[Federal Register Volume 66, Number 134 (Thursday, July 12, 2001)]
[Rules and Regulations]
[Pages 36676-36683]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17465]
[[Page 36675]]
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Part IV
Department of Commerce
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Bureau of Export Administration
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15 CFR Part 740, et al.
Department of the Treasury
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Office of Foreign Assets Control
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31 CFR Part 515, et al.
Exports of Agricultural Commodities, Medicines, and Medical Devices to
Cuba, Sudan, Libya, and Iran; Cuba Travel-Related Transactions; Final
Rules
Federal Register / Vol. 66, No. 134 / Thursday, July 12, 2001 / Rules
and Regulations
[[Page 36676]]
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DEPARTMENT OF COMMERCE
Bureau of Export Administration
15 CFR Parts 740, 742, 746, 772 and 774
[Docket No. 010612152-1152-01]
RIN 0694-AC37
Exports of Agricultural Commodities, Medicines and Medical
Devices
AGENCY: Bureau of Export Administration, Commerce.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule amends the Export Administration Regulations (EAR)
to implement certain provisions of the Trade Sanctions Reform and
Export Enhancement Act (TSRA) of 2000. The TSRA requires the President
to terminate existing U.S. unilateral agricultural and medical
sanctions and also provides that the export of agricultural
commodities, medicines and medical devices to designated terrorist
countries be made in accordance with the licensing regime described in
that Act. The Department of Commerce is implementing TSRA as it relates
to exports of agricultural commodities to Cuba. This rule establishes
License Exception Agricultural Commodities (AGR) to permit exports and
reexports to Cuba of agricultural commodities that are not specifically
identified on the Commerce Control List (CCL) and are classified as
EAR99. The Department of the Treasury's Office of Foreign Assets
Control (OFAC) is implementing TSRA as it relates to exports to Iran,
Libya, and Sudan of agricultural commodities, medicines and medical
devices that are not specifically identified on the CCL and are
classified as EAR99.
DATES: This rule is effective July 26, 2001. Comments must be received
by September 10, 2001.
ADDRESSES: Written comments should be sent to Kirsten Mortimer,
Regulatory Policy Division, Bureau of Export Administration, Department
of Commerce, Room 2705, 14th Street and Pennsylvania Avenue, NW.,
Washington, DC 20230.
FOR FURTHER INFORMATION CONTACT: Brian Nilsson, Office of Strategic
Trade and Foreign Policy Controls, Bureau of Export Administration,
Telephone: (202) 482-4196, E-mail: [email protected].
SUPPLEMENTARY INFORMATION:
Background
On October 28, 2000, the President signed the Trade Sanctions
Reform and Export Enhancement Act (TSRA) (Title IX of Pub. L. 106-387)
which provides that the President shall terminate any unilateral
agricultural sanction or unilateral medical sanction in effect as of
the date of enactment of the TSRA, except that exports of agricultural
commodities, medicines and medical devices to designated terrorist
countries are subject to the export requirements described in the TSRA.
A designated terrorist country is a country that has been determined by
the Secretary of State to have repeatedly provided support for acts of
international terrorism under section 620A of the Foreign Assistance
Act of 1961, section 6(j)(1) of the Export Administration Act of 1979,
or section 40(d) of the Arms Export Control Act.
The TSRA does not require the President to terminate any unilateral
agricultural sanction or unilateral medical sanction that prohibits,
restricts or conditions the provision or use of any agricultural
commodity, medicine or medical device that is controlled on the United
States Munitions List, controlled on any control list established by
the Export Administration Act of 1979 or any successor statute, or used
to facilitate the development or production of chemical or biological
weapons or weapons of mass destruction.
This rule amends the EAR to create a new License Exception AGR for
exports of agricultural commodities classified as EAR99 from the United
States to Cuba and reexports of U.S. origin agricultural commodities
classified as EAR99 to Cuba. The Department of the Treasury's Office of
Foreign Assets Control is also taking action to implement the TSRA
requirements, notably with respect to agricultural and medical exports
classified as EAR99 to Iran, Sudan and Libya.
I. License Exception Agricultural Commodities (AGR) to Cuba
This rule establishes a new License Exception Agricultural
Commodities (AGR) in Sec. 740.18 of the EAR. License Exception AGR
authorizes exports and certain reexports of agricultural commodities
provided that they are classified as EAR99 and meet all the other
criteria of License Exception AGR, including the prior notification
requirements described below. License Exception AGR is not applicable
for items controlled under a specific Export Control Classification
Number (ECCN) on the Commerce Control List (CCL). To be eligible for
AGR, shipments of agricultural commodities must be made pursuant to a
written contract and must take place within one year of the signing of
a contract, unless the shipment is a commercial sample or donation in
which case the contract requirement does not apply. Agricultural
commodities are defined in part 772 (Definitions of Terms) of the EAR
and must be classified as EAR99 to be eligible for License Exception
AGR. Transactions that do not satisfy all the criteria of License
Exception AGR require a license from BXA.
Prior Notification Requirement
As noted above, to be eligible for License Exception AGR, exporters
must also provide prior notification by completing the Multipurpose
Application Form (BXA-748P) or its electronic equivalent and including
certain information requested on the BXA-748P form. The following
blocks must be completed, as appropriate, on the Multipurpose
Application Form: Blocks 1, 2, 3, 4, 5, 14, 16, 17,18, 19, 21, 22 (a),
(e), (f), (g), (h), (i), (j), 23, and 25. If your commodity is
fertilizer, western red cedar or live horses, you must confirm that BXA
has previously classified your commodity as EAR99 by placing the
Commodity Classification Automatic Tracking System (CCATS) number in
block 22(d). The box ``other'' must be selected as the type of
application. This designator will automatically place the notification
into a special review track. BXA will not initiate the registration of
the notice unless all the required information is complete. BXA will
refer notifications to interested reviewing agencies within two
business days of registration. The application control number will
allow exporters and reexporters to track their notices by calling the
System for Tracking Export License Applications (STELA) at (202) 482-
2752. STELA will provide the date of registration of the notification
and a notification number. If no reviewing agencies raise objections
within nine business days, STELA will confirm that you may proceed with
the transaction, provided you satisfy all other requirements of License
Exception AGR, including the requirement to have a written contract
prior to any shipment. BXA will issue subsequent written confirmation.
