24 March 1998 Source: http://www.access.gpo.gov/su_docs/aces/aaces002.html ------------------------------------------------------------------------- [Federal Register: March 24, 1998 (Volume 63, Number 56)] [Rules and Regulations] [Page 14028-14030] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr24mr98-4] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE Bureau of Export Administration 15 CFR Parts 770 and 774 [Docket No. 980219044-8044-01] RIN 0694-AB66 Revision To ECCN 1C350 (Mixtures): Removal of Solvent Free Basis Calculation Requirement and Trace Quantity Exemption AGENCY: Bureau of Export Administration, Commerce. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: Chemicals capable of being used as precursors for chemical weapons agents are controlled for export on the Commerce Control List under Export Control Classification Number 1C350. Note 2 of the License Requirement Notes section of ECCN [[Page 14029]] 1C350 describes the three tier de minimis exemption for mixtures that contain these controlled chemicals. The de minimis exemption is based on the weight percentage (0%, 10%, and 25%) of these controlled chemicals within the mixture calculated on a ``solvent free basis''. This rule removes the requirement to calculate the weight percentage on a ``solvent free basis.'' Therefore, the de minimis exemption for mixtures will now be based on the weight percentage of controlled chemicals calculated on the absolute (total) weight of the mixture. The removal of the ``solvent free basis'' calculation requirement eliminates the necessity of the ``trace quantity'' exemption. The trace quantity exemption permitted exports of mixtures of concentrations of no more than 10,000 parts by weight per million of certain controlled chemicals. Therefore, the ``trace quantity'' exemption is removed. Although the EAA expired on August 20, 1994, the President, invoking the International Emergency Powers Act (IEEPA), continued in effect the export control system in place under the provisions of the Act and the Export Administration Regulations, to the extent permitted by law (Executive Order 12924 of August 19, 1994 and Notices of August 15, 1995, August 14, 1996 and August 13, 1997). EFFECTIVE DATE: March 24, 1998. FOR FURTHER INFORMATION CONTACT: For questions of a technical nature, contact Mr. Jim Seevaratnam, Office of Chemical and Biological Controls and Treaty Compliance, at (202) 482-3343 or facsimile (202) 482-0751. For questions of a general nature, call Sharron Cook, Regulatory Policy Division, at (202) 482-2440. SUPPLEMENTARY INFORMATION: Background The Australia Group (AG) recently held its annual consultations on ways to prevent the proliferation of chemical and biological weapons. The AG, an informal arrangement between 30 countries and the European Commission, was initiated by Australia in 1985, after the United Nations discovered that chemical weapons had been used in the Iran-Iraq war. The AG's participants include: Argentina, Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, the European Commission, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea (the Republic of), Luxembourg, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovak Republic, Spain, Sweden, Switzerland, United Kingdom and the United States. In 1994, in accordance with AG policy, BXA revised Note 2 to former ECCN 1C60 (currently 1C350) to establish a three-tiered approach to requiring licenses for mixtures containing controlled chemicals (59 FR 52685 October 19, 1994). That revision permitted export and reexports without a license when the amount of a controlled chemical in the mixture did not exceed a specified weight percentage (0% for tier 1, 10% for tier 2, 25% for tier 3). The calculation was done on a ``solvent free basis'', meaning that the amount of the solvent had to be subtracted before the weight percentage of the controlled chemical could be determined. This method of calculation proved difficult to implement for both exporters and other AG member governments. At the October 1997 session, the AG decided to change the method of calculation from ``solvent free basis'' to ``absolute weight.'' This change will simplify calculation and improve the coordination of the mixtures policy among AG members, while not compromising our nonproliferation objectives. Rulemaking Requirements 1. This final rule has been determined to be not significant for purposes of Executive Order 12866. 