temporarily imported into the United States for subsequent export
under paragraph (b)(5) of License Exception TMP. BIS also welcomes
comments on whether there are advantages to how the ITAR regulates
temporary imports of USMIL items that should be incorporated into the
Commerce final rule.

Changes to EAR Recordkeeping Requirements for Firearms Being Moved to
the CCL

    In part 762 (Recordkeeping), this rule would make two changes to
the recordkeeping requirements under the EAR. These changes would
specify that certain records, that are already created and kept in the
normal course of business, must be kept by the ``exporter'' or any
other party to the transaction (see Sec.  758.3 of the EAR), that
creates or receives such records.
    Specifically, in Sec.  762.2 (Records to be retained), this rule
would redesignate paragraph (a)(11) as (a)(12) and add a new paragraph
(a)(11) to specify the following information must be kept as an EAR
record: Serial number, make, model, and caliber for any firearm
controlled in ECCN 0A501.a and for shotguns with barrel length less
than 18 inches controlled in 0A502. The ``exporter'' or any other
``party to the transaction'' that creates or receives such records
would be the person responsible for retaining this record.
    In Sec.  762.3 (Records exempt from recordkeeping requirements),
this rule would narrow the scope of an exemption from the EAR
recordkeeping requirements for warranty certificates. This rule would
narrow this exclusion to specify the exclusion from the recordkeeping
requirements does not apply (meaning the record would need to be kept
under the recordkeeping requirements) for warranty certificates for any
firearm controlled in ECCN 0A501.a and for shotguns with barrel length
less than 18 inches controlled in 0A502, when the certificate issued is
for an address located outside the United States. This would be an
expansion of the EAR recordkeeping requirements, but because warranty
certificates are already created and kept as part of normal business
recordkeeping purposes, this expansion is not anticipated to create any
new or increased burden under the EAR, because it is a document that is
created in the normal course of business and are records that should be
easily accessible. These recordkeeping requirements would assist the
United States Government because this information is important to have
access to for law enforcement concerns for these types of items.
    The public may submit comments on whether they agree with this BIS
determination that these changes described above to the EAR
recordkeeping requirements would not result in increased burdens under
the EAR.

Alignment With the Wassenaar Arrangement Munitions List

    This rule maintains the alignment with respect to firearms, guns
and armament, and ammunition that exists between the USML and the WAML.
USML Category I firearms that would be added to the CCL under ECCN
0A501 are controlled under category ML1 of the WAML. USML Category II
guns and armament that would be added to the CCL under 0A602 are
controlled under WAML category ML2.
    Rather than strictly following the Wassenaar Arrangement Munitions
List pattern of placing production

equipment, ``software'' and ``technology'' for munitions list items in
categories ML 18, ML 21 and ML 22, respectively, this rule follows the
existing CCL numbering pattern for test, inspection and production
equipment (0B501, 0B602 and 0B505), ``software'' (0D501, 0D602 and
0D505) and ``technology'' (0E501, 0E602 and 0E505). BIS believes that
including the ECCNs for test, inspection and production equipment,
``software,'' and ``technology'' in the same category as the items to
which they relate results in an easier way to understand the CCL than
using separate categories.
    BIS believes that the controls in proposed ECCNs 0A501, 0A602 and
0A505 are consistent with controls imposed by the Wassenaar
Arrangement.

Appropriate Delayed Effective Date for a Final Rule

    BIS also invites comments from the public on the appropriate
delayed effective date needed to prepare for the changes included in
this proposed rule if published in final form. A 180-day delayed
effective date was used for many of the other rules that moved items
from the USML to the CCL, but certain rules included shorter delayed
effective dates. BIS requests the public to provide comments on whether
180-delayed effective date is warranted, or if some shorter period,
such as 90-day delated effective date is warranted for this proposed
rule if published in final form.

Request for Comments

    All comments on this proposed rule must be in writing and submitted
via the Federal rulemaking portal www.regulations.gov or by mail or
delivery to the address identified in the addresses section of this
proposed rule. All comments (including any personal identifiable
information) would be available for public inspection and copying.
Anyone wishing to comment anonymously may do so by leaving the fields
for information that would identify the commenter blank.

Export Administration Act

    Although the Export Administration Act of 1979 expired on August
20, 2001, the President, through Executive Order 13222 of August 17,
2001, 3 CFR, 2001 Comp., p. 783 (2002), as amended by Executive Order
13637 of March 8, 2013, 78 FR 16129 (March 13, 2013) and as extended by
the Notice of August 15, 2017, 82 FR 39005 (August 16, 2017), has
continued the Export Administration Regulations in effect under the
International Emergency Economic Powers Act. BIS continues to carry out
the provisions of the Export Administration Act of 1979, as appropriate
and to the extent permitted by law, pursuant to Executive Order 13222,
as amended by Executive Order 13637.

