Exceptions in dual use export licenses

Report on exceptions

in dual-use export licenses

Jan Cappelle (IPIS)

Steunpunt Buitenlands Beleid

Lange Sint-Annastraat 7

B-2000 Antwerpen

RAPPORT

September 2009

Steunpunt Buitenlands Beleid Lange Sint-Annastraat 7 B-2000 Antwerpen www.ua.ac.be/vsbb [email protected] © 2010 Steunpunt Buitenlands Beleid D/2010/11896/001 NUR 754 ISBN 9789490083113

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TABLE OF CONTENTS

SAMENVATTING .................................................................................................... 5

INTRODUCTION .................................................................................................... 7

THE EXPORT OR RE-EXPORT OF DUAL-USE GOODS FROM THE UNITED STATES............ 8

RESTRICTIONS IN APPLYING A LICENSE EXCEPTIONS IN THE UNITED STATES........... 15

OVERVIEW OF THE LICENSE EXCEPTIONS IN THE UNITED STATES............................ 21

1. Shipments of limited value (LVS) ................................................................ 21

2. Computers (APP) ...................................................................................... 21

3. Temporary imports, exports, and reexports (TMP)......................................... 21

4. Servicing and replacement of parts and equipment (RPL)............................... 22

5. Shipments to country group B countries (GBS) ............................................. 22

6. Civil end-users (CIV) ................................................................................. 22

7. Technology and software under restriction (TSR) .......................................... 23

8. Governments, international organizations, and international inspections under the

chemical weapons convention (GOV)............................................................... 23

9. Gift parcels and humanitarian donations (GFT) ............................................. 23

10. Technology and software unrestricted ....................................................... 23

11. Baggage (BAG) ....................................................................................... 24

12. Aircraft and vessels (AVS) ........................................................................ 24

13. Encryption commodities, software and technology (ENC).............................. 24

14. Agricultural commodities (AGR) ................................................................ 24

15. Additional permissive reexports (APR) ....................................................... 24

LICENSE EXCEPTIONS IN THE UNITED STATES THAT ARE SIMILAR TO THOSE IN EC COM

PROPOSAL 5011/0............................................................................................... 26

Introduction ................................................................................................. 26

1. Shipments of limited value (LVS) ................................................................ 26

1.1. Similarities and differences in terms of products ..................................... 26

1.2. Similarities and differences in terms of geographical range....................... 35

1.3. Summary........................................................................................... 35

2. Computers ............................................................................................... 36



2.3. Summary........................................................................................... 38

3. Temporary imports, exports, and reexports (TMP)......................................... 39



4

3.3. Summary........................................................................................... 41

4. Servicing and replacement of parts and equipment (RPL)............................... 42



4.3. Summary........................................................................................... 45

5. Encryption commodities, software and technology (ENC) ............................... 46



5.3. Summary........................................................................................... 48

GENERAL CONCLUSIONS...................................................................................... 49

ANNEX 1 – Comment on footnotes 84, 99, 113 and 129. .......................................... 51

ANNEX 2 ............................................................................................................ 52

ANNEX 3 – Similarities and differences in terms of geographical range. Table of

comparison......................................................................................................... 57

5

SAMENVATTING

De Europese Commissie presenteerde in december 2008 een voorstel (5011/09) voor

een Verordening van de Raad tot wijziging van Verordening (EG) nr. 1334/2000 tot

instelling van een communautaire regeling voor controle op de uitvoer van producten en

technologie voor tweeërlei gebruik. De Commissie beoogt met dit voorstel 'een uniforme

en consistente toepassing van de controle in de hele Gemeenschap, om het huidige

rechtsstelsel te vereenvoudigen.'1 'het concurrentievermogen van de EU-industrie te

vergroten en gelijke spelregels tot stand te brengen voor alle EU-exporteurs wanneer zij

bepaalde producten naar bepaalde bestemmingen uitvoeren'2. In het voorstel werden zes

nieuwe Communautaire Algemene Uitvoervergunningen uitgewerkt. Dit houdt in dat in

een lidstaat gevestigde exporteur dual-use producten mag uitvoeren zonder de

administratieve verplichting om een vergunning aan te vragen voordat de uitvoer

plaatsvindt. Een voorwaarde is wel dat de zending en de bestemming aan de in de

verordening opgenomen voorschriften en voorwaarden moet voldoen.

Het debat vond plaats in de Subgroep inzake nieuwe communautaire algemene

uitvoervergunningen van de Groep goederen voor tweeerlei gebruik, en het werk werd

verder gezet onder het Portugees voorzitterschap. Het Vlaams Gewest wenst, ter

voorbereiding van het Belgisch voorzitterschap van de Europese Unie in 2010, het

voorstel van de Commissie ten gronde te evalueren. De Dienst Controle Wapenhandel

van het Vlaams Gewest bestelde een studie over de gelijkenissen en verschillen met het

dual-use 'License Exceptions' beleid in de Verenigde Staten. De uitvoer en weder-uitvoer

van dual-use goederen in de Verenigde Staten wordt geregeld in een bijzondere

exportwetgeving. De wetgeving laat uitzonderingen toe, zgn. 'License Exceptions'. Een

exporteur mag dual-use producten uitvoeren zonder de verplichting om een vergunning

aan te vragen voordat de uitvoer plaatsvindt. De zending moet wel aan een reeks

voorschriften en voorwaarden voldoen.

Uit de vergelijkende studie, welke werd uitgevoerd door IPIS, blijkt dat er belangrijke

verschillen bestaan tussen het Europees en Amerikaans model, zowel in termen van de

dual-use producten (die zonder administratieve vergunning kunnen worden uitgevoerd);

als in termen van de landen van bestemming. Bij toepassing van het toen voorliggende

1 Verordening van de Raad van de Europese Unie tot wijziging van Verordening (EG) nr. 1334/2000 tot instelling van een communautaire regeling voor controle op de uitvoer van producten en technologie voor tweeërlei gebruik, 5 januari 2009, pagina 5. 2 Ibid.

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Europees voorstel kunnen dual-use producten, op basis van een Communautaire

Algemene Uitvoervergunning, worden uitgevoerd naar landen die in de Verenigde Staten

worden beschouwd als gevaarlijk voor de nationale veiligheid van het land. Hier

tegenover staat dan dat de Verenigde Staten veel meer landen opnemen in hun systeem

van License Exceptions. Dit betekent echter niet dat de procedures minder streng zijn.

De Verenigde Staten hebben tal van voorschriften en voorwaarden uitgewerkt waaraan

een exporteur moet aan voldoen. Die zijn onder andere gestoeld op het beleid van de

Verenigde Staten ten aanzien van individuele staten in termen van: redenen van

nationale veiligheid; redenen van buitenlands beleid; en landen onder embargo.

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INTRODUCTION

The European Commission (EC) presented in December 2008 a Proposal for a Council

Regulation amending Regulation (EC) No 1334/2000 setting up a Community regime for

the control of exports of dual-use items and technology. This proposal has been set up to

achieve “uniform and consistent application of controls throughout the Community”3, to

“simplify the current legal system, to enhance the industry’s competitiveness and to

establish a level playing field for all Community exporters when they export certain items

to certain destinations.” 4 The Proposal covers six Community General Export

Authorisations (CGEA). It is based on discussions within the sub-group on new CGEAs of

the Working Party on Dual-Use Goods, which continued under the Portugese Presidency.

In preparing the Presidency of the European Union in 2010, the Flemish Arms Trade

Monitoring Unit of the Flemish Department of Foreign Affairs ordered a study on the

similarities and differences between the CGEAs in the European Commission’s Proposal

and a similar procedure that is in place in the United States. The export or re-export of

dual-use goods from the United States are regulated in the Export Administration

Regulations. A License Exception is an authorization that allows an exporter to export or

re-export under stated conditions, items subject to the Export Administration Regulations

that would otherwise require a license.

This paper begins with a general explanation of the applicable export policies in the

United States and provides in chapter two an overview of the restrictions and conditions

in applying a License Exception. Chapter three focuses on the License Exceptions that are

silimar with the CGEAs in the EC’s Proposal.

3 Proposal for a Council Regulation amending Regulation (EC) No 1334/2000 setting up a Community regime for the control of exports of dual-use items and technology. 4 Ibid.

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THE EXPORT OR RE-EXPORT OF DUAL-USE GOODS FROM THE

UNITED STATES

The export or re-export of dual-use goods from the United States “are regulated in the

Export Administration Regulations (EAR). EAR have been designed primarily to

implement the Export Administration Act (EAA) of 19795.”6 These regulations “establish

the framework for regulating exports of dual-use, potentially sensitive commodities,

software, computers, and technology. Exports are restricted by item, country, and

recipient entity.”7 It is already since 1949 that the United States restricts dual-use export

controls. While “the restrictions are originally based on national security, foreign policy,

they also take into account the effect of domestic exports on the national economy.”8 “In

practice, the dual-use items are controlled for both national security and foreign policy

reasons with different control standards determining the licensing policy of an item to a

particular country.”9

In general, “the term “dual use” refers to EAR-controlled items that can be used both in

military and other strategic uses and commercial applications.”10 In general, “the term

dual use serves to distinguish EAR-controlled items that can be used both in military and

other strategic uses and in civil applications from those that are weapons and military

related use or design11.”12

The items (i.e. commodities, software, and technology) “are subject to the authority of

the Department of Commerce’s Bureau of Industry and Security (BIS) and are listed in

the "Commerce Control List" (CCL).”13 BIS regularly updates the list in order to reflect

revisions in the control lists of the multilateral export control regimes in which the United

States is a member and in unilateral control decisions. The CCL is divided into 10

categories, numbered as follows 14:

5 Export Administration Act of 1979, as amended, 50 U.S.C. app. 2401-2420. 6 Export Administration Regulations, Part 730 – General Information, §730.2. Footnote added in the quote. 7 Ian F. Fergusson, Specialist in International Trade and Finance, The Export Administration Act: Evolution, Provisions, and Debate, CRS Report for Congress, Congressional Research Service, July 15, 2009. 8 Ibid. 9 Ibid. 10 Export Administration Regulations, Part 730 – General Information, § 730.3. 11 These are items that are subject to the controls of the Department of State or subject to the nuclear related controls of the Department of Energy or the Nuclear Regulatory Commission. 12 Export Administration Regulations, Part 730 – General Information, § 730.3. Footnote added to the quote. 13 Export Administration Regulations, Part 738 - Commerce Control List Overview and the Country Chart, § 738.1. 14 Ibid, § 738.2.

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0 - Nuclear Materials, Facilities and Equipment and Miscellaneous

1 - Materials, Chemicals, "Microorganisms," and Toxins

2 - Materials Processing

3 - Electronics

4 - Computers

5 - Telecommunications and Information Security

6 - Lasers and Sensors

7 - Navigation and Avionics

8 - Marine

9 - Propulsion Systems, Space Vehicles and Related Equipment

Within each category, items are arranged by group. Each category contains the same

five groups. Each group is identified by the letters A through E, as follows 15:

A - Equipment, Assemblies and Components

B - Test, Inspection and Production Equipment

C - Materials

D - Software

E – Technology

Within each group individual items are identified by an Export Control Classification

Number (ECCN).

The licensing requirements of each of the items “are based on destination and Reason for

Control, which are presented in a “Commerce Country Chart".”16 The Chart “consists of a

table in which the first column lists all countries in alphabetical order.”17 The horizontal

headers “identify the various Reasons for Control.”18 The following is a list19 of all

possible Reasons for Control. A distinction is made between multilaterally-based and

unilaterally-based Reasons for Control:

1. Multilaterally-based Reasons of Control:

15 Ibid. 16 Ibid, § 738.3. 17 Ibid. There are a number of destinations that are not listed in the Country Chart. If a destination is not listed on the Country Chart and if it is a territory, possession, or department of a country included on the Country Chart, the Export Administration Regulations accords this destination the same licensing treatment as the country of which it is a territory, possession, or department. 18 Ibid, § 738.3. 19 Ibid, § 738.2.

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NS - National Security, based on the Wassenaar Arrangement

MT - Missile Technology, based on the Missile Technology Control Regime

CB - Chemical & Biological Weapons, based on the Australia Group

NP - Nuclear Nonproliferation, based on the Nuclear Suppliers Group

CW - Chemical Weapons Convention

FC - Firearms Convention, based on the Organization of American States (OAS) Model

Regulations for the Control of the International Movement of Firearms, their Parts and

Components and Munitions which were developed to assist OAS member countries to

implement the Inter-American Convention Against the Illicit Manufacturing of and

Trafficking in Firearms, Ammunition, Explosives, and Other Related Materials

UN - United Nations Embargo, based on the Resolutions of the United Nations Security

Council

2. Unilaterally-based Reasons for Control:

NP - Nuclear Nonproliferation

CC - Crime Control

AT - Anti-Terrorism

EI - Encryption Items

RS - Regional Stability

SS - Short Supply

SI - Significant Items

SL - Surreptitious Listening

The Department of Commerce’s Bureau of Industry and Security (BIS) is responsible for

regulating the export of dual-use items. As provided for under Executive Order 12981,

“the Departments of State, Defense, and Energy each shall have the authority to review

any export license application submitted to the Department of Commerce.”20

The mission of the Bureau of Industry and Security “is to advance U.S. national security,

foreign policy, and economic objectives by ensuring an effective export control and treaty

compliance system and promoting continued U.S. strategic technology leadership.”21 Its

policy towards individual countries is based on national security reasons and on foreign

policy reasons. Both are regulated in the Export Administration Act.