2. This rule involves collections of information subject to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). These collections have been approved by the Office of Management and Budget under control numbers 0694-0086,'Sample Shipment quarterly report,'' which carries a burden hour estimate of 35 minutes per submission; and 0694-0088, ``Multi-Purpose Application,'' which carries a burden hour estimate of 52.5 minutes per submission. There will be a decrease of approximately 100 Multi-Purpose Applications per year as a result of the revisions in this rule. Send comments on burden, or any other aspect of these collections of information to Linda Engelmeier, Departmental Clearance Officer, Department of Commerce, Room 5327, 14th and Constitution Avenue, NW, Washington DC 20230, and to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503 (Attention: BXA Desk Officer). 3. Notwithstanding any other provision of law, no person is required to respond nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act, unless that collection of information displays a currently valid OMB Control Number. 4. This rule does not contain policies with Federalism implications sufficient to warrant preparation of a Federalism assessment under Executive Order 12612. 5. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, an opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military and foreign affairs function of the United States (see 5 U.S.C. 553(a)(1)). Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this rule. 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. 601et seq.) are not applicable. Therefore, this regulation is issued in final form. Although there is no formal comment period, public comments on this regulation are welcome on a continuing basis. Comments should be submitted to Sharron Cook, Regulatory Policy Division, Office of Exporter Services, Bureau of Export Administration, Department of Commerce, P.O. Box 273, Washington, D.C. 20044. List of Subjects 15 CFR Part 770 Exports. 15 CFR Part 774 Exports, Reporting and recordkeeping requirements. Accordingly, parts 770 and 774 of the Export Administration Regulations (15 CFR parts 730-799) are amended as follows: 1. The authority citation for 15 CFR Part 770 continues to read as follows: Authority: 50 U.S.C. app. 2401 et seq.; 50 1701 et seq.; E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp. 228 (1997); Notice of August 15, 1995, 3 CFR, 1995 Comp. 501 (1996); Notice of August 14, 1996, 3 CFR, 1996 Comp. 298 (1997); Notice of August 13, 1997 (62 FR 43629, August 15, 1997). 2. The authority citation for 15 CFR part 774 continues to read as follows: Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C. 7430(e); 18 U.S.C. 2510 et seq.; 22 U.S.C. 287c; 22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; Sec. 201, Pub. L. 104- 58, 109 Stat. 557 (30 U.S.C. 185(s)); 30 U.S.C. 185(u); 42 U.S.C. [[Page 14030]] 2139a; 42 U.S.C. 6212; 43 U.S.C. 1354; 46 U.S.C. app. 466c; 50 U.S.C. app. 5; E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp. 228 (1997); Notice of August 15, 1995, 3 CFR, 1995 Comp. 501 (1996); Notice of August 14, 1996, 3 CFR, 1996 Comp. 298 (1997); Notice of August 13, 1997 (62 FR 43629, August 15, 1997). PART 770--[AMENDED] Sec. 770.4 [Removed] 3. Part 770 is amended by removing Sec. 770.4, ``Interpretations related to chemical mixtures--de minimis exceptions examples.'' PART 774--[AMENDED] 4. Supplement No. 1 to part 774 (Commerce Control List), Category 1 (Materials, Chemicals, ``Microorganisms'', & ``Toxins''), is amended by revising the License Requirements section of ECCN 1C350, to read as follows: Supplement No. 1 to Part 774--the Commerce Control List * * * * * Category 1--Materials, Chemicals, ``Microorganisms'', & ``Toxins'' * * * * * C. Materials * * * * * 1C350 Chemicals that may be used as precursors for toxic chemical agents, as follows (see List of Items Controlled). License Requirements Reason for Control: CB, AT ------------------------------------------------------------------------ Control(s) Country chart ------------------------------------------------------------------------ CB applies to entire entry............. CB Column 2. AT applies to entire entry............. AT Column 1. ------------------------------------------------------------------------ License Requirement Notes: 1. SAMPLE SHIPMENTS: Certain sample shipments of chemicals controlled under ECCN 1C350 may be made without a license, as provided by the following: a. Chemicals Not Eligible: The following chemicals are not eligible for sample shipments: 0-Ethyl-2-diisopropylaminoethyl methylphosphonite (QL) (C.A.S. #57856-11-8), Ethylphosphonyl difluoride (C.A.S. #753-98-0), and Methylphosphonyl difluoride (C.A.S. #676-99-3). b. Countries Not Eligible: The following countries are not eligible to receive sample shipments: Cuba, Iran, Iraq, Libya, North Korea, Sudan, Syria. c. Sample Shipments: A license is not required for sample shipments when the cumulative total of these shipments does not exceed a 55-gallon container or 200 kg of each