AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Final rule.

SUMMARY:

In this final rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding a new `Military End User' (MEU) List that includes the first tranche of entities. The U.S. Government has determined that these entities are `military end users' for purposes of the `military end user' control in the EAR that applies to specified items for exports, reexports, or transfers (in-country) to the People's Republic of China (China), Russia, and Venezuela when such items are destined for a `military end user.' The existing `military end-use' and `military end user' controls under the EAR, including BIS's authority to inform the public of a license requirement for an item due to an unacceptable risk of diversion to a `military end user' via amendment to the EAR, are essential for protecting U.S. national security interests. The addition of the new MEU List via amendment to the EAR and this first tranche of entities is also responsive to requests received from the public. This final rule will add one hundred and two `military end users' to the MEU List consisting of fifty-seven under China and forty-five under Russia. However, the establishment of the MEU List does not imply that other parties, not included on the list, are not subject to the `military end-use' and `military end user' controls under the EAR.

DATES:

This rule is effective December 23, 2020.

FOR FURTHER INFORMATION CONTACT:

Eileen Albanese, Director, Office of National Security and Technology Transfer Controls, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-0092 or Email: eileen.albanese@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding the new `military end user' list as supplement no. 7 to part 744—Military End User (MEU) List. This final rule also adds the first tranche of entities to this new list. This final rule will add one hundred and two `military end users' to the MEU List consisting of fifty-seven military end users in China and forty-five in Russia. These entities have been determined by the U.S. Government to be `military end users,' and therefore exports, reexports, or transfers (in-country) of the designated items to these parties are exports, reexports or transfers (in-country) to the national armed services (army, navy, marine, air force, or coast guard), the national guard, the national police, government intelligence or reconnaissance organizations, or a person or entity whose actions or functions are intended to support `military end-uses' as defined in § 744.21(f).

Section 744.21(a) sets forth a license requirement to exports, reexports, or transfers (in-country) identified in supplement no. 2 to part 744 to China, Russia, and Venezuela, when the exporter, reexporter, or transferor has “knowledge” that the item is destined for a `military end use' (as defined in § 744.21(f)) or `military end user' (as defined in § 744.21(g)). Additionally, pursuant to § 744.21(b), BIS may inform persons that a license is required for the export, reexport, or transfer (in-country) of any item because there is an unacceptable risk of use in or diversion to such an end use or end user. With the creation of the MEU List described below, BIS `is informing' exporters, reexporters, and transferors that a license will be required to export, reexport, or transfer (in-country) any item described in supplement no. 2 to part 744 to these `military end users' that will be identified on the new MEU List.

This rule does not change the scope of § 744.21. The addition of the new MEU List in supplement no. 7 to part 744 and this initial tranche of one hundred and two `military end users' is part of the § 744.21(b) `is informed' process and does not imply that other parties, not included on the list, are not subject to the prohibition in § 744.21(a). Adding the new MEU List via an amendment to the EAR is an effective way for BIS to inform all potential exporters, reexporters, and transferors that all exports, reexports, or transfers (in-country) of designated items to these entities represent an unacceptable risk of use in or diversion to a `military end use' or a `military end user' for purposes of § 744.21, and therefore require a license. All of the one hundred and two entities added to the MEU List in today's final rule are `military end users' within the definition of § 744.21(g), and were thus already subject to the `military end use' and `military end user' requirements under § 744.21. Prior to this final rule, exporters, reexporters, or transferors were responsible for identifying these entities as `military end users' themselves, assuming they were not otherwise individually informed pursuant to the `is informed' process under § 744.21(b). Exporters, reexporters, or transferors will still be responsible for ensuring their transactions are in compliance with the license requirements set forth in § 744.21 because BIS cannot list every `military end user' or party representing a risk of diversion thereto in the MEU List, or identify all situations which could lead to an item being used for a `military end use.' The determinations that certain entities are `military end users' are only relevant to the stated EAR controls and do not apply to exports, reexports, or transfers subject to International Traffic in Arms Regulations (ITAR) or other controls.

