[Federal Register: February 22, 2010 (Volume 75, Number 34)]
[Notices]
[Page 7637-7641]
[DOCID:fr22fe10-94]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-29129; 812-13570]

iShares Trust, et al.; Notice of Application

February 16, 2010.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application to amend a prior order under section
12(d)(1)(J) of the Investment Company Act of 1940 (``Act'') for an
exemption from sections 12(d)(1)(A) and (B) of the Act.

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Summary of Application: Applicants request an order (``Order'') to
amend an existing order that permits certain registered open-end
management investment companies (``Investing Management Companies'')
and unit investment trusts (``Investing UITs,'' collectively with
Investing Management Companies, ``Investing Funds'') to acquire shares
of other registered open-end management investment companies and unit
investment trusts (``UITs'') that operate as exchange-traded funds
(``ETFs'') and are outside the same group of investment companies as
the Investing Funds (``Original Order'').\1\ The Order would modify
certain conditions of the Original Order to permit: (a) Investing
Management Companies that are subadvised by an investment adviser to
such ETFs (or an affiliated person of the investment adviser) to
acquire shares of the ETFs, and (b) Investing Funds to acquire shares
of a series of iShares Trust that carries out its investment strategies
by investing in a wholly owned subsidiary.
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    \1\ iShares Trust, et al., Investment Company Act Release Nos.
25969 (Mar. 21, 2003) (notice) and 26006 (Apr. 15, 2003) (order).

Applicants: iShares Trust (``Trust''), iShares, Inc. (``Corporation''),
BlackRock Fund Advisors (``BFA''), BlackRock Advisors, LLC, BlackRock
Capital Management, Inc., BlackRock Institutional Management
Corporation, BlackRock Financial Management, Inc., BlackRock
International Limited, and BlackRock Investment Management, LLC
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(collectively with BFA, ``BlackRock Advisers'').

DATES: Filing Dates: The application was filed on August 29, 2008 and
amended on February 27, 2009, October 14, 2009,

and January 25, 2010. Applicants have agreed to file an amendment
during the notice period, the substance of which is reflected in this
notice.

Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. March 9, 2010, and should be accompanied by proof of service on
applicants, in the form of an affidavit, or for lawyers, a certificate
of service. Hearing requests should state the nature of the writer's
interest, the reason for the request, and the issues contested. Persons
who wish to be notified of a hearing may request notification by
writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-1090; Applicants: Trust and
Corporation, c/o State Street Bank and Trust Company, 200 Clarendon
Street, Boston, MA 02116; BFA, 400 Howard Street, San Francisco, CA
94105; BlackRock Advisors, LLC, BlackRock Capital Management, Inc., and
BlackRock Institutional Management Corporation, 100 Bellevue Parkway,
Wilmington, DE 19809; BlackRock Financial Management, Inc., 55 East
52nd Street, New York, NY 10055; BlackRock International Limited, 40
Torpichen Street, Edinburgh EH3 8JB, United Kingdom; BlackRock
Investment Management, LLC, 800 Scudders Mill Road, Plainsboro, NJ
08536.

FOR FURTHER INFORMATION, CONTACT: Courtney S. Thornton, Senior Counsel,
at<PHONE_NUMBER>, or Mary Kay Frech, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Office of Investment Company
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/
search.htm, or by calling<PHONE_NUMBER>.

Applicants' Representations

    1. The Trust is a Delaware statutory trust registered under the Act
as an open-end management investment company. The Corporation is a
Maryland corporation registered under the Act as an open-end management
investment company. Each of the Trust and the Corporation is organized
as a series fund with multiple series that operate as ETFs.
    2. BFA is a California corporation registered as an investment
adviser under the Investment Advisers Act of 1940 (``Advisers Act'')
and serves as investment adviser to each series of the Trust and the
Corporation. Each of BlackRock Advisors, LLC (a Delaware limited
liability company), BlackRock Capital Management, Inc. (a Delaware
corporation), BlackRock Institutional Management Corporation (a
Delaware corporation), BlackRock Financial Management, Inc. (a Delaware
corporation), BlackRock International Limited (a United Kingdom
corporation), and BlackRock Investment Management, LLC (a Delaware
limited liability company) is registered under the Advisers Act. Each
BlackRock Adviser is an indirect subsidiary of BlackRock, Inc.
    3. Applicants request an Order under section 12(d)(1)(J) of the Act
to amend the Original Order to exempt certain transactions involving
the Trust and the Corporation from sections 12(d)(1)(A) and 12(d)(1)(B)
of the Act. Specifically, applicants seek to expand the type of
Investing Funds that may invest in series of the Trust or the
Corporation beyond the limits of section 12(d)(1)(A) and (B) to include
registered management investment companies or series thereof that are
subadvised (as provided in section 2(a)(20)(B) of the Act) by BFA, a
BlackRock Adviser, or any investment adviser that controls, is
controlled by or under common control with a BlackRock Adviser
(``BlackRock Adviser Affiliate'') but are not part of the same ``group
of investment companies'' as the Trust or the Corporation within the
meaning of section 12(d)(1)(G)(ii) of the Act (each a ``BlackRock
Subadvised Fund'').\2\ Applicants request that the relief from section
12(d)(1)(B) apply to the Trust, the Corporation, and each open-end
management investment company or UIT (or separate series thereof, as
applicable) registered under the Act that operates as an ETF, is
currently or subsequently a part of the same group of investment
companies as the Trust or the Corporation, and is advised or sponsored
by a BlackRock Adviser or a BlackRock Adviser Affiliate,\3\ as well as
any broker-dealer registered under the Securities Exchange Act of 1934
(``Broker'') selling shares of an iShares Fund to an Investing Fund.
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    \2\ An Investing Management Company will be advised by an
investment adviser within the meaning of section 2(a)(20)(A) of the
Act (``Advisor'') and may be advised by one or more other investment
advisers within the meaning of section 2(a)(20)(B)) of the Act
(each, a ``Subadviser''). An Investing Trust will have a sponsor
(``Sponsor'') and a trustee (``Trustee'').
    \3\ Such open-end ETFs are referred to herein as ``Open-end
iShares Funds''; such UIT ETFs are referred to herein as ``UIT
iShares Funds.'' Open-end iShares Funds and UIT iShares Funds are
collectively referred to as ``iShares Funds.'' An ``iShares Fund
Affiliate'' is any investment adviser, sponsor, promoter, or
principal underwriter of an iShares Fund, and any person
controlling, controlled by, or under common control with any of
those entities.
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    4. Applicants also seek to permit Investing Funds (including
BlackRock Subadvised Funds) to acquire shares of the iShares S&P India
Nifty 50 Index Fund (``India Fund'') and other iShares Funds that
operate in a manner substantially similar to the India Fund (``Future
Funds'') in reliance on the Order. The India Fund is an iShares Fund
that carries out its investment strategies by investing in a wholly
owned subsidiary in the Republic of Mauritius (``India Subsidiary'') in
excess of the limits contained in section 12(d)(1)(A) of the Act in
reliance on certain no-action positions of the staff of the
Commission.\4\ The India Fund operates through the India Subsidiary
(both of which are advised by BFA) in order to take advantage of
favorable tax treatment by the Indian government pursuant to a current
taxation treaty between India and Mauritius. Specifically, the India
Fund invests substantially all of its assets in the India Subsidiary,
which, in turn, invests at least 80% of its assets in securities that
comprise the S&P CNX Nifty Index (``Underlying Index'') and depositary
receipts representing securities of the Underlying Index. The India
Fund operates, and any Future Fund will operate, pursuant to the terms
and conditions required under the Prior Orders (as defined below)
received by one or more of the applicants that permit certain iShares
Funds to operate as ETFs.\5\
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    \4\ See, e.g., South Asia Portfolio, SEC No-Action Letter (Mar.
12, 1997).
    \5\ Barclays Global Fund Advisors, et al., Investment Company
Act Release No. 25622 (Jun. 25, 2002), as subsequently amended by
iShares Trust, et al., Investment Company Act Release No. 26006
(Apr. 15, 2003), Barclays Global Fund Advisors, et al., Investment
Company Act Release No. 26175 (Sep. 8, 2003), and Barclays Global
Fund Advisors, et al., Investment Company Act Release No. 27417
(Jun. 23, 2006) (as amended, the ``Prior Fixed Income Order'').
Barclays Global Fund Advisors, et al., Investment Company Act
Release No. 24452 (May 12, 2000), iShares Trust, et al., Investment
Company Act Release No. 25111 (Aug. 15, 2001), and iShares, Inc., et
al., Investment Company Act Release No. 25215 (Oct. 18, 2001), each
order as amended by iShares, Inc., et al., Investment Company Act
Release No. 25623 (Jun. 25, 2002), iShares Trust, et al., Investment
Company Act Release No. 26006 (Apr. 15, 2003), and Barclays Global
Fund Advisors, Investment Company Act Release No. 26626 (Oct. 5,
2004) (collectively and as amended, ``Prior Foreign Equity
Orders''). Barclays Global Fund Advisors, et al., Investment Company
Act Release No. 24451 (May 12, 2000), as amended by iShares, Inc.,
et al., Investment Company Act Release No. 25623 (Jun. 25, 2002) and
iShares Trust, et al., Investment Company Act Release No. 26006
(Apr. 15, 2003) (as amended, ``Prior Domestic Equity Order''). The
Prior Fixed Income Order, Prior Foreign Equity Orders, and Prior
Domestic Equity Order were amended by Barclays Global Fund Advisors,
et al., Investment Company Act Release No. 27661 (Jan. 17, 2007)
(collectively, the ``Prior Orders'').

