[Federal Register: July 12, 2001 (Volume 66, Number 134)]
[Rules and
Regulations]
[Page 36675-36683]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
Department of Commerce
Bureau of Export Administration
15 CFR Part 740, et al.
Department of the Treasury
Office of Foreign Assets Control
31 CFR Part 515, et al.
Exports of Agricultural Commodities, Medicines, and Medical Devices to Cuba,
Sudan, Libya, and Iran; Cuba Travel-Related Transactions; Final Rules
DEPARTMENT OF COMMERCE
Bureau of Export Administration
15 CFR Parts 740, 742, 746, 772 and 774
[Docket No. 010612152-1152-01]
RIN 0694-AC37
Exports of Agricultural Commodities, Medicines and Medical Devices
AGENCY: Bureau of Export Administration, Commerce.
ACTION: Interim final rule with request for comments.
SUMMARY: This rule amends the Export
Administration Regulations (EAR) to implement certain provisions of the Trade
Sanctions Reform and Export Enhancement Act (TSRA) of 2000. The TSRA requires
the President to terminate existing U.S. unilateral agricultural and medical
sanctions and also provides that the export of agricultural commodities,
medicines and medical devices to designated terrorist countries be made in
accordance with the licensing regime described in that Act. The Department of
Commerce is implementing TSRA as it relates to exports of agricultural
commodities to Cuba. This rule establishes License Exception Agricultural
Commodities (AGR) to permit exports and reexports to Cuba of agricultural
commodities that are not specifically identified on the Commerce Control List (CCL)
and are classified as EAR99. The Department of the Treasury's Office of Foreign
Assets Control (OFAC) is implementing TSRA as it relates to exports to Iran,
Libya, and Sudan of agricultural commodities, medicines and medical devices that
are not specifically identified on the CCL and are classified as EAR99.
DATES: This rule is effective July 26, 2001. Comments must be received by
September 10, 2001.
ADDRESSES: Written comments should be sent to Kirsten Mortimer,
Regulatory Policy Division, Bureau of Export Administration, Department of
Commerce, Room 2705, 14th Street and Pennsylvania Avenue, NW.,
Washington, DC 20230.
FOR FURTHER INFORMATION CONTACT: Brian Nilsson, Office of Strategic Trade and
Foreign Policy Controls, Bureau of Export Administration, Telephone: (202)
482-4196, E-mail: bnilsson@bxa.doc.gov.
SUPPLEMENTARY INFORMATION:
Background
On October 28, 2000, the President signed the Trade Sanctions
Reform and Export Enhancement Act (TSRA) (Title IX of Pub. L. 106-387) which
provides that the President shall terminate any unilateral agricultural sanction
or unilateral medical sanction in effect as of the date of enactment of the TSRA,
except that exports of agricultural commodities, medicines and medical devices
to designated terrorist countries are subject to the export requirements
described in the TSRA. A designated terrorist country is a country that has been
determined by the Secretary of State to have repeatedly provided support for
acts of international terrorism under section 620A of the Foreign Assistance Act
of 1961, section 6(j)(1) of the Export Administration Act of 1979, or section
40(d) of the Arms Export Control Act.
The TSRA does not require the President to terminate any
unilateral agricultural sanction or unilateral medical sanction that prohibits,
restricts or conditions the provision or use of any agricultural commodity,
medicine or medical device that is controlled on the United States Munitions
List, controlled on any control list established by
the Export Administration Act of 1979 or any successor statute, or used to
facilitate the development or production of chemical or biological weapons or
weapons of mass destruction.
This rule amends the EAR to create a new License Exception
AGR for exports of agricultural commodities classified as EAR99 from the United
States to Cuba and reexports of U.S. origin agricultural commodities
classified as EAR99 to Cuba. The Department of the Treasury's Office of Foreign
Assets Control is also taking action to implement the TSRA requirements, notably
with respect to agricultural and medical exports classified as EAR99 to Iran,
Sudan and Libya.
I. License Exception Agricultural Commodities (AGR) to Cuba
This rule establishes a new License Exception Agricultural
Commodities (AGR) in Sec. 740.18 of the EAR. License Exception AGR authorizes
exports and certain reexports of agricultural commodities provided that they are
classified as EAR99 and meet all the other criteria of License Exception AGR,
including the prior notification requirements described below. License Exception
AGR is not applicable for items controlled under a specific Export Control
Classification Number (ECCN) on the Commerce Control List (CCL). To be eligible
for AGR, shipments of agricultural commodities must be made pursuant to a
written contract and must take place within one year of the signing of a
contract, unless the shipment is a commercial sample or donation in which case
the contract requirement does not apply. Agricultural commodities are defined in
part 772 (Definitions of Terms) of the EAR and must be classified as EAR99 to be
eligible for License Exception AGR. Transactions that do not satisfy all the
criteria of License Exception AGR require a license from BXA.
Prior Notification Requirement
As noted above, to be eligible for License Exception AGR,
exporters must also provide prior notification by completing the Multipurpose
Application Form (BXA-748P) or its electronic equivalent and including certain
information requested on the BXA-748P form. The following blocks must be
completed, as appropriate, on the Multipurpose Application Form: Blocks 1, 2, 3,
4, 5, 14, 16, 17,18, 19, 21, 22 (a), (e), (f), (g), (h), (i), (j), 23, and 25.
