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Rule

Revisions to the Export Administration Regulations Based on the 2005 Missile Technology Control Regime Plenary Agreements

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AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Final rule.

SUMMARY:

The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to reflect changes to the Missile Technology Control Regime (MTCR) Annex that were agreed to by MTCR member countries at the September 2005 Plenary in Madrid, Spain. The amendments set forth in this rule also reflect a change to make one additional missile technology (MT) controlled item available for certain license exceptions.

DATES:

Effective Date: This rule is effective: July 31, 2006.

ADDRESSES:

Although this is a final rule, comments are welcome and should be sent to publiccomments@bis.doc.gov, fax (202) 482-3355, or to Regulatory Policy Division, Bureau of Industry and Security, Room H2705, U.S. Department of Commerce, Washington, DC 20230. Please refer to regulatory identification number (RIN) 0694-AD65 in all comments, and in the subject line of email comments. Comments on the collection of information should be sent to David Rostker, Office of Management and Budget (OMB), by e-mail to David_Rostker@omb.eop.gov, or by fax to (202) 395-7285.

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FOR FURTHER INFORMATION CONTACT:

Michael E. Rithmire, Nuclear and Missile Technology Controls Division, Bureau of Industry and Security, Telephone: (202) 482-6105.

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SUPPLEMENTARY INFORMATION:

Background

The Missile Technology Control Regime (MTCR) is an export control arrangement among 34 nations, including the world's most advanced suppliers of ballistic missiles and missile-related materials and equipment. The regime establishes a common export control policy based on a list of controlled items (the Annex) and on guidelines (the Guidelines) that member countries follow to implement national export controls. The goal of Start Printed Page 43044maintaining the Annex and the Guidelines is to stem the flow of missile systems capable of delivering weapons of mass destruction to the global marketplace.

While the MTCR was originally created to prevent the spread of missiles capable of carrying a nuclear warhead, it was expanded in January 1993 to also stem the flow of delivery systems for chemical and biological weapons. MTCR members voluntarily pledge to adopt the regime's export Guidelines and to restrict the export of items contained in the regime's Annex. The implementation of the regime's Guidelines is effectuated through the national export control laws and policies of the regime members.

Amendments to the Export Administration Regulations

This rule revises the Export Administration Regulations (EAR) to reflect changes to the MTCR Annex agreed to at the September 2005 Plenary in Madrid, Spain. Specifically, in § 740.2 (Restrictions on all License Exceptions), this rule amends paragraph (a)(5) which includes a general restriction on using license exceptions for MT controlled items, by adding an additional Export Control Classification Number (ECCN) 2A001 as one of the ECCNs for which certain license exceptions are available. Paragraph (a)(5) prohibits the use of license exceptions for items controlled for MT reasons, but exempts certain listed ECCNs from this prohibition. This rule makes the MT controlled commodities of ECCN 2A001 available for license exceptions TMP and RPL when those commodities are being exported or reexported as one-for-one replacement for equipment previously legally exported or reexported.

Because the scope of availability of this exception to the general restriction on MT controlled items is more broadly defined for License Exceptions TMP and RPL for ECCN 2A001 than for the other ECCNs listed in the first sentence of paragraph (a)(5), a new subparagraph (ii) is added to paragraph (a)(5) to clarify the scope of availability of License Exception TMP and RPL for ECCN 2A001. This new subparagraph (ii) creates an additional ECCN exception to the general restriction on using license exceptions for MT controlled items. Specifically, this new subparagraph (ii) states that MT controlled commodities described in ECCN 2A001 may be exported or reexported under § 740.9(a)(2)(ii) (License Exception TMP) and § 740.10 (License Exception RPL) as one-for-one replacement in equipment previously legally exported or reexported. In addition, to comply with Federal Register drafting requirements, this rule redesignates the introductory text to paragraph (a)(5) as new subpargraph (i).

Additionally, the MT control placed on ball bearings controlled under ECCN 2A001 was added as a result of the 2004 Plenary in Seoul, South Korea (MTCR Annex change, Category II: Item 3(A)(7)) and implemented in an amendment to the EAR on March 10, 2005 (FR 70 11858).