Executive Order Requirements

    Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distribute impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This proposed rule has been designated a ``significant
regulatory action,'' although not economically significant, under
section 3(f) of Executive Order 12866. Although the items identified in
this proposed rule have been determined to no longer warrant ITAR
control by the President, the proliferation of such items has been
identified as a threat to domestic and international security if not
classified and controlled at the appropriate level under the EAR.
Commerce estimates that the combined effect of all rules to be
published adding items removed from the ITAR to the EAR would increase
the number of license applications to be submitted to BIS by
approximately 30,000 annually.
    This proposed rule does not contain policies with Federalism
implications as that term is defined under E.O. 13132.
    To control these items under the EAR that no longer warrant ITAR
control, appropriate controls on the CCL needed to be included in the
Department of Commerce proposed rule. This includes creating new ECCNs
and revising certain existing ECCNs, as well as making other changes to
the EAR to control items that would be moved from these three USML
categories to the CCL once the section 38(f) notification process is
completed and a final rule is published and becomes effective. Adding
new controls and other requirements to the EAR imposes regulatory
burdens on exporters and some other parties involved with those items,
but compared to the burdens these exporters and other parties faced
under the ITAR, these regulatory burdens, including financial costs,
would be reduced significantly. The EAR is a more flexible regulatory
structure whereby the items can still be controlled appropriately, but
in a much more efficient way that would significantly reduce the
burdens on exporters and other parties compared to the regulatory
burdens they faced when the item were ``subject to the ITAR.''
Deregulatory does not mean a decontrol of these items.
    For those items in USML Categories I, II and III that would move by
this rule to the CCL, BIS would be collecting the necessary information
using the form associated with OMB Control No. 0694-0088. BIS estimates
that this form takes approximately 43.8 minutes for a manual or
electronic submission. Using the State Department's estimate that
10,000 applicants annually would move from the USML to the CCL and
BIS's estimate that 6,000 of the 10,000 applicants would require
licenses under the EAR, that constitutes a burden of 4,380 hours for
this collection under the EAR. Those companies are currently using the
State Department's forms associated with OMB Control No. 1405-0003 for
which the burden estimate is 1 hour per submission, which for 10,000
applications results in a burden of 10,000 hours. Thus, subtracting the
BIS burden hours of 4,380 from the State Department burden hours of
10,000, the burden is reduced by 5,620 hours. The other 4,000
applicants may use license exceptions under the EAR or the ``no license
required'' designation, so these applicants would not be required to
submit license applications under the EAR.
    In addition to the reduced burden hours of 5,620 hours, there would
also be direct cost savings to the State Department that would result
from the 10,000 license applications no longer being required under the
ITAR once these items are moved to the EAR. The Department of State
charges a registration fee to apply for a license under the ITAR.
Pursuant to the AECA, ITAR, and associated delegations of authority,
every person who engages in the business of brokering activities,
manufacturing, exporting, or temporarily importing any defense articles
or defense services must register with the Department of State and pay
a registration fee. The Department of State adopted the current fee
schedule to align the registration fees with the cost of licensing,
compliance and other related activities. The Department of Commerce
would incur additional costs to administer these controls and process
license applications. However, the Department of Commerce does not
charge a registration fee to apply for a license under the EAR, and we
are unable to estimate the increase in costs to the Department of
Commerce to process the new license applications.

Therefore, we are unable to provide an estimate of the net change in
resource costs to the government from moving these items from the ITAR
to the EAR. It is the case, however, that the movement of these items
from the ITAR would result in a permanent and recurring direct transfer
of $2,500,000 per year from the government to the exporting public,
less the increased cost to taxpayers, because they would no longer pay
fees to the State Department for licenses and there is no fee charged
by the Department of Commerce to apply for a license.

Estimated Cost Savings

    For purposes of E.O. 13771 of January 30, 2017 (82 FR 9339), the
Department of State and Department of Commerce proposed rules are
expected to be ``net deregulatory actions.'' The Department of Commerce
has conducted this analysis in close consultation with the Department
of State, because of how closely linked the two proposed rules are for
the regulated public and the burdens imposed under the U.S. export
control system.
    E.O. 13771 and guidance provided to the agencies on interpreting
the intended scope of the E.O. do not use the term ``net deregulatory
action,'' but rather refer to deregulatory actions. As outlined above,
the Departments of State and Commerce proposed rules are closely linked
and are best viewed as a consolidated regulatory action although being
implemented by two different agencies. Also, as noted above, items may
not be subject to both sets of regulations. Therefore, the movement of
a substantial number of items from the USML determined to no longer
warrant ITAR control to the CCL would result in a significant reduction
of regulatory burden for exporters and other persons involved with such
items that were previously ``subject to the ITAR.''
    The Departments of State and Commerce for purposes of E.O. 13771
have agreed to equally share the cost burden reductions that would
result from the publication of these two integral regulatory actions.
The Department of State would receive 50% and the Department of
Commerce would receive 50% for purposes of calculating the deregulatory
benefit of these two integral regulatory actions.
    Under this agreed formulation, the burden reductions will be
calculated as follows:
    For purposes of the Department of Commerce, the ``net deregulatory
actions'' would result in a permanent and recurring cost savings of
$1,250,000 per year, and a reduction in burden hours by 2,810 hours.
The reduction in burden hours by 2,810 would result in an additional
cost savings of \1\ $126,281 to the exporting public. Therefore, the
total dollar cost savings would be $1,376,281 for purposes of E.O.
13771 for the Department of Commerce.
---------------------------------------------------------------------------