20 Export Administration Regulations, Legal Authority for the EAR, Part II.9. Administration of Export Controls, January 2009, Section 1, page 86. 21 Website Bureau of Industry and Security. Viewed on 24 September 2009. http://www.bis.doc.gov/about/index.htm.

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The Export Administration Act provides the President the power to restrict the export of

dual-use goods or technology for national security reasons “to such country that could

make a significant contribution to the military potential of such country or a combination

of countries that would prove detrimental to the national security of the United States.”22

In determining whether a country is added to or removed from the list of controlled

countries, “the President shall take into account:

� the extent to which the country’s policies are adverse to the national security

interests of the United States;

� the country’s Communist or non-Communist status;

� the present and potential relationship of the country with the United States;

� the present and potential relationships of the country with countries friendly or

hostile to the United States;

� the country’s nuclear weapons capability and the country’s compliance record with

respect to multilateral nuclear weapons agreements to which the United States is

a party; and

� such other factors as the President considers appropriate.”23

The following countries presently serve as the list of controlled countries for national

security reasons: Albania, Armenia, Azerbaijan, Belarus, Burma, Cambodia, China,

Georgia, Iraq, Kazachstan, Kyrgyzstan, Laos, Libya, Macau, Moldova, Mongolia, Russia,

Tajikistan, Turkmenistan, Ukraine, Uzbekistan and Vietnam.24 The Commerce Control List

marks various ECCN items that are controlled for national security reasons. The policy is

to approve applications unless there is a significant risk that the items will be diverted to

the countries on the list of controlled countries.25 The requests “are reviewed on a case-

by-case basis and are approved if it is determined the item is destined for civilian use or

would otherwise not make a significant contribution to the military potential of the

country of destination that would prove detrimental to the national security of the United

States.”26

22 Export Administration Act of 1979, as amended, 50 U.S.C. app. 2404, National security controls, § 2404.(b).(1). 23 Ibid, § 2404.(b).(1). 24 The countries are lised in Group D:1 of Export Administration Regulations, Part 740Spir - Supplement No. 1 to Part 740, Country Groups. 25 Export Administration Regulations, Part 742 - Control Policy -- CCL Based Controls, § 742.4.(b).(1). 26 Ibid, § 742.4.(b).(2). In recognition of efforts made to adopt safeguard measures for exports and reexports, Kazakhstan, Mongolia, and Russia are accorded enhanced favorable consideration licensing treatment. The general policy for Cambodia and Laos is to approve license applications when the Bureau determines, on a case-by-case basis, that the items are for an authorized use in Cambodia or Laos and are not likely to be diverted to another country or use contrary to the national security or foreign policy controls of the United

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Items controlled for national security purposes “are subject to a foreign availability

determination. Foreign availability exists when a good is available to controlled countries

from sources outside the United States in “sufficient quantity and comparable quality” so

that control of the item would be ineffective. The 1979 Act charges the Secretary, in

conjunction with the Secretary of Defense and other appropriate agencies, with

determining on a continuing basis whether any item currently subject to export control

for reasons of national security meets foreign availability status. Under EAA, a request to

make a foreign availability determination can be made by a license applicant or through

the initiative of the Secretary. If the Secretary makes a foreign availability determination,

the item must be decontrolled, although the President can overturn that decision with a

determination that decontrolling such items would be detrimental to the national security

of the United States. In such case, the President is directed to enter negotiations with

multilateral control partners to eliminate the availability in question.”27

The Export Administration Act also provides the President “to prohibit or curtail the

exportation of any goods, technology, or other information subject to the jurisdiction of

the United States or exported by any person subject to the jurisdiction of the United

States, to the extent necessary to further significantly the foreign policy of the United

States or to fulfill its declared international obligations.”28 Foreign policy controls “must

be renewed on a yearly basis.”29

The President “may impose, extend, or expand export controls under this section only if

the President determines that:

� such controls are likely to achieve the intended foreign policy purpose, in light of

other factors, including the availability from other countries of the goods or

technology proposed for such controls, and that foreign policy purpose cannot be

achieved through negotiations or other alternative means;

� the proposed controls are compatible with the foreign policy objectives of the

United States and with overall United States policy toward the country to which

States. For the People's Republic of China (PRC), there is a general policy of approval for liegende applications to export, reexport, or transfer items to civil end-uses. There is a presumption of denial for license applications to export, reexport, or transfer items that would make a direct and significant contribution to the PRC’s military capabilities such as, but not limited to, the major weapons systems (which are described in in Supplement No. 7 to Part 742 of the EAR). Export Administration Regulations, Part 742 - Control Policy -- CCL Based Controls, § 744.2.(b).(5)-(7). 27 Ian F. Fergusson, Specialist in International Trade and Finance, The Export Administration Act: Evolution, Provisions, and Debate, CRS Report for Congress, Congressional Research Service, July 15, 2009, page 8. The Foreign Availability policy is regulated in Export Administration Act of 1979, as amended, 50 U.S.C. app. 2404, National security controls, § 2404.(f).(1)-(5). 28 Export Administration Act of 1979, as amended, 50 U.S.C. app. 2405, Foreign policy controls, § 2405.(a).(1). 29 Ibid, § 2405.(a).(3).

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exports are to be subject to the proposed controls;

� the reaction of other countries to the imposition, extension, or expansion of such

export controls by the United States is not likely to render the controls ineffective in

achieving the intended foreign policy purpose or to be counterproductive to United

States foreign policy interests;

� the effect of the proposed controls on the export performance of the United States,

the competitive position of the United States in the international economy, the

international reputation of the United States as a supplier of goods and technology,

or on the economic well-being of individual United States companies and their

employees and communities does not exceed the benefit to United States foreign

policy objectives; and

� the United States has the ability to enforce the proposed controls effectively.”30

Currently, foreign policy controls “are in place for anti-terrorism, regional stability, crime

control, United Nations sanctions purposes, unilateral embargoes and sanctions, and

non-proliferation objectives. This latter category includes adherence to multilateral non-

proliferation agreements in the areas of chemical and biological weapons, nuclear

proliferation, missile technology and firearms.”31 Foreign policy controls are also in place

for some specific items.32

These provisions “shall not apply in any case in which the President exercises the

authority to impose export controls, or to approve or deny export license applications, in

order to fulfill obligations of the United States pursuant to treaties to which the United

States is a party or pursuant to other international agreements.”33

Similar with the procedures in relation to controlling items for national security purposes,

the United States has set up conditions in order to assess a foreign availability

determination. But it “directs the President to engage in negotiations to remove the

30 Ibid, § 2405.(b). 31 Ian F. Fergusson, Specialist in International Trade and Finance, The Export Administration Act: Evolution, Provisions, and Debate, CRS Report for Congress, Congressional Research Service, July 15, 2009, page 9. The foreign policy control restrictions are regulated in Export Administration Regulations, Part 742 - Control Policy -- CCL Based Controls, § 742.4.(a)., 742.5.(a)., 742.2.(a).(1)-(3), 742.3.(a).(2), 742.6.(a).(1)-(2)., 742.7.(a).(1)-(3), 742.8.(a)., 742.10.(a)., 742.17.(a)., 742.18.(a).(1)-(2), 742.19.(a)., Export Administration Regulations, Part 745 - Chemical Weapons Convention Requirements and Supplement No. 2 to Part 742 of the Export Administration Regulations. 32 The foreign policy control restrictions on restriction items are regulated in Export Administration Regulations, Part 742 - Control Policy -- CCL Based Controls, § 742.13., 742.14., and 742.15(a). They relate to encrypted items; items for the development, production, overhaul of commercial aircraft engines controlled by 9E003.a.1. through a.12, .f, and related controls; and items that may be used for surreptitious interception of wire, oral, or electronic communications. 33 Export Administration Act of 1979, as amended, 50 U.S.C. app. 2404, foreign policy controls, §2405.(i).

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foreign availability of items controlled for foreign policy purposes, and it requires the

President to impose controls to comply with international obligations or treaties.

Furthermore, it requires a license for the export of certain items to countries that support

international terrorism.”34

Controls based on the end-use or end-user of an item “are also administered as foreign

policy controls. They were introduced under the Enhanced Proliferation Control Initiative

(EPCI) of 1991, and they are contained in Part 744 of the EAR.”35

34 Ian F. Fergusson, Specialist in International Trade and Finance, The Export Administration Act: Evolution, Provisions, and Debate, CRS Report for Congress, Congressional Research Service, July 15, 2009, page 9. The foreign policy control is regulated in Export Administration Act of 1979, as amended, 50 U.S.C. app. 2404, foreign policy controls, §2405.(j), .(l), .(m) and .(n). 35 Ibid.

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RESTRICTIONS IN APPLYING A LICENSE EXCEPTIONS IN THE

UNITED STATES

In the United States, a License Exception is an authorization that allows an exporter to

export or re-export under stated conditions, items subject to the Export Administration

Regulations that would otherwise require a license. The conditions and restrictions are

divided in two categories: general restrictions and conditions; and a set of particular

conditions and restrictions per License Exception. The restrictions depend strongly on the

end-use of the items and commodities, the end-users and the activities. This chapter will

provide an overview of the main general restrictions and a comparison of those with EC

COM Proposal 5011/09.

The Export Administration Regulations lists in its Part 740.2 eleven restrictions in

applying a License Exception. An exporter may not use any License Exception if:36

� the authorization to use a License Exception has been suspended or revoked, or

the intended export does not qualify for a License Exception.

� the export or re-export is subject to one of the following ten General

Prohibitions37:

o General Prohibition One. It is prohibited to export or re-export items

without a license or License Exception, export any item subject to the EAR

to another country or re-export any item of U.S.-origin if each of the

following is true: (a) the item is controlled for a reason indicated in the

applicable Export Control Classification Number (ECCN), and (b) export to

the country of destination requires a license for the control reason as

indicated on the Country Chart.

o General Prohibition Two relates to re-export and export from abroad of

foreign-made items incorporating more than a de minimis amount38 of

controlled U.S. content.

o General Prohibition Three relates to re-export and export from abroad of

foreign-produced direct products of U.S. technology and software.

o General Prohibition Four relates to denial Orders.

36 This chapter only explains the restrictions that are relevant for the research questions posed in the beginning of this paper. This paper does not include the restrictions that are limited to items that are controlled for unilaterally-based reasons of control. 37 Export Administration Regulations, Part 736, General Prohibitions, § 736.2. 38 The de minimis amount of controlled U.S. content is as defined in §734.4 of the EAR.

16

o General Prohibition Five relates to export or re-export to prohibited end-

uses or end-users.

o General Prohibition Six relates to export or re-export to embargoed

destinations.

o General Prohibition Seven relates to prohibition of support of Proliferation

Activities39.

o General Prohibition Eight relates to in transit shipments and items to be

unladen from vessels or aircraft.40

o General Prohibition Nine. It is prohibited to violate terms or conditions of a

license or of a License Exception issued under or made a part of the EAR,

and it may not violate any order issued under or made a part of the EAR.

o General Prohibition Ten. An exporter may not sell, transfer, export,

reexport, finance, order, buy, remove, conceal, store, use, loan, dispose

of, transport, forward, or otherwise service, in whole or in part, any item

subject to the EAR and exported or to be exported with knowledge that a

violation of the Export Administration Regulations, the Export

Administration Act or any order, license, License Exception, or other

authorization issued there under has occurred, is about to occur, or is

intended to occur in connection with the item. Nor may an exporter rely

upon any license or License Exception after notice to you of the suspension

or revocation of that license or exception.

� the item is controlled for missile technology (MT) reasons, except that the items

described in ECCNs 6A008, 7A001, 7A002, 7A004, 7A101, 7A102 (slightly

different with item 7A102 in Council Regulation (EC) No 428/2009), 7A103,

7A104, 7B001, 7D001, 7D002, 7D003, 7D101, 7D102, 7E003, or 7E101 may be

exported as part of a manned aircraft, land vehicle or marine vehicle or in

quantities appropriate for replacement parts for such applications under four

39 An exporter you may not engage in any of the following activities without a license from BIS: the design, development, production, or use of nuclear explosive devices in or by Cuba, India, Iran, Iraq, Israel, North Korea, Libya and Pakistan; the design, development, production, or use of missiles in or by Bahrain, China, Egypt, India, Iran, Iraq, Israel, Jordan, North Korea, Kuwait, Lebanon, Libya, Macau, Oman, Pakistan, Qatar, Saudi Arabia, Syria, United Arab Emirates and Yemen; or the design, development, production, stockpiling, or use of chemical or biological weapons in or by any country or destination, worldwide. The General Prohibition also restricts the export of certain chemicals and in providing certain technical assistance to foreign persons with respect to encryption items. 40 An exporter may not export or reexport an item through or transit through Albania, Armenia, Azerbaijan, Belarus, Cambodia, Cuba, Georgia, Kazakhstan, Kyrgyzstan, Laos, Mongolia, North Korea, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan and Vietnam unless a License Exception or license authorizes such an export or reexport directly to such a country of transit, or unless such an export or reexport is eligible to such a country of transit without a license.