Even though the U.S. Government had consulted with its technical advisory committees before making the proposal to control certain ball bearings for MT reasons under ECCN 2A001 at the Seoul Plenary in 2004, those consultations did not reveal that bearings meeting the MTCR specification have a predominant use in certain machine tools. Therefore, given this additional information that has come to light regarding the use of these ball bearings in certain machine tools, the U.S. Government is proposing License Exception RPL to be available only for replacing worn out bearings. In addition, this was done because the interagency community agreed that for MT concerns, license review of the MT controlled commodities described in ECCN 2A001 was unnecessary when those commodities are exported or reexported as one-for-one replacements in equipment previously approved by the U.S. Government. It is anticipated that the availability of this license exception will result in a decrease in license applications.

In § 772.1 (Definitions of Terms as Used in the Export Administration Regulations), this rule adds a new definition to define the term “repeatability” as used in the context of MTCR controls on accelerometers. This new definition will aid the public in understanding the two new parameters known as “scale factor repeatability” and “bias repeatability” that are added to ECCN 7A101 with this rule. In addition, this rule adds a new definition to define the term “production facilities”. This new definition will aid the public in understanding the use of this term in ECCNs 7B103 and 9B116. Before the publication of this rule, the term “production facilities” was included in ECCNs 7B103 and 9B116 and was enclosed with quotation marks, which should have signified there was a definition for this term in § 772.1. However, due to an inadvertent omission, the definition of “production facilities” was not included in § 772.1. This rule corrects that omission by adding the definition of “production facilities” to § 772.1.

In addition, the Commerce Control List (CCL) (Supplement No. 1 to Part 774 of the EAR) is amended to reflect changes to the MTCR Annex agreed to at the September 2005 Plenary in Madrid, Spain. Specifically the following ECCNs are affected:

ECCNs 1C101, 7A102 and 7A103.b and c are amended to remove the quotation marks around the word missile. “Missile” is defined in the EAR, Part 772.1, as being capable of delivering at least a 500 kilogram payload to a range of at least 300 kilometers. However, items in 19.A. of the MTCR Annex do not contain a specific payload parameter for materials and components used therein. Therefore, the use of the word missile in the description of the items contained in these ECCNs no longer corresponds to the definition of “missile” in Part 772.1.

ECCN 1C107 is amended by adding the phrase “which can be machined to any of the following products” to the heading text (MTCR Annex Category II: Item 6(C)(3)). This phrase is being added to clarify that graphite shapes are still controlled by this ECCN when they are larger than the minimum dimensions specified in the entry. Prior to publication of this rule, ECCN 1C107 included specific minimum measurements for graphite pieces controlled by this ECCN, but it was unclear to the public and to BIS licensing officers whether certain graphite pieces exceeding these dimensions were controlled. By adding the phrase “which can be machined to any of the following products,” it will be clear to the public and to licensing officers that graphite pieces are still controlled by this ECCN when they are larger than the minimum dimensions specified in the entry.

ECCN 1C107 is also amended by deleting the word “recrystallized” from 1C107.a (MTCR Annex Category II: Item 6(C)(3)). This amendment is a clarification to the CCL that deletes the obsolete term “recrystallized”, which is a term that is no longer used by industry. This rule also replaces the word “particle” with the word “grain” in paragraph (a) to correspond with language in the MTCR Annex. Lastly, this rule deletes the imperial measurement of 288 K in paragraph (a) in favor of only listing the control parameter in terms of metric measurements. This change is being made because metric measurements are more commonly used by industry.

ECCN 7A101 is amended by revising the control parameter in this ECCN, which is expected to result in a decrease in license applications. Specifically this Start Printed Page 43045ECCN is amended by deleting the current parameters of “threshold” and “linearity error,” found in the heading, in favor of two new parameters known as “scale factor repeatability” and “bias repeatability.” For ease of use, these two new parameters, along with a new clarification note, are added to the “items” paragraph in the List of Items Controlled section instead of being added to the heading (MTCR Annex Change Category II: Item 9(A)(3)). These two new parameters will result in a more focused control on accelerometers of concern for “missiles.”

A note that is added to ECCN 7A101 to explain that bias and scale factor are determined by calculating the statistical average of repeated measurements over a one year period. This amendment is made to bring this entry in line with current industry practice for characterizing accelerometers. This focused control for accelerometers of concern will also result in a decontrol of accelerometers that are not usable for “missiles”. The change to the control parameters of this ECCN is expected to result in a decrease in license applications for approximately 29 different types of accelerometers.

