[Federal Register: December 23, 1996 (Volume 61, Number 247)]
[Rules and Regulations]               
[Page 67448-67451]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

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DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 740, 770, and 774

[Docket No. 961216357-6357-01]
RIN 0694-AB54

 
Revisions to the Export Administration Regulations: Computer 
Revisions

AGENCY: Bureau of Export Administration, Commerce.

ACTION: Final rule.

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SUMMARY: On March 25, 1996, the Bureau of Export Administration (BXA) 
published an interim rule (61 FR 12714) that restructured and 
reorganized the Export Administration Regulations (EAR). The interim 
rule clarified the language of the EAR and simplified the application 
and made the export control regulatory regime more user friendly. This 
rule amends the EAR by making certain revisions and clarifications and 
in some cases, inserts material inadvertently omitted from the March 25 
interim rule for the export and reexport of computers as described in 
the Commerce Control List and described by License Exception CTP. Among 
other revisions, this rule provides that ``No License Required'' (NLR) 
is available for the export and reexport of digital computers (other 
than those controlled for MT reasons) with a CTP of 2,000 Mtops or 
less, except to embargoed or terrorist-supporting destinations.
    Although the Export Administration Act (EAA) expired on August 20, 
1994, the President invoked the International Emergency Economic Powers 
Act and continued in effect, to the extent permitted by law, the 
provisions of the EAA and the EAR in Executive Order 12924 of August 
19, 1994, as extended by the President's notice of August 15, 1995 (60 
FR 42767), and notice of August 14, 1996 (61 FR 42527).

EFFECTIVE DATE: This rule is effective December 23, 1996.

FOR FURTHER INFORMATION CONTACT: Patricia Muldonian, Office of Exporter 
Services, Bureau of Export Administration, Telephone: (202) 482-2440.

SUPPLEMENTARY INFORMATION:

Background

    Specifically, this rule revises the computer provisions of the EAR, 
consistent with the Presidential Directive of October 6, 1995, as 
follows:
    1. By revising Sec. 740.7(a), scope of License Exception CTP, to 
limit the scope of this License Exception to apply to digital computers 
controlled by a CTP parameter, specially designed components therefor 
and related equipment therefor.
    2. By revising Sec. 740.7(e)(2), restrictions, to apply only to 
digital computers and specially designed components therefor.
    3. By revising Sec. 770.2, to add an interpretation for computers, 
to clarify that:
    a. Digital computers or computer systems classified under 
paragraphs (a), (b), or (c) of ECCN 4A003, that qualify for ``No 
License Required'' (NLR) must be evaluated on the basis of CTP alone, 
to the exclusion of all other technical parameters. Digital computers 
or computer systems classified under paragraphs (a), (b), or (c) of 
ECCN 4A003 that qualify for License Exception CTP must be evaluated on 
the basis of CTP, to the exclusion of all other technical parameters, 
except for parameters of Missile Technology concern, or for paragraph 
(e) of ECCN 4A003 (equipment performing analog-to-digital conversions 
exceeding the limits in paragraph (a.5.a) of ECCN 3A001); and
    b. Related equipment classified under paragraphs (d), (e), (f), or 
(g) of ECCN 4A003 may be exported or reexported under License 
Exceptions GBS or CIV. When related equipment is exported or reexported 
as part of a computer system, License Exception CTP is available for 
the computer system including the related equipment.
    4. In Export Control Classification Number (ECCN) 4A001, by 
revising the control language for nuclear nonproliferation (NP) and 
computer (XP) controls to specify that these controls apply to 
electronic computers with a CTP greater than 2,000 Mtops.
    5. In Export Control Classification Number (ECCN) 4A002, by 
revising the control language for nuclear nonproliferation (NP) and 
computer (XP) controls to specify that these controls apply to hybrid 
computers with a CTP greater than 2,000 Mtops.
    6. By revising Export Control Classification Number (ECCN) 4A003, 
as follows:
    a. By creating a ``Note'' in the License Requirements section that 
specifies that ``No License Required'' (NLR) applies to the export or 
reexport of digital computers with a CTP between 260 and 2,000 Mtops, 
except to embargoed or terrorist-supporting destinations and computers 
controlled for MT reasons.
    b. By revising the control language for national security controls 
to specify that NS Column 1 applies to paragraphs (b) and (c) and NS 
Column 2 applies to paragraphs (a), (d), (e), (f), and (g).
    c. By revising the control language for nuclear nonproliferation 
(NP) and computer (XP) controls to specify that these controls apply to 
digital computers with a CTP greater than 2,000 Mtops.
    d. By revising License Exception GBS to clarify that related 
equipment described in paragraphs (d), (e), (f), and (g) are eligible 
for License Exception GBS.
    e. By revising License Exception CTP to clarify that this License 
Exception is available for computers controlled by paragraphs (a), (b), 
and (c), to the exclusion of other technical parameters, with the 
exception of the parameters specified as controlled for Missile 
Technology (MT) concerns or paragraph (e) (equipment performing analog-
to-

