BIS Publishes Changes To Export Control List To Conform to Wassenaar Arrangement

On December 10, 2003, The Bureau of Industry and Security (BIS) published (68 F.R. 68976) revisions to certain Commerce Control List (CCL) entries controlled for national security reasons in Categories 1, 2, 3, 4, 5 Part I (telecommunications), 5 Part II (information security), 6, and 7. The purpose of the revisions is to conform the CCL to changes in the List of Dual-Use Goods and Technologies maintained by the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (Wassenaar Arrangement). In addition, BIS:

Made revisions to the export reporting requirements found in section 743, EAR, for shipments under license exceptions BGS, CIV, TSR, LVS, CTP and GOV;
Amended License Exception GOV restrictions;
Added a statement regarding the treatment of medical equipment under EAR 99 that contain controlled components.

A summary of changes for Categories 3, 5 Part I (telecommunications), 5 Part II (information security), and the treatment of medical equipment follows below. More information on all of the December 10^th changes can be found on our website at www.tuttlelaw.com, and clicking the button “What’s New” on the tool bar.

Sun Microsystems And Others Agree
Charges of Unlicensed Exports and Failure
to Comply with Export Licenses

In related export news, The U.S. Department of Commerce announced December 15, 2003 that Sun Microsystems, Inc. of Santa Clara, California, and two of its subsidiaries will pay $291,000 in fines to settle charges of illegal exports of computers to military end-users in China and Egypt, and for failing to comply with conditions on eight Bureau of Industry and Security (BIS) export licenses.

BIS also announced fines against TLC Precision Wafer Technology of Minneapolis, Minnesota and ABO (USA) Inc. of Miami, Florida. TLC Precision Wafer Technology agreed to pay $35,000 to settle charges that it illegally exported five shipments of epitaxial wafers and oscillator chips to Israel and Brazil without the required export licenses, and failed to file the necessary SEDs for the transactions.

ABO (USA) Inc. of Miami, Florida agreed to a suspended civil fine of $20,000 and the denial of export privileges for two years to settle charges that it violated the EAR by exporting night vision scopes to Japan without the required U.S. Government authorization.

Summary of December 10^th changes for Categories 3, 5 Part I
(telecommunications), 5 Part II (information security) Of The CCL

A summary of December 10^th changes for Categories 3, 5 Part I (telecommunications), 5 Part II (information security) of the CCL are as follows:

Category 3 - Electronics

. ECCN 3A001 is amended by:

a) Adding a new paragraph 3A001.a.1.c that adds a new parameter for integrated circuits, designed or rated as radiation hardened, and adding a note for this paragraph.

b) Revising the parameters of 3A001.a.5.a.2 and 3A001.a.5.a.3 for analog-to-digital and digital-to-analog converter integrated circuits; and

c) Adding a new paragraph 3A001.a.5.a.4 to add a new parameter for analog-to-digital converter integrated circuits.

Note: For commodities no longer controlled under ECCN 3A001, there is a license requirement under ECCN 3A991 for exports and reexports to AT Column 1 countries of the Commerce Country Chart.

. ECCN 3A002 is amended by:

a) Adding a new abbreviation ETSI to the note for 3A002.a.2;

b) Adding a new paragraph 3A002.a.6 for digital instrumentation data recorders; and

c) Revising the parameters for 3A002.c.1, d.1, e, and f.1.

Note: For commodities no longer controlled under ECCN 3A002, there is a license requirement under ECCN 3A992 for exports and reexports to AT Column 1 countries of the Commerce Country Chart.

. ECCN 3A991 is amended by:

a) Revising the parameter for batteries in the note for 3A991.j from 26 cm³ to 27 cm³for consistency with the note in 3A001.e.1; and

b) Revising the parameters and reformatting 3A991.c for analog-to-digital converter integrated circuits, to continue controls for antiterrorism (AT) reasons for these commodities that were liberalized as a result of changes to the Wassenaar List of Dual-Use Goods and Technologies.

. ECCN 3B001 is amended by revising the parameter for 3B001.f.1.b for minimum resolvable feature size from 0.5 µm to 0.35 µm for "stored program controlled" lithography equipment.

Note: For commodities no longer controlled under ECCN 3B001, there is a license requirement under ECCN 3B991 for exports and reexports to AT Column 1 countries of the Commerce Country Chart.

. ECCNs 3E001 and 3E002 are amended by revising the parameter in
paragraph b.1 of the Note from 0.7 µm to 0.5 µm.

Category 4 - Computers

. ECCN 4A003 is amended by:

a) Revising the “composite theoretical performance” (CTP) parameter in 4A003.b from 28,000 millions of theoretical operations per seconds (MTOPS) to 190,000 MTOPS;

b) Making conforming changes of the revised CTP parameter to the AT and XP controls and the Note in the License Requirements section; and

c) Removing the phrase “or digital-to-analog” in the CTP paragraph of the License Exception section, because 4A003.e and 3A001.a.5.a only refer to analog-to-digital.

