[Federal Register Volume 67, Number 111 (Monday, June 10, 2002)]
[Notices]
[Pages 39675-39676]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-14217]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 020514120-2120-01]
RIN 0694-AC63


Computer Technology and Software Eligible for Export or Reexport 
Under License Exception TSR (Technology and Software Under Restriction)

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Notice of inquiry.

-----------------------------------------------------------------------

SUMMARY: The Bureau of Industry and Security (BIS) is reviewing the 
current limit for use of License Exception TSR for exports and 
reexports of technology and software on the Commerce Control List (CCL) 
of the Export Administration Regulations (EAR) under Export 
Classification Control Numbers (ECCNs) 4D001 and 4E001. These ECCNs 
control technology and software that can be used for the development, 
production, or use of computers. The goal of this notice of inquiry is 
to collect information from industry that will assist BIS in evaluating 
whether the current TSR eligibility level of 33,000 Millions of 
Theoretical Operations per Second (MTOPS) for exports and reexports to 
most countries should be adjusted, taking into consideration the 
control level for the export of computer equipment and the control 
policies of other member countries of the Wassenaar Arrangement.

DATES: Comments must be received by July 10, 2002.

ADDRESSES: Written comments (four copies) should be sent to Sharron 
Cook, Regulatory Policy Division, Office of Exporter Services, Bureau 
of Industry and Security, Department of Commerce, 14th and Pennsylvania 
Avenue, NW., PO Box 273, Room 2705, Washington, DC 20230; or one copy 
E-Mailed to: [email protected]; or faxed to 202-482-3355.

FOR FURTHER INFORMATION CONTACT: Sharron Cook, Senior Export Policy 
Analyst, Office of Exporter Services, Regulatory Policy Division, 
Bureau of Industry and Security, Telephone: (202) 482-2440.

SUPPLEMENTARY INFORMATION:

Background

    The Wassenaar Arrangement on Export Controls for Conventional Arms 
and Dual-Use Goods and Technologies (Arrangement) is one of four 
multilateral export control regimes in which the United States 
participates. The Arrangement's purpose is to contribute to regional 
and international security and stability by promoting transparency and 
greater responsibility in transfers of conventional arms and dual-use 
goods and technologies (i.e., having civil and military uses) to 
prevent destabilizing accumulations of those items by countries of 
concern. The Arrangement establishes lists of items to which member 
countries are to apply export controls. Member governments implement 
these controls to ensure that transfers of the controlled items do not 
contribute to the development or enhancement of military capabilities 
that undermine the goals of the Arrangement, and are not diverted to 
support such capabilities. In addition, the Arrangement imposes some 
reporting requirements on its member governments.
    The U.S. Government controls all items for export that are 
controlled multilaterally by the Arrangement. In general, the U.S. 
Department of Commerce administers export controls for dual-use goods 
and technologies controlled in the Arrangement, and the U.S. Department 
of State administers export controls on conventional arms.
    Through the Export Administration Regulations (EAR), the Commerce 
Department controls the export and reexport of technology and software 
for the development, production, or use of computers with a Composite 
Theoretical Performance (CTP) greater than 28,000 Millions of 
Theoretical Operations per Second (MTOPS) under Export Control 
Classification Numbers (ECCNs) 4E001 and 4D001 of the Commerce Control 
List (CCL). Such technology requires a license, for national security 
(NS) reasons, to all destinations except Canada. However, ECCNs 4E001 
and 4D001 provide that License Exception TSR (section 740.6 of the EAR) 
is available for exports and reexports of such technology and software: 
(1) For computers of unlimited CTP to 22 countries (former member 
countries of the Coordinating Committee for Multilateral Export 
Controls (COCOM) or former cooperating countries of COCOM) when the 
transaction meets certain eligibility criteria; and (2) for computers 
with a CTP less than or equal to 33,000 MTOPS to countries listed in 
Country Group B (Supplement No. 1 to part 740).
    Under the Wassenaar Arrangement, there are currently three levels 
of sensitivity for computers and computer technology. Equipment, 
technology and software are controlled for computers with a CTP of 
28,000 MTOPS on the Basic List, 75,000 MTOPS on the Sensitive List, and 
150,000 MTOPS on the Very Sensitive List.
    Historically, the U.S. has required a license for any item on the 
Wassenaar Very Sensitive List, and has made such items generally 
ineligible for license exceptions. However, in March of this year, BIS 
implemented a Presidential decision to allow exports and reexports of 
computers with a CTP of up to 190,000 MTOPS under license exception CTP 
to Computer Tier 3 Countries (see section 740.7(d)(1) of the EAR for a 
list of these countries) to reflect rapid technological advances in 
computing capability. The President's report to Congress stated that 
this change was to ``promote our national security, enhance the 
effectiveness of our export control system and ease unnecessary 
regulatory burdens on both government and industry.'' Industry, through 
the Regulations and Procedures Technical Advisory Committee (RPTAC), 
has requested that BIS raise the CTP limit for license exception TSR 
eligibility of technology and software for the development, production, 
and use of these computers. One reason stated by industry is that 
companies need a limit for technology and software corresponding to the 
limit for equipment in order to provide foreign nationals working in 
their U.S. and foreign manufacturing plants access to this technology 
and software.
    The goal of this notice is to collect information from industry 
that will assist BIS in evaluating the current control level on the 
export of computer technology and software.
    To ensure maximum public participation in the review process, 
comments are solicited for the next 30 days on the effect of the 
current CTP limit of 33,000 MTOPS for license exception TSR eligibility 
of technology and software for the development, production, and use of 
computers. BIS is interested in comments relating to the following:
    (1) What is the purpose of U.S. companies in exporting technology 
and software for the development, production, and use of computers with 
a CTP greater than 33,000 MTOPS? Are the exports for transfers to U.S. 
subsidiaries, branches, or joint ventures that manufacture products 
abroad; sales to foreign manufacturers; or largely for release to 
foreign nationals for work