STELA will also advise if a license is required, in which case BXA will
process the notification as a license application in accordance with
the procedures described in part 750 and the licensing policies set
forth in the EAR. BXA will change the notification number to a license
application number. At this time, BXA may request additional
information to complete the
[[Page 36677]]
processing of the license application. These procedures implement
section 906(a)(1) of the Trade Sanction Reform and Export Enhancement
Act which requires that procedures be in place to deny exports of
agricultural commodities to any entity in Cuba that promotes
international terrorism.
Donations of Agricultural Commodities to Cuba
Donations of agricultural commodities are eligible for export and
reexport to Cuba under License Exception AGR, provided the transaction
meets the requirements and procedures of this license exception, except
the contract requirement does not apply. Donations of food items to
non-governmental organizations (NGOs) and individuals in Cuba may also
be eligible for License Exception GFT. See Sec. 740.12 for eligibility
requirements of gift parcels and humanitarian donations under License
Exception GFT.
Exports of Medicines and Medical Devices to Cuba
Exports of medicines and medical devices are not eligible for
export or reexport to Cuba under TSRA procedures and, therefore,
License Exception AGR is not available. Such items continue to require
authorization for export to Cuba under the provisions of the Cuban
Democracy Act (CDA) (22 U.S.C. 6004). BXA reviews applications for such
exports on a case-by-case basis and will generally approve such exports
unless one of the restrictions set forth in the CDA and in section
746.2 of the EAR applies. As is the standard licensing practice under
the EAR, licenses issued have a twenty-four month validity period.
Exporters are not required to have a written contract to apply for an
export license.
II. OFAC Authorization for Agricultural Commodities, Medicines and
Medical Devices to Iran, Libya and Sudan
The Department of the Treasury's Office of Foreign Assets Control
(OFAC) is implementing the provisions of TSRA as they relate to exports
of agricultural commodities, medicines and medical devices that are
classified as EAR99 to Iran, Libya and Sudan. Exporters should review
OFAC's regulations for the requirements relating to exports of
agricultural commodities, medicines and medical devices to Iran, Libya
and Sudan.
As explained in the OFAC regulations, exporters must have an
official commodity classification of EAR99 from BXA for all medical
devices (including supplies) prior to submitting an application to
OFAC, unless the item is specifically listed on BXA's website at
www.bxa.doc.gov/Regulations/Trade Sanctions ReformExport
EnhancementAct.html. This list identifies those medical supplies, such
as syringes, bandages, gauze and similar items, that do not require BXA
classification prior to OFAC review. When submitting a license
application to OFAC under its expedited review procedures, exporters
must indicate to OFAC that their medical supply is on the BXA medical
supply list on BXA's website. Otherwise, exporters must provide OFAC
with a copy of the BXA commodity classification for those medical
devices that BXA has classified as EAR99. Exporters who are unable to
access BXA's website may contact BXA at 202-482-4811 to obtain BXA's
medical supplies list.
In addition, BXA has identified on its website a list of medicines
that are on the CCL and not eligible for OFAC's expedited review
procedures. As explained in the OFAC regulations, when submitting a
license application to OFAC under its expedited review procedures,
exporters must indicate to OFAC that their medicine is not on the BXA
medicine list on BXA's website. If exporters are unsure if their
medicine is on the CCL, they should seek an official commodity
classification from BXA confirming that their medicine is classified as
EAR99 prior to submission of an application to OFAC under its expedited
review procedures. Exporters who are unable to access BXA's website may
contact BXA at 202-482-4811 to obtain BXA's list of medicines that are
on the CCL.
For agricultural commodities, an official commodity classification
of EAR99 from BXA is only required for fertilizers, western red cedar,
and live horses. See section 748.3 of the EAR for instructions for
submitting commodity classification requests.
III. Definitions and Procedures for Classifying Agricultural and
Medical Commodities
This rule establishes new definitional entries for ``agricultural
commodities'', ``medicines'' and ``medical devices'' in part 772 of the
EAR. Commodities included within these definitions must be classified
as EAR99 to be eligible for License Exception AGR or OFAC
authorization. Exporters should review OFAC's regulations for the
requirements relating to exports of agricultural commodities, medicines
and medical devices to Iran, Libya and Sudan.
Agricultural Commodities
Agricultural commodity is defined in Sec. 902 of the Trade
Sanctions Reform and Export Enhancement Act of 2000 (TSRA) (Sec. 902 of
Public Law 106-387), which incorporates by reference the definition of
agricultural commodity in section 102 of the Agriculture Trade Act of
1978 (7 U.S.C. 5602). Section 775 of Public Law 106-387 also provides
that, for purposes of administering Title IX of the TSRA, the term
agricultural commodity also includes fertilizer and organic fertilizer.
Under this rule, agricultural commodities include food commodities,
feed, fish, shellfish and fish products; beer, wine and spirits; soft
drinks; livestock; fiber, including cotton, wool and other fibers;
tobacco and tobacco products; wood and wood products, including lumber
and utility poles; seeds; and reproductive materials such as fertilized
eggs, embryos and semen. A list of these commodities is available for
review at the U.S. Department of Agriculture website at http://www.fas.usda.gov/itp/sanctions.html. If you have questions regarding
whether an item is defined by section 102 of the Agricultural Trade Act
of 1978 (7 U.S.C. Sec. 5602), you should consult with the Department of
Agriculture.
Consistent with section 775 of Pub. L. 106-387, this rule also
includes fertilizers and organic fertilizers in the scope of
agricultural commodities. Although items in this paragraph may not be
specifically identified as agricultural commodities on the Department
of Agriculture website, they are considered agricultural commodities
under the EAR and for purposes of implementation of the TSRA.
For purposes of License Exception AGR (see section 740.18),
agricultural commodities also include vitamins, minerals, food
additives and dietary supplements, and bottled water. These items do
not fall within the scope of Sec. 102 of the 1978 Agricultural Trade
Act and are not identified as agricultural commodities on the
Department of Agriculture website, but are treated as agricultural
commodities for the purposes of License Exception AGR.