17

types of EAR License Exceptions.41 Items described in ECCN 2A001 may be

exported or re-exported under two types of EAR License Exceptions.42

� the export or re-export is to a comprehensively embargoed destination (Cuba,

Iran, and North Korea), unless a license exception or portion thereof is specifically

listed in the license exceptions paragraph pertaining to a particular embargoed

country.

� the commodities are "Space qualified" items.43

The restrictions in EC COM Proposal 5011/09 are less elaborated. It only lists a few

restrictions, which can be divided in four main groups: restricting proliferation activities,

conditions in terms of re-export and sharing information with the competent authorities

and in relation to transit shipments. This paper will discuss the restrictions that are

similar with those in the United States.

The CGEAs in EC COM Proposal 5011/09 do not authorize the export of items “where the

exporter has been informed by the competent authorities of the Member State in which

he is established that the items in question are or may be intended, in their entirety or in

part, (a) for use in connection with the development, production, handling, operation,

maintenance, storage, detection, identification or dissemination of chemical, biological or

nuclear weapons or other nuclear explosive devices, or the development, production,

maintenance or storage of missiles capable of delivering such weapons, (b) for military

end-use where the purchasing country or country of destination is subject to an arms

embargo imposed by a Common Position or Joint Action adopted by the Council of the

European Union or a decision of the OSCE or imposed by a binding resolution of the

Security Council of the United Nations, or (c) for use as parts or components of military

items listed in national military lists that have been exported from the territory of the

Member State concerned without authorisation or in breach of an authorisation

prescribed by the national legislation of that Member State.”44 Additionally, the CGEAs do

41 Application under EAR part § 740.9(a)(2)(ii) on License Exception TMP for kits consisting of replacement parts, § 740.10 on License Exception RPL, § 740.13 on License Exception TSU, or § 740.15(c) on License Exception AVS for equipment and spare parts for permanent use on a vessel or aircraft. The License Exceptions are explained in this paper, and in Export Administration Regulations, Part 740 - License Exceptions. 42 Applications under EAR part § 740.9(a)(2)(ii) on License Exception TMP or § 740.10 on License Exception RPL. The License Exceptions are explained in this paper, and in Export Administration Regulations, Part 740 - License Exceptions. 43 This includes national items of commodities that are not included in multilateral export control-regimes and items in multilateral export control-regimes. Commodities defined in 3A001.b.8 (Traveling Wave Tube Amplifiers (TWTAs) exceeding 18 GHz), 6A002.e, 6A008.j.1, or 6A998.b; "software" for commodities defined in 3A001.b.8 (Traveling Wave Tube Amplifiers (TWTAs) exceeding 18 GHz), 6A002.e, 6A008.j.1, or 6A998.b and controlled under ECCNs 3D001 (Traveling Wave Tube Amplifiers (TWTAs) exceeding 18 GHz), 6D001, 6D002, 6D991; and "technology" for commodities defined in ECCNs 3A001.b.8 (Traveling Wave Tube Amplifiers (TWTAs) exceeding 18 GHz), 6A002.e, 6A008.j.1, or 6A998.b and controlled under ECCNs 3E001, 6E001, 6E002, 6E101, 6E991. 44 EC COM Proposal 5011/09, annex IIb, Part 3.2.(1).(a)-(c).; annex IIc, Part 3.2.(1).(a)-(c).; annex IId, Part 3.1.(1).(a)-(c).; annex IIe, Part 3.1.(1).(a)-(c).; annex IIf, Part 3.1.(1).(a)-(c).

18

not authorise the export of items where the exporter is aware that the items in question

are intended, in their entirety or in part, for any of such uses.45 The conditions and

restrictions are not further elaborated.

The United States applies similar restrictions, but the restrictions are more elaborated.

Those restrictions are defined in Part 740 of the Export Administration Regulations, §

740.2.(2). which stipulates that the export or reexport of items is subject to the ten

General Prohibitions. General Prohibition Five relates to the export or reexport to

prohibited end-uses or end-users: an exporter “may not, without a license, knowingly

export or reexport any item subject to the EAR to an end-user or end-use that is

prohibited by part 744 of the EAR.” 46 Part 744 lists and elaborates the following

prohibitions:

� § 744.2: Restrictions on certain nuclear end-uses;

� § 744.3: Restrictions on certain rocket systems (including ballistic missile systems

and space launch vehicles and sounding rockets) and unmanned air vehicles

(including cruise missile systems, target drones and reconnaissance drones) end-

uses;

� § 744.4: Restrictions on certain chemical and biological weapons end-uses;

� §744.5: Restrictions on certain maritime nuclear propulsion end-uses;

� § 744.6: Restrictions on certain activities of U.S. persons;

� §744.7: Restrictions on certain exports to and for the use of certain foreign

vessels or aircraft;

� § 744.8: Restrictions on exports and reexports to persons designated pursuant to

Executive Order 13382 – Blocking Property of Weapons of Mass Destruction

Proliferators and Their Supporters;

� § 744.9: Restrictions on certain exports and reexports of cameras controlled by

ECCN 6A003.b.4.b;

� § 744.10: Restrictions on certain entities in Russia;

� § 744.11: License Requirements that Apply to Entities Acting Contrary to the

National Security or Foreign Policy Interests of the United States;

� § 744.12: Restrictions on exports and reexports to persons designated in or

pursuant to Executive Order 13224 (Specially Designated Global Terrorist)

(SDGT);

45 Ibid, annex IIb, Part 3.2.(2).; annex IIc, Part 3.2.(2).; annex IId, Part 3.1.(2).; annex IIe, Part 3.1.(2).; annex IIf, Part 3.1.(2). 46 Export Administration Regulations, Part 736, General Prohibitions, § 736.(2).(5).

19

� § 744.13: Restrictions on exports and reexports to persons designated pursuant

to Executive Order 12947 (Specially Designated Terrorists) (SDT);

� § 744.14: Restrictions on exports and reexports to designated Foreign Terrorist

Organizations (FTOs);

� § 744.15: Restrictions on exports and reexports involving persons named in

General Orders;

� § 744.16: Procedure for Requesting Removal or Modification of an Entity List

Entity;

� § 744.17: Restrictions on certain exports and reexports of general purpose

microprocessors for “military end-uses” and to “military end-users”;

� § 744.18: Restrictions on exports, reexports, and transfers to persons designated

in or pursuant to Executive Order 13315;

� § 744.19: Licensing policy regarding persons sanctioned pursuant to specified

statutes;

� § 744.20: License requirements that apply to certain sanctioned entities;

� § 744.21: Restrictions on certain military end-uses in the People's Republic of

China (PRC);

� § 744.22: Restrictions on Exports, Reexports and Transfers to Persons Whose

Property and Interests in Property Are Blocked Pursuant to Executive Orders

13310, 13448 or 13464.

Each of the CGEAs in EC COM Proposal 5011/09 includes an information duty for the

exporter. All CGEAs stipulate that any exporter who uses this authorization must inform

the competent authorities of the Member State “where he is established of first use of

the authorization no later than 30 days after the date of first export.”47 Three CGEAs in

EC COM Proposal 5011/09 also stipulate that “before exportation, the foreign purchaser

needs to be informed that the items can only be re-exported under certain conditions.”48

There is also an information duty for the exporter in the United States but the

requirements are less specific. The United States applies a reporting requirement for the

five License Exceptions which are discussed in this paper. Those can be divided in three

groups:

� The License Exceptions LVS, TSR49 Computers and RPL only require “special

47 EC COM Proposal 5011/09, annex IIb, Part 3, § 4.(1).; annex IIc, Part 3, § 4.; annex IId, Part 3, § 3.; Annex IIe, Part 3, §2.(1).; annex IIf, Part 3, § 3.(1). 48 Ibid, annex IIb, Part 3, § 4.(2).; annex IIe, Part 3, §2.(2).; annex IIf, Part 3, § 3.(2). 49 For License Exception TSR reports are not required for release of technology or source code subject to the EAR to foreign nationals in the U.S. under the provisions of the License Exception.

20

reporting requirements for exports of certain commodities, software and technology

controlled under the Wassenaar Arrangement. Such reports must be submitted to

BIS semiannually and records of all exports subject to the reporting requirements

of this section must be kept in accordance with part 762 of the EAR on

Recordkeeping. This does not require reports for reexports.”50 Part 762 of the EAR

lists the conditions of Recordkeeping.

� The EAR stipulates other reporting requirements for TMP and ENC and additional

ones for RPL.

o No requirements are stipulated for the export of items for exhibition or fair

(License Exception TMP).

o Exporters are required to maintain records for any items exported or

reexported pursuant to License Exception RPL to repair or service

previously legally exported or reexported items controlled under two

unilaterally controlled items (ECCNs 2A983 and 2D983).51

o A prior review is required under License Exception ENC for the export and

reexport of the items 5A002.a.1, a.2, a.5, a.6, or a.9, 5B002, or 5D002

and of for technology controlled for EI reasons under ECCN 5E002 to

private sector end-users.52 Some items are excluded from review

request.53 Additionally, “there is a semi-annual reporting for exports to all

destinations other than Canada, and for reexports from Canada, under this

license exception”54 and for items and commodities that are modified only

“to upgrade the key length used for confidentiality or key exchange

algorithms.”55

Summary

Both Export Administration Regulations and EC COM Proposal 5011/09 stipulate

conditions and restrictions in order to control the export of dual-use items for reasons of

end-use and end-users. United States’ EAR’ policies are much more elaborated than

those in EC COM 5011/09. EAR’s part 744 lists 20 various restrictions.

Each of the CGEAs in EC COM Proposal 5011/09 includes an information duty for the

exporter. This is also the case in the United States but the requirements are less specific.

50 Export Administration Regulations, Part 743 - Special Reporting Requirements, §743.1(a). 51 Ibid, §740.10.(c). 52 Ibid, §740.17.(b). 53 Ibid, §740.17.(b).(4). 54 Ibid, §740.17.(e).(1). 55 Ibid, §740.17.(e).(2).

21

OVERVIEW OF THE LICENSE EXCEPTIONS IN THE UNITED STATES

Part 740 of the Export Administration Regulations explains 15 types of License Exeptions.

This chapter provides a general overview.

1. Shipments of limited value (LVS)

License Exception LVS “authorizes the export and reexport in a single shipment of eligible

commodities as identified by "LVS - $(value limit)" on the Commerce Control List.” 56 As

explained, the Commerce Control list includes the dual-use items subject to the export

licensing authority of BIS.

2. Computers (APP)

License Exception APP “authorizes exports and reexports of computers, including

"electronic assemblies" and specially designed components therefor controlled by ECCN

4A003, except ECCN 4A003.e (equipment performing analog-to-digital conversions

exceeding the limits in ECCN 3A001.a.5.a), exported or reexported separately or as part

of a system for consumption.

License Exception APP authorizes exports of technology and software controlled by

ECCNs 4D001 and 4E001 specially designed or modified for the "development",

"production", or "use" of computers, including "electronic assemblies" and specially

designed components therefor classified in ECCN 4A003, except ECCN 4A003.e

(equipment performing analog-to-digital conversions exceeding the limits in ECCN

3A001.a.5.a). Related equipment controlled under ECCN 4A003.g may not be exported

or reexported under this License Exception when exported or reexported separately from

eligible computers authorized under this License Exception.” 57

3. Temporary imports, exports, and reexports (TMP)

This License Exception TMP is divided in three groups. 58 It regulates:

56 Ibid, § 740.3. 57 Ibid, § 740.7. 58 Ibid, § 740.9.

22

� temporary exports and reexports of: usual and reasonable kinds and quantities of

tools of trade (commodities, software and technology) for use in a lawful

enterprise or undertaking of the exporter, kits consisting of replacement parts,

items for exhibition and demontration, commodities to be inspected, tested,

calibrated or repaired abroad, containers, broadcast material and news media

material;

� the conditions for exporting foreign-origin items temporarily in the United States;

� exports and reexports of beta test software for distribution to the general public.

4. Servicing and replacement of parts and equipment (RPL)

This License Exception “authorizes exports and reexports associated with one-for-one

replacement of parts or servicing and replacement of equipment.” 59

5. Shipments to country group B countries (GBS) 60

License Exception GBS authorizes exports and reexports to 173 countries (annex 2) of

those commodities that normally require a license to the ultimate destination for national

security reasons only (as indicated in the Country Chart) and are authorized when

identified by "GBS - Yes" on the Commerce Control List, provided the commodities is

destined to one of the 173 countries61 (annex 2).