    \1\ The Department of Commerce used the Department of State's
estimate that the burden hour cost for completing a license
application is $44.94 per hour. Multiplied by the estimated burden
hour savings of 2,810 equals a cost savings to the public of
$126,281.
---------------------------------------------------------------------------

    For purposes of the Department of State, the ``net deregulatory
actions'' would result in a permanent and recurring cost savings of
$1,250,000 per year, and a reduction in burden hours by 2,810 hours.
The reduction in burden hours by 2,810 would result in an additional
cost savings of $126,281 to the exporting public. Therefore, the total
dollar cost savings would be $1,376,281 for purposes of E.O. 13771 for
the Department of State.
    The Department of Commerce welcomes comments from the public on the
analysis under E.O. 13771 described here. Comments from companies that
would no longer need to register with the Department of State because
the company only deals with items under USML Category I, II, and/or III
that would move to the CCL would be particularly helpful for the
Department of Commerce and Department of State to receive. Comments are
also encouraged on any of the other collections that may be relevant
for the items that would move from the USML to the CCL. In particular,
data on Department of State forms that would no longer need to be
submitted would be helpful to receive.

Paperwork Reduction Act Requirements

    Notwithstanding any other provision of law, no person may be
required to respond to or be subject to a penalty for failure to comply
with a collection of information, subject to the requirements of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless
that collection of information displays a currently valid OMB control
number.
    This proposed regulation involves four collections currently
approved by OMB under these BIS collections and control numbers:
Simplified Network Application Processing System (control number 0694-
0088), which includes, among other things, license applications;
License Exceptions and Exclusions (control number 0694-0137); Import
Certificates and End-User Certificates (control number 0694-0093); Five
Year Records Retention Period (control number 0694-0096); and the U.S.
Census Bureau collection for the Automated Export System (AES) Program
(control number 0607-0152).
    This proposed rule would affect the information collection, under
control number 0694-0088, associated with the multi-purpose application
for export licenses. This collection carries a burden estimate of 43.8
minutes for a manual or electronic submission for a burden of 31,833
hours. BIS believes that the combined effect of all rules to be
published adding items removed from the ITAR to the EAR that would
increase the number of license applications to be submitted by
approximately 30,000 annually, resulting in an increase in burden hours
of 21,900 (30,000 transactions at 43.8 minutes each) under this control
number. For those items in USML Categories I, II and III that would
move by this rule to the CCL, the State Department estimates that
10,000 applicants annually will move from the USML to the CCL. BIS
estimates that 6,000 of the 10,000 applicants would require licenses
under the EAR, resulting in a burden of 4,380 hours under this control
number. Those companies are currently using the State Department's
forms associated with OMB Control No. 1405-0003 for which the burden
estimate is 1 hour per submission, which for 10,000 applications
results in a burden of 10,000 hours. Thus, subtracting the BIS burden
hours of 4,380 from the State Department burden hours of 10,000, the
burden would be reduced by 5,620 hours. (See the description above for
the E.O. 13771 analysis for additional information on the cost benefit
savings and designation of the two rules as ``net deregulatory
actions''.)
    This proposed rule would also affect the information collection
under control number 0694-0137, addressing the use of license
exceptions and exclusions. Some parts and components formerly on the
USML, and ``software'' and ``technology'' for firearms and their parts
and components formerly on the USML, would become eligible for License
Exception STA under this proposed rule. Additionally, test, inspection
and production equipment and ``software'' and ``technology'' related to
those firearms and ``parts'' may become eligible for License Exception
STA. BIS believes that the increased use of License Exception STA
resulting from the combined effect of all rules to be published adding
items removed from the ITAR to the EAR would increase the burden
associated with control number 0694-0137 by about 23,858 hours (20,450
transactions at 1 hour and 10 minutes each).