Under this rule, agricultural commodities do not include furniture
made from wood; clothing manufactured from plant or animal materials;
agricultural equipment (whether hand tools or motorized equipment);
pesticides, insecticides, or herbicides; or cosmetics (unless derived
entirely from plant materials).
Note, however, that certain items that meet the definition of
agricultural commodity are controlled on the CCL
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and are not eligible for BXA's License Exception AGR for Cuba or OFAC's
revised export procedures for Iran, Libya and Sudan. These include
certain fertilizer products controlled under new ECCN 1C997, western
red cedar controlled under ECCN 1C988, and live horses (if to be
exported by sea) controlled under ECCN 0A980. For other fertilizer
products, western red cedar and live horses that are not controlled on
the CCL, exporters must have an official commodity classification of
EAR99 from BXA prior to submission of a notification under License
Exception AGR to BXA (for Cuba) or submission of a request for
authorization to OFAC (for Iran, Libya, and Sudan). Exporters should
review OFAC's regulations for the requirements relating to exports of
agricultural commodities to Iran, Libya and Sudan.
In sum, two specific determinations are required prior to
qualifying for BXA or OFAC authorization under the TSRA procedures:
that the product is an agricultural commodity as defined in part 772 of
the EAR; and that it is classified as EAR99 under the EAR.
For Cuba, items that are not agricultural commodities, as well as
items that are agricultural commodities but that are on the CCL, will
require a license from BXA. BXA will review such applications under the
licensing policies set forth in Sec. 746.2 (15 CFR 746.2).
Medicines and Medical Devices
Medicines and medical devices are not eligible under License
Exception AGR to Cuba, but are eligible for OFAC authorization to Iran,
Libya and Sudan. For the purposes of TSRA, medicines are drugs as
defined in section 201 of the Federal Food, Drug and Cosmetic Act (21
U.S.C. 321). Pursuant to the Act, BXA has determined that for the
purposes of this rule, medicines include prescription medicines and
over the counter medicines for humans and animals. Medical devices are
defined in section 201 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 321) under the term ``device''. Pursuant to the Act, BXA has
determined that for the purposes of this rule, medical devices include
medical supplies, instruments, equipment, equipped ambulances,
institutional washing machines capable of sterilizing hospital clothing
and bedding, and vehicles with installed medical testing equipment.
Medical devices do not include general purpose furniture such as desks,
tables, or lamps used in hospital offices and waiting rooms. Exporters
should consult with the Food and Drug Administration for guidance on
whether an item meets the definition of medicine or medical device
under the Federal Food, Drug and Cosmetic Act. Although most medicines
and medical devices are classified as EAR99, certain vaccines,
biological and chemical products, and parts for medical devices are
controlled under specific ECCNs on the CCL.
For exports of medicines and medical devices to Iran, Libya, and
Sudan, two specific determinations are required prior to submitting a
request for OFAC authorization: that the product is a medicine or
medical device as defined in part 772 of the EAR; and that it is
classified as EAR99 under the EAR.
Exporters should review OFAC's regulations for the requirements
relating to exports of medical devices to Iran, Libya and Sudan. As
explained in the OFAC regulations, prior to submitting an application
to OFAC, exporters must have an official commodity classification of
EAR99 from BXA for all medical devices (including supplies), unless the
item is specifically listed on BXA's website at www.bxa.doc.gov/
Regulations/Trade Sanctions Reform Export EnhancementAct.html. This
list identifies those medical supplies, such as syringes, bandages,
gauze and similar items, that do not require BXA classification prior
to OFAC review. When submitting a license application to OFAC under its
expedited review procedures, exporters must indicate to OFAC that their
medical supply is on the BXA medical supply list on BXA's website.
Otherwise, exporters must provide OFAC with a copy of the BXA commodity
classification for those medical devices that BXA has classified as
EAR99.
In addition, BXA has identified on its website a list of medicines
that are on the CCL and not eligible for OFAC's expedited review
procedures. As explained in the OFAC regulations, when submitting a
license application to OFAC under its expedited review procedures,
exporters must indicate to OFAC that their medicine is not on the BXA
medicine list on BXA's website. If exporters are unsure if their
medicine is on the CCL, they should seek an official commodity
classification from BXA confirming that their medicine is classified as
EAR99 prior to submission of an application to OFAC under its expedited
review procedures. Exporters should review OFAC's regulations for the
requirements relating to exports of medicines to Iran, Libya and Sudan.
As noted above, exports of medicines and medical devices are not
eligible for export or reexport to Cuba under TSRA procedures. Such
items continue to require authorization for export to Cuba under the
provisions of the Cuban Democracy Act (CDA) (22 U.S.C. 6004). For
clarity and conformity, however, the term ``medical devices'' defined
under TSRA is determined to be coextensive with the terms ``medical
supplies, instruments and equipment'' used in section 1705 of the CDA.
This rule also defines the term ``medicines'' for the purposes of the
TSRA and will also apply this definition to ``medicines'' as that term
is used in the CDA.
IV. Commodity Classification Requirements
As explained in the OFAC regulations, for exports of medical
devices to Iran, Libya, and Sudan, exporters must have an official
commodity classification of EAR99 from BXA prior to submission of a
request for authorization under OFAC's expedited review procedures,
unless the medical supply is specifically listed on BXA's website. The
medical supply list identifies those medical supplies that do not
require BXA classification prior to OFAC review. For exports of
medicines to Iran, Libya, and Sudan, exporters must confirm that their
item is not described on BXA's medicines list on BXA's website. The
medicines list identifies medicines that are not eligible for OFAC's
expedited review procedures. For exports of fertilizers, western red
cedar, and live horses, a BXA commodity classification is required
prior to submission of a notification for Cuba under License Exception
AGR or prior to submission of a request to OFAC under its expedited
review procedures for Iran, Libya or Sudan.
V. Continuing Controls
This rule also does not affect controls on any agricultural
commodity, medicine or medical device classified under a specific ECCN
on the CCL. In addition, this rule does not affect U.S. controls on
technology or software used to manufacture agricultural commodities or
on technology to design or produce biotechnological items, or medical
devices.