The addition of the new MEU list and this first tranche of one hundred and two entities is also responsive to requests received from the public and draws upon decisions made by BIS in reviewing license applications under § 744.21. Specifically, exporters, reexporters, or transferors requested in numerous advisory opinions received by BIS on the application of § 744.21 since April 28, 2020, as well as from BIS's TACs, that BIS identify `military end users' by name and address in the regulations, where possible, to facilitate compliance. For example, BIS has received over 80 advisory opinions and emailed requests for guidance on the April 28 MEU rule, including requests asking whether 34 specific entities are considered `military end users' for purposes of § 744.21. In addition, since the revisions to the MEU provisions became effective on June 29, 2020 (the date the April 28, 2020 final rule (85 FR 23459) that expanded the `military end-use' and `military end-user' control under § 744.21), there have been several hundred license applications filed under § 744.21 (MEU license applications).

BIS interacts with various exporters, reexporters, or transferors who may provide information on potential `military end users' in license applications or requests for advisory opinions submitted to BIS, as well as the additional information resources available to the U.S. Government; therefore, as specified in § 744.21(b), when BIS identifies an entity as a `military end user,' it may use the `is informed' process to publish Federal Register notices adding these `military end users' to the new MEU List under supplement no. 7 to part 744. BIS agrees that identifying `military end users' on the MEU List, where possible, will ease the public's compliance burden and make for a more effective `military end use' and `end user' control under § 744.21.

The issuance of a separate public list in the EAR identifying parties previously listed in `is informed' letters or for whom licenses were denied due to their status as a `military end user' under the EAR is desirable because individual `is informed' letters, licensing determinations for specific transactions, and BIS responses to advisory opinion and email requests are private and confidential to the requester. Publishing a list of parties that already have been determined to be `military end-users' allows the public to be informed of BIS's determinations in these individual cases. Therefore, the most practical and effective approach is to publish a Federal Register notice adding these `military end users' to the MEU List, so all potential exporters, reexporters, or transferors are informed simultaneously.

As described below, BIS is also amending the EAR to provide clarity on the process it follows to add entities to the MEU List, to ensure consistent treatment of those parties, and to allow listed parties to request removal from the list. The initial list of `military end users' being added to the MEU List in today's rule is not exhaustive, and exporters, reexporters, and transferors must still conduct due diligence for parties not on the list (see § 744.21(b) and supplement no. 3 to part 732—BIS's “Know Your Customer” Guidance and Red Flags). As a result, compliance remains the obligation of the exporter, reexporter or transferor. Exclusion from the MEU list is not indicative of whether or not a license is required. For example, parties not listed on the MEU List in this final rule, but included on the lists made public pursuant to Section 1237 of the National Defense Authorization Act of Fiscal Year 1999, 50 U.S.C. 1701 note, would raise a Red Flag under the EAR and would require additional due diligence by the exporter, reexporter, or transferor to determine whether a license is required under § 744.21. Additional parties may be added to or deleted from the MEU List pursuant to a determination made by the End-User Review Committee (ERC) as described below.

EAR Changes To Add MEU List

In § 744.21 (Restrictions on certain `military end use' or `military end user' in the People's Republic of China, Russia, or Venezuela), this final rule revises paragraph (b) (Additional prohibition on those informed by BIS) by adding a new paragraph (b)(1) (Military End-User' (MEU) List). Under new paragraph (b)(1), this final rule specifies that BIS may designate entities subject to the additional prohibition under paragraph (b) based on a determination by the ERC that the entity is a `military end user,' and thus inform the public that those entities are subject to the license requirements under paragraph (b). New paragraph (b)(1) specifies that these `military end users' will be added to the MEU List in supplement no. 7 to part 744 in Federal Register notices published by BIS. The introductory text of paragraph (b)(1) also reaffirms that the listing of entities in supplement no. 7 to part 744 is not an exhaustive listing of `military end users' or entities engaged in `military end uses' and specifies that exporters, reexporters, or transferors must still conduct their own due diligence for entities not identified on the MEU List to determine whether a license in necessary pursuant to the criteria set forth in § 744.21.