    BIS expects that this increase in burden as a result of the
increased use of License Exception STA would be more than offset by a
reduction in burden hours associated with approved collections related
to the ITAR. This proposed rule addresses controls on firearms and
``parts,'' production equipment and ``parts'' and related ``software''
and ``technology'' and specifically non-automatic and semi-automatic
firearms and their ``parts'' and ``parts,'' ``components,''
``attachments,'' and ``accessories'' that are used in both semi-
automatic and fully automatic firearms. BIS has made this determination
on the basis that with few exceptions, the ITAR allows exemptions from
license requirements only for exports to Canada, and requires a
specific State Department authorization for most exports of firearms
used for hunting and recreational purposes and exports of ``parts,''
``components,'' ``attachments,'' and ``accessories'' that are common to
military fully automatic firearms and their semi-automatic civilian
counterparts, even when destined to NATO and other close allies and
also requires State Department authorization for the exports necessary
to produce ``parts'' and ``components'' for defense articles in the
inventories of the United States and its NATO and other close allies.
However, under the EAR, as specified in this proposed rule, a number of
low-level parts would be eligible for export under License Exception
STA and would therefore not require a license to such destinations.
    This proposed rule would also affect the information collection
under control number 0694-0096, for the five-year recordkeeping
retention because of two changes this rule would make to part 762 of
the EAR. This rule would add a new paragraph (a)(55) to specify the
following information must be kept as an EAR record: Serial number,
make, model, and caliber for any firearm controlled in ECCN 0A501.a and
for shotguns with barrel length less than 18 inches controlled in
0A502. This rule would also require warranty certificates for these
items to be retained for EAR recordkeeping. However, because these
records are already created and kept as part of normal business
recordkeeping, this expansion is not anticipated to create any new or
increased burden under the EAR.
    Even in situations in which a license would be required under the
EAR, the burden would likely be reduced compared to a license
requirement under the ITAR. In particular, license applications for
exports of ``technology'' controlled by ECCN 0E501 would likely be less
complex and burdensome than the authorizations required to export ITAR-
controlled technology, i.e., Manufacturing License Agreements and
Technical Assistance Agreements (as a result of the differences in the
scope of the ITAR's and the EAR's technology controls).
    This proposed rule would affect the information collection under
control number 0694-0093, import certificates and end-user certificates
because of the changes included in this proposed rule. First, this
regulation would require that for shipments requiring a license of
firearms, ``parts,'' ``components,'' ``accessories,'' and
``attachments'' controlled under ECCN 0A501, the exporter obtain a copy
of the import certificate or permit if the importing country requires
one for importing firearms. License applications for which an import or
end-user certificate is already required under Sec.  748.12 of the EAR
would not be subject to this new requirement. BIS expects that this
requirement would result in no change in the burden under control
number 0694-0093. Second, this proposed rule also would require that
prior to departure, travelers leaving the United States and intending
to temporarily export firearms, parts, and components controlled under
ECCN 0A501 under License Exception BAG declare the firearms and parts
to a CBP officer and present the firearms and parts to the CBP officer
for inspection. As the State Department also requires that persons
temporarily exporting firearms, parts and components declare the items
to CBP, BIS does not expect that the requirement in this proposed rule
would result in a change in burden under control number 0694-0093.
    Third, this proposed rule would affect the information collection
under control number 0694-0093 by creating a new temporary import entry
clearance requirement by adding Sec.  758.10. This new section would be
limited to items in this rule that are both ``subject to the EAR'' and
on the United States Munitions List (USMIL) in 27 CFR 447.21. To allow
such items to temporarily enter the U.S., this rule proposes a process
to collect identifying information for the sole purpose of tracking
items being temporarily imported for subsequent export under License
Exception TMP. BIS would not impose a license requirement for such
imports, but collecting this information would be necessary to
facilitate the export after a temporary import. The temporary import
entry clearance requirement in Sec.  758.10 would also conform to the
requirement in License Exception TMP under Sec.  740.9(b)(5), so
providing this information to CBP at the entry after a temporary import
would facilitate the export phase of a temporary import under License
Exception TMP. At the time of entry for a temporary import, the
importer would need to provide a statement to CBP indicating that this
shipment was being temporarily imported in accordance with the EAR for
subsequent export in accordance with and under the authority of License
Exception TMP. The entry clearance requirement would be an EAR
requirement and any false representation made under the new Sec.
758.10 would be a violation of the EAR. The importer would also need to
provide CBP an invoice or other appropriate import-related
documentation (or electronic equivalents) that includes a complete list
and description of the items being imported, including their model,
make, caliber, serial numbers, quantity, and U.S. dollar value. If
imported for a trade show, exhibition, demonstration, or testing, the
temporary importer would need to provide CBP with the relevant
invitation or registration documentation for the event and an
accompanying letter that details the arrangements to maintain effective
control of the firearms while they are temporarily in the United
States. Lastly, at the time of exportation, as requested by CBP, the
exporter, or an agent acting on his or her behalf, would have to
provide the entry document number or a copy of the CBP document under
which the ``item'' ``subject to the EAR'' on the USMIL was temporarily
imported under this proposed entry clearance requirement. As the State
Department also requires that persons temporarily importing items in
this rule provide the same type of information to CBP, BIS expects that
the requirement in this proposed rule would result in a change in
burden under control number 0694-0093, but because of the decrease
under the burden imposed under the State collection the burden on the
public will not change.
    This proposed rule would also affect the information collection
under control number 0607-0152, for filing EEI in AES because of one
change this rule would make to part 758 of the EAR. Under new paragraph
(b)(10), EEI would be required for all exports of items controlled
under ECCNs 0A501.a or .b, shotguns with a barrel length less than 18
inches controlled under ECCN 0A502, or ammunition controlled under ECCN
0A505 except for .c, regardless of value or destination, including
exports to Canada. Exports of these USML firearms and ammunition prior
to