If your commodity is fertilizer, western red cedar or live horses, you must
confirm that BXA has previously classified your commodity as EAR99 by placing
the Commodity Classification Automatic Tracking System (CCATS) number in block
22(d). The box ``other'' must be selected as the type of application. This
designator will automatically place the notification into a special review
track. BXA will not initiate the registration of the notice unless all the
required information is complete. BXA will refer notifications to interested
reviewing agencies within two business days of registration. The application
control number will allow exporters and reexporters to track their notices by
calling the System for Tracking Export License Applications (STELA) at (202)
482-2752. STELA will provide the date of registration of the notification and a
notification number. If no reviewing agencies raise objections within nine
business days, STELA will confirm that you may proceed with the transaction,
provided you satisfy all other requirements of License Exception AGR, including
the requirement to have a written contract prior to any shipment. BXA will issue
subsequent written confirmation. STELA will also advise if a license is
required, in which case BXA will process the notification as a license
application in accordance with the procedures described in part 750 and the
licensing policies set forth in the EAR. BXA will change the notification number
to a license application number. At this time, BXA may request additional
information to complete the
processing of the license application. These procedures implement section
906(a)(1) of the Trade Sanction Reform and Export Enhancement Act which requires
that procedures be in place to deny exports of
agricultural commodities to any entity in Cuba that promotes international
terrorism.
Donations of Agricultural Commodities to Cuba
Donations of agricultural commodities are eligible for export
and reexport to Cuba under License Exception AGR, provided the transaction meets
the requirements and procedures of this license exception, except the contract
requirement does not apply. Donations of food items to non-governmental
organizations (NGOs) and individuals in Cuba may also be eligible for License
Exception GFT. See Sec. 740.12 for eligibility requirements of gift parcels and
humanitarian donations under License Exception GFT.
Exports of Medicines and Medical Devices to Cuba
Exports of medicines and medical devices are not eligible for
export or reexport to Cuba under TSRA procedures and, therefore, License
Exception AGR is not available. Such items continue to require authorization for
export to Cuba under the provisions of the Cuban Democracy Act (CDA) (22 U.S.C.
6004). BXA reviews applications for such exports on a case-by-case basis and
will generally approve such exports unless one of the restrictions set forth in
the CDA and in section 746.2 of the EAR applies. As is the standard licensing
practice under the EAR, licenses issued have a twenty-four month validity
period. Exporters are not required to have a written contract to apply for an
export license.
II. OFAC Authorization for Agricultural Commodities, Medicines and Medical
Devices to Iran, Libya and Sudan
The Department of the Treasury's Office of Foreign Assets
Control (OFAC) is implementing the provisions of TSRA as they relate to exports
of agricultural commodities, medicines and medical devices that are classified
as EAR99 to Iran, Libya and Sudan. Exporters should review OFAC's regulations
for the requirements relating to exports of agricultural commodities, medicines
and medical devices to Iran, Libya and Sudan.
As explained in the OFAC regulations, exporters must have an
official commodity classification of EAR99 from BXA for all medical devices
(including supplies) prior to submitting an application to OFAC, unless the item
is specifically listed on BXA's website at www.bxa.doc.gov/Regulations/Trade
Sanctions ReformExport EnhancementAct.html. This list identifies those medical
supplies, such as syringes, bandages, gauze and similar items, that do not
require BXA classification prior to OFAC review. When submitting a license
application to OFAC under its expedited review procedures, exporters must
indicate to OFAC that their medical supply is on the BXA medical supply list on
BXA's website. Otherwise, exporters must provide OFAC with a copy of the BXA
commodity classification for those medical devices that BXA has classified as
EAR99. Exporters who are unable to access BXA's website may contact BXA at
202-482-4811 to obtain BXA's medical supplies list.
In addition, BXA has identified on its website a list of
medicines that are on the CCL and not eligible for OFAC's expedited review
procedures. As explained in the OFAC regulations, when submitting a license
application to OFAC under its expedited review procedures, exporters must
indicate to OFAC that their medicine is not on the BXA medicine list on BXA's
website. If exporters are unsure if their medicine is on the CCL, they should
seek an official commodity classification from BXA confirming that their
medicine is classified as EAR99 prior to submission of an application to OFAC
under its expedited review procedures. Exporters who are unable to access BXA's
website may contact BXA at 202-482-4811 to obtain BXA's list of medicines that
are
on the CCL.
For agricultural commodities, an official commodity
classification of EAR99 from BXA is only required for fertilizers, western red
cedar, and live horses. See section 748.3 of the EAR for instructions for
submitting commodity classification requests.
III. Definitions and Procedures for Classifying Agricultural and Medical
Commodities
This rule establishes new definitional entries for
``agricultural commodities'', ``medicines'' and ``medical devices'' in part 772
of the EAR. Commodities included within these definitions must be classified as
EAR99 to be eligible for License Exception AGR or OFAC authorization. Exporters
should review OFAC's regulations for the requirements relating to exports of
agricultural commodities, medicines and medical devices to Iran, Libya and
Sudan.
Agricultural Commodities
Agricultural commodity is defined in Sec. 902 of the Trade
Sanctions Reform and Export Enhancement Act of 2000 (TSRA) (Sec. 902 of Public
Law 106-387), which incorporates by reference the definition of agricultural
commodity in section 102 of the Agriculture Trade Act of 1978 (7 U.S.C. 5602).
Section 775 of Public Law 106-387 also provides that, for purposes of
administering Title IX of the TSRA, the term agricultural commodity also
includes fertilizer and organic fertilizer. Under this rule,
agricultural commodities include food commodities, feed, fish, shellfish and
fish products; beer, wine and spirits; soft drinks; livestock; fiber, including
cotton, wool and other fibers; tobacco and tobacco products; wood and wood
products, including lumber and utility poles; seeds; and reproductive materials
such as fertilized eggs, embryos and semen. A list of these commodities is
available for review at the U.S. Department of Agriculture website at http://www.fas.usda.gov/itp/sanctions.html.
If you have questions regarding whether an item is defined by section 102 of the
Agricultural Trade Act of 1978 (7 U.S.C. Sec. 5602), you should consult with the
Department of Agriculture.
Consistent with section 775 of Pub. L. 106-387, this rule
also includes fertilizers and organic fertilizers in the scope of agricultural
commodities. Although items in this paragraph may not be specifically identified
as agricultural commodities on the Department of Agriculture website, they are
considered agricultural commodities under the EAR and for purposes of
implementation of the TSRA.
