Conforming and Clarifying Changes to the Export Administration Regulations (EAR)

<RULE> DEPARTMENT OF COMMERCE <SUBAGY>Bureau of Industry and Security</SUBAGY> <CFR>15 CFR Parts 734, 738, 740, and 758</CFR> <DEPDOC>[Docket No. 240506-0127]</DEPDOC> <RIN>RIN 0694-AJ65</RIN> <SUBJECT>Conforming and Clarifying Changes to the Export Administration Regulations (EAR)</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Bureau of Industry and Security, Department of Commerce. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This final rule makes conforming and clarifying changes to the Export Administration Regulations (EAR). These changes include making conforming changes to the EAR to ensure that destination names reflect the current destination names that are recognized by the United States Government, clarifying the removal of certain license requirements for exports, reexports, and transfers (in-country) to and within Australia and the United Kingdom, making a conforming change to reflect that Cyprus is no longer a Country Group D:5 country, and clarifying how Russia and the Russian Federation are referenced for consistency with the designation of Russia as a U.S. Arms Embargoed destinations. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This rule is effective May 30, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> For questions on this rule, contact Philip Johnson at <E T="03">RPD2@bis.doc.gov</E> or (202) 482-2440. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> BIS is amending the EAR (15 CFR parts 730-774) by making conforming changes to the EAR to ensure that destination names reflect the current destination names that are recognized by the United States Government, by making conforming changes to ensure that the EAR reflects amendments and description of those amendments made pursuant to two recent rules, by making a conforming change to reflect that Cyprus is no longer a Country Group D:5 country, and by clarifying how Russia and the Russian Federation are referenced in the EAR to ensure consistency with the designation of Russia as a U.S. Arms Embargoed destination. The four sets of changes this final rule makes are described in section II as follows: A. Conforming changes to the Commerce Country Chart and Country Groups to ensure consistency with destinations names that are recognized by the United States Government; B. Conforming changes to the Commerce Country Chart entries for Australia and the United Kingdom; C. Conforming change to reflect Cyprus is no longer a Country Group D:5 country; <E T="03">and</E> D. Removing obsolete references to Russia and the Russian Federation in provisions that predate the country's addition to Country Group D:5. <HD SOURCE="HD1">II. Regulatory Changes</HD> <HD SOURCE="HD2">A. Conforming Changes to the Commerce Country Chart and Country Groups To Ensure Consistency With Destination Names That Are Recognized by the United States Government</HD> This final rule in supplement no. 1 to part 738 (Commerce Country Chart) removes Swaziland from the Commerce Country Chart and replaces it, in alphabetical order, with Eswatini. On April 19, 2018, King Mswati III declared that the country be known as the Kingdom of Eswatini, rather than the Kingdom of Swaziland. BIS makes this change to conform to King Mswati III's declaration, as subsequently formally recognized by the State Department ( <E T="03">see https://www.state.gov/countries-areas/eswatini/</E> ). This final rule also removes Macedonia (The Former Yugoslav Republic of) from the Commerce Country Chart and replaces it, in alphabetical order, with North Macedonia. BIS makes this change to the conform to the State Department's formal recognition of the new name in February 2019 ( <E T="03">see https://history.state.gov/countries/macedonia</E> ). Lastly, this final rule removes Turkey from the Commerce Country Chart and replaces it, in alphabetical order, with Türkiye. BIS makes this change to conform to the State Department's recognition on January 9, 2023 of the new country's new name ( <E T="03">see https://www.state.gov/countries-areas/turkey/</E> ). This rule revises only the names of the three countries; the information set forth in each of the three entries otherwise remains the same. As a conforming change to the changes made to the Commerce Country Chart described above, this final rule removes Swaziland from Country Group B in supplement no. 1 to part 740, Country Groups), and replaces it (in alphabetical order) with Eswatini. Similarly, this rule removes Macedonia (the Former Yugoslav Republic of) from Country Group B and replaces it, in alphabetical order, with North Macedonia. <HD SOURCE="HD2">B. Conforming Changes to Commerce Country Chart Entries for Australia and the United Kingdom</HD> This final rule also revises the Commerce Country Chart entries for Australia and the United Kingdom in supplement no. 1 to part 738 to align with the policy decisions and regulatory changes described and implemented in the August 19, 2024 interim final rule, “Export Control Revisions for Australia, United Kingdom, United States (AUKUS) Enhanced Trilateral Security Partnership” (89 FR 28594, published and effective on April 19, 2024) (April 19 IFR). Specifically, the April 19 IFR removed the license requirements for national security column 1 (NS1), regional stability column 1 (RS1), and missile technology column 1 (MT1) reasons for control for these two countries, as well as the footnote 3 designations for both of these countries, because the license requirements referenced in footnote 3 were no longer applicable. This rule corrects inadvertent errors in which a subsequent interim final rule, “Revisions of Firearms License Requirements” (89 FR 34680, published on April 30, 2024, and effective on May 30, 2024) (April 30 IFR), erroneously included an “X” under the NS1, RS1, and MT1 reasons for control for Australia and the United Kingdom and also erroneously included the previously-applicable footnote 3 designation for these two countries. This final rule revises the entries for Australia and the United Kingdom by removing the license requirement for NS1, RS1, and MT1, as well as the footnote 3 designation, for consistency with the intended regulatory changes described in the April 19 IFR. The changes in this final rule described under this section II.B are limited to removing text (as described above) that inadvertently appeared in the two Commerce Country Chart entries. The April 30 IFR correctly removed the footnote 9 designation for Australia and the United Kingdom. The April 30 IFR addressed the license requirement described in footnote 9 for these two destinations by adding an “X” in the crime control column 2 (CC2) reason for control for these two countries. <HD SOURCE="HD2">C. Conforming Change to Reflect the Fact That Cyprus is No Longer a Country Group D:5 Country</HD> The U.S. State Department recently amended § 126.1 of the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120 through 130) to specify that Cyprus's status as a proscribed destination is suspended from October 1, 2023 through September 30, 2024 (see 88 FR 63016). Consistent with this change, Cyprus was effectively removed from Country Group D:5. As set forth in the Note to Country Group D:5 in supplement no. 1 to part 740 of the EAR, if there are any discrepancies between the list of D:5 countries and the countries identified by the Department of State as subject to a U.S. arms embargo, the State Department's list shall be controlling. To avoid confusion on the part of exporters, reexporters, and transferors, this final rule removes Cyprus from D:5. D:5 was the only “X” in the entry for Cyprus under Country Group D, so the entry is no longer needed. <HD SOURCE="HD2">D. Removing, for Clarity, References to Russia and the Russian Federation for Provisions That Also extend to Country Group D:5</HD> The final rule, “Implementation of Sanctions Against Russia Under the Export Administration Regulations (EAR)” (87 FR 12226, published March 3, 2022, and effective February 24, 2022), included amendments to supplement no. 1 to part 740 (Country Groups) of the EAR consistent with the ITAR § 126.1. The March 3 final rule updated the Country Group designation for Russia in supplement no. 1 to part 740 to reflect its identification by the Department of State as a country subject to a United States arms embargo. As noted above, BIS harmonizes the arms embargo-related provisions in the EAR with the Directorate of Defense Trade Control's (DDTC's) regulation of arms embargoes in § 126.1 of the ITAR. Three sections of the EAR, which predated the March 18, 2021 ( <E T="03">see</E> 86 FR 14802) addition of Russia to § 126.1 under the ITAR, continued to separately identify Russia or the Russian Federation from Country Group D:5. These references are unnecessary due to the fact that Russia was subsequently added to Country Group D:5. Specifically, this final rule revises § 734.18(a)(5)(iv); § 740.9(a) introductory text (the fourth and seventh sentences) and paragraph (b)(5)(ii); and § 758.10, Note 1 to paragraph (b)(1), by removing references to Russia or the Russian Federation when the same sentence also refers to Country Group D:5. In the case of § 740.9(b)(5)(ii), the broader exclusion under paragraph (b)(5)(i) means the narrow exclusion under (b)(5)(ii) should not include Russia, which is subject to the broader exclusion as a Country Group D:5 country. <HD SOURCE="HD1">Export Control Reform Act of 2018</HD> On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA), 50 U.S.C. 4801-4852. ECRA, as amended, provides the legal basis for BIS's principal authorities and serves as the authority under whic ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 20k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━