The addition of one new MT controlled ECCN 9A103 is not expected to result in an increase in license applications submitted to BIS, because these commodities will be controlled by the Department of State under the International Traffic in Arms Regulations (ITAR). ECCN 9A103 is added to control liquid propellant tanks specially designed for the propellants controlled in ECCNs 1C011 or 1C111, or other liquid propellants used in “missiles.” (These commodities are subject to the export licensing authority of the U.S. Department of State, Directorate of Defense Trade Controls. See 22 CFR part 121) (MTCR Annex Change Category II: Item 3(A)(8)). This cross reference is being added to the EAR to make the public aware that these liquid propellant tanks are ITAR controlled. These liquid propellant tanks are being added to the EAR and also to the ITAR to diminish opportunities by countries involved in missile proliferation activities from acquiring these types of tanks for their “missile” programs.

ECCN 9A120 is amended to clarify that the control captures only those unmanned aerial vehicles incorporating, or designed or modified to incorporate, aerosol dispensing systems/mechanisms, to add specific Technical Notes to describe what is meant by an aerosol dispensing system/mechanism, and to note that 9A120 does not control model aircraft specially designed for recreational or competition purposes.

ECCN 9B106 is amended by deleting the imperial measurements of 223 K and 398 K in subparagraphs a.2.b. and b.2.b in favor of only listing the control parameters in terms of metric measurements. This change is being made because metric measurements are more commonly used by industry. (MTCR Annex Category II: Item 15(B)(4)) This rule change also adds a new note 2 to ECCN 9B106 to clarify the meaning of the term bare table in the context of MTCR-controlled environmental chambers. Before this rule, there was some question by the public regarding what constituted a bare table. This additional note will clarify that a bare table means “a flat table, or surface, with no fixture or fittings.” (MTCR Annex Category II: Item 15(B) Technical Note)

Savings Clause

Shipments of items removed from eligibility for a License Exception or export or reexport without a license (NLR) as a result of this regulatory action that were on dock for loading, on lighter, laden aboard an exporting or reexporting carrier, or en route aboard a carrier to a port of export or reexport, on July 31, 2006, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export or reexport without a license (NLR) so long as they are exported or reexported before August 30, 2006. Any such items not actually exported or reexported before midnight, on August 30, 2006, require a license in accordance with this rule.

Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as extended by the Notice of August 2, 2005, 70 FR 45273 (August 5, 2005), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act.

Rulemaking Requirements

1. This 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 to, 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 Office of Management and Budget Control Number. This rule contains a collection 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 58 minutes for a manual or electronic submission. BIS anticipates a slight decrease in license applications submitted as a result of this rule.

3. This rule does not contain policies with federalism implications as that term is defined under E.O. 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 (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 final rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under the Administrative Procedure Act or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable. Therefore, this regulation is issued in final form. Although there is no formal comment period, public comments on this regulation are welcome on a continuing basis. Comments should be submitted to Timothy Mooney, Office of Exporter Services, Bureau of Industry and Security, Department of Commerce, P.O. Box 273, Washington, DC 20044.

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List of Subjects

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Accordingly, parts 740, 772 and 774 of the Export Administration Regulations (

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PART 740—[AMENDED]

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1. The authority citation for

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Start Printed Page 43046 Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; Sec. 901-911, Pub. L. 106-387; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 2, 2005, 70 FR 45273 (August 5, 2005).

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2. Section 740.2 is amended by redesignating the text of paragraph (a)(5) as paragraph (a)(5)(i) and adding new paragraph (a)(5)(ii) to read, as follows:

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Restrictions on all License Exceptions.

(a) * * *

(5) * * *

(ii) MT controlled commodities described in ECCN 2A001 may be exported or reexported under § 740.9(a)(2)(ii) (License Exception TMP) or § 740.10 (License Exception RPL) as one-for-one replacement for equipment previously legally exported or reexported.

* * * * *
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PART 772—[AMENDED]

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3. The authority citation for

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Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 2, 2005, 70 FR 45273 (August 5, 2005).

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4. Section 772.1 is amended by adding, in alphabetical order, the definitions of “repeatability” and “production facilities”, as set forth below:

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Definitions of terms as used in the Export Administration Regulations (EAR).
* * * * *

Production Facilities”. (MTCR Context only) (Cat 7 and 9)—Means equipment and specially designed software therefor integrated into installations for development or for one or more phases of production.

* * * * *

Repeatability”. (MTCR Context only) (Cat 7)—According to IEEE Standard 528-2001 as follows: “The closeness of agreement among repeated measurements of the same variable under the same operating conditions when changes in conditions or non-operating periods occur between measurements”.

* * * * *
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PART 774—[AMENDED]

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5. The authority citation for

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Authority: 50 U.S.C. app. 2401 et seq.; 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; Sec. 901-911, Pub. L. 106-387; Sec. 221, Pub. L. 107-56; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 2, 2005, 70 FR 45273 (August 5, 2005).