Note: For commodities no longer controlled under ECCN 4A003, there is a license requirement under ECCN 4A994 for exports and reexports to AT Column 1 countries of the Commerce Country Chart.

. ECCN 4D001 is amended by:

a) Making conforming changes of the revised CTP parameter in 4A003.b to the XP control in the License Requirements section;

b) Making the existing heading paragraph (a) in the items paragraph of the List of Items Controlled section; and

c) Adding a new paragraph for other “software”.

. ECCN 4D994 is amended by revising the heading to prevent an
overlap of controls between 4D001 and 4D994.

. ECCN 4E001 is amended by:

a) Making conforming changes of the revised CTP parameter in 4A003.b to the XP control in the License Requirements section;

b) Making the existing heading paragraph (a) in the items paragraph of the List of Items Controlled section; and

c) Adding a new paragraph for other “technology”.

. ECCN 4E992 is amended by revising the heading to prevent an
overlap of controls between 4E001 and 4E992.

Category 5 - Part I - Telecommunications

. ECCN 5A001 is amended by:

a) Adding new text regarding frequency range and output power in 5A001.b.2.b.2;

b) Adding “output” after “voice coding” in 5A001.b.6; and

c) Adding a new technical note after 5A001.b.6.

. ECCN 5A991 is amended by correcting the numbering of the
paragraphs in 5A991.b.6.

. ECCN 5B001 is amended by:

a) Revising the parameter for radio equipment employing quadrature-amplitude-modulation (QAM) techniques from “above level 128” to “above level 256” in 5B001.b.4; and

b) Revising text regarding equipment employing “common channel signaling” in 5B001.b.5.

NOTE: For commodities no longer controlled under ECCN 5B001, there is a license requirement under ECCN 5B991 for exports and reexports to AT Column 1 countries of the Commerce Country Chart.

. ECCN 5D001 is amended by:

a) Correcting a paragraph citation in the CIV and TSR eligibility paragraphs of the License Exceptions section from “5A001.b.4”to read “5A001.b.5”; and

b) Revising the parameter for radio equipment employing quadrature-amplitude-modulation (QAM) techniques from “above level 128” to “above level 256” in 5D001.d.4.

Note: For commodities no longer controlled under ECCN 5D001, there is a license requirement under ECCN 5D991 for exports and reexports to AT Column 1 countries of the Commerce Country Chart.

. ECCN 5E001 is amended by:

a) Revising the parameter for radio equipment employing quadrature-amplitude-modulation (QAM) techniques from “above level 128” to “above level 256” in 5E001.c.4.a; and

b) Revising text regarding equipment employing “common channel signaling” in 5E001.c.5.

Note: For commodities no longer controlled under ECCN 5E001, there is a license requirement under ECCN 5E991 for exports and reexports to AT Column 1 countries of the Commerce Country Chart.

Category 5 - Part II - Information Security

. ECCN 5A002 is amended by:

a) Moving and rearranging the text that describes what is not controlled in this entry from the Related Controls paragraph of the List of Items Controlled section to a Note in the beginning of the Item paragraph of the List of Items Controlled section;

b) Dividing the existing text in paragraph (a) of the note (regarding “personalized smart cards”) into sub-paragraph 1 and a N.B.; and

c) Moving the related control note in paragraph 2 of the Related Definitions paragraph of the List of Items Controlled section to a N.B. following 5A002.a.

New Supplement No. 3 to part 774
Statement of Understanding

Treatment of Medical Equipment Containing
Controlled Components

The rule also adds a new Supplement No. 3, Statements of Understanding, to part 774.

The first understanding to be placed in this supplement is a Wassenaar Arrangement statement concerning the treatment of medical equipment. It states that commodities that are ‘specially designed for medical end-use’ and ‘incorporate’ commodities or software on the Commerce Control List in Supplement No. 1 to part 774 of the EAR that are not controlled for Nuclear Nonproliferation (NP), Missile Technology (MT), or Chemical & Biological Weapons (CB) reasons are classified as EAR99. This understanding has been a longstanding agreement in the Wassenaar Arrangement and does not represent a policy or interpretation change under the EAR, as BIS has implemented this understanding into decisions on classification requests and license applications.

BIS is also providing guidance in notes to the medical statement of understanding to assist the public in determining what is considered ‘specially designed for medical end-use’ and what ‘incorporate’ means. The guidance provided for these terms only applies to the newly added Statement of Understanding for medical equipment.

Please contact us at info@tuttlelaw.com or geo@tuttlelaw.com if you would like additional information about how the new Wassenaar CCL changes may effect the control status of the products you export.

George R. Tuttle, III, is an attorney with the Law Offices of George R. Tuttle in San Francisco, with a practice that focuses on U.S. import and export regulation. The information in this article is general in nature and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered such.

All rights reserved. Information has been obtained from sources believed to be reliable. However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.

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