This final rule adds new paragraph (b)(1)(i) (End-User Review Committee), in § 744.21, to identify the member agencies of the End-User Review Committee (ERC) and to specify the role the ERC will play in determining what entities should be added to MEU List, as well as approving any modifications or removals that may be warranted to the MEU List after entities are added. This final rule clarifies in new paragraph (b)(1)(i) that decisions by the ERC for purposes of the MEU List will be made following the procedures identified in § 744.21 and in supplement no. 5 to part 744—Procedures for End-User Review Committee Entity List and `Military End-User' (MEU) List Decisions. The ERC is an existing interagency group that also makes determinations for the Entity List in supplement no. 4 to part 744 as described in § 744.16 and in supplement no. 5 to part 744. Because of the ERC's expertise in dealing with end users of concern, BIS determined it was warranted to expand the ERC's area of responsibility for parties of concern to also include determinations for the new MEU List.

This final rule adds new paragraph (b)(1)(ii) (License requirement), in § 744.21, to specify the license requirements that apply for entities listed in supplement no. 7 to part 744. This final rule specifies that a license is required to export, reexport, or transfer (in-country) any item listed in supplement no. 2 to part 744 to entities identified on the MEU List, which is in addition to the license requirement applicable to such items intended for any `military end user' or `military end use' in China, Russia, or Venezuela which are not on the MEU List, as described in § 744.21(a). BIS is exercising its authority under § 744.21(b) to inform exporters, reexporters, and transferors that entities on the MEU List are `military end users' for purposes of § 744.21, and thus exports, reexports, or transfers (in country) of the specified items to those entities require a license because they represent an unacceptable risk of use in or diversion to a `military end use' or `military end user' in China, Russia, or Venezuela. This final rule under paragraph (b)(1)(ii) also clarifies the scope of the license requirement in § 744.21(b), by specifying that it applies when an entity that is listed on the MEU List is a party to the transaction as described in § 748.5(c) through (f) of any item listed in supplement no. 2 to part 744.

This final rule specifies in the introductory text of supplement no. 7 to part 744 that no EAR license exceptions are available for exports, reexports, or transfers (in-country) to listed entities on the MEU List for items specified in supplement no. 2 to part 744, except license exceptions for items authorized under the provisions of License Exception GOV set forth in § 740.11(b)(2)(i) and (ii) as specified in § 744.21(c).

This final rule clarifies in the introductory text of supplement no. 7 to part 744 that license applications for entities listed on the MEU list will be subject to the license application procedure and license review standards specified in paragraphs (d) and (e) of § 744.21.

This final rule adds a new paragraph (b)(2) (Requests for removal from or modification for `Military End User' (MEU) List), in § 744.21, to specify the process and method for any entity listed on the MEU List to request that its listing be removed or modified. In the introductory text of new paragraph (b)(2), this final rule specifies that any listed MEU entity may submit a removal or modification request. The introductory text of paragraph (b)(2) specifies these requests must be submitted to the ERC at the address provided. If an entity listed on the MEU List wants to petition BIS for its removal or modification, the entity must address the criteria in § 744.21 of the EAR by addressing, as applicable, why the entity is not a `military end user' or involved in `military end-uses.'

This final rule adds a new paragraph (b)(2)(i) (Review), in § 744.21, to specify that the ERC will review such requests in accordance with the procedures set forth in supplement no. 5 to part 744, which is also consistent with the process for requesting removal or modification of Entity List entries.

The final rule adds a new paragraph (b)(2)(ii) (BIS action), in § 744.21, to specify how an entity that has submitted a removal or modification request will be notified in writing by the Deputy Assistant Secretary for Export Administration once the decision on the request is made. This paragraph (b)(2)(ii) also specifies that the BIS decision will be the final agency action on the request.