6. Civil end-users (CIV)62

License Exception CIV authorizes exports and reexports of items on the Commerce

Control List that have a license requirement to the ultimate destination pursuant to the

Commerce Country Chart for national security reasons only and identified by "CIV - Yes"

on the Commerce Control List, provided the items are destined to civil end-users for civil

end-uses in Albania, Armenia, Azerbaijan, Belarus, Burma, Cambodia, China, Georgia,

Iraq, Kazachstan, Kyrgyzstan, Laos, Libya, Macau, Moldova, Mongolia, Russia, Tajikistan,

Turkmenistan, Ukraine, Uzbekistan and Vietnam63.

59 Ibid, § 740.10. 60 Ibid, § 740.4. 61 The countries are lised in Group B of Export Administration Regulations, Part 740Spir - Supplement No. 1 to Part 740, Country Groups. 62 Export Administration Regulations, Part 740 - License Exceptions, § 740.5. 63 The countries are lised in Group D:1 of Export Administration Regulations, Part 740Spir - Supplement No. 1 to Part 740, Country Groups.

23

7. Technology and software under restriction (TSR)64

License Exception TSR permits exports and reexports of technology and software to 173

countries65 (annex 2) while that normally requires a license requirement to the ultimate

destination for national security reasons only (as indicated in the Country Chart) and are

authorized when identified by "TSR - Yes" on the Commerce Control List.

8. Governments, international organizations, and international inspections

under the chemical weapons convention (GOV)

This License Exception “authorizes exports and reexports for international nuclear

safeguards; U.S. government agencies or personnel, and agencies of cooperating

governments; and international inspections under the Chemical Weapons Convention.” 66

9. Gift parcels and humanitarian donations (GFT)

The License Exception “authorizes exports and reexports of gift parcels by an individual

(donor) addressed to an individual, or a religious, charitable or educational organization

(donee) located in any destination for the use of the donee or the donee's immediate

family (and not for resale).” 67

The License Exception also “authorizes exports or reexports by groups or organizations of

donations to meet basic human needs when those groups or organizations have

experience in maintaining a verifiable system of distribution that ensures delivery to the

intended beneficiaries.” 68

10. Technology and software unrestricted (TSU)

This License Exception authorizes exports and reexports of operation technology and

software69; sales technology and software70; software updates (bug fixes)71; "mass

64 Export Administration Regulations, Part 740 - License Exceptions, § 740.6. 65 The countries are lised in Group B of Export Administration Regulations, Part 740Spir - Supplement No. 1 to Part 740, Country Groups. 66 Export Administration Regulations, Part 740 - License Exceptions, § 740.11. 67 Ibid, § 740.12. 68 Ibid, § 740.12. 69 “Operation technology” is “the minimum technology necessary for the installation, operation, maintenance (checking), and repair of those commodities or software that are lawfully exported or reexported under a license or a License Exception.” Export Administration Regulations, Part 740 - License Exceptions, § 740.13.(a).(1). 70 “Sales technology and software” is “data supporting a prospective or actual quotation, bid, or offer to sell, lease, or otherwise supply any item.” Ibid, § 740.13.(b).(1).

24

market" software72; and unrestricted encryption source code (ecryption source code that

would be considered publicly available).

11. Baggage (BAG)

This License Exception “authorizes individuals leaving the United States either

temporarily (i.e., traveling) or longer-term (i.e., moving) and crew members of exporting

or reexporting carriers to take to any destination, as personal baggage, the classes of

commodities, software and technology.73

12. Aircraft and vessels (AVS)

This License Exception “authorizes departure from the United States of foreign registry

civil aircraft on temporary sojourn in the United States and of U.S. civil aircraft for

temporary sojourn abroad; the export of equipment and spare parts for permanent use

on a vessel or aircraft; and exports of vessels or planes of U.S. or Canadian registry and

U.S. or Canadian Airlines' installations or agents.” 74

13. Encryption commodities, software and technology (ENC)

License Exception ENC “authorizes export and reexport of software and commodities and

components therefor that are classified under ECCNs 5A002.a.1, a.2, a.5, a.6 or a.9,

5B002, 5D002, and technology that is classified under ECCN 5E002.” 75

14. Agricultural commodities (AGR)

License Exception AGR permits “the export of agricultural commodities to Cuba, as well

as the reexport of U.S. origin agricultural commodities to Cuba.” 76

15. Additional permissive reexports (APR)77

71 The provision authorizes “exports and reexports of software updates that are intended for and are limited to correction of errors (“fixes” to “bugs”) in software lawfully exported or reexported (original software).” Ibid, § 740.13.(c). 72 This relates to software that is generally available to the public. Supplement No. 2 to Part 774 - General Technology and Software Notes. 73 Export Administration Regulations, Part 740 - License Exceptions, § 740.14. 74 Ibid, § 740.15. 75 Ibid, § 740.17. 76 Ibid, § 740.18. 77 Ibid, § 740.16.

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This License Exception regulates the following reexports:

� Reexports of commodities, except those that are controlled for nuclear

nonproliferation, chemical and biological, missile technology, Significant Items or

crime control reasons and some type of cameras and military commodities;

� Reexports of items controlled for nuclear nonproliferation reasons to, among, and

from members of the Nuclear Suppliers Group;

� Return to the United States of any item;

� Reexports to Sudan of certain items;

� Shipments of foreign-made products that incorporate U.S.-origin component;

� Reexports between Switzerland and Liechtenstein;

� Reexports to a destination to which direct shipment from the United States is

authorized under an unused outstanding license;

� Reexports of any item from Canada that, at the time of reexport, may be

exported directly from the United States to the new country of destination under

any License Exception;

� Reexports from a foreign destination to Canada of any item if the item could be

exported to Canada without a license.

26

LICENSE EXCEPTIONS IN THE UNITED STATES THAT ARE SIMILAR

TO THOSE IN EC COM PROPOSAL 5011/09

Introduction

This chapter identifies the similarities and differences between the Export Administration

Regulations part on License Exceptions and EC COM Proposal Proposal 5011/09 in terms

of products and geographical range.

EU COM Proposal 5011/09 identifies six community general export authorizations:

1. Low Value Shipments (No EU002);

2. Export after Repair/ Replacement (No EU003);

3. Temporary Export for Exhibition or Fair (No EU004);

4. Computers and related equioment (No EU005);

5. Telecommunication and Information Security (No EU006);

6. Chemicals (No EU007).

The United States has five similar license exceptions:

1. Shipments of Limited Value;

2. Servicing and replacement of parts and equipment,

3. Temporary imports, exports, and reexports;

4. Computers;

5. Encryption commodities, software and technology.

The United States has no separate License Exception for chemicals.

1. Shipments of limited value (LVS)

1.1. Similarities and differences in terms of products

The United States authorizes License Exception LVS for 68 ECCN items (headers), of

which five items are listed on the Wassenaar Munition List; and of which three ECCN

items are controlled for unilateral purposes. EU COM Proposal 5011/09 authorizes more

27

than 190 commodities78. There is a similarity between more than 50 items (table 1).

These items are authorized under License Exception LVS (in relation to export from the

US and reexport79) as well as under EC COM Proposal 5011/09 (in relation to export from

the EC and reexport80).

Table 1: authorization of items under License Exception LVS as well as under EC COM

Proposal 5011/09. Name of item/ selling price: BIS’ Commerce Control List.

ECCN Name of item Selling price

1A001

Components made from fluorinated

compounds, as follows (see List of Items

Controlled). $5000

1A003

Manufactures of non-fluorinated

polymeric substances controlled by

1C008.a.3 in film, sheet, tape or ribbon

form with either of the following

characteristics (see List of Items

Controlled). $200

1B001

Equipment for the production of fibers,

prepregs, preforms or "composites"

controlled by 1A002 or 1C010, as follows

(see List of Items Controlled), and

specially designed components and

accessories therefor.

N/A for Missile

Technology (MT) and

for 1B001.a; $5000 for

all other items

1B002

Equipment for producing metal alloys,

metal alloy powder or alloyed materials,

specially designed to avoid contamination

and specially designed for use in one of

the processes specified in 1C002.c.2. $5000

78 The items that are excluded are to the CGEA: all items in categories D and E; all items specified in Annex IV to Regulation 1334/2000; and a list of 35 items (1A002a, 1A004, 1C012a, 1C227, 1C228, 1C229, 1C230, 1C231, 1C236, 1C237, 1C240, 1C350, 1C450, 5A001b5, 5A002, 5B002, 6A001a2a1, 6A001a2a5, 6A002a1c, 6A00813, 8A001b, 8A001d, 9A011, 0C001, 0C002, 0D001, 0E001, 1A102, 1C351, 1C352, 1C353, 1C354, 7E104, 9A009.a and 9A117). 79 Commodities may be reexported under this License Exception, provided that they could be exported from the United States to the new country of destination under LVS. Export Administration Regulations, Part 740 - License Exceptions, § 740.3. 80 Commodities can be re-exported to an ultimate destination in a country which is member state of the European Community or a French overseas collectivity and is mentioned in part 2 of annex IIb of the EC COM Proposal 5011/09 (Argentina, Brazil, Iceland, South Africa, South Korea, Turkey). EC COM Proposal 5011/09, annex IIb, Part 3, 4(2).

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1B003

Tools, dies, molds or fixtures, for

"superplastic forming" or "diffusion

bonding" titanium or aluminum or their

alloys, specially designed for the

manufacture of (see List of Items

Controlled). $5000

1C002

Metal alloys, metal alloy powder and

alloyed materials, as follows (see List of

Items Controlled).

$3000; N/A for Nuclear

Nonproliferation (NP)

1C003

Magnetic metals, of all types and of

whatever form, having any of the


Controlled). $3000

1C004

Uranium titanium alloys or tungsten

alloys with a "matrix" based on iron,

nickel or copper, having all of the


Controlled). $3000

1C005

"Superconductive" "composite"

conductors in lengths exceeding 100 m or

with a mass exceeding 100 g, as follows

(see List of Items Controlled). $1500

1C006

Fluids and lubricating materials, as

follows (see List of Items Controlled). $3000

1C007

Ceramic base materials, non-"composite"

ceramic materials, ceramic-"matrix"

"composite" materials and precursor

materials, as follows (see List of Items

Controlled).

$5000, except N/A for

MT and for 1C007.e

1C008

Non-fluorinated polymeric substances, as


1C009

Unprocessed fluorinated compounds, as


1C010

"Fibrous or filamentary materials" which

may be used in organic "matrix", metallic

"matrix" or carbon "matrix" "composite" $1500, N/A for NP

29

structures or laminates, as follows (see

List of Items Controlled).

2A001

Anti-friction bearings and bearing

systems, as follows, (see List of Items

Controlled) and components therefor. $3000, N/A for MT

2B003

"Numerically controlled" or manual

machine tools, and specially designed

components, controls and accessories

therefor, specially designed for the

shaving, finishing, grinding or honing of

hardened (Rc = 40 or more) spur, helical

and double-helical gears with a pitch

diameter exceeding 1,250 mm and a face

width of 15% of pitch diameter or larger

finished to a quality of AGMA 14 or better

(equivalent to ISO 1328 class 3). $5000

2B005

Equipment specially designed for the

deposition, processing and in-process

control of inorganic overlays, coatings

and surface modifications, as follows, for

non-electronic substrates, by processes

shown in the Table and associated Notes

following 2E003.f, and specially designed

automated handling, positioning,

manipulation and control components

therefor. $1000

2B007

"Robots" having any of the following

characteristics described in the List of

Items Controlled and specially designed

controllers and "end-effectors" therefor.

$5000, except

2B007.b and .c

3A001

Electronic components and specially

designed components therefor, as follows

(see List of Items Controlled).

N/A for MT or NP. Yes

for: $1500: 3A001.c;

$3000: 3A001.b.1,

b.2, b.3, b.9, .d, .e, .f,

and .g; $5000:

30

3A001.a (except a.1.a

and a.5.a when

controlled for MT), and

.b.4 to b.7

3A002

General purpose electronic equipment

and accessories therefor, as follows (see

List of Items Controlled).

$3000: 3A002.a, .e, .f,

.g; $5000: 3A002.b to

.d

3B001

Equipment for the manufacturing of

semiconductor devices or materials, as

follows (see List of Items Controlled) and

specially designed components and

accessories therefor. $500

3B002

Test equipment, specially designed for

testing finished or unfinished

semiconductor devices, as follows (see

List of Items Controlled), and specially

designed components and accessories

therefor. $500

3C001

Hetero-epitaxial materials consisting of a

"substrate" having stacked epitaxially

grown multiple layers of any of the

following (see List of Items Controlled). $3000

3C002

Resist materials as follows (see List of

Items Controlled) and "substrates" coated

with the following resists. $3000

3C003

Organo-inorganic compounds, as follows

(see List of Items Controlled). $3000

3C004

Hydrides of phosphorus, arsenic or

antimony, having a purity better than

99.999%, even diluted in inert gases or

hydrogen. $3000

3C005

Silicon carbide (SiC), gallium nitride

(GaN), aluminum nitride (AlN) or

aluminum gallium nitride (AlGaN)

"substrates", or ingots, boules, or other

preforms of those materials, having $3000

31

resistivities greater than 10,000 ohm-cm

at 20 C.