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    5. In addition to extending the exemptive relief granted in the
Original Order, the Order would replace certain conditions in the
Original Order with the amended and restated conditions set out below
to reflect the possibility of a BlackRock Adviser or a BlackRock
Adviser Affiliate serving as a Subadviser to a BlackRock Subadvised
Fund, to permit Investing Funds to acquire shares of the India Fund and
any Future Fund, and to update the conditions in certain other
respects.
    6. For example, condition 1 would amend condition 1 of the Original
Order by specifying that neither the members of an Investing Fund's
Advisory Group \6\ nor the members of an Investing Fund's Subadvisory
Group \7\ will control, individually or in the aggregate, an iShares
Fund within the meaning of section 2(a)(9) of the Act. Amended
condition 1 would not apply to the Investing Fund's Subadvisory Group
with respect to an iShares Fund for which the Investing Fund's
Subadviser, or a person controlling, controlled by, or under common
control with the Investing Fund's Subadviser, acts as the investment
adviser within the meaning of section 2(a)(20) of the Act of an Open-
end iShares Fund or as the sponsor of a UIT iShares Fund.
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    \6\ An Investing Fund's Advisory Group is defined as an Advisor,
Sponsor, any person controlling, controlled by, or under common
control with an Advisor or Sponsor, and any investment company and
any issuer that would be an investment company but for sections
3(c)(1) or 3(c)(7) of the Act that is advised by an Advisor or
sponsored by a Sponsor, or any person controlling, controlled by, or
under common control with an Advisor or Sponsor.
    \7\ An Investing Fund's Subadvisory Group is defined as a
Subadviser, any person controlling, controlled by, or under common
control with a Subadviser, and any investment company and any issuer
that would be an investment company but for sections 3(c)(1) or
3(c)(7) of the Act (or portion of such investment company or issuer)
advised or sponsored by a Subadviser or any person controlling,
controlled by, or under common control with a Subadviser.
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    7. In addition, condition 4 would amend condition 4 of the Original
Order by requiring the evaluation by the board of directors/trustees of
an Open-end iShares Fund (``Board'') of any consideration paid by the
Open-end iShares Fund to an Investing Fund or an investment adviser,
sponsor, promoter or principal underwriter of the Investing Fund, or
any person controlling, controlled by, or under common control with any
of those entities (each, an ``Investing Fund Affiliate'') in connection
with any services or transactions, except for any services or
transactions between an Open-end iShares Fund and its investment
adviser(s), or any person controlling, controlled by, or under common
control with such investment adviser(s).
    8. The Order would amend condition 6 to reflect the possibility of
a BlackRock Adviser or a BlackRock Adviser Affiliate serving as
Subadviser to a BlackRock Subadvised Fund by providing that no
Investing Fund or Investing Fund Affiliate (except to the extent the
Investing Fund Affiliate is acting in its capacity as an investment
adviser to an Open-end iShares Fund or sponsor to a UIT iShares Fund)
will cause an iShares Fund to purchase a security in any offering of
securities during the existence of an underwriting or selling syndicate
of which a principal underwriter is an Underwriting Affiliate (as
defined below) (an ``Affiliated Underwriting'').\8\
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    \8\ An ``Underwriting Affiliate'' is a principal underwriter in
any underwriting or selling syndicate that is an officer, director,
member of an advisory board, investment adviser, investment
subadviser, employee or sponsor of the Investing Fund, or a person
of which any such officer, director, member of an advisory board,
investment adviser, investment subadviser, employee or sponsor is an
affiliated person. An Underwriting Affiliate does not include any
person whose relationship to the iShares Fund is covered by section
10(f) of the Act.
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    9. The Order would amend condition 12 to permit Investing Funds to
purchase shares of the India Fund by providing that no iShares Fund in
which an Investing Fund will invest pursuant to the Order will acquire
securities of any other investment company or company relying on
section 3(c)(1) or 3(c)(7) of the Act in excess of the limits contained
in section 12(d)(1)(A) of the Act, other than the India Subsidiary or
any similar wholly owned subsidiary of a Future Fund, and except to the
extent permitted by rule 12d1-1 under the Act or an exemptive order
that allows the iShares Fund to purchase shares of a money market fund
for short term cash management purposes.
    10. Applicants state that the iShares Funds will operate in a
manner identical to the operation of the iShares Funds under the
Original Order, except as specifically noted by applicants, and will
comply with all of the terms, provisions, and conditions of the
Original Order, as amended by the present application.\9\ Applicants
believe that the requested relief continues to meet the necessary
exemptive standards.
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    \9\ The Original Order also grants exemptive relief from section
17(a) of the Act to permit certain transactions involving the Trust
and the Corporation and Investing Funds. Applicants are not
requesting any further exemptive relief from section 17(a) in this
application and do not seek to amend the portion of the Original
Order that relates to the relief granted from section 17(a). As a
result, the Order will not permit a BlackRock Subadvised Fund that
might be deemed to be an affiliated person of an iShares Fund, or an
affiliated person of such a person, because it is subadvised by a
BlackRock Adviser or a BlackRock Adviser Affiliate, to engage in a
transaction with an iShares Fund that is prohibited by section
17(a). The Original Order will continue to provide an exemption from
section 17(a) for transactions involving an Investing Fund that is
not a BlackRock Subadvised Fund and the India Fund.
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Applicants' Legal Analysis

    1. Section 12(d)(1)(A) of the Act prohibits a registered investment
company from acquiring shares of an investment company if the
securities represent more than 3% of the total outstanding voting stock
of the acquired company, more than 5% of the total assets of the
acquiring company, or, together with the securities of any other
investment companies, more than 10% of the total assets of the
acquiring company. Section 12(d)(1)(B) of the Act prohibits a
registered open-end investment company, its principal underwriter, or
any Broker from selling its shares to another investment company if the
sale will cause the acquiring company to own more than 3% of the
acquired company's voting stock, or if the sale will cause more than
10% of the acquired company's voting stock to be owned by investment
companies generally.
    2. Section 12(d)(1)(J) of the Act provides that the Commission may
exempt any person, security, or transaction, or any class or classes of
persons, securities or transactions, from any provision of section
12(d)(1) if the exemption is consistent with the public interest and
the protection of investors. Applicants seek an exemption under section
12(d)(1)(J) to permit (a) the Investing Funds, including the BlackRock
Subadvised Funds, to acquire shares of the iShares Funds, (b) the
Investing Funds to acquire shares of the India Fund and any Future
Fund, and (c) the iShares Funds, any principal underwriter for the
iShares Funds, and any Broker to sell shares of the iShares Funds,
including shares of the India Fund, to the Investing Funds beyond the
limits set forth in sections 12(d)(1)(A) and (B).

    3. Applicants state that the proposed arrangements and conditions
will adequately address the policy concerns underlying sections
12(d)(1)(A) and (B), which include concerns about undue influence by a
fund of funds over underlying funds, excessive layering of fees, and
overly complex fund structures. Accordingly, for the reasons set forth
in the application and in the application for the Original Order,
applicants believe that the requested exemptions are consistent with
the public interest and the protection of investors.