For purposes of License Exception AGR (see section 740.18),
agricultural commodities also include vitamins, minerals, food additives and
dietary supplements, and bottled water. These items do not fall within the scope
of Sec. 102 of the 1978 Agricultural Trade Act and are not identified as
agricultural commodities on the Department of Agriculture website, but are
treated as agricultural commodities for the purposes of License Exception AGR.
Under this rule, agricultural commodities do not include
furniture made from wood; clothing manufactured from plant or animal materials;
agricultural equipment (whether hand tools or motorized equipment); pesticides,
insecticides, or herbicides; or cosmetics (unless derived entirely from plant
materials).
Note, however, that certain items that meet the definition of
agricultural commodity are controlled on the CCL
and are not eligible for BXA's License Exception AGR for Cuba or OFAC's revised
export procedures for Iran, Libya and Sudan. These include certain fertilizer
products controlled under new ECCN 1C997, western red cedar controlled under
ECCN 1C988, and live horses (if to be exported by sea) controlled under ECCN
0A980. For other fertilizer products, western red cedar and live horses that are
not controlled on the CCL, exporters must have an official commodity
classification of EAR99 from BXA prior to submission of a notification under
License
Exception AGR to BXA (for Cuba) or submission of a request for authorization to
OFAC (for Iran, Libya, and Sudan). Exporters should review OFAC's regulations
for the requirements relating to exports of agricultural commodities to Iran,
Libya and Sudan.
In sum, two specific determinations are required prior to
qualifying for BXA or OFAC authorization under the TSRA procedures: that the
product is an agricultural commodity as defined in part 772 of the EAR; and that
it is classified as EAR99 under the EAR.
For Cuba, items that are not agricultural commodities, as
well as items that are agricultural commodities but that are on the CCL, will
require a license from BXA. BXA will review such applications under the
licensing policies set forth in Sec. 746.2 (15 CFR 746.2).
Medicines and Medical Devices
Medicines and medical devices are not eligible under License
Exception AGR to Cuba, but are eligible for OFAC authorization to Iran, Libya
and Sudan. For the purposes of TSRA, medicines are drugs as defined in section
201 of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 321). Pursuant to the
Act, BXA has determined that for the purposes of this rule, medicines include
prescription medicines and over the counter medicines for humans and animals.
Medical devices are defined in section 201 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321) under the term ``device''. Pursuant to the Act, BXA
has determined that for the purposes of this rule, medical devices include
medical supplies, instruments, equipment, equipped ambulances,
institutional washing machines capable of sterilizing hospital clothing and
bedding, and vehicles with installed medical testing equipment. Medical devices
do not include general purpose furniture such as desks, tables, or lamps used in
hospital offices and waiting rooms. Exporters should consult with the Food and
Drug Administration for guidance on whether an item meets the definition of
medicine or medical device under the Federal Food, Drug and Cosmetic Act.
Although most medicines and medical devices are classified as EAR99, certain
vaccines, biological and chemical products, and parts for medical devices are
controlled under specific ECCNs on the CCL.
For exports of medicines and medical devices to Iran, Libya,
and Sudan, two specific determinations are required prior to submitting a
request for OFAC authorization: that the product is a medicine or medical device
as defined in part 772 of the EAR; and that it is classified as EAR99 under the
EAR.
Exporters should review OFAC's regulations for the
requirements relating to exports of medical devices to Iran, Libya and Sudan. As
explained in the OFAC regulations, prior to submitting an application to OFAC,
exporters must have an official commodity classification of EAR99 from BXA for
all medical devices (including supplies), unless the item is specifically listed
on BXA's website at www.bxa.doc.gov/
Regulations/Trade Sanctions Reform Export EnhancementAct.html. This list
identifies those medical supplies, such as syringes, bandages, gauze and similar
items, that do not require BXA classification prior to OFAC review. When
submitting a license application to OFAC under its expedited review procedures,
exporters must indicate to OFAC that their medical supply is on the BXA medical
supply list on BXA's website. Otherwise, exporters must provide OFAC with a copy
of the BXA commodity classification for those medical devices that BXA has
classified as EAR99.
In addition, BXA has identified on its website a list of
medicines that are on the CCL and not eligible for OFAC's expedited review
procedures. As explained in the OFAC regulations, when submitting a license
application to OFAC under its expedited review procedures, exporters must
indicate to OFAC that their medicine is not on the BXA medicine list on BXA's
website. If exporters are unsure if their medicine is on the CCL, they should
seek an official commodity classification from BXA confirming that their
medicine is classified as
EAR99 prior to submission of an application to OFAC under its expedited review
procedures. Exporters should review OFAC's regulations for the requirements
relating to exports of medicines to Iran, Libya and Sudan.
As noted above, exports of medicines and medical devices are
not eligible for export or reexport to Cuba under TSRA procedures. Such items
continue to require authorization for export to Cuba under the provisions of the
Cuban Democracy Act (CDA) (22 U.S.C. 6004). For clarity and conformity, however,
the term ``medical devices'' defined under TSRA is determined to be coextensive
with the terms ``medical supplies, instruments and equipment'' used in section
1705 of the CDA. This rule also defines the term ``medicines'' for the purposes
of the TSRA and will also apply this definition to ``medicines'' as that term is
used in the CDA.
IV. Commodity Classification Requirements
As explained in the OFAC regulations, for exports of medical
devices to Iran, Libya, and Sudan, exporters must have an official commodity
classification of EAR99 from BXA prior to submission of a request for
authorization under OFAC's expedited review procedures, unless the medical
supply is specifically listed on BXA's website. The medical supply list
identifies those medical supplies that do not require BXA classification prior
to OFAC review. For exports of medicines to Iran, Libya, and Sudan, exporters
must confirm that their item is not described on BXA's medicines list on BXA's
website. The medicines list identifies medicines that are not eligible for
OFAC's expedited review procedures. For exports of fertilizers, western red
cedar, and live horses, a BXA commodity classification is required prior to
submission of a notification for Cuba under License Exception AGR or prior to
submission of a request to OFAC under its expedited review procedures for Iran,
Libya or Sudan.