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6. In Supplement No. 1 to part 774 (the Commerce Control List), Category 1—Materials, Chemicals, “Microorganisms” & “Toxins”, Export Control Classification Number (ECCN) 1C101 is amended by revising the Heading, to read as follows:

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Supplement No. 1 to Part 774—The Commerce Control List

* * * * *

1C101 Materials for Reduced Observables Such as Radar Reflectivity, Ultraviolet/Infrared Signatures and Acoustic Signatures (i.e., Stealth Technology), Other Than Those Controlled by 1C001, for Applications Usable in Missiles and Their Subsystems

* * * * *
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7. In Supplement No. 1 to part 774 (the Commerce Control List), Category 1—Materials, Chemicals, “Microorganisms” & “Toxins”, Export Control Classification Number (ECCN) 1C107 is amended by revising the Heading and the “items” paragraph in the List of Items Controlled section, to read as follows:

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1C107 Graphite and Ceramic Materials, Other Than Those Controlled by 1C007, Which Can be Machined to Any of the Following Products as Follows (See List of Items Controlled)

* * * * *

List of Items Controlled

Unit: * * *

Related Controls: * * *

Related Definitions: * * *

Items:

a. Fine grain graphites with a bulk density of 1.72 g/cm3 or greater, measured at 15 °C, and having a grain size of 100 micrometers or less, usable for rocket nozzles and reentry vehicle nose tips as follows:

a.1. Cylinders having a diameter of 120 mm or greater and a length of 50 mm or greater;

a.2. Tubes having an inner diameter of 65 mm or greater and a wall thickness of 25 mm or greater and a length of 50 mm or greater;

a.3. Blocks having a size of 120 mm x 120 mm x 50 mm or greater.

b. Pyrolytic or fibrous reinforced graphites, usable for rocket nozzles and reentry vehicle nose tips;

c. Ceramic composite materials (dielectric constant is less than 6 at any frequency from 100 MHz to 100 GHz), for use in missile radomes; and

d. Bulk machinable silicon-carbide reinforced unfired ceramic, usable for nose tips.

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8. In Supplement No. 1 to part 774 (the Commerce Control List), Category 7—Navigation and Avionics, Export Control Classification Number (ECCN) 7A101 is amended by revising the Heading and the “items” paragraph of the List of Items Controlled section, to read as follows:

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7A101 Linear Accelerometers, Other Than Those Controlled by 7A001 (See List of Items Controlled)

* * * * *

List of Items Controlled

Unit: * * *

Related Controls: * * *

Related Definitions: * * *

Items:

a. Designed for use in inertial navigation systems or in guidance systems of all types, usable in “missiles” having all of the following characteristics, and specially designed components therefore:

1. ‘Scale factor’ “repeatability” less (better) than 1250 ppm; and

2. ‘Bias’ “repeatability” less (better) than 1250 micro g.

Note:

The measurement of ‘bias’ and ‘scale factor’ refers to one sigma standard deviation with respect to a fixed calibration over a period of one year.

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9. In Supplement No. 1 to part 774 (the Commerce Control List), Category 7—Navigation and Avionics, Export Control Classification Number (ECCN) 7A102 is amended by revising the Heading, to read as follows:

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7A102 All Types of Gyros, Other Than Those Controlled by 7A002, Usable in Missiles, With a Rated “Drift Rate” “Stability” of Less Than 0.5° (1 Sigma or rms) per Hour in a 1 g Environment and Specially Designed Components Therefor

* * * * *
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10. In Supplement No. 1 to part 774 (the Commerce Control List), Category 7—Navigation and Avionics, Export Control Classification Number (ECCN) 7A103 is amended by revising the “items” paragraph of the List of Items Controlled section, to read as follows:

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7A103 Instrumentation, Navigation Equipment snd Systems, Other Than Those Controlled by 7A003, and Specially Designed Components Therefor

* * * * *
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List of Items Controlled

Unit: * * *

Related Controls: * * *

Related Definitions: * * *

Items:

a. Inertial or other equipment using accelerometers or gyros controlled by 7A001, 7A002, 7A101 or 7A102 and systems incorporating such equipment;

Note:

7A103.a does not control equipment containing accelerometers specially designed and developed as MWD (Measurement While Drilling) sensors for use in down-hole well services operations.

b. Integrated flight instrument systems, which include gyrostabilizers or automatic pilots, designed or modified for use in missiles.

c. Integrated Navigation Systems, designed or modified for use in “missiles” and capable of providing a navigational accuracy of 200m Circular Error Probable (CEP) or less.