In § 756.2 (Appeal from an Administrative Action), as a conforming change for the addition of paragraph (b)(2) in § 744.21, this final rule adds that decisions on requests to remove or modify a MEU List entry to the list of administrative actions are not subject to part 756 appeals under paragraph (a)(3). Paragraph (a)(3) also specifies that requests for removals of modifications from the Entity List and Unverified List are not subject to part 756 appeals, so adding the MEU List to this paragraph will create consistent treatment under this section for these three EAR lists.

This final rule adds new supplement no. 7 to part 744—`Military End User' (MEU) List. As described in detail above, the MEU List identifies entities that have been determined by the ERC to be `military end users' pursuant to § 744.21 of the EAR. That section imposes additional license requirements on, and limits the availability of most license exceptions for, exports, reexports, and transfers (in-country) to listed entities on the MEU List, as specified in supplement no. 7 to part 744 and § 744.21. Entities will be listed on the new MEU List under the destinations of China, Russia, or Venezuela.

The license review policy for each listed entity is identified in the introductory text of supplement no. 7 to part 744 and in § 744.21(b) and (e). The new MEU List includes introductory text, which specifies the scope of the license requirements, limitations on the use of EAR license exceptions, and the license review policy that applies to the entities. These requirements are also reflected in § 744.21, but for ease of reference, this final rule also includes these in the introductory text of the supplement. The MEU List consists of three columns: Column 1 (Country) identifies the three countries where entities may be listed (China, Russia, Venezuela); column 2 (Entity) identifies the names and addresses of the entities; and column 3 (Federal Register citation) identifies the Federal Register citation for final rules that added or modified entities on the MEU List. Unlike the Entity List, the license requirements and license review policy are the same for all MEU entities, so there is no need to include those columns in the MEU List. Instead, that information is specified in the introductory text of supplement no. 7 to part 744 and in § 744.21.

This final rule revises existing supplement no. 5 to part 744 (Procedures For End-User Review Committee Entity List Decisions), as a conforming change to add references to the new MEU List in supplement no. 7 to part 744. This final rule also makes other minor conforming changes to supplement no. 5 to part 744 to account for ERC decisions for additions, removals and modifications of MEU List entries, including revising the title of the supplement to reference the MEU List and clarifying the process for how the ERC reviews the Entity List for making modifications by removing a reference to annual reviews and simply stating the ERC reviews the Entity List and the MEU List regularly for identifying needed modifications. This final rule does not make any substantive changes to the ERC procedures, except for expanding the scope of ERC responsibility and procedures, so they also apply to additions, removals and modifications of MEU List entries.

Addition of First Tranche of `Military End Users'

As described above, the ERC, composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, the Treasury, makes all decisions regarding additions to, removals from, or other modifications to the MEU List in supplement no. 7 to part 744. The ERC make all decisions to add an entry to the MEU List by majority vote and all decisions to remove or modify an entry by unanimous vote.

Additions to the MEU List

Under § 744.21(b) of the EAR, BIS may inform persons either individually by specific notice, through amendment to the EAR published in the Federal Register, or through a separate notice published in the Federal Register, that a license is required for specific exports, reexports, or transfers (in-country) of any item because there is an unacceptable risk of use in or diversion to a `military end use' or `military end user' in China, Russia, or Venezuela. Under § 744.21(b)(1) of the EAR, BIS may designate entities subject to this additional prohibition under paragraph (b) that have been determined by the ERC to be a `military end user' pursuant to § 744.21. These entities will be added to supplement no. 7 to part 744 (`Military End User' (MEU) List) in Federal Register notices published by BIS.

This rule implements the decision of the ERC to add one hundred and two entities to the MEU List. These one hundred and two entities will be listed on the MEU List under the destinations of China and Russia, and a reserved category for Venezuela will also be added to the MEU List. The ERC made the decision to add each of the one hundred and two entities described below under the standard set forth in § 744.21 of the EAR, including the criteria for what constitutes a `military end user' under paragraph (g) and `military end use' under paragraph (f).