Except for the creation of new License Exception AGR in section
740.18, this rule does not make any other license exception available
for exports to Cuba, nor does it change the availability or non-
availability of any other License Exception. Note that License
Exception AVS does not authorize the export of vessels from the United
States on temporary sojourn. Consistent with the 1992 Cuban Democracy
Act, License Exception AVS does not authorize the export of ship
stores, equipment or spares for use on a vessel, bunkering fuel,
petroleum and petroleum items
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and dunnage for use on any vessel carrying goods or passengers to or
from Cuba. Therefore, a specific license is required from BXA for all
such exports.
Also in continuation of current rules, aircraft that are on
temporary sojourn to Cuba that are carrying items eligible for export
under License Exception AGR and that satisfy all the requirements of
License Exception AVS (Sec. 740.15(a) of the EAR) do not need a
specific license from BXA. Aircraft that do not satisfy all
requirements of License Exception AVS will require a specific license
from the BXA and license applications will be reviewed on a case-by-
case basis and favorably considered when carrying commodities
authorized under the EAR. OFAC also is responsible for licensing family
remittances and the financial transactions of persons traveling to
Cuba, including travel associated with sales of agricultural
commodities to Cuba and persons that accompany cargo on aircraft
authorized by BXA.
Finally, this rule does not affect U.S. nonproliferation export
controls, including end-use controls (known as the Enhanced
Proliferation Control Initiative or EPCI). This rule does not relieve
exporters or reexporters of their obligations under General Prohibition
5 in Sec. 736.2(b)(5) of the EAR which provides that you may not,
without a license, knowingly export or reexport any item subject to the
EAR for use in an activity that is prohibited by part 744 of the EAR.
BXA strongly urges the use of Supplement No. 3 to part 732 of the EAR,
BXA's ``Know Your Customer'' Guidance and Red Flags.
VI. New Controls
Consistent with the provisions of the Export Administration Act
(EAA), as amended, and after consultation with the Secretary of State,
BXA submitted a foreign policy report to the Congress providing notice
of its intent to impose new foreign policy controls on ammonium
nitrate, including fertilizers and fertilizer blends containing more
than 15% by weight ammonium nitrate, except liquid fertilizers
(containing any amount of ammonium nitrate) or dry fertilizers
containing less than 15% by weight ammonium nitrate. These items are
now classified as ECCN 1C997, and require a license for anti-terrorism
reasons. This foreign policy report was sent to Congress on June 15,
2001. In the development of a final rule, BXA may further amend the EAR
to add certain medicines and medical devices to the CCL.
VII. Technical Changes
This rule amends sections 746.3 and 746.7 to clarify the
requirements for exports and reexports to Iran and Iraq.
This rule amends the EAR in the following ways:
Part 740 (License Exceptions)
New License Exception Agricultural Commodities (AGR) is established
in Sec. 740.18 of the EAR for exports of agricultural commodities
classified as EAR99. License Exception AGR authorizes the export of
agricultural commodities from the United States and reexport of U.S.
origin agricultural commodities to Cuba provided that the notification
requirements and other provisions of License Exception AGR are met.
For purpose of transparency, this rule also restates in section
740.2 (Restrictions on All License Exceptions) that license exceptions
may not be used for exports or reexports to a destination subject to a
comprehensive embargo, unless specifically authorized in the section
dealing with a particular embargoed country in part 746 (Embargoes and
Other Special Controls) of the EAR.
Part 742 (Control Policy: CCL Based Controls)
In Sec. 742.8, Sec. 742.9, Sec. 742.10, Sec. 742.19, and Supplement
No. 1 to Part 742, references are added to reflect the new control
status and licensing policy for ammonium nitrate, including certain
fertilizers containing ammonium nitrate, under ECCN 1C997. Licenses are
required under the EAR for the export and reexport of fertilizers
controlled by ECCN 1C997 to Cuba, Iran, Iraq, Libya, North Korea, Sudan
and Syria. Applications for items controlled under new ECCN 1C997 are
subject to a case-by-case review with general policy of denial to all
end-users.
Part 746 (Embargoes and Other Special Controls)
Section 746.2 Cuba
In Sec. 746.2 (Cuba), License Exception AGR eligibility is
established for exports and certain reexports of agricultural
commodities classified as EAR99 to Cuba. The licensing review policy in
Sec. 746.2 is revised to apply to exports and reexports of agricultural
commodities subject to the EAR that do not meet the eligibility
requirements of License Exception AGR and to other agricultural items
(e.g. insecticides, pesticides and herbicides).
Medicines and medical devices continue to require an export license
to Cuba under the provisions of the CDA. Note that the definition of
medical devices under TSRA is determined to be coextensive with the
terms ``medical supplies'', ``instruments'' and ``equipment'' under the
CDA and Sec. 746.2 is revised to use the terms medicines and medical
devices, which are defined in part 772.
Section 746.3 Iraq
Sec. 746.3 is revised to reflect new controls on certain fertilizer
products under new ECCN 1C997. This section also clarifies that no
person may export or reexport any item subject to both the EAR and
OFAC's Iraqi Sanctions Regulations without prior OFAC authorization and
that exports and reexports subject to the EAR that are not subject to
the Iraqi Sanctions Regulations may require authorization from BXA.
Section 746.7 Iran
This section is revised to clarify that exports and reexports
subject to the EAR that are not subject to the Iranian Transactions
Regulations may require authorization from BXA.
Part 772 Definitions of Terms
In part 772, this rule adds definitions for the terms
``agricultural commodities'', ``medicines'', and ``medical devices''
consistent with Sections 902 and 775 of Pub. L. 106-387.
Part 774 The Commerce Control List
In Supplement No. 1 to part 774, ECCN 1C997 is added to the CCL. A
license is required for the export or reexport of ammonium nitrate,
including fertilizers which contain certain concentrations of ammonium
nitrate, to terrorist supporting countries.
Rulemaking Requirements
1. This interim final rule has been determined to be not
significant for purposes of E.O. 12866.