Technical Note: An ‘integrated navigation system’ typically incorporates the following components:

1. An inertial measurement device (e.g., an attitude and heading reference system, inertial reference unit, or inertial navigation system);

2. One or more external sensors used to update the position and/or velocity, either periodically or continuously throughout the flight (e.g., satellite navigation receiver, radar altimeter, and/or Doppler radar); and

3. Integration hardware and software.

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11. In Supplement No. 1 to part 774 (the Commerce Control List), Category 9—Propulsion Systems, Space Vehicles and Related Equipment, is amended by adding Export Control Classification Number (ECCN) 9A103 immediately following ECCN 9A101, to read as follows:

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9A103 Liquid Propellant Tanks Specially Designed for the Propellants Controlled in ECCNs 1C011, 1C111 or Other Liquid Propellants Used in “Missiles.” (These Items Are Subject to the Export Licensing Authority of the U.S. Department of State, Directorate of Defense Trade Controls. See 22 CFR part 121.)

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12. In Supplement No. 1 to part 774 (the Commerce Control List), Category 9—Propulsion Systems, Space Vehicles and Related Equipment, Export Control Classification Number (ECCN) 9A120 is amended by revising the “items” paragraph in the List of Items Controlled section, to read as follows:

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9A120 Complete Unmanned Aerial Vehicles, Not Specified in 9A012, Having All of the Following

* * * * *

List of Items Controlled

Unit: * * *

Related Controls: * * *

Related Definitions: * * *

Items:

a. Having any of the following:

a.1. An autonomous flight control and navigation capability; or

a.2. Capability of controlled-flight out of the direct vision range involving a human operator; and

b. Having any of the following:

b.1. Incorporating an aerosol dispensing system/mechanism with a capacity greater than 20 liters; or

b.2. Designed or modified to incorporate an aerosol dispensing system/mechanism with a capacity of greater than 20 liters.

Note:

9A120 does not control model aircraft, specially designed for recreational or competition purposes.

Technical Notes:

1. An aerosol consists of particulate or liquids other than fuel components, by-products or additives, as part of the payload to be dispersed in the atmosphere. Examples of aerosols include pesticides for crop dusting and dry chemicals for cloud seeding.

2. An aerosol dispensing system/mechanism contains all above devices (mechanical, electrical, hydraulic, etc.), which are necessary for storage and dispersion of an aerosol into the atmosphere. This includes the possibility of aerosol injection into the combustion exhaust vapor and into the propeller slip stream.

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13. In Supplement No. 1 to part 774 (the Commerce Control List), Category 9—Propulsion Systems, Space Vehicles and Related Equipment, Export Control Classification Number (ECCN) 9B106 is amended by revising the “items” paragraph in the List of Items Controlled section, to read as follows:

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9B106 Environmental Chambers and Anechoic Chambers, as Follows (See List of Items Controlled)

* * * * *

List of Items Controlled

Unit: * * *

Related Controls: * * *

Related Definitions: * * *

Items:

a. Environmental chambers capable of simulating all of the following flight conditions:

a.1. Vibration environments equal to or greater than 10 g rms, measured ‘bare table’, between 20 Hz and 2,000 Hz imparting forces equal to or greater than 5 kN; and

a.2. Any of the following:

a.2.a. Altitude equal to or greater than 15,000 m; or

a.2.b. Temperature range of at least −50 °C to +125 °C;

Technical Notes:

1. Item 9B106.a.2.a describes systems that are capable of generating a vibration environment with a single wave (e.g., a sine wave) and systems capable of generating a broad band random vibration (i.e., power spectrum).

2. The term ‘bare table’ means a flat table, or surface, with no fixture or fittings.

b. Environmental chambers capable of simulating all of the following flight conditions:

b.1. Acoustic environments at an overall sound pressure level of 140 dB or greater (referenced to 2 × 10−5 N/m2) or with a total rated acoustic power output of 4kW or greater; and

b.2. Any of the following:

b.2.a. Altitude equal to or greater than 15,000 m; or

b.2.b. Temperature range of at least −50 °C to +125 °C.

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Dated: July 27, 2006.

Matthew S. Borman,

Deputy Assistant Secretary, for Export Administration.

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[FR Doc. E6-12072 Filed 7-28-06; 8:45 am]

BILLING CODE 3510-33-P