[[Page 67449]]

digital conversions exceeding the limits of ECCN 3A001.a.5.a).
    f. By revising License Exception CIV to clarify that related 
equipment described in paragraphs (d)(having a 3-D vector rate less 
than 10 M vectors/sec.), (e), (f), and (g) are eligible for License 
Exception CIV.
    7. In Export Control Classification Number (ECCN) 4D001, by 
revising the control language for nuclear nonproliferation (NP) and 
computer (XP) controls to specify that these controls apply to software 
for computers with a CTP greater than 2,000 Mtops.
    8. In Export Control Classification Number (ECCN) 4D002, by 
revising the control language for nuclear nonproliferation (NP) and 
computer (XP) controls to specify that these controls apply to software 
for computers with a CTP greater than 2,000 Mtops.
    9. In Export Control Classification Number (ECCN) 4E001, by 
revising the control language for nuclear nonproliferation (NP) and 
computer (XP) controls to specify that these controls apply to 
technology for computers with a CTP greater than 2,000 Mtops.
Savings Clause
    Shipments of items removed from eligibility for export or reexport 
under a particular General License or License Exception symbol or the 
designator NLR, as a result of this regulatory action, may continue to 
be exported under that designator until March 24, 1997.
Rulemaking Requirements
    1. This final rule has been determined to be not significant for 
purposes of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to nor shall a person be subject to a penalty for 
failure to comply with a collection of information subject to the 
requirements of the Paperwork Reduction Act unless that collection of 
information displays a currently valid OMB Control Number. This rule 
involves collections of information subject to the Paperwork Reduction 
Act of 1980 (44 U.S.C. 3501 et seq.). These collections have been 
approved by the Office of Management and Budget under control numbers 
0694-0088, 0694-0097, and 0694-0013.
    3. This rule does not contain policies with Federalism implications 
sufficient to warrant preparation of a Federalism assessment under 
Executive Order 12612.
    4. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring notice of proposed rulemaking, the opportunity for 
public participation, and a delay in effective date, are inapplicable 
because this regulation involves a military and foreign affairs 
function of the United States (Sec. 5 U.S.C. 553(a)(1)). Further, no 
other law requires that a notice of proposed rulemaking and an 
opportunity for public comment be given for this rule. Because a notice 
of proposed rulemaking and an opportunity for public comment are not 
required to be given for this rule under 5 U.S.C. or by any other law, 
the requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.) are not applicable.
    Therefore, this regulation is issued in final form. Although there 
is no formal comment period, public comments on this regulation are 
welcome on a continuing basis. Comments should be submitted to Patricia 
Muldonian, Regulatory Policy Division, Office of Exporter Services, 
Bureau of Export Administration, Department of Commerce, P.O. Box 273, 
Washington, DC 20044.
List of Subjects
15 CFR Parts 740 and 744
    Administrative practice and procedure, Exports, Foreign trade, 
Reporting and recordkeeping requirements.

15 CFR Part 770

    Exports, Foreign Trade.

    Accordingly, parts 740, 770, and 774, of the Export Administration 
Regulations (15 CFR parts 730-799) are amended as follows:
    1. The authority citation for 15 CFR parts 740 and 770 continue to 
read as follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; Notice of August 
15, 1995 (60 FR 42767, August 17, 1995); and Notice of August 14, 
1996 (61 FR 42527, August 15, 1996).