Applicants' Conditions

    Applicants agree that any Order granting the requested relief will
be subject to the following conditions, which will supersede the
conditions to the Original Order:
    1. The members of an Investing Fund's Advisory Group will not
control (individually or in the aggregate) an iShares Fund within the
meaning of section 2(a)(9) of the Act. The members of an Investing
Fund's Subadvisory Group will not control (individually or in the
aggregate) an iShares Fund within the meaning of section 2(a)(9) of the
Act. If, as a result of a decrease in the outstanding voting securities
of an iShares Fund, an Investing Fund's Advisory Group or an Investing
Fund's Subadvisory Group, each in the aggregate, becomes a holder of
more than 25 percent of the outstanding voting securities of an iShares
Fund, it will vote its shares of the iShares Fund in the same
proportion as the vote of all other holders of the iShares Fund's
shares. This condition does not apply to the Investing Fund's
Subadvisory Group with respect to an iShares Fund for which the
Investing Fund's Subadviser, or a person controlling, controlled by, or
under common control with the Investing Fund's Subadviser, acts as the
investment adviser within the meaning of section 2(a)(20)(A) of the Act
(in the case of an Open-end iShares Fund) or as the sponsor (in the
case of a UIT iShares Fund) of the iShares Fund.
    2. An Investing Fund or Investing Fund Affiliate will not cause any
existing or potential investment by the Investing Fund in an iShares
Fund to influence the terms of any services or transactions between the
Investing Fund or Investing Fund Affiliate and the iShares Fund or
iShares Fund Affiliate.
    3. The board of directors or trustees of an Investing Management
Company, including a majority of the disinterested directors or
trustees, will adopt procedures reasonably designed to assure that the
Investing Management Company's Advisor(s) and Subadviser(s), if
applicable, are conducting the investment program of the Investing
Management Company without taking into account any consideration
received by the Investing Management Company or an Investing Fund
Affiliate from an iShares Fund or an iShares Fund Affiliate in
connection with any services or transactions.
    4. Once an investment by an Investing Fund in the securities of an
Open-end iShares Fund exceeds the limits in section 12(d)(1)(A)(i) of
the Act, the Board, including a majority of the disinterested Board
members, will determine that any consideration paid by an Open-end
iShares Fund to an Investing Fund or an Investing Fund Affiliate in
connection with any services or transactions: (i) Is fair and
reasonable in relation to the nature and quality of the services and
benefits received by the Open-end iShares Fund; (ii) is within the
range of consideration that the Open-end iShares Fund would be required
to pay to another unaffiliated entity in connection with the same
services or transactions; and (iii) does not involve overreaching on
the part of any person concerned. This condition does not apply with
respect to any services or transactions between an Open-end iShares
Fund and its investment adviser(s), or any person controlling,
controlled by, or under common control with such investment adviser(s).
    5. The Advisor, Trustee or Sponsor, as applicable, will waive fees
otherwise payable to it by the Investing Fund in an amount at least
equal to any compensation (including fees received pursuant to any plan
adopted by an Open-end iShares Fund under rule 12b-1 under the Act)
received from an iShares Fund by the Advisor, Trustee or Sponsor, or an
affiliated person of the Advisor, Trustee, or Sponsor, other than any
advisory fees paid to the Advisor, Trustee or Sponsor, or its
affiliated person by the iShares Fund, in connection with any
investment by the Investing Fund in the iShares Fund. Any Subadviser
will waive fees otherwise payable to the Subadviser, directly or
indirectly, by the Investing Management Company in an amount at least
equal to any compensation received from an iShares Fund by the
Subadviser, or an affiliated person of the Subadviser, other than any
advisory fees paid to the Subadviser or its affiliated person by the
iShares Fund, in connection with any investment by the Investing
Management Company in the iShares Fund made at the direction of the
Subadviser. In the event that the Subadviser waives fees, the benefit
of the waiver will be passed through to the Investing Management
Company.
    6. No Investing Fund or Investing Fund Affiliate (except to the
extent the Investing Fund Affiliate is acting in its capacity as an
investment adviser to an Open-end iShares Fund or sponsor to a UIT
iShares Fund) will cause an iShares Fund to purchase a security in any
Affiliated Underwriting.
    7. The Board, including a majority of the disinterested Board
members, will adopt procedures reasonably designed to monitor any
purchases of securities by an Open-end iShares Fund in an Affiliated
Underwriting once an investment by an Investing Fund in the securities
of an Open-end iShares Fund exceeds the limit of section 12(d)(1)(A)(i)
of the Act, including any purchases made directly from an Underwriting
Affiliate. The Board will review these purchases periodically, but no
less frequently than annually, to determine whether the purchases were
influenced by the investment by the Investing Fund in an Open-end
iShares Fund. The Board will consider, among other things: (i) Whether
or not the purchases were consistent with the investment objectives and
policies of the Open-end iShares Fund; (ii) how the performance of
securities purchased in an Affiliated Underwriting compares to the
performance of comparable securities purchased during a comparable
period of time in underwritings other than Affiliated Underwritings or
to a benchmark such as a comparable market index; and (iii) whether the
amount of securities purchased by the Open-end iShares Fund in
Affiliated Underwritings and the amount purchased directly from an
Underwriting Affiliate have changed significantly from prior years. The
Board will take any appropriate actions based on its review, including,
if appropriate, the institution of procedures designed to assure that
purchases of securities in Affiliated Underwritings are in the best
interest of shareholders.
    8. Each Open-end iShares Fund will maintain and preserve
permanently in an easily accessible place a written copy of the
procedures described in the preceding condition, and any modifications
to such procedures, and will maintain and preserve for a period of not
less than six years from the end of the fiscal year in which any
purchase in an Affiliated Underwriting occurred, the first two years in
an easily accessible place, a written record of each purchase of
securities in Affiliated Underwritings once an investment by an
Investing Fund in the securities of the Open-end iShares Fund exceeds
the limit of

section 12(d)(1)(A)(i) of the Act, setting forth from whom the
securities were acquired, the identity of the underwriting syndicate's
members, the terms of the purchase, and the information or materials
upon which the Board's determinations were made.
    9. Before investing in an iShares Fund in excess of the limits in
section 12(d)(1)(A), each Investing Fund and the iShares Fund will
execute an agreement stating, without limitation, that their respective
board of directors or trustees and their respective investment
advisers, or their respective sponsors or trustees, as applicable,
understand the terms and conditions of the order, and agree to fulfill
their responsibilities under the order. At the time of its investment
in shares of an Open-end iShares Fund in excess of the limit in section
12(d)(1)(A)(i), an Investing Fund will notify the Open-end iShares Fund
of the investment. At such time, the Investing Fund will also transmit
to the Open-end iShares Fund a list of the names of each Investing Fund
Affiliate and Underwriting Affiliate. The Investing Fund will notify
the Open-end iShares Fund of any changes to the list of the names as
soon as reasonably practicable after a change occurs. The iShares Fund
and the Investing Fund will maintain and preserve a copy of the order,
the agreement, and, in the case of an Open-end iShares Fund, the list
with any updated information for the duration of the investment and for
a period of not less than six years thereafter, the first two years in
an easily accessible place.
    10. Before approving any advisory contract under section 15 of the
Act, the board of directors or trustees of each Investing Management
Company, including a majority of the disinterested directors or
trustees, will find that the advisory fees charged under such contract
are based on services provided that will be in addition to, rather than
duplicative of, the services provided under any advisory contracts of
any Open-end iShares Fund in which the Investing Management Company may
invest. These findings and their basis will be recorded fully in the
minute books of the appropriate Investing Management Company.
    11. Any sales charges and/or service fees charged with respect to
shares of an Investing Fund will not exceed the limits applicable to a
fund of funds as set forth in NASD Conduct Rule 2830.
    12. No iShares Fund in which an Investing Fund will invest pursuant
to the Order will acquire securities of any other investment company or
company relying on section 3(c)(1) or 3(c)(7) of the Act in excess of
the limits contained in section 12(d)(1)(A) of the Act, other than the
India Subsidiary or any similar wholly-owned subsidiary, and except to
the extent permitted by rule 12d1-1 under the Act or an exemptive order
that allows the iShares Fund to purchase shares of a money market fund
for short-term cash management purposes.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-3333 Filed 2-19-10; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 85, Number 194 (Tuesday, October 6, 2020)]
[Rules and Regulations]
[Pages 62990-62993]
[FR Doc No: 2020-21993]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2020-0852; Project Identifier MCAI-2020-01179-T;
Amendment 39-21257; AD 2020-20-01]
RIN 2120-AA64

Airworthiness Directives; Dassault Aviation Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule; request for comments.

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SUMMARY: The FAA is adopting a new airworthiness directive (AD) for
certain Dassault Aviation Model FALCON 7X, FALCON 900EX, and FALCON
2000EX airplanes. This AD was prompted by reports of primary display
unit (PDU) data flickering on airplanes equipped with EASy software.
This AD requires amending the applicable Dassault airplane flight
manual (AFM) to incorporate the applicable AFM change project (CP), as
specified in a European Union Aviation Safety Agency (EASA) AD, which
is incorporated by reference. The FAA is issuing this AD to address the
unsafe condition on these products.

DATES: This AD becomes effective October 21, 2020.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of October 21,
2020.
    The FAA must receive comments on this AD by November 20, 2020.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    For material incorporated by reference (IBR) in this AD, contact
the EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49
221 8999 000; email<EMAIL_ADDRESS>internet www.easa.europa.eu.
You may find this IBR material on the EASA website at https://ad.easa.europa.eu. You may view this IBR material at the FAA,
Airworthiness Products Section, Operational Safety Branch, 2200 South
216th St., Des Moines, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>. It is also available in the AD
docket on the internet at https://www.regulations.gov by searching for
and locating Docket No. FAA-2020-0852.

Examining the AD Docket

    You may examine the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-
0852; or in person at Docket Operations between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. The AD docket contains
this AD, any comments received, and other information. The street
address for Docket Operations is listed above. Comments will be
available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Tom Rodriguez, Aerospace Engineer,
Large Aircraft Section, International Validation Branch, FAA, 2200
South 216th St., Des Moines, WA 98198; telephone and fax<PHONE_NUMBER>;
email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    The EASA, which is the Technical Agent for the Member States of the
European Union, has issued EASA AD 2020-0181, dated August 13, 2020
(``EASA AD 2020-0181'') (also referred to as the Mandatory Continuing
Airworthiness Information, or ``the MCAI''), to correct an unsafe
condition for certain Dassault Aviation Model FALCON 7X, FALCON 900EX,
and FALCON 2000EX airplanes. This AD was prompted by reports of PDU
data flickering on airplanes equipped with EASy software and the
possibility of losing information on all flightdeck PDUs. Data
flickering or loss of all flightdeck PDUs could lead to total loss of
control of the airplane due to erroneous information or lack of
information presented to the pilot. The FAA is issuing this AD to
address PDU data flickering and the possibility of total loss of
information on all flightdeck PDUs, which could result in excessive
workload for pilots and the inability of the pilot to perform
communications and navigation of the airplane, leading to loss of
control of the airplane. See the MCAI for additional background
information.

Related IBR Material Under 1 CFR Part 51

    EASA AD 2020-0181 describes procedures for amending the AFM with
the applicable CP emergency and abnormal procedures to address PDU
failure and flickering.
    This material is reasonably available because the interested
parties have access to it through their normal course of business or by
the means identified in the ADDRESSES section.