moving to the CCL required filing EEI in AES for all items ``subject to
the ITAR,'' so the burden in this collection would not change for the
exporter. For some exporters, however, there may be an EEI filing
requirement that would otherwise not have existed, such as for the
export of a firearm that would be controlled under ECCN 0A501.a
authorized under License Exception BAG or the export of certain
firearms or ammunition to Canada.
    The proposed rule would include a requirement that, for all exports
of items controlled under ECCNs 0A501.a or .b, or shotguns with a
barrel length less than 18 inches controlled under ECCN 0A502, in
addition to any other required data for the associated EEI filing
requirements, the exporter provide to CBP the serial number, make,
model, and caliber for each firearm being exported. The Department of
Commerce is carrying over the existing CBP filing requirements for
items transferred from the USML to the CCL. The Department of Homeland
Security currently is collecting these data elements for firearms
``subject to the ITAR'' under OMB Control Number 1651-0010 (CBP Form
4457, Certificate of Registration for Personal Effects Taken Abroad).
There is no change to the information being collected or to the burden
hours as a result of this rule. Separate from this rule, CBP will
update the information collection to reflect the use of AES or some
other simplified electronic alternative to CBP Form 4457.
    Any comments regarding the collection of information associated
with this proposed rule, including suggestions for reducing the burden,
may be sent to Jasmeet K. Seehra, Office of Management and Budget
(OMB), by email to [email protected], or by fax to (202)
395-7285.

Administrative Procedure Act and Regulatory Flexibility Act
Requirements

    The Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C.
601 et seq., generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to the notice and comment
rulemaking requirements under the Administrative Procedure Act (5
U.S.C. 553) or any other statute, unless the agency certifies that the
proposed rule would not have a significant economic impact on a
substantial number of small entities. Under section 605(b) of the RFA,
however, if the head of an agency certifies that a proposed rule would
not have a significant impact on a substantial number of small
entities, the statute does not require the agency to prepare a
regulatory flexibility analysis. Pursuant to section 605(b), the Chief
Counsel for Regulation, Department of Commerce, submitted a memorandum
to the Chief Counsel for Advocacy, Small Business Administration,
certifying that this proposed rule would not have a significant impact
on a substantial number of small entities.

Number of Small Entities

    The Bureau of Industry and Security (BIS) does not collect data on
the size of entities that apply for and are issued export licenses.
Although BIS is unable to estimate the exact number of small entities
that would be affected by this proposed rule, it acknowledges that this
proposed rule would affect some unknown number.

Economic Impact

    This proposed rule and the companion State rule would assist in
making the United States Munitions List (22 CFR part 121) (USML) into a
more ``positive'' list, i.e., a list that does not use generic, catch-
all controls on any ``part,'' ``component,'' ``accessory,''
``attachment,'' or ``end item'' that was in any way specifically
modified for a defense article, regardless of the article's military or
intelligence significance or non-military applications. At the same
time, articles that are determined no longer to warrant control on the
USML would become controlled on the Commerce Control List (CCL). Such
items, along with certain military items that currently are on the CCL,
would be identified in specific Export Control Classification Numbers
(ECCNs) known as the ``600 series'' ECCNs. In addition, some items
currently on the CCL would move from existing ECCNs to the new ``600
series'' ECCNs. This proposed rule addresses USML Category I, II and
III articles that would be removed from the USML and added to the CCL.
    Category I of the USML, entitled ``Firearms, Close Assault Weapons
and Combat Shotguns,'' consists of small arms (typically up to a
caliber of 0.50 inches) and related parts, components, accessories,
attachments, production equipment, software, and technology. Fully
automatic firearms would remain on the USML as would parts and
components that are used only in fully automatic firearms. However,
non-automatic and semi-automatic firearms, their parts and components
and the parts and components common to them and to fully automatic
firearms would become subject to the EAR. Department of State officials
have informed BIS that license applications for such parts and
components are a high percentage of the license applications for USML
articles reviewed by that department. Such parts and components are
more likely to be produced by small businesses than are complete
firearms.
    Category II of the USML, entitled ``Guns and Armament,''
encompasses large guns (caliber over 0.50 inches) such as howitzers,
mortars, cannon and recoilless rifles along with related parts,
components, accessories, attachments, production equipment, software
and technology. Modern large guns would remain on the USML. Guns and
armament manufactured between 1890 and 1919 would be controlled on the
CCL. Unless specified elsewhere on the CCL or the USML, ``parts,''
``components,'' ``accessories,'' ``attachments,'' production equipment,
``software'' and ``technology'' for large guns would be controlled on
the CCL.
    Category III of the USML, entitled ``Ammunition/Ordnance,''
encompasses ammunition for a wide variety of firearms that may have
military, law enforcement or civilian applications. Ammunition that has
only or primarily military applications would remain on the USML as
would parts, production equipment, ``software'' and ``technology''
therefor. Ammunition for firearms that have primarily civilian and
sporting application and ammunition that is used in civilian, law
enforcement and military small arms would move to the CCL. In most
instances, these firearms have a caliber of 0.50 inches or less
although ammunition for manual firearms with a caliber up to 0.72
inches is included. The proposed rule also applies to ``parts,''
``components,'' production equipment, and ``technology'' related to
that ammunition.
    Changing the jurisdictional status of the articles described in
this proposed rule would reduce the burden on small entities (and other
entities as well) through elimination of some license requirements,
simpler license application procedures, and reduced (or eliminated)
registration fees. In addition, small entities would be able to take
advantage of de minimis treatment under the EAR for all items that this
proposed rule would transfer from the USML to the CCL, provided those
items meet the applicable de minimis threshold level. In practice, the
greatest impact of this proposed rule on small entities would likely be
reduced administrative costs and reduced delay for exports of items
that are now on the USML but would become subject to the EAR.
    Small entities (and other entities as well) that are affected by
this proposed