3C006

"Substrates" specified in 3C005 with at

least one epitaxial layer of silicon carbide,

gallium nitride, aluminum nitride or

aluminum gallium nitride. $3000

4A001

Electronic computers and related

equipment, and "electronic assemblies"

and specially designed components

therefor.

$5000 for 4A001.a;

N/A for MT and

4A001.b

4A003

"Digital computers", "electronic

assemblies", and related equipment

therefor, as follows, and specially

designed components therefor.

$5000; N/A for

4A003.b and .c.

4A004

Computers, as follows (see List of Items

Controlled) and specially designed related

equipment, "electronic assemblies" and

components therefor. $5000

5A001

Telecommunications systems, equipment,

components and accessories, as follows

(see List of Items Controlled).

N/A for 5A001.a, b.5,

.e; $5000 for

5A001b.1, b.2, b.3,

b.6, and .d $3000 for

5A001.c

5B001

Telecommunication test, inspection and

production equipment, as follows (See

List of Items Controlled). $5000

6A003 Cameras


6A003.a.2 through

a.6, b.1, b.3 and b.4

6A004 Optics. $3000

6A005

"Lasers" (other than those described in

0B001.g.5 or .h.6), components and

optical equipment, as follows (see List of

Items Controlled).

N/A for NP items

$3000 for all other

items

32

6A006

"Magnetometers", "magnetic

gradiometers", "intrinsic magnetic

gradiometers", underwater electric field

sensors, and "compensation systems",

and specially designed components

therefor, as follows (see List of Items

Controlled).

$1500, N/A for

6A006.a.1;

"Magnetometers" and

subsysteem defined in

A006.a.2 using

optically pumped or

nuclear precession

(proton/Overhauser)

having a "noise level"

(sensitivity) lower

(better) than 2 pT rms

per square root Hz;

and 6A006.d.

6A007

Gravity meters (gravimeters) and gravity

gradiometers, as follows (see List of

Items Controlled). $3000; N/A for MT

6A008

Radar systems, equipment and

assemblies having any of the following


Controlled), and specially designed

components therefor.

$5000; N/A for MT and

for 6A008.j.1 and

6A008.l.3

6B004

Optical equipment, as follows (see List of

Items Controlled). $5000

6B007

Equipment to produce, align and calibrate

land-based gravity meters with a static

accuracy of better than 0.1 mgal. $5000

6C002

Optical sensor materials, as follows (see

List of Items Controlled). $3000

6C005

Synthetic crystalline "laser" host material

in unfinished form, as follows (see List of

Items Controlled). $1500

8B001

Water tunnels, having a background noise

of less than 100 dB (reference 1 ÊPa, 1

Hz) in the frequency range from 0 to 500

Hz, designed for measuring acoustic fields

generated by a hydro-flow around $3000

33

propulsion system models.

9A002

Marine gas turbine engines with an ISO

standard continuous power rating of

24,245 kW or more and a specific fuel

consumption not exceeding 0.219 kg/kWh

in the power range from 35 to 100%, and

specially designer assemblies and

components therefor. $5000

9A003

Specially designed assemblies and

components, incorporating any of the

"technologies" controlled by 9E003.a, for

gas turbine engine propulsion systems, as


9B001

Specially designed equipment, tooling and

fixtures, as follows (see List of Items

Controlled), for manufacturing gas turbine

blades, vanes or tip shroud castings.


MT

9B002

On-line (real time) control systems,

instrumentation (including sensors) or

automated data acquisition and

processing equipment, specially designed

for the "development" of gas turbine

engines, assemblies or components

incorporating- "technologies" controlled

by 9E003.a.


MT

9B003

Equipment specially designed for the

"production" or test of gas turbine brush

seals designed to operate at tip speeds

exceeding 335 m/s, and temperatures in

excess of 773 K (500øC), and specially

designed components or accessories

therefor.


MT

34

9B004

Tools, dies or fixtures for the solid state

joining of "superalloy", titanium or

intermetallic airfoil-to-disk combinations

described in 9E003.a.3 or 9E003.a.6 for

gas turbines.


MT

9B006

Acoustic vibration test equipement

capable of producing sound pressure

levels of 160 Db or more (referenced to

20 Pa) with a rated output of 4 kW or

more at a test cell temperature exceeding

1,273 K (1,000øC), and specially

designed quartz heaters therefor. $3000

9B008

Transducers specially designed for the

direct measurement of the wall skin

friction of the test flow with a stagnation

temperature exceeding 833 K (560øC). $5000

9B009

Tooling specially designed for producing

turbine engine powder metallurgy rotor

components capable of operating at

stress levels of 60% of ultimate tensie

strength (UTS) or more and metal

temperatures of 873 K (600øC) or more. $5000

The United States differentiates in maximum selling price of the commodities, which is

not the case in EU COM Proposal 5011/09 (the value of the order is fixed at € 5000).

There is a slight difference in the way of defining the actual selling price of the

commodities. The United States uses a definition that allows less interpretation. In the

United States, “a net value is defined as the actual selling price of the commodities that

are included in the same order and are controlled under the same entry on the

Commerce Control List”81, less shipping charges, “or the current market price of the

commodities to the same type of purchaser in the United States, whichever is the

larger.”82 A single shipment is defined as “all commodities moving at the same time from

one exporter to one consignee or intermediate consignee on the same exporting carrier

even though these commodities will be forwarded to one or more ultimate consignees.

81 Export Administration Regulations, Part 740 - License Exceptions, § 740.3. 82 Ibid.

35

Commodities being transported in this manner will be treated as a single shipment”83

(thus, orders may not be split to meet the applicable LVS dollar limits84) “even if the

commodities represent more than one order or are in separate containers.”85 Thus, an

LVS shipment may include more than one eligible order.

In EC COM Proposal 5011/09, a ‘low-value shipment’ “means items which are comprised

in a single export order.”86 It does not include a provision explaining that an order can

control commodities under more than one of the authorized list of items.

1.2. Similarities and differences in terms of geographical range

License Exception LVS is available for 17387 countries (annex 2).88 License Exception LVS

is not available for 23 countries due to national security reasons89 and five countries that

are classified as “terrorist supporting countries”90. There is an overlap in both lists: the

export or reexport to North Korea is controlled for national security reasons and is listed

as a “terrorist supporting country”. Cuba is listed as “terrorist supporting country” and is

under unilateral embargo from the US.91 The export authorization in EC COM Proposal

5011/09 is only valid to six destinations: Argentina, Brazil, Iceland, South Africa, South

Korea and Turkey.92 The United States authorizes License Exception LVS to those

destinations.

1.3. Summary

The United States authorizes License Exception LVS for 68 ECCN items (headers), of

which five items are listed on the Wassenaar Munition List; and of which three ECCN

items are controlled for unilateral purposes. EU COM Proposal 5011/09 authorizes more

than 190 items. There is a similarity between more than 50 items.

83 Ibid. 84 This is similar with the procedures in EC COM 5011/09, annex IIb, Part 3.(6). 85 Export Administration Regulations, Part 740 - License Exceptions, § 740.3. EC COM Proposal 5011/09, annex IIb does not include a definition of ‘a single export order’, as included in Part 3.(5). 86 EC COM Proposal 5011/09, annex IIb, Part 3.(5). 87 There are destinations that are listed in the COM EU Proposal 5011/09 but not in the EAR License Exceptions list. Annex 1 provides an overview of those destinations. 88 Export Administration Regulations, Part 740 - License Exceptions, § 740.3. The countries are lised in Group B of Export Administration Regulations, Part 740Spir - Supplement No. 1 to Part 740, Country Groups. 89 Export Administration Regulations, Part 740Spir - Supplement No. 1 to Part 740, Country Groups, Group D:1: Albania, Armenia, Azerbaijan, Belarus, Burma, Cambodia, China, Georgia, Iraq, Kazachstan, North Korea, Kyrgyzstan, Laos, Libya, Macau, Moldova, Mongolia, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan and Vietnam. 90 Ibid, Group E:1 includes: Cuba, Iran, North Korea, Sudan and Syria. 91 Ibid, Group E:2 includes: Cuba. 92 EC COM 5011/09, annex IIb, Part 2.

36

The United States differentiates in maximum selling price of the commodities, which is

not the case in EU COM Proposal 5011/09. In the Proposal the value of the order is fixed

at € 5000.

Both the Export Authorisation Regulations and EC COM Proposal 2011/09 defines the

actual selling price of the commodities but on a different way. In the United States, the

definition is much more elaborated, which leaves less interpretation for the exporter.

In the United States, the License Exception LVS is available for 173 countries. The export

authorization in EC COM Proposal 5011/09 is valid to six destinations.

2. Computers


The United States authorizes License Exception APP for computers, including electronic

assemblies ans specially designed components (table 2) and technology and software.

The EC COM Proposal 5011/09, annex IIe authorisation covers computers, including

electronic assemblies and specially designed components (table 2). The United States’

EAR also specifies authorization procedures and restrictions for technology and software.

Table 2: authorization of computers and related equipment.

EU COM Proposal 5011/09,

export or reexport93 of

Export Administration Regulations,

Part 740.7, export94 of items,

separately or as part of a system, of

3A001.a.5

No License Exception authorization for

3A001.a.5

4A003.a., APP max 0,8 WT. Spare

parts, exclusively specified in

4A003.a. (condition: APP max 0,8

WT)

4A003.a. In general, in the United States

no license is required for computers in

4A003 with an Adjusted Peak Performance

(APP) not exceeding 0.75 Weighted

TeraFLOPS (WT). This is to all

93 Commodities can be reexported to an ultimate destination in a country that is a member state of the European Community and is mentioned in part 2 of annex IIb of the EC COM proposal 5011/09. EC COM Proposal 5011/09, annex IIe, Part 3, 2(2). 94 Computers and software eligible for License Exception APP may not be reexported or transferred (in country) without prior authorization from BIS, i.e., a license, a permissive reexport, another License Exception, or "No License Required". Export Administration Regulations, Part 740 - License Exceptions, § 740.7.(b).(3).

37

destinations, except to Cuba, Iran, North

Korea, Sudan and Syria95 and except

certain transfers to Iraq.96

4A003.b., APP max 0,8 WT. Spare

parts, exclusively specified in

4A003.b. (condition: APP max 0,8

WT)

4A003.b.

Note on Adjusted Peak Performance: see

above.

4A003.c., APP of the aggregation

greater than 0,8 WT is not

exceeded. Spare parts, exclusively

specified in 4A003.c. (condition:

APP max 0,8 WT)

4A003.c. In general, in the United States

no license is required for "electronic

assemblies" described in 4A003.c that are

not capable of exceeding an APP of 0.75

WT in aggregation. This is to all

destinations, except to Cuba, Iran, North

Korea, Sudan and Syria97 and except

certain transfers to Iraq.98

4A003.e

No License Exception authorization for

4A003.e.

4A003.g.

4A003.g. Related equipment controlled

under ECCN 4A003.g may not be exported

or reexported under this License Exception

when exported or reexported separately

from eligible computers authorized under

this License Exception.99

Contrary to EC COM Proposal 5011/09, the EAR’ authorization on License Exception APP

does not formulate a maximum “Adjusted Peak performance” (APP peak).100 It, however,

stipulates that “an exporter may not use this License Exception to export or reexport

items that knowingly will be used to enhance the APP beyond the eligibility limit allowed

to the exporters country of destination.”101

95 Group E of Export Administration Regulations, Part 740Spir - Supplement No. 1 to Part 740, Country Groups. 96 Export Administration Regulations, Part 774 - Part 774 - The Commerce Control List, Supplement No. 1 to Part 774, Category 4, header item 4A003, Note 1. 97 Group E of Export Administration Regulations, Part 740Spir - Supplement No. 1 to Part 740, Country Groups. 98 Export Administration Regulations, Part 774 - Part 774 - The Commerce Control List, Supplement No. 1 to Part 774, Category 4, header item 4A003, Note 1. 99 Export Administration Regulations, Part 740 - License Exceptions, § 740.7.(b).(1). 100 Except for deemed export of technology and software to foreign nations. 101 Export Administration Regulations, Part 740 - License Exceptions, § 740.7.(b).(4).

38


License Exception APP is available for the export of all computers to 116 destinations.

The authorization in EU COM Proposal 5011/09, annex IIe is valid in 89 destinations.102

EU COM Proposal 5011/09, annex IIe authorizes a Community General Export

Authorization for the export of computers to 21 destinations, which would require a

license in the United States due to national security or foreign policy reasons:

� Countries that are listed in a United States’ group of destinations that are under

control of license requirement for foreign policy (nuclear, chemical and biological

and missle technology related) reasons: Bahrain, Egypt, India, Jordan, Kuwait,

Oman, Qatar, Saudi Arabia, United Arab Emirates .103


control of license requirement for national security reasons: Moldova, Mongolia,

Russia and Ukraine.104


control of license requirement for foreign policy reasons (the specific foreign

policy reasons towards these countries could not be identified by the author):

Algeria, Andorra, Comores, Croatia, Djibouti, Morocco, Tunisia, Vanuatu.