2. Notwithstanding any other provision of law, no person is
required to respond nor shall any person be subject to a penalty for
failure to comply with, a collection of information subject to the
requirements of the Paperwork Reduction Act, unless that collection of
information displays a currently valid OMB Control Number. This rule
involves collections of information subject to the Paperwork Reduction
Act of 1980 (44 U.S.C. 3501 et seq.). This collection has been approved
by the Office of Management and Budget under control number 0694-0088,
``Multi-Purpose Application,'' which carries a burden hour estimate of
40 minutes to prepare and submit electronically and
[[Page 36680]]
45 minutes to submit manually on multipurpose Application Form (BXA-
748P). This rule contains a new information collection requirement that
has been submitted for emergency approval under control number 0694-
XXXX, ``Prior Notification for Exports under License Exception AGR''.
Prior notification using existing form BXA-748P requires burden hour
estimate of 40 minutes to prepare and submit electronically and 45
minutes to submit manually.
3. This rule does not contain policies with Federalism implications
sufficient to warrant preparation of a Federalism assessment as that
term is defined in Executive Order 13132.
4. The provisions of the Administrative Procedure Act (5 U.S.C.
553) requiring notice of proposed rulemaking, the opportunity for
public participation, and a delay in effective date, are inapplicable
because this regulation involves a military and foreign affairs
function of the United States. See 5 U.S.C. 553(a)(1). Further, no
other law requires that a notice of proposed rulemaking and an
opportunity for public comment be given for this interim rule. Because
a notice of proposed rulemaking and an opportunity for public comment
are not required to be given for this rule under 5 U.S.C. 553 or by any
other law, the analytical requirements of the Regulatory Flexibility
Act (5 U.S.C. 601 et seq. ) are not applicable.
However, because of the importance of the issues raised by these
regulations, this rule is issued in interim form and comments will be
considered in the development of final regulations. Accordingly, the
Department encourages interested persons who wish to comment to do so
at the earliest possible time to permit the fullest consideration of
their views.
The period for submission of comments will close September 10,
2001. The Department will consider all comments received before the
close of the comment period in developing final regulations. Comments
received after the end of the comment period will be considered if
possible, but their consideration cannot be assured. The Department
will not accept public comments accompanied by a request that a part or
all of the material be treated confidentially because of its business
proprietary nature or for any other reason. The Department will return
such comments and materials to the person submitting the comments and
will not consider them in the development of final regulations. All
public comments on these regulations will be a matter of public record
and will be available for public inspection and copying. In the
interest of accuracy and completeness, the Department requires comments
in written form.
Oral comments must be followed by written memoranda, which will
also be a matter of public record and will be available for public
review and copying. Communications from agencies of the United States
Government or foreign governments will not be made available for public
inspection.
Copies of the public record concerning these regulations may be
requested from: Bureau of Export Administration, Office of
Administration, U.S. Department of Commerce, Room 6883, 14th and
Constitution Avenue, NW, Washington, DC 20230; (202) 482-0637. This
component does not maintain a separate public inspection facility.
Requesters should first view BXA's website (which can be reached
through www.bxa.doc.gov). If requesters cannot access BXA's website,
please call the number above for assistance.
List of Subjects
15 CFR Part 740
Administrative practice and procedure, Exports, Foreign trade,
Reporting and recordkeeping requirements.
15 CFR Parts 742, 772 and 774
Exports, Foreign trade.
15 CFR Part 746
Embargoes, Exports, Foreign trade, Reporting and recordkeeping
requirements.
Accordingly, parts 740, 742, 746, 772, and 774 of the Export
Administration Regulations (15 CFR parts 730-799) are amended as
follows:
1. The authority citations for parts 740 and 772 are revised to
read as follows:
Authority: 50 U.S.C. app. 2401 et seq.; Pub. L. No. 106-387;
Pub. L. No. 106-508; 50 U.S.C. 1701 et seq.; E.O. 13026, 61 FR
58767, 3 CFR, 1996 Comp., p. 228; E.O. 13206 (66 F.R. 18397, April
9, 2001).
2. The authority citation for part 742 is revised to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; Pub. L. No. 106-387;
Pub. L. No. 106-508; 50 U.S.C. 1701 et seq.; 18 U.S.C. 2510 et seq.;
22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; E.O. 12058, 43 FR 20947, 3
CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp.,
p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O.
13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; Notice of November 9,
2000 (65 F.R. 68063, November 13, 2000); E.O. 13206 (66 F.R. 18397,
April 9, 2001).
3. The authority citation for part 746 is revised to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; Pub. L. No. 106-387;
Pub. L. No. 106-508; 50 U.S.C. 1701 et seq.; 22 U.S.C. 287c; 22
U.S.C. 6004; E.O. 12854, 58 FR 36587, 3 CFR 1993 Comp., p. 614; E.O.
12918, 59 FR 28205, 3 CFR, 1994 Comp., p. 899; E.O. 13088, 63 FR
32109, 3 CFR, 1998 Comp., p. 191; E.O. 13121 of April 30, 1999, 64
FR 24021 (May 5, 1999); E.O. 13206 (66 F.R. 18397, April 9, 2001).
4. The authority citation for parts 774 is revised to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; Pub. L. No. 106-387;
Pub. L. No. 106-508; 50 U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10
U.S.C. 7430(e); 18 U.S.C. 2510 et seq.; 22 U.S.C. 287c; 22 U.S.C.
3201 et seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C.
2139a; 42 U.S.C. 6212; 43 U.S.C. 1354; 46 U.S.C. app. 466c; 50
U.S.C. app. 5; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228;
E.O. 13206 (66 F.R. 18397, April 9, 2001).
PART 740--[AMENDED]
5. Section 740.1 is amended by revising paragraph (a) to read as
follows:
Sec. 740.1 Introduction.
* * * * *
(a) Scope. A ``License Exception'' is an authorization contained in
this part that allows you to export or reexport under stated
conditions, items subject to the Export Administration Regulations
(EAR) that would otherwise require a license under General Prohibition
One, Two, or Three, as indicated under one or more of the Export
Control Classification Numbers (ECCNs) in the Commerce Control List
(CCL) in Supplement No. 1 to part 774 of the EAR and items subject to
the EAR that would require a license based on the embargo policies
described in part 746 of the EAR. If your export or reexport is subject
to General Prohibition Six for embargoed destinations, refer to part
746 of the EAR to determine the availability of any License Exceptions.