rule would benefit from the elimination of some license requirements
implemented by this proposed rule. Six types of ``parts'' and
``components,'' identified in ECCN 0A501.y, would be designated
immediately as ``parts'' and ``components'' that, even if ``specially
designed'' for a military use or a Category I firearm, have little or
no military significance. These ``parts'' and ``components,'' which
under the ITAR require a license to nearly all destinations would,
under the EAR, require a license to Cuba, Iran, Sudan, North Korea,
Syria and the People's Republic of China as well as to destinations
subject to United Nations arms embargoes.
    Furthermore, many exports and reexports of Category I firearms
along with ``parts'' and ``components'' that would be placed on the CCL
by this proposed rule, would become eligible for license exceptions
that apply to shipments to United States government agencies, shipments
valued at $500 or less, ``parts'' and ``components'' being exported for
use as replacement parts, and temporary exports. Similarly, exports and
reexports of Category II firearms ``parts,'' ``components,''
``accessories,'' and ``attachments'' that would be placed on the CCL by
this proposed rule would become eligible for those license exceptions,
although the value limit would be $3,000. Category III ammunition
placed on the CCL by this proposed rule would also become eligible with
a value limit of $100.
    Even for exports and reexports in which a license would be
required, the process would be simpler and less costly under the EAR.
When a USML Category I, II, or III article is moved to the CCL, the
number of destinations for which a license is required would remain
largely unchanged. However, the burden on the license applicant would
decrease because the licensing procedure for CCL items is simpler and
more flexible than the licensing procedure for USML defense articles.
    Under the USML licensing procedure, an applicant must include a
purchase order or contract with its application. There is no such
requirement under the CCL licensing procedure. This difference gives
the CCL applicant at least two advantages. First, the applicant has a
way of determining whether the U.S. Government would authorize the
transaction before it enters into potentially lengthy, complex and
expensive sales presentations or contract negotiations. Under the USML
licensing procedure, the applicant would need to caveat all sales
presentations with a reference to the need for government approval and
would more likely have to engage in substantial effort and expense with
the risk that the government might reject the application. Second, a
CCL license applicant need not limit its application to the quantity or
value of one purchase order or contract. It may apply for a license to
cover all of its expected exports or reexports to a particular
consignee over the life of a license, reducing the total number of
licenses for which the applicant must apply.
    In addition, many applicants exporting or reexporting items that
this proposed rule would transfer from the USML to the CCL would
realize cost savings through the elimination of some or all
registration fees currently assessed under the ITAR. This is
particularly relevant to small- and medium-sized companies that
manufacture or export parts and components for Category I firearms.
Registration fees for manufacturers and exporters of articles on the
USML start at $2,250 per year, increase to $2,750 for organizations
applying for one to ten licenses per year and further increase to
$2,750 plus $250 per license application (subject to a maximum of three
percent of total application value) for those who need to apply for
more than ten licenses per year. There are no registration or
application processing fees for applications to export items currently
listed on the CCL. Once the items that are the subject to this proposed
rulemaking are removed from the USML and added to the CCL, entities
currently applying for licenses from the Department of State could find
their registration fees reduced if the number of USML licenses those
entities need declines. If an entity's entire product line is moved to
the CCL, then its ITAR registration and registration fee requirement
would be eliminated.
    Finally, de minimis treatment under the EAR would become available
for all items that this proposed rule would transfer from the USML to
the CCL. Items subject to the ITAR remain subject to the ITAR when they
are incorporated abroad into a foreign-made product regardless of the
percentage of U.S. content in that foreign-made product. This proposed
rule would apply that same principle to ``600 series'' items only if
the foreign-made item is being exported to a country that is subject to
a United States arms embargo. In all other cases, foreign-made products
that incorporate items that this proposed rule would move to the CCL
would be subject to the EAR only if their total controlled U.S.-origin
content exceeded 25 percent. Because including small amounts of U.S.-
origin content would not subject foreign-made products to the EAR,
foreign manufacturers would have less incentive to avoid such U.S.-
origin ``parts'' and ``components,'' a development that potentially
would mean greater sales for U.S. suppliers, including small entities.
    For items currently on the CCL that would be moved from existing
ECCNs to the new ``600 series,'' license exception availability would
be narrowed somewhat. However, BIS believes that the increased burden
imposed by those actions would be offset substantially by the reduction
in burden attributable to the moving of items from the USML to CCL and
the compliance benefits associated with the consolidation of all WAML
items subject to the EAR in one series of ECCNs.