The ERC determined to add the fifty-seven entities identified below, under the destination of China, because the ERC has determined these entities are `military end users' based on the criteria in § 744.21(g) and (f).

The ERC determined to add the forty-five entities identified below, under the destination of Russia, because the ERC has determined these entities are `military end users' based on the criteria in § 744.21(g) and (f).

No license exceptions are available for exports, reexports, or transfers (in-country) to listed entities on the MEU List for items specified in supplement no. 2 to part 744, except license exceptions for items authorized under the provisions of License Exception GOV set forth in § 740.11(b)(2)(i) and (ii) of the EAR.

For the one hundred and two entities added to the MEU List by this rule, BIS imposes a license review policy of a presumption of denial as set forth in § 744.21(e).

The acronym “a.k.a.” (also known as) is used in entries on the MEU List to identify aliases, thereby assisting exporters, reexporters, and transferors in identifying entities on the MEU List.

For the reasons described above, this final rule adds the following one hundred and two entities to the MEU List:

China

• Academy of Aerospace Solid Propulsion Technology (AASPT);
• The following eight subordinate institutions of Aero-Engine Company of China: AECC Aero Science & Technology Co. Ltd.; AECC Aviation Power Co. Ltd.; AECC Beijing Institute of Aeronautical. Materials; AECC China Gas Turbine Establishment; AECC Commercial Aircraft Engine Co. Ltd.; AECC Harbin Dongan Engine Co., Ltd.; AECC Shenyang Liming Aero Engine Co., Ltd.; and AECC South Industry Company Limited;
• Anhui Yingliu Hangyuan Power;
• The following seven subordinate institutions of Aviation Industry Corporation of China:

AVIC Aircraft Co. Ltd.; AVIC Chengdu Aircraft Industrial (GROUP) Co., Ltd.; AVIC Flight Automatic Control Research Institute (FACRI); AVIC General Aircraft Huanan Industry Co. Ltd.; AVIC General Aircraft Zhejiang Institute Co., Ltd.; AVIC International Holding Corporation; AVIC Leihua Electronic Technology Research Institute (LETRI);

• Baimtec Material Co., Ltd.;
• Beijing Aero Lever Precision Ltd.;
• Beijing Ander Tech. Co., Ltd.;
• Beijing Guang Ming Electronics Co., Ltd.;
• Beijing Siyuan Electronic Co., Ltd.;
• CAST Xi'an Spaceflight Engine Factory;
• Chengdu Holy Aviation Science & Tech;
• China Aviation Ind. Std. Parts;
• CSSC Xijiang Shipbuilding Co., Ltd.;
• Elink Electronic Technology Co. Ltd.;
• Fly Raise International Limited;
• Fuhua Precision Man. Co.;
• Government Flying Service;
• Guangzhou Hangxin Aviation Technology Co., Ltd.;
• Guizhou Aviation Tech. Dev. Nat.;
• Guizhou Liyang Intl Manufacturing Co Ltd.;
• Hafei Aviation Industry Co., Ltd. (HAFEI);
• Hangzhou Bearing Test & Research Center Co., Ltd.;
• Harbin General Aircraft Industry Co., Ltd.;
• Henan Aerospace Precision Mach;
• Hunan South General Aviation Engine Co., Ltd.;
• Hutchison Optel Telecom Technology Co., Ltd.;
• Jiangsu Meilong Aviation Components Co.;
• Jiatai Aircraft Equipment Co., Ltd.;
• Jincheng Group Imp & Exp. Co. Ltd.;
• Laboratory of Toxicant Analysis, Institute of Pharmacology and Toxicology;
• Molecular Devices Shanghai Corporation;
• Nanjing Engineering Institute of Aircraft Systems (NEIAS);
• National Satellite Meteorological Bureau;
• Second Institute of Oceanography, Ministry of Natural Resources;
• Shaanxi Aero Electric Co., Ltd.;
• Shaanxi Aircaft Industry Co Ltd.;
• Shanghai Aerospace Equip. Man.;
• Shanghai Aircraft Design and Research Institute;
• Shanghai Aircraft Manufacturing Co. Ltd. (SAMC);
• Shanghai Tianlang Electronic Science Co., Ltd.;
• Shenyang Academy of Instrumentation Science Co., Ltd.;
• Shenyang Aircraft Corporation;
• Shenyang Xizi Aviation Industry Co., Ltd.;
• Sichuan Hangte Aviation Tech. Co., Ltd.;
• Star Tech Aviation Co., Ltd.;
• Sumec Instruments Equipment Co. Ltd.;
• Suzhou Eric Mechanics and Electronics Co. Ltd.;
• Wuxi Hyatech Co., Ltd.;
• Wuxi Paike New Mat. Tech. Co., Ltd.;
• Wuxi Turbine Blade Co. Ltd.;
• Xac Group Aviation Electronics Import & Export Co. Ltd.;
• XAIC Tech (Xi'an) Industrial Co., Ltd.;
• Xian Aero-Engine Controls Co., Ltd.;
• Xian Aircraft Industrial Company Limited;
• Xi'an Xae Flying Aviation Manufacturing Technology Co., Ltd.;
• Xian Xr Aero-Components Co. Ltd.;
• Yibin Sanjiang Machine Co., Ltd.; and
• Zhejiang Perfect New Material Co., Ltd.

