Standards-Related Activities and the Export Administration Regulations

<RULE> DEPARTMENT OF COMMERCE <SUBAGY>Bureau of Industry and Security</SUBAGY> <CFR>15 CFR Parts 734, 744 and 772</CFR> <DEPDOC>[Docket No. 240712-0190]</DEPDOC> <RIN>RIN 0694-AI06</RIN> <SUBJECT>Standards-Related Activities and the Export Administration Regulations</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Bureau of Industry and Security, Commerce. <HD SOURCE="HED">ACTION:</HD> Interim final rule with request for comments. <SUM> <HD SOURCE="HED">SUMMARY:</HD> In this interim final rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to revise the scope and the terms used in the EAR to describe “standards-related activities” that are subject to the EAR. BIS is making these revisions to ensure that export controls and associated compliance concerns do not impede the participation and leadership of U.S. companies in legitimate standards-related activities. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Effective date:</E> This rule is effective July 18, 2024. <E T="03">Comment date:</E> Comments must be received by BIS no later than September 16, 2024. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> You may submit comments, identified by docket number BIS-2020-0017 or RIN 0694-AI06, through the <E T="03">Federal eRulemaking Portal: http://www.regulations.gov.</E> Follow the instructions for submitting comments. You can find this interim final rule by searching for its <E T="03">regulations.gov</E> docket number, which is BIS-2020-0017. All filers using the portal should use the name of the person or entity submitting comments as the name of their files, in accordance with the instructions below. Anyone submitting business confidential information should clearly identify the business confidential portion at the time of submission, file a statement justifying nondisclosure and referring to the specific legal authority claimed, and also provide a non-confidential version of the submission. For comments submitted electronically containing business confidential information, the file name of the business confidential version should begin with the characters “BC.” Any page containing business confidential information must be clearly marked “BUSINESS CONFIDENTIAL” on the top of that page. The corresponding non-confidential version of those comments must be clearly marked “PUBLIC.” The file name of the non-confidential version should begin with the character “P.” The “BC” and “P” should be followed by the name of the person or entity submitting the comments. Any submissions with file names that do not begin with a “BC” or “P” will be assumed to be public and will be made publicly available through <E T="03">http://www.regulations.gov.</E> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Susan Kramer, Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce. Phone: (202) 482-2440; Email: <E T="03">Susan.Kramer@bis.doc.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">A. Background</HD> Participation and leadership in standards development is crucial to protecting and enhancing U.S. national and economic security and has been instrumental to the global technological leadership of the United States. Standards development underpins U.S. economic prosperity and fortifies U.S. leadership in critical and emerging technologies. The U.S. standards development system is unique because it is built upon a wide variety of processes that are open, voluntary, decentralized, and led by the private sector. These processes feature openness to participation by materially interested stakeholders and consensus-based decision making. Finalized standards are primarily published by private sector standards organizations, not the U.S. Government. On May 4, 2023, the Biden-Harris Administration announced the “United States Government National Standards Strategy for Critical and Emerging Technology” (USG NSSCET). The USG NSSCET is intended to support and complement existing private sector-led activities and plans, including the American National Standards Institute (ANSI) United States Standards Strategy (USSS), with a focus on critical and emerging technology(ies) (CET). Consistent with the USG NSSCET strategy, the Commerce Department is committed to engaging “with a broad range of private sector, academic and other key stakeholders, including foreign partners, to address gaps and bolster U.S. participation in [CET] standards development activities.” As outlined in the USG NSSCET, the U.S. Government is prioritizing efforts for CET standards development in identified areas that are essential to U.S. national security and competitiveness in critical industries including biotechnologies; positioning, navigation and timing services; communications and networking technologies; and quantum information technologies among others. The USG NSSCET outlines four objectives (investment, participation, workforce, and integrity and inclusivity) and eight corresponding lines of effort to ensure that the United States remains a global leader in developing merit-based standards that embrace transparency, openness, impartiality and consensus, effectiveness and relevance, coherence, and broad participation. More information regarding the USG NSSCET can be found here: <E T="03">https://www.whitehouse.gov/wp-content/uploads/2023/05/US-Gov-National-Standards-Strategy-2023.pdf.