Special commodity controls apply to short supply items. License
Exceptions for items listed on the CCL as controlled for Short Supply
reasons are found in part 754 of the EAR. If your export or reexport is
subject to General Prohibition Five, consult part 744 of the EAR. If
your export or reexport is subject to General Prohibitions Four, Seven,
Eight, Nine, or Ten, then no License Exceptions apply.
* * * * *
6. Section 740.2 is amended by adding paragraph (a)(6) to read as
follows:
[[Page 36681]]
Sec. 740.2 Restrictions on all License Exceptions.
(a) * * *
(6) The export or reexport is to an embargoed destination (Cuba,
Iran, Iraq, and Libya), unless a license exception or portion thereof
is specifically listed in the license exceptions paragraph pertaining
to a particular embargoed country in part 746 of the EAR.
* * * * *
7. Section 740.18 is added to read as follows:
Sec. 740.18 Agricultural commodities (AGR).
(a) Eligibility requirements. License Exception AGR permits the
export of agricultural commodities to Cuba, as well as the reexport of
U.S. origin agricultural commodities to Cuba, provided your transaction
meets all of the following criteria:
(1) The commodity meets the definition of ``agricultural
commodities'' in part 772 of the EAR;
(2) The commodity is EAR99. You must have an official commodity
classification of EAR99 from BXA for fertilizers, western red cedar and
live horses before you submit a notification under this license
exception. See Sec. 748.3 of the EAR for information on how to submit a
commodity classification request;
(3) The export or reexport is made pursuant to a written contract,
except for donations and commercial samples which are not subject to
this contract requirement;
(4) The export or reexport is made within 12 months of the signing
of the contract or within 12 months of notification that no objections
were raised (if no contract is required). In the case of multiple
partial shipments, all such shipments must be made within the 12 months
of the signing of the contract or within 12 months of notification that
no objections were raised (if no contract is required); and
(5) You notify BXA prior to exporting or reexporting according to
the procedures set forth in paragraph (c) of this section. If you
intend to engage in multiple shipments during the one-year period after
the signing of the contract, you need only notify BXA prior to the
first shipment.
(b) Restrictions. (1) No export or reexport to any individual or
entity designated as a Specially Designated Terrorist or Foreign
Terrorist Organization may be made under License Exception AGR (see
part 744 of the EAR).
(2) No export or reexport to or for use in biological, chemical,
nuclear warfare or missile proliferation activities may be made under
License Exception AGR (see part 744 of the EAR).
(3) No U.S.-owned or controlled foreign firm may export from abroad
to Cuba a foreign produced agricultural commodity containing more than
10% U.S.-origin content. Such U.S.-owned or controlled foreign firms
require a specific license from BXA as well as the Department of the
Treasury's Office of Foreign Assets Control (OFAC). Transactions not
subject to the EAR (under 10% U.S.-origin content) require a license
from OFAC.
(c) Prior notification. (1) General requirement. You must notify
BXA prior to any export or reexport (or prior to the first of multiple
shipments) under License Exception AGR.
(2) Procedures. You must provide prior notification of exports and
reexports under License Exception AGR by submitting a completed
Multipurpose Application Form (BXA-748P) or its electronic equivalent.
The following blocks must be completed, as appropriate, on the
Multipurpose Application Form: Blocks 1, 2, 3, 4, 5 (by marking box 5
``Other''), 14, 16, 17, 18, 19, 21, 22 (a), (e), (f), (g), (h), (i),
(j), 23, and 25 according to the instructions described in Supplement
No. 1 to part 748 of the EAR. If your commodity is fertilizer, western
red cedar or live horses, you must confirm that BXA has previously
classified your commodity as EAR99 by placing the Commodity
Classification Automatic Tracking System (CCATS) number in block 22(d).
BXA will not initiate the registration of an AGR notification unless
all requested information on the Multipurpose Application form is
complete.
(3) Action by BXA. Within two business days of the registration of
the AGR notification, BXA will refer the notification for interagency
review, or if necessary return the notification without action (e.g.,
if the information provided is incomplete). Registration is defined as
the point at which the notification is entered into BXA's electronic
system.
(4) Review by other departments or agencies. The Departments of
Defense, State, and other agencies, as appropriate, may review the AGR
notification. BXA must receive department or agency objections within
nine business days of the referral. Unlike the provisions described in
Sec. 750.4(b) of the EAR, there are no provisions for stopping the
processing time of the AGR notification. If, within 11 business days
after the date of registration, any reviewing agency provides a written
objection that the recipient may promote international terrorism or the
transaction raises nonproliferation concerns, you may not use License
Exception AGR. In such cases, BXA will notify you that a license is
required for the export or reexport. BXA will then process the AGR
notification as a license application in accordance with the provisions
described in Sec. 750.4 of the EAR, and the licensing policies set
forth in the EAR. At this time, BXA may request additional information.
When BXA confirms that no agency has raised an objection within eleven
business days (as described in paragraph (c)(5) of this section), you
may proceed with the transaction provided that you satisfy all other
requirements of License Exception AGR, including the requirement to
have a written contract prior to any shipment (unless a donation or
commercial sample). (Note that the fact that you have been advised that
no agency has objected to the transaction does not exempt you from
other licensing requirements under the EAR, such as those based on
knowledge of a prohibited end-use or end-user as referenced in general
prohibition five (part 736 of the EAR) and set forth in part 744 of the
EAR.)
(5) Status of pending AGR notification requests. You must contact
BXA's System for Tracking Export License Applications (``STELA'') at
(202) 482-2752 for status of your pending AGR notification. (See
Sec. 750.5 of the EAR for procedures to access information on STELA.)
STELA will provide the date of registration of the AGR notification. If
no department or agency objection is raised within 11 business days,
STELA will, on the twelfth business day following the date of
registration, provide you with confirmation of that fact. You may not
proceed with your shipment unless you confirm with STELA that no
objection has been raised. BXA will subsequently issue written
confirmation to you. If an objection is raised, STELA will indicate
that a license is required. The AGR notification will then be processed
as a license application. In addition, BXA may provide notice of an
objection by telephone, fax, courier service, or other means.
