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On Feb. 24, the U.S. Department of Commerce Bureau of Industry and Security (BIS) issued a final rule <a href="https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2023/3226-88-fr-12108-implementation-of-2021-wassenaar-rin-0694-ai72-2-24-23/file">amending the Commerce Control List (CCL)</a> in part 774 of the Export Administration Regulations (EAR) to complete implementation of the revisions adopted at the 2021 Wassenaar Arrangement Plenary meeting (hereinafter the <a href="https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2023/3226-88-fr-12108-implementation-of-2021-wassenaar-rin-0694-ai72-2-24-23/file">2021 Wassenaar Rule</a>).  Key changes made by the 2021 Wassenaar Rule include:  <ul> 	<li>Revising 16 export control classification numbers (ECCNs): 1A613, 1C006, 2E003, 3A001, 3A002, 4A003, 4D001, 4E001, 5A003, 6A005, 6A008, 6D003, 7D003, 9A004, 9B001 and 9E003.</li> 	<li>Revising Annex to Category 1, List of Explosives by adding EDNA and TKX-50 under two entries.</li> 	<li>Removing one ECCN: 0A988.</li> 	<li>Revising the CCL, as well as certain EAR provisions, including License Exception Adjusted Peak Performance (APP) and License Exception Strategic Trade Authorization (STA).</li> 	<li>Corrections to align the scope of Significant Item (SI) license requirements throughout the EAR.</li> </ul>  These changes emphasize the compliance importance of periodically reevaluating previously classified items to ensure that the assigned classification has not been impacted by the frequent changes to the CCL.  Further details regarding the 2021 Wassenaar Rule are discussed below.  The <a href="https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2023/3226-88-fr-12108-implementation-of-2021-wassenaar-rin-0694-ai72-2-24-23/file">2021 Wassenaar Rule</a> implemented by BIS on Feb. 24 completes the changes to the EAR from the December 2021 Wassenaar Arrangement Plenary meeting. The <a href="https://www.wassenaar.org/about-us/">Wassenaar Arrangement</a> is a multilateral agreement consisting of 42 participating countries committed to imposing similar controls on technology, commodities and software for national security purposes. As a result of being a participating state of the Wassenaar Arrangement, BIS must periodically update the CCL to reflect changes agreed to by the participating states of the Wassenaar Arrangement. BIS previously implemented some of the revisions in a final rule in August 2022.  The <a href="https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2023/3226-88-fr-12108-implementation-of-2021-wassenaar-rin-0694-ai72-2-24-23/file">2021 Wassenaar Rule</a> made certain technical revisions and corrections to various CCL categories as well as certain EAR provisions, including License Exception APP, the scope of SI license requirements throughout the EAR, and revision to License Exception STA.  Revisions to <a href="https://www.ecfr.gov/current/title-15/subtitle-B/chapter-VII/subchapter-C/part-774?toc=1">CCL</a> provisions include the following:   <ul> 	<li>ECCN 0A988 – Conventional Military Steel Helmets: Removed the ECCN because BIS moved the covered helmets to ECCN 1A613.y.1 in 2014.</li> 	<li>ECCN 1C006 – Fluids and Lubricating Materials: Revised by removing fluorinated silicone fluids (paragraph b.2) from the ECCN and classified them as EAR99.</li> 	<li>Annex to Category 1, List of Explosives (see ECCNs 1A004 and 1A008): Revised to add two explosives currently listed on the Wassenaar Arrangement Munitions List: EDNA (ethylenedinitramine) (CAS 505–71–5) and TKX–50 (dihydroxylammonium 5,5&#39;-bistetrazole-1,1&#39;-diolate).</li> 	<li>ECCN 2E003 Other – “Technology”: The final rule removed ECCN 2E003.b.2 (technical data consisting of process methods) from the CCL as such technology is now in wide commercial use.</li> 	<li>ECCN 4A003 – “Digital Computers”: Revised to make several technical corrections and to raise the APP threshold for certain digital computers from 29 weighted teraflops (WT) to 70 WT.