FAA's Determination

    This product has been approved by the aviation authority of another
country, and is approved for operation in the United States. Pursuant
to the FAA's bilateral agreement with the State of Design Authority,
the FAA has been notified of the unsafe condition described in the MCAI
referenced above. The FAA is issuing this AD because the FAA evaluated
all pertinent information and determined the unsafe condition exists
and is likely to exist or develop on other products of the same type
design.

Requirements of This AD

    This AD requires accomplishing the actions specified in the service
information described previously, as incorporated by reference, except
for any differences identified as exceptions in the regulatory text of
this AD.

Explanation of Required Compliance Information

    In the FAA's ongoing efforts to improve the efficiency of the AD
process, the FAA initially worked with Airbus and EASA to develop a
process to use certain EASA ADs as the primary source of information
for compliance with requirements for corresponding FAA ADs. The FAA has
since coordinated with other manufacturers and civil aviation
authorities (CAAs) to use this process. As a result, EASA AD 2020-0181
is incorporated by reference in this final rule. This AD, therefore,
requires compliance with EASA AD 2020-0181 in its entirety, through
that incorporation, except for any differences identified as exceptions
in the regulatory text of this AD. Using common terms that are the same
as the heading of a particular section in the EASA AD does not mean
that operators need comply only with that section. For example, where
the AD requirement refers to ``all required actions and compliance
times,'' compliance with this AD requirement is not limited to the
section titled ``Required Action(s) and Compliance Time(s)'' in the
EASA AD. Service information specified in AD 2020-0181 that is required
for compliance with EASA AD 2020-0181 is available on the internet at
https://www.regulations.gov by searching for and locating Docket No.
FAA-2020-0852.

FAA's Justification and Determination of the Effective Date

    An unsafe condition exists that requires the immediate adoption of
this AD without providing an opportunity for public comments prior to
adoption. The FAA has found that the risk to the flying public
justifies foregoing notice and comment prior to adoption of this rule
because PDU primary flight data flickering may lead to erroneous
information on other PDUs with the possibility of total loss of
information on all flightdeck PDUs, which could result in pilot's
excessive workload and the inability of the pilot to perform
communications and navigation of the airplane, leading to loss of
control of the airplane. In addition, the compliance time for the
required action is shorter than the time necessary for the public to
comment and for publication of the final rule. Therefore, the FAA finds
good cause that notice and opportunity for prior public comment are
impracticable. In addition, for the reasons stated above, the FAA finds
that good cause exists for making this amendment effective in less than
30 days.

Comments Invited

    This AD is a final rule that involves requirements affecting flight
safety, and the FAA did not precede it by notice and opportunity for
public comment. The FAA invites you to send any written relevant data,
views, or arguments about this final rule. Send your comments to an
address listed under the ADDRESSES section. Include ``Docket No. FAA-
2020-0852; and Project Identifier MCAI-2020-01179-T'' at the beginning
of your comments. The most helpful comments reference a specific
portion of the final rule, explain the reason for any recommended
change, and include supporting data. The FAA will consider all comments
received by the closing date and may amend this this final rule because
of those comments.
    Except for Confidential Business Information (CBI) as described in
the following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments the FAA received, without change,
to https://www.regulations.gov, including any personal information you
provide. The agency will also post a report summarizing each
substantive verbal contact received about this final rule.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this AD contain commercial
or financial information that is customarily treated as private, that
you actually treat as private, and that is relevant or responsive to
this AD, it is important that you clearly designate the submitted
comments as CBI. Please mark each page of your submission containing
CBI as ``PROPIN.'' The FAA will treat such marked submissions as
confidential under the FOIA, and they will not be placed in the public
docket of this AD. Submissions containing CBI should be sent to Tom
Rodriguez, Aerospace Engineer, Large Aircraft Section, International
Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198;
telephone and fax<PHONE_NUMBER>; email<EMAIL_ADDRESS>Any
commentary that the FAA receives which is not specifically

designated as CBI will be placed in the public docket for this
rulemaking.

Regulatory Flexibility Act (RFA)

    The requirements of the RFA do not apply when an agency finds good
cause pursuant to 5 U.S.C. 553 to adopt a rule without prior notice and
comment. Because the FAA has determined that it has good cause to adopt
this rule without notice and comment, RFA analysis is not required.

Costs of Compliance

    The FAA estimates that this AD affects 409 airplanes of U.S.
registry. The FAA estimates the following costs to comply with this AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per       Cost on U.S.
                          Labor cost                              Parts cost        product         operators
----------------------------------------------------------------------------------------------------------------
1 work-hour x $85 per hour = $85.............................              $0              $85          $34,765
----------------------------------------------------------------------------------------------------------------

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    The FAA determined that this AD will not have federalism
implications under Executive Order 13132. This AD will not have a
substantial direct effect on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866, and
    (2) Will not affect intrastate aviation in Alaska.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

Adoption of the Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

2020-20-01 Dassault Aviation: Amendment 39-21257; Docket No. FAA-
2020-0852; Project Identifier MCAI-2020-01179-T.

(a) Effective Date

    This AD becomes effective October 21, 2020.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Dassault Aviation Model FALCON 7X, FALCON
900EX, and FALCON 2000EX airplanes, certificated in any category, as
identified in European Union Aviation Safety Agency (EASA) AD 2020-
0181, dated August 13, 2020 (``EASA AD 2020-0181'').

(d) Subject

    Air Transport Association (ATA) of America Code 31, Instruments.

(e) Reason

    This AD was prompted by reports of primary display unit (PDU)
data flickering on airplanes equipped with EASy software and the
possibility of losing information on all flightdeck PDUs. Data
flickering or loss of all flightdeck PDUs could lead to total loss
of control of the airplane due to erroneous information or lack of
information presented to the pilot. The FAA is issuing this AD to
address PDU data flickering and the possibility of total loss of
information on all flightdeck PDUs, which could result in excessive
workload for pilots and the inability of the pilot to perform
communications and navigation of the airplane, leading to loss of
control of the airplane.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Requirements

    Except as specified in paragraph (h) of this AD: Comply with all
required actions and compliance times specified in, and in
accordance with, EASA AD 2020-0181.

(h) Exceptions to EASA AD 2020-0181

    (1) Where EASA AD 2020-0181 refers to its effective date, this
AD requires using the effective date of this AD.
    (2) The ``Remarks'' section of EASA AD 2020-0181 does not apply
to this AD.
    (3) Paragraph (1) of EASA AD 2020-0181 specifies amending ``the
applicable AFM [airplane flight manual],'' but this AD requires
amending ``the applicable AFM and applicable corresponding
operational procedures.''

(i) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
Large Aircraft Section, International Validation Branch, FAA, has
the authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or responsible Flight
Standards Office, as appropriate. If sending information directly to
the Large Aircraft Section, International Validation Branch, send it
to the attention of the person identified in paragraph (j) of this
AD. Information may be emailed to<EMAIL_ADDRESS>
Before using any approved AMOC, notify your appropriate principal
inspector, or lacking a principal inspector, the manager of the
responsible Flight Standards Office.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain instructions from a manufacturer, the instructions must be
accomplished using a method approved by the Manager, Large Aircraft
Section, International Validation Branch, FAA; or EASA; or Dassault
Aviation's EASA Design Organization Approval (DOA). If approved by
the DOA, the approval must include the DOA-authorized signature.

(j) Related Information

    For more information about this AD, contact Tom Rodriguez,
Aerospace Engineer, Large Aircraft Section, International Validation
Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone
and fax<PHONE_NUMBER>; email<EMAIL_ADDRESS>

(k) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (i) European Union Aviation Safety Agency (EASA) AD 2020-0181,
dated August 13, 2020.
    (ii) [Reserved]
    (3) For information about EASA AD 2020-0181, contact the EASA,
Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221
8999 000; email<EMAIL_ADDRESS>internet www.easa.europa.eu. You
may find this EASA AD on the EASA website at https://ad.easa.europa.eu.
    (4) You may view this material at the FAA, Airworthiness
Products Section, Operational Safety Branch, 2200 South 216th St.,
Des Moines, WA. For information on the availability of this material
at the FAA, call<PHONE_NUMBER>. This material may be found in the AD
docket on the internet at https://www.regulations.gov by searching
for and locating Docket No. FAA-2020-0852.
    (5) You may view this material that is incorporated by reference
at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, email
<EMAIL_ADDRESS>or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on September 18, 2020.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2020-21993 Filed 10-5-20; 8:45 am]
BILLING CODE 4910-13-P