Russia

• Admiralty Shipyard JSC;
• Aleksandrov Scientific Research Technological Institute NITI;
• Argut OOO;
• Communication center of the Ministry of Defense;
• Federal Research Center Boreskov Institute of Catalysis;
• Federal State Budgetary Enterprise of the Administration of the President of Russia;
• Federal State Budgetary Enterprise Special Flight Unit Rossiya of the Administration of the President of Russia;
• Federal State Unitary Enterprise Dukhov Automatics Research Institute (VNIIA);
• Foreign Intelligence Service (SVR);
• Forensic Center of Nizhniy Novgorod Region Main Directorate of the Ministry of Interior Affairs;
• Irkut Corporation;
• Irkut Research and Production Corporation Public Joint Stock Company;
• Joint Stock Company Scientific Research Institute of Computing Machinery;
• JSC Central Research Institute of Machine Building (JSC TsNIIMash);
• JSC Rocket and Space Centre—Progress;
• Kamensk-Uralsky Metallurgical Works J.S. Co.;
• Kazan Helicopter Plant PJSC;
• Komsomolsk-na-Amur Aviation Production Organization (KNAAPO);
• Korporatsiya Vsmpo Avisma OAO;
• Ministry of Defence RF;
• Molot Oruzhie;
• NPO High Precision Systems JSC;
• NPO Splav JSC;
• Oboronprom OJSC;
• PJSC Beriev Aircraft Company;
• PJSC Irkut Corporation;
• PJSC Kazan Helicopters;
• POLYUS Research Institute of M.F. Stelmakh Joint Stock Company;
• Promtech-Dubna, JSC;
• Public Joint Stock Company United Aircraft Corporation;
• Radiotechnical and Information Systems (RTI) Concern;
• Rapart Services LLC;
• Rosoboronexport OJSC (ROE);
• Rostec (Russian Technologies State Corporation);
• Rostekh—Azimuth;
• Russian Aircraft Corporation MiG;
• Russian Helicopters JSC;
• Sukhoi Aviation JSC;
• Sukhoi Civil Aircraft;
• Tactical Missiles Corporation JSC;
• Tupolev JSC;
• UEC-Saturn;
• United Aircraft Corporation;
• United Engine Corporation; and
• United Instrument Manufacturing Corporation.

Venezuela

This final rule adds and reserves a blank entry listing Venezuela in the Country column, but does not add any `military end users' to the MEU List under Venezuela at this time. This final rule clarifies here that for purposes of § 744.21, entities of the U.S.-recognized interim government of Venezuela are not considered `military end users' or engaged in `military end uses' for purposes of the EAR.