V. Continuing Controls
This rule also does not affect controls on any agricultural
commodity, medicine or medical device classified under a specific ECCN on the
CCL. In addition, this rule does not affect U.S. controls on technology or
software used to manufacture agricultural commodities or on technology to design
or produce biotechnological items, or medical devices.
Except for the creation of new License Exception AGR in
section 740.18, this rule does not make any other license exception available
for exports to Cuba, nor does it change the availability or non-availability of
any other License Exception. Note that License Exception AVS does not authorize
the export of vessels from the United States on temporary sojourn. Consistent
with the 1992 Cuban Democracy Act, License Exception AVS does not authorize the
export of ship stores, equipment or spares for use on a vessel, bunkering fuel,
petroleum and petroleum items and dunnage for use on any vessel carrying goods
or passengers to or from Cuba. Therefore, a specific license is required from
BXA for all such exports.
Also in continuation of current rules, aircraft that are on
temporary sojourn to Cuba that are carrying items eligible for export under
License Exception AGR and that satisfy all the requirements of License Exception
AVS (Sec. 740.15(a) of the EAR) do not need a specific license from BXA.
Aircraft that do not satisfy all requirements of License Exception AVS will
require a specific license from the BXA and license applications will be
reviewed on a case-by-case basis and favorably considered when carrying
commodities authorized under the EAR. OFAC also is responsible for licensing
family remittances and the financial transactions of persons traveling to
Cuba, including travel associated with sales of agricultural commodities to Cuba
and persons that accompany cargo on aircraft authorized by BXA.
Finally, this rule does not affect U.S. nonproliferation
export controls, including end-use controls (known as the Enhanced Proliferation
Control Initiative or EPCI). This rule does not relieve exporters or reexporters
of their obligations under General Prohibition 5 in Sec. 736.2(b)(5) of the EAR
which provides that you may not, without a license, knowingly export or reexport
any item subject to the EAR for use in an activity that is prohibited by part
744 of the EAR. BXA strongly urges the use of Supplement No. 3 to part 732 of
the EAR, BXA's ``Know Your Customer'' Guidance and Red Flags.
VI. New Controls
Consistent with the provisions of the Export Administration
Act (EAA), as amended, and after consultation with the Secretary of State, BXA
submitted a foreign policy report to the Congress providing notice of its intent
to impose new foreign policy controls on ammonium nitrate, including fertilizers
and fertilizer blends containing more than 15% by weight ammonium nitrate,
except liquid fertilizers (containing any amount of ammonium nitrate) or dry
fertilizers containing less than 15% by weight ammonium nitrate. These items are
now classified as ECCN 1C997, and require a license for anti-terrorism reasons.
This foreign policy report was sent to Congress on June 15, 2001. In the
development of a final rule, BXA may further amend the EAR to add certain
medicines and medical devices to the CCL.
VII. Technical Changes
This rule amends sections 746.3 and 746.7 to clarify the
requirements for exports and reexports to Iran and Iraq.
This rule amends the EAR in the following ways:
Part 740 (License Exceptions)
New License Exception Agricultural Commodities (AGR) is
established in Sec. 740.18 of the EAR for exports of agricultural commodities
classified as EAR99. License Exception AGR authorizes the export of agricultural
commodities from the United States and reexport of U.S. origin agricultural
commodities to Cuba provided that the notification requirements and other
provisions of License Exception AGR are met.
For purpose of transparency, this rule also restates in
section 740.2 (Restrictions on All License Exceptions) that license exceptions
may not be used for exports or reexports to a destination subject to a
comprehensive embargo, unless specifically authorized in the section dealing
with a particular embargoed country in part 746 (Embargoes and Other Special
Controls) of the EAR.
Part 742 (Control Policy: CCL Based Controls)
In Sec. 742.8, Sec. 742.9, Sec. 742.10, Sec. 742.19, and
Supplement No. 1 to Part 742, references are added to reflect the new control
status and licensing policy for ammonium nitrate, including certain fertilizers
containing ammonium nitrate, under ECCN 1C997. Licenses are required under the
EAR for the export and reexport of fertilizers controlled by ECCN 1C997 to Cuba,
Iran, Iraq, Libya, North Korea, Sudan and Syria. Applications for items
controlled under new ECCN 1C997 are subject to a case-by-case review with
general policy of denial to all end-users.
Part 746 (Embargoes and Other Special Controls)
Section 746.2 Cuba
In Sec. 746.2 (Cuba), License Exception AGR eligibility is
established for exports and certain reexports of agricultural commodities
classified as EAR99 to Cuba. The licensing review policy in Sec. 746.2 is
revised to apply to exports and reexports of agricultural commodities subject to
the EAR that do not meet the eligibility requirements of License Exception AGR
and to other agricultural items (e.g. insecticides, pesticides and herbicides).
Medicines and medical devices continue to require an export
license to Cuba under the provisions of the CDA. Note that the definition of
medical devices under TSRA is determined to be coextensive with the terms
``medical supplies'', ``instruments'' and ``equipment'' under the CDA and Sec.
746.2 is revised to use the terms medicines and medical devices, which are
defined in part 772.
Section 746.3 Iraq
Sec. 746.3 is revised to reflect new controls on certain
fertilizer products under new ECCN 1C997. This section also clarifies that no
person may export or reexport any item subject to both the EAR and OFAC's Iraqi
Sanctions Regulations without prior OFAC authorization and that exports and
reexports subject to the EAR that are not subject to the Iraqi Sanctions
Regulations may require authorization from BXA.Section 746.7 Iran
This section is revised to clarify that exports and reexports
subject to the EAR that are not subject to the Iranian Transactions Regulations
may require authorization from BXA.
Part 772 Definitions of Terms
In part 772, this rule adds definitions for the terms
``agricultural commodities'', ``medicines'', and ``medical devices'' consistent
with Sections 902 and 775 of Pub. L. 106-387.
