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December 22, 2016

BIS Removes Certain Nuclear Nonproliferation Column 2 Controls

On November 25, 2016, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued a final rule amending the Export Administration Regulations (EAR) to remove nuclear nonproliferation (NP) Column 2 license requirements from certain pressure tubes, pipes, fittings, pipe valves, pumps, numerically controlled machine tools, oscilloscopes, and transient recorders on the Commerce Control List (CCL). BIS made these changes to make the controls on these items more consistent with controls imposed by countries participating in the Nuclear Suppliers Group.[1] While the rule became effective on November 25, 2016, certain “software” that, as a result of the final rule, went from being designated as EAR99 to being controlled on the CCL will continue to be classified and designated as EAR99 through January 31, 2017.

Removal of ECCNs 2A292, 2A293, 2B290, and 3A292
BIS removed ECCNs 2A292, 2A293, 2B290, and 3A292 from the CCL. While certain items previously controlled under ECCN 2B290 are no longer listed on the CCL and are designated as EAR99, most items previously controlled by these ECCNs continue to be listed on the CCL and require a license for anti-terrorism (AT) reasons, and in one instance, for chemical/biological (CB) reasons.

ECCN 2A292
Valves previously controlled under ECCN 2A292.b that meet or exceed the technical parameters described in ECCN 2B350.g are now controlled under ECCN 2B350. They continue to require a license for CB and AT reasons. All other items (pressure tube, pipe, and fittings of 200 mm or more inside diameter suitable for operation at pressures of 3.4 MPa or greater) previously controlled under ECCN 2A292 are now controlled under new ECCN 2A992.

ECCN 2A293
All items previously controlled under ECCN 2A293 (pumps designed to move molten metals by electromagnetic forces) are now controlled under new ECCN 2A993.

ECCN 2B290
Turning machines or combination turning/milling machines previously controlled under ECCN 2B290 that meet or exceed the technical parameters described in ECCN 2B991.d.1 are now controlled under ECCN 2B991, and continue to require a license for AT reasons. All other turning machines or combination turning/milling machines previously controlled under ECCN 2B290 that do not meet or exceed these parameters are now designated as EAR99.

ECCN 3A292
Oscilloscopes and transient recorders previously controlled under ECCN 3A292 are now controlled under new paragraphs .d through .g in ECCN 3A992. These items continue to require a license for AT reasons.

Other ECCNs
BIS also made conforming amendments to the EAR, including amendments to the related “software” and “technology” controls regarding the items described above. For instance, BIS stated that a consequence of adding certain oscilloscopes and transient recorders under new paragraphs 3A992.d through .g is that ECCN 3D991 (which includes certain “software” for general purpose electronic equipment described in ECCN 3A992) will also control “software” for the “development,” “production,” or “use” of oscilloscopes and transient recorders described in new ECCN 3A992.d through .g. As a result, the “software” will no longer be designated as EAR99, but will be controlled. However, BIS stated that it will continue to classify and designate such “software” as EAR99 through January 31, 2017. Afterwards, BIS will classify such “software” as being controlled for AT reasons under ECCN 3D991.

Other ECCNs affected by the rule include ECCNs 2D290, 2D991, 2D993 (new), 2E001, 2E002, 2E290, 2E301, 2E991, 2E993 (new), 3E292, and 3E991. (Please see the final rule for a table describing the items and ECCNs affected by the rule.)

Impact
Prior to the removal of ECCNs 2A292, 2A293, 2B290, and 3A292 from the CCL, the items previously controlled under those entries required a license for NP and/or AT reasons to nine countries (i.e., Cuba, Iran, Iraq, Israel, Libya, North Korea, Pakistan, Sudan, and Syria). BIS stated that currently, “in addition to the license requirements that apply to most of these items under ECCNs 2A992, 2A993, 2B350.g, 2B991.d.1, or 3A992…, a license from BIS continues to be required for exports, reexports, or transfers (in-country) involving any of these items to Cuba, North Korea, or Syria.” Moreover, BIS stated that a BIS license also “continues to be required for exports, reexports, or transfers (in-country) involving any of these items that are not designated as EAR99” to Iran or Sudan.

Finally, BIS emphasized that “as a practical matter, the amendments made by this rule are likely to have a significant impact on license requirements only with respect to exports, reexports, or transfers (in-country) of items previously controlled under ECCN 2B290 and now classified as EAR99, or items now controlled on the CCL under new ECCN 2A992, new ECCN 2A993, ECCN 2B991, or ECCN 3A992 for AT reasons only, that involve the following destinations: Iraq, Israel, Libya, or Pakistan.”
For specific questions, please contact us.

[1] Participating countries in the Nuclear Suppliers Group agree to impose export controls on items (that could be used for nuclear proliferation activities) listed in the Annex to the Nuclear Suppliers Group’s “Guidelines for Transfers of Nuclear Related Dual-Use Equipment, Materials, Software, and Related Technology.”