</li> 	<li>ECCNs 4D001 and 4D002 – “Software” and “Technology” Associated with ECCN 4A003: Revised in line with the above changes to ECCN 4A003.</li> 	<li>ECCN 6A005 – “Lasers,” “Components” and “Optical Equipment”: Revised to increase the average or CW  output power for individual “multiple transverse mode” semiconductor “lasers” from 15 watts to 25 watts.</li> 	<li>ECCN 9B001 – Manufacturing Equipment, Tooling or Fixtures: The final rule broadened the controls in this ECCN by replacing “specially designed” with “designed” and replacing the phrase “manufacturing gas turbine engine blades, vanes or tip shrouds” with “… superalloys,” a broader term referring to certain highly durable materials. The changes are focused on addressing additive manufacturing equipment designed to work with superalloys.</li> </ul>  The rule also made various technical corrections to the following ECCN categories:  <ul> 	<li>ECCN 1A613 – Armored and Protective “Equipment” and Related Commodities.</li> 	<li>ECCN 3A001 – Electronic Items.</li> 	<li>ECCN 3A002 – General Purpose “Electronic Assemblies,” Modules and Equipment.</li> 	<li>ECCN 5A003 – “Systems,” “Equipment” and “Components” for Non-Cryptographic “Information Security.”</li> 	<li>ECCN 6A008 – Radar Systems, Equipment and Assemblies.</li> 	<li>ECCN 6D003 – Other “Software.”</li> 	<li>ECCN 7D003 – Other “Software.”</li> 	<li>ECCN 9A004 – Space Launch Vehicles and “Spacecraft” et al.</li> 	<li>ECCN 9E003 – Other “Technology.”</li> </ul>  Further, the <a href="https://www.bis.doc.gov/index.php/documents/regulations-docs/federal-register-notices/federal-register-2023/3226-88-fr-12108-implementation-of-2021-wassenaar-rin-0694-ai72-2-24-23/file">2021 Wassenaar Rule</a> revised the following EAR provisions:  <ul> 	<li>§ 740.7 License Exception APP: The final rule raised the APP eligibility levels for deemed exports of “technology” and “software” source code destined to foreign nationals of Computer Tier 1 (from 40 WT to 175 WT for development and production technology/source code and from 200 WT to 500 WT for use technology/source code) and Computer Tier 3 (from 16 WT to 50 WT for development and production technology/source code and from 32 WT to 140 WT for use technology/source code) countries.</li> 	<li>§§ 734.4(a)(4) and 742.14(a) and (b) – SI: Hot Section Technology: A “hot section” refers to the portion of a gas turbine engine that operates at a high temperature, i.e., the combustion, turbine and exhaust sections. The final rule corrected the list of items included as SI in the de minimis rules in §§ 734.4(a)(4)and 742.14(a) and (b) so as to align with the SI license requirements in ECCN 9E003.</li> 	<li>§ 740.20 – License Exception STA: A new paragraph (b)(2)(viii)(A) was added to License Exception STA to harmonize License Exception STA with the STA special condition under ECCN 9B001 restricting its use for a Country Group A:6 destination. BIS implied that further edits to License Exception STA may be forthcoming.</li> </ul>  The above changes went into effect on Feb. 24, except for the revisions to ECCNs 4A003 and 4D001 and the change to License Exception APP, which were effective March 14.  Given the periodic changes to the CCL, including those arising in connection with U.S. participation in the Wassenaar Arrangement, it is important to ensure that you are always using the updated regulations and CCL for any classification and export licensing determination. It is also a best practice to periodically reevaluate previously classified items to ensure that the assigned classification has not been impacted by changes to the CCL.  <hr /> Please do not hesitate to reach out to any member of our International Trade and National Security team or your BakerHostetler relationship partner with questions.

US Department of Commerce Updates the Commerce Control List

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