State and BIS Propose Rules to Revise USML Cat XX & CCL, "Tiering" on Hold, Etc.

Written comments on both proposed rules are due by February 6, 2012.

State Dept Proposed Rule

Proposed Rules Do Not Reflect Tiering

In December 2010 advanced notices of proposed rulemaking, the State Department and BIS described the Administration’s plan to make the U.S. Munitions List and the Commodity Control List positive, tiered, and aligned so that eventually they can be combined into a single control list. While these remain the Administration’s ultimate Export Control Reform objectives, their concurrent implementation would be problematic in the near term. As a result, the Administration has decided, as an interim step, to propose and implement revisions to both the USML and the CCL that are more positive, but not yet tiered.

(See ITT's Online Archives 10121021 and 10120921 for summary of State and BIS ANPRs, respectively, on the Administration's plan to make the USML and CCL positive, tiered, and aligned, and to establish a "bright line" between the two.)

Proposed Revision of USML Category XX

The State Department's proposed rule would revise USML Category XX, covering submersible vessels and related articles, as follows:

Submarines and other submersibles. The proposed revision would account for the movement of submarines from USML Category VI and consolidate the controls that would apply to all submersible vessels in a single category.

Nuclear power plants for subs. In addition, naval nuclear propulsion power plants for submersible vessels controlled under USML Category XX (and formerly controlled under USML Category VI(e)), would now be controlled under Category XX(b).

Definition of submersibles. This proposed rule would also create 22 CFR 121.14 to more clearly define ‘‘submersible vessels and related articles."

Nuclear related controls. Finally, this proposed revision would make conforming edits to 22 CFR 123.20, 124.2, and 125.1 (nuclear related controls).

Parts control limited to "Specifically Designed". This proposed rule would control only those parts, components, accessories, and attachments that are specifically designed for a defense article controlled in this category. All other parts, components, accessories, and attachments would become subject to the new 600 series controls in Category 8 of the CCL to be published separately by BIS.

Proposed Definition for "Specially Designed"

For the purposes of this proposed rule, the draft definition for “specially designed” in the State Department's December 2010 ANPR should be used. The draft definition provided at that time is as follows: “For the purposes of this Subchapter, the term “specially designed” means that the end-item, equipment, accessory, attachment, system, component, or part (see ITAR 121.8) has properties that (i) distinguish it for certain predetermined purposes, (ii) are directly related to the functioning of a defense article, and (iii) are used exclusively or predominantly in or with a defense article identified on the USML.”

(BIS subsequently published on July 15, 2011, for public comment, the Administration’s proposed definition of “specially designed” that would be common to the CCL and the USML. The public provided more than 40 comments on that proposed definition on or before the September 13 deadline for comments. The Departments of State, Commerce, and Defense are now reviewing those comments and related issues, and the Departments of State and Commerce plan to publish for public comment another proposed rule on a definition of “specially designed” that would be common to the USML and the CCL. See ITT's Online Archives 11071519 for summary of the July 2011 BIS proposed rule for new definitions for "specially designed" end items, parts, etc.; the proposed rule also covers an EAR control structure to transfer less significant items from the USML to the CCL, the transfer of an initial traunche of items from USML Category VII to the CCL, etc.)

BIS Proposed Rule

Proposed Revisions to CCL

BIS' proposed rule describes how submersible vessels, oceanographic equipment and related articles that the President determines no longer warrant control under USML Category VI (Vessels of War and Special Naval Equipment) or Category XX (Submersible Vessels, Oceanographic Equipment and Associated Equipment) would be controlled on the CCL, as follows:

Four new 600 series ECCNs. The BIS proposed rule would create four new "600 series" Export Control Classification Numbers (8A620, 8B620, 8D620, and 8E620) for the CCL that the President determines no longer warrant control under USML Category VI or Category XX.

Rebreathing equipment. In addition, this proposed rule would control closed and semi-closed circuit (rebreathing) apparatus, engines and propulsion systems for submersible vessels, and submarine and torpedo nets, which are currently controlled under ECCN 8A018, under new proposed ECCN 8A620.

"Specially designed" for cargo transport. With this proposed rule, BIS would also establish a new, unilateral control on submersibles ‘‘specially designed’’ for cargo transport that are not currently subject to USML or CCL controls.

State proposed rule (Public Notice 7737, FR Pub 12/23/11) available here. BIS proposed rule (D/N 110928603--1605--02, FR Pub 12/23/11) available here.