Part 774 The Commerce Control List
In Supplement No. 1 to part 774, ECCN 1C997 is added to the
CCL. A license is required for the export or reexport of ammonium nitrate,
including fertilizers which contain certain concentrations of ammonium nitrate,
to terrorist supporting countries.
Rulemaking Requirements
1. This interim final rule has been determined to be not
significant for purposes of E.O. 12866.
2. Notwithstanding any other provision of law, no person is
required to respond nor shall any 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.). This collection has been approved by the Office of Management and Budget
under control number 0694-0088,
``Multi-Purpose Application,'' which carries a burden hour estimate of 40
minutes to prepare and submit electronically and
[[Page 36680]]
45 minutes to submit manually on multipurpose Application Form (BXA-748P). This
rule contains a new information collection requirement that has been submitted
for emergency approval under control number 0694-XXXX, ``Prior Notification for
Exports under License Exception AGR''. Prior notification using existing form
BXA-748P requires burden hour estimate of 40 minutes to prepare and submit
electronically and 45 minutes to submit manually.
3. This rule does not contain policies with Federalism
implications sufficient to warrant preparation of a Federalism assessment as
that term is defined in Executive Order 13132.
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. See 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
interim 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. 553 or
by any other law, the analytical requirements of the Regulatory
Flexibility
Act (5 U.S.C. 601 et seq. ) are not applicable.
However, because of the importance of the issues raised by
these regulations, this rule is issued in interim form and comments will be
considered in the development of final regulations. Accordingly, the Department
encourages interested persons who wish to comment to do so at the earliest
possible time to permit the fullest consideration of their views.
The period for submission of comments will close September
10, 2001. The Department will consider all comments received before the close of
the comment period in developing final regulations. Comments received after the
end of the comment period will be considered if possible, but their
consideration cannot be assured. The Department will not accept public comments
accompanied by a request that a part or all of the material be treated
confidentially because of its business proprietary nature or for any other
reason. The Department will return such comments and materials to the person
submitting the comments and will not consider them in the development of final
regulations. All public comments on these regulations will be a matter of public
record and will be available for public inspection and copying. In the interest
of accuracy and completeness, the Department requires comments in written form.
Oral comments must be followed by written memoranda, which
will also be a matter of public record and will be available for public review
and copying. Communications from agencies of the United States Government or
foreign governments will not be made available for public inspection.
Copies of the public record concerning these regulations may
be requested from: Bureau of Export Administration, Office of Administration,
U.S. Department of Commerce, Room 6883, 14th and Constitution Avenue, NW,
Washington, DC 20230; (202) 482-0637. This component does not maintain a
separate public inspection facility.
Requesters should first view BXA's website (which can be reached through www.bxa.doc.gov).
If requesters cannot access BXA's website, please call the number above for
assistance.
List of Subjects
15 CFR Part 740
Administrative practice and procedure, Exports, Foreign
trade,
Reporting and recordkeeping requirements.
15 CFR Parts 742, 772 and 774
Exports, Foreign trade.
15 CFR Part 746
Embargoes, Exports, Foreign trade, Reporting and
recordkeeping requirements.
Accordingly, parts 740, 742, 746, 772, and 774 of the Export
Administration Regulations (15 CFR parts 730-799) are amended as follows:
1. The authority citations for parts 740 and 772 are revised
to
read as follows:
Authority: 50 U.S.C. app. 2401 et seq.; Pub. L. No. 106-387;
Pub. L. No. 106-508; 50 U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767, 3 CFR,
1996 Comp., p. 228; E.O. 13206 (66 F.R. 18397, April 9, 2001).
2. The authority citation for part 742 is revised to read
as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; Pub. L. No. 106-387;
Pub. L. No. 106-508; 50 U.S.C. 1701 et seq.; 18 U.S.C. 2510 et seq.; 22 U.S.C.
3201 et seq.; 42 U.S.C. 2139a; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p.
179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR
59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p.
228; Notice of November 9, 2000 (65 F.R. 68063, November 13, 2000); E.O. 13206
(66 F.R. 18397, April 9, 2001).
3. The authority citation for part 746 is revised to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; Pub. L. No. 106-387;
Pub. L. No. 106-508; 50 U.S.C. 1701 et seq.; 22 U.S.C. 287c; 22 U.S.C. 6004; E.O.
12854, 58 FR 36587, 3 CFR 1993 Comp., p. 614; E.O. 12918, 59 FR 28205, 3 CFR,
1994 Comp., p. 899; E.O. 13088, 63 FR 32109, 3 CFR, 1998 Comp., p. 191; E.O.
13121 of April 30, 1999, 64 FR 24021 (May 5, 1999); E.O. 13206 (66 F.R. 18397,
April 9, 2001).
4. The authority citation for parts 774 is revised to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; Pub. L. No. 106-387;
Pub. L. No. 106-508; 50 U.S.C. 1701 et seq.; 10 U.S.C. 7420; 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;
30 U.S.C. 185(s), 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. 13026, 61 FR 58767, 3 CFR, 1996 Comp.,
p. 228; E.O. 13206 (66 F.R. 18397, April 9, 2001).
PART 740--[AMENDED]
5. Section 740.1 is amended by revising paragraph (a) to read
as
follows:
Sec. 740.1 Introduction.
* * * * *
(a) Scope. A ``License
Exception'' is an authorization contained in this part that allows you to export
or reexport under stated
conditions, items subject to the Export Administration Regulations (EAR) that
would otherwise require a license under General Prohibition One, Two, or Three,
as indicated under one or more of the Export Control Classification Numbers (ECCNs)
in the Commerce Control List (CCL) in Supplement No. 1 to part 774 of the EAR
and items subject to the EAR that would require a license based on the embargo
policies described in part 746 of the EAR. If your export or reexport is subject
to General Prohibition Six for embargoed destinations, refer to part 746 of the
EAR to determine the availability of any License Exceptions. Special commodity
controls apply to short supply items. License Exceptions for items listed on the
CCL as controlled for Short Supply reasons are found in part 754 of the EAR. If
your export or reexport is subject to General Prohibition Five, consult part 744
of the EAR. If your export or reexport is subject to General Prohibitions Four,
Seven, Eight, Nine, or Ten, then no License Exceptions apply.