</E> Since 2019, BIS has made a number of revisions to the EAR (15 CFR parts 730-774) that have affected U.S. participation and leadership in standards-related activities. Most recently, BIS published an interim final rule, “Authorization of Certain “Items” to Entities on the Entity List in the Context of Specific Standards Activities” ( <E T="03">see</E> 87 FR 55241 (September 9, 2022)) (the September 2022 rule), that amended the EAR to authorize the release of specified items subject to the EAR when such release is for a “standards-related activity” as defined in the EAR (a term in double quotes indicates the term is defined in part 772 (Definition of Terms) of the EAR). Additional information about that process, the listing of Huawei Technologies Co., Ltd and its non-U.S. affiliates (collectively “Huawei”), and associated licensing requirements can be found at 84 FR 22961 (May 21, 2019) (background section providing a brief overview of how entities are added to the Entity List); see also 87 FR at 55241 (background section describing licensing requirements for Huawei as a result of being added to the Entity List). The revisions promulgated in the September 2022 rule sought to ensure that export controls do not impede the participation and leadership of U.S. companies in standards-related activities. As noted in that rule, any impediment to U.S. participation in standards development forums is a national security threat to the United States because it not only limits U.S. leadership in standards development, but other countries are already racing to replace U.S. participation with their own leadership and standards. In many cases, a decrease in U.S. participation not only undermines U.S. national security and foreign policy interests but also contributes to a potential future global standards environment that works to oppose U.S. interests. <HD SOURCE="HD1">BIS Regulatory Actions and Standards</HD> BIS has been actively involved on issues related to standards and export controls since the addition of Huawei to supplement no. 4 to part 744 (Entity List) of the EAR on May 16, 2019 ( <E T="03">See</E> 84 FR 22961 (May 21, 2019)). The addition of Huawei to the Entity List imposed a license requirement on all exports, reexports and transfers (in-country) to Huawei and its listed affiliates. Since that action and subsequent additions of other Huawei affiliates to the Entity List, BIS has engaged with industry as well as the interagency on export controls and standards-related activities and has published two interim final rules specific to how the EAR treat standards-related activities. <HD SOURCE="HD2">(a) TGL and the June 2020 IFR</HD> First, to avoid disruption to existing U.S. and global telecommunications networks, on May 22, 2019, BIS issued a Temporary General License (TGL) to authorize certain activities with Huawei, including, among other things, U.S. industry's participation as necessary for the development of 5G standards by a duly recognized standards body when Huawei was also participating in the standards-related activities ( <E T="03">see</E> 84 FR 23468 (May 22, 2019)). The TGL was subsequently extended through August 13, 2020. As the TGL was set to expire, BIS published an interim final rule with a request for comment, “Release of “Technology” to Certain Entities on the Entity List in the Context of Standards Organizations” ( <E T="03">see</E> 85 FR 36719, June 18, 2020) (the June 2020 rule), that amended the EAR to authorize the release of certain technology to Huawei and its affiliates on the Entity List. The June 2020 rule defined “standards” and “standards organizations” on the basis of the Office of Management and Budget Circular A-119 (OMB A-119) definitions and authorized limited releases of low-level “technology” and “software” to Huawei in the context of “standards” in a “standards organization.” In public comments received in response to the June 2020 rule, U.S. industry raised concerns that the definitions and provisions promulgated in the June 2020 rule were chilling U.S. industry's participation in standards development. Standards development in the United States, unlike in other countries, is driven by the private sector ( <E T="03">e.g.,</E> industry, academia, etc.), which is an important factor that has fueled effective U.S. leadership in standards development. The U.S. Government takes a consulta ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 63k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━