[[Page 39676]]

designing and developing new products in the United States?
    (2) If the exports of software and technology are largely to 
foreign nationals for work in designing and developing new products in 
the United States, what is the economic and competitiveness impact on 
U.S. industry of maintaining the current TSR level? Does maintaining 
the current level impair the timely introduction of new products into 
the market?
    (3) What percentage of current employees is restricted by TSR 
limits? What percentage is expected to be limited in 2-3 years? In 5-7 
years?
    (4) What is the foreign availability of technology and software for 
the production, development, and use of computers with a CTP greater 
than 33,000 MTOPS?
    (5) What controls do U.S. trade partners maintain on the export of 
technology and software for the development, production, and use of 
computers? What are the MTOPS limits and do our trade partners use 
license exceptions or other licensing measures?
    (6) In light of recent changes in architectures and technology, 
what performance levels can be identified for TSR limits? What 
alternate methods or metrics should be considered for technology and 
software control under TSR?
    (7) Any other information relevant to the current 33,000 MTOPS TSR 
level.
    (8) Additional views on the format of license exception TSR 
eligibility language.
    Parties submitting comments are asked to be as specific as 
possible. The Department encourages interested persons who wish to 
comment to do so at the earliest possible time.
    The period for submission of comments will close July 10, 2002. 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 
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 persons submitting the comments and will not consider 
them in the development of final regulations. All comments on these 
regulations will be a matter of public record and will be available for 
public inspection and copying. The Department requires comments be 
submitted in written form.
    The public record concerning these comments will be maintained in 
the Bureau of Industry and Security, 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 
BIS's FOIA Web site (which can be reached through http://www.bis.doc.gov/foia). If the records sought cannot be located at this 
site, or if the requester does not have access to a computer, please 
call the phone number above for assistance.

    Dated: May 31, 2002.
James J. Jochum,
Assistant Secretary for Export Administration.
[FR Doc. 02-14217 Filed 6-7-02; 8:45 am]
BILLING CODE 3510-33-P