and, to the extent feasible, align its control text with those of the
regimes. This proposed rule would maintain the alignment that exists
between the USML, in which military electronics are controlled under
Category XI, and the WAML, in which military electronic equipment is
controlled under ML11, and would be controlled by ECCN 3A611 in this
proposed rule. Similarly, 3B611 aligns with WAML 18, which, inter alia,
controls ``specially designed or modified `production' equipment for
the `production' of products specified by the Munitions List, and
specially designed components therefor.''
    This proposed rule would align cryogenic and superconducting
equipment currently controlled in Categories VI, VII, VIII, and XV of
the USML with Wassenaar Arrangement Munitions List category ML20 by
controlling them under ECCN 9A620. As with other 600 series ECCNs, this
rule follows the existing CCL numbering pattern for test, inspection
and production equipment (3B611 and 9B620), software (3D611 and 9D620)
and technology (3E611 and 9E620), rather than strictly following the
Wassenaar Arrangement Munitions List pattern of placing production
equipment, software and technology for munitions list items in
categories ML18, ML21 and ML22, respectively. BIS believes that
including the ECCNs for test, inspection and production equipment,
software, and technology in the same category as the items to which
they relate results in an easier to understand CCL than would separate
categories.
    Although the Export Administration Act expired on August 20, 2001,
the President, through Executive Order 13222 of August 17, 2001, 3 CFR,
2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March
8, 2013, 78 FR 16129 (March 13, 2013), as extended by the Notice of
August 15, 2012, 77 FR 49699 (August 16, 2012), has continued the
Export Administration Regulations in effect under the International
Emergency Economic Powers Act. BIS continues to carry out the
provisions of the Export Administration Act, as appropriate and to the
extent permitted by law, pursuant to Executive Order 13222.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distribute impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been designated a ``significant regulatory
action,'' although not economically significant, under section 3(f) of
Executive Order 12866. Accordingly, the rule has been reviewed by the
Office of Management and Budget (OMB).
    2. Notwithstanding any other provision of law, no person is
required to respond to, nor is subject to a penalty for failure to
comply with, a collection of information, subject to the requirements
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA),
unless that collection of information displays a currently valid OMB
control number. This proposed rule would affect two approved
collections: Simplified Network Application Processing System (control
number 0694-0088), which includes, among other things, license
applications, and License Exceptions and Exclusions (0694-0137).
    As stated in the proposed rule published at 76 FR 41958 (July 15,
2011), BIS initially believed that the combined effect of all rules to
be published adding items to the EAR that would be removed from the
ITAR as part of the administration's Export Control Reform Initiative
would increase the number of license applications to be submitted by
approximately 16,000 annually. As the review of the USML has
progressed, the interagency group has gained more specific information
about the number of items that would come under BIS jurisdiction,
whether those items would be eligible for export under license
exception. As of June 21, 2012, BIS believes the increase in license
applications may be 30,000 annually, resulting in an increase in burden
hours of 8,500 (30,000 transactions at 17 minutes each) under control
number 0694-0088.
    Military electronic equipment, certain cryogenic and
superconducting equipment, related test, inspection and production
equipment, ``parts,'' ``components,'' ``accessories'' and
``attachments,'' ``software'' and ``technology'' formerly on the USML
would become eligible for License Exception STA under this rule. BIS
believes that the increased use of License Exception STA resulting from
the combined effect of all rules to be published adding items to the
EAR that would be removed from the ITAR as part of the Administration's
Export Control Reform Initiative would increase the burden associated
with control number 0694-0137 by about 23,858 hours (20,450
transactions @ 1 hour and 10 minutes each).

    BIS expects that this increase in burden will be more than offset
by a reduction in burden hours associated with approved collections
related to the ITAR. The largest impact of the proposed rule would
likely apply to exporters of replacement parts for military electronic
equipment that has been approved under the ITAR for export to allies
and regime partners. Because, with few exceptions, the ITAR allows
exemptions from license requirements only for exports to Canada, most
exports of such parts, even when destined to NATO and other close
allies, require specific State Department authorization. Under the EAR,
as proposed here, such parts would become eligible for export to NATO
and other multi-regime allies under License Exception STA. Use of
License Exception STA imposes a paperwork and compliance burden
because, for example, exporters must furnish information about the item
being exported to the consignee and obtain from the consignee an
acknowledgement and commitment to comply with the EAR. However, the
Administration understands that complying with the burdens of STA is
likely less burdensome than applying for licenses. For example, under
License Exception STA, a single consignee statement can apply to an
unlimited number of products, need not have an expiration date, and
need not be submitted to the government in advance for approval.
Suppliers with regular customers can tailor a single statement and
assurance to match their business relationship rather than applying
repeatedly for licenses with every purchase order to supply reliable
customers in countries that are close allies or members of export
control regimes or both.
    Even in situations in which a license would be required under the
EAR, the burden is likely to be reduced compared to the license
requirement of the ITAR. In particular, license applications for
exports of technology controlled by ECCN 3E611 are likely to be less
complex and burdensome than the authorizations required to export ITAR-
controlled technology, i.e., Manufacturing License Agreements and
Technical Assistance Agreements.
    3. This rule does not contain policies with Federalism implications
as that term is defined under E.O. 13132.
    4. 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
rule will 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 (or his or her designee) certifies that a rule
will 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 the November 28 (military electronics) rule would not
have a significant impact on a substantial number of small entities.
The rationale for that certification was set forth in the preamble to
that proposed rule (77 FR 70945, 70950-70951, November 28, 2012).
Although BIS received no comments on that rationale, and has
accordingly made no changes to the proposed rule based on the RFA
certification, BIS has determined that, in the interest of openness and
transparency, it will briefly restate the rationale behind the
certification here.
    This rule, if implemented, is part of the Administration's Export
Control Reform Initiative, which seeks to revise the USML to a positive
list--one that does not use generic, catch-all controls for items
listed--and to move some items that the President has determined no
longer merit control under the ITAR to control under the CCL.
    Although BIS does not collect data on the size of entities that
apply for and are issued export licenses, and is therefore unable to
estimate the exact number of small entities--as defined by the Small
Business Administration's regulations implementing the RFA--BIS
acknowledges that some small entities may be affected by this proposed
rule.
    The main effects on small entities resulting from this rule will be
in application times, costs, and delays in receiving licenses to export
goods subject to the CCL. However, while small entities may experience
some costs and time delays for exports due to the license requirements
of the CCL, these costs and delays will likely be significantly less
than they were for items previously subject to the USML. BIS believes
that in fact this rule will result in significantly reduced
administrative costs and delays for exports of items that will, upon
this rule's implementation, be subject to the EAR rather than the ITAR.
Currently, USML applicants must pay to use the USML licensing procedure
even if they never actually are authorized to export. 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 increases 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.
By contrast, BIS is statutorily prohibited from imposing licensing
fees. In addition, exporters and reexporters of goods that would become
subject to the EAR under this rule would need fewer licenses because
their transactions would become eligible for license exceptions that
were not available under the ITAR. Additionally, the ITAR controlled
parts and components even when they were incorporated--in any amount--
into a foreign-made product. That limitation on the use of U.S.-made
goods subject to the ITAR discouraged foreign manufacturers from
importing U.S. goods. However, the EAR has a de minimis exception for
U.S.-manufactured goods that are incorporated into foreign-made
products. This exception may benefit small entities by encouraging
foreign producers to use more U.S.-made items in their goods.
    Even where an exporter or reexporter would need to obtain a license
under the EAR, that process is both cheaper and the process is more
flexible than obtaining a license under the ITAR. For example, unlike
the ITAR, the EAR does not require license applicants to provide BIS
with a purchase order with the application, meaning that small (or any)
entities can enter into negotiations or contracts for the sale of goods
without having to caveat any sale presentations with a reference to the
need to obtain a license under the ITAR before shipment can occur.
Second, the EAR allows license applicants to obtain licenses to cover
all expected exports or reexports to a particular consignee over the
life of a license, rather than having to obtain a new license for every
transaction.
    In short, BIS expects that the changes to the EAR proposed in this
rule will have a positive effect on all affected entities, including
small entities. While BIS acknowledges that this rule may have some
cost impacts to small (and other) entities, those costs are more than
offset by the benefits to the entities from the licensing procedures
under the EAR, which are much less costly and less time consuming than
the procedures under the ITAR. Accordingly, the Chief Counsel for
Regulation for the

Department of Commerce has certified that this rule, if implemented,
will not have a significant economic impact on a substantial number of
small entities. Accordingly, an initial regulatory flexibility analysis
is not required, and none has been prepared.

List of Subjects in 15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

    Accordingly, part 774 of the Export Administration Regulations (15
CFR Parts 730-774) is proposed to be amended as follows:

PART 774--[AMENDED]

0
1. The authority citation for 15 CFR part 774 continues to read as
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
10 U.S.C. 7420; 10 U.S.C. 7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et
seq., 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42
U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22
U.S.C. 7201 et seq.; 22 U.S.C. 7210; 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, 2012, 77 FR 49699 (August 16, 2012).

0
2. In Supplement No. 1 to Part 774, Category 3, amend Export Control
Classification Number (ECCN) 3A101 by:
0
a. revising the Related Controls paragraph in the List of Items
Controlled section; and
0
b. revising paragraph a in the Items paragraph in the List of Items
Controlled section, to read as follows:

Supplement No. 1 to Part 774--The Commerce Control List

* * * * *
3A101 Electronic equipment, devices and components, other than those
controlled by 3A001, as follows (see List of Items Controlled).
* * * * *

List of Items Controlled

* * * * *
Related Controls: See also ECCN 4A003.e for controls on analog-to-
digital converter, printed circuit boards, or modules for computers.
* * * * *

Items:

    a. Analog-to-digital converters usable in ``missiles,'' and
having any of the following characteristics:
    a.1. ``Specially designed'' to meet military specifications for
ruggedized equipment;
    a.2. ``Specially designed'' for military use and being any of
the following types:
    a.2.a. Analog-to-digital converter microcircuits which are
radiation-hardened or have all of the following characteristics:
    a.2.a.1. Having a quantization corresponding to 8 bits or more
when coded in the binary system;
    a.2.a.2. Rated for operation in the temperature range from -54
[deg]C to above +125 [deg]C; and
    a.2.a.3. Hermetically sealed; or
    a.2.b. Electrical input type analog-to-digital converter printed
circuit boards or modules, having all of the following
characteristics:
    a.2.b.1. Having a quantization corresponding to 8 bits or more
when coded in the binary system;
    a.2.b.2. Rated for operation in the temperature range from below
-45 [deg]C to above +55 [deg]C; and
    a.2.b.3. Incorporating microcircuits identified in 3A101.a.2 or
a.3;
* * * * *
0
3. In Supplement No. 1 to Part 774, between the entries for ECCNs 3A292
and 3A980, add new entry for ECCN 3A611 to read as follows:

3A611 Military electronics, as follows (see list of items
controlled).
Reason for Control: NS, RS, AT, UN

                Control(s)                          Country chart

NS applies to entire entry except 3A611.y.  NS Column 1
RS applies to entire entry except 3A611.y.  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry except 3A611.y.  See Sec.   746.1(b) for UN
                                             controls

License Exceptions

LVS: $1500 for 3A611.a, .d through .h and .x; N/A for ECCN 3A611.c
and .y
GBS: N/A
CIV: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2)
of the EAR) may not be used for any item in 3A611.

List of Items Controlled

Unit: End items in number; parts, components, accessories and
attachments in $ value
Related Controls: (1) Electronic items that are enumerated in USML
Category XI or other USML categories, and technical data (including
software) directly related thereto, are subject to the ITAR. (2)
Application specific integrated circuits (ASICs) and programmable
logic devices that are programmed for defense articles that are
subject to the ITAR are controlled in USML Category XI(c)(1). (3)
See ECCN 3A001.a.7 for controls on unprogrammed programmable logic
devices. (4) Printed circuit boards and populated circuit cards
whose layout is specially designed for defense articles that are
subject to the ITAR are controlled in USML Category XI(c)(2). (5)
Multichip modules for which the pattern or layout is ``specially
designed'' for defense articles that are subject to the ITAR are
controlled in USML Category XI(c)(3). (6) Electronic items
``specially designed'' for military use that are not controlled in
any USML category but are within the scope of another ``600 series''
ECCN are controlled by that ``600 series'' ECCN. Thus, ECCN 3A611
controls only electronic items ``specially designed'' for a military
use that are not otherwise within the scope of a USML category or
``600 series'' ECCN other than ECCN 3A611. For example, electronic
components not enumerated on the USML or a 600 series other than
3A611 that are ``specially designed'' for a military aircraft
controlled by USML Category VIII or ECCN 9A610 are controlled by the
catch-all control in ECCN 9A610.x. Electronic components not
enumerated on the USML or another 600 series entry that are
``specially designed'' for a military vehicle controlled by USML
Category VII or ECCN 0A606 are controlled by ECCN 0A606.x.
Electronic components not enumerated on the USML that are
``specially designed'' for a missile controlled by USML Category IV
are controlled by ECCN 0A604. (7) Certain radiation hardened
microelectronic circuits are controlled by ECCN 9A515.d, when
``specially designed'' for defense articles, 600 series items, or
items controlled by 9A515.
Related Definitions: N/A
Items:

    a. Electronic ``equipment,'' ``end items,'' and ``systems''
``specially designed'' for military use that are not enumerated in
either a USML category or another ``600 series'' ECCN.

    Note: ECCN 3A611.a includes any radar, telecommunications,
acoustic or computer equipment, end items, or systems ``specially
designed'' for military use that are not enumerated in any USML
category or controlled by a ``600 series'' ECCN.

    b. [Reserved]
    c. Microwave ``monolithic integrated circuits'' (MMIC) power
amplifiers having any of the following:
    c.1. Rated for operation at frequencies exceeding 2.7 GHz up to
and including 2.9 GHz and having any of the following:
    c.1.a. A ``fractional bandwidth'' greater than 15%, with a peak
saturated power output greater than 75 W (48.75 dBm) and a power
added efficiency of 50% or greater anywhere within the operating
frequency range; or
    c.1.b. A ``fractional bandwidth'' greater than 60%, with a peak
saturated power output greater than 150 W (51.8 dBm) anywhere within
the operating frequency range;
    c.2. Rated for operation at frequencies exceeding 2.9 GHz up to
and including 3.2 GHz and having any of the following:
    c.2.a A ``fractional bandwidth'' greater than 15%, with a peak
saturated power output greater than 55 W (47.4 dBm) and a power
added efficiency of 45% or greater anywhere within the operating
frequency range; or
    c.2.b. A ``fractional bandwidth'' greater than 55%, with a peak
saturated power output greater than 110 W (50.4 dBm) anywhere within
the operating frequency range;

    c.3. Rated for operation at frequencies exceeding 3.2 GHz up to
and including 3.7 GHz and having any of the following:
    c.3.a A ``fractional bandwidth'' greater than 15%, with a peak
saturated power output greater than 40 W (46 dBm) and a power added
efficiency of 45% or greater anywhere within the operating frequency
range; or
    c.3.b A ``fractional bandwidth'' greater than 50%, with a peak
saturated power output greater than 80 W (49 dBm) anywhere within
the operating frequency range;
    c.4. Rated for operation at frequencies exceeding 3.7 GHz up to
and including 6.8 GHz and having any of the following:
    c.4.a. A ``fractional bandwidth'' greater than 15%, with a peak
saturated power output greater than 20 W (43 dBm) and a power added
efficiency of 40% or greater anywhere within the operating frequency
range; or
    c.4.b A ``fractional bandwidth'' greater than 45%, with a peak
saturated power output greater than 40 W (46 dBm) anywhere within
the operating frequency range;
    c.5. Rated for operation at frequencies exceeding 6.8 GHz up to
and including 8.5 GHz and having any of the following:
    c.5.a A ``fractional bandwidth'' greater than 10%, with a peak
saturated power output greater than 10 W (40.0 dBm) and a power
added efficiency of 40% or greater anywhere within the operating
frequency range; or
    c.5.b A ``fractional bandwidth'' greater than 40%, with a peak
saturated power output greater than 20 W (43 dBm) anywhere within
the operating frequency range;
    c.6. Rated for operation at frequencies exceeding 8.5 GHz up to
and including 16 GHz and having any of the following:
    c.6.a. A ``fractional bandwidth'' greater than 10%, with a peak
saturated power output greater than 5 W (37 dBm) and a power added
efficiency of 35% or greater anywhere within the operating frequency
range; or
    c.6.b A ``fractional bandwidth'' greater than 40%, with a peak
saturated power output greater than 10 W (40 dBm) anywhere within
the operating frequency range;
    c.7. Rated for operation at frequencies exceeding 16 GHz up to
and including 31.8 GHz with a ``fractional bandwidth'' greater than
10%, and having a peak saturated power output greater than 3 W
(34.77 dBm) and a power added efficiency of 20% or greater anywhere
within the operating frequency range;
    c.8. Rated for operation at frequencies exceeding 31.8 GHz up to
and including 37 GHz, and having a peak saturated power output
greater than 2 W (33 dBm) anywhere within the operating frequency
range;
    c.9. Rated for operation at frequencies exceeding 37 GHz up to
and including 43.5 GHz with a ``fractional bandwidth'' greater than
10%, and having a peak saturated power output greater than 1 W (30
dBm) and a power added efficiency of 15% or greater anywhere within
the operating frequency range;
    c.10. Rated for operation at frequencies exceeding 43.5 GHz up
to and including 75 GHz with a ``fractional bandwidth'' greater than
10%, and having a peak saturated power output greater than 31.62 mW
(15 dBm) and a power added efficiency of 10% or greater anywhere
within the operating frequency range;
    c.11. Rated for operation at frequencies exceeding 75 GHz up to
and including 90 GHz with a ``fractional bandwidth'' greater than
5%, and having a peak saturated power output greater than 10 mW (10
dBm) and a power added efficiency of 10% or greater anywhere within
the operating frequency range;
    c.12. Rated for operation at frequencies exceeding 90 GHz up to
and including 110 GHz and having a peak saturated power output
greater than 1.0 mW (0 dBm) anywhere within the operating frequency
range; or
    c.13. Rated for operation at frequencies exceeding 110 GHz and
having a peak saturated power output greater than 100 nW (-40 dBm)
anywhere within the operating frequency range.

    Note 1 to 3A611.c: The status of an item whose rated operating
frequency includes frequencies listed in more than one frequency
range, as defined by 3A611.c.1 through 3A611.c.13 is determined by
the lowest saturated output power threshold.

    Note 2 to 3A611.c: Peak saturated power output may also be
referred to as output power, saturated power output, maximum power
output, peak power output, or peak envelope power output.

    d. Discrete microwave transistors having any of the following:
    d.1. Rated for operation at frequencies exceeding 2.7 GHz up to
and including 2.9 GHz and having a peak saturated power output
greater than 400 W (56 dBm) and a power added efficiency of 50% or
greater anywhere within the operating frequency range;
    d.2. Rated for operation at frequencies exceeding 2.9 GHz up to
and including 3.2 GHz and having a peak saturated power output
greater than 205 W (53.12 dBm) and a power added efficiency of 50%
or greater anywhere within the operating frequency range;
    d.3. Rated for operation at frequencies exceeding 3.2 GHz up to
and including 3.7 GHz and having a peak saturated power output
greater than 115 W (50.61 dBm) and a power added efficiency of 45%
or greater anywhere within the operating frequency range;
    d.4. Rated for operation at frequencies exceeding 3.7 GHz up to
and including 6.8 GHz and having a peak saturated power output
greater than 60 W (47.78 dBm) and a power added efficiency of 45% or
greater anywhere within the operating frequency range;
    d.5. Rated for operation at frequencies exceeding 6.8 GHz up to
and including 8.5 GHz and having a peak saturated power output
greater than 50 W (47 dBm) and a power added efficiency of 50% or
greater anywhere within the operating frequency range;
    d.6. Rated for operation at frequencies exceeding 8.5 GHz and up
to and including 12 GHz and having a peak saturated power output
greater than 20 W (43 dBm) and a power added efficiency of 35% or
greater anywhere within the operating frequency range;
    d.7. Rated for operation at frequencies exceeding 12 GHz up to
and including 16 GHz and having a peak saturated power output
greater than 40 W (46 dBm) and a power added efficiency of 35% or
greater anywhere within the operating frequency range;
    d.8. Rated for operation at frequencies exceeding 16 GHz up to
and including 31.8 GHz and having a peak saturated power output
greater than 20 W (43 dBm) and a power added efficiency of 30% or
greater anywhere within the operating frequency range;
    d.9. Rated for operation at frequencies exceeding 31.8 GHz up to
and including 37 GHz and having a peak saturated power output
greater than 2 W (33 dBm) anywhere within the operating frequency
range;
    d.10. Rated for operation at frequencies exceeding 37 GHz up to
and including 43.5 GHz and having a peak saturated power output
greater than 1 W (30 dBm) and a power added efficiency of 20% or
greater anywhere within the operating frequency range; or
    d.11. Rated for operation at frequencies exceeding 43.5 GHz to
and including 75 GHz and having a peak saturated power output
greater than 0.5 W (27 dBm) and a power added efficiency of 15% or
greater anywhere within the operating frequency range;
    d.12. Rated for operation at frequencies exceeding 75 GHz and
having a peak saturated power output greater than 0.1 W (20 dBm)
anywhere within the operating frequency range.

    Note 1 to 3A611.d: The status of an item whose rated operating
frequency includes frequencies listed in more than one frequency
range, as defined by 3A611.d.1 through 3A611.d.12 is determined by
the lowest saturated output power threshold.

    Note 2 to 3A611.d: Peak saturated power output may also be
referred to as output power, saturated power output, maximum power
output, peak power output, or peak envelope power output.

    Note 3 to 3A611.d: 3A611.d includes bare dice, dice mounted on
carriers, or dice mounted in packages. Some discrete transistors may
also be referred to as power amplifiers, but the status of these
products are determined by 3A001.b.3. and 3A611.d.

    e. High frequency (HF) surface wave radar that maintains the
positional state of maritime surface or low altitude airborne
objects of interest in a received radar signal through time.

    Note: ECCN 3A611.e does not apply to systems, equipment, and
assemblies ``specially designed'' for marine traffic control.

    f. Application specific integrated circuits (ASICs) and
programmable logic devices (PLD) programmed for 600 series items.
    g. Printed circuit boards and populated circuit card assemblies
for which the layout is ``specially designed'' for 600 series items.
    h. Multichip modules for which the pattern or layout is
``specially designed'' for 600 series items.

    i. through w. [Reserved]
    x. ``Parts,'' ``components,'' ``accessories'' and
``attachments'' that are ``specially designed'' for a commodity
controlled by this entry or for an article controlled by USML
Category XI, and not enumerated in any USML category.

    Note 1 to ECCN 3A611.x: ECCN 3A611.x includes parts, components,
accessories, and attachments ``specially designed'' for a radar,
telecommunications, acoustic systems or equipment or computer
``specially designed'' for military use that are neither enumerated
in any USML category nor controlled in another ``600 series'' ECCN.

    Note 2 to ECCN 3A611.x: ECCN 3A611.x controls parts and
components ``specially designed'' for underwater sensors or
projectors controlled by USML Category XI(c)(12) containing single-
crystal lead magnesium niobate lead titanate (PMN-PT) based
piezoelectrics.

    y. Specific ``parts,'' ``components,'' ``accessories'' and
``attachments'' ``specially designed'' for a commodity subject to
control in this entry and not elsewhere specified in any 600-series
ECCN as follows:
    y.1. Electric couplings;
    y.2. Cathode ray tubes (CRTs);
    y.3. Electrical connectors;
    y.4. Electric fans;
    y.5. Rotron fans;
    y.6. Electric fuses other than those specially designed for
explosive detonation;
    y.7. Grid vacuum tubes;
    y.8. Audio headphones, earphones, handsets, and headsets;
    y.9. Heat sinks;
    y.10. Intercom systems;
    y.11. Joy sticks;
    y.12. Loudspeakers;
    y.13. Mica paper capacitors;
    y.14. Microphones;
    y.15. Potentiometers;
    y.16. Rheostats;
    y.17. Electric connector backshells;
    y.18. Solenoids;
    y.19. Speakers;
    y.20. Electric switches other than RF, pressure, diplexer,
duplexer, circulator, or isolator switches;
    y.21. Trackballs;
    y.22. Electric transformers;
    y.23. Vacuum tubes other than TWTs, klystron tubes, or tubes
specially designed for articles enumerated in USML Category XII;
    y.24. Waveguide.

0
4. In Supplement No. 1 to Part 774, between the entries for ECCNs 3B002
and 3B991, add new entry for ECCN 3B611 to read as follows:

3B611 Test, inspection, and production commodities for military
electronics, as follows (see List of Items Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

                Control(s)                          Country chart

NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls

License Exceptions

LVS: $1500
GBS: N/A
CIV: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2)
of the EAR) may not be used for any item in 3B611.

List of Items Controlled

Unit: N/A
Related Controls: N/A
Related Definitions: N/A
Items:

    a. Test, inspection, and production end items and equipment
``specially designed'' for the ``development,'' ``production,''
repair, overhaul or refurbishing of items controlled in ECCN 3A611
or USML Category XI that are not enumerated in USML Category XI or
controlled by another ``600 series'' ECCN.
    b. through w. [Reserved]
    x. ``Parts,'' ``components,'' ``accessories'' and
``attachments'' that are ``specially designed'' for a commodity
listed in this entry and that are not enumerated on the USML or
controlled by another ``600 series'' ECCN.

0
5. In Supplement No. 1 to Part 774, between the entries for ECCNs 3D101
and 3D980, add a new entry for ECCN 3D611 to read as follows:

3D611 ``Software'' ``specially designed'' for military electronics,
as follows (see List of Items Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

                Control(s)                          Country chart

NS applies to entire entry except 3D611.y.  NS Column 1
RS applies to entire entry except 3D611.y.  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry except 3D611.y.  See Sec.   746.1(b) for UN
                                             controls

License Exceptions

CIV: N/A
TSR: N/A
STA: 1. Paragraph (c)(2) of License Exception STA (Sec.
740.20(c)(2) of the EAR) may not be used for any ``software'' in
3D611. 2. Except for ``build-to-print'' software, License Exception
STA is not eligible for software enumerated in ECCN 3D611.b.

List of Items Controlled

Unit: $ value
Related Controls: ``Software'' directly related to articles
enumerated in USML Category XI is controlled in USML Category XI(d).
Related Definitions: N/A
Items:

    a. Software ``specially designed'' for the ``development,''
``production,'' operation, or maintenance of commodities controlled
by ECCN 3A611 (other than 3A611.y) and 3B611.
    b. Software specially designed for the ``development,''
``production,'' operation or maintenance of technology in ECCN
3E611.b.
    c. through x. [Reserved]
    y. Specific ``software'' ``specially designed'' for the
``production,'' ``development,'' operation or maintenance of
commodities enumerated in ECCNs 3A611.y.

0
6. In Supplement No. 1 to Part 774, between the entries for ECCNs 3E292
and 3E980, add new entry for ECCN 3E611 to read as follows:

3E611 Technology ``required'' for military electronics, as follows
(see List of Items Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

                Control(s)                          Country chart

NS applies to entire entry except 3E611.y.  NS Column 1
RS applies to entire entry except 3E611.y.  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry except 3E611.y.  See Sec.   746.1(b) for UN
                                             controls

License Exceptions

CIV: N/A
TSR: N/A
STA: 1. Paragraph (c)(2) of License Exception STA (Sec.
740.20(c)(2) of the EAR) may not be used for any technology in
3E611. 2. Except for ``build-to-print'' technology, License
Exception STA is not eligible for technology enumerated in ECCN
3E611.b.

List of Items Controlled

Unit: $ value
Related Controls: Technical data directly related to articles
enumerated in USML Category XI is controlled in USML Category XI(d).
Related Definitions: N/A
Items:

    a. ``Technology'' (other than that described in 3E611.b or
3E611.y) ``required'' for the ``development,'' ``production,''
operation, installation, maintenance, repair, overhaul, or
refurbishing of commodities or software controlled by ECCN 3A611,
3B611 or 3D611.
    b. ``Technology'' ``required'' for the ``development,''
``production,'' operation, installation, maintenance, repair,
overhaul, or refurbishing of the following if controlled by ECCN
3A611, including 3A611.x:
    b.1. Helix traveling wave tubes (TWTs);
    b.2. Transmit/receive or transmit modules;
    b.3. Microwave monolithic integrated circuits (MMIC); or
    b.4. Discrete microwave transistors.
    c. through x. [Reserved]
    y. Specific ``technology'' ``required'' for the ``production,''
``development,'' operation,

installation, maintenance, repair, overhaul, or refurbishing of
commodities or software enumerated in ECCNs 3A611.y or 3D611.y.