Savings Clause

Shipments of items removed from eligibility for a License Exception or export or reexport without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export or reexport, on December 23, 2020, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export or reexport without a license (NLR).

Export Control Reform Act of 2018

On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA)(codified, as amended, at 50 U.S.C. Sections 4801-4852). ECRA provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this rule.

Rulemaking Requirements

1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been determined to be not significant for purposes of Executive Order 12866. This rule is not an Executive Order 13771 regulatory action because this rule is not significant under Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves collections previously approved by OMB under control number 0694-0088, Simplified Network Application Processing System, which includes, among other things, license applications and carries a burden estimate of 42.5 minutes for a manual or electronic submission, and OMB control number 0694-0134, Entity List and Unverified List Requests. Total burden hours associated with the PRA and OMB control number 0694-0088 are not expected to increase as a result of this rule, but are expected to slightly increase under OMB control number 0694-0134 because of the estimated thirteen removal or modification requests for the MEU List that BIS may receive each year. Each removal or modification request is estimated to impose a burden of 15 hours, so 15 × 13 is estimated to result in a burden increase of 195 hours under OMB control number 0694-0134.

3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

4. Pursuant to section 1762 of the Export Control Reform Act of 2018 (50 U.S.C. 4801-4852), this action is exempt from the Administrative Procedure Act (5 U.S.C. 553) requirements for notice of proposed rulemaking, opportunity for public participation, and delay in effective date.

5. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., are not applicable. Accordingly, no regulatory flexibility analysis is required and none has been prepared.

List of Subjects

15 CFR Part 744

• Exports
• Reporting and recordkeeping requirements
• Terrorism

15 CFR Part 756

• Administrative practice and procedure
• Exports
• Penalties

Accordingly, part 744 of the Export Administration Regulations (15 CFR parts 730-774) is amended as follows:

PART 744—[AMENDED]

1. The authority citation for part 744 is revised to read as follows:

Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice of September 18, 2020, 85 FR 59641 (September 22, 2020); Notice of November 12, 2020, 85 FR 72897 (November 13, 2020).

2. Section 744.21 is amended by revising paragraph (b) to read as follows:

3. Supplement no. 5 to part 744 is revised to read as follows:

Supplement No. 5 to Part 744—Procedures for End-User Review Committee Entity List and `Military End User' (MEU) List Decisions

The End-User Review Committee (ERC), composed of representatives of the Departments of Commerce, State, Defense, Energy and, where appropriate, the Treasury, will make all decisions to make additions to, removals from or changes to the Entity List and the `Military End User' (MEU) List. The ERC will be chaired by the Department of Commerce and will make all decisions to add an entry to the Entity List and MEU List by majority vote and all decisions to remove or modify an entry by unanimous vote.

When determining to add an entity to the Entity List or MEU List or to modify an existing entry, the ERC will also specify the section or sections of the EAR that provide the basis for that determination. All additions and modifications to the MEU List are done pursuant to § 744.21(b). The license requirements, the license application review policy, or the availability of license exceptions for entities on the MEU List are specified in § 744.21 under paragraphs (b) to (e). In addition, for the Entity List if the section or sections that form the basis for an addition or modification do not specify the license requirements, the license application review policy, or the availability of license exceptions, the ERC will specify the license requirements, the license application review policy and which license exceptions (if any) will be available for shipments to that entity.

Any agency that participates in the ERC may make a proposal for an addition to, modification of, or removal of an entry from the Entity List or MEU List by submitting that proposal to the chairperson.

The ERC will vote on each proposal no later than 30 days after the chairperson first circulates it to all member agencies unless the ERC unanimously agrees to postpone the vote. If a member agency is not satisfied with the outcome of the vote of the ERC that agency may escalate the matter to the Advisory Committee on Export Policy (ACEP). A member agency that is not satisfied with the decision of the ACEP may escalate the matter to the Export Administration Review Board (EARB). An agency that is not satisfied with the decision of the EARB may escalate the matter to the President.

