BIS Publishes Rule Containing New Policy on Libya's "Installed Base" and Making Other Changes to Export Controls on Libya
The Bureau of Industry and Security (BIS) today published in the Federal Register the long-awaited regulation providing guidance to U.S. companies on dealing with "installed base" items in Libya and making other changes to export and reexport controls on Libya.
Based on public comments received in response to the BIS's April 29, 2004 interim rule modifyting the U.S. embargo on Libya, the regulation issued by BIS establishes a review policy and licensing procedure for activities involving items subject to the Export Administration Regulations (EAR) that may have been illegally exported or reexported to Libya before the U.S. embargo on Libya ended (commonly known as "installed base" items). To facilitate U.S. companies' participation in the Libyan markets BIS has added Section 764.7 of the EAR to require a report or license, depending on the nature of the product. Activities involving the following installed base items will generally only require a report to BIS: (1) items that are subject to the EAR but are not on the Commerce Control List (CCL); (2) items on the CCL that are now authorized for export and reexport to Libya under a License Exception; and (3) items on the CCL that are controlled only for NS and AT or AT reasons only and are not on the Wassenaar Arrangement's Sensitive List or Very Sensitive List. Activities involving all other installed base items listed on the CCL will require a BIS license.
The rule also makes a number of other changes to the EAR involving Libya, including:
A. Modifying the licensing policy for some commercial explosive charges (perforators) classified under Export Control Classification Number (ECCN) 1C992 to a case-by-case review, rather than a policy of denial. In conducting such reviews, BIS will take into account the end-use and end-user and the ability of the exporter and consignee to ensure the safety of the charges during transport to and within Libya, and while in storage in Libya.
B. Revising License Exception Aircraft and Vessels (AVS) to permit vessels to make temporary sojourns to Libya without a license.
C. Modifying the language in License Exception Temporary Imports, Exports and Reexports (TMP) to clarify that software controlled under ECCN 5D992 may be exported to any destination that permits use of License Exception TMP.
D. Modifying the licensing policy for the export or reexport of U.S.-origin civil aircraft and helicopters subject to the EAR to Libya to case-by-case review rather than udner a general policy of denial.
E. Clarifying that portable electric power generators, controlled under ECCN 2A994, and related software and technology, controlled under ECCNs 2D994 and 2E994, require a license for export or reexport to Libya for anti-terrorism reasons.
F. Modifying ECCN 8A992 to clarify that it addresses vessels in addition to submersible items.
G. Correcting an error in the April 29, 2004 interim rule, which omitted an "X" in the NP:2 column for Libya on the Commerce Country Chart, Supplement 1 to Part 738 of the EAR.
In response to a comment requesting that the general policy of denial for software controlled under ECCN 5D002 for national security (NS), encryption (EI) and anti-terrorism (AT) reasons be changed to a case-by-case review, BIS refused to do so and stated that "a general policy of denial best represents the concerns of the United States regarding Libyan access to 5D002 software."
Finally, in response to comments requesting BIS to remove unilateral anti-terrorism (AT) controls imposed by the U.S. on Libya, BIS stated that, despite Libya's "progress in altering its behavior," the U.S. will continue to impose anti-terrorism (AT) controls on Libya as deemed appropriate.
The complete text of the final rule can be found at the following link:
Based on public comments received in response to the BIS's April 29, 2004 interim rule modifyting the U.S. embargo on Libya, the regulation issued by BIS establishes a review policy and licensing procedure for activities involving items subject to the Export Administration Regulations (EAR) that may have been illegally exported or reexported to Libya before the U.S. embargo on Libya ended (commonly known as "installed base" items). To facilitate U.S. companies' participation in the Libyan markets BIS has added Section 764.7 of the EAR to require a report or license, depending on the nature of the product. Activities involving the following installed base items will generally only require a report to BIS: (1) items that are subject to the EAR but are not on the Commerce Control List (CCL); (2) items on the CCL that are now authorized for export and reexport to Libya under a License Exception; and (3) items on the CCL that are controlled only for NS and AT or AT reasons only and are not on the Wassenaar Arrangement's Sensitive List or Very Sensitive List. Activities involving all other installed base items listed on the CCL will require a BIS license.
The rule also makes a number of other changes to the EAR involving Libya, including:
A. Modifying the licensing policy for some commercial explosive charges (perforators) classified under Export Control Classification Number (ECCN) 1C992 to a case-by-case review, rather than a policy of denial. In conducting such reviews, BIS will take into account the end-use and end-user and the ability of the exporter and consignee to ensure the safety of the charges during transport to and within Libya, and while in storage in Libya.
B. Revising License Exception Aircraft and Vessels (AVS) to permit vessels to make temporary sojourns to Libya without a license.
C. Modifying the language in License Exception Temporary Imports, Exports and Reexports (TMP) to clarify that software controlled under ECCN 5D992 may be exported to any destination that permits use of License Exception TMP.
D. Modifying the licensing policy for the export or reexport of U.S.-origin civil aircraft and helicopters subject to the EAR to Libya to case-by-case review rather than udner a general policy of denial.
E. Clarifying that portable electric power generators, controlled under ECCN 2A994, and related software and technology, controlled under ECCNs 2D994 and 2E994, require a license for export or reexport to Libya for anti-terrorism reasons.
F. Modifying ECCN 8A992 to clarify that it addresses vessels in addition to submersible items.
G. Correcting an error in the April 29, 2004 interim rule, which omitted an "X" in the NP:2 column for Libya on the Commerce Country Chart, Supplement 1 to Part 738 of the EAR.
In response to a comment requesting that the general policy of denial for software controlled under ECCN 5D002 for national security (NS), encryption (EI) and anti-terrorism (AT) reasons be changed to a case-by-case review, BIS refused to do so and stated that "a general policy of denial best represents the concerns of the United States regarding Libyan access to 5D002 software."
Finally, in response to comments requesting BIS to remove unilateral anti-terrorism (AT) controls imposed by the U.S. on Libya, BIS stated that, despite Libya's "progress in altering its behavior," the U.S. will continue to impose anti-terrorism (AT) controls on Libya as deemed appropriate.
The complete text of the final rule can be found at the following link:
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