(d) Donations. (1) Donations of agricultural commodities are
eligible for export and reexport to Cuba under License Exception AGR,
provided the transaction meets the requirements and procedures of this
license exception (except the written contract requirement).
(2) Donations of food items to non-governmental organizations
(NGOs) and individuals in Cuba may also be eligible for License
Exception GFT. See Sec. 740.12 for eligibility requirements of gift
[[Page 36682]]
parcels and humanitarian donations under License Exception GFT.
PART 742--[AMENDED]
8. Sec. 742.8 is amended by revising the phrase ``(c)(6) through
(c)(41)'' in paragraph (a)(4)(ii) to read ``(c)(6) through (c)(43)''.
9. Sec. 742.9 is amended by revising the phrase ``(c)(22) through
(c)(41)'' in paragraph (a)(3)(ii) to read ``(c)(22) through (c)(43)''
and by adding new paragraph (b)(1)(viii) to read as follows:
Sec. 742.9 Anti-terrorism: Syria.
* * * * *
(b) * * *
(1) * * *
(viii) Ammonium nitrate, including certain fertilizers containing
ammonium nitrate, controlled under ECCN 1C997.
* * * * *
10. Sec. 742.10 is amended by revising the phrase ``(c)(16) through
(c)(41)'' in paragraph (a)(4)(ii) to read ``(c)(16) through (c)(43)''
and by adding new paragraph (b)(1)(ix) to read as follows:
Sec. 742.10 Anti-terrorism: Sudan.
* * * * *
(b) * * *
(1) * * *
(ix) Ammonium nitrate, including certain fertilizers containing
ammonium nitrate, controlled under ECCN 1C997.
* * * * *
11. Sec. 742.19 is amended by adding new paragraph (b)(1)(xviii) to
read as follows:
Sec. 742.19 Anti-terrorism: North Korea.
* * * * *
(b) * * *
(1) * * *
(xviii) Ammonium nitrate, including certain fertilizers containing
ammonium nitrate, controlled under ECCN 1C997.
* * * * *
12. Supplement No. 2 to Part 742 is amended by revising paragraph
(b)(3)(ii) and adding paragraph (c)(43) to read as follows:
Supplement No. 2 to Part 742--Anti-Terrorism Controls: Iran, North
Korea, Syria and Sudan Contract Sanctity Dates and Related Policies
* * * * *
(b) * * *
(3) * * *
(ii) The following items to all end-users: for Iran, items in
paragraphs (c)(6) through (c)(43) of this Supplement; for North Korea,
items in paragraph (c)(6) through (c)(44) of this Supplement; for
Sudan, items in paragraphs (c)(6) through (c)(14), and (c)(16) through
(c)(43) of this Supplement; and for Syria, items in paragraphs (c)(6)
through (c)(8), (c)(10) through (c)(14), (c)(16) through (c)(19), and
(c)(22) through (c)(43) of this Supplement.
(c) * * *
(43) Ammonium nitrate, including certain fertilizers containing
ammonium nitrate, under ECCN 1C997 on the CCL.
(i) Iran. Applications for all end-users in Iran of these items
will generally be denied.
(ii) Syria. Applications for all end-users in Syria of these items
will generally be denied. Contract sanctity date: June 15, 2001.
(iii) Sudan. Applications for all end-users in Sudan of these items
will generally be denied.
(iv) North Korea. Applications for all end-users in North Korea of
these items will generally be denied. Contract sanctity date: June 15,
2001.
* * * * *
PART 746--[AMENDED]
13. Section 746.2 is amended by adding paragraph (a)(1)(xii), by
revising paragraphs (b)(1) introductory text, (b)(3)(iii)(B),
(b)(3)(iii)(D) and (b)(4)(iii), by redesignating paragraph (d) as (e),
and by adding new paragraph (d), and by revising redesignated paragraph
(e) to read as follows:
Sec. 746.2 Cuba.
(a) * * *
(1) * * *
(xii) Exports of agricultural commodities, classified as EAR99,
under License Exception Agricultural Commodities (AGR) and certain
reexports of U.S. origin agricultural commodities, classified as EAR99,
under License Exception AGR (see Sec. 740.18 of the EAR).
* * * * *
(b) * * *
(1) Medicines and Medical Devices. Applications to export medicines
and medical devices as defined in part 772 of the EAR will generally be
approved, except:
* * * * *
(3) * * *
(iii) * * *
(B) Your transaction involves the export of foreign-produced
medicines or medical devices incorporating U.S. origin parts,
components or materials, in which case the application will be reviewed
according to the provisions of paragraph (b)(1) of this section.
(C) * * *
(D) Your transaction is for the export of donated food to
individuals or non-governmental organizations in Cuba and does not
qualify as a humanitarian donation under License Exception GFT
(Sec. 740.12 of the EAR) or License Exception AGR (Sec. 740.18 of the
EAR).
(4) * * *
(iii) Exports of agricultural items, which are outside the scope of
agricultural commodities as defined in part 772 of the EAR, such as
insecticides, pesticides and herbicides, as well as agricultural
commodities not eligible for License Exception AGR, require a license
and will be reviewed on a case-by-case basis.
* * * * *
(d) Definitions. For purposes of this section, ``U.S. person''
means any person subject to the jurisdiction of the United States, as
described in Sec. 515.329 of the Cuban Assets Control Regulations (31
CFR 515.329).
(e) Related controls. OFAC maintains controls on the activities of
persons subject to U.S. jurisdiction, wherever located, involving
transactions with Cuba or any specially designated Cuban national, as
provided in 31 CFR part 515. OFAC's Terrorism List Government Sanctions
Regulations in 31 CFR part 596 prohibit U.S. persons from engaging in a
financial transaction with the government of a designated state sponsor
of international terrorism without OFAC authorization. The Department
of State also implements sanctions on countries that are designated
state sponsors of international terrorism. Exporters and reexporters
should consult with those agencies for further guidance on these
related controls.
14. Section 746.3 is amended by revising paragraph (a) introductory
text to read as follows:
Sec. 746.3 Iraq.