The composition of the ACEP and EARB as well as the procedures and time frames shall be the same as those specified in Executive Order 12981 as amended by Executive Orders 13020, 13026 and 13117 for license applications. If at any stage, a decision by majority vote is not obtained by the prescribed deadline the matter shall be raised to the next level.

A final decision by the ERC (or the ACEP or EARB or the President, as may be applicable in a particular case) to make an addition to, modification of, or removal of an entry from the Entity List or MEU List shall operate as clearance by all member agencies to publish the addition, modification or removal as an amendment to the Entity List or MEU List even if, in the case of a decision by the ERC to add an entry or any decision by the ACEP or EARB, such decision is not unanimous. Such amendments will not be further reviewed through the regular Export Administration Regulations interagency review process.

A proposal by the ERC to make any change to the EAR other than an addition to, modification of, or removal of an entry from the Entity List or MEU List shall operate as a recommendation and shall not be treated as interagency clearance of an EAR amendment. The chairperson of the ERC will be responsible for circulating to all member agencies proposals submitted to him or her by any member agency. The chairperson will be responsible for serving as secretary to the ACEP and EARB for all review of ERC matters. The chairperson will communicate all final decisions that require Entity List or MEU List amendments, to the Bureau of Industry and Security which shall be responsible for drafting the necessary changes to the Entity List and MEU List. If the ERC decides in a particular case that a party should be informed individually instead of by EAR amendment the chairperson will be responsible for preparing the “is informed” letter for the signature of the Deputy Assistant Secretary for Export Administration.

A listed entity may present a request to remove or modify its Entity List or the MEU List entry along with supporting information to the chairman at Room 3886, U.S. Department of Commerce, 14th Street and Pennsylvania Avenue NW, Washington, DC 20230. The chairperson shall refer all such requests and supporting information to all member agencies. The member agencies will review and vote on all such requests. The time frames, procedures and right of escalation by a member agency that is dissatisfied with the results that apply to proposals made by a member agency shall apply to these requests. The decision of the ERC (or the ACEP or EARB or the President, as may be applicable in a particular case) shall be the final agency decision on the request and shall not be appealable under part 756 of the EAR. The chairperson will prepare the response to the party who made the request. The response will state the decision on the request and the fact that the response is the final agency decision on the request. The response will be signed by the Deputy Assistant Secretary for Export Administration.

The End-User Review Committee will conduct regular reviews of the Entity List and MEU List for the purpose of determining whether any listed entities should be removed or modified. The review will include analysis of whether the criteria for listing the entity are still applicable and research to determine whether the name(s) and address(es) of each entity are accurate and complete and whether any affiliates of each listed entity should be added or removed.

4. Add Supplement No. 7 to part 744 to read as follows:

The addition reads as follows:

Supplement No. 7 to Part 744—`Military End-User' (MEU) List

The license requirement for entities listed in supplement no. 7 to part 744 applies to the export, reexport, or transfer (in-country) of any item subject to the EAR listed in supplement no. 2 to part 744. A license is required to export, reexport, or transfer (in-country) any item subject to the EAR listed in supplement no. 2 to part 744 when an entity that is listed on the MEU List is a party to the transaction as described in § 748.5(c) through (f). No license exceptions are available for exports, reexports or transfers (in-country) to listed entities on the MEU List for items specified in supplement no. 2 to part 744, except license exceptions for items authorized under the provisions of License Exception GOV set forth in § 740.11(b)(2)(i) and (ii) of the EAR as specified in § 744.21(c). The license application procedure and license review policy for entities specified in supplement no. 2 to part 744 is specified in § 744.21(d) and (e).

PART 756—[AMENDED]

5. The authority citation for part 756 is revised to read as follows:

Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783.

6. Section 756.2 is amended by revising paragraph (a)(3) to read as follows: