As part of the Export Control Reform (ECR) initiative, on October 12, 2016, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) published a final rule describing articles that the President has determined no longer warrant control under USML Category XII (Fire Control, Laser, Imaging, and Guidance Equipment) in the International Traffic in Arms Regulations (ITAR) and transferring them to the control of the Export Administration Regulations (EAR). The rule becomes effective December 31, 2016. BIS previously published two proposed rules regarding the transferal of items from USML Cat. XII in May 2015 and February 2016. This final rule’s revisions include the establishment of “600 series” ECCNs for military fire control, laser, imaging, and guidance items; modifications related to and increased controls for certain infrared detection items; and changes to controls related to certain quartz rate sensors. Below we provide a high-level overview of these changes.
Establishment of “600 Series” for Military Fire Control, Laser, Imaging, and Guidance Items under 7x611 ECCNs
The final rule consolidates entries and establishes a single “600 series” by revising ECCN 7A611 and adding new ECCNs 7B611, 7D611, and 7E611 for military fire control, laser, imaging, and guidance commodities, software, and technology.
- 7A611: Controls military fire control, laser, imaging, and guidance equipment that are no longer described in USML Category XII (as of the effective date of the rule) and that are not covered by an existing ECCN subject to controls for reasons other than anti-terrorism.
- 7B611: Controls, test, inspection, and production equipment and related commodities “specially designed” for military fire control, laser, imaging, and guidance equipment.
- 7D611: Controls “software” “specially designed” for the “development,” “production,” operation, or maintenance of commodities controlled by 7A611 or 7B611.
- 7E611: Controls “technology” “required” for the “development,” “production,” operation, installation, maintenance, repair, overhaul, or refurbishing of items controlled by 7A611, 7B611, or 7D611.
Revisions to Increase Controls, Modify Provisions for Infrared Detection Items Subject to the EAR
End-User and End-Use Based Controls
- The final rule revises the end-user and end-use based controls (§744.9 of the EAR) to require a license (to any destination other than Canada) for exports, reexports, or transfers (in-country) of certain commodities controlled by ECCNs 0A987, 6A002, 6A003, 6A990, 6A993.a, 8A002.d.1.c, and 8A002.d.2, when the exporter, reexporter, or transferor knows or is informed that the item is intended to be used by a military end user or to be incorporated into a military commodity controlled by ECCN 0A919.
- The final rule adds a paragraph to note that the license requirement of § 744.9 does not apply to exports, reexports, or transfers (in-country) when the items described above (in the preceding bullet point) are being exported, reexported, or transferred as part of a military deployment by a unit of the government of a country in Country Group A:1.
Foreign Military Commodities (ECCN 0A919)
- The final rule expands the scope of ECCN 0A919 to control the reexport of “military commodities” that incorporate commodities classified under ECCNs 6A002, 6A003, 6A990, or 6A993.a (a wider group of infrared detection items).
- The final rule provides that there is no de minimis level for 0A919 items (not subject to the ITAR) when destined for a country in Country Group D:5. However, when destined for a country outside of Country Group D:5, such commodities would be subject to the 25% de minimis threshold.
Optical Devices for Firearms, Related Components (ECCNs 0A987 and 0E987)
- The final rule revises ECCN 0A987.f to specify which laser aiming devices or laser illuminators are controlled under the entry, and to specify that the entry does not control certain laser boresighting devices.
- The final rule creates a new ECCN 0E987 for “technology” “required” for the “development” or “production” of commodities controlled by ECCN 0A987, if such commodities incorporate a focal plane array or image intensifier tube.
Specified Cameras, Related Items (ECCN 6A003)
- Among other things, the final rule adds a License Requirement Note to provide further clarification on what constitutes a “camera” for purposes of classifying items under 6A003.
Read-Out Integrated Circuits (ROICs) (ECCN 6A990)
- The final rule expands the scope of ROICs controlled under ECCN 6A990 by controlling ROICs that are “specially designed” for focal plane arrays controlled under ECCN 6A002.a.3.
Software Controls (ECCNs 6D002, 6D003, and 6D991)
- The final rule consolidates existing, unilateral software controls and expands them by revising ECCN 6D991 to also control “software,” not elsewhere specified, that is “specially designed” for the “development,” “production,” or “use” of commodities controlled by ECCNs 6A002 or 6A003. BIS stated that “software” currently controlled under ECCNs 6D002 and 6D003.c would remain controlled under those provisions.