* * * * *
6. Section 740.2 is amended by adding paragraph (a)(6) to
read as follows:
Sec. 740.2 Restrictions on all License Exceptions.
(a) * * *
(6) The export or reexport is to an embargoed destination (Cuba, Iran, Iraq, and Libya), unless a license exception or portion thereof is specifically listed in the license exceptions paragraph pertaining to a particular embargoed country in part 746 of the EAR.
* * * * *
7. Section 740.18 is added to read as follows:
Sec. 740.18 Agricultural commodities (AGR).
(a) Eligibility requirements. License Exception AGR permits
the export of agricultural commodities to Cuba, as well as the reexport of U.S.
origin agricultural commodities to Cuba, provided your transaction meets all of
the following criteria:
(1) The commodity meets the definition of ``agricultural
commodities'' in part 772 of the EAR;
(2) The commodity is EAR99. You must have an official
commodity classification of EAR99 from BXA for fertilizers, western red cedar
and live horses before you submit a notification under this license
exception. See Sec. 748.3 of the EAR for information on how to submit a
commodity classification request;
(3) The export or reexport is made pursuant to a written
contract, except for donations and commercial samples which are not subject to
this contract requirement;
(4) The export or reexport is made within 12 months of the
signing of the contract or within 12 months of notification that no objections
were raised (if no contract is required). In the case of multiple
partial shipments, all such shipments must be made within the 12 months of the
signing of the contract or within 12 months of notification that no objections
were raised (if no contract is required); and
(5) You notify BXA prior to exporting or reexporting
according to the procedures set forth in paragraph (c) of this section. If you
intend to engage in multiple shipments during the one-year period after
the signing of the contract, you need only notify BXA prior to the first
shipment.
(b) Restrictions. (1) No export or reexport to any individual
or entity designated as a Specially Designated Terrorist or Foreign Terrorist
Organization may be made under License Exception AGR (see part 744 of the EAR).
(2) No export or reexport to or for use in biological,
chemical, nuclear warfare or missile proliferation activities may be made under
License Exception AGR (see part 744 of the EAR).
(3) No U.S.-owned or controlled foreign firm may export from
abroad to Cuba a foreign produced agricultural commodity containing more than
10% U.S.-origin content. Such U.S.-owned or controlled foreign firms require a
specific license from BXA as well as the Department of the Treasury's Office of
Foreign Assets Control (OFAC). Transactions not subject to the EAR (under 10%
U.S.-origin content) require a license from OFAC.
(c) Prior notification. (1) General requirement. You must
notify BXA prior to any export or reexport (or prior to the first of multiple
shipments) under License Exception AGR.
(2) Procedures. You must provide prior notification of
exports and reexports under License Exception AGR by submitting a completed
Multipurpose Application Form (BXA-748P) or its electronic equivalent. The
following blocks must be completed, as appropriate, on the Multipurpose
Application Form: Blocks 1, 2, 3, 4, 5 (by marking box 5 ``Other''), 14, 16, 17,
18, 19, 21, 22 (a), (e), (f), (g), (h), (i), (j), 23, and 25 according to the
instructions described in Supplement No. 1 to part 748 of the EAR. If your
commodity is fertilizer, western red cedar or live horses, you must confirm that
BXA has previously classified your commodity as EAR99 by placing the Commodity
Classification Automatic Tracking System (CCATS) number in block 22(d). BXA will
not initiate the registration of an AGR notification unless all requested
information on the Multipurpose Application form is complete.
(3) Action by BXA. Within two business days of the
registration of the AGR notification, BXA will refer the notification for
interagency review, or if necessary return the notification without action
(e.g., if the information provided is incomplete). Registration is defined as
the point at which the notification is entered into BXA's electronic system.
(4) Review by other departments or agencies. The Departments
of Defense, State, and other agencies, as appropriate, may review the AGR
notification. BXA must receive department or agency objections within
nine business days of the referral. Unlike the provisions described in Sec.
750.4(b) of the EAR, there are no provisions for stopping the processing time of
the AGR notification. If, within 11 business days after the date of
registration, any reviewing agency provides a written objection that the
recipient may promote international terrorism or the transaction raises
nonproliferation concerns, you may not use License Exception AGR. In such cases,
BXA will notify you that a license is required for the export or reexport. BXA
will then process the AGR notification as a license application in accordance
with the provisions described in Sec. 750.4 of the EAR, and the licensing
policies set forth in the EAR. At this time, BXA may request additional
information. hen BXA confirms that no agency has raised an objection within
eleven business days (as described in paragraph (c)(5) of this section),
you
may proceed with the transaction provided that you satisfy all other
requirements of License Exception AGR, including the requirement to have a
written contract prior to any shipment (unless a donation or commercial sample).
(Note that the fact that you have been advised that no agency has objected to
the transaction does not exempt you from other licensing requirements under the
EAR, such as those based on knowledge of a prohibited end-use or end-user as
referenced in general prohibition five (part 736 of the EAR) and set forth in
part 744 of the EAR.)
(5) Status of pending AGR notification requests. You must
contact BXA's System for Tracking Export License Applications (``STELA'') at
(202) 482-2752 for status of your pending AGR notification. (See Sec. 750.5 of
the EAR for procedures to access information on STELA.) STELA will provide the
date of registration of the AGR notification. If no department or agency
objection is raised within 11 business days, STELA will, on the twelfth business
day following the date of registration, provide you with confirmation of that
fact. You may not proceed with your shipment unless you confirm with STELA that
no objection has been raised. BXA will subsequently issue written confirmation
to you. If an objection is raised, STELA will indicate that a license is
required. The AGR notification will then be processed as a license application.
In addition, BXA may provide notice of an objection by telephone, fax, courier
service, or other means.
(d) Donations. (1) Donations of agricultural commodities are
eligible for export and reexport to Cuba under License Exception AGR, provided
the transaction meets the requirements and procedures of this license exception
(except the written contract requirement).
(2) Donations of food items to non-governmental organizations
(NGOs) and individuals in Cuba may also be eligible for License Exception GFT.
See Sec. 740.12 for eligibility requirements of gift parcels and humanitarian
donations under License Exception GFT.
PART 742--[AMENDED]
8. Sec. 742.8 is amended by revising the phrase ``(c)(6)
through (c)(41)'' in paragraph (a)(4)(ii) to read ``(c)(6) through (c)(43)''.
9. Sec. 742.9 is amended by revising the phrase ``(c)(22)
through (c)(41)'' in paragraph (a)(3)(ii) to read ``(c)(22) through (c)(43)''
and by adding new paragraph (b)(1)(viii) to read as follows:
Sec. 742.9 Anti-terrorism: Syria.
* * * * *
(b) * * *
(1) * * *
(viii) Ammonium nitrate, including certain fertilizers
containing ammonium nitrate, controlled under ECCN 1C997.
* * * * *
10. Sec. 742.10 is amended by revising the phrase ``(c)(16)
through (c)(41)'' in paragraph (a)(4)(ii) to read ``(c)(16) through (c)(43)''
and by adding new paragraph (b)(1)(ix) to read as follows:
Sec. 742.10 Anti-terrorism: Sudan.
* * * * *
(b) * * *
(1) * * *
(ix) Ammonium nitrate, including certain fertilizers
containing ammonium nitrate, controlled under ECCN 1C997.
* * * * *
11. Sec. 742.19 is amended by adding new paragraph
(b)(1)(xviii) to read as follows:
Sec. 742.19 Anti-terrorism: North Korea.
* * * * *
(b) * * *
(1) * * *
(xviii) Ammonium nitrate, including certain fertilizers
containing ammonium nitrate, controlled under ECCN 1C997.
* * * * *
12. Supplement No. 2 to Part 742 is amended by revising
paragraph (b)(3)(ii) and adding paragraph (c)(43) to read as follows:
Supplement No. 2 to Part 742--Anti-Terrorism Controls: Iran, North Korea, Syria
and Sudan Contract Sanctity Dates and Related Policies
* * * * *
(b) * * *
(3) * * *
(ii) The following items to all end-users: for Iran, items in
paragraphs (c)(6) through (c)(43) of this Supplement; for North Korea, items in
paragraph (c)(6) through (c)(44) of this Supplement; for Sudan, items in
paragraphs (c)(6) through (c)(14), and (c)(16) through (c)(43) of this
Supplement; and for Syria, items in paragraphs (c)(6) through (c)(8), (c)(10)
through (c)(14), (c)(16) through (c)(19), and (c)(22) through (c)(43) of this
Supplement.
(c) * * *
(43) Ammonium nitrate, including certain fertilizers
containing ammonium nitrate, under ECCN 1C997 on the CCL.
(i) Iran. Applications for all end-users in Iran of these
items will generally be denied.
(ii) Syria. Applications for all end-users in Syria of these
items will generally be denied. Contract sanctity date: June 15, 2001.
(iii) Sudan. Applications for all end-users in Sudan of these
items will generally be denied.
(iv) North Korea. Applications for all end-users in North
Korea of these items will generally be denied. Contract sanctity date: June 15,
2001.
* * * * *
PART 746--[AMENDED]
13. Section 746.2 is amended by adding paragraph (a)(1)(xii),
by revising paragraphs (b)(1) introductory text, (b)(3)(iii)(B), (b)(3)(iii)(D)
and (b)(4)(iii), by redesignating paragraph (d) as (e), and by adding new
paragraph (d), and by revising redesignated paragraph (e) to read as follows:
Sec. 746.2 Cuba.
(a) * * *
(1) * * *
(xii) Exports of agricultural commodities, classified as
EAR99, under License Exception Agricultural Commodities (AGR) and certain
reexports of U.S. origin agricultural commodities, classified as EAR99, under
License Exception AGR (see Sec. 740.18 of the EAR).
* * * * *
(b) * * *
(1) Medicines and Medical Devices. Applications to export
medicines and medical devices as defined in part 772 of the EAR will generally
be approved, except:
* * * * *
(3) * * *
(iii) * * *
(B) Your transaction involves the export of foreign-produced
medicines or medical devices incorporating U.S. origin parts, components or
materials, in which case the application will be reviewed according to the
provisions of paragraph (b)(1) of this section.
(C) * * *
(D) Your transaction is for the export of donated food to
individuals or non-governmental organizations in Cuba and does not qualify as a
humanitarian donation under License Exception GFT (Sec. 740.12 of the EAR) or
License Exception AGR (Sec. 740.18 of the EAR).
(4) * * *
(iii) Exports of agricultural items, which are outside the
scope of agricultural commodities as defined in part 772 of the EAR, such as
insecticides, pesticides and herbicides, as well as agricultural commodities not
eligible for License Exception AGR, require a license and will be reviewed on a
case-by-case basis.
* * * * *
(d) Definitions. For purposes of
this section, ``U.S. person'' means any person subject to the jurisdiction of
the United States, as described in Sec. 515.329 of the Cuban Assets Control
Regulations (31 CFR 515.329).
(e) Related controls. OFAC maintains controls on the
activities of persons subject to U.S. jurisdiction, wherever located, involving
transactions with Cuba or any specially designated Cuban national, as provided
in 31 CFR part 515. OFAC's Terrorism List Government Sanctions Regulations in 31
CFR part 596 prohibit U.S. persons from engaging in a financial transaction with
the government of a designated state sponsor of international terrorism without
OFAC authorization. The Department of State also implements sanctions on
countries that are designated state sponsors of international terrorism.
Exporters and reexporters should consult with those agencies for further
guidance on these related controls.
14. Section 746.3 is amended by revising paragraph (a)
introductory text to read as follows:
Sec. 746.3 Iraq.
