Commerce Control List Additions and Revisions; Implementation of Controls on Advanced Technologies Consistent With Controls Implemented by International Partners

<RULE> DEPARTMENT OF COMMERCE <SUBAGY>Bureau of Industry and Security</SUBAGY> <CFR>15 CFR Parts 736, 738, 740, 742, 743, 772, and 774</CFR> <DEPDOC>[Docket No. 240813-0217]</DEPDOC> <RIN>RIN 0694-AJ60</RIN> <SUBJECT>Commerce Control List Additions and Revisions; Implementation of Controls on Advanced Technologies Consistent With Controls Implemented by International Partners</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Bureau of Industry and Security, Department of Commerce. <HD SOURCE="HED">ACTION:</HD> Interim final rule; request for comments. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Bureau of Industry and Security (BIS) is implementing export controls on several semiconductor, quantum, and additive manufacturing items for national security and foreign policy reasons. This rule adds new Export Control Classification Numbers (ECCNs) to the Commerce Control List, revises existing ECCNs, adds a new license exception to authorize exports and reexports to and by countries that have implemented equivalent technical controls for these newly added items, and adds two new worldwide license requirements to the national security and regional stability controls in the Export Administration Regulations (EAR). These controls are the product of extensive discussions with international partners. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Effective date:</E> This rule is effective September 6, 2024. The incorporation by reference of certain publications listed in the rule is approved by the Director of the Federal Register as of September 6, 2024. <E T="03">Compliance dates:</E> Although this rule is effective on September 6, 2024, exporters, reexporters, and transferors of quantum items specified in ECCNs 3A901, 3A904, 3B904, 3C907, 3C908, 3C909, 3D901 (for 3A901.b, 3B904), 3E901 (for 3A901, 3A904, 3B904, 3C907, 3C908, 3C909), 4A906, 4D906, or 4E906 to destinations specified in Country Group A:1 in supplement no. 1 to part 740 are not required to comply with the license requirements in § 742.4(a)(5)(i) or § 742.6(a)(10)(i) of the EAR until November 5, 2024. If no compliance date is provided, then parties must comply with the requirements set forth in this rule as of the effective date of this rule. <E T="03">Comment due date:</E> Comments on revisions and additions in this rule, as well as comments responding to the possibility of a different licensing policy or procedures for quantum deemed exports and reexports, must be received by BIS no later than November 5, 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-2024-0020. Please refer to RIN 0694-AJ60 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> <E T="03">For general questions contact:</E> Sharron Cook at 202-482-2440 or <E T="03">RPD2@bis.doc.gov.</E> <E T="03">For technical questions contact:</E> <E T="03">Category 2:</E> Sean Ghannadian at 202-482-3429 or <E T="03">Sean.Ghannadian@bis.doc.gov.</E> <E T="03">Category 3:</E> Carlos Monroy at 202-482-3246 or <E T="03">Carlos.Monroy@bis.doc.gov.</E> <E T="03">Category 4:</E> Aaron Amundson at 202-482-0707 or <E T="03">Aaron.Amundson@bis.doc.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> In remarks made on February 4, 2021, regarding America's place in the world, President Biden noted that America's alliances are some of our greatest assets and that leading with diplomacy means standing shoulder to shoulder and working closely with our allies and key partners, thereby protecting the world against those who do not share our values. This is especially true in export controls, as controls adopted by supplier countries, working together, are typically the most effective path to protect our national security and advance our foreign policy objectives. This is reflected in the Statement of Policy in the Export Control Reform Act of 2018 (ECRA): export controls that are multilateral are the most effective (50 U.S.C. 4811(5)). BIS seeks to achieve these objectives by harmonizing controls with like-minded countries. Accordingly, the United States is implementing new controls, including a limited number of deemed export requirements in the sectors of quantum computers, materials, and related electronic assemblies; aerospace technology; and integrated circuit “development” or “production.” With this rule, BIS imposes controls on items in these categories that warrant export controls because of national security concerns. Given the national security basis for these controls, BIS is implementing them immediately through an interim final rule. These controls are consistent with controls implemented by several international partners. While not currently controlled by the relevant multilateral regime, pursuant to ECRA Section 1758(c)(1), the United States shall pursue addition of these technologies to the list of items controlled by the relevant multilateral export control regime. To identify items for which controls are harmonized with the Implemented Export Controls (IEC) of international partners, and to distinguish between such items and those items controlled through multilateral regimes, BIS is establishing a new framework in the EAR. • IEC items will be identified in the 900 series of the CCL, <E T="03">i.e.,</E> in Export Control Classification Numbers (ECCNs) for which the third digit is a 9 and the fourth digit is a number from 0 to 7 ( <E T="03">e.g.,</E> 3A901). Such items have worldwide license requirements and more limited license exception availability as compared to the ECCNs implementing multilateral regime controls. • License Exception IEC will authorize exports and reexports to specified destinations whose governments have implemented equivalent controls on the same items as the United States. • Finally, this rule amends certain existing ECCNs where the proposal applied to an existing ECCN and it would have been more confusing to the public to create a separate ECCN, <E T="03">e.g.,</E> ECCN 3B001. For these items, rather than establish new ECCNs, BIS is revising the item's current ECCN, even if such entry was initially adopted as a multilateral ECCN. BIS encourages the public to comment on: (1) this framework for IEC, especially as it may impact supply chains and compliance programs; (2), the scope and clarity of the new ECCNs; and (3) the scope of the license exceptions. BIS also seeks public comment on the deemed export requirements in this rule and the potential impacts that a deemed export control would have if it was applied to the quantum items and the General License in General Order no. 6 in paragraph (f)(3) in supplement no. 1 to part 736 were removed in this rule or at a future date. Specific illustrative questions are included below in section II.G.vii. <HD SOURCE="HD1">II. Details of Revisions to the EAR</HD> <HD SOURCE="HD2">A. Supplement No. 1 to Part 736—General Order No. 6—General License</HD> BIS adds General Order No. 6 to implement three authorizations in paragraph (f) of supplement no. 1 to part 736 of the EAR. A GAAFET General License (GL) is implemented in paragraphs (f)(1) and (f)(2) to support the U.S. technology leadership through ongoing collaboration with established partners in allied countries, <E T="03">i.e.,</E> when that “development” or “production” began to be performed on or prior to September 6, 2024. In paragraph (f)(1), this GL authorizes exports, reexports, and transfers (in-country) to certain end users in destinations specified in Country Groups A:5 and A:6 in supplement no. 1 to part 740 of the EAR. The GL does not authorize deemed exports and reexports, because deemed exports and reexports to these countries are excluded from NS and RS controls under §§ 742.4(a)(5) and 742.6(a)(10) of the EAR. In paragraph (f)(2), the GL does, however, authorize deemed exports or deemed reexports of “technology” specified in ECCN 3E905 (including for future advancements or versions of the same “technology”) to foreign person employees or contractors already employed by entities as of September 6, 2024 whose most recent country of citizenship or permanent residency is a destination specified in Country Group D:1 or D: ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 257k characters. 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