The United States authorizes a License Exception APP for the export of computers to 47

destinations, which would require a license in the European Member States: Australia,

Bangladesh, Burkina Faso, Burundi, Central African Republic, Chad, Colombia, Cote

d'Ivoire, Democratic Republic Congo, East Timor, Eritrea, Ethiopia, Guinea, Haiti,

Indonesia, Jamaica, Japan, Kenya, Kiribati, Liberia, Marshall Islands, Micronesia,

Mozambique, Nauru, Nepal, New Zealand, Nigeria, Norway, Palau, Paraguay, Rwanda, St.

Lucia, Sierra Leone, Somalia, Sri Lanka, Switzerland, Taiwan, Tanzania, Thailand, Tonga,

Tuvalu, Uganda, Vatican City, Venezuela, Western Sahara, Zambia, Zimbabwe.

2.3. Summary

The United States authorizes License Exception APP for computers, including electronic

assemblies ans specially designed components and technology and software. The EC

102 See footnote 84. 103 Export Administration Regulations, Part 740Spir - Supplement No. 1 to Part 740, Country Groups, Group D:2, D:3 and D:4. 104 Ibid, Group D:1.

39

COM Proposal 5011/09, annex IIe authorisation covers computers, including electronic

assemblies ans specially designed components. The United States’ EAR also specifies

authorization procedures and restrictions for technology and software. The EAR’ list is

comparable to the one in EC COM Proposal 5011/09 but differences are recorded. The

United States does not allow the export of 3A001.a.5 and 4A003.e under its License

Exception APP. And related equipment controlled under item 4A003.g may not be

exported or reexported under this License Exception when exported or reexported

separately from eligible computers authorized under this License Exception. Contrary to

EC COM Proposal 5011/09, the EAR’ authorization on License Exception APP does not

formulate a maximum “Adjusted Peak performance” (APP peak). It stipulates that “an

exporter may not use this License Exception to export or reexport items that knowingly

will be used to enhance the APP beyond the eligibility limit allowed to the exporters

country of destination.”105

The License Exception APP is available for the export of all computers to 116

destinations. The authorization in EU COM Proposal 5011/09, annex IIe is only valid in 89

destinations. EU COM Proposal 5011/09, annex IIe authorizes a Community General

Export Authorization for the export of computers to 21 destinations, which would require

a license in the United States due to national security or foreign policy reasons.

3. Temporary imports, exports, and reexports (TMP)


The Community General Export Authorization (CGEA) in EC COM Proposal 5011/09,

annex IId allows the temporary export of dual-use items for exhibition or fair. The

proposal lists more than 100 excluded items106. Under the EAR’ License Exception TMP,

the export or reexport is allowed for all commodities and software in the Commerce

Control List, except for encrypted items controlled under ECCN 5E002.107

Under License Exception TMP, “the export or reexport of commodities and software is

allowed for exhibition or demonstration provided that the exporter maintains ownership

of the commodities and software while they are abroad and provided that the exporter,

105 Export Administration Regulations, Part 740 - License Exceptions, § 740.7.(b).(4). 106 The items that are excluded are to the CGEA: all items in categories D and E; all items specified in Annex IV to Regulation 1334/2000; and a list of 27 items (1A002a, 1B001, 1C002.b.4, 1C010, 1C012.a, 1C227, 1C228, 1C229, 1C230, 1C231, 1C236, 1C237, 1C240, 1C350, 1C450, 0C001, 0C002, 0D001, 0E001, 1A102, 1C351, 1C352, 1C353, 1C354, 7E104, 9A009.a and 9A117). 107 Export Administration Regulations, Part 740 - License Exceptions, § 740.9.(a). and § 740.9.(a).3.(ii).(B).

40

an employee of the exporter, or the exporter's designated sales representative retains

"effective control"108 over the commodities and software while they are abroad.”109 The

commodities and software “may not be used for their intended purpose while abroad,

except to the minimum extent required for effective demonstration.”110 A CGEA in EC

COM 5011/09, annex IId is not subject to similar restrictions and conditions.

The commodities and software “may not be exhibited or demonstrated at any one site

more than 120 days after installation and debugging, unless authorized by BIS.”111 An

authorization under EC COM Proposal 5011/09, Annex IId is allowed for no longer than

three months.112 However, “before or after an exhibition or demonstration, pending

movement to another site, return to the United States or the foreign reexporter, or BIS

approval for other disposition, the commodities and software may be placed in a bonded

warehouse or a storage facility provided that the exporter retains effective control over

their disposition.”113 The export documentation for this type of transaction “must show

the exporter as ultimate consignee, in care of the person who will have control over the

commodities and software abroad.”114

EAR’ License Exception TMP lists various additional restrictions. No item may be exported

or reexported if115:

� an order to acquire the item has been received before shipment;

� the exporter has prior knowledge that the item will stay abroad beyond the terms

of this License Exception; or

� the item is for lease or rental abroad.

108 Effective control means that the exporter maintains effective control over an item when it either retain physical possession of the item, or secure the item in such an environment as a hotel safe, a bonded warehouse, or a locked or guarded exhibition facility. Export Administration Regulations, Part 772 – Definitions of Terms, § 772.1. 109 Export Administration Regulations, Part 740 - License Exceptions, § 740.9.(a).2.(iii). Footnode added in quote. 110 Ibid, § 740.9.(a).2.(iii). 111 Ibid, § 740.9.(a).2.(iii). All items exported or reexported under these provisions must, if not consumed or destroyed in the normal course of authorized temporary use abroad, be returned as soon as practicable but no later than one year after the date of export or reexport, to the United States or other country from which the items were so exported or reexported, or shall be disposed of or retained in one of the following ways: (1) the exporter or reexporter must request authorization by submitting a license application to BIS, who will advise the exporter of its decision. (2) the use of an outstanding license provided that the outstanding license authorizes direct shipment of the same items to the same new ultimate consignee in the new country of destination. (3) Authorization to retain item abroad beyond one year. Export Administration Regulations, Part 740 - License Exceptions, § 740.9.(a).4.(i), (ii), (iii). 112 EC COM Proposal 5011/09, Annex IId, Part 1.(2). 113 Export Administration Regulations, Part 740 - License Exceptions, § 740.9.(a).2.(iii). 114 Ibid, § 740.9.(a).2.(iii). 115 Ibid, § 740.9.(a).3.(iii)(A)-(C).

41

A CGEA in EC COM 5011/09, annex IId is not subject to similar restrictions.


Under this provision, the export or reexport of commodities and software is allowed for

exhibition or demonstration in all countries, except Cuba, Iran, North Korea, Sudan and

Syria.116 The authorization in EC COM Proposal 5011/09 is only allowed for temporary

export for exhibitions and fair in 28117 destinations.

Commodities and software lawfully exported from the United States may be reexported

to a new country or countries of destination other than Sudan or Cuba provided its terms

and conditions are met and the commodities and software are returned to the country

from which the reexport occurred.118 EC COM Proposal 5011/09 has no specific condition

or restriction on reexport.

Items that will be used either directly or indirectly in any sensitive nuclear activity119 may

not be exported or reexported to any destination under this License Exception.120 This

provision does not apply for Australia, Belgium, Canada, Denmark, France, Germany,

Greece, Italy, Japan, Luxembourg, Netherlands, Norway, Portugal, Spain, Turkey, United

Kingdom, United States, Iceland, or New Zealand.121

3.3. Summary

The CGEA in EC COM Proposal 5011/09, IId allows the temporary export of dual-use

items for exhibition or fair. The proposal lists more than 100 excluded items. Under the

116 The five countries are classified as “Terrorist Supporting Countries”. Part 740Spir - Supplement No. 1 to Part 740, Country Groups, Group E:1. 117 See footnote 84. 118 Export Administration Regulations, Part 740 - License Exceptions, § 740.9.(a).5.(i). 119 This relates to: (1) Nuclear explosive activities, including research on or development, design, manufacture, construction, testing or maintenance of any nuclear explosive device, or components or subsystems of such a device. (2) Activities including research on, or development, design, manufacture, construction, operation, or maintenance of any nuclear reactor, critical facility, facility for the fabrication of nuclear fuel, facility for the conversion of nuclear material from one chemical form to another, or separate storage installation, where there is no obligation to accept International Atomic Energy Agency (IAEA) safeguards at the relevant facility or installation when it contains any source or special fissionable material (regardless of whether or not it contains such material at the time of export), or where any such obligation is not met. (3 Safeguarded and unsafeguarded nuclear fuel cycle activities, including research on or development, design, manufacture, construction, operation or maintenance of any of the following facilities, or components for such facilities: (i) Facilities for the chemical processing of irradiated special nuclear or source material; (ii) Facilities for the production of heavy water; (iii) Facilities for the separation of isotopes of source and special nuclear material; or (iv) Facilities for the fabrication of nuclear reactor fuel containing plutonium. Export Administration Regulations, Part 744 – Control Policy: end-user and end-use based, § 744.2. 120 Export Administration Regulations, Part 740 - License Exceptions, § 740.9.(a).(3).(ii).(A). 121 Ibid.

42

EAR’ License Exception TMP, the export or reexport is allowed for all commodities and

software in the Commerce Control List, except for encrypted items controlled under ECCN

5E002.

In the United States, the export or reexport of commodities and software is allowed for

exhibition or demonstration in all countries, except Cuba, Iran, North Korea, Sudan and

Syria. The authorization in EC COM Proposal 5011/09 is only allowed for temporary

export for exhibitions and fair in 28 destinations.

4. Servicing and replacement of parts and equipment (RPL)


The CGEA in EC COM Proposal 5011/09, anndx IIc allows the export of dual-use items for

export after repair or replacement:

� where the items “were imported into the European Community territory for the

purpose of maintenance or repair, and are exported to the country of

consignment without any changes to their original characteristics”122;

� where the items “are exported to the country of consignment in exchange for

items of the same quality and number which were re-imported into the European

Community territory for repair or replacement under warranty. “123

The proposal lists more than 100 items that are excluded.124

Under EAR’ License Exception RPL, the export or reexport is associated with:

1. one-for-one replacement parts for previously exported equipment125. The term

replacement parts “means parts needed for the immediate repair of equipment,

including replacement of defective or worn parts.”126 Parts “may be exported only

to replace, on a one-for-one basis, parts contained in commodities that were:

122 EC COM Proposal 5011/09, Annex IIc, Part 1, 1-1.(a). 123 Ibid, Part 1, 1-1.(b). 124 The items that are excluded are to the CGEA: all items in categories D and E; all items specified in Annex IV to Regulation 1334/2000; and a list of 33 items (1A002a, 1C012.a, 1C227, 1C228, 1C229, 1C230, 1C231, 1C236, 1C237, 1C240, 1C350, 1C450, 5A001b5, 5B002, 6A001a2a1, 6A001a2a5, 6A002a1c, 6A00813, 8A001b, 8A001d, 9A011, 0C001, 0C002, 0D001, 0E001, 1A102, 1C351, 1C352, 1C353, 1C354, 7E104, 9A009.a and 9A117). 125 Export Administration Regulations, Part 740 - License Exceptions, § 740.10.(a). 126 Ibid, § 740.10.(a).(2).(i). It includes subassemblies but does not include test instruments or operating supplies. The term "subassembly" means a number of components assembled to perform a specific function or functions within a commodity. This definition does not include major subsystems such as those composed of a number of subassemblies.

43

legally exported from the United States; legally reexported; or made in a foreign

country incorporating authorized U.S.- origin parts.”127 Accordingly, the export of

replacement parts “may be done only by the party who originally exported or

reexported the commodity to be repaired, or by a party that has confirmed the

appropriate authority for the original transaction.”128

2. servicing129. EAR’ License Exception RPL authorizes the export and reexport of

items that were returned to the United States for servicing and for the

replacement of defective or unacceptable U.S.-origin commodities and software.

Servicing means “inspection, testing, calibration or repair, including overhaul and

reconditioning.”130 When “the serviced commodity or software is returned, it may

include any replacement or rebuilt parts necessary to its repair and may be

accompanied by any spare part, tool, accessory, or other item that was sent with

it for servicing. “131

3. replacement132. Subject to the conditions, “commodities or software may be

exported or reexported to replace defective or otherwise unusable (e.g.,

erroneously supplied) items when they have been previously exported or

reexported in its present form under a license or authorization granted by BIS and

the commodity or software is not worn out from normal use, nor is to be exported

to be held in stock abroad as spare equipment for future use.”133

The export activities may not improve or change the basic design characteristics, e.g., as

to accuracy, capability, performance or productivity, of the equipment.134

Contrary to EC COM Proposal 5011/09, the EAR’ License Exceptions does not include a

list of allowed or excluded products. It provides a set of conditions and restrictions.

Additionally, License Exception RPL’ eligibility is limited by country.

