Notices of Inquiry (NOIs) : US Munitions List Category XII and Commerce Control List SPIE Photonics West February 2017
Panelists Chris Costanzo Mark Jaso Steve Emme Deputy Director Senior Engineer and Senior Counsel Department of Export Licensing Akin Gump Strauss Commerce Officer Hauer & Feld Office of National Sensors and Aviation Security and Division of the Technology Transfer Bureau of Industry Controls and Security (BIS) Sensors and Aviation Division Jennifer Douris Moderator: Government Affairs Director SPIE, the international society for optics and photonics 2
US Munitions List (USML) Category XII: Final Rule 2/1/17 3
USML Category XII • High-level changes Use of “specially designed” for many entries rather than specific parameters or performance capability Introduction of “specially designed for a military end user” for certain entries Movement of most parts and components within Cat XII to XII(e) Removal of text carving out see-through rule from XII(c) and XII(e) Increased clarity that technology and software jurisdiction follow the commodity 2/1/17 4
“Specially Designed for a Military End User” • Seven entries in USML Category XII use the language, “specially designed for a military end user” Applies only to XII(b)(6), (c)(1)(iii), (c)(3), (c)(4)(ii), (c)(5), (c)(6)(viii)(b), and (c)(7)(ii) Application of this control text differs from the normal use of specially designed (i.e., specially designed for a defense article) • The Note to Cat XII describes how to apply this standard Apply paragraph (a)(1) of “specially designed” for the catch and the definition of “military end user” in the Note to Cat XII Only available releases: 1) The item was developed for use by both military and non-military end users 2) The item was developed for no specific end user Contemporaneous documentation of design intent is required for those releases If an item originally developed for a military end user has transitioned to normal commercial use, then one may submit a CJ request to determine if the item should remain on the USML 2/1/17 5
Definition of “Specially Designed” ITAR paragraph (a) catches (a)(1) Catches any item that, as a result of “development,” has properties peculiarly responsible for achieving or exceeding the performance levels, characteristics, or functions in the relevant USML paragraph (a)(2) Catches any part, component, accessory, or attachment that is for use in or with a defense article 2/1/17 6
Definition of “Specially Designed” ITAR paragraph (b) releases Initial questions for releases of parts, Relevant paragraph (b) release components, accessories, or attachments Was it identified in a Commodity Jurisdiction (CJ) If yes, see (b)(1) determination as being subject to the EAR? Note: Also will need to review the CJ in question. Is it a fastener ( e.g. , screw, bolt, nut, nut plate, stud, If yes, see (b)(2) insert, clip, rivet, pin), washer, spacer, insulator, grommet, bushing, spring, wire, or solder? Is it being used in or with an item in “production” that If yes, see (b)(3) is not on the USML (i.e., a commercial or dual-use item)? Was or is it being developed for use in or with items on If yes, see (b)(4). the USML and for items not on the USML? Note: Requires documentation from development. Is it a general purpose commodity or software If yes, see (b)(5) (meaning not for particular commodity or type of Note: Requires documentation from development. commodity)? 2/1/17 7
USML Category XII • Entries for developmental items funded by DoD XII(b)(7): developmental lasers or laser systems XII(c)(10): developmental electro-optical, infrared, or terahertz systems XII(d)(6): developmental guidance or navigation systems XII(e)(24): developmental IITs, FPAs, ROICs, accelerometers, gyroscopes, angular rate sensors, and IMUs • Developmental entries do not control: Items in production; Items determined to be subject to the EAR via a CJ; or Items identified in the relevant DoD contract or other funding authorization as being developed for both civil and military applications • Developmental entries do not apply to contracts dated before October 12, 2017 2/1/17 8
Commerce Control List (CCL) Category 6: Final Rule 2/1/17 9
