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In implementation of and consistent with broadened Export Control Reform Act (ECRA) authority to control U.S. person activities that are not otherwise subject to the Export Administration Regulations (EAR), the Department of Commerce, Bureau of Industry and Security (BIS) is proposing EAR amendments to control U.S. persons support of military and intelligence end users and end uses. In addition, BIS proposes restrictions on exports, re-exports, and transfers (in-country) to these end users and end uses. In a complementary rule, the Department of State, Directorate of Defense Trade Controls, is also proposing revisions to the defense services provisions of the International Traffic in Arms Regulations.

Statement of Need:

These revisions and additions to the EAR’s end-use, end-user, and U.S. persons activity controls would implement expanded Export Control Reform Act of 2018 (ECRA) authority to control certain U.S. persons activities under the EAR.

Summary of the Legal Basis:

Section 5589(b) of the December 2022 National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023 (Pub. L. 117-263, NDAA for FY 2023) amended section 1753(a)(2)(F) of the Export Control Reform Act of 2018 (ECRA) (50 USC 4812(a)(2)(F)) by providing the Bureau of Industry and Security (BIS) with the statutory authority to impose controls on the activities of United States persons, wherever located, relating to specific foreign military, security, or intelligence services.

Alternatives:

No alternatives were contemplated as these revisions implement the expanded ECRA authority.

Anticipated Costs and Benefits:

ECRA is exempt from Cost and Benefit analysis because of the military and foreign policy nature of the controls. 

This rule increases the estimated number of license application submissions by 150 which is not expected to exceed the current approved estimates in the OMB authorized Paperwork Reduction Act (PRA) collection.

Further, BIS is seeking public comment on this rule, which will inform BIS of additional costs and benefits of the revisions in this rule.

Risks:

The revisions and additions, along with clarifications, to end use, end user, and U.S. persons activity controls under the EAR, would further the national security and the foreign policy of the United States.  To not implement this rule would pose a risk to the national security and foreign policy of the United States.