chemical to any one consignee per calendar year. Multiple sample shipments, in any quantity, not exceeding the cumulative totals indicated in this paragraph may be exported without a license, in accordance with the provisions of this Note 1. A consignee that receives a sample shipment under this exclusion may not resell, transfer or reexport the sample shipment, but may use the sample shipment for any other legal purpose unrelated to chemical weapons. However, a sample shipment received under this exclusion remains subject to all General Prohibitions including the end-use restriction described in Sec. 744.4 of the EAR. d. The exporter is required to submit a quarterly written report for shipments of samples made under this Note 1. The report must be on company letterhead stationery (titled ``Report of Sample Shipments of Chemical Precursors'' at the top of the first page) and identify the chemical(s), Chemical Abstract Service Registry (C.A.S.) number(s), quantity(ies), the ultimate consignee's name and address, and the date exported. The report must be sent to the U.S. Department of Commerce, Bureau of Export Administration, P.O. Box 273, Washington, DC 20044, Attn: ``Report of Sample Shipments of Chemical Precursors''. 2. MIXTURES: Mixtures controlled by this entry that contain certain concentrations of precursor and intermediate chemicals are subject to the following licensing requirements: a. A license is required, regardless of the concentrations in the mixture, for the following chemicals: 0-Ethyl-2- diisopropylaminoethyl methylphosphonite (QL) (C.A.S.57856- 11-8), Ethylphosphonyl difluoride (C.A.S.753-98-0) and Methylphosphonyl difluoride (C.A.S.676-99-3); b. A license is required when at least one of the following chemicals constitutes more than 10 percent of the weight of the mixture: Arsenic trichloride (C.A.S.#7784-34-1), Benzilic acid (C.A.S.#76-93-7), Diethyl ethylphosphonate (C.A.S.#78-38-6), Diethyl methylphosphonite (C.A.S.#15715-41-0), Diethyl-N,N- dimethylphosphoroamidate (C.A.S.#2404-03-7), N,N-Diisopropyl-beta- aminoethane thiol (C.A.S.#5842-07-9), N,N-Diisopropyl-2-aminoethyl chloride hydrochloride (C.A.S.#4261-68-1), N,N-Diisopropyl-beta- aminoethanol (C.A.S.#96-80-0), N,N-Diisopropyl-beta-aminoethyl chloride (C.A.S.#96-79-7), Dimethyl ethylphosphonate (C.A.S.#6163- 75-3), Dimethyl methylphosphonate (C.A.S.#756-79-6), Ethylphosphonous dichloride [Ethylphosphinyl dichloride] (C.A.S.#1498-40-4), Ethylphosphonus difluoride [Ethylphosphinyl difluoride] (C.A.S.#430-78-4), Ethylphosphonyl dichloride (C.A.S.#1066-50-8), Methylphosphonous dichloride [Methylphosphinyl dicloride] (C.A.S.#676-83-5), Methylphosphonous difluoride [Methylphosphinyl difluoride] (C.A.S.#753-59-3), Methylphosphonyl dichloride (C.A.S.#676-97-1), Pinacolyl alcohol (C.A.S.#464-07-3), 3-Quinuclidinol (C.A.S.#1619-34-7), and Thiodiglycol (C.A.S.#111-48- 8) (Related ECCN: 1C995); c. A license is required when at least one of all other chemicals in the List of Items Controlled constitutes more than 25 percent of the weight of the mixture(related ECCN: 1C995); and d. A license is not required under this entry for mixtures when the controlled chemical is a normal ingredient in consumer goods packaged for retail sale for personal use. Such consumer goods are controlled by ECCN EAR99. Note to Mixtures: Calculation of concentrations of AG-controlled chemicals: a. Exclusion. No chemical may be added to the mixture (solution) for the sole purpose of circumventing the Export Administration Regulations; b. Absolute Weight Calculation. When calculating the percentage, by weight, of components in a chemical mixture, include all components of the mixture, including those that act as solvents; c. Example. 11% chemical listed in paragraph b. of Note 2 39% chemical not listed in Note 2 50% Solvent 100% Mixture 11/100 = 11% chemical listed in paragraph b. of Note 2. In this example, a license is required because a chemical listed in paragraph b. of Note 2 constitutes more than 10 percent of the weight of the mixture. 3. COMPOUNDS: A license is not required under this entry for chemical compounds created with any chemicals identified in this ECCN 1C350, unless those compounds are also identified in this entry. Technical Notes: 1. For purposes of this entry, a ``mixture'' is defined as a solid, liquid or gaseous product made up of two or more components that do not react together under normal storage conditions. 2. The scope of this control applicable to Hydrogen Fluoride (Item 25 in List of Items Controlled) includes its liquid, gaseous, and aqueous phases, and hydrates. * * * * * Dated: March 17, 1998. R. Roger Majak, Assistant Secretary for Export Administration. [FR Doc. 98-7493 Filed 3-23-98; 8:45 am] BILLING CODE 3510-33-P