CCL Category 6 Changes Dual-Use Commodities • 6A002: Optical sensors, etc. Removal of STA and APR (paragraphs (a) and (b)) eligibility for all items in 6A002 Added to 0A919 and § 744.9 • 6A003: Cameras All items in ECCN ineligible for APR paragraph (a); certain items ineligible for APR paragraph (b) All items in ECCN added to 0A919 and § 744.9 No changes to Reasons for Control or authorizations in § 742.6 • 6A990: Read-Out Integrated Circuits (ROICs) Scope of ECCN expanded to ROICs specially designed for 6A002.a.3 FPAs, but new civil automotive carve out added (same changes apply to related software and technology) Removal of STA and APR (paragraphs (a) and (b)) eligibility, but inclusion of LVS eligibility ($500) Added to 0A919 and § 744.9 • 6A993.a: 9 Hz cameras Added to 0A919 and § 744.9 2/1/17 10
CCL Category 6 Changes Dual-Use Software and Technology • Expanded scope of controls on software and technology related to infrared detection Modified 6D991: “Software,” n.e.s., “specially designed” for the “development,” “production,” or “use” of 6A002, 6A003, 6A990, 6A991, 6A996, 6A997, or 6A998. Created 0E987: “Technology” “required” for the “development,” or “production” of commodities controlled by 0A987 items that incorporate a focal plane array or image intensifier tube. 2/1/17 11
Additional Dual-Use Changes • License applications will be reviewed with a presumption of denial when destined to Country Group D:5 for the following dual-use technology: 6E001 or 6E002 technology for the development or production of FPAs or IITs described in 6A002 6E990 technology for the development or production of ROICs described in 6A990 • Specific controls related to certain QRS-11 sensors removed 2/1/17 12
Notices of Inquiry: Category XII US Munitions List (USML) and Commerce Companion Proposals 2/1/17 13
Submitting Public Comments • Don’t rely on someone else to submit comments if the proposals affect your organization • Structure comments so that the agencies can follow which proposals are being addressed • Support assertions with evidence, if possible If citing foreign availability of products, provide names of companies and products If citing competitive disadvantage, provide estimate on the financial impact or cite trends • Address the proposals you support and the proposals you do not support 14
Notice of Inquiry: Commerce Companion Proposals 2/1/17 15
Section 734.4 “De Minimis U.S. Content” for 0A919 Foreign Military Commodities • As of December 31, 2016. Consistent with the February 19, 2016 proposed rule, the October 12 final rule broadened the scope of ECCN 0A919 to include incorporated infrared detection items in ECCNs 6A002, 6A003, 6A990, or 6A993.a (having a maximum frame rate equal to or less than 9 Hz and thus meeting the criterion of Note 3.a to 6A003.b.4) and limited the destinations subject to the no de minimis provision to Group D:5 countries.
Section 734.4 “De Minimis U.S. Content” for 0A919 Foreign Military Commodities • Potential Revision. Expand the destinations subject to the no de minimis provision to “any destination, except Canada,” for non- U.S. military commodities (0A919) to those that incorporate any of the following: (1) Image intensifier tubes having a figure of merit (FOM) exceeding 1,400 lp/mm (line pairs per millimeter); (2) an infrared focal plane array (FPA) with format exceeding 75,000 detector elements, or (3) related infrared focal plane array read-out integrated circuit having more than 75,000 unit cells. FOM would be defined as the product of the tube's signal to noise ratio (SNR) and limiting resolution (FOM = SNR (unitless) × Limiting Resolution (lp/mm) and is a term of art regularly associated with exports of image intensifier tubes and related devices subject to the ITAR.
Strategy on Possible Comments • Is this a workable de minimis provision, or is it too complex? • Should 0A919 items incorporating infrared detection content previously described warrant stricter treatment than 0A919 items incorporating purely military content subject to the EAR (600 series items)? 18
Section 740.20, License Exception Strategic Trade Authorization (STA) for Certain Night Vision Equipment To Be Embedded • As of December 31, 2016. Consistent with the February 19, 2016 proposed rule, the October 12 final rule expanded that restriction to include all items in the following ECCNs: 0E987; 6A002; 6A990; 6D002 (for the use of commodities controlled under ECCN 6A002.b); 6D003.c; 6D991 (for the development, production, or use of commodities controlled under ECCNs 6A002, 6A003, or 6A990); 6E001 (for the development of commodities controlled under ECCNs 6A002 or 6A003); 6E002 (for the production of commodities controlled under ECCNs 6A002 or 6A003); and 6E990.
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