0
7. In Supplement No. 1 to Part 774, amend ECCN 4A003 by revising the
License Requirements section to read as follows:

4A003 ``Digital computers'', ``electronic assemblies'', and related
equipment therefor, as follows (see List of Items Controlled) and
specially designed components therefor.

License Requirements

Reason for Control: NS, MT, CC, AT, NP

                Control(s)                          Country chart

NS applies to 4A003.b and .c..............  NS Column 1
NS applies to 4A003.e and .g..............  NS Column 2
MT applies to 4A003.e when the parameters   MT Column 1
 in 3A101.a.2.b are met or exceeded.
CC applies to ``digital computers'' for     CC Column 1
 computerized finger-print equipment.
AT applies to entire entry (refer to 4A994  AT Column 1
 for controls on ``digital computers''
 with a APP >0.0128 but <=3.0 WT).

    NP applies, unless a License Exception is available. See Sec.
742.3(b) of the EAR for information on applicable licensing review
policies.

    Note 1: For all destinations, except those countries in Country
Group E:1 of Supplement No. 1 to part 740 of the EAR, no license is
required (NLR) for computers with an ``Adjusted Peak Performance''
(``APP'') not exceeding 3.0 Weighted TeraFLOPS (WT) and for
``electronic assemblies'' described in 4A003.c that are not capable
of exceeding an ``Adjusted Peak Performance'' (``APP'') exceeding
3.0 Weighted TeraFLOPS (WT) in aggregation, except certain transfers
as set forth in Sec.  746.3 (Iraq).

    Note 2: Special Post Shipment Verification reporting and
recordkeeping requirements for exports of computers to destinations
in Computer Tier 3 may be found in Sec.  743.2 of the EAR.

* * * * *
0
8. In Supplement No. 1 to Part 774, between the entries for ECCNs 4A102
and 4A980, add a new entry for ECCN 4A611 as follows:

4A611 Computers, and parts, components, accessories, and attachments
``specially designed'' therefor, ``specially designed'' for military
use that are not enumerated in any USML category are controlled by
ECCN 3A611.

0
9. In Supplement No. 1 to Part 774, amend ECCN 5A001 by revising the
Related Controls paragraph of the List of Items Controlled section, to
read as follows:

5A001 Telecommunications systems, equipment, components and
accessories, as follows (see List of Items Controlled).
* * * * *

List of Items Controlled

* * * * *
    Related Controls: 1. See USML Category XV for controls on
telecommunications equipment defined in 5A001.a.1 and any other
equipment used in satellites that are subject to the ITAR. See USML
Category XI for controls on direction finding equipment defined in
5A001.e and any other military or intelligence electronic equipment
subject to the ITAR. 2. See USML Category XI(a)(4)(iii) for controls
on electronic attack and jamming equipment defined in 5A001.f and .h
that are subject to the ITAR. 3. See also ECCNs 5A101, 5A980, and
5A991.
* * * * *
0
10. In Supplement No. 1 to Part 774, between the entries for ECCNs
5A101 and 5A980, add a new entry for ECCN 5A611 as follows:

5A611 Telecommunications equipment, and parts, components,
accessories, and attachments ``specially designed'' therefor,
``specially designed'' for military use that are not enumerated in
any USML category are controlled by ECCN 3A611.

0
11. In Supplement No. 1 to Part 774, between the entries for ECCNs
6A226 and 6A991, add a new entry for ECCN 6A611 as follows:

6A611 Acoustic systems and equipment, radar, and parts, components,
accessories, and attachments ``specially designed'' therefor,
``specially designed'' for military use that are not enumerated in
any USML category or other ECCN are controlled by ECCN 3A611.

0
12. In Supplement No. 1 to Part 774, ECCN 7A006, revise the Reasons for
Control paragraph of the License Requirements section to read as
follows:

7A006 Airborne altimeters operating at frequencies other than 4.2 to
4.4 GHz inclusive and having any of the following (see List of Items
Controlled).

License Requirements

Reason for Control: NS, MT, AT

                Control(s)                          Country chart

NS applies to entire entry................  NS Column 1
MT applies to commodities in this entry     MT Column 1
 that meet or exceed the parameters of
 7A106.
AT applies to entire entry................  AT Column 1

* * * * *
0
13. In Supplement No. 1 to Part 774, between the entries for ECCNs
7A117 and 7A994, add a new entry for ECCN 7A611 as follows:

7A611 Navigation and avionics equipment and, systems and parts,
components, accessories, and attachments ``specially designed''
therefor, ``specially designed'' for military use that are not
enumerated in any USML category or another 600 series ECCN are
controlled by ECCN 3A611.

0
14. In Supplement No. 1 to Part 774, ECCN 7D101, revise the heading to
read as follows:

7D101 ``Software'' specially designed or modified for the ``use'' of
equipment controlled for missile technology (MT) reasons by 7A001 to
7A006, 7A101 to 7A107, 7A115, 7A116, 7A117, 7B001, 7B002, 7B003,
7B101, 7B102, or 7B103.
* * * * *
0
15. In Supplement No. 1 to Part 774, between the entries for ECCNs
9A120 and 9A980, add a new entry for ECCN 9A620 to read as follows:

9A620 Cryogenic and ``superconductive'' equipment, as follows (see
list of items controlled).
Reason for Control: NS, RS, AT, UN

                Control(s)                          Country chart

NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls

License Exceptions

LVS: $1500
GBS: N/A
CIV: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2)
of the EAR) may not be used for any item in 9A620.

List of Items Controlled

Unit: End items in number; parts, components, accessories and
attachments in $ value.
Related Controls: Electronic items that are enumerated in USML
Category XI or other USML categories, and technical data (including
software) directly related thereto, are subject to the ITAR.
Related Definitions: N/A
Items:

    a. Equipment ``specially designed'' to be installed in a vehicle
for military ground, marine, airborne, or space applications, and
capable of operating while in motion and of producing or maintaining
temperatures below 103 K (-170[deg]C).

    Note to 9A620.a: ECCN 9A620.a includes mobile systems
incorporating or employing accessories or components manufactured
from non-metallic or non-electrical conductive materials such as
plastics or epoxy-impregnated materials.

    b. ``Superconductive'' electrical equipment (rotating machinery
and transformers) ``specially designed'' to be installed in a
vehicle for military ground, marine, airborne, or space
applications, and capable of operating while in motion.

    Note to 9A610.b: ECCN 9A620.b. does not control direct-current
hybrid homopolar generators that have single-pole normal metal
armatures which rotate in a magnetic field produced by
superconducting windings, provided those windings are the only
superconducting components in the generator.

    c. through w. [Reserved]
    x. ``Parts,'' ``components,'' ``accessories'' and
``attachments'' that are ``specially designed'' for a commodity
controlled by ECCN 9A620.

0
16. In Supplement No. 1 to Part 774, between the entries for ECCNs
9B117 and 9B990, add a new entry for ECCN 9B620 to read as follows:

9B620 Test, inspection, and production commodities for cryogenic and
``superconductive'' equipment (see List of Items controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

                Control(s)                          Country chart

NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls

License Exceptions

LVS: $1500
GBS: N/A
CIV: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2)
of the EAR) may not be used for any item in 9B620.

List of Items Controlled

Unit: N/A
Related Controls: N/A
Related Definitions: N/A
Items:

    a. Test, inspection, and production end items and equipment
``specially designed'' for the ``development,'' ``production,''
repair, overhaul or refurbishing of items controlled in ECCN 9A620.
    b. [Reserved]

0
17. In Supplement No. 1 to Part 774, between the entries for ECCNs
9D105 and 9D990, add a new entry for ECCN 9D620 to read as follows:

9D620 ``Software'' ``specially designed'' for cryogenic and
``superconductive'' equipment, as follows (see List of Items
Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

                Control(s)                          Country chart

NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls

License Exceptions

CIV: N/A
TSR: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2)
of the EAR) may not be used for any ``software'' in 9D620.

List of Items Controlled

Unit: $ value
Related Controls: ``Software'' directly related to articles
enumerated on USML are subject to the control of that USML category.
Related Definitions: N/A
    Items: Software ``specially designed'' for the ``development,''
``production,'' operation, or maintenance of commodities controlled
by ECCNs 9A620 or 9B620.

0
18. In Supplement No. 1 to Part 774, between the entries for ECCNs
9E102 and 9E990, add a new entry for ECCN 9E620 to read as follows:

9E620 Technology ``required'' for cryogenic and ``superconductive''
equipment, as follows (see List of Items Controlled).

License Requirements

Reason for Control: NS, RS, AT, UN

                Control(s)                          Country chart

NS applies to entire entry................  NS Column 1
RS applies to entire entry................  RS Column 1
AT applies to entire entry................  AT Column 1
UN applies to entire entry................  See Sec.   746.1(b) for UN
                                             controls

License Exceptions

CIV: N/A
TSR: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2)
of the EAR) may not be used for any technology in 9E620.

List of Items Controlled

Unit: $ value
Related Controls: Technical data directly related to articles
enumerated on USML are subject to the control of that USML category.
Related Definitions: N/A
Items: ``Technology'' ``required'' for the ``development,''
``production,'' operation, installation, maintenance, repair,
overhaul, or refurbishing of commodities or software controlled by
ECCN 9A620, 9B620 or 9D620.

    Dated: July 12, 2013.
Kevin J. Wolf,
Assistant Secretary of Commerce for Export Administration.
[FR Doc. 2013-17559 Filed 7-24-13; 8:45 am]
BILLING CODE 3510-33-P