127 Ibid, § 740.10.(a).(2).(ii). In accordance with § 740.10.(a).(3).(i)., no replacement parts may be exported to repair a commodity exported under a license if that license included a condition that any subsequent replacement parts must be exported only under a license. And in accordance with § 740.10.(a).(3).(ii)., no parts may be exported to be held abroad as spare parts or equipment for future use. Replacement parts may be exported to replace spare parts that were authorized to accompany the export of equipment, as those spare parts are utilized in the repair of the equipment. This will allow maintenance of the stock of spares at a consistent level as parts are used. 128 Ibid, § 740.10.(a).(2).(ii). 129 Ibid, § 740.10.(b).(2). 130 Ibid, § 740.10.(b).(2).(i). 131 Ibid, § 740.10.(b).(2).(ii). 132 Ibid, § 740.10.(b).(3). 133 Ibid, § 740.10.(b).(3).(i).(A)-(B). 134 Ibid, § 740.10.(a).(2).(i).; § 740.10.(b).(2).(i).; § 740.10.(b).(3).(i).(C).

44


The authorization in EC COM Proposal 5011/09 is limited to the export to 93

destinations135.

In the United States, the export or reexport associated with one-for-one replacement

parts for previously exported equipment is allowed to all countries. This provision does

not apply for exports to Cuba, Iran, North Korea, Sudan and Syria136 if the commodity to

be repaired is:

� an aircraft or a national security controlled commodity137,

� explosives detection equipment controlled under ECCN 2A983 or related software

controlled under ECCN 2D983. These two items are controlled for unilateral

reasons.

Under EAR’s License Exception RPL, no parts may be exported to any destination, if the

item is to be incorporated into or used in nuclear weapons, nuclear explosive devices,

nuclear testing related to activities, the chemical processing of irradiated special nuclear

or source material, the production of heavy water, the separation of isotopes of source

and special nuclear materials, or the fabrication of nuclear reactor fuel containing

plutonium.138 This restriction does not apply for exports to Australia, Austria, Belgium,

Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy (includes

San Marino and Holy See), Japan, Luxembourg, Netherlands, New Zealand, Norway,

Portugal, Spain, Sweden, Turkey or United Kingdom.139 EC COM Proposal 5011/09, annex

IIc does not allow a CGEA for nuclear end-use to any country.140

Parts exported from the United States may be reexported to a new country of

destination, provided that the various restrictions are met.141

135 See footnote 84. 136 The five countries are classified as “Terrorist Supporting Countries”. Part 740Spir - Supplement No. 1 to Part 740, Country Groups, Group E:1. 137 Export Administration Regulations, Part 740 - License Exceptions, § 740.10.(a).(3).(iv). 138 Ibid, § 740.10.(a).(3).(iii). 139 These destinations are included in Export Administration Regulations, Supplement No. 3 to part 744 (Countries Not Subject to Certain Nuclear End- Use Restrictions in §744.2(a)). 140 EC COM Proposal 5011/09, annx IIc, Part 3. No (1).(1).(a)., Part 3 No. 1.(2). 141 Export Administration Regulations, Part 740 - License Exceptions, § 740.10.(a).(4).

45

Repaired commodity and software (items that were returned to the United States for

servicing and the replacement of defective or unacceptable U.S.-origin commodities and

software) is allowed to all countries, except:

� No repaired commodity or software may be exported or reexported to Cuba, Iran,

North Korea, Sudan or Syria142.143

� Commodities and software legally exported or reexported to a consignee in

Albania, Armenia, Azerbaijan, Belarus, Burma, Cambodia, Georgia, Iraq,

Kazachstan, North Korea, Kyrgyzstan, Laos, Libya, Macau, Moldova, Mongolia,

Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan and Vietnam144 that are

sent to the United States or a foreign party for servicing may be returned to the

country from which it was sent, provided that both of the following conditions are

met:

� The exporter “making the shipment is the same person or firm to whom

the original license was issued” 145; and

� The “end-use and the end-user of the serviced commodities or software

and other particulars of the transaction, as set forth in the application and

supporting documentation that formed the basis for issuance of the license

have not changed.”146

The export or reexport of commodities or software for the replacement of defective or

otherwise unusable (e.g., erroneously supplied) items is allowed to all countries, except

to Cuba, Iran, North Korea, Sudan or Syria147 or to any other destination in order to

replace defective or otherwise unusable equipment owned or controlled by, or leased or

chartered to, a national of any of those countries. 148

4.3. Summary

The CGEA in EC COM Proposal 5011/09, IIc allows the export of dual-use items for

export after repair or replacement:

142 The five countries are classified as “Terrorist Supporting Countries”. Part 740Spir - Supplement No. 1 to Part 740, Country Groups, Group E:1. 143 Export Administration Regulations, Part 740 - License Exceptions, § 740.10.(b).(2).(iv). 144 All the destinations are listed in Export Administration Regulations, Part 740Spir - Supplement No. 1 to Part 740, Country Groups, Group D:1. 145 Export Administration Regulations, Part 740 - License Exceptions, § 740.10.(b).(2).(iii).(A). 146 Ibid, § 740.10.(b).(2).(iii).(B). 147 The five countries are classified as “Terrorist Supporting Countries”. Part 740Spir - Supplement No. 1 to Part 740, Country Groups, Group E:1. 148 Export Administration Regulations, Part 740 - License Exceptions, § 740.10.(b).(3).(i).(D).

46

� where the items were imported into the European Community territory for the

purpose of maintenance or repair, and are exported to the country of

consignment without any changes to their original characteristics;

� where the items are exported to the country of consignment in exchange for

items of the same quality and number which were re-imported into the European

Community territory for repair or replacement under warranty.

The proposal lists more than 100 items that are excluded.

Under EAR’ License Exception RPL, the export or reexport is associated with one-for-one

replacement parts for previously exported equipment, for servicing and for replacement.

The EAR’ License Exception does not include a list of allowed or excluded products. It,

however, stipulates conditions and restrictions. Additionally, License Exception RPL’

eligibility is limited by country.

The authorization in EC COM Proposal 5011/09 is limited to the export of certain items to

93 destinations. In the United States, the export or reexport towards individual countries

vary depending on type of export. In general terms, the export is allowed to all

countries, except to Cuba, Iran, North Korea, Sudan and Syria.. The export to those

countries depends on its reason of export.

5. Encryption commodities, software and technology (ENC)


The following table lists the items that are valid under EC COM Proposal 5011/09 and

United States’ EAR, Part License Exception ENC.

EU COM Proposal 5011/09,

export or reexport149 of

Export Administration Regulations,

Part 740.17, export or reexport150 of

Items of Category 5 Part l: (a)

Items, including specially

designed or developed No items of Category 5, Part I

149 Commodities can be reexported to an ultimate destination in a country which is member state of the European Community and is mentioned in part 2, annex IIf of the EC COM proposal 5011/09. EC COM Proposal 5011/09, annex IIf, Part 3, 3.(2). 150 Export Administration Regulations, Part 740 - License Exceptions, § 740.17.(c).

47

components and accessories

therefor specified in 5A001b No 2

and 5A001c and d.

(b) Items specified in 5B001 and

5D001, where test, inspection and

production equipment is

concerned and software for items

mentioned under a).

Technology controlled by 5E001a,

where required for the

installation, operation,

maintenance or repair of items

specified under 1 and intended for

the same final consignee. No such items

Items, including specially

designed or developed

components and accessories

therefor specified in Category 5

Part 2 A to D (Information

Security), as follows: (a) items

specified in the following entries

unless their cryptographic

functions have been designed or

modified for government end-

users

within the European Community:

5A002a1; software in entry

5D002c1 having the

characteristics, or performing or

simulating the functions, of

equipment in entry

5A002a1; (b) equipment specified

in 5B002 for items referred to

under a); (c) software as part of

equipment whose features or

functions are specified under b).

Items that are classified under 5A002.a.1,

a.2, a.5, a.6 or a.9, 5B002, 5D002, and

technology that is classified under ECCN

5E002.

48

Technology for the use of goods

specified in the items as explained

above.

The United States makes in its License Exception ENC authorization a distinction between

prior and no-prior review post reporting requirement procedures (see above), wich is

based on the product and the end-user. This is not the case in EC COM Proposal

5011/09.


The export authorization in EC COM Proposal 5011/09 is valid for seven countries:

Argentina, Croatia, Russia, South Africa, South Korea, Turkey and Ukraine. The export or

reexport in United States’ License Exception ENC is valid to all destinations, except to

Cuba, Iran, North Korea, Sudan or Syria151. Release of source code or technology is valid

to any national in Cuba, Iran, North Korea, Sudan or Syria.152

5.3. Summary

The items that are valid under EC COM Proposal 5011/09 and United States’ EAR, Part

License Exception ENC vary. EC COM Proposal 5011/09 allows the export of items which

is not included under EAR’ License Exception ENC.

The export authorization in EC COM Proposal 5011/09 is valid for seven countries. The

export or reexport in United States’ License Exception ENC is valid to all destinations,

except to Cuba, Iran, North Korea, Sudan or Syria. Release of source code or technology

is valid to any national in Cuba, Iran, North Korea, Sudan or Syria.

151 The five countries are classified as “Terrorist Supporting Countries”. Part 740Spir - Supplement No. 1 to Part 740, Country Groups, Group E:1. 152 Export Administration Regulations, Part 740 - License Exceptions, § 740.17.

49

GENERAL CONCLUSIONS

In the United States, a License Exception is an authorization that allows an exporter to

export or reexport, under stated conditions, items subject to the Export Administration

Regulations that would otherwise require a license.

EAR’ License Exceptions differs from EC COM Proposal 5011/09 in terms of products.

Those can be divided in two groups:

� Contrary to the CGEAs in EC Proposal 5011/09, only some EAR’ License

Exceptions list items and commodities (LVS, APP and ENC). Both lists include

similar items but differences are noticed.

� Not all EAR’ License Exceptions lists specific products (TMP and RPL). Instead, the

EAR’ License Exceptions list a set of conditions and restrictions.

EAR’ License Exceptions differs from EC COM Proposal 5011/09 in terms of geographical

range. On first sight, a License Exception is usable to more countries. This does not

mean that the United States’s procedures are more flexible. The United States has its

policy towards indivivual countries motivated and regulated by law. It is divided into

three main categories: for national security reasons, for foreign policy reasons and for

countries under (multilaterally or unilaterally defined) embargo.

Restrictions and conditions and included in the United States’ regulations as well as in the

European Commission’s proposal in order to control the export of dual-use items for

reasons of end-use and end-users. United States’ EAR’ policies are much more

elaborated than those in EC COM 5011/09. Each of CGEAs in EC COM Proposal 5011/09

includes an information duty for the exporter. This is also the case in the United States

but the requirements are less specific. In the United States, the conditions and

restrictions are divided in two categories: one list of general restrictions and conditions

and one set of particular conditions and restrictions per License Exception. The

restrictions depend strongly on the end-use of the items and commodities, the end-users

and the activities.

EAR’ License Exceptions differs from EC COM Proposal 5011/09 in terms of destinations.

The United States allows the export to substantial more countries but this does not imply

that the dual-use control procedures in the United States are less stringent. The United

50

States has various procedures in place in order to limit the export of dual-use items and

commodities. As explained earlier, the United States motivates its policy towards

indivivual countries in general terms: for national security reasons, for foreign policy

reasons and for countries under (multilaterally or unilaterally defined) embargo. The

reasons behind its motivation towards each of the individual countries are, however, not

transparent. For instance, EU COM Proposal 5011/09, annex IIe authorizes a Community

General Export Authorization for the export of computers to 21 destinations, which would

require a license in the United States due to national security or foreign policy reasons.

The United States does not motivate its reasons on an individual (country) basis.

51

ANNEX 1 – Comment on footnotes 84, 99, 113 and 129.

The following destinations are listed in the COM EU Proposal 5011/09 but not in EAR’s

Country Chart: British Virgin Islands, Falkland Islands, Faroe Islands, French Guaya,

French OT, Gilbraltar, Greenland, Guadeloupe, Guam, Martinique, Monserrat, New

Caledonia, Northern Ireland, Puerto Rico, Scotland, St. Helena, Turks and Caicos Islands

and US Virgin Islands. The EAR accords each of these destinations the same licensing

treatment as the country of which it is a territory, possession, or department.

Consequently, the calculations in this report do not include the 18 destinations as a

separate destination.

