End-Use and End-User Based Export Controls, Including U.S. Persons Activities Controls: Military and Intelligence End Uses and End Users

DEPARTMENT OF COMMERCE <SUBAGY>Bureau of Industry and Security</SUBAGY> <CFR>15 CFR Parts 730, 732, 734, 736, 740, and 744</CFR> <DEPDOC>[Docket No. 240712-0193]</DEPDOC> <RIN>RIN 0694-AJ43</RIN> <SUBJECT>End-Use and End-User Based Export Controls, Including U.S. Persons Activities Controls: Military and Intelligence End Uses and End Users</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Bureau of Industry and Security, Department of Commerce. <HD SOURCE="HED">ACTION:</HD> Proposed rule, with request for comments. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Department of Commerce, Bureau of Industry and Security (BIS), seeks public comment on proposed changes to existing restrictions under the Export Administration Regulations (EAR) on military and intelligence end uses and end users and related U.S. persons activities controls, as well as the proposed addition of a military-support end-user control. These proposed revisions and additions to the EAR's end-use, end-user, and “U.S. persons” activity controls would implement expanded Export Control Reform Act of 2018 (ECRA) authority to control certain “U.S. persons” activities under the EAR. Specific to the EAR's “U.S. persons” activities controls, BIS is proposing amendments to control `support' furnished by “U.S. persons” to military end users and military-production activities, as well as intelligence end users that are not otherwise already regulated under or prohibited by U.S. law. In addition, BIS is proposing to revise the definition of `support' set forth in the EAR's “U.S. person” activity control provision in response to requests by the public for clarification. The revisions and additions, along with clarifications, to end use, end user, and “U.S. persons” activity controls under the EAR, would further the national security and the foreign policy of the United States. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments must be received by BIS no later than September 27, 2024. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Comments on this rule may be submitted to the Federal rulemaking portal ( <E T="03">www.regulations.gov</E> ). The <E T="03">regulations.gov</E> ID for this rule is: BIS-2024-0029. Please refer to RIN 0694-AJ43 in all comments. All filers using the portal should use the name of the person or entity submitting the 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 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.” Any submissions with file names that do not begin with either a “BC” or a “P” will be assumed to be public and will be made publicly available through <E T="03">https://www.regulations.gov.</E> Commenters submitting business confidential information are encouraged to scan a hard copy of the non-confidential version to create an image of the file, rather than submitting a digital copy with redactions applied, to avoid inadvertent redaction errors which could enable the public to read business confidential information. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> For questions contact Sharron Cook, Senior Export Policy Analyst in the Regulatory Policy Division of the Bureau of Industry and Security at <E T="03">Sharron.cook@bis.doc.gov</E> or Phone: (202) 482-4890. Please refer to RIN 0694-AJ43 in the subject line of emails. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Background</HD> Section 5589(b) of the December 2022 National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023 (Pub. L. 117-263, NDAA for FY 2023) amended section 1753(a)(2)(F) of the Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4812(a)(2)(F)) by providing the Bureau of Industry and Security (BIS) with the statutory authority to impose controls on “the activities of United States persons, wherever located, relating to specific foreign military, security, or intelligence services.” Consistent with this statutory amendment, BIS proposes to revise the “U.S. persons” activities control in § 744.6 on military-intelligence end-use and end-user activities and expand existing part 744 restrictions to encompass activities of “U.S. persons” in connection with defined military end users, military-production activities (an end use proposed by this rule), and intelligence end users. BIS also proposes to clarify the definition of `support' in the “U.S. persons” activities control provision. Consistent with section 1754(d)(1) of ECRA (50 U.S.C. 4813(d)(1)), BIS proposes to regulate the “U.S. persons” activities described above only to the extent not subject to a license requirement or general prohibition administered by another Federal department or agency. BIS is proposing amendments to the EAR on foreign-security end user controls, and controls that would restrict U.S. persons' support of such end users, in a separate rule published concurrently with this rule. Furthermore, also in accordance with ECRA, as expanded by the NDAA for FY 2023, BIS proposes to add to part 744 new controls on defined military-support end users, as well as revise existing controls on military-intelligence, and military end users and end uses. These revisions and additions to end-use and end-user controls under the EAR would further the national security and foreign policy of the United States. On November 14, 1994, Executive Order 12938 (E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950) directed BIS to continue to regulate the activities of “U.S. persons” to prevent their participation in activities that could contribute to the proliferation of weapons of mass destruction. This control, which is set forth in § 744.6 of the EAR, imposes licensing requirements on assistance furnished by “U.S. persons” in connection with activities of proliferation concern, even when such assistance does not involve any items subject to the EAR or any foreign entities subject to specified restrictions under the EAR ( <E T="03">e.g.,</E> persons whose export privileges have been denied under the EAR). Subsequently, with the enactment of ECRA as part of the John S. McCain NDAA for FY 2019 (Pub. L. 115-232), Congress authorized in ECRA section 4812(a)(2)(F) the control of “U.S. persons” activities related not only to weapons of mass destruction and their means of delivery, but also to specific “foreign military intelligence services.” Accordingly, in January 2021, BIS amended § 744.6 of the EAR to add a new restriction on the activities of “U.S. persons” in support of certain military-intelligence end uses and end users and also created a new § 744.22 that targeted exports, reexports, and transfers (in-country) destined for certain military-intelligence end uses or end users (86 FR 4865 (Jan. 15, 2021)). Through the NDAA for FY 2023's amendment to ECRA, section 1753(a)(2)(A-F) of ECRA (50 U.S.C. 4812(a)(2)(A-F)) directs the President to impose controls on the activities of “U.S. persons,” wherever located, relating to specific nuclear explosive devices; missiles; chemical or biological weapons; whole plants for chemical weapons precursors; foreign maritime nuclear projects; and foreign military services, foreign intelligence services, and foreign security services. Additionally, § 1754(d) of ECRA (50 U.S.C. 4813(d)) directs the Secretary of Commerce to require U.S. persons to apply to BIS for authorization to engage in the aforementioned activities except to the extent that those activities are already authorized by a statute or regulation administered by a Federal department or agency other than the Department of Commerce. As described below, BIS proposes amending § 744.6 of the EAR to add additional controls on specific activities of “U.S. persons” consistent with ECRA authority as expanded pursuant to the NDAA for FY 2023 related to military and intelligence services. Controls related to security services consistent with the NDAA for FY 2023 will be proposed in a separate rule. Specifically, in this rule, BIS proposes modifying the existing prohibition on “U.S. persons” `support' to military-intelligence end users and end uses in § 744.6(b)(5) to apply to military end users. In addition, BIS proposes to add two new prohibitions in § 744.6(b)(6) and (7) corresponding to `military-production' activities and intelligence end users, respectively. Furthermore, also consistent with its expanded ECRA authority, BIS proposes to add additional end-use and end-user controls in connection with the U.S. person `support' activities subject to the EAR's general prohibitions (paragraph in § 744.6(b)(1) through (7)). Specifically, BIS proposes the following changes: (1) revising § 744.21 (Restrictions on certain `military end uses' or `military end users'); (2) moving § 744.22 (Restrictions on exports, reexports, and transfers (in-country) to certain military-intelligence end uses or end users) to § 744.24 and renaming it as (Restrictions on certain intelligence end users); and (3) adding a new § 744.22 (Restrictions on certain military-support end users). For some of these controls, BIS proposes new end use and/or end user definitions and new item and country scopes. Each control is described more fully in the preamble below, in order of appearan ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 98k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━