Conclusion

    BIS is unable to determine the precise number of small entities
that would be affected by this proposed rule. Based on the facts and
conclusions set forth above, BIS believes that any burdens imposed by
this proposed rule would be offset by a reduction in the number of
items that would require a license, simpler export license
applications, reduced or eliminated registration fees, and application
of a de minimis threshold for foreign-made items incorporating U.S.-
origin ``parts'' and ``components,'' which would reduce the incentive
for foreign buyers to design out or avoid U.S.-origin content. For
these reasons, the Chief Counsel for Regulation of the Department of
Commerce certified to the Chief Counsel for Advocacy of the Small
Business Administration that this proposed rule, if adopted in final
form, would not have a significant economic impact on a substantial
number of small entities.

List of Subjects

15 CFR Parts 736 and 772

    Exports.

15 CFR Parts 740 and 748

    Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.

15 CFR Part 742

    Exports, Terrorism.

15 CFR Part 743

    Administrative practice and procedure, Reporting and recordkeeping
requirements.

15 CFR Part 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

15 CFR Parts 746 and 774

    Exports, Reporting and recordkeeping requirements.

15 CFR Part 758

    Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.

15 CFR Part 762

    Administrative practice and procedure, Business and industry,
Confidential business information, Exports, Reporting and recordkeeping
requirements.

    For the reasons stated in the preamble, parts 736, 740, 742, 743,
744, 746, 748, 758, 762, 772 and 774 of the Export Administration
Regulations (15 CFR parts 730-774) are proposed to be amended as
follows:

PART 736--GENERAL PROHIBITIONS

0
1. The authority citation for 15 CFR part 736 is revised to read as
follows:

    Authority:  50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22
U.S.C. 2151 note; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p.
950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026,
61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3
CFR, 2001 Comp., p. 783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp.,
p. 168; Notice of May 9, 2017, 82 FR 21909 (May 10, 2017); Notice of
August 15, 2017, 82 FR 39005 (August 16, 2017); Notice of November
6, 2017, 82 FR 51971 (November 8, 2017).

0
2. Supplement No. 1 to part 736 is amended by revising paragraph (e)(3)
to read as follows:

Supplement No. 1 to Part 736--General Orders

* * * * *
    (e) * * *
    (3) Prior commodity jurisdiction determinations. If the U.S. State
Department has previously determined that an item is not subject to the
jurisdiction of the ITAR and the item was not listed in a then existing
``018'' series ECCN (for purposes of the ``600 series'' ECCNs, or the
0x5zz ECCNs) or in a then existing ECCN 9A004.b or related software or
technology ECCN (for purposes of the 9x515 ECCNs), then the item is per
se not within the scope of a ``600 series'' ECCN, a 0x5zz ECCN, or a
9x515 ECCN. If the item was not listed elsewhere on the CCL at the time
of such determination (i.e., the item was designated EAR99), the item
shall remain designated as EAR99 unless specifically enumerated by BIS
or DDTC in an amendment to the CCL or to the USML, respectively.
* * * * *

PART 740--LICENSE EXCEPTIONS

0
3. The authority citation for 15 CFR part 740 continues to read as
follows:

    Authority: 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22
U.S.C. 7201 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p.
228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of
August 15, 2017, 82 FR 39005 (August 16, 2017).

0
4. Section 740.9 is amended by:
0
a. Adding five sentences at the end of paragraph (a) introductory text;
0
b. Adding one sentence at the end of paragraph (b)(1) introductory
text;
0
c. Adding paragraph (b)(5); and
0
d. Redesignating notes 1 through 3 to paragraph (b) as notes 2 through
4 to paragraph (b);
    The additions read as follows:

Sec.  740.9   Temporary imports, exports, reexports, and transfers (in-
country) (TMP).