52

ANNEX 2

Afghanistan

Algeria

Andorra

Angola

Antigua and Barbuda

Argentina

Aruba

Australia

Austria

The Bahamas

Bahrain

Bangladesh

Barbados

Belgium

Belize

Benin

Bhutan

Bolivia

Bosnia & Herzegovina

Botswana

Brazil

Brunei

Bulgaria

Burkina Faso

Burundi

Cameroon

Canada

Cape Verde

Central African Republic

Chad

Chile

Colombia

Comoros

Congo (Democratic Republic of the)

53

Congo (Republic of the)

Costa Rica

Cote d'Ivoire

Croatia

Cyprus

Czech Republic

Denmark

Djibouti

Dominica

Dominican Republic

East Timor

Ecuador

Egypt

El Salvador

Equatorial Guinea

Eritrea

Estonia

Ethiopia

Fiji

Finland

France

Gabon

Gambia, The

Germany

Ghana

Greece

Grenada

Guatemala

Guinea

Guinea-Bissau

Guyana

Haiti

Honduras

Hong Kong

Hungary

Iceland

India

54

Indonesia

Ireland

Israel

Italy

Jamaica

Japan

Jordan

Kenya

Kiribati

Korea, South

Kosovo

Kuwait

Latvia

Lebanon

Lesotho

Liberia

Liechtenstein

Lithuania

Luxembourg

Macedonia, The Former Yugoslav Republic of

Madagascar

Malawi

Malaysia

Maldives

Mali

Malta

Marshall Islands

Mauritania

Mauritius

Mexico

Micronesia, Federated States of

Monaco

Montenegro

Morocco

Mozambique

Namibia

Nauru

55

Nepal

Netherlands

Netherlands Antilles

New Zealand

Nicaragua

Niger

Nigeria

Norway

Oman

Pakistan

Palau

Panama

Papua New Guinea

Paraguay

Peru

Philippines

Poland

Portugal

Qatar

Romania

Rwanda

Saint Kitts & Nevis

Saint Lucia

Saint Vincent and the Grenadines

Samoa

San Marino

Sao Tome & Principe

Saudi Arabia

Senegal

Serbia

Seychelles

Sierra Leone

Singapore

Slovakia

Slovenia

Solomon Islands

Somalia

56

South Africa

Spain

Sri Lanka

Surinam

Swaziland

Sweden

Switzerland

Taiwan

Tanzania

Thailand

Togo

Tonga

Trinidad & Tobago

Tunisia

Turkey

Tuvalu

Uganda

United Arab Emirates

United Kingdom

United States

Uruguay

Vanuatu

Vatican City

Venezuela

Western Sahara

Yemen

Zambia

Zimbabwe

57

ANNEX 3 – Similarities and differences in terms of geographical

range. Table of comparison

Type of License

Exception

CGEA License Exception

Low Shipment

Value

Argentina

Brazil

Iceland

South Africa

South Korea

Turkey

Afghanistan

Algeria

Andorra

Angola

Antigua and Barbuda

Argentina

Aruba

Australia

Austria

The Bahamas

Bahrain

Bangladesh

Barbados

Belgium

Belize

Benin

Bhutan

Bolivia

Bosnia & Herzegovina

Botswana

Brazil

Brunei

Bulgaria

Burkina Faso

Burundi

Cameroon

Canada

Cape Verde

Central African Republic

Chad

Chile

58

Colombia

Comoros

Congo (Democratic Republic of the)

Congo (Republic of the)

Costa Rica

Cote d'Ivoire

Croatia

Cyprus

Czech Republic

Denmark

Djibouti

Dominica

Dominican Republic

East Timor

Ecuador

Egypt

El Salvador

Equatorial Guinea

Eritrea

Estonia

Ethiopia

Fiji

Finland

France

Gabon

Gambia, The

Germany

Ghana

Greece

Grenada

Guatemala

Guinea

Guinea-Bissau

Guyana

Haiti

Honduras

59

Hong Kong

Hungary

Iceland

India

Indonesia

Ireland

Israel

Italy

Jamaica

Japan

Jordan

Kenya

Kiribati

Korea, South

Kosovo

Kuwait

Latvia

Lebanon

Lesotho

Liberia

Liechtenstein

Lithuania

Luxembourg

Macedonia, The Former Yugoslav

Republic of

Madagascar

Malawi

Malaysia

Maldives

Mali

Malta

Marshall Islands

Mauritania

Mauritius

Mexico

Micronesia, Federated States of

60

Monaco

Montenegro

Morocco

Mozambique

Namibia

Nauru

Nepal

Netherlands

Netherlands Antilles

New Zealand

Nicaragua

Niger

Nigeria

Norway

Oman

Pakistan

Palau

Panama

Papua New Guinea

Paraguay

Peru

Philippines

Poland

Portugal

Qatar

Romania

Rwanda

Saint Kitts & Nevis

Saint Lucia

Saint Vincent and the Grenadines

Samoa

San Marino

Sao Tome & Principe

Saudi Arabia

Senegal

Serbia

61

Seychelles

Sierra Leone

Singapore

Slovakia

Slovenia

Solomon Islands

Somalia

South Africa

Spain

Sri Lanka

Surinam

Swaziland

Sweden

Switzerland

Taiwan

Tanzania

Thailand

Togo

Tonga

Trinidad & Tobago

Tunisia

Turkey

Tuvalu

Uganda

United Arab Emirates

United Kingdom

United States

Uruguay

Vanuatu

Vatican City

Venezuela

Western Sahara

Yemen

Zambia

Zimbabwe

Computers Algeria, Antigua and Barbuda, Argentina,

62

Andorra,

Antigua and

Barbuda,

Argentina,

Aruba,

Bahamas,

Bahrain,

Barbados,

Belize,

Benin,

Bhutan,

Bolivia,

Botswana,

Brazil,

British Virgin

Islands,

Brunei,

Cameroon,

Cape Verde,

Chile,

Comoros Islands,

Costa Rica,

Croatia,

Djibouti,

Dominica,

Dominican

Republic,

Ecuador,

Egypt,

El Salvador,

Equatorial

Guinea,

Falkland Islands,

Faroe islands,

Fiji,

French Guyana,

Aruba, Australia, Austria, Bahamas

(The), Bangladesh, Barbados,

Belgium, Belize, Benin, Bhutan,

Bolivia, Botswana, Brazil, Brunei,

Bulgaria, Burkina Faso, Burundi,

Cameroon, Cape Verde, Central

African Republic, Chad, Chile,

Colombia, Congo (Democratic Republic

of the), Congo (Republic of the), Costa

Rica, Cote d'Ivoire, Cyprus, Czech

Republic, Denmark, Dominica,

Dominican Republic, East Timor,

Ecuador, El Salvador, Equatorial

Guinea, Eritrea, Estonia, Ethiopia, Fiji,

Finland, France, Gabon, Gambia (The),

Germany, Ghana, Greece, Grenada,

Guatemala, Guinea, Guinea-Bissau,

Guyana, Haiti, Honduras, Hong Kong,

Hungary, Iceland, Indonesia, Ireland,

Italy, Jamaica, Japan, Kenya, Kiribati,

Korea (Republic of), Latvia, Lesotho,

Liberia, Liechtenstein, Lithuania,

Luxembourg, Madagascar, Malawi,

Malaysia, Maldives, Mali, Malta,

Marshall Islands, Mauritius, Mexico,

Micronesia (Federated States of),

Monaco, Mozambique, Namibia,

Nauru, Nepal, Netherlands,

Netherlands Antilles, New Zealand,

Nicaragua, Niger, Nigeria, Norway,

Palau, Panama, Papua New Guinea,

Paraguay, Peru, Philippines, Poland,

Portugal, Romania, Rwanda, St. Kitts

& Nevis, St. Lucia, St. Vincent and the

Grenadines, Sao Tome & Principe,

Samoa, San Marino, Senegal,

63

French OT,

Gabon,

Gambia,

Gibraltar,

Greenland,

Grenada,

Guadeloupe,

Guam,

Guatemala,

Ghana,

Guinea Bissau,

Guyana,

Honduras,

Hong Kong SAR,

Iceland,

India,

Jordan,

Kuwait,

Lesotho,

Liechtenstein,

Madagascar,

Malawi,

Malaysia,

Maldives,

Mali,

Martinique,

Mauritius,

Mexico,

Moldova,

Monaco,

Mongolia,

Montserrat,

Morocco,

Namibia,

Netherlands

Antilles,

Seychelles, Sierra Leone, Singapore,

Slovakia, Slovenia, Solomon Islands,

Somalia, South Africa, Spain, Sri

Lanka, Surinam, Swaziland, Sweden,

Switzerland, Taiwan, Tanzania, Togo,

Tonga, Thailand, Trinidad and Tobago,

Turkey, Tuvalu, Uganda, United

Kingdom, Uruguay, Vatican City,

Venezuela, Western Sahara, Zambia,

and Zimbabwe.

64

New Caledonia,

Nicaragua,

Niger,

Oman,

Panama,

Papua New

Guinea,

Peru,

Philippines,

Puerto Rico,

Qatar,

Russia,

Samoa,

San Marino,

Sao Tome e

Principe,

Saudi Arabia,

Senegal,

Seychelles,

Singapore,

Solomon Islands,

South Africa,

South Korea,

St. Helena,

St. Kitts and

Nevis,

St. Vincent,

Surinam,

Swaziland,

Togo,

Trinidad and

Tobago,

Tunisia,

Turkey,

Turks and Caicos

Islands,

65

UAE,

Ukraine,

Uruguay,

US Virgin

Islands,

Vanuatu.

Temporary

imports, exports,

and reexports/

Temporary Export

for Exhibition or

Fair

Argentina

Bahrain

Bolivia

Brazil

Brunei

Chile

China

Ecuador

Egypt

Hong Kong

Special

Administrative

Region

Iceland

Jordan

Kuwait

Malaysia

Mauritius

Mexico

Morocco

Oman

Philippines

Qatar

Russia

Saudi Arabia

Singapore

South Africa

South Korea

Tunisia

Turkey

All countries, except Cuba, Iran, North

Korea, Sudan and Syria

66

Ukraine

Servicing and

replacement of

parts and

equipment

Algeria,

Andorra,

Antigua and

Barbuda,

Argentina,

Aruba,

Bahamas,

Bahrain,

Bangladesh,

Barbados,

Belize,

Benin,

Bhutan,

Bolivia,

Botswana,

Brazil,

British Virgin

Islands,

Brunei,

Cameroon,

Cape Verde,

Chile,

China,

Comoros Islands,

Costa Rica,

Djibouti,

Dominica,

Dominican

Republic,

Ecuador,

Egypt,

El Salvador,

Equatorial

Guinea,

Falkland Islands,

One-for-one replacement parts for

previously exported equipment is

allowed to all countries, except to

Cuba, Iran, North Korea, Sudan and

Syria. However, no parts may be

exported to any destination, except to

Australia, Austria, Belgium, Canada,

Denmark, Finland, France, Germany,

Greece, Iceland, Ireland, Italy

(includes San Marino and Holy See),

Japan, Luxembourg, Netherlands, New

Zealand, Norway, Portugal, Spain,

Sweden, Turkey or United Kingdom if

the item is to be incorporated into or

used in nuclear weapons, nuclear

explosive devices, nuclear testing

related to activities, the chemical

processing of irradiated special nuclear

or source material, the production of

heavy water, the separation of

isotopes of source and special nuclear

materials, or the fabrication of nuclear

reactor fuel containing plutonium.

Repaired commodity and software

(items that were returned to the

United States for servicing and the

replacement of defective or

unacceptable U.S.-origin commodities

and software) is allowed to all

countries, except that no repaired

commodity or software may be

exported or reexported to Cuba, Iran,

North Korea, Sudan or Syria.

67

Faroe islands,

Fiji,

French Guyana,

French OT,

Gabon,

Gambia,

Gibraltar,

Greenland,

Grenada,

Guadeloupe,

Guam,

Guatemala,

Ghana,

Guinea Bissau,

Guyana,

Honduras,

Hong Kong

Special

Administrative

Region,

Iceland,

India,

Indonesia,

Israel,

Jordan,

Kuwait,

Lesotho,

Liechtenstein,

Macau,

Madagascar,

Malawi,

Malaysia,

Maldives,

Mali,

Martinique,

Mauritius,

Commodities or software may be

exported or reexported to replace

defective or otherwise unusable (e.g.,

erroneously supplied) items to all

countries, except to Cuba, Iran, North

Korea, Sudan or Syria or to any other

destination to replace defective or

otherwise unusable equipment owned

or controlled by, or leased or

chartered to, a national of any of

those countries.

68

Mexico,

Monaco,

Montserrat,

Morocco,

Namibia,

Netherlands

Antilles,

New Caledonia,

Nicaragua,

Niger,

Nigeria,

Oman,

Panama,

Papua New

Guinea,

Peru,

Philippines,

Puerto Rico,

Qatar,

Russia,

Samoa,

San Marino,

Sao Tome e

Principe,

Saudi Arabia,

Senegal,

Seychelles,

Singapore,

Solomon Islands,

South Africa,

South Korea,

Sri Lanka,

St. Helena,

St. Kitts and

Nevis,

St. Vincent,

69

Surinam,

Swaziland,

Taiwan,

Thailand,

Togo,

Trinidad and

Tobago,

Tunisia,

Turkey,

Turks and Caicos

Islands, United

Arab Emirates,

Uruguay,

US Virgin

Islands,

Vanuatu,

Venezuela

Encryption

commodities,

software and

technology

Argentina,

Croatia,

Russia,

South Africa,

South Korea,

Turkey,

Ukraine

All destinations, except to Cuba, Iran,

Noth Korea, Sudan or Syria.

Release of source code or technology

is valid to any national in Cuba, Iran,

Noth Korea, Sudan or Syria.

Documents

Exceptions in dual use export licenses