(a) License requirements. OFAC administers an embargo against
Iraq under the authority of the International Emergency Economic Powers Act of
1977, as amended, and the United Nations Participation Act of 1945, as amended,
and in conformance with United Nations Security Council Resolutions. The
applicable OFAC regulations, the Iraqi Sanctions Regulations, are found in 31
CFR part 575. You should consult with OFAC for authorization to export or
reexport items subject to U.S. jurisdiction to Iraq, or to any entity owned or
controlled by, or specially designated as acting for or on behalf of, the
Government of Iraq. Please note that such applications will generally be denied
by OFAC, absent a published policy stating otherwise. Under the EAR, you need a
license to export or reexport to Iraq any item on the CCL containing a CB Column
1, CB Column 2, CB Column 3, NP Column 1, NP Column 2, NS Column 1, NS Column 2,
MT Column 1, RS Column 1, RS Column 2, CC Column 1, CC Column 2, CC Column 3 in
the Country Chart Column of the License Requirements section of an ECCN, or
classified under ECCNs 1C980, 1C981, 1C982, 1C983, 1C984, 1C997, 5A980, 0A980,
0A982, 0A983, 0A985, and 0E982; however, to avoid duplication, an authorization
from OFAC constitutes authorization under the EAR, and no separate BXA
authorization is necessary. No person may export or reexport any item subject to
both the EAR and OFAC's Iraqi Sanctions Regulations without prior OFAC
authorization. Exports and reexports subject to the EAR that are not subject to
the Iraqi Sanctions Regulations may require authorization from BXA.
* * * * *
15. Section 746.7 is amended by adding a sentence to the end
of the introductory paragraph, to read as follows:
Sec. 746.7 Iran.
* * * Exports and reexports subject to the EAR that are not
subject to the Iranian Transactions Regulations may require authorization from
BXA.
* * * * *
PART 772--[AMENDED]
16. Section 772.1 is amended by adding the definitions
of ``agricultural commodities'', ``medical devices'', and ``medicines'' in
alphabetical order, to read as follows:
Sec. 772.1 Definitions of terms as used in the Export Administration
Regulations (EAR).
* * * * *
Agricultural commodities. Agricultural
commodities include food (including processed food); feed; fish; shellfish and
fish products; beer, wine and spirits; livestock; fiber including cotton, wool
and other fibers; tobacco and tobacco products; wood and wood products; seeds;
fertilizer and organic fertilizer; reproductive materials such as fertilized
eggs, embryos and semen. For the purposes of the EAR, agricultural commodities
do not include furniture made from wood; clothing manufactured from plant or
animal materials; agricultural equipment (whether hand tools or motorized
equipment); pesticides, insecticides, or herbicides; or cosmetics (unless
derived entirely from plant materials).
Note 1: This definition of agricultural commodities includes
fertilizer and organic fertilizer, as listed in section 775 of the 2001
Agriculture, Rural Development, Food and Drug Administration, and Related
Agencies Appropriations Act (Act) (Public Law 106-387) and commodities listed in
section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602) as
incorporated in section 902 of the Act, as well as commodities determined by the
Department of Agriculture to fall within the scope of section 102 of the 1978
Agricultural
Trade Act.
Note 2: For purposes of License Exception AGR (see Sec.
740.18 of the EAR), agricultural commodities also include vitamins, minerals,
food additives and dietary supplements, and bottled water. These items do not
fall within the scope of section 102 of the 1978 Agricultural Trade Act, but are
treated as agricultural commodities for the purposes of License Exception AGR.
Note 3: For purposes of License Exception AGR and export
license applications to Iran, Sudan and Libya under the licensing procedures set
forth in the appropriate regulations promulgated and administered by Treasury's
Office of Foreign Assets Control, agricultural commodities only include those
that are classified as EAR99.
* * * * *
Medical devices. For purposes of
the EAR, medical devices are ``devices'' as defined in section 201 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) including medical supplies,
instruments, equipment, equipped ambulances, institutional washing machines for
sterilization, and vehicles with medical testing equipment. Note that certain
component parts and spares to be exported for incorporation into medical devices
are on the Commerce Control List. Only items meeting the definition of ``medical
device'' and that are classified as EAR99 are eligible for export to Iran, Libya
and Sudan under the licensing procedures set forth in the appropriate
regulations promulgated and administered by Treasury's Office of Foreign Assets
Control.
Medicines. Medicines means ``drug'' as defined in section 201
of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 321). For purposes of the
EAR, medicines includes prescription and over the counter
medicines for humans and animals. Note that certain medicines, such as vaccines
and immunotoxins, are on the Commerce Control List. Only items meeting the
definition of ``medicine'' and that are classified as EAR99 are eligible for
export to Iran, Libya and Sudan under the licensing procedures set forth in the
appropriate regulations promulgated and administered by Treasury's Office of
Foreign Assets Control.
* * * * *
PART 774--[AMENDED]
17. In Supplement No. 1 to part 774 (the Commerce Control
List), Category 1--Materials, Chemicals, ``Microorganisms,'' and ``Toxins'' is
amended by adding Export Control Classification Number (ECCN) 1C997 to read as
follows:
1C997 Ammonium Nitrate, Including Fertilizers and Fertilizer Blends
Containing More Than 15% by Weight Ammonium Nitrate, Except Liquid Fertilizers
(Containing Any Amount of Ammonium Nitrate) or Dry Fertilizers Containing Less
Than 15% by Weight Ammonium Nitrate
License Requirements
Reason for Control: AT.
------------------------------------------------------------------------
Control(s)
Country chart
------------------------------------------------------------------------
AT applies to entire entry................ AT Column 1 and Iraq
------------------------------------------------------------------------
License Exceptions
LVS: N/A.
GBS: N/A.
CIV: N/A.
List of Items Controlled
Unit: Kilograms.
Related Controls: N/A.
Related Definitions: N/A.
Items: The list of items controlled is contained in the ECCN
heading.
Dated: July 9, 2001.
James J. Jochum,
Assistant Secretary for Export Administration.
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