License Exceptions, Licensing Policies
- The final rule removes eligibility to use License Exception Technology and Software Unrestricted (TSU) for (6E001 or 6E002) certain “development” or “production” technology related to commodities controlled under ECCNs 6A002 or 6A003, except with respect to certain “technology” related to 6A003 cameras.
- The final rule removes eligibility to use License Exception TSR for certain “software” described in ECCNs 6D002 and 6D003.c.
- The final rule revises § 740.2(a)(7) to impose a new license exception restriction on 6E001 and 6E002 “technology” “required” for the “development” or “production” of specified focal plane arrays or for the development or production of third generation image intensifier tubes or image intensifier tubes greater than third generation (e.g., EBAPS).
- The final rule increases the number of items ineligible for License Exception Additional Permissive Reexports (APR) by restricting its use for all items in ECCNs 6A002, 6A003, and 6A990.
- The final rule restricts the use of License Exception Strategic Trade Authorization (STA) for all items in the following ECCNs: 6A002; 6A990; 6D002; 6D003.c; 6D991; 6E001; 6E002; 6E990; and new ECCN 0E987.
- Upon the effective date of the rule, applications for exports and reexports to a country listed in Country Group D:5 of 6E001 and 6E002 “technology” for the “development” or “production” of focal plane arrays or image intensifier tubes described in 6A002, or for 6E990 “technology,” will be reviewed with a presumption of denial.
Removal of Controls Specific to QRS-11 Sensors
- The final rule removes special controls related to QRS-11 sensors, including the 0% de minimis level for such sensors, the restriction on the availability of license exceptions for such sensors, and the RS Column 1 control and references to such sensors in ECCN 7A994, as well as other references.
- BIS stated in the final rule that it does not believe any QRS-11 sensors are described on the revised USML and that one must follow the Order of Review in Supplement No. 4 to part 774 of the EAR to determine whether certain sensors are captured under a 600 series ECCN or under a dual-use ECCN.
BIS’s final rule also revised, among other things, the scope of control of ECCN 2A984 and made a number of conforming changes.
The State Department published a companion final rule describing more precisely the articles continuing to warrant control on the USML. State’s companion final rule also becomes effective on December 31, 2016.
This license requirement would be imposed on ECCN 0A987 commodities that incorporate items in ECCNs 6A002 and 6A003, or certain cameras in 6A993.a.
This requirement would be imposed on ECCN 6A993.a commodities that meet the criterion of Note 3.a to 6A003.b.4.
ECCN 0A919 controls “military commodities” produced and located outside the U.S. that are not subject to the ITAR and incorporate one or more cameras controlled under ECCNs 6A003.b.3, 6A003.b.4.b, or 6A003.b.4.c. It also controls such “military commodities” if they incorporate more than a de minimis
amount of U.S.-origin 600 series content or are the direct products of U.S.-origin 600 series “technology” or “software.”
This provision would only control those ECCN 6A993.a commodities that have a maximum frame rate equal to or less than 9 Hz and thus meeting the criterion specified in Note 3.a to ECCN 6A003.b.4.b.
Section 734.4(a)(5) of the EAR currently (prior to the effective date of the rule) provides that there is no de minimis
level for 0A919 items that incorporate certain infrared detection items.
This restriction would solely be imposed on 6D002 “software” for the “use” of commodities controlled under ECCN 6A002.b.
This restriction would solely be imposed on 6D991 “software” for the “development,” “production,” or “use” of commodities controlled under ECCNs 6A002, 6A003, or 6A990.
This restriction would solely be imposed on 6E001 “technology” for the “development” of commodities controlled under ECCNs 6A002 or 6A003.
This restriction would solely be imposed on 6E002 “technology” for the “production” of commodities controlled under ECCNs 6A002 or 6A003.
QRS-11 sensors were originally designed for military application but are now being used in civil aircraft.
The final rule revises ECCN 2A984 to control concealed object detection equipment operating in the frequency range from 30 GHz to 3000 GHz and having a spatial resolution of 0.1 milliradian up to and including 1 milliradian at a standoff distance of 100 meters; and “parts” and “components,” not elsewhere specified.