    2. 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. 720; 10 U.S.C. 7430(e); 18 U.S.C. 2510 et seq.; 22 U.S.C. 
287c; 22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; Sec. 201, Pub. L. 104-
58, 109 Stat. 557 (30 U.S.C. 185(s)); 30 U.S.C. 185(u); 42 U.S.C. 
2139a; 42 U.S.C. 6212; 43 U.S.C. 1354; 46 U.S.C. app. 466c; 50 
U.S.C. app. 5; E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; 
Notice of August 15, 1995 (60 FR 42767, August 17, 1995); Notice of 
August 14, 1996 (61 FR 42527, August 15, 1996).
PART 740--[AMENDED]

    3. Section 740.7 amended by
    a. By revising paragraph (a);
    b. By revising paragraph (b)(2);
    c. By revising paragraph (c)(2);
    d. By revising paragraph (d)(2); and
    e. By revising paragraph (e), as follows:
Sec. 740.7   Computers (CTP).

    (a) Scope. License Exception CTP authorizes exports and reexports 
of digital computers and specially designed components therefor, 
exported or reexported separately or as part of a system for 
consumption in Computer Tier countries as provided by this section. 
(Related equipment controlled under 4A003.d, .f, and .g is authorized 
under this License Exception, only when exported or reexported with 
these computers as part of a system.) You may not use this License 
Exception to export or reexport items that you know will be used to 
enhance the CTP beyond the eligibility limit allowed to your country of 
destination. When evaluating your computer to determine License 
Exception CTP eligibility, use the CTP parameter to the exclusion of 
other technical parameters for computers classified under ECCN 4A003.a, 
.b and .c, except for parameters specified as Missile Technology (MT) 
concerns or 4A003.e (equipment performing analog-to-digital conversions 
exceeding the limits in ECCN 3A001.a.5.a). This License Exception does 
not authorize the export or reexport of graphic accelerators or 
coprocessors, or computers controlled for MT reasons.
    (b) Computer Tier 1.
    (1) * * *
    (2) Eligible computers. The computers eligible for License 
Exception CTP to Tier 1 destinations are those with a CTP greater than 
2,000 Mtops.
    (c) * * *
    (2) Eligible computers. The computers eligible for License 
Exception CTP to Tier 2 destinations are those having a Composite 
Theoretical Performance (CTP) greater than 2000, but equal to or less 
than 10,000 Millions of Theoretical Operations Per Second (Mtops).
    (d) * * *
    (2) Eligible computers. The computers eligible for License 
Exception CTP to Tier 3 destinations are those having a Composite 
Theoretical Performance (CTP) greater than 2,000 Millions of 
Theoretical Operations Per Second (Mtops), but less than or equal to 
7,000 Mtops.
* * * * *
    (e) Restrictions. (1) Computers eligible for License Exception CTP 
may not be accessed either physically or computationally by nationals 
of Cuba, Iran, Iraq, Libya, North Korea, Sudan or Syria, except 
commercial consignees described in Supplement No. 3 to part 742 of the 
EAR are prohibited only from

[[Page 67450]]

giving such nationals user-accessible programmability.
    (2) Computers eligible for License Exception CTP may not be 
reexported/retransferred without prior authorization from BXA i.e., a 
license, a permissive reexport, another License Exception, or ``No 
License Required''. This restriction must be conveyed to the consignee, 
via the Destination Control Statement, see Sec. 758.6(a)(ii) of the 
EAR.
* * * * *
PART 770--[AMENDED]
    4. Section 770.2 is amended by adding a new paragraph (l) to read 
as follows:


Sec. 770.2   Commodity interpretations.

* * * * *
    (l) Interpretation 12: Computers. (1) Digital computers or computer 
systems classified under ECCN 4A003.a, .b, or .c, that qualify for ``No 
License Required'' (NLR) must be evaluated on the basis of CTP alone, 
to the exclusion of all other technical parameters. Computers 
controlled in this entry for MT reasons are not eligible for License 
Exception CTP regardles of the CTP of the computer. Digital computers 
or computer systems classified under ECCN 4A003.a, .b, or .c that 
qualify for License Exception CTP must be evaluated on the basis of 
CTP, to the exclusion of all other technical parameters, except for 
parameters of Missile Technology concern, or ECCN 4A003.e (equipment 
performing analog-to-digital conversions exceeding the limits in ECCN 
3A001.a.5.a). This License Exception does not authorize the export or 
reexport of computers controlled for MT purposes regardless of the CTP. 
Assemblies performing analog-to-digital conversions are evaluated under 
Category 3--Electronics, ECCN 3A001.a.5.a.
    (2) Related equipment classified under ECCN 4A003.d, .e, .f, or .g 
may be exported or reexported under License Exceptions GBS or CIV. When 
related equipment is exported or reexported as part of a computer 
system, NLR or License Exception CTP is available for the computer 
system and the related equipment, as appropriate.
PART 774--[AMENDED]
    5. In Supplement No. 1 to part 774 (the Commerce Control List), 
Category 4--Computers, the following Export Control Classification 
Numbers (ECCNs) are amended:
    a. By revising the ``License Requirements'' section for ECCNs 4A001 
and 4A002;
    b. By revising the ``License Requirements'' and the ``License 
Exceptions'' sections for 4A003;
    c. By revising the ``License Requirements'' section for ECCNs 4D001 
and 4D002; and
    d. By revising the ``License Requirements'' section for ECCN 4E001, 
as follows:


4A001   Electronic computers and related equipment, and ``electronic 
assemblies'' and specially designed components therefor.

License Requirements

    Reason for Control: NS, MT, AT, NP, XP.

------------------------------------------------------------------------
               Control(s)                         Country chart         
------------------------------------------------------------------------
NS applies to entire entry.............  NS Column 2.                   
MT applies to 4A001.a..................  MT Column 1.                   
AT applies to entire entry.............  AT Column 1.                   
------------------------------------------------------------------------

    NP applies to electronic computers with a CTP greater than 2,000 
Mtops, unless a License Exception is available. See Sec. 742.3(b) of 
the EAR for information on applicable licensing review policies.
    XP applies to electronic computers with a CTP greater than 2,000 
Mtops, unless a License Exception is available. XP controls vary 
according to destination and end-user and end-use. See Sec. 742.12 of 
the EAR for additional information.
* * * * *


4A002   ``Hybrid computers'', and ``electronic assemblies'' and 
specially designed components therefor.

License Requirements

    Reason for Control: NS, MT, AT, NP, XP.

------------------------------------------------------------------------
               Control(s)                         Country chart         
------------------------------------------------------------------------
NS applies to entire entry.............  NS Column 2.                   
MT applies to hybrid computers combined  MT Column 1.                   
 with specially designed ``software'',                                  
 for modeling, simulation, or design                                    
 integration of complete rocket systems                                 
 and unmanned air vehicle systems that                                  
 are usable in systems controlled for                                   
 MT reasons.                                                            
AT applies to entire entry.............  AT Column 1.                   
------------------------------------------------------------------------

    NP applies to hybrid computers with a CTP greater than 2,000 Mtops, 
unless a License Exception is available. See Sec. 742.3(b) of the EAR 
for information on applicable licensing review policies.
    XP applies to hybrid computers with a CTP greater than 2,000 Mtops, 
unless a License Exception is available. XP controls vary according to 
destination and end-user and end-use. See Sec. 742.12 of the EAR for 
additional information.
* * * * *


4A003   ``Digital computers'', ``electronic assemblies'', and related 
equipment therefor, and specially designed components therefor.

License Requirements

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

------------------------------------------------------------------------
               Control(s)                         Country chart         
------------------------------------------------------------------------
NS applies to 4A003.b and .c...........  NS Column 1.                   
NS applies to 4A003.a, d, .e, .f, and    NS Column 2.                   
 .g.                                                                    
MT applies to digital computers used as  MT Column 1.                   
 ancillary equipment for test                                           
 facilities and equipment that are                                      
 controlled by 9B005 or 9B006.                                          
CC applies to digital computers for      CC Column 1.                   
 computerized fingerprint equipment.                                    
AT applies to entire entry (refer to     AT Column 1.                   
 4A994 for controls on computers with a                                 
 CTP <gr-thn-eq> 6 but <ls-thn-eq> to                                   
 260 Mtops).                                                            
------------------------------------------------------------------------

    NP applies to digital computers with a CTP greater than 2,000 
Mtops, unless a License Exception is available. See Sec. 742.3(b) of 
the EAR for information on applicable licensing review policies.
    XP applies to digital computers with a CTP greater than 2,000 
Mtops, unless a License Exception is available. XP controls vary 
according to destination and end-user and end-use. See Sec. 742.12 of 
the EAR for additional information.

    Note: For all destinations, except Cuba, Iran, Iraq, Libya, 
N.Korea, Sudan, and Syria, no license is required (NLR) for 
computers with a CTP between 260 and 2,000 Mtops., and for 
assemblies described in 4A003.c that are not capable of exceeding a 
CTP of 2,000 Mtops in aggregation. Computers controlled in this 
entry for MT reasons are not eligible for NLR.
License Exceptions
    LVS: $5000.
    GBS: Yes, for 4A003.d, .e, .f, and .g and specially designed 
components therefor, exported separately or as part of a system.
    CTP: Yes, for computers controlled by 4A003.a, .b and .c, to the 
exclusion of other technical parameters, with the exception of 
parameters specified as controlled for Missile Technology (MT) concerns 
or 4A003.e (equipment performing analog-to-digital conversions 
exceeding the limits of 3A001.a.5.a). See Sec. 740.7 of the EAR.

[[Page 67451]]

    CIV: Yes, for 4A003.d (having a 3-D vector rate less than 10 M 
vectors/sec), .e, .f and .g.
* * * * *


4D001  ``Software'' specially designed or modified for the 
``development'', ``production'' or ``use'' of equipment controlled by 
4A001 to 4A004, 4A101, or ``software'' controlled by 4D001 to 4D003.

License Requirements

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

------------------------------------------------------------------------
               Control(s)                         Country chart         
------------------------------------------------------------------------
NS applies to ``software'' for           NS Column 1.                   
 equipment controlled by 4A001 to                                       
 4A004, 4D001 to 4D003.                                                 
MT applies to ``software'' for           MT Column 1.                   
 equipment controlled by 4A001 to 4A003                                 
 or 4A101 for MT reasons.                                               
CC applies to ``software'' for           CC Column 1.                   
 equipment controlled by 4A003 for CC                                   
 reasons.                                                               
AT applies to entire entry.............  AT Column 1.                   
------------------------------------------------------------------------

    NP applies to ``software'' for computers with a CTP greater than 
2,000 Mtops, unless a License Exception is available. See Sec. 742.3(b) 
of the EAR for information on applicable licensing review policies.
    XP applies to ``software'' for computers with a CTP greater than 
2,000 Mtops, unless a License Exception is available. See Sec. 742.12 
of the EAR for information on applicable licensing review policies.
* * * * *


4D002   ``Software'' specially designed or modified to support 
``technology'' controlled by 4E001 or 4E002.

License Requirements

    Reason for Control: NS, MT, AT, NP, XP.

------------------------------------------------------------------------
               Control(s)                         Country chart         
------------------------------------------------------------------------
NS applies to entire entry.............  NS Column 1.                   
MT applies to ``software'' for           MT Column 1.                   
 equipment controlled by 4A001 to 4A003                                 
 or 4A101 for MT reasons.                                               
AT applies to entire entry.............  AT Column 1.                   
------------------------------------------------------------------------

    NP applies to ``software'' for computers with a CTP greater than 
2,000 Mtops, unless a License Exception is available. See Sec. 742.3(b) 
of the EAR for information on applicable licensing review policies.
    XP applies to ``software'' for computers with a CTP greater than 
2,000 Mtops, unless a License Exception is available. See Sec. 742.12 
of the EAR for information on applicable licensing review policies.
* * * * *


4E001   ``Technology'' according to the General Technology Note, for 
the ``development'', ``production'' or ``use'' of equipment controlled 
by 4A001 to 4A004, 4A101 or ``software'' controlled by 4D001 to 4D003.

License Requirements

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

------------------------------------------------------------------------
               Control(s)                         Country chart         
------------------------------------------------------------------------
NS applies to ``technology'' for         NS Column 1.                   
 equipment controlled by 4A001 to                                       
 4A004, 4D001 to 4D003.                                                 
MT applies to ``technology'' for         MT Column 1.                   
 equipment controlled by 4A001 to                                       
 4A003, 4A101 4D001 or 4D002 for MT                                     
 reasons.                                                               
CC applies to ``technology'' for         CC Column 1.                   
 equipment controlled by 4A003 for CC                                   
 reasons.                                                               
AT applies to entire entry.............  AT Column 1.                   
------------------------------------------------------------------------

    NP applies to ``technology'' for computers with a CTP greater than 
2,000 Mtops, unless a License Exception is available. See Sec. 742.3(b) 
of the EAR for information on applicable licensing review policies.
    XP applies to ``technology'' for computers with a CTP greater than 
2,000 Mtops, unless a License Exception is available. See Sec. 742.12 
of the EAR for information on applicable licensing review policies.
* * * * *
    Dated: December 18, 1996.
Sue E. Eckert,
Assistant Secretary for Export Administration.
[FR Doc. 96-32483 Filed 12-20-96; 8:45 am]
BILLING CODE 3510-33-P