(a) License requirements. OFAC administers an embargo against Iraq
under the authority of the International Emergency Economic Powers Act
of 1977, as amended, and the United Nations Participation Act of 1945,
as amended, and in conformance with United Nations Security Council
Resolutions. The applicable OFAC regulations, the Iraqi Sanctions
Regulations, are found in 31 CFR part 575. You should consult with OFAC
for authorization to export or reexport items subject to U.S.
jurisdiction to Iraq, or to any entity owned or controlled by, or
specially designated as acting for or on behalf of, the Government of
Iraq. Please note that such applications will generally be denied by
OFAC, absent a published policy stating otherwise. Under the EAR, you
need a license to export or reexport to Iraq any item on the CCL
containing a CB Column 1, CB
[[Page 36683]]
Column 2, CB Column 3, NP Column 1, NP Column 2, NS Column 1, NS Column
2, MT Column 1, RS Column 1, RS Column 2, CC Column 1, CC Column 2, CC
Column 3 in the Country Chart Column of the License Requirements
section of an ECCN, or classified under ECCNs 1C980, 1C981, 1C982,
1C983, 1C984, 1C997, 5A980, 0A980, 0A982, 0A983, 0A985, and 0E982;
however, to avoid duplication, an authorization from OFAC constitutes
authorization under the EAR, and no separate BXA authorization is
necessary. No person may export or reexport any item subject to both
the EAR and OFAC's Iraqi Sanctions Regulations without prior OFAC
authorization. Exports and reexports subject to the EAR that are not
subject to the Iraqi Sanctions Regulations may require authorization
from BXA.
* * * * *
15. Section 746.7 is amended by adding a sentence to the end of the
introductory paragraph, to read as follows:
Sec. 746.7 Iran.
* * * Exports and reexports subject to the EAR that are not subject
to the Iranian Transactions Regulations may require authorization from
BXA.
* * * * *
PART 772--[AMENDED]
16. Section 772.1 is amended by adding the definitions of
``agricultural commodities'', ``medical devices'', and ``medicines'' in
alphabetical order, to read as follows:
Sec. 772.1 Definitions of terms as used in the Export Administration
Regulations (EAR).
* * * * *
Agricultural commodities. Agricultural commodities include food
(including processed food); feed; fish; shellfish and fish products;
beer, wine and spirits; livestock; fiber including cotton, wool and
other fibers; tobacco and tobacco products; wood and wood products;
seeds; fertilizer and organic fertilizer; reproductive materials such
as fertilized eggs, embryos and semen. For the purposes of the EAR,
agricultural commodities do not include furniture made from wood;
clothing manufactured from plant or animal materials; agricultural
equipment (whether hand tools or motorized equipment); pesticides,
insecticides, or herbicides; or cosmetics (unless derived entirely from
plant materials).
Note 1: This definition of agricultural commodities includes
fertilizer and organic fertilizer, as listed in section 775 of the
2001 Agriculture, Rural Development, Food and Drug Administration,
and Related Agencies Appropriations Act (Act) (Public Law 106-387)
and commodities listed in section 102 of the Agricultural Trade Act
of 1978 (7 U.S.C. 5602) as incorporated in section 902 of the Act,
as well as commodities determined by the Department of Agriculture
to fall within the scope of section 102 of the 1978 Agricultural
Trade Act.
Note 2: For purposes of License Exception AGR (see Sec. 740.18
of the EAR), agricultural commodities also include vitamins,
minerals, food additives and dietary supplements, and bottled water.
These items do not fall within the scope of section 102 of the 1978
Agricultural Trade Act, but are treated as agricultural commodities
for the purposes of License Exception AGR.
Note 3: For purposes of License Exception AGR and export license
applications to Iran, Sudan and Libya under the licensing procedures
set forth in the appropriate regulations promulgated and
administered by Treasury's Office of Foreign Assets Control,
agricultural commodities only include those that are classified as
EAR99.
* * * * *
Medical devices. For purposes of the EAR, medical devices are
``devices'' as defined in section 201 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321) including medical supplies, instruments,
equipment, equipped ambulances, institutional washing machines for
sterilization, and vehicles with medical testing equipment. Note that
certain component parts and spares to be exported for incorporation
into medical devices are on the Commerce Control List. Only items
meeting the definition of ``medical device'' and that are classified as
EAR99 are eligible for export to Iran, Libya and Sudan under the
licensing procedures set forth in the appropriate regulations
promulgated and administered by Treasury's Office of Foreign Assets
Control.
Medicines. Medicines means ``drug'' as defined in section 201 of
the Federal Food, Drug and Cosmetic Act (21 U.S.C. 321). For purposes
of the EAR, medicines includes prescription and over the counter
medicines for humans and animals. Note that certain medicines, such as
vaccines and immunotoxins, are on the Commerce Control List. Only items
meeting the definition of ``medicine'' and that are classified as EAR99
are eligible for export to Iran, Libya and Sudan under the licensing
procedures set forth in the appropriate regulations promulgated and
administered by Treasury's Office of Foreign Assets Control.
* * * * *
PART 774--[AMENDED]
17. In Supplement No. 1 to part 774 (the Commerce Control List),
Category 1--Materials, Chemicals, ``Microorganisms,'' and ``Toxins'' is
amended by adding Export Control Classification Number (ECCN) 1C997 to
read as follows:
1C997 Ammonium Nitrate, Including Fertilizers and Fertilizer
Blends Containing More Than 15% by Weight Ammonium Nitrate, Except
Liquid Fertilizers (Containing Any Amount of Ammonium Nitrate) or
Dry Fertilizers Containing Less Than 15% by Weight Ammonium Nitrate
License Requirements
Reason for Control: AT.
------------------------------------------------------------------------
Control(s) Country chart
------------------------------------------------------------------------
AT applies to entire entry................ AT Column 1 and Iraq
------------------------------------------------------------------------
License Exceptions
LVS: N/A.
GBS: N/A.
CIV: N/A.
List of Items Controlled
Unit: Kilograms.
Related Controls: N/A.
Related Definitions: N/A.
Items: The list of items controlled is contained in the ECCN
heading.
Dated: July 9, 2001.
James J. Jochum,
Assistant Secretary for Export Administration.
[FR Doc. 01-17465 Filed 7-10-01; 11:02 am]
BILLING CODE 3510-33-P