* * * * *
    (a) * * * This paragraph (a) does not authorize any export of a
commodity controlled under ECCNs 0A501.a or .b, or shotguns with a
barrel length less than 18 inches controlled under ECCN 0A502 to, or
any export of such an item that was imported into the United States
from, a country in Country Group D:5 (Supplement No. 1 of this part),
or from Russia, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan,
Ukraine, or Uzbekistan. The only provisions of this paragraph (a) that
are eligible for use to export such items are paragraph (a)(5) of this
section (``Exhibition and demonstration'') and paragraph (a)(6) of this
section (``Inspection, test, calibration, and repair''). In addition,
this paragraph (a) may not be used to export more than 75 firearms per
shipment. In accordance with the requirements in Sec.  758.1(b)(10) and
(g)(4) of the EAR, the exporter or its agent must provide documentation
that includes the serial number, make, model, and caliber of each
firearm being exported by filing these data elements in an EEI filing
in AES. In accordance with the exclusions in License Exception TMP
under paragraph (b)(5), the entry clearance requirements in Sec.
758.1(b)(10) do not permit the temporary import of firearms controlled
in ECCN 0A501.a or .b that are shipped from or manufactured in a
Country Group D:5 country; or that are shipped from or manufactured in
Russia, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan,
Ukraine, or Uzbekistan (except for any firearm model controlled by
0A501 that is specified under Annex A in Supplement No. 4 to part 740,
or shotguns with a barrel length less than 18 inches controlled in ECCN
0A502 that are shipped from or manufactured in a Country Group D:5
country, or from Russia, Georgia, Kazakhstan, Kyrgyzstan, Moldova,
Turkmenistan, Ukraine, or Uzbekistan, because of the exclusions in
License Exception TMP under paragraph (b)(5).
* * * * *
    (b) * * *
    (1) * * * No provision of paragraph (b) of this section, other than
paragraph (b)(3), (4), or (5), may be used to export firearms
controlled by ECCN 0A501.a, .b or shotguns with a barrel length less
than 18 inches controlled in ECCN 0A502.
* * * * *
    (5) Exports of firearms and certain shotguns temporarily in the
United States. This paragraph (b)(5) authorizes the export of no more
than 75 end item firearms per shipment controlled by ECCN 0A501.a or
.b, or shotguns with a barrel length less than 18 inches controlled in
ECCN 0A502 that are temporarily in the United States for a period not
exceeding one year, provided that:
    (i) The firearms were not shipped from or manufactured in a U.S.
arms embargoed country, i.e., destination listed in Country Group D:5
in Supplement No. 1 to part 740 of the EAR;
    (ii) The firearms were not shipped from or manufactured in Russia,
Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or
Uzbekistan, except for any firearm model controlled by 0A501 that is
specified under Annex A in Supplement No. 4 to part 740; and
    (iii) The firearms are not ultimately destined to a U.S. arms
embargoed country, i.e., destination listed in Country Group D:5 in
Supplement No. 1 to part 740 of the EAR, or to Russia, Georgia,
Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Ukraine, or Uzbekistan;
    (iv) When the firearms entered the U.S. as a temporary import, the
temporary importer or its agent:
    (A) Provided the following statement to U.S. Customs and Border
Protection: ``This shipment will be exported in accordance with and
under the authority of License Exemption TMP (15 CFR 740.9(b)(5))'';
    (B) Provided to U.S. Customs and Border Protection an invoice or
other appropriate import-related documentation (or electronic
equivalents) that includes a complete list and description of the
firearms being temporarily imported, including their model, make,
caliber, serial numbers, quantity, and U.S. dollar value; and
    (C) Provided (if temporarily imported for a trade show, exhibition,

demonstration, or testing) to U.S. Customs and Border Protection the
relevant invitation or registration documentation for the event and an
accompanying letter that details the arrangements to maintain effective
control of the firearms while they are in the United States.
    (v) In addition to the export clearance requirements of part 758 of
the EAR, the exporter or its agent must provide the import
documentation related to paragraph (b)(5)(iv)(B) of this section to
U.S. Customs and Border Protection at the time of export.

    Note 1 to paragraph (b)(5):
    In addition to complying with all applicable EAR requirements
for the export of commodities described in paragraph (b)(5),
exporters and temporary importers should contact U.S. Customs and
Border Protection (CBP) at the port of temporary import or export,
or at the CBP website, for the proper procedures for temporarily
importing or exporting firearms controlled in ECCN 0A501.a or .b or
shotguns with a barrel length less than 18 inches controlled in ECCN
0A502, including regarding how to provide any data or documentation
required by BIS.

* * * * *
0
5. Section 740.11 is amended by:
0
a. Adding a sentence at the end of the introductory text;
0
b. Adding Note 2 to paragraph (b)(2); and
0
c. Redesignating note 1 to paragraph (c)(1) as note 3 to paragraph
(c)(1) and notes 1 and 2 to paragraph (e) as notes 4 and 5 to paragraph
(e).
    The additions read as follows:

Sec.  740.11  Governments, international organizations, international
inspections, under the Chemical Weapons Convention, and the
International Space Station (GOV).

    * * * Commodities listed in ECCN 0A501 are eligible only for
transactions described in paragraphs (b)(2)(i) and (ii) of this
section. Any item listed in a 0x5zz ECCN for export, reexport, or
transfer (in-country) to an E:1 country are eligible only for
transactions described in paragraphs (b)(2)(i) and (ii) solely for U.S.
government official use of this section.
* * * * *
    Note 2 to paragraph (b)(2): Items controlled for NS, MT, CB, NP, FC
or AT reasons may not be exported, reexported, or transferred (in-
country) to, or for the use of military, police, intelligence entities,
or other sensitive end-users of a government in a Country Group E:1, or
E:2 country.
* * * * *
0
6. Section 740.14 is amended by revising paragraph (b)(4), revising the
heading to paragraph (e), and by adding paragraphs (e)(3) and (4) to
read as follows:

Sec.  740.14  Baggage (BAG).

* * * * *
    (b) * * *